The Federal Criminal Appeals Blog

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.

Dawn 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.

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.

The 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.

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.

For 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.

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.

In 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.

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.

Alex 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.

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.

The 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.

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.

They 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.

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.

The 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!

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.

Ms. 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.

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.

Credit 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.

Michael Roussel used to be a Captain in the New Orleans Police Department. As you might expect, he was convicted of bribery.

After his conviction at trial, he went to sentencing. The judge determined that an enhancement for receiving more than one bribe was warranted. The Fifth Circuit, in United States v. Rousel, disagreed.

Synergy

Mr. Roussel was friends with Joey Branch. As a result of Mr. Branch's plea and cooperation agreement with the federal government, one suspects that they are no longer friends.

But back in 2008, Mr. Branch was an entrepreneur trying to place private security guards and Mr. Roussel was a police official with deep connections in a police force that has a tradition of officer's moonlighting as private security guards.

There was synergy in their relationship.

Of course, the thing about success is that one naturally wants it to continue and build. What was once an exciting threshold quickly starts to look like a stale plateau. And so it was with Mr. Branch and Mr. Roussel. Soon, they were working together to try to get more business for Mr. Branch's company. And that involved recorded calls to a confidential informant.

The informant worked for an energy company, and part of his job was to hire security guards during natural disasters. Roussel, Branch, and the informant agreed that uncertified, but falsely represented as certified, guards would be hired by the informant's company in exchange for the three splitting the profits and a fake job for the informant's wife.

Mr. Roussel ultimately gave $1,000 to the informant as earnest money of a sort. He and Mr. Branch were arrested soon after that - no other money was made.

Is Each Payment A Separate Bribe?

At sentencing, the district court determined that Mr. Roussel should receive a guidelines enhancement for being involved in multiple bribes.

Here's what the district court said:

[w]hat was intended was a series of actions over a period of time. This contract was to continue for some period of time in the future . . . . It could not be anticipated exactly when they would occur, but whenever there would be a presidentially declared natural catastrophe or emergency and Entergy would be required to immediately beef up its security force, then . . . Gladius, would be called upon to supply security officers, . . . but in any event, it seems to me that that is very different from a one-time agreement to pay a bribe that is then just paid over in installments. This was going to be a series of actions. Effectively another bribe to be paid every time there was another event that occurred.

If you're bribing a public official and tell him that you're going to give him, say $10,000 for selecting your bid for a federal contract, and you pay him in two installments of $5,000, is that one bribe or two? One can see how this could be a hard question.

Here, though, the Fifth Circuit thought it wasn't that tricky - in counting the number of bribes, you don't look at all the stuff that could have happened if the full deal went through. Instead, you look at what actually happened.

Or, as the court of appeals said

Simply put, the government proved the payment of only one bribe--the $1,000 "good faith" money to Dabdoub. The rest was all speculative.

Mr. Roussel is going back for resentencing.

Someone told the police that Chunon Bailey sold drugs. Worse, he sold drugs and had a gun at his house at 103 Lake Drive in Wyandanch, New York.

That someone was a confidential informant.

The police took that tip and got a search warrant for 103 Lake Drive.

The police were getting ready to go into his house - they had set up outside and were watching it.

They saw Mr. Bailey leave the basement apartment at 103 Lake Drive and get in a car. Two officers followed the car as it drove away. The rest of the search team started searching the house.

A mile away, the cops pulled Mr. Bailey over. They ordered him out of the car and patted him down. They found a ring of keys in his pocket.

They then put him in handcuffs and told him that he was being detained incident to a search warrant at 103 Lake Drive - a mile away.

Inside the house they found a number of things that were unlawful to possess. He was charged in the Eastern District of New York with possessing those things.

Detention Incident to a Search Warrant

Normally, when the police execute a search warrant, they can hold people who are inside the house that's being searched. Even though holding someone is a "seizure" that generally not only allowed under the Fourth Amendment, there's an exception when the person was held while the police execute a search warrant.

Mr. Bailey's case is a little off that mark though.

Sure, if the cops bust in to your house, it makes sense that they'd want to make sure you don't come after them with a gun or take a magnet to all of your hard drives. And the best way to do that is make sure you're not near a gun or a magnet - which will require a little bit of detention.

So courts are sensitive to that and allow the police to detain someone - even though any detention is a "seizure" within the scope of the Fourth Amendment as a part of executing a search warrant. The Supreme Court said that's ok in Michigan v. Summers.

Though, Mr. Bailey's case, the limits of a detention incident to the execution of a warrant grew way beyond what the rule had allowed in the past - following a guy away from his house, stopping him a mile away, and bringing him back just so he could be "incident" to his place being searched.

Nonetheless,

The Court of Appeals for the Second Circuit ruled that Bailey's detention was proper and affirmed denial of the suppression motion. It interpreted this Court's decision in Summers to "authoriz[e] law enforcement to detain the occupant of premises subject to a valid search warrant when that person is seen leaving those premises and the detention is effected as soon as reasonably practicable." 652 F. 3d 197, 208 (2011).

Happily for Mr. Bailey, we have a Supreme Court.

The Court, in United States v. Bailey, held that Mr. Bailey was not detained as a part of a search that was happening a mile away from a place he was trying to leave.

One opinion, written by Justice Kennedy, said this was because the Fourth Amendment balancing of harms that's necessary to figure out if a seizure is "reasonable" cuts against this kind of search. Another opinion, written by Justice Scalia, said this was because Summers announced a bright line rule that just doesn't apply to this case.

But, in the end, Mr. Bailey's detention was not lawful.

The Supreme Court has said that you can never suppress the body of a person accused of a crime - the person's identity is not able to be kept out of evidence, even if that identity is the result of an unlawful arrest or search.

This is a huge issue in illegal reentry cases. If a person is deported then returns to this crime, that's illegal reentry. If the person is deported after having been convicted of certain kinds of felonies - whoa buddy, that's illegal reentry after having been convicted of an aggravated felony.

In light of the Supreme Court's rule about how you can't suppress the body of the person accused, many people who handle illegal reentry cases find them massively depressing. If you can't suppress the person's identity, even if the knowledge comes from an unlawful search, then you've gutted the Fourth Amendment for people accused of illegal reentry.

Yet, in United States v. De La Cruz, the Tenth Circuit said that a motion to suppress should have been granted when the subject of the motion to suppress was whether a man's identification was taken against his Fourth Amendment rights.

Mr. De La Cruz Was in the Wrong Place

Three ICE agents were staking out Gill's Truck Wash in Tulsa, Oklahoma. They were looking for a man who they thought was in the country illegally. The truck wash wasn't open yet.

A car pulled up with tinted windows. A passenger got out. The agents got a one or two second glimpse of the person driving the car.

They decided that the person driving the car may be the guy they're looking for.

They pulled the car over.

The car was not driven by the man they were looking for - instead, it was driven by Enrique De La Cruz.

Mr. De La Cruz was dropping off his brother Armando. In the backseat of the car sat Mr. De La Cruz's wife and his mother in law. They were joined by Armando's wife.

The agents asked Mr. De La Cruz if he was the man they were looking for. They compared the way he looked to the picture they had of the other man. Mr. De La Cruz was not the other man.

The agent, figuring that he had already pulled the guy over, asked Mr. De La Cruz for his identification. Mr. De La Cruz gave them a fake id. They used the fake id to figure out who he is. Turns out he was in the country illegally - after having been previously deported.

The Tenth Circuit

The Tenth Circuit found that this stop and search violated Mr. De La Cruz's rights under the Fourth Amendment.

The interesting part, though, is what they held about whether he's allowed to complain about the stop.

As the Tenth Circuit set it up

In Lopez-Mendoza, a case addressing civil deportation hearings, the Supreme Court noted that "[t]he 'body' or identity of a defendant or respondent in a criminal or civil proceeding is never itself suppressible as a fruit of an unlawful arrest, even if it is conceded that an unlawful arrest, search, or interrogation occurred." Id. at 1039. Lopez-Mendoza, however, does not "exempt[] from the 'fruits' doctrine all evidence that tends to show a defendant's identity." Rather, Lopez-Mendoza's "statement that the 'body' or identity of a defendant are 'never suppressible' applies only to cases in which the defendant challenges the jurisdiction of the court over him or her based upon the unconstitutional arrest, not to cases in which the defendant only challenges the admissibility of the identity-related evidence."

So, Mr. De La Cruz can challenge the admissibility of the fake id at his trial. That fake license was taken in violation of his Fourth Amendment rights, so it won't come in at trial.

Daniel Castro was a high-ranking person in the Philadelphia Police Department. And the Third Circuit's opinion in his case - United States v. Castro - may just be the most awesome published opinion I've seen in months.

Mr. Castro was charged with three separate extortion conspiracies and also with making a false statement to federal agents - a violation of 18 U.S.C. § 1001.

The jury hung on the extortion charges. They convicted on the false statement charge.

He pled to one extortion conspiracy to avoid retrial and the plea agreement had an appeal waiver.

Yet, despite that, the Third Circuit reversed his false statement conviction because the government hadn't proven it. The Third Circuit held that he was so clearly not guilty of making a false statement that it would be a manifest injustice to not reverse on those grounds - so the appeal waiver didn't bar their consideration of the issue.

The (Not) False Statement

Mr. Castro had a friend, Rony Moshe. Mr. Castro lost some money in a bad investment. He thought of his losses as a debt owed to him by the person he invested with - a man named Encarnacion. Mr. Moshe proposed that he could refer some tough debt collectors to help Mr. Castro collect this "debt" from Mr. Encarnacion. Mr. Moshe really went out of his way to try to work with Mr. Castro.

As you may have already suspected, Mr. Moshe was also an FBI informant.

After a lot of back and forth and a lot of regrettable statements on wires, Mr. Moshe gave Mr. Castro some money that he told Mr. Castro came from Encarnacion. In fact, it came from the FBI.

The FBI interviewed Mr. Castro. The asked him if he ever got money from Mr. Encarnacion.

Mr. Castro said that he did not. Though of course he thought that he did. Though he didn't - the money came from the FBI.

His statement that he didn't get any money from Encarnacion was the basis of his false statement conviction.

Failing to Fib

On appeal, Mr. Castro argued that this wasn't a false statement. In fact, it was a true statement - he did not, in fact, get any money from Encarnacion.

Mr. Castro didn't know that the statement was true - he intended to lie. But, despite his best efforts, he failed to fib.

The Third Circuit set out the standard for a false statement prosecution:

To establish a violation of §1001, the government [is] required to prove each of the following five elements: (1) that [the accused] made a statement or representation; (2) that the statement or representation was false; (3) that the false statement was made knowingly and willfully; (4) that the statement or representation was material; and (5) that the statement or representation was made in a matter within the jurisdiction of the federal government.

The second element is plain as day. And Mr. Castro's statement wasn't false. So, the Third Circuit reversed his conviction for making a false statement.

The Government's (Rejected) Arguments

The government was unhappy with this result - Mr. Castro thought he was committing a crime, even if he actually wasn't. The Third Circuit empathized, but disagreed:

In the broadest sense, it is surely so that Castro was morally wrong even if not legally guilty, but our legal system does not convict people of being bad. If they are to be convicted, it is for specific crimes, and the government here undertook the burden of proving that Castro had committed each element of the specific crime set forth in § 1001. It failed to do that.

The government was really unhappy with this result. They argued that there's a "sting operation exception" to the requirement that a person make a false statement for there to be a successful false statement prosecution. Undercover operations do odd things to the truth. Many is the time I've sat with someone after they've been arrested in a sting and the predominant emotion is betrayal. Folks just can't get over being lied to by someone who turned out to be a federal agent.

The Third Circuit didn't much care for the "sting operation exception"

The ready and dispositive response to that argument is that, even if a "sting exception" to the strictures of § 1001 is a good idea, it is simply not in the statute. Congress knows how to pass laws that penalize statements made to law enforcement officers by a defendant who incorrectly believes the statements to be false. Compare 18 U.S.C. § 1956(a)(1) ("knowing" laundering of funds "which in fact involves the proceeds" of a crime), with id. §1956(a)(3) (intentional laundering of funds "represented to be" proceeds of a crime). But it did not do so when it enacted § 1001, and we are not free to amend the law.

In a desperate move, the government then argued that the money really came "from" Encarnacion, even though they came from the FBI.

The Third Circuit's response - "It is not clear how the quotation marks around the word "from" in that sentence help the argument."

Ouch.

As a result, Mr. Castro's false statement conviction was reversed.

So many ways to be wrong, but morally and in terms of what happened. Yet they add up to make something so right.

In a criminal case, most lawyers need to figure out what motions to file. A big part of this is to sit down with the government's evidence and try to figure out what parts of the government's case came from something that violated the constitution.

It's frustrating when some part of the evidence came from a search warrant - challenges to search warrants are tricky, because a judge already signed off on the warrant. It's not to say it can't be done, it's just different than challenging, say, if the FBI ran into a client's office and took a bunch of stuff without a warrant.

Sometimes you can challenge a warrant if the affidavit in support of the warrant clearly didn't establish probable cause to think there was going to be evidence where the cops searched.

The trouble with that is that normally the district court judge won't let you examine any witnesses to rule on the issue - if part of the point of filing pretrial motions is to learn more about the government's case and learn more about what their witnesses are going to be like, then this kind of a challenge to a warrant doesn't get you what you want.

Another thing you can do, though, is challenge the warrant because the cops lied or left something out of the application for the warrant that was really important. This is called a Franks challenge.

As the Seventh Circuit explained in United States v. McMurtrey,

In Franks v. Delaware, 438 U.S. 154 (1978), the Supreme Court held that when a defendant makes a substantial preliminary showing that the police procured a warrant to search his property with deliberate or reckless misrepresentations in the warrant affidavit, and where such statements were necessary to the finding of probable cause, the Fourth Amendment entitles the defendant to an evidentiary hearing to show the warrant was invalid.

So, when is it that a person bringing a Franks challenge has made that preliminary showing? That's the subject of United States v. McMurtrey.

But first, the Seventh Circuit explains what the district court's options are when a Franks challenge to a warrant has been made:

A district court that is in doubt about whether to hold a Franks hearing has discretion to hold a so-called "pre-Franks" hearing to give the defendant an opportunity to supplement or elaborate on the original motion. Though permissible, this procedural improvisation is not without risk, as the sparse case law indicates. In such a pre-Franks hearing, the natural temptation for the court will be to invite and consider a response from the government. However, the court should not give the government an opportunity to present its evidence on the validity of the warrant without converting the hearing into a full evidentiary Franks hearing, including full cross-examination of government witnesses. We emphasize that the option to hold such a limited pre- Franks hearing belongs to the district court, not the defendant. If the defendant's initial Franks motion does not make the required "substantial preliminary showing," the court need not hold a pre-Franks hearing to provide the defendant a further opportunity to do so.

I've never seen a district court order a pre-Franks hearing. Now I kind of want to see one - it looks cool. The government doesn't get to talk, but the defense lawyer does. Awesome. It's like the inverse of a grand jury proceeding.

In Mr. McMurtrey's case, there were two affidavits in support of the warrant. They contradicted each other. So one had to be wrong.

At least one.

So, Mr. McMurtrey made a sufficient showing to get a Franks hearing.

That's not quite what the district court wanted to do though.

As the Seventh Circuit explained it

Rather than hold a full Franks hearing, however, the district court held a truncated pre-Franks hearing. The district court permitted the government to offer additional evidence to explain the discrepancies in the affidavits. That evidence should have required a full Franks hearing, yet the defendant was not permitted full cross-examination on the government's new evidence. The court then relied on the untested government evidence to find that the defendant had failed to make a showing sufficient to obtain a full Franks hearing.

Indeed, the defense lawyer started to cross the cop on his affidavit but was shut down on the grounds that the district court wasn't having a Franks hearing.

Because the court didn't give Mr. McMurtrey his full hearing, the case was remanded and his conviction was vacated.