Thursday, June 30, 2011

Summary Summary

It has been a while, but here are three more summary orders of interest.

In United States v. Mancuso, No. 10-2420-cr (2d Cir. June 30, 2011), the court identified several sentencing errors in connection with a prosecution for environmental crimes. First, the district court erred in applying the multi-object conspiracy guideline, U.S.S.G. § 1B1.2(d). When a defendant is convicted of multi-object conspiracy, this section requires the court to sentence as if the defendant had been convicted on a "separate count of conspiracy for each offense that the defendant conspired to commit." The sentencing court is to sit as the trier of fact and determine, using the reasonable doubt standard, whether it "would convict the defendant of conspiring to commit the particular objects" Here, the district court did not make any specific findings under this section, so the circuit remanded the case for further findings. Second, the district court committed plain error in applying the four-level enhancement for permitless disposal of a hazardous substance, because the relevant offense statutes did not involve permits. Third, the court made insufficient findings to support the obstruction of justice enhancement as to one defendant's testimony, because it did not make an explicit finding that the defendant's false testimony was willful.

United States v. Doe, No. 10-2095-cr (2d Cir. June 29, 2011), involves a complicated interaction between two unnamed litigants. One defendant, Roe, who appears to be an attorney, filed a civil RICO suit against the other, Doe, in the Southern District, which included sealed and confidential materials from Doe's Eastern District criminal case, including the fact that Doe had cooperated with the government. Judge Glasser eventually enjoined Roe from disseminating confidential information about Doe. Several hearings and orders followed, all restricting Roe's ability to disseminate information about Doe. On appeal, the circuit rebuffed a First Amendment challenge to an order permanently enjoining Roe from disseminating Doe's presentence report, since that order contained adequate findings that releasing proof of Doe's cooperation would put him at risk. That same order also concluded that Roe had deliberately defied the order sealing Doe's PSR, a finding that the circuit also upheld. The circuit also upheld an Eastern District order preventing Roe from disclosing other sealed or confidential information about Doe.

Finally, in United States v. Sleiman, No. 10-1865-cr (2d Cir. June 28, 2011), the circuit did not make adequate findings to support its use of the November 1, 2001, guideline manual in a money laundering case. The November 1, 2000, manual would have resulted in a sentencing range about half as long as that recommended by the next year's book. The circuit ordered a Jacobson remand: the district court must either determine that the government has proven that the offense conduct extended into the time period covered by the November 1, 2001, manual or resentence the defendant under the 2000 manual.

Sunday, June 26, 2011

PC World

United Sates v. Gravel, No. 10-1045-cr (2d Cir. June 20, 2011) (Pooler, Wesley, Chin, CJJ) (per curiam)

The court’s latest per curiam looks at the firearm guideline’s six-level enhancement for "machineguns." See U.S.S.G. § 2K2.1(a)(5).

The defendant’s gun was a Colt machinegun, initially designed to fire automatically, but had been retrofitted to fire only semi-automatically. Defendant argued that since the definition uses the present tense - a machinegun is “any weapon which shoots, is designed to shoot, or can be readily restored to shoot, automatically more than one shot” - his now semi-automatic weapon should not receive the enhancement. Looking to the dictionary definition of “designed,” the court held that, when applied to a “manufactured object such as a firearm,” the word referred to what the gun was “conceived of and designed for and not to any modifications made afterwards.”

Here, since the gun was made for use as an automatic weapon, the retrofitting did not “change the fundamental design of the weapon” or “redesign” it into something else.

Circuit Says SDNY Jury Selection Is “Trivial”

United States v. Gupta, No. 09-4738-cr (2d Cir. June 17, 2011) (Walker, Parker, Hall, CJJ)

Anyone who has ever selected a jury in the Southern District knows that the typical voir dire there is a perfunctory affair indeed: a few questions about potential bias, a few about household composition, then you exercise your challenges and open after lunch. Perhaps that’s why the panel majority here held that the exclusion of the entire public for an entire SDNY voir dire was covered by the circuit’s “triviality exception” to the Sixth Amendment right to a public trial.

Before jury selection began at Gupta’s immigration fraud trial, the district court closed the courtroom to the public, preventing - at a minimum - Gupta’s girlfriend and brother from attending. The court acted without notice to the parties and, when later called upon to do so, gave two reasons for the closure: the need to “accommodate the large number of jurors in the venire” and to protect the members of the venire from having contact with any members of the public.

The majority had no trouble finding a Sixth Amendment violation - even the government agreed that the court’s reasons for the closure violated the four-factor test of Waller v. Georgia. But the majority also held that the Second Circuit’s so-called “triviality exception” covered this situation.

The court has been using this exception since 2005; as the court described it then, the exception does not look for prejudice or harm to the defendant. Rather, it looks to “whether the actions of the court and the effect that they had on the conduct of the trial deprived the defendant ... of the protections conferred by the Sixth Amendment.” In other words, the court asks whether a closure undermines the values that the Sixth Amendment was intended to protect.

A few years back, in a habeas case, the court used this exception to avoid finding structural error where the defendant’s mother was excluded from a portion, but not all of, the voir dire. See Structural Failure, posted February 6, 2009. The majority here found that there was no difference between a partial voir dire closure and the closure of the entire proceeding. Either way, “nothing of significance happened” in the absence of public scrutiny, and this was true whether the closure was for all of, or only part of, jury selection.

The majority also identified a “broader, institutional reason” for finding the closure “trivial”: here members of the public - the venire itself - were present. And, according to the majority, “members of the venire remain public wittneses during much of the voir dire proceedings.”

Finally, the majority rejected the argument that a 2010 Supreme Court decision, Presley v. Georgia, invalidated the triviality exception. In Presley, the Georgia Supreme Court had found no Sixth Amendment violation where the trial judge excluded the defendant’s mother from the voir dire, because the defendant did not present the trial court with alternatives to the closure. The Supreme Court reversed, holding that trial courts are not excused from Waller's requirement that they consider alternatives merely because the defendant did not suggest any.

As the majority here saw it, since all the Court did in Presley was conclude that the state misapplied Waller “from the onset,” it had “no occasion to consider a ‘trivilaity exception’ to the public trial guarantee.”

The majority’s opinion prompted a stinging rebuke from Judge Parker in dissent. To Judge Parker, there was nothing at all “trivial” about the closure here. He first noted the exception “was never meant to apply, and should not now be applied” to the “entirety of jury selection,” particularly where, as here, the closure was undisclosed to the parties. “A trial judge’s undisclosed exclusion of the public from jury selection, without the knowledge or assent of the accused or the lawyers, seriously undermines the basic fairness of a criminal trial and the appearance of fairness so essential to public confidence in the system.”

Judge Parker then surveyed all of the reported decisions holding that a closure during voir dire was too trivial to warrant reversing a conviction. He concluded that in all of them the closure was (1) for only part of the voir dire, (2) limited to certain spectators, or (3) inadvertent. “Never, until today, has any court held that a judge’s intentional, unjustified, and undisclosed exclusion of the public for the entirety of voir dire can be brushed aside as a merely ‘trivial' affront to the Sixth Amendment.”

Judge Parker also took issue both with the notion that “nothing of significance happened” - since what happened was “the entire process of selecting the jury" - and that the right to a public trial was protected because the prospective jurors were present. “This reason makes no sense” because the panel members had received summonses and were “required to be there and [be] part of the judicial process itself.”

Judge Parker concluded by characterizing the result here as “so self-evidently inconsistent with Supreme Court jurisprudence that I would hope that it becomes the subject of certiorari.”

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Sunday, June 19, 2011

Mommy Dearest

United States v. O’Connor, No. 08-5968-cr (2d Cir. June 16, 2011) (Kearse, Pooler, Hall, CJJ)

Linda O’Connor began sexually abusing her daughter, S.O., when S.O. was ten years old. O’Connor also allowed her friend - he was also her occasional financial benefactor and sex partner - George Lang, to do so; O’Connor even sometimes joined in. Lang died of cancer before he could be prosecuted, and O’Connor then passed S.O. on to her landlord, co-defendant Dean Sacco, in lieu of paying rent. Sacco raped S.O. many times, and also took pictures of the abuse. Finally, on two occasions, O’Connor brought S.O. to a motel in Binghamton, where strangers raped her for money, while O'Connor looked on and ordered her to follow the men’s instructions.

O’Connor and Sacco were convicted of various sex trafficking and child pornography offenses; she was sentenced to 30 years and he to life. This opinion affirms their convictions.


Sacco’s main claim on appeal was that the district court abused its discretion in denying his attorney’s motion to withdraw.

The facts are quite unusual. Sacco had a court-appointed attorney, who worked on the case for about two months. He researched and investigated the case and reviewed voluminous discovery materials. Just days before the scheduled trial date, however, the attorney moved to withdraw, saying that the intensity of his personal feelings about the case would affect his ability to zealously represent Sacco.

The attorney cited in particular the recent disclosure of a single item of evidence: a used condom recovered from Sacco’s belonging that had S.O.’s DNA on the outside. The attorney said that this evidence had caused him to shift his “moral and technical perspective” on the case such that he could no longer be effective. The government opposed the motion to withdraw, while Sacco himself took “no firm position” on it. He was largely pleased with his attorney’s performance, although he expressed frustration that they had not communicated more. Sacco also indicated that he wanted to go to trial as quickly as possible, but questioned whether his attorney was truly ready. With this as the record, the district court found that there was an insufficient basis for the attorney to withdraw and denied the motion.

The circuit found no abuse of discretion. While the attorney had tried to based his arguments in the district court on New York’s then-applicable rules of professional responsibility, the circuit noted that the attorney never argued that he would be in violation of any Disciplinary Rule if he continued representing Sacco. And the relevant Ethical Considerations actually supported the district court’s ruling. While an attorney’s personal feelings might permit him to refuse an assignment, they do not permit withdrawal. Withdrawal must be for “compelling reasons,” which “do not include such factors as the repugnance of the subject matter of the proceeding.”

Here, the DNA evidence that prompted the motion to withdraw, whether it suddenly made the subject matter repugnant to the attorney or simply made him realize that his client was guilty, could not serve as a valid basis for withdrawal. Moreover, on appeal, represented by different counsel, Sacco could point to nothing in the record to suggest that his attorney’s representation was actually impaired.


O’Connor had two main appellate claims - sufficiency challenges and the denial of her motion to be severed from Sacco for trial. The circuit disposed of these challenges with little trouble. The sufficiency claims were all quite thin. And,for the severance claim, the circuit began by noting the great deference owed to district courts’ severance decisions.

Here, the nature of the charges “made the joint trial of O’Connor and Sacco particularly appropriate,” since O’Connor was charged with selling S.O. to Sacco for the purpose of producing child pornography. The court also rejected O’Connor’s claim that her defense was antagonistic to Sacco’s, since both defendants argued that S.O.’s testimony was not worthy of belief. Nor was there any risk of “spillover” prejudice. While there was highly damaging evidence admitted against Sacco alone, the judge carefully instructed the jury that each charge and each defendant had to be considered separately.

O’Connor also raised an interesting evidentiary issue. A witness with whom S.O. stayed for two months during the charged time period testified that, when cleaning S.O.’s room she found a note in S.O.’s handwriting that said, “I hate my mother. She used me,” although the witness had not preserved the note.

The circuit found no hearsay error. The district court had admitted the contents of the note under the “state of mind” exception in Fed. R. Evid. 803(3). But that covered only the “I hate my mother” sentence, and not “She used me.” But this latter statement was covered by Rule 801(d), the “prior consistent statement” rule, which makes a statement not hearsay if the declarant testifies, is cross-examined on the statement, and the statement is used to rebut a claim of recent fabrication. Here, both defendants had argued that S.O.’s fabrications began on a date after the note was written, so the prior consistent statement was admissible.

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Thursday, June 16, 2011

Coffee, Tea or Venue?

United States v. Tzolov, No. 10-562-cr (2d Cir. June 15, 2011) (Feinberg, Parker, Wesley, CJJ)

Eric Butler, the appellant here, was one of the conspirators in a securities fraud scheme arising from the failure of the auction rate securities market. The scheme operated largely out of an office in Manhattan, but Butler was prosecuted in the Eastern District, where he was convicted of securities fraud and conspiracy to commit securities and wire fraud. The scheme’s ties to EDNY were, to put it mildly, scant - on occasion the defendants would fly out of JFK to meet with investors in other cities and try to scam them. But, apart from that, everything happened elsewhere.

On appeal, the circuit agreed that venue was improper in EDNY for the substantive securities fraud count, but affirmed as to the conspiracy counts. In light of the dismissal of one count, the court also remanded the case for resentencing.

Securities Fraud

The securities fraud statute has its own venue provision, 15 U.S.C. § 78aa, which provides that a criminal proceeding may be “brought in the district wherein any act or transaction constituting the violation occurred.” The circuit had “little difficulty concluding” that merely flying out of JFK did not satisfy this language. There was no evidence that those flights constituted an “act or transaction constituting” the securities fraud.

To the contrary, the conspirators made all of the fraudulent statements that constituted the fraud either in their Manhattan office or in meetings with investors. “None of this activity occurred in the Eastern District.” Nor did they commit securities fraud by boarding a plane at JFK. Those flights were not acts “constituting” securities fraud; they were merely “preparatory acts,” and, for a substantive crime, “venue is not proper in a district in which the only acts performed by the defendant were preparatory to the offense and not part of the offense.” Thus, venue was not proper in the Eastern District for the securities fraud count.

The Conspiracy Counts

The court reached a different conclusion for the conspiracy counts, because those counts “require[d] a different analysis.” For a conspiracy, “venue is proper in any district in which an overt act in furtherance of the conspiracy was committed.” That can be “any act performed by any conspirator for the purpose of accomplishing” the scheme’s objectives, even if not unlawful.

Here, a “reasonable jury” could have concluded that the defendants’ flights out of JFK to meet the investors that they were trying to con furthered the conspiracy because without the flights those face-to-face meetings would not have occurred. In addition, the flights showed the conspiracy “at work” and not just “a project still resting solely in the [conspirators’] minds.” Finally, the court reject the argument that the flights did not demonstrate “substantial contacts” with EDNY, such that venue there would be “unfair or prejudicial.” Although the court did not hold that any overt act in a situs district will constitute a “substantial contact,” it found that the flights out of JFK here were sufficient.


Sunday, June 12, 2011

PC World

Here are two per curiams in white collar cases, decided on the same day.

First, in United States v. Lauerson, No. 09-0255-cr (2d Cir. June 7, 2011) (McLaughlin, Pooler, Sack, CJJ) (per curiam), the circuit agreed that the district court lacked the authority to waive the delinquency and default penalties arising from the defendant’s falling behind on his restitution payments. The relevant statute, 18 U.S.C. § 361, permits courts to, in some circumstances, modify or remit the restitution order itself, but does not permit waiver of those penalties.

And, in United States v. Wolfson, No. 10-2786-cr (2d Cir. June 7, 2011) (Kearse, Pooler, Lynch, CJJ), the court found no error in the jury instructions at a“pump and dump” securities fraud trial. The scheme operated by having corrupt stock brokers selling overvalued stocks, for which they were rewarded with “exorbitant” commissions that they either failed to disclose at all or lied about. Wolfson argued that the brokers had no duty to disclose their commission, and thus that it was error for the district court to give a fiduciary duty instruction. But the circuit noted that, while there is no “general” fiduciary duty inherent in the ordinary broker/customer relationship, there is a “relationship of trust and confidence.” A properly instructed jury “may find that stock brokers have a duty to disclose material commissions to their customers, and can convict brokers who breach that duty.”

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What's Drug Dealer To Do?

United States v. Figueroa, No. 10-2050-cr (2d Cir. May 16, 2011) (Miner, Cabranes, Straub, CJJ)

Several months ago, in a per curiam, the court held that it was not error for a district court to treat the combination of BZP and TFMPP, which is commonly sold on the street as ecstasy, but for which there is no dedicated guideline, as ecstasy (“MDMA”) . This opinion deals with BZP alone, and reaches a different result.

Here, the defendants had about 20,000 pills containing BZP, combined with trace - the circuit called it “unmeasurable” - amounts of other substances, including TFMPP. The district court treated the pills as containing pure BZP, then analogized BZP to MDMA for guidelines purposes. The defense disputed this, and asked for a hearing, but the district court refused even that, relying on the DEA’s lab report and the fact that BZP is sold as MDMA on “the street.”

On appeal, the court found that this record presented an insufficient basis to conclude that BZP alone is most analogous to MDMA for guidelines purposes. It noted that the interchangeability of the two drugs “on the street” could not justify the conclusion, since the relevant guideline provision, Application Note 5 to § 2D1.1, requires consideration of such factors as chemical structure and effect on the central nervous system.

The court also observed, however, that this decision might result in a harsher punishment on remand, since it is possible that amphetamine might be found to be the most analogous drug to pure BZP, and amphetamine has a higher marijuana equivalency than MDMA. Here, likening BZP to amphetamine instead of MDMA would result in a two-level increase.

Moreover, the court could not ascertain at oral argument that the defendants were aware of this risk and wished to proceed anyway, since the appeal was submitted for decision without argument. The court accordingly stayed the mandate for an additional 30 days to give counsel an opportunity to confer with the defendants about the risks of pursuing the appeal, and offered them the opportunity to withdraw the appeal “at anytime prior to the issuance of the mandate.”

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A Condition Precedent

United States v. Spencer, No. 10-1869-cr (2d Cir. May 20, 2011) (Parker, Pooler, Lohier, CJJ)

Joseph Spencer left much to be desired as a supervised-releasee.

He was originally sentenced to time served and three years’ supervised release for bank fraud, then, after a hearing, the district court found that he, in essence, committed the same crime while on supervision. Spencer was also subject to Standard Condition 6, which required him to “notify the probation officer at least ten days prior to any change in residence or employment,” and the district court also found that Spencer violated Condition 6. The court sentenced him to a total of fourteen months’ imprisonment for everything. While Spencer did not challenge the finding of new criminal conduct on appeal, the circuit agreed that his other violation conduct was not “clearly and specifically forbidden by Condition 6"; it vacated and remanded for resentencing.

The evidence at the hearing established that Spencer had been fired from his job in April of 2007, but for several months continued to tell his probation officer that he was still employed there. In addition, the hearing established that for a brief period in early 2008, after a fight with his girlfriend, Spencer lived at a different address, but did not tell his probation officer about the change.

The district court rejected Spencer’s arguments that the government failed to establish that he had ten days’ notice of either the loss of his job or the need to relocate temporarily, and thus that he did not violate Condition 6. The court held that the “purpose” of Condition 6 is to keep the probation officer informed about a changed circumstance “whether it has changed after ten days’ notice or not.”

The circuit, however, held that the “purpose” of the condition could not trump its plain terms. Conditions of supervision must be “sufficiently clear and specific to serve as a guide for the defendant’s conduct.” And a “person of ordinary intelligence” on supervision would not be expected to “ignore the explicit ‘at least ten days prior’ limitation of Condition 6.” Since Condition 6 does not include “periods of notice less than ten days,” and since there was “no evidence that Spencer had at least ten days prior notice” before being fired, the district court erred in finding that he violated Condition 6 by not telling his probation officer about the firing.

Simiarly, the facts before the district court could not support a finding that Spencer violated Condition 6 by failing to report a temporary change in residence precipitated by difficulties with his girlfriend. The lower court did not determine whether Spencer even had the ability to notify his probation officer ten days in advance of the change. Absent such a finding, it was error to conclude that Spencer violated Condition 6.

Spencer had also argued that the term “residence” in Condition 6 referred to the releasee’s permanent residence, and not a temporary stay outside his home. While both the district court and the circuit found this to be a “plausible” reading of the condition, the circuit did not conclusively rule on it.

Since the district court did not say that it had based the violation sentence on only on the new criminal conduct, the circuit concluded that the errors with respect to Condition 6 were not harmless, and that Spencer should be resentenced.