Justia White Collar Crime Opinion Summaries

Hill and his wife incorporated a tax service business, run out of their apartment, then obtained the names, birth dates, and social security numbers of real individuals and filed approximately 121 false tax returns for the tax year 2005, amounting to approximately $525,460 in false filings. In total, the IRS issued approximately $353,500 in tax refunds, which were electronically transferred to value cards which Hill was able to redeem for cash. Hill pled guilty to conspiracy to defraud the U.S.,18 U.S.C. 286 and one of 20 charged counts of fraud in connection with identity theft, 18 U.S.C. 1028(a)(7) and was sentenced to 92 months in prison. The Seventh Circuit affirmed, finding the sentence reasonable. View "United States v. Hill" on Justia Law

Defendant, a loan officer, recruited buyers to obtain mortgage loans for which they were not qualified by using false information. He was convicted of conspiracy to commit wire fraud and bank fraud, 18 U.S.C. 1349, and bank fraud, 18 U.S.C. 1344. The Second Circuit affirmed. The district court did not err by allowing jurors, after the beginning of jury deliberations and after receiving various cautionary instructions, to take the indictment home to read on their own time. View "United States v. Esso" on Justia Law

Defendant threatened to reveal office gossip that the General Counsel of the New York State Comptroller's Office was having an affair unless the General Counsel recanted a recommendation to the State Comptroller to reject a proposal by defendant's company. He was convicted of attempted extortion of the office under the Hobbs Act, 18 U.S.C. 1951(a), and interstate transmission of extortionate threats in violation of 18 U.S.C. 875(d). The Second Circuit affirmed, rejecting his argument that his conduct did not come within the statutory definition of extortion because he did not "attempt to obtain property" from the General Counsel. View "United States v. Sekhar" on Justia Law

Plaintiff-Appellant Waterford Investment Services, Inc. appealed the district court’s ruling that it must arbitrate certain claims that a group of investors brought before the Financial Industry Regulatory Authority (FINRA). The investors alleged in their FINRA claims that they received bad advice from their financial advisor, George Gilbert. The investors named Gilbert, his current investment firm, Waterford, and his prior firm, Community Bankers Securities, LLC (CBS), among others as parties to the arbitration. In response, Waterford filed this suit asking a federal district court to enjoin the arbitration proceedings and enter a declaratory judgment that Waterford need not arbitrate the claims. The district court, adopting the recommendations of a magistrate judge, concluded that because Gilbert was an "associated person" of Waterford during the events in question, Waterford must arbitrate the investors' claims. Upon review of the matter, the Fourth Circuit affirmed, finding that Gilbert was inextricably an "associated person" with Waterford, and that the district court did not abuse its discretion in adopting the magistrate judge's opinion. View "Waterford Investment Services v. Bosco" on Justia Law

As one of the largest developers in Cincinnati, Erpenbeck defrauded buyers and banks out of nearly $34 million. Erpenbeck pled guilty to bank-fraud in 2003, received a 300-month sentence, and was ordered to forfeit proceeds: $33,935,878.02, 18 U.S.C. 982(a). The FBI later learned that Erpenbeck had given a friend more than $250,000 in cash. The friend put the cash in a cooler and buried it on a golf course. Agents unearthed the cooler. The government sought forfeiture of the cash and posted online notice in 2009. Three months later, the trustee of Erpenbeck’s bankruptcy estate contacted an Assistant U.S. Attorney, told her the estate had an interest in the cash and asked about the government's plans. The attorney did not mention the forfeiture proceedings. Because no one asserted an interest, the district court entered an order vesting title to the cash in the government, 21 U.S.C. 853(n)(7). The trustee sought to stay the order in November 2010. The district court denied the motion because the trustee did not file a timely petition. The Sixth Circuit vacated. Even though the trustee’s interest in the cash was "far from a mystery," the government did not take even the "modest step" of sending a certified letter. View "United States v. Erpenbeck" on Justia Law

During 2000-2002, defendant and co-defendant were associated in five instances of depositing large bad checks (one for $15,000,000) in three different bank accounts (the one at issue in the name of a defunct corporation), then writing checks against the resulting, ostensible account balances or requesting substantial wire transfers from them. They were indicted for conspiracy to commit bank and wire fraud, 18 U.S.C. 371, bank fraud, 18 U.S.C. 1344, wire fraud, 18 U.S.C. 1343, and money laundering, 18 U.S.C. 1957. Defendant was charged both as a principal and as aiding and abetting co-defendant, who negotiated guilty pleas. Defendant was convicted. He appealed, claiming insufficiency of the evidence to show anything more than his mere (innocent) presence at some events in the sequence of the transactions charged, and abridgement of his Sixth Amendment right to jury trial when the trial judge closed the courtroom doors during jury instructions. The First Circuit affirmed. View "United States v. Christi" on Justia Law

In the 1990s debtors owned a business that failed and incurred liabilities from unpaid taxes. They had a monthly payment obligation to the IRS. Husband obtained employment; 2003 to 2009, his yearly gross income was between $53,000 and $59,000. In addition, he receives $1,300 per month from a settlement annuity. Wife was employed as a bookkeeper until 1999. In 2000, she pled guilty to felony embezzlement of funds from her former employer and was sentenced to probation and required to pay restitution of $800 per month. Before her indictment wife obtained employment as a bookkeeper for plaintiff, began embezzling, and deposited stolen funds to Debtors’ joint bank accounts. By 2006, she had embezzled $283,391.88 from plaintiff and forged credit card purchases of $2,821.43. In 2007, she embezzled $328,516.10. In 2008, she embezzled $11,230.21. She stole goods valued at $127,156 from her employer. Debtors spent accordingly. The Bankruptcy Court entered an order excepting debt owed to plaintiff from discharge under 11 U.S.C. 523(a)(6), finding that husband conspired with wife to convert embezzled funds and other property. The Sixth Circuit affirmed, holding that Debtors’ conduct constituted willful and malicious injury to plaintiff. View "In re: Cottingham" on Justia Law

Principals of Cybercos defrauded lending institutions out of more than $100 million in loan. In 2002, Huntington granted Cyberco a multi-million-dollar line of credit, and Cyberco granted Huntington a continuing security interest and lien in all of Cyberco's personal property, including deposit accounts. After discovering the fraud, the government seized approximately $4 million in Cyberco assets, including $705,168.60 from a Huntington Bank Account. Cyberco principals were charged in a criminal indictment with conspiring to violate federal laws relating to bank fraud, mail fraud, and money laundering. Count 10 issued forfeiture allegations against individuals regarding Cyberco assets, including the Account. In their plea agreements, defendants agreed to forfeit any interest they possessed in the assets or funds. The district court entered a preliminary order of forfeiture with regard to the assets, including the Account. Huntington filed a claim, asserting ownership interest in the forfeited Account. The district court found that Huntington did not have a legal claim. On remand, the district court again denied the claim. The Sixth Circuit reversed. A party who takes a security interest in property, tangible or intangible, in exchange for value, can be a bona fide purchaser for value of that property interest under 21 U.S.C. 853(n)(6)(B). View "United States v. Huntington Nat'l Bank" on Justia Law

Mitchell was a partner in the Cleveland law firm from the early 1980s until 2006. There was no formal partnership agreement; each partner practiced in a different area of law, and each represented his clients with essentially no oversight, but shared evenly in the firm's profits. Mitchell was indicted for his involvement in a long-running scheme to bribe the auditor of Cuyahoga County into awarding overvalued contracts for appraisal work to a company formed by his law partners. The indictment charged conspiracy to commit bribery concerning programs receiving federal funds, 18 U.S.C. 371; bribery concerning programs receiving federal funds, 18 U.S.C. 666(a)(2); and conspiracy to violate the Hobbs Act, 18 U.S.C. 1951. The district court granted Mitchell acquittal on the Hobbs Act charge, but a jury convicted him of the remaining two counts. He was sentenced to 97 months. The Sixth Circuit affirmed, rejecting a challenge to the jury instruction that deliberate ignorance, in some instances, can constitute knowledge, and a challenge to the sentence. View "United States v. Mitchell" on Justia Law

Stokes owned 1Point, which managed employee-benefits plans and 401(k) retirement plans as a third-party administrator (TPA). Most were governed by the Employee Retirement Income Security Act, 29 U.S.C. 1002. TPAs generally provide record-keeping and assist in transferring money, but do not handle money or securities. Stokes directed clients to send funds to accounts he had opened in 1Point’s name. Cafeteria plan clients deposited $45 million and 401(k) clients deposited $5.7 million in accounts at Regions. Because the accounts bore 1Point’s name, Stokes was able to transfer money. Between 2002 and 2006, Stokes stole large sums. Regions failed to comply with the Bank Secrecy Act, 31 U.S.C. 3513, requirements to report large currency transactions, file suspicious-activity reports, verify identities for accounts, and maintain automated computer monitoring. In 2004, the U.S. Financial Crimes Enforcement Network assessed a $10 million fine against Regions. In 2006, Stokes and 1Point filed for bankruptcy. The Trustee filed suit against Regions in bankruptcy court on behalf of victimized plans for which he assumed fiduciary status. The suit was consolidated with plaintiffs’ suit. The district court withdrew the Trustee’s case from bankruptcy court, dismissed ERISA claims, and found that ERISA preempted state law claims. The Sixth Circuit affirmed. View "McLemore v. Regions Bank" on Justia Law