Articles Posted in White Collar Crime

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Steve Taylor unwittingly invested millions of dollars in what proved to be a massive Ponzi scheme. Before the scheme’s collapse, Taylor fortuitously withdrew his entire investment, plus nearly half a million dollars in profit. After the Ponzi scheme’s collapse, a court-appointed receiver brought what is commonly referred to as an “actual fraud” claim under the Colorado Uniform Fraudulent Transfer Act (“CUFTA”) section 38-8-105(1)(a), C.R.S. (2018), to claw back Taylor’s profits. As an innocent investor, Taylor argued he should be allowed to keep the money, contending (in the words of a statutory affirmative defense) that he provided “reasonably equivalent value” in exchange for his profits. A division of the court of appeals concluded that Taylor was not precluded as a matter of law from keeping some of the profit, because he may have provided reasonably equivalent value in the form of the time value of his investment. The receiver appealed. The Colorado Supreme Court determined Taylor could not keep the profit exceeding his initial investment based on the time value of money: under CUFTA, an innocent investor who profited from his investment in an equity-type Ponzi scheme, lacking any right to a return on investment, does not provide reasonably equivalent value based simply on the time value of his investment. View "Lewis v. Taylor" on Justia Law

Posted in: White Collar Crime

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Petitioner Austin Veith pleaded guilty to theft and securities fraud. He asked the trial court to sentence him to probation instead of a term of incarceration. The trial court rejected his request for probation with no incarceration and sentenced Veith to ten years of incarceration on the theft count, and twenty-five years of probation on the securities fraud count. Veith did not object when the judge announced his sentence.  But, he did not sign the probation order acknowledging and accepting the terms and conditions of his sentence of probation. Instead, he filed a motion to correct his sentence pursuant to Crim. P. 35(a), arguing that the probationary portion of his sentence must be vacated because he did not consent to it. The trial court denied the motion, and Veith appealed.  The court of appeals affirmed in part and reversed in part, concluding that Veith had consented to the terms and conditions of the sentence of probation by requesting probation prior to the hearing, but that his consent did not include certain terms of probation added by the court. As a result, the court of appeals remanded the case to the trial court to remove the terms of probation from his sentence that Veith had not requested before sentencing.I t did not order any modification of the prison sentence. The Colorado Supreme Court granted certiorari to determine the legality of Veith’s sentence of probation, and reversed the appellate court's judgment. The Supreme Court held that a trial court cannot impose a sentence of probation without the defendant’s consent. In this case, Veith consented to probation in lieu of incarceration; therefore, the trial court exceeded the scope of Veith’s consent when it imposed a ten-year sentence of incarceration in addition to probation. The trial court lacked authority to impose the sentence of probation.  Accordingly, the Court vacated Veith’s sentence in its entirety, reversed the judgment of the court of appeals, and remanded the case to that court to return the case to the trial court for resentencing consistent with Veith’s plea agreement. View "Veith v. Colorado" on Justia Law