Justia White Collar Crime Opinion Summaries

Defendant appealed the district court’s judgment awarding damages to Plaintiff to recover funds Defendant received as the result of various alleged fraudulent transfers. The district court entered a default against Defendant as a sanction under Federal Rule of Civil Procedure 37(b) for her repeated failure to comply with discovery orders and ultimately entered a default judgment against Defendant for fraudulent transfers, awarding Plaintiff damages calculated based on three checks Defendant drew from bank accounts she held jointly with her debtor husband.   The Second Circuit affirmed. The court concluded that the district court did not abuse its discretion in determining that Defendant’s noncompliance during discovery warranted a default. The court explained that Defendant failed to respond to interrogatories and produce the documents Plaintiff requested, in violation of the district court’s many orders. This record supports the district court’s determination that Defendant acted willfully, that lesser sanctions would have been inadequate given Defendant’s continued noncompliance after multiple explicit warnings about the consequences of further noncompliance, that Defendant was given ample notice that her continued noncompliance would result in sanctions, including the entry of default judgment, and that her noncompliance spanned more than six months. The court also concluded that Defendant’s withdrawals from accounts she held jointly with her husband constitute fraudulent transfers under Connecticut law. View "Mirlis v. Greer" on Justia Law

Defendant, a California licensed attorney, challenged (1) the sufficiency of the evidence supporting his conviction for transmitting extortionate communications in interstate commerce to sportswear leader Nike, attempted Hobbs Act extortion of Nike, and honest-services wire fraud of the client whom Defendant was purportedly representing in negotiations with Nike. Defendant further challenged the trial court’s jury instruction as to honest-services fraud and the legality of a $259,800.50 restitution award to Nike.   The Second Circuit affirmed. The court explained that the trial evidence was sufficient to support Defendant’s conviction for the two charged extortion counts because a reasonable jury could find that Defendant’s threat to injure Nike’s reputation and financial position was wrongful in that the multi-million-dollar demand supported by the threat bore no nexus to any claim of right. Further, the court held that the trial evidence was sufficient to support Defendant’s conviction for honest-services fraud because a reasonable jury could find that Defendant solicited a bribe from Nike in the form of a quid pro quo whereby Nike would pay Defendant many millions of dollars in return for which Defendant would violate his fiduciary duty as an attorney. The court further explained that the district court did not exceed its authority under the MVRA by awarding restitution more than 90 days after initial sentencing, and Defendant has shown no prejudice from the delayed award. Finally, the court wrote that the MVRA applies in this case where Nike sustained a pecuniary loss directly attributable to those crimes as a result of incurring fees for its attorneys to attend the meeting demanded by Defendant at which he first communicated his extortionate threat. View "United States v. Avenatti" on Justia Law

The Penal Code authorizes but does not require, county sheriffs to issue licenses to carry concealed weapons. The Santa Clara County Sheriff’s Office rarely issued CCW licenses; the office would not even process a CCW application absent a special instruction Sung, who apparently ran Sheriff Smith’s 2018 re-election campaign and subsequently became the undersheriff, could issue such instructions and could place applications on hold even after licenses were signed by the sheriff. Sung abused that authority to extract favors.Apple executives, concerned about serious threats, met with Sung, who asked whether they would support Sheriff Smith’s re-election. Apple would not give anything of value in exchange for CCW licenses but two executives personally donated $1,000, the maximum allowable amount, to Smith’s campaign. After the election, the applicants were fingerprinted and completed their firearm range qualification tests. Sheriff Smith signed the CCW licenses but they were not handed over. Although Apple had no program for donating products to law enforcement agencies, after a meeting with Sung, an Apple executive (Moyer) emailed an inquiry about donating iPads or computers to the sheriff’s office's “new training facility,” not mentioning Apple’s pending CCW applications. The Office was not setting up a new training center but asked for 200 iPads, worth $50,0000-$80,000. Apple’s team then received their CCW licenses, Apple terminated the promised donation.The court of appeal reversed the dismissal of a bribery charge against Moyer. A public official may be bribed with a promise to donate to the official’s office. View "People v. Moyer" on Justia Law

Defendant ended up at a Twin Cities chiropractic clinic after an automobile accident. The visit resulted in a job: the clinic hired him to recruit patients. And then another one did too. Defendant’s role was to bring in as many accident victims as possible. Each new patient could undergo treatment up to $20,000, the limit of basic economic benefits available under most Minnesota automobile insurance policies. After a jury trial, the district court ordered Defendant to pay $187,277 in restitution to the insurance companies he defrauded. On remand, the amount of restitution decreased. This time, the district court concluded that Defendant qualified as a runner for only 53 of the 65 victims, which dropped the award to $155,864. Defendant, for his part, has adopted an all-or-nothing strategy: he does not believe he owes a single penny of restitution.   The Eighth Circuit affirmed. The court explained that Defendant received up to $1,500 per patient he recruited, which satisfies the pecuniary-gain requirement. A series of text messages establishes the remaining elements. When the clinic owner later said she was “praying for some ice and snow” to bring in more clients, Defendant replied that he had “been praying for [the] last four weeks.” It was reasonable to conclude from these messages that Hussein “directly procure[d]” these patients with at least a “reason to know,” if not actual knowledge, that the provider’s purpose was to obtain benefits under an automobile-insurance contract. View "United States v. Abdisalan Hussein" on Justia Law

Titus’s solo medical practice, in its last 13 months, earned $1.1 million by distributing more than 20,000 prescriptions for Schedule II drugs. Titus often did only cursory physical examinations before prescribing opioids. He kept prescribing drugs despite signs that his patients were diverting or abusing them. At least two of Titus’s patients overdosed. Other doctors filed professional complaints. Titus closed his practice. Federal agents raided the homes of Titus and two of his employees and found thousands of patient files. Titus was indicted on 14 counts of unlawfully dispensing and distributing controlled substances (based on 14 prescriptions) and maintaining drug-involved premises, 21 U.S.C. 841(a)(1), (b)(1)(C), 856(a)(1).The government's statistician, using the Prescription Monitoring Program, identified 1,142 patients for whom Titus had prescribed controlled drugs, drew a random sample of 300 patients, and extrapolated to conclude that Titus had provided 29,323 controlled substance prescriptions to 948 patients with at least one inconsistent drug test and 1,552 such prescriptions to 352 patients he had already discharged from his practice. The government’s medical expert reviewed 24 of those files and determined that Titus had written illegal prescriptions for 18 of the patients.The district court held Titus responsible for at least 30,000 kilos, citing “general trial evidence” and extrapolating from the 24-file sample. The Third Circuit affirmed Titus’s convictions but vacated his 240-month sentence. The government failed to prove that extrapolating from a small sample satisfied its burden to prove the drug quantity by a preponderance of the evidence. View "United States v. Titus" on Justia Law

Plaintiff-Appellant appealed from a district court order granting summary judgment to Defendants-Appellees on his claim under the Racketeer Influenced and Corrupt Organizations Act (“RICO”). On appeal, Appellant argued that the district court erroneously held that he lacks RICO standing to sue for his lost earnings because those losses flowed from, or were derivative of, an antecedent personal injury.   The Second Circuit vacated and remanded. The court explained that RICO’s civil-action provision, 18 U.S.C. Section 1964(c), authorizes a plaintiff to sue for injuries to “business or property.” While that language implies that a plaintiff cannot sue for personal injuries, that negative implication does not bar a plaintiff from suing for injuries to business or property simply because a personal injury was antecedent to those injuries. The court explained that it is simply wrong to suggest that the antecedent-personal-injury bar is necessary to ensure “genuine limitations” in Section 1964(c), or to give restrictive significance to Congress’s implicit intent to exclude some class of injuries by the phrase “business or property”’ when it enacted RICO. View "Horn v. Medical Marijuana, Inc." on Justia Law

Plaintiff-Appellant Douglas Horn appealed the district court’s order of the granting summary judgment to Defendants on his claim under the Racketeer Influenced and Corrupt Organizations Act (“RICO”). On appeal, Appellant argues that the district court erroneously held that he lacks RICO 11 standing to sue for his lost earnings because those losses flowed from, or were derivative of, an antecedent personal injury.   The Second Circuit agreed and vacated the order granting summary judgment to Appellees on Appellant’s civil RICO claim and remanded to the district court. The court explained that RICO’s civil-action provision, 18 U.S.C. Section 1964(c), authorizes a plaintiff to sue for injuries to 14 “business or property.” While that language implies that a plaintiff cannot sue for personal injuries, that negative implication does not bar a plaintiff from suing for injuries to business or property simply because a personal injury was antecedent to those injuries. View "Horn v. Medical Marijuana, Inc." on Justia Law

Johnson was the councilman in Cleveland’s Buckeye-Shaker neighborhood for 41 years. Jamison was his executive assistant. For years, Johnson used his position to fraudulently claim federal reimbursements for payments he never made. He also secured employment for his children in federally funded programs, although they were not legally eligible to work in such positions. Johnson deposited their earnings into his own account. In addition, Johnson fraudulently claimed a series of tax deductions. He encouraged and assisted his son Elijah in submitting falsified records for Elijah’s grand-jury testimony. Jamison assisted Johnson in these crimes. Johnson and Jamison were convicted on 15 charges, including federal program theft under 18 U.S.C. 371, 666(a)(1)(A) and (2); tax fraud, 26 U.S.C. 7206(2); and obstruction of justice, 18 U.S.C. 1512(b) and 1519. Johnson was sentenced to 72 months in prison. Jamison was sentenced to 60 months.The Sixth Circuit affirmed, rejecting challenges to the district court’s loss calculations and to sentencing enhancements for being an organizer or leader of a criminal activity involving five or more participants, for using a minor, and for obstructing justice. The district court properly admitted “other acts” evidence of prior misuse of campaign funds. Any other errors in evidentiary rulings were harmless. View "United States v. Jamison" on Justia Law

Defendants Gladden and Linton were convicted of conspiracy to commit health care fraud and mail fraud, and the substantive offenses of health care fraud, mail fraud, and aggravated identity theft, for their roles in a multi-year scheme to defraud insurance companies. The government alleged Defendants received inflated reimbursement payments by billing for medically unnecessary and fraudulent prescriptions.The Eleventh Circuit found that the evidence presented at trial was sufficient to support the jury’s verdict as to all of Linton’s convictions and as to Gladden’s convictions for conspiracy, health care fraud, and mail fraud. In addition, the Eleventh Circuit found that the district court did not clearly err in calculating Gladden’s restitution and forfeiture amounts. The Court also vacated Galdden's conviction for aggravated identity theft and remanded for further proceedings consistent with this opinion. View "USA v. John Gladden, et al" on Justia Law

A jury convicted Defendant of illegally structuring two separate land-sale contract payments of around $270,000 each. On appeal, Defendant argued that there was insufficient evidence to support his convictions. Defendant asserts that the court should vacate his conviction due to a plainly erroneous jury instruction.   The Eleventh Circuit affirmed. The court wrote that in reviewing the record to determine how a jury might reasonably conclude that he structured deposits to avoid the $10,000 reporting requirement, it appears that Defendant made 22 cash deposits below $10,000 over seven days to satisfy the first payment. Then, Defendant made 38 cash deposits under $10,000 over the course of around seven and a half months to satisfy the second payment. there is sufficient evidence to support Defendant’s convictions. The court explained that viewing the evidence in the light most favorable to the verdict, it concludes that a “reasonable construction of the evidence would have allowed the jury to find the defendant guilty beyond a reasonable doubt.”   Further, the court concluded that the instructions properly listed the statutory elements for structuring in violation of 31 U.S.C. Section 5324(a)(3), and the jury concluded that the government satisfied its burden of proof on these points. That the government could not prove Bird intended to evade Form 4789 specifically does not undermine the soundness of the verdict. Finally, the court explained that Defendant and the government jointly proposed the jury instructions that the district court ultimately used. By supplying the instructions, Defendant invited any purported error. Consequently, the court declined to review his challenge to the jury's instructions. View "USA v. Zachary Bird" on Justia Law