DECISIONS OF THE WEEK ENDED -APRIL 10, 2020

DECISIONS OF THE WEEK ENDED -APRIL 10, 2020

| Apr 10, 2020 | Ed Sapone’s Decisions of the Week

The Circuit continued to work through its cases, releasing two precedential opinions this week. Doka  negatively, but not surprisingly, resolved an open but important issue, in light of the Supreme Court’s decision in United States v. Haywood, finding that the Sixth Amendment does not guarantee a defendant the right to a jury to resolve factual questions in a supervised-release revocation proceeding.

New York’s appellate courts were quieter this week, as the number of cases argued before the near shutdown of the courts dwindles. The action in the NY courts during this period is largely happening in the trial courts, as evidenced by the conflicting bail decisions of Justices Dwyer and Fabrizio, cited below.

Second Circuit

In United States v. Adams, CA2 affirmed in part, and vacated and modified in part, defendant’s District of Connecticut conviction, following his guilty plea to assorted tax offenses. CA2 found that the district court lacked the authority to require restitution payments to begin immediately following defendant’s sentencing, but that the district court correctly relied on uncharged relevant conduct constituting willful evasion of payment and failure to pay in assessing the amount of tax loss to be restituted.

CA2 found that, over the course of at least 14 years, defendant engaged in a campaign to obstruct the IRS’s efforts to collect his delinquent tax payments and to secure overdue tax returns. He lied to and manipulated his accountant, filed extension requests containing false information, claimed to have made payments that he had not made, missed deadlines, lied that checks were in the mail, unjustifiably blamed his accountant for errors and delays, bounced checks, and fraudulently claimed financial distress at times when he had the funds necessary to pay his tax liability, all while spending lavishly on a lifestyle that included purchasing and leasing multiple luxury vehicles, spending millions to construct a mansion in East Lyme, Connecticut, and staying at upscale hotels.

A grand jury eventually charged defendant in a six-count indictment. Counts One, Three, and Five charged Adams with making and subscribing to false tax returns for the years 2009, 2011, and 2012, in violation of 18 U.S.C. § 2 and 26 U.S.C. § 7206(1). Counts Two and Four charged Adams with tax evasion in 2011 and 2012, in violation of 18 U.S.C. § 2 and 26 U.S.C. § 7201. Count Six charged Adams with attempting to interfere with the administration of the internal revenue laws, in violation of 18 U.S.C. § 2 and 26 U.S.C. § 7212(a).

Defendant pleaded guilty to the indictment. The district court sentenced him principally to 90 months’ imprisonment and $4,872,172.91 in restitution payable to the IRS. On appeal, defendant contested the inclusion in the restitution amount of “accrued interest and tax penalties in calculating the tax loss.” Generally speaking, the federal sentencing guidelines provide that the “tax loss” resulting from an offense “does not include interest or penalties, except in willful evasion of payment cases under 26 U.S.C. § 7201 and willful failure to pay cases under 26 U.S.C. § 7203.” Defendant was not charged with willful failure to pay under either of those sections.

The district court determined the tax loss to be $4,253,798.49, which included $3,375,094.49 of back taxes, interest, and penalties for 2002, 2006, 2007, 2008, 2009, and 2011, and $878,704 of tax due on income that defendant failed to declare in 2011 and 2012. Since he did not plead guilty to willful failure to pay under 26 U.S.C. §§ 7201 or 7203, defendant contended that the district court improperly included interest and penalties in the loss amount.

The issue, as framed by CA2 as one of first impression, was whether the exception to Guideline § 2T1.1 for penalties and interest is limited to cases where the defendant has been convicted of willful failure to pay under §§ 7201 or 7203 or whether the district court may consider uncharged conduct that involves the “willful evasion of payment” or the “willful failure to pay” covered by those statutes.

CA2 held that, because “the statutory reference in . . . § 2T1.1 n.1 does not require a charge or conviction to be applicable to a defendant’s case,” the exception permitting interest and penalties to be included in the tax loss calculation for “willful evasion of payment cases” under 26 U.S.C. § 7201, and “willful failure to pay cases” under 26 U.S.C. § 7203, can be applied to uncharged relevant conduct constituting violations of those statutes. Thus, even where a defendant has not been convicted of willful evasion of payment under § 7201 or willful failure to pay under § 7203, penalties and interest may still be included in the tax loss calculation “[i]f the object of the offense is to avoid the tax, penalties, and interest.” According to CA2, the record here overwhelmingly demonstrated that the object of defendant’s offenses was willful evasion of payment.

CA2 agreed with defendant, however, that the district court exceeded its authority by ordering restitution as part of the judgment to begin immediately. Neither 18 U.S.C. § 3663(a) nor § 3663A permits restitution for Title 26 offenses, but restitution can be ordered as a condition of supervised release. CA2 modified the judgment to provide that restitution be ordered as a condition of supervised release.

CA2’s decision can be found here, and an accompanying summary order here.

In United States v. Doka, CA2 affirmed the decision revoking defendant’s supervised release, agreeing with SDNY Judge Jed S. Rakoff that judicial—rather than jury—factfinding on the issue of supervised release revocation remains constitutional despite the Supreme Court’s decision in United States v. Haymond, 139 S.Ct. 2369 (2019). Haymond held that judicial factfinding under a different supervised-release provision violated the Fifth Amendment’s Due Process Clause and the Sixth Amendment’s right to a jury trial.

Defendant pleaded guilty to three counts of a Superseding Information charging him with: (1) conspiracy to distribute and possession with intent to distribute oxycodone and cocaine; (2) possession of a firearm in furtherance of a drug-trafficking crime; and (3) making false statements to the U.S. Pretrial Services Office. After pleading guilty, he remained out on bail. His bail was subsequently revoked, and he was remanded to custody pending sentencing. The district court thereafter sentenced him to time served to be followed by three years of supervised release. A violation petition was subsequently filed alleging that defendant had violated the conditions of his supervised release. It contained three specifications alleging that defendant had committed the NYS crimes of second-degree assault and third-degree criminal possession of a controlled substance, and had used a controlled substance.

The district court conducted an evidentiary hearing on the allegations at which the government presented evidence establishing each of the violations. The court issued a written decision concluding that the government had proven all three violations by a preponderance of the evidence, revoked defendant’s supervised release, and sentenced defendant to 48 months’ imprisonment to be followed by ten years’ supervised release.

Section 3583(e)(3), authorizes a district court to “revoke a term of supervised release . . . if the court . . . finds by a preponderance of the evidence that the defendant violated a condition of supervised release.” The preponderance-of-the-evidence standard “requires proof that the defendant’s violation of supervision was more likely than not.”

The Supreme Court held in Haymond that § 3583(k) is unconstitutional. Under that statute, “if a judge finds by a preponderance of the evidence that a defendant on supervised release”—who is also required to register as a sex offender—“committed one of several enumerated offenses . . . the judge must impose an additional prison term of at least five years and up to life without regard to the length of the prison term authorized for the defendant’s initial crime of conviction.” Because Haymond was a registered sex offender on supervised release, who in turn was charged with committing one of the offenses listed in § 3583(k), at the violation of supervised release proceedings the trial judge was “bound [by § 3583(k)] to impose an additional prison term of at least five years” and up to life imprisonment.”

There was no majority opinion in Haymond. When a majority of the Supreme Court agrees on the judgment, “but no single rationale explaining the result enjoys the assent of five Justices, ‘the holding of the Court may be viewed as that position taken by those Members who concurred in the judgments on the narrowest grounds.’” In Haymond, Justice Breyer’s opinion concurring in the judgment represented the narrowest ground: Breyer held that Apprendi should not be extended generally to the supervised release context. Apprendi applied to § 3583(k), because Apprendi applies only: (1) “when a defendant commits a discrete set of federal criminal offenses specified in the statute”; (2) “takes away the judge’s discretion to decide whether violation of a condition of supervised release should result in imprisonment and for how long”; and (3) “limits the judge’s discretion in a particular manner[ ] by imposing a mandatory minimum term of imprisonment” upon the judge’s finding that it is more likely than not that the defendant committed a criminal offense listed in the statute.

CA2 found that Haymond did not undermine its own longstanding and clear precedent on the constitutionality of 3583(e)(3) because it did not contain any of those three features, and none of the Justices in Haymond appeared to suggest that § 3583(e)(3)’s authorization of judicial factfinding violated the Constitution.

CA2’s decision can be found here.

In United States v. Cardenas, in a summary order, CA2 affirmed defendant’s conspiracy to distribute and possess with intent to distribute narcotics convictions, and the 96-month prison term imposed by SDNY Judge Alison J. Nathan. In doing so, CA2 rejected defendant’s contention that he received ineffective assistance of counsel because his attorney: (1) conceded that defendant’s drug distribution resulted in serious bodily injury; (2) failed to investigate the quantity of drugs attributable to defendant; and (3) failed to uncover that the government presented false evidence, because those claims were not properly presented on direct appeal.

CA2’s decision can be found here.

In United States v. Siri-Reynoso, in a summary order, CA2 affirmed defendant’s convictions for racketeering conspiracy, conspiracy to distribute and possess with intent to distribute controlled substances, murder in aid of racketeering, and firearm-related murder in connection with the racketeering and narcotics conspiracies, and the sentence of life imprisonment plus five years imposed by SDNY Chief Judge Colleen McMahon. CA2 rejected defendant’s contentions that (1) the evidence was insufficient; (2) his right to counsel was violated under United States v. Massiah, 377 U.S. 201 (1964); and (3) his due process rights were violated under Brady v. Maryland, 373 U.S. 83 (1963), and Giglio v. United States, 405 U.S. 150 (1972).

CA2 found that there was no Massiah violation because there was nothing in the record suggesting that the Government took any action that was designed deliberately to elicit any testimony from defendant. Placing an informant in the same facility as defendant, without more, was insufficient to demonstrate a constitutional violation.

CA2 also rejected defendant’s Brady argument that the Government’s inadvertent failure to produce a letter from a cooperating witness, a member of the Trinitarios, to a prosecutor unassociated with this case, violated defendant’s due process rights under Brady and Giglio. With the agreement of defendant’s counsel at trial, the district court substantially mitigated the risk of any ensuing prejudice by authorizing the letter, which impeached the informant’s credibility, to be introduced into the record. The district court also permitted defense counsel to give an additional summation. As a result, the jury had an opportunity to examine the evidence with the benefit of defense counsel’s summation.

CA2’s decision can be found here.

SCOTUS

In Kansas v. Glover, in an 8-1 decision, with the majority opinion written by Justice Clarence Thomas, SCOTUS ruled that when an officer lacks information negating the inference that a vehicle is begin driven by its owner, an investigative traffic stop made after running a vehicle’s license plate and learning that the registered owner’s driver’s license has been revoked is reasonable under the Fourth Amendment.

A Kansas deputy sheriff ran a license plate check on a pickup truck, discovering that the truck belonged to respondent Glover and that Glover’s driver’s license had been revoked. The deputy pulled the truck over because he assumed that Glover was driving. Glover was in fact driving and was charged with driving as a habitual violator. He moved to suppress all evidence from the stop, claiming that the deputy lacked reasonable suspicion.

SCOTUS held that the deputy’s commonsense inference that the owner of a vehicle was likely the vehicle’s driver provided more than reasonable suspicion to initiate the stop. That inference was not made unreasonable merely because a vehicle’s driver is not always its registered owner or because Glover had a revoked license. The court noted that the scope of this holding was narrow. The presence of additional facts might dispel reasonable suspicion, but here, the deputy possessed no information sufficient to rebut the reasonable inference that Glover was driving his own truck.

Justice Sotomayor would have held that it was not reasonable to assume that someone with a revoked license would be driving a vehicle owned by them.

SCOTUS’ decision can be found here.

Appellate Division, First Department

In People v. Vasquez, AD1, in a 3-2 decision, affirmed defendant’s Bronx County first-degree robbery convictions, disagreeing with dissenting Justice Sallie Manzanet-Daniels. The majority decision rejected defendant’s contentions that the trial court’s failure to circumscribe the prosecutor’s cross-examination of a defense witness left the jury with the impression that defendant had participated with the witness in uncharged robberies, and that this, in conjunction with the prosecutor’s argument during summation that defendant and the witness were involved in a “spree” of other uncharged robberies, deprived defendant of a fair trial.

AD1’s decision can be found here.

Appellate Division, Third Department

In People v. Burwell, AD3 reversed one of defendant’s three false reporting convictions, finding unconstitutional, as applied, Penal Law § 240.50(1), which proscribes falsely reporting, initiating, or circulating a false report or warning of an alleged occurrence of a crime “under circumstances in which it is not unlikely that public alarm or inconvenience will result.” AD3 found that the SUNY Albany student defendant’s actions, which caused a “Twitter storm” following his posting of false tweets, were protected by the First Amendment.

AD3’s decision can be found here.

Supreme Court, New York & Bronx Counties

In People ex rel. Stoughton v. Brann, New York County Supreme Court Justice Mark Dwyer released 18 of 32 pretrial detainees whose release was sought for reasons related to the COVID-19 pandemic. Judge Dwyer held that their release was required as a matter of due process.

Judge Dwyer’s decision can be found here.

In contrast, in People ex rel. Hamilton v. Brann, Bronx County Supreme Court Justice Ralph Fabrizio denied release to a 30-year-old asthma sufferer held on a second-degree assault charge, who alleged that he had not been receiving medical treatment at Rikers. Judge Fabrizio accepted the City’s representation that its protocols for isolating and treating detainees were adequate to address petitioner’s medical needs absent medical records to prove the contrary.

Judge Fabrizio’s decision can be found here.

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