Articles Posted in Sentencing

All lawyers need to keep up with their reading, and criminal defense attorneys are no different.  I’ve been plowing through recent federal criminal cases, and came across three (not from the Atlanta area) that deal with the financial aspects of a federal criminal sentence.  Each sort of reminds me of the Ojay’s song, “For the Love of Money”  with that great refrain, “Money Money Money Money, MONEY!”

OK, class, let’s remember the basics.  A federal criminal sentencing hearing involves more than just the amount of time a person might have to go to prison.  A federal judge can also impose three distinct types of financial orders that require payment.  First there is a “fine”, which usually can be up to $250,000 per count, this money is considered “punishment” and the payment goes directly to Uncle Sam.  Next, there is “restitution”.  This is supposed to pay back victims any loss they suffered from the crime, and while the Defendant pays this money to the Clerk of the Court, the money goes back to the victim eventually.  Then, we have the often misunderstood “forfeiture.”  Under the current version of this old doctrine, property used in or obtained as a result of a crime belongs to the government from the moment the crime took place.  If that property has been used up (or in the case of real money, has been spent) then the government can try to get an equal amount out of the Defendant using the “substitute assets” rule.  The forfeiture payments also go right to the U.S.  And, here’s the kicker: if a Defendant is able to pay, he or she can be forced to pay all three amounts for the same crime, meaning triple whammy for any person of means who is convicted of a federal offense.

Now to our recent decisions discussing some of these financial aspects of federal criminal sentencing.     In United States v. Green 16-3044-2018-07-31, the Defendant’s Mom got VA benefits, and when her mother passed away, Ms. Green kept spending the monthly check without telling the VA. This went on for many years, and it took many years more before the government got around to charging her with a crime in New York.  Ms. Green was required to pay restitution, but the question was how far back did her restitution obligation go, especially since many of the monthly payments were outside the 5-year statute of limitations?  The prosecutors argued that embezzlement of this sort is a “continuing crime”, meaning that they wanted her to pay restitution back to the point when the Defendant’s mother died. Nope, said the Second Circuit, only those within the limitations period qualify as restitution.

My criminal defense office is in Atlanta, but as a lawyer my clients are from various parts around the country.  Readers of this blog know that the majority of my clients face federal criminal charges.  One long-standing client recently died, it was very sad, he was in his late 50’s and is survived by his wife of three decades and seriously disabled child.  I was very troubled by this man’s case, for I felt he did not commit a crime.  However, the prosecutors threatened to go after his wife, leading this client to decide to plead guilty to protect his spouse.  The Judge imposed a 6-month sentence and ordered my client to pay a substantial “forfeiture”.  The client passed away recently, leading me to ponder the criminal defense lawyer’s duties when his or her client dies and some parts of a case are still unresolved.

For many years, I have known about a somewhat quirky rule which says that death can end a criminal case. The theory goes like this: if a criminal Defendant is convicted, that conviction is not “final” until his or her appeal rights are over.  If the Defendant dies while the case is on appeal, the courts are supposed to dismiss all the charges “ab initio,” which is fancy Latin for “from the beginning.”  The theory is that the case might have been reversed by the higher courts, and it is unfair to saddle the Defendant’s family with a conviction or monetary payment without the chance to take full advantage of appellate rights.  I’ve had this happen a few times, before, and have filed one of the strangest documents any lawyer gets to file: “Defendant’s Suggestion of Death.”  I simply do not understand why we always call it merely a “suggestion” of death, for the condition seems final enough to flat-out say  “my client died, dismiss his case.”  Anyway, I’ve had a couple of cases dismissed because of my client’s untimely death.

However, my client’s death recently got me thinking so I did some additional research.  Many of my readers know that at the sentencing hearing there are several different types of “punishment” that can be imposed in a federal criminal case.  Jail time is the most obvious, but a Judge can also impose supervised release (which comes after any imprisonment and can result in more time in custody if the person violates the conditions of release), a fine (money paid to the U.S. Treasury), restitution (which is paid back to “victims”, but the Defendant makes the payment to the Clerk’s office), and forfeiture (which is a legal theory saying that the property or proceeds from a crime belong to the government from the moment the crime happens and the Defendant needs to give them up).  I started pondering the impact of a Defendant’s death on all of  aspects of a sentence, including restitution, fines and forfeiture. Amazingly, the answers turn on when the Defendant dies, and where.

Sentencing Hearings are one of the things I handle often as a criminal defense lawyer here in Atlanta and other parts of the country.  I also write occasionally about how the press and criminal cases intersect, and the increasing abdication by the press when they simply re-print whatever “press release” gets issued by some prosecutor’s office.   Today I just finished a two day sentencing hearing in federal court.  There likely will be some press coverage about the case, but I will leave that for another day.  Instead, I want to talk more specifically about how sentencing hearings operate in theory, and in practice.

People who are familiar with the kind of work that I do know that a sentencing hearing needs to happen any time someone is convicted of a federal crime (whether that conviction comes after a trial or after a plea of guilty).  The first thing that happens is that the person gets interviewed by a United States Probation Officer, who creates a lengthy document called the “Presentence Investigation Report” or “the PSR.”   The PSR generally has two parts.  One is sort of a miniature biography of the Defendant, while the other portion is where the Probation Officer makes recommendations about how to calculate the Sentencing Guidelines.  These Guidelines result in a “range” of months for a particular case.  This range is the starting point, because after the Judge calculates the Guidelines and gets that range, the Judge then needs to decide what is a “reasonable sentence.”  The factors for a reasonable sentence are found in another law called title 18 United States Code, Section 3553.  After the Judge considers those factors, the Judge decides if the 3553 factors suggest a sentence that should be inside, higher, or lower than the range suggested by the Sentencing Guidelines.  At least this is the way it is supposed to work.

However, note that a Judge can stay within, go higher or go lower than the Guidelines but only after first calculating those Guidelines.  Experienced lawyers in the federal criminal justice system (and by this I mean BOTH prosecutors and criminal  defense lawyers) know that it is easier for a judge to give a sentence that is at least close to the Guideline range.  Prosecutors therefore advocate for calculating the Guidelines that result in a higher range, defense lawyers argue for applying the Guidelines that result in a lower range. Obvious, right?

I’m working on a case with a very talented Atlanta-based criminal defense lawyer.  Our clients were accused of and later convicted for fraud involving several businesses.  These are a somewhat different type of white collar offense, for some of the crimes are what we call “securities fraud”, meaning fraudulent conduct relating to the offering or sale of what most people call “stocks”.  However, our clients are going to be sentenced soon, and we are preparing for the upcoming sentencing hearing.  This other attorney and I are running headlong into the extraordinarily unfair sentencing guidelines in these type of federal cases.  Although the Guidelines are extremely unfair, we discovered that a lot of federal judges have been extremely critical of these Guidelines and have extensively criticized this approach over approximately the past decade.

First, a little history (those who know me remember that I majored in history and often try and place issues into historical context for better understanding).  The Guidelines came into effect in 1987, and were supposed to iron out differences between the sentences issued by different judges.  Then, we had the big corporate meltdowns in the early 2000’s, Enron, Worldcom, Arthur Anderson, etc.  Congress responded with what is usually called “Sarbanes/Oxley“, a series of laws designed to prevent such corporate high-level shenanigans.  All fine and good, from my viewpoint.  However, (and here’s the “unfair sentencing guidelines part” coming back), as part of this Sarbanes/Oxley law Congress also told the United States Sentencing Commission to greatly ratchet up the sentences imposed on high-level corporate fraudsters, the kind who led to Enron, Worldcom, Arthur Andersen, etc.  Again, fine and good.

The problem, of course, is that the Sentencing Commission created new and extremely punitive Guidelines that are more of a “one-size-fits-all” set of enhancements for most corporate offenders if a case involves securities or stocks.  As a respected Senior Judge in New York wrote in the opening lines of his decision in United States v. Parris:  “I have sentenced Lennox and Lester Parris today to a term of incarceration of 60 months in the face of an advisory guidelines range of 360 to life. This case represents another example where the guidelines in a securities-fraud prosecution “have so run amok that they are patently absurd on their face,” United States v. Adelson, 441 F. Supp. 2d 506, 515 (S.D.N.Y. 2006), due to the “kind of `piling-on’ of points for which the guidelines have frequently been criticized.” Id. at 510.”

Most readers know that I am an Atlanta-based lawyer who handles lots of federal sentencing hearings, along with just about all other aspects of representing people and companies who are investigated or prosecuted for federal crimes.  Because of my work,  I try to keep tabs on developments in the court system that can impact my cases.  Today, the United States Supreme Court issued two rulings that talk about seemingly esoteric parts of a sentencing hearing.  One case involves an overlooked “mistake”, while the other discusses the amount of justification a judge needs to provide for making a sentencing decision.

The first case is Rosales-Mireles v. United States.    I understand human frailties, we all make mistakes.  But somehow, EVERYONE INVOLVED in this person’s case somehow missed that the U.S. Probation officer double-counted a previous misdemeanor conviction that had been imposed on Florencio Rosales-Mireles.  No one caught the mistake, which changed the U.S. Sentencing Guideline range from 70-87 up to 77-96  months.  Believing that the correct range was the higher number, the sentencing judge imposed a 78 month sentence, one month longer than the presumptive “low end” of the range.  On appeal, the Defendant’s lawyer recognized the mistake and asked for a correction.  That’s when his team ran headlong into the maw of what is called “plain error.”  This rule makes it near to impossible to win because there must be a finding that any error affected the Defendant’s “substantial rights.” The bottom line from this case is that the Supreme Court somewhat relaxed this otherwise stringent rule, and allowed the case to be sent back down for another sentencing hearing.

The other case is Chavez-Meza v. United States.  A portion of the law governing federal sentencing proceedings says that the Judge must “state in open court the reasons for [imposing] the particular sentence.”  However, an earlier Supreme Court decision, which discussed this aspect of the sentencing hearing, ruled that “[t]he law leaves much . . . to the judge’s own professional judgment.”  This is especially so when “a matter is . . . conceptually simple . . . and the record makes clear that the sentencing judge considered the evidence and arguments.”  Here, some amendments to the Sentencing Guidelines reduced the range that applied to Mr. Chavez-Meza’s case.  After the change, the defense lawyer asked for 108 months, but the Judge imposed 114 months. The Judge did not hold a hearing, but merely checked a box on a form for reducing the sentence.  The 5-Justice majority said that was OK. The dissenters pointed out the “serious problem” with this decision: “the difficulty for prisoners and appellate courts in ascertaining a district court’s reasons for imposing a sentence when the court fails to state those reasons on the record.”  This might not seem like a big deal, but it can be.  When we are arguing for an appropriate sentence, I always want to know the Judge’s thinking, for sometimes we can tailor our arguments to that thought process and get a better result.  This case is disappointing because it allows Judges to hand out a sentence without providing any background as to the Judge’s reasons.

We represent lots of people convicted of federal white collar crimes, and in many of these cases, our clients have defrauded or caused losses to individual or institutional victims. We always try to have our client pay back to any victim as early as possible, if the client was truly responsible for the victim’s loss.  Repayment is not only the right thing, it also helps us in trying to get the best possible sentence.  However, we often run into the situation where the client needs to avoid prison in order to keep working to pay off the defrauded victims.  The United States Court of Appeals for the Eleventh Circuit, right here in Atlanta, recently issued an opinion that reversed a criminal sentence imposed on a woman who was unable to make full restitution.  The case is United States v. Pate, and can be found here.

Ms. Pate is a native of Polynesia, and she married a man from the mainland when she was very young.  By all accounts, she was totally dependent on her husband when the couple moved to South Florida.  Ms. Pate also worked in a bank and had befriended an elderly couple who were customers of the bank.  When her husband died leaving her completely alone, doctors and friends all noted that she went into a tailspin.  She ended up embezzling about $176,000 from the elderly couple.  When confronted, she confessed, and pled guilty to embezzlement by the employee of a federally insured bank.  Continue reading

We handle lots of federal criminal cases.  Many of our cases end up with a sentencing hearing. At the sentencing hearing, a federal judge decides what kind of punishment to impose on our client.  A case yesterday from the United States Court of Appeals for the Eleventh Circuit reminds us that sometimes our client can end up losing, even if it appears at first that we “win.”  This case reminds us that attorneys handling federal sentencing hearings need to think through what might happen if they convince the judge they are right about some aspect of a sentencing hearing.  Yesterday’s case is United States v. Slaton, and can be read here.

Mr. Slaton was a letter carrier for the U.S. Postal Service in beautiful Birmingham, Alabama, where I was handling a federal sentencing hearing just yesterday.  He lived about 30 miles away, so he needs to drive to and from work.  Mr. Slaton hurt his back, and eventually received disability benefits, reporting constant pain and need for various therapies.  Other evidence made it appear that he was faking his injuries, with evidence that he regularly went to the gym, remodeled homes, and drove long distances.  He was indicted for a variety of charges, such as making false statements in order to obtain worker’s compensation benefits, wire fraud, and theft of government property.  A jury convicted him of all counts.

The Judge who presided over the trial also conducted a sentencing hearing.  As any reader of this Blog knows, this is the point in the process where a Probation Officer prepares a Presentence Investigation Report to begin the process of calculating the wickedly complex Federal Sentencing Guidelines.  As we have discussed recently in another post, the concept of “loss” is exceedingly important in such cases.  The sentencing judge felt that the “loss” was lower than what the prosecutors wanted,  which led the Judge to calculate the potential Guideline “range” as suggesting 18-24 months custody.  The Judge was obviously not all that impressed with the government’s case, and decided that Slaton did not need to go to jail, and thus take up even more tax dollars.

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Readers know that we handle lots of federal criminal cases, in Georgia, Florida, Alabama, and throughout the country.  I just finished a sentencing this afternoon in which we got a lower sentence by pointing the Judge to some proposed changes to the Federal Sentencing Guidelines.  Along with some other factors, these proposed changes led the Judge to decide that the Guidelines were too high, and he reduced my client’s sentence.  I always set my sights pretty high, and had hoped that the Judge would reduce my client’s sentence even more than he did, but the fact that we got a lower sentence at all shows how there are many ways to get the Court to impose something below what the Guidelines recommend.

Most people reading this blog know that there are two types of rules that govern a sentence that is imposed for a federal crime.  First, Congress passes statutes, which many people call the “laws.”  The “statute” generally sets out any minimum punishment, along with the maximum sentence that can be imposed.  Second, way back in the 1980’s Congress created a body called the United States Sentencing Commission.  This group publishes the Sentencing Guidelines.  These Guidelines recommend a sentence somewhere between the minimum and the maximum set out by the statutes.

The Sentencing Guidelines are not only wickedly complex, they also are amended on an almost-yearly basis.  Each year, the Sentencing Commission recommends changes, which Congress either approves of rejects.  The yearly proposed amendments tend to come out in January, and go into effect the following November. The trick for the experienced federal criminal defense lawyer is to pick out the upcoming changes that might help their client, point out that it is unfair for the client to not get the benefit of that change simply because the sentencing hearing will not take place after November 1, and then try to convince the Judge that a lower sentence is therefore appropriate.

Federal criminal cases often result in a Defendant being sentenced to jail time, as well as being ordered to pay “restitution”. A 1996 law called the Mandatory Victims Restitution Act (or “MVRA”) says that when the victim of a crime is entitled to restitution for the loss of “property”, and it is impossible, impracticable, or inadequate to return that property, then a defendant must pay “an amount equal to (i) the greater of * * * (I) the value of the property on the date of the damage, loss, or destruction; or (II) the value of the property on the date of sentencing, less (ii) the value (as of the date the property is returned) of any part of the property that is returned.” Earlier this week, the United States Supreme Court accepted a case involving questions surrounding how to calculate restitution when the Defendant committed mortgage fraud. The question in Robers v. United States is whether the district court erred in calculating restitution for banks who lost money because of the Defendant’s loan fraud when the court reduced the victims’ losses by the amount they recouped years later from the sale of the collateral securing the loans, as opposed to reducing the amount based on the value of the collateral at the time when the victims foreclosed on the mortgaged properties. This type of questions arises with some frequency in federal criminal cases, so it’s important to keep an eye on how the high Court resolves the case.

Mr. Robers was like so many Americans in the past decade. Some sharp operators figured out that inflated real estate values could be used to skim money off the top of mortgage loans. One necessary component of these schemes is that there needs to be a “straw buyer”, a person without any blemishes on their credit score, but who merely signs the paperwork for the loan application, and who has no intention in actually moving into the property. The straw buyer signs bogus paperwork claiming that he or she actually makes far more money that they really do, so the foolish banks and mortgage lenders regularly gave large loans to such people to fund the purchase of inflated real estate. When the loan closed, some of the loan proceeds would get skimmed to pay for the brokers or others who organized the scheme, the straw buyer normally got a small amount of money for signing the documents, and the house went into foreclosure when the straw buyer did not make any payments. The bank or mortgage lender then was stuck with a non-performing loan. Lenders generally then took the property back, which played a large part in the recent real estate debacle.
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Any casual reader of this blog knows that I regularly discuss how important it is for people facing criminal charges to have an attorney who is creative, who is willing to fight for his or her client, and who knows when to “object” in court. Some lawyers fail to recognize that objecting to the prosecutor’s tactics does not end with the trial. The attorney also needs to be prepared to complain when the government tries some improper tactic at the sentencing hearing. A case issued this week by the federal Court of Appeals here in Atlanta proves this principle. The case is United States v. Rodriguez, and can be accessed here.

Mr Rodriguez was prosecuted in federal court in Miami, Florida. The prosecutors alleged that he ran a scheme to defraud investors.The evidence at trial revealed that Mr. Rodriguez was involved in four companies that sold coffee and other vending machines. Mr. Rodriguez posted Internet ads looking for investors. When a potential investor responded, Rodriguez had some associates contact them and inform them about their golden opportunity to invest in a new coffee machine, vending machine, or drinking water machine. He made various promises about the quality of the investment and the level of support he would provide to the investor. Unfortunately, it seemed that most of his promises were untrue, and investors lost money. The jury found Rodriguez guilty of mail and wire fraud.
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