United States v. Fathia-Anna Davis (4th Cir. 1/5/17): Manufactured Jurisdiction Argument. Also, Don’t Try to Murder Your Husband.

So, this case raises an interesting claim in the context of a murder-for-hire scheme. Davis apparently loathed her husband.  So much so that she repeatedly tried to murder him.  Her first attempt, giving him an overdose of Ambien, did not work. The husband merely ended up in the hospital. Seeking a more certain outcome, Davis reached out to a friend of hers who worked at a car dealership that catered to the local gang members and drug dealer milieu.  This friend, instead of helping her solicit a murderer, instead went to law enforcement. Law enforcement, in conjunction with this friend set up a sting operation. This friend sent a text message to Davis, at the behest of law enforcement, informing her that he found someone for the job. This text message is the basis for Davis’s argument that her conviction and sentence should be vacated under the manufactured jurisdiction doctrine.

Under the manufactured jurisdiction doctrine, federal law enforcement officers essentially cannot use an instrumentality of interstate commerce in order to elevate what would normally be a local concern into a federal one. Davis relied primarily on United States v. Coates, 949 F.2d 104 (4th Cir. 1991) for this analysis. In that case, the court found that despite investigating Coates for a month, the government “had no evidence of his use of interstate mail or wire facilities in connection in the murder-for-hire scheme. To cure this problem, the government agent drove to Virginia for the sole purpose of making a telephone call across state lines in order to induce Coates to ‘use’ that interstate facility to discuss the scheme.”  Id. at 105.

The Court found the reliance on Coates misplaced.  First, the manufactured jurisdiction argument does not categorically prohibit government agents from using a facility of interstate or foreign commerce to initiate contact.  Instead, it only prohibits them from doing so for the sole purpose of turning a state crime into a federal crime.  Two, in this case, the record is silent as to the officers’ intent in asking the car-dealership friend to send the initial text.  It’s quite likely it was done for convenience sake, and not as a ploy to confer federal jurisdiction over the case.  And lastly, unlike Coates, this is not a case where there was a one-time direct response to a government agent’s invitation.  Instead, the record shows that Davis voluntarily used her car and mobile phones, repeatedly, to meet and communicate with the detectives regarding the plot to murder her husband.

The Court also found that Davis’s sentence of 120 months was completely reasonable under the facts of this case. Appellate counsel made the important argument that Davis was improperly enhanced in her sentencing for facts that actually constitute elements of the offense. For example, because the offer or receipt of something of pecuniary value is an element of the offense (Section 1958), everyone convicted under that statute will receive a four-level enhancement under 2A1.5.  This argument, however, was not presented to the sentencing court, so the Fourth Circuit assessed it under plain error review.  Under that stringent standard she did not prevail. The Court notes in footnote 7 that other circuits have also rejected the 2E1.5 cross reference to 2A1.5 (specifically, the 2nd and 8th circuits).  The Court also rejected other, preserved issues regarding the substantive reasonableness of her sentence.

An interesting legal issue with some highly unsavory facts.  Ten years seems very reasonable to this completely defense-oriented-never-even-thought-about-being-a-prosecutor attorney.

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United States v. Philip Swaby, 4th Circuit Court of Appeals (filed 4/24/17): Court’s “general” immigration warnings did not cure lawyer’s erroneous advice regarding consequences of guilty plea.

A very important case for lawyers representing defendants facing possible deportation as a consequence of criminal convictions.  The facts here are very similar to those SCOTUS addressed in Padilla v. Kentucky, 559 U.S. 356 (2010).  Counsel was appointed to represent a client who had lawful permanent resident status.  He was married to a citizen and has two daughters who are citizens.  He also has a step-daughter.  He and his wife were indicted for trafficking counterfeit goods.  Recognizing possible immigration consequences, counsel reached out to another attorney, one who specialized in immigration law.  Counsel sent the indictment and what he believed was the applicable statute to the immigration lawyer.  Unfortunately, he inadvertently sent the wrong statute so the immigration lawyer erroneously advised plea counsel that a plea to the crime would not be considered an aggravated felony for immigration purposes under 8 U.S.C. 1101(a)(43)(M)(i).  The plea agreement ultimately entered into by Petitioner and the Government was predicated on their understandings that Swaby would be free from deportation if he secured a sentence for less than 365 days.  The plea agreement itself contained boilerplate warnings about possible immigration consequences.  And, at the plea itself, the district court judge informed Petitioner that his guilty plea could lead to his deportation or removal from the United States.

The short of it is that the Fourth Circuit found that the general warnings by the district court judge did not mitigate the prejudice of plea counsel’s deficient performance.  In United States v. Akinsade, 686 F.3d 248 (4th Cir. 2012), the Court also found that a district court’s general warnings of risk of deportation do not correct counsel’s deficient performance, although a “careful explanation” specifically correcting misadvice may cure any prejudice that misadvice may cause.  Id. at 253-54.

As to the prejudice prong of the Strickland inquiry, the Court notes that a defendant is prejudiced if “there is a reasonable probability that, but for counsel’s errors, [a defendant] would not have pleaded guilty and would have insisted on going to trial.  Hill v. Lockhart, 474 U.S. 52 (1985).  In the context of a guilty plea, the Fourth Circuit recognizes that a defendant is prejudiced if there is a reasonable probability that the defendant would have negotiated a plea agreement that did not affect his immigration status. United States v. Rodriguez-Vega, 797 F.3d 781, 788-89 (9th Cir. 2015); Kovacs v. United States, 744 F.3d 44, 52-53 (2d Cir. 2014).  Under these tests, and assessing Petitioner’s situation, the Court found that Petitioner demonstrated a reasonable likelihood that he would have negotiated for, and the government would have been amenable to, a plea agreement that had no immigration consequences.  Alternatively, Petitioner could have shown prejudice by showing a reasonable likelihood that, absent his counsel’s error, he would have gone to trial instead.  The Court reversed, vacated, and remanded Petitioner’s case for further proceedings consistent with this opinion.  It looks like Petitioner is going to be able to stay in the United States with his wife and children, a very humane result under the facts of this case.  Chief Judge Gregory, Judge Wynn and Judge Thacker on the opinion.

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Leonard v. Texas, 580 US__ (2017), Statement of J. Thomas respecting cert denial; Isn’t it Awesome when Liberals and Conservatives Can Come Together for Some Collective Outrage?

This cert denial involves civil forfeiture, the practice of law enforcement’s simply taking the property of suspected criminals and converting that property (or its proceeds) to their own personal use. In this case, it appears that the cert petition raised a due process challenge for the first time in the petition, and without giving the lower court an opportunity to pass on the claim. For that reason, the Court could not take up the case.  But this statement offers, in my opinion, fairly compelling reason to believe the Court may reach out to address this issue when the claim is properly before the Court. Good.  It’s about time.

Ms. Leonard’s son and a friend were stopped for a traffic infraction. Law enforcement conducted a search of the car and found a safe in the trunk. The son and his passenger gave conflicting stories about the content of the safe. Law enforcement obtained a search warrant and found the safe contained $201,100 and a bill of sale for a home in Pennsylvania. The state initiated civil forfeiture proceedings, claiming that the money was “substantially connected to criminal activity.” The Court of Appeals of Texas affirmed the trial court’s finding that the “suspicious circumstances of the stop” and the “contradictory stories” told by the occupants of the car supported, by a preponderance of the evidence, that the money was either the proceeds of a drug sale, or was intended to be used in such a sale. It does not appear that drugs were found in this car, or what the basis for this supposed drug connection was. Ms. Leonard testified at a hearing that the money was not related to drugs, but instead were proceeds from a house she sold in Pennsylvania. The court did not find her testimony sufficient to establish that she was an innocent owner.

So how did we get to a place where this kind of bullshit is even remotely legal?  Justice Thomas explains. Modern forfeiture statutes are designed to punish the owner of property used for criminal purposes. See, e.g., Austin v. United States, 509 U.S. 602, 618-19 (1993). When prosecutors prosecute people, it’s called exercising jurisdiction “in personam,” and it comes with a whole host of constitutional protections. When they seek property, they proceed “in rem” which comes with a much smaller panoply of protections (like no right to a jury trial, or heightened standard of proof). So because of this “distinct legal regime” civil forfeiture has become extensively used throughout the country, and highly profitable. In many places, law enforcement is allowed to keep 100% of the proceeds from these seizures which has led to well-documented abuse. Justice Thomas notes that in Tenaha, Texas, for example, officers were regularly seizing the property of out-of-town drivers and collaborated with the district attorney to coerce them into signing waivers of their property rights. In another case, law enforcement threatened to file unsubstantiated felony charges against a Latino driver and his girlfriend, and place their children in foster care, unless they signed over their property. And:

“In another, they seized a black plant worker’s car and all his property (including cash he planned to use for dental work), jailed him for a night, forced him to sign away his property, and then released him on the side of the road without a phone or money…He was forced to walk to a Wal-Mart, where he borrowed a stranger’s phone to call his mother, who had to rent a car to pick him up.”

Id. at 3.

The United States Supreme Court has justified the use of civil forfeiture by referencing the historical practice that existed at the time of the country’s founding. However, as Justice Thomas notes, the practice of forfeiture was much narrower at that time, generally only applying in cases of customs and piracy. Proceeding in rem in those cases made sense because the parties who were guilty of the crimes lived overseas and were beyond the personal jurisdiction of the United States. The forfeiture laws were also much more narrow in terms of the kinds of property that could be attached, and typically only covered instrumentalities of the crime (such as vessels), and not the proceeds of crimes (which is how these statutes are designed these days). But also, Justice Thomas notes that it’s not clear that, historically, these actions were necessarily civil actions. Some of the early US Supreme Court cases suggest they were criminal actions, which would call for additional procedural protections (again, jury trial, higher standard of proof). See, e.g. Boyd v. United States, 116 U.S. 616, 633-634 (1886) (“We are …clearly of [the] opinion that proceedings instituted for the purpose of declaring the forfeiture of a man’s property by reason of offenses committed by him, though they may be civil in form, are in their nature criminal”).

Given the historical precedence of these kinds of claims, but their continued expansion over the years, it seems highly likely that the Court is prepared to curtail the Government’s power in this context but without doing away with it completely. For those of us who have been watching this phenomenon through the years, it has long appeared like highway robbery.  It looks like perhaps now the Court agrees.

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US v. Diaz (2013 WL 322243) and US v. Hayes, 948 F.Supp.2d 1009 (2013): Two federal district judges disagree with the Federal Sentencing Guidelines policies regarding drug trafficking sentences.

These two important opinions offer thoughtful rebukes to the often draconian sentences imposed in federal court on defendants convicted of drug trafficking offenses.

First, Judge John Gleeson of the Eastern District of New York issued this Memorandum Explaining a Policy Disagreement with the Drug Trafficking Offense Guideline. Judge Gleeson was asked to sentence Ysidro Diaz, who was convicted of attempting to sell a kilogram of heroin to an undercover agent.  Because of the weight and type of drug, he was charged to the mandatory minimum 10-year sentence dictated under the federal sentencing guidelines.  Judge Gleeson has a fundamental policy disagreement with the length of imprisonment recommended by the United States Sentencing Commission’s Guidelines manual because it produces sentencing ranges that are “excessively severe.”  He finds these guidelines to be “deeply and structurally flawed.”

The flaw is simply stated:  the Guidelines ranges for drug trafficking offenses are not based on empirical data, Commission expertise, or the actual culpability of defendants.  If they were, they would be much less severe, and judges would respect them more.  Instead, they are driven by drug type and quantity, which are poor proxies for culpability.

Id. at 1.

The opinion fully fleshes out Judge Gleeson’s argument, but he provides a helpful roadmap at the beginning.  His argument is essentially this:

  • District Judges are authorized to disagree on policy grounds with the Guidelines;
  • I disagree on policy grounds with the Guidelines range for drug trafficking offenses because they are not based on empirical data and national experience;
  • Those ranges are excessively severe because they subject all drug trafficking defendants to the harsh weight-driven regime the ADAA (Anti -Drug Abuse Act of 1986, passed after Len Bias died of a drug overdose) intended only for managers and leaders of drug organizations;
  • Those ranges are not now and have never been “heartland” sentences;
  • The drug trafficking offense guideline has been a major contributor to the dramatic increase in the federal prison population;
  • The Commission should “de-link” the drug trafficking Guidelines range from the ADAA’s weight-driven mandatory minimum sentences and use its resources,
  • knowledge, and expertise to fashion fair sentencing ranges for drug trafficking offenses. In the meantime, it should reduce those ranges by a third;
  • The Commission should make the drug trafficking offense guideline more sensitive to factors directly relevant to culpability, including the defendant’s role in the offense, and less sensitive to drug type and quantity;
  • The Commission’s stated reasons for refusing to de-link the drug trafficking Guidelines ranges from the mandatory minimum sentences are wrong;
  • The Commission should welcome (rather than seek to stifle as it currently does) policy disagreements expressed by sentencing judges;
  • The federal judiciary has repeatedly told the Commission that the drug trafficking Guidelines ranges should be de-linked from the mandatory minimum sentences, and the Commission should stop ignoring that message;
  • Whatever else it does or fails to do, the Commission should at least desist from its current practice of freighting the debate over adherence to the Guidelines with suggestions of racial disparity.

Judge Gleeson found that the fact that drug quantity is a poor proxy for culpability has been evident for two decades. A Department of Justice report in 1994 found that “[r]egardless of the functional role a defendant played in the drug scheme, the drug amounts involved in the offense are similar across the roles.”  Therefore, defendants with very different roles–whether peripheral or central to the drug scheme, were receiving the same sentences.  U.S. DEP’T OF JUSTICE, NAT’L INST. OF JUSTICE, AN ANALSYSIS OF NON-VIOLENT DRUG OFFENDERS WITH MINIMAL CRIMINAL HISTORIES 120 (1994).

Judge Mark Bennett of the Northern District of Iowa cited to Judge Gleeson’s opinion in U.S. Hayes.  In Hayes, Bennett notes his policy disagreement with the guidelines applicable to methamphetamine.  Noting that he has the authority to depart from the Guidelines based on policy disagreement, see e.g. Spears v. United States, 555 U.S. 261, 263-67 (2009) (per curiam), Kimbrough v. United States, 552 U.S. 85, 109-10 (2007), he proceeded to do so in this case.   Judge Bennett shares nearly all of the same concerns voiced by Judge Gleeson, including, most notably, that drug weight is a very poor proxy for criminal culpability. Judge Bennett’s opinion also identifies some interesting, methamphetamine-specific facts.  For example, in 2010, a mandatory minimum sentence applied in 83.1% of all methamphetamine cases, the highest rate of any drug type.  More than 58% of these received some relief from the mandatory minimum at sentencing.  Also no other drug is punished more severely based on purity, a fact that makes little empirical sense when you consider a courier or mule has no idea what the purity of the product may be.  It makes no sense to sentence someone in that role more harshly than one moving around a lesser-pure product.  Judge Bennett’s opinion also cites to a number of other decisions where federal district court judges have announced their policy disagreements with the drug trafficking guidelines, so practitioners should be aware that additional opinions abound. For practitioners representing federal clients on drug charges, these opinions offer thoughtful and important arguments that may benefit your client.

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US v. Donald T. Hill (App. No. 15-4639) (4th Cir., filed 3/30/17): Prolonged Detention of Car Stop; Important Dissent by Judge Davis.

This is an interesting case addressing law enforcement’s prolonging a roadside detention. The short of it is that law enforcement is not particularly obligated to be efficient during a stop as it conducts its duties. Here, law enforcement was patrolling a neighborhood in Richmond, Virginia. They saw a car that slightly exceeded the posted speed limit, and then that car crossed a solid yellow line. They decided to pull the car over.  Time:  6:01. The driver of the car (not Hill) immediately stepped out of the car, but got back in when the officers told him to. One of the officers recognized this guy as someone who hangs out with people connected to robberies. He also recognized Hill, who was the passenger, as someone who had been the victim of a stabbing incident.

Hill was unable to produce identification.  The officer then entered the names of both guys into the National Crime Information Center (NCIC) database. About three minutes passed and the database returned an “alert” notifying the officer that both men had been associated with drug trafficking and were “likely armed.” The officer also realized that the driver had a suspended license. Time:  6:04.  The officer started writing summons for the driver– for reckless driving and suspended license. He also called for a K-9 unit.

The officer then stopped writing the summonses so he could check an additional database, PISTOL (“Police Information System Totally On Line”) which tracks every person who has prior contacts with Richmond police officers.  At the hearing, the officer testified this can be a lengthy process because PISTOL produces a list of all people who have the same name.  In this case, PISTOL produced a list of 8-9 people with the same name as the driver. The officer spent 3-5 minutes reviewing that list. While this officer was checking out PISTOL, the other cop was making small talk (yeah, right) with the driver and Hill.  This officer asked them three times whether they had drugs or firearms in the car.  After the third ask, Hill told him that he had a gun on him. The officer immediately yelled, “gun!” and the other officer assisted in securing Hill and taking his gun. As this was going on, the K-9 unit arrived.  The court found that approximately 20 minutes elapsed between the time of the stop and the moment that the officer yelled “gun!”.

Hill argued on appeal that the officers unlawfully extended the duration and scope of the traffic stop in violation of Hill’s Fourth Amendment rights. Specifically, he challenged one officer’s decision to talk with him and the driver instead of assisting the other officer searching the databases and writing the summonses. He also challenged the decision to request the K-9 unit and to search the PISTOL database.

Hill did not challenge the initial basis for the stop so the Court focused on the question of whether the “manner of execution [of the stop] unreasonably infringe[d]” on Hill’s rights under the Fourth Amendment.  Illinois v. Caballes, 543 U.S. 405, 407 (2005).  If a traffic stop is extended in time beyond the period that the officers are completing tasks related to the traffic infractions, the officers must either obtain consent from the individuals detained or identify reasonable suspicion of criminal activity to support the extension of the stop.  United States v. Williams, 808 F.3d 238, 245-46 (4th Cir. 2015).  The United States Supreme Court has recently clarified that extending a stop, even a de minimis length of time violates the Fourth Amendment. Rodriguez v. United States, 135 S. Ct. 1609 (2015).   In assessing the reasonableness of a stop, the Court will consider “what the police in fact do,” and whether the officers acted reasonably under the totality of the circumstances.  Rodriguez at 1616.

Here’s what cops get to do:

  • An officer may engage in certain safety measures during a traffic stop, but generally must focus on the initial basis for the stop.  United States v. Palmer, 820 F.3d 640, 649 (4th Cir. 2016).  An officer may engage in “ordinary inquiries incident to” the traffic stop, such as inspecting the driver’s license and license to operate the vehicle, has insurance, and whether driver has outstanding warrants.
  • Officers may also engage in other investigative techniques unrelated to the traffic infraction or the safety of the officers, but only so long as that activity does not prolong the roadside detention for the traffic infraction.

The Court quickly found that the officers’ actions in this case did not improperly prolong the detention, but also found that this case does not present a case of officers being intentionally dilatory in their duties.  The Court offers a very important final paragraph:

In sum, the Supreme Court’s decision in Rodriguez does not require courts to second-guess the logistical choices and actions of a police officer that, individually and collectively, were completed diligently within the confines of a lawful traffic stop.  We emphasize, however, that we are not confronted here with an officer’s decision to execute a traffic stop in a deliberately slow or inefficient manner, in order to expand a criminal investigation within the temporal confines of the stop without reasonable suspicion of criminal activity or consent of those detained.  In such a case, an officer’s actions delaying the completion of the stop may compel a different conclusion than the one we reach here.  In the present case, however, we hold that because the evidence shows that the officers acted with reasonable diligence in executing the tasks incident to the traffic stop, and the stop was not impermissibly expanded in scope or time beyond the pursuit of the stop’s mission, the district court did not err in denying Hill’s motion to suppress.

Judge Davis authored an important dissent, noting that Hill was not the driver of this car, he was merely the passenger.  Davis finds the purpose of this stop to be “well known to all of us”– this was a narcotics and firearms investigation, undertaken in the absence of reasonable suspicion that a narcotics or firearms violations were occurring.  As Judge Davis notes:  “the ill-fated “War on Drugs” has a sometimes overlooked and unmentioned casualty:  the Fourth Amendment.”  Davis would have reversed the denial of the motion to suppress pursuant to Rodriguez.

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US v. Keith Arthur Vinson, No. 15-4384 (4th Cir., filed 3/24/17) Misdeeds in the Blue Ridge Mountains

This case involves a woeful tale of real estate hijinks in the beautiful mountains outside of Hendersonville, NC.  Vinson was indicted and convicted for a number of fraudulent activities he engaged in during his attempt to develop an Arnold Palmer golf course and resort area called Seven Falls.  This was all a very swank affair, with a Founder’s Day promotion at the Biltmore Estate and ribbon cutting for the “fabulous golf academy.” Unfortunately, it also contributed to the insolvencies of the Bank of Ashville and Pisgah Community Bank. To read about how NOT to structure loans with banks and others (pro tip:  do not use straw borrowers, parking arrangements, nor should you shut down a co-developer’s access to your joint bank account), read the lengthy exegesis provided by the opinion.  But long story short, there were a number of people who sought to profit from Vinson’s activities, and they all flipped and testified against him.  He, alone, stood trial for these misdeeds and he was convicted and sentenced to 18 years in prison.  This appeal follows. He raised three claims on appeal: 1) the evidence was insufficient to support his conviction, 2) the trial court judge erred by giving a willful blindness instruction to the jury, and 3) his sentence was substantively unreasonable.

Appellate courts review sufficiency claims under a de novo standard.  United States v. Barefoot, 754 F.3d 226 (4th Cir. 2014). Challenging the sufficiency of trial evidence presents a heavy burden for an appellant, as “[r]eversal for insufficient evidence is reserved for the rare case where the prosecution’s failure is clear.”  See United States v. Ashley, 606 F.3d 135, 138 (4th Cir. 2010).  The Court quickly (and thoroughly) dispensed with this argument by pointing out evidence that Vinson knew the criminal objective of the conspiracy and willfully joined the conspiracy with the intent to further its unlawful purpose.  Indeed, he was the primary beneficiary of the conspiracy and received roughly $10 million for his use on the Seven Falls development.  The Court also dispensed with this argument relating to the straw purchaser agreements, noting that that material terms of the loans were not disclosed to the bank. The Court also found ample evidence of Vinson’s participation in these fraudulent schemes as an aider and abettor, and that he improperly converted funds from another for his Seven Falls development.

Vinson also argued the trial court erred by instructing the jury on willful blindness.  Under the willful blindness doctrine, the government may “prove knowledge by establishing that the defendant deliberately shielded himself from clear evidence of critical facts that are strongly suggested by the circumstances.”  United States v. Jinwright, 683 F.3d 471, 478-79 (4th Cir. 2012). A willful blindness instruction is appropriate when the defendant asserts a lack of guilty knowledge but the evidence supports an inference of deliberate ignorance. See United States v. Abbas, 74 F.3d 506 (4th Cir. 1996).   Again, the Court pointed to myriad factors that showed that Vinson knowingly and intentionally engaged in fraudulent activities.  The trial court did not abuse its discretion in giving that jury instruction to the jurors.

Lastly, Vinson argued that his sentence was substantively unreasonable.  In support of this claim, he pointed to the sentences given to his co-conspirators which were significantly lower than his sentence.  Unfortunately, the court did not agree.  “[C]omparing the sentences of defendants who helped the Government to those of defendant who did not…is comparing apples and oranges.”  See United States v. Perez-Pena, 453 F.3d 236, 243 (4th Cir. 2006).  All of these co-conspirators pleaded guilty.  Vinson was the only one who insisted on trial.  The Court found that, in these circumstances, the presumption of reasonableness applied and his sentence should stand.

The Court affirmed both Vinson’s guilt and 18-year sentence.

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United States v. Juan Elias Lara (4th Cir, 3/14/17): Psychotherapist-Patient Priv and 5th Amendment Protections in Interviews with Supervision Agents

This case raises an important issue– the extent to which statements made to a supervisory government agent (like a probation agent, or as in this case, a sex offender treatment program provider) can remain confidential.  Not good news for the more criminal-defense minded among us.

Lara was convicted in Virginia state court for a sex assault.  He was sentenced to 20 years, with 17 years suspended and a term of 20 years of probation (!).  As a term of his supervised probation, he was ordered to attend and successfully complete a Sex Offender Treatment Program and to permit the program to have “unrestricted communication with the probation and parole department” and to “submit to any polygraph.”  Lara signed the form listing these conditions.  He was then released and referred to a sex offender treatment program.  There, he was interviewed by a licensed clinical social worker.  During that interview, he disclosed other sexual assaults he had committed and his involvement in two murders (!!).  He confirmed all this by way of a polygraph he took a few weeks later.  Three months after that, he signed a form called “Sex Offender Program Acknowledgment of Confidentiality Waiver” acknowledging that whatever Lara tells a therapist or group leader is not privileged.  Lara completed his probation without incident . . . until . . .

He moved from Virginia to Texas and failed to notify his probation agent, nor did he register with the Sex Offender and Crimes Against Minors Registry maintained by Virginia.  He was ultimately indicted for violating the Sex Offender Registration and Notification Act (SORNA), 18 U.S.C. 2250.

Lara pleaded guilty and filed a motion to exclude from consideration at sentencing the admissions of other criminal activity he told the clinical social worker.  The district court denied his motion.

Lara raised two claims for the court’s consideration.  First, he argued that the district court erred in concluding that he knowingly and voluntarily waived the psychotherapist-patient privilege because he was “compelled to participate” in the treatment program.  He also argued that the district court’s using of the statements he made to the social worker violated his 5th amendment privilege against self-incrimination.

As for the psychotherapist-patient claim, the Court found that Lara’s waiver was knowing and voluntary.

Probation is “one point…on a continuum of possible punishments” imposed on those convicted of a crime.  Samson v. California, 547 U.S. 843, 848 (2006) (quoting United States v. Knights, 534 U.S. 112, 119 (2001).  Therefore, courts administering probation “may impose reasonable conditions that deprive the offender of some freedoms enjoyed by law-abiding citizens.”  Knight, 534 U.S. at 119.  Essentially the Court found that Lara could have decided just to stay incarcerated if he didn’t like the terms and conditions of probation, so his acquiescence was “voluntary.”  See McKune v. Lile, 536 U.S. 24, 50 (2002) (opinion of O’Connor, J.) (concluding that the defendant had a voluntary choice, and was not compelled to incriminate himself, when required to participate in a sex offender treatment program to avoid transfer from a medium-security to a maximum-security area of a prison).

As for the 5th Amendment claim, the Court was not persuaded by that argument either.  Lara didn’t invoke his 5th Amendment right at the time he gave his statements, and the Court did not find that his conditions of probation fell within the narrow “penalty” exception to the rule:

To invoke the Fifth Amendment privilege against self-incrimination, a defendant “ordinarily must assert the privilege rather than answer if he desires not to incriminate himself.”  Minnesota v. Murphy, 465 U.S. 420, 429 (1984).  One exception to this general rule occurs in “penalty” cases, in which assertion of the privilege results in a penalty that essentially “foreclose[s] a free choice to remain silent.”  Id. at 434 (internal brackets omitted).  As the Supreme Court has explained, in order for conditions of probation to provide a sufficient “penalty” to overcome a defendant’s free choice to remain silent, the threat of revocation must be nearly certain.  In this case, Lara was never threatened with the imposition of a penalty sufficient to overcome his freedom of choice to remain silent.  For this reason, no Fifth Amendment violation.

So, an important case for those clients who have given statements in connection with probation or supervised release.  Those statements are not going to held privileged should your client find himself in trouble in the future.

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People v. Scott Evans Dekraai, 5 Cal. App. 5th 1110 (2016), When Prosecutors Have a Conflict of Interest Due to Their Loyalty to Law Enforcement

This is an extraordinary opinion in an extraordinary case. Although the events of this case arise in Orange County, California, it’s still highly relevant to our practice on this side of the country because of the willingness of prosecutors here to use snitches and informants with (as far as I can tell) no oversight.  There’s really nothing to keep this kind of scandal from happening in our neck of the woods. But more broadly, this offers an important view into conflicts of interest between state prosecutors and their law enforcement entities.

Dekraai was charged with a horrific capital crime in California. He was placed in the Orange County jail.  Deputy Sheriffs moved a guy named Fernando Perez, a confidential informant, near him. They became “friends” and Dekraai allegedly made incriminating statements to him.  Perez wrote down the statements and gave them to his handler,  a cop. That information went up the chain, and an assistant district attorney, Senior Deputy DA, an investigator and cop then spoke to Perez. They placed a recording device in Dekraai’s cell and he made additional statements to Perez. Around this time (it’s not clear from the opinion exactly when), he was appointed a public defender.

Perez and another inmate were part of “Operation Black Flag”– they were informants used to combat criminal gang activity in Orange County, in conjunction with the Santa Ana Police Department, the AUSA, and a state deputy DA.  His work as an informant was well known to law enforcement.

In light of the government’s conduct of obtaining these recordings, Dekraai’s lawyers filed a number of motions:  1) to dismiss the death penalty based on outrageous governmental conduct, 2) to recuse the Orange County DA’s office pursuant to a state statute and due process clause, 3) to exclude his statements pursuant to Massiah v. United States, 377 U.S. 201 (1964) (prosecution may not use evidence obtained in violation of Sixth Amendment right to counsel). The state court held an evidentiary hearing on the motions.  The court heard testimony from 36 witnesses.

Among other topics, Perez testified he became a “CI” because it was “the right thing to do” but he hoped his cooperation would be taken into account. He said no one promised him anything. He claimed he did not ingratiate himself to anyone to get them to talk– but he acknowledged he had an incentive to have them cooperate because he was facing two life sentences. Perez provided information on numerous inmates. The state prosecutors did not disclose to Dekraai’s lawyers that Perez had worked for the State in these other cases.

This opinion is extremely heavy on facts, but it is enough to know that, after this first hearing, the trial court denied defense counsel’s motion to recuse the DA’s office. The court found that the DA’s office committed Brady violations (or “errors”) and that the DA’s justifications were not persuasive (i.e. misunderstanding the law, heavy caseloads, uncooperativeness of federal authorities, and failure to anticipate defense strategy).  But the court found that the evidence demonstrated that “it [was] more likely than not” law enforcement did not intentionally house Dekraai and Perez in adjoining cells and that “independent events” brought them together. The Court further found insufficient evidence that the DA’s office had a conflict of interest.

FAST FORWARD:

Defense counsel filed a motion for reconsideration based on newly discovered evidence that trial counsel uncovered as the result of a subpoena in another criminal case.  The new evidence consisted of so-called “TRED records,” the Sheriff’s Department’s “dated computer entries that include the purported reasons for both jail housing movements and classification decisions.”  Lo and behold, there were actual records detailing just how it came to be that Perez, their snitch, was placed in a cell next to Dekraai, facing the death penalty for his crimes.

The court then held a second evidentiary hearing where it was revealed:

  • There were thousands of TRED entries for the Orange County Jail that detail why inmates are moved.
  • It appears that the officers were discouraged by their superiors from even acknowledging the existence of TRED records.
  • One of the officers who testified in the first hearing, and who was asked about his testimony in this second hearing, essentially fell apart on the stand and testified that he was told not to discuss TRED entries.

Once the court heard all this, it granted the motion to recuse. The court analyzed the issue under a California state statute that specifically addresses motions to recuse a prosecutor.  The court found that the DA’s office had a conflict of interest and that it was “more likely than not” that the DA would treat the defendant unfairly during some portion of the criminal proceedings” (Wow!).  Here is some language from the case:

Additionally, we conclude there is other uncontradicted evidence from OCDA employees that supports the court’s conclusion the OCDA’s conflict of interest was so grave it was unlikely Dekraai will receive a fair penalty hearing. Wagner admitted Tanizaki, his direct supervisor, and Rackauckas were aware of Dekraai’s motions and some of the allegations. Wagner also admitted he made public comments the motion included “scurrilous allegations” and “untruths” before he had read the entire motion, which demonstrates he had prejudged its merits . . . How could the trial court expect the OCDA to properly supervise OCSD and fairly prosecute the penalty phase when one of the DA’s prosecuting Dekraai failed to acknowledge any wrongdoing on the prosecution team’s part in the Dekraai case?

Id. 554.

And, using even more powerful language, the court found:

No, the recusable conflict of interest, a divided loyalty, is based on the OCDA’s intentional or negligent participation in a covert CI program to obtain statements from represented defendants in violation of their constitutional rights. The conflict here is “real,” it is “grave,” and goes well beyond simply “distasteful or improper” prosecutorial actions.  The trial court’s recusal of the entire OCDA’s office was a necessary step to ensure Dekraai’s personal right to a fair penalty trial.

Id. at 555.

Based on the DA’s office’s “loyalty” to its Sheriff’s Office, at the expense of the defendant’s rights to due process, this court recused the entire office from the prosecution of this case.  A very fair and reasoned outcome, and an important lesson for those charged with a duty to seek justice, and not just convict defendants.  But it also highlights a more concerning issue (in my opinion) and that is oversight of law enforcement use of informants, especially in state cases.  As far as I can tell, there are no guidelines or protocols for their use, and I’ve had two cases now, on appeal, where law enforcement simply did not disclose the use of their informants in other cases (and which would clearly be relevant to bias or interest in the case before the court).  Lucky for this defendant, his attorneys were tenacious in their efforts to uncover this abuse.

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USA v. Erik Lindsey Hughes (11th Cir. 2017) What is the SCOTUS holding when the Court splits?

Against a federal plea agreement backdrop, this case is interesting because it addresses how to apply United States Supreme Court precedent when the Court’s opinion is split. Hughes was indicted for several offenses and, after negotiations with the Government, he entered a plea agreement that gave him a prison sentence below the federal sentencing guidelines. Given his charges, the sentencing range was 188- 235 months. He received a sentence of 180 months. A year later, Hughes sought a sentence reduction under 18 USC 3582(c)(2) which allows a court to reduce a term of imprisonment for a “defendant who has been sentenced …based on a sentencing range that has subsequently been lowered by the Sentencing Commission. Hughes sought a reduction based on Amendment 782 which reduced the offense levels for certain drug offenses and apply retroactively.  Under Amendment 782, Hughes’s sentencing range was 151- 188 months. The district court denied Hughes’s motion.

This same issue came before the United States Supreme Court in Freeman v. United States, 564 U.S. 522 (2011). There, the Court split over the question of whether defendants, like Hughes, who enter into plea agreements that recommend a particular sentence as a condition of their plea were sentenced “based on a sentencing range.”  Five justices agreed that Freeman’s sentence could be reduced, but they differed as to their reasoning.  Justice Sotomayor concurred only in the judgment.  In her concurring opinion, she found that “the term of imprisonment imposed by the district court is “based on” the agreement itself, not on the judge’s calculation of the Sentencing Guidelines.”

“When a fragmented Court decides a case and no single rationale explaining the result enjoys the assent of five Justices, “the holding of the Court may be viewed as that position taken by those Members who concurred in the judgments on the narrowest grounds.”  Marks v. United States, 430 U.S. 188, 193 (1977). “The Marks Court did not elaborate on how to identify the narrowest grounds.” Bryan A. Gardner, et al., The Law of Judicial Precedent 199-200 (2016). “But the prevailing view is that the narrowest grounds are those that, when applied to other cases, would consistently produce results that a majority of the Justices supporting the result in the governing precedent would have reached.”  Id. at 200. For the Eleventh Circuit, “narrowest grounds” means the “less far-reaching’ common ground.”  United States v. Robison, 505 F.3d 1208, 1221 (11th Cir. 2007) (quoting Johnson v. Bd. of Regents, 263 F.3d 1234, 1247 (11th Cir. 2001). Eight sister circuits also agree that Sotomayor’s concurring opinion is the holding of Freeman. In the Fourth Circuit, the court reached the conclusion because “the plurality would surely agree that in every case in which the defendant’s [Rule 11(c)(1)(C)] plea agreement satisfies the criteria for Justice Sotomayor’s exception…the sentencing judge’s decision to accept that sentence is based on the guidelines.” United States v. Brown, 653 F.3d 337, 340 n.1 (4th Cir. 2011).

Based on this, the Court found that Hughes was not eligible for a sentence reduction because his sentence was not based on a sentencing guidelines range.  He is therefore not eligible for a reduction under Amendment 782.

So there you have it.  When you see an opinion that is highly split, this is how you determine its holding.  Also, bad news for Mr. Hughes.

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Salman v. United States, 580 U.S.__ (2016) Insider Trading, What Does the Tipper Have to Get for it to be Criminal?

Short answer:  Nothing.

Longer answer:  Section 10(b) of the Securities Exchange Act of 1934 and Rule 10(b)(5) prohibit undisclosed trading on inside corporate information by individuals who are under a duty of trust and confidence (“fiduciary duty”) that prohibits them from secretly using that information for personal advantage. This is typically called “insider trading.” If someone does this, they are subject to criminal and civil liability. But ALSO, these people who have the insider information, may not give that information to others for trading, either. The “tippee” acquires the “tipper’s” duty to disclose, or duty to abstain from trading, if the tippee knows the information was disclosed in breach of the tipper’s duty.  In Dirks v. SEC, 463 U.S. 646 (1983), the Court held a tipper breaches his or her fiduciary duty when the tipper discloses the inside information for personal benefit. A jury can infer personal benefit where the tipper receives something of value in exchange for the tip or “makes a gift of confidential information to a trading relative or friend.”  Id. at 664.

Here, Salman challenged his convictions for insider trading. Salman received trading tips from an extended family member who had received the information from Salman’s brother-in-law.  Salman traded on that information.  He argued that he could not be held liable as a tippee because the tipper (his brother-in-law) did not personally receive money or property in exchange for the tips and therefore did not personally benefit from them.  The Second Circuit Court of Appeals disagreed and held that Dirks allowed the jury to infer that the tipper breached a duty because he made a “gift of confidential information to a trading relative.”  792 F.3d 1087, 1092 (CA9 2015).

The Facts

Maher Kara was an investment banker with Citigroup. He handled matters of mergers and acquisitions involving Citigroup’s clients. Kara was close to his older brother, Mounir Kara (“Michael”). He began discussing his work with Michael.  Michael began to trade on the information he was getting from his brother regarding these mergers and acquisitions.  Michael began to feed this information to others, including Salman. Maher knew about it. Salman knew the information was coming to him by way of the breach of a fiduciary duty. By the time the authorities caught on, Salman made over $1.5 million in profits that he split with another relative who executed trades on Salman’s behalf. After he was convicted, Salman was sentenced to 36 months of prison and $730,000 in restitution.

The Result

The Court had little problem finding a violation here which is not surprising. As it held in Dirks, a tippee is exposed to liability for trading on inside information only if the tippee participates in a breach of the tipper’s fiduciary duty. Whether the tipper breached that duty depends “in large part on the purpose of the disclosure” to the tippee. 463 U.S. at 662. “[T]he test is whether the insider personally will benefit, directly or indirectly, from his disclosure.” Ibid. Specifically, the Court found that “[t]he elements of fiduciary duty and exploitation of nonpublic information also exist when an insider makes a gift of confidential information to a trading relative or friend.”

So, it does not matter that the initial tipper did not receive any monetary or other financial reward. What matters is that the information to Michael was a “gift of confidential information to a trading relative” and that Salman knew that when he traded.  The Court found Salman’s conduct “in the heartland” of Dirks‘s rule concerning gifts:

            It remains the case that “[d]etermining whether an insider personally benefits from a particular disclosure, a question of fact, will not always be easy for courts.”  463 U.S., at 664.  But there is no need for us to address those difficult cases today, because this case involves “precisely the ‘gift of confidential information to a trading relative’ that Dirks envisioned.”  792 F.3d 1092 (quoting 463 U.S., at 664).

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