October 17, 2011

The Supreme Court Is Thinking About Stolen Valor

The Supreme Court has agreed to review the constitutionality of the Stolen Valor Act. The Stolen Valor Act makes lying about having military honors a federal crime. It's at 18 U.S.C. § 704.

There's a good discussion of the Act over at SCOTUSBlog.

The Wall Street Journal Law Blog nicely frames the issue - "What's More Common Than Valor?"

And, of course, there's prior coverage of the Act on this blog, including Chief Judge Kozinski's most awesome paragraph in any reported opinion.

October 16, 2011

Things Look Different Around Here

Thanks for stopping by. As you may have noticed, things here look different.

Clouds on a field.jpgAside from the obvious changes in how the site looks, please note, that you can now subscribe to this blog by email. Check out the box on the sidebar if you'd like blog posts spoon fed to your email, rather than having to go to the trouble of surfing over to this page. Or you can click this link.

The search functionality is also greatly improved, which I'm excited about.

If you've been reading this blog by RSS feed, you may want to update your feed.

I hope you enjoy the new format. New substantive posts are coming soon. If you have any comments, feel free to email me.


October 12, 2011

An En Banc Fourth Circuit Remands On An Armed Career Criminal Act Case

The Fourth Circuit doesn't issue many published opinions. When it does publish, though, it publishes a lot.

The Fourth Circuit yesterday issued an en banc opinion in United States v. Vann. Here's the description of who wrote what:

A per curiam opinion, in which Chief Judge Traxler and Judges Motz, King, Gregory, Agee, Davis, Keenan, Wynn, and Diaz joined, was issued on behalf of the en banc majority. Judge King wrote a concurring opinion, in which Judges Motz, Gregory, and Davis joined. Judge Agee wrote an opinion concurring in the judgment, concurring in the en banc majority opinion, and concurring in the opinion of Judge Keenan. Judge Davis wrote a concurring opinion. Judge Keenan wrote a concurring opinion, in which Chief Judge Traxler and Judges Agee, Wynn, and Diaz joined. Judge Wilkinson wrote an opinion concurring in the judgment. Judge Niemeyer wrote an opinion concurring in part and dissenting in part, in which Judge Shedd joined.

That's seven separate opinions, for a court that only has fourteen active members (and Judge Allyson Duncan didn't participate in the appeal). The opinions total 100 pages in length.

The question in Mr. Vann's case is a commonly occurring one. If a person is convicted of having a firearm after being convicted of a felony, the person faces a statutory maximum penalty of 10 years. See 18 U.S.C. § 922(g). If however, the person has three separate prior convictions for drug distribution offenses or crimes of violence, then the statutory maximum becomes life in prison, and there is a mandatory minimum of 15 years that applies.

The enhancement is called the Armed Career Criminal Act, and I've written about it here and here and here.

Mr. Vann's case presents a frustrating and common problem with the Armed Career Criminal Act. State laws aren't defined as crimes of violence for federal purposes. The states kind of make their own criminal laws, and tend not to modify them to make later federal sentencings easier. Moreover, when folks are resolving a state case, they tend to resolve it for that case only, so everyone can go on about their business and on to the next case. So, sometimes, the records aren't sparkling clear as to how things were resolved.

Mr. Vann was convicted of being a felon in possession of a firearm. He had three prior convictions under North Carolina's Indecent Liberties Statute. The statute has two prohibitions:

(a) A person is guilty of taking indecent liberties with children if, being 16 years of age or more and at least five years older than the child in question, he either:

(1) Willfully takes or attempts to take any immoral, improper, or indecent liberties with any child of either sex under the age of 16 years for the purpose of arousing or gratifying sexual desire ["subsection (a)(1)"]; or

(2) Willfully commits or attempts to commit any lewd or lascivious act upon or with the body or any part or member of the body of any child of either sex under the age of 16 years ["subsection (a)(2)"].

If Mr. Vann violated section (a)(1), it isn't a crime of violence (necessarily); if he violated (a)(2), it is.

The trouble is that Mr. Vann entered a guilty plea in the state case to an indictment that accused him of both (a)(1) and (a)(2). So, is that a plea to the lesser of the two, or the more serious of the two? Or both?

Judge Niemeyer, in dissent, said that when a person pleads to an indictment that alleges Y and Z, the person pleads to both charges. This is familiar enough to anyone who has taken an intro to logic class in college.

But, natural language is funny, and not always a friend to the logician. To walk down a path not directly related to Mr. Vann, as the University of California, Irvine's logic wiki points out,

It's also worth noting that some English sentences carry some meaning that is not captured in Propositional Logic. For example, the sentence 'Jane Austen died and was buried in Winchester Cathedral in 1817' can be translated as P [and] Q (where P stands for 'Jane Austen died' and Q stands for 'Jane Austen was buried in Winchester Cathedral in 1817'). Now, since P [and] Q and Q [and] P are logically equivalent, they mean the same thing. However, the English sentence 'Jane Austen was buried in Winchester Cathedral in 1817 and died' implies that she was buried alive!

Whew! That's a good one.

Back to Mr. Vann. The question before the court of appeals was this - When a person pleads guilty to an indictment, are they pleading guilty to all parts of it, or can they be pleading guilty to the bare minimum that satisfies an offense charged in the indictment?

The en banc opinion of the court of appeals determined that they are pleading guilty to the bare minimum.

As the appeals court held,

That Vann's predicate charging documents properly use the conjunctive term 'and,' rather than the disjunctive 'or,' does not mean that Vann 'necessarily' pleaded guilty to subsection (a)(2). Similarly, in trials by jury, it has been established that a defendant convicted under a conjunctively charged indictment cannot be sentenced -- in the absence of a special verdict identifying the factual bases for conviction -- to a term of imprisonment exceeding the statutory maximum for the 'least-punished' of the disjunctive statutory conduct.

Because a finding of guilt that is ambiguous between two is read to mean that the person is guilty of the least significant offense for jury purposes, it is read the same way for a plea.

October 6, 2011

The Eighth Circuit Holds That Health Care Kickbacks Are Different Than Fraud

Medical supplies are big business. Sadly, where there's big business, there's big money, and, often, there's big law enforcement attention.

Geff Yielding worked as an assistant for a surgeon, Dr. Jordan, in Little Rock Arkansas. His wife, Kelley, started a company called ANI, that was in the medical services business. She became a sales agent for two bone-related medical supply companies. As such, she was paid on commission based on the number of sales she generated to surgeons.

Dr. Jordan used a nurse named Jordan Wall to order his supplies. Mr. Wall was an employee of the hospital where Dr. Jordan practiced.

Between February 2003 and October 2004, Kelley Yielding earned $384,000 in commissions. Her company, over the same period, wrote twenty-two checks to Jordan Wall.

One suspects that those checks may have been, uh, fishy.

A side note about health care kickbacks - in the world of medicine, paying someone for using your medical service or supplies is illegal. It's a violation of the Stark Act. In many businesses, paying for referrals is legal, indeed, de rigueur. In medicine when you're dealing with Medicare or Medicaid, a kickback is a crime. It's codified at 42 U.S.C. § 1320a-7b.

In 2004, Jordan Wall was fired by the hospital because there appeared to be improprieties in the way he ordered the products sold by Kelley Yielding - the hospital thought they didn't need one of the products, yet Mr. Wall ordered it anyway.

Also, creepily enough, more than one hundred pieces of bone were missing from the hospital's bone inventory. It isn't clear how this is related, but the Eighth Circuit's opinion notes it.*

Three days after Mr. Wall was fired, Dr. Jordan forwarded an email he received from the hospital about how the hospital was still investigating suspicious and unnecessary purchases of the products that Kelley Yielding sold.

The hospital was also still investigating the missing bone.

Three days later, Jordan Wall paid ANI, Kelley Yielding's company, $34,000, the exact amount he was paid in 2004. The repayment was labeled "repayment on loan."

The FBI investigated, searched the Yielding's house, and found a document purporting to be a note. The note said it was for a no interest loan to Jordan Wall from ANI, Kelley Yielding's company.

While the investigation was happening, Kelley Yielding died.**

Jordan Wall pled and flipped. He said that Geff Yielding arranged kickbacks for the products his wife sold and created a fake note to cover their tracks after the investigation started.

Mr. Geff Yielding was indicted and convicted for the kickback scheme and creating a false document to obstruct justice. He was sentenced to 78 months in prison, or six and a half years.

It isn't clear if anyone was ever prosecuted for the missing bone.

The Eighth Circuit, in United States v. Yielding, reversed for resentencing because the sentencing court miscalculated the United States Sentencing Guidelines.

Mr. Yielding was convicted of participation in a kickback scheme. So the court should have used sentencing guideline § 2B4.1. Like many white-collar crime guidelines, § 2B4.1 looks to the amount of money at stake to determine how serious the crime is.

Unlike many white-collar crime guidelines, § 2B4.1 does not look at the loss caused by the crime, rather, it looks to the size of the bribe (or kickback) or the profit made from the bribe (or kickback).

The sentencing court looked at the loss to the purchasers who bought the unneeded bone products, rather than the value of the commissions that the Yieldings received, or the amount of the kickback that they offered.

So, the guidelines were miscalculated - bribery has very different rules than fraud.

As a result, Mr. Yielding's case was remanded for resentencing, presumably with a much lower guidelines range at the end.

For additional news coverage, check out the Times Record from Arkansas.

* Did you know hospitals keep bone stockpiled? Me neither.

** It's not explained how she died in the opinion, though I'd like to know if it was related to it. Or caused by stress from it?

October 4, 2011

The Miranda Analysis Is Different For the Military, Says the First Circuit

Brian Rogers learned the hard way that, sometimes, selling a computer has a downside. As many computer experts recommend, if you're selling a computer you need to wipe the hard drive so that your financial information can't be found by someone else.

Mr. Rogers, however, should not have been worried about the buyer of his computer finding his financial information. Rather, he should have worried about the purchaser finding his child pornography.

Mr. Rogers was a non-commissioned Naval Officer at the Brunswick Naval Air Station in Maine. The police worked with the Naval Criminal Investigative Service (NCIS, for those who don't watch TV). Law enforcement obtained a search warrant.

NCIS and the police worked out that they would search Mr. Rogers condo when he wasn't there. They went in and searched the house while his pregnant wife and small child were home, but Mr. Rogers wasn't.

Instead, as the search was going on, NCIS asked Mr. Rogers' commanding officer to order him to go to the parking lot outside his home. They told him nothing else, except that his wife was ok.

Mr. Rogers went home. Armed police officers were in his house. NCIS wasn't there, but other police were. An officer asked him if he wanted to talk, after explaining the nature of their search. The office explained that Mr. Rogers wasn't under arrest, but that if Mr. Rogers was going to talk, "today's the day."

While they were talking, an NCIS officer arrived.

During that conversation, Mr. Rogers said that he downloaded the illegal images.

The Miranda Challenge

Mr. Rogers challenged that statement, saying that he was not free to resist the questioning, and the statement was un-Mirandized, so that it ought to be suppressed.

The district court denied the motion. Mr. Rogers entered a conditional plea, allowing him to appeal the district court's Miranda decision. The district court sentenced him to five years in the meantime.

The First Circuit's Decision

The First Circuit, in United States v. Rogers - an opinion written by retired Associate Supreme Court Justice Souter - held that Mr. Rogers' statement should have been suppressed.

First, Justice Souter explained that the issue of whether a person is in custody is not really a question of whether the person is free to leave, but more whether he or she is free to stop talking - "the crux of the first element [of a Miranda violation] must be liberty to terminate the verbal engagement with the police, not the liberty to leave."

When it comes to the freedom to stop talking, Justice Souter determined that the military is just different. As the court of appeals explained,

"[T]he most significant element in analyzing the situation is that the military had made certain that Rogers did not walk into it voluntarily, or confront the police with free choice to be where he was."

Because Mr. Rogers was ordered, literally, by his commanding officer, to be present for questioning, Justice Souter concluded for the First Circuit that he would not have felt free to terminate the questioning.

Because Mr. Rogers would not have felt free stop answering questions, his Miranda rights were violated.

The case was then remanded to see if a later curative instruction might have taken care of the Miranda violation.

October 3, 2011

Judge Posner Teaches District Court Judges How To Avoid The Supreme Court's Holding in Tapia

In Tapia v. United States, the Supreme Court held that a federal judge, when imposing sentence, cannot give time in prison in order to rehabilitate the person who is being sentenced.

Tapia turned on this statutory language from 18 U.S.C. § 3582(a):

The court, in determining whether to impose a term of imprisonment, and, if a term of imprisonment is to be imposed, in determining the length of the term, shall consider the factors set forth in section 3553(a) to the extent that they are applicable, recognizing that imprisonment is not an appropriate means of promoting correction and rehabilitation

(emphasis added).

The Tapia rule seems straightforward enough. But wait, where there's a lawyer, there's a complication.

The Clear Case

For a clear application, consider the Tenth Circuit's opinion in United States v. Cordery. There, the court of appeals reversed and remanded a sentence for bank robbery because the sentencing court imposed the sentence that was the bare minimum to allow the defendant to participate in a 500-hour drug and alcohol program (or "RDAP").

Fair enough, when the judge imposes a sentence just to let someone meet a rehabilitation program's requirements, that looks like a clear Tapia problem.

The Complication

Of course, things are never just simple.

Consider the Seventh Circuit's opinion in United States v. Kubeczko, written by everyone's favorite jurist, Judge Richard Posner.

Mr. Kubeczko had troubles. He had recently lost his mother. Perhaps distraught, he neglected to tell the federal government that she had passed. Instead, he cashed $158,000 in civil service retirement checks sent to her during the 12 years after her death.

He was charged with mail fraud.

While Mr. Kubeczko was awaiting trial, he was put in a halfway house run by the Salvation Army. That went poorly - he got in fights and was disruptive. He was eventually detained pending trial, because of his conduct.

The sentencing judge imposed a sentence of 30 months, because, with 12 months of time-served credit, she thought that Mr. Kubeczko needed at least an additional 18 months to combat the mental illness and alcoholism that contributed to his behavior at the halfway house.

The sentencing judge said that Mr. Kubeczko

has had mental health and perhaps substance abuse issues for which he needs treatment. My concern about the guideline sentence here in this case of 21 to 27 months is that even a high-end guideline sentence may not be long enough for the Bureau of Prisons to designate [the defendant] to a location where he can get mental health treatment . . . . [A] stay in the Bureau of Prisons of a significant length is necessary in order for him to get the Bureau of Prisons' inpatient treatment program. I believe that he has to be in one place longer than 18 months for that purpose . . . . I want to impose a sentence of 30 months in the custody of the Bureau of Prisons, slightly above the guideline range, because I do want to give the Bureau of Prisons every opportunity to place [him] in a facility where he can begin getting the treatment.

As Judge Posner acknowledged, "[g]iven Tapia, this language entitles the defendant to be resentenced."

Judge Posner Shows District Courts How To Ignore Tapia

Then the man who suggested that, perhaps, the Supreme Court isn't that bright,* smudged the lines of Tapia for everyone.

Because Mr. Kubeczko was kicked out because he was disruptive, maybe the sentencing judge wasn't imposing more time so he could get better, but, because he'd get better by having more time in a rehabilitative program, he'd then be less dangerous to the rest of us. So her motivation wasn't to rehabilitate, it was to protect the public (through rehabilitation).

As the learned judge mused,

Compare two hypothetical sentencing statements. In one the judge says, "I'm not worried that you'll commit more crimes if I gave you a shorter sentence; I am giving you a long sentence to enable you to obtain psychiatric assistance that will bring about your complete rehabilitation." In the other sentencing statement the judge says, "I am going to sentence you to a sentence long enough to enable you to obtain psychiatric assistance, because until then you will continue to be a danger to the public because you can't control your violent impulses." The first ground for a longer sentence violates the statute, but the second does not, because incapacitation (physically preventing the defendant from committing crimes on "the outside," by imprisoning him) is an authorized factor for a judge to consider in determining the length of a prison sentence.

This is good, because it highlights the problem that Congress was trying to address when it adopted the language at issue in Tapia that prohibits imposing a prison sentence just to accomplish rehabilitation. Congress, as Judge Posner illuminates, didn't want a sentencing judge to say anything to a person on the occasion of his sentencing that suggests the government might be doing any of this for the person's own good.

"We're sending you to prison, never for you, but always for us." is the message that Congress wanted conveyed.


* See Chris Shea's Ideas Blog at the Wall Street Journal, quoting Judge Posner - "One shouldn't exaggerate the quality of judges and justices. Law isn't the calling of geniuses. The Supreme Court today is composed of competent lawyers, and one should probably leave it at that"

September 30, 2011

The Ninth Circuit Holds That Once The Government Is Done Investigating You, You Get To See The Warrant That Let Them Into Your House

If you have had a search warrant executed at your house, you're likely to want to know why. If you committed a crime, perhaps it's obvious why. If not, you'd likely want to see why the government thought you were up to something suspicious.

Christopher Kortlander was in exactly that situation. In 2005 and 2008 the federal government got a warrant and searched his house. He was under investigation, as the Ninth Circuit put it, for unlawfully attempting to sell migratory bird parts and for fraudulently misrepresenting the provenance of historical artifacts for sale."

Ultimately, the government declined to go forward with charges.

Mr. Kortlander wanted to see the search warrant. Federal Rule of Criminal Procedure 41(i) requires that search warrants, and related documents, be kept in the clerk's office of the district court that they are issued from.

So, Mr. Kortlander asked that district court for copies of those documents.

The United States government opposed that request. It argued that the documents contained information that was collected by the grand jury and, therefore, was secret.

Mr. Kortlander pointed out that he had already seen the information, with his lawyer, during the investigation.

The government then removed it's objection and said, instead, that it was ok for Mr. Kortlander to see the documents, but only if Mr. Kortlander agrees to "limit dissemination of the material to Kortlander's personal review and/or for inclusion in any future court filings." In support of this restriction, the government said that "concerns have been raised that information collected by Kortlander may be posted on web sites."

You have to admire the use of the passive voice.

The district court, exercising its independent control over the documents that were in its clerk's office, adopted the government's suggestion without making any findings to support a restriction of Mr. Kortlander's ability to distribute the documents.

Mr. Kortlander appealed, and the Ninth Circuit reversed in United States v. Kortlander.

The court of appeals explained that there are two rights of access to court documents - a right under the common law and a First Amendment right. The appellate court held that the common law right required disclosure without restriction. It did not reach the First Amendment argument.

The Ninth Circuit started by observing that

Whether the common law right of access applies to warrant materials after an investigation has ended is a question of first impression in this circuit. We have held that the common law right of access does not apply to warrant materials "during the pre-indictment stage of an ongoing criminal investigation." Id. at 1221. But we expressly reserved whether the common law right of access applies to warrant materials after "an investigation has been terminated." Id. We answer that question today, and hold that, as the government concedes, the common law right of access applies under these circumstances. In doing so, we join a number of courts that have reached the same conclusion. See, e.g., In re EyeCare Physicians of Am., 100 F.3d 514, 517 (7th Cir. 1996); In re Newsday, Inc., 895 F.2d 74, 79 (2d Cir. 1990); Baltimore Sun Co. v. Goetz, 886 F.2d 60, 62 (4th Cir. 1989); United States v. Wells Fargo Bank Account Number 7986104185, 643 F. Supp. 2d 577, 583-84 (S.D.N.Y. 2009); In re N.Y. Times Co., 585 F. Supp. 2d 83, 92 (D.D.C. 2008); Commonwealth v.Fenstermaker, 530 A.2d 414, 417-19 (Pa. 1987); see also In re Search Warrant for Secretarial Area Outside Office of Gunn, 855 F.2d 569, 575-76 (8th Cir. 1988) (Bowman, J., concurring).

As the Ninth Circuit explained, quoting, at length, from the Fourth Circuit,* when the government is still investigating, there is an interest in not disclosing warrant documents.

Once the investigation is over, that interest is gone, and the public's interest in knowing how it's government requires that the warrant documents be released to the public.

As the Ninth Circuit said, quoting the Eighth Circuit,

public access to documents filed in support of search warrants is important to the public's understanding of the function and operation of the judicial process and the criminal justice system and may operate as a curb on prosecutorial or judicial misconduct.

The court of appeals also ordered the government to pay Mr. Kortlander's costs in the appeal.

* !

September 29, 2011

Bribery in New Jersey. No, really.

Sometimes, the cooperating witness in a case seems a little shadier than the guy who got caught.

Herman Friedman owned an apartment building in West New York, New Jersey. He rented out 16 apartments. One day, a building inspector visited Mr. Friedman's property. He noticed that the building had only 15 legal units - not 16. The inspector issued a Notice of Violation.

To try to sort this out, Mr. Friedman went to meet with a Construction Code Official, Franco Zanardelli. Perhaps like many New Jersey zoning officials, Mr. Zanardelli was working for the FBI. He was trying to get a sentence reduction under 5K1.1 after he was caught taking bribes in a prior investigation.

Mr. Friedman told Mr. Zanardelli that the apartment had 16 legal units when he bought it and that he shouldn't be penalized. Mr. Friedman asked Zanardelli to issue a variance for his 16th unit.

Zanardelli took no official action in response. One can imagine that he shrugged.

Without a resolution from Zanardelli, Mr. Friedman went to Municipal Court. The court told him to try to work things out with Zanardelli because the penalty for having an illegal apartment is $500 a day.

Mr. Friedman called Zanardelli, desperate for help. Zanardelli asked him "What, what do you want to do? You just want to legalize the unit?"

Mr. Friedman indicated that this was exactly what he wanted to do.

They met at the building. Mr. Friedman pointed out that the 16th unit had obviously been there a while. Zanardelli said it wasn't in the tax records. He asked again what Mr. Friedman wanted to do.

Mr. Zanardelli told Mr. Friedman he could go for a variance. That wouldn't solve the $500 a day problem. They had this exchange,


Zanardelli:  [y]ou're gonna have to go for a variance. That's it. I mean, I mean what are you gonna do.

Friedman: "Well, you know what you could do, what you can do?

Zanardelli:  "So what are you suggesting here?

Friedman:  "You tell me . . . Whatever it is."

Zanardelli: "I can't tell you, you tell me."

If you couldn't guess, "whatever it is" was a bribe.

Using hand gestures, the two worked out a bribe of $5,000. Mr. Zanardelli lifted the complaint.

Months passed. Mr. Friedman didn't come through with the money. He avoided Mr. Zanardelli's calls. Mr. Zanardelli pressured him at the direction of the FBI, reissuing the complaint.

Mr. Friedman put the building up for sale. He found a buyer who would buy it only if the building had 16 units. Mr. Friedman, finally, paid $5,000 to Zanardelli. He didn't lift the complaint. The sale fell through.

Close to a year later, Mr. Friedman was indicted.

The Trial

At trial, Mr. Friedman tried to introduce evidence that the records in Mr. Zanardelli's office actually showed that the building had 16 legal apartments. According to a witness from the local zoning office, the best, most recent documents, showed that Mr. Friedman was allowed to have 16 units there.

The trial judge didn't let the evidence in, because it was "a whimsical argument that this is somehow related to entrapment."

Mr. Friedman was convicted.

The Sentencing

At sentencing, the government and Mr. Friedman disagreed about the loss amount from the bribery guidelines.

The bribery guidelines are particularly hard on people convicted of a crime. The loss amount that U.S.S.G. § 2C1.1 aren't based on the amount of the bribe, but, rather, based on "the benefit received or to be received in return for the payment."

So, the loss number shouldn't be $5,000 - the amount of the bribe - but, rather, the amount of money that the city of West New York lost out on.

The government figured that to be a very high number indeed, based on the accumulation of daily penalties. Mr. Friedman disagreed, and said that number was too inchoate.

The sentencing judge split the baby. He declined to find a loss number, or resolve what the right guidelines are. Instead, the sentencing judge said that thought a sentence of 34 months was about right.

A sentence of 34 months was imposed on Mr. Friedman.

The Appeal

The Third Circuit heard a number of challenges to Mr. Friedman's conviction. In United States v. Friedman, it rejected them all.

The court of appeals did, however, vacate his sentence and remand for resentencing. After the guidelines were made nonbinding in Booker, the Supreme Court, and then the courts of appeals, set out a procedure for sentencing in a federal case.

First, the district court has to calculate the guidelines. A district court cannot sentence a person in federal court without first determining the appropriate guidelines.

Since that didn't happen here - the sentencing judge cut to the chase of what it thought a fair sentence is - the court of appeals remanded to do it again.


September 28, 2011

Immigration Fraud and the Sentencing Guidelines Numbers Game

The federal sentencing guidelines love numbers.

Numbers, according to the guidelines, are how you know how bad something is. If the amount of loss from a fraud is higher, the fraud is worse. If there are more drugs, the drug distribution is worse. If there are more victims, or guns, or illicit images, or years of illegal peonage, the crime is always, under the guidelines, worse.

The guidelines like numbers for the same reason that lawyers like rankings - they force a crisp objectivity. Columbia is ranked higher than the University of Chicago - if you're choosing between the two, the decision just got easier.

People crave definite information in difficult decisions, whether they're law students deciding where to go to school or federal judges deciding how to punish a crime.

This focus on numbers may not capture all that we want about how bad a crime is. Maybe a woman who steals $7,000 to pay for insulin for her aging father is less bad than the man who steals $5,000 to buy mint condition Paul Anka LPs.

Maybe she's less bad in more than one way.

As troubling as whether numbers get it right, is how hard it is to get the numbers themselves right.

The Second Circuit,* in United States v. Archer, clarified how these numbers of bad things should be counted when the numbers translate into additional time in prison.

Mr. Archer's Troubles

Mr. Archer was an immigration attorney. He helped people fill out I-687 legalization applications. As it happened, several of the legalization applications he completed for people contained numerous material falsehoods.

The details of how I-687 legalization applications work is complex. I'm going to ignore them. If you're really into these, please read the opinion.

The bottom line is that Mr. Archer completed 171 I-687 applications. At sentencing, there was evidence that four of them contained false statements. If more than 100 contain material false statements, Mr. Archer's guidelines level increases. It's in U.S.S.G. § 2L2.1(b)(2)(C).

The government said that he should get the enhancement for having more than 100 false documents, because all four of the ones the government looked at were false. The sentencing court bit on that argument - the enhancement for more that 100 false documents was imposed.

"Ghost Dope" and Statistics

The Second Circuit was not so keen to use that analysis. As the court of appeals noted, it had previously held that

To sustain quantity-based enhancements for relevant conduct, the court must base its findings on "specific evidence" that the offense involved the requisite quantity of items. This evidence can, however, be circumstantial. United States v. Shonubi ("Shonubi II"), 103 F.3d 1085, 1090 (2d Cir. 1997). This requirement has two parts: (a) there must be evidence regarding the quantity of illicit or fraudulent goods and (b) it has to be specific to the defendant.

Shonubi was a heroin case.

(Quantity-based guidelines enhancements are the great equalizer of the federal sentencing guidelines - the same rule about how to count them applies to a guy who swallowed balloons of heroin to come through JFK as applies to Jeff Skilling or Conrad Black.)

In Shonubi, the person accused of the crime made eight trips to the United States from Nigeria to transport heroin. On the last trip, he was found with 427 grams of heroin. The district court multiplied 427 times eight and sentenced him as though he was caught with that quantity of heroin. In the Bureau of Prisons, I understand that this quantity is referred to as the "Ghost Dope."

The Second Circuit vacated the ghost dope sentence. On remand, the district court had an elaborate hearing, where it heard evidence about how heroin traffickers from Nigeria normally operate. It then imposed the same sentence as before appeal.

The Second Circuit, again, reversed. The court of appeals instructed that a sentencing court has to have some specific evidence relating to the actual person who is being sent to prison, not just folks who are like him or her.

It's an enlightened approach to ghost dope.

Statistics And Mr. Archer

The Second Circuit has noted that in the second Shonubi opinion

In so vacating, our court was careful to point out that "specific" evidence need not be "direct" and, when correctly considered, circumstantial evidence could be sufficient. Id. For example, the court approved of statistical extrapolation to arrive at an estimate of drug quantity when the sample was randomly selected from a known population. Id. at 1092 (approving of the method of testing four randomly selected heroin balloons to estimate the quantity of heroin contained in 103 balloons found inside the defendant's body).

So, if you have a sample that is random and comes from a known population, you can use it to extrapolate for guidelines purposes.

In Mr. Archer's case, the government argued that it had done exactly that. It looked at four of the 171 applications, and found that they all contained false statements. Since, as a matter of statistics, there's only a 10% chance that there would be fewer than 100 false documents from a sample of four (it's worked out in footnote 6 on page 19 of the opinion), that's good enough for government work.

The problem with this analysis, the court of appeals noted, is that these four applications were not randomly selected - rather, the government seems to have picked the very worst applications.

The Government's Other Argument

The government had an alternative argument,

The government notes that 100 percent of the applications involved aliens who claimed to have entered the country illegally, that 96 percent of these aliens allegedly did so in 1981, that 90 percent of the applications claimed travel outside the country between June and October 1987, and that 26 percent involved one or more fill-in-the-blank affidavits.

Based on these remarkable similarities, the government said that these applications simply had to be false.

The Second Circuit was unimpressed with this line of reasoning.

That information is interesting, but without a baseline as to what the national pool of I-687 applications (filed by, we must assume, honest lawyers) looked like to compare it to--and [the government expert] admitted he had no such baseline--the data tell us nothing about the truth or falsity of the applications. It is like saying that Dr. Jones's patients died, on average, a year after their initial visit with her: if most of her patients were healthy people coming for a check-up, this information suggests a finding that Dr. Jones is a terrible physician; if, on the other hand, Dr. Jones is an oncologist, all of whose patients had terminal cancer of a sort that had a national average life expectancy of two months, the same information makes her look very good indeed. Context is essential; but the government did not take the time and make the effort to provide any.

The Second Circuit vacated Mr. Archer's sentence and remanded.


* Two things about the Second Circuit that you may not care about. First, the court's RSS feed is annoying to work with - it doesn't automatically update in my Google Reader Feed for new published opinions for the Federal Circuit Courts (though, at least they aren't the 6th Circuit which doesn't even have an RSS feeder). Second, they issue their opinions in Goudy Old Style, a font I'm really enjoying, and which Matthew Butterick called "generally acceptable" in Typography for Lawyers.

September 28, 2011

The Increasing Number of Ways The Feds Can Prosecute You Troubles The Wall Street Journal

Those tree-huggers over at the Wall Street Journal have published a characteristically liberal piece about how the federal government is throwing more of its citizens in prison for no good reason.

As the article starts,

For centuries, a bedrock principle of criminal law has held that people must know they are doing something wrong before they can be found guilty. The concept is known as mens rea, Latin for a "guilty mind." This legal protection is now being eroded as the U.S. federal criminal code dramatically swells. In recent decades, Congress has repeatedly crafted laws that weaken or disregard the notion of criminal intent. Today not only are there thousands more criminal laws than before, but it is easier to fall afoul of them. As a result, what once might have been considered simply a mistake is now sometimes punishable by jail time.

The article lays the blame squarely on Congress in some pretty funny ways. It's worth a read.

This has me wondering if the problem of overcriminalization (and, yes, if the NACDL and the Heritage Foundation both think something is a problem, then odds are it is) stems from having legislatures, instead of judges, making criminal laws.

If you have a common-law model for when crime is caused, you're much less likely, I think, to have such weak politically-motivated and poorly-conceived crimes for people to run afoul of.

September 27, 2011

Conrad Black Writes About His Prosecution

Over at the Huffington Post, Conrad Black writes, from prison, about his experience with the United States criminal justice system. (Spoiler Alert - he doesn't like it).

Mr. Black was prosecuted for fraud by the United States government. He's on the last few months of a prison sentence. Here are some of his thoughts:

Before this cataract of horrors began, I had known that there were some dodgy aspects to the U.S. legal system, and feared that the plea bargain system was essentially a bazaar for the exchange of inculpatory perjury for reduced sentences or immunities, a traffic that would lead to the disbarment of prosecutors in most serious jurisdictions.

He also notes that the United States has too many people in prison, and that our nation doesn't recognize people's rights:
The United States has six to 12 times as many incarcerated people per capita as other comparable, prosperous and sophisticated democracies: Australia, Canada, France, Germany, Japan, and the United Kingdom. The Fifth, Sixth, and Eighth Amendment guaranties of due process, the grand jury as assurance against capricious prosecution, no seizure of property without fair compensation, access to counsel, an impartial jury, prompt justice, and reasonable bail, (I enjoyed none of these rights), have all been jettisoned while the Supreme Court has been drinking its own bathwater.

Moreover, he is skeptical of how prosecutors use their power and about the efficacy of public defenders:
Prosecutors routinely seize and freeze defendants' assets on the basis of false affidavits to prevent engagement of (avaricious) counsel of choice; there are many catch-all charges apart from the Honest Services statute that the Supreme Court rewrote in our case, that are impossible to defend, and prosecutors attack with unfeasible numbers of counts and have the last word before unsophisticated juries that have to rely on their memories of lengthy and complex proceedings and have been pulled from jury pools that have been softened up by an unanswerable prosecution lynching in the media. The public defenders are Judas Goats of the prosecutors rewarded for the number of victims they load on to the conveyor belt to the prison industry, not for the services they perform.

Finally, Mr. Black is leaving this country as soon as he's released, and he's not planning on returning.

Also, he's publishing a memoir.

September 27, 2011

Retroactivity In The Federal Sentencing Guidelines and The Parol Evidence Rule

One of the hardest things about representing a person charged with a crime in federal court is that the law is often changing. A decision that makes sense based on the law at the time, may not make sense later, if the law moves.

Fortunately, sometimes when the law changes, it changes for the better. And, sometimes when the law changes for the better, a person charged with a crime can benefit from it.

The Sixth Circuit provides a nice example of this in United States v. Cornell Smith.

Mr. Smith was charged with distributing more than a kilogram of crack cocaine. His lawyer negotiated a plea agreement for him under Federal Rule of Criminal Procedure 11(c)(1)(C).

Federal Rule of Criminal Procedure 11(c)(1)(C)

A plea under Rule 11(c)(1)(C) - commonly referred to as "C" plea by those who practice federal criminal law - binds the court at sentencing. Normally, a United States District Judge has complete discretion to impose a sentence up to the statutory maximum, or down to probation if there is no mandatory minimum.*

Under a C plea though, the parties agree either on a specific range or a specific sentence. The sentencing judge then has a choice - she can accept the agreed sentence or reject the plea entirely and the person can go to trial.

Some district court judges routinely reject C pleas because they feel that they encroach on their power too much. Some prosecutors routinely refuse to enter into them because they fear a reaction from the judge.

Mr. Smith's C Plea

Mr. Smith's C plea was to 15 years. Mr. Smith and the prosecutor attached to the plea agreement a sentencing worksheet that said that the guidelines range, as they calculated it, was 168 months to 210 months. Presumably, the guidelines worksheet was there to convince the sentencing court that the C plea should be accepted. In any event, it was a C plea to 15 years.

Trouble Brews

The presentence report, though, found that the guidelines range really should be 210 months to 262 months, because the United States Probation Officer who wrote the presentence report found that a guidelines enhancement applied that the parties thought should not have.**

In response to this calculation, Mr. Smith's attorney wrote to the Probation Officer that:

The Present Report as authored is a firm commitment to the mandatory guidelines. The guidelines are dead. United States v. Booker, 125 S. Ct. 738, 739 2005; United States v. Oliver, 397 F.3d 369 (6th Cir. 2005). [sic] declared the mandatory guidelines unconstitutional. The plea agreement entered into between the United States Attorneys Office [sic] and Defense Counsel was not based on the guidelines and therefore, there is no miscalculation by the attorneys. The plea agreement reached between the attorneys and their clients was based on the fact that a 15 year maximum sentence was sufficient and in the interests of justice. The Presentence Report failed to consider the validity and worthiness of the plea agreement entered into by the parties. The plea agreement was valid and in the interests of justice. Worshiping the dead mandatory guidelines gives honor to the deceased guidelines and gives them more weight and respect than the rulings of the United States Supreme Court and the Sixth Circuit Court of Appeals. The mandatory guidelines should be left in their crypt and not brought above ground level. (emphasis added)

It probably felt good to write.

The Court, in any event, accepted the C plea and sentenced Mr. Smith to 15 years in prison.

The Law Changes

After Mr. Smith was sentenced, the United States Sentencing Commission changed the sentencing guidelines for crack cocaine. The Sentencing Commission decided that the change in the crack guidelines is retroactive.

Normally, once someone is sentenced in a federal court, their case is over, and the sentence cannot be changed. There are a few narrow exceptions to this rule though.

One of them is if the guidelines have changed, and the sentencing commission makes the change retroactive. As 18 U.S.C. § 3582(c)(2) says, such a resentencing can happen

in the case of a defendant who has been sentenced to a term of imprisonment based on a sentencing range that has subsequently been lowered by the Sentencing Commission pursuant to 28 U.S.C. 994(o), upon motion of the defendant or the Director of the Bureau of Prisons, or on its own motion, the court may reduce the term of imprisonment, after considering the factors set forth in section 3553(a) to the extent that they are applicable, if such a reduction is consistent with applicable policy statements issued by the Sentencing Commission.

Though this only happens if the person was originally sentenced based on the sentencing guidelines.

So, for Mr. Smith, the question is whether he was sentenced based on the sentencing range under his C plea.

C pleas And Sentencing Ranges

The Supreme Court very recently held that a C plea does not prevent someone from getting the benefit of a retroactive change in the guidelines under 18 U.S.C. § 3582(c)(2) if the person's sentence was based on the guidelines in Freeman v. United States. So Mr. Smith is eligible for a new sentence if his C plea was based on the guidelines.

There is, though, the problem of his lawyer's statement to the Probation Officer, which expressly said that the sentence was not based on the guidelines, but, rather, on "the interests of justice."

As this case shows, in federal criminal practice, sometimes it's better not to talk about the interests of justice.

The Parol Evidence Rule

Happily, the Sixth Circuit held that when determining whether a C plea is based on the sentencing guidelines, you don't look at parol evidence.

Most criminal defense lawyers choose their practice area so they don't have to think about the parol evidence rule. They'd rather think about parole evidence (get it?).

The Parol Evidence Rule is the rule that when interpreting a contract, like a plea agreement, you don't look at evidence outside of what's in the document.

So, here, the court of appeals looked only at the plea agreement itself, and not at the defense lawyer's statement, and determined that Mr. Smith's plea was based on the sentencing guidelines.

As a result, the Sixth Circuit sent Mr. Smith's case back for resentencing under section 3582.

* This discretion is sometimes overly celebrated among those charged with a crime. Just because a judge can give probation for, say, health care fraud with more than $100 million in losses doesn't mean that the judge will. It's a bit like how I could sell you my car for $100. Sure, I've got the legal ability to do it, but I'm not going to.

** For those not in the know, before sentencing in every federal criminal case, a presentence report is written by a United States Probation Officer. The report contains a calculation of the now advisory sentencing guidelines, as well as a social history of the person being sentenced. And, yes, this is not what you normally think of Probation Officers doing.

September 27, 2011

New York Times Uncovers A Trial Penalty In Federal Cases. Also, the Sun Rises.

Yesterday, the New York Times reported that there is a trial penalty in criminal cases - that is, people accused of a crime spend more time in prison if they go to trial and lose than if they plead guilty.

The Times also reported that federal prosecutors have a lot of power.

September 23, 2011

Mortgage Fraud Is Not Money Laundering, Or, Why Not To Buy A House With A Drug Dealer

It's money laundering week here at the Federal Criminal Appeals Blog. Yesterday, I wrote about Walter Blair, the lawyer who was convicted for performing extra-legal services.

Today, the Third Circuit issued a happier decision (though not for the government) in United States v. Richardson.

The Dream of Home Ownership

Asya Richardson was the fiancé of Alton Coles, a known drug dealer in Philadelphia. Mr. Coles was also something of a renaissance man, promoting a series of nightclub events and running a record label, Take Down Records. The nightclub generated revenue and broke even. Take Down Records was not financially successful.

Ms. Richardson and Mr. Coles wanted to realize the American dream of home ownership. This presented a problem. Ms. Richardson only made $22,800 a year as a customer service representative at Bank of America. Mr. Coles asserted that he made $100,000 a year as the CEO of Take Down Records. Unfortunately, Mr. Coles, like many entrepreneurs, had bad credit.

The solution? Mortgage fraud. The couple decided to put the house in Ms. Richardson's name, and they said in their paperwork that she made more than $110,000 per year.

This allowed the couple to purchase the house together, but place it in Ms. Richardson's name.

Closing Costs

They still needed money for the down payment though. Here's how the court of appeals describes how they funded part of the money they brought to settlement.

The day of settlement was marked by a flurry of banking activity. At 12:08 p.m., a $9,800 cash deposit was made into Coles' and Richardson's joint checking account at PNC Bank. This deposit took place at a PNC branch located in Philadelphia. At 1:12 p.m., Coles made a $9,140 cash deposit into Take Down Records' business account. The funds were later transferred to Coles' personal checking account and used towards the down payment. Half an hour later, at the same bank branch, Coles deposited $9,200 in cash directly into his personal checking account. At 3:33 p.m., Richardson made a $9,200 cash deposit into the couple's joint checking account. This deposit was made at a PNC branch located in Stratford, New Jersey, which was near the location of the settlement. Finally, at 4:00 p.m., Coles made a $6,160 cash deposit into a Wachovia checking account belonging to his son. This deposit, too, occurred at a branch located in Stratford.

The settlement went smoothly and the couple became happy homeowners.

Trouble Brews


shortly after the couple had moved into the new home, a federal grand jury returned an indictment charging Coles with a single count of possession of a firearm by a convicted felon. Three superseding indictments followed charging Coles and others with various drug trafficking and firearms crimes. On March 22, 2006, a fourth superseding indictment was filed charging Coles and Richardson with money laundering, 18 U.S.C. § 1956(a)(1)(B)(i), conspiracy to commit money laundering, 18 U.S.C. § 1956(h), and wire fraud, 18 U.S.C. § 1343.

The couple went to trial, along with others. Mr. Coles was convicted of the drug distribution charges, as well as the money laundering. Ms. Richardson was convicted of money laundering. Both were acquitted of wire fraud.

Ms. Richardson was sentenced to twenty-four months in prison.

The Appeal

On appeal, Ms. Richardson argued that there was not enough evidence to support her conviction for money laundering.

As the Third Circuit explained, to find someone guilty of money laundering, the government has to prove:

  1. an actual or attempted financial transaction;

  2. involving the proceeds of a specified unlawful activity;

  3. knowledge that the transaction involves the proceeds of some unlawful activity; and

  4. knowledge that the transaction was designed in whole or in part to conceal the nature, location, source, ownership, or control of the proceeds of a specified unlawful activity.(internal textual modifications omitted)

Ms. Richardson argued that there was not enough evidence that she knew that the transaction was being used to launder drug money to convict.*

The government countered that the intricate set of deposits on the day of settlement strongly indicated that something was afoot. All the deposits were under $10,000, giving a strong argument that they were made to defeat the reporting requirement that is triggered by a $10,000 deposit.

This, by the way, is itself a crime, prohibited by 31 U.S.C. § 5324, and known as smurfing.**

However, as the court noted, there was precious little showing that Ms. Richardson herself was aware of the pattern of deposits.

The government argued that not having Mr. Coles name on the loan was suspicious. And, the government pointed out, that Ms. Coles lied about her income to get the loan - surely that's suspicious.

In a passage sure to warm the hearts of mortgage brokers everywhere, the court noted,

These circumstances show that Richardson lied about her income and had the property titled in her name, not to hide Coles' involvement (which by then was perfectly obvious), but to get around Coles' bad credit and purchase the house as planned. No jury could have reasonably reached a different conclusion.

(internal citation omitted)

This wasn't money laundering - it was mortgage fraud. With a little more than a year left on her sentence, Ms. Coles conviction was vacated.


* She also argued, based on United States v. Santos, that the money laundering statute only applies to profits from drug dealing, not gross receipts, and that the money here involved gross receipts. The court of appeals rejected that argument.

** And, yes, that's my second Smurf reference in a money laundering post this week. Here's an odd article on how "smurf" is used that doesn't include this NSFW varation.

September 22, 2011

Money Laundering, Obstruction of Justice, And A Full-Service Lawyer

Walter Blair was a full-service lawyer. He received a phone call from a woman who wanted to hire a criminal defense lawyer. The woman's name was Ms. Nicely. Ms. Nicely had a relatively intricate problem.

The Safe Full of Money

As it happened, she was in possession of a safe that contained a substantial amount of money that belonged to Mr. Rankine. Mr. Rankine was a drug-dealer. The money was drug money. Mr. Rankine's girlfriend had been found murdered, and Mr. Rankine was missing.

Ms. Nicely had been receiving threats about the money in the safe and became frightened. Through a referral from a co-worker, Mr. Henry, she contacted Mr. Blair.

They met. Mr. Blair told her to open the safe "by any means necessary" and bring the money to him. She did.



Mr. Blair and Mr. Henry counted the money - there was approximately $170,000. Mr. Blair made up a cover story about a joint investment headed by Mr. Rankine's girlfriend. Since she was no longer living, she couldn't repudiate the story.

Mr. Blair then had his law partner create a corporation to take the money so that Ms. Nicely and Mr. Henry could invest in real estate. This was in 2003 when investing in real estate seemed less like investing in Smurf collectibles.

Mr. Blair also told Mr. Henry and Ms. Nicely that they would need to set aside money to cover the legal fees for two of Mr. Rankine's colleagues who had been arrested and were charged in the U.S. District Court in Richmond Virginia.

The Federal Case In Virginia

Mr. Blair reached out to two Virginia lawyers to represent Mr. Rankine's colleagues. Mr. Blair also retained himself to represent the men. Eventually, he filed a pro hac vice motion in the federal case in Virginia.

(A pro hac vice motion is a motion that lets an attorney practice law in a court that she is not otherwise admitted to practice in for one time only, provided certain conditions are met).

As a part of the pro hac vice motion, Mr. Blair told the court that he had never been disciplined by any bar association. As it happened, that was not entirely accurate - Mr. Blair had previously had his law license suspended in West Virginia for witness tampering.

Things Break Bad

Mr. Blair gave Ms. Nicely a set of things to memorize about how all of these transactions were supposed to have gone down. Sadly, when interviewed by the FBI, Ms. Nicely was not 100% in line with Mr. Blair's instructions. Oh what a tangled web we weave.

Mr. Blair was indicted for money laundering, in violation of 18 U.S.C. § 1956 and § 1957 for his handling of the funds brought into his office. He was charged with obstruction of justice for his false statement in his pro hac vice motion under 18 U.S.C. § 1503. He was also charged with failing to file a tax return.

On appeal, he had two main challenges. The Fourth Circuit gave Mr. Blair a split decision in United States v. Blair.

The Money Laundering Safe Harbor Issue

First, the money laundering statute has a safe harbor provision for criminal defense attorneys who are receiving money from someone to mount a defense. Mr. Blair contended that this safe harbor provision sheltered him from one of the money laundering charges against him.

There's been a lot of attention to this issue lately, particularly since the Eleventh Circuit rejected a government money laundering prosecution in United States v. Velez. The basic rule of the safe harbor provision is that if a person has money that was derived from illegal conduct, and uses that money to pay for a defense attorney, that transfer cannot be the basis of a money laundering conviction. Section 1957(f)(1) recognizes that the Sixth Amendment protection of the right to counsel is more important than criminalizing this behavior.

Here, though, the Fourth Circuit rejected the safe harbor provision's application to Mr. Blair. As Judge Wilkinson said,

Blair used someone else's criminally derived proceeds to bankroll counsel for others.

This, the majority found, exceeds the scope of the safe harbor provision. Though Judge Traxler wrote a forceful dissent arguing that the safe harbor provision should apply.

Obstruction of Justice Challenge

Mr. Blair fared much better on his challenge to the obstruction of justice conviction. The government argued that lying on a pro hac vice motion is obstruction of justice. To do that, the prosecutors had to successfully "establish a nexus between the false statement and the obstruction of the administration of justice." That is, the government had to show that Mr. Blair's false statement "had a natural and probable effect of impeding justice."

The Fourth Circuit found no evidence that Mr. Blair lying about his West Virginia disciplinary troubles caused any problems, or was likely to cause any problems, with anything. Mr. Blair's representation was already a massive conflict of interest - his lie was just icing.

The court of appeals concluded that the government's allegations rested on "mere speculation."

The appellate court, then, vacated Mr. Blair's conviction for obstruction of justice, and remanded for resentencing without that count of conviction.