| Docket: 13-2818 | Opinion Date: July 21, 2014 |
| Judge: Wood |
| Areas of Law: Business Law, Corporate Compliance, White Collar Crime |
Massuda invested $4,000,000 in Concessions, Inc., which was part owner, with Tony Rezko, of a group of Panda Express restaurants. Rezko, who controlled several companies, hoped to expand the business. Rezko was indicted and convicted on federal fraud and bribery charges, for which he received a lengthy prison sentence in 2011. Rezko’s real estate ventures collapsed. Massuda filed suit against Rezko’s corporations and associated people, raising claims of unjust enrichment, fraud, and aiding and abetting a breach of fiduciary duty. The district court concluded that all of Massuda’s claims, except portions of her fraud claim, were derivative, and on that ground dismissed those counts with prejudice for failure to state a claim. Massuda declined to amend her fraud allegations, which were then dismissed. The Seventh Circuit affirmed, rejecting a claim that if the holder of a majority interest acts in a way that helps him and hurts the minority, there is a direct claim. A direct claim exists when a majority shareholder engages in wrongdoing in such a way as to dilute the voting power of the minority shareholders; a dilution of voting power is a direct harm to the shareholders that is not felt by the company.
|
| Docket: 13-1235 | Opinion Date: July 21, 2014 |
| Judge: Manion |
| Areas of Law: Civil Rights, Labor & Employment Law |
Bell was employed as a substance abuse counselor at an Indiana maximum security prison. An investigator, looking for security breaches, discovered that night-shift employees were having sex on Bell’s desk and told her that he was not concerned about night-shift staff having sex but suggested she wash her desk every morning. The superintendent said that, as long as inmates were not involved, he was not concerned. Immediately thereafter, the superintendent discovered that Bell was having an affair with the Major in charge of custody (allegedly involving sex on his desk) and both were terminated. The prison settled the Major’s appeal to the State Employees’ Appeals Commission and called him to testify against Bell at her appeal. Major was able to keep his benefits, including his pension, to quickly get unemployment benefits, and to subsequently begin working at the prison as a contractor. Bell was not afforded similar benefits and opportunities and filed suit, alleging Title VII claims of sex discrimination, retaliation, and hostile work environment. The district court granted summary judgment to the state, concluding that Bell was not similarly situated to the Major, that she failed to prove retaliation, and that the sexual tenor of the prison’s work environment was not severe or pervasive enough to qualify as hostile. The Seventh Circuit reversed with regard to the discrimination and hostile environment claims, but affirmed with regard to her retaliation claims.
|
| Docket: 11-3743 | Opinion Date: July 21, 2014 |
| Judge: Rovner |
| Areas of Law: Criminal Law, White Collar Crime |
Locke and co‐conspirator engaged in real estate fraud. Locke’s presentence report recommended a 16-point addition to the offense level, calculating a loss of $2,360,914.51 based on all of the properties underlying 15 original counts, although 10 counts had been dismissed. She made a written objection. The probation office argued that relevant conduct could be considered in determining the loss amount, but that even if the loss amount was based solely on Locke’s convicted conduct, the loss amount would exceed $1 million. At sentencing, Locke’s lawyer stated that he was withdrawing the objection to the loss calculation. The district court sentenced Locke to 71 months and ordered her to pay $2,360,916.51 in restitution to 13 entities. The Seventh Circuit remanded, finding that the district court did not make the findings necessary when using relevant conduct to increase the sentence and were insufficient under the Mandatory Victim Restitution Act, 18 U.S.C. 3663A. On remand, Locke successfully moved to bar any evidence regarding relevant conduct not already in the record at the first sentencing. The district court recalculated without the two‐level enhancement for offenses involving 10 or more victims. Locke admitted that she had withdrawn her objections to the amount of loss in the first sentencing, but asserted that her loss amount should not be greater than the restitution amount calculated without regard to relevant conduct. The district court sentenced Locke to 57 months of imprisonment and ordered her to pay $340,789 in restitution, reduced by the amount recovered from sales of the property. The Seventh Circuit discussed the factors that distinguish loss and restitution, but affirmed Locke’s sentence based on waiver.
|
| Docket: 12-3554 | Opinion Date: July 21, 2014 |
| Judge: Rovner |
| Areas of Law: Contracts, Criminal Law, Gaming Law, Native American Law, White Collar Crime |
The Ho-Chunk Nation, a federally recognized Indian Tribe, operates casinos in Wisconsin and nets more than $200 million annually from its gambling operations. Cash Systems, one of three businesses involved in this case, engaged in issuing cash to casino customers via automated teller machines and kiosks, check-cashing, and credit- and debit-card advances. Whiteagle, a member of the Nation, held himself out as an insider and offered vendors an entrée into the tribe’s governance and gaming operations. Cash Systems engaged Whiteagle in 2002 as a confidential consultant. Cash Systems served as the Nation’s cash-access services vendor for the next six years, earning more than seven million dollars, while it paid Whiteagle just under two million dollars. Whiteagles’s “in” was his relationship with Pettibone, who had been serving in the Ho-Chunk legislature since 1995. Ultimately, Whiteagle, Pettibone, and another were charged with conspiracy (18 U.S.C. 371) to commit bribery in connection with the contracts with the Ho-Chunk Nation and substantive bribery (18 U.S.C. 666). Whiteagle was also charged with tax evasion and witness tampering. Pettibone pleaded guilty to corruptly accepting a car with the intent to be influenced in connection with a contract. Whiteagle admitted that he had solicited money and other things of value for Pettibone from three companies, but denied actually paying bribes to Pettibone and insisted that he and Pettibone had advocated for Whiteagle’s clients based on what they believed to be the genuine merits of those clients. Convicted on all counts, Whiteagle was sentenced, below-guidelines, to 120 months. The Seventh Circuit affirmed, rejecting challenges to the sufficiency of the evidence on the bribery charges, the loss calculation, and admission of certain evidence.
|
| Docket: 13-3084 | Opinion Date: July 21, 2014 |
| Judge: Kanne |
| Areas of Law: Contracts |
Spitz, a freelance copywriter, developed a plan to market “pet safe plants” to the burgeoning pet supplies market. She pitched the idea to Amerinova, a company that develops and licenses plant varieties. Although Amerinova expressed interest, the project stalled. When Spitz discovered that Proven Winners, a company partially owned by the owners of Amerinova, had described some of its plants as “pet friendly” on its website and plant tags, she sued Proven Winners and its owner, Euro. The district court entered summary judgment in favor of Proven Winners and Euro. The Seventh Circuit affirmed. Spitz did not identify any legal theory that would make Proven Winners and Euro accountable for a contract allegedly reached with Amerinova.
|
| Docket: 13-2332 | Opinion Date: July 21, 2014 |
| Judge: Wood |
| Areas of Law: ERISA, Tax Law |
ABA Retirement, a not‐for‐profit corporation created by the American Bar Association to provide its members and their employees with a retirement plan qualified to take advantage of income tax benefits, created master retirement plans for adoption by lawyers and law firms. In 1999 ABA Retirement hired State Street Bank to act as sole Plan trustee. ABA Retirement directors ceased to be trustees. ABA Retirement still maintained the IRS‐approved master tax‐qualified retirement plans and acted as Plan fiduciary, with authority to engage, monitor, and fire its trustee. It was responsible for Plan documents (ensuring that they were tax‐qualified), oversight of vendors, contract negotiations, and approval of State Street’s marketing plan. State Street had authority to engage and fire investment advisors, but was required to consult with ABA Retirement. The Plan paid ABA Retirement a fee for its services in connection with the Program based on a percentage of l invested assets. ABA Retirement received the interest on the funds. In 2000, 2001, and 2002, ABA Retirement reported gross income of $1,601,217 to $1,861,258. Its taxable income for those years was $384,972 to $672,098; it held assets worth $3.5 million. On tax returns ABA Retirement described itself as an employee benefit fund, and its product as retirement plans. In 2004 ABA retirement sought tax‐exempt status. In 2005, the IRS determined that ABA Retirement did not qualify for the exemption. ABA Retirement filed claims for refunds on taxes it paid from 2000-2002; those were denied. ABA Retirement filed suit, arguing that it was a tax‐exempt “business league” under 26 U.S.C. § 501(c)(6), from 2000 to 2002, and entitled to a refund. The district court granted summary judgment in favor of the government. The Seventh Circuit affirmed.
|
No comments:
Post a Comment