Justia White Collar Crime Opinion Summaries

Based on a mortgage fraud scheme that caused the U.S. Department of Housing and Urban Development (HUD) to insure loans for unqualified applicants based upon forged documents and false information provided by Wendlandt, he pled guilty to one count of conspiracy to defraud the United States, 18 U.S.C. 371, and was sentenced to 42 months in prison. The Sixth Circuit affirmed, rejecting challenges to the district court’s computation of financial loss for purposes of determining his offense level under U.S.S.G. 2B1.1 and to the court’s decision to vary upward from the advisory Guidelines range of 24 to months in prison. View "United States v. Wendlandt" on Justia Law

Defendant pled guilty to one count of mail fraud and was sentenced to 8 years and 9 months of imprisonment, as well as ordered to pay restitution to his victims. Defendant appealed. The court held that defendant could challenge the application of the vulnerable victim enhancement but, under the due deference standard, the court upheld the enhancement where it was reasonable for the district court to conclude that the combination of the victims' characteristics made them particularly susceptible to defendant's fraud. The court remanded defendant's ineffective-assistance claim that his trial counsel made errors relating to the amount-of-loss calculation because it required further factual development. Finally, the court remanded to the district court to correct the specific amounts of restitution owed to each of defendant's victim so that the amounts added up to total $3,646,747.83. View "United States v. Fareri" on Justia Law

Westerfield was a lawyer working for an Illinois title insurance company when she facilitated fraudulent real estate transfers in a scheme that used stolen identities of homeowners to “sell” houses that were not for sale to fake buyers, and then collect the mortgage proceeds from lenders who were unaware of the fraud. Westerfield facilitated five such transfers and was indicted on four counts of wire fraud, 18 U.S.C. 1343. She claimed that she had been unaware of the scheme’s fraudulent nature and argued that she had merely performed the typical work of a title agent. She was convicted on three counts. The Seventh Circuit affirmed, rejecting challenges to the sufficiency of the evidence, to admission of a codefendant’s testimony during trial, and to the sentence of 72 months in prison with three years of supervised release, and payment of $916,300 in restitution. View "United States v. Westerfield" on Justia Law

After years of paying taxes on wages he received for his work as a carpenter, Scheuneman stopped paying federal income tax in 1998. In 1999, in an effort to prevent the IRS from discovering his income, Scheuneman purchased a sham tax avoidance system from an Arizona company, Innovative Financial , and formed a limited liability corporation, Larch, and two illegitimate trusts, Soned and Jokur. Scheuneman retained complete control of all three. Scheuneman was eventually convicted of three counts of tax evasion, 26 U.S.C. 7201 and one count of interference with the Internal Revenue laws, 26 U.S.C. 7212(a). The Seventh Circuit affirmed, first rejecting arguments that that a clerical error in the indictment’s description of the relevant date rendered two counts legally insufficient and that the government constructively amended the indictment by introducing proof regarding dates other than those described in the indictment. Schueneman also claimed that the district court improperly ordered restitution for losses that are unrelated to his tax evasion offenses. The court rejected the argument; although those losses were not caused by the conduct underlying his tax evasion offenses, they are properly included as restitution because they were attributable to his interference with the Internal Revenue laws. View "United States v. Scheuneman" on Justia Law

From 1997 through 2009 Sachdeva, the vice president for accounting at Koss, instructed Park Bank, where Koss had an account, to prepare more than 570 cashier’s checks, payable to Sachdeva’s creditors and used to satisfy personal debts. She embezzled about $17.4 million, pleaded guilty to federal crimes, and was sentenced to 11 years’ imprisonment. The SEC sued Sachdeva and an accomplice because their scheme caused Koss to misstate its financial position. Koss and Park Bank are litigating which bears the loss in Wisconsin. In this suit, Park Bank argued that Federal Insurance must defend and indemnify it under a financial-institution bond (fidelity bond) provision that promises indemnity for “Loss of Property resulting directly from . . . false pretenses, or common law or statutory larceny, committed by a natural person while on the premises of” the Bank. Sachdeva did not enter the Bank’s premises. She gave instructions by phone, then sent employees to fetch the checks. The district court entered judgment in the insurer’s favor. The Seventh Circuit affirmed; every court that has considered the subject has held that a fraud orchestrated from outside a financial institution’s premises is not covered under the provision, which is standard in the industry. View "Bankmanagers Corp. v. Fed. Ins. Co." on Justia Law

Defendant and his co-defendant were convicted of charges related to their involvement in a scheme to defraud homeowners, home buyers, and mortgage lenders. Defendant appealed his sentence, challenging the district court's calculation of the loss amount and its application of the sentencing enhancement for "mass-marketing." In light of the court's precedent, the court could not say that the district court erred by employing an intended loss calculation and declining to account for the collateral's value, especially given the district court's factual findings that defendants did not intend to repay the mortgage loans here. The court also held that the district court did not err in imposing the mass-marketing enhancement under U.S.S.G. 2B1.1(b)(2)(A)(ii) where defendants used advertisements in newspapers that circulated to thousands of people and potentially more through online viewing. While defendants could have phrased their advertisements to sell one house to one person, they solicited thousands of potential buyers in order to find the one buyer for each property. Accordingly, the court affirmed the judgment. View "United States v. Morrison" on Justia Law

Defendant, the former national treasurer of the Phi Beta Sigma fraternity, pled guilty to a single count of bank fraud and received a sentence of the time he had already served on earlier convictions, plus five years of supervised release. Defendant had successfully appealed his convictions of multiple counts of bank fraud because the district court erred in admitting certain of his statements in evidence. On appeal, defendant contended that his term of supervised release should be calculated as having commenced when he was ordered released on his own recognizance pending his ultimately successful appeal. The court disagreed and concluded that defendant's term of supervised release did not commence until he was sentenced, on the charge to which he pled guilty, to time served plus five years of supervised release. Accordingly, the court affirmed the judgment. View "United States v. Davis" on Justia Law

Defendant was charged with fourteen counts of wire fraud in violation of 18 U.S.C. 1343 stemming from his scheme to defraud his employer. On appeal, defendant contended that the district court erred in denying his motions for judgment of acquittal, a new trial, and for an arrest of judgment. The court rejected defendant's argument that routine transmissions occurring during the interbank collection process were not made for the purpose of executing a scheme to defraud or in furtherance thereof; the district court erred in the jury instructions; there was insufficient evidence; and the wire fraud statute was unconstitutional. Accordingly, the court affirmed the conviction and sentence. View "United States v. Jinian" on Justia Law

Defendant, the former CFO of the National City Christian Church, was convicted of offenses related to his role in swindling the church out of more than $850,000, much of it through arranging an increase in the church's line of credit at Adams National Bank. On appeal, defendant contended that the government was required to prove that he stole certain individuals' identity information and that these individuals suffered individual harm beyond that suffered by the church. The court rejected defendant's argument that 18 U.S.C. 1028A required evidence that defendant stole the identity information at issue. The court also held that defendant's argument, that section 1028A applied only where the individuals whose means of identification were unlawfully used have suffered individual harm, lacked merit. Accordingly, the court affirmed the judgment. View "United States v. Reynolds" on Justia Law

Under the “Hyde Amendment,” a district court in criminal cases may award to a prevailing party a reasonable attorney’s fee and other litigation expenses, if the position of the United States was vexatious, frivolous, or in bad faith, unless the court finds special circumstances, 18 U.S.C. 3006A. The district court denied such an award in a case involving four counts of conspiring and attempting to commit extortion, 18 U.S.C. 951(a) & 2 (Hobbs Act), and two counts of traveling in interstate commerce to promote and facilitate bribery, 18 U.S.C. 1952(a)(3) & 2 (Travel Act). The government alleged that Manzo, a candidate for mayor of Jersey City, sought cash payments from Dwek, an informant posing as a developer, and that, in exchange, Manzo indicated he would help Dwek with matters involving Jersey City government. The district court dismissed each Hobbs Act count because Manzo was not a public official at the time of the conduct. The Third Circuit affirmed. The court later held that receipt of something of value by an unsuccessful candidate in exchange for a promise of future official conduct does not constitute bribery under the New Jersey bribery statute and dismissed all remaining charges. The Third Circuit affirmed the denial of fees. View "United States v. Manzo" on Justia Law