2/27/17: Amended mortgage fraud opinion

In June 2016, the 9th Circuit released its opinion in United States v. Lindsey, --- F.3d --- (9th Cir.).  My prior summary is at the bottom of this post.  

Today, the Court released an amended version of the opinion (here).  

Although the new version does not help the defendant, it has better language for future cases.  Here is the relevant part:

We hold that a victim’s intentional disregard of relevant information is not a defense to wire fraud and thus evidence of such disregard is not admissible as a defense to mortgage fraud. To the extent that Lindsey tried to introduce evidence of lenders’ intentional disregard and the district court prevented him, the district court did not err. 

Our holdings do not leave defendants powerless to challenge the materiality of false statements made in connection with securing mortgages. Among other things, defendants can disprove materiality through evidence of the lending standards generally applied in the mortgage industry. For example, defendants can offer testimony about the types of information, such as household income or assets, that lenders typically consider, as well as evidence of how much weight the industry generally gives to statements about such information. As long as defendants do not stray into evidence of the behavior of individual lenders—for instance, evidence of specific prior bad loans or particular mistakes by underwriters—defendants may attack materiality though industry practice. 

To illustrate, suppose a defendant is charged with wire fraud for falsely stating on a loan application that he was married. In such a case, it would be admissible for a defense expert to testify that, while mortgage applications usually ask about marital status, the general practice in the industry is to ignore marital status when making lending decisions. The defendant could then argue in closing that his false statement about marriage was immaterial, and so the elements of wire fraud have not been proven. By contrast, a district court could properly exclude evidence that (a) the particular lender to whom the defendant lied did not generally give weight to marital status when deciding whether to lend, or (b) there were prior instances in which that lender did not consider marital status in making loans.

In short: (1) negligence is not a defense to wire fraud, and evidence of lender negligence is not admissible as a defense to mortgage fraud; (2) intentional disregard of relevant information is not a defense to wire fraud, and evidence of intentional disregard by lenders is not admissible as a defense to mortgage fraud; (3) evidence of individual lender behavior is not admissible to disprove materiality, but evidence of general lending standards in the mortgage industry is admissible to disprove materiality; 

_______

In United States v. Lindsey, --- F.3d ---, Case No. 14-10004 (9th Cir. 2016), the Court held, "lender negligence in verifying loan application information, or even intentional disregard of the information, is not a defense to fraud, and so evidence of such negligence or intentional disregard is inadmissible as a defense against charges of mortgage fraud."

It further held that, "when a lender requests specific information in its loan applications, that information is objectively material as a matter of law, regardless of the lenders’ policies or practices with respect to use of that information." 

Based on these holdings, the Court affirmed the defendant's wire fraud convictions, over his claim that the district court denied him the constitutional right to present a defense by excluding evidence of lender negligence.  

2/22/17: "Some toxins can be deadly in small doses"

The Supreme Court's decision in Buck v. Davis, --- U.S. ---, Case No. 15-8049 (2017), is definitely worth a read. 

This is was capital habeas out of Texas.  During the penalty phase, the defendant's attorney introduced expert testimony that the defendant's race made him statistically more likely to pose a danger in the future.  The jury sentenced him death. 

As the Supreme Court explained, the "case then entered a labyrinth of state and federal collateral review, where it has wandered for the better part of two decades."  The district court and Ffith Circuit denied the habeas claim on essentially a hybrid of procedural and merits-based grounds.  The Supreme Court took the case and, in an opinion by Chief Judge Roberts, reversed.  

The Court found that Mr. Buck satisfied both prongs of the Strickland ineffective assistance of counsel test.  It also ruled on some procedural issues, with good language on when to grant a COA.  

I won't go into too much detail, but there is a great passage worth sharing (thanks to Chuck Sevilla for first reading it to me): 

[W]hen a jury hears expert testimony that expressly makes a defendant’s race directly pertinent on the question of life or death, the impact of that evidence cannot be measured simply by how much air time it received at trial or how many pages it occupies in the record. Some toxins can be deadly in small doses. 

2/7/17: Two decisions - neither good for defendants

Two tough decisions today. 

First, in United States v. Peralta-Sanchez, --- F.3d ---, Case No. 14-50393 (9th Cir. 2017), the majority held that aliens subject expedited removal proceedings under 8 U.S.C. § 1225 have no Fifth Amendment due process right to hire counsel.  This is true, even if the person is not caught at the border, but inside the country where due process protections are greater.  The Court also held there is no statutory right to counsel in such proceedings.  

Thus, as the dissent noted, "[t]he expedited removal process begins and ends with a Customs and Border Protection (CBP) officer."

Based on this holding, the majority rejected the defendant's 1326(d) claim that his removal was fundamentally unfair because he was denied the right to hire counsel.  It also rejected his claim based on the failure to advise him of the right to seek withdrawal of his application for admission, because he could not show prejudice.  

Finally, I think it is worth sharing the dissent's final paragraph: 

The expedited removal system is flawed; it does not account for the realities of immigration and the strong ties to this country held by many noncitizens. The system is also cruel; it gambles with the lives of hundreds of thousands of people per year by offering few procedural safeguards. We can, and should, do better. I would hold that there is a due process right to counsel in expedited removal proceedings.

Second, in United States v. Loucious, --- F.3d ---, Case No. 16-10121 (9th Cir. 2017), the Court reversed the district court's grant of the defendant's suppression motion.  It held: "The Miranda warnings given to [the defendant] adequately conveyed that he had the right to consult with an attorney before questioning even though they did not explicitly inform him of that right. This right was reasonably to be inferred."

As to the facts, before the start of a custodial interrogation, the defendant received warnings informing him he had the right to remain silent; he had the right to the presence of an attorney during questioning; and that if he could not afford an attorney, an attorney would be appointed before questioning.  The defendant successfully moved to suppress the statements he made during the custodial interrogation, arguing that the Miranda warnings he received were constitutionally deficient because they did not tell him of his right to consult with an attorney before questioning.

As noted, the Ninth Circuit reversed because "Miranda warnings need not follow a precise formulation, and here the warnings reasonably conveyed that [the defendant] had the right to consult an attorney before questioning."

1/31/17: Case on the Corpus Delicti Doctrine

Today, in United States v. Niebla-Torres, --- F.3d ---, Case No. 15-10261 (9th Cir. 2017), the Ninth Circuit affirmed the defendant's conviction for conspiracy to possess with intent to distribute marijuana.

Agents arrested the defendant on a remote mountain in Arizona.  He confessed to being a scout, helping others smuggle what he believed was marijuana.  However, no marijuana was found at the location.  Nor did agents find anyone actually smuggling marijuana.  The conviction, therefore, was based mostly on the defendant's video-taped confession.  

The defendant argued the government failed introduce sufficient evidence to corroborate his confession under the corpus delicti doctrine. The corpus delicti doctrine requires that a conviction must rest on more than a defendant’s uncorroborated confession. 

The Ninth Circuit has a two-part test to evaluate whether the government has met its burden under the corpus delicti doctrine.  First, the government “must introduce sufficient evidence to establish that the criminal conduct at the core of the offense has occurred. Second, it must introduce independent evidence tending to establish the trustworthiness of the admissions, unless the confession is, by virtue of special circumstances, inherently reliable.” 

On the facts here -- e.g., the location of his arrest and his demeanor during the confession -- both the district court and Ninth Circuit found the government met its burden under both prongs of the test.  

If you have a case where the only real evidence is your client's confession, this opinion is must read. 

1/30/17: The Ninth Circuit affirms the government's stretch.

Today, in United States v. Laursen, --- F.3d ---, Case No. 14-30244 (9th Cir. 2017), the Court proves the old adage that bad facts make bad law. 

The opening line of the opinion is: "In this appeal we address whether taking consensual nude “selfies” involving a forty-five-year-old man and a sixteen year-old girl is sufficient to support a conviction for production and possession of child pornography."

Here is how the concurrence sums up the case:

Michael Laursen stands convicted of the “use” of a minor to engage in sexually explicit conduct for the purpose of producing visual depictions of that conduct and is currently serving the fifteen-year mandatory minimum sentence the statute requires. The photos in question were taken in the course of an ill-advised, but perfectly legal, relationship Laursen had with a young woman above the age of consent under Washington law. The record shows no evidence that Laursen distributed, transferred or otherwise displayed the images to anyone outside that relationship. In this respect, his situation is no different than the thousands of similar photos taken everyday by seventeen-year-old college students engaged in intimate, consensual relationships. The government admits the theory of prosecution here could be used to prosecute anyone snapping a photo showing consenting individuals engaged in intimacy.

In the course of affirming the conviction, the Court rejects all the defendant's arguments.  If you have a production case, this opinion is a must read.

1/27/17 - Solicitation of drugs does not qualify as a federal controlled substance offense

Today, in Sandoval v. Yates, --- F.3d ---, Case No. 13-71784 (9th Cir. 2017), the Ninth Circuit held that the petitioner's conviction for delivery of a controlled substance under Oregon Revised Statutes § 475.992(1)(a) was not an aggravated felony because definition of “delivery” includes mere solicitation, and the federal Controlled Substances Act does not punish soliciting delivery of controlled substances.

Although this is an immigration case, it is equally helpful in the criminal context. 

There is a very clear discussion of both the categorical and modified categorical approaches.  

Additionally, the holding that the CSA does not punish mere solicitation is useful for challenging sentencing predicates. 

According to the Court, "[w]hile strongly corroborative of intent to commit a crime, [solicitation] does not cross the line between preparation and attempt."

This is a good reminder that, when your client's predicate is a state law offense, check to see whether the state's law is interpreted more broadly than its federal counterpart. 

1/19/17 - Case about double counting under the Guidelines

Today, in United States v. Joey, --- F.3d ---, Case No. 15-10096 (9th Cir. 2017), the Ninth Circuit rejected the defendant's double counting argument in the context of his convictions for abusive sexual contact under 18 U.S.C. § 2244(a)(5) and committing a felony offense involving a minor while required to register as a sex offender under 18 U.S.C. § 2260A.

The defendant's claim was that, because the Guidelines prohibit applying specific offense enhancements "based on the same conduct as the conduct comprising the conviction under . . .  § 2260A," the district court erred in applying such enhancements to his convictions under 2244(a)(5).

The Ninth Circuit held:  "Because the Guidelines do not contain any instruction that precludes a district court from applying § 4B1.5 in calculating the Guidelines sentencing range for a § 2244(a)(5) conviction where a defendant has also been convicted under § 2260A, but rather instruct district courts to determine the Guidelines sentencing range for the § 2244(a)(5) count independently of § 2260A, the district court did not procedurally err in calculating the applicable Guidelines sentencing range."

There is significant discussion of the law about double counting under the Guidelines.  If you have a double counting issue, this case is a must read.