A Guide to White Collar Crime
Racketeering. Fraud. Tax evasion. Legal analyst Danny Cevallos explains the terms you keep hearing when white collar criminals are arrested.
Racketeering. Fraud. Tax evasion. Legal analyst Danny Cevallos explains the terms you keep hearing when white collar criminals are arrested.
My latest column on CNN Opinion: http://www.cnn.com/2015/06/10/opinions/cevallos-white-house-fence-jumper/index.html
(CNN)Prosecutors have asked a federal judge to sentence Omar Gonzalez, who scaled a White House fence in September, to almost two years in prison.
The reaction from the public and lawyers alike was similar — it feels like a light sentence.
But federal court is generally not the place where you hear about a “slap on the wrist” type of sentence. Quite the opposite — stories about federal sentences resemble mournful dirges about banishment and oblivion.
For example, there’s a formerly convicted felon who got 15 years for possessing shotgun shells. There’s a man with no history of drug dealing who received a 25-year mandatory minimum for selling his prescription pain pills to an undercover informant.
Unlike state and local courts, federal court is the Thunderdome.
The U.S. Sentencing Commission is an independent agency in the judicial branch of government. It establishes sentencing guidelines for federal courts directing the appropriate form and severity of punishment for federal offenders. Sentencing judges, while not bound to apply the guidelines, are required to calculate and consider them when sentencing.
So how does sentencing actually work? In both state and federal courts, the algorithm of sentencing is at its core a function of: one, the gravity of the offense you were just convicted of, and two, your prior criminal record. After that, a broad spectrum of aggravating and mitigating factors can be presented to the court.
While sentencing in federal court is designed to be formulaic, to jaded defense attorneys that formula usually feels like — start at 120 months. Then, add 240 months. Then, tell client to kiss his family goodbye.
Defense attorneys have long criticized the federal sentencing guidelines as draconian. There’s a reason why so many cases in federal court result in plea agreements — the risk of being convicted at trial and sentenced to the equivalent of a one-way trip to Mars is just too much for most defendants to stomach. The choice to plead guilty or go to trial is often really a Hobson’s choice, i.e., no choice at all.
That’s why everyone — civilians and attorneys alike — probably thought the government’s sentence of Omar Gonzalez seemed light. But if you calculate the prescribed guidelines, the prosecution’s recommendation is actually on the high end.
In a world dominated by oppressive mandatory minimum sentences, it turns out that rushing to the White House with a weapon and laying your hands on federal officials trying to stop you from rushing the White House … is not as serious as other federal crimes.
At least according to the Sentencing Commission and Congress. Now Gonzalez was aided by the fact that he pleaded guilty and accepted responsibility, which can get you a decent reduction at sentencing. But otherwise, the sentencing range for this Army veteran is only 15 to 21 months of imprisonment, and that’s even with Gonzalez’s prior criminal record.
If you think the fence jumper’s sentence is light, don’t blame the U.S. attorneys. They asked for a sentence at the top of the guidelines, which means they asked for the most time within the prescribed range of months.
You could blame Congress for the light sentence and guidelines, but there were certainly enough federal statutes available in this case. The government dropped several of them in exchange for Gonzalez’s plea agreement.
When a federal judge hands out a double-life sentence for mailing 5.2 grams of LSD to a buddy, we don’t bat an eye. In federal court, we’re surprised when a sentence doesn’t eat up at least half of one’s natural life.
Full disclosure: I’m one of those criminal defense attorneys who has had his heart broken by federal sentences handed out to his clients. It makes practicing in federal court a harrowing, sometimes soul-crushing endeavor. Federal court is not for the faint of heart.
Maybe Gonzalez’s sentence was appropriate. Maybe it just feels light because we’re used to all the other seemingly interminable federal sentences. Then again, if Gonzalez’s sentence fails to deter the next White House fence jumper, perhaps it was indeed not harsh enough.
ST. THOMAS — Almost a year to the day after prosecutors charged Louis “Lolo” Willis, the former executive director of the V.I. Legislature, with multiple counts of bribery and extortion, a federal judge will decide today whether the prominent former official is headed to prison. Depending upon how presiding Judge Curtis V. Gomez chooses to interpret the sentencing guidelines, Willis could face at least a decade behind bars.
The hearing marks the culmination of a trial that pulled back the curtain on a network of pay-offs and under the table accounting, which Willis orchestrated by leveraging his influence near the top of the power structure in the Legislature.
According to the testimony of several witnesses, many of whom were participants in the bribes themselves, Willis solicited renovation work for the Legislature building in return for compensation – ranging from a $3,000 envelope of cash to a complimentary air conditioner – from the contractors on the projects.
In a pair of dueling motions to the court related to the sentencing, Willis’ lawyer and the Justice Department prosecutors drew starkly different portraits of a man who now stands convicted of four of the six counts with which he was was initially charged.
Defense attorney Daniel Cevallos, arguing on behalf of his client, made the case that Willis’ career in public service and his strong ties to his family are grounds for a lenient sentence of probation and community service. Cevallos also wrote that as the head of the Bureau of Internal Revenue, Willis ran the tax agency efficiently and helped plan the territory’s budget.
In Willis’ case, Cevallos argued, he already is sure to pay a steep price.
“Mr. Willis and his famliy have already suffered tremendously, and will continue to suffer the consequences of his investigation, trial, and conviction, even without any jail time.” Cevallos wrote. “His once promising political career is dead, and he has lost his post-government position at the Legislature.”
However, in a memo drafted in response to the defense, prosecutor Justin Weitz argued for an unforgiving interpretation of the sentencing guidelines and was unsparing in his appraisal of Willis.
“What the defendant classifies as a career of public service was instead one defined by graft,” the prosecution motion reads. “The defendant’s crimes – accepting bribes from multiple contractors during the Legislature renovation – were in no way aberrant; they reflected the essence of the defendant’s career in public service: bribery, extortion, and corrupt self-enrichment.”
Willis was charged in May 2014 for the crimes.
During his trial, three former contractors who did work at the Legislature – Wilson Johnmarie, Frank James, and Alwyn Williams Sr. – took the stand.
Williams was convicted of bribes and extortion related to his dealings with James and Williams, but the jury did not find sufficient evidence to convict him for transactions he conducted with Johnmarie.
During testimony, James said he wrote a $10,000 check that paid for the repaving of Willis’s driveway. He also admitted to installing an air conditioner, valued at approximately $1,100 free of charge, in Willis’s house after he had secured a $2,100 monthly contract maintaining the air conditioning in the Legislature building.
Also at trial, Alvin Williams Sr. said that he gave Willis a $3,000 envelope of cash before Willis hired him to remove overgrown tree roots near the Legislature building at a cost of $18,000.
The soil excavated from the project created an artificial beach at the site, dubbed “Lolo’s Beach,” which then had to be removed, at a cost of $5,950, after the Department of Planning and Natural Resources declared the beach illegal.
Willis also is awaiting trial in a separate case, in which prosecutors say he helped businessman Gerard Castor dodge at least $120,000 in tax liabilities.
In March, Castor was sentenced to one year in prison, a $10,000 fine and 200 community service hours for tax evasion.
Originally posted at http://virginislandsdailynews.com/news/judge-weighs-two-conflicting-narratives-in-sentencing-of-louis-lolo-willis-today-1.1881268
CNN’s Ashleigh Banfield discusses the delay in the Tamir Rice investigation with Paul Callan and Danny Cevallos
CNN Erin Burnett Aaron Hernandez Verdict with Legal Analysts Paul Callan & Danny Cevallos
(CNN) — The United States Department of Justice has named a new defendant in the war on drugs, and the charges are serious indeed.
A 15-count indictment filed in federal court in California bristles with accusations of conspiracies, transporting prescription pharmaceuticals dispensed with illegal prescriptions, violations of the Controlled Substances Act, misbranding charges, and money laundering charges.
Who is this menace to society?
Yes, the courier delivery service.
Wait, can companies even be charged with crimes? Where would a FedEx be incarcerated? Is there a corporate Shawshank Prison? How does one fit a company for a prison jumpsuit?
It turns out a corporation can indeed be prosecuted like a person. It’s a practice the Supreme Court has approved of for over a century. In fact, in many ways they are easier to prosecute than people. Corporations don’t have all the same inconvenient constitutional rights as citizens accused of crimes. Imprisoning convicted citizens is expensive, but corporate convictions, on the other hand, turn tidy profits for the U.S. government, with zero prison overhead.
Even if corporations can be held criminally liable, should a courier service like FedEx be held liable for “possessing” what bad guys may send through the service?
The answer, according to FedEx, is not just “No,” but a “No” so conclusive that this case should never see a courtroom. The company maintains that it is innocent.
It has a point.
“Possession” is an elusive concept. When it comes to drugs, the law recognizes two kinds of possession: actual and constructive. Actual possession is when you have physical control over the contraband. When you have a gun in your hand or drugs in your pocket, you “actually” possess those things.
The somewhat hazier concept of “constructive possession” means you can “possess” something without even having it on your person, as long as you have ownership, dominion or control over the contraband or the property where it is found. For example, the government would argue that while you may not have actual possession of the 5,000 OxyContin pills in the trunk of your car parked in your driveway, you “constructively” possessed them.
Conversely, sometimes you can be holding something in your hand or have it in your vehicle, but not “possess” it either actually or constructively, in the eyes of the law.
Such is the case with couriers who routinely drive to your home, walk up to your door and hand you a package, completely ignorant about what is inside it. It’s hard to argue the UPS guy intentionally “possessed” your subscription to porno mags, in their nondescript brown packaging. That is the idea behind the “common carrier” exception to possession, and a large part of FedEx’s compelling legal argument.
A “common carrier” is one who offers its services to members of the public — without much discretion — and is engaged in the business of transporting persons or property for compensation.
The public policy reasons behind “common carrier” exemptions make sense; the industry simply couldn’t function if every driver, courier and handler who touches a valid shipment of OxyContin had to obtain a prescription for opiates to be legally allowed to deliver it to your front door. That would lead to an absurd result.
That’s why the Controlled Substances Act and the Food, Drug, and Cosmetic Act allow common carriers to lawfully possess controlled substances, so long as it is in the usual course of their business.
Of course, this is not a permission slip for drug runners to avoid liability by calling themselves “common carriers.” That’s why the “usual course of business” language acts as an additional safety measure.
In court papers, FedEx’s lawyers offer the example of an airline whose sole activity was flying controlled substances from Jamaica to Miami. This would not be acting in the usual course of business of a common carrier, since this imaginary airline is not offering its services to the public, generally.
On the other hand, FedEx argues that it is indeed a common carrier, performing the normal duties of a common carrier, because (a) it is engaged in the business of transportation of property and (b) it offers its services to the public generally.
It’s hard to imagine extending liability to common carriers for possession of contraband. Does this mean a Greyhound bus driver becomes liable for marijuana possessed by a passenger? The bus driver would argue he has no reason to know if a particular passenger is carrying drugs. But if the guy boards the bus with a Grateful Dead T-shirt and a set of bongos, shouldn’t the driver at least have a hunch? That seems dangerously close to profiling. Is this another illogical straw man argument? Maybe.
Obviously, the Department of Justice disagrees, which is why it has brought this criminal prosecution.
According to the indictment, from at least as early as 2004, the Drug Enforcement Administration, the Food and Drug Administration, and members of Congress put FedEx on notice that illegal Internet pharmacies were using its shipping services to distribute controlled substances and prescription drugs in violation of the Controlled Substances Act, the Food, Drug, and Cosmetic Act, and numerous state laws.
The indictment alleges that as early as 2004, FedEx knew that it was delivering drugs to dealers and addicts. FedEx’s couriers in Kentucky, Tennessee, and Virginia expressed safety concerns that were circulated to FedEx senior management. The DOJ is making the argument that even though FedEx carries and delivers whatever is handed to it by the public, FedEx knew or should have known in specific instances that it was involving itself in suspicious drug activity.
It raises a larger question, though: Why do we prosecute inanimate objects that we can’t even incarcerate? The answer is the same reason that the drug dealers deal drugs, and drug smugglers smuggle them: Money. Power.
The government in these cases gets to impose its will and policy upon large corporations — in this case, it would be to force FedEx to help law enforcement in policing shady pharmaceutical transportation. The government also gets to extract gargantuan sums of money from corporations in “deferred prosecution agreements.”
The reason you don’t see a lot of corporate trials is because most companies prefer to enter into such agreements; for a company, a public prosecution alone would be tantamount to a death sentence, whether or not it’s found guilty. Still, every defense attorney would love to offer the option to his or her human clients of avoiding felony conviction and a potential life sentence — by agreeing to pay some fines.
Don’t get me wrong: I’m all about prosecuting the black market, especially if that means prosecuting the guys who send us those spam emails to our work accounts with “V1AGRA” in the subject line, for our co-workers to see while we go to the bathroom. I want those guys locked up for sure. I’m just not sure that FedEx has anything to do with the kingpins of the “FR33 CYALIS” email campaign.
The DOJ’s underlying intentions are noble enough — this is an attack on the supply line of the illegal drug market by attacking the actual supply chain. It makes good strategic sense. It might seem like good financial sense in the short run, with the millions in fines extracted from corporations, but that money has to come from somewhere.
It’s just a matter of time before that trickles down to job cuts and less leg room on our flights. It probably doesn’t make good legal sense either. Yes, we have been treating corporations as fictional “persons” for centuries in some ways — but it’s silly to treat them as persons in all ways. FedEx has a strong argument for dismissal in this case, but even if not, it won’t be swapping its logo orange for prison orange anytime soon.
Originally posted at http://www.cnn.com/2015/04/05/opinions/cevallos-fedex-common-carrier-drugs
(CNN) — The end of “Jinx,” the six-part HBO documentary about real estate heir Robert Durst, has launched a debate about whether some potentially incriminating statements Durst made while in the bathroom to a microphone may be used in his criminal prosecution.
Durst, as you probably heard, is charged with murder in a killing in California 15 years ago, and he has been suspected, but never charged, in the disappearance of his first wife in New York.
Whether or not the taped words of an accused person will be admissible against him involves a look at the rules of evidence and the Constitution, as well as our fast-evolving ideas about privacy. While Durst’s attorneys can make a number of arguments to suppress these statements and bar their admission at trial, the bathroom confessions will likely be factored in.
Let’s go over three main reasons why:
1. Is this inadmissible hearsay? Probably not.
Hearsay is defined as a statement made outside of court that is offered in court for its truth. It really just means a witness can’t testify at trial about someone else’s version of the facts.
If a sentence starts with “He told me” or “She said that,” it’s probably hearsay. As general proposition, hearsay is supposed to be inadmissible, but the exceptions nearly swallow the rule itself — so much so that many commentators have suggested abolishment of the exception-riddled rule itself.
Perhaps the largest and best known category of hearsay exceptions is admissions and confessions. These can be admitted against a defendant. Why? Well, the idea is that these statements are reliable. The thinking is that people don’t ordinarily confess to something unless they did it.
2. Is this a violation of Durst’s constitutional privilege against self-incrimination? Again, probably not.
The rules of the U.S. Constitution are a different matter. The Fifth Amendment’s self-incrimination clause states that “[n]o person … shall be compelled in any criminal case to be a witness against himself …”
By definition then, compulsory self-incrimination requires, well, “compulsion.” And not just any compulsion. The kind of compulsion targeted by the Fifth Amendment is governmental coercion.
Durst may still contend that his “confession” wasn’t voluntary. It’s true that confessions deemed “involuntary” are often excluded at trial under the Due Process Clause of the 14th Amendment. However, a confession will only be considered involuntary if it is the product of police activity.
Voluntariness is not an issue when admissions are made to a private person, such as a journalist.
What of Durst’s likely claim that the filmmakers were essentially acting as an arm of the police? Sometimes law enforcement exercises so much control over a civilian that his private actions become police action, constitutionally speaking.
This is not an easy case for a defendant to make, though. Durst would have to establish that the HBO interviewers were direct agents of the police and that the interview was coerced by police.
The police undoubtedly benefited from the work of these citizen documentarians. But the police frequently benefit from the work of good Samaritans or citizens volunteering information, photos or iPhone videos. The television show “America’s Most Wanted” has been premised on this idea for decades. Given the defendant’s burden here, it’s unlikely that he can convince a judge that, in light of all the circumstances, filmmakers acted as an instrument or agent of police.
The bottom line is this: A voluntary confession must be the product of a rational intellect and a free will, not physical intimidation or psychological pressure. How was Durst “pressured” when alone in the bathroom? However, his attorneys might argue that some mental impairment rendered him incapable of the necessary rational intellect and free will.
3. Can Durst argue for some “reasonable expectation of privacy” that was violated by his being taped in the bathroom? Not in our modern world, and not in this case.
Perhaps in decades past, a court might be offended at an audio recording of someone in the bathroom, but things have changed.
Subjects of documentaries and reality TV stars alike routinely sign contracts allowing camera crews to pin a microphone to their lapels and follow them around 24 hours a day. Moreover, everyone in the television news business has a story about some famous correspondent going to the bathroom and forgetting about their “hot” mic. In this brave new media world, the rule appears to be: You wear a lavalier microphone at your own risk.
This is why defense attorneys tell clients to not give interviews. No matter how good an interviewee a client may be, audio and video editors have an uncanny knack for isolating the less than flattering sound bites. Admitting to killing “them all” would fall into this category.
When it comes to giving interviews, it’s probably better for defendants such as Durst to keep silent and be thought a fool than to open your mouth and remove all doubt, especially doubt of the reasonable kind.
Originally posted at http://www.cnn.com/2015/03/18/opinions/cevallos-hbo-robert-durst/index.html
(CNN) — Jurors will get to see Aaron Hernandez’s trophy case when they visit his home during the former New England Patriots star’s murder trial, a judge ruled last week.
The Assistant District Attorney asked the court for permission to hide the trophy case, indicating the defense was trying to engage in “strategic manipulation” or impress the jury with trophies or medals.
The defense’s position was simple: That’s the way the house looked when the alleged victim was killed … and that’s how it should be shown.
Trophy cases aside, the rest of us defense attorneys and prosecutors must be wondering about a threshold issue:
What’s with the jury excursions in these kinds of cases? This doesn’t happen in most trials. Why the special treatment?
The decision whether to grant a “jury view” rests, as with many things, in the sound discretion of a trial judge. Courts, meaning judges, have the inherent power to allow a jury in either a civil or a criminal case to view places or objects outside the courtroom. Whether to permit a jury to conduct a view in a particular situation is a question committed to the trial court’s informed discretion.
Practically, what that likely means is, the judge just conducts a balancing test by weighing “what’s the point?” against “do I really feel like going out in the cold for a jury view?” This calculus usually yields the following result in a run-of-the-mill case: motion denied.
There is a growing bifurcation of the criminal trial system and it has nothing to do with race. It has nothing to do either with the wealth of the defendant. Simply put, there is a growing chasm between the way regular trials are conducted and the way high-profile trials are conducted.
Most murder trials do not conduct jury views of the murder scene. On one hand, parties should be able to request jury views where it would be important for a jury to view a scene in person, and photographs or video are inadequate substitutes.
Of course, on the other hand, establishing a defendant’s absolute right to a jury viewing would not work either, because parties would inevitably abuse the system; the courthouse would look like a yellow bus depot dispatching a fleet of juries on field trips: depressing, macabre field trips.
As gruesome as the facts are, the Hernandez case is not all that different from thousands of other murder prosecutions, except that it is a trial being covered by the media. Coverage means scrutiny. Scrutiny means the judge and the lawyers on either side will err on the side of caution. Erring on the side of caution means motions and requests will be considered that would not ordinarily be considered.
It’s a common misconception that only rich or famous defendants get this special consideration by the courts, but that’s not the case at all. Jodi Arias was an indigent, noncelebrity defendant, and Arizona squandered half its GDP considering every request from both sides in that case. Race really isn’t a factor either. George Zimmerman’s trial judge entertained many creative motions from both sides, and, contrary to initial reports, he is Latino.
High profile cases are terrific for both legal professionals and the general public, because parties are allowed to develop arguments they otherwise might not be allowed to make in an ordinary case. But it also gives the public a false impression: They don’t get a sense of the conveyor belt fashion in which the vast majority of criminal trials are conducted.
There are two tiers of justice emerging in the United States. You don’t need to be a celebrity defendant to have access to the subtle accommodations of a high-profile case.
You can be an unknown person, as long as you meet certain criteria. You have to be attractive (Jodi Arias or Scott Peterson). You have to inspire a controversial racial dialogue (George Zimmerman or Officer Darren Wilson). Or, as Hernandez or O.J. Simpson can tell us—having a career in the NFL doesn’t hurt either.
Originally posted at http://www.cnn.com/2015/01/14/opinion/cevallos-jury-excursions-aaron-hernandez-trial/index.html