Justia White Collar Crime Opinion Summaries

Rosen, as owner of Kully Construction, submitted a development plan to the city of East St. Louis for a $5,624,050 affordable housing project to be constructed with a combination of private and public funds: $800,000 in federal grant funds, $1,124,810 in Tax Increment Financing (TIF), and $3,699,240 from Rosen and Kully. Rosen constructed elaborate lies about his credentials and history. After obtaining a contract for 32 units, Rosen learned that the project was under-funded by about $2.7 million dollars. To conceal the problem, Rosen misrepresented to the city that he could build 56 units without increasing construction costs, then substituted less-expensive prefab modular housing units in place of the promised new construction; he nonetheless submitted an itemized list of materials and expenses related to construction. He also submitted falsified tax returns to obtain financing and falsified statements that he had obtained financing. After the scheme was discovered, Rosen pleaded guilty to seven counts of wire fraud, and based on the court’s calculation of the loss amount and determination that Rosen was an organizer or leader of criminal activity, was sentenced to 48 months in prison. The Seventh Circuit affirmed. View "United States v. Rosen" on Justia Law

Kennedy pleaded guilty to mail fraud, 18 U.S.C. 1341, wire fraud, 18 U.S.C. 1343, and threatening an informant, 18 U.S.C. 1513(b), for his role in a scheme to sell counterfeit art online and at art shows. At sentencing hearings, the government provided a list of 135 victims’ names, addresses, and loss amounts, and sought restitution of $821,714.65. The district court found that the prosecution had met its burden as to 21 victims and sentenced Kennedy to 96 months’ imprisonment and ordered him to pay restitution of $316,425.65. The Seventh Circuit affirmed the sentence. View "United States v. Kennedy" on Justia Law

Defendant appealed his conviction for aggravated identity theft. At issue on appeal was whether a counterfeit paper check that bears a victim's true name, bank account number, and routing number was a "means of identification of another person" for the purposes of the aggravated identity theft statute, 18 U.S.C. 1028A, 1028(d)(7). The court concluded that, under the plain statutory language of the aggravated identity theft statute, the names and banking numbers on defendant's counterfeit check were a "means of identification." Accordingly, the court affirmed the judgment of the district court. View "United States v. Alexander" on Justia Law

Defendant was convicted of conspiracy to commit mail and wire fraud and conspiracy to commit tax fraud. On appeal, the government challenged defendant's sentence as substantively unreasonable and defendant cross-appealed, challenging her convictions. The court concluded that there was sufficient evidence to prove that defendant knowingly and intentionally joined in an agreement to defraud Best Buy; the evidence was sufficient to prove that defendant willfully committed affirmative acts constituting tax evasion and that a tax deficiency resulted; the evidence was sufficient to sustain defendant's tax fraud conspiracy since the evidence showed that she knowingly and intentionally entered an agreement with her husband to evade taxes and that she took an overt act in furtherance of the agreement; the evidence at trial was not "materially different" from the facts in the indictment and, therefore, no variance occurred and the district court did not err in denying her motion for acquittal on that basis; the district court did not abuse its discretion in rejecting defendant's claim that the verdict was against the weight of the evidence; and the district court did not abuse its discretion in denying defendant a new trial based on admission of Government Exhibit 17. Accordingly, the court affirmed defendants convictions. In regards to defendant's sentence, the court remanded for the district court to provide a fuller explanation of the sentence. View "United States v. Cole" on Justia Law

Defendant was convicted of twelve felonies stemming from her work as a tax preparer for various clients. The court concluded that the district court did not err in denying defendant's motion for judgment of acquittal as to Counts 1, 2, 4, and 5 of the superseding indictment where there was sufficient evidence for a rational jury to conclude that defendant's fraud scheme affected the banks within the meaning of 18 U.S.C. 1343, regardless of whether the banks ultimately suffered any actual loss; the predicate offenses for Counts 16 and 17 happened after 18 U.S.C. 1028A was enacted and, therefore, the jury was not wrong in convicting defendant of aggravated identity theft while relying on the predicate wire fraud offenses; the district court did not err in allowing defendant's former attorney to testify at the sentencing hearing where no attorney-client privilege was implicated; and the district court did not clearly err in calculating the loss and restitution amounts. Accordingly, the court affirmed the judgment. View "United States v. Stargell" on Justia Law

Defendant, a licensed physician who operated an in-home physical therapy services provider for Medicare patients (CMPM), appealed her conviction for ten counts of healthcare and Medicare fraud arising out of her operation of CMPM. The court affirmed the district court's denial of defendant's motion to dismiss the indictment where the district court properly recognized the independent factual basis that existed to clearly state an offense in the indictment, mooting the need to address defendant's rule of lenity/ambiguity challenge; affirmed the district court's denial of defendant's motion in limine to exclude evidence regarding her license because it was irrelevant, and exclusion of certain articles and Medicare regulation changes because they were not available to defendant to rely on at the time of her fraudulent conduct; the district court did not err by denying defendant her constitutional right to be present at all critical stages of her trial; and the district court did not err in denying defendant's motion for a new trial based on ineffective assistance of trial. Accordingly, the court affirmed the conviction. View "United States v. Thomas" on Justia Law

Gary and Deborah divorced in 2003 and agreed to a marital settlement. Gary purchased an annuity, to pay him $200 per month until his death; the settlement required him to pay her “$200 per month…in lieu of her interest in [the annuity].” Two years later, Gary filed for Chapter 7 bankruptcy and asked the court to discharge financial obligations to his ex-wife under the settlement. Gary attempted to blackmail Deborah into cooperation, using nude photos of her sister as a child. He is now in prison for bankruptcy fraud and possession of child pornography. 18 U.S.C. 152(6), 2252A(a)(5)(B). Deborah and the bankruptcy trustee agreed that she had an unsecured claim for $158,455.63, including $12,400 representing 62 monthly payments that the trustee had received under the annuity. Gary owned the annuity, so these payments were part of the bankruptcy estate and their inclusion in her claim was a mistake. The trustee successfully moved the bankruptcy judge to permit transfer to Deborah of $1000 in annuity payments collected since settling her claim, and to direct the company to make future payments to her directly. The Seventh Circuit reversed, directing the court either to order Deborah to return the $1000 or order the trustee to deduct it from her claim and to instruct the company to resume making payments to the trustee. View "Peel v. Peel" on Justia Law

abiu worked as a bank teller, 2003-2007. He searched account records for account holders with balances exceeding $100,000, then stole their information and, along with codefendants, compromised that information to divert money into fraudulently opened bank accounts. Postal inspectors lawfully searched his home and seized notes containing names, Social Security numbers, and account information of 86 customers, and an unspecified number of fake driver’s licenses and Social Security cards bearing the names of some of those customers, but only 17 customers suffered a loss. The losses were reimbursed by the banks. Rabiu pleaded guilty to bank fraud and aggravated identity theft, 18 U.S.C. 1344, 1029(a)(2), 1028A(a)(1), admitting participation in the scheme, but insisting that some of the names and identifying information on the phony driver’s licenses and Social Security cards were fictitious and not from customers. The government successfully sought a four-level upward sentencing adjustment under U.S.S.G. 2B1.1(b)(2)(B) based on 50 or more victims. The government cited a definition of “victim,” which, for offenses involving identity theft, was broadened in 2009, after Rabiu’s arrest, to include “any individual whose means of identification was used unlawfully or without authority.” The Seventh Circuit affirmed. Although the court overstated the number of victims, it was clear that the judge would have imposed the same sentence even had he accepted Rabiu’s calculation; the error was harmless. View "United States v. Rabiu" on Justia Law

Defendant was convicted under the Economic Espionage Act (EEA), 18 U.S.C. 1832, and the National Stolen Property Act (NSPA), 18 U.S.C. 2314, after he replicated his former employer's (the Bank) confidential computer code to give to a competitor in exchange for money. On appeal, defendant challenged the legal sufficiency of the charges in light of United States v. Aleynikov. The court concluded that, on plain-error review of defendant's defaulted legal sufficiency challenge to his EEA conviction, defendant failed to show that purported error in the pleading of the law's jurisdictional element affected his substantial rights or the fairness, integrity, or public reputation of judicial proceedings; on plain-error review of defendant's defaulted legal insufficiency challenge to his NSPA conviction, defendant failed to show that the theft of the computer code did not satisfy the law's goods, wares, or merchandise requirement; and defendant's remaining claims failed. Accordingly, the court affirmed the conviction. View "United States v. Agrawal" on Justia Law

Dayton Title brokered real estate closings and had a trust account at PNC Bank for clients’ funds. In 1998-1999, Dayton facilitated bridge loans from defendants to Chari, from $1.9 million to $3.2 million, for commercial real estate purchases. Defendants would deposit funds into Dayton’s PNC account, which Dayton would transfer to Chari. Chari’s loan payments would pass through Dayton’s account. The first six bridge loans were paid, but not always on time. Defendants provided Chari another bridge loan, for $4.8 million. After the due date, Chari deposited a $4.885 million check into Dayton’s account. The PNC teller did not place a hold on the check. On the same day, Dayton “pursuant to Chari’s instructions” issued checks to defendants. PNC extended a provisional credit for the value of Chari’s check, as is standard for business accounts. After the checks were paid, PNC learned that Chari’s check was a forgery drawn on a non-existing account, exercised its right of “charge back” on the Dayton account, and regained about $740,000 of the provisional credit. Dayton was forced into bankruptcy. Chari declared bankruptcy and was convicted of racketeering, fraud, and forgery. Dayton’s bankruptcy estate and PNC sued, seeking to avoid the $4.885 million transfer to defendants as fraudulent under 11 U.S.C. 548 and Ohio Rev. Code 1336.04(A)(2). The bankruptcy court held that all but $722,101.49 of the transfer was fraudulent. The district court held that all but $20,747.13 of the transfer was not fraudulent. The Sixth Circuit reversed the district court, reinstating the bankruptcy court holding. Dayton did not hold the provisional credit funds in trust; the funds were not encumbered by a lien at the time of transfer. The funds were “assets” held by Dayton, so the transfer satisfied the statutory definition of “fraudulent.” View "In re: Dayton Title Agency, Inc." on Justia Law