In a case arising out of the CityTime scandal, the Second Circuit issued a thoughtful opinion addressing the operation of restitution and asset forfeiture on victims of white-collar crime. The decision, Federal Insurance Company v. United States of America, Nos. 16-2967-op and 16-3402-cr, emphasizes that though restitution and forfeiture are both means for victims to be made whole, they are not subject to the same analysis. Ultimately, the Court (Parker, Lynch, Carney) affirmed the decision denying restitution, but remanded for additional proceedings on forfeiture. The decision is worth a careful read for those representing victims in white-collar criminal matters, and also serves as a road map for how district court judges might approach these issues in the future.
Sneaking Isn’t Laundering: Second Circuit Reverses Money Laundering Conviction for Insufficient Evidence of Intent to Disguise
In United States v. Rodriguez, a panel of the Second Circuit (Judges Katzmann, Walker, and Bolden (D. Conn., sitting by designation)) reversed the conviction of a defendant for money laundering. It concluded that the Government had established only that the defendant, Angelo Rodriguez, had attempted to deliver $300,000 in cash proceeds from sales of cocaine to what turned out to be an undercover agent—but not that the purpose of the transaction was to “to conceal or disguise the nature of . . . the proceeds of specified unlawful activity,” as the money-laundering statute requires. See 18 U.S.C. § 1956(a)(1)(B)(i). Although the panel acknowledged that the Government had presented evidence that the attempted delivery of cash was covert, it held that the circumstances of the transaction were “equally consistent with the purpose of paying off a drug supplier or purchasing additional drugs, which aims do not entail the intent to conceal required by” the money-laundering statute. In other words, the panel made clear that the mere covert delivery of money in connection with an illicit scheme does not amount to money laundering: the Government must prove that the transaction was specifically intended to disguise the use of the funds for an unlawful purpose.
Second Circuit Remands Ineffective Assistance Claim for Lawyer’s Failure to Apprise Naturalized U.S. Citizen of Denaturalization Risk Before Guilty Plea
In Rodriguez v. United States, the Second Circuit remanded the case to the district court to hear evidence on a defendant’s application to vacate her guilty plea, on the grounds that she would not have entered into the plea if her counsel had properly advised her as to its immigration consequences. The Circuit, in a summary order written by Judges Walker, Lynch, and Chin, concluded that there was a reasonable probability that, had she been properly advised, she may have chosen not to plead guilty and thus may have avoided the immigration consequences that later ensued. Accordingly, it remanded the case to the district court to develop an evidentiary record and make a finding on those issues. The order requiring a hearing on a defendant’s right to extraordinary relief represents a reminder to judges and prosecutors that the immigration consequences of a guilty plea are no less central to the plea allocution than the contemplated term of imprisonment. The decision follows the Supreme Court’s decision last term in Lee v. United States, 137 S. Ct. 1958, 1967 (2017). In Lee, the Court held that a defendant who would not have pleaded guilty but for counsel’s errors concerning the deportation consequences of his or her plea has demonstrated ineffective assistance.
Missing Texts, Unfair Trial: Second Circuit Remands Case for Possible Brady Violations and Sentencing Irregularities
In United States v. Djibo, the Second Circuit vacated and remanded a judgment of conviction entered in the Eastern District of New York (Johnson, J.) following the defendant’s trial on charges arising from an international heroin-smuggling conspiracy. In a summary order by Judges Sack, Hall, and Droney, the Circuit concluded that errors had affected both the trial and the sentencing, and reassigned the case to a new judge on remand.
Court Declines to Allow Defendants in Fraud Scheme to Utilize 28 U.S.C. § 2255 or Writ of Coram Nobis to Challenge Order of Restitution
In United States v. Rutigliano, No. 16-3754 et al., the Second Circuit (Jacobs, Raggi, Droney) refused to endorse the reduction of a restitution order against defendants who had conspired to submit fraudulent disability pension applications, either via a motion under 28 U.S.C. § 2255, or via a petition for a writ of coram nobis pursuant to 28 U.S.C. § 1651. Although the panel declined to hold that such vehicles could never be used by criminal defendants to collaterally attack an order of restitution, the Court made clear that the facts at hand rendered both § 2255 and § 1651 relief unavailable to these defendants, and vacated the district court’s order reducing defendants’ restitution obligations.
Promises, Promises: Second Circuit Reverses District Court’s Ruling That Suppressed Post-Arrest Statements Based On Allegedly Coercive Promises By Law Enforcement
In United States v. Haak, 16-3876-cr, the Second Circuit (Raggi, Hall, Carney) reversed a suppression order, finding that local law enforcement authorities did not falsely promise the defendant immunity from prosecution and his statements therefore were not coerced in violation of the Fifth Amendment.
The Second Circuit Counts to Three: How One Defendant Became a Career Criminal Over the Course of an Hour
In United States v. Bordeaux, 17-486-cr (Cabranes, Raggi, Vilardo), the Second Circuit held that the defendant’s three prior Connecticut state convictions for first-degree robbery—all of which took place during a single night—satisfied the requirements for conviction under the Armed Career Criminal Act (ACCA), 18 U.S.C. § 924(e). The opinion confirms that a conviction under Connecticut’s first-degree robbery statute constitutes a “violent felony” within the meaning of the ACCA and continues the majority approach to interpreting the “different occasions” requirement of the Act—which places the greatest emphasis on whether a defendant had time to contemplate his actions between the incidents giving rise to his prior convictions. Much is at stake for the defendant: a conviction under Section 924(e) carries with it a mandatory consecutive 15-year term of imprisonment.
The Price of a Drug Conspiracy Conviction: Second Circuit Remands $5 Million Forfeiture Order in Light of Recent Supreme Court Precedent
In United States v. Papas (17-cr-1591-cr), the Second Circuit remanded by summary order a $5 million forfeiture order entered in the Southern District of New York (Daniels, J.) after the defendant pleaded guilty to conspiracy to distribute marijuana. Judges Cabranes, Carney, and Caproni (sitting by designation) were on the panel.
In United States v. Ballard, 17-427-cr, the Second Circuit reversed a sex trafficking conviction by summary order (JAC, RR, Villardo, J. by designation) due to improper argument by the government during rebuttal summation.
The Court rejected the defendant’s arguments that some of the rhetoric in the government’s main summation amounted to error. Defense counsel did not object to these comments, which included calling the defendant a “dead beat,” a “pimp,” and similar to “Genghis Khan or some other Wall Street person.”
In United States v. Dove, 14-1150-cr, the Second Circuit (Walker, Pooler, Chin) upheld a drug conspiracy conviction against claims that the government improperly shifted its case away from the broader conspiracy charge in the indictment. The defendant alleged that this amounted to a constructive amendment or a prejudicial variance, in violation of the Fifth Amendment Grand Jury Clause. The 2-1 decision, with Judge Chin dissenting, raises thorny questions about the evidence necessary to prove a defendant’s awareness of his role in a larger conspiracy and the government’s ability to thwart a lack-of-awareness defense through its selection of evidence at trial. Although the Court affirmed, the extended discussion and the dissent may be useful to future litigants who wish to invoke these defenses.
Second Circuit Holds Government Can Establish Venue By Directing Cooperator to Place Calls to Co-Conspirators From That District
In United States v. Tank Yuk, et al., 15-131 (March 15, 2018), the Second Circuit (Chin (dissenting), Carney, Forrest, sitting by designation) affirmed the convictions of three defendants in a drug trafficking conspiracy who were prosecuted and convicted by a jury in the U.S. District Court for the Southern District of New York, despite the fact that the bulk of defendants’ criminal activities took place in the U.S. Virgin Islands and Florida. The central issue on appeal was whether venue was proper in the S.D.N.Y.; the majority held that it was, but Judge Chin dissented, concluding that it was not foreseeable to the defendants that an act in furtherance of the conspiracy would occur in the S.D.N.Y.
In United States v. Smith, No. 15-3313-cr, the Second Circuit (Winter, Cabranes, Restani, sitting by designation) held that New York second-degree robbery is a “crime of violence” under § 4B1.2(a) of the 2014 United States Sentencing Guidelines. As the panel acknowledged, Smith follows directly from United States v. Jones (2d Cir. Oct. 5, 2017), covered here and here, which held that New York first-degree robbery is a crime of violence under the same Guidelines provision because the official commentary lists robbery as a crime of violence, and New York generically defines first-degree robbery to include as an element the taking of property from another person, or person’s immediate presence, by force or intimidation. The panel reasoned that the rationale of Jones was “directly applicable” because New York second-degree robbery has the same element involving the use of force or intimidation.
Second Circuit Reminds Courts They Must Advise Defendants of the Immigration Consequences of Guilty Pleas
In United States v. Gonzales, 16-4318 (March 13, 2018), the Second Circuit (Sack, Parker, Carney) in a per curiam order vacated the conviction of a defendant who had pled guilty without being informed that he was likely to be deported at the end of his sentence. On June 23, 2015, Wilfredo Gonzales appeared before the Western District of New York (Geraci, C.J.) and pled guilty pursuant to a plea agreement to one count of conspiracy to manufacture, possess with intent to distribute, and distribute cocaine, and one count of possessing a firearm in furtherance of a drug trafficking offense. During the plea colloquy, the District Court failed to inform Gonzales, who was a lawful permanent resident, that he could be removed from the United States as a result of his conviction.
In United States v. Holcombe, 16-1429-cr, the Second Circuit (Jacobs, Leval, Lohier) resolved three open issues involving a conviction for failing to register pursuant to the Sex Offender Registration and Notification Act (“SORNA”), 18 U.S.C. § 2250(a). First, the Court held that the interstate travel offense at issue “began” in the state the defendant left, New York, and thus venue in SDNY was proper. Second, the Court held that any potential vagueness in a 30-day window for updating registration did not render defendant’s conviction here void for vagueness given the passage of at least 18 months. Last, the Court rejected defendant’s claim that the SORNA registration requirement violated his constitutional right to travel.
In a recent nonprecedential summary order, the Second Circuit (Winter, Lynch, Chin) vacated and remanded a sentence due to a condition of supervised release that prohibited the defendant from having unsupervised contact with any minor, including his nine-year old son. The summary order in United States v. Donohue, 17-943-cr, reflects the Circuit’s continuing concern that the conditions of supervised release be appropriate given the defendant’s conviction and personal circumstances.
In United States v. Carosella, 17-896-cr, the Second Circuit clarified an open issue relating to Amendment 782 to the Sentencing Guidelines. Amendment 782 is sometimes called the “drugs minus two” amendment because it reduced the base offense level for drug offenses by two levels. Amendment 782 was made retroactive through Amendment 788, and allows for an offender to be resentenced when its application leads to a reduced Guidelines range. Amendment 782 has led to the reduction of more than 31,000 sentences—but more than 48,000 defendants have sought such relief, meaning that more than one-third of those defendants were turned away empty-handed. One defendant who did not receive such relief in the district court was Anthony Carosella, and in a per curiam opinion (Walker, Lynch, Chin), the Second Circuit affirmed this decision.
In a short opinion in United States v. Ohle, 16-601-cr, the Second Circuit (Leval, Calabresi, Cabranes) resolved two open questions about the application of Federal Rule of Appellate Procedure 4, both in the context of a proceeding brought under Title 21, United States Code, Section 853(n). Section 853(n) is the provision of forfeiture law that can be invoked by a third party who claims to have a superior interest in assets that the government is seeking to forfeit. The Circuit held that although 853(n) proceedings arise in the aftermath of a criminal conviction, these ancillary proceedings are civil in nature. The Circuit also held that when the district court issues a short order resolving a motion and promises that a more detailed opinion will follow, plaintiffs may not wait for the more detailed opinion; the time to appeal begins to run upon the issuance of the initial order.
In United States v. Gomez, 16-181-cr (Parker, Wesley, and Droney), the Second Circuit found that the defendant’s Fourth Amendment rights were violated during a five-minute traffic stop because the police officers extended the stop for reasons unrelated to the defendant’s traffic violations. However, the Court nonetheless affirmed the conviction, ruling that the good-faith exception applied given that the officers acted legally under the Second Circuit’s prior precedent.
On February 9, 2018, the Second Circuit issued a summary order vacating a sentence imposed for a violation of supervised release. United States v. Kalaba, 17-328, involved a defendant who had been convicted for credit card theft and who was sentenced to 70 months’ imprisonment. After his time in prison concluded, he began a three-year term of supervised release. Before his supervised release term ended, Kalaba was arrested and indicted with multiple narcotics offenses, for which he was sentenced to 84 months’ imprisonment, well below the 240 month sentence recommended by the U.S. Probation Office.
In a 12-page summary order issued on February 9, 2018, the Second Circuit affirmed an order of restitution in United States v. Quatrella, 17-1786. The order is interesting primarily because it addresses the question of when a victim of an offense is not really a victim but rather a fellow participant in the criminal scheme. The rule in the Circuit is clear: no order of restitution should be granted that has the effect of treating a coconspirator as a victim. At the same time, a victim may not be denied restitution simply because the victim had greedy or dishonest motives, so long as the victim’s intentions were not in pari materia with the defendant’s.
In a short summary order issued on February 9, 2018, in the case of United States v. Muir, 17-150, the Second Circuit affirmed a sentence and reminded everyone that nothing about Apprendi, Booker and their progeny changes the rule that existed even prior to the Sentencing Reform Act: uncharged and acquitted conduct can be relied upon by the district court at sentencing. This is not a violation of either the Due Process Clause or the Double Jeopardy Clause of the Fifth Amendment, nor does it violate the Sixth Amendment’s guarantee of the right to trial by jury. So long as the court finds that the relevant facts are proved by a preponderance of the evidence and do not increase either the statutory minimum or maximum sentence, there is no violation of law.
In United States v. Zukerman, No. 17-948 (2d Cir. Feb. 6, 2018) (ALK, RAK, RSP) (summary order), the appellant, Morris Zuckerman, challenged the substantive and procedural reasonableness of his sentence, which was imposed following his pleading guilty for tax evasion and obstruction of the IRS, see 26 U.S.C. §§ 7201, 7212(a). While Zukerman’s plea agreement contained a stipulated fine range of $25,000 to $250,000, the district court (Torres, J.) imposed a fine of $10 million. Given that tax fraud defendants are typically required to resolve their civil tax liabilities in parallel proceedings, it is unusual for such a large fine to be imposed in this type of case. After acknowledging that fine calculations are typically committed to the discretion of the sentencing judge, the Second Circuit held that Judge Torres’ comments at the sentencing hearing and in the written statement of reasons did not provide the panel with a sufficient basis to determine how she reached the $10 million fine amount. Rather than try to guess what considerations went into this calculation, the Court ordered a so-called “Jacobson remand”—wherein it remands “partial jurisdiction to the district court to supplement the record on a discrete factual or legal issue while retaining jurisdiction over the original appeal”—and directed the district court to “elaborate on its rationale for imposing a fine greater than those typically imposed in tax prosecutions.”
Circuit Says “I’ll Drink To That,” Grants Defendant’s Appeal Challenging Alcohol-Ban Condition of Supervised Release
Update: The Second Circuit’s decision in United States v. Betts (No 17-231), which was initially released as a non-precedential summary order on February 5, 2018, was re-released as a published opinion on March 28, 2018. A copy of the opinion can be found here. This upgrade to a precedential opinion is consistent with the Circuit’s recent focus on reasonableness review of the conditions of supervised release. For more on that subject, see our recent post on United States v. Donahue (17-943-cr) Second Circuit Continues To Give A Close Look To Supervised Release Conditions. We also welcome the Court’s decision to make this ruling one with precedential impact rather than a summary order. Even when the legal standard is neither disputed nor newly pronounced, the development of the law requires the application of the standard to different sets of facts, so that attorneys may argue by analogy. Given the relative infrequency with which sentences are reversed for being unreasonable, more guidance from the Circuit is always appreciated.
Joseph Tigano’s Ticking Clock: Circuit Reverses Conviction of Defendant Forced to Wait Seven Years for Trial
On November 15, 2017, the Second Circuit reversed by summary order the conviction of Joseph Tigano III on drug charges, determining that he had been deprived of his Sixth Amendment right to a speedy trial and indicating that an opinion would follow. This week, the court issued its opinion, detailing the “exceptional facts” that had culminated in a nearly seven-year lapse between Mr. Tigano’s arrest and his trial, despite his repeated invocation of his right to a speedy trial. Indeed, the Court stated that the pretrial detention here “appears to be the longest ever experienced by a defendant in a speedy trial case in the Second Circuit.” The Court held that that length of time, combined with other relevant factors, compelled the conclusion that his Sixth Amendment rights had been violated. Judge Pooler authored the opinion, and was joined by Judge Winter and Judge Walker.
On January 9, 2018, the Second Circuit (Kearse, Cabranes, Wesley) rejected a request by ex-AOL Inc. employee Jason Smathers to junk the restitution component of his sentence, which requires him to recompense the online service provider for the losses it incurred after Smathers sold 92 million AOL screen names to spammers in the early 2000s—one of the earliest large-scale data security breaches of the Internet age. Smathers argued that his restitution award should be offset by damages later obtained by AOL in litigation against Smathers’s co-conspirators.
In a summary order on January 2, 2018 in United States v. Reyes, the Court (Winter, Lynch, Droney) vacated and remanded a life sentence as procedurally unreasonable on the ground that the district court failed to properly apply a reduction for acceptance of responsibility under U.S.S.G. § 3E1.1. The decision reiterates that a three-level reduction is mandatory under certain circumstances if the district court has already imposed a two-level reduction, and that the government must formally move for a three-level reduction in order to bind the court’s hands. The third point of acceptance of responsibility under the Guidelines is not a matter of grace or kindness by the district court. When a defendant is entitled to receive the third point, the district court is obliged to award it.
In Ganek v. Leibowitz, No. 16-1463, 2017 U.S. App. LEXIS 20226 (2d Cir. Oct. 17, 2017), the U.S. Court of Appeals for the Second Circuit recently reversed a district court’s determination that federal prosecutors and agents were not entitled to qualified immunity from plaintiffs’ Bivens claims for money damages for violations of the Fourth and Fifth Amendments in procuring and executing a search warrant.
Second Circuit Remands for New Trial Based on District Court’s Improper Exclusion of Advice-of-Counsel Testimony
In United States v. Scully, 16-3073-cr (Pooler, Lynch, Cogan), the Second Circuit vacated the defendant’s conviction for various offenses, including mail and wire fraud, conspiracy to defraud the United States, the sale of misbranded and unapproved drugs, and the unlicensed wholesale distribution of prescription drugs, finding that the District Court erred in excluding evidence related to his advice-of-counsel defense. The opinion provides a helpful overview of the requirements of Rule 403 balancing and the nature of the burden in establishing an advice-of-counsel defense.
In Rare Ruling Vacating Sentence as Both Procedurally and Substantively Unreasonable, Second Circuit Expounds on the Role of Mercy in Sentencing
In United States v. Singh, 16-1111-cr (Kearse, Hall, Chin), the Second Circuit vacated the defendant’s 60-month prison sentence—which was nearly three times the top of his Guidelines range—for illegally reentering the United States after the commission of an aggravated felony on the grounds that it was both procedurally and substantively unreasonable. This opinion stands out as a rare ruling striking down a sentence as substantively unreasonable. It is also notable for the Court’s musings on the role of mercy in the sentencing process.
On Tuesday in Washington v. Griffin, 15-3831-pr (Katzmann, Kearse, Livingston), the Second Circuit affirmed the denial of a petition for a writ of habeas corpus on a Confrontation Clause challenge. At issue was whether it was proper for the New York trial court to admit DNA profile evidence without affording the petitioner, Kenneth Washington, the opportunity to cross-examine the analysts who tested his DNA. This case illustrates the special challenges faced by habeas petitioners where, as in the Confrontation Clause context, Supreme Court precedent is developing and fractured. It also reflects the Circuit’s uncertainty about the state of the law in light of a series of Supreme Court precedents. This line of authority began in 2004 with Crawford v. Washington, 541 U.S. 36 (2004), which stated a definitive rule that out-of-court statements that were “testimonial” could only be offered so long as the witness was available for cross-examination, and has continued through Williams v. Illinois, 132 S. Ct. 2221 (2012), which is far more ambiguous due to the absence of a majority opinion.
Circuit Reverses Conviction & Dismisses Indictment in Case Where Defendant Waited Seven Years for Trial
In United States v. Tigano, No. 15-3073 (Winter, Walker, Pooler), the Second Circuit issued a short order reversing the conviction of Joseph Tigano, III and dismissing the indictment with prejudice. The Court noted that a full opinion in the case would be forthcoming. Gary Stein, a former chief appellate attorney in the criminal division of the U.S. Attorney’s Office for the Southern District of New York, and now in private practice, represented Tigano pursuant to a court appointment.
The Second Circuit has denied the government’s request for rehearing en banc in United States v. Allen, et al. (16-cr-98).
The Klansman and His Death Ray: Second Circuit Affirms Conviction and Sentence in Bizarre Domestic Terrorism Plot
In United States v. Crawford, 16-4261-cr (Kearse, Cabranes, Wesley), the Second Circuit affirmed via summary order the terrorism-related conviction and sentence of a Klansman in upstate New York. This case represented the first conviction under the 2004 law barring the acquisition and use of so-called “dirty bombs” and provided a rare opportunity for the Circuit to interpret several terrorism statutes. It is most notable, however, for its bizarre fact pattern—involving Ku Klux Klan business cards, a modified x-ray machine, and a plot to kill President Barack Obama and an unknown number of Muslims. In August 2015, Glendon Scott Crawford—a Navy veteran and an avowed member of the Ku Klux Klan—was convicted of several counts of domestic terrorism and was subsequently sentenced to 30 years’ imprisonment for his crimes.
Federal Agent’s Misrepresentation in LG Search Warrant Affidavit Insufficient to Clear Qualified Immunity Hurdle
In Ganek v. Leibowitz, No. 16-1463 (2d Cir. Oct. 17, 2017) (Raggi, Chin, Carney), the Second Circuit reversed and remanded a district court’s determination that federal law enforcement authorities were not entitled to qualified immunity from plaintiff’s Bivens claims for money damages for violations of the Fourth and Fifth Amendment in procuring and executing a search warrant.
Circuit Amends Decision Affirming Sentence Two Panel Members Deemed “Absurd,” Remands for Resentencing
On October 5, 2017 the Circuit published an amended opinion in United States v. Jones, No. 15-1518 (Walker, Calabresi, Hall), which supplanted a decision issued on September 11 that we covered in an earlier blog post. The amended decision differs from its forbearer in one key respect. In the initial decision, Judge Calabresi authored a concurring opinion (joined in by Judge Hall) that chided the district court’s sentence, as affirmed by the Circuit, as “little short of absurd” given the defendant’s borderline IQ, old crimes, and the “timing quirks” that rendered the sentence “very, very high . . . in contrast with almost every similarly situated defendant.” Now, in this amended opinion, the panel affirmed but still remanded “for further consideration as may be just in light of the circumstances.”
Circuit Remands Restitution Order for Further Consideration of Indigent Defendant’s Right to Counsel and Application for Expert Services
In United States v. Torriero, the Second Circuit (Chin, Droney, Restani by designation) vacated by summary order a $765,561 restitution order relating to costs incurred by the EPA in cleaning up a property that the defendant had used as an illegal landfill. Although not the panel’s primary focus, the order also addresses a district court’s role in approving or denying an indigent defendant’s request for expert services—an issue currently being examined as part of a broader review of the defense funding under the Criminal Justice Act (“CJA”) by an ad hoc committee chaired by Judge Kathleen Cardone of the U.S. District Court for the Western District of Texas.
The Second Circuit issued a published opinion on September 11, 2017 in United States v. Pabon, No. 16-1754 (Cabranes, Livingston, Pauley), a case arising from an interesting set of facts involving the warrantless arrest of an individual suspected of body-packing narcotics who behaved erratically while in police custody. On appeal, the defendant argued that evidence he had been body-packing narcotics should have been suppressed because it was obtained only after probable cause to detain him had dissipated. In the alternative, the defendant argued that suppression was warranted because police allegedly failed obtain a probable cause determination from a neutral magistrate in a timely fashion (typically 48 hours).
Second Circuit Finds Death Extinguishes Trial Convictions and Related Restitution Order – But Tax Offenses and Bail Forfeiture Survive
In 2010, a federal jury in the Eastern District of New York convicted body-armor tycoon David H. Brooks of multiple counts of conspiracy, insider trading, fraud, and obstruction of justice for his role in a $200 million scheme to enrich himself from company coffers. Brooks was the founder and former chief executive of DHB Industries, the leading supplier of bulletproof vests to police departments and the U.S. military. Brooks later pleaded guilty to associated charges of conspiracy to defraud the IRS and filing false income tax returns that had been severed from the rest of the case. While he appealed the result of his jury trial, he did not appeal the tax fraud convictions (pursuant to the terms of a plea agreement). Brooks died in prison while his appeal was pending, forcing the Second Circuit to revisit an obscure area of law to decide what aspects of his convictions, if anything, survived his death. Ultimately, Brooks’s death in prison led to the abatement of his trial convictions, and with that abatement, the erasure of significant restitution obligations that Brooks otherwise would have owed.
Skelos Vacated: For The Second Time This Year, Conviction Of Leading New York State Legislator Is Undone Due To McDonnell
The Second Circuit (Winter, Raggi, Hellerstein by designation) today vacated by summary order the convictions of former New York State Senate Majority Leader Dean Skelos and his son Adam Skelos. Dean and Adam Skelos were convicted of Hobbs Act conspiracy and substantive offenses, honest services wire fraud conspiracy, and federal program bribery, after a jury trial in which the government presented evidence that the elder Skelos had taken official actions to benefit certain companies in exchange for payments to his son. Much like the conviction of his fellow senior state legislator, Assembly Speaker Sheldon Silver, the conviction was reversed in light of the Supreme Court’s decision in McDonnell v. United States, 136 S. Ct. 2355 (2016), which narrowed the definition of an “official act.” As the Court rejected the defense contention that insufficient evidence supported the convictions, both Skelos and his son will be retried by the U.S. Attorney’s Office for the Southern District of New York. Like the Silver reversal, this ruling reflects the ways in which the McDonnell decision has complicated that office’s investigation and prosecution of public corruption in New York state government.
On September 18, 2017, in United States v. Caltabiano, No. 16-1275-cr, the Second Circuit (Walker, Lynch, and Lohier, Js.) clarified the jurisdictional scope of a Notice of Appeal. The Court confirmed its authority to review a criminal appeal notwithstanding errors on a form notice as to the scope of the defendant’s claims. On the merits, the Court affirmed the conviction and sentence of John W. Caltabiano, Jr.
Circuit Denies Protection to Hallway Conversation Between Co-Defendants, Highlighting Limits of JDAs
A Joint-Defense Agreement (JDA) can be an extremely valuable tool in coordinating defenses against pending or impending prosecution, as it formalizes the creation of a zone of privilege in which co-defendants and their counsel can exchange confidential information without fear of compelled disclosure. But as the Circuit’s recent decision in United States v. Krug, No. 16-4136 (Leval, Pooler, Hall) (Aug. 18, 2017) exemplifies, a JDA protects communications between co-defendants only insofar as they further the provision of legal advice. A JDA cannot transform the joint-defense group’s communications relating to business, personal, or other non-legal issues into privileged discussions. As happened here, such non-privileged statements can become part of the government’s case at trial.
On September 11, 2017, the Second Circuit (Parker, Carney, Stanceu) reversed by summary order the sentence of the defendant in United States v. Soborski (16-cr-3369). The panel remanded the case to the U.S. District Court for the Southern District of New York (Swain, J.) for resentencing so that the district court could consider whether Soborski should receive a minor-role reduction under an amendment to the Sentencing Guidelines.
Second Circuit Affirms Sentence Based on Correct Application of Career Offender Guideline, Yet Majority of Panel Agrees the Result is “Unjust” and “Close to Absurd”
On Monday, September 11, the Second Circuit issued a published opinion in United States v. Jones, No. 15-1518 (Walker, Calabresi, Hall), a case with a complicated procedural history in which the Court affirmed a defendant’s sentence as a career offender under the now-removed residual clause of the Career Offender Sentencing Guideline. The decision was accompanied by a concurrence authored by Judge Calabresi and joined by Judge Hall, which upheld the sentence while calling the result “unjust” and “close to absurd.” We have reported on this case before, when the Circuit reversed and remanded the sentence; subsequent to our earlier blog post the case was re-opened for additional argument, and this week’s decision now affirms.
Golb v. Attorney General, No. 16-0452-pr (Jacobs, Leval, Raggi), arises out of unusual facts—forged emails by a proponent of one side of an academic dispute—and reaches an unusual result. On habeas review, the Second Circuit found that it only owed partial AEDPA deference, and overturned an number of convictions after finding a New York statute unconstitutionally overbroad. In this case, an advocate of one side of the unresolved academic debate about the authorship of the Dead Sea Scrolls went too far and engaged in illegal acts that brought about his own criminal conviction. On its face, the decision applies important aspects of New York and federal constitutional law. However, in a larger sense, the law most relevant to the decision may be Sayre’s Third Law of Politics, which provides that academic politics are the most vicious form of politics because the stakes are so low.
United States v. Gill, No. 15-4444-cr(L) (Livingston, Chin, Carney), a decision in a drug trafficking and murder conspiracy appeal, offers several interesting rulings on evidentiary and trial practice issues that arose out of a 4-week trial. As we often see, these decisions may originate in the world of violence crime and narcotics, but the legal rules established in these cases will also apply in the world of business crimes.
In United States v. Genao, No. 16-924 (Katzmann, Lynch, Chin), the Second Circuit examined the application of the categorical approach to a prior burglary conviction that indisputably involved threats of physical harm but whose minimal elements arguably did not meet the Guidelines’ definition of a “crime of violence.” The Second Circuit reaffirmed that the categorical approach requires evaluation of the elements of conviction, not the facts of conviction, making it reversible error for the district judge to have “short circuited” the analysis by starting with the facts. But the Second Circuit emphasized that in an advisory-Guidelines world, the district court is free to take those facts of conviction into account in exercising its discretion to set the final sentence. So long as the sentencing correctly applies and calculates the appropriate Guidelines sentence, the court is then liberated—indeed required—to pick the sentence that it believe best fits the crime.
A divided Second Circuit panel (Katzmann, Pooler (dissenting), Chin) on Wednesday upheld the insider trading conviction of former SAC Capital portfolio manager Mathew Martoma. Confronting its precedent in United States v. Newman, 773 F.3d 438 (2d Cir. 2014), for the first time since the Supreme Court struck down part of the Newman tippee liability standard this past December, see Salman v. United States, 137 S. Ct. 420 (2016), the Court ruled that the “meaningfully close personal relationship” requirement of Newman is no longer good law. See United States v. Martoma, 14-3599 (2d Cir. Aug. 23, 2017).
Divided Second Circuit Panel Upholds Martoma Conviction, Ruling that Newman’s “Meaningfully Close Personal Relationship” Requirement Is No Longer Good Law After Salman
In a highly anticipated decision, a divided Second Circuit panel (Katzmann, Pooler (dissenting), Chin) today upheld the insider trading conviction of former SAC Capital portfolio manager Mathew Martoma, ruling that the “meaningfully close personal relationship” requirement set out by the Court in United States v. Newman, 773 F.3d 438 (2d Cir. 2014), does not survive the Supreme Court’s decision in Salman v. United States, 137 S. Ct. 420 (2016). See United States v. Martoma, 14-3599 (2d Cir. Aug. 23, 2017).
In United States v. Browder, the Second Circuit (Cabranes, Lohier, Forrest, sitting by designation) has vacated in part an order finding that the defendant violated two conditions of supervised release. The Court’s decision sheds light on the respective roles of the district court and the Probation Office in entering and executing an order of supervised release, and it suggests that the Court may look with increased scrutiny at generalized conditions that defer to the Probation Office without sufficient judicial scrutiny, and may reject violation specifications based on those infirm conditions.
Last week, in Barinas v. United States, the Second Circuit held that a defendant who is extradited to the United States to face charges, pursuant to agreement with the asylum nation, may not raise the objection that the prosecution exceeds the scope of the extradition agreement or that he is to be tried on charges other than those for which he is extradited. That objection, known as a “rule of specialty” objection, may be raised only by the asylum nation itself. The panel also held that when a defendant on supervised release becomes a fugitive, his supervised-release term is tolled during the period of fugitivity. The impact of this ruling is that a defendant who commits another crime while a fugitive from supervised release can be charged with a violation specification even if, at the time he committed the second crime, his term of supervised release otherwise would have ended.
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