Second Circuit Criminal Law Blog

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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.

Court Dispenses With Fraud Defense Based on Gumball Victims’ Disclaimers

The Chiclets and Runts vending machine at your local car repair shop last decade may have been one piece of a fraudulent enterprise that ensnarled roughly 7,000 victims.  As CEO of Vendstar, Defendant Edward (“Ned”) Weaver directed a scheme that enticed victims to make substantial up-front investments in quarter-slot candy dispensers with false promises of significant returns—even hundreds of a dollars a day.  Despite assurances that this “home-based vending business” had “little risk,” many customers lost their entire investment.[1]

In United States v. Weaver, 16-3861 (June 21, 2017) (Newman, Cabranes, Lynch), the Court held in a per curiam order that contractual disclaimers signed by victims of Weaver’s fraud did not render the fraudulent statements “immaterial” as a matter of law and negate criminal liability.

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Pay the Piper: Restitution Payment to Victims Does Not Offset Mandatory Forfeiture to Government

In United States v. Bodouva, 16-3937 (March 22, 2017) (Katzmann, C.J., Pooler and Lynch, J.), the Court held in a per curiam order that a defendant convicted of embezzlement must forfeit the full amount of her illicit gains to the government even after paying restitution to victims.  The ostensibly “duplicative” financial penalty entered against the defendant was not only permissible, but in fact required by statute.  The district court thus appropriately ruled at sentencing that it lacked discretion to modify the forfeiture amount.  With this decision, the Second Circuit joined several other circuits in holding that restitution and forfeiture serve distinct purposes and, absent clear statutory authority to the contrary, may not offset each other.

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“Intent to Harm” Not Required for Criminal Conviction Pursuant to Investment Advisers Act of 1940

In United States v. Tagliaferri, 15-536 (May 4, 2016) (Leval, Pooler, Wesley), the Court issued a per curiam order affirming Defendant’s conviction for violations of the Investment Advisors Act of 1940, 15 U.S.C. § 80b-6 (the “1940 Act”), entered by the United States District Court for the Southern District of New York (Abrams, J.).  In the underlying appeal, the Defendant raised several challenges to his conviction by a jury for violations of the 1940 Act, as well as securities fraud, wire fraud, and violations of the Travel Act.

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Above-Guidelines Sentences for Prostitution Ring Upheld, Including Where Portions of Rule 11 Transcript Missing

In United States v. Jiamez-Dolores, et al., 14-1840(L) (August 3, 2016) (Hall, Lynch, Chin), the Court in a per curiam order affirmed above-guidelines sentences given to two defendants who each pleaded guilty to one count of conspiracy for their participation in a sex-trafficking enterprise.  Both defendants appealed the reasonableness of their sentences.  One defendant also challenged his sentence based on an incomplete transcript from his plea and sentencing hearing.

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Can you find me now? “Exigent circumstances” permit warrantless “pings” of cell phone GPS location

In United States v. Caraballo, 12-3839-cr (L) (August 1, 2016) (Calabresi, Lynch, Lohier), the Court held that “exigent circumstances”—here, suspicion of involvement in a recent murder and potential danger to law enforcement—justified a warrantless “pinging” of defendant’s cell phone to determine his location.  The Court accordingly affirmed the district court’s denial of defendant’s motion to suppress statements he made after police located him through a series of “pings” executed by his cell phone carrier.

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Court Clarifies Limitations of Fifth Amendment “Foregone Conclusion” Doctrine in Tax Enforcement Action

In United States of America, 26 U.S.C. Sections 7402(b) and 7604(a): Enforcement of Internal Revenue Service Summons v. Greenfield, 15-543 (August 1, 2016) (Calabresi, Lynch, Lohier), the Court addressed the “foregone conclusion” exception to the Fifth Amendment privilege in the context of an action to enforce an IRS summons for various documents relating to an audit for tax evasion.  The district court (Judge Hellerstein, SDNY) ordered the enforcement of the summons, and denied Greenfield’s motion to quash on Fifth Amendment self-incrimination grounds.  The Court vacated the enforcement order and remanded for further proceedings. 

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New or Changed Circumstances Not Necessary for Modifying Conditions of Supervised Release

In United States v. Parisi, 15-963 (May 3, 2016) (RAK, RDS, RJL), the Court issued a per curiam order affirming changes to the Defendant’s conditions of supervised release ordered by the United States District Court for the Northern District of New York (Lawrence E. Kahn, J.). Rejecting Defendant’s principal challenge, the Court held that a district court may modify conditions of supervised release even in the absence of new or changed circumstances specific to the defendant. The Court also rejected Defendant’s claims that the new conditions did not satisfy relevant statutory requirements and were imposed without adequate process. This short decision is a reminder of the broad discretion of the district court, guided by probation officers, to modify and expand conditions of supervised release or probation, so long as the conditions are “reasonably related” to the offense, the offender, or the goals of post-release supervision (protection of the public, deterrence and rehabilitation).

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