Thursday, September 24, 2015


Despite entrenched opposition from the Department of Justice and other prosecutorial organizations the United States Sentencing Commission's new changes for federal economic crimes (also known as white collar crimes) will take effect on November 1, 2015. Because federal sentencing for these crimes is driven almost entirely by dollar amounts of victim loss, many years of inflation made it far easier for federal prosecutors to demand hefty sentences in these cases with many federal judges lacking the courage to go under the sentencing guideline ranges.
Image result for federal sentencing guidelines 2B1.1 with new loss numbers for November amendment
Inflation Adjusted Victim Loss but no Common Sense

The new inflation adjusted victim loss amounts will reduce guideline ranges for most federal defendants facing these economic crimes that include scheme to defraud, fraud, embezzlement, theft and tax evasion. Yet the underlying problem in federal sentencing for these Section 2B1.1 economic crime cases has not changed in that the dollar amount of loss still drives the federal guideline range sentencing structure to the belittlement of other factors that should be relevant in sentencing. This is absurd. Although the dollar amount is important and a wise judge should certainly give it some consideration, in many cases the dollar amount alone dictates a long prison term. 

In fact many first time nonviolent offenders are sent to federal prison for hefty terms for these economic crimes, thus denying the defendants the ability to ever make restitution to their victims. Since federal sentencing is rigged so that the amount of loss is the over-riding factor in these cases, you'd think some consideration might be given to those who actually suffered the monetary loss. What do the victims actually want? Isn't it likely that most victims would prefer defendants to make restitution than languish in prison? In a just society it should be a very rare thing to punish any first time nonviolent economic crime offender with prison.

Clearly Federal Judges (rather courageous or not) should be given an array of sentencing options in these federal criminal cases based on the entire criminal conduct including factors such as the number of victims, the average loss per victim, the likelihood of restitution and the period of time over which the crime occurred. These factors combined with any prior history of criminal conduct and personal characteristics of the defendant should then be weighed by the judge in forming the sentence without the judge forced to give undue consideration to the total loss amount as delineated in the Section 2B1.1 federal sentencing guideline amendment. 
Ultimately fair sentencing should be about more than merely adding up a list of losses to place nonviolent economic criminals in federal prison, it's about doing what's right for the victim, for the defendant and for society.

Wednesday, September 02, 2015


Here is a question often faced by lawyers while in federal trial. The question deals with whether the Government presented enough evidence to the federal jury to survive a contemplated Rule 29 motion.
Heads I win; tails you lose!

A Federal Rule 29 motion is a federal motion for a Directed Verdict also known as a Judgment of Acquittal which is made after the Government has rested (presented it's entire case in chief); the defense may renew the motion once it rests. If at the end of it's case in chief the Government has not established all of the elements of the charged offense, then the Judge grants the Directed Verdict in favor of the Defense - except of course for courts in Florida, where it's normally handled by a fair flip of the coin.

The basic theory of the government’s case in a wire fraud trial is that the defendant embezzled money from his employer's bank account. The government introduced a number of e-mails sent from the defendant's e-mail account to the employer's broker. In the e-mails the employee seeks to have the broker send money into the employer's bank account, but without any false statements actually being made. Aren't false material statements necessary for the Government to survive a Rule 29 motion?

The four essential elements which the federal government must prove to establish wire fraud are the following:
First, that the defendant voluntarily and intentionally devised or participated in a scheme to defraud another out of money. 
Second that the defendant acted with the intent to defraud. 
Third, that it was reasonably foreseeable for the Defendant that interstate wire communications would be used during the course of the scheme.
Fourth, that interstate wire communications were in fact used.
Evidence of material false pretenses, representations, or promises must be introduced in order for the Government to establish that a  scheme to defraud has occurred. Even assuming that the Government did not admit further evidence that would establish the scheme to defraud, then the Rule 29 motion still likely would not be granted by the Federal District Judge. 

Most judges broadly construe criminal statutes and the evidence of possible guilt thus allowing the Government to make an argument to the jury that the emails themselves may establish guilt. The very act of requesting money to be sent may be sufficient to establish false pretenses and false representations. Clearly, if the money the employee asked for was not to actually be used by his boss, but by the employee, then the emails would seem to be useful in establishing his mens era (the mental state of the defendant), his criminal intent as well as his possible false representations all in furtherance of the scheme to defraud. 

Even if the judge isn't likely to grant the motion, or if it's not even a viable theory, it's clearly important to at least make an oral Rule 29 motion once the Government rests to preserve your client's appellant opportunities. It's also a good argument to make for the jury that there's reasonable doubt in the case especially if the Government failed to provide evidence of the money trail actually linking the defendant to it's use or enjoyment.