Crime in the Suites: An Analyis of Current Issues in White Collar Defense
IfrahoniGaming
Aug 11
2017

Supreme Court to Decide Whether Prosecutors Can Use Pleas to Skirt Constitution

While the endless portrayal of jury trials in media might indicate otherwise, trials are actually quite rare in the U.S. criminal justice system. With 97% of federal cases ending in pleas, the Atticus Finch conception of American justice has been largely confined to books.

Ordinarily, when an accused enters into a plea agreement, he waives his right to appeal his conviction—otherwise, future appeals could require as much effort as the trial that prosecutors had hoped to avoid.  But it is not clear what happens when there is a challenge to the constitutionality of the statute of conviction itself. The Supreme Court will be answering this question next fall because Rodney Class chose the wrong parking spot.

On a visit to the U.S. Capitol, Class found uncharacteristically great parking in a gateless lot close to his destination.  Class didn’t see any signs restricting parking, so he drove straight into the lot to claim a space. When Class returned to his car, he found it surrounded by Capitol Police officers who had noticed a knife and holster in his car and suspected him of bringing a firearm onto Capitol grounds, which is prohibited by federal law. Class was surprised to learn that the unmarked lot was on the Capitol grounds, but freely admitted that he had lawfully owned firearms stored in his locked car.

Class was arrested and charged with possessing firearms on Capitol grounds—the same law that prohibits an individual from carrying even a licensed firearm on a Capitol tour or into her Congressman’s office.

Believing that his arrest violated his Second Amendment and Due Process rights, Class filed numerous motions to dismiss the case, arguing that he never had notice that he was on Capitol grounds and that prohibiting him from possessing properly stored weapons in his car was unconstitutional.   The trial court rejected these arguments and set Class’s case for trial.

Class did not appear for his trial but, instead, entered into a last-minute plea acknowledging the facts claimed by the government.  He continued to maintain that he had lawfully possessed firearms in his parked car on what he only later discovered to be Capitol grounds.

Immediately after the plea, Class appealed his conviction to the D.C. Circuit, arguing that the prohibition against firearms on Capitol grounds was unconstitutional both on its face and as applied to him even under the facts admitted in his plea. The D.C. Circuit affirmed his conviction without considering the merits of his argument, holding that Class waived any constitutional challenges the moment he struck a deal with the prosecutor and pled guilty. Although the case was simple and the D.C. Circuit’s opinion extremely short, the Supreme Court has agreed to weigh in and decide whether entering a plea can deprive a defendant in Class’s position to argue that the statute underlying that plea is, itself, unconstitutional.

Class has some support for his position.  The Supreme Court has previously ruled that a defendant who pleads guilty can still appeal his conviction on jurisdictional or double-jeopardy grounds.  But it is not clear whether there is a broader right to contest the constitutionality of a conviction based on a plea.

Even if the Court does rule in Class’s favor, there could still be a potential loophole if prosecutors can still insert an express waiver of rights into future plea agreements. The existence of this loophole will depend on whether the Court rules that a right to challenge a statute of conviction is a non-waivable right. In Menna v. New York (1975), the Supreme Court appeared to hold that the right to raise a double-jeopardy challenge to a plea cannot be waived because it goes to the very heart of whether that defendant could be brought before the court in the first place. We are hopeful that the Court will rely on cases like Menna—and be clearer than it was then—to find that a right to appeal a statute’s constitutionality cannot be waived.

Because nearly all federal criminal cases end in guilty pleas—and because a defendant like Class who does not dispute any facts is unlikely to prevail at trial—this case raises fundamental questions about how the Constitution will protect criminal defendants.  Closing the door to appeals on constitutional grounds could leave overbroad laws—and overzealous prosecutors—almost entirely unchecked. But the fact that the Supreme Court has agreed to hear the case at all is promising, suggesting that it may preserve the ability of defendants to challenge unconstitutional laws even after entering a plea.

 *Alex Grayson is a Summer Intern at Ifrah Law and is a student at Clark University in Massachusetts.

Jul 21
2017

Why Banning Criminals from the Web Doesn’t Work

A few weeks ago, the Supreme Court issued a unanimous ruling in Packingham v. North Carolina, 137 S. Ct. 1730 (U.S. 2017) invalidating a state law outlawing registered sex offenders from accessing websites which could facilitate offender-minor direct communication.  While the majority opinion and concurrence seems grounded in, and specific to, sex offender restrictions, the underlying characterizations and beliefs about websites has far-reaching consequences for other criminal defendants in state or federal courts.

Lester Packingham pled guilty to having sex with a 13-year-old girl when he was 21.  Eight years after his conviction, Lester bragged on Facebook about a happy day in traffic court, using the screen name J.R. Gerrard, and exclaiming:

“Man God is Good!  How about I got so much favor they dismissed the ticket before court even started?  No fine, no court cost, no nothing spent…Praise be to GOD, WOW!  Thanks JESUS!”

Apparently offended by the concept that someone would celebrate dodging a speeding ticket with such religious fervor, a police officer tracked down court records, obtained a search warrant, and determined that “J.R.” was actually Lester Packingham.  Lester was soon convicted of illegally accessing a “commercial social networking Web site,” as broadly defined by the North Carolina legislature.

The Supreme Court reversed the conviction based on the First Amendment’s protection of free speech, with Justice Kennedy criticizing the unnecessarily broad prohibition on accessing social networking sites, which prevented sex offenders from accessing the “vast democratic forums of the Internet,” that serve as principal sources of information on things such as employment opportunities, current events, and unrestricted opinions or ideas that have no connection to criminal plans or potential victimization of children.  Justice Alito’s concurrence agreed with striking down the North Carolina statute, pointing out that the statute’s definition of social networking sites included websites such as Amazon, the Washington Post, and WebMD. However the concurrence emphasized that states could still draft narrower, and constitutionally valid restrictions because of their legitimate interest in thwarting recidivist sex offenders.

The most interesting part of this decision is its future.  Is it really possible for a state legislature to sufficiently narrow its sights on offender/child communication to the point where the law has its intended effect while still passing constitutional muster?  If there is a North American Man Boy Love Association (“NAMBLA”) version of Tinder or Match.com, then there may be a way to characterize the “social site” in a permissible and effective way.  However, like the ones for the Washington Post or Amazon, many websites allow for user IDs for the very point of communicating with other visitors to that site, even if simply editorializing on a Washington Post story.  While the ensuing communications may not be fairly called a “chat room,” they are close enough to a “bulletin board” to bring us right back into the perils of North Carolina’s now-invalidated law.

And what of the defendants facing internet restrictions for reasons other than molestation or child pornography violations?  There are numerous defendants who are bounced off the Internet as a condition of probation or supervised release because the internet was an instrumentality for their crimes.  This probation condition that imposes an Internet ban is often referred to as CIMP- the computer and Internet monitoring program. It is imposed for both crimes that cannot be committed without a computer and also the use of a computer to facilitate the commission of traditional crimes. Some common computer-assisted offenses in the federal system that don’t require a computer per se are securities and credit card fraud, network manipulation, and on-line gambling.

Packingham will make for an interesting argument when one of these defendants is brought before the judge on a violation of probation, and the courts may have to balance constitutional concerns with facts that are much more ominous than Lester’s happy day in traffic court.

Even without the constitutional concerns, a strict CIMP condition has problems with satisfying the three statutory sentencing purposes: adequate deterrence, protection of the public from further crimes, and rehabilitation of the defendant in the most effective manner, 18 U.S.C. § 3553(a)(2)(B)-(D). While a strict ban obviously satisfies the adequate deterrence and public protection purposes, it does not further the purpose of rehabilitation.  It can even frustrate the rehabilitation purpose because an unreasonably restrictive Internet ban often means that defendants are unable to comply and end up in violation of their probation conditions. For example, below are some sample probation conditions that are quite onerous and likely to result in a probation violation:

  • You must not possess and/or use computers (as defined in 18 U.S.C. § 1030(e)(1)) or other electronic communications or data storage devices or media.
  • You must not access the Internet.
  • You must not access the Internet except for reasons approved in advance by the probation officer.

Generally, the imposition of monitoring and access by probation of a defendant’s computer remains problematic in many cases because- like in the sample conditions listed above-  it imposes a greater deprivation of liberty than is reasonable necessary. This was acknowledged by the 10th Circuit, which stated as a matter of general principle that, “conditions imposing complete prohibitions on Internet use or use of Internet-capable devices will typically constitute greater deprivations of liberty than reasonably necessary, in violation of § 3583(d)(2).”  With constantly evolving technology and the Court’s balancing act as evidenced in Packingham, it is likely that additional similar cases will wind their way through the state and federal appellate courts this year. Meanwhile, we would advise counsel and defendants to vigorously push back against any imposition of a restriction on Internet access (whether via a CIMP condition or otherwise) and to impress upon the judge at sentencing that these conditions raise both constitutional concerns and sentencing policy concerns.

Jul 19
2017

You Can’t Run From Justice

Just last week, a Kentucky lawyer by the name of Eric Conn was sentenced to twelve years in prison by a federal judge for bribery and theft of government money.  Though similar sentences are doled out around the country on a daily basis, this was unique because the defendant was not even in the courtroom.  The notion that a judge could sentence a defendant in absentia is unusual, but it need not give rise to fears that any one of us may be judged guilty in a secret proceeding without warning.

In fact, sentencing Conn without him in the courtroom was so unusual that the judge issued a written opinion explaining why he did so.  The case started out typically enough.  Eric Conn had pleaded guilty to Social Security fraud and bribing a Social Security judge, and was set to be sentenced July 14.  As part of his plea deal, he agreed to testify against one of his co-defendants, and was allowed to remain out on bail subject to GPS monitoring while awaiting sentence.

But after entering his plea, things began to get complicated.  Conn simply disappeared, and his GPS monitor was found in a backpack by the side of a Kentucky highway.  Somebody claiming to be Conn made several calls to his lawyer and the press attempting to negotiate his return while trying to avoid the need to testify against his co-defendant.  But Conn simply could not be found.

When July 14 came and Conn still hadn’t turned up, the judge was in a difficult position.  The Federal Rules of Criminal Procedure require that a defendant be present for his own arraignment, trial, and sentencing.  This requirement comes from over a century of Supreme Court cases finding that it is “contrary to the dictates of humanity” to allow a criminal proceeding to go forward without the person whose conduct is being judged in the courtroom.  Those same procedural Rules also give a defendant a right to speak directly to the judge before he is sentenced, a right called “allocution” that has existed in the common law for hundreds of years.  Federal law also gives a defendant the right to see and respond to the information the court will use when sentencing him.

All of these rights combine to ensure that a defendant is treated fairly as an individual when he comes before the court.  He gets the chance to set the factual record straight.  He gets to look the sentencing judge in the eye, so that a judge cannot simply ignore the fact that a sentence will fall upon a real person.  And he gets to explain himself, apologize, or provide reasons why a harsh sentence is unnecessary or unfair.

Judges take these rights seriously.  When a defendant jumps bail and does not appear for sentencing, courts will usually delay the sentencing until the defendant’s appearance can be secured.  (Usually, an arrest warrant is issued and the defendant will eventually be brought back before the court in custody.)

Here, however, the court found that by fleeing and going into hiding, Conn had waived his important procedural rights and simply proceeded without him.  This is unusual, but it is actually permitted by the Federal Rules of Criminal Procedure: a defendant who enters a plea in a non-capital case and then “is voluntarily absent during sentencing” waives his right to appear before the court and to address the court at sentencing.  The judge also relied on cases from other courts that found that fleeing deprived Conn of his right to review the information the court would use at sentencing.

On the one hand, it makes logical sense that a defendant who jumps bail after being ordered to appear has given up his right to be present for further proceedings.  And federal procedural rules—as well as several courts—recognize that logic.

On the other, there is always some concern when a court proceeds without the parties present.  That is particularly the case where, as here, the court is dealing with a defendant who has fled his supervision.  That is because the Supreme Court has held that a defendant who is a fugitive cannot appeal his sentence under a doctrine called the “fugitive disentitlement doctrine.”  So even if Conn’s sentence was improper or illegal, there is no way for him to get relief for that error.

With all that in mind, Eric Conn’s case should not raise fears in the minds of most people that they could be sentenced to over a decade of prison without even being in the room.  Rather, it demonstrates the ways in which a defendant—even one with legal training—can do things that end up forfeiting crucial rights important procedural protections.

Jul 13
2017

The Lowdown on Takedowns

Attorney General Jeff Sessions and a battery of other federal law enforcement officials today announced the “largest health care fraud takedown” in U.S. history, with 412 charged defendants, including 56 doctors, accused of defrauding taxpayers of roughly $1.3 billion.  Importantly, the takedown focused on the over-prescription of opioids, a phenomenon that has led to thousands of addictions and overdoses across the U.S.  Takedowns like this one serve an important purpose in highlighting law enforcement’s focus on fighting a particular type of crime, and they tend to encourage and heighten public awareness as well.

Depending on the types of crimes at play, takedowns can be remarkably challenging actions.  When I worked at the DOJ Organized Crime & Gang Section, I was involved in several of these operations.  Anytime an official in Washington, D.C. tries to coordinate across multiple federal and local law enforcement agencies in various states to establish a single “D-Day” for the takedown, he or she embarks on a painful process that makes cat herding look easy.  A true takedown requires a tremendous amount of resources – agents to make arrests, officers executing search warrants, and prosecutors ready for initial appearances, to name a few.  Getting 10, 20, or 100 cases to track the same timeline is a serious challenge.  More so when the underlying crimes involve violence, guns, or any form of ongoing victimization.  For example, imagine asking a local officer to hold off on arresting gang members who murdered a teenager because you want to “bundle” that case into a takedown narrative.  Letting criminals continue their access to guns, drugs, human trafficking, or ongoing fraud schemes draining grandma’s savings account in the name of “coordination” of a takedown is rightly frowned upon.

Consequently, many takedowns are not very contemporaneous events by law enforcement but more of a generalized update that might span weeks or months of activity.  In fact, a narcotics takedown several years ago included such uncoordinated, barely related targets that the national media succumbed to “takedown fatigue,” failing to cover several takedowns that ensued because of their cynicism regarding the six degrees of separation approach that had underscored the anti-cartel operation.  Interestingly, Attorney General Sessions’ comments refer to “the 8th year of the Health Care Fraud Takedown.”  If the staggering numbers provided to the press are actually an accumulation of eight years’ worth of work, then it may be time to come up with a more apt phrase than “takedown,” which sounds to the untrained ear to be a reference to overnight raids and arrests.  None of this is to suggest that dedicating resources to fighting the opioid epidemic is a bad idea – it is not, and including corrupt doctors and facilities within the cross-hairs is appropriate and overdue.  But know that behind the press conference curtain is a wild mix of activity, including coordination challenges, interagency spats, risk assessments, and closed-door governmental decisions on cases for inclusion, as well as the time-frame to be used in announcing the coordinated numbers that make up a takedown press release.

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Jun 12
2017

The “Third Party” Catch-22

As the Department of Justice has been doubling down on law enforcement overreach, the Supreme Court has just decided to hear a case that may limit the use of a common tool that law enforcement uses to infringe upon the privacy rights of innocent people.

The case, Carpenter v. United States, arises out of a series of armed robberies in Michigan in 2010 and 2011.  As part of the investigation, police requested access to more than five months’ worth of cell phone location data for several suspects, including Timothy Carpenter.  This data allowed police to know the rough location of each suspect every time he used his phone during that period (and a more searching order could have provided constant, and more exact, location tracking).  Had the police wanted to get this information from their targets directly, they would have been subject to stringent warrant requirements under the Fourth Amendment to the Constitution.  A warrant must be narrow and can only be issued if a neutral judge finds, based upon a sworn statement under oath, that there is probable cause to believe that the warrant will turn up evidence of a crime.

However, because the suspects’ cell phone location data was held by third-party cell phone carriers, it is not protected by the Fourth Amendment under a legal principle called the “third party doctrine.”  This doctrine was created in 1979 in a case allowing for police to obtain a pen register—that is, a list of all the telephone numbers called from a given line—without a warrant.  In that case, the Court found that a person cannot have a “reasonable expectation of privacy” in information that was in possession of a third party.

This same reasoning has been extended to a shocking array of highly personal information that is entrusted to third parties—banking and financial records, emails, internet usage data, and even health records can all be excluded from constitutional protection under the third-party doctrine.  In virtually all of these cases, Congress has taken steps to offer some degree of protection to information that can be extremely personal, but these measures rarely, if ever, offer the same protection against law enforcement abuse as the Fourth Amendment’s warrant requirement.  For example, the cell site data at issue in Carpenter was obtained under the Stored Communications Act (“SCA”), which allows law enforcement to access information so long as it can show “reasonable grounds”—not necessarily under oath—“to believe that” the records sought “are relevant and material to an ongoing criminal investigation.”  This standard does not even require that the records have anything to do with a suspect—officers may seek the records of an innocent bystander or even a victim under this standard.

Part of the reason why this makes so little sense is that society has changed a great deal since 1979.  Back then, the phone company may know whom you had been calling, but they couldn’t track you once you hung up the phone.  The bank might have your deposit and withdrawal records, but it couldn’t track all of the purchases you made with your cash.

In the modern world, this has changed.  A credit card company can know almost everything you consume.  Your phone can track your location from moment to moment, and your social media accounts may record most of your thoughts over the course of a day.  And when you add in email servers, Fitbits, smart appliances, and various apps that organize your life, the third party doctrine has the potential to do away with any notion of privacy at all.  There simply no longer is a way to keep your personal information out of the hands of third parties without opting out of society entirely.

That is why it is so heartening that the Supreme Court has accepted the Carpenter case.  We can only help that the Court will recognize the changes that have occurred over the past four decades and rule that the Fourth Amendment protects our sensitive personal information even when it has been entrusted to third parties.  Until then, though, I would be careful where you use your cell phone, because you never know who may be looking over your shoulder just because they’re curious.

Ifrah Law is a leading white-collar criminal defense firm that focuses on data privacy.

May 15
2017

DOJ’s New Charging and Sentencing Policy Will Disproportionately Impact Vulnerable Populations

On May 10, 2017, Attorney General Jeff Sessions issued a memorandum that expressly rescinds previous Department of Justice (DOJ) policy and directs federal prosecutors to “charge and pursue the most serious, readily provable offense” against federal defendants.

The likely result of this harsher approach to the enforcement of federal drug laws is a return to mass incarceration, with disparate impacts on communities of color and victims of the opioid epidemic.

In addition to this express directive to charge the most serious offense, the policy also requires prosecutors to disclose to sentencing judges “all facts that impact the sentencing guidelines or mandatory minimum sentences” in a given case. For drug-related crimes, such facts include drug quantity and prior convictions, both of which can trigger minimum sentences that judges must impose.

Sessions’ memorandum does allow for exceptions in limited cases. If prosecutors conclude that strict application of the charging policy is not warranted in a particular case, the prosecutor should consider whether an exception is justified. Any decision to depart from the policy must be approved at the highest levels of the Justice Department and documented in the defendant’s case file.

With respect to sentencing, prosecutors are expected to recommend a guidelines sentence in most cases. Prosecutors may recommend a guidelines departure or variance in certain cases, but the recommendation must be approved and documented in the case file.

During the last election cycle, then-Senator Jeff Sessions campaigned on behalf of the self-described “law and order” candidate, Donald Trump. Therefore, it should come as no surprise that, as Attorney General, Sessions implemented this harsher policy for the charging and sentencing of federal crimes, or that he repudiated the previous administration’s approach.

In expressly rescinding “any inconsistent previous policy” of the DOJ related to charging and sentencing, Sessions’ memo targets the policies of his predecessor, former-Attorney General Eric Holder, concerning mandatory minimum sentences and recidivist enhancements against non-violent drug offenders.

In contrast to Sessions’ approach, the Justice Department under the Obama Administration pursued a “Smart on Crime” initiative that sought to promote fairer enforcement of federal laws and, importantly, alleviate disparate impacts of the criminal justice system—particularly on vulnerable populations.

Federal prosecutors were directed to make charging decisions in drug cases based on case-specific factors, such as the defendant’s conduct and criminal history, circumstances related to the offense, the needs of the community, and federal resources and priorities. They were also directed to avoid charging decisions that would trigger mandatory minimum sentences in the cases of low-level, nonviolent drug offenders. Prosecutors had discretion at sentencing and discouraged recidivist enhancements for low-level, non-violent drug offenders.

The Obama Administration’s clemency initiative applied these same standards, and resulted in the granting of clemency to hundreds of federal inmates serving lengthy sentences for low-level drug crimes.

Holder wanted the Department to be smart on crime, Sessions wants it to be tough. Under the current new policy, federal prosecutors must take a harsher approach to enforcement of federal drug laws. The likely result will be a return to mass incarceration with high costs to the tax payer and disproportionate impacts on communities of color and victims of the opioid epidemic—populations that candidate Trump promised to help.

The Justice Department’s new charging and sentencing policy shifts leverage back to prosecutors. Defendants in drug cases are more likely to negotiate a plea deal than contest federal charges and risk being sentenced to a mandatory minimum. Defendants not subject to a mandatory minimum may be just as likely to contest their charges. If they do, their best hope for leniency will be the sentencing courts; prosecutors now have limited discretion to cut any slack.

Ifrah Law is a leading white-collar criminal defense firm that focuses on a variety of practice areas. View all.

Mar 02
2017

When A Threat Becomes A Crime

A Miami Beach man was recently accused of threatening President Trump on Twitter. He sent the threat directly to Secret Service, challenging them to stop his Inauguration Day surprise. They did, and Dominic Puopolo, who used the screen name of Lord Jesus Christ, is now in federal custody.

Sending a threat to the President, to an ex-wife, or to a judge is a federal felony, punishable by as much as 20 years in the federal penitentiary. But what constitutes a threat? What if the person sending a letter or email is merely angry and has no intention of carrying out the threat? What if the author is demonstrably suffering from mental problems? And are there times where the pre-trial process greatly exceeds the length and difficulty of the eventual trial of a threats case?

When it comes to threatening communication prosecutions, federal prosecutors are increasingly finding themselves stuck at the intersection of crazy and criminal. It is a juncture where seemingly serious threats might actually be meaningless rambling but where internet rants might actually reflect a true intent to harm or kill the stated victim. And in today’s bitter, divided, and tumultuous political climate, would anyone bet against threatening communications being sent to 1600 Pennsylvania Avenue? If so, please contact me, as I’ll definitely take the other side of that wager.

“The President must die. When I am released I will kill him.” U.S. v. Rendelman, 641 F.3d 36, 40 (4th Cir. 2011).

[If the President refuses to meet with me, he] “will get the worse Christmas present ever, “will suffer for 30 days,” and “will wish for death but death will not come for him.” U.S. v. Dillon, 738 F.3d, 284, 288 (D.C. Cir. 2013).

“Enough elementary schools in a ten-mile radius to initiate the most heinous school shooting ever imagined…And hell hath no fury like a crazy man in a Kindergarten class.” U.S. v. Elonis, 135 S. Ct. 2001, 2006 (2015).

The Easy Case

Certainly, a decent chunk of these prosecutions stem from imprisoned inmates taking the time to send a “I can’t wait to kill you” letter to their prosecutor (usually spelled “persecutor” in these letters) or to the judge who sentenced them to the “outrageous” sentence, often a term of imprisonment that lies perfectly within the sentencing guidelines. Further, these jail bards conveniently tend to include a return address, handwriting suitable for comparison, their name and even their inmate number, to so to avoid confusion. The sole issue in this type of case tends to be simply whether additional consecutive time will make any sort of difference to our “Cape Fear” penitentiary pal.

The Harder Case

Creatively worded threats, however, occasionally generate serious issues as to sufficiency. For example, in U.S. v. Zavrel, 384 F.3d 130 (3rd Cir. 2004), the defendant and her roommate mailed 17 envelopes containing corn starch to juveniles whom she blamed for her son’s juvenile prosecution for, wait for it, terroristic threats. The corn starch resembled anthrax, a deadly chemical that had in fact been mailed to several potential victims in late 2001. The issue decided by the Third Circuit was whether the simple mailing of corn starch established a “communication” for purposes of proving a threatening mailing under 18 U.S.C. Section 876.   It was.

The other common issue, which made its way all the way to the Supreme Court, is whether the sender of the threat has to in fact intend to harm the recipient (subjective standard) or whether the sender must simply intend to communicate threatening words which are reasonably understood by the recipient to constitute a threat (objective standard). In Elonis, (2015) Chief Justice Robert’s opinion adopted the latter standard, resolving a Circuit-split that had existed for some time. Still, the issue of whether the recipient reasonably views the letter or email as a threat remains a regular feature of these cases.

The Hardest Case

The hard case is when the defendant says horrible things that are directed toward some public, possibly political figure, but it’s not clear that he or she constitutes a “true threat” to the recipient.  And, the defendant already is serving a substantial prison sentence. These are the class of cases that the federal criminal justice system is least likely to deal with in a satisfactory way. There tends to be a perfect storm of factors coming together to complicate the superficially simple case: “important” victims, such as judges, the President, or prosecutors; a defendant with a serious, pre-existing mental health problem, and threatening language that is both graphic and somewhat implausible.

For example, one defendant claimed that he literally would crucify his intended victim, before signing off with “I am the Alpha and the Omega,” and some defendants openly discuss the jurisprudence of threatening communications while enlightening readers to the fact that a person “who placed a mortar launcher in the cornfield across from his wife’s residence would have a clear line of sight through the sun room…” Elonis, at 2005. And the man who threatened President Trump via Twitter casually mentioned that he is Jesus.

The typical court process for such a case is that the judge orders a mental health evaluation for competency, which results in the prisoner being shuttled to one of several federal facilities which include competency and criminal responsibility assessments. Not surprisingly, some of these defendants are kept months before they decide not to take the prescribed medications, often based upon the belief that the prison medical personnel are just part of a grand conspiracy that continues to manifest itself through each of the defendant’s cases. Not a lightly undertaken process, forcible medication of a defendant requires significant, and often lengthy, litigation as well. To the extent that the defendants fire their attorneys out of frustration, a fairly common development, the case slows to a snail’s pace.

The Future

And this becomes the most obvious challenge to the criminal justice system in this realm – the defendant, clearly suffering from some mental deficiency, is incarcerated pre-verdict for longer than his applicable sentencing guidelines and in some instances at, or approaching, the statutory maximum for his crime. Yet, he may in fact pose a danger to the recipient of his threat, so dismissing the charge is not a favored result either. In the current climate where the likelihood of these challenging cases is on the rise, the question is whether anyone or any institution will take the lead in balancing ideas of deterrence and punishment with the practical reality that many of these defendants fall outside the mainstream in terms of mental health as well as case resolution. Nobody wants to travel down the wrong road at this intersection, so bet on reaction, not pro-action.

Feb 01
2017

Will Clemency Continue?

There are many big policy changes happening in Washington these days and they receive appropriate press coverage. But, there are also many smaller changes that can have literally life changing effects on citizens, which are not generally reported in the media. One of those smaller changes is whether the Trump administration will revive a clemency program for federal inmates that effectively concluded with the end of the Obama administration.

In 2014, the Obama administration developed a clemency program to encourage non-violent drug inmates to apply for presidential clemency, provided they have served at least 10 years of their original sentence and met other guidelines. The Department of Justice program was aimed at inmates that were sentenced under the mandatory minimum sentencing for drug offenses that were established in the 1980’s, and, who would have received a lesser sentence if sentenced under the current sentencing guidelines. This clemency program was important because nearly half of all federal prisoners are serving time for drug-related offenses.

In order to implement this program, the Department of Justice program partnered with The Clemency Project 2014, a pro-bono effort by lawyers throughout the United States, to efficiently process clemency applications on behalf of inmates. The Clemency Project consisted of approximately four thousand lawyers from the National Association of Criminal Defense Lawyers, the American Bar Association, the American Civil Liberties Union, and many others. Ifrah Law also participated in Clemency Project 2014 and represented several defendants that were granted clemency.

This clemency program effectively concluded with the end of the Obama administration and it appears unlikely that President Trump- who campaigned on a “law and order” principle- would be inclined to revive it.

Further, although neither President Trump nor Sen. Jeff Sessions (the attorney-general nominee) have made direct statements with regard to continuing the clemency program, their past comments indicate that they do not support it. For instance, during the campaign, President Trump commented on the clemency program saying, “Some of these people are bad dudes…And these are people who are out, they’re walking the streets. Sleep tight, folks.”

Moreover, back in 2014, when the Obama administration first announced its intention to initiate the clemency program, then-Senator Sessions issued a statement condemning the use of presidential pardons to grant clemency as “an alarming abuse of the pardon power,” protesting that “While the pardon power has been interpreted broadly, the Framers never intended for it to be used in this manner.” Sen. Sessions’ statement also noted that, “In addition to these serious constitutional concerns, there are serious policy concerns”, and, “it sends the message that the United States government is not serious about combating drug crimes”.  So, assuming Sen. Sessions is confirmed as the next Attorney General, he does not seem predisposed to reviving the clemency program in any form.

Even so, and notwithstanding the prior negative comments by President Trump and Sen. Sessions, there is some hope of a bi-partisan push by Congress to amend the current federal sentencing structure and address a clemency program. The Congressional momentum comes from a joint interest by members focused on criminal justice reform and members interested in reducing the fiscal costs borne by the prison system. Federal prison costs account for nearly a third of the entire Department of Justice’s $27 billion annual budget; incarceration of one individual costs the Bureau of Prisons approx. $80/day (or $29,000/year), while probation supervision costs only $10/day (or $3,500/year).

This fiscal concern has paved common ground between criminal justice reform advocates and fiscal conservatives, which provides a glimmer of hope that a compromise can be reached to provide meaningful reform that reduces the federal inmate population in a responsible manner, without compromising our nation’s “law and order,” and possibly reviving the Clemency Program to do so.

Finally, in his recent interview with Fox News’ Sean Hannity, President Trump was asked about pardoning a Navy sailor imprisoned for taking photos inside a submarine. President Trump responded that he was “looking at it right now” and that “I think it’s very unfair in light of what’s happened with other people.” We think that same sentiment would apply to the Clemency Program, which was focused on inmates that received sentences that were “unfair in light of what’s happened with other people” and would urge the President to consider reviving the Clemency Program.

Ifrah Law is a leading white-collar criminal defense firm that focuses on a variety of practice areas. View all.

Jan 17
2017

Alexa: Play Confession

It sits in your house, passively recording everything you say.  It knows what you like.  It knows what you listen to.  It knows what you buy.  It knows who’s in the room with you.  And now, it might tell the police all about it.

“It” is the Amazon Echo, a revolution in the “internet of things.”  The Echo is a smart speaker that connects directly to Amazon’s cloud-based personal assistant service, Alexa.  It can play music; give you the traffic, weather, and news; handle your shopping; put things on your calendar; play games; and even respond appropriately to a wide array of cultural references, all in response to voice commands.  If you have the right add-ons, Alexa can even control your entire home, dimming your lights, adjusting the thermostat, and locking the doors.

It does this by passively listening for a given activation phrase—the default is “Alexa.”  Generally, Alexa does not record anything else (although it may store up to sixty seconds at a time in a buffer).  Once it hears its name, Alexa will begin recording and will send what follows to Amazon for processing—both to respond to a given request, and to store to improve responsiveness later.  On one hand, this means that Amazon is not actually recording everything you say, but only those specific commands directed to Alexa.  On the other hand, it means that Alexa is always listening.

This became relevant in a recent murder case in Bentonville Arkansas, in which police obtained a warrant for recordings from Amazon of commands given to the suspect’s Echo.  It is far from clear what police hope to gain from these recordings; they have a large amount of traditional evidence and, unless the murderer specifically asked Alexa for help, the recordings are unlikely to be incriminating.  Nevertheless, an attempt by police to seek recordings from a device that is virtually always listening to us in our homes is extremely disturbing.

These efforts are made even more concerning by recent court rulings on cell phone location data.  According to two federal appellate courts, because cell phones send this information to a third party (that is, to cell phone and app providers), it is not considered sufficiently private for protection from searches and seizures.  That means that police can access this data—which often allows an individual to be physically tracked from moment-to-moment—without even requesting a warrant.

If this principle is upheld by the Supreme Court (which, so far, has refused to consider the issue), it would mean that police could access daily recordings from the privacy of your own home on little more than a hunch and an informal request.  Though many may say they have nothing to hide, I doubt most of us would be comfortable knowing a police officer was looking over our shoulder twenty-four hours a day.

There is one barrier to that terrifying outcome, which is that Amazon has refused to comply with the Bentonville warrant and officers there have decided not to press the issue.  Like Apple, Amazon has taken it upon itself to protect its customers’ privacy.  But a private company cannot be expected to be the defender of its customers’ civil rights forever.

But until the law catches up to the state of technology, every one of our devices is capable of being turned into an informant against us.  And though Alexa can do a lot, it has yet to learn how to invoke its Fifth Amendment right to remain silent. Until it does, you might want to think twice before inviting Alexa–and potentially the police–into your home.

Dec 06
2016

‘Tis the Season of Giving: Supreme Court Expands Insider Trading Liability to Recipients of “Gift” Stock Tips

Just in time for the holiday season, the Supreme Court has ruled that gift-giving is truly its own reward.  But far from embodying the spirit of generosity that typically goes with that saying, the Court has ruled that the warm feeling one gets from giving to others can give rise to criminal insider trading liability. This ruling will extend insider trading liability for the recipients of tips, who were previously thought to be protected where they obtained information from an insider that was not the result of a quid pro quo exchange.

The case, Salman v. United States, dealt with a defendant who had received tips second-hand from a friend, Michael Kara, whose brother Maher was a trader at Citigroup.  Maher had initially turned to his brother for help understanding technical issues he encountered in his job but, eventually, began to share inside information with Maher with knowledge that Maher intended to trade on it.  Unknown to Maher, Michael shared some of these tips with his own friends, including Bassam Salman.  After making a significant amount of money trading on those tips, Salman was charged with insider trading and convicted following a jury trial.

Under a major 2014 ruling from a federal court in New York, Michael and Salman would have been protected from liability because they did not buy any stock tips from Maher or give him a share of their gains.  That 2014 case, United States v. Newman, emphasized the legal requirement that an insider receive a “personal benefit” from the recipient of a tip before the tippee could be charged with insider trading.  This requirement offered powerful protections for innocent parties who traded on tips they received without doing anything wrong.

But the Supreme Court ruled today that the personal gratification that a tipper enjoys when giving free information as a gift to a friend or relative is enough of a “personal benefit” to satisfy insider trading laws.  This all but does away with the personal benefit requirement, since it presumes that an insider benefits even when he receives nothing for information that he shares with another.

At one level, this may seem to make sense on the facts of Salman’s case.  One of the Court’s concerns was that a free stock tip may be no different from an insider trading on his own behalf and then giving the money away.  And that concern applied with particular force to Maher and Michael, since on one occasion Maher actually offered his brother money but was asked to give him inside information instead.

But the Court easily could have ruled narrowly on that basis; it did not.  Instead, by ruling that “the benefit one would obtain from simply making a gift of confidential information to a trading relative” is sufficient to satisfy insider trading laws, it has essentially removed one of the key limitations to the scope of insider trading laws, allowing for even an unthinking tip to a friend or relative to be the basis for criminal prosecution.  And although the Court left open the possibility that some gifts may not be meaningful enough to give rise to criminal liability, the breadth of today’s ruling suggests that exception is likely to be both small and difficult to prove.

That means that we should all be particularly careful as we get together with our families this December, particularly if a relative in the finance industry—or, indeed, in the corporate sector at all—offers up a stock tip at a family gathering.  Because the joy of giving can now lead to criminal exposure for the whole family.

Ifrah Law is a leading white-collar criminal defense firm that focuses on financial services.

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About Ifrah Law

Crime in the Suites is authored by the Ifrah Law Firm, a Washington DC-based law firm specializing in the defense of government investigations and litigation. Our client base spans many regulated industries, particularly e-business, e-commerce, government contracts, gaming and healthcare.

Ifrah Law focuses on federal criminal defense, government contract defense and procurement, health care, and financial services litigation and fraud defense. Further, the firm's E-Commerce attorneys and internet marketing attorneys are leaders in internet advertising, data privacy, online fraud and abuse law, iGaming law.

The commentary and cases included in this blog are contributed by founding partner Jeff Ifrah, partners Michelle Cohen and George Calhoun, counsels Jeff Hamlin and Drew Barnholtz, and associates Rachel Hirsch, Nicole Kardell, Steven Eichorn, David Yellin, and Jessica Feil. These posts are edited by Jeff Ifrah. We look forward to hearing your thoughts and comments!

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