Recently in the Government Misconduct category:
A middle-aged woman, who taught English and translated documents for an Iranian dissident group dedicated to democracy, hardly fits the image of a terrorist, but that individual happens to be the sole defendant in a single-count federal indictment in Brooklyn charging her with providing material “personnel” support to terrorists. Ms. Taleb-Jedi’s problem is that the organization for which she worked, the People’s Mojahedin Organization of Iran (“PMOI”) is also committed to the violent overthrow of the Iranian government, and as such, is on the U.S. government’s list of foreign terrorist organizations (“FTO”). The fact that now – more than ten years after that designation – the PMOI has become the current darling of the U.S. military, the U.K. no longer designates it a terrorist organization finding that its means and methods have changed, and the U.S. military as well as several members of Congress similarly think the terrorist designation should be reversed, is immaterial.
In United States v. Taleb-Jedi, 06 Cr 652 (BMC), 2008 WL 2832183 (E.D.N.Y. July 23, 2008), the court denied her lawyers’ multi-layered and creative motion to dismiss the indictment, but in the process warned the prosecutors that “if the proof at trial shows only that defendant participated in the PMOI through mere membership and chanting at meetings, it may well be insufficient to reach a jury or sustain a guilty verdict.” Similarly, “if the defendant taught English for the sole purpose of helping other members to advocate before the United Nations on behalf of the PMOI, the statute may not reach such conduct.”
The case is a splendid example of no-stone-unturned criminal defense. Ms. Taleb-Jedi’s lawyers argued variously that the indictment should be dismissed for failure to state a claim under Fed.R.Crim.P. 7(c) (because it fails to detail the material support provided), that the statute is unconstitutional under the First and Fifth Amendments (because it precludes the defendant from challenging at trial the FTO designation), that the statute’s specific intent element is deficient (it is not enough that the defendant intend to further the PMOI’s goals, she must also specifically intend to further its terrorist aims), that the statute is impermissibly vague (because it doesn’t adequately define “personnel”), that the statute is overbroad (because it criminalizes protected First Amendment activity) and that the prosecution is outrageous (e.g., because the U.S. military may now use the PMOI to gather intelligence).
In a lengthy and meticulous decision, the court rejected these challenges, highlighting the difference between someone who is merely an advocate, and one who is an actual employee, “under the terrorist organization’s direction or control.” The court also noted that in wartime, it is permissible for the military to pick and choose its friends, and the DOJ its enemies, war being an “outrageous but . . . sometimes necessary undertaking.”
The case is, however, a disturbing reminder – in the same week that Osama Bin Laden’s driver gets acquitted of the most serious charge against him and sentenced to close to time-served by a military jury – that in the war on terror, just like the war on drugs, the Department of Justice devotes its preciously limited resources on easy and innocuous targets.
In United States v. Johnson, 2008 WL 2446143 (2d Cir. June 19, 2008), the Second Circuit presents a primer on the questions an AUSA cannot ask their case agent at trial, the questions defense lawyers should object to, and government justifications that don’t hold water. Grudgingly affirming co-defendant Walker’s conviction (which resulted in a life sentence), despite “large amounts of impermissible matter,” the decision is an invaluable resource to counter the government efforts to sneak improper testimony in under the guise of “background.”
The Second Circuit Blog has some choice words for this decision, so I will focus here on the things agents cannot say, and the fallback arguments prosecutors cannot make. Forgive the fact that some of these may seem patently obvious. They weren’t to Walker’s lawyer, who failed to object to a single instance, thus leaving Walker with the plain error standard of review. Had he objected, the Court indicated that would have tipped the balance in favor of reversal.
Agent Don’ts
- Agent cannot repeat hearsay describing defendant’s criminal acts (“we had identified basically three principal higher-level players, Mr. Walker, etc.;” “[cooperating witness told us] that he had obtained the crack cocaine from . . . Ernest Walker, who we were already investigating, having identified him as the supplier of multi-ounce crack quantities;” “[cooperating witness confirmed] that he now got [his crack] from Mr. Walker;” “there was a male . . . involved with . . . Mr. Walker in the distribution of crack cocaine and other criminal endeavors”)
- Agent cannot vouch for credibility of government witness (“when I’m asked as to how I believe [the witnesses] . . . it’s information from other people, actual physical evidence, and verification through interviewing the people who are involved”)
- Agent cannot say or even imply that information obtained from investigation “corroborated” other evidence (another cooperating witness “provided[d] information to law enforcement as well,” thus implying that this witness “had confirmed Walker’s involvement in drug dealing”)
- Agent cannot assert own belief about defendant’s guilt (see above)
- Agent cannot announce his own assessment of the defendant’s character (“very shrewd, smart, street-smart, calculating . . .”)
- Agent cannot assure the jury of the reliability of the government’s entire case (I am a Special Agent, who “investigates violations of the federal controlled substance laws,” identifies individuals involved in the drug trade, uses “investigative techniques to obtain evidence” and “then bring that evidence to a court such as this, to hold these people accountable for their illegal actions”)
Government Don’ts
- Cannot backdoor improper, incriminating hearsay evidence as “background of the investigation.” Balancing test of Rule 403 dictates that “unimportant issue of investigative background” does not outweigh “substantial prejudice to the defendant on the crucial issue of proof of guilt,” particularly where it may be possible to redact the prejudicial portions.
- In a related vein, nor can it backdoor hearsay evidence to prove “state of mind of the investigating agents, to help explain their actions.” The Court held in Johnson: “[t]he agent’s state of mind as the investigation progressed is ordinarily of little or no relevance to the question of the defendant guilt.”
Defense Lawyer Dos
· Object!
Adding to a spate of recent decisions yielding divergent views of the propriety of the government’s conduct in plea bargaining and sentencing (see here, here and here), United States v. Wyatt, 06-cr-782 (DLI), 2008 WL 2433613 9E.D.N.Y. June 12, 2008), should serve as a warning to prosecutors, and a reminder to the Second Circuit that the government’s good faith in the plea bargaining process and at sentencing is not a given.
Facts
In Wyatt, the defendant pled guilty to being a felon in possession of a weapon, with a standard EDNY plea agreement, that estimated his guideline level at 31 to 41 months, and promised that “based on the information known to [it],” the government will not argue for a specific sentence, whether within or above the guideline range determined by the court. In the presentence report, the defendant’s guideline range was calculated at 63-78 months, enhanced by virtue of a youthful offender conviction, unknown to the government and defense counsel at the time of the plea.
In response to the defendant’s mitigation claim that he had been victimized, the government filed a sentencing memorandum highlighting Wyatt's criminal history, and also gratuitously advising the court that in a racketeering trial of the notoriously violent “Folk Nation” street gang, a cooperating witness testified that the defendant had supplied the weapon to commit a murder. The government even helpfully appended a copy of the relevant transcript. There was no dispute that this information was in the government's possession at the time of the plea. Probation promptly revised its report, cross-referencing with the murder guidelines, and calculated the defendant’s guideline at 120 months, which but for the statutory cap on the offense of conviction, would have been 360 months to life.
At a sentencing conference, when the court queried why the government had provided the Folk Nation information, the prosecutor cited his “obligation to bring to the court all of the information that was known to it about this defendant” and so that the court could consider it under 18 U.S.C. §3553(a) and “for whatever other purpose or effect it might have.” The prosecutor emphasized that he was not advocating for anything above the 78-month high-end of the applicable guideline range.
Holding
The court first held that she would not consider the Folk Nation information because it was unreliable. The transcript provided by the government did not clearly identify the Wyatt as the source of the murder weapon, much less, that he provided it with knowledge that it would be used in a murder. Since the government refused to provide additional corroborative evidence, the court disregarded it, citing the defendant’s “due process right to receive a sentence based on accurate and reliable information.”
Next, she addressed the “potentially prejudicial conduct by the government” in disclosing the unsolicited Folk Nation information. Noting that the government may breach a plea agreement by simply making comments that amount to an argument for an upward departure, she concluded that the disclosure here “altered the parties’ original understanding of their plea agreement.” She explains: “The government knew or should have known that disclosing this information at sentencing could raise the defendant’s sentence.” Moreover, this conduct “is not fully shielded by [the government’s] obligation to inform the court of information relevant to sentencing” because, here, the government “crossed the line from informing the court to improper advocacy” when it advocated the use of the Folk Nation information as part of the court’s §3553(a) consideration, or for any particular sentence within the applicable guideline range, in particular, a sentence at the high end of 78 months.
However, in light of the fact that the defendant did not seek to withdraw his plea, and since the court had disregarded the objectionable information as unreliable, the breach did not require any remedy. The court would adopt the guideline range of 63-78 months, but advised the parties that she might still impose a sentence above that range based on factors other than the Folk Nation information.
Comment
To her credit, Judge Irizarry recognized that the Folk Nation information was both unreliable and provided in breach of the plea agreement, and has therefore resolved not to consider it in imposing sentence. The problem is that the genie is now out of the bottle. It may implicitly inform the sentence ultimately imposed, and even if it doesn’t, it may be perceived to have influenced that decision. In fact, were this before the Circuit, the case would be reassigned to a new sentencing judge (which is what it does in every case where it finds that the government breached the plea agreement).
The case is a stark reminder to defense lawyers that negotiating a favorable plea agreement is only one aspect of the plea-bargaining process. Defense counsel would be well advised to try to obtain advance assurances about the scope of the information the government will provide to the sentencing court regarding the defendant’s conduct, whether directly or by using the Probation Department as a surrogate. In particular, in some cases it may be appropriate to preview one’s sentencing arguments with the prosecutor, and determine in advance which arguments will trigger the revelation of additional damaging information to the court.
The scenario presented in United States v. Brumer, 07-0715-cr (2d Cir. June 10, 2008) is like a question on the bar exam: Two fraudsters enter into plea agreement with government, drafted by government, which estimates loss amount of crime at between $10 and $20 million. All parties agree not to challenge estimate, or seek any other adjustments “not set forth herein.” Turns out loss figure has been grossly overestimated. Government offers to amend loss estimate to range of $5 million to $10 million. Defendants say no dice. Court holds hearing, and determines “a significantly lower loss amount” and therefore significantly lower sentencing ranges. Government claims breach, and argues for upward adjustments. Defendants then claim breach and demand guilty pleas be withdrawn. Court ignores them all, and imposes sentences within lower sentencing range. Who, if anyone, has breached? What is the appropriate remedy?
Answer
On the bar exam, I would answer that there appeared to have been a mistake of fact – either a mutual one if the government’s overestimate of loss was a good faith mistake, or a unilateral one on the part of the defendants who had been misled by the government as to the true loss figure. In either case, the remedy should be total rescission of the contract, or reformation of the contract to reflect the parties’ true intent, which was surely to include an accurate estimate of loss. If reformation is elected, the contract otherwise remains intact, and the government is bound by its agreement not to seek any additional adjustments. By seeking those adjustments after the district court had reformed the contract, the government breached. Defendants should get their guilty pleas back.
Wrong!
In fact, in its opinion, the Court makes no mention of the mistake-of-fact doctrine. Meticulously applying several other principles of contract construction, the Court held that the defendants breached by rejecting the government’s “fair” offer to amend the loss estimate, and instead seeking a hearing to determine the correct loss figure. Having lost “the benefit of its bargain” by being forced to prove its loss figure, the government was “excused from its reciprocal obligations” and free to argue for enhancements. The defendants were not entitled to withdraw their guilty pleas.
Comment
This is a very odd decision. It appears (though the recitation of facts is not that helpful) the defendants were punished for demanding that they be sentenced on accurate information once the inaccuracy of the information underlying the plea agreement was exposed. A fundamental principle of contract law is an implied covenant of good faith and fair dealing. Given that the district court determined “a significantly lower loss amount” (the Court doesn’t explain how much lower) and ignored the government’s advocacy at sentencing, there are serious questions presented here as to whether the government complied with that covenant, either in making its original loss estimate, or in making its mid-stream counter-offer, or in seeking additional enhancements contrary to the plea agreement.
This is yet another decision from the Court in less than two weeks (the other is discussed here) in which the Court applies selective principles of contract construction to plea agreements, and fails to recognize several realities of the plea bargaining process – like the superior bargaining power of the government, the fact that the government frequently controls key information, and that accuracy and truth are often casualties as defendants try to avoid guideline enhancements that can yield significant prison sentences.
What a district court giveth in United States v. Allen, 2008 WL 1944549 (S.D.N.Y. April 30, 2008) discussed here, the Second Circuit taketh in United States v. Habbas, 05-6142-cr, 2008 WL 2220676 (2d Cir. May 30, 2008). In a decision underlining the need for defense attorneys to secure clarifying language, either orally or in writing, as to the binding nature of Guidelines estimates in plea agreements, the Court held in Habbas that the government did not breach a plea agreement by supporting a higher Guidelines level than it had estimated in a plea agreement, even though the facts justifying the increased level were known to the government at the time of the original estimate.
Facts
Habbas’ co-defendant had pled to obstruction of justice arising out of his involvement in an elaborate conspiracy to frame an individual for assault. The government estimated his Guidelines level in the plea agreement at 16, yielding a sentencing range of 27 to 33 months. The Probation Department, however, added a 4-level leadership role enhancement to this estimate, producing a Guidelines level of 20 and a sentencing range of 41 to 51 months (i.e. approximately 50% higher than the government’s estimated range). At sentencing, the government supported the 4-level increase, saying that its failure to include it in the plea agreement was a “mistake.” The court ignored both the government’s and Probation Department’s estimate, imposing a sentence of 96 months, in light of the cruelty and cynicism of the crime (the victim had spent 7 weeks in custody before the plot unraveled).
Holding
Rejecting the defendant’s argument that the government’s support of the higher Guidelines level was a breach of the plea agreement, the Court gave three reasons:
(a) No Binding Language in Plea Agreement
First, the Court held that the plea agreement at issue clearly put the defendant on notice that the estimate in the plea agreement was not binding, and the government was “likely to advocate for a higher sentence.” For example, the plea agreement stated that its “estimate . . . is not binding on the [United States Attorney’s] Office” and that “the government reserves the right to argue for a sentence beyond that called for by the Guidelines based on the factors set forth in 18 U.S.C. § 3553(a).”
It should be noted that plea agreements from the E.D.N.Y., where Habbas originated, routinely contain the phrase about the non-binding nature of the estimate, but this phrase is commonly understood as a reservation of the government’s right to argue a different estimate based on new facts, or some exotic guideline no-one had anticipated. It has never been viewed as carte blanche to permit routine adjustments on meat and potatoes issues like the defendant’s role in the offense. Moreover, reserving a right to argue for a higher sentence under § 3553(a) factors is not the same as reserving a right to alter the Guidelines calculation.
At least recognizing that their analysis of the plea agreement language here has wider implications, the Court notes that “in certain circumstances government deviation from its prior estimate could conceivably produce serious unfairness.” But surely a sentencing range that is 50% higher than originally estimated is serious unfairness? And what about the “serious unfairness” to the defendant who presumably pled guilty in reliance on the estimate in the plea agreement? There is no mention in the decision as to whether the defendant was offered the right to withdraw his guilty plea.
In response to that argument, the Court claims that this is not a case of the government “revers[ing] its position regarding the applicability or effect of a particular provision, upsetting a reasonable reliance by the defendant on the government’s stated position.” But surely back-tracking on the absence of a role adjustment is precisely a reversal of position. The Guidelines, as the Court notes in Habbas, may be “complex,” but role adjustments are Federal Sentencing 101.
(b) No Bad Faith
As a fallback position, the Court points out that there was no suggestion that the government had acted in bad faith. The government, under “the pressures to prepare a Pimentel estimate” to “accommodate” the defendant simply “failed to notice the possible applicability” of the aggravating role enhancement.
Putting aside the Court’s confusing reference to United States v. Pimentel, 932 F.2d 1029, 1034 (2d Cir. 1991) (which as the Second Circuit Blog notes in commenting on Habbas generally refers to a non-binding informational letter from the government containing a guidelines estimate that is not a plea agreement at all), the Court’s statements here fail to recognize many realities of plea bargaining. The estimates in plea agreements are not simply hastily included as “accommodations” to defendants. They are the meat of the plea agreement, often hammered out over days and weeks of negotiations with defense counsel. And they also go through at least one if not several layers of oversight at the U.S. Attorney’s office. Far from being hasty “favors” to the defendant, they are the negotiated basis of his/her decision to plead guilty under a plea agreement.
As the district court pointed out in Allen, where the government back-tracked from its Pimentel estimate, misleading a defendant of their potential liability under the Sentencing Guidelines, whether in bad faith or not, “damages the integrity of our justice system.” Unlike the non-binding Pimentel letter at issue in Allen, the plea agreement at issue in Habbas is a contract, to which one applies principles of contract construction. This is the first time I’ve heard of the theory that a contract may be repudiated by one party based on a unilateral, good faith “mistake,” that was not fraudulently induced by the other contracting party.
(c) No Harm to Defendant
Finally, the defendant was not harmed by the government’s changed position, because the district court essentially ignored the government’s and Probation Department’s calculation in imposing a sentence of eight years. In other words, the dispute over the plea agreement in this case was academic. So, why, oh why, did the Court need to weigh in with an unnecessary and confusing analysis of that issue?
Conclusion
The Court suggests in a footnote that in plea agreements going forward, the government reserve the right to change the Guidelines estimate with new facts and to make “good-faith changes” based on existing facts if “further study shows the applicability of guideline provisions not considered in making the estimate.” This suggestion risks making plea agreements next to worthless. What use is a today-only, cursory, hasty and completely reversible Guidelines estimate to a defendant making the profound decision to plead guilty and subject him/herself to a prison sentence?
A more productive approach might have been to permit changes to the estimate based on new facts or an unanticipated application of some arcane, little-used provision of the Guidelines that the parties had not addressed. In addition, should the estimate change on that basis, a defendant should be permitted to withdraw his/her plea.
At the very least, Habbas underlines the need for defense lawyers to document their negotiations on the actual plea estimate, and seek clarifying language - either written in the plea agreement or orally on the record at the guilty plea - that the government considers itself bound by the estimate – especially meat and potatoes issues like loss, weight, relevant conduct and role.
It is not uncommon for a defendant in a white collar criminal case to be the subject of parallel civil government enforcement proceedings. While the latter can yield useful discovery for the criminal case, that opportunity cuts both ways, as illustrated in United States v. Leonard, 02 cr 881 (LDW), 2008 WL 1943548 (E.D.N.Y. May 1, 2008).
At Leonard's trial on securities fraud charges, the government introduced his deposition testimony, among other evidence, gleaned from a parallel SEC action. Following his conviction, the court held a hearing on Leonard's motion to dismiss the indictment and/or suppress the SEC evidence on the grounds that the U.S. Attorney's office "improperly colluded with the SEC by manipulating the SEC civil investigation discovery procedures to obtain evidence against Leonard for use in the criminal proceedings without advising him that he was a target of the criminal investigation."
Denying the motion in a short decision, the court concluded that this was not "a single, unitary investigation," but in fact two investigations, proceeding in parallel. "Although there may have been some coordination of efforts by the SEC and the Department of Justice to avoid duplication of efforts in pursuing the parallel investigations, the record does not reveal that the FBI or the USAO improperly or secretly manipulated or controlled the SEC's investigation, including Leonard's SEC deposition." This was therefore not a case like United States v. Scrushy, 366 F.Supp.2d 1134 (N.D.Ala. 2005), the Leonard court concluded, where the court dismissed the indictment because the USAO used and directed the SEC investigation to gather evidence and manipulate venue, and engaged in deceit to conceal the involvement of federal prosecutors.
It is unfortunate that there is such a paucity of facts presented in this important decision. For example, the decision fails to explain the level of "coordination" between the two investigating bodies, and does not address whether there was any deception in either body's dealings with the defendant. Coordination to avoid duplication sounds troublingly close to using one investigation to collect evidence for the other.
But the case is a stark reminder that with any regulatory investigation, especially an SEC one, a criminal one may be around the corner, and defendants should consider acting accordingly. Defensive measures include asserting the Fifth Amendment right against self incrimination, despite the adverse inference that may be drawn from that in a civil context, or seeking a protective order precluding the disclosure of civil discovery to criminal investigators and the grand jury. See Minpeco S.A. v. Conticommodity Services, Inc., 832 F.2d 739 (2d Cir. 1987) (protective order appropriate unless government makes strong showing to the contrary).
Pimentel letters are key documents when a defendant pleads to an indictment without any plea agreement. Written by the prosecutor, it lays out the government's calculation of a defendant's likely sentence under the Sentencing Guidelines. Although not a binding contract, it is often relied upon by defendants in entering guilty pleas. Its goal, as articulated in the Second Circuit's Pimentel decision, is "to ensure that guilty pleas indeed represent intelligent choices by defendants." As such, as Judge Scheindlin observed in United States v. Allen, 07 Cr. 235 (SAS), 2008 WL 1944549 (S.D.N.Y. April 30, 2008), a misleading Pimentel letter "damages the integrity of our justice system."
In Allen, the defendants pled without a plea agreement to crack distribution. Their Pimentel letters, "based on information presently known to [the government]," estimated their offense conduct, "including all relevant conduct," as involving between 150 and 500 grams of crack, yielding a base offense level of 32. Subsequently, the defendants' presentence reports, using information supplied by the government, calculated the base offense level at 38, and determined sentencing ranges that were approximately twice the ranges contained in the Pimentel letters. The defendants asked that the government be bound by its statements in the Pimentel letters and precluded from proving the higher offense level.
In a blistering decision, the district court found that the government had "struck hard" at the defendants by misleading them: "Prior to the issuance of the Pimentel Letters, the Government almost certainly knew all of the relevant facts, yet the letters (allegedly based on the Government's knowledge) did not square with the Government's determination of relevant conduct." The defendants had therefore been "fundamentally mistreated," and the government had "fallen substantially short of the 'meticulous standards of both promise and performance' to which it must conform."
She rejected, however, the defense request that the government be estopped from proving the higher offense level, pointing out that "[t]he Pimentel Letters did not form a contract between defendants and the Government." Instead, she opined that the appropriate remedy here for what she termed "a violation of our notions of fundamental fairness" may be a downward departure or below-Guidelines sentence. She put the parties on notice of her intention to consider such a departure, and also gave the defendants an opportunity to withdraw their guilty pleas. Sentencing, absent plea withdrawal, will occur in June.
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