Justia Legal Ethics Opinion Summaries

In this case, the defendant, a local attorney, was contracted by Theory Wellness, a marijuana dispensary operator, to assist in obtaining a host community agreement from the City of Medford, Massachusetts. Instead of legitimate lobbying, the defendant attempted to bribe Medford's chief of police through the chief's brother. This led to the defendant's convictions on two counts of honest-services wire fraud and one count of federal programs bribery.The United States District Court for the District of Massachusetts presided over the trial, where a jury convicted the defendant on all counts. The defendant was sentenced to concurrent twenty-four-month terms of imprisonment. The defendant appealed, challenging the sufficiency of the evidence, the admission of certain testimony, and the jury instructions.The United States Court of Appeals for the First Circuit reviewed the case. The court vacated the honest-services wire fraud convictions, finding that the district court erroneously admitted the only evidence establishing the jurisdictional element of those counts. However, the court affirmed the federal programs bribery conviction, concluding that the evidence was sufficient to support the jury's finding that the defendant intended to bribe the chief of police.The court held that the defendant's actions constituted a bribery scheme under 18 U.S.C. § 666, even if the defendant did not believe the chief had accepted the bribe. The court also found that the district court's failure to instruct the jury on the requirement of an "official act" was harmless, as the evidence overwhelmingly supported the conclusion that the defendant sought official acts from the chief. The court rejected the defendant's entrapment defense, finding no improper inducement by the government and that the defendant was predisposed to commit the crime. View "United States v. O'Donovan" on Justia Law

Kay Ellison, co-founder of a charter airline, was convicted of federal wire fraud, bank fraud, and conspiracy. The airline, Direct Air, faced cash flow issues and Ellison siphoned millions from an escrow account through fictitious reservations and falsified records. She was charged alongside Judy Tull and chose not to testify or present a defense at trial. The jury convicted her on all counts, and she was sentenced to ninety-four months in prison and ordered to pay over $19 million in restitution. Her convictions were affirmed on direct appeal.Ellison filed a motion to vacate her sentence under 28 U.S.C. § 2255, claiming ineffective assistance of counsel. She argued her attorney incorrectly advised her that if she did not testify, she could not present other evidence, which she claimed prejudiced her defense. The United States District Court for the District of New Jersey denied her motion without an evidentiary hearing, concluding that even if her counsel was ineffective, she could not show prejudice because there was no reasonable probability that the jury would have acquitted her if she had testified or presented other witnesses.The United States Court of Appeals for the Third Circuit reviewed the case and affirmed the District Court's decision. The Third Circuit applied the Strickland v. Washington standard, which requires showing a reasonable probability that the result of the proceeding would have been different but for the attorney's errors. The court found that Ellison failed to demonstrate such a probability, as her proposed testimony and that of her witnesses would not have likely changed the jury's verdict given the strong evidence against her. Thus, the denial of her habeas corpus petition was upheld. View "Ellison v. USA" on Justia Law

Defendant, a California licensed attorney, challenged (1) the sufficiency of the evidence supporting his conviction for transmitting extortionate communications in interstate commerce to sportswear leader Nike, attempted Hobbs Act extortion of Nike, and honest-services wire fraud of the client whom Defendant was purportedly representing in negotiations with Nike. Defendant further challenged the trial court’s jury instruction as to honest-services fraud and the legality of a $259,800.50 restitution award to Nike.   The Second Circuit affirmed. The court explained that the trial evidence was sufficient to support Defendant’s conviction for the two charged extortion counts because a reasonable jury could find that Defendant’s threat to injure Nike’s reputation and financial position was wrongful in that the multi-million-dollar demand supported by the threat bore no nexus to any claim of right. Further, the court held that the trial evidence was sufficient to support Defendant’s conviction for honest-services fraud because a reasonable jury could find that Defendant solicited a bribe from Nike in the form of a quid pro quo whereby Nike would pay Defendant many millions of dollars in return for which Defendant would violate his fiduciary duty as an attorney. The court further explained that the district court did not exceed its authority under the MVRA by awarding restitution more than 90 days after initial sentencing, and Defendant has shown no prejudice from the delayed award. Finally, the court wrote that the MVRA applies in this case where Nike sustained a pecuniary loss directly attributable to those crimes as a result of incurring fees for its attorneys to attend the meeting demanded by Defendant at which he first communicated his extortionate threat. View "United States v. Avenatti" on Justia Law

Barsanti was delinquent on $1.1 million of senior secured debt it owed to BMO Harris Bank. Barsanti’s owner, Kelly, hired attorney Filer and Gereg, a financing consultant. After negotiations with BMO failed, Filer introduced Gereg to BMO as a person interested in purchasing Barsanti’s debt. Filer created a new company, BWC, to purchase the loans. BWC purchased the loans from BMO for $575,000, paid primarily with Barsanti’s accounts receivable. Barsanti also owed $370,000 in delinquent benefit payments to the Union Trust Fund. Filer, Kelly, and Gereg used BWC’s senior lien to obtain a state court judgment against Barsanti that allowed them to transfer Barsanti’s assets beyond the reach of the Union Fund, using backdated documents to put confession-of-judgment clauses into the loan documents and incorrectly claiming that Barsanti owed BWC $1.58 million. Filer then obtained a court order transferring Barsanti’s assets to BWC, which then transferred the assets to Millwork, another new entity, which continued Barsanti’s business after the Illinois Secretary of State dissolved Barsanti for unpaid taxes. Gereg was Millwork's nominal owner in filings with the Indiana Secretary of State. Barsanti filed for bankruptcy. Filer instructed others not to produce certain documents to the bankruptcy trustee.After a jury convicted Filer of wire fraud 18 U.S.C. 1343., the district court granted his motions for a judgment of acquittal. The Seventh Circuit reversed and remanded. The evidence was sufficient to support the jury’s verdicts. View "United States v. Filer" on Justia Law

Kwasnik was an estate-planning attorney who convinced clients to open irrevocable family trusts in order to avoid federal and state taxes and to ensure that they earned interest on the funds. Kwasnik named himself as a trustee, with authority to move assets into and out of the trust accounts. He received the account statements. In reality, Kwasnik moved the funds from his clients’ trust accounts to accounts of entities that he controlled. Within days, the funds were depleted. Clients were defrauded of approximately $13 million.Kwasnik pleaded guilty to money laundering, 18 U.S.C. 1956(a)(1)(B)(i), then moved to withdraw his plea. The district court denied the motion and sentenced him. Kwasnik then filed a notice of appeal. He later filed three more post-appeal motions in the district court concerning his guilty plea. The court denied them. The Third Circuit affirmed with respect to the denial of the first motion. The district court did not abuse its discretion in finding that Kwasnik did not have “newly discovered” evidence. The court declined to consider the others. A party must file a new or amended notice of appeal when he seeks appellate review of orders entered by a district court after he filed his original appeal, Fed.R.App.P. 4(b). View "United States v. Kwasnik" on Justia Law

Memphis attorney Skouteris practiced plaintiff-side, personal injury law. He routinely settled cases without permission, forged client signatures on settlement checks, and deposited those checks into his own account. Skouteris was arrested on state charges, was disbarred, and was indicted in federal court for bank fraud. At Skouteris’s federal trial, lay testimony suggested that Skouteris was not acting under any sort of diminished cognitive capacity. Two psychologists examined Skouteris. The defense expert maintained that Skouteris suffered from a “major depressive disorder,” “alcohol use disorder,” and “seizure disorder,” which began during Skouteris’s college football career, which, taken together, would have “significantly limited” Skouteris’s “ability to organize his mental efforts.” The government’s expert agreed that Skouteris suffered from depression and alcohol use disorder but concluded that Skouteris was “capable of having the mental ability to form and carry out complex thoughts, schemes, and plans.” Skouteris’s attorney unsuccessfully sought a jury instruction that evidence of “diminished mental capacity” could provide “reasonable doubt that” Skouteris had the “requisite culpable state of mind.”Convicted, Skouteris had a sentencing range of 46-57 months, with enhancements for “losses,” abusing a position of trust or using a special skill, and committing an offense that resulted in “substantial financial hardship” to at least one victim. The district court varied downward for a sentence of 30 months plus restitution of $147,406. The Sixth Circuit affirmed, rejecting challenges to the sufficiency of the evidence, the jury instructions, and the sentence. View "United States v. Skouteris" on Justia Law

Hardwick helped found a law firm, MHS. MHS later sold part of its foreclosure operation. Hardwick received $14-$15 million in compensation. Hardwick lost the money and owed millions in loans, many for gambling debts. When a bank and a casino sued him, Hardwick lied to a different bank in a line-of-credit application. In addition, in 2011-2014, Hardwick siphoned off about $26.5 million from MHS; $19 million came from trust accounts. Hardwick relied heavily on Maurya, who initially worked as an MHS controller. Hardwick promoted Maurya to CFO, giving her broad authority over the trust accounts. At Hardwick’s request, she repeatedly sent money from MHS to Hardwick or his creditors and significantly underreported the distributions. After a 2014 internal audit, Hardwick was convicted of wire fraud, conspiracy to commit wire fraud, and making false statements to a federally insured financial institution and was sentenced to 180 months’ imprisonment—an upward variance from the Guidelines range of 108-135 months. Maurya received a sentence of 84 months. A restitution order required Maurya and Hardwick to pay, jointly and severally, $40,307,431.00.The Eleventh Circuit vacated the restitution order as not supported by the reasoning required by law; affirmed Hardwick’s convictions and sentence; and vacated Maurya’s sentence. The district court violated the Ex Post Facto Clause by applying the 2018 Guidelines, which included a two-level substantial financial hardship enhancement added in 2015, after Maurya’s offense. View "United States v. Maurya" on Justia Law

Wegbreit founded Oak Ridge, a financial-services company, and worked with attorney Agresti to reduce his tax liability. At Agresti’s suggestion, Wegbreit transferred his Oak Ridge interest to a trust that would convey that interest to an offshore insurance company as a premium for a life insurance policy benefitting the trust. Agresti, as trustee, acquired a variable life insurance policy from Threshold (later Acadia), which shares a U.S. office with Agresti’s law firm. The Wegbreits leveraged the policies by means of policy loans and purchases by shell companies. Acadia, at Samuel’s direction, sold his Oak Ridge interest for $11.3 million. The proceeds were wired directly to Agresti, who conveyed them to Acadia; the Wegbreits did not report any taxable income from the sale. After an audit, the IRS determined that the trust income and policy gains, including those from the Oak Ridge sale, were taxable to the Wegbreits, who had underreported their 2005-2009 income by $15 million. The Wegbreits disputed that conclusion in the tax court. After discovery revealed suspicious documents related to the trust and policies, the IRS asserted civil fraud penalties.The judge found that the trust was a sham lacking economic substance that should be disregarded for tax purposes, agreed with the IRS assessment of tax liability, and imposed fraud penalties. The Seventh Circuit affirmed, noting that the Wegbreits had previously “stipulated away” their assertions, and ordering the Wegbreits’ attorney to show cause why he should not be sanctioned under Rule 38 for filing a frivolous appeal. View "Wegbreit v. Commissioner of Internal Revenue" on Justia Law

The version of the apportionment statute at issue in this appeal, OCGA 51-12-33, was enacted as part of the Tort Reform Act of 2005. Subsection (b) required damages to be apportioned “among the persons who are liable according to the percentages of fault of each person.” Subsection (b) had a critical textual difference from subsection (a): although subsection (a) applied “[w]here an action is brought against one or more persons,” subsection (b) applied only “[w]here an action is brought against more than one person . . . .” Although the Georgia Supreme Court previously decided at least one case in which the provisions of subsection (b) were applied in single-defendant cases, the Court expressly left open the question of whether such an application was proper. In this case, the Court of Appeals answered that open question by determining that the apportionment by percentage of fault directed by subsection (b) did not apply in single-defendant cases. The Supreme Court granted certiorari on the question of whether subsection (b) applied in single-defendant cases and also on the question of whether an expenses-of-litigation award under OCGA 13-6-11 was subject to apportionment. Although the Supreme Court reversed the Court of Appeals on the latter question and held that such expenses were not categorically excluded from apportionment, the Court concluded the Court of Appeals was correct on the scope of application of the apportionment directed by subsection (b): it applied only in cases “brought against more than one person,” not in single-defendant lawsuits like this one. Thus, the Supreme Court affirmed in part, reversed in part, and remanded for further proceedings regarding the trial court’s apportionment of the expenses-of-litigation award. View "Alston & Bird, LLP v. Hatcher Management Holdings, LLC" on Justia Law

Jensen was charged as a coconspirator in a felony indictment alleging a scheme under which members of the Santa Clara County Sheriff’s Department issued hard-to-obtain concealed firearms permits in exchange for substantial donations to an independent expenditure committee supporting the reelection campaign of Sheriff Smith. Jensen is a sheriff’s department captain identified as the individual within the sheriff’s department who facilitated the conspiracy. Jensen unsuccessfully moved to disqualify the Santa Clara County District Attorney’s Office from prosecuting him, alleging that that office leaked grand jury transcripts to the press days before the transcripts became public which created a conflict of interest requiring disqualification. He also joined in codefendant Schumb’s motion to disqualify the office due to Schumb’s friendship with District Attorney Rosen and Rosen’s chief assistant, Boyarsky.The court of appeal rejected Jensen’s arguments for finding a conflict of interest requiring disqualification: the grand jury transcript leak, Schumb’s relationships with Rosen and Boyarsky, and a dispute between Rosen and Sheriff Smith about access to recordings of county jail inmate phone calls. The trial court could reasonably conclude Jensen did not demonstrate that the district attorney’s office was the source of the leak. Jensen himself does not have a personal relationship with Rosen or Boyarsky. The trial court could reasonably conclude that Jensen did not establish a conflict of interest based on the existence of a dispute between the district attorney and the elected official with supervisory power over Jensen. View "Jensen v. Superior Court" on Justia Law