Justia White Collar Crime Opinion Summaries

Petitioner, in his capacity as the State Director of the United Public Workers, AFSCME, Local 646, AFL-CIO (UPW), negotiated contracts with dental and health insurance providers, HDS and PGMA, on behalf of UPW members and their families. A jury subsequently convicted petitioner of fifty counts of "theft of honest services" from the UPW and its members, as well as conspiracy, embezzlement, money laundering, and health care fraud. At issue was the instructional omission to the jury regarding honest services fraud in light of the Supreme Court's holding in Skilling v. United States. The court held that the error had no "substantial and injurious effect or influence in determining the jury's verdict." Accordingly, the court affirmed the theft of honest services, money laundering, and health care fraud judgments of conviction against petitioner and affirmed the judgment of the district court. View "United States v. Gary Rodrigues" on Justia Law

Defendant pled guilty to one count of structuring financial transactions and was sentenced to thirty months in prison. On appeal, defendant challenged the procedural and substantive reasonableness of his sentence. The court held that the district court did not commit any procedural error in sentencing defendant and that court adequately explained the sentence it imposed and its reasons for denying both a downward departure and a variance. The court also held that defendant's sentence was substantively reasonable where the district court sentenced him at the bottom of the Guidelines range, after taking into account various factors such as his military service, health, age, and role in the crime. Accordingly, the court affirmed the judgment. View "United States v. Bordeaux, Jr." on Justia Law

Former Louisiana congressman, William J. Jefferson (defendant), was convicted of eleven offenses - including conspiracy, wire fraud, bribery, money laundering, and racketeering - arising from his involvement in multiple bribery and fraud schemes. Defendant appealed his convictions on several grounds: (1) that an erroneous instruction was given to the jury with respect to the bribery statute's definition of an "official act"; (2) that another erroneous instruction was given with respect to the "quid pro quo" element of the bribery-related offenses; (3) that defendant's schemes to deprive citizens of honest services did not constitute federal crimes; and (4) that venue was improper on one of his wire fraud offenses. The court affirmed each of defendant's conviction except his Count 10 wire fraud conviction and sentence, which the court vacated and remanded for such further proceedings as may be appropriate. View "United States v. Jefferson" on Justia Law

Husband established two "multi-level marketing" companies (pyramid schemes) that supposedly sold health and dietary supplements, but actually sold very little. Wife recruited new members, primarily from an immigrant community. New members would make an initial investment and then receive part of the investments paid in by new recruits. Wife urged potential investors to borrow to invest at the highest possible level, promised that there was no need to sell merchandise, and promised lifetime payments. The couple lived lavishly until they could find no more new investors. By the time the scam imploded, roughly 500 investors had lost about $20,000,000. Both were convicted of numerous counts of mail-fraud, money-laundering, and conspiracy (18 U.S.C. 1341, 1957, 371). Having affirmed husband's convictions in an earlier opinion, the First Circuit affirmed wife's convictions. The court rejected arguments concerning sufficiency of the evidence, wife's knowledge, the elements of money-laundering, and variance from the indictment. View "United States v. Tan" on Justia Law

Three individuals (once known as the "Bad Boys' of Chicago Arbitrage") established "Loop" as a closely-held corporation for their real estate holdings in 1997. A family trust for Loop's corporate secretary (50% owner) owns Banco, which gave Loop a $9.9 million line of credit in 2000. On the same day, Loop subsidiaries entered into a participation agreement on the line of credit through which they advanced $3 million to Loop, giving the subsidiaries senior secured creditor status over Loop's assets. The now-creditor subsidiaries were also collateral for funds loaned Loop. In 2001 Loop received a margin call from Wachovia. The Banco-Loop line of credit matured and Loop defaulted. Banco extended and expanded the credit. Loop’s debt to Wachovia went unpaid. Loop invested $518,338 in an Internet golf reservation company; moved real estate assets to Loop Properties (essentially the same owners); and paid two owners $210,500 “compensation” but never issued W-2s. Wachovia obtained a $2,478,418 judgment. The district court pierced Loop’s corporate veil, found the owners personally liable, and voided as fraudulent Banco’s lien, the “compensation” payments, and payments to the golf company. The Seventh Circuit affirmed, except with respect to the golf company. View "Wachovia Secs., LLC v. Banco Panamericano, Inc." on Justia Law

Romasanta worked in Chicago as an expediter, helping developers obtain construction permits. In testifying against Curescu, a developer, she admitted bribing 25 to 30 city employees between 2004 and 2007. She paid an $8,000 bribe to a zoning inspector on behalf of Curescu. Convicted of bribery of an agency that receives federal assistance, 18 U.S.C. 666 and conspiracy, 18 U.S.C. 371, Curescu was sentenced to six months and the zoning inspector to 41 months in prison. The Seventh Circuit affirmed, rejecting various challenges to testimony and to the court's refusal to severe the cases. View "United States v. Olivella" on Justia Law

Sanchez rose through the ranks of Chicago politics and became Commissioner of Streets and Sanitation. He was a leader of the Hispanic Democratic Organization, and, acting as a city official and a political operative, participated in a scheme to award city jobs to campaign workers in violation of orders and consent decrees, known as the Shakman decrees, enjoining the city from patronage hiring for most positions. Del Valle managed campaigns staffed by Sanchez's branch of the HDO and had significant influence in choosing individuals for positions. On retrial, Sanchez was convicted of mail fraud, 18 U.S.C. 1341 and Del Valle of perjury, 18 U.S.C. 1623. The Seventh Circuit affirmed, rejecting arguments concerning the court's handling of testimony about driving while intoxicated and arguing with a police officer; denial of severance; and the government's failure to prove economic loss. City jobs are money or property for purposes of mail fraud and the indictment sufficiently alleged deprivation of money or property.View "United States v. Delvalle" on Justia Law

Defendant accepted $1,000 and Mets tickets for helping a consulting company obtain a contract with the county for temporary employment of individuals for clean-up after a 2006 flood. He pled guilty to violating 18 U.S.C. 666(a)(1)(B). The presentence report recommended a sentence of 15 to 21 months' imprisonment. USSG 2C1.2(a)(1) set the base offense level at 11; the report added two levels under 2C1.2(b)(1) because the offense involved more than one gratuity and four levels under 2C1.2(b)(3) because the offense involved a public official in a high-level decision-making or sensitive position. It subtracted three levels for acceptance of responsibility (3E1.1). The district court imposed a sentence of 15 months' imprisonment. The Third Circuit affirmed. Defendant could not hire or fire; could not bind the county; could not act officially on the county's behalf; had administrative, not policymaking, duties; and reported to superiors, who reported to County Commissioners. The high-level government official enhancement was not applied to his superior, also implicated in the bribery scheme. Defendant was, however, responsible for the human resource department. View "United States v. Richards" on Justia Law

In 2009, fire severely damaged the insureds' home. They submitted a claim to under their homeowners’ policy the next day. The insurer began requesting documents, authorizations, and interviews and learned that the insureds had at least two businesses, held numerous personal and business accounts, and were involved in several lawsuits. A fire investigator concluded that the fire was intentionally set. The insurer requested additional documents: detailed phone records, bank histories, tax returns, and mortgage information and reminded the insureds that proof of loss was due by May 2. The insurer granted extensions; on the day of the final deadline the insureds delivered almost 1,000 pages of documents. Several months later, the insurer had not received most of the requested documents or an explanation why they could not be produced. After initially acknowledging their failure to produce the documents, the insureds attempted to impose a deadline for settlement of the $2.6 million claim. The district court entered summary judgment for the insurer in the insureds' breach of contract suit. The Seventh Circuit affirmed. The insureds failed to perform the specific "duties after loss" listed in the policy.View "Foster v. State Farm Fire and Cas. Co." on Justia Law

In this case, an insurance agency had a contract with an insurance company that allowed the agency to commingle collected insurance premiums with its other funds in its general operating account. The government contended that the premiums collected by the agency were the property of the insurance company and held "in trust" by the agency; it alleged that when the funds were not remitted but used for other purposes, they were embezzled by the agency's treasurer, defendant. Defendant was charged with ten counts of embezzlement of insurance premiums in violation of 18 U.S.C. 1033(b)(1) and one count of conspiracy to commit embezzlement. The court held that under long-standing Arizona law, the contract between the agency and the company, which permitted agency commingling, required monthly agency payments whether premiums were collected or not, and created a right of interest on late payments, created a creditor-debtor relationship, not a trust. The agency had contractual and fiduciary duties to the company, but was not a trustee. Because the funds in question were not held "in trust" by the agency as a matter of law, an essential element of embezzlement was lacking. Therefore, the court reversed the denial of defendant's motion for judgment of acquittal. View "United States v. Lequire" on Justia Law