"Must Read" Opinion From Judge Gleeson (Having To Do With The Fraud Guidelines)

United States v. Ovid, No. 09-CR-216 (JG), 2010 WL 3940724 (E.D.N.Y. Oct. 1, 2010)

Judge Gleeson takes pen to paper again, but selects the fraud guidelines and the DOJ's June 28, 2010 letter to the Sentencing Commission as the target.  In sum, Judge Gleeson sentenced a white-collar offender to 60 months imprisonment, notwithstanding an advisory Guidelines range of 210 to 262 months (there was, of course, a 60 month statutory cap).  The whole decision is a "must read" for any defense lawyer.  Indeed, Judge Gleeson has important things to say about sentencing disparity as well as the role that appellate courts should play in cabining same.  But what's perhaps most interesting for defense lawyers is his "Preliminary Statement," which is quoted in full below:

In a letter dated June 28, 2010 to the Chair of the United States Sentencing Commission, the Director of the Office of Policy and Legislation of the United States Department of Justice (“DOJ” or the “Department”) decries the “evolution” of “two distinct and very different sentencing regimes.” Letter from Jonathan J. Wroblewski to the Hon. William K. Sessions III, at 2, 1 (June 28, 2010) (“DOJ Letter”). One “regime,” the letter contends, “includes the cases sentenced by federal judges who continue to impose sentences within the applicable guideline range for most offenders and most offenses.” Id. at 1. This is apparently the good regime. The “second regime,” by contrast, “has largely lost its moorings to the sentencing guidelines.” Id. at 2. This regime is a cause of concern for the Department. It consists of judges who sentence fraud offenders, especially in high-loss cases, “inconsistently and without regard to the federal sentencing guidelines.” Id. at 4. The Department concludes on this issue (the letter addresses various others as well) that “[t]he current sentencing outcomes in [fraud] cases are unacceptable, and the Commission should determine whether some reforms are needed.” Id . at 5. In short, the premise of the letter is that unless the sentences in fraud cases are “moored” to the advisory ranges provided by the United States Sentencing Guidelines, they produce “unwarranted sentencing disparities” that are “extremely problematic.” Id. at 2.

The DOJ Letter recommends, inter alia, a systemic analysis and synthesis by the Commission of the federal sentencing data it has collected, followed by a report that “explore[s] how to create a single sentencing regime that will earn the respect of the vast majority of judges, prosecutors, defense attorneys, Members of Congress, probation officers, and the public.” Id. at 3. It also suggests that “reforms might include amendments to the sentencing guideline for fraud offenses.” Id. at 5.

The Department is an important influence in the formulation of sentencing policy. Jonathan Wroblewski, the author of the letter, is a thoughtful and well-respected expert in the area. Finally, the Attorney General enjoys ex officio membership on the Sentencing Commission, and Mr. Wroblewski is the Attorney General's designee to that post. For all these reasons, the DOJ Letter to the Commission will carry great weight.

The sentencing of Isaac Ovid on July 30, 2010 illustrates well the fact that, here in the trenches where fraud sentences are actually imposed, there is a more nuanced reality than the DOJ Letter suggests. The letter describes two “dichotomous regimes” in fraud cases-one moored to the Guidelines, the other adrift in the vast regions beneath the low end of the advisory Guidelines ranges. Id. at 2. But Ovid's sentencing shows otherwise. Specifically, it shows how the fraud guideline, despite its excessive complexity, still does not account for many of the myriad factors that are properly considered in fashioning just sentences, and indeed no workable guideline could ever do so. This reality does not render the Guidelines irrelevant in fraud cases; they are in fact quite useful in all sentencings. But sentencing judges know that a full consideration of “the nature and circumstances of the offense and the history and characteristics of the defendant,” 18 U.S.C. § 3553(a)(1), implicates offense and offender characteristics that are too numerous and varied, and occur in too many different combinations, to be captured, much less quantified, in the Commission's Guidelines Manual. A consideration of those and the other factors set forth in § 3553(a) produces sentences that are moored to fairness, and to the goals of sentencing set forth in § 3553(a)(2) but sometimes not so much to the advisory Guidelines range. Indeed, in some cases the fair sentence can drift quite far away from the advisory range, which is, after all, but one of eight factors the sentencing judge must consider.

Ovid's sentencing reveals that the Department knows this as well. Aggressive, experienced, successful white collar prosecutors understand that it does not undermine the Sentencing Guidelines at all, much less create some kind of rogue sentencing regime, when the consideration of factors set forth in 18 U.S.C. § 3663(a) produces a sentence that happens to be substantially below the advisory range.

I support the Department's call for Sentencing Commission review of fraud sentences. But in determining whether reforms are needed, and especially in determining whether the existing guideline should be burdened with even more adjustments, the Commission should examine whether our system already provides an adequate solution for the claimed “unacceptable” outcomes the Department complains about. I suggest that it does, in the form of appellate review, and for all of the handwringing in the DOJ Letter about unacceptable sentences, the Department for the most part has not even tried to avail itself of that solution.

 

Note To Appellate Lawyers: Getting Away From An Appeal Waiver

United States v. Peter, No. 08-1544-cr (2d Cir. April 10, 2009) (found here)

Peter is, for the most part, an unremarkable procedural and substantive unreasonableness appeal.  But Peter's plea agreement contained an appellate waiver (just as most plea agreements do).  Yet, Peter was permitted to proceed with her appeal because the district court never adequately discussed that waiver with her on the record -- thereby opening up the opportunity for the appeal. 

It's therefore clearly important (when reviewing records on appeal) to be on the lookout for this potential loophole.  As the Second Circuit found:

Although Peter’s cooperation agreement contained a waiver of her right to appeal, the government concedes that the district court never questioned Peter on the record regarding her understanding of the waiver, and hence has not moved to dismiss the appeal as waived.  Gov’t Br. 7 n.5; see United States v. Tang, 214 F.3d 365, 368 (2d Cir. 2000) (“[A] waiver of the right to appeal should only be enforced by an appellate court if the record ‘clearly demonstrates’ that the waiver was both knowing . . . and voluntary.” (alteration in original) (internal quotation marks omitted)).  Accordingly, we do not further consider the waiver.

When Bad Things Happen To Good Plea Agreements

United States v. Soto, et al., Nos. 08-0654-cr, 08-0706 (2d Cir. March 25, 2009) (found here)

The defendants signed plea agreements with the Government setting forth stipulated Guidelines ranges.  The Second Circuit does not disclose what those ranges were.  But we do know that the sentencing court "calculate[d] their applicable Guidelines ranges to be significantly higher than the ranges estimated in their plea agreements, and [] sentence[d] them within those ranges."  (For one defendant, the sentencing court calculated the Guidelines range to be 292 to 300 months; for the other it calculated a range of 121 to 151 months.)  The Second Circuit affirmed the sentences, noting (among other things) that sentencing courts are not bound by Guidelines calculations set forth in plea agreements. 

But it was clearly not happy about.  Indeed, it recognized the systemic problems when sentencing courts impose sentences at great variance from that which is anticipated by a plea agreement.  Read for yourself:

We pause, finally, to note the striking size of the discrepancies between the sentences estimated at the time of the defendants' respective pleas, and those that were imposed.  It would be understandable if they came as a considerable shock to the defendants when they were imposed.  We have some concern that they may therefore have an adverse impact on the willingness of criminal defendants to engage in similar negotiations in the future.  We conclude, nonetheless, that the sentences were well within the limits of legal permissibility.

The Power Of "Global" Points

United States v. Yauri, Docket No. 08-1105-cr (2d Cir. March 16, 2009) (found here)

Basically, the Government and the defendant agreed that the defendant's counsel dropped the ball in obtaining a two level "global resolution" reduction.  As described by the Second Circuit, that failure constituted ineffective assistance of counsel.

Ah . . . the power of a plea deal and global points.  Read for yourself:

Yauri and the government agree that the failure of Yauri's counsel to call the sentencing court's attention to the applicable two-level reduction for "global disposition" constitutes an unconstitutionally ineffective assistance of 18 counsel. They therefore agree that this cause should be remanded to the district court for resentencing of the defendant. We, too, agree and we therefore remand.

Corporate Deferred Prosecution Agreements Under The Obama Administration

There's an interesting article on Slate today by Jeff Horwitz, entitled "Almost Criminal: Will the Obama Administration Shy Away from Indicting Lawbreaking Companies?"  Horwitz posits that:

Now that the Bush Justice Department's top brass has decamped for the private sector, it might seem reasonable to expect that the new Obama DoJ will start charging big companies for the crimes they commit. But that's not likely. Given the power that deferred prosecutions give prosecutors, and the fear that corporate trials do more harm than good, Obama's appointees aren't likely to change course. That might be pragmatic, but it's not the end to corporate exceptionalism that Obama proposed on the campaign trail.

What do you think?

Why Should Criminal History Impact Sentence Reduction For Cooperation?

United States v. Tchiapchis, No. 07-5161-cr (2d Cir. Jan. 9, 2009)

Tchiapchis pled guilty one count of conspiracy to distribute MDMA, and entered into a cooperation agreement with the Government.  Although we don't know what sentence was imposed, we do know that it was lower than the advisory Guidelines range of 121 to 151 months.  Still, Tchiapchis was unhappy -- primarily because he thought he'd get a greater benefit from his cooperation.

Not so fast, says the Second Circuit.  The district court had "acknowledged that Tchiapchis was entitled to a downward departure -- because of the cooperation agreement -- but concluded upon consideration of Tchiapchis's criminal history that a smaller departure than requested was warranted."  And the Second Circuit approved.

Criminal history can't change -- you can't unring the bell.  Moreover, as I've always understood it, the benefit one receives from cooperation is linked directly to the value of the cooperation provided.  Seems like a bum deal to me.  Can't blame Tchiapchis for being upset.

Plea Agreements and Reasonable Waiver

United States v. Abbadessa (Chinnici), No. 06-2398-cr (2d Cir. Jan. 29, 2007) (found here )

What terms did the plea agreement include such that Second Circuit wrote that "[a]s for his sentence, there is some doubt as to whether the appeal waiver in [the] plea agreement waives his ability to challenge the reasonableness of it"?

Non-Guidelines Sentences Based On Fast-Track Disparity Still Possible In The Second Circuit?

United States v. Liriano-Blanco, Docket No. 06-2919-cr (Jan. 2, 2008) (found here)

Liriano-Blanco pled guilty to illegal re-entry charges.  The district court declined to impose a non-Guidelines sentence because it believed that it could not do so based on fast-track disparity.  But the district court also believed that Liriano-Blanco's sentence could be appealed, actually encouraged appeal so that the fast-track disparity question could be decided by the Second Circuit, and indicated that it would impose a different sentence if the Second Circuit ruled that a non-Guidelines sentence could, in fact, be based on fast-track disparity.  The only problem was that Liriano-Blanco signed a plea agreement containing an appeal waiver provision, and no one corrected the district court's misunderstanding at sentencing.  The Second Circuit remanded to correct this error.

What's interesting about Liriano-Blanco, however, is what the Second Circuit says about fast-track disparity.  We know that the Second Circuit found in United States v. Meija (discussed here) that "a district court's refusal to adjust a sentence to compensate for the absence of a fast-track program does not make that sentence unreasonable."  But the Second Circuit acknowledged in Liriano-Blanco that it has never decided the question of "whether the district court has the authority to impose a non-Guidelines sentence in response to the fast-track sentencing disparity if it deems such a reduced sentence to be warranted." 

The door is therefore still open in the Second Circuit on fast-track disparity.  And, in light of Rita, Kimbrough and Gall, it seems likely that the Second Circuit would ultimately find (when presented with the question) that a district court is authorized to impose a non-Guidelines sentence based on fast-track disparity, and that such a sentence would be reasonable.

Government Crosses The Line And Breaches Plea Agreement

United States v. Griffin, Docket No. 05-4016-cr (2d Cir. Dec. 21, 2007)

An important case involving the circumstances under which the Government can be held to account for breaching a plea agreement.

The Government agreed in Griffin's plea agreement "not to oppose the recommendation that the Court apply the two (2) level downward adjustment of Guidelines § 3E1.1(a) (acceptance of responsibility) and further agree[d] to move the Court to apply the additional one (1) level downward adjustment of Guidelines § 3E1.1(b)."  The plea agreement, however, also permitted the Government to "respond at sentencing to any statements made by the defendant or on the defendant's behalf that are inconsistent with the information and evidence available to the government." 

That's what the Government did, and that's what got it into hot water with the Second Circuit.

Specifically, in response to Griffin's objections to the PSR, the Government discussed the possible downward adjustment for acceptance of responsibility under U.S.S.G. § 3E1.1 in two separate written submissions.  It first noted that "the government is troubled by some of the defendant's objections which seem to raise questions regarding whether the defendant has truly accepted responsibility."  The submission continued by stating that "[h]owever, the defendant did timely notify authorities of his intention to enter a guilty plea, thereby permitting the government to avoid preparing for trial and permitting the government and the court to allocate their resources efficiently." 

But that wasn't all it said.  It made a second submission in response to Griffin's arguments -- permitted by the terms of the plea agreement -- that no relevant conduct was applicable to his sentencing beyond that to which he pled guilty.  In that second submission, the Government wrote that "the defendant is attempting to limit his conduct to only that to which he pled guilty," which "leads the government to question whether the defendant has truly accepted responsibility pursuant to U.S.S.G. § 3E1.1(a)."  The Government then reviewed the legal framework of a downward adjustment for acceptance of responsibility, concluding: "It is unclear whether the defendant's objections to the inclusion of all the relevant conduct rises to the level of outweighing his acceptance of responsibility.  Suffice it to say that the defendant's objections to the relevant conduct raises [sic] questions on the issue of acceptance."

Well, that was just too much for the Second Circuit -- it was "well beyond the pale."  According to the Second Circuit:

No discussion of an acceptance of responsibility adjustment was solicited by the court.  It was not an effort simply to correct an inaccurate representation of relevant sentencing law.  Nor did the government merely provide information or evidence in response to any statements by the dedendant.  Instead, the government, on its own initiative, warned the court about what it considered to be "troubling" statements by the defendant in his submission to the court in anticipation of sentencing. (Internal citations omitted.)

In a word, the Government breached the plea agreement by encouraging the sentencing court to deny an adjustment for acceptance of responsibility. 

The remedy?  Two were available: (a) specific performance; and (b) permitting withdrawal of the guilty plea.  Since Griffin sought only specific performance, the Second Circuit vacated the sentence and remanded for resentencing.  In doing so, it directed that the case be reassigned, fearing that "[i]f the district court were again to deny acceptance of responsibility, there is no way to be certain that the government's breach had no effect on that determination."

Griffin, however, was not a unanimous decision.  A dissent was filed.  It's conclusions are well-summed up by its introductory paragraph:

The majority concludes that this case should be remanded to a new district court judge for specific performance of the government's promise not to object to defendant's request for an acceptance of responsibility adjustment.  It does so in the name of preserving the integrity of the plea bargaining process and public confidence in the federal criminal justice system.  I agree with my colleagues that courts must be vigilant in holding the government to its promises.  I submit, however, that the majority's analysis overlooks a crucial fact in this case -- defendant's own prior breach of the agreement.  In my view, remand will seriously undercut the very policy concerns the majority seeks to protect.  I therefore respectfully dissent and vote to affirm the judgment.

Reversal And Remand Where Government Breached Plea Agreement

United States v. Turner, No. 06-0967-cr (2d Cir. Dec. 17, 2007) (found here)

Turner went way off the tracks.  He was sentenced to 240 months.  But he requested, with the Government's consent, that his sentence be remanded to the district court for de novo resentencing due to the Government's breaches of the plea agreement, which included: (1) an incorrect claim that Turner's misrepresentations forced government representatives to go to the Bahamas to interview victims and obtain records; (2) Turner's failure to disclose the identity of victims, as the plea agreement did not require Turner to do so; and (3) an incorrect claim that Turner failed to disclose a particular brokerage account.  In a footnote, the Second Circuit also notes that the Government breached the plea agreement "by admittedly contradicting the plea agreement stipulation several times, including at sentencing."

Does anyone know what happened in this case?  How could it have gone so wrong?