A Family Affair

United States v. Yannotti, No. 06-5571-cr (2d Cir. September 4, 2008) (Katzmann, Parker, Raggi, CJJ)

Michael Yannotti was one of several Gambino crime family members accused of multiple violent acts - including extortion, loansharking and murder. After a jury trial, he was convicted of a RICO conspiracy, although the only predicates that the jury could agree that he committed were loansharking activities that had taken place eight years or more before he was indicted. The jury did not reach a verdict on a substantive RICO count, which the district court then dismissed on the ground that the government had failed to prove that Yannotti committed any predicate within the five-year statute of limitations. But the court did not dismiss the conspiracy count and, when it sentenced him, based its findings on conduct that the jury had not agreed that the government had proven. Yannotti received twenty years in prison, the statutory maximum.

The court of appeals affirmed both the conviction and the sentence.

1. Sufficiency of the Evidence

Yannotti first claimed that the evidence that he participated in a RICO conspiracy was insufficient. He specifically argued that the government did not prove that he was a member of the charged RICO conspiracy, which he maintained was defined by the pattern of racketeering acts charged in the indictment and not merely by his membership in the Gambino family.

The circuit held that its precedents “undermine[d]” Yannotti’s “core argument,” even as it agreed that there was no proof of his personal involvement in a predicate act that occurred within the statute of limitations. Specifically, the agreement proscribed by the racketeering conspiracy statute is the agreement “to participate in a charged enterprise’s affairs” and not one to “commit predicate acts.” Moreover, a conspirator need not be fully informed about his co-conspirators’ specific criminal acts, as long as he agreed to participate in the broader criminal conspiracy and the acts evincing his participation were within the scope of the illegal agreement.

Accordingly, here, the evidence was sufficient. The Gambino family was an enterprise whose members “routinely conducted its affairs through a nearly limitless range of racketeering activities.” Moreover, Yannotti had been formally inducted as a “solder” in the family, and had pledged to use any means necessary to further its objectives. Thus a jury could reasonably find that he agreed to participate in the family’s affairs.

Nor was there any time bar. A RICO conspiracy is only complete for statute of limitations purposes when its purposes have either been accomplished or abandoned. Thus, even if all of Yannotti’s own conduct occurred outside the statute of limitations, he was still liable, absent proof that the conspiracy concluded or that he withdrew.

2. Evidentiary Issues

Yannotti challenged two evidentiary rulings, both relating to two 1996 phone calls in which he discussed loansharking.

a. The Wiretap

First, he challenged the admission of the calls themselves because the conversations were obtained via a court-ordered wiretap, but Yannotti himself was not named in the wiretap application.

The circuit found no error. The application did not limit the request to conversations made to and by the owner of the target telephone. It included him, six associates, and “others as yet unknown,” and there is no legal requirement that the government specify in the application “each individual whose conversations may be intercepted.” Here, in authorizing the interceptions, the court properly found probable cause to believe that other unnamed targets would use that phone. Moreover, the intercepts were appropriately limited to conversations that addressed the conspiracy’s affairs. This and the order’s temporal limitations were adequate safeguards to prevent it from being transformed into a “general warrant.”

b. Lay Witness Opinion Testimony

Over objection, the district court permitted a Gambino family member to interpret comments that Yannotti made during the two conversations. Under Rule 701, a lay witness can only give opinion testimony if the opinion is (1) rationally based on his perceptions, (2) helpful to the determination of a fact in issue and (3) not based on scientific, or other specialized knowledge. Yannotti argued that this third prong was not satisfied, because the witness based his testimony on his specialized knowledge of the Gambino family’s operations.

The circuit disagreed. The first two prongs of the rule were clearly met here. The witness had been personally involved in the loansharking activities of the Gambino family, and his testimony was unquestionably helpful to the jury.

Thus, the court held, “where a witness derives his opinion solely from insider perceptions of a conspiracy of which he was a member, he may share his perspective as to aspects of the scheme about which he has gained knowledge,” and may do so as a lay witness under Rule 701. This is so despite the third prong of the rule. Here, the witness’s opinions came from his own loansharking experience and hence “derived from a reasoning process familiar to average persons,” and did not “depend on the sort of specialized training that” expert witnesses rely on “when interpreting the results of their own experiments or investigations.”

3. The Sentencing

When the court sentenced Yannotti, it took into account, for guidelines purposes, an attempted murder that the government had not proven beyond a reasonable doubt, but that the court concluded had been proven by a preponderance of the evidence.

Yannotti argued that the court violated U.S.S.G. §1B1.2(d), which provides that a “conviction on a count charging a conspiracy to commit more than one offense shall be treated as if the defendant had been convicted on a separate count of conspiracy for each offense that the defendant conspired to commit.” He asserted that this means that the guideline range for participation in a RICO conspiracy can be calculated based only on those predicate acts of which the defendant was actually convicted.

The circuit disagreed. The charged conspiracy, although it involved multiple racketeering predicates, was not the kind of “multi-object conspiracy” referenced in § 1B1.2(d). Rather, the sole object of the conspiracy was to further the affairs of the Gambino family. Despite all of the various acts that made up this pattern of activity, the underlying objective was this singular one. “Because overt acts are not distinct offenses that must be proven to sustain a RICO conspiracy conviction, and the RICO conspiracy charged in this case is appropriately viewed as a single-object conspiracy ... U.S.S.G. § 1B1.2(d) is inapplicable.”

Conspiracy Theories

United States v. Santos, No. 06-0833-cr (2d Cir. September 2, 2008) (McLaughlin, Sack, Livingston, CJJ)

In 2000, Santos was hired by a big Columbian drug dealer to kill two men who had stolen drug proceeds from him. Santos had meetings with an intermediary, Medina, in which Medina answered Santos' questions about the nature of the drug organization and the debt, and detailed the reasons for the hit. Soon after, Santos and an associate shot and killed two men they believed to be the intended targets, but who in fact were not. He was convicted of drug-related murder under 21 U.S.C. § 848(e)(1)(A), and was sentenced to life plus ten.

On appeal, Santos raised, without success, three issues of statutory interpretation relating to his involved in the conspiracy, two of which had a parallel sufficiency claims.

“Engaging In” Drug Trafficking

The statute makes it a crime for a person “engaging in” an offense punishable under 21 U.S.C. § 841(b)(1)(A) to commit murder. Santos argued that this language required the government to prove that he himself was “actively engaged in the distribution of drugs.” The circuit disagreed, based on the plain language of the statute.

The murder statute makes reference to any offense “punishable under” § 841(b)(1)(A). The penalties under this section apply to those who actually distribute drugs, but also those who attempt or conspire to do so. Thus, a defendant need not be actively engaged in drug distribution to be subject to § 848(e)(1)(A). Any person involved in a (b)(1)(A)-level drug conspiracy can be subject to the drug-related murder statute.

Here, there was legally sufficient evidence that Santos was guilty of knowingly participating in the narcotics conspiracy. The government proved that: the charged conspiracy existed and involved more than five kilograms of cocaine; that Santos had knowledge of the conspiracy; that he intentionally joined it, and; that he either knew or could reasonably foresee the drug type and quantity involved.

Medina told Santos about the scope of his boss’ drug dealing and the nature and amount of the debt. Santos agreed to commit the murders and in fact shot and killed two people, albeit the wrong ones. In addition, Santos knew that his acts would further the overall drug conspiracy’s goals, by sending a message that those who stole from the organization would be treated harshly. Finally, there was sufficient evidence Santos had the specific intent to further the conspiracy’s goals - his “affirmative requests to know more about the purpose behind the killings and details of the drug conspiracy,” along with his participation in the killings themselves, were enough.


Does the Statute Cover Cases Where the Only Evidence of the Defendant’s Participation in the Conspiracy is the Killing Itself?

Santos also argued that the statute does not merely cover those working “in furtherance of” the conspiracy, and thus that a drug offense must be committed independent of the killing itself. The problem with these arguments, according to the circuit, is that the drug conspiracy statute does not require an overt act. As long as “the defendant enters into the unlawful agreement before the killing, and the conspiracy is ongoing when the killing occurs,” the drug-offense and killing elements are satisfied by independent acts that overlap in time. Accordingly, although a murder committed in furtherance of the drug conspiracy “cannot itself satisfy the drug-offense element of section 848(e)(1)(A), it can, in appropriate circumstances, persuade the jury that the defendant was a member of the drug conspiracy in furtherance of which the killing was committed.”

The Nexus Requirement

Finally, Santos argued that the government must prove a “direct and substantial nexus” between the killing and the drug conspiracy. The circuit countered that all that is required is a “meaningful connection” between the two. It is enough if the evidence shows that one of the motives for the killing was related to the drug conspiracy. The government does not have to establish that a drug-related motive was the sole purpose, the primary purpose, or even that it was equally important as any other purpose.

Under this standard, there was ample evidence of a connection between the drug conspiracy and the killings. After all, Santos asked why he was being hired, and Medina gave him specific information about the debt owed to the drug conspiracy and the relationship between it and the murders.

Gimme Shelter

United States v. Stein, no. 07-3042-cr (2d Cir. August 28, 2008) (Jacobs, Feinberg, Hall, CJJ)

This case arose from a 2004 investigation into KPMG’s suspected creation and sale of illegal tax shelters. Although KPMG’s counsel recommended a “cooperative approach” in its dealings with the government, the firm still, initially, promised to pay the attorneys' fees of any current or former member of the firm who was under investigation.

In subsequent meetings with Southern District prosecutors, however, the government started putting pressure on KPMG to not pay attorneys' fees. It cited the “Thompson Memorandum,” a directive to federal prosecutors intended to give guidance on when to prosecute business organizations, which instructs prosecutors to consider whether the firm was protecting culpable employees through, inter alia, “the advancing of attorneys fees.” Bowing to this pressure, KPMG’s counsel told the government that it would not pay the fees of employees who failed to “cooperate” with the government or who invoked their Fifth Amendment rights. Later, KPMG amended its fee-payment policy to expressly cover only employees who “cooperated,” and only until the time of indictment.

Over the next year, the government would complain to KPMG when employees refused to proffer, and KPMG would in turn warn them that payment of their attorneys fees would stop unless they cooperated. Those who continued to invoke their Fifth Amendment rights were fired, and the firm stopped paying their attorneys' fees altogether.

KPMG was seeking a non-prosecution agreement, but the government balked. Eventually, by repeatedly touting its commitment to force employees to cooperate by threatening to terminate payment of their attorneys' fees, KPMG avoided indictment, and was permitted to enter into a deferred prosecution agreement. It paid a large fine and agreed to continue cooperating in the future.

The day KPMG executed that agreement, the government indicted several KPMG employees, including the thirteen defendants on this appeal. They moved to dismiss the indictment based on the government’s interference with KPMG’s payment of their attorneys' fees - KPMG admitted that it had been “substantially influenced” by the government to stop paying - and the court granted the motion.

The government appealed, and the circuit affirmed.

First, the court held that the district court’s findings of fact were not clearly erroneous. It specifically upheld - and relied on - the court’s central finding that “[a]bsent the Thompson Memorandum and the actions of the USAO, KPMG would have paid the legal fees and expenses of all of its partners and employees both prior to and after indictment, without regard to cost.”

Next, the court held that, since the government did not cure the violation, dismissal was only remedy that would restore defendants to the position they enjoyed before government’s unconstitutional conduct. The court noted that four defendants were deprived of counsel of their choice because they could not longer afford those attorneys once KPMG stopped paying. The others, who continued with their counsel at their own expense, had to limit their defenses for economic reasons, and would not have been so constrained if KPMG had continued paying.

The supposed “cure” advanced by the government was that, two years later, in court, the government invited KPMG to exercise its “business judgment” in deciding whether to resume paying the attorneys fees. The circuit was unimpressed. This “isolated and ambiguous” statement, made in a proceeding to which KPMG was not a party, did not restore the defendants to the status quo ante. Moreover, when asked whether KPMG’s resuming paying fees would affect the government’s view as to whether KPMG had complied with its deferred prosecution agreement, the government did not answer. In any event, it was simply “unrealistic to expect KPMG to exercise uncoerced judgment in March 2006 as if it had never experienced the government’s pressure in the first place.”

Third, the court agreed with the district court that, with respect to this issue, KPMG was not a private actor. The firm was so deeply influenced by the USAO that its actions were attributable to the government. The relevant legal standard asks whether there is a “close nexus” between the government and the private action. The state is responsible for the private entity’s actions where it exercises coercive power, or even “significant encouragement” over them. Here, “KPMG ‘operate[d] as a willful participant in joint activity’ with the government” and “the USAO ‘significant[ly] encourage[d]’ KPMG to withhold legal fees from defendants upon indictment.”

The circuit thus agreed that the government “forced” KPMG to adopt a constricted fees policy. Indeed, “the prosecutors steered KPMG toward their preferred fee advancement policy and then supervised its application in individual cases.”

Finally, the court agreed that the government, through KPMG, violated the defendants’ Sixth Amendment rights when it ceased paying their attorneys' fees upon indictment. This deprived the defendants both of the counsel of their choosing and the right to use their own funds - they had a property interest in the expectation that KPMG would pay their fees - to mount their defense as they saw fit.

This was true even though much of the government’s misconduct occurred before the defendants were indicted, and thus before the Sixth Amendment attached. The government’s “pre-indictment conduct was of a kind that would have post-indictment effects of Sixth Amendment significance, and did.”

The Sixth Amendment was accordingly violated here because these defendants would have had their fees paid but for the government’s interference. The government is forbidden from interfering with attorney-client financial relationships, and is also also forbidden from interfering with client relationships with any third parties who are paying their attorneys' fees. “In a nutshell, the Sixth Amendment protects against unjustified governmental interference with the right to defend oneself using whatever assets one has or might reasonably and lawfully obtain.”

Here, there was no justification for the government’s interference, such as a need to avoid a conflict of interest. Accordingly, the indictment was properly dismissed against all defendants, both those who could no longer afford their chosen counsel at all, and the rest, who continued with the same counsel, but were forced to limit their defense for economic reasons.

Toll Free

United States v. Kozeny, No. 07-3107-cr (2d Cir. August 29, 2008) (Sack, Katzmann, Hall, CJJ)

In 2002 and 2003, the government believed that Frederic Bourke was involved in a scheme to bribe senior government officials in Azerbaijan in connection with the privatization of that nation’s state-run oil company. During the investigation, the government made treaty requests for assistance to Switzerland and the Netherlands. And, months later, on July 21, 2003, it applied for an order under 18 U.S.C. § 3292 tolling the statute of limitations based on those requests. By this time, however, more than five years had elapsed since some of Bourke's offenses had been completed.

Despite this, on July 22, 2003, a district judge suspended the statute of limitations for all of the offenses under investigation. Consistent with the statute, the order provided that the suspensions would begin on the date that the treaty requests had been made, and would end when the foreign governments took their final actions.

Bourke was indicted in May of 2005, and moved to dismiss part of the indictment on the ground that the statute of limitations had expired. He argued that § 3292 did not permit the government to toll the limitations period after the five years had already expired. The district court agreed, dismissing four counts that were already time-barred by the time the government sought suspension.

On the government’s appeal, the circuit affirmed. Its analysis began with the plain language of the statute, “liberally” interpreting it “in favor of repose.” Under section 3292(a) district court is supposed to “suspend” the “running” of the statute of limitations once it makes certain findings relating to the request for foreign evidence. But “suspend” means “to cause to stop, at least for a time, something that is in operation or effect,” and a statue of limitations is only in operation or effect if it is running. Moreover, a statute of limitations cannot be “running” if it has already “run.” “To restart the running of an expired statute of limitations would be to ‘revive’ it. We see no basis upon which to read the word "suspend" in section 3292 to include the distinct concept of revival.”

The court rejected the government’s argument that the only time requirement expressly mentioned in § 3292 is the requirement that the application be made before the indictment is returned. The court noted that this requirement and one that the application be made before the statute expires are not mutually exclusive.

Nor did the court agree that § 3292(b) affected this analysis. This subsection sets the commencement date for the suspension as the date on which the government requested the foreign evidence, and not the date that the court grants the 3292 application. But that the statute allows a retroactive start date for the tolling does not mean that the application for the tolling itself can be made after the statute of limitations has expired. This reading of subsection (b) would render the timing provisions of subsection (a) “superfluous.”

Finally, the court held that the “whole act” rule supported its holding. Under this canon, a court should read a single section in light of the objectives and policy of the whole law. Here, the “whole act” includes § 3292 and a parallel provision of the Speedy Trial Act, § 3161(h)(9), which provides for an exclusion of speedy trial time - once an indictment has been returned - of up to one year to allow for requests for foreign evidence. Thus, reading the two sections together, the meaning of § 3292 is clear. “If the government anticipates a delay on account of a request for foreign evidence before indictment, it can seek to suspend the statute of limitations pursuant to section 3292. If it anticipates such a delay after the indictment is returned, but before trial, it can separately apply for relief under section 3161(h)(9) of the Speedy Trial Act.”

Feetotalers

United States v. Amato, No. 06-5600-cr (2d Cir. August 21, 2008) (Cardamone, Miner, Pooler, CJJ)

The defendants were the principals of a consulting firm that was purchased by EDS, a much larger company. Their compensation included an incentive plan that promised large bonuses if they helped their clients, financial services firms, avoid losses caused by escheatments. The defendants never met their goals, but devised a successful scheme to deceive EDS into believing that they had.

After a jury trial, the court sentenced both defendants to prison, then conducted a restitution hearing and concluded that they owed $12.8 million in restitution to EDS. This figure included more than $3 million in attorney and accountant fees that EDS had incurred as a result of its participation in the prosecution.

On appeal of this part of the restitution order, the circuit affirmed. It noted that the statute at issue, 18 U.S.C. § 3663A(b)(4) mandates reimbursement to the victim for “lost income and necessary child care, transportation, and other expenses incurred during participation in the investigation or prosecution of the offense or attendance at proceedings related to the offense.” The defendants argued that the phrase “other expenses,” did not include attorney and accountant fees, but the court disagreed, following the “plain language” of the statute.

It rejected several statutory interpretation arguments made by the defendants. First, they claimed that, under the principle of ejusdem generis, “other expenses” had to be limited to losses similar to those enumerated in the statute. Under ejusdem generis, “general terms that follow specific ones are interpreted to embrace only objects of the same kind or class as the specific ones.” But that canon is not applicable here; it is merely a “helpful guide” to legislative intent and is not entitled to “unthinking reliance.” Moreover, it only applies when the specific terms are clearly part of a common class. There is no common attribute of lost income, child care and transportation expenses that would exclude attorney and accountant fees.

The defendants also argued causation, claiming that the fees represented an “indirect” harm to the EDS, while the restitution statute is limited to “direct harm.” The court agreed in principle only. While it is true that the “link between an offense and the resulting restitution award may [not] be ignored,” here the requirement that the expense be a direct and foreseeable consequence of the offense was met.

Flight Cancellation

United States v. Mundy, No. 06-1190-cr (2d Cir. August 21, 2008) (Kearse, Leval, Cabranes, CJJ).

In this decision, the court all but eliminates the “flight as consciousness of guilt” jury instruction from Second Circuit jurisprudence.

The facts here were somewhat unusual because it was the the defendant who sought the instruction with respect to a co-defendant. The defendant was trying to bolster his argument that drugs and guns in they apartment where they were both arrested belonged to the other guy. Naturally, the government objected.

On appeal, the circuit held that district court did not err in refusing to give the instruction. But it also went on to map out the multitude of reasons why such an instruction, if objected to, should not be given, regardless of which party is seeking it.

First, there are many inferences that can be drawn from a person’s flight and, while the standard instruction points this out, it still gives “higher prominence to the inference of consciousness of guilt than to other competing inferences.” Moreover, this is just the kind of issue that counsel can and should discuss in summation: “Whether inferences should be drawn from the evidence, and if so, which inferences, are matters of logic and experience” and are not legal matters that need to be addressed in the jury charge.

Thus, “[a]bsent special circumstances, where there is an objection to the request for the instruction, it is not clear to us that any benefit from the giving of the instruction outweighs the potential harms.” The benefits of such a charge are minimal, since judges are no better at interpreting human behavior than jurors are. And the harms are considerable; in a flight instruction, the court gives its seal of approval to one particular inference, and risks “unwittingly ... tak[ing] sides.”

Finally, the court notes that such instructions are a “vestige” of an earlier era, when it was “common practice” for judges to comment on the evidence. But, “[f]or good reason,” that practice has fallen out of favor.

The court closes by noting that there may be cases where a defendant might, for tactical reasons, agree to such an instruction. But if the instruction is objected to it is to be discouraged. “[W]e urge courts to think carefully whether the charge serves a useful and proper purpose or whether it simply gives court imprimatur to one side’s factual contention.”

Standing Alone

United States v. Hamilton, No. 06-2933-cr (2d Cir. August 15, 2008) (Leval, Sotomayor, Katzmann, CJJ)

Hamilton was convicted of participating in a marijuana conspiracy. He raised a host of issues on appeal, and prevailed on his claim that the district court erroneously concluded that he lacked standing to challenge a search.

The Fourth Amendment Issue

This investigation began in 1999, in Los Angeles, where local authorities arrested Hamilton and charged him with marijuana possession. Hamilton was released on bail, then disappeared, and later acquired a Florida driver’s license in a different name. The government later learned that the LA marijuana would make its way to the Bronx.

In 2004, L.A. police officers intercepted a FedEx package containing marijuana that was supposed to go to an address in Encino, California. They conducted a controlled delivery, and discovered five men in the driveway of the house, one of whom was Hamilton, who was still using an alias. The men told the officers they did not live in the house and did not know who did, but that someone named Shane Johnson owned it. The men also said that someone named “Slick” was inside the house. Many of the house’s doors were open; the officers called out to Slick and, when he did not answer, entered the house. There was a man in one of the bedrooms, and he gave the officers consent to search the house, which contained guns, marijuana and related paraphernalia. While they were there, UPS arrived with a second package. The officers obtained a search warrant for both packages and discovered that each contained drug money.

Hamilton was arrested in 2005. In the district court, just before jury selection, his counsel moved to suppress the evidence obtained from the Encino house, citing the officers’ warrantless entry; counsel explained that he had only learned of the pre-consensual entry from the 3500 material. As to standing, counsel proffered that Hamilton had purchased the house, registered it in the name of his “common-law wife,” had free access to the house, and stayed there frequently. The AUSA countered that, when the LAPD saw Hamilton at the house in 1999, he denied living there. Counsel conceded that Hamilton did not have keys to the house but insisted that he had “access.” Without conducting a hearing, the court concluded that Hamilton did not have standing to challenge the search, concluding that his privacy interest in it was no greater than that of a mortgagee bank.

The circuit disagreed. Hamilton’s proffered facts showed that he had “free and frequent access” to the house, as well as “effective control of it,” and thus a solid expectation of privacy. “There is no authority for the proposition that one need live in the premises, or exercise control over them, in order to enjoy a privacy interest.” The district court therefore erred in “failing to draw reasonable inferences in Hamilton’s favor from the facts he alleged” and in denying the motion without a hearing. It remanded the case for further consideration of the motion to suppress.


The Hearsay Issue

At trial, Hamilton conceded that he had been involved in marijuana distribution in the past, but asserted that he had withdrawn from the conspiracy after his October 1999 arrest. Under this theory, the federal indictment, filed in January of 2005, was time barred. To counter this, the government introduced testimony that an agent had learned that Hamilton was “living with” Shane Johnson at the house that had been searched.

On appeal, the defense argued that this was improper hearsay. But the circuit sided with the government, which argued that the testimony was necessary to establish that Hamilton had been a fugitive since he skipped bail in 1999, and thus that the statute of limitations had been tolled. “[I]n order to persuade the jury that the statute of limitations was tolled,” the government “needed to show the course of its investigations that eventually led to the capture of the defendant.”

Tamper Proof

United States v. Ventry, No. 06-3104-pr (2d Cir. August 15, 2008) (Cabranes, Wesley, CJJ, Castel, DJ).

In this appeal from the denial of a 2255 motion, the circuit faulted the district court’s finding that Ventry’s counsel did not suffer from a conflict of interest. It remanded the case for further proceedings to determine the nature of the conflict and consideration of whether Ventry was prejudiced by it.

Background

Ventry was a suspect in robbery in the Niagara Falls area. After he received a subpoena to testify before a federal grand jury, he confessed to his girlfriend, Christine Janik. When Janik was interviewed by an FBI agent, she told the agent when Ventry had said, and signed a written statement, although she later testified that she had felt pressured to make the statement. Janik then told Ventry what she had done and, that same day, broke up with him.

Ventry’s father had hired a lawyer for him, Anthony Lana, but they had not yet spoken. After Ventry learned what Janik had done, he called what he thought was Lana’s firm and spoke to another lawyer, Thomas Eoannou, for advice about what to do about Janiks’ statement.

The next day, Ventry sent Janik an email. In the first paragraph, he indicated that he had spoken with a lawyer, and the lawyer had said that if she made the statement under duress the government could not use it. Ventry told Janik to call the AUSA and say that the statement was coerced and untrue. The second paragraph warned that if she were a witness against him, his lawyer would have to “destroy [her] reputation” by cross-examining her about some embarrassing personal information.

Ventry was ultimately charged with the robbery itself, as well as with witness tampering. Before trial, the government became concerned about a potential conflict of interest between Ventry and both Lana, who was still his counsel, and Eoannou, who was now representing one of the co-defendants, because it appeared that the attorneys had encouraged Ventry to tamper with Janik.

At a hearing, it emerged that Eoannou was the attorney to whom Ventry had spoken; he vigorously defended his advice - at least that in the first paragraph of the email - as legal and proper. And Lana backed him up. Ultimately, although the district court concluded that there might be possible conflict between Ventry and Eoannou, it dismissed the possibility of a conflict between Ventry and Lana, even though Lana and Eoannou shared office space and utilized a firm name that included both of their names. The only outcome of this hearing was that Eoannou ultimately withdrew as counsel for Ventry’s co-defendant..

Lana defended the witness tampering count by asserting that Ventry was acting on the advice of counsel, although he did not call either Ventry or Eoannou as a defense witness. Ventry was acquitted of the robbery but was convicted of witness tampering based on the email to Janik. After losing his direct appeal, Ventry filed a 2255 motion arguing, inter alia, that his trial counsel, Lana, had a conflict of interest because of his professional relationship with Eoannou. In response, the government submitted an affidavit from Lana in which he claimed that he did not have a professional relationship with Eoannou; Lana claimed that he was a “sole practitioner” and that Eoannou was merely his landlord. Without conducting a hearing, the district court accepted Lana’s assertions as true, and denied the motion.

The Appeal

The circuit reversed. The first thing it noted was that the record had not been developed sufficiently for it to even identify the type of conflict here - an actual conflict, which would be presumptively prejudicial - or a potential conflict, in which Ventry would have to prove prejudice.

But either such claim would turn on getting to the bottom of Lana’s business relationship with Eoannou, and understanding why Lana failed to call Eoannou as a defense witness to support the “advice of counsel” defense. The court first noted that there was no ethical bar to Lana's calling Eoannou, even if he and Eoannou were partners. It also noted that the evidence before the district court flatly contradicted Lana’s claim that they were not law partners. They shared a firm name, address and a single telephone number, and publicly represented themselves as being members of the same firm.

The court next noted that Lana’s sworn denial that they were in partnership appeared to be false, and raised questions as to why he did not call Eoannou as a defense witness. Was Lana concerned that, if he did so, Eoannou would admit that their public representations as partners were false, which would expose them to professional discipline? Or was he concerned that Eoannou would admit that they really were partners, which would expose Lana’s own lack of candor? The court also noted that by deciding not to call Eoannou, Lana was spared both of these fates, but only at the expense of potentially beneficial testimony for his client.

The court ultimately decided that it could not resolve Ventry’s claim on the present record. It remanded the case for an evidentiary hearing on the nature of Lana’s and Eoannou’s professional relationship, and for consideration of whether any aspect of it influenced Lana’ decision not to call Eoannou as a witness.

It Depends Upon What the Meaning of the Word “Is” Is

United States v. Darden, No. 06-4567-cr (2d Cir. August 15, 2008) (Cardamone, Pooler, CJJ, Keenan, DJ)

Under the Armed Career Criminal Act, 18 U.S.C. § 924(e) (“ACCA”), a felon-in-possession of a firearm or ammunition faces a fifteen-year mandatory minimum sentence (the maximum is life) if he has at least three prior convictions for felony crimes of violence and/or “serious” drug offenses. The statute defines “serious” drug offenses as those for which the maximum penalty that “is prescribed” is ten years or more.

These four consolidated appeals all arose from the application of this definition to defendants whose past convictions were for New York State Class C or Class B (first offender) drug felonies. Until 2005, the maximum penalty for such offenses was more than ten years. Effective January of 2005, the state reduced the maximum penalty for such offenseses to less than ten years, but the amelioration is not retroactive.

Thus, when each of these four defendants was sentenced in his federal case, the maximum sentence that “is prescribed” for at least one of his ACCA predicates offenses was at that time less than ten years, although for those particular defendants’ own offenses that was not true due to the non-retroactivity of the amelioration. Nevertheless, the appellate court held that federal sentencing courts should look to the state’s current sentencing laws in deciding whether a past drug offense can be an ACCA predicate. “The present tense signals that sentencing courts should examine the state’s current sentencing scheme.”

Nor does the fact that the state-law amelioration is not retroactive alter the analysis. The higher sentences that these defendants were exposed to was solely a function of the date of their conduct, and not of its seriousness. Thus, “in punishing the earlier timed nature of the offense more severely,” New York was not “meeting out extra punishment for the drug-trafficking offense of conviction” itself, but only for its timing. Since the “timing of the offense conduct is not part of the ofense of conviction to which the maximum term is tied for the purposes of the ACCA,” the non-retroactivity of the amelioration is immaterial.

Collusion Course

United States v. Guevara-Umana, No. 07-1410-cr (2d Cir. August 15, 2008) (Leval, Calabresi, Pooler, CJJ) (per curiam)

Guevara was deported in 1999. By 2004, he was back; on February 21, 2004, he was charged with grand larceny in New York State. That same day, ICE filed an immigration detainer. On March 4, 2004, ICE filed a Record of Deportable Alien and, the next day, it served Guevara with a notice of intent to reinstate the previous deportation order.

On May 6, 2004, Guevara pled guilty in state court and, four days later, ICE confirmed that he was the same person deported in 1999. On May 21, 2004, an ICE agent wrote a memorandum to Guevara’s A-file that indicated that he had begun an investigation into whether Guevara was an illegal reentrant. This memorandum indicated that a complaint had been authorized by an AUSA.

On June 3, 2004, Guevara was sentenced to time served on the larceny, but remained in state custody on the ICE detainer until September 24, 2004, when ICE obtained proof that he had not received permission to reenter. Six days later, he was presented on a federal complaint charging him with illegal reentry, and he was indicted on October 26, 2004. In the district court, Guevara moved to dismiss the indictment under the Speedy Trial Act (the “STA”), claiming that he had not been indicted within thirty days of his arrest. The district court denied the motion.

On appeal, the circuit affirmed. While it is true that the STA requires that a suspect be indicted within thirty days of his arrest, “ordinarily detention by the immigration authorities does not constitute an arrest in connection with a federal criminal offense,” and hence does not “normally trigger the Act’s thirty-day arrest-to-indictment time limit.”

The court recognized that other circuits have held there is an exception to this in “cases of collusion between [immigration] officials and criminal authorities, where the civil detention is merely a ruse to avoid the requirements of” the STA, and held that a “ruse exception is appropriate.” Here, however, Guevara did not satisfy the ruse exception’s requirements. The mere collaboration between ICE and the USAO for the purposes of a criminal investigation does not by itself establish collusion for the purpose of evading the STA. The court noted that the USAO “moved quickly to procure an indictment” after it confirmed that Guevara did not have permission to reenter, thus he “failed to show a sufficient connection between the subsequent prosecution and continued detention.”

Ratio Days

United States v. Keller, No. 07-3330-cr (2d Cir. August 14, 2008) (Miner, Cabranes, CJJ, Berman, DJ)

This case provides an important clarification of the procedure that the court set out earlier this year in United States v. Regalado, 518 F.3d 143 (2d Cir. 2008). In that case, the court held that a remand was warranted on appeals of pre-Kimbrough crack sentencings where the defendant did not ask for a variance based on the 100-to-1 penalty ratio, because there would be no way for the circuit to know whether the district court would have imposed a different sentence if it knew that it had the discretion to do so.

Here, the district judge gave a two-level sentence reduction to match the anticipated amelioration of the crack sentencing guidelines, but did not specifically acknowledge its discretion to consider the crack-powder sentencing disparity as the basis for imposing a non-guideline sentence. The circuit concluded that a Regalado remand was nevertheless necessary. In crack cocaine cases, unless the record “unambiguously demonstrates that a district court was aware of the full extent of its discretion and declined to exercise it, a remand [is] appropriate.”

Sex Post Facto

United States v. Marcus, No. 07-4005-cr (2d Cir. August 14, 2008) (Straub, Sotomayor, Wesley, CJJ) (per curiam)

Between 1999 and 2001, Glenn Marcus kept a woman, “Jodi,” as his sex slave. Having met her on the internet, he induced her to move from the Midwest to Maryland, where he set her up in an apartment. Marcus, who lived in New York, would visit Jodi there frequently and they would engaged in various sadomasochistic sex acts. Marcus would also “punish” Jodi for her disobedience, either real or perceived, often beating her severely. In January of 2000, Marcus told Jodi to move to New York, and the violent sexual behavior continued. In 2001, after subjecting Jodi to a particularly vicious beating, Marcus released her from his domination.

Marcus was charged with violating two provisions of the Trafficking Victims Protection Act (the “TVPA”) - the sex trafficking statute, 18 U.S.C. § 1591(a)(1) and the forced labor statute, 18 U.S.C. § 1589 - from January 1999 to October 2001. Although the TVPA was not enacted until October 2000, the government’s evidence spanned the entire period charged in the indictment. The district court did not instruct the jury about the enactment date of the statute, and Marcus did not object to the court’s jury instructions, or make any Ex Post Facto arguments in the district court at all.

He argued, for the first time, on appeal, that the TVPA had been applied retroactively against him, in violation of the Ex Post Facto Clause. The court, bound by its own precedents, concluded that the district court’s failure to instruct the jury on the enactment date of the statute was plain error. It vacated the conviction and remanded the case for a new trial.

Comment

This is a very strange case. The main opinion is a relatively short per curiam, and maps out the relevant precedents, under which “even in the case of a continuing offense, if it was possible for the jury ... to convict exclusively on preenactment conduct, then the conviction constitutes a violation of the Ex Post Facto clause,” even on plain error review. Here, since even the government conceded that the jury “could have found” that Marcus violated the TVPA before its effective date, the panel had no choice but to remand for a new trial. Nor did it matter that this panel was “remote.” A retrial is “necessary whenever there is any possibility, no matter how unlikely, that the jury could have convicted based exclusively on pre-enactment conduct.”

Judges Sotomayor and Wesley concurred, but in result only, urging the court to reexamine its jurisprudence in this area, since it does not “fully align with the principles adhering in the Supreme Court’s recent applications of plain error review.” The Supreme Court has held that, when it comes to plain error claims, there is no miscarriage of justice in “refusing to notice forfeited errors that did not affect the judgment.”

The concurrence goes on to suggest that a “reasonable possibility” standard would be more consistent with Supreme Court law and that, under this standard, based on a detailed review of the record, only Marcus’ sex-trafficking conviction should be vacated.

So what’s next here? Only time will tell. Just this month, the court, in an unprecedented move, sua sponte granted rehearing en banc (this circuit actually still calls it "in banc") in the appeal of the civil case of a Canadian who was taken by the CIA to the Middle East, where he was tortured. Perhaps the court will en banc this case, too.

Uncooperative

United States v. Doe, No. 06-4124-cr (2d Cir. August 13, 2008) (Kearse, Pooler, CJJ, Cote, DJ)

Defendant John Doe, along with others, was charged with “an array” of drug and gun offenses, racketeering, robbery and two murders. He expressed an interest in trying to cooperate with the government, but the government declined. Two year later, he tried again, writing a letter to the government asking to explore the possibility of cooperating. The government again said no.

At a reverse proffer, the government revealed that it had a series of letters that Doe had written to his girlfriend; in them Doe confessed to a number of crimes and also repeatedly discussed his desire to cooperate. The government offered Doe a forty-five year plea agreement - he faced life after trial - and also told him that the government would give those letters to his co-defendants if he went to trial. A few days later, Doe told his attorney he wanted to plead guilty.

A week later, Doe was brought to court, and told his attorney he had changed his mind and wanted to go to trial. He then overheard one of the prosecutors tell his counsel that “the rest of the discovery” would be given to the co-defendants that same day. Hearing this, Doe changed his mind again, executed the agreement, and pled guilty.

Five months later, Doe moved to withdraw his plea. He claimed that he had been frightened by the prosecutor’s threats to disclose his desire to cooperate, and that this fear coerced him to plead guilty. He renewed this motion one month later, this time with new counsel, and the court denied the motion without a hearing.

On appeal, the circuit held that the district court did not abuse its discretion in refusing to hold an evidentiary hearing on Doe’s claims. First, the prosecutor’s statement that Doe’s letters would be provided in discovery was not a threat, misrepresentation or promise unrelated to the prosecutor’s business. It was a “true recital of the scenario that would play out should [Doe] choose to proceed to trial.” Moreover, there were other indicia of the voluntariness of Doe’s guilty plea. During the allocution, he swore that he was entering the plea voluntarily, and not as the result of any threats. And, Doe waited five months to move to withdraw his plea, which “severely undercuts his argument that he pleaded guilty voluntarily.”

Valentine’s Day Off

United States v. Valentine, No. 06-5648-cr (2d Cir. August 5, 2008) (Leval, Calabresi, CJJ, Nevas, DJ)

Federal agents intercepted a fifty kilogram drug shipment that was addressed to an apartment building in Brooklyn. They arranged for a controlled delivery, and watched from a surveillance van across the street. Valentine went to the fake FedEx truck and called over a friend. He also agreed to help offload the delivery if he got paid. He then found someone else inside the building, who tried to locate the recipient of the delivery, but ultimately no one signed for it, and the fake FedEx truck left.

Surveillance officers stayed behind, however. They saw Valentine go in and out of the building, speak to people, and go with them to a nearby vacant lot. A few minutes later, he reappeared holding a beverage and went back to the building. He also took of his sweatshirt and put it in his car. At this point, the agents arrested him. They also searched his car, and found glassines containing heroin in the sweatshirt.

The agents then went to Valentine’s apartment, which was in the target building, and his wife gave them permission to search it. There, they found guns and another small quantity of heroin.

Valentine moved to suppress the evidence, claiming that he had been arrested without probable cause. The district court denied the motion. Although it held that Valentine’s actions during the attempted FedEx delivery were too ambiguous to provide probable cause, his later actions - the entry into the vacant lot with others, and his reappearance with a beverage, were enough.

The circuit reversed, holding that the arrest was not supported by probable cause. It agreed with the district court that there was no basis for arresting Valentine based on his conduct prior to the attempted controlled delivery. But it concluded, contrary to the district court, that Valentine’s actions after the delivery were likewise “too ambiguous to raise more than a generalized suspicion of involvement in criminal activity.” The arrest, ultimately, was based on the agents’ assumption that Valentine had consummated a drug deal in the vacant lot. But the officers never observed any actual transaction, or any evidence of narcotics trafficking at all, except for a shipment of drugs addressed to a different person in a different apartment in Valentine’s building. And nothing linked Valentine to the FedEx delivery; his presence at that building, which was also his residence, could not support probable cause.

The court went on to hold that the search of Valentine’s car, which was incident to the arrest, was also unlawful, and it suppressed the evidence recovered therefrom. But, as to the evidence recovered from Valentine’s apartment - which was the basis of his conviction - there was insufficient evidence to determine whether the illegal arrest had tainted that. The court remanded the case further proceedings and an attenuation analysis.

Scent of a Warehouse

United States v. Klump, No. 06-0339-cr (2d Cir. August 4, 2008) (McLaughlin, Sack, Livingston, CJJ)

Federal drug agents followed a fan believed to be associated with drug activity to a home depot, and then to a warehouse in Buffalo that Klump owned. The agents watched the warehouse for a while, and when Klump and another person left the building, detained them. Shortly thereafter, the agents smelled smoke from the warehouse, although they did not see any smoke or flames. They called the fire department and accompanied the firemen into the building, which, it turned out, was not on fire. Once inside, they found 300 marijuana plants and a handgun. Based on this, they obtained a search warrant and, armed with that, returned to the warehouse and found more of same.

In the district court, Klump moved to suppress the evidence on the ground that the agents’ original, warrantless entrance into the warehouse was illegal. After a hearing, the district court denied the motion, finding that exigent circumstances supported the entry.

The circuit agreed. The test for exigent circumstances is whether “the facts, as they appeared at the moment of entry, would lead a reasonable, experienced officer” to believe that there was an “urgent need to render aid or take action.” And a burning building “clearly presents an exigency of sufficient proportions.” Here, the was no error in the district court’s conclusion that the firefighters and agents reasonably believed that it was necessary to enter the warehouse. The odor suggesting that the building was on fire was enough - they were not required to wait until they saw actual smoke or flames. Nor was it relevant that the building was not in fact on fire. The test focuses on the circumstances at the moment of entry, and not on hindsight.

In Search of Lost Time

United States v. Abiodun, No. 06-5335-cr (2d Cir. July 30, 2008) (Cardamone, Cabranes, Katzmann, CJJ)

Emmanuel Abiodun was one of a group of people who ran a large credit card and identity fraud scheme in which credit reports were illegally downloaded and used to obtain credit cards in the victims’ names. Abiodun himself purchased between 300 and 400 reports and, the district court found, was responsible for a loss of between $1.6 and 2.0 million.

The court also increased his offense level by six levels based on its finding that Abiodun’s conduct involved more than 250 victims. The court included in this number individuals who suffered no actual financial loss, but who spent time securing reimbursement from banks and credit card companies.

On appeal, the circuit agreed that this was appropriate. The fraud guideline defines a victim as anyone “who sustained any part of the actual loss” for which the defendant is accountable. But this can include monetary harm, or any other type of harm that is “readily measurable in money.” On appeal, Abiodun argued that under these definitions it was error for the court to include individuals whose identities were stolen but who were fully reimbursed for their financial losses.

The circuit disagreed. Fully reimbursed individuals can still be victims under this guideline if “as a practical matter,” they suffered “(1) an adverse effect (2) as a result of the defendant’s conduct that (3) can be measured in monetary terms.” Thus, the district court correctly concluded that, if someone whose credit information was stolen spent “an appreciable amount of time securing reimbursement,” this loss of time could be measured monetarily and thus that such a person would be a "victim."

Despite this holding, which is in essence, an affirmance, the court vacated the sentence. The district court counted such “time losers” as victims, but did not add in the value of this time when calculating the overall loss amount. But the definition of “victim” is limited to persons whose loss is included in that total. Thus, on remand, the district court either has to (1) recalculate the loss amount to include the value of the time lost by these individuals or (2) keep the loss amount the same, exclude these people from the victim count, and determine whether Abiodun’s crime still affected more than 250 victims.

Comment

There are a couple of oddities about this decision. The first is that it could result in a higher sentence on remand, since the loss amount might go up. Usually when this is the case, the court offers the defendant the option of withdrawing his appeal instead of pursuing the remand, but it did not do so here. See, e.g., United States v. Harrington, 354 F.3d 178, 186 n.5 (2d Cir. 2004). The second is that the court also vacated the sentence of Abiodun’s co-defendant, even though there is nothing in the opinion to suggest that his case presented this same issue.

Glitter and Begay

United States v. Gray, No. 07-3636-cr (2d Cir. July 25, 2008) (Wesley, Hall, CJJ, Koeltl, DJ)

In New York, reckless endangerment in the first degree involves conduct “evincing a depraved indifference to human life” that “creates a grave risk of death to another person.” Nevertheless, under Begay v. United States, 128 S.Ct. 1581 (2008), the circuit here concludes, it is not a “crime of violence.”

Under Begay, which interpreted the Armed Career Criminal Act, 18 U.S.C. § 924(e), an offense must present a degree of risk similar to, and proscribe conduct that is similar in kind to, the offenses listed in the statute - burglary, arson, extortion and offenses involving explosives - to qualify as a "crime of violence." For “in kind” similarity, the statute must involve conduct that is “purposeful,” “violent,” and “aggressive.”

Here, the court applied this same rubric to the definition of “crime of violence” in sentencing guidelines, which is identical to that in § 924(e), and concluded that reckless endangerment in the first degree is not a crime of violence. While the statute describes conduct that poses a sufficient degree of risk, the offense is not similar “in kind” to the listed offenses because it does not “criminalize purposeful or deliberate conduct.”

This case also reminds that the Begay analysis is “categorical”; it looks only to the statutory elements, and ordinarily the defendant’s actual conduct is irrelevant.

Car Trouble

United States v. Delossantos, No. 06-4713-cr (2d Cir. July 25, 2008) (Feinberg, Miner, Parker, CJJ)

Marino Delossantos was a drug dealer, who was negotiating a deal with an undercover officer. While Delossantos was under surveillance, defendant Rodriguez was seen at the building where Delossantos lived ,and also drove him to and from various locations related to the drug deal. Rodriguez was arrested at the end of one such trip; he made statements and gave consent to search his apartment and car, where officers found drugs and other evidence. He moved to suppress the statements and evidence as the fruit of an illegal arrest, and the district court granted the motion, holding that no probable cause for the warrantless arrest of Rodriguez.

On the government’s appeal, the circuit reversed, holding that the agents had probable cause to arrest Rodriguez without a warrant, based on the available facts. A car passenger is often engaged in a “common enterprise” with the driver, and it is “reasonable” for an officer to “infer that if one person in a vehicle is engaged in drug dealing, so are the other[s].”

Nor was the court impressed with Rodriguez’ efforts to qualify or explain the individual facts upon which probable cause rested. Those explanations, even though “persuasive in varying degrees,” do not alter the existence of probable cause because the facts must be considered in their totality, and in light of the “training and experience of the arresting agents.”

Remand Performance

United States v. Ogman, No. 06-0203-cr (2d Cir. July 24, 2008) (Sotomayor, Livingson, CJJ, Preska, DJ) (per curiam)

This published opinion replaces a summary order filed in this case back in April. [It was blogged in that month’s Summary Summary.] The case holds that, in a crack cocaine prosecution, a Regalado remand is not warranted when the defendant was sentenced as a career offender. The range that applies in such cases is the product of the career offender guideline, and not of the 100-to-1 powder to crack ratio.

Warrant Peace

Untied States v. Waker, No. 07-4160-cr (2d Cir. July 22, 2008) (Hall, Livinston, CJJ, McMajon, DJ) (per curiam)

Here, the defendant unsuccessfully argued that various defects invalidated a search warrant.

He first cited two typographic errors - the magistrate accidentally set the execution deadline as April 30, 2004, instead of April 30, 2005, and the agent accidentally post-dated by one day facts in the supporting affidavit. But the court held that “minor errors” are not cause for invalidating a warrant. Here, the dating errors were harmless because “each document in which they occurred contained accurate information from which one could easily establish the correct dates.”

Waker also argued that the warrant’s cross-reference to the applicant’s affidavit violated the Fourth Amendment’s particularity requirement. The court again disagreed. The affidavit was attached, the language of warrant clearly incorporated it, and this is enough under the Fourth Amendment.