Tag Archives: appeals attorney

Civil RICO Racketeering Claims

Published By Stephen Preziosi

LLM Bar Exam, LLC v. Barbri, Inc.
No. 17-3463-cv
Second Circuit Court of Appeals
Decided: April 25, 2019

The Alleged Conspiracy: Bribery, Monopolization, Kickbacks and Racketeering

In 2016, LBE, a bar exam prep company, filed a lawsuit against Barbri and several law schools claiming conspiracy to restrain trade, monopolization, and attempted monopolization in violation of the Sherman Act, 15 U.S.C. §§ 1 and 2, and racketeering in violation of the Racketeer Influenced and Corrupt Organizations (“RICO”) Act, 18 U.S.C. § 1962(c). Unpersuaded, the District Court dismissed each of LBE’s claims of racketeering.

LLM Bar Exam, LLC (“LBE”) is a company that offers courses for foreign attorneys who wish to obtain Master of Law, or “LL.M.” degrees from U.S. law schools. Barbri, Inc. provides bar prep courses to U.S. law school graduates as well as LL.M. graduates and is a direct competitor of LBE.

LBE filed a racketeering lawsuit against Barbri, alleging they were forced out of business due to a conspiracy between and among Barbri and several law schools, including Harvard, NYU, and Columbia. LBE alleged that Barbri maintained a monopoly over the market by donating money to schools, bribing their administrators, and hiring faculty in exchange for promotion of Barbri’s products.

LBE appealed to the Second Circuit, challenging the dismissal of its Sherman Act and RICO claims. As to the RICO claim, LBE asserted that there were sufficient facts to show that defendants-appellees engaged in “a pattern of racketeering activity” within the meaning of RICO for the “common purpose” of using “dishonest means to wrest customers from LBE in the LLM Market.”

Ultimately, the Second Circuit upheld the District Court’s decision to dismiss LBE’s complaint because they failed to state a plausible claim of relief. The Court provided no further analysis.

Civil RICO Racketeering Claims: Strict Requirements Limit Success

On the criminal side of RICO, a convicted defendant can receive a lengthy prison sentence. However, criminal liability is not the only potential consequence of a RICO violation. Alleged victims of racketeering may bring a civil suit as a mechanism for receiving compensation for injury.

A successful RICO claim must demonstrate:

  • tangible financial loss;
  • a pattern of criminal activity (although a conviction is not necessary);
  • the claim is brought within the four-year statute of limitations.

RICO claims are often dismissed by courts because plaintiffs fail to show the defendant actually committed racketeering activities. Thus, the standard for a successful civil RICO suit is rarely met. Predicate acts that are required in RICO claims include extortion, kickbacks, money laundering, bribery, wire and mail fraud and more.

RICO Racketeering Claims under 18 U.S.C. § 1962(c)

Among other claims, LBE alleged Barbri engaged in affecting interstate or foreign commerce by violating section § 1962(c) of the RICO Act. 18 U.S.C. § 1962(c) makes it illegal for a person who is employed by or associated with an enterprise engaged in or affecting interstate or foreign commerce to conduct or participate in the conduct of the enterprise’s affairs through a pattern of racketeering or collection of unlawful debts.

For a successful showing of a RICO violation under §1962(c), the plaintiff must demonstrate the defendant conducted or participated in conduct, that the conduct was of an enterprise, and that there was a pattern of racketeering activity.

A showing of a “pattern” of racketeering activity requires proof that the acts are related to and that the acts posed a threat of continued criminal activity. “Related” acts will generally have the same goal, participants, or victims, or methods of commission. The activity is “continuing” where the conduct occurred during the course of a confined period of time or past conduct that threatens future repetition.

Under RICO, an “enterprise” is defined as any group of individuals associated in fact. An association-in-fact is proved by evidence of an ongoing organization (formal or informal) and by evidence that the associates function as a continuing unit. A civil RICO complaint must show that each defendant participated in the operation of the enterprise.

To decide whether a pattern of racketeering activity exists, courts have historically considered the following factors:

  • the number of victims
  • the nature and quantity of predicate acts
  • how long the activity took place
  • whether there were distinct injuries
  • the quantity of distinct transactions involving the conduct

LBE’s Unsuccessful RICO Claims

Although the Second Circuit does not make clear why, specifically, LBE failed to establish a showing that Barbri engaged in a pattern of racketeering activity, the District Court’s decision outlines reasons for dismissal.

As an initial matter, the District Court addressed the vagueness of the complaint alleging wire and mail fraud communications, noting the complaint failed to specify the fraudulent content of the communications, who made the statements, and when the statements were made. “RICO claims premised on mail fraud must be particularly scrutinized . . . ,” the Court held. Like many other civil RICO claims, LBE’s complaint failed to meet the strict requirements of demonstrating a pattern of racketeering.

The District Court further found that LBE failed to show that the defendants formed an enterprise-in-fact because the complaint did not indicate they acted as one unit. Moreover, the complaint omitted any evidence that each individual participated in the operation it alleged.

Chances of winning a RICO civil suit are slim. As this case demonstrates, courts scrutinize civil RICO claims with careful eyes and the requirements for showing sufficient evidence for a RICO violation exists are extensive.

Unconstitutional Federal Statute Calls Supreme Court to Protect Sixth Amendment Right to Trial by Jury

Published By Stephen Preziosi

United States v. Haymond

No. 17-1672

U.S. Supreme Court

Decided: June 26, 2019

ISSUE

Whether 18 U.S.C. §3583(k)’s requirement that a district court impose a mandatory minimum prison sentence by a preponderance of the evidence for certain offenses committed during supervised release violates the constitution’s guarantee of a trial by jury. 

HOLDING

The U.S. Supreme Court held that the 5-year mandatory minimum sentence under 18 U.S.C. §3583(k) is unconstitutional unless the charges can be proven by a jury beyond a reasonable doubt.

FACTS OF THE CASE

Haymond was found guilty of possessing child pornography by a jury and was sentenced to 38 months in prison followed by 10 years of supervised release. During his supervised release, the government discovered what appeared to be child pornography on Haymond’s phone. As a result of the violation, the government sought additional incarceration for Haymond.

A district judge found that Haymond knowingly possessed the images depicting child pornography by a proponderence of the evidence. Under 18 U.S.C. §3583(k) of the Sentencing Reform Act of 1984, a judge is required to impose a minimum prison sentence of five years where a defendant has violated supervised release by committing certain offenses. Relevant to this case, one of those listed offenses is possession of child pornography. Although reluctant to do so, the district judge imposed the mandatory 5-year sentence.

The Tenth Circuit found that §3583(k) violated the Fifth and Sixth Amendments, acknowledging that while a jury previously convicted Haymond by a reasonable doubt resulting in a 0-10 year sentence, §3583(k) allowed Haymond to face a higher mandatory minimum only by a judge’s finding of a preponderance of the evidence. This, the Tenth Circuit held, violated Haymond’s constitutional right to a trial by jury. Haymond was resentenced without regard to §3583(k)’s provisions, and the U.S. Supreme Court was asked to resolve the question of the statute’s constitutionality.

COURT’S ANALYSIS

The Fifth and Sixth Amendment guarantee the accused the right to a trial by an impartial jury and due process of law in criminal proceedings in the United States. A jury’s finding of guilt must also be proven beyond a reasonable doubt.

Only after a jury finds a defendant guilty of an offense beyond a reasonable doubt may the judge impose a penalty within the range allowed for that offense. The Supreme Court recognizes that “even when judges [enjoy] discretion to adjust a sentence based on judge-found aggravating or mitigating facts, they [cannot] ‘swell the penalty above what the law [provides] for the acts charged.’” 588 U.S. ___ (2019) quoting Apprendi v. New Jersey, 530 U.S. 466 at 519 (Thomas, J., concurring). 

Here, §3583(k) permits just that. Only as a result of the district judge’s finding of the defendant’s guilt by a preponderance of the evidence is the five-year mandatory minimum imposed. Contrary to the government’s argument, this new sentence was not authorized by the jury’s verdict.

The Supreme Court  already held a similar statutory scheme allowing judges to impose sentences above the allowed maximum unconstitutional. In Apprendi v. New Jersey, a judge sought to impose a longer sentence than the prescribed maximum after a jury trial pursuant to a statute that permitted him to do so under a preponderance of the evidence standard. The Court held this scheme unconstitutional and later applied the same rule when it held a similar sentence enhancement unconstitutional in Alleyne v. United States, 570 U.S. 466.

Section 3583(k) essentially permits district courts to impose a new and potentially harsher punishment for a new offense. By allowing a judge to increase “‘the legally prescribed range of allowable sentences’ [is] in violation of the Fifth and Sixth Amendments.” 588 U.S. ___ (2019) (quoting Alleyne at 115). The Supreme Court vacated Haymond’s judgment, holding §3583(k) unconstitutional.

government breached plea agreement

Post-Incarceration Supervised Release Tolled During Pre-Conviction Detention

Published By Stephen Preziosi

Mont v. United States
No. 17-8995
U.S. Supreme Court
Decided: June 3, 2019

Issue

Whether a convicted criminal’s period of supervised release is tolled during pretrial detention for a new criminal offense.

Holding

The U.S. Supreme Court held that pretrial incarceration later credited as time served for a new conviction is imprisonment in connection with a new conviction and thus tolls the supervised release term under §3624(e), even if the court does not make the tolling calculation until after the conviction. 

Facts of the Case

While serving a 5-year term of supervised release following a federal prison sentence, petitioner Mont was arrested on state drug charges. At that time, about nine months of supervised release remained. 

Eventually, Mont pled guilty to state charges and admitted to violating his federal supervised release conditions. The state court sentenced Mont to six years’ imprisonment and a few days later the District Court issued a warrant for the supervised release violations after previously declining to do so. By the time Mont was sentenced on the state charges, the original term of his supervised release had expired. Mont argued the District Court had no jurisdiction over him because the federal warrant was issued after his supervised release was set to expire.

The District Court rejected Mont’s argument, ruling that it had jurisdiction under 18 USC §3583(i), and sentenced Mont to an additional 42 months in prison. The Sixth Circuit affirmed the District Court’s decision but on grounds that Mont’s supervised release period had been tolled under §3624(e) while Mont was incarcerated while awaiting sentencing. The U.S. Supreme Court granted certiorari. 

Court’s Analysis

18 U.S.C. §3624(e), under which the District Court based its decision provides:

“. . . A term of supervised release does not run during any period in which the person is imprisoned in connection with a conviction for a Federal, State, or local crime unless the imprisonment is for a period of less than 30 consecutive days.”

The Supreme Court has previously recognized that the phrase “in connection with” bears a broad interpretation. See Merrill Lynch, Pierce, Fenner & Smith Inc. v. Dabit, 547 U.S. 71, 85 (2006). The Court holds that pretrial detention of a conviction is “in connection with” the conviction. Had Congress intended to preclude pretrial detention, the Court reasoned, it would have used language such as “following a conviction” or “after a conviction.” The use of the language “in connection with a conviction” assumes pretrial incarceration. 

Moreover, the Court recognizes supervised release as a means to facilitate a “transition to community life.” United States v. Johnson, 529 U.S. 53, 59-60 (2000). Therefore, according to the Court, incarceration should not substitute supervised released and, in this case, Mont’s pretrial detention should not be credited toward his remaining supervised release. Instead, Mont’s supervised release should be tolled as per Congress’s original intent. If supervised release were not tolled, the ultimate purpose of supervised release would be frustrated. By tolling the supervised release by his pretrial detention, the District Court ensures Mont serves five years as a transitional period into a law-abiding life.

Indicted to Convicted: Second Circuit Sets Standard for Indictment Amendments and Variances

Published By Stephen Preziosi

United States v. Dove

No. 14-1150-cr

Second Circuit Court of Appeals

Decided on March 6, 2018

Federal Appeals Attorney in the Second Circuit Court of Appeals

Issue: Whether (1) an indictment is constructively amended where the majority of names of co-conspirators are removed from jury instruction and where the government presents evidence of minimal involvement in the conspiracy on the part of the defendant; (2) whether there is prejudicial variance from an indictment when the evidence at trial demonstrates multiple conspiracies although the indictment charged one large conspiracy; (3) whether the evidence was sufficient to convict the defendant of conspiracy; and (4) whether the district court erred in sentencing the defendant as a career offender based on two New York first and second-degree robbery convictions.

 

Held: The Second Circuit held that (1) neither the redaction of co-conspirators’ names in jury instruction nor evidence demonstrating the defendant’s minimal involvement constructively amended the indictment; (2) no prejudicial variance from the indictment occurred, even though the government presented evidence of multiple conspiracies; (3) evidence was sufficient to convict the defendant of conspiracy even though evidence only showed the defendant interacted with one co-conspirator; and (4) the defendant was properly sentenced as a career offender.

 

Facts: Dove was convicted of conspiracy to distribute and possess with intent to distribute heroin and cocaine in violation of 21 U.S.C. § 841(b)(1)(C) and 846. He was also charged with intent to distribute cocaine, in violation of 21 U.S.C § 841(a)(1) but was acquitted of that count.

 

The government’s primary evidence was testimony of undercover agents and video recordings of Dove participating in a drug transaction. The evidence presented at trial only included interactions between Dove and co-conspirator Ingram, although the indictment charged a six-member conspiracy. Out of the 30 transactions that took place throughout the operation, Dove was only involved in one. At trial, the district court gave jury instructions, in which the names of four of the alleged co-conspirators were redacted, leaving only the names of Dove and Ingram. Dove moved for acquittal and, alternatively, moved to vacate the judgment, claiming that the evidence was insufficient to convict him of conspiracy. The court denied both motions.

 

At sentencing, the court found that Dove qualified as a career offender under U.S.S.G. § 4B1.1, which resulted in a sentence of 72 months and five years of supervised release. Dove appealed both his conviction and sentence.

 

 

Analysis: Dove argued on appeal that 1) the indictment was constructively amended, 2) the government’s evidence constituted a prejudicial variance from the terms of the indictment, 3) the evidence was insufficient to support Dove’s conviction, and 4) the district court erred in sentencing him as a career offender.

 

Constructive Amendment of the Indictment

 

The conspiracy involved six individuals. However, the district court’s jury instructions removed the names of four co-conspirators and the government’s evidence only linked Dove to Ingram and no other co-conspirators. Dove claimed this constructively amended the indictment, but the Second Circuit rejected the argument, holding that neither the jury instructions nor the government’s evidence altered an essential element of the charges in the indictment.

 

When the charge upon which the defendant is tried differs significantly from the charge for which the grand jury voted, the indictment has been constructively amended. A constructive amendment occurs when an additional element is added or an element essential to the crime charged is altered. United States v. Agrawal, 726 F.3d 235, 259 (2d Cir. 2013).

 

The Second Circuit first considered whether the names of four co-conspirators, which were removed from the district court’s jury instructions, could have been essential to the charges set forth in the indictment. Pointing to United States v. Harris, 8 F.3d 943, 946 (2d Cir. 1993), in which this Court held that “an individual need not know the identities of all coconspirators in order to be found guilty of being a member of a conspiracy,” the Second Circuit determined that the inclusion of the other co-conspirators’ names was not essential and, thus, did not constructively amend the indictment. In addition, the Court concluded that the names did not constitute a necessary element by setting the minimum size of the conspiracy because the indictment specified that Dove and Ingram conspired “with others.”

 

The Second Circuit was also unpersuaded by Dove’s argument that the indictment was constructively amended by the government’s evidence at trial. The evidence demonstrated that: Dove participated in one transaction; the transaction was the only one out of the 30 that involved cocaine unlike the others, which involved heroin and pills; there was no evidence linking Dove to other members of the conspiracy besides Ingram; and there was no evidence that investigators were aware of Dove prior to the last day of the conspiracy.

 

While the Second Circuit conceded that Dove played a minor role in the conspiracy, the Court declined to agree that the evidence resulted in a constructive amendment from the conduct considered by the grand jury. The evidence at trial included Dove’s agreement to sell cocaine and that Ingram had informed the agent that Dove had sources for heroin (in Dove’s presence). The Court determined that this evidence was consistent with the terms of the indictment voted on by the grand jury.

 

Prejudicial Variance from the Indictment

 

Dove also argued that the evidence presented at trial, demonstrating multiple conspiracies involving Ingram, resulted in prejudicial variance from the indictment because the indictment alleged a single larger conspiracy. A variance occurs when the charging terms of the indictment are left unaltered, but the evidence at trial proves facts materially different from those alleged in the indictment. Reversal is only warranted for a variance if the defendant shows both: (1) the existence of a variance, and (2) that “substantial prejudice” occurred at trial as a result.

 

The government did not contest that there was a variance in Dove’s trial. However, the question that remained was whether the variance was prejudicial. Dove argued that he was not given proper notice of the charges against him pursuant to the Grand Jury Clause. However, the Second Circuit pointed out that Dove failed to demonstrate that he met the prejudice factors outlined in United States v. McDermott, 245 F.3d at 139 (2d Cir. 2001). In any event, the Court found that Dove had sufficient notice from the indictment that the government would attempt to prove multiple conspiracies.

 

Sufficiency of the Evidence

 

Although the evidence adduced at trial only showed that Dove was involved in “a minimum agreement between Dove and Ingram to engage in transactions,” the Second Circuit determined the evidence was sufficient to convict Dove of conspiracy.

 

Dove asserted that the evidence was insufficient due to the “buyer-seller” exception, which provides that “the mere purchase and sale of drugs does not, without more, amount to a conspiracy to distribute narcotics.” However, the Court determined that this exception was inapplicable in Dove’s case because the evidence demonstrated that Dove and Ingram: (1) enjoyed mutual trust and extensive cooperation; (2) had a history of standardized dealings in wholesale quantities of heroin; and (3) were planning future sales of wholesale quantities of heroin plainly not intended for personal use.

 

Career Offender Designation

 

Finally, the Second Circuit held that Dove was properly sentenced as a career offender. Dove argued that his New York convictions for first and second-degree robbery were inappropriately categorized as crimes of violence under the Career Offender Guidelines. However, recent Second Circuit case law renders Dove’s New York robbery convictions violent within the meaning of U.S.S.G. § 4B1.1.