Articles Posted in Federal Sentencing

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U.S. v Langford is about a politician who went bad. Langford took more than $240,000 in bribes in the form of cash, clothing, and jewelry from codefendant William Blount while serving as a county commissioner in Jefferson County Alabama. Blount ran investment banking firm that specialized in underwriting and marketing municipal bonds. As a commissioner, Langford had the authority to select firms to handle the county’s financial transaction. Blount solicited and received business from the county for his investment firm, handling many of the county’s transactions for general obligation bonds and other county financial transactions. The deals yielded net benefit of about $5.5 million to Blount’s firm. In exchange, Blount gave Langford about $150,000 in cash and $90,000 worth of clothing and jewelry, including buying sprees at expensive clothing and jewelry stores in New York City. This led to multiple charges of bribery, mail and wire fraud, money laundering, and tax fraud.

The wire and mail fraud charges alleged that Langford’s fraud deprived the citizens of Jefferson County of their right to receive his “honest services,” for which Langford had a fiduciary duty to provide. A violation of the wire and mail fraud statutes include a scheme to deprive another of the intangible right of honest services. According to the Eleventh Circuit, when a public official uses his office for personal gain, he deprives his constituents of their right to have him perform his official duties in their best interest. There was sufficient evidence to show Langford deprived the citizens of honest services by showing his position in the county gave him authority to choose Blount’s firm and he did select the firm which receive millions of dollars in benefits in exchange for cash, and jewelry, without disclosing these valuable items. The court found the evidence sufficient to prove the elements of mail and wire fraud because Langford sent packages containing merchandise purchased for him by Blount to his office in Alabama. Langford caused the use of the wires when Blount used his American Express card to make purchases on Langford’s behalf to further the scheme to defraud the county.

Langford also challenged several evidentiary rulings.

He challenged the admission of “eye-catching” gambling winnings contained in his income tax returns, but the returns were admissible to show failure to report the cash or gifts as income. The bank records relating to his credit card were offered to show the special treatment he received in exchange for county business by causing the county to hire the bank as its financial adviser for bond transactions. The Court found the bank records were properly admitted under the business record exception of Rule 803(6) of the rules of evidence.
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In U.S. v. Barrington, the defendant and some friends at Florida A & M University decided to improve their grades for graduate school applications. They devised a plan to access the school’s internet based grading system using keylogger software, a program which captures every keystroke made on a computer. A codefendant working in the Registrar’s office installed the program on various University computers and managed to capture the usernames and passwords made by school employees as they signed onto their computers. Not only did the defendants change grades, they added credits for courses failed or not taken and changed the residence of non-resident students to qualify them for in-state tuition. Barrington and his friends were indicted on conspiracy to commit wire fraud (18 U.S.C. §1349), fraud using a computer (18 U.S.C. §1030), and aggravated identity theft 18 U.S.C. §1028.)

The defendant challenged the admission of prior bad act evidence, under to Rule 404(b) of the Federal Rules of Evidence, showing how Barrington had previously changed grades for a coconspirator using forged instructor signatures on University grade change slips. The court applied the following 3-step test:

  • The evidence must be relevant to an issue other than the defendant’s character;
  • There must be sufficient proof so that the jury could find that the defendant committed the extrinsic act; and
  • The evidence must be probative value that is not substantially outweighed by undue prejudice.
    The court found the evidence was probative of intent, and found a basis for the jury to find he committed the extrinsic act and it was not outweighed by unfair prejudice.

    Barrington also challenged the trial court’s limitation on his cross examination of a government witness by preventing him from questioning him about a pending Florida state burglary charge because the charged had not yet been reduced to a conviction. The appellate court found that the cross on the burglary charge would not have presented a different impression of the witness’ credibility because the defendant’s counsel elicited sufficient information from the witness about his possible motive to testify and his personal bias against the defendant to enable to jury to assess his credibility.

    Barrington also claimed the prosecution was on a legally erroneous fraud theory in that changed grades do not constitute a property interest and therefore the Government’s proof did not establish financial deprivation as required under the wire fraud statute. The court rejected the argument, finding FAMU has a property right to the tuition generated by class hours a student registers for and the higher tuition paid by non-resident students.
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    The defendant business in U.S. v. Chaplin’s was a jewelry store in Atlanta from which the defendant, an employee, sold jewelry on a cash basis to persons he knew to be drug dealers. In one instance an undercover IRS agent posing as a narcotics trafficker purchased expensive jewelry in cash from the defendant at his store without completing a Form 8300. The undercover cash sales were structured to avoid individual payments in excess of $10,000, a transaction which required the defendant to file a report with the federal government (Form 8300) containing information about the such as buyer’s name and address. Chaplin’s, Inc., was indicted on money laundering counts and a count of failure to report, all arising out the undercover sale and the failure to file the Form 8300. Because the defendant committed the violations during the course of his employment at Chaplin’s, Chaplin’s Inc. was vicariously liable for his actions and charged by indictment.

    The both counts of the indictment sought forfeiture of “any and all property involved in” the offenses including the jewelry store’s entire inventory. Following trial Chaplin’s was found guilty and the government moved to forfeit the inventory on the grounds that the inventory was “involved in” the money laundering and reporting offenses because it provided the defendant owner and employees and vicariously Chaplin’s with an “air of legitimacy.” The inventory totaled $1,877,262. The district court ordered forfeiture of the inventory, plus it imposed a $100,000 fines for two counts.

    On appeal Chaplin’s challenged the monetary punishment as a violation of the 8th Amendment as the forfeiture was unconstitutionally excessive and grossly disproportional to the gravity of the offense.

    In deciding gross-proportionality, the appellate court looked at three factors:

    • Whether the defendant falls into the class of persons against whom the criminal statute was principally directed;
    • Other penalties authorized by the legislature or the Sentencing Commission; and
    • The harm caused by the defendant.

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    Bradley and codefendants were convicted of conspiracy to commit wire fraud, mail fraud and money laundering along with other federal statutes. Bradley, the lead defendant, owned “Bio-Med Plus,” a pharmaceutical wholesaler that purchased and sold blood-derivatives (intravenous immune globulin) used to treat patients with HIV. The fraud Bradley committed was that he recruited physicians who dispensed blood-derivatives (IVIG) at AIDS clinics in the Miami area to fill their prescription at Bradley’s pharmacies for a kickback. Bradley purchased the unused portions (from patients who failed to appear at the clinic for the IVIG infusion) for one-third of the price that Florida Medicaid paid the pharmacies.

    Bio-Med put those derivatives in their inventory and sold the unused derivatives to third party pharmacies in Florida and California for a substantial profit. The third party pharmacies unwittingly billed Medicaid for theses unused prescriptions. Bradley’s pharmacies filled prescriptions with the recycled derivatives and obtained reimbursement from the state’s Medicaid programs.

    The Court of Appeals decided that a reasonable jury could find sufficient evidence that the defendants engaged in a scheme to defraud Florida Medicaid and Medi-Cal. It determined that Florida Medicaid and Medi-Cal never intended to reimburse for recycled blood derivatives that had been previously dispensed; that Bradley knew of these policies; that the programs would not knowingly pay for recycled blood derivatives previously dispensed; that the Bradley purchased recycled medications at discount prices from corrupt physicians with the intent to resell them for a significant profit; and that the defendants sold them off at full wholesale prices to pharmacies which dealt almost exclusively with Medicaid patients that bill the Medicaid program as if the blood derivative had never been recycled.
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    In U.S. v. James the defendant appealed his conviction and sentence of 262 months for possession with intent to distribute less than 5 grams of cocaine. James was convicted following a trial on the lesser charges that he distributed more than 5 grams. There were two issues raised in this appeal. In the first issue the defendant claimed the judge reasonable doubt instruction misled the jury and lowered the government’s burden of proof by including a subjective standard of proof. In the second issue the defendant challenged the failure to comply with 21 U.S.C. §851(b) by failing to conduct a colloquy regarding his prior conviction.

    With regard to the reasonable doubt instruction, the court disposed of this issue invoking the invited-error doctrine. The defendant not only offered the instruction and failed to object. It turns out the defendant submitted to the Court a definition for reasonable doubt from the former version of the Eleventh Circuit Pattern jury instruction and it was given to the jury by the court with out any objection from defendant.

    The more significant issue here involved whether 851(b) required strict compliance. In U.S. v. Weaver the Eleventh Circuit held that the requirement of 851(a) was strict compliance. A defendant convicted of a drug offense faces an enhanced minimum mandatory sentence, having a prior drug conviction, if the government complies with 851(a) by filing the information setting forth the conviction. Compliance with 851(b) requires that at sentencing the court must “inquire” of the defendant as to “whether he affirms or denies that he has been previously been convicted as alleged in the information, and shall inform him that any challenge that is not made before sentencing is imposed may not thereafter be raised to attack the sentence.” Once the government complied with 851(a), the issue in this case was whether 851(b) also required strict compliance.

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    In Gilbert v. U.S. the Eleventh Circuit Court of Appeals ruled en banc that the savings clause of 28 U.S.C. §2255 does not permit a federal prisoner to challenge his sentence through a habeas petition under 28 U.S.C. §2241 if he was otherwise barred by §2255 from filing second or successive motions. At the risk of becoming mired in the procedural history of the case, here is a short summary of what happened.

    Convicted of a drug offense, Gilbert’s sentence was enhanced under Guidelines Section §4B1.1 because he was deemed a career offender for his convictions for crack sale and carrying a concealed weapon. On direct appeal he raised and lost on the issue that the gun possession was not a crime of violence (U.S. v. Gilbert) His petition for certiorari to the Supreme Court was denied and subsequently he lost his motion to vacate conviction under §2255 on the same grounds. Then the Supreme Court decided in Begay v. United States that the offense of driving under the influence was not violent felony within the definition of the Armed Career Criminal Statute, 18 U.S.C. §924(e). Following Begay, the Eleventh Circuit decided in U.S. v. Archer that carrying a concealed weapon was not a crime of violence under the §4B1.1 career offender enhancement.

    The Eleventh Circuit effectively reversed the Gilbert decision in Archer. Understandably, Gilbert wanted his sentence reduced after Archer and he filed a second §2255 motion to be sentenced without the armed career enhancement. Unfortunately, he already raised his post conviction §2255 motion and the district court denied his second under §2255(h) which bars successive petitions. The Eleventh Circuit panel reversed the district court with a finding that the “savings clause” exception of §2255(h) applied and allowed for traditional habeas relief under §2241. The panel also found the “actual innocence” exception to §2255(h) applied because he had been enhanced for a nonexistent violent crime.

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    This is one of those rare cases where the court of appeals found a Rule 29 motion should have been granted because the facts were insufficient to support a conviction of the charges. In U.S. v Friske the defendant was charged with attempting to obstruct a forfeiture proceeding by attempting to dispose of money subject to a forfeiture proceeding in violation of 18 U.S.C. 1512(c)(2). The defendant was convicted following a trial. The court of appeals vacated the conviction and ruled there was insufficient evidence showing that he was guilty. The facts as presented at trial showed as follows. William Erickson had been indicted for drug conspiracy charges related to a marijuana grow operation. Erickson called Friske from jail and asked Fiske to travel to Erickson’s home to do a repair job. He told Friske the job required Friske to don a pair of gloves, get on his hands and knees under the pool deck.

    Agents intercepted these jail calls to Friske and headed out to the property the day before Friske would get there After digging in the area describe by Erickson, they found $375,000 hidden in a pvc pipe buried under the pool decking. The next day, when the agents arrived they found Friske on the property wearing a pair of gloves, holding a flashlight, dirt on his chest and arms. After questioning and a search of his van revealed letters from Erickson asking him to find some things at Erickson’s house and take them back to Friske’s home. When confronted about digging around the pool deck, he claimed he was looking for wood rot. Later, on the phone with Erickson, Friske is recorded as saying the DEA agents had been on the property but Agents arrived while he was there. He said the agents did not “buy it” when he told the agents the pilings underneath the deck needed repair because he was fixing and securing the property for Erickson.

    A conviction under 18 U.S.C. 1512(c)(2) requires the following:
    • that there be n official proceeding taking place,
    • the defendant’s conduct constituted a substantial step toward the commission of the crime,
    • that the defendant acted with improper purpose and to engage in conduct knowingly and dishonestly with the specific intent to obstruct the forfeiture proceeding,
    • the natural and probable effect of the conduct would be the interference with the administration of justice.
    Wrestling with the requirement that Friske know that there was an official proceeding, the court agreed with other circuits in finding that the defendant “must have a relationship in time causation or logic with the judicial proceeding.”
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    This case involves parental kidnapping by a father in Florida who took his son out of the country on a 32 foot sail boat. In U.S. v. Martikainen the defendant pleaded guilty to the charge of international parental kidnapping (18 U.S.C. §1204(a)), for leaving his the United States with his son. His sentence was enhanced under §3C1.2 for “recklessly creating a substantial risk of death or serious bodily injury to another person in the course of fleeing from a law enforcement officer.” The Eleventh Circuit Court of Appeals reversed the federal sentence enhancement imposed under the Federal Sentencing Guidelines.

    Here is what the father did. Following a contentious battle with his ex-wife over visitation with his son, Martikainen, was under court order to have only supervised visitation with the child. Martikainen purchased the sail boat he painted grey. Not long after, during a supervised visit with his child, he absconded with his son while the supervisor was in the restroom. He drove his son to a marina where he boarded the sailboat, which he had purchased a few days after the court initially entered the order, and headed to the Gulf of Mexico towards the Yucatan Peninsula. In route, the Coast Guard found them and monitored his direction for hours before finally boarding the boat. Martikainen fully cooperated with the agents in turning over the child.

    While the court agreed that Martikainen’s conduct did create a substantial risk of death or serious bodily injury to his son for these reasons:
    • he had no license as a boat captain,
    • no experience as a sailor,
    • the boat was painted grey,
    • the boy had no life jacket when found.
    However, the court found that this sentencing guidelines provision is only applicable where the defendant knows he is fleeing from a law enforcement officer who is in pursuit.
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    The federal mail fraud statute, 18 U.S.C. §1341, makes it a federal crime to use the mail in any way to advance a fraud. The federal wire fraud statute, 18 U.S.C. §1343, makes it a federal crime to use any interstate wire communication to advance a fraud. The defendants here were charged and convicted of violating the wire fraud and mail fraud statutes because of their involvement in defrauding investors who invested in telecommunications companies known as competitive local exchange carriers (CLEC’s). A CLEC is an entity that acquires discounted local retail telecommunication services from Baby Bells for resale to the public without any infrastructure costs of their own. The Unites States Attorney presented the following evidence showing the defendants intended to defraud the investors:

    • they solicited 8 million dollars from investors for several CLECs,

    • the CLECs they started made no money and eventually fell into bankruptcy,

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    Alicia Rodriguez pled guilty to a Federal Medicare fraud conspiracy involving 19 million dollars in bogus Medicare claims. In exchange for her cooperation, the prosecutor filed a motion pursuant to §5K1.1 of the Federal Sentencing Guidelines. It is the prosecutor’s discretion to file this motion if and when the prosecutor decides the defendant has provided “substantial assistance” in the investigation or prosecution of another case. Here the prosecutor recommended a 40% sentence reduction from the guidelines while the defendant’s attorney requested a 60% reduction.

    The court followed the government’s 40% recommendation but expressed its disapproval with the defendant before imposing sentence. “This is really a disturbing case. She comes to this country as a Cuban refugee seeking freedom from the Communist rule and the first thing she does is she rips off the Government for $19 million on a program that’s designed to help people who have physical disabilities, and to me that’s shocking. That’s shocking.” On appeal, the defendant claimed the court showed biased against her Cuban nationality when he mentioned her nationality in imposing sentence. No objection was raised to this comment at sentencing so the court reviewed it on the basis of plain error. To overcome the plain error review hurdle, the defendant cited two Second Circuit opinions that excuse the failure to make a contemporaneous objection at sentencing to perceived judicial bias because a defendant is understandably reluctant to accuse a judge, who is about to impose sentence, of bias.

    The Eleventh Circuit panel rejected the Second Circuit’s plain error review exception when there is no contemporaneous objection to bias at sentencing. Applying the plain error standard, to be reversible the error “must be clear from the plain meaning of a statute or constitutional provision, or from a holding of the Supreme Court or this Court.” It found that the appearance of bias, without any actual bias, is not a constitutional violation. The Court found no actual bias and concluded there was no plain error. The court rejected outright the argument that a defendant should not be required to object for fear of retribution from the judge. In view of the lawyer’s obligation to represent a client zealously, a judge should not be offended by an attorney’s objection that the court is biased against his or her client.
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