Justia White Collar Crime Opinion Summaries

Nixon worked at a law office, doing clerical and bookkeeping work. While the attorney was out of the office for medical reasons, his bank informed him that he was delinquent in paying back his line of credit. An investigation by a forensic accountant uncovered that Nixon had made thousands of dollars of personal charges on the firm’s credit card and had borrowed thousands more, all of which was unauthorized according to the testimony of the attorneys. The FBI charged, and Nixon was convicted of,11 counts of wire fraud, 18 U.S.C. 1343; two counts of bank fraud, 18 U.S.C. 1344; three counts of aggravated identity theft, 18 U.S.C. 1028A; and one count of using an unauthorized access device, 18 U.S.C. 1029(a)(2). She was sentenced to 54 months of imprisonment and ordered to pay $55,236.30 in restitution. The Sixth Circuit affirmed with respect to 16 counts, rejecting assertions concerning evidentiary rulings, but reversed as to the final count. The government conceded that it failed to present evidence at trial that the card was an “unauthorized access device.” The term is defined under the statute as “any access device that is lost, stolen, expired, revoked, cancelled, or obtained with intent to defraud.” View "United States v. Nixon" on Justia Law

In 2005 Anderson was charged with federal tax evasion (26 U.S.C. 7201) for tax years 1995 through 1999, while Anderson was an entrepreneur and venture capitalist involved in operating several international companies, including G & A, which generated hundreds of millions of dollars of income. The government alleged that because G & A was a “controlled foreign corporation,” he was required to recognize a share of its income on his tax return; that he fraudulently failed to do so; and thatAnderson had fraudulently underpaid his taxes by $184 million, 99% of which stemmed from G & A. He pleaded guilty with respect to two years and was sentenced to 108 months imprisonment. In 2007 Anderson filed a petition to redetermine his tax deficiencies, 26 U.S.C. 6213(a). The Tax Court granted partial summary judgment to the IRS. The Third Circuit affirmed. Anderson’s conviction for tax evasion in 1998 and 1999 precludes him, by virtue of collateral estoppel, from contesting in civil fraud proceedings that G & A income was taxable to him in those years. The IRS’s concession of all deficiency and penalty issues for the years 1995, 1996, and 1997 has no preclusive effect on those issues for 1998 and 1999. View "Anderson v. Comm'r of Internal Revenue" on Justia Law

Semrau, a Ph.D. in clinical psychology, owned companies that provided psychiatric care to nursing home patients in Tennessee and Mississippi, using contracting psychiatrists who submitted records describing their work. The companies then billed the services to Medicare or Medicaid through private insurance carriers. Services are categorized into five-digit Current Procedural Terminology Codes, published by the American Medical Association. The Centers for Medicare and Medicaid Services sets reimbursement levels for each code as well as “relative value units” corresponding to the amount of work typically required for each service. After audits indicated that the companies had been billing at a higher rate than could be justified by the services actually performed, “upcoding,” Semrau was convicted of healthcare fraud, 18 U.S.C. 1347, and was sentenced to 18 months of imprisonment and ordered to pay $245,435 in restitution. The Sixth Circuit affirmed, rejecting Semrau’s claim that results from a functional magnetic resonance imaging lie detection test should have been admitted to prove the veracity of his denials of wrongdoing. There was ample evidence that Semrau was aware of accepted definitions of the CPT codes; he expressly agreed not to “submit claims with deliberate ignorance or reckless disregard of their truth or falsity.” View "United States v. Semrau" on Justia Law

McAllister, a former FBI agent, was charged with making material misrepresentations on loan documents to obtain real estate loans for rental properties, and making material misrepresentations on official documents during bankruptcy proceedings. At trial he raised a Batson challenge to the government’s peremptory strike of two African-Americans in the jury pool. The government offered race-neutral reasons for striking the jurors: one had a conviction; the other was unemployed and had a military background so that he might be sympathetic to the defendant. The district court summarily accepted those reasons, by stating, “All right.” The court also excused a defense witness who had notified the court of his intention to invoke the Fifth Amendment in response to all questions asked by the defense. McAllister was convicted of 15 counts of wire fraud, 18 U.S.C. 1343, and three counts of bankruptcy fraud, 18 U.S.C. 151(3). The Sixth Circuit affirmed in part, rejecting claims of prosecutorial and judicial misconduct and challenges to evidentiary rulings, but remanding for findings concerning racial animosity that might entitle McAllister to a new trial. View "United States v. McAllister" on Justia Law

Turner was convicted on four counts of wire fraud and two counts of making false statements to the FBI stemming from a scheme to defraud the State of Illinois of salaries paid to but not earned by a team of janitors responsible for cleaning state office buildings. As was typical at the time in federal fraud prosecutions, the wire fraud counts were submitted to the jury on alternative theories that Turner aided and abetted a scheme to defraud the state of its money and also its right to honest services, 18 U.S.C. 1343, 1346. The Seventh Circuit affirmed in 2008. Two years later, the Supreme Court decided Skilling v. United States, 130 S. Ct. 2896 (2010), limiting the honest services fraud statute to schemes involving bribes or kickbacks. Turner moved to vacate the wire-fraud convictions based on Skilling error, and the court agreed. The Seventh Circuit reversed, reinstating the conviction. The Skilling error was harmless; the honest services alternative was unnecessary to Turner’s conviction. The evidence was coextensive on the two fraud theories; the jury could not have convicted Turner of honest-services fraud without also convicting him of pecuniary fraud. View "Turner v. United States" on Justia Law

Federal officers applied for a warrant to search the offices of Fair Finance in Akron, as part of an investigation into its owner, Durham, who was suspected of employing the company to engage in a Ponzi scheme. A Magistrate granted a warrant and, at the government’s request, sealed the file. Officers executed the search. The warrant and inventory of seized items were placed in the sealed file. Newspapers requested an order unsealing the files, arguing that they had a right of access under common law and the First Amendment. The district court denied the motion. After an indictment issued, the court granted the government’s motion to unseal the face sheet of the warrant, the form application (excluding the affidavit in support of the application), the inventory, two attachments to the warrant and application, the motion to seal the documents, and the order granting that motion. The affidavit filed in support of the warrant application and the docket sheet remained sealed. The newspapers are no longer contesting the sealing of the affidavit. The Sixth Circuit affirmed. The First Amendment right of access does not permit the newspapers to obtain the documents filed in connection with these warrant proceedings.View "In re: Search of Fair Finance " on Justia Law

In 2007, Fifth Third loaned Buford $406,000 in exchange for a mortgage on property that Buford purportedly owned. Fifth Third obtained a title-insurance policy from Direct Title, an issuing agent for Chicago Title. Direct Title was a fraudulent agent; its sole “member” was the actual title owner of the property and conspired with Buford to use that single property as collateral to obtain multiple loans from different lenders. When creditors foreclosed on the property in state court, Fifth Third intervened and asked Chicago Title to defend and compensate. Chicago Title refused to defend or indemnify. Chicago Title sought to avoid summary judgment, indicating that it needed discovery on the questions whether “Fifth Third failed to follow objectively reasonable and prudent underwriting standards” in processing Buford’s loan application and whether Direct Title had authority to issue the title-insurance policy. The district court granted Fifth Third summary judgment. The Sixth Circuit affirmed, noting that “When a party comes to us with nine grounds for reversing the district court, that usually means there are none.”View "Fifth Third Mortg. Co. v. Chicago Title Ins. Co." on Justia Law

Chapman was convicted of six counts of forging checks (18 U.S.C. 513(a)) that were made payable to the IRS and given to him by a client who had hired Chapman to resolve a tax dispute. The Seventh Circuit affirmed, rejecting challenges to the sufficiency of the evidence and to the district court’s admission of a previous forgery conviction. View "United States v. Chapman" on Justia Law

Javell, the owner of a mortgage brokerage, and Arroyo, Javell’s employee and loan processor, were convicted of two counts of mortgage-based wire fraud (18 U.S.C. 1343) based on their actions in procuring a fraudulent mortgage during an FBI sting operation. Javell was sentenced to 12 months and one day in prison. The Seventh Circuit affirmed. Javell argued the district court violated Bruton, and Javell’s Sixth Amendment rights by admitting the post-arrest statements made by Arroyo and by failing to properly instruct the jury about the rules of non-imputation. According to Javell, Arroyo’s post-arrest statements directly implicated Javell and had the jury not heard those statements, Javell would not have been convicted. Noting a “plethora” of other evidence, including recordings, the court rejected the argument. View "United States v. Javell" on Justia Law

Stoerr pled guilty to bid rigging, 15 U.S.C. 1; conspiracy to provide kickbacks and to defraud the United States, 18 U.S.C. 371; and assisting in the preparation of false tax returns, 26 U.S.C. § 7206(2). The convictions stemmed from kickback payments that Stoerr solicited and accepted from sub-contractors in connection with environmental remediation projects managed by Sevenson, his employer from 1980 to October 2003. In total, the district court determined that the scheme resulted in losses of $134,098.96 to the EPA and $257,129.22 to Tierra. After Sevenson learned of the kickbacks scheme, it paid Tierra approximately $241,000 to compensate for its losses. It then commenced a civil action against Stoerr in state court to recover its losses, and sought restitution in connection with Stoerr’s sentencing, under the Mandatory Victims Restitution Act, 18 U.S.C. 3663A, for reimbursement of the amount that it paid to Tierra. The district court denied Sevenson‟s request for restitution, instead ordering that Stoerr pay restitution to Tierra. The Third Circuit dismissed; as a non-party, Sevenson lacks standing to appeal. View "United States v. Stoerr" on Justia Law