Articles Tagged with “Fraud Crimes”

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Happy Monday!

We have three short but good cases from the circuits from last week. I think my favorite is U.S. v. Glover, a nice suppression case. Congrats to Adam Kurland for the win.

To the victories!

1155650_berlin_siegessule.jpg1. Huff v. U.S., Sixth Circuit: Appellant entered a plea agreement, pleading guilty to various fraud and identity theft charges. The parties also agreed to use the November 1, 2002 Sentencing Guideline Manual but the court used a later version, resulting in a higher sentencing range. When Appellant first appealed, his attorney talked him into dismissing and the district court rejected Appellant’s ineffective assistance of counsel claim without an evidentiary hearing. The Sixth Circuit reverses and remands because a hearing was necessary to properly evaluate the ineffective assistance of counsel claim.

Defense Attorney: Michael M. Losavio
2. U.S. v. Bruguier, Eighth Circuit: After a jury trial, Appellant was convicted of sexual abuse, burglary, aggravated sexual abuse, and sexual abuse of a minor and sentenced to 360 months imprisonment. Appellant argued that the jury instructions for sexual abuse omitted a mens rea element. Agreeing with Appellant, the Eighth Circuit remanded for a new trial on the sexual abuse count and vacated Appellant’s sentence.

3. U.S. v. Glover, DC Circuit: Glover was convicted of conspiring to possess and distribute cocaine. A warrant was issued in D.C. but allowed the police to place an electronic bug on Glover’s truck which was parked in Maryland. The D.C. Circuit found that this warrant was facially insufficient and the evidence obtained pursuant to it should have been suppressed. Because the district court did not suppress the evidence, the conviction is reversed.

Defense Attorneys: Adam H. Kurland and Robert S. Becker

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It’s a good week for reversals in fraud cases.

The Second Circuit sent two fraud cases back for resentencing, and vacated a conviction in its entirety! And they’re cool issues — for example, for the “mass marketing” enhancement under the fraud guidelines to apply, the government has to show not just that mass marketing happened, but that mass marketing happened to victims. A number of convictions were also vacated in a criminal tax prosecution, and the Second Circuit found a violation of the defendant’s public trial right.

The D.C. Circuit entered the fraud remand fray, sending a criminal copyright case back because of errors in the restitution order.

Exciting stuff.

For those who are obsessive about extraterritorial criminal law (a growing number of folks, these days), the Eleventh Circuit vacated a few convictions for people convicted of violating U.S. drug trafficking laws for things they did in Panamanian waters.

To the victories!

1155650_berlin_siegessule.jpg1. United States v. Bellaizac-Hurtado, Eleventh Circuit: As a result of observations by the United States Coast Guard in the territorial waters of Panama, four people were convicted in the United States of engaging in a drug trafficking conspiracy. Panama consented to prosecution in the United States. Because drug trafficking is not “an offense against the Law of Nations” under the Maritime Drug Law Enforcement Act, Congress exceeded its power under the Act’s Offenses Clause when it proscribed the conduct in the territorial waters of Panama. Consequently, the Act is unconstitutional as applied to these four individuals and, as a result, the convictions were vacated.

2. United States v. Marquez, First Circuit: In crack cocaine distribution case, appellant was sentenced to 121 months in prison based on the district court’s finding that he had acquired for distribution 304 grams of crack in two 152-gram allotments. Although it was not error to attribute the first 152-gram allotment to appellant, the court committed clear error in attributing the other 152-gram acquisition to appellant because there was no evidence to support the finding that the additional quantity was actually 152 grams. This secondary finding had a “dramatic leveraging effect,” as it triggered a 120-month mandatory minimum. Consequently, appellant’s sentence was vacated and the case remanded for resentencing.

3. United States v. Lacy, Henry, Second Circuit: In mortgage fraud case, the district court erred in applying a two-level enhancement to appellants’ sentences for an offense “committed through mass-marketing” under Guideline § 2B1.1(b)(2)(A)(ii) without making sufficient findings to show that the targets of the mass-marketing scheme were also in some way victims of the scheme. Consequently, remand for additional findings was required. The court also failed to credit any of the value of the collateral in formulating its restitution orders, warranting remand for recalculation of the restitution amount.

4. United States v. Gyanbaah, et al., Second Circuit: Appellant was convicted of five offenses arising out of his participation in a fraudulent tax return scheme. Because there was insufficient evidence to convict him of bank fraud and aggravated identity theft related to the bank fraud, his convictions on these counts were vacated and the case remanded for resentencing.

5. United States v. Gupta, Second Circuit: In immigration fraud cause, appellant’s sixth amendment right to a public trial was violated when the district court intentionally excluded the public from the courtroom during the entirety of jury selection without first considering the following factors: (1) the party seeking to close the proceeding must advance an overriding interest that is likely to be prejudiced; (2) the closure must be no broader than necessary to protect that interest; (3) the trial court must consider reasonable alternatives to closing the proceeding; and (4) the trial court must make findings adequate to support the closure. Consequently, appellant’s conviction was vacated.

6. United States v. Fair, DC Circuit: In copyright infringement and mail fraud case, the district court erred in entering a restitution order against appellant because the government failed to meet its burden under the Mandatory Victim Restitution Act to present evidence from which the court could determine the victim’s actual loss. Consequently, the restitution order was vacated.

7. United States v. Woodard, Tenth Circuit: Appellant’s conviction for possession of more than 100 kilograms of marijuana with intent to distribute was reversed because there was a reasonable probability that the jury would have reached a different result had appellant been allowed to cross-examine a witness about a prior judicial determination that the witness was not credible.

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White-collar criminal cases present unique challenges. White-collar cases often involve vast amounts of information – in addition to a subject matter that’s complicated and all the difficulties of a general federal criminal case.

For example, I had a case that had close to 60 gigabytes of evidence produced by the government, not counting the information that I collected through my own investigation.

The information deluge is a problem in figuring out a case. It’s also a problem in figuring out how to present a case to a jury.

Yet the way this information is conveyed to the jury in a white-collar case is the same as in any trial – it is primarily explained through witnesses or other demonstrative evidence. No trial lawyer sends the jury back with 80 boxes of documents and tells them that if they examine it all, they’ll reach the right verdict.

The government often handles this challenge by using summary evidence. Basically, the Federal Rules of Evidence lets a party introduce evidence that summarizes other evidence in a case. So, the government will frequently make a chart that summarizes what other documents in the case revealed, or what other witnesses said. The summary is admitted as evidence – it gets shown to the jury during trial and it goes back to the jury room during deliberations.*

Of course, summary evidence is often not a friend to the defense. By cherry picking the worst parts of the documents, the government can create an impression for the jury that’s unhelpful in the quest for an acquittal.

The Tenth Circuit, in a mortgage fraud case, recently reversed (one count of) a conviction because the district court admitted a summary chart that was clearly inadmissible. The case is United States v. Irvin.

The core of the mortgage fraud case was that the people on trial – Mr. Vanatta and Mr. Miller – had provided false information on behalf of home buyers so that they could get mortgages. Mr. Sparks helped and was charged. He preferred his chances with the United States Attorney’s Office’s 5K1.1 committee, and testified for the government.

As the Tenth Circuit explained the allegations,

In order to ensure that otherwise unqualified buyers could obtain financing, Sparks and Vanatta enhanced such buyers’ apparent creditworthiness by, among other things, overstating the buyers’ income, altering bank statements to add deposits, and drafting false letters of employment. The mortgage lenders were further induced to extend financing through Miller’s use of inflated home appraisals, overvaluing the relevant properties and thereby enhancing the lenders’ perceived loan-to-collateral ratio.

If you’ve been reading the news lately, or purchased a home between 2003 and 2008, these kinds of allegations are probably not new to you.

The summary evidence in United States v. Irvin summarized a large number of loan documents.

The underlying loan documents, though, were not admitted into evidence. In fact, they were inadmissible as hearsay, because they contained thousands of statements of facts.

Hearsay, for the uninitiated, includes statements in documents that someone wants to get in front of a jury – it isn’t limited to someone repeating what another person said from the witness stand.

So, if you have an email from Larry, and Larry describes something that happened, Larry’s email is hearsay.

Hearsay can be a part of a trial, but there has to be an exception that applies to allow it to be admissible. There are many hearsay exceptions.**

One hearsay exception is for business records. If, for example, a mortgage company keeps certain records for it’s business, and you can meet certain criteria, and have someone from the mortgage company testify that those criteria are met, then you can introduce the loan documents.

Though in Irvin, the government didn’t do that. It had no witness from the company to show that the hearsay exception applied, so it wasn’t able to admit them.

Since the documents that made up the summary document were inadmissible, the summary document itself was inadmissible.

* This is not the same, as a matter of legal doctrine, as a summary witness. The government really likes to use those too. When the government uses a summary witness, an agent will get on the stand and basically narrate what she can about what happened in the case – it’s like the government gets to provide another opening statement. As the D.C. Circuit has observed, there are some problems with summary witnesses too.

** Here’s a cute video on hearsay exceptions that may not make any sense if you haven’t been to law school.



(Why do lawyers think it’s funny to see legal terms used in a song?)