Justia White Collar Crime Opinion Summaries

In 2010, Free, as the sole proprietor of Electra Lighting, filed a voluntary bankruptcy petition. He also owns Freedom Firearms, selling WWII-era guns. After Free fell behind on payments on business-related properties, the lender purchased them in foreclosure; Free purportedly filed for bankruptcy in an effort to “stay” the sale and “work out an agreement.” He had sufficient assets to pay his debts. He then hid assets worth hundreds of thousands of dollars from the Bankruptcy Court. Free was eventually convicted for multiple counts of bankruptcy fraud. His creditors received 100 cents on the dollar. The Sentencing Guidelines increase a fraudster’s recommended sentence based on the amount of loss he causes, or intends to cause. The district court treated the estimated value of the assets that Free concealed and the amount of debt sought to be discharged as the relevant “loss” under the Guidelines. The Third Circuit vacated. On remand, the court must determine whether Free intended to cause a loss to his creditors or what he sought to gain from committing the crime. Free will not necessarily receive a lower sentence on remand. Free’s repeated lying to the Bankruptcy Court and his manifest disrespect for the judicial system may merit an upward variance from the Guidelines. View "United States v. Free" on Justia Law

Defendant was convicted of mail fraud for his part in a scheme to procure life insurance policies by misrepresenting the applicants’ net worths and their intention to transfer the policies to a third party. On remand for resentencing, the district court applied an 18-level enhancement to defendant's base offense level due to the actual loss caused by defendant's scheme to insurers and a lender. With respect to the district court’s findings on the insurers’ actual loss, the court concluded that neither the law of the case doctrine nor the mandate rule required a finding of zero actual loss by the insurers at resentencing. The court also concluded that defendant did not waive his challenges to the actual loss suffered by the lender; the district court did not err when it declined to factor Portigon’s sale of its portfolio to EAA into its actual loss calculation and instead calculated the actual loss amount based on the time of the first sentencing; the district court’s decision to base its actual loss calculation solely on the inactive policy loans was a “reasonable estimate of the loss” based on the information available to the court; and the district court did not commit clear error in finding that the actual losses to the insurers and the lender were “reasonably foreseeable pecuniary harm that resulted from [Bazemore’s] offense.” Finally, the court concluded that defendant waived his arguments regarding the proffer agreement and waived his Apprendi challenge. Accordingly, the court affirmed the judgment. View "United States v. Bazemore" on Justia Law

After defendant pled guilty to embezzlement by a bank officer or employee, she challenged her sentence, arguing that it violated her constitutional rights and that it was both procedurally and substantively unreasonable. The court concluded that the district judge abused his discretion by giving significant (indeed, dispositive) weight to defendant's inability to pay restitution. Because the district judge confirmed and reiterated his consideration of defendant's inability to pay restitution as a factor in his order on remand---coupled with his stated belief that defendant's arguments on appeal were “frivolous,” even after having the benefit of reviewing those arguments---it appears the district court may be unable to disregard its improper consideration of that factor or, at least, that it may appear so. Therefore, the court exercised its supervisory powers and remanded for resentencing before a different district judge. View "United States v. Plate" on Justia Law

Defendant pleaded guilty to three counts of wire fraud and mail fraud. On appeal, defendant challenged the restitution order and a forfeiture money judgment, both in the amount of $2,232,894. The court concluded that, as a preliminary matter, the circumstances surrounding the signing and entry of the plea agreement support the conclusion that defendant entered into the agreement knowingly and voluntarily. The court also concluded that the plea agreement shows that it provided sufficient information from which defendant could have derived an accurate estimate of the amount of restitution for which he was liable; the plain language of the plea agreement clearly states the minimum amounts of restitution that defendant would have to pay rather than the maximum agreed-upon restitution amount, and the district court’s imposition of a larger amount of restitution was not in conflict with the plea agreement; the award of restitution is not an illegal sentence in this case and the district court did not err in ordering restitution for all losses caused by the schemes to defraud, and the order was not illegal; and the court rejected defendant's arguments as to the forfeiture order and concluded that it did not constitute an illegal sentence. Accordingly, the court dismissed the appeal. View "United States v. Lo" on Justia Law

Defendant plead guilty to theft of government property, in violation of 18 U.S.C. 641, for his unlawful receipt of social security benefits, and was sentenced to 18 months’ imprisonment. The court concluded that the district court did not err in applying a two-level enhancement under USSG 2B1.1(b)(11)(C)(i) for using an unauthorized means of identification to obtain another means of identification. The court concluded that defendant created fraudulent accounts in 2008 and 2011 without authorization; defendant's conduct fell within the ambit of USSG 2B1.1(b)(11)(C)(i) and 2B1.1 cmt. n.1; and the plain meaning of the phrase "actual" does not distinguish between living and deceased persons. As the Government demonstrated, the court has affirmed application of the Guideline outside the context of credit fraud, and applied the enhancement under circumstances factually analogous to those at hand. Finally, the court concluded that the rule of lenity does not preclude the application of the enhancement. Accordingly, the court affirmed the judgment. View "United States v. Suchowolski" on Justia Law

Defendant appealed his conviction for one count of conspiracy to defraud the IRS, four counts of client tax evasion, one count of IRS obstruction, and one count of mail fraud. The court concluded that the evidence was sufficient to support the convictions; the indictment was not constructively amended; the indictment was not duplicitous; defendant's due process right to a fair trial was not violated; the district court did not commit prejudicial error in giving a supplemental instruction about the Annual Accounting Rule; defendant's sentence was procedurally and substantively reasonable; and the court rejected defendant's claims of error as to the forfeiture order. Accordingly, the court affirmed the judgment. View "United States v. Daugerdas" on Justia Law

Kolbusz, a dermatologist, submitted thousands of claims to the Medicare system and private insurers for the treatment of actinic keratosis, a skin condition that sometimes leads to cancer. He received millions of dollars in payments. Convicted of six counts of mail or wire fraud, 18 U.S.C. 1341, 1343, he was sentenced to 84 months in prison plus $3.8 million in restitution. The Seventh Circuit affirmed. The evidence permitted a reasonable jury to conclude that many, if not substantially all, of the claims could not have reflected an honest medical judgment and that the treatment Kolbusz claimed to have supplied may have failed to help any patient who actually had actinic keratosis. Because the indictment charged a scheme to defraud, the prosecutor was entitled to prove the scheme as a whole, and not just the six exemplars described in the indictment. The judge did not err in excluding evidence that, after his arrest and indictment, Kolbusz continued to submit claims to Medicare, and many were paid. “It would have been regrettable to divert the trial into an examination of Medicare’s claims-processing procedures in 2013 and 2014, rather than whether Kolbusz knew that he was submitting false claims in 2010 and earlier." View "United States v. Kolbusz" on Justia Law

Defendant appealed his conviction of wire fraud, access device fraud, aggravated identity theft, and money laundering in connection with a scheme to make unauthorized credit card charges to the credit cards of customers of defendant's digital retail company. The court concluded that the district court did not err in denying defendant's motion to dismiss the Superseding Indictment for spoliation of evidence where, pursuant to Arizona v. Youngblood, there is no evidence of the government's bad faith. The court joined its sister circuits and held that wire fraud does not require convergence between the parties intended to be deceived and those whose property is sought in a fraudulent scheme. Therefore, the district court did not err in denying defendant's motion to dismiss the wire fraud counts in the Superseding Indictment for failure to plead a legally cognizable scheme. That the Superseding Indictment alleges that defendant's misrepresentations were directed at acquiring banks and others, but that the credit card holders were the intended victims of the scheme, is irrelevant. Accordingly, the court affirmed the judgment. View "United States v. Greenberg" on Justia Law

Defendant, a CPA, appealed his sentence and conviction for conspiracy and obstruction of justice following his involvement in earnings mismanagement and improper accounting transactions while acting as chief accounting officer of Beazer Homes. The court concluded that the district court did not err in excluding evidence surrounding the false email accusations. In any event, any error was harmless where defendant was not ultimately prejudiced. The court also concluded that the district court did not abuse its discretion in quashing defendant's Federal Rule of Criminal Procedure 17(c) subpoena to Beazer; in prohibiting defendant's accounting expert from testifying about work papers prepared by Beazer's independent auditors; and in allowing the government to have Beazer employees testify as lay witnesses about the propriety of complex accounting transactions without calling an accounting expert to testify. Finally, the court rejected all three of defendant's potential misconduct claims and concluded that any error was harmless. Accordingly, the court affirmed the judgment. View "United States v. Rand" on Justia Law

Defendants Russell and Lange were found guilty of conspiracy to commit wire fraud and securities fraud (Count Two) and substantive securities fraud (Count Three). The jury also found Russell guilty of conspiracy to commit wire fraud in connection with a separate but related scheme (Count One). On appeal, the Government challenges the district court's order vacating Lange's conviction on Count Three. Both defendants challenged their convictions on several grounds. The court affirmed defendants' convictions and concluded, inter alia, that there was sufficient evidence to support the charges. The court reversed the district court's order acquitting Lange on Count Three because the district court erred by concluding that the Government was required to present evidence that Lange aided and abetted the specific acts carried out by other BSMI employees in the district of venue. The court remanded with instructions for the district court to reinstate Lange's conviction on Count Three and to resentence him accordingly. Defendants raised a number of additional arguments which the court considered and rejected. View "United States v. Lange" on Justia Law