Justia U.S. 5th Circuit Court of Appeals Opinion Summaries

Kenneth Bryan Ritchey, the defendant, operated Gulf Coast Pharmaceuticals Plus, LLC, a wholesale distributor of pharmaceutical products. During the COVID-19 pandemic, Ritchey directed his employees to acquire large quantities of personal protective equipment (PPE) and resell them at inflated prices to various healthcare providers, including the Department of Veterans Affairs (VA). The VA was charged significantly higher prices than the market value, resulting in Ritchey and his company receiving over $2 million, including more than $270,000 from the VA.Ritchey was charged with six counts, including conspiracy to defraud the United States. He pled guilty to violating 18 U.S.C. § 371, and the remaining counts were dismissed. The United States District Court for the Southern District of Mississippi calculated Ritchey’s offense level based on the estimated pecuniary loss caused by his actions, which included a significant enhancement for the amount of loss. The court determined the fair market value (FMV) of the PPE based on pre-pandemic prices and 3M’s pricing, leading to a higher offense level and a 60-month prison sentence.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court found that the district court erred in calculating the FMV by relying on pre-pandemic prices and 3M’s pricing, which did not reflect the actual market conditions during the pandemic. The appellate court held that the district court’s method of determining the FMV was not based on a realistic economic approach. Consequently, the Fifth Circuit vacated Ritchey’s sentence and remanded the case for resentencing, emphasizing the need for a more accurate calculation of the FMV that reflects the market conditions at the time of the transactions. View "United States v. Ritchey" on Justia Law

Josephine Perez-Gorda was convicted of fraud after she and her husband, Justin, misrepresented his medical condition to the U.S. Department of Veterans Affairs. Justin, who suffered a brain injury while on duty, and Perez-Gorda claimed he was unable to walk or care for himself, leading to the receipt of various government benefits, including a new home, car, and caregiver stipend. However, evidence showed Justin was more mobile and self-sufficient than they had represented. After Justin's death in 2022, Perez-Gorda was indicted on multiple counts of wire fraud, mail fraud, health care fraud, conspiracy to commit health care fraud, and aiding and abetting offenses.The United States District Court for the Western District of Texas convicted Perez-Gorda on all counts, and she was sentenced to forty-six months in prison. Perez-Gorda appealed, arguing that the jury instructions on wire and mail fraud were erroneous based on intervening circuit precedent. She did not object to these instructions at trial. The Fifth Circuit reviewed the instructions for plain error and found them erroneous but concluded that the error did not affect Perez-Gorda’s substantial rights, as there was no reasonable probability that the jury would have acquitted her under the correct instructions.Perez-Gorda also challenged statements made during the grand jury proceedings and the sufficiency of the evidence supporting the jury verdicts. The Fifth Circuit found that the statements did not influence the grand jury’s decision and that a rational jury could have found her guilty beyond a reasonable doubt. Additionally, Perez-Gorda contested her sentence, specifically the two-level upward adjustment for her role as an organizer or leader. The Fifth Circuit reviewed this factual finding for clear error and upheld it, noting evidence that Perez-Gorda supervised Justin in the fraudulent activities. The Fifth Circuit affirmed the district court’s judgment. View "USA v. Perez-Gorda" on Justia Law

Ethan Sturgis Day was involved in a fraudulent scheme that purported to sell shipping containers converted into housing units. The scammers, including Day, misrepresented their credentials and affiliations to lure customers, collected payments, and never delivered the promised container homes. Day managed employees and the scammers' bank accounts. The Presentence Investigation Report (PSR) identified 41 victims and assessed a loss amount of $2,563,123.72, but only detailed the financial circumstances of eight victims.The United States District Court for the Western District of Texas sentenced Day to 101 months of incarceration and three years of supervised release. The court enhanced Day's offense level based on the loss amount and for causing substantial financial hardship to 25 or more victims, as well as for his role as an organizer or leader. Day objected to these enhancements, but the district court overruled his objections and adopted the PSR. After a restitution hearing, the court lowered the loss amount by nearly $1 million and re-sentenced Day to 101 months, maintaining the same enhancements.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court found that the district court erred in applying the six-point enhancement for substantial financial hardship to 25 or more victims, as the record did not support that 25 or more victims experienced substantial financial hardship. However, the court upheld the two-point enhancement for Day's role as an organizer or leader, noting that he exercised control over other participants and managed significant assets of the fraud. Consequently, the Fifth Circuit vacated Day's sentence and remanded the case for resentencing. View "United States v. Day" on Justia Law

Two defendants, Arturo Cuellar ("AC") and Ricardo Quintanilla, were involved in a scheme to bribe city commissioners in Weslaco, Texas, to secure contracts for an infrastructure project. The bribes were intended to influence the awarding of contracts to Camp Dresser & McKee (CDM) and Briones Consulting and Engineering, Ltd. Quintanilla bribed Commissioner Gerardo Tafolla, while AC bribed Commissioner John Cuellar (JC). Leo Lopez, a consultant for CDM and Briones, facilitated the bribes. The scheme involved multiple meetings and payments, with both commissioners taking actions to favor CDM and Briones. The city paid approximately $42.5 million to CDM, Briones, and LeFevre, with Lopez distributing funds to AC and Quintanilla.The United States District Court for the Southern District of Texas convicted Quintanilla and AC of various federal offenses, including conspiracy to commit honest-services wire fraud, honest-services wire fraud, federal program bribery, conspiracy to launder monetary instruments, and money laundering. Quintanilla was sentenced to 200 months in custody, while AC received 240 months. Both were also ordered to pay fines, special assessments, restitution, and forfeiture amounts. The defendants appealed their convictions and sentences.The United States Court of Appeals for the Fifth Circuit reviewed the case and affirmed the convictions and sentences. The court addressed several issues raised by the defendants, including claims of constructive amendment of the indictment, sufficiency of the indictment, recusal of the district judge, and evidentiary rulings. The court found that the government did not constructively amend the indictment and that the evidence supported the convictions. The court also held that the district judge did not need to recuse herself and that the evidentiary rulings were within the court's discretion. The court concluded that the defendants' arguments were either forfeited, not meritorious, or both. View "USA v. Quintanilla" on Justia Law

Richard Plezia, a Houston-based personal injury attorney, was charged with conspiracy to defraud the United States, making false statements, and falsifying records in a federal investigation. The charges stemmed from allegations that Plezia conspired with other attorneys and case runners to unlawfully reduce the federal income taxes owed by Jeffrey Stern. The scheme involved funneling illegal payments through Plezia to case runner Marcus Esquivel, which were then falsely reported as attorney referral fees.The United States District Court for the Southern District of Texas held a fifteen-day jury trial, where Plezia was convicted on all counts. Plezia challenged the sufficiency of the evidence, the equitable tolling of the statute of limitations for one count, and the admission of certain witness testimonies. The district court denied his motions for acquittal and a new trial, and sentenced him to six months and one day in prison, followed by two years of supervised release.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court agreed with Plezia that the statute of limitations for the false statements charge was not subject to equitable tolling and vacated his conviction on that count, remanding with instructions to dismiss it with prejudice. However, the court affirmed the remaining convictions, finding sufficient evidence to support the jury's verdict on the conspiracy and falsification charges. The court also held that any error in admitting witness testimonies was harmless given the overwhelming evidence of guilt. View "United States v. Plezia" on Justia Law

The defendant was convicted of four counts of fraud for submitting two fraudulent Paycheck Protection Program (PPP) loan applications during the COVID-19 pandemic. She misrepresented the number of employees and payroll expenses for her businesses, requesting nearly $4 million in total. One application was denied, and the funds from the other were frozen and seized before she could access them. Throughout the prosecution, the defendant had conflicts with multiple appointed attorneys, leading to several motions to substitute counsel, all of which were denied by the district court. The trial proceeded with the defendant absent on the first day after she refused to change out of her jail clothes and participate, but she was present for the remainder of the trial.The United States District Court for the Southern District of Texas denied the defendant's motions to substitute counsel, finding no substantial conflict or complete breakdown in communication that warranted new counsel. The court also determined that the defendant had voluntarily waived her right to be present at the trial by refusing to cooperate and change into street clothes. The jury found the defendant guilty on all counts, and the court sentenced her to 70 months of imprisonment and ordered her to pay over $2 million in restitution to the Small Business Administration (SBA).The United States Court of Appeals for the Fifth Circuit reviewed the case and affirmed the district court's decisions. The appellate court held that the district court did not abuse its discretion in denying the motions to substitute counsel, as the defendant's intransigence caused the communication breakdown. The court also found that the district court properly concluded the defendant voluntarily waived her right to be present at trial. Additionally, the appellate court upheld the district court's sentencing enhancement based on intended loss and the restitution order, finding no clear error in these determinations. View "United States v. Kasali" on Justia Law

The case involves Priscilla Yvette Cervantes, who was convicted of participating in a drug-trafficking conspiracy to possess and aid in the possession of a controlled substance with the intent to distribute. The conspiracy was orchestrated by the Federal Bureau of Investigation (FBI) as a reverse-sting operation targeting Cervantes's boyfriend and later husband, Alexsander Reyes, a former Harris County Precinct One Constable’s Deputy suspected of corruption and stealing drugs from law enforcement seizures. Cervantes accompanied Reyes on multiple occasions, including transporting money and escorting drugs for a fake cartel in exchange for cash payments.The case was initially heard in the United States District Court for the Southern District of Texas, where Cervantes was found guilty on both counts of conspiring and aiding and abetting possession with the intent to distribute a controlled substance. Cervantes moved for acquittal on both counts, arguing that there was insufficient evidence to show that she or Reyes ever actually or constructively possessed the cocaine, or that she knew, or reasonably should have known, that the weight of the cocaine was at least five kilograms. The district court denied the motion.On appeal to the United States Court of Appeals for the Fifth Circuit, Cervantes raised three issues. She argued that the district court erred in denying her motion for acquittal, in failing to give a jury instruction that she could not be in a conspiracy alone with a government agent, and in excluding a video clip of Reyes's post-arrest interview with an FBI agent. The Court of Appeals affirmed the district court's decision, finding that there was substantial evidence for the jury to find beyond a reasonable doubt that Cervantes and Reyes engaged in an agreement to possess with the intent to distribute a controlled substance. The court also found no error in the district court's refusal to give a specific jury instruction or in its decision to exclude the video clip. View "United States v. Cervantes" on Justia Law

The case involves Maria E. Garcia and Liang Guo Yu, who were convicted for money laundering. The charges stemmed from their involvement with the Villalobos drug trafficking organization (DTO) in Houston, Texas. The DTO was known for moving hundreds of kilograms of cocaine and making yearly profits in the millions. Garcia and Yu were implicated in the seizure of large sums of cash during two separate searches. They were charged with conspiring to launder monetary instruments and aiding and abetting money laundering. Both defendants appealed their convictions, arguing that the evidence was insufficient to prove beyond a reasonable doubt that they committed the offenses.Prior to their trial, the defendants had their motions for a new trial and to suppress denied by the district court. At trial, the government presented testimony from ten witnesses and introduced dozens of exhibits. The jury found Garcia and Yu guilty of both charges. Post-trial, the district court denied all three motions for a new trial and for a judgment of acquittal. Garcia was sentenced to two concurrent 78-month terms of imprisonment and two concurrent 3-year terms of supervised release. Yu was sentenced to two concurrent 151-month terms of imprisonment and two concurrent 3-year terms of supervised release.The United States Court of Appeals for the Fifth Circuit affirmed the judgments of the district court. The court found that the evidence presented at trial was sufficient to prove the defendants' guilt beyond a reasonable doubt. The court also held that the district court did not err in assessing a sentencing enhancement for Garcia and in denying Yu's motion to suppress without conducting an evidentiary hearing. The court further held that the district court did not err in denying Yu's motion for a new trial as untimely. View "USA v. Garcia" on Justia Law

A group of individuals, including D&T Partners LLC and ACET Global LLC, alleged that Baymark Partners Management LLC and others attempted to steal the assets and trade secrets of their e-commerce company through shell entities, corrupt lending practices, and a fraudulent bankruptcy. The plaintiffs claimed that Baymark had purchased D&T's assets and then defaulted on its payment obligations. According to the plaintiffs, Baymark replaced the company's management, caused the company to default on its loan payments, and transferred the company's assets to another entity, Windspeed Trading LLC. The plaintiffs alleged that this scheme violated the Racketeer Influenced and Corrupt Organizations Act (RICO).The case was initially heard in the United States District Court for the Northern District of Texas. The district court dismissed all of the plaintiffs' claims with prejudice, finding that the plaintiffs were unable to plead a pattern of racketeering activity, a necessary element of a RICO claim.The case was then taken to the United States Court of Appeals for the Fifth Circuit. The appellate court agreed with the district court, holding that while the complaint alleges coordinated theft, it does not constitute a "pattern" of racketeering conduct sufficient to state a RICO claim. This is because the alleged victims were limited in number, and the scope and nature of the scheme was finite and focused on a singular objective. Therefore, the appellate court affirmed the district court’s judgment. View "D&T Partners v. Baymark Partners" on Justia Law

A jury convicted United Development Funding (“UDF”) executives (collectively “Appellants”) of conspiracy to commit wire fraud affecting a financial institution, conspiracy to commit securities fraud, and eight counts of aiding and abetting securities fraud. Jurors heard evidence that Appellants were involved in what the Government deemed “a classic Ponzi-like scheme,” in which Appellants transferred money out of one fund to pay distributions to another fund’s investors without disclosing this information to their investors or the Securities Exchange Commission (“SEC”). Appellants each filed separate appeals, challenging their convictions on several grounds. Considered together, they argue that (1) the jury verdict should be vacated because the evidence at trial was insufficient to support their convictions or, alternatively, (2) they are entitled to a new trial because the jury instructions were improper. Appellants also argue that the district court erred in (3) limiting cross-examination regarding a non-testifying government informant; (4) allowing the Government to constructively amend the indictment and include certain improper statements in its closing argument; (5) imposing a time limit during.   The Fifth Circuit affirmed the jury verdict in its entirety. The court explained that considering the evidence and drawing all reasonable inferences in the light most favorable to the verdict, a reasonable juror could have determined that Appellants made material misrepresentations in UDF III and UDF V’s filings that were sufficient to uphold their convictions. The court explained that multiple witnesses testified that the industry had shifted away from affiliate transactions because they were disfavored and that a no-affiliate-transaction policy in UDF V would enable it to participate in a larger network of brokers, dealers, and investors. View "USA v. Greenlaw" on Justia Law