Justia Criminal Law Opinion Summaries

A Malaysian national who worked as a managing director for Goldman Sachs in Malaysia was prosecuted for his role in a large-scale financial scheme involving 1Malaysia Development Berhad (1MDB), a Malaysian state-owned investment fund. The government presented evidence showing that, along with other conspirators, he participated in three major bond offerings raising $6.5 billion, from which more than $2.5 billion was diverted for bribes and kickbacks to officials and participants, including himself. The funds were laundered through shell companies, and the defendant received $35.1 million that was deposited in an account controlled by his family members. The defendant’s wife asserted at trial that these funds were legitimate investment returns, not criminal proceeds.Prior to this appeal, the United States District Court for the Eastern District of New York denied several motions by the defendant. The court rejected his arguments that the indictment should be dismissed for lack of venue, concluding that acts in furtherance of the conspiracy passed through the Eastern District of New York. The court also found that the government did not breach an agreement regarding his extradition from Malaysia, since the superseding indictments did not charge new offenses. The district court excluded a video recording offered by the defense as inadmissible hearsay, and ultimately, a jury found him guilty on all counts. He was sentenced to 120 months’ imprisonment and ordered to forfeit $35.1 million.On appeal to the United States Court of Appeals for the Second Circuit, the defendant argued improper venue, breach of extradition agreement, erroneous exclusion of evidence, and that the forfeiture was an excessive fine under the Eighth Amendment. The Second Circuit held that the district court had not erred in any respect. Venue was proper, the extradition agreement was not breached, the evidentiary ruling was not an abuse of discretion, and the forfeiture was not grossly disproportionate to the offense. Accordingly, the judgment of conviction and forfeiture order were affirmed. View "USA v. NG CHONG HWA" on Justia Law

In October 2021, a Florida attorney, Ross, held a trust account at Regions Bank that received a $29.6 million wire transfer, the result of a business email compromise fraud perpetrated on a company called Phoenix. Most of the funds were rapidly transferred out of the account, with some recalled by the bank. Federal authorities seized approximately $4.9 million remaining or recovered from the account and initiated a civil forfeiture action, alleging the funds were proceeds of fraud or involved in money laundering.The United States District Court for the Northern District of New York oversaw the initial proceedings. Ross filed a verified claim to $1.21 million of the seized funds, asserting they were legitimate client funds or proceeds from his home sale, but made no claim to the remaining $3.69 million. Another claimant, Phoenix, also asserted interest in the $1.21 million. The district court entered default judgment forfeiting the unclaimed $3.69 million to the government, dismissed without prejudice the forfeiture proceedings as to the $1.21 million, and issued a certificate of reasonable cause for the seizure. It denied Ross’s subsequent motion for attorney fees, costs, and interest under CAFRA, finding he did not “substantially prevail,” and denied reconsideration.On appeal, the United States Court of Appeals for the Second Circuit held that Ross lacked standing to contest the forfeiture of the $3.69 million because he had not filed a claim as to those funds. The court rejected Ross’s due process challenge to the stay of proceedings, finding the delay reasonable, and upheld the denial of attorney fees, costs, and interest, concluding that dismissal without prejudice did not make Ross a prevailing party under CAFRA. The court also found no abuse of discretion in dismissing the forfeiture action without prejudice. However, the Second Circuit vacated the issuance of a certificate of reasonable cause, as no judgment for Ross had been entered. All other aspects of the district court’s judgments were affirmed. View "United States v. Ross" on Justia Law

Adam Gomez was charged with receiving and possessing a firearm that had an obliterated serial number. He moved to dismiss the indictment, arguing that the statute under which he was charged, 18 U.S.C. § 922(k), was unconstitutional. After the United States District Court for the Northern District of New York denied his motion, Gomez pleaded guilty to the offense. His appeal centers on the claim that the statute is facially unconstitutional in light of the Supreme Court’s decision in New York State Rifle & Pistol Ass’n, Inc. v. Bruen, which clarified the scope of the Second Amendment.The United States District Court for the Northern District of New York denied Gomez’s motion to dismiss the indictment, rejecting his constitutional challenge to § 922(k). Following this denial, Gomez entered a guilty plea and was convicted. He then appealed the judgment, arguing that the statute violates the Second Amendment as interpreted by the Supreme Court in Bruen.The United States Court of Appeals for the Second Circuit reviewed the case and affirmed the district court’s judgment. The Second Circuit held that 18 U.S.C. § 922(k) is facially constitutional. The court reasoned that the statute does not infringe upon the right to bear arms because it does not prevent anyone from possessing any type of firearm, and firearms with obliterated serial numbers are not weapons in common use for lawful purposes. The court also noted that Gomez’s facial challenge failed because he did not demonstrate that the statute is unconstitutional in all its applications or that it lacks a plainly legitimate sweep. Accordingly, the Second Circuit affirmed the conviction. View "United States v. Gomez" on Justia Law

In March 2023, a New York State grand jury indicted a former President on thirty-four counts of falsifying business records in the first degree. The indictment alleged that he orchestrated a scheme to influence the 2016 presidential election by directing his personal lawyer to pay $130,000 to an adult film star to prevent disclosure of an alleged sexual encounter. The payments were disguised as legal fees in business records. After arraignment, the defendant sought to remove the case to federal court under the federal officer removal statute, arguing the conduct was within the color of his office and involved federal defenses. The federal district court remanded the case to state court, finding the prosecution fell outside the scope of federal officer removal jurisdiction. A state court jury subsequently convicted the defendant on all counts.After conviction but before sentencing, the United States Supreme Court issued a decision in Trump v. United States, holding that the President is absolutely immune from criminal prosecution for conduct within his exclusive constitutional authority and that evidence of immunized official acts is inadmissible even when an indictment alleges only unofficial conduct. The defendant then sought leave to file a second, untimely notice of removal in federal court, arguing that the Supreme Court’s decision provided new grounds for removal and established good cause for the delay. The United States District Court for the Southern District of New York denied leave, concluding that good cause had not been shown and that the hush money payments were private, unofficial acts.The United States Court of Appeals for the Second Circuit reviewed the district court’s denial. The Second Circuit held that the district court had not adequately considered issues relevant to the good cause inquiry, including the impact of the Supreme Court’s decision and whether evidence admitted at trial related to immunized official acts. The Second Circuit vacated the district court’s order and remanded for reconsideration of the motion for leave to file a second notice of removal, instructing the district court to address these issues. View "New York v. Trump" on Justia Law

Lavellous Purcell operated a commercial sex business from 2012 to 2017, recruiting women from across the United States to work as prostitutes and coordinating their interstate travel. He resided primarily on Long Island, New York, and the women involved traveled to at least fourteen states. The government’s case focused on documentary evidence regarding one victim, Samantha Vasquez, showing her work for Purcell in various locations, but not in the Southern District of New York.Purcell was indicted in 2018 in the United States District Court for the Southern District of New York on five counts related to sex trafficking. After a jury trial, he was convicted on all counts and sentenced to 216 months’ imprisonment. On direct appeal to the United States Court of Appeals for the Second Circuit, his conviction on Count One (enticement to engage in unlawful sexual activity) was reversed for lack of venue in the Southern District of New York, but his conviction on Count Two (transporting a victim in interstate commerce to engage in prostitution) was affirmed because his appellate counsel did not challenge venue for that count. The district court reimposed the original sentence after remand. Purcell then filed a habeas petition under 28 U.S.C. § 2255, which the district court denied, finding appellate counsel’s performance reasonable.The United States Court of Appeals for the Second Circuit reviewed the denial of Purcell’s habeas petition de novo. The court held that Purcell’s appellate counsel was constitutionally ineffective for failing to challenge venue as to Count Two, as the omitted argument was significant and obvious and likely would have resulted in reversal of that conviction. The court declined to apply the concurrent sentence doctrine and found Purcell was prejudiced by counsel’s omission. The Second Circuit reversed the district court’s denial of Purcell’s § 2255 petition and remanded for further proceedings. View "Purcell v. United States" on Justia Law

The case concerns a former CEO of a brand-management company who was prosecuted for allegedly orchestrating a scheme to inflate company revenues through secret “overpayments-for-givebacks” deals with a business partner. The government alleged that the CEO arranged for the partner to pay inflated prices for joint ventures, with a secret understanding that the excess would be returned later, thereby allowing the company to report higher revenues to investors. The CEO was also accused of making false filings with the SEC and improperly influencing audits. The central factual dispute was whether the CEO actually made these undisclosed agreements.In 2021, the United States District Court for the Southern District of New York held a jury trial. The jury acquitted the CEO of conspiracy to commit securities fraud, make false SEC filings, and interfere with audits, but could not reach a verdict on the substantive charges, resulting in a mistrial on those counts. The government retried the CEO in 2022 on the substantive counts, and the second jury convicted him on all charges. The CEO moved to bar the retrial, arguing that the Double Jeopardy Clause precluded it because the first jury’s acquittal necessarily decided factual issues essential to the government’s case.The United States Court of Appeals for the Second Circuit reviewed the case. It held that the first jury’s acquittal on the conspiracy charge necessarily decided that the CEO did not make the alleged secret agreements, which was a factual issue essential to the substantive charges. Because the government’s case at the second trial depended on proving those same secret agreements, the Double Jeopardy Clause’s issue-preclusion doctrine barred the retrial. The Second Circuit reversed the district court’s judgment, vacated the CEO’s convictions, and ordered dismissal of the indictment. View "United States v. Cole" on Justia Law

A group of individuals planned and executed a robbery of a stash house in Queens, New York, in September 2017. Matthew Elias, one of the defendants, drove a getaway car but was arrested shortly after the robbery, before he received any share of the stolen property, which included marijuana, a gun, and approximately $20,000 in cash. Testimony at trial established that another participant, Hytmiah, kept all the proceeds from the robbery, distributing only a small portion to one other individual and refusing to share with the rest, including Elias.The United States District Court for the Eastern District of New York (Judge Garaufis) presided over the trial, where a jury convicted Elias of Hobbs Act robbery. As part of his sentence, the district court ordered Elias to forfeit $10,000, calculated as a pro rata share of the robbery’s proceeds, under 18 U.S.C. § 981(a)(1)(C). Elias appealed, arguing that the forfeiture order was improper because he never actually acquired any of the proceeds.The United States Court of Appeals for the Second Circuit reviewed the case. The court held that, under 18 U.S.C. § 981(a)(1)(C), as informed by the Supreme Court’s decision in Honeycutt v. United States, criminal forfeiture is limited to property that the defendant personally acquired as a result of the offense. The Second Circuit concluded that Elias was ordered to forfeit property he never obtained, which violated this rule. Accordingly, the court vacated the forfeiture order against Elias. The remainder of the judgments against Elias and his co-defendant were affirmed in part and vacated in part, with instructions for further proceedings consistent with the court’s opinion. View "United States v. Elias" on Justia Law

A licensed veterinarian developed and manufactured undetectable performance enhancing drugs (PEDs) for use in professional horse racing, selling them to trainers who administered them to horses to gain a competitive edge. His salesperson assisted in these activities, operating a company that distributed the drugs without prescriptions or FDA approval. The drugs were misbranded or adulterated, and the operation involved deceptive practices such as misleading labeling and falsified customs forms. The PEDs were credited by trainers for their horses’ successes, and evidence showed the drugs could be harmful if misused.The United States District Court for the Southern District of New York presided over two separate trials, resulting in convictions for both the veterinarian and his salesperson for conspiracy to manufacture and distribute misbranded or adulterated drugs with intent to defraud or mislead, in violation of the Food, Drug, and Cosmetic Act. The district court denied motions to dismiss the indictment, admitted evidence from a prior state investigation, and imposed sentences including imprisonment, restitution, and forfeiture. The court calculated loss for sentencing based on the veterinarian’s gains and ordered restitution to racetracks based on winnings by a coconspirator’s doped horses.On appeal, the United States Court of Appeals for the Second Circuit held that the statute’s “intent to defraud or mislead” element is not limited to particular categories of victims; it is sufficient if the intent relates to the underlying violation. The court found no error in the admission of evidence from the 2011 investigation or in the use of gain as a proxy for loss in sentencing. However, it vacated the restitution order to racetracks, finding no evidence they suffered pecuniary loss, and vacated the forfeiture order, holding that the relevant statute is not a civil forfeiture statute subject to criminal forfeiture procedures. The convictions and sentence were otherwise affirmed. View "United States v. Fishman" on Justia Law

The case concerns a defendant who was convicted by a jury in the United States District Court for the Northern District of New York of transporting, receiving, and possessing child pornography, all in violation of federal law. The defendant’s conduct involved the use of the Kik messaging application, which uses software to detect and report child sexual abuse material (CSAM) to the National Center for Missing and Exploited Children (NCMEC). Kik’s detection process relies on a database of known CSAM hash values provided by NCMEC. When Kik’s software identifies a match, a designated employee reviews the file and, if confirmed as CSAM, reports it to NCMEC, which then forwards the information to law enforcement. The defendant was linked to the offending accounts through IP address records and admitted during a post-arrest interview to using the relevant Kik accounts and sharing child pornography.After his arrest, the defendant moved to suppress evidence obtained from Kik’s searches and his own statements to law enforcement, arguing that Kik acted as an agent of NCMEC, which he claimed was a governmental entity for Fourth Amendment purposes. The United States District Court for the Northern District of New York denied the motion, finding that while NCMEC might be a governmental entity, Kik was not acting as its agent. The court also found that the defendant had validly waived his Miranda rights and that his statements were not coerced. The jury acquitted the defendant on some counts but convicted him on others. The court sentenced him to 151 months in prison and 15 years of supervised release.On appeal, the United States Court of Appeals for the Second Circuit held that NCMEC is a governmental entity for Fourth Amendment purposes, but the defendant failed to show that Kik acted as a governmental agent when it searched his accounts. The court affirmed the denial of the suppression motion, found the evidence sufficient to support the convictions, and upheld the sentence as substantively reasonable. However, the court vacated and remanded in part, instructing the district court to amend the written judgment to conform with its oral pronouncement regarding certain conditions of supervised release. View "United States v. Guard" on Justia Law

A U.K. citizen and former hedge fund manager predicted that the South African rand would strengthen against the U.S. dollar following a South African election. Acting on this belief, he purchased a one-touch barrier option for his hedge fund, which would pay $20 million if the rand-to-dollar exchange rate dropped below 12.50 before the option’s expiration. As the expiration approached and the rate hovered just above the threshold, he instructed a banker in Singapore to sell large amounts of dollars for rand to push the exchange rate below 12.50, thereby triggering the option and securing the payout for his fund. The trades were executed while he was in South Africa, and the payout obligations ultimately fell on U.S.-based financial institutions.A grand jury in the United States District Court for the Southern District of New York indicted him for commodities fraud and conspiracy to commit commodities fraud under the Commodity Exchange Act (CEA). At trial, the government presented evidence of his intent to manipulate the market to trigger the option. The jury convicted him of commodities fraud but acquitted him of conspiracy. The district court denied his post-trial motions for acquittal or a new trial, finding sufficient evidence of a direct and significant connection to U.S. commerce, adequate jury instructions, and no due process violation.On appeal, the United States Court of Appeals for the Second Circuit affirmed the conviction. The court held that the CEA’s extraterritoriality provision applied because the conduct had a direct and significant connection to U.S. commerce, given that U.S. financial institutions bore the payout risk. The court also found the jury instructions on intent and materiality were proper, that proof of an artificial price was not required under the charged anti-fraud provision, and that the defendant had fair notice his conduct was unlawful. The district court’s judgment was affirmed. View "United States v. Phillips" on Justia Law