The Federal Criminal Appeals Blog

If you're reading this at work, you may be committing a federal crime (depending on where you are reading it, and you're employer's policies about reading the internet). Here's hoping you don't get charged!

If you'd willing to brave the threat of Johnny Law, or you're at home, please read on.

Mr. Nosal Wanted To Start A New Company

David Nosal worked at an executive search firm. He left to start a competitor. He had some of his friends log in to his prior employer's computer to download confidential information about that company's business contacts. He used these contacts to launch his new company.

Importantly, the employees were allowed to log on to the database, but the company had a policy that prohibited them from sharing the company's information.

Mr. Nosal was charged in federal court with violating the Computer Fraud and Abuse Act (the CFAA, for those in the business), 18 U.S.C. § 1030(a)(4). He was also charged with a number of other federal crimes.

Mr. Nosal filed a motion to dismiss the CFAA violation. The district court granted it. The government appealed.

In United States v. Nosal, an en banc Ninth Circuit affirmed, in an opinion by Chief Judge Kozinski.

The Computer Fraud and Abuse Act

The CFAA criminalizes accessing a computer in a way that "exceeds authorized access." "Exceeds authorized access," in turn, is a defined term in the statute, in subsection (e)(6):

the term "exceeds authorized access" means to access a computer with authorization and to use such access to obtain or alter information in the computer that the accesser is not entitled so to obtain or alter

Mr. Nosal's friends were allowed to access their company's computer. They simply weren't allowed to share the information that they found on the computer outside of the company. Does such conduct exceed the authorized access as the term is used in the CFAA.

Here's how Chief Judge Kozinski framed the issue:

This language can be read either of two ways: First, as Nosal suggests and the district court held, it could refer to someone who's authorized to access only certain data or files but accesses unauthorized data or files--what is colloquially known as "hacking." For example, assume an employee is permitted to access only product information on the company's computer but accesses customer data: He would "exceed[ ] authorized access" if he looks at the customer lists. Second, as the government proposes, the language could refer to someone who has unrestricted physical access to a computer, but is limited in the use to which he can put the information. For example, an employee may be authorized to access customer lists in order to do his job but not to send them to a competitor.

Of course, the way we interpret statutes these days is clear - if the language is unambiguous, you go with that language. If it isn't, you revert to a number of rules about statutory construction.

The Language of the Statute

The government had to argue that the statute is unambiguous - that it only supports a reading that bars both accessing information that a person isn't allowed to access and using any of the accessed information in a way that the person isn't allowed to.

The court, though, found that the statute can plausibly be read to limit just access beyond that allowed - just going onto a part of a database that a person doesn't have permission to be in.

As the court summarized it,

the government argues that [the company]'s computer use policy gives employees certain rights, and when the employees violated that policy, they "exceed[ed] authorized access." But "entitled" in the statutory text refers to how an accesser "obtain[s] or alter[s]" the information, whereas the computer use policy uses "entitled" to limit how the information is used after it is obtained. This is a poor fit with the statutory language. An equally or more sensible reading of "entitled" is as a synonym for "authorized." So read, "exceeds authorized access" would refer to data or files on a computer that one is not authorized to access.

So, phew, the statutory language is ambiguous. Now we can get to the fun stuff (especially when Kozinski is writing).

How Absurd Is The Government's Reading Of The Statute?

Here's the starting point:

If Congress meant to expand the scope of criminal liability to everyone who uses a computer in violation of computer use restrictions -- which may well include everyone who uses a computer -- we would expect it to use language better suited to that purpose.

Chief Judge Kozinski, in a style reminiscent of his opinion on the Stolen Valor Act, celebrates computer misuse.

Minds have wandered since the beginning of time and the computer gives employees new ways to procrastinate, by g-chatting with friends, playing games, shopping or watching sports highlights. Such activities are routinely prohibited by many computer-use policies, although employees are seldom disciplined for occasional use of work computers for personal purposes. Nevertheless, under the broad interpretation of the CFAA, such minor dalliances would become federal crimes. While it's unlikely that you'll be prosecuted for watching Reason.TV on your work computer, you could be. Employers wanting to rid themselves of troublesome employees without following proper procedures could threaten to report them to the FBI unless they quit.

By way of background, the CFAA has a separate provision that criminalizes exceeding authorized access to any computer that's connected to the internet. That provision, subsection (a)(2)(C), doesn't require that the person have any particular intent. So it doesn't have to be in furtherance of any fraudulent or otherwise wrongful activity.

Though as the opinion points out,

This concern persists even if intent to defraud is required. Suppose an employee spends six hours tending his FarmVille stable on his work computer. The employee has full access to his computer and the Internet, but the company has a policy that work computers may be used only for business purposes. The employer should be able to fire the employee, but that's quite different from having him arrested as a federal criminal. Yet, under the government's construction of the statute, the employee "exceeds authorized access" by using the computer for non-work activities. Given that the employee deprives his company of six hours of work a day, an aggressive prosecutor might claim that he's defrauding the company, and thereby violating section 1030(a)(4).

But, assume the intent requirement isn't there and we're dealing with subsection (a)(2)(C). If so,

[b]asing criminal liability on violations of private computer use polices can transform whole categories of otherwise innocuous behavior into federal crimes simply because a computer is involved. Employees who call family members from their work phones will become criminals if they send an email instead. Employees can sneak in the sports section of the New York Times to read at work, but they'd better not visit ESPN.com. And sudoku enthusiasts should stick to the printed puzzles, because visiting www.dailysudoku.com from their work computers might give them more than enough time to hone their sudoku skills behind bars.

The effect this broad construction of the CFAA has on workplace conduct pales by comparison with its effect on everyone else who uses a computer, smart-phone, iPad, Kindle, Nook, X-box, BluRay player or any other Internet-enabled device. The Internet is a means for communicating via computers: Whenever we access a web page, commence a download, post a message on somebody's Facebook wall, shop on Amazon, bid on eBay, publish a blog, rate a movie on IMDb, read www.NYT.com, watch YouTube and do the thousands of other things we routinely do online, we are using one computer to send commands to other computers at remote locations.

I suppose that's one reason to turn the wireless off on your Kindle at work.

It gets worse though,

Our access to those remote computers is governed by a series of private agreements and policies that most people are only dimly aware of and virtually no one reads or under- stands.

For example, it's not widely known that, up until very recently, Google forbade minors from using its services. See Google Terms of Service, effective April 16, 2007--March 1, 2012, §2.3, http://www.google.com/intl/en/ policies/terms/ archive/20070416 ("You may not use the Services and may not accept the Terms if . . . you are not of legal age to form a binding contract with Google . . . .") (last visited Mar. 4, 2012).9 Adopting the government's interpretation would turn vast numbers of teens and pre-teens into juvenile delinquents-- and their parents and teachers into delinquency contributors.

I suppose I should talk to a criminal defense lawyer before I tell anyone about a Google search I did with my son as a part of his schoolwork (and because we were curious who would win a fight between a shark and an octopus (spoiler alert - the octopus)).

But, the opinion's bottom line is that we're all guilty of stepping over the line - surely this stuff can't be a federal crime?

The Department of Justice's response was familiar - "Trust us". Judge Posner rejected this a few weeks ago. Chief Judge Kozinski does too:

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.

It's a lovely opinion. I could block quote the whole thing.

The Dissent

The dissent, by Judge Silverman, begins in the most curious way:

This case has nothing to do with playing sudoku, checking email, fibbing on dating sites, or any of the other activities that the majority rightly values.

The majority rightly values "fibbing on dating sites"? It must be hard to be in dissent against a writer like Judge Kozinski, but do you really want to concede the point that way?

In any event, the district court was affirmed, and the case remanded so Mr. Nosal could be prosecuted for the remaining counts.

I should note, for readers in the 11th, 5th, and 7th Circuits, that it appears that your federal circuit courts do not agree with Chief Judge Kozinski's analysis. Apparently, in those parts of the country, you might be prosecuted for using your work computer for nonwork purposes.

Perhaps you should have waited to read this until you get home.

Former Congressman William Jefferson, a son of New Orleans, will perhaps be best known for having been found with cash - cold, hard, cash - in his freezer.

He was convicted in the United States District Court for the Eastern District of Virginia of eleven charges in connection with a bribery scheme involving his role as a member of Congress and officials in Africa. In a major coup for his lawyer, he was not convicted of the offense involving the cash found in his freezer.

He was convicted, alas. And, the Fourth Circuit affirmed 10 of his 11 counts of conviction in United States v. Jefferson.

The one count they reversed on, though, is exceptionally interesting (to me).

Count 10 - Wire Fraud

Count ten of the indictment against Mr. Jefferson alleged that he violated the federal wire fraud statute, 18 U.S.C. § 1343.

This count was based on a telephone call from Africa to Kentucky on July 6, 2005. The government alleged that the call was in furtherance of a scheme that was hatched, in part, in the Eastern District of Virginia.

His lawyers challenged whether there was venue for such a call in the Eastern District of Virginia. After all, the call was started in Africa and accepted in Kentucky. That doesn't look like it affects the folks who live near the federal courthouse in Alexandria.

The district court rejected the venue challenge.

A Bit Of Background on Venue in a Criminal Case

In a criminal case, a person's right to proper venue is Constitutional - it's in article III, section 2, clause 3; "The Trial of all Crimes . . . shall be held in the State where the said Crimes shall have been committed." It's also contained in Federal Rule of Criminal Procedure 18.

For many federal criminal statutes, Congress has expressly said where venue lies. Money laundering, under 18 U.S.C. § 1956 is a good example. Congress has said that a money laundering prosecution can go forward in any jurisdiction where the money laundering transaction happened, or where the illegal act that requires money to be laundered was done (assuming the person accused did the laundering).

But, for many federal statutes, there's no explicit venue provision. Wire fraud, as it happens, is one of those statutes.

In that case, the Supreme Court has said that a person can be prosecuted in the jurisdiction where the conduct that is prohibited by the statute took place.

Venue in a Wire Fraud Case

Simple enough. What's the conduct in wire fraud?

Mr. Jefferson's lawyers argued that the conduct for wire fraud is the making or receiving of the wire. That's what "wire fraud" is about - using a wire.

The government, on the other hand, said that the elements of wire fraud are (1) the use of a wire that is (2) in furtherance of a scheme to defraud. Either one of those elements is an act necessary to complete the offense, argued the government. As a result, the government said that if either happened in the Eastern District of Virginia, the prosecution was proper there.

In fairness to the government, the Seventh Circuit has said basically the same thing in United States v. Pearson, 340 F.3d 459 (7th Cir. 2003).

Thinking Up A Fraud Scheme Is Not Conduct

The Fourth Circuit sided with Mr. Jefferson. It held that,

The scheme to defraud is clearly an essential element, but not an essential conduct element, of wire (or mail) fraud.

Picking up the phone and making a call is an act. Similarly, for mail fraud, putting a letter in a mailbox is an act. But planning a fraud scheme, not so much. Quoting a Second Circuit case, United States v. Ramirez, 420 F.3d 134, 144-45 (2005), the court of appeals held that,

devising a scheme to defraud is not itself conduct at all (although it may be made manifest by conduct), but is simply a plan, intention or state of mind, insufficient in itself to give rise to any kind of criminal sanctions.

Because Mr. Jefferson only had a state of mind in the Eastern District of Virginia, and didn't use the phone there - Count 10 was dismissed for improper venue.

The moral of the story is that you can think about fraud where ever you'd like. Just only answer the phone where you want to face a jury.

As frequent readers of this blog know, the Armed Career Criminal Act gets a lot of appellate attention.

Simply put, if you've been previously convicted of a felony, and you're found with a gun, that's a federal crime. Normally, the most you can get for that crime is 10 years.

But, under the Armed Career Criminal Act, if you have three prior convictions for either a crime of violence or a drug distribution offense, then you face a mandatory minimum sentence of 15 years, and a maximum sentence of life.

That's a big change.

As I've written about before (here from the Ninth Circuit, here from the Fourth Circuit, here from the Eighth Circuit, and in two places from the Sixth Circuit, here and here, to suggest a few places to look), what counts as a "crime of violence" is really miles away from clear.

In short, the Armed Career Criminal Act is a mess. What counts as a qualifying predicate offense is light years from clear. And it's a mess that is causing thousands of additional years of prison time for people.

But don't take my word on it; the New York Times recently had an editorial about how wrong the ACCA is.

The New York Times writes that,

Justice Antonin Scalia has called this federal statute unconstitutional because some of its language is so vague that it "permits, indeed invites, arbitrary enforcement." In dissenting in a case last year, he wrote, "Many years of prison hinge on whether a crime falls within" the act.

The Eleventh Circuit addressed whether statutory rape counts as a "crime of violence" under the ACCA in United States v. Owens.

Statutory rape, basically, is the crime of having sex with someone who is too young to consent by law. In Alabama, the state law that matters in Owens, the age of consent is generally 16.

Mr. Owens was previously convicted, many times, for having sex with someone between the ages of 12 and 16 (we know the person was older than 12, because he was convicted of an offense with that age range - presumably having sex with someone younger than 12 has its own separate statutory section, and is punished more severely.

After picking up his statutory rape convictions, Mr. Owens was convicted of being a felon in possession of a firearm.

So, the question is - is statutory rape a crime of violence?

Initially, the Eleventh Circuit said yes. The court of appeals held that statutory rape involves the use of force on the person of another. Here's how the court summarized its conclusion from the prior opinion:

We explained that "the plain meaning of 'physical force' is power, violence, or pressure directed against a person consisting in a physical act." In interpreting the term "physical force" . . . , we noted that "a person cannot engage in nonconsensual sexual penetration with another without exerting some level of physical force." Because under Alabama law second-degree rape is sexual intercourse with a person incapable of consenting to the act, we concluded "that a second degree rape conviction under Alabama law must involve the use of physical force against the person of another."

There's a tidy bit of equivocation on the word "consent" between the second sentence and the third - a fifteen-year old can "consent" in the sense of the second sentence in a way that he can't in the third - but you get the court's idea.

Then the Supreme Court decided Johnson v. United States. As the Eleventh Circuit described the Court's reasoning in Johnson:

The Court reasoned that because "context determines meaning," the phrase "physical force" as used in the statutory definition of violent felony "means violent force - that is, force capable of causing physical pain or injury to another person." The word "violent" connotes "a substantial degree of force," and the implication of "strong physical force" is made even more pellucid by its attachment to the word "felony." "[T]he term 'physical force' itself normally connotes force strong enough to constitute 'power'-and all the more so when it is contained in a definition of 'violent felony.'" Thus, the Court concluded that battery under Florida law did not satisfy the definition of "violent felony"

So, for something to be a crime of violence, it necessarily, after Johnson, has to include violence.

In light of Johnson, the Eleventh Circuit's prior holding in Owens was remanded and the Eleventh Circuit considered it again.

On remand, the Eleventh Circuit changed course.

For this court to uphold Owens's sentence, we would have to conclude [statutory rape] "inherently poses a serious potential risk of physical injury to another" and consequently "qualifies as a crime of violence["] comports with the Johnson Court's definition of "violent felony" under the ACCA. We would be intellectually dishonest if we decided that in the affirmative.

The court of appeals noted that to secure a conviction for statutory rape

the government need only show that the offender is 16 years old or older and engaged in sexual intercourse with a person of the opposite sex who is between the ages of 12 and 16, without legal capacity to consent. See Ala. Code § 13A-6-62. The government is not required to show forcible compulsion

Since violence isn't required for statutory rape to be committed, statutory rape is not a crime of violence.

Mr. Owens is going back for resentencing.

James Kimsey was not a lawyer.

But when Frederick Rizzolo was deep in a hard bit of contentious litigation, James Kimsey wanted to help out. Mr. Rizzolo's lawyers withdrew from the case. Mr. Rizzolo tried to go on without a lawyer, but his efforts were poor. One can imagine that Mr. Rizzolo felt the situation was bleak.

James Kimsey came to the rescue. While not a lawyer, Mr. Kimsey had some prior legal experience - he was previously sanctioned for the unauthorized practice of law. He was also, apparently, willing to work for free.

Mr. Kimsey ghostwrote some of Mr. Rizzolo's pleadings in his civil case. He seemed to be acting a lot like a lawyer. He wrote a summary judgment motion. He cited to Erie Railroad Co. v. Thompkins. I suspect he even wore a blue suit with a red tie.

Unfortunately, Mr. Rizzolo's opposing counsel got wind of the help Mr. Kimsey was providing. He filed a "Motion to Reveal Pro Se Litigant Rick Rizzolo's Ghost Writer."

The Motion to Reveal went to a hearing. A United States Magistrate Judge determined that Mr. Kimsey was ghostwriting pleadings for Mr. Rizzolo. The Magistrate Judge referred a prosecution for criminal contempt to the United States Attorney's Office.

18 U.S.C. § 402

Mr. Kimsey was prosecuted under section 402 - the criminal contempt of court statute. Eighteen U.S.C. section 402 reads:

Any person, corporation or association willfully disobeying any lawful writ, process, order, rule, decree, or command of any district court of the United States or any court of the District of Columbia, by doing any act or thing therein, or thereby forbidden, if the act or thing so done be of such character as to constitute also a criminal offense under any statute of the United States or under the laws of any State in which the act was committed, shall be prosecuted for such contempt as provided in section 3691 of this title and shall be punished by a fine under this title or imprisonment, or both.

The government argued that Mr. Kimsey violated this, by breaking one of the standing local rules of the Court that says that only lawyers can practice law in federal court.

Mr. Kimsey asked for, and was denied, a jury trial. He was convicted. And, in United States v. Kimsey, the Ninth Circuit reversed, and dismissed the criminal contempt charges against Mr. Kimsey.

Mr. Kimsey's case was reversed for two reasons. First, he had a right to a jury trial that was not honored. Second, the Ninth Circuit held that violating a local rule does not subject a person to criminal contempt.

A Statutory Jury Right

Normally, if the most you can receive in prison is six months or less, you do not have a right to a jury trial. The constitutional right to a jury trial only kicks in after you are eligible for a sentence or more than six months.

However, Section 402 refers to 18 U.S.C. § 3691. Section 3691 grants a right to a jury trial. Thus, even though there was no constitutional jury trial right, there was a statutory jury trial right. And, Mr. Kimsey didn't get one.

So the case was remanded for that reason.

There Are Rules and Then There Are Rules

More significantly, though, the court of appeals held that a local rule is not the kind of rule that a person can be punished with criminal contempt for violating.

This was a straightforward question of statutory interpretation - does violating a "rule" mean (a) violating a local rule or a court rule (e.g., the Federal Rules of Civil Procedure) or (b) violating a rule directed at a specific person (or narrowly defined class of persons).

The district court assumed that it meant (a), as had the Ninth Circuit and Seventh Circuits earlier. Though, assuming isn't the same as deciding, so the Ninth Circuit reconsidered the question here. Moreover, the D.C. Circuit had actually decided that "rule" for these purposes means something directed at a specific person.

The court of appeals looked at what the dictionary says -- though sadly the dictionary from the time that section 402 was made law has both definitions. So, the Ninth Circuit had to turn elsewhere.

A Word Is Known By The Company It Keeps

The appellate court, implicitly following up on Judge Posner's observations about statutory interpretation and reading words in context, noted that,

although standing court rules already existed in the early twentieth century,9 and so, based on etymology alone, it would not be inconceivable that § 402's use of the term "rule" referred to them, this possibility is severely under- mined by the application of a basic canon of statutory interpretation: "The canon, noscitur a sociis, reminds us that a word is known by the company it keeps, and is invoked when a string of statutory terms raises the implication that the words grouped in a list should be given related meaning."

Noting that the string of words in section 402 is actually "any lawful writ, process, order, rule, decree, or command of any district court of the United States" and that each of these is an action directed at a person specifically - except perhaps "rule" - the court of appeals read "rule" to mean something directed at a person specifically too.

You Will Not Probably Go To Jail For Using Comic Sans

The court of appeals also reasoned that allowing a criminal contempt prosecution for violating a local rule would lead to a deliciously absurd result:

If "rule[s]" encompass local court rules, then . . . a court would be able to fine or imprison attorneys for, let's say, failing to conform to local rules specifying the width of margins, appropriate typeface, or kind of paper used for pleadings. See, e.g., D. Haw. L.R. 10.2 ("All documents presented for filing shall be on white opaque paper of good quality . . . with one inch margins . . . ."); C.D. Cal. L.R. 11-3.1.1 ("A monospaced [type]face may not contain more than 10-1/2 characters per inch."); C.D. Cal. L.R. 11.3.2. ("All documents shall be submitted on opaque, unglazed, white paper (including recycled paper) not less than 13-pound weight."). It is at least exceedingly unlikely that Congress intended to authorize convictions of criminal contempt for disobeying ministerial, generally applicable requirements forbidding low-quality paper or excessively small type.

Though I suspect some workers in some court's Clerk's offices would not see criminal sanctions for using the wrong font or paper as a bad result.

Deanna Costello's love knew no boundaries. Literally. For years she had a romantic relationship with a man who was not in the United States lawfully. It led to a strong judicial slapdown of the Department of Justice by one of our nation's leading jurists, in United States v. Costello.

Ms. Costello's Boyfriend

Ms. Costello lived in Cahokia, Illinois, perhaps five miles from St. Louis. She lived with a man from Mexico for a year ending in July 2003. That time ended when he was arrested on a federal drug charge. He plead guilty and was sent back to Mexico after his prison sentence.

In March of 2006, Ms. Costello picked her boyfriend up at the bus station in St. Louis. She drove him to her house, where they lived until October 2006. Sadly, he was then arrested on new drug charges, and the couple were again separated. As the court of appeals noted, he "was given a stiff prison sentence."

Ms. Costello was charged with harboring an alien. She went to a stipulated facts trial - basically a trial where she and the government agree what happened, they simply disagree about whether what happened was a crime.

She was convicted. The district court sentenced her to two years probation and a $200 fine.

The Appeal

She appealed. Judge Posner, writing for the Seventh Circuit, reversed, in an opinion as critical of the government as any I've read in a very long time.

Judge Posner concluded, basically, that harboring an alien does not include having a person in the country unlawfully as a live-in boyfriend.

Judge Posner started by noting that "[t]here is no evidence that the defendant concealed
her boyfriend or shielded him from detection" and that, indeed, since he was arrested at her house several times, it's more likely that law enforcement would find him if he was there than, say, at a relative's house.

Or, alternatively,

The defendant in the present case was not trying to encourage or protect or secrete illegal aliens. There is no suggestion that she prefers illegal aliens as boyfriends to legal aliens or citizens. She had a boyfriend who happened to be (as she knew) an illegal alien, and he lived with her for a time.

A Car Ride Is Not Harboring

The district court made much of Ms. Costello having driven the man from the bus station to her house. Judge Posner wasn't impressed with this fact, noting that

the distance was so short--about six miles--that in a pinch he could have walked. And had he wanted to take public transportation he could have used the St. Louis metro transit system; the price of his ticket would have been $2.75. (That is the price today; it probably was lower in 2006.) There is nothing to suggest that the two of them had prearranged the pickup, or that, had she not picked him up, he would have returned to Mexico. (We don't know how long he had been in the United States.)

A car ride is not harboring an alien.

Judge Posner spent considerable time considering the meaning of "harboring" in the statute criminalizing harboring an alien. Judge Posner considered the way "harboring" is used, and the breadth of the anti-harboring statute if "harboring" covers Ms. Costello's conduct.

The Government's View of Harboring Is Absurd

Judge Posner was concerned that the government's view of what counts as harboring sweeps lots and lots of conduct into the criminal law. In perhaps the most awkward - yet at the same time still awesome - sentence he's ever written, Judge Posner asks:

is it likely that Congress intended that parents whose child invites an immigrant classmate who, as they know, is illegally in the country to a sleepover might be branded as criminals even if he didn't accept the invitation, since the statute criminalizes attempts?

The court of appeals also points out the absurd consequences of the government's statutory interpretation,

an illegal alien becomes a criminal by having a wife, also an illegal alien, living with him in the United States; if they have children, born abroad and hence illegal aliens also, living with them, then each parent has several counts of criminal harboring, on the government's interpretation of the statute.

Judge Posner Doesn't Trust The Government

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.

Down with the Dictionary

In perhaps my favorite section of the opinion (though there are many) Judge Posner criticizes the government's use of the dictionary -

"Dictionary definitions are acontextual, whereas the meaning of sentences depends critically on context, including all sorts of background understandings A sign in a park that says "Keep off the grass" is not properly interpreted to forbid the grounds crew to cut the grass.

To try to learn how "harboring" is normally used, Judge Posner turned to Google:

a search based on the supposition that the number of hits per term is a rough index of the frequency of its use--reveals the following:

"harboring fugitives": 50,800 hits
"harboring enemies": 4,730 hits
"harboring refugees": 4,820 hits
"harboring victims": 114 hits
"harboring flood victims": 0 hits
"harboring victims of disasters": 0 hits
"harboring victims of persecution": 0 hits
"harboring guests": 184 hits
"harboring friends": 256 hits (but some involve
harboring Quakers--"Friends," viewed in
colonial New England as dangerous heretics)
"harboring Quakers": 3,870 hits
"harboring Jews": 19,100 hits

It is apparent from these results that "harboring," as the word is actually used, has a connotation--which "sheltering," and a fortiori "giving a person a place to stay"--does not, of deliberately safeguarding members of a specified group from the authorities, whether
through concealment, movement to a safe location, or physical protection.

Because Ms. Costello was not keeping her boyfriend from the authorities - rather she was just keeping him to herself - she was not harboring. She was merely entertaining.

And entertaining an alien is not against the law.

As the internet has made it easier for people to share information - from snarky comments about published criminal cases in the federal circuits, to snarky comments about politics or the Academy Awards - it has made trading child pornography much easier.

Twenty years ago, to trade child pornography, you had to use the mail or meet someone with the same interest. Now, just about any person with an internet connection can find this contraband in less than an hour.

The easy flow and production of child pornography is a serious social problem. My concern is that the only solution we seem to be thinking about is to criminalize the market for it and make the punishments for participating in this market draconian.

A Very Large Opinion

The Eleventh Circuit's opinion in United States v. McGarity is a glimpse into the world of child pornography.

Law enforcement learned of a massive online collective of child pornography users. The ring used a sophisticated web of encryption, changing bulletin boards, and membership tests to weed out law enforcement and communicate with each other.

It had leaders - using names such as "Yardbird" "Helen" "Soft" and "Tex" who enforced security and internal discipline. They also decided who was able to join.

After an investigation into the group, fourteen people were arrested. None of the people arrested was a leader in the child pornography ring - though "Helen" was prosecuted in Britain.

The men prosecuted in the United States received sentences ranging from twenty years to fifty years. The leader of the ring, "Helen," was sentenced in Britain to 12 and a half years.

The court of appeals opinion in McGarity is a massive 130 pages. Much of the case in the district court was affirmed, though there were some defense victories of note.

Obstruction of Justice

All the men charged were also charged with obstruction of justice under 18 U.S.C. 1512(c). The superseding indictment, following the language of the statute, accused the men of trying to obstruct an official proceeding. It did not say what that proceeding was.

The Eleventh Circuit held that this was insufficient. Following an opinion from the First Circuit, the court of appeals held that if the government is going to charge obstruction of an official proceeding, it has to say what official proceeding was obstructed.

This is a neat exception to the general rule that a prosecutor has to merely parrot the statute in order to adequately allege an offense. The Eleventh Circuit said that an indictment that doesn't say what official proceeding was obstructed doesn't provide enough notice of how the law was broken. This is fair enough - it's just also true of, say, 75% of the indictments that come out of a federal grand jury.

It's a step in the right direction at least.

Those convictions were vacated and that count of the superseding indictment was vacated.

CEE Requires Three

Finally, all of the men accused were convicted of a violation of statute that criminalizes participating in a Child Exploitation Enterprise under 18 U.S.C. § 2252A(g). A CEE charge requires that the jury finds that a person participated in a series of at least three other child pornography offenses.

Yet one of the men accused was convicted of the CEE charge and was only convicted of two underlying child pornography charges. His CEE conviction was vacated.

Conspiracy is a Lesser Included Offense of CEE

Many of the men were also convicted of conspiracy to do things relating to the distribution of child pornography. They were also convicted of the CEE charge. They argued that the conspiracy charge was a lesser included offense of CEE. For that reason, the conspiracy charge should be vacated, under double jeopardy principles. (see this post for a more thorough explanation of the double jeopardy principles involved).

As luck would have it, the guy who had his CEE conviction vacated because he was only convicted of two underlying acts was also convicted of conspiracy. His conspiracy conviction stands.

In an en banc opinion, last week the Ninth Circuit agreed with Occupy Wall Streeters that corporations are not people. Sadly for those in Zuccoti Park, the court of appeals opinion is limited to whether corporations come within the scope of a federal statute that criminalizes sending threats through the mail. Unlike the Supreme Court of Montana, the Ninth Circuit is not going to ignore Citizens United. But, for the American incarnation of Time's Person of the Year, it's a start.

Kurt Havelock

It isn't clear to me whether Kurt Havelock would approve of the larger political point about corporate personhood that his case represents. Clearly, Mr. Havelock has political views.

Five days before Super Bowl XLII, Mr. Havelock bought an assault rife and ammunition. He studied the area around the game. He prepared a media package.

On game day, he finalized and mailed a package to a number of media outlets, including the New York Times, the Los Angeles Times, the Phoenix New Times, and the Associated Press. He also included two music web sites on his mailing list - apparently because he had some trouble running a music venue earlier in his career.

The mailings included a number of statements that he had decided to choose "suicide by cop" and that he shouldn't be resuscitated if that was an option. They also included a "Manifesto." As the Ninth Circuit describes it,

Havelock's Manifesto was, in equal parts, a fractured meditation on the purported evils of American society and a past tense account of the experiences, beliefs, and convictions that set off his anticipated "econopolitical confrontation." Punctuating the Manifesto were references to the Founding Fathers (Benjamin Franklin, Thomas Jefferson), cultural icons (John Rambo, Mad Max, Bugs Bunny), musical groups (Pink Floyd, AC/DC, Bad Religion), video games (Donkey Kong, Grand Theft Auto, State of Emergency), literature (Alice in Wonderland, The Catcher in the Rye), and motion pictures (Road Warrior, Hostel, The Astronaut Farmer). Quotations abounded as well, drawn from such diverse sources as the Hebrew Bible, H.P. Lovecraft, and Pastor Martin Niemöller.

More relevant to what he was seeming to plan, the Manifesto said,

[Y]ou have attacked my family. You have destroyed the futures of my children. So now, I will reciprocate in kind. Only mine will not be the slow crush of a life of a wage slave, or of malnutritioned [sic] sicknesses, or of insurmountable debt. It will be swift, and bloody. I will sacrifice your children upon the altar of your excess . . . . . . . So I will make the ultimate sacrifice; I will give my life. And I will take as many of the baneful and ruinous ones with me. . . . I will slay your children. I will shed the blood of the innocent. . . . Perhaps tshirthell.com or rottencotton.com will print up some cool tshirts [sic] like 'I SURVIVED SUPERBOWL XLII.'

Thankfully, sitting in the parking lot outside of the game, Mr. Havelock had a change of heart.

He called his fiancé, and told her he was having bad thoughts. He went to the local police, and surrendered his assault rifle. The police called in the FBI, who took a recorded statement.

The United States District Court and Mr. Havelock

Mr. Havelock was then charged with six counts of mailing threatening communications under 18 U.S.C. § 876(c). He was lucky to have a very good lawyer. His lawyer filed a motion to dismiss the indictment that made two arguments.

He argued that Mr. Havelock wasn't making threats - rather, he was putting events that would have already happened into context. As Mr. Havelock imagined it, he would be dead by the time his packages arrived. He, therefore, wouldn't be in a position to carry out any harm to those who received his letters.

He also argued that his letters were sent to corporations, and that corporations are unable to be the subject of a threat under section 876.

The district judge denied the motion. Mr. Havelock was convicted at trial. He was sentenced to 366 days in prison - a year and a day.

He appealed, raising the same issues that were in his motion to dismiss.

The Ninth Circuit

In both a panel opinion and in the en banc opinion, the court of appeals resolved the appeal, and dismissed Mr. Havelock's conviction, on the basis that he threatened corporations, and corporations are not people for purposes of the federal threats statute. Neither the panel nor the en banc court addressed Mr. Havelock's other issue.

Section 876 makes it a crime to mail a communication "addressed to any other person and containing any threat to kidnap any person or any threat to injure the person of the addressee or of another."

The en banc court noted that "person" has been restricted to just natural persons in other contexts. For example, when talking about who gets to file in court for free because they are too poor, the Supreme Court has said that only natural people get that benefit, despite the statute's use of the term "person" to say who can file for free.

So, the court reasoned, it's possible for "person" to mean just humans and not corporations in a federal statute. The court of appeals then turned to section 876 and how it uses the term "person." The court noted that,

The term "person" is used no less than twelve times in § 876. See 18 U.S.C. § 876. The term is used in various associations, including: "release of any kidnapped person," "any threat to kidnap any person or any threat to injure the person of the addressee or of another," "the reputation of a deceased person, or any threat to accuse the addressee or any other person of a crime." See id. These associations clearly require that "person" mean a natural person. It simply makes no sense to threaten to kidnap a corporation, or injure "the person" of a corporation, or talk about a deceased corporation.

Based on that, the Ninth Circuit concluded that the same term - "person" - should mean the thing each time it is used in the statute. Because it clearly means "natural person" then a threat to a corporation doesn't count.

Mr. Havelock's conviction was, thus, vacated.

What Do We Do With This?

Perhaps Mr. Havelock was simply lucky that he didn't plan to shoot up the Super Bowl with any other person. Federal conspiracy law would have allowed him to be charged for conspiracy for what he did in planning this and putting the letters in the mail - as long as he worked with someone else to do it.

But without a conspiracy, mailing threatening letters seems an odd thing to charge.

Looking at the facts of Mr. Havelock's conduct, at least as presented in the Ninth Circuit's opinion, it doesn't look like he committed this crime. His letters were meant to go out after he already thought he'd be dead - how can that be a threat?

Indeed, what crime did Mr. Havelock commit? I get that no one likes his behavior - surely the jury verdict was prosecution-friendly jury nullification - but if we're not going to criminalize thoughts (as we shouldn't) and we're going to have the gun laws we have, then mentally unstable loners may just get to sit with a gun outside the Super Bowl thinking murderous thoughts.

Perhaps one of the most celebrated charging strategies by the federal government was to investigate and charge Al Capone with tax evasion. The feds weren't really after him for tax crimes - they wanted Al Capone because he was a mobster. Yet by charging the tax offense, the federal government was able to get a conviction that stuck.

Yet the government runs a risk when it charges an auxiliary crime - one that isn't the main offense that they're targeting but, rather, something that derives from it.

The Fifth Circuit's recent opinion in United States v. Harris illustrates this point.

Two men, named Harris and Miller, were involved in some drug transactions between Texas and California. No, not cocaine or marijuana, these guys were trafficking in codeine cough syrup. [FN1]

Instead of being charged with drug trafficking, they were charged with money laundering for paying for the drugs, under 18 U.S.C. § 1956.

Money laundering, as relevant to this case, is basically when a person participates in a financial transaction to conceal that the money in the transaction came from some illegal activity.

The government's theory, from its opening statement, was that,

In any drug transaction there are drugs going one way and money coming back the other way. That's the nature of a drug transaction. Now, because drug transactions are illegal, they have to be concealed by those people who are participating in them. The people who are transporting and distributing the drugs have to conceal their actions. Likewise, the people that are paying the money, transporting the money and distributing the money have to conceal their actions. That's the nature of drug transactions, that they have to be concealed from law enforcement, both the drugs and the money.

The government's theory was that because the money was sent to pay for the drugs, the folks who sent the money engaged in money laundering.

Miller and Harris were both convicted at trial. Miller was sentenced to 252 months in prison, or 21 years. Harris was sentenced to 293 months, or more than 24 years.

The Fifth Circuit reversed, and rejected the government's theory for what makes money laundering.

In essence, the court of appeals held that when the transfers of money are a part of the illegal transaction, those transactions can't be money laundering. Money laundering only arises once the illegal transaction is done.

As the court of appeals described it, the evidence that money was sent to purchase drugs does not show that

the funds transferred from Miller to Harris were proceeds of drug trafficking or anything other than payment of the purchase price for drugs. Money does not become proceeds of illegal activity until the unlawful activity is complete. The crime of money laundering is targeted at the activities that generally follow the unlawful activity in time.

And, as a result Mr. Miller and Mr. Harris are now saved decades in prison. And a very aggressive attempt to construe money laundering by the government has been brushed back.

(Hat tip to the White Collar Crime Prof Blog for the heads up on this opinion.)

[FN1] - This may be too much information, gentle reader, but I was recently prescribed codeine cough syrup for a bronchial infection. I'm not sure I see why folks would buy and sell it illegally, but there is likely something I'm missing. Perhaps it's more interesting when you mix it with Four Loco?

For a person convicted of a crime, winning in the Supreme Court of the United States can be a mixed bag.

Sometimes it works out well. Clarence Gideon was acquitted when he was retried, this time with the aid of a defense lawyer. He was also, of course, lovingly portrayed by Henry Fonda in film, and is now perhaps the most often-invoked indigent of the Twentieth Century.

On the other hand, Ernesto Miranda, the man who gave us Miranda warnings, was convicted on retrial after his statement was suppressed. He served 11 years in prison for rape.

Freddie Booker's case turned federal criminal sentencing on its head. Mr. Booker was resentenced after his case rendered the federal sentencing guidelines advisory - he was given exactly the same sentence with the advisory guidelines as with the mandatory ones.

Perhaps that was a harbinger.

Alejandra Tapia won her case in the United States Supreme Court last term. And, happily, yesterday, she found that she'll get some relief from that win.

She was convicted at trial of bringing two undocumented people into the country for financial gain, and of bail jumping - apparently Ms. Tapia did not make it to court for one of the hearings in her case.

She was sentenced to 51 months, the high-end of the applicable guidelines range. The sentencing court said that she had a drug problem and needed treatment while in prison. The sentence he imposed was to help her get that treatment.

Ms. Tapia appealed the sentencing judge's reliance on her need for drug treatment, but the Ninth Circuit affirmed. Ms. Tapia took her case all the way to the Supreme Court. In the Supreme Court, she won.

There, in Tapia v. United States, the Court held that a district judge cannot increase a sentence on a person in order to provide more time in prison to rehabilitate the person.

(Judge Posner has already provided district court judges with a roadmap for how to circumvent Tapia.)

The Supreme Court remanded to the Ninth Circuit to determine whether Ms. Tapia is entitled to relief based on its holding.

On remand from the Supreme Court Ninth Circuit held that Ms. Tapia is entitled to resentencing in United States v Tapia. The district court's consideration of her drug history and need for drug treatment was plain error.

As the Ninth Circuit said, in determining that Ms. Tapia was negatively effected by the sentencing judge's findings:

There is little reason to think that the district judge did not mean what he said in sentencing Tapia. He stated that "the need to provide treatment" was one of the considerations that "affect[ed]" the length of the sentence he imposed. We take him at his word, and hold that Tapia has shown that there is a "reasonable probability that [she] would have received a different sentence" but for the district judge's impermissible consideration of this factor.

So, back to the district court for resentencing for Ms. Tapia. Here's to hoping she avoids Mr. Miranda and Mr. Booker's fates and receives less than her prior 51 months.

Cuba is known for exporting many things, among them cigars, rum, and rumors of Fidel Castro's death.

The Eleventh Circuit's opinion in United States v. Dominguez deals with two of Cuba's most beloved exports: baseball players and asylum seekers.

Wet Foot/Dry Foot

First, a bit of background. As an expression of a reasoned and principled immigration policy, the official position of the United States has been that if someone is trying to leave Cuba and come to the United States, whether or not they are welcome depends on whether they are able to physically make it to U.S. soil.

If a person fleeing Cuba walks up out of the surf onto a United States beach, they are eligible to stay in the country. If the person leaving Cuba is intercepted by the Coast Guard, or Immigration and Customs Enforcement, in the water, they are not allowed to stay. This is called the "Wet Foot/Dry Foot" policy.

This policy has always struck me as the application of the Calvinist idea that the best measure of divine approval of a person is his or her wordly success to immigration policy - we can tell whether you're worth keeping in the United States by looking at whether you were able to make it here. Sensible or not, this is our country's policy. Perhaps we just prefer people who don't require towels.

Gustav Dominguez

Gustavo Dominguez knew this policy. Mr. Dominguez was a professional sports agent who worked with professional baseball players.

Competition for baseball talent is tough. Mr. Dominguez was looking for a new way to serve potential clients.

As a result, he worked with another man - Mr. Medina, who had a career in smuggling - to bring five baseball players to the United States from Cuba by boat. One the first try, the Coast Guard shot out the engine of their boat. The players went back to Cuba.

On the second try, the baseball players made it to the Florida Keys. They arrived on dry land in the United States and were dry foot people for purposes of our government's Wet Foot/Dry Foot policy. The players then traveled to California, where they met an immigration lawyer and played baseball for talent scouts.

Sadly, though three of the players signed minor league contracts, none wound up in the Major Leagues.

Mr. Medina

As the court of appeals opinion describes it,

Medina has lived a life of crime; he has numerous prior convictions for drug trafficking, smuggling, insurance fraud, and money laundering.

As is so often the case, Mr. Medina found himself on the wrong side of a federal investigation. To reduce his time in prison, he shared with federal prosecutors the work he had done with Mr. Dominguez to bring these players to the United States.

The Charges

Mr. Dominguez was charged with smuggling the baseball players into the country, transporting them to avoid immigration officials, and harboring them to avoid detection by the officials.

He went to trial and was convicted of the smuggling, transporting, and harboring crimes under 8 U.S.C. § 1324.

Smuggling

Mr. Dominguez argued that because the U.S. Wet Foot/Dry Foot policy meant that the players would be allowed to stay, he could not be found guilty of smuggling them into the country contrary to immigration law.

The court of appeals disagreed. The court noted that after an amendment, the portion of 8 U.S.C. § 1324 that prohibits smuggling a person into the country,

Section 1324(a)(2) now punishes any person who knowingly brings to the United States an alien while knowing or recklessly disregarding the fact that the alien has not received "prior official authorization to come to, enter, or reside in the United States." The statute explicitly states the offense occurs "regardless of any official action which may later be taken with respect to such alien." 8 U.S.C. § 1324(a)(2).

Thus, as the court of appeals held, the immigration status that matters is not the person's immigration status eventually - even if that status is inevitable - but rather the person's immigration status at the time he or she is brought into the country.

For that reason, the Wet Foot/Dry Foot policy does not allow a person in the United States to, as it were, help dry the feet of someone coming from Cuba. If you're going to make it here, you've got to make it here without help.

Harboring and Transporting

Mr. Dominguez, though, fared much better on his harboring and transporting charges.

Because he brought the players to an immigration lawyer quickly and had them openly auditioning with baseball talent scouts, the court of appeals thought that he simply could not be thought to be secretly transporting or harboring these men from immigration officials.

As the appellate court noted,

the players lived freely and openly. They played baseball, went out with friends, ate at restaurants, and watched professional baseball games. On November 12, 2004, the players were "showcased" in front of scouts from almost every Major League team.
Based on this evidence, a reasonable jury could not find beyond a reasonable
doubt that Dominguez transported the Cuban players from Miami to Los Angeles in order to further their illegal status.

Mr. Dominguez's convictions for transporting and harboring the baseball players were reversed and the case was sent back for resentencing.

Congress is odd. In 1984 it made a law so urgent that some of its language was only just now interpreted.

As a starting point, Congress thinks (or, more accurately, thought) that it's really bad to commit a crime while on pretrial release for another crime. So it passed 18 U.S.C. § 3147.

Here's what section 3147 says:

A person convicted of an offense committed while released under this chapter shall be sentenced, in addition to the sentence prescribed for the offense, to--

(1) a term of imprisonment of not more than ten years if the offense is a felony; or

(2) a term of imprisonment of not more than one year if the offense is a misdemeanor.

A term of imprisonment imposed under this section shall be consecutive to any other sentence of imprisonment.

As I read that, it isn't clear - to me at least - whether section 3147 is a new crime that someone commits when they commit some other crime while on pretrial release* or whether it just enhances the penalty for the crime that was committed.

Though, admittedly, the title of section is "Penalty for an offense committed while on release" which is kind of a big hint.

How to read section 3147 was at issue in the Third Circuit's recent opinion in United States v. Melvin Lewis.

Mr. Lewis was on pretrial release, when he came to be charged with carjacking, possession of a firearm by a convicted felon, and a violation of section 3147. The indictment listed three counts, and a violation of section 3147 was one of the counts.

Mr. Lewis went to trial. He was acquitted of the carjacking offense, but convicted of the felon-in-possession charge. He was also found guilty by the jury of the charge under section 3147.

His guidelines range put him above the statutory maximum for the felon in possession charge. So, the question was, does Mr. Lewis's statutory maximum increase under section 3147(1), or does Mr. Lewis's felon in possession conviction top out at the statutory maximum of 10 years, then he gets whatever he gets for the violation of 3147.

The Third Circuit held that section 3147 is a sentencing enhancement, not a separate crime. It increases the statutory maximum by the amount set out in the section. So, for Mr. Lewis, it increases his statutory maximum to 20 years, instead of the 10 he should have faced on the felon-in-possession offense.

But, because Mr. Lewis was "convicted" of violation 3147, his case was remanded, so that the district court could remove the $100 special assessment - a way of collecting court costs that is levied on every conviction - for Mr. Lewis's conviction for a section 3147 violation.

* Crimes that depend on other crimes being committed may sound odd, but they exist in federal law. There's 18 U.S.C. § 924(c) that makes it a felony with a five-year mandatory minimum for possessing a gun in connection with drug dealing or a violent crime. There's also 18 U.S.C. § 1028A that creates a charge with a two-year mandatory minimum for having anyone's identity information - like a social security number - in connection with any other federal felony. For both a 924(c) and a 1028A, the mandatory minimum sentence is consecutive to the sentence on the underlying crime. These things are vicious.

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

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

The Dream of Home Ownership

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

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

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

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

Closing Costs

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

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

The settlement went smoothly and the couple became happy homeowners.

Trouble Brews

Sadly,

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

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

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

The Appeal

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

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

1. an actual or attempted financial transaction;


2. involving the proceeds of a specified unlawful activity;


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


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

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

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

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

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

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

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

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

(internal citation omitted)

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

 

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

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

People love a criminal defendant who tries to outwit the system. I suspect it says something profound about the American impulse to root for the underdog.* I've written before (here and here) about federal criminal defendants in the Ninth Circuit who have been rewarded by being clever about their cases.**

And, in United States v. Alvarez-Moreno, defense counsel cleverly navigated his client to an appellate issue.

Mr. Alvarez-Moreno was charged with transporting an alien for profit under 8 U.S.C. S 1324.

Two weeks before he was to start a jury trial, Mr. Alvarez-Moreno and the government agreed that the trial could be a bench trial. The court also agreed. (One odd feature of the federal system is that you can only have a bench trial on a felony if the government, the person who would be on trial, and court all agree under Federal Rule of Criminal Procedure 23.).

Everyone came to this conclusion right before trial. In the last minute push to get rid of a jury and go to the bench trial, no one noticed that Mr. Alvarez-Moreno never waived a jury trial in writing as required by Rule 23.

Mr. Alvarez-Moreno was convicted at the bench trial.

After he was convicted, he filed a "Motion to Set Aside Verdict By Trial Court" because Mr. Alvarez-Moreno did not properly waive his right to a jury trial. There's no question but that Mr. Alvarez-Moreno's conviction would be reversed on appeal if allowed to stand.

The district court treated that motion as a motion for a new trial, which it granted. The court set a new trial date.

Here's where things get interesting.

Mr. Alvarez-Moreno filed a motion to vacate the order for a new trial and dismiss the indictment because double jeopardy had attached. The trial court denied the motion.

Mr. Alvarez-Moreno appealed. (Normally, you can't appeal a criminal case until after sentencing. One of the narrow exceptions is for a violation of double jeopardy - the idea is that the harm in a double jeopardy violation is the second trial, so the appellate court will hear the decision before that harm can take place.)

The Ninth Circuit found that a new trial would violate double jeopardy. Jeopardy attached in the first trial when the judge started hearing evidence. Once jeopardy attaches, a person accused of a crime can only be retried - consistent with double jeopardy - in certain narrow circumstances.

One of those circumstances is if the defendant himself asks for a new trial. The district court construed Mr. Alvarez-Moreno's motion to set aside the verdict as a motion for a new trial. The Ninth Circuit said, basically, no. For that reason, a new trial would violate double jeopardy and the Ninth Circuit vacated the court's order granting one.

The appeals court, however, went a little further, denying Mr. Alvarez-Moreno's win much pleasure. The court of appeals directed the district court, on remand, to deny Mr. Alvarez-Moreno's original motion to set aside the court's verdict.

The Ninth Circuit then laid out Mr. Alvarez-Moreno's options:

If Alvarez-Moreno wants to correct the legal error, he can make a proper motion under Rule 33 for a new trial, or he can appeal the final judgment after he is sentenced; in either event, under the principles discussed earlier, he would have consented to retrial. Alternatively, Alvarez- Moreno may view those two routes as merely prolonging the inevitable, and so may decide that he does not want to undergo the stress of another trial. If so, he is, of course, entirely free to forego any Rule 33 motion or appeal and accept the sentence meted out on the basis of the conviction after it is reinstated upon remand. That sentence would not be void, but voidable, and if the sentence is complied with he could not be punished again for the same offense.

Perhaps cleverness has its limits.

 

* Though, as Adam Levin rightly reminds us in The Instructions, "anyone can tell his own underdog story. Be wary of underdogs."

** Why does this stuff only happen in the Ninth Circuit? You almost never see a clever defendant appeal come out in a defense-friendly way in, say, the Fourth Circuit.

The Speedy Trial Act is an odd thing. Normally, a person charged with a federal crime - be it a white-collar crime or a drug distribution charge - has spent less time looking at the government's evidence than the government. Often, a defendant is going to want more time to prepare for trial than the 70 days provided by the Speedy Trial Act, at 18 U.S.C. 3161. (Though not always, Senator Ted Stevens didn't seek more time and that worked out well for him.)

That said, normally the government wants more time too. And, for that matter, the trial court often wants more time. That's likely less the case in, say, the Eastern District of Virginia, but in a number of federal courts around the country - especially as the pace of judicial confirmations slows - the trial judge is hoping that a trial isn't going to happen 70 days into the case as much as anyone.

As a result, in many cases there winds up being a conspiracy between the government, the court, and, sometimes, the defendant to defeat the Speedy Trial Act.

The Act excludes any time that a motion is pending during the 70 day time. So, normally, the defendant files a motion to suppress evidence, or, quixotically, to dismiss the indictment, and that stops the Speedy Trial Clock.

This gets tricky, however, because if the Speedy Trial Act is not complied with, the Act requires that the indictment gets dismissed - though more on that later. So a defendant both wants to stop the clock, and benefit from the clock not being stopped.

In the Eight Circuit's recent opinion in Bloate v. United States, the court of appeals addressed an interesting Speedy Trial Act issue.

Mr. Bloate was convicted and sentenced to 30 years in prison. He filed a motion to dismiss the indictment under the Speedy Trial Act. It was denied. He appealed, complaining about the Speedy Trial Act. His appeal lost. He went to the United States Supreme Court. The Supreme Court held that the Eighth Circuit should not have denied his Speedy Trial Act claim for the reason it did. The Court remanded for the Eighth Circuit to take a mulligan on the Speedy Trial Question.

Here's the timeline for Speedy Trial Analysis - Mr. Bloate was indicted on August 24. His motions were due on September 13. On September 7, he filed a motion for more time that the court granted the same day. On September 25, Mr. Bloate filed something with the court called a "Waiver of Pretrial Motions" - it indicated that he wasn't going to file any pretrial motions (it was well named).

On October 4, the district court had a hearing, where it asked Mr. Bloate if he understood he could file motions and was deciding not to on purpose - this is, whether the waiver was knowing and voluntary. It was, and nothing happened until the government filed motions on February 23 of the next year, which stopped the clock.

There are more than 70 days between August 24 and February 23.

The Supreme Court looked at this timeline and was called to resolve whether the time Mr. Bloate had to prepare pretrial motions, from when the scheduling order issued on August 24 until the court's hearing on October 4 was excludable. In an opinion by Justice Thomas, the Court concluded that it isn't.*

The Eight Circuit then had the case on remand to see if filing a "Waiver of Pretrial Motions" counts as a pretrial motion. If it does, the time while it was pending would be excluded. The Eighth Circuit walks through a number of reasons why it isn't (in the same way that a waiver of a right to a trial is not a trial). The court of appeals concludes that a "Waiver of Pretrial Motions" is not a pretrial motion.

But, just when you thought Mr. Bloate was going home and avoiding 30 years in prison, the Eighth Circuit directed the district court to decide whether Mr. Bloate's indictment should be dismissed with prejudice or without - basically whether the government could just seek a new indictment to bring charges against Mr. Bloate anew.

What do you think the district court will decide?

 

* Justice Thomas's originalism has been the subject of a lot of attention lately, thanks largely to Jeffrey Tobin's piece in the New Yorker. This opinion looks like a kind consequence of originalism - you stick with what the words actually mean, even if they make prosecuting people harder.

Stacy Hunt - a man with multiple prior convictions, who attempted to pick up a package of drugs at an airport in Alaska, flipped on others involved in the drug deal, then fled to California where he was rearrested - appears to have outsmarted the United States Department of Justice and a federal district court judge.

The case is United States v. Hunt, from the Ninth Circuit.

To see how Mr. Hunt was clever, you need to understand two rules of federal criminal law.

First, 21 U.S.C. S 841(a)(1) prohibits possessing drugs with the intent to distribute. The statute prohibits possessing any controlled substance - it doesn't get specific as to the type of drug.

The statutory maximums for section 841(a)(1) for the different kinds of drugs are set out at 841(b). The language is a bit baroque, but, basically, if you violate section 841(a) for possessing cocaine, the statutory maximum is 20 years. If you violate section 841(a) for possessing a Schedule V drug - like codeine , the maximum is 1 year. See section 841(b)(3).

So, to be clear, the first thing you need to know is that the statutory maximum penalty for possession with intent to distribute depends on the kind of drug involved. If it's codeine, the statutory maximum is one year: if it's cocaine, the statutory maximum is twenty-years.

Second, the Supreme Court of the United States held, in Apprendi v. New Jersey that,

Other than the fact of a prior conviction, any fact that increases the penalty for a crime beyond the prescribed statutory maximum must be submitted to a jury, and proved beyond a reasonable doubt.

Mr. Hunt was charged with a violation of 21 U.S.C. S 841(a). He fired his lawyer and handled his case himself. He told the court that he wanted to enter a guilty plea - which is his right. He pled guilty to attempting to possess with intent to distribute a controlled substance.

Every plea has to have a factual basis for the judge to accept it - that is, the judge has to make sure that the person pleading guilty admits facts that meet each and every element of the crime.

Here's how the Ninth Circuit recaps the conversation that the court had with Mr. Hunt to make sure he admitted that he violated section 841(a):

First, in response to the court's inquiry regarding the elements of the offense, the Assistant United States Attorney (AUSA) stated that the government would need to prove at trial that Hunt "attempted to possess a parcel that contained a little over a kilogram of cocaine . . . and that he did so knowingly." Hunt stated that he understood those elements. After a few moments passed, the AUSA stated that he forgot to include the element that "Mr. Hunt attempted to possess that cocaine with the intent to distribute it thereafter." Hunt responded that he understood that additional element.

The court then restated the elements of the offense as follows: "So you attempted to possess cocaine, you knew it was cocaine or some illegal drug, and you did it with the intent to distribute. I guess those are the three elements, okay?"(emphasis added). Hunt replied, "To those elements, yes, I agree." Hunt then asked that the government state the elements one last time. The AUSA responded that the government would have to prove that "Mr. Hunt attempted to possess a parcel which contained a little over a kilogram of cocaine [and] . . . [w]e'd have to prove that Mr. Hunt's attempt to possess that cocaine was done knowingly and then we'd have to prove that he intended to distribute that cocaine after coming into possession of it." Hunt replied, "Yes I understand those elements. As far as the specific amount, I don't have personal knowledge of it . . . as I never opened the package and weighed it, but I do accept responsibility for whatever it was."

After the government stated the facts it expected to prove if the case were to proceed to trial--including that Hunt was found in possession of a package of over 500 grams of cocaine and later admitted that he had ordered the drugs in a written statement--Hunt said, "For the most part, the facts are true. I admit all the elements of 841(a)(1), and also as I said, I did not receive the package and open it, so I have no specific knowledge of what it contained other than it did contain a controlled substance, that I do know, and I did attempt to possess that controlled substance." Hunt also confirmed that he had intended to sell or give away the controlled substance. The court then asked the government, "That sounds sufficient, doesn't it, counsel?" The AUSA agreed that Hunt's admission was sufficient to supply a factual basis for the offense, and the court accepted Hunt's plea.

The presentence report determined that Mr. Hunt's crime involved cocaine. Accordingly, the presentence report found that the statutory maximum was 20 years.

The sentencing court adopted this finding, and determined that a 20-year statutory maximum applies to Mr. Hunt.

Mr. Hunt objected to this determination, and he had this exchange with the sentencing court:

HUNT: Also, when I made my objections, which has been overlooked, I also objected on the grounds that I did not at plea colloquy admit to a specific type of controlled substance, and I only agreed that I attempted to possess a controlled substance.

THE COURT: Right.

HUNT: Not crack, cocaine, or marijuana, or anything like that. I only agree to a Schedule II -- not even a Schedule II. I only agree to a controlled substance. So are you also making a finding for the type of drug also?

THE COURT: Yes, okay.

HUNT: So I'd like to make sure that my (indiscernible) objection is in for not just quantity but also as to type of drugs. And my position is that I should fall back to marijuana for no remuneration, with a statutory max of five years [sic], up -- under (b)(1)(D).

THE COURT: Very well. Boy, you're smart. You've made your record, but I -- you haven't changed my mind.

HUNT: Okay, that's fine.

The sentencing court heard evidence as a part of the sentencing proceeding. Folks testified that the drugs were cocaine. Mr. Hunt was sentenced on the assumption that the statutory maximum is 20 years. The court gave him a sentence of 15 years in prison.

On appeal, the Ninth Circuit found that the district court's sentence is not consistent with Apprendi. Because Mr. Hunt did not admit that the controlled substance was cocaine, rather than, say, codeine, and no jury found that the drugs were cocaine, the statutory maximum cannot be more than one year. As the Court held, "any fact that increases the penalty for a crime beyond the prescribed statutory maximum must be submitted to a jury, and proved beyond a reasonable doubt."

Mr. Hunt's sentence was vacated, and the Ninth Circuit remanded the case with instructions to sentence Mr. Hunt with a statutory maximum of one year.

Related articles

• Different results as Eighth and Ninth Circuits consider different Apprendi claims (sentencing.typepad.com)