Case o' The Week: Convictions of King and Queen Upheld by Ninth - Anieze-Smith and Restitution

  Queen avoids custody.

   (But not restitution).

United States v. Anieze-Smith, 2019 WL 1944737 (9th Cir. May 2, 2019), decision available here.

Players: Decision by Judge Gould, joined by Judge Nguyen and District Judge Benitez. 

  Hard-fought appeal by, among others, CD Cal AFPD Kathryn Ann Young.   

Facts: Queen Anieze-Smith, and her co-defendant, Abdul King Garba, owned a medical supply company. Id. at *1. She was indicted in April 2013 – the statute of limitations went back five years, to April 2008. Id. The indictment alleged a Medicare fraud scheme involving powered wheelchairs that took place from 2006 to 2009, and alleged five executions that took place in 2008 (within the S.O.L.). Id. at *4.

   She was convicted after a jury trial, and the district court imposed restitution for the entire amount billed to Medicare – which necessarily included fraudulent acts outside of the statute of limitations. Id.

Issue(s): “[W]e turn to Anieze-Smith’s argument that the district court’s restitution order should be limited to losses traceable to executions of the fraudulent scheme that occurred within the statute of limitations.” Id.

  “Anieze-Smith’s argument presents an issue of first impression in this circuit . [W]e have held that the MVRA authorizes a district court to impose restitution based on related but uncharged conduct that is part of a fraudulent scheme . . . But we have not yet had occasion to address whether that rule applies when the conduct occurred outside the statute of limitations.” Id. at *5.

Held: “[T]he text of the MVRA does not limit restitution to the reach of the indictment, but instead authorizes district courts to order restitution for all losses directly resulting from conduct throughout the course of the fraudulent scheme. We reject Anieze-Smith’s argument and hold that the MVRA authorizes district courts to impose restitution to all victims for the losses they suffered from the defendant’s conduct throughout the course of the fraudulent scheme, even where such losses were in part caused by conduct outside the statute of limitations.” Id. at *5.

Of Note: Medicare fraud, powered wheelchairs? Sound familiar? In 2016, the Ninth decided an important “abuse of trust” enhancement issue in the context of another powered wheelchair case, United States v. Adebimpe, 819 F.3d 1212 (9th Cir. 2016); see also blog here. 

  These appeals are the tail end of a prosecution effort focused on Medicare wheelchair fraud. Tough cases to defend – particularly when the recipients walk up to the stand to testify in court, with no wheelchair, walker, or cane. See article here. 

How to Use: Anieze-Smith was ordered to pay over $800k in restitution, for offense conduct that extended over years. Id. at *3. She was a CEO with an MBA, an enrolled agent in the IRS, and she managed the company’s financial records. She was convicted after a ten-day trial. Id. at *2.

   Her sentence?

   Probation. Id. at *3.

   Remember Anieze-Smith when arguing sentencing disparity variances in these Medicare fraud cases.

                                               

For Further Reading: Last week marked the milestone of one hundred jurists nominated by President Trump and confirmed by the Senate. See article here.  By this time in his term, President Obama had 81 judicial nominees confirmed. Id. 

  Should the Ninth be expanded, with five more seats to be filled by the President during this first term? For an interesting article discussing that prospect, and reporting the Circuit's last major growth spurt, see, Ninth Circuit Recommended for Expansion. Could it mean shift to the right?, available here.

Image of Mary Queen of Scots from https://www.pinterest.com/pin/403564816588220116/

Image of Ninth Circuit Seal from https://en.wikipedia.org/wiki/United_States_Court_of_Appeals_for_the_Ninth_Circuit  

Steven Kalar, FPD Northern District of California. Website www.calfpd.org

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Case o' The Week: Not Charged, But Still You Pay - Donald Johnson and MVRA restitution

 Uncharged crimes, federal dimes.

United States v. Donald "Ski" Johnson, 2017 WL 1416490 (9th Cir. April 21, 2017), opinion available here.

Players: Decision by Judge Callahan, joined by Judge Paez and D.J. England. Hard-fought appeal by Michael Donahoe, Sr. Litigator, Federal Defenders of Montana.

Facts: Johnson used an alias to promote a (fraudulent) black-tie charity event in Seattle. Id. at *1. He pocketed about $9,300. Id.

  Using a different alias, Johnson pulled off another charity-fraud scheme in Florida. Id.

  Then, using the Florida alias, he tried again in Montana and was caught. Id. Johnson was indicted in Montana with one count of § 1343 – wire fraud. Id.

  Although the indictment alleged the scheme occurred in Montana “and elsewhere,” it referenced only a single wire, associated with the Montana attempt. Id. at *2. Johnson successfully moved in limine to limit the government’s proof to only the Montana event. Id. (Note - based on later Ninth Circuit law, the court probably improperly excluded this as prohibited 404(b)(2) evidence. Id. at 2 & fn. 2).

  Thought Johnson was only convicted of the Montana wire, the government sought restitution for the Seattle and Washington fraud events. Id. The district court declined, and only imposed restitution for the Montana fraud. Id.

  The government appealed.

Issue(s): “[T]he government argues that the district court erred by considering only Johnson’s fraudulent conduct that occurred in Montana (the count of conviction) when determining restitution, and thus misinterpreted the Mandatory Victim Restitution Act (‘MVRA’). See 18 U.S.C. § 3663A.” Id. at *1.

Held: “Under 18 U.S.C. § 3663A and Ninth Circuit precedent, the district court could properly order restitution for all victims harmed by Johnson’s scheme, including those harmed by conduct beyond the count of conviction. Accordingly, we vacate the district court's restitution order and remand for the court to make factual findings to determine whether Johnson’s activities beyond the [Montana] event are sufficiently related to be included for restitution purposes in Johnson’s overall scheme to defraud.” Id. at *3.

Of Note: The district court agreed with the defense and kept this fraud trial a Montana case, tried to a Montana jury: Seattle and Florida events were excluded. The AUSA could have appealed -- unlike the defense, the government can bring an interlocutory appeal of evidentiary rulings. Id. at *2 (citing United States v. Loftis, 843 F.3d 1173, 1175-76 (9th Cir. 2016)).

  But the government didn’t.

  Having waived that interlocutory appeal, could the government later argue these “outside the conviction” frauds when seeking restitution? Yep.

  Judge Callahan rejects the defense pitch that the government’s failure to bring an interlocutory appeal limited the government’s post-conviction, restitution appeal. Id. at *2. The government’s failure to raise an interlocutory appeal does not bar raising the decided issue after entry of a final judgment. In Johnson, that was the case even though the restitution order “flows from the same issue as the district court’s evidentiary hearing.” Id.

  There are rational reasons for these double-standards around interlocutory appeals (double-jeopardy being foremost) . . . but this line of law is nonetheless perpetually galling.

How to Use: Thought the AUSA failed to argue it, the law at the time of this restitution hearing was clear that fraud conduct beyond the count of conviction can be used for MVRA restitution. Id. at 3 & n.4. 

  It isn’t new law, but the rule is worth adding to the research file: “restitution may be ordered for all persons directly harmed by the entire scheme and is thus not confined to harm caused by the particular offenses for which the defendant was convicted.” Id. at *3 (quotations and citation omitted).

                                               

For Further Reading: Will NorCal be flooded with § 1326 cases? Well, it got a little harder for ICE to trigger the tsunami last week, when the Hon. William H. Orrick issued a preliminary injunction against Executive Order 13768.

  While many have applauded WHO for his decision, fewer have actually read the (admirable) order. Interestingly, it is quite restrained – as Judge Orrick explains, “The Counties’ motions for preliminary injunction against Section 9(a) of the Executive Order are GRANTED as further described below. That said, this injunction does nothing more than implement the effect of the Government’s flawed interpretation of the Order.”

  The opinion that has made the Northern District (or rather, “the Ninth Circuit”) the latest Tweet-target can be found here.

“Gavel and cash” image from https://forbiddenmusic.org/2015/02/05/music-restitution/

Steven Kalar, Federal Public Defender N.D. Cal. Website at www.ndcalfpd.org

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Case o' The Week: Government Misses "Target" Yet Still Hits Ninth's Mark - Zhou, Restitution, and Standards of Review

   Q: What could be worse than a forfeiture order that snags assets from dismissed or acquitted counts? See Lo blog entry here.

   A: A restitution order that scoops in victims from conduct that is beyond the scope of the conviction. United States v. Zhou, 2016 WL 5390345 (9th Cir. Sept. 27, 2016), decision available here.

Players: Judge Graber writing and concurring, Judge Silverman concurring, dissent by Judge Tashima. Hard-fought appeal by CD Cal AFPD Jonathan Libby.

Hon. Judge Susan Graber

Facts: Zhou used fraudulent credit cards at Target (Colorado) and Nordstrom (California). Id. at *1. The indictment charged he used the cards in the Central District of California “and elsewhere.” Id. at *2. 

  He plead open and admitted the CD Cal (Nordstrom) allegations (discussed by the government during the plea). He didn’t admit to the “Target” allegations (not mentioned by the government in the plea). Id. at *1-*2, *5. 

   The court’s Mandatory Victim Restitution Act (“MVRA”) order covered both the Nordstrom and the Target charges. Id. at *1. The (not-admitted) Target offenses generated about half of the restitution sum. Id. at *2. Zhou did not object at sentencing. Id.

Issue(s): “Defendant . . . [argues] for the first time on appeal that the district court improperly ordered restitution with respect to the Target charges.” Id. at *1. “He argues that the district court erred by awarding restitution to persons who were not victims of the offense of conviction, because the offense of conviction covered only the Nordstrom charges and the MVRA authorizes restitution only to the victims of the offense. Defendant acknowledges, as he must, that he did not raise that argument (or any argument concerning restitution) to the district court.” Id. at *2. 

  “[Applying the MVRA], the only issue is whether the Target victims were persons ‘directly and proximately harmed as a result of the commission of’ Defendant’s crimes of conviction.’” Id. at *4 (citing 18 U.S.C. § 366A(a)(2). 

  “The parties dispute whether it was plain error to order restitution to the victims of the Target charges.” Id.

Held: “We hold that the district court did not plainly err in imposing restitution and, therefore, affirm.” Id. at *1 (emphasis added). 

  “Defendant pleaded guilty to Count One of the indictment, and restitution is therefore appropriate for all victims of that count.” Id. at *5.

Of Note: This is a disappointing (albeit limited) restitution holding. An important sub-issue, however, is the standard of review. The government urged the Ninth to punt, because the case involved an “unresolved factual issue.” Id. at *3. Judge Graber rejects that pitch, and relegates this (pro-government) line of law into regular old “plain error” review. Id. 

  She also, however, rejects Zhou’s plea for de novo review as a “pure question of law.” Id. at *3. Indeed, Judge Graber rejects this argument so vehemently that she concurs with herself, to advocate for en banc elimination of the “pure question of law” line altogether. Id. at *6 (Graber, J., concurring). 

  As Judge Tashima observes, it’s a curious concurrence, since no one views this appeal as a “pure question of law.” Id. at *10 & n. 3 (Tashima, J., dissenting). 

  Appellate folks, read this concurrence carefully: Judge Graber’s push for en banc review of an established and valuable line of jurisprudence is of concern. (And note that two of Zhou’s panel – Judges Tashima and Silverman – were on another panel that dealt with this line of law.). See blog here

How to Use: Can the government scrape by with a limited factual recitation at the plea, and then blow up the universe of restitution victims by importing what is really relevant conduct? 

  Not if you object. 

  Judge Graber makes a point of limiting Zhou’s holding: “we need not and do not decide definitively whether the district court erred, because any error was not plain.” Id. at *6. It is an open question whether it is error for non-admitted conduct (or, put differently, conduct that is not squarely within the scope of a conviction) to be the basis of a MVRA restitution order. 

  Want a blueprint for your restitution objection? Read Judge Tashima’s compelling dissent. He pointedly asks why the Ninth is upholding a restitution order based on what is really relevant conduct, when the MVRA only authorizes restitution that flows directly “from the specific conduct that is the basis of conviction.” Id. at *8 (Tashima, J., dissenting).

                                               

For Further Reading: Two decades of experience have confirmed what we predicted: Olano was, well, a plain error.

  For an explanation of why Rule 52(b) doesn’t work, and a thoughtful suggestion on how to reform our broken system of reviewing unpreserved error, see Dustin Berger, Moving Toward Law: Refocusing the Federal Courts Plain Error Doctrine in Criminal Cases, 67 U. Miami L. Rev. 521 (2013), available here.

Image of the Honorable Judge Susan Graber from https://pbs.twimg.com/media/B-lnfRyWsAArNqm.jpg

Image of "Target" symbol from https://lh3.googleusercontent.com/-vTEcOA0uj8Q/AAAAAAAAAAI/AAAAAAAACLc/3LScBF-Cpf4/s0-c-k-no-ns/photo.jpg 

Steven Kalar, Federal Public Defender, N.D. Cal. Website at www.ndcalfpd.org

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