Articles Posted in White Collar Crime

photo_55295_20151127-300x236Your phone constantly tracks and records its location and transmits the information to your wireless carrier. Most phone companies keep that data — known as “cell site location information” — for up to five years. And until last week, it was pretty much available to the government for the asking.

Think for a moment what that means. If you went to a psychiatrist, a divorce lawyer, an AA meeting, a yoga class, or a 1980s dance party in the last five years, any policeman in the country could find out about it just by asking the phone company where your phone was at a given moment in time. It is as though the government placed permanent tracking devices on all of us. True, under federal law, the police had to ask for a court order under the Stored Communications Act based on a showing that the cell site data was “relevant and material to an ongoing investigation.” But that is a ridiculously low standard: pretty much anything an investigator wants to see can be tied to an investigation one way or another. Orders under 18 U.S.C. Section 2703(d) were, in practice, routinely granted by both state and federal courts.

All that changed last Friday when a fractured Supreme Court ruled in Carpenter v. U.S. that grabbing cell site data constitutes a search under the Fourth Amendment. That means that use of cell site data must be reasonable. For police investigations, a search is only reasonable if it is based on a search warrant supported by probable cause. Probable cause, the Court explained, is something more than the low standard in Sec. 2703(d): “relevant and material” just means cell site evidence “might be pertinent to an ongoing investigation,” whereas probable cause requires a “quantum of individualized suspicion” before police can start rummaging. So a Section 2703(d) subpoena is not enough to support obtaining cell site data. Mr. Carpenter’s conviction, based in part on cell site location data showing his phone was near several stores at the time they were robbed, was thrown out.

https://www.zmolaw.com/news/wp-content/uploads/2018/06/Screen-Shot-2018-06-21-at-9.47.54-AM-300x146.pngOn Tuesday, the New York State Assembly passed A. 5285-C, the State Commission on Prosecutorial Conduct bill that passed the Senate in a surprise vote last week. Now it’s up to Gov. Andrew Cuomo to sign it into law. Groups like Human Rights Watch and the New York State Association of Criminal Defense Lawyers will be pushing him to do just that, which would create the country’s only investigative body exclusively investigating misconduct by prosecutors.

At the same time, some district attorneys around the state are likely to lobby to stop the bill. They will complain that a commission would have too much power, would dampen their ability to enforce the law fairly, and could interfere with ongoing prosecutions. They will see a violation of separation-of-powers and uncabined discretion vested in unelected commissioners including criminal defense lawyers bent on obstructing the work of prosecutors. Litigation will follow.

So what does the proposed law actually say? The full text is available here or by clicking the graphic above. In fact, the proposal is modest. The commission will be made up of volunteer judges, prosecutors and defense lawyers appointed by the governor and the legislature. It may investigate virtually any complaint against a prosecutor. It will have subpoena power. Its business will generally be conducted in public. But it won’t have any remedy with teeth: at the end of its investigation, all it can do is refer its findings to the governor or an appropriate court. It would be up to the governor or court to take action, removing a prosecutor for cause in appropriate circumstances. In other words, all the commission can do is serve as a conduit for information — information that an unscrupulous prosecutor’s colleagues have an ethical obligation to report in any event.

Last week, President Trump signed legislation that expands criminal liability for people who own or operate online platforms that “promote or facilitate” not only sex trafficking, but virtually any consensual sex work. The new law, which amends Section 230 of the Communications Decency Act (“CDA”), is commonly referred to as the “Allow States and Victims to Fight Online Sex Trafficking Act (“FOSTA”), or by its Senate name, the “Stop Enabling Sex Traffickers Act (SESTA).”

The FOSTA-SESTA amendment to the CDA is fairly short, but raises questions about how it will be enforced by prosecutors and plaintiffs’ attorneys granted a private right of action under the law. Under the new law:

  1. Anyone who “owns, manages, or operates” an online platform or “conspires or attempts to do

Former Congressman Anthony Weiner was just sentenced to 21 months in prison for sexting with a 15-year-old. At sentencing, his lawyer asked that he be sent to FCI Schuylkill in Pennsylvania. That seems to have been a mistake: Schuylkill is a medium-security prison, filled with violent offenders and replete with restrictive rules. Schuylkill has a satellite camp, but as a sex offender, Weiner is not eligible (he gets the “Sex Offender Public Safety Factor” and therefore must go to a secure facility). There are low-security federal prisons that would be far more pleasant and conducive to the year-and-a-half or so of introspective atonement that Weiner will endure while he waits to go to a halfway house. The New York Times wrote about Weiner’s placement in federal prison, but, unfortunately, just about everything in their story was wrong.

The bottom line is that “designation” to a particular federal prison is a complicated process with far-reaching consequences. Experiences in federal prison vary widely. Camps like the ones at Schuylkill and Otisville are unsecured and generally not unpleasant places to be. Contrast that with the “ADX” at Florence, Colorado, which is reserved for the most dangerous criminals in the United States and drives many of its residents mad. The Bureau of Prisons decides where you will go in the weeks after sentencing at a central facility in Grand Prairie, Texas. They rely on the Presentence Investigation Report (known as the PSR) for facts about you and plug those into a formula that determines your security level. It is essential that the information in the PSR is accurate as any mistake could change which facility you end up in. There is a small industry of experts who keep up with the daily changes in conditions within the Bureau of Prisons and can advocate for a particular designation. The process is laid out in this 108-page BOP policy.

The New York Times missed most of this in talking about Weiner, whose situation is not too different from many first-time federal offenders, including people convicted of child pornography. Being a former congressman and pledging himself to “a rigorous curriculum of rehabilitation and therapy” probably make no difference at all. Whatever his lawyer may have believed (and it does not seem like they thought about it beforehand), there is zero chance he would have been assigned to a prison in New York City: the three federal jails in New York are reserved for inmates who are awaiting sentencing or witnesses for the government, plus a small cadre of trusted inmates near the end of their terms who work in the local jails.

Two huge illicit markets operating on the Dark Web, AlphaBay and Hansa, were shut down today after being infiltrated by the government for the past several weeks. The sites had claimed up to 200,000 users, 40,000 vendors and 350,000 listings for illegal drugs, stolen credit card information, hacked computer code, counterfeit goods and other illegal items. A Canadian citizen based in Thailand was arrested last month in connection with AlphaBay.

The Dark Web consists of websites accessible only though the Tor network, an easy-to-use, technically sophisticated way to communicate anonymously over the internet. The technology, much to the dismay of governments around the world, has become popular with political dissidents as well as criminals hiding their activities from law enforcement. The Dark Web is home to numerous high-traffic online marketplaces with few limits on what can be bought or sold. These businesses conduct transactions in BitCoin, Ethereum and other cryptocurrencies.

According to the Department of Justice press releasee, AlphaBay users bought and sold “deadly illegal drugs, stolen and fraudulent identification documents and access devices, counterfeit goods, malware and other computer hacking tools, firearms, and toxic chemicals throughout the world.”

The conviction of Ross Ulbricht, the mastermind behind the Silk Road marketplace on the Dark Web, has given the Second Circuit a chance to explore how to apply the Fourth Amendment to the search and seizure of stored digital information.

The government seized and searched Mr. Ulbricht’s laptop. Ulbricht, backed by the National Association of Criminal Defense Lawyers, argued on appeal that the search violated what is known as the “particularity” requirement of the Fourth Amendment. Under the Fourth Amendment, all warrants must be supported by probable cause and “particularly describ[e] the place to be searched, and the persons or things to be seized.” The Framers adopted the requirement that a warrant describe in a particular manner both the place to be searched and what the government intends to seize as evidence of a crime to prevent “general warrants.” A general warrant is a warrant that grants government agents discretion to search any and all property owned by a criminal suspect in an unrestrained and exploratory manner. By contrast, the Fourth Amendment demands that agents tell the court, before searching a suspect’s property, where they plan to search, what they plan to seize, and how the place to be searched and the things to be seized relate to the charged conduct.

Systems with digital information present special challenges for agents attempting to describe the target of their search and for courts attempting to fashion warrants that don’t authorize agents to rummage through wholly irrelevant digital files. The appeals court in U.S. v. Ulbricht recognized that hard drives typically contain a wide range of highly sensitive information, such as “tax records, diaries, personal photographs, electronic books, electronic media, and medical data, records of internet searches, [and] banking and shopping information.” Second, as a practical matter, it is difficult—if not impossible in most cases—for the government to separate sensitive, private, or irrelevant information from information that is targeted before they conduct an examination of a digital device. Often, agents must seize a suspect’s entire computer system, or gain access to a suspect’s entire email account, before they can determine if it contains evidence relevant to their investigation.

Adam Elewa, Esq.We are delighted to announce that attorney Adam Elewa has joined the Law Office of Zachary Margulis-Ohnuma as an associate. Mr. Elewa is a graduate of Fordham Law School. His career has focused on defending against accusations of technology- and computer-related crimes including charges of computer hacking, child pornography and wire fraud. He has represented clients in the First, Second, Fifth, Sixth, and Ninth Circuits.

“Technology affects virtually every case we defend,” said principal attorney Zachary Margulis-Ohnuma. “Adam’s experience expands our capacity to fight the most difficult, sophisticated cases involving computers, cell phones, social media and internet communications.”

Over the past two years, Mr. Elewa represented journalist Matthew Keys in connection with his alleged role in defacing the Los Angeles Times website, individuals accused of being associated with Anonymous (the “hacktivist” collective), and an information technology professional accused of damaging his employer’s computer network.

In general, federal authorities interview people after their arrests without recording. We advise our clients to invoke their Miranda rights and refuse to make any statements until consulting with an attorney. Experience shows that statements made by defendants when they are first arrested — they are frightened, their guard is down, they don’t know the evidence against them — make matters worse. What’s more, the “statement” is almost never recorded when taken by the FBI, the DEA or other Department of Justice agencies (or by the New York City Police Department). That makes it difficult to rebut what the agent claims the defendant said. The defendant has no chance to explain or elaborate if the agent writes down something wrong.

That’s about to change. Effective in July, the Department of Justice will generally require agents to record — in full — statements taken while a person is in custody. Defendants are still better off demanding a lawyer but at least there will be a record of exactly what was said. Recording will help both sides, so long as they play fair: defendants will know where they stand and not be forced to call federal agents liars if there is disagreement over what was said, the government will have an accurate record and not have to defend against a charge that the agents wrote down the statement wrong. Both sides will be able to show the full context of the statement, which will assist judges and juries at reaching fair and accurate verdicts. When agents fail to record, they will have to explain why they did not follow the policy.

But the new recording policy only applies to Department of Justice agencies: the FBI, the DEA, the Bureau of Alcohol, Tobacco and Firearms, and the U.S. Marshals. It does not apply to agents from the Department of Homeland Security or the CIA. That means that unrecorded statements may still be used in large numbers of drug smuggling and child pornography cases, which are frequently investigated by DHS. At the same time, skilled trial attorneys will have more ammunition to show that Homeland Security’s failure to record is out of step with modern law enforcement practice and, in some cases, used to cover up manipulative interrogations that lead to false confessions.

The Law Office of Zachary Margulis-Ohnuma is delighted to announce that Sharlene Morris, Esq. has joined the firm as an associate attorney. Ms. Morris is a graduate of the George Washington University School of Law, where she was a member of the The George Washington Journal of Energy and Environmental Law, and a leader of both the Gulf Recovery Network and the Human Rights Law Society. She has experience in researching, writing and advocating for clients in criminal cases, family matters and environmental law. Ms. Morris adds to our office’s capacity in our core practice areas: defending federal criminal cases, prosecuting novel appeals and advocating for individuals injured by unlawful government conduct. Her work is characterized by incisive analysis, sensitivity to clients’ needs and attention to details that affect the outcomes in cases that change people’s lives.

The story of Zachary Warren in yesterday’s New York Times is a cautionary tale of modern complex investigations. Mr. Warren is a 29-year-old former federal appellate law clerk and graduate of Georgetown Law School. After graduating from Stanford he knew he wanted to go to law school. But first he took a job at the prestigious white-shoe firm of Dewey & LeBoeuf. He started as a paralegal helping partners collect debts from clients. He was later promoted to “client relations manager.” Dewey imploded in 2012 and its leaders have been indicted over a series of financial missteps including a 2010 bond offering.

Early last year, Zach got a call from the Manhattan District Attorney’s office and he answered questions that he thought were mere background to the investigation, since he had left the firm before the bond offering. He did not hire an attorney to assist him. In October, the SEC reached out to Zach and asked to set up a meeting. They did not issue a subpoena; Zach was under no obligation to comply. But he was eager to help and apparently had no clue he was a target himself. Again, he did not hire a lawyer, even after the SEC called back and told him an assistant district attorney would sit in and, according to government sources, even after he was told it would be a good idea.

As the Times reports it, the November 15 interview was a disaster: the ADA took over from the SEC and became increasingly accusatory and belligerent when Zach could not recall conversations or answer questions about documents he had not seen in years. He was accused of lying and, worse, arrogance. He was indicted four months later, arrested and released on a $200,000 bond.

Super Lawyers
Top 100 Trial Lawyers
NACDL
Super Lawyers
The National Trial Lawyers
Contact Information