Justia White Collar Crime Opinion Summaries

Defendant was convicted of one count of investment adviser fraud, one count of securities fraud, four counts of wire fraud, and six counts of offenses in violation of the Travel Act, 18 U.S.C. 1952. Defendant raised numerous issues on appeal. In this opinion, the court concluded that a criminal conviction premised on a violation of section 206 of the Investment Advisers Act of 1940, 15 U.S.C. 80b-6, does not require proof of intent to harm. Therefore, the district court did not err in not instructing the jury that investment adviser fraud requires proof of intent to harm his clients. In a summary order filed herewith, the court rejected defendant's remaining arguments. Accordingly, the court affirmed the judgment. View "United States v. Tagliaferri" on Justia Law

Four persons were charged with arranging the murder of “Montes” in Mexico to reduce competition against a Chicago-based criminal organization that created bogus immigration documents. The Seventh Circuit reversed dismissal on grounds that the indictment proposed the extraterritorial application of U.S. law. On remand, one defendant pleaded guilty. Three were convicted under 18 U.S.C. 1959, the Racketeer​ Influenced and Corrupt Organizations Act (RICO); 18 U.S.C. 956(a)(1), which forbids any person “within the jurisdiction of the United States” from conspiring to commit a murder abroad; and conspiring to produce false identification documents, 18 U.S.C. 371. On appeal, defendants cited the Supreme Court’s 2010 decision, Morrison v. National Australia Bank, which reiterated the presumption against extraterritorial application of civil statutes. The Seventh Circuit affirmed, noting that its earlier decision recognized that presumption and thought it not controlling, because of the differences between criminal and civil law, and because the murder in Mexico was arranged and paid for from the U.S., and was committed with the goal of protecting a criminal organization that conducted business in the U.S., to defraud U.S. officials and employers. View "United States v. Leija-Sanchez" on Justia Law

Ocasio and other police officers routed damaged vehicles from accident scenes to an auto repair shop in exchange for kickbacks. He was charged with obtaining money from the shopowners under color of official right (Hobbs Act, 18 U.S.C. 1951), and conspiring to violate the Hobbs Act, 18 U.S.C. 371. The court rejected his argument that—because the Act prohibits the obtaining of property “from another”—a Hobbs Act conspiracy requires proof that the alleged conspirators agreed to obtain property from someone outside the conspiracy. The Fourth Circuit and Supreme Court affirmed his conviction. A defendant may be convicted of conspiring to violate the Act based on proof that he reached an agreement with the owner of the property in question to obtain that property under color of official right. The general federal conspiracy statute, under which Ocasio was convicted, makes it a crime to “conspire . . . to commit any offense against the United States.” It is sufficient that the conspirator agreed that the underlying crime be committed by a member of the conspiracy capable of committing it. Ocasio and the shopowners shared a common purpose that officers would obtain property “from another” (shopowners) under color of official right. The Court noted that its decision does not transform every bribe of a public official into conspiracy to commit extortion. View "Ocasio v. United States" on Justia Law

Defendant appealed his conviction and sentence for sixteen counts of wire fraud under 18 U.S.C. 1343. Defendant's conviction stemmed from his involvement in a scheme to obtain government procurement contracts set aside by the Small Business Administration for minority-owned small businesses. The court concluded that sufficient evidence supports the convictions. However, the court concluded that government contracts awarded through an affirmative action contracting program are not “government benefits” under USSG 2B1.1 cmt. n.3(F)(ii), such that procurement frauds involving those contracts are properly treated under the special government benefits rule for loss calculation rather than under the general rule. Therefore, the district court should have applied the general rule for loss calculation in this case. The court concluded that the loss amount should have reflected not the total contract price, but rather the contract price less the fair market value of services rendered by the Joint Venture to the procuring agencies. By treating the entire face value of the contracts as loss for purposes of section 2B1.1 and not deducting the fair market value of services rendered by the Joint Venture, the district court procedurally erred in calculating the Guidelines range in this case. Accordingly, the court vacated the sentence and remanded for resentencing. View "United States v. Harris" on Justia Law

Defendant, a member of the New York City Council, was convicted of two counts of wire fraud, 18 U.S.C. 1343, 1346; two counts of violating the Travel Act, 18 U.S.C. 1952; and one count of conspiracy to commit both substantive offenses, 18 U.S.C. 371. Defendant's convictions stemmed from his participation in two bribery schemes: 1) defendant accepted bribes in exchange for promising to funnel City funds to the bribe payers (Discretionary Funds Scheme) and 2) defendant was paid to help his co‐defendant, Malcolm A. Smith, bribe Republican Party officials to obtain what is known in New York as a Wilson‐Pakula certificate or authorization, which would have enabled Smith, a Democrat, to compete for the nomination of the Republican Party in the New York mayoral election (Wilson-Pakula Scheme). The court held that there was sufficient evidence to support a finding that defendant took part in the Discretionary Funds Scheme with the intent required to sustain his convictions, and that defendant’s Wilson‐Pakula Scheme conduct violated both the Travel Act and the honest services fraud statute. The court considered defendant's remaining arguments and found them to be without merit. Accordingly, the court affirmed the judgment. View "United States v. Halloran" on Justia Law

American Litho was owed $113,772 by Union Transport (Las Vegas), a large amount by Alcan (Wisconsin), and $146,167 by Concrete Media (New Jersey). Dziuban, American's part-owner, unsuccessfully attempted to obtain repayment through legal means, including litigation. In 2010, Dziuban contacted Orlando, a salesman at American, to help collect the debts. Orlando recruited Carparelli and Brown. The four men implied, upon meeting, that they would use physical violence and threats. Dziuban promised half of any money they collected. The men began travelling and making threats. McManus eventually joined them. Brown began cooperating with the FBI. In 2013, acting under the government’s instructions, Brown told Carparelli that he had received a call from New Jersey state police. This prompted recorded conversations between Orlando, Carparelli, and Brown, in which they discussed the scheme and attempted to cover it up. Dziuban, Orlando, Brown, Iozzo, Carparelli, and McManus were charged with Hobbs Act violations, 18 U.S.C. 1951; Orlando and McManus were charged with conspiracy to commit extortion; McManus was also charged with attempted extortion. A jury convicted Orlando and McManus. The court sentenced McManus to two concurrent sentences of 60 months and sentenced Orlando to 46 months imprisonment. The Seventh Circuit affirmed McManus’s conviction and Orlando’s sentence. View "United States v. Orlando" on Justia Law

The defendant was convicted for defrauding Medicare and Blue Cross Blue Shield by submitting claims for reimbursement for respiratory therapy that had not been provided and was sentenced to 75 months in prison and also ordered to pay restitution of some $2.5 million. Three days after the jury rendered its guilty verdict, a juror sent the court a three-page “report on jury misconduct.” It was a follow-on to a phone call, in which he’d told a staff member that he wanted to retract his vote to convict. The Seventh Circuit affirmed, rejecting his argument that his constitutional right to be tried by an impartial jury was violated because the judge refused to order the jurors to return to court for a hearing about alleged juror misconduct or to order a new trial. The court also upheld the application of a four-level enhancement for crimes involving more than 50 victims, U.S.S.G. 2B1.1(b)(2)(B), and a two-level increase in his offense level for abuse of a position of public or private trust. The patients, whose identification information was used, were victims, although they suffered no financial loss. View "United States v. Roy" on Justia Law

Bankston was charged wire fraud, mail fraud, bank fraud, money laundering, identity theft, and a false statement offense in connection with three separate fraudulent schemes. In each scheme, she unlawfully obtained the personal identification information of individuals and used it to defraud commercial banks and the state and federal government. Before trial, Bankston wrote a letter to the judge complaining of a disagreement with her attorney: Bankston wanted to present as a defense her theory that evidence recovered from her home had been planted by a federal agent. Based on the letter, Count 23 charged Bankston with making false statements in matters within the jurisdiction of the judiciary, 18 U.S.C. 1001. The Sixth Circuit vacated her Count 23 conviction and remanded for resentencing, affirming her other convictions, despite claims of insufficient evidence, judicial bias, prosecutorial misconduct, ineffective assistance, and invalid waiver of counsel. Bankston’s Count 23 conduct did not clearly constitute a crime: “judicial function exception” applies when the defendant was a party to a judicial proceeding, his statements were submitted to a judge, and his statements were made in that proceeding. View "United States v. Bankston" on Justia Law

Defendant pleaded guilty to wire fraud conspiracy and aggravated identity theft. On appeal, defendant challenged the district court's application of a six-level enhancement under USSG 2B1.1(b)(2)(C) because the offense involved 250 or more victims, and a four-level enhancement under USSG 3B1.1(a) because defendant was an organizer or leader of a criminal activity that involved five or more participants or was otherwise extensive. The court concluded that defendant's sentence is procedurally reasonable and the district court properly applied the enhancements at issue. The court remanded for the limited purpose of allowing the district court to amend the written judgment to conform it to the oral sentence. The court otherwise affirmed. View "United States v. Jesrum" on Justia Law

Defendant was convicted of one count of conspiracy to commit health care fraud, seven counts of health care fraud, and seven counts of aggravated identity theft. Defendant was sentenced to 135 months' imprisonment and ordered to pay $599,128.02 in restitution. The court concluded that there was sufficient evidence to convict defendant of the charges, and the district court did abuse its discretion in denying defendant's motion for a new trial without first holding an evidentiary hearing where defendant's arguments rest on either non-exculpatory testimony or conclusory assertions. However, the court concluded that the district court abused its discretion by calculating the total loss suffered by the victims because the district court procedurally erred by failing to credit defendant for the fair market value of legitimate health care services that his hospitals rendered to patients. Therefore, the court vacated defendant's sentence, as well as the restitution order. The court remanded for resentencing. View "United States v. Mahmood" on Justia Law