Justia White Collar Crime Opinion Summaries

Harris, a registered stockbroker, and his co-conspirators, including government witness Durand, agreed to recommend shares of Zirk de Maison’s companies to clients in exchange for commissions. The Financial Industry Regulatory Authority began an investigation and questioned Harris and Durand on wire transfers from certain organizations controlled by de Maison. The two told investigators that the deposits resulted from selling expensive watches, and sent letters to FINRA summarizing this fictitious explanation. After Harris was arrested, he purportedly called and texted Durand on multiple occasions, instructing him to stick with their story. Durand later admitted that the watch story was entirely false. Harris was convicted of conspiracy to commit securities fraud or wire fraud, 18 U.S.C. 1343, 1348, 1349; obstruction of justice, 18 U.S.C. 1503, and three counts of wire fraud, 18 U.S.C. 1343. The district court sentenced Harris to 63 months’ imprisonment and $843,423.91 in restitution. The Sixth Circuit vacated. The district court abused its discretion by not allowing Harris to introduce a prior inconsistent statement for impeachment of a government witness. The court upheld the admission of government summary exhibits and a jury instruction relating to stockbroker’s fiduciary duties. Harris presented a colorable claim of extraneous influence on a juror, so the court abused its discretion by failing to hold a "Remmer" evidentiary hearing or by denying defense counsel’s request to question the juror and his friend. View "United States v. Harris" on Justia Law

Harris, a registered stockbroker, and his co-conspirators, including government witness Durand, agreed to recommend shares of Zirk de Maison’s companies to clients in exchange for commissions. The Financial Industry Regulatory Authority began an investigation and questioned Harris and Durand on wire transfers from certain organizations controlled by de Maison. The two told investigators that the deposits resulted from selling expensive watches, and sent letters to FINRA summarizing this fictitious explanation. After Harris was arrested, he purportedly called and texted Durand on multiple occasions, instructing him to stick with their story. Durand later admitted that the watch story was entirely false. Harris was convicted of conspiracy to commit securities fraud or wire fraud, 18 U.S.C. 1343, 1348, 1349; obstruction of justice, 18 U.S.C. 1503, and three counts of wire fraud, 18 U.S.C. 1343. The district court sentenced Harris to 63 months’ imprisonment and $843,423.91 in restitution. The Sixth Circuit vacated. The district court abused its discretion by not allowing Harris to introduce a prior inconsistent statement for impeachment of a government witness. The court upheld the admission of government summary exhibits and a jury instruction relating to stockbroker’s fiduciary duties. Harris presented a colorable claim of extraneous influence on a juror, so the court abused its discretion by failing to hold a "Remmer" evidentiary hearing or by denying defense counsel’s request to question the juror and his friend. View "United States v. Harris" on Justia Law

Mark and Ornella Hammerschmidt were convicted of charges related to their involvement in two schemes to obtain fraudulent tax refunds from the Treasury through the IRS. Mark was sentenced to 135 months in prison and Ornella was sentenced to 48 months in prison. The Eighth Circuit vacated defendant's sentence, holding that the district court did not make the findings required to increase Mark's offense level for being a manager or supervisor and it should not have assessed criminal history points for a 2008 purged disposition of civil contempt. The court affirmed Ornella's sentence, holding that the district court did not err in applying an enhancement for being in the business of preparing or assisting in the preparation of tax returns. Furthermore, the district court did not err in relying on victim impact statements and Ornella's criminal history. View "United States v. Hammerschmidt" on Justia Law

Defendants-Appellants Matthew and Brandi Channon s used fictitious names and addresses to open rewards accounts at OfficeMax, known as “MaxPerks” accounts. They used these accounts to fraudulently obtain more than $100,000 in OfficeMax products. The scheme came to light when Steven Gardner, an OfficeMax fraud investigator, noticed an unusually high number of online-adjustments across several different accounts. Gardner observed that most of the accounts were registered to one of three email addresses, differing only with interspersed periods between the characters of each address. OfficeMax recognized the variations as unique email addresses, but gmail did not. Defendants then used these fraudulent email addresses to claim purchases by other customers, thus generating rewards to which they were not entitled. They also used various accounts to sell more than 27,000 used ink cartridges, receiving $3 in rewards from OfficeMax for each after paying an average of $.32 per cartridge on eBay. In total, over the 21 months of their scheme, Defendants redeemed $105,191 in OfficeMax rewards. Defendants were ultimately were convicted by a jury of wire fraud and conspiracy to commit wire fraud relating to a scheme to defraud OfficeMax. They appealed, challenging the district court’s decision to: (1) admit exhibits derived from computer records and (2) enter a money judgment forfeiture. The Tenth Circuit Court of Appeal upheld the district court’s admission of the exhibits but remanded so the district court may conduct further proceedings on the money judgment of forfeiture. View "United States v. Channon (Matthew)" on Justia Law

Defendants-Appellants Matthew and Brandi Channon s used fictitious names and addresses to open rewards accounts at OfficeMax, known as “MaxPerks” accounts. They used these accounts to fraudulently obtain more than $100,000 in OfficeMax products. The scheme came to light when Steven Gardner, an OfficeMax fraud investigator, noticed an unusually high number of online-adjustments across several different accounts. Gardner observed that most of the accounts were registered to one of three email addresses, differing only with interspersed periods between the characters of each address. OfficeMax recognized the variations as unique email addresses, but gmail did not. Defendants then used these fraudulent email addresses to claim purchases by other customers, thus generating rewards to which they were not entitled. They also used various accounts to sell more than 27,000 used ink cartridges, receiving $3 in rewards from OfficeMax for each after paying an average of $.32 per cartridge on eBay. In total, over the 21 months of their scheme, Defendants redeemed $105,191 in OfficeMax rewards. Defendants were ultimately were convicted by a jury of wire fraud and conspiracy to commit wire fraud relating to a scheme to defraud OfficeMax. They appealed, challenging the district court’s decision to: (1) admit exhibits derived from computer records and (2) enter a money judgment forfeiture. The Tenth Circuit Court of Appeal upheld the district court’s admission of the exhibits but remanded so the district court may conduct further proceedings on the money judgment of forfeiture. View "United States v. Channon (Matthew)" on Justia Law

The Eleventh Circuit affirmed Defendant Presendieu's convictions, and vacated Defendant Jean's sentence in a case involving an illegal check-cashing scheme. The court held that Presendieu did not show that the district court plainly erred, either as a matter of constitutional due process or under Rule 11, in accepting defendant's guilty plea. The court held, however, that the district court clearly erred in holding Jean responsible for the approximately $84,000 of loss incurred as a result of a codefendant's independent check-cashing activity. The court also held that the district court did not err in applying to Jean's sentence a two-level sentence enhancement under USSG 2B1.1(b)(11)(B)(i) and a two-level enhancement under USSG 2B1.1(b)(10)(C) for the use of sophisticated means. Finally, the district court did not err by denying Jean's request for a minor role reduction under USSG 3B1.2(b). The court remanded for the district court to resentence Jean. View "United States v. Presendieu" on Justia Law

Brown, the manager of a company that provided home physician visits, and Talaga, who handled the company’s billing, were convicted of conspiracy to commit health-care fraud, 18 U.S.C. 1349; six counts of health-care fraud, 18 U.S.C. 1347; and three counts of falsifying a matter or providing false statements, 18 U.S.C. 1035(a). The district court sentenced Mr. Brown to 87 months’ imprisonment, 34 months below the Guidelines’ range, stating that a significant sentence was warranted because of the duration of the scheme, the amount of the fraud, the need for general deterrence, and Brown’s failure to accept responsibility. Ms. Talaga was sentenced to 45 months. The Seventh Circuit affirmed, rejecting Brown’s argument that the court’s assumptions about the need for general deterrence were unfounded and constituted procedural error and Talaga’s arguments that the court calculated the amount of loss for which she was responsible by impermissibly including losses that occurred before she joined the conspiracy. The district court was under no obligation to accept or to comment further on Brown’s deterrence argument. Talaga, as a trained Medicare biller, knew that that the high-volume billings were fraudulent. View "United States v. Talaga" on Justia Law

The Eighth Circuit affirmed defendant's conviction and sentence for charges related to his involvement in a scheme to defraud TierOne Bank's shareholders and to mislead its regulators by concealing millions of dollars in losses related to the failure of certain real estate loans. The court held that the district court did not err by denying defendant's motion for judgment of acquittal, because the evidence was sufficient for the jury to find beyond a reasonable doubt that defendant possessed the knowledge and intent required to sustain his convictions; the district court did not err by denying defendant's motion for a bill of particulars where the government's disclosures were sufficient to enable defendant to understand the nature of the charges against him, prepare a defense, and avoid any surprise; the court rejected defendant's evidentiary challenges; and the district court properly declined to issue defendant's requested jury instructions. The court also held that the district court did not clearly err in adopting the loss calculation methodology set forth in the Sentencing Guidelines; the district court did not err in applying a 4-level leadership enhancement under USSG 3B1.1(a); and defendant's sentence was substantively reasonable. Finally, the district court did not err in its calculation of the restitution award. View "United States v. Lundstrom" on Justia Law

The First Circuit affirmed Defendant’s convictions for conspiring to defraud the United States and four counts of wire fraud and the sentence imposed by the district court, thus rejecting Defendant’s arguments on appeal.Defendant was convicted of knowingly procuring government contracts for his construction company. The district court sentenced Defendant to thirty months’ imprisonment and entered an order of forfeiture, in the form of a money judgment, in an amount totaling more than $6.7 million, which the court determined was the amount of the proceeds of Defendant’s crimes. The First Circuit affirmed, holding (1) the evidence was sufficient to support the convictions; (2) even assuming the prosecutor’s statements made during closing arguments were improper and deliberate, the district court did not abuse its discretion in ruling that its instruction likely cured any prejudice and that any surviving prejudice did not affect the jury’s verdict; and (3) there was no error in the district court’s forfeiture order and money judgment. View "United States v. Gorski" on Justia Law

Gumila, the head of clinical operations for a company that provided home medical care to the elderly, was convicted of 21 counts of health-care fraud, 18 U.S.C. 1347 and three counts of making a false statement in a health-care matter, 18 U.S.C. 1035. There was testimony from more than 20 witnesses and documentary evidence establishing that Gumila regularly overruled physicians who wanted to discharge patients and instructed employees to bill services at unjustifiably high rates, to claim that patients were homebound even when they weren’t, and to order skilled-nursing services even if no doctor had ever examined the patient. The government estimated Medicare’s financial loss: approximately $2.375 million for unnecessary and upcoded home visits; $9.45 million for unnecessary skilled-nursing services that did not meet Medicare’s requirements; and $3.779 million for oversight services that did not qualify for payment or were never performed. The guidelines range was 151-188 months in prison. Gumila argued that the loss should be limited to payments for the eight patients specifically mentioned in the indictment ($14,449). The judge concluded that the government was not required to present specific evidence to prove the fraudulent nature of each individual transaction contributing to the total loss, determined that the loss estimate was reasonable, imposed a sentence of 72 months, and ordered Gumila to pay $15.6 million in restitution. The Seventh Circuit affirmed, upholding the loss calculation and the prison term as substantively unreasonable. View "United States v. Gumila" on Justia Law