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HOP ON THE BUS, GUS

John George, Jr., operated a bus system on behalf of Southeast Regional Transit Authority (SRTA), a government-funded regional transit authority. SRTA owns the buses, facilities, and equipment, but it doesn’t operate them. Instead, it contracted with private entities to do that. John’s was a company called Union Street Bus Company (USBC).

John bears some passing resemblance to Bill Clinton. He started out in government, and then left his position as a Massachusetts state representative. He then bought USBC. At the time of the purchase, USBC had a contract to operate the SRTA bus system through 1995. After John took over, USBC’s contract was renewed several times, the last term being 2006 through 2011.

John maneuvered his way into the transit agreement through collusion with a state official who John had hand-picked to replace himself. His crony manipulated the bidding process and when John lost the crucial support of the City of Fall River –because he refused to hire one of the mayor’s cronies – his state official buddy ran interference for him.

Under USBC’s agreement, all of its expenses were paid by SRTA with public funds: the Agreement bound SRTA to pay USBC the difference between USBC’s operating expenses and USBC’s operating income. SRTA also paid USBC a management fee of anywhere between $200,000 and $250,000 a year (from which John paid himself a salary).

John had a sweet deal, but he couldn’t leave well enough alone. He hired his girlfriend to work at the bus line as an administrative assistant, with her $100,000 a year salary paid by SRTA. Instead of keeping regular office hours, she showed up “once or twice a week, if at all.” in the summertime. But she did work – at John’s farm, selling produce for him. John also had a long-time friend on the USBC payroll to the tune of $90,000 a year, who would routinely abandon his bus company shift shortly after arriving, and would drive a company car to work at the farm and do chores for John. Finally, John would use the USBC mechanic to do repairs at the farm, even pulling him away from urgent bus repair work for far chore.

In early 2006, USBC paid $10,000 in SRTA-reimbursable funds to a construction company, ostensibly for terminal repairs. But the construction company never showed for work, but did remodel John’s kitchen. John used USBC equipment to plow out his driveway and fix his air conditioner. He even installed a video surveillance system paid for with taxpayer money at the farm.

Unfortunately for John, matters began to unravel when his state-official buddy became head of SRTA and “got religion.” He began pushing back against John’s excesses, and finally solicited other companies to bid on the SRTA contract. John responded by getting his former friend fired, but the die was cast. John was underbid, and the contract went to another company in 2011.

The new contractor reported the many irregularities it found, John was investigated, and an indictment followed. After a jury trial, he was convicted and got 60 months.

Monday, the 1st Circuit affirmed the judgment and sentence. Of special interest was the 2-level enhancement John got under U.S.S.G. §3B1.3 for abuse of position of trust.

To justify this enhancement, a sentencing court must find that the defendant held a position of public or private trust and that he used the position to facilitate or conceal his offense. The district court found that, on this record, John – as president of a government contractor – occupied a position of trust with respect to SRTA.

The Circuit admitted it had never considered whether – or under what circumstances – a “high-ranking employee of a government contractor can be said to occupy a position of trust vis-a-vis a defrauded government entity.” However, despite the fact that legally, the contractor does not occupy a fiduciary duty with respect to the government agency, “individuals controlling government contractors sometimes grow so cozy with the contracting agency that they are allowed to exercise substantial discretionary authority over government funds without any semblance of meaningful oversight.”

The Court said that to warrant the application of the position-of-trust enhancement in such circumstances, a defendant first must have both substantial control and significant discretion over the affairs of the government contractor. A district court must ask “whether the victim reposed additional trust in the defendant by ceding its ability to confirm compliance with the contract, thus relying more heavily on the honesty of the defendant than an ordinary party to a contract would.” The Court said the record here showed “beyond hope of contradiction” that John dominated USBC, and that SRTA reposed special trust in him.

Thanks to John’s political connections, “USBC’s performance was subjected to almost no oversight by SRTA.” John had exclusive and sole responsibility for USBC employees, and for USBC’s performance of a cost-plus contract “in circumstances in which the contracting government agency had no idea which employee was doing what work.” SRTA’s lax financial monitoring let John pay USBC employees with public funds to work on his private business, and to ignore SRTA auditors when they questioned his expenses. His former friend who ran SRTA admitted that when John gave unsatisfactory explanations for questionable expenses, SRTA “would do nothing because of my association and relationship with” him.

Thus, the Circuit effectively held, even when no legal position of trust is created, the practicalities of the situation – and the foolishness of the victim – can create a position of trust. Hard cases often make bad law, and this holding makes the “position of trust” enhancement a slippery concept indeed. Indeed, it seems that the more negligent the victim in protecting himself or herself, the more the perp will be punished.

United States v. George, Case No. 15-1892 (1st Cir.,  November 7, 2016)

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ANDY WOULD GIVE YOU 3-5 ODDS HE’LL GET A BELOW-GUIDELINES SENTENCE

The press is having plenty of fun at the expense of Princeton and Harvard Law grad Andrew W. W. Caspersen, the born-with-a-silver-spoon white collar fraudster who abused friends and family in a $40 million wire-fraud scheme that burned up most of that money in the options market. Last Friday, in the Southern District of New York, Andy got 48 months for his crime.

What made this rather pedestrian sentencing interesting – beyond the fact that the defendant was widely described as a “scion” of a powerful, rich and well-connected family – was his argument that his sentence should fall well below the 151-188 months called for by the Guidelines. Andy argued that his gambling addiction was responsible for behavior that was at best irrational.

Schumpeter observed a week ago in the Economist that white-collar criminals are everyone’s favorite piñata:

One thing right-wing populists and left-wing progressives can agree on is that society is too soft on white-collar crime. Conservatives abandon their admiration for business when it comes to ‘crooked bankers’. Left-wingers forget their qualms if locking up “corporate evil-doers”. Hillary Clinton’s line that “there should be no bank too big to fail but no individual too big to jail” would go down equally well at a Donald Trump rally.

Between 1996 and 2011 the mean fraud sentence in federal courts nearly doubled, from just over a year to almost two years, as the average sentence for all federal crimes dropped from 50 months to 43. This is primarily because the enhancements for amount of loss have skyrocketed since the 1990s: in Andy’s case, § 2B1.1 of the Guidelines called for a base offense level of 7, with an add-on of 22 for a loss between $25 and $60 million. Thus, he started with a level of 29, before the inevitable other enhancements under 2B1.1 (such as for using “sophisticated means”) and Chapter 3 (for special skills) get rolled in. Even a Criminal History I defendant finds himself or herself looking at pretty significant time.

At Andy’s sentencing, his lawyers focused on the potential mitigating effects of a pathological gambling problem. Their client had rolled sevens to be assigned District Judge Jed Rakoff, described by USA Today as “a renowned legal independent and author of a recent essay that almost seemed to foreshadow the proceeding.” In a recent article Judge Rakoff penned for The New York Review of Books about neuroscience and the law, he said, “Distinctions of intent frequently determine, as a matter of law, the difference between going to prison and going free.”

Judge Rakoff’s essay signaled he might consider a scientific explanation that might help explain the crimes. “Cognitive neuroscience… holds out the promise of helping us to perceive, decide, and explain how intentions are arrived at and carried out,” the judge wrote. Andy could hardly have had a more thoughtful or receptive audience for his argument.

Judge Rakoff agreed that the crimes of the former investment advisor, while “egregious,” warranted far less than the sentencing guidelines set and the probation department advised. “In addition to his very real gambling disorder, which I’m very seriously convinced affected his rational control and decision-making,” Rakoff said, “there is also the fact that no purpose will be served by lettinghim rot in prison for years on end.”

Andy’s lawyers had an expert on compulsive gambling disorder, Dr. Marc Potenza, testify. Dr. Potenza discussed the analysis and treatment of gambling problems, the degree of control a gambler has over his actions and the chances of recidivism. The Assistant U.S. Attorney, of course, fought back at the suggestion that Andy was in any way less than fully responsible for his actions. She reminded the court that beginning in 2014, Andy used his position at the investment firm Park Hill Group to steal $38.5 million by promising friends and family members 15 to 20% returns on loans to private equity firms.

“I’m not asking the court to ignore the mental health issues the defendant has,” the AUSA argued, “but they need to be seen in the entire context.” She noted that Andy stole two identities, and caused a lasting fear of reputational harm for some of his victims who were in the investment business. He used some of the money he collected from people to pay off a loan on a $2 million apartment and to buy a $3 million home in Bronxville.

Andy started gambling on sports as a Princeton undergraduate, and continued at Harvard Law School. From sports, he moved to gambling on tech socks. At Park Hill Group, he traded relentlessly the second he received any funds, usually betting on a drop on the Standard & Poor’s 500 Exchange Traded Fund. When he lost out on the bet, he started collecting money from family and friends, and hiding his scheme by incorporating fake entities with names that were the same as, or nearly the same as, known, legitimate funds.

Andy’s plea agreement called for the 151-188 month sentencing range, but Judge Rakoff, a long-time Guidelines critic, denounced the range as “absurd.” Referring to the likelihood that some might question the lenient sentence, the Judge said outsiders didn’t know all the facts of the case.

Thus far, Judge Rakoff has not issued a written sentencing opinion, something that Ohio State University law professor Doug Berman has called on him to do. In his Sentencing Law and Policy blog, Prof. Berman said, “For consistent and cogent sentencing even after Booker made the guidelines advisory, it is critical in my view not only for federal district judges to consider thoughtfully all the 18 U.S.C. 3553(a) sentencing factors, but also for them to produce written opinions to explain how they weighed those factors in high-profile cases in which they significantly deviate from the ranges suggested by the guidelines.”

USA Today, Wall Street fraud sentencing prompts tears and debate (Nov. 6, 2016)

Schumpeter, Jail Bait – The lock-’em-up mentality for white-collar crime is misguided, The Economist (Oct. 29, 2016)

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LATEST OBAMA COMMUTATIONS RAISES QUESTIONS, PROMISES

President Obama commuted the sentences of 72 additional federal inmates last Friday, bringing his total number of commutations to 944, and both raising questions and hopes.

Effusing over his boss’s efforts, White House counsel Neil Eggleston said, “What President Obama has done for commutations is unprecedented in the modern era.”

According to Clemency Project 2014, a national volunteer lawyer initiative that has reviewed over 34,000 clemency petitions, at least 51 of the commutations granted last Friday were in cases supported by the project. This curious observation leads observers to wonder how the other 21 applications made it to the President’s desk.

It was the second time in the past eight days the White House announced that a large group of people, all convicted drug offenses (with some related gun crimes), would be released from federal prison. The two batches totaled 170 inmates. The political newspaper The Hill reported last weekend that the most recent commutation is “the latest sign he is accelerating his clemency push during his final months in office.

The frequency with which Obama is now granting commutations has encouraged some advocates who had been urging the president to “vastly increase the pace” of the effort. Likewise, some complain that Obama has completely shut down the pardon system, as well as commutations for those convicted of non-drug offenses, in favor of a system focused only on drug trafficking crime.

Two years ago White House predicted Obama would grant about 2,000 commutations, meaning that – with only 73 days left in his term – the President is only about halfway to his goal. If last Friday’s action is an indication, groups of 100 or few commutations may be released on a nearly weekly basis between now and noon on January 20, 2017.

“The Obama administration has said it was committed to ever more grants,” according to Cynthia Roseberry, the manager of Clemency Project 2014. “and it seems quite clear that the president’s actions are matching his words.”

Meanwhile, the advocacy group #cut50 announced last Friday that it will hold two days of events next week with families of people awaiting commutations, including a November 15th candlelight vigil in front of the White House. “We’re going to bring families impacted by mandatory minimum sentencing and the War on Drugs to… ask President Obama to grant an unprecedented number of clemencies to their loved ones for the holidays.”

ABA Journal, Obama commutes sentences of another 72 federal inmates (Nov. 4, 2016)

The Hill, Obama commutes sentences for 72 inmates (Nov. 4, 2016)

USA Today, With second round in eight days, Obama’s commutation power ‘reinvigorated’ (Nov. 4, 2016)

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SENATE LEADER “ALL BUT PROMISES” NO SENTENCING REFORM THIS YEAR

Federal drug sentencing reform looks like it will be one of the latest casualties of the 114th Congress, despite earning broad bipartisan support.

Senate Majority Leader Mitch McConnell has all but promised that the proposed Sentencing Reform and Corrections Act will not be up for discussion, much less a vote, in the final lame-duck session of the term.

‘Many are holding up the demise of sentencing reform as the final nail in the coffin of bipartisanship in Congress, a failed dream of reconciling party differences to put forth a major piece of legislation on any pressing policy issue.

White House counsel Neil Eggleston, praising the President’s latest commutation grants last Friday, said, “As Congress returns this month, it is essential that they take up bipartisan criminal justice reform legislation, including reforms that address the excessive mandatory minimum sentences that imprisoned many of the individuals receiving commutation today.” That now appears to be the longest of shots this year.

Congress returns for a lame duck session next week, but little is expected to happen aside from passing a spending bill for the rest of the fiscal year, and dealing with the outcome of the election itself, such as a possible shift in control of the Senate and possibly the House. The two-year 114th Congress lurches to an end in December, and any bills pending at that time that have not been passed will die.

If Hillary Clinton is elected, she reportedly is planning prompt criminal justice reform action. Her aides have been telling Democrats she plans to push for a package of criminal justice reforms, seizing on an issue with broad Republican backing. She may ask Congress to advance the Sentence Reform and Corrections Act that stalled in the Senate earlier this fall.

“There’s going to be a very important effort for bipartisan cooperation together on this,” Clinton said of criminal justice reform in a radio interview Thursday.

Arizona Republic, Justice remains elusive for some drug offenders (Nov. 3, 2016)

Washington Examiner, Civil rights groups push McConnell to pass sentencing reform (Oct. 28, 2016)

Associated Press, Hillary Clinton’s campaign quietly put together a domestic policy agenda (Oct. 31, 2016)

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 FINALLY – SOMETHING THE DEFENDANT AND GOVERNMENT AGREE ON

John Thomas engaged in the time-honored ritual of submitting fraudulent invoices to the town of Riverdale, Illinois, which reimbursed him for $374,000 he claimed to be owed.

A white-collar crimes go, John’s offense was rather quotidian, and the sentence – 60 months followed by three years of supervised release – was pretty unremarkable. But the sentencing itself was  bizarre (in a numerical kind of way) and so “serious,” the 7th Circuit said yesterday, that “the government joins the defendant in asking us to reverse the judgment with instructions for a full resentencing.”

The judge must have had a busy day when John appeared before him for sentencing. He had had the Probation Office prepare a laundry list of discretionary and special conditions of supervision. Using the list, the judge ordered

discretionary conditions of supervised release, most of which have to do with restitution and money and seeking work, these are number 1; number 2; number 4; number 6 and number 7; number 8; number 9; number 14; number 15; number 16 which includes virtually every place where a probation officer could visit the defendant at a reasonable time. 17, notifying of change in residence. 18, notifying a probation officer promptly within 72 hours of arrest or questioned by a law enforcement officer… [and]

certain special conditions which is another list. Under special condition number 3, which requires community service, if there is unemployment for the first 60 days on supervision. Number 5, restricting credit charges. Number 7 is giving the probation officer information as to financial information. Notifying the court, number 7, notifying the court in any material change in defendant’s circumstances. This is number 10 under special, he will have to contribute an amount thatʹs at least 10 percent of his net monthly income to the extent that other financial obligations have not been met. And he may not enter into any agreement to act as an informer or a special agent of a law enforcement agency without the permission of the Court.

Yesterday, the Circuit held that a sentencing judge is required to give reasons for the conditions of supervised release that he imposes, and for that matter must actually read the conditions to the defendant, “along with the rest of the sentence; that was not done either, and the judge did not explain the omission.”

Although a judge may state during sentencing that he’s incorporating into the sentence supervised release conditions contained in a written notice of proposed conditions, but only if the defendant has had a chance to review the proposed conditions before sentencing, and provided there’s no conflict between the written notice and the conditions actually imposed in the judgment. Here, the defendant never saw the written list, and – even if he had – the judge imposed a condition that the defendant participate, at a substance abuse treatment program, that was not in the written notice. What’s more, the judge imposed special condition 7 twice, the first time incorrectly, saying that “Number 7 is giving the probation officer information as to financial information.” That was wrong: the financial information condition was Number 6 in the written judgment, leaving a discrepancy between the oral and written judgment.

“And finally,” the appellate court complained, “the judge gave no reason, as he was also required to do… for the term of supervised release — 36 months — that he was imposing.”

Defendants are entitled to hear in some detail what the terms of their sentence – both the incarceration and the supervised release portions – entail. John (who is scheduled to be released next fall) will now get to see the court again, where presumably he’ll learn what’s expected of him on supervised release at a sentencing that sounds like something more than a Chinese restaurant order.

United States v. Thomas, Case No. 15-2509 (7th Cir., Nov. 3, 2016)

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MEAN WHAT YOU SAY

Mo Khawar was part of an international gang that used credit card readers at stores to steal card information from consumers. The organization used the stolen data to create counterfeit ATM cards, which were then used to fraudulently withdraw cash from victims’ bank accounts. Mo’s job was to set up the card readers – called skimmers – in the stores.

The skimmers would pull data from the credit cards’ magnetic stripes. For the crime to work, the conspirators had to be able to rely on that data – that it really meant what it said, in a manner of speaking – in order to create the phony cards needed to rip off consumers. Mo’s mistake – besides the obvious one of being involved in the conspiracy to begin with – was that he didn’t appreciate that meaning what you say applies just about everywhere, but perhaps nowhere more than in federal court.

After Mo got arrested installing skimmers in the Netherlands, he ended up in U.S. District Court for the Southern District of New York. There, he signed a plea agreement, agreeing to plead to a conspiracy count. The plea agreement specified that the Guidelines would apply to his sentence. Importantly, Mo agreed not to challenge any sentence of 87 months or less, including not bringing direct appeals or motions under 28 U.S.C. § 2255.

At the plea hearing, the court asked the usual questions required by F.R.Crim.P. 11, and Mo gave the usual answers. What he apparently did not understand was that the back-and-forth with the judge was more than ritual mumbo-jumbo. The questions were substantive, and the answers were treated as binding.

Mo told the judge that he was satisfied with his counsel, that he was competent to enter an informed plea, and that he had agreed to the terms of the plea agreement. The court made sure Mo knew he could “be sent to prison for up to seven and a half years.” The government told the court Mo had agreed to “a waiver of his right to appeal a sentence within or below the stipulated guidelines range,” and Mo confirmed on the record that he had done so.

At sentencing, Mo did not object to the presentence report, and argued for a below-Guidelines sentence. The government asked for a Guidelines sentence. The court sentenced Mo to 87 months.

Promptly on reaching prison, Mo filed a habeas petition under to 28 U.S.C. § 2255, alleging that his attorney was ineffective. He claimed sentencing range in his plea agreement was based on an inaccurate monetary loss estimate, and that his lawyer thus was his attorney should have objected to the disparity in sentences among Mo and his co-conspirators.

Last week, the Southern District of New York turned him down, reminding Mo (and the rest of us) that words have meaning. Mo waived his right to file a 2255 motion, and the court said it would hold him to it.

Waivers like the one Mo signed are common in plea agreements, and they are commonly enforced. However, even where the “plain language of a plea agreement bars a collateral attack, a defendant may still challenge “the constitutionality of the process by which he waived those rights.” A waiver of the right to appeal is not enforceable where the plea agreement was entered into involuntarily and unknowingly, or without effective assistance of counsel. In other words, if your lawyer was ineffective in telling you to waive your rights, the waiver is null. On the other hand, the waiver is effective “with respect to claims of ineffective assistance of counsel that are limited to post-plea events (e.g. sentencing).”

In his plea agreement, Mo agreed not to file a direct appeal or bring a collateral challenge under 28 U.S.C. § 2255 if he received a sentence of 87 months’ imprisonment or less, and that’s exactly what he got. Mo didn’t argue that he entered into the plea agreement unknowingly, but rather that his lawyer should not have encouraged him to sign the plea agreement because the stipulated monetary loss amount was too high. Plus, he said, his attorney dropped the ball on a whole sheaf of sentencing issues.

The court held that the only claim Mo could make in his 2255 motion that would get past the waiver was that the attorney should not have encouraged him to sign the plea agreement because the amount was too high. All his other claims were waived.

Even with that, Mo was hardly home free. His ineffective assistance claim on the plea deal, the judge said, “is grounded in the proposition that had he rejected the plea agreement, the government would have eventually relented and offered him a deal with more favorable terms.” Mo suggested his lawyer could have forced the government to prove the stipulated monetary loss amount in the plea agreement, and then to offer a plea offer with a lower stipulated sentencing range. But he had no proof that the government could not have proven the $7-$20 million loss range, or that it would have made him a better deal.

Mo’s beef was that his lawyer had missed in his estimate as to the final sentence. But attorneys’ “predictions of a defendant’s ultimate sentence under the United States Sentencing Guidelines generally do not constitute ineffective assistance of counsel because such predictions are, by nature, only guesses or estimates.” It’s enough that the defendant knows of the possibilities, and the courts cover those in plea hearings. Here, Mo knew the conspiracy count carried a 20-year maximum. As long as he was sentenced to that or less, his attorney’s prognostications were no better than our pick that the Indians would crush the Cubs. Maybe reasonable, maybe crazy – but dead wrong, and that’s the way it goes.

Mo claimed he only accepted the plea agreement “after much encouragement from counsel” and assurances from counsel that he would receive a below-Guidelines sentence. The court said, “Even assuming Khawar’s counsel actually made these statements, they cannot be the basis for an ineffective assistance claim because they were merely estimates… Moreover, at his plea allocution, Khawar acknowledged that the court could sentence him to prison for up to seven and a half years… and that he understood the sentence was ultimately up for the court to decide at a later date.”

Those words have meaning, and defendants are presumed to be consenting adults. Mo was aware of his sentencing exposure upon pleading guilty. That being the case, nothing his lawyer may have predicted matters in the least.

Khawar v. United States, Case No. 15-05784 (S.D.N.Y. Oct. 26, 2016)

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JUMPING THROUGH HOOPS

Perhaps one of our wiser defense attorneys, the Greek playwright Euripides, wrote “question everything, learn something, answer nothing.” This  advice should have been heeded by today’s defendant, Lester Smith (a pseudonym)… or, at least, his trial attorney.

We’ve written about plain error before, but today’s case is special: it illustrates just how many hoops a defendant must clear in order to carry the day on appeal after failing to question everything – that is, object often and in detail – at trial. The subject matter of the case is rather seamy, but the outcome should be troubling to anyone. Substitute “drug trafficking” or “identity theft” or “tax protester” for “child porn,” and our point becomes clearer: under the plain error standard, the district court’s mistake may be obvious and may seriously prejudice the defendant, and still, the court of appeals may be so offended by the crime or the criminal that it decides that it just isn’t interested in seeing that the law is followed.

Lester Smith pleaded guilty to a count of receipt of child pornography in violation of 18 U.S.C. § 2252A(a)(2). Lester’s Presentence Report found he was a “repeat and dangerous sex offender against minors” within the meaning of U.S.S.G. § 4B1.5, which gave him an offense level of 34 and a criminal history category of V. The PSR found Lester’s Guidelines range was 180 to 210 months.

At sentencing, the district court adopted the PSR’s findings, but imposed a 360-month sentence, significantly above the Guidelines range, because of a previous sex offense involving a child and what the court called the “very disturbing nature” and “high number” of pornographic videos and still images involved.

Lester’s lawyer didn’t object to the enhancement, but Lester raised it on appeal. reviewed only for plain error. ‘Plain error’ occurs when there was an error; the error was clear and obvious; and the error affected the defendant’s substantial rights. If all of those conditions is met, an appellate court may exercise its discretion to correct the error only if “the error seriously affects the fairness, integrity, or public reputation of judicial proceedings.”

That’s a lot of hoops for a defendant to jump through. On Monday the 5th Circuit decided that Lester didn’t make it.

Lester argued that his state aggravated incest conviction was not a prior “sex offense conviction” under U.S.S.G. § 4B1.5(a). The Court of Appeals agreed, holding that the version of aggravated incest to which Smith had pled guilty “criminalized a broader range of conduct than the corresponding offenses currently enumerated” in federal law… This Court has not identified any federal offenses that encompass the elements of Smith’s Louisiana conviction of aggravated incest. Accordingly, his previous conviction did not constitute a prior “sex offense conviction” under § 4B1.5(a)… This error satisfies the first prong of the plain error analysis.”

What’s more, the 5th Circuit said, the error was “clear and obvious… Had the district court reviewed the plain language of the relevant statutory provisions to determine whether Smith’s previous state offense was a prior ‘sex offense conviction,’ the error in the PSR’s calculation would have been apparent.”

The Circuit agreed as well that the clear and obvious error affected Smith’s substantial rights. Because of the incorrect 5-level enhancement, the wrongly PSR concluded that the Guidelines range was 180 to 210 months. Absent the error, Smith’s Guidelines would have been from 70 to 87 months (although the mandatory minimum sentence would have made it 180 months.

Lester’s district court used the Guidelines range as the beginning point to explain the decision to deviate up to 360 months, the Court said, and the Guidelines appear to have been one of the bases for the sentence imposed. Accordingly, the Court followed the Supreme Court’s recent holding in Molina-Martinez v. United States, and concluded “that the error in the calculation of the Guidelines range was sufficient by itself to show a reasonable probability of a different outcome absent the error. Thus, the error affected Smith’s substantial rights under the third prong of the plain error analysis.”

By now, readers are thinking that Lester’s 3-for-3, and should have this appeal in the bag. But he doesn’t, and that’s why this case is interesting. The Court of Appeals notes that with “the first three prongs satisfied, this Court may exercise its discretion to reverse the sentence only if the error seriously affects the fairness, integrity, or public reputation of judicial proceedings.” This fourth prong is not automatic, but rather “is meant to be applied on a case-specific and fact-intensive basis.”

During Lester’s sentencing hearing, the 5th Circuit said, “the district court stated that the offense was ‘quite troubling’ and explained, ‘I don’t know, frankly, that the Guidelines correctly captured the nature and extent of the behavior in this defendant’s collection of child pornography’.” The district court described the disturbing images and videos found, Lester’s prior sex conviction, and concluded that a 360-month sentence “was ‘a just and reasonable sentence under the history and characteristics of this defendant, the nature and circumstances of the instant offense, the need to afford adequate deterrence to future criminal conduct by this defendant, as well as the need to protect the public from further crimes of the defendant’.”

The appellate court concluded that in this case, “affirming the district court’s 360-month sentence would not result in a miscarriage of justice. Thus, we are not convinced that the district court’s error in this case seriously affects the fairness, integrity, or public reputation of judicial proceedings. We decline to exercise our discretion to correct the error.”

In other words, the Court thinks some crimes are so bad that even plain errors in applying the law simply don’t bother it.

United States v. Wikkerink,  Case No. 15-20152  (5th Cir. Oct. 31, 2016)

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THE RESUME FROM HELL

Rigoberto Ramirez-Gonzalez pled guilty to illegal reentry following deportation. At sentencing, he objected to a recommendation in the Presentence Investigation Report (“PSR”) that applied an 8-level enhancement for having committed an “aggravated felony.” The district court agreed and struck the enhancement. However, although Bert asked for it, the court did not order the PSR corrected to reflect that he had not committed an aggravated felony. The judge suggested his holding would be apparent in the Statement of Reasons attached to the judgment.

Bert appealed. While the appeal was pending, he completed his sentence and was deported.

Last week, the 5th Circuit said that what the judge had done was good enough.

There may be no more schizophrenic document in the federal criminal system than the PSR. It’s written by a Probation Officer who takes every word of the government as a pearl of truth, while remaining skeptical of the defendant even if he alleges that the sun rises in the east. At sentencing, the court is free to (and often does) ignore anything in the document it deems irrelevant to the sentence it imposes. Treatment of the contents of the PSR at sentencing could be fairly characterized as ‘cavalier.’

But once sentencing ends, the PSR begins to follow the defendant like an ugly and unwanted pet. The Bureau of Prisons deems every word in the document to be gospel, and relies on it to place inmates in facilities, qualify them for programs, and even determine how much halfway house or home confinement they should get at the end of their sentences. On supervised release, the Probation Department treats every word of the PSR as if it were vetted by the Almighty Himself. In sum, the PSR is pretty much like being forced to seek work with a resume written by the last guy who fired you. A resume you can never correct.

Bert wasn’t willing to let that happen. Sure the judge at sentencing said there had been no aggravated felony, but the PSR still said there has been. He argued that Federal Rule of Criminal Procedure 32(i)(3)(B) required the Court to correct misstatements in the PSR about the aggravated felony.

The PSR is a permanent court document that may be corrected at any time, even if the defendant is not present, the Court said, agreeing with Bert that errors in the PSR were “not harmless because it affects the defendant’s substantial rights,” and that “like a judgment, the PSR determines the rights and obligations of the defendant going forward.” To the extent that a PSR is “like a judgment,” the Court said, a challenge to an erroneous PSR is not moot after deportation.

Bert’s PSR listed a maximum sentence based on the spurious “aggravated felony,” and contained a specific reference to the aggravated felony being in his background. It also included an inaccurate total offense level and an inaccurate fine range. The district court did not specifically address the maximum sentence, but by finding that there was no “aggravated felony,” the “court effectively rejected the PSR’s recommendation of a twenty-year maximum and held instead that the ten-year maximum sentence of 8 U.S.C. § 1326(b)(1) applied.” In the Statement of Reasons, however (which is filed with the Judgment), the district court stated that the total offense level was “10,” so, the Circuit ruled, “the correct offense level and proper fine range could be easily determined. In short, the determinations that Ramirez-Gonzalez seeks are implicit from the court’s bench rulings and the Statement of Reasons, and that suffices for the purposes of Rule 32(i)(3)(B).”

After all, the appellate court said, “the district court did ‘append’ a Statement of Reasons that would necessarily be included with the PSR sent to the Bureau of Prisons. The Statement of Reasons stated that the court adopted the PSR ‘with the following changes . . .’” Those changes included raising the offense level by 4 levels, although the PSR recommended an eight-level enhancement.” Of course, anyone who read both the PSR and Statement of Reasons, and cross-referenced the SOR findings with the PSR findings, and double-checked against the transcript of the sentencing (which may or may not have ever been prepared, and which is not provided to the BOP or other agencies that get the PSR), it would be as plain as the nose on one’s face.

The Court of Appeals said the district court’s treatment of Bert’s complaint was good enough, because “the court’s implicit findings on the disputed issues were necessarily apparent from the explicit statements in the Statement of Reasons.”

United States v. Ramirez-Gonzalez, Case No. 15-41065 (5th Cir., Oct. 26, 2016)

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THE DARK SIDE OF OBAMA’S COMMUTATION PUSH IS NOT BEING REPORTED ON… AND TIME’S RUNNING OUT

Over the past weekend, the usual suspects in the media have been gushing over President Obama’s latest clemency grant to 98 more federal inmates. But there’s a darker side to Obama’s opaque commutation process that few are noting.

First, the program’s numbers are really pretty ugly so far. In Obama’s 2,842 days in office, he’s disposed of 11,832 clemency petitions. But he’s granted only 782 of them, a success rate for inmates of under 5%.

Not that anyone’s really talking about that.  On Oct. 6, for example, the White House announced with its usual fanfare that Obama had granted 102 commutations. It was a week later that DOJ quietly revealed that, at about the same time, the White House had denied 2,917 commutation petitions.

Second, some claim there’s not enough transparency about why some get clemency while others wait, and fret that time is running out. No one outside of the process knows the reasons for denials. “We want answers for the families who are still waiting for their clemency,” said Jessica Jackson Sloan, national director of the pro-clemency group Cut 50. “There needs to be more communication about why people are being denied.”

White House Counsel Neil Eggleston said that of last week’s 98 commutations, 42 of the inmates were serving life sentences. A total of 308 life sentences have been commuted so far.

Finally, as of the Oct. 6 report, 11,253 clemency petitions were pending. Do you remember pulling an all-nighter in college, and along about 5 a.m. the panic set in as you realize you only had a few hours until the exam and 15 chapters yet to review?  Obama must be feeling that right now.  As of today, he has 80 days left in office (and that’s if he skips Hawaii this Christmas) to act on the remaining clemency petitions.

Both Deputy Attorney General Sally Yates and White House Counsel Eggleston have promised that all pending petitions – that would be over 11,000 of them – will be acted on. For math fans, that works out to disposing of 137.5 petitions a day between now and Friday, January 20, 2017 at noon. For comparison, Obama has disposed of an average of 6.59 petitions a day since he took office in 2009.

The math is relentless – and pretty daunting at this point in Obama’s presidency.

USA Today, Obama grants 98 more commutations, setting single-year clemency record (Oct. 27, 2016)

SCOTUS FILLING ITS DOCKET

The lawyers arguing Beckles v. United States, the Supreme Court case considering whether Johnson v. United States applies to the Sentencing Guidelines, won’t have much of a Thanksgiving weekend. The Court announced last week that it will hear oral arguments in the case on Monday, Nov. 28, at the end of the long holiday weekend.

In other Supreme Court news, the Court granted certiorari to a trio of criminal cases last week. In the first, Dean v. United States, the court will consider a trial court’s discretion to consider the mandatory consecutive sentence under 18 U.S.C. § 924(c), which makes it a crime to use or carry a firearm during a crime of violence, in determining a sentence for the felony that serves as the basis for the § 924(c) conviction. Dean is arguing the district court had the authority to impose a very short sentence — as little as one day — for his robbery convictions, to take into account the much longer sentence required by § 924(c).

In Packingham v. North Carolina, the defendant became a registered sex offender after he was convicted (at age 21), of taking indecent liberties with a minor. Six years after his conviction, North Carolina made it a felony for registered sex offenders to access many websites, including Facebook, The New York Times and YouTube. Packingham was convicted of violating this law after he posted to Facebook, thanking God for dismissal of a traffic ticket. Packingham argues the law violates the First Amendment.

Finally, in Esquivel-Quintana v. Lynch, the petitioner was a permanent resident of the United States in 2009, when he was charged with violating a California law because he – at age 21 – had consensual sex with his 16-year-old girlfriend. The feds government sought to remove Esquivel-Quintana from the USA on the ground his conviction constituted the “aggravated felony” of “sexual abuse of a minor.” The Supreme Court will decide whether that removal is correct.

SCOTUSBlog, Court Adds Five New Cases to Docket (Oct. 28, 2016)

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6TH CIRCUIT HOLD MICHIGAN BURGLARY STATUTE IS NOT ACCA PREDICATE

Reversing its pre-Mathis decisions on the subject, the U.S. Court of Appeals for the 6th Circuit ruled yesterday that the Michigan breaking and entering statute (Mich. Comp. Laws § 750.110) is too broad to serve as a generic burglary predicate for the federal Armed Career Criminal Act.

Under the ACCA, possession of a firearm by a convicted felon who has three prior crimes of violence or serious drug felonies carries a mandatory sentence of at least 15 years. The statute defines a “crime of violence” as including burglary, arson, extortion or use of explosives.

A burglary, however, isn’t necessarily a burglary. The Supreme Court has ruled that the enumerated crimes in the ACCA are intended to be the general, common-law versions of those offenses. Federal courts have struggled over the years, however, to determine whether state statutes that sometimes define a burglary much more broadly than what it originally was, are still predicates for the ACCA. After the Supreme Court’s decision in Mathis v. United States earlier this year – which redefined how such broad statutes are to be parsed – the task has only become harder.

For example, at common law, a burglary was defined as the “an unlawful or unprivileged entry into, or remaining in, a building or other structure, with intent to commit a crime.” Many state statutes, however, defined burglary as included entry into cars, boats, tents, back yards and even vending machines. While states are entitled to adopt such expansive definitions, federal law is not required to heap on additional punishment under the ACCA by including such conduct under the label “burglary.”

Chris Ritchey was caught with a gun, and convicted of being a felon in possession under 18 U.S.C. 922(g). Because he had six prior convictions for breaking and entering under Mich. Comp. Laws § 750.110, he was sentenced under the ACCA to 15 years.

Two days ago, the 6th Circuit reversed the sentence. The Court had previously held that convictions under Mich. Comp. Laws § 750.110 counted for ACCA purposes, but that was before this past summer’s Mathis decision. “Generally,” the Court noted, “a prior published decision binds a later panel of this court unless it is overturned by the Supreme Court or overruled en banc, but departure is also warranted if ‘an inconsistent [ruling] of the United States Supreme Court requires modification of the decision’.”

The Michigan statute held that a “person who breaks and enters, with intent to commit a felony or a larceny therein, a tent, hotel, office, store, shop, warehouse, barn, granary, factory or other building, structure, boat, ship, shipping container, or railroad car is guilty of a felony punishable by imprisonment for not more than 10 years.” Previously, the district court was permitted to look at the state court records to see whether the defendant had broken into a structure – which would count for ACCA purposes – or something else, like a boat, a railroad car or a shipping container (which would not count). But Mathis made clear that unless the list of places one could break into to under the statute were separate elements, courts were not allowed to review state court records to decide exactly what the defendant was said to have done.

The Circuit found that “the Michigan Court of Appeals has labeled the statutory alternatives in § 750.110 as ‘examples,’ which cuts against finding that they are, in fact, elements. In defining the elements of breaking and entering, Michigan courts have also treated violations of § 750.110 as a single crime regardless of the particular place broken into.” Plus, the Court observed, the Michigan pattern jury instructions “do not mandate that the trial court identify the particular place at issue. In addition, they indicate that § 750.110’s list is comprised of “type[s] of building[s]” that qualify under the statute—not separate elements of distinct crimes.” Finally, the Court said, the list in § 750.110 of places that can be broken into includes the phrase “or other building,” implying that the list is non-exhaustive, further evidence that the list of places is not intended to be a list of elements of the crime.

Thus, the Circuit said, “only one conclusion is possible under Mathis: a conviction under § 750.110 cannot serve as a predicate offense under ACCA.”

United States v. Ritchey, Case No. 15-2460 (6th Cir., Oct. 26, 2016)

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DON’T SING

An old Russian proverb warns that “when you’re in it up to your neck, don’t sing.” Frank Piper could tell you something about that.

Frank’s doing 135 months for a cocaine conspiracy. He filed a motion for sentence reduction in response to the 2-level reduction adopted by the Sentencing Commission. The public defender filed a boiler-plate 18 U.S.C. 3582(c)(2) motion that was heavy on policy arguments but bereft of any meaningful discussion about why Frank should get a sentence cut.

The government had a few good reasons why Frank’s motion should be denied, not the least of which was that – after he pled guilty but before he was sentenced – Frank had created a rap video posted to YouTube in order to intimidate four cooperating witnesses whose statements had appeared in his Presentence Report. The video rapped “an anti-cooperation message – referencing ‘conspiracy’ as ‘the hardest charge to beat’ and someone who ‘would try to tell on me’,” as well as darkly warning people to “stop snitchin’.”

Images in the video included Frank using his index finger to simulate pulling a trigger and a bound-and-gagged hostage in a dark room, who is later shown in a posture suggesting he’d been killed. A screen caption instructing to send letters and pictures to the defendant’s prison address.

The government argued the video demonstrated Frank was a public safety hazard, and thus, that “a reduced sentence… was therefore unwarranted under the 18 U.S.C. § 3553(a) factors, which a district court must consider when determining whether to reduce a sentence under § 3582(c)(2).”

Strangely, Frank did not contest the provenance of the video, but instead just claimed he had had nothing to do with putting the video on YouTube. Unsurprisingly, the district court was not impressed with the argument, denying Frank’s sentence reduction motion based on “the scope of defendant’s conduct in connection with the [underlying] offenses, the significant danger to the community by defendant’s participation in” that offense, and his “rap video.”

This week, the 10th Circuit agreed, sweeping aside Frank’s claim that the district court was not allowed to consider newly alleged presentencing conduct not addressed at the original sentencing and that the court erroneously concluded Frank intended the video to be viewed by and construed as a threat to the cooperating witnesses.

In determining whether a 3582(c)(2) reduction should be granted, a judge first determines the defendant qualifies. If he or she does qualify (and more than two out of five don’t), the judge must then consider any applicable § 3553(a) sentencing factors. Additionally, the judge may (but not must) consider the defendant’s post-sentencing conduct. After those considerations, the judge may pretty much do whatever he or she wants to do, grant the whole reduction, part of the reduction, or – as in Frank’s case – none of it.

Under 3582(c)(2) and its implementing Guideline, § 1B1.10, the district court cannot monkey with any of the Guidelines determinations in the original sentencing except for the change authorized by the Sentencing Commission.

Frank figured he could drive his truck through the hole this created. His unfortunate video was not post-sentencing conduct, because he had made it before sentencing. But because the government didn’t find out about it until after sentencing, it was not part of his original sentencing, so – as Frank argued it – the judge couldn’t use it against him now. Frank argued § 1B1.10 “requires the court to place the defendant in the posture he was at his original sentencing, with the only difference being the substituted guideline” and that a court must therefore disregard new allegations of presentencing conduct.

Nice try, the Circuit said. It said its precedent holds only that “district courts in § 3582(c)(2) proceedings cannot make findings inconsistent with that of the original sentencing court… not that a district court must disregard new allegations of presentencing conduct.” In Frank’s case, the new findings about the old video “are not and cannot be inconsistent with the findings from the original sentencing proceedings because the video’s existence and its contents were not even known at the time of Mr. Piper’s original sentencing.” After all, the Court of Appeals said, 1BI.10 directs court to “consider the factors” in 18 U.S.C. 3553(a), and “because § 3553(a) includes consideration of presentencing conduct, including the ‘nature and circumstances of the [underlying] offense and the history and characteristics of the defendant,’ Mr. Piper’s argument that the court may consider only post-sentencing conduct is inconsistent with § 1B 1.10.”

Finally, the Court said, 1B1.10’s requirement that a court substitute the amended guideline and “leave all other guideline application decisions unaffected” does not mean the court must disregard newly alleged presentencing conduct at step two when the court considers the § 3553(a) factors. “Because nothing in the case law or in § 1BI.10 clearly requires a district court to disregard new allegations of presentencing conduct,” the Court held, Frank was out of luck.

As for the claim that the district court was wrong in its conclusions that Frank created the video “so that it would be disclosed, viewed and construed as a threat to cooperators,” the 10th let the video speak for itself: “The video shows Mr. Piper and another individual extend their hands toward the camera and make a trigger-pulling motion with their index fingers, while the lyrics ‘try to tell on me’ play.”

C’mon, man. Next time, be a little more subtle. Or better yet, you want to sing, do it in the shower.

United States v. Piper, Case No. 15-3288 (10th Cir., Oct. 25, 2016)