Justia White Collar Crime Opinion Summaries

Jones owned SAM Packaging and owed several hundred thousand dollars in back taxes for 2006-2008. Jones refused to provide the IRS with bank statements, and later submitted statements, with blacked-out parts. He submitted financial disclosure forms, disclosing accounts at Mutual of Omaha Bank (MO), but not accounts at Community Credit Union. He directed his financial activity to the undisclosed accounts. When the IRS levied on Jones’s MO accounts, they were nearly empty. Jones commingled personal and business accounts, then began dealing in cash. He refused to turn over accounts receivable, stating that he would terminate the business before doing so. In 2010, he declared that SAM had been “suspended” and he was unemployed. He had started a new company to secretly serve his customers. The IRS summonsed customers and learned Jones had performed work without billing them, preventing levy on his accounts receivable. Jones pled guilty to tax evasion, 26 U.S.C. 7201. The district court imposed a two-level enhancement for use of sophisticated means, as recommended in the PSR. After a three-level reduction for acceptance of responsibility, the district court calculated a Guidelines range of 30 to 37 months and sentenced Jones to 24 months. The Eighth Circuit affirmed, rejecting an argument that Jones’s actions were typical of tax evasion offenses and did not make detection more difficult. View "United States v. Jones" on Justia Law

For about three years ending in 2009, five schemers bilked unsuspecting investors of an estimated $190 million in a Minnesota Ponzi scheme. They took more than $79 million of the investors’ funds with the help of Associated Bank. After the scheme was exposed, the district judge in a related case appointed a receiver to take custody of funds owned by the schemers’ estates and by organizations under their control (receiver entities). The receiver filed suit on behalf of the receiver entities, alleging Associated Bank aided and abetted the scheme. The district court granted Associated Bank’s motion to dismiss. The Eighth Circuit reversed and remanded, stating that, while it could not predict whether a jury will find Associated Bank either had actual knowledge of or substantially assisted in the asserted torts, the facts alleged in the complaint give the receiver’s claims “facial plausibility.” The receiver pled “factual content that allows the court [and a jury] to draw the reasonable inference that the defendant is liable for the misconduct alleged.” View "Zayed v. Associated Bank, N.A." on Justia Law

While inspecting a commercial fishing vessel in the Gulf of Mexico, a federal agent found that the catch contained undersized red grouper, in violation of conservation regulations, and instructed the captain, Yates, to keep the undersized fish segregated from the rest of the catch until the ship returned to port. After the officer departed, Yates told the crew to throw the undersized fish overboard. Yates was convicted of destroying, concealing, and covering up undersized fish to impede a federal investigation under 18 U. S. C. 519, which applies when a person “knowingly alters, destroys, mutilates, conceals, covers up, falsifies, or makes a false entry in any record, document, or tangible object with the intent to impede, obstruct, or influence” a federal investigation. Yates argued that section 1519 originated in the Sarbanes-Oxley Act, to protect investors, and that its reference to “tangible object” includes objects used to store information, such as computer hard drives. The Eleventh Circuit affirmed. The Supreme Court reversed, holding that “tangible object” refers to one used to record or preserve information. Section 1519’s position within Title 18, Chapter 73 and its title, “Destruction, alteration, or falsification of records in Federal investigations and bankruptcy,” signal that it was not intended to serve as a cross-the-board ban on the destruction of physical evidence. The words immediately surrounding “tangible object,” “falsifies, or makes a false entry in any record [or] document,” also indicate the contextual meaning of that term. Even if traditional tools of statutory construction leave any doubt about the meaning of the term, it would be appropriate to invoke the rule of lenity. View "Yates v. United States" on Justia Law

Adejumo pled guilty to bank fraud and aggravated identity theft and was sentenced to 124 months in prison. Adejumo did not waive his ability to present argument on the amount of the loss to the victims. A year later, the government moved to amend the judgment to add a restitution obligation of $1.1 million. In support, it provided a single page exhibit containing the names of four asserted victim banks and amounts owed to each. Although Adejumo's trial counsel received electronic court filing (ECF) notice of this motion, he did not respond nor inform Adejumo of it. Trial counsel had withdrawn as appellate counsel. Substitute counsel had been appointed, but the ECF system still showed trial counsel as counsel of record. The district court entered the requested restitution order. Two months later it denied Adejumo's motion to reopen or for reconsideration. The Eighth Circuit reversed, finding that the district court lacked sufficient information to set restitution. View "United States v. Adejumo" on Justia Law

Defendant, employed as the property manager of a condominium association, was convicted of wire fraud for embezzling funds from the condominium association and bank fraud for taking out an unauthorized loan in the condominium association's name. The district court applied a four-level sentencing enhancement under U.S.S.G. 2B1.1(b)(2)(B), which applies to offenses involving 50 or more victims. The court affirmed the sentence, concluding that the district court properly counted the individual tenants as victims (more than 70 tenants total) and, therefore, properly applied the enhancement. View "United States v. Iovino" on Justia Law

Defendant appealed his conviction and sentence for one count of conspiracy to commit health care fraud; eight counts of health care fraud; one count of conspiracy to pay health care kickbacks; and three counts of payment of kickbacks in connection with a federal health care program. The court concluded that the evidence was sufficient to convict defendant of the offenses; defendant failed to show that the district court plainly erred by allowing the government to make the statements he claims amount to improper vouching; defendant failed to show any error with regard to the prosecutor's statements that allegedly amounted to improper expressions of personal opinion; defendant failed to show that the district court plainly erred by allowing the prosecutor to make the statements that he claims improperly exhorted the jury to return a guilty verdict on the basis of inflammatory and improper considerations; and the district court did not err by applying two increases to his base offense level when calculating defendant's advisory guidelines range. Accordingly, the court affirmed the convictions and sentences. View "United States v. Sosa" on Justia Law

Hawkins and Racasi were analysts on the staff of a member of the Cook County Board of Review, when they accepted money from Haleem, a corrupt Chicago police officer acting as an undercover agent to reduce the penalties for his own crimes. The Board hears complaints by property owners who believe that the assessed valuation (which affects real-estate taxes) is excessive. Haleem paid Hawkins and Racasi to arrange for lower assessments. They took his money, and the assessments were reduced, except for one parcel about which the protest was untimely. A jury found that they had violated 18 U.S.C.666 (theft or bribery concerning programs receiving federal funds) and 1341 (mail fraud), plus corresponding prohibitions of conspiracy. Hawkins and Racasi contend that they took the money with the intent to deceive Haleem and did nothing in exchange and that the jury was improperly instructed. The Seventh Circuit affirmed the section 666 convictions, but vacated the section 1341 convictions. The jury may have found that defendants intended to be influenced; but if they did not, they intended to be rewarded for the positions they held, if not for services delivered. They were guilty either way. Section 1341 covers only bribery and kickbacks. View "United States v. Racasi" on Justia Law

Defendant appealed his conviction for making excessive campaign contributions, and making contributions in the name of another. The court concluded that the district court did not err in refusing defendant's proffered jury instructions that an unconditional gift of funds cannot violate 2 U.S.C. 441f if the funds have become the property of the donors under Nevada law because defendant's theory is not supported by law; to the extent defendant's theory is that the unconditional nature of the gifts prevented him from forming the necessary intent, the instructions given by the district court adequately encompassed his theory; defendant's claim that the individual contribution limits of section 441a and the prohibition on conduit contributions in section 441f violate defendant's free speech and association rights under the First Amendment is foreclosed by Buckley v. Valeo; the court rejected defendant's claims of evidentiary errors; and the evidence was sufficient to support defendant's conviction. Accordingly, the court affirmed the judgment of the district court. View "United States v. Whittemore" on Justia Law

A jury convicted Garten of conspiracy to commit mail and wire fraud in the conduct of telemarketing, 18 U.S.C. 1349, 2326(1). The district court then sentenced her to 168 months in prison and a five-year term of supervised release, and ordered Garten to pay $909,278 in restitution. The Seventh Circuit affirmed, rejecting challenges to the sufficiency of the evidence supporting conviction, the admission of testimony that a non-testifying co-conspirator had pleaded guilty to the same offense, the court’s statement, “that’s accurate” in overruling Garten’s objection to testimony that the “gross amount” on an exhibit was the amount “stolen from the consumer,” and that the evidence was insufficient to support the district court’s finding that the loss involved totaled nearly $6 million. View "United States v. Garten" on Justia Law

Acting under power of attorney, Chenoweth sold her stepmother’s house in 2005 and used most of the money for personal expenses. Chenoweth was charged in 2009 and convicted of financial exploitation of an elderly person, 720 ILCS 5/16-1.3(a). She sought dismissal under the standard three-year period of limitations (720 ILCS 5/3-5(b), arguing that the indictment failed to allege any circumstances that would have placed the indictment within the one-year extended limitations of 720 ILCS 5/3-6(a)(2). The court rejected her arguments and she was sentenced to four years’ probation, and ordered to pay $32,266 in restitution. The appellate court vacated the conviction, holding that the extended period of limitations (720 ILCS 5/3-6(a)(2)) had expired prior to prosecution. The Illinois Supreme Court reversed, holding that the one-year extended period of limitations commenced on January 22, 2009, when the Adams County State’s Attorney became aware of the offense when he received the police investigation file. The legislature enacted section 3-6(a) specifically to deal with the offender who has successfully avoided detection of a breach of fiduciary obligation for the term of the general time limitation. View "People v. Chenoweth" on Justia Law