Sunday, February 28, 2021


Failure to group certain counts as required by the Sentencing Guidelines is plain error requiring resentencing even if the sentencing court imposed a downward variance


In United States v. Ahuirre-Miron, No 19-3134 (3d Cir. 2/23/2021),

The defendant pled guilty to five child-pornography crimes: three counts of production, in violation of 18 U.S.C. § 2251(a), (e); one count of receipt, in violation of 18 U.S.C. § 2252(a)(2), (b)(1); and one count of possession, in violation of 18 U.S.C. § 2252(a)(4)(B), (b)(2). At sentencing, without objection, the District Court adopted the P.S.R.’s calculation of the Sentencing Guidelines. After it imposed a downward variance to offense level 42, reducing the Guidelines sentence from 360 months to life to 360 months, the District Court imposed a sentence of 360 months.


The Sentencing Guidelines require that the production counts be grouped with the receipt and possession counts according to U.S.S.G. § 3D1.2(c)— all counts involving substantially the same harm must be grouped. Counts involving “substantially the same harm” when one of the counts embodies conduct treated as a specific offense characteristic in, or other adjustments to, the guideline applicable to another of the counts must be grouped for calculation purposes. A “pattern enhancement” is imposed under the Sentencing Guidelines under U.S.S.G. §2G2.2(b)(5) if the offender engages in a pattern of activity involving the sexual abuse or exploitation of a minor. If the District Court had properly grouped the production counts when computing the offense level, the offense level would have been 42 rather than 43.


Third Circuit precedent, United States v Ketcham, 80 F.3d 789, 794 (3d Cir. 1996) required grouping of the production counts in this case. The panel rejected the government’s argument that Ketchum’sholding about grouping was dicta.


Conducting a plain-error analysis, the panel looked to the holding in Molina-Martinez v. United States, 136 S.Ct. 1338, 1345 (2016) that regardless of the ultimate sentence, being sentenced under the wrong guidelines range satisfies the third prong of plain-error review. As the defendant met the first two prongs of plain-error review— that there was an error and it was plain— resentencing was ordered.


Congrats to Abigail Horn & Brett Swetzer of the EDPa Federal Defenders for a nice win.


N.B. has great resources for all sorts of sentencing issues and should be consulted whenever reviewing a P.S.R.’s sentencing calculations. The United States Sentencing Commission website also allows the download of the current Sentencing Guidelines and updates. It also offers a Guidelines calculator, which, when used in tandem with the materials, helps untangle federal criminal law’s version of the uncertainty principle






Tuesday, February 09, 2021

District court erred by: (1) failing to inquire into reasons for defendant's dissatisfaction with appointed counsel; (2) failing to make independent determination regarding consulation between defendant and appointed counsel about PSR; (3) imposing certain conditions of supervised release; and imposing special assessment under JVTA

 Defendant Charles Senke was convicted after trial for attempted sex offenses involving a minor. He raised four objections on appeal. The Third Circuit affirmed his convictions, but vacated and remanded for further proceedings surrounding sentencing. United States v. Senke, __ F.3d __, 2021 WL 244056 (3d Cir. Jan. 25, 2021).

(1) Although Senke did not specifically request substitute counsel in his pro se pretrial motion complaining about his attorney, the district court was required to inquire into reasons for defendant's dissatisfaction with his appointed attorney. Senke's communication to district court raised serious issues, including that attorney was not preparing for trial or reviewing evidence with defendant, attorney brought strained relationship to district court's attention at pretrial conference that defendant did not attend, explaining that conflict stemmed from his refusal to file additional pretrial motions and defendant's insistence that he do so, and district court had no good reason to believe that communication issues were resolved. However, Senke's claim did not constitute one of structural error requiring per se reversal. He could not assert he was deprived of counsel of choice because he had appointed counsel. He also was not claiming that he had been deprived of his right to represent himself. Instead, he claimed he was deprived of ineffective assistance of counsel. Acting in accordance with its general procedure, the Third Circuit declined to entertain Senke's claim of ineffective assistance of counsel on direct appeal where Senke did not attempt to show prejudice and district court had not yet evaluated the matter. Instead, it upheld Senke's conviction without prejudice to his ability to bring an ineffective assistance of counsel claim in a 28 U.S.C. § 2255 proceeding. 

(2) District court plainly erred in failing to independently determine that defendant had opportunity to discuss presentence investigation report (PSR) with counsel as required by Fed. R. Crim. P. 32(i)(1)(A). Though counsel submitted sentencing memorandum and defendant separately submitted objections to PSR, indicating that both had read the PSR, the district court did not verbally ask defendant if he read and discussed PSR with his attorneys, sentencing memorandum did not state that defendant and counsel discussed the PSR, counsel submitted his objection to probation officer before receiving defendant's objections, and counsel only mentioned his own objection at sentencing and not defendant's objections. Despite the error, Senke suffered no prejudice as would warrant reversal of sentence. Though Senke asserted that, if he had discussed the PSR with counsel, he could have challenged the recommendation of certain special conditions of supervised release and recommendation of special assessment fee, neither of those matters could have affected Senke's criminal history category, nor his applicable Sentencing Guidelines range, and Senke was sentenced to the statutory mandatory minimum.

 (3) The Third Circuit vacated 5 separate conditions of supervised release prohibiting Senke from possessing or using computers or other electronic communications or data storage devices or media, and requiring him to obtain permission from his probation officer to use the internet, to have monitoring software installed on his computer, and to submit to searches of his electronic devices. The Court found the conditions were not sufficiently tailored to goal of restricting internet and computer use to keep Senke from preying on children. Instead, the restrictions prohibited Senke from participating in all sorts of activities, while doing nothing to further public safety. In a dissenting opinion, Judge McKee admonished district court judges to stop imposing "knee-jerk and overly broad restrictions" on computer and internet usage despite repeated admonitions against them. 

(4) Finally, the Third Circuit reversed imposition of a $10,000 special assessment under the Justice for Victims of Trafficking Act of 2015 (JVTA) based on a violation of the ex post facto clause. All of Senke's convictions were based on offenses committed prior to JVTA's 2015 enactment.

Despite equitable concerns, property was not subject to criminal forfeiture where third party's interest in forfeited property was superior to defendant's interest

Defendant Lucas was convicted of wire fraud and related offenses for attempting to take control of Burke Farm. Lucas consented to forfeiture of Burke Farm because it was purchased with proceeds of his fraud. Diamond Developers, a third party company, interceded in the forfeiture proceedings, arguing that it held a superior interest in Burke Farm because Diamond Developers owned the farm prior to Lucas's crimes. Diamond Developers acquired Burke Farm in 2004. Lucas submitted a fraudulent loan application to acquire Diamond Developers in 2009. He fraudulently obtained a mortgage on the farm in February 2010. Lucas, his wife, and father-in-law acquired Diamond Developers one month later.  The District Court granted the forfeiture order over Diamond Developers' objection.

 In United States v. Lucas, __ F.3d __, 2021 WL 193073 (3d Cir. Jan. 20, 2021), the Third Circuit reversed the District Court's decision, finding that if third party's interest in forfeited property, at time of criminal acts, was superior to criminal defendant's interest—or if third party had interest and defendant did not—then third party's right outweighs interest that government acquires when it steps into defendant's shoes at time of offenses. While the Court recognized the government's concerns about the equities of the case, the plain language of the statute controlled. The Court also noted that the government could have sought criminal forfeiture of Lucas's interest in Diamond Developers and civil forfeiture of his wife and father-in-law's interests. Because the government did not follow the rules or the plain language of the forfeiture statute, it was not entitled to confiscate the property.

Heightened standard of proof for "willfully" element does not apply to every charge brought under the Federal Election Commission Act (FECA)

 Defendant Smukler was convicted on multiple charges of fraud and false statements under the Federal Election Commission Act (FECA). On appeal, United States v. Smukler, __ F.3d __, 2021 WL 245262 (Jan. 26, 2021), Smukler argued that the district court erred in not applying a heightened "willfully" standard to his charges under FECA. The Third Circuit noted that "willfully" has at least three levels of interpretation: (1) defendant acted intentionally, knowingly, or voluntarily, as distinguished from accidentally; (2) defendant acted not merely voluntarily, but with a bad purpose, that is, with knowledge that his conduct was, in some general sense, unlawful; and (3) defendant actually knew of the specific law prohibiting the conduct. The middle level of willfully - defendant acted with bad purpose - operates in most criminal cases. In some rare instances, however, involving a highly technical statute or complex statute, the highest level of willfully - defendant actually knew of specific law prohibiting the conduct - is required for conviction.

Relying on United States v. Curran, 20 F.3d 560 (3d Cir. 1994), the Court agreed that the heightened standard of willfully applied to prosecutions under the aiding and abetting (18 U.S.C. § 2) and false statements (18 U.S.C. § 1001) statutes in the federal election law context given that election offenses are rarely prosecuted in tandem under these two statutes. But the Court found no similar level of rarity or complexity in substantive charges brought under FECA. It found those rules to be reasonably straightforward, written in common terms, intuitive, and less complex than the anti-structuring or tax law cases where the heightened standard for willfully had previously been applied. Accordingly, and consistent with precedent, the Third Circuit applied the ordinary reading of willfully to Smukler's substantive offenses under FECA.  

Thursday, January 21, 2021

Convictions vacated against bank executives: government must prove a statement false under each objectively reasonable interpretation of an ambiguous reporting requirement

United States v. Harra, --- F.3d ---, 2021 WL 97446, Appeal Nos. 19-1105, 19-1136, 19-1190, 19-1237 (Jan. 12, 2021);

Wilmington Trust financed commercial real estate/construction projects. Extensions were common: the loan documents reserved its right to “renew or extend (repeatedly and for any length of time) this loan . . . without the consent of or notice to anyone.” Wilmington called this the “waiver process” and its internal policy did not classify loans in the “waiver process” as past due if the loans were in the process of renewal and interest payments were current. Even though regulatory agencies required Wilmington to report loans that were “contractually past due,” Wilmington excluded loans in the “waiver process” from those it reported as “past due” to the SEC and the Federal Reserve. Around 2009, these commercial loans were a large feature of Wilmington’s portfolio and represented over $300 million in loans. The defendant bank executives argued that under a reasonable interpretation of the reporting requirements, they properly excluded these loans from the “past due” classification. The District Court denied their requests to introduce evidence concerning or instruct the jury about that alternative interpretation. The jury convicted on all counts, including conspiracy to defraud the United States, commit securities fraud, and make false statements to regulators, 18 U.S.C. § 371; securities fraud, 18 U.S.C. § 1348; making false statements to the SEC and Federal Reserve, 18 U.S.C. § 1001 and 15 U.S.C. § 78m; and falsely certifying financial reports, 18 U.S.C. § 1350.

The Third Circuit found that, to prove falsity beyond a reasonable doubt, the government must prove a statement false under each objectively reasonable interpretation of an ambiguous reporting requirement. That is, the government must prove either (1) that its interpretation of the reporting requirement is the only objectively reasonable interpretation or (2) that the defendant’s statement was also false under the alternative, objectively reasonable interpretation. To hold otherwise would violate Due Process and the government’s burden to prove each element: because falsity and knowledge are distinct elements, the government must prove a statement was false beyond a reasonable doubt, regardless of the defendant’s subjective intent to lie.

Under this standard, the evidence was insufficient on the false statements convictions and the Court entered a judgment of acquittal. The Court found sufficient evidence of an alternative theory of liability on the conspiracy and securities fraud convictions, improper short-term mass waivers, but the error as to the false statements theory of liability infected all counts and was not harmless and so the conspiracy and securities fraud convictions were vacated and remanded for retrial.











Enticement of a minor and travel case: sufficient evidence, no misstatement of law, no entrapment, no plain error in sentencing enhancement for misrepresenting age and sexual orientation

United States v. Davis, --- F.3d ----, 2021 WL 97427, Appeal No. 19-1696 (3d Cir. Jan. 12, 2021);

Davis answered a Craigslist ad supposedly about an 18-year old “Wild Child” and then chatted over an eight-day period with an undercover officer acting as a 14-year old minor about sex and other things. Davis ultimately drove from New York to meet the minor in a parking lot in Pennsylvania, bringing condoms with him. He was charged with attempting to entice a minor to engage in sexual conduct, 18 U.S.C. § 2422(b), and for traveling with intent to engage in illicit sexual conduct, 18 U.S.C. § 2423(b). His defenses were that he thought he was role-playing with an adult and that he was entrapped. He was convicted by a jury on both counts and sentenced to 127 months imprisonment. The Third Circuit rejected four points on appeal.

The evidence was sufficient: Attempt requires proof of a requisite intent and a substantial step. Although sometimes a substantial step may supply unequivocal evidence of criminal intent, it need not always do so. If the government presents evidence (need not be unequivocal) of criminal intent independent of a defendant’s substantial step, then the substantial step need only corroborate criminal intent. Davis’s post-arrest confession to knowing the minor’s age and their text communications are each evidence of criminal intent independent of that demonstrated by his substantial steps (travel to the prearranged meeting place and possession of condoms).  

The prosecutor did not misstate the law in closing: The government did not err in arguing that post-enticement acts like travel or the possession of condoms could be a substantial step for enticement of a minor. The substantial step inquiry corroborates criminal intent and establishes that a defendant went beyond mere planning. The substantial step must relate to but need not be the exact conduct criminalized by the statute. Here travel and condom possession related to the enticing communications because they demonstrated the communications were not “all hot air.”

Davis was not legally entrapped: The Court found Davis was not entrapped as a matter of law. To disprove the affirmative defense of entrapment, the government can show predisposition by “a willingness to commit the crime for which he is charged as evidenced by the accused’s ready response to the inducement.” The Court found the chats showed that when Davis discovered he was corresponding with a 14-year-old who posted a personals ad for sex, his “ready response” acknowledged her age and asked if she wanted to meet that day. Also, his reluctance to engage in sexually explicit conversation may be evidence of a misguided attempt to avoid incriminating himself, not necessarily evidence of his non-predisposition to violate § 2422(b). 

The sentencing enhancement was not plain error: The Court ruled it was not plain error to apply a two-level sentencing enhancement for misrepresenting age and sexual orientation to influence a minor to engage in sexual conduct. See U.S.S.G. § 2G1.3(b)(2)(A) (enhancement when conduct involves knowing misrepresentation of a participant’s identity to . . . induce the travel of a minor to engage in prohibited sexual conduct). It did not matter that Davis ultimately corrected the misrepresentation of his age if he lied about it in an effort to make the minor feel comfortable. His objection to the enhancement based on a lie about sexual orientation failed under plain error because the government’s theory was reasonable: he misrepresented his sexual orientation to assure the minor he was not a sexual threat in his continued effort to meet her.

    Failure to group certain counts as required by the Sentencing Guidelines is plain error requiring resentencing even if the sentencing co...