Vol. 11, Nos. 43 & 44	Covering Cases Published in the Advance Sheets through Nov. 1, 2004

• In Croce, Judge Dalzell of the E.D.Pa. presented a detailed and informative analysis of the forfeiture laws in America as part of his ruling in which he denied the Government’s motion for the entry of a “forfeiture money judgment” of a forfeiture award. He concluded that Congress had never authorized such “nonspecific and unlimited judgments” and that he would not permit the “specter” of such judgments “to haunt the defendants for the rest of their lives.”

Felon Disenfranchisement

• The Supreme Court has declined to grant certiorari in two conflicting cases involving voting rights for convicted felons, namely Locke v. Farrakhan from the Ninth Circuit and Muntaqim v. Coombe from the Second Circuit - a decision that leaves unanswered some significant questions on an issue that seems to be gathering political strength.

The Prosecutorial Power-Lock Over Section 5K1.1 Motions

• In Zingsheim, the Seventh Circuit diffused a war between federal prosecutors and Judge Stadtmueller of the E.D.Wisc., who had issued a “standing order” that required prosecutors to provide some transparency and accountability about their reasons for granting or withholding § 5K1.1 motions. The Court essentially concluded that Judge Stadtmueller had exceeded his authority because Congress has ceded virtual total authority over substantial-assistance motions to the prosecutors.
  

Use of Immunized Testimony in a Wiretap Application Does Not Warrant Suppression

• In Sasson, Judge Korman of the E.D.N.Y wrote an important and scholarly decision in which he held that the undisputed use of immunized testimony in a wiretap application did not necessarily require suppression of the evidence obtained as a result of the wiretap, since the “fruit of the poisonous tree doctrine” does not absolutely apply to the Fifth Amendment’s self-incrimination privilege; and it did not apply to the facts of this case.

The Bait and Switch Technique of Plea Agreements

• In the Smith case, a divided panel from the Sixth Circuit held that a state prosecutor had not breached the defendant’s plea agreement by requesting a prison sentence of 70-to-100 years, even though she had agreed not to recommend a life sentence. In a strong dissent, Judge Clay argued that the majority “ignores the parties’ reasonable expectations behind the plea agreement in favor of a formalistic interpretation that ignores context and common sense.”

U.S. v. Croce, 334 F.Supp.2d 781 (E.D.Pa. 2004) (Judge Dalzell)

This is an interesting and informative decision in which Judge Dalzell explored in depth the remedies that are available to the Government to collect a criminal forfeiture. The defendants in this case were charged with fraudulently obtaining large sums from Independence Blue Cross, by billing for goods and services that were never provided. Among the specific charges were money laundering of $2,171,043.45 in illicit proceeds in violation of 28 U.S.C. § 1956(a)(1). The indictment contained five notices of forfeiture, each identifying general sums and specific items of real and personal property which the Government intended to seek forfeiture if the defendants were convicted.

One of the defendants pled guilty to the charges; and the other two were convicted after a jury trial. As part of their sentence, Judge Dalzell ordered them to make restitution of $9,200,000 to their victims and to forfeit their interest in the $2,171,043.45 of laundered funds to the Government. At sentencing, the Government requested, and Judge Dalzell ordered, “forfeiture money judgments” against each of the defendants in the amount of $2,171,043.45.

A few months later, the Government sought to modify the forfeiture money judgments in various ways, but principally to allow the Government to proceed against various substitute assets of the defendants. At that point, Judge Dalzell began to question whether he had to right to order such forfeiture money judgments. He explained:

“The three motions raise complicated questions about the extent of our power to order asset forfeiture in criminal cases. As we examined those questions, we began to doubt whether we even had the authority to order the forfeiture money judgments that we had imposed at the Government's request and without opposition. We directed the Government and invited the defendants to submit additional briefing on these issues, and, having fully considered them, we are at last prepared to rule on the Government's three motions. . . .

”As we understand it, when the Government requests that we enter a forfeiture money judgment, it is requesting that we enter a money judgment pursuant to our statutory authority to order forfeiture. This understanding assumes that the Government could collect a forfeiture money judgment from a criminal defendant in the same way that a successful plaintiff could collect a money judgment from a civil defendant. Two important consequences flow from our understanding. First, a forfeiture money judgment is nonspecific because it is entered for a general sum of money, such as $ 1 million, even though other kinds of forfeiture are directed at specific items of property (e.g., the $ 1 million in First National Bank account number 12345 or the 1999 Ford Taurus with VIN # 6789012345).

“Second, a forfeiture money judgment is unlimited because its magnitude bears no relation to the assets that a convict possesses at any particular time. Imagine, for example, a convict who owns only $ 10,000 in assets but faces a forfeiture money judgment of $ 1 million. Even if the Government seized all of the convict's assets, a judgment of $ 990,000 would remain undischarged. . . . It is possible that the Government could continue seizing all of the convict's assets, at any time, until he either satisfies the full $ 1 million judgment or dies (leaving the Government with a sizeable claim on his estate).” (Id., at 783-84).

To determine whether the Government was entitled to use the type of “nonspecific and unlimited” money judgments that it was seeking, Judge Dalzell started with a detailed review of the statutory framework of the Federal forfeiture laws, which includes an outstanding review of the history of criminal forfeiture under the common law and under American law. His review covered both in rem civil forfeiture proceedings and in personam forfeitures following criminal conviction that were first authorized as part of the RICO statutes (18 U.S.C. §§ 1961-68), which were first enacted into law in 1970. Judge Dalzell explained that the RICO statutes were “the first statute[s] authorizing criminal forfeiture through an in personam proceeding.” (Id., at 788).

He also examined at length the provisions of the Federal criminal forfeiture statute, 18 U.S.C. § 982, and the leading cases that have interpreted that statute. As a matter of note, he took strong exception to the First Circuit’s decision in U.S. v. Candelaria-Silva, 166 F.3d 19, 42 (1st Cir. 1999), where that Court broadly stated that “the government is entitled to an in personam judgment against the defendant for the amount of money the defendant obtained as proceeds of the [money laundering] offense.” (Id., at 793, n. 23).

In the end, Judge Dalzell found nothing in the legislative history of the forfeiture statutes that authorized the courts to enter “nonspecific and unlimited forfeiture money judgments.” He also noted that Congress had specifically set strict limits on the amount of a fine that a court could impose as part of a money launderer’s sentence. (For example, 18 U.S.C. § 1956(a)(1) authorizes a court to impose “a fine of not more than $500,000 or twice the value of the property involved in the transaction, whichever is greater.”)

He then observed:

“Forfeiture money judgments of the type that the Government would have us enter here are functionally equivalent to fines. . . . Put another way, the Government's construction of § 982 would permit an end-run around § 1956(a)(1)'s limitation on fines. Congress authorized both forfeitures and fines, and we cannot accept an interpretation of the term "forfeit" that would obliterate any distinction between them.” (Id., at 794).

Based on his detailed analysis of the laws at issue in this case, and even though he had previously authorized the entry of preliminary forfeiture money judgments in this case, Judge Dalzell forcefully concluded that “§982 does not authorize us to enter forfeiture money judgments.” (Id.) While he acknowledged that the Government had the right to collect $2,171,043.45 from each of the defendants, and while he stated that he was willing to order forfeiture of specific items of each of the defendants’ property up to that amount, he emphasized that he would not “permit the specter of a nonspecific and unlimited forfeiture money judgment to haunt the defendants for the rest of their lives.” (Id., at 795) (Emphasis added).

U.S. v. Zingsheim, 384 F.3d 867 (7th Cir. 2004) (Judge Easterbrook)

As the Federal bar awaits the Supreme Court’s Blakely rulings in U.S. v. Booker and U.S. v. Fanfan, a number of judges have also begun to revisit some of the other aspects of the Guidelines that irk them. High on that list is U.S.S.G. § 5K1.1 - the provision that allows the prosecutors to determine if and when a defendant is entitled to a sentence reduction based on substantial assistance he or she has rendered to the Government in prosecuting others.

In that vein, we recently noted the case entitled U.S. v. Moeller, 383 F.3d 710 (8th Cir. 2004) (P&J, 10/11/04), where Judge Bennett of the N.D.Iowa railed against the misuse of § 5K1.1 by the prosecutors as a means for bypassing the district court’s sentencing discretion. The Eighth Circuit’s rather brusque reply to Judge Bennett was, effectively, “Shut up! That’s the way the law is - and even if the prosecutor acts in bad faith that’s not a valid basis to grant any relief.”

This past week, Staff Reporter Laurie Cohen of the Wall Street Journal, reported on a number of recent cases that have addressed various abuses that have evolved from § 5K1.1. Her article, entitled “Federal Cases Show Big Gap in Reward For Cooperation,” Wall Street Journal, November 29, 2004, noted that “the procedure for deciding who gets these valuable [§5K1.1] letters is often haphazard and tilted toward higher-ranking veteran criminals who can tell prosecutors what they want to know.”

One of the cases that Ms. Cohen noted was the instant case, where District Judge Stadtmueller of the E.D.Wisc. got so fed up with the games played by prosecutors that he issued a standing order directing any prosecutor who filed a § 5K1.1 motion in his court to produce details of the defendant’s cooperation and explain how the decision to file the motion was made.

Incensed at Judge Stadtmueller’s insolence and his planned encroachment on the prosecutor’s exclusive and sacrosanct turf, the Government took its gloves off and want to war. It announced that it would not provide the information requested by Judge Stadtmueller about its deliberative process; and it filed a petition for a writ of mandamus requesting the Seventh Circuit to expunge Judge Stadtmueller’s standing order.

Fifteen days after the case was argued, the Seventh Circuit struck down Judge Stadtmueller’s standing order. It cited several reasons for its ruling, including the fact that multiple privileges applied to much of the information that Judge Stadtmueller had requested, including the attorney-client privilege, the work-product privilege, the deliberative-process privilege, and the executive privilege. (Id., at 871-72).

It also concluded that “[l]aw enforcement agencies may be less likely to cooperate with U.S. Attorneys if they know that everything they say will be spread on the public record (or can be so exposed at the discretion of a judge)” (id., at 872) (emphasis in original); and it emphasized that § 5K1.1 “gives the power to make substantial-assistance motions to ‘the government’ as an entity . . . [and] just as judges may not routinely review decisions to withhold § 5K1.1 motions, . . . so they may not give a blocking power to subordinate state or federal officials.” (Id., at 873).

The Court did offer one minor sop to Judge Stadtmueller; it stated:

“A district judge may require the prosecutor to show how the defendant provided ‘substantial assistance in the investigation or prosecution of another person who has committed an offense’ (to quote from § 5K1.1). Otherwise the judge could not decide whether to depart and, if so, by how much. But except with extraordinary justification a judge may not inquire why or how the United States Attorney decided to file a § 5K1.1 motion and may not insist that ‘all’ statements of any provenance be revealed, even if not material to the § 5K1.1 decision.” (Id., at 872).

Smith v. Stegall, 385 F.3d 993 (6th Cir. 2004) (Judge Gilman)

In exchange for the petitioner’s agreement to plead guilty to second degree murder, the prosecutor promised not to recommend a sentence of life imprisonment. Once the petitioner signed on the dotted line, the prosecutor almost immediately began to prevaricate: at sentencing, she requested that the petitioner be imprisoned for a term of 70 to 100 years. The petitioner was then sentenced to a term of 35 to 55 years in prison. On appeal, the petitioner argued that the prosecutor had breached his plea agreement and violated his right to due process by effectively recommending a life sentence. Somehow, the majority concluded that the prosecutor had not breached the plea agreement on the grounds that “one reasonable (sic!) interpretation of the plea agreement is that it left the prosecutor free to recommend a statutorily permissible sentence of ‘any term of years.’ which would include a term of 70 to 100 years.” (Id., at 999) (emphasis added).

Judge Clay, who dissented, called that explanation pure hokum; and he rejected as dishonest such semantical nonsense. He stated:

“[T]he majority ignores the parties’ reasonable expectations behind the plea agreement in favor of a formalistic interpretation that ignores context and common sense. True, as a purely literal matter, the State complied with the agreement ‘not [to] recommend life imprisonment as the sentence’ because the prosecutor did not use the word ‘life’ in her sentencing recommendation. This literal compliance with the agreement, however, did not translate into substantive compliance. Smith relinquished his constitutional rights attendant to a trial by jury in reliance on the promise that the State would not recommend that he spend the rest of his natural life behind bars. . . . [T]he State did not honor this promise, denying Smith the benefit of his bargain.” (Id., at 1002).

In Brief

The BOP and “Good Time” Credits: White v. Scibana, No. 04-2410 (7th Cir. 12/02/04) - In White v. Scibana, 321 F.Supp.2d 1037 (W.D.Wisc. 2004) (P&J, 04/05/04), Judge Crabb ruled that, based on the plain language of 18 U.S.C. § 3624(b) and its legislative history, the Bureau of Prisons (BOP) has been miscalculating the “good time” credits it grants to Federal prisoners by short-changing them seven days each year. Section 3624(b) provides that Federal inmates are entitled to receive 54 days of good time credits “at the end of each year of the prisoner’s term of imprisonment” - but there has long been a dispute as to the meaning of the phrase “term of imprisonment.”

Judge Crabb applied the well-established general rule of statutory construction that identical words used in different parts of the same statute are presumed to have the same meaning; and on that basis she concluded that “term of imprisonment” meant the sentence imposed by the court and not the time actually served (as the BOP contended). That technical distinction resulted in a difference of seven days a year in the calculation of good time credits for all Federal prisoners. While seven days a year may not seem significant to the casual observer, in the case of Yancey White, the petitioner in the case, the seven days a year meant the difference between a release date of December 23, 2004 or March 3, 2005. Judge Crabb sided with White and ordered the BOP to release White on December 23, 2004.

The Government appealed; and the Seventh Circuit has now reversed. In a brief opinion written by Judge Diane Sykes, a recent appointee of President Bush, the Court explained its rationale with these words:

“This case presents the unusual situation of an apparent conflict in meaning of the same phrase within a single statute, indeed within a single statutory subsection, which might otherwise strengthen the presumption in favor of harmonization. But it is impossible to make sense of 28 U.S.C. § 3624 while giving the phrase ‘term of imprisonment’ one meaning throughout. ‘Term of imprisonment’ can only mean ‘sentence imposed’ when used in subsection (a) and in the eligibility language of subsection (b); attributing the same meaning to the phrase when it is used in subsection (b) to describe how good-time credit is awarded is inconsistent with the retrospective year-end evaluation and award system the statute contemplates. We must conclude that 18 U.S.C. § 3624 is ambiguous in that it does not clearly indicate whether the fifty-four days' credit for good conduct for each year of the prisoner's ‘term of imprisonment’ is based on the sentence imposed or the time served in prison. We defer to the Bureau's reasonable interpretation of the statute, which awards the credit for each year served in prison rather than each year of the sentence imposed.”

All we can say is “Res ipsa loquitur!”

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