Justia U.S. 2nd Circuit Court of Appeals Opinion Summaries

Articles Posted in White Collar Crime
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The term "false or fictitious" as used in 18 U.S.C. 514 refers to both wholly contrived types of documents or instruments and fake versions of existing documents or instruments. The Second Circuit affirmed defendant's conviction under section 514, holding that the evidence was sufficient to support his conviction. In this case, defendant used fake government transportation requests and purchase orders to various companies while posing as a "Commissioner and Head of Delegation" of a nongovernmental organization he created. View "United States v. Jones" on Justia Law

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The Second Circuit affirmed Defendants Napout and Marin's convictions for multiple counts of conspiracy to commit honest services wire fraud. Defendants were former officials of the global soccer organization Fédération Internationale de Football Association (FIFA). The court held that defendants' convictions rest upon permissible domestic applications of the wire fraud statute, 18 U.S.C. 1343. Furthermore, the court cannot conclude in light of binding precedent that the district court committed plain error with respect to the issue of whether the honest services wire fraud statute, 18 U.S.C. 1346, is unconstitutionally vague as applied to defendants. The court also held that the evidence presented at trial was sufficient to affirm the district court's judgment of conviction; and that the challenged evidentiary rulings of the district court were not error. Finally, the court held that defendants' remaining arguments are without merit. View "United States v. Napout" on Justia Law

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The Second Circuit certified two questions to the New York Court of Appeals: 1) Whether a stock conversion option that permits a lender, in its sole discretion, to convert any outstanding balance to shares of stock at a fixed discount should be treated as interest for the purpose of determining whether the transaction violates N.Y. Penal Law 190.40, the criminal usury law. 2) If the interest charged on a loan is determined to be criminally usurious under N.Y. Penal Law 190.40, whether the contract is void ab initio pursuant to N.Y. Gen. Oblig. Law 5-511. View "Adar Bays, LLC v. GeneSYS ID, Inc." on Justia Law

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The Second Circuit affirmed defendants' convictions on fourteen counts including collection of unlawful usurious debt, and conspiracy to do so, wire fraud, and money laundering, arising out of defendants' operation of a payday lending business. The court held that, even assuming that the charge with respect to Counts 2-4 was erroneous, the error did not affect the verdict, and thus defendants have not satisfied the requirements of plain error; the jury necessarily found in rendering a guilty verdict on Count 1, for which an undisputedly correct willfulness instruction was given as to the conspiracy element, that defendants were aware of the unlawfulness of their making loans with interest rates that exceeded the limits permitted by the usury laws; and the evidence of defendants' willfulness was overwhelming. The court also held that defendants' other contentions are without merit. Finally, the court found that the district court did not abuse its discretion in denying Defendant Tucker's application to stay the execution of the forfeiture order entered against him following his conviction. View "United States v. Tucker" on Justia Law

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The Second Circuit affirmed the district court's order of restitution, imposed after defendant pleaded guilty to four counts of wire fraud in 2018 for submitting false expense-reimbursement forms to the Department of Labor. The court held that the restitution order was proper under the Mandatory Victims Restitution Act because all of the losses resulted from the same "scheme," even though some occurred outside the limitations period for the underlying crime. Therefore, the district court did not abuse its discretion by ordering defendant to pay $72,207.16 in restitution. View "United States v. Parnell" on Justia Law

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Defendant appealed his conviction and sentence for various tax offenses, including making and subscribing to a false tax return, tax evasion, and attempting to interfere with the administration of the internal revenue laws. Defendant's charges stemmed from his efforts, over the course of 14 years, to engage in a concerted campaign to obstruct the IRS's efforts to collect his delinquent tax payments and to secure overdue tax returns. The Second Circuit held that the district court lacked authority to require restitution payments to begin immediately following defendant's sentencing. However, the court held that, in assessing tax loss under USSG 2T1.1 application note 1, the district court was permitted to rely on uncharged relevant conduct constituting "willful evasion of payment" in violation of 26 U.S.C. 7201 and "willful failure to pay" in violation of 26 U.S.C. 7203. The court held that defendant's remaining claims were unavailing and affirmed the judgment as modified. View "United States v. Adams" on Justia Law

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The Second Circuit affirmed defendant's 70-month sentence for tax offenses. The court held that the district court did not abuse its discretion by denying his post‐trial request for a competency hearing based chiefly on his adherence to the Sovereign Citizen movement. The court held that the record supported the district court's conclusion that defendant's words and actions reflected his anti‐government political views and legal theories rather than an inability to understand the proceedings against him. The court also held that the district court did not abuse its discretion in deciding to give no weight to the report of defendant's expert, because the report was based on insufficient facts and data, and the district court did not abuse its discretion in finding that the expert employed unreliable principles and methods. Finally, even if the court were to conclude that the district court improperly relied on another expert's testimony without explicitly ruling on its admissibility or reliability under Federal Rule of Evidence 702, the error would be harmless. View "United States v. DiMartino" on Justia Law

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Defendant, the former Speaker of the New York State Assembly, was convicted of two counts each of honest services mail fraud, honest services wire fraud, and Hobbs Act extortion, and one count of money laundering. The Second Circuit held that extortion under color of right and honest services fraud require that the official reasonably believe, at the time the promise is made, that the payment is made in return for a commitment to perform some official action. However, neither crime requires that the official and payor share a common criminal intent or purpose. The court also held that both offenses require that the official understand—at the time he accepted the payment—the particular question or matter to be influenced. In this case, the district court's instructions failed to convey this limitation on the "as the opportunities arise" theory, and the error was not harmless with respect to defendant's convictions under three counts. Furthermore, the evidence as to the same three counts was insufficient as a matter of law to sustain a guilty verdict, and thus the court remanded with directions to dismiss the indictment with prejudice as to them. The court found the error was harmless as to Counts 3s, 4s, and 6s, and affirmed defendant's conviction on those counts. Finally, the court affirmed defendant's conviction under Count 7s for money laundering, because that crime does not require the defendant to be convicted of the underlying criminal offenses, nor does it require the underlying offense to take place within the limitations period. View "United States v. Silver" on Justia Law

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The Second Circuit affirmed defendant's convictions for wire fraud, Title 18 securities fraud, conversion of U.S. property, and conspiracy, arising from the misappropriation of confidential information from the Centers for Medicare & Medicaid Services. The federal wire fraud, securities fraud, and conversion statutes, are codified at 18 U.S.C. 1343, 1348, and 641, respectively. The court held that confidential government information may constitute "property" for purposes of the wire fraud and Title 18 securities fraud statutes. The court also held that the "personal-benefit" test announced in Dirks v. SEC, 463 U.S. 646 (1983), does not apply to those Title 18 fraud statutes. Finally, the panel found no prejudicial error with respect to the remaining issues presented on appeal. View "United States v. Blaszczak" on Justia Law

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The Second Circuit affirmed defendants' convictions for honest services fraud and honest services fraud conspiracy, conspiracy to violate the Travel Act, and conspiracy to commit money laundering. However, the court held that the district court failed to employ a sound methodology to determine the victim's actual loss for restitution; the district court erred in ordering forfeiture of an amount that exceeded the amount of the criminal proceeds; and, under the circumstances of this case, Honeycutt v. United States, 137 S. Ct. 1626 (2017), did not foreclose ordering defendants jointly and severally to forfeit the proceeds each possessed as a result of their crimes. Accordingly, the court affirmed in part, vacated in part, and remanded for further proceedings. View "United States v. Tanner" on Justia Law