Justia White Collar Crime Opinion Summaries

Defendants were convicted on charges arising from an elaborate, years-long financial fraud. Defendant Gowing continued to take actions in furtherance of the conspiracy to defraud even after he was arrested and released awaiting trial for that same charge. On appeal, Gowing principally argued that the district court's application of 18 U.S.C. 3147 was error because he did not commit a separate or additional offense while on release, but only continued to commit the conspiracy. Because the statute did not make such a distinction, and because Gowing's other sentencing arguments were without merit, the court affirmed the convictions and sentences. View "United States v. Gowing" on Justia Law

Andrews was designated as contractor for improvements to the sewage system, in a no-bid process involving kickbacks and bribery, having made numerous false statements in the bond application package. After the contract was terminated, he submitted a claim of $748,304, based on false statements and duplicate charges. Evidence indicated that Andrews was not capable of the project work and that the entire scheme was fraudulent. He was convicted of one count of conspiracy, 18 U.S.C. 371, four counts of wire fraud, 18 U.S.C. 1343, 1346, and 2, one count of program fraud, 18 U.S.C. 666(a)(1)(B) and 2, one count of making a false claim upon the Government of the Virgin Islands, 14 V.I.C. 843(4), and one count of inducing a conflict of interest, 3 V.I.C. 1102, 1103, and 1107. The Third Circuit affirmed the conviction, but remanded for resentencing. Errors in the indictment and jury instructions concerning honest services fraud did not affect substantial rights. Although the 151-month term of imprisonment was within the statutory maximum for Counts Two through Five, it exceeded the statutory maximum for Counts One and Six; it was not possible to determine whether the sentence was legal as to each count View "United States v. Andrew" on Justia Law

Sheneman and his son purchased distressed properties, then flipped the properties by operating an elaborate mortgage fraud scheme that convinced unwitting buyers to purchase properties they could neither afford nor rent out after purchasing. Mortgage lenders were duped into financing the purchases through misrepresentations about the buyers and their financial stability. Four buyers with few assets and no experience in the real estate market purchased 60 homes. Most of the homes were eventually foreclosed upon. The buyers and lenders each suffered significant losses. Sheneman was convicted of four counts of wire fraud, 18 U.S.C. 1343, and sentenced to 97 months' imprisonment. The Seventh Circuit affirmed, rejecting challenges to the sufficiency of the evidence and to application of sentencing enhancements for use of sophisticated means and for losses of more than one million dollars. View "United States v. Sheneman" on Justia Law

Defendant was convicted of various offenses stemming from an extensive mortgage fraud conspiracy. On appeal, defendant challenged the district court's evidentiary rulings, loss calculation, and order directing him to reimburse his court-appointed attorneys' fees. The court affirmed the district court's judgment on the first two issues, but vacated the court's reimbursement order. Defendant also argued that his money laundering convictions must be reversed under United States v. Santos. Applying Santos, as interpreted by United States v. Halstead, to the facts underlying defendant's substantive money laundering convictions, the court agreed and therefore reversed those convictions. View "United States v. Cloud" on Justia Law

ABC is a dissolved corporation. Doe 1 was the company’s President and sole shareholder. Doe 2 is his son. LaCheen represents ABC and Doe 1; Blank represents Doe 2. The law firms have a joint-defense agreement covering the three. Investigating tax implications of ABC’s acquisition and sale of closely held companies, the government issued a grand jury subpoena to ABC’s former vice president as custodian of records. The documents are in custody of Blank. ABC refused to accept service of the subpoena issued to its former employee. The government issued subpoenas to LaCheen and Blank. The firms withheld documents listed on a privilege log. The government sought to compel ABC, Blank, and LaCheen to produce documents identified on the privilege logs, citing cited the crime-fraud doctrine, which provides that evidentiary privileges may not be used to shield communications made for purposes of getting advice for commission of a fraud or crime. The district court entered the order. The Third Circuit dismissed for lack of appellate jurisdiction. To obtain immediate appellate review, a privilege holder must disobey the order, be held in contempt, then appeal the contempt order. That route is available to ABC, which can obtain custody of the documents from its agent. View "In Re: Grand Jury" on Justia Law

Between 2004 and 2008, Brown ran an elaborate scheme that tricked lenders into issuing fraudulent mortgage loans in Chicago and Las Vegas. Brown recruited or directed dozens of individuals: lawyers, accountants, loan officers, bank employees, realtors, home builders, and nominee buyers. Of his accomplices, 32 people were criminally charged. The Chicago scheme resulted in about 150 fraudulent loans, totaling more than $95 million in proceeds from victim lenders. The Las Vegas scheme resulted in approximately 33 fraudulent loans totaling about $16 million. Brown entered guilty pleas and was sentenced to 216 months’ imprisonment for the Las Vegas scheme and 240 months’ imprisonment for the Chicago scheme, to run concurrently. The district court also imposed a restitution amount of more than $32.2 million. The Seventh Circuit affirmed Brown’s sentence, rejecting a challenge to the loss calculation. The court remanded the 66-month sentence and $7.1 restitution order against another participant in the Chicago scheme because the court incorrectly determined the number of victims. View "United States v. Love" on Justia Law

Defendant owned tobacco stores. Currency sales accounted for roughly half of the revenue. He directed employees to separate currency from credit-card and check receipts. He used currency to pay employees and suppliers and failed to report currency receipts on federal and state tax forms from 2002 to 2009. He channeled much of the currency (more than $60 million) to bank accounts in Lebanon, his homeland. He pleaded guilty to mail fraud, 18 U.S.C. 1341, and impeding administration of the Internal Revenue Code, 26 U.S.C. 7212(a). With an upward adjustment of 2 levels for using sophisticated means, U.S.S.G. 2B1.1(b)(10)(C), 2T1.1(b)(2), he was sentenced to 76 months. The Seventh Circuit affirmed. Although defendant did not create phony corporations, use fake names to open accounts, or employ technology to conceal assets, his conduct was sophisticated because he directed employees to separate currency receipts, he withheld funds from corporate bank accounts, and concealed the magnitude of his sales. He secreted money into foreign accounts by carrying currency and cashier’s checks during his travels, avoided reporting by depositing currency in multiple transactions (structuring or smurfing) 31 U.S.C. 5324; and washed money through the accounts of relatives and associates. View "United States v. Ghaddar" on Justia Law

Defendants operated auto dealerships, and from 1995 to 2005, more than half their sales were to drug traffickers, who preferred to deal with defendants because they were willing to accept large cash payments in small bills without question. They falsified sales contracts and liens, ignored federal tax-reporting requirements, and arranged bank deposits to avoid triggering federal bank-reporting requirements. Defendants were convicted of 97 counts of RICO conspiracy, money laundering, mail fraud, illegal transaction structuring, bank fraud, and aiding and abetting a drug conspiracy. The Seventh Circuit affirmed, rejecting challenges to management of the trial and sufficiency of the evidence. The court rejected an argument that conviction of money-laundering, 18 U.S.C. 1956(a), required to proof that defendants engaged in specified financial transactions for the purpose of laundering the "proceeds" of an underlying crime, and that "proceeds" means net profit of the underlying crime, not gross receipts. They were convicted of concealment and transaction-avoidance forms of money-laundering. At the time of trial, it was unclear whether proof of “proceeds” in a concealment or avoidance prosecution required proof that defendant laundered net profits of the underlying criminal activity. View "United States v. Hosseini" on Justia Law

Defendant appealed his sentence after pleading guilty to wire fraud and aggravated identity theft. The court rejected defendant's contention that the district court impermissibly considered factors unrelated to his assistance to law enforcement and that the district court improperly refused to consider some of his assistance to law enforcement. Therefore, the court affirmed the sentence, holding that the district court did not commit plain error when it determined the extent of the downward departure under U.S.S.G. 5K1.1. View "United States v. Troyer" on Justia Law

Defendant pleaded guilty to money laundering and conspiring to commit honest-services mail fraud. Defendant's conviction stemmed from his participation in defrauding his employer, Best Buy, by assisting one of Best Buy's vendors. On appeal, defendant challenged his sentence, contending that the district court erred by denying him an acceptance of responsibility reduction under U.S.S.G. 3E1.1 and by sentencing him above the 60-month maximum for the conspiracy offense. The district court found that defendant's repeated false statements at a crucial point in the case were "all direct repudiations of his own guilt." Therefore, the court held that the perjured testimony went to the heart of the acceptance of responsibility, and the district court did not clearly err in finding that defendant did not "clearly demonstrate" his willingness to take responsibility for his criminal conduct. The court agreed that the 90-month sentence for conspiracy exceeded the statutory maximum but concluded that the error did not affect defendant's substantial rights. Accordingly, the court affirmed the judgment. View "United States v. Bossany, Jr." on Justia Law