Justia International Trade Opinion Summaries

Articles Posted in White Collar Crime
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Plaintiff brought this putative class action against more than twenty banks and brokers, alleging a conspiracy to manipulate two benchmark rates known as Yen-LIBOR and Euroyen TIBOR. Plaintiff brought claims under the Commodity Exchange Act (“CEA”), and the Sherman Antitrust Act, and sought leave to assert claims under the Racketeer Influenced and Corrupt Organizations Act (“RICO”). The district court dismissed the CEA and antitrust claims and denied leave to add the RICO claims. Plaintiff appealed, arguing that the district court erred by holding that the CEA claims were impermissibly extraterritorial, that he lacked antitrust standing to assert a Sherman Act claim, and that he failed to allege proximate causation for his proposed RICO claims.   The Second Circuit affirmed. The court explained that the conduct—i.e., that the bank defendants presented fraudulent submissions to an organization based in London that set a benchmark rate related to a foreign currency—occurred almost entirely overseas. Indeed, Plaintiff fails to allege any significant acts that took place in the United States. Plaintiff’s CEA claims are based predominantly on foreign conduct and are thus impermissibly extraterritorial. Further, the court wrote that the district court also correctly concluded that Plaintiff lacked antitrust standing because he would not be an efficient enforcer of the antitrust laws. Lastly, the court agreed that Plaintiff failed to allege proximate causation for his RICO claims. View "Laydon v. Coöperatieve Rabobank U.A., et al." on Justia Law

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U.S. Customs Officer Parra spent December 8, 2010 “cracking open containers” at a warehouse near the Los Angeles seaport. Opening one from South Korea to inspect its freight, Parra found a fully assembled, five-foot-tall industrial turbo blower. A placard riveted to the side read, “Assembled in USA.” The discovery led to a federal investigation that traced back to Lee. Prosecutors charged Lee with executing a scheme to defraud local governments by falsely representing that his company manufactured its turbo blowers in the U.S. The Seventh Circuit affirmed his wire fraud convictions, reasoning that Lee’s misrepresentations were material under the American Recovery and Reinvestment Act, 123 Stat. 115 (2009), which includes a “Buy American” provision. The evidence adequately supports Lee’s participation in a scheme to defraud and his intent to do so. Lee used interstate wires as a part of that scheme. The indictment afforded Lee ample notice of the case the government presented at trial and included specific details of the crimes alleged to avoid double jeopardy risk; no impermissible constructive amendment or variance occurred. The court also upheld Lee’s smuggling convictions under 18 U.S.C. 545. The mislabeling served an important function in Lee’s broader scheme to deceive customers about the origin of the turbo blowers. View "United States v. Lee" on Justia Law

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Four persons were charged with arranging the murder of “Montes” in Mexico to reduce competition against a Chicago-based criminal organization that created bogus immigration documents. The Seventh Circuit reversed dismissal on grounds that the indictment proposed the extraterritorial application of U.S. law. On remand, one defendant pleaded guilty. Three were convicted under 18 U.S.C. 1959, the Racketeer​ Influenced and Corrupt Organizations Act (RICO); 18 U.S.C. 956(a)(1), which forbids any person “within the jurisdiction of the United States” from conspiring to commit a murder abroad; and conspiring to produce false identification documents, 18 U.S.C. 371. On appeal, defendants cited the Supreme Court’s 2010 decision, Morrison v. National Australia Bank, which reiterated the presumption against extraterritorial application of civil statutes. The Seventh Circuit affirmed, noting that its earlier decision recognized that presumption and thought it not controlling, because of the differences between criminal and civil law, and because the murder in Mexico was arranged and paid for from the U.S., and was committed with the goal of protecting a criminal organization that conducted business in the U.S., to defraud U.S. officials and employers. View "United States v. Leija-Sanchez" on Justia Law

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From 2004-2008, Georgiou and co-conspirators engaged in a stock fraud scheme resulting in more than $55 million in actual losses. The scheme centered on four stocks, all quoted on the OTC Bulletin Board or the Pink OTC Markets Inc. The conspirators opened brokerage accounts in Canada, the Bahamas, and Turks and Caicos, which they used to trade stocks, artificially inflating prices. They were able to sell their shares at inflated prices and used the shares as collateral to fraudulently borrow millions of dollars from Bahamas brokerage firms. In 2006, Waltzer, a co-conspirator, began cooperating in an FBI sting operation. A jury convicted Georgiou of conspiracy, securities fraud, and wire fraud. The district court sentenced him to 300 months’ imprisonment, ordered him to pay restitution of $55,823,398, ordered a special assessment of $900, and subjected Georgiou to forfeiture of $26,000,000. The Third Circuit affirmed, rejecting an argument that the securities and wire fraud convictions were improperly based upon the extraterritorial application of United States law. The securities were issued by U.S. companies through U.S. market makers acting as intermediaries for foreign entities. The court also rejected claims of Brady and Jencks Act violations and of error on evidentiary and sentencing issues. View "United States v. Georgiou" on Justia Law

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Trek was the importer of record for 72 entries of men’s suits in 2004. Mercantile was the consignee. Shadadpuri is president and sole shareholder of Trek, and a 40% shareholder of Mercantile. Trek and Mercantile provided a number of fabric “assists” to manufacturers outside the U. S. An assist refers to “materials, components, parts, and similar items incorporated in the imported merchandise,” 19 U.S.C. 1401a(h)(1)(A)(i). Customs determined that the entry documentation failed to include the cost of the fabric assists in the price paid for the suits which lowered the amount of duty payable by Trek. Shadadpuri had previously failed to include assists in entry declarations when acting on behalf of a corporate importer. The Court of International Trade found Shadadpuri liable for gross negligence in connection with the entry of imported merchandise and imposed penalties under 19 U.S.C. 1592(c)(2). The Federal Circuit reversed the penalty assessment, holding that corporate officers of an “importer of record” are not directly liable for penalties. Shadadpuri is not liable, absent piercing Trek’s corporate veil to establish that Shadadpuri was the actual importer of record, as defined by statute, or establishing that Shadadpuri is liable for fraud or as an aider and abettor. View "United States v. Trek Leather, Inc." on Justia Law