Justia White Collar Crime Opinion Summaries

Defendant was convicted of ten counts of money laundering under 18 U.S.C. 1956, which prohibited individuals from laundering the "proceeds" of certain activities. After the Supreme Court held that "proceeds" meant "profits" rather than "gross receipts" in United States v. Santos, defendant moved for relief under 28 U.S.C. 2255 and appealed from the district court's denial of that motion. The court concluded that defendant did not argue on appeal that he was entitled to relief under the two-step analysis described in Garland v. Roy. Therefore, the court need not and did not resolve those issues. Because Garland prevented the court from uniformly defining "proceeds" as "profits" across the money-laundering statute, the court affirmed the judgment. View "United States v. Ghali" on Justia Law

Owens, a Chicago zoning inspector, was convicted of two counts of federal program bribery, 18 U.S.C. 666(a)(1)(B), for accepting two $600 bribes in exchange for issuing certificates of occupancy for four newly constructed homes. The Seventh Circuit reversed, finding that there was insufficient evidence, to establish beyond a reasonable doubt, that the issuance of the certificates of occupancy had a value of $5,000 or more as required by the statute. View "United States v. Owen" on Justia Law

Defendant appealed from a Memorandum and Order of Restitution by the district court resentencing him to pay restitution to the victims of a massive "pump-and-dump" securities fraud scheme he and his co-conspirators designed and executed. Defendant contended, inter alia, that the district court should have released some or all of defendant's money held by the court pending his resentencing. The court held that a district court could exercise its authority under the All Writs Act, 28 U.S.C. 1651(a), to restrain a convicted defendant's funds in anticipation of sentencing. Therefore, the court affirmed the restitution order. View "United States v. Catoggio" on Justia Law

After a jury trial in the United States district court, Appellant, an attorney, was convicted on bribery, extortion, and conspiracy charges stemming from his involvement in a scheme to purchase the votes of three corrupt town councilmen on two zoning matters. During the trial, the district court admitted into evidence under Fed. R. Evid. 801(d)(2)(E) a number of recorded statements about Appellant made by one of the councilmen to a government informant. On appeal, Appellant argued that some of these statements should have been excluded as hearsay, and challenged the admission of all the statements on constitutional grounds under the Confrontation Clause. Appellant also claimed the district court erred in calculating his sentence under the United States Sentencing Guidelines. The First Circuit Court of Appeals affirmed, holding (1) the district court did not clearly err in admitting the challenged statements; and (2) the sentence imposed was appropriate. View "United States v. Ciresi" on Justia Law

Four defendants were convicted of conspiring to defraud the U.S. by impeding the functions of the IRS and of related fraud and tax offenses in connection with abusive trusts promoted by two Illinois companies. Although the system of trusts was portrayed as a legitimate, sophisticated means of tax minimization grounded in the common law, the system was in essence a sham, designed solely to conceal a trust purchaser’s assets and income from the IRS. It was promoted through a network of corrupt promoters, managers, attorneys, and accountants, but prospective customers who sought independent advice were routinely warned of its flaws. Defendants were sentenced to prison terms of 120 to 223 months. The Seventh Circuit affirmed. View "United States v. Vallone" on Justia Law

The company, S.C. Johnson & Son, was injured by a bribery and kickback scheme involving a dishonest employee and transportation companies with which it had contracts and filed a tort lawsuit in Wisconsin state court. The company filed a second suit, against different transportation defendants, in federal court, based on diversity jurisdiction. The district court dismissed the suit, which raised state law claims of fraudulent misrepresentation by omission; criminal conspiracy to violate Wisconsin’s bribery statute, Wis. Stat. 134.05; conspiracy to commit fraud; violations of the Wisconsin Organized Crime Control Act, Wis. Stat. 946.80, through racketeering activity and mail and wire fraud; and aiding and abetting a breach of fiduciary duty by providing bribes and kickbacks. The court indicated that federal law preempted state tort claims because they could have “the force and effect of a law related to a price, route, or service of any motor carrier . . . with respect to the transportation of property.” 49 U.S.C. 14501(c)(1). The Seventh Circuit reversed. A claim for fraudulent misrepresentation was properly dismissed, but theories based on bribery and kickbacks fall outside the scope of the preemption provision. View "SC Johnson & Son Inc. v. Transp. Corp. of Am., Inc." on Justia Law

Appellants were players in the Boston real estate market. Along with six coconspirators, Appellants devised and executed a mortgage fraud scheme which netted them illegal profits of nearly $2 million between May 2005 and June 2006. Appellants and their coconspirators were found guilty of one count of conspiring to commit wire fraud and with multiple counts of committing wire fraud. In addition, two defendants were found guilty of multiple counts of money laundering. The First Circuit Court Court of Appeals affirmed Appellants' convictions and sentences, holding, inter alia, (1) there was sufficient evidence to support Appellants' convictions; (2) the district court did not err by admitting into evidence four charts summarizing the financial data in this case; (3) the district court did not err in instructing the jury that it had a duty to return a guilty verdict if it concluded that the government had proven its case beyond a reasonable doubt; and (4) there was no error in the district court's loss calculation methodology and none in its mathematical application of this methodology. View "United States v. Appolon" on Justia Law

Atlantic, a New Jersey pipe foundry, and four of its managers were convicted of conspiring to commit environmental pollution and worker safety violations, attempting to cover up or impede federal investigation of those violations, and violations of the Clean Water Act (33 U.S.C. 1251) and the Clean Air Act (42 U.S.C. 7413(c)). Defendants illegally pumped contaminated water into storm drains that drained into the Delaware River; unlawfully burned 50-gallon drums of paint waste in a cupola and emitted the fumes into the air; and attempted to cover up work-related accidents at its facility, one of which resulted in the death of an employee who was run-over by a forklift. The district court imposed sentences of 70, 41, 30 and six months’ imprisonment on the managers and applied the Alternative Fines Act, 18 U.S.C. 3571(c)(1), rather than the CWA and CAA, and fined Atlantic the maximum penalty of $500,000 per violation on conspiracy, four counts of obstruction, eight CWA counts, and one CAA count for a total fine of $8 million. It also sentenced Atlantic to 4 years’ probation, with a court-ordered monitor to ensure regulatory compliance. The Third Circuit affirmed, rejecting challenges to evidentiary rulings, jury instructions, and the sentences. View "United States v. Maury" on Justia Law

Robers pleaded guilty to conspiracy to commit wire fraud, 18 U.S.C. 371, based on his role in a mortgage fraud scheme; Robers signed mortgage documents seeking loans based on inflated income and assets and on his claim that he would reside in the houses and pay the mortgages. The loans went into default. The district court sentenced Robers to three years’ probation and ordered him to pay $218,952 in restitution to a lender and a mortgage insurance company. The Seventh Circuit affirmed the restitution order. The Mandatory Victims Restitution Act, 18 U.S.C. 3663A, requires restitution in the case of a crime resulting in damage to or loss or destruction of property. The court rejected Robers’s argument that the MVRA requires the court to determine the offset value based on the fair market value the collateral had on the date the lenders obtained title to the houses following foreclosure as the “date the property is returned.” Money was the property stolen and foreclosure is not a return of that property; only when the real estate is resold do the victims receive money. Victims are also entitled to expenses, other than attorney’s fees and unspecified fees, related to foreclosure and sale. View "United States v. Robers" on Justia Law

Plaintiffs delivered artifacts from a famous shipwreck to Debtor for display and, according to Debtor, sale in Debtor’s jewelry store. The store went out of business. When Debtor returned the artifacts, an emerald pendant and musket balls were missing. Plaintiffs filed a complaint alleging breach of fiduciary duty, common law conversion, and statutory conversion or negligence. A Michigan state court found that Debtor’s failure to respond to any written discovery requests, file a response to the Motion for Summary Disposition, and appear at the hearing were sufficient basis for entry of summary disposition and awarded $42,706.10. The judgment did not specify the claim upon which it was based. Debtor filed a voluntary Chapter 7 bankruptcy petition. Plaintiffs filed an adversary complaint seeking to have the debt declared nondischargeable under 11 U.S.C. 523(a)(4), stating that Debtor’s actions constituted “fraud or defalcation while acting in a fiduciary capacity, embezzlement, or larceny.” The bankruptcy court granted Plaintiffs summary judgment. The Sixth Circuit reversed. The bankruptcy court erred when it held that the issue of fraud was “necessarily determined” by the state court; the state court judgment cannot have issue preclusive effect as to this element for nondischargeability under the embezzlement portion of section 523(a)(4). View "In re: Dantone" on Justia Law