Justia White Collar Crime Opinion Summaries

Defendant, pro se, was convicted of 129 counts of unlawfully dispensing certain controlled substances by means of written prescriptions and sentenced to concurrent terms of imprisonment totaling 97 months and fined $200,000. At issue was whether the district court effectively denied defendant his right to testify. The court held that in these circumstances, where the district court initiated a colloquy with defendant regarding his right to testify, the district court was duty-bound to correct a pro se defendant's obvious misunderstanding of his right to testify. The court also held that the error was not harmless and therefore, the court vacated defendant's convictions and remanded.

Defendant, convicted under 18 U.S.C. 371 of conspiracy to defraud the United States while serving as in-house general counsel to the company involving the company's filing of false tax returns with the IRS. He was sentenced to 41 months of imprisonment, followed by three years of supervised release, and ordered to pay restitution to the IRS. The Sixth Circuit affirmed. The jury instructions adequately addressed the elements of conspiracy. There was no need for mention of the attorney-client privilege or of an attorney's potential obligation to report illegal activity. The government’s theory of liability was not dependent on whether defendant had an affirmative duty to inform, yet failed to do so; conviction did not turn on whether defendant's actions were governed by the attorney-client privilege. There was sufficient evidence to support the conviction.

Appellee alleged that six U.S. Postal Inspectors wrongly caused him to be criminally prosecuted in retaliation for his public criticism of the United States Postal Service (USPS) and its personnel. The Postal Inspectors appealed the district court's qualified immunity, on appellee's claim of retaliatory inducement to prosecution in violation of his right to free speech under the First Amendment. Insofar as the appeal challenged the district court's determination that there were genuine issues of material fact, the court dismissed it for lack of jurisdiction. Insofar as the district court declined to find the Postal Inspectors protected by qualified immunity based on "arguable probable cause," the court affirmed. Accordingly, the court remanded to the district court for trial on the merits.

Petitioners appealed from a Memorandum and Order and Final Order of Forfeiture entered by the district court dismissing their petition for an ancillary hearing and rejecting their claim as beneficiaries of a putative constructive trust in defendant's forfeiture assets. At issue was whether the remission provision of 21 U.S.C. 853(i) precluded the imposition of a constructive trust in petitioners' favor and whether imposing a constructive trust would be consistent with a forfeiture statutory scheme provided by section 853. Because the court concluded that section 853(i) did not preclude, as a matter of law, recognizing a constructive trust and because a constructive trust was not inconsistent with the forfeiture statute, the court vacated the Final Order of Forfeiture and remanded the case to the district court to consider whether, pursuant to Vermont law, a constructive trust should be recognized in favor of petitioners.

Appellant, who was the Executive Director of the Poverty Point Reservoir District (PPRD), was convicted of extortion in violation of the Hobbs Act, 18 U.S.C. 1951, and sentenced to 18 months imprisonment where appellant used his position to coerce an independent contractor, who performed maintenance services for PPRD, into performing a myriad of jobs at appellant's home and farm while paying him with PPRD funds. At issue was whether the proof presented at trial constituted a constructive amendment of the government's indictment and whether the evidence was insufficient to show that appellant obtained property within the meaning of the Hobbs Act. The court held that there was no fatal variance between the indictment and the proof presented at trial where the government presented a single, consistent theory of conviction. While the independent contractor's labor was the only property relevant to the element of extortion, appellant's appropriation of both forms of property, the use of PPRD's funds and appropriation of the independent contractor's labor, was part of a single scheme. The court also held that the compensation paid to the independent contractor for his labor did not preclude a finding that appellant "obtained" property within the meaning of the Hobbs Act. Therefore, the evidence was sufficient to support the jury's verdict. Accordingly, appellant's conviction was affirmed.

Defendant pled guilty to one count of securities fraud, alleged in the indictment to be a violation of 15 U.S.C. 78j(b), 78ff, and 17 C.F.R. 240.10(b)-5. At issue was whether the district court erred in holding that defendant was not entitled to the protection of section 78ff(a) because he pled guilty to a statutory offense and the no-knowledge provision was inapplicable to people convicted of violating criminal securities law. The court, reading the plain language of the statute, held that the district court erred when it determined that defendant's guilty plea to a violation of section 78j(b) prevented him from asserting the no-knowledge defense. Thus, defendant was entitled to assert the no-knowledge defense to imprisonment at sentencing. The court held, however, that the district court did not reach the question of whether defendant had met his burden of showing no knowledge under Rule 10(b)-5 and as such, the issue was remanded to the district court for consideration.

Defendant Catherine Senninger was convicted on six counts of mail fraud and one count of making a false claim against the Government. She was acquitted on several other counts, including conspiracy and additional mail fraud counts. At trial, the Government presented evidence that Defendant, through her involvement with Olympia Financial and Tax Services, participated in a scheme to defraud the Internal Revenue Service and the Colorado Department of Revenue by preparing false tax returns. Defendant was sentenced to 36 months' imprisonment, which was an upward departure from the advisory guidelines range. Defendant challenged her sentence and subsequent restitution order. Upon review, the Tenth Circuit found the district court "properly rejected" Defendant's arguments. Accordingly, the Court affirmed Defendant's sentence.

Defendant was convicted of charges under 18 U.S.C. 1956 and 31 U.S.C. 5324 where Toros Seher sold jewelry in cash-based transactions to people he knew to be drug dealers. These sales were often structured to avoid any individual payments in excess of $10,000, which would have required Seher, as a jewelry store agent and recipient of the cash, to file a report with the government (Form 8300), containing information about the buyer. At issue was whether the forfeiture of the jewelry store's inventory was an excessive fine in violation of the Eighth Amendment. The court held that the forfeiture order was not grossly disproportionate to the gravity of the crime in light of the factors in United States v. Browne, the interplay between the forfeiture order and the fine imposed by the district court, the value of the forfeited property, and the seriousness of the criminal conduct. Accordingly, the judgment was affirmed.

Ernestine Girod, Una Favorite Brown, and Melinda Langley were each indicted on one count of conspiracy and multiple counts of healthcare fraud, and Brown and Girod were charged with three counts each of making false statements to law enforcement officers, all in relation to fraudulent Medicaid reimbursement claims made through A New Beginning of New Orleans, a Medicaid Early Periodic Screening Diagnosis and Treatment organization that provided minor, disabled Medicaid recipients with Personal Care Services. A jury convicted defendants on all but three of Langley's healthcare fraud counts. Brown, Girod, and Langley separately appealed their convictions and sentences on various grounds. The court discussed Brown's motion to dismiss the indictment due to prosecutorial misconduct; the sufficiency of the evidence supporting Girod's convictions; Girod's sentencing enhancements; and testimony of Langley's other acts. Accordingly, the court held that all the convictions and sentences were affirmed.

Fabian Muyaba, Joseph Mudekunye, and three co-defendants were charged in a 39-count indictment stemming from their tax-fraud conspiracy. Muyaba, Mudekunye, and one co-defendant were convicted in a joint jury trial. Muyaba challenged the sufficiency of the evidence to support his convictions; the district court's applying two Sentencing Guidelines enhancements; and its ordering part of his sentence to run consecutively. Mudekunye challenged the district court's failure to sever his trial from Muyaba's and his sentence as being procedurally unreasonable. The court held that, in light of the significant disparity between Mudekunye's sentence and the top of the correct Guidelines range and the absence of any evidence suggesting that the court would have sentenced him to 97 months imprisonment irrespective of the correct Guidelines range, Mudekunye had shown a reasonable probability of a lesser sentence and therefore, demonstrated that the district court's clear error affected his substantial rights. The court also held that the substantial disparity between the imposed sentence and the applicable Guidelines range warranted the exercise of the court's discretion to correct the error and Mudekunye's sentence was vacated and remanded for resentencing. Accordingly, the court affirmed the district court's judgment on every ground with the exception of Mudekunye's sentence.