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The IRS was not amused by 2FT Fast Facts Tax Service, a tax preparation service owned by Sherri Davis (“Sherri”) and by Davis Financial Services, a similar follow-on operation that it contended was run by her son, Andre Davis (“Andre”), although she was its principal. Both concerns filed returns that falsely reported charitable and business deductions. With the aid of LaDonna Davis (“LaDonna”), Sherri’s niece and employee, and as it turned out, star cooperating witness, the Government indicted Sherri and Andre with conspiracy to defraud the United States by preparing and filing fraudulent and false individual income tax returns, in violation of 18 U.S.C. §§ 2, 371. Other counts charged Sherri and Andre with willfully aiding and assisting in the preparation of false returns, in violation of 26 U.S.C. § 7206(2); and Sherri was further charged with filing false individual returns, in violation of 26 U.S.C. § 7206(1) and 18 U.S.C. § 2.

At trial, the Government presented eleven witnesses who testified about Sherri’s preparation of false individual tax returns that claimed huge illicit deductions. LaDonna, for her part, related a story about being trained by Sherri on the niceties of tax fraud, to the point where ““it all became like a routine’ and she began filling in charitable deductions without even asking clients if they had receipts.” (Slip Op. at 4-5). Allegedly, after search warrants were executed, LaDonna tried to wave Andre away from coming to work for his mother but he demurred, expressing the view that “the investigation ‘wasn’t a big deal, and that it was just going to go away.’” (Slip Op. at 7).

Neither Sherri nor Andre testified, although Sherri presented witnesses as to her character and to impugn LaDonna’s. The Trial Judge dismissed as speculative one count against Andre of preparing a false tax return. The jury convicted Sherri and Andre on the conspiracy charge, convicted Sherri of several of the fraudulent preparation charges, and found Andre guilty of one charge of preparing a false tax return. (Slip Op. at 7-8).

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United States v. Ochoa, — F.3d —, 2017 WL 2836820 (9th Cir. July 3, 2017): Reentry defendant’s prior deportation held invalid because crime of conviction was not categorical match to removable offense; concurrence calls for en banc review to modify collateral attack caselaw

Mexican citizen Jose Ochoa was convicted of conspiracy to export defense articles without a license in violation of 18 U.S.C. 371 and 22 U.S.C. 2778, and deported. He returned and was charged with illegal reentry in violation of 18 U.S.C. 1326. He raised a collateral attack upon his prior deportation, arguing that the crime of which he was convicted was not a categorical match for the removable offenses enumerated in the Immigration and Nationality Act (INA). The Ninth Circuit agreed. The INA identifies conspiracy to commit illicit trafficking in firearms and firearms offenses as removable, but the statute Mr. Ochoa was convicted of having conspired to violate swept more broadly than the generic versions of these offenses, extending beyond firearms to a broad range of items including “underwater hardware.” Finding no clear indication that the statute was divisible, the court declined to apply the modified categorical approach. The court accordingly reversed Mr. Ochoa’s conviction and remanded the case with instructions to dismiss the indictment.

Judge Graber wrote a concurrence in which both of her fellow panel-members joined, urging en banc review. Judge Graber acknowledged that the panel’s holding was consistent with the court’s caselaw, but she criticized that caselaw as inconsistent with the statute governing the availability of collateral attacks upon prior deportations in reentry cases, and asserted that the court was on the minority end of a circuit split.

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United States v. Strickland, — F.3d —, 2017 WL 2723926 (9th Cir. June 26, 2017): Oregon third-degree robbery not a “violent felony” under Armed Career Criminal Act

Eddie Ray Strickland pleaded guilty to being a felon in possession of a firearm in violation of 18 U.S.C. 922(g)(1) and was sentenced to the fifteen-year mandatory minimum under the Armed Career Criminal Act, 18 U.S.C. 924(e)(1). The Act applied on the premise that Mr. Strickland’s prior conviction for Oregon third-degree burglary was a “violent felony,” meaning that it necessarily involved the use of “violent force” – the kind capable of causing physical injury – against the person of another. Oregon third-degree burglary, however, can be (and has been) committed by means of a purse-snatch that the victim barely even notices. The Ninth Circuit accordingly vacated Mr. Strickland’s sentence and remanded the case.

(Congratulations to Kevin W. Bons and Kelly R. Beckley, Beckley & Bons, P.C., of Eugene, Oregon, and Elizabeth G. Daily and Stephen R. Sady of amicus curiae Federal Public Defender, Portland, Oregon.)

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United States v. Pimentel-Lopez, — F.3d —, 2016 WL 9076502 (9th Cir. June 1, 2017): Rehearing denied in case barring sentencing judge from overriding jury’s affirmative finding of drug quantity

A blog entry posted in this space on July 30, 2016 covered the original panel opinion in United States v. Pimentel-Lopez. In a nutshell, the panel held that when a jury makes an affirmative finding that the defendant possessed less than a specified amount of narcotics, the sentencing court cannot later find that he actually possessed more than that amount. The government filed for en banc rehearing. The court voted against rehearing, but the panel amended its opinion and six judges dissented from the denial of rehearing. In response (presumably) to the views of the dissenting judges, the panel added language to the opinion illustrating how the verdict form could have been structured to prevent the problem, and noted that the government “can easily avoid this pitfall in future cases.” The dissenters argued that the panel misread the verdict form, and that the jury did not find beyond a reasonable doubt that the amount of drugs involved was not more than the specified amount. The dissenters asserted that the panel opinion creates a circuit split “with this circuit alone on an island.” They also warned that the panel opinion had “serious practical consequences” because the jury form in question is “substantially similar” to the court’s model form, meaning that similar forms may have been used in many cases.

(Repeat congratulations to Timothy M. Bechtold, Bechtold Law Firm, PLLC, Missoula, Montana.)

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United States v. Orozco, — F.3d —, 2017 WL 2367983 (9th Cir. June 1, 2017): Where intent to search for evidence of crime was but-for cause of purported administrative search of truck, evidence derived from search should have been suppressed

A while ago, Nevada had the idea of giving its highway patrol troopers the simultaneous powers to enforce the state’s criminal laws and to exercise “unconstrained discretion” to select commercial vehicles for “administrative” searches geared toward such matters as checking the driving log to ensure that the driver had not exceeded the maximum allowable time on the road. After all, they’re out on the highways anyway – what could possibly go wrong?

If you guessed: “Well, not to be cynical, but perhaps Nevada highway patrol troopers could get in the habit of using their administrative search powers to conduct what in reality are unconstitutional criminal searches without probable cause,” an extra bowl of pudding for you.

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United States v. Sanchez-Gomez, — F.3d —, 2017 WL 2346995 (9th Cir. May 31, 2017): Shackling of defendant in pretrial proceedings must be justified by individualized finding of compelling need

Harry Hunks: ‘Tis vile to be a baited bear, my friend/I’ faith it seems our woes shall never end.

Sackerson: We suffer not alone, my ursine pal/Think of those poor folks in the S.D. Cal.

Harry Hunks: Wait – what?

What is stranger, do you suppose: the fact that the first people ever to see Shakespeare’s plays also got a kick out of seeing a bear on a chain being whipped – or the fact that in certain high-volume federal districts, the spectacle of presumed-innocent defendants being paraded in and out of courtrooms in five-point restraints once became so perfectly routine that judges failed to exercise any meaningful discretion as to its appropriateness, even when challenged?

The question is moot: The former is a matter for historians of Elizabethan England, and the latter has just been addressed by a remarkable en banc decision from the Ninth Circuit. Continue reading →

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United States v. Liew, — F.3d —, 2017 WL 1753269 (9th Cir. May 5, 2017): Trade-secret theft counts reversed and case remanded for in camera examination of potential Brady material

Being prosecuted in federal court is bad enough – but imagine being sandwiched between a civil lawsuit and a criminal prosecution, both addressing the same conduct. One might well fear that the two cases in combination would add up to more than the sum of their parts. One might well wish that they could be twisted apart, and kept separate.

Which brings us to Oreo cookies, and Walter Liew. E.I. du Pont de Nemours and Company obtained information suggesting that Mr. Liew, who had hired two former DuPont employees, was using the company’s proprietary technique for making titanium dioxide, a white pigment used in (among other things) the filling in Oreo cookies. DuPont filed a civil complaint alleging trade secret misappropriation. Mr. Liew filed an answer in which he denied having wrongfully obtained or possessed DuPont’s trade secrets. Meanwhile, the FBI began investigating whether Mr. Liew had stolen DuPont’s trade secrets and sold them to China. Eventually the feds indicted Mr. Liew on numerous counts, and the jury convicted him on all of them. But when the Ninth Circuit broke open the trial record, it discovered that all was not lily-white inside.

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United States v. Velazquez, — F.3d — (9th Cir. May 1, 2017): District court constructively denied defendant’s right to counsel by failing to inquire into breakdown of attorney-client relationship

How bad was the relationship between drug-trafficking defendant Guadalupe Velazquez and her counsel? Not merely She-tried-to-fire-him bad. Beyond She-claimed-that-he-failed-to-convey-the-plea-deal-to-her bad. We’re talking She-surreptitiously-recorded-a-meeting-with-him-to-show-how-bad-the-relationship-was bad. That’s bad.

Ms. Velazquez expressed her concerns about this bad relationship in a pro se request for new counsel. The district court denied the request in a summary six-minute hearing. She tried to explain her concerns to the magistrate judge at her arraignment. The magistrate judge responded by explaining in detail why she should accept the plea agreement — which she was quite reluctant to do, because it required her to say that she was well pleased with her counsel’s performance. So finally she threw up her hands and signed the plea deal, which contained an appeal waiver. Along the way she also filed another motion for new counsel — but the district court, noting that in the plea deal she stated that she was well pleased with her counsel’s performance, denied it. The court accepted the plea agreement and sentenced Ms. Velazquez to 121 months in custody.

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United States v. Davis, — F.3d — (9th Cir. Apr. 14, 2017): Jury instruction constructively amended sex trafficking charge by broadening mens rea element

A grand jury indicted Ricky Davis on two counts, one of which was attempted sex trafficking of a minor “knowing or in reckless disregard of the fact that the person had not attained the age of 18 years.” Later, after the grand jurors had been sent home and the case was about to go to Mr. Davis’ jury, the district court described the charge in the jury instructions as attempted sex trafficking of a minor knowing or recklessly disregarding the victim’s age or having had “a reasonable opportunity to observe” the victim. The last piece was lifted out of the statute — but that did not make it okay, because it constructively amended the charge in the indictment. When a constructive amendment like this happens, it is impossible to know whether the grand jury would have indicted for the crime actually proved, causing the grand jury process to look like a bit of a charade. Noting that a constructive amendment constitutes per se reversible error, the Ninth Circuit reversed Mr. Davis’ attempted sex trafficking conviction. Because his conviction on another count survived and the reversal of the attempted sex trafficking charge “unbundled” the sentencing package, the court remanded the case for resentencing on an open record, or for retrial on the attempted sex trafficking charge.

Defense appellate lawyers: Did you notice the remarkable phrase “per se reversible error” up there? The constructive amendment issue belongs on your top shelf, next to Apprendi, Johnson, and “they forgot to prove an element.”

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United States v. Arriaga-Pinon, — F.3d —, 2017 WL 1291306 (9th Cir. Apr. 7, 2017): Illegal reentry defendant’s prior conviction under California vehicle-theft statute not shown by modified categorical approach to qualify as aggravated felony

Guillermo Arriaga-Pinon was convicted of unlawful reentry following removal in violation of 8 U.S.C. 1326(a) and (b). He received a sentencing enhancement under United States Sentencing Guidelines 2L1.2(b)(1)(C) on the premise that, before being removed, he had been convicted of an “aggravated felony.” Mr. Arriaga had been convicted before removal of a violation of a vehicle-theft statute, California Vehicle Code section 10851(a). Mr. Arriaga argued that a violation of this statute does not categorically constitute an aggravated felony, and that, in light of Mathis v. United States, 136 S. Ct. 2243 (2016), the statute is “indivisible” and thus the “modified categorical” approach could not be applied to determine whether his particular offense qualified as an aggravated felony. The Ninth Circuit had held in Duenas-Alvarez v. Holder, 733 F.3d 812 (9th Cir. 2013), that this statute is divisible, but Mr. Arriaga argued that Mathis abrogated Duenas-Alvarez. Mr. Arriaga’s Ninth Circuit panel noted that there are “serious questions” as to whether Duenas-Alvarez survived Mathis, but declined to reach that question. Instead the panel held that, assuming that Duenas-Alvarez remained good law, Mr. Arriaga would still be entitled to relief because the modified categorical approach failed to clarify whether he was convicted as a principal or as an accessory after the fact, and only conviction as a principal qualifies as an aggravated felony. The court accordingly reversed and remanded the case for resentencing. Chief Judge Thomas took the “somewhat unusual” step of writing a separate concurrence to his own opinion, in which he painstakingly demonstrated why Mathis requires that, in an appropriate case, Duenas-Alvarez be overruled.

Duenas-Alvarez v. Holder — if you are reading this, a word of advice: Don’t buy; rent.