Justia White Collar Crime Opinion Summaries

Contractual disclaimers of reliance on prior misrepresentations do not render those misrepresentations immaterial under the criminal mail and wire fraud statutes. The Second Circuit affirmed defendant's conviction and sentence for conspiring to commit mail and wire fraud, substantive counts of both, and making false statements to a government agent. Defendant's conviction stemmed from his work at Vendstar, a company that sold valueless vending machine business opportunities to its victims. The court held that, although contractual disclaimers were relevant to the jury's determination of defendant's guilt, they did not render extra-contract misrepresentations immaterial as a matter of law. View "United States v. Weaver" on Justia Law

Lunn was convicted of five counts of bank fraud, 18 U.S.C. 1344, based on his operation of a Chicago investment advisory firm that advised mostly high-net-worth clients. The charges arose from Lunn’s conduct surrounding three extensions of credit by Leaders Bank, in which Lunn had invested: a line of credit he obtained for himself; a loan that Lunn arranged for former Chicago Bulls player Scottie Pippen; and a loan that Lunn arranged for Geras, a Lunn Partners client. Lunn provided false financial information with respect to his own loan; misled Pippen about the nature of the transaction and forged Pippen’s name; and forged Geras’s signature. The Seventh Circuit affirmed the convictions, rejecting Lunn’s claims that the court’s multiple intrusions into his testimony were so serious that he did not receive a fair trial and that the court erred in refusing to give a “good faith” instruction. The court instructed the jury that the government was required to prove, beyond a reasonable doubt, that Lunn “knowingly executed” a scheme to defraud “with the intent to defraud.” A good faith instruction was unnecessary. View "United States v. Lunn" on Justia Law

The Fourth Circuit affirmed defendant's conviction and sentence for three counts stemming from a mortgage fraud conspiracy occurring between 2005 and 2007. The court held that the district court did not abuse its discretion in denying defendant's three motions for a new trial; the court rejected defendant's challenges to the district court's denial of his motion to compel the government to produce approximately 99 short sale files discovered during a separate and unrelated grand jury investigation; the district court acted within its considerable discretion by admitting testimony from a government's expert witness on mortgage banking practices; there was sufficient evidence to support a finding of materiality where any reasonable juror could conclude beyond a reasonable doubt, based on the evidence in the record, that false representations made in the documents connected to the real estate transactions at issue would have been of critical importance to the lenders; the district court did not commit reversible error in its application of an enhancement for a loss amount of $7.1 million; and the district court did not err in applying a three-level enhancement for a manager's or supervisor's role, a two-level sophisticated-means enhancement, and a two level enhancement for abuse of a position of trust. View "United States v. Wolf" on Justia Law

The Fourth Circuit held that there was insufficient evidence to support defendant's convictions for Racketeer Influenced and Corrupt Organizations Act (RICO) conspiracy and government program theft. The court vacated these convictions and remanded for resentencing. However, the court held that there was sufficient evidence to convict defendant of honest services fraud, mail and wire fraud, money laundering, and making false statements to federal agencies. Finally, the court rejected defendant's claim that the district court constructively amended the original indictment because the district court did not broaden the bases for defendant's conviction. Therefore, the court affirmed in all other respects. View "United States v. Pinson" on Justia Law

The Eighth Circuit affirmed the district court's denial of defendant's motion to discharge a restitution obligation resulting from defendant's involvement in a fraud scheme as the owner of a life insurance company. The court held that the time limit on criminal appeals was a claims-processing rule so even if the prior panel mistakenly applied the rule governing civil appeals, there was no bar to the court's consideration of the current appeal. The court concluded that the district court correctly denied defendant's motion on the merits because the Mandatory Victims Restitution Act, 18 U.S.C. 3663A(c)(1)(A)(ii), did not provide authority to reduce the amount of a restitution obligation to match the value of a negotiated settlement with the victim in civil proceedings. Consequently, the district court did not have authority to grant defendant's request to deem the restitution obligation discharged if he paid the negotiated settlement. The district court, however, did not foreclose defendant from seeking relief under section 3664(j)(2)(B) upon a proper showing, and neither did the court. View "United States v. Whitbeck" on Justia Law

Reed operated companies that he claimed would make loans of $50 million to $1 billion to entrepreneurs. Reed charged advance fees of $10,000 to $50,000 to apply for these loans. Reed’s companies actually had no funds to lend. Reed and his co‐defendants took in $200,000 from six clients, but never closed a loan. Reed was indicted for wire fraud. On the fourth day of trial, Reed’s lawyer told the court that Reed wanted to enter a “blind” guilty plea. The judge placed Reed under oath, explained his rights, and discussed his understanding of the consequences of pleading guilty, before accepting the plea. Four months later, before sentencing, Reed moved to substitute attorneys. His new attorney moved to withdraw the plea, arguing that Reed’s attorney’s ineffective representation had coerced Reed to plead guilty. The court denied the motion. Reed sought a below‐guidelines sentence of probation, emphasizing that his wife (who has a disabling illness) and three children (one of whom is also disabled) depend on him for financial and other support. The Guidelines range was 57-71 months incarceration. The district judge sentenced Reed to 64 months in prison. The Seventh Circuit affirmed, finding Reed’s allegations of ineffective assistance vague. The district judge adequately considered Reed’s claims of family hardship. View "United States v. Reed" on Justia Law

Between 2003 and 2011, Jackson operated three Cicero, Illinois daycares in succession, housed in a building next to the Ark of Safety Apostolic Faith Temple where he served as pastor. Subsidies from the State of Illinois’ Child Care Assistance Program largely funded the daycares. CCAP subsidies are paid directly to the childcare provider. Jackson and his wife, Faria, submitted or directed the submission of dozens of CCAP applications, employment verification letters, redetermination forms, and monthly childcare certificate reports that contained materially false information. The state paid over $2.28 million in subsidies to Jackson’s daycares. A jury convicted Jackson and Faria of mail fraud, 18 U.S.C. 1341; wire fraud, 18 U.S.C. 1343, and making a false statement, 18 U.S.C. 1001 for his role in the scheme. The Seventh Circuit affirmed, rejecting a challenge to the sufficiency of the evidence. Faria was not unduly prejudiced by the joint trial or by the jury seeing a redacted copy of the indictment. View "United States v. Jackson" on Justia Law

The Ninth Circuit joined the First, Third, Fifth, Eighth, and Tenth Circuits in holding that a victim may not directly appeal the restitution component of a criminal defendant's sentence under the Mandatory Victims Restitution Act (MVRA), 18 U.S.C. 3663A. In this case, defendants were convicted of charges related to their involvement in a scheme to receive kickbacks based on overpayments made by the Twenty-Nine Palms Band of Mission Indians. The district court ordered defendants to pay restitution to the Tribe. The Tribe subsequently challenged the "direct loss" and the "other fees" amount of the restitution order. The panel held that the Tribe had Article III standing to appeal an award under the MVRA, but that neither the MVRA nor the Due Process Clause confers a right on the Tribe to challenge restitution awards except as provided in 18 U.S.C. 3771(d)(3). Accordingly, the panel dismissed the appeal. View "United States v. Kovall" on Justia Law

Defendant appealed the district court's order of restitution that was imposed after defendant was convicted of making a false statement in a matter within the jurisdiction of the executive branch of the federal government in violation of 18 U.S.C. 1001(a)(2). The Fourth Circuit affirmed and held that it was evident in this case that the district court ordered restitution pursuant to the Mandatory Victims Rights Act (MVRA), 18 U.S.C. 3663; the categorical approach has no role to play in determining whether a Title 18 offense is "an offense against property" that triggers mandatory restitution under the MVRA; given the specific circumstances of defendant's section 1001 conviction, the court had little trouble finding that his false statement on the HUD-1 form was an "offense against property" under the MVRA; and the district court did not err when it determined that defendant's false statement directly and proximately caused harm to Bank of America and thus the Bank was the "victim" within the meaning of the MVRA. The court also held that the district court did not err in awarding restitution to the Bank in the amount of $1,385,444.83. View "United States v. Ritchie" on Justia Law

Plaintiff challenged the dismissal of his Racketeer Influenced and Corrupt Organizations Act (RICO) and state law claims against the principals of a Venezuelan energy company. The Second Circuit affirmed the dismissal of the RICO claims because plaintiff failed to allege that defendants engaged in a pattern of racketeering activity. Plaintiff's first theory failed because the predicate acts posed no continuing threat of racketeering. Plaintiff's second theory failed because the predicate acts he chose were insufficiently related to each other. The court also affirmed the dismissal of the state law claims because plaintiff failed to establish personal jurisdiction over either defendant. View "Reich v. Betancourt Lopez" on Justia Law