Justia White Collar Crime Opinion Summaries

Defendant-appellant Matthew Mazur appealed his third sentencing for multiple criminal offenses arising out of a fraudulent investment scheme. The sole issue raised on appeal of his reduced 23-year prison sentence was that the trial court erred by refusing to dismiss a five-year white-collar enhancement for loss greater than $500,000. Mazur argued the trial court was required to dismiss this enhancement because its imposition “result[ed] in a sentence of greater than 20 years.” Finding no reversible error, the Court of Appeal affirmed. View "California v. Mazur" on Justia Law

During a traffic stop, Tellez agreed to a car search. After the search, the officer asked, “Do you have your wallet?” Tellez handed it over. Inside, the officer discovered three Visa gift cards, each with numbers written on the back, which the officer believed was indicative of fraud. The officer asked whether he could swipe the cards. Tellez agreed but then said, “I don’t give permission.” The officer nevertheless swiped the cards. The numbers did not match the cards, indicating they had been altered. Tellez was indicted for conspiracy to defraud the U.S., bank fraud, and aggravated identity theft. He moved to suppress all evidence derived from the wallet search but did not challenge the officer’s decision to swipe the cards.After reviewing a video recording of the traffic stop and the officer’s testimony, the court denied Tellez’s motion, concluding that Tellez’s gesture of handing over his wallet reflected his nonverbal, voluntary consent. Tellez entered a conditional guilty plea. Tellez objected to the intended loss calculations used to derive his Guidelines offense level. The three cards had been used to spend or withdraw an average of $1,400 per card. The probation office calculated the intended loss by multiplying the number of accounts associated with Tellez—303, including 300 other accounts found on a thumb drive in Tellez’s possession—by $1,400. The court agreed with the government. The Sixth Circuit affirmed the denial of the motion to suppress and Tellez’s 70-month sentence. View "United States v. Crespo" on Justia Law

In 2008-2010, Shah engaged in fraudulent transactions involving three luxury condominiums owned by Hwang, ultimately using the property to obtain over $2 million in loans. Shah was convicted of multiple crimes. Enhancement allegations, including taking a property valued over $3.2 million and special findings, including a pattern of white-collar crime. were found true. A 2015 restitution order remains unpaid. Hwang filed a civil action against Shah and, in 2018, secured a civil judgment—over $3.8 million.In 2021, the trial court levied property under Penal Code 186.11, the “Freeze and Seize” law, which is intended to prevent a defendant from disposing of assets pending trial, and then use the assets to pay restitution after conviction. Shah argued that a trial court must seize any properties under section 186.11 no later than the sentencing hearing.The court of appeal affirmed. Shah sought to import time limitations into the statute and ignored the legislative purpose of section 186.11 and California’s over-arching statutory framework for restitution in criminal cases. California recognizes restitution for crime victims as a constitutional right. The court’s authority does not change even after the Courts of Appeal decide a criminal case. The lack of a disposition formally remanding Shah’s original appeal for further proceedings was no bar to the trial court’s levying order. View "People v. Shah" on Justia Law

Pacilio and Bases were senior traders on the precious metals trading desk at Bank of America. While working together in 2010-2011, and at times separately before and after that period, they engaged in “spoofing” to manipulate the prices of precious metals using an electronic trading platform, that allows traders to place buy or sell orders on certain numbers of futures contracts at a set price. It is assumed that every order is bona fide and placed with “intent to transact.” Spoofing consists of placing a (typically) large order, on one side of the market with intent to trade, and placing a spoof order, fully visible but not intended to be traded, on the other side. The spoof order pushes the market price to benefit the other order, allowing the trader to get the desired price. The spoof order is canceled before it can be filled.Pacilio and Bases challenged the constitutionality of their convictions for wire fraud affecting a financial institution and related charges, the sufficiency of the evidence, and evidentiary rulings relating to testimony about the Exchange’s and bank prohibitions on spoofing to support the government’s implied misrepresentation theory. The Seventh Circuit affirmed. The defendants had sufficient notice that their spoofing scheme was prohibited by law. View "United States v. Bases" on Justia Law

In 2018, Kousisis and Alpha Painting were convicted of conspiracy to commit wire fraud, 18 U.S.C. 1349, and three counts of wire fraud, 18 U.S.C. 1343. The charges arose from false documents filed concerning “disadvantaged business enterprise” status in transportation construction projects for which the U.S. Department of Transportation provided funds through the Federal Highway Administration to the Pennsylvania Department of Transportation. The district court imposed a 20-point sentencing enhancement under U.S.S.G. 2B1.1(b)(1), which corresponds to a loss of $9.50 million-$25 million, noting that the actual loss to the government was not measurable at the time of sentencing and concluding that Alpha’s “ill-gotten profits” represented an appropriate measure of loss.The Third Circuit affirmed the convictions. The defendants secured PennDOT’s money using false pretenses and the value PennDOT received from the partial performance of those painting and repair services is no defense to criminal prosecution for fraud. The court vacated the calculation of the amount of loss for sentencing purposes, noting the extreme complexity of the case. The victim’s loss must have been an objective of the fraudulent scheme; it is insufficient if that loss is merely an incidental byproduct of the scheme. The court separately vacated a forfeiture order of the entire profit amount on the contracts. View "United States v. Alpha Painting & Construction Co., Inc." on Justia Law

Agbi, born and raised in Nigeria but a resident of the U.S. since 2016, acted as a middleman in a scheme to use fake online dating accounts to solicit hundreds of thousands of dollars from unwitting elderly people. Agbi collected cash at his Indianapolis apartment, took his “cut,” and transferred the rest to accounts in Nigeria. More than 30 months after his arrest, Agbi’s counsel notified the government that Agbi intended to pursue a duress defense, claiming, for the first time, that members of the conspiracy located in Nigeria had threatened Agbi’s family. The district court granted a motion to preclude the defense. At trial, two of the scheme’s victims testified that they were deceived into believing that they were in relationships and sent “hundreds of thousands of dollars.” Secret Service agents described the details of a controlled delivery and Agbi’s subsequent interview.Agbi was convicted of mail fraud, 18 U.S.C. 1341; use of a fictitious name in furtherance of mail fraud, section 1342; conspiracy to commit mail fraud, 1341, 1349; and conspiracy to commit money laundering, 1956(a)(1), 1956(h) and was sentenced to 57 months’ imprisonment. The Seventh Circuit affirmed. The evidence supporting each count was legally sufficient to support a conviction. The district court appropriately employed the obstruction of justice enhancement based on its finding that Agbi knowingly submitted a “fake” police report concerning threats against his family. View "United States v. Agbi" on Justia Law

A jury convicted United Development Funding (“UDF”) executives (collectively “Appellants”) of conspiracy to commit wire fraud affecting a financial institution, conspiracy to commit securities fraud, and eight counts of aiding and abetting securities fraud. Jurors heard evidence that Appellants were involved in what the Government deemed “a classic Ponzi-like scheme,” in which Appellants transferred money out of one fund to pay distributions to another fund’s investors without disclosing this information to their investors or the Securities Exchange Commission (“SEC”). Appellants each filed separate appeals, challenging their convictions on several grounds. Considered together, they argue that (1) the jury verdict should be vacated because the evidence at trial was insufficient to support their convictions or, alternatively, (2) they are entitled to a new trial because the jury instructions were improper. Appellants also argue that the district court erred in (3) limiting cross-examination regarding a non-testifying government informant; (4) allowing the Government to constructively amend the indictment and include certain improper statements in its closing argument; (5) imposing a time limit during.   The Fifth Circuit affirmed the jury verdict in its entirety. The court explained that considering the evidence and drawing all reasonable inferences in the light most favorable to the verdict, a reasonable juror could have determined that Appellants made material misrepresentations in UDF III and UDF V’s filings that were sufficient to uphold their convictions. The court explained that multiple witnesses testified that the industry had shifted away from affiliate transactions because they were disfavored and that a no-affiliate-transaction policy in UDF V would enable it to participate in a larger network of brokers, dealers, and investors. View "USA v. Greenlaw" on Justia Law

Defendant filed liens against property owned by a slew of people he thought had wronged him—including, as relevant here, a former Commissioner of the IRS and a former Secretary of the Treasury. Defendant was thereafter charged with and convicted of violating 18 U.S.C. Section 1521, which criminalizes the filing of retaliatory liens against the property of “an individual described in” Section 1114, which, in turn, refers to “any officer or employee of the United States. At issue on appeal is whether a former civil servant counts as an “officer or employee of the United States” within the meaning of Section 1114 and, thus, of Section 1521.   The Eleventh Circuit vacated Defendant’s convictions on four counts and remanded for resentencing. The court explained that Davis v. Michigan Department of Treasury and Robinson v. Shell Oil Co. establish that words like “officer” and “employee” can sometimes include formers—but only when the statutory context makes clear that they should. Neither suffices to show that the ordinary meaning of those terms includes ex-officers or erstwhile employees. Here, given the absence of textual indicia supporting a broader reading of the terms, the court declined to adopt the government’s strained interpretation. The court wrote that because Defendant filed the liens at issue when the relevant parties were no longer government “officer[s] or employee[s]” within the meaning of Section 1114, his conduct wasn’t covered by 18 U.S.C. Section 1521. View "USA v. Timothy Jermaine Pate" on Justia Law

Seven codefendants appeal their various convictions stemming from a multi-million-dollar healthcare conspiracy involving surgery-referral kickbacks at Forest Park Medical Center in Dallas, Texas. They challenge convictions under the Anti-Kickback Statute (“AKS”), the Travel Act, and for money laundering. The defendants in this case are, with three exceptions, the surgeons whom Forest Park paid to direct surgeries to the hospital—Won, Rimlawi, Shah, and Henry. One exception is Forrest— she is a nurse. Another is Jacob—he ran Adelaide Business Solutions (Adelaide), a pass-through entity. The other is Burt—he was part of the hospital’s staff. Defendants raise many of the same issues on appeal, often adopting each other’s arguments.   The Fifth Circuit affirmed. The court wrote that the state law at issue here is the Texas Commercial Bribery Statute (TCBS). Here, it does not matter if the physician was acquitted because there could still be sufficient evidence in the record that defendants “offer[ed]” a benefit in violation of the TCBS regardless of whether any physician accepted it.  Further, the court explained that even assuming no rational jury could have found a single conspiracy, the surgeons fail to show that this error “prejudiced their substantial rights.” Henry and Forrest do not raise this point at all. Won and Shah address it only briefly and fail to provide any record citations to support the proposition that “clear, specific, and compelling prejudice” resulted in an unfair trial. View "USA v. Shah" on Justia Law

Bauer worked as a physician for over 50 years, most recently in pain management at ANA. Bauer’s practice, which included regular prescribing controlled substances, became the subject of a DEA investigation. Bauer was indicted for knowingly or intentionally” distributing or dispensing controlled substances “except as authorized,” 21 U.S.C. 841(a), concerning 14 patients. The prosecution’s expert, Dr. King, opined that Bauer did not sufficiently establish a diagnosis and ignored “red flags.” Each patient had a history of at least two mental health conditions; several had histories of illegal drug use. Bauer drastically exceeded recommended thresholds and prescribed opioids together with other controlled substances. One patient died from an accidental overdose. None showed improvement. A drug task force officer alerted Bauer that a patient was selling his pills. Bauer did not terminate the patient but provided additional prescriptions. Several pharmacies would not fill his prescriptions. Dr. King opined that Bauer prescribed opioids “in most cases” to support “addiction and dependency,” “without a legitimate medical purpose.”The Sixth Circuit affirmed Bauer’s convictions and 60-month sentence (below the Guidelines range). A jury could reasonably find that Bauer knew his prescriptions were without authorization, satisfying the mens rea requirement clarified by the Supreme Court in 2022. The district court did not plainly err in its jury instruction on the good-faith defense. The court rejected Bauer’s challenges to the exclusion of his proffered expert witnesses and his argument that he had a constitutional right to testify as an expert in his own defense. View "United States v. Bauer" on Justia Law