Justia White Collar Crime Opinion Summaries

Defendant was found guilty of three counts of attempting to cause a financial institution to not file a required currency transaction report (a CTR), in violation of 31 U.S.C. 5324(a)(1). For the first time on appeal, defendant contends that the government and the district court constructively amended the indictment, allowing her to be tried and convicted of violating section 5324(a)(3), and not section 5324(a)(1). Defendant also argues for the first time that the evidence was insufficient to sustain her convictions. The court concluded that, although the instructions given by the district court were not perfect, they did not, under plain error analysis, amount to a constructive amendment of the indictment. The court also concluded, under a plain error analysis, that the evidence was sufficient to convict defendant. Accordingly, the court affirmed the judgment. View "United States v. Leon" on Justia Law

From 2006-2013, Lewis fraudulently held herself out as a Fidelity account representative to at least 12 “investors,” ages 75-92. Although she had been a Financial Industry Regulatory Authority registered broker, 1990-2006, she was neither a registered broker nor affiliated with Fidelity. Lewis set up joint accounts for her investors, including her name on each. Lewis obtained debit cards and forged signatures on checks associated with the accounts to embezzle more than $2 million. She pled guilty to wire fraud, 18 U.S.C. 1343; the government agreed to recommend no more than 10 years’ imprisonment. The court imposed a sentence of 15 years’ imprisonment. The Seventh Circuit remanded for resentencing based on her conditions of supervised release. Before the resentencing hearing, Lewis filed a motion, arguing for the first time, that the government had breached the plea agreement. The district court denied the motion, holding that Lewis had waived this argument, then again sentenced Lewis to a 15‐year term. The Seventh Circuit affirmed, upholding the court’s refusal to consider Lewis’s argument. The court erred by not affirmatively acknowledging that it could have considered it, but the error was harmless because it alternatively rejected the argument, and the argument is meritless. The court did not err with respect to the vulnerable-victim enhancement; the sentence was substantively reasonable. View "United States v. Lewis" on Justia Law

After a bench trial, defendant-appellant Eldon Boisseau was convicted of tax evasion The district court determined that Boisseau, a practicing attorney, willfully evaded paying his taxes by: (1) placing his law practice in the hands of a nominee owner to prevent the Internal Revenue Service (IRS) from seizing his assets; (2) causing his law firm to pay his personal expenses directly given an impending IRS levy, rather than receiving wages; and (3) telling a government revenue officer that he was receiving no compensation from his firm when in fact the firm was paying his personal expenses. On appeal, he challenged the sufficiency of the evidence and argued that the district court wrongly convicted him: (1) without evidence of an affirmative act designed to conceal or mislead; and (2) by concluding that proof satisfying the affirmative act element of tax evasion was sufficient to prove willfulness. Finding no reversible error, the Tenth Circuit affirmed. View "United States v. Boisseau" on Justia Law

An employee of a nonprofit serving disabled adult clients used her position to embezzle more than half a million dollars held by the nonprofit for its clients. After the embezzlement was discovered, Travelers Casualty & Surety Company, the nonprofit's insurance company, made the nonprofit whole. Travelers then sought contribution from the bank in federal court. By submitting certified questions of Washington law, that court has asked the Washington Supreme Court to decide, among other things, whether a nonpayee's signature on the back of a check was an indorsement. Furthermore, the Court was also asked whether claims based on unauthorized indorsements that are not discovered and reported to a bank within one year of being made available to the customer are time barred. The Supreme Court answered yes to both questions. View "Travelers Cas. & Sur. Co. v. Wash. Trust Bank" on Justia Law

Hannon, an attorney, represented Barber in litigation against the victim, Barber’s former domestic partner, Dr. Magno. In December 2006, the parties agreed that Barber would fund a college trust for their children. Barber paid $27,500.32 to Hannon as the trustee of the children’s funds and authorized Hannon to open a bank account. In February 2011, the victim became aware that the children’s funds had been misappropriated. Hannon may have used the money to cover legal fees owed by Barber. Charged with grand theft by embezzlement by a fiduciary (Pen. Code 487(a), 506), Hannon ultimately pled no contest to misdemeanor theft by embezzlement. The trial court placed him on probation for two years, ordered him to perform 240 hours of community service, and ordered him to pay $40,800 in restitution to the victim: $25,000 in attorney’s fees, $15,000 in lost wages, and $800 in mileage. The court of appeal rejected challenges to the restitution award and held that the victim was entitled to file a victim impact statement on appeal, pursuant to the Victims’ Bill of Rights Act of 2008 (Marsy’s Law, Proposition 9 (2008)), but may not raise present legal issues not raised by Hannon or facts not in the record below View "People v. Hannon" on Justia Law

Company A was incorporated in Florida in 2008. Doe was its president and “sole proprietor,” but a November 2008 document purports to memorialize Doe’s sale of all shares of Company A to Company B for $10,000. Numerous filings and tax documents suggested that Doe maintained control and ownership of Company A after the transfer. Multiple individuals have sued Doe and his businesses in state courts around the country based on Doe’s business practices. Doe and the companies became the subjects of a federal grand jury. The government obtained access to Doe’s email. Doe filed an interlocutory appeal to prevent its disclosure. While the appeal was pending, the district court granted permission to present the email to the grand jury, finding that although the email was protected by the work product privilege, the crime-fraud exception to that doctrine applied; in 2016, the grand jury returned a 17-count indictment, charging conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act, conspiracy, mail fraud, wire fraud, and money laundering. The Seventh Circuit dismissed the interlocutory appeal for lack of jurisdiction. The damage of disclosure has already been done. Should a jury convict the defendants, they will have another, equally adequate opportunity to claim privilege. View "In re: Grand Jury Matter #3" on Justia Law

Defendants Johnson and Everson were charged with conspiracy to prepare false and fraudulent income tax returns. The court concluded that the district court did not abuse its discretion in refusing to grant the Government's initial motion for waiver of a jury trial, there is no constitutional right to a non-jury trial, and defendants failed to assert a claim of prejudice before the district court and their requests for waiver of a jury trial were intelligently made. The court also concluded that the district court did not clearly err in adopting the PSR’s calculation method in estimating the amount of tax loss generated by defendants' fraudulent activity. Finally, the court concluded that the time frame allotted to defendants to prepare their defense did not constitute plain error. Accordingly, the court affirmed the judgment. View "United States v. Johnson" on Justia Law

Defendant pled guilty to a multi-count indictment for crimes related to his involvement in a fraudulent Medicare scheme. On appeal, defendant challenges his 97 month sentence. The court concluded that defendant's principal argument that using the 2009 Guidelines definition of “victim” to enhance his sentence violates the Ex Post Facto Clause is foreclosed by precedent; defendant waived his argument that even if the 2009 Guidelines apply to his sentence, the Medicare beneficiaries were not “victims” within the meaning of the 2009 definition but were more like co-conspirators; and defendant's remaining claims are without merit. Accordingly, the court affirmed the sentence. View "United States v. Shakbazyan" on Justia Law

Defendant, the owner and operator of a freight service that couriered items to and from the United States and Canada, was found guilty of nine counts of tax-related offenses. Defendant was charged with violating 26 U.S.C. 7212(a), which imposes criminal liability on one who ʺcorruptly or by force or threats of force . . . endeavors to intimidate or impede any officer or employee of the United States acting in an official capacity under this title.” Another portion of the statute, often referred to as the ʺomnibus clause,ʺ imposes criminal liability on one who ʺin any other way corruptly . . . obstructs or impedes, or endeavors to obstruct or impede, the due administration of this title.ʺ On appeal, defendant argued that the court, like the Sixth Circuit, should construe the phrase ʺthe due administration of this titleʺ in the omnibus clause to include only a pending IRS action of which a defendant was aware. The court rejected defendant's argument and joined three of its sister circuits in concluding that section 7212(a)ʹs omnibus clause criminalizes corrupt interference with an official effort to administer the tax code, and not merely a known IRS investigation. The court also concluded that an omission may be a means by which a defendant corruptly obstructs or impedes the due administration of the Internal Revenue Code under section 7212(a). Finally, the court concluded that the district court did not commit procedural error by using the manner of calculating the tax loss and restitution amounts that it did, or by deciding not to apply a two‐level reduction to defendant's base offense level for acceptance of responsibility. Accordingly, the court affirmed the judgment. View "United States v. Marinello" on Justia Law

In 2010, Free, as the sole proprietor of Electra Lighting, filed a voluntary bankruptcy petition. He also owns Freedom Firearms, selling WWII-era guns. After Free fell behind on payments on business-related properties, the lender purchased them in foreclosure; Free purportedly filed for bankruptcy in an effort to “stay” the sale and “work out an agreement.” He had sufficient assets to pay his debts. He then hid assets worth hundreds of thousands of dollars from the Bankruptcy Court. Free was eventually convicted for multiple counts of bankruptcy fraud. His creditors received 100 cents on the dollar. The Sentencing Guidelines increase a fraudster’s recommended sentence based on the amount of loss he causes, or intends to cause. The district court treated the estimated value of the assets that Free concealed and the amount of debt sought to be discharged as the relevant “loss” under the Guidelines. The Third Circuit vacated. On remand, the court must determine whether Free intended to cause a loss to his creditors or what he sought to gain from committing the crime. Free will not necessarily receive a lower sentence on remand. Free’s repeated lying to the Bankruptcy Court and his manifest disrespect for the judicial system may merit an upward variance from the Guidelines. View "United States v. Free" on Justia Law