US v. Warshak, 08-3997

Massive scam to defraud consumers of a male sexual performance enhancing herbal supplement

US v. Warshak, 08-3997, concerned defendants challenges to their convictions for a massive scheme to defraud their customers, in connection with the sales of their flagship product Enzyte, an herbal supplement purported to enhance male sexual performance.

The court affirmed where: 1) although government agents violated defendant's Fourth Amendment rights by compelling NuVox to turn over emails without first obtaining a warrant based on probable cause, the exclusionary rule does not apply in this case because the agents relied in good faith on provisions of the Stored Communications Act; 2) the district court did not err in refusing to hold a full-fledged hearing under Kastigar v. U.S. when determining whether government agents had improperly used privileged material seized during a valid search of Berkeley's headquarters; 3) the district court did not abuse its discretion by failing to order the government to provide discovery in a different format, the government did not duck its obligations under Brady, and the district court did not err in refusing to grant defendants a continuance so that they could continue examining the discovery materials turned over by the government; 4) the district court did not err in refusing to grant defendant a new trial based on an alleged Brady violation; 5) the district court did not err in refusing to grant the defendants a new trial on the basis of prosecutorial misconduct; 6) the evidence was sufficient to support defendants' respective convictions for conspiracy to commit mail, wire, and bank fraud in violation of 18 U.S.C. section 1349; 7) evidence was sufficient to support defendant's convictions for mail fraud in violation of 18 U.S.C. section 1341; 8) evidence was sufficient to support defendants' respective convictions for bank fraud, in violation of section 1344, and the district court did not err in instructing the jury that the government may prove specific intent to defraud a bank by showing specific intent to defraud a third party; 9) the evidence was sufficient to support defendant's conviction for conspiracy to commit access-device fraud; 10) the evidence was sufficient to support defendant's and TCI's respective convictions for money laundering; 11) the evidence was sufficient to support defendant's conviction for conspiracy to obstruct an FTC processing; 12) the district court did not err in refusing to order the government to reveal whether or not it had conducted any additional surreptitious searches of defendant's emails or communications; 13) the district court failed to provide an adequate explanation of its determination that the defendants should be held accountable for $411 million in losses; 14) district court did not abuse its discretion in refusing to admit certain evidence during the forfeiture phase of the trial, and the evidence was sufficient to support the proceeds-money and money-laundering forfeiture judgments against defendant.

However, the court vacated defendant's 25-year sentence and remanded for resentencing, as well as the defendant's mother's money laundering convictions as the evidence was insufficient to support the defendant's mother's money-laundering convictions.  The court also found the evidence was insufficient to support the money-laundering forfeiture judgment against her, and as such, the mother's sentence is vacated and remanded for resentencing.

Related Link:

• Read the Sixth Circuit's Full Decision in US v. Warshak, 08-3997