Justia White Collar Crime Opinion Summaries

The plaintiff, a former Senior Reimbursement Manager at a national pharmacy provider, alleged that her employer engaged in a scheme to overcharge government healthcare programs such as Medicare and Medicaid. She claimed the company exploited billing system discrepancies and other tactics to cause overpayments, including billing for deceased patients and miscoding pharmacy types for higher reimbursements. The company allegedly concealed these overpayments in its internal accounting and, after a period, transferred the unreturned funds into its own revenues. The plaintiff reported these practices to management and internal audit, but the issues persisted.After filing a complaint in the United States District Court for the Eastern District of New York, the plaintiff amended her allegations. The District Court dismissed all federal claims with prejudice, finding that the plaintiff did not meet the heightened pleading standards for fraud required under Federal Rule of Civil Procedure 9(b) for “direct” False Claims Act (FCA) claims (those based on submitting fraudulent invoices or statements to the government). The court also denied leave to further amend the complaint, and denied reconsideration.On appeal, the United States Court of Appeals for the Second Circuit reviewed the case de novo. The Second Circuit affirmed the District Court’s dismissal of the plaintiff’s direct FCA claims, holding that she did not identify any specific fraudulent submissions to the government, nor adequately allege that such information was solely within the defendants’ control. However, the Second Circuit vacated the dismissal of the “reverse” FCA claim, which is based on knowingly retaining government overpayments. The court found the plaintiff sufficiently alleged that the company had an obligation to return identified overpayments and knowingly concealed or improperly avoided that obligation. The case was remanded for further proceedings on the reverse FCA claim. View "United States v. Amerisource Bergen Corp." on Justia Law

Cory Martin was charged with murder-for-hire, conspiracy to commit murder-for-hire, fraud, and identity theft after he killed Brandy Odom in April 2018. Martin’s then-girlfriend, Adelle Anderson, had taken out life insurance policies on Odom and promised Martin the proceeds upon Odom’s death. Following the murder, Anderson attempted to collect on the fraudulent policies but was unsuccessful. Law enforcement discovered Odom’s remains, secured Anderson’s cooperation, and prosecuted Martin based in large part on Anderson’s testimony.The case was heard in the United States District Court for the Eastern District of New York. At trial, Martin argued Anderson was the mastermind and that he was uninvolved, but the jury rejected this, finding Martin guilty on all counts. Anderson, having cooperated, pleaded guilty in a separate proceeding and received probation due to her history of abuse and other mitigating factors. Martin was sentenced to life imprisonment for the murder-for-hire offenses, along with additional sentences for the fraud and identity theft charges. He appealed, challenging the sufficiency of the evidence, the adequacy of the jury instructions, the inclusion of an aiding-and-abetting instruction, and alleging spillover prejudice affecting his other convictions.The United States Court of Appeals for the Second Circuit reviewed the case and affirmed the district court’s judgment. The appellate court held that the evidence was sufficient to support the murder-for-hire convictions under 18 U.S.C. § 1958, clarifying that the statute’s “consideration” requirement does not demand a formal employment relationship but rather a reciprocal inducement—an exchange of the murder for a promise of pecuniary value. The Second Circuit also found the jury instructions were proper, the aiding-and-abetting instruction was justified, and no impermissible spillover prejudice had occurred. The district court’s judgment was affirmed in all respects. View "United States v. Martin" on Justia Law

Bradley Stinn, a former chief executive officer of a large jewelry retailer, was convicted in 2009 of securities fraud, mail fraud, and conspiracy. The charges stemmed from a scheme in which Stinn and others allegedly concealed the substantial risk of customer defaults in the company’s credit-extension program, thereby fraudulently inflating the company’s financial reports. As a result, Stinn received a significant bonus and salary increase that were tied to the company’s reported earnings. The company ultimately went bankrupt, and Stinn served a sentence of imprisonment and supervised release.The United States District Court for the Eastern District of New York presided over Stinn’s trial, where the jury was instructed it could convict under either a traditional fraud theory or the now-invalidated right-to-control theory. The jury returned a general verdict of guilty, and Stinn unsuccessfully challenged his conviction on direct appeal and in a habeas petition. After the Supreme Court in Ciminelli v. United States rejected the right-to-control theory, Stinn filed a petition for a writ of error coram nobis, seeking to vacate his conviction on the grounds that the jury may have relied on an invalid theory. The district court denied the petition, holding that any error was harmless because sufficient evidence supported the conviction under the traditional fraud theory.On appeal, the United States Court of Appeals for the Second Circuit affirmed the district court’s judgment. The Second Circuit held that the standard for harmless error in coram nobis proceedings is that articulated in Kotteakos v. United States, which requires a petitioner to show that the error had a substantial and injurious effect on the verdict. The court found that Stinn failed to meet this burden, as the evidence overwhelmingly supported conviction under the traditional fraud theory. Thus, the denial of coram nobis relief was affirmed. View "Stinn v. United States of America" on Justia Law

The defendant, convicted by a jury of conspiracies to commit wire and securities fraud in connection with a scheme to defraud investors, was ordered to pay over $10 million in restitution to the victim company. To enforce this restitution order, the government sought to garnish the defendant’s 401(k) retirement accounts. The defendant objected, arguing that various legal provisions, including plan terms and federal statutes, either prohibited or limited garnishment of his accounts. The victim, the financial institutions holding the accounts, and the government ultimately reached a settlement on how the garnishment and tax consequences would be handled.After the conviction and sentence were affirmed by the United States Court of Appeals for the Second Circuit, the United States District Court for the Eastern District of New York considered the government’s application for writs of garnishment. The district court rejected the parties’ proposed stipulated orders of garnishment, reasoning that the proposal exceeded the scope of the Second Circuit’s prior mandate by not resolving specific tax issues, and ordered its own procedure for liquidation and distribution of the funds. The district court also denied a stay of distribution, holding that the defendant lacked standing because the funds had been liquidated.On appeal, the United States Court of Appeals for the Second Circuit held that the controversy remained live despite the liquidation of the accounts, and that its previous mandate did not bar the district court from approving the parties’ stipulated orders of garnishment. The court found that the district court erred in its application of the mandate rule and in concluding that the defendant lacked standing. Accordingly, the Second Circuit reversed the district court’s order and remanded the case with instructions to approve the parties’ proposed stipulated orders of garnishment. View "United States v. Greebel" on Justia Law

The defendant was convicted in 2014 of multiple counts of fraud and sentenced to nearly 24 years in prison and ordered to pay approximately $3.8 million in restitution. Years later, the government sought to enforce the restitution order by pursuing a writ of garnishment against funds expected from a September 11th Victims Compensation Fund award, which were to be received by a law firm on the defendant’s behalf. After being notified of the garnishment, the defendant, acting pro se, objected and requested, among other things, that proceedings be transferred to the federal district where he resided, as provided for under the Federal Debt Collection Procedures Act.The United States District Court for the Eastern District of New York denied his objections, including the transfer request. The court held that the September 11th funds were not exempt from garnishment, that the defendant was not entitled to a hearing since his objections were meritless, and that transfer of venue was not mandatory but discretionary. The district court relied on its interpretation of the statute and on prior case law, concluding it retained authority to deny transfer requests for good cause.The United States Court of Appeals for the Second Circuit reviewed the case. It held that the statutory language of the Federal Debt Collection Procedures Act makes transfer of a garnishment proceeding mandatory when timely requested by the debtor. The court found that the district court erred by treating transfer as discretionary, and further held that failure to transfer is not subject to harmless error review. Accordingly, the Second Circuit vacated the district court’s judgment and remanded the case for the district court to consider a renewed motion to transfer the proceedings to the district in which the defendant currently resides. View "United States v. Liounis" on Justia Law

The case concerns actions taken by the former CEO of a prominent cryptocurrency exchange and a related trading firm. The defendant, who exercised substantial control over both entities, was accused of misappropriating billions of dollars of customer funds. These funds, which customers believed would be safely held and used only for authorized transactions, were instead funneled to the trading firm and used for various unauthorized purposes, including investments, political contributions, and purchases of real estate. The collapse of cryptocurrency markets in 2022, followed by a rapid loss of customer confidence and mass withdrawals, ultimately led to the bankruptcy of both the exchange and the trading firm.After the bankruptcy, the defendant was indicted in the United States District Court for the Southern District of New York on several counts of fraud and conspiracy. The government’s case was supported by testimony from the defendant’s close associates, who described how the defendant orchestrated the transfer and misuse of customer funds, and by business records and communications. The defendant argued that he believed all customers would ultimately be repaid and that he acted in good faith. The jury found the defendant guilty on all counts, and the district court sentenced him to 25 years in prison, imposed a three-year term of supervised release, and ordered a forfeiture of approximately $11 billion.On appeal to the United States Court of Appeals for the Second Circuit, the defendant challenged the district court’s evidentiary rulings, jury instructions, discovery-related decisions, and the forfeiture order. The Second Circuit held that the district court did not err in its evidentiary rulings, instructions, or discovery decisions, and that the forfeiture was authorized and not constitutionally excessive. The judgment of the district court was affirmed. View "U.S. v. Bankman-Fried" on Justia Law

The case involves allegations by two relators, acting on behalf of the United States, that Amazon.com, Inc. and Amazon.com Services, LLC facilitated and conspired with foreign manufacturers to submit false records to the U.S. government. The relators claimed that these manufacturers, who sold fur products via Amazon’s platform, provided false information on Customs Declarations to avoid paying mandatory tariffs and inspection fees on imported fur products. According to the complaint, Amazon was not the importer of record, but the relators alleged that Amazon either knew or should have known about the fraudulent conduct due to discrepancies in documentation and the absence of required forms, and that Amazon nonetheless continued to market, store, and deliver the products.The United States District Court for the Southern District of New York reviewed the relators’ second amended complaint under Federal Rule of Civil Procedure 12(b)(6). The court dismissed the claims, concluding that the relators failed to adequately allege that Amazon had the requisite knowledge or causation necessary for liability under 31 U.S.C. § 3729(a)(1)(G) (the “reverse false claims” provision of the False Claims Act), and failed to plead the essential elements of a conspiracy claim under § 3729(a)(1)(C), including an agreement to violate the statute and overt acts in furtherance of such a conspiracy.On appeal, the United States Court of Appeals for the Second Circuit affirmed the district court’s dismissal. The Second Circuit held that the relators did not plausibly allege that Amazon had actual knowledge, deliberate ignorance, or reckless disregard regarding the foreign manufacturers’ false claims, as required by the statute. The court also determined the relators had not alleged facts showing an agreement or overt act necessary to support a conspiracy claim. Thus, the district court’s judgment dismissing the complaint in its entirety was affirmed. View "United States of America v. Amazon.com, Inc." on Justia Law

The defendant engaged in a scheme from 2017 through 2020 in which he impersonated an attorney to obtain personally identifiable information from prisoners. Using this information, he filed unauthorized tax returns in the names of at least nine prisoners, receiving $136,672 in fraudulent refunds from the Internal Revenue Service. At the time of his arrest, the defendant was already under community supervision for a similar offense and had a significant criminal history, including prior convictions for fraud-related and other offenses.A grand jury in the United States District Court for the Southern District of New York indicted the defendant on multiple fraud and theft charges. He pleaded guilty to fourteen counts of making false claims and one count of theft of government funds. The district court sentenced him to forty-six months in prison, three years of supervised release, and ordered forfeiture and restitution. The supervised release included standard and special conditions, one of which allowed for electronic monitoring of all devices capable of accessing the internet, unannounced examinations of such devices, and monitoring of any work-related devices as permitted by his employer. The defendant did not object to these conditions at sentencing but challenged them on appeal.The United States Court of Appeals for the Second Circuit reviewed the case. It held that the district court did not err in imposing the special condition of electronic monitoring. The appellate court found the condition was reasonable in light of the nature of the offenses and the defendant’s history, was not overbroad, and did not amount to an impermissible occupational restriction under the Sentencing Guidelines. The court concluded that the monitoring requirements did not prohibit the defendant from pursuing any occupation and were necessary to protect the public. The judgment of the district court was affirmed. View "United States v. Brown" on Justia Law

The defendant operated a business exchanging bitcoin for cash, advertising his services online and charging commission fees. Over several months, undercover DEA agents arranged multiple transactions with the defendant, exchanging large amounts of bitcoin for cash. During these exchanges, the agent initially claimed the bitcoin came from an online business but later said it was from drug sales. Despite this disclosure, the defendant continued the exchanges. Ultimately, he was arrested after arranging another large transaction.The United States District Court for the Eastern District of New York indicted the defendant on charges of money laundering and operating an unlicensed money transmitting business. During jury selection, the defense objected to the seating of a juror who expressed positive views toward law enforcement and negative views about financial crimes. The court denied the challenge for cause, empaneling the juror. The jury convicted the defendant on both counts. At sentencing, the court included all transactions with the undercover agent in calculating the offense level and imposed a term of imprisonment and supervised release.On appeal, the United States Court of Appeals for the Second Circuit addressed several issues. It held that the district court did not abuse its discretion by empaneling the challenged juror, given the juror’s assurances of impartiality. The court further held that exchanging bitcoin for cash constitutes “money transmitting” under 18 U.S.C. § 1960 and its implementing regulations, and that the evidence was sufficient to sustain the conviction. Additionally, the court found no error in the district court’s supplemental jury instruction clarifying that such exchanges qualify as transfers of funds. Finally, the court dismissed the defendant’s sentencing challenges as moot because he had completed his prison term and raised no issues regarding supervised release. The judgment of the district court was otherwise affirmed. View "United States v. Goklu" on Justia Law

GEICO and its subsidiaries brought a lawsuit in the United States District Court for the Eastern District of New York against Dr. Bhargav Patel and his medical practice, alleging that the defendants engaged in a scheme to defraud GEICO by manipulating New York’s no-fault automobile insurance system. GEICO claimed that from 2019 to 2023, defendants submitted approximately $3.4 million in reimbursement claims for treatments that were unnecessary, experimental, excessive, illusory, or not provided at all. These claims allegedly resulted from a fraudulent scheme involving kickbacks for patient referrals and the provision of services by unlicensed individuals or contractors.After GEICO initiated its federal action, the defendants responded by filing over 600 collection actions in New York state courts and arbitration tribunals, seeking recovery for disputed or denied claims totaling more than $2 million. GEICO, facing the prospect of fragmented litigation and the risk of inconsistent judgments, sought a preliminary injunction from the district court to stay all pending state and arbitration proceedings and to prevent the defendants from filing new collection actions until the federal court resolved the RICO claims. The district court granted the injunction, finding that GEICO had demonstrated irreparable harm, serious questions going to the merits, and a balance of hardships tipping in GEICO’s favor. The court also determined it had authority under the “in aid of jurisdiction” exception to the Anti-Injunction Act to enjoin the parallel proceedings.On appeal, the United States Court of Appeals for the Second Circuit reviewed the district court’s decision for abuse of discretion and found none. The appellate court held that the preliminary injunction was justified by the real risk of irreparable harm to GEICO posed by inconsistent judgments and the inability to fully adjudicate the alleged fraudulent scheme in piecemeal state actions. The Second Circuit further held, consistent with its recent precedent in State Farm Mutual Automobile Insurance Company v. Tri-Borough NY Medical Practice, P.C., that the injunction did not violate the Anti-Injunction Act because it was expressly authorized under RICO. The court affirmed the district court’s order. View "GEICO v. Patel" on Justia Law