Articles Posted in White Collar Crime

A conspiracy to defraud financial institutions in the Minneapolis-St. Paul area involved cashing counterfeit checks. Participants, including 25 co-defendants, created the counterfeit checks using check-printing software and blank check stock. “Bank insiders” provided bank account information for use on counterfeit checks. "Runners" were enlisted to serve as payees and take the checks to the bank to cash or deposit. Conspiracy members acquired account information through various means. Using social media, participants searched the hashtag “#myfirstpaycheck” and found photographs of legitimate paychecks that unwitting victims had posted online. Bank insiders sometimes provided account information. Some conspirators used their own payroll or personal checks to be counterfeited. During the period between November 2007 and September 2013 alone, more than 500 runners negotiated over 1500 counterfeit or fraudulent checks. Gaye pleaded guilty to conspiracy to commit bank fraud, 18 U.S.C. 1344 and 1349, 20 counts of aiding and abetting bank fraud, and two counts of aiding and abetting aggravated identity theft, 18 U.S.C. 1028A. Fillie pleaded guilty to conspiracy to commit bank fraud and one count of aiding and abetting aggravated identity theft. Sumoso pleaded guilty to conspiracy to commit bank fraud and four counts of aiding and abetting bank fraud. The Eighth Circuit affirmed sentences of (respectively) 144, 134, and 54 months’ imprisonment and restitution orders, rejecting arguments that the district court committed procedural error in applying the guidelines. View "United States v. Gaye" on Justia Law

Defendant appealed his conviction for misappropriating over $5000 in federal grant funds that were distributed to the organization that he managed to subsidize an after-school program for children, in violation of 18 U.S.C. 666(a)(1)(A). The Eighth Circuit held that section 666(a)(1)(A) is not a continuing offense and a defendant may not be charged for a section 666(a)(1)(A) offense committed outside the five-year statute of limitations. However, like the defendant in this case, when a defendant has committed the offense both within and outside the limitations period, he may be charged with violations committed within the limitations period. The court held that any error in admitting evidence related to expenditures outside the limitations period did not seriously affect the fairness, integrity or public reputation of the judicial proceedings. Furthermore, there was no error in admitting a purported grant application into evidence; any error regarding the admission of hearsay at a pre-trial release proceeding was moot; and the evidence was sufficient to support the conviction. View "United States v. Askia" on Justia Law

The Eighth Circuit affirmed the district court's calculation of the loss amount in defendant's sentence after he was convicted of five counts of wire fraud. The court held that the district court properly determined that defendant's employer was a victim of the fraud scheme and that the company suffered actual and intended pecuniary losses, and the district court did not commit clear error in finding that certain uncharged conduct was part of defendant's common scheme or plan and including that conduct in the calculation of loss. The court vacated, however, the restitution award. The court held that the Mandatory Victim Restitution Act applied to the wire fraud conviction and the court reversed and remanded in light of Lagos v. United States, 138 S.Ct. 1684 (May 29, 2018). View "United States v. Cornelsen" 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 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

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

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 Eighth Circuit affirmed defendant's sentence and conviction of wire fraud and unlawful monetary transaction. The court held that the district court did not abuse its discretion in admitting ATM-location evidence where the location of defendant's withdrawals -- an adult club -- was proof he might not have used investor funds for legitimate business expenses. The court held that the district court did not clearly err in applying a two-level vulnerable-victim enhancement where vulnerability no longer needed to contribute to success of the scheme; although the district court did not make explicit factual findings, the victims testified at sentencing; the district court heard arguments regarding whether that testimony warranted the enhancement; and defendant ignored the combination of factors he knew about the victims, including disability and alcoholism. Finally, the court lacked jurisdiction to review the district court's denial of a downward departure. View "United States v. Beyer" on Justia Law

The Eighth Circuit affirmed defendant's convictions for three counts of soliciting or receiving an illegal kickback related to a federal health-care program and one count of making a false statement to federal agents. The court held that there was sufficient evidence to convict defendant of three charges under the anti-kickback statute. In this case, the district court identified one element of the charges as proof that defendant solicited or received a payment that was paid primarily in order to induce the referral of patients insured by Medicare or Medicaid. Then the district court found that the evidence showed, beyond a reasonable doubt, that defendant solicited kickbacks, represented that he could control the referrals, and actually received money for the few referrals that were made through his efforts. Finally, defendant's challenge to his false statement conviction failed. View "United States v. Iqbal" on Justia Law

The Eighth Circuit affirmed the district court's decision to abstain from a suit arising out of the collapse of Thomas Petters' massive Ponzi scheme, because the case before the district court was duplicative of the case before the other federal court. While the district court appropriately invoked its discretion to abstain, the district court should have stayed the action rather than dismiss it. Accordingly, the court vacated the judgment dismissing the action and remanded for further proceedings. View "Ritchie Capital Management LLC v. BMO Harris Bank, N.A." on Justia Law