Justia White Collar Crime Opinion Summaries

An individual, born in 1937, assumed the identity of his younger brother, who died in infancy, to fraudulently obtain a second Social Security number and collect retirement benefits under both his own and his brother’s identities. Over the course of nearly two decades, he received Social Security payments in both names and also procured and used U.S. passports issued under his deceased brother’s identity. His scheme unraveled after a state motor vehicle official noticed similarities between two identification cards with different names but similar photos and addresses. Subsequent investigation revealed the use of both identities for benefits and travel, as well as submission of multiple passport applications with false information.A grand jury in the United States District Court for the District of Maine indicted the defendant on six counts, including identity theft, passport fraud, Social Security fraud, and mail fraud. At trial, the defendant contested the propriety of venue in Maine for two passport fraud counts and challenged the calculation of restitution. The district court submitted the venue question to the jury, which found venue proper for both passport counts and convicted him on all charges. He was sentenced to probation and ordered to pay $175,757 in restitution.Upon appeal, the United States Court of Appeals for the First Circuit reviewed the jury’s venue determinations and the restitution order. The court held that sufficient circumstantial evidence supported venue in Maine for both the false statement in the passport application and the use of a fraudulently obtained passport, applying the appropriate legal standards for each count. The court also found no abuse of discretion in the district court’s method for calculating restitution, concluding that the government met its burden of proof regarding the loss amount. The First Circuit affirmed both the convictions and the restitution order. View "US v. Gonzalez" on Justia Law

A lawyer who served as a legal advisor to a Puerto Rican municipality and its mayor became involved in a scheme related to funds awarded to the municipality for trauma center renovations. The municipal legislature had created a for-profit corporation to promote economic development. Following the deposit of $9 million—traceable to the trauma center renovation funds—financial consultants persuaded the mayor to invest the money, promising it would benefit the municipality and be returned after generating interest. However, the consultants and associates, including the defendant, orchestrated a fraudulent transfer of the funds through multiple accounts and corporate entities. The defendant’s company received significant payments from these transactions, for which he fabricated invoices and provided no actual services. He used some of the money for personal expenses. When auditors later questioned the $9 million transfer, the defendant and others falsely asserted that the transaction was lawful and the funds were appropriately invested.A federal grand jury in Puerto Rico indicted the defendant and several others on charges including wire fraud conspiracy, substantive wire fraud, and money laundering. At trial in the United States District Court for the District of Puerto Rico, the defendant moved for judgment of acquittal based on insufficient evidence, but the court denied the motions. The jury found him guilty on all counts. The district court sentenced him to thirty-seven months’ imprisonment and denied his subsequent pro se motion for a sentence reduction.The United States Court of Appeals for the First Circuit reviewed the case. The court held that sufficient evidence supported the defendant’s convictions, as a reasonable jury could find he knowingly participated in a single overarching conspiracy to defraud the municipality. The court also held it lacked jurisdiction to review the denial of his sentence reduction motion because no notice of appeal was filed for that order. The court affirmed the convictions and dismissed the sentencing challenge. View "US v. Irizarry-Irizarry" on Justia Law

Two brothers residing in Massachusetts used fake passports to open numerous bank accounts between 2019 and 2020, including accounts in their own names, names of fabricated individuals, and a fictitious company. These accounts were used to deposit funds acquired from romance scams targeting vulnerable victims and unemployment scams involving stolen identities. The brothers exchanged account information with each other and with overseas collaborators, and withdrew funds using debit cards linked to the fraudulent accounts. The FBI investigated after being alerted by victims, ultimately searching the brothers’ residences and storage facilities, where they found fake identification documents and related materials.A grand jury indicted the brothers in 2021 on charges of bank fraud, conspiracy to commit bank fraud, and conspiracy to commit money laundering. After an eight-day jury trial in the United States District Court for the District of Massachusetts, both were convicted on all counts. The district court sentenced Henry to seventy-eight months and Osaretin to seventy-two months of imprisonment, both with two years of supervised release. Restitution was deferred pending a hearing, after which the district court ordered both defendants to pay $615,805.65 in restitution, jointly and severally. The brothers appealed both their convictions and the restitution order.The United States Court of Appeals for the First Circuit reviewed the consolidated appeals, addressing challenges to the sufficiency of the evidence, jury instructions, sentencing enhancements, and restitution orders. The court held that the evidence was sufficient to support the convictions for bank fraud and conspiracy, that the jury instructions were not plainly erroneous or misleading, and that the sentencing enhancement for possession or use of authentication features was appropriate. The court also concluded that the district court had jurisdiction to issue the restitution order and did not err in making the defendants jointly and severally liable. Accordingly, the First Circuit affirmed the convictions and restitution orders. View "US v. Omoruyi" on Justia Law

Over a period of six years, the two defendants participated in a scheme involving the creation of multiple business entities and bank accounts, which were used to facilitate the transfer of large sums of money. One defendant directed friends and family members to register businesses and open accounts on his behalf, while the other registered a business and opened accounts at his request. The operation purported to involve purchasing goods domestically and exporting them overseas, but most of the funds came from a single victim who was deceived in an online romance scam. The defendants withdrew substantial amounts of cash from these accounts and used the funds for personal expenses, while maintaining little to no legitimate business records.After law enforcement began investigating, both defendants were questioned about their activities. They denied knowledge of any illegal source of funds and claimed to believe the business was legitimate. Nonetheless, evidence showed inconsistent statements, continued operation after warnings from banks and law enforcement, and a lack of documentation for the purported business transactions. A grand jury indicted both defendants for conspiracy to commit money laundering. At trial in the United States District Court for the District of New Hampshire, both defendants testified that they were unaware of the illegal origins of the funds, but a jury found them guilty. One defendant also challenged the government’s arguments at trial and the sentencing calculation.On appeal to the United States Court of Appeals for the First Circuit, both defendants argued that the evidence was insufficient to support their convictions, and that the district court erred in its jury instructions regarding willful blindness and good faith. The First Circuit held that the circumstantial evidence was sufficient to sustain the convictions, and that the willful blindness and good faith instructions were proper. The court also found no error in the government’s arguments or in the sentencing calculation, and affirmed both the convictions and the sentence. View "US v. Sepetu" on Justia Law

The defendant, the former mayor of Guaynabo, Puerto Rico, was indicted on three federal charges: conspiracy to commit federal-program bribery, federal-program bribery and aiding and abetting, and extortion under color of official right. The indictment alleged that while serving as mayor, he used his authority over municipal contracting to steer contracts to a local construction company owned by another individual, in exchange for cash payments. Some of these payments were characterized by the government as bribes, while the defense argued they were campaign contributions intended to pay off campaign debt.The United States District Court for the District of Puerto Rico denied the defendant’s pretrial motion to dismiss the indictment and later denied his motion for judgment of acquittal after the jury found him guilty on all counts. The district court found that the evidence supported the jury’s verdict, sentenced the defendant to concurrent terms of imprisonment and supervised release, and rejected his arguments regarding defects in the indictment, prejudicial variance, improper jury instructions, and jury bias.On appeal, the United States Court of Appeals for the First Circuit reviewed the sufficiency of the evidence de novo, as well as other challenges. The First Circuit held that a rational jury could have found beyond a reasonable doubt that the payments in question were not campaign contributions, and thus the requirements of McCormick v. United States did not apply. The court further held that there was sufficient evidence of a quid pro quo and that the timing and nature of the payments did not convert them into mere gratuities. The court also concluded that there was no prejudicial variance, the jury instructions were not impermissibly biased, and the defendant’s right to an impartial jury was not violated. The First Circuit ultimately affirmed both the convictions and the sentences. View "US v. Perez-Otero" on Justia Law

The case involves a Massachusetts psychiatrist who owned and operated a clinic providing treatment for addiction with imported drugs. The drugs included naltrexone and disulfiram in forms not approved by the FDA for use in the United States. The shipments were brought in from Hong Kong and falsely described on import documents as “plastic beads in plastic tubes,” with their value understated. The government charged the defendant with several crimes, including international money laundering, unlawful importation of merchandise, and receipt and delivery of misbranded drugs. The jury found the defendant guilty on some counts but acquitted him on others, including all counts against his wife.The United States District Court for the District of Massachusetts conducted the trial. After the jury’s verdict, the court sentenced the defendant to 36 months’ imprisonment on each count, to be served concurrently, and calculated the sentence using the fraud guideline in the United States Sentencing Guidelines. The defendant appealed, arguing that the district court erred in its evidentiary rulings, in admitting or excluding certain testimony, and in its application of the Sentencing Guidelines.The United States Court of Appeals for the First Circuit reviewed the case. It affirmed the defendant’s convictions, finding no reversible error in the district court’s evidentiary decisions or in its exclusion of expert testimony. The appellate court vacated the sentence for the misdemeanor misbranding conviction because it exceeded the statutory maximum. The court retained jurisdiction over the appeal and remanded to the district court for clarification regarding the application of the fraud guideline, specifically instructing the lower court to explain the basis for its use of that guideline and to address the impact of recent amendments related to acquitted conduct. View "US v. Shafa" on Justia Law

The defendant, who immigrated to the United States from Vietnam, operated a staffing agency that provided temporary laborers to various clients in Massachusetts. She managed most of the agency’s operations, including payroll, and worked closely with her daughter, who had accounting training. Between 2015 and 2019, the defendant withdrew over $3.7 million in cash from business accounts, frequently in increments just below the $10,000 federal reporting threshold, and used this cash to pay workers. Evidence at trial showed that the agency paid employees additional cash wages not reported to tax authorities, resulting in unpaid employment taxes and underreported payroll to the company’s workers’ compensation insurer, which led to lower insurance premiums.A federal grand jury in the District of Massachusetts indicted the defendant on four counts of failing to collect or pay employment taxes and one count of mail fraud. After a jury trial, she was convicted on all counts and sentenced to eighteen months’ imprisonment and two years of supervised release. She appealed, challenging the admission of evidence regarding the structuring of cash withdrawals, the district court’s refusal to give a jury instruction on implicit bias, the instructions related to tax obligations and good faith, and the sufficiency of the evidence supporting the mail fraud conviction.The United States Court of Appeals for the First Circuit reviewed the case and affirmed the convictions. The court held that evidence about the structuring of cash withdrawals was properly admitted as intrinsic to the charged offenses and relevant to intent. The refusal to instruct on implicit bias was not an error because the district court’s voir dire and instructions substantially covered the issue. The court found no reversible error in the jury instructions regarding tax law and good faith, and concluded that any error was harmless. Finally, the evidence of mail fraud was found sufficient, as it was reasonably foreseeable that the mail would be used in the insurance audit process. View "US v. Giang" on Justia Law

Two brothers operated an energy-conservation contracting business and, beginning in 2013, engaged in a bribery scheme involving the Mass Save program, a state-mandated initiative to promote energy efficiency. One brother owned CAP Electric, Inc., and recruited the other to establish Air Tight Solutions, LLC as a Mass Save contractor with the assistance of a CLEAResult employee, who was responsible for selecting and overseeing contractors. The brothers paid this employee, and later another, regular bribes in cash and gifts to secure contracts, favorable treatment, and advance warning of audits. Air Tight performed little or no work directly, subcontracted projects, and disguised employees and payments to conceal the scheme. Over several years, their companies received multi-million dollar payments from the program.The United States District Court for the District of Massachusetts accepted their guilty pleas to conspiracy, honest-services wire fraud, making false statements, and (for one brother) aiding and assisting false tax returns. The district judge sentenced both to 27 months in prison (above-guidelines for one), and ordered forfeiture of $13.2 million and $3.6 million respectively. The brothers challenged the sentences and forfeitures on several grounds, including alleged errors in calculating tax loss, application of sentencing enhancements, and the process and proportionality of the forfeiture orders.The United States Court of Appeals for the First Circuit reviewed the case. It held that the district court did not err in calculating tax loss or applying sentencing enhancements for sophisticated means, obstruction of justice, and aggravating role. The appellate court also held that the district court correctly found a sufficient connection between the criminal conduct and the forfeited proceeds, and that any procedural errors in the forfeiture process were harmless. Finally, the court determined that the forfeiture orders were not unconstitutionally excessive. The First Circuit affirmed the sentences and forfeiture orders. View "United States v. Ponzo" on Justia Law

Three defendants were charged following a federal investigation into La Asociación Ñeta, an organization originally founded to advocate for prisoners’ rights in Puerto Rico, but later alleged to have evolved into a criminal enterprise engaged in drug trafficking and violence. The defendants were accused of conspiring to violate the Racketeer Influenced and Corrupt Organizations (RICO) Act, and of conspiring to possess with intent to distribute heroin, cocaine, and marijuana. The indictment described La Ñeta as an enterprise whose members facilitated drug transactions and other criminal conduct. The defendants were tried jointly before a jury and convicted on both counts.After conviction in the United States District Court for the District of Puerto Rico, the defendants appealed to the United States Court of Appeals for the First Circuit. Their appeals were consolidated with those of several codefendants. In an earlier opinion, the First Circuit rejected most challenges but found that it could not resolve whether certain hearsay statements used at trial were admissible under United States v. Petrozziello because the District Court had not made the required findings. The First Circuit remanded for the District Court to make explicit findings about whether the statements were made by coconspirators during and in furtherance of the conspiracy, and retained jurisdiction over the appeals.After the District Court made its findings, the First Circuit reviewed the record and supplemental briefs. The court held that the challenged statements were properly admitted under Petrozziello or, where any error occurred, it was harmless given the overwhelming evidence of guilt. The court also rejected a cumulative error argument, finding no basis to overturn the convictions. The United States Court of Appeals for the First Circuit affirmed the convictions of all three defendants. View "United States v. Rosario-Orangel" on Justia Law

Chang Goo Yoon, a licensed physical therapist operating clinics in Massachusetts, engaged in a scheme over four years to submit more than one million dollars in fraudulent claims to private health insurers, including Blue Cross Blue Shield and Aetna, for services he did not actually provide. He fabricated treatment notes, sometimes under another provider's name, and submitted false personal injury claims to his own car insurer, MAPFRE. Yoon manipulated patient addresses to ensure reimbursement checks were sent directly to him, avoiding detection by patients. His fraudulent conduct was eventually uncovered, and a jury convicted him on two counts of health care fraud, with Count One involving Blue Cross and Aetna, and Count Two concerning MAPFRE.The United States District Court for the District of Massachusetts presided over the trial. Before trial, Yoon moved to exclude evidence related to insurance company investigations into his billing, including a 2015 Blue Cross investigation and a 2007 Colorado licensing investigation. The district court limited the evidence to Yoon’s knowledge of the investigations, excluding their outcomes. The court also redacted key documents and provided limiting instructions to the jury. At trial, witnesses testified about insurance procedures and Yoon’s billing practices. Yoon challenged the admissibility of this evidence, as well as testimony from insurance investigators, arguing it was unduly prejudicial and improperly admitted.The United States Court of Appeals for the First Circuit reviewed Yoon’s appeal. The court affirmed the district court’s evidentiary rulings, holding that evidence of Yoon’s knowledge of prior investigations was highly probative of his specific intent and not unduly prejudicial given the safeguards imposed. The court also affirmed the application of two sentencing enhancements: one for intended loss based on the total amount billed, and another for abuse of a position of trust, finding both were supported by the record and correctly applied. Yoon’s conviction and sentence were affirmed. View "United States v. Yoon" on Justia Law