Justia White Collar Crime Opinion Summaries

Hughes guides hunting parties, charging $1,600 to $2,600 per person for accommodations, meals, hunting stands, field dressing, and carcass-cleaning facilities. To hunt buck in Iowa, a hunter must have a “tag.” Non-residents must enter a lottery. Hughes gave his non-resident clients tags belonging to others. After they killed a buck, Hughes falsely reported to the Iowa DNR that the tag owner had killed the buck. The bucks were transported out of state. Hughes was indicted under the Lacey Act, 16 U.S.C. 3371, which prohibits selling in interstate commerce any wildlife taken in violation of state law. The value of the wildlife determines whether the offense is a felony or a misdemeanor. The court instructed the jury: you may, but are not required to, consider, the price the wildlife would bring if sold on the open market between a willing buyer and seller; the price a hunter would pay for the opportunity to participate in a hunt for the wildlife; or Iowa’s valuation of the wildlife in state prosecutions where such wildlife is unlawfully taken. The jury found that the market value of the wildlife exceeded $350. The district court sentenced Hughes to three years’ probation, $7,000 in fines, and $1,802.50 in restitution. The Eighth Circuit reversed; the jury was not properly instructed as to the meaning of “market value.” View "United States v. Hughes" on Justia Law

Based on their involvement in promoting or selling stock for Petro America, an unregistered company that had no value, eight coconspirators were charged with conspiracy to commit securities fraud and wire fraud 18 U.S.C. 371. Hawkins was also charged with aiding and abetting securities fraud, 15 U.S.C. 77q and 18 U.S.C. 2, aggravated currency structuring, 31 U.S.C. 5324(a)(3) and (d)(2), money laundering, 18 U.S.C. 1957, and two counts of wire fraud, 18 U.S.C. 1343. Brown was also charged with securities fraud and wire fraud; Heurung was charged with two additional counts of wire fraud; and Miller was charged with money laundering and wire fraud. The others pled guilty to various charges. Hawkins, Brown, Heurung, Miller and Roper proceeded to trial. Hawkins argued that Petro America was a legitimate company and that the government was prosecuting so that it could confiscate the company's substantial assets. The others acknowledged that Petro America was a sham but claimed they had believed in good faith that the company was real and that they could promote or sell its stock. The Eighth Circuit affirmed their convictions on all counts, rejecting challenges concerning jury selection and evidentiary rulings. View "United States v. Hawkins" on Justia Law

Kaplan operated an illegal sports-booking business in New York that moved to Costa Rica in the 1990s. In 2004, the company went public on the London Stock Exchange. Before going public, Kaplan placed $98 million in trusts off the coast of France. Kaplan neglected to pay federal income or capital gains tax for the trusts for 2004 and 2005. In 2006, Kaplan was indicted for operating an illegal online gambling business within the U.S. Kaplan accepted a plea agreement, which stated: [N]othing contained in this document is meant to limit the rights and authority of the United States … to take any civil, civil tax or administrative action against the defendant. The court asked: Do you understand … that there is a difference between a criminal tax proceeding and a civil tax proceeding … that [this] doesn't preclude the initiation of any civil tax proceeding or administrative action against you? Kaplan replied, "I understand." The court sentenced Kaplan to 51 months of imprisonment, and ordered forfeiture of $43,650,000. Later, the IRS issued Kaplan a notice of deficiency with penalties, totaling more than $36,000,000. The Eighth Circuit affirmed: since Kaplan failed to file a return, the period to assess taxes never began to run; the plea agreement was unambiguous; and the government's failure to object to the Presentence Report did not prevent the government from bringing a civil tax proceeding. View "Kaplan v. Comm'r of Internal Revenue" on Justia Law

Defendants appealed from judgments following a jury trial convicting them of conspiracy to commit mail and wire fraud in connection with the sale of coins and conspiracy to engage in money laundering. The court concluded that the district court did not abuse its discretion in admitting the testimony of experts or its decision that the admission of their testimony does not warrant a new trial. The court concluded, however, that the district court failed to review de novo the recommendations of the magistrate judge for restitution and forfeiture. The court concluded that defendants' remaining arguments lacked merit. Accordingly, the court affirmed the judgment of the district court in all respects except that the matter is remanded for de novo review of the magistrate judge's reports and recommendations concerning restitution and forfeiture. View "United States v. Romano" on Justia Law

Defendants appealed from judgments following a jury trial convicting them of conspiracy to commit mail and wire fraud in connection with the sale of coins and conspiracy to engage in money laundering. The court concluded that the district court did not abuse its discretion in admitting the testimony of experts or its decision that the admission of their testimony does not warrant a new trial. The court concluded, however, that the district court failed to review de novo the recommendations of the magistrate judge for restitution and forfeiture. The court concluded that defendants' remaining arguments lacked merit. Accordingly, the court affirmed the judgment of the district court in all respects except that the matter is remanded for de novo review of the magistrate judge's reports and recommendations concerning restitution and forfeiture. View "United States v. Romano" on Justia Law

McClellan operated T&M Daycare. Nearly all of its clients participated in an Illinois program that reimbursed daycare centers. To qualify, a parent or guardian had to reside in Illinois, be employed or attend school, and have an income below a specified amount. McClellan instructed T&M’s director to falsify records so that T&M could receive state reimbursement. McClellan was also seen changing numbers on sheets submitted for state reimbursement of meals. McClellan purchased Paragon restaurant. The Department of Homeland Security had been investigating information that illegal aliens were working there. Paragon’s manager agreed to record conversations with McClellan and to provide documentary evidence that McClellan was paying wages in cash and was not reporting those wages to the state. McClellan used T&M’s account to purchase a house, where undocumented kitchen staff lived rent‐free. Recorded conversations revealed McClellan’s knowledge of the workers’ illegal status. Agents executed search warrants and found 12 workers without legal status. McClellan was charged with harboring illegal aliens, 8 U.S.C. 1324(a)(1)(A)(iii); mail fraud, 18 U.S.C. 1341, based on his submission of fraudulent employment tax reports; and engaging in a monetary transaction involving criminally derived property, 18 U.S.C. 1957, based on the transfer of T&M funds for the house purchase. The Seventh Circuit affirmed his convictions, rejecting challenges to the sufficiency of the evidence and to jury instructions. View "United States v. McClellan" on Justia Law

Before the 2008 presidential election, federal agents were investigating then-Governor Blagojevich and obtained warrants authorizing the interception of his phone calls. When Barack Obama, then a Senator from Illinois, won the election, Blagojevich was to appoint his replacement. Interceptions revealed that Blagojevich viewed the opportunity to appoint a new Senator as a bonanza. After two trials, Blagojevich was convicted of 18 crimes, including attempted extortion from campaign contributors, corrupt solicitation of funds, wire fraud, and lying to federal investigators. The district court sentenced Blagojevich to 168 months’ imprisonment. The Seventh Circuit vacated convictions on five counts, concerning Blagojevich’s proposal to appoint Valerie Jarrett to the Senate in exchange for an appointment to the Cabinet, and remanded. The court rejected a challenge to the sufficiency of the evidence, but concluded the instructions permitted the jury to convict even if it found that his only request of Obama was for a Cabinet position. A proposal to trade one public act for another, logrolling, is unlike the swap of an official act for a private payment. The instructions do not ensure that the jury found that Blagojevich offered to trade the appointment for a private salary. Because the court affirmed on most counts and concluded that the sentencing range lies above 168 months, Blagojevich is not entitled to release pending further proceedings. View "United States v. Blagojevich" on Justia Law

H & Q and the Doll Companies owned membership units of Double D Excavating, LLC. The Doll Companies opened account 121224 in the name of "Double D Excavating" and deposited a check payable to the LLC and opened account 119992 in the name of David Doll. The Doll Companies deposited into Account 121224 multiple payments that LLC customers made to the LLC and then transferred funds from Account 121224 to Account 119992, commingled funds from Account 119992 with funds belonging to the Doll Companies, and used those funds to pay Doll Companies' expenses. H&Q claims that the Doll Companies failed to give notice or obtain consent for any of those activities and represented to H&Q that the LLC was struggling financially and needed additional financial assistance. The Doll Companies contributed a portion of the funds from Account 119992 back to the LLC and, according to H&Q, represented to H&Q that these were fresh capital contributions. H&Q also invested additional capital. After discovering the Doll Companies' alleged conduct, H&Q filed suit asserting state law claims and claims under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1961. The Eighth Circuit affirmed dismissal, agreeing that the complaint did not sufficiently allege any racketeering activity. View "H & Q Props, Inc. v. Doll" on Justia Law

Defendant, convicted of access device fraud, appealed from the district court's judgment sentencing him to pay restitution both to his victims and to third-party providers of compensation for losses arising from his fraudulent activities. Because the Mandatory Victims Restitution Act (MVRA), 18 U.S.C. 3663A, limits a defendant’s restitution amount to the actual losses suffered by his victims, and because third-party providers of compensation do not qualify as “victims” whose losses may expand the defendant’s restitution liability, the district court erred in ordering defendant to pay more in restitution than the victims’ actual losses. Therefore, the court vacated the restitution order and remanded for recalculation. View "United States v. Thompson" on Justia Law

Defendant, the billionaire creator of Beanie Babies, pled guilty to one count of tax evasion after hiding assets in a Swiss bank account, made full restitution, and paid a $53.6 million civil penalty. On appeal, the government challenged defendant's sentence of two years' probation with community service, plus $100,000 fine and costs. The court concluded that the district court did not abuse its discretion by not including a term of incarceration to the sentence. In this case, the district court fully explained and supported its decision and reached an outcome that is reasonable under the circumstances. The district judge found defendant’s record of charity and benevolence “overwhelming.” Further mitigating factors - including the uncharacteristic nature of defendant’s crime, his attempt to disclose his account, his payment of a penalty ten times the size of the tax loss, and the government’s own request for a sentence well below the guidelines range - justified leniency. Accordingly, the court affirmed the judgment. View "United States v. Warner" on Justia Law