June 17, 2013

Short Wins - Forced Medication and Discovery Issues Edition

There's a great diversity of cases where defendants won in the federal circuit's last week.

Probably the most significant - in terms of it's implication for other cases, is the discovery dispute in United States v. Muniz-Jaquez from the Ninth Circuit.

Though, of course, it's still from the Ninth Circuit.

And there's now interesting pro-defendant competency and forced medication law from the Fourth Circuit in United States v. Chatmon

To the victories!

1155650_berlin_siegessule.jpg1. United States v. Chatmon, Fourth Circuit: After he was indicted for conspiracy to distribute crack and heroin, appellant was diagnosed with paranoid schizophrenia and deemed incompetent to go to trial. Later, the court granted the government's motion to forcibly medicate appellant to restore him to competency. This was error because the court did not discuss any less intrusive alternatives in granting the motion. The order was vacated and the case remanded.

2. United States v. Malki, Second Circuit: After appellant was convicted of retaining classified documents without authorization and sentenced to 121 months in prison, he successfully appealed and was resentenced. At resentencing, the court erred by engaging in a de novo resentencing. Because the remand was for limited, not de novo, resentencing, the case was remanded again for resentencing.

3. United States v. Muniz-Jaquez, Ninth Circuit: Appellant was convicted of being a deported alien in the United States. The trial court abused its discretion in excluding dispatch tapes that could have assisted in appellant's defense or could have helped him challenge adverse testimony at trial. Appellant's conviction was reversed and the case remanded for the tapes to be produced and for the court to address any motions the tapes may generate.

4. United States v. Rothstein, Eleventh Circuit: Appellant, who was convicted of running a Ponzi scheme through his law firm, placed the fruits of his scheme into his firm's bank accounts, where they were commingled with the firm's receipts from legitimate clients. The court erred in ordering the forfeiture of some of the accounts as proceeds of the scheme because the commingled proceeds could not be divided without difficulty, and forfeiture should have been sought under substitute property provisions. Further, the court erred in forfeiting to the government other properties without resolving the issue of whether the illicit funds were used to acquire them. Remand was required to resolve that issue.

5. United States v. Windless, Fifth Circuit: Appellant knowingly failed to register as a sex offender and pled guilty to the same. He was sentenced to supervised release and two conditions were imposed: (1) participation in a mental health treatment program; and (2) no direct or indirect conduct with children under 18. The court erred in relying at sentencing on three "bare arrest records" - records that did not contain any information about the underlying facts or conduct that led to the arrest - in imposing the conditions. Also, the second condition was overly broad. For these reasons, the first condition was vacated and the second reversed, and the case remanded for resentencing.

June 13, 2013

Short Wins - Assault on An Officer and the Ex Post Facto Clause

There were three wins in the federal circuits last week, discussed below. The most interesting is probably United States v. Zabawa which gives a fair shake at sentencing to someone who assaulted an officer (who headbutted him).

It reminds me of a joke Bill Clinton liked to tell during the impeachment:

A kid comes home from school with a black eye. His mom asked what happened. The kid says, "Mom, it all started when the other guy hit back."

Probably the bigger news, though, is the Supreme Court's decision on Monday in Peugh v. United States.

The short version - the Ex Post Facto clause applies to the sentencing guidelines.

For the longer version, please check out my coverage on Above the Law here.

To the victories!

1155650_berlin_siegessule.jpg1. United States v. Reed, Fifth Circuit: Appellant was convicted of trafficking in counterfeit goods. After voluntarily dismissing his appeal, he filed a 28 U.S.C. § 2255 motion seeking to vacate his conviction and sentence for ineffective assistance of counsel, among other grounds. The district court denied the motion and denied a certificate of appealability. On appellant's motion, the Fifth Circuit granted a certificate of appealability only on the issue of whether the district court erred in denying, without having an evidentiary hearing, appellant's ineffective assistance claim. The Fifth Circuit vacated the district court's order on that issue only and remanded for a hearing.

2. United States v. Whatley, Eleventh Circuit: Appellant was convicted of robbing several banks. During his sentencing, the district court erred when it applied a four-level enhancement for abduction of the bank employees because appellant ordered them to move around to different areas within the banks. The case was remanded for resentencing with instructions for the court to apply the two-level enhancement for physical restraint of the employees.

3. United States v. Zabawa, Sixth Circuit: While in federal custody, appellant assaulted an officer, who responded by headbutting appellant, which left the officer with a cut over his eye. As a result of this interaction, appellant was convicted of assaulting a federal officer under 18 U.S.C. § 111(a)(1) and (b). Because § 111(b) specifies that the person must "inflict[]" the predicate injury to the officer, rather than cause it, appellant's conviction under (b) was improper: the officer himself admitted that his injury might have resulted from his headbutt to appellant, rather than from any force appellant applied to him. As a result, appellant's conviction under § 111(b) was reversed.

June 5, 2013

Short Wins - Slow News Day Edition & DNA Collection News

Last week, with the Memorial Day holiday, was a slow week for wins in the federal circuits- there's only one short win.

Monday, of course, was a huge day for the government's ability to collect massive amounts of data about the citizenry. I mean, of course, the Supreme Court's opinion in Maryland v. King.

My coverage at Above the Law is available here (it's dissent heavy).

And, if you really are patient and eager for more of my take on the case, I was on Huffington Post TV talking about it (you can scroll past the technical issues, which, I swear, get resolved).

To the victory!

1155650_berlin_siegessule.jpg1. United States v. Joseph, Ninth Circuit: Appellant pled guilty to two counts of possession of contraband and one count of providing contraband to a fellow inmate in violation of 18 U.S.C. § 1791. One of the possession counts and the providing contraband count arose out of a December 2010 incident, while the remaining count arose out of conduct in February 2011. The court imposed consecutive sentences for each count. Because the court plainly erred in interpreting § 1791(c) to require consecutive sentencing for controlled substances offenses that arose out of separate items of drugs, the court vacated appellant's sentence and remanded for resentencing.

May 28, 2013

Short Wins - Special Assessment Lawyering and a Remand For The Oral Pronouncement of a Special Condition of Supervised Release

There are some dramatic wins in the federal appeals courts. Sometimes an entire conviction is overturned, and it is clear that the person will walk free. Other times, a large and unjust sentence is reversed.

And then there are this week's "wins". In one, a former judge, convicted of fraud, will have the total punishment imposed on him reduced by $100 - the cost of the Special Assessment that was imposed on a count that exceeded the statute of limitations.

In another, the district court imposed a condition of supervised release ordering treatment for a gambling addiction in the Judgment following the sentencing hearing, but not at the hearing itself. So the case will go back for a sentencing hearing where the judge can say that the person is going to be going to treatment for gambling addiction to the person's face.

To the victories?

1155650_berlin_siegessule.jpg1. United States v. Ciavarella, Third Circuit: Appellant, a former judge, was convicted of honest services mail fraud, among other offenses, and sentenced 336 months in prison and ordered to pay a special assessment and restitution. Because the mail fraud count was barred by the statute of limitations, and because appellant did not waive his challenge to this count on that ground, his conviction on this count was vacated. Remand was required to amend the judgment to reduce the special assessment.

2. United States v. Martin, Sixth Circuit: Appellant was sentenced to 120 months for being a felon in possession of a firearm. In the written judgment, the court imposed a special condition of supervised release that appellant undergo treatment for a gambling addiction. The government conceded that the court's failure to orally impose the condition was an abuse of discretion and requested remand for the court to conform its written judgment to the oral pronouncement. The appeals court granted that relief.

May 20, 2013

Short Wins - The Fair Sentencing Act and the New York Times on Brady and Criminal Discovery

There was only one win in the federal circuits last week, but United States v. Blewett was a whopper - the Sixth Circuit held that the Fair Sentencing Act applies retroactively to people sentenced before it took effect. Here's the best language:

In this case, we hold, inter alia, that the federal judicial perpetuation of the racially discriminatory mandatory minimum crack sentences for those defendants sentenced under the old crack sentencing law, as the government advocates, would violate the Equal Protection Clause, as incorporated into the Fifth Amendment by the doctrine of Bolling v. Sharpe, 347 U.S. 497 (1954) (Fifth Amendment forbids federal racial discrimination in the same way as the Fourteenth Amendment forbids state racial discrimination).

In unrelated news, the New York Times had an excellent editorial (available here subject to the Times kind of annoying content restriction thing - private browsing anyone?) on Brady and criminal discovery.

Here's my favorite part:

It might seem obvious that prosecutors with any sense of fairness would inform a defendant's lawyer of evidence that could be favorable to the defendant's case. But in fact, this principle, known as the Brady rule, has been restricted by subsequent rulings of the court and has been severely weakened by a near complete lack of punishment for prosecutors who flout the rule. The court has also declined to require the disclosure of such evidence during negotiations in plea bargains, which account for about 95 percent of cases.

This is exactly right. The problem is that prosecutors aren't required to follow Brady and turn over evidence that matters if someone is going to plead.

And, prosecutors are allowed to give sweet plea deals that expire before they're required to hand over all the evidence. So, unless defense counsel is aggressive about asking for all the evidence - and the prosecutor is inclined to turn it over - folks have to choose whether to risk going to trial or locking in a plea without being able to meaningfully assess their chances of acquittal.

As the Times points out, an early open file discovery rule would fix that.

So, doubtless, DOJ will get right on that.

To the Victory!

1155650_berlin_siegessule.jpg1. United States v. Blewett, Sixth Circuit: Appellants were convicted in crack cocaine cases and sentenced to ten years under the then-applicable mandatory minimum, which was based on the quantity of crack possessed. In 2010, the Fair Sentencing Act substantially reduced crack sentences, including the mandatory minimum imposed in appellants' cases. Because the federal perpetuation of the racially discriminatory mandatory minimum crack sentences for those defendants sentenced under the old law violates the Equal Protection Clause, the Act should apply to all defendants, including those sentenced prior to its passage. For these reasons, appellants' case was remanded for resentencing.

May 17, 2013

Does A Person Submitting False Medicare Bills Abuse The Trust Of The Doctor Making Money Off Of The False Bills?

Hiring is always hard, especially in a small office.

You have work that needs to be done. You can't do it all. Maybe you're a professional, like a doctor, and some of the work isn't the best use of your time.

So you hire someone to help. Really, how much do you know about a person as the result of a hiring process? Yet, despite that, you give them responsibility over a portion of your business.

And you trust them.

As the First Circuit's case in United States v. Zehrung shows, sometimes that trust is not repaid in the way you expect.

69133_medical_exam_equipment.jpgDawn Zehrung worked in a doctor's office. While the doctor was seeing patients - he had 14,000 patients - she was responsible for sending the office's bills to Medicare, the state of Maine's Medicaid program, and other insurance companies.

She also had unsupervised control of the firm's checkbook, accounts payable, and copays from patients.

In what I suspect the doctor now sees as folly, Ms. Zehrung was paid a bonus if the firm did well.

Shortly after she took over the billing, the firm's monthly revenues went up 33%. The good doctor asked her why they were making so much more money all of a sudden. Ms. Zehrung said she was simply working back accounts receivable.

The doctor accepted this explanation. I'd like to think he drove off in a new sports car after hearing it.

Later, the doctor thought the continued increase was as a result of laser hair removal procedures that they had started doing.

As it happens, Ms. Zehrung was not just working the receivables. And, doubtless there's money to be made in laser hair removal, but that's not how the money in this office was being made.

It was, instead, being made through simple upcoding.

Ms. Zehrung would take the doctor's notes about what had been done, then she would submit bills for procedures that paid more.

Also, she would destroy some of the records that showed what was actually done.

Finally, the doctor was alerted by a nurse who spotted the problem. I'd like to think he was reached by the nurse on his cell phone, while he was sitting beachside drinking something with an umbrella in it.

He asked Ms. Zehrung to explain herself. Eventually, he made a serious of calls that wound up with Ms. Zehrung being arrested, charged, and pleading guilty to healthcare fraud.

At sentencing, there was, apparently, only one disputed issue - whether Ms. Zehrung should be subject to an abuse of position of trust enhancement.

The government said she should - she abused the good doctor's trust. He trusted her and she betrayed that trust.

She said she shouldn't - the enhancement is normally appropriate for folks who have some special skill with discretion, like a lawyer, who abuses the trust that comes with that skill.

It's clear that, say, a bank teller who embezzles is not eligible for an abuse of position of trust enhancement.

So, was Ms. Zehrung's trust anything more than one finds in a run of the mill employee - someone who is trusted to do an important job in a small business?

The district court applied the enhancement. As the court of appeals explained, the court reasoned:

She did the billing with "no supervision," the judge added - "[t]here was no direct oversight, no review," he repeated again - and "she assumed complete financial control within the office." And, the judge suggested, her position made it significantly easier for her to commit the crime charged.

The First Circuit reversed and remanded for more factfinding. These remarks, it concluded, were not enough to explain whether the enhancement was justified.

This case is a nice slalom through the different ways the abuse of position of trust enhancement can apply. And it's a lovely read.

May 16, 2013

The Second Circuit On Appointed Counsel And The Perils of Hiring A Lawyer For A Federal Criminal Case

Most people who are accused of a crime in federal court are unable to pay for a lawyer and have one appointed for them.

Which makes sense - a decent lawyer for a federal criminal case is expensive, the need to find a lawyer is urgent, and most people don't have substantial liquid assets to hire one quickly.

Most people, then, are represented by either a federal public defender or an appointed attorney.

The advantage is that they don't have to pay. The disadvantage is that they don't get to choose the lawyer they hire. Maybe the lawyer they get is someone they don't get along with. Maybe the client thinks an appointed lawyer won't work as hard. Maybe, for some lawyers, there's just a different dynamic when the client is paying for the lawyer's services.

In any event, sometimes, when a client has an appointed lawyer, things go poorly with the relationship with that lawyer.

68920_law_education_series_5.jpgThe Second Circuit's opinion in United States v. Barton is an interesting example of what can happen when that relationship breaks bad.

John Barton was accused of doing some illegal things involving meth and a gun. He had an initial appearance - a first hearing in a case shortly after a person is arrested.

At the initial appearance, the judge asked Mr. Barton if he'd like an appointed lawyer or to hire his own lawyer. An assistant federal public defender, Elizabeth Switzer, was with him at the hearing. Normally, if a person wants an appointed lawyer, the person has to complete a financial affidavit so the judge can see if the person really can't afford a lawyer.

Mr. Barton did not fill out a financial affidavit. He told the judge that he wanted to hire a lawyer. The judge gave Mr. Barton several days to find a lawyer.

Hiring a lawyer proved challenging for Mr. Barton. He came back to court three more times, each time with Ms. Switzer, and each time he was unable to hire a lawyer. The court continued to give him time to hire someone.

Finally, Mr. Barton decided to take matters into his own hands. He filed a motion without a lawyer seeking to dismiss the charges against him. As the Second Circuit described the motion:

He argued, among other things, that he was not properly named in the complaint, which was made out against "JOHN BARTON" and not "John Anthony Barton"; that he was legally allowed to possess both marijuana and methamphetamine to treat narcolepsy caused by a head injury he suffered in connection with a car accident; and that New York State is a sovereign territory into which the laws of the United States do not extend.

These are innovative legal theories, to be sure.

Two more hearings were held on whether Mr. Barton would hire a lawyer. Each time, Ms. Switzer appeared with him.

Finally, the judge, concerned about Mr. Barton's head injury and how sometimes he didn't make complete sense when talking during the hearings, decided that Mr. Barton should be evaluated to see if he is competent to stand trial.

The judge asked Ms. Switzer - who had not been appointed - to "remain in the case not as appointed counsel, but to assist Mr. Barton" until the possibly not competent man hired a lawyer. Because federal public defenders, apparently, are really best viewed as social workers.

Ms. Switzer left the federal public defender's office for greener pastures. At Mr. Barton's next hearing, Robert Smith, in the federal defender's office, showed up instead.

Mr. Barton refused to answer any questions from the court about whether he would hire a lawyer. He did mention the issues raised in his motion to dismiss the charges. When the judge said she would give him two more weeks to find a lawyer then appoint Mr. Smith, Mr. Barton's response was "I object."

A few weeks later, at another hearing, Mr. Barton again mainly objected and talked about his motion to dismiss. The court appointed Mr. Smith, since Mr. Barton hadn't found any other lawyer. The next day, the court issued an order finding Mr. Barton competent.

At an arraignment a few weeks later, Mr. Smith entered a plea of not guilty for Mr. Barton. Mr. Barton objected.

Not surprisingly, Mr. Smith soon after that moved to withdraw as counsel for Mr. Barton. Apparently Mr. Barton refused to see Mr. Smith - Mr. Smith thought this was, perhaps, not the best attorney client relationship.

More hearings were held. Mr. Barton did not hire an attorney. He did not complete a financial affidavit. He did, however, press forward about the issues in his motion to dismiss.

Finally, the motion to withdraw was denied. The district court reasoned that Mr. Barton never said he wanted to represent himself, and that "representation by counsel . . . should be the standard, not the exception."

Mr. Smith took an interlocutory appeal, saying that to be forced to represent a client who wouldn't talk to him is inconsistent with his obligations as a lawyer.

The Second Circuit let Mr. Smith out of the case. Since there was no financial affidavit - and Mr. Barton said he was able to hire a lawyer - the district court didn't have the authority to appoint him in the first place. An appointment without a statutory basis is not really much of an appointment at all.

As the Second Circuit summed it up,

We can think of no justification for requiring these unwilling individuals to continue their unauthorized relationship. Accordingly, the district court abused its discretion when it denied Smith's motion to withdraw.

Going forward, here's where the Second Circuit sees things:

Of course, Barton is free to change his mind. Should he succeed in hiring an attorney following remand, that attorney may file an appearance. Alternatively, if Barton asks for appointed counsel, and if he qualifies financially, the district court must appoint counsel. What the district court may not do, however, is foist an unwilling attorney upon an unwilling defendant, who has actively refused the appointment of counsel and declined to demonstrate his financial eligibility under the CJA.

The court, unfortunately, did not rule on whether being forced to represent a client who refuses to talk to you violates your responsibilities as a lawyer.

May 13, 2013

Short Wins - Missing Evidence, Medicare Fraud, and How Normal People React To Federal Prosecutions

There was only one published criminal case in the federal circuits last week where the defendant won. It's a good case on jury instructions for missing evidence, and the short write up is below.

In other news - I stumbled across this lovely write up of a Medicare Fraud prosecution by a doctor.

I often am talking to people who are amazed at how the federal criminal justice system works when they encounter it for the first time. The article is titled "Is a charting error a federal crime?" (spoiler alert: the author thinks that it is, but shouldn't be)

Many folks in the medical profession who take federal health care benefits observe, as this article does, that

the laws are increasingly designed to deter expensive care of the elderly, and that the judicial system focuses more on procedural rules than on substantive justice.

In the case, a doctor who was under investigation for years was charged with health care fraud. He lost at trial. The article is written by a doctor who went to watch the appellate arguments.

It sounds like things at the argument went well for the doctor - one judge apparently said that the government's position meant that "[a]ny error in any medical record related to a health program could be a federal crime." I'm betting the judge didn't mean that this was a good legal rule.

Though, in the end, the author concludes that

Doctors need to know that anything in the medical record can be used against them -- as can errors by their own million-dollar attorney.

The first part probably isn't literally true, but one can forgive some folks in a highly regulated industry who are, mainly, just trying to help people, for thinking that it is.

To the Victory!

1155650_berlin_siegessule.jpg1. United States v. Sivilla, Ninth Circuit: Appellant was convicted of offenses arising out of the discovery of cocaine hidden in the engine manifold of his car. Instead of preserving the car as evidence, it was sold for parts by the government notwithstanding appellant's attorney's requests to preserve it, the prosecutor's pledge to do so, and a court order compelling such action. At trial, the court denied appellant's request that the jury be instructed that the defense was not given a chance to inspect the car because it was not preserved as evidence, despite the court's order to do so. Because the government's poor conduct in failing to preserve the car significantly prejudiced appellant, the court abused its discretion in denying the request for a jury instruction. The case was remanded for a new trial with instructions to grant appellant a remedial jury instruction.

May 6, 2013

Short Wins - And More on Jury Nullification

Six new cases from the federal circuits this week. My favorite - a subjective measure, I know - is United States v. Ramirez. Any time a court, even the Ninth Circuit, vacates a drug conspiracy conviction for insufficient evidence it's worth a read.

Last week I posted about a First Circuit case that raised, I thought, a specter of support for jury nullification. Lots of folks responded to that - it turns out that nullification is a popular topic.

On Twitter, I was directed to this recent opinion out of New Mexico on nullification. If you have time, I highly recommend it. It canvasses the history of nullification as an important part of what our criminal justice system is built on then says, basically, no.

I also exchanged a few emails about nullification with a prosecutor friend of mine (yes, I have prosecutor friends, don't tell). He pointed out, rightly, that nullification is not your friend if you're thinking of, say, the Criminal Section of the Civil Rights Division of DOJ going into, say, Alabama, to prosecute hate crimes. Or almost any public corruption trial of a very popular politician. It's a fair point. The interplay between popular sentiment and the rule of law is complicated. And, as soon as cases that raise those kinds of concerns are the majority of the criminal trials in the country, perhaps prohibiting nullification would clearly be good.

To the victories!

1155650_berlin_siegessule.jpg1. United States v. Davis, Fourth Circuit: Appellant pled guilty to possession of a stolen firearm and was ordered to pay restitution to reimburse the homeowner from whose home he broke into for the value of the unrecovered firearm and damage caused by the break-in. Because the homeowner is not a victim under the Victim and Witness Protection Act, and because appellant's plea agreement did not include an explicit agreement to pay restitution to a person other than a victim of the offense of conviction, there was no basis to order restitution. This plain error required reversal of the restitution order.

2. United States v. Luna-Acosta, Tenth Circuit: Appellant pled guilty to illegal re-entry into the United States. At sentencing, the district court orally announced a sentence of one year in prison. Five months later, a written judgment was filed imposing a 33-month sentence. Because the court lacked jurisdiction to alter the sentence, the sentence was vacated and the case remanded for the court to enter a new judgment with a one-year sentence.

3. United States v. Mackay, Tenth Circuit: Appellant was convicted of unlawfully prescribing controlled substances and sentenced to 20 years in prison. Although the total sentence was below the advisory guidelines range, it exceeded the statutory maximum sentence on nine counts. Because the judgment was unclear whether the court intended to impose a 20-year sentence on each count, which would have been illegal, the case was remanded to allow the court to clarify the sentence for the record.

4. United States v. Mancuso, Ninth Circuit: Appellant was convicted of possession and distribution of cocaine, as well as two counts of maintaining a drug-involved premises. The distribution conviction was vacated because it joined two or more distinct and separate offenses into a single count. The convictions for maintaining a drug involved premises were vacated because the district court committed plain error by utilizing a "significant purposes" instruction rather than a "primary or principal use" instruction.

5.United States v. Patrick, Sixth Circuit: Appellant pled guilty to drug and firearm charges. At the plea hearing, the judge did not state the mandatory minimum penalty for the firearm charge. Because the court's failure to ensure that appellant understood that he faced a mandatory minimum sentence of five years for the firearm charge affected his substantial rights, the plea was vacated to allow appellant to withdraw his plea.

6. United States v. Ramirez, Ninth Circuit: Appellant was convicted of distribution, possession with intent to distribute, and conspiracy to distribute meth. When viewing the evidence on the conspiracy charge in the light most favorable to the government, the government failed to present sufficient evidence showing that appellant had an agreement with another to distribute meth. As a result, the conspiracy conviction was vacated and the case remanded for the district court to grant a judgment of acquittal on that count and to conform the sentence accordingly.

May 1, 2013

Did The First Circuit Encourage Jury Nullification?

We have too many federal criminal laws - more than 4,000. And, as frequent readers of this blog will note, there are times when the federal government prosecutes a person that is a close call - it may or may not be a crime.

673264_hammer_to_fall.jpgFor example, in United States v. Costello, the government prosecuted a woman for giving her boyfriend a ride from the bus station on the theory that this was "harboring" an illegal alien. (read my prior write-up on the case here).

In marginal cases like these, the defense normally argues that this is government overreaching. The government normally brushes aside this argument saying, in essence, "trust us." "We," the government continues, "have scarce resources and good judgment. We won't prosecute anyone except for really bad people."

In Costello, Judge Posner responded forcefully to this, saying:

The government tells us not to worry: we judges can rely on prosecutors to avoid bringing cases at the outer margin of the government's sweeping definition of "harboring." But this case is at the outer margin. No doubt it was brought because the Justice Department suspects that the defendant was involved in her boyfriend's drug dealings, but cannot prove it, so the Department reaches into its deep arsenal (the 4000-plus federal crimes) and finds a crime that she doubtless never heard of that it can pin on her. She was sentenced only to probation and to pay a fine but now has a felony record that will dog her for the rest of her life if she loses this appeal.

Or, take a case in the news lately, United States. Nosal. There, the government prosecuted a man (and, after they lost the appeal, tried him on different grounds and got a conviction last week) for violating the CFAA - the Computer Fraud and Abuse Act - because he encouraged others to access a computer contrary to the authorization given to them to access the computer. (my prior write up on the earlier opinion is here)

The defense argued that this was the government prosecuting a marginal case. The government said, in essence, "trust us."

Judge Kozinksi was unkind to this prosecution.

The government assures us that, whatever the scope of the CFAA, it won't prosecute minor violations. But we shouldn't have to live at the mercy of our local prosecutor. Cf. United States v. Stevens, 130 S. Ct. 1577, 1591 (2010) ("We would not uphold an unconstitutional statute merely because the Government promised to use it responsibly."). And it's not clear we can trust the government when a tempting target comes along. Take the case of the mom who posed as a 17- year-old boy and cyber-bullied her daughter's classmate. The Justice Department prosecuted her under 18 U.S.C. §1030(a)(2)(C) for violating MySpace's terms of service, which prohibited lying about identifying information, including age. See United States v. Drew, 259 F.R.D. 449 (C.D. Cal. 2009). Lying on social media websites is common: People shave years off their age, add inches to their height and drop pounds from their weight. The difference between puffery and prosecution may depend on whether you happen to be someone an AUSA has reason to go after.

Normally, the response to an overaggressive government prosecution of these kinds of marginal cases is to define the scope of the statute narrowly so that the prosecuted conduct doesn't fit within the terms of the statue.

But what about a case where the case is marginal but within the language of the statute?

Normally, in that situation, if the language is clear that what the person did is a federal crime, but it clearly isn't what Congress intended, or what any thinking person would think should be a crime (and, sadly, those are different tests), the response is that we have to trust the government to not bring those cases.

Or, if there isn't a mandatory minimum, we have to hope sentencing judges will truly see the case as marginal.

What many folks would say you can't do, though, is go to a jury and argue that this prosecution shouldn't have been brought. Many would say that you aren't allowed to argue, in essence, "yes, my client is guilty, but, still, you shouldn't convict."

Those folks may not have read the First Circuit's opinion in United States v. Baird.

There, Mr. Baird bought a gun from a shady guy. Turns out the gun was stolen.

The government decided to prosecute the guy who bought the gun (using the evidence of the guy who stole the gun) for possession of a stolen firearm.

Mr. Baird wanted an "innocent possession" instruction. He wanted to argue that he didn't know the gun was stolen when he possessed it and that it got rid of it quickly after having learned it was.

The district court refused to give that instruction, relying on cases that said there's no "innocent possession" defense in a possession of a stolen gun case, relying on United States v. Teemer, a prior First Circuit case on whether there's an innocent possession defense to a felon in possession charge.

The First Circuit, reversing on the failure to give the instruction, acknowledge that Teemer held there was no such defense, but then said,

But that is not all Teemer said. While Teemer declined to create a "mandatory safe harbor" for innocent possession, it also acknowledged that "there are circumstances that arguably come within the letter of the law but in which conviction would be unjust," such as if a felon snatched away a loaded gun from his school-aged son and then called the police to retrieve it. Therefore, although Teemer relied primarily on prosecutorial discretion and the common sense of the jury to weed out the cases warranting leniency in § 922(g) cases, we have simultaneously recognized that "extraordinary cases might arise where . . . . if the government were foolish enough to prosecute, some caveat might indeed be needed (e.g., an instruction on a necessity or justification defense.)"

I'm not sure how to read that, except as licensing a very limited kind of jury nullification.

Justifying the applicability of an innocent purchaser defense - which isn't in the statute - the court of appeals imagines what Congressional intent should have been. Since this prosecution didn't do much to get guns off the streets, the First Circuit concludes that it wasn't what Congress meant.

Clearly this isn't going to allow a jury nullification argument most of the time, or even much of the time. But, for those of us who have grown up with a Scalia-generated view of legislative intent, it's a stunning turnaround in how to interpret a statute. And, perhaps, a first step toward allowing some kind of jury nullification.

April 29, 2013

Short Wins - Resentencing Mania Sweeps The Federal Appeals Courts

There are a handful of resentencing remands in the federal courts last week.

Perhaps most interesting is United States v. Francois, remanding because the sentence imposed exceeded the statutory maximum. One doesn't see that too often (though it's preserved in even the most aggressive appeal waivers - I think of it as a theoretical thing rather than a real meaningful risk, but, hey, last week was the week.).

To the victories!

1155650_berlin_siegessule.jpg1. United States v. Allen, Fourth Circuit: Appellant was convicted of conspiring to possess with intent to distribute 50 grams or more of crack cocaine and sentenced to 10 years in prison, the mandatory minimum at the time he committed the offense. Before he was sentenced, the Fair Sentencing Act ("FSA") was passed, which raised the drug quantities that triggered mandatory minimum sentences for certain crack offenses. Because the FSA was passed before appellant was sentenced and appellant didn't possess the amount of crack necessary to trigger the mandatory minimum under the FSA, his sentence was vacated and the case remanded for resentencing.

2. United States v. Dotson, Sixth Circuit.pdf: Appellant was convicted of sexual exploitation of a minor and possession of child pornography. He was sentenced to 22 years in prison to be followed by a 20-year term of supervised release, which carried with it many conditions. Because the district court did not articulate a rationale for imposing some of the conditions of supervised release, the judgment was vacated as to those conditions and the case remanded for further proceedings.

3. United States v. Francois, First Circuit: Appellant was convicted of four counts of possession of a firearm by a convicted felon, one count of possession a firearm with an obliterated serial number, and 12 counts stemming from his use of a stolen identity to purchase those firearms. For these offenses, he was sentenced to 164 months in prison. Because appellant's sentences for some of the offenses related to his use of a stolen identity exceeded the statutory maximum, the case was remanded for resentencing.

4. United States v. Hamilton, Eleventh Circuit: Appellant pled guilty to possession with intent to distribute 5 grams or more of crack cocaine and other drug offenses and was sentenced to 262 months. Appellant made two motions under 18 U.S.C.§ 3582(c)(2) to reduce his sentence based on Amendment 750 to the sentencing guidelines, which lowered the base offense levels applicable to crack offenses. It was error to deny the second motion because (1) the government's and probation's memos contained inaccurate or incomplete information about the drug quantity findings at sentencing and (2) the district court did not determine accurately the drug quantity.

5. United States v. Savani, et al., Eighth Circuit: Three appellants were separately convicted of crack cocaine-related offenses. In each case, appellants were sentenced below the statutory mandatory minimum. Shortly after appellants were sentenced, the FSA became law, and Amendment 750 was approved. In light of this amendment, appellants moved to further reduce their sentences. Because they were not barred for policy reasons from seeking a further sentencing reduction under § 3582(c)(2), the courts' orders denying appellants' motions were vacated and the cases remanded for further proceedings.

6. United States v. Washington, Eleventh Circuit: Appellant pled guilty to four fraud offenses and was sentenced to 105 months in prison. The sentence was based in part on the court's ruling that 250 or more people or entities were victimized by the fraud scheme. Because the government failed to present any evidence that there were 250 or more victims, appellant's sentence was vacated and the case remanded for the court to resentence appellant using a two-level, rather than six-level, enhancement for the number of victims under U.S.S.G. § 2B1.1(b)(2)(A).

April 26, 2013

The Fourth Circuit Holds That A Plea Based on Law Enforcement Fraud Is Invalid, Even If The Person Is Guilty

October 29, 2007 started bad for Cortez Fisher.

He walked out of his house and the Baltimore police approached him (he lived in Baltimore). They asked to talk to him. He said no. He tried to drive away, but backed into a cop car.

He was arrested and searched - they found empty glass vials in his pants pocket.

The officers got a search warrant for Mr. Fisher's house and car, based on an affidavit by Baltimore DEA Task Force Officer Mark Lunsford.

548792_downtown_baltimore.jpgIn the affidavit, DEA Task Force Officer Lunsford said that he had talked to a confidential informant who was reliable and had helped him with a number of prior cases. The confidential informant said that Mr. Fisher sold drugs out of his house. DEA Task Force Officer Lunsford said that after hearing from the confidential informant, he personally had watched Mr. Fisher sell drugs from his car.

Law enforcement searched Mr. Fisher's house and car. They found drugs and a gun.

Mr. Fisher plead guilty to being a felon in possession of a firearm.

He was sentenced to ten years in prison.

One year later, DEA Task Force Officer Lunsford pled guilty to fraud for lying on affidavits in search warrants.

Now former-DEA Task Force Officer Lunsford said that Mr. Fisher's affidavit was one of the ones he lied in.

The District Court Holds That When Police Lie On A Search Warrant Affidavit It Isn't Necessarily A Miscarriage of Justice

Of course, as soon as the U.S. Attorney's Office learned that a man was in prison based on a lie, they immediately moved to vacate his conviction. A prosecutor's ethical mandate, of course, is to do substantial justice and protect the integrity of our system of justice.

No, wait, sorry, my bad. I must have misunderstood what a prosecutor is supposed to do. The U.S. Attorney's Office did exactly nothing.

Mr. Fisher, however, was understandably concerned that he had been convicted based on the word of someone who was now an admitted fraud.

He sent a letter to the district court saying that maybe he should have his plea taken back, since a law enforcement lie is a "but for" cause of his incarceration.

The district court held that this was not a good reason to withdraw a plea:

Unquestionably, if [Defendant] had known of Lunsford's criminal misconduct, he would have filed a motion to suppress, and the motion may well have been successful. Nevertheless, [Defendant] does not deny that he was unlawfully in possession of a firearm (as he admitted under oath during his Rule 11 colloquy). Under these circumstances[,] I cannot find that a failure to allow [Defendant] to withdraw his guilty plea would result in a "miscarriage of justice." Certainly, [Defendant] was denied of an opportunity to pursue a motion to suppress that might have been meritorious, but neither the Government nor his own counsel was aware of Lunsford's criminal misconduct at the time that [Defendant] entered his guilty plea and was sentenced. Therefore, it cannot be said that [Defendant's] counsel was ineffective or that the Government breached any obligation that it owed to him.

I don't understand how the district court could determine that "it cannot be said that . . . the [g]overment breached any obligation that it owed to" Mr. Fisher when it prosecuted him based on evidence obtained from a fraudulent affidavit. Wasn't ex-DEA Task Force Officer Lunsford a part of the government when he made the fraudulent affidavit?

The Fourth Circuit Holds That You Can Withdraw A Plea When It Is Procured By Fraud

The Fourth Circuit, in United States v. Fisher, took a different view:

This . . . is not a case where Defendant sought to withdraw his plea "merely because he discover[ed] long after the plea ha[d] been accepted that his calculus misapprehended the quality of the State's case or the likely penalties attached to alternative courses of action." Rather, Defendant's misapprehension stems from an affirmative government misrepresentation that "strikes at the integrity of the prosecution as a whole."

The Fourth Circuit was also good to note that just because Mr. Fisher was factually guilty doesn't matter - even a guilty person can suffer a miscarriage of justice.

Ultimately, the court of appeals found Mr. Fisher's plea was simply too compromised to stand:

Given the totality of the circumstances of this case--a law enforcement officer intentionally lying in a affidavit that formed the sole basis for searching the defendant's home, where evidence forming the basis of the charge to which he pled guilty was found--Defendant's plea was involuntary and violated his due process rights. Under these egregious circum- stances, Defendant was deceived into making the plea, and the deception prevents his act from being a true act of volition.

Though, as the court of appeal helpfully pointed out, the government can try Mr. Fisher again if want to put ex-DEA Task Force Officer Lunsford on as a witness at trial.

April 25, 2013

The Jury Gets To Decide Whether All The Elements Of A Crime Have Been Proven, Even If One Of Them Is Really Complicated

Many white-collar cases start the same way - a person is an entrepreneur. He has a vision for a business he'd like to build. He wants to do great things and reform an industry.

Things are going well, but he wants to move to that next level. Getting to the next level - whatever it is - takes a little faith, a little elbow grease, and, sometimes, a few cut corners.

The trouble with cutting corners is that once you start to cut them, then get hard to uncut. The corner cutting gets baked into your business model. At some point, the cost of fixing the corner cutting exceeds what you think you can spend on it.

Some corners are worse to cut than others. If a business has gotten in the habit of having less money in cash reserves than it should, they may get away with that. If, on the other hand, like the folks in the First Circuit's opinion in United States v. Wu, they skip getting licenses which are necessary for their import/export business to not be a crime, it can be a little worse.

1402681_great_wall_china.jpgAlex Wu and Annie Wei ran a business that sold things to folks in China. Specifically, they sold sophisticated electronic components.

As it happens, there are rules about when you can send sophisticated electronic components out of the United States. Our federal government would prefer to have items that could have a military application, even if they can also have a nonmilitary application, from going to a foreign country that might use those things to do us harm.

Mr. Wu and Ms. Wei's company started small - as many do. By 2007, the company had five offices - three in China, one in the U.S., and one in Hong Kong - and 200 employees.

At some point in 1996, someone at the company printed a few regulations from the Commerce Department on Export Controls and placed them in a file at the company.

In 1997, Ms. Wei told Mr. Wu that she had mentioned to a potential vendor that she was selling things to China. The potential vendor refused to sell to her. She told Mr. Wu that the "'big lesson' from this 'mistake' was to avoid providing 'extra' information to vendors."

Over time this lesson proved harder to follow as more and more vendors asked follow up questions about where the parts were going.

Ultimately, after shipping millions of dollars of equipment overseas, the two were indicted.

They were charged with - and later convicted of - a number of offenses, including:

The Munitions List Counts: Both Wu and Wei were convicted on two counts for, on two occasions in June 2006, exporting to China without a license "phase shifters" that are designated as defense articles on the U.S. Munitions List, 22 C.F.R. pt. 121.

There were also a number of other counts, not relevant to the issue they won on (but interesting if you're into this kind of case).

The two Munitions List counts involved exports of "phase shifters". According to the First Circuit,

Two waves are said to be "out of phase" when they have the same frequency but reach their peaks at different points. A phase shifter can change the phase of one of the two waves so that the waves exactly line up with one another (or, vice versa, so that waves that were previously "in phase" no longer line up with one another).

The Munitions List is a list of things that are munitions, and, hence, can't be exported to certain countries without a license. The list is not a list of names of items, rather it's a list of descriptions of kinds of things. So, to paraphrase an Easterbrook opinion, the list would prohibit bicycles, rather than a specific make of Huffy.

If you're not sure if something is on the list, there's a process where you can ask the State Department.

The government said the phase shifters were on the list. Mr. Wu and Mrs. Wei said they weren't.

The government went and asked the State Department if phase shifters were on the list when they were exported by Mr. Wu and Mrs. Wei's company. The State Department said they were.

The district court instructed the jury that it had to credit the State Department's determination - after all, it's the State Department.

This, the First Circuit held, was error. Whether something is on the Munitions List is an element of the crime. If the jury doesn't get to decide it, that's a serious problem. Even if it's really complicated:

the government may not decide for itself that some prior act by a criminal defendant violated the law, and thereby remove that determination from the province of the jury.

The government tried to argue that the two really thought they were doing something wrong - they tried to shield the final destination of the phase shifters from others - but, as the court of appeals pointed out:

even if the jury found that Wu and Wei believed that phase shifters fell within the Munitions List restrictions, it would still have to conclude that the phase shifters actually did fall within the Munitions List restrictions (regardless of Wu and Wei's beliefs).

The case was remanded for resentencing - because the convictions on a number of other charges still stand.

April 22, 2013

Short Wins - A Miranda Violation and Two Fraud Convictions Vacated

Last week was a great week for folks appealing a federal conviction.

In United States v. Garrido and again in United States v. Cone fraud convictions were reversed by the Ninth Circuit and the Fourth Circuit. Separately, in the Ninth Circuit, a conviction was reversed and remanded for a Miranda violation in United States v. Barnes.

There was also a bit of news in the continuing budget problems plaguing federal defender's offices - two federal judges wrote a nice op-ed in the Washington Post about the problem.

I was lucky to see Stephen Bright speak at the annual D.C. Judicial Conference on Friday - he was, as one would expect, inspiring. He blamed the current FPD budget woes on the decision to let federal defenders be under the judiciary, instead of be their own independent body.

He also had a nice story about the Attorney General, to mark the 50th anniversary of Gideon, calling a number of folks in the indigent defense community in for a meeting. After acknowledging that there's a crisis in indigent defense in this country, Mr. Holder announced a number of grants that DOJ was going to award to help defense lawyers. Stephen Bright, totaling the amount that was being promised, realized that, at $10 million, it was approximately 10% of what DOJ spends on conferences for prosecutors in a year.

That's change you can believe in.

To the victories!

1155650_berlin_siegessule.jpg1. United States v. Barnes, Ninth Circuit: Appellant was convicted of distributing controlled substances. The district court erred in denying his motion to suppress his confession, which was made during a meeting with FBI agents and a parole officer. Because the agents deliberately delayed giving Miranda warnings to induce appellant's cooperation, the warnings that were given were too little, too late. Because the court's failure to suppress the statements, which were central to appellant's conviction, was not harmless, the conviction was reversed.

2. United States v. Cervantes, et al, Fifth Circuit: Appellants Cristobal Cervantes and Luis Alvarez were convicted of, among other things, conspiracy to possess a controlled substance with intent to distribute and possessing a firearm in furtherance of a drug trafficking crime. The district court applied a two-level sentencing enhancement for firearm possession to appellants' conspiracy convictions. This was inappropriate double punishment because they were also separately sentenced for possession of a firearm in charge of a drug trafficking crime. As a result, the sentences were vacated and the case remanded for resentencing.

3. United States v. Cone, Fourth Circuit: Donald Cone and Chun-Yu Zhao were convicted of charges arising out of their scheme to import and sell counterfeit pieces of computer equipment. Because the government's "material alteration" theory of criminal liability did not make what appellants did a crime under the federal statute, Ms. Zhao's substantive counterfeiting charge and money laundering charges, as well as both of appellant's conspiracy charges, were vacated. Because the evidence was insufficient to support Ms. Zhao's conviction for criminal counterfeiting, that conviction was also vacated. For these reasons, appellant's sentences were vacated and the case remanded for resentencing.

4. United States v. Garrido, Ninth Circuit: Albert Robels and George Garrido were convicted of charges arising out of schemes to award city contracts to specific companies. Because their honest services fraud convictions were based on an unconstitutional theory of a failure to disclose a conflict of interest, they were reversed. Because two of Mr. Garrido's convictions were not based on sufficient evidence, those were reversed as well. Mr. Robles' money laundering convictions were reversed because they were based on the flawed honest services fraud convictions.

5. United States v. Hargrove, Sixth Circuit: Appellant pled guilty to possession of child pornography and was ordered by pay restitution. Because the district court erred in ordering restitution under 18 U.S.C.§ 2259 without requiring the government to demonstrate that any of the losses sustained by the victims were proximately caused by appellant's offense, the order was vacated and the case remanded for further proceedings.

6. United States v. Trujillo, Ninth Circuit: Appellant was convicted of conspiracy to possess and possessing with intent to distribute cocaine. The district court erred in denying appellant's second motion under 18 U.S.C. § 3852(c)(2) to reduce his sentence, as there is no jurisdictional bar to entertaining a second motion. Further, the court erred in failing to explain at all its rejection of appellant's arguments based on all of the factors in 18 U.S.C. § 3553(a). For these reasons, the district court's order was vacated and the case remanded.

7. United States v. Zehrung, First Circuit: Appellant pled guilty to violating the federal healthcare fraud statute. Her sentence was enhanced under U.S.S.G. § 3B1.3 for abusing a position of trust. Because the record does not reveal the basis for this enhancement, remand was required for further findings about whether the enhancement applies.

April 16, 2013

The Sixth Circuit On Why A False Statement Charge In A Real Estate Scheme Requires More Than Just A Misleading Check

Bernard Kurlemann may have done many things - he borrowed millions to build a pair of houses in Mason, Ohio, for example - but he did not make a false statement to a bank.

And the Sixth Circuit, in United States v. Kurlemann, held that the district court was wrong to instruct the jury that it could convict him for anything less.

1418355_flag_blowing_in_the_breeze.jpgThe Costs of Owning Expensive Real Estate

If you believe the government's evidence against Mr. Kurlemann at trial, he worked with a realtor - Eric Duke - to arrange for two straw purchasers to buy his two million dollar homes.

It's expensive to carry such homes, you see. He really wanted out from under the mortgage payments.

The trouble is that the banks who were lending the money to the purchasers were uncomfortable with a down payment that came from the seller, Mr. Kurelmann.

And the straw purchasers were uncomfortable using their own money, because, well, they were straw purchasers.

So, Mr. Kurlemann created documents which were true enough, but that created an impression of something that was not true.

For example, one of the homes was described as having a $280,000 down payment, paid to Mr. Kurelmann. It was true that the buyer had made a $280,000 payment to Mr. Kurelmann - the buyer took a $280,000 cashier's check given to him from an entity controlled by Mr. Kurelmann and swapped it for another $280,000 cashier's check payable to another entity controlled by Mr. Kurlemann. Mr. Kurlemann accepted the second cashier's check as a down payment, and a copy of the check was sent along as proof of payment of the down payment.

So, no false statements were made, but what was provided was intentionally misleading.

As the Sixth Circuit (in an opinion written by Judge Jeffery Sutton, who is a fun writer, whatever else is true of him) summarized what happened next:

The predictable, perhaps inevitable, happened. Both buyers defaulted on their loans. The bank investigated, and federal prosecutors filed a raft of charges against Duke and Kurlemann. Duke pled guilty to seven counts, including loan fraud and making false statements to a lending institution, and agreed to testify at Kurlemann's trial. A jury convicted Kurlemann of six counts, including making false statements to a lending institution, see 18 U.S.C. § 1014; and committing bankruptcy fraud, 18 U.S.C. § 157. The district court sentenced Kurlemann to concurrent 24-month sentences, one for the false-statement convictions and one for the bankruptcy-fraud convictions, and ordered him to pay $1.1 million in restitution.

The False Statement Jury Instruction That Was So Much More

Mr. Kurlemann's jury was instructed that, for purposes of a false statement charge,

[a] "statement may be false," according to one of the jury instructions in Kurlemann's case, "when it contains a half-truth or when it conceals a material fact."

That is not the law.

The opinion quotes the lengthy text of 18 U.S.C. § 1014 - which, seriously, is long - and summarizes it with:

That is a long way of saying that making a "false statement or report" to a bank in order to get a loan is prohibited. And that is a long way of not saying that the statute prohibits "half-truths," "material omissions" or "concealments," which takes us to the nub of the matter. Whether made orally or offered through a written report, a "false statement" must be that--a statement, a "factual assertion" capable of confirmation or contradiction.

Here, because, for example, the check was merely misleading, not actually false, it wasn't a false statement.

An omission, concealment or the silent part of a half-truth, is not an assertion. Quite the opposite. Omissions are failures to speak. Half-truths, in which the speaker makes truthful assertions but conceals unfavorable facts, amount to one type of omission. Concealment, in which the speaker says nothing at all but has a duty to speak, amount to another. No doubt, both types of omissions hold the potential to mislead and deceive. But § 1014 covers "false statements." It does not generally cover misleading statements, false pretenses, omissions, schemes, trickery, fraud or other types of deception.

Because of the error in the jury instruction, Mr. Kurlemann's false statement conviction was vacated and the case was remanded.

And, seriously, this post doesn't do justice to how much fun this opinion is to read. It's nice to see judicial snark doled out for a win for a guy who is accused of a crime.