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

The Guard Recruiting Assistance Program (G-RAP), designed to increase recruiting to the Air National Guard during the “War on Terror” was run by Docupak, a private corporation. Docupak selected and trained Recruiting Assistants (RAs) to find and direct potential airmen to full-time recruiters. The program paid a $1,000 pre-loaded gift card upon actual enlistment of a potential airman and another $1,000 upon the airman’s completion of training. The RAs were to identify individuals that were not already working with a full-time recruiter and were prohibited from splitting the payment with full-time recruiters. Osborne, a full-time recruiter, was accused of referring names of pre-existing recruits to RA Andolsek so that they could claim the incentive, with kickbacks to Osborne. Osborne was charged with aiding Andolsek in embezzling from the Department of Defense, 18 U.S.C. 641; 18 U.S.C. 2, which “caused” the Department to reimburse Docupak for $9,000. Andolsek pleaded guilty and testified against Osborne. Osborne argued that the funds were stolen from a private contractor, so they only violated Docupak’s internal policy, not a federal regulation. The Sixth Circuit reversed Osborne’s conviction. No reasonable jury could have found that the funds were something of value to the government beyond a reasonable doubt, given the evidence of control. The government did not retain a reversionary interest in the funds and imposed few restrictions. Docupak gave the government access to information, but the government did not retain the right to conduct audits. View "United States v. Osborne" on Justia Law

The Guard Recruiting Assistance Program (G-RAP), designed to increase recruiting to the Air National Guard during the “War on Terror” was run by Docupak, a private corporation. Docupak selected and trained Recruiting Assistants (RAs) to find and direct potential airmen to full-time recruiters. The program paid a $1,000 pre-loaded gift card upon actual enlistment of a potential airman and another $1,000 upon the airman’s completion of training. The RAs were to identify individuals that were not already working with a full-time recruiter and were prohibited from splitting the payment with full-time recruiters. Osborne, a full-time recruiter, was accused of referring names of pre-existing recruits to RA Andolsek so that they could claim the incentive, with kickbacks to Osborne. Osborne was charged with aiding Andolsek in embezzling from the Department of Defense, 18 U.S.C. 641; 18 U.S.C. 2, which “caused” the Department to reimburse Docupak for $9,000. Andolsek pleaded guilty and testified against Osborne. Osborne argued that the funds were stolen from a private contractor, so they only violated Docupak’s internal policy, not a federal regulation. The Sixth Circuit reversed Osborne’s conviction. No reasonable jury could have found that the funds were something of value to the government beyond a reasonable doubt, given the evidence of control. The government did not retain a reversionary interest in the funds and imposed few restrictions. Docupak gave the government access to information, but the government did not retain the right to conduct audits. View "United States v. Osborne" on Justia Law

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

Westine completed a 235-month sentence for securities fraud, and, within months, began offering investments in oil wells. Prospective investors were promised their “[f]irst monthly check within 90 days.” Investors never received royalties; they complained to the Kentucky Department of Financial Institutions, which concluded that the companies were selling unlawful securities and obtained a restraining order. Westine and Ramer, his partner, began winding down the companies and transitioning to new companies that collected over $2 million from 138 investors, who never received checks. Ramer oversaw call centers, developed a promotional video that boasted a fictional production capacity of 75 barrels per day, and organized a trip, during which investors were introduced to another co-conspirator, Cornell, who provided a tour of his oil facility, to create an appearance of legitimacy. Defendants began to shift operations to a new company, and, in less than two months, collected $242,233 from 12 investors. Defendants were charged with 29 counts of mail fraud, 18 U.S.C. 1341; conspiracy to commit money laundering, 18 U.S.C. 1956(h); and securities fraud, 15 U.S.C. 78j(b). A jury found each Defendant guilty. The court sentenced Westine to 480 months’ and Ramer to 156 months’ imprisonment. The Seventh Circuit affirmed, upholding the admission of “prior acts” evidence and rejecting various hearsay challenges. Given the evidence against the Defendants, later-discovered evidence that Cornell was running a side deal is insufficient to warrant remand. View "United States v. Ramer" on Justia Law

Michael, a licensed pharmacist at Chapmanville's Aracoma Pharmacy, separately co-owns another West Virginia pharmacy and one in Pennsylvania. The government suspected that Michael used the pharmacies to distribute on-demand prescription drugs, worth more than $4 million, over the Internet. A grand jury returned a multi-count indictment. Count 7 charged Michael with fraudulently submitting a claim for payment to Humana for dispensing medication that was never dispensed (18 U.S.C. 1347). Count 8 charged him with committing aggravated identity theft by using the “identifying information” of a doctor and a patient “in relation to the [health care fraud] offense” (18 U.S.C. 1028A(a)(1), (c)(11)). Michael had submitted a claim to Humana indicating that A.S. (doctor) had prescribed Lovaza for P.R., including the doctor’s National Provider Identifier and the patient’s name and birth date. A.S. was not P.R.’s doctor and did not issue the prescription. Section 1028A requires a person to “assume the identity” of someone else; the district court held that the statute covered only “impersonation,” and dismissed Count 8. The Sixth Circuit reversed. To “use” a means of identification is to “convert to one’s service” or “employ” the means of identification. Michael used A.S. and P.R.’s identifying information to fashion a fraudulent submission, making the misuse of these means of identification “during and in relation to” healthcare fraud. View "United States v. Michael" on Justia Law

Michael, a licensed pharmacist at Chapmanville's Aracoma Pharmacy, separately co-owns another West Virginia pharmacy and one in Pennsylvania. The government suspected that Michael used the pharmacies to distribute on-demand prescription drugs, worth more than $4 million, over the Internet. A grand jury returned a multi-count indictment. Count 7 charged Michael with fraudulently submitting a claim for payment to Humana for dispensing medication that was never dispensed (18 U.S.C. 1347). Count 8 charged him with committing aggravated identity theft by using the “identifying information” of a doctor and a patient “in relation to the [health care fraud] offense” (18 U.S.C. 1028A(a)(1), (c)(11)). Michael had submitted a claim to Humana indicating that A.S. (doctor) had prescribed Lovaza for P.R., including the doctor’s National Provider Identifier and the patient’s name and birth date. A.S. was not P.R.’s doctor and did not issue the prescription. Section 1028A requires a person to “assume the identity” of someone else; the district court held that the statute covered only “impersonation,” and dismissed Count 8. The Sixth Circuit reversed. To “use” a means of identification is to “convert to one’s service” or “employ” the means of identification. Michael used A.S. and P.R.’s identifying information to fashion a fraudulent submission, making the misuse of these means of identification “during and in relation to” healthcare fraud. View "United States v. Michael" on Justia Law

Harris, a registered stockbroker, and his co-conspirators, including government witness Durand, agreed to recommend shares of Zirk de Maison’s companies to clients in exchange for commissions. The Financial Industry Regulatory Authority began an investigation and questioned Harris and Durand on wire transfers from certain organizations controlled by de Maison. The two told investigators that the deposits resulted from selling expensive watches, and sent letters to FINRA summarizing this fictitious explanation. After Harris was arrested, he purportedly called and texted Durand on multiple occasions, instructing him to stick with their story. Durand later admitted that the watch story was entirely false. Harris was convicted of conspiracy to commit securities fraud or wire fraud, 18 U.S.C. 1343, 1348, 1349; obstruction of justice, 18 U.S.C. 1503, and three counts of wire fraud, 18 U.S.C. 1343. The district court sentenced Harris to 63 months’ imprisonment and $843,423.91 in restitution. The Sixth Circuit vacated. The district court abused its discretion by not allowing Harris to introduce a prior inconsistent statement for impeachment of a government witness. The court upheld the admission of government summary exhibits and a jury instruction relating to stockbroker’s fiduciary duties. Harris presented a colorable claim of extraneous influence on a juror, so the court abused its discretion by failing to hold a "Remmer" evidentiary hearing or by denying defense counsel’s request to question the juror and his friend. View "United States v. Harris" on Justia Law

Individuals reprogrammed ATMs to dispense $20 bills for each $1 they were supposed to dispense. Requesting $40 at a compromised ATM would deliver 40 $20 bills instead of two. More than $600,000 was taken from ATMs owned by SafeCash Systems. SafeCash investigated and found evidence that a former employee who serviced the machines, Folad, and his friend, Fattah, engineered the scheme. They turned the information over to the government, resulting in several criminal convictions, one-year sentences for Folad and Fattah, and a restitution order. After the scheme ended and after SafeCash determined what had happened, SafeCash replaced 17 of the relevant 18 ATMs in response to a federal regulation requiring that they be accessible to individuals with sight impairments. The Sixth Circuit affirmed the convictions and sentences, rejecting an argument that destruction of the ATMs amounted to the destruction of potentially exculpatory evidence and violated the defendants’ due process rights. SafeCash, not the government, made the decision to replace the machines. Even if the government had been involved in the destruction of the machines, there was no indication that they contained potentially exculpatory evidence. View "United States v. Folad" on Justia Law

Blue gem coal burns hotter and cleaner than thermal coal, making it useful for producing silicon, a critical ingredient of computer chips and solar panels. Environmental regulations make it difficult to mine. Demand for blue gem coal outstrips its supply; it commands premium prices. New Century advertised itself as one of the largest blue gem coal companies in the country, falsely claiming to own land with valuable deposits and to have mining permits. By the time law enforcement caught on, the company had swindled more than $14 million from more than 160 investors. Eleven people involved in the scheme, including the mastermind, Rose, pleaded guilty. Phillips, who worked for New Century scouting property, went to trial. Phillips helped Rose, a NASCAR driver with little experience in the coal industry, identify land with coal-mining potential. The evidence portrayed Phillips as a coal-industry expert who helped New Century convince investors that it was legitimate. Phillips claimed he had no idea that the company defrauded investors. The jury convicted Phillips of conspiracy to commit mail and wire fraud but acquitted him of two money-laundering charges. The judge sentenced him to 30 months in prison. The Sixth Circuit affirmed, rejecting challenges to the sufficiency of the evidence and to evidentiary rulings. View "United States v. Phillips" on Justia Law

In 2008, Arise, a Dayton community school (charter school), faced declining enrollment, financial troubles, and scandal after its treasurer was indicted for embezzlement. The school’s sponsor sought a radical change in administration, elevated Arise’s former principal, Floyd, to superintendent, removed all board members, and appointed Floyd’s recommended candidates to the new board. Floyd set up a kickback scheme, using former business partners to form Global Educational Consultants, which contracted with Arise. Global received $420,919 from Arise. While Global was being paid, Arise teachers’ salaries were cut and staff members were not consistently paid. Arise ran out of money and closed in 2010. The FBI investigated and signed a proffer agreement with Ward, the “silent partner” at Global, then indicted Floyd, Arise board members, and Global's owner. They were convicted of federal programs bribery, conspiracy to commit federal programs bribery, and making material false statements, 18 U.S.C. 666(a)(1)(B), (a)(2); 18 U.S.C. 371; 18 U.S.C. 1001(a)(2). Two African-American jurors reported that they were initially unconvinced; the jury foreperson, a white woman, reportedly told them that she believed they were reluctant to convict because they felt they “owed something” to their “black brothers.” This remark prompted a confrontation, requiring the marshal to intervene.The Sixth Circuit affirmed their convictions, rejecting arguments based on the Supreme Court’s 2017 decision, Pena-Rodriguez v. Colorado. Although Pena-Rodriguez permitted, in very limited circumstances, an inquiry into a jury’s deliberations, this case did not fit into those limited circumstances. View "United States v. Robinson" on Justia Law