No Error In Discharge of Counsel, Limitation on His Cross Examination by Codefendant

US v. Freitekh: Izzat Freitekh ran a restaurant and related businesses with the help of his family, including son Tarik. In 2020, Izzat obtained PPP loans that were used to (among other things) pay family members, with notes that such payments were for “payroll” or “paycheck,” even though none were listed in business records as being on the payroll. Later investigation showed that “all of the Loan Applications were fraudulent.” As part of the investigation, Izzat met with officials and blamed a third party, Kyber Capital, with filing the false applications, but “under scrutiny” the “story fell apart,” as Kyber Capital appeared to be a fictional creation of Tarik. As part of the investigation, Tarik’s attorney gave investigators evidence of chat logs between Tarik and an “alleged representative of Kyber.”

Izzat and Tarik were each charged with multiple counts of money laundering and conspiracy, with Tarik also charged with making false statements. Proceeding to trial, the Government sought stipulations from Izzat and Tarik with regard to documents turned over by their attorneys. They declined, leading the Government to effectively disqualify counsel as they were the only witness who could authenticate the documents. The district court agreed and delayed trial so Izzat and Tarik could obtain new counsel. At trial, both counsel testified, although questioning (both direct and cross examination) was limited by the court. Izzat and Tarik were both convicted on multiple counts and sentenced to 48 and 87 months in prison, respectively.

On appeal, the Fourth Circuit affirmed Izzat’s and Tarik’s convictions and sentences. Of the several issues raised on appeal, the primary one involved the discharge and questioning of Izzat’s and Tarik’s prior counsel. Tarik argued that he had been denied his Sixth Amendment right to counsel of choice when his original attorney was disqualified from the case, as his eventual testimony was “unwarranted and unnecessary.” The court disagreed, holding that the district court’s actions were “well within the district court’s broad discretion,” and that Tarik’s lawyer was “the only available witness who could lay the foundation of the documents” related to his false statements, thus creating a conflict of interest. Disqualification did not run afoul of the Sixth Amendment, the “essential aim” or which “is to guarantee an effective advocate . . . rather than to ensure that a defendant will inexorably be represented by the lawyer whom he prefers.” Izzat argued that his Sixth Amendment confrontation right was infringed by the district court’s limited cross examination of Tarik’s lawyer due to privilege concerns. Here the court also found no abuse of discretion, as the testimony of Tarik’s lawyer was not related to Izzat’s charges, only Tarik’s, and, even if there had been some abuse of discretion, any error was harmless. Finally, the court found no abuse of discretion in the district court allowing Izzat’s attorney to testify about how Izzat had provided him documents allegedly from Kyber Capital with instructions to turn them over to investigators, concluding that they were both relevant and not unduly prejudicial.

“Loss” Is Ambiguous in Fraud Guideline, Allowing Deference to Commentary Inclusion of “Intended Loss”

US v. Boler: For the 2016 tax year, Boler filed six fraudulent tax returns (on her behalf and for others), of which four resulted in refunds totaling more than $116,000. Two of the returns were rejected, however, which would have been worth approximately another $21,000. Boler pleaded guilty to six counts of presenting false claims (as well as making a false statement on a PPP loan application). In the PSR, she was attributed an amount of loss that included the amount refunded to her, the PPP loan amount, and the $21,000 for the tax returns that were rejected. Boler objected, arguing that the definition of “loss” in the fraud Guideline should be limited to actual loss, not intended loss as set forth in the commentary. The district court disagreed and received a sentence of 30 months in prison, the bottom of the calculated Guideline range.

A divided Fourth Circuit affirmed Boler’s sentence. Boler’s primary argument was that the common meaning of “loss” was not ambiguous and did not include intended loss. As a result, the commentary ran afoul of Kisor and could not be applied. The court disagreed with both points. First, the court concluded that “loss” is, indeed, ambiguous, pointing to the numerous variations in definitions from dictionaries and how loss plays into relevant conduct calculations. Because it was ambiguous the commentary was applicable because its “character and context . . . entitle it to controlling weight.”

Judge Quattlebaum dissented, arguing that “sometimes lawyers and judges overcomplicate things,” that “this is one of those occasions,” and that the meaning of “loss” is not ambiguous and means only actual, not intended, loss.

Court Affirms Several Supervised Release Conditions in Child Pornography Case

US v. Olson: Olson was a fifth-grade teacher who was found to have downloaded child pornography using a peer-to-peer network. Olson admitted to the downloading and to having experience with such networks due to training in systems management. He pleaded guilty to possessing child pornography and possessing child pornography involving a prepubescent minor or a minor under 12. At sentencing, the district court imposed a sentence was a 120 months in prison, a slight variance, and a 30-year term of supervised release. In doing so, the district court relied on the report of a pair of experts submitted by Olson that addressed his chances for recidivism and means to keep him from offending again.

Olson appealed. His initial appellate counsel filed an Anders brief. After reviewing the record, the court ordered the parties to file supplemental briefs addressing three issues – the adequacy of Olson’s plea, the adequacy of the district court’s explanation of its 30-year term of supervised release, and whether any of the imposed conditions of supervised release were substantively reasonable. Olson’s counsel filed a brief addressing only the first two (the Government’s brief did address all three). After appointing new appellate counsel,* the court issued another supplemental briefing order directing the parties to address the substantive reasonableness of any supervised release conditions.

The Fourth Circuit ultimately affirmed Olson’s convictions and sentence, focusing primarily on the reasonableness of several conditions of supervised release. The court affirmed a “standard” condition prohibiting communication with others engaged in criminal activity or who have a felony conviction, calling the peer-to-peer network “communal software that made his downloaded child pornography videos available to others.” The court also held that the condition has an “implicit mens rea requirement” and would not apply to situations where Olson unknowingly had such interactions. The court affirmed a prohibitions on the use of drugs, excessive use of alcohol, and drug testing, based on Olson’s experts’ stressing the importance of “sobriety” for his supervision, even though there was no evidence in the record of Olson consuming alcohol or drugs. The court also affirmed a condition allowing suspicionless searches of Olson’s home, property, and person, as related to Olson’s offense.

* Full disclosure – that was me.

Reasonable Suspicion Existed to Support Stop of Individuals Seen on Surveillance Video With Guns

US v. Brown: An officer in Richmond saw an Instagram video, posted a couple of hours before by a known gang member, in which that gang member and six others were “making hand gestures and wildly waving various firearms” in front of a building at a local apartment complex. Officers consulted live surveillance video of the complex and saw one person waring the same clothing as in the Instagram video and another carrying one of the same weapons in the same location.

When officers arrived at the complex, the two men (Brown and his codefendant McCullers) walked away, refusing to stop when ordered. One officer saw Brown “move his hands to the front of his torso while facing away” from the officer, leading to an order to “stop reaching.” Brown complied and was handcuffed, but a frisk did not produce a gun. Another officer confronted McCullers, who complied with orders to stop and get on the ground. He did have a firearm that was recovered during a frisk. More than 45 minutes passed, during which a search of the area for discarded guns turned up nothing. Before Brown was released, however, officers noticed a “bulge in Brown’s pants” that turned out to be a gun. He and McCullers were both charged with being felons in possession of firearms. They pleaded guilty to that office via conditional pleas after their motions to suppress were denied.

On appeal, a divided Fourth Circuit affirmed the denial of the defendants’ motions to suppress. First, the court held that officers had reasonable suspicion to stop Brown and McCullers and frisk McCullers (Brown didn’t challenge his frisk), as the Instagram video showed the offense of brandishing a firearm under Virginia law. In particular, as it was made by a known gang member and included the flashing of gang signs the video “was meant to communicate a message to members of other gangs in the area.” That the video was undated was unimportant, given the recent nature of its upload and the information gathered from the live surveillance video. Second, the court held that the officers did not impermissibly extend Brown’s stop. Although it took more than 45 minutes before they initially decided to release him, the court held that the record showed that the “officers acted in a reasonable manner throughout the stop.”

Judge Wynn dissented, arguing that the “majority opinion crafts out of whole cloth a new exception to the Second Amendment’s protections,” that it “apparently does not protect the individual right to keep and bear arms when an individuals lives in an area that is a ‘hot spot for gang violence.’”

Court Affirms Supervised Release Conditions Regarding Internet Use and Location Monitoring After Fourth Revocation

US v. Ellis: In 2005 and 2006, Ellis was convicted of child pornography offenses in North Carolina. In 2013, he was convicted federal of failing to register as a sex offender. He completed his term of imprisonment and began a five-year term of supervised release in June 2014. Over the next seven years, Ellis had his supervised release revoked multiple times. The final revocation included the imposition of a pair of conditions to which Ellis objected – to an Internet device restriction that required Ellis to get permission from his probation officer and a location-monitoring requirement.

On appeal, a divided Fourth Circuit affirmed Ellis’ latest revocation sentence, including the challenged special conditions of the new term of supervised release. As to the device restriction, the court rejected Ellis’ argument that the condition amounted to a complete ban on Internet usage and an improper delegation of authority to his probation officer. The condition allowed use of any device for employment without approval and, for other uses, has a properly delegated process to apply the condition to other situations. The court also rejected Ellis’ argument against the location monitoring provision, noting that it relates both to his original offense (failing to register as a sex offender) and his “longstanding inability to remain in a physical location known to his probation officer.”

Judge Gregory dissented, arguing that both conditions were greater deprivations on liberty than required.

Failure to Inform of All Elements During Guilty Plea was Plain Error, but Not Prejudicial

US v. Perdue: In 2018, law enforcement began investigating Perdue and two others for drug trafficking activities. A search of the home out of which the drugs were being sold uncovered (among other things) three firearms. All three defendants were charged with multiple offenses, including aiding and abetting each other in possessing the firearms in connection with a drug trafficking crime. Perdue pleaded guilty to all counts. At the plea hearing, the district court, in describing what the Government would be required to prove at trial, failed to explain that the Government would have to prove that “the defendants had advance knowledge that a firearm would be possessed by a confederate in furtherance of the drug crimes.” Perdue admitted to owning and possessing a Ruger handgun as part of his plea. He was sentenced to a total term of 195 months in prison.

In 2020, Perdue filed a § 2255 motion that ultimately resulted in the district court entering an amended judgment to allow him to pursue a direct appeal. As part of those proceedings, however, Perdue’s trial counsel submitting an affidavit stating that the decision to plead to all counts without an indictment was Perdue’s alone and that he “made clear to me that he would not consider a plea agreement that required his cooperation against other co-defendants.”

On direct appeal, the Fourth Circuit affirmed Perdue’s convictions and sentence. Perdue argued that the district court’s failure to explain the advance knowledge element at the time of his guilty plea required vacation of his firearm offense. Applying plain error, the court disagreed. The district court erred and that error was plain, the court concluded, rejecting a Government argument that the plea should be read as being one of principal, rather than accomplice, liability. However, Perdue could not show prejudice because he could not show a reasonable probability that he would have not pleaded guilty had he been properly instructed.

Possession of Firearm With Obliterated Serial Number Not Protected by Second Amendment

US v. Price: Price was involved in a traffic stop, during which a firearm was recovered from him, a firearm with an “obliterated” serial number. Due to prior convictions, he was charged both as a felon in possession of a firearm under 18 U.S.C. § 922(g)(1) and possession of a firearm with an obliterated serial number under § 922(k). Price moved to dismiss both counts, arguing that under the Supreme Court’s decision in Bruen both statutes violated the Second Amendment. The district court disagreed as to § 922(g)(1), but granted the motion as to § 922(k), concluding that Price’s possession of the firearm was conduct covered by the Second Amendment and that no analogous regulation was demonstrated in the historical record.

The Government took an interlocutory appeal. After an initial oral argument before a panel, the court sua sponte set the case for rehearing en banc and reversed the district court’s grant of Price’s motion to dismiss on the § 922(k) count.

Writing for the court, Judge Wynn (joined by eight others) concluded that Price’s possession of the firearm was not conduct that fell within the protection of the Second Amendment. In other words, his challenge failed at the “first step” of the Bruen analysis, relieving the court of the need to dive into the issue of whether the historical record demonstrated the necessary analogous regulation. Instead, the court concluded that because there is no reason for a law-abiding person to knowingly possess a firearm with an obliterated serial number such firearms were not in “common usage.” In doing so, the court concluded that at least some historical analysis was involved in the first step analysis.

Judge Niemeyer concurred, arguing that the simple possession of the firearm did fall within the ambit of the Second Amendment, but that Price’s challenges fails at the second step (where questions of history are properly analyzed). Judge Agee also concurred, arguing that because Price was a felon, and thus couldn’t possess a firearm anyway, § 922(k) could not be unconstitutional as applied to him. Judge Quattlebaum (joined by Judge Rushing) also concurred, largely along the same lines as Judge Niemeyer.

Judge Gregory dissented, criticizing the majority for being unable to “fathom why a person would own a firearm with an imperfect serial number for any non-criminal purpose.” He continued that the majority opinion departed from the Bruen analysis and “could also have a disparate impact that may not be apparent.” Finally, Judge Richardson also dissented, arguing that the Government had failed bear its burden of showing that § 922(k) survived a Second Amendment challenge.

Evidentiary Hearing Required to Determine if Defendant Agreed to Concede Guilt on Some Counts

US v. Hashimi: In the beginning, Hashimi was charged with two drug counts related to a drug conspiracy and two counts related to the assault and kidnapping of his wife. He had a poor relationship with his counsel, who assured the district court (in the context of motions for new counsel) that Hashimi had “been presented with numerous plea offers and had rejected them all of his own volition.”

At trial, after the close of evidence, counsel raised the possibility of Hashimi pleading guilty to the two kidnapping-related counts while taking the drug counts to the jury. The Government rejected that idea, its position being Hashimi could either plead guilty to all four counts or to none. The district court agreed. “Hashimi never confirmed or denied his desire to plead guilty to any of the charges against him.” During closing argument, counsel then conceded that Hashimi had “assaulted and kidnapped his ex wife,” but was not guilty of the drug charges. “It did not work” and Hashimi was convicted on all counts and sentenced to 300 months in prison.

On direct appeal, Hashimi argued (among other things) that he had been denied effective assistance of counsel when his attorney conceded his guilt on two counts “during closing argument without Hashimi’s consent.” The court affirmed the convictions, holding that there may have been strategic reasons for such a decision and therefore “counsel’s ineffectiveness does not appear on the face of the record” and Hashimi would need to raise it in a §2255 motion. Months later, the Supreme Court in McCoy v. Louisiana, “added a new item to the list of fundamental decisions reserved to the client,” namely “the decision to maintain innocence at trial.” Hashimi’s case was remanded in light of McCoy, but the Fourth Circuit again affirmed his conviction, holding that the record was silent as to “whether Hashimi consented or objected to his counsel’s concession of guilt.”

Direct appeal complete, Hashimi filed a §2255 motion in which he asserted both that his counsel failed to consult with him about his case and failed to obtain his consent to concede. The district court denied the motion without holding an evidentiary hearing, concluding that Hashimi had asserted “only that he did not give permission for a concession of guilt – not that he had expressly denied that permission.” Without that, counsel’s conduct did not run afoul of McCoy.

On appeal this time, the Fourth Circuit vacated the denial of Hashimi’s §2255 motion. Noting that, without an evidentiary hearing and findings, it was required to accept Hashimi’s assertions as true, the court concluded that he did make out a violation of McCoy, for two reasons. First, McCoy requires “consultation between defense counsel and client, in which defense counsel may try to persuade a client that conceding guilt is or has become the best course.” Per Hashimi’s motion, no such consultation occurred in his case. That alone would require a new trial. Second, however, the court rejected the district court’s parsing of Hashimi’s assertion as showing only a lack of permission for a concession, not a denial of permission. The record, as it stood, showed as least a “possibility” that “Hashimi did expressly deny permission for the concession.” As a result, the case was remanded to the district court for an evidentiary hearing.

Court Lacks Jurisdiction for Interlocutory Appeal of Rule 41 Decision

In re: Search Warrants Issued February 18, 2022: In early 2022, FBI and IRS agents started investigating Doe (apparently an attorney). They obtained three search warrants for his home, office, and vehicle, and set up a “filter protection” scheme that would protect any privileged information that had been seized. After negotiations between the agents and Doe’s lawyer broke down, Doe went to a magistrate judge to seek a stricter protocol. The magistrate judge denied the request, which it styled as a request for a preliminary injunction.

Doe sought review of the magistrate judge’s decision from the Fourth Circuit, but the court dismissed the appeal, concluding that it lacked jurisdiction. Regardless of how Doe’s request was labelled, the court concluded that it was based on Federal Rule of Criminal Procedure 41(g), which, it noted, “are rarely final orders.” That was true in this case, as Doe’s motion sought neither the return of property nor could he show that it was “in no way tied to the prosecution” against him. The matters Doe was concerned about could be fully reviewed after a final order was entered in the criminal case (whatever that outcome might be).

Post-Trial Motion for Acquittal Preserves Issue for Appellate Review

US v. Watkins: Watkins, an Atlanta-based musician, was involved with Cloud (and associates) in North Carolina, providing drugs that they would sell. Watkins, along with eight others, was charged with conspiracy and convicted after a three-day trial. At the end of the Government’s case, Watkins made a motion for a judgement of acquittal, which was denied. He did not renew the motion at the close of all evidence, but did file a written motion after trial (which was also denied). He was sentenced to 120 months in prison.

On appeal, the Fourth Circuit affirmed Watkins’ conviction and sentence. Watkins challenged the sufficiency of the evidence against him, which the court concluded was sufficient to sustain the conviction. It did so after concluding that Watkins’ post-trial filing of a motion for a judgement of acquittal preserved the issue, even though he did not renew the original motion at the close of all evidence. Watkins also challenged the district court permitting the Government to cross examine his wife about certain lyrics that Watkins wrote in some of his songs. The court found no abuse of discretion, agreeing with the district court that Watkins had opened the door to such questioning when he asked his wife about his character during her direct testimony.

Border Search Exception Allows Seizure of Electronic Devices With Certain Nexus to Suspected Criminal Activity

US v. Nkongho: Starting in 2016, various persons ran a scheme in which they posed as US Navy personnel to procure equipment without actually paying for it. The mastermind of the scheme was arrested, imprisoned, and deported to Nigeria, but his wife, Nkongho, remained in the United States, where she “handled the money for the organization.” She, too, came under investigation and, when returning from a trip to Cuba with her children, was stopped by authorities, who seized several electronic devices. After debating (for nine days) whether a warrant was needed to search them, warrants were obtained. Evidence from the devices later played a key part in the Government’s evidence at Nkongho’s trial. She was convicted of conspiracy to launder money and money laundering related to the scheme. She was sentenced to 24 months in prison, a significant downward variance.

On appeal, the Fourth Circuit affirmed Nkongho’s convictions and sentence. Nkongho’s primary argument on appeal was that the district court had erred when it denied her motion to suppress the evidence recovered from the devices that had been seized when she returned from Cuba. Nkogho conceded that there was probable cause to seize her devices for committing a domestic offense – which would not trigger the border exception to the Fourth Amendment – there was not similar evidence of international offenses “tethered enough to the exception’s justifications of stopping transnational crime.” The court disagreed, concluding that there was “probable cause to believe that Nkongho was part of an international munitions export scheme,” noting that such cause was found nine days later when the search warrants were obtained. The court also rejected the argument that the obtaining of the warrants was untimely, given that the reason for the delay was uncertainty as to the law regarding the necessity of warrants in that context.

Court Affirms Child Pornography Convictions Against Fourth Amendment, Instructional Challenges

US v. Sanders: In 2019, a foreign law enforcement agency tipped the FBI to an IP address that had been used to access child pornography. A second report assured that the information was “lawfully obtained” and had not involved the interference with any computer in  the United States by the foreign entity. The FBI investigated and eventually tracked the IP address to the home where Sanders lived with his parents. They executed a search warrant there, seizing numerous electronic devices. Sanders gave a statement during the search in which he admitted accessed child pornography using a TOR browser. In addition to videos of child pornography, further investigation of the devices showed that Sanders has messaged a half-dozen boys to send pictures and videos of themselves nude to him. Sanders was charged with a dozen charges relating to the production, receipt and possession of child pornography. He was convicted on all counts at trial and sentenced to 216 months in prison.

On appeal, the Fourth Circuit rejected several challenges by Sanders and affirmed his convictions. One notable issue was Sanders argument that the district court erroneously denied his motion to suppress the evidence seized at his home because the affidavit in support of the search warrant was insufficient. The court disagreed, holding that although evidence of one click on a website where child pornography was available would not sufficient to support probable cause, there was additional evidence here (particularly a “disclaimer” on the site’s homepage that made clear what kind of material was available on it) that demonstrated probable cause. Another notable issue, or collection of issues, were those related to whether Sanders either could present evidence about or have the jury instructed on whether the minors he was involved with were willing participants in the generation of the images related to them. The court rejected Sanders’ definition of “use” in the relevant statutes to require the Government to prove the defendant had “overcome the will” of the minor involved. Finally, the court found no error in the district court instructing the jury on “lascivious exhibition of the genitals” by reference to the Dost factors, concluding that the district court had not required their use, only laid them out as potentially helpful guideposts.

The same panel released a separate opinion in a related civil case on the same day, in which Sanders challenged the forfeiture of the electronic devices seized during the investigation. The court affirmed the district court’s rejection of Sanders’ argument that the forfeiture should be limited to contraband images on the various devices, rather than the complete devices themselves. The plain language of the relevant statute, the court ruled, does not permit such parsing of materials in a forfeiture context.