In another one of those confusing 9th Circuit fraud decisions – the Court of Appeals has upheld the convictions and sentences of three men who summoned the likes of Charles Ponzi and swindled 1700 investors out of $40 million. In US v. Treadwell the Court upheld an instruction  that “intent to defraud is an intent to deceive or cheat,” and that “a defendant’s belief that the victims of the fraud will be paid in the future or will sustain no economic loss is no defense to the crime.”

The Court goes on to draw an analogy to embezzlement. It is not a defense to embezzling money from your employer that you intended on returning the money to him someday – even if you honestly believed you could, with interest! That makes sense to me because fraud is simply theft – if you get the money by lying it is not a defense that you may someday give the money back, or the investor may someday get the investment back. Bernie Madoff’s investors got money back, from other investor money!

And if someone was to sweet talk my wife into "giving" them my MacBook Air on the premise that we would get two new ones back in a few months, I wouldn’t care whether he or she had the good faith belief that they could get me a 100% return on my bride’s "investment." My computer would be gone – just like the investor’s $40 million. 

Look at the following language – it pulls together the key stuff here:

"According to the federal wire fraud statute, 18 U.S.C. § 1343, any person who “having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be trans- mitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice,” is guilty of wire fraud. Conviction under § 1343 means a defendant must have intended “to defraud” his victim. See United States v. Oren, 893 F.2d 1057, 1061 (9th Cir. 1990). “To defraud” under § 1343 encompasses “any scheme to deprive another of money or property by means of false or fraudulent pretenses, representations, or promises.” Carpenter v. United States, 484 U.S. 19, 27 (1987); see also United States v. Ciccone, 219 F.3d 1078, 1082 (9th Cir. 2000) (“[T]he offense’s specific intent element . . . require[s] proof of intent to deprive the victim of money or property.”). It means to “wrong[ ] one in his property rights by dishonest methods or schemes, and usually signif[ies] the deprivation of something of value by trick, deceit, chicane or overreaching.” Carpenter, 484 U.S. at 27 (internal quotation marks omitted)"

It’s the scheme that is the key – if you get the money by lying and scheming the law will be at your door. Or maybe – it will be some lawyer in a nice suit looking to collect back that "investor" money from you in a civil suit. Either way, this case is fair warning that the scheme imposes liability – both civil and criminal. 

Have a question about an investment "opportunity" that seems too good to be true? Get some advice before you give away the farm.

I had the call again this week: "I did not do anything wrong. Do you think it is ok if I talk to the police? Because – actually – I already talked to them and now they tell me they know what I did. I didn’t do anything!" 

Yes you did. You talked to the police. You thought that they would recognize you were innocent or that you could convince them you are innocent. You talked – and made their case against you better. And the truth is, your innocence may make you a bigger target than you are already.

Remember that fifth amendment thing? You know – the "you have a right to remain silent" schtick that the police always give on TV. Well – innocent folks frequently waive that right in the view that their innocence will set them free.  But what happens is the police almost always find some simple little lie that makes it look like you lied about the real issue. 

Imagine the questioning like this:

(Officer) "So you were at home last night?"

(You) "Yes."

"And you did not go to the Kit Kat Club?"

"No. Just ask anyone – they will tell you I was here. All night. Never left. Never went to the Kit Kat Club. Never been there. Ever. I sat here and watched TV until the news came on and then I went to bed."

"You’ve never been to the Kit Kat Club?"

(Long pause) "Well now that you mention it there was one time last May that I was in the parking lot of the Kit Kat Club … but not last night."

"The parking lot? Not inside?"

"Well I may have looked inside …"

And so it goes. You suddenly look like a liar. You lied when you said you had never been there and then you lied when you said you were only in the parking lot and you now look guilty. 

Everyone has the 5th amendment right to remain silent but almost nobody ever does remain silent.

So take 20 minutes and go watch the video here.  It will be the best 20 minutes you ever spend. Watch it and then watch here in the coming days as we talk more about not talking to the police.  

Now go watch it – your freedom may depend on it.

When you come back remember this: nobody in the history of the world has talked their way out of trouble with the police. You may think you can but you cannot. Period. And the number of people who have falsely confessed – that’s right falsely confessed – and gone to prison for crimes they did not commit is astonishing.

Yesterday I listened to Dr. Charles Honts talk about the research on false confessions and it is frightening. Even worse – the cops always say that they can "identify" a false confession from a true one. As Honts says – the research shows that anyone’s ability to tell a real from false confession is "no better than chance." In over one-third of all the proven wrongful convictions (usually through DNA evidence) the defendant falsely confessed. And juries listened to the evidence and convicted an innocent man or woman.

So lots of stuff here – do yourself a favor. Do not ever talk to the police if they are investigating you for a crime (I mean in a social setting the police are usually nice folks so maybe you could talk about the Vikings or the Cubs or the weather …) and go watch that video linked to above. And if you are a cop reading this, and you share my view or have a need to respond – do it. Let’s start a discussion. Tell me about your horror story.

Reversing a conviction for rape this week, the Idaho Court of Appeals reminded all of us that the system works when the rules leveling the playing field are enforced. That applies to defense lawyers and prosecutors alike. As Judge Gutierrez noted: "While our system of criminal justice is adversarial in nature, and the prosecutor is expected to be diligent and leave no stone unturned, he is nevertheless expected and required to be fair."

So the case of State v. Troutman takes another turn down the road of justice.  Noting that a "fair trial is not always a perfect trial," Judge Gutierrez finds that the error here interfered with the right to a fair trial and results in giving Mr. Troutman another day in court. If you are facing any criminal charge, you need to read this case. Go do it now.  

The decision is a great reminder of the complexity of criminal trials, and it reminds me of the following THREE TRUTHS about the criminal justice system.

FIRST TRUTH – every lawyer in that trial has duties that he or she must oblige. Judge Gutierrez noted the prosecutor’s duties to the people of the state, including the duties to the defendant. Hard blows are fine in the courtroom, but they must be fair blows. Mischaracterization of the evidence or the defense theory is not permitted. And mischaracterization is so easy to do in the heat of the battle in the courtroom. We are advocates in there, fighting for our client, and the fight gets hot sometimes and it is largely unscripted. When I read something that I have written here and reflect that it goes too far or misses the mark, I simply correct and re-save. There are no "re-do" buttons in an argument before that jury, so remarks need to be carefully considered. But none of us – not the best lawyers I know (Nevin or Spence) nor the best prosecutors for the State or the United States (hard to choose here) – none of us – gets it right everytime. We make mistakes and we fight too hard. In closing arguments we get going a hundred miles an hour and turn facts into stone when really the world is far more mud than rock. I won’t cast stones at the prosecutor here, and neither did the Court, for I too have taken arguments at trial too far.

But the difference is critical – and the SECOND TRUTH – prosecutors have a higher duty than simply fighting the good fight. 

"The role of the prosecutor is to present the government’s case earnestly and vigorously, using every legitimate means to bring about a conviction, but also to see that justice is done and that every criminal defendant is accorded a fair trial."

When I get it wrong in pursuit of an acquittal I may affect the outcome of the trial, but my duty rests solely with my client. The prosecutor must temper his or her role in the battle against a higher calling – to make sure every defendant has a fair day in court. Maybe this decision will cause prosecutors to stop and reflect on that duty as they go about their duties.

The  THIRD TRUTH is that sometimes you need that review by another judge or higher court to save the day. As I said above, lawyers often get it wrong in the heat of the battle, and there is no immediate review as in a football game. We don’t go to the referee upstairs with instant replay for a quick review. Judges sometimes get it wrong too. Here the appellate court thought the trial judge failed to adequately protect the defendant’s rights. It happens. Thankfully the Court of Appeals was there to review the case and make it right.

So what does all this mean to you as a criminal defendant heading to trial? Get the best lawyer you can afford. Let your lawyer work hard to win your case. Trust him or her but remember – something will go wrong at trial. It always does. Hopefully your judge will catch it but maybe not. So be prepared to fight to the death to clear your name. And hope for one of those appellate miracles if that is all there is left to hope for.

 

In a decision by the Idaho Court of Appeals, it may be that evidence of a child’s prior exposure to sexual behavior is admissible to answer the implicit question in every sexual prosecution: "how would a ten year old kid know about that sexual behavior?" If you have to defend against such charges, evidence that the child knew from a source other than the alleged sexual act may be proof that the child has fabricated the allegations.  Still, whether the evidence will actually be admitted will depend upon the facts specific to the case.

In Idaho vs Molen, the Petitioner complained that the trial court had twice rejected his offer of evidence that the purported victim had been exposed to sexual behavior by her mother, thus making it more likely that she made up the story and had its building blocks from that prior exposure. To be clear, Molen’s defense at trial rested on his assertion that the victim "SZ" made it all up, perhaps at her mother’s insistence. The Court stated:

"Molen’s offer of proof does not demonstrate that S.Z. had previously observed such conditions or behavior. The offer of proof indicated the evidence would show that S.Z.‟s mother exposed S.Z. to “a constant, graphic, sexually charged lifestyle . . ., including openly having sex with multiple partners with [S.Z.] in the home, openly discussing sex toys and pornography in front of [S.Z.], and openly disrobing in front of other family members in the presence of [S.Z.]” These assertions are too vague and general to establish an alternate source of knowledge from which S.Z. could have fabricated her description of Molen‟s acts.

So Molen’s evidence, according to the Court, was not relevant – because it was not specific enough to meet the prosecution’s allegations. I suppose this means that when a child alleges intercourse, evidence of prior exposure to intercourse would be admissible but not evidence of some other sexual act. 

But the rules provide that any evidence making the existence or nonexistence of a fact in issue is relevant evidence. Isn’t it relevant evidence if it answers the underlying "how would she know about that" question? Apparently not – according to the Court of Appeals.  

There is one other nugget to mine in this decision – the Court held that the prosecutor erred by commenting on the Defendant’s invocation of his right to remain silent when she asked him if he had waited to tell his story until after he had heard all the witnesses testimony.  Error? Yes. Result in reversal? No. The error was deemed to be harmless so the Petitioner did not get a new trial.

Whether you agree or disagree, this most recent decision is important to any defendant facing an allegation of sexual battery or lewd acts. These charges are so difficult to defend against that your lawyer needs to read this case – and soon!  Call your lawyer and tell him or her about this decision. 

 Reports tonight indicate that the City of Boise has passed new city laws designed to protect bicyclists on our streets. The ordinances would arguably provide new ways to criminalize driving too close or too aggressively around bicyclists. The truth is the new laws may make us feel safer while riding two wheelers on the road but they will do nothing – unless the City decides to enforce those new laws in ways that it would not under the existing law. Was it against the law to drive recklessly and endanger the lives of pedestrians before these new laws? Of course. So why didn’t the police enforce the old laws by actively pursuing inattentive or reckless drivers? 

Three people died last year because of driver inattention. Good people’s lives were lost and others ruined. Here is that all too simple truth – we can protect others – bicyclists and pedestrians and other drivers, by simply following that golden rule. If we all drive like we would want others to drive to protect our lives and the lives of our friends and family, the streets will be safer – new laws or not. 

And riders need to do a better job too. 

Last May I was almost hit near the corner of Broadway and Front. A driver in the "right turn only" lane changed his mind and went straight. I heard him accelerating behind me and off to the right just before he passed me on my right. I wondered if he would have passed one of his pals or maybe a kid that way. Had I not stayed put, I likely would have swerved in front of him as I moved to the right. 

Let’s just try to do a better job of accommodating others on the road – bikes, kids, grannies and others. Thanks for the new laws Boise, but its new attitudes we need.

 A few years ago I caught a radio interview of a Canadian hockey coach who had been fired, but not told so by his team before it was reported in the press. When questioned about his situation the coach (in his best Canadian accent) reflected, "I’d like to have ‘beeen’ notified!"

This phrase has become a family expression in our home. Whenever someone fails to include some detail likely to impact on an action or decision, we are almost certain to mock that accent and respond accordingly.

It’s the same way with investment fraud cases. Sometimes the fraud is in the execution of the scheme, as in the case of investor money that goes to fund the advisor’s daughter’s wedding, or his new BMW. Sometimes the fraud is in the inducement – the failure to notify the investor of the whole truth behind the planned use of their money. Even silence can constitute fraud if the person receiving your investment money has a duty to disclose facts he or she knows will impact on your decision. Usually that duty to disclose comes as a result of your relationship to the advisor or as the result of a law, like Idaho’s state security fraud laws.

So when is an omission of fact material? If it is material, it may be that you have a way to get that investment back. 

"An omission or misstatement is material if a substantial likelihood exists that a reasonable investor would find the omitted or misstated fact significant in deciding whether to buy or sell a security, and on what terms to buy or sell."

That is the basic premise behind the notion of fraud by omission. It’s that fact that causes you to respond like a hockey coach – "I’d like to have beeen notified" – before I gave you that hundred thousand dollars!

Sorting out whether there is fraud in the omission of some fact is not as easy as it sounds. A person may have civil or criminal liability for the failure to disclose, or there may be no liability at all. If you are in this situation and need to sort out whether you have liability, get with an experienced lawyer before you get notified – of impending criminal or civil case.

 If you are charged in a criminal case, you have a story. You know intuitively that you have to answer that "what happened" question, if only to yourself, your family and your lawyer. You understand that your freedom depends on the answer and ultimately, your story. And you likely understand that you should have a good lawyer to help you communicate the facts that you hope will keep you free. Believe me, you will not likely do it by yourself. That is the situation whether your case is civil (only money involved) or criminal.

Your story has to be refined, and a third person – your lawyer – is most likely equipped to do this. You need to define its core message and fight against the extraneous. Most people who call me about their situation have a core message, but it is lost in the detail they think is important. It goes something like this: 

"They arrested my son, but didn’t read him his rights. Then they took him to jail because he wouldn’t tell them who stole the car and then they put him in solitary confinement and won’t let him out until he tells them the names of the other guys who really did this. He was not the driver…"

A good lawyer will help you get through the extraneous and direct you to the core message – whatever that might be. Maybe the core (facts that make up the defense) is as simple as "I didn’t steal the car." Maybe it is more. In any case, an experienced criminal defense lawyer should be able to help you tell your story. Now you have to trust that lawyer to get to the stuff that matters.

And how do we do that? It’s not an easy thing to do sometimes. I am in a fraud case right now (a civil case) where the other lawyer submitted an eleven page brief that really got to the core. Mine was thirty pages and it wandered. So I kept refining the message until I was happier with the work, but in the end, I was amazed that anyone could cut through the clutter like the lawyer who was opposing our position.

How do we cut through that clutter and get to the core?

Write. Re-write. Refine. Cut. Re-write and do it all over again. 

I think the real answer is that we help you cut to the core by learning your story, and then working on how we tell it to the jury. So tell your lawyer your story, and let him or her cut it apart.

 A guy at the store was incredulous – "how could he have pled not guilty!  His pants were on fire and his leg almost melted into the seats!" 

"Yeah," his wife chimed in, "adds new meaning to the term fire ball!"

And so it goes. Kind of like "how could you represent someone that guilty?" 

Here’s how the press reported it:

"Umar Farouk Abdulmutallab’s arraignment was brief — less than five minutes — and a not guilty plea was entered on his behalf. He said little, telling the judge simply that he understood the charges against him."

Whenever a defendant is arraigned in court, he or she is advised of the charges, the potential punishment and the rights that go with being a defendant in a criminal case in the US. Perhaps the most fundamental of rights is the presumption of innocence that cloaks every defendant – even the unpopular ones who might threaten the lives and safety of fellow passengers on a plane.  You enter a plea of NOT GUILTY to place the burden on the prosecution to prove guilt by legal and competent evidence establishing guilt BEYOND A REASONABLE DOUBT. That not guilty plea starts the process that leads to discovery of investigative reports, consideration of the defendant’s competence to stand trial, and any available defenses to the charges.

So when a guy can’t blow up his own pants, and still pleads not guilty – he is asserting those same guarantees that each and every defendant has in a criminal trial. And that is big stuff. The kind of stuff that separates our system from other systems in other countries that end in "…stan." We have shed American blood for over 250 years to make sure that no defendant ever has the duty to prove his or her innocence. I served and maybe you did too. We served because we believe in the system, even when it looks like the defendant mocks its existence.  Not so – we have a system that relies on procedural rules, and those rules help to keep us free.  

 

 In a decision handed down on December 30, the Idaho Court of Appeals vacated a conviction for robbery in State vs Faron Hawkins because the district judge did not sua sponte (on his own without a motion from the defendant) order a mental health evaluation during the trial of the case. Hawkins had contacted an FBI agent concerning his fear for the safety of his sons who were in prison in Colorado. The agent told Hawkins he could not help, but offered to put him in touch with another agent. The following day Hawkins robbed a bank in Portland, and an employee identified him. The FBI agent he had contacted tried to locate Hawkins without success, and 6 months or so later he robbed another bank, this time in Boise. As he left the bank he told tellers his name and said the robbery was "all because of George Calley (the FBI agent)."  

Fast forward to trial. Hawkins has proceeded pro se, but a public defender is acting as standby counsel. Hawkins and the public defender do not get along. Hawkins fires him, then later asks that the PD argue his post trial motions – including a motion for a new trial because Hawkins says he was delusional. At the hearing the PD says that if he was going to argue the motion, he would have to argue that it lacked merit. So the lawyer says his client is not delusional (impliedly) and the court orders a mental evaluation for the purpose of sentencing – not for the purpose of determining whether the Defendant could have assisted in his own defense at trial.  

The appeals court says that there were plenty of reasons for the trial judge to have ordered – before trial or during – a mental status evaluation, to see if Hawkins could assist in his own defense. Case reversed, start all over folks.  The decision as to whether to order the mental status evaluation is one of discretion as to the trial court, and here, there was an abuse of discretion when viewed in the totality of Mr. Hawkins’ bizarre behavior and representations (for example, he claims the government implanted a chip in his ear and controlled his thoughts, he claims he worked for the CIA). 

Two things I take away from this case:  

First – if the defendant acts like he has mental issues, the lawyers and judges need to take a time out and get an evaluation. Strange behavior comes from somewhere and everybody needs to know where before spending days in trial. Stop the bus and get a psych eval!

Second – the US Supreme Court held that the test is different to determine competency when the defendant is represented as opposed to proceeding without counsel. To spare all the details, the test is understandably more rigorous if the defendant is pro se. So the judge has to be more attuned to the bizarre behavior and make the tough call. That is why he/she has the black robe and the impossible hours and caseload. If the court fails to order the evaluation, the right to due process is violated that the case gets reversed.

And this says nothing about the conduct of the defendant’s advocate. We are advocates – and the mentally ill make that job extremely tough. Still, we have to work on their behalf. Make their argument. It might be a winner!

Someone needed to argue this guy’s rights. Thankfully on appeal that happened. Nicely done Dennis Benjamin – Appellate Superlawyer!

Have an issue you want to talk about? Send in a comment and we’ll send it around the horn.

 At least once a week I get that call from a family member who wants me to help correct "an obvious miscarriage of justice" that has resulted in their father/mother/sister/brother or other family member being incarcerated.  "The lawyer forced him to plead!"  That was this weeks version of the always popular "please, please help me make this right!"

Before I get to the three things you absolutely need to know if your mother/father/brother/sister is in this situation, consider the Idaho Supreme Court’s most recent reminder of just when our appellate Judges and Justices will – that’s right I said WILL – turn back the sentence pronounced below.  In State v. Brian Cobler, decided December 28, 2009, Justice Jones (J, not W):  “In examining the reasonableness of a sentence, the Court conducts an independent review of the entire record available to the trial court at sentencing, focusing on the objectives of criminal punishment: (1) protection of society; (2) deterrence of the individual and the public; (3) possibility of rehabilitation; and (4) punishment or retribution for wrongdoing.”

The point of course is that a sentence must be tailored to fit the purpose for which the sentence is imposed, and appellate courts will not substitute their judgment for that of the sentencing court "where reasonable minds might differ."  

"To show an abuse of discretion, the defendant must show that the sentence, in light of the governing criteria, is excessive under any reasonable view of the facts." What this really means is that TRIAL lawyer had better do a great job of humanizing a defendant convicted of a crime, and use every tool available to lessen the sentence.

Unfortunately for Mr. Cobler, the Court concluded that a ten year sentence for sexual battery of a minor was not unreasonable.  Maybe with a little luck, some hard work and completion of a sex offender treatment program Mr. Cobler will find release, and the opportunity to try his hand at parole. 

And now the three things you must remember if you are considering hiring a lawyer to overturn a criminal sentence:

First – hire a great appellate attorney.  Candidly, I am not an appellate attorney. In Idaho, I can think of two or three great PRIVATE appellate attorneys.  IF YOU NEED ONE – call me and I will give you a name.  It won’t be my name.

Second – Idaho has an incredible group of appellate attorneys who represent indigent defendants on appeal.  Call the State Appellate Public Defender if the Defendant you are trying to help has no money left.  Call them even if he does, because they are amazing and may be able to help you find someone who can help. Molly Huskey, the lawyer who runs that group, is a genius!

Third – There is only so much any appellate attorney can do – or any trial attorney for that matter. People come to lawyers with tragedy they believe we can resolve REGARDLESS of the facts of the case.  If your mother/father/brother/sister or family member pled guilty, you cannot expect miracles to rain down.  Life is complicated and the Courts (appellate and otherwise) are even more complicated. Rules and decisions and orders and stare decisis and other Latin doctrines conspire against you! My pal David Nevin used to have shirts that he gave clients proclaiming (in Latin of course) "the law favors not the weak of heart." He is right! You have to be nuts to take on the state in virtually any case, so don’t do it mildly!  The meek do not want the earth!  Want to fight over a sentence? You have to show that the sentence is unreasonable in view of the facts of the case. So jump in with both feet, get a great lawyer and make a joyful noise like you care.

None of this means that the Court was wrong in deciding the Cobler case – truthfully I know nothing about the case – and the facts set out by Justice Jones seem compelling enough. My point is that justice is tough, so give it everything you have if you are in the fight. Your better chance is to convince the SENTENCING court that your defendant deserves a break and is a real person, not some identification number living out his or her days at the pen.  

So I must remind you of my first rule – if the person you love and care about is charged with a crime, spend your money on the best, most experienced criminal defense lawyer you can hire. There are lots of great trial lawyers out there – this is not a pitch by me for your case – so shop around. Ask lots of questions. Then pick someone you can trust and hope for the best, at the trial level.