Justia White Collar Crime Opinion Summaries

Articles Posted in US Court of Appeals for the Second Circuit

by
Defendant appealed the district court's imposition of a condition of supervised release that required him to perform 300 hours of community service a year over his term of supervision for a total of 695 hours. Defendant's conviction stemmed from his role in two different fraud schemes. The Second Circuit vacated and remanded for resentencing, holding that the challenged condition was not reasonably related to any of the relevant sentencing factors, was inconsistent with the pertinent Guidelines policy statements, and involved a greater deprivation of liberty than was reasonably needed to achieve the purposes of sentencing. The court held that the pertinent policy statement issued by the Sentencing Commission must be read to advise that courts should generally refrain from imposing more than a total of 400 hours of community service as a condition of supervised release. View "United States v. Parkins" on Justia Law

by
The Second Circuit affirmed defendant's conviction of paying and conspiring to pay bribes, in violation of 18 U.S.C. 371, 666, and the Foreign Corrupt Practices Act (FCPA), and gratuities to United Nations officials and of related money laundering. Defendant's charges stemmed from his sustained effort to bribe two U.N. officials to designate one of his properties as the permanent site of an annual U.N. convention. The court held that the word "organization" as used in section 666, and defined by 1 U.S.C. 1 and 18 U.S.C. 18, applies to all non‐government legal persons, including public international organizations such as the U.N. The court also held that the "official act" quid pro quo for bribery as proscribed by 18 U.S.C. 201(b)(1), defined by id. section 201(a)(3), and explained in McDonnell v. United States, does not delimit bribery as proscribed by section 666 and the FCPA. Thus, the district court did not err in failing to charge the McDonnell standard for the FCPA crimes of conviction. Insofar as the district court nevertheless charged an "official act" quid pro quo for the section 666 crimes, that error was harmless beyond a reasonable doubt. Finally, the evidence was sufficient to convict defendant, and the jury did not misconstrue the "corruptly" element of section 666 and the FCPA and the "obtaining or retaining business" element of the FCPA. View "United States v. Ng Lap Seng" on Justia Law

by
The Second Circuit affirmed defendant's conviction for money laundering and conducting transactions in property criminally derived through bribery in the Republic of Guinea. The court held that McDonnell v. United States, 136 S. Ct. 2355 (2016), does not apply to Articles 192 and 194 of Guinea's Penal Code, and therefore defendant's claim that the jury instructions were improper because they did not include the definition of "official act" relative to a bribery conviction necessarily failed. The court also held that the evidence was sufficient to support a finding of a quid pro quo exchange necessary for defendant's conviction and that he committed an "official act" as defined in McDonnell. Finally, the court held that defendant's remaining evidentiary challenges failed and his other arguments were without merit. View "United States v. Thiam" on Justia Law

by
The Second Circuit affirmed defendants' convictions of multiple counts arising out of their roles in the operation of an illegal Bitcoin exchange and a scheme to use a federal credit union for illegal purposes. The court held that the evidence was sufficient to convict Defendant Lebedev of wire fraud, bank fraud, and conspiracy to commit wire and bank fraud; the court rejected Defendant Gross' evidentiary challenges; there was no constructive amendment of the indictment; Gross' claim that his due process rights were violated based on government intimidation of witnesses was meritless; and there was no cumulative effect of the district court's errors causing Gross to be deprive of a fair trial. The court also held that the district court did not clearly err by applying a four level sentencing enhancement for Gross' role as an organizer or leader in the criminal activity under USSG 3B1.1, for commercial bribery under USSG 2B4.1, and for abuse of a position of trust by use of a special skill under USSG 3B1.3. Finally, the district court's findings as to the restitution order were not clearly erroneous. View "United States v. Lebedev" on Justia Law

by
The Second Circuit affirmed defendant's conviction of securities fraud and wire fraud, finding no errors in the district court's jury instructions, admission of lay testimony, and calculation of loss. The court also held that, as a matter of law, forfeiture is not limited to the amount of funds acquired through illegal transactions in an insider‐trading scheme; rather, forfeiture may extend to appreciation of those funds. Accordingly, the court affirmed the district court's forfeiture calculation and order. Finally, Lagos v. United States, 138 S. Ct. 1684 (2018), was decided after defendant's sentence and addressed the categories of fees recoverable under the Mandatory Victims Restitution Act. Therefore, the court held that a limited remand to recalculate the restitution was appropriate. View "United States v. Afriyie" on Justia Law

by
Plaintiffs filed suit alleging that defendants, while located in foreign nations, used the mail or wires to order fraudulent asset transfers from plaintiffs' New York bank accounts to defendants' own accounts. The district court held that all but one of the schemes were impermissibly extraterritorial under either civil RICO, 18 U.S.C. 1964(c), or the mail, wire, and bank fraud statutes plaintiffs cited as predicates to the civil RICO cause of action. The district court found the remaining scheme, standing alone, did not constitute a pattern of racketeering activity under RICO. At issue was whether the conduct violating the predicate statutes was extraterritorial, the application of civil RICO to plaintiff's alleged injuries was extraterritorial, and whether the surviving schemes amounted to a pattern of racketeering activity. The Second Circuit held that each of the schemes to defraud, except for the Sham Management Fees Scheme, calls for domestic applications of 18 U.S.C. 1962(c), 1962(d), 1341, 1343, and 1344(2). The court also held that the district court abused its discretion by dismissing the state law claims for lack of supplemental jurisdiction. Therefore, the court reversed and remanded for further proceedings. View "Bascuñán v. Elsaca" on Justia Law

by
The Second Circuit affirmed the district court's dismissal of LBE's action alleging claims under the Sherman Act and the Racketeer Influenced and Corrupt Organizations Act (RICO). LBE alleged that Barbri and law schools entered into agreements whereby Barbri donates money to the schools, bribes their administrators, and hires their faculty to teach bar review courses. LBE further alleged that, in exchange, the law school gives Barbri direct access to promote and sell its products on campus. The court adopted the district court's well-reasoned and thorough analysis of LBE's allegations and held that the district court properly dismissed the complaint under Federal Rule of Civil Procedure 12(b)(6) for failure to state a plausible claim of relief. The district court concluded that internal contradictions and conclusory assertions in the complaint did not plausibly support LBE's claim that Barbri and the law schools conspired to enable Barbri to gain a monopoly. View "LLM Bar Exam, LLC v. Barbri, Inc." on Justia Law

by
The Second Circuit affirmed the district court's order requiring defendant to pay a civil penalty of almost $93 million in a civil suit brought by the SEC. Defendant was the managing general partner and portfolio manager of Galleon Management and its affiliated hedgefunds. Defendant was found to have executed trades in Galleon's accounts and in the account of Rajiv Goel, an Intel executive who had provided tips to defendant, in the stock of five companies on the basis of inside information. The court held that a plain reading of Section 21A(a)(2) of the Securities and Exchange Act indicates that it permits a civil penalty to be based on the total profit resulting from the violation. In this case, defendant executed Galleon's and Goel's illegal trades and thus his civil penalty could be calculated under subsection (a)(2) based on the profit gained or loss avoided as a result of defendant's unlawful purchases and sales. The court also held that the district court did not abuse its discretion by determining that every factor in SEC v. Haligiannis, 470 F. Supp. 2d 373, 386 (S.D.N.Y. 2007), favored the use of a treble penalty. View "SEC v. Rajaratnam" on Justia Law

by
Defendant appealed his sentence after he pleaded guilty to an information charging securities fraud, mail fraud, and obstruction and impeding the Internal Revenue Laws. Defendant, a former registered investment broker, perpetrated fraud on the clients of ELIV Group, an unregistered investment and consulting group that he owned and operated. The Second Circuit vacated in part the district court's sentence of incarceration as procedurally unreasonable because of an incorrect criminal history finding. Accordingly, the court remanded as to this issue. The court affirmed the district court's imposition of the amended restitution order where the district court corrected the restitution amount during resentencing. View "United States v. Valente" on Justia Law

by
Petitioner appealed the district court's denial of his 28 U.S.C. 2255 motion to vacate his securities fraud convictions in light of United States v. Newman, 773F.3d438 (2dCir. 2014), in which the Second Circuit reversed the insider trading convictions of two tippers. The court affirmed the judgment and held that petitioner presented no viable claim that the personal benefit challenge was unavailable to his counsel on appeal; petitioner failed to show prejudice where the personal benefit instructions he challenged were so flawed as to deny him due process; and petitioner has not demonstrated his actual innocence where the evidence contained ample evidence that petitioner was in a conspiracy to trade on the basis of non public information and that petitioner benefited financially from the trading. View "Gupta v. United States" on Justia Law