Tuesday, January 28, 2014
The degree of causation necessary to impose legal blame is an interesting philosophical, policy and, of course, legal issue. It is an issue that probably arises more often in tort than criminal cases, but is nonetheless important in criminal law in several areas, including sentencing considerations.
In Burrage v. United States, ___ U.S. ___ (12-7515, January 27, 2014), the Supreme Court considered the meaning of the term "result from" in a case where the district court imposed a 20-year mandatory minimum sentence upon a defendant for the sale of one gram of heroin since a buyer's death had "result[ed] from" the use of the heroin as one of several drugs he consumed that contributed to the death.
Burrage was convicted of distribution of narcotics to Banka, who died after imbibing the heroin and several other drugs. Medical experts at trial could not rule out that Banka might have died from using the other drugs even if he had not taken the heroin, but opined that the heroin use was a contributing factor to his death.
The district court declined to accept the defense contention that the statutory term "result from" required a "but-for" standard. Instead, it construed the phrase to mean that the drug sold had only to be a "contributing cause" of the death and so charged the jury. The Eighth Circuit affirmed.
In a unanimous opinion, written by Justice Scalia (who has authored some of the most innovative and pro-defense decisions by the Court in recent years), the Court reversed, ruling that the term "result from" should be construed in its "ordinary meaning" to require a "but-for" standard of causation -- that the harm would not have resulted "but for" the defendant's conduct. It was, therefore, the Court found, not enough for the trier of fact to find that the drug transfer was merely a "contributing factor" to the death. The opinion discussed the Model Penal Code, the Restatement of Torts, baseball, and the rule of lenity, as well as the Court's recent restrictive reading of the term "because of" in discrimination cases, a discussion which triggered a special concurrence by Justice Ginsberg (which she apparently would not have felt the need to write "but for" that discussion).
The government, not untypically, made a doomsday argument that defining "result from" as the Court did would "unduly limit criminal liability" and "cannot be reconciled with sound policy." The Court disagreed, doubting that the opinion would prove to be a "policy disaster."
Although very unlikely to be a "disaster," the opinion may have ramifications beyond drug cases. The issue of what consequences resulted from the defendant's conduct arises frequently in homicide and assault cases, and also occasionally in white-collar cases, for instance in determining the amount of loss or harm for sentencing purposes. At the least, it appears that in federal criminal law the term "result from" now will have a more narrow meaning than previously.
Wednesday, January 22, 2014
The statistics section of the website of the federal Bureau of Prisons (http://www.bop.gov/about/statistics/) has some interesting statistics.
Some of the more interesting are:
1. The median (50% of the population) age of federal prisoners is between 36-40 years.
2. The median sentence is between 5 and 10 years; 13% of the sentences are 20 years or more; 2% are less than one year.
3. 25% of the prisoners are not United States citizens; 18% are citizens of Mexico.
4. 35% are classified as Hispanics.
5. 7% are female.
6. 37% are black.
7. 50% are imprisoned for drug offenses, 11% for immigration offenses, 6-10% for white-collar crimes.
8. 17% are housed at a minimum security level, 40% at a low security level.
(Hat tip to Mark Allenbaugh.)
Monday, January 20, 2014
Thursday, January 16, 2014
One of the increasing incursions into constitutional rights in the white-collar area is the expansion of the "required records" exception to the Fifth Amendment privilege against self-incrimination. In general, that doctrine provides that an individual or entity required by law to maintain for regulatory purposes certain records has no Fifth Amendment right to refuse to produce them to the government.
The Second Circuit last month, in affirming a contempt finding against an individual for failing to produce to a grand jury records of foreign bank accounts mandated to be kept by regulations promulgated pursuant to the Bank Secrecy Act, 31 CFR 1012.420 ("BSA"), held, in accord with prior rulings by other circuits, that the "required records" exception to the Fifth Amendment privilege against self-incrimination pertains to the production of such records. In Re Grand Jury Subpoena Dated February 2, 2012, (13-403-CV, Dec. 19, 2013).
The individual contended that he had a Fifth Amendment right to refuse to comply with a grand jury subpoena for foreign bank records. He claimed that the subpoena put him in a Catch-22 position: produce documents that might incriminate him or confirm that he failed to maintain records of his foreign bank accounts, which also might incriminate him. The court essentially said "tough," and affirmed the contempt order.
The court first considered whether the "act of production" doctrine (see United States v. Hubbell, 500 U.S. 27 (2000)) applied to "required records." Under that doctrine, generally a person could on Fifth Amendment grounds resist a subpoena for the production of records unless the government could demonstrate it was a "foregone conclusion" that the person actually possessed such records. Although the contents of the records, as in the case of "required records," might not be privileged, by producing them the individual essentially incriminated herself by its production by admitting, among other things, that she possessed such records. The court held that the Fifth Amendment did not apply to required records, either as to the content of or production of such records, and thus the "act of production" privilege, a form of Fifth Amendment protection, did not apply.
The court then applied the three-prong test of Grosso v. United States, 390 U.S. 62 (1968), to determine whether the required records doctrine applied to the BSA regulation. That test provides, first, that the purpose of the legal requirement must be "essentially regulatory;" second, that the information sought must be of a type "customarily kept;" and third, that the records must have "public aspects" which make them at least analogous to public documents. The court then held that the regulation, although it was designed in part to facilitate criminal prosecutions, was "essentially regulatory" in that it did not target only those suspected of criminal activity since possession of foreign bank accounts by itself was not unlawful. Second, it held that the records were "customarily kept" since holders of bank accounts are likely to be aware of or have records of the details of their accounts. Third, the court held that "records lawfully required to be kept" for purposes of constitutional analysis by definition have "public aspects." Practically, such a finding eliminated this third prong as an independent prerequisite for application of the exception.
In sum, the court essentially ruled that any records ordinarily kept by individuals that are required to be made available to governmental authorities pursuant to a law not primarily designed to detect criminal activity lack Fifth Amendment protection.
Thus, the decision essentially gives federal prosecutors the ability to subpoena any person and demand that she produce any foreign bank records she possesses, even absent any knowledge or suspicion that she has such an account. To be sure, in this case, and virtually all other reported cases involving subpoenas of foreign bank accounts, the government appears to have had a considerable basis to believe the person subpoenaed does have a foreign bank account. The Second Circuit's ruling, however, at least implicitly, does not require that such governmental knowledge be a prerequisite for an enforceable subpoena for foreign accounts. "Fishing expeditions" for foreign bank account information appear to be allowed.
I would not be surprised, therefore, to see a considerable increase in the number of governmental subpoenas for records of foreign bank accounts, and perhaps the addition of a boilerplate request for foreign bank records in other subpoenas for financial records. As they say, there's no harm in asking.
Monday, January 13, 2014
I have no particular sympathy for Governor Chris Christie in his current political travails. But the notion that he or his aides committed a federal crime is ludicrous, and the New Jersey U.S. Attorney's rash public announcement of a criminal investigation is a shameful example of DOJ's continuing politicization. Oh, I know, everyone commits a federal crime every single day. It's what makes America great. But I'm talking about a real crime, that a real prosecutor would seriously tackle. Contrast Paul Fishman's aggressive stance with DOJ's spectacular non-reaction to the fraud-induced 2008 financial crisis. How pathetic.
Tuesday, January 7, 2014
This interesting question is raised in a recent filing of a Petition for Cert in the U.S. Supreme Court - Stinn v. United States. The case emanates from the Second Circuit and presents a jurisdictional split on whether employee compensation should be allowed as "money or property." Petitioner raises the following two questions:
1. Whether there are any limits on the extent to which employee compensation satisfies the “money or property” element of the Title 18 fraud statutes and, if so, what factual determinations by the jury are necessary to implement those limits.
2. Whether the property-loss requirement of the Title 18 fraud statutes is satisfied with proof that shareholders were denied their “intangible right to information or control.”
One also has to wonder about the government's prosecution of cases related to employer-employee relations. Shouldn't these matters be civil actions? And with limited resources, wouldn't resources be better spent on identity theft and other serious crimes.
Thursday, January 2, 2014
Corporate Crime Reporter, Brandon Garrett Talks Corporate Crime
Scott Cohn, USA Today, CEO in cuffs? 2014 Wall Street crime predictions
Ed BAllard, Marketwatch WSJ, U.K. corruption probe begins at Rolls-Royce
Benjamin Weiser, Judge Orders Release of Dying Lawyer Convicted of Aiding Terrorism
Alan Farnham, ABC News, Dennis Kozlowski's Life After Prison
Walt Pavlo, Forbes, The Top White-Collar Cases of 2013