Second Circuit Blog

Land of Enhancements

2012-01-29T11:29:00.002-05:00

United States v. Watkins, No. 10-2971-cr (2d Cir. January 26, 2012) (Miner, McLaughlin, Pooler, CJJ)

Anthony Watkins was a 48-year-old homeless career criminal who lived in a baseball dugout in Schenectady, New York. Using a computer from the local public library, and posing as a 38-year-old, he began an on-line relationship with a 15-year-old girl who lived in Connecticut. Eventually he persuaded her to meet, and drove from Schenectady to her home; she sneaked out of her house and had sex with him in the car. Later that night, she ran away with him. He drove her back to New York and they spent the weekend in Schenectady, where they continued to have sexual contact. The girl called her parents from there, and eventually the police, acting on a tip, found them and arrested Watkins.

Watkins pled guilty to one count of transporting a minor in interstate commerce with intent to engage in criminal sexual activity. This appeal concerns his 233-month, top-of-the-range sentence.

Specifically, Watkins challenged three two-point Guideline enhancements. The court affirmed two of them easily - the § 2G1.3(b)(4)(A) enhancement for “commission of a sex act or sexual contact” and the § (b)(3)(A) enhancement for use of a computer to entice a minor.

However, Watkins' challenge the § (b)(2) enhancement for misrepresentation of identity resulted in a split decision and an interesting debate about the appellate court's role. The majority affirmed the enhancement, while Judge Pooler dissented on the ground that the lower court’s findings were inadequate.

The §(b)(2) enhancement applies if either (A) there was a “knowing misrepresentation of a participant’s identity to persuade, induce, entice, coerce, or facilitate the travel of, a minor to engage in prohibited sexual conduct” or (B) a participant “otherwise unduly influenced a minor” to do so. For § (b)(2)(A), the Guideline specifies that lying about one’s age can constitute a misrepresentation of identity, and for § (b)(2)(B), it creates a rebuttable presumption of undue influence if the age difference exceeds ten years.

The majority found that either theory would apply here. The district court did not make specific findings on the enhancement, but it did adopt the presentence report, which had concluded that Watkins “likely” held himself out as ten years younger “in order to persuade [the girl] into having sexual relations with him, presumably in belief that if the age difference were not as great, she would be more likely to engage in such conduct.” The majority found ample record support for the PSR's finding: Watkins’ primary objective in communicating with the girl was to induce her to have sex with him, and in some of his communications with her he tried to reassure her that a 20-year age difference was “common for couples.”

The majority also concluded, in dicta, that § (b)(2)(B) would apply as well. It rejected Watkins’ claim that the girl’s seeming eagerness to participate rebutted the presumption of undue influence, seemingly as a matter of law. And, apart from the age difference, the majority also found evidence of undue influence in Watkins’ “numerous instances of manipulative behavior,” such as picking up the girl at home, giving her gifts, meals and clothing, disparaging her age-appropriate boyfriend, and lying about his own personal circumstances.

Judge Pooler, in dissent, had a different view of the record. To her, the district court had simply concluded that the enhancement applied without making specific findings that Watkins’ conduct qualified. Adopting the presentence report only excuses a court from making specific findings if the findings in the PSR are “adequate to support the sentence.”

Here, with respect to the § (b)(2)(A) misrepresentation theory, the PSR found only that “it is likely” that Watkins’ lie about his age was intended to persuade the victim, “presumably in belief” that this would make her consent more readily. To Judge Pooler, this finding - that Watkins “probably qualified” for the sentencing enhancement - “is no finding at all in this context.” She also pointed out that the facts that the majority cited in upholding the enhancement were its own findings, not findings made, or relied upon, by the district judge.

As for the § (b)(2)(B) rebuttable presumption, Judge Pooler noted that, even though Watkins had objected and argued that record evidence rebutted the presumption, the district court “made no effort to weigh the evidence and determine if Watkins had rebutted the presumption of undue influence.” Instead, the district court merely adopted the PSR, which had noted only that Watkins was more than ten years older than the girl and that a 15-year-old cannot legally consent. To Judge Pooler, adopting this, without more, led to a “mandatory application of the enhancement” that was “wholly unsupported by” the Guideline or its commentary, both of which require particularized findings. She again faulted the majority for making the findings that the district court was supposed to - but did not - make.

Judge Pooler closed by reminding: “We review a district court’s decision for errors; we do not fix its mistakes.”

Summary Summary

2012-01-21T11:56:00.002-05:00

The circuit consistently produces summary orders that are worthy of note. Here are the most recent three:

In L.M. v. United States, No. 10-371-cr (2d Cir. January 17, 2012), the court vacated the sentence that Judge Platt imposed on a cooperator. The facts of the case are truly exceptional. The defendant cooperated for seventeen years, brought down "a number of large-scale international drug dealers, and received several "credible threats of violence." The government, in its 5K1.1 motion, characterized him as "unique[]." L.M. also underwent an "admirable personal transformation" during this period. Nevertheless, with "little explanation" the district court gave him a-year-and-a-day in prison. The circuit found that the sentence was procedurally unreasonable because it was insufficiently explained. It was "particularly troubling" court did not even mention L.M.'s long period of rehabilitation. The court stopped short of finding that the sentence was substantively unreasonable, calling that a "thorny issue," but did remand the case under Jacobson, which means that if L.M. appeals again, the case will go back to the same panel.

In United States v. Swint, No. 11-66-cr (2d Cir. January 4, 2012), the court rejected the government's appeal of a § 3582(c)(2) sentence reduction in a crack case. Although the defendant had met the career offender criteria, it was clear that the district court sentenced him based on the crack cocaine guidelines and not the career offender guidelines. This decision was under Amendment 706, not Amendment 750, which might well preclude reductions in such cases. But, following its own decision in Rivera, the court held that the new version of 1B1.10 does not apply retroactively.

In United States v Murph, No. 10-1555-cr (2d Cir. December 19, 2011), the court remanded a sentence for the correction of various clerical errors, one of which might affect the length of the sentence. The district court failed to identify the four co-conspirators that served as the basis for an aggravating role enhancement. The circuit used the Jacobson procedure to send the case back for findings.

Parole Evidence

2012-01-21T11:52:00.002-05:00

United States v. Barner, No. 10-3700-cr (2d Cir. (Sack, Raggi, CJJ, Eaton, JCIT)

This decision, a government appeal, reverses a district court order suppressing evidence obtained during a parole search.

Barner was released to New York State parole in 2007, and signed a Certificate of Release that included his consent to having his parole officer visit him at home and search and inspect his person, residence and property. Barner was also forbidden from possessing any sort of firearm, ammunition or body armor, and was subject to a curfew.

In early 2008, someone called Barner’s parole officer and told her that Barner had fired a gun at him. She and other officers tried to reach Barner at home that night - during his curfew period - but Barner was not there. This prompted Barner to obtain a parole violation arrest warrant. Two days later, Barner reported for his weekly appointment with his P.O., and was placed under arrest. Barner denied having any firearms, consented to a search of his residence, and gave the P.O. a key ring that had three keys - one to his apartment building, one to his apartment, and one to a storage area adjacent to the apartment. Barner was now in custody, and the officers brought him back to his apartment while they searched it. During that search, P.O.’s found various forbidden items, including a small bag of crack cocaine. One officer noticed the storage area, which was ten feet away from the entrance to the apartment, and used one of Barner’s keys to open it. Inside were four guns, a bulletproof vest, ammunition, a scale and some marijuana. Barner was charged in the Western District with being a felon in possession of the guns and ammo.

After a hearing, the district court suppressed the evidence. It held that the consent-to-search condition of Barner’s parole no longer applied because he was back in custody, and hence no longer on parole, and that the scope of the consent that Barner gave on the day of his arrest included his apartment only, and not the storage room.

The circuit disagreed. Given the “special needs” of supervising parolees, the relevant question was not the scope or validity of Barner's consent. It was “whether the conduct of the parole officer[s] was rationally and reasonably related to the performance of [their] dut[ies].” The P.O. began this investigation with information that Barner had possessed a gun and fired it at someone else, both criminal parole violations. It was “clearly reasonable” for the officer to investigate those allegations further, and it was reasonable for that investigation to include a search.

The district court also erred in concluding that Barner’s full Fourth Amendment rights were restored to him once he was arrested; to the contrary, the allegation of a parole violation and the issuance of the arrest warrant placed him “one step farther from the constitutional protection enjoyed by ordinary citizens.” Thus, Barner’s arrest for a parole violation did not render the search unreasonable. While it is possible that a search “conducted days or weeks after a parolee’s arrest and detention” might be “so attenuated from the parole officers’ duties” as to render it unconstitutional, Barner's not such a case.

By focusing on the “special needs” doctrine, and not the specifics of the consent, the circuit easily concluded the search of the storage room was lawful. That search was “reasonably related to the parole officers’ duties” and was “performed in furtherance” of them.

PC World

2012-01-21T11:05:00.000-05:00

United States v. Baker, No. 10-1925-cr (2d Cir. January 12, 2012) (Pooler, Parker, Carney, CJJ) (per curiam)

This latest per curiam affirms an Armed Career Criminal Act (“ACCA”) sentence, rejecting the defendant’s claims that his Vermont prison escape convictions were not ACCA predicates. The statute at issue contains two distinct offenses - failure to report to custody, which is not a predicate, and escape from custody. Baker agreed that his convictions were for escape from custody, but argued that the district court should have looked beyond the charging instruments to determine whether his actual conduct posed a sufficient degree of risk to qualify.

The circuit disagreed. While a sentencing court can, and sometimes must, look beyond the charging instrument, it cannot go beyond the judicial record evidence. Where the defendant pled guilty, the offense is a predicate if the record establishes that his plea necessarily admitted elements of a predicate offense. Here the judicial record evidence established that Baker pled to an escape from custody, and the circuit held that this kind of offense categorically, “in the ordinary case,” presents a serious potential risk of injury to another, rendering it an ACCA predicate. Prisons are dangerous places and escape attempts can have “explosive consequences.” Thus, such attempts present a risk of violent confrontation that is “at least as great as that of a burglary.” Correction officers have a duty to confront and challenge an escaping inmate, which increases the likelihood of a violent encounter. Indeed, Sentencing Commission statistics reveal that more than 15 per cent of federal escapes involved force, more than 30 per cent involved a dangerous weapon, and more than 10 percent involved injury. By contrast there were no instances of injury or force in cases of failure to report or return.

Ex Parte Line

2012-01-15T17:32:00.002-05:00

United States v. Collins, No. 10-1048-cr (2d Cir. January 9, 2012) (Calabresi, Chin, Carney, CJJ)

A jury convicted defendant Collins of several counts of fraud. The circuit ordered a new trial based on the district court’s handling of a series of jury notes relating to difficulties in deliberations.

Background

Something about this trial inspired great turmoil during jury deliberations. It began with a report, after five days of trying, of difficulty reaching a verdict. The district judge gave a tepid reply, but later that day a CSO heard a disruption in the jury room and, when he entered, one juror told him that another had threatened him. The judge brought the jury in and urged civility.

The next day brought two more notes. One, from Juror 4, indicated that Juror 9 had threatened to “cut off [his] finger” and have her “husband take care of [him].” The second, from the foreperson, indicated that both Juror 4 and Juror 9 were at fault. The judge responded by note, although that note did not reach that jury until the next morning.

The next afternoon, the judge received two more notes. One was a routine request for exhibits and testimony. The second was another from the foreperson, decsribing Juror 4's “odd behavior” during deliberations. It accused of him of bartering his vote on one count for a vote on another, suggested that this was the cause of the altercation between him and Juror 9, and also suggested that Juror 4 was refusing to deliberate further. The district judge did not disclose the content of this note to the attorneys, and simply indicated, over objection, that he would be speaking with Juror 4 privately. A court reporter took down the judge’s interview with the juror and, once the interview concluded, the judge read the note and the interview into the record. This prompted defense counsel to move for a mistrial.

The court denied this, and the next day the jury indicated that it could not reach a unanimous verdict on all counts. The court took a partial verdict - guilty of five counts - and eventually sentenced Collins to eight-four months’ imprisonment, which was stayed pending appeal.

The Circuit’s Opinion

The appellate court ordered a new trial, concluding that the district court’s handling of the situation violated Collin’s right to be present, and was not harmless error.

The circuit began with a warning against responding to jury notes ex parte; such communications are “pregnant with possibilities for error.” Of particular concern is that the judge will give a supplemental instruction, for which the defendant should always be present, or will “generate unintended and misleading impressions of the judge’s subjective personal views.”

The district court first deprived Collins of his right to be present when it chose note to disclose the contents of the note that prompted the private conference with Juror 4. The court should have “instructed the jury to stop deliberating while it read the Note into the record and consulted counsel on how to proceed.”

The court also violated Collins’ right to be present by interviewing Juror 4 ex parte because some of what the court told the juror constituted supplemental instruction. The judge stressed the importance of reaching a resolution. This was a “direct supplemental instruction,” a staple of the modified Allen charge.

Finally, the circuit concluded that Collins was prejudiced. “Because of the delicate nature of jury deliberations, even seemingly innocuous ex parte communications between the court and the jury can amount to reversible error.” Here, the court could not say with “fair assurance” that the district court’s errors “did not substantially affect the verdict. The court singled out a dissenting juror, and emphasized to him the importance of reaching a verdict. We cannot ignore the possibility that Juror 4 walked out of the ex parte conference with the impression that he should not stand in the way of a prompt resolution of the case.” The district judge also failed to acknowledge Juror 4's complaints of harassment; this “exacerbated the potential for prejudice” by possibly giving Juror 4 the impression that the judge “was taking sides against him” and by sending “a signal to the rest of the jurors that the court condoned their behavior towards Juror 4.”

Nor did the fact that the jury deliberated for another full day after the ex parte conference render the error harmless. In the context of a “highly complex fraud case involving fourteen counts, one day of deliberations is not a significant amount of time.”

Citizen Gain

2012-01-15T10:44:00.003-05:00

Garcia v. USICE, No. 09-4211-pr (2d Cir. December 29, 2011) (Miner, Wesley, Chin, CJJ)

This interesting derivative citizenship decision - although not a criminal case - is a great read, and flags a potentially important issue for defense lawyers.

Carlos Garcia was born in the Dominican Republic, and his family brought him to the United States when he was five years old. He soon became a permanent resident, and lived with his family on West 107th Street in Manhattan.

Four years after the family emigrated, they vacationed in the D.R. and, while they were there, his parents divorced. The divorce decree gave Garcia’ smother “personal guardianship” over him. Despite the divorce, however, the parents continued to live together on West 107th when they returned to New York. One year later, the whole family moved to West 109th Street and, five years later - six years after the divorce - the mother moved into her own apartment. In 1996, when Garcia was not yet 18, his father naturalized.

As a young man, Garcia had trouble with the law several times, and eventually faced removal. He applied for derivative citizenship based on his father’s naturalization, asserting that he lived with his father, not his mother, when the father naturalized in 1996, and thus that the father had “actual uncontested custody” of him. ICE denied the petition based on the Dominican divorce decree, which gave the mother, not the father, “legal custody.” After losing his administrative appeal, Garcia filed a pro se habeas petition in the Western District, which denied it. Relying on the wording of the divorce decree, the court held that Garcia could not demonstrate that he was in his father’s sole legal custody when the father naturalized. He appealed, and now assisted by appointed pro bono counsel, the circuit reversed.

In the case of a foreign-born child whose parents have separated, the applicable statute - it has since been repealed - granted citizenship to the child if the parent having “legal custody” naturalized before the child turned eighteen. Here, there was no dispute that, when Garcia’s father naturalized, Garcia was under eighteen and the parents were legally separated. The disagreement was only over the “legal custody” requirement.

This question turns on federal law, but the analysis is guided by state law if there is “no extant body of federal common law.” Thus, in the past, for example, the circuit has looked at New York law - which requires a formal act - to determine whether there has been a “legal separation.” But the court was less certain that looking at state law would be helpful in determining “legal custody.” “Decisions about the marital relationship tend to be final; custody decisions, in contrast, tend to be fluid and frequently change depending on the parents’ situations and well-being.” Requiring a “formal act” to change custody would also be contrary to the obvious parental goal after a divorce - ensuring the child’s best interest.

Here, the court’s the first step was determining whether a judicial decree or statutory grant awarded custody to the naturalizing parent. If there is none, then, under longstanding Board of Immigration Appeals precedent, the parent having “actual uncontested custody” is the one that has “legal custody” for the derivative citizenship purposes. And here, the circuit agreed with Garcia that the Dominican custody award was not enforceable in New York, and thus that the “actual uncontested custody” standard applied. At the time of the Dominican divorce, New York was the family’s home state, and thus New York had jurisdiction to determine custody, not the D.R. The circuit held that the Dominican custody award was not made in “substantial accordance” with New York law - although it did not really explain why - and thus that New York would not recognize that award.

Even acting pro se in the district court, Garcia introduced “largely uncontradicted” evidence that he was in his father’s “actual uncontested custody” when the father naturalized in 1996. At that time, the father lived on West 109th Street, and both Garcia and his parents filed affidavits - unrebutted by the government - that he lived there then, too. School records obtained by Garcia’s appellate counsel further supported this, as did Garcia’s 2003 Alien Change of Address form, which listed th3 109th Street address as the “old” - that is, pre-change, address.

This government’s evidence was limited to an assertions that statements in some of the father’s pre-naturalization tax and immigration documents were inconsistent with his current claim that he had custody of Garcia in 1996. The circuit has not particularly convinced by the government's evidence, but rather than simply holding for Garcia, it concluded that there was a “genuine dispute of material fact” over which parent had uncontested custody over Garcia when the father naturalized. It accordingly vacated and remanded for an evidentiary hearing, and also took the unusual step of ordering the district court to appoint counsel for Garcia.

Beware of Greeks Bearing Writs

2012-01-14T18:29:00.002-05:00

Skaftouros v. United States, No. 11-0462-cv (2d Cir. December 20, 2011) (Cabranes, Hall, Lohier, CJJ)

Dimitrious Skaftouros is charged in Greece, his native country, with murdering a sixteen-year-old boy after a botched kidnapping. The crime took place in March of 1990; Skaftouros fled Greece that May, and ultimately ended up in the United States. He was arrested here in 2008, and the Greek government then sought his extradition to face the charge of “complicity in the murder of a minor.”

After unsuccessfully challenging his extradition in front of a magistrate judge, Skaftouros filed a habeas corpus petition under 28 U.S.C. § 2241. The district court granted the habeas petition, and also his “motion to dismiss” the extradition proceedings. It held that Skaftouros had not been “charged” with an offense under the extradition treaty with Greece because the warrant was invalid under Greek law and because the Greek statute of limitations had expired. The court held that the government bore the burden of proof on each of these issues and had failed to sustain it. It later denied the government’s motion for reconsideration; the government then appealed to the circuit, which reversed.

Extradition proceedings are not intended to serve as an adjudication of the defendant’s guilt or innocence, only to ensure that a valid extradition treaty exists, the crime charged is covered, and whether the evidence marshaled in support of the complaint for extradition is sufficient. Review is narrow, and the treaty obligations are liberally construed in the interests of international comity. Thus, the extradition judge should avoid making determinations of foreign law, including reviewing whether the demanding country has complied with its own law.

Here, the circuit identified one principal error in the district court’s treatment of the case - its allocation of the burden of proof to the government. This was a habeas proceeding, and thus Skaftouros bore the burden of proving by a preponderance of the evidence that he was being held contrary to law. This does not mean that the district court is a “rubber stamp,” however. It must take seriously the obligation to ensure that both the treaty and the applicable American statutes are complied with.

Here, had the district court properly allocated the burden of proof to Skaftrourous, it would have denied the writ. As to the validity of the warrant, all the treaty requires is a “duly authenticated warrant” sufficient to show that Skaftouros was “charged.” This requirement was satisfied, as there was a warrant for Skaftouros' arrest authenticated by the U.S. Ambassador to Greece. The district court went further, however, and required the government to show that the warrant was also technically valid as a matter of Greek law. This was error. The problems with the warrant that Skaftourous cited- that it did not contain the signature of the Clerk or a sufficiently detailed description of his face - were “technical,” and not a reason to block his extradition, even if they might entitle him to relief in Greece.

With respect to the statute of limitations, the treaty does not permit extradition where the “criminal is exempt form prosecution” due to “lapse of time.” Thus, it was proper for the district court to examine Greek law for the “limited purpose” of determining whether its statute of limitations had expired. But, had the court properly placed the burden of proof on Skaftouros, it would have concluded that the prosecution was not time barred.

The Greek statute of limitations is ordinarily twenty years, but can be extended for five years if the prosecutor shows that the defendant cannot be prosecuted, inter alia, because he is a fugitive. On the facts here, the five-year swing would have made a difference. The government established that the Greek authorities served the indictment on Skaftourous’ mother and that, since he was a fugitive, he did not appear to answer the charges. A Greek order was entered suspending the proceedings and noted the “legal service” of the indictment. This was sufficient to extend the statute under Greek law.

The district court accordingly erred in accepting Skaftouros’ assertion that the failure to obtain the original certificate of service of the indictment indicated a failure to show that the limitations period had been extended. He supported position this only with the “unsworn and unsupported assertion of his own lawyer in Greece.” This was insufficient to satisfy his burden of proving that the statute of limitations had not been extended.

Many Unhappy Returns

2012-01-14T17:23:00.002-05:00

United States v. Cadet, No. 10-4220-cr (2d Cir. December 20, 2011) (Miner, Cabranes, Wesley, CJJ)

An Eastern District jury convicted Joseph Cadet of 16 tax offenses based on his preparation of dozens of false tax returns for his "clients" between 2003 and 2006. Although the court affirmed his conviction - he challenged only the admission of Rule 404(b) evidence, a perennial loser in this circuit - it vacated and remanded the sentence due to a host of sentencing errors.

First, the district court imposed a 41-month prison sentence and a three-year term of supervised release on each of the 16 counts of conviction. But the statutory maximum term of imprisonment for each violation of 26 U.S.C. § 7206(2) was three years’ imprisonment to be followed by one year of supervised release.

The court also made several incorrect restitution rulings. First, the restitution order included losses sustained by New York City and State, but the district court did not make an “explicit finding” as to whether those entities were “proper victims entitled to restitution.” Second, the court erroneously failed to deduct from the restitution amount payments that the taxpayer-clients made to the IRS to settle outstanding tax assessments. And third, the district court erroneously included losses associated with an uncharged tax return.

"Vigor" Mortis

2012-01-14T17:05:00.002-05:00

United States v. Bourke, No. 09-4704-cr (2d Cir. December 14, 2011) (Pooler, Hall, CJJ)

Defendant Bourke was convicted of violating the Foreign Corrupt Practices Act, the Travel Act, and § 1001 atfer his involvement in a complex bribery scheme arising from the late 1990's privatization of Azerbaijan’s state-owned oil company, SOCAR. Although it noted that that Bourke “vigorously attack[ed]” his conviction, the circuit affirmed.

Bourke mounted several unsuccessful challenges to the jury instructions. First, the district court was not required to instruct the jury that it needed to agree unanimously on the specific overt act committed in furtherance of the conspiracy charge. The "jury did not need to agree on a single overt act to sustain a conspiracy conviction,” and the overt act “need not [even] be a crime.” Nor did the district court err in giving a conscious avoidance instruction - there was “ample evidence to support a conviction” on this theory, including Bourke’s awareness of the pervasiveness of corruption in Azerbaijan, the unsavory reputation of some of his confederates, and his creation of shell companies to shield himself from liability for bribery payments. In addition, the wording of the charge itself was correct, and did not allow the jury to convict Bourke based solely on negligence. Bourke also challenged the mens rea charge, but the charge was correct. It instructed the jury that, to convict, it must find that Bourke knew of the conspiracy’s object and that he intended for that object to be accomplished, and also correctly defined the mens rea elements of the object offenses. Finally, the court did not err in giving a separate “good faith” instruction, because it covered the concept elsewhere in the charge.

Bourke had no better success with his claims that the district court made erroneous evidentiary rulings. The court did not err in concluding that the testimony of a proposed defense witness was irrelevant; that witness had not participated in any of the relevant transactions. The court also did not violate the “rule of completeness” in admitting part of a written memorandum as one witness’ prior consistent statement. The omitted portions of the memorandum were irrelevant

PC World

2012-01-04T15:37:00.005-05:00

Several Interesting per curiams rounded out 2011:

In United States v. Steppello, No. 10-4527-cr (2d Cir. December 23, 2011) (Jacobs, Cabranes, Wesley, CJJ) (per curiam) the court reversed a Northern District order granting suppression of cocaine seized from the defendant’s person when arrested, and, later, from his home pursuant to a search warrant, and his post-arrest statements. The district court had found that the initial arrest of the defendant was not supported by probable cause, and that everything else was a tainted fruit. But the circuit found "significant errors” in the district court’s assessment of the evidence. First, it “failed to examine the totality of the circumstances, and instead, considered individual facts in isolation.” Second, the court “failed to evaluate the facts in light of the training and experience of the arresting agents.” The district court also erred in discounting the reliability of information provided by an otherwise untested informant and in so doing “employed an incorrect legal standard.” The informant was a participant in the crime, gave the information to the agents in person after they had caught him red-handed and hence “was motivated to be truthful to receive leniency.” His information was also “specific and corroborated.”

The circuit also, interestingly, remanded to a different judge. This judge had made nearly identical errors in an earlier case, which resulted in a published opinion reversing him. And yet, when the government pointed out that opinion in a motion to reconsider, the district court “denied the motion without comment.” These circumstances “might reasonably cause an objective observed to question” the judge’s “impartiality.”

In Rivera v. Cuomo, No. 10-221-pr (2d Cir. December 16, 2011) (McLaughlin, Pooler, Parker, CJJ) (per curiam), the court did a highly unusual about-face. Back in August, the same panel granted Rivera’s habeas corpus petition, holding that the district court, which denied relief, had erred in its application of New York State “depraved indifference” law, and that the evidence was legally insufficient. With this per curiam, on the state’s petition for rehearing, the panel “after much reflection,” changed its mind. A supervening Supreme Court case, Cavazos v. Smith, 132 S.Ct. 2, 5 (2011), stressed the federal courts’ obligation to defer to state courts and juries in habeas cases. Here, the panel, looking at the state court outcome with greater deference, concluded that the evidence, while “slim,” was sufficient.

United States v. Dugan, No. 10-4248-cr (2d Cir. December 5, 2011, Walker, Katzmann, Wesley, CJJ) (per curiam) rejected the defendants' claim that they were entitled to a jury trial for violating the Freedom of Access to Clinic Entrances Act, an offense with a maximum possible prison term of six months' imprisonment and a maximum fine of $10,000. The circuit held that the fine amount did not make this otherwise petty offense "serious" for the purposes of the Sixth Amendment right to a jury trial, even though it is possible that a very large maximum fine might implicate the Sixth Amendment.

United States v. Leon, No. 10-4090 (2d Cir. November 23, 2011) (Jacobs, Wesley, CJJ, Sullivan, DJ) (per curiam) closed an open question on an interesting, if infrequently occurring, supervised release question. On September 13, 1994, Congress enacted 18 U.S.C. § 3583(h), which expressly authorizes district courts to impose a new term of supervised release to follow the prison sentence imposed on a supervised release violation. For old-law cases, like this one, the authority to impose post-imprisonment supervised release on a supervised release violation is governed by Johnson v. United States, 529 U.S. 694 (2000). Johnson held that, while there is no statutory authority for a new term of post-imprisonment supervision in old-law cases, some supervised release can still be imposed because the remainder of the original term of supervised release survives its revocation. Here, despite the language of Johnson, the circuit upheld a post-imprisonment term of supervised release that was longer than the remainder of the original term. The court relied on the “clear import” of the old-law statute, which was to “deny credit with respect to the entire term of supervised release regardless of how the court allocates that term between imprisonment and supervised release.” It also relied on the one of “purposes of release on supervision,” which is to keep an eye on defendants who need supervision the most. To the circuit, a defendant who has violated the terms of his supervision clearly needs supervision: “no prisoner needs it more than one who has already tried it and failed.”

Making a Skilling in Albany

2011-11-20T13:16:00.002-05:00

United States v. Bruno, No. 10-1887-cr (2d Cir. November 16, 2011) (Parker, Chin, CJJ, Korman, DJ)

The story of Joe Bruno, former New York State Senate Majority Leader, is fairly well known. Having seemingly turned his position into a veritable cesspool of self-interested profiteering, he was ultimately convicted of two counts “honest services” fraud - the jury hung on a third, and acquitted him of several others. Consistent with the law at the time, however, the fraud was charged only as a failure to disclose various conflicts of interest.

While Bruno’s appeal was pending, the Supreme Court decided United States v. Skilling, 130 S.Ct. 2896 (2010), which held that the honest services statute criminalizes only fraudulent schemes that are effectuated through bribery or kickbacks. In light of Skilling, was inevitable that Bruno’s convictions would have to be tossed. The only real suspense was whether the Circuit would acquit him or permit the government to retry him. Under this decision, the government can reindict and retry Bruno on all three counts.

Bruno first asked the circuit to dismiss the indictment for failing to charge a crime, becauase it did not allege a fraud grounded on bribery or kickbacks. Since the government advised the court that it would seek a superseding indictment, the court dismissed the indictment without prejudice.

The remainder of the opinion is framed in double jeopardy terms, since Bruno argued that the evidence was legally insufficient. For Count Three, the one on which the jury hung, the court did not conduct a sufficiency review. There is ordinarily no double jeopardy bar to ordering a retrial on a hung count - Bruno did not allege any of the circumstances where this is not so - and this “analysis does not change even if the prosecution’s evidence was insufficient to support a conviction.” The court accordingly ordered a retrial on Count Three.

For the counts of conviction, the court approached things differently. Breaking with most other circuits, the court conducted a sufficiency review, rejecting the government’s argument that it would be unfair to do so since the putative insufficiency was caused by supervening change in the law. While there might be “in some cases sound reasons for refusing to consider the sufficiency of the evidence when there has been a subsequent change in the law, they do not apply here.” The government had indicated that, on retrial, its evidence would be the same, and that it presented at Bruno’s first trial all of the evidence that it had “regarding quid pro quo.” Thus, here, a sufficiency review would not “deny the government an opportunity to present its evidence.”

That said, however, the court found that a rational jury could find sufficient evidence of a quid pro quo on both counts. For the first, Count Four, a rational jury could conclude that Bruno: “performed virtually non-existent consulting work for substantial payments” for a company that did business with the state; received “sham” payments under the consulting agreement; attempted to cover up both the payments and the underlying relationships, and; “understood that the consulting payments were made in return for official action.”

For the last count, there was similarly sufficient evidence of a quid pro quo. There, one of Bruno’s cronies paid him $40,000 for a race horse that was worth a fraction of that amount. A rational jury could find that this “was an illegitimate gift disguised as a horse payment.” Moreover, Bruno failed to disclose the transaction, and a jury could conclude that the payment was “structured to pay for Bruno’s continued assistance” to the crony and his business.

Accordingly, the court permitted a retrial on both counts of conviction, in addition to the count on which the jury hung.

Bed Gub

2011-11-12T17:44:00.001-05:00

United States v. Simmons, No. 10-1526-cr (2d Cir. October 26, 2011) (Winter, Pooler, Parker, CJJ)

New York City police officers accompanied an individual to his apartment in the Bronx to retrieve his belongings. He was moving out because his roommate, defendant Simmons, had pulled a gun on him during an argument a few days earlier.

Inside the apartment, the officers found Simmons in his bedroom; the door was ajar, he was lying in bed and there was a “shiny object” next to him. Simmons got up and the officers pulled him out of the bedroom and into the hall. They asked him about his dispute with the roommate and the gun. Simmons told the officers the gun was in his bedroom and they went in, retrieved it, and arrested him.

The circuit found that the officers’ questions to Simmons about the gun were covered by the “public safety” exception to Miranda, but nevertheless, the majority held that the district court erred in finding that there were exigent circumstances supporting the seizure of the gun itself.

The court began with the “core premise” that a warrantless search of a home presumptively violates the Fourth Amendment particularly where, as here, the search occurs “in the middle of the night.” And the appellate court rejected the district court’s finding of exigent circumstances. “[T]he circumstances facing the officers at the time they searched the bedroom were not sufficiently exigent to fall within [that] narrow exception.”

Simmons had been completely secured by the time the officers searched his bedroom and one of the officers stood in the doorway, guarding the room and ensuring that Simmons could not reenter. Simmons was dressed only in his underwear, was very cooperative and, in any event, there were many other officers present. Thus, before conducting the search, the police had effectively allayed any safety concerns and neutralized any threat that Simmons or the gun might have posed. In doing so, they also eliminated the possibility of the destruction of evidence. And, finally, there was nothing to suggest that the officers feared the possible presence of a third person in Simmons’ bedroom.

Given this, it would not have been impracticable - or dangerous - to continue securing the location while the officers obtained a warrant. The circuit accordingly reversed the order denying suppression.

Judge Winter dissented. He would have found that there were exigent circumstances, since the officers were uncertain as to the gun’s exact location and there was thus a risk that Simmons “or an unknown third party might seek to grab the weapon.” Alternatively, Judge Winter would have found that Simmons consented to the search. His voluntary statement that there was a gun in his bedroom was, to him, “implied consent to the officer’s entering his bedroom and securing” the weapon.

Summary Summary

2011-11-12T17:11:00.003-05:00

Well, it’s taken months, but at last there are three summary orders worth noting. So, in reverse order, here they are:

United States v. Persing, no. 10-638-cr (2d Cir. August 26, 2011), concerned the district court’s admission of a loan-shark’s computer records. Those records revealed the extent of his business, and other evidence showed that the defendant intervened to try to have those same loans repaid. The government argued he was trying to take over the business, while the defendant argued that he was trying to protect the debtors from the loan-shark. In order for the records to be admissible as a co-conspirator’s declarations, the district court needed to find that there was a single conspiracy that included both the loan-shark and the defendant. The district court did not; in fact, most of its findings on the question, although kind of confusing, seemed to support the defendant’s theory. The circuit refused to assume that the court made the necessary finding and simply assess the sufficiency of support for it because, here, a finding that the conspiracy existed might well have been clearly erroneous. Given the uncertainty, the circuit sent the case back on a Jacobson remand so that the district court could make an explicit finding and explain the evidentiary support for it. It further directed that if the court found no conspiracy, it should vacate the affected counts.

In United States v. Baadhio, no. 09-2395-cr (2d Cir. September 22, 2011), the sentencing judge omitted from the written judgment its recommendation that the BOP designate the defendant to a medical facility. Even though the defendant had been released, the court found a live question. It entertained the argument on the ground that “the presence of such an instruction may well have an effect on [defendant’s] supervised release.” The appellate court ducked the question of whether such a recommendation was an appealable “final order” noting that, regardless, it was “free to send the case back” for the district court to “consider whether, given all the circumstances, ... it thinks it is appropriate to conform its written judgment to its oral pronouncement.” The court ordered a limited remand for that purpose.

In United States v. Roy, no. 10-1733-cr (2d Cir. November 8, 2011), the defendant was sentenced without counsel, but the district court failed to conduct proper Faretta inquiry. It merely confirmed that the defendant had filed a motion to fire his trial counsel, then proceeded to sentence him pro se. The circuit vacated the ensuing 300-month sentence and remanded for a Faretta inquiry and resentencing.

2B, Or Not 2B?

2011-10-30T12:42:00.003-04:00

United States v. Bahel, No. 08-3327 (2d Cir. October 26, 2011) (Pooler, Raggi, CJJ, Korman, DJ)

Sanjaya Bahel, a chief procurement officer at the United Nations, was convicted of honest services fraud and bribery offenses in connection with a kickback scheme in which he improperly steered lucrative U.N. procurement contracts to a friend, in exchange for money. This long opinion covers a lot of very fact-specific issues. This post focuses only on the sentencing claim.

Both U.S.S.G. § 2B1.1 and U.S.S.G. § 2C1.1 can apply to fraud convictions. The difference is that § 2C1.1 applies to specifically to “public officials” and carries a higher base offense level. The district court sentenced Bahel under § 2C1.1, over objection; on appeal, and the circuit rejected his claim that the court should have used § 2B1.1.

Under the relevant definition, which is to be “construed broadly,” Bahel was a “public official.” That he was employed at an international organization does not take him out of § 2C1.1. Indeed, the commentary to § 2B4.1 specifically indicates that that “officials” of, inter alia, “public international organizations” are covered by Chapter 2, Part C. And other guideline provisions support this analysis. For example, the commentary to § 2C1.1 defines “public official” to include anyone who is “in a position of public trust with official responsibility for carrying out a government program or policy.”

As Chief of Commodity Procurement, Bahel was clearly a “high ranking U.N. official” and not the “baggage porter” with a “ministerial job” that he compared himself to, in reliance on a 1921 Supreme Curt decision. Rather, Bahel’s position was “closer to that of a foreign diplomat, political party official, or a tribal leader, all of whom are expressly covered by” § 2C1.1, not § 2B1.1.

Family Matters

2011-10-30T12:23:00.003-04:00

United States v. Banki, N o. 10-3381-cr (2d Cir. October 24, 2011) (Cabranes, Pooler, Chin, CJJ)

Defendant Banki is an Iranian-born United States citizen. Starting in 2006, his family transferred about $3.4 million from Iran to the United States, all of which was effectuated through the “hawala” system. Banki’s hawala broker used a “matching” system to facilitate these transfers. When he knew that Banki’s family wanted to send money to the United States, he would find someone in the U.S. who wanted to send approximately the same amount to Iran. The U.S.-based contact would transfer into Banki’s account a sum comparable to the amount Banki’s family wished to send. Banki’s hawala broker would then pay an equivalent sum to the U.S.-based contact’s intended recipient, or broker, in Iran. Ultimately, Banki received some 56 hawala-related deposits.

Banki would typically email a family member to confirm receipt of each payment. Although most of his emails did not acknowledge a corresponding payout in Iran for each deposit, at least one such email - relating to a $6,000 payment in August of 2006 - displayed his knowledge that that particular sum of money was moving to Iran.

Banki’s financial activity came to OFAC’s attention in 2008 and, after receiving administrative subpoenas, Banki gave some spurious answers. He was ultimately charged, inter alia, with two counts of violating the Iranian Transaction Restrictions (the “ITR”). After a two-week jury trial, Banki was convicted of those counts, along with one count of operating an unlicensed money transmitting business and two counts of making false statements.

The circuit reversed the ITR convictions based on a flawed jury instruction. While the ITR have a service-export ban, at trial Banki argued that non-commercial remittances to Iran, specifically family remittances, were exempt. He sought a jury instruction to this effect, but the district court refused to give one. This, according to the circuit, was error.

The regulation at issue authorizes U.S. “depository institutions” to process transfers of funds to or from Iran, if the transfer “arises from an underlying transaction that is not prohibited by this part, such as a ... family remittance not related to a family-owned enterprise.” The government argued that this language permits such family remittances only if they are processed through a U.S. “depository institution.” But, to the circuit, the reg was “at a minimum” ambiguous.

Clearly, “family remittances” are “not prohibited” by the ITR. And, while this does not necessarily lead to the conclusion that they are permitted by the complete regulatory scheme, the language at issue “suggests that such actions do not contravene other applicable laws or regulations.”

And, more importantly, the government’s view - that only U.S. depository institutions are authorized to process the permitted transfers - is inconsistent with the language of the reg. A “fair reading” of the reg is that it tells U.S. depository institutions that they are permitted to process such remittances, but does not provide that they are the only entities that may do so. “Indeed, nothing in [the reg] specifically prohibits anyone from making a family remittance.”

Accordingly, after a lot of back-and-forth over the two sides’ competing views of the meaning - and purpose - of the reg, the court concluded that it was ambiguous. Interpreting it in Banki’s favor under the rule of lenity required that the two ITR counts be reversed.

The court also vacated Banki’s convictions relating to operating an unlicensed money transmitting business, again on a flawed jury charge. Banki wanted the district court to define a “money transmitting business” in a way that would make clear that it had to be an “enterprise” - not a “single transaction” - that was “conducted for a fee or profit.” Not only did the district court refuse, it actually told the jury that “a hawala is a money transmitting business.”

The charge as given was error. Banki’s requested instruction was “legally correct,” and there was a “foundation in the trial evidence” that the government proved Banki’s knowledge of money going to Iran in only a single transaction - the $6,000 transfer in August of 2006 - which the jury could have concluded was a one-time favor for a family friend. Moreover, the “hawala is a money transmitting business” charge compounded the error by “arguably reliev[ing] the government of its burden of proving that Banki’s knowledge that money was moving to Iran extended beyond the $6,000 transaction” and by suggesting that if it found that Banki participated in a hawala, “then he necessarily operated a money transmitting business.”

Between the Cracks

2011-10-30T11:27:00.003-04:00

United States v. Rivera, No. 10-1199 (2d Cir. October 21, 2011) (Katzmann, Chin, CJJ, Gleeson, DJ)

This interesting decision answers an unanswered question in the circuit’s jurisprudence on § 3582(c)(2) motions. The outcome is favorable for Mr. Rivera, but will likely not last. An amended version of U.S.S.G. § 1B1.10 goes into effect on November 1, 2011, that is, at least arguably, intended to render defendants in his situation ineligible for a sentence reduction.

Background

Convicted by a jury, Rivera faced a base offense level of 38 for trafficking in more than 1.5 kilograms of crack cocaine. There were no adjustments, so 38 was also his total offense level. He was in criminal history category IV, so his range would have been 324 to 415 months. But, he was a career offender. The highest offense level in the career offender table is 37, so the district court correctly “borrowed” the actual offense level of 38, and matched it to the career offender criminal history category of VI. This produced a range of 360 to life. The court then departed down from level 38 by 3 levels due to Rivera’s mental health; at level 35 and category VI, the range was 292 to 365. The court sentenced him to 292 months’ imprisonment.

Rivera moved pro se for a sentence reduction based on the 2007 retroactive reduction in the guidelines for crack cocaine offenses, but the district court appointed counsel for him. It then twice held that, as a career offender, Rivera was ineligible for a reduction. Here, the circuit reversed.

The Court’s View

Two circuit opinions serve as the background to this. In Martinez, see “PC World,” posted July 28, 2009, the court held that a defendant who received a career offender sentence was ineligible for a sentence reduction under § 3582(c)(2) and § 1B1.10, because his sentencing range “remains unaltered by the crack cocaine amendments.” In that situation, the sentence was not “based on” a range that the Sentencing Commission has subsequently lowered. On the other hand, in McGee, see “Crack a Smile,” posted January 25, 2009, the court held that, where the district court departs from the career offender range to the range provided by the offense guidelines, the defendant is eligible because the sentence is “explicitly based on the range produced by the offense guideline.”

This case is unlike either of those, between the cracks, as it were. Rivera received neither a career offender sentence nor a sentence within the original, non-career offender range. Rather, in his case, the court departed by three levels from the career offender range due to Rivera’s mental health, and the resulting sentence was below, not within, the original offense guideline range.

The court's view of the case turned on a fine analysis of the relevant provisions - § 3582's requirement that the original sentence be “based on” a range that has subsequently been lowered, and § 1B1.10's requirement that a defendant is only eligible if his “applicable guideline range” has been lowered. The court held that the two phrases should be understood to mean the same thing - “the range the initial sentence was ‘based on’ within the meaning of the statute is also generally the range that was ‘applicable’ within the meaning of the guideline.”

And, with that, the court had to decide which range Rivera’s sentence was “based on” - “that is, what was his ‘applicable’ sentencing range?” Was it the career offender range of 360 to life - or was it the departure range of 292-265?

The career offender guideline range would not change under the retroactive amendment - the offense level would drop from 38 (that was the crack quantity, which was higher than the career offender level of 37) to 37 (because applying the amendment to Rivera’s 3.3 kilograms of crack would reduce it to 36, so the career offender level would apply), but both 37 and 38 produce a range of 360 to life at CHC VI.

But, if his sentence was “based on” the range to which the court departed, he would be eligible for a reduction of up to 30 months. Under this scenario, the the starting point would have been level 37, and a departure to 34 would produce a range of 262 to 327. And this is the scenario that the majority went with: “We hold Rivera’s sentence was ‘based on’ the range produced by subtracting three offense levels from the career offender computation. The resulting range was the one the sentencing judge found to be ‘applicable’ to Rivera, and he chose a sentence at the low end of that range. That range is lowered when the retroactive amendment at issue is plugged into its calculation, even if everything else remains the same. Rivera is therefore eligible for a reduction.”

In the end, the circuit followed the reasoning of McGee, rejecting the government’s view that the sentence should be considered “based on” the pre-departure career offender range. Here, as in McGee, the court concluded that it would be excessively formalistic to conclude that the “applicable” range was the one rejected by the sentencing court. The court also found support for this methodology in the Supreme Court’s recent decision in Freeman, in which the plurality held that a court should “isolate whatever marginal effect the since-rejected Guideline had on the defendant’s sentence” and “revisit a prior sentence to whatever extent the sentencing range in question was a relevant part of the analytic framework the judge used to determine the sentence.” Here, that “marginal effect” is “easily isolated” as the 30-month difference between 262 and 292.

Finally, the court reinforced its view that its role in construing retroactive guideline amendments is so as to “allow inequalities to be fixed.” Accordingly, the court “let[s] lenity play a role in the construction of the Guidelines where there is doubt about their scope.” "Where the sentencing judge departs from a range computed under the career offender guideline to a lower range, the sentence imposed was ‘based on’ the latter range” under both § 3582(c)(2) and § 1B1.10. “If a subsequently-lowered guideline range was a relevant part of the analytic framework the judge used to determine the sentence ... a § 3582(c)(2) proceeding [should] be available to allow the sentencing court the opportunity to remedy an injustice.”

The opinion with a long rejection of the approach of other circuits, which have construed the phrase “applicable guideline range” in career offender cases to be limited to the career offender range, regardless of the range within which the defendant is sentenced. To the Second Circuit, that phrase should be construed differently in the context of § 1B1.10 cases, where the question becomes not what the original range was, but what range the sentencing court actually applied, “even if, as in this case, that range different from the one that was the starting point of the initial sentencing proceeding.” Thus, “[n]ow that Rivera seeks a modification of his sentence, the 292-365 month range to which his sentencing judge departed is his applicable range.”

The court closes with an acknowledgment that the November 1, 2011, version of § 1B1.10 will “dramatically alter” this “landscape,” because it will codify a construction of “applicable guideline range” that the court “refuse[s] to give the existing guideline,” and will limit it it to the “pre-departure range from the initial sentencing.” Recognizing that this change would “render Rivera himself ineligible for a sentence reduction if it were applied to his case,” the court held that it could not “fairly be applied retroactively to Rivera” on remand.

Judge Katzmann wrote a concurring opinion, in which he agreed with both the majority’s outcome and its reasoning. But Judge Katzmann would rely more heavily on the rule of lenity. To him, the relationship between § 3582(c)(2)’s “based on a sentencing range that has subsequently been lowered” and § 1B1.10's “applicable guideline range” is a “close and difficult question.” In McGee, the court resolved that question in the defendant’s favor under the rule of lenity, and to Judge Katzmann, McGee requires the same outcome here. The “ambiguity described in McGee does not disappear merely because Rivera’s departure falls under Chapter Five of the Guidelines Manual and was based on his diminished mental condition,” as opposed to the Chapter 4 departure at issue in McGee.

Thorn, Again

2011-10-22T10:32:00.002-04:00

United States v. Thorn, No. 11-37-cr (2d Cir. October 20, 2011) (Jacobs, Sack, Raggi, CJJ)

This is Joseph Thorn’s third time in the circuit. Thorn ran an upstate asbestos removal company; he performed dangerous, substandard work, and used the money he earned to grow the business. In 2000, a Northern District jury convicted him of money laundering and environmental crimes, and the district court sentenced him to 65 months’ imprisonment. On the government’s appeal, the circuit vacated the sentence - the guidelines were mandatory then - and on remand the district court downwardly departed to 168 months from what it thought was a 235-month guideline minimum. The government appealed and won again. By this time the guidelines were advisory, however, so while the guideline minimum was now up to 292 months, the district court sentenced Thorn to 144 months.

Three years later, Thorn filed a 2255 motion, seeking to vacate his money laundering conviction as legally insufficient under United States v. Santos, 553 U.S. 507 (2008), which held that the term “proceeds” in the money laundering statute means “net profits,” and not “gross receipts.” The district court granted the motion, vacated the money laundering count, and resentenced Thorn to 132 months on the remaining counts.

On this, the government’s third appeal, the circuit reversed, agreeing that the Santos claim was procedurally barred because Thorn did not raise it on direct appeal, and no exception to procedural default applied.

While Thorn’s direct appeal argued that the money laundering conviction was legally insufficient, he challenged only the “intent to promote” element, not the “proceeds” element. And he could not establish cause and prejudice to excuse the default. Thorn argued that the “proceeds” theory was “so novel that its legal basis [was] not reasonably available to counsel” at the time. But the circuit disagreed. The futility test is strict - it asks not whether it would have been difficult to raise an issue but whether the claim was “available at all.” It was. By the time of Thorn’s direct appeal, several attorneys had argued for a narrow construction of the term “proceeds,” and the question was open in the Second Circuit. Even if it is true that the circuit would likely have rejected the claim had Thorn pursued it, he still could not establish cause - a defendant does not establish cause by showing “simply that a claim was unacceptable to that particular court at that particular time.” Accordingly, since Thorn did not establish cause, the circuit skipped the question of prejudice.

Thorn argued alternatively that he was actually innocent, which can also excuse a procedural default. But actual innocence means “factual innocence,” not mere legal insufficiency. Thorn had to demonstrate that “in light of all of the evidence,” it is “more likely than not that no reasonable juror would have convicted him.” Here, even assuming that Santos would have required proof that Thorn laundered only the profits, and not merely the receipts, of his fraudulent asbestos abatement scheme, he could not meet this standard. The trial evidence clearly established that Thorn’s company used money realized from existing abatement jobs to finance new projects, and the realized monies included profits.

With this, the court vacated the amended judgment and 132-month sentence, and ordered the court to reinstate the money laundering conviction and the 144-month sentence it had previously imposed.

PC World

2011-10-10T13:44:00.002-04:00

There have been two interesting per curiams in the past couple of weeks.

Sometimes immigration law and criminal law intersect. They did in Prus v. Holder, No. 10-599-ag (2d Cir. September 28, 2011) (Calabresi, Wesley, Lynch, CJJ). Here, the court held that the New York offense of promoting prostitution in the third degree under Penal Law §§ 20.00 and 230.35 is not an aggravated felony. The term "prostitution" is not defined in the aggravated felony statute. But, under the immigration statute rendering aliens who enter the United States to engage in prostitution inadmissible, prostitution is defined as "promiscuous sexual intercourse for hire." Since identical words in different parts of the same act are construed to have the same meaning, the same definition should be used in the ag-fel section. But the New York offense of promoting prostitution encompasses a definition of "prostitution" - it includes "sexual conduct" - that is clearly broader. Since the New York offense includes acts other than the "specific act of sexual intercourse," it is not an aggravated felony.

United States v. Leslie, No. 10-2994-cr (2d Cir. October 3, 2011) (Calabresi, Wesley, Lynch, CJJ) (per curiam) rejected the argument that a defendant's incarceration, standing alone, should be treated as a withdrawal from the conspiracy for sentencing purposes. Leslie was the architect of a bank fraud scheme that capitalized on a flaw in the People's Bank ATM system. He not only devised the scheme, he also taught others how to do it. Leslie started serving a four-year state bank fraud sentence in 2005, but during his incarceration others continued the scheme. In 2009, Leslie was transferred to federal custody and pled guilty to the same scheme. The total loss was more than $300,000, but Leslie argued that he was only responsible for the losses incurred until his July 1, 2005, incarceration, although he admitted that he had taken no affirmative steps to withdraw from the conspiracy, such as cooperating with law enforcement or telling his co-conspirators that he had abandoned it. While the circuit agreed that incarceration could be some evidence of withdrawal, the defendant had the burden of showing something more, even for sentencing purposes. "The defendant's imprisonment is but one factor to consider in deciding whether withdrawal occurred."

A Bridge To FARC

2011-10-10T13:33:00.002-04:00

United States v. al Kassar, No. 09-1051-cr (2d Cir. September 21, 2011) (Jacobs, Hall, CJJ, Scheindlin, DJ)

Defendants were convicted of various terrorism offenses in connection with a sting operation in which a CI, who was working for the DEA, introduced al Kassar to two undercover DEA agents posing as members of FARC, the left-wing Colombian guerrilla group. The defendants agreed to supply FARC with weapons, including surface to air missiles (“SAM”s) to use against United States military personnel and equipment in Colombia.

All of the criminal conduct occurred outside of the United States - mostly in Lebanon, Spain, Bulgaria and Romania. The district court denied the defendants’ motions to dismiss the indictment on jurisdictional grounds, and in this opinion, the circuit affirmed.

There is a presumption that acts of Congress do not apply extraterritorially, but even if the statute is not explicit, an intent can be inferred from the nature of the offense. Here, four of the five statutes of conviction contain explicit provisions applying them extraterritorially. The fifth, conspiracy to kill U.S. officers of employees under 18 U.S.C. §§ 1114, 1117 does not, but the nature of the offense - “protecting U.S. personnel from harm when acting in their official capacity” - implies an intent that it apply outside of the United States.

Even so, due process limits the extraterritorial reach of federal statutes. “There must be a sufficient nexus between the defendant and the United States, so that such application would not be arbitrary or fundamentally unfair.” For non-citizens acting entirely abroad, a jurisdictional nexus exists when the “aim of that activity is to cause harm inside the United States or to U.S. citizens or interests.”

Here, the nexus existed because the defendants’ stated aim was to “sell arms to FARC with the understanding that they would be used to kill Americans and destroy U.S. property.” Nor did it matter here that this case involved a sting operation taking place entirely outside of the United States and involving only foreign citizens. Since the goal of activity was to harm U.S. citizens or interests, or threaten the security or government functions of the United States, there is a sufficient jurisdictional nexus. And the goal alone is enough. It does not matter that the defendants never came close to harming any U.S. interest. Jurisdiction is determined by the “aims of the conspiracy, not its effects.”

The circuit also rejected the defendants’ “fair warning” argument. “Fair warning does not require that the defendants understand that they would be subject to criminal prosecution in the United States, so long as they would reasonably understand that their conduct was criminal and would subject them to prosecution somewhere.”

Finally, the circuit rejected the defendants’ claim of “manufactured jurisdiction.” Manufactured jurisdiction is a collection of three distinct defense theories: outrageous government conduct, entrapment, and a failure by the prosecution to prove an essential element of the crime.

None of those theories applies here. As to outrageous government conduct - also raised as an independent appellate claim - the DEA’s pervasive involvement in the weapons deal did not violate due process. There was no coercion, intimidation or physical force by the DEA agents. And the absence of a conspiracy prior to the government’s involvement merely shows that the government created the “opportunity for illegal conduct.” The tactics used were neither coercive nor outrageous - they were simply the “commonplace and often necessary tactics for infiltrating criminal enterprises.” Thus, while this was an “elaborate and prolonged” sting operation, “nothing done was outrageous or a shock to the conscience.”

Nor were the defendant’s entrapped “as a matter of law,” since they clearly had a predisposition. They already knew how to procure and smuggle arms, and reacted positively to the idea that the arms would be used to kill Americans.

Finally, the “unproved-element” theory is satisfied if the government “supplies an essential element of a crime”; “in effect,” the government has failed to prove it. But even if the government “initiates” an element of the crime, jurisdiction is not manufactured where the defendant “takes voluntary actions that implicate” it.” Here, every element of the crimes of conviction was established by voluntary action by the defendants. And the DEA agents did not create the jurisdictional nexus by “injecting the notion that the weapons were going to FARC for use against Americans.” That the DEA agents “lied to the defendants” does not make the nexus artificial or invalid.

Aliens vs. Predator

2011-10-08T10:39:00.002-04:00

United States v. Archer, No. 10-4684-cr (2d Cir. September 20, 2011) (Newman, Calabresi, Hall, CJJ)

Thomas Archer, a solo-practitioner immigration lawyer in Queens, ran a visa fraud mill. His specialty was the I-687, an amnesty program that permitted certain aliens who were here illegally in the 1980's to adjust their status and receive a visa. In 2004 and 2005, Archer filed nearly 240 I-687 applications; the DHS denied them all.

Convicted of visa fraud and conspiracy to commit visa fraud, his appeal concerned both trial issues - centered around his claim that he did know know that his assistants were filing forms with false information - and sentencing issues. The circuit affirmed Archer’s conviction, but remanded for resentencing and recalculation of the restitution.

The Trial Issues

At trial, an immigration agent who had reviewed 175 I-687 applications that Archer’s office filed, testified that almost all of them had certain suspicious factual allegations in common. That said, however, only three clients actually testified about the preparation of their fraudulent I-687's, and the government entered only four applications into evidence. The aliens' stories had much in common: their I-687 applications contained information that they knew was false; Archer or his staff gave them supporting affidavits for others to sign that were already filled in, and; Archer’s office told them to abandon the application process once they had received temporary work permits, but before their interview.

Archer’s principal trial defense was that he was unaware of the fraudulent actions of his staff. To this end, he requested two jury instructions. First he sought a “Philips” instruction that “the fact that a defendant is a solo practitioner, without more, is an insufficient basis from which to infer his guilt because, even though he is the only lawyer in the office, he may not be aware of everything his staff is doing.” He also sought a “Maniego” instruction that “attorneys are not held to a higher duty to investigate than non-lawyers and have no special obligation to verify independently information give to them by clients.” The district court rejected these requests and instead gave a fairly generic “knowingly” charge that simply told the jurors to consider whether Archer knew that the visa applications contained false statements but nevertheless presented them.

The circuit affirmed. Although it agreed that both the Philips and the Maniego instructions contain legally sound principles, here the instruction that the court gave was accurate and “left no room for the jury to convict Archer if it believed that he merely ran an office from which fraudulent documents were filed.”

The Sentencing Issues

The circuit found fault with the district court’s findings on two sentencing enhancements and its restitution order.

First, based solely on the agent’s statistical review of the 175 I-687 applications, the court enhanced Archer’s guideline range by nine-levels for creating 100 or more fraudulent documents, even though only the government admitted only four applications at trial. The circuit found that this statistical review failed the Shonubi “specific evidence” test. The principal problem was that the government “presented no evidence that the four applications proven false at trial were ... a representative slice of the 175 applications” that the agent reviewed because the government did not “randomly select[]” them; they were the applications associated with particular witnesses that the government chose to call and, most likely, “the most egregious cases.”

In addition, even though there was a suspicious statistical similarity among the applications reviewed, there was no “baseline” - evidence of what the national pool of I-687's, most of them likely filed by honest lawyers, actually looked like. Finally, the government did not explain why the similarities among Archer’s I-687 applications were “in themselves incriminating.” The only facts at issue were dates of entry and of travel and those facts were not “so peculiar” or “obvious” “that no further explanation is needed.”

The second sentencing error concerned the obstruction of justice enhancement. The district court imposed it because Archer texted a former employee, Singh, asking him whether he was going to be a government witness. When Archer concluded that the answer was “yes,” he texted Singh again, this time calling him a “Pussy.” According to the PSR, Singh felt “very threatened” by those messages.

Here, there was no direct and obvious threat; Archer’s statements to Singh were ambiguous. Where this occurs, the circuit usually defers to the district court’s findings on the speaker’s meaning and intent, but here the district court made none. And a “reasonable reading” of the messages would not support a finding of intent sufficient to support the enhancement. To the circuit, the “most obvious” reading of the texts was that Archer wished to know whether Singh would testify against him, and was displeased to learn that he would. Thus, even though Archer called Singh an “unpleasant name” and Singh was, subjectively, “afraid,” it was error to impose the obstruction enhancement.

The district court also erred in imposing restitution to 234 of Archer’s former clients - the total was more than $300,000 - because there was insufficient evidence that all of the clients were “victims” under the MVRA. The clients were only “victims” if Archer’s conspiracy to commit visa fraud caused their losses. This turns not so much on whether the aliens had “clean hands” but on whether their losses arose from the visa fraud or from an uncharged consumer fraud - Archer’s effort to cheat them of their money. After all, a person can commit visa fraud without accepting any money from the applicants.

If Archer’s clients though they were buying his honest legal services, then they may well have been victims of the visa fraud conspiracy. But, if they knew they were buying the “cover that his law practice gave to their false visa applications” then the visa fraud was not the proximate cause of their loss. There are some cases where it will be clear that no reasonable person would have given the defendant money if he had known of his plan. In those cases, a generalized description of the fraud is enough to support restitution. But, where it is “plausible that some individuals would have paid the defendant even if they had been informed of his fraudulent plan, then the government must proffer some individualized evidence to meet its burden of showing that each alleged ‘victim’ was actually a victim.”

This case is in that latter category. At least some of the aliens clearly knew that their visa applications contained falsehoods, but went along with the process anyway. In addition, filing a “false but plausible I-687 application was anything but a sure loser.” While the application was pending, the alien obtained a temporary work permit, and there was always the possibility, however, small the applicant would receive a visa. Given the resulting lack of certainty as to which clients were victims, the court remanded for recalculation of the restitution order.

Procedures on Remand

This decision has a particularly interesting discussion of the procedures that the district court is to undertake on remand. For sentencing issues, the “consensus” among the other circuits is “where the government knew of its obligation to present evidence and failed to do so, it may not enter new evidence on remand” unless the “government’s burden was unclear,” the “trial court prohibited discussion of the issue,” or the “evidence was, for a good reason, unavailable.”

The circuit “join[ed] that consensus” - sort of - but it still punted. It did not resolve the issue other than to remand for resentencing with instructions that the district court “consider in the first instance whether the justifications ... for allowing the government to present new evidence on remand exist in this case.” If the court allows no new evidence, it should recalculate Archer’s sentencing range without the 100-or-more-documents and obstruction enhancements. It if chooses to consider new evidence it should recalculate the range based on its findings with respect to that evidence and impose a sentence based on this and, of course, all of the other § 3553(a) factors.

For the restitution problem, there is yet another twist to the remand. To satisfy its burden, the government will have to show that each fee-paying client “did not know of the fraud and would not have paid a fee had” he known. Since the government has to “prove two negatives,” “some refinement in the proper allocation” of the evidentiary burdens is necessary.

Ordinarily, according go the circuit, “where the prosecution’s burden of proof would require it to prove a negative and the facts at issue are more readily ascertainable by the defendant,” the defendant assumes a burden of producing “at least a triable issue as to the fact at issue,” after which the prosecution assumes the burden of persuasion. That is the “appropriate” allocation of burdens here. Archer is “more likely than the government to ascertain whether a client knew of the fraud or would have paid a fee even if the client had known of the fraud,” since this knowledge would have come from Archer himself or someone in the firms.

Since the district court did not follow this program in the first instance, on remand, the court will have to reconsider which of Archer’s clients is entitled to restitution. The court will also have to consider whether to allow new evidence, as discussed above. But on the restitution question, the lack of clarity on the parties’ respective burdens “would seem to favor allowing additional evidence on the issue.” Even if there is no new evidence, however, the parties are “free to make new arguments based on the evidence already in the record.”

Comment

Mr. Archer now faces something of a dilemma. On remand, each client that he alleges knew what was going on - and hence is not a “victim” for restitution purposes - will add one at least more admittedly fraudulent document to the potential offense level enhancement. Will he stop at ninety-nine to keep his offense level lower, and make restitution to the others? Or will he go all the way, and claim that none of his clients were "victims?" In other words, which will he choose - money or freedom?

No Need to Remand Me

2011-10-05T14:21:00.001-04:00

United States v. Elbert, No. 10-72-cr (2d Cir. September 19, 2011)(Jacobs, Cabranes, CJJ, Kravitz, DJ)

A recent anomaly in circuit practice has been its treatment of cases where the district court did not provide a written statement of reasons for the sentence that complies with 18 U.S.C. § 3553(c)(2). In cases where appellate counsel files a merits brief, counsel can waive a remand for a statement of reasons. But, where counsel files an Anders brief, under United States v. Hall, 499 F.3d 152 (2d Cir. 2007), failure to provide a statement of reasons always necessitates a remand.

Until now. This decision abrogates Hall to the “limited extent that it uniformly require remand in these circumstances.” Hall was based on the court’s understanding that the statement of reasons “assists” the BOP and the Sentencing Commission “in the collection of data.” While that is “no doubt for the good,” its effect is to require appellate counsel to seek a remand when “a remand would be of no benefit for the client” or “the court.” All Hall does is “set[] the lawyer to work for the” BOP and the Commission, and “doing a futile job of it in any event.” Thus, the bright line rule of Hall “may undermine, rather than serve, the goals of vigorous representation” that underlie the Anders brief procedures.

In a case where the absence of a written statement could benefit the client, counsel can seek a remand. But a bright line rule is not necessary to effectuate this, particularly since there might be situations where a remand for a written statement of reasons would be “detrimental to a defendant,” such as where the statement would memorialize the defendant’s cooperation or other information he would not want disseminated. “Requiring a defendant’s lawyer to elicit such information goes against the grain of advocacy.”

Even in the context of an Anders brief, then, counsel should “make an independent judgment as to whether deficiencies in a written statement of reasons present a non-frivolous appellate issue.”

Re: Joinder

2011-10-04T15:16:00.002-04:00

United States v. Page, No. 10-3150-cr (2d Cir. September 16, 2011) (Walker, Hall, Chin, CJJ)

Defendant was tried on five drug counts and a felon-in-possession count. In the district court, he moved to sever the gun count so that the jury considering the drug charges would not learn that he had a felony conviction. The court denied the motion and the circuit, finding no prejudice, affirmed.

Background

In 2007 and 2008, Page was selling drugs - first crack, then heroin - in Norwich, Connecticut. During this time, he became involved in an altercation outside a bar, and brandished a gun; to avoid trouble, he stashed the gun at his girlfriend’s apartment. Agents raided the apartment the next day and found the gun and some drugs.

Page ultimately faced a six-count indictment; the first five counts alleged drug offenses - although the government ultimately dropped one of these - and count six charged the felon-in-possession. The district court refused to sever count six, noting that Page’s stipulation to the felony conviction did not describe its underlying facts, and that there would be a limiting instruction. These together assured a lack of undue prejudice. Page was convicted, and received a 210-month sentence.

The Circuit’s Decision

On appeal, Page argued that the gun count should have been severed, or at least bifurcated, from the others, citing United States v. Jones, 16 F.3d 487 (2d Cir. 1994). But the circuit found no abuse of discretion, particularly given the heavy burden of establishing prejudice by an allegedly improper joinder.

First, there was a “sufficient logical connection” between the drug counts and the gun count. The gun was recovered along with some of the drugs and Page admitted that both were his. For this reason, separate trials would have required “much of the same evidence.” Evidence of the presence of the drugs in his girlfriend’s apartment would have been probative of his knowing possession of the gun, while conversely, at a separate drug trial, evidence of the gun would have been admissible as a “tool of the trade.”

In addition, the district court took adequate measures to avoid prejudice. The stipulation was bare-bones and the limiting instruction was adequate, even though it did not specifically charge that the prior conviction could not be considered in relation to the narcotics counts.

Finally, there was overwhelming evidence against Page - his own confession and the testimony of the girlfriend.

The court also distinguished Jones on its facts. There, the felon-in-possession count appeared only in a superseding indictment after the jury deadlocked 10 to 2 for acquittal in a bank robbery case. Although the court reversed the bank robbery conviction because the felon-in-possession should have been severed, it did so because it looked to the court like the government had added the count only to “buttress its case” on the robbery. There was also a “retroactive misjoinder” problem with respect to a second felon-in-possession charge. But, since neither of those “unique circumstances” was present here, the district court did not abuse its discretion in refusing to follow Jones.

Jones does not stand for the proposition that a felon-in-possession count must always be severed or bifurcated from other charges. Where “there is a logical connection between” them, a “similarity in the evidence necessary to prove the different charges,” the trial court takes steps to limit the prejudice and gives a proper limiting instruction, and there is no unfair prejudice, it is not an abuse of discretion to refuse to sever or bifurcate. If, on the other had, the district court concludes that a bifurcation would “better protect the defendant from prejudice than a limiting instruction would” it is free to do so.

Tipper Gored

2011-09-11T11:47:00.001-04:00

United States v. Gansman, No. 10–0731-cr (2d Cir. September 9, 2011) (Cabranes, Chin, CJJ, Keenan, DJ)

From 2005 to 2007, James Gansman, an attorney at Ernst and Young, was having an affair with one Donna Murdoch. Perhaps as part of their “pillow talk,” Gansman - the “tipper” - would pass Murdoch material, non-public information, on which Murdoch - the “tippee” - traded profitably. Gansman was ultimately prosecuted for securities fraud under the “misappropriation” theory - as described by the Supreme Court, this occurs when a defendant misappropriates confidential information for securities trading purposes, in breach of a duty owed to the source of the information.Liability can attach even if the defendant does not trade on it himself.

Gansman, whose defense was that he did not intend to commit securities fraud, sought a jury instruction under SEC Rule 10b5-2, asking the court to instruct that Gansman shared information with Murdoch as part of a relationship of trust and confidence in which they had a pattern of sharing personal confidences - the aforementioned “pillow talk” - such that Gansman reasonably expected that Murdoch would keep the confidences to herself and not trade on them.

The district court gave a version of the charge that was only slightly different in wording contained in Gansman’s request. The court instructed that Gansman contended that he did not provide Murdoch with insider information with the understanding that she would use it to buy and sell securities, because he shared the information with her as part of a relationship in which they shared work and personal confidences.

Both sides took issue with this in the circuit. Gansman complained that the district court should have used his own wording, but the circuit held that the charge adequately conveyed his theory of defense - many facts in the record contradicted that theory, however - and that the charge was not error.

More importantly, the court rejected the government’s argument that the charge should not have been given at all. In prosecuting a “tipper” under the misappropriation theory of insider trading, the government must prove as an element of the offense that the tipper conveyed material non-public information to his “tippee” with the understanding that it would be used for securities trading. Otherwise, at least where the tippee owes a duty of trust or confidence to the tipper, and the tipper conveys confidential information without intending that the tippee trade on it, only the tippee is liable on a misappropriation theory. And here, it was “perfectly appropriate” for Gansman to defend against the charge by arguing that his relationship with Murdoch exemplified those circumstances. Indeed, there have been cases where a tipper was not liable even though the tippee was. If the jury here had agreed with this theory - it did not, of course, - Gansman would have been acquitted.

Porn Free

2011-09-11T10:53:00.002-04:00

United States v. Aumais, No. 10-3160-cr (2d Cir. September 8, 2011) (Jacobs, Winter, McLaughlin, CJJ)

In this interesting opinion, the court weighs in on a subject of national controversy: whether a defendant convicted of possessing or receiving child pornography should be ordered to pay restitution to those depicted in the images. On the facts here the court, largely bucking the national trend, concluded that restitution was not appropriate.

This case involves images of a woman who uses the pseudonym Amy. Her uncle abused her for years when she was a child; he photographed the abuse and the images made their way to the internet. The uncle went to prison, but the images are still widely circulated. The effects of this on Amy have been devastating, and far transcend the harm caused by the abuse itself. She is so fearful of being identified in public from one of the images that she can barely function, and faces years of therapy to help her cope. Her restitution claim totals about $3.3 million, and she seeks to collect it from every person convicted of possessing one of her images.

The defendant here pled guilty to possessing a large collection of child pornography, including pictures of Amy. The district court, after a lengthy hearing in which a therapist who evaluated Amy testified, ordered more than $48,000 in restitution. But the circuit reversed.

To get there, the court first had to engage in some statutory interpretation and, in doing so, the court deepened an existing circuit split.

Title 18 U.S.C. § 2559, the restitution statute for victims of sex crimes involving children, provides for mandatory restitution of a victim’s full losses, and enumerates a number of specific costs, such as medical and psychiatric treatment, rehabilitation, and associated transportation costs. The last subsection on the list, § 2559(b)(3)(F), covers “any other losses suffered by the victim as a proximate result of the offense.” Most circuits have held that this proximate causation requirement applies to those losses enumerated in subsections that precede § (b)(3)(F). But one, the Fifth Circuit, has held that the proximate causation requirement is limited to the “catch-all” subsection. In that circuit, any causation is sufficient to trigger restitution under the others.

The circuit here joined the majority, holding that “under § 2559, a victim’s losses must be proximately caused by the defendant’s offense.” Proximate cause is a “deeply rooted principle in both tort and criminal law” that Congress did not intend to “abrogate when it drafted § 2259.”

Here, the district likewise held that proximate causation was required, and went on to hold that the standard was met. But the circuit disagreed. Amy had no direct contact with Aumais, or even know of his existence. Her victim impact statement did not mention him and, since she was evaluated before Aumais was even arrested, the doctor could not speak to the impact that Aumais caused her. Thus, “in the absence of evidence linking Aumais’ possession to any loss suffered by Amy,” his conduct was not a proximate cause those losses.

The court also noted, in dicta, the “baffling and intractable issue that this case would otherwise present in terms of damages and joint and several liability.” The district court held that Amy’s harm was the result of both the uncle’s abuse and others’ possession of the images and that the resulting counseling costs could not be separated. But, if her future counseling costs are partly the result of her uncle’s abuse, then “Aumais cannot be responsible for all of those losses,” even though § 2259 requires full restitution. Moreover, a restitution award to Amy would “raise issues as to joint and several liability.” Amy has sought restitution in hundreds of cases. In a 2010 case, her attorney estimated that she had received $170,000 in payments. But, since the law prohibits recovery of more than the victim’s actual losses the need for national monitoring to police this “would pose significant practical difficulties.” There does not even seem to be be a government body that would be responsible for, or even able to, track “payments that may involve defendants in numerous jurisdictions across the country.”

That said, however, the court did not intend to “categorically foreclose payment of restitution to victims of child pornography from a defendant who possesses their pornographic images. But, where the victim impact statement and the psychological evaluation were drafted before the defendant was even arrested “or might as well have been,” emphasis added, “as a matter of law,” the defendant’s possession of the victim’s image was not a proximate cause of the victim’s loss.

Big Brother Listens To Big Sister

2011-08-28T11:45:00.003-04:00

United States v. Rodriguez, No. 10-2724-cr (2d Cir. August 25, 2011) (Miner, McLaughlin, Pooler, CJJ)

While detained at the MDC, Rodriguez called his sister and asked her to tell their brother to contact Rodriguez’ attorney so that they could discuss whether he should “cop out” before being indicted. He indicated that the sooner he spoke with his attorney the better, and that they should tell the lawyer to tell the prosecutor that he wanted to plead guilty to the “five-to-40" drug charge in the complaint.

The district court found that the call was not covered by the attorney-client privilege because Rodriguez knew that the BOP was recording it. It allowed the government to play the recording at Rodriguez’ trial, and the circuit affirmed.

First, the court had to decide on a standard of review. Whether the attorney-client privilege applies is reviewed de novo, while a finding that it has been waived is reviewed for abuse of discretion. Even though the district court seemed to look at the issue one of application, on appeal Rodriguez framed the issue as one of waiver. Accepting this, and noting that the question “involves the application of the attorney-client privilege as our case law has already developed it to the novel set of facts before us” and did not “require us to address the scope of the privilege itself in a novel way,” the court reviewed only for abuse of discretion.

Here, it found none. “[O]n the basis of the undisputed fact that Rodriguez was aware that his conversation was being recorded by BOP, Rodriguez’s disclosure to his sister of his desire to engage in plea discussions with his attorney was not made in confidence and thus constituted a waiver of the privilege.” Rodriguez did not claim that he had no way to reach out to his attorney directly, and under BOP regulations, that call would not have been monitored. Accordingly, he could “just as easily” have contacted his attorney directly to discuss his options in confidence.

Rodriguez’ second argument was based on Fed. R. Evid. 410, which privileges statements made in the course of plea discussions. The court made short work of this, noting that the rule only covers discussions with “an attorney for the prosecuting authority.” While the district court did not rule on this issue, the circuit found the inapplicability of Rule 410 to a conversation with one’s sister to be so clear that it did not remand for a ruling.

Comment

This is a disturbing precedent, not because it seems incorrect, but because of its policy implications.

On the government’s part, it seems fairly short sighted to use conversations like this against defendants at trial, since the practice might deter incarcerated defendants from taking whatever steps are in their limited power to resolve the case quickly. Any action of the government that might chill the speedy resolution of criminal cases through plea negotiations would seem to be inadvisable.

On the court’s part, the decision seems to take very little account of the difficulties of prison life. Inmates at the MDC have limited mobility, restricted funds, irregular access to telephones and a limited number of “minutes” per month. Even though Rodriguez did not claim that these obstacles restricted his ability to contact his counsel directly, they most likely - at least to some degree - informed his choice to seek to contact counsel through a family member.

Have Guns, Will Travel

2011-08-28T11:16:00.002-04:00

United States v. Nadirashvili, No. 08-4211-cr (2c Cir. August 23, 2011) (Winter, Pooler, Hall, CJJ)

Six-defendant appellants appealed their convictions in a wide-ranging firearms conspiracy that had both international and domestic components. One part of the activity involved trafficking in “foreign defense articles” - here, grenades, warheads, missiles and launchers, amongst other things - under 22 U.S.C. 2278(b), and the other part involved domestic firearms trafficking under 18 U.S.C. § 922(a)(1)(A). Apart from one sentencing glitch, the circuit affirmed.

The opinion contains two interesting discussions of statutory requirements that the criminal activity involve those who are “in the business” of weapons dealing.

First, two defendants argued that there was insufficient evidence to support their § 922(a)(1)(A) convictions because they were aware of only a single gun transaction, and the evidence did not show that they knew the seller was engaged in the business of trafficking in firearms. The court agreed that the statute requires proof of “more than just a single sale of weapons,” since the statute uses the phrase “engaged in the business” of dealing in firearms and defines this as involving their “repetitive purchase and resale.” But the evidence is sufficient under this section where a seller holds himself out as a source of firearms who is ready to procure them for his customers. The evidence supported this, albeit barely, since while “[p]erhaps not every rational trier of fact would” convict on the evidence here, at least some might, and that was enough.

Next, the court considered - and rejected - an “as applied” vagueness challenge to 22 U.S.C. 2278(b)(1)(A)(ii), which covers “engag[ing] in the business of brokering activities with respect to ... any defense article.” Brokering includes any action that “facilities the manufacture, export, or import of a defense article.” While the court suggested that there might be “ambiguity at the outer reaches” of this definition - perhaps merely providing information about prices and availability might be problematic - here the challenge failed, since the defendant’s activities clearly fell within its intended scope.

Finally, the court agreed that, for one defendant, the district court used the wrong evidentiary standard for certain sentencing enhancements. The court applied a preponderance standard but, this case was governed by the conspiracy guideline, § 2X1.1(a). This section provides that for a conspiracy that is not covered by a specific offense guideline, the court should apply the base offense level from the guideline for the substantive offense, plus any adjustments from that guideline for “any intended offense conduct that can be established with reasonable certainty.” Since the offense level adjustments in guideline section 2K2.1(b) “make no mention of a conspiracy,” the court should have applied the “reasonable certainty” standard instead of the preponderance standard.

Gone To Pot

2011-08-28T10:37:00.002-04:00

United States v. Celaj, No. 10-2792-cr (2d Cir. August 22, 2011)(Miner, Cabranes, Straub, CJJ)

Din Celaj headed a crew that would rob - or try to rob - drug dealers. When successful, they would obtain drugs, which they would themselves sell, money and firearms.

He went to trial on several Hobbs Act robbery and associated 924(c) counts, was convicted, and received a 601-month sentence. On appeal, he made a sufficiency claim as to the jurisdictional element of the Hobbs Act counts where the goal was to steal marijuana. He did so despite entering into a stipulation at trial that “marijuana is grown outside of the state of New York and travels in interstate and foreign commerce to arrive in the New York City area.” The circuit affirmed.

The court began by surveying the area. In Parkes, see "Government Has No Evidence; Court Deems It Sufficient," posted September 23, 2007, the court found the evidence sufficient even though there was no specific evidence about the origin of the marijuana that was stolen, where there was evidence that the object of the robbery was a “small but going” marijuana enterprise, the theft netted several bags of marijuana and $4,000 in cash, and an expert testified that marijuana is typically trucked in through Mexico and very little is grown in New York. By contrast, in Needham, see "Reefer Gladness," posted May 23, 2010, the court found the evidence - which was limited to the amount of money obtained - insufficient since there was no proof that the marijuana sold by the robbery victims had either originated or been sold out of state.

“Guided by” these cases, the court concluded that the evidence here “achieve[d] the same effect as the evidence offered in Parkes,” which was sufficient. There, the “key evidence” was the expert testimony. Here, the stipulation conveyed “the same information about the interstate nature of the marijuana trade.” And, unlike Neeham, there was more evidence than just drug money, because Celaj had made statements that he was in the business of stealing marijuana and selling it.

PC World

2011-08-27T18:44:00.002-04:00

United States v. Echeverry, No. 10-2828-cr (2d Cir. August 19, 2011) (Winter, Parker, Chin, CJJ) (per curiam)

The facts of this latest per curiam could have been pulled straight from a law school exam. During an ongoing narcotics conspiracy, Echeverry and his accomplice attempted to recover stolen narcotics from a third person; they possessed and brandished a gun but, during the incident, the intended victim grabbed it and discharged it, wounding the accomplice.

The issue was whether Echeverry should get the seven-year brandishing § 924(c) sentence or the ten-year discharge § 924(c) sentence. The district court gave him the longer sentence, holding that if a defendant possesses a firearm during a drug-trafficking offense he is responsible for a subsequent discharge of that firearm, no matter who fires it.

The circuit affirmed. The statute provides that the enhanced sentence applies “if the firearm is discharged,” and “does not require that the firearm be discharged by the defendant.” In addition, the recent Supreme Court case, Dean v. United States, which held that the discharge enhancement applied when the gun went off accidentally, controls. The use of the passive voice in the statute indicates that the statute focuses “on an event that occurs without respect to any specific actor.” Thus, a defendant “need not directly cause a discharge to be subject to the firearm-discharge enhancement.”

Crew Bayou

2011-08-27T11:59:00.002-04:00

United States v. Marino, 09-1965-cr (2d Cir. August 18, 2011) (Jacobs, Winter, McLaughlin, CJJ)

Matthew Marino was at the margin of the Bayou Hedge Fund Group disaster - a Ponzi scheme that defrauded its investors of more than $300 million. The fund was opened in 1996 by two principals, who hired Marino’s CPA brother, Daniel Marino, to keep its books. This defendant, Matthew Marino, was hired by Bayou in 2002 and over the next three years took steps to help perpetuate and conceal the fraud. The scheme came crashing down in 2005, and the principals, including Marino’s brother, all pled guilty to fraud charges.

Appellant Marino, on his part, pled to one count of misprision of felony, covering his actions between January and August of 2005, a period during which investors lost $60 million in the Bayou scheme. He received a twenty-one month prison sentence. This appeal concerns only his challenge to the $60 million restitution order. In this very long decision - the slip opinion runs to nearly thirty-two pages - the circuit rejects Marino’s claim that he was not the “direct and proximate” cause of that loss.

The restitution statute that the court applied to Marino, 18 U.S.C. § 3663A, defines a “victim” as “any person directly and proximately harmed as a result of” the commission of the offense. According to the circuit’s review of the legislative history, Congress included this causation standard as a way of avoiding complex restitution litigation that might unduly prolong the sentencing proceedings.

Applying this standard here, the circuit concluded that Marino’s actions constituted both direct and proximate causation.

Marino’s knew of, failed to report, and helped conceal the Bayou fraud during 2005. Had Marino disclosed the fraud, no investor would have injected fresh cash into the scheme. Accordingly, his crime was a “cause in fact” - a direct, “but for” cause - of those losses. And it was not merely “speculative” for the circuit to assume that the losses would have ceased if Marino had reported the fraud. An insider-whistleblower is much more likely to be “taken seriously by enforcement officials.”

As for proximate causation, under the circuit’s “zone of risk” approach - thanks again, Mrs. Palsgraf - his actions were “clearly the proximate cause” of the victims’ losses, even if his actions were not like the “wantonly fraudulent” conduct of the Bayou principals. His role in the losses was significant, since he vouched for the accuracy of the fund’s books to the Bayou investors. It therefore does not matter that Marino’s actions were “less serious” than those of the principals. During the period of his criminal activity, his acts remained “essential to” the “criminal scheme.”

Tamper Proof

2011-08-27T10:26:00.002-04:00

United States v. Simels, No. 09-5117-cr (2d Cir. August 12, 2011) (Newman, Calabresi, Hall, CJJ)

Former defense attorney Robert Simels appealed his conviction, after a jury trial, of various counts relating to a witness-tampering scheme, and his fourteen-year sentence. The circuit dismissed two minor counts as insufficient but otherwise affirmed.

The case arose from Simels’ representation of one Shaheed Khan, a Guyanese narcotics trafficker, who was detained at the MCC. The case against Simels had three main components. First, he lied to prison officials in an effort to speak to another prisoner, David Clarke, whom he believed to be a witness against Khan, by saying he was Clarke’s attorney. Second, an associate of Khan’s, Selwyn Vaughn, had several conversations with Simels, in which Simels discussed bribing and threatening potential witnesses against Khan. Vaughn had approached the DEA when he learned that Simels was reaching out to him, and wore a wire during these discussions. Third, the government recorded conversations between Simels and Khan in an attorney-client visiting room at the MCC.

Khan ultimately pled guilty and, in doing so, waived any claim that the government violated the Fourth, Fifth and Sixth Amendments in investigating him. He also also waived his work-product and attorney-client privilege claims with respect to the investigation of Simels.

Simels raised a number of significant issues on appeal about the way the evidence against him was gathered, but the circuit affirmed.

Evidentiary Issues

Simels' first argument was based on the Sixth Amendment. The court agreed that the use of an informant to meet with him and discuss his defense of Khan “potentially raise[d] serious issues concerning the Sixth Amendment rights of the lawyer’s client and other issues arising from intrusion into the attorney-client relationship.”

Simels asserted third-party standing over Khan’s Sixth Amendment rights. But the court, having identified the importance of the standing question, did not really resolve it. The court held that the “law is unclear” on the point, but would “assume that Simels can assert a Sixth Amendment right on behalf of his client” for the purposes of his own appeal.

As to the merits of the Sixth Amendment claim, the opinion is similarly inconclusive. It wonders whether investigators who believe that an attorney is attempting to obstruct justice in the course of representing a client “are constitutionally required to have a reasonable basis for their suspicion of possible obstruction before sending an informant to contact the lawyer,” but stops short of holding that the requirement exists. Instead, it concludes only that “the existence of such a basis adequately allays any concern that the attorney-client relationship has been improperly invaded.”

And here, the district court’s finding that the DEA had reasonable basis was adequate. It relied on Simel’s deception so that he could meet with Clarke, and Vaughn’s initial report to the DEA that he believed that Khan and Simels wanted to recruit him to assist in intimidating Clarke and others.

Simels also raised an interesting wiretap issue. The district court had held that the government obtained the recordings of Simels and Khan at the MCC in violation of Title III and suppressed them. But the court allowed the government to use the recordings to impeach Simel on cross-examination. The circuit again affirmed. Although 18 U.S.C. § 2515 provides that illegally obtained wire communications may not be “received in evidence in any trial,” Title III was not meant to provide more protection than the Fourth Amendment, and it has long been recognized that evidence obtained in violation of the Fourth Amendment can be used for impeachment purposes.

Sufficiency Issues

The circuit had no trouble finding that there was sufficient evidence to support the bulk of the counts of conviction - the attempted obstruction of various individual witnesses - but agreed that two counts relating to the importation and possession of certain electronic surveillance devices had to be tossed. The evidence established that the devices were inoperable, and the circuit concluded that the statute - 18 U.S.C. 2512 - which covers devices “which can be used to intercept” communications, excludes inoperable equipment. But, since Simels received time served and no supervised release on these counts, and since there was no “prejudicial spillover" affecting the other counts, all that was necessary was a limited remand for the entry of a corrected judgment reflecting the dismissal of these counts.

Sentencing Issues

Of Simels’ three sentencing claims, one stands out. He received a fourteen-year sentence and, at his request, the judge recommended that he be housed at the camp at FCI Otisville. At the time of sentencing, the judge was unaware that the BOP will not designate a prisoner to a camp, absent a BOP waiver, if the defendant is sentenced to more than ten years’ imprisonment. The judge only learned this after Simels was sentenced. Even so, for reasons unexplained, “the sentence was not imposed under a misunderstanding of facts that would impair the validity of the sentence.”

Ex-Facto Knife

2011-08-27T10:13:00.002-04:00

United States v. Riggi, No. 09-4391-cr (2d Cir. August 10, 2011) (Jacobs, Wesley, Chin, CJJ)

Philip Abramo’s case has been running for several years. He was originally convicted after trial of murder and racketeering charges, and received a life sentence. But the circuit reversed, finding that the admission of eight of his co-conspirators’ plea allocutions violated Crawford. See The Three Racketeers, posted September 6, 2008. On remand, Abramo pled guilty to reduced charges, carrying an eighteen-year statutory maximum. His plea agreement used the 2008 guideline manual, under which his range exceeded eighteen years, making eighteen years his guideline sentence. It also contained an appeal waiver, under which Abramo agreed not to challenge any sentence of eighteen years or less.

At sentencing, Abramo pointed out a potential ex post facto violation. The Commission increased significantly the guidelines for murder conspiracy in 1990, but the conspiracy to which he pled guilty ended in 1989. Under the 1989 guidelines, the sentencing range was 78 to 97 months. Nevertheless, the district court, looking to the nature of Abramo’s conduct, imposed an eighteen-year sentence.

On appeal, the circuit enforced the waiver and dismissed the appeal. The court agreed that the “violation of a fundamental right warrants voiding an appeal waiver” and reviewed the kinds of issues that trigger this. It also noted, however, that “other meaningful errors are insufficient” to void the waiver. The “decisive considerations dividing these cases appear to be the nature of the right at issue and whether the sentence was reached in a manner that the plea agreement did not anticipate.”

Here, “neither consideration” warranted voiding Abramo’s appeal waiver. While there is dicta in a 1997 case, Rosa, suggesting that an ex post facto violation might cause the court to set aside a waiver, even there the court enforced the waiver. Moreover, there was nothing about the sentence itself that warranted voiding the waiver. The judge was not biased, did not “abdicate his judicial responsibility,” and imposed the sentence that was contemplated by three separate provisions of the plea agreement.

Finally, the court rejected Abramo’s claim that, since he was unaware of his ex post facto rights, his “contract” - the plea agreement - was void as based on a mutual mistake of fact. The court ducked this, suggesting instead that it might be better “subsumed by a claim based on ineffective assistance of counsel. ” Such a claim can “survive an appeal waiver where the claim concerns the advice the defendant received from counsel.”

Custody Battle

2011-08-21T15:33:00.002-04:00

United Stateds v. FNU LNU, No. 10-419-cr (2d Cir. August 9, 2011)
(Jacobs, Calabresi, Lohier, CJJ)

Defendant, traveling under the name Sandra Calzada, arrived at JFK on a flight from the DR. A border patrol agent noticed that Calzada had an open arrest warrant, and flagged her for secondary inspection. An “armed guard” escorted her to the secondary inspection room, from which she was not free to leave, and the agent questioned her for 90 minutes without first reading the Miranda warnings.

The interrogation included questions about her pedigree, passport and the like. Eventually, the agent found some discrepancies: she did not look like the photograph on the original passport application, gave inconsistent biographic information, and could not recall any of her addresses in Puerto Rico, where she said she was born.

The district court refused to suppress the statements, holding that Miranda warnings were not required during a “routine border crossing inquiry” and because the questioning was not interrogation. The agent’s “function or intent” was to determine the defendant’s true identity.

The circuit affirmed, albeit on different grounds. The majority squarely rejected the notion that routine border questioning could never be “custodial interrogation” requiring Miranda warnings. While there is a Fourth Amendment exception for routine border searches, there is “no similar exception to Miranda’s prophylactic requirement under the Fifth Amendment.” The circuit has long held that where a “stop” was permissible under the Fourth Amendment is “irrelevant to the Miranda analysis.”

The question thus remains, for Miranda purposes, whether the suspect was “in custody.” The standard is whether “a reasonable person in the suspect's position would have understood herself to be subjected to restraints comparable to those associated with a formal arrest.” This is a very fact-bound determination requiring close consideration of the circumstances surrounding the encounter with the authorities - the interrogation’s duration, its location, whether the suspect volunteered for the interview, whether the officers used restraints, whether weapons were present or drawn, where the officers told the suspect she was free to leave or under suspicion, and a juvenile suspect's age. A “reasonable person’s expectations about how the questioning is likely to unfold are also relevant.” This last consideration is important at borders, since a reasonable traveler will “expect some constraints as well as questions and follow-up,” without considering himself to be under arrest.

Here, the court identified “several” facts to suggest that the interrogation was custodial - “it took place in a closed room, out of public view; armed guards escorted the defendant there and remained in the vicinity; it lasted for 90 minutes ... [and the agent] took the defendant’s fingerprints and did not inform her she was free to go. On the other hand, “the officers never drew their weapons, no physical restraints were used; and, crucially, a reasonable person would recognize that the questions being asked were “par for the course of entering the country from abroad.”

That said, after seventeen pages of reasoning, here is the court’s entire analysis - a single sentence: “In light of the totality of these circumstances, we conclude that a reasonable person in the defendant’s position would not have considered what occurred to be the equivalent of a formal arrest.”

Conviction affirmed.

Chief Judge Jacobs concurred in result, but did not sign on. He thought this case was too easy, and did not “remotely” merit a “tour d’horizon of Miranda law” or “pages of tendentious analysis in which useful precedents of this Circuit are deconstructed.” To the chief, the majority opinion “unnecessarily complicates what should be a straightforward holding.” Miranda warnings are simply not required in a routine secondary inspection when a reasonable person would consider the questions asked to be relevant to an admissibility or customs determination.

Reversal of Fortune

2011-08-21T14:28:00.002-04:00

United States v. Plugh, No. 10-2815-cr (2d Cir. August 8, 2011) (Jacobs, Livingston, CJJ, Rakoff, DJ)

This about-face arises from a supervening Supreme Court decision.

In its original opinion in this case, a divided panel held that the defendant had successfully invoked his Miranda rights by declining to sign a waiver-of-rights form. See “Car, Men, Miranda,” posted July 31, 2009. The circuit affirmed, on a government appeal, suppression of the defendant’s statements, viewing the case as an application of Davis v. United States, 512 U.S. 452 (1994), which held that a suspect must “unambiguously” invoke his Miranda rights to cut off questioning.

But a 2010 case, Berghuis v. Thompkins, 130 S. Ct. 2250 (2010), held that the Davis “unambiguous” standard should control not just the “cut-off,” but also the initial invocation of the rights. There, Court found that the suspect’s refusal to sign was not an “unambiguous” invocation of his rights.

Viewing this as an “intervening change in the law” that “compels a different outcome” on the facts of the case, the court “reconsidered the district court’s order of suppression” and vacated it.

Rowe, Rowe, Rowe, You’re Toast

2011-08-14T13:18:00.002-04:00

United States v Jackson, No. 07-0263-cr (2d Cir. August 4, 2011)
Leval, Lynch, CJJ, Korman, DJ)

Appellant Derrick Rowe, charged with a drug-related murder, had three trials. At the first, he was convicted of only drug trafficking and possession of ammunition, but the jury hung on three other counts - murder, § 924(c) and § 924(j). The court sentenced him to 32 years. At the second, the jury hung on all of the remaining counts. At the third, Rowe was convicted of the three open counts and received a 45-year concurrent sentence.

On appeal, his primary claim was that, at the third trial, the district court erred in allowing the government to play portions of his some of his prison phone calls without allowing him to play other portions under the Fed. R. Evid. 106 “rule of completeness.” The circuit found no abuse of discretion. In he first conversation, Rowe instructed a third party to tell a potential witness, named Battle, to keep quiet. But the portion he wanted to play, in which he said he was “not mad at” Battle would not have affected the jury’s “complete and proper understanding of the portion played by the government.”

In the other conversation, the government played a portion of a conversation with Battle's mother that reflected Rowe’s anxiety that the Battle had been arrested. Rowe wanted the court to play portions of the conversation that showed other reasons why Rowe might have been agitated but, again, the court found no abuse of discretion in precluding them.

Rowe also pursued a double jeopardy claim, arguing that the drug trafficking offense of which he was convicted at the first trial was a lesser included offense of the murder charge that the first jury hung on, and of which he was not convicted until the third trial. The court punted on whether this claim was legally correct, instead holding that it did not matter. Given the hung juries, for double jeopardy purposes, the second and third trials “are properly seen as continuations of the initial trial, and did not expose Rowe to double jeopardy.” Nor was there an Ashe v. Swenson-type collateral estoppel problem, since Rowe was not acquitted of the drug trafficking charge.

What’s In A “Same”?

2011-08-14T13:00:00.002-04:00

United States v. Feldman, No. 10-2275-CR (2d Cir. August 1, 2011) (McLaughlin, Pooler, Sack, CJJ)

Defendant Feldman sought appellate review of four sentencing enhancements. The government argued that the court should not review them because the district court had indicated that it would impose “the same sentence” even without some of the errors. The circuit rejected this argument, reviewed the claims, found no error, and affirmed.

Background

The facts of the case are particularly unpleasant. Feldman was a psychiatrist who, in the 1990's, operated mental health facilities in Florida. These facilities proved to be Medicare/Medicaid fraud mills and, just as Feldman was negotiating a plea agreement, he fled to the Philippines.

There, he set up an even more egregious scheme. Through a website called www.liver4you.org, he fraudulently offered kidney and liver transplants in the Philippines. Desperate patients and their families wired him tens of thousands of dollars and traveled to the Philippines, but did not receive what they were promised. Eventually, Feldman was deported from the Philippines and prosecuted in the Northern District of New York, the locus of the bank accounts to which the victims wired their money. In NDNY, he was sentenced on both the transplant case and the Florida conduct. With enhancements, the district court found that the rage was 151 to 188 months, and sentenced Feldman at the top.

During the hearing, the court noted that “even if some of my rulings ... are inaccurate, there is no question that I still would give the same sentence I am about to give.” Citing this, the government argued in the circuit that the court “should decline to consider Feldman’s claims of procedural error at sentencing.”

The Circuit’s Decision

While noting that a guideline error can be harmless if “it could not have supported any lesser sentence,” the court held that the district court’s “same sentence” statement did not moot Feldman’s claims of error. The key, according to the circuit is ambiguity. Unless there is “unambiguous indication to the contrary,” the court will not assume that a sentence will be the same absent a guideline error. The court did not think that the district court’s “same sentence” statement was unambiguous because it referred only to “some” of the challenged enhancements “without stating which enhancement - or which combination of enhancements - would not affect Feldman’s sentence.”

While this disposed of the matter, the court went on to discuss the policy considerations. Given the importance of the guideline range to the selection of the sentence, the court “cannot lightly assume that eliminating enhancements from the guidelines calculation would not affect the sentence.” The court will be “especially wary of making such an assumption” where the appellate claims would have a dramatic effect on the sentence. Here, for example, if Feldman had prevailed on all of his arguments the range would have been 63 to 78 months, less than half of the range calculated by the district court.

Finally, the court noted that district courts “generally should not try to answer the hypothetical question of whether or not it definitely would impose the same sentence on remand if this Court found particular enhancements erroneous.” Criminal sentences cannot and should not be “exempted from procedural review with the use of a simple incantation.”

That said, however, the court found no merit to any of Feldman’s appellate claims. Those claims - objections to characterizing his website as mass marketing, the loss amount, the risk of death enhancement and obstruction of justice - tread no new ground, and the court’s resolution of them is not summarized here.

Insurance [Snow] Job

2011-08-13T12:50:00.003-04:00

United States v. Ferguson, No. 08-6211-cr (2d Cir. August 1, 2011) (Jacobs, Kearse, Straub, CJJ)

For 3Q of 2000, the insurer AIG’s stock price dropped significantly, even though its earnings were satisfactory. The company concluded that the cause was a $59 million decline in its loss reserves - a measure of the company’s risk exposure.

In the true spirit of 21st Century American business ingenuity - the same, it seems, that caused the company to all but collapse entirely, and require a $90 billion government bailout, in 2008 - AIG, or at least some of its principals, decided that the best course would be - rather than actually increasing its loss reserves and satisfying its stockholders - to engage in an accounting fraud. The company accordingly entered into a sham reinsurance contract with General Re. The deal was structured to look - to AIG’s investors and auditors - like it was causing an increase in its loss reserves, but did not actually transfer any risk to General Re, which is, ordinarily, the sine qua non of a reinsurance contract. So shady was the deal that, while AIG booked the transaction - this opinion calls it the Loss Portfolio Transfer, or LPT - as a reinsurance contract (it had to, since that was its ostensible purpose) General Re booked it as a deposit.

Five defendants - four from General Re and one from AIG - were convicted after a jury trial of conspiracy, mail and securities fraud, and making false statements to the SEC. Although the circuit rejected a number of claims - including conscious avoidance, insufficiency, severance claims, evidentiary errors and prosecutorial misconduct - it found that two significant trial errors - one evidentiary and one in the jury charge - warranted a new trial.

The Evidentiary Error

Materiality was an element of “most of the charged offenses.” The government had to prove a “substantial likelihood” that the LPT misstatements “would be important to a reasonable investor.” And the government could have done so in legitimate ways, such as expert testimony on the LPT’s effect on AIG's stock price. Instead, the district court permitted the government to show this in an unfairly prejudicial way.

AIG’s stock price declined by twelve percent in 2005, once the nature of the LPT’s impropriety was publicly revealed in a series of new articles. While the district court excluded as overly prejudicial a chart graphing this decline as a line, it permitted the government to use a “functionally identical” chart in its opening, and also allowed the government to introduce bar charts showing single-day stock prices for the days following each article’s publication. These charts were “prejudicial” because there were several other problems affecting AIG’s stock price at the time; unrelated allegations of bid-rigging, self-dealing, earnings manipulation “and more,” which had been redacted from the articles.

Thus, the defendants faced a dilemma: they either had to allow the jury to attribute the full stock drop to the LPT, or accept the introduction of evidence of how thoroughly corrupt the company had become. To avoid this, the defendants offered to stipulate to materiality, but the government refused.

The circuit strongly suggested that the government should have been forced - Old Chief-style - to accept the stipulation. With no stipulation, the government not only got the benefit of an inflated sense of the effect of the LPT transaction on AIG’s stock, it “exploite[d] it [in summation] to emphasize the losses caused by the transaction.”

Since the charts suggested - without foundation - that the LPT was the sole cause of the twelve per cent “plummet” in the value of AIG’s stock, they should not have been admitted.

The Jury Instruction

The court also found reversible error in the district court’s “willfully caused” jury instruction. Willful causation is a theory of culpability akin to aiding and abetting, set out in 18 U.S.C. § 2(b). Under this section a defendant commits an offense if he “willfully causes an act to be done which if directly performed by him or another would be an offense.” Here, largely misled by the requests to charge, the district court structured the § 2(b) part of its jury instruction as a series of questions that omitted entirely the concept of causation. Instead, the jury was instructed to consider only whether each defendant acted knowingly, willfully and with the intent to defraud, and whether he intended that the crime would actually be committed by others.

The circuit found plain error, since the government “argued for guilt on a causation theory.” In addition, willful causation was a “likely theory of liability,” since the AIG accountants who actually filed the false LPT forms were not named as co-conspirators. A new trial was therefore warranted because it was “improbable, let alone absolutely certain, that the jury based its verdict on a properly instructed ground.”

Point of Controversy

2011-08-13T12:07:00.003-04:00

United States v. Lee, No. 10-493-cr (2d Cir. July 26, 2011) (Parker, Chin, CJJ, Korman, DJ)

For the many years, the third acceptance of responsibility point - although to be completely faithful to guideline lingo, it is a “level,” not a “point,” since “points” are for criminal history - was something of a given. As long as the defendant either confessed early on or pled guilty timely, the reduction was granted. Effective November 1, 2003, however, the Commission amended the language of this adjustment, guideline section 3E1.1(b), to require a government motion for the third point. The amended section indicates that such a motion should state “that the defendant has assisted authorities in the investigation or prosecution of his own misconduct by timely notifying authorities of his intention to enter a plea of guilty, thereby permitting the government to avoid preparing for trial and permitting the government and the court to allocate their resources efficiently.” This amendment was the result of a congressional directive in the PROTECT Act, and the Commission justified it on the theory that only the government knew whether its resources had truly been conserved.

There has been surprisingly little third-point litigation in the ensuing years. But this case resolves an important question about the adjustment over which there is a circuit split.

Defendant Lee pled guilty to a four-count drug indictment without much fanfare. He later objected to several facts contained in the PSR,and the district court scheduled a Fatico hearing. On the eve of the hearing, the defendant withdrew all but one of the objections, and a pared down hearing went forward on that single objection, which the court resolved in the government’s favor. At sentencing, the government refused to move for the third acceptance point, over Lee’s objection, and the district court refuse to compel it. The court imposed a very long, but bottom-of-the-range sentence based on the range resulting from a two-level adjustment.

On appeal, the circuit reversed. While a government motion is a “necessary prerequisite” to the third point, circuit precedent has indicated a district court can still grant the point if the government’s refusal is based on an unconstitutional motive or a plea agreement leaves it to the government’s discretion and the government acts in bad faith.

Here, since there was no plea agreement, only the first option was available, but the circuit found that it was met, although the court seemingly identified an alternative reason for granting the point: the government’s reason for not making the motion was based on an “unlawful” - although perhaps not unconstitutional - reason: the refusal was not permitted by the guideline itself, which addresses only avoiding preparing for “trial.” While Lee put the government to its burden at a Fatico hearing, he undisputedly pled guilty early on and “spared the government from ‘preparing for trial.’” Thus, under the “plain language” of the guideline, “the government’s refusal” was “not justified.” The court also noted that the commentary to § 3E1.1 - which is binding - likewise limits the determination to whether the government has saved resources by avoiding preparing for trial.

Finally, and most interestingly - see comments below - the court also held that a defendant has a “due process right to reasonably contest errors in the PSR that affect his sentence” - and that “a defendant should not be punished for doing so.” If there is a “good faith dispute” as to a material fact in the PSR, “the defendant’s request that the dispute be resolved is not a permissible reason for the government to refuse to make the § 3E1.1(b) motion, even if resolution of the dispute requires an evidentiary hearing. “The court, not the government, imposes sentence, and the court is entitled to a full and accurate record - as are the parties.”

Comment

There are several interesting issues raised by this opinion. First, it forces consideration of the oddity of the whole acceptance of responsibility scheme at all. A sentence is supposed to be consistent with the goals of sentencing set forth in § 3553(a)(2), and none of those goals seem to have anything at all to do with whether the government - or the court, for that matter - was inconvenienced by the need to prepare for, or even conduct, a trial.

A second important point is this: since the inception of the guidelines, the circuit has held to the fiction that institutionalizing lower sentences for defendants who plead guilty does not “punish” going to trial, which would be unconstitutional, it “rewards” pleading guilty, which is not. What’s the difference? None, of course, or at least none that can be articulated. And this decision clearly implodes that whole line of reasoning, since it expressly holds that denying a defendant the third point for contesting a material sentencing fact - or at least doing so in “good faith” - “punishes” him for doing so. This decision should accordingly open the door to a similar argument that a defendant who goes to trial with a “good faith” claim that he should be acquitted is entitled to all three acceptance of responsibility points.

Finally, a close look at the rationale of the amended third point language reveals yet another oddity. The stated purpose of the amendment is to help conserve the resources of both the government and the court. While it is true that the government knows best whether it has expended resources, it is not in a better position than the court itself to know whether the court was inconvenienced by an untimely plea. Accordingly, the guideline should permit the court to impose the third point on its own if it concludes that no significant judicial resources were consumed by an untimely plea of guilty.

Trace Amounts

2011-08-07T09:56:00.001-04:00

United States v. Gonzalez, 10-2202-cr (2d Cir. July 22, 2011) (Kearse, Miner, Chin, CJJ)

Former state senator Efrain Gonzalez, Jr., pled guilty to various fraud-related charges in connection with two sham charities that he set up while in office. This opinion contains an interesting discussion of the concept of “tracing” criminal proceeds. In it, the court concludes that tracing is not required to determine the number of victims under § 2B1.1, but is required, to some degree at least, to calculate the actual loss for restitution purposes.

The case arose from the actions of two supposed charities, West Bronx Neighborhood Association (WBNA) and United Latin American Foundation (ULAF). Each received both public money and private donations, and each - although supposed to be engaged in charitable activities - instead spent most of its money enriching Gonzalez by paying his personal bills - and those of some of his cronies - and funding a lavish lifestyle.

Gonzalez ultimately pled guilty to mail fraud, federal-program fraud, wire fraud and conspiracy. He later tried, unsuccessfully, to take the plea back - the circuit’s rejection of that issue, while very long, is straightforward and is not summarized here - and ultimately received a below-guideline 84-month sentence and restitution.

In challenging the length of his prison sentence, Gonzalez argued that the district court erred in concluding that the offense involved 50 or more victims under § 2B1.1(b)(2)(B). He claimed that, although more than 50 individuals donated money to WBNA, the government had not traced back the misappropriated funds to those particular donors. The circuit rejected this argument. It is not true that “before a person who has made a charitable contribution can be considered a victim within the meaning of § 2B1.1(b)(2)(B), his donation must be traced to a particular misallocation by the defendant.” Rather, a victim is a person who sustained any part of the actual loss, with no need that he be “linked with a specific part of the loss.” Such a holding is particularly apt given the specific instruction in the commentary to § 2B1.1 that defendants who exploit victims’ charitable impulses “create particular social harm.”

Interestingly, the court reached a somewhat different conclusion with respect to the restitution amount. In fixing restitution, the district court relied on WBNA’s donor lists. While it is true that any such donor could be a victim for restitution purposes, the circuit disagreed that each donor should be compensated for the full amount donated, since some of them “received value in return for their donations.” Some donated to and attended a WBNA gala that offered a “Buffet Supper” and an “Open Bar,” and others donated money for advertisements that appeared in the event’s program. The district court’s view that these donors expected that 100 per cent of their contributions would be used for charitable purposes was sufficient to make the determination that they were victims for restitution purposes, but was not sufficient to order full restitution of the amounts they gave. The circuit remanded the restitution order for “further proceedings to determine to what extent donors suffered [actual] losses.”

PC World

2011-08-06T17:35:00.003-04:00

United States v. Vilar, No. 10-521-cr (2d Cir. July 19, 2011) (Jacobs, CJ, Rakoff, DJ)

Defendant Vilar and his co-defendant Tanaka were convicted of fraud-related charges after a jury trial. Both filed timely notices of appeal and the appeals were consolidated. Vilar, represented by new counsel, decided to develop a claim that his trial counsel was ineffective, and make a motion under 18 U.S.C. § 2255. This per curiam resolves his motion to dismiss the appeal without prejudice, with leave to reinstate it after completing the 2255. The circuit denied the motion, but granted Vilar a six-month extension of time to perfect his appeal.

The court noted that Vilar’s request was somewhat unusual. Usually, a defendant first pursues a direct appeal then, if he wishes, a 2255 motion. Vilar’s application would allow a collateral attack first and a direct appeal second, a route that “raises concerns both jurisdictional and practical.”

Under Appellate Rule 4, the court only has jurisdiction over an appeal if a notice of appeal is timely filed - that is, within 14 days, extendable by up to 30 days on a motion to the circuit. Vilar’s request - that the appeal be dismissed, but with jurisdiction to be revived more than 30 days later - is inconsistent with this rule.

There is, however, an “effective equivalent.” The circuit could stay adjudication of the appeal pending the outcome of the 2255. This would avoid the jurisdictional constraints of Rule 4, and the circuit has done it before. The court accordingly construed Vilar’s motion to dismiss and reinstate as a motion for a stay, but then denied the motion. The court found no compelling justification for the stay in Vilar’s claim of judicial economy, particularly since Vilar “has not shown that his § 2255 motion is more likely to succeed than his direct appeal.” While it is true that handling the 2255 first would allow consolidation of that appeal and the direct appeal, “few if any judicial resources would be conserved.” The consolidated appeals would “entail different standards, different records, and separate analyses,” and “simultaneous adjudication of interrelated issues using different standards and different records would increase the complexity of the consolidated appeal."

Nor did fairness concerns require granting the stay. The court rejected Vilar’s claim that the trial attorney’s ineffectiveness in developing the factual record below would prejudice the direct appeal, since any “additional fact-finding done pursuant to a habeas proceedings” would not be part of the record” on which the direct appeal would be decided.

Moreover, it would be unfair to Tanaka and the government to grant the stay. Either Tanaka’s appeal would be delayed or, if it were severed from Vilar’s, the government would have to litigate separately two identical appeals.

The court accordingly denied the motion, but granted Vilar a six-month extension of time, finding that nether the government nor Tanaka would be unduly prejudiced by the delay.

Summary Summary

2011-08-06T17:32:00.002-04:00

At last - more summary orders of interest.

In United States v. White, No. 10-2631-cr (2d Cir. July 18, 2011) (summary order), the circuit vacated the district court’s decision denying resentencing under 18 U.S.C. § 3582(c)(2).

The case has a long procedural history. White originally rejected a plea offer that included one § 924(c) count while dropping another, but his attorney never told him that the second one carried a mandatory twenty-five year consecutive sentence. White ended up convicted after trial and facing a 570 to 622 month guideline range. On his habeas corpus petition, the district court concluded that his attorney had been ineffective, and fashioned an equitable remedy under which the court sentenced him under the final offer White had rejected - one count of crack trafficking and one § 924(c) count. This produced a 168-month sentence: 108 (a guideline sentence) on the crack count, plus 60 on the 924(c). The circuit upheld all of this back in 2007.

In 2010, the district court rejected White’s § 3582(c)(2) motion, holding that the crack portion of the sentence was not “based on” a guideline range affected by the 2007 ameliorating amendment. On this, White's second appeal, the circuit reversed. White’s “sentence was indeed ‘based on’ the guidelines.” The district court’s equitable remedy to White’s attorney’s ineffectiveness produced a sentence “based on” the range reflected by the counts of conviction that survived the remedy - the range contemplated by the final plea offer. This, although not the range for the counts on which White was convicted after trial, was “designed to replicate the sentence” he “would have received had he accepted the plea offer.” Thus, White was clearly eligible for a § 3583(c)(2) reduction. On remand, of course, the district court still has the discretion to grant or deny the motion.

In United States v. Johnson, No. 09-3917-cr (2d Cir. July 6, 2011) (summary order), the court rejected a claim that the guilty plea did not satisfy Rule 11. While the plea failed to advise the defendant of his rights to compel witnesses, plead not guilty, counsel at every stage of the case, or the court's obligations to order restitution and consider the guidelines, possible departures under the guidelines and the § 3553(a) factors, the circuit found no evidence that the defendant did not understand the charge or that he would not have pled guilty but for the court’s omissions.

To The Manner Porn

2011-08-06T17:09:00.002-04:00

United States v. Jennings, No. 10-1642-cr (2d Cir. July 22, 2011) (Kearse, Miner, Chin, CJJ)

For defendant Russell Jennings, looking at child pornography was a hard habit to break. He served a twenty-one-month possession sentence in a 2006 case then, in 2009, while on supervised release, did it again. For the 2009 case, he received a long prison sentence, plus a concurrent supervised release violation sentence on the 2006 case, and a lifetime term of supervised release.

His appellate claims related largely to the way the evidence against him in the 2009 case was developed. He argued that his probation officer was improperly involved in the procurement of the search warrant and criminal complaint, and that incriminating statements he made to the officer were obtained in violation of the Fifth Amendment. The circuit affirmed.

For the first argument, Jennings asserted that his probation officer lacked the statutory and constitutional authority to (1) meet with the prosecutor to plain the 2009 criminal investigation (2) swear out, apply for and execute a search warrant and (3) become involved in the criminal investigation by interrogating Jennings at the government’s direction and by swearing out the criminal complaint.

The circuit disagreed. The duties of a probation officer are set out in 18 U.S.C. § 3603, and include protecting the public from persons whose release proves threatening to the community. Thus, officers should report a releasee’s wrongdoing, and the officer here did not act beyond the scope of this authority when he put the information he developed into affidavit form that better allowed other agencies to perform their duties. Nor did the officer usurp the Executive Branch’s prosecutorial function, in violation the doctrine of separation of powers. The United States Attorney’s Office drafted the search warrant and criminal complaint based on information that the officer provided, which was not a separation-of-powers violation.

Relatedly, Jennings also argued that the probation officer’s one-week delay in reporting its violation findings to the court violated a statutory requirement that he do so “immediately.” The circuit found no plain error, since the statutory requirement of immediacy, set out in 18 U.S.C. § 3603(8)(B), covers only those persons conditionally released after having been found not guilty by reason of insanity or otherwise suffering from a mental disease or defect, but not persons on supervised release in general.

The circuit likewise rejected Jennings’ Fifth Amendment claim, which derived from a condition of supervised release requiring him to answer his probation officer’s questions truthfully. Since he gave incriminating answers to the officer during an interview about his violation conduct, Jennings argued that those answers were compelled and should be protected by the Fifth Amendment.

But, since Jennings did not invoke the privilege against self-incrimination during the interview, the statements could be used. The Fifth Amendment privilege is not “self-executing,” and thus statements made by a person to his probation officer are not covered, unless the officer threatened that invocation of the privilege would subject the person to a penalty. But merely requiring a releasee to answer his probation officer’s questions truthfully does not render the answer to those questions “compelled,” even if the officer deliberately sought incriminating evidence.

Summers-Time Blues

2011-07-10T11:47:00.002-04:00

United States v. Bailey, No. 07-3819-cr (2d Cir. July 6, 2011) (Cabranes, Pooler, Raggi, CJJ)

In Michigan v Summers, 452 U.S. 602 (1981), the Supreme Court held that the Fourth Amendment permitted police officers to detain the occupant of a premises during the execution of a search warrant, without need for individualized suspicion of the person detained. Here, the circuit, joining an issue in which the courts are divided, held that Summers also permits detaining the occupants after they have left the premises.

Background

In July of 2005, Suffolk County detectives obtained a search warrant for a basement apartment in Wyandanch, based on an informant’s tip that there was a gun there. When they arrived at the location to execute the warrant, they saw Bailey and an associate exiting the apartment. They drove off and the officers followed; about a mile from the apartment, the officers stopped Bailey’s car.

The officers patted Bailey down and, although he produced a driver’s license with a different address, he said that he was coming from “his” house at the target address. His friend also told the police that Bailey lived there. The officers took Bailey into custody and told him that the detention was incident to the search of the target location. Bailey answered that he did not live there and would not cooperate with the investigation.

Back at the original location, a gun and drugs were found in the apartment. Bailey was arrested and his keys were seized incident to the arrest. One of them opened the door of the apartment.

In the district court, Bailey moved to suppress the evidence obtained as a result of his detention - his statements and the physical evidence, including his keys. The district court denied the motion, citing Summers.

The Circuit’s Reasoning

On Bailey’s appeal, the circuit affirmed. Like the district court, it relied on Summers, which had concluded that the intrusion associated with being detained during a lawful search was minimal, while the justifications for it were substantial: law enforcement’s interests in preventing a suspect from fleeing; minimizing the risk of harm to the officers; and completing the search in a “orderly” manner.

The circuit had little difficulty concluding that the authority to detain an occupant “at” the premises during the search also covered detaining an occupant who “leaves” the premises “during or immediately before the execution of a search warrant.” The court noted that three circuits had extended Summers to these facts, while two had not, and decided to join with the majority, citing the “guiding principle ... of reasonableness.”

The circuit concluded that, like a detention at the premises, the intrusion of an off-premises detention is “de minimis” and the law enforcement interests substantial. Summers does not draw a “bright line” at “the residence’s curb.” Rather, the interests identified in Summers also permit detention of an occupant “nearby, but outside of, the premises.”

The court noted that this rule would prevent officers from having to make the “Hobson’s choice” of either immediately detaining an occupant who is leaving - thus risking officer safety and the destruction of evidence - or letting him leave the scene - thus risking the inability to arrest him if incriminating evidence is found.

On these grounds, then, Bailey’s detention was lawful. Detaining him out of view of the house out of concern for the officers’ safety and to prevent alerting other possible occupants was, here, “reasonable and prudent.” Moreover, the detention was not “unreasonably prolonged.” By the time Bailey was returned to the location the search was underway, and he was placed under arrest within five minutes of the execution of the warrant.

The court ended with a “note of caution.” Summers is not “a license for law enforcement to detain ‘occupants’ of premises subject to a search warrant anywhere they [may] be found incident to that search.” Rather, the rule announced here applies only when the occupant “is seen leaving those premises and the detention is effected as soon as reasonably practicable.” The court also announced its expectation that these geographic and temporal limitations “will be policed vigilantly by the courts.”

Summary Summary

2011-06-30T16:49:00.002-04:00

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.

PC World

2011-06-26T12:51:00.000-04:00

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”

2011-06-26T12:34:00.002-04:00

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.”

Mommy Dearest

2011-06-19T12:30:00.002-04:00

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

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

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.

Coffee, Tea or Venue?

2011-06-16T11:31:00.003-04:00

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.

PC World

2011-06-12T16:33:00.001-04:00

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.”

What's Drug Dealer To Do?

2011-06-12T16:12:00.006-04:00

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.”

A Condition Precedent

2011-06-12T15:53:00.003-04:00

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.

Body of Evidence

2011-05-15T14:10:00.003-04:00

United States v. Perisco, No. 08-5266-cr (2d Cir. May 3, 2011) (Jacobs, Kearase, Leval, CJJ)

Defendants Perisco and DeRoss, former high-ranking members of the Colombo crime family, were convicted of murder-in-aid-of racketeering and related offenses in connection with the murder of one William Cutolo, in connection with an intra-family power struggle. In this long opinion, which deals with several not-very-interesting evidentiary and sufficiency claims, the circuit affirms.

The opinion addresses only one noteworthy issue. At the time of the defendant's trial, Cutolo's body had not been located. And the theory of the government, based on other evidence, was that the body had been dumped at sea. Post-trial, the body was found buried on Long Island, which prompted the defendants to move for a new trial under Fed. R. Crim. P. 33.

The circuit affirmed the denial of that motion. It agreed with the district court that the discovery of the body was not "material" and was not "likely to result in an acquittal." While the discovery was "relevant," it did not impeach the credibility of any of the government's key witnesses, even if it did contradict the "theory advanced in summations as to how Cutolo's dead body had been concealed." Moreover, nothing about the discovery undercut the government's contention that the murder was brought about by Perisco and DeRoss.

Bad Cop, Bad Cop

2011-05-15T14:06:00.003-04:00

United States v. Cedeno, No. 09-1857-cr (2d Cir. May 2, 2011) (Jacobs, Calabresi and Chin, CJJ)

In 1990, the Appellate Division specifically found that a New York City detective lied at a suppression hearing, by “patently tailor[ing]” his testimony to avoid suppression. Here, the circuit held that it was error for the district court to categorically preclude cross-examination of that same detective at trial about the adverse credibility finding.

The district court, relying on United States v. Cruz, 894 F.2d 41 (2d Cir. 1990), had held that the Appellate Division’s finding went to the detective's credibility in a specific hearing, not that he lacked veracity generally, and that, here, the subject matter of the testimony would be different because the detective would not be testifying about the constitutionality of a search.

The circuit faulted this inquiry as “too narrow,” because Cruz did not “purport to set out a rigid two-part test.” A too-rigid application of Cruz risks violating both Fed. R. Evid. 608(b), which gives district courts the discretion to permit cross-examination into “specific instances of conduct” if the conduct is “probative of” the witness’ character for truthfulness or untruthfulness,” and the Confrontation Clause.

The circuit also noted that, several years before Cruz, it had upheld a district court’s ruling that a witness could be cross-examined based on occasions where his testimony in other cases had been found to be unworthy of belief.

Thus, here, before ruling, the district court should have also considered, “for example,” whether the lie was under oath in a judicial proceedings, whether it was about a significant matter, the passage of time and whether there had been any intervening credibility determinations, the motive for the lie and whether there was a similar motive in the current case, whether the witness had an explanation for the lie, and whether that explanation was plausible.

That said, the court also concluded that the error was harmless and affirmed the conviction.

Summary Summary

2011-05-13T13:48:00.002-04:00

Another crop of three:

In United States v. Reed, No. 09-2093-cr (2d Cir. May 5, 2011), the court vacated special conditions of supervised release requiring the defendant to participate in drug and alcohol treatment. He committed the offense of conviction while in prison, without access to drugs or alcohol, and there was no evidence that alcohol or drugs had any relation to its commission.

In United States v. Cedeno, No. 09-1857-cr (2d Cir. May 2, 2011), the district court erroneously charged the jury that, in prosecution under 18 U.S.C. § 924(c), "as a matter of law, a gun is a firearm." Not all guns are firearms "because, for instance, a BB gun is not a 'firearm.'" But, here, the error was harmless.

In United States v. Stroman, No. 10-0962-cr (2d Cir. April 26, 2011), the court considered whether a police officer conducted an "interrogation" of the defendant, for Miranda purposes, by telling him not to speak then showing him video surveillance footage. The court noted that this conduct "raises concerns that the police may be able to sidestep Miranda's safeguards" but did not conclusively rule on whether there was a Miranda violation, instead holding that any error in admitting the defendant's statements was harmless.

Beating Disorder

2011-05-13T13:40:00.001-04:00

United States v. Wells, No. 10-1266-cr (2d Cir. April 28, 2011) (Kearse, Sack, Katzmann, CJJ)

The defendants here, Wells and Rhodes, both former prison guards, were convicted of covering up the beating of a prisoner at the Queen Private Correctional Facility (“QPCF”). The episode began when the prisoner commented on the appearance of a female guard in Wells’ presence. Wells beat the prisoner, and the beating was witnessed by Rhodes and three other guards. The QPCF immediately began an internal investigation, and the witnesses, at Wells’ urging, filed false reports. Later, Wells and Rhodes were interviewed by an agent of the Office of the Inspector General and lied to her about what happened.

After a jury trial, Wells was convicted of five offenses relating to obstruction of justice, witness tampering and the making of a false statement. Rhodes was convicted of obstruction of justice and making a false statement.

On appeal, they challenged their convictions for obstruction of justice under 18 U.S.C. § 1519, which requires proof of conduct “intended to obstruct the investigation or proper administration of a matter within the jurisdiction of a federal agency.” The circuit affirmed.

The defendants first claimed that the government failed to prove a sufficient “nexus” between their conduct and an official proceeding, as required under some obstruction statutes. But § 1519 makes clear that no such nexus need be proven. All the statute requires is proof of an “intent to impede, obstruct, or influence the investigation or proper administration of any matter within the jurisdiction of any department or agency of the United States.”

The court also rejected the argument that the statute did not apply because the defendants were employed by the private company that operated the QPCF. The QPCF was under contract with the U.S. Marshals Service, an agency within the Department of Justice, to house federal prisoners. And the DOJ has jurisdiction and authority to investigate allegations against correction officers at both publicly and privately run prisons.

Finally, the court rejected the claim that there was no evidence that the defendants knew that their statements would be submitted to the DOJ. Knowledge of a pending federal investigation or proceeding is not an element of the offense.

Stalking Points

2011-05-13T13:04:00.003-04:00

United States v. Curley, No. 09-3314-cr (2d Cir. April 25, 2011) (Jacobs, Wesley, Chin, CJJ)

In this circuit, it is a fairly rare occurrence for a conviction to be vacated based on a Rule 404(b) error. But here, James Curley, convicted of interstate stalking offenses, will get a second bite at the apple.

Background

In 2006, Curley’s marriage to his wife, Linda, dissolved, and his behavior became increasingly bizarre. After serving her with divorce papers, he began following her, and recruiting family members to do so, as well. Linda obtained custody of their children and an order of protection. Curley did not take this all too seriously, however, since then secretly installed a GPS device on her car - a friend tracked her movements on the internet and forwarded the information back to Curley. Linda only found out about it when she had an automobile accident in New Jersey and a mechanic discovered the GPS device. This prompted Curley to drive from New York to the shop, where he lied about his identity and reasons for the visit.

In 2008, he was charged with two counts of interstate stalking and one count of interstate violation of a protective order. At trial, the district court admitted the following evidence under Rule 404(b): four incidents in which Curley was violent to Linda; (2) an incident some sixteen years earlier in which Curley’s brother, Michael, beat her and Curley told her not to report it to the police; an incident a few years later in which Michael was arrested for resisting arrest and, under pressure from Curley and Michael, Linda testified falsely at two subsequent trials; evidence relating to a 2008 traffic stop of Curley, in which he was allegedly driving a stolen rental car from which three rifles, ammunition, a bulletproof vest and ski mask, and a “last will and testament” were recovered.

As the trial unfolded, Linda testified about Curley’s prior violence and the incidents with Michael, including the forced perjury, but the district judge did not give a limiting instruction. Before the traffic stop evidence, however, the court instructed that the evidence was being offered for the “very specific purpose” of determining Curley’s “intent back at the time of the” offense. In its final charge, the court told the jury that the traffic stop evidence could be considered only on the issue of Curley’s intent, while the other evidence went only to Linda’s “reasonable fear.”

The jury convicted Curley, and he was sentenced to an above-Guideline term of sixty-three months’ imprisonment.

The Circuit’s Decision

The circuit analyzed the 404(b) evidence in three groups - Curley’s violence towards Linda; everything to do with Michael; and the traffic stop evidence. It found an abuse of discretion with respect to the latter two groups.

1. Curley’s Violence Towards Linda

First, the court found that the district court did not err in admitting Curley’s past abuse of Linda. Some of that abuse was so close in time to the charged conduct that it was “inextricably intertwined” with it, and hence “directly relevant” to Curley's intent and Linda's fear.

The abuse that occurred in earlier years was “also relevant and not unfairly prejudicial.” When a defendant is charged with domestic violence, a “history of domestic violence is relevant to show intent to harass or intimidate.” And the temporal remoteness did not preclude a finding of relevancy, since the acts collectively demonstrated a “pattern of activity that continued up to the time of the charged conduct.”

2. Linda’s Interactions with Michael

The district court erred, however, in permitting Linda to testify that Michael beat her and pressured her to lie about his resisting arrest case. This evidence was not sufficiently similar to the charged crimes to allow the jury to reasonably infer Linda’s fear, particularly since Curly was not charged with conspiring with his brother to harass or intimidate Linda. Moreover, Michael’s activities did not “parallel” Curley’s, since he was not involved in any of the charged conduct. This evidence accordingly had little probative value - one episode occurred sixteen years before the charged crimes and the other twelve - and posed a “high risk” that “evidence of Michael’s conduct would unfairly prejudice Curley.” It had no “real purpose other than to show that Michael - and not Curley - had a bad character” and thus improperly focus the jury on Curley’s “clan,” rather than on the allegations in the indictment.

Nor was the prejudice mitigated by the limiting instruction. The instruction was “not sufficient, given the low probative value of the evidence and the high risk of prejudicial effect.” The impact of the limiting instruction was also blunted by its poor timing; it came only at the end of the case - there was no contemporaneous instruction.

3. Curley’s 2008 Traffic Stop

The district court also erred in admitting evidence of the traffic stop. This evidence was admitted to show Curley’s intent and Linda’s fear, although the stop occurred some fourteen months after the charged conduct. While subsequent acts can be admitted under Rule 404(b), the temporal difference may impact the probative value of the evidence. Here, there was insufficient similarity between the traffic stop and the charged crimes. Indeed, there was no evidence that Curley’s activities on the day of the traffic stop were “related to or direced at” Linda at all. Relating the traffic stop to Linda required a “tenuous and unduly long chain of inferences without any further evidentiary guidance.” The risk of prejudice was also very high because the evidence was “significantly more sensational and disturbing than the charged crimes.” The circuit was particularly concerned about the “introduction of guns into the trial.” This was “especially troubling because it tended to show Curley was more violent and disturbed than he appeared from the other evidence.”

Here, as well, the court also found that the limiting instructions were not a cure. There was an “overwhelming probability that the jury” would be “unable to follow the court’s instructions” and the evidence was “devastating to the defense," since its primary effect was to show Curley’s “bad character” and “incite the jury.”

4. Harmless Error

The court also held that the erroneous admission of the Rule 404(b) evidence affected the outcome. “The record does not provide us with fair assurance that the erroneously admitted evidence ... did not substantially sway the jury.” The court’s reasoning is unsatisfyingly sparse, however - it simply repeats its prior holding that the 404(b) evidence was prejudicial, and notes that the government relied on it in summation.

Summary Summary

2011-04-15T11:32:00.002-04:00

Here are four recent summary orders of interest.

In United States v. Durham, No. 10-1046-cr (2d Cir. April 12, 2011), a supervised release violation case, the defendant claimed that his CJA lawyer was ineffective due to a conflict of interest. The circuit observed that in a VOSR the right to counsel is "statutory, not constitutional," and thus that "the scope of [the] right to effective assistance of counsel is arguably an open question in our Circuit." In the end, however, the court did not resolve the question because the factual basis for the conflict of interest claim was not sufficiently developed.

In United States v. Monk, No. 09-3618-cr (2d Cir. April 11, 2011), the court vacated a drug sentence because the district court's findings of fact were insufficient to support the imposition of the two-level gun enhancement. The court relied on evidence that the defendant had possessed guns in the past, and that ammunition was seized at the time of his arrest. The circuit agreed that this evidence, although it proved that "Monk at some point possessed a gun," failed to "establish the necessary connection between the gun and the offense conduct" and that to affirm the enhancement on these facts would "be expanding [its] scope ... in an unprecedented manner."

In United States v. Shay, No. 10-1543-cr (2d Cir. April 6, 2011), the court vacated a long, but within-Guideline, child pornography sentence because the district court "did not have the benefit of" Dorvee when the sentence was imposed, and the "Guidelines calculation and offense conduct in Dorvee's case were strikingly similar to those" here. This similarity made it "appropriate, at a minimum, to vacate the judgment and remand" so that the "district court can consider the potential effect or Dorvee on this case in the first instance," and decide whether the sentence it originally imposed remains appropriate.

Finally, in United States v. Windle, No. 10-620-cr (2d Cir. April 5, 2011), the court found plain error in an illegal restitution order. The district court improperly imposed a "lump sum" restitution order without identifying the victims or their actual losses.

PC World

2011-04-02T16:15:00.003-04:00

United States v. Perez-Frias, No. 10-1401-cr (2d Cir. March 31, 2011) (Jacobs, Calabresi, Lohier, CJJ) (per curiam)

Pedro Ruben Perez-Frias appealed his 42-month, below-Guideline illegal reenty sentence, arguing that it was substantively unreasonable. The circuit affirmed.

His case presented a particularly unsympathetic set of facts. In 1995, Perez-Frias was convicted of a drug-related manslaughter. He was selling marijuana at the time, and told his friends that he was having trouble with a rival dealer. This inspired someone else to kill the rival. Perez-Frias received a 7-to-21-year state sentence, and served about 14 years before being paroled to immigration authorities, who immediately deported him. He returned to the United States in August of 2009 and, two months later, was arrested for possessing marijuana. Within a few months he was in federal custody facing an illegal reentry charge.

Perez-Frias’ primary argument at sentencing was that a Guideline sentence was greater than necessary to satisfy § 3553(a). The sentencing judge disagreed, but granted his request for a four-month reduction to account for the uncredited time that Perez-Frias was in federal custody on a writ. The Guideline range was 46 to 57 months’ imprisonment, and the court imposed a 42-month term.

The circuit began by noting that it is “difficult to find that a below-Guidelines sentence is unreasonable,” although, in context, it seems that the court will find this difficulty only when assessing a defendant’s claim that the sentence is unreasonably high, and not when assessing a prosecutor’s claim that a below-Guideline sentence is unreasonably low. Here, according to the circuit, the district court’s assessment of the nature and circumstances of the offense and the defendant’s history and characteristics supported the sentence it chose.

Perez-Frias challenged the 16-level enhancement that he received for the manslaughter conviction as one not supported by “specific empirical data.” This is a common argument made in illegal reentry cases, and here the court pretty much shot it down. There is “no such flaw in the reentry Guideline.” Rather, the 16-level enhancement was “based on the Commission’s own determination that these increased offense levels are appropriate to reflect the serious nature of these offenses.”

Relatedly, Perez-Frias argued that the 16-level enhancement was unduly harsh because the illegal reentry itself is a non-violent act. The court rejected this, too. The guideline is not unreasonable merely because it produces an offense level that is equal to or greater than that of certain violent crimes.

Finally, Perez-Frias deployed another commonly raised argument: that the lower sentences imposed in “fast-track” districts showed that non-fast-track sentences are longer than necessary to achieve the statutory goals. The circuit disagreed because “defendants in fast-track districts are not similarly situated to defendants in non-fast-track districts.”

Comment

For those with a lot invested in illegal reentry cases - like federal defenders - this is a disturbing opinion, particularly on the issue of the empirical basis for the 16-level bump.

There has been a lot written, much of it quite compelling, that establishes that the Commission’s choice of 16-level bump was, in essence, random, and was not based on any systematic empirical study. And the quoted material that the court relies on here to find otherwise is not really an answer. That material comes from the Commission’s justification for the enhancement, and establishes only that the Commission believed that illegal reentrants with serious past convictions deserved a higher offense level. But it does nothing to explain why the Commission selected 16 levels, and not some lower number, and certain does not in any way show that the number, or even the concern behind it, was the product of a real empirical - or indeed any - investigation.

Others have observed that the 16-level bump seems to have been intended to coordinate with the statutory maximum of twenty years. But under Kimbrough that is an additional reason to give less deference to a determination by the Sentencing Commission. This opinion does not address that aspect of the enhancement at all.

Finally, as for fast-track, there is an issue that the Circuit has had before it many times but has not yet resolved: the claim that the disparity between the sentences imposed in fast-track districts and non-fast track districts is “unwarranted” under 18 U.S.C. § 3553(a)(6). Although the government will likely trot out this case in answer to that argument, in fact, this case does not shut that particular door. Its holding that the fast-track disparity does not render non-fast-track sentences longer than necessary is not a holding that such disparities can never be “unwarranted.”

Pill Pains

2011-04-02T12:51:00.002-04:00

United States v. Quinones, No. 09-4361-cr (2d Cir. March 29, 2011) (Walker, Straub, Katzmann, CJJ)

Antonio Quinones and his son, Herman, were convicted of conspiring to distribute controlled substances. Antonio was also convicted of a money laundering conspiracy. In this opinion, the Court tries to make sense of a confusing Supreme Court money laundering case and displays a rare difference of opinion over a conscious avoidance jury instruction.

Background

Antonio Quinones entered the internet pharmacy business in 2002 and, for several years, ran websites where customers could purchase prescription drugs with virtually no medical oversight. The purchaser would select the drug he wanted and fill out a brief medical questionnaire. This was then submitted to a doctor who reviewed it and approved the order. The doctors were paid per questionnaire reviewed, and often reviewed more than one hundred per day. Once approved, the prescription was transmitted to an actual pharmacy that Antonio controlled and the medicine was shipped out. Typically, he would send out one thousand orders per day.

Herman’s role was more limited - he filled orders and ran the customer service call center. Eventually, he developed his own “back end” administrative website to help Antonio process payments.

An Eastern District jury convicted them both; the court sentenced Herman to eighteen months’ imprisonment and Antonio to ninety-seven.

The Appellate Court’s Decision

Money Laundering

Taking the issues in reverse order, here the court was required to sort out the confusing array of opinions relating to money laundering in United States v. Santos, 553 U.S. 507 (2008). In Santos, which involved an illegal gambling operation, a four-justice plurality applied the rule of lenity and concluded that the term “proceeds” in the money laundering statute means profits, not gross receipts. The plurality was concerned that if the definition of “proceeds” were not limited to profits, the money laundering would “merge” with the crime of running an illegal gambling business because the essence of the business itself, taking money from bettors and paying the winners, would also be money laundering transactions.

Here, Antonio argued that, under Santos, his money laundering conviction likewise could not stand because his case presented the same “merger problem.” The circuit, addressing a question of first impression, held that Santos does not apply to money laundering offenses that derive from the sale of contraband.

But getting there involved a very detailed look at Santos. The fifth vote in that case came from Justice Stevens, who held that the meaning of the term “proceeds” depended upon the nature of the underlying criminal conduct. His view of the legislative history of the money laundering statute was that Congress intended it to apply to the gross revenues, and not just the profits, of certain other activities, including “the sale of contraband.” The four justices who dissented would have held that the term “proceeds” means “gross receipts” in all circumstances. Accordingly, the circuit, in trying to identify the scope of Santos, looked to the “position taken by those Members [of the Court] who concurred in the judgment on the narrowest grounds.” Some circuits have limited Santos to its facts, while others have indicated that Santos applies more broadly, to any case that presents a “merger problem.”

Here, the court concluded that the Stevens concurrence determined the scope of Santos and thus that the statutory term “proceeds” includes “gross revenue from the sale of contraband.” It accordingly affirmed Antonio’s money laundering conviction.

Conscious Avoidance

To convict the defendants of unlawful distribution of controlled substances, the jury was required to find that they either knew or “reasonably should have known” that their doctors and pharmacists were acting in bad faith; that is, “outside the usual course of professional practice and without a legitimate medical purpose.” Their defense was good faith reliance on the determinations of the doctors and pharmacists. Here, the district court gave a conscious avoidance charge but the charge neglected to mention that the concept of conscious avoidance did not apply if the jury found that the Quinoneses actually believed that the doctors and pharmacists were acting in good faith.

A two-judge majority held that the error was harmless because defendants’ “actual but unreasonable belief in the existence of ... the doctors’ and pharmacists’ good faith” could not absolve the defendants of culpability.

The government introduced “overwhelming evidence that the defendants knew or reasonably should have known that the doctors and pharmacists on whom they relied were acting in bad faith.” The defendants knew that their internet pharmacies permitted no interaction at all between a customer and a doctor. In fact, days after Florida enacted a law prohibiting Florida doctors from writing prescriptions without physically consulting with their patients, Antonio moved his filling pharmacy to New York. Moreover, he regularly changed locations as law enforcement raided or shuttered his pharmacies. Antonio was also aware that someone else in the same business had been arrested and that federal agents had informed some of his employees that his internet pharmacies were illegal.

Accordingly, the majority affirmed on this point as well.

Judge Straub vigorously dissented. In his view, the flawed language of the instruction required a new trial. The “actual belief” language is critical to the conscious avoidance instruction. “When knowledge of the existence of a particular fact is an element of an offense, such knowledge is established if a person is aware of high probability of its existence, unless he actually believes that it does not exist.” This language “must be incorporated into every conscious avoidance charge” and is particularly important in cases like this one, where the defendant “relied on his lack of knowledge of a crucial fact as a central element of his defense.” The conscious avoidance charge here was “completely silent on the Quinones’ actual beliefs” and thus was “wholly deficient and clearly erroneous.”

Judge Straub also found the error to be prejudicial. First, he disagreed with the majority’s premise that the Quinones’ actual but unreasonable belief in the doctors’ and pharmacists’ good faith could not absolve them. In his view, if the jury found that the Quinoneses actually believed that the doctors and pharmacists were acting in good faith, it could not have convicted them on a conscious avoidance theory.

Judge Straub also found significant evidence that the Quinoneses did indeed believe that the doctors and pharmacists were acting in good faith. Antonio testified; he explained the steps he took to ensure that his business was legal, and asserted that he actually believed that the doctors and pharmacists were acting in good faith. He also consulted with an attorney, who conducted an investigation and advised him that the businesses were legal. He moved his business out of states where it was not legal, and had a “block list” to prevent drug abusing customers from repeatedly purchasing pills.

Judge Straub also disagreed with the majority that there was “overwhelming evidence” that the Quinoneses should have known that the practitioners were acting in bad faith. The record here contained “conflicting testimony as to what the Quinoneses knew and believed,” as well as “clear evidence that Antonio consulted with both the doctors [and] attorneys about whether his business was legal.” Accordingly, “a jury should determine whether the Quinoneses are guilty after hearing a proper jury charge.”

Summary Summary

2011-03-27T15:41:00.003-04:00

Here are three more summary orders of interest.

United States v. Hernandez, No. 09-4930-cr (2d Cir. March 25, 2011), points out an interesting Guidelines question. Under § 3B1.1, the government bears the burden of proving that the defendant played an aggravating role. And one of the requirements for safety valve consideration is that the defendant not receive an aggravating role enhancement. But the circuit has held that the defendant bears the burden of proving that he qualifies for the safety valve. These conflicting principles have created "uncertainty about where the burden lies with respect to" this aspect of safety valve relief. This opinion, unfortunately, only points out the question but does not answer it.

In United States v. Nelson, No. 09-3308-cr (2d Cir. March 23, 2011), the court considered whether an appeal waiver was knowing and voluntary. The waiver precluded an appeal of any sentence of 137 months' imprisonment or less, but during the plea, at one point, the court advised Nelson that he would not be able to appeal any sentence that "exceeds 137 months' incarceration." Nevertheless, the court, "after careful review of the record," declined to invalidate the waiver. At another point in the plea the AUSA correctly explained the appeal waiver, and the court itself correctly described a parallel provision of the waiver dealing with career offender classification. Thus, there was "no meaningful risk that Nelson elected to enter into the plea agreement on the mistake understanding that it precluded his ability to appeal a sentence in excess of, but not at or below, 137 months."

In United States v. Bell, No. 09-4964-cr (2d Cir. March 23, 2011), the defendant challenged the government's rebuttal summation, which identified him with Lee Harvey Oswald and also "falsely portrayed him as a gambler and gunman waiting for a shootout with the police." The circuit found some of the comments "troubling," because they "overstated the trial evidence in a number of respects," and others "misleading" because they were "unsupported by the evidence" and an "inappropriate" characterization of it. But the court nevertheless affirmed, noting that the defendant did not object to the comments below, and that they were an "aberration in an otherwise fair proceeding."

Get the Point?

2011-03-20T12:44:00.002-04:00

United States v. Potes-Castillo, No. 07-5518-cr (2d Cir. March 15, 2011) (Straub, Hall, CJJ, Underhill, DJ)

The defendant here received a 188-month sentence after a jury convicted him of a drug conspiracy. At sentencing, it emerged that he had but one prior conviction: a 2004 New York State conviction for driving with ability impaired by alcohol (“DWAI”) in violation of New York Vehicle and Traffic Law § 1192(1). He was sentenced to a one-year conditional discharge and a fine.

Although he argued at sentencing that the conviction should not count in his criminal history score, the district court disagreed. It assessed him one point for the conviction and two additional points for committing the instant offense while under the conditional discharge. This placed him in Category II and rendered him ineligible for safety valve treatment.

On appeal, the circuit reversed.

Guideline Section 4A1.2(c) contains two lists of misdemeanor and petty offenses that are excluded from consideration in the criminal history score. Sentences for the offenses listed in 4A1.2(c)(1) and those “similar to” them are excluded if the sentence was a term of probation of one year or less or a term of imprisonment of at less than thirty days, or the prior offense was similar to an offense for which the defendant is now being sentenced. Included in the § 4A1.2(c)(1) list is “careless or reckless driving.”

Section 4A1.2(c)(2) contains a list of offenses - and also includes those “similar to” them - for which the sentences are never counted. Included on this list are “minor traffic infractions (e.g., speeding.)”

There is an Application Note that deals with DWAI offenses. Note 5 to § 4A1.2 provides that “Convictions for driving while intoxicated or under the influence (and similar offenses by whatever name they are known) are counted. Such offenses are not minor traffic infractions within the meaning of § 4A1.2(c).”

The plain language of the Note precludes an argument that DWAI is a “minor traffic infraction” under § 4A1.2(c)(2), since both the Note and this section use the same phrase.

But, the circuit concluded, Note 5 is ambiguous as to whether it also precludes applying § 4A1.2(c)(1) to DWAI offenses. If the first sentence of the note is read to mean that such offenses are always counted, without possibility of exception, then the second sentence would be rendered “meaningless.” Another reading, however, would be that the Note simply takes such offenses out of § 4A1.2(c)(2), leaving open the possibility that they might still be covered by § 4A1.2(c)(1). This is the reading that the court selected.

The first alternative - advocated by the government - would treat DWAI offenses, in essence, as felonies, and always count them, making them the only misdemeanors or petty offenses to which § 4A1.2(c) can never apply. The court rejected this: “It would be plainly inconsistent with section 4A1.2(c) to argue that DWAI offenses, although they are misdemeanor or petty offenses, are always counted and can never fit within the exclusion explicitly provided in section 4A1.2(c)(1).”

Rather, the court concluded that the Note is meant only to take DWAI offenses out of § 4A1.2(c)(2), but that they can still be excluded from the criminal history score if they are “similar to" any offenses listed in section 4A1.2(c)(1). Under this section, “the seriousness of the conduct in each individual case will determine whether the sentence actually counts.”

Accordingly, here, the district court erred by failing to apply § 4A1.2(c)(1) to the DWAI conviction. Since the sentence imposed on the DWAI was not so severe as to take the conviction out of § 4A1.2(c)(1), and the offense was not similar to the federal offense of conviction, the circuit sent the case back to the district court with instructions to determine whether the DWAI conviction was “similar to” the § 4A1.2(c)(1) offense of “careless or reckless driving.”

Down for the Count

2011-03-20T12:37:00.002-04:00

United States v. Desnoyers, No. 10-0447-cr (2d Cir. March 14, 2011) (Jacobs, Wesley, Chin, CJJ)

Mark Desnoyers was convicted of, inter alia, one count of conspiring to both violate the Clean Air Act (“CAA”) and to commit mail fraud, in connection with his asbestos abatement work. The district court, finding both factual and legal problems with the conviction on that count, entered a post-verdict judgment of acquittal. On the government’s appeal, the circuit reversed and reinstated the conviction.

The conviction on the conspiracy count related to asbestos abatement work in eight buildings. But, after trial, the government conceded that seven of the buildings were not subject to the CAA’s asbestos removal regulations. As for the eighth, the evidence was equivocal. The issue - whether that building contained enough asbestos to qualify - was not proven directly at trial because no witness actually took measurements there. Rather, the only evidence was a description of the abatement project that used trade jargon that was ambiguous.

The district court concluded that the guilty verdict on the conspiracy count could not stand, holding that the CAA object of the conspiracy “suffered from a factual defect,” and, alternatively, that the CAA object “suffered from a legal defect.”

The circuit disagreed on both theories, and reversed. A factual challenge to a conviction raises the standard question for sufficiency: could a reasonable jury find each element of the offense proven beyond a reasonable doubt. A legal challenge occurs when a defendant is “charged with conduct that is not legally actionable.” The difference is significant. Where a jury is considering alternative theories of guilt but renders a general verdict, a factual challenge fails as long as there was “sufficient evidence to support one of the theories presented.” But if the challenge is legal and“any of the theories was legally insufficient, then the general verdict must be reversed.

Under these standards, the conspiracy count was sound. As for factual insufficiency, Desnoyers did not challenge the mail fraud object at all. Thus, even if the CAA theory were insufficient, the conviction should still survive a factual challenge.

There is a “caveat” to this rule - the count should still be reversed when “an overwhelming amount of evidence relevant only to the unproved part of the conspiracy may have prejudiced the jury.” But the caveat did not apply here. There was not an overwhelming amount of evidence relevant only to the CAA object. Rather, most of the evidence was relevant both to the CAA object and the mail fraud object.

Desnoyer’s legal challenge to the count also failed. In fact, he did not “actually set forth a cognizable legal challenge” to the count at all. Rather, all he did was restate the factual objection - that the government could not prove that any of the eight projects was subject to CAA asbestos regulations - and cast it as a legal defect. The court rejected his claim that the jury was instructed “using an incorrect explanation of the law.”

Thus, while the circuit reversed a conviction for Hobbs Act extortion where the two of the three definitions of extortion in the jury charge did not satisfy the statutory definition of extortion, this case was different. All the jury was asked was whether his conduct violated the CAA, something that juries are “always asked” to do. There was no mistake about the law.

Thoroughly Unappealing

2011-03-20T12:05:00.002-04:00

United States v. Buissereth, No. 09-5358-cr (2d Cir. March 15, 2011) (Cabranes, Chin, CJJ, Crotty, DJ)

This decision found great fault with a sentencing that “left much to be desired.” The district court “failed to (1) rule on the numerous filed objections to the PSR; (2) rule on the requests for downward departures and a variance; (3) adopt the findings of the PSR; (4) mention, much less articulate its consideration of, the relevant factors set forth in 18 U.S.C. § 3553(a); or (5) calculate an applicable sentencing range under the Sentencing Guidelines.”

Nevertheless, the sentence was within the range specified in the plea agreement’s waiver clause, and the waiver was otherwise valid. The court accordingly dismissed the appeal. But it did note that,= the waiver did not “relieve the District Court of its responsibility to follow the procedural requirements related to the imposition of sentence,” even if it “preclude[d] this Court from correcting the errors alleged to have occurred below.” That said, there is a point at which “an arbitrary practice of sentencing without [proffered] reasons would amount of an abdication of judicial responsibility subject to mandamus” and an appeal waiver would not be enforced.

This case, while bad, did not “present such an extraordinary circumstance,” since the record as a whole indicates that the court at least gave “due consideration to” the defendant’s sentencing arguments.

Nothing Special

2011-03-20T11:39:00.004-04:00

Morales v. United States, No. 04-0585-pr (2d Cir. March 11, 2011) (Pooler, Hall, Livingston, CJJ)

Although decisions in habeas cases are generally beyond the scope of this blog, this one contains an discussion of an interesting sentencing issue relating to convictions on multi-object conspiracies where there is no special verdict.

Morales was a “Director of Security” for the Latin Kings street gang. In 1995, he was convicted of multiple RICO and VICAR counts as well as two drug counts: a conspiracy to possess with intent to distribute marijuana, heroin, cocaine and cocaine base, and a substantive count of possessing with the intent to distribute 50 grams or more of crack cocaine. He received six life sentences, one of which was on the drug conspiracy count. Although it was a multiple-object conspiracy count, the jury did not return a special verdict as to which drugs Morales conspired to possess, and the life sentence on that count was premised on an assumption that he conspired to possess cocaine and/or cocaine base, since the maximum sentence would have been less than life for the other drugs that were the object of the conspiracy.

After losing his direct appeal, Morales filed a pro se 2255 motion arguing, inter alia, that his trial and appellate counsel were ineffective for not challenging the life sentence on the drug conspiracy count since, under United States v. Orosco-Prada, 752 F.2d 1076 (2d Cir. 1984), with only a general verdict on that count, the sentence should have been based on the drug carrying the lowest statutory penalty - marijuana.

The district court denied the motion, and the circuit affirmed, but not because there was no error. Rather, the court held that Morales could not establish prejudice, since he received five other life sentences.

But the court went on to discuss the legal issue itself, which is an important one. In Orozco-Prada, 732 F.2d at 1083, the jury convicted the defendant of conspiring to traffic in both marijuana and cocaine without specifying. The circuit held that it was error for the defendant to be sentenced in excess of the maximum term for a marijuana conspiracy. In “the absence of a special verdict, there was no way for” the sentencing judge “ to know whether the jury intended to convict ... for a cocaine-related conspiracy, for a marijuana related conspiracy” or both. Accordingly, the judge “should have inferred that the conviction was for the drug conspiracy with the lowest statutory maximum,” and sentenced accordingly.

Here, the district court was aware of this rule, but found it in applicable to Morales. Citing a Seventh Circuit case, Peters, the court used the verdict on the substantive drug count - which was for possessing cocaine base - to assume that the jury also convicted Morales of conspiring to traffic in cocaine base. The district court called this an “exception” to Orozco-Prada.

In this opinion, the circuit “clarif[ied]” that it has “not yet expressly adopted any exception to the rule concerning general verdicts on multiple-drug conspiracy counts set forth in Orozco-Prada.” Rather, so far, the court has expressly refrained from adopting Peters. But its finding of a lack of prejudice here, coupled with the parties' lack of briefing on whether the court should adopt Peters going forward prevented it from deciding the question. Instead, “we will wait until the issue is squarely before us.”

Meet The Press

2011-03-20T11:07:00.002-04:00

United States v. Treacy, No. 09-3939-cr (2d Cir. March 9, 2011) (McLaughlin, Hall, CJJ, Restani, JCIT)

James J. Treacy, former COO and President of the parent company of Monster.com, was convicted of securities fraud and related offenses based on a scheme in which he backdated stock options. On appeal, the circuit held that the district court violated Treacy’s confrontation rights by restricting his cross-examination of a Wall Street Journal reporter who had written an article about the backdating of options at Monster that seemingly contained false exculpatory statements made by Treacy, but that the error was harmless. The court also found that the district court improperly calculated the forfeiture amount with respect to one of the options grants.

The Confrontation Issue

At trial, the government introduced into evidence a WSJ article that opined that the odds were one in nine million that a pattern of options grants as favorable or more favorable than those Treacy received would have occurred if dates were selected randomly. The article also contained extensive quotes from Treacy himself, in which he denied any wrongdoing, and the government called the reporter to the stand to verify the accuracy of the statements he attributed to Treacy.

The reporter tried to quash the subpoena, citing the journalist’s privilege. The district would not quash, but tightly limited both the direct and the cross-examination. As for the direct, the questioning was to be limited only to the reporter’s work on the particular article; he would only be asked to verify that Treacy made statements to him that he subsequently reported, and to identify the specific things that they said to each other in the interview. As for the cross, since Treacy argued only that the statements were taken out of context, and not that he did not make them or that they were otherwise misreported, his questioning of the reporter was limited to going over the questions that the reporter asked of him “immediately before those that elicited the responses quoted in the story.”

In the event, when the reporter testified, the court sustained the reporter’s attorneys objections to questions asked by Treacy that went beyond the court’s ruling - such as why he interviewed Treacy, and questions about a post-interview that the reporter sent to Monster’s public relations consultant - holding that Treacy could not make an “open ended attack” on the reporter’s credibility. The court, however, did allow Treacy to introduce the email itself.

The circuit began its discussion with the journalist’s privilege, noting that “at least in the civil context” a “journalist possesses a qualified privilege protecting him or her from the compelled disclosure of even nonconfidential materials.” Here, there was no claim that the reporter was trying to protect a source or other confidential materials. To the contrary, he was trying to protect materials that the source wanted disclosed. In this situation, the nature of the press interest protected by the privilege is narrower, and the privilege is more easily overcome. In civil cases where this is the issue, the privilege yields if a litigant can establish that the materials are of likely relevance to a significant issue in the case and are not “reasonably obtainable from other sources.”

The court rejected the argument - made by Dow Jones, as an amicus - that there should be a higher standard for overcoming the journalist’s privilege in criminal cases. Without delving into the competing constitutional concerns, the court simply noted that Dow Jones had not provided “any convincing reason why” the test should be different in criminal cases where only nonconfidential materials are sought. Thus, “in instances where a reporter is not protecting a confidential source or confidential materials, the showing required to overcome the journalist’s privilege is the same in a criminal case as it is in a civil case.” This is true “whether the party seeking to overcome the privilege is the prosecution or the defense.”

The district court correctly applied these principles in limiting the direct examination of the reporter. Treacy’s statements to the reporter appeared to be false exculpatories, and were thus “likely relevant.” And, since Treacy could not be compelled to testify, the reporter was the only source of the information. The district court’s limitations protected the journalist’s privilege by tailoring the questions to the showing of relevance and necessity.

But the limitations on the cross-examination, by contrast, went too far. Even taking into account the district court’s broad discretion in setting the parameters of cross-examination, curtailing cross-examination that “keeps from the jury relevant and important facts bearing on the trustworthiness of crucial testimony” is an abuse of discretion. Accordingly, here, it was an abuse of discretion to forbid cross-examination of the reporter beyond the ways that the ordinary rules regarding scope of direct and relevancy would restrict the examination of any other witness. Since the privilege issue was the same on cross as it was on direct, the district court should not have treated the reporter’s “interest as a competing interest to be balanced against Treacy’s Confrontation Clause rights.”

Thus, Treacy should have been permitted to “challenge [the] reporter’s credibility about the specific content of his direct testimony.” In addition, while the district court had the discretion to prevent a “general attack on credibility,” in application the restriction here went too far. The purpose of the reporter’s direct testimony was to confirm the accuracy of the statements attributed to Treacy in the article. Thus, Treacy should have been able to test the reporter’s memory with respect to the writing of the article. If the district court truly believed that “Treacy could not fully exercise his Confrontation Clause rights” due to the reporter’s “assertion of the privilege, it ought to have” either quashed the subpoena or stricken the reporter’s direct testimony.

A confrontation error does not require reversal if the government establishes that the error was “harmless beyond a reasonable doubt,” after assuming that the “damaging potential of the cross-examination were fully realized.” That standard was met here, even though the government in summation repeatedly emphasize Treacy’s statements to the reporter as evidence of his mendacity. Here, “the other evidence in the prosecution’s case was vastly more significant to demonstrating Treacy’s actual actions.” The court noted that Treacy was able to introduce the reporter’s post-interview email and that this allowed him to argue, even if with less force, that the statements attributed to him in the article were taken out of context. Second, in this circuit, false exculpatory statements are considered to be weak circumstantial evidence of guilt. Finally, other evidence in the case convincingly established Treacy’s guilt, and the court was “confident that the jury would not have been persuaded otherwise by an ambiguous newspaper article.”

The Forfeiture Issue

The circuit did agree, however, that the district court erred in for calculating the forfeiture amount as to one of the options grants because the court used an incorrect measurement date. According to Treacy, if a different date were used it would result in a smaller forfeiture. The court thus vacated this portion of the forfeiture and remanded for recalculation.

A Good-Faith-Based Decision

2011-03-11T16:00:00.003-05:00

United States v. Clark, No. 09-3462-cr (2d Cir. March 8, 2011) (Sack, Raggi, Lynch, CJJ)

In the district court, defendant Clark moved to suppress physical evidence and statements obtained after execution of a search warrant, and the district court granted the motion. On this, the government’s appeal, the circuit agreed that the warrant was defective - it did not establish probable cause - but that, contrary to the district court’s conclusion, the good faith exception applied. The court accordingly reversed and remanded.

Background

Local police officers in Niagara Falls, New York, obtained a warrant from a city court judge to search Clark and "1015 Fairfield Ave, being a multi family dwelling” for drugs and drug dealing paraphernalia. The supporting affidavit disclosed that an informant of “unknown reliability” told them that Clark was selling cocaine there, and that Clark had “full control” over the location. The affidavit also described two controlled purchases of cocaine that took place in “the area of 1015 Fairfield Ave.”

When the officers executed the warrant, Clark was in a downstairs apartment, and the officers found cocaine base, money, and other evidence. They arrested and Mirandized Clark who asked, “What am I looking at? 25 or what?”

On Clark’s suppression motion, the district court held that the warrant was not supported by probable cause to search the entire multi-family dwelling, and that the search tainted Clark’s statement. It also held that the good faith exception did not apply because the issuing judge “failed to act as a neutral and detached magistrate,” the warrant was “facially defective,” and the lack of probable cause was “so apparent that the police could not reasonably rely on the validity of the warrant.”

The Appeal

The circuit, like the district court, could not identify a “substantial basis” for the local judge to authorize a search of the entire multi-family dwelling. Included in the Fourth Amendment is a particularity requirement. Concerns as to this requirement most often arise when the warrant does not concretely or accurately describe the place to be searched. But particularity is also an issue when the warrant describes a multi-family dwelling, because it is possible that the “breadth of that description outruns the probable cause supporting the warrant.”

The government tried to argue that the warrant application asserted that Clark exercised “control over the entire premises,” and thus that there was no particularity problem. The circuit was not convinced. Control over a multiple-occupancy building can support a warrant to search the whole premises, but only where the warrant is supported by probable cause to believe that “evidence of criminality will be found throughout the building.” The mere allegation of “control,” without more, is not enough. Here, the allegations of “control” were not enough to establish probable cause to support a search of all residences in the building. The allegation came from an untried informant, and the assertion was entirely conclusory. There was thus no basis for the issuing judge to find probable cause. The judge was not told the size of the building or the number of units, and the affidavit did not explain what the informant meant by “full control,” or include any descriptive facts on the issue. Moreover, the affidavit’s description of the controlled purchases only established that Clark was in the “area” of 1015 Fairfield Avenue. It did not establish where within the building he conducted his drug business and certainly did not establish that he had control over all parts of the building.

Thus, even though there was probable cause that Clark was dealing drugs from “somewhere within 1015 Fairfield Avenue,” the totality of the circumstances did not provide a “substantial basis to conclude that Clark so controlled the various residential units in that multi-family dwelling that there was probable cause to think evidence of his criminal conduct could be found throughout the building.”

But, nevertheless, the court held that the district court erred in its application of the good faith exception. First, the issuing judge did not abandon his judicial role. While he made a legal error in identifying probable cause, this does not indicate the “sort of wholesale abandonment” necessary to overcome the good faith exception. Nor was the warrant facially deficient. That occurs only when “it omits or misstates information specifically required to be contained therein,” that is, “the place to be searched, and the persons or things to be seized.” The warrant here had no such defect. While the warrant was not, in fact, based on probable cause, the probable cause need not be “stated in the warrant itself.” Rather, a lack of probable cause is a defect in the supporting affidavit, not the warrant. Finally, the warrant was not so lacking in probable cause as to preclude reasonable reliance. The affidavit here was not “bare bones” - it was not “totally devoid of factual circumstances to support conclusory allegations,” even though it did not provide “detailed factual allegations” to support probable cause to search the entire building. It still had enough detail to render reliance on it reasonable, since it clearly established probable cause to believe that Clark was dealing drugs form somewhere within the building. And, while the affidavit’s allegation of “control” was “entirely conclusory,” the officers’ reliance on the warrant was not so “flagrant or culpable” as to warrant suppression. When the warrant was issued it was not yet settled that “control” had to be alleged with “some factual specificity.” Thus, a well-trained officer could not be faulted for relying on a warrant that lacked such specificity.

Dead Again

2011-03-11T12:05:00.001-05:00

United States v. Qurashi, No. 10-348-cr (2d Cir. March 8, 2011) (Newman, Walker, Pooler, CJJ)

Imran Quarashi and his brother, Adnan, purchased $3 million insurance policies on Adnan’s life from two different insurance companies. They then faked Adnan’s death, falsely asserting that he had died in a car accident in Pakistan, and the insurers paid Quarashi on the policies. A few years later, Adnan returned to the United States and assumed a new identity, Hassan Khan, and Quarashi purchased eight $10 million insurance policies on Khan’s life. When he claimed that Khan had been killed in a traffic accident in Pakistan, the insurance companies balked, opened an investigation, and Quarashi was ultimately charged with fraud.

Quarashi pled guilty - Adnan is still a fugitive - and was sentenced to 108 months’ imprisonment. On appeal he challenged the district court’s inclusion of prejudgment interest on the restitution order. Noting that this was an issue of first impression here, the circuit affirmed.

The restitution statute, 18 U.S.C. § 3663A, provides that restitution shall be based on the property’s value “on the date of sentencing” if that is greater than the value on the date of loss. Since the purpose of restitution is to make the victims whole,“value” is a “flexible concept to be calculated by a district court by the measure that best serves” the statutory purpose. And, indeed, accounting for the “time-value of money” requires flexibility. Since the statute requires restitution in the “full amount of” the victim’s losses, there is “no reason to exclude losses that result from the deprivation of the victim’s ability to put its money to productive use.” Prejudgment interest “stands in to provide a rough but fair approximation” of this loss.

The court also indicated - but stopped short of holding - that in a case where there is evidence that the victim “would not have put the funds to productive use,” prejudgment interest might not be appropriate. Here, while the insurance companies’ restitution request, which included a request for prejudgment interest, did not specify how the money would have been used if it had not been paid out to Quarashi, there was no evidence that they would not have used it productively.

Summary Summary

2011-03-10T13:18:00.004-05:00

It's been a while since the court issued an interesting summary order. But here are three that caught my eye.

In United States v. Gjuraj, No. 09-1736-cr (2d Cir. March 11, 2011), the court remanded for clarification where it was not clear that the district court understood its authority to impose the federal sentence concurrently to an undischarged term of imprisonment, where the undischarged state sentence had yet to begin.

In United States v. Alkhabbaz, No. 09-5271-cr (2d Cir. March 10, 2011), the defendant's original sentence included a reduction for acceptance of responsibility, and the government did not appeal. The defendant was resentenced after a remand, and this time the court denied him the adjustment because, in the interim, he had jumped bail. On appeal, the court held that under the cross-appeal rule - under which "an appellate court may not alter a judgment to benefit a nonappealing party," and thus, in a criminal case, absent a government appeal, the circuit cannot increase a defendant's sentence on its own initiative - the government's failure to appeal the original sentence was not a waiver of the argument that, on remand, he was ineligible for acceptance of responsibility. The cross-appeal rule does not confine the trial court, the doctrines of "default and forfeiture" do. But here the government did not forfeit the issue by agreeing to acceptance of responsibility at the original sentencing, since Alkhabbaz did not skip out until later.

In United States v. Mends, No. 09-5361-cr (2d Cir. March 4, 2011), the court agreed that a sentence to "time served," when the defendant had spent twenty-two months' in prison but the Guideline range was eight to fourteen months', was error. The sentence was, in effect, a "substantial upward departure or variance" that the court did not explain. Notably, the court also found that the issue was not moot, even though Mends had completed both the term of imprisonment and his supervised release, because the length of the sentence "could materially affect his prospects of obtaining a discretionary waiver of inadmissibility" from an immigration judge. This "potentiality" gave Mends a "personal stake" in the outcome of the litigation sufficient to create a "case or controversy" under Article III of the Constitution.

Peter Paul and Money

2011-03-10T13:14:00.002-05:00

United States v. Paul, No. 09-3191-cr (2d Cir. March 7, 2011) (Cabranes, Chin, CJJ, Crotty, DJ)

Defendant Peter Paul pled guilty to securities fraud, in connection with a stock manipulation scheme that permitted him to fraudulently obtain multi-million dollar margin loans, which he never repaid, from two brokerage houses. The district court sentenced Paul principally to 120 months’ imprisonment and more than $11.4 in restitution.

He raised three main claims on appeal, all without success.

At a pretrial conference, the district judge remarked that he had a reputation for giving a Guideline sentence after trial but for being lenient with defendants who pled guilty. The judge also remarked that the twenty-five months Paul spent fighting extradition in Brazil - he apparently fled there as his scheme was unraveling - would not be credited if he did not plead guilty. On appeal, Paul claimed that these remarks violated Fed.R.Cr.P. 11(c)(1), which forbids the district court from participating in plea discussions. The court rejected a “bright-line” rule in assessing Rule 11(c)(1) claims, noting that such issues are “highly fact-specific.” The the judge made the first remark in the context of setting a trial date - not about Paul specifically. The second remark, in context, was of even less concern to the court; it was clearly related to the court’s effort to find a way to release Paul on bail and not to coerce a plea. Moreover, any Rule 11(c)(1) violation here was harmless; Paul was not present when the remarks were made, pled guilty several months later, affirmed in the plea that he was doing so voluntarily, and neither he nor his attorney ever objected to the statements.

Paul also claimed, again for the first time on appeal, that the nearly four-year delay in his sentencing violated his right to a speedy sentencing. But the court found no plain error. Most of the delay was due to prosecutorial negligence, which “does not weigh as heavily as would an intentional delay,” and one year of the delay was attributable “solely to Paul’s request for adjournments.” In addition, Paul could identify no actual prejudice resulting from the delay other than his anxiety over the uncertainty of what would happen to him.

Finally, Paul challenged the restitution order, which required him to repay the losses to the brokerage houses that extended the margin loans. He argued that those losses were caused by the declining stock price, which left the institutions without the collateral necessary to recover the money they lent. The circuit disagreed because the losses were not caused by a decline in stock value, they were caused by “the making of the loans in the first instance,” and Paul clearly obtained the loans fraudulently.

Information Failure

2011-03-10T11:12:00.004-05:00

United States v. Espinal, No. 09-4344-cr (2d Cir. March 7, 2011) (Walker, Straub, Lynch, CJJ)

Here, the district court did not properly follow 21 U.S.C. § 851(b), which sets out the procedures for using a prior felony information to increase the mandatory minimum sentence in a drug case. Because both the defendant and the government were prejudiced, the circuit remanded the case for resentencing.

Background

The government had offered to permit defendant Santo Laiz to plead guilty to a drug offense with a ten-year mandatory minimum and agreed to refrain from filing a prior felony information. But Laiz pled guilty after the deadline, by which time the government had filed the information, which alleged that Laiz had been convicted of a felony drug offense in Massachusetts under the name “Jose Luis Lai.” During Laiz’ guilty plea, the court did not ask him whether he admitted to the conviction.

In his sentencing submissions, Laiz raised various legal challenges to the information, but did not clearly deny the allegation that he had in fact been convicted of the offense it specified. Thus, at the sentencing itself, the prosecutor sought clarification of the defendant’s position. Laiz’ attorney replied that he had “no grounds to believe that Mr. Laiz was not convicted,” but, since had not verified the conviction himself, he was “taking the word of the government.”

The district court still did not ask Laiz himself to affirm or deny the conviction. Instead, it asked the prosecutor for verification, and the AUSA responded by handing up a rap sheet that warned that it was “not supported by fingerprints.” The rap sheet had a variety of names, including “Santo Ramon Laiz” and “Jose Luis Lai,” and a birthdate of December 3, 1964. An associated docket sheet reflected a similar conviction with some different names and the same date of birth. The identifying information on these documents was not entirely consistent with those in Laiz’ PSR - the date of birth was different and some of the aliases differed, as well.

When the judge finally asked Laiz whether he affirmed or denied the conviction, on advice of counsel, Laiz remained silent. The judge, concluding that Laiz did not have a right to refuse to affirm or deny, imposed the enhanced, twenty-year minimum sentence with no further findings or warnings to Laiz.

The Appellate Court’s Decision

Laiz’ main argument on appeal was that the proof was insufficient to establish that he was the person named in the Massachusetts records. But the circuit, finding that the government had not had a “full and fair opportunity to present its best evidence” on the issue, did not rule on the sufficiency of the evidence. Instead, finding numerous procedural defects, the court sent the case back for a do-over.

Under Section 851(b), once the prosecutor has filed a prior felony information, if the defendant is convicted of the underlying offense, the district court must ask the defendant whether he affirms or denies that “he has been previously convicted as alleged in the information,” and must also inform the defendant that he waives that any collateral challenge to the prior conviction that is not made before sentence is imposed. If the defendant denies the allegation, or claims that the conviction is invalid, he must be given an opportunity file a written response to the information. This triggers a hearing, at which the government must prove any issue of fact beyond a reasonable doubt.

The district court did not follow these procedures “meticulously.” First, it did not ask Laiz to affirm or deny the prior conviction at his plea, although it did not have to then. Moreover, while Laiz did not expressly deny the conviction in his sentencing submission, the failure to do so then did not waive the objection. Accordingly, by the time of sentencing there was still “some ambiguity” as to the extent of Laiz’ objection to the enhancement.

Moreover, at sentencing, the district court did not undertake the required “affirm or deny” inquiry until after “considerable confusion about Laiz’ position had already been generated,” and never warned him that he had a right to put his objections in writing and that a failure to object would constitute a waiver. The “hearing” required by the statute was more like an “impromptu inquiry,” in which the district court examined documents handed up by the prosecutor without addressing their “obvious discrepancies” or “giving the defendant an opportunity to review and comment on them.”

Of course, Laiz did not help matters. Neither he nor his counsel made clear before sentencing whether they planned challenge the conviction, and Laiz’ refusal to affirm or deny is not covered by the statute at all. But, at least on these facts, the court refused to conclude that the refusal should be treated either as a denial - triggering the government’s beyond-a-reasonable-doubt burden - or an affirmation, which would have served as a waiver of the right to challenge the prior felony, since the district court did not follow the “affirm or deny” inquiry with the other statutory requirements: an opportunity to respond in writing and a warning of the consequences of a failure to act.

The failure to comply with § 851 does not automatically invalidate the enhanced sentence, since harmless error analysis applies. But here, Laiz was prejudiced in two distinct ways, apart from the extra ten years of prison time he received. First, the court’s failure to warn him of the effect of failing to object “may well have influenced Laiz’ unusual choice not to affirm or deny the allegations in the information,” which in turn affected the government’s burden of proof. In addition, the district court’s failure to follow the statutory procedure “compromised the reliability and thoroughness of the ‘hearing’” that it conducted.”

In the end, given the many uncertainties, the court neither affirmed the enhanced penalty nor struck it. Instead, it vacated the sentence and remanded the case for resentencing so that “proper procedures” could be followed.

Racket Club

2011-03-10T11:12:00.000-05:00

United States v. Applins, No. 07-2193-cr (2d Cir. March 1, 2011) (Miner, Sack, Hall, CJJ)

This decision closes a hole in the Second Circuit’s RICO jurisprudence. The appellants, drug dealers who were members of something called the Elk Block gang, were convicted of RICO conspiracy under 18 U.S.C. § 1962(d) in the Northern District of New York. The trial judge gave confusing jury instructions as to whether, for RICO conspiracy, the existence of an enterprise was an element of the offense.

The defendants pursued this issue on appeal, and the circuit affirmed, holding that “the establishment of an enterprise is not an element of the RICO conspiracy offense.” In a footnote, the court brushed aside its past decisions that seemed to suggest otherwise, deeming the relevant language “dicta.”

Face Time

2011-03-06T10:24:00.002-05:00

United States v. Hotaling, No. 09-3935-cr (2d Cir. February 28, 2011) (Newman, Hall, CJJ, Restani, JCIT)

John Hotaling cropped the faces from non-pornographic pictures of minor females and morphed them onto the heads of nude adult women engaged in sexually explicit conduct, including one in which the woman was handcuffed, shackled and tied to a dresser. He pled guilty to violating 18 U.S.C. §§ 2252A and 2256(8)(A), which together make it a crime to possess images containing child pornography where the image “has been created, adapted or modified to appear that an identifiable minor is engaged in sexually explicit conduct.” The district court sentenced him to 78 months in prison, having included in the Guidelines calculation the enhancement for possessing an image that portrayed sadistic or masochistic conduct. On appeal, the circuit rejected Hotaling’s “as applied” challenge to the statute as well as his challenge to the sentencing enhancement.

The government has a compelling interested in protecting minors from becoming victims of child pornography, and child pornography is not protected speech under the First Amendment when using the child’s image “implicates the interests of an actual minor.” Hotaling’s argument was that the interests of these actual children were not implicated because the children were not engaged in sexual activity during the creation of the photographs.

But the circuit concluded that the “interests of actual minors” are still implicated when their faces are used to create morphed images “that make it appear that they are performing sexually explicit acts.” Here, the only recognizable persons in the pictures were the minors, and Hotaling had added their actual names to the image files - while he did not distribute the images, they were digitally coded in a way that appeared that he planned to. Accordingly, the images were not “protected expressive speech under the First Amendment.”

The circuit also agreed that the sadism/masochism enhancement applied, even though the image did not actually depict a minor engaged in sexual activity that would cause her pain. A district court should apply the enhancement in cases where, using an “objective standard,” it finds that the morphed image portrays both sexual activity involving a minor and sadistic conduct that includes the likely infliction of pain, physical, mental or other excessive cruelty, or other depictions of violence. The image here clearly met that test, since it appeared to depict a minor engaged in sadistic conduct that would have caused at least some level of pain, and also involved cruelty in the form of forcible restraint.

PC World

2011-03-05T16:00:00.002-05:00

As usual, sentencing issues occupy the court in its most recent pair of per curiam opinions.

In Brown v. United States, No. 09-3495-pr (2d Cir. March 1, 2011) (Winter, Livingson, Lynch, CJJ) (per curiam), an appeal of the denial of a § 2255 motion, the court rejected an argument that the Sentencing Guidelines’ treatment of prior convictions affected the application of the Armed Career Criminal Act (“ACCA”). ACCA counts predicate convictions for crimes “committed on occasions different from one another” separately, even if the offenses happened on the same day, were not separated by an intervening arrest and concurrent sentences were imposed on the convictions in a single proceeding. For ACCA, the relevant considerations are only whether the victims and locations were different, and the degree to which the offenses were separated by the passage of time.

Brown had two prior robbery convictions that, under Guidelines section 4A1.2 - which is part of the basic criminal history rules - would be treated as a single conviction because he was sentenced on them simultaneously and the offenses were not separated by an intervening arrest. Nevertheless, the two convictions were properly considered as separate ACCA predicates. “Section 4A1.2 speaks only to the calculation of criminal history points and does not bear on the calculation of Brown’s ACCA sentence.”

United States v. Akinrosotu, No. 09-2333-cr (2d Cir. February 28, 2011) (Cabranes, Chin, CJJ, Crotty, DJ) (per curiam) considers the district court’s ability to modify a fine, but does not reach a firm conclusion. At sentencing, the court had imposed a $50,00 fine - due immediately - and imposed a condition of supervised release requiring the payment of any balance that remained unpaid as of the defendant’s release from prison. Years later, the defendant, still serving his thirty-year sentence, unsuccessfully petitioned the district court for remission of the fine. Addressing a question of first impression, the court of appeals concluded that, if § 3583(e)(2), which permits the district court to modify a condition of supervised release, confers any authority to modify a fine at all, that authority is limited to the amount that remains unpaid at the commencement of the term of supervised release. Here, the prison sentence is likely to outlive the fine, since under the law applicable to Akinrosotu - since amended - the fine will expire twenty years after its imposition, but Akinrosotu will not yet be on supervised release. Thus, concluding that there will be no unpaid balance when Akinrosotu starts his term of supervised release, the court dismissed the appeal.

Restoration Comedy

2011-02-27T10:28:00.002-05:00

United States v. Pescatore, No. 10-0520-cr (2d Cir. February 23, 2011) (Kearse, Winter, Hall, CJJ)

In connection with a plea agreement that covered both a long-running chop-shop operation and an extortion scheme, Michael Pescatore agreed to accept a 132 month sentence, a $2.5 million forfeiture and “no less than $3 million” in restitution. The agreement specified that the prosecutors would recommend that the forfeited assets be transferred to the victims, a process known as “restoration,” but that the ultimate decision lay with the Department of Justice, which would “make its decision in accordance with applicable law.”

At Pescatore’s 2008 sentencing, the court imposed the agreed-upon sentence, including $3 million in restitution, to be paid in full by the end of 2009. The written Judgment reflected this order, but did not contain the names of the victims to whom Pescatore owed restitution or the amounts to which they were entitled. In early 2009, the government wrote to the district court and asked it to correct the Judgment to incorporate the victim-loss tables in the PSR, and the court granted the motion, filing an amended Judgment that incorporated this information.

In April of 2009, the government notified Pescatore that the DOJ had denied the restoration request. Six months later, he moved in the district court for “specific performance” of the restoration portion of the plea agreement, and also sought to be relied from the $3 million in restitution, arguing that the total loss to his victims was less than that amount. The district court held a hearing on these applications in January of 2010 and denied them both. It noted that Pescatore had not made any restitution payments even though the deadline had passed, and gave him thirty days to pay the $3 million. Pescatore then sought a stay of the restitution order from the circuit, which denied it. But he still never paid the money.

On appeal, Pescatore pursued these same claims. The circuit affirmed but, because it was true that the total loss to the victims was less than $3 million, the court remanded the case for further proceedings.

The court first found no merit to Pescatore’s complaint about the government’s decision to retain the forfeited assets instead of restoring them to his victims. The statute, 18 U.S.C. § 981(e), permits the Justice Department to do either based on an exercise of its own discretion. And there was nothing in Pescatore’s plea agreement that placed any constraints on that discretion. The line prosecutors were obligated only to “recommend” restoration, which they did, and the promise that the DOJ would act “in accordance with applicable law” was not a “promise to grant restoration so long as it is not prohibited.” Without deciding whether this type of decision is subject to judicial review, the appellate court noted that the government had put on the record a reason for the refusal - Pescatore “actually does have assets” - and that Pescatore did not contest this.

As for restitution, the circuit agreed that the true amount of the loss to Pescatore’s victims was not $3 million, it was more like $2.56 million, and rejected the government’s claim that the amended Judgment was already in this amount. While the amended Judgment incorporated the PSR’s victim-loss tables, those tables did not contain a total, and the total amount specified in the amended Judgment remained at $3 million.

But, because Pescatore did not object to this amount when he was originally sentenced, the circuit reviewed only for plain error and concluded that he met only three of the four parts of the plain error test. The incorrect restitution amount was an “error,” that was “plain,” and affected Pescatore’s “substantial rights.” But it did not “seriously affect the fairness, integrity or public reputation” of the proceedings because, as far as the circuit was concerned, Pescatore simply “flouted” the restitution order by refusing to comply with it without obtaining a stay.

Even after the circuit denied his application for a stay, he made no effort to expedite the appeal. To the contrary, he missed two filing deadlines that resulted in dismissals and reinstatements. His “election” to “disobey the Judgment” therefore caused him to flunk final prong of the plain error test.

Even so, the court sent the case back for further proceedings. Pescatore must now pay the full $3 million, and will be subject to statutory interest and financial penalties as a result of his tardiness. If the total of the principal, interest and penalties is less than $3 million he will be entitled to a refund of the difference.

Rook and Role

2011-02-27T07:29:00.003-05:00

United States v. Skys, No. 09-5204-cr (2d Cir. February 23, 2011) (Jacobs, Kearse, Straub, CJJ)

In August of 2007, Eric Skys approached Citigroup and claimed that his company, Kaiser-Himmel Corp., owned 13.4 million shares of Sprint Nextel Corp. stock, with a market value of approximately $240 million. He told Citigroup that transfer of the shares was restricted for another fourteen months, but that he wanted to raise immediate cash by pledging the shares to Citigroup in exchange for an $83 million dollar loan. Citigroup’s due diligence revealed that Skys’ claims were false and that the documents he had presented were forgeries. Skys approached three other financial institutions with the same scheme, again without success. He ultimately pled guilty to securities, wire and bank fraud.

At sentencing, his presentence report described additional, albeit uncharged, fraudulent conduct. Skys solicited investments in a fake software company and also cheated a Florida dentist out of $300,000, then tried to take him for another $2 million, again claiming he owned 13.4 million shares of Sprint stock.

At sentencing, over objection, the district court included a two-level enhancement for ten or more victims and a four-level enhancement for aggravating role. These contributed to a final range of 235 to 293 months. The district court varied downward, and imposed a below-Guideline prison term of 130 months.

On appeal, Skys raised the same sentencing issues, and the circuit agreed with him to some extent. While it did not hold that the court should not have applied the enhancements, it concluded that the district court’s findings were insufficient. It accordingly vacated the sentence and remanded the case so that the district court could supplement the record and, if necessary, resentence Skys.

For the ten-victim enhancement, only victims that suffer an actual loss qualify. Here, the district court did little more than adopt the fact findings in the presentence report, which indicated only that Skys tried to defraud four financial institutions, none of which suffered an actual financial loss. And, while some of the individuals victimized by the uncharged conduct suffered an actual loss, there was no evidence that there were ten or more of them. Thus, the court of appeals concluded that there was no way it could engage in “meaningful review” of the enhancement.

It reached a similar conclusion for the role enhancement. The aggravating role enhancement applies where the defendant was an organizer or leader of a criminal activity that involved five or more participants or was “otherwise extensive.” Here, the district court applied only the “otherwise extensive” theory, concluding that “this was an extensive scheme.” Here, again, the circuit found the findings to be insufficient.

The circuit has interpreted the “otherwise extensive” language to refer primarily to the number of persons involved, either knowing or unknowing, and the extent to which the the unknowing participants were necessary to the success of the scheme. Here, the district court did not identify a single other “participant” - a person with criminal responsibility for the commission of the offense - and gave no “objectively reviewable explanation” for its conclusion that Skys’ criminal activity was “extensive.”

PC World

2011-02-22T16:20:00.004-05:00

United States v. Chowdhury, No. 09-3442-cr (2d Cir. February 22, 2011) (Cabranes, Chin, CJJ, Crotty, DJ) (per curiam)

The controlled substance known as BZP, when combined with another chemical, known as TFMPP, which is not a controlled substance, is frequently sold as MDMA (ecstasy) and has a somewhat similar effect on the user. However, there is no Guideline in U.S.S.G. § 2D1.1 for BZP or the BZP/TFMPP combination.

When sentencing for a drug "not specifically referenced" in the Guidelines, application note 5 to § 2D1.1 directs the use of the "most closely related" controlled substance, and gives three criteria for comparison - chemical structure, effect on the central nervous system and potency.

In this opinion, the court affirms the district court's conclusion that BZP/TFMPP is most closely related to ecstasy.

The Youth Won’t Set You Free

2011-02-20T08:46:00.002-05:00

United States v. Conca, No. 09-4475-cr (2d Cir. February 15, 2011) (Miner, Straub, Livingston, CJJ)

The Second Circuit has long held that a New York State youthful offender adjudication (a “y.o.”), counts as an adult conviction in the Sentencing Guidelines. In this long opinion, which covers absolutely no new ground, the court says so again.

In New York, first offenders between sixteen and nineteen years old are eligible for treatment as a youthful offender. If granted, the conviction is set aside and replaced with a y.o. adjudication, which carries more lenient penalties, is not treated as a conviction and does not trigger certain civil disabilities. However, unlike a juvenile offender, if sentenced to imprisonment, a youthful offender serves the sentence in an adult facility.

Conca received a long federal sentence for failing to register as a sex offender. Both in the district court and in the court of appeals he complained about three criminal history points assessed for a 1996 y.o., for which he was sentenced to 106 days’ time served, five years’ probation and, ultimately, one to three years’ imprisonment on a probation violation.

The circuit had little trouble concluding that this belonged in Conca’s criminal history score. Indeed, the outcome was dictated both by the Guidelines and by circuit precedent, under which Conca was “convicted as an adult,” even though he was under eighteen, and “received” a sentence of more than one year and one month.

For length of the y.o. sentence, the district court correctly followed the instructions in U.S.S.G. § 4A1.2(k), under which the original sentence and the violation sentence are aggregated to calculate the length of the sentence “received.” Here, that was clearly in excess of thirteen months. The district court also correctly concluded that Conca was “convicted as an adult.” The original y.o. sentence to probation was revoked and Conca served the violation sentence in an adult facility. Accordingly, given the nature of the proceeding, the type of sentence and the place of incarceration, Conca was indeed convicted as an adult.

PC World

2011-02-19T17:47:00.002-05:00

United States v. Acoff, No. 10-285-cr (2d Cir. February 10, 2011, amended February 11, 2011) (Calabresi, Lynch, CJJ, Murtha, DJ)

In this case, the defendant was convicted of a crack cocaine offense that, under the old law, carried a five-year mandatory minimum. But the district court refused to impose it. He gave the defendant fifteen months, holding that the 100-to-1 penalty ratio between crack cocaine and powder "does not make any sense at all."

The court held that the below-minimum sentence was illegal and vacated it. It also, as it has in a few other recent opinions, rejected the argument that the 2010 Fair Sentencing Act, under which the sentence would have been lawful, applied retroactively.

Of particular note in this decision, however, are the concurring opinions.

Judge Calabresi, in his, suggested a means for courts to address statutory schemes - such as the old crack cocaine penalties - that, over time, come to raise constitutional concerns: a "dialogue" with the legislature. In his view, it is possible to see the Congress' response to the "dialogue" over the crack penalties as a "response to a suggestion by the courts that the sentencing statutes were heading towards unconstitutionality." Perhaps this would then raise a question as to "whether the traditional presumption against retroactivity should apply." Rather, in a situation like this, it might be appropriate to reverse the ordinary presumptions and presume that the change is retroactive unless Congress expressly says otherwise. However, he concluded by recognizing that this approach has been rejected in the Second Circuit and that he is bound by that precedent.

Judge Lynch, in his concurrence, agreed that there is a "reasonable argument that Congress' recognition that the prior law was unfair should have led to complete retroactivity." He also recognized, however, the practical difficulties of that, given the large number of cases already disposed of under the old law. To him, the fair middle ground would have been for Congress to make the new law retroactive to those cases that were "still pending" when the FSA went into effect, even if the conduct had been completed before that date. "Such defendants still need to be sentenced, and there are few persuasive reasons why they should be sentenced pursuant to an unjust law when Congress has already replaced it with a more just one." Concluding that this was likely the result of "Congressional inattention," he urged Congress to take a second look.

Abbott Hole

2011-02-19T17:26:00.006-05:00

United States v. Tejada, No. 07-5289-cr (2d Cir. February 9, 2011) (Leval, Raggi, CJJ, Gleeson, CJ)

The defendant here received a 120-month drug sentence and a consecutive 60-month § 924(c) sentence. On appeal, he argued that this was illegal under the court's decisions in Williams and Whitley. And indeed it was. However, as this decision recognizes, those cases were abrogated by the Supreme Court in Abbot v. United States, 131 S.Ct. 18 (2010).

At issue is an inscrutable phrase in § 924(c): "Except to the extent that a greater minimum sentence is otherwise provided by this subsection or by any other provision of law," a person convicted of violating § 924(c) must receive a specified mandatory minimum sentence and that sentence must be consecutive to any other term of imprisonment. Whitley held that this language meant that the § 924(c) sentence did not apply if the defendant received a higher mandatory minimum sentence for gun possession - in that case a 15-year Armed Career Criminal Act sentence. Williams held that the § 924(c) sentence did not apply if the defendant, as here, received a higher mandatory minimum sentence for drug trafficking.

But Abbott held that the "except" clause in § 924(c) related only to "the conduct § 924(c) itself proscribes, i.e., possessing a firearm in connection with a predicate crime." Under Abbott, the exemption from the § 924(c) sentence only applies where the defendant is subject to an "even greater mandatory minimum" under § 924(c). Since that was not the case for the defendant here, the circuit affirmed.

Attempting Offer

2011-02-19T17:19:00.002-05:00

United States v. Sabir, No. 07-1968-cr (2d Cir. February 4, 2011) (Winter, Raggi, CJJ, Dearie, DJ)

Rafiq Sabir, an American doctor, was convicted of conspiring to and attempting to provide material support - in the form of his own medical services - to al Qaeda. Sabir raised a multitude of issues on appeal, including a challenge to the constitutionality of the material support statute and complaints about the racial composition of the jury, the trial court’s evidentiary rulings, and the government’s rebuttal summation.

But of particular interest are the opinion’s discussion of sufficiency of his conviction for attempt, an issue that the court does not not often consider in depth, and the diverging views of the two opinions on the issue.

The case against Sabir arose from a terrorism investigation of Sabir’s longtime friend, Tarik Shah, that began in 2001. An FBI CI “Saeed,” cultivated a relationship with Shah, in which Shah spoke about his commitment to jihad and identified Sabir as his “partner.” Saeed eventually introduced Shah to an undercover FBI agent, Ali Soufan, who posed as a recruiter for al Qaeda. Shah told Soufan about Sabir, describing him as a doctor who was committed to the same cause.

In 2005, Sabir met with Saeed and Agent Soufan at Shah’s apartment. Sabir, who had been in Saudi Arabia, said he would soon be returning there and agreed to provide emergency medical care to wounded mujahideen. Sabir gave Soufan his personal and work telephone numbers so that those needing medical assistance would be able to contact him directly. He and Shah then swore an oath of allegiance to al Qaeda and its leaders.

On appeal, Sabir argued that his offer to provide medical assistance, even coupled with his giving Soufan his telephone numbers, was legally insufficient to constitute an attempt to provide material support. A bitterly divided panel affirmed.

The majority began by reviewing the law of attempt. Federal criminal law requires only a “substantial step” in furtherance of the intended crime. This concept derives from the Model Penal Code, which introduced the formulation in order to expand attempt liability. The Second Circuit adopted it in 1976, noting that it was satisfied by conduct, even if not proximate to the completion of the crime, that was “strongly corroborative of the firmness of the defendant’s criminal intent.” Thus, while a substantial step must be more than “mere preparation,” it may be less than the “last act necessary” before the commission of the crime.

These standards, however, do not always provide “bright lines for application,” since the identification of a “substantial step” is necessarily a matter of degree. For an offense such as attempt to provide material support, the focus is on the defendant’s “efforts to supply.” For this offense, the underlying conduct is the provision of support, even benign support, for a terrorist organization, and need not be planned to culminate in terrorist harm.

Accordingly, the majority concluded that the evidence was sufficient to show that Sabir attempted to provide material support in the form of personnel - “specifically, himself” - to work for al Qaeda as a doctor on-call to treat wounded jihadists in Saudi Arabia. Sabir met with what he thought was an al Qaeda member, swore an oath of allegiance to the organization, promised to be on call, and gave his contact numbers so that al Qaeda members could reach him in Saudi Arabia when they needed treatment. This conduct “planned to culminate in his supplying al Qaeda with personnel, thereby satisfying he substantial step requirement.”

Judge Dearie vigorously dissented. In his view, “the substantive crime was so remote in time, place and objective that one is left only to speculate as to what, if anything, would have happened had Sabir in fact been in a position to pursue the conspiratorial goal.” In his view, the majority’s conclusion that merely “pledg[ing] to work under the direction of the organization” could constitute an attempt to provide material support was “without precedent and hinges upon ... a seriously flawed interpretation of the material support statutes.”

Judge Dearie took particular issue with the majority’s conclusion that Sabir committed the crime of attempt “simply by agreeing to commit the crime and providing a phone numbers.” The giving of the phone numbers, was of little significant since it did not occur at or near an actual jihadist camp or battleground. Sabir was 7,000 miles away, and no preparations to be “on call” had been made or even discussed. This left the “actual provision of material support entirely a matter of speculation and surmise.”

The Chose Tattoo

2011-02-13T10:47:00.002-05:00

United States v. Greer, No. 09-4362-cr (2d Cir. February 4, 2011) (Walker, Cabranes, CJJ, Koeltl, DJ)

Michael Greer was convicted of possessing a gun and its ammunition. The gun was recovered in a trash can along with the keys to a Hyundai Sonata, while the ammunition was found in the car itself. The Sonata had been rented by someone named Tangela Hudson, and a police officer testified that Greer had a tattoo on his left arm that said “Tangela.” On appeal, he argued that using the tattoo to connect him to the car violated his Fifth Amendment right against self-incrimination.

The circuit agreed that the tattoo was “testimonial.” The mere exhibition of a physical trait is not testimonial because it is not a communication that contains an assertion of fact or belief. But here, the tattoo was “used to a very different end” - not to identify Greer, but rather its content - the name “Tangela” - was used to prove that Greer had a relationship with a person of that name, and thus as circumstantial evidence that he had constructive possession of the ammunition in a car rented by Tangela Hudson. It was accordingly both testimonial and incriminating.

But there was nevertheless no Fifth Amendment violation because the tattoo was “not compelled by the government,” even if force or compulsion might have been used by the police to reveal it. The court likened the use of the tattoo to the IRS’ ability to compel production of voluntarily prepared papers. The “voluntary tattooing of an incriminating word to Greer’s arm was, like the voluntary preparation of [tax] documents, not the product of government compulsion.”

Swept Away

2011-01-29T10:47:00.002-05:00

United States v. Hassock, No. 09-5193-cr (2d Cir. January 28, 2011) (Miner, Parker, Raggi, CJJ)

In November of 2009, the district court granted Hassock’s motion to suppress the gun that he was charged with possessin, finding that it was the fruit of an unreasonable search of his bedroom. On the government’s appeal, the circuit agreed that the search could not be justified under the “protective sweep” doctrine and affirmed.

Background

In late 2008, an informant told an ICE agent named Christopher Quinn that someone known as “Basil” - in reality, Hassock - had a gun in his basement apartment in the Bronx. Quinn and other members of an inter-agency task force were unable to identify “Basil,” so on November 25, 2008, they went to the location specified by the informant. Their purpose was to conduct a “knock and talk” - that is, to interview the residents, try to confirm the information they had, and conduct any necessary follow-up, including arresting “Basil” if they could.

At first Quinn and the others conducted surveillance from their vehicle. Seeing nothing, they simultaneously knocked on the front and rear doors of the apartment, which was located in the basement. Eventually, a woman opened the back door. She told them that she had just woken up and did not know if anyone else was in the apartment. When they asked if they could “look around,” the woman “said yes.”

Conducting what the government claimed was a "protective sweep," Quinn and a task-force detective went directly to what they believed was Basil’s bedroom. Quinn looked under the bed and found the gun.

After an evidentiary hearing, the district court suppressed the gun. It found that the search of Hassock’s bedroom was unreasonable and could not be justified by the protective sweep doctrine, because the doctrine did not apply. The officers were not in the apartment to "execute a warrant, enforce an order of protection, or pursuant to exigent circumstances."

The Circuit’s Ruling

The court of appeals affirmed. It began with Maryland v. Buie, 494 U.S. 325 (1990), in which the Supreme Court held that police officers executing an arrest warrant could conduct a “quick and limited search of [the] premises” to protect their safety, but that such a search must be “narrowly confined to a cursory visual inspection of those places in which a person may be hiding.” A Buie protective sweep is analogous to a Terry patdown - it is permissible when the “searching officer possesses a reasonable belief based on specific and articulable facts that the area to be swept harbors an individual posing a danger to those on the arrest scene.”

The Second Circuit has extended Buie to police activity other than the execution of an arrest warrant, authorizing protective sweeps when the entry was pursuant to “lawful process,” such as a protective order. But the requirement of a “specific facts as to the presence of a lurking danger” remains. While there is an open question - and a potential circuit split - over whether a consent entry alone can justify a protective sweep, here the circuit found that it did not need to resolve the question.

The officers here had “no legal process,” although they went with a “legitimate purpose” - the questioning and possible arrest of Hassock. But since Hassock did not answer the door, that “purpose could not be pursued until Hassock was found.” On these facts, “the sweep cannot be viewed as a reasonable security measure incident to Hassock’s interrogation or arrest.” Rather, the sweep itself “became the purpose for the agents’ continued presence on the premises insofar as they thereby searched the location for Hassock.”

At the time they conducted the sweep, the agents had no information that the woman who admitted them had the authority to consent to a full search of the premises. They had “no authority of any kind to enter Hassock’s bedroom.” Thus, the “original purpose of the ‘knock and talk’ thereupon became an illegitimate search for Hassock incident to no other lawful police conduct.” This “cannot be characterized as a protective sweep.”

PC World

2011-01-29T09:45:00.003-05:00

This week’s per curiam opinions both deal with sentencing matters.

First is United States v. Johnson, No. 08-4093-cr (2d Cir. January 28, 2011) (Kearse, Winter, Hall, CJJ) (per curiam).

Here, three defendants challenged the district court’s denial of their crack resentencing motions under 18 U.S.C. § 3583(c)(2). After a trial, the district court found that each defendant was personally responsible for their organization’s total sales, approximately 88 kilograms. The district court sentenced two defendants to life in prison; for the third, the court downwardly departed to fifteen years. The circuit held that the district court properly denied the § 3583(c)(2) motions, because the ameliorating amendment did not change the base offense level for offenses involving 4.5 kilograms or more of crack.

On appeal, the defendants tried to persuade the circuit that they were not actually responsible for that quantity. But the circuit found no error in the district court’s drug quantity determinations.

Next is United States v. Cossey, No. 09-5170-cr (2d Cir. January 28, 2011) (Kearse, Walker, Pooler, CJJ) (per curiam).

In this case, the defendant pled guilty to possessing child pornography, and the district court sentenced him to seventy-eight months in prison and a life term of supervised release. In selecting this sentence, the district court concluded that the defendant was “genetically predisposed to view child pornography,” and rejected two separate psychological evaluations finding that the defendant was at a “low to moderate risk to re-offend.” The district court predicted that “fifty years from now” the offense would be discovered to be “caused by a gene you were both with” that “you can[not] get rid of.”

The circuit found the district court’s fixation on this as-of-yet undiscovered gene to be plain error. “Where a district court relies on its own scientific theories of human nature to sentence a defendant, as it [did] here, a finding of plain error is warranted.” The court also remanded to a different judge because the "extent of the discussion concerning Cossey’s genetic predisposition to re-offend has raised serious concerns over the objectivity of the judge."

You Can't Go Home ... Again

2011-01-29T09:22:00.002-05:00

United States v. English, No. 10-3258-cr (2d Cir. January 18, 2011) (Kearse, Winter, Hall, CJJ).

The defendants in this case, charged with narcotics and firearms offenses, sought bail from a magistrate and two district judges. Each time they were ordered detained. This opinion is the result of their effort to get the circuit to release them. The circuit affirmed.

The defendants were arrested in April of 2010. They faced a twenty-plus kilogram cocaine conspiracy charge and two firearms offenses. They first sought bail from a magistrate judge. At the hearing, the AUSA cited several factors indicating that the defendants were a danger, including characterizing a gun recovered from the defendants’ stash house as appearing to be a machine gun. The magistrate ordered the defendants detained finding that they had not overcome the presumption that they posed a danger to the community.

The defendants then appealed to the Part I judge, Judge McKenna. At that hearing, the AUSA confirmed that the gun was indeed a machine gun. Judge McKenna found that the defendants overcame the presumption of being a flight risk but, based on the government's description of the gun, found that the defendants posed a danger. He ordered them detained. A few days later, the government sent the defendants a letter indicating that the gun was not a machine gun. It was a “pistol” that was “not operable.” Since the nature of the gun was the basis for the detention order, the defendants asked Judge McKenna to reconsider. In the interim, however, the defendants were indicted and their case was assigned to Judge McMahon. Judge McKenna referred the bail matter to her.

Before Judge McMahon, the AUSA described the case as involving 27 kilograms of cocaine, which prompted the judge to say that “in a 27-kilo case I don’t think I’ve ever let anybody out.” Nevertheless, the defendants persisted, and each had a bail hearing. Judge McMahon told them that she would not review Judge McKenna’s findings and that they were “starting over” with her. She also said that she was going to “ignore” the gun. For defendant Anderson she found both a risk of flight and a danger to the community, based on the nature of the charges, the penalty he faced and the weight of the evidence against him. She also detained defendant English, again finding him to pose both a risk of flight and a danger, citing essentially the same factors.

On appeal, the defendants complained that Judge McMahon erred in reviewing the case de novo and that she was improperly “predisposed” against them. The circuit affirmed.

It found first that Judge McMahon was not bound by Judge McKenna’s findings that the defendants did not pose a flight risk. A district judge considering bail should consider all of the statutory factors and make all of the findings required. Judge McMahon correctly concluded that she was not supposed to review Judge McKenna’s findings as an appellate court might. “As both Judge McMahon and Judge McKenna are judges of the court having original jurisdiction over defendants’ offenses, neither is authorized to review a detention order issued by the other.”

The court also rejected the claim that Judge McMahon’s remark that she had never granted bail in a case like this demonstrated some sort of judicial bias. Reviewing the comment in the context of the “record as a whole,” the court found no bias. She granted each defendant a prompt hearing, agreed not to consider evidence of the gun, and carefully considered and responded to each argument for bail that the defendants proffered. She “simply concluded, as she was entitled to do,” that the bail packages the defendants proposed did not overcome the statutory presumption against them. “Her reasons were explicitly tied to the facts before the court and were fully explained on the record.”

Finally, the court, reviewing the merits, agreed that the defendants should be detained. Judge McMahon’s findings on flight risk and danger were “amply supported by the evidence” and the detention orders were “proper.”

Belgian Awful

2011-01-22T11:29:00.002-05:00

United States v. Weingarten, No. 09-1043-cr (2d Cir. January 18, 2011) (Cabranes, Wesley, Livingston, CJJ)

Defendant Weingarten, who sexually abused one of his daughters for years, successfully challenged the applicability of 18 U.S.C. § 2423(b), which makes it a crime to travel in "foreign commerce" with the intent to engage in sexual activity that would be illegal in the United States, to one of the counts of conviction.

Background

Weingarten, a United States citizen, moved his family to Antwerp, Belgium, in 1984. Starting in about 1991, he began sexually abusing his oldest daughter, who was then nine or ten. The abuse went on for years - the daughter moved for England for a time - but when she returned to Belgium it resumed. In 1997, Weingarten moved the family to Israel, but the abuse continued. He also brought her to Brooklyn, to visit his father, and abused her there, too.

Weingarten was charged years later, when the abuse came to the attention of the FBI. Four counts charged him with traveling in or transporting the daughter in foreign commerce with the intent to engage in unlawful sexual activity. These related to the trips between Brooklyn and Belgium. But one count charged him with a traveling in foreign commerce with respect to his travel between Belgium and Israel when he moved his family in 1997.

The Circuit’s Ruling

The court agreed with Weingarten the phrase “travel[] in foreign commerce” in § 2423(b) did not apply to travel between two foreign countries when the conduct did not involve any territorial nexus with the United States. It accordingly reversed Weingarten's conviction - and the associated ten-year consecutive sentence - on that count.

The court first held that § 2423(b) can apply to conduct occurring outside the territorial jurisdiction of the United States. Although there is a presumption against extraterritoriality, this section “manifestly expresses Congress’ concern with conduct that occurs overseas.” The law prohibits traveling with the intent to engage in sexual activity that would be illegal if it occurred in the United States regardless of whether the planned activity is to take place outside the United States.

Nevertheless, however, the statute does not cover travel between foreign nations when the conduct involves no territorial nexus to the United States. The statute’s language - “travel[] in foreign commerce” - is ambiguous. The statute that defines the phrase “foreign commerce,” 18 U.S.C. § 10 merely says that it “includes commerce with a foreign country.” While this definition might include something more than commerce between the United States and a foreign country, the circuit concluded that it did not. The current § 10 was a recodification of a prior law that specifically limited the definition to transportation between the United States and a foreign country, and there was insufficient evidence that the recodification was “meant to effectuate a substantive change.”

Moreover, the phrase has not been extended to activity exclusively occurring between foreign countries in other statutes that use it, such as the kidnapping statute, 18 U.S.C. § 1201. It would be “anomalous” to construe it differently in § 2423(b).

The court also noted that the government could point to “any precedent suggesting” a different outcome. Even the relevant pattern jury instructions limited the definition of “foreign commerce” to commerce involving “some nexus to the United States.”

Finally, the court recognized that construing the statute in this manner would “avoid[] the necessity of addressing whether such an exercise of Congressional power would comport with the Constitution.”

PC World

2011-01-05T17:17:00.004-05:00

United States v. Brown, No. 09-4991 (2d Cir. January 5, 2011) (Calabresi, Sack, Katzmann, CJJ) (per curiam)

The court's latest per curiam holds that assaulting a correction officer, in violation of Conn. Gen. Stat. § 53a-167c(a), satisfies the "catch-all" definition of "violent felony" in the Armed Career Criminal Act. Under Circuit law, an offense qualifies under the catch-all if it is both similar "in kind" and in "degree of risk posed" to the listed offenses of burglary, arson, extortion and the use of explosives.

The Connecticut offense is similar "in kind" because it requires the offender to intentionally prevent an officer from performing his duties, primarily in a prison setting, where "the act of injuring an employee for the purpose of preventing her from performing her official duties tends to entail especially violent consequences."

As for the degree of risk posed, the court noted that the statute only applies where the officer has suffered physical injury. This "certainty" of "injury to another" clearly meets the statutory definition.

Be Careful What You Fish For

2011-01-04T14:06:00.001-05:00

United States v. Bengis, No. 07-4895-cr (2d Cir. January 4, 2011) (Feinberg, Cabranes, Hall, CJJ)

Three defendants pled guilty to various offenses arising from their South African lobster fishing businesses; they illegally harvested large numbers of rock lobsters from South African waters for export to the United States, conduct that violated both South African and United States law. This opinion addresses the government’s appeal of the district court’s legal conclusion that South Africa was not entitled to restitution. The Circuit reversed.

The district court had first held that South Africa did not have a property interest in the illegally harvested lobsters. The appellate court disagreed. Under South African law, lobsters caught illegally are not the property of those who caught them. They are subject to seizure by the government, which can then sell them and keep the proceeds. Thus, the defendants’ conduct, which included evading the seizure of overharvested lobsters, deprived South Africa of that income stream.

The district court also held that South Africa was not a “victim” under the restitution statues because it failed to show that it suffered any loss caused by the defendants’ conduct. The Circuit again disagreed, even though the defendants pled guilty only to importing the lobsters into the United States. By smuggling the lobsters out of South Africa knowing that they had been unlawfully harvested, the defendants still deprived South Africa of the potential income from any seized, overfished lobsters.

Finally, the district court had concluded that calculating a restitution award would overly complicate and prolong the proceedings. But the Circuit noted that experts in the district court had already calculated likely loss amounts using two different methodologies. The Circuit selected the higher of the two and held that it “seems to us a sufficient loss calculation methodology under the circumstances presented by this case.” Unfortunately for the defendants, that methodology produced a loss in excess of $61 million.

Over-VI’ed

2011-01-04T13:39:00.002-05:00

United States v. Preacely, No. 09-2580-cr (2d Cir. December 21, 2010) (Raggi, Lynch, Wallace, CJJ)

In this unusual, three-opinion decision the majority remanded for resentencing, finding that the record was ambiguous as to whether the district judge understood his departure authority.

Background

Jamar Preacely pled guilty to a five-year-mando crack conspiracy pursuant to a cooperation agreement. Twenty-seven years old when he was arrested, he had sustained several drug convictions when he was younger, and was categorized by the Sentencing Guidelines as a “career offender.”

He spent about two years in custody on the federal case, then was released on bail. For the next three years, it seems, Preacely turned his life around. He entered and excelled at several rehabilitation programs, stopped using drugs, and actively cooperated in several criminal investigations.

At sentencing, as a career offender, he faced an offense level of 31 and was automatically placed in criminal history category VI, with a sentencing range of 188 to 235 months. Despite a very strong government § 5K1.1 motion and the vigorous arguments of his counsel, the district court sentenced him to 94 months’ imprisonment.

Judge Wallace’s Opinion

A two-judge majority vacated the sentence. For his part, Judge Wallace found that the record was unclear whether the sentencing judge understood that he had the authority to depart “horizontally” from Category VI, even though the record made clear that the judge understood that he could downward depart in other ways.

What concerned Judge Wallace was that the judge repeatedly harped on the fact that Preacely was in category VI, and made it seem as if he did not understand that career offender treatment was not mandatory. For example, after hearing a summary of Preacely’s extraordinary rehabilitation, the judge answered: “I am dealing with a Category VI career offender, regardless of all of what you said.”

The Circuit remanded so that the district court could expressly consider departing from career offender treatment based on “an individualized consideration” of Preacely’s case.

Judge Lynch’s Opinion

Judge Lynch concurred, citing the same ambiguity in the record. The sentencing court was required to consider both Preacely’s evidence of rehabilitation and his designation as a “category VI” offender, not merely the latter. Judge Lynch also added some interesting language about the severity of career offender treatment, calling the resulting sentence here “distinctly inflated”: “[E]ven for a man with a history of multiple (if mostly minor) criminal convictions (almost exclusively tied to the possession and sale of narcotics), a sentence of nearly sixteen years in prison for the possession of a few thousand dollars worth of cocaine seems remarkably severe.”

Judge Raggi’s Opinion

Judge Raggi dissented because she did not see the any ambiguity in the record. The district court “frequently - and correctly - ... put Preacely in Category VI because he qualified as a career offender.” Moreover, the district court “manifested an understanding of its complete discretion to sentence outside the Guidelines.” Even if there were an ambiguity, however, Judge Raggi would have remanded for “clarification,” not for resentencing.

Waiving Bye-Bye

2011-01-02T11:56:00.002-05:00

United States v. Arevalo, No. 09-0576-cr (2d Cir. December 21, 2010) (Jacobs, Kearse, Straub, CJJ)

Defendant Manuel Vigil pled guilty to conspiracy to commit murder in aid of racketeering and using a firearm in connection with a crime of violence. He did so pursuant to a plea agreement that contained an appeal waiver - he promised not to “file an appeal or otherwise challenge” his conviction or sentence if the district court imposed a sentence of 195 months’ imprisonment or less.

When he was sentenced, although Vigil disputed certain facts in the presentence report, the district court did not resolve any of the disputes. It ultimately sentenced him to 157 months’ imprisonment.

Despite the waiver, Vigil filed a pro se notice of appeal. His attorney then filed an Anders brief, but the circuit bounced it. After counsel repeatedly ignored the court’s orders to cure the Anders brief, the court appointed new appellate counsel, who argued that the district court violated Rule 32(i)(3) by not resolving the factual disputes, and that this was not covered by the appellate waiver.

That Rule requires the district court to either “rule on” or deem immaterial “any” dispute relating to the presentence report. The Second Circuit had not previously decided whether an appellate waiver covered Rule 32 errors. Here, however, it held that the waiver applied. The language of the waiver that Vigil agreed to “plainly includes a waiver of his right to claim errors arising out of the ... crafting of Vigil’s sentence.”

Nor did the Rule 32 error void the appellate waiver, even though a defendant’s interest in the accuracy of the presentence report continues after sentence is imposed. The harm associated with potential errors in the report - primarily relating to decisions made by the Bureau of Prisons based on the report’s contents - does not amount to a due process violation, unlike, say, a district court’s reliance on such erroneous information.

PATRIOT Games

2011-01-02T11:36:00.001-05:00

United States v. Abu-Jihaad, No. 09-1375-cr (2d Cir. December 20, 2010) (Raggi, Hall, Chin, CJJ)

Defendant Hassan Abu-Jihaad, whose birth name was Paul R. Hall, was convicted of communicating national defense information about the movement of a Navy battlegroup to unauthorized persons. On appeal, his primary challenge was to the use of evidence that the government obtained pursuant to the Foreign Intelligence Surveillance Act (“FISA”). The circuit affirmed.

Background

Despite changing his last name from “Hall” to “Abu-Jihaad,” which, according to the court, means “Father of Jihad,” the defendant enlisted in the Navy in January of 1998 without any trouble. For the next four years he was cleared to receive classified national defense information. But a chain of circumstantial evidence revealed that, in 2001, he passed classified information about the movement of Navy ships headed for the Persian Gulf to other jihad supporters.

The investigation of Abu-Jihaad began after the 2003 search of the bedroom of one Babar Ahmad, a London-based individual with ties to Azzam publications, an organization that in 2001 maintained several pro-jihad websites. Authorities found a computer disc containing a file with a three-page document describing the anticipated spring 2001 deployment of ten Navy ships carrying about 15,000 people from the Pacific coast to the Persian Gulf.

The evidence proving that Abu-Jihaad had been the source of this information was strong, even if circumstantial. First, he had access to the information - out of hundreds of potential individuals, he was one of only forty with access to the relevant transit plan. Second, he had communicated with Azzam via email during the relevant period, and in those communications had revealed his personal support for jihad, even against the United States. Third, in 2006, he made statements in wiretapped telephone conversations in which he all but admitted what he had done.

After a jury trial, Abu-Jihaad was convicted and sentenced to the statutory maximum of ten years’ imprisonment.

The Appeal

On appeal, Abu-Jihad challenged the use of evidence obtained through court orders issued under FISA. He argued primarily that the statute, 50 U.S.C. 1801, et seq., as amended by the PATRIOT Act, was unconstitutional on its face.

FISA permits a special FISA court to authorize electronic surveillance “for the purpose of obtaining foreign intelligence information.” As originally enacted in 1978, FISA required a high-ranking executive branch official to certify that this was “the purpose” of the warrant. Courts, including the Second Circuit, noted that FISA intended for the gathering of foreign intelligence information to be the “primary” objective of the surveillance. But the 2001 PATRIOT Act changed this standard. Under the PATRIOT Act’s amendments to FISA, foreign intelligence gathering need no longer be the “primary” purpose of the requested surveillance; it need only be “a significant purpose.”

Abu-Jihad argued the “primary purpose” requirement was essential to the constitutionality of FISA surveillance under the Fourth Amendment, but the circuit disagreed. All the Fourth Amendment’s warrant requirement demands is a “showing of probable cause reasonable to the purpose being pursued.” But if multiple purposes are being pursued - such as both foreign intelligence gathering and a criminal investigation - the Fourth Amendment “does not require the government to identify a primary purpose or limit its ability to secure a warrant to satisfaction of the standards for that purpose.” Rather, the government may “secure a warrant under the probable cause standards applicable to any purpose that it pursues in good faith.”

The PATRIOT Act did not modify the standards underlying FISA’s warrant requirement. It only changed the degree to which foreign intelligence gathering must be the purpose of the surveillance. The change from certifying foreign intelligence gathering as a “significant” rather than a “primary” purpose of the surveillance is not unreasonable under the Fourth Amendment. Indeed, when the circuit first identified the “primary purpose” standard it was identifying Congress’ intent in enacting FISA, not creating a constitutional mandate.

But, in any event, there is no constitutional problem with the “significant purpose” requirement, because it sufficiently protects against the possibility that the government will be able to obtain surveillance warrants for criminal investigations without demonstrating probable cause. The Fourth Amendment does not require the government to segregate foreign intelligence gathering from law enforcement efforts. As long as foreign intelligence gathering is a “bona fide” purpose of the surveillance the Fourth Amendment is satisfied.

Equal Rejection

2010-12-19T11:05:00.001-05:00

United States v. Thomas, No. 09-4335-cr (2d Cir. December 16, 2010) (Jacobs, Kearse, Straub, CJJ)

The circuit has twice upheld strict liability nature of the “stolen gun” enhancement, currently codified as U.S.S.G. § 2K2.1(b)(4)(A). Here, the defendant raised the issue again, arguing that Apprendi and its progeny have undermined the circuit precedent on this point, and also made an equal protection claim.

The circuit affirmed. Apprendi does not apply because the enhancement does not alter the statutory maximum penalty, and the Booker line does not affect the analysis, because those cases “concern the advisory nature of the Guidelines" and not "the validity of any particular guideline.”

Thomas also argued that “emerging data” indicated that many firearms are erroneously reported stolen and that this should cause the court to revisit the issue. The court disagreed, finding that this data “actually reinforce[d]” the existing rule. Guns that are falsely reported as stolen after being sold to ineligible persons or straw purchasers are “more likely to end up in the hand of a criminal.”

Thomas' equal protection argument pointed out that an the guideline covering explosives only enhances the sentence if the defendant “knew or had reason to believe” that the explosives were stolen. But the circuit found “rational basis” for the distinction. Even though explosives are more dangerous than firearms on an “individualized basis,” stolen firearms are more readily obtainable by felons and “therefore more deadly than stolen explosives in the aggregate.” Thus, because there is a “reasonably conceivable state of facts” to support the distinction between stolen firearms and stolen explosives, the equal protection challenge fails.

PC World

2010-12-19T09:09:00.003-05:00

United States v. Diaz, No. 10-317 (2d Cir. December 15, 2010) (Cabranes, Pooler, Wesley, CJJ) (per curiam)

In October, the court issued a non-precedential summary order holding that the Fair Sentencing Act (the "FSA") is not retroactive. See "Summary Summary" posted October 27, 2010. This per curiam is a published opinion to the same effect, at least where the defendant was "convicted and sentenced before the FSA was enacted."

Nominally, at least, the door is still open for FSA retroactivity arguments for defendants whose conduct occurred before the FSA, but whose conviction and sentences took place afterwards.

Summary Summary

2010-12-19T08:54:00.002-05:00

Here are the two latest summary orders of interest.

In United States v. Spitsyn, No. 09-4698-cr (2d Cir. December 16, 2010), the court agreed with the parties that the district court relied on clearly erroneous findings of fact in a bank fraud case to support ts finding that all of the checks the defendants cashed were relevant conduct. However, the court rejected the defendant's request that the court order that the resentencing occur on the existing record. Instead, the district court will have the discretion to reopen the record if it sees fit.

In United States v. Roseboro, No. 09-5002-cr (2d Cir. December 8, 2010), although the court agreed that the district court erred in attributing criminal history points to a conviction that fell outside the applicable time periods set out in U.S.S.G. § 4A1.2(e) and (k)(2), it found that the error was harmless. The sentence the district court selected was a within-Guideline sentence even in the lower criminal history category, and the district judge made clear that he would have imposed the same sentence regardless of the defendant's criminal history category.

Labor Pains

2010-12-19T08:51:00.002-05:00

United States v. Markle, No. 06-1600-cr (2d Cir. December 14, 2010) (Jacobs, Pooler, Parker, CJJ)

In United States v. Enmons, 410 U.S. 396 (1973), the Supreme Court held that extortion liability under the Hobbs Act, 18 U.S.C. § 1951, did not extend to violence in pursuit of “legitimate labor ends” that occurs during a lawful strike that is intended to achieve “legitimate collective-bargaining objectives.”

Defendant Markle was convicted of attempted Hobbs Act extortion after a violent confrontation arising from two unions' turf war over the right to perform “fine sweep work” - the preparation of a floor surface before installing tile - at a construction site in upstate New York. He argued both in the district court and on appeal that Enmons precluded liability.

The circuit disagreed. The Enmons defense is not available if there is no legitimate labor union objective. Courts have generally limited the defense to the context of strikes or collective bargaining negotiations between unions and employers. It does not apply to “violence committed by one union against another for the purpose of ‘establishing the proper allocation of work between’” two different groups of unionized workers. Violence committed “outside the context of a labor-management dispute, by one union against another, does not have a legitimate collective-bargaining objective under the Hobbs Act.”

Plain Terror

2010-12-18T16:56:00.003-05:00

United States v. Marcus, No. 07-4005-cr (2d Cir. December 7, 2010) (Calabresi, Straub, Wesley, CJJ)

This is Marcus’ second go-round in the circuit. He won the first time, in August of 2008, (see “Sex Post Facto”, posted August 18, 2008). The government got cert, and the Supreme Court reversed, holding that the first panel had used an incorrect plain error standard. In this decision, on remand from the Supremes, Marcus had only a partial win.

The underlying conduct is particularly disturbing. From October of 1998 through June of 1999, Marcus was in a consensual, albeit kinky, sexual relationship with “Jodi.” This nature of the relationship changed in October 1999 when Jodi refused to recruit her sister to become one of Marcus’ “sex slaves.” In response, Marcus “punished” Jodi severely, and began to terrorize her regularly. With this, the relationship became nonconsensual.

In January of 2000, Marcus directed Jodi to move to New York and forced her to create a website called “Slavespace.” She worked eight or nine hours a day on the site but Marcus received all of the revenues. This was not a voluntary arrangement. Even after she found full time work of her own, Marcus made her continue working on the site, and would brutalize her physically and sexually if he was unhappy with her efforts. The trial evidence described a particularly harrowing “punishment” that occurred in April of 2001.

In March of 2001, Jodi told Marcus that she wanted to end their arrangement. He said he would let her go if she endured one final punishment, but she was so terrorized by the punishment that she did leave. A few months later, the woman with whom she was living told Marcus that she did not want Jodi there any more. Jodi moved out and their contact gradually diminished, ending entirely in 2003.

In 2007, the government charged Marcus with violating the federal forced labor statute, 18 U.S.C. § 1589, and the sex trafficking statute, 18 U.S.C. § 1591(a)(1). Those statutes were enacted on October 28, 2000, but the indictment charged Marcus with violating them from January of 1999 through October of 2001. Marcus did not seek a jury instruction based on the statutes’ enactment date, nor did he raise any issue about retroactive application in his Rule 29 motion.

On his appeal, however, he argued that the statutes were applied to him retroactively in violation of the Ex Post Facto Clause. The panel, reviewing this unpreserved claim, applied binding circuit precedent, under which plain error review required a new trial if there was “any possibility, how matter how unlikely,” that an “uninstructed jury would have convicted the defendant based exclusively on pre-enactment conduct.” It accordingly vacated the conviction on both counts. A concurrence, authored by then-Judge Sotomayor, pointed out that although the panel was bound by the circuit’s existing plain error test, this test was inconsistent with Supreme Court precedent. The concurrence would have vacated only the sex trafficking count and would have affirmed the forced labor count because for that count the was “no plausible argument” that the jury would have differentiated between Marcus’ pre-and post enactment conduct.

On the government’s appeal, the Supreme Court reversed and remanded because the “any possibility however remote” standard was indeed inconsistent with that Court’s plain error review precedents.

In this do-over, the original panel, with Calabresi substituting for Sotomayor, agreed with the original opinion’s concurrence. It found that there could only be plain error under the fourth prong of the plain error test - the error must have “seriously affected the fairness, integrity or public reputation of” the proceedings - if there was a “reasonable probability that the jury would not have convicted him absent the error.”

Here, with respect to the forced labor statute, there was no such “reasonable probability.” The government presented post-enactment evidence sufficient to satisfy the elements of that statute. The forced labor on the “Slavespace” began in January of 2000, before the statute’s October enactment, but continued into at least June of 2001 - the April 2001 punishment episode was itself post-enactment. Thus, the jury would have found that Marcus obtained Jodi’s labor through the threat of serious physical harm and actual physical harm - the statutory standard - after October of 2000. Nor would there have been any “reasoned basis” for a jury to differentiate between Marcus’ pre- and post- enactment conduct. Indeed, if anything Marcus’ use of force against Jodi increased post-enactment.

By contract, however, the court adhered to his original ruling on the sex trafficking conviction. In fact, the government conceded on this point. Marcus transported Jodi to New York in early 2000, before the statute was enacted. From then on, he harbored her there. Thus, the conduct supporting this conviction “differed materially before and after October 2000 such that there is a reasonable probability that the erroneous jury charge affected the outcome of the trial” and the “fairness integrity or public reputation of the proceedings.”