Justia White Collar Crime Opinion Summaries

As CEO of the Chicago Public Schools, Byrd-Bennett worked behind the scenes to assure that companies headed by Solomon and Vranas received lucrative contracts. In exchange, Solomon and Vranas agreed that they would pay Byrd-Bennett a percentage of the revenue generated by those contracts when she came to work for them at the end of her tenure with CPS. After the fraudulent scheme was exposed, each participant pleaded guilty to committing wire fraud, 18 U.S.C. 1343 and 1346. Solomon was sentenced to 84 months’ imprisonment, 30 months more than Byrd-Bennett received. Solomon argued that the district court erred by incorporating the value of a contract unrelated to the criminal agreement into his advisory sentencing guidelines calculation, resulting in an offense score that was four levels higher than Solomon believes it should have been and claimed that the disparity between Byrd-Bennett’s sentence and his sentence is unwarranted, making his sentence substantively unreasonable. The Seventh Circuit affirmed. The record supports the court’s decision to include the contested contract in the offense level calculation, and dissimilar cooperation is a reasonable basis for a sentencing disparity. View "United States v. Solomon" on Justia Law

As CEO of the Chicago Public Schools, Byrd-Bennett worked behind the scenes to assure that companies headed by Solomon and Vranas received lucrative contracts. In exchange, Solomon and Vranas agreed that they would pay Byrd-Bennett a percentage of the revenue generated by those contracts when she came to work for them at the end of her tenure with CPS. After the fraudulent scheme was exposed, each participant pleaded guilty to committing wire fraud, 18 U.S.C. 1343 and 1346. Solomon was sentenced to 84 months’ imprisonment, 30 months more than Byrd-Bennett received. Solomon argued that the district court erred by incorporating the value of a contract unrelated to the criminal agreement into his advisory sentencing guidelines calculation, resulting in an offense score that was four levels higher than Solomon believes it should have been and claimed that the disparity between Byrd-Bennett’s sentence and his sentence is unwarranted, making his sentence substantively unreasonable. The Seventh Circuit affirmed. The record supports the court’s decision to include the contested contract in the offense level calculation, and dissimilar cooperation is a reasonable basis for a sentencing disparity. View "United States v. Solomon" on Justia Law

The First Circuit affirmed Defendants’ convictions for wire fraud, embezzlement of public money, and conspiracy, holding that there was no merit in any of Defendants’ claims of error.Defendants, members of the United States Army National Guard in Puerto Rico, were convicted for carrying out a fraudulent scheme to obtain recruitment bonuses. The First Circuit affirmed, holding (1) the district court did not err in denying Defendants’ pretrial motion to dismiss the indictment as untimely; (2) the court’s rulings as to military dress in the courtroom were not an abuse of discretion; (3) the evidence was sufficient to support the convictions; (4) Defendants’ evidentiary challenges failed; and (5) one of the Defendant’s challenge to his sentence was unavailing. View "United States v. Melendez-Gonzalez" on Justia Law

The Second Circuit denied a petition for a writ of error coram nobis where petitioner sought vacatur of his prior conviction and sentence for conspiracy to commit mail and wire fraud, as well as 21 counts of mail fraud, based on his conduct in the rare-coins business. Petitioner contended that newly discovered evidence would undermine the reliability of expert testimony submitted against him at trial. The court held that, given the strength of evidence of defendant's fraudulent activity in support of his sale of coins, the issue he raised as to the government expert's method of valuation did not show circumstances compelling grant of the writ to achieve justice. View "Du Purton v. United States" on Justia Law

Schock resigned from Congress in 2015, after disclosures about trips he took at public expense, the expense of his elaborate office furnishings, and how he had applied campaign funds. Schock was charged with mail and wire fraud, theft of government funds, making false statements to Congress and the Federal Elections Commission, and filing false tax returns. Schock moved to dismiss the indictment, arguing that the charges are inconsistent with the Constitution’s Speech or Debate Clause and with the House of Representatives’ constitutional authority to determine the rules of its proceedings. The Seventh Circuit affirmed the denial of the motion. The indictment arises out of applications for reimbursements, which are not speeches, debates, or any other part of the legislative process. Submitting a claim under established rules differs from the formulation of those rules. The foundation for Schock’s rule-making” argument—the proposition that if Body A has sole power to make a rule, then Body A has sole power to interpret that rule—does not represent established doctrine. “ Judges regularly interpret, apply, and occasionally nullify rules promulgated by the President or another part of the Executive Branch, as well as statutes enacted by the Legislative Branch; why would reimbursement rules be different?” View "United States v. Schock" on Justia Law

Lagos was convicted of using a company he controlled to defraud a lender of millions of dollars. After Lagos’ company went bankrupt, the lender conducted a private investigation and participated as a party in the company’s bankruptcy proceedings, spending nearly $5 million in legal, accounting, and consulting fees. When Lagos pleaded guilty to federal wire fraud charges, the court ordered him to pay the lender restitution for those fees. The Fifth Circuit affirmed, citing the Mandatory Victims Restitution Act of 1996, which requires defendants convicted of certain federal offenses, including wire fraud, to “reimburse the victim for lost income and necessary child care, transportation, and other expenses incurred during participation in the investigation or prosecution of the offense or attendance at proceedings related to the offense,” 18 U.S.C. 3663A(b)(4). The Supreme Court, acting unanimously, reversed. The words “investigation” and “proceedings” are limited to government investigations and criminal proceedings and do not include private investigations and civil or bankruptcy proceedings. A broader reading would require courts to resolve difficult, fact-intensive disputes about whether particular expenses “incurred during” participation in a private investigation were actually “necessary,” and about whether proceedings such as a licensing proceeding or a Consumer Products Safety Commission hearing were sufficiently “related to the offense.” The Court acknowledged that its interpretation means that some victims will not receive restitution for all of their losses, but reasoned that is consistent with the Act’s enumeration of limited categories. View "Lagos v. United States" on Justia Law

As a school principal, Buendia took kickbacks from Shy. Detroit Public Schools (DPS) paid Shy for supplies he never delivered. Some of the money came from the federal government. The FBI searched Shy’s home and found a ledger of kickbacks Shy owed Buendia. Buendia was convicted of federal-programs bribery, 18 U.S.C. 666(a)(1)(B), and sentenced to 24 months’ imprisonment. The Sixth Circuit affirmed, rejecting her argument that the district court violated her constitutional right to present a complete defense when it excluded evidence of her kickback expenditures and the alleged receipts of expenditures for school purposes. The right to present a complete defense yields to reasonable evidentiary restrictions. The court correctly excluded as irrelevant evidence of how Buendia spent the kickback money and correctly excluded the receipts of school expenditures as hearsay. Regardless of how Buendia eventually spent the money, she “corruptly solicit[ed]” it because, by awarding contracts to Shy in exchange for kickbacks, she subverted the normal bidding process in a manner inconsistent with her duty to obtain goods and services for her school at the best value. Nor did the government open the door" by introducing testimony that Buendia bought massages using a gift card from Shy to show that she accepted kickbacks. View "United States v. Buendia" on Justia Law

As a school principal, Buendia took kickbacks from Shy. Detroit Public Schools (DPS) paid Shy for supplies he never delivered. Some of the money came from the federal government. The FBI searched Shy’s home and found a ledger of kickbacks Shy owed Buendia. Buendia was convicted of federal-programs bribery, 18 U.S.C. 666(a)(1)(B), and sentenced to 24 months’ imprisonment. The Sixth Circuit affirmed, rejecting her argument that the district court violated her constitutional right to present a complete defense when it excluded evidence of her kickback expenditures and the alleged receipts of expenditures for school purposes. The right to present a complete defense yields to reasonable evidentiary restrictions. The court correctly excluded as irrelevant evidence of how Buendia spent the kickback money and correctly excluded the receipts of school expenditures as hearsay. Regardless of how Buendia eventually spent the money, she “corruptly solicit[ed]” it because, by awarding contracts to Shy in exchange for kickbacks, she subverted the normal bidding process in a manner inconsistent with her duty to obtain goods and services for her school at the best value. Nor did the government open the door" by introducing testimony that Buendia bought massages using a gift card from Shy to show that she accepted kickbacks. View "United States v. Buendia" on Justia Law

The Eighth Circuit affirmed Defendants Benton, Tate, and Kesari's conviction of causing false records, causing false campaign expenditure reports, engaging in a false statements scheme; and conspiring to commit these offenses. Benton served as campaign chairman in Ron Paul's 2012 presidential campaign, Tate served as campaign manager, and Kesari served as deputy campaign manager. The court held that there was sufficient evidence to convict defendants; the jury was entitled to infer from the facts that Benton and Tate had knowingly and willfully caused Commission reports to be filed which falsely reported the payments to a senator for his endorsement as payments to ICT for audio/visual services; the court rejected defendants' arguments that the reporting requirements were so vague or confusing that the court should either apply the rule of lenity or determine that criminal enforcement was not appropriate in this case; Kesari's counts were not multiplicitious; the district court did not abuse its discretion in denying Tate's motion to sever his trial from his codefendants; and the court rejected challenges to the jury instructions, evidentiary challenges, and a Jencks Act claim. View "United States v. Benton" on Justia Law

The Second Circuit vacated defendant's conviction for securities fraud. The court held that although defendant's misstatements could be found by a jury to be material, the district court materially erred in admitting evidence that the counter-party representative in the sole transaction underlying the count of conviction mistakenly believed that defendant was his agent. Therefore, the evidence was prejudicial and the court could not conclude with fair assurance that the jury would have convicted defendant absent such evidence. Accordingly, the court remanded the judgment of conviction, ordering defendant be released on appropriate bond pending further proceedings. View "United States v. Litvak" on Justia Law