Justia White Collar Crime Opinion Summaries

Beavers was a Chicago alderman from 1983-2006, when he began serving as a Cook County Commissioner. He was the chairman of each of his three campaign committees and the only authorized signor for each committee’s bank account. Beavers’ federal tax returns underreported his 2005 income, misstated expenditures in semi-annual disclosure reports (D-2s), did not disclose use of campaign funds to increase his pension annuity, misrepresented loans between the committees and Beavers, did not report monthly stipends that Beavers took as a Commissioner, and did not disclose that Beavers wrote himself checks totaling $226,300 from committee accounts to finance gambling trips, without documenting the purpose of the expenditures or any repayment. After federal agents approached Beavers in connection with a grand jury investigation, Beavers filed amended tax returns and attempted to repay the committees. Beavers was convicted of three counts of violating 26 U.S.C. 7206(1), which prohibits willfully making a material false statement on a tax return, and with one count of violating 26 U.S.C. 7212(a), which prohibits corruptly obstructing the IRS in its administration of the tax laws. Beavers was sentenced to six months’ imprisonment and was ordered to pay about $31,000 in restitution and a $10,000 fine. The Seventh Circuit affirmed. View "United States v. Beavers" on Justia Law

In 2006, then-policewoman Brown, entered the Chicago Patrolmen’s Federal Credit Union and presented a $1 million check made out to her and purportedly drawn by Six Flags Great America on a JP Morgan Chase bank account. She endorsed it in her own name. The check was counterfeit. Brow was charged with several offenses and testified that her mother had given her the check and had told her that it was the result of Brown’s sister’s settlement of a lawsuit. The sister already had a forgery conviction. Brown was convicted and given two years of probation and 50 hours of community service. The appellate court affirmed the convictions for attempted theft by delivering the counterfeit check and for forgery by making the check. The Illinois Supreme Court, reversed the forgery conviction, leaving the conviction for “delivery.” Brown did not “make” the check when all she did was endorse it in her own name; forgery by “making” was statutorily complete when the check was created, regardless of endorsement. There was no evidence that the defendant actually made the check.View "People v. Brown" on Justia Law

Stein ran legitimate companies for which he maintained bank accounts. In need of capital for construction projects, he approached his Wiley, a part-owner of currency exchanges, and proposed that Stein write checks from (underfunded) bank accounts to cash at the exchanges in order to have use of money for a few days to run his business. At the end of that period, if his business had turned the necessary profit, the checks would clear; if not, he could write more checks, cash them, deposit proceeds to cover the earlier checks, and have money to continue operations. Stein ran the check-kiting scheme for five months. To clear previous checks and obtain capital for the next period, he had to write larger (or more) checks each cycle. Each time a check was cashed, the exchange also charged a fee, so the balance was spiraling upward. Eventually Stein was injured and not physically able to continue the scheme. The Wiley exchanges lost $440,000 from checks that did not clear. Another exchange lost $250,000. Stein pleaded guilty to wire fraud, 18 U.S.C. 1343. After a remand, the district court revised the loss amount, and again gave a below-guidelines sentence of 21 months’ imprisonment, but still entered a restitution amount of over one million dollars. The Seventh Circuit affirmed, rejecting an argument that the loss to Wiley’s exchanges should not be incorporated into restitution because of Wiley’s complicity in the scheme. View "United States v. Stein" on Justia Law

Defendant, an attorney, was charged with multiple counts of, inter alia, forgery of a document and uttering a forged instrument. The charges stemmed from allegations that Defendant, through his use of computers, orchestrated a sophisticated scheme to divert to himself funds that were intended to be used to pay off large home mortgage loans. Prior to trial, the Commonwealth filed a motion to compel Defendant to enter his password into encryption software he placed on various digital media storage devices that were in the custody of the Commonwealth. Following a hearing, a judge denied the Commonwealth’s motion to compel decryption but reported a question of law to the Supreme Judicial Court. The Court reversed the denial of the Commonwealth’s motion, concluding that Defendant could be compelled to provide his key to seized encrypted digital evidence provided that the compelled decryption would not communicate facts of a testimonial nature to the Commonwealth beyond what Defendant had already admitted to investigators. Remanded. View "Commonwealth v. Gelfgatt" on Justia Law

Defendant appealed his convictions stemming from multiple offenses arising from a health care fraud scheme. The court concluded that the evidence was sufficient to convict defendant of the health care offenses and of the perjury offense; the district court did not err in denying defendant's post-trial request for acquittal or a new trial on inconsistent verdicts where defendant's argument was baseless; defendant's sentence, which was less than half the low end of his Guidelines range, was reasonable; and there was no basis for concluding that the district court erred with respect to the forfeiture proceedings. View "United States v. Louthian, Sr." on Justia Law

Farmer learned that a man (Allen), a casino employee, had used a company credit card without authorization. Using an alias, Farmer contacted Allen by cell phone and threatened to inform management unless Allen paid him. Farmer had a female acquaintance travel to Indiana to collect the extortion money. Allen contacted law enforcement. The female associate was apprehended. Farmer pleaded guilty to violating 18 U.S.C. 1952(a)(3) and 875(d), by attempted extortion, using interstate communications. A presentence investigation report indicated that Farmer had a 2003 conviction for using interstate communications to transmit extortionate threats, three convictions for obtaining property by false pretenses (involving customers of his sports-schedule business), and a conviction for larceny. Neither the PSR nor any document disclosed proposed conditions of supervised release. Farmer was sentenced to incarceration for 22 months, plus three years of supervised release, with conditions that Farmer submit to the search of his person, vehicle, business, and residence, and property, including computer devices, and to the seizure of any contraband, and warn other occupants that the premises may be subject to searches. The prosecution suggested that Farmer be barred from self-employment during supervised release. Farmer’s counsel, objected that “I don’t think this Court should restrict his ability to earn a living. If he wants to be an entrepreneur and be in business for himself.” The district court overruled that objection and did not solicit objections to the other conditions. The Seventh Circuit vacated and remanded, finding that the search and self-employment conditions did not bear a reasonably direct relationship to the underlying crimes. View "United States v. Farmer" on Justia Law

Defendant appealed his conviction and forfeiture order for one count of conspiring with his wife to commit health care fraud, eight counts of payroll tax fraud, and two counts of failure to timely file income tax returns. Rejecting defendant's claims to the contrary, the court concluded that the evidence was sufficient to convict defendant of all the counts. Because the court upheld the conviction for the health care fraud charge, the court upheld the district court's forfeiture order. Accordingly, the court affirmed the judgment of the district court. View "United States v. Houser" on Justia Law

Defendant appealed from his conviction for tax evasion. The court concluded that the Government violated defendant's Fourth Amendment rights by seizing and indefinitely retaining non-responsive computer records, and then searching them when it later developed probable cause. Therefore, defendant's personal records, seized in the execution of the November 2003 warrant and retained for two-and-a-half years, should have been suppressed. The court concluded that the district court did not abuse its discretion in failing to order a new trial where a juror posted comments about the trial on his Facebook page and became Facebook friends with another juror during the trial. The court reversed the district court's denial of the motion to suppress, vacated the judgment of conviction, and remanded for further proceedings. View "United States v. Ganias" on Justia Law

In 2009, the Securities and Exchange Commission indicted Stanford for operating a multi-billion dollar Ponzi scheme. The government seized most of his assets rendering him an indigent defendant. Court-appointed counsel obtained authorization for legal services under the Criminal Justice Act (CJA), 18 U.S.C. 3006A(e), and employed Marcum for forensic accounting and litigation support, with an estimated budget of $4.5 million. The district court approved the budget, but Marcum did not obtain the Fifth Circuit's approval, as required by the CJA. Marcum’s work far exceeded the budget. Marcum received payment for work performed in June- August 2011,then submitted vouchers for work performed in September-November totaling $845,588.48. The district court certified only the September and October vouchers. Marcum attempted to resign from the case. Chief Judge Jones of the Fifth Circuit issued a Service Provider Continuity and Payment Order, authorizing payment of $205,000 for the September and October vouchers and ordered Marcum to continue working because “[i]t would be neither feasible nor economical to obtain a replacement.” Under threat of contempt sanctions, Marcum continued to work through the end of trial and claims unpaid fees of $1.2 million. Marcum filed an emergency motion for reconsideration, an emergency application for a stay before the U.S. Supreme Court, an emergency motion for a stay or a petition for writ of mandamus before the Fifth Circuit, and a petition for mandamus to the Supreme Court. All were denied. Marcum sued the Court of Federal Claims, which dismissed the claim for lack of subject matter jurisdiction. The Federal Circuit affirmed. Because the CJA provides its own remedial scheme, Marcum cannot collaterally attack the Fifth Circuit’s determination of Marcum’s fee awards under the Tucker Act. View "Marcum LLP v. United States" on Justia Law

Radojcic, his daughters, his attorney Helfand, and the office manager for one of his companies, were indicted for 52 financial crimes involving fraud on mortgage lenders. It was also alleged that Radojcic, while owing the IRS more than two million dollars, fraudulently obtained rental checks exceeding $500,000 from the U.S. Department of Housing and Urban Development. After discovery, the state indicated its intent to call Helfand as a witness in exchange for use immunity. Helfand and Radojcic objected, asserting attorney-client privilege, and the trial court struck Helfand’s name from the state’s witness list. The appellate court reversed. The Illinois Supreme Court affirmed, based on the crime-fraud exception to the attorney-client privilege, which applies when a client seeks the services of an attorney in furtherance of criminal or fraudulent activity. Transcripts of grand jury testimony met the standard of providing a reasonable basis to suspect the perpetration, or attempted perpetration, of a crime or fraud by Radojcic and a reasonable basis to suspect that communications with Helfand were in furtherance of the fraudulent scheme. The state met its burden of overcoming the privilege; there was no need to examine Helfand in camera prior before trial testimony. The only attorney-client communications that are subject to disclosure are those related to transactions identified in the indictment.View "People v. Radojcic" on Justia Law