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: Blackstone on the Law -- Blackstone and Timeliness of Johnson guideline Section 2255 claims

   Sir William would be disappointed.

United States v. Blackstone, 2018 WL 4344096 (9th Cir. Sept. 12, 2018), decision available here.

Players: Decision by Judge Clifton, joined by Judges Schroeder and M. Smith. Hard-fought appeal by AFPD Alyssa Bell, Central District of California FPD.

Facts: In ’99, Blackstone was convicted of Hobbs Act robbery and a § 924(c), and sentenced under the (then-mandatory) guidelines to 290 months. Id. at *1-*2. Two priors were treated as “crimes of violence” that triggered Career Offender. Id. His appeal and habes were denied.

  Within a year of Johnson, Blackstone obtained permission to file a second-or-successive § 2255. Id. Blackstone filed a § 2255 in the district court, and the motion was denied on the merits. Id.

  Back up in the Ninth, the government then argued that Blackstone’s motion was untimely. Id. at *3. On appeal, the government contended that “the Supreme Court’s decisions in Johnson and Welch have not authorized a motion by Blackstone at this point because those decisions pertained to the Armed Career Criminal Act (ACCA), 18 U.S.C. § 924(e)(2)(B), and that neither addressed whether Johnson applies to other clauses providing for enhanced sentences based on convictions for crimes of violence.” Id. at *3.

Issue(s): “[A] right newly recognized by the Supreme Court may open the door to filing a § 2255 motion later in time. The question presented in this case is whether Johnson and Welch have opened that door.” Id. at *3.

Held: “We conclude that they have not.” Id.

  “[T]he Supreme Court has not yet recognized the right asserted by Blackstone. The Supreme Court has not held that the mandatory Sentencing Guidelines are subject to this vagueness challenge. As a result, Blackstone’s current motion is not timely under the statute. In reaching that conclusion, we agree with similar rulings by three other circuit courts that have considered this issue. We deny a similar challenge by Blackstone to a conviction and sentence under 18 U.S.C. § 924(c) for use of a firearm during a crime of violence because the Supreme Court has not recognized that right, either. We affirm the denial of Blackstone’s motion.” Id.

Of Note: This is a terrifically disappointing opinion. As the Ninth’s Johnson warriors have quickly pointed out, the decision relied on the Tenth’s opinion in Greer. See id. at *5. Blackstone failed, however, to wrestle with how Dimaya affected Greer – or acknowledge that the Tenth itself has now granted rehearing in Ward based on Dimaya (the Tenth had previously dismissed Ward based on Greer).

  The Ninth is now crossways with Cross, a Seventh Circuit case, may soon be sideways with the Tenth in Ward, and is a step behind the Supremes after Dimaya.

  Blackstone should go en banc.  

How to Use: To add salt to the wound, in our view the Ninth stretches to resuscitate the government’s “timeliness” argument. On appeal, Blackstone argued that the government did not raise this argument in the district court. See id. at *4 & n.2. The Court reassures us that the government had argued that the petition was time barred: this appellate theory was just an “alternative argument to support . . . a consistent claim.” Id.

  Until the Blackstone en banc and certiorari dust settles, read footnote 2 closely and take a hard look at the government’s district court claims in your Johnson cases. If the government failed to raise a statute of limitations defense in the district court, or conceded timeliness, the Blackstone resurrection of a waived government claim may be avoidable in your case.  

                                               

For Further Reading: In the recent Newton case, a panel including Judges Berzon and Friedland rejected a Johnson claim based on the controlling Watson decision. See mem. dispo here. Notably, the Newton panel avoided the timeliness issue. See id. at 2 fn. 1.

  Of greatest interest, however, it appeared that during the oral argument Judges Berzon and Friedland may have a different view of the timeliness issue, than the Blackstone panel. See oral argument here, starting at 16:25. 

The Honorable Judges Friedland and Berzon

   Here’s hoping that reasonable minds in the Ninth will differ, on Blackstone’s new barrier to our clients’ day in court.

Image of Sir William Blackstone from https://en.wikiquote.org/wiki/William_Blackstone

Image of the Honorable Judges Friedland and Berzon from https://www.ca9.uscourts.gov/media/view_video.php?pk_vid=0000014205 

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

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Case o' The Week: Gov't Be-"Holden" to Ninth for New Rule - Holden, Health Care Fraud, and Continuing Offense

Hon. Judge Ronald M. Gould

 SOL hook means doc is cooked.

United States v. Holden, 2015 WL 7769350 (9th Cir. Dec. 3, 2015), decision available here.

Players:  Decision by Judge Gould, joined by Judges Hawkins and Ikuta.

Facts: Dr. Holden, a podiatrist, was charged in a 59 count indictment, with 56 counts of health care fraud in violation of 18 U.S.C. § 1347. Id. at *1. Holden successfully moved to dismiss many of the counts as being outside the five year statute of limitations. Id. The government superseded, alleging in a count (“revised Count 41”) one act that was within the statute of limitations. The government consolidated the other (outside-of-statute-of-limitations) offenses into this revised Count 41, and dubbed it a “continuing scheme to defraud.” Id. The district court denied Holden’s challenge to revised Count 41.

Issue(s): “We focus on Holden's challenges to the original and superseding indictments . . . .. We must decide: (1) whether revised Count 41 was barred by the statute of limitations; (2) whether revised Count 41 improperly broadened the charges against Holden; (3) whether revised Count 41 alleged an execution of a fraudulent scheme; and (4) whether the inclusion of two counts in the superseding indictment resulted in a constructive amendment to the original indictment.” Id. at *1 (footnote omitted).

“On appeal, Holden challenges the Second Superseding Indictment on several grounds. He contends that revised Count 41 should have been dismissed because it violated the statute of limitations under 18 U.S.C. § 3282(a), broadened the charges against him, and failed to allege an execution of a fraudulent scheme.” Id. at *2.

Held: “We have not previously considered whether health care fraud in violation of 18 U.S.C. § 1347 is a continuing offense.”. . . . . 

“Like the Fifth Circuit, we have already held that § 1344 is a continuing offense. See United States v. Najjor, 255 F.3d 979, 983–84 (9th Cir.2001); United States v. Nash, 115 F.3d 1431, 1441 (9th Cir.1997). We have also held that § 1344 is to be used as an interpretive model for § 1347. See United States v. Awad, 551 F.3d 930, 937–38 (9th Cir.2009). We agree with the Fifth Circuit and hold that health care fraud in violation of 18 U.S.C. § 1347 is a continuing offense.” . . . . 

“So long as the “indictment was written so as to allege only one execution of an ongoing scheme,” id., we hold that the government may charge a single health care fraud scheme in violation of 18 U.S.C. § 1347 even when several acts in furtherance of the scheme fall outside the statute of limitations.” Id. at *3.

Of Note: You win the dismissal of an indictment or of charges. How long does the government have to re-indict, if you are now outside of the statute of limitations? Holden recounts the rule, found in 18 U.S.C. § 3288: six months from dismissal. Id. at *4 (if no grand jury is sitting - otherwise, it is sixty days). Query, however, whether a new indictment under this rule “impermissibly broaden[s] the charges”– Section 3288 isn’t a blank check for a fresh start before the grand jury.

How to Use: The result of this decision of first impression is that (presumably) the jury heard a great deal of evidence about offense conduct that was clearly outside of the statute of limitations. Reading between the lines of this brief opinion, it appears that the majority of the fraudulent billing was outside of the five year statute of limitations– but the conduct was all imported into the trial through the “hook” of a within-statute transaction. With health care fraud prosecutions on the rise, Holden is a decision worth the read: it can easily broaden your client’s worries over imprudent billing decisions well beyond the statute of limitations.

                                               

For Further Reading: “What is the role of the federal government in ending mass incarceration?” That, and other questions, are tackled in a very interesting report by the PRISON Policy Initiative. Take a look at the “whole pie” representation of who incarcerates whom in the U.S.. It is a fascinating graphic of the breakdown of offenses, local, state, and federal incarceration. 

For a narrative of the incarceration report, and the pie chart “How many people are locked up in the United States?,” [A: 2.3 million on any given day!] visit the entry here.

Image of the Hon. Ronald M. Gould from http://www.advocate.com/politics/marriage-equality/2014/09/03/ninth-circuit-panel-could-bring-more-good-news-marriage

Pie Chart image from http://www.prisonpolicy.org/reports/pie2015.html

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

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Case o' The Week: Novocaine OK, Cocaine Not So Much - Mancuso, Continuing Offenses, and Drug Distribution

“Mancuso was a dentist who distributed a lot more than free

toothbrushes to his friends and acquaintances in Billings, Montana.”

Great first line in a good new case on federal drug distribution. United States v. Mancuso, 2010 WL 1811276 (9th Cir. May 1, 2013), decision available here.

Players: Decision by Judge Bea, joined by Judge Clifton and DJ Mahan.

Facts: Mancuso was a dentist in Billings, Montana. Id. at *1. He was charged in one count (Count II) with distributing over 500 grams of cocaine, beginning in 2002 through 2009. Id. He was also charged with using his home and office as places maintained to distribute cocaine. Id. “Friends” and suppliers testified at trial about Mancuso buying and sharing cocaine over the seven years, in his home, office, and at bars and ski resorts Id. at *2. “I’ll buy and you fly,” was Mancuso’s motto: he would bankroll the cocaine and share it with those who purchased it for him. Id. at *2. Mancuso was convicted after trial, after having made an unsuccessful duplicity challenge to the distribution charges in Count II.

Issue(s): “Mancuso’s duplicity claim with respect to Count II, which charged him with a single continuing offense of distributing cocaine between . . .  2002 and . . .  2009 is much stronger. Unlike possession of controlled substances with intent to distribute, it is unclear whether actual distribution may be charged as a continuing offense. This circuit has never addressed directly whether distribution is a continuing offense, although other circuits have held that it is not.” Id. at *7.

Held: “We agree with the reasoning of the Second Circuit: separate acts of distribution of controlled substances are distinct offenses under 21 U.S.C. §b841(a), as opposed to a continuing crime, and must therefore be charged in separate counts. The government argues that charging all of the acts of distribution in a single count was permissible because these acts ‘could be characterized as part of a single continuing scheme.’ We disagree. Mancuso’s various acts of distribution to random friends and acquaintances, unassociated with each other in any venture or pursuit, over the course of several years and in various locations are not sufficiently related to justify charging him with one count alleging a continuing distribution offense, as opposed with distinct counts for each act of distribution. For these reasons, we vacate Mancuso’s conviction on Count II on the grounds that it was duplicitous.” Id. at *8.

Of Note: There’s a surprising number of issues in this sole-defendant case (and not all are as nicely resolved as this “continuing offense” claim). One good result is Judge Bea’s reversal for plain error when the jury wasn’t instructed that they must find a primary purpose of Mancuso’s residence and dentist office was to distribute drugs. Id. at *8-*9. It is an honest and robust reading of the requirements for a “maintaining a place to distribute cocaine” charge (21 U.S.C. § 856(a)(1)). Worth a close read in § 856(a) cases.  

How to Use: Judge Bea’s new rule is welcome. Most obviously, it prevents the government from insulating old distribution charges from a statute of limitation challenge by lumping the offenses together as a single-count “continuing offense.” In some cases, it may also permit the defense to “throw” a hopeless distribution count at trial, focus the fight on another distribution charge, hope for a compromise verdict, and try to get under a mandatory-minimum triggering amount. Of course, the new rule doesn’t apply to conspiracy charges, or RICO, or “possession with intent to distribute,” id. at *7, but any win in the drug context is a victory worth trumpeting.   

                                               

Steven Nolder, FPD SD Ohio

For Further Reading: Former SD Ohio Fed. Public Defender Steve Nolder recently fired himself to save staff from furloughs or lay-offs. Steve was recently featured on the Daily Show, as an example of the impact of sequestration. See video here.  Last week, another Federal Defender joined the ranks of the departed. Respected Missouri Defender Ray Conrad retired years early, to lessen the financial impact of sequestration on his staff. See article here. 

   Meanwhile, no federal prosecutor in the country will be furloughed. See article here. And Justice is spending $165 million to purchase a new federal prison (so more federal inmates can be incarcerated). Id. 

Image of cocaine toothache drops from http://www.npbdentist.com/blog/post/and-you-think-you-hate-going-to-the-dentist-now.html

Image of Steve Nolder from http://www.youtube.com/watch?v=dMQQgLtnWOQ

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

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