Justia White Collar Crime Opinion Summaries

A supervising building inspector was convicted of conspiracy to commit bribery, 18 U.S.C. 371, and two counts of making false statements to federal agents, 18 U.S.C. 1001(a)(2) and was sentenced to a total of 60 months' imprisonment. The Seventh Circuit affirmed. The district court properly allowed testimony about the 2005 gift list of a city businessman; the testimony was probative of intent and not so prejudicial as to cause the jury to decide the case on an improper basis. Although the court erred by admitting the list itself as a business record, the error was harmless. The court properly barred recordings between defendant and one of the witnesses who testified against him, which contained self-exculpatory statements. The court properly held defendant accountable for more than $112,500 in bribes, which resulted in an eight-level increase to the USSG offense level. View "United States v. Reese" on Justia Law

Defendants were convicted of honest services fraud, 18 U.S.C. 1346, mail fraud ("traditional" fraud), 18 U.S.C.1341, and conspiracy, 18 U.S.C. 371, based on a defendant (city councilman) taking official actions in exchange for gifts. Their appeal claimed that the 2010 Supreme Court decision, Skilling v. U.S., affected the law of honest services fraud. The Third Circuit vacated and remanded. While the evidence was sufficient to convict on each count, the Skilling decision made jury instructions on honest services fraud incorrect. The jury should have been instructed on a bribery theory but not on a conflict-of-interest theory. The error was not necessarily harmless; the law of honest services fraud depends on intent and finding intent requires a jury to make reasonable inferences. Evidence of honest services fraud overlapped substantially evidence submitted on traditional fraudView "United States v. Wright" on Justia Law

The former mayor and the head of the engineering department were convicted of conspiring to embezzle and embezzling government funds, based on use of government funds and government employees to renovate the mayor's house. The mayor claimed that he was unaware of the scheme. The district court gave the jury a conscious avoidance instruction. The mayor had an initial offense level of 10 under the Guidelines, but the court applied enhancements for obstruction of justice, leadership role, and abuse of a position of trust, for a total offense level of 18. With a criminal history level of one, the guidelines range was 27-33 months' imprisonment. The district court imposed a sentence of 60 months, a $60,000 fine, more than $14,000 in restitution, a $200 special assessment, and three years of supervised release. The Seventh Circuit affirmed. The district court was within its discretion in issuing an ostrich instruction, in applying sentencing enhancements, and in its upward departure from the guidelines. View "United States v. Pabey" on Justia Law

Defendant, former commissioner in charge of the Environmental Services Department of Jefferson County, was convicted of charges related to federal-funds bribery for accepting cash from an engineering firm that contracted with the county for a sewer reconstruction project. Defendant subsequently appealed, challenging the sufficiency of the evidence supporting his convictions and the reasonableness of his prison term. The court held that the same evidence that supported defendant's federal-funds bribery convictions supported his conspiracy conviction. The court also held that defendant's sentence was procedurally and substantively reasonable. Accordingly, the judgment was affirmed. View "United States v. White" on Justia Law

The United States Commodity Futures Trading Commission (CTFC) and the Oklahoma Department of Securities brought suit against multiple corporate defendants (including Prestige Ventures Corporation) and several individuals, Kenneth Lee and his wife and two sons, Simon Yang. The Lees and Mr. Yang appealed pro se a district court's order entered in favor of CTFC. In their complaint, the CTFC alleged that defendants operated a Ponzi scheme that bilked at least 140 investors out of millions of dollars, in violation of a number of provisions of the Commodity Exchange Act and the Oklahoma Uniform Securities Act of 2004. Plaintiffs also alleged that millions of dollars were funneled to Defendants from Prestige by Mr. Lee, in cash and in the form of houses, cars, and boats. The court authorized a receiver to take possession of and sell the houses and boats. further, the court entered a broad array of permanent injunctive orders prohibiting defendants from further dealings in commodity futures and transacting investment-related business in Oklahoma. The court further ordered Defendants to pay over $5 million in restitution and a number of penalties, and ordered Defendants to disgorge large sums of cash. Each of the Lees filed a substantively identical motion for reconsideration of the Order. Having considered these issues and having reviewed the briefs, the record,and the applicable law in light of the applicable review standards, the Tenth Circuit affirmed the judgment of the district court for substantially the reasons stated in the district court’s order of summary judgment and its Order. View "CFTC, et al v. Lee, et al" on Justia Law

This case arose out of the attempts of two federal agencies to disgorge funds from Janet Schaberg, the ex-wife of alleged Ponzi-scheme artist Stephen Walsh. Schaberg subsequently appealed from a memorandum decision and orders of the district court granting preliminary injunctions freezing Schaberg's assets. In response to certified questions, the New York Court of Appeals held that (a) proceeds of a fraud could constitute marital property, and (b) when part or all of the marital estate consisted of the proceeds of fraud, that fact did not, as a matter of law, preclude a determination that a spouse paid fair consideration according to the terms of New York's Debtor and Creditor Law section 272. The court held that because those rulings undermined the key legal assumptions supporting the preliminary injunctions, the court vacated those orders, without prejudice to further proceedings applying the legal principles pronounced by the New York Court of Appeals. View "Commodity Futures Trading Comm'n v. Walsh, et al.; SEC v. WG Trading Investors, L.P., et al." on Justia Law

The former Pennsylvania State Senator was sentenced to 55 months' imprisonment, a $411,000 fine, and $2,340,839 in restitution, after conviction on 137 counts of fraud, tax evasion, and obstruction of justice. His former aide was sentenced to imprisonment of one year and one day, a $45,000 fine, and joint and several restitution of up to $792,802, after conviction on 45 counts. The Third Circuit affirmed the senator's conviction, but vacated both sentences. The court acted within its discretion in admitting evidence concerning the state Ethics Act. The content and enforcement of the Act were relevant to the claim that there were rules that the senator broke repeatedly, that those rules were clear enough for him to understand, and to show that he was deceiving the Senate when he misrepresented or omitted aspects of his actions and expenditures to avoid the perception that he had violated those rules. A juror's social media comments did not merit a new trial, nor did another juror's exposure to excluded evidence. The district court's failure to calculate a final guidelines range left the court unable to review the procedural and substantive bases of the sentence and affects the substantial rights of the parties; the court abused its discretion with respect to several aspects of sentencing. View "United States v. Fumo" on Justia Law

Doctors filed suit, alleging violations of the False Claims Act, 31 U.S.C. 3279 and the Michigan Medicaid False Claim Act, as qui tam relators on behalf of the United States/ The claimed that the business defrauded the government by submitting Medicare and Medicaid billings for defective radiology studies, and that the billings were also fraudulent because the business was an invalid corporation. The federal government declined to intervene. The district court dismissed. Sixth Circuit affirmed. The doctors failed to identify any specific fraudulent claim submitted to the government, as is required to plead an FCA violation with the particularity mandated by the FRCP. A relator cannot merely allege that a defendant violated a standard (in this case, with respect to radiology studies), but must allege that compliance with the standard was required to obtain payment. The doctors had no personal knowledge that claims for nondiagnostic tests were presented to the government, nor do they allege facts that strongly support an inference that such billings were submitted.View "Chesbrough v. VPA, P.C." on Justia Law

Appellant was the target of a grand jury investigation seeking to determine whether he used secret Swiss bank accounts to evade paying federal taxes. The district court granted a motion to compel appellant's compliance with a grand jury subpoena dueces tecum demanding that he produce certain records related to his foreign bank accounts. The court declined to condition its order compelling production upon a grant of limited immunity, and pursuant to the recalcitrant witness statute, 28 U.S.C. 1826, held appellant in contempt for refusing to comply. The court held that because the records sought through the subpoena fell under the Required Records Doctrine, the Fifth Amendment privilege against self-incrimination was inapplicable, and appellant could not invoke it to resist compliance with the subpoena's command. The court also held that because appellant's Fifth Amendment privilege was not implicated, it need not address appellant's request for immunity. Accordingly, the judgment of the district court was affirmed. View "In re: Grand Jury Investigation of M.H." on Justia Law

The United States brought this civil action under 26 U.S.C. 7408 to enjoin defendant from promoting several fraudulent tax schemes. After a court trial, the district court permanently enjoined defendant from promoting his schemes, ordered him to advise the IRS of any tax arrangements or business entities formed at his discretion, and required him to provide a copy of its order to his clients. On appeal, defendant argued that the injunction was not supported by adequate factual findings and legal conclusions, and that it was overbroad, an impermissible delegation of Article III power, and an unconstitutional prior restraint. The court rejected defendant's hypertechnical criticisms of the district court's order where section 6700 was a linguistically complex and intricate statute and where the district court need not include the entire statutory language in each of its findings and conclusions. Therefore, the court held that the district court's exhaustive order more than satisfied each of the requirements in section 6700 and affirmed the judgment of the district court.