Justia White Collar Crime Opinion Summaries

The government filed a complaint for forfeiture of the money claimant consolidated into a single bank account at Bank of America pursuant to 31 U.S.C. 5317(2), 5324, after claimant made eight separate currency transactions at two banks and deposited a total of $79,650 in cash. At issue was whether the government was required to prove that claimant had actual knowledge of the banks' obligation to report currency transactions in excess of $10,000 to the government and whether the magistrate judge erred when it issued an order reducing the forfeiture amount on Eight Amendment grounds from $79,650 to $50,000. The court held that the totality of the circumstances, and in particular the compelling evidence of prior structuring activities, was more than sufficient to justify the court's findings in support of the section 5324 offenses. Therefore, the court rejected claimant's cross-appeal and affirmed the judgment that he committed the offense of currency structuring. The court vacated the order reducing the forfeiture judgment and remanded, holding that the magistrate judge's proportionality analysis was erroneously conducted where it predicated the proportionality analysis on an incorrect understanding that the authorized penalty was the advisory fine of $60,000 when the correct authorized penalty was the statutory maximum fine of $500,000.

The doctor was convicted of conspiring to defraud the government and Medicare fraud (42 U.S.C. 1320a) for accepting a salary from the hospital in return for referring patients and sentenced to 72 months imprisonment followed by two years of supervision and to payment of $497,204 in restitution. The Seventh Circuit affirmed. The court did not err in refusing to admit substantive reports from meetings or the minutes of the meetings, although it allowed the government to use the minutes to establish the doctor's non-attendance at meetings. The doctor was allowed to argue that certain reports concerning his services were made and tendered during the meetings. Upholding a jury instruction, the court stated that nothing in the Medicare fraud statute implies that only the primary motivation for remuneration is to be considered and that the conviction is valid even if the payments were, in part, compensation for services. Findings concerning the level of loss supported the sentence.

The defendant, convicted of financial crimes involving his operation of an insurance brokerage, was sentenced to serve 121 months, ordered to pay $841,527 in restitution, and (following a remand) ordered to forfeit $15 million plus his interest in the racketeering enterprise. In 2010 the Supreme Court decided Skilling v. United States, limiting the "honest services fraud" theory to apply only to a defendant involved in either bribery or a kickback scheme. The defendant appealed the inclusion of "honest services" fraud in jury instructions at his trial. The Seventh Circuit affirmed, holding that the jury would have convicted the defendant without the instruction, but remanded for consideration of whether an honest services conviction affected sentencing.

The defendant referred two investors to a friend who invested their money in a company of which the defendant and his friend were directors. They were defrauded of their entire $290,000 investment. The defendant received nearly $20,000 of the misappropriated funds. He was convicted on ten counts of wire fraud and the district court sentenced him to 37 monthsâ imprisonment. The First Circuit affirmed. A reasonable jury could conclude, beyond a reasonable doubt, that the defendant participated in his friend's wire fraud scheme with knowledge and intent to defraud the investors. The court properly imposed a two-level vulnerable victim sentence enhancement, noting that a victim was an elderly widow who died before the trial, and properly imposed a loss enhancement because the amount of the reasonably foreseeable pecuniary harm was between $200,000 and $400,000.

After pleading guilty to mail fraud, 18 U.S.C. 1341, the defendant challenged a two-level increase in his sentence, based on use of "sophisticated means" and theft of more than $1 million. The Seventh Circuit affirmed. Over the course of seven years, the defendant bilked at least 17, mostly elderly or financially distressed, victims out of more than $2 million; he posed as an attorney, a CPA, and a real estate agent and prepared "significantly more elaborate than usual" fraudulent instruments.

The owner of a mortgage company was sentenced to 96 months for fraud and money laundering. The Sixth Circuit affirmed, holding that the conviction was supported by substantial evidence. Evidence of a government witness's prior inconsistent statements that referred to a conviction more than 10 years prior was properly excluded; the trial judge gave the defense proper latitude to impeach the witness. The sentence was properly enhanced for attempting to obstruct the investigation, use of "sophisticated means," and acting as the organizer or leader.

AdSurfDaily, Inc., an internet marketing company incorporated and controlled by appellant, appealed a default judgment and final order of forfeiture after they withdrew their claims in this civil forfeiture action where federal agents seized $80 million of the company's bank account funds as part of an investigation of the company for wire fraud and money laundering. The government filed a complaint for forfeiture in rem against the funds and two pieces of real property that had been purchased with AdSurfDaily money. At issue was whether the district court violated appellants' due process rights when it failed to stay the forfeiture action pending the outcome of a parallel criminal proceeding and when the district court denied them an opportunity to challenge the forfeiture on the merits when it refused to reinstate their withdrawn claims. The court held that the district court did not violate appellants' due process rights when they never asked for a stay and where due process did not require the government to provide a person with the opportunity to challenge the seizure of property he had voluntarily forfeited. The court also held that the district court did not abuse its discretion in denying a motion to reinstate withdrawn claims when the withdrawal was the product of a free, deliberate choice.

The defendant was convicted of wire fraud in connection with a fraudulent investment and mortgage brokerage business and sentenced to 144 months. The Seventh Circuit affirmed. Evidence turned over by the defendant's wife, who was the former corporate secretary and one of the business organizers, was properly admitted; she was not an agent for the government, which was unaware that she was collecting evidence, but acted for private reasons. It does not matter whether she had a right to take the documents, but the defendant did, in fact, share custody of the records with his wife and she had the right to consent to a search. There was sufficient evidence that the defendant intended to defraud his victims and the above-guidelines sentence was reasonable in light of evidence of criminal history and that the defendant was planning new fraudulent schemes.

The company filed civil claims under Massachusetts state laws and the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1961 after discovering a scheme under which its employees and outsiders duped it into paying fraudulent invoices. Other defendants settled. After a trial, a former employee and an outsider, who advanced funds for the scheme, were found liable to the company. The First Circuit affirmed. There was sufficient evidence that the outsider knowingly and willfully participated in the scheme to support a verdict under RICO. That the jury did not find her liable for conspiracy to violate RICO is irrelevant. The evidence also supported a verdict of common law fraud; any error in a "willful blindness" jury instruction was harmless. Inclusion of anticipated attorney fees in an appeal bond was appropriate.