Justia White Collar Crime Opinion Summaries

Ottaviano, believing himself not bound by U.S. tax law, marketed his views to others through his company, Mid-Atlantic, which offered financial products he claimed would help others avoid taxation and have the government pay their debts. Ottoviano made many representations about himself and the financial products. Customers paid Mid-Atlantic $3,500 each ($5,000 if purchased jointly) to participate. After a trial at which he represented himself, Ottaviano was convicted of conspiracy to defraud the U.S. under 18 U.S.C. 371, eight counts of mail and wire fraud under 18 U.S.C. 1341 and 1343, money laundering under 18 U.S.C. 1957, and two counts of tax evasion under 26 U.S.C. 51. The Third Circuit affirmed, noting overwhelming evidence of guilt and rejecting arguments that the district court denied him a fair trial in violation of his Fifth Amendment right to due process of law when it cross-examined him and violated his Sixth Amendment right to represent himself when it ordered him to leave the courtroom during a discussion about a letter he sent to the Treasury Secretary. View "United States v. Ottaviano" on Justia Law

The Fillers planned to demolish an unused Chattanooga factory. They knew the site contained asbestos, a hazardous pollutant under the Clean Air Act. Environmental Protection Agency regulations require removal of all asbestos before any demolition. Asbestos materials must be wetted, lowered to the ground, not dropped, labeled, and disposed of at an authorized site. Fillers hired AA, a certified asbestos surveying company, which estimated that it would cost $214,650 to remove the material safely. Fillers hired Mathis to demolish the factory in exchange for salvageable materials. Mathis was required to use a certified asbestos contractor. Mathis applied for an EPA demolition permit, showing an estimated amount of asbestos far less than in the AA survey. The agency’s asbestos coordinator contacted Fillers to verify the amount of asbestos. Fillers did not send the survey, but provided a revised estimate, far less than the survey’s estimate. After the permit issued, the asbestos contractor removed “[m]aybe, like, 1/100th” of the asbestos listed in the AA survey. Temporary laborers were hired, not equipped with protective gear or trained to remove asbestos. Fillers supervised. The work dispersed dust throughout the neighborhood. An employee of a daycare facility testified that the children were unable to play outside. Eventually, the EPA sent out an emergency response coordinator and declared the site an imminent threat. Mathis and Fillers were convicted of conspiracy, 18 U.S.C. 371, and violations of the Clean Air Act, 42 U.S.C. 7413(c). Fillers was also convicted of making a false statement, 18 U.S.C. 1001(a)(2), and obstruction of justice, 18 U.S.C.1519. The district court sentenced Mathis to 18 months’ imprisonment and Fillers to 44 months. The Seventh Circuit affirmed. View "United States v. Mathis" on Justia Law

Seidling admitted to knowingly mailing documents containing false information about service of process or publication of notice to small claims courts in Wisconsin and hiding the filings of the actions from named defendants. Seidling argued that the elements of the mail fraud statute could not be met because he never intended the false statements and misrepresentations to be communicated to the victims. The combined total intended loss amount was calculated as $370,220. None of the defendants suffered immediate pecuniary harm, but many experienced challenges in reopening the lawsuits, getting them dismissed, clearing their credit, and removing the fraudulent lawsuits from the system. The district court found him guilty of 50 counts of mail fraud in violation of 18 U.S.C. 1341. The Seventh Circuit affirmed, rejecting an argument that there was no convergence between the victims’ losses and the fraudulent statements. Although his false statements and misrepresentations were not made directly to the victims, they still satisfied the requisite materiality element of mail fraud. The court noted Seidling’s history of fraudulent behavior, his lack of remorse, and the extensive details of his scheme, and held that the district court did not err in denying a reduction in sentencing for acceptance of responsibility. View "United States v. Seidling" on Justia Law

White, Ford, and Helton were involved in a mortgage fraud scheme through White’s company, EHNS. EHNS offered a “mortgage bailout” program, telling homeowners that they could avoid foreclosure by transferring their homes to EHNS for one year, that EHNS investors would pay the mortgage, that the owners could continue to live in their homes, and that they could reassume their mortgages at the program’s conclusion. EHNS investors actually took title outright. White would pressure appraisers to assess the properties at amounts higher than actual value. EHNS would strip actual and manufactured equity by transaction fees. Clients almost never were able to buy back their homes. Lenders foreclosed on many of the properties. Through fraudulent mortgage loan applications, White obtained financing for straw purchasers. Ford was the closing agent, supposed to act as the lender’s representative, but actually fabricating official documents. Helton was the attorney and “represented” homeowners at White’s behest, pocketing legal fees paid out of the equity proceeds and orchestrating a cover‐up by representing the homeowners in subsequent bankruptcy filings. All were convicted of multiple counts of wire fraud, 18 U.S.C. 1343; Helton was also convicted of bankruptcy fraud, 18 U.S.C. 157. The Seventh Circuit affirmed, rejecting claims concerning the sufficiency of the evidence, challenges to joinder of the defendants and to jury instructions, and a Brady claim. View "United States v. White" on Justia Law

Volkman, an M.D. and a Ph.D. in pharmacology from University of Chicago, was board-certified in emergency medicine and a “diplomat” of the American Academy of Pain Management. Following lawsuits, he had no malpractice insurance and no job. Hired by Tri-State, a cash-only clinic with 18-20 patients per day, he was paid $5,000 to $5,500 per week. After a few months, 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 safe where the drugs were stored. Follow-up inspections disclosed poorly maintained dispensary 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 environment. Cup filled with urine were scattered on the floor. The clinic lacked essential equipment. Pills were strewn throughout the premises. Months later, the owners fired Volkman, so he opened his own shop. Twelve of Volkman’s patients died. Volkman and the Tri-State 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)(1) and (2). The owners accepted plea agreements and testified against Volkman, leading to his conviction on most counts, and a sentence of four consecutive terms of life imprisonment. The Sixth Circuit affirmed. View "United States v. Volkman" on Justia Law

Defendant Vicki Dillard Crowe was convicted by a jury on eight counts of mail fraud, and eight counts of wire fraud for her participation in a mortgage fraud scheme. The district court sentenced defendant to sixty months' imprisonment and was ordered her to make restitution. Defendant appealed, arguing that the district court erred in calculating the amount of loss associated with her crimes for purposes of U.S.S.G. 2B1.1(b), and in denying her motion for new trial, which alleged ineffective assistance on the part of her trial counsel. Defendant's challenge to the district court's calculation of loss raised an issue of first impression for the Tenth Circuit: whether the concept of reasonable foreseeability applied to a district court’s calculation of the "credits against loss" under 2B1.1(b). The Court adopted the Second Circuit’s reasoning in "United States v. Turk," (626 F.3d 743 (2d Cir. 2010)), and held that the concept of reasonable foreseeability applies only to a district court's calculation of "actual loss" under 2B1.1(b), and not to its calculation of the "credits against loss." The Court affirmed defendant's sentence. View "United States v. Crowe" on Justia Law

Crundwell, Comptroller of Dixon, Illinois since 1983, pleaded guilty to embezzling about $53 million from the city between 1990 and 2012. She used the money to support more than 400 quarter horses and a lavish lifestyle, which she had previously claimed to be the fruit of the horses’ success. During the last six years of her scheme, the embezzlement averaged 28% of the city’s budget. In exchange for her plea, the prosecutor limited the charge to a single count of wire fraud, 18 U.S.C. 1343. The crime’s impact on the population of Dixon played a major role in the district court’s decision to sentence her to 235 months’ imprisonment, substantially above the Guideline range of 151 to 188 months. The Seventh Circuit affirmed. The district court pronounced a substantively reasonable sentence after giving Crundwell full opportunity to present evidence and arguments. The judge considered deterrence and addressed every one of her arguments. That he thought less of her cooperation than Crundwell herself did, and gave a lower weight to her age than she requested does not undermine the sentence’s validity. View "United States v. Crundwell" on Justia Law

Anobah was an Illinois-licensed loan officer, employed by AFFC, and acted as a loan officer for at least two fraudulent schemes. Developers Brown and Adams recruited Mason to act as a nominee buyer of a property and referred Mason to Anobah for preparation of a fraudulent loan application. The application contained numerous material falsehoods concerning Mason’s employment, assets, and income, and intent to occupy the property. Anobah, Brown, and others created fraudulent supporting documents. AFFC issued two loans in the amount of $760,000 for the property and ultimately lost about $290,000 on those loans. In the course of the scheme, AFFC wired funds from an account in Alabama to a bank in Chicago, providing the basis for a wire fraud charge. Anobah played a similar role in other loan applications for other properties and ultimately pled guilty to one count of wire fraud, 18 U.S.C. 1343. The district court sentenced him to 36 months of imprisonment, five months below the low end of the calculated guidelines range. The Seventh Circuit affirmed, upholding application of guidelines enhancements for abuse of a position of trust and for use of sophisticated means in committing the fraud. View "United States v. Anobah" on Justia Law

Through their companies, Pilon and her husband falsely represented that one investment program would generate significant returns that Pilon would use to pay off the investors’ mortgages within two years, and make a bonus cash payment to investors. Many investors refinanced mortgages to invest. With respect to another investment program, Pilon falsely represented that money would be invested in a high-yield fund and that investors would receive 100 percent on their investments within about 90 days. Pilon hinted at religious and humanitarian purposes. Pilon paid early investors’ mortgages with later investors’ money (a Ponzi scheme). About 40 people invested $4,000 to $110,000, losing a total of $967,702. The Illinois Department of Securities ordered Pilon to cease offering investments; she ignored the order. When the scheme unraveled and investors lost their homes, Pilon was indicted for wire fraud. Pilon, a member of a sovereign citizen movement, unsuccessfully moved to dismiss for lack of jurisdiction. Immediately before jury selection, Pilon stated her intent to plead guilty; when the government proffered the facts, Pilon denied everything. After testimony by eight government witnesses, Pilon admitted to the scheme and pleaded guilty. In calculating Pilon’s guideline range, the court applied an enhancement for abuse of a position of trust, declined to credit Pilon for acceptance of responsibility, and sentenced Pilon to 78 months’ incarceration, in the middle of the range, and imposed $967,702 in restitution. The Seventh Circuit affirmed. View "United States v. Pilon" on Justia Law

Miller and his pastor Wellons wanted to buy investment land for $790,000. Miller formed Fellowship, with eight investment units valued at $112,500 each, to purchase the land and recruited investors. Miller and Wellons did not purchase units, but Miller obtained a 19.5% interest as Fellowship’s manager and Wellons obtained a 4.5% interest as secretary. Miller secured $675,000 in investments before closing and obtained a loan from First Bank, representing that DEMCO, one of Miller’s development companies, needed a $337,500 loan that would be paid within six months. Because DEMCO pledged Fellowship’s property, First Bank required a written resolution. The resolution contained false statements that all Fellowship members were present at a meeting, and that, at this nonexistent meeting, they unanimously voted to pledge the property as collateral. Fellowship’s members, other than Miller and Wellons, believed that the property was being purchased free of encumbrances. After the closing, $146,956.75 remained in Fellowship’s account. Miller then exchanged his ownership in Fellowship for satisfactions of debts. Despite having no ownership interest, Miller modified and renewed the loan. Later Miller told Fellowship members the truth. Miller was convicted of two counts of making false statements to a bank, 18 U.S.C. 1014, and two counts of aggravated identity theft, 18 U.S.C. 1028A. The Sixth Circuit affirmed conviction on one count of false statements, but vacated and remanded the other convictions. View "United States v. Miller" on Justia Law