Justia White Collar Crime Opinion Summaries

Posada, a licensed chiropractor, owned and operated Spine Clinics, a Medicare-enrolled provider. Posada was indicted for a scheme to defraud Medicare and other insurers by submitting fraudulent claims and falsely representing that certain health care services were provided. The prosecution presented evidence that Posada billed the insurers for deceased patients and services never performed, created fake files, and failed to document the actual services rendered. Witnesses from Medicare and an insurer testified regarding the thousands of claims submitted. Two physical therapists also testified about the services they performed for Spine Clinics, how they billed Posada, and that they never performed many of the services for which he charged. Convicted of 18 counts of health care fraud, Posada’s PSR indicated an offense level of 26, based on a $4,087,736 loss amount, and recommended a term of incarceration of 63-78 months. To calculate that amount the prosecution reviewed Spine Clinic's files and when no treatment documentation was present, the amount billed was treated as a loss. The prosecution credited Posada with treating 20 patients a day, three days a week every week during the period of the fraud. Posada argued for an estimate of 25-26 patients per day and a loss amount less than $3.5 million. The district court accepted the government’s calculation and found a loss amount of $4,087,736. The Seventh Circuit affirmed that amount and Posada’s 60-month sentence, noting that the calculation was supported by the evidence at trial. View "United States v. Posada" on Justia Law

In operating his companies, Rankin failed to remit to the IRS employees’ withholding taxes and inaccurately reported his own earnings as royalties (26 U.S.C. 7202, 7206, 7212). Rankin interfered with and delayed IRS investigations, filing amended returns containing false information and falsely claiming that fire had destroyed his records. Rankin bragged about his efforts to beat the IRS at its own game. He was convicted of 17 tax-related counts, sentenced to 60 months in prison, and required to pay restitution. The Sixth Circuit affirmed his conviction and sentence, modifying his judgment to reflect that he need not pay restitution until his term of supervised release commences. The court rejected a challenge to Count 17, which alleged that during the relevant time, Rankin had “willfully misl[ed] agents of the IRS by making false and misleading statements to those agents and by concealing information sought by those agents who he well knew were attempting to ascertain income, expenses and taxes for [Rankin] and his various business entities and interests.” The indictment contains the elements of the charged offense and does more than merely track the language of the statute. It alleges a nexus between Rankin’s misleading conduct and the agents’ attempts “to ascertain [his] income, expenses and taxes,” an investigation that went beyond the “routine, day-to-day work carried out in the ordinary course by the IRS.” The indictment reflects that the investigation was pending and that Rankin was aware of it. View "United States v. Rankin" on Justia Law

Allstate filed suit under Insurance Code section 1871.7 on behalf of the People against defendant, her mother, and others for insurance fraud in violation of Penal Code section 550, which makes it unlawful to submit false or fraudulent claims to an insurance company. The jury found in favor of Allstate.The Court of Appeal affirmed, holding that the trial court did not abuse its discretion in denying defendant's ex parte application for a stay. The court also held that unlawful conduct under section 550 does not require a misstatement of fact in the insurance claim. In this case, defendant and her mother committed insurance fraud in violation of section 550 where they perpetrated a deceitful insurance scheme designed to acquire insurance proceeds illegally for personal gain. View "People ex rel. Allstate Insurance Co. v. Suh" on Justia Law

The Eleventh Circuit affirmed the district court's dismissal of the complaint in a civil forfeiture action involving criminal proceeds from the faja retail business. The court held that the district court did not abuse its discretion when it allowed the government to dismiss its complaint without prejudice, because claimants have not established that they suffered clear legal prejudice by the government's voluntary dismissal. The court also held that claimants were not entitled to attorney's fees under the Civil Asset Forfeiture Reform Act, because they did not substantially prevail in the action. View "United States v. Kurvas Secret By W" on Justia Law

The Second Circuit affirmed defendant's conviction of securities fraud and wire fraud, finding no errors in the district court's jury instructions, admission of lay testimony, and calculation of loss.The court also held that, as a matter of law, forfeiture is not limited to the amount of funds acquired through illegal transactions in an insider‐trading scheme; rather, forfeiture may extend to appreciation of those funds. Accordingly, the court affirmed the district court's forfeiture calculation and order. Finally, Lagos v. United States, 138 S. Ct. 1684 (2018), was decided after defendant's sentence and addressed the categories of fees recoverable under the Mandatory Victims Restitution Act. Therefore, the court held that a limited remand to recalculate the restitution was appropriate. View "United States v. Afriyie" on Justia Law

The Eighth Circuit affirmed defendant's sentence after he pleaded guilty to passing counterfeit securities. The court held that the district court did not clearly err in determining the intended-loss calculation and in determining the amount of restitution. In this case, trying to rent a jet without intending to pay for it satisfied the definition of an intended loss, and the district court reasonably estimated the victims' ultimate losses. View "United States v. Smith" on Justia Law

The Fifth Circuit affirmed defendants' convictions stemming from their involvement in a fraudulent scheme to collect disaster assistance. Defendant Walter was convicted of conspiracy to commit wire fraud, eleven counts of wire fraud, two counts of theft from a program receiving federal funds, and three counts of money laundering; Defendant Rosie was convicted of the conspiracy count, ten counts of wire fraud, and a money laundering count; and Defendant Anita was convicted of the conspiracy count.The court held that there was sufficient evidence to convict defendants. The court also held that the district court did not misapply a two-level sentencing enhancement under USSG 2B1.1(b)(9)(A) to Rosie's sentence where the offense involved a misrepresentation that the defendant was acting on behalf of a charitable, educational, religious, or political organization, or a government agency. The court vacated the no-new-credit special condition and remanded for the district court to reform the written no-new-credit condition to match the one implied by the oral sentence of restitution. The court also vacated the no-gambling special condition, because it was not so clearly consistent with an oral pronouncement of restitution as to be reasonably encompassed within that pronouncement. The court affirmed the remaining two challenged conditions. View "United States v. Diggles" on Justia Law

Harmelech pled guilty to one count of mail fraud, 18 U.S.C. 1341; the government dismissed the remaining count. Harmelech, who owned and operated multiple cable installation companies, admitted to setting up about 384 DIRECTV accounts under a fraudulent scheme that involved multi-family buildings. He pocketed money that should have been paid for servicing those accounts for six years. Harmelech involved several employees in his scheme and attempted to prevent DIRECTV from discovering his scheme by instructing the building managers not to cooperate in an investigation. At sentencing, Harmelech claimed his scheme actually benefited the company by bringing in additional business. The district court adopted the government’ loss calculation and found Harmelech owed: $108,000 in account delinquencies; $39,000 in unrecovered DIRECTV receivers; and $29,600 in promotional customer credits; $166,0001 for stolen channels and $35,000 for the price DIRECTV paid for its internal investigation. The court ordered $372,600 in restitution, assessed a four-level sentencing enhancement for Harmelech’s role as the organizer and leader of an otherwise extensive fraudulent scheme U.S.S.G. 3B1.1(a), and sentenced Harmelech to 48 months’ imprisonment. The Seventh Circuit affirmed. The district court’s loss calculation was concrete, specific, conservative in its results, and consistent with Seventh Circuit precedent. View "United States v. Harmelech" on Justia Law

The DC Circuit affirmed defendants' convictions and sentences for health care fraud, conspiracy to commit health care fraud, money laundering, and conspiracy to commit money laundering. The court rejected statutory and constitutional speedy trial claims. The court also held that the district court abused its discretion in denying severance; even assuming a Rule 16 violation, defendants failed to establish the requisite prejudice to their substantial rights for the court to conclude that the district court abused its discretion by not excluding Exhibit 439; the evidence was sufficient to convict defendants; and challenges to the unanimity and aiding-and-abetting instructions rejected on plain error review.The court also held that the district court properly concluded that the $80.6 million in payments from D.C. Medicaid to Global constituted loss under the Mandatory Victims Rights Act; the district court did not plainly violate the Excessive Fines Clause by ordering forfeitures without considering defendants' ability to pay them; and the district court did not abuse its discretion by imposing four sentencing enhancements for committing crimes involving a loss of approximately $80 million, abusing positions of trust, playing a managerial role in the crimes, and violating an administrative order. View "United States v. Bikundi" on Justia Law

Anthony, his brother Christopher, their sister Sharon, and Sharon’s husband, Durand, sought tax refunds for 21 separate fictitious trusts that they created. They were successful in obtaining refund checks based upon many of these returns, receiving over $360,000. They were convicted of mail fraud, conspiracy to commit mail fraud, aggravated identity theft, conspiracy to commit identity theft, and illegal monetary transactions. The Seventh Circuit affirmed, rejecting arguments that insufficient evidence supported Sharon’s convictions; that insufficient evidence supported the finding that Anthony and Sharon knew that they were using the names and personal identifying information of real people; that Anthony and Christopher were deprived of the effective assistance of counsel because their state-bar grievances against their attorneys created conflicts of interest; that the indictment was duplicitous regarding the aggravated-identify-theft charges and the district court failed to cure this defect by issuing a specific unanimity jury instruction; that the court’s aiding-and-abetting jury instruction was legally incorrect, and that insufficient evidence supported the court’s aiding-and-abetting jury instruction. View "United States v. Gandy" on Justia Law