Sunday, November 29, 2009

SAMs Club

United States v. Stewart, No. 06-5015 (2d Cir. November 17, 2009) (Walker, Calabresi, Sack, CJJ)

This 191-page opinion - three opinions, actually - deals with the aftermath of the Lynne Stewart trial. The defendants appealed their convictions - without success - while the government appealed the sentences. The court found procedural error with respect to Stewart’s sentence and remanded the case for resentencing.

Background

Beginning in the mid-1990's, Stewart represented Sheikh Omar Ahmad Abdel Rahman, who was convicted of several terrorism offenses - including the 1993 World Trade Center bombing conspiracy - and sentenced to life in prison. Although based in New York, Rahman was the spiritual leader of the Islamic Group, a terrorist organization that was responsible for acts of violence in Egypt.

In 1997, the Bureau of Prisons imposed restrictive Special Administrative Measures (“SAMs”) on Rahman to prevent him from soliciting acts of violence from prison. The SAMs were intended to severely restrict Rahman’s ability to contact outsiders and to receive or transmit communications. In order to maintain contact with her client, Stewart was required to - and did - execute several versions of the SAMs between 1998 and May of 2001. In doing so, she affirmed that she would abide by their restrictions and would not use her meetings with Rahman to pass messages between Rahman and third parties, including the media.

Nevertheless, Stewart, with the assistance of Mohammed Yousry, a translator, and Ahmed Abdel Sattar, a paralegal who had worked on the trial, repeatedly violated the SAMs.

In 1997, the Islamic Group declared a unilateral “cease-fire” in Egypt. Beginning in early 1998 Sattar - who had remained in contact with the Islamic Group - would deliver messages concerning the cease-fire to Stewart and Youssry, who would bring the messages to Rahman in prison. In an elaborate effort to trick the guards who were observing these visits, Yousry would read the messages to Rahman and take down his responses, while they pretended to discuss other matters. When Rahman began to question the effectiveness of the cease-fire, Stewart and Yousry smuggled his position out of the prison and passed it on to Sattar, who communicated it to his associates in Egypt.

As time wore on, Rahman - through more smuggled communications - officially repudiated the cease-fire. In May of 2000, Stewart and Sattar spoke to a reporter based in Cairo and Stewart announced that Rahman had withdrawn his support for the cease-fire; a few days later, after a telephone conversation with Rahman, Stewart contacted the reporter again and confirmed that her previous statement was correct. Stewart’s and Youssry’s surreptitious passing of messages to and from Rahman continued until June of 2001.

The three defendants were indicted in 2002, a superseding indictment was filed in later 2003, and, in February of 2005, a jury convicted them of conspiracy to defraud the United States by violating the SAMs. Sattar was also convicted of conspiring to murder persons in a foreign country and of soliciting crimes of violence. Stewart and Yousry were convicted of providing and concealing material support to Sattar’s murder conspiracy and of conspiring to do so, and Stewart was convicted of two counts of making false statements.

The district court sentenced Stewart to 28 months’ imprisonment, Youssry to 20 months, and Sattar to 288 months.

The Defendants’ Appeal

The defendants raised a host of challenges to their convictions. Only two are summarized here.

1. The Material Support Count

The original indictment charged the defendants with violating 18 U.S.C. § 2339B, which at the time made it a crime to “knowingly provide material support or resources to a foreign terrorist organization” or to attempt or conspire to do so. After the district court found that the statute was unconstitutionally vague and dismissed that count, the government superseded and charged them with violating 18 U.S.C. § 2339A, a similar statute that, unlike § 2339B required the government to prove that a defendant knew or intended that the material support would be used to commit specific crimes of violence. Here, the government alleged that the defendants provided material support or resources - specifically “personnel,” in the form of Rahman himself - to the murder conspiracy knowing or intending that Rahman would help commit the crimes.

Amongst other claims, Stewart and Yousry argued that the evidence was insufficient to support a finding that they provided “personnel” to the conspiracy. The circuit disagreed. The trial evidence supported a reasonable inference that they helped Rahman participate covertly in the conspiracy to engage in violence abroad by communicating to his supporters news of his repudiation of the cease-fire. Nor was it true that the defendants were prosecuted for Rahman’s “pure speech.” The jury reasonably found that, since Rahman was the Islamic Group’s spiritual leader, his messages were a “call to arms” intended to sway the group’s members to commit criminal acts of violence.

2. The False Statements Counts

Stewart challenged her convictions under 18 U.S.C. § 1001, characterizing her disregard of the SAMS as a “broken promise,” and not a false statement.

The court disagreed. The jury was “entitled to conclude” that when Stewart executed the SAMs she affirmed that she had the intention of conforming to their strictures, but that her assertions about her intent were knowingly and willfully false when she made them.

The Sentencing Appeals

For each defendant, the district court imposed a sentence far below that recommended by the Sentencing Guidelines. The government challenged all of them as procedurally and substantively unreasonable. The panel unanimously affirmed Sattar’s and Youssry’s sentences. As for Stewart, although it unanimously agreed that the sentence was the product of procedural error and thus should be vacated, the panel was deeply divided over the precise nature and extent of the error.

1. Sattar

For Sattar, the Guidelines recommended life. Due in very large part to the applicability of the terrorism enhancement, § 3A1.4, his offense level was 43 and he was in criminal history category VI. Under 18 U.S.C. § 3553(a), however, the district court imposed a 24-year sentence instead.

The circuit found no procedural error in the district court’s findings that: (1) the terrorism enhancement did not account for the fact that no injury actually occurred in this case; (2) the terrorism enhancement placed Sattar in criminal history category VI even though he had no criminal history points, thus overstating both his past conduct and likelihood of recidivism; and (3) his “extremely restrictive conditions of [pretrial] confinement” and the likelihood that they would continue were a mitigating factor.

With respect to this last consideration, the court noted that it was “not unreasonable for the district court to conclude that the severity of the conditions of confinement would increase the severity of the punishment and the amount of deterrence associated with a given term of imprisonment in light of the particular conditions of confinement under which Sattar is incarcerated.”

2. Yousry

For Yousry, the district court concluded that the terrorism enhancement did not apply, and thus that his sentencing range was 78 to 97 months. Under § 3553(a), the court imposed a 20-month sentence.

First, the circuit affirmed the district court’s conclusion that the terrorism enhancement did not apply to Yousry because Yousry did not act with the requisite state of mind. The enhancement applies if the offense of conviction is a felony “that involved” or “was intended to promote” a federal crime of terrorism, defined as one that “is calculated to influence or affect the conduct of government through intimidation or coercion.” The district court concluded that the government failed to establish that Yousry acted with the requisite motivation or purpose.

The government conceded this point on appeal but argued that the enhancement should still apply because Yousry’s offense “involved ... a federal crime of terrorism.” The circuit disagreed, holding that the word “involved” (1) meant that the enhancement could only apply if Yousry himself had committed a federal crime of terrorism, and (2) incorporated the specific intent to “influence or affect the conduct of government by intimidation or coercion.” Since there was “no evidence that Yousry himself sought to influence or affect the conduct of government,” the enhancement did not apply.

Nor could Yousry’s co-defendants’ motivations be imputed to him under the relevant conduct Guideline. Section 1B1.3 applies to “acts and omissions” and a mens rea is not an “act” for the purposes of the relevant conduct guideline.

The court found no procedural error in the district court’s reliance, under § 3553(a), on the following mitigating factors: (1) Yousry’s conduct fell outside the heartland of material support for terrorist activity; (2) no “actual harm to victims occurred” - holding, for the first time, that “a district court may rely on the fact that no harm resulted from the criminal act at issue,” at least to some degree; (3) Yousry’s role was “subservient to the others involved” in the scheme; (4) since Yousry did not act for profit and did not support or believe in the use of violence, he was less dangerous and more easily deterred; (5) his conviction would render him unable to pursue his career as an academic or translator - holding, again for the first time, that the “collateral effects of a particular sentence” are a necessary component of the “just punishment” provision of § 3553(a)(2)(A); Yousry extensively cooperated with the government after the September 11, 2001, attacks; and (7) Yousry will not again be in a position to commit this type of offense.

Finally, the court of appeals found that the resulting sentence was substantively reasonable because these factors could “bear the weight” assigned to them by the district court and because the district court did not give an inappropriate level of deference to the Guidelines.

3. Stewart

For Stewart, the guidelines recommended 360 months, the statutory maximum. Given the applicability of the terrorism enhancement, her offense level was 41 and her criminal history category was VI. After considering § 3553(a), the court settled on a 28-month sentence.

The district court first found that, although the terrorism enhancement applied, and Stewart’s conduct was within that provision’s “heartland,” this case was nevertheless an “atypical” one for the enhancement, because the “thrust” of the conspiracy was providing a co-conspirator, no harm resulted, and the enhancement did not take into account her actual criminal history. The court held that category VI overstated the seriousness of Stewart’s criminal past and the likelihood of recidivism, which the court described as “nil.”

Next, the district court viewed Stewart’s personal history as an attorney as “extraordinary” and concluded that it merited a “substantial downward variance.” The court also took into account her ill health - she was a cancer survivor - and her age, noting that her sentence would represent a “greater portion of her remaining life than for a younger defendant and provide increased punishment.”

All three judges on the appellate panel agreed that the district court committed three procedural errors in sentencing Stewart.

First, there was some evidence that Stewart had committed perjury at trial by testifying that “she understood that there was a bubble built into the SAMs whereby the attorneys could issue press releases containing Abdel Rahman’s statements as part of their representation of him” and by denying knowing about one of Rahman’s confederates in Egypt. Although the district court acknowledged that there was reason to think these were false statements, it declined consider whether the obstruction of justice Guideline should apply because the Guidelines calculations were at the statutory maximum without that enhancement and because it had decided to impose a non-Guideline sentence.

Second, the district court did not consider whether Stewart abused a position of trust, an enhancement under § 3B1.3.

Third, all three judges expressed some concern that Stewart’s sentence was only 8 months longer than Yousry’s, but that her conduct was considerably more serious.

The court accordingly remanded Stewart’s case for resentencing and directed the district court to “determine the issue of perjury and if it finds such perjury to resentence Stewart so as to reflect that finding,” and to consider § 3B1.3 and “reconsider the extent to which Stewart’s status as a lawyer affects the appropriate sentence.” The court also remanded Sattar’s and Yousry’s cases, as well. Although it found no error in their sentences, since the “interrelationship among the sentences of the co-defendants is a principal consideration as to a proper sentence of Stewart, the district court should have the ability, if not the obligation, to resentence them as well.”

There was much, however, that the panel did not agree on.

Judge Calabresi, concurring, stressed the appellate court’s “limited ... institutional role” in reviewing sentences and the need to “avoid second guessing.” That said, and although the majority expressly refrained from addressing the substantive reasonableness of Stewart’s sentence, Judge Calabresi noted that he would be “very reluctant ... to find an abuse of discretion in a conclusion by the district court that Stewart’s conduct, though undeniably serious, was significantly less serious than that of other defendants subject to the terrorism enhancement.”

Judge Calabresi also wrote specifically on the desirability of permitting a district court to correct procedural errors and “exercise its discretion anew” before “prematurely” reviewing a sentence substantively.

Finally, Judge Calabresi suggested a further ground for possible leniency. Other members of Rahman’s legal team - including former United States Attorney General Ramsey Clark - had also violated the SAMS, albeit to a much lesser degree than Stewart, and were not prosecuted at all. Judge Calabresi was “inclined to think that the district court should not be barred from considering the relevance of prosecutorial discretion in a particular case, and that our legal system should take advantage of the district court’s unique position to consider a defendant’s sentence ‘in its complete relevant context.’” He noted, “we should not forget that there might be even greater disparities between a defendant and other individuals who were not charged at all.”

Judge Walker dissented. Although he agreed with the other members of the panel on the three procedural errors, Judge Walker concluded that the sentence was substantively unreasonable and should be vacated on that ground, as well. First, he viewed the district court’s decision to completely eliminate the effect of the terrorism enhancement as error. “Without a reasonable assessment of the seriousness of Stewart’s crime, the district court could not reliably determine the sentence necessary to afford adequate general and specific deterrence” in material support cases. He also found that the district court erred in weighing too heavily Stewart’s age, health and career. “I am at a loss for any rationale upon this record that could reasonably justify a sentence of 28 months’ imprisonment for this defendant under § 3553(a).”


Saturday, November 14, 2009

Bye-Bye Baby

United States v. Hasan, No. 08-4921-cr (2d Cir. November 10, 2009) (Cabaranes, Sack, CJJ, Rakoff, DJ)

Syed Hasan was convicted of a number of crimes in connection with his successful scheme to kidnap his infant son and spirit the child off to India. He appealed on a number of grounds. This long opinion covers little new ground, but closes one open question.

In preparation for the kidnapping, Hasan applied for a passport for the child. In the application, he falsely gave his brother's address in South Carolina as the child’s home address . In fact, the child lived in Brooklyn. On appeal, Hasan challenged his passport fraud conviction, arguing that the South Carolina address was not a “material misstatement.”

The circuit affirmed. It looked at the text of the statute, which makes it a crime to “willfully and knowingly make[] any false statement in an application for a passport,” and concluded that “the statute plainly does not require that the false statement be material.”

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The Things We Do For Love

United States v. Caraballo, No. 08-4640-cr (2d Cir. November 5, 2009) (Leval, Raggi, Livingston, CJJ)

Gilberto Caraballo was a large-scale drug supplier in the Sunset Park section of Brooklyn. In September of 2000, he started dating Quincy Martinez, former girlfriend of Jose Fernandez, a dealer who worked for Caraballo. Three months into their relationship, Martinez asked Caraballo to murder Fernandez because he had been abusive toward her. Caraballo answered, “Say no more.”

Caraballo recruited one of his former drug dealers, Aguilar, and Aguilar’s associate, Taylor, to help do the job. Caraballo had previously cut off Aguilar’s supply over an unpaid drug debt, but promised to forgive the debt and resume supplying to him in exchange for the hit. Taylor, who realized that his own sales would increase once Caraballo started supplying Aguilar again, agreed to help and was to receive $5,000 in cash or drugs.

Aguilar, Taylor and Caraballo did the deed and, as promised, Caraballo gave Taylor cocaine and ecstacy pills, forgave Aguilar’s drug debt and arranged for both of them to begin receiving drugs on consignment. As a result of this arrangement, Caraballo was convicted of violating 21 U.S.C. § 848(e)(1)(A), which makes it a crime for “any person engaging in” a specified drug crime to kill or solicit a killing.

On appeal, although he conceded that the evidence supported his conviction for the predicate drug offense, Caraballo argued that the evidence was insufficient to support a finding that he committed the murder while “engaging in” the drug conspiracy.

The circuit affirmed. It first noted that the statutory language - “engaging in” - would seem to require only a temporal connection between the murder and the drug crime. But the Second Circuit, like every other court, has concluded that the government must prove a “substantive, and not merely temporal, connection” between the murder and the drug predicate. This requirement saves the statute from a possible Commerce Clause challenge and furthers the law’s purpose, which is to “target drug-related killings.”

Previously, the court has held that the “engaging in” element is satisfied by proof that there was a drug-related motive for the killing, although the court has made clear that it does not have to be the “primary” motive, or even of equal importance to any non-drug-related motive. But here, the court rejected Caraballo’s argument that these precedents required that the government prove that the killing was, at least in part, in furtherance of the drug crime.

Rather, the court explained, those precedents are simply illustrations of one type of substantive connection; they do not hold that proof of a drug-related motive is the only way to establish it. Nor is there any legitimate policy reason for limiting the scope of the statute to cover only killings that are specifically motivated by the predicate drug crime.

With that as a background, the court had little trouble finding the evidence sufficient here. “[W]e see no reason why [the substantive connection] is not also proved by evidence that the defendant used qualified drug dealings to procure the murder.” Thus, here, while the motive for the killing - Caraballo’s romantic relationship with Martinez - was not drug-related, using the drug conspiracy’s proceeds as a tool to procure the killing was “sufficient to permit a reasonable jury to find that Caraballo killed Fernandez while ‘engaging in’ the charged drug conspiracy.”

In a footnote, however, the court reiterated its view - still dicta, since it has not yet come up - that a drug dealer who killed a spouse in a purely non-drug-related domestic dispute would not satisfy the “engaging in” requirement of § 848(e)(1)(A).





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Summary Summary

Two summary orders of interest:

In United States v. McDarrah, No. 07-1849-cr (2d Cir. November 5, 2009), a child enticement case, the district court admitted opinion testimony from an FBI agent that was improper in two ways. First, the agent used "we" to preface one of his opinions, which suggested that the opinion was based on his and other agents' collective knowledge and experience, and thus was "specialized knowledge" and not a "lay" opinion. Second, the agent expressed his opinion that the defendant was in fact guilty of attempted enticement. However, the court found the errors to be harmless.

In United States v. Creary, No. 06-2233-cr (2d Cir. November 3, 2009), the court noted that it is "plain error" for a district court not to adopt the presentence report in open court at sentencing, but not where the report adequately supports any contested enhancements.

Tuesday, November 03, 2009

Cash and Quarry

United States v. Byors, No. 08-4811-cr (2d Cir. October 29, 2009) (Cabranes, Livingston, CJJ, Korman, DJ)

Defendant, while ostensibly raising money for a Vermont marble quarry, made material misrepresentations to his investors. He also converted substantial amounts of their money to pay for his personal expenses, including vacation homes, cars and horses. He pled guilty to multiple fraud and money laundering offenses and was sentenced to 135 months’ imprisonment. On appeal, he raised two unsuccessful challenges to his Guidelines calculations.

He first argued that the district court should have deducted from the loss calculation - about $9 million - the “legitimate business expenditures” that went into his efforts to “capitalize” the quarry business. The circuit disagreed. Under the “plain language” of Application Note 3(E) to the fraud guideline, the loss amount is only offset by any “value” that the victims receive, and not by legitimate expenditures. Byors' expenditures conferred nothing of value and no benefit to his victims. He rendered no “services” to them and did not deliver any return on their “investment.” Even accepting his claim that he used the money for the purposes he promised his victims, there was no error here. Byors' victims were left with nothing of value when the fraud was uncovered.

Byor, who tampered with a witness during the investigation into his fraud, also raised an issue about the interaction between the general obstruction of justice guideline, § 3C1.1, and the specific provision dealing with obstruction in the money laundering Guideline, § 2S1.1, comment. n.2(C). These two provisions seemingly conflict in cases where the defendant has obstructed a predicate offense, but not the subsequent money laundering offense itself.

The money laundering guideline provides that the application of § 3C1.1 “shall be determined based on the [laundering of criminally derived funds] ... and not on the underlying offense from which the laundered funds were derived.” Byors argued that under this provision the Chapter 3 adjustment could only apply if the obstruction related to the money laundering offense, and not the underlying fraud. The circuit disagreed. The Chapter 3 obstruction enhancement covers the offense of conviction, “any relevant conduct,” or “a closely related offense.” The fraud that underlay the money laundering offense, during which Byors obstructed justice, was either relevant conduct or “closely related” to the money laundering offense.

The court refused to conclude that an application note to a separate offense conduct guideline “creates an exception” to § 3C1.1, since that would be contrary to its practice of seeking to “harmonize” commentary with the Guidelines.

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