Sunday, June 22, 2008

Summary Summary

Here are June's first two summary orders of interest.

In United States v. Heredia, No. 07-0849-cr (2d Cir. June 20, 2008), the court agreed that introducing hearsay evidence as a prior consistent statement was error, but found the error to be harmless. In addition, the court condemned some of the prosecutor's comments in summation - he compared an omission in a stipulation signed by both parties to an omission in the arresting officer's memo book. This comment "falsely" implicated defense counsel in the government's error, misrepresented the police officer's testimony, and attempted to use defense counsel as a witness. Nevertheless, this too was harmless.

In United States v. Cammacho, No. 07-2370-cr (2d Cir. June 3, 2008), the court held that the sentencing record seemed to indicate that the district court incorrectly believed that it was required to make a supervised release violation sentence consecutive. The case was remanded for clarification.

Affirm Stance

United States v. Walker, 06-0594-cr (2d Cir. June 19, 2008) (Jacobs, Leval, Cabranes, CJJ)

The evidence at Walker's drug trial included: (1) recordings of two drug-related meetings with a cooperating co-defendant in which they discussed both past and future drug activity and in which the cooperator gave Walker money to pay for a previous shipment; (2) Walker's two detailed confessions about his drug dealing activities; and (3) the testimony of four of his associates.

In addition, a DEA agent testified, and it was this testimony that was the subject of the appeal. Here, the circuit agreed that the government elicited “numerous” instances of “improper testimony” from the agent. This included: (1) highly prejudicial statements about the DEA’s investigation of Walker; (2) information the agent developed that “corroborated” Walker’s guilt, such as hearsay reports from other agents that drug customers had implicated Walker; (3) lengthy testimony that cooperating witnesses and other informants had confirmed Walker’s involvement in drug dealing, again, all of which was hearsay; (4) the agent’s unfavorable assessment of Walker’s character; (5) the agent’s vouching for the credibility of other witnesses; and, perhaps most shockingly, (6) his "personal assurance that the government’s entire case was reliable.” The agent also “several times asserted his own belief that” Walker was guilty and “made direct assertions about” Walker’s drug dealing as if the agent had witnessed the activity himself, when in fact he had not.

The circuit carefully cataloged these numerous improprieties, and rejected the government’s theory of admissibility, which was that this was all "background" testimony. Here, the testimony was not properly admitted as “background,” since there was no need for that “background” to implicate Walker directly. For example, the agent could have testified that a coconspirator explained the provenance of the drugs he was selling, without going on to explain that the coconspirator had implicated Walker. Accordingly, the portions of the "background" evidence that “prejudicially incriminated Walker” clearly violated Rule 403.

What is most shocking about this trial, however, is not the government’s dirty tactics. It is that the defense did not object to any of it. Thus, on appeal, Walker had to surmount the plain error standard. The circuit cut the defense a bit of slack - it recognized that the government “ambushed” it by carefully crafting questions that would not give advance warning that the agent's answer would contain something improper. Accordingly, the defense often “did not have a fair opportunity to object until after the jury had heard the damaging matter, when it was already difficult to limit or cure the harm.” Nevertheless, the appellate court could not get past the fact that the defense let this all happen.

In the end, the court was genuinely torn as to whether it should reverse this conviction on plain error grounds. Here, the evidence “powerfully demonstrated the defendant’s guilt” and he did not “take steps to curtail the abusive practice.” On the other hand, the court did not want to “condone or reward an abusive disregard of the rules” by the government. In the end, it affirmed, in light of the overwhelming evidence of guilt. The court could not find plain error here, although it strongly hinted that it would have reversed if the testimony had been objected to.

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Feckless Enganderment

United States v. Legros, No. 05-2828-cr (2d Cir. June 17, 2008) (Jacobs, Calabresi, Sack, CJJ)

When police officers responded to a “shots fired” radio call, they encountered three men. One of them, Legros, ran off, and tossed a gun along the way. That gun matched several spent shell casings recovered from the scene. A jury convicted Legros of being a felon in possession of a firearm.

At sentencing, he received the statutory maximum, 120 months; this was a guideline sentence - the range was 110 to 137 - that included a four-level enhancement for possessing the gun in connection with another felony offense. The theory advanced by the probation department (obviously just serving as a mouthpiece for the government) was that Legros had been shooting at someone named Christopher Passius, in a gang-related retaliation.

Legros contested the enhancement and, at a sentencing hearing, the government introduced, through a police officer, the hearsay statement of a witness who said he had seen Legros fire the gun. The statement indicated that there was a “crisis between Chris [Passius] and Herb [Legros]” and that “Herb was firing in the air.”

Based on this, the district court decided that Legros had either committed felony “reckless endangerment” or “aggravated assault.” The circuit, however, held that the court’s findings could not support either conclusion.

Under New York state law, the only felony involving reckless endangerment requires “circumstances evincing a deprived indifference to human life” along with reckless conduct “which creates a grave risk of death to another person.” Accordingly, the district court was required to find both that Legros created a “grave risk of death” and that he acted with a “depraved indifference to human life.” But here, the district court made no mention of either of these elements, and relied instead only on the fact that Legros fired a gun in the air in “a neighborhood.”

The circuit agreed with these, as findings of fact, but held that they could not, “standing alone,” support a finding of felony reckless endangerment. Absent a “further explanation from the district court,” its application of the enhancement based on felony reckless endangerment could not be affirmed.

Nor did the district court’s findings support its alternative holding - that Legros committed felony “aggravated assault.” There is no such crime in New York, although Legros might have committed attempted assault in the first degree, a felony, if he in fact fired shots at Passius. Here, however, as with the reckless endangerment, the district court “did not mention the essential elements of the offense or identify facts in the record that satisfied them.” Firing a gun “in the air” cannot support a finding of attempted first-degree assault. Moreover, although the police found a bullet from Legros’ gun found in a car parked nearby, there was no evidence that Passius, or anyone else, was in or near the car when the gun was discharged.


Shipping Bricks

United States v. Bermudez, No. 06-5119-cr (2d Cir. June 17, 2008) (Walker, Calabresi, CJJ, Underhill, DJ)

Richie Bermudez was convicted, after a jury trial, of being a felon in possession of a firearm. On appeal, he challenged an evidentiary ruling, as well as the district court’s jury selection method.

The Evidentiary Ruling

Police officers were watching Bermudez on the street in a high-crime area of the Bronx. The officers were in an unmarked car, and three of them overheard him tell an associate that he had “fresh bricks back at his apartment.” Shortly thereafter, they saw him open the trunk of his car and give a gun to someone named Delgado, at which point both were arrested. Delgado pled guilty to gun possession, was sentenced to seventy months’ imprisonment, and did not appeal.

Bermudez went to trial, and his first jury hung. At the retrial, he introduced Delgado’s testimony from a suppression hearing, where Delgado indicated that Bermudez was not the source of the gun. Nevertheless, he was convicted, and received the same sentence, seventy months, as Delgado.

On appeal, he challenged the admission of the drug-related statements as only marginally probative, and highly prejudicial. A majority of the panel disagreed. Since the entire defense theory was that the police were lying, the majority concluded that it was “important” for the government to establish why the police had focused on Bermudez that night. “Without a reasonable explanation for singling out Bermudez, the officers’ testimony as to everything that followed could have been suspect.” In addition, the district court gave two “detailed limiting instructions” that the “jury could reasonably be expected to comply with.”

In an extremely nuanced and thoughtful opinion (of the sort not typically seen in this circuit when it comes to Rule 404(b)), Judge Underhill dissented. He viewed the drug statements as improper “bolstering evidence” and noted that the district court did not rely on credibility in admitting them. “Simply offering an alternative version of events (or here, merely anticipating that the defense will do so) does not amount to a defense attack on the credibility of government witnesses, and certainly does not justify the admission of bolstering evidence during the government’s direct examination.”

Bermudez’ drug dealing was not “relevant to any of the substantive issues in this felon-in-possession gun case.” Here, although the majority make this clear, the government had called Bermudez a drug dealer in its opening, and had all three officers to testify about the drug statement before their credibility had been attacked by the defense. To this judge at least, permitting the government to preemptively bolster its witnesses’ credibility before it had even been challenged was both improper and unprecedented.

Not only did Judge Underhill view the evidence as irrelevant, he found that its probative value was surpassed by its prejudicial potential. “In my view, the officers’ motivation for watching Bermudez was entirely irrelevant, unless and until Bermudez attacked their credibility on the ground that they were not motivated to watch him,” which he never did.

Jury Selection

Bermudez also challenged the so-called “blind strike” method of jury selection, under which the parties simultaneously exercise their peremptory challenges, and thus do not know which jurors the other has struck. Here, since during one round, he and the government struck the same juror, he argued that he was deprived of the full use of his allotted number of challenges.

The circuit disagreed. The Supreme Court approved of this method in 1894, and there has been no intervening change in the law.

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Wednesday, June 18, 2008

Withdrawal Syptoms

Today the court withdrew the opinion in Nnebe v. United States, No. No. 05-5713-pr (2d Cir. June 12, 2008), blogged below under the title "Role of Certs."

Monday, June 16, 2008

You Can't Get A Ten With A Gun

United States v. Whitley, No. 06-0131-cr (2d Cir. June 16, 2008) (Newman, Sack, Parker, CJJ)


Whitley used a gun to rob a grocery store; during the robbery, the gun accidentally went off. He was convicted after a jury trial of robbery, possessing the firearm as a previously convicted felon, and discharging that same firearm in connection with a crime of violence, under 18 U.S.C. § 924(c)(1)(A)(iii). Because he was an armed career criminal, the felon-in-possession count subjected him to a fifteen-year mandatory minimum sentence (18 U.S.C. § 924(e)), and the district court also sentenced him to a ten-year consecutive sentence for discharging the gun, as required by § 924(c)(1)(A)(iii). This part of the sentence was the subject of his appeal.

The Court’s Ruling

Section 924(c)(1)(A)(iii), in pertinent part, provides that “[e]xcept to the extent that a greater minimum sentence is otherwise provided by this subsection or by any other provision of law,” a person who, inter alia, discharges a firearm in connection with a crime of violence is subject to a mandatory minimum ten-year sentence, which must be consecutive to any other sentence. Whitley argued that, since he received a fifteen-year mandatory minimum on the felon-in-possession charge, the “except” clause meant that he was not subject to the ten-year consecutive § 924(c) sentence.

Going against at least four other circuits, the appellate court agreed that a “literal reading” of the “plain meaning” of the statute supported Whitley’s claim. The court acknowledged that, where an illogical result or one manifestly not intended would be produced, literal adherence to a statutory text might not be warranted. But, except for the out-of-circuit cases on this issue, all of which went the other way, the court indicated that it knew of “no decision rejecting the literal meaning of statutory language to the detriment of a criminal defendant.”

Here, the court found, the plain text of the statute clearly exempted Whitley from the § 924(c) ten-year minimum, because he received a higher, fifteen-year mandatory minimum sentence on the felon-in-possession count.

The court also rejected the government’s arguments that the “design” of the statute, or its purpose, would be frustrated if it applied the statutory text literally. The court noted that its holding was not at all inconsistent with Congress’ purpose in enacting § 924(c). Rather, it concluded that in § 924(c), Congress “provided a series of increased minimum sentences and also ... made a reasoned judgment that where a defendant is exposed to two minimum sentences ... only the higher minimum should apply.” In fact, the court concluded that “such a sentencing pattern seems eminently sound.”

Finally, the court noted that its holding is particularly warranted because the higher mandatory minimum that exempted Whitley from the ten-year § 924(c) minimum was also for a firearms offense. It observed that most of the courts that have rejected this reading of the “except” clause did so where the defendant was subject to a narcotics mandatory minimum, but indicated that it the clause would apply where the other mandatory minimum sentence was for a gun charge.


This decision, although it probably reaches the right result, raises several vexing questions.

1. What About “to the extent”?

The main problem here has to do with the court’s supposedly “literal” reading of the statute. In fact, the court did not read the statute “literally” at all. What the statute actually says is that the § 924(c) minimums apply “except to the extent that a greater minimum” sentence is applicable to the defendant. Here, the circuit ignored the phrase “to the extent that” and replace it with something like “in a case where.”

But the phrase “to the extent that” must mean something. Although it is not very clear, perhaps what Congress was trying to do was prescribe that the minimum sentence ordinarily mandated by § 924(c) be reduced by the “extent” to which another minimum sentence exceeds it. Thus, for example, here, where Whitley was subject to a fifteen-year mandatory minimum on another count, five years - the “extent that” this exceeded his ten-year § 924(c) minimum - should be deducted from the § 924(c) sentence, leaving him with a five-year mandatory (and consecutive) sentence on the § 924(c) count. While this reading is not perfect (in some cases this method would result in a negative number on the § 924(c) count, which would then have to be treated as a zero), and would certainly not be in Whitley’s interest, it seems to be closer to what Congress actually wrote.

2. What About the Rule of Lenity?

A better way to have decided this case, rather than relying on a “literal” reading that is not literal at all, would have been under the rule of lenity. It really is quite difficult to figure out the meaning of this statute. In fact, there are now at least three different interpretations of the statute spread among four or five circuits. Given this, it would have been much better for the circuit to call the statute ambiguous, which it is, and give Whitley the benefit of the doubt under the rule of lenity.

3. What About Drug Cases?

The most frustrating thing about this case is that it refuses to say with any clarity whether this same “literal” reading would apply in the much more common situation where the defendant faces a mandatory minimum sentence for a drug count that is longer than his § 924(c) mandatory minimum.

The decision seems to be pulling in two different directions on this. First, it suggests that limiting the “except” clause to cases where the other mandatory minimum is for a firearms offense might address some of the supposed anomalies that the government pointed out, and also notes that two other circuits have read the statute this way.

But it also requires a “literal” reading of the “except” clause, which waives the § 924(c) sentence where a higher minimum is provided “by any other provision of law.” This "literal" reading would seem to mean that there cannot be a “firearms only” limitation.

The court should have done a better job of explaining itself. Now it is going to have to decide another one these cases.

4. So What Is the Penalty for § 924(c) When the “Except” Clause Applies?

Finally, this case presents one last conundrum. Taken at face value, it holds that, in cases where the “except” clause applies, a conviction under § 924(c) has no penalty. The opinion clearly states that taking the “except” clause literally does not merely excuse the consecutive nature of § 924(c) sentences - it excuses the entire penalty: “If the ‘except’ clause is read literally, those less-than-fifteen year minimum punishments would not be imposed at all.”

It seems odd that there could be a criminal conviction - and a serious one, at that - for which there is no authorized penalty at all. It also bears noting that, under this decision, there is no guideline recommendation for such offenses either, since under the guidelines the sentence for a § 924(c) violation is whatever the statute requires.

The court’s solution to this is to suggest that the sentencing judge can simply increase the sentence on other counts. This seems like an odd solution, since it is hard to see how this would be consistent with § 3553(a).


Sunday, June 15, 2008

Out of Hindsight

Parisi v. United States, No. 06-1148-pr (2d Cir. June 13, 2008) (Winter, Hall, CJJ, Oberdorfer, DJ)

In this 2255 appeal, the defendant unsuccessfully argued that his counsel was constitutionally ineffective for failing to move for dismissal based on a Speedy Trial Act violation.


In 2001, Parisi was charged, in a complaint, with child pornography-related offenses. Although, under the Speedy Trial Act, the government had thirty days within which to indict him, the indictment was not filed until nearly 200 days later. During that period, counsel executed three “stipulations” seeking sixty-day continuances for plea negotiations. Each stipulation agreed that the ends of justice to be served by the delay would outweigh defendant’s and the public’s right to a speedy trial. The district court “so ordered” each stipulation.

In 2003, Parisi pled guilty under a plea agreement that included an appellate waiver, and received a 150-month sentence. He later filed a 2255 motion arguing that his attorney was ineffective in failing to make a speedy trial claim based on the delay between the complaint and indictment. While the 2255 matters were pending, the Supreme Court decided Zedner v. United States, 547 U.S. 489 (2006), under which the “so ordered” ends of justice findings were almost certainly invalid.

The Court’s Resolution of the Motion

The court first had to consider whether the claim was waived by the plea agreement. While a straightforward speedy trial claim would be waived, here the ineffectiveness claim was not. The court construed it as a claim that counsel "was ineffective in advising [Parisi] to accept the plea agreement rather than advising him to move to dismiss the indictment with prejudice based on alleged Speedy Trial Act violations." This survived the guilty plea and the appeal waiver because, "by focusing on the advice Parisi received from his attorney, it connects the alleged ineffectiveness of Parisi’s attorney with the voluntary nature of his plea."

Nevertheless, the court found no Sixth Amendment violation. It agreed that Zedner “serves as a reminder that the district court has an obligation independently to determine whether a continuance serves the ends of justice,” and that there was a “strong argument” that such an independent determination did not occur here, particularly since, under Zedner, the mere agreement to the continuance
by the parties does not satisfy the Act.

Nevertheless, there was no ineffectiveness. Counsel did not act unreasonably in failing to anticipate Zedner, which was decided some five years later. Even today, if the circuit were to hold that the stipulations did not have the effect of stopping the speedy trial clock, it would be “articulating law on a previously unaddressed question.”

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Recuse Me

United States v. Hasarafally, No. 06-4239-cr (2d Cir. June 12, 2008) (Cardamone, Sotomayor, Raggi, CJJ)

The defendant moved in the circuit to disqualify the entire justice department from representing the government on this appeal, because the judgment under review was rendered by Judge Mukasey, who is now Attorney General.

The court denied the motion. It began by noting that there was “very little precedent” on the “potential conflict of interest created by the transition from judge to prosecutor.” The court surveyed a few possible areas of conflict, but skipped the most obvious one: A prosecutor will be unlikely to confess error on appeal if he was the trial judge in the case.

In any event, here there is no possibility for conflict because, the government advises, the attorney general has recused himself “from all matters in which he participated as a United States District Judge.” Thus, he will play no role in this appeal, and in the unlikely event that supervision at the level of the Attorney General’s office becomes necessary, someone else will do it.

This screening process is adequate, particularly given the enormous burden on the government and the public in disqualifying the entire department of justice.


Role of Certs

This pair of decisions, both arising from 2255 motions, gives helpful guidance on counsel’s obligations to file a petition for a writ of certiorari.

In Pena v. United States, No. 06-0218-pr (2d Cir. June 12, 2008) (Jacobs, Parker, Wesley, CJJ)(per curiam), the court held that a retained attorney was not ineffective for failing to advise his client of the right to seek certiorari. While the Sixth Amendment right to counsel covers a first-tier appeal, there is no constitutional right to counsel beyond that. Seeking certiorari is the first step in the non-Sixth Amendment discretionary appeal, and not the last step in the first-tier appeal. Accordingly, Pena’s counsel was not ineffective in failing to inform him of his right to seek certiorari.

The court noted that the Criminal Justice Act imposes greater obligations on appointed counsel. But since Pena’s counsel was retained, that statute did not apply. That said, the court advised that “as a matter of sound professional practice, retained counsel representing federal criminal defendants” in the Second Circuit “should, like their [appointed] counterparts, inform their clients of the availability of, and the process for, pursuing certiorari review and assist them with filing appropriate certiorari petitions, if retained to do so.”

In Nnebe v. United States, No. 05-5713-pr (2d Cir. June 12, 2008), the same panel, this time in a decision authored by Judge Parker, considered the same issue in a case where counsel was appointed.

After Nnebe’s conviction was affirmed by the circuit, appointed counsel wrote to him and explained that the next step was to seek certiorari. Counsel enclosed a draft cert petition and a form motion for IFP status. Nnebe returned the IRP motion, but counsel did not respond and, without telling his client, never filed the cert petition. Nnebe ultimately sought 2255 relief.

The circuit held that Nnebe’s counsel violated the Criminal Justice Act, which sets out appointed counsel’s duties with respect to cert petitions. The difficulty here was Nnebe had sought relief under § 2255. But there was no constitutional violation, and the “complete miscarriage of justice” exception for non-constitutional errors did not apply because Nnebe could not show prejudice. His cert petition would “almost certainly” have been denied.

Taking its cue from Wilkins v. United States, 441 U.S. 468 (1979), the court construed Nnebe’s appeal as a “motion to recall the mandate and vacate [its] judgment so that a new one can be entered,” which it granted. This will give Nnebe a chance to file a timely cert petition. Given its “construction” of the appeal, the court indicated that it would be “illogical” to continue treating the case as if based on a § 2255 motion, thus Nnebe was relieved of the need to show prejudice.

The court’s final word was a reminder that “recalling a mandate is an unusual remedy intended for extraordinary circumstances.” But this case was extraordinary. The defendant acted with diligence and “proffered compelling documentary evidence” in support of his claim.

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Hollywood Accounting

United States v. Leonard, No. 05-5523-cr (2d Cir. June 11, 2008) (Kearse, Calabresi, Katzmann, CJJ)

In this case, the court concludes that interests in film production companies were “investment contracts,” and hence securities, under federal securities law. It also holds, however, that the district court erred in treating the entire cost of the securities as the loss amount under the guidelines.


The defendants ran sales offices that peddled interests in LLC’s formed to finance the production and distribution of motion pictures. Potential investors were solicited over the phone and, if they expressed an interest, would be sent offering materials, including brochures, operating agreements, and other such documents. Investors could purchase $10,000 “units” by completing and mailing back a subscription agreement.

The defendants’ sales offices would receive a commission of around 45% for each unit sold. This was the fraud - although the offering materials indicated that a commission would be paid, they did not accurately disclose the size. Read generously to the defendants, they seemed to indicate that no more than 20% of the unit price would go toward sales commissions.

The Sufficiency of the Evidence

The defendants’ first claim was that there was insufficient evidence that the investment units were “securities.” The definition of “security” covers many types of instruments. Here, the specific question was whether the units were “investment contracts.” An investment contract is one where the investor “is led to expect profits solely from the efforts of the promoter or a third party.” Here, the defendants argued that the investors were supposed to help manage the LLC’s, and hence never expected to profit “solely” from the efforts of others.

There is a difference between companies that seek “passive investors,” which fall under the securities laws, and those in which there is a reasonable expectation of significant investor control, which do not. But here, this distinction was complicated by the fact that the investment units were shares in LLC’s. According to the circuit, LLC’s, due to their hybrid nature, require a case-by-case analysis of the “economic realities” of the underlying transaction.

Here, the organizational documents describe an investment that, on its face, was not a security. Those documents were intended to create the impression that subscribers would play an active role in the management of the companies. In reality, however, the members of the LLC’s “played an extremely passive role in the management and operation of the companies.” They voted rarely, and only a small number of them served on any committees. Thus, according to the circuit, “the vast majority of investors in both companies did not actively participate in the venture, exercising almost no control.” For example, the trial evidence showed that the managerial rights mentioned in the subscription documents were illusory, because others made almost every significant decision about the making of the films before the fundraising was even complete. Moreover, the investors themselves had no experience in film production, and played no role in shaping the organizational agreements themselves, casting further doubt as to whether the members were truly expected to have significant control over the enterprise.

And that was enough for the jury to properly conclude, considering “substance over form,” that, “from the start,” there was no reasonable exception of investor control.

The Loss Calculation

At sentencing, the district court held the defendants accountable under for the entire cost of the securities they sold, on the theory that the investors would not have participated if they knew the true size of the sales commissions. The circuit deferred to the district court’s finding about the investors’ decision to participate, but held that this did not “in and of itself” mean that the securities they received were “entirely without value.”

Since the investors actually obtained an interest in a company engaged in producing and distributing a motion picture, the district court should have deducted from the purchase price the actual value of the instruments. The court notes that these were “illiquid securities for which there is no public market,” and thus that it will be quite difficult to value them. Nevertheless, the district court must make a “reasonable estimate” of this figure.

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Saturday, June 14, 2008

Allocution Lessons

United States v. Gonzalez, No. 07-4824-cr (2d Cir. June 11, 2008) (Newman, Walker, Pooler, CJJ)

In this case, the circuit sets out the procedure that a district court should follow when it realizes that it has sentenced a defendant without first giving him an opportunity to allocute. It also criticizes the imposition of the statutory maximum sentence.

1. Facts

Gonzalez admitted that he violated his supervised release by possessing marijuana. At a sentencing hearing, Judge Conti, visiting from the Northern District of California, heard from the probation officer, who reported that Gonzalez was released from prison in November of 2006. He was sent from there to immigration custody, and released by immigration about two weeks later. Although the officer sent him three notices, Gonzalez never reported to probation. The officer later learned that Gonzalez had been convicted of two petty offenses after his release.

With respect to the failure to appear, defense counsel explained that, after his release, Gonzalez reported to an immigration officer, but did not report to probation because he did not understand that he was supposed to report to two separate agencies. Judge Conti, who did not comment on this explanation, sentenced Gonzalez to the statutory maximum - twenty-four months - without giving Gonzalez an opportunity to speak, and without advising him of his right to appeal.

Later that day, the judge re-called the case and advised Gonzalez of his right to appeal. When it was pointed out that the judge also forgot to allocute Gonzalez before sentencing, Judge Conti told him: “[Y]ou have the right to say anything to the Court you want to and it may very well be that there are occasions when the Court changes its mind.” Gonzalez told the court that he had a substance abuse problem, and the judge recommended treatment “during [his] incarceration.”

2. The Lack of an Allocution

The court of appeals held that Judge Conti’s method of dealing with the lack of a presentence allocution rendered the sentence procedurally unreasonable. “The appropriate response to an omission of presentence allocution implicates due regard for the appearance of fairness.” Thus, the “preferable course” for remedying such a denial is for the district judge “to vacate the sentence, accord the right of allocution, and sentence anew.” Since this procedure did not occur here, the correct remedy was to vacate the sentence and order a new sentencing in conformity with Rules 32 and 32.1.

The court established this procedure in the exercise of it supervisory powers to oversee the administration of justice within federal courts. In doing so, it also noted that the noncompliance with the allocution right here was not harmless error.

3. Substantive Reasonableness

Judge Conti’s reasons for maxing Gonzalez were both brief and bizarre. He said that (1) neither Gonzalez nor society would benefit from his being supervised by the probation department, (2) supervision had done Gonzalez no good - even though Gonzalez had never been actively supervised - and (3) Gonzalez knew what he was doing - even though counsel had just explained to the judge that Gonzalez was confused as to his reporting requirements.

The appellate court strongly suggested that, on the existing record, the twenty-four month sentence, which was more than twice the ten-month guideline maximum, was unreasonable. But since it was remanding anyway, it just noted that the “brevity of the reasons” for the sentence “hampered” appellate review of its length.

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The Loan Arranger

United States v. Confredo, No. 06-3201-cr (2d Cir. June 10, 2008) (Newman, Winter, Parker, CJJ)

This case takes on the difficult question of fixing the loss amount under the sentencing guidelines when the case involves fraudulently obtained that loans have been partially repaid. It also addresses an interesting Apprendi claim.

1. The Loss Amount

Defendant Confredo and his associates coordinated the submission of more than 200 fraudulent loan applications to New York banks. The borrowers were small businesses, which paid Confredo a fee, and knew that the applications were false, in most instances because the businesses were not credit worthy. Most of the applications were cosigned by second parties with good credit, but none were secured by real collateral. In total, more than $24 million was sought, and more than $12 million was actually lent, mostly from Citibank.

At sentencing, the probation department recommended that the full $24 million be treated as intended loss under the guidelines, although the available evidence suggested that the banks had actually lost significantly less than that, because some of the $12 million in loans had been repaid. When Confredo was originally sentenced, in 1997, the district court used the $24 million figure, rejecting Confredo’s argument that the guidelines should be based on the actual loss, which he conceded was between $10 million and $20 million.

He won his first appeal, which included an unpreserved claim that the loss amount was incorrect. Because the government had conceded on other issues, the court directed that the district court revisit loss amount on remand.

At resentencing, the government urged the district court to stick to its original ruling. Confredo argued that the intended loss was less than $20 million because he expected that (1) the banks would reject some of the applications and (2) some of his customers would repay their loans, at least in part. The district court sided with the government, but the circuit disagreed.

The court first dealt with the “uncertainty” as to whether the district court’s loss calculation was a fact-finding, reviewed only for clear error, or an interpretation of the guidelines, which would be reviewed de novo. Here, the court treated the ruling here a legal question - as a matter of law, does the presenter of loan applications intend a loss equal to the aggregate amount of the loans when the presenter is not the borrower?

Then the court then surveyed the law on this point. Until 1991, it had held that the proper measure of intended loss was always the value of the loan obtained or sought, even if the defendant intended to repay it. A 1991 guideline amendment, however, permitted greater flexibility on this issue, giving a defendant credit for actions - such as loan repayments or assets pledged to secure the loan - that might reduce the intended loss amount.

The court viewed Confredo’s case as more difficult, however, because he was not the borrower himself, and no assets had been pledged to secure the loans. Nevertheless, the court concluded that the 1991 amendment means that a defendant “should have an opportunity to persuade the sentencing judge that the loss he intended was less than the face amount of the loans.” The court remanded the case for this purpose, directing that the district court “determine the extent, if any, to which Confredo has proven a subjective intent to cause a loss of less than the aggregate amount of the loans.”

2. The Apprendi Issue

Confredo also received to a 3-level enhancement for committing some of the offenses to which he had pled guilty while on bail for others. He argued that this enhancement violated his right to a jury trial, under Apprendi. Interestingly, the court held that Apprendi does apply in this situation because, even though Confredo did not receive a sentence above the unenhanced statutory maximum, the enhancement “expose[d him] to the risk of a sentence that exceed[ed] the statutory maximum.” But the court also held that Apprendi’s jury fact-finding requirement was not violated, because Confredo “sufficiently” admitted that he committed offenses while on release, by admitting to conduct that “the public record indisputably establishe[d]” had occurred after his release on bail.

The court also recognized that there was a second Apprendi violation here - the absence from the indictment of an allegation that Confredo committed the offenses while on release. But it held that such an omission is harmless error “where the evidence is overwhelming that the grand jury would have found the fact at issue.”

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Breach Blanket Bingo

United States v. Bell, No. 07-0715-cr (2d Cir. June 10, 2008) (Jacobs, Calabresi, Sack, CJJ) (per curiam)

In this case, the circuit had to sift through competing claims as to which party breached the plea agreement.

Defendants Brumer and Klein pled guilty to various offenses relating to healthcare fraud. Their agreements with the government stipulated to a loss amount, and specified that neither party would seek a departure or adjustment other than those contained in the agreement. Based on the proof at a related trial, however, the government offered to amend the agreement and reduce the loss amount. The defendants rejected this offer, and instead sought a Fatico hearing, after which the court held them accountable for a significantly lower loss amount. In exchange, the government sought adjustments for mass marketing and vulnerable victims that were not part of the plea agreement.

So who breached first? The defendants. According to the court of appeals, the government’s original offer to reduce the loss amount, which would have benefited the defendants, was not a material breach. Rather, the defendants breached the agreement by seeking a Fatico hearing and putting the government to its proof, causing it to lose the benefit of its bargain. Accordingly, since the defendants breached first, the government was entitled to treat the agreements as unenforceable and to seek the additional sentencing enhancements.

This decision also contains an interesting discussion of some issues relating to the increasingly common practice of having of magistrate judges preside over felony guilty plea allocutions. First, the court held that defendants do not have the right to be present when the district judge reviews the transcript of the allocutions and signs an order accepting the plea. The court also held that the provisions of 28 U.S.C. § 636(b)(1) and (b)(1)(C), which require the filing of proposed findings and recommendations of the court, do not apply to Rule 11 proceedings.

Finally, the court rejected Klein’s argument that he was denied his Sixth Amendment right to the counsel of his choice when the district court refused to allow him to substitute retained counsel. The request came six years after the indictment and four years after the guilty pleas, and would have meant replacing Klein’s sixth attorney with a seventh. Under the circumstances, the court’s refusal to allow the change was not an abuse of discretion.

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Friday, June 06, 2008


United States v. Todd, No. 05-5525-cr (2d Cir. June 5, 2008) (per curiam)

In this “reverse-Batson” decision, the court upheld the district court’s decision to re-seat a white juror against whom the defendants, all members of minority groups, had exercised a peremptory challenge. The court found no clear error in the district court’s conclusion that the challenge was based on the juror’s race.

Specifically, the circuit agreed that the defendants' concern that the brother of the juror’s fiancé was a police officer was unjustified because (1) the juror said that this would not affect her and (2) the defense had accepted a Latino juror whose brother was a retired undercover officer. The court also rejected the defendants’ claim that the juror’s residence in Westchester County was a basis for the challenge. That juror lived in Yonkers, which the defense conceded was “more like the Bronx than Westchester” and, in any event, the defendants had seated two Latinos from Westchester. As for the defendants’ concern that the juror was “sheltered” because she still lived with her parents, the circuit accepted the district court’s observation that he juror did not seem so. Finally, the defendants’ argument that the juror was a school teacher in the Bronx was properly deemed incredible; the defendants seated an African American who was a retired Bronx school teacher.

Notably, the defendants also argued on appeal that “a black criminal defendant should not be subject to a Batson challenge” for striking white jurors because “the potential social harms identified in ‘race-related’ cases involving racial minorities ... are not implicated.” The court rejected this argument, noting that the discriminatory use of a peremptory challenge violates the equal protection right of the challenged juror, and thus the harm is the same in both Batson and reverse-Batson cases.

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Wednesday, June 04, 2008

Summary Summary

This crop of summary orders of interest closes out May 2008.

In United States v. McCargo, No. 07-0626-cr (2d Cir. May 30, 2008), the defendant escaped from a halfway house, then months later was found to be in possession of a firearm. The court held that the gun possession was properly deemed "in connection with" the escape - triggering a four-level enhancement - because escape is a continuing offense and the defendant admitted that he acquired the gun for "protection."

In United States v. Rosario, No. 06-5655-cr (2d Cir. May 30, 2008), the court extended the Regalado remand procedure for crack cocaine cases to a case where the offense level was based on a combination of crack and heroin.

In United States v. Konstantin, No. 07-0033-cr (2d Cir. May 29, 2008), the court held that (1) the district court did not violate the defendant's constitutional right to his choice of counsel by denying a change of counsel one week before trial, and (2) the district court might have misunderstood its authority to correct errors in the Judgment under Fed.R.Cr.P. 36 when it denied the defendant's Rule 36 motion that pointed out an error in the designation recommendation.

In United States v. Garcia, No. 06-2879-cr (2d Cir. May 29, 2008), the court held that a defendant's failure to object to the mandatory life sentence triggered by the filing of two prior felony informations under 21 U.S.C. §§ 841(b)(1)(A) and 851 was not plain error -- even though there was a "substantial question of whether a defendant's failure to prove the affirmative defense of withdrawal may satisfy the government's burden to demonstrate that the defendant engaged in criminal activity subsequent to a prior conviction" -- because the defendant received life sentences on other counts. Emphasis in original.

Pimentel Loaf

United States v. Habbas, No. 05-6142-cr (2d Cir. May 30, 2008) (Leval, Sack, CJJ, Garaufis, DJ)

This confusing opinion attempts to sort through the defendant’s claim that the government breached a plea agreement. But because of the imprecise way it is written, it is hard to know what really happened.

Defendant Rahman pled guilty to obstruction of justice in connection with his effort to frame someone named Abdel-Wahed by falsely reporting that Abdel-Wahed had assaulted a third person, who had testified against one of Rahman’s associates. Rahman pled guilty and was sentenced to eight years in prison.

On appeal, he argued that the government violated the plea agreement by advocating for guidelines higher than those contained in the agreement. Specifically, the government agreed with the probation department’s assessment that Rahman merited a four-level role enhancement, even though the agreement did not contain that adjustment. In rejecting this claim, the appellate court characterized the guidelines calculations in the plea agreement as a “Pimentel estimate,” referring to United States v. Pimentel, 932 F.2d 1029, 1034 (2d Cir. 1991), the very early guidelines case in which the court suggested that the government provide defendants with an estimate of the likely guideline range, to ensure that the defendant’s choice to plead guilty was intelligently made.

The decision turned on several factors. First, according to the court, plea the agreement “clearly stated” that the guideline range was a non-binding estimate, and warned that the government might advocate for a higher sentence. Moreover, there was no evidence that the government acted in bad faith or changed its position so dramatically that it would raise doubts as to whether the defendant understood the risks involved in pleading guilty. Rather, it appears that, in the rush to put together the plea agreement, the government simply forgot about the role adjustment. Finally, here, the defendant was not prejudiced by the government’s change of position, since the district judge imposed a sentence far longer than even the enhanced range, and, according to the circuit, in doing so expressly indicated that the guideline dispute was “academic.”


This is a bizarre opinion, because it turns on a close reading of the plea agreement, without reproducing the language of the agreement itself, if that is in fact what it was. It is hard to know, because the opinion also uses confusing terminology. In some districts in this circuit, a Pimentel letter is a non-binding informational letter from the government containing a guidelines estimate that is not a plea agreement at all. Here, it is hard to know whether the court is in fact analyzing a claim about a Pimentel letter, or one about a plea agreement that contained a non-binding guidelines estimate, but other binding provisions. The confusion is even more pronounced because the court distinguishes this case from United States v. Palladino, 347 F.3d 29 (2d Cir. 2003), a seemingly identical case that went the other way but that never mentioned Pimentel at all.

In the future, it would be better if the court did not discuss plea agreements under the Pimentel rubric, since most practitioners associate Pimentel estimates with non-binding letters that are not agreements at all.

The opinion is also confusing because it at one juncture indicates that the “dispute” over the role enhancement was made moot by the district court’s findings, then at a later juncture indicates that Rahman’s counsel did not object to the four-level adjustment that is the subject of the appeal. It is hard to see how both can be true.