Justia White Collar Crime Opinion Summaries

Defendant was convicted of federal program bribery and extortion under color of official night. The convictions arose from charges that, while a state legislator, defendant secured state funding for a public university in exchange for employment by the university. The court held that the evidence was sufficient for the jury to convict defendant; the district court did not abuse its discretion in refusing to instruct the jury as to a gratuity; and the district court did not plainly err in its application of a fourteen-level sentencing enhancement. Accordingly, the court affirmed the judgment. View "United States v. Hamilton" on Justia Law

Defendants Jacqueline, Tamatha, and Jimmy Hilton challenged their convictions on charges involving a scheme to defraud the Woodsmiths Company. The charges in this case arose from a two-year scheme in which defendants defrauded the company by stealing and cashing numerous checks written to the company by its customers. At issue was whether the statutes prohibiting identity theft and aggravated identity theft, 18 U.S.C. 1028(a)(7) and 1028A, under which Jimmy and Jacqueline were convicted, encompassed the theft of the identity of a corporation. The court held that these statutes were fairly ambiguous regarding whether corporate victims were within the class of protected victims and vacated the conviction of Jimmy and Jacqueline on these counts. The court concluded that defendants' other arguments were without merit and therefore affirmed Tamatha's convictions, affirmed the remaining convictions of Jacqueline and Jimmy, but vacated the sentences imposed and remand those convictions for resentencing. View "United States v. Hilton, Jr." on Justia Law

Preacely pleaded guilty in 2009 to tax fraud, 26 U.S.C. 7206(2). The district court sentenced him to 18 months’ imprisonment to be followed by three years of supervised release, with a special condition, prohibiting him from participating in his former occupation of tax preparer. When the district court imposed the special condition, counsel asked: “may he own the business if he himself does not prepare any taxes himself?” The court responded, “No … you should not engage in the business of tax preparation directly or indirectly.” After his release from prison, Preacely transferred ownership of his business to his wife, but when an undercover IRS agent asked to speak to the vice-president, he was directed to Preacely. The IRS also executed a search warrant at the business and interviewed a number of employees. The district court revoked Preacely’s supervised release. The Seventh Circuit affirmed, rejecting arguments that the condition was unconstitutionally vague and that Preacely was involved only administratively with the business by doing things such as dropping off food, office supplies, and signing paychecks. View "United States v. Preacely" on Justia Law

Defendant was convicted of theft of government property arising from the fraud she carried out to obtain subsidized housing benefits in New York City. The district court ordered her to pay $11,274 in restitution to the New York City Housing Authority (NYCHA) and to forfeit $11,274 to the United States. The court concluded that because the money defendant was ordered to forfeit was "obtained" by her "indirectly" as a result of her offense, was "traceable to" that offense, and constituted the "net gain" from that offense, the forfeiture order was authorized by the plain language of the relevant forfeiture statue, 18 U.S.C. 981. Although defendant did not challenge the order of restitution, the court also concluded that the imposition of both forfeiture and restitution orders was proper in this case because the orders would be paid to different entities, were authorized by different statutes, and served different purposes. Accordingly, the court affirmed the judgment. View "United States v. Torres" on Justia Law

The United States obtained a judgment for restitution of more than $85 million against Lawrence Duran for crimes that he committed in a conspiracy to defraud Medicare. After the United States obtained a writ of execution against an apartment that, according to property records, was owned jointly by Lawrence and his former wife, Carmen Duran, she moved to dissolve or stay the writ on the ground that she had acquired sole title to the property as part of their divorce settlement several months before his prosecution. The district court denied the motion without prejudice on the grounds that it lacked jurisdiction. Because the Fair Debt Collection Practices Act, 28 U.S.C. 3203(a), provided that the United States could levy only property in which a judgment debtor had a substantial nonexempt interest, the district court erred in refusing to adjudicate Carmen's motion. Accordingly, the court vacated the order and remanded for further proceedings. View "United States v. Duran" on Justia Law

Huber operated a Ponzi scheme in which 118 investors lost a total of $22.6 million. He told investors, mainly friends and acquaintances, who trusted him, that he administered investment funds, using a computer trading model. He pleaded guilty to mail fraud and related crimes, and was sentenced to 20 years in prison. A receiver appointed to marshal and distribute remaining assets found $7 million, roughly 24 percent of the total amount and has distributed all but about $1 million to the 118 investors. Instead of distributing recovered assets pro rata among the investors, the receiver made a distinction, counting withdrawals made before discovery of the scheme as partial compensation (“rising tide” method). Those investors argue that he should have used the “net loss” method, under which each investor would receive a sixth of his loss. The district court approved the method of distribution. The Seventh Circuit affirmed, reasoning that the investors did not withdraw “their money,” but withdrew portions of the commingled assets in the Ponzi schemer’s funds. View "Merel v. Duff" on Justia Law

Four partners and employees of Ernst & Young, one of the largest accounting firms in the world, appealed their convictions in connection with the development and defense of five "tax shelters" that were sold or implemented by the firm between 1999 and 2001. At issue, among other things, was the scope of criminal liability in a conspiracy to defraud the United States under 18 U.S.C. 371 and the sufficiency of the evidence with respect to the criminal intent of certain defendants. The court held, among other things, that defendants' challenge to the so-called Klein conspiracy theory of criminal liability under section 371 failed under the law of the Circuit, which remained good law absent review or modification by the Supreme Court; with respect to sufficiency challenges, the court reversed some convictions based on insufficient evidence; and venue was proper with respect to Count Six, which charged defendant Vaughn with false statements to the IRS. The court addressed the remaining issues and affirmed in part, reversed in part, and vacated and remanded in part. View "United States v. Coplan (Nissenbaum)" on Justia Law

In 2008, Baniel (an LLC owned by Coffman), Coffman, and her husband Bryan obtained financing from Bank of America to purchase a yacht, giving Bank of America a secured interest. Months later, the United States filed a civil forfeiture in rem complaint against several properties, owned by Coffman and Bryan, alleged to be proceeds of fraud and money laundering. Given the pending criminal investigations, the district court immediately stayed civil forfeiture proceedings. Coffman filed a verified claim to the yacht in 2009. Coffman was acquitted in 2011, but Bryan was convicted of mail fraud, wire fraud, securities fraud, and money laundering. Payments to Bank of America have not been made since December 2009, and approximately $637,000 is owed on the note. In February 2011, Bank of America and the government filed a joint motion for interlocutory sale of the yacht. Baniel sought release of the yacht to Coffman’s custody. In February 2012, the district court ordered the interlocutory sale, denied release of the yacht to Baniel, and joined the civil action with the ongoing criminal action. Baniel and Coffman sought a stay of the sale pending appeal, which was denied by the district court. The Sixth Circuit affirmed all orders. View "United States v. Real Prop. & Residence" on Justia Law

Defendant pled guilty to copyright infringement and mail fraud. Pursuant to the Mandatory Victim Restitution Act (MVRA), 18 U.S.C. 3663A, the district court ordered him to pay restitution to Adobe Systems in an amount equivalent to the revenue he received from his sales of the pirated products. The court vacated the order because the government failed to meet its burden to present evidence from which the district court could determine Adobe Systems' actual loss as a result of the pirated sales. View "United States v. Fair" on Justia Law

Two former employees of Coca-Cola claim that they were injured while performing their jobs. They reported their injuries to Coca-Cola’s third-party administrator for worker’s compensation claims, Sedgwick, which denied benefits. Plaintiffs claim that the medical evidence strongly supported their injuries, but that Sedgwick engaged in a fraudulent scheme involving the mail: using Dr. Drouillard as a “cut-off” doctor. They sued alleging that the actions of Sedgwick, Coca-Cola, and Dr. Drouillard violated the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1961(1)(B), 1962(c), and 1964(c). The district court dismissed. The Sixth Circuit reversed and remanded, noting that since the dismissal, several of the issues were resolved by its 2012 opinion in another case. The district court misapplied the elements of a RICO cause of action to the plaintiffs’ allegations. The court declined to abstain from exercising jurisdiction pending the outcome of state workers comp proceedings. The alleged acts have the same purpose: to reduce Coca-Cola’s payment obligations towards worker’s compensation benefits by fraudulently denying worker’s compensation benefits to which the employees are lawfully entitled. The allegations suggest that the defendants’ scheme would continue on well past the denial of any individual plaintiff’s benefits View "Jackson v. Segwick Claims Mgmt Serv., Inc." on Justia Law