Case o' The Week: Theft With No Steal Still Loses Appeal - Gagarin and Aggravated Identity Theft

  What is the the difference between identity theft, and identity fraud, in the Ninth?

   Five letters (and two years).

   United States v. Gagarin, 2020 WL 727761 (9th Cir. Feb. 13, 2020), decision available here.

 Players: Decision by Judge Gould, joined by Judge Bea. Concurrence by Judge Friedland. Hard fought appeal by ND Cal Appellate Chief Carmen Smarandoiu.  

Facts: Karen Gagarin participated in an insurance fraud conspiracy. Id. at *1. Gagarin’s cousin, Gilroy, asked Gagarin to secure a policy for her. Id. at *3. Gilroy testified that Gagarin instructed her to lie about her place of employment. Id. The application, apparently submitted by Gagarin, contained false information about employment, salary, and the nature of Gilroy’s relationship with the beneficiary. Id. There were several electronic signatures purporting to be by Gilroy. Id. at *2.

  Gagarin was convicted after trial of, among other counts, aggravated ID theft for the Gilroy application, in violation of 18 USC § 1028A. Id.

Issue(s): “Gagarin challenges the district court’s denial of her post-trial motion for a judgment of acquittal on the aggravated identity theft count . . . .” Id. at *1. “Gagarin claims that three essential elements were not satisfied, contending that (1) she did not ‘use’ a means of identification ‘during and in relation to’ the commission of wire fraud under the terms of the statute, (2) she did not act ‘without lawful authority,’ and (3) she did not use the means of identification of ‘another person.’” Id. at *4.

Held: “Gagarin attempt[ed] to pass herself off as her cousin through forgery and impersonation. . . . . [T]he use of another person’s means of identification makes a fraudulent claim for payment much harder to detect. . . and Gagarin’s forgery of her cousin’s signature did just that by obscuring her own role in the fraudulent application. Her use of Gilroy’s means of identification was thus central to the fraud and ‘furthered and facilitated’ its commission. [W] e hold that Gagarin’s actions constituted ‘use’ under the meaning of the aggravated identity theft statute.” Id. at *4 (internal quotations and citations omitted).

  “Gagarin also contends that she did not act ‘without lawful authority, a required element of aggravated identity theft. We disagree. . . . Whether a particular use was ‘itself illegal’ relates to the degree of connection between the use of the identity and the predicate felony. But the statute already contains language about the required nexus: the use must be ‘during and in relation to’ specified unlawful activity. Here, for the reasons stated above, Gagarin used Gilroy’s identity during and in relation to the wire fraud that Gagarin does not challenge occurred here. Gagarin has not shown that use ‘without lawful authority’ required more in this case.” Id. at *5.

  “[E] ven if Gagarin had Gilroy’s consent, we follow our circuit precedent to hold that Gagarin used the means of identification of ‘another person’ by using the identification of another ‘actual person.’ Id. at *6.

Of Note: Supervise an intern? That can earn you +3 offense levels for being a manager or supervisor. Id. at *7. The Ninth’s affirmance of this sentencing enhancement is another disappointing aspect of a frustrating opinion.

How to Use: In a thoughtful decision, the Seventh Circuit narrowed this expansive statute by limiting the term, “another person” to refer to a person who did not consent to the use of the means of identification.” See United States v. Spears, 729 F.3d 753, 758 (7thCir. 2013) (en banc). Gagarin author Judge Gould makes a point of criticizing the Spears analysis. Id. at *6.

  In a brief, but insightful, concurrence, Judge Friedland muses that the Seventh actually seems to have gotten it right. Gagarin, 2020 WL 727761, at *10 (Friedland, J., concurring).

  Read Judge Friedland’s concurrence and preserve the challenge when faced with a § 1028A charge that – like here – involved a person who consented to the use of an identity. Judge Friedland’s valid concerns may someday win the day.

                                               

Attorney General William Barr

For Further Reading: Turns out that we and DOJ agree: the Guidelines are far too harsh, line-AUSAs do seek far too much custody time, and reasonable sentences should involve far less incarceration.

   For one of many summaries of last week’s stunning Stone sentencing saga, see a NBC News article here. 

  Here’s hoping your federal client is the subject of a sympathetic White House Tweet, and a helpful sentencing-mitigation memo from Attorney General Barr.

Image of “You Can’t Steal Something That’s Been Given To You” from https://www.magicalquote.com/seriesquotes/cant-steal-something-thats-given/

Image of the Honorable Attorney General William Barr from https://en.wikipedia.org/wiki/William_Barr 

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

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Case o' The Week: Ninth Needles Government - Hong and "Use" in Section 1028A

Judge Paez drives the point home, in a case of first impression.

United States v. Hong, 2019 WL 4315165 (9th Cir. Sept. 12, 2019), decision available here.

Players: Decision by Judge Paez, joined by Judges Clifton and D.J. England. Big win for former CD Cal AFPD Carlton Gunn.   

Facts: Hong owned and operated massage and acupuncture clinics. Id. at *1. He gave his patients’ Medicare-eligibility info and identities to physical therapy companies, who then billed Medicare. Id.

  In reality, however, the clients received massage and acupuncture (not covered by Medicare), and essentially no physical therapy (covered by Medicare). Id. at *2. Hong received the majority of the Medicare payments. Id. Notably, this is what the patients wanted – they came seeking massage and acupuncture, not physical therapy. Id.

  Hong was charged, tried, and convicted of fraud and kickback counts, and of two counts of aggravated identity theft. Id. at *3. “The government alleged that Hong used the names and Medicare-eligibility information of patients to submit, with the help of his co-schemers, claims for benefits without lawful authority.” Id. at *7.

Issue(s): “Hong argues there was insufficient evidence of aggravated identity theft [because] . . . this fraudulent billing does not constitute a ‘use’ of the patients’ identities within the meaning of the aggravated identity theft statute.” Id. “[This] argument presents a new question for our court: whether the fraudulent billing demonstrated in this case constitutes a ‘use’ of the patients’ identities under section 1028A.” Id.

Held: “Hong provided massage services to patients to treat their pain, and then participated in a scheme where that treatment was misrepresented as a Medicare-eligible physical therapy service . . . Neither Hong nor the physical therapists ‘attempt[ed] to pass themselves off as the patients.’ . . . . Hong’s fraudulent scheme ran afoul of other statutes—namely, health care fraud and unlawful remunerations—but not section 1028A. We hold that Hong did not ‘use’ the patients’ identities within the meaning of the aggravated identity theft statute. Accordingly, we reverse Hong’s [agg ID] convictions . . . . .” Id. (citations omitted).

   “Hong participated in and, through kickbacks, profited from a health care fraud scheme. His conduct, however, falls short of aggravated identity theft as it is contemplated in the statute. We therefore reverse Hong’s convictions for aggravated identity theft and remand for resentencing.” Id. at *9.   

Of Note: Section 1028A is the infernal “agg ID theft” statute. Carrying a two-year mand-min, it is a charge frequently abused by the government. See, e.g., United States v. Bercovich, 615 Fed.Appx. 416 (9th Cir. 2015), mem. (permitting § 1028A counts where identities were used with the person’s active consent). Hong is thus particularly welcome -- a rare appellate limitation for this generally boundless offense.

  In Hong, Judge Paez carefully analyzes the word “use” in the agg ID statute, and recounts with approval the approaches of the First and Sixth Circuits (both of which reject § 1028A charges in this context). Hong, 2019 WL 4315165 at *7-*8.

  Beware of the boundaries of Hong’s new rule –convictions can be upheld where there was impersonation or forgery. Id. at *8 & n.8. Nonetheless, any limit is a good limit: Hong helps.

How to Use: Must one argue all defense theories when moving for a Rule 29 dismissal? When that didn’t happen in Hong, the government argued that several appellate theories were waived. See id. at *5 (discussing Graf). 

  Federal trial attorneys should read Hong’s Rule 29 discussion carefully: if we articulate a specific Rule 29 theory at trial, our appellate comrades will thank us later if we try to articulate them all.

                                               

For Further Reading: Az Appellate AFPD Keith Hilzendeger found a hen’s tooth: a full week’s calendar staffed by Ninth judges. See Ninth Circuit calendar here.  No visiting judges, no D.J.s, see blog entries here, just Western appellate judges. 

  This feat was made possible with the influx of Trump-nominated jurists: Judges Miller, Bennett, and Bade all sat on this Pasadena calendar.

Image of acupuncture from https://www.relaxoncloud9.com/pins-needles/2018/6/4/9-facts-about-acupuncture

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

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Case o' The Week: Doe, a Drear, a New-Rule Drear: Doe and Proof of Knowledge of Real ID for Agg Identity Theft

“Keepin’ it real” just got easier, in the Ninth (unfortunately).

  United States v. John Doe, 2016 WL 6958647 (9th Cir. Nov. 29, 2016), decision available here.

Players: Decision by visiting Sr. District Judge Garbis, D. Maryland, joined by Judges Silverman and Nguyen.

Facts: John Doe refused to give his name, through the appeal. Id. at *1 & n.1. The victim of this ID case was born in ’63 and later obtained a social security card. Id. Before ’87, the victim’s birth certificate and social security card was sold; someone used these docs to obtain replacements. Id. at *1. The victim’s identification was then used for 27 years without authorization. Id. Evidence showed Doe used the victim’s identity in 2002 to get a driver’s license. That license was periodically renewed until 2014 when Doe was arrested. Id. Doe was charged with agg ID theft, and false statements in immigration docs. Id. at *2. He was convicted after trial. Id.

Issue(s): “Doe contends that the Government failed to prove an

element of the offense—specifically that he knew that the false identity he used belonged to a real person.” Id. at *1. “Doe acknowledges that the Government proved that [the victim] was a real person. . . . Doe contends however, that, without direct proof of his knowledge (such as proof that he knew [victim] or had any connection to the sale of [the victim’s] birth certificate and identifying information), the evidence was insufficient to establish his knowledge that V was a real person.” Id. at *3 (footnote omitted). “[T]he issue here presented is whether the circumstantial evidence was sufficient to establish Doe’s knowledge that the identity of [victim] was that of a real person.” Id. at *3. “This case presents the question, not previously addressed by this Court, of whether evidence of a defendant’s repeated submission of false identifying information as part of successful applications to a government agency is sufficient to permit a reasonable jury to find that the defendant knew that the information belonged to a real person.” Id. at *1.

Held: “We hold that it is and that Doe’s convictions were thus based upon sufficient evidence.” Id. 

“This Court holds that the evidence of Doe’s repeated successful use of V's identity in applications subject to scrutiny was sufficient to permit the jury to find that he knew that V was a real person.” Id. at *4.

Of Note: This is a disappointing holding, and the jury instruction – quoted verbatim in the opinion – is likely to be imported in agg ID theft cases. Id. at *4. The theory appears to be a presumption of government competence: a defendant theoretically knows that the government would jump on the use of a fake social security number or birth date in an application for government docs. Thus, using an ID to apply for government docs is circumstantial evidence that the defendant knew the ID was real. Id. at *4 (collecting cases). Unfortunately, this new Ninth rule is also consistent with decisions from the First, Eighth, and Eleventh Circuits. Id.

How to Use: It bears emphasis that the Doe rule is just a “sufficiency” holding: the case doesn’t hold that applications for government docs are per se evidence that the defendant knew the identity belonged to a real person. To the contrary, this is mere circumstantial evidence that is subject to attack. In this case (and in others cited in Doe), the defendant was a foreign national who argued he couldn’t reasonably be pegged with knowledge of how the U.S. government’s identification-certification procedures worked. Id. at *4. While that argument didn’t win the sufficiency-day for Doe, “[h]is not being a citizen, although a resident, of the United States is a fact that the jury could have considered relevant . . . .” Id. (emphasis added). Doe’s inadvertent holding is that the unique history of the defendant, in the context of this circumstantial evidence, is relevant to the subjective question of whether this defendant knew the ID belonged to a real person.

                                               

For Further Reading: Doe involved mand-mins and immigration charges –subjects much on our mind, as (future) A.G. Sessions warms up in the batter’s box. For a preview of the Senator’s views, see news release here.

Image of “McLovin” scene from “Superbad,” from http://www.mtv.com/news/1998398/fake-id-bouncers/

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

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Case o' The Week: Winning Isn't Everything (and Sometimes, It's Nothing . . . .) - Horob and Vindictive Sentencing on Remand

It goes to eleven.

(And it stays there).

United States v. Horob, 2013 WL 5943405 (9th Cir. Nov. 7, 2013), decision available here.

Players: Per curiam decision by Judges Silverman, Fletcher and Callahan.

Facts: Horob was a cattleman that made-up cows and concocted “investments” when faced with mounting losses. Id. Horob was convicted of a fraud-related charges and aggravated identity theft – a two-year mandatory-minimum consecutive count. Id. at *1. The district court departed downwards 27 months from the guidelines, and imposed a total ultimate sentence of 11 years. Id. Horob won part of his first appeal when the Ninth reversed the agg ID theft conviction. Id. The celebration was short-lived: on remand, the district court imposed an identical 132-month custodial sentence, despite the lack of the 2-year-consecutive, mand-min, agg ID theft count of conviction. Id. Horob appealed again.

Issue(s): “Horob contends that the district court acted vindictively when it imposed the same total sentence on remand.” Id. at *2.

Held: “[W]e hold that the presumption of vindictiveness does not apply when a district court does not impose a more severe sentence on remand, even when the vacated conviction carried a mandatory sentence.” Id. at *1. 

  “The presumption of vindictiveness does not apply to Horob because it is apparent that the district court considered his overall sentence at the time of his original sentence and again on remand, and because his overall sentence was not increased.” Id. at *2 (emphasis in original). 

  “A sentence is not more severe merely because a mandatory sentence has been eliminated if the overall sentence remains the same and there is no net increase in his punishment.” Id. (internal quotations and citation omitted).

Of Note: “Horob is understandably disappointed that his successful appeal . . . did not

Todd Kenneth Horob

result in a reduction of his final sentence, but this does not give rise to a presumption of vindictiveness.” Id. at *3. 

  The Ninth probably understates Horob’s disappointment. 

  The per curiam Court relies on authority that holds a sentence becomes “unbundled” on remand and re-sentencing – ergo, there’s no presumption of vindictiveness when the reversal of a two-year min-mand produces an identical prison (re)sentence. Id. at *4. This is a head-scratcher for us in the trenches: a defendant gets eleven years of custody when his “reasonable” sentence included a two-year mandatory minimum consecutive term, yet the “reasonable” term on a victorious remand, where the consecutive mand-min is gone, is identical? Maybe the district court felt that eleven years was just the right sentence the first time around, and jiggered a guideline variance to offset the mand-min to get there? 

  On its surface, Horob is about resentencing, but the opinion’s larger lesson is the lunacy of mandatory-minimum sentences. District courts think so little of agg ID theft mand-mins that guideline sentences are just “varied” to absorb these 2-year tails. It’s a rational approach– Section 1028A charges have much more to do with an individual AUSA’s mood than with the crime actually committed or the culpability of the defendant – but Horob reveals how nonsensical agg ID theft mand-mins really are.

How to Use: Maybe the real lesson of Horob is this: the Ninth won’t second-guess a district court for off-setting a Section 1028A mand-min by varying from the guideline range. Pretty clear that’s what happened here at the original sentencing, and it prompted nary a “tsk” from the Ninth. Granted, there’s that language in Section 1028A(b)(3) that discourages (er, prohibits) such an offset . . . but that didn’t get much traction in Horob.

                                               

For Further Reading: Mand-mins wrongly limit judicial discretion, unfairly increase prosecutorial discretion, shield bad police work by discouraging suppression litigation and trials, and produce inexplicable sentences like the one in Horob. They also cram prisons with more inmates than they can hold. For a compelling indictment of federal overcrowding – projected to 55% over capacity by 2023 – see the Urban Institute’s new report here. 

Spinal Tap image from http://www.metalizer-records.de/bilder/produkte/gross/SPINAL-TAP-This-Is-UP-TO-11-EDITION-3DVD-SET-.jpg

 Image of Mr. Horob from http://billingsgazette.com/news/state-and-regional/montana/article_89659d1b-1360-5035-b9b1-fa9701e6f2f1.html

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

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