Justia U.S. 6th Circuit Court of Appeals Opinion Summaries

In 2001, Mirando pleaded guilty to mail fraud, money laundering, and tax evasion relating to the 1995 and 1996 tax years. Following his 2003 release from prison, the IRS assessed additional tax, interest, and penalties for the 1995 and 1996 tax years and for unpaid tax liabilities for 2000 and 2004. In 2007, Mirando was indicted for conspiracy to defraud the United States and four counts of tax evasion, one for each of the 1995, 1996, 2000, and 2004 tax years. He again pleaded guilty. The parties stipulated that as of June 2007, the total tax liability, including interest and penalties, amounted was $448,776.13. Mirando made payments to the IRS before entering his plea, totaling $467,686.04, inexplicably paying $18,909.91 more than the agreed amount. He was sentenced to 50 months’ imprisonment. In 2008, Mirando and his ex-wife filed amended returns, claiming refunds for the taxable years 1995, 1996, and 2000 in the amounts of $38,871, $54,112, and $32,332, respectively. The IRS denied the claims. Mirando filed a tax refund suit. The IRS argued that judicial estoppel barred Mirando from challenging the amount; Mirando argued that the government waived its estoppel argument because it failed to assert it as an affirmative defense. The Sixth Circuit affirmed the district court’s entry of summary judgment in favor of the IRS.View "Mirando v. U.S. Dep't of Treasury" on Justia Law

From 1998 to 2010, Dimora was one of three elected Cuyaho County commissioners. From 2005 to 2010, Gabor worked for the county weights-and-measures office, which inspects gas pumps, grocery store scanners, truck scales and the like for accuracy. In 2007, the FBI began investigating public corruption in Cuyahoga County and discovered that Dimora handed out public jobs, influenced Cleveland decision-makers and steered public contracts in return for about 100 bribes worth more than $250,000. Gabor bought his job for $5,000 and spent most of his time on errands for Dimora that were unrelated to the job, including acting as a go-between in arranging kickback schemes on county projects. When Gabor learned that the FBI was investigating him, he warned his co-conspirators about the investigation and tried to convince them to lie. After a 37-day trial, they were convicted of 39 violations of anti-corruption laws. The district court sentenced Dimora to 336 months in prison and Gabor to 121 months. The Sixth Circuit affirmed, rejecting challenges to a jury instruction for the RICO charge, 18 U.S.C. 1962(c), (d); to the sufficiency of the evidence; and to various evidentiary rulings. View "United States v. Dimora" on Justia Law

Patriot was authorized to issue title policies underwritten by First American in Michigan. In 2007, Patriot closed a transaction and provided title insurance and a closing protection letter (CPL) when which WaMu loaned $4,543,593.07 to Truong for the purchase of property in Grosse Ile. In the CPL, First American agreed to indemnify WaMu for actual losses arising from Patriot’s fraud or dishonesty in connection with the closing. In 2008, First American discovered that the Truong transaction was a sham, orchestrated by Patriot’s owner, and obtained title to the property. During negotiations concerning sale of the property, federal regulators closed WaMu. The FDIC became its receiver and sold most of WaMu’s assets to Chase, including the title insurance commitment issued in connection with the Truong transaction. Attempting to resolve the claim, First American tendered a quitclaim deed. Chase refused to accept that deed. First American sought a declaration that First American had fulfilled its obligations under the commitment by tendering a deed to the property. Chase sought a declaration that the deed was void and requested money damages. The FDIC intervened, alleging breach of contract against First American based on the CPL. After the property was sold, First American and Chase stipulated to dismissal of Chase’s claims against First American and First American’s claims against Chase. Chase and the FDIC entered into a stipulation that Chase did not acquire the CPL claim that the FDIC was pursuing. A jury awarded the FDIC $2,263,510.78. The Sixth Circuit affirmed.View "JP Morgan Chase Bank NA v. First Am. Title Ins. Corp." on Justia Law

Nancy and Lester's Kentucky pain-management clinic closed after the DEA confiscated the doctor’s license for overprescribing narcotics. They then opened two clinics in Ohio. Patients would arrive before they opened, filling the parking lot, where they used drugs and traded prescription forms. Patients often traveled long distances (in groups), although most lived closer to other clinics. After paying their $150 appointment fee (cash only), patients would meet an “assessor” who would review their “day sheet” and provide a completed prescription form for hydrocodone, oxycodone, or other pain medication. Staff completed day sheets and prescription forms in advance. Patients then met the doctor for a minute. About 100 people per day completed this “five minute” process. The clinics also treated phantom patients. Nancy supervised the updating of files for people who had never visited the clinics. The doctor would sign prescriptions for phantom patients, staff would fill the prescriptions, and the pain pills were sold on the street by a Sadler relative. The clinics ordered drugs directly from pharmaceutical companies, but never obtained a license to dispense controlled substances. The Sadlers were convicted of conspiring to distribute controlled substances illegally and maintaining a premises for distributing the substances; Nancy was also convicted of wire fraud and money laundering. The district court sentenced Lester to 151 months and Nancy to 210 months. The Sixth Circuit vacated the wire fraud conviction, but otherwise affirmed. Nancy may have had many bad motives in buying the pills, but unfairly depriving the distributors of their property was not among them; she ordered pills and paid the asking price. View "United States v. Sadler" on Justia Law

Kumar was 19 years old and in his first year in the Aviation Technology Program at Bowling Green State University when he was assigned to fly alone from Wood County Airport near Bowling Green to Burke Lakefront Airport in Cleveland, and back, after 10:00 p.m. The flight plan required him to fly over part of Lake Erie. On the return trip, Kumar observed what he believed to be a flare rising from a boat. He reported this sighting to Cleveland Hopkins International Airport and was instructed to fly lower for a closer look. Kumar could not then see a boat. Fearful of hurting his chances of one day becoming a Coast Guard pilot, he reported that he saw additional flares and described a 25-foot fishing vessel with four people aboard wearing life jackets with strobe lights activated. Kumar’s report prompted a massive search and rescue mission by the U.S. Coast Guard, and the Canadian Armed Forces. A month later, Kumar admitted that his report had been false. He pleaded guilty to making a false distress call, a class D felony per 14 U.S.C. 88(c)(1), which imposes liability for all costs the Coast Guard incurs. He was sentenced to a prison term of three months and ordered to pay restitution of $277,257.70 to the Coast Guard, and $211,750.00 to the Canadian Armed Forces. The Sixth Circuit affirmed. View "United States v. Kumar" on Justia Law

The Smith brothers and others operated Target Oil, which conducted speculative resource drilling in Kentucky, Tennessee, Texas, and West Virginia. Wells they represented as sure-fire investments often produced virtually no oil and many wells were never completed. From 2003 to 2008, Target Oil received about $15,800,000 in investor funds but, according to the postal inspector, distributed only $460,000 in royalties. The brothers were arrested and accused of conspiring with others to defraud investors of millions of dollars. Michael was convicted of conspiracy to commit mail fraud, 18 U.S.C. 1349, and of 11 substantive counts of mail fraud, 18 U.S.C. 1341, and sentenced to 120 months in prison and ordered to pay $5,506,917 in restitution. Christopher was convicted by the same jury on seven counts of mail fraud and was sentenced to 60 months in prison and ordered to pay $1,652,075 in restitution. The Seventh Circuit affirmed, rejecting arguments that: the evidence was insufficient to support their convictions; the government offered evidence that constructively amended or varied the indictment; their sentences are procedurally and substantively unreasonable; one of the forfeiture judgments was excessive; the district court erred in excluding a defense expert witness; and items of evidence relating to the alleged fraud were erroneously admitted. View "United States v. Smith" on Justia Law

During the 2000 presidential election, Dewald established and operated political action committees (PACs): “Friends for a Democratic White House” and “Swing States for a GOP White House.” He sent fundraising letters to political donors found on Federal Election Commission donor lists. The PACs collected about $750,000 in contributions, but Dewald remitted less than 20 percent of that amount to the political parties or to outside PACs. He funneled most the money to his for-profit corporation, which provided “consulting and administrative services” to the PACs. Dewald was convicted, under Michigan law, for obtaining money under false pretenses, common-law fraud, and larceny by conversion and ultimately sentenced to between 23 and 120 months. Rejecting Dewald’s preemption claim, the Michigan Court of Appeals reasoned that the Federal Election Campaign Act, 2 USC 453 has a narrow preemptive effect. Dewald unsuccessfully sought state post-conviction relief. Dewald later obtained federal habeas corpus relief 28 U.S.C. 2254, on grounds that FECA preempted state law and that the Michigan court’s determination was objectively unreasonable. The Sixth Circuit reversed. There is no clearly established federal law, as determined by the Supreme Court, holding that FECA precludes a state from prosecuting fraud in the context of a federal election. Even if federal preemption provides “clearly established federal law” in general, the state decision did not unreasonably apply those general principles to this case. View "Dewald v. Wriggelsworth" on Justia Law

Reichert was a forum moderator for Xbox-scene.com, a website dedicated to discussion of installing “modification chips in video game consoles so that they could run software for which the consoles were not originally designed. Reichert sold an undercover agent a modified Nintendo Wii, able to play both legitimate and pirated video games. After obtaining a warrant, agents seized modification chips, a soldering iron, computers, and business cards advertising Reichert’s services. Reichert was convicted under the Digital Millennium Copyright Act, which gives copyright owners a remedy against those who do not themselves infringe a copyright, but circumvent technological controls and enable others to infringe. The Act establishes circumvention liability for digital trespass, 17 U.S.C. 1201(a)(1), and trafficking liability, 17 U.S.C. 1201(a)(2). Circumventing or trafficking in circumvention tools is a criminal offense if committed “willfully” for financial gain. With a two-point “special skills” enhancement under U.S.S.G. 3B1.3, Reichert’s advisory Guidelines range was 15 to 21 months. The district court imposed a sentence of 12 months. The Sixth Circuit affirmed, rejecting arguments that the jury received an inaccurate “deliberate ignorance” instruction that negated the “willful” conduct requirement,” that exclusion of certain defense testimony violated Reichert’s constitutional right to present a defense, and that the “special skills” enhancement should not apply to Reichert’s self-taught technical expertise.View "United States v. Reichert" on Justia Law

The Fillers planned to demolish an unused Chattanooga factory. They knew the site contained asbestos, a hazardous pollutant under the Clean Air Act. Environmental Protection Agency regulations require removal of all asbestos before any demolition. Asbestos materials must be wetted, lowered to the ground, not dropped, labeled, and disposed of at an authorized site. Fillers hired AA, a certified asbestos surveying company, which estimated that it would cost $214,650 to remove the material safely. Fillers hired Mathis to demolish the factory in exchange for salvageable materials. Mathis was required to use a certified asbestos contractor. Mathis applied for an EPA demolition permit, showing an estimated amount of asbestos far less than in the AA survey. The agency’s asbestos coordinator contacted Fillers to verify the amount of asbestos. Fillers did not send the survey, but provided a revised estimate, far less than the survey’s estimate. After the permit issued, the asbestos contractor removed “[m]aybe, like, 1/100th” of the asbestos listed in the AA survey. Temporary laborers were hired, not equipped with protective gear or trained to remove asbestos. Fillers supervised. The work dispersed dust throughout the neighborhood. An employee of a daycare facility testified that the children were unable to play outside. Eventually, the EPA sent out an emergency response coordinator and declared the site an imminent threat. Mathis and Fillers were convicted of conspiracy, 18 U.S.C. 371, and violations of the Clean Air Act, 42 U.S.C. 7413(c). Fillers was also convicted of making a false statement, 18 U.S.C. 1001(a)(2), and obstruction of justice, 18 U.S.C.1519. The district court sentenced Mathis to 18 months’ imprisonment and Fillers to 44 months. The Seventh Circuit affirmed. View "United States v. Mathis" on Justia Law

Volkman, an M.D. and a Ph.D. in pharmacology from University of Chicago, was board-certified in emergency medicine and a “diplomat” of the American Academy of Pain Management. Following lawsuits, he had no malpractice insurance and no job. Hired by Tri-State, a cash-only clinic with 18-20 patients per day, he was paid $5,000 to $5,500 per week. After a few months, pharmacies refused to fill his prescriptions, citing improper dosing. Volkman opened a dispensary in the clinic. The Ohio Board of Pharmacy issued a license, although a Glock was found in the safe where the drugs were stored. Follow-up inspections disclosed poorly maintained dispensary logs; that no licensed physician or pharmacist oversaw the actual dispensing process; and lax security of the drug safe. Patients returned unmarked and intermixed medication. The dispensary did a heavy business in oxycodone. A federal investigation revealed a chaotic environment. Cup filled with urine were scattered on the floor. The clinic lacked essential equipment. Pills were strewn throughout the premises. Months later, the owners fired Volkman, so he opened his own shop. Twelve of Volkman’s patients died. Volkman and the Tri-State owners were charged with conspiring to unlawfully distribute a controlled substance, 21 U.S.C. 841(a)(1); maintaining a drug-involved premises, 21 U.S.C. 856(a)(1); unlawful distribution of a controlled substance leading to death, 21 U.S.C. 841(a)(1) and 841(b)(1)(C), and possession of a firearm in furtherance of a drug-trafficking crime, 18 U.S.C. 24(c)(1) and (2). The owners accepted plea agreements and testified against Volkman, leading to his conviction on most counts, and a sentence of four consecutive terms of life imprisonment. The Sixth Circuit affirmed. View "United States v. Volkman" on Justia Law