Justia White Collar Crime Opinion Summaries

Kenneth Brewington told potential investors that he owned or controlled billions in assets that didn’t exist. At trial, Brewington acknowledged that much of what he had said was untrue. But he argued to the jury that he had been duped. "The jury was apparently unimpressed," and found him guilty on eleven counts of: (1) conspiracy to commit mail and wire fraud; (2) mail fraud; (3) wire fraud; (4) conspiracy to commit money laundering; (5) money laundering; and (6) monetary transactions in property derived from specified unlawful activity. Brewington was sentenced to 70 months in prison. Brewington appealed the convictions based on the district court’s: (1) exclusion of emails that he had sent and received and (2) restriction of testimony by another person duped by the same man who had allegedly duped Brewington. The Tenth Circuit rejected these challenges, finding Brewington never offered some of the emails into evidence, so the court never had an opportunity to consider their admissibility. The district court did exclude three other emails. But if the court did err in these rulings, the errors would have been harmless because the district court ultimately allowed Brewington to testify about the emails, and the evidence of his guilt was overwhelming. View "United States v. Brewington" on Justia Law

The Fifth Circuit affirmed defendant's conviction and sentence for charges related to his role in a massive conspiracy to commit healthcare fraud. The court held that defendant's claim that the district court violated Federal Rule of Evidence 1006 when it admitted into evidence certain summary charts was meritless under any standard of review; there was no error in admitting evidence of the criminal convictions of two of his co-conspirators for legitimate purposes, and any error in admitting evidence of the criminal convictions of three other co-conspirators was harmless; and the district court did not abuse its discretion by issuing the deliberate ignorance instruction.The court also rejected defendant's challenges to the district court's calculation of his recommended sentence under the sentencing guidelines, and upheld the district court's finding of the loss amount, that his fraud involved ten or more victims, and that his case involved a large number of vulnerable victims. Finally, the court upheld the district court's calculations of restitution and held that the district court did not clearly err in its forfeiture calculation. View "United States v. Mazkouri" on Justia Law

Ludwikowski went to the police station to report extortionate threats. He was there for about seven hours and was questioned extensively about why he was vulnerable to extortion. He was given water and offered pizza. He went to the restroom, unaccompanied, at least three times. He was interviewed for about four hours, in three phases, punctuated by breaks. He had his phone and used it to make a call. It came to light that Ludwikowski, a pharmacist, had been filling fraudulent oxycodone prescriptions. He was later tried for distribution of a controlled substance. He moved to suppress the statements he made at the police station, arguing that they were inadmissible because no one read him his Miranda rights. The Third Circuit affirmed the denial of the motion. Ludwikowski was not in custody, so no Miranda warnings were needed. Much of the interview was devoted to trying to identify the extorter and the motivation; the interview would have been shorter if Ludwikowski had been more responsive. His statements at the police station were not involuntary. A reasonable person would have understood he could leave; Ludwikowski’s calm demeanor and calculated answers belie his argument that he subjectively felt his freedom was constrained. There was no plain error in the admission of expert testimony on the practice of pharmacy. . View "United States v. Ludwikowski" on Justia Law

The First Circuit affirmed Defendant's convictions for insider-trading securities fraud and related conspiracy offenses, holding that there was sufficient evidence to sustain the convictions and that the district court did not err in instructing the jury or in denying Defendant's motion for a new trial.Defendant was convicted of eleven counts of inside-trading securities fraud and related conspiracy offenses. The First Circuit affirmed the convictions, holding (1) the jury's verdicts rested on sufficient evidence showing that Defendant owed a corporate inside a duty of trust and confidence, and the evidence similarly sufficed to prove Defendant's willful breach of his duty to the corporate insider; (2) the district court's decisions to give or refuse to give certain jury instructions were without error; and (3) the district court did not manifestly abuse its discretion in denying Defendant's motion for a new trial. View "United States v. Kanodia" on Justia Law

Insurance executive Menzies sold over $64 million in his company’s stock but did not report any capital gains on his 2006 federal income tax return. He alleges that his underpayment of capital gains taxes (and related penalties and interest imposed by the IRS) was because of a fraudulent tax shelter peddled to him and others by a lawyer, law firm, and financial services firms. Menzies brought claims under the Racketeer Influenced and Corrupt Organizations Act (RICO) and Illinois law. The district court dismissed all claims. The Seventh Circuit affirmed in part. Menzies’s RICO claim falls short on the statute’s pattern-of-racketeering element. Menzies failed to plead not only the particulars of how the defendants marketed the same or a similar tax shelter to other taxpayers, but also facts to support a finding that the alleged racketeering activity would continue. A fraudulent tax shelter scheme can violate RICO; the shortcoming here is one of pleading and it occurred after the district court authorized discovery to allow Menzies to develop his claims. Menzies’s Illinois state law claims were untimely as to the lawyer and law firm defendants. The claims against the remaining financial services defendants can proceed. View "Menzies v. Seyfarth Shaw LLP" on Justia Law

Defendant-Appellant Buck Leon Hammers served as the Superintendent of the Grant-Goodland Public School District in Grant, Oklahoma, until he was charged with conspiring with his secretary to commit bank fraud and embezzle federal program funds. Prior to trial, the Government moved to exclude a suicide note written by defendant’s secretary and co-conspirator, Pamela Keeling. In that note, Keeling took full responsibility for the fraud and exculpated Defendant of any wrongdoing. The district court granted the Government’s motion and prohibited Defendant from introducing the note at trial. The jury subsequently convicted Defendant of conspiracy to commit bank fraud, and conspiracy to embezzle federal program funds. The jury acquitted Defendant on the seven substantive counts of embezzlement and bank fraud. On appeal, defendant argued: (1) the district court erred in excluding the suicide note; (2) the Government did not present sufficient evidence to obtain a conviction; (3) the Government committed prosecutorial misconduct; and (4) the district court committed procedural error at sentencing. After review, the Tenth Circuit Court of Appeals determined the district court did not abuse its discretion in excluding the suicide note; the record contained evidence sufficient to support Defendant’s conviction, there was no prosecutorial misconduct, and no procedural error in the court’s calculation of Defendant’s sentence. View "United States v. Hammers" on Justia Law

Defendant Lonnie Schmidt managed a home foreclosure rescue operation, doing business as Second Opinion Services and Financial Services Bureau Limited. Following a lengthy jury trial in which he represented himself, defendant was convicted on four counts of prohibited practices by a foreclosure consultant, ten counts of filing false instruments, six counts of identity theft, and five counts of attempted grand theft. Defendant was sentenced to a total of 28 years in prison, plus one year to serve in the county jail. On appeal, defendant argued, and the State conceded: (1) insufficient evidence supported some of defendant’s convictions for grand theft; (2) the evidence did not support some of defendant’s convictions for filing false instruments; and (3) the trial court should have stayed his sentence for second degree burglary and attempted grand theft. The Court of Appeal agreed as to all these contentions and reversed judgment and sentence regarding those counts. The Court remanded the case for resentencing in light of this decision. View "California v. Schmidt" on Justia Law

The Fifth Circuit affirmed defendant's sentence imposed after she was convicted of mail fraud, wire fraud, theft of public money, aggravated identity theft, and unlawful monetary transactions. The court held that the district court did not clearly err by applying a two level sentencing enhancement under USSG 3C1.1 for obstruction of justice. In light of the factual findings of this case, the district court concluded that defendant obstructed a governmental investigation that was in progress or would be coming about. View "United States v. Stubblefield" on Justia Law

The Fifth Circuit affirmed defendant's conviction for one count of conspiracy to commit securities fraud and two counts of securities fraud. Defendant's conviction stemmed from her purchase of company stock through her boyfriend and others. The court held that the evidence was sufficient to support defendant's convictions, and that the district court did not abuse its discretion in failing to grant a severance and try her separately from her co-conspirators. View "United States v. Tinghui Xie" on Justia Law

The Second Circuit affirmed defendants' convictions for honest services fraud and honest services fraud conspiracy, conspiracy to violate the Travel Act, and conspiracy to commit money laundering. However, the court held that the district court failed to employ a sound methodology to determine the victim's actual loss for restitution; the district court erred in ordering forfeiture of an amount that exceeded the amount of the criminal proceeds; and, under the circumstances of this case, Honeycutt v. United States, 137 S. Ct. 1626 (2017), did not foreclose ordering defendants jointly and severally to forfeit the proceeds each possessed as a result of their crimes. Accordingly, the court affirmed in part, vacated in part, and remanded for further proceedings. View "United States v. Tanner" on Justia Law