Alford Plea Allowed Court To Conclude That Defendant Violated Supervised Release By Committing a New Crime

United States v. Glenn, No. 13-0231-cr (2d Cir. Mar. 12, 2014) (Jacobs, Livingston, and Lynch), available here

Glenn appealed from an order of the District of Connecticut revoking his supervised release. The district court concluded that Glenn committed "another federal, state or local offense" in violation of the conditions of his supervised release, based solely on his pleas of guilty to state drug offenses entered under the Alford doctrine, see North Carolina v. Alford, 400 U.S. 25 (1970).

Defendant argued on appeal that his Alford pleas were insufficient to prove by a preponderance of the evidence that he had violated the conditions of his supervision. But the Circuit affirmed. It held that an Alford plea, under Connecticut law, constitutes an acknowledgement of the strength of the state's evidence. Accordingly, the district court did not abuse its discretion in concluding, by a preponderance of the evidence, that Glenn committed another offense in violation of the conditions of his supervised release.

Term of Imprisonment May Not Run Concurrently With a Discharged Term of Imprisonment

United States v. Lucas, Nos. 12-4840-cr(L), 13-0743(Con), 13-1075(Con) (2d Cir. Mar. 17, 2014) (Parker, Lynch, and Droney) (per curiam), available here

This published (and, therefore, precedential) decision reiterates what the Circuit had previously held only in non-precedential summary orders: that USSG 5G1.3(b) and 18 U.S.C. 3584 empower district courts to run sentences concurrently only to "undischarged" terms of imprisonment.

Defendants pled guilty to conspiracy to distribute drugs and to using and carrying a firearm during and in relation to that conspiracy, in violation of 18 U.S.C. 924(c). The district court sentenced all three defendants to the mandatory minimum term of imprisonment on both counts: ten years for the drug charge and a consecutive five-year term for the gun charge.

On appeal, defendants argued that the district court mistakenly believed that it had no authority to impose less than the mandatory minimum sentences by running those sentences concurrently to completed prison terms that defendants had previously served on related state charges.

The Circuit held that the district court correctly ruled that it had no such authority. The Court  noted that USSG 5G1.3(b) directs district courts to run a prison term "concurrently to the remainder of [any] undischarged term of imprisonment" if the recommended "term of imprisonment resulted from another offense that is relevant conduct to the . . . offense of conviction." The Court held that this language plainly refers only to "undischarged" prison terms.

And 18 U.S.C. 3584 delineates only two categories of defendants who qualify for a concurrent sentence: those subject to "multiple terms of imprisonment ... imposed ... at the same time," and those who are "already subject to an undischarged term of imprisonment." The Court declared, "Nothing in the statute authorized the district court to extend the benefit of a concurrent sentence to a third category of defendants, those who have previously served sentences, now completed, for related crimes."

 Finally, the Circuit held that neither USSG 5G1.3(b) nor 18 U.S.C. 3584 draws an irrational distinction between discharged and undischarged prison terms. Accordingly, those provisions are not unconstitutional under the equal protection component of the due process clause.

Waiver in Plea Agreement Barred Collateral Attack on Sentence

Tellado v. United States, No. 11-3227-pr (2d Cir. Mar. 12, 2014) (Hall, Livingston, and Berman), available here

This published decision affirms the denial of petitioner's Section 2255 motion to vacate his sentence. The Court held that petitioner knowingly waived his right to collaterally attack his sentence and that the district court properly denied petitioner's motion to amend his petition to plead an ineffective- assistance-of-counsel claim.

Tellado pled guilty in 2007 to participating in a conspiracy to distribute drugs. The plea agreement acknowledged that Tellado was a career offender (resulting in a Guidelines range of 188-235 months) and also contained a waiver of the defendant's right to appeal or collaterally attack his sentence if it did not exceed 188 months. 

Tellado was sentenced in September 2007 as a career offender to 188 months of imprisonment. But a year later the Second Circuit decided United States v. Savage, 542 F.3d 959 (2d Cir. 2008), which suggested that Tellado did not qualify as a "career offender."

In light of Savage's holding, Tellado filed a 2255 motion to vacate or correct his sentence. But the Circuit concluded that the plea agreement barred the motion. Although the district court did not specifically explain at the plea hearing the scope of the right to collaterally attack the sentence and the effect of the waiver of this right, the prosecutor did state on the record that the defendant had agreed to "waive his rights of appeal or to collaterally attack" any sentence of 188 months or less.  The Circuit concluded, "Our review of the record satisfies us ... that the district court's inquiry of Tellado regarding the Government's explicit description of the full scope of the waiver was adequate to ensure that Tellado was aware of his rights and of what he was waiving." 

The Court also rejected petitioner's claim that he should have been allowed to amend his petition to add a claim of ineffective assistance. The Circuit held that Tellado's counsel could not possibly have been ineffective in 2007 for failing to foresee Savage's holding in 2008. Rather, counsel reasonably relied on the law as it stood at the time of sentencing. Thus, amending the petition to add a claim of ineffective assistance would have been futile. 

Commentary: In case you missed it, the upshot of all this is that the Circuit leaves in place a 188-month career offender sentence for someone who apparently is not a career offender.  

District Court Should Reconsider Consecutive Sentences for Aggravated Identity Theft

United States v. Chibuko, No. 12-0039-cr (2d Cir. Mar. 7, 2014) (Katzmann, Kearse, and Wesley) (per curiam), available here

This published decision offers guidance on the procedures to be followed before a district court may impose consecutive sentences for multiple counts of aggravated identity theft, 18 U.S.C. 1028A.

Chibuko was convicted at trial of various fraud crimes, including three counts of aggravated identity theft, 18 U.S.C. 1028A. A 1028A violation carries a mandatory two-year prison sentence, to run consecutively to any other sentence imposed. But sentences imposed for multiple 1028A violations may run concurrently with each other.

Here, two of the defendant's three 1028A violations were part of the same scheme and involved the same victim. The Guidelines provide that, in that situation, the sentences on those two counts should generally run concurrently with each other when, as here, the underlying offenses are "groupable" under USSG 3D1.2. But the district court sentenced Chibuko to consecutive terms on the three 1028A counts, without mentioning the general rule or "groupability." 

Under these circumstances, the Circuit held that the district court committed plain error by failing to explain its departure from the general rule that the 1028A sentences should run concurrently with each other when the underlying crimes are grouped. 

The Court remanded for supplementation of the record with appropriate findings and explanations, or alternatively, for re-sentencing. 

Commentary: If you have a case involving multiple counts of aggravated identity theft, this opinion is essential reading.

Divided Panel Reverses Judgment of Acquittal; Dissent Calls Ruling "Erroneous and Dangerous"

United States v. Anderson (Hakimi), No. 11-5364-cr (2d Cir. Mar. 4, 2014) (Hall, Carney, and Scheindlin), available here

A jury convicted Roohid Hakimi of conspiracy and attempt to possess and distribute controlled substances. After the verdict, the district court (Judge Hurd) entered a judgment of acquittal, holding that the evidence was insufficient to establish guilt. This published opinion (authored by Judge Carney) reverses and reinstates the convictions. Judge Hall dissents.

The key issue on appeal was whether the evidence allowed a rational juror to conclude, beyond a reasonable doubt, that Hakimi knew that the bag he was poised to receive from Anderson, a co- defendant-turned-cooperator, contained drugs.

The majority said, "Yes." It summarized its reasoning as follows:

"[T]he jury could infer that Hakimi was a trusted member of the conspiracy, and accordingly that he knew of the contents of the bag that Anderson plausibly testified she was about to give him. These general inferences derive decisive strength in Hakimi's case from Anderson's testimony that  the principals in this conspiracy in particular would not have committed a valuable shipment of drugs to a person who was not a trusted individual."

Judge Hall's dissent took a different view:

"There is no basis in this record on which the jury could rationally infer a trust relationship between Hakimi and the principals and thereby infer Hakimi's knowledge of the nature of the contraband. To that end, the majority proposes a broad holding that a jury can infer a 'trusted insider' status, and thereby knowledge of the nature of the object of a conspiracy, from nothing more than the value of the contraband to be transported, phone calls of unknown content, and a co-conspirator's intention that the defendant have sole possession of the object to be delivered. This is not ... in line with this Circuit's prior precedent and is tantamount to the sort of speculation that we have previously held insufficient to support a conviction for drug conspiracy or attempted possession of controlled substances."

  

    

Circuit Grants Rehearing and Vacates Three Convictions Tainted by Involuntary Confession and Ineffective Redactions Under Bruton

United States v. Taylor, Nos. 11-2201(L), 11-2426(CON), 11-2639(CON) (2d Cir. Mar. 4, 2014) (Kearse, Jacobs, and Carney), available here

In this published decision, the Circuit granted the government's petition for panel rehearing and withdrew its original opinion vacating the convictions of all three defendants. Unfortunately for the government, the Court, on rehearing, not only again vacated the defendants' convictions, but expanded its rationale for doing so. [Disclosure: the Federal Defenders of New York, Inc., represents one of the defendants in this case.]

All three defendants were convicted of charges related to the robbery of a Manhattan pharmacy. The Court's original opinion (issued on December 4, 2013) vacated the convictions, holding that the admission of the main defendant's involuntary confession was prejudicial to all three defendants. The Court found the confession so critical to the government's case, and so essential to buttressing the credibility of the cooperating accomplice, that it prejudiced the co-defendants as well. Thus, the Court found it unnecessary to decide whether the admission of the confession, as redacted by the district court, also violated the co-defendants' Confrontation Clause rights under Bruton v. United States, 391 U.S. 123 (1968).

The government then sought rehearing, arguing that the confession was admitted only against the defendant who made it (as a limiting instruction advised the jury), and that the confession therefore could not be grounds for a new trial for the co-defendants unless it violated Bruton.

In this new decision (authored by Judge Jacobs), the Court granted panel rehearing, withdrew its original opinion, and once again found the main defendant's confession involuntary and prejudicial as to him. But this time the Court not only reached the Bruton issue, but resolved it in favor of the co-defendants. The panel held that the admission of the redacted confession violated the Confrontation Clause rights of the co-defendants because the redactions left it obvious that the confession implicated the co-defendants and had been redacted. The Court emphasized that the confession referred throughout to the testifying accomplice by her full name, Luana Miller, while referring awkwardly to the co-defendants as "two other individuals," or as "the driver" and "the person who waited with Luana Miller," and even as "the mother of one of the two other individuals." The Court held that "the awkward circumlocution used to reference other participants, coupled with the overt naming of Luana Miller (only), is so unnatural, suggestive, and conspicuous as to offend Bruton, Gray [v. Maryland, 523 U.S. 185 (1998)], and [United States v.] Jass[, 569 F.3d 47 (2d Cir. 2009)]."

Accordingly, the Court once again vacated the convictions of all three defendants and remanded for a new trial.

Summary Order Upholds Denial of Suppression Motion

United States v. Lee, No. 13-1432-cr (2d Cir. Feb. 27, 2014) (Wesley, Droney, and Abrams) (summary order), available here

This summary was provided by noted criminal defense lawyer Francisco Celedonio, who is also a member of the Board of Directors of Federal Defenders of New York, Inc.:

In this summary order, the Circuit upheld a decision of the district court (Judge Scullin) denying a motion to suppress. The district court found a confidential informant sufficiently reliable (based on detailed information that was corroborated)  to provide officers with reasonable suspicion to stop a vehicle. Given the reliability of the CI's tip (which suggested the defendant was armed), the officers also had a basis to search the defendant upon stopping the vehicle.

Erroneous Advice Concerning Deportation Consequences Prompts Circuit to Grant Writ and Vacate Conviction

Kovacs v. United States, No. 13-0209 (2d Cir. Mar. 3, 2014) (Kearse, Jacobs, and Parker), available here

Kovacs, an Australian national, pled guilty in 1999 to misprision of felony (18 U.S.C. § 4). His lawyer advised him at the time -- and stated on the record -- that the plea would have no immigration consequences. Many years later, Kovacs learned that this advice was incorrect, and that his conviction placed him at risk of detention and deportation if he ever reentered the United States.

Kovacs then sought a writ of error coram nobis in the district court, arguing that his lawyer rendered ineffective assistance of counsel by giving erroneous advice concerning the deportation consequences of pleading guilty, and that his conviction should be vacated. The district court denied the petition without an evidentiary hearing.

In this published opinion, the Circuit reversed and ordered the granting of the writ. The Court held, first, that the petition was timely, and that counsel's affirmative misrepresentation about the deportation consequences of the plea constituted "objectively unreasonable" performance under Strickland v. Washington. 

The Court also held that Kovacs had established that his lawyer's flawed advice caused him "prejudice." The Circuit declared that "a defense lawyer's incorrect advice about the immigration consequences of a plea is prejudicial if it is shown that, but for counsel's performance errors, there was a reasonable probability that the petitioner could have negotiated a plea that did not impact immigration status or that he would have litigated an available defense."

Here, Kovacs showed that, but for counsel's deficient performance, (1) he could have negotiated a plea that would not have impaired his immigration status; and, (2) even if he could not have negotiated such a plea, he would have litigated an available statute-of-limitations defense. Accordingly, the Circuit directed the district court to issue the writ and vacate Kovacs's conviction.

Restitution Under the Mandatory Victims Restitution Act Is Improper for Harms Not Listed in the Statute

United States v. Maynard, No. 12-5106-cr (2d Cir. Feb. 24, 2014) (Kearse, Jacobs, and Parker), available here

This important decision holds that, under the Mandatory Victims Restitution Act of 1996 ("MVRA"), 18 U.S.C. §§ 3663-64, restitution may be awarded only for the harms enumerated in the statute.

The facts were simple: Maynard and Ludwig robbed five banks between September and November 2011. At sentencing, the district court ordered the defendants to pay restitution to the banks under the MVRA. More than half of the restitution was to repay the money stolen during the robberies, and was clearly proper. But the rest included certain expenses paid by one of the banks: (1) paid time-off for the bank's regular staff, and the pay of replacement staff; (2) mileage expenses for the replacement staff; (3) the cost of wanted posters; and (4) the cost of a temporary security guard at the bank after the robbery.

The Court noted that the MVRA requires a court to order restitution for the four categories of harm listed in the statute, but makes no other expense reimbursement mandatory. And no provision of the statute gives district courts discretion to order any other restitution. Accordingly, the Court held, only those expenses enumerated in Section 3663A(b) are properly the subject of restitution.

Applying this rule to the facts, the Circuit held that aspects of the restitution award were improper. Indeed, the award was proper only to the extent it compensated the bank for the amount stolen during the robbery and for the money it paid its regular staff for the afternoon while the bank was closed as a crime scene. Restitution was proper for the latter expense because the bank derived no benefit from the wages paid while the bank was closed. The bank then reopened, but allowed its regular staff to stay home (with full pay) for a couple of extra days to recover from the stress caused by the robbery. That expense was not a proper subject for restitution, because the bank would have paid the regular staff for these days even if the bank had not been robbed.

The wages (and mileage expenses) for the temporary staff also did not fall within the enumerated harms of the MVRA. The temporary staff wages did not compensate for losses such as destruction of property or funeral expenses, and were not necessary to the prosecution or investigation of the offense. While the expense was arguably attributable to the psychological recovery of the regular staff present during the robbery, the MVRA limits recovery for psychological harm to instances of "bodily injury." And even if the wages constituted a "business expense" absorbed by the bank, as the government argued, the MVRA does not include a business expense category.

Finally, the Circuit held that restitution for the cost of the wanted posters and the temporary security guard was not authorized. These expenses, the Court concluded, were not "necessary" to the investigation or prosecution of the offense, and did not fall within any other category of harm listed in the statute. 

   

Defendant's Supreme Court Victory Did Not Entitle Him to New Trial

United States v. Bailey, No. 07-3719-cr (2d Cir. Feb. 21, 2014) (Cabranes, Pooler, and Raggi), available here

This case shows that even a Supreme Court victory isn't always enough to help a convicted defendant.  

The police stopped Bailey about a mile from a residence that he had just departed and that was about to be searched (for drugs and a gun) pursuant to a warrant. In 2011, the Circuit upheld this stop as a lawful detention incident to the authorized search under Michigan v. Summers, 452 U.S. 692 (1981). The Supreme Court then reversed, holding that Summers's detention-incident-to-search rule did not apply because Bailey was not in "the immediate vicinity of the premises to be searched" when he was stopped. But, rather than ordering suppression or a new trial, the Supreme Court remanded for the Second Circuit to decide whether Bailey's detention could be justified independently as a reasonable investigatory stop under Terry v. Ohio, 392 U.S. 1 (1968).

This opinion (authored by Judge Raggi) addresses that question and holds that Bailey's initial detention was reasonable under Terry, but ceased to be so when he was placed in handcuffs. Thus, while evidence obtained from Bailey before handcuffing was lawfully obtained under Terry, evidence obtained thereafter (including exculpatory statements that the prosecution claimed at trial were false) was not. 

If you thought that this ruling would lead to a new trial, you'd be wrong. The defendant was not entitled to relief because, the Circuit held, the admission of the tainted evidence was harmless beyond a reasonable doubt. The Court cited the strength of the government's case, the prosecutor's limited reliance on the tainted evidence in summation, and other factors to support the conclusion of harmless error. 

Judge Pooler agreed with the majority that the evidence obtained after handcuffing should have been suppressed, but dissented from the remainder of the Court's decision; she concluded that the defendant's entire detention was illegal and that a new trial was required. 

      

Circuit Vacates Restitution Order

United States v. Lochard, No. 12-5115-cr (2d Cir. Feb. 19, 2014) (Chin, Carney, and Droney) (summary order), available here

Convicted of access device fraud, the defendant was sentenced to 36 months of imprisonment and ordered to pay about $108,000 in restitution. The judgment did not set forth a payment plan or provide for the waiver of interest. A month after he was sentenced, the incarcerated defendant received a letter from the government advising him that the full amount of restitution was due immediately and that interest would accrue on any unpaid balance.

The defendant wrote to the district court seeking a payment schedule and modification of the judgment, but the court denied the requests. He then appealed.

Three issues were presented on appeal: (1) whether the appeal was time-barred; (2) whether the district court had jurisdiction to consider the defendant's motion to modify; and (3) whether the district court abused its discretion in denying the motion. The Court resolved all three issues in the defendant's favor:

First, the appeal was timely because the defendant timely filed a notice of appeal from the district court's order denying his motion to modify the judgment. Second, the district court had jurisdiction to consider the defendant's motion to modify because modification of the terms of payment of restitution is authorized by statute, and does not constitute a modification of the sentence itself.

Finally, the Circuit held that a remand for further proceedings was required because the Court could not discern the basis for the district court's decision denying modification of the payment schedule. The court simply checked a box saying that modification was "denied." The Circuit further noted that, under the Mandatory Victim Restitution Act, modification is expressly permitted if a defendant demonstrates a material change in his economic circumstances. The Court thus remanded, directing the district court to consider whether the defendant could demonstrate such a change and, if not, whether the court could impose a restitution schedule even absent such a showing. 

Claim That Indictment Charged a "Non-Offense" Was Waived By Guilty Plea

United States v. Rubin, No. 12-3777-cr (2d Cir. Feb. 19, 2014) (Cabranes, Hall, and Chin), available here

Rubin was charged principally with conspiracy to violate the Unlawful Internet Gambling Enforcement Act of 2006 ("Gambling Act"). He pled guilty under an unconditional, written plea agreement, and was sentenced to 36 months of imprisonment.

On appeal, the defendant argued that he was convicted of a "non-offense" when he pled guilty because the indictment did not charge him with conspiring in the business of "betting or wagering;" it alleged only that he handled gambling funds, conduct which, he claimed, was exempt from prosecution under the Gambling Act.

The Circuit held that, even assuming that the indictment charged a "non-offense," Rubin's guilty plea waived his right to challenge this purported defect in the indictment. The Court reasoned that, under the Supreme Court's decision in United States v. Cotton, 535 U.S. 625 (2002), the alleged defect in the indictment was non-jurisdictional, and therefore could be, and was, waived by the defendant's unconditional guilty plea.

The Court also rejected the defendant's argument that his 36-month prison sentence was unreasonable. The Circuit noted that the district court justified the sentence -- an upward variance from the Guidelines range -- by stating that the crime was "particularly reprehensible," that the defendant's conduct was "brazen, quite deliberate, and deceptive," and that the defendant was likely to commit new crimes upon release from imprisonment. Under these circumstances, the sentence was both procedurally and substantively reasonable.

Commentary: This decision holds merely that the defendant, by pleading guilty, waived his right to challenge an alleged non-jurisdictional defect in the indictment. But it never resolves a rather important question: Was this defendant actually guilty of the crime to which he pled guilty?

Court Rejects Pro Se Appeal

United States v. Faison, No. 12-5006-cr (2d Cir. Feb. 10, 2014) (Leval, Calabresi, and Lynch) (summary order), available here

Representing himself at a jury trial, the defendant was convicted, among other things, of possessing 28 grams of cocaine base with intent to distribute. On appeal, he continued to represent himself, challenging his arrest, the indictment, and several of the district court's trial rulings.  

This summary order affirms the defendant's convictions. The Court ruled, first, that the federal authorities had probable cause to arrest the defendant at a state correctional facility at which he was being held, and therefore did not need a warrant to do so. The Court rejected the defendant's claim that he was arrested under a "fraudulent warrant."

Second, the Double Jeopardy Clause did not bar the defendant's prosecution in federal court following his arrest by state officials. "The Double Jeopardy Clause," the Court wrote, "does not prohibit sequential prosecutions by different sovereigns, so a prior state prosecution would not bar a later prosecution based on the same events." Here, the defendant was never even indicted on the state charges, thus dooming his Double Jeopardy claim.

Third, the government indicted the defendant well within the time limits set  by the Speedy Trial Act. 

The Court  also upheld the district court's trial rulings. The trial court properly admitted testimony regarding the defendant's statements and conduct leading up a drug sale, and the defendant did not establish that any prosecution witnesses committed perjury. Further, the prosecutor did not commit any prejudicial misconduct during opening statement or summation. Finally, while the defendant challenged testimony from scientists at the Nassau County Crime Lab as untrustworthy, the Circuit ruled that any deficiencies in the testimony were harmless in light of the overwhelming evidence of guilt.

Defendant's Consent to Computer Monitoring Was Fatal to Motion to Suppress

United States v. Kelly, No. 12-4185-cr (2d Cir. Feb. 4, 2014) (Walker, Livingston, and Chin) (summary order), available here

Kelly was originally arrested for failing to register as a sex offender and for illegally possessing firearms. He obtained bail after agreeing to a special condition of pretrial release that authorized the Probation Office to monitor his computers. Unfortunately for Kelly, the probation officer, upon receiving permission from the Magistrate Judge, inspected Kelly's computer before Kelly was actually released from detention. During that inspection, the officer discovered child pornography on Kelly's computer, resulting in additional charges against Kelly for receiving and possessing child pornography.

On appeal, the defendant argued that the search of his computer -- before his physical release from detention -- was beyond the scope of his consent. But the Circuit disagreed. It held that the district court did not "clearly err" in finding that the search of the computer was within the scope of Kelly's consent to the conditions of pretrial release. In the Court's words, "Taken together, Kelly's assent to the written pretrial release conditions and his statements at the detention hearing can permissibly be read to have permitted the probation officer's inspection of Kelly's computer before his actual release from pretrial detention." Accordingly, the district court properly denied his motion to suppress. 

Defrauding Dick's: Circuit Reaffirms "Right to Control" Theory of Mail and Wire Fraud

United States v. Viloski, No. 12-265-cr (2d Cir. Feb. 4, 2014) (Walker, Cabranes, and Parker) (summary order), available here

Viloski, a lawyer and real estate broker, was a broker/consultant for development projects of Dick's Sporting Goods. The trial evidence showed that he acted as a consultant for real estate transactions in which he accepted a consulting fee, a portion of which he secretly passed on to Joseph Queri, an employee of Dick's. In other transactions, Viloski did no consulting work, but accepted a consulting fee that he passed on to Queri in its entirety.

The jury convicted Viloski of conspiracy to commit mail and wire fraud, substantive counts of mail fraud, money laundering, and other charges. The government's theory of fraud was that the defendant had engaged in a "scheme to deprive another [i.e., Dick's] of potentially valuable information that could impact on economic decisions." 

On appeal, the Circuit affirmed Viloski's convictions, holding that this theory of fraud, premised on the right of a company to control its own assets (including the right to receive accurate material information regarding an employee's kickbacks), was a valid one, and that the theory was adequately set forth in both the indictment and in the jury instructions. The Court further held that the deprivation of "potentially valuable information" was sufficient to constitute fraud. Accordingly, the district court properly denied Viloski's motions to dismiss the indictment, to enter a judgment of acquittal, or to grant a new trial.

Viloski did prevail on one issue: the Circuit held that the district court, in imposing forfeiture in excess of $1.2 million, erroneously failed to consider the factors in United States v. Bajakajian, 524 U.S. 321 (1998), to determine whether the forfeiture order violated the "excessive fines" clause of the Eighth Amendment. Thus, the Court remanded the forfeiture order with instructions to the district court to consider the Bajakajian factors. 

Tax Fraud Conviction and Sentence Not Barred on Statute of Limitation Grounds

UNITED STATES V. OSUALA, NO. 12-3573 (2D CIR. FEB. 3, 2014) (CABRANES, LIVINGSTON, AND CARNEY) (SUMMARY ORDER), AVAILABLE HERE

This defendant appealed from convictions for obstructing administration of the IRS, subscribing to false and fraudulent income tax returns, and aiding and assisting the preparation of false individual tax returns.  He claimed expiration of the six-year statute of limitations precluded Indictment and that the district court imposed an unreasonable sentence after considering tax returns that were not a basis for conviction.  Both arguments failed.

First, the defendant failed to raise any statue of limitations claim before the district court.  Thus, he waived the argument on appeal.  Nevertheless, the claim failed on the merits according to the Court.  The limitation period runs from the filing deadline for the relevant tax returns rather than the date on which the return was actually submitted.  As to the obstruction allegations, such a charge is within the limitations period of any act integral to the scheme occurred within that period.  None of the returns ran afoul of the limitations period and an act occurred within the limitations period.

Second, application note 2 at U.S.S.G. § 2T1.1(c)(1) states in short that all conduct violating tax laws should be considered as part of a defendant's conduct, scheme or plan unless the evidence demonstrates that the conduct is unrelated.  As a result, the district court properly considered uncharged conduct and conduct that fell outside the statute of limitations.

Court Affirms Fraud and Identity Theft Convictions and Sentences Over Claims of Insufficient Evidence and Sentencing Error

UNITED STATES V. WILLIAMS, JOHNSON, AND JONES, NOS. 12-2314(L), 12-2454-cr(CON), 12-2650(CON) (2D CIR. FEB. 3, 2014) (KATZMANN, WESLEY, AND CHIN) (SUMMARY ORDER), AVAILABLE HERE

In this case, a jury convicted two defendants (Johnson and Jones) after trial for multiple counts of bank fraud and aggravated identity theft, as well as conspiracy to commit bank fraud.  A third defendant (Williams) pleaded guilty to one count of each of these offenses, entered into a cooperation agreement, and testified against Johnson and Jones.  The district court imposed sentences of 264 and 240 months' imprisonment for Johnson and Jones respectively, and 109 months' custody for Williams.  Jones challenged the sufficiency of the evidence against him at trial.  All three defendants challenged their sentences as procedurally and substantively unreasonable.  The Court denied all claims.

In his sufficiency of the evidence claim, Jones argued that his mere presence did not make him a member of the conspiracy and that the government's witnesses were not credible based upon their entering into cooperation agreements.  As to the former, the Court disagreed after and cited the testimony of five "cashers" who were recruited to help carry out the scheme, which entailed stealing checkbooks and identities from locked cars, impersonation of those individuals whose identities were stolen, and fraudulently cashing checks against bank accounts belonging to those same individuals.  The "cashers" testified that they were recruited by Jones, who also facilitated their participation.  According to testimony, Jones rented a car for at least one of the "cashers" to drive while cashing checks.  Jones also followed and spoke via cell phone to this "casher" throughout the thefts.  Williams also testified about Jones's involvement in the conspiracy, including his committing the car burglaries, obtaining the stolen identities, confirming with banks that accounts had enough money to cover the cashed checks, and recruiting women to act as "cashers."  According to the Court, "plentiful evidence" existed to prove the charges at trial.  Moreover, the credibility of witnesses in light of any cooperation agreements was a question for the jury, which is assumed to have been resolved against Jones.  There mere fact of such cooperation agreements is insufficient to warrant vacating the conviction.

All three defendants argued that the district court erred factually in calculating the intended loss amount of $4.17 million, which they claimed exceeded the amount documented at trial.  Relying upon United States v. Uddin, 551 F.3d 176, 180 (2d Cir. 2009), the Court explained that "[a] district court may make a reasonable estimate by extrapolating the average amount of loss from known data and applying that average to transactions where the exact amount of loss is unknown."  The district court reasonably estimated the loss and permissibly adopted the probation office's calculations, which extrapolated from trial testimony the assumption that the scheme involved three days of work per week from September 2007 and May 2010, that the average theft was $2,000 per bank, and that the defendants visited five banks per day.

The Court also affirmed application of various Guideline enhancements against Jones and Johnson and the procedural reasonableness of their sentences.  It affirmed a two-level enhancement for the use of "sophisticated means" pursuant to the U.S.S.G. § 2B1.1(b)(10) after assessing the defendants' scheme in the "aggregate" rather by its piecemeal activities.  Based upon checks and identity documents recovered during the government's investigation it affirmed the enhancement pursuant to U.S.S.G. § 2B1.1(b)(2)(B) for fifty or more victims.  It affirmed a three-level role enhancement pursuant to § 3B1.1(b) for Jones given the evidence of his participation in the conspiracy and the number of "cashers" involved.

Finally, the Court declined to hold that any of the sentences were substantively unreasonable.  None of them "shocks the conscience" given the length and nature of the scheme.  The Court also rejected arguments that the "Guidelines calculation involved multiple 'overlapping' enhancements," which produced an inflated total offense level.  Though the Court has vacated and remanded sentences based upon the "cumulative effect" of enhancements present to a degree not considered by the Sentencing Commission, nothing in the record indicated that the district court misapprehended the scope of its departure authority in this regard.  Absent such evidence, the claim was not appealable.

One very noteworthy portion of the Court's decision comes at the end of this "summary" order.  Williams challenged the district court's refusal to recommend her participation in the BOP's RDAP program.  Her challenge failed, which does not bode well for clients in need of drug treatment while held in BOP custody.  According to the Court, because this "requested recommendation would merely be a non-binding recommendation to the [BOP], the district court's refusal is not appealable."  Despite this holding and past cases in this vein, defense attorneys should make sure that the PSR adequately memorializes their client's history of drug addiction so that their RDAP placement request have some basis in fact even in the absence of a judicial recommendation for treatment.




 

Co-Defendant Sentencing Disparity Did Not Render Sentence Unreasonable

United States v. Chervin, No. 13-631-cr (2d Cir. Jan. 30, 2014) (Kearse, Pooler, and Raggi) (summary order), available here

This summary is provided by noted criminal defense attorney Francisco Celedonio, Esq., who is also a member of the Board of Directors of Federal Defenders of New York, Inc.:

 

Appellant Chervin challenged his 57-month sentence, which was imposed after trial (for conspiracy to commit mail fraud and conspiracy to commit health care fraud). He asserted that the sentence was unreasonable because it was disproportionate to the sentences imposed on others involved in the same scheme. Finding that Chervin had failed to demonstrate that he was similarly situated to his co-defendants (for example, Chervin was the only defendant to go to trial, he never accepted responsibility, and his co-defendants were convicted of different crimes), the Circuit refused to find any procedural or substantive error in the sentence imposed. Notably, the Court reiterated the rule stated in United States v. Frias, 521 F.3d 229 (2d Cir. 2008), that although 18 U.S.C. § 3553(a)(6) requires a district court to consider national sentencing disparities, it "does not require a district court to consider disparities between co-defendants." Finally, noting that Chervin was sentenced at the low end of the advisory Guidelines, the Circuit could find nothing to suggest that the sentence was shockingly high or otherwise improper. 

Admission of Co-Conspirator Statements at Defendant's Trial Did Not Violate His Confrontation Clause or Due Process Rights

UNITED STATES V. FAILING, NO. 10-3330-cr (2D CIR. FEB. 3, 2014) (KATZMANN, WESLEY, AND LOHIER) (SUMMARY ORDER), AVAILABLE HERE

In this case, the defendant was convicted after trial of conspiracy to possess methamphetamine with intent to distribute.  He received 77 months' custody.  On appeal he challenged the district court's admission of out-of-court statements by a co-conspirator pursuant to Federal Rule of Evidence 801(d)(2)(E) and argued that their admission violated his Confrontation Clause and due process rights.  He also challenged his sentence as procedurally and substantively unreasonable claiming that the district court refused to consider arguments regarding his methamphetamine addiction.  All of these claims failed.

First, no error occurred as a result of admitting the co-conspirator's statements.  To be admissible pursuant to Rule 801(d)(2)(E), the district court must find by a preponderance of evidence that the statement was made in furtherance of the conspiracy.  The district court did not err by admitting the statements, which according to the Court reassured co-conspirators, induced their assistance, fostered trust and cohesiveness, or provided information about the conspiracy's progress.

Second, no Confrontation Clause or due process violations occurred as a result of the statements being admitted at trial.  Relying on United States v. Farhane, 634 F.3d 127, 163 (2d Cir. 2011), the Court explained that a statement is or is not "testimonial" by examining "the declarant's awareness or expectation that his or her statements may later be used at a trial."  (emphasis added).  In Failing's case, the co-conspirator who uttered the statements did not know that he was speaking to a government agent and, thus, was unaware that his statements might later be used at trial.  The Court also disagreed with suggestions that the admissibility of such non-testimonial statements should be subject to a balancing analysis and noted the lack of authority in this regard.

Finally, the record indicated that the district court in fact acknowledged and considered the defendant's methamphetamine addiction in imposing sentence, which was within the range of permissible decisions in this case.

Loss Calculations and Trial Conviction Affirmed in Wire and Bank Fraud Case

UNITED STATES V. JOHNSON, NO. 12-3328-cr (2D CIR. FEB. 3, 2014) (POOLER, RAGGI, AND SCHOFIELD) (SUMMARY ORDER), AVAILABLE HERE

Post-conviction for wire fraud and bank fraud, the defendant in this appeal challenged his sentence as procedurally unreasonable and challenged the sufficiency of the evidence to his intent to commit bank fraud pursuant to 18 U.S.C. § 1344.  The district court calculated the loss amount by taking 30 percent of the total mortgage price of certain properties purchased, including those by two co-defendants.  Because the defendant never challenged the presentence report's method of calculating loss and in his sentencing letter specifically contemplated guidelines that included losses incurred by the co-defendants, he waived any factual challenge on appeal.  As to his sufficiency of the evidence claim, the defendant argued that the government failed to prove that the banks lost anything of value.  The Court reconfirmed the Circuit's reading of the bank fraud statute "expansively" and noted that the bank need not actually be victimized to violate the statute if the defendant acted with the necessary intent.  The evidence supported the jury's finding that he did and affirmed.