Justia White Collar Crime Opinion Summaries

Titus’s solo medical practice, in its last 13 months, earned $1.1 million by distributing more than 20,000 prescriptions for Schedule II drugs. Titus often did only cursory physical examinations before prescribing opioids. He kept prescribing drugs despite signs that his patients were diverting or abusing them. At least two of Titus’s patients overdosed. Other doctors filed professional complaints. Titus closed his practice. Federal agents raided the homes of Titus and two of his employees and found thousands of patient files. Titus was indicted on 14 counts of unlawfully dispensing and distributing controlled substances (based on 14 prescriptions) and maintaining drug-involved premises, 21 U.S.C. 841(a)(1), (b)(1)(C), 856(a)(1).The government's statistician, using the Prescription Monitoring Program, identified 1,142 patients for whom Titus had prescribed controlled drugs, drew a random sample of 300 patients, and extrapolated to conclude that Titus had provided 29,323 controlled substance prescriptions to 948 patients with at least one inconsistent drug test and 1,552 such prescriptions to 352 patients he had already discharged from his practice. The government’s medical expert reviewed 24 of those files and determined that Titus had written illegal prescriptions for 18 of the patients.The district court held Titus responsible for at least 30,000 kilos, citing “general trial evidence” and extrapolating from the 24-file sample. The Third Circuit affirmed Titus’s convictions but vacated his 240-month sentence. The government failed to prove that extrapolating from a small sample satisfied its burden to prove the drug quantity by a preponderance of the evidence. View "United States v. Titus" on Justia Law

Plaintiff-Appellant Douglas Horn appealed the district court’s order of the granting summary judgment to Defendants on his claim under the Racketeer Influenced and Corrupt Organizations Act (“RICO”). On appeal, Appellant argues that the district court erroneously held that he lacks RICO 11 standing to sue for his lost earnings because those losses flowed from, or were derivative of, an antecedent personal injury.   The Second Circuit agreed and vacated the order granting summary judgment to Appellees on Appellant’s civil RICO claim and remanded to the district court. The court explained that RICO’s civil-action provision, 18 U.S.C. Section 1964(c), authorizes a plaintiff to sue for injuries to 14 “business or property.” While that language implies that a plaintiff cannot sue for personal injuries, that negative implication does not bar a plaintiff from suing for injuries to business or property simply because a personal injury was antecedent to those injuries. View "Horn v. Medical Marijuana, Inc." on Justia Law

Johnson was the councilman in Cleveland’s Buckeye-Shaker neighborhood for 41 years. Jamison was his executive assistant. For years, Johnson used his position to fraudulently claim federal reimbursements for payments he never made. He also secured employment for his children in federally funded programs, although they were not legally eligible to work in such positions. Johnson deposited their earnings into his own account. In addition, Johnson fraudulently claimed a series of tax deductions. He encouraged and assisted his son Elijah in submitting falsified records for Elijah’s grand-jury testimony. Jamison assisted Johnson in these crimes. Johnson and Jamison were convicted on 15 charges, including federal program theft under 18 U.S.C. 371, 666(a)(1)(A) and (2); tax fraud, 26 U.S.C. 7206(2); and obstruction of justice, 18 U.S.C. 1512(b) and 1519. Johnson was sentenced to 72 months in prison. Jamison was sentenced to 60 months.The Sixth Circuit affirmed, rejecting challenges to the district court’s loss calculations and to sentencing enhancements for being an organizer or leader of a criminal activity involving five or more participants, for using a minor, and for obstructing justice. The district court properly admitted “other acts” evidence of prior misuse of campaign funds. Any other errors in evidentiary rulings were harmless. View "United States v. Jamison" on Justia Law

Defendants Gladden and Linton were convicted of conspiracy to commit health care fraud and mail fraud, and the substantive offenses of health care fraud, mail fraud, and aggravated identity theft, for their roles in a multi-year scheme to defraud insurance companies. The government alleged Defendants received inflated reimbursement payments by billing for medically unnecessary and fraudulent prescriptions.The Eleventh Circuit found that the evidence presented at trial was sufficient to support the jury’s verdict as to all of Linton’s convictions and as to Gladden’s convictions for conspiracy, health care fraud, and mail fraud. In addition, the Eleventh Circuit found that the district court did not clearly err in calculating Gladden’s restitution and forfeiture amounts. The Court also vacated Galdden's conviction for aggravated identity theft and remanded for further proceedings consistent with this opinion. View "USA v. John Gladden, et al" on Justia Law

A jury convicted Defendant of illegally structuring two separate land-sale contract payments of around $270,000 each. On appeal, Defendant argued that there was insufficient evidence to support his convictions. Defendant asserts that the court should vacate his conviction due to a plainly erroneous jury instruction.   The Eleventh Circuit affirmed. The court wrote that in reviewing the record to determine how a jury might reasonably conclude that he structured deposits to avoid the $10,000 reporting requirement, it appears that Defendant made 22 cash deposits below $10,000 over seven days to satisfy the first payment. Then, Defendant made 38 cash deposits under $10,000 over the course of around seven and a half months to satisfy the second payment. there is sufficient evidence to support Defendant’s convictions. The court explained that viewing the evidence in the light most favorable to the verdict, it concludes that a “reasonable construction of the evidence would have allowed the jury to find the defendant guilty beyond a reasonable doubt.”   Further, the court concluded that the instructions properly listed the statutory elements for structuring in violation of 31 U.S.C. Section 5324(a)(3), and the jury concluded that the government satisfied its burden of proof on these points. That the government could not prove Bird intended to evade Form 4789 specifically does not undermine the soundness of the verdict. Finally, the court explained that Defendant and the government jointly proposed the jury instructions that the district court ultimately used. By supplying the instructions, Defendant invited any purported error. Consequently, the court declined to review his challenge to the jury's instructions. View "USA v. Zachary Bird" on Justia Law

In 1997-2009, Chappelle managed Terra and withheld federal income, Social Security, and Medicare taxes (trust fund taxes) from Terra’s employees’ wages, 26 U.S.C. 3102, 3402, 7501, but failed to remit them to the IRS in 2007-2009. The IRS imposed “trust fund recovery penalties” on Chappelle. To avoid paying, Chappelle misstated his income and assets. He used business funds to pay personal expenses. He purchased real estate in others’ names rather than his own. Chappelle repeated this cycle in 2009-2016 after he closed Terra and sequentially opened three more companies. Chappelle repeatedly moved assets.In a 2016 IRS interview, Chappelle made false statements about his real estate purchases. Chappelle subsequently falsely claimed that the latest company did not have any employees and was entitled to a tax refund. Chappelle pleaded guilty to willfully attempting to evade the payment of the Trust Fund Recovery Penalties in 2008-2009. Chappelle’s PSR calculated a total tax loss of $1,636,228.28 and recommended increasing Chappelle’s offense level by two levels for his use of sophisticated means, U.S.S.G. 2T1.1(b). The district court overruled Chappelle’s objections, calculated his guideline range as 37-46 months, considered the 18 U.S.C. 3553(a) factors, and sentenced Chappelle to 38 months’ imprisonment. The Sixth Circuit affirmed, rejecting arguments that the court miscalculated the tax loss and erroneously found that his offense involved sophisticated means. View "United States v. Chappelle" on Justia Law

The First Circuit affirmed the judgment of the district court convicting Defendant of wire fraud and honest services wire fraud, and aiding and abetting the same, in violation of 18 U.S.C. 1343, 1346, and 2 (count seven) for participating in a fraudulent scheme to obtain tests and test scores from ACT, Inc., holding that the district court did not err.Defendant, along with fourteen other parents, was named in an indictment resulting from an investigation into alleged fraudulent schemes designed to secure the admission of the children of the defendants into national elite universities. Defendant was charged with several crimes stemming from his payment of $50,000 to have an ACT proctor change his son's test scores. Defendant moved to dismiss count seven on the grounds that ACT test scores do not constitute money or property under the wire fraud statute. The motion was denied, and Defendant conditionally pled guilty. The First Circuit affirmed, holding (1) the property interest alleged in the indictment was the object of Defendant's fraud; and (2) Defendant's remaining arguments were either waived or without merit. View "United States v. McGlashan" on Justia Law

Lee carried out a scheme to defraud the Chicago White Sox. With the help of two Sox employees, Lee obtained thousands of discounted and free game tickets and resold them online for a profit. He was eventually convicted of wire fraud, 18 U.S.C. 1343. The indictment expressly sought forfeiture of Lee’s ill-gotten gains and Lee did not object to that request. The parties disagreed on the amount. The court failed to enter a preliminary order of forfeiture specifying what would be due and what property was subject to forfeiture (Fed. R. Crim. P. 32.2(b)(2)) but did everything else necessary for forfeiture, including giving Lee notice and an opportunity to contest the amount the government was seeking and orally imposing forfeiture in the sentence, along with an 18-month prison term, restitution, and the required special assessment. The written judgment, however, omitted forfeiture. After some additional proceedings, the court concluded that it was too late to enter a proper forfeiture order, and refused to amend the written judgment to reflect its oral sentenceThe Seventh Circuit rejected Lee’s challenges to the indictment, the court’s denial of his motion for acquittal, and his sentence but reversed and remanded for the district court to amend the judgment under Federal Rule of Criminal Procedure 36 to include forfeiture in the amount the court found–$455,229.23. View "United States v. Lee" on Justia Law

Dr. Xiao taught mathematics for many years at Southern Illinois University. He also did academic work based in China, for which he received more than $100,000 in payments. An investigation of Xiao's grant applications led FBI agents to examine his finances. Xiao was charged with wire fraud, making a false statement, failing to disclose his foreign bank account on his income tax returns, and failing to file a required report with the Department of the Treasury. Xiao was acquitted of wire fraud and making a false statement, but convicted of filing false tax returns and failing to file a report of a foreign bank account, 31 U.S.C. 5314(a).The Seventh Circuit affirmed, rejecting arguments that the evidence was insufficient, primarily on the question of willfulness, that the tax return question was ambiguous, and that the foreign-account reporting regulation is invalid. The evidence permitted the jury to find beyond a reasonable doubt that Xiao acted willfully in choosing not to disclose his foreign bank account. The tax return form was not ambiguous as applied to Xiao’s situation. The government proved beyond a reasonable doubt that he engaged in reportable transactions. In 2019 he received deposits to the Chinese account and made withdrawals and investments using that account. View "United States v. Xiao" on Justia Law

If a borrower defaults on a loan guaranteed by the Small Business Administration (SBA), the lender asks the SBA to purchase the outstanding balance of the defaulted loan. The SBA then decides whether to honor the guarantee after reviewing the paperwork to ensure that the loan complied with SBA requirements. A lender can retain a lending service provider (LSP) to package, originate, disburse, service, or liquidate SBA-guaranteed loans on the lender’s behalf. The five defendants worked at, or with, an LSP, and engaged in a scheme to obtain SBA guarantees for loans that did not meet the SBA’s guidelines and requirements. They made false statements on loan-guarantee applications and purchase requests sent to the SBA about matters such as borrowers’ eligibility to receive a loan and how loan proceeds would be disbursed.The Seventh Circuit affirmed the defendants’ convictions for conspiracy to commit wire fraud affecting a financial institution, 18 U.S.C. 1349, and wire fraud affecting a financial institution, section 1343) and their sentences. The court rejected arguments concerning a constructive amendment to the indictment, that the government did not prove that the wire fraud scheme deprived the SBA of a protectable money or property interest, jury instructions, the sufficiency of the evidence, and loss calculation. View "United States v. Griffin" on Justia Law