Justia White Collar Crime Opinion Summaries

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

Acting on “obviously nonpublic information” that a golfing buddy, McPhail, received from a corporate insider, Parigian made more than $200,000 trading in securities. A federal criminal securities fraud indictment alleged a “misappropriation theory” against Parigian, arguing that Parigian knew or should have known that, by providing the inside information to Parigian, McPhail breached a duty of trust and confidence and personally benefited by doing so. He pled guilty to the charges conditionally. The First Circuit rejected Parigian's preserved challenges to the indictment, following the circuit’s controlling precedent: allegations of a friendship between McPhail and Parigian plus an expectation that the tippees would treat McPhail to a golf outing and assorted luxury entertainment is enough to allege a benefit if a benefit is required. The court rejected an argument that the government was obligated to allege that the insider was also expecting a benefit when passing along confidential information to McPhail in the first instance. View "United States v. Parigian" on Justia Law

Peterson, a Madison Wisconsin entrepreneur, owned a polyurethane scrap-foam material company and a development company, with Shapiro and Spahr. Peterson made unauthorized intercompany loans and used corporate funds to pay off his personal gambling debts. Eventually all of his businesses failed, the companies defaulted, and federal agents investigated. Peterson was indicted on 13 counts: bank fraud, making false statements to banks, money laundering, and pension theft. The judge entered judgment of acquittal on two counts and at sentencing imposed a within-guidelines prison term of 84 months on the remaining six. The Seventh Circuit rejected claims of evidentiary and instructional error and his arguments for judgment of acquittal or a new trial as having no merit; the evidence was easily sufficient to support the jury’s verdict. The court also upheld the joinder of the pension-theft count for trial with the others. The court vacated the sentence. The judge correctly calculated the gross receipts Peterson derived from his fraud; because he was the sole perpetrator, all proceeds of the fraud were properly attributed to him. But Peterson repaid in full a $300,000 wire transfer before detection of his fraud, so that sum should not have been included in the total loss amount. View "United States v. Peterson" on Justia Law

Defendants were found liable under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), 12 U.S.C. 1833a, for mail and wire fraud affecting a federally insured financial institution. The Government alleged that defendants violated the federal mail and wire fraud statutes by selling poor-quality mortgages to government-sponsored entities. Defendants argue that the evidence at trial shows at most an intentional breach of contract and is insufficient as a matter of law to find fraud. The court agreed with defendants that the trial evidence fails to demonstrate the contemporaneous fraudulent intent necessary to prove a scheme to defraud through contractual promises. Accordingly, the court reversed with instructions to enter judgment in favor of defendants. View "United States ex rel. O’Donnell v. Countrywide Home Loans, Inc." on Justia Law

Defendants Nshanian and Nash were convicted of conspiracy to commit wire fraud, and wire fraud. Defendants' convictions stemmed from their involvement in a scheme to purchase real estate using material misrepresentations. The court concluded that there was sufficient evidence to convict Nshanian where a reasonable jury could infer that he knew of the conspiracy and scheme to defraud, and that he intended to defraud lenders. Therefore, the district court did not err in denying Nshanian’s motion for judgment of acquittal. The court also concluded that the district court did not err at sentencing when it imposed a two-level increase for obstruction of justice pursuant to USSG 3C1.1 where the record is clear that the district court recognized its obligation to consider whether inaccurate testimony resulted from confusion, mistake or faulty memory. Under these circumstances, the district court’s finding was adequate. The court also concluded that Nshanian's 42-month sentence was substantively reasonable where it represented a substantial downward variance from the advisory guideline range. Finally, Nash's 42-month sentence was also substantively reasonable where the district court considered the 18 U.S.C. 3553(a) factors and sentenced Nash to a lower advisory guideline range. Accordingly, the court affirmed the judgment. View "United States v. Arman Nshanian" on Justia Law

Defendant was convicted of one count of investment adviser fraud, one count of securities fraud, four counts of wire fraud, and six counts of offenses in violation of the Travel Act, 18 U.S.C. 1952. Defendant raised numerous issues on appeal. In this opinion, the court concluded that a criminal conviction premised on a violation of section 206 of the Investment Advisers Act of 1940, 15 U.S.C. 80b-6, does not require proof of intent to harm. Therefore, the district court did not err in not instructing the jury that investment adviser fraud requires proof of intent to harm his clients. In a summary order filed herewith, the court rejected defendant's remaining arguments. Accordingly, the court affirmed the judgment. View "United States v. Tagliaferri" on Justia Law

Four persons were charged with arranging the murder of “Montes” in Mexico to reduce competition against a Chicago-based criminal organization that created bogus immigration documents. The Seventh Circuit reversed dismissal on grounds that the indictment proposed the extraterritorial application of U.S. law. On remand, one defendant pleaded guilty. Three were convicted under 18 U.S.C. 1959, the Racketeer​ Influenced and Corrupt Organizations Act (RICO); 18 U.S.C. 956(a)(1), which forbids any person “within the jurisdiction of the United States” from conspiring to commit a murder abroad; and conspiring to produce false identification documents, 18 U.S.C. 371. On appeal, defendants cited the Supreme Court’s 2010 decision, Morrison v. National Australia Bank, which reiterated the presumption against extraterritorial application of civil statutes. The Seventh Circuit affirmed, noting that its earlier decision recognized that presumption and thought it not controlling, because of the differences between criminal and civil law, and because the murder in Mexico was arranged and paid for from the U.S., and was committed with the goal of protecting a criminal organization that conducted business in the U.S., to defraud U.S. officials and employers. View "United States v. Leija-Sanchez" on Justia Law

Ocasio and other police officers routed damaged vehicles from accident scenes to an auto repair shop in exchange for kickbacks. He was charged with obtaining money from the shopowners under color of official right (Hobbs Act, 18 U.S.C. 1951), and conspiring to violate the Hobbs Act, 18 U.S.C. 371. The court rejected his argument that—because the Act prohibits the obtaining of property “from another”—a Hobbs Act conspiracy requires proof that the alleged conspirators agreed to obtain property from someone outside the conspiracy. The Fourth Circuit and Supreme Court affirmed his conviction. A defendant may be convicted of conspiring to violate the Act based on proof that he reached an agreement with the owner of the property in question to obtain that property under color of official right. The general federal conspiracy statute, under which Ocasio was convicted, makes it a crime to “conspire . . . to commit any offense against the United States.” It is sufficient that the conspirator agreed that the underlying crime be committed by a member of the conspiracy capable of committing it. Ocasio and the shopowners shared a common purpose that officers would obtain property “from another” (shopowners) under color of official right. The Court noted that its decision does not transform every bribe of a public official into conspiracy to commit extortion. View "Ocasio v. United States" on Justia Law