Gillen Withers & Lake LLC has launched a new website at http://twitherslaw.com/. The site lists many of the notable successes which the firm has had in its history. We would like to thank our readers and encourage them to take a look at the new site.
As reported here and here in the Atlanta Journal-Constitution, the Southern Christian Leadership Conference has had its own leadership under scrutiny by investigators. This week, three SCLC officials met in Atlanta with Federal and local authorities investigating allegations that its National Chairman and its former Treasurer allegedly mishandled hundreds of thousands of dollars. Last week, FBI agents in Dayton, Ohio, raided the home of its Chairman, Reverend Raleigh Trammell, the home of Trammell's daughter, Angela Goodwine, as well as the SCLC's Dayton office. Rev. Trammell and former national Treasurer Spiver Gordon are alleged to have diverted at least $569,000 in SCLC funds to bank accounts which they controlled and made out checks to themselves and their relatives. The SCLC's Atlanta General Counsel, Dexter Wimbush, has voluntarily and temporarily stepped down.
Law enforcement agencies in Georgia, Ohio and Alabama were provided information on possible mismanagement of SCLC funds.
We received an excellent reader question regarding what factors do Federal courts consider in imposing punishment on corporations or organizations in criminal proceedings. Corporations of course, don’t “go to jail.” The Government does collect its $200 however, since the organization sentencing provisions of the United States Sentencing Guidelines are primarily fine-driven. And while there is a massive body of law concerning factors which must be considered in imposing sentence on individuals, caselaw relating to considerations in imposing punishment on corporations is relatively sparse.
However, areas which courts consider in sentencing corporations or organizations, and conversely areas which corporate criminal counsel may emphasize in order to attempt to mitigate the consequences to their corporate clients, may be discerned from the Guidelines themselves. In many cases, such as relating to acceptance of responsibility and role in the offense, these considerations closely parallel those for individual defendant. The questions facing a corporation at sentencing will boil down to how much will the corporation be made to pay in the form of fines and restitution, and what conditions will be imposed on the corporation.
The relevant portion of the Guidelines is Chapter Eight. Imposing a sentence on a corporation or organization in a Federal criminal case involves a complex determination by the sentencing court. In brief, the court must:
1. Determine whether any restitution, remedial orders or community service should be ordered;
2. Determine the amount of the fine, including determining the corporation’s or organization’s “culpability score”;
3. Determine whether any departures or probation is appropriate.
The Introductory Commentary to Chapter Eight states that it is designed “designed so that the sanctions imposed upon organizations and their agents, taken together, will provide just punishment, adequate deterrence, and incentives for organizations to maintain internal mechanisms for preventing, detecting, and reporting criminal conduct.” U.S.S.G., Ch. 8, Pt. A, Introductory Commentary. The sentencing provisions of Chapter Eight are intended to reflect the general principles that:
First, the court must, whenever practicable, order the organization to remedy any harm caused by the offense. The resources expended to remedy the harm should not be viewed as punishment, but rather as a means of making victims whole for the harm caused.
Second, if the organization operated primarily for a criminal purpose or primarily by criminal means, the fine should be set sufficiently high to divest the organization of all its assets.
Third, the fine range for any other organization should be based on the seriousness of the offense and the culpability of the organization. The seriousness of the offense generally will be reflected by the greatest of the pecuniary gain, the pecuniary loss, or the amount in a guideline offense level fine table. Culpability generally will be determined by six factors that the sentencing court must consider. The four factors that increase the ultimate punishment of an organization are: (i) the involvement in or tolerance of criminal activity; (ii) the prior history of the organization; (iii) the violation of an order; and (iv) the obstruction of justice. The two factors that mitigate the ultimate punishment of an organization are: (i) the existence of an effective compliance and ethics program; and (ii) self-reporting, cooperation, or acceptance of responsibility.
Fourth, probation is an appropriate sentence for an organizational defendant when needed to ensure that another sanction will be fully implemented, or to ensure that steps will be taken within the organization to reduce the likelihood of future criminal conduct.
U.S.S.G., Ch. 8, Pt. A, Introductory Commentary. The provisions are designed to offer “incentives” to corporations or other organizations to police and eliminate criminal conduct through compliance and ethics programs. U.S.S.G., Ch. 8, Pt. A, Introductory Commentary.
The Introductory Commentary to Part B of Chapter Eight states:
As a general principle, the court should require that the organization take all appropriate steps to provide compensation to victims and otherwise remedy the harm caused or threatened by the offense. A restitution order or an order of probation requiring restitution can be used to compensate identifiable victims of the offense. A remedial order or an order of probation requiring community service can be used to reduce or eliminate the harm threatened, or to repair the harm caused by the offense, when that harm or threatened harm would otherwise not be remedied.
U.S.S.G., Ch. 8, Pt. B. Guideline Section 8B1.1 requires a court to enter a restitution order for the full amount of a victim’s loss if such an order is authorized. Section 8B1.3 authorizes a court to order community service as a condition of probation “where such community service is reasonably designed to repair the harm caused by the offense.” U.S.S.G. § 8B1.3. The commentary on Section 8B1.3 notes that the community service should be “related to the purposes of sentencing.” U.S.S.G. § 8B1.3, Cmt.
Guidelines Section 8B2.1 describes an “effective compliance and ethics program.” It states that, in order to have an effective compliance and ethics program, a corporation or organization must:
1. Exercise due diligence to prevent and detect criminal conduct and establish standards and procedures to prevent and
detect criminal conduct;
2. “[P]romote an organizational culture that encourages ethical conduct and a commitment to compliance with the law”;
3. Ensure that the corporation’s or organization’s governing authority is knowledgeable about the compliance and ethics program and that specific individuals have day-to-day responsibility for the program; and
4. Take reasonable steps to ensure that the compliance and ethics program is followed, enforced and evaluated.
A critical provision is Guidelines Section 8C2.5, which governs determination of a corporation’s “culpability score.” That section provides for a base score of 5 points with increases or decreases to the level for:
1. Condoning, tolerating or “willful ignorance” of criminal activity by corporate governing authorities or high-level personnel;
2. Any prior history of misconduct;
3. Any violation of orders or obstruction of justice; and/or
4. Self-reporting, cooperation and acceptance of responsibility.
With regard to a decrease in culpability level for cooperation, the Application Notes state that:
[C]ooperation must be both timely and thorough. To be timely, the cooperation must begin essentially at the same time as the organization is officially notified of a criminal investigation. To be thorough, the cooperation should include the disclosure of all pertinent information known by the organization. A prime test of whether the organization has disclosed all pertinent information is whether the information is sufficient for law enforcement personnel to identify the nature and extent of the offense and the individual(s) responsible for the criminal conduct.
U.S.S.G. § 8C2.5, Note 12.
Another vital provision is Guideline Section 8C2.8—the corporate equivalent of Code Section 3553(a) which courts must consider in sentencing individuals. Section 8C2.8 provides:
(a) In determining the amount of the fine within the applicable guideline range, the court should consider:
(1) the need for the sentence to reflect the seriousness of the offense, promote respect for the law, provide just punishment, afford adequate deterrence, and protect the public from further crimes of the organization;
(2) the organization’s role in the offense;
(3) any collateral consequences of conviction, including civil obligations arising from the organization’s conduct;
(4) any nonpecuniary loss caused or threatened by the offense;
(5) whether the offense involved a vulnerable victim;
(6) any prior criminal record of an individual within high-level personnel of the organization or high-level personnel of a unit of the organization who participated in, condoned, or was willfully ignorant of the criminal conduct;
(7) any prior civil or criminal misconduct by the organization other than that counted under §8C2.5(c);
(8) any culpability score under §8C2.5 (Culpability Score) higher than 10 or lower than 0;
(9) partial but incomplete satisfaction of the conditions for one or more of the mitigating or aggravating factors set forth in §8C2.5 (Culpability Score);
(10) any factor listed in 18 U.S.C. § 3572(a); and
(11) whether the organization failed to have, at the time of the instant offense, an effective compliance and ethics program within the meaning of §8B2.1 (Effective Compliance and Ethics Program).
(b) In addition, the court may consider the relative importance of any factor used to determine the range, including the pecuniary loss caused by the offense, the pecuniary gain from the offense, any specific offense characteristic used to determine the offense level, and any aggravating or mitigating factor used to determine the culpability score.
U.S.S.G. § 8C2.8. The Application Notes to Section 8C2.8 further state, in relevant part, “[i]f punitive collateral sanctions have been or will be imposed on the organization, this may provide a basis for a lower fine within the guideline fine range.” U.S.S.G. § 8C2.8, Note 2.
Finally, Part C of Chapter Eight provides for departures from a sentence/fine if a court finds “that there exists an aggravating or mitigating circumstance of a kind, or to a degree, not adequately taken into consideration by the Sentencing Commission in formulating the guidelines that should result in a sentence different from that described.” U.S.S.G., Ch. 8, Pt. C, Introductory Commentary. The relevant potential grounds for upward or downward departures are:
1. Substantial assistance to authorities under Section 8C4.1;
2. Risk of death or bodily injury under Section 8C4.2;
3. Threat to the environment under Section 8C4.4;
4. Threat to a market under Section 8C4.5;
5. Public entity (ground for downward departure) under Section 8C4.7;
6. If members or beneficiaries of the corporation or organization are also victims (ground for downward departure) under Section 8C4.8;
7. Whether the remedial costs exceed the gain from the offense under Section 8C4.9; and
8. Mandatory programs to detect and prevent violations of the law under Section 8C4.10.
From this maze of Guidelines, the following potential points can be derived for corporate criminal counsel to potentially argue in favor of a low or lesser punishment or fine, departure or for mitigation generally:
These points may also furnish useful guidelines or tips for corporate officers or members and counsel in attempting to devise appropriate responses in the event of notice of alleged wrongdoing and/or a criminal investigation.
As reported by Law.com, New York-based Comverse Technology, Inc., the worlds largest manufacturer of voice mail software, has entered into a $225 million settlement in a class action brought against it stemming from a backdating scandal. William Sorin, Comverse's former general counsel, and Comverse's former CEO, Jacob "Kobi" Alexander, were charged by the SEC and Federal prosecutors in 2006 with fraudulenty changing the grant dates of stock option awards from 1998 to 2000. In all, Sorin realized $14 million in profits from stock options, approximately $1 million of which was due to backdating. Sorin pled guilty in the U.S. District Court for the Eastern District of New York to conspiracy to commit securities fraud, mail fraud and wire fraud in 2006, and has already served his sentence of a year and a day in prison. Alexander an Israeli citizen, fled to Namibia to avoid prosecution.
Plaintiffs brought a derivative actions against Comverse in New York Federal and State courts based on the backdating. Alexander has agreed to pay $60 million and Sorin has agreed to pay $1 million to fund the settlement. In exchange, Comverse will drop its lawsuit against the former executives, who will also drop their counterclaims against the company. The company earlier settled claims relating to the improper backdating and other accounting problems with federal regulators.
Sorin had previously entered into a settlement with the SEC, agreeing to pay $3 million in fines. However, his attorneys have asked the Court to vacate the SEC settlement and judgment, claiming that Federal prosecutors violated promises they made as part of his plea deal. Sorin claims that prosectors agreed not to object to his request to avoid jail time when he agreed to plead guilty to criminal charges and pay the SEC $3 million to settle civil charges, however he alleges that the government reneged on its promise and opposed his request at sentencing.
Financier Sir Robert Allen Stanford continues to seek access to funds to pay for his defense to charges of defrauding investors of hundreds of millions of dollars. On July 31, Mr. Dick DeGuerin of DeGuerin & Dickson filed a Motion to Withdraw as Attorney of Record for Stanford. The Motion stated that Stanford had received a press release and a facsimile informing Mr. DeGuerin that Stanford was replacing him with Mr. Robert Luskin and other attorneys with the firm of Patton Boggs LLP.
On August 4, Stanford filed an Expedited Motion to Permit New Attorneys to Appear for Limited Purpose, seeking to allow the firms Patton Boggs and Sydow & McDonald LLP to appear in the case for the limited purpose of resolving Stanford's access to monies to pay his legal fees and expenses. The memorandum in support of the Motion, filed by Michael D. Sydow of Sydow & McDonald, relates that the Securities and Exchange Commission has seized and frozen Stanford's assets and those of his companies and placed the assets and Stanford's records under the control of a Receiver. The memorandum also relates that, although Stanford is the beneficiary of directors & officers liability provisions of insurance policies through his companies, the insurers have denied coverage because the Receiver has claimed that all insurance proceeds belong to the Receivership Estate. The attorneys state that, if they are successful in receiving sufficient assurances that their legal fees will be paid, they will enter full appearances on Stanford's behalf.
The Government has filed a Response to the Motion. It maintains that allowing such a conditional appearance would create a risk of indefinite delay in the proceedings. It also points out that Patton Boggs already represents Stanford in the SEC proceeding, and that it is capable of litigating Stanford's access to funds in that proceeding. The Government requests that the attorneys' request to make a conditional limited appearance be denied.
Stanford's dilemma is a familiar one in white collar criminal cases. A defendant's assets are frozen, depriving him or her of the means to pay for private counsel to defend against complex criminal charges. The defendant is then given appointed counsel who, in most cases, provide a skilled and competent defense, but in others merely increase the Government's chances of obtaining a plea or conviction.
Sir Robert Allen Stanford is scheduled to be arraigned today on conspiracy, mail and wire fraud, money laundering and obstruction charges in Houston in the U.S. District Court for the Southern District of Texas. Stanford is represented by attorneys Dick DeGuerin and Sean Ryan Buckley, of the Houston firm of DeGuerin and Dickson.
According to the docket for the case, the Government obtained its 21-count indictment, which can be viewed here, last Thursday and promptly moved to seal (i.e. prevent public access to) it, and then unsealed it on Friday shortly before Stanford’s arrest.
The Court will likely revisit the issue of whether Stanford is entitled to release before trial. On Friday, the Court ordered co-defendants Mark Kuhrt and Gilberto Lopez released on a $100,000 unsecured bond. However, given Stanford’s considerable wealth and ties abroad, any amount of bond imposed in his case will undoubtedly be far higher, if Stanford is granted pre-trial release at all, that is. The U.S. District Court for the Eastern District of Virginia determined that Stanford posed a high risk of flight, and denied bond.
The case will be tried before U.S. District Judge David Hitter, a brief description of whom can be found here.
The writers of Federal Criminal Defense Blog have been busy writing on other matter and apologize for the brief hiatus. Much has happened in the sphere of white collar crime even during our short absence, most notably developments in the two largest Ponzi schemes in U.S. history, and we have some catching up to do.
We’ll start with the second largest—an indictment indictment against billionaire Texas financier Sir Robert Allen Stanford, 59, was unsealed in the U.S. District Court for the Eastern District of Virginia on Friday according to the Associated Press and the BBC. The 50-page indictment alleges that Stanford and six other defendants with allegedly perpetrated a $7 billion Ponzi-style fraud. It charges Stanford and the other defendants with 21 counts, including 7 counts of wire fraud, 10 counts of mail fraud, conspiracy to obstruct an investigation for the Securities and Exchange Commission, obstruction of an investigation by the SEC and conspiracy to commit money laundering. Defendants Laura Pendergest-Holt, Gilberto Lopez and Mark Kuhrt are executives of Stanford Financial Group. Defendant Leroy King, a former bank regulator for the Caribbean island nation of Antigua and Barbuda, allegedly accepted more than $100,000 in bribes from the other defendants in order to allow the alleged scheme to continue.
The indictment alleges that the defendants sold certificates of deposit issued by Stanford International Bank, based in Antigua, to investors, promising large returns. The defendants allegedly made false claims to investors regarding the growth of Stanford Financial Group’s assets.
The scheme had approximately 30,000 investors. Stanford is alleged to have diverted more than $1.6 billion in investment funds in personal loans to himself. More than $1 billion in investment money is allegedly unaccounted for. Stanford is also charged in the indictment with allegedly conspiring to obstruct an SEC proceeding. Stanford Financial Group’s finance chief, James M. Davis, is cooperating with investigators. Davis has been charged with fraud and obstruction in a separate indictment.
Stanford was the owner of a newspaper, two restaurants, and a development company in Antigua, and was a cricket enthusiast and owner of the Stanford cricket grounds in Antigua. In 2008, Stanford staged a $20 million, winner-takes-all, match between a West Indian XI and England at the grounds. In 2006, Stanford became the first American to be knighted by Antigua and Barbuda.
Stanford is represented by attorney Dick DeGuerin, who has issued a statement to the press that Stanford is innocent of the charges. Stanford has made repeated statements as to his innocence and has alleged that no money was lost.
Stanford surrendered to the FBI on Thursday and had his initial appearance on Friday. U.S. Magistrate Judge Hannah Lauck determined that Stanford posed a flight risk and ordered him to remain in custody pending a future detention hearing in Houston. Several governments have frozen his assets. Stanford faces as much as 250 years in prison if convicted.
By way of background, the Government originally charged Syed Haris Ahmed in a sealed indictment filed on March 23, 2006. The Government obtained a Superseding Indictment on July 19, 2006. It has charged Ahmed and his co-defendant, Ehsanul Islam Sadequee, with one count of conspiracy to provide material support to terrorists, in violation of Title 18 United States Code Sections 956 and 2332b; one count of providing and attempting to provide material support to terrorists, in violation of Title 18, Sections 956, 2332b and 2339A; one count of conspiracy to provide material support to a Designated Foreign Terrorist Organization, in violation of Title 18, Section 2339B; and one count of attempting to provide material support to a Designated Foreign Terrorist Organization, in violation of Title 18, Section 2339B.
The Government’s Superseding Indictment contains the following facts and allegations:
Ahmed was born in Pakistan in 1984 and became a naturalized U.S. citizen. Sadequee, who is allegedly nicknamed “Shifa,” was born in Virginia in 1986, and is of Bangladeshi descent.
In or around late 2004, Ahmed and Sadequee and another person engaged in alleged paramilitary training, including with paintball guns, in Northwest Georgia.
On or about February 26, 2005, Ahmed and Sadequee traveled to Toronto, Canada, by bus. While in Toronto, Ahmed and Sadequee allegedly met in person with “supporters of violent jihad” and “discussed strategic locations in the United States that were suitable for terrorist attack, including military bases and oil storage facilities and refineries.” Ahmed, Sadequee and the others allegedly also “explored how they might disrupt the world-wide Global Positioning System (GPS)” and “a plan for members of the group to travel to Pakistan to seek and receive paramilitary training that they would then use to engage in violent jihad.”
After returning to Atlanta, in or about March or April 2005, Ahmed and Sadequee further discussed these plans, and also the possibility of attacking Dobbins Air Reserve Base in Marietta, Georgia.
At or around this time, Sadequee was allegedly in communication with Younis Tsouli, an unindicted co-conspirator in the United Kingdom.
On or about April 10 and 11, 2005, Ahmed and Sadequee traveled to Washington, D.C., in Ahmed’s pickup truck. On April 11, Ahmed and Sadequee allegedly “made short digital video recordings… of symbolic and infrastructure targets of potential terrorist attacks in the Washington, D.C., area, including the United States Capitol; the headquarters building of the World Bank…; the Masonic Temple in Alexandria, Virginia; and a group of large fuel storage tanks near I-95 in northern Virginia.”
On returning to Atlanta, Ahmed allegedly gave the video clips to Sadequee so that he could send the clips to supporters of violent jihad abroad. Sadequee allegedly sent the video clips to Tsouli in the United Kingdom and Tsouli stored the clips on his computer along with other materials relating to violent jihad.
Between March and July 2005, Sadequee allegedly provided Ahmed with the contact information for Abu Umar, an unindicted co-conspirator, and told Ahmed that Abu Umar could assist Ahmed with obtaining paramilitary training in Pakistan. On or about July 17, 2005, Ahmed traveled from Atlanta to Pakistan for the alleged purpose of studying in a madrassa and then obtaining paramilitary training to engage in violent jihad in Kashmir or other locations, including the U.S. Ahmed is alleged to have intended to join Lashkar-e-Tayyiba (“Army of the Righteous”). Ahmed was allegedly unsuccessful in his attempts to enter a madrassa or to obtain paramilitary training, and returned to Atlanta.
On or about August 18, 2005, Sadequee traveled from Atlanta to Bangladesh to allegedly get married and to pursue violent jihad. Sadequee was stopped as he traveled through John F. Kennedy Airport in New York and was discovered to allegedly have two compact discs concealed in the lining of his suitcase which contained a Fairfax County, Virginia, Visitor’s Center map of the Washington area, including the sites of four potential terrorist targets which Sadequee and Ahmed had videotaped in April 2005. Sadequee was interviewed by federal agents and allegedly falsely stated that he had traveled to Toronto alone.
On or about August 19, 2005, Ahmed returned to Atlanta from Pakistan and was interviewed by federal agents at Hartsfield International Airport in Atlanta. Ahmed allegedly made false and misleading statements about his travel to Canada and Pakistan, allegedly stating that he had made the trips to visit friends and family and to attend a religious school.
In the Fall of 2005, Ahmed allegedly researched shaped explosive charges and methods to defeat surveillance by government authorities. He also allegedly cautioned an individual to avoid discussing certain topics over the telephone.
On or about November 27, 2005, Ahmed allegedly told a supporter of violent jihad of his intent to go abroad again to train for, and engage in, violent jihad, and told the individual to read the indictment against Jose Padilla. At or around this time, Ahmed allegedly reviewed a periodical for gun enthusiasts.
In early 2006, Ahmed allegedly engaged in efforts to detect and evade suspected government surveillance. In March of 2006, agents from the FBI Joint Terrorism Task Force engaged in a series of interviews with Ahmed, in which Ahmed allegedly attempted to conceal the true nature of his, Sadequee’s and their alleged co-conspirators’ discussions, activities and plans. After the interviews began, Ahmed communicated with Sadequee in Bangladesh and warned him about the FBI’s interest in their activities.
The trial of Syed Haris Ahmed is Georgia’s most significant terrorism case and we will collect for readers daily information on the trial and additional information. Today’s information on the Ahmed/Sadequee Trial comes from the Atlanta Journal-Constitution, WSBTV and CNN.
Ahmed is 24, an Atlanta area native and a former student at Georgia Tech. Ahmed waived his right to jury trial, and his case is being tried before District Court Judge William S. Duffey in the U.S. District Court for the Northern District of Georgia without a jury. Jack Martin, of Martin Brothers, P.C., is representing Ahmed. Assistant U.S. Attorney Robert McBurney is representing the United States. Ahmed’s co-defendant, Ehsanul Islam Sadequee, will be tried in August. Stephanie Kearns of the Federal Defender Program is representing Sadequee.
On Monday, Mr. Martin gave his opening statements to the Court, describing Ahmed as a confused, frustrated and immature young man who “fell prey” to websites espousing extremist views. Mr. Martin characterized the alleged plans for terrorist acts as “passing random thoughts, momentary ideas, childish fantasies, unformed, inchoate notions.” Mr. Martin argued that Ahmed had the ability to commit the alleged acts but said “No.” He stated that Ahmed’s idea of paramilitary training was shooting paintball guns with a friend in the North Georgia woods.
Mr. McBurney argued that Ahmed “one step removed from the bomb throwers” and intended to wage violent jihad. Mr. McBurney argued that Ahmed was a would-be terrorist who went to Pakistan to join the Taliban. He said that the videos made by Ahmed while allegedly “casing” locations in Washington, D.C., including the Capitol and the Pentagon, were intended to prove to terrorists overseas that Ahmed had access to Washington’s “backyard” and could get in close to targets. McBurney said the government’s case is about supporting terrorism and not actually “pulling the trigger or dropping the bomb.”
FBI Special Agent Mark Richards testified for the government. During Agent Richard’s testimony, the government showed some of the videos. In one video of the World Bank Building, Ahmed bobbed up and down so much that Mr. Martin asked Special Agent Richards “If a terrorist was attacking on a pogo stick, this might be useful, right?” However, another video shows Ahmed and Sadequee driving past the Pentagon with Sadequee stating “This is where our brothers attacked.”
The government’s case in many instances will evolve or shift to some extent over the course of a criminal prosecution. It may be a long time between indictment and trial, and the prosecution may come into possession of new evidence before trial, or may not have thoroughly reviewed the evidence which it does possess until after the return of the indictment. In addition, the prosecution may adjust its arguments or evidence in reaction to the defense. Whatever the reason, the prosecution in many criminal cases may determine to argue or present evidence at trial regarding a theory of criminality which differs to some degree from the crimes alleged in its original indictment. A thorough prosecutor will sometimes seek to provide for such a shifting theory by obtaining a superseding indictment from the grand jury, but in other cases the prosecution may not notice any need to do so or may simply neglect to do so. In any event, attorneys should carefully evaluate the prosecution’s arguments and proof at trial, as well as the trial court’s instructions to the jury, in order to determine whether a variance or amendment of the indictment has occurred. Following is a brief survey of the Eleventh Circuit Court of Appeals’ current position on amendments to or variances with the indictment.
“A constructive amendment occurs when the essential elements of the offense as alleged in the indictment are altered to broaden the potential bases for conviction beyond what the indictment contains.” United States v. Tampas, 493 F.3d 1291 (11th Cir. 2007) (citing United States v. Narog, 372 F.3d 1243, 1247 (11th Cir. 2004); United States v. Keller, 916 F.2d 628, 634 (11th Cir. 1990)); see also United States v. Ward, 486 F.3d 1212, 1227 (11th Cir. 2007). A constructive amendment of the indictment constitutes per se reversible error because it violates a defendant’s Fifth Amendment right to be tried on charges presented to the grand jury. See United States v. Tampas, 493 F.3d 1291 (11th Cir. 2007) (citing United States v. Weissman, 899 F.2d 1111, 1114 (11th Cir. 1990)). Under the Fifth Amendment, “a defendant can only be convicted for a crime charged in the indictment. It would be fundamentally unfair to convict a defendant on charges of which he had no notice.” Ward, at 1227 (citing Keller, at 632-33). The mere presentation of evidence not referenced in the indictment, such as pursuant to Federal Rule of Evidence 404(b), does not constitute an amendment or variance. See United States v. Lavigne, 282 Fed.Appx. 790, 793 (11th Cir. 2008) (unpublished).
In contrast, “a variance occurs when the facts proved at trial deviate from the facts contained in the indictment but the essential elements of the offense are the same.” Ward, 486 F.3d at 1227 (citing Keller, at 634; United States v. Flynt, 15 F.3d 1002, 1005-06 (11th Cir. 1994)). A variance only requires reversal where the defendant can establish that his or her rights were substantially prejudiced. Id. (citing Keller, at 633).
The Court has found no constructive amendment where an indictment charged the defendant with distributing crack cocaine and the trial court instructed the jury that it could find the defendant guilty if he had distributed either cocaine or crack cocaine, based upon the fact that the type of drug is not an element under the controlled substance statute, 21 U.S.C. § 841, United States v. Porter, 293 Fed.Appx. 700, 703, 04 (11th Cir. 2008) (unpublished); where the government argued in its closing arguments that it need not prove that all of the defendants named in the indictment were members of the scheme, but the indictment charged the defendant with conspiring with two named co-defendants as well as “other persons” United States v. Nunnally, 249 Fed.Appx. 776, 778 (11th Cir. 2007) (unpublished); where the trial court failed to instruct the jury that it had to find that the defendant embezzled a specific amount, but the indictment alleged that the defendant embezzled property having a value in excess of $5,000, Tampas, at 1291; where the trial court instructed the jury that it could still convict the defendant on the substantive mail and wire fraud counts of the indictment if it was unable to reach agreement on the conspiracy charge did, despite the fact that the government had referenced the conspiracy in the substantive counts of the indictment, Ward, at 1227, 28; where, despite the fact that the indictment alleged that the defendant possessed “more than 20 kilograms of cocaine,” the trial court instructed the jury that it could find the defendant guilty if it found that he possessed “a measurable amount” of a controlled substance, United States v. Knight, 213 Fed.Appx. 835, 838, 39 (11th Cir. 2007) (unpublished); where the government alleged in its indictment that the defendant committed an act “on or about” a particular date, but the proof at trial showed that the act was committed on a different date, United States v. Strevell, 185 Fed.Appx. 841 (11th Cir. 2006) (unpublished); where the indictment charged the defendant with an offense involving cocaine, but the proof at trial and the trial court’s jury instructions referred to crack cocaine, United States v. Rutherford, 175 F.3d 899, 906 (11th Cir. 1999); where the government’s indictment alleged that a certain person was the victim of the defendant’s extortion, but the proof at trial demonstrated that the person had no connection with the money obtained, United States v. Flynt, 15 F.3d 1002, 1006 (11th Cir. 1994); where the district court deviated in its instructions to the jury from the allegations in the indictment concerning a non-essential element of the crime, United States v. Lignarolo, 770 F.2d 971, 981 (11th Cir. 1985); where the government proved events of a conspiracy at trial which were not listed in the overt acts section of the indictment, United States v. Gold, No. 83-3231, 83-3230, 83-3267, 83-3239, 1984 WL 48339 (11th Cir. 1984); and where the government dropped two alleged co-conspirators from its conspiracy allegations at trial, United States v. Davis, 679 F.2d 845, (11th Cir. 1982).
However the Eleventh Circuit has found constructive amendments of indictments and improper broadening of the potential bases for conviction where the indictment charged the defendants with knowing or having reasonable cause to believe that pseudoephedrine would be used to manufacture methamphetamine, but the trial court instructed the jury that it could convict the defendants if it found that they knew or had reasonable cause to believe that the pseudoephedrine would be used to make “any controlled substance,” Narog, at 1249; where the government charged that the defendant knowingly and “willfully” committed money laundering, but the court redacted the term “willful” from its charge on the definition of “intentional,” United States v. Cancelliere, 69 F.3d 1116, 1121 (11th Cir. 1995); where the indictment alleged that the defendant conspired with a particular person and the trial court instructed the jury that it could convict the defendant if it found he conspired with “any” person, Keller, at 636; where the RICO charges in the indictment charged that the “enterprise” was a particular organized crime family but the court instructed the jury that it could convict the defendants if it found a different enterprise, United States v. Weissman, 899 F.2d 1111, 1115 (11th Cir. 1990); and where the trial court instructed the jury that it could convict the defendant if it found the elements of an offense which had not been charged in the indictment, United States v. Peel, 837 F.2d 975, 979 (11th Cir. 1988).
In an opinion issued on Tuesday, Montejo v. Louisiana, --- S.Ct. ----, 2009 WL 1443049 (2009), the Supreme Court removed a layer of protection of criminal defendants against coercive and badgering police interrogations by overruling, Michigan v. Jackson, 475 U.S. 625, 106 S.Ct. 1404 (1986), in which the Court had held that “if police initiate interrogation after a defendant's assertion, at an arraignment or similar proceeding, of his right to counsel, any waiver of the defendant's right to counsel for that police-initiated interrogation is invalid.”
The petitioner in Montejo was arrested in connection with a robbery and murder and waived his rights pursuant to Miranda v. Arizona, 384 U.S. 436, 86 S.Ct. 1602 (1966), while being interrogated by police detectives. A preliminary hearing was then held in which the court ordered an indigent defender to represent the petitioner. After the hearing, two detectives visited the petitioner and requested that the petitioner lead them to the murder weapon. The detectives read the petitioner his Miranda rights, and the petitioner proceeded to go along with the detectives, writing an inculpatory letter of apology to the widow of the victim in the process. Only following this excursion did the petitioner meet his court-appointed attorney and consult with him. The State admitted the petitioner's letter of apology against him at trial, and the petitioner was convicted of first degree murder and sentenced to death.
The petitioner appealed, arguing that the State's admission of the letter was error pursuant to Jackson. The Louisiana Supreme Court held that Jackson is not triggered unless and until a defendant has actually requested a lawyer or has otherwise asserted his Sixth Amendment right to counsel. It held that because the court had appointed the petitioner counsel while the petitioner stood mute, the petitioner had not sufficiently asserted his right to counsel. The Courtaffirmed his conviction and the Supreme Court granted certiorari.
Justice Scalia, writing for the majority, observed that some States require an indigent defendant to affirmatively request counsel before an appointment is made, while other States automatically appoint counsel upon a finding of indigency. Justice Scalia recognized the problem that "Defendants in States that automatically appoint counsel would have no opportunity to invoke their rights and trigger Jackson, while those in other States, effectively instructed by the court to request counsel, would be lucky winners." The majority rejected the petitioner's position that, once a defendant is represented by counsel, police may not initiate any further interrogation.
The majority proceeded to overrule Jackson and its holding that waivers of a defendant's right to counsel after the right to counsel is asserted are presumed invalid. The Court noted that it had created the presumption in Jackson by making an analogy to a similar prophylactic rule which the Court had established in Edwards v. Arizona, 451 U.S. 477, 101 S.Ct. 1880 (1981), for the Fifth Amendment right to have counsel present at any custodial interrogation under Miranda. The majority held that where a defendant does not invoke his right to counsel, such as where a court appoints counsel in the absence of any request by the defendant,there is no initial election "that must be preserved through a prophylactic rule against later waivers." It noted that the benefits of the prophylactic rule of Jackson were outweighed by its costs in "hindering “society's compelling interest in finding, convicting, and punishing those who violate the law." The majority observed that, even without the rule of Jackson, defendants are still entitled to the protections of Miranda, Edwards and Minnick v. Mississippi, 498 U.S. 146, 151, 111 S.Ct. 486 (1990). It held that "Jackson not only 'operates to invalidate a confession given by the free choice of suspects who have received proper advice of their Miranda rights but waived them nonetheless,' ... but also deters law enforcement officers from even trying to obtain voluntary confessions."
Justices Stevens, Souter, Ginsburg and Breyer all dissented.
We have tried to sum up for readers the labyrinthine facts and developments in the shocking and fascinating case of Marc Dreier, drawing upon excellent and thorough articles on the subject by Roger Parloff in Fortune Magazine and by Robert Kolker in New York Magazine.
I. The Rise
Marc Stuart Dreier grew up on the South Shore of Long Island, the son of a Polish refugee who built a chain of movie theaters. He graduated from Lawrence High School in the Five Towns.
Dreier attended Yale and then Harvard Law School. On graduation, he became an associate with Rosenman & Colin in New York, and later became a partner.
In 1987, Dreier married Elisa Peters, an associate at Rosenman & Colin. The couple had a son, Spencer, in 1989, and a daughter, Jackie, in 1992. He moved to Houston-based Fulbright & Jaworski’s New York litigation office in 1989. In 1995, Dreier left Fulbright & Jaworski and briefly worked at Duker & Barrett.
In 1996, Dreier started his own firm, Dreier & Baritz, with securities lawyer Neil Baritz. He developed a business practice whereby he entered into agreements with other lawyers and law firms, promising to handle the collection of their gross revenue and payment of their office expenses in exchange for paying guaranteed salaries and incentive bonuses.
II. Sheldon Solow and Kosta Kovachev
It is rumored that Dreier received money to start the firm from New York real estate developer Sheldon Solow, owner of Solow Realty, a billionaire son of a bricklayer turned developer.
Dreier represented Solow in several matters. One such matter was a dispute over a mansion in East Hampton with Peter Morton, founder of the Hard Rock Cafe, with each man staking a claim to the same multimillion-dollar East Hampton beach house. Another case involved a dispute between Solow and Peter Kalikow, another real estate developer and former owner of the New York Post, over $7 million loaned by Solow to Kalikow while Kalikow’s company was in bankruptcy. Dreier, at the request of Solow, took out full page ads in the Post and the New York Times which looked like legal notices, inviting creditors of Kalikow to call a company called Evergence Capital Advisors.
Evergence Capital Advisors was actually the name of a dissolved Florida corporation formerly owned by a friend of Dreier’s, Kosta Kovachev. Kovachev was a Serbian who attended Columbia University and Harvard Business School and became a banker and securities broker. He was sued by the Securities and Exchange Commission for his involvement in a Ponzi scheme selling time-shares in Florida which defrauded approximately 600 investors in 30 states out of $28 million. Dreier represented Kovachev in the proceeding.
The telephone numbers in the newspaper ads led to Dreier’s offices. More than 50 creditors called the numbers, but never received a response. The U.S. bankruptcy judge sanctioned Solow and Dreier $335,000 over the ads. Solow and Dreier are still appealing the sanctions.
Acquaintances describe Dreier as incredibly charming, but a ruthless litigator. In 2002, Dreier’s wife sued him for divorce. That same year, Baritz severed his ties with Dreier, and in 2003 the firm became Dreier LLP, with about 60 attorneys.
III. The Scheme
Beginning in November 2004, Dreier began to sell promissory notes to hedge funds. Dreier claimed that the notes were issued by Solow Realty, and represented to the funds that he was marketing agent for Solow. In reality, Solow and Solow Realty had no knowledge of the notes, and the notes were forged by Dreier along with fraudulent audit reports on the letterhead of one of Solow Realty’s accounting and firms, Berdon LLP. Dreier would tell fund representatives that Solow was trying to raise $500 million to purchase properties, and that Solow did not want to borrow money from banks for reasons of secrecy and because Solow did not want to be accountable to anyone. He claimed that the notes would return 11% interest a year.
Dreier and his co-conspirators, including Kovachev and a man named Armando Ruiz, would host meetings and conference calls with fund representatives. They would give fund representatives telephone numbers purportedly for Solow Realty’s CEO or Controller, but which actually went to Dreier and his accomplices. Dreier created fake e-mail addresses and obtained no-contract cell phones for the scheme.
The phony notes were purchased by nearly 40 investment funds, including Fortress Investment Group, GSO Capital Partners LP, Elliott Associates, Eton Park, Westford Global Asset Management, Perella Weinberg Partners, Verition and Blackstone Group.
In order to come up with the funds to make quarterly interest payments on the phony notes, Dreier expanded Dreier LLP. The firm eventually employed approximately 260 attorneys and approximately 300 staff and had offices in New York City, Los Angeles, Pittsburgh, Santa Monica, Stamford and Albany, New York. The firm’s New York City office leased 11 floors in a building designed by architect I.M. Pei at 499 Park Avenue.
Dreier lured new attorneys to the firm by guaranteeing them $1 million in salary before bonuses. He financed the expansion by factoring receivables. Although the firm had “partners,” Dreier remained the sole equity partner, which limited oversight.
Dreier amassed a large quantity of luxury property, including a $10 million condominium in Manhattan; two mansions in the Hamptons; properties in the Caribbean; an art collection worth $40 million, including works by Henri Matisse, AndyWarhol and David Hockney; and a 120-foot yacht. Dreier threw lavish parties with private performances by Diana Ross, Bon Jovi or Alicia Keys, and hosted a celebrity golf tournament.
IV. The Fall
By 2008, however, Dreier had a total of $180 million in debt to hedge funds, as well as annual interest payments of $20 million. He began selling a new form of phony note, allegedly issued by the Ontario Teachers Pension Plan (OTPP) and backed by BCE, the parent company of Bell Canada.
In September of 2008, Dreier failed to meet his obligations to one of the funds, likely GSO Capital Partners LP, and the fund demanded to meet with representatives of Solow Realty at Solow Realty’s offices. On October 15, 2008, Dreier, Kovachev and the fund representatives arrived at Solow Realty’s offices, and Dreier, without Solow’s knowledge, proceeded to hold a meeting in Solow Realty’s conference room in which Kovachev pretended to be Solow Realty’s Controller.
Finally, in late October 2008, a prospective buyer of the phony notes finally contacted the Solow Realty’s audit firm, Berdon LLP, whose name had been forged on the notes, and discovered the scheme. Berdon notified Solow, and Tom Manisero, a lawyer for Berdon, telephoned Dreier.
Dreier lied to Manisero, stating that he had only attempted to sell the notes once. He had several other telephone calls with Manisero, which were recorded by the U.S. Attorney’s Office. During the calls, Dreier admitted that the audit reports were fake, and that he was ashamed. On the final call, Dreier attempted to offer Manisero a “settlement.” Meanwhile, the Verition hedge fund discovered the irregularities with the phony notes.
On December 1, a bankruptcy attorney with the firm Norman Kinel sent Dreier an e-mail asking for $38.5 million out of the firm’s escrow account for one of the firm’s clients to pay its creditors. However, less than half of the money remained in the escrow account.
While Dreier was under investigation, he offered Fortress Investment Group $33 million of the phony OTPP notes. A Fortress representative, Howard Steinberg, asked to meet with the OTPP representative in person, and Dreier arranged for a meeting with OTPP’s general counsel in Toronto. On December 2, Dreier flew to Toronto met with the general counsel, Michael Padfield, himself to discuss alleged business opportunities and got his business card. He then proceeded to meet with Steinberg at OTTP’s offices, posing as the general counsel. Steinberg became suspicious and asked the receptionist if Dreier was actually the general counsel, and was told he was not. The police were contacted, and Dreier was arrested for criminal impersonation.
Prosecutors allege that, after the initial call from Manisero, Dreier attempted to move funds to a personal account Dreier used for his Caribbean properties. On December 3, Dreier’s 19-year-old son, Spencer, attempted to deliver a message from Dreier to about 40 partners of Dreier LLP, but was shouted out of the conference room. Furthermore, at around this time, Dreier succeeded in having the firm’s bank transfer $10 million in escrow monies to one of his personal accounts. At this time also, Kovachev also went to the firm’s offices and took two paintings.
Dreier posted bail in Canada, and arrived back on New York on December 7, where he was arrested upon arrival. Kovachev was also arrested. Authorities have also subpoenaed all documents from Dreier LLP relating to Armando Ruiz.
On January 29, Dreier was charged with seven counts wire fraud, securities fraud, and money-laundering. He initially pled not guilty, but filed affidavits admitting large portions of the allegations against him. Drier was placed under house arrest in his condominium in Manhattan. He is represented by attorney Gerald Shargel, who has formerly represented members of the Mafia. Dreier’s friend, Erinch Ozada, a Turkish hedge fund manager, is reported to be cooperating with the government.
In the meantime, Dreier LLP has ceased to exist. Attorneys and employees of Dreier LLP have unpaid salaries and unreimbursed expenses.
In all, Dreier is alleged to have committed $700 million in fraud against 13 hedge funds and three individuals, resulting in $400 million in losses, and to have taken $40 million from his clients’ escrow accounts. On Monday, May 11, 2009, Dreier pled guilty to all charges before U.S. District Court Judge Jed Rakoff in the U.S. District Court for the Southern District of New York. He faces a potential 20 years on some counts.
Over 200 creditors have already filed more than $450 million in claims against Dreier LLP. Investigators report that any monies are mostly gone. The government has seized Dreier’s luxury property in order to forfeit the property or distribute it among creditors. There has been some interest in the movie or book rights to Dreier’s saga, however New York’s Son of Sam laws prevent such exploitation.
Our summary retrospective of Justice Souter’s contributions to the Supreme Court’s criminal law jurisprudence continues. In addition to writing for the majority in many important criminal decisions, Justice Souter has authored concurring decisions in many cases, including criminal cases. While the Justice’s concurrences in criminal cases have typically been brief, Justice Souter has frequently raised important alternative views on issues on which he disagrees with the majority, or raises issues which the majority has overlooked.
Most recently, in Gall v. U.S., 128 S.Ct. 586 (2007) Justice Souter authored a concurring opinion in which he expressed his view that the best resolution of the tension between the Sixth Amendment right to trial by jury and consistency in sentencing was for Congress to enact a new statutory system of mandatory sentencing guidelines which provide for jury findings on all facts necessary to set the upper range of sentencing discretion. Justice Souter also concurred with the majority in U.S. v. Knights, 534 U.S. 112 (2001), in which the majority held that no more than reasonable suspicion was required to support a warrantless search of a probationer’s apartment, reserving the question of whether the Court’s holding in Whren v. U.S., 517 U.S. 806 (1996) that the subjective intentions of investigating officers play no role in searches based upon probable cause should also extend to searches based upon reasonable suspicion. In Illinois v. McArthur, 531 U.S. 326 (2001), the majority of the Court held that police officers preventing the petitioner from entering his home unaccompanied by an officer for about two hours while the officers obtained a warrant to search the home constituted a reasonable seizure of the premises pursuant to the Fourth Amendment. Justice Souter joined the majority in a concurring opinion in which the Justice observed that the exigent circumstances created by the risk that the defendant would have destroyed the illegal drugs stashed on the property would have justified a warrantless search of the premises by the police. In his concurrence in Florida v. White, 526 U.S. 559 (1999), which involved the warrantless seizure of an automobile from a public place by police as contraband under Florida’s contraband forfeiture law, Justice Souter took issue with the majority’s holdings to the extent that they endorsed the warrantless seizure of anything alleged to be “contraband,” holding that “[t]he Fourth Amendment does not concede any talismanic significance to use of the term ‘contraband’ whenever a legislature may resort to a novel forfeiture sanction in the interest of law enforcement, as legislatures are evincing increasing ingenuity in doing…” (citing Bennis v. Michigan, 516 U.S. 442, 443-446, 458 (1996); U.S. v. James Daniel Good Real Property, 510 U.S. 43, 81-82 & n. 1 (1993) (Thomas, J., concurring in part and dissenting in part)). And in Carlisle v. U.S., 517 U.S. 416 (1996), Justice Souter disagreed with the majority opinion that a district court possesses inherent authority to grant a motion for a judgment of acquittal, observing that Congress might possess the power to abrogate courts’ inherent authority legislatively, citing Federal Rule of Criminal Procedure 29(c).
Spam e-mail is nearly universally despised. However, recipients of spam may not fully appreciate the inventiveness and intricateness of some spammers' methods, however dubious or illegal, before considering the charges against Missouri residents Amir Ahmad Shah, age 28, and Osmaan Ahmad Shah, age 25, who operated a company I2O. As reported by IDG News Service, the brothers, along with Paul Zucker of New Jersey and Liu Guang Ming, a citizen of China, were indicted today by a federal grand jury for an e-mail spamming scheme which targeted more than 2,000 U.S. colleges and universities and sold more than $4.1 million worth of products to students. The scheme involved e-mail extracting programs which illegally harvested more than 8 million student e-mail addresses. The defendants then sent targeted spam e-mails to students in at least 31 campaign selling a variety of products and services, including digital cameras, MP3 players, teeth whiteners, pepper spray, magazine subscriptions and spring break travel offers. They developed programs to falsify header information and rotate URLs, subject lines, content, reply addresses and other information to avoid spam filters. The defendants would include false and misleading information in the e-mails suggesting an association with the college or university, using fictitious names, claiming to be "campus representatives," and that the businesses selling the products were "alumni owned." They also created dozens of identical websites for each e-mail campaign to conceal the source of the e-mails and to keep the e-mails from being blocked by spam filters, and initially set up the hosting for the websites in China. The defendants made money through referral fees for sending spam for products and services sold by others, and by buying products in bulk and reselling them. They also offered "offshore hosting" services for other spammers.
Federal investigators began investigating the Shah brothers in 2005, after University of Missouri officials identified them as the source of the spamming. The brothers proceeded to remove all Missouri students' e-mails from their lists, but continued to spam other colleges and universities. The defendants are charged in the indictment with 26 counts of aiding and abetting each other to access a protected computer without authorization and transmit commercial e-mails with the intent to deceive or mislead the recipients about the origin of the messages, and the indictment seeks $4.1 million in forfeiture and other property. Colleges and universities have spent large amounts repairing the damage from the hacking and spamming and in implementing protective measures.
Spamming is regulated by the CAN-SPAM Act of 2003, codified at 15 U.S.C. s 7704, which prohibits false, misleading or deceptive information in spam, as well as for sexually explicit spam without sufficient warnings, and carries a maximum sentence of 5 years imprisonment. Some sources estimate that spam now comprises 95% of the e-mails in the world.
In follow up to the post earlier today on the Fifth Circuit's letter to counsel in the Minor case, it seems that the Fifth Circuit is obviously troubled by the proof, if any, between the agency receiving federal funds, the Administrative Office of the Mississippi Courts, and the allegedly corrupt activity of Minor and the judges (Whitfield and Teel) that he sought to influence. First, the limiting cases on 666 violations have generally interpreted that statute very broadly, but a reasonable reading of the Court’s questions indicates a concern for the level of proof of the “nexus” between the Administrative Office of the Mississippi Courts and any agent, or activity of a particular matter before the judges.
Secondly, if such a nexus is required, it seems the Court is concerned whether the issue has been properly preserved both at trial and on appeal.
Thirdly, and most surprisingly, the Fifth Circuit, obviously knows what effect a reversal of those counts would have on the other counts of conviction, “even if the convictions on those other counts were not to be reversed?” The posing of that question by the Fifth Circuit seems almost gratuitous. Counts of conviction are routinely reversed that either don’t effect the sentence imposed, or that require re-sentencing consistent with the Court’s opinion. One has to look no further that Governor Siegelman’s recent case in front of the Eleventh Circuit. Quite frankly, re-sentencings happen all of the time after the reversal of some counts of conviction. Just odd that the Fifth Circuit would pose that question publicly.
As for Paul Minor’s quest for vindication before the Fifth Circuit, sadly, the court's letter indicates that they are going to affirm the other counts of conviction.
Yesterday, the Fifth Circuit in a letter to counsel, requested additional briefing regarding Counts 11, 12, 13, and 14, which allege a violation of 18 U.S.C. § 666 (what I've always referred to as the devil statute). In Minor the government charged that the agency receiving government funds was the administrative office of the courts of Mississippi. Generally you see a Section 666 violation when someone has stolen monies from say, a local transit authority, which receives in excess of $5,000 in a given year (thereby conferring federal jurisdiction). And, we all know that almost any program receives that amount from the federal government now.
The Fifth Circuit requested additional briefing on the following questions:
1) What evidence shows that the Mississippi judges were influenced or rewarded in connection with matters related to the Administrative Office of the Courts of Mississippi?
2) Describe the nexus that the “in connection with” clause of 666 requires between the Administrative Office of the Courts of Mississippi and the particular matters in front of the judges supposedly influenced by Minor’s actions.
3) What was the proof of that nexus?
4) Did the appellants adequately preserve the issue in the district court and did they adequately raise the issue on appeal?
5) If the Fifth Circuit reverses any of the Counts 11-14, what effect would that have on any of the other counts of conviction, “even if the convictions on those other counts were not to be reversed?”
The Court gave the parties until May 15 to file briefs of less than 15 pages.
More commentary on this later.
As previously reported here, the Department of Justice and UBS entered into a deferred prosecution agreement wherein UBS is to pay a fine and disclose to DOJ the names of its some 52,000 clients that have used UBS to park income in violation of U.S. tax laws. The New York Times reports today that the President of Switzerland has asked Treasury Secretary, Timothy Geithner, to drop what the Times inexactly reports to be a lawsuit to disclose the names of the UBS clients. In fact, under the deferred prosecution agreement, UBS has to cooperate with DOJ by providing the client’s names. My guess, Mr. Geithner, who had his own tax issues, isn’t going to touch this one. DOJ has already prosecuted two folks whose names UBS disclosed and, inevitably, many more such prosecutions will follow.
Today the Eleventh Circuit held in United States v. Carter, No. 08-14460, that a search of the home of a probationer is reasonable under the Fourth Amendment, if supported by reasonable suspicion. Carter was on probation in 2007, however, his probation did not contain a Fourth Amendment waiver provision. His probation officer though, was suspicious that his lifestyle could not be supported by the unskilled labor he performed and he, along with other probation officers, searched Carter’s town home, which lead to him being charged with possession with intent to distribute crack and possession of a firearm by a convicted felon.
Carter moved to suppress the evidence discovered during the warrantless search. Relying on the balancing test set forth in United States v. Knights, 534 U.S. 112 (2001), Judge Carnes writing for the Court, noted that the Knights case first addressed the probationer’s individual privacy interests - in short - not much. Then Judge Carnes addresses the “governmental interests at stake” - in short - for a guy like Carter - prior violent crime and drug conviction - “the government’s interest in monitoring the probationer is particularly high.” This may be a common sense conclusion, but Judge Carnes draws this conclusion virtually out of thin air, citing only U.S.S.G. 4B1.1(a)(providing enhanced penalties for criminals with a history of drug felonies or crimes of violence). However, U.S.S.G. 4B1.1 says nothing about probationers, or the government’s interest in monitoring them more closely.
Judge Carnes ultimately holds that “the search in this case need only be supported by reasonable suspicion to be reasonable under the Fourth Amendment” and that the search of Carter’s home was permissible.
In a case of remarkable chutzpah, Mark Anthony McBride, plead guilty in Atlanta on Friday to a two count information charging him with one count of conspiring to obtain million of dollars in fraudulent mortgages and other loans and one count of bankruptcy fraud.
McBride plead to a scheme he started in 2001 after being released from prison and continued until he reported back to prison in 2002. As soon as he was released from prison in 2006 he was back at making a living in the only, apparent. fashion he knew, being a con artist by completing fraudulent mortgage loans, car loans, lines of credit and continued his scheme until his arrest in September of 2008 for violating his federal probation.
Showing exceptional criminal ingenuity, McBride was able to retain the proceeds of his fraud by filing 8 bankruptcies in Georgia, Alabama and South Carolina.
Methinks McBride's schemes have come to an end. He faces up to 35 years in prison at his sentencing, which is scheduled for July 9, 2009.
U.S. Attorney David Nahmias said on Thursday that more charges are expected in the continuing investigation of inmate abuse at the Fulton County Jail. On Thursday, two lieutenants, Lt. Earl Glenn and Lt. Robert Hill, pleaded innocent to federal charges of using excessive force and lying to FBI agents investigating the case.
Nahmias has taken an unusual interest in this case, announcing last month the initial arrest of Curtis Jerome Brown, on civil rights, obstruction and false statement charges.
Last week Nahmias said that more charges were expected in the investigation of inmate abuse.
Judge Shoob has monitored conditions at the jail following a lawsuit filed on behalf of inmates accusing the jail of overcrowding and dangerous conditions.
The federal judiciary has seen a surge in proceedings for reduction of sentences pursuant to 18 U.S.C. § 3582(c)(2), primarily as a result of Amendment 706 to the Guidelines, which amended § 2D1.1 to provide a two-level reduction in the base offense level for crack cocaine offenses, and which the United States Sentencing Commission made retroactive. However, in a blow to defendants’ rights in such proceedings, the Eleventh Circuit in United States v. Webb, No. 00-00066-CR-1-1 (11th Cir. Apr. 13, 2009) has held that defendants possess no mandatory right to counsel in sentence reduction proceedings pursuant to § 3582(c)(2) under either the Fifth or Sixth Amendments. The Court’s holding comes in spite of its earlier holdings that § 3582(c)(2) motions are a continuation of a criminal case, and that motions for reduction of sentence pursuant to a retroactive amendment in the Sentencing Guidelines are clearly a challenge to the original sentence.
Webb was convicted in 2000 of conspiracy to possess and attempt to possess more than fifty grams of cocaine base and large quantities of cocaine hydrochloride, id. at 2. Under the Sentencing Guidelines, Webb’s base offense level was 38 under U.S.S.G. § 2D1.1(c), however the district court found that he was also a career offender and that his total offense level was 42, but the court departed downward from the recommended range of 360 months to life and sentenced Webb to 264 months. Id. at 2-3.
In 2008, Webb filed a pro se motion to reduce his sentence pursuant to § 3582(c)(2) pursuant to Amendment 706. Id. at 3. The court denied Webb’s motion, finding that even if Webb’s offense level was lowered from 42 to 40 pursuant to Amendment 70, his sentencing range would still be 360 months to life, and he was therefore not eligible for a § 3582(c)(2) reduction. Id. Webb did receive a reduction in his sentence pursuant to Federal Rule of Criminal Procedure 35(a), however. Id. Webb appealed. Id.
The Eleventh Circuit cited its previous decision in United States v. Bravo, 203 F.3d 778 (11th Cir. 2000), in which it stated that, in determining whether to reduce a sentence pursuant to § 3582(c)(2), a district court must first recalculate the sentence based upon the amended Guidelines, leaving all other original sentencing determinations unchanged. Id. at 6 (citing Bravo, at 780; United States v. Moreno, 421 F.3d 1217, 1220 (11th Cir. 2005)). The court then may choose to impose the newly calculated sentence or to keep the original sentence, and should make its choice in light of the factors set forth in 18 U.S.C. § 3553(a). Id. The Court also noted that U.S.S.G. § 1B1.10(a) provides that a sentence may be reduced only where “‘the guideline range applicable to that defendant has subsequently been lowered as a result of an amendment…” Id. at 5-6 (emphasis added) (quoting U.S.S.G. § 1B1.10(a)).
Based upon these rules, the Court of Appeals found that the district court did not err in denying Webb’s § 3582(c)(2) motion since, although his offense level would have reduced his offense level from 42 to 40, this reduction would not have reduced Webb’s sentencing range, and the district court therefore had no authority to reduce his sentence or to consider the § 3553(a) factors.Id. The Court also held that Booker is “inapplicable” to § 3582(c)(2) motions for reduction of sentence because it is “‘a Supreme Court decision, not a retroactively applicable guideline amendment by the Sentencing Commission.’” Id. at 6-7 (quoting Moreno, at 1220–21).
More importantly, however, Webb also argued that the district court violated his Sixth Amendment right to counsel by refusing to appoint an attorney to represent him on his § 3582(c)(2) motion. Id. at 7. The Court noted that the issue of whether there was a mandatory right to counsel in § 3582(c)(2) reduction of sentence hearings was a matter of first impression for the Court. Id. at 8. Despite the fact that the Court acknowledged that it had found § 3582(c)(2) motions to be “‘a continuation of a criminal case’” rather than “‘a civil post-conviction action’” like a petition for habeas corpus, id. at 8-9 (citing United States v. Fair, 326 F.3d 1317, 1318 (11th Cir. 2003) (per curiam)), the Court followed the Fourth, Fifth, Seventh and Ninth Circuits’ view that a § 3582(c)(2) motion is merely a petition for a district court to exercise leniency to give a defendant the benefit of an Amendment to the Guidelines, rather than a challenge to the appropriateness of the original sentence, id. at 9 (quoting United States v. Whitebird, 55 F.3d 1007, 1011 (5th Cir. 1995)). “A defendant bringing such a motion thus would not be eligible for the Sixth Amendment rights that would normally attach in a sentencing or resentencing hearing.” Id. (citing Whitebird, 55 F.3d at 1011; United States v. Townsend, 98 F.3d 510, 512–13 (9th Cir. 1996)). The Court continued on to hold that the Due Process Clause of the Fifth Amendment likewise did not provide a mandatory right to counsel in sentence reduction hearings pursuant to since Federal Rule of Criminal Procedure 43(b)(4) provides that such a hearing may be held without the defendant himself being present. Id. at 10 (citing Fed.R.Crim.P. 43(b)(4)). Lastly, the Court held that 18 U.S.C. § 3006A(c), which provides for a right to counsel in criminal proceedings, “including ancillary matters appropriate to the proceedings,” id. at 10 (citing 18 U.S.C. § 3006A(c)), provided no right to counsel, since it found that the right to counsel conferred by the statute extended “to matters that are part of the original action, such as sentencing and resentencing, but not to challenges to a defendant’s sentence, as would be the case in a § 3582(c)(2) motion.” Id. at 11 (citing Whitebird, at 1010–11).
In United States v. Davis, No. 07-12015, 2008 WL 800125, *1 (11th Cir., Mar. 27, 2008), Benjamin Davis was stopped at a roadblock by Atlanta police officers, who found a handgun on the floor of Davis’ vehicle. Davis was charged under Georgia law with unlawful possession of a firearm and invoked his right to counsel at his arraignment. Id.
A Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”) agent then sought to interview Davis, and Davis agreed to the interview. Id. During the interview, Davis told the agent that the firearm was his and that he was a convicted felon. Id. The agent gave Davis no warnings pursuant to Miranda v. Arizona, 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d 694 (1966), and did not advise him of his right to counsel. Id.
Unsurprisingly, Davis was later indicted by a federal grand jury for possessing a firearm as a convicted felon and moved to suppress the statements he made to the agent. Id. The trial court denied the motion, and Davis entered a guilty plea and subsequently appealed, arguing that his interrogation by the agent violated his Sixth Amendment right to counsel, since he was charged with the same offense in state and federal court and had invoked his right to counsel in the state proceeding. Id. at *1-2. The Eleventh Circuit Court of Appeals affirmed the district court’s denial of Davis’ motion to suppress, holding that, under the “dual sovereignty doctrine,” “a defendant's invocation of his right to counsel in the state criminal proceedings does ‘not attach to the uncharged federal ... offenses at the time of the interview.’” Id. at *2 (quoting United States v. Burgest, --- F.3d ----, No. 06-11351, Slip Op. at 7 (11th Cir. Mar. 13, 2008)).Enter keywords:
