Federal Criminal Lawyer Blog

We do lots of sentencing hearings in federal criminal cases, here in Atlanta, throughout Georgia and other parts of the country, like Florida, Alabama, New York, California and Tennessee. Whatever state they are in, all federal judge are first required to consult the Federal Sentencing Guidelines when deciding the appropriate sentence for a person who has either pled guilty to or who a jury has found is guilty of a federal crime. These Guidelines are amended all the time, and it seems for some categories of crimes the suggested range of punishment keeps getting more and more harsh. However, what we lawyers call the "Ex Post Facto" clause from the Fifth Amendment to our beloved Constitution says that it is unconstitutional to increase punishments "after the fact." Several days ago ( I was not able to get to this post as I have been in federal court all week) the United States Supreme Court held that the Ex Post Facto clause requires a new sentencing hearing for an Illinois businessman who had been convicted of bank fraud. The case is Peugh v. United States and can be accessed here.

Mr. Peugh was convicted of five counts of bank fraud in a scheme that caused more than $2.5 million in losses by the victim bank. The crimes took place around 1999 and 2000. However, when he went to court years later, the Sentencing Guidelines in effect at the time of his sentencing hearing suggested 70 to 87 months in prison. Peugh objected to use of the 2009 guidelines, insisting that the judge should use the guidelines in effect at the time of his crimes. Under those earlier Guidelines, the appropriate sentence ranged from 30 to 37 months in prison. Peugh argued that relying on higher guidelines enacted after his crimes were committed would amount to the use of an ex post facto law. The sentencing judge rejected the argument, and sentenced Peugh to 70 months in prison. A panel of the Seventh US Circuit Court of Appeals also rejected the ex post facto argument and upheld the sentence.

In reversing those decisions this past Monday, the Supreme Court said: “A retrospective increase in the Guidelines range applicable to a defendant creates a sufficient risk of a higher sentence to constitute an ex post facto violation.” Our new favorite Justice, Sonia Sotomayor, wrote the majority opinion in a 5-4 decision. She was joined by Justices Anthony Kennedy, Ruth Bader Ginsburg, Stephen Breyer, and Elena Kagan.

The majority ruled that a federal judge’s reliance on the tougher guidelines in fashioning Mr. Peugh’s sentence violated the concept of “fundamental justice.” The ban on ex post facto laws is designed to promote basic fairness by preventing the government from changing the law midway through a criminal case when the new law will result in more severe punishment.

The main issue in this case was whether the ban on ex post facto laws should apply beyond statutes (laws enacted by Congress) to include any new, tougher version of the sentencing guidelines (which are created by this hybrid body called the United States Sentencing Commission). In deciding that the ex post facto clause does apply to the Sentencing Guidelines, Justice Sotomoyor wrote, “The Ex Post Facto Clause forbids the [government] to enhance the measure of punishment by altering the substantive ‘formula’ used to calculate the applicable sentencing range.”

“That is precisely what the amended guidelines did here,” she said. “Doing so created a ‘significant risk’ of a higher sentence for Peugh, and offended one of the principal interests that the Ex Post Facto Clause was designed to serve, fundamental justice.”

Justice Thomas wrote a dissent, joined by Chief Justice John Roberts and Justices Antonin Scalia and Samuel Alito. Justice Thomas said the sentencing guidelines may influence a judge’s sentencing decision but that the final sentence is discretionary. The Constitution bars ex post facto laws that increase punishment, not the enactment of discretionary guidelines that may result in a harsher sentence, he said.

Sitting here in Atlanta, I really like when I find out about bright, energetic lawyers handling federal criminal cases all around the country. One such case is Burrage v. United States, where this past Tuesday the United States Supreme Court agreed to review important questions as to what it means when "death results" from drug dealing. To many lawyers and others in this field, it might seem that a case like this only really matters to folks defending drug cases. However, this is an important appeal on issues related to causation, the appropriateness of jury instructions, and construing federal statutes.

Mr. Burrage was like too many folks, caught up in the drug business, selling relatively small amounts of controlled substances. His life intersected with Joshua Banka, another lost soul who was a long-standing poly-substance abuser. Burrage sold some heroin to Banka, who died after using some of the drug. Banka had lots of other drugs in his system as well, and his girlfriend acknowledged he'd used some of these other drugs in the day before he died. The experts who testified at trial gave complex answers about the cause of Banka's death, but they could not say that Banka would not have died if he had not used heroin (this method of saying the word "not" three times in the same sentence appears in the briefs for each side of the case).

A federal statute requires a 20-year mandatory minimum sentence for a person dealing drugs "if death results." At trial, the Defendant wanted the judge to tell the jury that selling heroin "played a substantial part" in bringing about the death, and that the death was a "direct result of or a reasonably probable consequence of" using the heroin. Mr. Burrage's attorney also wanted a jury instruction on the well-known first-year law school concept of "proximate cause" . The trial judge and the court of appeals rejected the Defendant's contentions, and said it was OK to tell the jury that it was enough if they decided that the heroin was a "contributing cause" of Mr. Banka’s death. The instruction told the jury that "a contributing cause is a factor that, although not the primary cause, played a part in the death[.]” The jury found Burrage guilty, the Court of Appeals rejected his arguments, and his very competent Iowa lawyer asked the United States Supreme Court to look at the case.

The government protested that the Supreme Court should not review the case because the "if death results" issue rarely comes up in federal criminal prosecutions, and that any dispute among the lower federal courts on these questions is really more of a tempest in a teapot. However, it seems that the Supreme Court believes this really is an important case, for they accepted Mr. Burrage's case for review and argument next Fall. The case will have important lessons for many other federal criminal prosecutions, issues as diverse as how to read a statute written in the passive voice ("if death results" is different than the active voice "caused death"), whether it is OK to construe a criminal statute with mandatory penalties in a manner akin to strict liability, and varying levels of "causation", a concept that applies in criminal and civil cases alike.

We look forward to the Briefs and arguments, and how this decision might affect the matters we handle for our clients. Stay tuned.

Like our federal cases here in Atlanta and throughout the country, it is important to keep in mind how a federal sentencing hearing takes place. The various phases of the federal sentencing process require the Defendant's attorney to not only know the law, but also to know the procedure, so that "objections" are properly preserved. A decision issued today by the United States Court of Appeals for the Eleventh Circuit makes this point. In that case, the attorney properly objected, thus preserving the issue for appeal. In the Court of Appeals, the Defendant raised the same argument, and the appellate tribunal agreed. The result is a lower sentence for the Defendant. The case is United States v. Washington.

Mr. Washington was charged in a large fraud scheme involving banks and credit card customers. He pled guilty. As a result, the United States Probation Officer prepared the very important document called the "Presentence Investigation Report", which is often called the "PSR". The PSR has two major parts, one of which is sort of a miniature biography of the Defendant. The second part of the PSR is where the probation officer makes some recommendations as to how the complex Federal Sentencing Guidelines should apply.

In a federal fraud case, there is a specific enhancement under the Sentencing Guidelines that is based on the number of victims. For example, if there are more than 250 victims, then a six-level enhancement is added to the Guideline score.

Mr. Washington was one of many people charged in this particular fraud scheme. The same judge had found more than 250 victims while imposing sentence on some of the other Defendants. However, Mr. Washington's lawyer properly objected to the enhancement for more than 250 victims, because the prosecutor never produced any evidence. In response to Mr. Washington’s objections, the probation officer stated that he had been provided with “spreadsheets detailing the victims,” and that the number exceeded 250. The prosecutor said that “thousands of individuals” had their credit card numbers stolen. However, the prosecutor did not submit any evidence to support this assertion. During the sentencing hearing, the Defendant's lawyer reiterated his objection, but was interrupted by the Judge. “That’s the figure that’s been applied to other defendants." Therefore, the Judge used the enhancement for more than 250 victims.

The Court of Appeals reversed the sentence. First, they repeated what has been said in numerous previous cases: the prosecution bears the burden of producing at least some evidence to support any enhancement of the Guidelines. Mere argument is not enough. Also, it's not good enough to simply refer to evidence from a co-Defendant's case, unless the record shows that the Defendant and his attorney at least had a chance to review such evidence and contest it.

Perhaps the most important part of the case is what happens next. The Court of Appeals noted that sometimes it sends the case back so the prosecution can basically "fix" the problem. They refused to take that approach here. The government had its chance, and blew it. No "do-over", said the appellate court. As a result, they ordered that the lower court resentence Mr. Washington without using the 6-level enhancement, which will almost certainly reduce his Guideline range and probably the overall sentence.

Again, it is important to hire a lawyer who knows the law and procedure. Mr. Washington's attorney knew when to object, and likely saved his client additional time in prison.

I came across this story about two Defendants in New York who were appealing to the Second Circuit Court of Appeals their convictions for "insider trading", which as we all know is a rarely prosecuted federal crime arising out of a securities investigation that usually starts with the SEC. These Defendants also argued on appeal that their sentences were too long. Both issues, the insider trading question and sentencing arguments, are matters we have come across frequently, and we will be following the case closely.

The basic idea of an "insider trading" case is that someone learns about "material non-public information", such as the fact that one company might be in the process of buying another company. When companies prepare to engage in such moves, they need to hire bankers, lawyers, accountants, printers and lots of folks who work on the deal. It is illegal for anyone who learns such "material non-public" information to give a "tip" to anyone, and for the recipient of the tip (the "tippee") to make trades (such as buying the stock of the company that is about to be purchased.)

Attorneys for Zvi Goffer, a former securities trader , and Michael Kimelman, co-founder of a trading firm, recently asked the United States Court of Appeals for the Second Circuit to vacate their clients' 2011 convictions. Prosecutors claimed that Mr. Goffer (a securities trader), was the ringleader of a scheme which traded on material non-public information prior to public announcement of deals involving computer network equipment makers and drug companies. Mr. Kimelman, the other Defendant, apparently worked with Goffer's brother. Although the attorney for the securities trader claimed that his client had not breached anyone's trust, one of the judges noted that the trader apparently paid kickbacks to lawyers at a large law firm in return for information on upcoming corporate acquisitions.

Perhaps the more interesting aspect of this appeal concerns the challenges to the sentences imposed for insider trading. The trial judge imposed a 10-year sentence on Mr. Goffer, and two and one-half years for Mr. Kimmelman. The defense lawyers contrasted the treatment their clients received with the high-profile insider trading case against Rajat Gupta, the former Goldman Sachs director convicted for leaking non-public information to Galleon founder Raj Rajaratnam. Gupta got a shorter two-year prison sentence in October. The scheme involving Gupta and Rajaratnam supposedly netted $50 million, far more than what was involved here, the defense attorneys argued, yet the sentences were almost as severe.

We are very sensitive to sentencing arguments in federal court, for we handle many similar matters. Likewise, we also occassionally represent people caught up in SEC investigations, some of which turn into federal insider trading criminal cases. We had some good luck on appeal for a bank executive caught up in an insider trading case. We convinced the trial judge to impose no jail time, but the prosecutors appealed, similar to the situation described in this post. However, in our case, we convinced the Court of Appeals to reverse itself and affirm the sentence of probation. Because of that and similar cases, we look forward to seeing how the Second Circuit resolves these cases.

A decision from an Atlanta case that was issued last Friday once again demonstrates that sentencing hearings in federal criminal cases are amazingly complex, and can lead to surprises. In the case from last week, US v. Kuhlman, the Sentencing Guidelines called for a range of 57-71 months in custody. Prosecutors asked for 36 months. The Defendant paid almost $3 million in full restitution. The Judge continue the case for 6 more months, during which time the Defendant performed almost 400 hours of community service. At the next sentencing hearing, the Judge decided it made no sense to put the Defendant in prison, so he imposed a "time served" sentence. The prosecutors appealed, and the Court of Appeals agreed with them, reversing the probationary sentence and remanding for another sentencing hearing.

The Defendant was a local Atlanta area chiropractor who owned and operated a series of clinics. Beginning in January 2005, he began a five-year scheme, falsely billing health insurance companies for services he knew were not rendered to his patients. The Defendant was charged in a criminal information with one count of health care fraud in violation of 18 U.S.C. §§ 1347 and 2. He pleaded guilty pursuant to a plea agreement. At the plea hearing, the chiropractor admitted that he did not steal out of need—he was not in financial trouble and he did not have creditors breathing down his neck asking for money. Instead, he conceded that he simply pushed the envelope of billing practices.

A few days before sentencing, the doctor paid $2,944,883 in full restitution. The Judge was obviously impressed and remarked that the chiropractor was the first Defendant that the Judge could recall who made such a large restitution payment prior to sentencing.

The very experienced Judge proceeded to discuss the rising costs of incarceration, citing a recent Georgia state commission formed to explore alternatives to prison for nonviolent criminals. The Judge alluded to the fact that the chiropractor would need time to pay off his fine and support his family. The Judge also hinted that if given extra time before sentencing, perhaps the doctor should perform public service. The Judge continued to express concerns over the rising costs of prison and suggested that a continuance would save “the court . . . at least $10,000 by not incarcerating the Defendant during this period." The Judge, who has been on the bench since the early 1980's, also noted that he had ordered a similar sentencing continuance for a “budding rock star,” which had yielded positive results. The Judge explained that when given the extra six months, the “budding rock star” made “hundreds of visits to young people” and had a positive impact on the community.

Over the following six months, the doctor made good on the opportunity given to him by the Judge. The Defendant performed 391 hours of community service. He visited various medical, nursing, and chiropractic schools and gave presentations on health care insurance fraud. He also provided 18 days of free chiropractic services at homeless shelters across Atlanta and painted a gym at an elementary school. At the second sentencing hearing, the Judge commended the doctor's work during his six-month continuance. In light of the full restitution payment, the community service, and the rising costs of incarceration, the Judge sentenced the chiropractor to probation for the “time served” while awaiting his sentence.

The Court of Appeals decided that the sentence was simply too lenient. The opinion goes on for pages railing against the idea that "white collar" criminals somehow get a break by paying full restitution.

This case is highly disappointing. As kids we are taught that a person stealing something should pay back that which was taken. Then, when showing remorse, we are told that the person should say they are sorry, and demonstrate to others the wrongfulness of their conduct. Here, the three judges felt they knew better than the highly experienced Senior District Judge. These judges believed that it's better to put a productive man in prison and spend tens of thousands of taxpayer dollars, even though the chiropractor paid back every penny. We sincerely hope this case does not show a trend of appellate judges reversing what they perceive to be unduly "lenient" sentences.

Federal criminal charges are being brought against a series of Atlanta-based employees of schools. Here and here are some stories. We represent one of the people accused in these matters, which are very difficult to defend. These cases are part of an ever-expanding national trend. We have done many such cases, involving doctors, federal employees, computer programmers, salesmen and others. No matter what business our client is in, all of these cases require sensitivity, compassion, along with a willingness to try new tactics in the right situation.

Many of these cases involve clients with eerily similar backgrounds. Many of our clients are men who have been happily and successfully married for many years. These men often are exemplary fathers. I recall one poignant sentencing hearing where the 20-something daughters of our client made such fantastic speeches that the Judge commented how as a feminist she could not help but praise our client and his wife for raising such amazing daughters. After the sentencing hearing, that Judge even took off her robe, and came down to spend some time with the wife and daughters.

These cases also can be very technical, involving significant amounts of forensic computer evidence. Such cases sometimes revolve around whether a search warrant was properly presented, signed or executed. If the investigators failed to follow the law, we sometimes are able to get the evidence "suppressed", or at least put the case in a better posture for negotiating a plea agreement.

Deciding whether it is the client's best interest to negotiate a "deal" is important in every case, but never more so than in child pornography federal criminal cases. The child pornography laws have been made more and more strict over the years, often with associated "mandatory minimum" penalties. Also, the Federal Sentencing Guidelines have been ratcheted up over the years, although we sometimes have convinced judges that the Guidelines were too high, resulting in a lower sentence after we filed a Sentencing Memo. Many attorneys fail to realize that preparing for a sentencing hearing in federal court can be almost as difficult as preparing for a regular trial in the state court system.

But perhaps more than anything, the greatest difficult in such cases is that the client is accused of ordering or looking at images of children who are sometimes abused. Me and Carl have children, and are like anyone else in wanting to protect our families. But, we also are zealous in trying to understand our clients' situations, and in protecting the rights of everyone who hires us. These cases are challenging, but we do not shirk away from these difficult matters.

Recent publicity about airline passengers accused of federal crimes while on airplanes (such as the executive accused of hitting a crying child while on a Delta flight arriving here in Atlanta) got me to thinking about how flying has changed over the years. It's much less fun, that's for sure. The recent publicity reminded me also that over the years I have represented many people accused of crimes while on airplanes. The federal prosecutors are bringing more and more criminal cases based on actions of passengers in airplanes. Such cases are challenging, even though on occasion we have been able to get good results for our clients.

I recall one case where our client was accused of basically "touching himself" while sitting next to a couple of teenage girls. We had a long trial, a challenging sentencing hearing, but all along I had hope that we might prevail. We lost, but not until we made the other side work very hard. Here is the final ruling by the Court of Appeals. I still think we were right.

Some of the recent cases also reminded me of a medical doctor I represented who got caught up in the post 9-11 laws that criminalize lots of innocent conduct. One of those laws (18 United States Code, section 1038) makes it a crime to make a false report of something, which if it was true, would be a terrorist act. Through a series of mishaps, the doctor was pulled off a plane, but they would not remove his luggage, and planned on sending the flight along without him but leaving his bags on board. He complained, explaining that was stupid, in that for all they knew, his bags could contain explosives. That was not a smart thing to say, but it also was not a crime, in my estimation. Over the course of several years, I filed hundreds of pages of legal motions challenging the statute, and argued that the doctor had a First Amendment right to make a truthful statement: it is stupid to allow a passenger's bags to remain on a flight when the passenger himself is no longer one of the passengers. After lots of work, we eventually convinced the prosecutors to drop all charges. The incident still pops up from time to time when the doctor's medical license is up for renewal, but every time it has we convinced the regulatory bodies that he did nothing wrong.

The federal authorities like to make criminal cases when activities take place on airplanes. I probably will see more of these in the years ahead.

Good lawyering in federal criminal cases often requires that the attorney not only be a student of the law, he or she needs to also recognize when a particular issue might be a current "loser" but the higher courts are waiting to change the rule. That might turn out to be the situation in Alleyne v. United States, a case recently accepted for review by the United States Supreme Court. Mr. Alleyne's prescient Public Defenders objected to a ruling that was correct at the time it was made, but early next year the Supreme Court will hear arguments as to whether the rule should be changed.

In 2000, the Supreme Court issued the landmark ruling of Apprendi v. New Jersey. That case held for the first time that any fact that can change the maximum punishment to which a Defendant is exposed must be pled in the indictment, and proven to the jury by the usual "beyond a reasonable doubt" standard. This is very important because until that time many facts that result in potentially longer prison sentences could be decided by one person, the sentencing judge, and that judge could use the less stringent "preponderance" evidentiary standard.

However, in 2002 the Court in a case called Harris v. United States restricted the Apprendi rule, holding that it did not apply when a particular fact merely kicked in a "mandatory minimum" sentence, but did not change the potential maximum. Federal crimes often come with mandatory minimum punishments which are extremely harsh, and defense lawyers for years have long chafed under a system that keeps away from the jury the crucial question as to whether the Defendant should be exposed to a very long minimum term in custody.

Harris was decided by what we call a "plurality", with Justice Breyer casting the crucial fifth vote. Justice Breyer had gone along with the other four who wanted to keep the mandatory minimum fact away from the jury. Although he questioned the logic of the whole idea, he thought there might be a difference between raising a minimum sentence and enhancing a maximum one. In a later case, though, Breyer expressed doubts about that distinction. Since that time criminal defense lawyers repeatedly made pleas to reconsider Harris, but until now all such requests have been rebuffed.

Mr. Alleyne was accused of a robbery, and one count of using a gun during a crime of violence, what we call a "gun count" or a "924(c)". He received a forty-six month sentence on the robbery charge. However, the gun charge has a 5-year minimum, and that floor can increase to a 7-year minimum if the firearm was "brandished." The jury did not accept the theory that the gun had been brandished. Even though the jury concluded that Alleyne had not done so, the trial judge ruled that Alleyne should have foreseen that his accomplice would brandish a gun during the robbery. The judge then imposed the 7-year minimum, instead of the regular 5-year punishment. Alleyne’s lawyer conceded that the Harris decision did treat brandishing a gun as a sentencing factor, not as an element of the crime, yet the public Defenders argued that Harris was inconsistent with Apprendi and later sentencing cases. The judge rejected that challenge, but commented while imposing the added 2-year sentence that “I don’t like being the reverser of juries.” The judge said the Harris precedent gave him no choice.

Again, this is an important case. Perhaps more importantly, it reminds all of us about how important it is to keep up on the law, to note potential trends, and to never give up on an argument that can help our clients.

Yesterday, I concluded my case where we represented the Defendant in what seems to be the very first federal criminal prosecution for selling the prescription drug "Adderall". Early in the case, the prosecutor (and the probation officer) argued that the Sentencing Guidelines for this crime exceeded 10 years. Later, we got them down to 57-71 months. We filed an aggressive Sentencing Memorandum (Download file) arguing that the Guidelines and the whole case was far out of line. Yesterday, a United States District Judge sitting in Brooklyn, New York agreed with us, refused to put our client in jail, and imposed a sentence of 6 months home confinement.

We live in a pill-popping culture where pharmaceutical companies create more and more drugs that they claim we "need" to survive. Adderall is a drug prescribed mostly for Attention Deficit and Hyperactivity Disorder. It is well-known that this drug is often used, traded and sold by college students as a "study aid." More and more professionals use the drug to get through a big test or hard and stressful workload. Some stories have called it "Ivy League Crack."

Our client wanted to go to medical school. She had a romantic relationship with a medical doctor, who wrote Adderall prescriptions to supposedly "help" her study for the MCAT's. The doctor came up with the bright idea of writing more and more Adderall prescriptions, and then selling the excess pills to other Yuppies through Craiglist. He had our client fill most of the prescriptions, and showered her with gifts and trips using the proceeds. The couple broke up, he got busted, and turned on our client, resulting in her arrest as she got off a plane here in Atlanta. The case was prosecuted in the Eastern District of New York, where the doctor had been doing his medical residency.

This case is a perfect example of how recent societal trends show up in our federal criminal cases. We are glad that the sentencing judge understood and accepted our basic premise that sending this young woman to prison makes no sense. We hope that other people caught up in such situations look for attorneys who know the federal system well enough to navigate through these difficult cases.

Lawyers that specialize in defending federal criminal cases may be interested to know that the federal sentencing commission recently released a document entitled: "Selected Post-Booker and Guideline Application Decisions for the Eleventh Circuit". According to the Commission, "[t]he document is not a substitute for reading and interpreting the actual Guidelines Manual or researching specific sentencing issues." However, those of you that practice federal criminal law in Georgia, Alabama and Florida will find the document useful, because it does contain helpful "annotations to certain Eleventh Circuit judicial opinions that involve issues related to the federal sentencing guidelines."

I reviewed the document this morning and it is a fairly comprehensive. It not only includes case annotations dealing with many of the more common guideline provisions (including fraud, internet, and immigration offenses), but it also includes several sections that involve general principles of federal sentencing law, such as burden of proof issues, the requirements for sentencing on acquitted conduct, and departures and variances.

The document can be found here and for those of you that practice in other federal circuits, links to similar documents for those other circuits can be found here.