Justia White Collar Crime Opinion Summaries

Dillard was the executive director of ACAP, an agency created by Alameda County and several cities. Daniels was the grants manager. The two married. The Agency was awarded a $500,000 Department of Health and Human Services AFI grant to fund programs for low-income people, who deposit money in an individual bank account, matched with federal AFI grant funds and equal nonfederal funds, which can be withdrawn for higher education, starting a business, or buying a house. Dillard and Daniels were charged with: Count I, conspiracy to commit grand theft by false pretenses in a letter to HHS “falsely attesting” that ACAP had more than $426,000 in non-federal match funds. Count 2: Grand theft by false pretenses by unlawfully taking grant funds exceeding $200,000. Count 3: Making a false account of public money. Count 4: Using public money for a purpose not authorized by law to fund Agency payroll and other expenses. Count 5: Dillard was charged with instructing employees to work on her residence at below-market rates and obtaining reimbursement for improper business expenses. Count 6: Preparing false documentary evidence regarding the residency status of Agency clients and a seminar agenda. They were convicted on Counts 2, 3, and 6. The court of appeal affirmed the Count 6 convictions but found the other convictions preempted by federal law. View "People v. Dillard" on Justia Law

The Guard Recruiting Assistance Program (G-RAP), designed to increase recruiting to the Air National Guard during the “War on Terror” was run by Docupak, a private corporation. Docupak selected and trained Recruiting Assistants (RAs) to find and direct potential airmen to full-time recruiters. The program paid a $1,000 pre-loaded gift card upon actual enlistment of a potential airman and another $1,000 upon the airman’s completion of training. The RAs were to identify individuals that were not already working with a full-time recruiter and were prohibited from splitting the payment with full-time recruiters. Osborne, a full-time recruiter, was accused of referring names of pre-existing recruits to RA Andolsek so that they could claim the incentive, with kickbacks to Osborne. Osborne was charged with aiding Andolsek in embezzling from the Department of Defense, 18 U.S.C. 641; 18 U.S.C. 2, which “caused” the Department to reimburse Docupak for $9,000. Andolsek pleaded guilty and testified against Osborne. Osborne argued that the funds were stolen from a private contractor, so they only violated Docupak’s internal policy, not a federal regulation. The Sixth Circuit reversed Osborne’s conviction. No reasonable jury could have found that the funds were something of value to the government beyond a reasonable doubt, given the evidence of control. The government did not retain a reversionary interest in the funds and imposed few restrictions. Docupak gave the government access to information, but the government did not retain the right to conduct audits. View "United States v. Osborne" on Justia Law

Porter, the mayor of Paintsville, Kentucky, steered business and contracts to companies owned by his co-defendant, Crace, and ensured payment of a fraudulent invoice to Crace’s company, in return for payments disguised as loans. Porter was charged with theft concerning programs receiving federal funds, 18 U.S.C. 666(a)(1)(A), and bribery concerning such programs, section 666(a)(1)(B) and was sentenced to 48 months of imprisonment. The Sixth Circuit affirmed, rejecting arguments that the conviction under section 666(a)(1)(B) was unsupported by sufficient evidence and that the admission of a witness’s prior statements to investigators and the admission of another witness’s deposition testimony violated his confrontation rights. A conviction under section 666(a)(1)(B) does not require evidence of a quid pro quo “in connection with” any “official act.” It is enough if a defendant corruptly solicits anything of value with the intent to be influenced or rewarded in connection with some transaction involving property or services worth $5000 or more. Testimony concerning prior statements to investigators did not violate Porter’s confrontation rights because they were not offered to prove the truth of the matter asserted. The government sufficiently demonstrated the unavailability of the deposition witness to testify at trial, so no Confrontation Clause violation occurred. View "United States v. Porter" on Justia Law

Henricks owned a towing business, an auto body shop, and a vehicle dealership, which he used to defraud insurance companies by filing fraudulent claims. Henricks’s wife, Catherine, worked at the companies sporadically and was an officer of two of them and a member of the other. She opened bank accounts and signed loan documents on behalf of the companies. Henricks pleaded guilty to mail fraud and immediately began to hide assets. He was sentenced to imprisonment and ordered to pay restitution of $1,306,608.72. Catherine filed for divorce and for bankruptcy. Catherine entered an appearance as an interested person in Henricks’s criminal case. The district court found that Henricks had defaulted on his restitution payments and that the divorce was a sham, then determined the parties’ interests in properties so that Henricks’s property could be directed toward restitution. The Seventh Circuit vacated. The court had jurisdiction under the Fair Debt Collection Procedures Act to decide the parties’ property interests in Henricks’s criminal case and did not violate Catherine’s due process rights. The court, however, improperly relied upon post‐judgment conduct instead of determining the parties’ property interests as of the date of the judgment lien. Whether the divorce was a sham was relevant to whether Henricks’s defaulted on restitution, but is irrelevant to the parties’ ownership interests on the judgment date. View "Henricks v. United States" on Justia Law

The Eighth Circuit affirmed defendant's conviction for bribing an Arkansas state official. The court held that the indictment adequately stated the offenses of honest-services and federal-funds bribery; because the indictment stated an offense, defendant's assertion that the government constructively amended the indictment also failed; defendant's objections to the jury instructions for honest-services bribery and federal-funds bribery were rejected; defendant's evidentiary challenges were rejected; and the district court's amount of loss calculation was not clearly erroneous. View "United States v. Suhl" on Justia Law

The Eighth Circuit affirmed defendant's conviction for bribing an Arkansas state official. The court held that the indictment adequately stated the offenses of honest-services and federal-funds bribery; because the indictment stated an offense, defendant's assertion that the government constructively amended the indictment also failed; defendant's objections to the jury instructions for honest-services bribery and federal-funds bribery were rejected; defendant's evidentiary challenges were rejected; and the district court's amount of loss calculation was not clearly erroneous. View "United States v. Suhl" on Justia Law

In 2004-2009, the IRS investigated Marinello’s tax activities. In 2012, Marinello was indicted for violating 26 U.S.C. 7212(a) (the Omnibus Clause), which forbids “corruptly or by force or threats of force . . . obstruct[ing] or imped[ing], or endeavor[ing] to obstruct or impede, the due administration” of the Internal Revenue Code. The judge instructed the jury that it must find that Marinello “corruptly” engaged in at least one specified activity, but was not told that it needed to find that Marinello knew he was under investigation and intended corruptly to interfere with that investigation. The Second Circuit affirmed his conviction. The Supreme Court reversed. To convict a defendant under the Omnibus Clause, the government must prove the defendant was aware of a pending tax-related proceeding, such as a particular investigation or audit, or could reasonably foresee that such a proceeding would commence. The verbs “obstruct” and “impede” require an object. The object in 7212(a) is the “due administration of [the Tax Code],” referring to discrete targeted administrative acts rather than every conceivable task involved in the Tax Code’s administration. In context, the Omnibus Clause serves as a “catchall” for the obstructive conduct the subsection sets forth, not for every violation that interferes with routine administrative procedures. A broader reading could result in a lack of fair warning. Just because a taxpayer knows that the IRS will review her tax return annually does not transform every Tax Code violation into an obstruction charge. View "Marinello v. United States" on Justia Law

Ballard obtained a $280,000 loan from SBH to construct the Stone Fence residence, then requested another $90,000 to finish the property. There was insufficient equity to cover that amount; SBH lent him $20,000. Ballard obtained construction loans on properties in Bradley. Grant was the SBH loan officer for all three properties. Ballard submitted required Sworn Contractor’s Statements and Owner’s Payment Authorizations to the Kankakee County Title Company (KCTC), identifying the material and labor costs supposedly associated with his work on the Bradley properties. Ballard obtained $188,000 for the Bradley properties, where no work was performed. Ballard used the funds to complete Stone Fence. An SBH employee discovered Ballard’s scheme. Ballard was charged with three counts of bank fraud, 18 U.S.C. 1344. At trial, Ballard admitted that he had misdirected funds; he argued a “good faith” defense that Grant and his supervisors knew and authorized Ballard’s acts and pressured him to complete Stone Fence. Ballard also claimed he did not read or sign the loan documents, implying that someone forged his signature. After Ballard was convicted, his attorney obtained a previously undisclosed audio recording of Grant, made during a prior, unrelated criminal investigation. The Seventh Circuit affirmed the district court in granting a new trial, finding the recording material. View "United States v. Ballard" on Justia Law

Ballard obtained a $280,000 loan from SBH to construct the Stone Fence residence, then requested another $90,000 to finish the property. There was insufficient equity to cover that amount; SBH lent him $20,000. Ballard obtained construction loans on properties in Bradley. Grant was the SBH loan officer for all three properties. Ballard submitted required Sworn Contractor’s Statements and Owner’s Payment Authorizations to the Kankakee County Title Company (KCTC), identifying the material and labor costs supposedly associated with his work on the Bradley properties. Ballard obtained $188,000 for the Bradley properties, where no work was performed. Ballard used the funds to complete Stone Fence. An SBH employee discovered Ballard’s scheme. Ballard was charged with three counts of bank fraud, 18 U.S.C. 1344. At trial, Ballard admitted that he had misdirected funds; he argued a “good faith” defense that Grant and his supervisors knew and authorized Ballard’s acts and pressured him to complete Stone Fence. Ballard also claimed he did not read or sign the loan documents, implying that someone forged his signature. After Ballard was convicted, his attorney obtained a previously undisclosed audio recording of Grant, made during a prior, unrelated criminal investigation. The Seventh Circuit affirmed the district court in granting a new trial, finding the recording material. View "United States v. Ballard" on Justia Law

The First Circuit affirmed Defendant’s convictions for tax evasion, unlawful distribution of controlled substances, and health-care fraud, holding that Defendant was fairly tried and lawfully convicted. The Court held (1) the district court did not err in admitting other-acts evidence regarding Defendant’s sexual abuse of his daughter; (2) any error in the other evidentiary rulings disputed by Defendant on appeal were harmless; (3) the district court did not err in refusing to sever the tax evasion counts; (4) Defendant’s challenges to the district court’s jury instructions on the drug-distribution counts were unavailing; and (5) the evidence was sufficient to sustain Defendant’s conviction on the drug-distribution counts. View "United States v. Sabean" on Justia Law