United States v. Woolf Turk, no. 09-5091 (Nov. 30, 2010). The defendant pled guilty to conspiracy to commit wire and mail fraud, was sentenced to 60 months’ imprisonment, and ordered to pay $29.6 million (all stemming from a scheme in which the defendant obtained money from investors based on the promise that certain real estate would secure the investments and which real estate instead secured loans from commercial lenders). The loss calculation was the major factor in the sentence and on appeal the defendant argued that the loss should have been near zero. The defendant’s zero-loss theory urged that at the time the fraud was discovered, a sale of the properties would have yielded enough to repay both the secured lenders and unknowingly unsecured investors. Ultimately, the discovery of the fraud and the collapse of the housing market meant that the unsecured investors recovered essentially nothing.
On appeal, the Second Circuit rejected the defendant’s zero-loss theory. Fundamentally, the Court noted that the victims’ loss was not the decline in the value of the property they invested in; rather, it was the loss of the principal invested, but never repaid. Likewise, although a defendant may receive credit against the loss for any funds repaid or collateral held at the time of sentencing, the real property involved in this scheme did not actually secure the investments (as it was supposed to) and thus was not collateral. The Second Circuit found additional support for its decision in a recent district court case and approvingly noted that court’s conclusion that “a defendant may not reasonably count on the expected sale value of collateral to save himself from the foreseeable consequences of his fraudulent conduct.” United States v. Mallory, 709 F.Supp.2d 455, 459 (E.D. Va. 2010). The defendant’s other claims were rejected summarily.
United States v. Fuller, no. 09-1437 (Nov. 30, 2010). In this challenge to a SORNA conviction, the Second Circuit rejected the defendant’s claim that SORNA did not apply to him because his interstate travel occurred during the period between the Act’s enactment (July 27, 2006) and the Attorney General’s interim ruling (February 28, 2007), which affirmed that the act applied to offender’s whose predicate offenses predate the provision. Instead, the Court held that the provision applied upon enactment to sex offenders whose predicate offenses predate the Act. The Court also concluded that SORNA is a general intent crime.
In reaching its decision, the Court noted a circuit split on the defendant’s claim, but also noted the well-established rule that a law takes effect on the date of its enactment. The Court also explained that it rejected the argument that SORNA did not apply until the Attorney General’s interim ruling because to accept the argument would be to effectively grant the Attorney General the power to apply the Act to a class of individuals not already within the provision’s ambit. Moreover, the Court explained that to accept the defendant’s claim would require the Court to conclude that Congress was indifferent as to whether the 500,000 preexisting offenders would be covered. Given Congress’s intent to enact a comprehensive national registration system, the Court reasoned that it was more logical that the Act applied to all sex offenders. In this interpretation, the power granted to the Attorney General was the power to determine how, not whether, the Act applied to offenders whose convictions predate SORNA’s enactment.
With respect to the defendant’s claim that SORNA requires a specific intent to violate the provision, the Court explained that it had previously held that the use of “knowingly” is a signal that a crime is a general intent crime. Judge Raggi concurred in a separate opinion.
United States v. Kalish, no. 08-3374 (Nov. 24, 2010). Kalish appealed the forfeiture and restitution remedies entered after he was convicted of mail and wire fraud (all stemming from a scheme in which Kalish’s company collected “refundable” fees from loan applicants in advance of obtaining loans from certain private investors). On appeal, Kalish argued that the forfeiture amount was improperly calculated, that a money judgment should not have been entered against him personally, and that the forfeiture amount should have been offset by the restitution amount.
The Second Circuit found there was abundant evidence to support the inclusion of the fees received from all customers in the forfeiture amount, even though some customers were ultimately not defrauded. Likewise, the Second Circuit explained that although some conduct predated the enactment of the forfeiture statute (28 U.S.C. § 2461), the pre-enactment sums that were collected could still be subject to forfeiture so long as the course of conduct continued past the enactment date. Nor was it error for the district court to enter a money judgment against Kalish personally and the Second Circuit noted that it had previously upheld such an in personam judgment entered pursuant to 21 U.S.C. § 853 and that the statute at issue in Kalish’s proceeding (28 U.S.C. § 2461) incorporated the provisions of section 853. Finally, the Court concluded that although a defendant would likely be entitled to offset any restitution amounts actually paid against the forfeiture, it was not error to order both a forfeiture and restitution remedy.
United States v. Miller, no. 08-1152 (Nov. 23, 2010) (appeal from United States District Court for the District of Vermont). Following a jury trial, Miller was convicted of international parental kidnapping. On appeal, she argued that the district court erred when it excluded evidence that she was in the process of appealing the Vermont custody order (the government relied on two custody orders, one from Massachusetts and one from Vermont). She also argued that the district court should have continued her trial until her (ultimately successful appeal) to the Vermont Supreme Court concluded as well as that there was insufficient evidence to support her conviction.
The Majority rejected Miller’s arguments and concluded that evidence of the Vermont appeal was not relevant because the government could prove its case based solely on the Massachusetts order. For essentially the same reasons, the Majority rejected Miller’s argument that the district court should have granted her a continuance during the pendency of the appeal and that her conviction was not supported by sufficient evidence.
Judge Straub, dissenting, concluded that international parental kidnapping was a specific intent crime and the evidence of the appeal was relevant to Miller’s intent and should have been admitted.
United States v. Douglas, no. 09-4955 (Nov. 23, 2010) (appeal from United States District Court for the District of Vermont) (per curiam). Douglas was convicted, following a jury trial, of attempting to entice a minor to engage in illegal sexual activity and knowingly transporting child pornography in interstate commerce. On appeal, the Court rejected his argument that he could not commit the crime of attempting to entice a minor to engage in illegal sexual activity by communicating with a person he thought was an adult. Instead, the Court explained that in 18 U.S.C. § 2422(b) Congress chose to criminalize persuasion and the attempt to persuade rather than the underlying illegal sexual acts; thus, all that is required is an intent or attempt to persuade. Nor was it a defense that Douglas corresponded only with someone he thought was an adult. Such a result would be illogical, the Court concluded, because “the efficacy of § 2422 would be eviscerated if a defendant could circumvent the statute simply by employing an intermediary to carry out his intended objective.” Slip. Op. at 7 (quotations/citations omitted).
United States v. Davis, no. 09-3626 (Nov. 5, 2010). Davis was convicted, following a jury trial, of sexual exploitation of a minor, child pornography offenses, and being a felon in possession of ammunition; he was ultimately sentenced to 120 years in prison. On appeal, the Second Circuit affirmed the district court’s conclusion that the safe in which child pornography and ammunition was found had been abandoned by Davis because he had not returned to retrieve the safe or its contents in the more than 18 months since he had been kicked out of the home by his estranged wife. Likewise, the Second Circuit rejected Davis’ claim that evidence of a 1991 sodomy conviction was improperly admitted under F.R.E. 414. Instead, the reviewing court concluded that although the prior conviction might be highly prejudicial, it was not unfairly prejudicial because the district court declined to admit another sexual assault conviction and limited the information about the 1991 conviction that was presented to the jury.
Finally, the Second Circuit rejected Davis’ claim that 18 U.S.C. § 2251(a) required that he knew or had reason to know that the child pornography would be transported in interstate commerce at the time the picture is produced. Instead, the Second Circuit agreed with the district court that the knowledge component in section 2251(a) could be satisfied by proof of the knowledge up to the point at which the pictures were seized by law enforcement. The Second Circuit reached this conclusion for two reasons. On the one hand, the reviewing court noted section 2251(a)’s two other jurisdictional elements did not have a contemporaneous-knowledge requirement and the court concluded that the first clause fit better with the second and third clauses if no contemporaneous-knowledge requirement is read into the provision. On the other hand, the Second Circuit thought that the Congressional findings regarding a provision that amended section 2251 evidenced a clear intent to broaden, rather than narrow, the provision’s reach.
Other:
McKithen v. Brown, no. 08-4002 (Nov. 19, 2010). This was the second appeal in a 42 U.S.C. § 1983 case brought by a New York prisoner who sought DNA testing of certain evidence from his 1993 state-court case. In this appeal, the Second Circuit concluded that District Attorney’s Office for the Third Judicial District v. Osborne, 129 S.Ct. 2308 (2009), governed and required reversal of the district court’s decision finding a due process right to obtain access to the evidence for DNA testing. With the Osborne Court’s conclusion that non-capital defendant’s have no liberty interest in meaningful access to state clemency mechanisms and its approval of a DNA testing scheme that was more restrictive than New York’s, the Second Circuit could only conclude that absent proof of a fundamental inadequacy, Osborne required that the federal courts defer to the state legislative judgment as reflected in New York’s DNA testing provision.
