Federal Criminal Lawyer Blog

On Friday, the Eleventh Circuit Court of Appeals, where lawyers go when appealing a federal civil or criminal case that comes out of Georgia, Florida, or Alabama, issued its opinion in United States v. Di Pietro. Linsy Di Pietro was convicted of arranging marriages between illegal immigrants and U.S. citizens to help the immigrants obtain permanent legal status. The Court affirmed the district court’s refusal to dismiss the indictment on vagueness and preemption grounds.

Vagueness
Ms. Di Pietro was convicted of aiding and abetting violations of 8 U.S.C. § 1325(c). That federal statute prohibits marriage fraud: knowingly entering “into a marriage for the purpose of evading any provision of the immigration laws.” She argued that, although the statute clearly prohibited her conduct, it is void for vagueness as applied to others. She further argued that the statute implicates the right to marry, and hence the First Amendment, requiring a heightened vagueness standard. The Court rejected her vagueness challenge because “a plaintiff who engages in some conduct that is clearly proscribed cannot complain of the vagueness of the law as applied to others.” There is no exception for vagueness challenges implicating the First Amendment.

Preemption
In what the Court called a “novel” argument, Ms. Di Pietro also asserted that Florida’s marriage laws, which she said allow such marriages of convenience, preempted the federal statute. Preemption is based upon the Supremacy Clause, providing a basis for invalidating state or local laws when they conflict with laws of the United States. Ms. Di Pietro’s argument “turn[ed] the Supremacy Clause on its head.” State laws cannot trump federal laws, so preemption “does Ms. Di Pietro no good.”

The full opinion is available here.

Last week, the Eleventh Circuit Court of Appeals issued its opinion in United States v. Kottwitz. This opinion is important because it explains in detail when a trial court must instruct the jury on good faith reliance on the advice of his advisor. The Court also addressed the sufficiency of the evidence on defendants’ Klein conspiracy and tax fraud and evasion charges.

In holding that the trial court had abused its discretion in refusing to give the good faith reliance instruction, the Court thoroughly reviewed the law regarding such instructions. The instruction is designed to refute the government’s proof of the defendant’s intent. “The defendant bears an ‘extremely low’ threshold to justify the good faith reliance instruction and does not need to prove good faith.”

White-collar criminal defense attorneys often deal with good faith reliance issues and should keep Kottwitz in mind when arguing for such an instruction. The “good faith” defense is often the single most important issue when prosecutors go after a person based on what he or she did in the business context. A person who acts in good faith cannot be guilty where he or she did not intend to break the law. The lawyers in this case struggled to get this concept across to the jury, but were thwarted in their efforts when the trial judge took a different view of the appropriate instruction for the jury.

The full opinion is available here, including Judge Birch’s dissent on the issue of sufficiency of the evidence of the conspiracy.

The Eleventh Circuit Court of Appeals held last week that a ten-year delay between indictment and arrest did not deprive Victor Garcia Villarreal of his constitutional right to a speedy trial. The Court employed a four-factor balancing test, holding that although the length of the delay gave rise to a presumption of prejudice, the reason for the delay, failure to promptly assert the right, and lack of actual prejudice showed that Villarreal was not denied his right to a speedy trial. In weighing the final three factors, the Court gave substantial deference to the district court’s factual findings that Villarreal had evaded arrest and the delay had caused the government actual prejudice, rather than the defendant.

The full opinion in United States v. Villarreal is available here.

Last month, the Eleventh Circuit Court of Appeals held that 18 U.S.C. § 924(c), which makes it a federal crime to use or possess a firearm in connection with a crime of violence, can apply to crimes of violence committed outside the United States. In U.S. v. Belfast, the first case prosecuting an individual under 18 U.S.C. § 2340A (the Torture Act,) the Court upheld a § 924(c) conviction where the American citizen defendant tortured people in Liberia.

The defendant, a man of many names whom the court referred to as Emmanuel, is the American born-and-raised son of Charles Taylor, a former president of Liberia who is currently on trial for crimes against humanity in the Special Court for Sierra Leone. President Taylor put Emmanuel in charge of the “Anti-Terrorism Unit,” which was known in Liberia as the “Demon Forces.” In that role, Emmanuel tortured many individuals between 1999 and 2002. Twelve pages of the Court’s 87-page opinion recount horrifying details of that torture.

The Court justified the application of § 924(c) to crimes of violence committed extraterritorially by arguing that the plain language of § 924(c) provides for its application to any crimes that “may be prosecuted in a court of the United States.” Because the Torture Act, which applies extraterritorially, may be prosecuted in federal courts, the Court reasoned, “a § 924(c) charge can arise out of extraterritorial conduct that is found to be in violation of the Torture Act.”

In so holding, the Court glossed over the general presumption that statutes apply only domestically, with extraterritorial effect only where congressional intent is clear. Without citing any case law approving the application of § 924(c) to conduct outside the Unites States, the Court distinguished U.S. v. Small, a Supreme Court case holding that the word “any” in a different federal criminal statute could not overcome that Congress normally legislates with only domestic concerns in mind.

We believe this case would be a good candidate for the Supreme Court to grant certiorari if Emmanuel appeals this decision. If that happens, we will provide an update on the case.

The full opinion in U.S. v. Belfast is available here.

Last week, the Eleventh Circuit Court of Appeals, sitting en banc, decided United States v. Irey. The 142-page majority opinion recounted gruesome sex crimes that Mr. Irey admitted to committing against as many as 50 Cambodian girls, some as young as four years old. The Court held that the 17½ year sentence ordered by the federal district court judge was a substantively unreasonable downward variance and remanded for sentencing within the Sentencing Guidelines range, which was 30 years at both the top and bottom. As one of the dissenting judges noted, “hard facts often lead to bad law” and we worry that this case will unduly limit district court judges’ discretion in imposing variances in future sentencing decisions.

The lengthy majority opinion began with an account of Mr. Irey’s criminal conduct and case. In short, Mr. Irey repeatedly traveled to Cambodia and China, where he bought underaged Cambodian girls to abuse in horrific ways that the Court said set Mr. Irey apart from “many examples of man’s inhumanity” that steadily flow through the Court of Appeals. During that abuse, he produced “some of the most graphic and disturbing child pornography that has ever turned up on the internet.” He later distributed those images, which have become widely known as “the Pink Wall series.” He was charged with and pleaded guilty to one count of violating 18 U.S.C. § 2251(c), which prohibits producing such images of child pornography elsewhere, then transporting them into the United States.

Under the Sentencing Guidelines, the adjusted offense level for Mr. Irey’s conduct would have led to an advisory sentence of life imprisonment. However, the statutory maximum for his crime as charged was 30 years. For that reason, the Guidelines range was 30 years.

At sentencing, the defense introduced the reports and testimony of two experts in the fields of psychology and psychiatry to address Mr. Irey’s diagnosis of pedophilia. The court also heard from Mr. Irey’s friends and family, who characterized him as a “hero.” The government did not introduce any experts or other witnesses. The sentencing judge focused on Mr. Irey’s diagnosis and otherwise good character in sentencing him to 17½ years in prison, followed by a lifetime of supervised release.

The majority opinion extensively reviewed the history of sentencing law, concluding that it must apply an abuse of discretion standard to its review. The Court held (and the dissenting judges disagreed) that an appellate court may, in its review, itself weigh the 18 U.S.C. § 3553(a) factors to be used in imposing a sentence to determine whether the district court’s balancing of the factors was substantively unreasonable. Based on its own protracted analysis of the § 3553(a) factors, the Court held that the district court’s major variance from the Guidelines sentence was substantively unreasonable.

While the sickening facts in this case make a 17½ year sentence surprising, we worry that the law that the Eleventh Circuit had to make to substitute its reasoning for the district court judge will negatively impact sentencing decisions in this circuit. As Paul Kish commented to the Daily Report, “It is a message to district judges that there are boundaries beyond which you cannot go or you will incur the wrath of certain judges whose views differ from yours.” Judges will be less likely to stray from the Guidelines, despite their advisory status since U.S. v. Booker.

The full opinion in U.S. v. Irey is available here, along with concurring and dissenting opinions, totaling more than 250 pages.

The Daily Report article regarding this case is available here.

Today President Obama signed the Fair Sentencing Act of 2010 into law. This federal law reduces the disparity between criminal sentences for crack and powder cocaine from 100-to-1 to 18-to-1 and eliminates the mandatory minimum five-year sentence for simple possession of crack cocaine. While this is a step in the right direction, a significant disparity remains and the law has not been made retroactive.

The major features of the law include the following:
• The five-year mandatory minimum sentence now applies to cases involving at least 28 grams of crack cocaine, compared to the prior 5 grams.
• The ten-year mandatory minimum sentence now applies to cases involving at least 280 grams of crack cocaine, compared to the prior 50 grams.
• The Act eliminates a five-year mandatory minimum for simple possession of crack cocaine.
• The Act increases financial penalties for major drug traffickers.
• Within 90 days, the United States Sentencing Commission (USSC) must increase the sentences under the advisory Sentencing Guidelines for defendants using violence in drug trafficking crimes and emphasize certain aggravating and mitigating factors.
• The Comptroller General must report to Congress on the effectiveness of drug court programs.
• In five years, the USSC must report to Congress on the impact of the law’s changes to cocaine sentencing law.

The full text of the Act is available here.

In late May, the Eleventh Circuit Court of Appeals, which hears appeals from federal cases in Florida, Georgia, and Alabama, decided U.S. v. Cunningham. The Court held that the federal statute that provides for revocation of supervised release is constitutional under the Fifth and Sixth Amendments, despite its provision for reimprisonment of a criminal defendant based upon conduct that is not proven to a jury beyond a reasonable doubt.

The supervised release revocation statute is at 18 U.S.C. § 3583(e)(3). It permits a district court to “revoke a term of supervised release, and require the defendant to serve in prison all or part of the term of supervised release” upon a finding “by a preponderance of the evidence that the defendant violated a condition of supervised release.”

In 2000, in Apprendi v. New Jersey, the Supreme Court held that, other than prior convictions, any fact that increases the penalty for a crime beyond the prescribed statutory maximum must be submitted to a jury and proved beyond a reasonable doubt. In 2004, the Supreme Court explained in Blakely v. Washington that the “statutory maximum” is the maximum sentence a judge may impose based upon the facts reflected in the jury verdict or admitted by the defendant.

The Eleventh Circuit distinguished the revocation of supervised release from Apprendi and Blakely. The Court reasoned that the defendant was already convicted of the underlying offenses and was granted only conditional liberty, depending upon his obeying the limits of his supervised release. In holding that a violation of supervised release need only be proven to a judge by a preponderance of the evidence, the Court joined six other circuits.

The Cunningham opinion is available here.

Last week, the Eleventh Circuit Court of Appeals, which sits here in Atlanta, Georgia, issued its opinion in U.S. v. Garcia-Cordero. The Court held that the federal immigration law that requires persons transporting international passengers to “bring and present” those passengers to immigration officers does not violate the Fifth Amendment privilege against self-incrimination as applied to criminal defendants who smuggle aliens into the United States.

The federal immigration statute at 8 U.S.C. § 1324 criminalizes bringing illegal immigrants to the United States and provides an increased penalty for failure to “bring and present” the alien to an immigration officer at a designated port of entry. The Court held that, because the immigration laws are more regulatory than criminal, and because the statute applies to all persons transporting all aliens (rather than only those without prior authorization to enter,) the statute “does not target a highly selective group inherently suspect of criminal activities.” Thus, the statute is a part of a regulatory regime, against which the Fifth Amendment privilege may not be asserted.

The Court's opinion is available here.

In this post last week, we announced the Supreme Court’s decision in Skilling v. U.S. The Court held that 18 U.S.C. § 1346, the honest services law that the government has been using to prosecute nearly everything as a federal crime, applies only to bribery and kickback schemes.

The honest services fraud statute simply defines “scheme or artifice to defraud” as used in the mail- and wire fraud statutes to “include a scheme or artifice to deprive another of the intangible right of honest services.” Congress enacted this statute quickly after the Supreme Court, in McNally, held that the fraud statutes were “limited in scope to the protection of property rights.” Congress intended to incorporate pre-McNally case law that had recognized fiduciary duties as intangible rights to honest services and a breach of those duties as fraud.

The majority’s rationale for limiting the honest services fraud statute to only bribes and kickbacks was that such cases constituted the “core” of pre-McNally honest services fraud cases and that statutes should be construed, where possible, rather than invalidated. Because, the Court said, circuit conflicts and disagreements regarding honest services fraud cases were primarily outside the bribery and kickback scheme cases, limiting the application of the statute to those cases would avoid vagueness troubles.

The government argued that undisclosed self-dealing cases should be included, but the Court held that the relative infrequency of and intercircuit inconsistencies regarding such cases disallowed the statute’s application to undisclosed self-dealing. In a lengthy footnote, the Court indicated numerous questions Congress would need to clearly address to include such cases in the statute.

Justice Scalia, an open critic of the honest services fraud statute, disagreed with the majority’s limitation of honest services fraud to bribery and kickback schemes. In his concurring opinion, he argued that the Court had no precedent for “paring down” a statute to save it from invalidity and that, even with the limitation, the statute remains unconstitutionally vague. Although the Court clarifies what acts constitute a breach of the “honest services” obligation, the statute and case law do not clearly determine the character of the fiduciary capacity to which the restriction applies. What is the source of fiduciary obligations; who qualifies as a fiduciary; and is anything beyond a breach of fiduciary duty necessary for conviction?

As Justice Scalia recognized, the majority's decision fails to resolve a host of issues surrounding the honest services doctrine. For this reason, litigation surrounding the meaning of this amorphous doctrine will not end with the Court's decision in Skilling. Also, by extending the Yates decision to cases on direct appeal, the impact of the favorable ruling in Mr. Skilling's case is yet to be determined.

While we are relieved that the previously outrageous reach of this statute has finally been limited, we are disappointed that Justice Scalia’s analysis did not gain the support of the majority of the Court.

Earlier this month, the Supreme Court announced its decision in Dolan v. United States, resolving a circuit court split. This decision abrogates U.S. v. Maung, a 2001 Eleventh Circuit case that held that a federal court imposing a criminal sentence lacks the authority to enter a restitution order after the 90-day deadline has expired. The Supreme Court held that, at least where the sentencing court clearly advised before the deadline that it would order restitution, that court may order the specific amount after the deadline has expired.

The majority opinion by Justice Breyer is available here, along with a dissenting opinion by Chief Justice Roberts, joined by Justices Stevens, Scalia, and Kennedy.

Last week, the Department of Justice announced a new nationwide mortgage fraud initiative named “Operation Stolen Dreams.” Sally Quillian Yates, U.S. Attorney for the Northern District of Georgia here in Atlanta, issued an immediate press release to show local federal law enforcement’s commitment to investigating and prosecuting mortgage fraud.

So far, the U.S. Attorney’s Office in this district has brought the following types of criminal charges in mortgage fraud cases:

In relation to the collapse of banks:
· Bank fraud
· Bribery (paying and receiving)
· Securities fraud
· Structuring of Cash Deposits
· False statements
· Payment of kickbacks
· False entries in bank books, records, and statements
· Aggravated identity theft
· Bankruptcy fraud
· Conspiracy

In relation to purchase money “reverse mortgage” fraud and alteration of Multiple Listing Service (MLS) records:

· Bank fraud
· Aggravated identity theft
· Conspiracy

In relation to other recent mortgage fraud prosecutions:

· Bank fraud
· Check fraud
· Mail fraud
· Bankruptcy fraud
· Conspiracy

As you can see, a multitude of fraud charges are possible under the broad heading of “mortgage fraud.” We will continue to follow this renewed focus on such cases here in the Northern District of Georgia.

The press release is available here.

This morning, the United States Supreme Court issued its opinions in three honest services fraud cases: Skilling, Black, and Weyhrauch. We have previously discussed these cases here (discussion of cases and background of honest services fraud,) here (Skilling,) here (Black), and here (Weyhrauch.) In Skilling, the Court limited the federal criminal honest services fraud statute to only bribery and kickback schemes. Based upon that opinion, the Court reversed in Black and Weyhruach. The Court also held that Jeffrey Skilling of Enron fame was not denied a fair trial due to publicity and community prejudice.

We will provide analysis of these opinions next week. In the meantime, the opinion in Skilling is available here; the opinion in Black is available here; and the single-sentence per curium opinion in Weyhrauch is available here.