Justia White Collar Crime Opinion Summaries

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.

Defendant was convicted of four counts of tax evasion and sentenced to 18 months imprisonment. Defendant appealed his convictions, arguing that the government constructively amended the indictment through the evidence presented at trial; the instructions erroneously defined "taxable income" and "good faith"; and the evidence was insufficient to support his convictions. The government appealed defendant's sentence, contending that the district court erroneously relied on a fact rejected by the jury in imposing a sentence below the applicable Sentencing Guidelines range. The court held that neither a constructive amendment nor a variance occurred; the jury was properly instructed and defendant's arguments to the contrary were rejected; and there was sufficient evidence for the jury to convict defendant. The court also held that the district court did not commit a procedural error and that the sentence was substantively reasonable. Accordingly, the judgment of the district court was affirmed.

Defendant was convicted of six counts of bank fraud and sentenced to 80 months imprisonment where defendant recruited other individuals to cash counterfeit checks. At issue was whether the district court erred by applying a two-level increase for possession or use of any device-making equipment or the production of trafficking of any unauthorized access device or counterfeit device under U.S.S.G. 2B1.1(b)(1) and a three-level increase for his aggravating role as a manager or supervisor under U.S.S.G. 3B1.1(b). The government conceded that the district court erred in applying the section 2B1.1(b)(1) enhancement where the enhancement could not be applied to offenses that involved a transfer originated solely by paper instrument. Therefore, the court held that the district court erred in applying the section 2B1.1(b)(1) enhancement. The court held, however, that the district court properly applied the aggravating role enhancement under section 3B1.1(b) where the recruited individuals knew or were willfully blind to the fraud. Accordingly, the court affirmed in part and reversed in part, remanding for resentencing.

Defendant was convicted of failing to account for and pay employment taxes under 26 U.S.C. 7202, sentenced to 48 months imprisonment and fined $75,000. Defendant appealed his conviction, the calculation of loss to the government, and his fine. The court held that the district court did not err under Federal Rule of Evidence 404(b) in admitting evidence relating to defendant's compliance with Minnesota tax law. The court held however, that the district court made insufficient findings to conclude that defendant had violated section 7206(2). Accordingly, the court vacated the calculation of loss and remanded for resentencing on the existing record. Because the court remanded for resentencing, it did not reach defendant's remaining arguments.

Defendant pled guilty to one count of securities fraud, alleged in the indictment to be a violation of 15 U.S.C. 78j(b), 78ff, and 17 C.F.R. 240.10(b)-5. At issue was whether the district court erred in holding that defendant was not entitled to the protection of section 78ff(a) because he pled guilty to a statutory offense and the no-knowledge provision was inapplicable to people convicted of violating criminal securities law. The court, reading the plain language of the statute, held that the district court erred when it determined that defendant's guilty plea to a violation of section 78j(b) prevented him from asserting the no-knowledge defense. Thus, defendant was entitled to assert the no-knowledge defense to imprisonment at sentencing. The court held, however, that the district court did not reach the question of whether defendant had met his burden of showing no knowledge under Rule 10(b)-5 and as such, the issue was remanded to the district court for consideration.

Defendant pleaded guilty to conspiracy to commit money laundering related to a massive Ponzi scheme and was sentenced to 130 months imprisonment. At issue was whether the district court failed to adequately explain the sentence, failed to properly consider the sentencing factors set forth in 18 U.S.C. 3553(a), assigned too much significance to irrelevant factors, and imposed a sentence greater than necessary to achieve federal sentencing goals. The court held that the district court engaged in a sufficiently detailed explanation of its reasons for imposing the sentence and did not commit procedural error. The court also held that the district court properly considered and weighed the evidence and therefore, defendant's sentence was not substantively unreasonable. Accordingly, the court affirmed the sentence.

Appellant, the finance officer for the Standing Rock Housing Authority of the Standing Rock Sioux Tribe, pleaded guilty to theft concerning programs receiving federal funds and was sentenced to the statutory maximum of 120 months imprisonment. At issue was whether the district court committed procedural error when it departed upwards from the advisory U.S. Sentencing Guidelines range, U.S.S.G. 4A1.3, and when it considered ethnicity and other improper factors during sentencing. Also at issue was whether the sentencing was substantively unreasonable. The court held that the district court did not engage in impermissible double counting by departing upwards to criminal history category IV where the district court discussed the nature and circumstances of the offense and the history and characteristics of appellant, the need to avoid unwarranted sentencing disparities between similar defendants, and the need to provide restitution for the victims. The court also held that the sentence was substantively reasonable where any comments regarding race or national origin were not offered as an explanation for imposing sentence but reflected the district court's disagreement with appellant's counsel that the Guidelines were "fair" and that a Guidelines sentence of 70 to 87 months imprisonment was appropriate as a matter of law; where the district court's statements expressed its frustration about its inability to order restitution for an amount closer to the total loss of money rather than a comment on appellant's socio-economic status; and where the district court did not use appellant's lack of an addiction to justify the sentence, but rather to describe his state of mind as he carried out the embezzlement scheme.

Appellant pled guilty to wire fraud and was sentenced to 108 months imprisonment. Appellant argued that his son, who suffered from muscular dystrophy, required around-the-clock care that his wife could not provide by herself. At issue was whether the district court, in consideration of appellant's caretaker duties, erred in denying his request for a downward departure under U.S.S.G. 5H1.6, failed to properly consider the 18 U.S.C. 3553(a) factors, and imposed an unreasonable sentence by declining to vary below the Guidelines range. The court held that the district court correctly explained at sentencing that family circumstances were not a factor ordinarily considered when sentencing a defendant under the Guidelines. The court also held that the district court clearly considered appellant's son's medical condition and appellant's role as a caretaker as relevant factors under section 3553(a). The court further held that the sentence was not substantively unreasonable where the district court thoroughly considered appellant's role in caring for his son and therefore, affirmed the sentence.

Appellant, a mortgage broker, was convicted of six counts of mail fraud and one count of conspiracy to commit mail fraud in connection with an equity-stripping scheme that convinced financially desperate homeowners to refinance or sell their homes to him where he would clandestinely intercept their proceeds checks and deposit them into his bank account. Appellant raised five issues in challenging his convictions and sentence. The court affirmed the convictions and held that the district court properly denied appellant's motion to suppress evidence seized from a search of his residence where the detective's knowledge of information regarding victims provided sufficient indicia of probable cause to make his search for documents objectively reasonable and where the warrant satisfied the Fourth Amendment's particularity requirement. The court also held that the district court properly denied his motion for a judgment of acquittal on counts three, four, five and six. The court further held that it need not decide whether the district court abused its discretion in refusing the proffered jury instruction where the error was harmless and a rational jury would have found that appellant's fraudulent scheme contemplated the use of the mails. The court finally held that appellant's variance argument was without merit where the indictment charged that appellant's scheme was to defraud homeowners out of their equity and this was precisely what the government's evidence proved. As to sentencing, the court held that the district court did not exceed the range of choice dictated by the facts and that appellant's sentence of 270 months imprisonment was not substantively unreasonable.