Justia White Collar Crime Opinion Summaries

Defendant pled guilty to several counts of mail and wire fraud, was convicted by a jury of violations of federal campaign finance law, and was sentenced to 292 months in prison. Defendant appealed the resulting judgment of conviction on various grounds, including that the loss calculated for purposes of the Sentencing Guidelines improperly included promised returns on defendant's victims' investments. The court affirmed the district court in all respects, and held that (1) defendant waived any statute of limitations challenge to the indictment by pleading guilty; (2) the district court's admission of the Ponzi scheme evidence was not plain error; (3) the district court did not err by calculating the intended loss amount under the Guidelines to include the loss of putative profits that victims reinvested in defendant's Ponzi scheme; (4) the district court did not abuse its discretion when weighing the factors relevant to defendant's sentence; and (5) under the circumstances of the case, the appointment of a new attorney for sentencing was not required. View "United States v. Hsu" on Justia Law

Defendant was convicted of numerous offenses relating to her involvement in a fraudulent "high-yield investment program." Before defendant was indicted and before the applicable statute of limitations had run, the district court granted a government application to suspend the statute of limitations pursuant to 18 U.S.C. 3292 while the government sought the assistance of the Hungarian government in recovering records relating to transfers of the scheme's proceeds into Hungarian bank accounts. On appeal, defendant argued, among other things, that the indictments should have been dismissed because insufficient evidence supported the district court's order to suspend the running of the statute of limitations. The court held (1) that the evidence in this case was sufficient to support the district court's order; (2) that section 3292 did not require that the foreign evidence sought be necessary for an indictment, nor that it be obtainable only through an official request to a foreign government; and (3) that district courts could rely on ex parte proceedings when deciding to issue section 3292 orders. Accordingly, the judgment was affirmed. View "United States v. Lyttle" on Justia Law

Defendants appealed from judgments following a jury trial that resulted in their convictions for racketeering and related offenses. Defendants all contended, inter alia, that the district court erred in failing to instruct the jury on the relatedness and continuity factors required to establish a pattern of racketeering under the Racketeering Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1962(c) and (d). The court concluded that the district court's RICO instruction was legally erroneous and this error was prejudicial with regard to Chris Cain. With regard to the racketeering convictions of David Cain, Jr. and Jamie Soha, however, applying a plain error standard of review, the court concluded that it was not reasonably likely that a properly instructed jury would have failed to find a pattern of racketeering. Accordingly, the court reversed the RICO convictions with regard to Chris Cain only and remanded for resentencing. The court affirmed the convictions in all other respects. View "United States v. Cain, Jr., et al." on Justia Law

Defendants, four executives of Gen Re and one of AIG, appealed from convictions of conspiracy, mail fraud, securities fraud, and making false statements to the SEC. The charges arose from an allegedly fraudulent reinsurance transaction between AIG and Gen Re that was intended to cure AIG's ailing stock price. Defendants appealed on a variety of grounds, some in common and others specific to each defendant, ranging from evidentiary challenges to serious allegations of widespread prosecutorial misconduct. The court held that most of the arguments were without merit, but defendants' convictions were vacated because the district court abused its discretion by admitting the stock-price data. View "United States v. Ferguson, et al." on Justia Law

Defendant, former Majority Leader of the New York State Senate, appealed his conviction for honest services mail fraud, arising from defendant's failure to disclose conflicts of interest related to his receipt of substantial payments from individuals seeking to do business with the State. While defendant's appeal was pending, the Supreme Court decided United States v. Skilling, and held that 18 U.S.C. 346, the honest services statute, criminalized only fraudulent schemes effectuated through bribes or kickbacks and did not criminalize mere failures to disclose conflicts of interest. At issue was whether defendant could be retried under the standard announced in Skilling on certain counts. Although the court held that Skilling required the court to vacate the convictions on Counts Four and Eight, because the court's review of the record convinced it that the government adduced sufficient evidence under the Skilling standard, double jeopardy did not bar retrial on those two counts. The court also held that double jeopardy did not bar retrial on Count Three because, regardless of the sufficiency of the evidence, the Double Jeopardy Clause did not preclude a retrial on a charge that resulted in a hung jury. Accordingly, the court vacated the counts of conviction and remanded for further proceedings. View "United States v. Bruno" on Justia Law

Defendant appealed from a judgment convicting him of (1) conspiracy to violate the Iranian Transaction Regulations (ITR) and operate an unlicensed money-transmitting business; (2) violating the ITR; (3) operating an unlicensed money-transmitting business; and (4) two counts of making false statements in response to government subpoenas. On appeal, defendant argued that the district court erred in several respects when instructing the jury on the conspiracy, ITR, and money-transmitting counts; defendant was entitled to a new trial on the false statement counts because the government constructively amended the indictment; the government committed misconduct in its rebuttal summation, which he claimed necessitated a new trial on all counts; and defendant should be resentenced because the district court miscalculated the applicable offense level. The court reversed Count One to the extent it alleged a violation of the ITR as an overt act and vacated and remanded to the extent it was based on the money-transmission violation as an overt act; reversed Count Two; vacated and remanded Count Three; and affirmed Counts Four and Five. View "United States v. Banki" on Justia Law

Defendant appealed his conviction for visa fraud and conspiracy to commit visa fraud, as well as his sentence. Defendant had requested specific jury instructions with respect to the government's burden of proof regarding his knowledge of the fraud for which he was indicted. The district court denied these requests and instead gave a general instruction on acting "knowingly." Defendant challenged those denials as well as the sufficiency of the evidence presented at trial. The court found these challenges meritless. In calculating defendant's Guidelines sentencing range, the district court relied on four enhancements, three of which defendant challenged on appeal. Though the basis of the district court's application of the leader/organizer enhancement could have been more fully elaborated, the court found that the record supported its application here. Regarding the obstruction-of-justice and number-of-document enhancements, however, the court agreed with defendant that the evidence was insufficient to sustain their use in this case. Therefore, the court vacated defendant's sentence. Defendant also challenged the order of restitution imposed by the district court under the Mandatory Victim Restitution Act (MVRA), 18 U.S.C. 3663A. Because the court found the record evidence insufficiently specific to demonstrate that each client to whom the court ordered restitution was a "victim" of the fraud, the court vacated the restitution order. Accordingly, the court remanded the case for resentencing, including reconsideration of the restitution award. View "United States v. Archer" 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

Defendant, James Gansman, appealed from a judgment convicting him of insider trading under the so-called "misappropriation theory." At issue was whether the district court erred in declining to adopt an instruction proposed by Gansman setting forth a theory of the defense based in part on SEC Rule 10b5-2, 17 C.F.R. 240.10b5-2. The court held that Gansman was entitled to assert a defense theory that he did not have the requisite intent to commit securities fraud, and that in defining the nature of his relationship with Donna Murdoch, a woman with whom he was having an affair, to the jury, he had the right to use language found in Rule 10b5-2. The court held that, nevertheless, Gansman was not entitled to a new trial in the circumstances presented because the slightly modified instruction given by the district court was legally sufficient. Gansman raised a number of other challenges to his conviction, all of which were without merit. Accordingly, the court affirmed the judgment of the district court. View "United States v. Gansman, et al." on Justia Law

This case stemmed from appellant's participation in the Bayou Hedge Fund Group (Bayou), a classic Ponzi scheme masked as a group of domestic and offshore hedge funds. Appellant appealed from his sentencing, following a plea of guilty to misprision of felony in violation of 18 U.S.C. 4. At issue was whether the district court's order of restitution in the amount of $60 million was improper because it relied on events occurring outside the relevant time period and the putative victims' losses were neither directly nor proximately caused by his actions as required by the Mandatory Victims Restitution Act of 1996 (MVRA), 18 U.S.C. 3663A. The court found no error, much less plain error, in the district court's use of appellant's fraudulent 2003 faxes at sentencing. The court also found no error in the district court's conclusion that appellant's failure to report the Bayou fraud was both the direct and the proximate cause of the victim investors' losses. Accordingly, the judgment was affirmed. View "United States v. Marino" on Justia Law