Justia White Collar Crime Opinion Summaries

The First Circuit affirmed in full the verdicts of the jury convicting the five defendants in this case on charges brought under the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1962(d) but vacated the restitution and forfeiture orders, holding that the jury's special findings and verdicts as to all defendants were affirmed.Defendants in this case were a group of pharmaceutical executives involved with Insys Therapeutics, Inc., which marketed and sold Subsys, a fentanyl-laced medication approved by the United States Food and Drug Administration for use in the treatment of breakthrough cancer pain. A jury found Defendants guilty of racketeering charges, and the court sentenced Defendants to prison terms of varying lengths. The First Circuit upheld the jury verdicts in full and affirmed the district court's denial of Defendants' various motions for judgments of acquittal and/or new trials but vacated the restitution and forfeiture orders, holding that the district court erred as to these orders. View "United States v. Simon" on Justia Law

Dr. Narang and Moparty were convicted of Conspiracy to Commit Health Care Fraud, 18 U.S.C. 1349; Health Care Fraud, section 1347, and Engaging in Monetary Transactions in Property Derived from Specified Unlawful Activity, section 1957. Narang is an internist who practiced at his Texas self-owned clinic, North Cypress. Moparty co-owned Red Oak Hospital and served as an administrator for Trinity Health Network, which provided staffing and administrative services to health care entities. Narang ordered unnecessary medical tests for patients and then authorized Moparty to bill for these tests at the higher hospital rate even though these patients were seen and treated at Narang’s North Cypress office. The indictment alleged that this scheme resulted in fraudulent billing of over $20 million to Blue Cross Blue Shield, Aetna, and Cigna. Those companies paid Moparty at least $3.2 million in reimbursement for those claims which he allegedly split with Narang through a series of financial transactions.The court sentenced Moparty to 108 months and Narang to 121 months of imprisonment, with joint and several liability for $2,621,999.04 in restitution. The Fifth Circuit affirmed, rejecting challenges to the sufficiency of the evidence and finding that, although the government made repeated errors, those errors did not warrant reversal. View "United States v. Moparty" on Justia Law

Alan Williams pleaded guilty to a single count of bank fraud and stipulated to restitution tied to that count and two others that were later dismissed. The government got its conviction, and Williams limited his sentencing exposure and possible future charges. In this appeal, Williams attempted to step back from his bargain, seeking to keep the favorable plea deal, but to contest the restitution he stipulated was owed. Furthermore, he contested the district court’s apportionment of that total restitution between WebBank and Wells Fargo Bank, as recommended by the Presentence Report (PSR). The Tenth Circuit surmised Williams' first hurdle was to overcome the appeal waiver included in his Plea Agreement. To this, the Court concluded the appeal waiver did not bar his total-restitution challenge: the Plea Agreement allowed Williams to appeal the apportionment of the total restitution and the substantive reasonableness of his prison sentence as well. However, addressing the merits of Williams’s challenges, the Court no reason to disturb the order and sentence, and affirmed. View "United States v. Williams" on Justia Law

Defendant Bennie Anderson was employed by Jersey City in the Tax Assessor’s office. His position gave him the opportunity to alter property tax descriptions without the property owner filing a formal application with the Zoning Board. In December 2012, defendant accepted a $300 bribe in exchange for altering the tax description of a property from a two-unit dwelling to a three-unit dwelling. Defendant retired from his position in March 2017 and was granted an early service retirement pension. In November 2017, defendant pled guilty in federal court to violating 18 U.S.C. 1951(a), interference with commerce by extortion under color of official right. Defendant was sentenced to two years of probation and ordered to pay a fine. Based on defendant’s conviction, the Employees’ Retirement System of Jersey City reduced his pension. The State filed an action in state court to compel the total forfeiture of defendant’s pension pursuant to N.J.S.A. 43:1-3.1. The trial court entered summary judgment for the State, finding that the forfeiture of defendant’s pension did not implicate the constitutional prohibitions against excessive fines because the forfeiture of pension benefits did not constitute a fine. The Appellate Division affirmed the grant of summary judgment to the State, but on different grounds, concluding the forfeiture of defendant’s pension was a fine, but that requiring defendant to forfeit his pension was not excessive. The New Jersey Supreme Court concluded forfeiture of defendant’s pension under N.J.S.A. 43:1-3.1 did not constitute a fine for purposes of an excessive-fine analysis under the Federal or New Jersey State Constitutions. Because the forfeiture was not a fine, the Court did not reach the constitutional analysis for excessiveness. View "New Jersey v. Anderson" on Justia Law

Frank embezzled $19 million from his former employer, NCI, and pleaded guilty to wire fraud, 18 U.S.C. 1343. The district court sentenced Frank to 78-months’ imprisonment and ordered Frank to pay restitution of $19,440,331. The government has recovered over $7 million and attempted to garnish Frank’s 401(k) retirement account under the Mandatory Victims Restitution Act (MVRA), filing an Application for Writ of Continuing Garnishment, 18 U.S.C. 3664(m)(1)(A)(i), naming Schwab as the garnishee. Schwab currently holds approximately $479,504 in Frank's 401(k) account, which is covered by the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001. Frank argued that ERISA’s anti-alienation provision protects retirement plans against claims by third parties. The Fourth Circuit affirmed that the MVRA permits the seizure of Frank’s 401(k) retirement account, notwithstanding ERISA’s protections. When the government enforces a restitution order under the MVRA, it stands in the shoes of the defendant, acquiring whatever rights to 401(k) retirement funds he possesses; the government’s access to the funds in Frank’s 401(k) account may be limited by terms set out in Frank’s plan documents or by early withdrawal penalties to which Frank would be subject. The court remanded so that the district court may decide what present property right Frank has in his account. The court rejected an argument that the Consumer Credit Protection Act, 15 U.S.C. 1673(a), limits the government to taking 25 percent of the funds. View "United States v. Frank" on Justia Law

Based on activity related to former Kentucky Secretary of State Alison Lundergan Grimes’ campaign for the U.S. Senate seat held by Mitch McConnell in 2014, Emmons and Lundergan (Grimes’s father) were convicted for knowingly and willfully making unlawful corporate contributions aggregating $25,000 or more, Federal Election Campaign Act, 52 U.S.C. 30109(d)(1)(A)(i), 30118, and 18 U.S.C. 2; conspiracy to defraud the United States, 18 U.S.C. 371; willfully causing the submission of materially false statements, 18 U.S.C 1001(a)(2) and 2; and the falsification of records or documents, 18 U.S.C. 1519 and 2.The Sixth Circuit affirmed, rejecting a challenge to the constitutionality of the ban on corporate contributions as applied to intrafamilial contributions from a closely-held, family-run corporation. Such contributions present a risk of quid pro quo corruption. The district court adequately distinguished between independent expenditures and contributions in the jury instructions. The district court properly admitted evidence of Lundergan’s uncharged acts in connection with Grimes’ campaigns for Kentucky Secretary of State as res gestae evidence and under 404(b). The government presented sufficient evidence for a rational juror to find that Emmons had the requisite intent to cause unlawful corporate contributions and the Grimes campaign to submit false campaign-finance reports. View "United States v. Emmons" on Justia Law

The Second Circuit affirmed defendant's conviction of bank fraud, making false statements in support of a passport application, and aggravated identity theft. Defendant argues that the district court erred by failing to grant her motion for an acquittal based on her failure to complete the passport application paperwork and swear an oath affirming to its veracity.The court agreed with the district court's determination that submitting a fraudulent passport application, even when unsigned and without swearing the required oath, satisfies the elements of 18 U.S.C. 1542. The court explained that defendant's argument that an oath and signature on the passport application form are required to establish criminal liability is not supported by the statute and regulations defining a passport application. Furthermore, the statute and regulations define a passport application as the submitted application form and supporting documents. Because submission occurs when a person provides a federal official with an application form and any supporting materials for review, and defendant acknowledged submission of a falsified application form to a passport officer, the district court did not err by failing to grant defendant's motion for acquittal. View "United States v. Gu" on Justia Law

Defendant is a French banker who is charged with transmitting false, misleading, and knowingly inaccurate commodities reports, and with conspiracy to do the same, in violation of the Commodity Exchange Act (CEA). On appeal, defendant challenged the district court's application of the fugitive disentitlement doctrine and denial of her motions to dismiss the indictment.The Second Circuit concluded that it has jurisdiction to review the disentitlement ruling, but none to review the merits of extraterritoriality or due process. The court concluded that defendant is not a fugitive and, even if she were a fugitive, the district court abused its discretion in disentitling her. In this case, given her innocent residence as a foreign citizen abroad, given the nature of the charged offense and her remoteness from the alleged harm that it caused, given her line of work, and given her nonfrivolous challenge to the extraterritoriality of the criminal statute, the exercise of discretion to disentitle her was an abuse. Accordingly, the court reversed the order disentitling defendant and remanded for further proceedings to consider or reconsider the merits of her motions to dismiss. The court dismissed this appeal insofar as it seeks review of the (alternative) rulings on extraterritoriality and due process. View "United States v. Bescond" on Justia Law

The Ninth Circuit affirmed the district court's denial of a motion brought by plaintiffs, four affiliated Chinese companies, seeking to dismiss an indictment charging violations of the criminal provisions of the Economic Espionage Act. The Pangang Companies moved to dismiss the indictment, arguing that they are "instrumentalities" of the government of the People's Republic of China (PRC) and are therefore entitled to sovereign immunity under the Foreign Sovereign Immunities Act (FSIA).After determining that it had appellate jurisdiction, the panel concluded that, in moving to dismiss the indictment, the Pangang Companies failed to carry their burden to make a prima facie showing that they are instrumentalities of a foreign sovereign within the meaning of the FSIA. In this case, the allegations of the indictment, standing alone, are insufficient to establish that the Pangang Companies were instrumentalities of the PRC on the date they were indicted. The panel explained that, because the Pangang Companies relied solely upon the indictment’s allegations, and presented no evidence to support their motion to dismiss, they necessarily failed to establish a prima facie case that they were foreign states entitled to immunity under section 1604 of the FSIA. Therefore, the motion to dismiss was properly denied. View "United States v. Pangang Group Co." on Justia Law

Jereno Kinslow's felony conviction for computer trespass was premised on evidence that Kinslow altered his employer’s computer network settings so that e-mail messages meant for Kinslow’s boss would also be copied and forwarded to Kinslow’s personal e-mail account. The Court of Appeals affirmed Kinslow’s conviction, and the Georgia Supreme Court granted Kinslow’s petition for certiorari, posing the question of whether Kinslow’s conduct constituted a violation of OCGA 16-9-93 (b)(2). The Court found that although the statute in general was extremely broad, the portion of (b)(2) on which the State exclusively relied did not reach Kinslow’s conduct. Accordingly, the Supreme Court concluded the evidence presented at Kinslow’s trial was insufficient to support his conviction under Jackson v. Virginia, 443 U.S. 307 (1979), and thus reversed. View "Kinslow v. Georgia" on Justia Law