Justia White Collar Crime Opinion Summaries

Roy was convicted of conspiracy to commit wire fraud, 18 U.S.C. 1349; three counts of wire fraud, 18 U.S.C. 1343; and conspiracy to commit wire fraud and bank fraud, 18 U.S.C. 1349. The Second Circuit affirmed, rejecting an argument that the district court erred by failing to instruct the jury that proof of an overt act is required for a conviction under the two section 1349 conspiracy charges. Proof of an overt act is not required for a conspiracy conviction under 18 U.S.C. 1349. View "United States v. Roy" on Justia Law

In 2008, an explosion and fire substantially damaged the Hereford House, a well-known restaurant in downtown Kansas City. Surveillance footage from immediately before the incident showed individuals entering with containers of gasoline and setting an ignition device. The suspects used the security code of a former Hereford House employee to deactivate the security system. Between the employee’s firing and the fire, the same code had been used twice by Anderson, a part owner of the Hereford House, in what appeared to be practice for the arson. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated Anderson, who had infused $380,000 into the business, from cash advances on personal and business credit cards, withdrawals from his mother’s IRA and his 401(k), and a loan from his brother-in-law. In an email, Anderson had stated: “We were unable to pay our payroll taxes of $50,000. Things are not getting any better.” Anderson, Pisciotta, and Sorrentino were convicted and sentenced to 180, 240, and 180 months’ imprisonment, respectively. The Eighth Circuit affirmed, rejecting arguments that conspiracy to commit arson cannot be a predicate to convictions for the use of fire to commit another felony under 18 U.S.C. 844(h); that the convictions constituted double jeopardy; that the trials should have been severed; and challenging evidentiary rulings. View "United States v. Anderson" on Justia Law

Retired seamstress, Joseph, never had annual household income exceeding $40,000; her condominium, worth $169,990, was foreclosure. Joseph was born in Haiti. She did not speak English well. Jean referred Joseph to the Diverse insurance agency for a fee. In 2008, Diverse applied for a $10 million life-insurance policy on Joseph’s life to PHL. The application falsely stated Joseph’s net worth was $11,906,000 and her income was $497,000. The application listed a 2008 Irrevocable Trust as the proposed beneficiary and owner. Joseph signed an agreement establishing the Trust and appointed BNC as the trustee and Jean as the trust protector. Joseph did not know of the misrepresentations and likely signed blank documents. The Trust financed the premiums through a loan from PFG. In 2010, Jean directed BNC to surrender the Policy to PFG in satisfaction of the loan obligations. PHL sought to rescind the Policy for fraud. After Joseph died in 2011, the new policy owner claimed the proceeds. The district court granted rescission and held that PHL could keep the premium. The Eighth Circuit affirmed, rejecting arguments that PHL could not rescind the Policy because its own agent completed the application and that PHL was estopped from rescinding the Policy because it had reason to know of the misrepresentations. View "PHL Variable Ins. Co. v. Midas Life Settlements LLC" on Justia Law

France had a Chicago dental business and fraudulently billed insurers for city employees. France closed his practice after being injured in an accident and started collecting benefits from a disability income policy. In 1999, he exchanged monthly payments, for a limited time, for a lump sum of $300,000. He transferred this money to other people, including his wife, Duperon, before filing a Chapter 7 bankruptcy petition. He failed to disclose the payment or transfers. He later pleaded guilty to mail fraud, 18 U.S.C. 1341, and to knowingly making a false declaration under penalty of perjury, 18 U.S.C. 152(3). The district court sentenced France to 30 months in prison and ordered him to pay $800,000 in restitution. The bankruptcy trustee obtained title to ongoing disability insurance payments. France and Duperon divorced. A California court approved a settlement with payments for child support from the disability payments. France’s insurance company sued in California to resolve conflicting claims. The parties reached an agreement, which the bankruptcy court approved, purporting to control all other judgments, but did not mention the criminal restitution lien. The government filed Illinois citations to discover assets. France moved to quash, but the insurance company responded and began withholding $9,296 that had been going to France. The government moved to garnish the entire distribution under the Mandatory Victims Restitution Act (MVRA), 18 U.S.C. 3613(a). The Seventh Circuit affirmed a ruling allowing the government to garnish the entire disability payment. View "United States v. France" on Justia Law

Defendant was convicted and sentenced for conspiracy to obstruct justice, accessory after the fact to mail fraud and securities law violations, altering documents to influence a federal investigation, and aiding and abetting false testimony at an SEC deposition. A panel of the Ninth Circuit affirmed, holding (1) the district court did not err at sentencing by applying both the “Broker-Dealer” enhancement and the “Special Skill” enhancement under the Sentencing Guidelines; (2) the district court did not err in calculating loss and victim amounts, as required under the Sentencing Guidelines; (3) Defendant was competent to waive his right to a jury trial, and his waiver was knowing and intelligent; and (4) the district court did not plainly err in (a) excluding a non-lawyer’s testimony reciting facts and the legal conclusion that Defendant did not break the law; (b) determining that the district court was capable of understanding an expert’s opinion regarding Defendant’s professional and ethical duties as an attorney; and (c) admitting coconspirator nonhearsay testimony. View "United States v. Tamman" on Justia Law

Pursuant to written plea agreements, defendants Yolanda Sosa and Adrian Velazquez pled guilty to conspiracy to commit healthcare fraud. For a five month period in 2011, Defendants met with a "cooperating doctor" and paid the doctor for prescriptions that Defendants could use to fraudulently bill Medicare. Specifically, Defendants provided the cooperating doctor with Medicare beneficiary information and paid the doctor thousands of dollars to write prescriptions for expensive medications that were not actually given to any patients. The doctor never saw or evaluated the patients, and instead wrote the prescriptions for whatever medications Defendants requested. Defendants gave the fraudulent prescriptions to various pharmacies, which submitted false claims to Medicare based on the prescriptions. As a result, Medicare paid the pharmacies approximately $753,430 based on the false claims. The pharmacies paid Defendants over $60,000 for obtaining the fraudulent prescriptions. Defendants appealed two forfeiture orders entered by the district court after it imposed joint-and-several restitution against them, specifically challenging the restitution amount and the forfeiture of two cars. After careful review of the record and the parties' briefs, and with the benefit of oral argument, the Eleventh Circuit found no reversible error and affirmed the district court. View "United States v. Velazquez" on Justia Law

California posts information about unclaimed property on a public website. Bolt made claims in 2011 and 2012 in the name of his company, Situs Cancer Research Center,. Bolt created fraudulent donation agreements which purported to transfer the unclaimed assets from their lawful owners to Situs. In some instances Bolt created fictitious employees of the companies and signed their names; in others he forged the signatures of actual people. He also fabricated notary stamps and used interstate mail and wire systems to transmit the fraudulent documents to California. The assets transferred to Situs totaled approximately $2,400,000. Bolt bought cars and real estate with funds from the Situs bank account. In another scheme, Situs similarly acquired unclaimed funds from a trust account ($108,251.78) held by the state of Nevada, which were a woman's life savings. Bolt pled guilty to wire fraud, 18 U.S.C. 1343; mail fraud, 18 U.S.C. 1341; and money laundering, 18 U.S.C. 1957. The Eighth Circuit affirmed the sentence of 100 months, calculated by applying an enhancement for the use of sophisticated means and concluding that an upward departure was warranted based on the inadequacy of his criminal history category under the guidelines. View "United States v. Bolt" on Justia Law

Curtis, a lawyer, filed 1996-1997 returns reporting tax obligations of $218,983 and $248,236, but made no payments. His partner had taken $600,000 from the practice and declared bankruptcy; Curtis underwent an expensive divorce. Curtis failed to file a return for 1998. Curtis entered into an installment agreement. He filed a return for 2000 but failed to pay $90,000. He entered into a second agreement, but filed returns for 2003 and 2004 reflecting unpaid tax liabilities of $176,802 and $61,000. Curtis did not make estimated payments and stopped making installment payments. He filed returns for 2007, 2008 and 2009, but paid nothing. Curtis was charged with misdemeanor willfully failing to pay taxes owed for 2007, 2008 and 2009, 26 U.S.C. 7203. The court allowed evidence under Rule 404(b), of Curtis’s history of failing to pay his taxes and his withdrawals of money from his law practice for personal expenses. Curtis did not object, but objected to the government’s proposed evidence that he failed to pay payroll taxes for his employees in 2013, arguing that any violations after the charged years did not bear on his state of mind during the time of the charged offenses. Although the court gave Curtis’s proposed instruction on good faith, it declined to modify the pattern instruction to include a requirement for bad motive, with respect to willfulness. The Seventh Circuit affirmed his convictions. View "United States v. Curtis" on Justia Law

DiFoggio worked as an FBI cooperating witness and introduced Medrano to a man purporting to be Castro, a health care consultant. Castro told Medrano that by bribing a corrupt official he could obtain contract approval from Los Angeles County for the purchase of bandages for its hospital system. Castro was an undercover FBI agent. There was no corrupt official. When the medical bandages deal was concluded, Medrano approached Castro about making another deal to involve his friend, Buenrostro. Buenrostro and Castro brought Barta into the discussions; A bribe would be paid to the corrupt official by Castro to obtain a county contract for Sav‐Rx, a company founded by Barta, to provide pharmaceutical dispensing services. Sav‐Rx would service the contract through a business started by Buenrostro and Medrano. Barta wrote a check for $6,500 to Castro. Buenrostro and Medrano were to pay their 35 percent share after that last meeting. Before that happened, they were arrested. In a separate opinion, the Seventh Circuit held that Barta was entrapped as a matter of law. Neither Buenrostro nor Medrano argued entrapment. The Seventh Circuit affirmed their convictions for conspiracy to commit bribery, rejecting challenges to the sufficiency of the evidence and the sentences. View "United States v. Buenrostro" on Justia Law

In 2006, Robinson opened Paideia Academy, a non-profit charter St. Louis charter school. State and federal monies, disbursed through the Missouri Department of Elementary and Secondary Education, exclusively funded the school, and were restricted to operating kindergarten through eighth grade. Robinson directed $242,533 from Paideia to develop a pre-kindergarten child care center. Robinson also worked, beginning in 1990, purporting to inspect parking meters. On weekly timesheets, he always recorded 40 hours, regardless of holidays, and even after parking meter services were outsourced. In 2009, the FBI investigated his “employment,” interviewing former Parking Division employees and watching Robinson’s car. They reasonably suspected that Robinson did not inspect meters. The agents installed, without a warrant, a GPS device on his car while parked on a public street. Tracking confirmed that Robinson did not inspect meters. The government charged Robinson with Paideia-related wire fraud, 18 U.S.C. 1343; two Paideia-related counts of federal program theft, 18 U.S.C. 666(a)(1)(A); and five parking-related counts of federal program theft. The district court denied Robinson’s motion to suppress the GPS evidence, motion to sever counts 1-3 from counts 4-8, and Batson objection to the jury’s composition. At trial, the court rejected his challenges to certain testimony and parking-related jury instructions. The court sentenced him to 24 months’ imprisonment and awarded $419,333 in restitution. The Eighth Circuit affirmed View "United States v. Robinson" on Justia Law