No jail for Beanie Babies tax fraudster

Judges are starting to speak out about the ridiculous guideline system we have and incarcerating first time non-violent offenders for no reason.  Here's the latest -- a 7th Circuit opinion affirming a non-jail term sentence for the billionaire owner of Beanie Babies in a very large tax fraud case:

Defendant H. Ty Warner, the billionaire creator of Beanie Babies, evaded $5.6 million in U.S. taxes by hiding assets in a Swiss bank account.  He pled guilty to one count of tax evasion, made full restitution, and paid a $53.6 million civil penalty.  The Sentencing Guidelines provided a recommended 46- to 57-month term of imprisonment, but the district judge gave Warner a more lenient sentence: two years’ probation with community service, plus a $100,000 fine and costs.  The government claims his sentence is unreasonable because it does not include a term of incarceration.
In a typical case, we might agree.  But this is not a typical case.  The district judge found Warner’s record of charity and benevolence “overwhelming.”  Indeed, the judge remarked that Warner’s conduct was unprecedented when viewed through the judge’s more-than-three decades on the bench.  In the district court’s opinion, this and other mitigating factors — including the uncharacteristic nature of Warner’s crime, his attempt to disclose his account, his payment of a penalty ten times the size of the tax loss, and the government’s own request for a sentence well below the guidelines range — justified leniency.  District courts enjoy broad discretion to fashion an appropriate, individualized sentence in light of the factors in 18 U.S.C. § 3553(a).  The court here did not abuse its discretion.  Rather, it fully explained and supported its decision and reached an outcome that is reasonable under the unique circumstances of this case.  We therefore affirm Warner’s sentence.

In other news, President Obama is going to see what federal prison is all about -- he's making a visit Oklahoma to see the federal prison there, a first for a sitting President:

President Barack Obama will become the first sitting chief executive to visit a federal prison when he goes to El Reno, Oklahoma, next week to meet with law enforcement officials and inmates as part of the administration’s push for criminal-justice reform.
“Next week, the president will underscore the administration’s focus on the need to reform and improve America’s criminal justice system,” White House press secretary Josh Earnest said during Friday’s news briefing.

Obama will speak to that on Tuesday when he addresses the NAACP conference in Philadelphia before stopping at the medium-security federal facility in Oklahoma on Thursday. According to the Federal Bureau of Prisons, the facility houses 1,301 inmates in all, including 248 at an adjacent minimum-security satellite camp.

Finally, a pro-se litigant won this appeal (via FloridaBulldog.org):

Every day, state prisoners flood Florida’s courts with appeals and pleadings about their cases that they’ve written themselves. Those pro se filings — Latin for “on his own behalf” — rarely get far.
This spring, however, an inmate sex offender serving a life sentence convinced the Fourth District Court of Appeal in West Palm Beach that a Broward judge erred when she failed to order prosecutors to explain potentially serious discrepancies about his Miranda rights warning form.
The state introduced the Miranda form as evidence at Charles D. Williams’ 1998 trial, but Williams contends the document was a fraud and that police forged his signature. For years, Williams and his family filed public records requests seeking to obtain a copy.
“After serving multiple requests to the Broward County Clerk and the State Attorney’s Office over a course of years, his brother finally obtained a copy of a Miranda waiver form,” says the unanimous order by a three-judge appeal panel. “The date on the form produced differed from the date on the form introduced at trial, and the signature on the form produced varied from the petitioner’s signature.”
The panel ordered Broward Circuit Judge Lisa Porter to require prosecutors and the clerk’s office to respond to the “factual issue of whether the form produced is the same as the form introduced at trial.” If the response doesn’t resolve the matter, Porter was instructed to “hold an evidentiary hearing.”
The court issued its mandate to Judge Porter on June 12 after denying a request for reconsideration by Florida Assistant Attorney General Richard Valtunas, who in previous court papers called Williams’ assertions “outlandish allegations of fraud and skullduggery.” The judge had not taken action as of Monday.

Book review Bum Rap by Paul Levine

If you're looking for a fun summer read, pick up Paul Levine's latest novel, Bum Rap. Miamians and those of you in the criminal justice system will enjoy it.

It takes place in Miami and the set-up is the B-girl case, which the blog covered in detail. You'll see lots of familiar places, including the Justice Building. And you'll also see lots of familiar names, including Roy Black and Levine's wife Marcia Silvers. I won't ruin it with all of the Miami references, which are fun to see as you go.

Good stuff!

11th reverses honest services conviction

Jury instructions were the cause in United States v. Aunspaugh:

This is an honest-services fraud case. On one view of the evidence, the defendants participated in a classic kickback scheme. On another view, the scheme involved an egregious conflict of interest but no kickback. Under Skilling v. United States, 561 U.S. 358 (2010), the defendants’ conduct constituted honest- services fraud only on the first view, not the second. Because the jury instructions would have allowed a conviction on either view of the evidence, we vacate the honest-services convictions. We also vacate other convictions that depend on the honest-services convictions. But we uphold convictions for structuring financial transactions not dependent on the honest-services convictions. 

The panel also said this about acceptance at the new sentencing:

We add one other note about sentencing. The Aunspaughs argue that the district court improperly inferred a lack of remorse because they chose not to plead guilty but remained silent instead. They argue that the court’s consideration of these things violated their constitutional rights. See, e.g., United States v. Rodriguez, 959 F.2d 193, 197 (11th Cir. 1992) (noting that a district court may weigh remorse in a defendant’s favor but must not “weigh against the defendant the defendant’s exercise of constitutional or statutory rights”). Because we remand for resentencing, we do not address this issue today. The district court should resentence the defendants without weighing against them their exercise of constitutional rights.

 

Unpublished, yet enbancworthy?

A few months ago we wrote about an Eleventh Circuit unpublished decision affirming a major upward variance for a relatively minor crime (though committed by a defendant with a lengthy criminal history). The panel’s decision not to publish the decision seemed “unusual,” and we suggested that, because it was unpublished, “the likelihood of en banc review is greatly reduced, for there is little reason for the full court to undertake the arduous process of reviewing a decision that doesn’t bind it or lower courts.”

Perhaps that view was overstated. Last week Fifth Circuit Judge Jerry E. Smith, joined by three of his colleagues, dissented from the denial of rehearing en banc of an unpublished decision reversing a district court’s denial of habeas relief. To Judge Smith, the “panel majority’s obvious error cries out for correction.” In his view, the “opinion is enbancworthy because, even though unpublished, it infects our entire habeas jurisprudence.”

The defendant’s lawyers in the Eleventh Circuit case filed a petition for rehearing en banc. Today, however, the petition was denied in a one-line order. It simply wasn’t enbancworthy.

***

In related news, the Eleventh Circuit last week affirmed the conviction and sentence of a former Rothstein Rosenfeldt Adler lawyer for her role in the Ponzi scheme. In affirming her 5-year sentence, Judge Linn, sitting by designation and writing for the court, ended the (unpublished) opinion this way:

The district court’s sentence of 60 months is also substantively reasonable. In this case, had there been no loss, the parties agree that the guidelines suggested a sentence of 8–14 months. The problem for Kitterman is that the guidelines are intended for normal cases and, for a number of reasons, her case is anything but. First, Kitterman impersonated an official of the Florida Bar. Second, as the district court explained, this case will put people on notice that if “they do a fraud, and at the time they do it, they don’t appreciate the consequences of that fraud, there will be consequences if they are apprehended.” Third, while it is perhaps impossible to estimate what value Kitterman ascribed to the Bar complaints, the district court was correct that “it would blatantly be wrong to say [the intended loss] had no value.” Thus, a zero loss here does not, as might normally be the case, suggest that Kitterman’s intent was less pernicious. Fourth, this case is unusual because, as the district court noted, Kitterman was a lawyer and should have appreciated that “what [she was] doing is wrong.” Fifth, Kitterman’s sentence is also justified by the fact that Steven Caputi—who posed as a banker to deceive investors but who also did not know about the Rothstein Ponzi scheme—received a similar sentence of five years. Finally, Kitterman’s sentence is significantly below the total statutory maximum of 60 years imprisonment for the three wire fraud convictions.

Are criminal trials fair?

Judge Kozinski says no way in this really interesting read from the Georgetown Annual Review of Criminal Procedure.  His main points, as summarized by Business Insider:

1. Eyewitnesses are highly reliable

Eyewitnesses are highly unreliable, especially when the witness and perpetrator are of different races, or when witnesses are asked to recall a situation in which they were under the stress of violent crime or catastrophe, Kozinski writes. Mistaken eyewitness testimony was a factor in one-third of all wrongful conviction cases, according to his article.
Jed Rakoff, another well-known federal judge, made the same point in a Washington Post op-ed this year.

2. Fingerprint evidence is foolproof

Kozinski says prints left in the field are often smudged and incomplete — making them difficult to identify. He adds that when tested by more rigorous scientific methods, fingerprint examiners have a significant error rate.
The National Academies of Sciences has also said the work of fingerprint examiners can be flawed. 

3. Other types of forensic evidence are scientifically proven and therefore infallible

Aside from DNA evidence, Kozinski says what is true about fingerprint evidence is doubly true about bloodstain-pattern identification, foot- and tire-print identification, and ballistics.
"Some fields of forensic expertise are built on nothing but guesswork and false common sense," Kozinski writes. 
Recently, the Justice Department exposed major problems with microscopic hair testing in criminal cases. 

4. DNA evidence is infallible

Kozinski says the integrity of DNA evidence is often compromised during the collection, preservation, and testing process, and that DNA examiners are not always competent and honest.
As Mother Jones noted in April, "Real-life crime labs are a total mess."

5. Human memories are reliable

Kozinski, citing a study by cognitive psychologist Elizabeth Loftus, believes the mind not only distorts and embellishes memories, but that external factors affect how memories are recalled and described. 
In an interview with Slate, Loftus acknowledged that we're all capable of fabricating memories. 
"We all have memories that are malleable and susceptible to being contaminated or supplemented in some way," Loftus told Slate. 

6. Confessions are infallible because innocent people never confess

Kozinski has found that innocent people confess surprisingly often, due to a variety of factors including interrogation tactics, Stockholm syndrome, emotional or financial exhaustion, family considerations, and general feeble-mindedness. 
As The New Yorker has reported, police can also produce false confessions by using a certain interrogation technique. 

7. Juries follow instructions

Kozinski claims courts know very little of what juries do when they decide cases. Courts have no way of knowing whether juries follow instructions or even whether they understand them, according to Kozinski. 
"We have no convincing reason to believe that jury instructions in fact constrain jury behavior in all or even most cases," Kozinski writes.

8. Prosecutors play fair

Kozinski believes prosecutors often fail to turn over evidence that could be favorable to the defense, known as exculpatory evidence. In a case called Brady v. Maryland, the Supreme Court ruled that prosecutors have to turn over that evidence. But Kozinski claims there's an "epidemic" of Brady violations in America. 

9. The prosecution is at a substantial disadvantage because it must prove its case beyond a reasonable doubt

In reality, Kozinski writes, the defendant is often at a disadvantage because prosecutors have the chance to argue their case before the defense during a trial.
That's troubling because of psychological evidence showing that "whoever makes the first assertion about something has a large advantage over everyone who denies it later," according to Kozinski.

10. Police are objective in their investigations

Kozinski says police have the opportunity to alter or remove evidence, influence witnesses, extract confessions, and more or less lead an investigation in such a way that they can stack the deck against somebody they believe should be convicted.
"There are countless documented cases where innocent people have spent decades behind bars because the police manipulated or concealed evidence," Kozinski writes. 

11. Guilty pleas are conclusive proof of guilt

Kozinski has found that when a defendant believes an outcome is highly uncertain or stacked against them, they might cave and enter a guilty plea to a lesser charge so that they can still salvage a part of their life.
Judge Jed Rakoff has also lamented the fact that 97% of federal criminal defendants plead guilty if their cases aren't dismissed. 

12. Long sentences deter crime

America has 716 prisoners for every 100,000 people — the most of any country in the world, Kozinski notes. America also has much longer sentences than other countries for comparable crimes. Kozinski points out that a burglary charge in the US warrants an average of 16 months in prison, compared with five months in Canada and seven months in England.
"As with much else in the law, the connection between punishment and deterrence remains mysterious," Kozinski writes. "We make our decisions based on faith."

Meantime, there are a bunch of criminal trials starting this summer, which are expected to last over a month.  One just started before Judge Martinez, so if you are looking for something for your interns to do... send them over to watch a federal trial!

Happy 10th Birthday to the Blog!

The Southern District of Florida Blog shares its birthday with the U S of A.  The blog turns 10 this year.  And America is 239, not 2015.

The very first post 10 years ago asked for President Bush to appoint a Floridian to the Supreme Court.  Although the Court did get its first Hispanic jurist, it did not get a Floridian.  Hopefully one day soon!

Since then, the blog has had 2835 posts and more than 2 million views.

Thanks to all of my tipsters and readers.  It's been a fun 10 years.

--David

New Article on the Eleventh Circuit's State of Emergency

Section 46(b) of Title 28 of the U.S. Code states that appeals may be heard and determined "by separate panels, each consisting of three judges, at least a majority of whom shall be judges of that court, ... unless the chief judge of that court certifies that there is an emergency." By General Order No. 41, the Eleventh Circuit was for the better part of 2014 certified to be in an emergency state. South Florida appellate lawyer Andrew L. Adler, who clerked for two judges of the Eleventh Circuit, wrote about this in his scholarly article Extended Vacancies, Crushing Caseloads, and Emergency Panels in the Federal Courts of Appeals, which was recently published in the Journal of Appellate Practice and Process.

Here's the introduction:

At the end of 2013, the chief judge of the Eleventh Circuit declared a state of emergency, exempting the court from the requirement in 28 U.S.C. §46(b) that each of its panels include a majority of Eleventh Circuit judges. As would later become clear, the emergency arose from multiple vacancies on the court, which exacerbated the effect of its heavy per-judge caseload. Throughout 2014, emergency panels consisting of one Eleventh Circuit judge and two visiting judges resolved over one hundred appeals. 

In a petition for rehearing filed in one such case, an unsuccessful appellant challenged the validity of the emergency panel. Rather than resolving the petition summarily, the emergency panel instead published a precedential opinion upholding the certified emergency. Although other circuits have certified section 46(b) emergencies based on the vacancy-caseload combination, the Eleventh Circuit's opinion is the first federal appellate decision addressing a challenge to such an emergency. Because extended vacancies and heavy caseloads are likely to persist, that opinion invites new scrutiny of the emergency exception to section 46(b)'s majority requirement. This article begins that undertaking.

Adler defends Chief Judge Carnes's application of the emergency exception.

If you're interested in the Eleventh Circuit -- or in the federal courts of appeals in general -- do check out Adler's well written and thoroughly researched article.

Extended Vacancies, Crushing Caseloads, and Emergency Panels in the Federal Courts of Appeals

“They say that any prosecutor worth his salt can get a grand jury to indict a ham sandwich. It may be that a decent prosecutor could get a petit jury to convict a eunuch of rape.”

That's Judge Kozinski in this article calling for criminal justice reform:

Defense lawyers who are found to have been ineffective regularly find their names plastered into judicial opinions, yet judges seem strangely reluctant to name names when it comes to misbehaving prosecutors. Indeed, judges seem reluctant to even suspect prosecutors of improper behavior, as if they were somehow beyond suspicion….Naming names and taking prosecutors to task for misbehavior can have magical qualities in assuring compliance with constitutional rights.
If judges have reason to believe that witnesses, especially police officers or government informants, testify falsely, they must refer the matter for prosecution. If they become aware of widespread misconduct in the investigation and prosecution of criminal cases, a referral to the U.S. Department of Justice for a civil rights violation might well be appropriate. *** The U.S. Justice Department seems ready enough to pursue charges of civil rights violations in cases where police have engaged in physical violence, but far more reluctant to pursue misbehaving prosecutors.

And from the East Coast, you have Judge Gertner saying her sentences during 17 years on the bench were unfair and immoral:

Among 500 sanctions that she handed down, “80 percent I believe were unfair and disproportionate,” she said. “I left the bench in 2011 to join the Harvard faculty to write about those stories––to write about how it came to pass that I was obliged to sentence people to terms that, frankly, made no sense under any philosophy.”
No theory of retribution or social change could justify them, she said. And that dispiriting conclusion inspired the radical idea that she presented: a call for the U.S. to mimic its decision after World War II to look to the future and rebuild rather than trying to punish or seek retribution. As she sees it, the War on Drugs ought to end in that same spirit. “Although we were not remotely the victors of that war, we need a big idea in order to deal with those who were its victims,” she said, calling for something like a Marshall Plan.

And yet, nothing seems to be happening with reform....  Same old, same old.

But, we may have a new Broward courthouse:

Florida's most conservative and liberal members of Congress joined forces Tuesday in calling for more federal spending — for projects in the state.
Led by U.S. Reps. Lois Frankel, a Democrat who represents Broward and Palm Beach counties, and Jeff Miller, a Republican who represents part of the Florida Panhandle, half the state's congressional delegation wrote the administrator of the agency in charge of federal buildings that Fort Lauderdale and Pensacola need new federal courthouses.

The letter to the General Services Administration, signed by 13 of the state's 27 representatives, declared an "urgent need" for new buildings, citing "substandard conditions" that "hinder the efficient administration of justice."

Federal judges, and the lawyers who appear before them, have been complaining for years about the courthouse at Broward Boulevard and Northeast Third Avenue in Fort Lauderdale. The development community in Fort Lauderdale has urged a new courthouse as has Mayor Jack Seiler, a lawyer. Cost of a new Fort Lauderdale courthouse has been estimated at $250 million.

I'm gonna miss Jon Stewart: