Justia White Collar Crime Opinion Summaries

Defendant Keith Fitzgerald appealed a superior court order denying his motion for a new trial based on ineffective assistance of counsel. In December 2015, defendant was indicted on five counts of theft by unauthorized taking. Defense counsel, whose assistance is alleged to have been ineffective, was retained by defendant in March 2016, after defendant’s prior counsel withdrew. Defense counsel, defendant, and the prosecutor engaged in several plea discussions leading up to trial. Plea negotiations ultimately failed and the case went to trial. The jury heard testimony from the defendant that his father authorized the transactions. On cross-examination however, the State elicited a number of admissions from defendant, which defense counsel did not anticipate, that severely damaged defendant’s credibility and undercut his defense. The jury returned verdicts of guilty on all five counts of theft by unauthorized taking. Ultimately, the court sentenced defendant to a term of not less than nine and one-half years and not more than 25 years in the New Hampshire State Prison. After an evidentiary hearing on defendant's new trial motion, the court ruled that defendant failed to sustain his burden of showing that the outcome of his case would have been different but for his counsel’s performance. On appeal, defendant argued the trial court erred by concluding that, even if defense counsel rendered ineffective assistance, defendant was not prejudiced by: (1) defense counsel’s failure to adequately advise defendant regarding the merits of the State’s plea offer; or (2) counsel’s failure either to object to the trial court’s jury instructions on a sentence enhancement provision on the basis that it had not been presented to the grand jury for indictment, or to move for dismissal of the indictment on that same basis. The New Hampshire Supreme Court determined defense counsel did not adequately advise defendant about a sentence enhancement and the merits of the State's plea offer relative to defendant's likelihood of success at trial, and but for counsel's deficient performance, there was a reasonable probability that defendant would have accepted the State's plea offer. The Court therefore affirmed in part, reversed in part and remanded for further proceedings. View "New Hampshire v. Fitzgerald" on Justia Law

In a split decision, the Supreme Court reversed Defendant's negligent homicide convictions but upheld his convictions on nine counts of criminal endangerment and eleven counts of criminal distribution of dangerous drugs, holding that there was insufficient evidence to establish that Defendant's actions in prescribing narcotics was the cause in fact of the deaths of two of his patients.After a jury trial, Defendant, a licensed medical doctor, was convicted of several crimes related to the repeated prescribing of copious amounts of opiates and other narcotics to eleven individuals. Two of Defendant's patients died from drug overdoses. The Supreme Court reversed in part and affirmed in part the convictions, holding (1) the State did not present sufficient evidence to establish that Defendant's actions were the direct cause of the two drug overdose deaths; and (2) Defendant was operating outside the bounds of a professional medical practice, and therefore, the exemption for medical practitioners acting within the course of a professional practice did not apply to the facts of this case. View "State v. Christensen" on Justia Law

Steven Thompson was a real estate developer and sole member and manager of SGD Timber Canyon, LLC (“Timber Canyon”), a real estate company that held an interest in a number of undeveloped lots in Castle Rock, Colorado. To buy those properties, Timber Canyon initially obtained a $11.9 million loan from Flagstar Bank. The properties went into foreclosure in October 2009. In February 2010, Timber Canyon filed for bankruptcy; Flagstar Bank sought relief from the automatic stay to allow it to proceed with the foreclosure. In the spring of 2010, Thompson met John Witt (“John”), who had worked in the construction industry in Denver but wanted to become a real estate developer. John eventually began working with Thompson and signed a letter of intent indicating that John would eventually obtain an ownership interest in Thompson’s company. Shortly thereafter, and without disclosing the fact that the Timber Ridge properties were in foreclosure and subject to a forbearance agreement, Thompson obtained an “investment” from John’s parents, Thomas and Debra Witt (“the Witts”). Ultimately, the Witts agreed to increase their initial $400,000 investment to $2.4 million. At no point did Thompson disclose to the Witts that Timber Canyon's properties were already highly leveraged; the company was in bankruptcy, the properties were in foreclosure, and the properties had been valued at only $6.75 million (an amount significantly less than the $31 million value that Thompson had represented to the Witts during negotiations). When the Witts’ note ultimately came due in the winter of 2011, Thompson defaulted. The Witts filed a civil lawsuit against him and contacted law enforcement. Thereafter, the State charged Thompson with two counts of securities fraud and one count of theft. A jury convicted Thompson on all counts, and the court sentenced him to the Department of Corrections for twelve years on each of the securities fraud counts, to be served concurrently, and eighteen years on the theft count, to be served consecutively to the securities fraud counts. As pertinent here, Thompson argued on appeal: (1) because the note at issue was not a security, insufficient evidence supported his securities fraud convictions; (2) the trial court erred by tendering an incorrect jury instruction regarding the meaning of “security”; and (3) his theft conviction had to run concurrently with his securities fraud convictions. The issue this case presented for the Colorado Supreme Court's review was whether: (1) the promissory note at issue was a security under the "family resemblance" test; (2) any error in the jury instruction defining “security” was not plain; and (3) consecutive sentences were permissible because different evidence supported defendant Steven Thompson’s securities fraud and theft convictions. Finding the note at issue was indeed a security under Colorado law, and no other reversible error, the Supreme Court affirmed Thompson's convictions. View "Thompson v. Colorado" on Justia Law

The Fifth Circuit affirmed defendant's conviction and sentence for conspiracy to commit wire fraud and six counts of aiding and abetting wire fraud. The court held that the evidence was sufficient to provide a rational jury with more than sufficient grounds to conclude that defendant did not sincerely believe he had a legitimate, unwritten agreement with the City.The court also held that the district court did not err in declining defendant's requested jury instructions where the jury instructions substantially covered defendant's good-faith defense because they accurately described the intent requirements for the charges against him; defendant was allowed to argue at trial that he acted in good faith according to an unwritten agreement that abandoned hourly billing, and thus his ability to present his defense was not seriously impaired; and the district court did not abuse its discretion in refusing to give defendant's fill-in-the-blank instruction. Finally, the court rejected defendant's challenges to the district court's loss calculation, holding that the district court did not err in its application of USSG 2B1.1(b)(1) and that defendant must pay restitution under the Mandatory Victims Restitution Act. View "United States v. Comstock" on Justia Law

The Ninth Circuit affirmed defendant's sentence for mail fraud stemming from his involvement in a lucrative unemployment-fraud scheme. The panel held that the evidence supported the district court's finding that the losses exceeded $3.5 million and losses exceeding $3.5 million merit an 18-level enhancement under USSG 2B1.1(b)(1)(J). In this case, although the district court cited the correct sentencing provision, it incorrectly stated that it was imposing a 16-level enhancement. However, despite this misstatement, the panel held that it was not error for the district court to apply the 18-level enhancement. The panel also held that the evidence supports the district court's imposition of a leadership-role enhancement under USSG 3B1.1(b) where defendant was a leader within the unemployment-fraud scheme, and he was properly treated as such at sentencing.Finally, the panel held that state government agencies who suffer losses that are included in the actual loss calculation under USSG 2B1.1(b)(1) are properly counted as victims for purposes of the number-of-victims enhancement in USSG 2B1.1(b)(2)(A)(I). Therefore, the panel held that the district court did not err in applying an enhancement for 10 or more victims because there can be no doubt that EDD suffered losses and because EDD is properly considered a victim under section 2B1.1(b)(2)(A)(i). View "United States v. Herrera" on Justia Law

The Second Circuit affirmed the district court's grant on remand of the Government's petition to enforce two Internal Revenue Service summonses, one sent to defendant in his personal capacity and one sent to him in his capacity as a trustee, based on the foregone conclusion and collective entity exceptions to the Fifth Amendment's self-incrimination clause. Defendant's appeal stemmed from the IRS's efforts to investigate his use of offshore bank accounts to improperly conceal federally taxable income.The court agreed with the district court that the Government has shown with reasonable particularity the documents' existence, defendant's control of the documents, and an independent means of authenticating the documents such that the foregone conclusion doctrine applies. The court also agreed with the district court that, as a matter of first impression in this Circuit, a traditional trust is a collective entity subject to the collective entity doctrine. View "United States v. Fridman" on Justia Law

A jury convicted Sandra, Calvin, and their son Bryan Bailey of conspiring to commit healthcare fraud and other related crimes (18 U.S.C. 371, 1343, 1347; 42 U.S.C. 1320a-7b). The three, working for medical equipment companies, used fraud, forgery, and bribery to sell power wheelchairs and other equipment that was not medically necessary. The district court sentenced Sandra to 120 months’, Calvin to 45 months, and Bryan to 84 months’ imprisonment.The Sixth Circuit affirmed the convictions and the sentence imposed on Bryan. The court rejected challenges to the sufficiency of the evidence and to various evidentiary rulings and upheld the admission of certain out of court statements made in furtherance of the conspiracy. The district court miscalculated Sandra’s Guidelines-range sentence when it erroneously imposed a two-level increase in her offense level for using “mass marketing” in her scheme and incorrectly calculated the loss amount for which Calvin was responsible—and by extension, his Guidelines-range sentence—by holding him responsible for losses beyond those he agreed to jointly undertake. View "United States v. Bailey" on Justia Law

Defendants, a married couple, opened numerous rewards accounts at OfficeMax using fictitious names and addresses. They fraudulently claimed other customers’ purchases as their own to generate undeserved rewards through OfficeMax’s customer loyalty program. As part of the scheme, Defendants also violated the terms of the reward program by using various accounts to sell more than 27,000 used ink cartridges to OfficeMax in exchange for OfficeMax rewards. In 21 months' time, they redeemed $105,191 in OfficeMax rewards. A jury convicted Defendants of wire fraud and conspiracy to commit wire fraud relating to their scheme to defraud OfficeMax. At sentencing, the district court ordered Defendants to pay $96,278 in restitution to OfficeMax and entered a separate forfeiture money judgment jointly and severally against Defendants in the amount of $105,191. In Defendants' first appeal, they argued the district court erred when it entered a forfeiture money judgment without proving the $105,191 constituted, or was derived from, proceeds traceable to the wire fraud. The government contended it proved Defendants fraudulently acquired OfficeMax rewards with a face value of $105,191, and that Defendants exchanged that credit for $105,191 in actual merchandise. At first glance, the Tenth Circuit surmised a district court’s order of forfeiture and its order of restitution appeared to be a double punishment, particularly when the district court ordered defendants to pay forfeiture and restitution in the same amount. Restitution exists to make victims whole; forfeiture punishes those who commit crimes. In some cases, a defendant either does not resell fraudulently obtained merchandise or does so at a discount and thus has no profit above the value of the merchandise. To address that scenario, the Tenth Circuit held here that a district court could base a judgment’s forfeiture amount on the value of the fraudulently obtained merchandise at the time a defendant acquired it. Furthermore, a district court may not reduce or eliminate criminal forfeiture because of restitution. Finally, the Court reaffirmed its holding that in personam money judgments representing the amount of unlawful proceeds are appropriate under the criminal forfeiture statutes. View "United States v. Channon (Brandi)" on Justia Law

In 1998-2010, Dimora served as one of three Cuyahoga County Commissioners. An FBI investigation revealed that Dimora had received over $250,000 in gifts from individuals with business before the County, including home renovations, trips to Las Vegas, and encounters with prostitutes. Dimora had used his position to help with the awarding of County contracts, hiring, the results of at least one County election, and civil litigation outcomes. Dimora’s “influence” ranged from casting formal votes as Commissioner to pressuring other officials.Dimora was charged with Hobbs Act offenses, bribery concerning programs receiving federal funds, making false statements on tax returns, conspiracy to commit mail fraud and honest services mail fraud, conspiracy to commit bribery concerning programs receiving federal funds, conspiracy to commit wire fraud and honest services wire fraud, RICO conspiracy, mail fraud, conspiracy to obstruct justice and obstructing a federal investigation. A jury convicted Dimora on 33 counts. The Sixth Circuit upheld the jury instructions defining “official acts” as having “fairly trace[d] the line between permissible gifts and impermissible bribes.” A ruling that state ethics reports were inadmissible hearsay was harmless in light of “overwhelming evidence.”In its 2016 “McDonnell” decision, the Supreme Court gave a narrow construction to a key element included within several of Dimora’s offenses. The term “official acts” does not include “setting up a meeting, calling another public official, or hosting an event.” Official acts are limited to “formal exercise[s] of governmental power.” Dimora petitioned to vacate his convictions under 28 U.S.C. 2255. The Sixth Circuit vacated a denial of relief. The court declined to decide whether the instructional error was harmless with respect to most of the counts or whether the “cumulative effect” of instructional and evidentiary errors entitles Dimora to relief. View "Dimora v. United States" on Justia Law

The Eighth Circuit affirmed defendant's conviction for one count of conspiracy to commit an offense against the United States and four counts of health care fraud. The court held that the evidence was sufficient to establish that defendant entered into an agreement with others to create a medical testing lab that made money through illegal kickbacks. The court also held that the evidence was sufficient to establish that members of the conspiracy committed substantive violations and defendant, as a co-conspirator, was properly held liable for these substantive crimes committed in furtherance of the scheme. View "United States v. Golding" on Justia Law