Justia White Collar Crime Opinion Summaries

Defendant appealed from a judgment of conviction for securities fraud and conspiracy to commit securities fraud and wire fraud. At issue, among other things, was whether venue was proper in the Eastern District of New York. The court held that venue in the Eastern District was proper for the conspiracy counts where defendant committed overt acts in furtherance of the conspiracies in the Eastern District. Accordingly, the court did not find venue for the conspiracy charges to be unfair or prejudicial. The court held, however, that venue in the Eastern District was improper for the substantive securities fraud count where no conduct that constituted the offense took place in the Eastern District. Accordingly, nothing in United States v. Svoboda called into question the principle that preparatory acts alone were insufficient to establish venue. Therefore, the court affirmed in part and reversed in part.

Defendants fraudulently obtained over 300 mortgage-backed loans for buyers who used the loans to purchase houses and condominiums from defendants at more than market value. An indictment charged 18 defendants with a total of 187 counts, including three separate conspiracies and a host of substantive counts. The jury delivered split verdicts on defendants and guilty verdicts on other defendants. Numerous issues were raised on appeal related to defendants' motions for severance, jury selection issues, evidentiary issues, miscellaneous trial issues, the sufficiency of the evidence, double jeopardy claims, Kastigar v. United States claims, and sentencing issues. The court affirmed all the convictions and sentences of all of defendants in all respects except that the court vacated the district court's order denying Leslie Rector's motion to dismiss, which asserted as its ground that the government had breached the proffer agreement; as to that motion, the court remanded for further proceedings.

Appellant, a primary care physician who served Medicaid patients in the District of Columbia, appealed his convictions for health care fraud and for making false statements relating to health care matters, as well as his 53 month prison sentence. At issue was whether the district court committed evidentiary errors and improperly refused to give the good faith instruction appellant requested. Also at issue was whether appellant's sentence was procedurally unreasonable. The court found no merit in appellant's assertions of trial errors and affirmed the judgment of conviction. The court held, however, that because the district gave an inadequate explanation for its above-Guidelines sentence and because this procedural defect amounted to plain error, the court vacated the sentence and remanded for further proceedings.

Defendant Linda Carnagie entered into a scheme to defraud the U.S. Department of Housing and Urban Development (HUD) by using false information to obtain housing loans insured by the Federal Housing Administration (FHA). For a fee, a third party provided fake pay stubs, Social Security Numbers and other requisite documents to persons with no credit or bad credit so that they could apply for FHA-insured home loans. Defendant was one such person who paid for the fake documents. Defendant did not dispute that the loan application she made contained false information, nor did she dispute that her typewritten name appeared on most of the documents. Instead, Defendant argued that she never signed any of the documents and that fact proved she was not involved in the scheme. A jury convicted Defendant on several counts of making false statements. On appeal to the Tenth Circuit, Defendant argued that there was insufficient evidence to convict her of many of those counts, and she also challenged the length of her sentence. Upon consideration of Defendant's arguments, the Court found none persuasive. The Court affirmed Defendant's conviction and sentence.

Defendant was indicted along with seventeen other people in a mortgage fraud case and was tried separately from his co-defendants because he insisted on proceeding pro se, at least up until the very day his trial began. The jury returned a guilty verdict on all counts and defendant now challenged his convictions. The court held that the district court acted well within its discretion when it refused to grant defendant yet another continuance on the day set for the trial to begin where defendant had insisted on proceeding pro se despite the district court's repeated warnings and thereby, contributed to his own situation. The court also held that defendant's Fourteenth Amendment right to a fair trial was not violated by the fact that he wore prison attire instead of furnishing his own street clothes as he had promised the court he would do. The court further held that the district court did not err in permitting a former real estate attorney to testify as a lay witness because the part of the witness' testimony that was elicited by the government was based on his own personal knowledge of mortgage fraud and therefore, he did not have to be qualified as an expert. Accordingly, the court affirmed the convictions.

After not paying taxes for several years and creating shell corporations to receive his income, the defendant, a commodities trader, entered a guilty plea to one count of tax evasion, 26 U.S.C. 7201. The district court calculated an offense level of 21, carrying a range of 37-46 months' imprisonment under the sentencing guidelines and imposed a 24 month sentence. The Seventh Circuit affirmed. Rejecting an argument that the government breached the plea agreement, the court reasoned that both parties understood that the losses stated in that agreement remained uncertain and open to recalculation. The record supported the tax losses upon which the sentence was based. Application of an enhancement for use of "sophisticated means" was appropriate.

Defendant appealed from two judgments of conviction related to his involvement in "pump and dump" stock schemes. At issue was whether the first judgment of conviction, entered upon a jury verdict, should be overturned, either because the evidence was insufficient to permit a jury to find a fiduciary duty, or because the jury was improperly instructed about how to determine the existence of a fiduciary duty. Also at issue was whether the second judgment of conviction should be overturned because defendant's guilty plea, entered after his conviction in the first trial, was premised on the outcome of that trial. The court held that, upon reviewing the jury instructions for plain error and taking the evidence in the light most favorable to the Government, the jury was entitled to find that the brokers in this case had a duty to disclose their exorbitant commissions, just as they had a duty to refrain from making affirmative misrepresentations regarding the size of their commissions, and thus, the district court properly instructed the jury on the elements of that duty. The court also held that, because it found no principled basis on which to distinguish this case from United States v. Szur, the court concluded that there was no error in the charge, and affirmed defendant's first conviction. Therefore, the court's conclusion necessarily defeated defendant's argument challenging his subsequent guilty plea and the second judgment of conviction was also affirmed.

Defendant entered a plea agreement in which he agreed to plead guilty to two counts of felony theft and to pay restitution for the loss incurred as a result of his fraudulent acts. At issue was whether the district court erred in issuing a restitution order where the State failed to submit sworn victim affidavits as required by 46-18-242(1)(b), MCA. The court held that defendant failed to preserve his objection to the pre-sentencing investigation report's omission of victim affidavits where, except for his lone objection on the date of sentencing, defendant did not alert the trial court of any claim that victim affidavits were required for an order of restitution in his case; where defendant's plea agreement expressly consented to the court's determination of restitution upon hearing; where his own filings acknowledged the accuracy of the surrender penalty figures; and where his pre-sentencing briefs stated the dispute in terms of legal argument regarding the measure of loss, which the parties had agreed to submit to the court for resolution, a ruling he did not challenge on appeal.

Plaintiffs sued defendants alleging claims under the federal RICO statute, 18 U.S.C. 1962(c),(d), and under various state laws based on allegations that defendants defrauded individuals throughout the United States by devising an investment scheme through which investors could purchase real estate interests in luxury vacation properties in the Dominican Republic. At issue was whether the district court properly severed the 232 plaintiffs, and their claims, and instructed each plaintiff to file his or her complaint in a separate action. The court held that it lacked jurisdiction because the severance order was not final and the collateral order doctrine did not apply to an interlocutory order severing claims.

Appellant, the finance officer for the Standing Rock Housing Authority of the Standing Rock Sioux Tribe, pleaded guilty to theft concerning programs receiving federal funds and was sentenced to the statutory maximum of 120 months imprisonment. At issue was whether the district court committed procedural error when it departed upwards from the advisory U.S. Sentencing Guidelines range, U.S.S.G. 4A1.3, and when it considered ethnicity and other improper factors during sentencing. Also at issue was whether the sentencing was substantively unreasonable. The court held that the district court did not engage in impermissible double counting by departing upwards to criminal history category IV where the district court discussed the nature and circumstances of the offense and the history and characteristics of appellant, the need to avoid unwarranted sentencing disparities between similar defendants, and the need to provide restitution for the victims. The court also held that the sentence was substantively reasonable where any comments regarding race or national origin were not offered as an explanation for imposing sentence but reflected the district court's disagreement with appellant's counsel that the Guidelines were "fair" and that a Guidelines sentence of 70 to 87 months imprisonment was appropriate as a matter of law; where the district court's statements expressed its frustration about its inability to order restitution for an amount closer to the total loss of money rather than a comment on appellant's socio-economic status; and where the district court did not use appellant's lack of an addiction to justify the sentence, but rather to describe his state of mind as he carried out the embezzlement scheme.