Justia White Collar Crime Opinion Summaries

Defendant Karen McClaflin pled guilty to two counts stemming from the operation of a “fix and flip” real estate Ponzi scheme which defrauded investors of more than $14.5 million dollars. At sentencing, the district court calculated the advisory sentencing guidelines at 135 to 168 months’ imprisonment, applied a 6-level enhancement for substantial financial hardship to more than twenty-five victims, and then determined a downward variant sentence of 96 months was appropriate. On appeal, McClaflin argued the district court: (1) abused its discretion by denying her motion for an additional continuance of the sentencing hearing; (2) procedurally erred by imposing the 6-level enhancement based upon victim impact statements; and (3) failed to consider all of the requisite 18 U.S.C. 3553(a) factors. The Tenth Circuit determined the district court did not plainly err when it sentenced McClaflin, therefore it affirmed the judgment and sentence. View "United States v. McClaflin" on Justia Law

Robert Holloway was convicted by jury of four counts of wire fraud, and one count of submitting a false tax return. Holloway was the president and CEO of US Ventures, a company that traded in the futures market. Holloway told investors he had developed a special algorithm that allowed him to trade without losses. He claimed that because of the algorithm he “could trade the markets and make money whether the market went up or the market went down.” Holloway’s grandiose claims were false, and revealed to be a Ponzi scheme. The district court sentenced Holloway to 225 months’ imprisonment, after applying a six-level enhancement for crimes involving 250 or more victims under U.S.S.G. 2B1.1(b)(2)(C) (2014). After unsuccessfully challenging his conviction and sentence on direct appeal, Holloway filed a 28 U.S.C. 2255 motion, arguing: (1) a total breakdown of communication between Holloway and his trial counsel caused his trial counsel to perform ineffectively; (2) his trial counsel acted ineffectively by failing to argue that the evidence did not support the district court’s application of the six-level sentencing enhancement; and (3) the prosecution violated his due process rights by failing to turn over to the defense favorable information possessed by a prosecution witness contrary to Brady v. Maryland, 373 U.S. 83 (1963). The district court denied Holloway’s 2255 motion, but granted a certificate of appealability on all three issues. Finding no reversible error, the Tenth Circuit affirmed the district court judgment. View "United States v. Holloway" on Justia Law

In 2003, Cordaro and his co-defendant were elected as two of three Lackawanna County, Pennsylvania county commissioners. About 30 percent of Ackers’ business was municipal engineering, mostly for Lackawanna County. McLaine, Acker’s principal, expressed concerns to Cordaro's friend, Hughes. Hughes arranged a meeting, telling McLaine to bring a list of Acker's existing work for the county. McLaine’s list included the Lackawanna Watershed 2000 Program, a multi-year project based on a $30 million congressional grant; work on the Main Street and Gilmartin Street Bridges; work for several municipal authorities; and surveying, paving, and mapping. Cordaro stated, “I think I can let you keep that, . . . if we’re having fundraisers you’re going to have to participate and support us.” McLaine agreed. After becoming aware that Acker might lose two large contracts, McLaine called Hughes, who called Cordaro. Hughes asked, “how much money ... to give for the work.” Cordaro said, “maybe $15,000.” Hughes told McLaine that if he gave him $10,000 a month for Cordaro, Hughes could guarantee that Acker would keep its contracts and that he would lose his work if he did not pay. Payments began. In 2011, Cordaro was convicted of bribery, 18 U.S.C. 666(a)(1)(B); Hobbs Act extortion, section 1951(a); and racketeering, sections 1962(c) and (d). The court instructed the jury that those crimes required an “official act.” In 2016, the Supreme Court (McDonnell) clarified what constitutes an “official act.” The Third Circuit affirmed the rejection of Cordaro’s habeas corpus (28 U.S.C. 2241) because Cordaro cannot show that it is more likely than not that no reasonable juror properly charged under McDonnell would have convicted him. View "Cordaro v. United States" on Justia Law

Terence Bruce and Stanley Nicholson were convicted by juries of common-law misconduct in office. Defendants were federal border patrol agents assigned to a Hometown Security Team (HST) task force that included Michigan State Police troopers, border patrol agents, and other officers operating in Jackson County, Michigan. Defendants had been assigned to ensure perimeter security around a home during the execution of a search warrant and to help search the home and remove confiscated evidence. The task force kept a tabulation of items seized, but defendants took additional property not included on the tabulation. Defendant Nicholson took an antique thermometer and barometer device, insisting that it was junk, and he accidentally ruined the device when he took it home to clean it. Defendant Bruce took a wheeled stool with a leather seat home with him, but he returned it to the police department when asked about it. Defendants were charged with common-law misconduct in office as well as larceny in a building. Defendants moved for directed verdicts, arguing that they were not public officers for purposes of the misconduct-in-office offense. The court denied the motions, and the jury convicted defendants of misconduct in office but acquitted them of larceny in a building. Defendants appealed. In an unpublished per curiam opinion, the Court of Appeals, held that defendants were not public officers and vacated the convictions. The State appealed. The Michigan Supreme Court held that whether defendants were public officers depended on the duties they exercised and the color of office under which they acted. In these cases, because defendants exercised duties of enforcement of Michigan law and acted under authority granted to them by Michigan statute, they acted as public officers. Accordingly, the Supreme Court reversed the Court of Appeals and remanded to that Court for consideration of defendants’ remaining issues. View "Michigan v. Bruce" on Justia Law

Plaintiff Curtis Ridlon was formerly employed as an investment adviser. In April 2017, the New Hampshire Bureau of Securities Regulation (Bureau) brought an administrative enforcement action against Ridlon, alleging that he charged clients approximately $2.8 million in improper fees. The relief sought by the Bureau included civil penalties of up to $3,235,000, restitution in the amount of $1,343,427.20, and disgorgement of up to $1,513,711.09. By agreement of the parties, Ridlon filed a declaratory judgment petition in the trial court asserting that he was constitutionally entitled to a jury trial and seeking to enjoin the administrative proceedings from continuing. In response, the Bureau filed a motion to dismiss. The trial court denied the Bureau’s motion, ruling that Part I, Article 20 of the State Constitution afforded Ridlon the right to a jury trial, and enjoining any further administrative proceedings by the Bureau. The New Hampshire Supreme Court disagreed with the superior court’s judgment: “the cases cited by the trial court, and relied upon by Ridlon on appeal for the proposition that claims involving statutory penalties above the constitutional limit obligate a trial by jury, do not address the applicability of the jury trial right under the State Constitution to what we have described as “purely statutory” causes of action. When assessing the right to a jury trial in such circumstances, we have explained that we must “consider the comprehensive nature of the statutory framework to determine whether the jury trial right extends to the action. . . . the statutory procedures established by the legislature for the regulation of securities ‘militate[ ] against any implication of a trial by jury.’” The trial court’s judgment was reversed and the matter remanded for further proceedings. View "Ridlon v. New Hampshire Bureau of Securities Regulation" on Justia Law

Wendy and Daryl Yurek were charged with tax evasion and bankruptcy fraud. After a joint jury trial, the Yureks were convicted on both offenses. The district court then sentenced Mrs. Yurek to a prison term of 27 months, leading her to appeal the conviction and sentence. On appeal, Mrs. Yurek challenged the sufficiency of the evidence presented against her, and claimed the district court erred in denying her motions for severance and a new trial. The Tenth Circuit affirmed in part and reversed in part: affirming Mrs. Yurek’s conviction, but vacated her sentence. The Court determined the district court applied the wrong test when deciding whether to grant a mitigating-role adjustment. View "United States v. Yurek (Wendy)" on Justia Law

Defendant Sara Salcido provided immigration services. Under the Immigration Consultant Act (Act), with certain exceptions, it is illegal for a person to act as an “immigration consultant” (as defined in the Act) unless he or she has complied with a host of consumer protection requirements, such as passing a background check and filing a bond. Defendant failed to comply with these. As a result, defendant was convicted on one count of misdemeanor unlawfully engaging in the business of an immigration consultant. The State argued, however, that each time defendant took money from a client in exchange for providing immigration services, she was committing theft by false pretenses, because she was not a legally qualified immigration consultant under state law. The trial court agreed; thus, it also convicted her on six counts of grand theft, and two counts of petty theft. It dismissed two additional counts of grand theft as time-barred. Defendant was placed on probation for five years. Defendant contended the Act was preempted by federal law. She demurred to the complaint on this ground. The Court of Appeal determined federal law did not preempt the application of the Act to defendant. View "California v. Salcido" on Justia Law

Defendant Jedadiah Bolding was convicted of one count of grand theft and eight counts of money laundering. On appeal, he challenged his money laundering convictions, in part, on the ground that the prosecution failed to offer sufficient evidence tracing the illegally obtained money to the monetary transactions involved in each of the money laundering counts. After review, the Court of Appeal determined there was sufficient evidence supporting defendant’s money laundering convictions based on the language of Penal Code section 186.10(a), and current analogous federal law on money laundering. In the unpublished portions of its opinion, the Court concluded: (1) there was sufficient evidence of money laundering in count 25 of the operative charging document; (2) defendant forfeited an issue regarding the jury instructions for the money laundering counts; (3) the sentencing enhancements for white collar crime should have been reversed; (4) the trial court did not err by imposing consecutive rather than concurrent sentences on the money laundering counts; and (5) the minute order and abstract of judgment must be amended to reflect the correct amount of defendant’s custody credits. View "California v. Bolding" on Justia Law

Shawn Gorrell was an insurance salesman based in Tulsa, Oklahoma. His father was an accountant in Tulsa whose clients included several dentists and Gorrell sold insurance to some of them. In 2009, Gorrell began to pitch investments to these dentists that were outside of his typical insurance products. Some dentists initially gave Gorrell modest sums to invest, but later the amounts ballooned to hundreds of thousands of dollars. Gorrell would ultimately be convicted by jury on three counts of wire fraud and three counts of tax evasion. He appealed only the tax evasion charges, seeking a new trial on those counts. He argued the trial court plainly erred when it instructed the jury to consider “specified theories of an affirmative act (an element of tax evasion), which were legally invalid theories of guilt as a matter of law, the jury was instructed to be unanimous in finding an affirmative act, and the jury returned a general verdict of guilt.” The Tenth Circuit concluded the district court did not err, “much less plainly err,” in its instructions to the jury. Given the evidence elicited at trial, in light of those instructions, Gorrell’s convictions for tax evasion were supported. View "United States v. Gorrell" on Justia Law

Diana Merritt was convicted of ten counts of mortgage fraud in 2015. The actual crimes were committed between 2008 and 2009, but law enforcement did not discover the extent of those crimes until 2014. Merritt argued the charging document did not sufficiently provide information that the alleged charges occurred within the applicable statute of limitations. She also argued failure to comply with the statute of limitations constituted a violation of her due process rights. The Court of Appeals affirmed Merritt's convictions, and finding no reversible error, so too did the Washington Supreme Court. View "Washington v. Merritt" on Justia Law