Sunday, July 13, 2008

Case o' The Week: Fraud loss of $245,126 is not over $10,000, Kawashima and Taylor Categorical Analysis

A slow week in the Ninth has us stretching back a bit to the intriguing July 1st decision of Kawashima v. Mukasey, __ F.3d __, 2008 WL 2579212 (9th Cir. July 1, 2008), decision available here. Though technically an immigration case, Kawashima is an important decision in the criminal context as well -- particularly in fraud cases involving non-citizens. Beware, however, that Taylor issues are bouncing around en banc (and possibly, cert.) reviews -- and a developing little Fifth/Ninth Circuit split doesn't help matters.

“Special” cert. petition – er, concurrence – by Judges O’Scannlain and Callahan.

Facts: Akio and Fusako Kawashima were Japanese citizens and US Legal Permanent Residents. Id. at *1. Mr. Kawashima pleaded guilty to “false statement on a tax return,” and his plea agreement said the actual tax loss was $245,126. Id. The INS tried to remove him, alleging this was an agg felony because it was a fraud offense with a loss amount over $10,000. Id.; see also 8 USC § 1101(a)(43)(M)(i). The I.J. and the B.I.A. agreed – as did this Ninth Circuit panel, the first go-around. Id.

The day after the panel's first decision, the Ninth decided Navarro-Lopez v. Gonzalez, 503 F.3d 1063 (9th Cir. 2007) (en banc) (blog here), and the panel (grudgingly) revisited its original Kawashima decision.

Issue(s): 1. Is tax fraud categorically an aggravated felony, when the statute does not contain an element that the fraud loss be over $10,000?

2. Can the court look the documents of conviction, to determine if the fraud loss was over $10,000 and – therefore – was an aggravated felony?

Held: 1. “[The tax fraud statute does not] required proof of monetary loss in excess of $10,000 . . . and is “too broad to be a categorical match.” Id. at *2. [T]he Kawashimas’ prior convictions do not qualify as aggravated felonies under the categorical approach.” Id.

2. “[B]ecause the statutes to which the Kawashimas pled guilty to violating do not require proof of any particular monetary loss, we do not examine the record of their convictions to determine whether they necessarily pled guilty to causing a loss in excess of $10,000.” Id. at *5.

Of Note: Much is bubbling in the jurisprudential goo of the Taylor categorical analysis. The Kawashima panel’s reluctant concession that tax fraud can never qualify as an agg felony is followed by a “special concurrence” that reads a lot like a cert. petition (let's whistle past the graveyard).

Here’s three other big Taylor issues that are percolating in the Circuits. First, say the statute of conviction is missing an element that the “generic” offense requires – like here, a loss amount over $10k. Can the court look at the plea agreement of the crime of conviction, find that the loss clearly exceeded this amount, and hold that the conviction is an agg felony? No, after Judge Harry Pregerson’s wonderful en banc decision in Navarro-Lopez – but one has to concede that a chunk of the Court is not keen on that rule.

Issue two: assuming that the Court finally gets around to the modified categorical approach, can it use cruddy evidence like minute orders in its analysis? The Ninth is considering that question now, in the Snellenberger en banc case.

Finally, is the California burglary statute similar to the federal tax fraud statute – a crime that can never be a categorical agg felony because it is missing an element? “Yep,” argues appellate guru Steve Hubachek in a righteous Federal Defender amicus in Snellenberger (and he’s right).

How to Use: Kawashima is an immigration case with important criminal ramifications. First, does this case relieve defense counsel of agg felony worries in fraud cases? Traditionally, non-citizens defendants have had to beg, plead, snitch and fold to dodge fraud convictions that would have been agg felonies. Maybe this decision takes away one arrow from the government’s quiver, allowing more non-citizen fraud defendants to fight their cases? Deserves more thought.

The case also illustrates that one can’t take enhancement priors for granted after
Taylor. Here, a tax fraud of over $200k isn’t a “fraud over $10,000” in the agg felony analysis. In the Snellenberger amicus, Hubacheck persuasively argues that a California burglary isn’t a Career Offender predicate “burglary” because the California crime doesn’t have the “unprivileged entry” element required in the federal statute. These close Taylor analyses aren’t easy or intuitive, but their outcomes can be the single most important issue in a defendant’s or alien’s case.

For Further Reading: As our Texas colleague Brad Bogan has noted, Kawashima marks a squirrely split between the Fifth and Ninth Circuits. See Fifth Circuit blog here. The Fifth agrees with the Ninth’s good Taylor rule in Navarro-Lopez, but nonetheless holds that in an agg felony analysis the amount of a fraud can be found by a review of the underlying conviction documents (maybe this is a modified, modified-categorical analysis? A revised modified-categorical analysis?). See Arguellas-Olivares v. Mukasey, 526 F.3d 171 (5th Cir. 2008) (decision here, blogged here).

Confused yet?

Thanks to Arizona AFPD Brian Rademacher, for alerting the Defender community to the Kawashima decision.

Steven Kalar, Senior Litigator N.D. Cal. F.P.D. Website at


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Anonymous Anonymous said...

As far deportability under $10,000 fraud or deceit aggravated felony ground, the other shoe hasn't dropped yet. In its precedent decision Matter of Babaisakov the BIA ruled that an immigration judge can accept any evidence of loss--even take testimony-- and that the loss amount is a "non-element" requirement of the removal ground that is outside the Taylor categorical or modified categorical approach. This reversal of Kawashima provides a future rationale --in addition to pure "Brand X deference"-- to uphold Babaisikov in the 9th Circuit, since the $10k loss is almost never an element of a fraud crime. The argument would be that only treating the loss as a "non-element factor" can make the language of 8 USC 1101(a)(43)(M)(i) meaningful, in the light of Navarro-Lopez's strict requirement on using the modified-categorical approach only to determine necessary elements of conviction. If upheld, Babaisakov will make it almost impossible for many non-citizen defendants to prevent deportability for an aggravated felony.--JM

Wednesday, July 16, 2008 1:48:00 AM  

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