Justia White Collar Crime Opinion Summaries

In 2015-2019, Wood defrauded homeowners facing foreclosure, convincing them to "refinance" and make their mortgage payments to him. Wood convinced some clients to stall foreclosures by manipulating the bankruptcy process. A Wisconsin bankruptcy judge enjoined Wood from continuing his scheme. Wood disregarded that order, defrauding 73 victims of almost $400,000. Many were evicted from their homes. Wood was charged with six counts of wire fraud, 18 U.S.C. 1343; one count of mail fraud, section 1341; one count of bankruptcy fraud, section 157; and criminal contempt of court, section 401(3). Wood violated his pretrial supervision by contacting his victims and soliciting money for mortgage services. Wood pled guilty to wire fraud and bankruptcy fraud; his PSR recommended a sentence of 72 months, based on a Guidelines range of 70-87 months. The court expressed skepticism about Wood’s allocution, citing Wood’s previous fraudulent crimes, his “heartlessness,” and the profound, non-monetary harm to his victims and legitimate creditors. Concluding that the Guidelines inadequately accounted for Wood’s behavior, the court observed Wood’s “crime stands apart" and that the closest comparator was a fraudulent scheme in another case (Iriri). The court observed that Iriri was induced to commit fraud, whereas Wood committed his crime completely unprompted.The Seventh Circuit affirmed Woods' 144-month sentence. Wood’s sentence turned on the unique characteristics and qualities of his crime. That is not an abuse of discretion. The court’s reference to Iriri “is so limited as to flirt with irrelevance.” View "United States v. Wood" on Justia Law

The Fifth Circuit affirmed defendants' convictions and sentences for multiple counts of health care fraud and conspiracy stemming from their involvement in a scheme to falsely certify that patients were eligible for home health or hospice services. The court concluded that sufficient evidence supports defendants' convictions for health care fraud and conspiracy to commit that fraud. The court rejected defendants' contention that the government offered no proof that they knew the patients were ineligible for home health and hospice, and that the government did not prove the ineligibility of the six patients whose claims were listed as the substantive fraud counts. Rather, the record shows that defendants were intimately involved with the fraud, and that the certifications for all six patients were either outright lies or based on fabricated medical records.The court also concluded that the district court properly calculated the loss amount when sentencing defendants. In this case, the district court found that defendants' fraud was pervasive and thus treated the entire amount that they billed to Medicare as the intended loss, enhancing defendants' offense levels by 24 points, resulting in an advisory Sentencing Guidelines range of life in prison pursuant to USSG 2B1.1. View "United States v. Mesquias" on Justia Law

Zheng became a permanent U.S. resident in 2004. He was a professor at the University of Southern California, Pennsylvania State University, and The Ohio State University and performed research under National Institute of Health (NIH) grants. Zheng had financial and information-sharing ties to Chinese organizations and received grants from the National Natural Science Foundation of China. Including that information on NIH applications would have derailed Zheng’s funding prospects, so Zheng clouded his ties to China. By 2019, the FBI began investigating Zheng. Zheng left for China but federal agents apprehended him in Anchorage.Zheng pleaded guilty to making false statements, 18 U.S.C. 1001(a)(3). Rejecting an argument that the research Zheng completed offset the amount of money lost, the district court calculated a Guidelines range of 37-46 months and sentenced Zheng to 37 months. On appeal, Zheng argued that his counsel was ineffective by not seeking a downward variance based on Zheng’s immigration status as a deportable alien, which would have an impact on the execution of his sentence. The Sixth Circuit dismissed, noting that the record was inadequate to establish ineffective assistance for the first time on direct appeal. Nothing in the record shows counsel’s reasons for making certain strategic decisions or why he advanced one argument over another. View "United States v. Zheng" on Justia Law

Defendants Bramwell, Howard, and Stone were convicted of crimes involving the millions of dollars that Tricare paid Howard for filling compounded cream prescriptions for patients. Bramwell wrote the vast majority of those prescriptions, and Stone helped in recruiting some of the patients for whom Howard filled prescriptions. Defendants were convicted for paying or receiving kickbacks and conspiring to do it. Howard was also convicted of laundering some of the proceeds.The Eleventh Circuit concluded that the evidence was sufficient to support defendants' convictions. In this case, the evidence was sufficient to prove that Howard paid, and Bramwell received kickbacks and that they conspired to do so; that Howard paid, and Stone received, kickbacks and that they conspired to do so; and that Howard laundered money. The court also concluded that there was no constructive amendment to the indictment. However, the court concluded that Bramwell's sentence of probation is substantively unreasonable where the district court clearly erred in weighing the 18 U.S.C. 3553(a) factors. Accordingly, the court vacated Bramwell's sentence and remanded for further proceedings. The court otherwise affirmed the judgments. View "United States v. Howard" on Justia Law

Allinson was convicted of federal programs bribery, 18 U.S.C. 666(a)(2), and conspiracy, 18 U.S.C. 371, in connection with a pay-to-play scheme involving Pawlowski, the former Mayor of Allentown, Pennsylvania.The Third Circuit affirmed. Sufficient evidence showed the parties’ plan to steer a Parking Authority contract to Allinson’s law firm in exchange for campaign contributions to support Allinson’s bribery conviction; it is an “official act” for a public official to use his power to influence the awarding of government contracts, even if the official lacks final decision-making power. The court rejected Allinson’s argument that the indictment, which alleged a single conspiracy among Allinson and others, impermissibly varied from the evidence at trial that, he claimed, proved only multiple, unrelated conspiracies. The charged conspiracy included over 10 alleged co-conspirators and seven distinct sub-schemes, only one of which involved Allinson but the government’s efforts at trial were reasonably calculated to prevent guilt transference. No constructive amendment of the indictment occurred. The prosecution’s statement in closing arguments that “Bribery happens with a wink and a nod and sometimes a few words, an understanding between two people,” was not improper. Allinson failed to show “clear and substantial prejudice” resulting from the joint trial. View "United States v. Allinson" on Justia Law

National Western Life Insurance Company (NWL) appealed after it was held liable for negligence and elder abuse arising from an NWL annuity sold to Barney Williams by Victor Pantaleoni. In 2016, Williams contacted Pantaleoni to revise a living trust after the death of Williams’ wife, but Pantaleoni sold him a $100,000 NWL annuity. When Williams returned the annuity to NWL during a 30-day “free look” period, Pantaleoni wrote a letter over Williams’ signature for NWL to reissue a new annuity. In 2017, when Williams cancelled the second annuity, NWL charged a $14,949.91 surrender penalty. The jury awarded Williams damages against NWL, including punitive damages totaling almost $3 million. In the Court of Appeal's prior opinion reversing the judgment, the Court concluded Pantaleoni was an independent agent who sold annuities for multiple insurance companies and had no authority to bind NWL. The Court determined that Pantaleoni was an agent for Williams, not NWL. The California Supreme Court vacated that decision and remanded, asking the appeals court to reconsider its finding that Pantaleoni did not have an agency relationship with National Western Life Insurance Company in light of Insurance Code sections 32, 101, 1662, 1704 and 1704.5 and O’Riordan v. Federal Kemper Life Assurance Company, 36 Cal.4th 281, 288 (2005). Upon remand, the Court of Appeal affirmed the judgment finding NWL liable for negligence and financial elder abuse. However, punitive damages assessed against NWL were reversed. The Court found no abuse of discretion in the trial court’s calculation of the attorney fee award, but remanded the case for the court to reconsider the award in light of the reversal of punitive damages. View "Williams v. Nat. W. Life Ins. Co." on Justia Law

Pawlowski, the former mayor of Allentown, Pennsylvania, was convicted of federal programs bribery, 18 U.S.C. 666; Travel Act bribery, 18 U.S.C. 1952; attempted Hobbs Act extortion, 18 U.S.C. 1001; wire and mail fraud, honest services fraud, making false statements to the FBI, and conspiracy. The charges stemmed from a scheme in which Pawlowski steered city contracts and provided other favors in exchange for campaign contributions. The district court imposed a 180-month sentence.The Third Circuit affirmed. There was sufficient evidence for a reasonable jury to find “quid pro quo” to support the bribery convictions. Any error caused by Pawlowski's inability to recross-examine a government witness was harmless beyond a reasonable doubt. Pawlowski’s sentence is procedurally and substantively reasonable. The case against Pawlowski was strong. The evidence showed a man eager to influence and be influenced if it would help him fund his political campaigns. View "United States v. Pawlowski" on Justia Law

The First Circuit affirmed Appellant's plea of guilty to one count of investment adviser fraud, four counts of wire fraud, and one count of aggravated identity theft, holding that there was no prejudicial error in the proceedings below.On appeal, Appellant argued that her plea was not knowing and voluntary, that the evidence was insufficient to convict her of wire fraud and aggravated identity theft, that several sentencing enhancements were improperly applied, and that her counsel was ineffective. The First Circuit affirmed, holding (1) there was no error in the district court's acceptance of Appellant's guilty plea; (2) Appellant's conduct clearly satisfied the statutory requirements for wire fraud and aggravated identity theft; and (3) Appellant's challenges to several aspects of her sentence were unavailing. View "United States v. Kitts" on Justia Law

Doctors Hills, Alqsous, Elrawy, and Al-Madani were convicted of offenses connected to their employment at a publicly-owned Cuyahoga County hospital, MetroHealth, which receives federal funds. Hills solicited and received bribes from Alqsous, Al-Madani, and Elrawy in exchange for favorable treatment with respect to their employment. Alqsous, Al-Madani, and Sayegh solicited and/or accepted bribes from applicants to MetroHealth’s dental residency program. Hills and an unindicted business partner operated OHE to provide training for dentists with discipline or performance issues. Some of OHE’s business was accomplished using MetroHealth personnel, equipment, or facilities without permission or compensation. Hills received and Alqsous and Al-Madani offered or paid kickbacks for referrals to private clinics. There were recordings of discussions concerning warning a resident to stay quiet, preparing 1099 forms to hide the kickbacks, and telling a grand jury witness to “forget” seeing envelopes of cash. Hills also arranged for his attorney to receive extensive dental work without charge and assigned MetroHealth residents to work at a private clinic.The district court imposed aggregate terms of imprisonment of: 188 months (Hills), 151 months (Alqsous), and 121 months (Al-Madani). They were also ordered to pay restitution, some jointly and severally, in amounts approaching $1 million. The Sixth Circuit affirmed, rejecting challenges to the sentences, the loss calculation, the sufficiency of the evidence, the jury instructions, the denial of a motion to suppress, and other procedural rulings. View "United States v. Alqsous" on Justia Law

David Efron and Efron Dorado SE (collectively, "Efron") appealed a civil contempt order entered by the district court for violating its preliminary injunction. This litigation began when the Federal Trade Commission and the Utah Division of Consumer Protection filed a complaint in the federal district court against Zurixx, LLC and related entities. The complaint alleged Zurixx marketed and sold deceptive real-estate investment products. The district court entered a stipulated preliminary injunction, enjoining Zurixx from continuing its business activities and freezing its assets wherever located. The injunction also directed any person or business with actual knowledge of the injunction to preserve any of Zurixx’s assets in its possession, and it prohibited any such person or business from transferring those assets. A week later, the receiver filed a copy of the complaint and injunction in federal court in Puerto Rico, where Zurixx leased office space from Efron. The office contained Zurixx’s computers, furniture, and other assets. The receiver also notified Efron of the receivership and gave him actual notice of the injunction. Although Efron at first allowed the receiver access to the office to recover computers and files, he later denied access to remove the remaining assets and initiated eviction proceedings against Zurixx in a Puerto Rico court. Given these events, the receiver moved the district court in Utah for an order holding Efron in contempt of court for violating the injunction. In response, Efron claimed the assets belonged to him under his lease agreement with Zurixx. The Tenth Circuit Court of Appeal determined the contempt order was a non-final decision. It therefore dismissed this appeal for lack of jurisdiction. View "Federal Trade Commission, et al. v. Zurixx, et al." on Justia Law