Five and Time

United Sates v. Culbertson, 10-1766-cr (2d Cir. February 3, 2012) (Hall, Lynch, Lohier, CJJ)

Defendant Culbertson was arrested during an investigation into the importation of heroin and cocaine into the United States from Trinidad, after his girlfriend was arrested at the airport. He was charged with offenses that, based on the drug type and quantity alleged - 100 grams or more of heroin and five kilograms or more of cocaine - carried a ten-year mandatory minimum.

Culbertson was a difficult guy - he went through so many appointed attorneys that the district court finally forced him to go pro se- and consistently disputed the quantity of drugs attributable to him. At his plea, Culbertson insisted that the offense involved only “three kilos” of cocaine - that is what he said his girlfriend had been recruited to import, even though she in fact had more than five in her luggage - and said he did not know anything at all about any heroin. He then asked for a Fatico hearing on drug quantity, but when the government said that it would be relying on the girlfriend’s five kilograms, the district court denied the request “as moot.” Thus, although Culbertson’s guidelines were 57 to 71 months - the government gave him “minimal” role - the court sentenced him to the ten-year mandatory minimum.

On appeal, the circuit vacated the conviction, finding that the guilty plea did not have an adequate factual basis as to drug quantity. In a drug conspiracy, the plea allocution must establish that drug type and quantity that trigger the statutory penalties were at least reasonably foreseeable to the co-conspirator defendant. But, typically, where a defendant has explicitly challenged the statutorily prescribed drug type or quantity, the circuit has concluded that the record of the plea did not provide an adequate factual basis to enter judgment against the defendant on the charged crime.

This case was no different. Culbertson specifically declined to plead guilty to the five-kilogram quantity. His “persistent disavowal of responsibility for any amount in excess of three kilograms of cocaine compels us to conclude that the District Court lacked a factual basis for his plea.” Nor was this cured by the government’s proffer; it is “error” for the court to find that a factual basis exists “when the defendant actively contests a fact constituting an element of the offense.”

Finally, the error was not harmless. Disputes over drug quantity in a plea allocution are “presumptively significant” given the impact of quantity on the length of the term of imprisonment. Accordingly, the court vacated the judgment of conviction.

The circuit also examined the district court’s handling of Culbertson’s repeated requests for a change of counsel. It is not unreasonable for a court to “require an intractable defendant either to proceed with the current appointed lawyer, or to proceed pro se.” Nevertheless, in such situations, before forcing a defendant to go pro se, the court must undertake a Faretta colloquy to ensure that a defendant poing pro se “knows what he is doing” and makes the choice “with his eyes open.” Accordingly, here, on remand, if the court still deems it appropriate to deny Culberton’s request for new counsel, it must follow the Faretta procedure.

Peter Paul and Money

United States v. Paul, No. 09-3191-cr (2d Cir. March 7, 2011) (Cabranes, Chin, CJJ, Crotty, DJ)

Defendant Peter Paul pled guilty to securities fraud, in connection with a stock manipulation scheme that permitted him to fraudulently obtain multi-million dollar margin loans, which he never repaid, from two brokerage houses. The district court sentenced Paul principally to 120 months’ imprisonment and more than $11.4 in restitution.

He raised three main claims on appeal, all without success.

At a pretrial conference, the district judge remarked that he had a reputation for giving a Guideline sentence after trial but for being lenient with defendants who pled guilty. The judge also remarked that the twenty-five months Paul spent fighting extradition in Brazil - he apparently fled there as his scheme was unraveling - would not be credited if he did not plead guilty. On appeal, Paul claimed that these remarks violated Fed.R.Cr.P. 11(c)(1), which forbids the district court from participating in plea discussions. The court rejected a “bright-line” rule in assessing Rule 11(c)(1) claims, noting that such issues are “highly fact-specific.” The the judge made the first remark in the context of setting a trial date - not about Paul specifically. The second remark, in context, was of even less concern to the court; it was clearly related to the court’s effort to find a way to release Paul on bail and not to coerce a plea. Moreover, any Rule 11(c)(1) violation here was harmless; Paul was not present when the remarks were made, pled guilty several months later, affirmed in the plea that he was doing so voluntarily, and neither he nor his attorney ever objected to the statements.

Paul also claimed, again for the first time on appeal, that the nearly four-year delay in his sentencing violated his right to a speedy sentencing. But the court found no plain error. Most of the delay was due to prosecutorial negligence, which “does not weigh as heavily as would an intentional delay,” and one year of the delay was attributable “solely to Paul’s request for adjournments.” In addition, Paul could identify no actual prejudice resulting from the delay other than his anxiety over the uncertainty of what would happen to him.

Finally, Paul challenged the restitution order, which required him to repay the losses to the brokerage houses that extended the margin loans. He argued that those losses were caused by the declining stock price, which left the institutions without the collateral necessary to recover the money they lent. The circuit disagreed because the losses were not caused by a decline in stock value, they were caused by “the making of the loans in the first instance,” and Paul clearly obtained the loans fraudulently.

Breach Blanket Bingo

United States v. Bell, No. 07-0715-cr (2d Cir. June 10, 2008) (Jacobs, Calabresi, Sack, CJJ) (per curiam)

In this case, the circuit had to sift through competing claims as to which party breached the plea agreement.

Defendants Brumer and Klein pled guilty to various offenses relating to healthcare fraud. Their agreements with the government stipulated to a loss amount, and specified that neither party would seek a departure or adjustment other than those contained in the agreement. Based on the proof at a related trial, however, the government offered to amend the agreement and reduce the loss amount. The defendants rejected this offer, and instead sought a Fatico hearing, after which the court held them accountable for a significantly lower loss amount. In exchange, the government sought adjustments for mass marketing and vulnerable victims that were not part of the plea agreement.

So who breached first? The defendants. According to the court of appeals, the government’s original offer to reduce the loss amount, which would have benefited the defendants, was not a material breach. Rather, the defendants breached the agreement by seeking a Fatico hearing and putting the government to its proof, causing it to lose the benefit of its bargain. Accordingly, since the defendants breached first, the government was entitled to treat the agreements as unenforceable and to seek the additional sentencing enhancements.

This decision also contains an interesting discussion of some issues relating to the increasingly common practice of having of magistrate judges preside over felony guilty plea allocutions. First, the court held that defendants do not have the right to be present when the district judge reviews the transcript of the allocutions and signs an order accepting the plea. The court also held that the provisions of 28 U.S.C. § 636(b)(1) and (b)(1)(C), which require the filing of proposed findings and recommendations of the court, do not apply to Rule 11 proceedings.

Finally, the court rejected Klein’s argument that he was denied his Sixth Amendment right to the counsel of his choice when the district court refused to allow him to substitute retained counsel. The request came six years after the indictment and four years after the guilty pleas, and would have meant replacing Klein’s sixth attorney with a seventh. Under the circumstances, the court’s refusal to allow the change was not an abuse of discretion.

“Might” Makes Right

United States v. Zhang, No. 05-6662-pr (2d Cir. October 23, 2007) (Winter, Cabranes, CJJ, Korman, DJ)

During a plea allocution, advising a defendant that he might be deported was good enough, even though ICE believed that deportation was mandatory.

Zhang, a chemist, manufactured and sold an illegal bodybuilding supplement, DNP. One of his customers died after taking Zhang’s concoction, while another was in a coma for ten days. Zhang ultimately pled guilty to one count of mail fraud. During the plea allocution, the prosecutor stated that Zhang was subject to “possible” deportation as a result of the plea. The magistrate judge echoed this, saying that the plea “could” result in his deportation. Similar equivocal statements about the possibility of deportation were made by the prosecutor and district judge at Zhang’s sentencing.

Once sentenced, however, Zhang was served a notice by ICE indicating that he faced mandatory deportation as a result of his conviction for an aggravated felony. He filed a 2255 motion that he was affirmatively misled by the prosecutor and the court about the immigration consequences of his plea, a violation of Rule 11. The district court agreed, and vacated the plea.

The circuit had a different view, and reversed the district court, at least on the particular facts presented here. Fraud offenses are only aggravated felonies if the loss to the victim(s) exceeds $10,000. At the time Zhang pled guilty it was “far from clear” that he was pleading to an aggravated felony because and the ultimate loss amount had not yet been settled. Although the plea agreement contained a larger loss amount, Zhang reserved the right to contest it. Thus, telling him that he faced
“possible” deportation was “completely accurate.”

This is a sad case. Zhang came to the United States at the age of seven after his family was granted political asylum. He has lived in the United States for more than twenty years, is married to an American citizen, and is not proficient in Chinese. The circuit has left a door open for him, however; his 2255 also argued that his attorney was ineffective. The court has remanded the case back to the district court for consideration of that claim.