Justia White Collar Crime Opinion Summaries

Stoller, the beneficiary of a trust that holds title to a house, assigned his beneficial interest to his daughter but reserved a “power of direction” with the right to obtain loans for himself, secured by the property. He directed the trust to rent out the property; he received the income. IStoller filed for bankruptcy. None of his filings mentioned the property. A question specifically asked about “all property owned by another person that [he] [held] or control[led].” Under penalty of perjury, he answered “none.” Stoller was charged with two counts of knowingly and fraudulently concealing property that belonged to a bankruptcy estate, 18 U.S.C. 152(1), and seven counts of knowingly and fraudulently making a false statement in a bankruptcy proceeding, 18 U.S.C. 152(3). Represented by an appointed lawyer, he pled guilty to one count of making a false statement; the government dismissed the remaining counts. Before sentencing, Stoller considered moving to withdraw his plea on the ground that he was not mentally competent. A new lawyer was appointed. Stoller was examined by a board‐certified neuropsychologist, who concluded that Stoller was competent to plead guilty. Stoller’s lawyer then unsuccessfully moved to withdraw the plea based on alleged defects in the plea colloquy. Stoller was sentenced to 20 months’ imprisonment. The Seventh Circuit affirmed. Stoller was competent to plead guilty, his plea was not coerced, the colloquy included most of the basics, and Stoller was not prejudiced by any deficiency. View "United States v. Stoller" on Justia Law

Former Virginia Governor McDonnell, and his wife were indicted on honest services fraud and Hobbs Act extortion charges related to their acceptance of $175,000 in loans, gifts, and other benefits from Williams, the CEO of Star Scientific, which developed Anatabloc, a nutritional supplement made from a compound found in tobacco. Williams wanted McDonnell’s assistance in getting public universities to perform research studies on the product. The government asserted that McDonnell committed (or agreed to commit) an “official act” in exchange for the loans and gifts. An “official act” is “any decision or action on any question, matter, cause, suit, proceeding or controversy, which may at any time be pending, or which may by law be brought before any public official, in such official’s official capacity, or in such official’s place of trust or profit,” 18 U.S.C. 201(a)(3). The claimed “official acts,” included “arranging meetings” for Williams with other Virginia officials, “hosting” events at the Governor’s Mansion, and “contacting other government officials” concerning the studies. The district court instructed the jury that “official act” encompasses “acts that a public official customarily performs,” including acts “in furtherance of longer-term goals” or “in a series of steps to exercise influence or achieve an end.” The court declined to give McDonnell’s requested instruction that “merely arranging a meeting, attending an event, hosting a reception, or making a speech are not, standing alone, ‘official acts.’” The Fourth Circuit affirmed the convictions. A unanimous Supreme Court vacated. An “official act” involves a decision or action (or an agreement to act or decide) on “question, matter, cause, suit, proceeding or controversy,” by a formal exercise of governmental power. The pertinent matter must be more focused and concrete than “Virginia business and economic development,” and a decision or action is more than merely setting up a meeting, hosting an event, or calling another official. The government’s expansive interpretation of “official act” would raise significant constitutional concerns. Conscientious public officials arrange meetings for constituents, contact other officials on their behalf, and include them in events all the time. The jury instructions, therefore, were significantly overinclusive. View "McDonnell v. United States" on Justia Law

A jury convicted Robert Holloway of four counts of wire fraud and one count of tax fraud. The charges against Holloway were the result of a scheme he created through his company, US Ventures, that defrauded over 250 investors and caused losses in excess of $15 million. Holloway began soliciting investors in 2005 by guaranteeing incredible returns in futures markets due to a mathematical algorithm he had created. When Holloway failed to realize the gains he promised, he started defrauding his investors by stating that his trading was profitable even though he lost substantial amounts of money, using money from new investors to pay other investors, and fabricating reports to investors stating that his daily returns were between 0 to 1.15% and that his trading never resulted in a loss. He also diverted investor funds for his own personal use. The district court sentenced Holloway to 225 months of imprisonment on all five counts. On appeal, Holloway argued: (1) he was denied his Sixth Amendment right to counsel of his choice; (2) the district court allowed impermissible victim impact testimony; (3) denied him his constitutional right to confront witnesses; and (4) improperly enhanced his sentence. Finding no reversible error, the Tenth Circuit affirmed. View "United States v. Holloway" on Justia Law

Defendant John G. Rowland, the former governor of Connecticut, appealed his conviction of seven counts of violating campaign-finance laws and falsifying records. The court concluded that the broad language of 18 U.S.C. 1519 encompasses the creation of 18 documents - like the contracts at issue here - that misrepresent the true nature of the parties’ negotiations, when the documents are created in order to frustrate a possible future government investigation; the court rejected defendant's assertion that principles of contract law prevent the court from concluding that documents styled as contracts are “falsified” within the meaning of the statute; the court determined that the government adequately disclosed Lisa Wilson‐Foley’s statements to defendant, and that even if it did not, he is not able to show that he was prejudiced by the deficiency; and the court rejected defendant's challenges to the District Court’s other rulings at trial and at sentencing. View "United States v. Rowland" on Justia Law

The Bickarts prepared and filed an income tax return containing false income and withholding amounts, supported by fabricated 1099‐OID forms, appearing to come from major financial institutions. The IRS paid a claimed refund of $115,412. Their legitimate refund would have been $263. The IRS discovered the fraud and sent a bill for $217,923. For years, the Bickarts engaged in obstructive conduct, sending a 1040‐V payment coupon and continuing to insist that the bill had been paid. They made baseless accusations against IRS agents. They were convicted of conspiring to file and filing a false claim to defraud the government, 18 U.S.C. 286 and 287. The Bickarts represented themselves at trial, asserting “sovereign citizen” claims and making nonsensical accusations. The PSR applied a two‐level enhancement for sophisticated means based on the fictitious Forms 1099‐OID and a two‐level enhancement for obstruction of justice, resulting in a guidelines imprisonment range of 33-41 months. Neither objected to the calculations. The court sentenced each defendant to 24 months in prison. Defendants objected to supervised release conditions requiring them to notify third parties of risks related to their criminal history when directed by the probation office. The court modified it to require the probation office to seek court approval. They also objected to the condition permitting a probation officer to visit them at home or at work at any reasonable time. The court overruled the objection. The Seventh Circuit vacated the third‐party notification condition, but otherwise affirmed the remaining conditions of supervised release and sentence. View "United States v. Bickart" on Justia Law

Penal Code section 424 applies to "[e]ach officer of this state, or of any county, city, town, or district of this state, and every other person charged with the receipt, safekeeping, transfer, or disbursement of public moneys." The court held that section 424 applies only to those public officers imbued with such responsibility over public moneys. In this case, the court concluded that the evidence was sufficient to support the jury's verdict finding defendant, who served as superintendent of the District, was charged with the "receipt, safekeeping, transfer, or disbursement" of public funds. The evidence demonstrated that defendant had explicit contractual responsibilities to oversee the "budget and business affairs" of the District, testimony that superintendents like defendant owe a duty to safeguard school district funds, and defendant‘s responsibility to ensure such public funds were spent in accordance with the law. Accordingly, the court reversed and remanded. View "People v. Hubbard" on Justia Law

Defendant was convicted of charges related to her participation in an extensive mortgage-fraud conspiracy and was ordered to pay more than $2 million in restitution and to forfeit more than $100 million. The court rejected defendant's contention that the restitution amount was not supported by adequate evidence and that it violated the Eighth Amendment where the district court explicitly stated that it would calculate loss through the method defendant advocates. Defendant's bare speculation on appeal that this process was somehow deficient does not approach her burden of demonstrating clear or obvious error in the court’s restitution calculations. Without error in the loss calculation, defendant's Eighth Amendment claim fails. The court rejected defendant's challenges to the order of monetary forfeiture imposed at sentencing, concluding that defendant's bare assertion that the district court needed more evidence to make an accurate accounting of the loan proceeds falls far short of her burden of demonstrating clear or obvious error in the district court’s calculation.Furthermore, it is not anomalous to order her jointly and severally liable, along with the other participants in that conspiracy, for the total amount of money that was illegally gained by the conspiratorial enterprise. Finally, the court concluded that the order of forfeiture is punitive and therefore subject to Eighth Amendment excessiveness review. The court vacated the order with respect to Count 1 and remanded for reconsideration of that amount in light of the Eighth Amendment's Excessive Fines Clause. The court affirmed the order of restitution and the amounts of forfeiture ordered on defendant's convictions for Counts 10, 11, 13, and 14. View "United States v. Beecroft" on Justia Law

Defendant pled guilty to embezzlement by a bank employee and was sentenced to 21-months in prison. Although defendant offered the sort of evidence that could have persuaded the district court to vary downward from the advisory Guidelines sentence, the district court did not abuse its discretion in declining to do so. After viewing defendant's exhibits and considering her arguments in light of the 18 U.S.C. 3553(a) factors, the district court concluded that the nature and circumstances of defendant's offense gave insight into her character, namely that she endeared herself to her coworkers and employers, established trust with them, stole from them for four years, attempted to hide the embezzlement, and then denied that it occurred. Therefore, the court concluded that the district court did not abuse its discretion in this case and affirmed the judgment. View "United States v. Kobriger" on Justia Law

From 1997-2001, Nacchio served as Qwest's CEO. Based on 2001 stock trades, Nacchio reported a net gain of $44,632,464.38 on his return and paid $17,974,832 in taxes. In 2007, Nacchio was convicted of 19 counts of insider trading, 15 U.S.C. 78j, 78ff. Following a remand, the court resentenced Nacchio to serve 70 months in prison, pay a 19 million dollar fine, and forfeit the net proceeds, $44,632,464.38. Nacchio settled a concurrent SEC action, agreeing to disgorge $44,632,464. Nacchio’s criminal forfeiture satisfied his disgorgement obligation. The Justice Department notified participants in private securities class action litigation or SEC civil litigation concerning Qwest stock that they were eligible to receive a remission from Nacchio’s forfeiture. Nacchio sought an income tax credit of $17,974,832 for taxes paid on his trading profits. The IRS argued that his forfeiture was a nondeductible penalty or fine and that he was estopped from seeking tax relief because of his conviction. The Claims Court held that Nacchio could deduct his forfeiture payment under Internal Revenue Code 165, but not under I.R.C. 162 and was not collaterally estopped from pursuing special relief under I.R.C. 1341. The Federal Circuit reversed as to section 165;Nacchio failed to establish that his forfeiture was not a “fine or similar penalty.” Because establishing deductibility under another section of the code is a prerequisite to pursuing relief under section 1341, Nacchio cannot pursue a deduction under that section. View "Nacchio v. United States" on Justia Law

Defendant appealed his conviction and sentence for interfering with the administration of the tax laws in violation of 26 U.S.C. 7212, presenting fictitious financial instruments in violation of 18 U.S.C. 514, and presenting false claims to the United States in violation of 18 U.S.C. 287. The court concluded that the evidence was sufficient to preclude a judgment of acquittal on the section 514 counts. Because, however, it was not so overwhelming that it negated the prejudice flowing from the lack of any instruction that the financial instruments in question had to be issued “under the authority of the United States,” the court remanded for a new trial. The court also concluded that it was not error for the district court not to instruct the jury that an attempt to reduce tax liability is not a “claim” within the meaning of section 287; the section 7212 charge was timely; the court agreed with the Fourth Circuit that a charge under section 7212 is timely so long as it is returned within six years of an affirmative act of evasion, even if the evasion first began outside the period; the section 7212(a) charge was not duplicitous; and, even if the government’s rebuttal summation had been improper, it was harmless. Accordingly, the court affirmed in part, vacated in part, and remanded. View "United States v. Murphy" on Justia Law