United States v. Bollin

Rule of Law:

Pursuant to the Supremacy Clause, federal criminal forfeiture law supersedes conflicting state laws that provide protections for certain assets, such as the garnishment exemption for funds held in an Individual Retirement Account (IRA).

Facts:

• In mid-1995, Stephen Oles and David Raimer began offering fraudulent 'prime bank' investment programs under the name 'Exodus International,' promising investors exceptionally high returns with no risk.
• Attorney James Gormley advised Oles, Raimer, and others, helping to establish offshore trusts and corporations in the Turks and Caicos Islands to shield income and conceal the movement of funds.
• Gary Bollin became a 'broker' for the scheme after Gormley endorsed the Exodus program. Bollin then introduced Roger Damron to the scheme, and Gormley advised Damron on setting up foreign trusts to facilitate the investments.
• In July 1995, Damron convinced investors Dr. Ralph and Rita Touma to provide $750,000, from which Damron placed $400,000 into an escrow account and secretly paid Bollin a $75,000 commission.
• In September 1995, the Toumas' $400,000 was wired through a series of offshore accounts, including trusts belonging to Bollin and Damron that Gormley had established, ultimately reaching an account controlled by Oles and Raimer.
• The scheme expanded to include a 'second deal' involving 'trader' Ernst Tietjen, who used entities associated with his church to create fraudulent financial documents and receive investor funds.
• After the promised payments failed to materialize and investors began questioning the scheme, Bollin and Gormley repeatedly reassured them that payments were merely delayed but forthcoming.
• Following an FBI investigation into Damron, Gormley assisted in a cover-up, which included creating backdated 'loan' paperwork to disguise a fund transfer and advising on how to structure repayments to certain investors to avoid detection, later giving false testimony about these repayments in court.

Procedural Posture:

• Gary Bollin, Ernst Tietjen, and James Gormley were charged in a multi-count indictment in the U.S. District Court for the Southern District of West Virginia for their roles in an investment fraud scheme.
• Following a jury trial, Bollin, Tietjen, and Gormley were convicted on all counts submitted to the jury, including conspiracy, wire fraud, money laundering, and perjury.
• The jury also returned a $1.2 million forfeiture verdict, for which the defendants were held jointly and severally liable.
• The district court denied the defendants' post-trial motions for judgment of acquittal and/or a new trial.
• The district court sentenced each defendant to terms of imprisonment, supervised release, and restitution.
• Post-conviction, the district court entered a restraining order over Gormley's assets and denied his motion to spend $80,000 from his Individual Retirement Account (IRA) to retain appellate counsel.
• Bollin, Tietjen, and Gormley (appellants) appealed their convictions, sentences, and the IRA ruling to the U.S. Court of Appeals for the Fourth Circuit.