Justia White Collar Crime Opinion Summaries

Artak Ovsepian participated in a healthcare fraud scheme at Manor Medical Imaging, Inc., a sham clinic in Glendale, California. The clinic generated prescriptions for unnecessary medications, which were billed to Medicare and Medi-Cal. Manor employees used the identifying information of Medicare and Medi-Cal beneficiaries, often without their knowledge, to fill these prescriptions. Ovsepian joined the conspiracy in 2010, managing drivers who transported beneficiaries to pharmacies to fill fraudulent prescriptions.The government charged Ovsepian with conspiracy to commit healthcare fraud and aggravated identity theft under 18 U.S.C. § 1028A(a)(1). At trial, the government narrowed the aggravated identity theft charge to the possession of one victim’s identifying information. The jury found Ovsepian guilty on all counts, and he was sentenced to 180 months, including a mandatory 24-month sentence for aggravated identity theft. Ovsepian’s direct appeals were unsuccessful, and the Supreme Court denied his petition for a writ of certiorari.Ovsepian filed a 28 U.S.C. § 2255 motion to vacate his aggravated identity theft conviction, arguing actual innocence. The district court denied the motion, and the Ninth Circuit initially denied a certificate of appealability. However, the Supreme Court remanded the case for reconsideration in light of Dubin v. United States, which clarified the interpretation of the aggravated identity theft statute.The Ninth Circuit reversed the district court’s denial of Ovsepian’s § 2255 motion. The court held that a petitioner convicted under a divisible statute must demonstrate actual innocence only for the prong under which they were convicted. The court found that the jury instructions were erroneous because they did not convey that possession of another’s identifying information must be central to the healthcare fraud to sustain a conviction. Consequently, the Ninth Circuit vacated Ovsepian’s conviction and sentence for aggravated identity theft. View "USA V. OVSEPIAN" on Justia Law

Marcus Millsap was convicted by a jury of conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act (RICO), aiding and abetting attempted murder in aid of racketeering, and conspiracy to distribute and possess with intent to distribute 500 grams or more of methamphetamine. Millsap was involved with the New Aryan Empire, a white-supremacist organization engaged in drug trafficking. He assisted the organization's president, Wesley Gullett, in drug operations and attempted to retaliate against Bruce Hurley, a police informant, by offering money to have him killed. Gullett attempted to kill Hurley but failed, and Hurley was later murdered by an unknown perpetrator.The United States District Court for the Eastern District of Arkansas sentenced Millsap to life imprisonment. Millsap appealed, arguing that his indictment should have been dismissed due to a violation of the Interstate Agreement on Detainers Act, and that the district court made several errors regarding evidentiary issues and juror intimidation. He also challenged his sentence if the convictions were upheld.The United States Court of Appeals for the Eighth Circuit reviewed the case. The court found that the Interstate Agreement on Detainers Act did not apply because Millsap was transferred to federal custody via a writ of habeas corpus ad prosequendum before a detainer was lodged. The court also held that there was no sufficient showing of juror intimidation to justify a mistrial. The court found the evidence sufficient to support Millsap's convictions on all counts, including his association with the drug-trafficking enterprise and his involvement in the attempted murder of Hurley.The court also ruled that the district court did not err in admitting co-conspirator statements and other evidence, and that any potential errors were harmless. The court upheld the district court's application of sentencing enhancements and the calculation of Millsap's criminal history points. Consequently, the Eighth Circuit affirmed the judgment of the district court. View "United States v. Millsap" on Justia Law

Two defendants, Arturo Cuellar ("AC") and Ricardo Quintanilla, were involved in a scheme to bribe city commissioners in Weslaco, Texas, to secure contracts for an infrastructure project. The bribes were intended to influence the awarding of contracts to Camp Dresser & McKee (CDM) and Briones Consulting and Engineering, Ltd. Quintanilla bribed Commissioner Gerardo Tafolla, while AC bribed Commissioner John Cuellar (JC). Leo Lopez, a consultant for CDM and Briones, facilitated the bribes. The scheme involved multiple meetings and payments, with both commissioners taking actions to favor CDM and Briones. The city paid approximately $42.5 million to CDM, Briones, and LeFevre, with Lopez distributing funds to AC and Quintanilla.The United States District Court for the Southern District of Texas convicted Quintanilla and AC of various federal offenses, including conspiracy to commit honest-services wire fraud, honest-services wire fraud, federal program bribery, conspiracy to launder monetary instruments, and money laundering. Quintanilla was sentenced to 200 months in custody, while AC received 240 months. Both were also ordered to pay fines, special assessments, restitution, and forfeiture amounts. The defendants appealed their convictions and sentences.The United States Court of Appeals for the Fifth Circuit reviewed the case and affirmed the convictions and sentences. The court addressed several issues raised by the defendants, including claims of constructive amendment of the indictment, sufficiency of the indictment, recusal of the district judge, and evidentiary rulings. The court found that the government did not constructively amend the indictment and that the evidence supported the convictions. The court also held that the district judge did not need to recuse herself and that the evidentiary rulings were within the court's discretion. The court concluded that the defendants' arguments were either forfeited, not meritorious, or both. View "USA v. Quintanilla" on Justia Law

Maggie Anne Boler was convicted of six counts of presenting false claims against the United States by submitting fraudulent tax returns to the IRS and one count of making a false statement on a Paycheck Protection Program (PPP) loan application. Boler submitted six fraudulent tax returns, receiving refunds on four, totaling $116,106. Additionally, she falsely claimed a $20,833 PPP loan. She was sentenced to 30 months in prison.The United States District Court for the District of South Carolina calculated Boler's sentencing range based on the total intended financial harm, including the two denied tax returns, amounting to $180,222. Boler objected, arguing that only the actual loss should be considered, not the intended loss. The district court overruled her objection, holding that the term "loss" in the Sentencing Guidelines could include both actual and intended loss.The United States Court of Appeals for the Fourth Circuit reviewed the case. The court concluded that the term "loss" in the Sentencing Guidelines is genuinely ambiguous and can encompass both actual and intended loss. The court deferred to the Sentencing Guidelines' commentary, which defines "loss" as the greater of actual or intended loss. The court found that the district court correctly included the full intended loss in Boler's sentencing calculation. Therefore, the Fourth Circuit affirmed the district court's judgment, upholding Boler's 30-month sentence. View "United States v. Boler" on Justia Law

Richard Plezia, a Houston-based personal injury attorney, was charged with conspiracy to defraud the United States, making false statements, and falsifying records in a federal investigation. The charges stemmed from allegations that Plezia conspired with other attorneys and case runners to unlawfully reduce the federal income taxes owed by Jeffrey Stern. The scheme involved funneling illegal payments through Plezia to case runner Marcus Esquivel, which were then falsely reported as attorney referral fees.The United States District Court for the Southern District of Texas held a fifteen-day jury trial, where Plezia was convicted on all counts. Plezia challenged the sufficiency of the evidence, the equitable tolling of the statute of limitations for one count, and the admission of certain witness testimonies. The district court denied his motions for acquittal and a new trial, and sentenced him to six months and one day in prison, followed by two years of supervised release.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court agreed with Plezia that the statute of limitations for the false statements charge was not subject to equitable tolling and vacated his conviction on that count, remanding with instructions to dismiss it with prejudice. However, the court affirmed the remaining convictions, finding sufficient evidence to support the jury's verdict on the conspiracy and falsification charges. The court also held that any error in admitting witness testimonies was harmless given the overwhelming evidence of guilt. View "United States v. Plezia" on Justia Law

Three owners and officers of a currency-exchange business, Sterling Currency Group, were involved in a scheme to defraud retail investors by promoting false rumors about the imminent revaluation of the Iraqi dinar. They also concealed their payments to advertise on dinar-discussion forums and falsely claimed plans to open currency-exchange kiosks. Two of the defendants lied to federal agents about their activities. The business sold over $600 million worth of currencies, and many investors lost significant amounts of money due to the fraudulent inducements.The United States District Court for the Northern District of Georgia conducted a five-week trial, after which the jury convicted the defendants of conspiracy to commit mail and wire fraud, mail fraud, wire fraud, and making false statements. The district court sentenced the defendants to prison terms ranging from 84 to 180 months. The defendants challenged the sufficiency of the evidence, jury instructions, evidentiary admissions, and one defendant's sentence.The United States Court of Appeals for the Eleventh Circuit reviewed the case and affirmed the convictions and the sentence of one defendant, except for the refusal to grant a downward departure, which was dismissed for lack of jurisdiction. The court held that the evidence was sufficient to support the fraud convictions, as the misrepresentations about the revaluation and the airport plan went to the core of the bargain with investors. The court also found that the district court properly instructed the jury and did not abuse its discretion in evidentiary rulings. The court upheld the sentencing enhancements applied by the district court, including those for sophisticated means, obstruction of justice, and substantial financial hardship. View "United States v. Bell" on Justia Law

The defendant was convicted on 12 counts related to fraudulently obtaining federal funds intended for COVID-19 relief. He appealed his convictions, arguing that the district court erred by reading the jury instructions only at the outset of the presentation of evidence and not again after the close of evidence.The United States District Court for the District of Kansas had indicted the defendant on 19 counts, including bank fraud, false statements to a bank and the Small Business Administration, wire fraud, and money laundering. The indictment alleged that he obtained COVID-19 relief funds by making false representations regarding the workforce of three entities. During a pretrial conference, the district court decided to read the jury instructions before the presentation of evidence and provide jurors with individual copies of the instructions. The trial proceeded, and the court read all 40 primary instructions to the jury before any evidence was introduced. After the close of evidence, the court denied the defense's motion to reread eight specific instructions, allowing defense counsel to refer to them during closing arguments instead.The United States Court of Appeals for the Tenth Circuit reviewed the case. The court concluded that the defendant did not preserve his argument that Federal Rule of Criminal Procedure 30(c) required the court to instruct the jury after the close of evidence. The court applied plain-error review and determined that the defendant could not prevail because he did not show that any error was plain or that it affected the outcome of the proceeding. The court noted that the district court had provided jurors with written copies of the instructions and allowed defense counsel to refer to them during closing arguments. The Tenth Circuit affirmed the judgment of the district court. View "United States v. Capps" on Justia Law

Manish Kumar was involved in a scheme to smuggle misbranded prescription drugs and controlled substances into the United States from March 2015 to August 2019. Kumar, an Indian national, was a partner in Mihu, a New Delhi-based company that sold generic versions of drugs like Viagra, Cialis, Adderall, and tramadol without FDA approval or proper prescriptions. Kumar managed call centers in India where representatives made false statements to U.S. customers, claiming the drugs were FDA-approved and that no prescriptions were needed. Kumar was arrested in August 2019 on unrelated identity theft charges and later charged in Massachusetts with conspiracy to smuggle drugs, distribute controlled substances, and make false statements. He pled guilty to all charges in October 2022.The United States District Court for the District of Massachusetts sentenced Kumar to 87 months in prison. The court applied a fraud cross-reference in the Sentencing Guidelines and accepted the government's estimate of the loss amount involved in the offense, which was approximately $3.8 million. Kumar objected to both the application of the fraud cross-reference and the loss amount calculation, arguing that the evidence was insufficient.The United States Court of Appeals for the First Circuit reviewed the case. The court held that the fraud cross-reference was correctly applied because the false statements made by call center representatives were within the scope of Kumar's conspiracy and were made in furtherance of the criminal activity. The court also found that the sentencing court did not clearly err in its loss amount calculation, as it relied on detailed government estimates and supporting data. The First Circuit affirmed Kumar's 87-month sentence. View "United States v. Kumar" on Justia Law

The case involves a dispute between Commodities & Minerals Enterprise, Ltd. (CME) and CVG Ferrominera Orinoco, C.A. (FMO). CME sought to confirm a New York Convention arbitration award of $187.9 million against FMO. FMO opposed the confirmation, alleging that CME procured the underlying contract through fraud, bribery, and corruption, arguing that enforcing the award would violate U.S. public policy. The district court confirmed the award, ruling that FMO was barred from challenging the confirmation on public policy grounds because it failed to seek vacatur within the three-month time limit prescribed by the Federal Arbitration Act (FAA).The United States District Court for the Southern District of Florida initially reviewed the case. CME moved to confirm the arbitration award in December 2019. FMO opposed the confirmation nearly two years later, citing public policy concerns. The district court granted CME’s motion, explaining that FMO was barred from opposing confirmation on public policy grounds due to its failure to seek vacatur within the FAA’s three-month time limit.The United States Court of Appeals for the Eleventh Circuit reviewed the case. The court held that, based on its recent en banc decision in Corporación AIC, SA v. Hidroélectrica Santa Rita S.A., FMO should have been allowed to assert its public policy defense in opposition to confirmation. The court clarified that the grounds for vacating a New York Convention arbitration award are those set forth in U.S. domestic law, specifically Chapter 1 of the FAA, which does not recognize public policy as a ground for vacatur. However, the court affirmed the district court’s confirmation of the award, concluding that FMO’s public policy defense failed on the merits because it attacked the underlying contract, not the award itself. View "Commodities & Minerals Enterprise, Ltd. v. CVG Ferrominera Orinoco C.A." on Justia Law

Nathan Reardon, the appellant, pleaded guilty in 2022 to five counts of bank fraud related to fraudulent loan applications for pandemic-relief funds. He was sentenced to five concurrent twenty-month terms of imprisonment followed by three years of supervised release. The First Circuit previously vacated a special condition of his supervised release that banned him from self-employment due to inadequate explanation. On remand, the district court provided a fuller explanation and retained the condition. Reardon’s supervised release began on July 7, 2023, but within six weeks, the probation office filed a petition to revoke it, citing multiple violations, including failure to provide financial information, engaging in self-employment, and incurring new credit charges without approval.The United States District Court for the District of Maine held a preliminary hearing and found probable cause for the violations, leading to Reardon's detention. At the revocation hearing, Reardon did not contest the violations. The district court calculated a guideline sentencing range of three to nine months and ultimately imposed a nine-month term of imprisonment followed by twenty-five months of supervised release. The court noted the immediacy and flagrancy of Reardon’s violations and his disregard for the conditions of his release.The United States Court of Appeals for the First Circuit reviewed the case and affirmed the district court’s decision. The appellate court found no procedural error, noting that the district court had adequately considered the relevant statutory sentencing factors and addressed the mitigating factors presented by Reardon. The court also held that the nine-month sentence was substantively reasonable given the nature and circumstances of Reardon’s violations. View "United States v. Reardon" on Justia Law