Criminal Appeals, Habeas Corpus and Sentencing

Immigration Appeal - Asylum - Denial of Due Process or Abuse of Discretion to Not Permit Reopening Based on Decision to Grant Asylum in Brother's Case as New Evidence

We find unreasonable, however, the BIA's dismissal of the timely periodical article reporting violence in central Sulawesi. Manado is located in northern Sulawesi and is not so distant from central Sulawesi as to be obviously isolated from the violence reported in the submitted article. The article may undermine the IJ's conclusion, adopted by the BIA, that northern Sulawesi is a safe haven. The article should be reviewed on remand.

The BIA also never directly addressed whether the July 24, 2004 order granting asylum to Ticoalu's brother was material to Ticoalu's claim. We do not understand why this timely order was not discussed by the BIA. The brother was more severely injured by inter-religious violence in Jakarta, but he too returned to Modona afterward. It seems likely that either the IJ in the instant case or the IJ who issued Ticoalu's brother's order has erred in assessing the extent of inter-religious violence in Indonesia, and, in particular, in Sulawesi. The government suggests that Ticoalu's brother's grant of asylum is only minimally probative because the order is not accompanied by the IJ's decision and therefore the reasoning is not apparent. It would be preferable to understand the IJ's reasoning; however, this does not explain why the BIA would not consider worthy of re-examination the IJ's' potentially conflicting views of the conditions in Indonesia. The order shall be included on remand.

Ticoalu's brother's affidavit and asylum application should also be reviewed on remand. Although the affidavit and application were available at the time of Ticoalu's final hearing, these documents did not become material to Ticoalu's claim until his brother was granted asylum. The order granting asylum to Ticoalu's brother gave new weight to the assertions of these documents. The bench is likely to benefit from their inclusion on remand.


III. Conclusion
The BIA's order is affirmed in part and reversed in part. The case is remanded in accordance with this opinion.

Affirmed in part, Reversed in part, and Remanded.


Ticoalu v. Gonzales  2006 WL 3804385, *3 (C.A.1) (C.A.1,2006)

Reversible, Plain Error Under Rule 11 to Fail to Advise Defendant of Minimum Mandatory Sentence

B. Federal Rule of Criminal Procedure 11
[2] Benz also argues that the magistrate judge plainly erred in failing to advise him of the mandatory minimum sentence under section 14601 of the California Vehicle Code during the plea colloquy as required under Federal Rule of Criminal Procedure 11. Before a court can accept a guilty plea, Rule 11 mandates that the court “address the defendant personally in open court” and “inform the defendant of, and determine that the defendant understands,” inter alia, “any mandatory minimum penalty.” FED. R. CRIM. P. 11(b)(1)(I).

*3
The record shows, and the government acknowledges, that the magistrate judge did not advise Benz of the mandatory minimum jail term during the plea colloquy prior to its acceptance of the plea. The government also concedes that the magistrate judge committed error that was plain and that the error affected Benz's substantial rights. See United States v. Adams, 432 F.3d 1092, 1096 (9th Cir.2006) (holding that the court's failure to advise the defendant of a mandatory minimum fine amounted to plain error affecting the defendant's substantial rights “to enter a knowing, voluntary, and intelligent plea.”)

The government only contests whether the error seriously affected the fairness, integrity, or public reputation of the judicial proceedings. We have held that acceptance of a guilty plea affects the fairness, integrity, and public reputation of the judicial proceedings in cases in which “we cannot know whether the defendant would have pleaded differently if he had been properly informed.” Id. (citation and internal quotation marks omitted). When considering the effect of a Rule 11 error, we may look beyond the plea colloquy to “other portions ··· of the limited record made in guilty plea cases.” United States v. Covian-Sandoval, 462 F.3d 1090, 1093 (9th Cir.2006) (citation and internal quotation marks omitted) (omission in original). The government contends that Benz was aware of the statutory minimum jail term prior to entering his guilty plea, and therefore, would not have pleaded differently with proper Rule 11 notice. The government points to the following exchange between the court and government counsel immediately prior to the plea colloquy:

THE COURT: Mr. Benz, before I can take your plea in this matter, let me ask this. Is the government seeking any incarceration?

MS. CARROLL [counsel for Benz]: No, we would recommend that the appropriate punishment in this case is just a fine, and court ordered probation and-

THE COURT: Well, I know what you're recommending, but it's the government that gets to choose whether they're seeking incarceration or not. Are you doing that in this case? Is there any possibility?

MR. WHIDDEN [counsel for the government]: Yes, Your Honor. Under the 14601.2, which is what the defendant has been charged with, there is a minimum statutory of 10 days, and the government requests that be implemented because the defendant has not had his-

THE COURT: In other words, you're seeking incarceration?

MR. WHIDDEN: Of 10 days, yes, Your Honor.

The government suggests that Benz' awareness of the statutory minimum in this case is analogous to the awareness of the defendant in United States v. Ma, 290 F.3d 1002 (9th Cir.2002), in which we held that the prosecuting attorney's summarization of the appellate waiver in open court was sufficient to demonstrate the fairness and integrity of the plea proceedings. However, Ma is not in fact analogous because in that case the defendant responded affirmatively to the district court's questioning regarding whether the summary comported with her understanding of the plea agreement and also acknowledged in writing that she read and understood the plea agreement. Id. at 1005. In contrast, the magistrate judge in this case did not direct any questions to Benz regarding his understanding of the mandatory minimum sentence, and Benz never signaled any understanding of that sentence during the plea colloquy or elsewhere before pleading guilty.

*4
In this case, the prosecutor's reference to the minimum sentence failed to establish Benz's understanding because it was unclear, it was not addressed to him, and the court did not determine whether he understood the mandatory minimum. In accordance with our precedent, the prosecutor's reference to a “minimum statutory of 10 days” was insufficient to inform the defendant of the mandatory minimum sentence required by the statute. We have held that “a trial judge fails to satisfy his obligation under Rule 11 when ··· he does not fully inform the defendant of the meaning and application of legal argot and other legal concepts that are esoteric to an accused ···” United States v. Pena, 314 F.3d 1152, 1156 (9th Cir.2003) (citation and internal quotation marks omitted) (omission in original). “Minimum statutory of 10 days” is the type of legal argot that was likely esoteric to the accused in this case.

In addition, the record shows that even the magistrate judge continued to be confused about the mandatory minimum sentence requirement after the plea colloquy, as demonstrated in the following exchange:

MR. WHIDDEN: The government seeks a term of imprisonment of 10 days, and a fine of $300, for the special assessment of $10, Your Honor.

THE COURT: All right. I need-I didn't have my-I don't have my Code out here with me today. I need to know about this Code. Is there-on probation, what are the-what's the story on probation?

MR. WHIDDEN: With respect to jail time, or the probation, Your Honor?

THE COURT: Well, usually in these cases there's like a mandatory minimum, but then when you get into the probation sections, its an either/or type situation. I just don't have the statute in front of me.

This exchange shows that the magistrate judge continued to labor under the impression that probation could be imposed as a substitute to incarceration. It is difficult to conceive that Benz would have a greater understanding than the judge that a mandatory minimum prison term was required as a result of his plea.

Finally, a statement by Benz at the conclusion of the sentencing hearing also supports the conclusion that he lacked understanding of the mandatory minimum sentence.

THE COURT: Mr. Benz, you have the right to address the Court, if you'd like. Is there anything that you'd like to tell me?

THE DEFENDANT: I don't know. I think I should not go 10 days in prison, you know. I have two kids, I have a family, I have bills, you know. I don't know if you want to punish me and not my family, you know.

If Benz was aware that as a result of his plea he was required to be sentenced to a ten day prison term, it would be highly unusual for him to contend that he should not have to go to prison.

Therefore, we hold that the failure to inform the defendant of the mandatory minimum seriously affected the fairness, integrity, or public reputation of the judicial proceedings because we cannot know whether the defendant would have pled differently had he been informed of the mandatory minimum sentence as required under Rule 11.


IV. CONCLUSION
*5
We affirm the district court's holding that the magistrate judge lacked discretion to impose an alternative”like punishment” under the ACA for violations of section 14601 of the California Vehicle Code. We hold that the Rule 11 violation was plain error, REVERSE the conviction, and REMAND to the district court.



U.S. v. Benz  L 3803153, *2 -5 (C.A.9  (C.A.9 (Cal.),2006)

Medicare Fraud Not Proved When Health Care Provider Embezzeld Methadone Client Payments at Private Methadone Clinic

At issue here is whether the Government established the elements of health care fraud in violation of § 1347(2) by Jones. Section 1347(2) states:

Health care fraud

Whoever knowingly and willfully executes, or attempts to execute, a scheme or artifice-

···

(2) to obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any health care benefit program, in connection with the delivery of or payment for health care benefits, items, or services, shall be fined under this title or imprisoned not more than 10 years, or both.

18 U.S.C. § 1347(2).

In construing the elements of the statute, we begin with the language of the statute because “the ordinary meaning of that language accurately expresses the legislative purpose.” Park ‘N Fly, Inc. v. Dollar Park & Fly, Inc., 469 U.S. 189, 194, 105 S.Ct. 658, 83 L.Ed.2d 582 (1985). If the “language of a statute is clear ··· the text of the statute is the end of the matter.” Steele v. Blackman, 236 F.3d 130, 133 (3d Cir.2001). “[I]f the language is unclear, we attempt to discern Congress' intent using the canons of statutory construction.” United States v. Cooper, 396 F.3d 308, 310 (3d Cir.2005).

*3
[2] Here, Jones argues that the Government did not establish the elements of a § 1347(2) violation because “[t]he purported theft occurred only after the health care benefit was paid for and delivered,” and thus the purported theft was not “in connection with the delivery of or payment for health care benefits.” Appellant's Br. 20. In contrast, the Government argues that “a fraudulent taking from a health care provider who is providing a public or private plan or program is more than a theft from a cash register” because the money allegedly taken by Jones was intended to pay for a health care benefit program administered by Progressive. Appellee's Br. 16. We disagree with the Government and hold that it did not establish a violation of 18 U.S.C. § 1347(2) because it did not show that Jones used false or fraudulent pretenses, representations, or promises to obtain money or property from Progressive in connection with the delivery of, or payment for, health care benefits, items, or services.^FN4

The plain language of the statute clearly prohibits health care fraud by knowingly or willfully using “false or fraudulent pretenses, representations, or promises” to obtain the money or property of a health care benefit program in connection with the delivery of, or payment for, health care benefits, items, or services. See 18 U.S.C. § 1347(2). As we discussed in Nugent v. Ashcroft, 367 F.3d 162, 170 (3d Cir.2004), fraud is differentiated from theft. Under the common law and the Model Penal Code, theft is synonymous to larceny-the taking of another's property by trespass with intent to deprive permanently the owner of the property. Id. at 171. Fraud, which did not exist at common law, “means to cheat or wrongfully deprive another of his property by deception or artifice,” id. at 178 (quoting United States v. Thomas, 315 F.3d 190, 200 (3d Cir.2002)), and “implies deceit, deception, artifice, trickery,” id. at 177 (citations and quotations omitted).^FN5

Here, the Government did not establish health care fraud. Rather, the Government established only that: (1) from February 2000 to March 2004, the amount deposited into Progressive's bank account was $451,000 less than the amount received from clients; (2) the discrepancies between the amount received and the amount deposited occurred on the majority of the days on which Jones worked alone and did not occur when Jones was absent from work; (3) Jones was one of the employees that made bank deposits; and (4) Jones had made cash deposits to her bank account and cash expenditures exceeding her wages. The Government has not established, nor did it seek to establish, any type of misrepresentation by Jones in connection with the delivery of, or payment for, health care benefits, items, or services.

At oral argument, the Government claimed that Jones obtained the money from Progressive through a false promise. It argued that in accepting her responsibilities as a front counter clerk, Jones implicitly promised to deposit the full amount received by Progressive into its bank account. Essentially, the Government is arguing that every employee makes an implicit promise not to steal from the employer.^FN6

*4
The Government has stretched the statute to cover activity beyond its plain words. There was simply no type of misrepresentation made in connection with the delivery of, or payment for, health care benefits, items or services. There is no allegation that Jones said or did anything that affected the delivery of, or payment for, health care benefits, items, or services. The services were already properly paid for when Jones failed to deposit all of the money collected, and instead kept it.

Further, if there were any ambiguity as to whether the plain words of § 1347 covered the activity here, the canons of construction clearly indicate that they do not. First, the Government's reading of § 1347 is inconsistent with the statutory scheme of the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), under which § 1347 was passed. See FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 133, 120 S.Ct. 1291, 146 L.Ed.2d 121 (2000) (“It is a fundamental canon of statutory construction that the words of a statute must be read in their context and with a view to their place in the overall statutory scheme···· A court must therefore interpret the statute ‘as a symmetrical and coherent regulatory scheme,’ ··· and fit, if possible, all parts into an harmonious whole ····”) (citations and quotations omitted); Nugent, 367 F.3d at 170 (For ambiguous terms, “courts should look to the reading that ‘best accords with the overall purposes of the statute’ ····”) (quoting Moskal, 498 U.S. at 116-17)). The Act's purpose was to “combat waste, fraud, and abuse in health insurance and health care delivery.” HIPAA, Pub.L. No. 104-191, 110 Stat.1936. Accordingly, the Whited Court also noted that the Act targeted abuse of insurance payments through two statutorily distinct clauses-one for fraud (18 U.S.C. § 1347), and one for theft (18 U.S.C. § 669) ^FN7-which carry the same penalties. United States v. Whited, 311 F.3d 259, 268-70 (3d Cir.2002) (citing HIPAA, Pub.L. No. 104-191, 110 Stat.1936). Given that Congress passed an accompanying statute that explicitly covers theft, it cannot be the case that Congress intended § 1347 to be interpreted so broadly as to convert an instance of simple theft into health care fraud merely because the theft was perpetrated by an employee of a health care benefit program.

Second, were we to read § 1347 so broadly as to cover simple theft by an employee, § 669 itself would be rendered “insignificant, if not wholly superfluous.” Cooper, 396 F.3d at 312. Courts “construe statutory language to avoid interpretations that would render any phrase superfluous.” Id. (citing TRW Inc. v. Andrews, 534 U.S. 19, 31, 122 S.Ct. 441, 151 L.Ed.2d 339 (2001) (“It is a cardinal principle of statutory construction that a statute ought, upon the whole, to be so construed that, if it can be prevented, no clause, sentence, or word shall be superfluous, void, or insignificant.”)); Ki Se Lee v. Ashcroft, 368 F.3d 218, 223 (3d Cir.2004) (“We start with the principle that if at all possible, we should adopt a construction which recognizes each element of the statute.”); Acceptance Ins. Co. v. Sloan, 263 F.3d 278, 283 (3d Cir.2001) (“It is an axiom of statutory construction that whenever possible each word in a statutory provision is to be given meaning and not to be treated as surplusage.”). If a phrase, clause, sentence, or word is not to be rendered superfluous, surely a simultaneously enacted statute should not suffer such a fate.

*5
Finally, in a criminal case, a corollary principle to the rule of lenity instructs us to “give[ ] precedence to the terms of the more specific statute where a general statute and a specific statute speak to the same concern.” Simpson v. United States, 435 U.S. 6, 15, 98 S.Ct. 909, 55 L.Ed.2d 70 (1978), superseded by statute, Comprehensive Crime Control Act of 1984, Pub.L. No. 98-473, § 1005(a), 98 Stat. 2138-39, as recognized in United States v. Manna, 92 F. App'x 880, 885 (3d Cir .2004). Here, § 669 is the more specific statute, as it directly addresses theft from a health care benefit program while § 1347 addresses fraud in connection with the delivery of, or payment for, health care benefits, items, or services.^FN8 Section 1347 is simply not the proper statute under which Jones should have been charged.

For the foregoing reasons, the Government has not established that Jones committed health care fraud in violation of 18 U.S.C. § 1347(2).



U.S. v. Jones  L 3802821, *2 -5 (C.A.3  (C.A.3 (Pa.),2006)

Booker Remedy Opinion Up For Grabs?

This Fall, the Supreme Court appeared to be holding petitions that raised Booker "reasonableness" questions, pending decision of a case to further address Booker's remedies.  Then November 3, 2006 the Supreme Court granted certiorari in two cases, Rita and Claiborne v. United States, ostensibly to decide whether a sentence within the guideline range is presumptively reasonable and to decide if a sentence outside the guideline range must be supported by extraordinary factors.

The Washington Legal Foundation has filed an amicus brief in both cases. The NACDL has also filed an amicus brief, as have the ACLU and Sentencing Project and the Association of Community Defenders and Federal Defender Association.  All four briefs are available on my webpage, www.williamkent.com, in the Supreme Court Booker Update section in Adobe PDF format.

The Court may use these cases as a vehicle to revisit the Booker remedy opinion.  Given the change in the composition of the Court, this appears possible, perhaps likely. 

You may want to consider adopting these arguments in any federal sentencing or federal sentencing appeal you have upcoming.

Diaz and Booker Retroactivity

The United States Supreme Court has ordered the Solicitor General to file a response by January 8, 2007 to a petition filed in Diaz v. United States, a case out of the Second Circuit Court of Appeals.  The case presents two questions:  (1) whether Crawford v. Washington (the hearsay case) and (2) whether Booker v. United States (the federal sentencing guidelines case), should be applied retroactively for habeas corpus (2255) purposes. 

As you may know, an order that the Solicitor General respond to a cert petition is a prerequisite to certiorari being granted.  Very few cases result in orders for a response from the Solicitor General.  It does not necessarily mean that cert will be granted, but it is a harbinger that cert may be granted.  If cert is granted it could come sometime later in January.

What the Diaz case would mean, if cert is granted and the court goes in favor of the defendant and holds Booker retroactive, is that persons who were not still in the direct appeal pipeline when Booker came out, and therefore got sentenced under the mandatory guidelines, and were not able to raise the issue successfuly on appeal, could now file a 2255 habeas and raise Diaz/Booker and be entitled to its application in their 2255 proceeding.

That by itself would not cure all problems for such persons -For example, first off, there would be three or more categories of such persons in terms of the one year deadline for a 2255:

1. Those still in their one year time period before their original 2255 deadline (who in turn may have already filed a 2255 or may not, and if they have, may have already raised Booker issues or may not, and possibly may already have had their 2255 ruled on or may not - possibly six subsets);

2. Those outside the one year time limit, but who had raised a Booker claim within one year of Booker coming out and were denied; and

3. Those outside the one year time period who failed to raise a Booker claim within one year of it coming out.

The first two groups are probably able to raise a Diaz/Booker claim as soon as Diaz is ruled on (except if someone is in the first group and did not include a Booker claim and have already been denied, they may be out of luck, and if they are in the first group and did not raise a Booker claim but their 2255 has not been ruled on, the question would be whether the court would allow their 2255 to be amended, which may turn on whether they now are past the one year and whether the Government has already filed an answer, if no to both, then they can amend, if yes to either, then probably can amend only in the discretion of the court). 

Persons in the third group are probably out of luck and cannot raise a Diaz/Booker claim.

Second, even if a defendant can raise a Diaz/Booker claim, whether they will be entitled to a resentencing based on their claim may well turn on the same "jurisprudential" concerns already developed in each circuit - and this varies circuit by circuit - on whether the claim was preserved at the trial court, whether it was waived by not presenting it on direct appeal if it was preserved at the trial court, if it was not preserved at the trial court, whether the defendant can show plain error.

The bottom line is that such persons will probably be in the same position as persons in their circuit were in who were in the direct appeal pipeline when Booker was decided, meaning some could get relief, some not.  The Supreme Court may also revisit those rules in either Rita or Claiborne, two cases on review at this time.

But for those cases that fit the above criteria, there could be resentencing granted and the court would be able to impose sentence using the Booker principles, that is, advisory guidelines/reasonableness.

There is a link to a podcast of this posting below.  If you download, be patient, it is a big file.

Download diaz_booker_retroactivity.mp3

Credentials and Free Consultation Podcast

This is the first of our new series of podcasts.  This Download kent_credentials_and_free_initial_consultation.mp3  is simply my basic credentials and an invitation for a free initial consultation if you are interested in a criminal appeal or habeas petition. 

Government Failed to Sufficiently Prove Deposits Were FDIC Insured in Bank Robbery Trial Even Under Plain Error Standard

Because there was not sufficient evidence presented at trial that the bank's deposits were insured by the FDIC and because the Government's use of an affidavit to present sufficient evidence violated Sandles' right to confront witnesses against him, Sandles' conviction must be reversed. The Government must prove that the deposits of the bank were insured by the FDIC at the time that Sandles robbed the bank. See United States v. Wood, 780 F.2d 555, 556 (6th Cir.1986) (per curiam).^FN2 The Government argues that there were three pieces of evidence presented at trial from which a reasonable jury could find beyond a reasonable doubt that the bank's deposits were insured by the FDIC: (1) York's personal knowledge of FDIC stickers at the bank deposit windows; (2) York's statement that the bank's deposits were FDIC-insured; and (3) Best's affidavit that her search of the FDIC records did not reveal that the bank's insurance had expired. Only York's testimony to having seen the stickers was competent evidence, and it was not, standing alone, sufficient evidence of the bank's insured status. The Government failed to demonstrate that York had personal knowledge that the bank's deposits were FDIC-insured, and the Government's use of an affidavit to establish the FDIC-insured element violated Sandles' constitutional right to confront witnesses against him. ^FN3

FN2. Although the Government sought to prosecute this case only under the theory that the bank's deposits were insured by the FDIC, the Government could have sought to prove that the bank was a member of the Federal Reserve System, or organized or operating under the laws of the United States. 18 U.S.C. § 2113(f) includes within the definition of “bank” “any member bank of the Federal Reserve System, and any bank ··· organized or operating under the laws of the United States.” The Government in its indictment, however, only sought to demonstrate that the bank's deposits were insured by the FDIC. The district court also instructed the jury only as to the FDIC definition of “bank.” Although the Michigan National Bank was likely organized and likely operates under the laws of the United States, the Government did not seek to prove this at trial.

FN3. We consider the issue of insufficient evidence even though Sandles did not object after the close of all of the evidence. Referring to United States v. Price, 134 F.3d 340, 350 (6th Cir.1998), the Government argues that we should review this sufficiency question for “miscarriage of justice” because Sandles did not renew his motion for acquittal after the close of all evidence. On the peculiar facts of this case, however, Sandles sufficiently objected to the Government's failure to prove the bank's insured status. Sandles objected to the lack of evidence on the FDIC-insured element at the close of the Government's case and in a motion after the jury convicted him. The Government never mentioned his failure to object in its responsive motion, and the district court issued a four-page written order denying the motion. Sandles' repeated objections at trial, his motion at the close of the Government's case, and his motion after his conviction gave the district court an adequate opportunity to consider the issue and rule on the merits.

*514
[3] York's personal knowledge of one fact-that the bank holds itself out as insured-is not by itself sufficient to establish that the bank's deposits were insured by the FDIC. York's testimony that she had viewed FDIC stickers at the bank's deposit windows was admissible evidence because York had seen the stickers and thus had personal knowledge of their existence. See Fed.R.Evid. 602. But, although we have previously held that a witness's viewing of the FDIC stickers along with other evidence is sufficient for a jury to find that a bank's deposits are FDIC-insured, we have never held that the presence of FDIC stickers alone is sufficient evidence that the bank's deposits were insured by the FDIC. For instance, in United States v. Babb, 77 Fed.Appx. 761, 768-69 (6th Cir.2003) (per curiam), this court held that testimony from a Michigan National Bank employee that there were signs around the bank indicating that the bank's deposits were FDIC-insured was, among other pieces of evidence, sufficient to find that the bank's deposits were insured by the FDIC. But Babb is distinguishable because there was also evidence in that case from two other employees testifying that the bank's deposits were FDIC-insured and testimony that the word “national” in the bank's title indicated that it was insured.^FN4 See id.; see also United States v. Maner, 611 F.2d 107, 110 (5th Cir.1980) (employees testified that they had viewed certificate of insurance). Simply put, some evidence is not necessarily sufficient evidence-the Government must proffer more than evidence of FDIC stickers to prove that the bank's deposits were insured by the FDIC.

FN4. Even if is true that the word “national” in a bank's name indicates that it is insured, we may not take judicial notice of this fact because whether the bank's deposits are FDIC-insured is an element of the offense for the jury to decide. See United States v. Mentz, 840 F.2d 315, 322 (6th Cir.1988) (stating that a district court cannot take judicial notice of a bank's FDIC status without informing the jury that it can, but does not have to, accept that noticed fact).

[4] Although the Government argues that York's testimony that the bank's deposits were FDIC-insured was an additional piece of evidence that the jury could properly consider, York never established her personal knowledge of that fact. The Government is correct that a witness's unchallenged statement that the bank's deposits are FDIC-insured is sufficient evidence for a jury to find that a bank's deposits are insured by the FDIC. See Wood, 780 F.2d at 557; United States v. Gallop, 838 F.2d 105, 111-12 (4th Cir.1988). But the Government forgets that “[a] witness may not testify to a matter unless evidence is introduced sufficient to support a finding that the witness has personal knowledge of the matter.” Fed.R.Evid. 602. In both Wood and Gallop, the defendants did not argue that the witness lacked personal knowledge, and thus the statements that the bank's deposits were FDIC-insured were admissible. But, here, Sandles repeatedly objected to *515
York's lack of personal knowledge of the bank's insured status, and thus the testimony was admissible only if the Government established that York had personal knowledge that the bank's deposits were FDIC-insured. This the Government did not do.

The Government argues that York had personal knowledge that the bank's deposits were FDIC-insured by testifying that she had seen the 1987 FDIC certificate at the bank, that she knew that the bank had been insured for over twenty-three years, and that she had viewed the stickers at the bank's deposit windows. These arguments are unavailing. First, the district court correctly determined that York had no personal knowledge concerning the meaning of the 1987 insurance certificate. Moreover, the bank's insured status more than twenty years before the robbery does not establish that the bank's deposits were FDIC-insured at the time of Sandles' robbery. See United States v. Shively, 715 F.2d 260, 265 (7th Cir.1983) (“But there is no way in which a certificate of insurance issued in 1969 could be taken to refer to a bank's insured status in 1978 without any other evidence.”). Similarly, York's knowledge that the bank had been insured in the past does not mean that the bank was insured at the time of the robbery. A witness cannot establish personal knowledge of a fact by merely saying that he or she has known that fact for a long time. Such a foundation is circular and does not establish why or how the witness knows the challenged fact. Finally, knowledge of FDIC stickers at the bank does not mean that one has knowledge of the bank's insured status. See United States v. Cooper, 375 F.3d 1041, 1044-45 (10th Cir.2004) (noting that the district court held that a bank employee could not testify that she knew that the bank was insured merely because she had viewed FDIC stickers at the bank). The Government simply did not establish a proper foundation for York's testimony as to the bank's FDIC status.

[5] [6] The Government's final proffered piece of evidence-Best's affidavit-was not competent evidence because, even under plain error review, its use violated Sandles' right to confront witnesses against him. The district court found that it had admitted the affidavit of Valerie Best in a packet of papers as Exhibit 4, of which only the 1987 certificate was actually admitted when it was presented to York during her testimony; the affidavit in the packet was never mentioned until closing arguments. Best declared in her affidavit that her research of FDIC records did not indicate that the bank's insurance policy had been cancelled. We review this claim for plain error because Sandles did not object to the admission of the affidavit on the grounds that the affidavit's use violated his constitutional right to confront witnesses against him. See United States v. Matheny, 450 F.3d 633, 642 (6th Cir.2006). “When reviewing for plain error, this court must decide whether (1) there was an error in the district court, (2) the error was plain, (3) the plain error affected the defendant's substantial rights, and (4) the plain error seriously affected the fairness, integrity or public reputation of judicial proceedings.” United States v. Fraser, 448 F.3d 833, 841 (6th Cir.2006). The admission of Best's affidavit satisfies each of these four criteria.

The use of the affidavit was error because courts do not convict by affidavit. See Crawford v. Washington, 541 U.S. 36, 50-51, 124 S.Ct. 1354, 158 L.Ed.2d 177 (2004); see also id. at 53-54, 124 S.Ct. 1354 (“[T]he Framers would not have allowed admission of testimonial statements of a witness who did not appear at trial unless he was unavailable to testify, and the defendant*516
had had a prior opportunity for cross-examination.”); id. at 51, 124 S.Ct. 1354 (“ ‘Testimony,’ in turn, is typically ‘a solemn declaration or affirmation made for the purpose of establishing or proving some fact.’ ” (quoting 1 N. Webster, An American Dictionary of the English Language (1828))).^FN5 In its brief, the Government does not challenge this analysis. Instead, the Government argues that there are no Confrontation Clause problems with the admission of the 1987 FDIC certificate, a document distinct from Best's affidavit. See Gov't Br. at 23 (referring to United States v. Bellucci, 995 F.2d 157, 161 (9th Cir.1993)). We, however, are not concerned with the admission of the 1987 certificate. We are concerned with Best's affidavit, an affidavit of a Government employee used to establish a necessary fact in a criminal case for which the Government offers no exception to Crawford. Permitting the Government to rely on the affidavit during closing argument, therefore, was error.

FN5. Although the Supreme Court decided Crawford years after Sandles' trial, he is entitled to rely on Crawford. The Supreme Court has held that a defendant may rely on a case decided by the Supreme Court during the time that his case is pending on direct review if that case announces a new rule. Schriro v. Summerlin, 542 U.S. 348, 351, 124 S.Ct. 2519, 159 L.Ed.2d 442 (2004). The Supreme Court decided Crawford while Sandles' case was pending on direct appeal, and it announced a new rule by overruling Ohio v. Roberts, 448 U.S. 56, 100 S.Ct. 2531, 65 L.Ed.2d 597 (1980). See Davis v. Washington, --- U.S. ----, 126 S.Ct. 2266, 2275 n. 4, 165 L.Ed.2d 224 (2006).

The error was also plain because Crawford establishes at the time of this appeal that the affidavit was not admissible as evidence at a criminal trial. This court looks to the time of appeal to determine whether an error is plain. See United States v. Oliver, 397 F.3d 369, 379 (6th Cir.2005). By the time of this appeal, not only has the Supreme Court declared that out-of-court testimonial statements cannot be admitted against a defendant, see Crawford, 541 U.S. at 50-56, 124 S.Ct. 1354, but as far back as 1895, the Supreme Court in Mattox v. United States, 156 U.S. 237, 242, 15 S.Ct. 337, 39 L.Ed. 409 (1895), described the “primary object” of the Confrontation Clause as “prevent [ing] depositions or ex parte affidavits ··· [from] being used against the prisoner in lieu of a personal examination and cross-examination of the witness.” It was plain error to permit the Government to prove an element of a crime by affidavit.

This plain error also affected Sandles' substantial rights because, without the use of this affidavit, there was not sufficient evidence from which the jury could find that the bank's deposits were FDIC-insured. Finally, it “seriously affect[s] the fairness, integrity or public reputation of judicial proceedings,” Fraser, 448 F.3d at 841, to permit the use of an affidavit when it was included in a packet of documents, when it was not mentioned until closing arguments, and when Sandles objected as soon as he realized that the document had been admitted. For these reasons, it was error to permit the use of the affidavit, and thus it was not admissible evidence of the bank's insured status.

As one of our sister circuits has stated, “ ‘We have difficulty comprehending why the Government repeatedly fails to prove this element more carefully since the Government's burden is so simple and straightforward.’ ” United States v. Brown, 616 F.2d 844, 849 (5th Cir.1980) (quoting Maner, 611 F.2d at 112). The Government presented only one piece of competent evidence as to the bank's insured status, and that piece of evidence was insufficient to establish a necessary element of a federal bank-robbery charge. *517
Because the Government failed to present sufficient, competent evidence of the bank's FDIC status, the Government leaves us little choice but to reverse Sandles' conviction.

U.S. v. Sandles  469 F.3d 508, *513 -517 (C.A.6 (Mich.),2006)

Statements Made Under Cooperation Plea Agreement Used Against Defendant Who Withdraws from Plea Agreement After Successful Appeal

Pursuant to his conditional guilty plea, Jones submitted to an interview by FBI agents and provided a detailed statement regarding his involvement in trafficking cocaine in the Knoxville, Tennessee, area. Under the terms of the plea agreement, the statement could not be used against Jones “unless the defendant violates the terms of this agreement.” J.A. at 134. In his trial following the withdrawal of his guilty plea, the District Court allowed prosecutors to introduce Jones's FBI statement against him. Since neither of Jones's arguments provides a basis for suppressing the FBI statement, the District Court's decision to admit it was not in error.

As discussed in the previous section, when Jones withdrew his guilty plea, the plea agreement was nullified. Further, the agreement itself allowed the government to use the statement against Jones if he violated the terms of the agreement. Withdrawing his guilty plea, while completely within Jones's rights, did violate the express terms of the plea agreement, freeing the government of its contractual obligation not to use his statement against him. If Jones wanted to prevent the government from using his statement against him, he could have attempted to negotiate a provision in the plea agreement that barred use of the statement against him after a successful appeal. Alternatively, Jones could have pled guilty conditionally and chosen not to cooperate with the government. Instead, he chose to provide a statement to the government that could be used against him in the event of a successful appeal.

[4] Jones also argues that admitting his FBI statement violated Federal Rule of Evidence 410. Rule 410(3) prohibits the admission of statements “made in the course of” plea negotiations. The case law is clear that statements made to authorities pursuant to cooperation plea agreements are not protected because they are not “made in the course of plea discussions.” United States v. Marks, 209 F.3d 577, 582 (6th Cir.2000) (noting that Rule 410 was amended to overrule cases that had construed the rule more liberally). As in Marks, Jones provided information to the government pursuant to a cooperation plea agreement. Since these statements were made after and in furtherance of the plea agreement, they are not protected by Rule 410.



U.S. v. Jones  469 F.3d 563, *567 (C.A.6 (Tenn.),2006)

Guidelines Loss Amount Must Be Reduced by Value of Pledged Collateral

The Tenth Circuit has held that guidelines loss amount must be reduced by the value of pledged collateral:

II. Collateral Offset

Mr. Small next argues that the district court erred by failing to reduce the amount of loss caused by his fraudulent activities by the amount of collateral pledged to secure the loans. He contends that the loss amount is below $20 million, which results in an enhancement of 20 levels rather than 22. Aplt. Br. at 16. Both parties agree that the district court correctly interpreted U.S.S.G. § 2B1.1 cmt. n.3(E)(ii), when it held that it “must consider collateral that benefits Flagstar in determining the amount of loss. Simply put, for any collateral value that Flagstar may be entitled to claim, the amount of loss should be reduced by that collateral.” Aplee. Supp.App. at 62. Notwithstanding, the district court made no adjustment for the value of any collateral because it deemed the collateral to be worthless. The district court held that Flagstar's security interest in the mortgage loans, related documents, payments, purchase commitments, and any proceeds thereof were all valueless because the mortgages were obtained by fraud and wholly fictitious. Id. at 63-66. The district court acknowledged that Flagstar claimed a senior security interest in many of the assets purchased by Mr. Small, notwithstanding that many of those assets were then subject to a forfeiture proceeding by the government and claims by others. Id. at 63.

We think the district court's methodology is plainly incorrect-Flagstar and IMPAC have argued all along that they have a security interest in not only the funds provided to Amerifunding conspirators but also Amerifunding's negotiable instruments, notes, mortgage loans, accounts, intangibles, receivables, both then-existing and after-acquired, as well as proceeds therefrom. Aplt.App. at 41-45. They also urged a constructive trust theory. Id. at 45 n.9. Subsequently, it appears that the government settled the multi-million dollar forfeiture action in favor of various creditors of Amerifunding (including Flagstar and IMPAC), retaining only $283,000. Aplt. Br. at Ex. 2 at 2. We do not think that the collateral argument can be dismissed so easily.

Mr. Small is correct that the government had the burden of proving the amount of loss, see United States v. Rockey, 449 F.3d 1099, 1005 (10th Cir.2006), and he is also correct that the loss amount should have been reduced by the value of any collateral. An incorrect application of the guidelines requires a remand unless we can determine that the error did not affect the sentence imposed. Williams v. United States, 503 U.S. 193, 203 (1992). Although Mr. Small's explanation of how the collateral will bring the loss below the threshold of $20,000,000 is certainly lacking, the government bears the burden of showing that the error in disregarding the collateral was harmless-viz., of showing by a preponderance of evidence that substantial rights were not affected. Martinez, 418 F.3d at 1135-36. We note that one Flagstar estimate of the net loss to all the victims was $22,625,000, Aplt.App. at 37, but in light of the importance of quantifying the amount of loss, we cannot say confidently that the error was harmless given the attendant standard or review. On remand, the district court should quantify the loss reduced by any collateral and, if necessary, resentence Mr. Small.

U.S. v. Small (C.A.10,2006)

Court May Override Government Refusal to Grant Third Level of Acceptance of Responsibility

The Third Circuit recently reiterated the proposition that a sentencing judge may override the Government's refusal to move for a third level of acceptance of responsibility in certain circumstances:

On appeal, Sanders contends the government vindictively refused to move for a § 3E1.1(b) departure and that the district court erred when it concluded it could not order the departure absent a government motion. § 3E1.1 provides:

*2
a) If the defendant clearly demonstrates acceptance of responsibility for his offense, decrease the offense level by 2 levels.

b) If the defendant qualifies for a decrease under subsection (a), the offense level determined prior to the operation of subsection (a) is level 16 or greater, and upon motion of the government stating that the defendant has assisted authorities in the investigation or prosecution of his own misconduct by timely notifying authorities of his intention to enter a plea of guilty, thereby permitting the government to avoid preparing for trial and permitting the government and the court to allocate their resources efficiently, decrease the offense level by 1 additional level. U.S. Sentencing Guidelines Manual § 3E 1.1(a-b)(2006).

In relevant part, the Commentary to § 3E1.1(b) states:

Because the Government is in the best position to determine whether the defendant has assisted authorities in a manner that avoids preparing for trial, an adjustment under subsection (b) may only be granted upon a formal motion by the Government at the time of sentencing. U.S. Sentencing Guidelines Manual § 3E1.1(b) & cmt. n. 6 (2006)(citing the PROTECT Act of 2003 § 401(g), Pub.L. No. 108-21, 117 STAT. 671-72).

Despite the government's broad discretion under this provision, district courts have the power to review a prosecutor's refusal to move for a downward departure and to grant a remedy if they find the refusal a) was based on an unconstitutional motive, such as race or religion, or b) lacked a rational relationship to any legitimate government objective. United States v. Wade, 504 U.S. 181, 185-186 (1992); United States v. Abuhouran, 161 F.3d 206, 212 (3d Cir.1998). However, in recognition of the government's prerogative, the scope of a district court's review here is “extremely limited” absent a plea agreement. United States v. Isaac, 141 F.3d 477, 481 (3d Cir.1998).

The government may violate due process if it refuses to move for a departure vindictively. United States v. Paramo, 998 F.2d 1212, 1219 (3d Cir.1993), cert. denied, 510 U.S. 1121 (1994). Sanders carries the burden of proving prosecutorial vindictiveness, by adducing evidence of actual vindictiveness or evidence which generates a presumption of vindictiveness. Paramo, 998 F.2d at 1220 (internal citations omitted).


U.S. v. Sanders  L 3707843, *1 -2 (C.A.3  (C.A.3 (Pa.),2006)