Federal Sentencing Guidelines Amendments Part I: Sex Crimes

October 29, 2009 by Kish & Lietz

Ed. Note: Next week, the U.S. Sentencing Commission’s 2009 Amendments to the federal Sentencing Guidelines will go into effect. Once a week for the next month, we will post an analysis of some of the more important changes to the Guidelines. The Sentencing Commission’s reader-friendly guide to the 2009 amendments is available here.

The U.S. Sentencing Commission has changed the federal Sentencing Guidelines in a number of ways relating to sex crimes. These changes will go into effect this Sunday, November 1, 2009. The amendments address a circuit split regarding an enhancement for undue influence of a minor, resulting in a positive change in Eleventh Circuit law, as well as changes to the child pornography and human trafficking guidelines.

Undue Influence Amendments

§2A3.2 (Criminal Sexual Abuse of a Minor Under the Age of Sixteen Years (Statutory Rape) or Attempt to Commit Such Acts) and §2G1.3 (Promoting a Commercial Sex Act of Prohibited Sexual Conduct with a Minor; Transportation of Minors to Engage in a Commercial Sex Act or Prohibited Sexual Conduct; Travel to Engage in Commercial Sex Act or Prohibited Sexual Conduct with a Minor; Sex Trafficking of Children; Use of Interstate Facilities to Transport Information about a Minor) each contain an enhancement for undue influence where “a participant otherwise unduly influences the minor to engage in prohibited sexual conduct.”

Two issues have arisen involving the undue influence enhancement. The first is whether it can apply in attempt cases. The second is whether it can apply where the only “minor” involved is a law enforcement officer. Three circuits have addressed these issues, but have decided them differently. The Eleventh Circuit held in U.S. v. Root that the enhancement does apply in both situations. The Seventh Circuit, on the other hand, held in U.S. v. Mitchell that it does not apply where the victim is an undercover officer and suggested that it would not apply in cases of attempt. The Sixth Circuit, in U.S. v. Chriswell, left the attempt issue open, but held that the enhancement does not apply where the victim is an undercover agent.

The Sentencing Commission resolved the circuit split in favor of applying the enhancement in applicable attempt cases, but not where the only “minor” involved in the offense is an undercover law enforcement office. The Commission reasoned that unlike other enhancements, the undue influence enhancement properly focuses on the effect on the minor.

The Sentencing Commission held a public meeting on September 16, 2009 with a possible vote on whether this amendment should be made retroactive to previous defendants’ sentences. The minutes from that meeting have not yet been published. We hope the amendment is made retroactive to provide relief to defendants sentenced in the Eleventh Circuit.

An analysis by the Office of Research and Data on the Impact of the Influencing a Minor Amendment is Made Retroactive is available here.

Child Pornography Amendments

§2G2.1 (Sexually Exploiting a Minor by Production of Sexually Explicit Visual or Printed Material; Custodian Permitting Minor to Engage in Sexually Explicit Conduct; Advertisement for Minors to Engage in Production) and §2G2.2 (Trafficking in Material Involving the Sexual Exploitation of a Minor; Receiving, Transporting, Shipping, Soliciting, or Advertising Material Involving the Sexual Exploitation of a Minor; Possessing Material Involving the Sexual Exploitation of a Minor with Intent to Traffic; Possessing Material Involving the Sexual Exploitation of a Minor) are amended to reflect changes in the child pornography statutes at 18 U.S.C. §§ 2251 et seq.

The child pornography statutes were amended to add streaming video to the offenses. Everywhere “producing a visual depiction” is mentioned, the Commission added “transmitting a live visual depiction” and everywhere “possessing material” is mentioned, the Commission added “accessing with intent to view the material.” These amendments ensure that viewing streaming video, whether or not the video is stored in any permanent format, will result in the same penalties as saving the material.

The Commission also amended §2G2.2 to provide for a new offense at 18 U.S.C. sec 2252A(a)(7), which makes it unlawful to knowingly produce with intent to distribute or knowingly distribute “child pornography that is an adapted or modified depiction of an identifiable minor.” This offense has no mandatory minimum and carries a maximum sentence of fifteen years. The guideline now provides for a base offense level of 18 for such an offense, which is four levels lower than other child pornography distribution offenses. The lower level accounts for the fact that creating the image does not involve actual exploitation of the child and the enhancements for distribution and use of a computer will likely apply.

Human Trafficking Amendments

The Commission amended §2L1.1 (Smuggling, Transporting, or Harboring an Unlawful Alien) to include an alternative enhancement prong at §2L1.1(b)(8)(B). If greater than the coercion enhancement at §2L1.1(b)(8)(A), this enhancement will apply where the alien harboring was for the purpose of prostitution and the defendant receives a §3B1.1 adjustment for aggravating role. In this case, a two-level increase applies, but if the alien who engaged in the prostitution was a minor, a six-level increase applies. Application Note 6 was also amended to note that §3A1.3 (Restraint of Victim) may apply.

Additional amendments were made regarding human trafficking, but because they do not involve sex crimes, we will address them in a later post.

Eleventh Circuit Affirms Dismissal of Money Laundering Charges Against Attorney

October 28, 2009 by Kish & Lietz

In this post earlier this month, we discussed U.S. v. Velez, a federal criminal case in which an attorney, Ben Kuehne, was charged with money laundering based upon payments of legal fees. On Monday, the Eleventh Circuit affirmed the Southern District of Florida’s dismissal of the money laundering charges.

Fabio Ochoa-Vasquez was extradited to the U.S. in 2001 to faces charges for cocaine smuggling. His criminal defense team hired Kuehne to investigate the source of the money Ochoa would use to pay their legal fees and verify that it was not criminally derived property. Kuehne drafted six opinion letters advising that the funds were clean. The money to pay the legal fees were wired to his trust account, then he wired them, minus his retainer, to Ochoa’s defense team.

The government alleged that Kuehne and his co-defendants knew that the funds were tainted and supported the opinion letters with falsified documents. They were charged with money laundering in violation of 18 U.S.C. § 1957. However, § 1957(f)(1) excludes “any transaction necessary to preserve a person’s right to representation as guaranteed by the sixth amendment to the Constitution” from the scope of the money laundering statute.

The Government argued that the exception in § 1957(f)(1) was nullified by Caplin & Drysdale, a 1989 Supreme Court case holding that the sixth amendment right to counsel does not protect the right of a criminal defendant to use criminally derived proceeds for legal fees. That case, however, dealt with the criminal forfeiture statute, not the money laundering statute. The forfeiture statute contains no exemption for funds used to pay legal fees.

The Eleventh Circuit Court’s opinion pointed out that Caplin & Drysdale actually supports the statutory money laundering exception for payments of legal fees. In Caplin & Drysdale, the Court reasoned that Congress could have included such an exemption, but had not done so. The Eleventh Circuit viewed the exemption as “a crucial distinction” between the money laundering charges and the forfeiture provision, finding that Caplin & Drysdale’s only bearing on the exemption is to affirm it.

The Kuehne opinion then turned to statutory construction, noting that the government had conceded its interpretation would read all meaning out of the exemption. Because only transactions involving criminally derived proceeds are criminalized by § 1957, reading the exemption to refer to only non-tainted funds would render it superfluous. “We do not believe Congress intended such an absurd result, which nullifies the provision and divorces it from its statutory context, thereby violating the basic canons of statutory construction.”

“The district court was eminently correct in holding that Defendants are not subject to criminal prosecution under § 1957(a).” While criminally derived proceeds are subject to forfeiture under Caplin & Drysdale, they may not be the basis for a criminal prosecution.

Significantly, the Eleventh Circuit also recently decided U.S. v. Kaley, another case involving the payment of legal fees to criminal defense attorneys. We discussed that case in this previous post.

The Eleventh Circuit’s opinion in Kuehne is available here.
Thorough commentary on the case is available at the Southern District of Florida Blog.

Eleventh Circuit Holds “Walkaway” Escape is Not a Violent Felony under Federal Armed Career Criminal Act

October 26, 2009 by Kish & Lietz

Earlier this year, we discussed the United States Supreme Court’s decision in Chambers v. U.S. in this post. In that case, the Court held that a conviction for failure to report to a penal institution falls outside the scope of the Armed Career Criminal Act’s definition of “violent felony.” In light of that decision, the Eleventh Circuit held today in U.S. v. Lee that non-violent walkaway escapes from unsecured custody also do not qualify as “violent felonies” under the ACCA. This decision is a reversal of prior Eleventh Circuit law holding that all escapes are violent felonies for the purposes of the ACCA.

Shawntrail Lee was convicted of felony possession of a firearm in the Southern District of Georgia. He had three prior convictions: eluding police officers in the second degree, conspiracy to commit armed robbery, and escape based upon leaving a halfway house. The district court granted Lee a downward variance and sentenced him to the mandatory minimum 180 months (15 years) required by the ACCA.

Conviction for being a felon in possession of a firearm ordinarily carries a mandatory minimum sentence of 10 years in prison. The ACCA increases that minimum to 15 years where the defendant has three prior “violent felony” or serious drug convictions.

The law regarding “violent felonies” has been in a state of flux. Before last year, any crime that posed a serious risk of harm qualified as a violent felony under the ACCA. The Eleventh Circuit held in U.S. v. Taylor that, because even peaceful walkaway escapes always posed a serious risk of injury, failure to return to a halfway house was a violent felony under the ACCA. Every circuit but the Ninth held that all escapes were violent felonies. In 2008 in Begay v. U.S., however, the Supreme Court held that to be a violent felony, the crime must be “roughly similar, in kind as well as degree of risk posed, to the examples” enumerated in the statute: burglary, arson, extortion, or the use of explosives. Then in Chambers, the Court held that failure to report to a penal institution does not fall within the ACCA, rejecting the “notion that all escapes are created equal.”

Today the Eleventh Circuit vacated Mr. Lee’s sentence and remanded it for resentencing. Shortly after Chambers was decided, the Supreme Court vacated Mr. Taylor’s sentence. Following a letter brief from the government that it no longer sought the ACCA enhancement, the Eleventh Circuit remanded his case for resentencing without the ACCA enhancement, as well.

The Eleventh Circuit's opinion in Lee is available here.

Supreme Court Will Hear Another Miranda Case: Where Criminal Defendant Neither Waived Nor Invoked Rights, Is Further Interrogation Proper?

October 22, 2009 by Kish & Lietz

The United States Supreme Court granted certiorari in Berghuis v. Thompkins. The Court will decide what the default rule ought to be where a suspect confirms that he understands his rights, but neither waives nor invokes them.

In this case, Thompkins was read his Miranda rights and confirmed that he understood them, but then was uncommunicative for nearly three hours of interrogation before answering “Yes” to a question regarding whether he prayed for forgiveness for “shooting that boy down.” He nodded his head every so often and declined a peppermint, but was otherwise withdrawn, refusing to sign an advice of rights form or anything else. His statement was used at trial and a jury convicted him.

The Sixth Circuit Court of Appeals below reversed the denial of his federal habeas petition, holding that the state had failed to show that Thompkins’s course of conduct amounted to an implied waiver of his rights. We hope the Supreme Court remembers its words from Miranda: “[A] valid waiver will not be presumed simply from the silence of the accused after warnings are given or simply from the facts that a confession was in fact eventually obtained.”

The 6th Circuit’s opinion below is here.
The Petition for Certiorari is here.
The Brief in Opposition is here.
The Petitioner's Reply Brief is here.
Connecticut and six other states' Amicus Brief is here.

Skilling Added to the Mix of Honest Services Fraud Cases to Be Heard by the Supreme Court

October 16, 2009 by Kish & Lietz

Earlier this week, the Supreme Court granted certiorari in another honest services fraud case: Skilling v. United States. Jeffrey Skilling, of Enron notoriety, is challenging his conviction for honest services fraud and the venue of his trial.

The honest services fraud statute, 18 U.S.C. § 1346, expands the definition of a scheme or artifice to defraud under the mail and wire fraud statutes to encompass schemes that “deprive another of the intangible right of honest services.” This federal criminal case will address whether the statute requires the government to prove that the defendant’s conduct was intended to achieve “private gain” rather than to advance the employer’s interests, and, if not, whether the statute is unconstitutionally vague. A second issue in the case involves when a presumption of jury prejudice arises.

We have previously discussed two other honest services fraud cases, Black v. United States and Weyhrauch v. United States, that the Court will also hear this term. Our discussion of Black is here and of Weyhrauch is here.
The differences between the three cases are:
Black: A corporate executive’s use of a fraudulent scheme to increase his own compensation that caused no harm to the corporation.
Skilling: A corporate executive’s use of a fraudulent scheme with no personal gain or benefit to the corporation.
Weyhrauch: A state legislator’s failure to disclose conflict of interest where state law does not require such disclosure.
Although these three cases have not been consolidated, we hope that the Court takes a comprehensive approach and straightens out the myriad issues plaguing interpretation of this law.

In its amicus brief in support of Skilling’s petition for a writ of certiorari, the National Association of Criminal Defense Lawyers (NACDL) encouraged the Court to resolve three principal issues: whether courts have the power to engraft limiting principles on the vague language of § 1346; if courts do not have that power, whether § 1346 is void for vagueness; and if they do, the content of those limiting principles. In addition to addressing these three issues, we hope that the Court takes the opportunity to create some meaningful and clear distinctions between public sector and private sector honest services fraud.

For an interesting analysis of the potential outcomes from these cases, see this post at the SCOTUSblog.
For more detail on the chaos plaguing interpretation of this statute, see this New York Times article. (A favorite tidbit of ours quotes Justice Scalia carrying it to its logical extreme, saying, “it would seemingly cover a salaried employee’s phoning in sick to go to a ballgame.”)
The briefs filed in Skilling are available at the SCOTUSblog.

Money Laundering Charge Against Criminal Defense Attorney Argued in Federal Appellate Court

October 5, 2009 by Kish & Lietz

Last month the Eleventh Circuit Court of Appeals heard oral arguments in U.S. v. Velez, a federal criminal case in which the lower court dismissed a money laundering charge based upon payments of legal fees. The Eleventh Circuit sits here in Atlanta, but also hears oral arguments in Montgomery, Alabama, and Jacksonville and Miami, Florida. The judges’ questions showed skepticism of the prosecution’s arguments.

The case revolves around a defendant’s payment of legal fees to his criminal defense team, including Roy Black. Fabio Ochoa-Vasquez was extradited to the U.S. in 2001 to face charges of conspiracy to smuggle cocaine. His defense team hired Ben Keuhne, a well-respected attorney in South Florida, to investigate the source of the money Ochoa would use to pay fees and to verify that it was not criminally derived property. Kuehne was assisted by Gloria Velez, a CPA in Colombia, and Oscar Saldarriaga Ochoa, a Colombian attorney. Velez, Kuehne, and Saldarriaga are the defendants in the case.

Kuehne’s trust account received wire transfers totaling more than 5 million dollars from various bank accounts. Kuehne drafted six opinion letters advising the criminal defense team that he had analyzed the sources of all funds. Immediately after each of the first four opinion letters, a wire transfer was made to the criminal defense team, totaling the amount sent to Kuehne’s trust account minus $50,000, which the court assumed to be Kuehne’s retainer.

Count One of the indictment charged the defendants with money laundering in violation of 18 U.S.C. § 1957, despite § 1957(f)(1), which provides an exception for “any transaction necessary to preserve a person’s right to representation as guaranteed by the sixth amendment to the Constitution.” Because the funds were used to pay the criminal defense team, the district court judge dismissed Count One. The district court’s order is available here. The government appealed the dismissal to the Eleventh Circuit.

At oral arguments on September 23, the judges questioned the government’s attorney aggressively with questions on the exception. At one point, a judge commented “Oh come on.” The mood shifted considerably when Kuehne’s lawyer began. He argued that legal fees that are criminally derived property may be seized, but lawyers cannot lose their liberty. Allowing that result would cause a chilling effect, which Congress tried to remove by including the exception. Another judge even cracked a joke when Congress’s public policy choices were raised.

For more information on this case, visit the Southern District of Florida Blog, by David Oscar Markus. He wrote an amicus brief on behalf of the National Association of Criminal Defense Lawyers on this issue. He also has blogged on the many other problems the prosecution has encountered with this case.