Justia White Collar Crime Opinion Summaries

Petitioner John Halaseh petitioned the Colorado Supreme Court to review a court of appeals' remand order to his underlying appeal, which directed the district court to enter four convictions for class 4 felony theft in place of the single conviction of class 3 felony theft that was reflected in the charge and jury verdict. The appellate court reversed the class 3 felony on grounds that when the statutory authorization for aggregating separate acts of theft was properly applied, there was insufficient evidence to support a single conviction for theft of $20,000 or more. It also found, however, that there was sufficient evidence to support four separate convictions for aggregated thefts with values qualifying as class 4 felonies, and that substituting these four class 4 felony convictions for the vacated class 3 felony conviction was necessary to fulfill what it understood to be its obligation to maximize the effect of the jury’s verdict. The Supreme Court disapproved of the appellate court's judgment, finding no theft offense required the aggregation of two or more separate instances of theft, whether that aggregation were to be based on commission within a period of six months or on commission as a single course of conduct, was a lesser included offense of the class 3 felony of which Halaseh was actually charged and convicted. Further, no such offense was implicitly found by the jury, and therefore none could be entered in lieu of the reversed conviction without depriving the defendant of his right to a jury trial. The matter was remanded for further proceedings. View "Halaseh v. Colorado" on Justia Law

InComm Financial Services issued pre-paid debit and credit cards under the “Vanilla VISA” brand to cardholders who use the cards to buy goods and services. Global Payments, Inc. was a financial data payment processor. Thieves purchased Vanilla VISA pre-paid debit and credit cards and used them to buy goods and services. Then, using certain merchants that were not the merchants who originally sold the goods and services, the thieves initiated counterfeit electronic “reversal transactions” – basically requests for refunds on behalf of the cardholders. Upon receiving the reversal transaction data from the merchants, Global relayed the data to the VISA network. The VISA network then submitted the reversal transaction data to InComm. InComm received the data, posted the reversal transactions to the cardholder accounts, and then issued credits to the merchants who, in turn, passed the credits on to the thieves holding the Vanilla VISA cards. The thieves then converted those credits (in excess of $1.5 million made over 3,600 transactions) to their use. InComm did not allege that Global participated in creating the counterfeit reversal transactions. InComm asserted that Global was liable for the losses InComm suffered as a consequence of those transactions because Global negligently supplied to the VISA network the data created by the reversal merchants. In support of its claim, InComm asserted that Global, as a payment processor, “had a duty to exercise reasonable care in supplying the VISA Network and its participants with the transactions initiated by the Reversal Merchants.” The Court of Appeals reversed the trial court's order dismissing InComm's negligent misrepresentation claim against Global. Global's petition for certiorari review was granted, and the Georgia Supreme Court concluded that because the allegations of the complaint showed that Global merely transmitted data concerning debit and credit card transactions without representing that the transactions were legitimate, the Court of Appeals erred, and the Supreme Court therefore reversed. View "Global Payments, Inc. v. InComm Financial Services, Inc." on Justia Law

The Fifth Circuit affirmed defendant's convictions for eleven federal tax offenses. Defendant's conviction stemmed from his involvement in a conspiracy to commit tax fraud by filing false tax returns. The court held even if there was error in admitting summary testimony and charts, the error was harmless; the evidence was sufficient to sustain a conviction of every count; and there are no cumulative errors requiring reversal. View "United States v. Nicholson" on Justia Law

In two civil enforcement actions, the Court of Appeal affirmed the trial court's judgments against the trustee and the trust (collectively, "defendants") and the imposition of civil fines in excess of $6 million. The court held that the trial court's judgments did not violate the double jeopardy clause, because the allegations and evidence before the trial court were insufficient to show that the earlier criminal complaint was based on the same offenses as the civil actions. The court also held that the $5,967,500 in civil penalties were not unconstitutionally excessive under the four-part Bajakajian test. The court rejected defendants' contention that neither the trial court nor the city had the authority to require the trustee to evict the dispensaries. Finally, the court held that the medical-marijuana regulations were not void for vagueness, and the trial court did not err in holding the trustee personally liable for the civil penalties and other relief imposed against him in each of the judgments. View "People v. Braum" on Justia Law

The First Circuit affirmed Defendant's convictions of securities and wire fraud and conspiracy to commit securities and wire fraud, holding that there was no reversible error in the proceedings below.Specifically, the First Circuit held (1) there was sufficient evidence to sustain Defendant's convictions and that, to the extent that the jury instructions may have been overbroad, any error was harmless; (2) this Court need not address whether the wire fraud statute, 18 U.S.C. 1343, applies extraterritorially because Defendant was convicted under a proper domestic application of the statute; and (3) the district court correctly determined that it lacked the authority to order the government to lodge Mutual Legal Assistance Treaties requests with the United Kingdom and the Republic of Ireland to seek evidence that may have been favorable to Defendant's defense. View "United States v. McLellan" on Justia Law

The Second Circuit affirmed the district court's order of restitution, imposed after defendant pleaded guilty to four counts of wire fraud in 2018 for submitting false expense-reimbursement forms to the Department of Labor. The court held that the restitution order was proper under the Mandatory Victims Restitution Act because all of the losses resulted from the same "scheme," even though some occurred outside the limitations period for the underlying crime. Therefore, the district court did not abuse its discretion by ordering defendant to pay $72,207.16 in restitution. View "United States v. Parnell" on Justia Law

Defendants were convicted of conspiracy to engage in Medicare and Medicaid fraud in their operation of a home healthcare business, continuing over a period of three years and causing over $3.5 million in losses.The Fifth Circuit affirmed Defendants Emordi and Isidaehomen's conviction, holding that the evidence was sufficient for the jury to find that defendants knew of and voluntarily joined the conspiracy. The court also affirmed the district court's imposition of a two-level enhancement to Defendant Okwilagwe's sentence for an offense involving 10 or more victims; affirmed an enhancement under USSG 2B1.1(b)(1)(J) for an intended loss between $3.5 million and $9.5 million; and affirmed the restitution amount. Finally, the court affirmed Defendant Etti's sentence, holding that the district court did not plainly err by imposing the below-Guidelines sentence that was substantively reasonable. View "United States v. Emordi" on Justia Law

Freelance bookkeeper Elizabeth Mulder perpetrated a nearly five-year fraud against her client, plaintiff Kurtz-Ahlers. Both Kurtz-Ahlers and Mulder coincidentally had their checking accounts at defendant Bank of America (the Bank). Mulder ran her scam through her account at the Bank. After discovering the fraud, Kurtz-Ahlers notified the Bank and made a claim for its losses. The Bank denied the claim and Kurtz-Ahlers sued the Bank for negligence. After a two-week jury trial, the trial court granted the Bank’s motion for nonsuit, essentially holding the Bank owed Kurtz-Ahlers no duty to investigate or monitor Mulder’s account. Finding no reversible error in that conclusion, the Court of Appeal affirmed. View "Kurtz-Ahlers, LLC v. Bank of America N.A." on Justia Law

During former New Jersey Governor Christie’s 2013 reelection campaign, Fort Lee’s mayor refused to endorse Christie. Kelly, Christie's Deputy Chief of Staff, Port Authority Deputy Executive Director, Baroni, and another official decided to reduce from three to one the number of lanes reserved at the George Washington Bridge’s toll plaza for Fort Lee’s commuters. To disguise the political retribution, the lane realignment was said to be for a traffic study. Port Authority traffic engineers were asked to collect some numbers. An extra toll collector was paid overtime. The lane realignment caused four days of gridlock, ending only when the Port Authority’s Executive Director learned of the scheme. The Third Circuit affirmed the convictions of Baroni and Kelly for wire fraud, fraud on a federally funded program, and conspiracy to commit those crimes. The Supreme Court reversed. The scheme did not aim to obtain money or property. The wire fraud statute refers to “any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses,” 18 U.S.C. 1343. The federal-program fraud statute bars “obtain[ing] by fraud” the “property” (including money) of a federally funded program or entity, section 666(a)(1)(A). The statutes are limited to the protection of property rights and do not authorize federal prosecutors to set standards of good government.The Court rejected arguments that the defendants sought to take control of the Bridge’s physical lanes or to deprive the Port Authority of the costs of compensating employees. Their realignment of the access lanes was an exercise of regulatory power; a scheme to alter a regulatory choice is not one to take government property. The time and labor of the employees were an incidental byproduct of that regulatory object. Neither defendant sought to obtain the services that the employees provided. View "Kelly v. United States" on Justia Law

Galeotti, a former Union Local 3 employee, filed a complaint against Local 3 and three of individual union leaders, alleging that the individual defendants required union employees to pay them money to keep their jobs, lied about the reason for collecting the money, and caused Local 3 to terminate Galeotti’s employment when he failed to pay the full amount demanded. The trial court dismissed his second amended complaint without leave to amend.The court of appeal reversed in part, reasoning that a threat to terminate employment can provide a basis for an extortion claim and that the allegations of the second amended complaint stated a cause of action for wrongful termination in violation of the public policy underlying the extortion statutes. The complaint stated a cause of action for violations of the Racketeer Influenced and Corrupt Organizations Act (RICO; 18 U.S.C. 1961), based on the predicate acts of extortion, but did not state a cause of action for interference with prospective economic advantage. View "Galeotti v. International Union of Operating Engineers" on Justia Law