Justia White Collar Crime Opinion Summaries

Defendant was convicted of numerous offenses relating to her involvement in a fraudulent "high-yield investment program." Before defendant was indicted and before the applicable statute of limitations had run, the district court granted a government application to suspend the statute of limitations pursuant to 18 U.S.C. 3292 while the government sought the assistance of the Hungarian government in recovering records relating to transfers of the scheme's proceeds into Hungarian bank accounts. On appeal, defendant argued, among other things, that the indictments should have been dismissed because insufficient evidence supported the district court's order to suspend the running of the statute of limitations. The court held (1) that the evidence in this case was sufficient to support the district court's order; (2) that section 3292 did not require that the foreign evidence sought be necessary for an indictment, nor that it be obtainable only through an official request to a foreign government; and (3) that district courts could rely on ex parte proceedings when deciding to issue section 3292 orders. Accordingly, the judgment was affirmed. View "United States v. Lyttle" on Justia Law

Defendant was convicted of 14 counts of willfully assisting in preparation of tax returns containing materially false and fraudulent claims, including phony medical and business expenses and charitable donations. The evidence at trial proved tax loss of $31,849. At sentencing, the government proposed a tax loss figure of $1.6 million by identifying 662 returns that contained materially false claims similar to those proven at trial and eliminating contested returns. The district court discounted the loss to $400,000- to $1-million to compensate for possible selection bias in a sample of 100 returns and imposed a sentence of 42 months. The Seventh Circuit affirmed. The tax loss figure was not outside the realm of permissible computations. The district court considered defendant's family circumstances as well as substantial aggravating circumstances, including her education, financial and intellectual abilities, knowledge of the tax code and duty to provide truthful information, and that her actions caused the IRS to audit her clients. Defendant also failed to appear for a sentencing hearing, was dishonest to the court, frivolously denied the court had jurisdiction over her, and similarly asserted she was an independent sovereign protected by the Eleventh Amendment.View "United States v. Littrice" on Justia Law

Defendants appealed from judgments following a jury trial that resulted in their convictions for racketeering and related offenses. Defendants all contended, inter alia, that the district court erred in failing to instruct the jury on the relatedness and continuity factors required to establish a pattern of racketeering under the Racketeering Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1962(c) and (d). The court concluded that the district court's RICO instruction was legally erroneous and this error was prejudicial with regard to Chris Cain. With regard to the racketeering convictions of David Cain, Jr. and Jamie Soha, however, applying a plain error standard of review, the court concluded that it was not reasonably likely that a properly instructed jury would have failed to find a pattern of racketeering. Accordingly, the court reversed the RICO convictions with regard to Chris Cain only and remanded for resentencing. The court affirmed the convictions in all other respects. View "United States v. Cain, Jr., et al." on Justia Law

Defendant was convicted of bank fraud, his sentence was subsequently reduced, he was placed on supervised release, and his supervised release was revoked twice. Defendant appealed the second revocation of his supervised release and appealed the district court's post revocation sentence, which included a special condition of supervised release requiring him to reside in a residential reentry center for a third time upon his release. The court held that the district court did not abuse its discretion in revoking defendant's supervised release where he admitted to violating ten conditions of supervised release. The court also held that the district court did not plainly err when it ordered defendant to reside in a residential reentry center where that court followed the procedures set forth in 18 U.S.C. 3583. Accordingly, the judgment was affirmed. View "United States v. Melton" on Justia Law

Defendant hacked the email account of then-Alaska governor and Vice Presidential candidate Sarah Palin. After forensic examinations revealed that he took action to remove information from his computer relating to the incident, he was indicted on several counts, including identity theft, but only convicted of obstruction of justice, 18 U.S.C. 1519. Section 1519, part of the Sarbanes-Oxley Act of 2002, prohibits knowing destruction or alteration of any record with intent to impede, obstruct, or influence investigation of any matter within the jurisdiction of any federal department or agency or in relation to or in contemplation of any such matter or case. The Sixth Circuit affirmed, rejecting an argument that the law was unconstitutionally vague and that there was not sufficient evidence to support his conviction. Defendant's posts indicated "contemplation" of a federal investigation.View "United States v. Kernell" on Justia Law

Defendant, the CEO of Maryland's Prince George's County Public Schools (PGCS), was convicted of several counts of honest-services fraud, tampering with evidence, and obstruction of justice. Defendant's convictions involved securing two public contracts for school products and services. On appeal, defendant raised several claims of error. The court held that, in light of the evidence and the general verdict, it could not conclude that the erroneous jury instruction at issue was harmless. Accordingly, the court reversed defendant's convictions of honest-services fraud (counts 6, 7, and 10). The court addressed each of defendant's challenges to his tampering and obstruction convictions, affirming convictions of evidence and witness tampering (counts 19 and 20) and obstruction of justice (count 22). The court vacated the sentences and remanded for resentencing on counts 19, 20, and 22. View "United States v. Hornsby" on Justia Law

Checking accounts were opened in the name of Diallo by a man with a passport bearing that name. The IRS deposited $3,787 into the account. Diallo withdrew $2,500 before the bank discovered that the money was a tax refund belonging to another. The account was blocked and the bank notified the IRS. The IRS made additional deposits for tax refunds. Diallo attempted to make a withdrawal, but the transaction was blocked. Later that day, at the airport, defendant was flagged for additional screening. The search revealed envelopes containing large amounts of cash and unsealed envelopes containing passports bearing defendant's picture but different names, including the name Diallo. He was indicted for possession of a false passport, 18 U.S.C. 1546(a), and bank fraud, 18 U.S.C. 1344 and 1028A(a)(1). The district court suppressed the evidence, finding that the government failed to establish that the search was constitutional, and barred admission of the bank records. The Sixth Circuit reversed. Although actual documentation seized during the search must be suppressed, evidence obtained legally and independently of the search is not suppressible, even if the government cannot show that it would have discovered its significance without the illegal search. The minimal deterrent effect of suppression is outweighed by the burden on the truth-seeking function of the courts.View "United States v. Fofana" on Justia Law

A jury convicted the defendant of defrauding a large bank. The district judge sentenced him to 96 months in prison and ordered him to forfeit the money that he had obtained from the fraud, which the judge determined to be $16,241,202, plus property that he had bought with proceeds of the fraud, and to pay restitution to the bank also in the amount of $16,241,202. Defendant challenged the order of restitution. The Seventh Circuit reversed in part. Restitution, unlike forfeiture, is limited to the victim's loss, 18 U.S.C. 3664(f)(1)(A); the court remanded for determination of that loss. The court noted that loss has been limited by the government's decision to convey forfeited assets to the victim up to the limit of the loss. View "United States v. Navarrete" on Justia Law

The owner of supermarkets involved his family in a scheme to provide cash for food stamps, beyond what is permitted by Puerto Rico law. A conservative estimate put receipts from the fraud above $4 million, which was intermingled with more than $20 million in food stamp proceeds. Family members testified and he was convicted of conspiracy to commit food stamp fraud, 7 U.S.C. 2024(b) and 18 U.S.C. 371, and for knowingly conducting and attempting to conduct financial transactions affecting interstate commerce involving the proceeds of unlawful activity, 18 U.S.C. 1956(a)(1)(A)(i) and 1956(a)(1)(B)(i), and 2, sentenced to 108 months in prison, and ordered to forfeit $20 million. The First Circuit affirmed. The district court properly applied a sentencing enhancement for the owner's leadership participation in the scheme. Even legitimate funds are subject to forfeiture when they become involved in a scheme to conceal illegal funds. The court properly weighed the harm caused by the crime. View "United States v. Aguasvivas-Castillo" on Justia Law

A supervising building inspector was convicted of conspiracy to commit bribery, 18 U.S.C. 371, and two counts of making false statements to federal agents, 18 U.S.C. 1001(a)(2) and was sentenced to a total of 60 months' imprisonment. The Seventh Circuit affirmed. The district court properly allowed testimony about the 2005 gift list of a city businessman; the testimony was probative of intent and not so prejudicial as to cause the jury to decide the case on an improper basis. Although the court erred by admitting the list itself as a business record, the error was harmless. The court properly barred recordings between defendant and one of the witnesses who testified against him, which contained self-exculpatory statements. The court properly held defendant accountable for more than $112,500 in bribes, which resulted in an eight-level increase to the USSG offense level. View "United States v. Reese" on Justia Law