Justia White Collar Crime Opinion Summaries

The 2008 financial crisis caused GM and Chrysler into bankruptcy. In Europe, Fiat faced similar troubles. Fiat CEO Marchionne forged a relationship with the United Auto Workers (UAW). Fiat negotiated a partial purchase of Chrysler. Chrysler and the UAW agreed to Marchionne’s request to jettison certain traditional union protections. The companies emerged from bankruptcy with the UAW large percentages of their equity.GM alleges that Marchionne subsequently implemented a bribery scheme to revive Chrysler and harm GM. Fiat acquired the UAW’s stake in Chrysler. The new entity, “FCA,” allegedly “began a long-running intentional scheme of improper payments" to UAW officials … to influence the collective bargaining process, providing Chrysler with labor peace and competitive advantages. GM rejected Marchionne's proposal for a merger in 2015; although bribed UAW executives pressed GM to agree. During subsequent collective bargaining, the UAW and FCA allegedly conspired “to force enormous costs on GM.”In 2017, the Justice Department criminally charged numerous FCA executives and UAW officials. Several entered guilty pleas. FCA pleaded guilty and agreed to a $30 million fine. The UAW agreed to a consent decree, requiring federal monitoring.GM sued FCA, Fiat, and individuals, asserting RICO claims, 18 U.S.C. 1962(b), (c), and (d). The district court dismissed. Assuming that FCA committed RICO violations, they were either indirect or too remote to have proximately caused GM’s alleged injuries. The Sixth Circuit affirmed, first rejecting an argument that the NLRB had exclusive jurisdiction. The court noted the existence of a more “immediate victim,” the FCA workers, “better situated to sue.” GM has not alleged that it would have received the same benefits as FCA absent the corruption. View "General Motors, LLC v. FCA US, LLC" on Justia Law

Defendant filed various false liens against John Koskinen, the former Commissioner of the Internal Revenue Service, and Jacob Lew, the former Secretary of the Treasury. There is no dispute that Pate filed the false liens to retaliate against Lew and Koskinen for acts they performed as part of their official duties. Defendant filed the false liens after Lew and Koskinen had left their positions with the federal government.The Eleventh Circuit was therefore presented d with the following question: Does Section 1521 apply to false liens filed against former federal officers and employees for official actions they performed while in service with the federal government? The court concluded that the answer to this question is yes—the plain language of Section 1521 covers both current and former federal officers and employees. The court explained that a reading of the statute’s plain language—“any person assisting such an officer or employee in the performance of such duties or on account of that assistance”—does not suggest that its protection ends at some ascertainable point in time. Like the language regarding a federal officer or employee, the language regarding a person who lends assistance to a federal officer or employee has both a temporal qualification on liability. Thus, the court affirmed Defendant’s convictions predicated on violations of Section 1521. View "USA v. Timothy Jermaine Pate" on Justia Law

Plaintiff alleged that Defendants Kinetic Concepts, Inc., and its indirect subsidiary KCI USA, Inc. (collectively, “KCI”) submitted claims to Medicare in which KCI falsely certified compliance with certain criteria governing Medicare payment for the use of KCI’s medical device for treating wounds. The district court granted summary judgment to KCI, concluding that Plaintiff failed to establish a genuine issue of material fact as to the False Claims Act elements of materiality and scienter.   The Ninth Circuit reversed the district court’s summary judgment. The court agreed that compliance with the specific criterion that there be no stalled cycle would not be material if, upon case-specific review, the Government routinely paid stalled-cycle claims. In other words, if stalled-cycle claims were consistently paid when subject to case-specific scrutiny, then a false statement that avoided that scrutiny and instead resulted in automatic payment would not be material to the payment decision. The court concluded, however, that the record did not show this to be the case. The court considered administrative rulings concerning claims that were initially denied, post-payment and pre-payment audits of particular claims, and a 2007 report by the Office of Inspector General of the U.S. Department of Health and Human Services. The court concluded that none of these forms of evidence supported the district court’s summary judgment ruling.   The court held that the district court further erred in ruling that there was insufficient evidence that KCI acted with the requisite scienter and that the remainder of the district court’s reasoning concerning scienter rested on a clear failure to view the evidence in the light most favorable to Plaintiff. View "STEVEN HARTPENCE V. KINETIC CONCEPTS, INC." on Justia Law

Defendant was indicted tried, convicted, and sentenced to 28 months imprisonment for her part in a broader scheme to defraud the federal government out of relief funds intended for farmers affected by drought and fire. She challenged both her conviction and her sentence. As to her conviction, she contends that the evidence preponderated against a guilty verdict such that the district court abused its discretion when it denied her motion for a new trial. As to her sentence, she asserts that her bottom-of-the-Guidelines term of imprisonment is substantively unreasonable.   The Eleventh Circuit affirmed holding that the district court did not abuse its discretion when it denied Defendant’s motion for a new trial. Neither did it abuse its discretion when it imposed a bottom-of-the-Guidelines sentence of 28 months’ imprisonment. The court explained that allowing the verdict to stand in the face of an arguable inconsistency—of which the jury was made aware, and which doesn’t bear on an element of the conviction—is not a miscarriage of justice. Further, the court reasoned that the weight of the evidence does not preponderate against a guilty verdict in this case. Finally, the court explained that Defendant never mentioned the Section 3553(a) factors or explains how the court committed reversible error when it considered them. Accordingly, she has failed to carry her burden of establishing that the sentence is unreasonable in the light of both the record and the factors in Section 3553(a). View "USA v. Danyel Michelle Witt" on Justia Law

The Seventh Circuit affirmed the judgment of the district court denying Petitioner's petition for a writ of habeas corpus under 28 U.S.C. 2241 challenging his money-laundering convictions, holding that Petitioner did not face the kind of "fundamental miscarriage of justice" that must exist to justify relief under section 2241.After a jury trial, Petitioner was convicted of violations of the Mann Act, 18 U.S.C. 2421-24, the money-laundering statute, 18 U.S.C. 1956, and associated conspiracies and sentenced to a 432-month term of imprisonment. Petitioner later filed his habeas petition arguing that he was convicted on the money-laundering counts for conduct that was not a crime. The district court denied relief. The Seventh Circuit affirmed, holding that Petitioner failed to establish that he faced a "fundamental miscarriage of justice" necessary to justify relief under section 2241. View "Roberts v. LeJeune" on Justia Law

Defendant, a former scientist employed by GlaxoSmithKline (GSK), pled guilty to a single count of conspiracy to steal trade secrets, in violation of 18 U.S.C. 1832(a)(5) based on allegations he stole company documents. At sentencing, the government sought a sentencing enhancement based on the “loss” attributable to Defendant's conduct. However, the district court denied the government's request for an enhancement.On appeal, the Third Circuit affirmed. The court noted that finding that under the commentary to U.S.S.G. 2B1.1, the definition of “loss” includes losses that the defendants intended. However, here, it was uncontested that GSK did not suffer any actual loss. Further, the court determined that the government failed to prove that Defendant purposely sought to inflict pecuniary harm on GSK. View "USA v. Yu Xue" on Justia Law

Defendant owned and operated a healthcare clinic. Along with another provider, Defendant engaged in a scheme to fraudulently bill Medicare for home health services that were not properly authorized, not medically necessary, and, in some cases, not provided. Insiders testified to Defendant's role in the conspiracy, indicating she knew the home healthcare agencies were paying marketers to recruit patients. Defendant also told an undercover FBI agent she could show him how to make money by recruiting patients. Defendant was convicted and sentenced to 300 months in federal prison.Defendant appealed, challenging the sufficiency of the evidence against her. However, the Fifth Circuit affirmed her conviction, finding that a rational jury could have concluded that Defendant knew about and willfully joined the conspiracy. Additionally, the court rejected Defendant's challenges to her sentence, finding that the district court did not commit a procedural error and that her sentence was not substantively unreasonable. View "USA v. Rodriguez" on Justia Law

Capital held tens of millions of dollars for a sole investor, with Stevanovich as its sole director. Capital invested in the multi-billion-dollar Petters Ponzi scheme, getting out before the scheme collapsed in 2008. Some investors lost everything[ Capital earned tens of millions. The Petters bankruptcy court entered a $578,366,822 default judgment against Capital in 2015, but it had dissolved. In 2018, the Trustee filed a post-judgment supplementary proceeding in the Northern District of Illinois against Stevanovich, an Illinois resident. Under Illinois law, a judgment creditor may recover assets from a third party if the judgment debtor has an Illinois state law claim of embezzlement against the third party. In his turnover motion, the Trustee argued that Stevanovich embezzled Capital’s funds to purchase high-end wine for his personal use and transferred the goods to Stevanovich’s personal wine cellar in Switzerland. The Trustee submitted ample evidence to support his claim for $1,948,670.79. The district court granted the turnover order without conducting an evidentiary hearing and found that Stevanovich embezzled the funds. The Seventh Circuit affirmed, rejecting Stevanovich’s claims that the wine purchases were an investment strategy for Capital and that the five-year statute of limitations for embezzlement applied, accruing from the dates of the wine purchases. The court applied the seven-year statute of limitations for supplementary proceedings accruing from the date of the bankruptcy court judgment. Stevanovich failed to present any evidence creating an issue of fact that necessitated a hearing. View "Kelley v. Stevanovich" on Justia Law

Four defendants, who have multiple ties to organized crime, were convicted for their roles in the unlawful takeover and looting of FirstPlus Financial, a publicly traded mortgage loan company. Their scheme began with the defendants’ and their co-conspirators’ extortion of FirstPlus’s board of directors and its chairman, using lies and threats to gain control of the company. Once they forced the old leadership out, the defendants drained the company of its value by causing it to enter into expensive consulting and legal-services agreements with themselves, causing it to acquire (at vastly inflated prices) shell companies they personally owned, and using bogus trusts to funnel FirstPlus’s assets into their own accounts. They ultimately bankrupted FirstPlus, leaving its shareholders with worthless stock.Each defendant was convicted of more than 20 counts of criminal behavior and given a substantial prison sentence. In a consolidated appeal, the Third Circuit affirmed, rejecting challenges to the investigation, the charges and evidence against them, the pretrial process, the government’s compliance with its disclosure obligations, the trial, the forfeiture proceedings, and their sentences. The government conceded that the district court’s assessment of one defendant’s forfeiture obligations was improper under a Supreme Court decision handed down during the pendency of this appeal and remanded that assessment. View "United States v. Scarfo" on Justia Law

Defendant Laura Shelly pled no contest to one count of embezzlement by an employee. Pursuant to the negotiated plea, the trial court imposed a five-year term of felony probation. The court also ordered defendant to pay $72,972.47 in restitution. Shelly argued on appeal the length of her probation had to be reduced in light of Assembly Bill No. 1950 (2019-2020 Reg. Sess.) which reduced the maximum length of felony probation to two or three years. She also argued the amount of restitution had to be reduced by $5,816.25. The Court of Appeal agreed, and the State conceded, that Assembly Bill 1950 applied retroactively and entitled defendant to have the length of her probation reduced. The question remaining was whether the State was then entitled to withdraw from the plea agreement. To this, the Court held it was not. The Court also reduced the restitution order by $1,000. View "California v. Shelly" on Justia Law