Justia White Collar Crime Opinion Summaries

Patrick Barkers-Woode and Nana Mensah were involved in a conspiracy to defraud Sprint Corporation by exploiting a sales promotion that offered smartphones to new customers at no upfront cost. Conspirators in Ghana obtained personal information of unsuspecting individuals and used it to sign them up as new Sprint customers, arranging for the smartphones to be sent to vacant homes. Barkers-Woode, Mensah, and others tracked, retrieved, and delivered the smartphones to a buyer. The conspiracy was responsible for 274 orders of 833 smartphones, resulting in $357,565.92 in actual loss and $595,399.76 in intended loss. A jury convicted both defendants of mail fraud, aggravated identity theft, and conspiracy to commit these offenses.The United States District Court for the Middle District of Pennsylvania sentenced Barkers-Woode to 111 months’ imprisonment and Mensah to 99 months’ imprisonment. Both defendants appealed, challenging their sentences and, in Barkers-Woode’s case, the admission of certain evidence during the trial.The United States Court of Appeals for the Third Circuit reviewed the case. The court found that the District Court erred in applying a 14-point enhancement based on intended loss rather than actual loss, as required by the court's decision in United States v. Banks. This error affected the defendants' substantial rights, leading the court to reverse and remand for resentencing based on actual loss. The court also upheld the District Court's application of a 2-point enhancement for the number of victims, recognizing that victims of identity theft are included within the definition of "victim" under the Sentencing Guidelines.Additionally, the court affirmed the District Court's decision to admit testimony about a related fraud against Walmart, as it directly proved the conspiratorial agreement. The court also upheld the decision to require Barkers-Woode to proceed pro se after his sixth attorney withdrew, citing his extremely dilatory conduct. Finally, the court rejected Mensah's argument that sentencing enhancements should be based on facts charged in the indictment and proved beyond a reasonable doubt, reaffirming the precedent set in United States v. Grier. View "USA v. Barkers-Woode" on Justia Law

Larry Householder, former Speaker of the Ohio House of Representatives, and lobbyist Matthew Borges were convicted of conspiring to solicit and receive nearly $60 million in exchange for passing a billion-dollar bailout for a failing nuclear energy company, FirstEnergy Corp. Householder used the funds to support his bid for the speakership and to recruit candidates who would vote for him. Borges played a role in the conspiracy by attempting to disrupt a referendum campaign against the bailout legislation.The United States District Court for the Southern District of Ohio at Cincinnati found both Householder and Borges guilty after a 26-day trial. Householder was convicted of multiple counts, including public-official bribery, private-citizen bribery, and money laundering. Borges was also found guilty of participating in the conspiracy.The United States Court of Appeals for the Sixth Circuit reviewed the case and found no reversible error, affirming the convictions. The court held that the evidence was sufficient to support the jury's findings that Householder and Borges engaged in a quid pro quo arrangement with FirstEnergy. The court also upheld the jury instructions, finding them consistent with applicable law, and rejected Householder's claims of insufficient evidence, right to counsel violations, and judicial bias. Additionally, the court found that the district court did not abuse its discretion in its evidentiary rulings or in admitting the guilty pleas of co-conspirators.Householder's sentence of twenty years, the statutory maximum under RICO, was deemed procedurally and substantively reasonable. The court emphasized the magnitude and severity of Householder's offense, referring to it as the "biggest corruption case in Ohio's history." Borges's arguments regarding the sufficiency of the evidence and the district court's evidentiary rulings were also rejected, and his conviction was affirmed. View "United States v. Householder" on Justia Law

Ryan Anderson pled guilty to multiple charges, including second-degree robbery, grand theft, retail theft, and second-degree burglary. These charges stemmed from a scheme where he stole "Scratchers" lottery tickets from various retailers and redeemed the winning tickets for prize money. The trial court ordered Anderson to pay $179,231.65 in restitution to the California State Lottery, which included the value of the stolen tickets, the prize money he collected, and commissions paid to retailers.The trial court's restitution order was based on a detailed chart presented by the prosecution, which outlined the value of the stolen tickets, the amounts reimbursed to retailers by the Lottery, and the prize money Anderson collected. Anderson did not dispute the Lottery's entitlement to recoup the prize money and retailer commissions but argued that the prize money should have been deducted from the retail value of the stolen tickets. The trial court rejected this argument, finding that the stolen tickets represented lost sales revenue.The California Court of Appeal, First Appellate District, reviewed the case. Anderson's appellate counsel filed a brief under People v. Wende, identifying no specific issues for appeal. The appellate court conducted an independent review and invited supplemental briefs on whether the trial court abused its discretion in calculating the restitution award. The appellate court affirmed the trial court's decision, holding that the restitution order was appropriate and that the Lottery did not receive a windfall. The court found that the Lottery's reimbursement to retailers shifted the loss from the retailers to the Lottery, and Anderson was responsible for the full amount of the stolen tickets' retail value, the prize money he collected, and the retailer commissions. The judgment was affirmed. View "People v. Anderson" on Justia Law

In early 2020, the Sioux Falls Police Department began investigating Robin and Lanny Vensand for methamphetamine distribution. Surveillance and traffic stops led to drug seizures, and a search of their residence yielded 844 grams of methamphetamine and $27,000 in cash. The investigation expanded with the DEA's involvement, revealing that Salvador Madrigal Jr. orchestrated a drug transportation network from California to South Dakota, employing couriers like William Hartwick and Maria Magana-Zavala. Madrigal's wife, Anahi Cardona, assisted in coordinating logistics. The operation also involved money laundering activities, with Madrigal, Cardona, and Madrigal's mother structuring bank deposits to avoid federal reporting requirements.The United States District Court for the District of South Dakota convicted Madrigal and Cardona of conspiracy to distribute methamphetamine and conspiracy to commit money laundering. Madrigal was sentenced to 400 months for methamphetamine distribution and 240 months for money laundering, to be served concurrently. Cardona was sentenced to 265 months for methamphetamine distribution and 240 months for money laundering, also to be served concurrently. Cardona's requests for safety-valve relief and challenges to the drug quantity attributed to her were denied.The United States Court of Appeals for the Eighth Circuit reviewed the case. Madrigal challenged the sufficiency of the evidence, arguing coercion by the cartel, but the court found ample evidence supporting his convictions. Cardona also challenged the sufficiency of the evidence, the admission of hearsay testimony, the drug quantity attributed to her, the denial of safety-valve relief, and claimed an unwarranted sentencing disparity. The court found sufficient evidence of her involvement in the methamphetamine conspiracy, upheld the admission of testimony as statements made in furtherance of the conspiracy, and found no error in the drug quantity determination or the denial of safety-valve relief. The court also found no abuse of discretion in her sentencing. The convictions and sentences were affirmed. View "United States v. Madrigal" on Justia Law

Federal law enforcement investigated crystal-methamphetamine trafficking in rural eastern Tennessee in July 2019, leading them to Derrick Mitchell in Knoxville. In October 2020, authorities executed a search warrant at Mitchell’s home, finding drugs, firearms, ammunition, and cash. Mitchell pleaded guilty to conspiring to distribute methamphetamine and to commit money laundering. He waived his right to appeal unless the district court imposed an above-Guidelines sentence. The district court accepted his plea and imposed a below-Guidelines sentence.The United States District Court for the Eastern District of Tennessee accepted Mitchell’s plea agreement, which included a stipulation that no other upward enhancements would apply apart from a two-level increase for money laundering. However, the probation office recommended additional enhancements, including one for possessing a firearm in connection with a drug-trafficking offense. Mitchell’s counsel did not initially object to the presentence report, and the district court adopted it in full. Later, Mitchell’s counsel raised the issue of the firearm enhancement, but the court explained that the stipulations in the plea agreement were not binding.The United States Court of Appeals for the Sixth Circuit reviewed the case. The court held that Mitchell’s appeal must be dismissed because he waived his right to appeal under the plea agreement, which was voluntarily accepted. The court found no plain error in the district court’s acceptance of Mitchell’s plea, as the court had adequately informed him of the consequences, and Mitchell understood the nature of his plea. The court also determined that the government did not breach the plea agreement, as it had not promised that only one enhancement would apply and had not objected to the probation office’s recommendation. The appeal was dismissed in accordance with the plea agreement’s appellate waiver provision. View "United States v. Mitchell" on Justia Law

Julian R. Bear Runner, an enrolled member of the Oglala Sioux Tribe (OST) and its President from December 2018 to December 2020, was convicted of wire fraud, larceny, and embezzlement and theft from an Indian Tribal Organization. He manipulated the Tribe’s travel policies to embezzle over $80,000, which he used for gambling at the Prairie Wind Casino. Bear Runner pressured travel specialists to approve fraudulent travel requests and never repaid the advance payments.The United States District Court for the District of South Dakota sentenced Bear Runner to 22 months in prison and ordered $82,484 in restitution. Bear Runner appealed, arguing that the government failed to prove the requisite criminal intents for his offenses and that the district court committed procedural and substantive errors in sentencing.The United States Court of Appeals for the Eighth Circuit reviewed the case. The court affirmed the jury’s verdict, stating that sufficient evidence supported the finding that Bear Runner intended to defraud, steal, and embezzle. The court noted that fraudulent intent could be inferred from the facts and circumstances surrounding Bear Runner’s actions, including his manipulation of the approval process and his failure to repay the funds.Regarding sentencing, the court found no procedural error, as Bear Runner did not accept responsibility for his actions. The court also found no substantive error, as the district court acted within its discretion in considering similarly situated defendants and determining that Bear Runner’s individual circumstances warranted a different outcome. The judgment of the district court was affirmed. View "United States v. Runner" on Justia Law

Richard Hall and his partners established a pharmacy business to capitalize on the market for compounded drugs, targeting federal insurers for high reimbursements. They created two pharmacies, Rxpress and Xpress Compounding, to handle private and federal insurance claims, respectively. The business model involved paying marketers commissions to secure prescriptions from physicians, which led to over $59 million in federal healthcare reimbursements. Hall and his partners were indicted for conspiracy to defraud the United States, paying and receiving illegal kickbacks, and money laundering.The United States District Court for the Northern District of Texas tried the case. The jury found Hall guilty on multiple counts, including conspiracy to defraud the United States and paying illegal kickbacks. The district court sentenced Hall to 52 months in prison, three years of supervised release, and ordered him to pay over $59 million in restitution. Hall's motion for release pending appeal was denied by both the district court and the appellate court.The United States Court of Appeals for the Fifth Circuit reviewed the case. Hall raised four arguments on appeal: improper jury instructions regarding the burden of proof for the safe-harbor defense under the Anti-Kickback Statute (AKS), the definition of "employee" in the jury instructions, the exclusion of his proposed jury instruction on kickback recipients, and the imposition of restitution. The Fifth Circuit held that the district court correctly placed the burden of persuasion for the safe-harbor defense on Hall, properly defined "employee" in the jury instructions, and did not err in excluding Hall's proposed instruction on kickback recipients. The court also upheld the restitution order, finding it appropriate based on the total loss to the government. Consequently, the Fifth Circuit affirmed Hall's convictions and the district court's restitution order. View "United States v. Hall" on Justia Law

Mark Sorensen, owner of SyMed Inc., a Medicare-registered distributor of durable medical equipment, was involved in a business arrangement with PakMed LLC, Byte Success Marketing, and Dynamic Medical Management. They advertised orthopedic braces, obtained signed prescriptions from patients' doctors, distributed the braces, and collected Medicare reimbursements. Byte and KPN, another marketing firm, advertised the braces, and interested patients provided their information, which was forwarded to call centers. Sales agents then contacted patients, generated prescription forms, and faxed them to physicians for approval. Physicians retained discretion to sign and return the forms, with many choosing not to.A federal grand jury indicted Sorensen on four counts: one count of conspiracy and three counts of offering and paying kickbacks for Medicare referrals. The jury found Sorensen guilty on all counts. Sorensen moved for acquittal, arguing insufficient evidence and lack of awareness of the scheme's illegality. The district court denied his motions, finding the evidence sufficient for the jury to conclude Sorensen knew the fee structure and purchase of doctors' orders were illegal. Sorensen was sentenced to 42 months in prison but was released on bond pending appeal.The United States Court of Appeals for the Seventh Circuit reviewed the case and reversed the district court's judgment due to insufficient evidence. The court found that Sorensen's payments to PakMed, KPN, and Byte were for advertising, manufacturing, and shipping services, not for patient referrals. The court emphasized that the Anti-Kickback Statute targets payments to individuals with influence over healthcare decisions, which was not the case here. The court concluded that Sorensen's actions did not violate the statute, as there was no evidence of improper influence over physicians' independent medical judgment. View "USA v Sorensen" on Justia Law

The case involves Salifou Conde, who was convicted of wire fraud, bank fraud, and conspiracy to commit both frauds. The fraudulent activities were related to the theft of rent assistance checks from New York City's Human Resources Administration (HRA). These checks, intended for qualifying individuals' landlords, were often returned as undeliverable and subsequently misappropriated by Conde and his co-conspirators. The fraudulent checks were deposited into various bank accounts, including Conde's, and used to pay for services such as cable and internet.In the United States District Court for the Southern District of New York, Conde was found guilty on all counts following a jury trial. He was sentenced to 55 months in prison and a five-year term of supervised release. The evidence against him included bank records, ATM surveillance footage, and an electronically generated record from a telecommunication company showing payments for services linked to the fraudulent bank accounts.Conde appealed to the United States Court of Appeals for the Second Circuit, arguing that the telecommunication company's record was improperly admitted as a self-authenticating business record, violating his Sixth Amendment right of confrontation. The appellate court reviewed the district court's decision for abuse of discretion and found no error. The court held that the record was admissible under Federal Rules of Evidence 803(6) and 902(11) as a business record, and its admission did not violate Conde's confrontation rights. Consequently, the appellate court affirmed the district court's judgment. View "United States v. Conde" on Justia Law

The case involves an FBI investigation into Jeffrey Alan Siegmeister, the State Attorney for the Third Judicial Circuit of Florida, and Marion Michael O'Steen, a defense attorney. The investigation began after Andy Tong, who was being prosecuted by Siegmeister, informed the FBI that O'Steen would have to pay Siegmeister $50,000 for a favorable case disposition. The investigation concluded with a grand jury indictment against Siegmeister and O'Steen, charging them with multiple counts, including conspiracy to engage in bribery and extortion.In the United States District Court for the Middle District of Florida, Siegmeister entered a plea agreement and pled guilty to several counts, including conspiracy and bribery. O'Steen stood trial on four counts. The jury found O'Steen not guilty on Counts One and Two but guilty on Counts Three and Four. The District Court sentenced O'Steen to concurrent prison terms of 44 months, followed by supervised release, and ordered him to pay fines and restitution.The United States Court of Appeals for the Eleventh Circuit reviewed the case. The court found that the jury instructions on Count Three were flawed, as they allowed for a conviction based on an incorrect legal theory. The court also determined that the evidence was insufficient to prove that O'Steen knew of the fifteen-day reporting requirement for filing Form 8300, as required by Count Four. Consequently, the Eleventh Circuit reversed the District Court's judgment and instructed the lower court to enter a judgment of acquittal for O'Steen. View "USA v. O'Steen" on Justia Law