Justia White Collar Crime Opinion Summaries

An individual, born in 1937, assumed the identity of his younger brother, who died in infancy, to fraudulently obtain a second Social Security number and collect retirement benefits under both his own and his brother’s identities. Over the course of nearly two decades, he received Social Security payments in both names and also procured and used U.S. passports issued under his deceased brother’s identity. His scheme unraveled after a state motor vehicle official noticed similarities between two identification cards with different names but similar photos and addresses. Subsequent investigation revealed the use of both identities for benefits and travel, as well as submission of multiple passport applications with false information.A grand jury in the United States District Court for the District of Maine indicted the defendant on six counts, including identity theft, passport fraud, Social Security fraud, and mail fraud. At trial, the defendant contested the propriety of venue in Maine for two passport fraud counts and challenged the calculation of restitution. The district court submitted the venue question to the jury, which found venue proper for both passport counts and convicted him on all charges. He was sentenced to probation and ordered to pay $175,757 in restitution.Upon appeal, the United States Court of Appeals for the First Circuit reviewed the jury’s venue determinations and the restitution order. The court held that sufficient circumstantial evidence supported venue in Maine for both the false statement in the passport application and the use of a fraudulently obtained passport, applying the appropriate legal standards for each count. The court also found no abuse of discretion in the district court’s method for calculating restitution, concluding that the government met its burden of proof regarding the loss amount. The First Circuit affirmed both the convictions and the restitution order. View "US v. Gonzalez" on Justia Law

Five individuals obtained over $1.8 million in workplace sexual harassment judgments against various related business entities and individuals. When these judgments went unpaid, they brought a civil suit under the Racketeer Influenced and Corrupt Organizations Act (RICO) against fifteen defendants, alleging a scheme to evade collection of the judgments. The plaintiffs claimed that the defendants orchestrated fraudulent asset transfers and used a sham consignment scheme involving false customs forms to prevent the plaintiffs from seizing assets to satisfy their judgments.Previously, the United States District Court for the Southern District of Iowa dismissed the plaintiffs’ RICO claims based on predicate acts of bankruptcy crimes, money laundering, and obstruction of justice, as well as their claim for declaratory relief regarding alter ego liability. However, the court allowed the RICO claims predicated on wire fraud related to the consignment scheme to proceed. After discovery, the defendants moved for summary judgment. The district court granted summary judgment for the defendants, holding that the plaintiffs failed to show proximate causation between the alleged wire fraud and their inability to collect on their judgments, and that they were not entitled to adverse inference sanctions for alleged discovery misconduct.On appeal, the United States Court of Appeals for the Eighth Circuit affirmed the district court’s judgment. The Eighth Circuit held that the plaintiffs failed to establish that the consignment scheme was a but-for cause of their injury, as they did not show that any assets subject to seizure belonged to the judgment debtors. The court further concluded that claims based on other predicate offenses failed due to insufficient evidence and lack of particularity. The appellate court also found no error in the district court’s refusal to draw adverse inferences or to allow amendment of the complaints at this stage. The court affirmed summary judgment for all defendants on all claims. View "Rennenger v. Aquawood, LLC" on Justia Law

The defendant, convicted by a jury of conspiracies to commit wire and securities fraud in connection with a scheme to defraud investors, was ordered to pay over $10 million in restitution to the victim company. To enforce this restitution order, the government sought to garnish the defendant’s 401(k) retirement accounts. The defendant objected, arguing that various legal provisions, including plan terms and federal statutes, either prohibited or limited garnishment of his accounts. The victim, the financial institutions holding the accounts, and the government ultimately reached a settlement on how the garnishment and tax consequences would be handled.After the conviction and sentence were affirmed by the United States Court of Appeals for the Second Circuit, the United States District Court for the Eastern District of New York considered the government’s application for writs of garnishment. The district court rejected the parties’ proposed stipulated orders of garnishment, reasoning that the proposal exceeded the scope of the Second Circuit’s prior mandate by not resolving specific tax issues, and ordered its own procedure for liquidation and distribution of the funds. The district court also denied a stay of distribution, holding that the defendant lacked standing because the funds had been liquidated.On appeal, the United States Court of Appeals for the Second Circuit held that the controversy remained live despite the liquidation of the accounts, and that its previous mandate did not bar the district court from approving the parties’ stipulated orders of garnishment. The court found that the district court erred in its application of the mandate rule and in concluding that the defendant lacked standing. Accordingly, the Second Circuit reversed the district court’s order and remanded the case with instructions to approve the parties’ proposed stipulated orders of garnishment. View "United States v. Greebel" on Justia Law

The case concerns the owner and CEO of a telemarketing company that sold limited indemnity healthcare insurance plans, which provided fewer benefits than traditional health insurance. The CEO, along with other executives, instructed sales employees to use deceptive and misleading scripts to sell these plans, resulting in customers being misled about the scope of coverage. The government alleged that these practices were designed to create the false impression that customers were purchasing more comprehensive health insurance than they actually received.The case was first tried in the United States District Court for the Southern District of Illinois. One executive pleaded guilty and testified against the CEO and another defendant, who were tried before a jury. After an eleven-day trial, the jury convicted both remaining defendants on all counts, including conspiracy to commit wire fraud, wire fraud, and mail fraud. The CEO moved for acquittal or a new trial, but the district court denied those motions and sentenced him to 300 months imprisonment on the conspiracy count and 240 months on the other counts, with all terms to be served concurrently.On appeal, the United States Court of Appeals for the Seventh Circuit reviewed several challenges to the conviction. The court held that the jury instructions on “scheme to defraud” accurately reflected the law, clarifying that actual falsity is not required and that misleading or deceptive statements, including omissions or half-truths, can support a conviction under the relevant statutes. The court also found no plain error in the admission and use of a training video exhibit during jury deliberations, and rejected claims of constructive amendment and the need for a specific unanimity instruction. The Seventh Circuit affirmed the district court’s judgment. View "USA v Dorfman" on Justia Law

A lawyer who served as a legal advisor to a Puerto Rican municipality and its mayor became involved in a scheme related to funds awarded to the municipality for trauma center renovations. The municipal legislature had created a for-profit corporation to promote economic development. Following the deposit of $9 million—traceable to the trauma center renovation funds—financial consultants persuaded the mayor to invest the money, promising it would benefit the municipality and be returned after generating interest. However, the consultants and associates, including the defendant, orchestrated a fraudulent transfer of the funds through multiple accounts and corporate entities. The defendant’s company received significant payments from these transactions, for which he fabricated invoices and provided no actual services. He used some of the money for personal expenses. When auditors later questioned the $9 million transfer, the defendant and others falsely asserted that the transaction was lawful and the funds were appropriately invested.A federal grand jury in Puerto Rico indicted the defendant and several others on charges including wire fraud conspiracy, substantive wire fraud, and money laundering. At trial in the United States District Court for the District of Puerto Rico, the defendant moved for judgment of acquittal based on insufficient evidence, but the court denied the motions. The jury found him guilty on all counts. The district court sentenced him to thirty-seven months’ imprisonment and denied his subsequent pro se motion for a sentence reduction.The United States Court of Appeals for the First Circuit reviewed the case. The court held that sufficient evidence supported the defendant’s convictions, as a reasonable jury could find he knowingly participated in a single overarching conspiracy to defraud the municipality. The court also held it lacked jurisdiction to review the denial of his sentence reduction motion because no notice of appeal was filed for that order. The court affirmed the convictions and dismissed the sentencing challenge. View "US v. Irizarry-Irizarry" on Justia Law

Michael and Tiffany Fullerton participated in a scheme with two others to fraudulently obtain over $3 million from the Paycheck Protection Program (PPP) during the COVID-19 pandemic. The conspiracy involved submitting six fraudulent loan applications using defunct or shell companies, falsified tax and employment records, and stolen or fabricated identities. The proceeds were laundered through a series of complex financial transactions, including layered transfers among accounts, use of cashier’s checks, and investments in out-of-state ventures and luxury purchases.The United States District Court for the Western District of Texas handled the initial proceedings. Michael pled guilty to eleven counts, including conspiracy, bank fraud, wire fraud, money laundering, and identity theft, and was sentenced to 286 months in prison after receiving several sentencing enhancements. Tiffany was convicted at trial of conspiracy to commit bank fraud and money laundering but acquitted of conspiracy to commit wire fraud. She received a 108-month sentence, which included an enhancement for suborning perjury, based on findings that she procured Michael’s false testimony at her trial. Tiffany’s motion for a new trial, based on newly discovered evidence regarding Michael’s prior conduct, was denied.On appeal, the United States Court of Appeals for the Fifth Circuit reviewed multiple issues. The court affirmed all sentence enhancements for Michael—including those for sophisticated means, sophisticated laundering, leadership role, and obstruction of justice—concluding that each enhancement was supported by distinct and sufficient evidence. The court also upheld Tiffany’s obstruction enhancement, denial of her motion for a new trial, and the calculation of her intended loss amount. However, the court remanded the case solely for correction of a clerical error in Tiffany’s judgment, as she was acquitted of one charge listed in the written judgment. The Fifth Circuit otherwise affirmed the district court’s rulings. View "USA v. Fullerton" on Justia Law

Federal authorities investigated a large gun trafficking operation spanning West Virginia and Pennsylvania, involving straw purchasers who bought firearms in West Virginia to resell them in Pennsylvania. Bisheem Jones was identified as a leader, directing participants, organizing purchases, compensating straw purchasers, and facilitating resale. The scheme involved at least nineteen people and more than one hundred thirty firearms, with many later recovered by law enforcement in Pennsylvania.A federal grand jury in the Southern District of West Virginia indicted Jones for conspiracy to travel interstate to deal firearms without a license, conspiracy to commit promotional money laundering, aiding and abetting interstate travel to deal firearms, and being a felon in possession of a firearm. After a five-day jury trial, Jones was convicted on all counts except the felon-in-possession charge. He moved for acquittal, arguing insufficient evidence for the promotional money laundering conspiracy, but the District Court denied the motion. At sentencing, several enhancements were applied under the Sentencing Guidelines, including for obliterated serial numbers, number of firearms, and gun trafficking. Jones was sentenced to twenty-five years imprisonment.The United States Court of Appeals for the Fourth Circuit reviewed Jones’s appeal. The court found insufficient evidence for the promotional money laundering conspiracy conviction, concluding the government had not shown an agreement between Jones and another participant to funnel illicit proceeds back into the gun trafficking business. The court vacated that conviction, ordered entry of acquittal on that count, and remanded for resentencing. The court affirmed the District Court’s application of sentencing enhancements relating to obliterated serial numbers, gun trafficking, and the number of firearms, finding no clear error. The remaining convictions for firearm-related conspiracies and aiding and abetting were affirmed. View "US v. Jones" on Justia Law

Several third-party payors who covered prescriptions for Avandia, a diabetes medication manufactured by GlaxoSmithKline LLC, brought a putative class action alleging that the company misrepresented Avandia’s cardiovascular risks and benefits. They claimed these misrepresentations led health care providers to prescribe Avandia more frequently than less expensive alternatives, causing the payors to reimburse for prescriptions that otherwise would not have been issued. The plaintiffs sought class certification on behalf of entities that paid for Avandia prescriptions during a specified period.The United States District Court for the Eastern District of Pennsylvania previously reviewed this case. It denied GlaxoSmithKline’s motion to dismiss the plaintiffs’ Racketeer Influenced and Corrupt Organizations Act (RICO) claim, and the Third Circuit affirmed that denial. Later, the District Court granted summary judgment to GlaxoSmithKline on certain claims, but the Third Circuit reversed in part and remanded for further proceedings. Most recently, the District Court granted class certification, finding the class ascertainable and concluding that common issues would predominate regarding causation. It relied on evidence of a common scheme to deceive and statistical analyses showing marketing campaigns increased prescriptions.The United States Court of Appeals for the Third Circuit reviewed the District Court’s class certification. The Third Circuit held that while the class is ascertainable, the record does not yet demonstrate that common questions predominate on causation. The court clarified that plaintiffs in pharmaceutical fraud RICO class actions may use statistical evidence to prove causation, but such evidence must establish causation, not merely correlation. Because the plaintiffs’ statistical evidence failed to satisfy this standard, the Third Circuit vacated the District Court’s class certification and remanded for further fact-finding on predominance under the clarified standard. View "In re Avandia Marketing" on Justia Law

Between December 2020 and April 2021, a licensed accountant from Mexico participated in a complex conspiracy to launder over $5.1 million in criminal proceeds. She acted as a broker, converting U.S. cash to Bitcoin for a fee, and coordinated with multiple coconspirators who picked up, deposited, and tracked cash, and purchased Bitcoin for clients. Her involvement was central to directing and managing the steps of the operation, including overseeing cash pickups, maintaining ledgers, directing the conversion of funds, and serving as the sole contact with clients for Bitcoin wallet information. The scheme came to light following an investigation into a theft from a Wisconsin business.After pleading guilty to conspiracy to commit money laundering, she entered a binding plea agreement in the United States District Court for the Western District of Wisconsin, limiting her sentence to between three and six and a half years. The initial presentence report did not recommend a sentencing enhancement for a managerial or supervisory role. However, after the government’s objection, the probation office revised the report to include a three-level enhancement under the United States Sentencing Guidelines. The district court adopted this enhancement, finding that she played a managerial role, and sentenced her to 60 months in prison, which was below the calculated guidelines range but within the plea agreement’s bounds.On appeal, the United States Court of Appeals for the Seventh Circuit reviewed whether the district court erred in applying the managerial enhancement and in failing to address sentencing disparities among coconspirators. The appellate court held that the record supported the enhancement, as she exercised sufficient control and coordination over others. The court further found that the sentence was reasonable and not procedurally flawed, affirming the judgment. View "USA v. Mendoza-Rubio" on Justia Law

A police officer in Savanna, Oklahoma, was accused of sexual assault during a traffic stop. After pulling over a vehicle for speeding, the officer activated both his body and dash cameras, then manually deactivated them before ordering a nineteen-year-old passenger to sit in his patrol car, where he sexually assaulted her. The cameras’ deactivation resulted in incomplete or soundless recordings of the incident. Subsequent investigation confirmed the officer had intentionally turned off both cameras during the stop. The victim promptly reported the assault, and the officer’s conduct was corroborated through physical evidence and analysis of the camera devices.The United States District Court for the Eastern District of Oklahoma charged the officer with deprivation of rights under color of law and two counts of falsifying records. After granting two continuances and denying a third, the court held a jury trial. The officer was convicted on all counts and sentenced to concurrent terms of 480 months for deprivation of rights and 240 months for falsifying records. The presentence investigation established the advisory guidelines range, and the district court adopted its findings without objection.On appeal to the United States Court of Appeals for the Tenth Circuit, the officer argued the district court erred in denying his third continuance, that manually deactivating the cameras did not violate the falsification statute, and that his sentence was substantively unreasonable. The Tenth Circuit rejected each argument. The court held that the district court did not abuse its discretion in denying the continuance, found that intentionally deactivating the cameras to prevent the creation of a complete record constituted falsification under 18 U.S.C. § 1519, and ruled that the sentence imposed was within the range of rationally available choices. The conviction and sentence were affirmed. View "United States v. Smith" on Justia Law