Friday, July 27, 2018

Tennessee Delivery of a Controlled Substance Qualifies as a “Serious Drug Offense” under ACCA

In a recently published opinion, the Sixth Circuit held that delivery of a controlled substance under Tenn. Code. § 39-17-417(a) is a “serious drug offense” under the Armed Career Criminal Act.  The Court rejected the defendant’s argument that the term “deliver” under Tennessee law is broader than term “distribute” under the ACCA.

Under the ACCA, the term “distribute” means to deliver, other than by administering or dispensing, a controlled substance.  Likewise, under Tennessee law, “distribute” means to deliver, other than by administering or dispensing, a controlled substance.  However, Tennessee law prohibits “delivery” while the ACCA includes convictions for “distribution.”

Accordingly, Mr. Goldston argued that delivery is broader than distribution, because the definition for distribution excludes delivery by administering or dispensing.  In other words, delivery necessarily includes delivery by administration or dispensation, while distribution excludes those two types of delivery.

Although the Sixth Circuit acknowledged that “at first glance there might appear to be merit” to this argument, the Court ultimately rejected it.  The Court held that Tennessee did not actually criminalize either administering or dispensing controlled substances, because the definitions of these terms necessarily included only legal deliveries.  Thus, delivery includes only one category of prohibited conduct, which is distribution. 

Opinion available here.

Sunday, July 15, 2018

Court Reverses Fraud Sentences Based on Faulty Loss Calculations

Defendants Zafar Mehmood and Badar Ahmadani ran several companies in Michigan that purported to provide home health services to home bound patients.  The United States, however, alleged they ran a complicated scheme to defraud Medicare.  A jury subsequently convicted both defendants of conspiracy to commit health-care fraud and of engaging a conspiracy to pay and receive kickbacks.  In addition, the jury convicted Mehmood of health-care fraud, conspiracy to commit money laundering, money laundering, and obstruction of justice.  After calculating the amount of loss for each defendant, the District Court sentenced both defendants to below-Guidelines sentences and ordered them to pay approximately $40 million in restitution.

On appeal, both Mehmood and Ahmadani challenged their convictions and sentences.  Although the Court found the District Court committed plain error by not following the procedures outlined in the Court Interpreters Act in finding that Mehmood waived his right to an interpreter during trial, it held the error did not require reversal since he presented no evidence he did not understand the proceedings or that the error otherwise affected the outcome of his trial.  The Court also dispensed with the defendants' remaining arguments against their convictions.

The Court, however, viewed the defendants' sentences differently.  In particular, Mehmood argued the district court erred in calculating his loss based on the full amount of gross billings submitted by his companies between 2006 and 2011—amounting to $47,219,535.47 -- even though he presented evidence that some of his billings were legitimate.   The district court concluded that since Mehmood made fraudulent representations to Medicare, it could consider all of his billings fraudulent and Mehmood could not offset any of the loss amount.  Citing precedent from the Eleventh Circuit and the Guidelines, the Court disagreed and held the district court erred by not first considering whether any of the medical services were legitimate before counting all of his claims as losses.  This error, the Court concluded, was not harmless, because it was a procedural.

The Court similarly reversed Ahmadani's sentence, albeit on different grounds.   On appeal, Ahmadani claimed the district court erred in assessing his total loss at $38,150,113.64 because it included Medicare claims submitted after he was no longer listed as a co-owner of one of Mehmood's companies.  The Court agreed, holding that the district court incorrectly relied upon Sixth Circuit precedent in United States v. Shannon and that it should have relied on USSG § 1B1.3(a)(1)(B) instead of § 1B1.3(a)(2).  Noting the district court failed to make a finding that Mehmood's conduct was reasonably foreseeable to Ahmadani, the Court concluded it committed plain error and remanded the matter for resentencing with an instruction to reconsider his sentence under USSG § 1B1.3(a)(1)(B).

This case is a good example of thorough defense advocacy.  Both defendants faced an uphill battle in challenging their loss calculations (Mehmood would have had to reduce his loss calculation by $15 million to reach the lower range); yet, they persisted in their challenges.  In the end, the process mattered as the Court found that the district court erred in calculating their loss figures.

The opinion is styled United States v. Mehmood, and you can find it here.  

Tuesday, July 10, 2018

Court upholds 2255 waiver provision

Defendant Slusser entered a guilty plea back in 2011.  As part of the plea, he agreed to not file any "motions or pleadings pursuant to 28 U.S.C. section 2255."  Despite this, he filed one in 2012.  It was denied.  In 2016, after Johnson v. United States, 135 S. Ct. 2251 (2015), he filed leave to file a second or successive petition.  The Sixth Circuit granted leave to file a petition, and remanded to the district court.  The district court ultimately denied the motion.

On appeal, the Government pressed the issue that Slusser had waived his right to file a 2255 petition as part of his plea agreement.  The Court determined that, in fact, the waiver provision was enforceable.  The Court further dismissed the claim that Slusser could not have voluntarily waived his right to attack a sentence above the statutory maximum.  The Court dismissed prior case law references by Slusser as dicta, and held "Slusser waived his right to collaterally attack his sentence, including his designation as an armed career criminal. The subsequent developments in this area of the law 'do[] not suddenly make [his] plea involuntary or unknowing or otherwise undo its binding nature.'”

Sunday, July 08, 2018

Those Devilish Details: Forfeiture and Restitution

At sentencing proceedings, the parties usually focus on the amount of time the defendant will spend in prison. In certain cases—like fraud cases—the focus of the proceedings shifts to the amount of money to be forfeited or paid in restitution. Sometimes these calculations are complicated. Very often, the money is never collected. But that does not mean there aren’t things to fight about on appeal!

Daniel Sexton and others managed to convince multiple banks to lend them more than $8.1 million. Once these banks and the government got wind of this scheme, charges and pleas followed. The sentencing judge imposed a sentence of 109 months’ incarceration and ordered Sexton to pay over $2.6 million in restitution and to forfeit property, including a money judgment of over $2.5 million. Although Sexton did not challenge the restitution or forfeiture orders in the district court, he did so on appeal. (He also challenged the calculation of his guidelines and the substantive reasonableness of the sentence, but those holdings are not the subject of this appeal.)

The Sixth Circuit’s published opinion is interesting for two reasons. First, the Sixth Circuit split with the Third and Eleventh Circuits. Second, the judges divided over the question about how to apply plain-error review.

On the first issue, the court grappled with the applicability of the Supreme Court’s interpretation of 21 U.S.C. § 853 issued in Honeycutt v. United States, 137 S. Ct. 1626 (2017). Section 853 provides: “[a]ny person convicted of a violation of this subchapter . . . shall forfeit to the United States . . . (1) any property constituting, or derived from, any proceeds the person obtained directly or indirectly as the result of such violation.” The Supreme Court clarified that the defendant must have actually obtained the property and the property must be tainted, i.e., the product of criminal activity. The italicized phrase was the reason the government must prove the defendant actually obtained the property. It also becomes important later.

18 U.S.C. § 981(a)(1)(C) differs slightly from § 853. It provides, “[a]ny property, real or personal, which constitutes or is derived from proceeds traceable to a violation of section . . . 1334 of this title . . . or a conspiracy to commit such offense” is “subject to forfeiture to the United States.” Missing from this text is the phrase “the person obtained,” which the Sixth Circuit reasoned, means defendants can be liable to forfeit property they did not personally acquire. In other words, as long as the property is connected to the crime, the defendant is liable, even if the property is in the possession of co-defendants. Note that, in this instance, the court addressed whether the district court committed error even though it could have said that any error that may have occurred was not plain.

When the Sixth Circuit turned to the restitution issue, another recent Supreme Court case came into play: Lagos v. United States, 138 S. Ct. 1684 (2018). The Sixth Circuit made clear that Lagos abrogated the holding of United States v. Elson, 577 F.3d 713, 726 (6th Cir. 2009) (remember to Shepardize!). But, in this case, the court rested its decision to affirm the restitution order on the first prong of plain-error analysis. You see, the government never clarified whether money paid by one of the banks was connected to its participation in the investigation or prosecution of the crime. Because of this lack of certainty, the majority said that the district court’s error was not clear or obvious.

Judge Moore disagreed with the majority’s approach to pain-error analysis. She would have vacated the restitution order because courts of appeals must apply the law in effect at the time of the appeal, and the government always has the burden of proof to establish victims are entitled to restitution. In Judge Moore’s view, the fact that the defendant did not object to the restitution amount in the district court did not matter when the record made plain that the government had not satisfied its burden in the first instance.

In the end, the dispute is about $12,554.14 the bank will likely never receive. But Sexton provides an example of how some judges approach plain-error review. It also serves as a reminder to trial counsel: object to those devilish details!

Thursday, July 05, 2018

Intentional Assault by Any Other Name is Still Intentional Assault

Is an intentional assault committed during an extreme emotional disturbance a “violent felony” for the purposes of the Armed Career Criminal Act? In United States v. Maynard, the Sixth Circuit says it is.

Kentucky allows defendants accused of committing first, second, or fourth-degree assaults to mitigate their conduct by presenting evidence that, at the time of the assault, they were “under the influence of extreme emotional disturbance.” Ky. Rev. Stat. § 508.040. In a published opinion, the Sixth Circuit clarified what the court had already said in unpublished opinions: the mitigating factor does not change the fact that the statute has as an element the actual, threatened, or attempted use of physical force. The statute requires proof that the defendant actually caused physical harm, and so the court had no trouble finding that the Ky. Rev. Stat. § 508.040 qualifies as a violent felony under the elements clause of the ACCA.

The overall takeaway of Maynard is this: statutes that permit mitigation arguments do not alter the elements of the offense.

In a very short concurrence, Judge White makes clear that she concurred only because United States v. Anderson, 695 F.3d 390 (6th Cir. 2012), which interpreted Ohio’s felonious assault statute, compelled the conclusion. Sixth Circuit court watchers may be interested to know that the Sixth Circuit had en banc arguments in June to address whether Anderson was correctly decided. See Williams v. United States, 875 F.3d 803, 807–09 (6th Cir. 2017) (Moore, J.) (explaining why Anderson was incorrect). True nerds anxiously await the en banc court's forthcoming opinion.

Monday, July 02, 2018

Procedural error to impose steep sentencing increase based on online article, without notice to parties

The Sixth Circuit on Friday, in United States v. Fleming, condemned a sentencing court's decision to "surprise" the parties by varying upward by five years based on a short newspaper article published a couple days before sentencing.

Here's what happened:

 Both sides walk into sentencing, expecting a 60-month sentence for a cocaine crime.

 On counsel’s table is a very short (just over 200-word) article summarizing an Ohio state report about overdose deaths from cocaine mixed with opioids.

 At the start of the hearing, the court says it plans to consider the newspaper article, but doesn’t say how.

 Both sides recommend a 60-month guideline sentence. Neither discusses the article.

 District court varies upward by 5 years, to 120 months, based on the newspaper article.

The Sixth Circuit reverses. 

Notably, the defendant’s crime dealt with cocaine alone, not cocaine mixed with opioids. The defendant also contested on appeal the way the newspaper article summarized the state report.

The Sixth Circuit found that it was procedural error – and “plain error” at that – for the judge to base its upward variance on the article without giving the defendant notice. The newspaper article was littered with potential errors, and the court’s procedure deprived the parties of a meaningful way to challenge it as unreliable.

This district judge has a recent history of being reversed and removed from cases, which led to some discussion at oral argument, and in the opinion, about whether this case should be re-assigned to a different judge. Ultimately, the court concluded that the judge will be able to follow its instructions on remand.