Establishing the fundamentals of VICAR racketeering prosecutions

At the government's request, the Sixth Circuit has published its previously unpublished decision in United States v. Odum, an appeal (after a multi-defendant jury trial) by two members of the Phantom Motorcycle Club. The decision is important because it sets forth several basic propositions of law regarding violations of the violent crimes in aid of racketeering activity statute, 18 U.S.C. § 1959 (aka, "VICAR"). 

The government frequently seeks to prosecute these types of "outlaw motorcycle clubs" for racketeering offenses by arguing the "club" is a "criminal organization" for purposes of the criminal RICO statute.

"An advantage of VICAR over RICO," according to the National District Attorney Association, "is that VICAR requires only one criminal act to be proven, provided that it is violent and is carried out for personal monetary gain or for status within a gang."

In moving to publish, the government argued that the Odum opinion establishes "two significant points" about VICAR for which there was previously no published law in the Sixth Circuit.

First, the opinion relied on a Second Circuit case (dating back to 1992) to set forth five elements the government must prove to establish a VICAR offense:

1. that the Organization was a RICO enterprise,
2. that the enterprise was engaged in racketeering activity as defined in RICO,
3. that the defendant in question had a position in the enterprise,
4. that the defendant committed the alleged crime of violence, and
5. that his general purpose in so doing was to maintain or increase his position in the enterprise.

Second – and likely the primary reason the government sought publication – is that the court held that the government does not have to prove that the defendant actually knew that the enterprise was engaged in racketeering to establish a VICAR offense. The court reasoned that "grafting [a] knowledge-of-racketeering requirement onto the statute would allow acts contemplated by VICAR to escape prosecution under the statute." For example, if so interpreted, "VICAR might not cover an individual who commits a violent crime as a part of gaining entry to a gang but who does not have specific knowledge of the group's racketeering activities." Additionally, the court emphasized that "[s]everal courts have explicitly applied RICO's 'liberal construction' rule to VICAR, as VICAR was enacted for a similar remedial purpose."

As an interesting aside, this is the third time since I starting writing for this blog a couple of years ago where the U.S. Attorney's Office for the E.D. Mich. has moved to publish favorable decisions (see also here and here). This may be a tactic to borrow given the frequency of unpublished decisions in the Sixth Circuit.

Mandates matter

Today's opinion in Luke Patterson's second appeal showcases an unfortunate situation in which the appeal mandate made a big difference. The case breaks down into four rounds.

In Round One – Patterson's initial sentencing – he avoided the 15-year mandatory minimum under the Armed Career Criminal Act because the trial court refused to treat his prior Ohio aggravated burglary convictions as "violent felonies."

But in Round Two – Patterson's first appeal – the government cross-appealed, and the Sixth Circuit ultimately agreed that Patterson should've been sentenced under ACCA. The court's mandate said that it "reverse[d] the ruling that Patterson did not have three previous convictions for a violent felony, vacate[d] Patterson's sentence, and remand[ed] for re-sentencing."

In Round Three – Patterson’s re-sentencing – Patterson argued that his three offenses should instead be treated as one for purposes of ACCA. But the trial court felt itself constrained by the Sixth Circuit’s mandate, and imposed the 15-year mandatory minimum.

Which brings us to Round Four – Peterson's second appeal, which prompted today's decision in United States v. Patterson, No. 17-3706. 

In this second appeal, Peterson argued that the trial court erred in refusing to consider his "single offense" argument on remand. But the Sixth Circuit disagreed, relying on the two components of the "mandate rule" from United States v. O'Dell, 320 F.3d 674 (6th Cir. 2003): 

1. The mandate from the first appeal permitted only a limited remand, not a remand where Patterson could again challenge his ACCA designation.
2. Patterson could not re-raise on remand an issue ripe for review during his initial appeal.

The Sixth Circuit, "out of an abundance of caution," also decided that the "single offense" argument lacked merit.

The court's strict application of the rule from O'Dell highlights the (somewhat daunting) importance of raising issues on appeal that may be at play if the case is remanded.

How can municipalities collect unpaid taxes on property subject to criminal forfeiture?

What happens when a municipality wants to collect unpaid taxes on property subject to criminal forfeiture?

The Sixth Circuit dove into that surprisingly complicated question this week in United States v. Hall, No. 16-6512.

Knox County, Tennessee, asserted a first-priority lien for delinquent property taxes on George Hall's property after he agreed to forfeit the property as obtained with the ill-gotten proceeds of an illegal gambling scheme. The County asked the court to, among other things, (1) hold a hearing to adjudicate the County's interests, (2) order the interlocutory sale of the property, and (3) delay the final order of forfeiture until the property could be sold.

The government told the court that its standard practice was to pay these sorts of taxes but only up until the date the government took title to the property. The government objected to delaying entry of the final order (and to the levying of taxes during any such delay), arguing that it would allow the County to circumvent the ban on local municipalities levying taxes on federal properties.

The district court denied the County's requests altogether -- for lack of standing. First, it held that the County lacked standing to ask for ongoing taxes because as soon as the court entered the final forfeiture order, the County had no legally cognizable interest in the taxes accruing on property owned by the federal government. As to back taxes, the court also held that the County lacked standing because the government had already promised to give the funds to the County, and thus the court couldn’t offer any redress to the County.

The Sixth Circuit wasn’t impressed, finding that the "district court’s approach falter[ed] on several levels." Among other things, the County's assertion of an interest in tax revenue was enough to establish standing. Moreover, contrary to the district court’s conclusion, "any number of court orders would likely redress the injury Knox County would suffer if its tax lien were not satisfied."

The Sixth Circuit pointed to a better approach: "Rather than resolving this case at the jurisdictional stage, the district court and the parties should have followed the procedures set forth in 21 U.S.C. § 853(n) and the Federal Rules of Criminal Procedure" (particularly Rule 32.2).

Ultimately, the Sixth Circuit required a re-do, vacating the forfeiture order and remanding the case for further proceedings to determine "the scope of Knox County's legal interest." The court also concluded, however, that the district court did not abuse its discretion by refusing to require the interlocutory sale of the property. It emphasized the wide discretion granted to district courts in determining whether such sales are appropriate.

Along the way to its decision, the Sixth Circuit laid out several substantive and procedural tips on how this process should proceed, making this opinion a useful resource for anyone faced with a similar situation.

Photo courtesy: 401(k) 2012

Destruction of evidence and private actors

The defendants in United States v. Folad rigged ATMs to spit out $20 bills whenever a $1 bill was requested.  They obtained for $600,000 pursuant to this scheme.  They were caught and prosecuted in the Middle District of Tennessee. 

The issue on appeal related to the destruction of evidence - after the scheme was found out, the bank replaced most of the ATMs with other machines.  This, the defendants claimed, violated Due Process, as the machines contained evidence which would have exonerated them. 

The Sixth Circuit found that, because the bank was a private actor, and was not goaded by the Government into destroying the evidence, there was no Due Process claim.  "No precedent from the United States Supreme Court or this Court supports the idea that the government violates a criminal defendant’s due process rights when a private party, with no support from the government and no inducement by the government, fails to preserve relevant evidence."

The defense, citing to a Ninth Circuit case (Miller v. Vasquez, 868 F.2d 1116, 1120 (9th Cir. 1989)), argued that "bad faith" of a private actor in destroying exculpatory evidence could amount to a Due Process violation.  Interestingly, the Court did not dismiss this theory, but held that the defendants had not proven that bad faith occurred in this case.

Don't Bring a Gun to a Felony

Consider the following interaction between three people: Darryl Jackson (the defendant); Cecil (the confidential informant), and Peter (the undercover police officer):

[Darryl emerges from a nearby house]

Cecil: Hey, Darryl, I’d like to buy a gram of heroin.

Darryl: Sure thing. That will be $120.

[After Darryl hands Cecil the heroin]

Cecil: Hey, I’m in a bit of a pickle. Do you know where I can pick up a pistol?

Darryl: Not really… Well, I might have one I can sell you.

Cecil: I’ll buy it from you for $300.

Darryl: How about $400?

Cecil: Deal.

[Darryl walks to a different house down the street and returns a few minutes later. Darryl and Cecil exchange the pistol for cash and depart.]

[A few days later]

Darryl: Hey, Cecil, I have another gun for sale for $500.

Cecil: Sure, let’s meet where we met up last time.

[The two meet and make the transaction.]

Cecil: Hey, I know someone else who wants to buy some heroin. Are you interested?

Darryl: Sure.

Cecil: Great, let’s meet at that car over there.

[Darryl walks to get heroin. Cecil leaves the area and gets into the police car with Peter. A few minutes later, Darryl gets in the car.]

Darryl: Here’s your half-gram of heroin. That’ll be $45.

Peter: Here you go. Thanks.

[End Scene.]

What do you think? Did Darryl use or possess those guns in connection with the drug transactions? That was the question the Sixth Circuit had to answer in United States v. Jackson.

U.S.S.G. § 2K2.1(b)(6)(B) requires increasing the offense level “[i]f the defendant . . . used or possessed any firearm or ammunition in connection with another felony offense.” To answer that question, the Sixth Circuit helpfully outlined the typical circumstances where the enhancement applies:

• Fortress: When guns are in close proximity to the drugs, and so the judge can infer that the defendant kept the guns nearby to protect the drugs or to intimidate buyers.
•  Pot Sweetener: When guns and drugs are part of a package deal. For example, if the sale is for 60 pills and a shotgun in exchange for $600, instead of $400 for the pills alone.
• Currency: Using firearms as currency in exchange for drugs. For example, 1 gram of heroin in exchange for one rifle.

The majority of the panel concluded that the events described above did not fit within any of these three theories. First, the majority asked, How is the gun offering any offensive or defensive protection down the street? Not much. There was also no evidence Darryl brought a gun and  drugs to the second meeting either. As far as anybody knew, the guns and drugs were always separated or even in different houses.

Second, even though the gun and drugs were technically present during the second meeting, Darryl had already sold the gun to Cecil, and so there was no risk he would use the gun to facilitate the drug sale. 

Third, the guns never sweetened any of the deals. Each sale was isolated: two sales where Darryl received cash in consideration for heroin; and two sales where guns were exchanged for cash. The separate sales for separate consideration could hardly be part of the same sweet pot.  Nor did Darryl and Cecil ever use the guns as currency.

Because Darryl did not come armed during the sales, store guns and drugs together, trade guns for drugs, or negotiate the gun and drug sales together, § 2K2.1(b)(6)(B) did not apply to him. That finding of fact has tremendous consequences for Darryl; his guidelines range dropped from 110-137 months to 77-99 months. If he receives a 10-month downward variance as he did before, he could serve 33 fewer months in prison. That's nearly three years. In sentencing, findings of fact matter.

Onward! The Sixth Circuit Denies Rehearing En Banc in Raybon

Practitioners know, but the public may not, that some of the most consequential decisions courts make are not reported in the news or even in publicly available opinions. Indeed, some of these decisions don’t even come with much explanation.

Many federal prisoners who were sentenced as career offenders when the guidelines were still mandatory have been trying to get courts to consider whether their sentences are unconstitutional according to the rule announced in Johnson v. United States. Johnson held that the so-called residual clause of the Armed Career Criminal Act is unconstitutionally vague. The Supreme Court said that rule is retroactive, meaning that those who were serving sentences imposed because of the ACCA’s statutory mandatory minimum could have re-sentencing hearings. Although the Court held that Johnson’s rule did not apply to those who were designated career offenders under the advisory guidelines, the Court did not address the application of Johnson to the mandatory guidelines.

In August, the Sixth Circuit held that these prisoners sentenced during the pre-Booker years under mandatory guidelines could not use Johnson to get new sentences because their petitioners were not “timely.” A § 2255 motion is timely when filed within one year of “the date on which the right asserted was initially recognized by the Supreme Court, if that right has been newly recognized by the Supreme Court and made retroactively applicable to cases on collateral review.” 28 U.S.C. § 2255(f)(3). The court reasoned that these prisoners, like Jerome Raybon, who filed their § 2255 petitions within one year of the Johnson opinion had filed too soon because the Supreme Court has not yet said explicitly that Johnson’s holding applies retroactively to the mandatory guidelines. (Full disclosure: my office represents Mr. Raybon.)

Mr. Raybon filed a petition for rehearing en banc. Since that time, many prisoners who happen to reside in the Sixth Circuit have been denied the opportunity to litigate the legal questions raised in their petitions. The First Circuit has criticized the Sixth Circuit’s approach. But, on December 6, 2017, the Sixth Circuit denied Mr. Raybon’s petition because less than a majority of the judges voted to hear the case en banc.

That small decision carries significant consequences for prisoners in the Sixth Circuit. Attorneys representing these people should continue to argue that Raybon was wrongly decided. Maybe the full court will address the question at some other time. Until then, however, Raybon remains the law in Michigan, Ohio, Tennessee, and Kentucky unless the Supreme Court intervenes. The men and women sentenced pre-Booker must wait patiently in prison until that time if it comes at all.

Prosecution's use of cell-site location analysis upheld

Last week, the Sixth Circuit, on the government's motion, published the previously unpublished decision in United States v. Pembrook (which -- full disclosure -- I worked on). There are issues preserved for Supreme Court review -- claims related to Carpenter and Dimaya -- so I won't go into too many details. But because of the government's request to publish, I think it's useful to flag the case here.

In a nutshell, Pembrook was a four-defendant consolidated appeal in a Hobbs Act robbery case, with stacking 924(c) counts. Each defendant received 33 years in prison. A big part of the government's case was historic cell-site location information (from a "tower dump") that prosecutors used to argue that the defendants traveled from Philadelphia to the West-side of Michigan (where one robbery occurred) and then to the East-side of Michigan (where a second occurred) before returning to Philadelphia.

We challenged the reliability of the cell-site analysis on appeal, citing among other things the Sixth Circuit's criticism of cell-site analysis in United States v.Reynolds. But the court distinguished the type of analysis criticized in Reynolds by emphasizing that the cell-site analysis in Pembrook's case spanned "a much larger geographical area" -- i.e., state-to-state, East v. West side of Michigan. In the court's view, "[a]t this level of geographic distance, cell-site analysis is established as reliable."

The motion to publish argued that "[l]itigants have inundated federal courts in this circuit with claims challenging the propriety of testimony about cell site location analysis." The motion provides a snapshot of how the government may try to use this case in the future. Particularly, the prosecutor asserted that the court found "cell site analysis—generally—is sufficiently reliable to satisfy Daubert and Rule 702" and "is objectively tested and subject to peer review, and the absence of an error rate is irrelevant." The prosecutor added that "[t]he real question . . . is whether cell site location analysis is reliable in a particular case."

So at the end of the day, litigators still need to test the reliability of cell-site analysis in each particular case. But this opinion underscores, as the Supreme Court did recently at oral argument in Carpenter, that the ubiquity of cell phones and location data provides the government with a potentially powerful tool against criminal defendants.

No Right to Try

The Immigration and Nationality Act is a swampy mess of numbers, letters, and Roman numerals big and small. Trying to make sense of it is a challenge. For that reason, many people who have been served with a notice of removal retain counsel to guide them through the removal, a.k.a. deportation, proceedings.

When facing the possibility of deportation after serving one year in prison for being a drug user who possessed a firearm, Emilio Estrada decided to retain a lawyer to help him navigate the proceedings and to help interpret INA alphabet soup. Unfortunately, the lawyers he retained did not advise him that green-card holders who have been convicted of an aggravated felony, see 8 U.S.C. § 1101(a)(43)(E)(ii), can beg an immigration judge to allow them to remain in the United States, see id. § 1182(h) (INA § 212(h)). That provision of the INA permits an immigration judge to allow an immigrant to remain in the United States if his deportation would cause extreme hardship to his spouse, child, or parent who is a U.S. citizen or lawful permanent resident. The immigration judge did not inform Mr. Estrada of this fact. Mr. Estrada’s lawyer didn’t either. Instead, Mr. Estrada’s counsel admitted to all facts in the removal order, and Mr. Estrada was deported to Mexico.

Six years later, federal agents found Mr. Estrada in the United States, and he was charged with two counsel of illegal reentry following deportation. Mr. Estrada decided to put up a fight. He filed a motion to dismiss the indictment, collaterally attacking the fundamental fairness of his earlier removal proceedings.

To succeed, Mr. Estrada had to demonstrate all three of the following: (1) that he exhausted all available administrative remedies; (2) that the deportation proceedings deprived him of the opportunity for judicial review; and (3) that the entry of the removal order was fundamentally unfair. 8 U.S.C. § 1326(d). A fundamentally unfair removal hearing is one that deprives the deportee of due process, i.e., life, liberty, or property, and resulted in prejudice.

The Sixth Circuit held that Mr. Estrada could not prevail because the immigration judge and his attorney did not deprive him of any life, liberty, or property interest because the relief provided by § 212(h) is just discretionary. In essence, § 212(h) grants only an opportunity to try, not an affirmative right to remain. But, unlike the Second and Ninth Circuits, the Sixth Circuit does not believe the right to try is a constitutionally protected interest. Because Mr. Estrada was not deprived of life, liberty, or property, the court reasoned, the immigration judge did not deprive him of due process. The court also held that Mr. Estrada had no constitutional right to accurate and complete attorney advice either.

Unless the Supreme Court takes up this question that has caused a circuit split, Mr. Estrada will likely be convicted, sentenced to prison, and then deported. What hardship may befall his family members if he is deported remains unknown.

Court enforces plea waiver of future retroactive sentencing reductions

Regular readers of this blog will know that the Sixth Circuit has a history of broadly construing appeal waivers in plea agreements. Consider our posts on United States v. Griffin, United States v. Keller, and United States v. Luebbert.

This week's published decision in United States v. Clardy is in the same vein as those decisions but with a twist --  rather than challenging his appeal waiver, the defendant challenged the waiver of his right to take advantage of a sentencing reduction under 18 U.S.C. § 3582(c)(2).

Unfortunately for Clardy, his plea agreement explicitly referred to § 3582(c), stating that he "knowingly waives the right to challenge the sentence imposed in any collateral attack, including, but not limited to, a motion brought pursuant to 28 U.S.C. § 2255 and/or § 2241, and/or 18 U.S.C. § 3582(c)."

Clardy argued that this waiver was ambiguous for three reasons: (1) it was titled "Waiver of Appellate Rights," (2) it confusingly referred to a § 3582(c) motion as a "collateral attack," and (3) authority to reduce sentences belongs to the district court so defendants can't waive it. The Sixth Circuit rejected each argument.

This decision serves as an important reminder that defense attorneys need to carefully explain all provisions in a plea agreement to clients. 

I'd note also that the decision is limited to those situations where § 3582(c) is explicitly named in the plea agreement. If the text of a plea agreement never mentions § 3582(c), the defendant should still maintain the ability to take advantage of a subsequent change in the sentencing law that is made retroactive. In such cases, the plea agreement is at best ambiguous with respect to whether the defendant is waiving this important right, and any ambiguity in the agreement is construed against the government. See United States v. Goodloe, 388 F. App'x 500, 503 (6th Cir. 2010) (refusing to construe appeal waiver not explicitly naming § 3582 as sufficient to waive a defendant's right to file a § 3582(c) motion); United States v. Monroe, 580 F. 3d, 552, 556–57 (7th Cir. 2009) (same); United States v. Chavez-Salais, 337 F.3d 1170, 1173 (10th Cir. 2003) (same).