Justia White Collar Crime Opinion Summaries

The United States has a $60 million judgment against the defendant, who fled the country, for Medicare and Medicaid fraud. The government served a writ of garnishment (28 U.S.C. 3205) against his interest in a Georgia company, which paid secured creditors, liquidated its assets, and placed slightly more than $4 million in escrow for the claim. Creditors of the Georgia company claimed $175,000. The district court ruled in favor of the government because the creditors had not obtained a writ. The Seventh Circuit vacated and remanded, reasoning that the creditors' claim was against the Georgia company, not against the defendant, and that the defendant's equity interest in the company (which was reachable by the government) may have been subordinate to the interests of creditors. The court noted many unanswered questions about the creditors' interest in the company.

The Commodity Futures Trading Commission sued operators of commodity trading pools for fraud and related violations of the Commodity Exchange Act. Following earlier proceedings in the Seventh Circuit, the district court entered judgment against remaining defendants. Defendantâs assets of $104 million, 39% of the amount owed the investors in the pools, were placed in the control of a receiver. The district court approved the receiverâs proposed allocation of the assets among the investors, which excluded a claim filed by an Andorran bank as untimely and rejected a valuation claim by GAMAG. The Seventh Circuit affirmed. The district court acted within its discretion in disallowing the bankâs claim, based on the bankâs neglect in pursuing its claim and the difficulty in recalculating the shares of the investors. GAMAGâs claim to be a creditor, rather than a shareholder, was properly rejected; its funds were commingled with and managed with the funds of the other investors and there was no difference in the level of risk.

The doctor was convicted of conspiring to defraud the government and Medicare fraud (42 U.S.C. 1320a) for accepting a salary from the hospital in return for referring patients and sentenced to 72 months imprisonment followed by two years of supervision and to payment of $497,204 in restitution. The Seventh Circuit affirmed. The court did not err in refusing to admit substantive reports from meetings or the minutes of the meetings, although it allowed the government to use the minutes to establish the doctor's non-attendance at meetings. The doctor was allowed to argue that certain reports concerning his services were made and tendered during the meetings. Upholding a jury instruction, the court stated that nothing in the Medicare fraud statute implies that only the primary motivation for remuneration is to be considered and that the conviction is valid even if the payments were, in part, compensation for services. Findings concerning the level of loss supported the sentence.

The defendant, convicted of financial crimes involving his operation of an insurance brokerage, was sentenced to serve 121 months, ordered to pay $841,527 in restitution, and (following a remand) ordered to forfeit $15 million plus his interest in the racketeering enterprise. In 2010 the Supreme Court decided Skilling v. United States, limiting the "honest services fraud" theory to apply only to a defendant involved in either bribery or a kickback scheme. The defendant appealed the inclusion of "honest services" fraud in jury instructions at his trial. The Seventh Circuit affirmed, holding that the jury would have convicted the defendant without the instruction, but remanded for consideration of whether an honest services conviction affected sentencing.

After pleading guilty to mail fraud, 18 U.S.C. 1341, the defendant challenged a two-level increase in his sentence, based on use of "sophisticated means" and theft of more than $1 million. The Seventh Circuit affirmed. Over the course of seven years, the defendant bilked at least 17, mostly elderly or financially distressed, victims out of more than $2 million; he posed as an attorney, a CPA, and a real estate agent and prepared "significantly more elaborate than usual" fraudulent instruments.

The defendant was convicted of wire fraud in connection with a fraudulent investment and mortgage brokerage business and sentenced to 144 months. The Seventh Circuit affirmed. Evidence turned over by the defendant's wife, who was the former corporate secretary and one of the business organizers, was properly admitted; she was not an agent for the government, which was unaware that she was collecting evidence, but acted for private reasons. It does not matter whether she had a right to take the documents, but the defendant did, in fact, share custody of the records with his wife and she had the right to consent to a search. There was sufficient evidence that the defendant intended to defraud his victims and the above-guidelines sentence was reasonable in light of evidence of criminal history and that the defendant was planning new fraudulent schemes.