United States v. Crosgrove
2011 U.S. App. LEXIS 5364
| 6th Cir. | 2011Background
- Crosgrove joined AREA/Noble in 2001 to process members' claims in a fraudulent insurance scheme.
- AREA/Noble operated without genuine insurance after Midwest Insurance’s policy collapsed around 1996–1997, with payouts funded by member fees.
- Crosgrove used an alias John Thomas and wrote numerous letters to members, sometimes posing as counsel for AREA/Noble or Midwest.
- AREA/Noble shifted assets to United Real Estate Association (UREA) in 2002–2004, with Crosgrove assisting in creation.
- Mar. 2004 U.S. Marshals seized AREA/Noble offices; Crosgrove, Haukedahl, and Ritson were indicted on conspiracy to commit mail/wire fraud and conspiracy to commit money laundering.
- Crosgrove's trial produced evidence of knowledge and participation in the fraud, leading to convictions on mail/wire fraud and money laundering charges; the money laundering conviction was later vacated on appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Sufficiency of evidence for mail/wire fraud conspiracy | Crosgrove claims insufficient knowledge to join conspiracy | Crosgrove disputed knowledge and participation | Sufficient evidence supports mail/wire fraud conspiracy |
| Sufficiency of evidence for money laundering conspiracy | Proceeds were profits of the crime | Proceeds were not shown to be profits; only receipts | Money laundering conviction vacated (insufficient evidence under Santos/Kratt) |
| Evidentiary rulings and Fourth Amendment issues | Challenged Barbados letter, adult-entertainment evidence, expert witness exclusion, Jencks, instant messages | Rulings supported by law and trial strategy | No reversible error in admitted evidence; other claims unpersuasive or forfeited |
| Sentencing issues including loss calculation and enhancements | Loss and enhancements properly determined | Challenge to loss calculation and applicability of enhancements | Loss calculation and enhancements upheld; see remand for resentencing consistent with vacatur of one count |
| Ineffective assistance and prosecutorial misconduct | Claims of ineffective assistance and misconduct | Record insufficient for direct appeal | Claims are premature or unsubstantiated on record |
Key Cases Cited
- United States v. Santos, 553 U.S. 507 (2008) (proceeds definition in money laundering context (profits vs. receipts))
- United States v. Kratt, 579 F.3d 558 (6th Cir. 2009) (merger framework for proceeds; profits requirement post-Santos)
- United States v. Haun, 90 F.3d 1096 (6th Cir. 1996) (previous interpretation of proceeds as gross receipts; not controlling after Santos/Kratt)
- United States v. Moreland, 622 F.3d 1147 (9th Cir. 2010) (merger analysis in money laundering context; discussed but not controlling here)
- United States v. Graham, 275 F.3d 490 (6th Cir. 2001) (plain-error review standard for forfeited issues)