Thursday, February 16, 2012

Untie a Sentencing Knot at Your Own Risk

The unpublished case of US v. Faulkenberry, (available here) illustrates the risk of higher sentencing many defendants face on remand.

Faulkenberry was originally sentenced to 120 months in a “sentencing bundle” consisting of concurrent sentences on multiple counts for money laundering, wire and securities fraud. The Sixth Circuit vacated the money laundering convictions, and remanded for resentencing – noting “Had the district court known that the money-laundering convictions were invalid, it might have chosen to make some of the other sentences consecutive rather than concurrent.” (The earlier opinion is at US v. Faulkenberry, 614 F.3d 573 (6th Cir. 2010)).

The district court followed this lead, imposing a total of 120 months at resentencing, changing two sentences from concurrent to consecutive. Faulkenberry appealed on double jeopardy and due process grounds.

Because a defendant who appeals his sentence can have no “legitimate expectation of finality” in that sentence, the Court (quoting the Second Circuit) explained defendants assume the risk of “untying the intricate knot of calculations should he succeed [on appeal]:”

When a defendant challenges convictions on particular counts that are inextricably tied to other counts in determining the sentencing range under the guidelines, the defendant assumes the risk of undoing the intricate knot of calculations should he succeed. Once this knot is undone, the district court must sentence the defendant de novo.

Monday, February 13, 2012

Unpublished Highlights

A few highlights from today's unpublished opinions:

US v. Shawn Taylor, No. 09-5315 (available here)
Ankle bracelets cost $575. You break it, you buy it.

US v. VanderZwaag, Nos. 10-1413, 10-1415 (available here)
Special verdict forms are not required for aiding and abetting charge, even though it is later impossible to determine if jury convicted defendants either as a principal or as an aider or abettor, or both.

The opinion also provides guidance for the difficult calculation of fraud loss under § 2B1.1:
- Loss is calculated as the amount loaned as a result of the fraud, reduced by the value of the collateral pledged.

- Comment 3(a) to USSG § 2B1.1 provides that “loss is the greater of actual or intended loss.”

- When a district court is not able to calculate the loss, the commentary to the guidelines permit the court to base the punishment on the defendant’s gain, under U.S.S.G. § 2B1.1 n.3(B).

- Where the fraud occurs in connection with collateral pledged for a mortgage, the defendant is entitled to a reduction in the loss amount as a result of the sale of the collateral, or the fair market value at the time of sentencing, under U.S.S.G. § 2B1.1 n.3(E)(ii).

US v. Dr. Catro-Ramirez, No. 10-2128 (available here)
The parties cannot introduce contents of an entire computer; rather, evidence is limited to relevant files.

US v. John R. Tolbert, Jr. No. 10-5688 (available here)
Under Tapia v. United States, 131 S.Ct. 2382, 2393 (2011), a district court may state the sentence allows “the opportunity to rehabilitate himself” and may discuss rehabilitative opportunities in prison.

Thursday, February 02, 2012

EDTN is on a Winning Streak

There have been some big wins in big cases this week for the Eastern District of Tennessee. First, the Sixth Circuit vacated the sentence in a major case against the former Sheriff Long. In that case, the government attempted to manufacture increases to the defendant’s offense level based on conspiracies that never happened (it was just a CW telling the defendant that the conspiracy existed). Apparently the government cannot always just make up a number and then use that number to sentence the defendant without some actual conduct on the defendant’s part.

Then today, the Sixth Circuit handed down United States v. Parkes, a multimillion dollar bank fraud case where the defendant’s conviction was overturned due to insufficient evidence. But the bigger news in this case (not for the defendant, but for practitioners) was that the Court then went on after reversing the conviction to smack down the prosecutor for lying to the jury in closing arguments.

In this case the bank made a loan to a company, but then the company started losing money and the loan was therefore considered to be a bad loan. The alleged fraud involved repackaging the loan which had gone bad and turning it into other loans so that the FDIC would not investigate the bank and discover the bank president’s embezzlement. The interesting thing about this case is that the defendants, whose company was the beneficiary of the original loan, ended up paying off about $3.2 million of the $4 million loan before trial and was continuing to make payments. At first, the prosecutor fought hard to keep the jury from finding out the defendants had paid back most of the money. But then during closing arguments, the prosecutor stood up and told the jury,

“Your Government just wants you to do what is right. And if it’s right to acquit [Parkes and Mourier], you do it, you let them keep the $4 million, you tell the government, ‘Shame on you for persecuting these poor people.’”

The government basically told the jury that if they acquitted, the defendants would get away with $4 million, something the government knew was not true. This prompted the Sixth Circuit to take some extra time to tell the prosecutor that his transgression was serious and his arguments to the contrary were lame.