Justia White Collar Crime Opinion Summaries

During the 2000 presidential election, Dewald established and operated political action committees (PACs): “Friends for a Democratic White House” and “Swing States for a GOP White House.” He sent fundraising letters to political donors found on Federal Election Commission donor lists. The PACs collected about $750,000 in contributions, but Dewald remitted less than 20 percent of that amount to the political parties or to outside PACs. He funneled most the money to his for-profit corporation, which provided “consulting and administrative services” to the PACs. Dewald was convicted, under Michigan law, for obtaining money under false pretenses, common-law fraud, and larceny by conversion and ultimately sentenced to between 23 and 120 months. Rejecting Dewald’s preemption claim, the Michigan Court of Appeals reasoned that the Federal Election Campaign Act, 2 USC 453 has a narrow preemptive effect. Dewald unsuccessfully sought state post-conviction relief. Dewald later obtained federal habeas corpus relief 28 U.S.C. 2254, on grounds that FECA preempted state law and that the Michigan court’s determination was objectively unreasonable. The Sixth Circuit reversed. There is no clearly established federal law, as determined by the Supreme Court, holding that FECA precludes a state from prosecuting fraud in the context of a federal election. Even if federal preemption provides “clearly established federal law” in general, the state decision did not unreasonably apply those general principles to this case. View "Dewald v. Wriggelsworth" on Justia Law

Defendant was indicted for financial crimes. He applied for public defender representation and provided information about his financial status that was collected by court staff on a UDIR form. Defendant's application was granted. Because the State's investigation suggested that defendant owned substantial assets, it issued a trial subpoena to the Morris County Superior Court's custodian of records demanding the production of financial data provided to court staff, including defendant's UDIR form. Although it used a trial subpoena, the State represented that it did not intend to use defendant's UDIR form at his pending trial; instead, it would be used to determine whether the State should separately indict defendant for making intentional false statements to obtain free counsel and to determine whether to apply for the removal of defendant's appointed counsel. The trial court quashed the subpoena on its own motion pursuant to the attorney-client privilege. The trial court denied the State's motion for reconsideration, reaffirming its view that the attorney-client privilege protected disclosure of defendant's financial information. The Appellate Division affirmed, holding that the attorney-client privilege protected the information sought. Upon review of the matter, the Supreme Court concluded that the subpoena was properly quashed because defendant was "entitled to the benefit of the long-standing practice embodied in Directive 1-06 - that 'information on the intake form may not be used in grand jury proceedings or at trial.'"View "In re Subpoena Duces Tecum on Custodian of Records" on Justia Law

Plaintiffs here were Bryan Behrens, Bryan Behrens Co., Inc., National Investments, Inc., and Thomas Stalnaker. Defendants were Christian Blunk, Berkshire and Blunk, and Abrahams Kaslow & Cassman LLP. In 2008, the SEC filed a civil enforcement action against all plaintiffs except Stalnaker. In 2009, the federal government indicted Behrens on charges of securities fraud, mail fraud, wire fraud, and money laundering. Prior to the filing of the indictment, Plaintiffs filed their complaint alleging that Blunk had committed legal malpractice. Plaintiffs also sued Blunk's former partnership and the firm that later employed Blunk. Both civil and criminal cases were proceeding at roughly the same time. In 2010, Behrens pled guilty to securities fraud. Later that year, Plaintiffs filed an amended complaint against Defendants for legal malpractice. The district court found the action was barred by the applicable statute of limitations and by the doctrine of in pari delicto. The Supreme Court affirmed, holding that Plaintiffs' suit was barred by the two-year statute of limitations set forth in Neb. Rev. Stat. 25-222.View "Behrens v. Blunk" on Justia Law

Appellant Connie Powell worked as a bookkeeper for Rocky Mountain Pump Services (RMPS) from March 2005 to February 2007, when her employment was terminated. After terminating appellant's employment, RMPS contracted with Melanie Field to handle the company's books until another bookkeeper could be hired. Field immediately found the books to be incomplete, inaccurate, and in need of "rebuilding." Reconstruction of the books back to the time when Appellant was hired, revealed numerous discrepancies and missing records, with multiple paychecks to Appellant for the same pay period, copies of checks made payable to the appellant where the computer QuickBooks system showed those checks being paid to vendors, and a few checks made payable to Appellant where the issuing manager's signature appeared to be forged. The examination of the books was followed by a law enforcement investigation that included a review of Appellant's personal bank account records. Eventually, it was determined that 93 checks, totaling $78,200, and claimed to be "unauthorized" by RMPS, had been deposited into Appellant's personal account during her tenure as RMPS's bookkeeper. Appellant was arrested and charged with one count of felony larceny. A jury found her guilty. She appealed her conviction. Because there was insufficient evidence to prove beyond a reasonable doubt that Appellant committed larceny, the Supreme Court reversed her conviction.View "Powell v. Wyoming" on Justia Law

American Family Care, Inc. (AFC) petitioned the Supreme Court for a writ of mandamus to direct the Jefferson Circuit Court to vacate its order staying a civil action filed by AFC against Anita Salters. Salters was a former employee of AFC, acting as the director of the center from 2007 to June 2010 before her employment was terminated. As director, she was responsible for handling billing issues and claim audits performed by insurance companies and governmental agencies. In some instances, Salters had the only copies of communications related to billing inquiries and claim audits. In April 2011, the Federal Bureau of Investigation executed a search warrant at AFC's corporate office. The FBI removed mostly billing records. After the search warrant was executed, AFC determined that it was missing corporate records it would need to defend itself against any criminal charges that might be filed as a result of the FBI investigation. According to AFC, several of its employees reported that Salters had been seen removing files and records from the corporate offices shortly before she was fired. AFC made written demand upon Salters for the return of the records, but she did not respond. AFC then sued Salters seeking the return of any business records she might have. Salters answered the complaint, denying that she had removed any AFC records from its offices. The trial court, sua sponte, entered an order staying AFC's action "until further notice." The trial court expressed no reason for entering the indefinite stay. Upon review, the Supreme Court found that the indefinite stay ordered by the trial court, with no stated justification for it, was "immoderate" and beyond the scope of the trial court's discretion. For that reason, the Court granted AFC's petition and issued a writ of mandamus ordering the trial court to vacate its order staying AFC's action against Salters. View "American Family Care, Inc., v. Salters" on Justia Law

Appellant John Sterling, Jr. was charged with three criminal offenses: securities fraud, making false or misleading statements to the State Securities Commission, and criminal conspiracy. He was convicted of securities fraud, acquitted of making a false or misleading statement and conspiracy, and received a five-year sentence.  Appellant appealed to the Supreme Court, arguing the trial judge abused his discretion in permitting testimony from investors, in denying appellant's directed verdict motion, and that the trial court committed reversible error in charging the jury. Charges against Appellant stemmed from a business venture related to the retail mortgage lending industry. After a merger between two companies, Appellant ceased being an employee of one of the acquired companies, but remained on the Board of Directors of the newly formed entity. The new entity had financial trouble from the onset, and began moving debts and assets among the surviving entities to hide its financial difficulties. Appellant's defense was predicated in large part on the fact that the financial maneuvers that took place were approved by outside auditors. Upon review of the trial court record, the Supreme Court found no error and affirmed Appellant's conviction.View "South Carolina v. Sterling" on Justia Law

Defendant was convicted for the state-jail felony of debit card abuse. At issue was whether the terms "use" and "present" in the debit-card-abuse statute were mutually exclusive so that there was no overlap in the meaning of the words. Based on the ordinary meaning of the words as used in the statute, the court concluded that the statutory terms "use" and "present" could overlap in meaning, that a transaction need not be consummated to support a jury finding that a defendant used a debit card, and that the court of appeals erred in determining that the evidence was insufficient to establish debt card abuse. Because the court reinstated the trial court's judgment, the court concluded that defendant's petition regarding the reformation of the judgment was improvidently granted.View "Clinton v. State" on Justia Law

In connection with operation of a medical transport company, defendant was convicted of theft (720 ILCS 5/16-1), vendor fraud (305 ILCS 5/8A-3), and money laundering (720 ILCS 5/29B-1), sentenced to 66 months' imprisonment, and ordered to pay$1.2 million in restitution. The appellate court upheld the theft and vendor fraud convictions, but reversed the money laundering conviction. The Illinois Supreme Court reversed with respect to the money laundering conviction. The trial court properly allowed the state establish guilt of money laundering with evidence of receipts rather than profits.View "People v. Gutman" on Justia Law

Defendant Debbie Cruz was convicted of issuing payroll checks with insufficient funds to cover them.  Defendant was charged with four counts of issuing worthless checks, pursuant to the "Worthless Check Act."  Convicted on each count, Defendant argued on appeal, among other issues, the lack of sufficient evidence to prove that she had issued a check "in exchange for anything of value." Because the worthless checks were issued a week after the last day of the pay period, the Court of Appeals reversed the convictions, relying on previous opinions of the Supreme Court to conclude that the Act applied only to a "contemporaneous exchange" and not to pre-existing or antecedent debts.  Upon its review, the Supreme Court rejected that distinction as inconsistent with the clear legislative intent and purpose of the Act.  Accordingly, the Court reversed and remanded the case back to the Court of Appeals for further proceedings. View "New Mexico v. Cruz" on Justia Law

Defendant Money & More Inc. (M&M) allegedly maintained and operated a Ponzi scheme. Pursuant to a petition filed by the State, the district court issued a temporary restraining order freezing Defendants' assets and later entered a preliminary injunction. Several hundred individuals and dozens of corporations that made fraudulent investments formed Money & More Investors LLC (MMI) and assigned to it their rights, interests, and claims against Defendants, who included the individuals comprising M&M. After reaching a settlement agreement with Defendants, MMI filed a motion to intervene in the State's preservation action. The district court granted MMI both intervention as of right under Utah R. Civ. P. 24(a) and, in the alternative, permissive intervention under Utah R. Civ. P. 24(b). The Supreme Court affirmed the grant of intervention as of right, holding that MMI met all the elements of rule 24(a) where (1) MMI's motion to intervene was timely; (2) MMI had a direct interest relating to the property; (3) MMI sufficiently established that the original parties to the suit would inadequately represent MMI's interests; and (4) MMI would be bound by the judgment.View "State v. Bosh" on Justia Law