Justia Government & Administrative Law Opinion Summaries

Articles Posted in White Collar Crime
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Schock resigned from Congress in 2015, after disclosures about trips he took at public expense, the expense of his elaborate office furnishings, and how he had applied campaign funds. Schock was charged with mail and wire fraud, theft of government funds, making false statements to Congress and the Federal Elections Commission, and filing false tax returns. Schock moved to dismiss the indictment, arguing that the charges are inconsistent with the Constitution’s Speech or Debate Clause and with the House of Representatives’ constitutional authority to determine the rules of its proceedings. The Seventh Circuit affirmed the denial of the motion. The indictment arises out of applications for reimbursements, which are not speeches, debates, or any other part of the legislative process. Submitting a claim under established rules differs from the formulation of those rules. The foundation for Schock’s rule-making” argument—the proposition that if Body A has sole power to make a rule, then Body A has sole power to interpret that rule—does not represent established doctrine. “ Judges regularly interpret, apply, and occasionally nullify rules promulgated by the President or another part of the Executive Branch, as well as statutes enacted by the Legislative Branch; why would reimbursement rules be different?” View "United States v. Schock" on Justia Law

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In 2015, former Virgin Islands Senator James was charged with wire fraud, 18 U.S.C. 1343, and federal programs embezzlement, 18 U.S.C. 666(a)(1)(A), stemming from his use of legislative funds to ostensibly obtain historical documents from Denmark related to the Fireburn, an 1878 St. Croix uprising. The indictment specified: obtaining cash advances from the Legislature but retaining a portion of those funds for his personal use; double-billing for expenses for which he had already received a cash advance; submitting invoices and receiving funds for translation work that was never done; and submitting invoices and receiving funds for translation work that was completed before his election to the Legislature. James, who argued that he was engaged in legislative fact-finding, moved to dismiss the indictment on legislative immunity grounds. The district court denied the motion, stating that James’ actions were not legislative acts worthy of statutory protection under the Organic Act of the Virgin Islands. The Third Circuit affirmed. Under 48 U.S.C. 1572(d) legislators are protected from being “held to answer before any tribunal other than the legislature for any speech or debate in the legislature." The conduct underlying the government’s allegations concerning James is clearly not legislative conduct protected by section 1572(d). View "United States v. James" on Justia Law

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Porter, the mayor of Paintsville, Kentucky, steered business and contracts to companies owned by his co-defendant, Crace, and ensured payment of a fraudulent invoice to Crace’s company, in return for payments disguised as loans. Porter was charged with theft concerning programs receiving federal funds, 18 U.S.C. 666(a)(1)(A), and bribery concerning such programs, section 666(a)(1)(B) and was sentenced to 48 months of imprisonment. The Sixth Circuit affirmed, rejecting arguments that the conviction under section 666(a)(1)(B) was unsupported by sufficient evidence and that the admission of a witness’s prior statements to investigators and the admission of another witness’s deposition testimony violated his confrontation rights. A conviction under section 666(a)(1)(B) does not require evidence of a quid pro quo “in connection with” any “official act.” It is enough if a defendant corruptly solicits anything of value with the intent to be influenced or rewarded in connection with some transaction involving property or services worth $5000 or more. Testimony concerning prior statements to investigators did not violate Porter’s confrontation rights because they were not offered to prove the truth of the matter asserted. The government sufficiently demonstrated the unavailability of the deposition witness to testify at trial, so no Confrontation Clause violation occurred. View "United States v. Porter" on Justia Law

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The Indianapolis Land Bank was created to return tax-delinquent and other troubled properties into productive use. But, in 2011, Walton, the Land Bank’s manager, and Johnson began orchestrating the sale and resale of the city’s properties through a nonprofit loophole and pocketing the profits. The total loss to the city was $282,782.38. Johnson and Walton were convicted of honest services wire fraud, wire fraud, and conspiracy to engage in money laundering. Walton was also convicted of receiving bribes. The Seventh Circuit affirmed. The government provided substantial evidence that the two had specific intent, including evidence of kickbacks and making false statements, and provided to substantial evidence to support the money laundering convictions. Rejecting Walton’s argument that the court’s instruction on 10 U.S.C. 666 permitted the jury to convict him of accepting a gratuity and not a bribe, the court stated that the instruction and evidence made clear that Walton was convicted of accepting bribes, not gratuities. The convictions required proof of their bad intent (specific intent to commit fraud), so a good faith jury instruction was unnecessary. Both were properly subject to sentencing enhancements because their offenses involved a public official in a high-level decision-making position and they victimized vulnerable families. View "United States v. Johnson" on Justia Law

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The Mississippi Secretary of State found that David Watkins and Watkins Development, LLC, committed four securities-fraud violations in connection with revenue bonds sold to finance a renovation project at the Metrocenter mall in Jackson. Watkins appealed and the chancery court vacated one count but affirmed the other three. The Court of Appeals affirmed the Secretary on all four counts. The Mississippi Supreme Court granted certiorari and reversed the Court of Appeals in part because the Secretary failed to cross-appeal the chancellor’s decision to vacate Count I. That said, the Court affirmed the Secretary’s findings on the other three counts. View "Watkins Development, LLC v. Hosemann" on Justia Law

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Blair Olsen served as sheriff of Jefferson County from January 1989 until May 2015, when he resigned due to his conviction in this case. While he was the sheriff, the county provided Olsen with two cell phones and paid the bills for those phones. It initially did so because of unreliable service in different sides of the county. He also carried a personal cell phone and paid the charges for that service plan from his own funds. Once county-wide coverage was available from one of the providers, he discontinued service with the other provider and had both of his county-provided cell phones with the same provider. One cell phone was to be his primary cell phone and the other was to be his backup cell phone. At the same time, he terminated his personal cell phone service, but had the telephone number of his personal cell phone transferred to the backup cell phone. At some point, he permitted his wife to carry the backup cell phone for her personal use. The issue of Olsen’s wife using the backup cell phone became an election issue. Olsen asked the county commissioners to refer the matter to the Attorney General in an attempt to clear his name. A deputy attorney general obtained an indictment against Olsen charging him with three felony counts of knowingly using public money to make purchases for personal purposes based upon his wife’s use of the backup cell phone. Prior to trial, Olsen moved to dismiss the indictment or merge the three counts into one on the ground that the prosecution for three counts violated his right against double jeopardy. The charges were tried to a jury, and Olsen was found guilty of all three counts. The district court withheld judgment and placed Olsen on three years’ probation, and he appealed. The district court ruled that "I think the statute gives the prosecutor very clearly a substantial amount of discretion that says that the incidents may be aggregated into one count, but it doesn’t say they have to be aggregated into one count." In so holding, Supreme Court found that the district court erred. The Supreme Court affirmed the conviction of one count of misuse of public funds and remanded this case to vacate two other counts and amend the order withholding judgment accordingly. View "Idaho v. Olsen" on Justia Law

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From 2009-2012, the federal government appropriated $150 million annually to the government of the Virgin Islands; Willis was Executive Director of the Legislature for the Virgin Islands, with authority to administer contracts. During Willis’s tenure, the legislature’s main building underwent major renovations. Willis was substantially involved in securing contractors. Three contractors later testified that they gave cash or other items of value to Willis to secure more government work or to ensure payment of their invoices. In 2010, the U.S. Department of the Interior audited the legislature’s administrative section while the renovations were taking place and concluded that the legislature had mismanaged public funds. After an investigation, an indictment issued for Willis’s prosecution on extortion charges (18 U.S.C. 1951(a)) and bribery charges (18 U.S.C. 666(a)(1)). The Third Circuit affirmed his conviction and five-year prison term, upholding admission of evidence of Willis’s prior acceptance of bribes. The indictment adequately alleged all required elements of bribery: the parties, the relevant amounts of money exchanged, where the illegal transactions occurred, that Willis used his public position unlawfully, specific details of each transaction, and improper purposes under the federal statutes. The government proved a sufficient nexus between Willis’s conduct or his status as Executive Director and a corresponding effect on federal funds. View "United States v. Willis" on Justia Law

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Former Virginia Governor McDonnell, and his wife were indicted on honest services fraud and Hobbs Act extortion charges related to their acceptance of $175,000 in loans, gifts, and other benefits from Williams, the CEO of Star Scientific, which developed Anatabloc, a nutritional supplement made from a compound found in tobacco. Williams wanted McDonnell’s assistance in getting public universities to perform research studies on the product. The government asserted that McDonnell committed (or agreed to commit) an “official act” in exchange for the loans and gifts. An “official act” is “any decision or action on any question, matter, cause, suit, proceeding or controversy, which may at any time be pending, or which may by law be brought before any public official, in such official’s official capacity, or in such official’s place of trust or profit,” 18 U.S.C. 201(a)(3). The claimed “official acts,” included “arranging meetings” for Williams with other Virginia officials, “hosting” events at the Governor’s Mansion, and “contacting other government officials” concerning the studies. The district court instructed the jury that “official act” encompasses “acts that a public official customarily performs,” including acts “in furtherance of longer-term goals” or “in a series of steps to exercise influence or achieve an end.” The court declined to give McDonnell’s requested instruction that “merely arranging a meeting, attending an event, hosting a reception, or making a speech are not, standing alone, ‘official acts.’” The Fourth Circuit affirmed the convictions. A unanimous Supreme Court vacated. An “official act” involves a decision or action (or an agreement to act or decide) on “question, matter, cause, suit, proceeding or controversy,” by a formal exercise of governmental power. The pertinent matter must be more focused and concrete than “Virginia business and economic development,” and a decision or action is more than merely setting up a meeting, hosting an event, or calling another official. The government’s expansive interpretation of “official act” would raise significant constitutional concerns. Conscientious public officials arrange meetings for constituents, contact other officials on their behalf, and include them in events all the time. The jury instructions, therefore, were significantly overinclusive. View "McDonnell v. United States" on Justia Law

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Before the 2008 presidential election, federal agents were investigating then-Governor Blagojevich and obtained warrants authorizing the interception of his phone calls. When Barack Obama, then a Senator from Illinois, won the election, Blagojevich was to appoint his replacement. Interceptions revealed that Blagojevich viewed the opportunity to appoint a new Senator as a bonanza. After two trials, Blagojevich was convicted of 18 crimes, including attempted extortion from campaign contributors, corrupt solicitation of funds, wire fraud, and lying to federal investigators. The district court sentenced Blagojevich to 168 months’ imprisonment. The Seventh Circuit vacated convictions on five counts, concerning Blagojevich’s proposal to appoint Valerie Jarrett to the Senate in exchange for an appointment to the Cabinet, and remanded. The court rejected a challenge to the sufficiency of the evidence, but concluded the instructions permitted the jury to convict even if it found that his only request of Obama was for a Cabinet position. A proposal to trade one public act for another, logrolling, is unlike the swap of an official act for a private payment. The instructions do not ensure that the jury found that Blagojevich offered to trade the appointment for a private salary. Because the court affirmed on most counts and concluded that the sentencing range lies above 168 months, Blagojevich is not entitled to release pending further proceedings. View "United States v. Blagojevich" on Justia Law

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From 2005-2007, Wright, a real estate agent and the chief of staff for Philadelphia councilman Kelly, received gifts from Chawla, a developer, and attorney Teitelman, who got most of his work from Chawla's company, World Acquisition. Wright received a free stint in an apartment, free legal services, and was promised commissions. Wright shepherded a bill that Chawla favored through Kelly’s office, arranged meetings about a World Acquisition development, and communicated with city offices for World Acquisition. In 2008, a grand jury returned a 14-count indictment, charging honest services fraud, traditional fraud, conspiracy to commit both kinds of fraud, and bribery in connection with a federally funded program. The jury convicted Chawla, Teitelman, and Wright of: conspiracy to commit honest services and traditional fraud and honest services and traditional fraud for the apartment arrangement and convicted Chawla alone of honest services for offering Wright liaison work. It acquitted on the other counts. After remand, the defendants moved, unsuccessfully, to preclude the government from relitigating certain issues under the Double Jeopardy Clause and from constructively amending the indictment. the Third Circuit held that it lacked jurisdiction because the ruling is not a “collateral” order subject to immediate review and was not otherwise a “final decision” under 28 U.S.C. 1291. View "United States v. Wright" on Justia Law