Justia White Collar Crime Opinion Summaries

After defendant, representing himself, pleaded guilty to one charge of bank fraud and one charge of money laundering, he appealed his convictions and the district court's orders directing him to reimburse the United States Treasury.The Eleventh Circuit held that defendant waived his right to counsel knowingly, intelligently, and voluntarily. The court rejected defendant's argument that 18 U.S.C. 3006A(f) did not authorize the district court to seize money from his jail account, holding that the district court followed the proper procedures under section 3006A before directing that defendant's money be paid from the court registry to the Treasury. The court also held that it lacked jurisdiction to consider defendant's argument that the district court could not use this money to reimburse the Treasury for his counsel's fees and expenses. Accordingly, the court affirmed in part and dismissed in part. View "United States v. Owen" on Justia Law

De Etta Wester-Gravelle worked as a certified nursing assistant for a company called Interim Healthcare. During the time period in question, the company assigned her to care for a patient, W.M., who had suffered a stroke and needed assistance with tasks like bathing. W.M.’s partner, E.G., was also in poor health and could not perform such tasks for W.M. Interim Healthcare assigned Wester-Gravelle to visit W.M. five times per week for two hours each day. At the conclusion of each shift, Wester-Gravelle was required to have either W.M. or E.G. sign Wester-Gravelle’s shift chart to verify that she had been there. The charts would then serve as a record pursuant to which Interim Healthcare would pay Wester-Gravelle for her work. Wester-Gravelle had been assigned to work with W.M. for several months when, in late July or early August of 2015, her supervisor, Lisa Conley, made a routine visit to W.M.’s house during a time when Wester-Gravelle had been scheduled to be there. When Conley arrived, however, Wester-Gravelle was not there. Conley performed routine tasks of her own that day, and in the course of her conversation with W.M. and E.G., they said that they had not seen Wester-Gravelle in several weeks. After an investigation, the matter was transferred to the Colorado Attorney General, who prosecuted Wester-Gravelle on one count of forgery. The issue this case presented for the Colorado Supreme Court's review was whether the court of appeals erred in concluding the prosecution had an obligation to elect the specific document or documents on which it would rely for conviction or, alternatively, that Wester-Gravelle was entitled to a "modified unanimity instruction" requiring the jurors to agree unanimously that she had committed the same underlying act of forgery or that she had committed all of the underlying acts. The Supreme Court concluded the trial court did not plainly err when it did not, sua sponte, require an election or give a modified unanimity instruction because any error was neither obvious nor substantial. The court of appeals' judgment was reversed and the matter remanded for consideration of Wester-Gravelle's remaining contentions on appeal. View "Colorado v. Wester-Gravelle" on Justia Law

The Second Circuit affirmed Defendants Napout and Marin's convictions for multiple counts of conspiracy to commit honest services wire fraud. Defendants were former officials of the global soccer organization Fédération Internationale de Football Association (FIFA).The court held that defendants' convictions rest upon permissible domestic applications of the wire fraud statute, 18 U.S.C. 1343. Furthermore, the court cannot conclude in light of binding precedent that the district court committed plain error with respect to the issue of whether the honest services wire fraud statute, 18 U.S.C. 1346, is unconstitutionally vague as applied to defendants. The court also held that the evidence presented at trial was sufficient to affirm the district court's judgment of conviction; and that the challenged evidentiary rulings of the district court were not error. Finally, the court held that defendants' remaining arguments are without merit. View "United States v. Napout" on Justia Law

The Second Circuit certified two questions to the New York Court of Appeals: 1) Whether a stock conversion option that permits a lender, in its sole discretion, to convert any outstanding balance to shares of stock at a fixed discount should be treated as interest for the purpose of determining whether the transaction violates N.Y. Penal Law 190.40, the criminal usury law. 2) If the interest charged on a loan is determined to be criminally usurious under N.Y. Penal Law 190.40, whether the contract is void ab initio pursuant to N.Y. Gen. Oblig. Law 5-511. View "Adar Bays, LLC v. GeneSYS ID, Inc." on Justia Law

After a bench trial, a district court decided that Defendants RaPower-3, LLC, International Automated Systems, Inc. (IAS), LTB1, LLC, Neldon Johnson, and R. Gregory Shepard had promoted an unlawful tax scheme. Defendants’ scheme was based on a supposed project to utilize a purportedly new, commercially viable way of converting solar radiation into electricity. There was no “third party verification of any of Johnson’s designs.” Nor did he have any “record that his system ha[d] produced energy,” and “[t]here [were] no witnesses to his production of a useful product from solar energy,” a fact that he attributed to his decision to do his testing “on the weekends when no one was around because he didn’t want people to see what he was doing.” Defendants never secured a purchase agreement for the sale of electricity to an end user. The district court found that Johnson’s purported solar energy technology was not a commercial-grade solar energy system that converts sunlight into electrical power or other useful energy. Despite this, Defendants’ project generated tens of millions of dollars between 2005 and 2018. Beginning in 2006, buyers would purchase lenses from IAS or RaPower-3 for a down payment of about one-third of the purchase price. The entity would “finance” the remaining two-thirds of the purchase price with a zero- or nominal- interest, nonrecourse loan. No further payments would be due from the customer until the system had been generating revenue from electricity sales for five years. The customer would agree to lease the lens back to LTB1 for installation at a “Power Plant”; but LTB1 would not be obligated to make any rental payments until the system had begun generating revenue. The district court found that each plastic sheet for the lenses was sold to Defendants for between $52 and $70, yet the purchase price of a lens was between $3,500 and $30,000. Although Defendants sold between 45,000 and 50,000 lenses, fewer than 5% of them were ever installed. Customers were told that buying a lens would have very favorable income-tax consequences. Johnson and Shepard sold the lenses by advertising that customers could “zero out” federal income-tax liability by taking advantage of depreciation deductions and solar-energy tax credits. To remedy Defendants' misconduct, the district court enjoined Defendants from continuing to promote their scheme and ordered disgorgement of their gross receipts from the scheme. Defendants appealed. Finding no reversible error, the Tenth Circuit affirmed the district court. View "United States v. RaPower-3" on Justia Law

The Second Circuit affirmed defendants' convictions on fourteen counts including collection of unlawful usurious debt, and conspiracy to do so, wire fraud, and money laundering, arising out of defendants' operation of a payday lending business. The court held that, even assuming that the charge with respect to Counts 2-4 was erroneous, the error did not affect the verdict, and thus defendants have not satisfied the requirements of plain error; the jury necessarily found in rendering a guilty verdict on Count 1, for which an undisputedly correct willfulness instruction was given as to the conspiracy element, that defendants were aware of the unlawfulness of their making loans with interest rates that exceeded the limits permitted by the usury laws; and the evidence of defendants' willfulness was overwhelming.The court also held that defendants' other contentions are without merit. Finally, the court found that the district court did not abuse its discretion in denying Defendant Tucker's application to stay the execution of the forfeiture order entered against him following his conviction. View "United States v. Tucker" on Justia Law

Petitioner John Halaseh petitioned the Colorado Supreme Court to review a court of appeals' remand order to his underlying appeal, which directed the district court to enter four convictions for class 4 felony theft in place of the single conviction of class 3 felony theft that was reflected in the charge and jury verdict. The appellate court reversed the class 3 felony on grounds that when the statutory authorization for aggregating separate acts of theft was properly applied, there was insufficient evidence to support a single conviction for theft of $20,000 or more. It also found, however, that there was sufficient evidence to support four separate convictions for aggregated thefts with values qualifying as class 4 felonies, and that substituting these four class 4 felony convictions for the vacated class 3 felony conviction was necessary to fulfill what it understood to be its obligation to maximize the effect of the jury’s verdict. The Supreme Court disapproved of the appellate court's judgment, finding no theft offense required the aggregation of two or more separate instances of theft, whether that aggregation were to be based on commission within a period of six months or on commission as a single course of conduct, was a lesser included offense of the class 3 felony of which Halaseh was actually charged and convicted. Further, no such offense was implicitly found by the jury, and therefore none could be entered in lieu of the reversed conviction without depriving the defendant of his right to a jury trial. The matter was remanded for further proceedings. View "Halaseh v. Colorado" on Justia Law

InComm Financial Services issued pre-paid debit and credit cards under the “Vanilla VISA” brand to cardholders who use the cards to buy goods and services. Global Payments, Inc. was a financial data payment processor. Thieves purchased Vanilla VISA pre-paid debit and credit cards and used them to buy goods and services. Then, using certain merchants that were not the merchants who originally sold the goods and services, the thieves initiated counterfeit electronic “reversal transactions” – basically requests for refunds on behalf of the cardholders. Upon receiving the reversal transaction data from the merchants, Global relayed the data to the VISA network. The VISA network then submitted the reversal transaction data to InComm. InComm received the data, posted the reversal transactions to the cardholder accounts, and then issued credits to the merchants who, in turn, passed the credits on to the thieves holding the Vanilla VISA cards. The thieves then converted those credits (in excess of $1.5 million made over 3,600 transactions) to their use. InComm did not allege that Global participated in creating the counterfeit reversal transactions. InComm asserted that Global was liable for the losses InComm suffered as a consequence of those transactions because Global negligently supplied to the VISA network the data created by the reversal merchants. In support of its claim, InComm asserted that Global, as a payment processor, “had a duty to exercise reasonable care in supplying the VISA Network and its participants with the transactions initiated by the Reversal Merchants.” The Court of Appeals reversed the trial court's order dismissing InComm's negligent misrepresentation claim against Global. Global's petition for certiorari review was granted, and the Georgia Supreme Court concluded that because the allegations of the complaint showed that Global merely transmitted data concerning debit and credit card transactions without representing that the transactions were legitimate, the Court of Appeals erred, and the Supreme Court therefore reversed. View "Global Payments, Inc. v. InComm Financial Services, Inc." on Justia Law

The Fifth Circuit affirmed defendant's convictions for eleven federal tax offenses. Defendant's conviction stemmed from his involvement in a conspiracy to commit tax fraud by filing false tax returns. The court held even if there was error in admitting summary testimony and charts, the error was harmless; the evidence was sufficient to sustain a conviction of every count; and there are no cumulative errors requiring reversal. View "United States v. Nicholson" on Justia Law

In two civil enforcement actions, the Court of Appeal affirmed the trial court's judgments against the trustee and the trust (collectively, "defendants") and the imposition of civil fines in excess of $6 million. The court held that the trial court's judgments did not violate the double jeopardy clause, because the allegations and evidence before the trial court were insufficient to show that the earlier criminal complaint was based on the same offenses as the civil actions. The court also held that the $5,967,500 in civil penalties were not unconstitutionally excessive under the four-part Bajakajian test. The court rejected defendants' contention that neither the trial court nor the city had the authority to require the trustee to evict the dispensaries. Finally, the court held that the medical-marijuana regulations were not void for vagueness, and the trial court did not err in holding the trustee personally liable for the civil penalties and other relief imposed against him in each of the judgments. View "People v. Braum" on Justia Law