Federal Criminal Lawyer Blog

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 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.

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.

This Monday, the Eleventh Circuit held in Gilbert v. United States that, for federal sentencing purposes, the act of being a U.S.S.G. § 4B1.1 career offender is essentially a separate offense. Based upon the Supreme Court’s retroactive decision in Begay and the Eleventh Circuit’s implementation of that decision in Archer, Gilbert is actually innocent of committing two violent felonies, the basis for that offense. Because circuit law squarely foreclosed his claim when he raised it at sentencing, on appeal, and in his first 28 U.S.C. § 2255 motion, Gilbert was entitled to relief under 28 U.S.C. § 2241. He may now be eligible for immediate release.

The Original Sentence and Appeals
In 1997, Gilbert was convicted of a crack cocaine offense and sentenced as a career offender under § 4B1.1 based upon previous convictions for possessing crack with intent to sell and carrying a concealed firearm. Under the then-mandatory Sentencing Guidelines, the enhancement increased his Guidelines range from 151-188 months to 292-365 months. Gilbert argued that carrying a concealed firearm was not a crime of violence, but the district court judge disagreed and, stating that he thought the sentence was too high, reluctantly sentenced Gilbert to 292 months. On appeal, the Eleventh Circuit held that carrying a concealed firearm was a crime of violence for purposes of the career offender guideline. Gilbert’s pro se § 2255 motion was denied in 1999, all post-conviction options now exhausted.

Legal Developments in 2008
In 2008, the Supreme Court decided Begay v. United States, holding that under the Armed Career Criminal Act (ACCA) the term “violent felony” applies only to crimes that are similar in kind and degree of risk to those expressly listed in the statute. That same year, the Eleventh Circuit applied the Begay analysis in United States v. Archer, abrogating its holding in the 1998 Gilbert decision. The Court held that “the crime of carrying a concealed firearm may no longer be considered a crime of violence under the Sentencing Guidelines.” Also in 2008, Amendment 706 provided a two-level reduction in base offense levels for crack cocaine offenses and was made retroactive.

In response to these developments, the district court sua sponte ordered the parties in Gilbert’s case to file responses regarding eligibility for a sentence reduction. The government argued that Gilbert was not entitled to any relief under Begay and Archer because a second § 2255 motion is permissible only where new evidence is discovered or the Supreme Court makes a previously unavailable constitutional law retroactive. The government also insisted that Amendment 706 could not apply because Gilbert was sentenced under the career offender guideline. The district court reluctantly agreed.

The Issue Before the Eleventh Circuit
Gilbert filed a motion to reopen his original § 2255 motion, suggesting that the court could treat it as a motion for relief under § 2241, which provides relief when a petitioner can prove actual innocence of the crime for which he was convicted. The district court denied his motion, but granted a certificate of appealability. The Eleventh Circuit held that the “savings clause” of § 2255 permitted relief under § 2241 under the authority of Wofford v. Scott and the doctrine of “actual innocence.”

The “savings clause” of § 2255 permits traditional habeas corpus relief under § 2241 where a § 2255 motion is inadequate or ineffective to test the legality of detention. In Wofford, the Eleventh Circuit held that the savings clause applies in the rare case when (1) the claim is based upon a retroactively applicable Supreme Court decision; (2) the holding of that decision establishes that the petitioner was convicted for a nonexistent offense; and (3) circuit law foreclosed the claim when it should have been raised.

The government argued that Gilbert failed to meet the second requirement: that he was convicted for a nonexistent offense because the career offender guideline was not a separate offense. The Court disagreed, applying the Supreme Court’s analysis in Sawyer v. Whitley that a sentencing enhancement based upon proof of statutory aggravating factors establishes a separate offense and raises the possibility that a defendant might be actually innocent of that offense. The Court extended Sawyer to the career offender context, commenting that, “To accept the government’s position that the law provides Gilbert no remedy for the clear wrong that has been done to him is to elevate form so far over substance as to make unrecognizable the concept of fair play and due process.”

Gilbert has served 171 months of his sentence. The maximum sentence he could have received for his underlying conviction was 188 months. He is likely entitled to an amended Guideline range of 130-162 months under Amendment 706, so “he is, in a very real sense, presently serving his illegal enhancement.” The Court vacated Gilbert’s sentences and remanded for resentencing. In addition, the Court issued a separate order to expedite issuance of the mandate.

The recent Eleventh Circuit opinion in Gilbert v. United States is available here.
The Supreme Court's opinion in Begay is available here.
The Eleventh Circuit's opinion in Archer is available here.

We have discussed cases applying the Begay analysis at the following posts:
Chambers (Supreme Court: failure to report to a penal institution is not violent felony)
Lee (Eleventh Circuit: walkaway escape is not violent felony)
Harris (Eleventh Circuit: fleeing from police at high speed is violent felony)
Hunter (Eleventh Circuit: possession of firearm is not violent felony under Archer, but providing no relief from illegal sentence)

Last week, a panel of the Eleventh Circuit Court of Appeals, which sits here in Atlanta, Georgia, reversed a decision by the newest member of their Court, Judge Beverly Martin. Prior to her appointment to the Eleventh Circuit, Judge Martin was a district court judge here in the Northern District of Georgia. As a member of that court, in U.S. v. Farley, she decided that a 30-year mandatory minimum sentence for a man who crossed state lines with the intent to have sex with a child under twelve was cruel and unusual punishment where the “child” did not exist and the defendant had no criminal history and was unlikely to re-offend.

The Eleventh Circuit held that such a sentence “does not surpass constitutional bounds” under Harmelin v. Michigan, a Supreme Court case that was never brought to Judge Martin’s attention in the lower court. In reversing the District Court decision that Farley’s mandatory sentence would be grossly disproportionate to his crime, the Eleventh Circuit analyzed Harmelin in detail. The Court emphasized that, under Harmelin, “outside the context of capital punishment, successful challenges to the proportionality of particular sentences are exceedingly rare” and noted that the Eleventh Circuit “has never found a term of imprisonment to violate the Eighth Amendment.” Harmelin also held that the mandatory nature of a penalty is not an Eighth Amendment issue.

The Eleventh Circuit stressed the gravity of crimes involving sexual abuse of children. Incredibly, the Court compared the fiction of the child’s existence to the seizure of drugs by police: according to the Court, in both cases, the defendant is unable to inflict harm through no fault of his own.

For more information on the details of this case, Judge Martin’s decision below, and the Eleventh Circuit opinion, this Daily Report article discusses the case at length.

The Eleventh Circuit’s 112-page opinion in U.S. v. Farley is available here. We should caution that the opinion contains a fair amount of graphic detail.

This morning, the United States Supreme Court issued its opinion in Barber v. Thomas. In a 6-3 decision, the Court held that the calculation method used by the Bureau of Prisons (BOP) to determine the amount of “good time” earned on federal criminal sentences is lawful. The Court rejected two other methods for calculating good time, one proposed by federal prisoners and one suggested by the dissenting justices. As a result of this holding, the taxpayers will be forced to continue paying for prisoners longer than Congress may have wanted.

This case involved the interpretation of 18 U.S.C. § 3624(b)(1), which states:

[A] prisoner who is serving a term of imprisonment of more than 1 year other than a term of imprisonment for the duration of the prisoner’s life, may receive credit toward the service of the prisoner’s sentence, beyond the time served, of up to 54 days at the end of each year of the prisoner’s term of imprisonment, beginning at the end of the first year of the term, subject to determination by the Bureau of Prisons that, during that year, the prisoner has displayed exemplary compliance with institutional disciplinary regulations. … [C]redit for the last year or portion of a year of the term of imprisonment shall be prorated and credited within the last six weeks of the sentence.

Two federal prisoners argued that the BOP has been interpreting the good time provision incorrectly, resulting in prisoners serving longer sentences than intended by Congress. The Court, using an example 10-year sentence with maximum good time credits earned, evaluated three distinct methods of calculating good time: the method currently used by the BOP, the method proposed by the prisoner petitioners, and a third method supported by the dissent.

The BOP’s method, which the Court upheld, interprets “term of imprisonment” in the statute to mean “entire imposed sentence” in some places, but “time actually served” when calculating good time. The BOP sets earned time aside at the end of each 365-day period. When the time remaining in a sentence minus earned time equals less than one year, the BOP applies a 54/365 ratio to prorate that last year and determine the prisoner’s release date. In the Court’s 10-year example, the prisoner receives 470 days of good time credit under this method.

The petitioners’ method is the most simple, interpreting “term of imprisonment” as “entire imposed sentence” throughout the statute. The petitioners would have BOP add 54 days of good time credit for each year in the imposed sentence. For a sentence of 10 years, the prisoner would receive 540 days of good time credit. Both the majority and dissenting justices rejected this method as irreconcilable with the statute.

The dissent’s method interprets “term of imprisonment” consistently as “the span of time that a prisoner must account for to obtain release.” This method would count each year’s good time credit toward the next year, so some “years” of a prisoner’s term may be completed in less than 365 days. In the 10-year example, this approach gives a prisoner a maximum of 533 days of good time credit.

Although the dissent’s approach is the most consistent use of the statutory text, makes the most logical sense, and would save taxpayers “untold millions of dollars,” the majority “conclude[d] that the Bureau’s method reflects the most natural reading of the statute.”

Justice Breyer delivered the opinion and Justice Kennedy issued the dissenting opinion, joined by Justices Stevens and Ginsburg. The opinion and dissent in Barber v. Thomas are available here.

Last month Attorney General Eric Holder issued a memorandum to all federal prosecutors regarding Department of Justice policy on charging and sentencing. This memo supersedes prior memoranda on this subject issued between 2003 and 2005 by former A.G. John Ashcroft and former Deputy A.G. James Comey. The new memo encourages greater fairness in prosecution than Bush-era policies by repeatedly calling for “individualized assessment” of cases in charging, plea-bargaining, and sentencing.

The following excerpt provides an overview of the content of the memo:

[E]qual justice depends on individualized justice, and smart law enforcement demands it. Accordingly, decisions regarding charging, plea agreements, and advocacy at sentencing must be made on the merits of each case, taking into account an individualized assessment of the defendant’s conduct and criminal history and the circumstances related to the commission of the offense (including the impact of the crime on victims), the needs of the communities we serve, and federal resources and priorities. Prosecutors must always be mindful of our duty to ensure that these decisions are made without unwarranted consideration of such factors as race, gender, ethnicity, or sexual orientation.

The entire memo is available here.

The United States Supreme Court decided two important federal criminal cases yesterday. We discussed the reasonable opinion in U.S. v. Carr, a SORNA case, in this post yesterday. We must now address the disappointing decision in Berghuis v. Thompkins, which we briefly explained in this post last October.

The Court divided along traditional ideological lines, with Justice Kennedy issuing the majority opinion joined by the conservative bloc and Justice Sotomayor writing a lengthy dissent for the liberal justices. The majority held, counter-intuitively, that a person must make an unambiguous statement to invoke his right to remain silent.

In this case, Mr. Thompkins was in custody, awaiting transfer to another state. He was seated in a hard, straight-backed chair in a small room. With the exception of declining a peppermint and commenting on his chair’s discomfort, he remained silent for nearly three hours of interrogation, until asked whether he believed in God. He said, “Yes.” and began to cry. When asked if he prayed, he again said, “Yes.” He was then asked if he prayed to God for forgiveness “for shooting that boy down.” Again, he said, “Yes,” and looked away. He refused to sign a Miranda waiver form or make a written statement.

The Court analogized the issue to the Miranda right to counsel, which must be invoked unambiguously and unequivocally. The majority opinion noted a desire to avoid difficulties of proof and provide guidance to officers. In addition, the Court held that Thompkins waived his right to remain silent because he chose to speak and there was no basis to conclude that he did not understand his rights. Police are not required to rewarn suspects and, the Court held, nearly three hours of interrogatory monologue in a straight-backed chair did not amount to coercion.

Both the majority opinion and dissent in Berghuis v. Thompkins are available here.

SCOTUSblog rounded up comments from and links to articles regarding the controversial opinion in this post this morning.

Last Friday, the Eleventh Circuit, which hears federal appeals here in Atlanta, Georgia, reversed Lance Lall’s conviction for credit card fraud related offenses. Although Lall was Mirandized and arguably not in custody, the Court held that his confessions were not voluntarily given, in violation of the Due Process Clause. The investigating officer had told Lall that he would not pursue charges against him.

The case began with an armed robbery at the home of twenty-year-old Lall, his parents, and his siblings. The robbers said they were searching for money and equipment owned by Lance Lall. The detectives interrogated Lall in his bedroom, telling him and his family that information he shared would not be used to prosecute him. Lall showed the detectives the equipment he used to commit identity theft and explained how each device worked. Within hours, a detective alerted the Secret Service to the evidence. Several days later, the detective called Lall in to the police station, telling him he would not need a lawyer and that he would not charge him with this. Lall was ultimately arrested by the Secret Service and tried in federal court.

The Court first analyzed the statement given in Lall’s bedroom. The Court held that the detective’s statement that he would not pursue charges was misleading and undermined the Miranda warnings he initially gave, but did not resolve the issue of whether Lall was in custody for that statement. Instead, the Court analyzed the case using the Due Process Clause, holding that the totality of the circumstances demonstrated that Lall’s statements were involuntarily given. Factual misrepresentations are not enough to render a confession involuntary. However, the deceptive promises made by the detectives here were so egregious as to make the subsequent statements involuntary. In addition, “[i]t is inconceivable that Lall, an uncounseled twenty-year-old, understood at the time that a promise by [the state police detective] that he was not going to pursue any charges did not preclude the use of the confession in a federal prosecution.”

The Court held that the same analysis applied to the second statement given by Lall at the police station, with discussion regarding whether that issue had been properly preserved for review. The Court also held that the physical evidence derived from the statements in Lall’s bedroom should have been suppressed. Although the items were in plain view, the detective admitted that he did not know what the credit card fraud equipment was without Lall’s explanation.

The Eleventh Circuit’s opinion in U.S. v. Lall is available here.

This morning the United States Supreme Court held that 18 U.S.C. § 2250, a part of of the Sex Offender Registration and Notification Act (SORNA), does not apply to sex offenders whose interstate travel occurred prior to SORNA’s effective date in July 2006. This case resolves a circuit court split in which the Eleventh Circuit, which hears appeals from federal cases in Georgia, Florida, and Alabama, took the opposite view.

In an opinion by Justice Sotomayor, the Court explained that the three elements of Section 2250 (requirement to register, interstate travel, and failure to register) “must be satisfied in sequence.” The interpretation that the statute does not impose liability unless a person travels and fails to register after becoming subject to SORNA’s requirements accords with the text of the statute, which sets forth the travel requirement in the present tense. The Court also noted that Section 2250 is just one of several provisions of SORNA and that SORNA’s overall structure also indicates that Section 2250 should be limited to its specific purpose, rather than expanded to tackle all of SORNA’s broader intent.

The Court noted that because Section 2250 liability could not be predicated on pre-SORNA travel, the Court needed not address whether the statute violated the Ex Post Facto Clause.

The Court’s opinion, as well as a concurring opinion by Justice Scalia and a dissent by Justice Alito and joined by Justices Thomas and Ginsburg, is available here.

This morning the United States Supreme Court issued three opinions.

In Graham v. Florida, the Court held that the Eighth Amendment’s Cruel and Unusual Punishment Clause does not permit a juvenile offender to be sentenced to life in prison without the opportunity for parole for a nonhomicide crime.

Justice Kennedy wrote the opinion, joined by Justices Stevens, Ginsburg, Breyer, and Sotomayor. Chief Justice Roberts concurred only in the judgment. Justice Stevens filed a concurring opinion, joined by Justices Ginsburg and Sotomayor. Justice Thomas filed a dissenting opinion joined by Justice Scalia and in part by Justice Alito, who also filed a dissent. The opinions in Graham v. Florida are available here.

In U.S. v. Comstock, the Court upheld 18 U.S.C. § 4248, which allows a federal district court to order the civil commitment of a mentally ill, sexually dangerous prisoner after the date he would otherwise be released.

Justice Breyer delivered the opinion, joined by Chief Justice Roberts and Justices Stevens, Ginsburg, and Sotomayor. Justices Kennedy and Alito filed concurring opinions. Justice Thomas dissented, joined in part by Justice Scalia. The opinion in U.S. v. Comstock is available here.

In Abbott v. Abbott, the Court held that a parent has a right of custody under the Hague Convention by reason of that parent’s ne exeat right, which is the authority to veto the other parent’s decision to leave the child’s country of residence.

Justice Kennedy wrote the opinion and was joined by Chief Justice Roberts and Justices Scalia, Ginsburg, Alito, and Sotomayor. Justice Stevens dissented, joined by Justices Thomas and Breyer. The opinion in Abbott v. Abbott is available here.

Yesterday, the Eleventh Circuit, which hears appeals from federal cases here in Atlanta, held in U.S. v. Phaknikone that profile photographs from the criminal defendant’s Myspace account were inadmissible evidence of character. The government argued that the photos demonstrated modus operandi: the defendant’s gangsta style as shown in the photographs identified the defendant because he robbed banks “like a gangster.” The Court saw through the argument, but held that admitting the photos was harmless error, due to the “overwhelming” evidence of Phaknikone’s guilt.

The relevant photograph in this case showed Phaknikone in the driver’s seat of a car. A tattoo is visible on his neck, as well as a large tattoo on his left arm, and he is holding a handgun in his right hand. A passenger is handing something to a child in the back seat of the car. The Court held that this photograph “proves only that Phaknikone, on an earlier occasion, possessed a handgun in the presence of a child. Although the photograph may portray a ‘gangster-type personality,’ the photograph does not evidence the modus operandi of a bank robber who commits his crimes with a signature trait.”

Phaknikone was convicted on fifteen counts stemming from seven bank robberies in late 2006 and early 2007 in Northeast Georgia. He was captured fleeing one robbery and confessed to three more. Evidence regarding clothing and shoes worn by the robbers, eyewitness accounts of his tattoos, and behavior during the robberies was introduced by the government, as well. The Court held that the evidence was overwhelming, viewed in its totality, so the admission of the photographs was harmless error.

The Court’s opinion is available here.

View larger version of image here.

This week, the Eleventh Circuit held that the rule making the federal Sex Offender Registration and Notification Act (SORNA) retroactive was valid. In passing the rule, the Attorney General did not provide a notice and comment period as required by the Administrative Procedure Act (APA). The Court held, over Judge Wilson’s strong opinion concurring only in the result, that the Attorney General had “good cause” to skip the mandatory notice and comment procedures.

This issue is the subject of a Circuit Court split. The Fourth Circuit has held that the Attorney General complied with the APA, whereas the Sixth Circuit concluded that the retroactivity rule is invalid for failure to show good cause.

The good cause exceptions are contained at 5 U.S.C. §§ 553(b)(3)(B) and (d)(3). These exceptions allow the agency to skip notice and comment “when the agency for good cause finds (and incorporates the finding and a brief statement of reasons therefore in the rules issued) that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.” The exception must be read narrowly.

The AG argued that the rule would (1) provide guidance to eliminate uncertainty and (2) prevent the delay in registration of sex offenders who would evade during the notice and comment period. The Court held that the guidance rationale alone may not have established good cause, but counted “to some extent” because people needed to know whether to register. As for the public safety rationale, the Court held that emergency situations are not necessary for the good cause exception. The Court held that SORNA’s increased punishment over existing laws justified bypassing the APA’s notice and comment requirement.

Judge Wilson concurred in the result only. In his well-reasoned opinion, he explained that the delay entailed in a notice and comment period would not have caused any emergency or threat of real harm. Federal law already provided for punishment for failure to register and state law provided for punishment as harsh as that provided by SORNA. He concurred in the result due to harmless error. His concluding paragraph sums up our feelings on the case:

I am troubled by the precedent the majority opinion sets today. It is now easier for an administrative agency to avoid notice and comment in our circuit by claiming an emergency or threat of serious harm, whether or not the facts support one. As Dean’s counsel pointed out at oral argument, today’s holding will apply to APA appeals unrelated to SORNA.

On Friday, the Eleventh Circuit Court of Appeals issued its opinion in United States v. Lee. The Court held affirmed Mr. Lee's convictions, holding that his communications with a "mother" of minors, absent any travel arrangements, were sufficient evidence of attempting to entice a minor. Judge Martin filed a vigorous dissent, arguing that the evidence failed to support that Mr. Lee took a substantial step toward that crime. She concurred with the majority in affirming Mr. Lee’s other federal criminal convictions.

Mr. Lee communicated with a postal inspector who was posing as a mother of two minor girls. He never communicated with anyone claiming to be a minor, although he asked the “mother” to share information and photographs with her daughters and requested photos in return. He discussed meeting them in general terms, but at one point noted that their first meeting would be as friends. He never made travel arrangements.

Judge Martin declared her “concern that the majority opinion does not clearly demarcate despicable but lawful talk from a criminal attempt punishable by up to 30 years in prison.” While the interaction was “disturbing,” no evidence showed that Mr. Lee took any steps to extend his relationship beyond his home. His actions should not count as a “substantial step toward enticing a child to engage in illicit sexual conduct.” For that reason, Judge Martin would have vacated the attempt conviction.

The Court’s opinion and Judge Martin’s dissent are available here.

As we reported last week, the United States Sentencing Commission (USSC) has been voting on proposed amendments to the Federal Sentencing Guidelines. Today the USSC issued a press release explaining additional amendments, including:

• Expanding the availability of alternatives to incarceration;
• Amending policy statements regarding age, mental and emotional conditions, physical condition, and military service to recognize their potential relevance;
• Criminal history calculation changes we discussed in this post last week;
• Expanding the guideline for offenses involving individual rights to include new hate crime offenses; and
• Changing the guidelines regarding sentencing organizations by clarifying required remediation efforts and reporting obligations for effective compliance and ethics programs.

Although the Commission has not made the specific language of its proposed amendments public, we are especially anxious to see what the Commission has to say about the availability of alternatives to incarceration. In the press release the Commission mentioned that it has already agreed to amend the guidelines by extending Zone B of the sentencing table by an additional offense level. In other words, under the Commission’s proposed amendment, an individual with a final offense level of 11 will no longer be required to go to prison if a Judge exercises her discretion to allow home confinement in lieu of institutional confinement.

Read the press release here.

This Tuesday, the United States Sentencing Commission (USSC) voted to delete 4A1.1(e) from the Federal Sentencing Guidelines Manual. This Guideline addresses the recency of previous imprisonment in calculating the criminal history points that increase a defendant’s sentence.

4A1.1(e) currently reads:

Add 2 points if the defendant committed the instant offense less than two years after release from imprisonment on a sentence counted under (a) or (b) [more than 60 days] or while in imprisonment or escape status on such a sentence. If 2 points are added for item (d) [which adds points where the crime was committed while under a sentence, including probation, etc.], add only 1 point for this item.

On May 10th, this amendment, along with any others passed, will be sent to Congress, as set forth in 28 U.S.C. § 994(p). Congress may pass legislation rejecting the amendments within 180 days. If no action is taken, the amendments will become effective by November 1, 2010. In the meantime, criminal defense lawyers should argue that sentencing courts should not apply 4A1.1(e) for the same reasons the USSC voted to eliminate it.

The proponents of this amendment have argued that the recency and status guidelines are redundant, unfairly adding to the cumulative impact of the criminal history calculation. Statistics have shown that the recency of a prior record, when combined with the status provision in subsection (d), predicts recidivism in only 1 case out of 1000. In addition, not only does recency fail to reflect meaningful differences in past criminal conduct, it is actually more likely to increase punishment for less culpable defendants. The effect 4A1.1(e) and (d) have on deported immigrants who illegally reenter the country is particularly egregious, considering other cumulative guidelines and their usual reasons for re-entry.

The testimony and written statement of Margy Meyers, of the Federal Defender Sentencing Guidelines Committee, and Marianne Mariano, a Federal Public Defender in the Western District of New York, is particularly important reading for practitioners who would argue against application of 4A1.1(e) prior to its taking effect. All of the public comments on the proposed amendments to the Guidelines are available here.

Thank you to L. Burton Finlayson for the heads up on this notable development.

Yesterday the federal Supreme Court decided Padilla v. Kentucky. The Court recognized its “responsibility under the Constitution to ensure that no criminal defendant – whether a citizen or not – is left to the mercies of incompetent counsel. To satisfy this responsibility, [the Court held] that counsel must inform her client whether his plea carries a risk of deportation.”

Until yesterday’s decision, the lower federal courts almost unanimously held that lawyers are required to tell their clients about only ‘direct’ consequences of pleading guilty. Deportation (now called “removal”) has long been seen as a potential collateral consequence of certain convictions. While professional norms have long required such advice, until Padilla, failure to so advise did not meet the Strickland test for ineffectiveness. The Court held that the direct/collateral distinction is inappropriate in a Strickland claim concerning deportation risk.

The Strickland test has two prongs. First the Court must decide whether the attorney’s representation “fell below an objective standard of reasonableness.” The second prong, prejudice to the defendant, was not at issue in Padilla because the lower courts had not reached it. This second prong may be difficult to satisfy in many of these cases because many states require trial courts to advise defendants who plead guilty of potential immigration offenses. Here in Georgia, in 2000 trial courts began advising defendants that a guilty plea “may have an impact” on the defendant’s immigration status. However, Padilla may be a useful tool for challenging certain guilty plea convictions in Georgia prior to 2000.

The opinion, written by Justice Stevens, is available here. Justice Alito issued a concurring opinion, joined by Justice Roberts. They would have limited the rule to prohibit only completely incorrect legal advice. Justice Scalia dissented, joined by Justice Thomas, writing that the Sixth Amendment guarantees the defendant a lawyer only for the defense of the criminal case and not for advice regarding any collateral matters.

Last week, the Eleventh Circuit federal appeals court decided U.S. v. Sneed. In this Armed Career Criminal Act (ACCA) case, the Court decided that U.S. v. Shepard, decided by the Supreme Court in 2005, abrogated the Eleventh Circuit’s 2000 decision in U.S. v. Richardson. The Court held that sentencing courts may look only to Shepard-approved material and facts to which the defendant has assented (such as undisputed facts in the PSI) in determining whether ACCA prior offenses were committed on different occasions.

As we explained in this post, the ACCA provides for a mandatory minimum sentence of 15 years for federal criminal defendants who have three previous convictions for violent felonies or serious drug offenses. Those offenses must have been committed on temporally distinct occasions. In Sneed, the defendant had three previous drug convictions that were charged in a single indictment in Alabama. The state indictment did not provide dates or times for the offenses, so the district court looked to police reports attached to the government’s sentencing memorandum to determine that the offenses were committed on different occasions.

In 2000, the Eleventh Circuit held in Richardson that “determining whether crimes were committed on occasions different from one another requires looking at the facts underlying the prior convictions.” In that case, police reports showed that the prior crimes had been temporally distinct and their accuracy was not contested. The Eleventh Circuit relied on the police reports and concluded that the crimes were distinct.

The Supreme Court decided Shepard in 2005, holding that sentencing courts may only consult certain materials in determining the nature of a defendant’s prior convictions for purposes of ACCA. The Court expressly rejected police reports and stressed developments in the law, Jones and Apprendi in particular, addressing the constitutional concerns requiring a jury’s finding of a disputed fact about prior convictions where that fact is essential to increase a potential sentence. Shepard-approved materials include charging documents, plea agreements, transcripts of plea colloquies, findings of fact and conclusions of law from bench trials, and jury instructions and verdict forms.

The Eleventh Circuit stated that Richardson’s conclusion that courts may look to certain facts underlying prior convictions for the different occasions inquiry is still correct, but held that Shepard abrogated its approval of the use of police reports. Although Shepard addressed a different ACCA determination, the two statutory predicates (type of offense and different occasions) are contained in the same sentence. The Eleventh Circuit held that “there is simply no distinction left” between type of offense and different occasions inquiries for the scope of permissible evidence to be different in determining each statutory predicate.

The bottom line is that the defendant’s mandatory minimum 15-year sentence is tossed, although he still faces a potential max of 10 years for being a felon in possession.

The opinion in this case is available here.

The Health Care bill that passed last night provides for additional funding to the Health Care Fraud and Abuse Control Program (HCFAC). This program was established as a part of the Heath Insurance Portability and Accountability Act (HIPAA) in 1996 “to combat fraud committed against all health plans, both public and private.” The HCFAC program coordinates federal, state, and local law enforcement actions with respect to health care fraud and abuse.

Section 1304 of the bill passed last night provides additional funding to the tune of $250 million between 2011 and 2016 to the HCFAC program. The HCFAC Account is funded by the Federal Hospital Insurance Trust Fund pursuant to 42 U.S.C. § 1395i(k). It covers the costs of:
(i) prosecuting health care matters (through criminal, civil, and administrative proceedings);
(ii) investigations;
(iii) financial and performance audits of health care programs and operations;
(iv) inspections and other evaluations; and
(v) provider and consumer education regarding compliance.

Now is the time to reevaluate compliance programs and prepare for an increase in health care fraud investigations and prosecutions.

A copy of the bill is available here.
A section-by-section analysis of the bill is available here.

Last week in Rehberg v. Paulk, the Eleventh Circuit held that sending “emails to third parties constitute[s] a voluntary relinquishment of the right to privacy in that information.” In this case, the investigators subpoenaed the emails directly from the Internet Service Provider (ISP) through which Rehberg transmitted his messages. The Court held that he did not have a valid expectation of privacy in the email information, so he failed to state a Fourth Amendment violation.

This ruling might be a dangerous precedent, for several reasons. First, the Court of Appeals says that none of us has any privacy in our emails the moment we hit the ‘send’ button. Second, this means that the government can get our otherwise private messages from every ISP we use to connect us with the outside world. This ruling represents one more step towards a lack of privacy, and in favor of the government’s ability to intrude into our lives.

The opinion in Rehberg v. Paulk is here.
A lengthy analysis by Orin Kerr on why the Eleventh Circuit got this wrong is here at the Volokh Conspiracy.

The Supreme Court has granted certiorari in Harrington v. Richter, a federal habeas corpus case out of the Ninth Circuit. The Ninth Circuit held that Richter was prejudiced by his defense lawyer’s unreasonable failure to investigate and present expert testimony on blood evidence and that the state court’s determination that he was not denied effective assistance of counsel was an unreasonable application of clearly established federal law.

The question presented is whether the Ninth Circuit denied the state court the deference mandated by AEDPA and impermissibly enlarged the Sixth Amendment right to counsel by elevating the value of expert opinion testimony to virtually always require criminal defense attorneys to produce such testimony. In addition, the Court asked the parties to brief whether AEDPA deference applies to a state court’s summary disposition of a claim, including under the Strickland test for ineffective assistance of counsel.

The facts of this case would make for an interesting episode of CSI. Both parties agreed that two defendants, Richter and Branscombe, socialized for several hours in Johnson’s house with Johnson and Klein until 2:30 a.m., when they left but Klein decided to spend the night. The prosecution and defense presented divergent theories at trial of the events occurring later that morning, when Klein was killed and Johnson received gunshot wounds.

The central dispute between the prosecution and the defense was Klein's location at the time he was shot. Blood-spatter evidence could have confirmed either the defense’s or the prosecution’s theory of the case, but the state conducted an inadequate forensic investigation. Had Richter’s lawyer chosen to consult a forensic expert for the defense, that expert could have assisted him in evaluating the testimony of the prosecution’s experts or guided him in developing effective cross-examination of those witnesses.

The Ninth Circuit’s lengthy opinion is available here.
The briefs are available at the following links:
Petition for Writ of Certiorari
Brief in Opposition
Reply to Opposition

This morning the Supreme Court issued its opinion in Bloate v. U.S. The Court resolved a circuit court split, holding that additional time granted to criminal defendants to prepare pretrial motions is not automatically excludable from the federal Speedy Trial Act’s 70-day limit under subsection (h)(1). The Eleventh Circuit Court of Appeals, which sits here in Atlanta, previously held the opposite, so this decision marks a change in the law of this circuit. We explained the issues in this case and the Eleventh Circuit case in this post last year.

The government argued that defendants could “lay a trap” for judges by requesting time to prepare motions. The Court noted that a district court judge may still exclude such time from the Speedy Trial Act under subsection (h)(7) if it finds “that the ends of justice served by [a continuance for time to prepare pretrial motions] outweigh the best interest of the public and the defendant in a speedy trial.” The judge need only place these reasons on the record.

The Speedy Trial Act is available here.
The Court’s opinion is available here. The majority was written by Justice Thomas. Justice Ginsburg filed a concurring opinion and Justice Alito filed a dissenting opinion, in which Justice Breyer joined.

This week, the United States Supreme Court handed down its opinion in Maryland v. Shatzer. The case examined the parameters of the protections afforded by Edwards v. Arizona regarding reinterrogation of a criminal suspect after he has requested counsel. The court held that 1) a break in custody lasting more than two weeks between attempts at interrogation is sufficient to avoid the coercive pressures against which Edwards protected and 2) a return to the general prison population amounts to a break in custody for the purposes of this rule.

Justice Scalia delivered the opinion of the Court. Justices Thomas and Stevens each concurred in the judgment but disagreed with the 14-day break in custody rule. Justice Thomas would prefer Edwards be limited to “the circumstances present in Edwards itself” whereas Justice Stevens did not find the bright-line rule to provide enough protection against coerced confessions. We agree with Justice Stevens.

The facts of the case involve allegations of sexual child abuse against Mr. Shatzer while he was incarcerated for another offense. In 2003 a detective attempted to interview Mr. Shatzer about sexual abuse of his 3-year-old son, but Mr. Shatzer declined to speak without an attorney. The investigation was closed.

Two and a half years later, another detective was assigned, who interviewed the son (who had somehow aged 5 years in that period) and acquired more details. That detective then interrogated Mr. Shatzer after obtaining a Miranda waiver. Mr. Shatzer had been transferred to another prison, but had been incarcerated for the entire time. Detectives later administered a polygraph exam. Mr. Shatzer failed, then became upset and incriminated himself.

In the majority opinion, Justice Scalia explained the rationale behind Miranda and Edwards, describing the Edwards protections as “not a constitutional mandate, but judicially prescribed prophylaxis.” He explained that in cases following Edwards, the rule had been applied where the suspects had been in continuous custody without a chance to regain “a sense of control or normalcy after they were initially taken into custody.” Due to the diminished benefits and increased costs of extending Edwards, an extension of Edwards without time limits is not justified. Justice Scalia seemed to choose a 14-day bright-line rule arbitrarily, assuming that two weeks is long enough to “shake off any residual coercive effects of his prior custody.”

In his concurring opinion, Justice Stevens expressed his qualms that “[t]he Court’s analysis today is insufficiently sensitive to the concerns that motivated the Edwards line of cases.” He disagrees with the assertion that Edwards is not a constitutional command because the Fifth Amendment is the source of that protection. He also worries that allowing reinterrogation after only 14 days “disregards the compulsion caused” by a subsequent interrogation of a suspect who has requested a lawyer after being told that one would be provided for him, but have not received counsel. That suspect is likely to feel that the police lied, so he does not really have any right to a lawyer. Justice Stevens suggested a concrete event, such as police providing counsel, rather than or in addition to the time-based rule.

The other issue decided in this case was whether Mr. Shatzer was “in custody” for purposes of the break-in-custody rule. Although he was incarcerated, the Court determined that a return to the general prison population amounts to a “return to their accustomed surroundings and daily routine” with “the degree of control they had over their lives prior to the interrogation.” The Court also assumes that the prisoner suspect understands that the interrogator has no power to increase or decrease his time served. Because of those circumstances, a return to prison qualified as a break in custody.

We believe Justice Stevens took a more reasonable approach to this issue in his concurring opinion. He recognizes that “[a] prisoner’s freedom is severely limited, and his entire life remains subject to government control,” which is “not conducive to shaking off any residual coercive effects of his prior custody. Nor can a prisoner easily seek advice from an attorney, family members, or friends [as emphasized in the majority opinion,] especially not within 14 days; prisoners are frequently subject to restrictions on communications.” In addition, “[p]risoners are uniquely vulnerable to the officials who control every aspect of their lives; prison guards may not look kindly upon a prisoner who refuses to cooperate with police. And cooperation is frequently relevant to whether the prisoner can obtain parole.”

While Justice Stevens agreed that the 2½ year period between interrogations is a basis for treating the second interrogation as no more coercive than the first, he acknowledged that “[n]either a break in custody nor the passage of time has an inherent, curative power.” We agree. Unfortunately, the majority held otherwise.

The full opinion is available here.

Congratulations to Jake Waldrop and the Federal Defender Office here in Atlanta for winning one at the Court of Appeals this week! Yesterday, the Eleventh Circuit held that Federal Rule of Criminal Procedure 35, which imposes a seven-day jurisdictional time limit on modifications of sentences, applies to crack resentencings, as well as original sentencings.

The opinion in the case, U.S. v. Phillips, is available here.
The Federal Defender blog has a post on the case here.
More information on crack resentencing is available here at the Sentencing Law and Policy blog.

Last week, the Third Circuit, which hears appeals from federal cases in Pennsylvania, Delaware, and New Jersey, heard oral arguments in a worrisome electronic privacy case: In The Matter Of The Application Of The United States Of America For An Order Directing A Provider Of Electronic Communication Service To Disclose Records To The Government. The Department of Justice is challenging a denial of a request for cell phone location data in a drug-trafficking case, which was signed by all of the magistrate judges in the Western District of Pennsylvania and affirmed by the district court judge.

At oral arguments, Third Circuit Judge Sloviter seemed understandably concerned about the privacy implications and potential over-reaching by the government in allowing police to obtain information about a person’s location based on cell phone data without probable cause. Judge Tashima, visiting from the Ninth Circuit, seemed more sympathetic to the government’s argument. Judge Roth, also on the panel, did not attend the oral arguments. An audio recording of the arguments is available here.

Professor Orin Kerr, at The Volokh Conspiracy blog, explained the case in this post and blogged the oral arguments in this post. His posts, and the extensive discussion in the comments, provide a good overview of the legal arguments involved in the case. We have also posted the appellate briefs below. We disagree with Professor Kerr’s Fourth Amendment argument that Smith v. Maryland (in which the Supreme Court held that use of a pen register is not a “search” for Fourth Amendment purposes because the user of the phone voluntarily conveys the outgoing numbers to the phone company) is applicable precedent, because a cell phone user actively dials a phone number, but only passively shares his location with the phone company. We hope that the Third Circuit decides that a warrant is necessary for the police to obtain such information.

The statute involved is 18 U.S.C. § 2703(c), which is available here.

The Atlanta Journal Constitution article about this case is available here.

Briefs and Orders in the Western District of Pennsylvania:
The District Court Order affirming magistrate judge's ruling denying the government's request is available here.
The Government's reply memorandum of law in support of request for review is available here.
The Amicus brief of the Federal Defender is available here.
The Amicus brief of Susan Freiwald is available here.
The Amicus brief of the Electronic Frontier Foundation, the ACLU, and the Center for Democracy and Technology is available here.
The Government's memorandum of law in support of request for review is available here.
The Magistrate Court Order Denying Government Request to Obtain Stored Cell Site Records without Probable Cause is available here.

Briefs to the Third Circuit:
The Amicus brief of Susan Freiwald is available here.
The Amicus brief of the Electronic Frontier Foundation, the ACLU, and the Center for Democracy and Technology is available here.

Last week the Eleventh Circuit, which sits here in Atlanta, Georgia, decided U.S. v. Jules. The Court held that “when a district court intends to rely on new information in deciding a motion for the modification of a sentence pursuant to 18 U.S.C. § 3582(c)(2),” both the federal government and the criminal defendant are entitled to notice of the information and an opportunity to respond.

Jules was originally sentenced to 151 months, the bottom of his Guidelines range, for conspiracy to possess with intent to distribute 50+ grams of cocaine base. The Guidelines were subsequently amended to reduce the base offense-level in such a case. Thereafter, Jules requested a modification of his sentence. The probation office sent a memo to the district court detailing misconduct by Jules while in prison. That memo was neither docketed nor provided to either of the parties. The district court relied on the sanctions in the memo in denying Jules’ motion for modification.

The Eleventh Circuit held that, although a defendant in a § 3582(c)(2) proceeding is not afforded all of the protections as at an original sentencing, the “fairness and due process principles embodied in the Federal Rules of Criminal Procedure, the Sentencing Guidelines’ policy statements, and the reasoning of [the Fifth and Eighth Circuits] compel us to hold that each party must be given notice of and an opportunity to contest new information relied on by the district court in a § 3582(c)(2) proceeding. The court also stated that a hearing is permissible for allowing parties to contest such information, but not necessary.

The Eleventh Circuit’s opinion is available here.

Yesterday, the Eleventh Circuit issued an opinion in U.S. v. Patterson. Even though the criminal defense attorney below failed to object to the Presentence Investigation Report (PSI) and Patterson lost his appeal on the plain error standard, this opinion provides a good review of the Eleventh Circuit law regarding intended loss, actual loss, and restitution and the Federal Sentencing Guidelines.

The Guidelines calculate a sentencing range based, in part, on how much ‘loss’ was caused by the defendant’s crime. The sentence is calculated using “intended” loss because a “criminal pays the price for the ambition of his acts, not their thoroughness,” whereas the amount that a criminal must pay back, called “restitution,” “must be based on the amount of loss actually caused by the defendant’s conduct.”

It often is hard to calculate the loss figure, because some fraud crimes result in “actual” loss amounts that differ dramatically from the “intended” loss. That was the problem in this case. This case involved stolen cars, some of which were never recovered and/or owners could not be located, and others were returned to their owners intact. For these reasons, the “intended” loss more than doubled the “actual” loss and restitution. Patterson argued that the loss amount used in sentencing should equal the restitution amount, but the Court rejected his argument, explaining that “cases offer substantial explanations why these figures can diverge.” The Court of Appeals said, “the district court did not err, let alone plainly err.”

The opinion is available here.

Last week the Supreme Court vacated and remanded Briscoe v. Virginia for proceedings consistent with the decision in Melendez-Diaz v. Massachusetts. We discussed Melendez-Diaz last summer in this post.

In Melendez-Diaz, the Supreme Court held that crime lab reports are testimonial statements covered by the Confrontation Clause of the Sixth Amendment. For such reports to be admissible, the forensic analysts must testify as witnesses in criminal trials, both federal and state. Shortly after that decision, the Court granted cert in Briscoe, a case presenting the same issue. Justice Scalia criticized the grant of cert, asking, “Why is this case here except as an opportunity to upset Melendez-Diaz?”

He asked that question at oral argument less than one month ago. SCOTUSblog covered that oral argument thoroughly in this post. They also explained last week’s decision in the context of the changing Court in the first half of this SCOTUSblog post.

The extremely short per curium opinion is available here.

Photo courtesy of the U.S. Army.

This week, the Supreme Court agreed to hear Abbott v. U.S. and Gould v. U.S. These criminal cases involve a deep circuit split among the federal courts that we addressed in this post in September, when the 11th Circuit decided U.S. v. Segarra.

The Armed Career Criminal Act (ACCA), drug laws, and the gun statute 18 U.S.C. § 924(c) each carry heavy mandatory minimum sentences. The ACCA and drug minimums are often longer than the minimum called for by § 924(c). § 924(c) contains a prefatory clause, called the “except” clause, that applies the subsection “[e]xcept to the extent that a greater minimum sentence is otherwise provided by this subsection or by any other provision of law.” The plain language of that clause prohibits application of § 924(c) where defendants are subject to greater minimums.

Continue reading "Supreme Court Grants Certiorari in § 924(c) Cases Regarding Mandatory Minimums in Federal Criminal Firearms Cases" »

Last week, the Eleventh Circuit Court of Appeals, which sits here in Atlanta, Georgia, decided U.S. v. Marquez, a federal criminal RICO case involving two extradition rules, the rule of specialty and the rule of dual criminality. The Court held that those rules concern the court’s personal jurisdiction over the defendant, rather than subject matter jurisdiction. Because personal jurisdiction is subject to waiver, the Court held that Marquez waived the protections provided by the rules by failing to timely assert them.

As we explained in this post last July, the rule of specialty requires countries that request extradition of a person to prosecute that person only for the offenses for which the foreign country surrenders the person. In other words, if the United States asks Spain to extradite someone for charges A, B, and C, once Spain extradites that person, the United States can’t turn around and charge the person with X, Y, or Z. Marquez argued that a superseding indictment changed the basis under which Spain agreed to extradite him.

The rule of dual criminality allows extradition only where the defendant’s actions constitute a crime in both the requesting and surrendering countries. Marquez argued that the extradition request was too vague, rendering it impossible for Spanish courts to determine whether the rule of dual criminality was satisfied.

Because the rules limit the crimes that may be prosecuted, they appear to limit the court’s subject matter jurisdiction. However, the Court held that the extradition process is a means of obtaining personal jurisdiction over a defendant, so a violation of these extradition rules raises the question of personal jurisdiction. Thus, claims of such violations must be raised in a pretrial motion pursuant to Rule 12.

Because Marquez did not assert the rules of specialty or dual criminality until nearly 2.5 years after the final deadline for submission of pretrial motions, the Court held that he “waived his right to assert the protection of the rules of specialty and dual criminality” and failed to show good cause to warrant relief from that waiver.

In U.S. v. Valencia-Trujillo last year, the Eleventh Circuit issued an opinion declining to address the rule of specialty. Our commentary on that decision is available here. We hope that the Court decides to address this important issue in future cases.

The Court’s opinion in Marquez is available here.

The federal Department of Justice has announced its appointment of Andrew Goldsmith as the new national coordinator of criminal discovery initiatives in this press release.

Earlier this month, the DOJ issued three memoranda regarding criminal discovery procedures. These memos set forth policies in an attempt to ensure that prosecutors meet their obligations in sharing information with criminal defense attorneys. They are available to read in full at the following links:

Issuance of Guidance and Summary of Actions Taken in Response to the Report of the Department of Justice Criminal Discovery and Case Management Working Group

Requirement for Office Discovery Policies in Criminal Matters

Guidance for Prosecutors Regarding Criminal Discovery

This is a step in the right direction, but other steps need to be taken. For example, as many criminal defense lawyers have been saying for far too long, it is time to amend Rule 16 by requiring the parties to exchange witness lists in federal criminal cases. This is precisely what the Advisory Committee and the Supreme Court proposed in 1974 and it should be done now.

Prosecutions against executives accused of fraud in connection with backdating stock options have been plagued by prosecutorial misconduct. In August, the Ninth Circuit reversed the conviction of Gregory Reyes, former CEO of Brocade Communication Systems, due to prosecutorial misconduct. Last week, Judge Carney of the Central District of California dismissed charges against former Broadcom executives with prejudice, entering a judgment of acquittal for one.

Stock-option backdating is a practice in which an employer grants stock options to an employee, retroactively dated to increase its value. Backdating itself is not illegal, but it must be properly disclosed in financial records and filings with the SEC. This article, published at the beginning of the backdating scandal in 2006, explains the history and controversy of backdating options. The SEC began charging corporations and executives in enforcement actions relating to backdating in significant numbers in 2006, and criminal charges have resulted in a few cases. The SEC has continued to bring enforcement actions against corporations and executives for secret backdating of options.

US v. Reyes was the first, and most high-profile, of the criminal cases. Reyes’ defense was that, although he had signed off on backdated options, he had relied on Brocade’s finance department to properly account for the backdated options in the corporate books and was not responsible for false records. The government put up a witness from the finance department who testified that she and other employees in the department did not know about the backdating. However, higher-up finance department employees had told the FBI that they did know about the backdating, but those witnesses did not testify because they were subject to possible criminal prosecution and had been targets of SEC civil suits. In the prosecutor’s closing argument, he told the jury that “finance did not know anything” in direct contravention of the statements given to the FBI. The Ninth Circuit stressed the special duty of federal prosecutors not to impede the truth and remanded the case for a new trial, which is scheduled for February.

Even more egregious prosecutorial misconduct occurred in the backdating cases against former executives of Broadcom. In May 2008, the SEC charged former CEO Henry Nicholas, former CFO William Ruehle, chairman and chief technology officer Henry Samueli, and general counsel David Dull with a backdating scheme. All but Dull were charged criminally, as well. Samueli agreed to a plea deal and the prosecutions of Ruehle and Nicholas went forward.

Ruehle’s attorneys first accused the prosecutor of misconduct in October 2008, when AUSA Andrew Stolper leaked confidential communications with counsel for the defendants to reporters for the L.A. Times and the Wall Street Journal. Stolper initially denied the allegations, but has since admitted to the conduct, calling it “the stupidest thing I’ve done in my career.” However, a more complete picture of Stolper’s misconduct eventually emerged. Stolper intimidated and improperly influenced each of the necessary witnesses for the defense. We have included portions of the transcript from December 15, 2009, when Judge Carney of the Central District of California dismissed the backdating cases, explaining:

Nancy Tullos was Broadcom’s vice president of human resources. This is what Judge Carney said of Stolper’s conduct regarding Ms. Tullos:

The judge had this to say regarding the intimidation of Mr. Dull:

Judge Carney was particularly concerned with the prosecution’s disgraceful treatment of Mr. Samueli, whose guilty plea he vacated on December 9, 2009:

Judge Carney noted that, in addition to the misconduct, because the witnesses were improperly influenced, their testimony was unreliable and must be stricken, leaving insufficient evidence to convict Mr. Ruehle. For that reason, the judge dismissed the indictment with prejudice and entered a judgment of acquittal for Mr. Ruehle.

Because Nicholas needed the same three witnesses for his defense, he was also denied compulsory process and would not be able to receive a fair trial. For that reason, Judge Carney also dismissed the stock option backdating case against him with prejudice. Nicholas is also charged in a drug distribution case and will likely call the same witnesses in that case. The judge ordered the government to show cause why that case should not also be dismissed. He noted that other evidence of government misconduct will be admissible at that trial, including a threat to force Nicholas’ 13 year old son to testify before the grand jury.

In addition, Judge Carney dismissed the SEC case without prejudice and discouraged the SEC from proceeding with that case any further.

The judge concluded eloquently:

The Ninth Circuit’s opinion in Reyes is available here.
The criminal minutes from December 15, 2009 in Ruehle is available here and the full transcript is available here.

Last Tuesday, the United States Supreme Court heard oral arguments in Black v. U.S. and Weyhrauch v. U.S., two of the three federal honest services fraud cases currently before the Court. On Friday, lawyers for Jeffrey Skilling submitted their brief in the third, Skilling v. U.S. This Monday, the Court set oral arguments for Skilling for March 1, 2010, at least three weeks before it would normally be heard. We have previously discussed these cases here, here, here, and here.

Background

For many years, federal prosecutors successfully argued that the mail fraud and wire fraud laws covered schemes to defraud the people of the “intangible right” to have affairs conducted honestly. Now referred to as “pre-McNally caselaw” this body of law was not uniform; the circuits disagreed on exactly what conduct constituted the illegal conduct at the boundaries of the law. In McNally v. U.S. in 1987, the Supreme Court held:

Rather than construe the statute in a manner that leaves its outer boundaries ambiguous and involves the Federal Government in setting standards of disclosure and good government for local and state officials, we read [the mail fraud statute] as limited in scope to the protection of property rights. If Congress desires to go further, it must speak more clearly than it has.

Congress reacted by passing 18 U.S.C. § 1346, which states: “For the purposes of this chapter, the term ‘scheme or artifice to defraud’ includes a scheme or artifice to deprive another of the intangible right of honest services.” Everyone agrees that Congress intended to overrule McNally and most seem to agree that the statute covers bribery and kickbacks, but because Congress failed to speak clearly, many issues at the borders of the law remain unresolved.

Since 1987, prosecutors have attempted to extend “honest services fraud” to many situations that would be less-than-obvious to readers of the statute. In Black, Conrad Black was convicted of honest services fraud in a private setting for use of a scheme to increase his own compensation that caused no harm to the corporation. In Skilling, Jeffrey Skilling was convicted in a private setting (Enron) in which the scheme involved no personal gain. In Weyhrauch, an Alaska legislator was convicted for failure to disclose a conflict of interest, even though Alaska law imposes no duty to disclose. When the Supreme Court denied certiorari in Sorich v. U.S. this year, Justice Scalia dissented, saying that it seemed irresponsible “to let the current chaos prevail” in this area of law. The Court will finally take on the responsibility with Black, Weyhrauch, and Skilling.

Oral Arguments in Black and Weyhrauch

At the oral argument in Black last week, the Court seemed eager to determine whether the constitutionality of § 1346 was properly before them in these two cases. Many of the Justices asked about a constitutional argument. Black’s lawyer asserted that he was presenting the constitutional question of vagueness (both notice and prosecutorial discretion) as a predicate for the logical disposition of the question presented. The government’s lawyer asserted that the constitutional question had not been posed in Black, but that Skilling, which had not yet been briefed, may present the issue. Chief Justice Roberts responded by asking, “you agree it would be very unusual if in June we announced the opinion in your case agreeing with you and then the next case announced that the statute is unconstitutional?”

The Court asked the government’s lawyer about the ins and outs of what is covered by honest services fraud, particularly what the lawyer called “undisclosed conflicts of interest by an agent or fiduciary who takes action to further that interest.” Justice Breyer worried that “perhaps there are 150 million workers in the United States. I think possibly 140 of them would flunk [the government’s] test.” The government’s explanation was that materiality and intent to defraud would exclude such employees, but Justice Scalia wasn’t satisfied with the government’s circular reasoning, asking, “I’m still waiting to hear what materiality consists. Is it just – de minimus doesn’t count?” and later remarking that nothing in the government’s brief or argument had “eliminate[d] these de minimus kind of … misrepresentations to the employer.”

The Court spent the next hour on oral arguments in Weyhrauch. Weyhrauch’s counsel argued primarily about the duties enforced by the honest serviced statute. When the government lawyer returned, however, the Justices turned back to the constitutional issues. The Court contemplated the ability of the average citizen to understand the law, with Justice Scalia asking at one point, “What is the citizen supposed to do? He is supposed to go back and read all those pre-McNally cases?” The government lawyer eventually assured the Court that vagueness is a legitimate concern that the government would not shy away from once raised in Skilling.

The Court has not asked the parties to brief the constitutional vagueness issue in Black or Weyhrauch, but the Skilling brief addresses it directly. Because oral arguments in Skilling have been pushed forward since that brief was filed, the Court will likely tackle the constitutional issue before announcing opinions in Black or Weyhrauch.

Skilling Brief

Filed on Friday, Skilling’s brief focuses on two issues: the constitutionality of honest services fraud, particularly where no private gain was intended, and whether the Government may rebut the presumption of jury prejudice. Regarding honest services fraud, Skilling set forth the following arguments.

A. To identify any meaning in § 1346, one must consult two decades of conflicting and confusing cases, so it is unconstitutionally vague.

The brief identifies five basic questions that the pre-McNally cases disagreed upon, making it “hopelessly unclear and conflicting” so as not to provide fair notice of what is criminalized by § 1346. These disagreements included: what source of law identifies the illegal conduct; whether contemplated economic harm to the employer was a necessary element; whether public and private sector standards were identical; whether duties extended beyond “official action,” and whether use of the fiduciary position was a necessary element. The brief quotes a dissenting judge from the Second Circuit as saying, “Ordinary people cannot be expected to undertake such an analysis [of the meaning of pre-McNally cases]; rare is the lawyer who could do it…”

The brief also details numerous conflicting meanings assigned to the statute by the government in the history of its prosecutions. The government has used this statute as a deus ex machina (a disgraceful literary device defined here) to proffer any meaning necessary to prosecute whichever defendant happens to be in its sights. By facilitating arbitrary prosecutions, this statute implicates “the other principle element of the vagueness doctrine.” In oral argument in Black, Justice Breyer brought up this point, joking about a criminal statute reading, “'It is a crime to do wrong.’ sometimes adding, ‘in the opinion of the Attorney General.’” He then asked, “Now do you see the problem?”

Because of the vagueness issues and the Justices’ questions and remarks during oral argument, we are hopeful that the Court will decide that § 1346 is unconstitutional, now that the issue has been presented directly. The Court may, however, simply limit its application. Skilling argues that doing so would require creation of federal common law, which is not a part of the Court’s duty. Justice Scalia addressed this point numerous times during oral argument, saying, “[Y]ou speak as though it is up to us to write the statute… but that’s not our job.”

B. If the Court decides to uphold the statute, it should limit it to covering bribes and kickbacks, the only category of conduct unambiguously prohibited in pre-McNally caselaw.

Skilling argues that, if the Court upholds the constitutionality of § 1346, it should limit its application to the bribery and kickbacks that were paradigmatic of pre-McNally caselaw, rather than including the “self-dealing” types of cases that have garnered much of the confusion regarding this law. The bribery and kickbacks cases are what an average citizen would likely find when attempting to determine the meaning of the statute and the government has stated that Congress meant to codify the paradigm cases in enacting § 1346. The rule of lenity requires such a limitation. In addition, the pre-McNally self-dealing cases were effectively money or property fraud cases that did not need to be addressed by a new statute, so this is already-covered territory and extending honest services fraud to it would be redundant.

C. If the Court reads self-dealing into the statute, it should require private gain as an element of the offense, and disqualify normal compensation incentives established by the employer as “private gains.”

Finally, Skilling argued that even if self-dealing is covered by the statute, it should only apply in cases in which the defendant gained privately. Every circuit that addressed a private gain requirement in the pre-McNally cases enforced a requirement that the government prove that the defendant personally gained some economic benefit. Even during oral argument in Weyhrauch, the government lawyer stated that the government was after “personal conflicting financial interests.” When the Chief Justice twice repeated the word “financial,” the government lawyer responded each time with “That’s right.” If the majority of the Court follows through with these comments by the Chief Justice, then it appears that private gains will be a necessary element in an honest services fraud prosecution.

Skilling then argued that normal compensation incentives for doing a good job for the employer is not a private benefit for the purpose of § 1346. No pre-McNally cases held that normal compensation incentives qualified as private gains. In addition, since people are presumed to act in their financial self-interest and employers count on that behavior in incentivizing performance, “every salaried employee can be said to work for her own interest while purporting to act in the interests of the employer,” according to Judge Jacobs of the Second Circuit, in his dissent in U.S. v. Rybicki.

We look forward to reading the government’s reply brief, which is due January 25, 2010. We hope the Court will eventually hold that this statute is unconstitutionally vague, but, as Timothy O’Toole pointed out at the White Collar Crime Prof Blog, the Court denied certiorari in another honest services fraud case on December 7th. The case is U.S. v. Kincaid-Chauncey and the Ninth Circuit opinion is available at 556 F.3d 923. Because this case dealt with more straightforward bribery charges against a public official, the denial of cert. leads us to believe the Court may consider leaving the bribery and kickback aspects of the statute intact.

Transcripts from the oral arguments are available here
(Black) and here (Weyhrauch).
Skilling’s brief is available here.
Additional reading is available at the following locations:
ScotusBlog
White Collar Crime Prof Blog
NPR’s All Things Considered

Recently we have been following several federal criminal cases involving the payment of fees to lawyers. Another one of those cases was finally laid to rest the day before Thanksgiving, when the United States moved to dismiss its indictment in U.S. v. Velez, involving Ben Kuehne, a highly regarded Florida criminal defense attorney. Mr. Kuehne has extended an invitation “far and wide” to a party tomorrow, Thursday, December 10, 2009, in Miami, Florida to help him celebrate the dismissal.

To review, the following cases dealing with fees to criminal defense attorneys have been decided in the past few months:

In U.S. v. Kaley, a wife and husband were each indicted with conspiracy, transportation of stolen property, obstruction of justice, and money laundering. The indictment included a criminal forfeiture count and the government obtained an injunction against the Kaleys encumbering the property listed in the forfeiture count. This August, the Eleventh Circuit held that under this circuit’s precedent, “a defendant whose assets are restrained pursuant to a criminal forfeiture charge in an indictment, rendering him unable to afford counsel of choice, is entitled to a pre-trial hearing only if the balancing test enunciated in Barker v. Wingo is satisfied.” The Court further held that the District Court had not correctly applied the balancing test in the Kaleys’ case and reversed, requiring the district court to re-weigh the factors and determine whether the Kaleys may have a pre-trial hearing on the matter. We discussed the case in this post.

Just last month, lawyer J. Mark Shelnutt was acquitted of money laundering charges associated with fees paid to him by a criminal defense client. Shelnutt was prosecuted under 18 U.S.C. § 1956, which required federal prosecutors to attempt to prove that ill-gotten gains were used for certain prohibited purposes, including facilitating underlying criminal activity, tax evasion, or evading money laundering statutes. The jury found that the government failed to prove its case. We discussed the verdict in this post.

U.S. v. Velez, the Ben Kuehne case, revolved around payment of legal fees to a criminal defense team. The team hired Kuehne to investigate the source of the money and verify that it was not criminally derived property. Kuehne’s trust account received wire transfers and Kuehne drafted opinion letters advising the team that he had analyzed the sources of all funds, then transferred the money to the criminal defense team. 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. In October, the Eleventh Circuit held that “[t]he district court was eminently correct in holding that Defendants are not subject to criminal prosecution under § 1957(a).” While criminally derived proceeds paid to defense attorneys are subject to forfeiture, they may not be the basis for a criminal prosecution. Our previous posts regarding Ben Kuehne’s case are available here and here. For more information on the case, the Southern District of Florida Blog has followed it closely.

This Monday, the Wall Street Journal Law Blog shared this invitation with its readers. Mr. Kuehne confirmed that he wished to extend the invitation “Far and Wide.” He added, “I owe the community my deepest gratitude, and hope to have a respectable turnout.”

Ed. Note: The first of this month, the U.S. Sentencing Commission’s 2009 Amendments to the federal Sentencing Guidelines went into effect. This is our final post analyzing some of the more important changes to the Guidelines. The Sentencing Commission’s reader-friendly guide to the 2009 amendments is available here.

As we discussed in this post in July, a new federal law directed at online pharmacies went into effect this April. The Ryan Haight Online Pharmacy Consumer Protection Act makes it illegal to distribute controlled substances that are prescription drugs over the Internet without a valid prescription, or to advertise for such distribution. In response to this Act, the United States Sentencing Commission made several amendments to the Sentencing Guidelines, including a new sentencing enhancement at §2D1.1, increasing the base offense levels for hydrocodone offenses, and assigning guidelines to the two new offenses created by the Act.

New Sentencing Enhancement at §2D1.1

The Commission added a new sentencing enhancement, which applies when the offense involved a Schedule III controlled substance and death or serious bodily injury resulted from the use of the drug. The enhancement provides a maximum of 15 years, or 30 years for second or subsequent offenses. Schedule III includes such drugs as anabolic steroids, morphine, hydrocodone, and ketamine.

The amendment adds two alternative base offense levels to §2D1.1 [Unlawful Manufacturing, Importing, Exporting, or Trafficking (Including Possession with Intent to Commit These Offenses); Attempt or Conspiracy]. §2D1.1(a)(4) is added to provide a base offense level of 26 for a Schedule III conviction involving death or serious bodily injury resulting from the use of the drugs. §2D1.1(a)(3) now provides for a base offense level of 30 in such a case where the defendant has one or more prior convictions for similar offenses.

Increased Base Offense Levels for Hydrocodone

The amendments modify the Drug Quantity Table in §2D1.1 to specify the base offense levels for hydrocodone as follows:

Two New Offenses

Our previous post discussed the new offenses created by the Act. 21 U.S.C. § 841(h) prohibits the distribution, delivery, or dispensing of controlled substances over the Internet without a valid prescription. The Commission has referred this offense to §2D1.1. That Guideline already includes a two-level enhancement where a controlled substance is distributed “through mass-marketing by means of an interactive computer service” i.e., the Internet.

The second new offense at 21 U.S.C. § 843(c)(2)(A) prohibits use of the Internet to advertise the sale of controlled substances. § 843(c) is already referenced to §2D3.1, but the amendment changes the title of the Guideline to "Regulatory Offenses Involving Registration Numbers; Unlawful Advertising Relating to Scheduled Substances; Attempt or Conspiracy."

Yesterday a jury found Georgia criminal defense attorney J. Mark Shelnutt not guilty on all counts. He was acquitted of money laundering, drug conspiracy, and attempted bribery.

Three weeks ago, the Eleventh Circuit Court of Appeals, which hears appeals from cases in Georgia, Florida, and Alabama, decided U.S. v. Velez in favor of the defendant. That case involved a money laundering charge against a criminal defense attorney under 18 U.S.C. § 1957. Shelnutt was prosecuted under 18 U.S.C. § 1956, which required federal prosecutors to attempt to prove that ill-gotten gains were used for certain prohibited purposes, including facilitating underlying criminal activity, tax evasion, or evading money laundering statutes. The prosecution was unable to prove its case.

More information in the Shelnutt case can be found here.
Our previous posts regarding U.S. v. Velez are here and here.
We discussed U.S. v. Kaley, another case involving the payment of legal fees to criminal defense lawyers, here in September.

Yesterday, the Eleventh Circuit Court of Appeals issued its fourth opinion regarding the federal sentencing of Kenneth Livesay, former chief information officer for HealthSouth Corporation. The Court has insisted that Livesay must serve time in prison for his role in the accounting fraud at HealthSouth. We are disappointed in the Court’s decision, because in our view, the sentence was supported by the Supreme Court’s decision in Gall v. United States.

Prior to 1999, Livesay was an assistant controller for HealthSouth who played a direct role in the accounting fraud that came to light following Sarbanes-Oxley in 2003. In 1999, however, Livesay decided that he could no longer stomach the fraud, so he transferred to the IT department, where he became CIO. Before the fraud was discovered, he was asked repeatedly to return to the accounting department, but he refused.

In 2004, Livesay pleaded guilty to conspiracy to commit wire fraud, securities fraud, and falsifying records; falsely certifying financial information filed with the SEC; and a forfeiture court. Pursuant to his plea agreement, the government agreed to recommend a reduction in his offense level for acceptance of responsibility, a sentence at the low end of the guidelines, and a downward departure in exchange for Livesay’s cooperation with the government.

And cooperate, he did. Livesay immediately assisted the government in its prosecutions relating to the fraud. He created a roadmap for how HealthSouth had manipulated its accounts and provided information, including documents, he had maintained as evidence of the fraud. He met with various governmental agencies on at least 10 occasions and testified against CEO Richard Scrushy for four days and finance exec Sonny Crumpler for two days. The judge in those cases (and his most recent sentencing hearing) was particularly impressed with his credibility as a witness.

Judge Clemon of the Northern District of Alabama sentenced Livesay to 60 months probation, including 6 months of home detention, a $10,000 fine, and forfeiture of $750,000. The government appealed the sentence and the Eleventh Circuit remanded for resentencing in Livesay I, holding that the court below had failed to state the reasons supporting the extent of its departure from the Guidelines sentence.

On remand, he was given the same sentence. The Eleventh Circuit again reversed in Livesay II, holding that the departure and the ultimate sentence were unreasonable due to Livesay’s role in the massive fraud. The Supreme Court granted certiorari, vacated Livesay II, and remanded for reconsideration in light of Gall. On remand, the Eleventh Circuit again vacated Livesay’s sentence in Livesay III, holding that the sentencing court had impermissibly considered Livesay’s repudiation of the conspiracy in its departure. Judge Clemon recused himself.

Judge Bowdre imposed the same sentence again at Livesay’s third sentencing hearing. In explaining its reasoning for the departure, the court focused on the significance and usefulness of Livesay’s assistance to the government, as well as the timeliness of that assistance. Then in its Booker analysis, the court focused on Livesay’s history and characteristics, including his inability to stomach participating in the fraud by remaining in the accounting department.

The court also focused on sentencing disparities in the case, particularly regarding Emery Harris, Kay Morgan, and Richard Botts. Livesay initially directed Harris and Morgan to make false entries, but after his move to another department, they were promoted to positions equal to or higher than his in the fraud and they remained until the end. Harris received only 5 months in custody and Morgan received 48 months of probation. Richard Botts, a senior vice president, received only 60 months probation and 6 months home confinement, like Livesay. After his resentencing for the same amount of time, the government did not appeal his sentence.

In Gall, the Supreme Court held that appellate courts must review the substantive reasonableness of sentences under an abuse-of-discretion standard and must give due deference to the district court’s decision that § 3553(a) factors justify the extent of the variance from the Guidelines range. The Court recognized that “[t]he sentencing judge is in a superior position to find facts and judge their import under § 3553(a) in the individual case” and have “an institutional advantage over appellate courts in making these sorts of determinations.” The Court also pointed out that while custodial sentences are more severe than probation, probation is a “substantial restriction of freedom” that should be given weight.

The Eleventh Circuit ignored the unique position of the sentencing judge and the weight of probation as a sentence in Livesay IV yesterday. Its opinion failed to mention any of the reasons for the sentencing court’s decision, simply holding that the probationary sentence “is patently unreasonable in light of Livesay’s role in this massive corporate fraud” and that “any sentence of probation would be unreasonable.”

Livesay’s attorney has stated his intent to request a rehearing. We hope the Eleventh Circuit reconsiders this case and prevents Livesay from enduring a fourth sentencing hearing. As of now, Livesay has already fulfilled payment of the fine and the forfeiture, as well as serving the home confinement time. He has lost his CPA license and spent 5 years with the agonizing uncertainty of the appellate process. As Judge Bowdre said at the last resentencing: “I believe it’s time for this to come to an end.”

The Eleventh Circuit's opinion in Livesay I is available here.
The Eleventh Circuit's opinion in Livesay II is available here.
The Eleventh Circuit's opinion in Livesay III is available here.
The Eleventh Circuit's opinion in Livesay IV is available here.
The Supreme Court's opinion in Gall is available here.

Ed. Note: Last week, the U.S. Sentencing Commission’s 2009 Amendments to the federal Sentencing Guidelines went into effect. Once a week this 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 Sentencing Commission has made it clear that judges now have more specific authority to impose sentencing options other than simply putting the defendant in prison. The Commission added intermittent confinement as a sentencing option, as well as adding community service as a potential mandatory condition of probation and reaffirming that community confinement is a possible condition of supervised release.

Intermittent Confinement

The most important alternative sanction addressed by the Sentencing Commission this year is the availability of intermittent confinement as an alternative to a traditional prison sentence. Before now, intermittent confinement has never been listed as a “sentencing option” in Chapter 5, Part F of the Guidelines. The Commission added a new guideline at §5F1.8 to specifically authorize such an option.

“Intermittent confinement” usually means spending only nights and weekends in custody, but judges may specify other intervals of time. The new sentencing option is available only during the first year of probation or supervised release. As a condition of supervised release, it is available only for violation of a condition of supervised release and only when facilities are available.

Criminal defense lawyers should explain to judges that the new guideline (and the Judicial Administration and Technical Amendments Act of 2008, which inspired it) show that the Commission and Congress recognize that judges should consider sentences other than traditional imprisonment.

Community Confinement

Until now, there has been considerable confusion regarding whether a judge has authority to sentence a defendant to community confinement (in a community corrections facility, such as a halfway house) as a condition of supervised release. This option can be an important part of a defense sentencing recommendation because judges often want defendants to have some restriction on their liberty, even if they have been convinced that supervised release is appropriate. The recent amendments clear up the confusion, reaffirming in the Guidelines that residency at a community corrections facility is a possible condition of supervised release.

The confusion stemmed from the Antiterrorism and Effective Death Penalty Act of 1996 (the Act). The Act renumbered 18 U.S.C. § 3563(b), which listed potential conditions of probation. Unfortunately, the Act failed to make all of the necessary changes to statutes referring to subsections of the renumbered statute. This oversight created confusion about many of the conditions that had been renumbered.

Previously, 18 U.S.C. § 3583(d), which addresses conditions of supervised release, stated that any of the conditions listed in § 3563(b) could be imposed as a condition of supervised release, except the condition listed at (b)(11). Prior to the Act, that condition was intermittent confinement. After the renumbering, however, community confinement became (b)(11). Because § 3583(d) was not amended to conform to the renumbering, community confinement was unintentionally excluded as an allowable condition of supervised release. Congress finally corrected its mistake by amending § 3583(d) to refer to (b)(10) (intermittent confinement) with the conditions discussed above.

Community Service

Another point of confusion created by the Act was whether community service was a potential mandatory condition of probation. The new amendments clarify that community service is a potential mandatory condition of probation in §§5B1.3(a)(2) and 8D1.3(b), instead of notice to victims and residential restrictions.

Prior to the renumbering by the Act, judges were usually required to include a fine, restitution, and/or community service as mandatory conditions of probation, pursuant to 18 U.S.C. § 3563(a)(2). After the Act’s renumbering fiasco, § 3563(a)(2) required judges to include restitution, notice to victims, and restrictions on the defendant’s residence. The Commission recognized the mistake, but changed the Guidelines and included a note explaining that the change may have been unintended by Congress.

Congress finally corrected this mistake, as well, by amending § 3563(a)(2) to require restitution and/or community service, unless a fine has been imposed. As a result, the Commission amended the Guidelines accordingly. The amendments change §5B1.3(a)(2) and §8D1.3(b) to require restitution and/or community service as mandatory conditions of probation for a felony, unless the court has imposed a fine or finds on the record that extraordinary circumstances would make such conditions plainly unreasonable.

Ed. Note: This week, the U.S. Sentencing Commission’s 2009 Amendments to the federal Sentencing Guidelines went into effect. Once a week this 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.

Identity Theft Amendments

Congress directed the Sentencing Commission to increase the penalties under several of the identity theft statutes in Title 18. In response to that directive, the Commission added a new enhancement and a new upward departure provision, as well as expanding the definition of “victim” and the factors to be considered in calculating the amount of loss.

The new enhancement is located at §2B1.1(b)(15). It adds two levels if either of two prongs is met: (A) where the offense involved an offense under 18 U.S.C. § 1030 (fraud in connection with computers) and intent to obtain personal information, or (B) where the offense involved unauthorized public dissemination of personal information. The (A) prong was formerly a part of the computer crime enhancement, which has been redesignated as §2B1.1(b)(16).

The new upward departure is an amendment to §2H3.1 (Interception of Communications; Eavesdropping; Disclosure of Certain Private or Protected Information.) It explains that an upward departure may be warranted where an offense involved the personal information or means of identification of a substantial number of people.

The Commentary to §2B1.1 is amended to expand the definition of “victim” for purposes of the victims table at subsection (b)(2). Under the amendment, “victim” includes persons whose means of identification was taken and used, but who was fully reimbursed by a third party, such as a bank or credit card company. It only covers victims, though, whose information was actually used.

The amendments also change Application Note 3(c), regarding calculation of loss, in two ways. (1) Where property is copied, rather than taken, the estimate of loss may be calculated based upon the fair market value of the copied property. (2) In cases involving proprietary information, the estimate of loss may be calculated based upon the cost of developing the information or the reduction in value of the information resulting from the offense.

In this post in May we discussed Flores-Figueroa v. U.S., a Supreme Court case in which the Court held that aggravated identity theft requires the government to prove that the defendant knew that the means of identification that he or she used, transferred, or possessed actually belonged to another person. We discussed the case again in August in this post, when the Eleventh Circuit applied it in U.S. v. Gomez. An amendment to Application Note 1 of §2B1.1 clarifies that for information to be considered “personal information” it must involve information of an “identifiable individual.”

The amendments also clarify Application Note 2(b) of §3B1.3 (Abuse of Position of Trust or Use of Special Skill) to include defendants who exceed or abuse the authority to issue or transfer means of identification.

Counterfeiting Amendments

The Sentencing Commission resolved a split in the circuits regarding whether offenses involving “bleached notes” should be sentenced under §2B5.1 or §2B1.1. “Bleached notes” are genuine U.S. currency that has been stripped of ink and re-printed to appear as a high denomination note.

In U.S. v. Inclema in 2004, the Eleventh Circuit held that, because such notes are altered, they should be sentenced under §2B1.1. The amendments change this rule, specifically providing for bleached notes to be sentenced under §2B5.1. The Commission explained that technological advances in counterfeiting “have rendered obsolete the previous distinction in the guidelines between an instrument falsely made or manufactured in its entirety and a genuine instrument that is altered.”

Intellectual Property Amendments

In response to Congress increasing the maximum sentences for violations of 18 U.S.C. § 2320 (Trafficking in counterfeit goods or services) where the offender causes or attempts to cause serious bodily injury or death to 20 years or life, respectively, the Sentencing Commission amended the enhancement at §2B3.5(b)(5) (Criminal Infringement of Copyright or Trademark.)

The amendment brings the two-level enhancement into parallel with §2B1.1(b)(13) by clarifying that the guideline also applies when the offense involved the risk of death and increasing the minimum offense level to 14.

Housing and Economic Recovery Act Amendments

Congress created two new offenses in the Housing and Economic Recovery Act of 2008. The Commission refers 12 U.S.C. § 4636b to 2B1.1 and 12 U.S.C. § 4641 to 2J1.1 and 2J1.5. Other similar statutes were referred to the same statutes.

Section 4636B criminalizes working for regulated entities in certain capacities after the Federal Housing Finance Agency has prohibited it. The Commission explains that it is similar to an economic crime and thus best accounted for by reference to §2B1.1. This testimony by the Chair of the Federal Defender Sentencing Guidelines Committee describes the unsuitability of the chosen guidelines for these new offenses.

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.

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.

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.

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.

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.

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.

On September 15, the Eleventh Circuit Court of Appeals, which sits here in Atlanta, Georgia, decided a federal drug and firearm case, U.S. v. Segarra. Drug laws and the gun statute 18 U.S.C. § 924(c) each carry heavy mandatory minimum sentences. The drug minimums are often longer than the minimum called for by § 924(c). In Segarra the Eleventh Circuit was confronted with what is called the “except” clause in § 924(c). Despite the language in this clause, the Eleventh Circuit ruled for the government, and said that the drug and § 924(c) minimum sentences must run consecutively with one another, instead of having the shorter gun sentence run concurrently with the drug penalty.

Mr. Segarra pleaded guilty to possession with intent to distribute crack, as well as possession of a firearm in furtherance of a drug-trafficking offense, in violation of § 924(c). Generally, § 924(c) provides for a minimum sentence of five years for possession of a gun during any crime of violence or drug trafficking crime, in addition to the punishment for the underlying crime. However, the section begins with the following exception: “Except to the extent that a greater minimum sentence is otherwise provided by this subsection or by any other provision of law…”

Mr. Segarra, who was sentenced to the minimum sentence of ten years for his drug crime and an additional five years for the firearm, argued on appeal that his five-year minimum consecutive sentence for the firearm was prohibited by the “except” clause because the underlying offense carried a greater mandatory minimum. The Second Circuit Court of Appeals followed this interpretation in U.S. v. Williams, reasoning that the plain language of the statute forbids the mandatory minimum for the firearm from applying where another provision of law requires a higher minimum sentence.

The Eleventh Circuit, and other circuits which have addressed the issue, rejected the literal meaning of the “except” clause. Yet, the Eleventh Circuit purported to rely on the plain meaning of the statute. The Court looked to § 924(c)(1)(D)(ii), which adds, “no term of imprisonment… under this subsection shall run concurrently with any other term of imprisonment imposed….” The Court said, “To read the statute as the Second Circuit did would ignore § 924(c)(1)(D)(ii).” However, the Second Circuit explicitly addressed that part of the statute in Williams, explaining that reading the “except” clause literally would prevent § 924(c) from being imposed at all, so there would be no concurrent sentences. Even if § 924(c)(1)(D)(ii) creates an ambiguity with regard to the “except” clause, that ambiguity must be resolved in favor of the criminal defendant.

We are disappointed that the Eleventh Circuit did not follow the interpretation of the Second Circuit and we hope that the Supreme Court will consider this issue and resolve the circuit court split in favor of defendants.

The Second Circuit’s opinion in Williams is available here.
The Eleventh Circuit’s opinion in Segarra is available here.

In this article last week, The National Law Journal reported that the U.S. Sentencing Commission is holding a series of hearing in conjunction with the 25th anniversary of the Sentencing Reform Act to get feedback on federal sentencing issues. One of these hearings was held here in Atlanta, Georgia, this February. Testimony and written statements from the hearings is available here.

Last week’s hearings took place in Chicago on September 9 and 10. The agenda is available here. Testimony on the first day came primarily from federal judges, but also included probation officers and community impact speakers. The next day, the Commission heard from United States Attorneys and federal defense attorneys, as well as receiving perspectives on alternatives to incarceration.

Many of the judges who testified mentioned the unfairly long sentences recommended by the sentencing guidelines for people convicted of possessing child pornography.

Chief Judge James Carr of the Northern District of Ohio and Chief Judge Gerald Rosen of the Eastern District of Michigan told the panel on Wednesday that sentencing for possession of child pornography, as opposed to manufacture or commercial distribution, may need to be changed. Many people convicted on the offense are not threats to the community, but rather socially awkward first-time offenders, they said.

Rosen emphasized that he doesn't condone possession of child pornography or understand it, but focused on the unfairness of treating one person sitting in his basement receiving videos over the Internet the same as a commercial purveyor of child pornography. In some cases, a person who has watched one video gets a maximum sentence that may be higher than someone sentenced for raping a child repeatedly over many years, he said. The average sentence for possession of child pornography in his district more than doubled, from about 50 months to 109 months, between 2002 and 2007, he said.

7th Circuit Chief Judge Frank Easterbrook, who testified with a separate group of appellate judges, agreed that the child pornography possession area might be ripe for review. He said it gives him pause when he sifts through a stack of sentences that includes a bank robber getting a 10-month sentence and a person convicted of downloading child pornography receiving a 480-month sentence. "One wonders if we aren't facing some unreasonable and unjustifiable disparities," Easterbrook told the panel.

One commissioner said that the issue is on the Commission’s priority list for the coming year. We hope that the Commission revises the guidelines to remedy the disparities for persons convicted of possession of child pornography.

Last month, the Eleventh Circuit Court of Appeals, which sits here in Atlanta, Georgia, and hears appeals from both civil and criminal federal cases, decided United States v. Kaley, a case regarding due process requirements for protective orders over property defendants wish to use to hire criminal defense counsel of their choice.

In Kaley, a wife and husband were each indicted with conspiracy, transportation of stolen property, obstruction of justice, and money laundering. The indictment included a criminal forfeiture count and the government obtained an injunction against the Kaleys encumbering the property listed in the forfeiture count. The government got that injunction ex parte, without a hearing in which the Kaleys could participate.

The property that the government enjoined was the property that the Kaleys planned on using to hire their criminal defense lawyers. Their legal fees were estimated at $500,000. To pay that amount, the Kaleys had gotten a home equity line of credit and used the proceeds to buy a certificate of deposit. The government claimed that those assets were “involved in” the Kaleys’ commission of their alleged crimes and sought to forfeit the property.

The Kaleys argued that the protective order prohibiting them from using the money prevented them from retaining counsel of their choice, in violation of their 6th Amendment right to the representation of counsel. The magistrate judge found that no hearing regarding the restraint on the property was necessary until trial and the district court agreed. The Kaleys appealed to the Eleventh Circuit.

The Court held that under Eleventh Circuit precedent, “a defendant whose assets are restrained pursuant to a criminal forfeiture charge in an indictment, rendering him unable to afford counsel of choice, is entitled to a pre-trial hearing only if the balancing test enunciated in Barker v. Wingo is satisfied. “ The Court further held that the District Court had not correctly applied the balancing test in the Kaleys’ case and reversed, requiring the district court to re-weigh the factors and determine whether the Kaleys may have a pre-trial hearing on the matter.

The most interesting part of this case is the Court’s discussion of its obligation to follow its own precedent in the case. The Court stated that, had it been writing from a blank slate without that precedent, it would have applied a different test to determine whether the Kaleys were entitled to a hearing. The case the Court was bound to follow, U.S. v. Bissell, was decided by the Eleventh Circuit in 1989.

Had the Court not been bound by Bissell, it would have applied the test announced by the Supreme Court in Mathews v. Eldridge, which decided whether an individual was entitled to a hearing under the 5th Amendment to contest governmental deprivation of a property interest in civil cases. Other circuits have applied Mathews in situations such as the Kaleys’. Had that test been applied, “the Kaleys would be entitled to a pretrial hearing on the merits of the protective order,” said the Court. “At the end of the day, however, we are duty bound to apply our case precedent and examine this matter under the framework outlined by this Court in Bissell.”

Last week, the Eleventh Circuit Court of Appeals decided United States v. McIntosh, a federal criminal double jeopardy case. The Eleventh Circuit is located here in Atlanta and hears appeals in federal cases from Alabama, Florida, and Georgia. The Double Jeopardy Clause has been whittled down, but this case shows that there are still some circumstances in which the Eleventh Circuit recognizes its necessity.

In McIntosh, the defendant was indicted on drug and firearm charges and pleaded guilty to those charges. Before his sentencing, the prosecutor realized that the offense date in the original indictment was wrong, so he filed a second indictment, identical to the first, with the exception of only the corrected date, and a motion to dismiss the first indictment, which the court granted. McIntosh moved to dismiss the second indictment as barred by the Double Jeopardy Clause, but the court denied the motion. McIntosh then conditionally pleaded guilty to the second indictment, reserving his right to challenge the denial of his motion to dismiss.

The Eleventh Circuit held that jeopardy attached when McIntosh pleaded guilty to the first indictment, so the later indictment for the same offenses violated the Double Jeopardy Clause. The Court vacated his (second) conviction and remanded to the district court with instructions to dismiss the second indictment.

It wasn’t all victory for the defense, though. In its opinion, the Court discussed that the flaw in the original indictment was not fatal, but, at most, procedural. The district court had concluded that the dismissal of that indictment “effectively withdrew McIntosh’s guilty plea,” but the Eleventh Circuit pointed out that the district court had not vacated the conviction or set aside the guilty plea, so the “conviction still exists and awaits a sentence.”

The Court’s opinion is available here.

In this post in May, we discussed Flores-Figueroa v. United States, in which the Supreme Court held that a federal identity theft statute requires the government to prove that a criminal defendant knew that the identification that he or she used actually belonged to another person. That decision overruled a prior decision by the Eleventh Circuit Court of Appeals, which sits here in Atlanta and hears appeals in all federal cases originating in Georgia, Florida, and Alabama. Last Friday, in United States v. Gomez, the Eleventh Circuit applied the law in Flores-Figueroa, vacating an identity theft conviction because the trial court failed to instruct the jury on the correct law.

The defendant, Ramon Gomez, is an undocumented alien from the Dominican Republic. Because of his illegal immigration status, he was unable to find a job, so he purchased a Social Security card and birth certificate bearing the name Raul Rodriguez Delgado for $800. In April 2008, he used those documents to apply for a U.S. passport. Because another person using the same identity had obtained a passport in 2001, the State Department investigated and Gomez admitted to his true identity. Gomez was charged and convicted with making a false statement in a passport application, falsely representing himself as a citizen of the United States, and aggravated identity theft.

The Eleventh Circuit recognized that its earlier decision was no longer good law and that the district court erred when it failed to instruct the jury that it had to find that Gomez knew that the birth certificate he used belonged to another actual person. It then determined that the district court’s error was not harmless. The United States had introduced circumstantial evidence that Gomez knew Delgado was an actual person, but Gomez contested that evidence. An agent had tried to locate Delgado, but failed, so the jury may have questioned whether he existed. Because the error was not harmless, the Court vacated Gomez’s conviction for aggravated identity theft.

The opinion in Flores-Figueroa is available here.
The opinion in Gomez is available here.

One of Justice Sotomayor’s first decisions on the Supreme Court will be in Maryland v. Shatzer, which is set for argument on October 5, 2009. The Court will decide whether the federal criminal constitutional protections afforded by Edwards v. Arizona in 1981 extend to Shatzer.

Edwards prohibits interrogation of a suspect who has requested counsel, unless an attorney is provided. This rule protects suspects from police coercion and serves an administrative purpose of providing judges and law enforcement with a clear and easily enforceable rule. Shatzer requested counsel when he was interrogated in 2003, while he was in prison for a different crime. Counsel was never provided. In 2006, while he was still incarcerated, another officer interrogated him again about the same subject, again without providing a lawyer. That time, Shatzer gave a statement that eventually led to his conviction. The highest appeals court in Maryland found that the Edwards rule applied, reversing his conviction.

The state of Maryland asserts 3 primary points in its briefs to the Supreme Court:
(1) The Edwards rule should not apply where a break in custody occurred;
(2) A break in custody has occurred where a prisoner returns to the general prison population; and
(3) The Edwards rule should not apply when significant time passes.
To argue these points, the State argues that the purposes of the Edwards rule are not met in these situations and that social costs require limitations on the rule. The same arguments are reiterated in amicus curie briefs submitted by the United States, 37 states (not including Georgia,) and the Criminal Justice Legal Foundation, a organization that advocates reducing rights for persons accused of crimes.

Briefs in support of Shatzer seek to protect the bright-line rule established by Edwards, arguing that:
(1) Any custodial reinterrogation is improper until an attorney is provided;
(2) Passage of time and breaks in custody should not render Edwards inapplicable; and
(3) Correctional custody qualifies as “custody” for the purpose of the Edwards rule.
Shatzer and the National Association of Criminal Defense Lawyers argue that the purposes of Edwards would be undermined by the requested exceptions and that there is no effective alternative to the bright-line rule.

The passage of time does nothing to change a suspect’s belief in his vulnerability to the pressures of custodial interrogation. Additionally, any exceptions regarding time-passage would be arbitrary and erode the bright-line rule imposed by Edwards. A break in custody does no more to change the custodial pressures without the presence of a lawyer. As NACDL's amicus brief points out, such an exception would only increase those pressures by incentivizing police to badger suspects through repetitive catch-and-release tactics. Arguing that incarceration does not qualify as “custody” for Miranda/Edwards purposes is simply absurd. Under Miranda, (on which the Edwards rule is based,) “a person is in custody if a reasonable person would understand he was under formal arrest or restrained in his freedom of movement.” A person in the general prison population is certainly restrained in his freedom of movement. The pressure to cooperate with authorities to be eligible for parole after a significant passage of time in prison creates even stronger custodial pressures than where the initial interrogation was recent.

The Eleventh Circuit Court of Appeals, which hears federal appeals here in Atlanta, Georgia, has held that Edwards does not apply where a suspect invoked the right to counsel during an interrogation regarding one offense, was convicted of the offense and incarcerated, then was interrogated regarding a separate offense while still in custody for the first offense. Georgia state criminal law has a similar “break in custody” exception. While this case is distinguishable from such a situation, we hope that the Supreme Court clarifies that incarceration is "custody" within the context of Edwards.

The Court of Appeals of Maryland's opinion below is available here.
The briefs in this case are available at the following links:
Brief for Petitioner
Brief for Respondent
Reply Brief for Petitioner
Amicus Brief of NACDL
Amicus Brief of United States
Amicus Brief of Florida, et al
Amicus Brief of CJLF

Frank DiPascali, Bernie Madoff’s top financial aide, pleaded guilty on Tuesday to ten criminal counts, including conspiracy, tax evasion, and securities fraud. He was taken into federal custody immediately after the hearing, at which he had waived indictment and admitted to helping Madoff falsify trading records for decades.

Although he faces up to 125 years in federal prison for his crimes, he may receive a lenient sentence due to his cooperation with the prosecution. Other than Madoff (who received a 150-year sentence) and DiPascali, only accountant David Friehling has been charged in connection with the massive Madoff fraud. DiPascali likely has a wealth of information on many potential targets of investigation and has been cooperating with the prosecution since January. Based upon his cooperation, the prosecution recommended a bail package pending sentencing in his case. Despite the recommendation, Judge Richard Sullivan denied bail, ordering DiPascali into custody immediately. Whether he will benefit from his cooperation at sentencing remains to be seen.

One of the prosecution’s most formidable tools in a criminal case is the bargaining power inherent in its prosecutorial discretion. The prosecution usually wields significant power at sentencing. In other accounting scandal cases, highly culpable defendants who have cooperated have received light sentences in comparison to their former co-workers. Scott Sullivan, for instance, former WorldCom CFO who testified against CEO Bernard Ebbers, has already returned to his home in Boca Raton, after serving four years of his five-year sentence. Ebbers, on the other hand, is scheduled for release in 2028. Jeffrey Skilling, former president of Enron, is also scheduled for release in 2028, whereas CFO Andy Fastow received only six years, due to his significant cooperation with the prosecution.

More worrisome is the pressure prosecutors place on lesser associates to cooperate in the investigation and prosecution of bigger fish. Prosecutors investigate potential witnesses who may be useful to their cases. When those witnesses refuse to cooperate for any number of reasons, prosecutors will sometimes threaten those people with indictments of their own. Even when innocent, many people cannot afford the economic and social costs of fighting such charges, let alone the risks of losing at trial. In any case the pressures to cooperate are immense and those who do not are penalized heavily when it comes to sentencing. Because of the risks, defense attorneys face difficult decisions when advising clients as to whether they should cooperate.

A recent law review note by Sarah Ribstein addresses the economic costs white-collar criminal defendants face. “A Question of Costs: Considering Pressure on White-Collar Criminal Defendants” is available here.

At the end of last month, the federal House of Representatives Subcommittee on Crime, Terrorism, and Homeland Security, which is a part of the Committee on the Judiciary, had a hearing on the over-criminalization of conduct and the over-federalization of criminal law. The importance of this issue cannot be overstated.

NACDL president John Wesley Hall submitted a statement regarding over-criminalization to the subcommittee. It focused on the absence of meaningful state-of-mind requirements in criminal laws, criminal punishment for the conduct of others, criminalization of business and economic activity, and mandatory minimums in sentencing.

This article by Paul Rosenzweig provides an instructive history of the elimination of criminal intent requirements in criminal laws. An original principle of our jurisprudence is that guilt should not be imputed to a person without any evil intention or consciousness of wrongdoing. Now, though, the law has evolved to criminalize even accidental conduct by turning thousands of administrative and civil regulations into strict liability crimes.

Similarly, through vicarious liability, people can be criminally prosecuted for the acts of other people, despite no personal neglect or even awareness. In one case discussed in the article linked above, a man was convicted for violating the Clean Water Act after an employee of a contractor he’d hired accidentally broke a pipeline with a backhoe, even though he had been off-duty and away from the site at the time of the accident. The employee wasn’t charged. The defendant hadn’t had any criminal intent or even personally caused the accident, but his conviction was affirmed on appeal.

Over-federalization is the alarming congressional trend of responding to every new crisis with new federal crimes. Last year there were more than 4,450 offenses carrying criminal penalties in the United States Code. In addition to those, at least 10,000 federal regulations can be enforced criminally. In this post we discussed the Fraud Enforcement and Recovery Act of 2009. At a hearing regarding this legislation, federal law enforcement witnesses explained that the existing federal laws were sufficient to punish criminal conduct associated with the financial crisis, but Congress enacted the new law, anyway. Federal criminal law abounds with redundancies such as this.

Because the federal judiciary is backlogged, the federal prisons are overflowing, the taxpayer costs are enormous, and, most importantly, the number of innocent individuals behind bars is growing, we hope that the magnitude of the testimony and written statements at this hearing stuck with the members of the House subcommittee on crime. Reforms to the broken federal criminal justice system are crucial.

Testimony and written statements from the hearing are available through the following links:

Hon. Richard Thornburgh
former U.S. Attorney General presently with K&L Gates LLP
Washington, DC

Timothy F. Lynch
Director of the Project on Criminal Justice
Cato Institute
Washington, DC

Kathy Norris
Victim/Personal Impact

Krister Evertson
Victim/Personal Impact

Stephen A. Saltzburg
Professor
George Washington University Law School
Washington, DC

James Strazzella
President
Temple University Beasley School of Law
Philadelphia, PA

John Wesley Hall
NACDL President

Last Friday, the Tenth Circuit Court of Appeals decided U.S. v. Nacchio, a white collar criminal case involving insider trading by the former CEO of Quest Communications. The Court held that, in calculating Mr. Nacchio’s gain for purposes of sentencing, the district court must determine the proceeds related to his insider information, rather than simply calculating total net profit. The Eighth Circuit Court of Appeals held the opposite in U.S. v. Mooney in 2005. The Eleventh Circuit, which hears appeals in federal cases here in Atlanta, Georgia, has never addressed this issue.

Mr. Nacchio began earning stock options through his position as CEO of Quest in 1997. By early 2001, he held over 4.4 million vested options. Between April and May 2001, he sold more than 1.3 million of his shares. That July, the company announced to investors that its expected revenue for 2001 would be near the lower end of previously announced ranges. In August, Quest disclosed the magnitude of its prior use of nonrecurring sources of revenue, such that it was at substantial risk of not meeting its year-end guidance.

Alleging that Mr. Nacchio was aware of material, nonpublic information when he sold his shares of Quest stock, the federal government charged him with forty-two counts of insider trading in 2003. He was convicted on nineteen counts covering the trades he made in April in May. The district court sentenced him to 72 months imprisonment, 2 years of supervised release, a $19 million fine, and forfeiture of $52 million. The Tenth Circuit reversed the sentencing order and remanded to the district court for resentencing.

The problem with the district court’s original sentencing calculation involves Section 2F1.2 of the 2000 Sentencing Guidelines, which is in the current Guidelines at Section 2B1.4, and applies specifically to insider trading. The Sentencing Guidelines prescribe progressively greater penalties based on the relevant amount of losses to victims. For insider trading, however, because victims and their losses would be so difficult to identify, the courts must look to the defendant’s gains.

The dispute in this case was over how to calculate those gains. Rather than agreeing with the district court’s use of the net proceeds from the sale, the Tenth Circuit decided that the method used for figuring disgorgement in civil insider cases was an appropriate analogue to the sentencing calculation. Disgorgement seeks to strip wrongdoers of ill-gotten gains and deter improper conduct, while taking into account that stocks have inherent value and some purported gain amounts may actually be the product of the ordinary influences of the market.

Basically, the district court’s approach ignored that some profits from the sale of Mr. Nacchio’s stock could have been (and probably were) due to normal appreciation in market prices during the period from 1997 to 2001 that he owned it. The Tenth Circuit’s disgorgement approach takes normal market forces into account and holds defendants culpable for only those gains attributable to the information based upon with they improperly traded.

The Tenth Circuit’s opinion is available here.

Time Magazine reported yesterday that a New York legislator, James Tedisco, introduced a bill in that state that, if passed, would require wealthy inmates to pay for the cost of their prison stays. A similar bill failed to pass in Georgia this year and the federal criminal justice system already takes the costs of incarceration into account when determining fines at sentencing. Many states, including Florida and Alabama, have passed laws addressing inmate reimbursement of the costs of confinement.

The New York bill, nicknamed the “Madoff bill,” proposes a sliding scale based upon each inmate’s net worth. Those worth $200,000 and more will for their entire stay, estimated at around $90 per day. Those worth $40,000 or less will not have to pay. The proposed law would not affect homes, mortgage payments, and child support payments, although middle-class prisoners’ families would surely suffer.

Federal Prison Reimbursement

The bill’s namesake, Bernard Madoff, was prosecuted under federal law, which already provides for reimbursement of confinement costs, although it is not statutorily required. The current Federal Sentencing Guidelines advise federal judges to consider, among other things, “the expected costs to the government of any term of probation, or term of imprisonment and term of supervised release imposed” when determining the amounts of fines for defendants convicted of federal crimes. The courts impose fines in all cases, unless the defendants establish that they are unable to pay. In the Madoff case, no fine was imposed because all of Madoff’s assets will be put toward compensating victims.

Prior to 1997, the Federal Sentencing Guidelines instructed judges to “impose an additional fine amount that is at least sufficient to pay the costs to the government of any imprisonment, probation, or supervised release ordered.” The Sentencing Commission elected to dispense with that requirement following a circuit court split regarding whether such a fine may be imposed without imposition of any punitive fine. Recognizing that the section was rarely used by judges, the reimbursement factor was simply rolled into the punitive fine.

Georgia’s Attempt to Pass a Similar Law

Although New York’s Madoff bill is generating national headlines, legislators in Georgia introduced a similar bill in February to little fanfare. HB 295 would have established “The Jail and Prison Reimbursement Act,” requiring inmates to pay the state for medical costs incurred during detention, as well as per diem costs of incarceration. It never made it out of the State Institutions & Property Committee before the General Assembly adjourned in April.

Last week, the Eleventh Circuit Court of Appeals, which sits here in Atlanta, Georgia, decided U.S. v. Valencia-Trujillo, a federal criminal case involving an extradition rule called the rule of specialty. The Court held that Mr. Valencia-Trujillo had not established that he had been extradited under Colombia’s treaty with the United States, rather than an extradition agreement between the countries, so he lacked standing to assert the rule of specialty. This decision makes little sense in the context of the rule.

The rule of specialty requires countries that request extradition of a person to prosecute that person only for the offenses for which the foreign country surrenders the person. In other words, if the United States asks Colombia to extradite someone for charges A, B, and C, once Columbia extradites that person, the United States can’t turn around and charge the person with X, Y, and Z. As the Court said in its opinion, “because the surrender of the defendant requires the cooperation of the surrendering state, preservation of the institution of extradition requires that the petitioning state live up to whatever promises it made in order to obtain extradition.” In other words, the rule of specialty ensures that other countries will trust the United States to adhere to the terms of extradition. Otherwise, they may not agree to send people back to the U.S. for trial.

The Court basically held that the United States need not honor promises that it makes in order to obtain extradition agreements. It came to that conclusion by relying on a prior case that viewed treaties as contracts between sovereign nations and the rule of specialty as a provision of the extradition contract. Because of that case, the Court said, “the rule of specialty is treaty-based.” The court then explained that while treaties become the law of this country, extradition agreements do not. The Court’s distinction between extradition pursuant to a treaty and extradition pursuant to an agreement flies in the face of the underlying purpose of the rule of specialty.

The Court’s opinion is available here.
“The Hell Bound Train,” a poem that the Court cited in its opinion, is available here.

A new federal criminal law directed at online pharmacies went into effect in April. The lawyers at Kish & Lietz have represented many targets and potential targets of investigations and prosecutions involving these types of online pharmacies, as well as other drug prosecutions. Recent Internet drug sale laws may encompass more behavior than the primary reasons for their enactment.

The Ryan Haight Online Pharmacy Consumer Protection Act makes it illegal to distribute controlled substances that are prescription drugs over the Internet without a valid prescription or to advertise for such distribution. “Valid prescription” is defined as “a prescription that is issued for a legitimate medical purpose in the usual course of professional practice” by a practitioner who has evaluated the patient in person at least once or, if that practitioner is unavailable and has evaluated the patient in-person within the past year, then a practitioner whom he requests to evaluate the patient. The Act also permits states to sue online pharmacies and imposes registration and reporting requirements on certain online pharmacies.

The primary function of the Act is to address online pharmacies, which deliver controlled substances by means of the Internet. Its chief provisions amend 21 U.S.C. Section 841, a part of the Controlled Substances Act that lists illegal conduct and penalties. The new law is targeted at people and entities such as doctors, pharmacists and pharmacies, and web site owners involved with online pharmacies that issue and fill prescriptions for controlled substances based solely on completion of online medical questionnaires. It is not expressly limited to online pharmacies, however, or to the types of targets listed. Federal prosecutors may use this law against anyone who delivers, distributes, or dispenses a controlled substance by means of the Internet, or helps someone do so, without authorization.

Related to this new law, in 2006 the Adam Walsh Child Protection and Safety Act (other aspects of which we discussed in this previous post) created a separate federal criminal law prohibiting Internet sales of certain so-called date rape drugs. One section of the Act amended Section 841 to impose a maximum sentence of twenty years on anyone who knowingly uses the Internet to distribute a date rape drug, knowing or with reasonable cause to believe that the recipient is not an authorized purchaser or the drug will be used in the commission of criminal sexual conduct. The Act defines “date rape drug” to include gamma hydroxybutyric acid (GHB) and its analogues, including gamma butyrolactone (GBL) and 1,4-butanediol (1,4 BD,) as well as flunitrazepam (Rohypnol or roofies) and ketamine. These drugs are also often used recreationally, but the intended use is irrelevant to the law if the person distributing the drugs through use of the Internet knows or has reasonable cause to believe the recipient is not an authorized purchaser.

In addition to these laws punishing behavior broader than their purposes, there appears to be a statutory inconsistency between the Act’s suggestion that GBL and 1,4 BD are ‘analogues’ of GHB and the definition of “controlled substance analogue” set forth in 21 U.S.C. Section 802(32). Under that section, to prove that any particular substance is an analogue to GHB, the Government must prove, among other things, that the substance at issue is “substantially similar” in chemical structure to GHB. Based on what our firm has learned from handling cases involving these substances, it appears that a scientific consensus does not exist on the question of whether GHB is substantially similar in chemical structure to GBL and 1,4 BD. It will be interesting to follow this Act and the manner in which federal courts interpret these seemingly inconsistent provisions. As Internet crimes evolve, we will continue to monitor developments in the law.

The text of the Ryan Haight Online Pharmacy Consumer Protection Act is available here.
The text of the Adam Walsh Child Protection and Safety Act is available here.
21 U.S.C. Section 841 is available here and 21 U.S.C. Section 802 is available here.

Last Monday, the Supreme Court granted certiorari in Weyhrauch v. United States, a federal criminal honest services fraud case. We are in Atlanta, Georgia, which is in the Eleventh Circuit. Because this case may impact Eleventh Circuit law, we will follow this case closely and provide any updates.

The question to be decided in Weyhrauch is "Whether, to convict a state official for depriving the public of its right to the defendant's honest services through the non-disclosure of material information, in violation of the mail-fraud statute (18 U.S.C. Sec. 1341 and 1346), the government must prove that the defendant violated a disclosure duty imposed by state law."

The defendant in this case is a lawyer and was a member of the Alaska House of Representatives. He is accused of honest services fraud due to conflicts of interest in conducting business with an oil field services company. The government wanted to introduce evidence of his concealment of the conflicts of interest to support the fraud charges, even though the state did not require disclosure.

We have been disappointed in how far federal prosecutors have gone in stretching honest services fraud to cover an expansive range of conduct and we hope that the Supreme Court finally limits this statute. In her post at the White Collar Crime Prof Blog, Professor Pogdor quotes Justice Scalia’s stance:

This case presents another opportunity for Justice Scalia to use his words from the denial of cert in the Sorich case, where he stated that the "28 words" in the statute had "been invoked to impose criminal penalties upon a staggeringly broad swath of behaviour, including misconduct not only by public officials and employees but also by private employees and corporate fiduciaries."

He stated that "[w]ithout some coherence limiting principle to define what 'the intangible right to honest services" is, whence it derives, and how it is violated, this expansive phrase invites abuse by headline-grabbing prosecutors in pursuit of local officials, state legislators, and corporate CEOs who engage in any manner of unappealing or ethically questionable conduct." Justice Scalia concludes his dissent in Sorich by stating that "it seems to me quite irresponsible to let the current chaos prevail."

The Petition for Certiorari is available here.
The Brief in Opposition is available here.
The Petitioner's Reply is available here.

We are currently following another honest services fraud case, Black v. United States, that the Supreme Court agreed to hear back in May. Our posts about it can be found here and here. In that case, the Court will decide whether Section 1346 applies in a purely private setting where the defendant’s conduct did not risk any foreseeable harm to the putative victims.

A couple of weeks ago, the federal Supreme Court decided a criminal case, Melendez-Diaz v. Massachusetts, holding that the admission of crime lab reports requires the forensic analysts to testify in person. The Georgia Supreme Court adopted the same rule in 1996 for state criminal cases brought here in Georgia and we are pleased that it will now apply in federal criminal cases, as well as in other states that didn’t previously have the rule.

Justice Scalia, a strong defender of the Sixth Amendment Confrontation Clause, wrote the majority opinion in Melendez-Diaz. The basic idea of the Confrontation Clause is that people have the right to be confronted with witnesses against them so they have a chance to defend themselves against the charges. In Crawford v. Washington, the Court held that testimonial statements against a defendant are inadmissible unless the witness appears at trial or, if the witness is unavailable, the defendant has had a prior opportunity for cross-examination. In this case, Scalia explained that the crime lab reports were affidavits, which fall within the “core class of testimonial statements” covered by the Confrontation Clause and addressed in Crawford. For that reason, the analysts making the statements must appear at trial.

The dissent argued that forensic evidence is uniquely reliable compared to other types of testimony and that cross-examination of the analysts would be empty formalism. To most people who watch TV shows like CSI, this argument has merit – scientific evidence seems indisputable. But not all forensic analysts are as intelligent and well-educated as Gil Grissom. The Court noted that “[s]erious deficiencies have been found in the forensic evidence used in criminal trials… One study of cases in which exonerating evidence resulted in the overturning of criminal convictions concluded that invalid forensic testimony contributed to the convictions in 60% of the cases.” Confrontation will help assure accurate forensic analysis by weeding out both fraudulent and incompetent analysts.

The opinion in Melendez-Diaz is available here.

Last Monday, the Supreme Court granted certiorari in a related case, Briscoe v. Virginia. We will follow that case and update on it when it is decided. More information on that case can be found at the Confrontation Blog.

Last week the Supreme Court decided District Attorney’s Office for the Third Judicial District v. Osborne in favor of the District Attorney’s Office. Although this was technically a civil case, it deals with federal constitutional criminal issues. Mr. Osborne was convicted of kidnapping, assault, and sexual assault in the early 1990s. An early type of DNA testing on the main evidence against him cleared other suspects, but could not narrow the perpetrator down to less than 5% of the population. Mr. Osborne sought access to the evidence now to subject it to a newer type of DNA test that can determine whether biological evidence matches an individual with near certainty.

The Court recognized the power of DNA testing in both exonerating wrongly convicted people and confirming the convictions of others. However, the Court’s “dilemma [was] how to harness DNA’s power to prove innocence without unnecessarily overthrowing the established system of criminal justice.” In a disappointing and surprising 5-4 decision, the Court rejected Osborne’s argument for a Due Process right to DNA evidence.

An insightful analysis of the case by a staff attorney for the Innocence Project is available at this post in the American Constitution Society Blog.

Information on the flaws in the criminal justice system that lead to wrongful convictions of innocent people is available at The Innocence Project’s website, along with information on individual cases. Cases here in Georgia are handled by the Georgia Innocence Project, with information on their website. The Osborne opinion is available here.

In this post last year, we discussed Yeager v. United States, a white collar federal criminal case on appeal to the Supreme Court. The case involved the prosecution wanting to re-try a defendant who had been acquitted on some counts, but the jury had remained undecided on other counts. Because those other counts relied on facts that the jury must have resolved in the defendant’s favor to acquit, the defense argued (and we agreed) that the doctrine of collateral estoppel precluded the prosecution from retrying the issue. The Supreme Court issued its opinion last week, agreeing with us.

We reviewed the facts and legal issues in Yeager in our previous post. The Fifth Circuit Court of Appeals ruled that the acquitted counts meant that the jury found that Mr. Yeager did not have insider information. To prove the hung counts, the prosecution had to show that he had possessed insider information. The Fifth Circuit held that the inconsistency between the jury’s acquittals and hung counts justified a retrial. The Supreme Court declined to review the record to determine whether the Fifth Circuit’s ruling on the fact issue was correctly decided, permitting the Fifth Circuit to revisit the issue. Instead, the Court resolved only the narrower legal question.

Justice Stevens wrote the opinion for the court. He focused on the rule in Ashe v. Swenson, a 1970 case that held that the Double Jeopardy Clause precludes the government from relitigating any issue that was necessarily decided by a jury’s acquittal in a prior trial. The government argued, as the Fifth Circuit had held, that the inconsistency between the jury’s decision in acquitting and indecision in the hung counts justified retrial, but the Supreme Court held that courts should scrutinize juries’ decisions, not failures to decide, in identifying what they necessarily determined at trial.

The Court's opinion is available here.

As we discussed in this post, the Supreme Court of the United States agreed to hear media mogul Conrad Black’s appeal regarding whether the honest services fraud statute applies in a purely private setting where the defendant’s conduct risks no foreseeable harm to the putative victims. We are very interested in the outcome of this case because it has the potential to change the law in the Eleventh Circuit (the court that hears federal criminal appeals from Georgia, Florida, and Alabama.) Unfortunately, we will have to wait a while. The appeal will not be heard until after the beginning of the Court’s new term this fall, likely as late as November or December.

As reported over at the SCOTUS Blog, Black has requested bail during the time his appeal is pending. He has served 15 months of a 78-month prison sentence and, if bail is denied, will have served about two years before the Justices decide his case. If his conviction is reversed, those are several months he cannot get back. His lawyers also argue that he should be released from prison in the meantime because his co-defendant, John Boultbee, has been released on a $500,000 bond and allowed to return to Canada to await the Supreme Court’s decision.

You can read Black’s application here.

Last Tuesday, in Abuelhawa v. United States, the Supreme Court ruled that using a cell phone to make a misdemeanor purchase of drugs does not “facilitate” a felony drug distribution crime. The government charged Mr. Abuelhawa with six felony charges, one for each cell phone call, for facilitating the sale of drugs, although his two, first-time, small cocaine purchases qualified only as misdemeanors. Those charges resulted in a potential sentence of 24 years in federal prison, compared with a potential two-year sentence for two misdemeanors. Just for using a cell phone.

The government argued that Abuelhawa’s use of a phone to buy cocaine counted as “facilitation” because it made the drug dealer’s sale easier, hence violating a section of the Controlled Substances Act that makes it a felony “to use any communication facility in committing or in causing or facilitating” felony drug distribution. While at first glance, the common meaning of “facilitate” may give this impression, the result is absolutely absurd. And, as the Court points out, in any sale, the two parties have specific roles and “it would be odd to speak of one party as facilitating the conduct of the other.”

Justice Souter, in his opinion for the unanimous Court, was diplomatic in his criticism of the government’s inane argument. He called it “improbable” and “just too unlikely” because it “comes up short” and “does not follow.” The Court reasoned that the distinction Congress made in the Controlled Substances Act between distribution (a felony) and simple possession (a misdemeanor) makes it “impossible to believe that Congress intended ‘facilitating’ to cause that twelve-fold quantum leap in punishment for simple drug possessors.”

While we are still disappointed with the Court’s other criminal law decision last Tuesday, we at least take solace in that they recognized blatant government overreaching in this case.

Eleventh Circuit case law, the controlling federal law here in Georgia, is at risk of changing next fall, when the Supreme Court will likely decide a criminal case and resolve a split among the circuit courts of appeals.

The mail fraud and wire fraud laws are the bread and butter for federal prosecutors bringing white collar cases. Each of these laws requires a scheme to defraud another person out of “money or property.” For many years, federal prosecutors successfully argued that the word “property” included the right to “honest services” from public employees (such as elected officials). In 1988, the Supreme Court ruled that the word “property” does not include “honest services,” but several months later Congress amended these statutes so as to include the concept of “honest services” within the universe of cases that can be prosecuted under the federal mail and wire fraud statutes. Specifically, Section 1346 of the Federal Criminal Code 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.”

Despite the background of this type of fraud, the concept of “honest services” has now been extended by federal prosecutors beyond situations where a public official may have engaged in fraud. Recently, federal prosecutors are bringing more and more cases against people who work for private companies, arguing that the employee breached his or her duty of rendering “honest services” to the employer.

Last Monday the United States Supreme Court granted certiorari in Black v. United States. The Court will decide whether this Section applies in a purely private setting where the defendant’s conduct did not risk any foreseeable harm to the putative victims.

The case involves media mogul Conrad Black, who built an international newspaper empire from a single Canadian newspaper, eventually owning hundreds of community newspapers, as well as several large newspapers, such as the Chicago Sun-Times and London’s Daily Telegraph. In the late 1990s, Black predicted the affect the internet would have on newspapers and suggested that the company sell most of its smaller newspapers. As a part of those deals, purchasers paid Black for covenants not to compete, which the government construed as a scheme to defraud the company’s shareholders, although the money from those deals would have been paid to a different company controlled by Black and his co-defendant, anyway. The trial court’s instructions permitted the jury to convict even if they found that the shareholders didn’t lose any money. Black was convicted. The Seventh Circuit upheld the conviction, even though the law in at least five other circuits would have required reversal.

In 1999, the Eleventh Circuit here in Atlanta decided United States v. DeVegter, requiring the government to prove that economic harm was at least reasonably foreseeable in a private “honest services” case such as this one. Without this rule, Black argued in his petition to the Supreme Court, “[t]he only obstacle to converting every violation of corporate governance or company rules into federal crimes would seem to be the moment-to-moment whims of federal prosecutors.” We hope that the Supreme Court, when it decides this case, agrees with the Eleventh Circuit.

The Court's docket for this case is available here.
The Seventh Circuit's opinion below is available here.
Mr. Black's petition for certiorari is available here.
The government's brief in opposition is available here.
Mr. Black's reply brief is available here.

In a previous post we discussed the federal statutes on money laundering, why they can prove complicated for criminal defense lawyers in defending cases, and how much broader they are than most people think, affecting even white collar cases. Last week President Obama signed the Fraud Enforcement and Recovery Act of 2009 (FERA) into law, expanding the money laundering statutes (and many fraud statutes) even further.

In our post linked above, we mentioned that used car dealerships are “financial institutions” under the federal criminal code’s definition, even though most people would never consider them to qualify as such. FERA expands the definition even further, including even businesses that are not directly regulated or insured by the federal government.

FERA also expands the money laundering statutes by reacting to a significant Supreme Court case that was decided last year. In United States v. Santos, the Court held that the word “proceeds” in the money laundering statutes referred only to profits obtained from illegal activity, rather than all money brought in, or the “gross receipts.” FERA overrules that part of the Court’s decision by defining “proceeds” as “any property derived from or obtained or retained, directly or indirectly, through some form of unlawful activity, including the gross receipts of such activity.”

FERA expands the government’s ability to prosecute fraud in a number of ways in addition to those enumerated above. Financially, it authorizes over $500 million in additional funding for the DOJ, SEC, USAO, FBI, U.S. Postal Inspector, and Secret Service. It also amends fraud statutes to punish significantly more broad behavior, enlarging the mortgage applications statute, major fraud statute, and securities statute, and significantly expanding the civil, but punitive, False Claims Act. FERA will have an important impact on white collar criminal law.

Professor Pogdor gives a more detailed analysis of FERA’s impact on the money laundering provisions over at the White Collar Crime Prof Blog.

Yesterday the Supreme Court eliminated a federal protection of criminal defendants’ right to counsel. Criminal defendants here in Atlanta, Georgia, as well as the rest of the country, now may be interrogated by police even after they secure representation by defense lawyers, if they don’t specifically request the lawyers’ presence or if they are not in police custody.

In yesterday’s Montejo v. Louisiana, the deeply divided Court overruled its 1986 opinion in Michigan v. Jackson, which prohibited police from initiating interrogation of a criminal defendant once he or she had invoked the right to counsel at an arraignment or similar proceeding. Justice Scalia, writing for the majority, reasoned that the rule in Jackson was unworkable because some states appoint public defenders without any request from the defendant, whereas other states require defendants to formally request counsel. That discrepancy led to different treatment of defendants based on only geography. Scalia went on to explain that the Sixth Amendment right to counsel, which Jackson protected, is sufficiently guarded by the Fifth Amendment right to counsel rules proscribed in Miranda v. Arizona, Edwards v. Arizona, and Minnick v. Mississippi.

Frankly, we disagree. The Fifth Amendment protections are limited to only custodial interrogations, so they do not apply to any defendants who are not in custody or who are interacting with police in a non-interrogation situation, such as a line-up. They are significantly narrower protections than Jackson provided. In addition, the whole point of getting a lawyer is that he or she can evaluate the situation and provide advice to the defendant during a very stressful time. Simply Mirandizing a person who has been formally charged and who has already obtained counsel is not sufficient, particularly if that person has not yet had a chance to even meet his or her lawyer, as was the case in Montejo.

We are very disappointed by this decision.

The Court's opinion can be found here.

Because our offices are in Atlanta, our firm primarily handles federal criminal cases in Georgia. However, we also have experience in Florida, as well as Alabama. Two of us have lived and worked in Florida and spent a lot of time driving on I-95, where the events relevant to this case occurred. The majority supports heads-I-win, tails-you-lose government evidence and justifies its decision with facts that, viewed by anyone who has spent any time in Florida, demonstrate racial profiling.

The case is United States v. Bautista-Silva. In March 2008, a Border Patrol agent was parked in a marked car at a rest stop along I-95 in Orlando, Florida, watching the southbound traffic. He saw a Chevy Suburban with California plates with two Hispanic men in the front seat and four more passengers in the back. As it drove past the rest area, it passed a pickup truck pulling a flat trailer. At this point the agent decided that this was an alien smuggling case and took off to catch the SUV. He had to drive 90 miles per hour to catch up. When he finally caught up, the driver slowed down to let him pass. None of the passengers made eye contact, even when the agent waved at them. That is when he pulled them over.

The United States District Court for the Middle District of Florida held that the agent lacked reasonable suspicion to stop the vehicle and granted the defendant’s motion to suppress all statements and evidence obtained as a result of the stop. The Eleventh Circuit Court of Appeals reversed that decision, holding that the agent had acted based upon specific and articulable facts that, under the totality of the circumstances, created a reasonable suspicion of illegal activity. Judge Pryor wrote the majority opinion, joined by Judge Farris from the Ninth Circuit, and Judge Barkett dissented.

The “specific and articulable” facts were:

1. The vehicle was an SUV;
2. The six passengers were Hispanic males;
3. The vehicle was registered in California;
4. They traveled south on I-95;
5. They passed by a pick-up truck pulling a flat trailer;
6. The defendant may have accelerated, then slowed down when the marked car caught up; and
7. The passengers refused to look at the agent.

Judge Pryor ignored the usual rule that appellate courts construe the facts in the light most favorable to the party who prevailed in the court below (in this case, the defendant.) Instead, he focused on the agent’s testimony that smugglers often use large vehicles to transport illegal aliens, California is a known staging area for human smuggling, and the passengers were nervously avoiding his attention. The judge also said that southbound I-95 is a route known to be used by smugglers to transport aliens to South Florida and characterized the defendant’s driving as an attempt to hide behind the flat trailer, then evade the agent by driving erratically.

The district court judge in Florida and Judge Barkett, who has spent most of her life living in Florida, viewed most of the facts as neutral and too commonplace to lend any meaningful weight in a totality of the circumstances analysis. Our firm’s former Florida residents agree. SUVs are too popular, I-95 is too crowded, and tourism is too large a sector of Florida’s economy for those facts to support reasonable suspicion, even when added together. In addition, the District Court found no evidence that smugglers use I-95 disproportionately and there was no evidence that the defendant had even seen the agent’s car when passing the trailer.

And, of course, the occupants were Hispanic. Did I mention this case took place in Florida? According to the U.S. Census Bureau, 20 percent of Florida’s population was of Hispanic or Latino origin in 2007. They were headed toward Miami-Dade County, where 62 percent of the population was of Hispanic or Latino origin in 2007.

In weighing the occupants’ “suspicious” behavior, the Court majority supported the common heads-I-win, tails-you-lose government approach to evidence. The defendant “hid” behind the flat trailer, which, by the way, was not an eighteen-wheeler or other object that could actually hide a Suburban from view. He also “evaded” the agent, staying on the road despite an available exit and driving with the flow of traffic. He drove “erratically” by slowing down when approached by a marked car. The passengers were “nervous” because they didn’t look at the agent (although, in our experience, agents tend to claim that looking at them is suspicious behavior, too.)

The Border Patrol agent saw Hispanic men in an SUV and had a hunch they may be illegal immigrants. Because a hunch isn’t legally sufficient, he had to come up with specific, articulable facts to support his decision to pull them over. We are disappointed that the majority’s zeal for helping the police seems to have led to a ruling that allows law enforcement officials to engage in racial profiling.

On Monday the Supreme Court issued its opinion in Flores-Figueroa v. United States, resolving a split in the circuits in favor of criminal defendants. The Court held that a federal aggravated identity theft statute requires the government to prove that the defendant knew that the means of identification that he or she used, transferred, or possessed actually belonged to another person. This decision overrules a prior decision by the Eleventh Circuit Court of Appeals, which hears appeals from federal cases in Georgia, Florida, and Alabama.

The statute is 18 U.S.C. § 1028A, entitled “Aggravated Identity Theft,” which provides, in pertinent part:
Whoever, during and in relation to any felony violation enumerated in [§ 1028A(c)], knowingly transfers, possesses, or uses, without lawful authority, a means of identification of another person shall, in addition to the punishment provided for such felony, be sentenced to a term of imprisonment of 2 years.

The analysis of the statute involved its syntax – the sentence diagrams of grade school. The basic sentence that the Court analyzed was “Whoever knowingly uses identification of another.” In this sentence, “whoever” is the subject, “uses” is a transitive verb, and “identification” is the direct object. “Of another” is a prepositional phrase modifying the direct object. The dispute boiled down to whether the adverb “knowingly” modified the entire predicate, including the propositional phrase. The government argued, and the Eleventh Circuit held in United States v. Hurtado, that the knowledge requirement in the statute did not extend to the phrase “of another person.” The Supreme Court disagreed “as a matter of ordinary English grammar.”

Justice Breyer, writing for the majority, first pointed out that it would be nonsensical to claim that “knowingly” modified only the verb, penalizing someone who uses “a something, but does not know, at the very least, that the ‘something’ (perhaps inside a box) is a ‘means of identification.’” Rather, “knowingly” must modify both the verb and the direct object.

The government argued that “knowingly” applies to all but the last three words, which are the propositional phrase modifying the direct object. The Court explained, though, that “[i]n ordinary English, where a transitive verb has an object, listeners in most contexts assume that an adverb (such as knowingly) that modifies the transitive verb tells the listener how the subject performed the entire action, including the object as set forth in the sentence.” In this statute, the object was set forth as modified by the prepositional phrase. The opinion included several examples of sentences with a similar structure in which a listener would assume “knowingly” modified both the verb and the direct object, but could not come up with any sentences that would lead the hearer to believe that the adverb modifies only a transitive verb without the full object.

Following its syntactic analysis, the Court emphasized its consistency with how courts ordinarily interpret statutes, saying, “courts ordinarily read a phrase in a criminal statute that introduces the elements of a crime with the word “knowingly” as applying that word to each element.” Criminal defense attorneys can use this reasoning to renew challenges to other statutes in which mens rea has not been applied to all elements, including statutes involving minors and aliens ineligible to enter the country. This potential for new challenges makes this decision extremely important.

The Court also rejected the government’s legislative history argument and practicality of enforcement concerns.

The opinion in Flores-Figueroa is available here.

We first discussed Dean v. United States in December, when the Supreme Court agreed to review the Eleventh Circuit’s opinion of the federal case. During a robbery of a bank in Rome, Georgia in 2004, Christopher Michael Dean accidentally fired his gun while taking money from a teller drawer. No one was injured.

The Eleventh Circuit, here in Atlanta, Georgia, upheld Dean’s eighteen-year sentence, which included a ten-year minimum sentence for firing the gun. We hoped that the Supreme Court would overturn this decision, because such significant criminal liability should never be imposed without criminal intent OR injury.

In the last couple of weeks, the Supreme Court has guarded our 4th Amendment rights against unlawful searches and protected us from secret detention and government overreaching. This week, however, the Court ended its short streak with Dean. The Court held that a ten-year mandatory minimum sentence applies if a gun is discharged during a violent or drug trafficking crime, even if the gun is fired entirely by accident. This disregard for the most basic element of criminal liability, mens rea, is extraordinarily disappointing.

The Supreme Court's opinion is available here.

In 1996, in United States v. Mejia, the Eleventh Circuit federal appeals court in Atlanta, Georgia, held that a court order granting a criminal defendant’s motion for additional time to file pretrial motions tolled the Speedy Trial clock for the duration of the extension of time. Last July, the Eight Circuit agreed with the Eleventh Circuit and five others in United States v. Bloate. However, two circuit courts of appeals, the Fourth and the Sixth, have held the opposite. Due to this split, the Supreme Court of the United States has granted certiorari in Bloate. We hope the justices of the Court agree with the Fourth and Sixth Circuits when it hears arguments in the fall.

The federal Speedy Trial Act requires that a criminal defendant be tried within 70 days of whichever is later: the indictment or the defendant’s first appearance in court. In calculating the 70-day period, the Act excludes “delay resulting from other proceedings concerning the defendant, including but not limited to… delay resulting from any pretrial motion, from the filing of the motion through the conclusion of the hearing on, or other prompt disposition of, such motion.” Rather than the time between filing and disposition of motions, Bloate and Mejia have dealt with the time defendants request for preparing motions, prior to filing.

The government and the majority of circuit courts have argued that such time should be excluded from the 70-day period because that time is “delay resulting from other proceedings concerning the defendant.” They say that the phrase “including but not limited to” in the Speedy Trial Act indicates that the specifically enumerated delays are only examples, rather than an exhaustive list. The Fourth and Sixth Circuits point out, though, that the Congressional decision to specifically address a time period involving pre-trial motions, but to limit it to the time between filing and disposition, strongly indicates that Congress did not intend to exclude the preparation time from the Speedy Trial Act.

One particularly disconcerting aspect of Mejia did not factor into the Bloate decision, but we hope that the Supreme Court takes notice of the issue. The district court judge in Mejia granted an indefinite extension of time, allowing for filing of pre-trial motions until fifteen days prior to trial, rather than extending the deadline a certain number of days. Trial did not begin for another ten months in that case. The opinion does not reveal when additional motions were filed, if any, and whether any non-excludable delays accounted for any part of that ten-month period. Furthermore, in this multi-defendant case, the request for extension of time by only one defendant resulted in an extreme excludable delay for all of the codefendants.

The Eleventh Circuit placed the burden on the defendant, suggesting he limit his request for extra time to a definite period, choose not to request an extension at all, or object to an open-ended extension. Just three years later, though, in United States v. Williams, the Eleventh Circuit decided a similar question regarding a court’s sua sponte grant of addition time for filing motions, and stated, “[W]e believe that the burden should not be on the defendant to take affirmative steps to keep the speedy-trial clock running.” Even failing to consider the affect one defendant’s actions can have on all of his codefendants, such a view of the defendant’s burden is a fundamental principle of criminal law.

The United States Supreme Court must not address the issue of defendants’ requests for additional time without taking into consideration whether the court limits the extension to a definite time period. An indefinite period until only days before trial allows courts to vitiate the Speedy Trial Act altogether. We most hope, of course, the Supreme Court renders this point moot by agreeing that extensions granted for filing pre-trial motions are not excludable for purposes of calculating time under the Speedy Trial Act.

In a potentially huge decision for criminal law in Georgia, Florida, and Alabama, the Eleventh Circuit federal appeals court in Atlanta held that twenty-one days was an unreasonably long time for law enforcement to wait before obtaining a search warrant after seizing a man’s computer hard drive. Because the circumstances of this case, United States v. Mitchell, failed to justify the three-week delay, the trial court should have suppressed the evidence discovered on the hard drive.

The Fourth Amendment’s protection against unreasonable seizures both guards us against unreasonable arrests and protects our possessory interests in personal property. Even with probable cause to seize property, the duration of the seizure pending the issuance of a search warrant must still be reasonable. Courts determine reasonableness by weighing the government interests against private interests. This rule ensures the prompt return of property, should a search reveal no incriminating evidence.

In Mitchell, the Court acknowledged the substantial possessory interest people have in their computers’ hard drives. Computers are heavily relied upon for both personal and business uses, storing information including financial information, passwords, photos, e-mails, and countless other items. The Court called the hard-drive “the digital equivalent of its owner’s home, capable of holding a universe of private information.”

On the other hand, in this case, the government’s justification for the delay was less than compelling. Although the eventual search warrant application contained only three pages of original content, the hard-drive was detained for three weeks due to an agent’s attendance at a two-week training program. The agent “didn’t see any urgency” in obtaining the warrant because of the defendant’s admission that the hard drive contained contraband. The Court noted that another agent could have been assigned the task and that the defendant’s admission could have been wrong.

The Court emphasized that this rule depends on all of the circumstances of the case. The opinion noted situations in which the Court would be sympathetic to delays, such as where resources of law enforcement are overwhelmed. However, this case will potentially impact future cases involving seizure of computers, due to the importance (rightfully) placed on the private interests in such property.

The full opinion is available here.

Here in Atlanta, we have been involved in many criminal cases in which police arrested people for traffic offenses, then searched their vehicles and found evidence of completely unrelated crimes. The search incident to arrest rule has been unfairly used by police as an investigatory tool since New York v. Belton extended the rule in Chimel v. California to automobiles in 1981. Last Tuesday, the United States Supreme Court, in Arizona v. Gant, limited this rule to constitutional bounds. Dividing down unusual lines, the Court formulated a new rule that is more in keeping with the original rationale for Chimel and Belton. The rule will apply in both federal and state cases.

Chimel was decided in 1969, holding that police may search the space within an arrestee’s immediate control, “from which he might gain possession of a weapon or destructible evidence.” Belton extended the rule to vehicle searches, but has unfortunately been widely understood to permit vehicle searches even where the arrestee could not gain access to a weapon or evidence. Police have been trained to secure arrestees, then routinely search everything within the passenger compartment of the car. Though these searches have no officer safety or preservation of evidence justification, the police have on occasion acted as if the Belton rule gave them the right to search wherever and whenever they wanted to do so.

In last week’s case, Mr. Gant happened to be at a house that police thought may contain drugs, based only on an anonymous tip. With no probable cause to search Gant or the house for drugs, the officers later arrested Gant after he drove into the driveway, on a warrant for driving with a suspended license. After Gant had been handcuffed and placed in the back of a patrol car, officers searched his vehicle and found a gun and a bag of cocaine. When asked under oath why they performed the search, one of the officers responded, “Because the law says we can do it.”

A chorus of scholars, courts, and Supreme Court justices has called for the Court to revisit Belton, questioning its fidelity to the Fourth Amendment and its clarity. The majority in Gant finally rejected the overbroad reading of Belton and held that “the Chimel rationale authorizes police to search a vehicle incident to a recent occupant’s arrest only when the arrestee is unsecured and within reaching distance of the passenger compartment at the time of the search.” The Court further held that a search might be justified when it is reasonable to believe that evidence related to the crime for which the person is arrested may be found in the vehicle.

Justice Alito wrote the dissenting opinion in this case and was joined by Chief Justice Roberts, Justice Kennedy, and, in part, Justice Breyer, who disagreed with Alito that Belton was well-reasoned. The dissent focused on stare decisis, insisting that the majority was over-ruling Belton, without properly addressing the abandonment of prior precedent. Justice Stevens, writing for the majority, and Justice Scalia, in a concurring opinion, stressed that stare decisis does not justify unconstitutional results.

We are relieved that the court finally limited this rule, which police have taken advantage of for nearly thirty years to invade citizens’ privacy and conduct searches without probable cause. However, we take issue with the second part of the rule, permitting a vehicle search incident to arrest when officers have “reason to believe” they might find evidence related to the crime of arrest. The Court does not address why it chose this standard, rather than probable cause. This part of the rule will create confusion and could tempt officers to fabricate potential crimes in order to search the car in hopes of finding evidence.

Last Monday, the United States Supreme Court issued its opinion in Corley v. United States. The issue in this case was whether a federal statute was intended to do away with the McNabb-Mallory exclusionary rule regarding criminal confessions or merely narrow it. In a 5 to 4 decision, the Court held that Congress meant to limit, not eliminate, this important protection against secret detention and government overreaching in federal criminal law.

The McNabb-Mallory exclusionary rule was established as a means of enforcing the presentment rule, which requires officers to bring prisoners before a judge as soon as reasonably possible to prevent secret detention and inform the suspect of his rights and the charges against him. The Court in Corley cited evidence that the pressure involved in police interrogation “can induce a frighteningly high percentage of people to confess to crimes they never committed.” The presentment rule protects innocent people from being pressured into false confessions. The McNabb-Mallory exclusionary rule enforces the presentment rule by prohibiting the government from using confessions that were obtained in violation of the presentment rule.

In 1968, Congress enacted 18 U.S.C. § 3501 in response to Miranda (which requires police to inform suspects of their rights) and Mallory (which held that a confession given seven hours after arrest was inadmissible for unnecessary delay in presentment). The first two sections were intended to eliminate Miranda altogether, but the Court rejected the attempt in 2000 in Dickerson v. United States. The Government argued that the statute was intended to eliminate Mallory, as well, but the Court held that the Congress meant only to limit its application. The third section of the statute provides that in any federal prosecution a confession made by a defendant, while under arrest, is not inadmissible solely because of delay in bringing such person before a magistrate judge if the confession was made within six hours of arrest. The six-hour time limit is extended where further delay is reasonable considering transportation and distance to the nearest magistrate.

The Court said that the Government’s reading of the statute to require only that the confession be made voluntarily would render the third section “nonsensical and superfluous.” The opinion also provided examples of the absurdities that would follow from the Government’s literal reading of the statute and reviewed the legislative history of the statute. Finally, the Court explained that the presentment rule was “one of the most important protections against unlawful arrest” under the common law and still matters in “very practical ways.” To leave it without any means of enforcement would allow federal agents to freely “question suspects for extended periods before bringing them out in the open, and we have always known what custodial secrecy leads to.”

Here at Kish & Lietz, we have handled cases in which our clients made confessions and told us they did so only because they were pressured and had no attorney with them. According to the Innocence Project, in about 25% of DNA exoneration cases, innocent defendants made incriminating statements, false confessions, or pled guilty, not because of actual guilt, but due to external sources. The McNabb-Mallory exclusionary rule is an essential protection for all of us.

The entire Corley opinion is available here.

The Department of Justice announced on March 20th that Curtis Jerome Brown, Jr. was arrested by FBI agents and charged with violating civil rights, filing a false report, making false statements to federal agents, and obstruction of justice.

These charges arise out of Brown’s alleged cover-up of two incidents at the Fulton County jail. The criminal complaint alleges that during the first incident, on August 11, 2007, Brown beat a handcuffed inmate in the face and head with gloved fists. The second incident, which took place in mid-March 2008, involved a physical altercation between another inmate and Brown with two staff members, resulting in the inmate’s death. Brown allegedly obstructed justice by interfering with the investigations of these incidents.

The Fulton County Sheriff’s Office has referred allegations of another incident involving detention officer Denita Shaw to federal prosecutors, as well.

We have handled cases such as these in the past, in which corrections officers were arrested with much fanfare by the press and prosecutors, only to have a jury decide that the officers never did anything wrong. In these types of cases, prosecutors often rely on testimony from other inmates who are seeking to get out of jail early. Inmates seeking freedom have been known to lie. Although that may or may not be the case here, we must remember that press releases by prosecutors often tell only a portion of the story.

The full Department of Justice’s press release is available here.
Relevant articles in the Atlanta Journal-Constitution are available here and here.

As we mentioned in this post, after failing to obtain a death penalty sentence against Brian Nichols, Fulton County District Attorney Paul Howard requested U.S. Attorneys for the Northern District of Georgia to pursue a federal death penalty case against him.

David Nahmias, U.S. Attorney for the Northern District of Georgia, announced on Wednesday that they would not initiate a federal prosecution of Nichols, but may reconsider the decision if he challenges his state conviction or if his security situation changes. Nahmias cited several reasons for his decision, including the difficulty of “significant evidentiary issues” and the value in not disrupting closure that victims and their survivors, witnesses, and the community gained from the finality of the state case. He also emphasized the “extensive pre-trial proceedings, lengthy trial and sentencing proceeding, and extended appeals” that a successful case would require. In making this decision, Nahmias met with the criminal defense lawyers that represented Nichols, the Fulton County prosecution team, and victims and their survivors.

The entire press release can be viewed here.

Last Tuesday, the Eleventh Circuit Court of Appeals issued its opinion in the Farias-Gonzalez case, which originated in a metro-Atlanta area of DeKalb County, Georgia. Judge Cox wrote for the Court, which held that identity-related evidence is not suppressible when offered in a criminal prosecution only to prove who the defendant is. The opinion is available here.

In 2006, Mr. Farias-Gonzalez was working on his car in DeKalb County, Georgia when a couple of federal immigration agents saw his tattoos and suspected he might be in a gang. After Mr. Farias-Gonzalez told them that he was not affiliated with any gangs, one of the agents lifted his sleeve to get a better look at his tattoos, then asked him for ID. He gave them three forms of identification identifying himself as Norberto Gonzalez. They took his picture and then ran a check on Norberto Gonzalez, finding no records associated with that name and the birth date on the ID. Concluding he may be in the country illegally, they fingerprinted him on a portable electronic machine. That machine identified him as Jose Farias-Gonzalez, who had previously been deported from the United States.

The District Court found, and on appeal the Eleventh Circuit assumed for the sake of argument, that the agents committed an unconstitutional search and seizure when lifting Mr. Farias-Gonzalez’s shirt sleeve. In the usual case, all evidence found as a result of an unconstitutional search would be excluded from use at trial. In this case, however, where the evidence was offered only to prove who the defendant was, the Court determined that the social costs of excluding the evidence were too great.

The exclusionary rule is one of the most important rules in criminal law. It is a legal technicality that protects all of us, guilty and innocent, from federal and state police misconduct. The rule prevents prosecutors from using evidence that is found in violation of the defendant’s constitutional rights. Because the rule makes the cost of a constitutional violation so high, it deters police from ignoring the rights that we fight so hard to protect.

The exclusionary rule applies only where its deterrence benefits outweigh its social costs. In the Farias-Gonzalez case, the Court weighed the societal costs and deterrence benefits of applying the exclusionary rule to Mr. Farias-Gonzalez’s photographs and fingerprints. The Court found that the deterrence benefits in this case were minimal because identity evidence is freely obtainable and the prosecution could re-indict as soon as the charges are dropped.

The Court noted the argument that, without the deterrence effect of the exclusionary rule, immigrants would be subject to rampant violations, but the Court rejected that argument hastily, saying that civil lawsuits will provide sufficient deterrence for constitutional violations. We disagree. Sovereign immunity is a significant bar against those civil suits. In addition, many immigrants do not have the means to bring those lawsuits, let alone the knowledge that any rights were violated. Deported defendants face still more considerable barriers.

Furthermore, although the deterrence benefits in this particular case were minimal, the exclusionary rule could prevent much more substantial violations than the lifting of a sleeve. Although police may freely obtain fingerprints from persons they meet on the street, police are now less deterred from unconstitutionally stopping vehicles with no probable cause or reasonable suspicion of criminal activity, simply to obtain the fingerprints of the occupants. They are less deterred from unconstitutionally entering homes without consent in hopes of fingerprinting illegal immigrants. They may find illegal immigrants that way, but they also may find legal immigrants and American citizens who have done no wrong.

Because police are now less deterred from violating your rights and mine, we hope that the United States Supreme Court takes this case and reverses it. The deterrence benefits of the exclusionary rule, even for only identity-related evidence, are far too important and our constitutional rights are far too valuable to sacrifice for the sake of finding a few more illegal immigrants.

As you may remember, we have been closely following United States v. Svete, which involves the federal criminal mail fraud statute, in the Eleventh Circuit Court of Appeals in here Atlanta, Georgia. In this post back in April 2008, Paul Kish explained the facts of the case and the original Eleventh Circuit’s decision’s potential implications for criminal defendants. In early July, Carl Lietz reported in this post that the Court had vacated its opinion in Svete and decided to re-hear the case before the entire Court. He later reported in this post that the Court had identified the issues on which it would focus. In September we again kept you updated with this post by linking to the briefs that had been submitted to the court by the defendants and the National Association of Criminal Defense Lawyers.

This Monday, the Eleventh Circuit Court of Appeals finally filed their en banc opinion in this case. Unfortunately for criminal defendants, the Court overruled its very sensible opinion in United States v. Brown and broadened its definition of mail fraud, and by extension, probably the other types of federal fraud, as well. We hope that this is not the final installment in this case, as we believe that the Court violated the contemporary understanding doctrine in this case.

Elementary social studies classes teach about one of the most important aspects of our government: the separation of powers between the three branches of government. This separation of powers provides checks and balances so no single branch becomes too powerful. This system, established by the framers of the Constitution, is the basic foundation of our democracy.

The contemporary understanding doctrine helps maintain the separation of powers by preventing judges from usurping Congress’s legislative role. It mandates that judges interpret laws by taking their ordinary meaning at the time Congress enacted them, rather than giving laws a modern interpretation. The idea is that Congress is the branch of government that should update laws, not judges. Judges should not be lawmakers. Our elected representatives in Congress are the lawmakers.

In this case, the Eleventh Circuit used modern sources to update (and expand) its prior interpretation of the very old mail fraud statute. By disregarding the definition of fraud as it was intended at the time the statute was made law, the Court has legislated from the bench. This decision violates the fundamental principles of democracy.

Chief Judge Edmondson, who wrote the opinion in Brown, wrote a concurring opinion in Svete that stressed the necessity of capturing the historical meaning of the statute as Congress enacted it. He concurred in the result because he believed the error was harmless due to the complexity of the scheme in this case, but his analysis of the law was faultless. The historical meaning of fraud, combined with the rule of lenity, "requires the government to show that the pertinent scheme or misrepresentation was capable of inducing reliance on the part of a reasonable person exercising ordinary prudence for the protection of his own interests." We hope that the United States Supreme Court will decide to hear this case on appeal and agrees with Chief Judge Edmondson.

Did you know that, even after a jury has acquitted a criminal defendant of charged crimes, a federal court judge may still consider that conduct at sentencing? This unfair and disrespectful-to-juries rule of law is barred by nearly every state, but is permissible in federal courts. We hope the U.S. Supreme Court will soon correct the situation on appeal from a recent Sixth Circuit case.

The Eleventh Circuit Court in Atlanta, Georgia has addressed this injustice and permitted it to continue. In July 2006, the court issued an opinion in U.S. v. Faust, a case in which Nathan Faust had been convicted of possession with the intent to distribute cocaine, but acquitted of possession with the intent to distribute ecstasy and two gun charges. In calculating Faust’s sentence, the District Court determined the initial Sentencing Guidelines range by including the 94 grams of ecstasy that Faust had been acquitted of possessing. The Court then added two more levels to his sentence for possession of a dangerous weapon, despite his acquittal on the gun charges. Faust objected on the basis of his acquittal, but the Court overruled his objection, stating that the Guidelines were advisory and its calculations were based on a preponderance of the evidence.

Faust appealed his sentence on several grounds, one of which being the Sixth Amendment right to a jury trial. He argued that even when the Sentencing Guidelines are applied in an advisory manner, the Sixth Amendment right to a jury trial prohibits courts from considering relevant conduct for which a defendant was acquitted when making sentencing calculations. The Eleventh Circuit rejected his argument because both Eleventh Circuit and Supreme Court precedent allowed such consideration when the relevant conduct was proved by a preponderance of the evidence. Judge Barkett wrote a lengthy special concurrence stating that she concurred in the decision only because she was bound by Eleventh Circuit precedent, further saying that she “strongly believe[s] this precedent is incorrect” and that the Supreme Court precedent cited by the majority opinion has no bearing on this case. She concludes her concurrence with, “I do not believe the Constitution permits this cruel and perverse result.”

The Faust opinion is available here.

In the recent Sixth Circuit case, Roger Clayton White was the getaway driver for a bank robbery committed by his brother and an accomplice. He led the police on a lengthy car chase, which ended when White crashed into a roadblock. White was convicted of armed robbery and possessing a firearm with the serial number removed. The court considered acquitted conduct in calculating his sentence, including discharging a firearm during the robbery and assaulting a law enforcement officer during flight. This consideration of acquitted conduct resulted in White’s sentence nearly tripling, from 8 years in prison to 22. The Sixth Circuit, sitting en banc, affirmed the sentence, stating that the sentence passed constitutional muster because it did not increase the sentence beyond the statutory maximum for the convicted crime.

The White opinion is available here.

White’s attorney has said that the case will be appealed to the United States Supreme Court. Let’s hope they take the case and correct this shocking and unconstitutional rule of law.

In a case arising out of the Eleventh Circuit Court of Appeals in Atlanta, Georgia, the Supreme Court of the United States limited the exclusionary rule by holding that where an unlawful search results from isolated police negligence, the evidence obtained from that unlawful search may still be used against a criminal defendant.

The exclusionary rule generally protects citizens against violations of their rights under the search and seizure provisions of the Fourth Amendment. The Fourth Amendment provides people the right “to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures.” It doesn’t expressly provide for any remedies when that right is violated, but the Courts established the exclusionary rule, which forbids the use of improperly obtained evidence at trial. The rule is useful for it’s deterrent effect: the police are less likely to violate citizens’ rights if they won’t be able to use evidence found as a result of their violation.

In this case, Herring v. United States, police in Alabama arrested and searched Bennie Dean Herring under the mistaken belief that a warrant for his arrest existed. During that search, they found methamphetamine and a pistol, which he was not allowed to possess because he was a convicted felon. Soon after the search, the police discovered that the warrant had been recalled 5 months earlier, but their computers had not been updated.

Because there was no warrant or probable cause for the search, it was a violation of Herring’s Fourth Amendment rights. Herring argued that the exclusionary rule required suppression of the drugs and pistol found during the search. The judges in the Middle District of Alabama, however, denied his motion to suppress because in this case, where the police acted under a good faith belief that a warrant was outstanding, there was “no reason to believe that application of the exclusionary rules here would deter the occurrence of any future mistakes.” Herring appealed and the Eleventh Circuit agreed, noting that the police error was negligent, rather than deliberate, and the benefit of excluding the evidence “would be marginal or nonexistent.”

The United States Supreme Court took this case because other courts have excluded evidence in similar cases. They resolved the conflict in favor of the Eleventh Circuit’s judgment, stating that “when police mistakes are the result of negligence such as that described here, rather than systemic error or reckless disregard of constitutional requirements, any marginal deterrence does not ‘pay its way.’” The Court divided along ideological lines, with Chief Justice Roberts writing the opinion and joined by Justices Alito, Kennedy, Scalia, and Thomas. Justice Ginsburg dissented, joined by Justices Stevens, Souter, and Breyer.

The Court's opinion can be found here.

The United States Supreme Court issued an opinion on Tuesday resolving a split in the circuits regarding whether failure to report for prison is a violent felony for the purposes of the Armed Career Criminal Act (ACCA). This federal law provides for a mandatory minimum sentence of fifteen years or up to life imprisonment for possession of a firearm by an individual with three previous convictions for violent felonies or serious drug offenses.

In the case decided this week, Deondery Chambers pleaded guilty to a charge of being a felon unlawfully in possession of a firearm. Chambers conceded that two of his prior convictions qualified under the ACCA, but disputed the third conviction, which was for failure to report to a penal institution. This conviction resulted from his failure to report to a local prison for weekend confinement on four occasions.

The District Court treated this conviction as a form of “escape from a penal institution” and held that it qualified as a violent felony. Mr. Chambers appealed from this decision, but the Seventh Circuit Court of Appeals agreed with the District Court. The First Circuit has also held that failure to report is a violent felony, but the Ninth Circuit has held that such a crime does not qualify. The Supreme Court granted certiorari to resolve this split in the circuits.

The statutory definition of “violent felony” in the ACCA includes crimes “punishable by imprisonment for a term exceeding one year” that also involve “conduct that presents a serious potential risk of physical injury to another.” The Department of Justice argued that failure to report for prison is such conduct and that “a failure to report reveals the offender’s special, strong aversion to penal custody.” The Court was not convinced by this argument.

The Court stated that this type of crime, which “amounts to a form of inaction,” is a “far cry from the ‘purposeful,’ ‘violent,’ and ‘aggressive’ conduct potentially at issue” in the specific crimes enumerated as violent felonies in the ACCA. Addressing the District Court’s analogy of failure to report to escape, the Court said that the behavior underlying failure to report is less likely to involve risk of physical harm than the more aggressive behavior underlying escape. The Court reviewed a United States Sentencing Commission report that “strongly supports the intuitive belief that failure to report does not involve a serious potential risk of physical injury.”

Justice Breyer delivered the opinion of the Court, which held that failure to report falls outside the scope of the ACCA’s definition of “violent felony.”

Former Clinch County Superior Court Judge Brooks E. Blitch III faces numerous federal charges for various alleged public corruption activities, ranging from fixing cases to making illegal payments to courthouse employees. Last Monday, two of the charges, involving retaliation against witnesses, were thrown out by the U.S. District court.

The federal statute that was the basis for those charges protects witnesses and victims from retaliation in criminal cases. The indictment in this federal criminal case accuses Blitch of attempting to influence officials in two Georgia towns not to hire an applicant for the police chief position in both cities. That applicant was a former agent for the Georgia Bureau of Investigation who helped prosecute and convict Blitch’s son in a 1996 arson case.

The District Court ruled that the prosecutors misinterpreted the language of the statute when using it to charge Blitch. His ruling stated that “The statute is intended to protect from retaliation the private citizen who comes forward to provide law enforcement with information about a federal crime.” However, the law does not “protect the law enforcement officer who receives the information.”

Berrien Sutton, Blitch’s former law partner and a former State Court judge who was appointed by Blitch, has been indicted in this case, as well.

Fulton County District Attorney Paul Howard said he has spoken with U.S. Attorneys about a possible death penalty trial against Brian Nichols in federal court for the killing of an off-duty federal agent.

In March 2005, Nichols was on trial for rape in the Fulton County Courthouse in Atlanta, Georgia. He escaped from custody and, after critically injuring and stealing a weapon from the deputy who was guarding him, murdered the judge and court reporter in his case, as well as a Sheriff's sergeant. Before his capture the next day, Nichols also killed a U.S. Customs agent while robbing him and stealing his vehicle.

On November 7, 2008 a jury found Nichols guilty on all 54 counts charged, including murder, felony murder, kidnapping, armed robbery, aggravated assault, aggravated battery, theft, carjacking, and escape from authorities. Last week he was sentenced to multiple life sentences after a jury declined to impose the death penalty.

If United States Attorneys decide to charge Nichols with the murder of the off-duty federal agent, Nichols may face the death penalty in the federal case.

On November 14, the United States Supreme Court agreed to review an Eleventh Circuit decision interpreting a federal criminal law. This decision held that firing a gun during a violent crime requires a sentence of at least ten years, even if the gun went off unintentionally. The Eleventh Circuit is located in Atlanta, Georgia and hears appeals from federal cases in Georgia, Florida, and Alabama. By hearing this appeal, the Supreme Court will remedy a discrepancy between the circuit courts.

In 2006 Christopher Michael Dean was convicted of taking by force and discharging a weapon during a violent crime. During an armed robbery of a bank in Rome, Georgia on November 10, 2004, Dean accidentally fired his gun while grabbing money from a teller drawer. He was sentenced to 18 years in prison.

A federal criminal law requires a minimum of ten years in prison for discharging a firearm during a violent crime. This ten-year sentence is in addition to the punishment for the underlying offense. Two federal appellate courts, the Ninth Circuit and the D.C. Circuit, have held that the law requires intent. In other words, in those circuits a defendant must intend to fire the gun to incur the additional ten years. The Tenth Circuit, however, has held that the law applies even when the discharge of the weapon is unintentional. This February, the Eleventh Circuit sided with the Tenth Circuit.

This split in the circuits could result in criminal defendants receiving drastically inconsistent sentences for similar crimes. In this case, Dean’s sentence was more than doubled due to his mistake. Under the Tenth and Eleventh Circuits’ decisions, the same result would occur for defendants in nine states, including Georgia. But in nine other states and Washington, D.C., defendants who accidentally fire their guns would receive significantly shorter sentences under the Ninth and D.C. Circuits’ decisions. The Supreme Court will resolve this inconsistency when they hear this case.

The Supreme Court docket for this case is available here and the Defendant’s reply in support of his petition is available here.

The Office of the Inspector General for the U.S. Department of Justice issued a massive report earlier this week concerning how the various federal prosecutors around the country are doing (or not doing) their jobs. While there's a lot of truth to the old saying about "lies, damn lies and statistics", the numbers in this report give some clues about why certain federal white collar criminal investigations simply wither away over time.

The Department of Justice is the mother ship for all of the various lawyers who work for the federal government. When it comes to prosecuting federal criminal cases, the 94 U.S. Attorneys offices around the country have front-line responsibility. The U.S. Attorney him or herself is a person appointed by the President to head up one of these 94 offices. However, the day-to-day operations usually are handled by prosecutors who have generally made a career of or have spent a long time as an Assistant U.S. Attorney (AUSA). The statistics in this new report show that there can be great variations between the 94 offices when it comes to how AUSA's handle white collar federal criminal cases.

Some of the statistics in this report are set out in Appendix XIV. This Appendix details how federal prosecutors have handled white collar criminal investigations over the past 5 years. The Appendix goes through each of the 94 U.S. Attorneys offices, and details how many such cases were referred to the prosecutors, provides numbers on how many were actually prosecuted, gives figures on how many were refused for prosecution, and sets out how many are still just hanging around with no decision.

Again, remember that statistics can often mislead. Nevertheless, this report shows that in some U.S. Attorneys' offices, the majority of white collar cases lead to formal criminal charges. In others, a relatively small percentage ever result in a criminal case. In many districts, the majority of white collar cases languish for many years before anyone makes a decision.

We represent many people who are investigated for federal white collar offenses such as mail or wire fraud, public corruption, money laundering and the like. The toll of such an investigation can weigh heavily on our clients and their families. These statistics show clearly that for some of our clients, they may have to wait many years before the case is either refused for prosecution or simply dies on the vine.

Criminal cases in the federal courts here in Atlanta are no different than in other parts of the country. Criminal defense attorneys and prosecutors make their arguments in front of federal judges, who under our Constitution are appointed to lifetime positions by the President, with the consent and approval of Congress. However, what happens when investigators scrutinize not the defendant, but the judge himself?

An article today explains that there currently an unprecedented number of investigations into the activities of sitting federal judges. One of these activities has ripened into a criminal case against the judge, while others are at the stage at which the judge could receive some sanctions.

Two of the open cases involve judges who are alleged to have engaged in possibly illegal or, at the least, highly questionable, acts related to sex. One of the judges supposedly went on a two-night binge at a topless club and used an escort service, and that judge alleges that his acts were "private and personal involving human frailties and foibles." This is exactly the argument we make as criminal defense attorneys on a daily basis, and we, perhaps more than most people, appreciate that even the best and most accomplished of our fellow citizens can engage in some amazingly stupid behavior.

However, it is the second case involving a judge and sexual matters that might be the most disturbing. A very well-known and highly respected conservative appellate judge in California has admitted that his personal web site contained off color videos and photos, including two showing naked women dressed up (for some odd reason) as cows showing bare crotch close-ups. This judge defends his conduct by saying he believed the web site was not open to the general public. This is the same defense we often raise when representing people accused of simple possession of certain kinds of pornography: namely, that what an adult does with his or her computer is no business of the rest of the world.

Judges are people like the rest of us, with strengths and weaknesses. We can only hope that our clients receive the same treatment for their weaknesses when we represent them in front of the federal courts.

Although we do not normally report on decisions issued in federal criminal cases that do not directly apply to matters in Georgia, Florida, or Alabama, a case that was recently decided by a federal appellate court that sits in Louisiana (the Fifth Circuit) is certainly interesting and therefore worth mentioning. As noted by Professor Ellen Pogdor over at the White Collar Crime Prof Blog, recently, the Fifth Circuit issued a decision involving the statute of limitations that applies in federal cases that charge an individual based on an aiding and abetting theory of liability. Specifically, in United States v. Rabhan, the Fifth Circuit concluded that "aiding and abetting is a form of derivative liability and should be treated the same as the substantive or underlying offense." In other words, since 18 U.S.C. section 2 (the aiding and abetting statute) does not establish a distinct offense, but is instead "simply a different method of demonstrating liability for the substantive offense (and one which is derivative of, rather than separate from, the underlying or substantive offense)," the statute of limitations for the underlying substantive offense must govern.

Even though this decision will not have an impact on a significant number of federal criminal cases, it did have an impact in this particular case. That is because in Rabhan, the Government charged the defendant after the expiration of the five year statute of limitations that typically applies in most federal criminal cases, but before the expiration of the ten year statute of limitations applicable to the underlying substantive offense at issue. Therefore, based on the ruling described above, the Fifth Circuit reversed the trial court's decision dismissing the offense that was charged beyond the five year statute of limitations.

Again, this case will not have an impact on a significant number of federal criminal cases; however, since this issue has apparently not yet been addressed in the Eleventh Circuit (the Court that hears federal appeals in Georgia, Alabama, and Florida), federal criminal attorneys that practice in these areas may want to make a mental note of this issue. Professor's Pogdor's analysis of this case can be found here, and the opinion itself can be found here.

Many people, lawyers included, are surprised when I tell them there is no such thing as a "first offender" in federal court. Many years ago, there were "Youthful Offender" statutes in federal court, but in our efforts to "shock and awe" crime, we completely eliminated all vestiges of the idea that young people or first offenders should get a break. In recent years, some breakthroughs I have written about in earlier posts now allow judges more freedom when imposing sentences for people convicted of federal crimes. A recent case and a survey conducted by the United States Sentencing Commission seem to give additional arguments to those trying to get the justice system to realize that a person who has led a previously honorable life needs to be sentenced very differently than one who has been in trouble before.

As we know, the Sentencing Guidelines are a grid based on two factors: Offense Level and Criminal History Category. There are six separate Criminal History Categories, with "criminal history points" assigned for various interactions with the criminal justice system. Arrests do no count, nor do convictions more than 10 years ago. However, and here's the important part, the lowest category (Category I) applies to everybody who has either 0 or 1 "criminal history points." This means that a 64 year old businessman never previously arrested is in the same category as a 35 year old with 19 arrests, and all of his convictions were over 10 years ago. In the major 1995 case involving the Guidelines, the United States Supreme Court said that a judge would "abuse his or her discretion" by trying to go BELOW Category I because the Sentencing Commission already took into account the low likelihood of recidivism when it created Category I.

Now that the Guidelines are no longer mandatory, more and more cases show that judges are slowly recognizing that we need to do better for "true first offenders", in other words, people never previously arrested as opposed to people never convicted within the recent past. The recent case mentioned above is from the Sixth Circuit, United States v. Duane, No. 06-6536, (6th Cir. 7-17-08). Although they did not rule for the defendant, the court noted that, "Because Duane had zero points at age 57, he might plausibly argue that even category I — which applies when a defendant has zero or one criminal history point(s) — overstated his criminal history to some degree." In other words, maybe a "true first offender" deserves more of a break than simply placing him or her into the lowest Criminal History Category.

Over at the White Collar Crime Prof Blog, Ellen Pogdor discusses an interesting development in the federal criminal case of Alabama's former governor, Don Siegelman, and Richard Scrushy. Governor Siegelman and Richard Scrushy were both convicted in a federal criminal trial that took place in Montgomery, Alabama. After the jury returned the verdicts, the defense attorneys received documents that purported to be printouts of emails. The documents were received from an unknown source and seemed to suggest that one or more of the jurors was improperly exposed to extraneous information during the trial, and during the jury deliberations.

After receiving the emails, the defense attorneys brought them to the attention of the court in the form of a motion for a new trial. Among other things, the federal criminal defense attorneys asked the Judge to conduct an investigation to determine the authenticity of the emails. According to Governor Siegelman's attorney, however, the prosecutors opposed this request for any real investigation into the authenticity of the emails. Consistent with the prosectors' position, the Judge denied the motions for a new trial, as well as the request for an investigation into the authenticity of the emails. After additional printouts were received, the defense attorneys filed additional motions with the Judge, asking the Judge to investigate the authenticity of the emails. On each occasion, this request was denied.

Significantly, earlier this month, the Department of Justice revealed that it was aware of an investigation that was conducted to determine the authenticity of the emails. Specifically, it was recently revealed that while one of the motions referenced above was pending, the U.S. Marshals Service informed the Judge that Postal Inspectors had conducted an investigation into the matter and reached the conclusion that the emails were not authentic. This conversation between a Department of Justice agent and the Judge took place outside the presence of defense counsel; moreover, it was not revealed to defense counsel until 15 months after it occurred.

According to Sieglman's attorneys, "there can be no doubt that the ex parte communication from representatives of the Department of Justice to the District Court, about matters that were directly at issue in a pending motion, was highly improper." Among other things, Governor Siegelman's attorneys have asked for a thorough investigation to determine who took part in, or approved, or knew about but failed to disclose, this misconduct." You can access the letter Governor Siegleman's wrote to the Department of Justice here.

In an article published on law.com, Scott Horton raises the question of whether the chief federal prosecutor in the Northern District of Alabama "knowingly prosecuted innocent people?" Among other cases, Scott discusses the well known federal fraud prosecution of Richard Scrushy, who was acquitted of all charges. In addition, Scott discusses the prosecution and acquittal of Axion, a prosecution that Scott describes as the "latest in a string of aggressive prosecutions brought by Birmingham U.S. Attorney Alice Martin." According to Scott, "those prosecutions are marked by convictions overturned and innocent men wronged. Two judges have openly questioned whether she knowingly prosecuted innocent people." In addition, Scott reports that "the American Lawyer has learned that the U.S. Department of Justice's Office of Professional Responsibility has opened an investigation into allegations of misconduct that were made by Axion against Martin."

There are a number of things about the Axion prosecution that are particularly interesting. First, unlike in most federal criminal cases, Axion waived its right to a jury trial and agreed to a bench trial, a trial that allows the judge alone to decide whether the accused is guilty. Second, after the Government presented its evidence, the case was ultimately dismissed by Judge Inge Johnson of the federal district court in Birmingham, who wrote, "Evidence was received ... that at least raises the possibility in the eyes of the district court that the government continued to investigate and prosecute the defendants even after uncovering evidence demonstrating that the defendants were not guilty." Third, as a result of a motion filed by Axion, Judge Johnson awarded $363,000 in costs, attorney fees and interest to Axion.

This story will be interesting to follow as it develops. According to Scott, "a Justice [Department] spokesman says that the Department's Office of Professional Responsibility, which investigates allegations of misconduct by Justice attorneys, is investigating Martin for "allegations of political prosecution involving both the Northern and Middle Districts of Alabama, arising out of the prosecution of former Gov. Siegelman and other matters." Scott's full story can be found here.