Justia White Collar Crime Opinion Summaries

Articles Posted in US Court of Appeals for the Second Circuit
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Defendant appealed his conviction and sentence for various tax offenses, including making and subscribing to a false tax return, tax evasion, and attempting to interfere with the administration of the internal revenue laws. Defendant's charges stemmed from his efforts, over the course of 14 years, to engage in a concerted campaign to obstruct the IRS's efforts to collect his delinquent tax payments and to secure overdue tax returns. The Second Circuit held that the district court lacked authority to require restitution payments to begin immediately following defendant's sentencing. However, the court held that, in assessing tax loss under USSG 2T1.1 application note 1, the district court was permitted to rely on uncharged relevant conduct constituting "willful evasion of payment" in violation of 26 U.S.C. 7201 and "willful failure to pay" in violation of 26 U.S.C. 7203. The court held that defendant's remaining claims were unavailing and affirmed the judgment as modified. View "United States v. Adams" on Justia Law

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The Second Circuit affirmed defendant's 70-month sentence for tax offenses. The court held that the district court did not abuse its discretion by denying his post‐trial request for a competency hearing based chiefly on his adherence to the Sovereign Citizen movement. The court held that the record supported the district court's conclusion that defendant's words and actions reflected his anti‐government political views and legal theories rather than an inability to understand the proceedings against him. The court also held that the district court did not abuse its discretion in deciding to give no weight to the report of defendant's expert, because the report was based on insufficient facts and data, and the district court did not abuse its discretion in finding that the expert employed unreliable principles and methods. Finally, even if the court were to conclude that the district court improperly relied on another expert's testimony without explicitly ruling on its admissibility or reliability under Federal Rule of Evidence 702, the error would be harmless. View "United States v. DiMartino" on Justia Law

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Defendant, the former Speaker of the New York State Assembly, was convicted of two counts each of honest services mail fraud, honest services wire fraud, and Hobbs Act extortion, and one count of money laundering. The Second Circuit held that extortion under color of right and honest services fraud require that the official reasonably believe, at the time the promise is made, that the payment is made in return for a commitment to perform some official action. However, neither crime requires that the official and payor share a common criminal intent or purpose. The court also held that both offenses require that the official understand—at the time he accepted the payment—the particular question or matter to be influenced. In this case, the district court's instructions failed to convey this limitation on the "as the opportunities arise" theory, and the error was not harmless with respect to defendant's convictions under three counts. Furthermore, the evidence as to the same three counts was insufficient as a matter of law to sustain a guilty verdict, and thus the court remanded with directions to dismiss the indictment with prejudice as to them. The court found the error was harmless as to Counts 3s, 4s, and 6s, and affirmed defendant's conviction on those counts. Finally, the court affirmed defendant's conviction under Count 7s for money laundering, because that crime does not require the defendant to be convicted of the underlying criminal offenses, nor does it require the underlying offense to take place within the limitations period. View "United States v. Silver" on Justia Law

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The Second Circuit affirmed defendant's convictions for wire fraud, Title 18 securities fraud, conversion of U.S. property, and conspiracy, arising from the misappropriation of confidential information from the Centers for Medicare & Medicaid Services. The federal wire fraud, securities fraud, and conversion statutes, are codified at 18 U.S.C. 1343, 1348, and 641, respectively. The court held that confidential government information may constitute "property" for purposes of the wire fraud and Title 18 securities fraud statutes. The court also held that the "personal-benefit" test announced in Dirks v. SEC, 463 U.S. 646 (1983), does not apply to those Title 18 fraud statutes. Finally, the panel found no prejudicial error with respect to the remaining issues presented on appeal. View "United States v. Blaszczak" on Justia Law

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The Second Circuit affirmed defendants' convictions for honest services fraud and honest services fraud conspiracy, conspiracy to violate the Travel Act, and conspiracy to commit money laundering. However, the court held that the district court failed to employ a sound methodology to determine the victim's actual loss for restitution; the district court erred in ordering forfeiture of an amount that exceeded the amount of the criminal proceeds; and, under the circumstances of this case, Honeycutt v. United States, 137 S. Ct. 1626 (2017), did not foreclose ordering defendants jointly and severally to forfeit the proceeds each possessed as a result of their crimes. Accordingly, the court affirmed in part, vacated in part, and remanded for further proceedings. View "United States v. Tanner" on Justia Law

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Shortly after defendant was convicted of conspiracy to commit wire fraud and securities fraud, the Second Circuit decided United States v. Litvak, 889 2 F.3d 56 (2d Cir. 2018) (Litvak II), which held in the context of a similar prosecution that the erroneous and idiosyncratic viewpoint of a defendant's counterparty could not be relevant to the objective, "reasonable investor" standard for materiality in a securities fraud prosecution. The district court relied on Litvak II to grant defendant's motion for a new trial on the basis that counterparty testimony had been improperly admitted against defendant at trial. The court held, however, that the counterparty testimony at defendant's trial was not improperly admitted and did not implicate the court's holding in Litvak II. In this case, the testimony did not reflect the counterparty's idiosyncratic and erroneous belief, and the testimony was relevant to the jury's assessment of materiality under FRE 401. Furthermore, the testimony did not advance the government's theory of materiality in an impermissible manner. The court held that, even if the admission of the testimony did constitute error, the error was harmless. Finally, the district court's cumulative prejudice analysis did not provide a valid alternative ground for affirmance. Accordingly, the court reversed and remanded. View "United States v. Gramins" on Justia Law

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The Second Circuit affirmed defendant's conviction of wire fraud and conspiracy to commit wire fraud in connection with a foreign currency exchange transaction with Cairn Energy. Defendant was the former global head of the foreign exchange trading desk at the investment bank HSBC. The court held that there was sufficient evidence to convict defendant on the right‐to‐control theory because a reasonable jury could conclude that his misrepresentations to Cairn related to the price of the transaction, which was an essential element of the parties' bargain, and were capable of influencing Cairn's decisionmaking. View "United States v. Johnson" on Justia Law

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Defendant appealed the district court's denial of the government's motion under Federal Rules of Criminal Procedure 35(b)(2)(B) to resentence defendant based on his substantial assistance in the prosecution of others. The Second Circuit rejected the government's argument that the court lacked jurisdiction to hear the appeal. In a separate summary order filed under seal, the court affirmed the judgment on the merits. View "United States v. Doe" on Justia Law

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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

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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