Articles Posted in U.S. 10th Circuit Court of Appeals

by
Defendant Vicki Dillard Crowe was convicted by a jury on eight counts of mail fraud, and eight counts of wire fraud for her participation in a mortgage fraud scheme. The district court sentenced defendant to sixty months' imprisonment and was ordered her to make restitution. Defendant appealed, arguing that the district court erred in calculating the amount of loss associated with her crimes for purposes of U.S.S.G. 2B1.1(b), and in denying her motion for new trial, which alleged ineffective assistance on the part of her trial counsel. Defendant's challenge to the district court's calculation of loss raised an issue of first impression for the Tenth Circuit: whether the concept of reasonable foreseeability applied to a district court’s calculation of the "credits against loss" under 2B1.1(b). The Court adopted the Second Circuit’s reasoning in "United States v. Turk," (626 F.3d 743 (2d Cir. 2010)), and held that the concept of reasonable foreseeability applies only to a district court's calculation of "actual loss" under 2B1.1(b), and not to its calculation of the "credits against loss." The Court affirmed defendant's sentence. View "United States v. Crowe" on Justia Law

by
The issue before the Tenth Circuit in this case stemmed from a civil-enforcement action brought by the Securities and Exchange Commission ("SEC") against Defendant-Appellant Ralph Thompson, Jr., in connection with an alleged Ponzi scheme Thompson ran through his company, Novus Technologies, L.L.C. ("Novus"). The district court granted summary judgment in favor of the SEC on several issues, including the issue of whether the instruments Novus sold investors were "securities." Thompson's single issue on appeal was that the district court ignored genuine disputes of material fact on the issue of whether the Novus instruments were securities, and that he was entitled to have a jury make that determination. After careful consideration, the Tenth Circuit concluded that under the test articulated by the U.S. Supreme Court in "Reves v. Ernst & Young" (494 U.S. 56 (1990)), the district court correctly found that the instruments Thompson sold were securities as a matter of law. View "SEC v. Thompson" on Justia Law

by
Plaintiff-Appellee John Niemi and several investors intended to build a large luxury ski condominium complex. Niemi was unable to find traditional financing for the project, and turned to Florida businessman, Defendant Michael Burgess. Burgess claimed to represent a European investor, Defendant-Appellee Erwin Lasshofer. As part of the funding scheme, plaintiff had to pay certain fees and pledge a collateral deposit before $250 million dollars would be loaned to him (and his business partners/investors) for the condo project. For his part, Burgess was eventually convicted and sentenced to federal prison for fraud and money laundering. Plaintiffs sued seeking return of the money they pledged, alleging the lost loan irreparably damaged its business, caused millions in lost profits, and sent its other real properties into foreclosure. Burgess maintained he took direction from Lasshofer; Lasshofer claimed he unwittingly did business with a con man. The district court granted plaintiffs' motion for a preliminary injunction effectively freezing Lasshofer's worldwide assets pending final judgment. Lasshofer appealed the grant of the preliminary injunction. Upon careful review, the Tenth Circuit concluded that plaintiffs, Niemi and individual investors in his condo project, lacked standing to bring suit. Therefore the district court erred in granting the injunction. The injunction was vacated and the case remanded for further proceedings. View "Niemi, et al v. Burgess, et al" on Justia Law

by
The government alleged Defendant-Appellant Richard Clark, along with other co-conspirators, manipulated shares of several penny-stocks by using false and backdated documents to make those shares publically tradable, then coordinated the trading among themselves to create the false appearance of an active market for those shares. The shares were sold after the prices surged. The conspirators laundered the proceeds through multiple bank accounts and nominees (a "pump-and-dump" scheme). Defendant was charged and convicted on multiple counts for his participation in the scheme. He appealed his conviction to the Tenth Circuit, arguing: (1) the pretrial placement of a caveat on his property violated his constitutional rights; (2) the evidence presented at trial was insufficient to support his conviction; (3) the district court erred in refusing to appoint additional or substitute counsel better versed in complex securities issues; (4) the district court erred by failing to sever his case from his co-conspirator's; and (5) his rights under the Speedy Trial Act were violated by a fourteen-month delay between filing of the indictment and the start of trial. The Tenth Circuit addressed each of Defendant's contentions in its opinion, but found no discernible error. View "United States v. Clark" on Justia Law

by
Defendant-Appellant George David Gordon was a former securities attorney convicted of multiple criminal charges relating to his alleged participation in a "pump-and-dump" scheme where he (along with others) violated the federal securities laws by artificially inflating the value of various stocks, then turning around and selling them for a substantial profit. The government restrained some of his property before the indictment was handed down and ultimately obtained criminal forfeiture of that property. On appeal, Defendant raised multiple issues relating to the validity of his conviction and sentence, and the propriety of the government’s conduct (both before and after trial) related to the forfeiture of his assets. In the end, the Tenth Circuit found no reversible error and affirmed Defendant's conviction and sentence, as well as the district court’s forfeiture orders. View "United States v. Gordon" on Justia Law

by
Defendant-Appellant Harald Dude secured a $1.9 million loan on his Aspen home from Washington Mutual Bank. He sought to borrow another $500,000 from Wells Fargo Bank. As part of the application process, Defendant completed a form for Wells Fargo's title insurance company, Plaintiff-Appellee Stewart Title Guaranty Company. The form required Defendant to disclose existing liens on property. Knowing that the company failed to discover the existence of the Washington Mutual loan, Defendant did not list the lien on Stewart Title's form. Wells Fargo proceeded with the second loan based on representations made on the form. Several years later, Defendant elected to sell the property. Stewart Title was contacted to provide title insurance. A second title search failed to reveal the Washington Mutual loan. The company again provided its disclosure form to Defendant who again omitted the Washington Mutual loan. At some point, Defendant stopped making payments on the Washington Mutual loan. Eventually it threatened the property's new owner with foreclosure. The new owner made a claim on her title insurance with Stewart Title. Honoring what it perceived to be its contractual obligations, Stewart Title paid Washington Mutual’s loan amount in full. Stewart Title then sued. A jury found Defendant liable for fraudulent misrepresentation. On appeal, Defendant and his company argued there was insufficient evidence to hold him liable. Finding sufficient evidence for which the jury could have found Defendant liable, the Tenth Circuit affirmed the verdict against him. View "Stewart Title v. Dude, et al" on Justia Law

by
At the behest of the Oklahoma Department of Securities, Oklahoma courts found early investors in a Ponzi scheme carried out by a third party to have been unjustly enriched and required disgorgement. Judgments were entered against those investors. The issue before the Tenth Circuit was whether the judgments entered against Robert Mathews, Marvin Wilcox, and Pamela Wilcox qualified as a nondischargeable debt under 11 U.S.C. 523(a)(19). The bankruptcy court decided the debts were nondischargeable because they were in violation of securities laws. The district court affirmed. Upon review, the Tenth Circuit reversed and remanded: "the Department's position conveniently serves its ends (and in the abstract) a public good. But the language of the statute cannot reasonably be stretched that far." View "Oklahoma Dept. of Securites v. Wilcox, et al" on Justia Law

by
Following trial, a jury convicted Defendant Wallace Laverne Lawrence III on: (1) seven counts of wire fraud/aiding and abetting involving the use of internet ads in a scheme to defraud persons seeking help in paying bills; (2) two counts of fraud in connection with access devices/aiding and abetting, and involving the use of stolen credit-card, debit-card, and bank numbers to obtain goods and services; and (3) one count of aggravated identity theft/aiding and abetting. Defendant appealed, challenging the sufficiency of the evidence to support his conviction on the wire fraud and identity theft counts, and objecting to the use of sentence enhancements for obstruction of justice and being a leader or organizer. Upon careful review of the district court record and Defendant's appellate brief, the Tenth Circuit found no merit to any of Defendant's arguments, and affirmed the district court's judgement. View "United States v. Lawrence" on Justia Law

by
Defendant Carri O. Adams was tried and convicted, with co-defendant Wallace Laverne Lawrence III, on seven counts of wire fraud/aiding and abetting for her role in a scheme using internet ads to defraud persons seeking help in paying bills. The district court imposed a sentence of eighteen months on each count, to run concurrently, followed by two years of supervised release on each count, also to run concurrently, and ordered Defendant to pay restitution. After timely initiation of this appeal, defense counsel moved to withdraw and filed an "Anders" brief explaining why he believed there to be no non-frivolous grounds for appeal. Upon review, the Tenth Circuit granted counsel's motion and dismissed the appeal. View "United States v. Adams" on Justia Law

by
Defendant Larry Koch appealed a jury’s verdict that found him guilty of conspiracy to commit bank fraud. Defendant admitted others committed bank fraud but disputed that he knowingly participated in their conspiracy. Alternatively, Defendant argued his conviction should have been overturned because the government failed to indict him sooner than it did. Upon review, the Tenth Circuit found sufficient evidence presented at trial with which the jury could conclude Defendant was guilty. Furthermore, Defendant's failed to carry his burden of proving he suffered actual prejudice from the time the government charged him with conspiracy and the time he went to trial. Accordingly, the Court affirmed the district court's judgment. View "United States v. Koch" on Justia Law