Justia U.S. 3rd Circuit Court of Appeals Opinion Summaries

Stoerr pled guilty to bid rigging, 15 U.S.C. 1; conspiracy to provide kickbacks and to defraud the United States, 18 U.S.C. 371; and assisting in the preparation of false tax returns, 26 U.S.C. § 7206(2). The convictions stemmed from kickback payments that Stoerr solicited and accepted from sub-contractors in connection with environmental remediation projects managed by Sevenson, his employer from 1980 to October 2003. In total, the district court determined that the scheme resulted in losses of $134,098.96 to the EPA and $257,129.22 to Tierra. After Sevenson learned of the kickbacks scheme, it paid Tierra approximately $241,000 to compensate for its losses. It then commenced a civil action against Stoerr in state court to recover its losses, and sought restitution in connection with Stoerr’s sentencing, under the Mandatory Victims Restitution Act, 18 U.S.C. 3663A, for reimbursement of the amount that it paid to Tierra. The district court denied Sevenson‟s request for restitution, instead ordering that Stoerr pay restitution to Tierra. The Third Circuit dismissed; as a non-party, Sevenson lacks standing to appeal. View "United States v. Stoerr" on Justia Law

Wal-Mart cleaning crew members sought compensation for unpaid overtime and certification of a collective action under the Fair Labor Standards Act, civil damages under RICO, and damages for false imprisonment. The workers, illegal immigrants who took jobs with contractors and subcontractors Wal-Mart engaged to clean its stores, alleged: Wal-Mart had hiring and firing authority over them and closely directed their actions such that Wal-Mart was their employer under the FLSA; Wal-Mart took part in a RICO enterprise by transporting and harboring illegal immigrants, encouraging illegal immigration, conspiracy to commit money laundering, and involuntary servitude (18 U.S.C. 1961(1)(F)); Wal-Mart‘s practice of locking some stores at night and on weekends, without always having a manager available with a key, constituted false imprisonment. Over eight years and multiple opinions, the district court rejected final certification of an FLSA class and rejected the RICO and false imprisonment claims on several grounds, and rejected the false imprisonment claim on the merits. The Third Circuit affirmed. Plaintiffs were not “similarly situated” under the FLSA, 29 U.S.C. 626(b). View "Zavala v. Wal Mart Stores, Inc." on Justia Law

Andrews was designated as contractor for improvements to the sewage system, in a no-bid process involving kickbacks and bribery, having made numerous false statements in the bond application package. After the contract was terminated, he submitted a claim of $748,304, based on false statements and duplicate charges. Evidence indicated that Andrews was not capable of the project work and that the entire scheme was fraudulent. He was convicted of one count of conspiracy, 18 U.S.C. 371, four counts of wire fraud, 18 U.S.C. 1343, 1346, and 2, one count of program fraud, 18 U.S.C. 666(a)(1)(B) and 2, one count of making a false claim upon the Government of the Virgin Islands, 14 V.I.C. 843(4), and one count of inducing a conflict of interest, 3 V.I.C. 1102, 1103, and 1107. The Third Circuit affirmed the conviction, but remanded for resentencing. Errors in the indictment and jury instructions concerning honest services fraud did not affect substantial rights. Although the 151-month term of imprisonment was within the statutory maximum for Counts Two through Five, it exceeded the statutory maximum for Counts One and Six; it was not possible to determine whether the sentence was legal as to each count View "United States v. Andrew" on Justia Law

ABC is a dissolved corporation. Doe 1 was the company’s President and sole shareholder. Doe 2 is his son. LaCheen represents ABC and Doe 1; Blank represents Doe 2. The law firms have a joint-defense agreement covering the three. Investigating tax implications of ABC’s acquisition and sale of closely held companies, the government issued a grand jury subpoena to ABC’s former vice president as custodian of records. The documents are in custody of Blank. ABC refused to accept service of the subpoena issued to its former employee. The government issued subpoenas to LaCheen and Blank. The firms withheld documents listed on a privilege log. The government sought to compel ABC, Blank, and LaCheen to produce documents identified on the privilege logs, citing cited the crime-fraud doctrine, which provides that evidentiary privileges may not be used to shield communications made for purposes of getting advice for commission of a fraud or crime. The district court entered the order. The Third Circuit dismissed for lack of appellate jurisdiction. To obtain immediate appellate review, a privilege holder must disobey the order, be held in contempt, then appeal the contempt order. That route is available to ABC, which can obtain custody of the documents from its agent. View "In Re: Grand Jury" on Justia Law

Defendants owned an engineering and surveying company. Between 2002 and 2008, it failed to pay the IRS more than $500,000 in taxes withheld from employee paychecks. They were convicted of conspiracy to defraud the United States, 18 U.S.C. 371, and 21 counts of failure to account and pay over employment taxes, 26 U.S.C. 7202. The Third Circuit affirmed the convictions, rejecting claims of evidentiary errors, but remanded for resentencing. The district court erred in imposing a two-level increase to the offense levels for abuse of a position of trust, pursuant to U.S.S.G. 3B1.3.View "United States v. DeMuro" on Justia Law

Defendant accepted $1,000 and Mets tickets for helping a consulting company obtain a contract with the county for temporary employment of individuals for clean-up after a 2006 flood. He pled guilty to violating 18 U.S.C. 666(a)(1)(B). The presentence report recommended a sentence of 15 to 21 months' imprisonment. USSG 2C1.2(a)(1) set the base offense level at 11; the report added two levels under 2C1.2(b)(1) because the offense involved more than one gratuity and four levels under 2C1.2(b)(3) because the offense involved a public official in a high-level decision-making or sensitive position. It subtracted three levels for acceptance of responsibility (3E1.1). The district court imposed a sentence of 15 months' imprisonment. The Third Circuit affirmed. Defendant could not hire or fire; could not bind the county; could not act officially on the county's behalf; had administrative, not policymaking, duties; and reported to superiors, who reported to County Commissioners. The high-level government official enhancement was not applied to his superior, also implicated in the bribery scheme. Defendant was, however, responsible for the human resource department. View "United States v. Richards" on Justia Law

Defendants were convicted of honest services fraud, 18 U.S.C. 1346, mail fraud ("traditional" fraud), 18 U.S.C.1341, and conspiracy, 18 U.S.C. 371, based on a defendant (city councilman) taking official actions in exchange for gifts. Their appeal claimed that the 2010 Supreme Court decision, Skilling v. U.S., affected the law of honest services fraud. The Third Circuit vacated and remanded. While the evidence was sufficient to convict on each count, the Skilling decision made jury instructions on honest services fraud incorrect. The jury should have been instructed on a bribery theory but not on a conflict-of-interest theory. The error was not necessarily harmless; the law of honest services fraud depends on intent and finding intent requires a jury to make reasonable inferences. Evidence of honest services fraud overlapped substantially evidence submitted on traditional fraudView "United States v. Wright" on Justia Law

Defendant, a licensed financial adviser, pled guilty to 34 counts of mail fraud (18 U.S.C. 1341), wire fraud (18 U.S.C. 1343), and bank fraud (18 U.S.C. 1344) based on his solicitation of bank clients to invest in speculative real estate transactions that he controlled, unrelated to bank products, an illegal practice in the securities industry known as "selling away." The Government accused him of collecting $1.55 million between October 2002 and January 2006. The district court denied his motion to withdraw the plea when he claimed that his prior attorney, unprepared to go to trial, had browbeaten him. The court imposed a sentence of 180 months and $1.3 million in restitution. The Third Circuit affirmed. With no evidence of actual innocence and the death of some of the government's elderly witnesses, there was no "fair and just" reason to allow withdrawal of the plea. Because defendant was an investment advisor when he initiated the fraud, the court properly applied a four-level enhancement at section 2B1.1(b)(16)(A); an obstruction of justice enhancement was justified by defendant's lies concerning his guilty plea and his contact with witnesses. View "United States v. Siddon" on Justia Law

Defendant, an apartment building owner convicted of bribery of building officials, (18 U.S.C. 666(a)(2)), was sentenced to 34 months of imprisonment. The Third Circuit affirmed and remanded for resentencing. The district court provided thorough instructions as to the elements of bribery, defining "knowingly," "corruptly," and "willfully," and was within its discretion in denying a separate instruction on intent. The court correctly excluded testimony of a defense witness and limited defense cross-examination of certain witnesses. The court was within its discretion in holding that defendant was not prejudiced by the lack of prior knowledge of a change of testimony. In sentencing, the court did not follow the correct order of steps set forth in "Gunter," did not compute a definitive loss calculation or offense level to reach its Guidelines range nor did it meaningfully consider the need to avoid unwarranted sentence disparities among defendants with similar records who have been found guilty of similar conduct (18 U.S.C. 3553 (a)(6).

Defendant was the fiancee of the leader of a Philadelphia drug distribution ring responsible for selling a large amount of cocaine and cocaine base (crack) from 1998 to 2005. In 2005, the couple used drug money to purchase a new home, which was titled in defendant's name. When her fiancee was charged with drug trafficking and firearms offenses, defendant was charged with money laundering in purchasing the house, 18 U.S.C. 1956(a)(1)(B)(i). She appealed her conviction. The Third Circuit vacated. The evidence was not sufficient to establish knowledge of a design to conceal on defendant's part. Defendant lied about her income and had the property titled in her name, not to hide her fiancee's involvement (which was obvious), but to get around his bad credit and purchase the house.