Articles Posted in White Collar Crime

Defendant was convicted of 90 counts of wire fraud and one count of conspiracy to commit wire fraud. Defendant obtained millions of dollars from victims by telling them that he needed to pay CIA and FBI agents to protect him and his family from the Mafia, and that he would pay the victims back. The Ninth Circuit vacated in part, agreeing with the parties that insufficient evidence supported defendant's convictions for Counts 81-90. The panel rejected defendant's claim that his waiver of counsel was invalid; that he was not competent to represent himself; that he was denied his Sixth Amendment right to confront the witnesses against him; that the government committed misconduct during trial; that the district court erred by not granting him a continuance; that his trial suffered cumulative error; and that the district court erred in denying his post-trial motions. Accordingly, the panel affirmed defendant's convictions as to Counts 1-80 and Count 91. The panel remanded for resentencing. View "United States v. Audette" on Justia Law

The Ninth Circuit joined the Eleventh Circuit in holding that a district court may order restitution for all losses resulting from a fraudulent scheme, even those caused by conduct occurring outside the statute of limitations. The panel affirmed the district court's order requiring defendant to pay in restitution the full amount of Medicare's losses from convictions arising from a fraudulent healthcare scheme. The panel held that the evidence was sufficient to support the district court's restitution order; the district court properly included losses relating to the overall fraudulent scheme in the restitution amount; and the district court did not plainly err by ordering restitution for the entire amount of damages caused by the fraudulent scheme as alleged in the indictment. View "United States v. Anieze-Smith" on Justia Law

Plaintiffs appealed the district court's dismissal of their amended securities fraud class action complaint, alleging that Atossa and its Chairman and CEO, Steven Quay, made a series of public statements about Atossa's breast cancer screening products that were materially false or misleading. The district court dismissed the complaint. The Ninth Circuit held that plaintiffs have properly alleged falsity and materiality as to some, but not all, of these statements. In this case, plaintiffs have sufficiently alleged that the following were materially false or misleading: (1) Quay's statement quoted in Atossa's December 20, 2012 Form 8–K filing describing the ForeCYTE Test as "FDA-cleared"; (2) Quay's statement during his interview with NewsMedical.Net that the ForeCYTE test had "gone through all of the FDA clearance process"; (3) Atossa's Form 8–K filing on February 25, 2013, giving notice of the FDA's warning letter; and (4) Quay's statement during his interview with the Wall Street Transcript that "FDA clearance risk has been achieved." Accordingly, the court affirmed in part, reversed in part, vacated in part, and remanded. View "Levi v. Atossa Genetics, Inc." 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

Walter Liew and his company, USAPTI, challenged eight counts of conviction under the Economic Espionage Act of 1996 (EEA), 18 U.S.C. 1831(a), for charges related to their unauthorized use of DuPont chloride-route technology for producing titanium dioxide. Defendants also appealed their convictions for conspiracy to tamper with witnesses and evidence. The Ninth Circuit held that the district court did not err by giving a jury instruction regarding compilations; by rejecting a public-disclosure instruction; and by rejecting the reverse engineering and general knowledge instructions. The Ninth Circuit also held that defendants waived their right to have their argument related to the conspiracy and attempt instructions reviewed; even if this issue were reviewable, an intervening Ninth Circuit decision resolved it (United States v. Nosal). The Ninth Circuit rejected challenges to the sufficiency of trade secret evidence regarding substantive trade secret counts. However, the Ninth Circuit reversed defendants' convictions as to conspiracy to obstruct justice where the statement at issue tacked too close to a general denial to constitute obstruction of justice, and as to witness tampering where the evidence was insufficient to prove beyond a reasonable doubt that Liew intimidated, threatened or corruptly persuaded a witness. Finally, the Ninth Circuit held that the district court did not err by not requiring the prosecution to disclose rough notes of the FBI's interviews with a deceased coconspirator. Accordingly, the Ninth Circuit affirmed in part, reversed in part, vacated in part, and remanded. View "United States v. Liew" on Justia Law

Defendant pleaded guilty to one count of aggravated identity theft and aiding and abetting, and one count of possessing a false identification document with the intent to defraud the United States. On appeal, defendant challenged the district court's forfeiture order in the amount of $4,128,554.00. The court held that when a conviction for aggravated identity theft is premised on a proven or admitted violation of a predicate offense that is enumerated in the civil forfeiture statute, then forfeiture is authorized. The court concluded that the district court had statutory authority to enter a criminal forfeiture order because of defendant's conviction of aggravated identity theft, with a bank fraud predicate offense; defendant waived his Eighth Amendment claim; defendant waived his right to appeal the forfeiture order on notice grounds; and defendant waived his claim that the district court erred by not requiring the government to prove the amount of proceeds. Accordingly, the court affirmed the judgment. View "United States v. Pollard" on Justia Law

Defendant, a former mortgage loan officer and real estate broker, appealed his convictions and sentence for nine counts of wire fraud and one count of aggravated theft. Defendant's convictions stemmed from his involvement in a complex mortgage fraud scheme. The court held that negligence is not a defense to wire fraud, and evidence of lender negligence is not admissible as a defense to mortgage fraud; intentional disregard of relevant information is not a defense to wire fraud, and evidence of intentional disregard by lenders is not admissible as a defense to mortgage fraud; evidence of individual lender behavior is not admissible to disprove materiality, but evidence of general lending standards in the mortgage industry is admissible to disprove materiality; and the district court did not deny defendant the opportunity to present a complete defense. Accordingly, the court affirmed the judgment. The court concurrently filed a separate memorandum disposition rejecting other challenges to the convictions and sentences. View "United States v. Lindsey" on Justia Law

Defendant pleaded guilty to three counts of wire fraud and mail fraud. On appeal, defendant challenged the restitution order and a forfeiture money judgment, both in the amount of $2,232,894. The court concluded that, as a preliminary matter, the circumstances surrounding the signing and entry of the plea agreement support the conclusion that defendant entered into the agreement knowingly and voluntarily. The court also concluded that the plea agreement shows that it provided sufficient information from which defendant could have derived an accurate estimate of the amount of restitution for which he was liable; the plain language of the plea agreement clearly states the minimum amounts of restitution that defendant would have to pay rather than the maximum agreed-upon restitution amount, and the district court’s imposition of a larger amount of restitution was not in conflict with the plea agreement; the award of restitution is not an illegal sentence in this case and the district court did not err in ordering restitution for all losses caused by the schemes to defraud, and the order was not illegal; and the court rejected defendant's arguments as to the forfeiture order and concluded that it did not constitute an illegal sentence. Accordingly, the court dismissed the appeal. View "United States v. Lo" on Justia Law

Defendant, then a 67-year-old retired engineer turned tax preparer, was convicted of 32 federal offenses arising from a tax fraud scheme. Defendant was sentenced to fifteen years in prison and ordered to pay just over $500,000 in restitution. The court held that 18 U.S.C. 1546(a) does not apply to U.S. passports or U.S. passport cards. Thus, the district court erred by denying defendant’s motion for judgment of acquittal as to Counts 33 and 34. The court concluded that the district court clearly erred in holding that the conduct at issue in the second case, where defendant was not convicted, was sufficiently “related” to the conduct at issue in the first case to warrant inclusion of losses in the second case in the order for restitution pursuant to 18 U.S.C. 3663A(a)(2). Consequently, the court concluded that although ordering restitution for related conduct that did not result in a conviction was within “statutory bounds,” the order for restitution, here, was an abuse of discretion. The United States concedes, and the court agreed, that the wrong version of USSG 2B1.1(b)(2)(C) was used and that this error requires remand to resolve the determination of the number of victims; the primary flaw with the “intended loss” finding, here, is that the district court improperly considered the intended loss from the second case, even though the second case did not involve “relevant conduct,” under USSG 1B1.3(a)(2); the United States nowhere identifies evidence establishing - or identified by the district court as the basis for a finding - that specific challenged amounts of intended loss in the first case were, in fact, actual or intended losses; the district court erroneously applied the identity theft specific offense characteristic under USSG 2B1.1(b)(11)(C); the district court properly imposed the “sophisticated means” enhancement under USSG 2B1.1(b)(9)(C); because the court vacated defendant's conviction on Count 33, no cross-reference is applicable and the district court must recalculate the sentence on remand; the district court properly applied the enhancement for “abuse of trust” under USSG 3B1.3; and the district court properly applied an "obstruction of justice" enhancement under USSG 3C1.1. Accordingly, the court affirmed in part, reversed in part and remanded. View "United States v. Thomsen" on Justia Law

Defendant conspired with former Korn/Ferry employees whose user accounts had been terminated, but who nonetheless accessed trade secrets in a proprietary database through the back door when the front door had been firmly closed. The court concluded that defendant knowingly and with intent to defraud Korn/Ferry blatantly circumvented the affirmative revocation of his computer system access. This access falls squarely within the Computer Fraud and Abuse Act's (CFAA), 18 U.S.C. 1030, prohibition on access “without authorization.” The court concluded that “without authorization” is an unambiguous, non-technical term that, given its plain and ordinary meaning, means accessing a protected computer without permission. Therefore, the court affirmed defendant’s conviction for violations of section 1030(a)(4) of the CFAA. The court also affirmed defendant's convictions under the Economic Espionage Act (EEA), 18 U.S.C. 1832(a)(2) -(a)(4), for downloading, receiving and possessing trade secrets in the form of source lists from the former employer's database. The court vacated in part and remanded the restitution order for reconsideration of the reasonableness of the attorneys’ fees award. View "United States v. Nosal" on Justia Law