Justia White Collar Crime Opinion Summaries

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

This case involved serious allegations against Robert E. Stark, the auditor-controller of Sutter County where the Sutter County District Attorney's Office claimed that Stark violated statutes, county rules, and Sutter County Board of Supervisors (Board) resolutions detailing the requirements of his office. At issue were four provisions of Penal Code section 424, all of which proscribe general intent offenses. Three of those provisions criminalize acting without authority or failing to act as required by law or legal duty. The court held that those offenses additionally required that defendant knew, or was criminally negligent in failing to know, the legal requirements that governed the act or omission. The court also held that a claim of misinstruction on the mens rea of a crime could be challenged under Penal Code section 995, subdivision (a)(1)(B) where it raised the possibility that, as instructed, the grand jury could have indicted on less than reasonable or probable cause. The court further held that based on the record, the court need not decide the question of whether willful misconduct under Government Code section 3060 required a knowing and purposeful refusal to follow the law. Stark did not disagree with the instruction on mental state given by the district attorney and accompanying PowerPoint slides invalidated the instruction on mental state, requiring that the accusation be set aside. The court addressed these claims as to the district attorney's argument and PowerPoint slides and concluded that it was without merit. The court finally held that, in a motion to set aside an indictment or accusation, a defendant claiming that the district attorney suffered from a conflict of interest during the grand jury proceeding must establish that his right to due process was violated. Accordingly, the judgment of the district court was affirmed.View "Stark v. Superior Court of Sutter County" on Justia Law

Helen Holton, a member of the Baltimore City Council, was charged with bribery, malfeasance in office, nonfeasance in office, and perjury. The circuit court granted Holton's motion to dismiss those charges on the ground of legislative privilege. The court of special appeals affirmed the ruling. At issue was whether Md. Code Ann., Cts. & Jud. Proc. 5-501, which protects local legislators from civil or criminal actions based on words spoken at a board or committee meeting, provided Holton with immunity. The Court of Appeals granted the State's petition for writ of certiorari. The Court affirmed the judgment of the court of special appeals, holding that the lower court did not err in holding that section 5-501 provides legislative immunity to local officials in state criminal prosecutions other than prosecutions for defamation. View "State v. Holton" on Justia Law

Defendant Charles Blunt appealed a district court order that denied his motion for a new trial. He argued the court erred in denying his motion for a new trial because the State violated procedural discovery rules. Defendant was the Executive Director of Workforce Safety and Insurance ("WSI") from 2004 to 2007. The State Auditor's Office conducted a performance review of WSI in 2006, and the Auditor's report questioned the use of public funds at WSI. As a result of the Auditor's report, Defendant was charged with two counts of misapplication of entrusted property in violation of state law. State rules of procedure hold that if the State fails to disclose certain discoverable information to a criminal defendant, the trial court has discretion in applying a remedy when a violation of the rule has been shown. Without a showing of an abuse of the court's discretion, the issue is not appealable. Although the Supreme Court concluded the State likely violated the discovery rules, a careful review of the entire record reflected that the information contained in the undisclosed documents was contained in other documents provided to Defendant. Furthermore, the Court concluded that Defendant did not establish he was prejudiced by the violations. Accordingly, the Court affirmed the trial court's denial of Defendant's motion for a new trial.View "North Dakota v. Blunt" on Justia Law

The bank fraud statute, 18 U.S.C. 1344(2), makes it a crime to “knowingly execut[e] a scheme ... to obtain” property owned by, or under the custody of, a bank “by means of false or fraudulent pretenses.” Loughrin was charged with bank fraud after he was caught forging stolen checks, using them to buy goods at a Target store, and then returning the goods for cash. The district court declined to give Loughrin’s proposed jury instruction that section 1344(2) required proof of “intent to defraud a financial institution.” A jury convicted Loughrin. The Tenth Circuit and Supreme Court affirmed. Section 1344(2) does not require proof that a defendant intended to defraud a financial institution, but requires only that a defendant intended to obtain bank property and that this was accomplished “by means of” a false statement. Imposing Loughrin’s proposed requirement would prevent the law from applying to cases falling within the statute’s clear terms, such as frauds directed against a third-party custodian of bank-owned property. The Court rejected Loughrin’s argument that without an element of intent to defraud a bank, section 1344(2) would apply to every minor fraud in which the victim happens to pay by check, stating that the statutory language limits application to cases in which the misrepresentation has some real connection to a federally insured bank, and thus to the pertinent federal interest. View "Loughrin v. United States" on Justia Law

Robers, convicted of submitting fraudulent mortgage loan applications to two banks, argued that the district court miscalculated his restitution obligation under the Mandatory Victims Restitution Act of 1996, 18 U.S.C. 3663A–3664, which requires property crime offenders to pay “an amount equal to ... the value of the property” less “the value (as of the date the property is returned) of any part of the property that is returned.” The court ordered Robers to pay the difference between the amount lent to him and the amount the banks received in selling houses that had served as collateral. Robers argued that the court should have reduced the restitution amount by the value of the houses on the date on which the banks took title to them since that was when “part of the property” was “returned.” The Seventh Circuit and a unanimous Supreme Court affirmed. “Any part of the property ... returned” refers to the property the banks lost: the money lent to Robers, not to the collateral the banks received. Because valuing money is easier than valuing other property, this “natural reading” facilitates the statute’s administration. For purposes of the statute’s proximate-cause requirement, normal market fluctuations do not break the causal chain between the fraud and losses incurred by the victim. Even assuming that the return of collateral compensates lenders for their losses under state mortgage law, the issue here is whether the statutory provision, which does not purport to track state mortgage law, requires that collateral received be valued at the time the victim received it. The rule of lenity does not apply here. View "Robers v. United States" on Justia Law