Justia White Collar Crime Opinion Summaries

Rowena Joyce Scott served as both the president of the board and general manager of Park Southern Neighborhood Corporation (PSNC), a nonprofit that owned a large apartment building in Washington, D.C. During her tenure, Scott exercised near-total control over PSNC’s finances and operations. She used corporate funds for personal expenses, including luxury items and services, and made significant cash withdrawals from PSNC’s accounts. After PSNC defaulted on a loan, the District of Columbia’s Department of Housing and Community Development intervened, replacing Scott and the board with a new property manager, Vesta Management Corporation, which took possession of PSNC’s records and computers. Subsequent investigation by the IRS led to Scott’s indictment for wire fraud, credit card fraud, and tax offenses.The United States District Court for the District of Columbia presided over Scott’s criminal trial. Scott filed pre-trial motions to suppress statements made to law enforcement and evidence obtained from PSNC’s computers, arguing violations of her Fifth and Fourth Amendment rights. The district court denied both motions. After trial, a jury convicted Scott on all counts, and the district court sentenced her to eighteen months’ imprisonment, supervised release, restitution, and a special assessment. Scott appealed her convictions, challenging the sufficiency of the evidence and the denial of her suppression motions.The United States Court of Appeals for the District of Columbia Circuit reviewed the case. The court held that Scott forfeited her statute of limitations defense by not raising it in the district court. It found the evidence sufficient to support all convictions, including wire fraud and tax offenses, and determined that Scott was not in Miranda custody during her interview with IRS agents. The court also concluded that the search warrant for PSNC’s computers was supported by probable cause, and that Vesta’s consent validated the search. The court affirmed the district court’s judgment in all respects. View "United States v. Scott" on Justia Law

Ngozi Pole, who served as office manager for Senator Edward Kennedy from 1998 to 2007, was responsible for overseeing the office budget and handling staff bonuses. Between 2003 and 2007, Pole awarded himself substantial, unauthorized bonuses without approval from the Senator or his chief of staff. The scheme was discovered in late 2006 when Pole sought a departure bonus, which he also awarded himself without authorization. After an internal inquiry, the matter was referred to the FBI, leading to Pole’s indictment on five counts of wire fraud and one count of theft of government property.Following a three-week trial in the United States District Court for the District of Columbia, the jury found Pole guilty on all counts. The court sentenced him to 20 months in prison and ordered restitution of $75,042.37, representing the total unauthorized bonuses minus a small recovered amount. On his initial appeal, the United States Court of Appeals for the District of Columbia Circuit remanded the case for the district court to consider Pole’s claim of ineffective assistance of counsel and vacated the restitution order for lack of factual findings. On remand, the district court rejected the ineffective assistance claim and reinstated the restitution order after making the necessary findings.On renewed appeal, the United States Court of Appeals for the District of Columbia Circuit affirmed the district court’s rulings. The court held that, even assuming counsel’s performance was deficient, Pole failed to show prejudice as required by Strickland v. Washington, given the overwhelming evidence of guilt and the limited impact of the alleged errors. The court also held that, under the Mandatory Victim Restitution Act, restitution could include all losses from the fraudulent scheme, not just those tied to the specific counts of conviction, and found the restitution amount supported by the evidence. The judgment of the district court was affirmed. View "United States v. Pole" on Justia Law

David Paitsel, a former FBI Special Agent, was given at least $6,500 by his friend, Brian Bailey, after providing Bailey with information about certain residential tenants. Paitsel obtained this information from the FBI’s access to the non-public Thomson Reuters information system known as CLEAR, by representing that his searches were for FBI law enforcement investigative purposes. The primary issue in this appeal is whether Paitsel’s conduct constituted bribery under 18 U.S.C. § 201(b)(2)(C), which prohibits public officials from agreeing to accept valuable compensation in exchange for performing an “official duty.”The United States District Court for the District of Columbia indicted Paitsel for various bribery offenses, including conspiracy to commit bribery and bribery in violation of his “official duty.” The evidence presented at trial established that Bailey sought to identify tenants whose property was for sale and had begun to proceed through the Tenant Opportunity to Purchase Act (TOPA) process. Bailey paid Paitsel for tenants’ information, which Paitsel obtained by searching the CLEAR database. The jury found Paitsel guilty of both conspiracy to commit bribery and bribery. The District Court denied Paitsel’s motion for a judgment of acquittal and sentenced him to two years’ incarceration.The United States Court of Appeals for the District of Columbia Circuit reviewed the case. The court held that the Government proved beyond a reasonable doubt that Paitsel’s conduct fell within his official duties because he performed an act made possible by his official position in the FBI and his affirmative representation that his conduct was part of official FBI law enforcement investigative duties. The court also rejected Paitsel’s other challenges, including a purported instructional error and the sufficiency of the Government’s quid pro quo evidence. The court affirmed Paitsel’s convictions and sentence. View "USA v. Paitsel" on Justia Law

Keith Berman, the appellant, pleaded guilty to securities fraud, wire fraud, and obstruction of proceedings related to a scheme to fraudulently increase the share price of his company, Decision Diagnostics Corp. (DECN). Berman issued false press releases claiming DECN had developed a blood test for coronavirus, which led to a significant increase in the company's stock price. The Securities and Exchange Commission (SEC) investigated and suspended trading of DECN's stock, revealing that Berman's claims were false. Despite this, Berman continued to issue misleading statements and used aliases to discredit the SEC's investigation.The United States District Court for the District of Columbia sentenced Berman to 84 months' imprisonment. The court calculated the loss caused by Berman's fraud using the modified rescissory method, determining a loss amount of $27.8 million. This calculation was based on the difference in DECN's stock price before and after the fraud was disclosed, multiplied by the number of outstanding shares. The court also applied enhancements for sophisticated means and substantial financial hardship to five or more individuals, resulting in a Guidelines range of 168 to 210 months, but ultimately imposed a downward variance.The United States Court of Appeals for the District of Columbia Circuit reviewed the case. Berman challenged the district court's calculation of the loss amount, arguing that the fraud was disclosed earlier and that the loss was not solely attributable to his fraudulent statements. The appellate court found that the district court did not commit clear error in determining the disclosure date or in its loss causation analysis. The court also upheld the enhancements for sophisticated means and substantial financial hardship, finding sufficient evidence to support these determinations. Consequently, the appellate court affirmed the district court's judgment. View "United States v. Berman" on Justia Law

Roberto Adams, a police officer, was convicted of wire fraud and money laundering related to the misuse of a small-business loan he received under the Paycheck Protection Program (PPP) of the Coronavirus Aid, Relief, and Economic Security Act. Adams did not testify at his trial, and his counsel requested a jury instruction to not draw any adverse inference from this decision. The district court agreed but inadvertently omitted the instruction. Adams' counsel failed to object until after the jury's verdict, which led to a motion for a new trial.The United States District Court for the District of Columbia granted Adams' motion for a new trial, finding that the omission of the no-adverse-inference instruction was plain error and prejudicial. The court noted that the government's case relied heavily on circumstantial evidence to prove Adams' knowledge and intent, and the jury's split verdict indicated that the case was close. The court concluded that the error likely affected the outcome of the trial.The United States Court of Appeals for the District of Columbia Circuit reviewed the case and affirmed the district court's decision. The appellate court agreed that the omission of the instruction was plain error and that it affected Adams' substantial rights. The court emphasized that the government's case was not overwhelming and relied on inferences from circumstantial evidence. The appellate court also found that the error seriously affected the fairness, integrity, and public reputation of the judicial proceedings, warranting a new trial. View "USA v. Adams" on Justia Law

Defendant pleaded guilty to making false statements to government authorities, in violation of 18 U.S.C. 1001(a)(2). Plaintiff was told by her managers at Blackhawk to certify that Blackhawk guards had received training that they had not in fact received, thereby enabling Blackhawk to charge more for each guard’s services. As part of her sentence, she was jointly and severally liable for $442,330 in restitution. But, the district court also expressed a clear intention that the actual restitution amount should be much smaller, perhaps as little as $0. A federal court had already entered judgment against Blackhawk for more than $1 million. And the district court said, in sentencing defendant, that she would not be on the hook at all if Blackhawk paid its fine. Even in the absence of such a payment, defendant would only have to pay “at a rate of not less than $50 each month.” In 2013, defendant found out that the Treasury Department had seized tax refunds due her and that it had acted under the Treasury Offset Program (TOP), 31 U.S.C. 3716, 3720A. Defendant then filed a Motion for Clarification or Modification of Supervised Release in the sentencing court, asking that the tax refunds be returned and future seizures stopped. At the first hearing, the district court vacated defendant’s sentence, stating that it had not anticipated or intended that she be subject to such a harsh sentence. At the second and third hearings, the district court entertained further arguments about the resentencing. At the fourth hearing, the district court reimposed its original sentence. The court held that the sentence manifested a clerical error which the district court should have corrected. The court also held that, in light of the necessary corrections in the sentence, the district court’s refusal to remedy the TOP collection was error. Accordingly, the court remanded for the district court to require the government to return defendant's tax refunds and to cease withholding payments. View "United States v. Hughes" on Justia Law