Justia White Collar Crime Opinion Summaries

Four partners and employees of Ernst & Young, one of the largest accounting firms in the world, appealed their convictions in connection with the development and defense of five "tax shelters" that were sold or implemented by the firm between 1999 and 2001. At issue, among other things, was the scope of criminal liability in a conspiracy to defraud the United States under 18 U.S.C. 371 and the sufficiency of the evidence with respect to the criminal intent of certain defendants. The court held, among other things, that defendants' challenge to the so-called Klein conspiracy theory of criminal liability under section 371 failed under the law of the Circuit, which remained good law absent review or modification by the Supreme Court; with respect to sufficiency challenges, the court reversed some convictions based on insufficient evidence; and venue was proper with respect to Count Six, which charged defendant Vaughn with false statements to the IRS. The court addressed the remaining issues and affirmed in part, reversed in part, and vacated and remanded in part. View "United States v. Coplan (Nissenbaum)" on Justia Law

In 2008, Baniel (an LLC owned by Coffman), Coffman, and her husband Bryan obtained financing from Bank of America to purchase a yacht, giving Bank of America a secured interest. Months later, the United States filed a civil forfeiture in rem complaint against several properties, owned by Coffman and Bryan, alleged to be proceeds of fraud and money laundering. Given the pending criminal investigations, the district court immediately stayed civil forfeiture proceedings. Coffman filed a verified claim to the yacht in 2009. Coffman was acquitted in 2011, but Bryan was convicted of mail fraud, wire fraud, securities fraud, and money laundering. Payments to Bank of America have not been made since December 2009, and approximately $637,000 is owed on the note. In February 2011, Bank of America and the government filed a joint motion for interlocutory sale of the yacht. Baniel sought release of the yacht to Coffman’s custody. In February 2012, the district court ordered the interlocutory sale, denied release of the yacht to Baniel, and joined the civil action with the ongoing criminal action. Baniel and Coffman sought a stay of the sale pending appeal, which was denied by the district court. The Sixth Circuit affirmed all orders. View "United States v. Real Prop. & Residence" on Justia Law

Defendant pled guilty to copyright infringement and mail fraud. Pursuant to the Mandatory Victim Restitution Act (MVRA), 18 U.S.C. 3663A, the district court ordered him to pay restitution to Adobe Systems in an amount equivalent to the revenue he received from his sales of the pirated products. The court vacated the order because the government failed to meet its burden to present evidence from which the district court could determine Adobe Systems' actual loss as a result of the pirated sales. View "United States v. Fair" on Justia Law

Two former employees of Coca-Cola claim that they were injured while performing their jobs. They reported their injuries to Coca-Cola’s third-party administrator for worker’s compensation claims, Sedgwick, which denied benefits. Plaintiffs claim that the medical evidence strongly supported their injuries, but that Sedgwick engaged in a fraudulent scheme involving the mail: using Dr. Drouillard as a “cut-off” doctor. They sued alleging that the actions of Sedgwick, Coca-Cola, and Dr. Drouillard violated the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1961(1)(B), 1962(c), and 1964(c). The district court dismissed. The Sixth Circuit reversed and remanded, noting that since the dismissal, several of the issues were resolved by its 2012 opinion in another case. The district court misapplied the elements of a RICO cause of action to the plaintiffs’ allegations. The court declined to abstain from exercising jurisdiction pending the outcome of state workers comp proceedings. The alleged acts have the same purpose: to reduce Coca-Cola’s payment obligations towards worker’s compensation benefits by fraudulently denying worker’s compensation benefits to which the employees are lawfully entitled. The allegations suggest that the defendants’ scheme would continue on well past the denial of any individual plaintiff’s benefits View "Jackson v. Segwick Claims Mgmt Serv., Inc." on Justia Law

Stone owned STM, which owed Fifth Third about $1 million, secured by liens on business assets and on Stone’s house. Stone’s attorney, Atherton, introduced Stone to Waldman, a potential investor. Stone did not know that Atherton was indebted to Waldman and had given Waldman STM’s proprietary business data. Atherton filed STM’s Chapter 11 bankruptcy petition to preserve assets so that Waldman could acquire them. Atherton allowed the automatic stay to expire. Fifth Third foreclosed, obtaining judgments and a lien on Stone’s house. Waldman paid Fifth Third $900,000 for the bank’s rights. Waldman and Atherton offered to pay off Stone’s debts and employ him in exchange for STM’s assets and told Stone to sign documents without reading them, to meet a filing deadline. The documents actually transferred all STM assets exchange for a job. Ultimately, Waldman owned all STM assets and Stone’s indebtedness, with no obligation to forgive it. Waldman filed garnishment actions; Stone filed a Chapter 11 bankruptcy petition, alleging that Waldman had fraudulently acquired debts and assets. Atherton was disbarred. The bankruptcy court found that Waldman and Atherton had perpetrated “egregious frauds,” invalidated Stone’s obligations, and awarded Stone $1,191,374 in compensatory and $2,000,000 in punitive damages. The district court affirmed. The Sixth Circuit affirmed the discharge, but vacated the award of damages as unauthorized. View "Waldman v. Stone" on Justia Law

Defendant was convicted of ten counts of money laundering under 18 U.S.C. 1956, which prohibited individuals from laundering the "proceeds" of certain activities. After the Supreme Court held that "proceeds" meant "profits" rather than "gross receipts" in United States v. Santos, defendant moved for relief under 28 U.S.C. 2255 and appealed from the district court's denial of that motion. The court concluded that defendant did not argue on appeal that he was entitled to relief under the two-step analysis described in Garland v. Roy. Therefore, the court need not and did not resolve those issues. Because Garland prevented the court from uniformly defining "proceeds" as "profits" across the money-laundering statute, the court affirmed the judgment. View "United States v. Ghali" on Justia Law

Owens, a Chicago zoning inspector, was convicted of two counts of federal program bribery, 18 U.S.C. 666(a)(1)(B), for accepting two $600 bribes in exchange for issuing certificates of occupancy for four newly constructed homes. The Seventh Circuit reversed, finding that there was insufficient evidence, to establish beyond a reasonable doubt, that the issuance of the certificates of occupancy had a value of $5,000 or more as required by the statute. View "United States v. Owen" on Justia Law

Defendant appealed from a Memorandum and Order of Restitution by the district court resentencing him to pay restitution to the victims of a massive "pump-and-dump" securities fraud scheme he and his co-conspirators designed and executed. Defendant contended, inter alia, that the district court should have released some or all of defendant's money held by the court pending his resentencing. The court held that a district court could exercise its authority under the All Writs Act, 28 U.S.C. 1651(a), to restrain a convicted defendant's funds in anticipation of sentencing. Therefore, the court affirmed the restitution order. View "United States v. Catoggio" on Justia Law

After a jury trial in the United States district court, Appellant, an attorney, was convicted on bribery, extortion, and conspiracy charges stemming from his involvement in a scheme to purchase the votes of three corrupt town councilmen on two zoning matters. During the trial, the district court admitted into evidence under Fed. R. Evid. 801(d)(2)(E) a number of recorded statements about Appellant made by one of the councilmen to a government informant. On appeal, Appellant argued that some of these statements should have been excluded as hearsay, and challenged the admission of all the statements on constitutional grounds under the Confrontation Clause. Appellant also claimed the district court erred in calculating his sentence under the United States Sentencing Guidelines. The First Circuit Court of Appeals affirmed, holding (1) the district court did not clearly err in admitting the challenged statements; and (2) the sentence imposed was appropriate. View "United States v. Ciresi" on Justia Law

A dialysis provider created a wholly-owned subsidiary, RCGSC, which supplied dialysis equipment for home use, to take advantage of the Medicare reimbursement scheme and increase profits. In 2005 former employees filed a qui tam action under the False Claims Act, 31 U.S.C. 3729-33, alleging that RCGSC was not a legitimate and independent durable medical equipment supply company, but a “billing conduit” used to unlawfully inflate Medicare reimbursements. The United States intervened and the relators’ claim was voluntarily dismissed. The government alleged that defendants submitted claims, knowing that RCGSC was a sham corporation created solely for increasing Medicare reimbursements; knowing that RCGSC was not in compliance with Medicare rules and regulations; knowing that RCGSC was misleading patients over their right to choose between Method I and Method II reimbursements; and for facility support charges for services rendered to home dialysis patients who had selected Method II reimbursements. The government also brought common law theories of payment by mistake and unjust enrichment. The district court granted summary judgment in favor of the United States. The Sixth Circuit reversed on all counts and remanded some. Defendants did not act with reckless disregard of the alleged falsity of their submissions to Medicare.View "United States v. Renal Care Grp., Inc." on Justia Law