Justia White Collar Crime Opinion Summaries

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

In 2013-2015, defendant and her accomplices defrauded several people in the U.S. and Canada, whom they had met on dating websites, by persuading them to wire money to bank accounts controlled by the schemers to help their fictitious selves deal with fictitious personal tragedies or take advantage of fictitious money‐making opportunities. They repeatedly victimized some of the same people.The defendant pleaded guilty to wire fraud, 18 U.S.C. 1343, was sentenced to 120 months in prison (half the statutory maximum). At sentencing the district judge focused on 21 of the defendant’s victims, who had lost a total of some $2.2 million and who ranged in age from 47 to 71. The judge added a two‐level vulnerable‐victim enhancement, U.S.S.G. 3A1.1(b)(1), without which the guidelines range would have been 63 to 78 months. The Seventh Circuit affirmed, noting the district court’s concern that the defendant continued to pose a risk and that that “the impact on the victims, although considered under the guidelines to the extent that the guidelines contemplate vulnerable victims … doesn’t actually fully appreciate or really contemplate the specific emotional and financial impact on the victims, and so that is the basis for my departure from the guideline range.” View "United States v. Iriri" on Justia Law

Defendant was convicted of conspiracy to commit offenses against the United States, aiding and abetting copyright infringement, and aiding and abetting the trafficking of counterfeit goods. Defendant's convictions stemmed from his role as the owner of a flea market where vendors sold counterfeit goods. The court rejected defendant's argument that the statutes under which he was charged and convicted are unconstitutional as applied to him because he did not have fair notice that his behavior was criminal; it was unclear what he should have done to avoid liability; and law enforcement enforced the statutes arbitrarily. In this case, defendant was not merely a passive landlord who is merely renting his property. Rather, defendant was actively involved at his market, continually reminded his vendors that he was in charge, and even involved himself in regulating the prices of counterfeit goods. Even if defendant had been a less active landlord, a person of ordinary intelligence would reasonably understand that intentionally selling counterfeit products at a flea market, or willfully infringing copyrighted works at the market for financial gain, could result in criminal liability, and that intentionally aiding and abetting such conduct could result in the same. Furthermore, the evidence shows that defendant received actual notice that his conduct as the operator of the flea market was unlawful. The evidence showed that defendant both understood that his tenants were acting contrary to the law and actively helped to facilitate the unlawful conduct to his and his tenants’ financial benefit. In this case, defendant presents no reason to believe the statutes at issue did not clearly apply to him, and he fails to consider that although his arrest did not occur sooner, he was given numerous warnings over the years that his conduct violated the law. Accordingly, the court affirmed the judgment. View "United States v. Frison, Sr." on Justia Law

Sawyer, with co-defendants, formed A&E to recover salvageable materials (copper, steel, aluminum) from the 300-acre Hamblen County site of the former Liberty Fibers rayon plant, which contained buildings, a water treatment facility, and extensive above-ground piping. The defendants knew that many of the buildings contained regulated asbestos-containing material (RACM), such as pipe-wrap, insulation, roofing, and floor tiles, much of which was marked. Demolition did not comply with National Emission Standards for Hazardous Air Pollutants (NESHAP) governing the handling and disposal of asbestos. Workers were not provided with proper respirators or protective suits; some were asked to remove or handle friable asbestos without adequately wetting it. In a 2008 consent agreement, A&E agreed to correct the violations and comply with NESHAP during future removal and demolition. In 2009, the EPA terminated the agreement and issued an immediate compliance order. Federal agents searched the site, seized documents, and took samples of RACM. EPA, acting under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), cleaned up the site, at a cost of $16,265,418. In 2011, Sawyer and his co-defendants were charged. Sawyer pled guilty to conspiring to violate the Clean Air Act, 18 U.S.C. 371. His PSR calculated a guideline sentencing range of 87-108 months. The statutory maximum under 18 U.S.C. 371 is 60 months, so his effective range was 60 months. The Sixth Circuit affirmed Sawyer’s 60-month sentence and an order holding the co-defendants jointly and severally liable for $10,388,576.71 in restitution to the EPA. View "United States v. Sawyer" on Justia Law