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Court Affirms Conviction In Case Involving $126 Million Loan For Shopping Mall Transaction, Rejecting Argument That Sentence Should Be Lowered Because Of The Financial Crisis

In a summary order on March 8, 2017, the Second Circuit (Katzmann, C.J. and Pooler and Lynch, J.) affirmed the conviction and sentence for wire fraud in United States v. Frenkel. The case attracted some public attention because Frenkel’s co-conspirator, Mark Stern, was a cooperating witness in a number of public corruption cases brought by the U.S. Attorney for the Southern District of New York. The underlying facts involved Frenkel’s fraudulent inducement of Citigroup to lend $126 million to finance the purchase of shopping malls. Although the decision has no precedential value, it presented four interesting issues.

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Divided Panel Debates a Jury’s Ability to Resist the Persuasive Power of Hollywood

In United States v. Monsalvatge (Nos. 14-1113, 14-1139, and 14-1206), a divided panel of the Second Circuit explored the contentious topic of introducing blockbuster films as evidence in a criminal prosecution.  Defendants Akeem Monsalvatge, Edward Byam, and Derrick Dunkley were tried and convicted of committing (and conspiring to commit) two armed robberies of Pay-O-Matic check-cashing stores in Queens.  The robberies occurred nearly two years apart—in 2010 and 2012—and there were significant differences in the manner in which each crime was carried out.  The government believed that these differences were attributable to the fact that the defendants admired and were inspired by the 2010 Hollywood crime thriller, The Town, and altered their modus operandi to carry out the 2012 robbery in a manner resembling the crimes committed in the film.  At trial, the district court permitted the government to play for the jury several brief clips from The Town, in order to highlight the similarities between the film and the 2012 robbery.  On appeal, the Second Circuit concluded that the district court did not abuse its discretion in admitting these clips into evidence.  Judge Livingston authored an opinion joined by Judge Droney; District Judge Analisa Torres, sitting by designation, found the introduction of the clips inappropriate but ultimately concurred in the judgment based on a finding of harmless error.[1]

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An Empty Bargain: Circuit Overturns Guilty Plea Entered By Defendant Unapprised of Mandatory Life Sentence

In a decision dated March 10, 2017, the Circuit issued a blistering decision vacating the district court’s denial of the defendant’s motion to withdraw his guilty plea in United States v. Johnson, No. 15-3498-cr (Jacobs, J., joined by Judges Cabranes and Parker), holding that the defendant’s plea to offenses requiring a mandatory life sentence was not made knowingly, voluntarily and intelligently.  Readers squeamish of benchslaps are advised to stop reading here: the panel called out the defendant’s asleep-at-the-wheel trial counsel by name no fewer than a dozen times, and chided the “robotic” prosecutor for delivering a prolix recitation of the sentence facing the defendant during plea allocation.  But the panel saved its strongest admonishment for the district court judge, whom it believed so incapable of handling the proceedings fairly and competently on remand that it directed the case to be reassigned.  In the end, only the defendant – a repeat offender facing felony drug trafficking charges – emerged from the opinion unscathed.

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Return to Sender: Aéropostale Employee’s Fraud Convictions Affirmed, But Restitution Order Sent Back for Recalculation

Aéropostale is known by many as a staple of adolescent wardrobes and shopping-mall standard.  But as a patsy for kickback schemes?  In United States v. Finazzo, 14-3213-cr, 14-3330-cr (Droney, J., joined by Judges Sack and Chin), issued March 7, 2017, the Circuit affirmed the mail and wire fraud convictions of an Aéropostale executive who, over the course of a decade, steered hundreds of millions of dollars in business to a vendor that cut him in on the profits.  In affirming his convictions, the Court held that the defendant’s deprivation of Aéropostale’s right to control its assets was injury sufficient under the mail and wire fraud statutes, and that the district court had adequately instructed the jury that such deprivation must be able to cause tangible economic harm.  However, the panel vacated and remanded the district court’s restitution order on the grounds that the calculations presumed that any financial gain to defendant through the scheme was a loss to Aéropostale.  With little more direction than to “try again,” the court instructed the district court to develop a new methodology for computing a restitutionary award that subtracts any legitimate value that Aéropostale derived through its dealing with the vendor.  The Circuit has long stressed the need for precision in restitution calculations, and it can be difficult to make such calculations in a kickback case prosecuted under a theory based on the deprivation of the right to control assets.

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Second Circuit Reverses In Part and Affirms In Part In Appeal From Convictions Under Sarbanes-Oxley and Accessory-After-The-Fact Statutes

On February 23, 2017, the Second Circuit (Chief Judge Katzmann, Judge Winter, and District Judge Sidney Stein, by designation) issued a per curiam decision in United States v. Natal, et al., that led to a partial reversal and remand for resentencing in the case of one defendant, Hector Morales. The Court held that the conviction of one defendant—Hector Morales—for destruction and concealment of evidence must be vacated because his conduct was not prohibited by Title 18, United States Code, Section 1519. This was a direct result of the Supreme Court’s decision in Yates v. United States, 135 S. Ct. 1074 (2015), which limited the reach of the relevant statute to the destruction of objects that can be used to record or preserve information. We have previously reported on this important decision. Here, the repainting of a van allegedly used to drive away from a crime scene was held to be outside of the reach of Section 1519, as limited by Yates. This reversal of the Section 1519 count requires that Morales be given a de novo resentencing. 

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In Summary Order, Second Circuit Provides Guidance to Courts Deciding Motions for Sentence Reductions

On February 16, 2017, the Second Circuit (Leval, Calabresi, Carney) issued a summary order in United States v. Lopez, No. 16-1019, vacating and remanding for reconsideration the district court’s denial of the appellant’s motion for a sentence reduction under 18 U.S.C. § 3582(c)(2) based on a recent change to the United States Sentencing Guidelines.  The Second Circuit has recently issued several summary orders reversing similar denials.  (See our prior coverage here.)

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Second Circuit Rules That Defendant Who Pleads Guilty Mid-Trial May Testify as Cooperating Witness Against Former Co-Defendants

On Wednesday, February 15, the Second Circuit issued a published opinion in United States v. Barret, No. 12-4663(L) (Pooler, Hall, Carney), addressing an issue of first impression in the Circuit—whether testimony of a former co-defendant who pleads guilty during trial and agrees to testify as a government witness is admissible at that same trial.  The Second Circuit answered that question in the affirmative, holding that such testimony is admissible so long as the district court takes certain steps to avoid undue prejudice to the remaining defendants.  Those steps include limiting the testimony to events other than the witness’s involvement in joint defense planning and properly instructing the jury regarding the changed circumstances.  The Second Circuit noted that its holding was consistent with decisions issued in the First, Third, Seventh, and Eleventh Circuits.

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Dissenting from Order Denying Rehearing En Banc, Judges Voice Concerns About Overbroad Criminal Statutes Enabling Prosecutorial Abuse

Yesterday the Second Circuit issued an order denying rehearing en banc in United States v. Marinello, No. 15-224, after an active judge of the Court had requested a poll as to whether the case should be reheard by the full Court.  Two judges (Jacobs and Cabranes) dissented from the denial of rehearing en banc.  Writing for the dissenters, Judge Jacobs wrote that the panel decision placed the Second Circuit “on the wrong side of a circuit split” by affirming a conviction based on “the most vague of residual clauses,” and that in doing so the Court had paved the way for “prosecutorial abuse.”

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In Summary Order, Court Vacates Denial of Resentencing Motion, Citing Ambiguities in the Sentencing Record

On January 31, 2017, the Court (Katzmann, Kearse, Livingston) issued a nonprecedential summary order vacating and remanding an order denying a motion for resentencing in United States v. Majors, No. 15-4022. The remand was required in part due to substantial ambiguity over the sentencing range that applied at the defendant’s sentencing, an ambiguity caused in part by the enactment of the Fair Sentencing Act of 2010, after the defendant’s guilty plea, which reduced the Sentencing Guidelines ranges for defendants convicted of crack cocaine offenses in order to address long-standing racial disparity concerns about these provisions.

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Second Circuit Affirms “One-Book Rule”: No Sampling from Different Versions of the Sentencing Guidelines

Yesterday the Second Circuit affirmed, in United States v. Ramirez (No.15-2570), the so-called “one-book rule”:  if sentenced criminals want to seek a reduction in sentence based on changes in the Sentencing Guidelines, they have to accept the new Guidelines wholesale.  They can’t pick and choose the most favorable provisions from the various iterations of the Guidelines that might potentially apply.  Judge Droney wrote the opinion, with Judges Raggi and Chin also on the panel.

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Sharply Divided Circuit Denies Government’s En Banc Petition In Microsoft Appeal

In July 2016, the Second Circuit ruled that the Government could not employ a domestic search warrant, issued pursuant to the Stored Communications Act, 18 U.S.C. § 2703 (the “SCA”), to compel disclosure of an email account that Microsoft stored on servers in Ireland.  (See our coverage of that decision here.)  Yesterday, a sharply divided Court denied the Government’s petition for rehearing en banc, leaving the decision intact.  The decision will presumably be met with relief in the technology sector, some of whose major players submitted amici briefs in support of Microsoft’s position.  But the four dissenters expressed concern that it hamstrings the Government in its pursuit of electronic evidence, jeopardizing national security.  And all of the Judges agreed that the SCA – which was passed in 1986 – is due for congressional review in light of the dramatic changes in electronic data storage that have occurred over the past 30 years.

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How “Close” is Close Enough? Parties Submit Supplemental Briefing in Martoma in Light of Salman

The Supreme Court’s decision in Salman v. United States, 137 S.Ct. 420 (2016) is already having an effect on the appeals arising out of the insider trading convictions in the Southern District of New York.  Shortly after Salman, the Second Circuit asked the parties in the insider trading case of United States v. Martoma to submit supplemental briefing discussing the decision’s impact.  Salman rejected the defendant’s argument that he could not be convicted of insider trading where his brother-in-law did not receive a pecuniary benefit for passing information to him, holding that the relative’s tip satisfied the standard for a “gift of confidential information to trading relatives.”  The decision partially overturned United States v. Newman, 773 F.3d 428 (2d Cir. 2014), which had required “a meaningfully close personal relationship that generates an exchange that is objective, consequential, and represents at least a potential gain of a pecuniary or similarly valuable nature.”  Our prior coverage of Newman can be found here and here, and our prior coverage of Salman can be found here.

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Closing the Courtroom? Second Circuit Reluctantly Approves, Reminds Lower Courts to Create a Clear Record

In Moss v. Colvin, 15-2272, the Second Circuit (Katzmann, Wesley, Carney) issued a per curiam decision affirming the denial by the U.S. District Court for the Southern District of New York (Crotty, J.) of the petitioner’s writ of habeas corpus under the Antiterrorism and Effective Death Penalty Act of 1996, 28 U.S.C. § 2254(d) (“AEDPA”).  Despite the affirmance based on procedural grounds, the decision serves as a good reminder to lower courts to create a clear record when weighing a potential courtroom closure.

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Court Vacates Term of Supervised Release

In a short summary order in United States v. Breton, the Court (Winter, Jacobs, Cabranes) vacated a term of supervised release because the district court had improperly calculated the advisory Guidelines range.  Defendant Raddy Breton pleaded guilty to attempted possession of methylone with intent to distribute.  Pursuant to U.S.S.G. § 5D1.2(a) and 18 U.S.C. § 3553(f), which limits the applicability of statutory minimums in certain cases, Breton faced an advisory Guidelines range of one to three years of supervised release.  During sentencing, the district court calculated the applicable supervised release range as three years to life.  Both parties submitted that the miscalculation constituted plain error.

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Court Affirms Filing of Section 851 Prior Felony Information

In United States v. Strong, No. 15-2992, the Court (Kearse, Lohier, and Droney) affirmed Strong’s conviction in a brief, per curiam opinion.  Strong was charged with conspiracy to possess with intent to distribute and to distribute cocaine base and heroin.  The government filed a 21 U.S.C. § 851 prior felony information that doubled the applicable mandatory minimum from 60 months to 120 months.  Strong did not object to the filing of the prior felony information.  He pleaded guilty to the conspiracy charge and admitted the fact of his prior state felony conviction. 

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Second Circuit Parses Distinction Between “Based on” and “Applicable to” in Context of Sentence Reductions for Retroactive Amendments to Sentencing Guidelines

In United States v. Leonard, No. 15-22-32-cr (December 14, 2016) (Raggi, Chin, Droney), the Second Circuit vacated and remanded an order finding a defendant ineligible for a sentence reduction based on a retroactive amendment to the Sentencing Guidelines under 18 U.S.C. § 3852(c)(2). 

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The Second Circuit Limits the Application of Two Guidelines Enhancements

In United States v. Huggins,15-1676, the Second Circuit (Winter, Cabranes, and Restani, sitting by designation) limited the scope of two Guidelines enhancements often applicable to white-collar crimes:  (1) U.S.S.G. §2B1.1(b)(16)(A), which provides for a two-level enhancement when the conduct derived more than $1 million from financial institutions; and (2) U.S.S.G. §3B1.3, which permits a two-level increase when a defendant has abused a position of public or private trust.  Huggins marks the first time the Court has given thorough consideration to the first enhancement and further clarified how courts should apply the second. 

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Divided Court Withdraws Opinion Vacating 60-Year Child Pornography Sentence and Affirms the Sentence as Procedurally and Substantively Reasonable

In United States v. Brown, No. 13-1706, the Second Circuit (Pooler, Sack, and Droney), withdrew the Court’s June 14, 2016 opinion, vacating Nathan Brown’s sixty year prison sentence on three counts of production of child pornography, in violation of 18 U.S.C. § 2251(a); and two counts of possession of child pornography, in violation of 18 U.S.C. § 2252A(a)(5)(B).  On December 6, 2016, the divided panel issued a new opinion affirming the district court’s sentence.

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In A Summary Order, Second Circuit Vacates 30-year Child Pornography Sentence on Substantive Reasonableness Grounds

In United States v. Sawyer, No. 15-2276, the Second Circuit (Jacobs, Pooler, Crawford) vacated and remanded for resentencing a case involving a conviction for possession of child pornography.  The decision rested on a finding that the 30-year sentence was substantively unreasonable, yet was made by unpublished summary order.  This is the third time in the past several months that a child pornography sentence has been vacated and remanded (see our posts on United States v. Bennett and United States v. Brown), but while the prior two decisions rested on procedural grounds as a means of sending the case back to the district court for a second look, Sawyer relies solely on substantive unreasonableness.  It is very rare for the Second Circuit to reverse a within-the-range sentence for substantive unreasonableness.

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Food For Thought: Court of Appeals Questions Relevance Of Guidelines To Case Of Fraud Involving Supplemental Nutrition Assistance Program

In United States v. Algahaim, No. 15-2024(L), the Second Circuit (Newman, Winters, Cabranes) upheld the conviction of two defendants for misconduct involving the Supplemental Nutrition Assistance Program (“SNAP”), but remanded to the district court for consideration of a below-Guidelines sentence.  The Court, in an opinion by Judge Newman, held that the outsize effect of the loss amount enhancement on the defendant’s base offense level—a sentencing scheme for fraud that is “unknown to other sentencing systems”—required the district court to reconsider whether a non-Guidelines sentence was warranted.

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Law Enforcement Permitted To Obtain GPS Location Data Without A Warrant In A Sex Trafficking Investigation

In United States v. Gilliam, 15-387, the Second Circuit (Newman, Winter, Cabranes) held that, under the exigent circumstances present in that case, law enforcement could use cell phone GPS data to locate a suspect without obtaining a warrant consistent with both the Stored Communications Act and the Fourth Amendment.  This appeal presents one of many unanswered questions arising out of cellphone technology.  While cellphones are far from new, there are still some questions about how cellphone data can be used in investigations and at trial.

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Second Circuit Clarifies Scope Of Proffer Agreement Waivers

Securing a cooperation agreement after proffering to the government can lead to enormous benefits for those who successfully navigate the process. However, the negative consequences of a failed proffer are profound. Assessing the risks of whether to proffer and enter into a proffer agreement is an important part of federal criminal practice. In an important recent decision, in United States v. James J. Rosemond, 15-0940-cr (Nov. 1, 2016) the U.S. Court of Appeals for the Second Circuit elaborated in detail on exactly when certain defense tactics will (and will not) open the door to the introduction of the otherwise-protected proffer statements. The Court held that the district court in Rosemond applied the waiver provision in defendant’s proffer agreement too broadly, thereby incorrectly precluding defense counsel from making sufficiency arguments. 

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Do It Again: Circuit Reaffirms That De Novo Resentencing Required After Partial Vacatur

In United States v. Heath Powers, 15-3867, the Second Circuit (Cabranes, Pooler, Parker) issued a per curiam decision remanding to the U.S. District Court for the Northern District of New York (D’Agostino, J.) with instructions to vacate an erroneous count of conviction on a child pornography charge and for de novo resentencing.  The defendant had been charged by a federal grand jury of eleven counts of production of child pornography, one count of distribution of child pornography, and one count of possession of child pornography.  The Court’s description of the underlying facts indicated that the defendant also engaged in sexual acts with the seven-year old girl he had photographed.  After the defendant pleaded guilty to all counts, the district court sentenced him to a below-Guidelines 480-month term of imprisonment, which included terms of imprisonment on each count, all to be served concurrently.

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In Well-Publicized Case, Circuit Denies Arms Trafficker New Trial

In United States v. Viktor Bout, 15-3592, the Second Circuit (Walker, Hall, Chin) issued a summary order affirming the decision of the District Court for the Southern District of New York (Scheindlin, J.) denying the defendant’s motion for a new trial.  Bout was convicted following trial on four counts arising from a sting operation that involved Bout’s participation in a conspiracy to sell 100 surface-to-air missiles to the Colombian terrorist group Fuerzas Armadas Revoluncionarias de Colombia (“FARC”), and sentenced to 300 months in prison.

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Sanford v. United States

The Court in Sanford v. United States, 16-1840 (Katzmann, Wesley, Hall) yesterday dismissed Petitioner Elijah Sanford’s motion for leave to file a successive § 2255 motion to challenge his sentence, concluding that Sanford’s challenge was precluded by an enforceable collateral attack waiver, knowingly and voluntarily made, in his plea agreement.

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Second Circuit Clarifies That Statutory Maximum Takes the Place of the Guidelines Range in Remand of Child Pornography Sentence

In United States v. Bennett, 15-0024-cr (October 6, 2016, amended October 7, 2016) (Walker, Calabresi, Hall), the Court remanded for resentencing to make clear that under U.S.S.G. § 5G1.1(a), where the statutory maximum falls below what would otherwise be the Guidelines range, the statutory maximum becomes the Guidelines sentence.  

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If It Looks Like a Bomb, and Explodes Like a Bomb . . . : The Court Finds Model Pipe Bomb Is a Destructive Device

Is a pipe bomb that exploded a “destructive device”?   Though it may seem like a trick question, in United States v. Sheehan, 15-2028-cr (Lynch, J., joined by Judges Winter and Wesley), issued September 23, 2016, the Court spends most of its 44-page decision grappling with whether a bomb built and planted by the defendant was an “explosive bomb” (or a “combination of parts” from an explosive bomb could readily be assembled) such that it qualifies as a destructive device under Section 924.  The Government (and common sense) prevailed:  the Court concluded that, indeed, this exploding bomb was an explosive bomb.

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Disjunction, Disjunction, What’s Your Function? Despite Statutory “or,” Court Holds Same Conduct May Support Both Modification and Revocation of Supervised Release

At issue in the Court’s September 22, 2016 decision in United States v. Harris, No. 15-1774 (Raggi, J., joined by Judges Newman and Calabresi) is a clever defendant’s embrace of the disjunctive in Section 3583 in urging that the statute governing revocation of supervised release permits a violation of release conditions to serve as the basis to revoke “or” modify supervision – but not both. 

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Gimme Shelter, But One With Economic Substance

The line that separates lawful tax shelters from unlawful ones is notoriously hazy, particularly at the margins.  There is little question, however, that a transaction that serves no meaningful business purpose other than to reduce one’s tax liability will be treated as an illegitimate tax shelter.

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Second Circuit Reminds District Courts to Adhere to Plea Colloquy Rule Requirements

In a summary order in United States v. Zea, No. 15-1531-cr, issued by the Court (Walker, J., Cabranes, J., Lohier, J.) on September 1, 2016, the Court affirmed a conviction for attempted provision of material support to a foreign terrorist organization.  As in many recent cases, the Court considered an argument that a guilty plea should be undone because of deficiencies in the plea allocution.  In this instance, the defendant identified three aspects of Rule 11 of the Federal Rules of Criminal Procedure with which the district court did not comply.  The Court held that this was not reversible error under the applicable plain error standard because there was no “reasonable probability” that but for the error the defendant would not have entered the guilty plea. 

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Second Circuit Reverses Denial of Motion to Suppress Evidence Found During Protective Search

Recently, in U.S. v. Hussain et al., No. 14-4425-cr, the Court (Calabresi, J., Lynch, J., Lohier, J.) reversed a district court’s denial of a motion to suppress a loaded gun found during a protective search of the defendant’s car.  In so doing, the Court noted its doubt that the same set of facts would have given rise to a suspicion of dangerousness had the Jamaican-American defendant been of a different race, gender, or socio-economic background.  This candid remark from the Court is in keeping with the social and political issues that have been raised more broadly about the need for fairness and the appearance of fairness in how our criminal laws are enforced.    

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Second Circuit Holds that Convergence Not Required for Wire Fraud Conviction

To sustain a conviction for wire fraud pursuant to 18 U.S.C. § 1343, is “convergence” between the intended victim of the fraud and the party deceived by the fraudulent conduct using the wires required?  Until recently, this has been an open question in the Second Circuit.  On August 31, 2016, in United States v. Daniel Greenberg, 14-4208-cr; 14-4278-cr, a Second Circuit panel (Straub, J., Livingston, J., Chin J.,) held that convergence is not required.

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Second Circuit Reaffirms that Fact of Prior Conviction Need Not be Found by Jury

In Alleyne v. United States, 133 S. Ct. 2151 (2013), the U.S. Supreme Court held that the Sixth Amendment requires that any fact that increase the mandatory minimum penalty for a crime must be submitted to the jury and found beyond a reasonable doubt.  Id. at 2155.  Alleyne, however, noted in a footnote that it was not “revisit[ing]” the exception to this general rule for the fact of a prior conviction.  Id. at 2160, n.1.  Recently, in United States v. Anthony Boykin et al., Nos. 14-851-cr & 14-1033-cr (Walker J., Calabresi, J., Hall, J.), the Second Circuit also declined to revisit that exception.  Although there is a certain logic to extending Apprendi v. New Jersey, 530 U.S. 466 (2000), to the fact of a prior conviction—so that any fact that increases the minimum or maximum sentence faced by a defendant must be put to the jury—this exception contained in Apprendi continues to endure.

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Second Circuit Affirms Bribery Conviction of Former Mayor of Spring Valley, New York

In United States v. Noramie Jasmin, 15-2546-cr, a Second Circuit panel (Walker, J., Cabranes, J. and Lohier, J.), affirmed by summary order the bribery conviction of Noramie Jasmin, a former mayor and trustee of the Village of Spring Valley, New York, a town in Rockland County, New York.  Jasmin was convicted of participating in a scheme to obtain financial benefits for herself in exchange for exercising her official powers to facilitate the construction of a community center.  Jasmin appealed from a conviction of one count of mail fraud in violation of 18 U.S.C. §§ 1341 & 1346, and one count of Hobbs Act extortion in violation of 18 U.S.C. § 1951, and her sentence of four years imprisonment. 

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Evidence That Defendant Targeted Marijuana Dealer for Marijuana or Proceeds Satisfies Hobbs Act Interstate Commerce Element

The Hobbs Act makes it a crime to “obstruct[], delay[], or affect[] commerce or the movement of any article or commodity in commerce, by robbery . . . or attempt[] or conspire[] so to do.”  18 U.S.C. § 1951(a).  “[C]ommerce” is defined under the Act to include “all . . . commerce over which the United States has jurisdiction.”  Id. § 1951(b)(3).  With its opinion in United States v. Lee, 11-2539, 11-2543, 11-2834, 11-4068, the Court (Cabranes, Pooler, Lynch) has made clear that evidence that a defendant targeted a marijuana dealer for his marijuana or marijuana proceeds is sufficient to satisfy the Hobbs Act’s interstate commerce element (see Op. at 13). 

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Court Rules That District Court Had Power to Adjudicate Supervision Violations Charged After Expiration of Supervision Term

In United States v. Edwards, the Court (Sack, Raggi, Droney) affirmed a judgment of the District Court (Chatigny, J.) revoking the supervised release of Defendant-Appellant Owen Edwards and sentencing Edwards to 24 months’ imprisonment based on four supervision violations.  Edwards had raised two issues on appeal:  first, whether the District Court had jurisdiction to revoke his supervised release based on violations charged after the scheduled expiration of his term of supervision; and second, whether the evidence was sufficient to support the particular charge that Edwards had committed a crime while under supervision.

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Corrupt Public Officials Can Be Ordered to Pay Forfeiture Judgments Out of Pensions

On August 17, 2016, the Second Circuit issued a decision in United States v. Stevenson, No. 14-1862-cr, holding that a state legislator convicted of bribery could be required to forfeit a portion of his pension fund as part of a sentence.  Former New York State Assemblyman Eric Stevenson was convicted in 2014 of conspiracy to commit honest services wire fraud, conspiracy to commit federal programs bribery and to violate the Travel Act, accepting bribes, and extortion under color of official right.  The charges arose out of an investigation finding that Stevenson took bribes of $22,000 from businessmen in the Bronx who ran an adult day care center in exchange for proposing legislation that would have imposed a moratorium on new facilities that would have provided competition.

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Second Circuit Clarifies Venue Requirements for Securities Fraud

On August 15, 2016, the Second Circuit issued a rare opinion on the subject of the sufficiency of evidence to establish venue in United States v. Lange, No. 14-2442-cr (Jacobs, Chin, Droney).  In this securities fraud and conspiracy case, the Court found there was sufficient evidence that the defendants committed a crime in the Eastern District of New York (“EDNY”) when they were aware of “cold call” lists including EDNY residents and where emails soliciting investment were sent to a Postal Inspector in Brooklyn.  This connection was sufficient even though the participants in the scheme operated out of Washington State and had little contact with EDNY. 

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District Court Lacks Jurisdiction to Expunge Valid Record of Conviction

In Jane Doe v. USA, 15-1967, the Second Circuit (Pooler, Livingston, Lohier) vacated the decision of the District Court (Gleeson, J.) granting the petitioner’s motion to expunge all records of her criminal conviction and holding that the District Court lacked subject matter jurisdiction to entertain the motion.

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Indictment Charging Violation of 18 U.S.C. § 641 Should Allege Value of Stolen Property

In United States v. Lee, 14-548, the Second Circuit (Kearse, Cabranes, Chin) held that the value of stolen property is an element of a felony offense under 18 U.S.C. § 641 and that, therefore, a grand jury indictment charging the defendant for a felony offense under that statute should have alleged the value of the property.  Nevertheless, the Second Circuit concluded that the failure to do so in this case was harmless error and affirmed the defendant’s conviction.  This case—which seems to be straight out of the files of the newest prosecutor in the SDNY General Crimes Unit—considers some weighty legal issues in the context of a straightforward offense.

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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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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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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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Second Circuit Grants Successive Habeas Petition Challenging Application of Career Offender Guideline’s Residual Clause

In Blow v. United States, 16-1530 (Katzmann, Wesley, Hall), the Court granted Michael Blow’s motion for leave to file a second or successive habeas petition in a short per curiam opinion.  Blow’s motion asked the Court to consider the application of the career offender sentencing enhancement.  That enhancement, Section 4B.1.1 of the U.S. Sentencing Guidelines, raises a defendant’s offense level if the defendant has two previous convictions for a “crime of violence.”  A “crime of violence” is defined, in part, as an offense that “otherwise involves conduct that presents a serious potential physical risk of injury to another.”  This “residual clause” is identical to language in the Armed Career Criminal Act (which provides for heightened punishment for firearm offenders with three prior convictions for a “violent felony”) declared unconstitutionally vague by Johnson v. United States, 135 S. Ct. 2251 (2015).

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Second Circuit Strikes Down Residual Clause of Career Offender Guideline

In United States v. Jones, 15-1518-cr (Walker, Calabresi, Hall), the Second Circuit, applying the Supreme Court’s holdings in Johnson v. United States, 559 U.S. 133 (2010) and Johnson v. United States, 134 S. Ct. 2551 (2015) (Johnson 2015), struck down the “residual clause” of the Career Offender Guideline as void for vagueness and held that a conviction for robbery in New York no longer constitutes a “crime of violence” in all circumstances.  This case reaffirms Second Circuit precedent recognizing the application of Johnson and Johnson 2015 to the sentencing guidelines, an issue that will be taken up by the Supreme Court this fall.

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