Justia White Collar Crime Opinion Summaries

Danial Curtis was convicted of the unauthorized use of personal identifying information. At trial, a bank teller testified Curtis entered the bank where she worked producing a check for cashing. The teller noticed several "red flags" on the check; her manager testified to noticing the same red flags. The manager contacted the account holder to inquire if the check was authorized; the account holder testified she had thrown out any checks she had remaining once she closed the account. Representing himself, Curtis called a friend who testified Curtis was not attempting to cash the check, but was only attempting to see if the check was valid. Based on the evidence presented, the district court found beyond a reasonable doubt Curtis willfully presented the check to cash, and found Curtis guilty of the unauthorized use of personal identifying information "to obtain money without the authorization of consent of the holder of the account, and the value of the money exceeded $1,000." On appeal, Curtis argued there was insufficient information presented to support his conviction. Finding no reversible error, the North Dakota Supreme Court affirmed Curtis' conviction. View "North Dakota v. Curtis" on Justia Law

Carolyn Nelson appealed her conviction from a bench trial for the crime of accomplice to theft. Nelson was the president of the Oberon School Board. Laura Schnieber-Bruns and her business, Victim Survivor the Voice, LLC, were engaged to perform services for the school. The exact nature of the services was disputed, but an agreement signed by Nelson and Schnieber-Bruns described the work as “investigate, research, compile and deliver ongoing actions request of the Oberon School Board.” The agreement specified a “set-up fee” of $7,500, an “on-going management” fee of $7,500, and a $200 hourly rate for “services outside the scope of this Agreement.” Schnieber-Bruns was later charged with class A felony theft for taking more than $150,000 from the Oberon School “through a deceptive scheme pursuant to” the agreement. She pleaded guilty by an Alford plea. Nelson challenged her conviction as an accomplice. The North Dakota Supreme Court affirmed, concluding the evidence was sufficient to sustain the conviction. The Court declined to address issues Nelson did not raise at the district court or brief on appeal under the obvious error standard of review. View "North Dakota v. Nelson" on Justia Law

In 2011, the automaker FCA transferred the work that plaintiffs (engineers) had previously performed at FCA’s company headquarters to a new location. The plaintiffs filed a grievance with their union, UAW, in 2016. UAW failed to pursue it. In 2017, plaintiffs filed essentially the same grievance, but UAW again did not pursue it. By this time, plaintiffs had learned of a massive bribery scheme involving FCA and UAW; they believed that those bribes had affected the 2011 job-relocation process and UAW’s treatment of their grievances. In 2018, plaintiffs filed the same grievance again. Nearly two years later, UAW found the grievance meritorious.Plaintiffs sued FCA, UAW, and individual defendants in 2020, raising claims under the Labor Management Relations Act (LMRA), 29 U.S.C. 185(a), and the Racketeer Influenced and Corrupt Organizations Act (RICO). The Sixth Circuit affirmed the dismissal of the claims as untimely under the LMRA’s six-month limitations period. Plaintiffs pursuing a hybrid LMRA claim must sue once they “reasonably should know that the union has abandoned” their claim. Plaintiffs learned of their RICO injuries as early as 2011 and learned of the bribery allegations in 2017 but waited until 2020 to file their complaint, with no explanation for the delay. View "Baltrusaitis v. United Auto Workers" on Justia Law

Defendant-appellant Matthew Mazur appealed his third sentencing for multiple criminal offenses arising out of a fraudulent investment scheme. The sole issue raised on appeal of his reduced 23-year prison sentence was that the trial court erred by refusing to dismiss a five-year white-collar enhancement for loss greater than $500,000. Mazur argued the trial court was required to dismiss this enhancement because its imposition “result[ed] in a sentence of greater than 20 years.” Finding no reversible error, the Court of Appeal affirmed. View "California v. Mazur" on Justia Law

During a traffic stop, Tellez agreed to a car search. After the search, the officer asked, “Do you have your wallet?” Tellez handed it over. Inside, the officer discovered three Visa gift cards, each with numbers written on the back, which the officer believed was indicative of fraud. The officer asked whether he could swipe the cards. Tellez agreed but then said, “I don’t give permission.” The officer nevertheless swiped the cards. The numbers did not match the cards, indicating they had been altered. Tellez was indicted for conspiracy to defraud the U.S., bank fraud, and aggravated identity theft. He moved to suppress all evidence derived from the wallet search but did not challenge the officer’s decision to swipe the cards.After reviewing a video recording of the traffic stop and the officer’s testimony, the court denied Tellez’s motion, concluding that Tellez’s gesture of handing over his wallet reflected his nonverbal, voluntary consent. Tellez entered a conditional guilty plea. Tellez objected to the intended loss calculations used to derive his Guidelines offense level. The three cards had been used to spend or withdraw an average of $1,400 per card. The probation office calculated the intended loss by multiplying the number of accounts associated with Tellez—303, including 300 other accounts found on a thumb drive in Tellez’s possession—by $1,400. The court agreed with the government. The Sixth Circuit affirmed the denial of the motion to suppress and Tellez’s 70-month sentence. View "United States v. Crespo" on Justia Law

Plaintiffs Coronavirus Reporter, CALID, Inc., Primary Productions LLC, and Dr. Jeffrey D. Isaacs sued Defendant Apple for its allegedly monopolist operation of the Apple App Store. The district court dismissed the claims with prejudice for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6) and denied the remaining motions as moot. Plaintiffs-Appellants appealed.   The Ninth Circuit affirmed. The panel held that Plaintiffs failed to state an antitrust claim under Section 1 or Section 2 of the Sherman Act, arising from Apple’s rejection of their apps for distribution through the App Store, because they did not sufficiently allege a plausible relevant market, either for their rejected apps as compared to other apps, or for apps in general. The panel held that Plaintiffs failed to state a claim for breach of contract under California law because they did not identify relevant specific provisions of Apple’s Developer Agreement or Developer Program License Agreement or show that Apple breached a specific provision. View "CORONAVIRUS REPORTER, ET AL V. APPLE, INC., ET AL" on Justia Law

This appeal related to "electronic-bingo" operations conducted by the Department of Alabama Veterans of Foreign Wars of the United States ("the VFW") at some of its Alabama posts. Travis Whaley and Randall Lovvorn contracted with the VFW to superintend and promote its electronic-bingo operations. Between 1997 and 2013, Whaley served the VFW as adjutant, commander, and quartermaster at different times. For his part, Lovvorn served as the VFW's accountant. The VFW contracted with G2 Operations, Inc. ("G2"), to conduct its electronic-bingo operations. Under contract, G2 agreed to conduct electronic-bingo operations at VFW posts throughout Alabama, and the VFW would receive 10% of the gross revenue. All the proceeds from electronic bingo were deposited into a VFW bank account. The VFW also entered into contracts with Whaley and Lovvorn, assigning them specific roles in its electronic-bingo operations. Several years later, after being notified of a tax penalty from the IRS, the VFW discovered a shortfall of $1,782,368.88 from what it should have received under its contracts with G2. The VFW filed a complaint asserting claims against G2 as well as additional claims against other parties, which were eventually whittled down throughout litigation until only claims against Whaley and Lovvorn remained. A jury reached a verdict against Whaley and Lovvorn on VFW's claims of breach of contract, fraudulent suppression, and conversion, awarding $1,782,368.88 in compensatory damages and $2,000,000 in punitive damages. Because the VFW's claims rely upon its own involvement in illegal transactions, the Alabama Supreme Court reversed the trial court's judgment and rendered judgment in favor of Whaley and Lovvorn. View "Whaley, et al. v. Dept. of Alabama Veterans of Foreign Wars of the United States" on Justia Law

In 2008-2010, Shah engaged in fraudulent transactions involving three luxury condominiums owned by Hwang, ultimately using the property to obtain over $2 million in loans. Shah was convicted of multiple crimes. Enhancement allegations, including taking a property valued over $3.2 million and special findings, including a pattern of white-collar crime. were found true. A 2015 restitution order remains unpaid. Hwang filed a civil action against Shah and, in 2018, secured a civil judgment—over $3.8 million.In 2021, the trial court levied property under Penal Code 186.11, the “Freeze and Seize” law, which is intended to prevent a defendant from disposing of assets pending trial, and then use the assets to pay restitution after conviction. Shah argued that a trial court must seize any properties under section 186.11 no later than the sentencing hearing.The court of appeal affirmed. Shah sought to import time limitations into the statute and ignored the legislative purpose of section 186.11 and California’s over-arching statutory framework for restitution in criminal cases. California recognizes restitution for crime victims as a constitutional right. The court’s authority does not change even after the Courts of Appeal decide a criminal case. The lack of a disposition formally remanding Shah’s original appeal for further proceedings was no bar to the trial court’s levying order. View "People v. Shah" on Justia Law

Pacilio and Bases were senior traders on the precious metals trading desk at Bank of America. While working together in 2010-2011, and at times separately before and after that period, they engaged in “spoofing” to manipulate the prices of precious metals using an electronic trading platform, that allows traders to place buy or sell orders on certain numbers of futures contracts at a set price. It is assumed that every order is bona fide and placed with “intent to transact.” Spoofing consists of placing a (typically) large order, on one side of the market with intent to trade, and placing a spoof order, fully visible but not intended to be traded, on the other side. The spoof order pushes the market price to benefit the other order, allowing the trader to get the desired price. The spoof order is canceled before it can be filled.Pacilio and Bases challenged the constitutionality of their convictions for wire fraud affecting a financial institution and related charges, the sufficiency of the evidence, and evidentiary rulings relating to testimony about the Exchange’s and bank prohibitions on spoofing to support the government’s implied misrepresentation theory. The Seventh Circuit affirmed. The defendants had sufficient notice that their spoofing scheme was prohibited by law. View "United States v. Bases" on Justia Law

In 2018, Kousisis and Alpha Painting were convicted of conspiracy to commit wire fraud, 18 U.S.C. 1349, and three counts of wire fraud, 18 U.S.C. 1343. The charges arose from false documents filed concerning “disadvantaged business enterprise” status in transportation construction projects for which the U.S. Department of Transportation provided funds through the Federal Highway Administration to the Pennsylvania Department of Transportation. The district court imposed a 20-point sentencing enhancement under U.S.S.G. 2B1.1(b)(1), which corresponds to a loss of $9.50 million-$25 million, noting that the actual loss to the government was not measurable at the time of sentencing and concluding that Alpha’s “ill-gotten profits” represented an appropriate measure of loss.The Third Circuit affirmed the convictions. The defendants secured PennDOT’s money using false pretenses and the value PennDOT received from the partial performance of those painting and repair services is no defense to criminal prosecution for fraud. The court vacated the calculation of the amount of loss for sentencing purposes, noting the extreme complexity of the case. The victim’s loss must have been an objective of the fraudulent scheme; it is insufficient if that loss is merely an incidental byproduct of the scheme. The court separately vacated a forfeiture order of the entire profit amount on the contracts. View "United States v. Alpha Painting & Construction Co., Inc." on Justia Law