Did Holder’s Charging Policy Really Matter? – Update for May 22, 2017

We post news and comment on federal criminal justice issues, focused primarily on trial and post-conviction matters, legislative initiatives, and sentencing issues.


The media continued its feeding frenzy last week about Attorney General Jefferson Beauregard Sessions’ memo rolling back the Obama kinder-and-gentler drug charging and sentencing policies.

sessionsmemo170522Numbers that DOJ cited last year suggest former AG Eric Holder’s Smart on Crime Initiative had a substantial effect on the percentage of federal drug offenders facing mandatory minimums. According to Sentencing Commission data, the share of federal drug offenders subject to mandatory minimums has fallen steadily from 62% of all defendants in 2013 to less than 45% in 2016.

But as Benjamin Disraeli put it, there are three kinds of lies: “lies, damn lies, and statistics.” It turns out the Sentencing Commission number includes drug defendants who did not actually receive mandatory minimums. Many of them were subject to mandatory minimums, but escaped because they gave the feds “substantial assistance” or got “safety valve” treatment.

liesdamnlies170522A Federal Public and Community Defenders analysis, however, did toke those other forms of relief into account. That study found “6,780 defendants convicted under drug statutes carrying a mandatory minimum penalty… received some form of relief from the mandatory minimum penalties. All but 868 of those defendants were already eligible for relief, and judges gave 467 of them sentences longer than the mandatory minimums, which suggests the new rule would not have helped them.”

Out of the 6,780 defendants, only 8% “would likely have received a lower sentence if the Holder memo had been in effect in 2012.” The analysis suggests that the vast majority of drug offenders who seem to have benefited from the Holder 2013 memo — thousands each year — did not actually receive shorter sentences as a result of the policy change.

Deal170216The biggest change in sentencing resulting from the Holder memo is the one few are talking about. By cutting the number of drug defendants eligible for mandatory minimums, the new approach puts less pressure on defendants to cooperate with the feds. Ratcheting up the penalty will again increase the number of defendants willing to make a deal.

Reason.com, How Many Drug Offenders Benefited From the Holder Memo That Sessions Rescinded? (May 17, 2017)

– Thomas L. Root


The Court Giveth, The Court Taketh Away – Update for May 18, 2017

We post news and comment on federal criminal justice issues, focused primarily on trial and post-conviction matters, legislative initiatives, and sentencing issues.


cartheft170519Kapelle Simpson-El had, in an earlier life, sold cars. Stolen cars. The feds caught up to him, and he was duly locked up. His sentence included the mandatory restitution obligation, in Kapelle’s case about $433,000.

Kapelle did his time, and after he was released, he dutifully paid at least 5% of his monthly paycheck toward restitution. No surprise there: on supervised release, an offender can be sure that his or her probation officer is first and foremost a collection agent for the court.

It will come as little surprise to anyone who has received Bureau of Prisons medical care that Kapelle, who was injured in prison, received “inadequate medical attention and a lack of treatment” from Health Services. After he got out, Kapelle sued under the Federal Tort Claims Act, and settled with the government for $200,000.

lord170519At that point, the government asked Kapelle’s sentencing judge to modify his restitution payment based on Kapelle’s “material change in economic circumstances.” The government wanted him to turn over the entire $200k for restitution. The district court ordered Kapelle to apply $145,640 of the settlement funds toward restitution.

Under 18 U.S.C. § 3664(k), a court can adjust a restitution order when there is a “material change in the defendant’s economic circumstances that might affect the defendant’s ability to pay restitution.” The district court invoked this authority, reasoning that the settlement funds could affect Kapelle’s ability to pay restitution.

Kapelle appealed, arguing that the settlement was just intended to make up for “a lifetime of lost income.” Earlier this week, the 10th Circuit upheld the shakedown.

The Circuit complained that Kapelle’s “lost income” characterization “rests on a questionable factual foundation, for the settlement might have included some compensation for non-economic harm. After all, the settlement resolved a suit in which Mr. Simpson-El had claimed ‘hedonic damage to his quality of life’ as well as economic loss.” Even if Kapelle was right, the 10th said, the fact that money he would earn in the future was delivered to him now in a lump sum was “time-savings [that] could reasonably be viewed as a material change in economic circumstances.”

lottoThe Circuit panel said the district court properly considered Kapelle’s current economic condition. “The court stated the obvious,” the 10th wrote. “There was now a substantial new fund that had not existed before the time of the settlement. Pointing to the newly created fund, the court relied on a readily apparent change: Before the settlement, Mr. Simpson-El would have had to wait years to earn $200,000; after the settlement, he would immediately recoup $200,000.”

Of course, if Kapelle had earned the $200,000 over 10 or 15 years, he would have paid 5% of that (or $10,000) in restitution on it. Receiving it all at once, he paid at the rate of 72%. Of course, Kapelle’s victims would see no problem with such an outcome, and they would have a point. Still, the math is troubling.

United States v. Simpson-El, Case No. 16-3107 (10th Cir., May 17, 2017)

– Thomas L. Root


A Shot Across DOJ’s Bow – Update for May 19, 2017

We post news and comment on federal criminal justice issues, focused primarily on trial and post-conviction matters, legislative initiatives, and sentencing issues.


shot170522In an obvious shot across the Trump Administration’s bow, Senators Rand Paul (R-Kentucky), Patrick Leahy (D-Vermont) and Jeff Merkley (D-Oregon) on Tuesday reintroduced the Justice Safety Valve Act, S. 1127. Representatives Bobby Scott (D-Virginia) and Thomas Massie (R-Kentucky) did the same in the House of Representatives with H.R. 2435.

Earlier this week, Attorney General Jeff Sessions ordered federal prosecutors to bring the most serious charges and maximum sentences in their cases, meaning stricter enforcement of mandatory minimum sentences that was the rule under the Bush and most of the Obama administrations. The Justice Safety Valve Act would act as a check on that, giving federal judges discretion to impose sentences below mandatory minimums where they believed it necessary to honor the sentencing factors of 18 U.S.C. § 3553(a).

Attorney General Jefferson Beauregard Sessions III
      Attorney General Jefferson Beauregard Sessions III

“Mandatory minimum sentences disproportionally affect minorities and low-income communities, while doing little to keep us safe and turning mistakes into tragedies,” Paul said in a press release. “As this legislation demonstrates, Congress can come together in a bipartisan fashion to change these laws.”

Scott said, “Attorney General Sessions’ directive to all federal prosecutors to charge the most serious offenses, including mandatory minimums, ignores the fact that mandatory minimum sentences have been studied extensively and have been found to distort rational sentencing systems, discriminate against minorities, waste money, and often require a judge to impose sentences that violate common sense. To add insult to injury, studies have shown that mandatory minimum sentences fail to reduce crime. Our bill will give discretion back to federal judges, so that they can consider all the facts, issues, and circumstances before sentencing.”

The legislative equivalent of this...
     The legislative equivalent of this…

Although called “The Justice Safety Valve Act,” the bills do not really extend the “safety valve” provision in § 3553(f), which is a good thing. Section 3553(f) limits its application to people meeting a restrictive criteria. Instead, as presently drafted, the bill simply expands a judge’s discretion without any limitations imposed beyond those guiding courts under § 3553(a). In fact, the measures as written would strip away the last compulsory restrictions hold judges back from using discretion.

Paul acknowledged to reporters that lawmakers will have an “uphill battle” getting support from the White House for the sentencing reform bill. As a Republican senator, Sessions was a leading opponent of last year’s sentencing reform legislation. But with the bright star of the new Administration fading rapidly, Sessions’ views may be less and less relevant, and indeed, the harder he pushes law and order, the more Congress might be convinced to pass sentencing reform.

Press Release, Paul, Leahy, Merkley, Scott, & Massie Lead Bipartisan, Bicameral Introduction of the Justice Safety Valve Act (May 16, 2017)

Washington Post, Bipartisan group of senators push back on Sessions’s order to pursue most severe penalties (May 17, 2017)

– Thomas L. Root


DOJ Maintains Two Standards for Disclosure of Misconduct – Update for May 17, 2017

We post news and comment on federal criminal justice issues, focused primarily on trial and post-conviction matters, legislative initiatives, and sentencing issues.


Forgive us for observing that as a group – and we concede there are a few exceptions – Assistant United States Attorneys who handle criminal matters are as sanctimonious a lot as a conclave of newly-converted vegans. It’s hardly their fault: look at their leader, Jefferson Beauregard Sessions III.

Attorney General Jeffrey Sessions
Attorney General Jefferson B. Sessions III

In 2009 the man opposed the appointment of an attorney to head DOJ’s Civil Rights Division because 27 years before he had represented a defendant accused of killing a copy, saying his opposition “was based upon the fact that the civil rights division ‘must protect the civil rights of all Americans’ and not be used as a tool to further the political agenda of ‘special interest groups’.” Most recently, he said, “Drugs and crime go hand in hand… Drug trafficking is an inherently violent business.”

OK, to be fair, prosecutors have always thought they were on the side of the angels, and therefore, no holds are barred in winning a conviction. And sure, every newly minted AUSA can quote the aphorism from Berger v. United States that while a prosecutor “may strike hard blows, he is not at liberty to strike foul ones.”

And that happens? You could ask the late Senator Ted Stevens (R-Alaska), if he weren’t dead. Or check in with Reddy Annappareddy, a guy who isn’t dead, and whose federal healthcare fraud case folded like a cheap suit a couple weeks ago after the judge found “multiple instances of prosecutor misconduct.” Finally, watch between now and June 30th to see what the Supreme Court holds in Overton v. United States, a Brady case in which the prosecution is accused essentially of keeping the wrong guys locked up for 33 years by hiding evidence.

But this is not about misconduct in the U.S. Attorney’s Office as much as it is about the double standard DOJ uses when such misconduct is found. A defendant is convicted and then sentenced, and the DOJ gleefully piles it on with a supercilious press release like this one, about a Navy admiral whose career is in tatters and pension gone, and is now headed off to a camp somewhere for about 15 months net.

The Admiral was high profile, and so his conviction will live forever on the Internet anyway. But how about some poor schmuck in North Carolina who just got 120 months for a tax preparation fraud? Someday he’ll be back in society, and the DOJ press release will dog his heels on the Internet for the rest of his life.

romance170517If you’re going to do that kind of thing, the least the public should expect is that you’re consistent. Yesterday, the Dept. of Justice Office of Inspector General announced that it had found that “a United States Attorney (USA), now retired, engaged in misconduct by engaging in an intimate personal relationship with a high‐level, but subordinate, supervisor in the Office (Supervisory AUSA).”

That’s right. No names, no location, no time frame. The U.S. Attorney – appointed by the president and approved by the Senate – did something that “gave the appearance of partiality, created a difficult work environment, and violated Executive branch‐wide standards of conduct, federal ethics regulations, and possibly federal regulations and DOJ policy regarding sexual harassment in the workplace.” But we’re not allowed to know who the malefactor was, because – however badly he behaved – he was one of “them.”

hypocrisy170518By the way, the “Supervisory AUSA” – who apparently still works there – “inadvertently failed to report spousal stock trades completely and accurately on required financial disclosure forms.” One might reasonably think that the public has an interest in knowing that a “Supervisory AUSA,” who is given substantial responsibility for holding other people accountable (and who generally ensures that AUSA sanctimony is the rule rather than the exception, was cavorting with his or her boss and, at the same time, was negligent (or worse) with his or her own financial reporting of the cuckolding spouse.

One might reasonably think that, but one would be wrong.

– Thomas L. Root


Sessions Channels His Inner Ashcroft – Update for May 15, 2017

We post news and comment on federal criminal justice issues, focused primarily on trial and post-conviction matters, legislative initiatives, and sentencing issues.

Attorney General Jeffrey Sessions
Attorney General Jeffrey Sessions

Attorney General Jeffrey Sessions last week walked back Eric Holder’s 2014 DOJ order to go easy on drug offenders, telling federal prosecutors to “charge and pursue the most serious, readily provable offense” in drug cases, even when that would trigger mandatory minimum sentencing. The new policy cancels the Obama administration’s attempts to pull back on harsh sentencing strategies, which had produced a huge growth in prison populations, restoring the take-it-to-the-limit policies from a 2003 memo written by George W. Bush AG John Ashcroft.

The shift highlights the primary role US Attorneys and their minions play in setting federal sentences. The Atlantic said, “Prosecutorial discretion, like gravity, is the unseen force that binds the American criminal-justice system together. Federal prosecutors have a broad array of legal mechanisms at their disposal with which they can ratchet a defendant’s punishment higher or lower, depending on which charges they file and end with plead deals, making the AUSA the most influential actor in the federal system.”

lawandorder161219Sessions’ memo drew universal Democrat condemnation, and caught immediate heat from conservatives, too. Sen. Rand Paul (R-Kentucky) said mandatory minimum sentences “have unfairly and disproportionately incarcerated too many minorities for too long.” Sen. Mike Lee (R-Utah), one of the conservative leaders in advocating changes to the criminal justice system, lamented, “To be tough on crime we have to be smart on crime. That is why criminal justice reform is a conservative issue.”

The Sessions memo, not wholly unexpected, nevertheless comes at a time when bipartisan support has been quietly building in the Senate for an overhaul of federal sentencing. Judiciary Committee Chairman Chuck Grassley (R-Iowa) and Minority Whip Dick Durbin (D-Illinois) have proposed pushing a modified version of last year’s Sentencing Reform and Corrections Act.

“This policy shift flies in the face of the growing bipartisan consensus that we need to reduce—not increase—the length of prison sentences for nonviolent drug offenders,” Durbin said in a statement Friday.

justicereform161128An organization supported by conservative businessmen Charles and David Koch is also criticizing the Sessions memo. “We favor a different approach which requires changing some of the existing federal laws,” Freedom Partners Chairman Mark Holden said in a statement Friday afternoon. “Fortunately, there are already federal reform bills from last year that have broad bipartisan support that will address this issue. These reforms are consistent with those enacted by many states the past 10 years.”.

Yesterday, conservative blog Hot Air railed against the Sessions memo, arguing that federal law is so bloated that “some people don’t even know they’ve committed a crime because of how many rules and regulations there are on the books. Justice reform in states like Texas and Georgia have shown crime rates and expenses go down when reforms are enacted. The people leading the charge for justice reform aren’t cop haters, but want there to be alternatives to keep those who aren’t hardened criminals from becoming them. Sessions is wrong and should reconsider his horrible memo which won’t help anyone, except maybe prison builders and his own department’s budget. Congress can stop this by enacting sentencing reform, but only if they’re willing to act.”

His hands may end up as tied as were his predecessor's.
His hands may end up as tied as were his predecessor’s.

The Republican response, even more than that from across the aisle, suggests that the Trump administration may soon learn what the Obama Administration realized to its chagrin. It may be able to make a number of changes on the Executive side, such as rolling back federal sentencing reform, increasing federal prosecutions for drug and immigration-related offenses, and expanding federal private prisons. But Trump can no more end criminal justice reform than Obama was able to end mass incarceration from the White House.

Los Angeles Times, Sessions restores tough drug war policies that trigger mandatory minimum sentences (May 12, 2017)

– Thomas L. Root


Two Outta Three Ain’t Bad – Update for May 11, 2017

We post news and comment on federal criminal justice issues, focused primarily on trial and post-conviction matters, legislative initiatives, and sentencing issues.


Back in the good old days, when the Executive Branch pretended to care about rational federal sentencing policies (and we’re not saying that the prior inhabitant of the White House really did, other than to the extent he could use sentence reform to burnish his legacy) the U.S. Sentencing Commission adopted an amendment to the federal sentencing guidelines that reduced by two the offense levels assigned to drug quantities. The 2014 change reduced defendant’s sentencing ranges accordingly.

USSC170511Unlike most changes in the Guidelines, the Sentencing Commission made the 2-level reduction retroactive to people already sentenced. Retroactivity under the Guidelines is not an automatic thing: a defendant must petition his or her sentencing court under 18 USC 3582(c)(2) for a sentence reduction pursuant to the retroactive Guideline. If eligible, an inmate still must convince the court that a reduction of his or her sentence ought to be awarded. Sentencing courts have wide discretion as to what to do with a sentence reduction motion, and district court decisions are nearly bulletproof.

The Sentencing Commission released a report Tuesday on the fallout from the 2014 2-level reduction. Slightly more than 46,000 people applied for the reduction, of whom a few more than 30,000 receive sentence cuts, for a 66% grant rate. Like Meatloaf said, “Two outta three ain’t bad.”

funwithnumbers170511Actually the odds for defendants were even better than that: 24% of the people who applied were not even eligible for the reduction, for reasons ranging from not having been sentenced under the drug guidelines to being locked in place by statutory mandatory minimum sentence. Only 8% of the 46,000 were denied on the merits (although due to sloppy district court records, the number could have been as high as 13%).

sentence170511The average sentence was cut from 144 to 119 months, a 17% reduction. Of those receiving sentence reductions, 32% were convicted for methamphetamines, 28% for powder cocaine, 20% for crack, 9% for pot and 7% for heroin. The racial and ethnic distribution was 30% white, 33% black, and 41% Hispanic. Curiously enough, the defendant’s criminal history seemed to have no effect on likelihood of receiving a sentence cut, with novices and pros alike getting cuts at about the same rate.

Defendants were better off in Chicago than they were in sunny California. The 7th Circuit gave the largest sentence cuts, 33 months off on the average (20% of the original sentence). The 9th Circuit was the stingiest, giving an average cut of 20 months (16% of the sentence).

U.S. Sentencing Commission, 2014 Drug Guidelines Amendment Retroactivity Data Report (May 10, 2017)

– Thomas L. Root


A Midsummer Night’s Scheme – Update for May 10, 2017

We post news and comment on federal criminal justice issues, focused primarily on trial and post-conviction matters, legislative initiatives, and sentencing issues.


We take a necessary break from our breathless coverage of current events (Comey fired! Republic in Jeopardy!) to address a substantial question that the readers of our email federal prisoner newsletter have been sending for the past few weeks.

habeas170510First, a little background: Contrary to popular belief, the writ of habeas corpus was not created by the Magna Carta Libertatum, but rather derived from the Assize of Clarendon, a decree of Henry II a hundred years after the Battle of Hastings. Habeas corpus (literally, “you have the body”) is an extraordinary writ through which a person can report an unlawful detention or imprisonment and request that the court order the custodian of the person, usually a prison official, bring the prisoner to court to determine if the detention is lawful. William Blackstone, in his classic Commentaries on the Laws of England (1838) described habeas corpus as “the great and efficacious writ, in all manner of illegal confinement.”

By the time the U.S. Constitution was written in 1789, the notion that everyone enjoyed the right to seek a writ of habeas corpus was so ingrained in society that the Constitution’s framers did not see the need to express it, but rather merely to provide that habeas corpus could be suspended only under limited circumstances.

The fact that the right exists does not mean that Congress cannot control it. For federal prisoners, the law provides two methods of exercise. A prisoner may vindicate his or her right to habeas corpus by filing a motion under 28 USC 2255 challenging the legality of his or her conviction or sentence. A habeas corpus action challenging the conditions of confinement – inedible food, abysmal medical care and the like – is brought through 28 USC 2241. There are many asterisks, exceptions and conditions attached to the election of which statute to use, which we won’t go into here. Suffice it to say, we’re talking about the most popular means of continuing to attack one’s conviction and sentence even after losing on appeal – and that’s 28 USC 2255.

corso170112Likewise, we won’t get into all the reasons that Congress has tried its level best to strangle 28 USC 2255 to within an inch of constitutionality. It has, the latest being the strangely named “Antiterrorism and Effective Death Penalty Act of 1996.” The AEDPA put strict limitations on when a 2255 motion may be filed, and what gyrations a prisoner must endure if he or she wants to file a second one. Of significance to new prisoners is that they have one year from the date their conviction becomes final to file their 2255 motion.

Sometimes there is a change in the law, a Supreme Court holding that some statute or another is unconstitutional. A good example was the Court’s Johnson v. United States decision in 2015, holding that a portion of the Armed Career Criminal Act was unconstitutionally vague. Suddenly, a lot of guys doing serious time for ACCA violations found that they had been convicted unconstitutionally. So what happens to Ira Inmate, who has never filed a 2255 motion but is way beyond his one-year deadline for filing.

The AEDPA made limited provision for situations like Ira’s. If a prisoner comes upon evidence that could not have been reasonably discovered before trial, or if a Supreme Court case recognizes a new right, and the Court makes the decision retroactive to cases on collateral review (that is, habeas corpus), the one-year period runs anew. Cases announcing substantive rules – changes that modify the range of conduct or class of people punished by the criminal law – generally are retroactive. Likewise, watershed rules of criminal procedure, which are procedural rules implicating the fundamental fairness and accuracy of the criminal proceeding, will also have retroactive effect.

The Supreme Court never announces that a decision changing substantive rules or a watershed change in criminal procedural rules is retroactive at the time the decision is rendered. Instead, it waits for a subsequent case directing addressing the retroactivity issue. In the case of Johnson, it required almost 10 months for the Supreme Court to take up the issue of its retroactivity.

falsehope170510As Elvis succinctly put it, “I said all that to say all this…” There are people out there who make a business selling hope to inmates. Hope is a good thing, provided there’s some reasonable basis for it. But we’ve written about the hopemongers before, people who will tell a prisoner anything to get him or her (or the family) to part with money, and sadly enough, we expect we’ll be writing about again.

The latest from the people who brought you “Holloway motions” is an urgent cry that “[t]he Mathis deadline is June 22, 2017 for those of you that believe you have Mathis/Holt/Hinkle/Tanksley claims should not hesitate in getting your free lookup.”

Please look past the run-on sentence to the meat of this breathless assertion. June 22 is the 1-year anniversary (minus one day) of Mathis v. United States. The other decisions – Holt v. United States, United States v. Hinkle, and United States v. Tanksley – are all appellate decisions that applied the procedural instructions of Mathis to decide that one prior state conviction or another no longer qualifies as an ACCA enhancement.

crisis170510Obama advisor Raum Emanuel famously said, “You never let a serious crisis go to waste.” The hopemongers might add to that the suggestion that if there is no serious crisis to latch onto, create one.

The plain facts are these: Mathis is not a substantive change in the law, that is, a case which interpreted any statute to make conduct that was once considered illegal to no longer be illegal. Rather, it was a case about criminal procedure, how to parse statutes to determine whether convictions under them counted as crimes of violence or controlled substance offenses. Every district court that has reached the question has concluded that Mathis is not retroactive. Obviously, the Supreme Court has never considered the question.

As for the other cases the hopemongers have mentioned, Holt, Hinkle and Tanksley, each is a decision of a circuit court of appeals, not the Supreme Court, and thus has no application to the 2255 deadline.

All of this means that neither Mathis nor any of the other mentioned cases has triggered the one-year period for filing a 2255 motion. The clock does not run out on June 22nd, because the clock never started.

Puck won't be busy on Midsummer's Night writing 2255 motions...
Puck won’t be busy on Midsummer’s Night writing 2255 motions…

But June 22nd makes a great “serious crisis” for the hopemongers, and there’s little doubt that they’re making regular runs to the bank, depositing money that inmates and their families will never see again. And the hopemongers will no doubt write some post-conviction schlock for their customers, and that schlock will be dutifully filed. It will then dutifully be bounced by the courts, and become part of the 92% of prisoner filings rejected by the federal courts in this fiscal year.

There are ways, according to each prisoner’s situation, that may enable him or her to raise issue based on an application of Mathis. But the method must be tailored to the inmate’s situation, and in an unfortunately high number of cases, nothing at all may work. To be sure, a cookie-cutter approach based on a phony deadline won’t work for anyone.

A lot of things happened on June 22nd in history. This year, we know for sure it will be the first full day of summer, the day after St. John’s Day. But that’s all. It will not be the expiration of a 1-year 28 USC 2255 deadline for Mathis, because a clock that doesn’t start won’t stop, either. 

– Thomas L. Root


Return of the ‘Exculpatory “No”’ – Update for May 9. 2017

We post news and comment on federal criminal justice issues, focused primarily on trial and post-conviction matters, legislative initiatives, and sentencing issues.


industrialespionage170509It’s hard to resist an appellate decision the begins with a teaser that promises “if you wanted to learn about the secretive and lucrative world of titanium dioxide production, then this was the trial for you.”

Walter Liew is one of those Chinese expats who has never lost his affection for the motherland. In fact, the Chinese government – fairly renowned for stealing every secret, economic or otherwise, that the USA hasn’t nailed down – has honored Walt “for being a patriotic overseas Chinese who has… provided key technologies” to China.

Walt set out to steal a DuPont process for making titanium dioxide (TiO2) – useful for turning everything from paint to Oreo cookie filling white – using a secret process that was much more efficient than anything anyone else owned. Walt’s company vacuumed up DuPont documents and hired ex-DuPont employees in the process, and started building a factory in China to use the stolen process. Someone sent DuPont an anonymous letter, and DuPont investigated, ending up in a lawsuit against Walt and his economic pirates.

TiO2170509When Walt was sued, he of course answered the lawsuit, declaring that his group had never “wrongfully obtained or possessed any” DuPont trade secrets related to its TiO2 chloride process or “misappropriated any information from DuPont or any of its locations.” He also told one of his key employees not to reveal the names of other employees not named in the lawsuit, adding that it would not be “good for anybody, not even good for your family” if the employee revealed their names.

At some point, DuPont sic’ced the FBI on Walt, resulting in a federal indictment against Walt, his wife, his associates and his company.

A lot of the case is narrowly focused on the Economic Espionage Act of 1996, which is not terribly relevant to federal criminal law in general. But a few counts in the indictment allege that Walt obstructed justice by lying in the answer to the civil suit, and tampered with witnesses.

no170509A long time ago, a number of federal circuits – bothered by how easy it was to violate 18 USC 1001, which makes it a felony to utter a false statement to federal agents – ginned up a doctrine known as the ‘exculpatory “no”.’ The idea was that if the friendly FBI agent asked you whether you had sold drugs to little Johnny, and you said, “Of course not, he sold them to me, and in fact grew the pot in the field over yonder,” you were in trouble. But if you merely answered the agent’s question by saying, “No, I did not,” you did not violate 1001. Blurting ‘no’ to a law enforcement accusation was considered a “regrettable but human” response that interfered with no government investigation, and was far outside what the statute was intended to do.

The Supreme Court put an end to the “exculpatory ‘no’” doctrine in 1998. But Walter may have paved the way for its revival, albeit in slightly different form.

Last Friday, the 9th Circuit reversed Walt’s conviction for obstruction of justice. Sure, the denial in the civil suit was false, and sure false statements in a civil action undermine the proceeding’s purpose of determining “the truth of what occurred between the parties in a dispute.” Still, the Circuit said, “the better argument is that the statement in defendants’ answer — that they “never misappropriated any information from DuPont or any of its locations” — is tantamount to a general denial of legal liability. While drawing the line between a factual false statement in an answer and such a general denial can be difficult at times, we believe that the statements at issue here tacked too close to a general denial to constitute obstruction of justice.”

tampering1705090Witness tampering – like 18 USC 1001 – is a offense originally enacted for a very good reason, to keep people from threatening harm to others as a means of getting them to lie or not to testify at all. The government has discovered that the charge is a useful tool to wield against defendants for virtually any contact, however ambiguous (or innocuous).

Walt was convicted of witness tampering for telling his employee not to reveal information, because it would not be “good for anybody, not even good for your family.” The 9th Circuit reversed that conviction, too, holding that the evidence of Walt’s statement, “standing alone, was insufficient to prove beyond a reasonable doubt” that Walt intimidated, threatened, or “corruptly persuaded” his employee to prevent his complete testimony in the DuPont civil lawsuit.

The Court said, “viewed in its most damning light… the evidence shows that Liew provided the same advice that many criminal attorneys would in that situation — to not discuss the matter with anyone, and to risk otherwise could have bad effects on one’s family. Sometimes the best advice for a potential criminal defendant is not to talk to anyone about anything, and Liew’s words appear little more than that.”

We confess to having some trouble with that holding. Walt was trying to convince his guy to testify falsely – even by omission – in a civil action. What a criminal defense attorney would advise, where there was just a civil suit going on, is irrelevant. Refusing to name other employees is not a privilege, nothing one could assert a 5th Amendment privilege to prevent divulging.

We don’t see how Walt’s advice was anything less than an invitation to testify falsely. We suspect this holding will come back to bite the 9th Circuit.

United States v. Liew, Case No. 14-10367 (9th Cir., May 5, 2017)

– Thomas L. Root


Pay the Man, Shirley – But It’s Not a Sentence – Update for May 8, 2017

We post news and comment on federal criminal justice issues, focused primarily on trial and post-conviction matters, legislative initiatives, and sentencing issues.


For the past 20 years, federal law has required that those convicted of crimes where victims suffer tangible harm pay restitution to those hurt by their conduct.

restitution170508While prosecutors and others of that ilk like to fume that drug offenses – where willing buyers purchase commodities that the government has deemed fit to outlaw from willing sellers – are not victimless, those offenses have thus far been exempted from restitution. But for economic crimes – bank fraud, tax evasion, even where executive misconduct causes a company’s stock price to fall – courts slap defendants with staggering restitution liabilities that affect them long after the sentence is served. Often it’s well deserved, such as where a Ponzi operator has fleeced elderly victims out of life savings. But we have seen cases where the “victims” vehemently denied they were due restitution, but it was ordered anyway.

To defendants, a big restitution judgment may seem like a sentence. It sure did to Zack Dyab. Zack pled guilty in 2010 to a couple of white-collar offenses, wire fraud and money laundering, for which he was sentenced to 10 years and ordered to pay $6.4 million in restitution. Like most people in his position, after his conviction, Zack filed a habeas corpus motion pursuant to 28 USC 2255. And like most people, his 2255 motion failed.

Two years later, the government moved to amend Zack’s restitution to reflect that one of his co-conspirators would be jointly and severally liable for a portion of the obligation, and to update the identities and addresses of some of the people entitled to share in the restitution. Somehow no one served Zack with the government’s motion – a common enough problem for federal inmates, who cannot participate in the federal courts’ electronic filing and service system – and the court issued an amended judgment in due course.

carpe170508Zack did receive a copy of the amended judgment. Being a carpe diem kind of guy, he took the opportunity presented by the amended judgment to file another § 2255 motion, this one claiming his due process rights were violated because he received no notice that the amended judgment was being considered. The district court denied the motion, and last week, the 8th Circuit agreed.

The Circuit held that a § 2255 motion was not the right means of challenging the amended judgment, because § 2255 motions can only be used for claims involving release from custody. Because “a dispute about restitution does not involve a claim of a right to be released from custody,” the Court said, “a prisoner cannot challenge the restitution portion of his sentence under § 2255.”

moneylaundering170508Zack also argued he ought to be allowed to challenge his money-laundering conviction all over again, because that conviction is what led to the restitution order, and there was a fresh judgment on file that he should be able to attack. Noting that “not every change to a judgment results in a new sentence or judgment that wipes clean the slate of post-conviction motions previously filed,” the 8th Circuit disagreed:

We think the district court’s order amending Dyab’s judgment did not result in a new sentence or judgment. There was no substantive proceeding that adjudicated Dyab’s guilt or determined the appropriate punishment. The court did not alter the amount of Dyab’s restitution obligation or otherwise change Dyab’s sanction. The court updated the addresses of certain restitution payees… and reflected that one of Dyab’s co-conspirators… was jointly and severally liable for some of the losses. These actions are not sufficient to create a new sentence or judgment that would permit Dyab to file a successive § 2255 motion.

Dyab v. United States, Case No. 16-1296 (8th Cir., May 4, 2017)

– Thomas L. Root


The Year Without a Summer – Update for May 3, 2017

We post news and comment on federal criminal justice issues, focused primarily on trial and post-conviction matters, legislative initiatives, and sentencing issues.


nosummer170503Just a shade more than 200 years ago, a combination of solar, geologic and atmospheric factors resulted in the summer months of 1816 bringing snow to New England in June, lake ice to Pennsylvania in July and August, and frozen corn in September fields. Historians call it “The Year Without a Summer.”

We’re experiencing a regulatory version of that phenomenon this year. Last December, some hopes ran high for the United States Sentencing Commission’s 2017 agenda, with some ambitious proposals in the pipeline for the 2017 amendment cycle. We were not quite so sanguine, but even we foresaw some changes on several sentencing fronts.

And then, the bottom fell out.

noGL170503The terms of Chief Judge Patti B. Saris, Judge Charles R. Breyer and Dabney L. Friedrich, all expired. Because the Commission has to have at least four voting for a quorum, the commissioners who were left – Circuit Judge William H. Pryor, Jr. and Commissioner Rachel E. Barkow – could not conduct any business.

The nominations of Judges Breyer and Reeves were stalled last Congress. In January, outgoing President Obama renominated them. The Senate finally approved two new members on March 21st.

But according to Judge Pryor, that was too little, too late:

By statute, the Commission is required to submit any amendments to the guidelines to Congress by May 1st for a 180-day congressional review period. Because we did not have a voting quorum for almost three months, there simply is not enough time for us to schedule a public hearing on the proposed amendments, digest the public comment, deliberate, and hold a public vote by the statutory deadline. Therefore, this year we will not promulgate any amendments to the guidelines.

In its 29-year history, the Commission has missed issuing amendments in only twice, in 1996 and 1999.

As for the draft amendments considered last December, Judge Pryor optimistically says that the Commission’s “data analysis, legal research, and public comment on these proposed amendments should provide us a sound basis for considering guideline amendments as early as possible during the next amendment cycle.”

– Thomas L. Root


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