Opinion ID: 2718751
Heading Depth: 3
Heading Rank: 3

Heading: Counts Nine and Ten: Securities Fraud

Text: Forehand was charged in counts nine and ten of his indictment with securities fraud in violation of 15 U.S.C. §§ 77q(a)(2) and 77x. To show a violation of 15 U.S.C. § 77q(a)(2), the government must prove: “(1) a material misrepresentation or materially misleading omission, (2) in the offer or sale of a security, (3) made with negligence.” S.E.C. v. Morgan Keegan & Co., 678 F.3d 1233, 1244 & n.12 (11th Cir. 2012) (per curiam). Section 77x provides that “[a]ny person who willfully violates any of the provisions of [§ 77x]” or “makes any untrue statement of a material fact or omits to state any material fact required to be 10 Case: 13-14089 Date Filed: 08/19/2014 Page: 11 of 13 stated therein or necessary to make the statements therein not misleading” commits a criminal offense. 15 U.S.C. § 77x. On appeal, Forehand does not present any argument to support his contention that there was insufficient evidence to uphold his convictions for securities fraud. The government established all the elements of securities fraud by presenting evidence that Forehand sold securities to investors by either intentionally or negligently making both material misrepresentations to investors, and by omitting material information relevant to the investment decision. And he did so by using facilities in interstate commerce: the mail, telephones, and the internet. Forehand made intentionally false assertions to investors that their money would be used to purchase pots and pans when he knew that he was using the money to pay off earlier investors and to pay himself. The investors relied on Forehand’s material misrepresentations to invest in securities offered by Forehand for sale. Forehand’s convictions for securities fraud are affirmed. 4. Counts Eleven through Fourteen: Money Laundering To convict a defendant of money laundering under 18 U.S.C. § 1957, the government must prove that: (1) the defendant “knowingly engage[d] or attempt[ed] to engage in a monetary transaction in criminally derived property that is of a value greater than $10,000,” and (2) the property “is derived from specified 11 Case: 13-14089 Date Filed: 08/19/2014 Page: 12 of 13 unlawful activity.” See United States v. Silvestri, 409 F.3d 1311, 1332–33 (11th Cir. 2005) (internal quotation marks omitted). Proof of fraud is necessary to support a conviction for engaging in monetary transactions in property derived from specified unlawful activity. United States v. Naranjo, 634 F.3d 1198, 1207 (11th Cir. 2011). “A scheme to defraud requires proof of a material misrepresentation, or the omission or concealment of a material fact calculated to deceive another out of money or property.” Id. (internal quotation marks omitted). “A jury may infer an intent to defraud from the defendant’s conduct.” Id. (internal quotation marks omitted). “Evidence that a defendant personally profited from a fraud may provide circumstantial evidence of an intent to participate in that fraud.” Bradley, 644 F.3d at 1239 (internal quotation marks omitted). At trial, the government presented sufficient evidence to establish that Forehand knowingly engaged in monetary transactions in criminally derived property, when, on the dates alleged in the indictment, he used funds derived from his fraud in amounts greater than $10,000, for his own personal use or for the benefit of a relative. He made material misrepresentations and omitted material facts when he pitched his scheme to investors, and he personally benefited significantly from this scheme to defraud. Accordingly, his convictions for money laundering are affirmed. AFFIRMED. 12 Case: 13-14089 Date Filed: 08/19/2014 Page: 13 of 13 13