Justia White Collar Crime Opinion Summaries

Based on a scheme for laundering drug money, defendants were convicted of conspiring to engage in monetary transactions in criminally derived property (18 U.S.C. 1956); one was additionally convicted of engaging in a monetary transaction in criminally derived property(18 U.S.C. 1957). The Seventh Circuit affirmed on the conspiracy count, which was supported by a "plethora" of evidence, but reversed on the second. The transaction triggering the Sect. 1957 violation occurred when a defendant handed over $8,000 of drug cash to purchase property, not when that property was sold for about $47,000; the transaction involved less than the $10,000 minimum the statute requires. The judge properly instructed the jury concerning the duration of a conspiracy and the meaning of "knowingly" and properly refused to allow the defense to address the statute of limitations to the jury.

Martin J. Bradley III and his father, Martin J. Bradley, Jr. (collectively, the Bradleys), owned Bio-Med Plus, Inc. (Bio-Med), a Miami-based pharmaceutical wholesaler that purchased and sold blood-derivatives. This case stemmed from multiple schemes to defraud the Florida and California Medicaid programs by causing them to pay for blood-derivative medications more than once. The Government chose to prosecute the schemes and a grand jury indicted eight individuals, including Albert L. Tellechea, and two companies, Bio-Med, and Interland Associates, Inc. The Bradleys, Bio-Med, and Tellechea subsequently appealed their convictions and raised several issues on appeal. The court affirmed the Bradleys', Bio-Med's, and Tellechea's convictions, and Bradley III's and Bio-Med's sentences. The court vacated Bradley, Jr.'s sentences on Counts I and 54 and Tellechea's sentence on Count 3, and remanded those counts for resentencing. The court reversed the district court's October 4, 2006 order appointing the receiver and monitor, and its supplemental receivership order of May 17, 2007. The court finally held that, as soon as circumstances allowed, the receivership should be brought to an immediate close.

This is the second appeal arising from the failed prosecution of defendants for securities and investment fraud. At issue was whether the district court abused its discretion in denying defendants' motion to reopen under Fed. R. Civ. P. 60(b)(3) based on an internal government memorandum (memo) written shortly after the district court dismissed the indictment. The court held that the district court acted within its discretion in finding that the memo did not show fraud on the court or provided a basis to reopen the case to allow discovery into that issue where the memo was not a revelation of new information about the discovery misconduct during trial and where the memo was consistent with the court's prior conclusion that the government's misconduct during trial was a mixture of intentional and negligent pretrial and trial acts and omissions. Accordingly, the judgment of the district court was affirmed.

Defendant pleaded guilty to conspiracy to commit money laundering related to a massive Ponzi scheme and was sentenced to 130 months imprisonment. At issue was whether the district court failed to adequately explain the sentence, failed to properly consider the sentencing factors set forth in 18 U.S.C. 3553(a), assigned too much significance to irrelevant factors, and imposed a sentence greater than necessary to achieve federal sentencing goals. The court held that the district court engaged in a sufficiently detailed explanation of its reasons for imposing the sentence and did not commit procedural error. The court also held that the district court properly considered and weighed the evidence and therefore, defendant's sentence was not substantively unreasonable. Accordingly, the court affirmed the sentence.

A real estate broker received money for contracting work never completed, used false addresses in invoices from companies that did not exist, submitted loan applications with inflated incomes and account balances, and forged documentation. At trial on charges of wire fraud, aiding and abetting and conspiracy to commit wire fraud (18 U.S.C. 2, 371, and 1343), witnesses used the words "fraud" and "misrepresentation." The district court directed acquittal on aiding and abetting and conspiracy charges and sentenced defendant to 71 months’ imprisonment and payment of $2,360,914.51 in restitution. The Seventh Circuit upheld the conviction. The testimony of the lay witnesses could have been helpful and did not amount to legal conclusions about intent or "de facto" instructions to the jury. Defendant would not have been acquitted had the court struck the sporadic, repeated use of two words with potential legal baggage in otherwise appropriate testimony. The court vacated the sentence. The district court erred in considering transactions underlying dismissed counts as relevant conduct without making sufficient findings regarding the number of victims and in ordering defendant to pay restitution to victims not clearly harmed by conduct in her counts of conviction.

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.