Author Archive | Sarah Baumgartel

Thursday, August 25th, 2022

The government can garnish your 401(k) for restitution

In United States v. Greebel, 21-993-cr (2d Cir. Aug. 24, 2022), the Second Circuit holds that the Mandatory Victims Restitution Act (MVRA) enables the government to garnish a defendant’s retirement accounts to pay restitution.

Defendant Greebel was convicted of conspiracy to commit wire fraud and securities fraud and ordered to pay over $10 million in restitution. Pursuant to this restitution order, the government tried to garnish two of his 401(k) retirement accounts. The defendant objected. The Circuit found that these accounts’ plans permitted the defendant himself to withdraw lump-sums. And because the MVRA empowered the government to reach any property “in which the debtor has a substantial nonexempt interest,” allowing the government to “step[] into the defendant’s shoes, acquiring whatever rights the defendant himself possesses” to property, the funds were fair game for the government.

In so holding, the Circuit addressed a potential conflict between the MVRA and the …

Posted by
Categories: MVRA, restitution

Posted By
Categories: MVRA, restitution

Continue Reading
Monday, August 22nd, 2022

No GAAP violation, no expert, no problem

Are accounting standards and securities laws as complex as the tax code? Not according to the Second Circuit. In United States v. Petit, Taylor, Nos. 21-543-cr, 21-559-cr (2d Cir. Aug. 22, 2022) (summary order), the Second Circuit upheld the securities fraud convictions of two former public company executives charged with using “accounting tricks to artificially inflate” their company’s reported revenue in quarterly reports.

The defendants, who were convicted after trial, argued that the government failed to prove their so-called “tricks” violated any Generally Accepted Accounting Principles (GAAP). They also argued that the district court gave erroneous jury instructions on the scienter element (“knowingly and willfully”) and conscious avoidance.

The Circuit was unmoved. According to the Circuit, the “government was not required to prove” the defendants “violated GAAP,” so long as the defendants “intentionally misled investors.” Similarly, to prove the charged fraud, the government “did not need to offer expert …


Posted By
Categories: conscious avoidance, securities law

Continue Reading
Thursday, March 17th, 2022

Lack of rationale for denying compassionate release prompts Jacobson remand.

In United States v. Nosov, No. 21-187-cr (2d Cir. March 17, 2022) (summary order), the Second Circuit ordered a limited remand for clarification of a court’s denial of a motion for a sentence reduction under 18 U.S.C, § 3582(c)(1)(A), pursuant to United States v. Jacobson, 15 F.3d 129 (2d Cir. 1994).

In Nosov, the defendant moved for a reduction of his concurrent life terms, citing his youth at the time of the offenses, his rehabilitation, and his health conditions. The government agreed that the defendant’s obesity put him at increased risk from COVID-19, and that this could constitute an extraordinary and compelling reason for a sentence reduction.

Nonetheless, without further explanation, the district court opined that the defendant had not shown “extenuating and compelling” reasons warranting a reduction and denied the motion. This finding was in tension with the government’s concession and the Circuit noted that the …

Posted by
Categories: Uncategorized

Posted By
Categories: Uncategorized

Continue Reading
Tuesday, March 15th, 2022

District court can’t delegate inpatient treatment decision, but Hobbs Act restitution order stands.

In a March 14, 2022 summary order, the Second Circuit reiterated the limits of a district court’s authority to delegate decisions about supervised release to the Probation Department. In United States v. Ely, No. 17-3081-cr, the court imposed a special condition of release requiring the defendant to complete “outpatient and/or inpatient drug treatment.” This wording left it to the Probation Department to decide which. But because inpatient treatment “entails a significantly greater restriction on a defendant’s liberty than outpatient treatment,” the district court was not permitted to delegate this decision to Probation. The Circuit accordingly vacated this portion of the defendant’s sentence.

In the same order, the Circuit declined to find that the district court plainly erred by imposing restitution under the Mandatory Victims Restitution Act (MVRA) for a Hobbs Act robbery conspiracy. As relevant here, the MVRA mandates restitution for any “crime of violence,” as defined in 18 …


Posted By
Categories: delegation, restitution, supervised release

Continue Reading
Monday, January 10th, 2022

“We can do that. We don’t even have to have a reason.”

Today’s Second Circuit summary order in United States v. Foskey, No. 21-149-cr, brings to mind a Caddyshack line that I think of often (quoted above). In Foskey, the Circuit upheld the district court’s denial of a motion for a reduced sentence pursuant to 18 U.S.C. § 3582(c)(1)(A). Before the Circuit, the defendant argued that the district court had abused its discretion in denying his motion, failing to follow United States v. Brooker, 976 F.3d 228 (2d Cir. 2020), and failing to sufficiently explain its denial of release. Before the district court, the government had argued that Brooker was wrongly decided and that the district court should not follow it. The district court denied the defendant’s release motion in docket entry orders that did not make clear what legal standard it applied or whether it followed Brooker.

But, per the Circuit, “the district court made no mention …


Posted By
Categories: 3582(c)(1)(A), compassionate release

Continue Reading
Tuesday, July 20th, 2021

But is it one conspiracy? And is it securities fraud?

The answer to those questions is pretty much always “yes.” In United States v. Khalupsky, Nos. 19-197-cr, 19-780-cr (2d Cir. July 19, 2021), the Second Circuit affirmed the trial convictions of two defendants, rejecting various legal challenges. According to the circuit, the evidence at trial established that the defendants participated in a multi-year scheme to use stolen pre-publication press releases to make securities trades. Specifically, “hackers in Ukraine” “hacked into three newswires” that disseminated press releases for publicly traded companies, and passed those press releases to an intermediary (Dubovoy) before they were published. This intermediary then equipped and funded each defendant for trading, and gave them access to the releases. The defendants traded, kept a percentage of trading profits for themselves, and passed the rest back to Dubovoy.

On appeal, the defendants argued that there was not sufficient evidence to establish the existence of the single charged conspiracy, since …


Posted By
Categories: conscious avoidance, conspiracy, constructive amendment, securities law

Continue Reading
Friday, June 25th, 2021

Police can’t chase a suspected misdemeanant into his home without a warrant—except when they can, which is probably most of the time.

In Lange v. California, No. 21-18, 594 U.S. __ (June 23, 2021), the Supreme Court holds that pursuit of a fleeing misdemeanor suspect does not categorically qualify as an exigent circumstance that permits police to enter a home without a warrant. That is: if a New York police officer tries to stop and ticket you for littering, and you run away, the officer cannot necessarily chase you into your home.

But sometimes, probably even most times, he can. Per the Supreme Court: “A great many misdemeanor pursuits involve exigencies allowing warrantless entry,” so it “turns on the particular facts of the case.”

In Lange, the defendant drove past California highway patrol officers “listening to loud music with his windows down and repeatedly honking his horn.” This prompted officers to follow Lange and then signal for him to pull over. By the time police turned on their signal, Lange …

Posted by
Categories: Uncategorized

Posted By
Categories: Uncategorized

Continue Reading
Thursday, June 24th, 2021

Challenging § 924(c) convictions based on multiple predicates after Davis.

Since the Supreme Court decided United States v. Davis, 139 S. Ct. 2319 (2019), lower courts have grappled with pre-Davis § 924(c) convictions predicated on both a valid crime of violence and a predicate offense that no longer categorically qualifies (for example, a § 924(c) conviction predicated on both a substantive Hobbs Act robbery and a Hobbs Act conspiracy). In United States v. Eldridge, No. 18-3294-cr (2d Cir. June 22, 2021), the Second Circuit provides guidance on this issue.

In Eldridge, one defendant was convicted at trial of a § 924(c) offense with three possible predicate crimes of violence: (1) kidnapping in aid of racketeering; (2) conspiracy to commit Hobbs Act robbery; and (3) attempted Hobbs Act robbery. The trial was conducted before Davis was decided, so there was no dispute about these predicates. Following Davis, however, both parties agreed that the kidnapping and Hobbs …

Posted by
Categories: 924(c), Davis, plain error

Posted By
Categories: 924(c), Davis, plain error

Continue Reading
Monday, June 21st, 2021

Questioning about phone number violated Miranda rights.

By summary order dated June 21, 2021, the Second Circuit reaffirmed limitations on law enforcement’s ability to elicit so-called pedigree information after an arrest.

In United States v. Durand, No. 20-1992, the defendant requested a lawyer and did not waive his Miranda rights following arrest. Nonetheless, officers asked him about his phone number, purportedly as part of the administrative booking process. Typically, law enforcement may ask a detainee certain biographical or pedigree information without running afoul of Miranda. However, without a Miranda waiver, police may not ask questions during the booking procedure that are designed to, or that officers have reason to know will, elicit an incriminating response. There are no categorical exemptions from Miranda for certain booking questions and the issue is highly fact-specific.

In Durand, the Circuit held that officers should have known that their post-arrest questioning of the defendant regarding his phone number was …

Posted by
Categories: Miranda

Posted By
Categories: Miranda

Continue Reading
Thursday, February 25th, 2021

Court issues opinion detailing SDNY prosecutorial misconduct

On February 22, 2021, the district court issued its full opinion regarding prosecutorial misconduct issues in United States v. Ali Sadr Hashemi Nejad, 18 Cr. 224 (AJN), and made public affidavits filed by United States Attorneys involved in the case. The full opinion is here.

In this opinion, the district court restates that it did not find proof of intentional misconduct, but nonetheless finds “pervasive” “errors and ethical lapses.”

With respect to these lapses, the publicly filed exhibits include, inter alia, these exchanges between the U.S. Attorney supervisors involved in the case:

Crowley, Shawn (USANYS) 5:26 PM:
i think i’m going to stop with the closing and devote the rest of the night to cleaning out my
office
Emil J. . Bove 5:26 PM:
seriously
i was just going to write to you – like the window was on my screen and yours popped in – are


Posted By
Categories: Brady, prosecutorial misconduct

Continue Reading
Friday, February 19th, 2021

District Court urges the DOJ to investigate misconduct by SDNY prosecutors

On February 17, 2021, the district court issued a new order in the continuing saga of United States v. Ali Sadr Hashemi Nejad, 18 Cr. 224 (AJN). A previous opinion detailing the relevant facts was issued on September 16, 2020.

This is a prosecution that began to unravel back in early 2020. In 2018, Mr. Sadr was indicted on charges of conspiracy to defraud the United States, conspiracy to violate the International Emergency Economic Powers Act, bank fraud, and money laundering offenses. The prosecution was handled by AUSAs Andrew J. DeFilippis, Matthew Laroche, David W. Denton, Jr., Emil J. Bove, III, Jane Kim, Michael Krouse, Rebekah Donaleski, Shawn Crowley, and Stephanie Lake.

In March 2020, after a two-week jury trial, Mr. Sadr was found guilty of five counts.

After trial, Mr. Sadr moved for acquittal as a matter of law or, alternatively, a new trial. While that motion was …


Posted By
Categories: Brady, prosecutorial misconduct

Continue Reading