Justia White Collar Crime Opinion Summaries

Articles Posted in US Supreme Court
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Former Georgia police sergeant Van Buren used his credentials on a patrol-car computer to access a law enforcement database to retrieve license plate information in exchange for money. His conduct violated a department policy against obtaining database information for non-law-enforcement purposes. The Eleventh Circuit upheld Van Buren's conviction for a felony violation of the Computer Fraud and Abuse Act of 1986 (CFAA), which covers anyone who “intentionally accesses a computer without authorization or exceeds authorized access,” 18 U.S.C. 1030(a)(2), defined to mean “to access a computer with authorization and to use such access to obtain or alter information in the computer that the accesser is not entitled so to obtain or alter.”The Supreme Court reversed. An individual “exceeds authorized access” when he accesses a computer with authorization but then obtains information located in particular areas of the computer (files, folders, databases) that are off-limits to him. Van Buren “access[ed] a computer with authorization” and “obtain[ed] . . . information in the computer.” The phrase “is not entitled so to obtain” refers to information one is not allowed to obtain by using a computer that he is authorized to access.“Without authorization” protects computers themselves from outside hackers; the “exceeds authorized access” clause protects certain information within computers from "inside hackers." One either can or cannot access a computer system, and one either can or cannot access certain areas within the system. The Act’s precursor to the “exceeds authorized access” language covered any person who, “having accessed a computer with authorization, uses the opportunity such access provides for purposes to which such authorization does not extend.” Congress removed any reference to “purpose” in the CFAA. On the government’s reading, an employee who sends a personal e-mail or reads the news using a work computer may have violated the CFAA. View "Van Buren v. United States" on Justia Law

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During former New Jersey Governor Christie’s 2013 reelection campaign, Fort Lee’s mayor refused to endorse Christie. Kelly, Christie's Deputy Chief of Staff, Port Authority Deputy Executive Director, Baroni, and another official decided to reduce from three to one the number of lanes reserved at the George Washington Bridge’s toll plaza for Fort Lee’s commuters. To disguise the political retribution, the lane realignment was said to be for a traffic study. Port Authority traffic engineers were asked to collect some numbers. An extra toll collector was paid overtime. The lane realignment caused four days of gridlock, ending only when the Port Authority’s Executive Director learned of the scheme. The Third Circuit affirmed the convictions of Baroni and Kelly for wire fraud, fraud on a federally funded program, and conspiracy to commit those crimes. The Supreme Court reversed. The scheme did not aim to obtain money or property. The wire fraud statute refers to “any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses,” 18 U.S.C. 1343. The federal-program fraud statute bars “obtain[ing] by fraud” the “property” (including money) of a federally funded program or entity, section 666(a)(1)(A). The statutes are limited to the protection of property rights and do not authorize federal prosecutors to set standards of good government.The Court rejected arguments that the defendants sought to take control of the Bridge’s physical lanes or to deprive the Port Authority of the costs of compensating employees. Their realignment of the access lanes was an exercise of regulatory power; a scheme to alter a regulatory choice is not one to take government property. The time and labor of the employees were an incidental byproduct of that regulatory object. Neither defendant sought to obtain the services that the employees provided. View "Kelly v. United States" on Justia Law

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Lagos was convicted of using a company he controlled to defraud a lender of millions of dollars. After Lagos’ company went bankrupt, the lender conducted a private investigation and participated as a party in the company’s bankruptcy proceedings, spending nearly $5 million in legal, accounting, and consulting fees. When Lagos pleaded guilty to federal wire fraud charges, the court ordered him to pay the lender restitution for those fees. The Fifth Circuit affirmed, citing the Mandatory Victims Restitution Act of 1996, which requires defendants convicted of certain federal offenses, including wire fraud, to “reimburse the victim for lost income and necessary child care, transportation, and other expenses incurred during participation in the investigation or prosecution of the offense or attendance at proceedings related to the offense,” 18 U.S.C. 3663A(b)(4). The Supreme Court, acting unanimously, reversed. The words “investigation” and “proceedings” are limited to government investigations and criminal proceedings and do not include private investigations and civil or bankruptcy proceedings. A broader reading would require courts to resolve difficult, fact-intensive disputes about whether particular expenses “incurred during” participation in a private investigation were actually “necessary,” and about whether proceedings such as a licensing proceeding or a Consumer Products Safety Commission hearing were sufficiently “related to the offense.” The Court acknowledged that its interpretation means that some victims will not receive restitution for all of their losses, but reasoned that is consistent with the Act’s enumeration of limited categories. View "Lagos v. United States" on Justia Law

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In 2004-2009, the IRS investigated Marinello’s tax activities. In 2012, Marinello was indicted for violating 26 U.S.C. 7212(a) (the Omnibus Clause), which forbids “corruptly or by force or threats of force . . . obstruct[ing] or imped[ing], or endeavor[ing] to obstruct or impede, the due administration” of the Internal Revenue Code. The judge instructed the jury that it must find that Marinello “corruptly” engaged in at least one specified activity, but was not told that it needed to find that Marinello knew he was under investigation and intended corruptly to interfere with that investigation. The Second Circuit affirmed his conviction. The Supreme Court reversed. To convict a defendant under the Omnibus Clause, the government must prove the defendant was aware of a pending tax-related proceeding, such as a particular investigation or audit, or could reasonably foresee that such a proceeding would commence. The verbs “obstruct” and “impede” require an object. The object in 7212(a) is the “due administration of [the Tax Code],” referring to discrete targeted administrative acts rather than every conceivable task involved in the Tax Code’s administration. In context, the Omnibus Clause serves as a “catchall” for the obstructive conduct the subsection sets forth, not for every violation that interferes with routine administrative procedures. A broader reading could result in a lack of fair warning. Just because a taxpayer knows that the IRS will review her tax return annually does not transform every Tax Code violation into an obstruction charge. View "Marinello v. United States" on Justia Law