United States v. Poulsen
2011 U.S. App. LEXIS 17715
| 6th Cir. | 2011Background
- NCFE, a healthcare finance company, collapsed following widespread improper funds transfers and misrepresentations to investors.
- Poulsen, NCFE's co-founder and CEO, was involved in approving advances to providers without eligible accounts receivable and in transferring funds between reserve programs to meet minimum balances.
- Governing securities involved: conspiracy to commit securities fraud, wire fraud, and money laundering with a loss calculation in the billions; Poulsen was severed from co-defendants and sentenced to 360 months concurrent with the Obstruction Case.
- Obstruction Case: Poulsen was convicted of conspiracy to obstruct justice, witness tampering, and obstruction; evidence included efforts to pay a witness and influence testimony via Demmler and Gibson, with FBI wiretap and recordings.
- Wiretap suppression and entrapment challenges were raised in the Obstruction Case; district court denied suppression and denied entrapment instruction, and the government relied on loss figures in sentencing.
- On appeal, the Sixth Circuit affirmed judgments and sentences in both the Obstruction and Securities Cases, addressing evidentiary and sentencing issues as requested.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Entitlement to entrapment instruction | Poulsen asserts government inducement and lack of predisposition. | Poulsen contends entrapment occurred via third-party actions. | No entrapment instruction warranted; no inducement shown. |
| Wiretap suppression and Franks hearing | Poulsen argues suppression of wiretap evidence and need for Franks hearing due to false statements. | Poulsen claims warrant affidavit contained material falsehoods/omissions. | Wiretap upheld; no Franks hearing required. |
| Use of loss amount to enhance obstruction sentence | Poulsen challenges reliance on Securities Case loss to enhance Obstruction Case sentence. | Poulsen contends loss misused and not properly proven. | Enhancement upheld; loss characteristics properly considered. |
| Venue transfer in Securities Case | Poulsen claims denial of transfer violated fair-trial rights due to pretrial publicity. | Poulsen argues venue should shift to a less prejudicial district. | Denial affirmed; no presumptive or actual prejudice established. |
| Admission of Obstruction Case evidence in Securities Case | Poulsen argues 404(b) evidence from Obstruction Case is unfairly prejudicial. | Poulsen contends prejudicial and confusing to jury. | Evidence properly admitted under Rule 404(b) for consciousness of guilt; not an abuse of discretion. |
Key Cases Cited
- Khalil v. United States, 279 F.3d 358 (6th Cir. 2002) (entrapment elements and standard for jury instruction)
- Mathews v. United States, 485 U.S. 58 (U.S. 1988) (two-element entrapment test)
- Franks v. Delaware, 438 U.S. 154 (U.S. 1978) (Franks hearing standards for false affidavit statements)
- Alfano v. United States, 838 F.2d 158 (6th Cir. 1988) (wiretap necessity and probability standards)
- Rice v. United States, 478 F.3d 704 (6th Cir. 2007) (necessity and scope of wiretap applications)
- Gall v. United States, 552 U.S. 38 (U.S. 2007) (reasonableness review post-Booker; procedural and substantive)
- Monus v. United States, 128 F.3d 376 (6th Cir. 1997) (requirement to explain loss calculations under Rule 32)
- Nelson v. United States, 922 F.2d 311 (6th Cir. 1990) (predisposition and entrapment considerations)
- United States v. Goosby, 523 F.3d 632 (6th Cir. 2008) (Rule 404(b) admissibility and balancing)
- United States v. Miller, 161 F.3d 977 (6th Cir. 1998) (sentencing procedures and losses calculations)