Justia White Collar Crime Opinion Summaries

Josephine Perez-Gorda was convicted of fraud after she and her husband, Justin, misrepresented his medical condition to the U.S. Department of Veterans Affairs. Justin, who suffered a brain injury while on duty, and Perez-Gorda claimed he was unable to walk or care for himself, leading to the receipt of various government benefits, including a new home, car, and caregiver stipend. However, evidence showed Justin was more mobile and self-sufficient than they had represented. After Justin's death in 2022, Perez-Gorda was indicted on multiple counts of wire fraud, mail fraud, health care fraud, conspiracy to commit health care fraud, and aiding and abetting offenses.The United States District Court for the Western District of Texas convicted Perez-Gorda on all counts, and she was sentenced to forty-six months in prison. Perez-Gorda appealed, arguing that the jury instructions on wire and mail fraud were erroneous based on intervening circuit precedent. She did not object to these instructions at trial. The Fifth Circuit reviewed the instructions for plain error and found them erroneous but concluded that the error did not affect Perez-Gorda’s substantial rights, as there was no reasonable probability that the jury would have acquitted her under the correct instructions.Perez-Gorda also challenged statements made during the grand jury proceedings and the sufficiency of the evidence supporting the jury verdicts. The Fifth Circuit found that the statements did not influence the grand jury’s decision and that a rational jury could have found her guilty beyond a reasonable doubt. Additionally, Perez-Gorda contested her sentence, specifically the two-level upward adjustment for her role as an organizer or leader. The Fifth Circuit reviewed this factual finding for clear error and upheld it, noting evidence that Perez-Gorda supervised Justin in the fraudulent activities. The Fifth Circuit affirmed the district court’s judgment. View "USA v. Perez-Gorda" on Justia Law

The case involves defendants Aghee William Smith II and David Alcorn, who were convicted in the Eastern District of Virginia for their roles in fraudulent schemes that defrauded investors of millions of dollars. The schemes included marketing and selling phony investments in a dental services marketing program and fraudulent spectrum investments. The fraudulent activities primarily targeted elderly victims, resulting in significant financial losses.In the district court, Smith and Alcorn were tried together before a jury in February 2022. They raised three main issues on appeal: a joint constitutional challenge to the district court’s COVID-19 trial protocol under the Public Trial Clause of the Sixth Amendment, Smith’s separate challenge to the admission of videotaped depositions under the Confrontation Clause, and Alcorn’s challenge to the imposition of supervised release conditions.The United States Court of Appeals for the Fourth Circuit reviewed the case. The court rejected Smith and Alcorn’s joint contention that the COVID-19 trial protocol violated their rights under the Public Trial Clause, finding that the protocol did not constitute a partial courtroom closure and was justified by substantial public health reasons. The court also rejected Smith’s Confrontation Clause challenge, concluding that the government had made a good faith effort to secure the witnesses’ presence at trial and that the witnesses were unavailable due to health concerns.However, the court found merit in Alcorn’s challenge regarding the imposition of supervised release conditions. The district court had failed to properly incorporate the standard conditions of supervised release during the oral pronouncement of Alcorn’s sentence, leading to a Rogers error. As a result, the Fourth Circuit vacated Alcorn’s sentences and remanded for resentencing.In summary, the Fourth Circuit affirmed Smith’s convictions and sentences, affirmed Alcorn’s convictions, but vacated Alcorn’s sentences and remanded for resentencing. View "United States v. Smith" on Justia Law

Ethan Sturgis Day was involved in a fraudulent scheme that purported to sell shipping containers converted into housing units. The scammers, including Day, misrepresented their credentials and affiliations to lure customers, collected payments, and never delivered the promised container homes. Day managed employees and the scammers' bank accounts. The Presentence Investigation Report (PSR) identified 41 victims and assessed a loss amount of $2,563,123.72, but only detailed the financial circumstances of eight victims.The United States District Court for the Western District of Texas sentenced Day to 101 months of incarceration and three years of supervised release. The court enhanced Day's offense level based on the loss amount and for causing substantial financial hardship to 25 or more victims, as well as for his role as an organizer or leader. Day objected to these enhancements, but the district court overruled his objections and adopted the PSR. After a restitution hearing, the court lowered the loss amount by nearly $1 million and re-sentenced Day to 101 months, maintaining the same enhancements.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court found that the district court erred in applying the six-point enhancement for substantial financial hardship to 25 or more victims, as the record did not support that 25 or more victims experienced substantial financial hardship. However, the court upheld the two-point enhancement for Day's role as an organizer or leader, noting that he exercised control over other participants and managed significant assets of the fraud. Consequently, the Fifth Circuit vacated Day's sentence and remanded the case for resentencing. View "United States v. Day" on Justia Law

A real estate development company, Shen Zhen New World I, LLC, owned by Chinese billionaire Wei Huang, was involved in a scheme to bribe Los Angeles City Councilmember Jose Huizar. Over nearly four years, Huang provided Huizar with extravagant Las Vegas trips, gambling chips, and prostitutes, seeking Huizar's support for redeveloping the L.A. Grand Hotel into Los Angeles's tallest skyscraper. Huang's strategy was to "give, give, give" to later make a "big ask" for Huizar's support on the project.A federal jury in the Central District of California convicted Shen Zhen on three counts of honest-services mail and wire fraud, one count of federal-program bribery, and four counts of interstate and foreign travel in aid of racketeering. The district court found sufficient evidence to support the convictions, rejecting Shen Zhen's argument that the Government failed to establish an agreement or official action by Huizar. The court also denied Shen Zhen's proposed jury instruction on quid pro quo, finding it legally unsound.The United States Court of Appeals for the Ninth Circuit affirmed the convictions. The court held that sufficient evidence supported the jury's findings, noting that bribery under federal law does not require an explicit agreement with the public official. The court also upheld the district court's jury instructions, which correctly required the jury to find that Shen Zhen provided benefits intending to receive official acts in return. Additionally, the court found that California's bribery statutes, although broader than the Travel Act's generic definition, were proper predicates for the Travel Act convictions because the jury convicted Shen Zhen based on elements conforming to the generic definition of bribery. The court also concluded that any evidentiary errors were harmless and did not affect the verdict. View "USA V. SHEN ZHEN NEW WORLD I, LLC" on Justia Law

Three members of the Gangster Disciples, Vertuies Wall, Lawrence Grice, and Lewis Mobley, were indicted on charges including conspiracy under the Racketeer Influenced and Corrupt Organizations Act (RICO) and drug trafficking. The indictment included notice of enhanced sentencing under 18 U.S.C. § 1963(a). Mobley was found competent to stand trial despite a defense expert's testimony about his mental illness. The trial lasted five weeks, with over sixty witnesses testifying about the gang's criminal activities, including murder and drug trafficking. The jury found all three defendants guilty of RICO conspiracy, with Grice also convicted of drug trafficking conspiracy.In the United States District Court for the Northern District of Georgia, the jury found Mobley and Wall guilty of RICO conspiracy involving murder, which subjected them to enhanced sentencing. Mobley was also convicted of attempted murder and related firearms offenses. Grice was convicted of RICO conspiracy and drug trafficking conspiracy. The district court sentenced Mobley to 480 months and Wall to 360 months, both under the enhanced sentencing provision. Grice received a sentence based on his convictions.The United States Court of Appeals for the Eleventh Circuit reviewed the case. The court affirmed the district court's findings, holding that the evidence was sufficient to support the convictions and the enhanced sentences. The court found no error in the jury instructions or the special verdict form regarding the enhanced sentencing provision. The court also held that any potential error in the jury instructions was harmless beyond a reasonable doubt. Additionally, the court rejected challenges to the admission of testimony about non-testifying coconspirators' convictions and found no cumulative error affecting the defendants' substantial rights. The court affirmed the defendants' convictions and sentences. View "United States v. Wall" on Justia Law

In this case, three defendants, officers and executives of the Connecticut Municipal Electric Energy Cooperative (CMEEC), were convicted of theft involving a program receiving federal funds. The defendants misappropriated funds from CMEEC in 2015 to pay for personal vacations disguised as corporate retreats. These trips included visits to the Kentucky Derby and the Greenbrier Resort, with expenses charged to CMEEC's accounts.The United States District Court for the District of Connecticut oversaw the trial, where the jury found the defendants guilty of one count of theft involving a program receiving federal funds. The jury determined that CMEEC received more than $10,000 in federal benefits in 2015, satisfying the jurisdictional requirement of 18 U.S.C. § 666(a)(1)(A). The defendants were acquitted on other counts, including conspiracy and theft for the years 2014 and 2016. The district court sentenced the defendants to imprisonment and ordered restitution for the misappropriated funds.The United States Court of Appeals for the Second Circuit reviewed the case. The court affirmed the district court's judgment, rejecting the defendants' claims of insufficient evidence and prosecutorial misconduct. The appellate court held that CMEEC received federal benefits exceeding $10,000 in 2015, as the funds were provided under a federal grant program. The court also found no merit in the defendants' argument that the government misled the grand jury or that the district court erred in setting the restitution amount. Additionally, the court denied CMEEC's petition for mandamus, concluding that the district court did not err in finding that the legal fees advanced to the defendants lacked a sufficient causal relationship to their offense of conviction.The Second Circuit affirmed the district court's judgment of conviction and restitution order, and denied CMEEC's petition for mandamus. View "United States v. Sullivan, Bilda, Rankin" on Justia Law

The case involves Izzat and Tarik Freitekh, who were convicted of various offenses related to a fraudulent Paycheck Protection Program (PPP) loan scheme. They received $1.75 million in PPP loan funds through false representations and fabricated documents. Izzat owned several businesses, and with Tarik's help, they submitted fraudulent loan applications. The funds were deposited into accounts controlled by Izzat, and he distributed some of the money to family members under the guise of payroll.The United States District Court for the Western District of North Carolina initially reviewed the case. Both defendants were indicted for bank fraud, conspiracy to commit wire fraud, and other related charges. During the trial, the court admitted testimony from their former attorneys, who had received and submitted falsified documents to the government. The jury found Izzat guilty of conspiracy to commit money laundering, money laundering, and making false statements, while Tarik was found guilty of conspiracy to commit wire fraud, bank fraud, conspiracy to commit money laundering, money laundering, and falsifying material facts.The United States Court of Appeals for the Fourth Circuit reviewed the case. The court affirmed the district court's decisions, holding that sufficient evidence supported the convictions. The court found that the circumstantial evidence, including emails and checks, was enough to prove Izzat's involvement in the money laundering conspiracy. The court also upheld the district court's reliance on acquitted conduct to calculate the sentencing enhancements, noting that the evidence presented at trial proved Izzat's participation in the fraudulent scheme by a preponderance of the evidence. The court also found no error in the district court's application of the "intended loss" definition in the sentencing guidelines. Tarik's arguments regarding the calculation of the loss amount and the application of the sophisticated means enhancement were also rejected. The court concluded that the district court had properly considered the relevant sentencing factors and affirmed the sentences imposed. View "United States v. Freitekh" on Justia Law

Artak Ovsepian participated in a healthcare fraud scheme at Manor Medical Imaging, Inc., a sham clinic in Glendale, California. The clinic generated prescriptions for unnecessary medications, which were billed to Medicare and Medi-Cal. Manor employees used the identifying information of Medicare and Medi-Cal beneficiaries, often without their knowledge, to fill these prescriptions. Ovsepian joined the conspiracy in 2010, managing drivers who transported beneficiaries to pharmacies to fill fraudulent prescriptions.The government charged Ovsepian with conspiracy to commit healthcare fraud and aggravated identity theft under 18 U.S.C. § 1028A(a)(1). At trial, the government narrowed the aggravated identity theft charge to the possession of one victim’s identifying information. The jury found Ovsepian guilty on all counts, and he was sentenced to 180 months, including a mandatory 24-month sentence for aggravated identity theft. Ovsepian’s direct appeals were unsuccessful, and the Supreme Court denied his petition for a writ of certiorari.Ovsepian filed a 28 U.S.C. § 2255 motion to vacate his aggravated identity theft conviction, arguing actual innocence. The district court denied the motion, and the Ninth Circuit initially denied a certificate of appealability. However, the Supreme Court remanded the case for reconsideration in light of Dubin v. United States, which clarified the interpretation of the aggravated identity theft statute.The Ninth Circuit reversed the district court’s denial of Ovsepian’s § 2255 motion. The court held that a petitioner convicted under a divisible statute must demonstrate actual innocence only for the prong under which they were convicted. The court found that the jury instructions were erroneous because they did not convey that possession of another’s identifying information must be central to the healthcare fraud to sustain a conviction. Consequently, the Ninth Circuit vacated Ovsepian’s conviction and sentence for aggravated identity theft. View "USA V. OVSEPIAN" on Justia Law

Marcus Millsap was convicted by a jury of conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act (RICO), aiding and abetting attempted murder in aid of racketeering, and conspiracy to distribute and possess with intent to distribute 500 grams or more of methamphetamine. Millsap was involved with the New Aryan Empire, a white-supremacist organization engaged in drug trafficking. He assisted the organization's president, Wesley Gullett, in drug operations and attempted to retaliate against Bruce Hurley, a police informant, by offering money to have him killed. Gullett attempted to kill Hurley but failed, and Hurley was later murdered by an unknown perpetrator.The United States District Court for the Eastern District of Arkansas sentenced Millsap to life imprisonment. Millsap appealed, arguing that his indictment should have been dismissed due to a violation of the Interstate Agreement on Detainers Act, and that the district court made several errors regarding evidentiary issues and juror intimidation. He also challenged his sentence if the convictions were upheld.The United States Court of Appeals for the Eighth Circuit reviewed the case. The court found that the Interstate Agreement on Detainers Act did not apply because Millsap was transferred to federal custody via a writ of habeas corpus ad prosequendum before a detainer was lodged. The court also held that there was no sufficient showing of juror intimidation to justify a mistrial. The court found the evidence sufficient to support Millsap's convictions on all counts, including his association with the drug-trafficking enterprise and his involvement in the attempted murder of Hurley.The court also ruled that the district court did not err in admitting co-conspirator statements and other evidence, and that any potential errors were harmless. The court upheld the district court's application of sentencing enhancements and the calculation of Millsap's criminal history points. Consequently, the Eighth Circuit affirmed the judgment of the district court. View "United States v. Millsap" on Justia Law

Two defendants, Arturo Cuellar ("AC") and Ricardo Quintanilla, were involved in a scheme to bribe city commissioners in Weslaco, Texas, to secure contracts for an infrastructure project. The bribes were intended to influence the awarding of contracts to Camp Dresser & McKee (CDM) and Briones Consulting and Engineering, Ltd. Quintanilla bribed Commissioner Gerardo Tafolla, while AC bribed Commissioner John Cuellar (JC). Leo Lopez, a consultant for CDM and Briones, facilitated the bribes. The scheme involved multiple meetings and payments, with both commissioners taking actions to favor CDM and Briones. The city paid approximately $42.5 million to CDM, Briones, and LeFevre, with Lopez distributing funds to AC and Quintanilla.The United States District Court for the Southern District of Texas convicted Quintanilla and AC of various federal offenses, including conspiracy to commit honest-services wire fraud, honest-services wire fraud, federal program bribery, conspiracy to launder monetary instruments, and money laundering. Quintanilla was sentenced to 200 months in custody, while AC received 240 months. Both were also ordered to pay fines, special assessments, restitution, and forfeiture amounts. The defendants appealed their convictions and sentences.The United States Court of Appeals for the Fifth Circuit reviewed the case and affirmed the convictions and sentences. The court addressed several issues raised by the defendants, including claims of constructive amendment of the indictment, sufficiency of the indictment, recusal of the district judge, and evidentiary rulings. The court found that the government did not constructively amend the indictment and that the evidence supported the convictions. The court also held that the district judge did not need to recuse herself and that the evidentiary rulings were within the court's discretion. The court concluded that the defendants' arguments were either forfeited, not meritorious, or both. View "USA v. Quintanilla" on Justia Law