Justia White Collar Crime Opinion Summaries

Feng Tao, a tenured professor at the University of Kansas (KU), was involved in federally funded research while secretly developing a relationship with Fuzhou University in China. Tao was charged with ten federal crimes, including making false statements and wire fraud. A jury convicted him of making a materially false statement to his employer, KU, in violation of 18 U.S.C. § 1001(a)(2), by failing to disclose his relationship with Fuzhou University on an institutional-responsibilities form.The United States District Court for the District of Kansas initially denied Tao's motions to dismiss the indictment. At trial, the jury found Tao guilty on three wire-fraud counts and one false-statement count but acquitted him on the other four counts. Post-trial, the district court acquitted Tao on the wire-fraud counts, leaving only the false-statement conviction. Tao was sentenced to time served and two years of supervised release.The United States Court of Appeals for the Tenth Circuit reviewed the case and found that the government provided insufficient evidence to prove that Tao's false statement was material to any decision by the Department of Energy (DOE) or the National Science Foundation (NSF). The court noted that the funding decisions by these agencies were made before Tao submitted the false form, and no proposals were pending at the time. Additionally, the court found no evidence that Tao's relationship with Fuzhou University created a disclosable financial interest under the NSF's conflict policy. Consequently, the Tenth Circuit reversed Tao's conviction and remanded the case for the district court to enter a judgment of acquittal. View "United States v. Tao" on Justia Law

Ji Chaoqun, a Chinese national, came to the United States in 2013 to study electrical engineering. In 2022, he was indicted for conspiring to commit an offense against the United States, failing to register as a foreign agent, wire fraud, and making a false statement. Evidence presented at trial showed that Ji was recruited by the Chinese Ministry of State Security (MSS) before leaving China and engaged in various activities on their behalf, including purchasing background reports on U.S. scientists and attempting to infiltrate the U.S. Army Reserves.The United States District Court for the Northern District of Illinois convicted Ji on all counts and sentenced him to 96 months in prison. Ji appealed, arguing that the government should have to prove he was not engaged in a legal commercial transaction as an element of the offense and that the jury should have been required to unanimously agree on the specific act he committed. He also challenged the district court’s evidentiary and sentencing decisions.The United States Court of Appeals for the Seventh Circuit held that the specific act a foreign agent commits under 18 U.S.C. § 951 does not require jury unanimity and that the legal commercial transaction exception is an affirmative defense, not an element of the offense. The court also found no error in the district court’s evidentiary rulings or in its sentencing decisions. The Seventh Circuit affirmed Ji’s conviction and sentence. View "United States v. Chaoqun" on Justia Law

Eunice Nkongho was investigated for her involvement in a munitions export and money laundering conspiracy. Federal agents stopped her at the airport and seized her electronic devices. Nine days later, they obtained a warrant to search her phone, uncovering incriminating text messages. Nkongho was charged with money laundering and conspiracy to launder money. She moved to suppress the evidence from her phone, but the district court denied the motion. At trial, the government used her text messages and call history as key evidence. A jury convicted her, and she was sentenced to twenty-four months’ imprisonment and three years’ supervised release.The United States District Court for the District of Maryland denied Nkongho’s motion to suppress, holding that the seizure of her devices fell within the border search exception, which does not require a warrant. The court found that the scheme involved the theft and international transfer of military equipment, justifying the seizure. The court also rejected her argument that the nine-day delay in obtaining a search warrant was unreasonable, emphasizing the government’s heightened interest in the devices.The United States Court of Appeals for the Fourth Circuit reviewed the case and affirmed the district court’s decision. The appellate court held that the agents had probable cause to believe Nkongho was part of an international munitions export conspiracy, justifying the seizure of her devices under the border search exception. The court also found that the nine-day delay in seeking a search warrant was not unreasonable, given the agents’ need to consult legal counsel. Additionally, the court upheld the district court’s calculation of Nkongho’s sentence, including the loss amount attributed to her and the denial of a role reduction in the offense level. View "United States v. Nkongho" on Justia Law

The case involves Priscilla Yvette Cervantes, who was convicted of participating in a drug-trafficking conspiracy to possess and aid in the possession of a controlled substance with the intent to distribute. The conspiracy was orchestrated by the Federal Bureau of Investigation (FBI) as a reverse-sting operation targeting Cervantes's boyfriend and later husband, Alexsander Reyes, a former Harris County Precinct One Constable’s Deputy suspected of corruption and stealing drugs from law enforcement seizures. Cervantes accompanied Reyes on multiple occasions, including transporting money and escorting drugs for a fake cartel in exchange for cash payments.The case was initially heard in the United States District Court for the Southern District of Texas, where Cervantes was found guilty on both counts of conspiring and aiding and abetting possession with the intent to distribute a controlled substance. Cervantes moved for acquittal on both counts, arguing that there was insufficient evidence to show that she or Reyes ever actually or constructively possessed the cocaine, or that she knew, or reasonably should have known, that the weight of the cocaine was at least five kilograms. The district court denied the motion.On appeal to the United States Court of Appeals for the Fifth Circuit, Cervantes raised three issues. She argued that the district court erred in denying her motion for acquittal, in failing to give a jury instruction that she could not be in a conspiracy alone with a government agent, and in excluding a video clip of Reyes's post-arrest interview with an FBI agent. The Court of Appeals affirmed the district court's decision, finding that there was substantial evidence for the jury to find beyond a reasonable doubt that Cervantes and Reyes engaged in an agreement to possess with the intent to distribute a controlled substance. The court also found no error in the district court's refusal to give a specific jury instruction or in its decision to exclude the video clip. View "United States v. Cervantes" on Justia Law

The case involves fourteen members of the Bomb Squad, a street gang, who were charged with violations of the Racketeer Influenced and Corrupt Organizations Act (RICO), among other crimes. One member pleaded guilty, while the remaining defendants were convicted by a jury. The defendants appealed their convictions, arguing that the district judge violated Batson v. Kentucky when selecting the jury. The court of appeals retained jurisdiction of the appeal and ordered a limited remand to allow the district court to make supplemental findings on this issue. The court of appeals found no reversible error in the remaining arguments raised by the defendants and affirmed their convictions.The Bomb Squad was a street gang that used violence to protect its reputation, territory, and drug sales. The gang members were charged with numerous crimes, including murder, attempted murder, drug trafficking, and multiple robberies. The defendants argued that the district judge violated Batson v. Kentucky when selecting the jury, which prohibits a prosecutor from using a peremptory challenge to strike a prospective juror because of their race.The court of appeals ordered a limited remand to allow the district court to make supplemental findings on the Batson issue. The court of appeals found no reversible error in the remaining arguments raised by the defendants and affirmed their convictions. The court of appeals also noted that if the district court orders a new trial, much of its opinion would become moot. However, it addressed the remaining issues raised by the defendants in the interest of judicial economy. View "USA v. Williams" on Justia Law

Five members of the Baltimore-based gang, Murdaland Mafia Piru (MMP), appealed their convictions and sentences. The defendants were convicted of various crimes, including conspiracy under the Racketeer Influenced and Corrupt Organizations Act (RICO), conspiracy to distribute controlled substances, and possession of a firearm and ammunition as convicted felons. The United States Court of Appeals for the Fourth Circuit affirmed most of the convictions and sentences, but reversed two convictions for Shakeen Davis due to a violation of Rehaif v. United States, which requires the government to prove that a defendant knew he was a felon at the time he possessed a firearm. The court remanded the case for entry of a corrected judgment. The court rejected the other defendants' arguments, including claims of evidentiary errors, failure to enforce a plea agreement, and challenges to the reasonableness of their sentences. View "US v. Banks" on Justia Law

The case involves Robert James McCabe, a former sheriff of the City of Norfolk, Virginia, who was convicted of carrying out fraud and bribery schemes with contractors concerning medical and food services for prisoners in the Norfolk Jail. Over 20 years, McCabe provided favored contractors with inside information about competing bids for the Jail’s contracts, altered and extended contracts for their benefit, and received various things of substantial value in return. McCabe was convicted of 11 federal offenses, including charges of conspiracy, honest services mail fraud, Hobbs Act extortion, and money laundering. He was sentenced to 144 months in prison, plus supervised release.McCabe appealed his convictions and sentences, raising four contentions of error. He argued that his trial was unfairly conducted before a trial of a co-defendant, that the trial court erred by admitting hearsay statements, that the jury instructions were incorrect, and that the court wrongly applied an 18-level sentencing enhancement. The United States Court of Appeals for the Fourth Circuit rejected all of McCabe’s contentions and affirmed his convictions and sentences. View "US v. McCabe" on Justia Law

Patrick Sutherland was convicted of three counts of filing false tax returns and one count of obstructing an official proceeding. He managed several insurance businesses and routed his international transactions through a Bermuda company, Stewart Technology Services (STS), which he claimed was owned and controlled by his sister. However, evidence showed that Sutherland managed all its day-to-day affairs. Between 2007 and 2011, STS sent Sutherland, his wife, or companies that he owned more than $2.1 million in wire transfers. Sutherland treated these transfers as loans or capital contributions, which are not taxable income, while STS treated them as expenses paid to Sutherland. Sutherland did not report the $2.1 million as income on his tax returns. In 2015, a federal grand jury indicted Sutherland for filing false returns and for obstructing the 2012 grand jury investigation. The jury found Sutherland guilty on all charges.Sutherland appealed his convictions, but the Court of Appeals affirmed them. He then filed a 28 U.S.C. § 2255 petition to vacate his obstruction conviction and a petition for a writ of error coram nobis to vacate his tax fraud convictions. The district court denied both petitions without holding an evidentiary hearing. Sutherland appealed this decision.The United States Court of Appeals for the Fourth Circuit affirmed the district court's decision. The court found that Sutherland failed to show how the proffered testimony from his brother and a tax expert would have undermined his obstruction conviction. The court also found that Sutherland had not demonstrated ineffective assistance of counsel and thus could not show an error of the most fundamental character warranting coram nobis relief. View "United States v. Sutherland" on Justia Law

The case involves Neldia Marie Puccinelli, who was accused of embezzling funds from her employer, ProMark, between 2006 and 2009. After her employment was terminated, ProMark filed a civil suit against her, which was settled with an agreement that Puccinelli would transfer certain personal property to ProMark and make 84 monthly payments of $350. In 2011, the State filed criminal charges against Puccinelli for theft by embezzlement. She entered a plea agreement, which consolidated the three counts into one and recommended a fully suspended sentence with restitution consistent with the civil settlement agreement.The District Court rejected the plea agreement, speculating that Puccinelli would stop paying restitution if given a probationary sentence. The court imposed a 10-year commitment to the Montana Women’s Prison, with 5 years suspended, and ordered Puccinelli to pay $67,235 in restitution. Puccinelli's disability payments were suspended during her incarceration, which led to financial instability for her household. Upon release, Puccinelli resumed making regular payments towards restitution.In 2022, five months before Puccinelli was set to discharge her probation, the State filed a Petition for Revocation of Suspended Sentence, alleging Puccinelli violated the restitution conditions of her sentence. The District Court determined Puccinelli had violated the terms and conditions of her suspended sentence as she had not “completely paid restitution.” The court revoked her suspended sentence and committed her to the Department of Corrections for five years, all suspended, with “the same conditions and restitution requirements as was in the original Judgment with no credit for street time.”The Supreme Court of the State of Montana reversed the District Court's decision, finding that the lower court had abused its discretion when it revoked Puccinelli’s suspended sentence based on her failure to pay full restitution. The Supreme Court concluded that the violation should have been characterized as a compliance violation, which should have been excused pursuant to § 46-18-203(6)(b), MCA. The case was remanded to the District Court to vacate the August 25, 2022 Judgment on Revocation of Suspended Sentence and dismiss the petition for revocation. View "State v. Puccinelli" on Justia Law

The case involves Alejandro Cortés-López, who was serving a 24-month prison term after pleading guilty to conspiracy to commit mail and wire fraud. Cortés-López had entered into a plea agreement with the government, admitting to a fraudulent financial scheme that solicited residents in Puerto Rico to invest in short-term, high-interest loans in the Dominican Republic. The plea agreement stipulated a total offense level (TOL) of 18, which, combined with a criminal history category of I, suggested a guidelines sentencing range (GSR) of 27-33 months' imprisonment. However, both parties agreed to jointly request a variant sentence of 24 months of probation.The Presentence Investigation Report (PSR) calculated a higher TOL due to the financial fraud scheme resulting in more than $5.4 million in losses to the investors. Cortés-López objected to these enhancements, but the probation office maintained that the higher loss amount and additional enhancement were correct. At the sentencing hearing, the government acknowledged the PSR's calculation but stated it was standing by its plea agreement recommendation of 24 months of probation. The district court, however, imposed a sentence of 24 months' imprisonment, followed by 3 years of supervised release and $5.4 million in restitution.Cortés-López appealed, arguing that the government breached the plea agreement by supporting the higher TOL calculated in the PSR and failing to advocate meaningfully for the agreed-upon 24-month probation sentence. The United States Court of Appeals for the First Circuit agreed, finding that the government's conduct at the sentencing hearing was a breach of the plea agreement. The court vacated Cortés-López's sentence and remanded the case for further proceedings. View "United States v. Cortes-Lopez" on Justia Law