Justia White Collar Crime Opinion Summaries

Defendant appealed his conviction for aggravated identity theft. At issue on appeal was whether a counterfeit paper check that bears a victim's true name, bank account number, and routing number was a "means of identification of another person" for the purposes of the aggravated identity theft statute, 18 U.S.C. 1028A, 1028(d)(7). The court concluded that, under the plain statutory language of the aggravated identity theft statute, the names and banking numbers on defendant's counterfeit check were a "means of identification." Accordingly, the court affirmed the judgment of the district court. View "United States v. Alexander" on Justia Law

Defendant was convicted of conspiracy to commit mail and wire fraud and conspiracy to commit tax fraud. On appeal, the government challenged defendant's sentence as substantively unreasonable and defendant cross-appealed, challenging her convictions. The court concluded that there was sufficient evidence to prove that defendant knowingly and intentionally joined in an agreement to defraud Best Buy; the evidence was sufficient to prove that defendant willfully committed affirmative acts constituting tax evasion and that a tax deficiency resulted; the evidence was sufficient to sustain defendant's tax fraud conspiracy since the evidence showed that she knowingly and intentionally entered an agreement with her husband to evade taxes and that she took an overt act in furtherance of the agreement; the evidence at trial was not "materially different" from the facts in the indictment and, therefore, no variance occurred and the district court did not err in denying her motion for acquittal on that basis; the district court did not abuse its discretion in rejecting defendant's claim that the verdict was against the weight of the evidence; and the district court did not abuse its discretion in denying defendant a new trial based on admission of Government Exhibit 17. Accordingly, the court affirmed defendants convictions. In regards to defendant's sentence, the court remanded for the district court to provide a fuller explanation of the sentence. View "United States v. Cole" on Justia Law

Defendant was convicted of twelve felonies stemming from her work as a tax preparer for various clients. The court concluded that the district court did not err in denying defendant's motion for judgment of acquittal as to Counts 1, 2, 4, and 5 of the superseding indictment where there was sufficient evidence for a rational jury to conclude that defendant's fraud scheme affected the banks within the meaning of 18 U.S.C. 1343, regardless of whether the banks ultimately suffered any actual loss; the predicate offenses for Counts 16 and 17 happened after 18 U.S.C. 1028A was enacted and, therefore, the jury was not wrong in convicting defendant of aggravated identity theft while relying on the predicate wire fraud offenses; the district court did not err in allowing defendant's former attorney to testify at the sentencing hearing where no attorney-client privilege was implicated; and the district court did not clearly err in calculating the loss and restitution amounts. Accordingly, the court affirmed the judgment. View "United States v. Stargell" on Justia Law

Defendant, a licensed physician who operated an in-home physical therapy services provider for Medicare patients (CMPM), appealed her conviction for ten counts of healthcare and Medicare fraud arising out of her operation of CMPM. The court affirmed the district court's denial of defendant's motion to dismiss the indictment where the district court properly recognized the independent factual basis that existed to clearly state an offense in the indictment, mooting the need to address defendant's rule of lenity/ambiguity challenge; affirmed the district court's denial of defendant's motion in limine to exclude evidence regarding her license because it was irrelevant, and exclusion of certain articles and Medicare regulation changes because they were not available to defendant to rely on at the time of her fraudulent conduct; the district court did not err by denying defendant her constitutional right to be present at all critical stages of her trial; and the district court did not err in denying defendant's motion for a new trial based on ineffective assistance of trial. Accordingly, the court affirmed the conviction. View "United States v. Thomas" on Justia Law

Gary and Deborah divorced in 2003 and agreed to a marital settlement. Gary purchased an annuity, to pay him $200 per month until his death; the settlement required him to pay her “$200 per month…in lieu of her interest in [the annuity].” Two years later, Gary filed for Chapter 7 bankruptcy and asked the court to discharge financial obligations to his ex-wife under the settlement. Gary attempted to blackmail Deborah into cooperation, using nude photos of her sister as a child. He is now in prison for bankruptcy fraud and possession of child pornography. 18 U.S.C. 152(6), 2252A(a)(5)(B). Deborah and the bankruptcy trustee agreed that she had an unsecured claim for $158,455.63, including $12,400 representing 62 monthly payments that the trustee had received under the annuity. Gary owned the annuity, so these payments were part of the bankruptcy estate and their inclusion in her claim was a mistake. The trustee successfully moved the bankruptcy judge to permit transfer to Deborah of $1000 in annuity payments collected since settling her claim, and to direct the company to make future payments to her directly. The Seventh Circuit reversed, directing the court either to order Deborah to return the $1000 or order the trustee to deduct it from her claim and to instruct the company to resume making payments to the trustee. View "Peel v. Peel" on Justia Law

abiu worked as a bank teller, 2003-2007. He searched account records for account holders with balances exceeding $100,000, then stole their information and, along with codefendants, compromised that information to divert money into fraudulently opened bank accounts. Postal inspectors lawfully searched his home and seized notes containing names, Social Security numbers, and account information of 86 customers, and an unspecified number of fake driver’s licenses and Social Security cards bearing the names of some of those customers, but only 17 customers suffered a loss. The losses were reimbursed by the banks. Rabiu pleaded guilty to bank fraud and aggravated identity theft, 18 U.S.C. 1344, 1029(a)(2), 1028A(a)(1), admitting participation in the scheme, but insisting that some of the names and identifying information on the phony driver’s licenses and Social Security cards were fictitious and not from customers. The government successfully sought a four-level upward sentencing adjustment under U.S.S.G. 2B1.1(b)(2)(B) based on 50 or more victims. The government cited a definition of “victim,” which, for offenses involving identity theft, was broadened in 2009, after Rabiu’s arrest, to include “any individual whose means of identification was used unlawfully or without authority.” The Seventh Circuit affirmed. Although the court overstated the number of victims, it was clear that the judge would have imposed the same sentence even had he accepted Rabiu’s calculation; the error was harmless. View "United States v. Rabiu" on Justia Law

Defendant was convicted under the Economic Espionage Act (EEA), 18 U.S.C. 1832, and the National Stolen Property Act (NSPA), 18 U.S.C. 2314, after he replicated his former employer's (the Bank) confidential computer code to give to a competitor in exchange for money. On appeal, defendant challenged the legal sufficiency of the charges in light of United States v. Aleynikov. The court concluded that, on plain-error review of defendant's defaulted legal sufficiency challenge to his EEA conviction, defendant failed to show that purported error in the pleading of the law's jurisdictional element affected his substantial rights or the fairness, integrity, or public reputation of judicial proceedings; on plain-error review of defendant's defaulted legal insufficiency challenge to his NSPA conviction, defendant failed to show that the theft of the computer code did not satisfy the law's goods, wares, or merchandise requirement; and defendant's remaining claims failed. Accordingly, the court affirmed the conviction. View "United States v. Agrawal" on Justia Law

Dayton Title brokered real estate closings and had a trust account at PNC Bank for clients’ funds. In 1998-1999, Dayton facilitated bridge loans from defendants to Chari, from $1.9 million to $3.2 million, for commercial real estate purchases. Defendants would deposit funds into Dayton’s PNC account, which Dayton would transfer to Chari. Chari’s loan payments would pass through Dayton’s account. The first six bridge loans were paid, but not always on time. Defendants provided Chari another bridge loan, for $4.8 million. After the due date, Chari deposited a $4.885 million check into Dayton’s account. The PNC teller did not place a hold on the check. On the same day, Dayton “pursuant to Chari’s instructions” issued checks to defendants. PNC extended a provisional credit for the value of Chari’s check, as is standard for business accounts. After the checks were paid, PNC learned that Chari’s check was a forgery drawn on a non-existing account, exercised its right of “charge back” on the Dayton account, and regained about $740,000 of the provisional credit. Dayton was forced into bankruptcy. Chari declared bankruptcy and was convicted of racketeering, fraud, and forgery. Dayton’s bankruptcy estate and PNC sued, seeking to avoid the $4.885 million transfer to defendants as fraudulent under 11 U.S.C. 548 and Ohio Rev. Code 1336.04(A)(2). The bankruptcy court held that all but $722,101.49 of the transfer was fraudulent. The district court held that all but $20,747.13 of the transfer was not fraudulent. The Sixth Circuit reversed the district court, reinstating the bankruptcy court holding. Dayton did not hold the provisional credit funds in trust; the funds were not encumbered by a lien at the time of transfer. The funds were “assets” held by Dayton, so the transfer satisfied the statutory definition of “fraudulent.” View "In re: Dayton Title Agency, Inc." on Justia Law

Trek was the importer of record for 72 entries of men’s suits in 2004. Mercantile was the consignee. Shadadpuri is president and sole shareholder of Trek, and a 40% shareholder of Mercantile. Trek and Mercantile provided a number of fabric “assists” to manufacturers outside the U. S. An assist refers to “materials, components, parts, and similar items incorporated in the imported merchandise,” 19 U.S.C. 1401a(h)(1)(A)(i). Customs determined that the entry documentation failed to include the cost of the fabric assists in the price paid for the suits which lowered the amount of duty payable by Trek. Shadadpuri had previously failed to include assists in entry declarations when acting on behalf of a corporate importer. The Court of International Trade found Shadadpuri liable for gross negligence in connection with the entry of imported merchandise and imposed penalties under 19 U.S.C. 1592(c)(2). The Federal Circuit reversed the penalty assessment, holding that corporate officers of an “importer of record” are not directly liable for penalties. Shadadpuri is not liable, absent piercing Trek’s corporate veil to establish that Shadadpuri was the actual importer of record, as defined by statute, or establishing that Shadadpuri is liable for fraud or as an aider and abettor. View "United States v. Trek Leather, Inc." on Justia Law

Stern represented Allen in a discrimination suit, after which they became romantically involved. Allen and her husband had separated and had executed a settlement agreement awarding Allen $95,000, to be paid in installments. A month later, Allen visited a bankruptcy attorney, Losey, giving Stern’s name as “friend/referral” on an intake form. In filing for bankruptcy, Allen did not disclose the marital settlement. While her bankruptcy was pending, Allen received the money. A month after her bankruptcy discharge, Allen transferred the settlement proceeds to Stern, who opened a CD in his name. The attorney for Allen’s ex-husband informed the bankruptcy trustee that Allen failed to disclose the settlementand the discharge was revoked. Allen pleaded guilty to making a false declaration in a bankruptcy proceeding, 18 U.S.C. 152(3). She told a grand jury that Stern had not referred her to Losey and was convicted of making a material false statement in a grand jury proceeding, 18 U.S.C. 1623. The court admitted Losey’s client-intake form as evidence of perjury. Stern was convicted of conspiring to commit money laundering, 18 U.S.C. 1956(h). The Seventh Circuit affirmed Allen’s conviction, holding that the intake form was not a communication in furtherance of legal representation and was not subject to attorney-client privilege. Reversing Stern’s conviction, the court held that the judge erred in excluding Stern’s testimony about why he purchased the CDs. View "United States v. Stern" on Justia Law