Articles Posted in White Collar Crime

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The Fifth Circuit affirmed the district court's grant of the SEC's motion for summary judgment, holding that defendant offered securities and committed securities fraud in violation of the Securities and Exchange Act. The court held that interests in defendant's drilling projects qualified as securities. In this case, the district court correctly concluded that defendant's drilling projects distributed power as if they were limited partnerships where the SEC provided unrebutted evidence showing that investors could not use their legal powers. The court also held that the district court correctly found that defendant made material misstatements to investors when he knowingly misrepresented his relationships with major oil companies. View "SEC v. Sethi" on Justia Law

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Defendants Walter and Steven Reed appealed their convictions for conspiracy to commit wire fraud and money laundering, as well as the substantive counts of wire fraud and money laundering. Walter was also convicted of additional counts. The charges stemmed from defendants' use of Walter's District Attorney campaign funds. The Fifth Circuit vacated the district court's imposition of joint and several liability for money forfeiture in light of the Supreme Court's decision in Honeycutt v. United States, which held that joint and several forfeiture liability was not permitted for forfeiture under 21 U.S.C. 853(a)(1), which mandates forfeiture for certain drug crimes. In this case, the government conceded that the imposition of joint and several forfeiture liability should be vacated and remanded in light of Honeycutt. The court otherwise affirmed the district court's judgment. View "United States v. Reed" on Justia Law

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The Fifth Circuit affirmed defendant's sentence after he pleaded guilty to securities fraud crimes. The court held that the district court did not plainly err by concluding that FINRA's order was a prior administrative order for purposes of USSG 2B1.1(b)(9)(C), nor did the district court plainly err by applying the two-level sentencing enhancement to defendant because he was engaged in securities activity that violated FINRA's order. View "United States v. Blount" on Justia Law

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The Fifth Circuit affirmed Defendant Charles Bolton and Linda Bolton's convictions and sentences for various counts of attempted tax evasion and filing false tax returns. The court held that Charles failed to show plain error with respect to the sufficiency of the indictments for tax evasion and filing false tax returns; the evidence was sufficient to support the jury's verdicts of guilt against both defendants; claims of Brady violations were rejected; the district court's admission of hearsay statements was invited error by both sets of defense counsel, but the error did not rise to the level of manifest injustice and defendants have waived their Confrontation Clause rights under United States v. Ceballos, 789 F.3d 607, 616 (5th Cir. 2015); claims of prosecutorial misconduct rejected; there was no plain error in the jury instructions; the district court properly calculated the loss amount; and defendants' sentences were substantively reasonable and not otherwise defective. The court modified the district court's judgment to show that the restitution owed by the Boltons does not become due until they begin their terms of supervised release. View "United States v. Bolton" on Justia Law

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The Fifth Circuit affirmed defendant's sentence after she pleaded guilty without a plea agreement to bank fraud. The court held that the district court did not clearly err by applying a two-level enhancement under USSG 3B1.3 for abusing a position of trust where she was the accounts payable clerk for her company and used her position to significantly commission and conceal her fraudulent scheme. The court also held that the district court did not clearly err by applying a two-level enhancement under USSG 2B1.1(b)(10)(C) for using sophisticated means where defendant employed multiple methods that made it more difficult to detect her bank fraud. View "United States v. Miller" on Justia Law

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The Fifth Circuit affirmed the district court's denial of claimants' motion to release property under civil forfeiture law. The property at issue stemmed from the sale of synthetic cannabinoids that were a controlled substance or controlled substance analogues intended for human consumption. Determining that the court had jurisdiction over the appeal, the court held that, assuming arguendo, Supplemental Rule G(2)(f) applied in reviewing pretrial property restraints outside the motion-to-dismiss context, the district court used the right standard. In this case, the district asked whether the government's complaint "demonstrated with sufficient particularity for the current stage of the proceedings that defendants intentionally commingled tainted funds with untainted funds for the purpose of facilitating the alleged money laundering.” The court held that the facts here were sufficient to support this standard. The court also held that probable cause for forfeiture existed based on the charge for conspiracy to commit mail and wire fraud. View "United States v. $472,871.95 in Funds Seized" on Justia Law

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The Fifth Circuit affirmed defendant's conviction of conspiracy to commit bank fraud. Defendant owned and operated a company that originated loans insured by the FHA. The court held that signing the loan application in the Eastern District established venue there. The court also held that there was no constructive amendment or variance because there was no difference between the jury concluding that the supporting documents were false and it deciding that the application contained those same falsehoods; the evidence supported the verdict where it did not matter that the loan application did not expressly affirm the veracity of the supporting documents; and the government's closing argument was not improper where the prosecution did not err in telling the jury that it had to "decide the truth," which after all was what the "verdict" means. View "United States v. Brown" on Justia Law

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The Fifth Circuit reversed the district court's order dismissing an indictment with prejudice. The indictment charged defendant, the owner and operator of an adoption agency, for fraud. The court held that there was no Brady violation where the evidence clearly was not suppressed; discovery violations did not warrant imposed sanctions where the district court failed to impose the least sever sanction and the government's violations of the discovery deadlines did not warrant dismissing the indictment with prejudice; and defendant failed to demonstrate prejudice sufficient to support the district court's severe sanction and thus the district court abused its discretion when it dismissed defendant's indictment with prejudice. The court remanded for reassignment of the case to a different district judge. View "United States v. Swenson" on Justia Law

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The Fifth Circuit affirmed defendant's convictions and sentences for charges related to his efforts in convincing about a hundred people to lend his companies millions of dollars. The court held that there was sufficient evidence to support the mail and wire fraud counts; there was sufficient evidence to support defendant's conviction for giving false testimony during a bankruptcy court proceeding; the district court's decision denying defendant's motion to suppress some prior statements under the Fifth Amendment was unreviewable because defendant neither testified nor proffered what he would have said; challenges to the admission of several summary charts denied; challenges to jury instructions as infirm were rejected; and there was no procedural error in defendant's sentence. View "United States v. Spalding" on Justia Law

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The Fifth Circuit affirmed defendant's conviction for aiding and abetting aggravated theft, which carries a mandatory consecutive two-year prison term. The court held that the evidence was sufficient to convict defendant because the jury could reasonably infer that when defendant accessed his bank accounts online, the online descriptions of the deposits were the same as reflected on the paper bank statements admitted at trial. Furthermore, the jury could have reasonably inferred that prior to the filing of the April 2013 tax returns, defendant knew or was deliberately ignorant regarding the fact that the bank drops were IRS tax refunds. Therefore, defendant's argument that he did not have the necessary intent under Rosemond v. United States, was thus unavailing. View "United States v. Carbins, Jr." on Justia Law