Justia White Collar Crime Opinion Summaries

The Soto family - Carmen and Pedro and their son, Steven - operated a real estate business in Massachusetts that they used to orchestrate several fraudulent real estate transactions. The Sotos were each convicted of multiple counts of mail fraud based on these fraudulent transactions. Steven and Pedro were also convicted of multiple counts of aggravated identity theft. The First Circuit affirmed the convictions and sentences, holding (1) the district court did not err in denying Defendants’ motion to suppress evidence from a laptop and from the Soto family residence; (2) Steven was not subject to double jeopardy; (3) there was no plain error in admitting testimony of a certain witness; (4) the district court did not abuse its discretion in excluding a report from the Government Accountability Office; (5) there was sufficient evidence to sustain the convictions; (6) the Sotos waived any challenge to the good faith/condonation instruction, and the reasonable doubt instruction was not erroneous; and (7) the district court did not abuse its discretion in ordering Carmen to pay $792,559 in restitution. View "United States v. Soto" on Justia Law

Waters obtained a job at West. Cafesjian was a senior executive. Cafesjian later moved to Florida; retired; sold his shares for $250 million when West was sold; started a foundation and the GLC family office; and hired Waters to manage GLC in Minneapolis. Cafesjian opened a personal account with Northern Trust in Florida. Both men were signatories, Waters opened Minneapolis US Bank account. Both men were signatories. Transfers from Cafesjian’s Northern account funded the US Bank account. Between 1999 and 2004, Waters wrote more than 120 checks on the US Bank account, generally for exactly $5,000, $6,000, or $7,000, totaling $1,373,525. Waters ensured that no one else saw the bank statements and instructed GLC’s bookkeeper on how to record transactions. Much of the money went through accounts held by Waters’ girlfriend, his daughters, and an exchange student. When Waters resigned and was investigated, Waters claimed that Cafesjian was incompetent and that the money was related to deferred compensation. Civil suits were stayed when Waters was charged with mail fraud, wire fraud, and tax-related crimes. Convicted, Waters was sentenced to 108 months. The court found Waters embezzled between $2.5 and $7 million, used sophisticated means to perpetrate the fraud, and obstructed justice. The Eighth Circuit affirmed, rejecting challenges to the sufficiency of the evidence, loss calculations, and sentencing enhancements. View "United States v. Waters" on Justia Law

The government successfully prosecuted defendant-appellant Joseph Kupfer in two trials, alleging Kupfer and his wife conspired to enable Dr. Armando Gutierrez (a media consultant) to increase his compensation under a State contract without any additional work. In exchange for the increase, Gutierrez allegedly gave kickbacks to Kupfer through Kupfer’s consulting company. The government alleged that Gutierrez had disguised the kickbacks as payments for Kupfer’s work on a separate media campaign involving voter awareness. In the first trial, the jury found Kupfer and his wife guilty of tax evasion. In the second trial, the jury found Kupfer guilty of stealing and participating in a conspiracy to steal federal government property with Gutierrez. The district court entered a judgment of conviction for these crimes and sentenced Kupfer to ten years in prison. Kupfer appeals the conviction and sentence on all counts. After review, the Tenth Circuit found no reversible error as to Kupfer's conviction. The Court did concluded that the district court miscalculated the sentence, reversed and remanded for resentencting. View "United States v. Kupfer" on Justia Law

Pust and Anderson ran a $10 million Ponzi scheme for over two years getting clients to invest in a phony low-income housing investment program in the Chicago area. Anderson pled guilty, but Pust proceeded to trial. He was convicted by a jury of four counts of wire fraud, 18 U.S.C. 1342, and was sentenced to 34 months’ imprisonment to run concurrently on each count. The Seventh Circuit affirmed, rejecting a claim that the evidence was insufficient to establish that he acted with intent to defraud the alleged victims, and upholding court’s decision to admit statements of a co-conspirator under Federal Rule of Evidence 801(d)(2)(E). The court noted that defense counsel responded “no objection” regarding the testimony and that other evidence included testimony by several victim-investors and numerous emails between Pust and Anderson, Pust and the victim-investors, and Anderson and the victim-investors. View "United States v. Pust" on Justia Law

Black repeatedly tried to pay off a more than $5 million tax debt with checks drawn on checking accounts that he knew were closed to prevent the IRS from collecting taxes from him. A jury convicted Black of one count of obstructing and impeding the IRS from collecting taxes and four counts of passing and presenting fictitious financial instruments with intent to defraud. The district court sentenced Black to 71 months in prison. The Seventh Circuit vacated and remanded for resentencing, agreeing that the district court erred in determining his sentencing range under U.S.S.G. 2T1.1, by improperly calculating the tax loss by aggregating the face value of the fraudulent checks and by including penalties and interest in the calculation. The court upheld refusal to consider audit errors and apply available deductions because Black could not establish that he was entitled to any reduction in taxes owed. View "United States v. Black" on Justia Law

Defendant, convicted of healthcare fraud and aggravated identity theft, appealed the district court's orders granting the government writs of garnishment directing that certain monies owned by defendant, but in the control of third parties, be transferred to the United States to satisfy his restitution obligations. Defendant argued that the attorney representing him at the writ of garnishment hearing labored under a conflict of interest in violation of defendant's Sixth Amendment right to counsel, and that the district court committed plain error in failing to inquire as to the alleged conflict. The court found that there is no Sixth Amendment right to counsel at a writ of garnishment hearing brought to satisfy restitution or forfeiture judgments, and the district court thus did not have a duty to inquire. The court further concluded that, while the imposition of restitution falls within a defendant’s criminal proceedings, a writ of garnishment is a civil remedy falling outside the scope of the Sixth Amendment’s protections. Accordingly, the court affirmed the judgment. View "United States v. Cohan" on Justia Law

Volkman, a University of Chicago M.D. and Ph.D. (pharmacology), board-certified in emergency medicine, was in financial distress after lawsuits. Hired by Tri-State, a cash-only clinic, he was paid $5,000 to $5,500 per week. Soon, pharmacies refused to fill his prescriptions, citing improper dosing. Volkman opened a dispensary in the clinic. The Ohio Board of Pharmacy issued a license, although a Glock was found in the drug safe. Follow-up inspections disclosed poorly maintained logs; that no licensed physician or pharmacist oversaw the actual dispensing process; and lax security of the drug safe. Patients returned unmarked and intermixed medication. The dispensary did a heavy business in oxycodone. A federal investigation revealed a chaotic, unclean environment. Tri-State fired Volkman, who opened his own shop; 12 patients died. Volkman and Tri-State’s owners were charged with conspiring to unlawfully distribute a controlled substance, 21 U.S.C. 841(a)(1); maintaining a drug-involved premises, 21 U.S.C. 856(a)(1); unlawful distribution of a controlled substance leading to death, 21 U.S.C. 841(a)(1) and 841(b)(1)(C), and possession of a firearm in furtherance of a drug-trafficking crime, 18 U.S.C. 24(c). The owners accepted plea agreements and testified against Volkman, The Sixth Circuit affirmed his conviction on most counts, and a sentence of four consecutive life terms. On remand from the Supreme Court, in light of Burrage v. United States (2014), the Sixth Circuit again found the evidence of but-for causation sufficient. View "United States v. Volkman" on Justia Law

The six-month trial of former Detroit mayor Kilpatrick and Detroit contractor Ferguson, included almost 100 government witnesses and over 700 exhibits. The government’s main theory was that Kilpatrick and Ferguson conspired to extort money from other Detroit-area contractors by pressuring them to include Ferguson’s companies in their city contracts—even when Ferguson’s companies were not the most qualified candidates and even when Ferguson’s companies did no work. Kilpatrick was convicted of 24 counts: RICO conspiracy, 18 U.S.C. 1962(d); four counts of extortion, 18 U.S.C. 1951; attempted extortion, 18 U.S.C. 1951; bribery, 18 U.S.C. 666(a); 11 counts of mail and wire fraud, 18 U.S.C. 1341, 1343; five counts of subscribing a false tax return, 26 U.S.C. 7206(a); and income tax evasion, 26 U.S.C. 7201. Ferguson was convicted of nine counts: RICO conspiracy, six counts of extortion, attempted extortion, and bribery. The Sixth Circuit affirmed the convictions but vacated a restitution order, rejecting arguments that Kilpatrick was denied conflict-free counsel because his lead attorneys had recently become “of counsel” to a firm that was suing Kilpatrick for alleged conduct related to his criminal charges; extensive testimony by two case agents violated the Rules of Evidence; and the court erred in allowing witnesses to report what other people had told them about Kilpatrick and Ferguson as evidence that witnesses feared the defendants. View "United States v. Ferguson" on Justia Law

Defendant Michael Calhoun (and two co-conspirators) prematurely sought to appeal a district court order denying his motion to quash the indictment against them. The 60-count indictment arose out of Defendant’s grand jury testimony. In it, Defendant was charged with 50 counts of mail and wire fraud and conspiracy to commit the same. Absent a “final decision,” the Tenth Circuit Court of Appeals dismissed the appeal for want of subject matter jurisdiction. On remand, Defendant entered into a plea agreement with the Government, whereby Defendant pled guilty to one count of conspiracy to commit wire or mail fraud and reserved his right to appeal the denial of his motion to quash. The district court sentenced Defendant to five years probation. The court did not impose a fine or order restitution. Defendant again appealed, arguing that a “division of loyalties,” i.e., conflict of interest, on the part of his retained counsel prompted his incriminating grand jury testimony, thus tainting the indictment. Specifically, Defendant asserted that his criminal counsel, Tom Mills (hired and paid by Texas Capital Bank on the recommendation of his civil counsel Larry Friedman) encouraged Defendant to incriminate himself before the grand jury for the purpose of assisting the Bank in its efforts to overturn a $65 million civil judgment related to the scheme. Defendant says the conflict rendered his criminal counsel ineffective in violation of his Sixth Amendment right to counsel, thereby requiring suppression of his grand jury testimony and quashing of the indictment. The Tenth Circuit affirmed the district court's judgment. "Precedent, both our own and that of the Supreme Court, provides us no alternative but to recognize that Defendant’s Sixth Amendment right to counsel did not attach until August 15, 2012, the date he was formally charged by way of indictment. Unfortunately for Defendant, his right to counsel claim centers on his counsel’s conduct prior to that date. Defendant has no remedy without a right. [. . .] Sure, Defendant did not want to be indicted . . . But the Government made no such promise." Defendant acknowledged at the hearing on his motion to quash that "'after I had given substantial help, then I would be granted probation.' Defendant understood this to mean 'a deal had been made and I would get probation at worst.' Then, after the prosecutor advised him that he would receive a downward departure for his assistance, Defendant testified before the grand jury. Defendant may not have received the deal he had hoped for, but he undoubtedly received the deal he expected." View "United States v. Calhoun" on Justia Law

King pled guilty in Arkansas state court to 1,577 counts of forgery and theft of property for embezzling more than $700,000 from the school district where she worked. The court sentenced King to 80 years imprisonment, within the guidelines range. King had no criminal history and claims she accepted the plea because of threats that her husband and son would also be charged. Five months later, the court reduced King’s sentence to 20 years imprisonment, under Arkansas Code 16-90-111, which allows a trial court to “correct an illegal sentence at any time” or to “correct a sentence imposed in an illegal manner within . . . ninety (90) days after the sentence is imposed.” The state appealed to the Arkansas Supreme Court, which reinstated King’s 80-year sentence, finding the trial court lacked jurisdiction to enter the reduction because the 90-day period for doing so had expired. King sought federal habeas relief. Although the district court was clearly sympathetic, it found no grounds for habeas relief. The Eighth Circuit affirmed, holding that King is not entitled to habeas relief based on her disagreement with the Arkansas Supreme Court’s interpretation of Arkansas law. View "King v. Kelley" on Justia Law