Justia White Collar Crime Opinion Summaries

Stoerr pled guilty to bid rigging, 15 U.S.C. 1; conspiracy to provide kickbacks and to defraud the United States, 18 U.S.C. 371; and assisting in the preparation of false tax returns, 26 U.S.C. § 7206(2). The convictions stemmed from kickback payments that Stoerr solicited and accepted from sub-contractors in connection with environmental remediation projects managed by Sevenson, his employer from 1980 to October 2003. In total, the district court determined that the scheme resulted in losses of $134,098.96 to the EPA and $257,129.22 to Tierra. After Sevenson learned of the kickbacks scheme, it paid Tierra approximately $241,000 to compensate for its losses. It then commenced a civil action against Stoerr in state court to recover its losses, and sought restitution in connection with Stoerr’s sentencing, under the Mandatory Victims Restitution Act, 18 U.S.C. 3663A, for reimbursement of the amount that it paid to Tierra. The district court denied Sevenson‟s request for restitution, instead ordering that Stoerr pay restitution to Tierra. The Third Circuit dismissed; as a non-party, Sevenson lacks standing to appeal. View "United States v. Stoerr" on Justia Law

Defendant appealed his conviction of two counts of securities fraud, arguing that he was prejudiced by the trial court's improper admission of a prior civil complaint filed by the SEC against him. The court agreed and vacated defendant's conviction, remanding for a new trial. View "United States v. Bailey" on Justia Law

Sklena and Sarvey were floor traders in the Five-Year Treasury Note futures pit at the Chicago Board of Trade. Sklena was a “local,” authorized to trade only on his own behalf; Sarvey was a “broker” and could trade for himself and for his customers. On April 2, 2004, the price of the Five-Year Note futures fluctuated wildly. Sarvey and Sklena executed the series of transactions that resulted in criminal prosecution. According to the government, Sklena and Sarvey conspired to sell Sarvey’s customers’ contracts noncompetitively. The U.S. Commodity Futures Trading Commission filed a civil complaint alleging that the two “engaged in a series of non-competitive trades” that defrauded customers out of over $2 million. Sarvey died before trial on charges of wire and commodity fraud and noncompetitive futures contract trading. In Sklena’s trial, the district court excluded Sarvey’s deposition as inadmissible hearsay. Sklena was convicted. The Seventh Circuit reversed. There was sufficient evidence to support the conviction, but the court erred in excluding the deposition testimony.View "United States v. Sklena" on Justia Law

Contorinis was a co-portfolio manager of the Fund, which invested in companies in the retail and personal products sectors. In 2000, Contorinis befriended Stephanou, who became an investment banker in the Mergers and Acquisitions group at UBS in 2002. Stephanou regularly provided confidential information to several friends and, in 2005, shared information about a planned acquisition with Contorinis and others. Based on a series of transactions following Stehanou’s disclosures the about and on-again, off-again acquisition, Contorinis was convicted of conspiracy to commit securities fraud and insider trading. The district court imposed a forfeiture order of $12.65 million. The Second Circuit affirmed the conviction. A challenged jury instruction adequately conveyed the definition of material, nonpublic information; the court was within its discretion in admitting evidence of contemporaneous trades by individuals who received inside information from the same source as Contorinis. The court vacated the order to forfeit gains acquired by Contorinis’s employer, but not by him.View "United States v. Contorinis" on Justia Law

Watkins, an African-American, worked for the school district, overseeing security systems. Fultz supervised Watkins and, relying on Watkins’s advice, Fultz awarded Vision a $182,000 annual contract for service of security cameras. Vision’s president, Newsome, testified that Watkins called her and talked about a “finder’s fee.. Newsome went to Cleveland for a customer visit. She e-mailed Watkins and he replied: “Absolutely$.” Newsome believed that Watkins expected her to pay him at their meeting. Newsome notified Fultz. At the meeting, Watkins requested “an envelope.” After Fultz contacted police, the FBI recorded meetings at which Newsome gave Watkins $5,000 and $2,000. A white jury convicted on two counts of attempted extortion “under color of official right” (Hobbs Act, 18 U.S.C. 1951), and one count of bribery in a federally funded program, 18 U.S.C. 666(a)(1)(B). The court determined a total offense level of 22, applying a two-level enhancement for obstruction of justice, another two-level enhancement for bribes exceeding $5,000, and a four-level enhancement for high level of authority, plus an upward variance of 21 months under 18 U.S.C. 3553(a), and sentenced Watkins to six years’ incarceration. The Sixth Circuit affirmed, rejecting challenges to jury instructions, sufficiency of the evidence, the jury’s racial composition, and the reasonableness of the sentence.View "United States v. Watkins" on Justia Law

Appellants Walter Teel, Paul Minor and John Whitfield raised several appellate issues arising from their final amended judgments of convictions and sentences entered by the district court after the Fifth Circuit Court of Appeals remanded the case for resentencing in United States v. Whitfield. The Fifth Circuit Court of Appeals affirmed the district court's judgment on remand, holding (1) Appellants' argument that the jury instructions erroneously defined honest-services fraud were barred by the mandate rule; (2) Appellants' argument that the indictment was erroneous for failure to state an offense was also barred by the mandate rule; and (3) the district court did not err in sentencing Minor and Whitfield. View "United States v. Teel" on Justia Law

The Eleventh Circuit consolidated two criminal cases involving sophisticated financial structuring arrangements between related corporate subsidiaries. Appellants, William Allen Broughton and Richard William Peterson were convicted of conducting a "modern-day financial shell game" in which they falsified financial statements, exchanged paper ownership over non-extant fraudulent assets, and collected insurance premiums and monthly payments from unwitting innocents. Collectively, they stated two bases for reversal: (1) Broughton contended that the Government's purported failure to file charges within the relevant statutes of limitations "demand[ed]" reversal; and (2) both Appellants claimed that the district court erred in denying their motions for judgment of acquittal due to an insufficiency of evidence. Finding no error, the Eleventh Circuit affirmed Appellants' convictions. View "United States v. Peterson" on Justia Law

Defendant Donald Branham pleaded guilty to numerous counts of bank fraud and was sentenced to thirty months in prison and ordered to pay $1.8 million in restitution. The district court issued a writ of garnishment to garnish specified accounts that belonged to Donald and his wife Charlotte. The Branhams moved to dissolve the writ of garnishment on the ground that Charlote's accounts were not community property. They also requested a hearing. The district court denied the Branhams' motions without a hearing. The Branhams appealed. The Fifth Circuit Court of Appeals dismissed the appeal without prejudice for want of appellate jurisdiction, holding that the order appealed from was not a final order. View "United States v. Branham" on Justia Law

After being rejected for a mortgage because Hall had a bankruptcy and their joint income was too low, Phillips and Hall applied with Bowling, a mortgage broker, under the “stated income loan program.” Bowling prepared an application that omitted Hall’s name, attributed their combined income to Phillips, doubled that income, and falsely claimed that Phillips was a manager. Phillips signed the application and employment verification form. Fremont extended credit. They could not make the payments; the lender foreclosed. Bowling repeated this process often. He pleaded guilty to bank fraud and, to lower his sentence, assisted in prosecution of his clients. Phillips and Hall were convicted under 18 U.S.C. 1014. The district court prohibited them from eliciting testimony that Bowling assured them that the loan program was lawful and from arguing mistake of fact when in signing the application and employment verification. They argued that they were hindered in showing the lack of intent for a specific-intent crime. The district judge concluded that they sought to argue mistake of law. Jury instructions required acquittal absent a finding, beyond a reasonable doubt, that defendants knew that the statements were false; genuine mistake of fact would have led to acquittal.. The Seventh Circuit affirmed.View "United States v. Phillips" on Justia Law

Traders employed by brokerage firms were indicted for conspiring with employees of Watley, a day trading firm, to commit securities fraud by providing their employers’ confidential information to Watley. After a mistrial on conspiracy to commit securities fraud, 18 U.S.C. 1348, 1349, the government retried the conspiracy count with honest services fraud and property fraud as the charged objects of conspiracy. The jury convicted under each theory. The Supreme Court subsequently decided Skilling, limiting honest services fraud to schemes effectuated through bribes or kickbacks. After sentencing, the SEC initiated administrative proceedings and disclosed transcripts of investigative depositions taken as early as 2004. With access to those transcripts, defendants moved for a new trial, contending that the transcripts included material required to be disclosed under Brady because it contradicted or undermined testimony of key government witnesses on a central question: whether allegedly misappropriated information was confidential under Carpenter v. U. S. The district court concluded that the jury would not have reached a different result had the transcripts been disclosed. The Second Circuit vacated. Failure to disclose portions of the transcripts violated Brady and undermined confidence in the verdict. The court also did not adequately instruct the jury on the scope of honest services fraud. View "United States v. Mahaffy" on Justia Law