Justia White Collar Crime Opinion Summaries

Stern represented Allen in a discrimination suit, after which they became romantically involved. Allen and her husband had separated and had executed a settlement agreement awarding Allen $95,000, to be paid in installments. A month later, Allen visited a bankruptcy attorney, Losey, giving Stern’s name as “friend/referral” on an intake form. In filing for bankruptcy, Allen did not disclose the marital settlement. While her bankruptcy was pending, Allen received the money. A month after her bankruptcy discharge, Allen transferred the settlement proceeds to Stern, who opened a CD in his name. The attorney for Allen’s ex-husband informed the bankruptcy trustee that Allen failed to disclose the settlementand the discharge was revoked. Allen pleaded guilty to making a false declaration in a bankruptcy proceeding, 18 U.S.C. 152(3). She told a grand jury that Stern had not referred her to Losey and was convicted of making a material false statement in a grand jury proceeding, 18 U.S.C. 1623. The court admitted Losey’s client-intake form as evidence of perjury. Stern was convicted of conspiring to commit money laundering, 18 U.S.C. 1956(h). The Seventh Circuit affirmed Allen’s conviction, holding that the intake form was not a communication in furtherance of legal representation and was not subject to attorney-client privilege. Reversing Stern’s conviction, the court held that the judge erred in excluding Stern’s testimony about why he purchased the CDs. View "United States v. Stern" on Justia Law

Defendants appealed their convictions for 44 counts of fraudulent behavior relating to theft of government funds, filing of their personal taxes, and actions they took as paid tax preparers. The court concluded that there was sufficient evidence to support the convictions; the district court did not plainly err by joining defendants for trial; the district court did not err in excluding expert witnesses for the defense; taken as a whole, the district court's instructions "fairly and adequately" submitted the issue of good faith to the jury and it was not error to reject defendants' proffered good faith instruction; and the district court did not err in calculating restitution. Accordingly, the court affirmed the judgment of the district court. View "United States v. Morris" on Justia Law

Defendant Calhoun appealed her conviction of two counts of conspiracy to commit access device fraud and aggravated identity theft and making false statements to investigators. Calhoun's convictions stemmed from her purchase of several "black market" airline tickets from Defendant Ross. Ross appealed his sentence after pleading guilty to conspiracy to commit access device fraud and aggravated identity theft, access device fraud, and aggravated identity fraud. The court concluded that there was sufficient evidence to convict Calhoun; the district court committed no prejudicial abuse of discretion in not sua sponte excluding an inspector's testimony; and the court rejected Calhoun's claims of ineffective assistance of counsel. The court also concluded that the district court's finding that the fraud loss exceeded $1,000,000 was not clearly erroneous; the district court did not err in imposing a 6-level enhancement for a fraud offense involving more than 250 or more victims under U.S.S.G. 2B1.1(b)(2)(C); and the district court did not err in imposing a 2-level enhancement for a fraud offense involving sophisticated means under U.S.S.G. 2B1.1(b)(10)(C). Accordingly, the court affirmed the judgment of the district court. View "United States v. Calhoun" on Justia Law

Defendants were convicted of conspiracy to commit mail fraud and wire fraud in violation of 18 U.S.C. 1341, 1343, and 1349. Defendants' convictions stemmed from their involvement in a conspiracy to defraud a non-existent investor of three billion dollars. The court concluded that there was sufficient evidence for a reasonable jury to conclude that any misrepresentations defendants made were material. The court concluded, however, that defendants' sentences were procedurally unsound where the court was uncertain whether the district court weighed the factors listed in 18 U.S.C. 3553(a). Accordingly, the court affirmed the convictions but vacated the sentences, remanding for resentencing. View "United States v. Juncal" on Justia Law

Walsh and Martin, principals of a futures and foreign currency trading company that acted as a “futures commission merchant” and as a “forex dealer member,” used customer funds for personal expenses, then concealed the company’s insolvency and their criminal conduct by misleading customers about the company’s ability to meet its obligations. Existing customers got account statements that falsely stated their available margin funds, and they solicited new customers by making false statements. They also used a Ponzi-like scheme for redemptions. Shortly before it was shut down, the company had $17,654,486 in unpaid customer liabilities and only $677,932 in assets. Walsh and Martin pleaded guilty to wire fraud, tax evasion, and to making false statements in a report to the Commodities Futures and Trading Commission, a Commodities Exchange Act (7 U.S.C. 6d(a)) violation. The district court sentenced them to terms of imprisonment of 150 and 204 months, respectively, and ordered each to pay $16,976,554 in restitution. The Seventh Circuit affirmed, rejecting challenges to a finding as to the amount of loss and restitution and to application of a sentencing enhancement based upon a finding that each was an officer or director of a futures commission merchant. View "United States v. Walsh" on Justia Law

Clark, the owner and president of an East St. Louis Illinois company, was charged with making false statements in violation of 18 U.S.C. 1001(a)(3). Clark’s company had entered into a hauling services subcontract with Gateway, general contractor on a federally funded highway project in St. Louis, Missouri. Employers must pay laborers working on certain federally-funded projects the “prevailing wage,” calculated by the Secretary of Labor based on wages earned by corresponding classes of workers employed on projects of similar character in a given area, and maintain payroll records demonstrating prevailing wage compliance, 40 U.S.C. 3142(b) The indictment charged that Clark submitted false payroll records and a false affidavit to Gateway, representing that his employees were paid $35 per hour, when they actually received $13-$14 per hour. The district court dismissed for improper venue, finding that when a false document is filed under a statute that makes the filing a condition precedent to federal jurisdiction, venue is proper only in the district where the document was filed for final agency action. The Seventh Circuit reversed. Although the effects of the alleged wrongdoing may be felt more strongly in Missouri than in Illinois, the Southern District of Illinois is a proper venue. View "United States v. Clark" on Justia Law

Defendant was convicted of conspiracy to commit honest-services wire fraud. The conviction arose out of his work for former United States Representative Curt Weldon where defendant intentionally failed to disclose certain payments made to his wife. After the Supreme Court handed down Skilling v. United States, a decision that substantially limited the permissible reach of the honest-services fraud statute, defendant filed a motion under 28 U.S.C. 2255 to vacate and set aside his conviction and sentence. The court concluded that defendant was denied an opportunity to collaterally attack his conviction and sentence because he could not demonstrate that he was also innocent of a separate and uncharged offense that had a lower sentencing range under the Sentencing Guidelines. The court reversed the order denying defendant's motion to vacate his conviction because defendant was not required to make such a showing. View "United States v. Caso, Jr." on Justia Law

Eight defendants who held positions with Clay County, Kentucky, were charged with conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1962(d), based on participation in a vote-buying scheme in three election cycles, 2002 to 2007. Candidates pooled money to pay “vote haulers” to deliver voters for a particular slate of candidates. To ensure that they voted for the correct slate, co-conspiring election officers and poll workers reviewed the ballots. When the proper slate was confirmed, the voter got a token or marking and was paid in a location away from the polls. Conspirators retained lists to avoid double payments and to keep track of whose votes could be bought in future elections and used absentee voting and voter-assistance forms to implement the scheme. When electronic voting machines were introduced, conspiring poll workers misinformed voters that they did not need to click “cast ballot” after selecting candidates; poll workers would enter the voting booth after the voter exited and change the electronic ballot to reflect the slate before casting the ballot. The Clay County Board of Elections was alleged to be the racketeering enterprise in the conspiracy. They were convicted after a seven week trial. The Sixth Circuit vacated, based on cumulative errors in evidentiary rulings. View "United States v. Adams" on Justia Law

Defendant, the founder and former CEO of HealthSouth, was found guilty of federal funds bribery, honest services fraud, and conspiracy to commit the latter offenses. Defendant subsequently appealed the district court's denial of his motion for a new trial filed while Siegelman I was before the Supreme Court on certiorari, and the denial of his motion to recuse the trial judge. The court concluded that there was no abuse of discretion in Judge Henkle's denial of the motion to recuse under 28 U.S.C. 455(b) where the judge's ex parte meeting with the Marshals regarding a disputed factual issue did not lead an objective disinterested lay observer to entertain significant doubt about the judge's impartiality and the judge did not have personal knowledge of disputed evidentiary facts concerning the proceeding, nor was he likely to be a material witness. Addressing five of the six grounds defendant relied on in seeking a new trial, the court also concluded that there was no abuse of discretion in Judge Fuller's handling of the motion for new trial under Federal Rule of Criminal Procedure 33(b)(1). Accordingly, the court affirmed the judgment of the district court. View "United States v. Scrushy" on Justia Law

Kluger and Bauer were charged as conspirators in an insider-trading scheme in which Robinson was the third participant. The conspiracy spanned 17 years and was likely the longest such scheme in U.S. history. Kluger entered a guilty plea to conspiracy to commit securities fraud; securities fraud; conspiracy to commit money laundering; and obstruction of justice, 18 U.S.C. 371, 15 U.S.C. 78j(b) and 78ff(a); 18 U.S.C. 1956(h), 18 U.S.C. 1512(c)(2), and 18 U.S.C. 2. The plea agreement did not include a stipulation as to the guidelines sentencing range. The district court imposed a 60-month term on Count I and 144-month custodial terms on each other count, all to be served concurrently, thought to be the longest insider-trading sentence ever imposed. After a separate hearing on the same day, the court sentenced Bauer to a 60-month term on Count I and 108-month terms on each other count to be served concurrently. Robinson, who was the “middleman,” in the scheme, pled guilty to three counts and was sentenced to concurrent 27-month terms. Robinson’s sentence was far below his guidelines range of 70 to 87 months but the prosecution sought a downwards departure because Robinson was cooperating in its investigation and prosecution. The Third Circuit upheld Kluger’s sentence. View "United States v. Kluger" on Justia Law