Archive
The Fourth Circuit Upholds Defendant’s Sentence; Rejects the Applicability of the ‘Safety Valve’ Sentencing Departure
On February 29, 2012, the Fourth Circuit affirmed the lower court’s decision to deny Frank Aidoo, the defendant, the benefit in sentencing espoused in 18 U.S.C. 3553(f). Commonly referred to as the “safety valve,” section 3553(f) allows a judge to sentence a defendant to a term of imprisonment below a statute’s mandatory minimum. For example, Mr. Aidoo pleaded guilty to one count of 21 U.S.C. 952 after he was caught trying to import nearly one kilogram of heroin into the United States. The mandatory minimum sentence for the importation of heroin is 60 months. However, if one qualifies for the safety valve, a judge can sentence a term of imprisonment below the minimum.
To qualify for this reduced sentence a defendant must (1) “not have more than 1 criminal history point, as determined under the sentencing guidelines,” (2) must not have used “violence or credible threats of violence or possess a firearm or other dangerous weapon . . . in connection with the offense,” (3) the offense must not have resulted in the “death or serious bodily injury to any person,” (4) the defendant must not have been the “organizer, leader, manager, or supervisor of others in the offense,” and (5) the defendant “must have truthfully provided to the Government all information and evidence the defendant has concerning the offense or offenses that were part of the same course of conduct or of a common scheme or plan.”
The burden of proving whether the safety valve applies in a particular case belongs to the defendant. According to the court’s analysis, a defendant must demonstrate by a preponderance of the evidence that he has satisfied all five elements of the safety valve. At issue in this case was whether Mr. Aidoo satisfactorily met this burden with respect to the fifth element of section 3553(f). Unfortunately, the judge in the trial court did not think so and on appeal the Fourth Circuit agreed with the trial judge.
Mr. Aidoo claimed that because he provided a story to the Government that on its face satisfied the fifth element, that the burden then shifted to the Government to disprove the truth of this story. The Fourth Circuit rejected this argument. It opined that the court may use its own reasoned assessment of the defendant’s statements and credibility before it requires the Government to furnish independent rebuttal evidence. In essence, the court has stated that a sentencing judge can reasonably determine the veracity of defendant’s statement made to satisfy the fifth element without requiring any further evidence from the Government to disprove the defendant’s statement. The Fourth Circuit also mentioned that if they had held the opposite ruling in this matter, the burden of proving the fifth element would effectively be turned on its head. This is because the government would then be burdened with disproving any story furnished by the defendant, no matter how implausible that story may be.
The key takeaway from this case for defendants is that defense counsel should furnish to the sentencing judge as much evidence as is available that demonstrates the truthfulness of the defendant’s information. As such, defense counsel should request from the court sufficient time to gather such evidence. If defense counsel requires more time to gather evidence than is allotted by the court, then counsel should make his or her objection known on the record. By making this objection on the record counsel will preserve this issue for appeal in the event of an unfavorable ruling.
The author of this blog is Erich Ferrari, an attorney specializing in Federal Criminal Defense matters. If you have any questions please contact him at 202-280-6370 or ferrari@ferrari-legal.com.
U.S. Scientist with NASA Attempted to Sell State Secrets to Israel
It’s been reported that Stewart David Nozette, a former U.S. government scientist with NASA, has pleaded guilty to one count of attempted espionage for trying to sell classified information to an undercover FBI agent posing as an Israeli spy. The offense of espionage has a maximum penalty of death, but because Nozette cooperated with the investigation he was offered a plea agreement with a 13 year sentence.
The secrets Nozette attempted to sell to Israel included information about satellites, early warning systems, ways of retaliating against large-scale attacks, communications intelligence information and major elements of defense strategy. In a recorded conversation with an undercover agent Nozette had estimated the secret information could have cost the U.S. government between $200 million and $1 billion to develop and that he expected around 1% of that value as compensation from Israel. He also requested an Israeli passport in case he needed to flee the country.
Espionage is a serious federal offense, one that carries penalties as stiff as life imprisonment or death. The law was first passed as the Espionage Act of 1917 and is now codified at 18 U.S.C. 792 et. seq. In relevant part, the statute Nozette pleaded guilty to makes it a crime for anyone who “attempts to communicate, deliver, or transmit, to any foreign government . . . either directly or indirectly, any document, writing . . . or information relating to the national defense” with intent or reason to belive that such information is to be used “to the injury of the United States or to the advantage of a foreign nation.”
Historically, criminal defense attorneys have argued that the espionage statute is an unconstitutional infringement on a person’s 1st Amendment right to free speech. However, the Supreme Court unanimously decided in Schenk v. United States that the government can infringe upon free speech if such words being infringed upon “are used in such circumstances and are of such a nature as to create a clear and present danger that they will bring about the substantive evils that Congress has a right to prevent.” Thus validating the Espionage Act’s constitutionality in 1919.
Any future attempts to construe the statute as unconstitutional on the basis of the First Amendment will likely be unsuccessful because since 1919 the Supreme Court has eased the restrictions imposed upon Congress’ ability to restrict free speech. Namely that the “clear and present danger” test from Schenk has been replaced with the “imminent lawless action” test from Brandenberg v. Ohio. Congress is allowed to restrict speech so long as the defendant, through his speech, (1) intended the occurence of an evil Congress is authorized to protect against; (2) the evil was actually imminent; and (3) the evil was likely to occur.
In the case of espionage, the sharing of state secrets with foreign nations implicates all three requirements of this test: (1)Compromising the national security interests of the United States is an evil Congress is authorized to avoid; (2) Sharing top secret information with an agent of a foreign government makes such an evil imminent; and (3) it is likely that U.S. national security concerns are compromised if a foreign government possesses U.S. state secrets. Thus fighting the espionage statute itself will likley bear little fruit.
Therefore a defendant facing federal criminal charges implicating national security should hire experienced counsel that is capable of leveraging the defendant’s knowledge of facts that interest the government against the prosecutor in order to negotiate a plea arrangement that benefits both sides. Avoiding life imprisonment or the death penalty is imperative. Much like Nozette, who is only being sentenced to 13 years, the opportunity to cooperate should be seized by a defendant facing similar offenses.
The author of this blog is Erich Ferrari, an attorney specializing in Federal Criminal Defense matters. If you have any questions please contact him at 202-280-6370 or ferrari@ferrari-legal.com.
Money Laundering: Understanding 18 U.S.C. 1956 and 1957
Congress enacted the principal money laundering statutes in 1986. 18 U.S.C. 1956 and 1957 criminalize financial and monetary transactions with proceeds of underlying criminal activity. These statutes make money laundering a crime in and of itself. Thus, not only can someone be charged with the underlying offense that initially taints the funds, they can also be charged with money laundering if they use (or attempt to use) the proceeds derived from their criminal activity in ways sanctioned by the money laundering statutes.
Although initially enacted as a means of countering narcotics trafficking activities, the money laundering statutes are now applied to all kinds of kinds of white collar or national security related offenses. For example, these statutes can be invoked when the underlying criminal activity is fraud, sanctions violations, tax evasion, etc. Any time money is derived, earned or otherwise possessed from some specified unlawful activity, it is considered dirty and the person possessing such funds is at risk of also being a money launderer. This is significant because money laundering carries a 20 year maximum sentence, a sentence significantly higher than most white collar or national security related offenses.
Although sections 1956 and 1957 are related, they differ in some very important ways. Under section 1956 a federal prosecutor must prove that: (1) the defendant conducted or attempted to conduct a financial transaction; (2) the defendant knew that the financial transaction involved the proceeds of some type of unlawful activity; (3) the funds were in fact proceeds from unlawful activity; and (4) the defendant intended to “promote” criminal activities, “conceal” the funds, avoid currency transaction reporting laws, or commit tax fraud. [Concealment money laundering makes it an offense to make "dirty" money look "clean" or that attempts to hide the money from the government in any way. Promotion money laundering criminalizes those who use the proceeds of their criminal activity to further or promote their criminal activity].
Under section 1957 a federal prosecutor must prove that: (1) the defendant engaged or attempted to engage in a monetary transaction; (2) the monetary transaction was of a value greater than $10,000; (3) the transaction derived from criminal activity; (4) the transaction either took place in the U.S. or the defendant is a U.S. person; and (5) the defendant knew that the property was criminally derived.
One critical distinction between the two statutes is the conduct being targeted. 1956 targets “financial transactions,” while 1957 targets “monetary transactions.” Financial transactions includes a broad range of financial dealings that affect interstate commerce. The term encompasses almost any deal, like bank transactions, gifts, purchases and other transfers of money and property. 1957 accomplishes its goal primarily by prohibiting “dirty” money from entering the financial system through monetary transactions (i.e. deposits, withdrawals, etc.) with financial institutions (i.e. banks). Thus the goal of 1956 is prohibiting the actual “laundering” of “dirty” money whereas 1957 is concerned with keeping the financial system clean by keeping “dirty” money out.
Another key distinction is that 1956 has no specified minimum value for the financial transactions to be subject to the statute. Thus, even the most miniscule financial transaction can subject someone to criminal prosecution under 1956. Quite by design, the statute broadly covers most everyday transactions and includes transactions of any value so long as the requisite intent is present. On the other hand, Section 1957 mirrors currency reporting laws and requires the monetary transaction to be worth at least $10,000.
Both statutes require the government to prove that the defendant knew the funds were criminally derived, but does not require the government to prove that the defendant knew the specific criminal activity underlying the transaction. Therefore, as long as the government can prove beyond a reasonable doubt that the defendant knew the funds he was transacting with were likley derived from some prohibited conduct, he can be liable under either money laundering statute. Willful ignorance is not a defense to this intent requirement. Thus, the defendant need not be involved in the criminal activity himself, let alone know what criminal acts were specifically undertaken to derive the funds, to be liable in these cases.
It is apparent that these statutes broadly apply to many people in many situations. Most of these situations would seem more economic in nature, rather than criminal. Bank tellers, traders, merchants, retailers, etc. are at risk and should understand these statutes because they directly relate to their lawful businesses. Thus people should be mindful of money transfers, purchases or transactions by performing some level of due diligence to ensure the funds are not derived from criminal activity. Further, people conducting trade or transactions on an international level should be mindful of the various economic sanctions programs, export/import laws, etc. in order to minimize their instances of possessing “dirty” money. In other words: know where the money is coming from and decline to work with those who cannot give you adequate assurances, even if those people are your customers, friends, or family.
The author of this blog is Erich Ferrari, an attorney specializing in Federal Criminal Defense matters. If you have any questions please contact him at 202-280-6370 or ferrari@ferrari-legal.com.
Barefoot Bandit & Criminal Forfeiture – Rule 32.2(b) of the Federal Rules of Criminal Procedure
Federal prosecutors in the infamous Barefoot Bandit case say Colton Harris-Moore shouldn’t profit from his story. If you remember, Harris-Moore’s arrest stems from a spate of crimes in 2009 and 2010. He escaped from a federal detention center in Seattle and made a daring race across the country in which he stole cars, flew planes, and operated boats. He is suspected of more than 100 crimes across nine states. He was eventually captured in the Bahamas. Not surprisingly, Hollywood came calling for his story, but now Federal prosecutors are seeking forfeiture of any potential profits Harris-Moore may earn from his story. How can the Feds subject property to forfeiture before it has even been realized?
Federal Rule of Criminal Procedure 32.2(b) guides the determination of the scope of forfeitable property. The court or jury identifies the property subject to forfeiture and determines whether the “requisite nexus between the property and the offense” has been established by the government. Implicit in this nexus requirement is the determination of the defendant’s guilt.
The court’s determination may be based on evidence already in the record or any additional evidence submitted by the parties in a forfeiture hearing. The court must then promptly enter a preliminary order of forfeiture “setting forth the amount of any money judgment, directing the forfeiture of specific property, and directing the forfeiture of any substitute property.” Then, at either sentencing or whenever the defendant consents, the preliminary order becomes final as to the defendant. However, third parties may still have a greater claim than the government does to certain property subject to forfeiture.
Property subject to forfeiture opens up with the concept of “substitute property.” The judge or jury can order the forfeiture of substitute property to fulfill whatever money judgment has been awarded or if the actual property derived from criminal activity is unavailable. “A money judgment permits the government to collect on the forfeiture order in the same way that a successful plaintiff collects a money judgment from a civil defendant.” U.S. v. Hall, 434 F.3d 42 (2006). Thus, even if a defendant does not have sufficient funds to cover forfeiture at the time of conviction, the government may seize future assets to satisfy the order. Property subject to substitute forfeiture are identified by applicable statutes. Most jurisdictions allow courts to seize substitute assets when forfeitable assets cannot be located, have been transferred or sold to a third party, are beyond the court’s jurisdiction, have been reduced in value or comingled and not easily separated. See 21 U.S.C. 853(p);18 U.S.C. 982(b); 18 U.S.C. 1963(m).
So it is likely that the Barefoot Bandit may have the profits derived from his story forfeited, but probably only up to the amount of a money judgment to cover the costs of the crimes he committed. Hollywood will probably make it worth his while regardless; though it should be mentioned that Harris-Moore has personally agreed to give all the proceeds of his story to charity.
The author of this blog is Erich Ferrari, an attorney specializing in Federal Criminal Defense matters. If you have any questions please contact him at 202-280-6370 or ferrari@ferrari-legal.com.
Cooperation in a Federal Investigation
If you are under investigation by the United States Attorneys Office there may be some options for you to avoid prosecution. Although many prosecutors take a hard line approach, there is some hope for a guarantee of no prosecution in exchange for cooperation.
Assistant United States Attorneys often seek cooperation in investigating or prosecuting others from those parties they believe to also be culpable of a crime. Often times, they will directly ask the alleged party to cooperate. If they do not, and the alleged party believes they have information that would be useful to the government, they may approach the Assistant United States Attorney with an offer of substantial assistanceto avoid prosecution or the full extent of prosecution.
Some prosecutors will try to bluff and say that they do not have any discretion to promise refraining from prosecution in exchange for cooperation. This is simply not true. Prosecutors have wide discretion to act in cases where the alleged is cooperating. For example, prosecutors can refrain from prosecuting in return for cooperation (See, Department of Justice Manual, §§9-27.600 et seq.) or they can enter into a plea agreement with the alleged, whereby the cooperating party pleads guilty to reduced charges or receives a reduced sentence in return for assisting the government in the investigation or prosecution of other persons for criminal activity (See Department of Justice Manual, §9-27.400 (2007).
Some attorneys won’t represent an individual cooperating with authorities. I believe it is the defendant’s choice, not the attorney’s. Federal charges often carry prison time if the party accused is convicted. If you know that you are caught red handed and wish to plea guilty, but have no stomach for jail, then cooperation may be your best and only option.
The author of this blog is Erich Ferrari, an attorney specializing in Federal Criminal Defense matters. If you have any questions please contact him at 202-280-6370 or ferrari@ferrari-legal.com.
