Justia White Collar Crime Opinion Summaries

To keep his car dealership afloat, Friedman secured loans for fake buyers of a phony inventory of luxury cars. The dealership exported cars overseas, but kept many of the title certificates and used the names of friends, customers, and former employees to secure loans, usually without the person’s knowledge; the loan applications included false income information and forged signatures. The scheme resulted in a bank fraud conviction (18 U.S.C. 1344) and a 108‐month prison sentence.The Seventh Circuit affirmed. Rejecting a claim based on a conflict of interest concerning an attorney who had briefly represented both Friedman and a cooperating co-defendant, Bilis, the court stated that Friedman has not shown that any privileged communications were ever shared, let alone that any breach of privilege affected his trial. The court upheld “aiding and abetting” and “acting through another” jury instructions that tracked Seventh Circuit pattern instructions; rejected a challenge to the sufficiency of the evidence; rejected challenges to comments that, essentially, called on the jury to use common sense; and rejected challenges to sentencing enhancements. The court upheld the denial of a motion for a new trial that was based on “new evidence” concerning Bilis’s finances and upheld the loss calculation of $4,722,347 and an order of restitution in that amount. View "United States v. Friedman" on Justia Law

Spring Hill owned a 240-apartment complex in a Chicago suburb. In 2007, the owner converted the apartments into condominiums and attempted to sell them. Ginsberg recruited several people to buy units in bulk, telling them they would not need to put their own money down and that he would pay them after the closings. The scheme was a fraud that consisted of multiple components and false statements to trick financial institutions into loaning nearly $5,000,000 for these transactions. The seller made payments through Ginsberg that the buyers should have made, which meant that the stated sales prices were shams, the loans were under-collateralized, and the “buyers” had nothing at stake. The seller paid Ginsberg about $1,200,000; Ginsberg used nearly $600,000 to make payments the buyers should have made, paid over $200,000 to the buyers and their relatives, and kept nearly $400,000 for himself. The loans ultimately went into default, causing the financial institutions significant losses.The Seventh Circuit affirmed Ginsberg’s bank fraud conviction, 18 U.S.C. 1344. The evidence was sufficient for the jury to conclude Ginsberg knew that the loan applications, real estate contracts, and settlement statements contained materially false information about the transactions, including the sales prices, the down payments, and Ginsberg's fees. The court rejected a challenge to the admission of testimony by a title company employee. View "United States v. Ginsberg" on Justia Law

This criminal case stemmed from Defendant Terry and Brenda Millender's involvement in the Victorious Life Church. The district court granted Brenda's motion for a judgment of acquittal based on insufficient evidence to support her convictions for conspiracy to commit wire fraud, money laundering, and conspiracy to commit money laundering. The district court also conditionally ordered a new trial. The government appealed.The Fourth Circuit dismissed Terry's cross-appeal after his death and remanded the judgment against Terry to the district court for further proceedings. The court reversed the judgment of acquittal as to Brenda's convictions and held that the district court erred in concluding that no reasonable juror could find that Brenda knew of the fraud perpetrated by Micro-Enterprise and Kingdom Commodities; the district court relied on this ground alone to override the jury's guilty verdict as to two counts of wire-fraud conspiracy and two counts of money-laundering conspiracy; a reasonable jury could find that the Millenders not only spent the money but also tried to conceal its nature; and no more is required to sustain the jury's verdict on the three substantive counts of money laundering. The court also vacated the grant of a new trial where, on the record, the court cannot see whether the district court appreciated the limits on its discretion in making the decision. The court remanded for further proceedings. View "United States v. Millender" on Justia Law

After defendant pleaded guilty to conspiracy to defraud the United States and filing a false tax return, he unsuccessfully tried to withdraw his plea. The Eighth Circuit affirmed and held that defendant failed to show fair and just reasons why he should have been allowed to withdraw his plea where the district court did not abuse its discretion when it concluded, based on the totality of the circumstances, that defendant's guilty plea was knowing and voluntary; his plea did not lack a factual basis supporting the conviction; and the Government did not breach the plea agreement by failing to recommend a sentence reduction for acceptance of responsibility.The court also held that the Klein conspiracy conviction under 18 U.S.C. 371 was not void for vagueness; the district court did not abuse its discretion by denying defendant's motion to continue his sentencing or to bifurcate the sentencing and restitution proceedings; there was no error in the district court's order of restitution; and the court rejected defendant's argument that the district court erred by imposing a four-level enhancement under USSG 3B1.1. View "United States v. Flynn" on Justia Law

If a defendant is convicted of a money laundering scheme that caused no financial harm to an innocently involved bank, an order of forfeiture is still mandatory.The Eleventh Circuit reversed the district court's denial of the government's forfeiture motion. The court held that the definition of property in 18 U.S.C. 982(a)(1) is distinct from that in the other subsections of section 982(a), as well as 21 U.S.C. 853(a). The court's ruling allows forfeiture in the amount of property that defendant transferred as a part of his laundering scheme. The court explained that this outcome is what Congress intended when it used the broad term "any property, real or personal, involved in such offense" and instituted a scheme of substitute forfeiture. Therefore, the district court was under an obligation to order forfeiture against defendant. View "United States v. Hatum" on Justia Law

After defendant was indicted on healthcare fraud and money laundering charges, he challenged a pre-trial repatriation order entered by the district court as a violation of his Fifth Amendment privilege against self-incrimination. The order requires defendant to repatriate any proceeds of the fraudulent scheme that he may have transferred to any African bank during a three-year period, up to $7,287,000, despite the indictment alleging that he transferred only $760,000 to two specific banks in Uganda and Kenya.The Ninth Circuit vacated the district court's order, holding that the challenged order compels defendant to incriminate himself by personally identifying, and demonstrating his control over, untold amounts of money located in places the government may not presently know about. The panel also held that the district court failed to apply the proper "foregone conclusion" exception test, relieving the government of its obligation to prove its prior knowledge of the incriminating information that may be implicitly communicated by repatriation. The panel explained that the order allows the government to shirk its responsibility to discover its own evidence, and the government's narrow promise of limited use immunity is insufficient to counterbalance these harms. Accordingly, the panel remanded with instructions to conduct an evidentiary hearing. View "United States v. Oriho" on Justia Law

The First Circuit affirmed Defendant's convictions of aiding and abetting the wrongful disclosure of individually identifiable health information and obstructing a criminal investigation of a health care offense, holding that the evidence was sufficient to support the conviction.Specifically, the First Circuit held (1) inferring from certain evidence that Defendant knew that protected information was being accessed was neither unreasonable, insupportable, nor overly speculative, and therefore, the evidence was sufficient to support Defendant's conviction of aiding and abetting the wrongful disclosure of individually identifiable health information; and (2) the evidence was sufficient to support Defendant's conviction for obstructing a criminal investigation of a health care offense. View "United States v. Luthra" on Justia Law

Kozerski owned two construction companies in Detroit. He formed the second one, CA, to bid on Veterans Administration contracts set aside for small businesses owned by service-disabled veterans. Kozerski does not have a service-related disability. He convinced J.R., a service-disabled veteran, to pretend to be the company’s owner. CA handled six contracts. Kozerski forged J.R.’s signature and sent the government emails supposedly from J.R.. For five contracts, Kozerski did not pay J.R. anything, lying to him that CA did not receive any contracts after the first one.The government eventually discovered the scheme and charged Kozerski with wire fraud, 18 U.S.C. 1343. Kozerski pleaded guilty. The PSR recommended a loss amount of $9.5 million to $25 million, calculated by adding the amounts the government paid CA on all six contracts without crediting the value of the work performed on the contracts: $11,891,243.45, resulting in a Guidelines range of 37-46 months. Kozerski argued the loss should be the amount of profit a qualifying veteran-owned business would receive from the contract, yielding a guidelines range of eight-14 months. The district court adopted Kozerski’s formula and sentenced him to a year and a day. The Sixth Circuit affirmed, upholding the district court’s calculation of the loss as the aggregate difference between Kozerski’s bids and the next-lowest bids, about $250,000. View "United States v. Kozerski" on Justia Law

The Fifth Circuit affirmed defendant's conviction for making false statements to obtain federal workers' compensation benefits under 18 U.S.C. 1920 and for theft of public money under 18 U.S.C. 641. The court assumed without deciding that it was clear error to admit the testimony about the general honesty of workers' compensation patients, and held that the error was harmless because it did not affect plaintiff's substantial rights. The court also held that the district court's jury instruction was not erroneous where the alternative verbs in the first paragraph of Section 641 are means of committing the offense, not elements. View "United States v. Coffman" on Justia Law

The Second Circuit vacated defendant's sentence and restitution imposed after he pleaded guilty to conspiracy to commit wire fraud. The court held that the district court erred at sentencing by applying the commercial bribery sentencing guideline based on an uncharged bribery scheme that the government dropped in exchange for defendant pleading guilty to the wire fraud. The court explained that vacatur is warranted because the court could not be confident, despite the district court's statement to the contrary, that it would have imposed the same sentence had it instead used the correct guideline. The court also held that the district court erred by ordering $19 million in restitution to be paid to the Corrections Officers Benevolent Association, an entity that was not a victim of the convicted conduct under the Mandatory Victims Restitution Act. The court remanded for resentencing. View "United States v. Huberfeld" on Justia Law