Justia White Collar Crime Opinion Summaries

Olive founded National Foundation of America (NFOA) in 2006 and applied to the IRS for recognition of its Section 501(c)(3) status. That application was eventually denied He learned the “business model” as a development advisor and executive at National Community Foundation, which offered products similar to those later marketed by NFOA. The scheme involved highly-compensated insurance agents, who sold investment contracts that customers could purchase with cash or by transferring existing annuities, real estate, or securities to NFOA. Olive misrepresented NFOA’s age, assets, and IRS status, and misrepresented the financial consequences. Olive knew that NFOA paid its brokers commissions well above the industry rate, lost a significant portion of the obtained annuities’ value due to their early surrender, and diverted a portion of funds to Olive’s and others’ personal benefit.Olive was convicted of mail fraud under 18 U.S.C. 1341 and 1343 and of money laundering, 18 U.S.C. 1957; was sentenced to 372 months of incarceration; and was ordered to pay restitution of $5,992,181.24. The Sixth Circuit affirmed, rejecting challenges to the sufficiency of the indictment; evidentiary decisions, permitting the introduction of cease-and-desist orders issued by several states; and the sentencing calculation, with respect to Olive's role, vulnerable victims, and loss calculation. View "United States v. Olive" on Justia Law

Defendant was convicted of 33 crimes stemming from his receipt of federal worker’s compensation from July 2011 through March 2013. The district court calculated defendant's advisory guidelines range as 18–24 months imprisonment but did not sentence him to any incarceration time. Both parties appealed. The court affirmed defendant's convictions on Counts 1 and 9-12 because a reasonable jury could have found beyond a reasonable doubt that defendant caused his treating physician to submit materially false information to DOL and the Postal Service; the court affirmed defendant's convictions on Counts 2-4 because a reasonable jury could have found that defendant’s materially false statements were made “in connection with” his receipt of benefits; and the court affirmed defendant's conviction on Count 33 because a reasonable jury could have found beyond a reasonable doubt that driving was no longer “bothering” defendant during the offense period, and that, by knowingly concealing this fact from his physician, he obtained worker’s compensation to which he was not entitled. The parties and the court agree that the district court miscalculated the special assessment imposed on defendant. Therefore, the district court will need to correct the error on remand. Further, the district court erred in calculating the total loss amount and, on remand, should use the sentencing guidelines' net loss approach, U.S.S.G. 2B1.1 cmt. n.3(F)(ii), and order defendant to pay restitution in that amount. The district court must resentence defendant without relying on findings that contradict what the jury found beyond a reasonable doubt. Accordingly, the court affirmed in part, vacated in part, and remanded. View "United States v. Slaton" on Justia Law

From 2002 to 2007, Defendant-appellant Jerold Sorensen, an oral surgeon in California, concealed his income from the Internal Revenue Service (“IRS”) and underpaid his income taxes by more than $1.5 million. He used a “pure trust” scheme, peddled by Financial Fortress Associates (“FFA”), in which he deposited his dental income into these trusts without reporting all of it to the IRS as income. Over the years, he also retitled valuable assets in the trusts’ names. In 2013, after a series of proffers, the government charged him with violating 26 U.S.C. 7212(a) for corruptly endeavoring to obstruct and impede the due administration of the internal-revenue laws. A jury convicted him of the charged offense. On appeal, Sorensen argued his conduct amounted to evading taxes so it was exclusively punishable under a different statute; that the prosecution misstated evidence in its closing rebuttal argument; and (7) cumulative error. Furthermore, he argued the district court erred: (2) by refusing his offered jury instruction requiring knowledge of illegality; (3) by giving the government’s deliberate-ignorance instruction; (4) by instructing the jury that it could convict on any one means alleged in the indictment; and (5) by refusing to allow him to provide certain testimony from a witness in surrebuttal. Finding no merit to any of these contentions, the Tenth Circuit affirmed Sorensen's conviction. View "United States v. Sorensen" on Justia Law

Defendants were in the business of processing and selling industrial wood products and maintained a large inventory at numerous distribution centers throughout the United States. In 2002, defendants and plaintiffs entered into an asset purchase agreement (PA), which provided for the merger of the two companies, changes in personnel, and until plaintiffs' purchase of an inventory unit, plaintiffs, for a fee, would provide defendants with "all management and administrative services associated with purchasing, processing, and maintaining [defendants'] inventory." In 2003, plaintiffs' books were audited by a certified public accountant, Schmidt. Schmidt found unusual entries in the books and many entries that did not appear to be related to normal inventory activity. After Schmidt completed his work on defendants' books, the bookkeeper who was employed by plaintiffs but was providing inventory-related services to defendants, was discovered to have embezzled at least $360,000 from defendants' accounts. Three legal actions (including this case) ensued. The issue on review in this case was whether the trial court erred in denying defendants' motion for a new trial under ORCP 64 (B)(4),2 based on the asserted ground of newly discovered evidence. The trial court determined that defendants' proffered evidence did not satisfy the legal standard for granting a new trial under that rule. The Court of Appeals reversed, concluding that defendants' post-trial proffer qualified as newly discovered evidence, that the evidence was material for defendants, and that defendants exercised reasonable diligence in attempting to produce the evidence at trial. Because the Supreme Court concluded that, irrespective of whether the proffered evidence was newly discovered and material for defendants, defendants failed to exercise reasonable diligence to produce the evidence at trial. Ultimately, the Court concluded the trial court did not err in denying defendants' motion for a new trial. View "Greenwood Products v. Greenwood Forest Products" on Justia Law

Churn, the owner of a Tennessee construction company, was convicted of seven counts of bank fraud stemming from two schemes in which he received bank loans ostensibly to construct houses, but performed little to no work. The district court sentenced him to 33 months in prison and ordered restitution of $237,950.50. The Sixth Circuit affirmed, rejecting arguments that the district court made evidentiary errors concerning admission of an email statement, admission of testimony concerning a permit, and admission of evidence about another transaction, and that the amount of restitution exceeded a statutory maximum under the Victims Restitution Act, 18 U.S.C. 3663A. View "United States v. Churn" on Justia Law

Defendant, a contractor, appealed his conviction of two counts of conversion and misapplication of funds from a tribal organization, in violation of 18 U.S.C. 1163. Defendant's conviction stemmed from his involvement in projects he performed for the Navajo Nation. The court held that, for purposes of 18 U.S.C. 1163, funds paid from an Indian tribal organization to a contractor continue to be “property belonging to any Indian tribal organization,” as long as the tribal organization maintains sufficient supervision and control of disbursed funds and their ultimate use. In this case, the court concluded that a reasonable jury could find (a) that the funds misappropriated or converted by defendant belonged to a tribal organization, even if the funds were considered reimbursement for work already completed; and (b) that NHA had sufficient supervision and control of the Native American Housing Assistance and Self-Determination Act (NAHASDA), 25 U.S.C. 4101-4212, funds. The court found that there was sufficient evidence to convict defendant of misappropriating tribal funds. The court further concluded that the district court did not err by requiring a forensic auditor to be certified as an expert witness and compelling expert disclosures, and the district court did not err by allowing the auditor's summary charts to be admitted into evidence. Finally, the district court did not commit error in instructing the jury and the district court did not err in applying two sentencing enhancements. Accordingly, the court affirmed the judgment. View "United States v. Aubrey" on Justia Law

Defendant appealed his convictions and sentences for three counts of submitting false claims, in violation of 18 U.S.C. 287, and one count of attempting to evade or defeat a tax imposed by the Internal Revenue Code, in violation of 26 U.S.C. 7201. The district court ordered defendant to pay restitution to the IRS in the amount of $296,246. Although defendant still owes the Government money in the amounts of his 2001–2003 deficiencies, the Government conceded at oral argument that such amounts do not constitute actual losses caused by conduct underlying a Title 18 offense and that a remand is in order so that the district court can determine the proper amount of restitution. Accordingly, the court vacated the district court's restitution order and remanded for further proceedings as to restitution. The court rejected defendant's remaining contentions and affirmed in all other respects. View "United States v. Hesser" on Justia Law

Appellant was the target of a grand jury investigation into an alleged scheme to defraud investors regarding the salvaging of a sunken vessel. The government moved to compel the production of documents from Appellant’s attorneys in connection with the grand jury investigation. The district court granted the motion. The court also granted the government’s motion for a judicial determination that the crime-fraud exception applied to materials seized from Appellant’s home, thereby rejecting Appellant’s claim of attorney-client privilege. In Appellant’s opposition to the government’s motion to compel, Appellant requested that the district court conduct an in camera review of the documents that were the subject of the motion to compel. The district court did not address this request. The First Circuit affirmed, holding (1) there was ample evidence for the district court to conclude that Appellant was engaged in a scheme to commit a crime or fraud and that at least some of the communications between Appellant and Appellant’s attorneys were intended by Appellant to facilitate that fraudulent scheme; and (2) because Appellant failed to produce a privilege log as required under the Federal Rules, Appellant’s request for in camera review was not preserved. View "In re Grand Jury Proceedings" on Justia Law

In 2009, Clarke submitted 2006-2008 tax returns for a trust, each claiming $900,000 in income and $900,000 in fiduciary fees; they did not identify the income’s source. Each reported $300,000 of tax paid to the IRS and requested $300,000 in refunds. Clarke identified the trust’s fiduciary as “Timothy F. Geither” (an apparent misspelling of the name of then-Treasury Secretary, Geithner), which raised a red flag. The IRS notified Clarke that the returns would not be processed. Clarke resubmitted, but did not name “Geither.” The IRS mailed Clarke three $300,000 checks. Clarke opened a bank account, deposited the checks, and, within months, spent all of the funds. In 2013 Clarke was indicted on seven counts of presenting false claims. The manager of the check cashing company where Clarke tried to cash his first check, testified that Clarke told him that he had the check because of “a trust fund because his dad had passed.” Clarke argued that the government had not proven that he knew the claim was false. The court did not include a good faith jury instruction requested by Clarke. Though barred from trial, a psychiatric report explained that Clarke believed that the U.S. is a business front designed to regulate commerce and has established bank accounts for its citizens. The Seventh Circuit affirmed Clarke’s conviction. View "United States v. Clarke" on Justia Law

Anzaldi, DeSalvo, and Latin concocted an $8 million fraudulent tax scheme based on a sovereign citizen-type theory that the U.S. government holds hidden bank accounts for its citizens that can be accessed through various legal maneuvers. By filing false tax returns, the three requested more than $8 million for themselves and others in tax refunds. The IRS accepted five of their returns, paying out more than $1 million in refunds before catching onto the scheme. A jury convicted all three of conspiracy to file false claims, 18 U.S.C. 286 and filing false claims upon an agency of the United States, 18 U.S.C. 287. Anzaldi and Latin appealed their convictions. The Seventh Circuit affirmed, rejecting Anzaldi’s claim that the court should have ordered a competency examination pursuant to 18 U.S.C. 4241(a) before allowing her to represent herself pro se; upholding admission of evidence of how Anzaldi structured her fees to be under $10,000; and rejecting a claim that the court erred by not instructing the jury that willfulness was required to convict, and instead instructing that the defendants had to have acted “knowingly.” View "United States v. Latin" on Justia Law