Justia White Collar Crime Opinion Summaries

Appellant, a mortgage broker, was convicted of six counts of mail fraud and one count of conspiracy to commit mail fraud in connection with an equity-stripping scheme that convinced financially desperate homeowners to refinance or sell their homes to him where he would clandestinely intercept their proceeds checks and deposit them into his bank account. Appellant raised five issues in challenging his convictions and sentence. The court affirmed the convictions and held that the district court properly denied appellant's motion to suppress evidence seized from a search of his residence where the detective's knowledge of information regarding victims provided sufficient indicia of probable cause to make his search for documents objectively reasonable and where the warrant satisfied the Fourth Amendment's particularity requirement. The court also held that the district court properly denied his motion for a judgment of acquittal on counts three, four, five and six. The court further held that it need not decide whether the district court abused its discretion in refusing the proffered jury instruction where the error was harmless and a rational jury would have found that appellant's fraudulent scheme contemplated the use of the mails. The court finally held that appellant's variance argument was without merit where the indictment charged that appellant's scheme was to defraud homeowners out of their equity and this was precisely what the government's evidence proved. As to sentencing, the court held that the district court did not exceed the range of choice dictated by the facts and that appellant's sentence of 270 months imprisonment was not substantively unreasonable.

Defendant Memeh Kizekai appealed the conviction and sentence he received for "uttering and publishing" when he and co-Defendant Sonnah Sampson tried to cash a $7500 counterfeit check at a Pawtucket bank. Defendant argued that he should have received a new trial because the evidence presented against him was not credible or sufficient to support his conviction. Defendant and the State agreed that the case turned on whose testimony was more credible: Sampson's or Defendant's. The trial court acknowledged its role as "the 13th juror," and held that its determination was based on "whether or not the evidence placed before the court was sufficient to substantiate and sustain the verdict that the jury achieved." The Supreme Court concluded that the trial court "did not shirk his super juror duties." The Court affirmed the lower court's decision.

Defendant appealed his conviction for attempting to obstruct an official proceeding by attempting to dispose of and hide assets involved in a forfeiture proceeding. At issue was whether the district court erred in denying defendant's motion for judgment of acquittal. The court held that, because the government offered no evidence that defendant knew that his actions were likely to affect a forfeiture proceeding, the court concluded that a jury could not find beyond a reasonable doubt that he had the requisite intent to obstruct. Therefore, the district court erred in denying defendant's motion where the evidence was insufficient to support defendant's conviction.

A jury found David Safavian, Chief of Staff of the General Services Administration ("GSA"), guilty on four counts of a five-count indictment where his convictions were related to a golf trip he took with Jack Abramoff, a lobbyist, who had asked Safavian for information about two properties the GSA owned. At issue was whether Counts Three and Five should be vacated on the grounds of prosecutorial vindictiveness; whether Counts Two and Five should be vacated on the grounds that the government failed to prove Safavian's false statements to the ethics officer and to the Federal Bureau of Investigation ("FBI") were materially within the meaning of 18 U.S.C. 1001(a)(1); and whether a new trial should be granted on Count One and Count Three where the district court improperly admitted evidence regarding the cost of the private plane. The court held that so long as Safavian's false statements were capable of influencing the course of the FBI's investigation, those statements were material within the meaning of section 1001(a)(1). The court also held that the district court did not clearly err in presuming vindictiveness on the part of the prosecution or in holding that the government overcame that presumption when it offered two reasons why the addition of Count Five was not vindictive. The court further held that its reasons for rejecting Safavian's arguments pertaining to Counts One, Two, and Three were the same as those of the district court and did not need to repeat them.

The United States has a $60 million judgment against the defendant, who fled the country, for Medicare and Medicaid fraud. The government served a writ of garnishment (28 U.S.C. 3205) against his interest in a Georgia company, which paid secured creditors, liquidated its assets, and placed slightly more than $4 million in escrow for the claim. Creditors of the Georgia company claimed $175,000. The district court ruled in favor of the government because the creditors had not obtained a writ. The Seventh Circuit vacated and remanded, reasoning that the creditors' claim was against the Georgia company, not against the defendant, and that the defendant's equity interest in the company (which was reachable by the government) may have been subordinate to the interests of creditors. The court noted many unanswered questions about the creditors' interest in the company.

The Commodity Futures Trading Commission sued operators of commodity trading pools for fraud and related violations of the Commodity Exchange Act. Following earlier proceedings in the Seventh Circuit, the district court entered judgment against remaining defendants. Defendantâs assets of $104 million, 39% of the amount owed the investors in the pools, were placed in the control of a receiver. The district court approved the receiverâs proposed allocation of the assets among the investors, which excluded a claim filed by an Andorran bank as untimely and rejected a valuation claim by GAMAG. The Seventh Circuit affirmed. The district court acted within its discretion in disallowing the bankâs claim, based on the bankâs neglect in pursuing its claim and the difficulty in recalculating the shares of the investors. GAMAGâs claim to be a creditor, rather than a shareholder, was properly rejected; its funds were commingled with and managed with the funds of the other investors and there was no difference in the level of risk.

The defendant, convicted of conspiracy to commit bank fraud, was sentenced to one day of incarceration and three years of supervised release. Supervised release was revoked when he was convicted in state court of aggravated robbery and voluntary manslaughter; he admitted to possessing and discharging a firearm during the commission of the robbery. Upon revocation of supervised release, the district court sentenced the defendant to 36 months imprisonment, a 15-month upward departure from the Guidelines range, to run consecutively to his 12-year sentence for his state convictions. The Sixth Circuit affirmed. The district court intentionally imposed a sentence that was an upward departure; it considered all of the mitigating circumstances, stated specific reasons for the upward departure, and did not misunderstand the guidelines. The sentence was properly based on violations of supervised release following the original offense.

Defendant appealed from a judgment in which the district court found him guilty of four counts of aiding in the preparation of false tax returns in violation of 26 U.S.C. 7206(2). At issue was whether the district court unlawfully based its verdict on the guilty pleas of co-defendants, which were not evidence in the case, thereby depriving defendant of his due process right to a fair trial; whether the district court improperly credited testimony by the government's key witness that defendant contended was false; and whether the evidence was insufficient to prove that defendant knew that the tax returns he prepared were fraudulent and that he willfully violated section 7206(2). The court held that the district court's erroneous references to the unadmitted guilty pleas of his co-defendants constituted harmless error where the evidence overwhelmingly supported the conclusion that defendant deliberately avoided learning of materially false representations on the tax returns at issue. The court also held that the district court did not err in its consideration of a key witness' testimony where the the testimony was the product of reliable principles and methods. The court further held that the evidence was sufficient to support defendant's conviction where a reasonable trier of fact could conclude the defendant purposefully "closed his eyes" to large accounting discrepancies, which strongly indicated that the tax forms he prepared during the years in question contained materially false financial information.

Defendants, Don Eugene Siegelman, the former Governor of Alabama and Richard Scrushy, the founder and former Chief Executive Officer of Health South Corporation ("HealthSouth"), were convicted of federal funds bribery and five counts of honest services mail fraud and conspiracy. Siegelman was also convicted of obstruction of justice. The Supreme Court of the United States remanded to the court for reconsideration in light of Skilling v. United States. Defendants raised numerous issues of error related to their convictions and sentences. The court affirmed Count 3 and 4 for Federal Funds Bribery and held that there was no reversible error in the bribery instructions given by the district court and that the evidence of a corrupt agreement between defendants was sufficient to permit a reasonable juror to find quid pro quo. The court affirmed Count 5, 6, and 7 for Honest Services Mail Fraud and Conspiracy and held that any error in the honest services instructions was harmless. The court reversed Count 8 and 9 for Self Dealing where there was lack of evidence from which the jury could infer that Siegelman knowingly agreed to or participated in a broader scheme that included Scrushy's alleged subsequent dealing and where, in light of Skilling, the evidence was insufficient to show self-dealing. The court affirmed Count 17 for Obstruction of Justice and held that the district court did not abuse its discretion in admitting evidence that a certain statement at issue met the United States v. Caraza standard. The court also held that the district court did not abuse its discretion in holding that there was no reasonable possibility of prejudice to defendants that arose out of the exposure of the jury to certain extrinsic evidence and denied the motion for new trial. The court held that exposure of the jurors to media reports about the trial was harmless in view of the limited and incidental nature of the exposure and the substantial evidence of defendants' guilt. The court also agreed with the district court that defendants were not entitled to a new trial where there was no possibility that defendants suffered prejudice from any premature deliberations, discussion of penalty, or deliberation with fewer than all the members of the jury present. The court further held that Scrushy's recusal motion was untimely and without merit; that defendants' claims regarding the Middle District of Alabama's jury selection procedures were without merit and did not entitle them to any relief; and that Siegelman's upward departure in sentencing was not an abuse of discretion.

This mandamus proceeding arose out of the public-corruption prosecution centering around former Dallas City Council Member Don Hill and various other members of Dallas city government who conspired to solicit and accept things of value in exchange for providing official assistance to Brian Potashnik in his pursuit of city approval and funding for various affordable-housing development projects. One of the things of value Mr. Hill and his coconspirators solicited was the award of construction subcontracts on Mr. Potashnik's developments to Ronald Slovacek. Petitioners, competitors of Mr. Potashnik who were seeking city approval of their own affordable-housing developments, sought restitution alleging that Mr. Slovacek and his coconspirators had rendered petitioners' $1.8 million investment worthless. At issue was whether the court should grant petitioners' writ of mandamus directing the district court to recognize that petitioners were crime victims within the meaning of the Crime Victims' Rights Act ("CVRA"), 18 U.S.C. 3771(d)(3), and the Mandatory Victims Restitution Act ("MVRA"), 18 U.S.C. 3663A. The court denied the petition and held that the district court was not clearly and indisputably wrong to find that petitioners failed to prove that they had been directly and proximately harmed by Mr. Slovacek's criminal conduct. The court also denied each of petitioners' pending motions.