Justia White Collar Crime Opinion Summaries

The Eleventh Circuit affirmed defendant's conviction for conspiracy to commit access device fraud, access device fraud, and aggravated identity theft. Defendant's conviction stemmed from his involvement, with his brother, in fraudulently using identities to collect unemployment benefits and to intercept preloaded debit cards he and his brother had requested while posing as residents on his brother's mail delivery route. Defendant raised numerous claims of error on appeal.The court rejected defendant's challenges to the admissibility of the images derived from surveillance video taken by PNC Bank ATMs on three fronts; the district court did not abuse its discretion by improperly limiting defendant's ability to present a full and fair defense; there was no error in admitting the lay identification testimony; there was no error in admitting defendant's booking photograph; and there was no cumulative error. View "United States v. Clotaire" on Justia Law

Kennedy-Robey was charged with fraud for operating a scheme to defraud the IRS and an unemployment insurance scheme. While awaiting trial, Kennedy-Robey was released on bond. She resumed her fraudulent activities. The government obtained an arrest warrant. Instead of appearing at the bond revocation hearing, Kennedy-Robey remained a fugitive for a few months. When they arrested Kennedy-Robey, officers found her to-do list, which read like a “how-to” guide for fugitives. Kennedy-Robey eventually pleaded guilty. Although the guidelines range was 210-262 months, the court sentenced her to 72 months’ imprisonment and ordered her to pay over $4.8 million in restitution.In 2017, Kennedy-Robey was released to a halfway house. Within weeks, Kenney-Robey filed a fraudulent automobile loan application and obtained a loan exceeding $30,000, which she used to purchase a Mercedes-Benz, and filed a fraudulent credit card application. Months later, she and another defendant purchased another car with funds obtained from another fraudulent loan application. Kennedy-Robey pleaded guilty to mail fraud, 18 U.S.C. 1341. The government sought an 18-month sentence, based on a guidelines range of 12-18 months. After considering Kennedy-Robey’s long history of unrepentant criminal conduct, the court imposed a 36-month sentence. The Seventh Circuit affirmed, rejecting arguments that the district court failed to consider either her mental health condition or the more lenient sentences received by defendants convicted of similar crimes and that the sentence was substantively unreasonable. View "United States v. Kennedy-Robey" on Justia Law

The Eleventh Circuit affirmed defendant's conviction of twenty counts of health care fraud. Defendant's convictions stemmed from his involvement in a fraud scheme conducted through his ophthalmology office that resulted in a loss of nearly $7 million.The court held that the district court did not abuse its discretion by not allowing defendant's expert to testify, under Daubert and Federal Rule of Evidence 702, about the use of subthreshold micropulse photostimulation as a treatment for wet age-related macular degeneration. The court also held that the district court did not abuse its discretion by admitting rebuttal evidence showing that defendant billed Medicare for performing services on a patient's blind left eye. Even if the district court erred in partially limiting defendant's surrebuttal evidence, and that error violated the Sixth Amendment, the court held that it was harmless beyond a reasonable doubt. Finally, the court vacated defendant's sentence on each count and remanded the case for the limited purpose of letting the district court modify defendant's sentence structure to bring it in line with USSG 5G1.2(d). View "United States v. Ming Pon" on Justia Law

The DC Circuit granted the petition for writ of mandamus in part and ordered the district court to grant the government's Federal Rule of Civil Procedure 48 motion to dismiss the charges against Michael Flynn, former National Security Advisor to President Donald J. Trump, who pleaded guilty to making false statements under 18 U.S.C. 1001. The court held that the district court's orders appointing an amicus and scheduling a proposed hearing constitute legal error. The court also held that this is not the unusual case where a more searching inquiry is justified, and there is no adequate remedy for the intrusion on "the Executive's long-settled primacy over charging decisions."The court stated that, although Rule 48 requires "leave of court" before dismissing charges, "decisions to dismiss pending criminal charges—no less than decisions to initiate charges and to identify which charges to bring—lie squarely within the ken of prosecutorial discretion." The court reasoned that, whatever the precise scope of Rule 48's "leave of court" requirement, this is plainly not the rare case where further judicial inquiry is warranted. The court explained that Flynn agrees with the government's motion to dismiss and there has been no allegation that the motion reflects prosecutorial harassment, and the government's motion includes an extensive discussion of newly discovered evidence casting Flynn's guilt into doubt. The court stated that the government specifically points to evidence that the FBI interview at which Flynn allegedly made false statements was "untethered to, and unjustified by, the FBI's counterintelligence investigation into Mr. Flynn." In light of this evidence, the government maintains that it cannot "prove either the relevant false statements or their materiality beyond a reasonable doubt." The court also stated that the government's representations about the insufficiency of the evidence are entitled to a "presumption of regularity," and, on the record before the district court, there is no clear evidence contrary to the government’s representations. Therefore, the court held that these clearly established legal principles and the Executive's "long-settled primacy over charging decisions" foreclose the district court's proposed scrutiny of the government's motion.The court also held that the district court's appointment of the amicus and demonstrated intent to scrutinize the reasoning and motives of the Department of Justice constitute irreparable harms that cannot be remedied on appeal. The court stated that the district court's actions will result in specific harms to the exercise of the Executive Branch's exclusive prosecutorial power, and the contemplated proceedings would likely require the Executive to reveal the internal deliberative process behind its exercise of prosecutorial discretion, interfering with the Article II charging authority. Furthermore, circumstances of this case demonstrate that mandamus is appropriate to prevent the judicial usurpation of executive power.The court denied Flynn's petition to the extent that he seeks reassignment of the district judge where the district judge's conduct did not indicate a clear inability to decide this case fairly. The court vacated the district court's order appointing an amicus as moot. View "In re: Michael Flynn" on Justia Law

After defendant, representing himself, pleaded guilty to one charge of bank fraud and one charge of money laundering, he appealed his convictions and the district court's orders directing him to reimburse the United States Treasury.The Eleventh Circuit held that defendant waived his right to counsel knowingly, intelligently, and voluntarily. The court rejected defendant's argument that 18 U.S.C. 3006A(f) did not authorize the district court to seize money from his jail account, holding that the district court followed the proper procedures under section 3006A before directing that defendant's money be paid from the court registry to the Treasury. The court also held that it lacked jurisdiction to consider defendant's argument that the district court could not use this money to reimburse the Treasury for his counsel's fees and expenses. Accordingly, the court affirmed in part and dismissed in part. View "United States v. Owen" on Justia Law

De Etta Wester-Gravelle worked as a certified nursing assistant for a company called Interim Healthcare. During the time period in question, the company assigned her to care for a patient, W.M., who had suffered a stroke and needed assistance with tasks like bathing. W.M.’s partner, E.G., was also in poor health and could not perform such tasks for W.M. Interim Healthcare assigned Wester-Gravelle to visit W.M. five times per week for two hours each day. At the conclusion of each shift, Wester-Gravelle was required to have either W.M. or E.G. sign Wester-Gravelle’s shift chart to verify that she had been there. The charts would then serve as a record pursuant to which Interim Healthcare would pay Wester-Gravelle for her work. Wester-Gravelle had been assigned to work with W.M. for several months when, in late July or early August of 2015, her supervisor, Lisa Conley, made a routine visit to W.M.’s house during a time when Wester-Gravelle had been scheduled to be there. When Conley arrived, however, Wester-Gravelle was not there. Conley performed routine tasks of her own that day, and in the course of her conversation with W.M. and E.G., they said that they had not seen Wester-Gravelle in several weeks. After an investigation, the matter was transferred to the Colorado Attorney General, who prosecuted Wester-Gravelle on one count of forgery. The issue this case presented for the Colorado Supreme Court's review was whether the court of appeals erred in concluding the prosecution had an obligation to elect the specific document or documents on which it would rely for conviction or, alternatively, that Wester-Gravelle was entitled to a "modified unanimity instruction" requiring the jurors to agree unanimously that she had committed the same underlying act of forgery or that she had committed all of the underlying acts. The Supreme Court concluded the trial court did not plainly err when it did not, sua sponte, require an election or give a modified unanimity instruction because any error was neither obvious nor substantial. The court of appeals' judgment was reversed and the matter remanded for consideration of Wester-Gravelle's remaining contentions on appeal. View "Colorado v. Wester-Gravelle" on Justia Law

The Second Circuit affirmed Defendants Napout and Marin's convictions for multiple counts of conspiracy to commit honest services wire fraud. Defendants were former officials of the global soccer organization Fédération Internationale de Football Association (FIFA).The court held that defendants' convictions rest upon permissible domestic applications of the wire fraud statute, 18 U.S.C. 1343. Furthermore, the court cannot conclude in light of binding precedent that the district court committed plain error with respect to the issue of whether the honest services wire fraud statute, 18 U.S.C. 1346, is unconstitutionally vague as applied to defendants. The court also held that the evidence presented at trial was sufficient to affirm the district court's judgment of conviction; and that the challenged evidentiary rulings of the district court were not error. Finally, the court held that defendants' remaining arguments are without merit. View "United States v. Napout" on Justia Law

The Second Circuit certified two questions to the New York Court of Appeals: 1) Whether a stock conversion option that permits a lender, in its sole discretion, to convert any outstanding balance to shares of stock at a fixed discount should be treated as interest for the purpose of determining whether the transaction violates N.Y. Penal Law 190.40, the criminal usury law. 2) If the interest charged on a loan is determined to be criminally usurious under N.Y. Penal Law 190.40, whether the contract is void ab initio pursuant to N.Y. Gen. Oblig. Law 5-511. View "Adar Bays, LLC v. GeneSYS ID, Inc." on Justia Law

After a bench trial, a district court decided that Defendants RaPower-3, LLC, International Automated Systems, Inc. (IAS), LTB1, LLC, Neldon Johnson, and R. Gregory Shepard had promoted an unlawful tax scheme. Defendants’ scheme was based on a supposed project to utilize a purportedly new, commercially viable way of converting solar radiation into electricity. There was no “third party verification of any of Johnson’s designs.” Nor did he have any “record that his system ha[d] produced energy,” and “[t]here [were] no witnesses to his production of a useful product from solar energy,” a fact that he attributed to his decision to do his testing “on the weekends when no one was around because he didn’t want people to see what he was doing.” Defendants never secured a purchase agreement for the sale of electricity to an end user. The district court found that Johnson’s purported solar energy technology was not a commercial-grade solar energy system that converts sunlight into electrical power or other useful energy. Despite this, Defendants’ project generated tens of millions of dollars between 2005 and 2018. Beginning in 2006, buyers would purchase lenses from IAS or RaPower-3 for a down payment of about one-third of the purchase price. The entity would “finance” the remaining two-thirds of the purchase price with a zero- or nominal- interest, nonrecourse loan. No further payments would be due from the customer until the system had been generating revenue from electricity sales for five years. The customer would agree to lease the lens back to LTB1 for installation at a “Power Plant”; but LTB1 would not be obligated to make any rental payments until the system had begun generating revenue. The district court found that each plastic sheet for the lenses was sold to Defendants for between $52 and $70, yet the purchase price of a lens was between $3,500 and $30,000. Although Defendants sold between 45,000 and 50,000 lenses, fewer than 5% of them were ever installed. Customers were told that buying a lens would have very favorable income-tax consequences. Johnson and Shepard sold the lenses by advertising that customers could “zero out” federal income-tax liability by taking advantage of depreciation deductions and solar-energy tax credits. To remedy Defendants' misconduct, the district court enjoined Defendants from continuing to promote their scheme and ordered disgorgement of their gross receipts from the scheme. Defendants appealed. Finding no reversible error, the Tenth Circuit affirmed the district court. View "United States v. RaPower-3" on Justia Law

The Second Circuit affirmed defendants' convictions on fourteen counts including collection of unlawful usurious debt, and conspiracy to do so, wire fraud, and money laundering, arising out of defendants' operation of a payday lending business. The court held that, even assuming that the charge with respect to Counts 2-4 was erroneous, the error did not affect the verdict, and thus defendants have not satisfied the requirements of plain error; the jury necessarily found in rendering a guilty verdict on Count 1, for which an undisputedly correct willfulness instruction was given as to the conspiracy element, that defendants were aware of the unlawfulness of their making loans with interest rates that exceeded the limits permitted by the usury laws; and the evidence of defendants' willfulness was overwhelming.The court also held that defendants' other contentions are without merit. Finally, the court found that the district court did not abuse its discretion in denying Defendant Tucker's application to stay the execution of the forfeiture order entered against him following his conviction. View "United States v. Tucker" on Justia Law