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Wednesday, January 30, 2013

Intended Loss Not Necessarily Potential Loss in Credit Card Fraud

In United States v. Diallo, ___ F.3d ____, 2013 WL 150125 (3d Cir., Jan. 15, 2013), the defendant pled guilty to possessing over 15 counterfeit credit cards. The government calculated an actual loss amount of $160,000. However, at sentencing, the government argued that the defendant should receive a 16-level enhancement, pursuant to U.S.S.G. § 2B1.1(b)(1), based upon the intended loss. Specifically, the government asserted that the counterfeit credit cards provided the defendant with access to a combined credit limit of $1.6 million. However, there was no evidence presented that the defendant actually knew the credit limits of the counterfeit cards. Nonetheless, the district court accepted the government’s argument and sentenced the defendant to 70 months, at the bottom of the 70-87 month guideline range. However, the Third Circuit refused to endorse a blanket rule that the intended loss amount should be the cards’s credit limit in every credit card fraud case. Citing United States v. Geevers, 226 F.3d 186 (3d Cir. 2000) and United States v. Titchell, 261 F.3d 348 (3d Cir. 2001), the court reiterated the general rule that the potential loss is not necessarily the intended loss in all fraud cases. Therefore, it would be error for the district court to presume that the aggregate credit limit alone is sufficient to constitute a prima facie case of intended loss in a credit card fraud case. Instead, the district court must conduct a "deeper analysis" to determine whether it is proper to equate potential loss with intended loss. After reviewing the district court’s analysis, the Third Circuit ruled that it was not sufficiently "deeper." The Third Circuit concluded that, based upon the district court’s limited analysis, it appeared that the district court simply equated potential loss with intended loss, which it had instructed against in Geevers and Titchell. The Third Circuit ultimately vacated the sentence and remanded the case for resentencing.

Tuesday, January 15, 2013

S.Ct.: Conspiracy SOL and Burden on Defense of Withdrawal

SUPREME COURT: Smith v. United States, --- S.Ct. ----, 2013 WL 85299 (U.S. Jan. 9, 2013). Held: A defendant bears the burden of proving a defense of withdrawal from a charged conspiracy. Allocating this burden to the defendant does not violate the Due Process Clause. Withdrawal does not negate an element of the conspiracy crimes charged here, but instead presupposes that the defendant committed the offense, thus the government has no constitutional duty to overcome the defense beyond a reasonable doubt.

Absence of Proof on Element of the Offense Overcomes Appellate Waiver

United States v. Castro, --- F.3d ----, 2013 WL 69214 (3d Cir. Jan. 08, 2013).  Former Philadelphia Police Department official Castro was indicted in connection with debt collection extortion schemes. Following a trial, a jury convicted Castro on one count of making a material false statement to federal agents (18 U.S.C. § 1001), acquitted him on one count of conspiracy to commit extortion (18 U.S.C. § 894) and hung on eight other counts. Castro then pled guilty to a single count of conspiracy to commit extortion (18 U.S.C. § 1951) and the government dismissed the remaining charges. The plea agreement contained an appellate waiver provision. At sentencing, the district court imposed 18 months imprisonment for the false statements count and 60 months concurrent for his plea for conspiracy to commit extortion.  Castro appealed, arguing that: (1) the false statement conviction should be vacated because when he lied to the FBI, denying he had received any money from the victim in repayment of a lost investment, in fact, he had not received any repayments from the victim because he had instead received money from the FBI in a sting operation, therefore his denial was not "knowing" or "false"; (2) his sentence was procedurally unreasonable because the district court denied the government's motion for the third acceptance of responsibility point under the sentencing guidelines, as the government’s discretion is entitled to deference; and (3) the 60–month sentence is procedurally and substantively unreasonable because the advisory range suggested a sentence of 33 to 41 months, the court did not adequately take into account evidence of his good character and failed to explain why an upward variance was necessary to fulfill the proper purposes of sentencing.

The Circuit first held that although Castro was convicted by a jury of the false statements count before entering into the plea and accepting the waiver, the appellate waiver covered his conviction for making material false statement to federal agents. The Court focused on the language of the waiver, "voluntarily and expressly waives all rights to appeal . . . any other matter relating to this prosecution," finding that this language clearly encompassed the earlier conviction on the false statement charge. The Court also found that the waiver was entered into knowingly.

But moving to the miscarriage of justice analysis, the Court agreed with Castro that he did not make a false statement when he stated that he received no payment from the victim. In evaluating for the first time a claim of miscarriage of justice based on insufficiency, the Court looked to the plain error context for guidance. Under the plain error standard, a "manifest miscarriage of justice" occurs where the record is "devoid of evidence pointing to guilt." Section 1001, the false statement statute, requires the accused knowingly and willfully make a material false statement in a federal matter. Because Castro’s statement that he did not receive any payments from the victim was actually, if unintentionally, true (because it was FBI sting money), the government could not establish that he made a statement that was untrue. The defense of literal truth applies. The Court rejected the government’s suggestion of a "sting operation exception," because there is simply is no exception in the statute. The court concludes that the complete failure of proof on this element meets the miscarriage of justice standard, requiring reversal on the false statements count.

With respect to Castro’s argument that the district court's rejection of the government's motion for the third acceptance point was error, the Court found the issue covered by the appellate waiver and declined to reach the merits. Finally, the Court’s reversal of the false statements count requires remand for resentencing and the Court did not need to otherwise reach the reasonableness of the sentence.

Monday, January 14, 2013

Collateral Consequences Not Presumed on SR Revocation

United States v. Huff, --- F.3d ----, 2013 WL 93165 (3d Cir. Jan. 09, 2013). The district court revoked Huff's supervised release and sentenced her to ten months’ imprisonment with no supervised release to follow. Huff was released from custody while her appeal was pending. The Circuit held that the presumption of collateral consequences did not apply to a defendant's challenge to a revocation of supervised release. Because Huff's unconditional release from prison rendered the case moot, the appeal was dismissed for lack of jurisdiction.

Monday, January 07, 2013

Under the Modified Categorical Approach, Sentencing Courts May Only Consider the Charging Documents and the Jury Instructions When Determining if a State Offense is a Predicate Offense Under ACCA.

    After pleading guilty to violating 18 U.S.C. § 922(g)(1), Dantey Tucker was sentenced to fifteen years imprisonment based on the sentencing enhancement set forth in the Armed Career Criminal Act (“ACCA”), 18 U.S.C. § 924(e).  His classification as an armed career offender was based on one prior state conviction for a violent felony, a conviction for possession of a controlled substance with intent to deliver in violation of 35 PA. STAT. ANN. § 780-113(a)(30), and a conviction for conspiracy to sell drugs in violation of 18 PA. CONST. ANN. §903.  Only the district court’s classification of the prior drug offenses as serious drug offenses was in dispute at sentencing and on appeal.  Specifically, Tucker argued that the district court erred in finding that his two state drug convictions were serious drug offenses within the meaning of the ACCA.  Applying the  “modified categorical approach,” in United States v. Tucker, No 12-1482 (3d Cir., December 21, 2012), the Third Circuit held that the conspiracy charge was not a serious drug offense, but the possession conviction was a serious drug offense because it was based on a finding that the offense involved cocaine. 

    At sentencing, Tucker had argued neither of his prior drug convictions required a factual finding as to what type of drug was involved and therefore did not trigger the ACCA enhancement.  Since the language of the applicable state statutes was broad and not equivalent to a federal predicate offense, Supreme Court precedent -Taylor v. United States, 495 U.S. 575 (1990) and Shepard v. United States, 544 U.S. 13 (2005)- required the sentencing court to apply the modified categorical approach.  This approach allows for a limited inquiry into the elements of an offense that a jury is required to find in order to convict a defendant. In conducting such a review, courts are limited to looking at the charging documents and the jury instructions.    

    The charging document for Tucker’s conviction for possession with intent to distribute (§ 780-113(a)(30)) explicitly listed cocaine as the controlled substance.  The conviction specifically required a finding that he possessed cocaine.  Therefore this prior qualified as a serious drug offense.  Also, since the district court’s finding was consistent with Supreme Court precedent and the modified categorical approach, the Third Circuit rejected Tucker’s argument that the district court’s determination that this was serious drug offense conflicted with the holding in Apprendi v. New Jersey, 530 U.S. 466 (2000), and the Sixth Amendment. 
                                               
    However, it was unclear if Tucker’s conviction for conspiracy to sell drugs (§903) was for conspiracy to sell cocaine (which would trigger the ACCA) or conspiracy to sell marijuana (which would not trigger the enhancement).  Applying the modified categorical approach, the Third Circuit reversed the sentencing court’s finding that this prior conviction qualified as a serious drug offense, because neither the Bill of Information nor the jury instructions required the jury to find that the offense involved a conspiracy to sell cocaine in order to convict Tucker.  In fact, the type of drug was never specified in the charging document or jury instructions which simply referred to a “conspiracy to sell drugs.”  The appellate court further found that the district court erred in considering transcripts from the charging conference and sentence hearing, which fell outside what the court was allowed to consider under Taylor.  Also, although the circuit court agreed with the government that the jury most likely convicted Tucker for conspiracy to sell cocaine rather than marijuana, the modified categorical approach does not allow for an enhancement based on speculation.  As such, this prior was not a predicate offense for ACCA enhancement and the case was remanded for sentencing.