Justia White Collar Crime Opinion Summaries

Defendants were convicted of honest services fraud, 18 U.S.C. 1346, mail fraud ("traditional" fraud), 18 U.S.C.1341, and conspiracy, 18 U.S.C. 371, based on a defendant (city councilman) taking official actions in exchange for gifts. Their appeal claimed that the 2010 Supreme Court decision, Skilling v. U.S., affected the law of honest services fraud. The Third Circuit vacated and remanded. While the evidence was sufficient to convict on each count, the Skilling decision made jury instructions on honest services fraud incorrect. The jury should have been instructed on a bribery theory but not on a conflict-of-interest theory. The error was not necessarily harmless; the law of honest services fraud depends on intent and finding intent requires a jury to make reasonable inferences. Evidence of honest services fraud overlapped substantially evidence submitted on traditional fraudView "United States v. Wright" on Justia Law

Defendant was convicted of producing a false identification document that appeared to be issued by or under the authority of the United States government in violation of 18 U.S.C. 1028(a)(1). Defendant subsequently appealed. The court concluded that: (1) as applied to defendant, section 1028(a)(1) was not unconstitutionally vague; (2) the district court properly instructed the jury to use a "reasonable person standard" to determine whether defendant's ID "appeared to be" government-issued; (3) the Government produced sufficient evidence that defendant produced the ID, and that venue was proper, such that the district court properly denied defendant's motion for judgment of acquittal; and (4) it was not necessary to charge defendant with "aiding and abetting" in violation of 18 U.S.C. 2(b). Accordingly, the judgment was affirmed. View "United States v. Jaensch" on Justia Law

The former mayor and the head of the engineering department were convicted of conspiring to embezzle and embezzling government funds, based on use of government funds and government employees to renovate the mayor's house. The mayor claimed that he was unaware of the scheme. The district court gave the jury a conscious avoidance instruction. The mayor had an initial offense level of 10 under the Guidelines, but the court applied enhancements for obstruction of justice, leadership role, and abuse of a position of trust, for a total offense level of 18. With a criminal history level of one, the guidelines range was 27-33 months' imprisonment. The district court imposed a sentence of 60 months, a $60,000 fine, more than $14,000 in restitution, a $200 special assessment, and three years of supervised release. The Seventh Circuit affirmed. The district court was within its discretion in issuing an ostrich instruction, in applying sentencing enhancements, and in its upward departure from the guidelines. View "United States v. Pabey" on Justia Law

Defendant and coconspirators stole clientele books from department stores and used personal information, including credit card numbers, to order merchandise, which was intercepted and sold or returned. She pleaded guilty to conspiracy to commit access device fraud, 18 U.S.C. 1029(b)(2), attempted possession of access devices, id. 1029(a)(3), and aggravated identity theft, id. 1028A(a)(1) (Count III). The district court calculated a four-level increase in her offense level because her crime had more than 50 victims, resulting in a guidelines range of 120-150 months. The court imposed a sentence of 120 months on Counts I and II (to run concurrently) and a consecutive 24-month sentence on Count III as required by 18 U.S.C. 1028A(b). The Seventh Circuit affirmed. Because the court sentenced defendant using the November 2009 guidelines, it included in the count of victims 40 stores and credit card companies that sustained actual loss as well as 65 victims whose credit cards were used, regardless of monetary loss. The court acted within its discretion in rejecting her argument that there was no evidence that cardholders were actually harmed or expended significant time or effort cancelling their credit cards and that the guidelines resulted in a sentence that was greater than necessary. View "United States v. Sandoval" on Justia Law

Defendant was sole owner of a corporation that was a contractor for several Illinois governmental entities. After an audit disclosed irregularities and falsified documents, defendant pled guilty to two counts of mail fraud and one count of submitting false documents; the corporation pled guilty to one count of mail fraud (18 U.S.C. 1001, 1341). Sentences included restitution of $10 million. The Seventh Circuit affirmed, rejecting a claim that defendants were entitled to a "full, dollar-for-dollar credit for the value of the monies and securities" deposited with the Clerk of Court at the time of their deposit, pre-judgment, and that the diminution in value of those securities after their deposit could not be attributed to defendants. Neither the court, the clerk, nor the government exercised authority to remove the funds or securities before sentencing and entry of judgment. Defendant chose to deposit securities, rather than cash, and the deposit did not constitute actual payment of restitution, but only security for eventual payment. View "United States v. Shah" on Justia Law

Defendants, four executives of Gen Re and one of AIG, appealed from convictions of conspiracy, mail fraud, securities fraud, and making false statements to the SEC. The charges arose from an allegedly fraudulent reinsurance transaction between AIG and Gen Re that was intended to cure AIG's ailing stock price. Defendants appealed on a variety of grounds, some in common and others specific to each defendant, ranging from evidentiary challenges to serious allegations of widespread prosecutorial misconduct. The court held that most of the arguments were without merit, but defendants' convictions were vacated because the district court abused its discretion by admitting the stock-price data. View "United States v. Ferguson, et al." on Justia Law

Defendant pleaded guilty to aiding and abetting a scheme to defraud Wal-Mart of more than $675,00 by the use of fictitious money transfers. Defendant was ordered to pay restitution to Wal-Mart, but just before her sentencing, defendant transferred a substantial portion of her cash assets to her boyfriend. Defendant subsequently violated a condition of supervised released by failing to make two scheduled restitution payments. Defendant's supervised release was revoked and she was sentenced to one year and one day in prison. The court affirmed and held that defendant willfully failed to make sufficient bona fide efforts legally to acquire the resources to pay her restitution obligation. Accordingly, the judgment was affirmed. View "United States v. Holt" on Justia Law

Brian and Debra Spurlin were convicted of concealment of bankruptcy estate assets, for knowingly and fraudulently withholding their interests in certain properties from their bankruptcy filings, and false oaths and statements in bankruptcy for a false answer they gave on a bankruptcy questionnaire. Mr. Spurlin was also convicted of bankruptcy fraud for filing bankruptcy to effect and conceal a fraudulent scheme whereby he took money he was supposedly holding in escrow for a company with whom he was doing business. Mr. Spurlin did not appeal his conviction of concealment, but the Spurlins appealed all other convictions. The court affirmed the conviction of Mrs. Spurlin on all counts; affirmed Mr. Spurlin's convictions of concealment of bankruptcy estate assets and of bankruptcy fraud; but reversed Mr. Spurlin's conviction of false oaths and statements in bankruptcy for insufficient evidence. Accordingly, the court vacated Mr. Spurlin's sentence and remanded for resentencing. View "United States v. Spurlin, et al." on Justia Law

A tax employee of defendant, terminated after reporting an alleged tax fraud scheme to the company and federal enforcement agencies, filed suit asserting claims under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1962(c) and 1962(d). The district court dismissed, finding that the predicate acts alleged were either unrelated or did not proximately cause plaintiff's injuries. The Seventh Circuit reversed. The retaliatory actions were related to the alleged tax fraud scheme, under the Supreme Court's "continuity plus relationship" test. Since enactment of the Sarbanes-Oxley Act, 18 U.S.C. 1513(e) retaliation against an employee constitutes racketeering. Retaliatory acts are inherently connected to the underlying wrongdoing exposed by the whistleblower, even though they occur after the coverup is exposed. In this case, the retaliatory acts were not isolated events, separate from the tax fraud. Plaintiff properly alleged that his termination was proximately caused by a RICO predicate act of retaliation. View "DeGuelle v. Camilli" on Justia Law

Defendant operated what appeared to be convenience stores, but in fact were fronts that rang up phony sales for food-stamp recipients to exchange their benefits for discounted amounts of cash. When federal investigators discovered the scheme at one location, he obtained government authorization to accept food stamps at a different address and continued the operation. Defendant eventually pleaded guilty to eight counts of wire fraud, 18 U.S.C. 1343, and was sentenced to 60 months' imprisonment and ordered to pay almost $1.7 million in restitution. The Seventh Circuit affirmed. The district court properly imposed a 16-level sentencing increase under 2B1.1(b)(1)(I) for a loss of more than $1 million because. If anything, the court underestimated the loss. The court properly assessed a 4-level increase under 3B1.1(a) for leadership in an "extensive" scam; defendant ran the scam from multiple locations, traded cash for benefits with "probably hundreds" of customers, and supervised employees at his stores. View "United States v. Hussein" on Justia Law