May 28, 2012

The Sixth Circuit Says That If You Plead Guilty To An Indictment You Don't Plead Guilty To All The Extra Bad Stuff The Government Put In The Indictment


Michael Louchart sold some guns. They were stolen and he knew it.

The feds caught up to him and charged him with conspiracy to steal firearms and with receiving and selling stolen firearms, each of which violated 18 U.S.C. § 922. In the indictment, the government said that Mr. Louchart was involved in the theft of more than 75 firearms.

It's not a coincidence that if a person steals more than 75 firearms they are then eligible for a sentencing enhancement under the sentencing guidelines.

Mr. Louchart didn't like his chances at trial. He entered a plea of guilty to the indictment, without a plea agreement.

1329263_pistol.jpgAt his plea hearing, the district court asked him what he did that made him guilty. Mr. Louchart said:

Well, a couple guys I know of brought me some guns, 13 revolvers and three long guns, and I sold them. And I knew they were stolen.

No one asked M. Louchart how many guns were stolen.

The presentence report assessed an increase in Mr. Louchart's proposed sentencing guidelines range, saying that he pled guilty to an indictment that said his crime involved more than 75 guns.

Mr. Louchart objected - he said he didn't say anything about any 75 guns.

The government put on no evidence of the number of guns, but relied on the fact that Mr. Louchart pled guilty to the indictment and the indictment said there were more than 75 guns.

The district court agreed, and applied the enhancement based on Mr. Louchart having participated in a conspiracy to steal guns with more than 75 guns.

Mr. Louchart appealed to the Sixth Circuit and, in United States v. Louchart, the Sixth Circuit reversed.

While, of course, the government can put on evidence to support a sentencing enhancement, and if it proves that the enhancement applies by a preponderance of the evidence, then an enhancement that a person being sentenced didn't admit to would apply. So admitting the facts supporting an enhancement under the sentencing guidelines isn't required to jack up a person's sentence.

As the court of appeals said,

To the extent that Louchart argues that he can be held accountable at sentencing only for the 17 guns that he admits possessing and selling, the law does not support such a limit. A district court may enhance a sentence based on relevant conduct so long as its factual findings are supported by a preponderance of the evidence and the sentence imposed does not exceed the statutory maximum.

But that's a separate issue.

The question, really, is whether Mr. Louchart admitted the number of guns in the indictment when he admitted that he was guilty of the offense charged there.

And the answer to that question is no.

As the Sixth Circuit explained,

Louchart's guilty plea, however, should not have been treated as an admission of the quantity of firearms stated in the indictment. The quantity of firearms involved was not an element of the offense, and the quantity of firearms alleged in the indictment was not admitted by Louchart at the plea hearing or in a plea agreement. Admission of facts from a guilty plea is limited to elements of the crime charged or those explicitly admitted to by the defendant. The Supreme Court for instance has carefully stated the scope of a guilty plea admission: "a guilty plea is an admission of all the elements of a formal criminal charge." McCarthy v. United Sates, 394 U.S. 459, 466 (1969) (emphasis added). The Supreme Court has also described guilty pleas as "comprehend[ing] all of the factual and legal elements necessary to sustain a binding, final judgment of guilt and a lawful sentence." United States v. Broce, 488 U.S. 563, 569 (1989) (emphasis added). This limited language strongly suggests that a guilty plea does not constitute an admission of facts included in an indictment when those facts were not necessary to sustain a conviction. It follows that these facts cannot be used to increase a defendant's sentence without the district court's first determining that the facts are supported by a preponderance of the evidence.

And, for those who practice outside of the Sixth Circuit, there's a nice survey of cases from around the federal appellate courts on this question.

Because Mr. Louchart didn't admit the number of guns, just that he met the elements, his case was remanded for resentencing.

May 24, 2012

The Eighth Circuit Reverses A Conviction Because The Government Didn't Show That Bank of America Mortgage Is FDIC Insured


Like many Americans, Meggan Alexander wanted to participate in the dream of home ownership. Like many Americans, Ms. Alexander had lost her job.

Unlike many Americans, Meggan Alexander signed documents at a real estate closing that said she was employed when she wasn't.

1117134_contract_2.jpgThe government can be a stickler for proper paperwork. Because she signed these documents saying that she was employed when she wasn't, she was indicted for making a false statement with the intent to influence an FDIC-insured entity.

Fortunately for Ms. Alexander, the government is not always a stickler for its own paperwork, as the Eighth Circuit's opinion in United States v. Alexander shows.

One of the things the government has to prove in order to convict someone of lying in connection with a loan from an FDIC-insured institution is that the institution that was lied to is FDIC-insured.

This requirement isn't trivial - without it there is no federal jurisdiction for the crime. It's not dissimilar to this earlier jurisdictional case arising out of the great state of Iowa.

At trial, the government and Ms. Alexander stipulated that Bank of America is FDIC-insured.

The loan documents, however, showed that the lender was Bank of America N.A.

So, as the Eighth Circuit explained it,

in order to satisfy the jurisdictional element for purposes of section 1014, the government could demonstrate either (1) that Bank of America, N.A. was FDIC insured, or (2) that Bank of America was Bank of America N.A.'s alter ego so that Bank of America's FDIC-insured status was implicated in the case.

The government didn't meet the first requirement:

Alexander is correct that there is no evidence in the record to show that--absent a connection to Bank of America--Bank of America, N.A. or Bank of America Mortgage were independently FDIC insured. The only evidence of FDIC insurance was the stipulation signed by Alexander, which failed to include any mention of Bank of America, N.A. or Bank of America Mortgage.

This is presumably because the government thought it had a sufficient stipulation; it didn't think that anyone would argue that Bank of America is a different entity than Bank of America N.A. or Bank of America Mortgage.

The court of appeals describes the government's argument on the second point this way:

our review turns to whether there was sufficient evidence to prove that Bank of America, N.A. and Bank of America Mortgage were alter egos of Bank of America so that Bank of America's FDIC-insured status extended to them. This is familiar territory for the government, as it rested on this "same entity" theory at trial. During their testimony, bank employees and other witnesses involved in the loan process used the terms "Bank of America," "Bank of America, N.A.," and "Bank of America Mortgage" interchangeably. Likewise, although the loan application and several other documents in evidence refer to "Bank of America, N.A." as the lender, other documents, including one of Alexander's hardship letters, occasionally reference "Bank of America" as the lender. The government insists that all three "Bank of America" titles "refer to the same entity and that was the entity to which defendant made her false statements." The government asks that the FDIC-insurance stipulation be read broadly to encompass all three "Bank of America" entities.

The Eighth Circuit, though, wasn't persuaded:

the evidence presented in the instant case does not show how the three different entities are structured or how funds were disbursed. No evidence was offered to show that the mortgage financed by Bank of America, N.A. was actually financed by funds from Bank of America. The witnesses called by the government were low-level employees, none of whom were shown to be qualified to testify about the corporate structure of the different entities. The fact that employees used the terms "Bank of America," "Bank of America, N.A.," and "Bank of America Mortgage" interchangeably in their testimony and on internal correspondence does not establish that the entities are one and the same.

And, with that, Ms. Alexander's conviction for making false statements to the Bank of America N.A. was reversed because there wasn't evidence that Bank of America N.A. or Bank of America Mortgage were FDIC-insured.

Sadly, Ms. Alexander was convicted on another count involving HUD insurance for the mortgage and there's no question that HUD is a federal program.

But at least she gets to be resentenced without the FDIC count.

May 18, 2012

The Fourth Circuit Holds That If The Police Prevent Your Car From Legally Moving, They Have Seized You

Last year came to be known as the year that the Fourth Amendment rose again in Richmond, Virginia.

The Fourth Circuit held that police conduct violated the Fourth Amendment here, here, here, here, and here.

Last week, the Fourth Circuit did it again.

230777_view_of_richmond.jpgFrederick Jones was driving three of his friends through Richmond Virginia. They were in a car with New York license plates. They were all African-American.

Two police officers spotted them and started to follow their car. Because the area was known as a place where people sell drugs, and because the men were in a car with out of state plates, and because, as one officer put it "the people in the vehicle didn't belong there" they were followed.

In the light of the late afternoon, the police followed the men in a marked police car.

The men pulled onto a one-way private road that ran along an apartment building. They parked their car.

The police car pulled past them on the road and stopped, blocking anyone from driving past. If the men wanted to leave in their car, they would have had to back up the one-way street the wrong way.

The men in the car got out. Mr. Jones stayed with the car by the driver's side door. Everyone else went into the apartment building.

The police got out of their car and walked up to Mr. Jones. They instructed him that they needed to talk to him. They asked him to lift his shirt and to let them pat him down. He did.

They asked for his driver's license. He didn't have one.

They told him he was then under arrest for driving without a license. When they searched him again as a part of the arrest, they found a gun in his pants, and some marijuana. He was charged with possessing a firearm as a drug user. (though, what about this Fourth Circuit case?)

He filed a motion to suppress the evidence, which was denied. On appeal, the Fourth Circuit reversed, in United States v. Jones, finding that he was seized by the officers when they approached him for Fourth Amendment purposes, so that the evidence was obtained illegally.

The court of appeals was moved by the way the officer parked.

We agree that when an officer blocks a defendant's car from leaving the scene, particularly when, as here, the officer has followed the car, the officer demonstrates a greater show of authority than does an officer who just happens to be on the scene and engages a citizen in conversation.

The court of appeals also thought the way the officers approached Mr. Jones also made it plain to him that he couldn't leave. Some times, officers approach and ask permission to talk to a person. That isn't what happened here.

Rather, in speaking to Jones, the officers clearly continued their show of authority. According to [the officer] himself, 'right when' he 'made contact' with Jones, he asked Jones to "lift [his] shirt" to see whether Jones possessed a weapon. Not satisfied with the shirt lift, [the officer] then asked Jones to consent to a pat down search, further implying that the officer suspected that Jones--a person the police had followed onto private property--might be armed. Thus, their immediate verbal exchange with Jones did nothing to lessen a reasonable person's suspicion that he was the target of a criminal investigation, and, in light of the totality of the circumstances, only enhanced it.

For those reasons, the Fourth Circuit concluded that

Thus, the totality of the facts in this case requires us to conclude that the officers detained Jones before they had any justification for doing so. For two police officers in uniform in a marked police patrol car conspicuously followed Jones from a public street onto private property and blocked Jones's car from leaving the scene. The officers then quickly approached Jones by the driver's side of his car -- letting two other vehicle occupants walk away--and nearly immediately asked first that he lift his shirt and then that he consent to a pat down search for weapons. Although the uniformed officers did not draw their holstered weapons or use a threatening tone, these circumstances would suggest to a reasonable person that the officers were not "treating the encounter as 'routine' in nature," but rather that the officers were targeting him because he was engaged in "illegal activity." See Gray, 883 F.2d at 322-23. Any one of these facts on its own might very well be insufficient to transform a consensual encounter into a detention or seizure, but all of these facts viewed together crystallize into a Fourth Amendment violation.

The Confederacy may never rise again, but it's nice to see the Fourth Amendment is coming back in Richmond.

May 17, 2012

Why It Is Probably Better To Pick Up The Phone of Someone You've Shot Than To Take Their Phone At Gunpoint Then Shoot Them

Someone shot Eric Davis. He wasn't hurt badly, but he was mad.

The next day, someone told him that the man who shot him was near a high school. Mr. Davis went to the high school. He saw Octavious Wilkins, and took Mr. Wilkins as the man who shot him.

Mr. Davis, and friends, approached Mr. Wilkins. They had guns drawn.

Two things happened as a result. Mr. Wilkins was shot, and Mr. Davis wound up with Mr. Wilkins' cell phone.

1046664_cell_phone_in_trouble.jpgWhat isn't clear is how Mr. Davis came to possess Mr. Wilkins' phone.

Maybe Mr. Davis threatened Mr. Wilkins with a gun, and demanded his phone, then shot him as he ran away later.

Maybe Mr. Davis threatened Mr. Wilkins, who ran and was shot, then dropped his phone as a result of being shot.

Regardless of which happened, Mr. Davis was charged in state court in North Carolina with common law robbery. He was charged in the United States District Court for the Eastern District of North Carolina with being a felon in possession of ammunition.

His state case moved faster than his federal case, as so often happens. He entered a no contest plea to the robbery charge - he didn't admit that he did it, just that he wouldn't contest it.

He was sentenced to between 14 and 17 months in prison on the state robbery charge.

He also entered a plea to the federal charge. Because possessing ammunition is clearly more than five times worse than robbing someone, Mr. Davis's sentence in federal court was more than five times longer - 108 months.

In sentencing him, the district court had to decide if his guidelines range would be raised because he used the gun in connection with a robbery.

If he used the gun in connection with a robbery, his range would be 120 months (or, more accurately, it should have been 121-151 months, but the statutory mandatory minimum of ten years means that it is effectively 120 months).

If he used the gun in connection with, say, assault - shooting someone else without necessarily intending to take their stuff - then his range would be 46 to 57 months.

So, if Mr. Davis pointed a gun at Mr. Wilkins, demanded his phone, and took it - then it looks like that's clearly robbery.

If Mr. Davis shot Mr. Williams then picked up his phone when he dropped it, that looks a little more like assault.

The district court tried to avoid this factual question. Instead, it focused on the fact that Mr. Davis was convicted of robbery in state court. The district court was uninterested in the detail that Mr. Davis's conviction was the result of a no contest plea.

The Fourth Circuit, in United States v. Davis, held that the district court should have been more interested in the basis for the plea in state court, saying

we hold that Davis's 'no contest' plea to common law robbery could not alone provide the necessary evidentiary basis to support application of the robbery cross-reference. What is necessary is factfinding regarding Davis's conduct. If Davis is to be sentenced as if he committed, not just the passive, status offense of unlawful possession of a single round of ammunition, but a robbery, the Sentencing Reform Act requires that the sentencing court make the findings necessary to justify such a result.

Ok, fair enough - the district court was wrong to rely on the fact of a conviction based on a no contest plea.

On remand, the district court will have to look at the evidence of what happened - when did Mr. Davis take Mr. Wilkins' phone?

It may be that whatever Mr. Davis did to get possession of Mr. Wilkins' phone is robbery in North Carolina. After canvassing some of the cases, the court of appeals noted that:

we discover that North Carolina law is predictably nuanced in situations where property is taken during or following a violent altercation that is motivated by reasons entirely unconnected to the purloined property itself.

However, resolving this question, the Fourth Circuit determined, was not its job. Rather, the court of appeals observed that

the parties seek to draw us into a nice dispute over the proper interpretation of the North Carolina law of common law robbery. But that is a dispute to be properly resolved by the district court in the first instance, which has not happened here. Even more fundamentally in our judgment, the correct application of the guidelines in this case hinges on factual determinations, which are also for the district court to make.

The case was, therefore, remanded for resentencing.

Funny, though, that the court that sentenced Mr. Davis for the conduct at issue - the North Carolina state court - gave him a sentence so much lower than whichever sentence he winds up with in federal court.

May 16, 2012

A District Judge Can't Sanction A Lawyer For Filing A Motion Even If He Really Hates The Lawyer's Client; Also, a 60-Year Sentence Requires A lot of Explanation

Sometimes, it seems that Congress and the courts are in a race to see who can show that they hate child pornography the most.

Congress imposes draconian mandatory minimums on child pornographers. Federal judges impose bizarre and unsupported conditions of supervised release after the people convicted of child pornography are released from prison.

But one district court judge in Michigan blew the roof off the race to hate child pornographers the most. He maxed out the man convicted of the child porn offenses and, to show he was really tough on these kinds of crimes, he sanctioned the guy's lawyer.

Of course, because you're reading about it here, the Sixth Circuit reversed in United States v. Aleo.

285538_travelling.jpgDo Not Cross A Border With Child Porn On Your Computer

Craig Aleo was under investigation because his paypal account had been used to buy access to child porn webpages. Mr. Aleo did not know he was under investigation.

He and his wife decided to vacation in Canada. They crossed the border and an alert that Mr. Aleo was under investigation for a child porn offense was triggered when Mr. Aleo's passport was scanned. Government agents searched Mr. Aleo.

When you cross a border, the government gets to search your stuff without a warrant (see, e.g., this case).

In his computer, they found child pornography - including one video file of him with his granddaughter.

Mr. Aleo was charged with three child porn offenses and entered a guilty plea.

The District Court's Sentence

At sentencing, Mr. Aleo's guidelines range was 262 months to 327 months. The government advocated for a sentence in the middle of the range - 300 months.

Mr. Aleo's lawyer asked for the statutory mandatory minimum of 180 months, or 15 years.

The district court judge had other ideas. His view was that:

The discretion of the sentencing is up to me. I believe [Aleo] has no remorse, but even if he had remorse, I would not change that sentence because of the despicable act that he did.

More fully, the court said that:

Number one, I think this is perhaps one of the most despicable cases that I have ever been involved in, in 28 years on the bench. I've been thinking about it, thinking about it and I can't think of another case. . . . I've listened to the defendant's attorney argue today and I've listened to the defendant. I've heard not a word of remorse. Not a word. . . .

The Court . . . believes that the sentencing guidelines are totally nonapplicable to this case. There is no human committee, and that's what the sentencing guideline commission is, it's a human committee that tries to equalize a fairness in terms of sentencing. I don't think they ever anticipated that a granddaughter would be involved in this kind of--a victim, in this kind of activity and certainly not a grandfather doing it. There's no way they would have been able to even foresee that. So the guidelines . . . certainly is not a guideline for this kind of case . . . . there's no way that the sentencing guidelines are adequate . . . to punish the defendant for what he has done to the victims and to make this thing right. . . .

The court sentenced him to the statutory maximum of 720 months - or 60 years. Mr. Aleo was in his 60s.

The district court also imposed 5 years of supervised release.

The Sixth Circuit Disagrees About What The Sentencing Commission Has Considered

The Sixth Circuit reversed. As it happens, the district court was wrong about what the sentencing commission has considered. As the court of appeals noted,

we question the district judge's belief that the sentencing guidelines could not have envisioned a crime such as Aleo's. In fact, the Sentencing Guidelines do envision a crime such as Aleo's--Aleo's guidelines calculation included several enhancements that specifically addressed the unique characteristics of his offense. Four levels were added because Aleo produced child pornography with a minor under the age of twelve. Two levels were added because the offense involved the commission of a sexual act or sexual contact. Two levels were added because Aleo was a relative of the minor and the minor was in his custody, care, or supervisory control. Therefore, the guidelines expressly take into account a defendant who creates child pornography using a relative, when the relative was under the age of twelve, under the individual's supervision, and who the defendant sexually touched during the creation of the pornography. The guidelines do not specifically differentiate the grandparent/grandchild relationship from other familial relationships, but neither do they differentiate the parent/child relationship, which, when involved in an offense, seems equally or more deserving of condemnation. The guidelines took into account the very factors that the sentencing judge said that they did not. Therefore, the belief that these factors were not envisioned by the creators of the guidelines is not a compelling justification for the judge's variance from the guidelines range.

The court of appeals was also worried that this sentence was way out of whack with other sentences for these kinds of crimes - folks who had done much worse (read the opinion to see how much worse it can get if you'd like) had received lower sentences. The district court's sentence creates massive disparities in sentencing that it didn't account for.

The sentencing was reversed and remanded.

The District Court Also Punished Mr. Aleo's Lawyer

Mr. Aleo's lawyer, before sentencing, asked the government if it was going to have any witnesses speak at sentencing. Apparently he wanted to be prepared.

The prosecutor said he didn't have to disclose that.

Mr. Aleo's lawyer - Mr. Freeman - filed a motion to compel disclosure, saying that it was necessary to protect his client's due process rights to challenge evidence against him at sentencing.

The district court didn't rule on the motion until sentencing, when he denied it and said that he would address it later in a written order.

And address it he did - the court issued an order directing the parties to brief whether Mr. Freeman should be sanctioned for filing a motion to learn who the witnesses against his client would be at sentencing.

The government opposed such a sanction. Mr. Freeman argued that he was required to file it as a zealous advocate and that it was supported by an article he read. Of the article, the Sixth Circuit noted that,

[T]his article does state that the [Crime Victims Rights Act] requires "[a] victim or alleged victim [to] 'assert' any 'right' [to speak at sentencing] by 'motion.'" Amy Baron-Evans, Rights and Procedures Under the Crime Victims' Rights Act and New Federal Rules of Criminal Procedure, April 30, 2009, at 58, available at http://www.fd.org/docs/select-topics---rules/rules-article-final.pdf?sfvrsn=2. The article also states that "the defendant must be given notice and a full and fair opportunity to respond to any motion asserting a victim's rights. This is necessary to effectuate the defendant's right to due process." Ibid. Baron-Evans is a resource counsel who has served as the National Sentencing Resource Counsel in the Office of Federal Public Defenders for Massachusetts, New Hampshire, and Rhode Island. She was ranked as a Massachusetts Super Lawyer in 2004, 2005, 2006, and 2008.

The district court was unmoved. It held that it had the inherent authority to sanction Mr. Freeman, that the motion was filed in bad faith to intimidate victims, and then the court sanctioned Mr. Freeman $2,000 for filing it.

The Sixth Circuit reversed this too. The court of appeals held that

Even if Freeman's motion was meritless, and even if Freeman should have known this, the court has not given any evidence to support its position that Freeman filed the motion to harass the victim's mother. We may uphold an order of sanctions even without an "express finding of willfulness, bad faith or recklessness," but only if the record sets forth evidence that the party acted in bad faith. Metz, 655 F.3d at 490. The court "must find something more than that a party knowingly pursued a meritless claim or action at any stage of the proceedings." Id. at 489 (internal quotation marks omitted).

The court of appeals then reversed the sanction.

Back to the Same Judge

Mr. Aleo asked to be resentenced by a different judge than the one who gave him the statutory maximum sentence and sanctioned his lawyer for doing his job.

The Sixth Circuit said no to this,

A decision to remand to a different judge is based on considerations of whether the judge on remand is capable of providing a fair and unbiased rehearing of the case, as well as with considerations of efficiency and the preservation of judicial resources. See, e.g., United States v. Faulks, 201 F.3d 208, 209 (3d Cir. 2000); United States v. Garcia-Robles, 640 F.3d 159, 168 (6th Cir. 2011) (considering whether there is "evidence in the record indicating that the district judge will have difficulty conducting de novo sentencing" proceedings.). We trust that Judge Friedman will revisit the matter with a completely open mind at the de novo resentencing that must now take place, Faulks, 201 F.3d at 209, and we thus do not accept Aleo's argument.

Wow, that's going to be some resentencing.

Update: There is a fascinating discussion in the concurrence about whether a federal district judge even has the authority to sanction a lawyer under the court's inherent power. It looks to me like the concurrence has the better position (the opinion of the court dodges the issue), but if you're an inherent-power groupie it's a must-read.

May 10, 2012

The Third Circuit Says It Is Hard To Abuse The Trust of Someone Who Doesn't Trust You, Especially If That Someone Is The IRS

James and Theresa DeMuro owned an engineering company in New Jersey called TAD Associates.

Not unlike yesterday's tax case from the Eleventh Circuit, TAD Associates withheld money for taxes from its employees paychecks. TAD did not send that money along to the IRS.

The IRS approached the DeMuros about this. It was a civil matter at that point - the IRS required the DeMuros to set up a special trust account where they were to put their employees taxes.

1285834_four_hands.jpgThe DeMuros set up the account. The purpose of the account was to hold money that would be paid to the IRS.

The DeMuros, though, took money out of the account to pay for personal expenses. And they closed the account early, and without the permission of the IRS. They also didn't put as much money into the account as the IRS thought they should, though they did spend a massive sum on items for themselves.

They were indicted for conspiracy to defraud the United States, 21 counts of failure to account for and pay employment taxes, and other tax charges.

They were convicted.

At sentencing, the district court applied a sentencing enhancement for abuse of a position of trust, because the DeMuros had signature authority on the trust account and did not handle it in the way that the IRS wanted them to.

Sentencing Guidelines § 3B1.3 says that:

If the defendant abused a position of public or private trust, or used a special skill, in a manner that significantly facilitated the commission or concealment of the offense, increase by 2 levels.

As the Third Circuit explained, in the appeal of the DeMuros sentence, United States v. DeMuro (and conviction - though that part of the appeal didn't go too well), when deciding whether the enhancement for abuse of position of trust is warranted:

we employ a two-step analysis: (1) whether the defendant occupied a position of public or private trust; and (2) whether the defendant abused this position of trust in a way that significantly facilitated the crime.

In turn, the Third Circuit looks at three things in deciding whether the person occupied a position of trust:

[I]n considering whether a position constitutes a position of trust for purposes of § 3B1.3, a court must consider: (1) whether the position allows the defendant to commit a difficult-to-detect wrong; (2) the degree of authority which the position vests defendant vis-a-vis the object of the wrongful act; and (3) whether there has been a reliance on the integrity of the person occupying the position.

So - did the DeMuros have a position of trust with respect to the IRS that let them not pay their taxes.

The court of appeals said they didn't for three reasons. The bottom line, though, is that the DeMuro's position with the IRS wasn't a position of trust; if anything it was a position of lack of trust.

First, the whole point of the trust account was so the IRS could more easily monitor the DeMuros' tax payments. The enhancement is supposed to apply to people who hide behind an account to do a crime - here, the account made it easier, not harder, for their conduct to be detected by the IRS. That's just not a position of trust.

Second, the trust fund was set up to take away discretion by the DeMuros, not add to it.

Third, the IRS set up the trust account because they didn't want to rely on the integrity of the DeMuros.

Because the trust account was set up not to rely on the IRS's trust of the DeMuros but to hedge against the IRS's complete lack of trust, the guidelines enhancement did not apply.

And back to resentencing the case will go.

May 9, 2012

The Eleventh Circuit On Tax Crimes and Grouping Under the Sentencing Guidelines

Stuart Register ran a business that conducted criminal background checks on people.

He had a number of employees. Employees, of course, have to be paid. To pay them, he used a payroll company - PrimePay. PrimePay withheld taxes from the employees' pay, and told Mr. Register how much he needed to send to the government for those taxes.

Mr. Register did not send money that was withheld to pay taxes.

As you might suspect, that is a federal crime.

Mr. Register also falsified his personal taxes from 2003 until 2006.

That is also a federal crime.

169849_tax.jpgHe was indicted and pled guilty without a plea agreement.

The tax loss - the amount of money the government lost because of the tax crime - for Mr. Register's withholding offense was a little more than $300,000.

The loss for his falsified tax returns was around $115,000.

The question is - should Mr. Register be punished more because he had two separate kinds of tax offenses.

A step back is helpful. Under the federal sentencing guidelines, sometimes, two different offenses "group." And sometimes they don't. Generally, a person being sentenced wants the charges to group.

Intuitively, you can see that if a person robs two banks, those are separate crimes with separate victims. The harm caused by the bank robbery is the fear instilled in the teller, as well as the money taken from the bank.

So, if a person robs a bank on Monday, then on Tuesday robs the same bank again - but with a different teller let's say - you would think there are two separate harms. As a result, you would want the person's sentence to increase based on the second scary thing that happened to the teller.

And the guidelines accommodate that intuition - when there are two separate harms like that the crimes do not group. When things do not group, then each serves to increase the sentence that the sentencing guidelines suggest.

Imagine, though, that the person is just embezzling from the bank. Suppose, let's say, that a teller is slipping money out when counting the receipts. And she does that on Monday and Tuesday. There, the harm is the money being stolen. So, the guidelines count all the money that's taken, and add it together, but do not treat each separate event as something that necessarily should increase the person's sentence - beyond the increase that comes just from more money being added.

For Mr. Register, the question was whether the two tax offenses should group.

The probation officer preparing the presentence report said that they do not group. Both Mr. Register and the government objected, and the probation officer stuck to his or her guns. In response to the joint objection, the probation officer said (with my emphasis added),

The guidelines direct under USSG § 3D1.2 that counts can be grouped together when they involve substantially the same harm. Under subsection (b), counts can be grouped together when they involve the same victim and two or more acts connected by a common criminal objective or common scheme or plan. Under subsection (d) counts can be grouped together when the offense level is determined largely on the basis of the total amount of harm or loss. The defendant has been convicted of 17 counts representing two offenses: Failure to Pay Over Taxes to the [IRS] and Filing Fraudulent Federal Income Tax Returns. During the years 2004 through 2007, the defendant failed to pay over employment taxes to the IRS for his employees. In addition, during the same period, he failed to pay income taxes on his own income and claimed inflated amounts of federal income tax withheld causing the IRS to pay him refunds that he was not entitled to. Although the IRS is the ultimate victim in both endeavors, the probation office views the defendant's criminal behavior as two separate criminal objectives with two separate harms. It does not appear that the defendant committed both acts to specifically defraud the IRS. It does appear that the acts occurred as a result of his lifestyle and/or his personal financial situation. His behavior was not part of a single course of conduct with a single criminal objective.

So, the probation officer concluded that because there was no single course of conduct, there could be no singular harm, even though the one singular entity - the IRS - was out money because of the conduct.

The district court agreed, and sentenced Mr. Register to the high-end of his non-grouped guidelines range - 27 months.

Mr. Register appealed, and the 11th Circuit, in United States v. Register, reversed.

The court of appeals decision tracks closely the language of section 3D1.2 - basically, when the sentencing guidelines range is driven by a loss amount, there is no requirement in the guidelines that the offenses at issue arise out of the same plan or scheme.

So, since there was one victim - the IRS - suffering one harm - the loss of tax revenue - the two different tax crimes group, and Mr. Register goes back for resentencing.

May 8, 2012

The Sixth Circuit Remands For Resentencing Because The Guidelines That Didn't Apply To The Person Being Sentenced Changed

Michael Jackson - no, not that one - pled guilty to dealing crack.

He did so at a particularly odd time in our Nation's history when it comes to crack sentencing.

Mr. Jackson's plea hearing was in June of 2009. The district court judge, wanting to give Mr. Jackson the benefit of what the court was sure would be a new change in our crack sentencing laws - sure that change he could believe in was coming - let Mr. Jackson's sentencing hearing be delayed to see if Congress would change the crack sentencing laws.

The district court waited more than a year. Finally, it could wait no longer.

On July 16, 2010, the district court sentenced Mr. Jackson. In explanation, the judge - who seems like a very nice person - said,

[W]e waited and waited and waited to see if Congress would change the guidelines, or the statutes, with regard to crack versus powder cocaine. My information now indicates that it's a dead issue in Congress and that it's not going to change, at least in the foreseeable future. . . . . I was trying to give you the benefit of any change in the law that might occur, and it doesn't appear that it's going to. For that, I'm sorry . . . .

Less than three weeks later Congress passed the Fair Sentencing Act, changing the law as it applies to crack sentencing. Specifically, the Fair Sentencing Act required new guidelines be issued for crack sentencing. And they were.

1214820_painted_by_numbers___.jpgMr. Jackson's appeal was pending, and the issue he raised in the appeal was whether he should have received the benefit of the new change in the sentencing guidelines for crack cocaine.

The Sixth Circuit reversed and remanded for resentencing under the new crack guidelines in United States v. Jackson on the theory that, basically, it was easier to remand than to require him to file a motion for resentencing under 18 U.S.C. § 3582(c).

If you're familiar with federal sentencing, this makes sense so far. Here's the twilight zone moment - Mr. Jackson was a career offender.

Because Mr. Jackson had at least two prior convictions for violent crimes or drug distribution offenses, he was sentenced under the career offender guidelines in § 4B1.1, and not under the crack guidelines.

That's right - the judge was waiting for a change in the guidelines that didn't apply to Mr. Jackson.

And his lawyer asked for him to be resentenced because there was a change in the guidelines that didn't apply to him.

And the Sixth Circuit reversed and remanded because the guidelines that didn't apply to Mr. Jackson changed after his sentencing.

This may be the only time that a cryptic and underdeveloped record has helped a defendant in an appeal, but the Sixth Circuit noted that

The district court varied downward from the career offender guideline to a sentence it believed was more reasonable based on the crack versus powder disparity -- at least as far as we can tell from the transcript. The court mentioned no other reason that could account for the 38-month downward variance in the ultimate sentence. Jackson's sentence was "based on" the range produced by subtracting three levels from the career offender guideline. The district court rejected the career guideline range in favor of something else. The only "something else" he mentioned at the sentencing hearing was the "untenable" disparity in crack versus powder sentencing. Although we cannot know exactly how the court would have sentenced Jackson had the revised guidelines been in place in July 2010, the court expressed its desire to use the lower range in sentencing Jackson.

The court of appeals then asserted that

If a sentencing judge, having found a defendant to be a career offender, then decides to sentence defendant below the range for career offenders and notes his policy disagreement with the crack cocaine guidelines, ordinary review would say that the sentence was as much "based on" the crack cocaine guidelines as the career offender guidelines.

The Sixth Circuit also said that this result was required by the Supreme Court's recent decision in Freeman v. United States, where the Supreme Court requires that a section 3582(c) proceeding - to modify a sentence based on a retroactive guideline change -

should be available to permit the district court to revisit a prior sentence to whatever extent the sentencing range in question was a relevant part of the analytic framework the judge used to determine the sentence.

Because the district court appeared to consider the crack guidelines as a part of its analytical framework when sentencing Mr. Jackson and those guidelines changed, he'll be resentenced - even though those guidelines didn't apply to him.

Which makes me wonder how attenuated the "analytical framework" has to be. I think I've argued that loss in a fraud case should be calculated with reference to the calculation of drug quantity - is there now an argument that those cases should go back for resentencing when the crack guidelines change?

Maybe I should practice more in the Sixth Circuit.


See also:

Retroactivity In The Federal Sentencing Guidelines and The Parol Evidence Rule

May 3, 2012

The Eighth Circuit Holds That Omaha Police Can't Run Into A Hotel Room Without A Warrant Even When They Just Finished A Very Exciting Chase And Are Proud Of Themselves For Finding The People They Were Looking For

It must be hard for the police to be hot on a chase, then have to slow down to get a warrant.

But, even though the police are excited from being on the trail of a suspected drug mule, the Eighth Circuit held, in United States v. Ramirez, that just because the police are hurrying to get their man, they still have to get a warrant to search his room.

1144233_vacancy.jpgThe Great Omaha Goose Chase

A Greyhound bus traveling across the country stopped in Omaha for a rest break. We don't know how, but the police arrested two men from the bus for having heroin in their shoes. The men flipped quick, and told the police that they were traveling with at least one more man who also had heroin in his shoes.

The police went looking for the third man.

They found some luggage from the bus that no passenger claimed - in one of the bags was a photo ID of a man named Hector Cruz.

The bus driver said he was missing five passengers - the two men who had been arrested and three other men.

The bus company said that the five who were missing all purchased their tickets in cash within a few minutes of each other. And all of them purchased one-way tickets from San Diego to Newark.

The officers set out looking for the other three men.

They called cab companies to see who had picked someone up from the bus station. A cab company led them to a nearby Best Western.

At the Best Western, the police learned that three men - one of whom matched the photo of Hector Cruz - had arrived earlier, but didn't check in. The cops learned the men took a cab to a Comfort Inn.

At the Comfort Inn, the police saw video showing that three men - one of whom matched the photo of Hector Cruz - arrived in a cab, but didn't enter the motel.

Instead, they went to McDonald's. Looking at the video, the police thought the men were walking as though they had heroin in their shoes.

At the McDonald's the police learned that the men asked for a phone book. They called a cab, and took it to an Econo Lodge.

At the Econo Lodge, the desk clerk confirmed that three men checked in and that one of them looked like the man in Hector Cruz's photo ID. They were given room 220.

The Econo Lodge clerk, who I imagine to be a kindly Nebraskan grandmother, embroidering an inspirational saying onto a doily as she talked to the police (perhaps "Everyday is a gift, that's why they call it the present", attributed to Kung Fu Panda 2), gave the police a key card to access room 220.

At Room 220

At Room 220, six police immediately set up to go into the room. It was perhaps two and a half hours since they had been at the bus station. The police established perimeter surveillance. One officer listened at the door and heard nothing.

He inserted the keycard.

It didn't work.

The police officer went to Plan B. He knocked at the door, covered the keyhole, and said (I like to think, in a faux female voice) "housekeeping".

A man came to the door, opened it, saw the police, and tried to close the door.

The police stopped him and forced their way inside.

Once inside, they saw shoes like the ones that the two other men from the bus station were wearing. The kind of shoes that, before, had contained heroin.

The shoes in room 220 also contained heroin.

The Motion To Suppress

One of the men, Ramirez, was arrested. (I assume the others were too, but there's nothing in the opinion about that). His lawyer filed a motion to suppress, because there was no warrant.

The district court in Omaha denied the motion. The court found that exigent circumstances justified the warrantless search.

The police generally do not need a warrant if stopping to get a warrant would give the people they're chasing more time to destroy evidence - like heroin - or hurt someone. So, here, the district court said that the police reasonably though that the drugs were likely to be destroyed if they went to get one.

The district court determined that the police could reasonably fear that the men in the room would destroy evidence because:

1) one of the investigators reasonably believed the men were attempting to elude the officers after they witnessed the officers arrest the two men at the bus stop; 2) the men in room 220 had purchased one-way tickets to Newark, New Jersey, with cash, and were not from Omaha; and 3) after the officers announced their presence, Cruz attempted to shut the door to prevent the officers from entering the room.

The Eighth Circuit

The Eighth Circuit disagreed. First it considered the third point that justified exigency - that the man who came to the door would not let the police in - and rejected it.

Basically, a citizen gets to slam the door on the police (as long as you don't hit the police with the door). Just because a person refuses to let the police into his house does not mean that the police can go in without a warrant. There wouldn't be much of a warrant requirement in the constitution if the rule were different.

when the police knock on a door but the occupants choose not to respond or speak, or maybe even choose to open the door and then close it, or when no one does anything incriminating, the officers must bear the consequences of the method of investigation they've chosen. At that point, if their method fails, "the investigation will have reached a conspicuously low point,' and the occupants 'will have the kind of warning that even the most elaborate security system cannot provide." . . . Accordingly, crediting these officers with conducting a run-of-the-mill attempt to simply knock and gain entry, [the man who opened the door] was under no obligation to allow the officers to enter the premises at that point and was likewise within his bounds in his attempt to close the door. That he did so, without more, does not bolster the claim that it was reasonable to conclude that the destruction of evidence was imminent.

As to the first point justifying exigency - the court of appeals found that there was no reason to think the men knew the police were after them. They'd been in the hotel room for half an hour when the cops showed up. If they were going to flush the heroin because the police were chasing, they probably would have already done it.

On the last point, the court of appeals gave it little discussion, but basically no weight. It's probably too obvious to say that it's unlikely that someone would travel to Omaha with heroin just to flush it in a Nebraska toilet.

And, with that, the heroin was suppressed. Good luck in the future, to Mr. Carlos Ramirez.


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May 2, 2012

Judge Posner, Heraclitus, And The Chicago Mob


It's difficult not to love an opinion that contains this paragraph:

Heraclitus famously said that one never steps into the same river twice. What he meant was that one never steps into the same water; the river is the same, even though its substance is always changing. And so a conspiracy can be the same even if all the acts committed pursuant to it are different, because it is the terms of the agreement rather than the details of implementation that determine its boundaries.

Federal prosecutors love conspiracies more than Oliver Stone. Prove an agreement between A and B to further an illegal end, and you can bring in all sorts of stuff against A that she didn't actually do (B did). And you only have to prove a constructive agreement - not an actual one.

453289_matrioshka_-_nesting_dolls.jpgThe Seventh Circuit, though, in an opinion by Judge Posner in United States v. Schiro, discussed how the Double Jeopardy Clause can throw a curveball into a conspiracy prosecution. Sadly, though, the Double Jeopardy issue did not carry the day for those charged with the federal offense.

As Judge Posner explains,

Double jeopardy can take two forms. One is prosecution for a crime the elements of which overlap the elements of a crime involving the same facts for which the defendant had been prosecuted previously. And in such a case, a case "where the same act or transaction constitutes a violation of two distinct statutory provisions, the test to be applied to determine whether there are two offenses or only one, is whether each provision requires proof of a fact which the other does not." For example, there would be only one offense for purposes of assessing double jeopardy if the second prosecution was for a lesser included offense of the crime for which the defendant had been prosecuted the first time. The other form of double jeopardy is prosecuting a person a second or subsequent time for the same offense, and that can be a difficult determination to make when the offense is conspiracy.

But here, two men were accused of a RICO conspiracy who were previously tried for a RICO conspiracy with each other. So, was the second RICO conspiracy the same conspiracy as the first one, or a separate conspiracy?

Judge Posner suggests this way of teasing the issue out:

A worker at Ford Motor Company's River Rouge Complex is an employee of Ford Motor Company. His agreement to work on the River Rouge assembly line contributes both to the plant's output and to the output of the company as a whole, of which River Rouge's output is simply a part. If Ford produced sawed-off shotguns rather than automobiles, the worker could be prosecuted for conspiring with employees of Ford or employees at the River Rouge plant to produce an illegal weapon, but he could not be prosecuted for two separate conspiracies, because the members and the objectives and the activities of the two conspiracies (conspiracy with employees of Ford, conspiracy with employees at River Rouge) would be identical.


But if after producing sawed-off shotguns in the River Rouge plant an employee who had worked there is promoted into the Ford executive suite in Detroit as a regional manager and while there prepares financial reports designed to conceal from the government Ford's income from the production of illegal weaponry at River Rouge and other Ford plants, he has joined a separate though overlapping conspiracy.

In Mr. Schiro's case, the men were charged with being leaders of a Chicago street gang. There were two levels of hierarchy - street crews and "the Outfit". "The Outfit" ran the street crews, but also directed certain financial decisions and commissioned and carried out the murder of potential informants.

Thus, every street crew member was a member of "the Outfit" but not every member of "the Outfit" was a member of a particular street crew.

If as in our first Ford hypothetical you do street crew business only, you are not working for two different enterprises even though the street crew is a branch; the enterprises are no more different than two nested Russian dolls are. But if you murder, which is Outfit business because it is too sensitive to be left to the street crews, you are working for the Outfit in a respect that is different from your street crew work; you are demonstrating that your agreement to assist the Outfit is broader than and distinct from your agreement to assist your street crew, just as conspiring to assemble shotguns at a plant is different from conspiring to conceal the assembly of shotguns at numerous plants.

Alas, the government's allegations in the recent case and the prior one were separate enough that the two alleged conspiracies were, indeed, separate agreements. And so the double jeopardy challenge failed.

Judge Wood dissented. She started by observing that,

Calabrese and Marcello had each already been convicted and imprisoned for their part in the street crews that lie at the heart of the Outfit's Chicago operation. See United States v. Zizzo, 120 F.3d 1338 (7th Cir. 1997) (Marcello), and ante at 3. Those prosecutions coveredthe period from 1978 to 1992 for Calabrese and from 1979 to 1990 for Marcello. The current prosecution entirely subsumes the span of those conspiracies. I therefore dissent, on that basis only, from the decision to affirm those two convictions.

As she observes,

We must recognize, as have our sister circuits, that a crime family in "a lower level of authority within the hierarchy of organized crime" is still a component of the same crime family. United States v. Langella, 804 F.2d 185, 189 (2d Cir. 1986); see also United States v. Ciancaglini, 858 F.2d 923 (3d Cir. 1988) (concluding that two Philadelphia-based crime families were part of the same enterprise). If the Street Crews were "self-sufficient enterprises that function[] without oversight" from the Outfit, we would have a different case. Langella, 804 F.2d at 189. But as the majority concedes, they are not. The Street Crews were the mob's hands, the Outfit its head. There is no way to divide the two.

Alas. The sweet sorrow of a well-reasoned dissent.

This was not, however, a total loss for the home team. The court of appeals reversed on one happy ground:

The defendants were ordered to pay restitution in conformity with the Mandatory Victims Restitution Act of 1996, 18 U.S.C. § 3663A. The total amount, all of which was for the lost future earnings of 14 of the 18 murder victims whom the defendants were found to have conspired to kill, exceeded $4 million. All but 1 percent of this amount, $44,225.73, was allocated jointly and severally to the four defendants, see United States v. Dokich, 614 F.3d 314, 318 (7th Cir. 2010), other than [one defendant], who was assessed only the 1 percent because he had joined the conspiracy late, in 1999. As all the murders occurred before then, it was improper to assess him any share of the restitution ordered. United States v. Squirrel, 588 F.3d 207, 215-16 (4th Cir. 2009).

Perhaps not the most impressive victory.

See also:

April 26, 2012

The Eleventh Circuit Holds That A District Court Can't Ask Folks Who Have Been Charged With A Crime If They've Talked About A Plea Yet

You've got to feel for federal district judges.

Their caseloads are going up as the Senate refuses to confirm judges to replace those who have left the bench. Justice Scalia doesn't respect them. Their pay hasn't been meaningfully increased in years.

So you could understand why a federal district court judge would want to have fewer trials.

Of course, the easiest way to see a case not go to trial is to see it result in a plea.

But a federal judge isn't allowed to participate in the plea negotiations between the parties (it's in the rules - Federal Rule of Criminal Procedure 11(c)).

What counts as participating in plea negotiations? As it happens, the Eleventh Circuit recently opined on that question in United States v. LaCour.

1213599_pills.jpgMr. LaCour's Internet Drug Emporium

Jude LaCour ran a business called the Jive Network. In an effort to cut down on the spiraling cost of prescription medicines, and how expensive it can be to find a doctor to write a prescription, the Jive Network ran a number of webpages.

Customers of the Jive Network would fill in an online form about their health. They would order drugs that they thought would ameliorate whatever health condition they suffered from.

A doctor would review the web form. The doctor had no ability to change the amount or kind of drug, but the doctor did have to sign off on the prescription. The Jive Network would then issue a prescription in the doctor's name and send out the drugs.

One doctor who worked at the Jive Network filled prescriptions in as little as six seconds.

From 2002 to 2005, the Jive Network had more than $85 million in revenue.

Mr. LaCour's Federal Criminal Case

Mr. LaCour was indicted, along with a few of the doctors who worked for the Jive Network, in a 53 count indictment that accused them of conspiracy to distribute Schedule III and Schedule IV prescriptions without a valid prescription, a few individual counts of distributing drugs without a prescription, and a rack of money laundering charges.

Many folks pled.

The district court judge assigned to the case wanted to make sure that everyone who didn't plead knew that they had the option of trying to negotiate a plea.

During a status conference, the district court asked the government and the lawyers for the people accused of a crime if plea negotiations had happened. The district court specifically talked about whether there's a way to structure a plea so that it would have less affect on the professional licenses of the doctors who were accused.

The district court concluded the conversation by telling everyone that he would be the judge to sentence everyone - apparently some of the cases were assigned to another judge - and that knowing who the judge is would matter a lot to the defendants.

Then, a few weeks later, the district court raised plea possibilities again. As the Eleventh Circuit described it:

The District Court stated, "I want to now address each of the defendants individually and talk about the possibility of other resolutions of this matter other than a trial." The District Court acknowledged that it is "strictly prohibited from attempting to work out any kind of an agreement upon resolution of the case short of a trial." The Court nonetheless went on to note that "[t]his case if there is a conviction requires the Court [to] determine here that defendant fits with respect to the sentencing guidelines." The Court then distributed a chart that, based on the record, may have shown the sentencing guidelines ranges, and it went on to discuss the history of the federal sentencing regime and the applicable law as it stands. In describing the current sentencing regime, the District Court stated that "the Supreme Court has made it pretty clear . . . that we judges have a great deal of discretion in that area."

That last statement is kind of odd. It's sort of like "remember, I'm the guy you want to make sure is happy at the end of the day."

The District Court did state, "Remember, I'm not permitted to engage in plea negotiations, so I'm not suggesting to any defendant that you should consider pleading guilty." The District Court, however, said: "But I am concerned that you understand what the position of the government is if in fact you should want to think about pleading guilty. . . . I'm not interested in the details [of any offer], but I want to be sure that each defendant for whom the government has presented a proposition knows about the proposal." The District Court then asked the government to indicate whether it had presented a proposal to the defendants. The government stated that it did put forward a proposal for each defendant. The District Court then directly asked each individual defendant, including all five appellants, whether they had seen the proposal."

Not more than two weeks later, the trial started.

The court of appeals held that this was over the line. Because "the district court explicitly indicated that it would like the defendants to begin and engage in plea negotiations" it violated the commandment in Rule 11 not to participate in the negotiation.

As most folks know, the Supreme Court recently held that defense counsel can be ineffective in messing up plea negotiations. If the district court had said, instead of what he did here, something like "I just want to make sure everyone's being constitutionally effective - defense counsel, have you talked about plea negotiations" would that violate Rule 11? I suppose we'll have to find out.

Mr. LaCour, as a result, had his sentence reversed and remanded so that he could be resentenced in front of a different judge.

Interestingly, the other folks who the district court encouraged to plead won't be eligible for resentencing because they didn't appeal anything else in connection with their sentences. Deeply unlucky.

April 24, 2012

The Fourth Circuit Sends A Cockfighting Case Back For Retrial Because of Wikipedia


Imagine you were going to a professional meeting. Maybe it's a weeklong off-site skills training for work. Maybe it's an odd kind of a conference in your hometown. You'll be at some strange new location during the day, then go home at night.

1254520_teamwork__1.jpgAt the start of the exercise, people seem interested in you. They ask you a lot about yourself. But then, at some point, you're given a seat and told to just sit, watch, and learn.

Next, the woman who is leading the training reads to you from a list of instructions that she had prepared in advance. You are not allowed to ask questions. Your fellow participants aren't allowed to talk about the instructions.

Some stuff happens - a few people talk to you and they ask questions of other people who answer them. Maybe you read some documents.

After that stuff is done, the person who read to you at the start of the training reads to you again to tell you how to figure out what the people were talking to you about. She gives you a list of instructions, and tells you to go talk to the other participants, but you have to follow the rules she gave you.

Also, she may or may not give you a copy of those rules.

This is, in many ways, the experience of a juror in a federal criminal trial. Jurors are given instructions - which they are presumed to follow closely - only once, and often only orally.

In United States v. Lawson, decided recently by the Fourth Circuit, one of the jurors was eager to understand the elements of the crime he was supposed to figure out if someone was guilty of.

845381_my_fighting_cock_crows.jpgThe government alleged that a number of people, including Scott Lawson, were on trial for violating the animal fighting prohibition of the Animal Welfare Act, 7 U.S.C. § 2156(a). The defendants in this case were accused of cockfighting (or, rather, getting game fowl to fight - the defendants themselves weren't actually fighting. That would have probably not been a federal crime).

The Animal Welfare Act prohibits "sponsoring" a cockfight.

One of the jurors, named Jury 177, after listening to the evidence, was curious. He wasn't sure that he knew what "sponsoring" means.

He did what most folks these days do when they don't know the meaning of a word. He went to Wikipedia and looked up "sponsoring." The jury then found the folks accused of sponsoring cockfights guilty.

Six days after the jury returned the guilty verdict, one of the jurors told a court security officer than Juror 177 had been Googling for justice.

The district court appointed a lawyer for Juror 177, and had a hearing about what happened.

Even though Juror 177 was looking at a criminal contempt charge - and, indeed, was found guilty of contempt and sentenced to a fine and community service - Juror 177 testified that he had searched on the internet to learn what "sponsoring" means and shared what he found with his fellow jurors.

What Juror 177 didn't realize, apparently, is that he was told by the district court judge that he wasn't allowed to consult the internet as a part of his deliberations. The problem this doesn't raise for the Fourth Circuit is that the way we instruct jurors is sort of bizarre as a kind of human interaction, and jurors don't listen to jury instructions. [FN1]

No, instead the Fourth Circuit was troubled by the presence of Wikipedia.

Even though Googling to find the meaning of a word is incredibly common - even Judge Posner does it - the Fourth Circuit held that using Wikipedia was just too unreliable to allow this verdict to stand. [FN2]

As the Fourth Circuit said,

Given the open-access nature of Wikipedia, the danger in relying on a Wikipedia entry is obvious and real. As the "About Wikipedia" material aptly observes, "[a]llowing anyone to edit Wikipedia means that it is more easily vandalized or susceptible to unchecked information." Id. Further, Wikipedia aptly recognizes that it "is written largely by amateurs."Id.


We observe that we are not the first federal court to be troubled by Wikipedia's lack of reliability. See Bing Shun Li v. Holder, 400 F. App'x 854, 857-58 (5th Cir. 2010) (expressing "disapproval of the [immigration judge's] reliance on Wikipedia and [warning] against any improper reliance on it or similarly unreliable internet sources in the future"); Badasa v. Mukasey, 540 F.3d 909, 910-11 (8th Cir. 2008) (criticizing immigration judge's use of Wikipedia and observing that an entry "could be in the middle of a large edit or it could have been recently vandalized"); Crispin v. Christian Audigier, Inc., 717 F. Supp. 2d 965, 977 (C.D. Cal. 2010) (criticizing parties' reliance on Wikipedia); Kole v. Astrue, No. CV 08- 0411, 2010 WL 1338092, at *7 n.3 (D. Idaho Mar. 31, 2010) (admonishing counsel from using Wikipedia as an authority, observing that "Wikipedia is not a reliable source at this level of discourse"); Baldanzi v. WFC Holdings Corp., No. 07-CV-9551, 2010 WL 125999, at *3 n.1 (S.D.N.Y. Jan. 13, 2010) (observing that Wikipedia "touts its own unreliability"); Campbell ex rel. Campbell v. Secretary of Health and Human Servs., 69 Fed. Cl. 775, 781 (Fed. Cl. 2006) (observing dangers inherent in relying on Wikipedia entry).

The case was remanded for a new trial.

So, to summarize: John McCain can use Wikipedia for his speeches. Judge Posner can use Google for his opinions. Jurors cannot use Wikipedia instead of following the jury instructions.

[FN1] - Juror 177 was found in contempt because the court's directions went specifically to him; they weren't of general applicability like in this case. Though this raises a question - how can failing to follow a jury instruction subject someone to contempt? Can a jury be held in contempt en mass when they nullify? Should the trial jury be held in contempt every time the court of appeals reverses for insufficient evidence when the jury convicted? Juror 177 was, presumably, trying in good faith to resolve a Doesn't this seem a little crazy?

[FN2] - To be fair, there is a multi-part test that the court of appeals applied - the unreliability of Wikipedia only went to one part. Though the rest of it is pretty dry.

April 20, 2012

A District Court Cannot Take Away Alcohol And Technology For The Rest Of A Person's Life Without Explaining Why


It's easy to hate people who are found guilty of child pornography charges. People don't like it when other people sexualize children

But, as the Sixth Circuit held in United States v. Inman, a district court still has to give reasons to be mean to them.

Mr. Inman pled guilty to possession of child pornography. He was sentenced to 57 months in prison.

Like anyone else who goes to federal prison, after he is released, he'll be on supervised release - a federal probation officer will supervise him to make sure he's not drifting into further lawlessness.

As a part of his supervised release, he'll have to follow certain conditions. Those conditions, as well as how long he'll be on supervised release, are set by a judge at his sentencing hearing.

In Mr. Inman's case, the government and Mr. Inman's lawyer recommended that he be on supervised release for ten years.

Instead of ten years, the district court, apparently motivated by how gross Mr. Inman's conduct is, sentenced him to a lifetime of supervised release. It didn't explain why.

1231362_sign_no_alcohol.jpgAnd, the district court set a number of conditions that no one asked for, or talked about at Mr. Inman's sentencing hearing - he had to submit to mandatory drug testing; to notify the probation office if he is prescribed any medicine; to provide the probation office with all of his financial information; and he can never drink alcohol again, possess or use a device capable of creating pictures or video, or rent a storage facility or post office box.

What's worse, the district court didn't explain why it was imposing these conditions - it just imposed them.

As the Sixth Circuit explained, these conditions are going to seriously mess him up.

The district court . . . precluded him from using any device capable of creating pictures or video. This special condition effectively prohibits Inman for his lifetime from possessing a cell phone with photo or video capability, a video camera, or any other device capable of creating pictures or videos, even if such devices might be used appropriately in connection with employment or family activities.

So much for getting the new iPhone.

Mr. Inman can never drink alcohol again, according to the district court, even though he doesn't have a problem with alcohol. The Sixth Circuit was troubled by this condition too.

Nothing in the record suggests that Inman has any problem with alcohol or drug dependence; yet, he is now barred from consuming alcohol for life, required to submit to periodic drug testing, and required to keep the probation office informed of any prescription medications in his possession. Supervised release conditions must be tailored to the specific case before the court. Where appropriate, the mandatory condition of drug testing "may be ameliorated or suspended by the court for any individual defendant if the defendant's presentence report or other reliable sentencing information indicates a low risk of future substance abuse by the defendant." 18 U.S.C. § 3563(a)(5). Moreover, the pertinent statute on discretionary conditions does not permit a total ban on alcohol, but allows a court to order the defendant to "refrain from excessive use of alcohol." 18 U.S.C. § 3563(b)(7) (emphasis added). Because Inman appears to present a low risk of future substance abuse, the district court should explain why these conditions of supervised release are warranted.

Finally, the Sixth Circuit thought the requirement that Mr. Inman allow his finances to be inspected by a probation officer was not supported by the record.

Inman also challenges the special condition requiring him to provide the probation office with any requested personal financial information. Inman's crime was not financial in nature. We realize that Inman's finances may give a probation officer insight into whether Inman is involved in illegal conduct, but we cannot approve a requirement that Inman disclose any and all financial information to the probation officer without first reviewing the district court's explanation as to why such a condition is necessary in light of the pertinent sentencing factors.

Based on all of that, the case went back to the district court for resentencing. If a district court is going to take away someone's ability to have an iPhone for life, that court has to do a little bit more explaining.

See also:
Sex Offenders, Supervised Release, and The Eighth Circuit

April 18, 2012

The Ninth Circuit On Expired Credit Cards

Like many Americans, Leslie Onyesoh had a credit card problem. His problem, however, wasn't maxing out her cards or making the minimum payment.

His problem was that when postal inspectors raided his home, they found a spreadsheet containing 500 expired credit card numbers.

One can assume that they were someone else's expired credit card numbers.

Mr. Onyesoh pled guilty to the knowing possession of more than 15 unauthorized access devices, in violation of 18 U.S.C. 1029(a)(3).

1176251_cut_expenses_1.jpgAn unauthorized access device is "any access device that is lost, stolen, expired, revoked, canceled, or obtained with intent to defraud."

The statute further defines "access device" - it includes credit cards - to require that the device must be capable of obtaining "money, goods, services, or any other thing of value." See section 1029(e)(1).

Under the federal sentencing guidelines, if a person is guilty of an economic crime like fraud, or possession of someone else's credit card information, their sentence becomes more severe as the amount of money at stake increases.

How much money is at stake, though, when you're talking about an expired credit card?

At sentencing, the government urged the court to sentence Mr. Onyesoh using a sentencing guidelines calculation that included a loss amount for each credit card on the spreadsheet at $500.

Under a note to the relevant part of the sentencing guidelines, the presumed minimum loss for someone else's credit card is $500 (though presumably it could be higher). It's note 3(F)(i) to guideline 2B1.1.

The question is, do expired credit cards count?

The district court, following the government, said that they do.

The Ninth Circuit, in United States v. Onyesoh, said not so fast.

The court of appeals focused on the requirement in section 1029 that for something to be an access device, it has to be capable of obtaining "money, goods, services, or any other thing of value."

Based on that, the court of appeals held that an expired credit card has to be useable for it to count as an access device. A working credit card, the court said, is clearly useable, and the government doesn't have to put on much evidence to show that a working credit card is an access device. (Though how would the government show it's working? Do they have to run a test charge?)

As the Ninth Circuit explained it,

Here, Defendant's credit card numbers had been expired for some three years, yet the Government argued these numbers required no further proof of usability because the evidence was "overwhelming" Defendant used, or could have used, these numbers. We have care- fully reviewed the record in this case and found no evidence of usability, let alone "overwhelming" evidence. There was no crossover between Defendant's victims and the list of expired numbers, and there was no showing Defendant ever took steps or attempted to use the expired numbers, or that Defendant possessed them before their expiration.

So, with "no evidence" that these credit cards were usable, the Ninth Circuit remanded for resentencing.

Though, if there's no evidence that these expired credit cards were "unauthorized access devices", what did Mr. Onyesoh plead guilty to?

Finally, gentle reader, you may wonder whether Mr. Onyesoh is a man or a woman - Leslie, as you know, can go both ways. According to the BOP, Leslie Onyesoh is a guy. That's the kind of rigorous fact-checking you can rely on here at the Federal Criminal Appeals Blog.

See also:
The Tenth Circuit On Credit Cards, Loss, and the Sentencing Guidelines

April 17, 2012

The D.C. Circuit Holds That Safety Valve Is Still Available Even If A Person Comes To The Truth Late

Jesus Rodriguez took a long time coming to the truth. But in his appeal in United States v. Rodriguez, the D.C. Circuit held that, sometimes, coming to the truth late is coming soon enough.

Mr. Rodriguez was indicted for cocaine distribution. He faced a five-year mandatory minimum.

There Are Two Ways To Get Under A Mandatory Minimum Sentence

There are two ways under a mandatory minimum. One is to cooperate with the government and receive a government motion for a sentence under the minimum under 18 U.S.C. § 3553(e). To do that, means to cooperate with the government in its efforts to put others in prison.

1327707_old_water_valve.jpgThe other option is to meet the requirements for the "safety valve" under section 3553(f). The biggest one - the one that is most often the problem - is the requirement that a person truthfully talk about their role in the offense and disclose to the government everything they know about their own conduct.

As the statute says on this requirement,

not later than the time of the sentencing hearing, the defendant has truthfully provided to the Government all information and evidence the defendant has concerning the offense or offenses that were part of the same course of conduct or of a common scheme or plan, but the fact that the defendant has no relevant or useful other information to provide or that the Government is already aware of the information shall not preclude a determination by the court that the defendant has complied with this requirement.

If a person qualifies for safety valve in a drug case, the person also receives a two-level reduction in her offense level under the sentencing guidelines.

Mr. Rodriguez Walks Half Way To The Truth

Mr. Rodriguez wanted to take advantage of the safety valve statute. He pled guilty and met with agents for the government and talked about his role in the offense. He talked about his drug dealing.

He told them that the guy who drove him to a drug deal was his boss, who was just giving him a ride.

The government didn't believe him about that.

The Safety Valve Hearing

The case went to a hearing on whether Mr. Rodriguez had been honest in his statements to the government. Mr. Rodriguez testified at the hearing that the man who drove him to the drug deal didn't know it was a drug deal.

Two police officers testified that the man who drove Mr. Rodriguez to the drug deal paced behind the car while the deal was happening, and brought $4,000 in cash and a gun to the deal. They also said that the guy Mr. Rodriguez was selling drugs to was told, by Mr. Rodriguez, that his supplier would drive him to the deal.

The district court concluded that Mr. Rodriguez was lying. It continued the sentencing hearing to figure out what to do with that.

Bad Things Happen When You Lie In Federal Court

The government asked for a number of increases in Mr. Rodriguez's offense level because of his false testimony. He was given a two-level increase for obstructing justice. He lost his acceptance of responsibility credit - the reduction in his guidelines based on pleading guilty.

These changes moved his guidelines from 46-57 months to 78-97 months.

Mr. Rodriguez then decided to change his approach. He met with the government again. This time, he told them what everyone agreed was the truth.

He apologized for his prior statement, and said he was sorry he lied.

The Sentencing Hearing

At sentencing, Mr. Rodriguez apologized to the district court for lying.

The district judge sentenced him to 72 months - his guidelines were increased because of his obstruction, and he lost acceptance of responsibility.

What About Safety Valve?

On appeal, Mr. Rodriguez had new counsel. His new lawyers argued that his trial counsel should have asked for a safety valve reduction under the sentencing guidelines, and that he was constitutionally ineffective for not doing so.[FN1]

The D.C. Circuit agreed.

The court of appeals noted that the government conceded at sentencing that Mr. Rodriguez had, eventually, belatedly, been fully truthful with them by the time the sentencing hearing happened.

The court of appeals held that

The fact that Rodriguez waited until the last minute to provide the information or that he was tardy in doing so does not preclude him from obtaining safety-valve relief. The provision does not distinguish between defendants who provide the authorities only with truthful information and those who provide false information before finally telling the truth. (internal quotations omitted)

Moreover,

Familiarity with the Guidelines is a necessity for counsel who seek to give effective representation. When a lawyer fails to raise an applicable provision of the Guidelines, he fails to provide effective assistance. (internal quotations omitted)

Because Mr. Rodriguez was entitled to a two-level reduction for safety valve the case was remanded for resentencing.

[FN1] - Readers from outside of the D.C. area may be surprised to learn that the D.C. Circuit allows a person to raise an ineffective assistance claim on direct appeal if the record establishes the ineffective assistance sufficiently.

See also: