Justia White Collar Crime Opinion Summaries

Defendant, a patent attorney and licensed engineer, the divorced father of children born in 1985, 1986, and 1991, was ordered in 2002 to pay weekly child support of $1,406 per week plus $300 per week toward past medical expenses. He has paid no child support since issuance of the final order. He attempted to appeal the order to the U.S. Supreme Court and filed unsuccessful suits and appeals in four states (New Hampshire, Vermont, Virginia, and Maryland) and in two federal courts, arguing that the order was invalid because the New Hampshire court lacked subject matter jurisdiction. Convicted of willful failure to pay child support, 18 U.S.C. 228(a)(3), defendant was sentenced to 24 months in prison. The First Circuit affirmed, finding the evidence sufficient to support findings that he was able to pay and willfully refused to pay. The district court properly charged the jury on willful blindness. View "United States v. Mitrano" on Justia Law

Defendant was the fiancee of the leader of a Philadelphia drug distribution ring responsible for selling a large amount of cocaine and cocaine base (crack) from 1998 to 2005. In 2005, the couple used drug money to purchase a new home, which was titled in defendant's name. When her fiancee was charged with drug trafficking and firearms offenses, defendant was charged with money laundering in purchasing the house, 18 U.S.C. 1956(a)(1)(B)(i). She appealed her conviction. The Third Circuit vacated. The evidence was not sufficient to establish knowledge of a design to conceal on defendant's part. Defendant lied about her income and had the property titled in her name, not to hide her fiancee's involvement (which was obvious), but to get around his bad credit and purchase the house. View "United States v. Richardson" on Justia Law

In this civil enforcement action, a jury found that appellant aided and abetted a securities fraud by his former employer, in violation of 15 U.S.C. 78t(e). The district court fined appellant and barred him from serving as an officer or director of a publicly held company for five years. On appeal, appellant argued that the district court erred in allowing his trial to proceed in the District of Columbia pursuant to the "co-conspirator theory of venue." The court held that the SEC failed to lay venue in the District of Columbia under the straightforward language of 15 U.S.C. 78aa. Accordingly, the judgment was reversed and the district court was instructed to dismiss the case without prejudice. View "Securities and Exchange Comm'n v. Johnson, Jr., et al." on Justia Law

Plaintiff wished to open a franchise in Puerto Rico and sought assistance from defendants, who asserted that it was a "done deal" and accepted a $400,000 retainer, a $100,000 business brokers' fee, and another $125,000 before informing plaintiff that the company at issue does not offer franchises. The district court awarded plaintiff $625,000. The First Circuit affirmed and remanded, rejecting a challenge to jury instructions on "dolo" (fraud) as involving harmless error. The evidence supported the verdict; the district court properly excluded evidence of a settlement agreement, but should have used that settlement to offset the verdict. View "Portugues-Santana v. Rekomdiv Int'l, Inc., " on Justia Law

Defendant did not inform the government when his mother died, but, for 12 years cashed checks for benefits she had earned under the Civil Service Retirement System, netting $158,000. He pleaded guilty to mail fraud. His Guidelines sentencing range was 21 to 27 months, but the judge sentenced him to 30 months, because she believed that he needed treatment for mental illness and alcoholism and that it would take more than 18 months. The Seventh Circuit vacated. While the appeal was pending, the Supreme Court held that a sentencing judge is to recognize that imprisonment is not an appropriate means of promoting correction and rehabilitation, 18 U.S.C. 3582(a), and may not increase the length of a prison term in order to facilitate rehabilitation or correction.View "United States v. Kubeczko" on Justia Law

After a pyramid scheme that he had maintained for nearly a decade came to light, defendant pleaded guilty to one count of fraud, 18 U.S.C. 1341. The district court sentenced him well above the applicable guidelines range to 120 months. The Seventh Circuit affirmed, rejecting a claim that the court erroneously applied a 4-level adjustment under U.S.S.G. 2B1.1(b)(2)(B) for defrauding more than 50 victims and a claim that the sentence was substantively unreasonable.View "United States v. Scott" on Justia Law

Appellants, investors in a commodity pool, brought suit alleging that futures commission merchants violated the Commodity Exchange Act, 7 U.S.C. 1-27f, by aiding and abetting an investment pool operator in his scheme to defraud investors. The district court dismissed the complaint for failure to state a claim against the futures commission merchants. The court held that the district court acted properly in dismissing the investors' aiding and abetting claims where the merchants had no reason to know that the operator was operating as a commodity pool or trading on behalf of other investors, let alone that the operator was running a fraudulent Ponzi scheme. The court also held that, even if the merchants' actions could be construed as negligent, they were not severely reckless. Accordingly, the judgment of the district court was affirmed. View "Amacker, et al. v. Renaissance Asset, et al." on Justia Law

Defendant, manager of a kosher meatpacking company, was convicted of 86 counts of bank, wire, and mail fraud; making false statements to a bank; money laundering; and violations of an order of the Secretary of Agriculture. Defendant appealed his convictions and sentence. The court held that there was no evidence in the record that the district court's decision to remain on the case prejudiced defendant's verdict and concluded that the district court did not err by denying defendant's motion for a new trial. The court also held that the district court did not abuse its discretion in trying the financial charges first where the district court's order was a practical solution given the nature and number of the charges. The court further held that, with the exception of one count of false statements to a bank which was premised solely on violations of immigration law, any error on this evidence would have been harmless because it would have had no effect on the verdict. Therefore, the district court did not abuse its wide discretion in excluding evidence. The court finally held that, because defendant's offense was falsely stating that the company was in compliance with its laws, the court did not commit plain error with its instruction on harboring illegal aliens; defendant's money laundering convictions were lawful and did not merge with any other of his crimes; there was no error in the district court's loss calculation; and the district court did not abuse its considerable discretion in imposing a 324 month sentence. Accordingly, the court affirmed the judgment of the district court. View "United States v. Rubashkin" on Justia Law

This case arose out of the attempts of two federal agencies to disgorge funds from Janet Schaberg, the ex-wife of alleged Ponzi-scheme artist Stephen Walsh. Schaberg subsequently appealed from a memorandum decision and orders of the district court granting preliminary injunctions freezing Schaberg's assets. In response to certified questions, the New York Court of Appeals held that (a) proceeds of a fraud could constitute marital property, and (b) when part or all of the marital estate consisted of the proceeds of fraud, that fact did not, as a matter of law, preclude a determination that a spouse paid fair consideration according to the terms of New York's Debtor and Creditor Law section 272. The court held that because those rulings undermined the key legal assumptions supporting the preliminary injunctions, the court vacated those orders, without prejudice to further proceedings applying the legal principles pronounced by the New York Court of Appeals. View "Commodity Futures Trading Comm'n v. Walsh, et al.; SEC v. WG Trading Investors, L.P., et al." on Justia Law

Defendant, James Gansman, appealed from a judgment convicting him of insider trading under the so-called "misappropriation theory." At issue was whether the district court erred in declining to adopt an instruction proposed by Gansman setting forth a theory of the defense based in part on SEC Rule 10b5-2, 17 C.F.R. 240.10b5-2. The court held that Gansman was entitled to assert a defense theory that he did not have the requisite intent to commit securities fraud, and that in defining the nature of his relationship with Donna Murdoch, a woman with whom he was having an affair, to the jury, he had the right to use language found in Rule 10b5-2. The court held that, nevertheless, Gansman was not entitled to a new trial in the circumstances presented because the slightly modified instruction given by the district court was legally sufficient. Gansman raised a number of other challenges to his conviction, all of which were without merit. Accordingly, the court affirmed the judgment of the district court. View "United States v. Gansman, et al." on Justia Law