Justia White Collar Crime Opinion Summaries

Donald Booker owned and operated United Youth Care Services, which billed North Carolina’s Medicaid program for millions of dollars’ worth of medically unnecessary drug tests. Booker was involved in a scheme where his company, along with United Diagnostic Laboratories, recruited individuals to submit to drug testing, which was then billed to Medicaid. The company used several medical providers to certify the testing as medically necessary, even though these providers often did not meet with the beneficiaries. Booker directed the testing protocols, which included testing all participants twice per week regardless of medical need. He also arranged kickback schemes with other entities to recruit Medicaid beneficiaries for the drug tests.The United States District Court for the Western District of North Carolina convicted Booker on ten counts, including conspiracy to defraud the United States, commit health care fraud, pay illegal kickbacks, and money laundering. Booker represented himself at trial, and the jury found him guilty on all counts. The district court denied his motion for judgment of acquittal and sentenced him to 200 months in prison, considering a loss amount exceeding $9.5 million.The United States Court of Appeals for the Fourth Circuit reviewed the case and affirmed the district court’s judgment. The appellate court found that there was substantial evidence to support Booker’s convictions, including testimony from co-conspirators and evidence of kickback payments. The court also rejected Booker’s arguments regarding the nondelegation doctrine, the sufficiency of the evidence for his money-laundering convictions, and the alleged Confrontation Clause violations. The court upheld the district court’s loss-amount calculation and found Booker’s sentence to be substantively reasonable, noting that his co-defendants were not similarly situated and had cooperated with the government. View "United States v. Booker" on Justia Law

Raul Perez Cruz, a native and citizen of Mexico, pled guilty to money laundering in 2021 and was sentenced to 144 months in prison. The Department of Homeland Security initiated removal proceedings against him. He conceded removability but sought asylum, withholding of removal, and protection under the Convention Against Torture (CAT) based on past experiences with cartels and fear of retaliation due to his purported cooperation with the U.S. government.An Immigration Judge (IJ) denied his applications for asylum and withholding of removal due to his conviction of a particularly serious crime. The IJ also denied his CAT claim, finding that he did not show it was more likely than not he would be tortured upon return to Mexico, nor that he could not safely relocate within Mexico. The Board of Immigration Appeals (BIA) affirmed the IJ’s decision, agreeing that his fear of future torture was speculative and that there was no due process violation despite technical difficulties during the hearing.The United States Court of Appeals for the Ninth Circuit reviewed the case. The court held that substantial evidence supported the agency’s determination that Perez Cruz did not meet his burden to show he would more likely than not be tortured if returned to Mexico. The court also found that Perez Cruz did not overcome the presumption that the agency reviewed all evidence before it. Additionally, the court was not persuaded by his contention that audio issues during his hearing denied him due process, as there was no demonstration that the IJ prejudicially missed or misunderstood anything said during the hearing. The petition for review was denied. View "Perez Cruz v. Bondi" on Justia Law

Plaintiffs, American service members and civilians injured or killed in terrorist attacks in Afghanistan, along with their family members, sued Deutsche Bank, Standard Chartered Bank (SCB), and Danske Bank under the Anti-Terrorism Act (ATA) as amended by the Justice Against Sponsors of Terrorism Act (JASTA). They alleged that the banks aided and abetted terrorist organizations by providing banking services to customers involved in tax fraud and money laundering schemes, with proceeds allegedly funding terrorist activities. Plaintiffs also claimed SCB aided the attacks by providing banking services to fertilizer companies whose products were used to make bombs.The United States District Court for the Eastern District of New York dismissed the plaintiffs' amended complaint in its entirety for failure to state a claim. The court found that the plaintiffs did not establish a sufficient nexus between the banks' actions and the terrorist acts that caused their injuries. The court dismissed the complaint with prejudice, concluding that further amendment would be futile.The United States Court of Appeals for the Second Circuit reviewed the case and affirmed the district court's dismissal. The appellate court applied the Supreme Court's decision in Twitter, Inc. v. Taamneh, which clarified the pleading standard for aiding-and-abetting claims under JASTA. The court held that the plaintiffs did not plausibly allege that the banks were generally aware of their role in the terrorist activities or that they provided knowing and substantial assistance to the terrorist organizations. The court emphasized that the plaintiffs' allegations were too attenuated and speculative to support a claim of aiding-and-abetting liability under JASTA. View "Wildman v. Deutsche Bank" on Justia Law

Lynell Guyton was convicted by a jury of nine drug-trafficking, firearm, and money-laundering offenses. His criminal activities included ordering large quantities of fentanyl analogues from China, using Skype to communicate with suppliers, and making payments through MoneyGram. Law enforcement intercepted a package containing fentanyl analogues addressed to a pseudonym used by Guyton, leading to his arrest. Subsequent investigations revealed Guyton's continued involvement in drug trafficking and possession of firearms.The United States District Court for the Western District of Pennsylvania denied Guyton's motion for judgment of acquittal and sentenced him to 360 months' imprisonment on the primary drug charges, with concurrent sentences on the remaining counts. The court also applied recidivist enhancements based on Guyton's prior state conviction. Guyton appealed, raising several arguments, including instructional errors, constructive amendment of the indictment, and improper application of recidivist enhancements.The United States Court of Appeals for the Third Circuit reviewed the case. The court found that the District Court erred in denying Guyton's motion for judgment of acquittal on one of the firearm possession charges (Count 3) due to insufficient evidence of constructive possession. The court vacated this conviction and remanded for a judgment of acquittal on that count. However, the court affirmed the remaining convictions and sentences, finding no reversible error in the jury instructions, the alleged constructive amendment, or the application of recidivist enhancements. The court concluded that the instructional errors did not affect Guyton's substantial rights and that the evidence overwhelmingly supported the remaining convictions. View "United States v. Guyton" on Justia Law

Federal agents conducted a sting operation in which Rami Ghanem attempted to export military equipment from the United States to Libya. Ghanem pleaded guilty to six counts, including violations of the Arms Export Control Act, unlawful smuggling, and money laundering. He proceeded to trial on a charge of conspiring to acquire, transport, and use surface-to-air missiles, for which he was found guilty and initially sentenced to 360 months in prison.The United States Court of Appeals for the Ninth Circuit vacated Ghanem’s conviction on the missile conspiracy charge due to improper jury instructions on venue and remanded the case for resentencing. On remand, the district court recalculated the guidelines range as 78-97 months but imposed the same 360-month sentence, considering the same relevant conduct as before.The Ninth Circuit reviewed Ghanem’s appeal, rejecting his arguments that the district court committed procedural errors at resentencing. The court held that the district court applied the correct legal standards in declining to reduce Ghanem’s offense level for acceptance of responsibility and did not clearly err in finding that Ghanem’s failure to accept responsibility outweighed his guilty plea and truthful admissions. The court also found that the district court adequately explained its sentencing decision, addressed Ghanem’s argument about sentencing disparities, and correctly considered conduct underlying the dismissed charge.The Ninth Circuit affirmed the 360-month sentence, concluding that the district court did not abuse its discretion in determining that the sentence was warranted under the 18 U.S.C. § 3553(a) factors. The court also rejected Ghanem’s constitutional arguments under Apprendi v. New Jersey, holding that the district court’s reliance on conduct underlying the dismissed charge did not violate the Fifth or Sixth Amendments. View "United States v. Ghanem" on Justia Law

Mark Johnson was convicted of wire fraud and conspiracy to commit wire fraud in 2017. The charges stemmed from a 2011 transaction where HSBC, under Johnson's leadership, converted U.S. dollars into British pounds for Cairn Energy. The government presented two theories of fraud to the jury: the now-invalid right-to-control theory and the misappropriation theory. Johnson filed a Petition for a writ of coram nobis after the Supreme Court's decision in Ciminelli v. United States invalidated the right-to-control theory.The United States District Court for the Eastern District of New York dismissed Johnson's Petition, concluding that the jury would have convicted him under the valid misappropriation theory, rendering the inclusion of the invalid right-to-control theory harmless. Johnson appealed this decision.The United States Court of Appeals for the Second Circuit reviewed the case. The court found that the government's case under the misappropriation theory was weak and expressed grave doubt that the presentation of the right-to-control theory was harmless. The court noted that the misappropriation theory required proving a fiduciary relationship between Johnson and Cairn, which was not clearly established, and that Johnson misused confidential information, which was also not convincingly demonstrated.The Second Circuit held that the inclusion of the invalid right-to-control theory was not harmless and that the jury was likely influenced by it. Consequently, the court reversed the district court's judgment and remanded the case for entry of an order granting Johnson's Petition for a writ of coram nobis. View "Johnson v. United States" on Justia Law

Mark Schena operated Arrayit, a medical testing laboratory in Northern California, which focused on blood tests for allergies. Schena marketed these tests as superior to skin tests, despite their limitations, and billed insurance providers up to $10,000 per test. To maintain a steady flow of patient samples, Schena paid marketers a percentage of the revenue they generated by pitching Arrayit’s services to medical professionals, often misleading them about the tests' efficacy. During the COVID-19 pandemic, Schena transitioned to COVID testing, using similar deceptive marketing practices to bundle allergy tests with COVID tests.The United States District Court for the Northern District of California denied Schena’s motion to dismiss the EKRA counts, arguing that his conduct did not violate the statute as a matter of law. The jury convicted Schena on all counts, including conspiracy to commit healthcare fraud, healthcare fraud, conspiracy to violate EKRA, EKRA violations, and securities fraud. The district court sentenced Schena to 96 months in prison and ordered him to pay over $24 million in restitution.The United States Court of Appeals for the Ninth Circuit reviewed the case and affirmed Schena’s convictions. The court held that 18 U.S.C. § 220(a)(2)(A) of EKRA covers payments to marketing intermediaries who interface with those who do the referrals, and there is no requirement that the payments be made to a person who interfaces directly with patients. The court also concluded that a percentage-based compensation structure for marketing agents does not violate EKRA per se, but the evidence showed wrongful inducement when Schena paid marketers to unduly influence doctors’ referrals through false or fraudulent representations. The court affirmed Schena’s EKRA and other convictions, vacated in part the restitution order, and remanded in part. View "United States v. Schena" on Justia Law

Melissa Wanna discovered her profile on MyLife, an information broker, which contained a poor reputation score and references to court records. MyLife offered to provide details or remove the profile for a fee. Believing she lost employment opportunities due to this profile, Wanna filed a class action lawsuit against several Lexis entities, alleging violations of the Fair Credit Reporting Act (FCRA), Driver’s Privacy Protection Act (DPPA), and the federal Racketeer Influenced and Corrupt Organizations Act (RICO), along with several Minnesota state law claims.The United States District Court for the District of Minnesota dismissed Wanna’s claims, concluding that MyLife was not Lexis’s agent. The court found that the data-licensing agreement between Lexis and MyLife explicitly stated that their relationship was that of independent contractors, not principal and agent. As a result, Wanna’s federal claims, which depended on an agency relationship, failed. The district court also declined to exercise supplemental jurisdiction over Wanna’s state law claims and dismissed them without prejudice.The United States Court of Appeals for the Eighth Circuit reviewed the district court’s decision de novo and affirmed the dismissal. The appellate court agreed that Wanna’s federal claims required an agency relationship between Lexis and MyLife, which was not established. The court found that MyLife did not have actual or apparent authority to act on Lexis’s behalf, nor did Lexis ratify MyLife’s actions. Additionally, the appellate court held that the district court did not abuse its discretion in declining to exercise supplemental jurisdiction over the state law claims. View "Wanna v. RELX Group, PLC" on Justia Law

The case involves the appeal of Lev Aslan Dermen, who was convicted of conspiracy to commit mail fraud, conspiracy to commit money laundering offenses, and money laundering. The charges stem from a scheme orchestrated by Dermen and his co-conspirators to file false claims for federal biofuel incentives, resulting in over $500 million in fraudulent payouts. The scheme involved laundering the fraud proceeds through various channels, including domestic and foreign entities and accounts.In the lower court, the United States District Court for the District of Utah conducted a seven-week trial, after which the jury convicted Dermen on all counts. Dermen was sentenced to forty years in prison and ordered to forfeit assets and pay a money judgment. Dermen raised several issues on appeal, including juror misconduct, the impact of the COVID-19 pandemic on the trial, alleged Brady violations, improper expert testimony, insufficient evidence for some convictions, and errors in sentencing and forfeiture orders.The United States Court of Appeals for the Tenth Circuit reviewed Dermen's appeal. The court rejected all of Dermen's arguments, affirming the lower court's decisions. The court found no abuse of discretion in the district court's handling of juror misconduct and the impact of COVID-19. It also held that the alleged Brady violations were not material, the expert testimony was properly admitted, and the evidence was sufficient to support the convictions. The court upheld the sentencing and forfeiture orders, finding no error in the district court's application of the preponderance-of-the-evidence standard and its admission of hearsay evidence in the forfeiture proceedings. View "United States v. Dermen" on Justia Law

From the 1990s through the 2010s, Patrice Runner operated a mass-mailing enterprise that used false and misleading advertising to sell purportedly supernatural objects and psychic services. Customers paid for rare gems and personalized psychic services, but received junk items and generic responses. A jury convicted Runner of mail and wire fraud, among other crimes.Runner appealed, arguing that the Government’s theory of fraud was legally defective, which he claimed affected his indictment, the sufficiency of the evidence, and the jury instructions. The United States District Court for the Eastern District of New York had denied Runner’s motion to dismiss the indictment and rejected his post-trial motions for acquittal or a new trial. The court also sentenced Runner to ten years’ imprisonment, despite a Guidelines recommendation of life imprisonment, based on a loss calculation of over $150,000,000.The United States Court of Appeals for the Second Circuit reviewed the case. The court rejected Runner’s arguments, citing the Supreme Court’s decision in Kousisis v. United States, which supported the Government’s fraudulent-inducement theory. The court found that the indictment sufficiently alleged that Runner used material misstatements to induce customers to pay money. The evidence presented at trial was deemed sufficient to support the jury’s finding of fraudulent intent, as Runner’s promotions contained intentional lies about the origin and nature of the goods and services sold. The jury instructions were also found to be adequate in conveying the intent-to-harm requirement.The Second Circuit affirmed the district court’s judgment, holding that any error in the loss calculation at sentencing was harmless, as the district court would have imposed the same sentence regardless. View "United States v. Runner" on Justia Law