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December 11, 2013

The D.C. Circuit Holds That A Judge In D.C. Cannot Authorize A Bug in Maryland

The United States government thought that Lonnell Glover was a drug dealer. They tapped his phone, but he spoke in code so they couldn't get any evidence on him that way.

The government knew that Mr. Glover liked to talk in his truck, as so many Americans do. So they decided to get authorization from a judge to put a bug - a little microphone - in his truck.

The bug was authorized by a federal judge in Washington, D.C. The truck, at the time, was at Baltimore Washington International Airport (or, more accurately, Thurgood Marshall Baltimore Washington International Airport).

bug-1411396-m.jpgThe bug picked up some conversations, not in code, that strongly suggested Mr. Glover is a drug dealer. He was convicted, and, on appeal, challenged the validity of the wire tap because it was authorized by a federal judge in D.C. for a car in Maryland.

The D.C. Circuit, in an opinion by Senior Judge Silberman, reversed, in United States v. Glover.

Eighteen U.S.C. section 2518(3) allows a federal district judge to:

"authoriz[e] or approv[e] interception of wire, oral, or electronic communications within the territorial jurisdiction of the court in which the judge is sitting (and outside that jurisdiction but within the United States in the case of a mobile interception device authorized by a Federal court within such jurisdiction)."

Does this language let a federal judge in Washington, D.C. authorize a wire tape for a wire that's not in Washington, D.C.?

That parenthetical is not a model of clarity. Here's how the D.C. Circuit parses it:

To be sure, the parenthetical phrase is somewhat ambiguous. It seems reasonable to read the words "such jurisdiction" in the phrase as referring back to the jurisdiction in which the judge is sitting; i.e., in this case, the District of Columbia, since the provision mentions no other jurisdiction. It is also possible that the phrase, by implication, refers to the jurisdiction in which the mobile interception device is installed.

So, could the parenthetical be read to say that a federal judge in D.C. could authorize the interception of conversations in Maryland for an investigation being run by the U.S. Attorney's Office in DC? The D.C. Circuit says no - it doesn't work with the rest of the language of the section:

Under either reading, the parenthetical makes clear that a judge cannot authorize the interception of communications if the mobile interception device was not validly authorized, and a device cannot be validly authorized if, at the time the warrant is issued, the property on which the device is to be installed is not located in the authorizing judge's jurisdiction. A contrary reading would render the phrase "authorized by a Federal court within such jurisdiction" completely superfluous.

The government has a response to this.

It argues that:

The government points to a handful of cases in which courts have found that an "interception" under Title III takes place at both the location of the listening post and at the location of a tapped phone. The government argues that in light of these cases, we should recognize that an issuing court has the power to authorize covert, trespassory entries onto private property, anywhere in the country, for purposes of placing surveillance equipment. The only jurisdictional limitation the government acknowledges is that the listening post must be located in the issuing court's jurisdiction.

It's like the argument the government frequently makes about wire fraud venue - any place that the wire goes through is an appropriate location for venue. If you email from California to Nevada, but the email goes through a server in Virginia, the government has argued that you can be tried in Virginia. Though it's a little odder here - the government, of course, controls where the listening post sits.

The D.C. Circuit doesn't go along with the government here - noting that the "listening post" language is just not in the statute.

Finally, the government asks the Court to ignore the jurisdictional problem because of the "good faith" exception to the warrant requirement. The D.C. Circuit gives this argument short shrift:

The government's last refuge is a plea that we recognize the government's "good faith" and, therefore, import a good faith exception to Title III's remedy of suppression. The Supreme Court has done so regarding Fourth Amendment violations, see United States v. Leon, 468 U.S. 897, 911 (1984), where there is no explicit textual remedy. Here, of course, Congress has spoken: The statute requires suppression of evidence gathered pursuant to a facially insufficient warrant.

The convictions were reversed, and the wiretapped conversations are suppressed.

August 16, 2013

It Doesn't Violate (One) Federal Law To Tip Your State Legislator In Puerto Rico

When you go to a restaurant, you have to pay for the meal - there's a quid pro quo. But you don't have to leave a tip (we're leaving aside situations where you have a large party and they automatically add 18%). A tip you leave because you want to note and appreciate the service you received. Maybe a tip is expected, but a waiter can't sue you for not leaving one.

So too with bribes, gratutities, and law makers. If a member of Congress makes a deal with you where you'll give him $10,000 in exchange for voting for your favorite bill, that's a bribe. But if he votes for your favorite bill and then you send him $10,000 because you're excited about his vote, that's a gratuity.

As the Supreme Court has said,

for bribery there must be a quid pro quo -- a specific intent to give or receive something of value in exchange for an official act. An illegal gratuity, on the other hand, may constitute merely a reward for some future act that the public official will take (and may already have determined to take), or for a past act that he has already taken.

A high-profile case in Puerto Rico highlights the difference - and establishes that, in the First Circuit at least - a gratuity is not a violation of 18 U.S.C. § 666.

Section 666 is the federal statute that prohibits corrupt acts with state and local government actors. It says that any one who is an agent of a state or local government and "corruptly solicits or demands for the benefit of any person, or accepts or agrees to accept, anything of value from any person, intending to be influenced or rewarded in connection with" that person's work as an agent of the government, has violated section 666(a)(1).

Similarly, anyone who "corruptly gives, offers, or agrees to give anything of value to any person, with intent to influence or reward" any one who is an agent of a state or local government violates section 666(a)(2).

The First Circuit held that this language doesn't prohibit mere gratuities.

What Happens In Vegas

Juan Bravo Fernandez - or Mr. Bravo - was the President of Ranger American, a private security firm.

Hector Martinez Maldondad - Mr. Martinez - was a member of the Senate of the Commonwealth of Puerto Rico.

Mr. Martinez was the chair of the Public Safety Committee. In 2005, it was considering some legislation that would have been very favorable to Mr. Fernandez - Senate Projects 410 and 471.

As the First Circuit tells it in United States v. Martinez:

muai-thai-fighting-1-385141-m.jpg

On May 14, 2005, prominent Puerto Rican boxer Felix "Tito" Trinidad was scheduled to fight Ronald Lamont "Winky" Wright at the MGM Grand Hotel & Casino in Las Vegas, Nevada. On March 2, Bravo purchased four tickets to the fight at a cost of $1,000 per ticket. The same day, Martinez submitted Senate Project 410 for consideration by the Puerto Rico Senate. On April 20, Martinez presided over a Public Safety Committee hearing on Senate Project 471 at which Bravo testified. The next day, Bravo booked one room at the Mandalay Bay Hotel in Las Vegas. On May 11, Martinez issued a Committee report in support of Senate Project 471.

I suppose it goes without saying that the trips were really nice.

Both men were charged with a number of things - including charges involving the giving or receiving of a bribe in violation of 18 U.S.C. § 666.

The Jury Instructions

Here's part of how the jury was instructed:

I instruct you that a defendant is not required to have given, offered, or agreed to give a thing of value before the business, transaction, or series of transactions. Rather, the Government may prove that defendant Bravo gave, offered, or agreed to give the thing of value before, after, or at the same time as the business, transaction, or series of transactions. Therefore, the government does not need to prove that defendant Bravo gave, offered, or agreed to offer the trip to Las Vegas before defendant Martínez performed any official action or series of acts.

Of course, if you give someone cash after they perform a service, instead of before, that's a tip, rather than a bribe.

Another part of the instruction makes it a little clearer:

the Government does not need to prove that defendant Martinez solicited, demanded, accepted or agreed to accept the trip to Las Vegas before defendant Martinez performed any official act or series of acts.

Again, this looks a whole lot like the government can get a conviction if there's just some relationship between the money and the official act, rather than that the money caused the official act - which you'd need for bribery.

The government's closing argument didn't walk back from this. The government said:

These instructions clarify that -- that it doesn't matter if the trip was offered before official acts were taken, at the same time official acts were taken, or after official acts were taken, because the crime is offering or accepting the trip with intent to influence or reward.

These instructions, on these facts, allowed the First Circuit to conclude that the jury was instructed that Mr. Martinez or Mr. Bravo could be convicted if they merely received a gratuity, rather than a bribe.

Does section 666 criminalize gratuities?

The First Circuit said yes.

The statute criminalizes anyone who gives something to a state legislator (and others) with an intent to "influence or reward" that person. A number of circuits have held that the "or reward" bit of this includes gratuities. United States v. Anderson, 517 F.3d 953 (7th Cir. 2008); United States v. Ganim, 510 F.3d 134, 150 (2d Cir. 2007); United States v. Zimmerman, 509 F.3d 920, 927 (8th Cir. 2007).

The other way to read this is that the "or reward" applies to situations where the agreement was made before the official action, but the payment came later. If that's the case - and the deal was hatched, and "reward" just means paying off the previously agreed on sum in exchange for the official act - then this applies to bribes. It doesn't additionally criminalize bribery.

So, if you go into a restaurant and tell the waiter "I'll give you a $20 tip if you never let my iced tea glass get empty" then, because there's a qui pro quo, you've converted the tip from a gratuity to a bribe (except that it's completely legal to refill an iced tea glass frequently).

The First Circuit thought this was a plausible reading - and also noted that if you don't read it this way, it gets odd.

There are different punishments for bribes and gratuities if you're bribing a federal official. If it's a bribe of a federal official, the statutory maximum is 15 years. If it's just a gratuity, then the max is two years.

But for section 666 applying to state officials, any violation has a statutory maximum of 10 years.

The First Circuit thought it would be pretty odd to have such a high statutory maximum if Congress intended section 666 to apply to gratuities, that are normally capped at 2 years for federal officials.

For these reasons, and others, the convictions were vacated.

August 8, 2013

A Brady Violation in Tennessee

Placido Mendoza drove a truck from North Carolina to Tennessee. His passenger was Abel Tavera.

Tavera was a roofer. He later said (to a jury) that he thought he was going to Tennessee to see a construction project.

23.jpgThe truck had construction equipment in it. And a bucket containing nails.

Under the nails was a large quantity of methamphetamine.

Mr. Tavera went to trial and was convicted. His defense was that he didn't know that the truck had meth in it.

The driver, Mr. Mendoza, pled guilty before Mr. Tavera's trial.

Mr. Tavera was convicted and sentenced to 15 years and six months in prison.

After Mr. Tavera's trial, he learned that Mr. Mendoza told the AUSA - Donald Taylor - that Mr. Tavera had no knowledge of the drug conspiracy he was charged with.

AUSA Taylor never told Mr. Tavera's lawyer that Mr. Mendoza said Mr. Tavera isn't guilty.

And, as a result, the jury never heard that the only other guy in the car told the prosecutor that Mr. Tavera didn't know about the drugs.

As the Sixth Circuit said, "Mendoza's statements to Taylor were plainly exculpatory."

The Supreme Court has said that the government has to hand over all information that is exculpatory and that if it fails to do that, the prosecution is fundamentally unfair.

Yet, despite that the law is crystal clear on this, the Sixth Circuit notes that "nondisclosure of Brady material is still a perennial problem, as multiple scholarly accounts attest."

The procedural history is interesting - Mr. Tavera's motion for a new trial based on the Brady failure was still pending when the Sixth Circuit decided, in United States v. Tavera, that the Brady violation was so clear that the case had to go to a new trial.

The government did not think that it had to disclose this information. As the Sixth Circuit frames their argument:

the government argues, and the dissent agrees, that Tavera (although confined to his prison cell) or his lawyer should have exercised "due diligence" and discovered the statements by asking Mendoza if he had talked to the prosecutor.

The court of appeals held that the Supreme Court rejected the "due diligence" exception to Brady in Banks v. Dretke, 540 U.S. 668 (2004) when it noted that "[a] rule thus declaring "prosecutor may hide, defendant must seek," is not tenable in a system constitutionally bound to accord defendants due process."

Moreover, a rule that a Brady violation is excusable if the defendant or defense lawyer just does more work is kind of stupid. As the Sixth Circuit explained:

The Supreme Court's rejection of the idea that the "prisoner still has the burden to discover the evidence" is based in part on the fact that the prosecution has the advantage of a large staff of investigators, prosecutors and grand jurors, as well as new technology such as wiretaps of cell phones. That is one of the reasons that these investigators must assist the defendant who normally lacks this assistance and may wrongfully lose his liberty for years if the information they uncover remains undisclosed. The superior prosecutorial investigatory apparatus must turn over exculpatory information.

My favorite part is the suggestion that Mr. Tavera's lawyer should have interviewed Mr. Mendoza - because there is just about exactly zero chance that any competent lawyer would let his client talk to a co-defendant about the facts of the case while he's trying to work out a deal with the government.

Because "[t]his case shows once again how prosecutors substitute their own judgment of the defendant's guilt for that of the jury" the court of appeals reversed and recommended that "the U.S. Attorney's office for the Eastern District of Tennessee conduct an investigation of why this prosecutorial error occurred and make sure that such Brady violations do not continue."

August 7, 2013

Marriage Fraud Does Not Wait On Lying To Immigration Officials

Does marriage fraud happen in the marriage, or at the wedding? As it happens, marriage fraud, at least according to the Eleventh Circuit, is a bit of a misnomer - it's really better thought of as wedding fraud.

The statute is 8 U.S.C. § 1325(c). It says that it's a marriage fraud whenever "[a]ny individual who knowingly enters into a marriage for the purpose of evading any provision of the immigration laws." The case is United States v. Rojas.

2.jpgYunier Rojas and Soledad Marino were friends. Good friends, but just friends. Apparently not even friends with benefits. Just friends.

Ms. Marino is an Argentinian who had overstayed her nonimmigrant visa. Mr. Rojas, as a friend, married her so that she could stay in the country.

The happy day was April 23, 2007.

Two years later, Ms. Marino sent in an application to adjust her status, as a result of her marriage. She sent in a marriage license from April 2007, as well as a list of addresses where she had lived with Mr. Rojas as a married couple.

Folks from Immigration and Customs Enforcement - ICE - interviewed the couple, together.

The interview didn't go well. As a result of discrepancies between what they said, the interviewers decided to interview the couple separately. The two gave different answers about their marriage. One suspects that they were more substantive than whether her favorite flavor of ice cream was really pistachio.

Finally, the ICE agents told the couple that they thought the marriage was a fraud. Both Mr. Rojas and Ms. Marino admitted that it was.

Mr. Rojas signed a statement saying that he and Ms. Marino were just friends - and that he married her so she could stay in the country.

As often happens when folks volunteer information about their own criminal conduct, law enforcement responded charitably - the government indicted Mr. Rojas.

The indictment came on April 27, 2012.

This was, of course, five years and four days after April 23, 2007 - the day the couple were married.

Mr. Rojas filed a motion to dismiss the indictment, which was denied.

On appeal, the Eleventh Circuit, per curiam, in an opinion that didn't require argument, held that the crime of marriage fraud is completed on the day that the couple enters into the marriage.

This is because the criminal conduct is "knowingly enter[ing] into a marriage" that's a sham to defeat immigration laws.

The government argued that the crime of immigration fraud was not complete until the couple lied to the government about the purpose of the marriage. That, after all, is when the government first learned that a crime had happened.

Since the purpose of entering in a sham marriage - according to the government - is to lie to immigration, the couple has to actually finish lying to immigration for the crime to be done.

The Eleventh Circuit rejected this argument.

To prove marriage fraud, the government must show that (1) the defendant knowingly entered into a marriage (2) for the purpose of evading any provision of the immigration laws.2 See 8 U.S.C. § 1325(c). It is undisputed that Rojas and Marino married on April 23, 2007. It is likewise undisputed that Rojas, at the time he entered into the marriage, did so for the purpose of violating the immigration laws--namely, using the marriage to adjust Marino's immigration status. Filing for immigration benefits may serve as circumstantial evidence of the defendant's unlawful purpose and may lead, as it did in this case, to charges and prosecution for making a false, fictitious, or fraudulent statement to DHS, in violation of 18 U.S.C. § 1001(a)(2). The plain language of the marriage fraud statute, however, cannot plausibly be read to require that a defendant take the additional step of filing for immigration benefits in order for the crime to be complete.

The district court abused its discretion by holding otherwise.

So, Mr. Rojas is free to go. Though I suspect that the statute of limitations on lying to the ICE investigators may not have run yet.

July 19, 2013

It Is Not A Federal Crime To Touch Someone Who Says They Want To Have Sex With You, Even If You're Gay

John Doe (not his real name - but the guy shouldn't be singled out any more than he already has been. If you really want to see his name, it's on the opinion from the Fourth Circuit) wanted to have gay sex with a stranger.

Instead of going online like a normal person, he went to a national park in North Carolina. Mr. Doe was in his sixties - apparently baby boomers don't use Grindr.

Mr. Doe was not the only person in the park looking for men who were looking to have sex with strangers. In response to a complete absence of real crime anywhere in North Carolina, law enforcement was there too.

The law enforcement officer Joseph Darling was on patrol. Darling saw Mr. Doe on a trail hiking toward him. As they passed each other, Darling said hello. Doe grabbed his groin.

1426349_balanced_rock.jpgA few minutes later, Darling saw Doe again on an unofficial trial. They talked about the weather for a few minutes. Then Darling told Doe that Asheville - which they were near - was an open community that is accepting of gay folks.

Mr. Doe said that he "wanted to be F'ed."

Darling indicated that he would be into that. (the record says that Darling said that he replied "okay or yes, or something to that affirmative")

As Darling described it later, he "gave [Doe] every reason to believe that [Darling] was good to go."

Mr. Doe then turned around - they were three feet or so away from each other - and backed into Darling.

With his left hand, Darling reached back and "very briefly" touched Darling's fully-clothed crotch.

Darling responded, "Police officer, you're under arrest."

Mr. Doe was charged with disorderly conduct. He was convicted by a magistrate judge and sentenced to 15 days in jail, along with a fine and a bar on going in a national park for two years.

Disorderly conduct for these purposes is defined by 36 C.F.R. § 2.34(a)(2) (some CFR provisions establish federal crimes in national parks - see 16 USC § 3) and has three elements:

(1) using language, an utterance, or a gesture, or engaging in a display or act; (2) that is obscene, physically threatening or menacing, or done in a manner likely to inflict injury or incite an immediate breach of the peace; and (3) having the intent to cause or knowingly or recklessly creating a risk of public alarm, nuisance, jeopardy, or violence.

The Fourth Circuit vacated this conviction, holding that there's no notice to Mr. Doe, or anyone else, that brief clothed touching of someone's body who says that they want to have sex with you is obscene.

Which is fair enough. The Fourth Circuit made two other great points though.

First, in response to an argument from the government that really this was a prosecution for Mr. Doe wanting to have sex right there on the unofficial trail, the court of appeals noted:

Defendant's conviction was for disorderly conduct--not disorderly thoughts or desires. And it is undisputed that Defendant's actual conduct never went further than his backing up to Darling and very briefly grabbing Darling's clothed crotch. Moreover, even Darling agreed that, "for all [he] knew, [Defendant] could have very well intended for [the intercourse] to happen at [Defendant's] house." J.A. 88. And such private sexual conduct would, of course, have been perfectly legal. As the Supreme Court pronounced a decade ago, "[l]iberty presumes an autonomy of self that includes freedom of thought, belief, expression, and certain intimate conduct" and "allows homosexual persons the right to" engage in consensual intimate conduct in the privacy of their homes. Lawrence v. Texas, 539 U.S. 558, 567 (2003).

Finally, the Fourth Circuit said the whole point of the notice requirement was so that the government can't just make up crimes to punish people for. (for an excellent National Law Journal article on this, go here)

Yet this looks like exactly what you'd expect can happen from government enforcement of loosely defined laws - the government uses them to bully unpopular groups.

the facts of this case illustrate the real risk that the provision may be "arbitrar[ily] and discriminator[ily] enforce[d]." Hill, 530 U.S. at 732. The sting operation that resulted in Defendant's arrest was aimed not generally at sexual activity in the Blue Ridge Parkway; rather, it specifically targeted gay men. Perhaps not surprisingly, then, the all-male undercover rangers arrested only men on the basis of disorderly homosexual conduct.

The Fourth Circuit also shot down a government argument that this was motivated not by hatred of gay people, but by citizen complaints:

If the public is . . . not similarly troubled by a woman propositioning her boyfriend for sex and then briefly touching his clothed crotch, there would exist no citizen complaint and no related sting, even for otherwise identical heterosexual conduct. Simply enforcing the disorderly conduct regulation on the basis of citizen complaints therefore presents a real threat of anti-gay discrimination.

Also the Fourth Circuit determined that touching someone who says they want to have sex with you is not physically menacing - the other prong of the disorderly conduct regulation.

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 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 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 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.

April 14, 2013

Not All Violations Of Laws Are Crimes; The Eleventh Circuit Vacates A Conviction For An Illegal Food and Drug Practice That You Can't Be Convicted For

United States v. Izurieta is an odd opinion. Turns out the Eleventh Circuit was a very good defense attorney in this case.

Two brothers - Yuri and Anneri Izurieta - ran an import/export business. They brought food into the United States from Central America.

999830__3.jpgThey were charged with not following FDA procedures when they brought food into the country that - according to a trial stipulation - contained e coli and salmonella.

They were convicted at trial.

They appealed and raised some interesting issues - a Confrontation Clause challenge, a challenge to some of the prosecutor's statements during the trial, and an issue about how the sentence was calculated.

Everyone showed up for oral argument ready, presumably, to talk about these issues. The briefs had been filed. The issues were clear. I'd like to think the defense lawyer was wearing a new suit.

Then, at oral argument, the Eleventh Circuit panel asked whether the indictment in the case actually set out something that is a violation of the criminal law of the United States.

As it happens, it didn't.

So, there's a practice pointer for defense lawyers - check to make sure that an indictment accuses the person charged with something that is actually a crime.

Here are the details.

The brothers were charged with seven counts:

Count 1 charged a conspiracy to unlawfully import in violation of 18 U.S.C. § 371. Counts 2 - 7 charged the Izurietas with the failure "to redeliver, export, and destroy with FDA supervision" five shipments.

More specifically, Counts 2 through 7 charged a violation of 18 U.S.C. § 545, which says,

Whoever fraudulently or knowingly imports or brings into the United States, any merchandise contrary to law, or receives, conceals, buys, sells, or in any manner facilitates the transportation, concealment, or sale of such merchandise after importation, knowing the same to have been imported or brought into the United States contrary to law . . . Shall be fined under this title or imprisoned not more than 20 years, or both.

So the "contrary to law" part is really important.

Here, the brothers violated an FDA regulation which provided for civil, but not criminal penalties. Does section 545 convert the violation of that regulation into a crime?

The Ninth Circuit had previously weighed in on this in 2008 in United States v. Alghazouli, 517 F.3d 1179, 1187 (9th Cir. 2008) and found that section 545 doesn't do the alchemy of converting not criminal regulations into criminal ones.

There, relying in part on an 1892 Supreme Court case that held that "[i]t is necessary that a sufficient statutory authority should exist for declaring any act or omission a criminal offence" in the course of striking down a conviction for violating a bookkeeping regulation under the Oleomargarine Act (which, seriously, sounds insane. You should read more about it here and here).

The Fourth Circuit, on the other hand, held in United States v. Mitchell, 39 F.3d 465 (4th Cir. 1994), that section 545 criminalizes the violation of otherwise noncriminal regulations when the underlying regs are "legislative" in nature because, really, we're not going to lead the world in prison population without everyone doing their part.

The Eleventh Circuit ragged a bit on the Ninth Circuit's opinion, then noted that

lenity remains an important concern in criminal cases, especially where a regulation giving rise to what would appear to be civil remedies is said to be converted into a criminal law.

Because of ambiguity about whether the regulations that these brothers violated could be prosecuted criminally, the Eleventh Circuit held that, under the rule of lenity, they couldn't be.

The indictment, then, didn't allege a violation of the criminal law. And the brothers' convictions were vacated.

Gentle reader, you may be wondering whether, procedurally, this is kosher. Can it be that an appellate court can first raise whether the indictment charges a violation of the law at oral argument?

It can, because the issue is jurisdictional. If there's no adequate allegation of a crime, then the court of appeals doesn't have jurisdiction to hear the case. So, if there's a jurisdictional error, that can be raised at any point.

As the Eleventh Circuit noted,

In Seher, we held that this court is required to raise sua sponte the jurisdictional issue of whether the indictment sufficiently alleges an offense in violation of the laws of the United States provided the mandate has not issued on direct appeal. Seher, 562 F.3d at 1359.

Also, the opinion was written by Judge Jane Restani, a judge on the United States Court of International Trade, sitting by designation on the Eleventh Circuit. You don't see that very often.

March 24, 2013

Indian Tribal Documents Are Not Documents From The Federal Government Even When The Federal Government Wants Them To Be

My grandmother was part Cherokee. I am, I understand, something around one sixty-fourth Cherokee. And, I understand, for years my grandmother's family tried to hide their Indian status.

They did that for a lot of reasons, but a big one is how the federal government would prefer it if fewer folks were Native American.

Oh, how times change - now the government wants folks to be Indians, as the Ninth Circuit's opinion in United States v. Alvirez shows us.

Every Unhappy Family Is Unhappy In Its Own Way

Edgar Mike Alvirez's family had gotten together to spend some time in each other's company. They were at his mother's house. His girlfriend was there. A woman named Drametria Havatone was also there.

At some point, Mr. Alvirez's mother and Ms. Havatone got to talking about how Mr. Alvirez doesn't help his mother out with her financial needs.

By way of counterpoint, Mr. Alvirez's girlfriend - and another woman - starting punching and kicking Ms. Havatone. Ms. Havatone was forcibly removed from the house by the two women.

She fell to the ground. If you believe what the jury did, as she lay there, Mr. Alvirez stepped on her ankle, breaking it badly in several places.

1386479_old_paper.jpgThe Law In Indian Country

Mr. Alvirez was charged with violating 18 U.S.C. § 1153, which is a peculiar statute. Though it's called "Assaults in Indian Country", what it says is that it applies to an assault by an Indian:

Any Indian who commits against the person or property of another Indian or other person . . . assault resulting in serious bodily injury . . . within the Indian country, shall be subject to the same law and penalties as all other persons . . . within the exclusive jurisdiction of the United States.

So, to prove that Mr. Alvirez violated section 1153, the government had to prove that he committed assault resulting in serious bodily injury and that he is an Indian.

The Ninth Circuit explained how proving up Indian status works (internal citations omitted):

We apply a two-prong test to determine if this element has been met. First, the government must prove "that the defendant has a sufficient degree of Indian blood," and second, the government must establish that the defendant "has tribal or federal government recognition as an Indian."

To prove the first part of that, the Ninth Circuit has explained,

To satisfy the first prong, the government need only prove that the defendant has "some" Indian blood as a descendant of an Indian parent, grandparent, or great-grandparent.

One way to satisfy this test is by introducing a Certificate of Indian Blood.

Some Documents Are Better Than Others

At Mr. Alvirez's trial, the government introduced a Certificate of Indian Blood through an agent. It argued that the document, which was issued by an Indian tribe, was self-authenticating under Federal Rule of Evidence 902(1).

Though the district court let the certificate in, on appeal this argument lost. The Ninth Circuit held that a certificate from an Indian Tribe is not self-authenticating. Rule 902(1) lists the entities that can issue a self-authenticating document: "United States; a State of the United States; a commonwealth, territory, or insular possession of the United States; the Panama Canal Zone; and the Trust Territory of the Pacific Islands"

Indian tribes aren't on the list.

The Federal Government Sometimes Wants Indian Tribes To Be A Part Of The Federal Government

The government also argued that tribes are basically a part of the federal government - so tribal documents are basically federal government documents. This, too, was shot down:

Tribes are "sovereigns or quasi sovereigns," Kiowa Tribe of Okla. v. Mfg. Tech., Inc., 523 U.S. 751, 757 (1998), not one of the political entities into which the federal government is divided, see Santa Clara Pueblo v. Martinez, 436 U.S. 49, 56 (1978) ("As separate sovereigns pre-existing the Constitution, tribes have historically been regarded as unconstrained by those constitutional provisions framed specifically as limitations on federal or state authority.").

Because the Certificate came in, it shouldn't have, and it went to whether Mr. Alvirez is an Indian for section 1153 purposes, the conviction was vacated and the case was remanded for a new trial.

This was a cool, tough case - nice work to AFPD Dan Kaplan for the win!

March 14, 2013

If You Transfer Someone's Personal Identity Information, You Don't Necessarily Use It, And They Aren't A Victim Of Your Identity Theft Conspriacy

Erica Hall was an office assistant at an OB/GYN office in Coral Springs, Florida. The job may not have paid well, because Ms. Hall was trying to make some extra cash on the side by selling patient information to some folks who would use it to get fake credit cards.

1385735_sterilisation.jpgMs. Hall was told by the folks the government described as her coconspirators that for every patient's personal information she handed over, she'd be paid $200. If the information was able to be used to create a credit card that could be used, she'd be paid $1000 for that patient information.

Even though Ms. Hall handed over information for between 65 to 141 folks, and that 16 of those people had information that could be used to make fake credit cards, she was only paid $200.

If you can't trust a co-conspirator, who can you trust.

Ms. Hall pled guilty to conspiracy to commit bank fraud, conspiracy to identity theft, and wrongfully obtaining and transferring someone's health information.

When the probation officer wrote her presentence report, she was given a four-level enhancement for the offense involving more than 50 victims.

Ms. Hall objected to the "more than 50 victim" enhancement - she argued that a "victim" for the purposes of the fraud guidelines, is only someone who suffers and actual loss.

The district court didn't agree though. The district court "concluded that the intentional transfer of information in exchange for consideration constituted actual use for the purposes of § 2B1.1(b)(2)(B)."

The Eleventh Circuit, in United States v. Hall, reversed the district court and vacated the sentence based on this application of the number of victims enhancement.

First, as the court of appeals pointed out,

Application Note 4(E) provides that a "'victim' means (i) any victim as defined in Application Note 1; or (ii) any individual whose means of identification was used unlawfully or without authority."

So, when the identity information was transferred, was that a use of the information?

The Eleventh Circuit said no:

When we apply the rules of statutory construction to the enhancement, we disagree with the district court's interpretation. We first consider the plain meaning of the word "used" as elaborated upon in Application Note 4E. As the Supreme Court noted in Bailey, the word "use" means "to convert to one's service," "[t]o employ," "to avail oneself of," and "to carry out a purpose or action by means of." 516 U.S. at 145, 116 S. Ct. at 506. In other words, "use" is the "application or employment of something . . . for the purpose for which it is adapted." Black's Law Dictionary 1681 (9th ed. 2009). "These various definitions of 'use' imply action and implementation." Bailey, 516 U.S. at 145, 116 S. Ct. at 506. On the contrary, the definition of "transfer" is "[t]o convey or remove from one place or one person to another; to pass or hand over from one to another, esp. to change over the possession or control of" and "[t]o sell or give." Black's Law Dictionary 1636. Transfer means something distinctly different than use.

If I transfer my car to you, that doesn't necessarily mean that I use it - I could just sign over the title. So, as the court of appeals found, transferring identity information - as Ms. Hall did - is a separate thing than using identity information - the thing that gets you the enhancement for the number of victims.

And Ms. Hall will go back for resentencing.

March 6, 2013

The Third Circuit Shows How The Sentencing Guidelines For Fraud Are Complicated; Victims and Losses Bamboozle The Government And District Court

The federal sentencing guidelines are probably the most problematic in three areas - fraud, child pornography, and drugs.

Today's case, United States v. Diallo, illustrates two of the big problems with the fraud guidelines. First, they're really complicated - so complicated that federal prosecutors sometimes don't really understand how they work. In this case, the prosecutor at sentencing took a position so clearly inconsistent with the guidelines that the government abandoned it for the appeal.

(An astute reader will notice that this means the district court went along with the federal prosecutor's flawed guidelines understanding. It's a shame, but c'est la guerre.).

Second, the fraud guidelines are driven by what the "intended loss" is. And "loss" for sentencing guidelines purposes is a squishy notion. And squishy notions are bad when you're trying to figure out how much prison time to give someone.

785364_creditcard.jpgCredit Card Problems

Issa Diallo had a problem with credit cards. Sure, like many Americans, he charged more than he should of. Unlike many Americans, he put these charges on cards that weren't issued to him.

He went into a Wegman's (it's a grocery store, for our geographically diverse readers) and bought 26 gift cards with a counterfeit credit card. The next day he came back to do it again and was arrested.

Law enforcement went into his car with a warrant. They found a treasure trove of stolen identity documents:

53 counterfeit credit cards, a counterfeit Louisiana driver's license, 24 gift cards, a Global Positioning System (GPS), a laptop computer, a thumb drive, and a skimming device, which is a hand-held device that copies, stores, and encodes credit card information from a credit card's magnetic strip. A subsequent search by Secret Service agents resulted in the discovery of a second thumb drive and another gift card. Searches of the laptop and thumb drives revealed over 200 compromised Discover, Visa, and MasterCard credit card accounts.

He pled guilty to having counterfeit credit cards under 18 U.S.C. § 1029(a)(3). In the plea, there was no agreement about the number of victims or the amount of the loss. These are, of course, massively important to figuring out the guidelines range under U.S.S.C. § 2B1.1.

What's It Take To Be A Victim?

At sentencing, a Secret Service agent testified that there were credit cards for 51 financial institutions in Mr. Diallo's possession.

There's a four-level guidelines enhancement if there are more than 50 victims.

The government said that meant there were more than 50 victims, so the enhancement for more than 50 victims should apply.

The defense lawyer argued that "victim" for purposes of the number of victims enhancement, means people who actually lost money as a result of Mr. Diallo's criminal conduct.

What's the loss amount?

The Secret Service Agent testified that only $160,000 was actually charged on the cards that Mr. Diallo had. Though when you add up the credit limits for each of the cards, the total amount that could have been charged was $1.6 million.

So, since "loss" for the guidelines purposes means the higher of actual loss or "intended loss" - the amount that a person could reasonably think could have been lost as a result of the office - the government said that Mr. Diallo should have known that the loss could have been $1.6 million.

Mr. Diallo's attorney was able to get the agent to acknowledge that there was no way Mr. Diallo could have known what the credit limit on the cards was absent a subpoena.

The District Court Speaks

These were hotly contested questions. There was testimony and argument. The Third Circuit reports that:

The Court's analysis on these two issues consisted of the following: "The intended loss for credit cards he personally used and the cards he manufactured and provided to others totaled $1.6 million. Over 50 financial institutions were affected by his actions. So obviously it is a very serious offense."

It's not the most satisfying way to grapple with a hotly litigated legal issue.

The Appeal

On appeal, the government - perhaps reading the commentary for the sentencing guidelines that applied to this case relating to the number of victims enhancement for the first time - acknowledged that "victim" means "someone who suffered a loss."

Since not all of the financial institutions had cards that were actually used by Mr. Diallo, there weren't 50 or more companies that were actually harmed. So the government abandoned the "number of victims" argument.

Good on them for admitting their error. Perhaps it would have been better to do that before the sentencing hearing, but better late than never.

Turning to the loss amount issue, the Third Circuit started by setting the stage

This appeal requires us to determine how sentencing courts should calculate what "pecuniary harm was intended to result" from credit card fraud when the fraud's perpetrator did not know the credit limit, which is the potential loss amount from the stolen credit card.

The appellate court reasoned that if the district court had really done a searching analysis and decided that there was a reasoned basis for thinking that Mr. Diallo meant to take the full limit of each card, that could be supported, perhaps, depending on how good the reasoning was.

But that's not what happened here. And the Third Circuit was really not impressed with what the district court did.

from the District Court's statement at sentencing--"The intended loss for credit cards he personally used and the cards he manufactured and provided to others totaled $1.6 million" App. 30-31--we would be speculating as to what evidence or argument was the basis for the District Court's finding that $1.6 million was Diallo's intended loss amount. This type of "speculation 'is inappropriate' in light of the inherently discretionary nature of the sentencing court's decision."

The case was sent back for resentencing.