In the Courts

Eleventh Circuit Holds That 5 Hours Is an Unreasonably Short Sentence for Class B Felony

In United States v. Crisp, ___ F.3d ___, 2006 WL 1867754 (11th Cir. July 7, 2006) the Eleventh Circuit held that a sentence of 5 hours incarceration for a violation of 18 U.S.C. ' 1014, making false statements to a financial institution, was unreasonably short despite being accompanied by a substantial order for restitution.

The defendant, the comptroller of a construction company, plead guilty to a single count of making false statements to a financial institution as part of a scheme to use false financial statements to induce a bank to extend a line of credit to the company. The pre-sentence investigation calculated an offense level of 17, resulting in a sentencing range of 24-30 months. At sentencing, the district court granted the government's motion for downward departure based on the defendant's substantial assistance, and then departed downward further, sentencing the defendant to 5 years' probation, 12 months in-home confinement, and restitution of $480,000, but awarding no confinement. The court noted that its decision was based on its opinion that enabling the defendant to pay the restitution was more important than confinement. The government objected, noting that violations of Class B felonies, such as violations of ' 1014, require incarceration. The district court modified its sentence to grant 5 hours of incarceration. The government appealed the sentence, and the Eleventh Circuit reversed, holding that a 5-hour sentence was unreasonable under the circumstances. The circuit court also noted that allowing the need for restitution to effect the court's calculation of the proper adjustment for substantial assistance was reversible error.

Prosecutors Cannot Seal Indictments to Avoid Statute of Limitations

In United States v. Gigante, __ F.Supp.2d ___, 2006 WL 1875452 (S.D.N.Y. July 5, 2006), the Southern District of New York dismissed false statement charges against a restaurant owner, ruling that the government sealed the indictments in an improper attempt to avoid the effect of the statute of limitations and that, therefore, the statute was not tolled and the charges must be dismissed.

The defendant, the operator of a popular restaurant, was investigated over a several-year period for charges related to allegedly false statements made in a bankruptcy proceeding, fraudulent concealment, and income tax evasion. At various points during the investigation, the government filed indictments, each under seal, and each filed immediately before the statute of limitations for that charge was set to expire. When the indictments were finally unsealed and the defendant moved to dismiss the charges as time-barred, the government argued that the seal tolled the statute for each of the charges. The district court disagreed. Although the government argued that it moved to seal the indictments for multiple, legitimate reasons, the court held that the principal reason for the seal was the government's desire for more time to investigate. The court held that to allow the government to evade the statute of limitations because of a desire for further investigation would render the statute of limitations meaningless and dismissed the charges with prejudice.

Repeating False Statements to Additional Investigators Establishes Additional Crimes

In United States v. Hayat, No. 05-0240, 2006 WL 1686491 (E.D. Cal. June 19, 2006), the district court found that repeating the same or similar misstatements to multiple investigators or during different stages of an investigation establishes multiple violations of 18 U.S.C. ' 1001(a).

The defendant was charged with multiple counts of violating ' 1001(a) by making false statements during the course of an FBI investigation in which he repeatedly denied having attended a jihadist camp and having received jihadist training. After a jury finding of guilt on all counts, the defendant moved to dismiss the bulk of the charges as multiplicitous, arguing that the charges all related to a single false statement that had merely been repeated. The district court disagreed, reasoning that each of the false assertions further impaired the FBI investigation because each was either made to a different investigator, or made during a different stage of the investigation, and holding that identical statements can support multiple convictions if each statement further impairs the operation of the government.

Market Value of Entire Illegal Shipment Used to Calculate Sentencing

In United States v. Norris , __ F.3d __, 2006 WL 1716912 (11th Cir. June 23, 2006), the Eleventh Circuit held, in a case of first impression, that for sentencing purposes the 'market value' of fish, wildlife, and plants involved in illegal smuggling should be calculated based on the value of the entire shipment, and not just the value of the illegal portion of the shipment.

The defendant plead guilty to smuggling orchids into the United States from Peru by mislabeling plants that could not be legally imported and mixing them with properly documented legal plants to avoid detection. He appealed his 17-month sentence, arguing that the trial court erred when it used the value of the entire shipment to determine his offense level under the Guidelines, rather than only considering the value of the illegally imported plants. The Eleventh Circuit explained that the legally imported orchids were an integral part of defendant's scheme, and therefore their shipment was relevant conduct under the Guidelines such that their value should be considered when establishing the offense level.

Eleventh Circuit Holds That 5 Hours Is an Unreasonably Short Sentence for Class B Felony

In United States v. Crisp , ___ F.3d ___, 2006 WL 1867754 (11th Cir. July 7, 2006) the Eleventh Circuit held that a sentence of 5 hours incarceration for a violation of 18 U.S.C. ' 1014, making false statements to a financial institution, was unreasonably short despite being accompanied by a substantial order for restitution.

The defendant, the comptroller of a construction company, plead guilty to a single count of making false statements to a financial institution as part of a scheme to use false financial statements to induce a bank to extend a line of credit to the company. The pre-sentence investigation calculated an offense level of 17, resulting in a sentencing range of 24-30 months. At sentencing, the district court granted the government's motion for downward departure based on the defendant's substantial assistance, and then departed downward further, sentencing the defendant to 5 years' probation, 12 months in-home confinement, and restitution of $480,000, but awarding no confinement. The court noted that its decision was based on its opinion that enabling the defendant to pay the restitution was more important than confinement. The government objected, noting that violations of Class B felonies, such as violations of ' 1014, require incarceration. The district court modified its sentence to grant 5 hours of incarceration. The government appealed the sentence, and the Eleventh Circuit reversed, holding that a 5-hour sentence was unreasonable under the circumstances. The circuit court also noted that allowing the need for restitution to effect the court's calculation of the proper adjustment for substantial assistance was reversible error.

Prosecutors Cannot Seal Indictments to Avoid Statute of Limitations

In United States v. Gigante , __ F.Supp.2d ___, 2006 WL 1875452 (S.D.N.Y. July 5, 2006), the Southern District of New York dismissed false statement charges against a restaurant owner, ruling that the government sealed the indictments in an improper attempt to avoid the effect of the statute of limitations and that, therefore, the statute was not tolled and the charges must be dismissed.

The defendant, the operator of a popular restaurant, was investigated over a several-year period for charges related to allegedly false statements made in a bankruptcy proceeding, fraudulent concealment, and income tax evasion. At various points during the investigation, the government filed indictments, each under seal, and each filed immediately before the statute of limitations for that charge was set to expire. When the indictments were finally unsealed and the defendant moved to dismiss the charges as time-barred, the government argued that the seal tolled the statute for each of the charges. The district court disagreed. Although the government argued that it moved to seal the indictments for multiple, legitimate reasons, the court held that the principal reason for the seal was the government's desire for more time to investigate. The court held that to allow the government to evade the statute of limitations because of a desire for further investigation would render the statute of limitations meaningless and dismissed the charges with prejudice.

Repeating False Statements to Additional Investigators Establishes Additional Crimes

In United States v. Hayat, No. 05-0240, 2006 WL 1686491 (E.D. Cal. June 19, 2006), the district court found that repeating the same or similar misstatements to multiple investigators or during different stages of an investigation establishes multiple violations of 18 U.S.C. ' 1001(a).

The defendant was charged with multiple counts of violating ' 1001(a) by making false statements during the course of an FBI investigation in which he repeatedly denied having attended a jihadist camp and having received jihadist training. After a jury finding of guilt on all counts, the defendant moved to dismiss the bulk of the charges as multiplicitous, arguing that the charges all related to a single false statement that had merely been repeated. The district court disagreed, reasoning that each of the false assertions further impaired the FBI investigation because each was either made to a different investigator, or made during a different stage of the investigation, and holding that identical statements can support multiple convictions if each statement further impairs the operation of the government.