Justia White Collar Crime Opinion Summaries

Defendants Farha, Behrens, Kale, and Clay appeal their convictions for charges related to Medicaid fraud on multiple grounds. Defendants were all high-level executives of WellCare or one of its Florida subsidiaries, Staywell and HealthEase. At trial, the government proved that together defendants participated in a fraudulent scheme to file false Medicaid expense reports that misrepresented and overstated the amounts Staywell and HealthEase spent on medical services for Medicaid patients, specifically outpatient behavioral health care services. The court concluded that the evidence was sufficient to convict Farha, Behrens, and Kale for health care fraud; there was sufficient evidence to convict Behrens for making false representations to AHCA; and there was sufficient evidence to convict Clay for making false statements to federal agents. The court rejected Farha, Behrens, and Kale's challenge to the jury instructions with regard to their fraud convictions. Finally, the court rejected defendants' claims of evidentiary error. Accordingly, the court affirmed the convictions. View "United States v. Clay" on Justia Law

Defendant appealed his conviction and sentence for multiple counts of bank fraud and related offenses. The court concluded that defendant has not cited any authority recognizing his proposed exception to Franks v. Delaware, and the court declined defendant's invitation to create a new exception to well-established Supreme Court precedent; the district court did not abuse its discretion in applying a six-level enhancement under USSG 2B1.1(b)(2)(C) for an offense committed with over 250 victims; the district court did not err by applying an eighteen-level enhancement under section 2B1.1(b)(1)(J) because the district court's calculation that defendant's total intended loss was between $2,500,000 and $7,000,000, was not unreasonable; and defendant's request for remand is foreclosed by United States v. Garcia-Carrillo. Accordingly, the court affirmed the judgment. View "United States v. Minor" on Justia Law

Defendant was convicted of laundering and conspiring to launder money, and making a false statement. Defendant had laundered drug proceeds received from his brother-in-law, Brandon Lusk, through his law firm, and then lied to an IRS agent about his financial arrangements with Lusk. When Lusk was investigated by authorities, defendant acted as his lawyer and advised him to hide the nature of their financial relationship. The court concluded that the district court acted well within its discretion to rule that a question implying that defendant had associated with a person later charged with criminal activity, even if improper, did not require a new trial. In this case, the question was half-finished and unanswered. Moreover, the other inculpatory evidence the jury heard was extensive. The court also concluded that the district court properly considered the fact that defendant put his own personal interests ahead of his clients, and that this factor was enough to justify the sentence imposed, even if it resulted in a sentence that was harsh in comparison to others involved in the drug trafficking operation. Finally, there is no indication that the district court punished defendant more harshly because he was a lawyer. Accordingly, the court affirmed the judgment. View "United States v. Boedigheimer" on Justia Law

In 2008, Johnston, a horse racetrack executive, promised a $100,000 campaign contribution to then-Governor Blagojevich in exchange for his signature on a bill to tax the largest casinos in Illinois for the direct benefit of the Illinois horse racing​ industry. After Blagojevich’s corruption came to light, the casinos sued the racetracks, alleging a conspiracy to violate the federal Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1961, and state‐law claims for civil conspiracy and unjust enrichment. A jury awarded the casinos $25,940,000 in damages, which was trebled under RICO to $77,820,000. The Seventh Circuit affirmed in part, holding that the jury did not have legally sufficient evidence to support a verdict finding a conspiracy to engage in a “pattern” of racketeering activity, as required for liability on a RICO conspiracy theory. The casinos are still entitled to the $25,940,000 in damages on the state‐law claims, but not to have those damages trebled under RICO. View "Empress Casino Joliet Corp. v. Balmoral Racing Club, Inc." on Justia Law

Years after Steven Greenfield was implicated in tax evasion as a result of a document leak, the Government issued a summons for Greenfield’s records, including documents relating to all of Greenfield’s financial accounts and documents pertaining to the ownership and management of offshore entities controlled by Greenfield. Greenfield opposed production and moved to quash the summons based on his Fifth Amendment right against self-incrimination. The district court granted enforcement as to a subset of the records demanded by the summons. The court found that, for all but a small subset of the documents covered by the order, the Government has not demonstrated that it is a foregone conclusion that the documents existed, were in Greenfield’s control, and were authentic even in 2001. Second, the court found that the Government has failed to present any evidence that it was a foregone conclusion that any of the documents subject to the summons remained in Greenfield’s control through 2013, when the summons was issued. Accordingly, the court vacated the district court's order and remanded, because the Government has not made the showing that is necessary to render Greenfield’s production of the documents non-testimonial and, hence, exempt from Fifth Amendment challenge. View "United States v. Greenfield" on Justia Law

Defendant, then a 67-year-old retired engineer turned tax preparer, was convicted of 32 federal offenses arising from a tax fraud scheme. Defendant was sentenced to fifteen years in prison and ordered to pay just over $500,000 in restitution. The court held that 18 U.S.C. 1546(a) does not apply to U.S. passports or U.S. passport cards. Thus, the district court erred by denying defendant’s motion for judgment of acquittal as to Counts 33 and 34. The court concluded that the district court clearly erred in holding that the conduct at issue in the second case, where defendant was not convicted, was sufficiently “related” to the conduct at issue in the first case to warrant inclusion of losses in the second case in the order for restitution pursuant to 18 U.S.C. 3663A(a)(2). Consequently, the court concluded that although ordering restitution for related conduct that did not result in a conviction was within “statutory bounds,” the order for restitution, here, was an abuse of discretion. The United States concedes, and the court agreed, that the wrong version of USSG 2B1.1(b)(2)(C) was used and that this error requires remand to resolve the determination of the number of victims; the primary flaw with the “intended loss” finding, here, is that the district court improperly considered the intended loss from the second case, even though the second case did not involve “relevant conduct,” under USSG 1B1.3(a)(2); the United States nowhere identifies evidence establishing - or identified by the district court as the basis for a finding - that specific challenged amounts of intended loss in the first case were, in fact, actual or intended losses; the district court erroneously applied the identity theft specific offense characteristic under USSG 2B1.1(b)(11)(C); the district court properly imposed the “sophisticated means” enhancement under USSG 2B1.1(b)(9)(C); because the court vacated defendant's conviction on Count 33, no cross-reference is applicable and the district court must recalculate the sentence on remand; the district court properly applied the enhancement for “abuse of trust” under USSG 3B1.3; and the district court properly applied an "obstruction of justice" enhancement under USSG 3C1.1. Accordingly, the court affirmed in part, reversed in part and remanded. View "United States v. Thomsen" on Justia Law

Defendant, a tile salesman, received material, nonpublic information from a corporate inside and then passed that information along to friends, who used it to obtain substantial trading gains. After a jury trial, Defendant was convicted of committing securities fraud and conspiring to commit securities fraud. Defendant appealed, arguing that there was insufficient evidence in the record to support his conviction, where he was neither a corporate insider nor a trader of securities. The First Circuit affirmed, holding (1) the evidence was sufficient to show that Defendant knowingly breached a duty of confidence; (2) the district court’s instructions did not improperly shift the burden of proof or misstate the state of mind element of the securities fraud offense; and (3) the evidence was sufficient to show that Defendant anticipated receiving a benefit as a result of his disclosure. View "United States v. McPhail" on Justia Law

Eberts is a film producer whose credits include Lord of War (2005) and Lucky Number Slevin (2006). After a string of failed movies, in 2009, he filed for bankruptcy. He was introduced to Elliott, an Illinois novice author who wanted to adapt his book into a movie. Eberts and Elliott formed a limited liability company. Both agreed to invest money. Eberts did not disclose his insolvency. Over the next year Elliott wired $615,000 to accounts controlled by Eberts. Eberts applied only 10% of that money toward the movie; he paid his father and bankruptcy attorney and spent the rest on personal items like art, furniture, designer clothing, and fine wines. Eberts also solicited and received a $25,000 loan from Elliott for an unrelated project and never repaid it. After Elliott discovered the scam, he filed suit. Later, Eberts pleaded guilty to seven counts of wire fraud, 18 U.S.C. 1343, and three counts of money laundering, section 1957, and was sentenced to 46 months’ imprisonment, the top of the guidelines range. The Seventh Circuit affirmed, rejecting an argument that the court failed to consider the 18 U.S.C. 3553(a) sentencing factors or Eberts’s mitigation arguments, but based the sentence on unsupported facts. View "United States v. Eberts" on Justia Law

Defendant was convicted of three counts of tax evasion and sentenced to 51 months in prison, as well as three years of supervised release. Defendant contends that he was entitled to present provisions of the Internal Revenue Code and other material to the jury for the purpose of supporting a mistaken-belief defense. The court affirmed the district court's evidentiary rulings, concluding that the right to present a complete defense does not entitle a defendant to present the jury with evidence that is either irrelevant or is properly excluded under Federal Rule of Evidence 403. The court concluded that Special Condition 13, which requires that defendant refrain from creating or establishing any new websites and that he remove any of his currently existing websites, and Special Condition 14, which bans defendant from using or possessing computing devices without prior written approval from a probation officer and requires him to consent to searches of any computer he is permitted to possess, are both overly broad. Accordingly, the court affirmed the district court's evidentiary rulings but vacated the challenged special conditions of supervised release and remanded for resentencing. View "United States v. West" on Justia Law

In 2003, the government awarded Laguna a contract for Worldwide Environmental Remediation and Construction (WERC). Under the contract, Laguna received 16 cost-reimbursable task orders to perform work in Iraq, and awarded subcontracts to several subcontractors. The physical work under the contract was completed by 2010. Laguna sought reimbursement of past costs, a portion of which the government refused to pay after an audit by the Defense Contract Audit Agency. Before the Armed Services Board of Contract Appeals, the government alleged that it was not liable because Laguna had committed a prior material breach by accepting subcontractor kickbacks (18 U.S.C. 371, 41 U.S.C. 53), excusing the government’s nonperformance. Three of Laguna’s officers were ultimately indicted for kickbacks. The Board granted the government summary judgment on that ground, The Federal Circuit affirmed. Laguna committed the first material breach by violating the contract’s Allowable Cost and Payment clause because its vouchers were improperly inflated to include the payment, Federal Acquisition Regulation 52.216-7. View "Laguna Constr. Co. v. Carter" on Justia Law