Justia White Collar Crime Opinion Summaries

Salahuddin was Newark’s Deputy Mayor for Public Safety. He allegedly conspired to use his official position to obtain charitable and political contributions and to direct Newark demolition contracts to Cooper, with whom Salahuddin was allegedly in business. Both were convicted of conspiring to extort under color of official right, under the Hobbs Act, 18 U.S.C. 1951(a). The Third Circuit affirmed, rejecting Salahuddin’s claims that the government failed to prove that one of the alleged co-conspirators committed an overt act in furtherance of the conspiracy; that the district court erred in omitting an overt act requirement from its jury instructions; and that the rule of lenity requires that his conviction be vacated. The court rejected Cooper’s claim that the jury’s guilty verdict as to the Hobbs Act conspiracy charge was against the weight of the evidence. View "United States v. Salahuddin" on Justia Law

A grand jury returned a three-count indictment charging Safiyyah Tahir Battles with: (1) making a false statement to a financial institution (Count I); (2) committing wire fraud (Count II); and (3) laundering money (Count III). Battles exercised her right to a jury trial, and the jury returned a verdict of guilty on Counts II and III. The jury failed to reach a verdict on Count I. As a result, the district court declared a mistrial on Count I and subsequently granted the government's unopposed motion to dismiss that count without prejudice. Battles was sentenced to thirty months in prison, followed by two years of supervised release. The district court also ordered her to make restitution to the victim of her crimes. Battles appealed her convictions and sentence on numerous grounds. Upon careful consideration of the facts of this case and the district court record, the Tenth Circuit upheld the district court's judgment and affirmed Battles's convictions and sentence. The Court dismissed the portion of Battles's appeal pertaining to her Brady claim for lack of jurisdiction.View "United States v. Battles" on Justia Law

A grand jury indicted defendants Michael Calhoun, Tommy Davis, and William Tucker on 60 counts of wire fraud, mail fraud, and conspiracy to commit wire and mail fraud. The indictment was based on Calhoun's grand jury testimony in which he incriminated himself, Davis, and Tucker. Calhoun testified upon the advice of his counsel at the time, Tom Mills, who was paid by Texas Capital Bank (the alleged victim of the fraud). After Calhoun secured new counsel, defendants moved to quash the indictment and suppress Calhoun's grand jury testimony, arguing the indictment was obtained in violation of the Fifth Amendment Indictment Clause, the Fifth Amendment privilege against self-incrimination, and Calhoun's Sixth Amendment right to effective assistance of counsel. The district court denied the motion. In consolidated, pretrial interlocutory appeals, the defendants challenged the denial of their motion to quash, arguing that the Tenth Circuit should exercise its jurisdiction under the "collateral order" exception to the final judgment rule, ("Cohen v. Beneficial Industrial Loan Corp.," (337 U.S. 541, 546-47 (1949)). However, the Tenth Circuit concluded that the collateral order doctrine did not apply, and dismissed these appeals for lack of jurisdiction. View "United States v. Tucker" on Justia Law

Defendant-Appellant Thomas Evans was a property manager and organizer of real estate investment funds, and was owner and president of Evans Real Estate Group, LLC. V R. 212. At first, Evans' business conduct was legitimate (if highly risky), but by April 2005, Evans experienced cash flow problems and was unable to make the high interest payments to investors. He pled guilty to one count of conspiracy to commit mail and wire fraud, and was sentenced to 168 months’ imprisonment and five years’ supervised release. He appealed the sentence. Because the district court erred in calculating loss and failing to award an offense level reduction for acceptance of responsibility, the Tenth Circuit remanded the case back to the district court to vacate the sentence and resentence. View "United States v. Evans" on Justia Law

Brothers Daniel and John owned four companies that offered remodeling services to homeowners. They provided honest work on construction jobs for cash customers, but duped numerous people into refinancing their homes and paying the loan proceeds directly to their companies, then left the jobs unfinished. They targeted neighborhoods on the South and West sides of Chicago, using telemarketers who looked for “elderly, ignorant homeowners,” and had customers sign blank contracts. They referred homeowners to specific loan officers and required the homeowners to sign letters of direction, so the title companies sent checks directly to the companies. From 2002 to 2006, the brothers collected about $1.2 million from more than 40 homeowner-victims. They were convicted of wire fraud, 18 U.S.C. 1343. The district court found that the loss calculation was more than $400,000 but less than $1,000,000 and accordingly increased the offense level, then applied enhancements because the conduct involved: vulnerable victims; violation of a prior court order; sophisticated means; mass-marketing; and leadership or organization of the scheme. The district court sentenced each brother to 168 months’ imprisonment. The Seventh Circuit affirmed. The district court reasonably estimated the amount of loss and properly enhanced the offense level further for the other five aggravating factors View "United States v. Sullivan" on Justia Law

Woodard was the director of a non‐profit grant organization, Gideon’s Gate, which provided educational and tutoring services to children. The Department of Education, not satisfied with Gideon’s performance, stopped providing funds. Woodard then enrolled Gideon as an Indiana Medicaid provider for outpatient mental health services, but continued to operate as an educational service provider. To fraudulently bill Medicaid, Woodard illegally obtained clients’ personal information from a welfare‐to‐work provider operated by a friend. Woodard submitted 2,437 false claims for $8.9 million worth of services to 378 patients. Woodard was charged with health care fraud, 18 U.S.C. 1347. Before trial Woodard filed several motions to change counsel. After appointing a third attorney, the court ordered a competency examination. A doctor concluded that Woodard was competent to stand trial. Two years later, after more delays and new attorneys, Woodard asked for another competency evaluation, which was denied. She pled guilty and was sentenced to 80 months in prison. The Seventh Circuit remanded for resentencing because the court applied the wrong version of the guidelines, but otherwise affirmed. The district court reached a reasonable conclusion after reviewing a previous psychological evaluation, considered advice from two mental health professionals, and considered Woodard’s interactions with her attorney. Although Woodard claimed that she did not knowingly and voluntarily plead guilty, the record shows that she did and that nothing would have alerted the court to the contrary. View "United States v. Woodard" on Justia Law

Defendant was convicted of five counts of bank fraud and two counts of mail fraud. The court held that mailings designed to avoid detection or responsibility for a fraudulent scheme fell within the mail fraud statute when they were sent before the scheme was completed. In order to determine when a scheme is completed, the court looks to the scope of the scheme as devised by the perpetrator. In this case, a reasonable jury could have found that defendant sent the September 16 letter prior to the scheme's completion. Accordingly, the court rejected defendant's argument that his conviction on count 2 must be reversed because the scheme was completed before the September 16 letter was mailed. The court also rejected defendant's alternative argument that the September 16 letter could not support a conviction for mail fraud because it was sent after the fraud was uncovered. Therefore, sufficient evidence supported defendant's mail fraud conviction on count 2 and the court affirmed the conviction. Further, the court affirmed the district court's application of a 2-level sentencing enhancement for making a misrepresentation during the course of a bankruptcy proceeding under U.S.S.G. 2B1.1(b)(9)(B) and application of a 2-level enhancement for using sophisticated means under U.S.S.G. 2B1.1(b)(10)(C). The court held, in accord with the government's concession, that the district court plainly erred by including $44,715.21 in restitution for fraudulent credit cards and $1,851.38 in restitution for wage overpayments that were not part of the offenses of conviction and by failing to note the waiver of interest on restitution on the judgment. View "United States v.Tanke" on Justia Law

In 2008-2009 Scalzo was a bank officer at two institutions. He originated and approved loans for unqualified borrowers without adequate financial information or collateral. He forged borrowers’ signatures, redirected funds from the loans to his own personal use without the knowledge of the borrowers, and took funds from some fraudulent loans to pay off balances on previous fraudulent loans, to conceal the original fraud. Scalzo pled guilty to one count of bank fraud, 18 U.S.C. 1344, and one count of money laundering, 18 U.S.C. 1956. The Information listed as part of the scheme six bank loans and three Credit Union loans. Scalzo objected to inclusion of two Credit Union loans in the restitution order. The sentencing range was the same with or without these loans, so the court deferred ruling on restitution and sentenced Scalzo to 35 months of imprisonment. The government filed its additional brief a week later. Having received no additional briefing from Scalzo for 82 days, the court relied on the PSR, the plea agreement and the government’s additional submissions; found that Scalzo arranged the Credit Union loans to conceal the bank fraud; noted that the Credit Union loans were listed as part of the fraudulent scheme detailed in the Information to which Scalzo pled guilty and that the Credit Union lost a substantial amount of money; and ordered him to pay restitution of $679,737.23. The Seventh Circuit affirmed. View "United States v. Scalzo" on Justia Law

Davis, a nurse and assistant professor of nursing at Chicago State University, ran several public health programs aimed at improving the health care of the African-American community. As program director for the Chicago Chapter of the National Black Nurses Association (CCBNA), Davis solicited and oversaw public and private grants, contracts, and funds awarded to CCBNA. Between December 2005 and March 2009, Davis solicited and obtained contracts and grants totaling approximately $1,062,000 from Illinois state agencies. Davis diverted approximately $377,000 by writing checks to herself, friends, and family members; concealing conflicts of interest; hiring unqualified family members and other acquaintances for positions in projects; forging co-signatures; and falsifying information. Davis pleaded guilty to mail fraud and money laundering. In the plea agreement, the parties concurred that based on the factors contained in 18 U.S.C. 3553, Davis could be sentenced to, and the government would recommend, no higher than a below-guidelines sentence of 41 months’ imprisonment. The advisory guidelines range was 57–71 months. Davis waived the right to appeal the reasonableness of the sentence but reserved the right to challenge any procedural error at sentencing. The Seventh Circuit affirmed, rejecting a claim that the district court erred procedurally by failing to adequately take into account her mental health in considering mitigating factors. View "United States v. Davis" on Justia Law

Castaldi, involved in fraudulent schemes since high school, operated a Ponzi scheme that collapsed in 2008. Net losses to investors and the IRS totaled about $40 million. When the scheme was near collapse, Castaldi turned himself in to the government. He eventually pled guilty to just one count of mail fraud, 18 U.S.C. 1341, and one count of corruptly impeding the IRS, 26 U.S.C. 7212(a). The district court imposed the longest prison sentence possible under the plea agreement: consecutive sentences of 20 years on the mail fraud charge and three years on the tax charge, about 50percent longer than the high end of the agreed Sentencing Guideline range. The Seventh Circuit affirmed the sentence, finding that the court adequately considered the fact that Castaldi told the government about his scheme and cooperated with its investigation, but also considered the devastating financial harm Castaldi inflicted on family members, friends, and neighbors of modest financial means.View "United States v. Castaldi" on Justia Law