Justia White Collar Crime Opinion Summaries

El-Bey, a "Moorish national," created an EIN for the Trust, naming himself as the trustee and fiduciary. El-Bey filed six tax returns for the Trust, each seeking a $300,000 refund, signing each return, identifying himself as the fiduciary, and listing his date of birth as the date of trust creation. The IRS flagged these returns as frivolous and notified El-Bey that he would be assessed a $5,000 penalty per return if he failed to file a corrected return. El-Bey returned the letters to the IRS, including vouchers and tax forms bearing no relation to the returns. Based on the fourth and fifth tax returns, the IRS mailed two $300,000 refund checks, which El-Bey deposited, using the funds to purchase vehicles and to buy a house. After the sixth return, El-Bey was indicted on two counts of mail fraud, 18 U.S.C. 1341, and six counts of making false claims to the IRS, 18 U.S.C. 287. The district court allowed El-Bey to proceed pro se and appointed standby counsel over El-Bey’s objection. El-Bey advanced irrelevant arguments, interrupted the judge, and made it challenging to manage the trial. The court expressed frustration, but later instructed the jurors, who indicated that they could continue to be impartial. The Seventh Circuit remanded for a new trial. Statements by the court in the presence of the jury conveyed that El-Bey was guilty or dishonest and impaired El-Bey’s credibility in the eyes of the jury. View "United States v. El-Bey" on Justia Law

El-Bey, a "Moorish national," created an EIN for the Trust, naming himself as the trustee and fiduciary. El-Bey filed six tax returns for the Trust, each seeking a $300,000 refund, signing each return, identifying himself as the fiduciary, and listing his date of birth as the date of trust creation. The IRS flagged these returns as frivolous and notified El-Bey that he would be assessed a $5,000 penalty per return if he failed to file a corrected return. El-Bey returned the letters to the IRS, including vouchers and tax forms bearing no relation to the returns. Based on the fourth and fifth tax returns, the IRS mailed two $300,000 refund checks, which El-Bey deposited, using the funds to purchase vehicles and to buy a house. After the sixth return, El-Bey was indicted on two counts of mail fraud, 18 U.S.C. 1341, and six counts of making false claims to the IRS, 18 U.S.C. 287. The district court allowed El-Bey to proceed pro se and appointed standby counsel over El-Bey’s objection. El-Bey advanced irrelevant arguments, interrupted the judge, and made it challenging to manage the trial. The court expressed frustration, but later instructed the jurors, who indicated that they could continue to be impartial. The Seventh Circuit remanded for a new trial. Statements by the court in the presence of the jury conveyed that El-Bey was guilty or dishonest and impaired El-Bey’s credibility in the eyes of the jury. View "United States v. El-Bey" on Justia Law

The First Circuit affirmed the judgment of the district court denying Appellant’s motion for a new trial in his criminal case pursuant to Fed. R. Crim. P. 33. Appellant was convicted of antitrust conspiracy. The First Circuit affirmed Appellant’s conviction and sentence. Appellant later moved for a new trial based on freshly discovered evidence, arguing that the government offended the due process guarantees memorialized in Brady v. Maryland, 373 U.S. 83 (1963). The district court denied the motion, reasoning that the earlier disclosure of the freshly discovered evidence would not have changed the outcome of the criminal case. The First Circuit affirmed, holding that the district court’s finding that Appellant suffered no cognizable prejudice from the delayed disclosure of the information at issue was not in error. View "United States v. Peake" on Justia Law

Defendant Kathleen Stegman was convicted by a jury of two counts of evading her personal taxes for the tax years 2007 and 2008. Stegman was sentenced to a term of imprisonment of 51 months, to be followed by a three-year term of supervised release. The district court also ordered Stegman to pay a $100,000 fine, plus restitution in the amount of $68,733. Stegman established several limited liability corporations pertaining to a “medical aesthetics” business she owned, using these corporations to effectively launder client payments. As part of this process, Stegman would use the corporations to purchase money orders, typically in denominations of $500 or less, that she in turn used to purchase items for personal use. In 2007, Stegman purchased 162 money orders totaling $77,181.92. In 2008, she purchased 252 money orders totaling $121,869.99. And in 2009, she purchased 157 money orders totaling $73,697.31. Notably, Stegman reported zero cash income on her federal income tax returns during each of these years. At the conclusion of the evidence, the jury convicted Stegman of evading her personal taxes for the tax years 2007 and 2008 (Counts 4 and 5), as well as evading corporate taxes for the tax years 2008 and 2009 (Counts 1 and 2). The jury acquitted Stegman of evading corporate taxes for the tax year 2010 (Count 3). The jury also acquitted Stegman and Smith of the conspiracy charge (Count 6). Stegman moved for judgment of acquittal or, in the alternative, a new trial. The district court granted the motion as to the two counts that related to the evasion of corporate taxes (Counts 1 and 2), but denied the remainder of the motion. In doing so, the district court chose to acquit Stegman of the corporate tax evasion counts not due to a lack of “proof beyond a reasonable doubt that this corporation evaded taxes,” but rather because “the indictment itself was flawed in attributing the loss as due and owing by Ms. Stegman, when actually it was due and owing by the corporation.” Stegman raised five issues on appeal, four of which pertain to her convictions and one of which pertained to her sentence. Although several of these issues require extensive discussion due to their fact-intensive nature, the Tenth Circuit concluded that all of these issues lacked merit. View "United States v. Stegman" on Justia Law

After participating in a scheme that involved “retirement investment seminars,” Oliver pled guilty to wire fraud, 18 U.S.C. 1343, for defrauding investors. Because Oliver used their money for personal expenses or invested it in high-risk schemes, investors lost a total of $983,654. The district court sentenced Oliver to 51 months in prison followed by three years of supervised release. The Seventh Circuit affirmed the sentence, rejecting arguments that the district court erred by failing to consider unwarranted sentencing disparities, relying on inaccurate information, not calculating the Guidelines range for supervision, and imposing a two‐level leadership enhancement. The sentence fell within the recommended Guidelines range and Oliver failed to object at the time of sentencing. View "United States v. Oliver" on Justia Law

Blue gem coal burns hotter and cleaner than thermal coal, making it useful for producing silicon, a critical ingredient of computer chips and solar panels. Environmental regulations make it difficult to mine. Demand for blue gem coal outstrips its supply; it commands premium prices. New Century advertised itself as one of the largest blue gem coal companies in the country, falsely claiming to own land with valuable deposits and to have mining permits. By the time law enforcement caught on, the company had swindled more than $14 million from more than 160 investors. Eleven people involved in the scheme, including the mastermind, Rose, pleaded guilty. Phillips, who worked for New Century scouting property, went to trial. Phillips helped Rose, a NASCAR driver with little experience in the coal industry, identify land with coal-mining potential. The evidence portrayed Phillips as a coal-industry expert who helped New Century convince investors that it was legitimate. Phillips claimed he had no idea that the company defrauded investors. The jury convicted Phillips of conspiracy to commit mail and wire fraud but acquitted him of two money-laundering charges. The judge sentenced him to 30 months in prison. The Sixth Circuit affirmed, rejecting challenges to the sufficiency of the evidence and to evidentiary rulings. View "United States v. Phillips" on Justia Law

The First Circuit affirmed Appellant’s convictions of securities fraud, wire fraud, and conspiracy to commit both. The convictions arose from Appellant’s writing of false opinion letters so that his two co-conspirators could sell stock to the public in a “pump and dump” scheme. On appeal, Appellant argued that the evidence was insufficient to support his convictions in light of his interpretation of section 3(a)(9) of the Securities Act and that the district court constructively amended the indictment in its instructions to the jury. The First Circuit held (1) even if Appellant’s interpretation of section 3(a)(9) was correct, the evidence was sufficient to support his convictions; and (2) Appellant’s constructive amendment claim was without merit. View "United States v. Weed" on Justia Law

This appeal stemmed from an embezzlement case concerning four missing bank deposits defendant Gregory Manning was entrusted to make for his employers. Defendant argued on appeal that: (1) the State’s failure to preserve potentially exculpatory video evidence should have resulted in the trial court dismissing the charge or at least barring the State from presenting testimony concerning the video recordings in question; (2) the State’s closing argument impermissibly shifted the burden to him to preserve the video evidence and improperly impugned his defense; and (3) given his continuing claim of innocence, the sentencing court’s probation condition requiring him to complete a particular program in which he would have to accept responsibility for his crime was not individually tailored to his case and thus constituted an abuse of the court’s discretion. Finding no reversible error, the Vermont Supreme Court affirmed the conviction. View "Vermont v. Manning" on Justia Law

In 2008, Arise, a Dayton community school (charter school), faced declining enrollment, financial troubles, and scandal after its treasurer was indicted for embezzlement. The school’s sponsor sought a radical change in administration, elevated Arise’s former principal, Floyd, to superintendent, removed all board members, and appointed Floyd’s recommended candidates to the new board. Floyd set up a kickback scheme, using former business partners to form Global Educational Consultants, which contracted with Arise. Global received $420,919 from Arise. While Global was being paid, Arise teachers’ salaries were cut and staff members were not consistently paid. Arise ran out of money and closed in 2010. The FBI investigated and signed a proffer agreement with Ward, the “silent partner” at Global, then indicted Floyd, Arise board members, and Global's owner. They were convicted of federal programs bribery, conspiracy to commit federal programs bribery, and making material false statements, 18 U.S.C. 666(a)(1)(B), (a)(2); 18 U.S.C. 371; 18 U.S.C. 1001(a)(2). Two African-American jurors reported that they were initially unconvinced; the jury foreperson, a white woman, reportedly told them that she believed they were reluctant to convict because they felt they “owed something” to their “black brothers.” This remark prompted a confrontation, requiring the marshal to intervene.The Sixth Circuit affirmed their convictions, rejecting arguments based on the Supreme Court’s 2017 decision, Pena-Rodriguez v. Colorado. Although Pena-Rodriguez permitted, in very limited circumstances, an inquiry into a jury’s deliberations, this case did not fit into those limited circumstances. View "United States v. Robinson" on Justia Law

Popovski pleaded guilty to wire fraud, 18 U.S.C. 1343, for obtaining credit-card or debit-card numbers from abroad, encoding them onto blank cards and using those cards to withdraw money. Popovski was responsible for more than 1,000 account numbers but planned to use 800 of them in Peru. The district judge disregarded those 800 numbers, calculating intended loss based on actual or planned U.S. transactions, to conclude that the intended loss attributable to Popovski was $131,000, which added eight offense levels under U.S.S.G. 2B1.1. The judge sentenced Popovski to 30 months’ imprisonment; his Guidelines range was 27-33 months. The Seventh Circuit affirmed. Section 2B1.1 Application Note 3(F)(i) provides: “loss includes any unauthorized charges made with the counterfeit access device or unauthorized access device and shall be not less than $500 per access device.” Popovski unsuccessfully argued that cards with canceled numbers or with credit limits exhausted by earlier withdrawals should not count toward the number of devices. Popovski did not deny that he intended to steal from all of the persons whose account information he possessed; the Application Note indicates that his inability to carry out that intent does not diminish “loss.” That aggregate approach takes account of the possibility that some access devices won’t work, while others could produce more than $500. View "United States v. Popovski" on Justia Law