United States v. Archer, No. 10-4684-cr (2d Cir. September 20, 2011) (Newman, Calabresi, Hall, CJJ)
Thomas Archer, a solo-practitioner immigration lawyer in Queens, ran a visa fraud mill. His specialty was the I-687, an amnesty program that permitted certain aliens who were here illegally in the 1980's to adjust their status and receive a visa. In 2004 and 2005, Archer filed nearly 240 I-687 applications; the DHS denied them all.
Convicted of visa fraud and conspiracy to commit visa fraud, his appeal concerned both trial issues - centered around his claim that he did know know that his assistants were filing forms with false information - and sentencing issues. The circuit affirmed Archer’s conviction, but remanded for resentencing and recalculation of the restitution.
The Trial Issues
At trial, an immigration agent who had reviewed 175 I-687 applications that Archer’s office filed, testified that almost all of them had certain suspicious factual allegations in common. That said, however, only three clients actually testified about the preparation of their fraudulent I-687's, and the government entered only four applications into evidence. The aliens' stories had much in common: their I-687 applications contained information that they knew was false; Archer or his staff gave them supporting affidavits for others to sign that were already filled in, and; Archer’s office told them to abandon the application process once they had received temporary work permits, but before their interview.
Archer’s principal trial defense was that he was unaware of the fraudulent actions of his staff. To this end, he requested two jury instructions. First he sought a “Philips” instruction that “the fact that a defendant is a solo practitioner, without more, is an insufficient basis from which to infer his guilt because, even though he is the only lawyer in the office, he may not be aware of everything his staff is doing.” He also sought a “Maniego” instruction that “attorneys are not held to a higher duty to investigate than non-lawyers and have no special obligation to verify independently information give to them by clients.” The district court rejected these requests and instead gave a fairly generic “knowingly” charge that simply told the jurors to consider whether Archer knew that the visa applications contained false statements but nevertheless presented them.
The circuit affirmed. Although it agreed that both the Philips and the Maniego instructions contain legally sound principles, here the instruction that the court gave was accurate and “left no room for the jury to convict Archer if it believed that he merely ran an office from which fraudulent documents were filed.”
The Sentencing Issues
The circuit found fault with the district court’s findings on two sentencing enhancements and its restitution order.
First, based solely on the agent’s statistical review of the 175 I-687 applications, the court enhanced Archer’s guideline range by nine-levels for creating 100 or more fraudulent documents, even though only the government admitted only four applications at trial. The circuit found that this statistical review failed the Shonubi “specific evidence” test. The principal problem was that the government “presented no evidence that the four applications proven false at trial were ... a representative slice of the 175 applications” that the agent reviewed because the government did not “randomly select[]” them; they were the applications associated with particular witnesses that the government chose to call and, most likely, “the most egregious cases.”
In addition, even though there was a suspicious statistical similarity among the applications reviewed, there was no “baseline” - evidence of what the national pool of I-687's, most of them likely filed by honest lawyers, actually looked like. Finally, the government did not explain why the similarities among Archer’s I-687 applications were “in themselves incriminating.” The only facts at issue were dates of entry and of travel and those facts were not “so peculiar” or “obvious” “that no further explanation is needed.”
The second sentencing error concerned the obstruction of justice enhancement. The district court imposed it because Archer texted a former employee, Singh, asking him whether he was going to be a government witness. When Archer concluded that the answer was “yes,” he texted Singh again, this time calling him a “Pussy.” According to the PSR, Singh felt “very threatened” by those messages.
Here, there was no direct and obvious threat; Archer’s statements to Singh were ambiguous. Where this occurs, the circuit usually defers to the district court’s findings on the speaker’s meaning and intent, but here the district court made none. And a “reasonable reading” of the messages would not support a finding of intent sufficient to support the enhancement. To the circuit, the “most obvious” reading of the texts was that Archer wished to know whether Singh would testify against him, and was displeased to learn that he would. Thus, even though Archer called Singh an “unpleasant name” and Singh was, subjectively, “afraid,” it was error to impose the obstruction enhancement.
The district court also erred in imposing restitution to 234 of Archer’s former clients - the total was more than $300,000 - because there was insufficient evidence that all of the clients were “victims” under the MVRA. The clients were only “victims” if Archer’s conspiracy to commit visa fraud caused their losses. This turns not so much on whether the aliens had “clean hands” but on whether their losses arose from the visa fraud or from an uncharged consumer fraud - Archer’s effort to cheat them of their money. After all, a person can commit visa fraud without accepting any money from the applicants.
If Archer’s clients though they were buying his honest legal services, then they may well have been victims of the visa fraud conspiracy. But, if they knew they were buying the “cover that his law practice gave to their false visa applications” then the visa fraud was not the proximate cause of their loss. There are some cases where it will be clear that no reasonable person would have given the defendant money if he had known of his plan. In those cases, a generalized description of the fraud is enough to support restitution. But, where it is “plausible that some individuals would have paid the defendant even if they had been informed of his fraudulent plan, then the government must proffer some individualized evidence to meet its burden of showing that each alleged ‘victim’ was actually a victim.”
This case is in that latter category. At least some of the aliens clearly knew that their visa applications contained falsehoods, but went along with the process anyway. In addition, filing a “false but plausible I-687 application was anything but a sure loser.” While the application was pending, the alien obtained a temporary work permit, and there was always the possibility, however, small the applicant would receive a visa. Given the resulting lack of certainty as to which clients were victims, the court remanded for recalculation of the restitution order.
Procedures on Remand
This decision has a particularly interesting discussion of the procedures that the district court is to undertake on remand. For sentencing issues, the “consensus” among the other circuits is “where the government knew of its obligation to present evidence and failed to do so, it may not enter new evidence on remand” unless the “government’s burden was unclear,” the “trial court prohibited discussion of the issue,” or the “evidence was, for a good reason, unavailable.”
The circuit “join[ed] that consensus” - sort of - but it still punted. It did not resolve the issue other than to remand for resentencing with instructions that the district court “consider in the first instance whether the justifications ... for allowing the government to present new evidence on remand exist in this case.” If the court allows no new evidence, it should recalculate Archer’s sentencing range without the 100-or-more-documents and obstruction enhancements. It if chooses to consider new evidence it should recalculate the range based on its findings with respect to that evidence and impose a sentence based on this and, of course, all of the other § 3553(a) factors.
For the restitution problem, there is yet another twist to the remand. To satisfy its burden, the government will have to show that each fee-paying client “did not know of the fraud and would not have paid a fee had” he known. Since the government has to “prove two negatives,” “some refinement in the proper allocation” of the evidentiary burdens is necessary.
Ordinarily, according go the circuit, “where the prosecution’s burden of proof would require it to prove a negative and the facts at issue are more readily ascertainable by the defendant,” the defendant assumes a burden of producing “at least a triable issue as to the fact at issue,” after which the prosecution assumes the burden of persuasion. That is the “appropriate” allocation of burdens here. Archer is “more likely than the government to ascertain whether a client knew of the fraud or would have paid a fee even if the client had known of the fraud,” since this knowledge would have come from Archer himself or someone in the firms.
Since the district court did not follow this program in the first instance, on remand, the court will have to reconsider which of Archer’s clients is entitled to restitution. The court will also have to consider whether to allow new evidence, as discussed above. But on the restitution question, the lack of clarity on the parties’ respective burdens “would seem to favor allowing additional evidence on the issue.” Even if there is no new evidence, however, the parties are “free to make new arguments based on the evidence already in the record.”
Comment
Mr. Archer now faces something of a dilemma. On remand, each client that he alleges knew what was going on - and hence is not a “victim” for restitution purposes - will add one at least more admittedly fraudulent document to the potential offense level enhancement. Will he stop at ninety-nine to keep his offense level lower, and make restitution to the others? Or will he go all the way, and claim that none of his clients were "victims?" In other words, which will he choose - money or freedom?
Thomas Archer, a solo-practitioner immigration lawyer in Queens, ran a visa fraud mill. His specialty was the I-687, an amnesty program that permitted certain aliens who were here illegally in the 1980's to adjust their status and receive a visa. In 2004 and 2005, Archer filed nearly 240 I-687 applications; the DHS denied them all.
Convicted of visa fraud and conspiracy to commit visa fraud, his appeal concerned both trial issues - centered around his claim that he did know know that his assistants were filing forms with false information - and sentencing issues. The circuit affirmed Archer’s conviction, but remanded for resentencing and recalculation of the restitution.
The Trial Issues
At trial, an immigration agent who had reviewed 175 I-687 applications that Archer’s office filed, testified that almost all of them had certain suspicious factual allegations in common. That said, however, only three clients actually testified about the preparation of their fraudulent I-687's, and the government entered only four applications into evidence. The aliens' stories had much in common: their I-687 applications contained information that they knew was false; Archer or his staff gave them supporting affidavits for others to sign that were already filled in, and; Archer’s office told them to abandon the application process once they had received temporary work permits, but before their interview.
Archer’s principal trial defense was that he was unaware of the fraudulent actions of his staff. To this end, he requested two jury instructions. First he sought a “Philips” instruction that “the fact that a defendant is a solo practitioner, without more, is an insufficient basis from which to infer his guilt because, even though he is the only lawyer in the office, he may not be aware of everything his staff is doing.” He also sought a “Maniego” instruction that “attorneys are not held to a higher duty to investigate than non-lawyers and have no special obligation to verify independently information give to them by clients.” The district court rejected these requests and instead gave a fairly generic “knowingly” charge that simply told the jurors to consider whether Archer knew that the visa applications contained false statements but nevertheless presented them.
The circuit affirmed. Although it agreed that both the Philips and the Maniego instructions contain legally sound principles, here the instruction that the court gave was accurate and “left no room for the jury to convict Archer if it believed that he merely ran an office from which fraudulent documents were filed.”
The Sentencing Issues
The circuit found fault with the district court’s findings on two sentencing enhancements and its restitution order.
First, based solely on the agent’s statistical review of the 175 I-687 applications, the court enhanced Archer’s guideline range by nine-levels for creating 100 or more fraudulent documents, even though only the government admitted only four applications at trial. The circuit found that this statistical review failed the Shonubi “specific evidence” test. The principal problem was that the government “presented no evidence that the four applications proven false at trial were ... a representative slice of the 175 applications” that the agent reviewed because the government did not “randomly select[]” them; they were the applications associated with particular witnesses that the government chose to call and, most likely, “the most egregious cases.”
In addition, even though there was a suspicious statistical similarity among the applications reviewed, there was no “baseline” - evidence of what the national pool of I-687's, most of them likely filed by honest lawyers, actually looked like. Finally, the government did not explain why the similarities among Archer’s I-687 applications were “in themselves incriminating.” The only facts at issue were dates of entry and of travel and those facts were not “so peculiar” or “obvious” “that no further explanation is needed.”
The second sentencing error concerned the obstruction of justice enhancement. The district court imposed it because Archer texted a former employee, Singh, asking him whether he was going to be a government witness. When Archer concluded that the answer was “yes,” he texted Singh again, this time calling him a “Pussy.” According to the PSR, Singh felt “very threatened” by those messages.
Here, there was no direct and obvious threat; Archer’s statements to Singh were ambiguous. Where this occurs, the circuit usually defers to the district court’s findings on the speaker’s meaning and intent, but here the district court made none. And a “reasonable reading” of the messages would not support a finding of intent sufficient to support the enhancement. To the circuit, the “most obvious” reading of the texts was that Archer wished to know whether Singh would testify against him, and was displeased to learn that he would. Thus, even though Archer called Singh an “unpleasant name” and Singh was, subjectively, “afraid,” it was error to impose the obstruction enhancement.
The district court also erred in imposing restitution to 234 of Archer’s former clients - the total was more than $300,000 - because there was insufficient evidence that all of the clients were “victims” under the MVRA. The clients were only “victims” if Archer’s conspiracy to commit visa fraud caused their losses. This turns not so much on whether the aliens had “clean hands” but on whether their losses arose from the visa fraud or from an uncharged consumer fraud - Archer’s effort to cheat them of their money. After all, a person can commit visa fraud without accepting any money from the applicants.
If Archer’s clients though they were buying his honest legal services, then they may well have been victims of the visa fraud conspiracy. But, if they knew they were buying the “cover that his law practice gave to their false visa applications” then the visa fraud was not the proximate cause of their loss. There are some cases where it will be clear that no reasonable person would have given the defendant money if he had known of his plan. In those cases, a generalized description of the fraud is enough to support restitution. But, where it is “plausible that some individuals would have paid the defendant even if they had been informed of his fraudulent plan, then the government must proffer some individualized evidence to meet its burden of showing that each alleged ‘victim’ was actually a victim.”
This case is in that latter category. At least some of the aliens clearly knew that their visa applications contained falsehoods, but went along with the process anyway. In addition, filing a “false but plausible I-687 application was anything but a sure loser.” While the application was pending, the alien obtained a temporary work permit, and there was always the possibility, however, small the applicant would receive a visa. Given the resulting lack of certainty as to which clients were victims, the court remanded for recalculation of the restitution order.
Procedures on Remand
This decision has a particularly interesting discussion of the procedures that the district court is to undertake on remand. For sentencing issues, the “consensus” among the other circuits is “where the government knew of its obligation to present evidence and failed to do so, it may not enter new evidence on remand” unless the “government’s burden was unclear,” the “trial court prohibited discussion of the issue,” or the “evidence was, for a good reason, unavailable.”
The circuit “join[ed] that consensus” - sort of - but it still punted. It did not resolve the issue other than to remand for resentencing with instructions that the district court “consider in the first instance whether the justifications ... for allowing the government to present new evidence on remand exist in this case.” If the court allows no new evidence, it should recalculate Archer’s sentencing range without the 100-or-more-documents and obstruction enhancements. It if chooses to consider new evidence it should recalculate the range based on its findings with respect to that evidence and impose a sentence based on this and, of course, all of the other § 3553(a) factors.
For the restitution problem, there is yet another twist to the remand. To satisfy its burden, the government will have to show that each fee-paying client “did not know of the fraud and would not have paid a fee had” he known. Since the government has to “prove two negatives,” “some refinement in the proper allocation” of the evidentiary burdens is necessary.
Ordinarily, according go the circuit, “where the prosecution’s burden of proof would require it to prove a negative and the facts at issue are more readily ascertainable by the defendant,” the defendant assumes a burden of producing “at least a triable issue as to the fact at issue,” after which the prosecution assumes the burden of persuasion. That is the “appropriate” allocation of burdens here. Archer is “more likely than the government to ascertain whether a client knew of the fraud or would have paid a fee even if the client had known of the fraud,” since this knowledge would have come from Archer himself or someone in the firms.
Since the district court did not follow this program in the first instance, on remand, the court will have to reconsider which of Archer’s clients is entitled to restitution. The court will also have to consider whether to allow new evidence, as discussed above. But on the restitution question, the lack of clarity on the parties’ respective burdens “would seem to favor allowing additional evidence on the issue.” Even if there is no new evidence, however, the parties are “free to make new arguments based on the evidence already in the record.”
Comment
Mr. Archer now faces something of a dilemma. On remand, each client that he alleges knew what was going on - and hence is not a “victim” for restitution purposes - will add one at least more admittedly fraudulent document to the potential offense level enhancement. Will he stop at ninety-nine to keep his offense level lower, and make restitution to the others? Or will he go all the way, and claim that none of his clients were "victims?" In other words, which will he choose - money or freedom?