Justia Banking Opinion Summaries

The case under review is an appeal regarding the resentencing of Vivian Tat, who was involved in a money-laundering scheme. At her initial sentencing, Tat was convicted on several counts and sentenced to 24 months imprisonment. However, she appealed and the higher court vacated her conviction on one count and her sentence, remanding for de novo resentencing. At the resentencing hearing, Tat received an 18-month sentence.Her appeal to this court is her second one, and she argues that the lower court erred in applying sentencing enhancements related to her role as an organizer/leader and her abuse of trust, improperly considered "cost" in dismissing her community-service proposal at sentencing, and violated Federal Rule of Criminal Procedure 32 by failing to make factual findings about certain parts of her presentence report.The United States Court of Appeals for the Ninth Circuit held that a criminal defendant’s failure to challenge specific aspects of her initial sentence on a prior appeal does not waive her right to challenge comparable aspects of a newly imposed sentence following de novo resentencing. The court found that the lower court had erred in applying an organizer/leader enhancement under U.S.S.G. § 3B1.1, as Tat’s status as a mere member of the criminal enterprise did not bear on whether she was an organizer, leader, manager, or supervisor of the criminal activity, and the criminal conduct was not “otherwise extensive.” However, the district court did not err in applying an enhancement for abuse of trust under U.S.S.G. § 3B1.3, where Tat’s position as a manager at the bank gave her the discretion to carry out transactions like the one at issue here without oversight, and where her position of trust facilitated her role in the underlying offense. The court also found that the lower court did not improperly consider “cost” in dismissing Tat’s community-service proposal. The court vacated Tat’s sentence and remanded to the district court for resentencing consistent with this opinion. View "United States v. Tat" on Justia Law

In this case heard by the United States Court of Appeals for the First Circuit, the plaintiff-appellant, David Efron, filed a Racketeer Influenced and Corrupt Organizations Act (RICO) claim and various Puerto Rico law claims against UBS Financial Services and other defendants. Efron alleged that the defendants had illegally disclosed his private bank account information to his ex-wife, triggering litigation and a subsequent indemnification claim from UBS. The district court dismissed Efron's case after denying him leave to file a second amended complaint.On appeal, the Court of Appeals found that the district court had not abused its discretion by limiting Efron to deposing only two UBS employees before filing his proposed second amended complaint. The court also agreed that permitting Efron to amend his complaint would be futile, affirming the dismissal of his RICO claim. The court declined to impose sanctions against Efron, despite arguments from UBS that the appeal was frivolous. The court concluded that while Efron's case was weak, it was not so squarely resolved in his prior appeal on a different RICO claim that it could be deemed frivolous. View "Efron v. UBS Financial Services Incorporated of Puerto Rico" on Justia Law

The case involved an appeal by two brothers, Jonathan and Daniel Markovich, who were convicted for operating fraudulent drug rehabilitation clinics in Florida. They were found guilty of various charges, including health-care fraud, wire fraud, kickbacks, money laundering, and bank fraud, resulting in fraudulent claims of over $100 million.The brothers appealed their convictions on several grounds. They argued that the district court violated their constitutional rights by denying their motion to compel the prosecution to obtain and disclose confidential medical records possessed by third parties. They also claimed that the court violated Federal Rules of Evidence by admitting unreliable and confusing expert testimony about the clinics' medical and billing practices. Additionally, they argued that the court abused its discretion by admitting lay summary testimony about medical and billing records.The United States Court of Appeals for the Eleventh Circuit affirmed the convictions. The court ruled that the prosecution had no duty to seek out potentially exculpatory evidence not in its possession. It also determined that the expert testimony was clear and reliable, and the summary testimony was proper. The court found that any challenge to bank-fraud counts was forfeited due to a lack of explanation or supporting legal authority. Finally, the court ruled that the district court did not abuse its discretion by denying the brothers' motion for a new trial based on newly discovered evidence. View "United States v. Markovich" on Justia Law

In this case, the appellant, Savanna Jennings, was convicted of malice murder and related charges in relation to the shooting death of her grandfather, Otha Perrin Sr. The jury found her guilty on all counts, and she was sentenced to life in prison without the possibility of parole, plus fifteen years in confinement. On appeal, Jennings argued that the trial court abused its discretion by admitting other-acts evidence, admitting certain business records, and that her trial counsel provided constitutionally ineffective assistance.The Supreme Court of Georgia concluded that the trial court did not abuse its discretion in admitting evidence of Jennings' financial activities pertaining to her grandfather's bank account, as it formed part of the financial motive for the crime. The court also found no plain error in the admission of Facebook messages between Jennings and another individual, which were arguably hearsay but did not likely affect the outcome of the trial.In terms of ineffective counsel, the court found that Jennings' lawyer did preserve her objections to the admission of the bank records. As for the failure to preserve an objection to the Facebook records and to timely disclose an expert witness, the court concluded that Jennings failed to establish that there was a reasonable probability that these actions affected the outcome of her trial. Therefore, the court affirmed Jennings' convictions. View "JENNINGS v. THE STATE" on Justia Law

In this case, the defendant, Patrick Thompson, was convicted of making false statements about his loans to financial institutions. Thompson took out three loans from a bank totaling $219,000. After the bank failed, its receiver, the Federal Deposit Insurance Corporation (FDIC), and a loan servicer, Planet Home, attempted to recoup the money owed by Thompson. However, Thompson disputed the loan balance, insisting that he had only borrowed $110,000. He was subsequently charged with and convicted of making false statements to influence the FDIC and a mortgage lending business, in violation of 18 U.S.C. § 1014.On appeal, Thompson argued that his statements were not “false” under § 1014 because they were literally true, and that the jury lacked sufficient evidence to convict him. He also claimed that the government constructively amended the indictment and that the district court lacked the authority to order him to pay restitution to the FDIC.The U.S. Court of Appeals for the Seventh Circuit rejected Thompson's arguments and affirmed the lower court's judgment. The court held that under its precedent, § 1014 criminalizes misleading representations, and Thompson's statements were misleading. The court also found that there was sufficient evidence to support Thompson's conviction and that the indictment was not constructively amended. Finally, the court held that the district court properly awarded restitution to the FDIC, as the FDIC had suffered a financial loss as a direct and proximate result of Thompson's false statements. View "USA v. Thompson" on Justia Law

In this case, Pamela Kathryn Conley appealed her sentence for bank fraud and aggravated identity theft. She argued that the district court incorrectly calculated her loss amount for the bank fraud offense, and that the court erred in accepting her guilty plea for aggravated identity theft.Conley had applied for loans at seven financial institutions using false employment and salary information, and in some cases, she forged the signatures of financial institution employees to create false lien releases for vehicles she used as collateral. She pled guilty to 24 counts of bank fraud and 4 counts of aggravated identity theft.On appeal, the United States Court of Appeals for the Tenth Circuit found that the district court had erred in calculating the loss amount for the bank fraud offense. The court vacated Conley's sentence for bank fraud and remanded for resentencing on those counts. The court determined that the district court had relied on disputed facts in the presentence report to calculate Conley's U.S. Sentencing Guidelines range for bank fraud, which was procedurally unreasonable.However, the court affirmed Conley's convictions for aggravated identity theft. Conley had argued that the court erred in accepting her guilty plea for this offense in light of the Supreme Court's decision in Dubin v. United States. But the appeals court found that any potential error in accepting the guilty plea was not plain or obvious under current, well-settled law. View "United States v. Conley" on Justia Law

Pacilio and Bases were senior traders on the precious metals trading desk at Bank of America. While working together in 2010-2011, and at times separately before and after that period, they engaged in “spoofing” to manipulate the prices of precious metals using an electronic trading platform, that allows traders to place buy or sell orders on certain numbers of futures contracts at a set price. It is assumed that every order is bona fide and placed with “intent to transact.” Spoofing consists of placing a (typically) large order, on one side of the market with intent to trade, and placing a spoof order, fully visible but not intended to be traded, on the other side. The spoof order pushes the market price to benefit the other order, allowing the trader to get the desired price. The spoof order is canceled before it can be filled.Pacilio and Bases challenged the constitutionality of their convictions for wire fraud affecting a financial institution and related charges, the sufficiency of the evidence, and evidentiary rulings relating to testimony about the Exchange’s and bank prohibitions on spoofing to support the government’s implied misrepresentation theory. The Seventh Circuit affirmed. The defendants had sufficient notice that their spoofing scheme was prohibited by law. View "United States v. Bases" on Justia Law

Palladinetti and others purchased 30 Chicago-area apartment buildings and resold individual apartments as condominiums. Using a process that Palladinetti helped create, his co-defendants bought the buildings, falsely representing to lenders that they had made down payments. Palladinetti served as his co-defendants’ attorney for the purchases and sales and as the registered agent for LLCs formed to facilitate the scheme. The group recruited buyers for the condominiums and prepared their mortgage applications, misrepresenting facts to ensure they qualified for the loans.Palladinetti and his co-defendants were charged with seven counts of bank fraud, 18 U.S.C. 1344(1) and (2), and nine counts of making false statements on loan applications, 18 U.S.C. 1014 and 2. Count one involved a $345,000 mortgage that Palladinetti’s wife obtained for the purchase of a residence. That mortgage application was prepared using the group’s fraudulent scheme in July 2005. The government agreed to dismiss all other counts if Palladinetti were convicted on count one. Because Palladinetti stipulated to almost all elements of section 1344(1), the trial was limited to whether the bank he defrauded was insured by the FDIC when the mortgage application was submitted.The Seventh Circuit affirmed his conviction. The testimony and exhibits demonstrated that one entity was continuously insured, 1997-2008, that on the date the mortgage was executed that entity was “Washington Mutual Bank” and also did business as “Washington Mutual Bank, FA,” and that entity was the lender for the mortgage at issue. View "United States v. Palladinetti" on Justia Law

Halkbank, a commercial bank that is majority-owned by the Government of Turkey, was charged with crimes related to its participation in a multi-year scheme to launder billions of dollars' worth of Iranian oil and natural gas proceeds in violation of U.S. sanctions against the Government of Iran and Iranian entities and persons. Halkbank moved to dismiss the indictment but the district court denied the motionThe Second Circuit held that it has jurisdiction over the instant appeal under the collateral order doctrine. The court also held that, even assuming the Foreign Sovereign Immunities Act (FSIA) applies in criminal cases—an issue that the court need not, and did not, decide today—the commercial activity exception to FSIA would nevertheless apply to Halkbank's charged offense conduct. Therefore, the district court did not err in denying Halkbank’s motion to dismiss the Indictment. The court further concluded that Halkbank, an instrumentality of a foreign sovereign, is not entitled to immunity from criminal prosecution at common law. View "United States v. Bankasi" on Justia Law

Heine and Yates, bank executives, were convicted of conspiracy to commit bank fraud (18 U.S.C. 1349) and 12 counts of making a false bank entry (18 U.S.C. 1005). The government told the jury that the two conspired to deprive the bank of accurate financial information in its records, the defendants’ salaries, and the use of bank funds.The Ninth Circuit vacated. There is no cognizable property interest in the ethereal right to accurate information. Distinguishing between a scheme to obtain a new or higher salary and a scheme to deceive an employer while continuing to draw an existing salary, the court held that the salary-maintenance theory was also legally insufficient. Even assuming the bank-funds theory was valid, the government’s reliance on those theories was not harmless. The court instructed the jury that it could find the defendants guilty of making false entries as co-conspirators, so the court also vacated the false-entry convictions. The court noted that insufficient evidence supported certain false entry convictions. View "United States v. Yates" on Justia Law