Justia U.S. 10th Circuit Court of Appeals Opinion Summaries

Articles Posted in White Collar Crime
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Defendant Karen McClaflin pled guilty to two counts stemming from the operation of a “fix and flip” real estate Ponzi scheme which defrauded investors of more than $14.5 million dollars. At sentencing, the district court calculated the advisory sentencing guidelines at 135 to 168 months’ imprisonment, applied a 6-level enhancement for substantial financial hardship to more than twenty-five victims, and then determined a downward variant sentence of 96 months was appropriate. On appeal, McClaflin argued the district court: (1) abused its discretion by denying her motion for an additional continuance of the sentencing hearing; (2) procedurally erred by imposing the 6-level enhancement based upon victim impact statements; and (3) failed to consider all of the requisite 18 U.S.C. 3553(a) factors. The Tenth Circuit determined the district court did not plainly err when it sentenced McClaflin, therefore it affirmed the judgment and sentence. View "United States v. McClaflin" on Justia Law

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Robert Holloway was convicted by jury of four counts of wire fraud, and one count of submitting a false tax return. Holloway was the president and CEO of US Ventures, a company that traded in the futures market. Holloway told investors he had developed a special algorithm that allowed him to trade without losses. He claimed that because of the algorithm he “could trade the markets and make money whether the market went up or the market went down.” Holloway’s grandiose claims were false, and revealed to be a Ponzi scheme. The district court sentenced Holloway to 225 months’ imprisonment, after applying a six-level enhancement for crimes involving 250 or more victims under U.S.S.G. 2B1.1(b)(2)(C) (2014). After unsuccessfully challenging his conviction and sentence on direct appeal, Holloway filed a 28 U.S.C. 2255 motion, arguing: (1) a total breakdown of communication between Holloway and his trial counsel caused his trial counsel to perform ineffectively; (2) his trial counsel acted ineffectively by failing to argue that the evidence did not support the district court’s application of the six-level sentencing enhancement; and (3) the prosecution violated his due process rights by failing to turn over to the defense favorable information possessed by a prosecution witness contrary to Brady v. Maryland, 373 U.S. 83 (1963). The district court denied Holloway’s 2255 motion, but granted a certificate of appealability on all three issues. Finding no reversible error, the Tenth Circuit affirmed the district court judgment. View "United States v. Holloway" on Justia Law

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Wendy and Daryl Yurek were charged with tax evasion and bankruptcy fraud. After a joint jury trial, the Yureks were convicted on both offenses. The district court then sentenced Mrs. Yurek to a prison term of 27 months, leading her to appeal the conviction and sentence. On appeal, Mrs. Yurek challenged the sufficiency of the evidence presented against her, and claimed the district court erred in denying her motions for severance and a new trial. The Tenth Circuit affirmed in part and reversed in part: affirming Mrs. Yurek’s conviction, but vacated her sentence. The Court determined the district court applied the wrong test when deciding whether to grant a mitigating-role adjustment. View "United States v. Yurek (Wendy)" on Justia Law

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Shawn Gorrell was an insurance salesman based in Tulsa, Oklahoma. His father was an accountant in Tulsa whose clients included several dentists and Gorrell sold insurance to some of them. In 2009, Gorrell began to pitch investments to these dentists that were outside of his typical insurance products. Some dentists initially gave Gorrell modest sums to invest, but later the amounts ballooned to hundreds of thousands of dollars. Gorrell would ultimately be convicted by jury on three counts of wire fraud and three counts of tax evasion. He appealed only the tax evasion charges, seeking a new trial on those counts. He argued the trial court plainly erred when it instructed the jury to consider “specified theories of an affirmative act (an element of tax evasion), which were legally invalid theories of guilt as a matter of law, the jury was instructed to be unanimous in finding an affirmative act, and the jury returned a general verdict of guilt.” The Tenth Circuit concluded the district court did not err, “much less plainly err,” in its instructions to the jury. Given the evidence elicited at trial, in light of those instructions, Gorrell’s convictions for tax evasion were supported. View "United States v. Gorrell" on Justia Law

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In 2014, CNB auditors conducted a surprise audit of the Burlington, Kansas Central National Bank (“CNB” or “Bank”) vault. The vault was missing $764,000. When they began to suspect defendant Denise Christy, she forged documents to purport that she had sent the missing cash to the Federal Reserve Bank of Kansas City (“FRB”). A grand jury indicted her on one count of bank embezzlement, six counts of making false bank entries, six counts of failing to report income on her taxes, and 10 counts of money laundering. After a six-day trial, a jury found Christy guilty of all charges except four money laundering counts. On appeal, Christy argued: (1) cumulative prosecutorial misconduct violated her due process rights; (2) the evidence was insufficient for her money laundering convictions; and (3) the jury instructions improperly omitted a “materiality” element for the false-bank-entry charges. The Tenth Circuit: (1) rejected Christy’s prosecutorial misconduct challenge because she has not shown the prosecutor’s comments influenced the jury’s verdict; (2) reversed Christy’s money laundering convictions because the Government did not produce sufficient evidence of the intent to file a false tax return; and (3) affirmed Christy’s false-bank-entry convictions because, even assuming materiality was an implied element of 18 U.S.C. 1005, its omission from the jury instruction was harmless error. The matter was remanded to the district court with instructions to vacate the convictions for money laundering, resentence the defendant, and further proceedings. View "United States v. Christy" on Justia Law

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After investigating complaints regarding the tax-preparation services of defendant Donald Iley, the Colorado Board of Accountancy (Board) issued an “Agreement and Final Agency Order” in which Iley admitted to engaging in professionally negligent conduct and agreed to accept certain disciplinary sanctions, including a $10,000 fine and a five-year probationary period. Among the acts for which the Board disciplined Iley was taking a client’s money, ostensibly to pay the client’s payroll taxes, but then failing to promptly and properly pay those funds to the IRS. While serving the Order’s probationary term, Iley executed a fraudulent scheme in which he fleeced his clients of more than $11 million. As part of this scheme, Iley fraudulently misrepresented to his clients that he was taking their funds to pay outstanding payroll taxes to the IRS but, instead, Iley used those funds for personal purposes. After this fraud was discovered, Iley pleaded guilty to wire fraud and aiding in the preparation of a false tax return. At sentencing, the district court enhanced Iley’s sentence under the U.S. Sentencing Guidelines, section 2B1.1(b)(9)(C). The question presented to the Tenth Circuit was whether the court erred in doing so. The Court held that under the particular circumstances of this case, the court did not err in Iley's sentence, and affirmed. View "United States v. Iley" on Justia Law

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Defendant-Appellant, Gunther Glaub, was convicted of violating the criminal provisions of the False Claims Act. He argued on appeal that his act of submitting personal bills and invoices to the United States for payment was protected by the First Amendment. Furthermore, he challenged jury instructions given at trial on grounds that they failed to properly define "claim." Finding no support in the trial court record for either of Glaub's claims, the Tenth Circuit affirmed his conviction. View "United States v. Glaub" on Justia Law

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In 2016, a federal grand jury in Utah returned a single count indictment against Kemp & Associates, Inc. (“Kemp”) and its Vice President/COO Daniel Mannix (collectively, “Defendants”) for knowingly entering into a combination and conspiracy in violation of the Sherman Act. Kemp was an “Heir Location Service,” a company that “identif[ies] heirs to estates of intestate decedents and, in exchange for a contingency fee, develop evidence and prove heirs’ claims to an inheritance in probate court.” The Government alleged at some point before January 29, 2014, Defendants “knowingly entered into and engaged in a combination and conspiracy with Richard Blake, Jr., [a competitor Heir Location Service] and other unindicted co-conspirators to suppress and eliminate competition by agreeing to allocate customers of Heir Location Services sold in the United States.” Under this agreement, when the two companies both contacted a potential heir, “the co-conspirator company that first contacted that heir would be allocated certain remaining heirs to that estate who had yet to sign a contract with an Heir Location Services provider.” In return, the company to which heirs were allocated “would pay to the other co-conspirator company a portion of the contingency fees ultimately collected from those allocated heirs.” The Government alleged that, in furtherance of this scheme, Defendants “made payments to the co- conspirator company, and received payments from the co-conspirator company, in order to effectuate this agreement.” Defendants moved for an order that the antitrust case would proceed pursuant to the rule of reason, as opposed to the per se rule, and to dismiss the indictment. As to the statute of limitations, Defendants noted that the limitations period for criminal violations of the Sherman Act was five years, and they argued that the indictment was thus untimely because any agreement between the alleged co- conspirators ended prior to a Mannix email from July 2008, whereas the charging Indictment wasn’t returned until August 2016, and served on defendants on September 1, 2016. The Tenth Circuit determined that the indictment at issue here was timely, but that it did not have jurisdiction over the district court's rule of reason order, and that mandamus was inappropriate in this circumstance. Therefore, the Court reversed the district court's dismissal of the indictment, dismissed the Government's appeal of the rule of reason order for lack of jurisdiction, and remanded this matter for further proceedings. View "United States v. Kemp & Associates" on Justia Law

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A federal grand jury indicted Steven DeLia on one count of healthcare fraud. But the government filed the indictment outside the ordinarily applicable statute of limitations. Notwithstanding this filing, the government argued the indictment was timely because: (1) the Wartime Suspension of Limitations Act suspended the limitations period from running in this case; and (2) DeLia waived his asserted statute-of-limitations defense. The Tenth Circuit rejected both reasons and concluded the prosecution was time-barred. DeLia’s conviction was vacated and the indictment was dismissed. View "United States v. DeLia" on Justia Law

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Shannon Porter used over-the-counter tax preparation software to complete and electronically file 123 false tax returns with the IRS. Although the IRS rejected many of the returns and requested refunds, it paid out $180,397 to Porter, which she promptly spent. For this conduct, she pled guilty to making a false statement to the United States in violation of 18 U.S.C. 287 and was sentenced to imprisonment to be followed by a term of supervised release. She would be given two terms of prison-and-supervised release. The third time, no supervised release was recommended or approved by the trial court. Porter appealed the last sentence that did not include supervised release. The Tenth Circuit determined that each of Porter’s previous supervised release violations were punishable as a “breach of trust,” and as such, did not abuse its discretion in denying a request for supervised release upon Porter’s third revocation hearing. View "United States v. Porter" on Justia Law