Sunday, June 21, 2015

Using Access Devices: the Sentencing Challenge

The Sixth Circuit has twice rejected challenges to the Government’s proof of usability of an unauthorized access device at sentencing (determined under U.S.S.G. § 2B1.1). In both cases, defendants, relying on United States v. Onyesoh, 674 F.3d 1157 (9th Cir. 2013), argued that the Government must establish the “usability” of an access device when calculating loss. In Onyesoh, the Ninth Circuit held that the usability of some access devices may not be readily apparent. There, the Government conceded that “credit card numbers that had expired 35 years ago and were useless . . . would not be covered under the statute.” Id. at 1160. Given that concession and after searching the record, the Ninth Circuit found no evidence to support the usability of certain credit card numbers that “had been expired for some three years” and “no showing Defendant ever took steps or attempted to use the expired numbers.” Id.

In United States v. Vysniauskas, 11-2503 (6th Cir. January 7, 2015), the Sixth Circuit nominally assumed without deciding that the Government must establish usability consistent with Onyesoh. Like Onyesoh, Vysniauskas challenged only the addition of certain access devices in the computation of his sentence. But unlike Onyesoh, the Sixth Circuit did not require any evidence of the usability of the challenged access devices. Instead, the Sixth Circuit relied on the district court’s finding that the challenged access devices were associated with the overall fraudulent scheme because “they helped provide a cover of ordinary activity that lowered the banks’ suspicions of the fraudulent withdrawals.” Vysniauskas at 16. The Sixth Circuit held that such evidence justified the inclusion of those access devices when determining the appropriate loss calculation.

In United States v.Beuns, 14-3326 (6th Cir. June 8, 2015), the Sixth Circuit again assumed without deciding the validity of Onyesoh. In Beuns’ sentencing memorandum, he conceded that he had “embossed and encoded [the contested numbers] on plastic cards,” then “attempted to purchase merchandise with the counterfeit cards.” Beuns at 5. That concession was fatal to Beun’s argument even under Onyesoh.

In Beuns, the panel also expressed some reservation about the validity of Onyesoh by noting that the Ninth Circuit subsequently upheld a sentence (in an unpublished decision) on apparently less evidence than Onyesoh would require. See UnitedStates v. Tien Troung Nguyen, 543 F. App’x. 715 (9th Cir. Cal. 2013). But there is no evidence from the Nguyen decision that the Ninth Circuit considered Onyesoh. Just as the Beuns panel did not cite Vysniauskas, the Nguyen did not cite Onyesoh.

The Onyesoh decision invites a fact-specific challenge to the calculation of unusable access devices when calculating loss at sentencing. Counsel should consider whether the Government has evidence of usability (or actual use) when presenting sentencing arguments and subsequently on appeal.

Friday, June 05, 2015

The plea agreement that wasn't

Let's say you committed a crime. Maybe it involved a fraud related to "antioxidant-rich whole food puree," or maybe it involved apocryphal gold bars supposedly buried by the Japanese during World War II, or maybe it involved both -- we're just spit-balling here. The government has you dead-to-rights, more or less, so you're going to plead guilty. They make you this offer: if you plead guilty (thereby relieving the government of its need to do more work on your bizarre case), they will agree to recommend to the court that you should receive a three-year sentence. If you hold up your end of the bargain and plead guilty, you would have reason to believe that the government would, in fact, make a good-faith effort to recommend a three-year sentence, right?

No. You would not. At least that's the Sixth Circuit's conclusion in the Reed opinion, published today. Rather than uphold the deal it had entered into, the government in this case told the district court how much of a liar Mr. Reed was and how many people he had injured. At the end of the sentencing hearing, just before the court was about to pronounce its sentence, the court stated that "the government has agreed pursuant to the plea agreement to recommend a three-year term of custody." Mr. Reed objected to the obvious: the government never actually had recommended a three-year term of custody. On cue, the government stated that it "recommended a three-year sentence," and Mr. Reed objected that this was too late. The district court rejected Mr. Reed's argument, stating that the prosecutor (who had just demonstrably failed to uphold his end of the bargain) was "unimpeachable"  and noting that the plea agreement itself constituted a recommendation. You heard that right: an agreement to do something actually means you did that thing. The court sentenced Mr. Reed to seven years' custody. Seven years, which is more than three.

In a published opinion, the Sixth Circuit denied relief. Thankfully, it rejected the district court's reasoning that an agreement to pay $10,000 for a car is the same thing as actually paying $10,000 for a car, noting that "[t]his might be a different story if the government had failed to make any recommendation outside the plea agreement itself." The opinion concludes that "[t]he prosecutor was obligated to fulfill his promise -- which he eventually did." The opinion further notes that "[t]he government never advocated for a sentence over three years," so Mr. Reed can take some consolation in that for the next seven years.

I will say what the Sixth Circuit did not say here: regardless of whether Mr. Reed's sentence should be upheld, the prosecutor should not have done this. The prosecutor's promise was as false as the Japanese gold bars from World War II, and prosecutors should be held to a higher standard than fraudsters.

Tuesday, June 02, 2015

Internet Threats—A Time Machine Reflection

To be convicted of threatening people, a defendant must intend to be threatening. Harkening to doubts expressed by Judge Sutton in his United States v. Jefferies dubitante opinion (covered by this blog in August 2012), the Supreme Court agreed that “[h]aving liability turn on whether a ‘reasonable person’ regards the communication as a threat—regardless of what the defendant thinks—‘reduces culpability on the all-important element of the crime to negligence.’” Elonis v. United States, No. 13-983, Slip Op. at 8 (June 1, 2015). Rejecting a negligence standard (and reversing the conviction), the Court left open the question of whether some degree of recklessness could meet the requisite scienter for conviction and did not address potential First Amendment arguments. Id. at 16-17.

          Both cases involved the liberal use of creative lyrics on social media accounts. The lyrics are included in the respective opinions (Judge Sutton describes Jefferies’ efforts as “part country, part rap, sometimes on key, and surely therapeutic”) and are worth review—particularly to lend insight on what can happen in a time of increasing use of social media and mobile access. Notably, “friends” or “followers” of the both defendants took the posts to law enforcement. Since the context of such posts will likely be instrumental in determining the mental state of future defendants, attorneys will need to understand content and access restrictions (if any) when addressing future cases.

And thus began the limiting of Rodriguez v. United States

It was only a little more than a month ago that the Supreme Court issued its opinion in Rodriguez v. United States, 135 S. Ct. 1609 (2015), holding that it is unlawful for officers to prolong a traffic stop beyond the time reasonably required to complete the purpose of the stop. But anyone expecting Rodriguez to dramatically reshape the caselaw landscape for suppression litigation was bound to be disappointed. Today's Zuniga opinion --- apparently the first in the Sixth Circuit to cite Rodriguez --- suggests that the Sixth Circuit is unlikely to use Rodriguez to justify suppression in many more traffic stops than it had previously.

Mr. Zuniga was driving a truck that passed a police car and then allegedly spent too much time between lanes while merging back. This was enough to constitute an "improper or unsafe lane change" and an "improper or unsafe lane usage," which are, evidently, crimes. Perhaps unsurprisingly, the traffic stop lasted longer than is normally required to issue a citation for an improper lane change. Indeed, it took thirty minutes, and it involved a dog, a drill, and a fiber-optic scope to view inside the vehicle's fuel tank. (Did we mention that Mr. Zuniga was Hispanic and driving a vehicle with out-of-state plates?) If you think this sounds a lot like the facts of Rodriguez, you're not that far off. But the Zuniga opinion's preferred method of sidestepping Rodriguez is to find that the officer was perfectly reasonable in prolonging stop because Mr. Zuniga (1) admitted to not being an undocumented immigrant, (2) took too long in pulling over, (3) acted "nervously" in speaking with officers, (4) gave inconsistent responses regarding his travel plans, and, most damningly, (5) the FBI had received some information that a vehicle matching the description of Mr. Zuniga's truck was involved in drug activity. Thus, the officer "had reasonable suspicion to extend the stop for further investigation."

This result is not entirely surprising under the facts of this case, but it suggests that the circuit courts will take a limited view Rodriguez's holding, and it certainly hints at where Rodriguez litigation will focus in the district courts.