In United States v. Blaszczak,the Second Circuit recently remanded a criminal conviction concerning the misappropriation of confidential information to the District Court in light of the Supreme Court’s decision in Kelly v. United States, which held that a scheme to alter “a regulatory choice is not one to appropriate the government’s property” for purposes of the wire fraud statute. The Second Circuit previously affirmed convictions against defendants David Blaszczak, Theodore Huber, Robert Olan, and Christopher Worrall for conversion of government property, 18 U.S.C. § 641, and wire fraud, 18 U.S.C. § 1343, as well as convictions against Blaszczak, Huber, and Olan of Title 18 securities fraud, 18 U.S.C. § 1348, and related conspiracy charges under 18 U.S.C. §§ 371, 1349. The convictions all stemmed from a scheme that involved misappropriating confidential information from the Centers for Medicare & Medicaid Services (“CMS”), at which certain defendants previously worked.On remand, the defendants argued, and the Government agreed, that the CMS information at issue “does not constitute ‘property’ or a ‘thing of value’ within the meaning” of the relevant statues after Kelly, such that the convictions on the substantive counts should be reversed and dismissed. The Second Circuit agreed. The Government sought affirmance on the remaining conspiracy convictions, but the Second Circuit vacated those convictions and remanded for further proceedings because the verdicts did “not reveal whether the jury found that the charged defendants conspired to engage in alle

e Department of Justice’s concessions in response to recent Supreme Court precedent, Blaszczak II will have a significant impact on insider trading and fraud prosecutions and beyond.Blaszczak IIn March 2018, the government filed a superseding indictment in the Southern District of New York alleging that Worrall, an employee at the Centers for Medicare & Medicaid Services (CMS), had disclosed CMS’s confidential information to Blaszczak, a hedge fund consultant, regarding the timing and substance of proposed CMS rule changes that would affect the Medicare and Medicaid reimbursement rates for certain types of medical care. Blaszczak then tipped Huber and Olan, employees at a health care-focused hedge fund, and they shorted shares of companies that would be negatively affected by the reimbursement rate changes. The government’s indictment included counts for Title 15 securities fraud, wire fraud (18 U.S.C. § 1343), Title 18 securities fraud (18 U.S.C. § 1348), conversion of U.S. property (18 U.S.C. § 641) and conspiracy. On May 3, 2018, a jury acquitted all defendants on the Title 15 securities fraud counts, but found all of the defendants guilty on at least some Title 18 fraud and conversion counts and, with the exception of Worrall, on the conspiracy counts.In December 2019, the 2nd Circuit upheld the convictions in Blaszczak I. The panel held that (i) the confidential information misappropriated from CMS constituted “property” or “a thing of value” under the relevant statutes; and (ii) that the “personal benefit” test first articulated in Dirks v. SEC—which stipulates that tipper-tippee liability under Title 15 securities fraud requires a jury to find that (a) the tipper disclosed material nonpublic information in order to receive a personal benefit and (b) that the tippee was aware of the tipper’s breach of duty and receipt of such a benefit—did not apply to Title 18 wire or securities fraud.While the Blaszczak defendants’ petition for certiorari was pending, on May 7, 2020, the S

Green regularly wrote herself checks from the account to withdraw sums similar in amount to the VA payments. In February 2016—approximately four-and-a-half years after the VA made its final deposit—the government filed an Information charging Green with willfully and knowingly embezzling, stealing, and converting money of the United States in violation of 18 U.S.C. §641. Green entered into a plea agreement and agreed to plead guilty to stealing $35,774 between January 10, 2009 and August 2, 2011.

United States v. Ligon, 440 F.3d 1182 (9th Cir. 2006)In a case involving theft of government property, the government must prove that the stolen item has “value.” 18 U.S.C. § 641. The government failed to prove that the stolen Indian artifacts had value.

The defendant had good reason for not raising the competency issue on appeal because the letter was sent after the appeal. U.S. v. Crook, 2007 WL 182998 (1/25/07) - A example of the weakness of the Double Jeopardy Clause. It was okay to pursue an embezzlement prosecution under 18 U.S.C. § 666, even though the d.ct. dismissed for lack of evidence a previous embezzlement prosecution under 18 U.S.C. § 641 based on the same conduct. The d.ct. dismissed the § 641 charge because § 641 required the money taken to be U.S. property. § 666 doesn't have that element.Heckard v. Tafoya, 2007 WL 241280 (1/30/07) - A previous 2241 petition challenging the petitioner's confinement conditions did not make petitioner's subsequent 2254 petition a successive petition that has to overcome ultra-difficult obstacles to be granted.U.S. v. Richardson, 2007 WL 172192 (1/24/07) - The 10th feels compelled to follow a 10th Circuit case, U.S. v. Manjarrez, 348 F.3d 881 (10th Cir. 2002),which two of the three panel members seem to find questionable, [describing the result as "bizarre"], that a person who moves to the right without signaling to use certain toll booths in Oklahoma violates a state statute requiring the use of signals when exiting, even though such a move does not cross any lane lines and involves going back onto, not leaving, the highway.

rather than civil sanctions, and it would have made it easy for the government to use Title 18 to avoid a long line of Title 15 decisions setting forth the elements of insider trading. In turn it may have chilled the legal exchange of information between insiders and analysts by raising the possibility of inadvertent liability should an outsider act on the insider’s information. A future panel may now consider those potential costs when deciding the issue.FootnotesDechert LLP represented the Alternative Investment Management Association, Ltd. as amicus curiae in both the Second Circuit and the Supreme Court appeals in Blaszczak.United States v. Blaszczak, ___ F. 4th ___, 2022 WL 17926047 (2d Cir. 2022) (Blaszczak II).United States v. Blaszczak, 947 F.3d 19 (2d Cir. 2019) (Blaszczak I).Kelly v. United States, 140 S. Ct. 1565 (2020).Blaszczak II, 2022 WL at *13 (Walker, J., concurring).Id. at 26–28Blaszczak II, 2022 WL 17926047 at *2, 12–13; 15 U.S.C. §§ 78j(b), 78ff; 18 U.S.C. §§ 371, 641, 1343, 1348, 1349; 17 C.F.R. § 240.10b-5.Blaszczak I, 947 F.3d at 29 (citing Dirks v. SEC, 463 U.S. 646 (1983)).Id. at 29–30.Id. at 30–31; 18 U.S.C. §1343 (“money or property”); id. §1348(2) (same).Blaszczak I, 947 F.3d at 39–40; see also 18 U.S.C. §641 (“money, or thing of value”).Blaszczak I, 947 F.3d at 35.Blaszczak I, 947 F.3d at 26.Olan v. United States, 141 S. Ct. 1040 (Mem.) (2021) (citing Kelly, 140 S. Ct. 1565); Blaszczak v. United States, 141 S. Ct. 1040 (Mem.) (2021) (same).Blaszczak II, 2022 WL 17926047 at *1.Kelly, 140 S. Ct. at 1572 (quoting Cleveland v. United States, 531 U.S. 12, 26 (2000)).Id. at 1571 (emphasis in the original).Dirks v. SEC, 463 U.S. 646, 667 (1983).Id. at 662.See Salman v. United States, 137 S. Ct. 420, 423 (2016); United States v. Newman, 773 F.3d 438, 447–48 (2d Cir. 2014), abrogated on other grounds by Salman, 137 S. Ct. 420; SEC v. Obus, 693 F.3d 276, 289 (2d Cir. 2012).Compare 18 U.S.C. §1348 (prohibiting “a scheme or artifice to defraud”), with

A recent example demonstrates the continued viability of Ex Post Facto protection. A defendant is convicted of defrauding the United States (18 U.S.C. § 641) by securing federal FEMA funds by falsely claiming he resided in New Orleans during the Hurricane Katrina catastrophe. The defendant’s criminal conduct was complete in September 2005.

ithout proof of a personal benefit to a tipper.The court’s holding, which distinguishes between confidential information of government agencies and that of commercial entities, does not affect insider trading cases involving MNPI of public companies and other non-government sources.BackgroundThe Indictment and TrialIn the underlying district court case, the government alleged that four defendants participated in schemes in which employees from federal Centers for Medicare and Medicaid Services (“CMS”) obtained MNPI maintained by CMS relating to reimbursement rates for medical treatments and disclosed that information through a consultant to hedge fund traders, who thereafter traded on that information.The indictment charged the defendants with insider trading under both (1) the Exchange Act and Rule 10b-5 and (2) the Title 18 securities fraud statute (18 U.S.C. § 1348).It also charged the defendants with conspiracy, wire fraud (18 U.S.C. § 1343), and conversion of government property (18 U.S.C. § 641).The district court’s jury instructions for the Exchange Act offenses required the government to prove, among other things, that the alleged tipper – an employee of CMS – breached his duty of trust and confidence to CMS and received a personal benefit for disclosing MNPI, and that the alleged tippees – the consultant and hedge fund traders – received and/or traded on that information and knew of the alleged tipper’s breach and personal benefit.The court’s jury instructions for the Title 18 securities fraud offenses, however, did not require the government to prove the alleged tipper’s breach of a duty of trust and confidence, nor did they require proof of receipt of a personal benefit.At trial, the jury acquitted the defendants of the Exchange Act offenses. But the jury found the defendants guilty of conspiracy to commit securities fraud, convert government property and defraud the United States, and various substantive counts of Title 18 securities fraud, wire fraud, and conversion o

g liability. While the decision does not come as a surprise, it does have potentially far-reaching ramifications for the government’s ability to make use of Title 18 to prosecute fraud and theft charges.Factual and Procedural BackgroundThe Blaszczak prosecution involved allegations that a political intelligence consultant received nonpublic information from the Centers for Medicare & Medicaid Services (“CMS”), a government agency, concerning planned changes to Medicare reimbursement rates for particular drugs. The consultant then shared that information with two clients, who allegedly traded in securities of companies that would be affected by CMS’s forthcoming changes.In an eighteen-count indictment, the government charged the defendants with securities fraud under Section 15 U.S.C. § 78j(b) & 78ff (the “Title 15” counts); a seldom-used theory of securities fraud under 18 U.S.C. § 1348; wire fraud under 18 U.S.C. § 1343 (the “Title 18” counts); conversion of government property under 18 U.S.C. §§ 641 & 2; and several conspiracy charges. At trial, the jury acquitted the defendants of all of the Title 15 counts, but convicted them of some of the Title 18 counts.The defendants appealed, and the Second Circuit initially affirmed the convictions in Blaszczak I, becoming one of the first appellate courts to address the scope of Title 18 insider trading liability. In doing so, it held that: (i) confidential information taken from CMS is the government’s “property” for purposes of the Title 18 statutes at issue; and (ii) unlike Title 15 jurisprudence, which requires the government to prove that the person providing the confidential information received a personal benefit, Title 18 jurisprudence does not currently impose a personal benefit requirement.Upon further appeal, the U.S. Supreme Court remanded the case for reconsideration in light of Kelly v. United States, which it had recently decided. Kellyinvolved charges against former New Jersey officials for closing highway toll plaza lane

apply to Title18 securities fraud under §1348 – or to wire fraud under 18U.S.C. §1343.The court rejected the defendants’ argument that eliminating the personal-benefit requirement from Title18 securities fraud (and wire fraud) would give the government “a different – and broader – enforcement mechanism to address securities fraud than what had previously been provided in the Title15 fraud provisions.”The court concluded that §1348 was designed to achieve that result.The court also held that, “in general, confidential government information may constitute government ‘property’ for purposes of” the Title18 securities-fraud and wire-fraud statutes. “[G]overnment agencies have strong interests – both regulatory and economic – in controlling whether, when, and how to disclose confidential information relating to their contemplated rules” (here, CMS’s rules about reimbursement rates). In addition, the court upheld the convictions under the statute prohibiting conversion of federal property (18U.S.C. §641), ruling that the government’s confidential information constituted a “thing of value.”Judge Kearse dissented because she did not consider the agency’s pre-decisional regulatory information to be “property” or a “thing of value” under Title18.The Supreme Court’s Kelly Decision and Its AftermathWhile Blaszczak was working its way through the courts, a separate prosecution arising from the “Bridgegate” scandal was also proceeding. Bridgegate involved alleged political retaliation by the Governor of New Jersey’s Deputy Chief of Staff and the Deputy Executive Director of the Port Authority of New York and New Jersey (whom the Governor had appointed) against a local mayor who allegedly had thwarted the Governor’s wishes.According to the government’s allegations, the Governor – a Republican – was up for reelection and wanted to win a large bipartisan victory to promote his presidential aspirations. The Deputy Chief of Staff sought endorsements from Democratic mayors, including the Mayor of