Supreme Court Takes On “Another” in Upholding Hobbs Act Conviction

The Hobbs Act – a law promulgated in 1946 to deal with the infiltration of racketeering activity in labor unions – got a “W” in its column yesterday with the Supreme Court’s issuance of Ocasio v. United States.  Justice Alito, writing for the 5-3 majority, affirmed the convictions of a Baltimore police officer for Hobbs Act extortion and conspiracy to commit the same for accepting kickbacks in exchange for directing cars post-accident to his co-conspirator’s auto body shop for repairs.

The Hobbs Act is a vehicle typically used by federal prosecutors to charge a public official “who took ‘by colour of his office’ money that was not due to him for the performance of his official duties,” or more simply put, the Hobbs Act provides for the prosecution of law enforcement officials and politicians who accept bribes or extort others via their professional office.  Evans v. United States, 504 U.S. 255, 260 (1992). The definition of extortion under the Hobbs Act requires the obtaining of property (think money, gifts, entertainment, etc.) from another with his consent.  Id. at 265.

In a strict constructionist argument that would have made the late Justice Scalia proud, Ocasio argued that the Government did not carry its burden on this requisite element of the Hobbs Act by failing to prove that he had obtained property “from another.”  Sure, Ocasio accepted money in exchange for routing beat up cars to his co-conspirator’s repair shop, but he shrewdly pointed to the fact that he accepted the said property, i.e. his kickbacks, directly from his co-conspirator and not from another individual outside the conspiracy.  Therefore, he concluded that although his co-conspirators paid him off, there was no agreement – and could be no agreement – to obtain property from another individual or individuals. Clever argument?  Yeah.  Successful?  No.

Justice Alito rejected this argument, in sum, agreeing with the Government that Ocasio’s acceptance of kickbacks from his conspiring bribe payors, satisfied the “from another” element of the Hobbs Act.  Any suggestion proffered by the defense that the bribe must have been paid from an individual outside or beyond the conspiracy was swiftly dismissed by majority Justices Alito, Kennedy, Ginsburg, Breyer, and Kagan.  Moral of the story:  just like the man who becomes his own grandpa, one can now be both a victim and a co-conspirator under the Hobbs Act.



Supreme Court Holds General Statute of Limitations is Not Jurisdictional Defense

It appears that not even this weekend’s colossal winter snowstorm could deter the Supreme Court from its business, today deciding several criminal cases on its docket.  In addition to the landmark Montgomery v. Louisiana decision, which gives retroactive effect to Miller v. Alabama and will have massive implications for those juvenile defendants serving life sentences for murder who may now seek resentencing or parole, the Court affirmed the convictions of Michael Musacchio, a former logistics industry executive who was convicted of improperly penetrating his past employer’s computer system with help from another former employee.

Musacchio had been president of Exel Transportation Services until he resigned in 2004. In 2005, he started a rival logistics company, Total Transportation Services, and soon thereafter hired Roy Brown, Exel’s former chief of information-technology.  Using a password Brown supplied, both Brown and Musacchio continued to access Exel’s computer system until 2006.

In 2010, a grand jury indicted Musacchio for computer fraud under 18 U.S.C. § 1030(a)(2)(C), which makes it illegal to “intentionally access[ ] a computer without authorization or [to] exceed[ ] authorized access,” and in doing so “obtain[ ]… information from any protected computer.” Id. (emphasis supplied).  Although initially charged under both statutorily provided theories of liability, the government’s superseding indictment limited both the conspiracy-based and substantive charges (Counts 1 and 2, respectively) to the cohorts’ unauthorized access to the Exel computer system.

At Musacchio’s 2012 jury trial, his counsel apparently overlooked that the general five-year federal statute of limitations (codified at 18 U.S.C. § 3282) might have barred Count 2, and so he raised no defense on that basis.  And, for the government’s part, it raised no objection to a clearly erroneous jury instruction that diverged from the indictment and the proposed instructions, and directed the jury to consider whether Musacchio had both “intentionally accessed a computer without authorization” and “exceeded authorized access.” Musacchio v. United States, No. 14-1095, 577 U.S. ___, slip op. at 3 (filed Jan. 25, 2016) (emphasis supplied).  Little did the parties likely know that these omissions would catapult Musacchio’s case all the way to the High Court.

After the Fifth Circuit affirmed Musacchio’s sentence of sixty months’ incarceration, the Supreme Court granted certiorari to (1) determine the proper standard of review of a sufficiency-of-the-evidence claim where the court erroneously instructs the jury and adds an element to the offense as charged, and (2) determine whether Section 3282’s statute of limitations was a nonwaivable defense that could be asserted for the first time on appeal.

Unfortunately for Musacchio, he fared no better at the Court, but his case does provide guidance to practitioners. Continue reading

Elonis v. United States: The Supreme Court Weighs In On Rap Lyrics, True Threats, and Criminal Intent

Shortly after his wife decided to leave him, 28-year-old Anthony Elonis, under the pseudonym “Tone Dougie,” began posting “self-styled ‘rap’ lyrics” on Facebook that contained “graphically violent language and imagery” concerning, among others, his estranged wife, a kindergarten class, and state and federal law enforcement. Elonis v. United States, 575 U.S. __, slip op. at 2 (2015). Elonis’ posts were often interspersed with disclaimers that the “lyrics” were “fictitious,” not intended to depict real people, an exercise of his First Amendment rights, and/or “therapeutic.” Id. However, many who knew him saw his posts as threatening, and a sampling of Elonis’ “rap” will demonstrate why:

If I only knew then what I know now, I would have smothered [you] with a pillow, dumped your body in the back seat, dropped you off in Toad Creek, and made it look like a rape and murder

That’s it, I’ve had about enough
I’m checking out and making a name for myself
Enough elementary schools in a ten mile radius to initiate the most heinous school shooting ever imagined
And hell hath no fury like a crazy man in a kindergarten class
The only question is … which one?

Little Agent Lady stood so close
Took all the strength I had not to turn th[is] [F.B.I. agent] ghost
Pull my knife, flick my wrist, and slit her throat
Leave her bleedin’ from her jugular in the arms of her partner


United States v. Elonis, No. 12-3798, slip op. at 4, 8-9 (3d Cir. 2013).

Shortly after these and similar posts were made, Elonis was charged with five counts of violating 18 U.S.C. § 875(c), which makes it a federal crime to transmit in interstate commerce “any communication containing any threat … to injure the person of another.” On its face, this statute requires that a communication be transmitted and that the communication contain a threat. However, “[i]t does not specify that the defendant must have any mental state with respect to these elements.” Supreme Court slip op., at 8.

At trial, Elonis’ counsel requested a jury instruction that the government needed to prove beyond a reasonable doubt that Elonis intended to communicate a true threat. However, the District Court found that negligence with respect to the communication of a threat was sufficient, instructing the jury that Elonis could be found guilty if “a reasonable person [in Elonis’ shoes] would foresee that his statements would be interpreted by [others] as a serious expression of an intention to inflict bodily injury ….” Third Circuit slip op., at 12. In light of this, in its closing argument the government “emphasizeed that it was irrelevant whether Elonis intended the postings to be threats – [saying] ‘it doesn’t matter what he thinks.’” Supreme Court slip op., at 7. Elonis was convicted on four of the five counts.

Elonis renewed his jury instruction challenge on appeal, but the Third Circuit affirmed and, consistent with the case law in the majority of federal circuits, held that Section 875(c) requires only the intent to communicate words that a reasonable person would view as a threat. Third Circuit slip op., at 18-22. Elonis appealed to the Supreme Court and on Monday the Court reversed, finding that the District Court’s instruction was not sufficient to support a conviction under Section 875(c).

Chief Justice Roberts, writing for the Court, observed that “[t]he fact that the statute does not specify any required mental state … does not mean that none exists.” Supreme Court slip op., at 9 (citing Morisette v. United States, 342 U.S. 246, 250 (1952)). Rather:

[t]he “general rule” is that a guilty mind is “a necessary element in the indictment and proof of every crime.” We therefore generally “interpret[] criminal statutes to include broadly applicable scienter requirements, even where the statute by its terms does not contain them.”

… [Indeed, while] “ignorance of the law is no excuse” … a defendant generally must “know the facts that make his conduct fit the definition of the offense, even if he does not know that those facts give rise to a crime.”

… [The Court will therefore] read into the statute “… that mens rea which is necessary to separate wrongful conduct from ‘otherwise innocent conduct.’”

Id. at 10, 12 (internal citations omitted). Here, the “crucial element separating legal innocence from wrongful conduct” is the threatening nature of the communication; therefore, the mental state requirement must apply to the fact that the communication contains a threat. Id. at 13. Because Elonis’ conviction was premised not on his mental state but on how his posts would be understood by a reasonable person, the majority found that his conviction could not stand.

This holding is certainly sound – “culpability on the all-important element of the crime” should not be reduced to negligence absent Congress’s clear intent to make that the standard. Id. However, as both Justice Alito (concurring in part, dissenting in part) and Justice Thomas (dissenting) point out, the Court’s decision is disappointing in that it does not address what level of intent is required to support a conviction. Instead, we are left to guess whether the jury needed to find that Elonis had the purpose of conveying a true threat, that he knew his words conveyed such a threat, or simply that he was reckless. White Collar Alert will keep you posted as attorneys and judges tackle this issue moving forward.

Supreme Court Denies Review of “Acquitted Conduct” Sentences

A defendant exercises his constitutional right to a jury trial and is proven guilty by a jury of his peers. The jury, confronted with multiple charges against the defendant, weighs the evidence and acquits on all counts, save one for which they find him guilty beyond a reasonable doubt. The judge at sentencing nonetheless sentences the defendant based not just on the one guilty count, but on the acquitted conduct, finding “by a preponderance of the evidence” that although the jury acquitted the defendant of those crimes, he, in fact, committed them and therefore should be sentenced to a much higher sentence as a result (although below the statutory maximum for the offense).

This can’t be right. An appeals court must surely reverse. And if not, the Supreme Court will certainly grant certiorari to fix it, right? Wrong.

Today, the Supreme Court denied certiorari in a case presenting this very question in United States v. Jones, over the dissent of Justices Scalia, Thomas, and Ginsburg (one short of the necessary number to hear the appeal). The facts of the case, as articulated by Justice Scalia, are as follows: Continue reading

Riley Ruling Continues to Protect Citizens from Police Scrutiny

Earlier this summer, we discussed the implications of the Supreme Court’s ruling in Riley v. California, which held that police officers cannot review the contents of a cell phone incident to an arrest absent a search warrant or exigent circumstances. We opined that this bright-line rule would clear up the murky waters created by courts less decisive or intrepid and now, not even three months later, the patience of our nation’s courts in tolerating warrantless cell phone searches has already waned.

Just last week, a New York State trial court suppressed photographs seized from the cell phone of a court observer during the 2012 high-profile sexual assault matter involving Satmar spiritual counselor, Nechemia Weberman. People v. Weissman, 2012KN002159, 2014 WL 4209245 (N.Y. Crim. Ct. Aug. 26, 2014). During the course of the Weberman trial, the presiding judge admonished those in the gallery to refrain from using their cell phones. Despite the judge’s explicit direction, the defendant removed his cell phone from his pocket and took photographs of others in attendance at the trial, including the female complainant while she testified.

When defendant Weissman attempted to exit the courtroom, he was stopped by an officer who seized his phone, scrolled through two to three photographs, and then identified the pictures that the defendant took while in the courtroom. While the court conceded that the officer’s initial investigation was reasonable, in part, because “the courthouse is an environment where persons have diminished expectations of privacy,” it also held that the officer was not permitted to physically seize the phone and view its contents without a warrant. The judge found the search was too expansive in nature and highlighted the officer’s viewing of two to three pictures prior to finding the relevant photos as prohibited under Riley. Id.

The Pennsylvania Superior Court, too, has applied the Riley rule, thereby affirming their intent to protect citizens’ expectation of privacy when it comes to the treasure troves of data found on our cell phones. In July, the Superior Court affirmed the lower court’s suppression of photographs found on a cell phone, relying on Riley in finding the seizure “undoubtedly unconstitutional.” Com. v. Stem, 2014 PA Super 145 (Pa. Super. Ct. July 11, 2014). There, although the cell phone was seized incident to arrest, the police turned on the phone, searched the cell phone data, and proactively accessed the phone’s picture application prior to obtaining a warrant. Although the police officer only viewed a single photo that he believed to be child pornography prior to applying for a search warrant, the court suppressed all seventeen photos containing child pornography, unmistakably delineating them fruit of the poisonous tree.

As Riley continues to sweep the nation state by state, rest assured that you can continue to tweet, Facebook, and text to your heart’s content knowing that the Fourth Amendment’s protections (finally) apply to your most treasured possession – your cell phone.

Supreme Court Checks in on Bank Fraud

Lost amid the flurry of the Supreme Court’s end of term decisions on recess appointments, cell phone privacy and contraception coverage is the Court’s dip into the federal bank fraud statute, 18 U.S.C. § 1344, in Loughrin v. United States. We no doubt share your surprise that the Twitterverse didn’t take to the streets in uproar over the Loughrin decision. Yet, notwithstanding the lack of attention, the decision merits more than simply a passing reference as it expands the reach of the federal bank fraud statute.

Let’s jump into it. Loughrin foraged for checks in residential mailboxes and then forged the checks, changing the payee to retailers, including Target. He used the checks to purchase merchandise, and then, shortly thereafter, walked back inside the store to return the goods for cash. When his scheme was uncovered, the government charged Loughrin with bank fraud. The federal bank fraud statute provides:

Whoever knowingly executes, or attempts to execute, a scheme or artifice–

(1) to defraud a financial institution; or

(2) to obtain any of the money, funds, credits, assets, securities, or other property owned by, or under the custody or control of, a financial institution by means of false or fraudulent pretenses, representations or promises;

shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.

18 U.S.C. § 1344. Loughrin argued unsuccessfully at trial that to be convicted under § 1344(2) requires proof of an intent to defraud a financial institution. He contended that his intent to defraud ran only to Target and not to the banks on which the checks were drawn and thus he could not be convicted.

In a unanimous decision, the Court rejected Loughrin’s argument, holding that the government need not prove such an intent. The reasoning: that sections (1) and (2) are distinct and thus, while there must be an intent to defraud a financial institution in a prosecution of section (1), there need not be such an intent for section (2).

Perhaps more significant, however, is the Court’s subsequent divided discussion on the implications of this holding. Although Justice Kagan (for the majority) and Justice Scalia (with Justice Thomas) agree that the holding should not turn every fraud using a check into a federal offense, that is the extent of their agreement. Ultimately, Justice Kagan focuses on the “by means of” language of § 1344(2), concluding that the bank fraud statute reaches only where the fraudster’s deception is transmitted to the financial institution. In this case, the falsity – the altered check – was presented to the bank and thus was the instrumentality of collecting the funds. In contrast, Justice Kagan rejected application of the bank fraud statute to a hypothetical of a buyer using a check to purchase a knock-off Louis Vuitton bag from someone claiming it was legitimate. In that case, the bank’s involvement is, as Justice Kagan says, “wholly fortuitous” and the lie (that the bag is real) never makes it to the bank. This “by means of” textual limitation is, however, too much for Justice Scalia, who contends that the Court should leave this discussion “for another day.”

Future days will indeed be necessary before the breadth of the bank fraud statute plays out. That said, the Court’s refusal to impose an “intent to defraud a financial institution” on subsection (2) of the bank fraud statute opens the door for additional federal prosecutions.

Justice Roberts Must Love his iPhone! SCOTUS Rules that Police Need a Warrant to Search Cell Phones

It has been a good day for the digital privacy rights of Americans. Today, in a unanimous ruling, the Supreme Court ruled that police need a warrant to search cell phones. Recognizing just how much we all rely on our phones, Justice Roberts wrote that “modern cell phones…are now such a pervasive and insistent part of daily life that the proverbial visitor from Mars might conclude they were an important feature of human anatomy.” Our “[c]ell phones…place vast quantities of personal information literally in the hands of individuals” and therefore, “officers must generally secure a warrant before conducting such a search.”

The Court dismissed all of the arguments that were presented for justification of a warrantless search but did say that in “exigent” circumstances like prevention of a terrorist plot or finding a missing child, that police are able to proceed without a warrant. However, after such a warrantless seizure, a court would still have to “examine whether an emergency justified a warrantless search in each particular case.”

Justice Roberts must spend as much time on his Smartphone as the rest of us do, because he noted that “[t]he term “cell phone” is itself misleading shorthand; many of these devices are in fact minicomputers that also happen to have the capacity to be used as a telephone. They could just as easily be called cameras, video players, rolodexes, calendars, tape recorders, libraries, diaries, albums, televisions, maps, or newspapers.”
Our constitutional rights are better protected when our highest court is in touch with the lives and realities of the average citizen.