On March 5, 2020, the Second Circuit (Katzmann, Kearse, Bianco) issued a brief per curiam opinion in United States v. Alcius, et al., affirming the defendant’s 20-year sentence on sex trafficking related charges. Defendant-Appellant Almonte challenged the sufficiency of the evidence supporting her conviction and also appealed the procedural and substantive reasonableness of her sentence. The court affirmed both the conviction and sentence.
Second Circuit Criminal Law BlogVisit the Full Blog
The Second Circuit Criminal Law Blog is your place to follow the criminal law decisions rendered by the U.S. Court of Appeals for the Second Circuit. With a rich 225-year history of legendary judges like Learned Hand and Henry Friendly, the Second Circuit has long been known for writing important and thoughtful opinions on many subjects, including the criminal law. We review every published criminal law opinion handed down by the Second Circuit in order to provide you with a summary of the holding, an assessment of the key legal issues, and practice pointers based on the Court’s ruling. Our focus is on white-collar criminal cases and matters relating to internal investigations. Our blog is written by a team of experienced attorneys, including many former law clerks for the Second Circuit and other federal courts. The blog’s editor in chief is a former Deputy Chief Appellate Attorney in the U.S. Attorney’s Office for the Southern District of New York who has appeared in more than 100 Second Circuit criminal appeals.
In United States v. Ojeda, the Second Circuit (Cabranes, Raggi, Korman, by designation) affirmed a 2018 judgment issued in the Southern District of New York ordering a mandatory minimum sentence under the Armed Career Criminal Act (“ACCA”) for a felon-in-possession conviction. The Court rejected defendant’s arguments that his prior convictions did not qualify as ACCA predicates and that ACCA’s definition of “serious drug offense” is unconstitutionally vague. Defense counsel made the right arguments, but recent changes in the law seem to have compelled this ruling.
In United States v. Pilcher, the Second Circuit (Leval, Cabranes, Sack) (per curiam) considered whether a habeas petitioner could proceed anonymously—in this instance holding that he could not (as the case’s caption makes clear).
Second Circuit Employs “Mini-En Banc” to Relieve District Court of Requirement to Complete Non-Existent Form
In United States v. Karim Smith, the Second Circuit (Wesley, Chin, Sullivan) overturned its prior precedent and held that district courts need not complete a written ‘statement of reasons’ (“SOR”) form when sentencing a defendant during a violation of supervised release (“VOSR”) proceeding, at least until such a form is created by the Sentencing Commission.
As Second Circuit Remands on Procedural Reasonableness Grounds, Judge Calabresi Calls for More Searching Review of Obstruction of Justice Sentences
In United States v. Pugh, No. 17-1889 (2d Cir. Dec. 10, 2019, as amended) (Calabresi, Droney, Underhill, by designation), the Second Circuit affirmed a defendant’s convictions for attempting to provide material support to a foreign terrorist organization and obstruction of justice but vacated the resulting sentence on procedural reasonableness grounds.
On December 6, 2019, the Second Circuit (Calabresi, Pooler, Park) issued a published per curiam decision in United States v. Kosic (Nunez), concerning the defendant-appellant’s motion for in forma pauperis (“IFP”) status in his direct criminal appeal. The appellant’s motion arose from a district court order denying his IFP motion based on a finding that the appeal would be frivolous pursuant to 28 U.S.C. §1915. In its published decision, the Second Circuit granted the motion and held that it is proper to consider only the defendant’s financial eligibility—and not the merits—when deciding motions for IFP status and appointment of counsel under the Criminal Justice Act (“CJA”) in a direct criminal appeal.
On December 3, 2019, the Second Circuit (Kearse, Pooler, Livingston) issued a decision in United States v. Calderon, et al., reversing an $18 million restitution order and otherwise affirming the defendants convictions and sentences. In reversing the restitution order, the Court determined that the defendants’ fraud had not proximately caused the financial losses suffered by the U.S. Department of Agriculture (“USDA”) and certain banks.
On November 14, 2019, the Second Circuit (Newman, Pooler, Cote) issued a decision in United States v. Van Der End, affirming the conviction of a defendant who pled guilty to drug trafficking conspiracy and activity, in violation of the Maritime Drug Enforcement Act (the “MDLEA”), 46 U.S.C. §§ 70501 et seq. Most drug prosecutions in federal court are initiated pursuant to the Controlled Substances Act but this case involved issues of maritime apprehension, and was charged under MDLEA.
Second Circuit Grants Rehearing and Vacates Guilty Plea Following Supreme Court’s Decision in Rehaif v. United States
On November 13, 2019, the Second Circuit (Hall, Lynch, Gardephe) issued a decision in United States v. Balde, vacating the defendant’s guilty plea for unlawful possession of a firearm by an alien who is in the United States illegally or unlawfully, in violation of 18 U.S.C. §§ 922(g)(5)(A) and 924(a)(2). The panel initially upheld Balde’s conviction on appeal, but eight days after the Court’s original decision, the United States Supreme Court decided Rehaif v. United States, 139 S. Ct. 2191 (2019), holding that a conviction under the relevant statutes required the government to prove that the defendant knew that he or she was in the country illegally at the time he or she possessed the firearm. Prior to Rehaif, every Circuit to consider the question held that the defendant’s knowledge of this fact was not an element. The Second Circuit then granted Balde’s petition for rehearing and concluded that the district court had committed plain error in failing to ensure that Balde was apprised of this knowledge requirement before pleading guilty (even though the district court had no reason at the time to think it was an element of the crime) and because the record did not contain facts sufficient to support a conclusion that Balde was aware that he was in the country illegally.
Government Need Only Show that it Employed Procedures Reasonably Calculated to Provide Notice to a Prisoner of Civil Forfeiture Action
On November 7, 2019, the Second Circuit (Calabresi, Livingston, Lohier) issued a per curiam decision in United States v. Brome, holding that the Government generally must demonstrate the existence of procedures reasonably calculated to ensure that a prisoner receives notice of a forfeiture action against him.
Second Circuit Holds That Traveling Interstate for the Purpose of Engaging in Illegal Sexual Conduct is Not a Strict Liability Crime
On November 4, 2019, the Second Circuit (Kearse, Wesley, Chin) issued a decision in United States v. Murphy, vacating a defendant’s guilty plea for traveling interstate for the purpose of engaging in illicit sexual conduct with a minor, in violation of 18 U.S.C § 2243(b). The panel sided with several sister circuits in concluding that § 2243(b) is not a strict liability crime, and requires that the defendant travel interstate with the requisite intent, regardless of the actual age of the victim. The Court concluded that the district court had committed plain error in failing to ensure both that the defendant was adequately informed of this essential element of the crime to which he was pleading guilty, or that there was an adequate factual basis for the plea. Notwithstanding the awful nature of the crime committed here, it is important for courts to make sure that a defendant is advised of the elements of the offense, as required by Rule 11, and that he admits to those elements.
In United States v. Moran, the Second Circuit (Calabresi, Cabranes, Chin) affirmed the sentence of Lamont Moran, who was convicted of conspiracy to distribute heroin. On appeal, Moran challenged the application of two sentencing enhancements, one for acting as a supervisor in the course of his criminal activities (the “Aggravating Role Enhancement” of U.S.S.G. § 3B1.1) and one for engaging in criminal activities as his livelihood (the “Criminal Livelihood Enhancement” of U.S.S.G. § 4B1.3). In affirming, the Court clarified several elements of the Criminal Livelihood Enhancement. While the Guidelines are only advisory, they remain an important part of federal criminal sentencing, although as we will see here, the particular Guidelines enhancement addressed by the panel may not have made a difference in the sentence imposed.
In United States v. Arrington, 17-4092-cr (October 18, 2019) (Lynch, Lohier, Judge Brian M. Cogan of the United States District Court for the Eastern District of New York, sitting by designation), the Second Circuit vacated Defendant-Appellant Roderick Arrington’s convictions for murder in aid of racketeering and related convictions, and remanded for a new trial, holding that he was not provided with adequate information prior to waiving his attorney’s actual conflict of interest. While defendants should have their counsel of choice, and have the right to waive most conflicts of interest, the defendant needs to have sufficient information and independent advice to make a knowing and intelligent waiver of the right to conflict-free counsel. The Court of Appeals has long policed the boundaries of this issue and Arrington will give courts and counsel further guidance about how to approach these notoriously tricky Sixth Amendment questions.
On Friday, the Second Circuit (Livingston, Carney, Sullivan) reinstated the conviction of a former Nomura Securities International, Inc. (“Nomura”) bond trader, Michael Gramins, in United States v. Gramins, No. 18-2007-cr, finding the lower court’s decision to grant Gramins a new trial pursuant to Rule 33 was based on an “overbroad” reading of the Circuit’s 2018 ruling in United States v. Litvak (“Litvak II”) that “cannot be located within the range of permissible decisions.” Litvak II was a major decision and the Gramins decision implicitly limits the reach of Litvak II to cases in which the government or its witnesses expressly described a broker as an agent when he or she is not, in fact, an agent. Future decisions will no doubt revisit these cases, looking for the dividing line between the two.
On September 3, 2019, a divided panel issued a decision in United States v. Wallace (Winter, Pooler, Abrams, by designation) affirming the district court’s denial of Wallace’s suppression motion as well as Wallace’s 15-year mandatory minimum sentence under the Armed Career Criminal Act (“ACCA”). Judge Pooler wrote an 18-page dissent explaining why she believed Wallace’s suppression motion should have been granted. The primary issue addressed in the competing opinions was whether the prolonging of a traffic stop was supported by reasonable suspicion.
In United States v. Brown (Newman, Hall, and Chin), the Second Circuit addressed two related questions. First, the Circuit held that Dean v. United States, 137 S. Ct. 1170 (2017), abrogated prior circuit precedent in United States v. Chavez, 549 F.3d 119 (2d Cir. 2008), thereby allowing district courts to consider the severity of applicable mandatory consecutive sentences in determining the sentences for underlying predicate offenses. And, second, the panel concluded that the appropriate remedy under the facts presented was remand for resentencing, rather than merely for clarification.
In Wake of Supreme Court’s Vagueness Rulings, Second Circuit Vacates Section 924(c) Residual Clause Conviction
In United States v. Barrett, No. 14-2541 (2d Cir. Aug. 30, 2019) (Winter, Raggi, Droney), the Second Circuit vacated a defendant’s conviction for using a firearm in connection with a “crime of violence” under 18 U.S.C. § 924(c) in the wake of the Supreme Court’s recent decision striking down the residual clause of that statute in United States v. Davis, 139 S. Ct. 2319 (2019). To understand the Second Circuit’s decision, a brief discussion of Section 924(c) and Davis is warranted. Section 924(c) raises some of the same questions presented by litigation under the Armed Career Criminal Act (“ACCA”), which has been the subject of repeated litigation in the Supreme Court and the Circuit Courts of Appeal in recent years.
In United States v. Ryan, 17-3919-cr (Jacobs, Lohier, Carney), the Second Circuit affirmed a four-level enhancement under U.S.S.G. § 2K2.1(b)(6)(B) for using a firearm in connection with another felony offense. Appellant Maurice Wood, along with co-defendant Jahkeem Ryan, sold heroin to a confidential informant on four occasions. In connection with the third sale only, Wood agreed to sell the CI a Smith and Wesson AR-15 rifle and a Mossberg shotgun, along with heroin. Wood did not, however, have the firearms with him at the time of the sale, and instead gave the CI additional heroin.
In United States v. DiTomasso, Defendant was convicted of producing child pornography and transporting and distributing child pornography in the Southern District of New York. The Second Circuit (Kearse, Jacobs, and Sack) held that searches of Defendant’s emails and chats on internet service providers AOL and Omegle, used for a search warrant leading to evidence against Defendant, did not violate Defendant’s Fourth Amendment rights, and that Defendant failed to preserve on appeal his argument that an entity which reports illegal user activity to authorities was a government entity or actor, subjecting that entity’s search to the Fourth Amendment. In addition, the Circuit held that Defendant’s trial counsel was not ineffective where counsel made a strategy decision not to call Defendant’s uncle (“Marcus”)—who allegedly admitted to Defendant’s crimes—as a witness.
In a short opinion, United States v. Boustani, the Second Circuit (Cabranes, Hall, and Stanceu) clarified the Bail Reform Act standard for when a defendant requests to be released on bail and agrees to pay for private armed security guards in order to guarantee his or her return to court and the safety of the community. In this case, Boustani proposed a set of conditions for his pretrial release that included a condition of home confinement, with an accompanying commitment to pay for private security. The Circuit affirmed the district court’s denial of Defendant’s bail application.
In United States v. Sierra, the Second Circuit (Newman, Jacobs, Droney) wrote a short published decision that rejected the argument raised by several defendants that it violated the “cruel and unusual” provision of the Eighth Amendment to impose a mandatory life sentence in this case involving convictions for murder in aid of racketeering.
Circuit Denies “Pharma Bro” Martin Shkreli’s Appeal of His Conviction and District Court’s Forfeiture Order
On July 18, 2019, the Second Circuit issued a summary order in United States v. Shkreli (Jacobs, Livingston, Bianco) affirming the conviction and sentence of Martin Shkreli after his highly publicized 2017 trial in which he was convicted on two counts of securities fraud and one count of conspiracy to commit securities fraud. Shkreli was often known as the “Pharma Bro” because of his public statements about his drug company’s price increases in the pharmaceutical industry. On appeal, Shkreli challenged the district court’s “no ultimate harm” (“NUH”) jury instruction and its order requiring him to forfeit approximately $6.5 million that had been invested in his hedge funds.
Circuit Affirms Sentence Enhancement for Child Porn but Remands as to Conditions of Supervised Release
The Second Circuit (Walker, Cabranes, Sack) issued a per curiam decision in United States v. Bleau, 18-cr-1574 affirming a sentence based on a conviction for receiving and possessing child pornography, but remanding for further consideration of whether to impose a particular special condition of supervised release.
In United States v. Brennan, the Second Circuit (Kearse, Winter, Pooler) rejected an as-applied challenge to 18 U.S.C. § 4241(d), which requires a defendant who has been found incompetent to stand trial to be committed to the custody of the Attorney General to determine whether he is likely to attain competency in the future. Section 4241(d), as discussed below, is a statute meant to guarantee a constitutional right to be free from unreasonable restraint. Brennan argued that his commitment violated his right to due process because a physician had already found that his mental illness was unlikely to improve. The Court rejected this argument, noting that determining the likelihood of a defendant’s future competency is a question for the District Court to decide after a period of reasonable commitment under the statute.
The Second Circuit (Pooler, Jacobs, Wesley) issued an opinion holding that a criminal forfeiture order in an insider trading case is not limited to the amount of funds acquired through illegal activity but may extend to the appreciation of those funds. In the case United States v. Afriyie, 17-cr-2444 and 17-cr-4045, the Court upheld a conviction for securities fraud and wire fraud, and upheld an almost $2.8 million forfeiture order, but vacated and remanded a restitution order in light of the Supreme Court’s recent decision in Lagos v. United States, 138 S. Ct. 1684 (2018).
In United States v. O’Brien, the Second Circuit (Kearse, Livingston, Carney) affirmed the conviction of Michael O’Brien for importing and possessing with intent to distribute methylone and anabolic steroids. The Court held that (1) the District Court properly denied O’Brien’s suppression motion based on the fact that he was experiencing drug withdrawal symptoms at the time of his arrest, (2) the evidence at trial was sufficient to sustain O’Brien’s conviction, and (3) O’Brien failed to timely raise his defense that methylone was designated as a controlled substance through an unconstitutional delegation of Congressional legislative authority to the Attorney General and the DEA.
Drawing The Line Between “Permissible Inference” And “Impermissible Speculation” In Assessing Sufficiency Of The Evidence
In United States v. Pauling, the Second Circuit (Katzmann, Kearse, and Chin) affirmed the District Court’s post-trial order granting Pauling’s motion under Federal Rule of Criminal Procedure 29 to set aside his conviction for Conspiracy to Distribute or Possess with Intent to Distribute 100 Grams or More of Heroin. The Court concluded that the District Court had correctly found that the evidence at trial was insufficient to establish the quantity element of the offense (100 grams or more), and therefore entered judgment of conviction instead to a lesser included offense that did not have a quantity requirement (and did not carry a mandatory minimum sentence).
Circuit Rejects Request for Rehearing After Reinstating Defendant’s Original Sentence Incorporating 15-Year Mandatory Minimum Pursuant to the ACCA
On April 26, 2019, the Second Circuit issued another decision in Shabazz v. United States (Katzmann, Leval, Berman by designation) and denied Al-Malik Shabazz’s request for rehearing in connection with the Court’s January 4, 2019 decision, which reversed the district court’s decision granting Shabazz’s habeas petition to set aside his sentence imposed under the Armed Career Criminal Act (“ACCA”). Our prior coverage of that decision can be found here.
Circuit Affirms Conviction of Al Qaeda Member Who Claimed He Was Denied His Right to Self-Representation
On April 24, 2019, the Second Circuit issued a per curiam decision in United States v. Hausa (Kearse, Jacobs, and Hall) affirming the conviction of Ibrahim Hausa—a member of Al Qaeda known as Spin Ghul (the “White Rose”)—on charges related to his participation in attacks on United States and coalition forces in Afghanistan, which resulted in the deaths of two U.S. soldiers.
Court Holds Right to Speedy Trial Attaches at First Indictment or Arrest, Finds WDNY Violation for Third Time in Two Years
The Sixth Amendment guarantees that the “accused shall enjoy the right to a speedy and public trial.” But when does the clock begin to run? In United States v. Black, the Second Circuit (Pooler, Newman, and Cote sitting by designation and dissenting) held that the right to a speedy trial attaches at the first indictment or arrest and not when the defendant is accused of a particular charge, as is true with the right to counsel. On that basis, the Court affirmed the dismissal of criminal charges (relating to a murder) asserted for the first time in a superseding indictment, finding that because the charges stemmed from the same conduct as the initial indictment (which charged an armed robbery that led to the death of victims), the length of delay for speedy-trial purposes was the sixty-eight months between the initial indictment and trial, rather than the considerably shorter period between the superseding indictment and trial. As the panel repeatedly emphasized, the decision marks the third time in two years that the Circuit has found a speedy trial violation in the Western District of New York. See United States v. Tigano, 880 F.3d 603 (2d Cir. 2018) (covered here and here); United States v. Pennick, 713 F. App’x 33 (2d Cir. 2017) (summary order). .
Second Circuit Rejects Sentence Based on Government’s Dramatic Shift From its Pre-Plea Pimentel Estimate
In United States v. Walker, 17-1896-cr (Jacobs, Calabresi, and Rakoff, by designation) (April 4, 2019), the Second Circuit held that the Government breached its plea agreement with the defendant by advocating for a term of imprisonment that was substantially higher than the Government’s initial sentencing estimate in the plea agreement. In support of the increased sentence, the Government pointed only to information known to the Government at the time of the plea. The decision addresses so-called “Pimentel estimates” used in the Eastern District of New York, in which the Government provides the defendant with pre-sentencing notice of its calculation of the applicable Sentencing Guidelines range in a plea agreement, while cautioning that this estimate may change in the future. The panel held that, at least on these facts, the defendant was entitled to rely on the Government’s Pimentel estimate despite the cautionary language and, accordingly, the Government unlawfully changed its position based on information known from the outset. As a result, the case will be remanded for resentencing to a new district judge.
Last week, the Second Circuit (Cabranes, Pooler, Droney) issued a non-precedential summary order remanding a case to the district court for an evidentiary hearing on a motion to suppress. The case, United States of America v. Jacques Durand, 16-4206-cr, highlights the Court’s concerns over extending the routine booking exception to the Fifth Amendment.
Circuit Holds No Reasonable Expectation of Privacy in Rental Car for Unauthorized and Unlicensed Driver
In United States v. Lyle, 15-058-cr (April 1, 2019) (Raggi, Chin, Lohier), the Second Circuit, following a remand from the United States Supreme Court, once again held that the search of a rental car that James Lyle was driving (1) without a valid driver’s license, (2) without the permission of the rental car company, but (3) with the permission of the authorized driver, was lawful. We covered the panel’s original opinion in United States v. Lyle, 856 F.3d 191 (2d Cir. 2017) in a June 1, 2017 post. That post lays out the rather interesting facts and procedural history of this methamphetamine distribution and conspiracy case, and discusses each of the issues originally raised on appeal by Lyles and his co-defendant, Michael Van Praagh, including the panel’s original treatment of the rental car search issue. Subsequent to that blog post, the United States Supreme Court granted Lyle’s petition for a writ of certiorari challenging the search of the rental car and remanded to the Second Circuit for further consideration in light of its unanimous decision in Byrd v. United States, 584 U.S. ---, 138 S. Ct. 1518 (2018). Byrd included grand rhetoric about the Fourth Amendment, with Justice Kennedy writing that “[f]ew protections are as essential to individual liberty as the right to be free from unreasonable searches and seizures.” 138 S. Ct. at 1526. On remand, however, the Circuit once again upheld the search of the rental car.
The Second Circuit (Leval, Lynch, Droney) issued a decision reversing a mandatory life sentence, finding plain error because the district court failed to apply the categorical approach when considering whether the defendant’s prior conviction qualified for a sentencing enhancement. The case, United States of America v. Jay Kroll, 16-4310-cr, is another example of the Second Circuit applying the categorical approach, this time to 18 U.S.C. § 3559(e) rather than to the Armed Career Criminal Act. Section 3559(e) provides for mandatory life imprisonment when the defendant is a convicted of a child exploitation offense and has a prior sex conviction.
In an appeal arising in the aftermath of Raj Rajaratnam’s criminal conviction for insider trading, the Second Circuit (Lynch, Raggi, Droney) issued an opinion upholding an almost $93 million Securities and Exchange Commission (“SEC”) civil penalty that was imposed based on the same conduct that served as the basis for Rajaratnam’s conviction. The case, Securities and Exchange Commission v. Raj Rajaratnam, No. 11-5124-cv, demonstrates that an individual convicted of insider trading may be required to pay a sizable fine under Section 21A of the Securities Exchange Act, despite having already paid a significant criminal penalty. Despite some provocative comments by the district court about the defendant, the Circuit held that the imposition of the maximum possible fine under the statute was supported by law.
Circuit Grants Cooperating Witness Writ of Coram Nobis Based on Failure of Trial Counsel to Accurately Advise of Immigration Consequences
In Doe v. Unites States, the Second Circuit (Katzmann, Kearse, and Chin) reversed the district court’s denial of Doe’s petition for a writ of coram nobis. In a partially redacted opinion (we do not even know the district from which this appeal emanated), the panel took the government to task for inconsistent legal positions and recognized the right of a defendant to make plea decisions with knowledge about the immigration consequences. Therefore, granted the Court granted this “extraordinary remedy.”
On January 31, 2019, the Second Circuit issued a per curiam decision in United States v. Thrower (Wesley, Chin, and Cote, by designation) reversing a 2017 judgment from the Eastern District of New York that reduced the defendant’s sentence from 180 months to 120 months, which resulted in the defendant’s immediate release. The district court issued that order after concluding that Thrower’s prior New York convictions for robbery in the third degree and attempted robbery in the third degree do not qualify as predicate “violent felonies” under the Armed Career Criminal Act (“ACCA”). The Second Circuit concluded that those determinations were incorrect, vacated the district court’s judgment, and remanded with instructions that the district court reinstate Thrower’s original mandatory 180-month sentence.
Second Circuit Scrutinizes ‘Statement Against Interest’ Hearsay Exception for Codefendant’s Confession
In United States v. Ojudun, the Second Circuit (Katzmann, Kearse, Meyer by designation) vacated the revocation of Oluwole Ojudun’s supervised release, finding that the District Court improperly admitted the confession of Ojudun’s codefendant under the statement against interest hearsay exception.
Circuit Remands Case for Determination of Whether the Delay In Obtaining A Search Warrant Violated the Fourth Amendment
In a recent summary order in United States v. Smith, 17-2446, the Second Circuit (Katzmann, Kearse, Meyer by designation) remanded a case for additional fact-finding on a narrow issue relating to the duration of the time it took police to obtain a warrant to search the contents of a tablet computing device following the lawful warrantless seizure of the tablet.
Circuit Reverses Internet Ban Condition of Supervised Release As Substantively Unreasonable And An Excessive Limitation on Liberty, Not Reasonably Related To The Offense
In United States v. Eaglin, the Second Circuit (Cabranes, Carney, and Vilardo, by designation) considered and rejected two conditions of supervised release: a complete ban on access to the Internet and a similarly broad ban on the possession of legal adult pornography. The first portion of the Court’s ruling is part of a broader trend that recognizes the centrality of the Internet to our modern world; it is essential for participation in legal activities and a blanket prohibition on its use must be supported by a more compelling record than existed here.
The appeal in United States v. Galanis, 17-629 (Sack, Parker, Chin) resulted in a limited remand in a summary order so that the district court can determine whether there was ineffective assistance of counsel. The facts of the case are somewhat unusual. Galanis was indicted in two different and separately-charged securities fraud cases. In September 2015, Galanis was indicted in the Gerova matter, and in May 2016, he was indicted in the Wakpamni matter. He was represented by a California law firm in the Gerova matter, but that firm declined to appear in the Galanis matter (perhaps due to unpaid invoices by the client). This left Galanis unrepresented in the Genova matter.
In a decision extolling jurors’ use of “common sense” to evaluate insider trading charges, the Second Circuit affirmed the conviction of Robert Schulman in United States v. Klein (Schulman), No. 17-3355. Though the government’s case rested on only one piece of direct evidence—a statement by Schulman to a friend that he’d like to be “king for a day,” the Court (Katzmann, Kearse, Chin) rejected Schulman’s challenge to the sufficiency of evidence that he intended to pass on inside information to his investment advisor for purposes of trading. The standard of review for sufficiency of the evidence on appeal is very deferential to the government, drawing all permissible inferences in favor of guilt. Here, even one “boastful, impudent” remark has resulted in a criminal conviction.
In Shabazz v. United States, the Second Circuit (Katzmann, Leval, Berman by designation) again addressed the meaning of “violent felony” under the Armed Career Criminal Act (“ACCA”), this time under its “force clause.” As readers of this blog will recall, ACCA has been the subject of many appeals during the past year. See Jacqueline L. Bonneau & Harry Sandick, The Second Circuit Counts to Three: How One Defendant Became a Career Criminal Over the Course of an Hour (Apr. 2, 2018); Joshua Kipnees & Harry Sandick, In Split Decision, Court Again Applies Castleman To Interpret the “Force Clause” of the Armed Career Criminal Act (July 18, 2018); D. Brandon Trice & Harry Sandick, Court Regrets Allowing Successive 2255 Petition in Massey v. United States (July 16, 2018). At issue in this case was whether Shabazz’s convictions for first and second-degree robbery under Connecticut law constitute violent felonies. The Circuit held that all convictions for robbery in Connecticut inherently involve the use or threatened use of violent force, and therefore reversed the District Court’s grant of Shabazz’s habeas petition. Interestingly, the Court based its holding not on an interpretation of the elements of robbery by the Connecticut Supreme Court, but on the inherent danger of violent force associated with the act of robbery. Given the breadth of this holding, any robbery offense that is similar to the common law definition now likely qualifies as an ACCA predicate offense in the Second Circuit, perhaps cutting off future appeals arising out of convictions for robbery in other jurisdictions.
Earlier this week, we discussed the Second Circuit’s summary order in the insider trading appeal by Rajat Gupta. Gupta was convicted in SDNY as part of the string of successful prosecutions brought during the tenure of U.S. Attorney Preet Bharara. The summary order affirmed the denial of Gupta’s 2255 petition, thereby leaving in place his conviction. The Second Circuit, without explanation, has withdrawn the summary order and published the same decision as a per curiam opinion. Other than the correction of minor typos, there appear to be no changes in the Court’s ruling. A link to the published opinion is here.
In a brief summary order issued yesterday, the Second Circuit denied Rajat Gupta’s collateral attack on his insider trading conviction in Gupta v. United States, Nos. 15-2707(L), 15-2712(C). In a decision reminiscent of the recent summary order in Whitman v. United States, the panel (Kearse, Wesley, Droney) passed on the opportunity to develop the law on the “personal benefit” element of insider trading and instead denied Gupta’s habeas petition on the primary ground that he procedurally defaulted by failing to raise the issue on direct appeal.
In United States v. Mears, 18-460-cr, the Second Circuit (Sack, Livingston, Chin) issued a summary order that merits attention primarily because of the Court’s decision to remand for further proceedings based on the imposition on an unwarranted supervised release condition.
In United States v. Altareb, 17-1717, the Second Circuit (Sack, Parker, Chin) issued a summary order affirming a conviction for, inter alia, operating an unlicensed money transmitting business and bulk cash smuggling.
In United States v. Lutchman, No. 17-291 (2d Cir. Dec. 6, 2018) (Newman, Jacobs, Pooler), the Second Circuit exercised appellate jurisdiction over defendant’s challenge to his sentence, even though his plea agreement contained an appellate waiver. The Court concluded that the defendant’s appellate waiver in his plea agreement was not supported by consideration, and thus did not bar defendant’s challenge to his sentence on appeal. The Court addressed defendant’s arguments on the merits, affirming defendant’s sentence.
The Second Circuit has once again confronted the issue of what is a “controlled substance” for purposes of sentencing enhancements under the Guidelines. Earlier this year, the Second Circuit held that the phrase “controlled substance” in U.S.S.G. § 2K2.1(a)(2)—a section that enhances the guidelines sentence for a felon in possession of a firearm previously convicted of two felonies for either a crime of violence or a “controlled substance offense”—refers “exclusively to those substances in the [federal Controlled Substances Act (“CSA”)].” United States v. Townsend, 897 F.3d 66, 75(2d Cir. 2018). This meant that not all state law drug offenses were suitable to be used as sentencing enhancements. Now, in United States v. Guerrero, the Circuit held that the phrase “controlled substance offense” construed in Townsend has the same meaning as the term “felony drug trafficking offense” found in Section 2L1.2(b)(1)(B) of the 2014 Sentencing Guidelines, which is used for illegal reentry offenses. United States v. Guerrero, No. 17-cv-851 (2d Cir. Dec. 10, 2018).
In United States v. Walters, 17-2373 (Dec. 4, 2018), the Second Circuit (Jacobs, Chin, Kuntz (by designation)) affirmed the conviction of professional gambler William T. Walters for securities fraud and related claims arising out of insider trading. On appeal, Walters argued that the indictment should be dismissed in light of repeated leaks of confidential grand jury information made by the FBI to reporters from The Wall Street Journal and The New York Times in violation of Federal Rule of Criminal Procedure 6(e) and the Due Process Clause of the Fifth Amendment.
- Page 1 of 6