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Court Restrains Improper Application of “Physical Restraint” Enhancement

In United States v. Paul, the Second Circuit (Newman and Pooler Circuit Judges, and Cote, J., by designation) issued an opinion interpreting the meaning of the phrase “physically restrained” during a commission of a crime for the purpose of applying the physical restraint enhancement set forth in Sentencing Guidelines Section 2B3.1.

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Circuit Determines that Attempted Robbery Under New York Law Constitutes a “Crime of Violence” Pursuant to 2014 Federal Sentencing Guidelines

In United States v. Pereira-Gomez, a panel of the Second Circuit (Cabranes, Carney, Caproni, D.J.) issued an opinion analyzing whether attempted robbery under New York law qualifies as a “crime of violence” for enhancement purposes under Section 2L1.2 of the November 2014 United States Sentencing Guidelines.  Engaging in a meticulous exercise in statutory interpretation, the panel concluded that while the offense is not specifically enumerated in the Guidelines’ definition of “crime of violence,” it does fall within the residual “force clause” of the relevant Guidelines application note, thereby resulting in a substantial prior offense enhancement to the applicable sentencing range.  This case demonstrates the difficulties that courts and litigators experience in interpreting sentencing enhancement provisions that are based on the categorical nature of a prior conviction.

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Second Circuit Limits Reach of FCPA to Persons Present in the United States

In an important decision issued on August 24, the Second Circuit limited the reach of the Foreign Corrupt Practices Act (“FCPA”) by holding that theories of conspiracy or complicity cannot be used to charge non-U.S. citizens who do not work for an American business and whose furtherance of corrupt schemes takes place outside the United States.  Judge Pooler wrote the majority decision in United States v. Hoskins, No. 16-1010, and Judge Wesley authored a concurring opinion.  This decision is notable because FCPA cases are rarely litigated because the stakes are ordinarily too high for corporations to challenge the  government’s theory of liability in court, and individual prosecutions are rare.  Hoskins is also particularly interesting because it appears to contradict the DOJ and SEC’s own interpretation of the FCPA, as set out in the FCPA resource guide

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Circuit Affirms Conviction under Biological Weapons Act

In United States v. Le, No. 16-819, the Second Circuit considered the constitutionality of the Biological Weapons Anti-Terrorism Act of 1989 and whether it can reach “purely local” conduct.  The panel (Sack, Raggi, Gardephe, D.J.), affirmed the conviction of Cheng Le for attempting to acquire the toxin ricin to create a foolproof murder method, rejecting his constitutional challenges.

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The Circuit Affirms Public Corruption Conviction, Rejecting A Slew Of Arguments And Narrowing The Reach Of Its Prior Decisions On Witness Tampering

In a lengthy opinion in United States v. Sampson on August 6, 2018, the Second Circuit (Cabranes, Livingston, Carney) affirmed the conviction of former New York State Senator John Sampson for obstruction of justice and false statements.  Sampson challenged his conviction at trial on a variety of different grounds.  The strongest possible basis for reversal was based on two prior decisions of the Second Circuit that limited the reach of Section 1503(a), one of the statutes that prohibits obstruction of justice.  In order for the Court to affirm, it needed to limit the apparent reach of these decisions, coming right up to the line that prohibits one panel of the Second Circuit from revisiting a prior panel decision without an en banc ruling by the Court.  In the end, the Court rejected this claim and the many other claims presented by Sampson, leaving both his conviction and sentence in place.

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Courts Reinstates Embezzlement Charges Dismissed as Untimely, Holding that Dismissal was Based on a Premature Assessment of the Government’s Evidence

In United States v. Sampson, decided August 6, 2018, the Court (Cabranes, Livingston, Carney, C.J.J.) reversed the district court’s dismissal of embezzlement charges levied against former New York State Senator John Sampson.  In a companion decision issued the same day, which we summarize in a separate post, the Court affirmed Sampson’s conviction on obstruction and false statement charges that proceeded to trial.

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Court Affirms Drug Conviction Notwithstanding Post-Trial E-mail from Juror Raising “Several Concerns”

In United States v. Baker, the Court (Livingston, Chin, C.J.J., Koeltl, D.J.) affirmed the conviction of Raymond Baker, who after a jury trial in the Northern District of New York was convicted of participating in a conspiracy to distribute and possess with intent to distribute more than 100 grams of heroin, in violation of the Controlled Substances Act, 21 U.S.C. §§841(a)(1), 841(b)(1)(B), 846 and 851.

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Appeal “Tanks” After Circuit Holds That Defendant Gave Implied Consent to Have K-9 Unit Present in His Apartment After Calling 911 to Report Prowler

On July 31, the Second Circuit issued a decision in United States v. Iverson (Kearse, Calabresi, Livingston) and affirmed the conviction of a defendant who had challenged the district court’s denial of his suppression motion and the district court’s mid-trial decision to excuse one of two black persons on the jury for cause right before summations based on an interview of the juror conducted in camera.  The decision presents an interesting set of facts and applies established law in the Second Circuit.

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Second Circuit’s Lambus Decision Analyzes the Admissibility of Wiretap and GPS Evidence

On July 25, 2018, in United States v. Lambus, No. 16-4296 (Kearse, Livingston, Jeffrey Meyer, D.J.), the Second Circuit issued a lengthy decision analyzing two questions related to the suppression of  GPS data from an ankle bracelet and evidence obtained from a wiretap.  The GPS question raises interesting issues about when a federal prosecution can make use of evidence obtained in connection with state parole supervision without a federal warrant and the relevance of state-federal coordination when making that assessment.  And the wiretap issue addresses whether an undisputed, but inadvertent, error in a wiretap application should result in the suppression of evidence.  On both issues, the district court (Weinstein, J.) granted the defendants’ motions to suppress, but the Circuit reversed.

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Circuit Rules That Embezzlement of Government Property Does Not Constitute “Continuing Offense,” Generating Split with Fourth Circuit

In a brief decision issued on Tuesday, July 31, in United States v. Green, the Second Circuit (Cabranes, Carney, Goldberg by designation) vacated in part a judgment ordering the defendant to pay restitution for the theft of government property that was stolen outside the applicable statute of limitations.  In doing so, the Court rejected the government’s arguments that the defendant had (i) waived her right to appeal in her plea agreement, and (ii) consented in her plea agreement to pay restitution for property stolen outside the applicable limitations period.  Having disposed of these contentions, the Court rejected the government’s argument that the underlying theft was a “continuing offense” that would permit the government to obtain restitution for amounts stolen both within and outside of the limitations period.

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Second Circuit Affirms $10 million Fine in Tax Evasion Case

In a per curiam decision issued on July 27, 2018, the Second Circuit affirmed a $10 million fine imposed on Morris Zukerman as part of a sentence for tax evasion in United States v. Zukerman, No. 17-948 (Katzmann, Kearse, Pooler).  The Court summarized its reason for affirming the fine, which was well above the $250,000 Guidelines ceiling, by writing that “Zukerman, a very wealthy man who has repeatedly and brazenly committed sophisticated tax fraud—a rarely caught and more rarely punished offense that undercuts the functioning of state and federal governments—ought to pay a fine hefty enough to take any financial benefit out of his crimes and to give pause to others who might be tempted to commit similar crimes.”  While tax cases often involve downward variances to a non-incarceratory sentence, this case involved a district judge’s strongly held belief that the high fine was important to the purposes of sentencing and that it merited an upward variance.  The Circuit agreed.

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Second Circuit Reverses Immigration Proceeding Based on Constitutional Violation, Criticizes Immigration Enforcement Based on Ethnic Generalizations As "Teeter[ing] On The Verge of The Ugly Abyss of Racism"

In the context of an appeal from a decision of the Board of Immigration appeals, Zuniga-Perez v. Sessions, the Second Circuit (Pooley, Wesley, Chin, C.JJ) ruled that a search conducted by law enforcement personnel violated the Fourth Amendment.  The Court recognized that the petitioner “made a sufficient showing of an egregious constitutional violation” by law enforcement agents, and reversed the immigration judge’s decision to deny a suppression motion without a hearing.  While this is not a criminal law decision, it raises some important criminal law issues, so we have decided to cover it.

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When Is a Controlled Substance Not a Controlled Substance?

Human Chorionic Gonadotropin is a hormone produced during pregnancy that is prescribed as part of some fertility treatments and, less legitimately, sold as a dieting aid.  In New York, it is considered a controlled substance, but it’s not listed on the federal controlled substance schedule.  In United States v. Townsend, the Second Circuit (Cabranes, Carney, Lawrence Vilardo, D.J.) faced a defendant with a prior conviction for possession of HCG, and considered whether his base offense level should be increased based on a prior conviction for an “offense under federal or state law . . . that prohibits . . . distribution . . . of a controlled substance.”   USSG § 2K2.1(a).  Applying a presumption that the Guidelines refer to federal law unless they explicitly incorporate state law, the panel said no:  because HCG is not banned on the federal level, its possession is not an offense for possession of a “controlled substance” for sentencing purposes.

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United States v. Smith

The Second Circuit issued an amended opinion in United States v. Smith (Cabranes, Winter, Restani by designation).  Both the original decision, which we covered on the blog earlier this year and the amended decision held that the defendant was subject to an enhanced Guidelines range as a result of having committed the New York offense of robbery in the second degree.  This crime constituted a crime of violence within the meaning of the residual clause of Sentencing Guidelines Section 4B1.2(a)(2), which was in effect when Smith was sentenced on October 1, 2015.

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Court Rejects MS-13 Gang Member’s Challenge to Conviction and Sentence

In United States v. Hernandez, 16-2765, the Second Circuit (Kearse, Cabranes, Lohier) affirmed the conviction of a member of La Mara Salvatrucha (MS-13), a street gang that operates in certain parts of the country, arising out of an initiation shooting in Brentwood. 

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In Split Decision, Court Again Applies Castleman To Interpret the “Force Clause” of the Armed Career Criminal Act

In Villanueva v. United States, the Second Circuit held by a 2-1 vote (Newman and Leval, with Pooler dissenting) that a conviction for first degree assault under Connecticut law qualifies as a violent felony under the Armed Career Criminal Act of 1984 (“ACCA”).  The question before the Court was whether the Connecticut statute, analyzed under the “modified categorical approach,” is a violent felony that requires the use of physical force.  The Court reversed the district court’s decision to grant the petition under Section 2255 and remanded the case for resentencing.

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In Narrow Decision, Court Holds Dishonorably Discharged Veterans May be Denied Gun (and Bullet) Ownership

In United States v. Jimenez, the Second Circuit (Pooler, Raggi, Droney) rejected an as-applied Second Amendment challenge to a provision of the Gun Control Act of 1968 that makes it illegal for a person who has been dishonorably discharged from the military to possess guns or ammunition, 18 U.S.C. § 922(g)(6).  In the decision, which marks the first time a federal court of appeals has grappled with the statute’s constitutionality post-District of Columbia v. Heller, 554 U.S. 570 (2008), the Court was careful to note that it was not considering a facial challenge and limited its discussion to persons, as here, who have been dishonorably discharged for “felony-like” military offenses.

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Court Regrets Allowing Successive 2255 Petition in Massey v. United States

On July 11, 2018, the Court of Appeals issued a short per curiam opinion (Wesley, Chin, Furman D.J. by designation) in Massey v. United States, affirming the sentence imposed on an individual who was convicted of possession of a firearm after a felony conviction pursuant to 18 U.S.C. § 922(g).  Massey had committed three prior felonies in New York:  third-degree robbery, second-degree assault, and second-degree attempted assault.  Each of these was deemed a crime of violence under the “force clause” of the Armed Career Criminal Act (“ACCA,” codified at 18 U.S.C. § 924(e)).  The question presented to the Court of Appeals was whether Massey’s sentence pursuant to the ACCA should be affirmed in light of the Supreme Court’s decision in Johnson v. United States, 135 S. Ct. 2551, 2563 (2015) (Johnson II), holding that the “residual clause” of the ACCA was unconstitutionally vague.

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Court Rejects Evidentiary and CFAA Vagueness Challenges to Conviction for Botnet Hacking Scheme

In United States v. Gasperini, the Court (Cabranes, Lynch, Carney) resolved various challenges by Fabio Gasperini, an Italian citizen, to his conviction under the Computer Fraud and Abuse Act of 1986 (“CFAA”).  Gasperini was convicted following an elaborate hacking scheme in which he exploited a “backdoor” of certain internet-connected devices around the globe to seize control of the devices, used the compromised devices to search for other vulnerable devices to grow his computer army, and then unleashed his “botnet” of over 155,000 machines to generate “ad click” revenue and launch distributed denial-of-service attacks.  Gasperini was ultimately arrested in the Netherlands and tried in the Eastern District of New York.

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Circuit Holds That Pending State Counts Qualify as “Anticipated” Sentence for Purposes of Sentencing Guidelines on Concurrent Sentencing

Is a term of imprisonment “anticipated” if charges are pending but the defendant has not yet pled or been found guilty?  In a per curiam decision, United States v. Olmeda, No. 15-3449 (Katzmann, Leval, and District Judge Carter by designation) (June 22, 2018), the Circuit addressed whether a defendant facing pending state charges is subject to an “anticipated” sentence – which, under Section 5G1.3(c) of the Sentencing Guidelines, would require his federal sentence to run concurrently with any state sentence later imposed.  Upon reviewing the relevant legislative history and case law, the Circuit determined that a state sentence is sufficiently anticipated for federal sentencing purposes even when the defendant's guilt has not yet been established in state court.  This decision will make sentences marginally shorter for defendants who are in the unfortunate position of being prosecuted in both state and federal court at the same time.

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What Was Decided Before Has Been Decided Again:  The Amended Opinion in Martoma Cuts Back On The Initial Decision, But Still Affirms

On Monday a divided Second Circuit panel (Katzmann, Pooler, Chin) issued an amended decision upholding the conviction of former SAC Capital portfolio manager Mathew Martoma on one count of conspiracy to commit securities fraud and two substantive counts of securities fraud.  The amended decision—like the original decision—is a major decision expounding on the common law of insider trading, from the leading Court on questions of federal securities law.  The decision—both the majority and the dissent—requires close study not only of its 61 combined pages, but several prior Supreme Court and Second Circuit decisions upon which it is premised.  In this regard, the decision reflects the continuing uncertainty that is created by the absence of a statute that specifically addresses insider trading.  Both the majority and the dissent make compelling arguments, and the question of what should be permitted and prohibited would be resolved most constructively by the legislative branch.

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Be Careful Where You Park: Circuit Finds No Legitimate Expectation of Privacy in Common Residential Lot

Earlier this year, in Collins v. Virginia, the U.S. Supreme Court held that the “automobile exception” to the warrant requirement does not authorize “a police officer, uninvited and without a warrant, to enter the curtilage of a home in order to search a vehicle parked therein.”  138 S.Ct. 1663, 1668 (2018).  Earlier this week, in United States v. Jones, No. 16-87 (Jacobs, Cabranes, Raggi) (June 19, 2018), the Circuit had its first opportunity to grapple with the import of Collins.  But it had little difficulty finding that a vehicle parked in a common lot shared by multi-family apartment buildings is not entitled to the same expectation of privacy as a vehicle parked “within the curtilage of one’s home,” and in a published opinion, affirmed the district court’s denial of a motion to suppress.  In a separate summary order, the Circuit addressed and disposed of the defendant’s other arguments, and affirmed his conviction and sentence in full.  

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Circuit Vacates Child Pornography Sentence For Second Time, Citing District Court’s Failure to Follow Circuit’s Mandate

On June 19, 2018, in a split decision in United States v. Sawyer, No. 15-2276 (Jacobs, Pooler, Crawford) the Circuit issued a firm rebuke of a District Court judge who – per the Circuit’s mandate – reduced the defendant’s sentence on remand, but did so without curing certain deficiencies the Circuit had identified as making the sentence substantively unreasonable.  The majority opinion makes clear that when the Circuit issues a mandate on remand, the district court is not at liberty to ignore it – even if the district court can achieve the same outcome (here, a reduced sentence) through different means.  As the dissent (Jacobs, J.) observes, however, the holding yields the anomalous result whereby the District Court may have remedied the substantive unreasonableness of the initial sentence on remand, but because it did so for the wrong reasons – i.e., by expressly declining to link the reduction to the two variables identified in the mandate – the sentence could not stand. 

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Court Allows Wife of Criminal Defendant to Amend Challenge to Forfeiture of Allegedly Commingled Assets on Due Process Grounds

In United States v. Daugerdas, the Court (Walker, Lynch, Chin) offered a lifeline to the wife of a defendant convicted of tax fraud, who sought to assert a third-party interest in funds that the Second Circuit had previously determined were forfeitable to the government as proceeds of the defendant’s crimes.  The U.S. District Court for the Southern District of New York concluded that petitioner Eleanor Daugerdas failed to state a claim that she was entitled to retain funds that her husband, defendant Paul Daugerdas, had gratuitously transferred to her.[1]  She sought to argue that the tainted funds had been commingled with legitimately earned funds prior to their transfer and therefore could not easily be traced back to Paul’s crimes.  But the question of whether the seized funds arose from Paul’s criminal activity had been decided in the affirmative by the district court as part of Paul’s sentencing.  As a result, the district court held that Eleanor could not relitigate the issue of whether those funds should be characterized not as criminal proceeds but as substitute assets, which would require the government to seek forfeiture of other property belonging to Paul.

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Court Holds Hobbs Act Extends to Robberies Involving Forced ATM Withdrawals

In United States v. Rose, the Court (Katzmann, Walker, and Bolden, sitting by designation) rejected a jurisdictional challenge to a guilty plea to violating the Hobbs Act, potentially giving rise to a Circuit split.  The defendant, Floyd Rose, was charged with robbing his victim by forcing them to withdraw money from their bank’s ATM and then hand it over to Rose.  After pleading guilty to Hobbs Act robbery, Rose argued that his plea should be set aside because the robbery lacked any connection to interstate commerce.

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Second Circuit Rejects Coin Dealer’s Coram Nobis Petition

Robert du Purton was convicted of mail fraud and conspiracy to commit mail and wire fraud in 2001 for participating in an “elaborate scheme of fraudulent representations” in his rare coin business.  According to trial evidence, du Purton lied to customers about the sources of coins, concocted phony auctions to drive up prices, and had his employees impersonate competitors or independent sources, among other things.  His conviction was affirmed on direct appeal.  Nearly fifteen years later, he brought a petition for writ of error coram nobis, claiming that the government presented false expert testimony at trial.  In a per curiam decision, the Second Circuit (Katzman, Leval, Andrew Carter, District Judge) affirmed the denial of the petition.

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In Amended Decision, Circuit Leaves In Place that “Hobbs Act” Robbery is a Categorical “Crime of Violence” Based on “Force Clause” but Eliminates Constitutional Blessing of “Risk-of-Force” Clause

Over a year and a half after issuing its initial decision in United States v. Hill, 14-3872-cr (August 3, 2016), the Court amended its decision on May 9, 2018.  The amended decision maintains the Court’s holding that a Hobbs Act robbery is a categorical “crime of violence” under the so-called “force clause” clause (§ 924(c)(3)(A)).  However, the amended decision excises the Court’s prior holding that the “risk-of-force” clause (§ 924(c)(3)(B), also called the “residual clause”) was not void for vagueness and also qualified the a Hobbs Act robbery as a categorical “crime of violence.”

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Sentencing Court Must Provide Sufficient Reasons for Sentence Imposed to Determine if Factual Error Influenced Sentence

In United States v. Derek Armstrong, 18-368, the Second Circuit (Sack, Raggi, Kaplan) issued a summary order vacating a three-month prison sentence imposed on the defendant by the U.S. District Court for the Eastern District of New York for violating probation by failing to report for random drug testing.  The defendant had previously been sentenced in 2015 to three years’ probation for filing false tax returns and it was his violation of that probation that resulted in the challenged sentence.  On appeal, he argued that his prison sentence was procedurally unreasonable because it was based on an erroneous fact asserted by the government at sentencing: that the defendant had failed to pay any of the back-tax payments ordered by the district court. 

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Second Circuit Affirms Constitutionality of Arms Export Control Act

In United States v. Mark Henry, the Second Circuit (Jacobs, Cabranes, and Wesley, Js.) affirmed that the Arms Export Control Act (“AECA”), 22 U.S.C. § 2751 et seq., does not constitute an unconstitutional delegation of legislative authority to the executive branch, in addition to addressing various issues of trial procedure.  The defendant, Mark Henry, appealed his 2014 conviction following a jury trial of violating and attempting to violate the AECA by exporting “ablative materials”—military-grade technology used in rockets and missiles—and microwave amplifiers to customers in Taiwan and China.  The AECA prohibits the exportation of ablative materials, microwave amplifiers, and other “defense articles” except pursuant to a license issued by the Directorate of Defense Trade Controls, a division of the U.S. Department of State.  The government presented evidence at trial that the defendant was aware of the need for an export license, that he did not have such a license, and that instead of acquiring a license the defendant took steps to conceal his exportation of restricted materials through the use of intermediaries, fictitious companies, and falsified documents, among other things.  The court allowed the defendant, who is from China and primarily speaks Mandarin, to testify at trial in English through the help of a standby interpreter, although the court otherwise required a translator to assist the defendant throughout the trial.

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Takeaways From 2nd Circ. Reversal Of Litvak Conviction

In United States v. Litvak, the Second Circuit (Winter, Chin, Korman D.J.) reversed the conviction of Jesse Litvak, a securities trader at investment bank Jefferies & Co., for securities fraud premised on Litvak’s misrepresentations to trading counterparties about Jefferies’ profits on the transaction. The Court held that the district court improperly admitted testimony that Litvak’s counterparty believed that Litvak was acting as his fiduciary agent—even though in fact no such relation existed.  The Court explained that the counterparty’s erroneous, subjective belief was irrelevant as to the objective materiality of the misstatement, but likely swayed the jury in convicting.  The decision also raises interesting questions about expectations between traders and their customers, and the Government’s role in policing that relationship. For our discussion and commentary on this decision, please see our article on Law 360.

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Second Circuit Holds Life Term of Supervised Release for Non-Violent Drug Offender is Unreasonable

On May 2, 2018, the Second Circuit held in United States v. Jamaal Brooks (Parker, Lynch, Chin) (per curium) that the district court erred in imposing a sentence of lifetime supervised release on a defendant who had violated prior terms of supervised release due to continued drug use and failure to report to scheduled drug testing.  The Court stressed that while the sentencing court has substantial discretion in fashioning an appropriate sentence, a term of supervised release is nonetheless substantially unreasonable if it is improperly justified by retribution and deviates significantly from the sentence given to similarly-situated violators.  Supervised release imposes real burdens on both defendants and the justice system, and this decision is a reminder that, as in other aspects of federal sentencing, the punishment should fit the crime.

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Second Circuit Reverses Conviction Due to Unlawful Curtilage Search

On May 1, 2018, the Second Circuit (Lynch, Carney, Hellerstein D.J. (concurring)) reversed the district court’s denial of Defendant Robert Alexander’s motion to suppress guns found after a search of a bag in front of a shed in Alexander’s backyard.  The panel closely reviewed Supreme Court case law on whether certain areas near the home are considered the “curtilage,” and thus are protected to by the Fourth Amendment.  The decision also includes a notable concurrence from Judge Hellerstein, who argued for extending Terry v. Ohio’s “stop and frisk” doctrine to include searches of areas near the home based on reasonable suspicion of wrongdoing.

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Hyde & Seeking Attorney’s Fees in Cases of Prosecutorial Misconduct

In 2014, a federal jury acquitted Gerald E. Bove of one count of Hobbs Act conspiracy and one count of Attempted Hobbs Act extortion.  Following his acquittal, Bove applied for reimbursement of the attorney’s fees and expenses he incurred in defending the criminal charges, pursuant to a rarely-litigated statutory provision known as the Hyde Amendment of 1997,[1] codified at 18 U.S.C. § 3006A.  On April 26, 2008, the Second Circuit (Cabranes, Livingston, Carney, Js.) affirmed the district court’s denial of Bove’s application, and in doing so confirmed that the standard for criminal defendants to recover fees and costs is high, and the discretion afforded district courts presented with Hyde Amendment applications is wide.

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Second Circuit Addresses Victims’ Rights, Restitution, and Asset Forfeiture in Insurance Context

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.

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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.

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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.

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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.

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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.

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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.

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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[1]), 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.

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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. 

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Conviction reversed by summary order for improper rebuttal summation

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.”

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In Divided Decision, Court Rejects Challenge to Conspiracy Conviction Based on Grand Jury Clause

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.

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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.

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Court Holds New York Second-Degree Robbery is Crime of Violence Under 2014 Sentencing Guidelines

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. 

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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.

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Circuit Holds that Interstate Travel Element Confers Multiple Venues for Prosecution

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.

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