Articles Posted in White Collar Crime

For centuries, confessions have been considered a reliable form of proof against the accused — who would confess to a crime they did not commit? But DNA evidence has begun to demonstrate that false confessions in the United States are more common than previously believed. One reason is that the courts have repeatedly blessed confessions extracted after the police lie to the suspect.

But deception has limits. On Tuesday, New York State’s highest court undertook a detailed examination of when lying to defendants goes too far.  They had a lot to work with: in the case of People v. Thomas, there were about nine hours of video recording. Troy detectives, who did not know the video was running, repeatedly lied to the suspect, whose baby son had been rushed to the hospital. They told him, for example, they believed the child’s injuries were “an accident,” that they needed to know what happened to save the child — who was already dead — in the hospital, and that they would arrest his wife if he did not confess. Ultimately, he never stopped talking and asked for a lawyer. Instead, he complied with their demands, even falsely acting out on the video a scenario in which he used a phonebook to show how he threw the child on the bed. Ultimately, he was charged and convicted for murdering his baby, and the conviction was upheld in the appellate division. In fact, testimony at trial appeared to show, the child died of sepsis secondary to an infection, not from being shaken.

The New York Court of Appeals heard argument held yesterday in Thomas and a similar case, People v. Aveni. But in the Aveni case the admitted lies were more modest: police got the defendant to tell them that he injected his girlfriend with heroin and gave her a Xanax by telling him that doctors needed to know exactly what drugs were in her system. She was already dead at the time.

Does the federal mail fraud statute criminalize cheating on a state driving test, where the “mailing” is incidental to the cheating and a state law specifically addresses cheating on a DMV test? No, writes Judge Glasser of the U.S. District Court for the Eastern District of New York. In United States v. Ng, the defendants operated a driving school with lots of Chinese speaking students.  They admitted to helping students who were unable to read English cheat on the written portion of the DMV commercial drivers license test. After the person passes the test, DMV sends out a drivers license by U.S. mail.

The federal mail fraud law forbids any “scheme or artifice to defraud” but only when the defendant places something in the mail or causes something to be mailed. As Judge Glasser pointed out, the Supreme Court has warned that the law should not be read “to place under federal superintendence a vast array of conduct traditionally policed by the States.” The mailing of the licenses by DMV, Judge Glasser held, just was not enough — the fraud was complete once the student passed the test. “Putting the envelope in a mail box did not make the postal service an accomplice of the defendants,” Judge Glasser observed. As a result, the defendants had not committed a federal crime. The full decision can be found here.

Judge Glasser’s decision has serious repercussions for the defendants, a married couple who were facing up to 20 years in prison and a federal felony conviction.  The prosecution was asking to lock them away for years. But the state crime is only a misdemeanor, punishable by a maximum of one year in jail.

We advocate for just sentences for our clients convicted of crimes. One way sentences can be unfair in the federal system is that they can be based on provisions in the United States Sentencing Guidelines which are themselves fundamentally flawed because they were promulgated without regard to national experience or empirical data. Lawyers need to “deconstruct” these guidelines for sentencing judges, showing where they came from and why they are inappropriate. Some courts have come out and criticized the guidelines covering narcotics and child pornography, calling them “born broken” and “eccentric.” What about Section 2B1.1, the economic crimes guidelines that govern white collar cases?

A new concurrence by Judge Stefan Underhill sitting by designation in the Second Circuit Court of Appeals deconstructs the fraud guidelines, describing how they came to be and why they are so unfair, especially in high-loss cases.  As described by Judge Underhill, sentences for fraud have been increased three times: first in response to the savings-and-loan crisis, then as part of a consolidation of economic crimes, and most recently in response to Sarbanes-Oxley which itself was a response to corporate mega-scandals.  “The history of bracket inflation directed by Congress renders the loss guideline fundamentally flawed, especially as loss amounts climb.” Judge Underhill writes. “The higher the loss amount, the more distorted is the guideline’s advice to sentencing judges.”

In advocating for lower sentences for clients over the past few years, we have been asking judges to deconstruct guidelines in cases involving drugs, fraud and child pornography — the majority of the federal docket. Many sentencing courts get it, dramatically departing from the guidelines in appropriate cases. The Second Circuit adopted the deconstruction approach for child pornography offenses in the Dorvee case. Judge Underhill’s opinion, albeit a concurrence, takes the appeals court one step closer to appreciating the systematic irrationality of the guidelines applicable in white collar cases.

In a letter responding to the U.S. Sentencing Commission’s call for comments on its priorities for the upcoming year, Mark Allenbaugh, the chair of the Sentencing Committee of the National Association of Criminal Defense Lawyers, urged the Commission to focus on the guidelines covering fraud and child pornography, two crimes that are frequently prosecuted by the Department of Justice.  As to fraud, NACDL called for a complete overhaul of Guideline 2B1.1 as a way to address the problems created by the loss amount table and “factor creep” — the accrual of multiple enhancements leading to absurdly long Guidelines sentences in many white-collar criminal cases.  As to child pornography, NACDL recommended that the Commission seek emergency amendment authority from Congress to delete Guideline 2G2.2 in light of the Commission’s recent report on child pornography sentencing. The letter noted that the child pornography guidelines are given minimal weight by judges and cause more unwarranted disparity than consistency in child pornography sentencing.  The full letter is available here.

Pretty much every defendant arrested by the feds — the Drug Enforcement Administration, the Department of Homeland Security or the FBI — is subjected to a cheek swab.  The agents politely and painlessly take a little DNA from your cheek with a q-tip as you are being fingerprinted, photographed and “processed.”  You are told it is routine, don’t worry about it.  You are not asked for consent or given a choice.  You probably were woken up just after 6 a.m. (the earliest a warrant can be served) in front of your terrified family.  You are so disoriented, and the agent is so nice about it, you don’t even consider complaining.  Your lawyer has not yet even arrived.

This “routine” practice is almost surely illegal.  That little swab can not only match you to other crimes, it can tell the government lots of information about you.  In Maryland v. King, the Maryland state court found that cheek swabbing arrestees accused of serious crimes was a violation of the Fourth Amendment unless there was particularized need for the procedure.  The case was appealed to the Supreme Court which heard argument on February 28, 2013.  The justices appeared poised to strike down Maryland’s law, which would have dire consequences for the federal practice: when the attorney for Maryland noted the large number of crimes that were solved as a result of the swabs, Justice Scalia’s response was “Well, that’s really good. I’ll bet you, if you conducted a lot of unreasonable searches and seizures, you’d get more convictions, too…. That proves absolutely nothing.”

According to online news outlet Main Justice, the Southern District’s Judge Jed Rakoff came out with a “modest proposal” to scrap the U.S. Sentencing Guidelines governing fraud and other financial crimes “in their entirety.”  The plainspoken senior judge, who has presided over many high-profile white-collar criminal cases, told a group of white-collar defense lawyers in Las Vegas that the Guidelines’ relentless focus on loss — whether relevant to the seriousness of the offense or not — is “kind of nuts.”

As we have pointed out in numerous sentencing briefs filed in federal court, the loss tables driving the Guidelines were ratcheted up twice, without any empirical data or rationale to support the increases.  The first time was for administrative convenience (to align the fraud table with the tax table) and the second appears to have been in response to financial scandals like Enron.  The white collar guidelines also contain countless enhancements, for “sophisticated means,” for health-care related crimes, and for crimes involving cemeteries, to name a few.  Judge Rakoff said the numbers are arbitrary: “The Sentencing Commission to this day — to this day — has never been able to articulate why they have two points for this or four points for that. These are just numbers and yet, once they are in place, the whole thing is blessed and said to be rational.”

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