Justia White Collar Crime Opinion Summaries

Defendant was the fiancee of the leader of a Philadelphia drug distribution ring responsible for selling a large amount of cocaine and cocaine base (crack) from 1998 to 2005. In 2005, the couple used drug money to purchase a new home, which was titled in defendant's name. When her fiancee was charged with drug trafficking and firearms offenses, defendant was charged with money laundering in purchasing the house, 18 U.S.C. 1956(a)(1)(B)(i). She appealed her conviction. The Third Circuit vacated. The evidence was not sufficient to establish knowledge of a design to conceal on defendant's part. Defendant lied about her income and had the property titled in her name, not to hide her fiancee's involvement (which was obvious), but to get around his bad credit and purchase the house. View "United States v. Richardson" on Justia Law

Defendant did not inform the government when his mother died, but, for 12 years cashed checks for benefits she had earned under the Civil Service Retirement System, netting $158,000. He pleaded guilty to mail fraud. His Guidelines sentencing range was 21 to 27 months, but the judge sentenced him to 30 months, because she believed that he needed treatment for mental illness and alcoholism and that it would take more than 18 months. The Seventh Circuit vacated. While the appeal was pending, the Supreme Court held that a sentencing judge is to recognize that imprisonment is not an appropriate means of promoting correction and rehabilitation, 18 U.S.C. 3582(a), and may not increase the length of a prison term in order to facilitate rehabilitation or correction.View "United States v. Kubeczko" on Justia Law

After a pyramid scheme that he had maintained for nearly a decade came to light, defendant pleaded guilty to one count of fraud, 18 U.S.C. 1341. The district court sentenced him well above the applicable guidelines range to 120 months. The Seventh Circuit affirmed, rejecting a claim that the court erroneously applied a 4-level adjustment under U.S.S.G. 2B1.1(b)(2)(B) for defrauding more than 50 victims and a claim that the sentence was substantively unreasonable.View "United States v. Scott" on Justia Law

Defendant, manager of a kosher meatpacking company, was convicted of 86 counts of bank, wire, and mail fraud; making false statements to a bank; money laundering; and violations of an order of the Secretary of Agriculture. Defendant appealed his convictions and sentence. The court held that there was no evidence in the record that the district court's decision to remain on the case prejudiced defendant's verdict and concluded that the district court did not err by denying defendant's motion for a new trial. The court also held that the district court did not abuse its discretion in trying the financial charges first where the district court's order was a practical solution given the nature and number of the charges. The court further held that, with the exception of one count of false statements to a bank which was premised solely on violations of immigration law, any error on this evidence would have been harmless because it would have had no effect on the verdict. Therefore, the district court did not abuse its wide discretion in excluding evidence. The court finally held that, because defendant's offense was falsely stating that the company was in compliance with its laws, the court did not commit plain error with its instruction on harboring illegal aliens; defendant's money laundering convictions were lawful and did not merge with any other of his crimes; there was no error in the district court's loss calculation; and the district court did not abuse its considerable discretion in imposing a 324 month sentence. Accordingly, the court affirmed the judgment of the district court. View "United States v. Rubashkin" on Justia Law

Defendant, James Gansman, appealed from a judgment convicting him of insider trading under the so-called "misappropriation theory." At issue was whether the district court erred in declining to adopt an instruction proposed by Gansman setting forth a theory of the defense based in part on SEC Rule 10b5-2, 17 C.F.R. 240.10b5-2. The court held that Gansman was entitled to assert a defense theory that he did not have the requisite intent to commit securities fraud, and that in defining the nature of his relationship with Donna Murdoch, a woman with whom he was having an affair, to the jury, he had the right to use language found in Rule 10b5-2. The court held that, nevertheless, Gansman was not entitled to a new trial in the circumstances presented because the slightly modified instruction given by the district court was legally sufficient. Gansman raised a number of other challenges to his conviction, all of which were without merit. Accordingly, the court affirmed the judgment of the district court. View "United States v. Gansman, et al." on Justia Law

In January 2009, Defendant-Appellant Robert Blechman and a codefendant, Itsik (Issac) Yass, were tried together in the District of Kansas on charges of mail fraud, aggravated identity theft, and conspiracy to commit mail fraud and aggravated identity theft. Evidence introduced at trial showed that Yass operated a business that he used to temporarily halt home foreclosures by "attaching" foreclosure properties to fraudulent bankruptcy cases in order to take advantage of the Bankruptcy Code’s automatic stay provision. After a two-week trial, the jury found Blechman and Yass guilty of all of the counts charged against them. The district court granted Blechman's motion for judgment of acquittal on the identity theft counts and ultimately sentenced Blechman to a total of eighteen months' imprisonment on the remaining counts. Blechman appealed, challenging the district court’s admission of an America Online (AOL) record that connected him to an e-mail address and three PACER records revealing that he accessed fraudulent bankruptcy cases in Tennessee that were similar to the Kansas bankruptcies identified in the indictment. Blechman argued that these records contained double hearsay and that the district court erroneously admitted them under the business records exception to the hearsay rule. Upon review, the Tenth Circuit held that the district court erred in admitting the challenged AOL and PACER records under Rule 803(6). Nevertheless, because the Court concluded that the error was harmless, it affirmed Blechman's convictions. View "United States v. Blechman" on Justia Law

Defendant pleaded guilty to multiple crimes related to his conduct in running a fraudulent Ponzi scheme. The district court disregarded the plea agreement's recommendation of an applicable sentencing range of 151-188 months imprisonment and imposed the statutory maximum sentence of 360 months. Defendant argued that the Government breached the plea agreement by providing the district court with facts and arguments supporting a longer sentence than the parties agreed upon. The court held that the Government did not breach the plea agreement where the district court exercised its discretion by disregarding the plea agreement's recommendations and independently deciding to impose the statutory maximum sentence. The court also held that defendant waived his right to appeal the sentence on grounds that the district court abused its discretion in imposing the statutory minimum. Accordingly, the sentence was affirmed. View "United States v. Pizzolato" on Justia Law

Defendant was convicted of bank fraud (18 U.S.C. 1344) and wire fraud (18 U.S.C. 1343), based a scheme to acquire a house for $1.4 million, intending to resell for a profit. The purchase involved recruiting a third-party with good financial credit to act as nominal purchaser. Defendant and her now-deceased husband provided the straw buyer with $30,000 that she deposited in her bank account, and falsified documents so that she appeared as president of defendants' sales group since 2003, earning a salary of $30,000-to-$40,000 per month. Within months of the purchase, the loan went into default. The lien holder foreclosed and resold the house, resulting in a net loss of $376,070.16. The straw buyer was not prosecuted, but testified without a nonprosecution agreement. The Sixth Circuit affirmed denial of a motion for a new trial. The prosecution's failure to disclose that the straw buyer was testifying without an agreement was not material, for purposes of a "Brady" violation or a claim of ineffective assistance. View "United States v. Holder" on Justia Law

Defendants, Brian Keith Ellefson and Mark Edward Ellefsen, were convicted of conspiracy to defraud the United States by obstructing the IRS in the assessment and collection of federal taxes. Brian was also convicted of three counts of filing false income tax returns while Mark was convicted of three counts of aiding and assisting the preparation of false income tax returns. Defendants appealed their convictions and challenged the restitution order. The court held that because the undisclosed information at issue was not material, there was no Brady violation. The court also held that, although the defense should have been allowed to cross-examine a certain government witness regarding a tax-loss calculation and whether she considered Brian's additional payments, any error in denying the cross-examination was harmless beyond a reasonable doubt. The court further held that the district court did not abuse its discretion in excluding defendants' proposed expert testimony under Federal Rule of Evidence 403. The district court also did not err in denying the motion for judgment of acquittal and did not abuse its discretion in denying the motion for a new trial where the record was replete with evidence to support the jury's finding that defendants acted willfully. The court finally held that there was no clear error in the district court's judgment of restitution where the government met its burden of proof and deducted Brian's additional payments from the amount of restitution owed to the IRS. Accordingly, the convictions and restitution orders were affirmed. View "United States v. Ellefsen" on Justia Law

Defendant was convicted of filing a false joint income tax return with his wife for calendar year 2007 and sentenced to twenty-four months in prison. On appeal, defendant argued that there was insufficient evidence of willful false reporting, admission of unfairly prejudicial evidence of gambling expenses, and a substantively unreasonable sentence. The court held that the government's evidence was sufficient to permit a rational trier of fact to find the essential elements of the offense beyond a reasonable doubt. The court also held that defendant's casino activities were clear evidence that he personally spent a substantial amount of his business's reported income on expenditures that were not reportable as the business's costs of goods sold and that the evidence was unlikely to unfairly prejudice him. The court further held that the district court did not abuse its substantial sentencing discretion in imposing a presumptively reasonable sentence that was within the advisory guidelines range. Accordingly, the judgment of the district court was affirmed. View "United States v. Shrum" on Justia Law