Justia White Collar Crime Opinion Summaries

Defendant threatened to reveal office gossip that the General Counsel of the New York State Comptroller's Office was having an affair unless the General Counsel recanted a recommendation to the State Comptroller to reject a proposal by defendant's company. He was convicted of attempted extortion of the office under the Hobbs Act, 18 U.S.C. 1951(a), and interstate transmission of extortionate threats in violation of 18 U.S.C. 875(d). The Second Circuit affirmed, rejecting his argument that his conduct did not come within the statutory definition of extortion because he did not "attempt to obtain property" from the General Counsel. View "United States v. Sekhar" on Justia Law

As one of the largest developers in Cincinnati, Erpenbeck defrauded buyers and banks out of nearly $34 million. Erpenbeck pled guilty to bank-fraud in 2003, received a 300-month sentence, and was ordered to forfeit proceeds: $33,935,878.02, 18 U.S.C. 982(a). The FBI later learned that Erpenbeck had given a friend more than $250,000 in cash. The friend put the cash in a cooler and buried it on a golf course. Agents unearthed the cooler. The government sought forfeiture of the cash and posted online notice in 2009. Three months later, the trustee of Erpenbeck’s bankruptcy estate contacted an Assistant U.S. Attorney, told her the estate had an interest in the cash and asked about the government's plans. The attorney did not mention the forfeiture proceedings. Because no one asserted an interest, the district court entered an order vesting title to the cash in the government, 21 U.S.C. 853(n)(7). The trustee sought to stay the order in November 2010. The district court denied the motion because the trustee did not file a timely petition. The Sixth Circuit vacated. Even though the trustee’s interest in the cash was "far from a mystery," the government did not take even the "modest step" of sending a certified letter. View "United States v. Erpenbeck" on Justia Law

During 2000-2002, defendant and co-defendant were associated in five instances of depositing large bad checks (one for $15,000,000) in three different bank accounts (the one at issue in the name of a defunct corporation), then writing checks against the resulting, ostensible account balances or requesting substantial wire transfers from them. They were indicted for conspiracy to commit bank and wire fraud, 18 U.S.C. 371, bank fraud, 18 U.S.C. 1344, wire fraud, 18 U.S.C. 1343, and money laundering, 18 U.S.C. 1957. Defendant was charged both as a principal and as aiding and abetting co-defendant, who negotiated guilty pleas. Defendant was convicted. He appealed, claiming insufficiency of the evidence to show anything more than his mere (innocent) presence at some events in the sequence of the transactions charged, and abridgement of his Sixth Amendment right to jury trial when the trial judge closed the courtroom doors during jury instructions. The First Circuit affirmed. View "United States v. Christi" on Justia Law

In the 1990s debtors owned a business that failed and incurred liabilities from unpaid taxes. They had a monthly payment obligation to the IRS. Husband obtained employment; 2003 to 2009, his yearly gross income was between $53,000 and $59,000. In addition, he receives $1,300 per month from a settlement annuity. Wife was employed as a bookkeeper until 1999. In 2000, she pled guilty to felony embezzlement of funds from her former employer and was sentenced to probation and required to pay restitution of $800 per month. Before her indictment wife obtained employment as a bookkeeper for plaintiff, began embezzling, and deposited stolen funds to Debtors’ joint bank accounts. By 2006, she had embezzled $283,391.88 from plaintiff and forged credit card purchases of $2,821.43. In 2007, she embezzled $328,516.10. In 2008, she embezzled $11,230.21. She stole goods valued at $127,156 from her employer. Debtors spent accordingly. The Bankruptcy Court entered an order excepting debt owed to plaintiff from discharge under 11 U.S.C. 523(a)(6), finding that husband conspired with wife to convert embezzled funds and other property. The Sixth Circuit affirmed, holding that Debtors’ conduct constituted willful and malicious injury to plaintiff. View "In re: Cottingham" on Justia Law

Mitchell was a partner in the Cleveland law firm from the early 1980s until 2006. There was no formal partnership agreement; each partner practiced in a different area of law, and each represented his clients with essentially no oversight, but shared evenly in the firm's profits. Mitchell was indicted for his involvement in a long-running scheme to bribe the auditor of Cuyahoga County into awarding overvalued contracts for appraisal work to a company formed by his law partners. The indictment charged conspiracy to commit bribery concerning programs receiving federal funds, 18 U.S.C. 371; bribery concerning programs receiving federal funds, 18 U.S.C. 666(a)(2); and conspiracy to violate the Hobbs Act, 18 U.S.C. 1951. The district court granted Mitchell acquittal on the Hobbs Act charge, but a jury convicted him of the remaining two counts. He was sentenced to 97 months. The Sixth Circuit affirmed, rejecting a challenge to the jury instruction that deliberate ignorance, in some instances, can constitute knowledge, and a challenge to the sentence. View "United States v. Mitchell" on Justia Law

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