Justia White Collar Crime Opinion Summaries

From 2002-2008 Boliaux operated EMC, a used-car dealership. He borrowed money. Most loans were secured by the cars’ certificates of title. Because there should be only one title certificate per car, the dealer cannot transfer good title to a customer without paying the lender. In 2007 Boliaux persuaded state officials to issue duplicate certificates of title on the pretense that the originals had been lost. He obtained multiple loans against single vehicles, exceeding the cars’ market value and leaving the lenders under-secured. He sold cars without repaying the loans. After a lender detected this and impounded the collateral, Boliaux persuaded the custodian to release eight cars, which he sold for his own benefit. In 2008, Boliaux’s wife incorporated Joliet Motors, which Boliaux operated from the former EMC premises. Joliet Motors received installment payments from EMC customers but did not remit them to lenders. Boliaux began check kiting. He was convicted of four counts of wire fraud and six of bank fraud, 18 U.S.C. 1343, 1344, and sentenced to 48 months’ imprisonment. The Seventh Circuit affirmed, rejecting arguments that the evidence was insufficient on the wire fraud counts because he did not transmit anything by wire, and on the bank fraud counts because no one from the banks testified that the banks lost money. The district judge properly declined to instruct the jury that it had to agree, unanimously, how Boliaux carried out his scheme. View "United States v. Boliaux" on Justia Law

Creditors filed suit alleging that a husband and wife worked together to commit multiple acts of mail and wire fraud over several years for the purpose of hiding the husband's assets—acts which, in the creditors' telling, violated the Racketeer Influenced and Corrupt Organizations Act (RICO). The district court found in favor of the wife, finding that no reasonable juror could conclude that they formed an organization with some sort of framework, formal or informal, for the purpose of engaging in racketeering activity.The Eleventh Circuit reversed and held that there was a genuine factual dispute as to whether the couple formed an association-in-fact enterprise separate and apart from their marital relationship. In this case, the district court erred by applying a heightened standard for association-in-fact enterprises consisting of married couples, rather than applying the sames rules to married couples as to everyone else. Accordingly, the court remanded for further proceedings and vacated the district court's order awarding the wife costs. View "Al-Rayes v. Willingham" on Justia Law

After investigating complaints regarding the tax-preparation services of defendant Donald Iley, the Colorado Board of Accountancy (Board) issued an “Agreement and Final Agency Order” in which Iley admitted to engaging in professionally negligent conduct and agreed to accept certain disciplinary sanctions, including a $10,000 fine and a five-year probationary period. Among the acts for which the Board disciplined Iley was taking a client’s money, ostensibly to pay the client’s payroll taxes, but then failing to promptly and properly pay those funds to the IRS. While serving the Order’s probationary term, Iley executed a fraudulent scheme in which he fleeced his clients of more than $11 million. As part of this scheme, Iley fraudulently misrepresented to his clients that he was taking their funds to pay outstanding payroll taxes to the IRS but, instead, Iley used those funds for personal purposes. After this fraud was discovered, Iley pleaded guilty to wire fraud and aiding in the preparation of a false tax return. At sentencing, the district court enhanced Iley’s sentence under the U.S. Sentencing Guidelines, section 2B1.1(b)(9)(C). The question presented to the Tenth Circuit was whether the court erred in doing so. The Court held that under the particular circumstances of this case, the court did not err in Iley's sentence, and affirmed. View "United States v. Iley" on Justia Law

The Eighth Circuit affirmed defendant's conviction of mail and wire fraud and sentence of 87 months in prison. Defendant's conviction stemmed from his scheme to promote the creation of a Hmong homeland by accepting money from donors.The court held that the district court did not err in preventing defendant from raising a public authority defense at trial because he failed to show even apparent authority. Furthermore, the district court did not err by precluding him from presenting an entrapment by estoppel defense. The court also held that defendant's Fifth Amendment rights against self-incrimination was not violated; defendant's right to compulsory process under the Sixth Amendment was not violated; and the court declined to consider defendant's ineffective assistance of counsel claim. Finally, the court held that defendant's sentence was substantively reasonable where the district court did not abuse its discretion and explicitly considered sentencing disparities. View "United States v. Seng Xiong" on Justia Law

The Eleventh Circuit affirmed defendant's conviction for violating 18 U.S.C. 1028A(a)(1), which makes it a crime for any person to use, without authority, a means of identification of another person. The court held that, considering all the evidence, the government proved beyond a reasonable doubt that the bank was insured by the FDIC both before and after defendant's offenses and that it did not need to renew its insurance in the interim. Therefore, coupled with the universal presumption that all banks were federally insured, and viewing the proof in the light most favorable to the government, a reasonable juror could find that the bank was insured by the FDIC on the dates of defendant's offenses. Furthermore, the court held that the plain meaning, statutory context, and existing precedent all showed that defendant "used" his victim's means of identification when he employed that person's signature to obtain the loan and thereby converted the signature to his own service. View "United States v. Munksgard" on Justia Law

Melinda Strom appealed an amended criminal judgment and order for restitution. Strom pled guilty to misapplication of entrusted property in excess of $50,000 in violation of N.D.C.C. 12.1-23-07(1). Strom was sentenced to five years, all suspended for three years of supervised probation. Strom argued the district court abused its discretion in awarding restitution because it did not consider her ability to pay as required by N.D.C.C. 12.1-32-08(1). The North Dakota declared the statute unconstitutional in part and affirmed the restitution order and judgment. The Court concluded the district court did not abuse its discretion in fixing the amount of restitution without regard to the defendant's ability to pay. "To clearly state the scope of this decision, it is necessary to articulate what we do not decide here. In this matter, we examine only an award of restitution and not a contempt hearing or probation revocation for non-payment, and thus we limit consideration of ability to pay only in the context of setting the total amount of restitution. We do not completely preclude consideration of ability to pay. There may be times when such consideration may be appropriate, i.e., when determining the time or manner of payment or whether a defendant's failure to pay is willful." View "North Dakota v. Strom" on Justia Law

Petitioner appealed the district court's denial of his 28 U.S.C. 2255 motion to vacate his securities fraud convictions in light of United States v. Newman, 773F.3d438 (2dCir. 2014), in which the Second Circuit reversed the insider trading convictions of two tippers. The court affirmed the judgment and held that petitioner presented no viable claim that the personal benefit challenge was unavailable to his counsel on appeal; petitioner failed to show prejudice where the personal benefit instructions he challenged were so flawed as to deny him due process; and petitioner has not demonstrated his actual innocence where the evidence contained ample evidence that petitioner was in a conspiracy to trade on the basis of non public information and that petitioner benefited financially from the trading. View "Gupta v. United States" on Justia Law

The Second Circuit affirmed defendant's conviction of conspiracy to commit securities fraud and securities fraud. In this case, defendant was a tipper who did not directly trade on material, non‐public information but rather shared it with a tippee who did.The court held that the evidence was sufficient to prove his criminal intent where the jury was not required to credit defendant's deposition testimony that he intended only to brag when he tipped his friend and financial advisor about an upcoming merger, and the evidence taken as a whole permitted the jury to find beyond a reasonable doubt that defendant intended his communication to lead to trading in securities of the company in question. View "United States v. Klein (Schulman)" on Justia Law

The Fifth Circuit affirmed defendant's conviction on charges of wire fraud, securities fraud, making false statements to the SEC, and conspiracy to commit wire fraud and securities fraud. Defendant was the CEO of ArthroCare, a publicly traded medical device company and he, along with the company's other senior executives, had engaged in a channel-stuffing scheme.The court held that, to the extent that an FBI case agent's testimony was improper, any error was harmless; the district court did not abuse its discretion in excluding testimony of ArthroCare's former controller; the jury instructions were not erroneous under the wire fraud statute; and jury instructions on accomplice liability comported with the general aiding and abetting knowledge and intention requirements reiterated in Rosemond v. United States, 134 S. Ct. 1240 (2014). The court rejected defendant's remaining contentions. View "United States v. Baker" on Justia Law

Neilitz purchased $125,000 worth of ECS stock; Rawah Partners invested $350,000. In 2008, Corrigan, ECS’s President and CEO, negotiated a sale of ECS. Because of the worldwide financial downturn, the sale fell through. Shortly thereafter, ECS's board authorized Corrigan to manage ECS as he saw fit. Corrigan was negotiating another sale when ECS began to suffer cash flow problems. ECS had difficulty paying expenses and officers’ compensation. It closed its Chase Bank account and opened a new LaSalle Bank account that excluded the Vice President from its signatories. ECS's employee healthcare policy was canceled in January 2009, for nonpayment. Corrigan began soliciting Neilitz and Rawah for additional investments announcing that ECS was close to closing a sale but needed funds for healthcare insurance premiums. Per Corrigan’s instructions Neilitz and Rawah each wired $50,000 to an account which, unbeknownst to them, was Corrigan’s personal account. Corrigan spent the funds for personal expenses. Corrigan was terminated from ECS in 2011. Corrigan contacted Neilitz and Rawah, attempting to buy back the fraudulently sold stock but reaffirmed his original lie. Corrigan was convicted on four counts of wire fraud, 18 U.S.C. 1343. The Seventh Circuit affirmed his conviction and an order of restitution in the full amount of the investments. The indictment adequately alleged a scheme to defraud; the evidence supported the conviction. View "United States v. Corrigan" on Justia Law