Recently in Federal Criminal Trial Category

U.S. Supreme Court Expands Defendants' Plea Bargain Rights

April 16, 2012, by The McKellar Law Firm, PLLC

Two cases argued before the U.S. Supreme Court have now allowed defendants to get a second chance at accepting a plea offer if their attorney either acts unethically or gives wrong advice to the defendant.

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In State v. Frye, the defendant was charged with a felony for driving with a revoked license. While the prosecutor offered to reduce the charge to a misdemeanor if Frye pled guilty and agreed to serve for ninety days, Frye's defense attorney neglected to inform Frye of the offer. Frye was instead sentenced to three years in prison after pleading guilty to the charges.

In the second case, Lafler v. Cooper, the defendant was charged with assault with intent to murder after shooting a female in the thigh and buttocks. The prosecutor offered a plea deal twice to have the defendant serve a recommended prison sentence of four to seven years. But the defendant's attorney told the defendant to not accept the plea due to the attorney's belief that, under Michigan law, a defendant could not be convicted of attempted murder for wounds below the waist. Once the case went to trial, the defendant was sentenced to fifteen to thirty years in prison.

While the state in both cases argued that defendants do not have a constitutional right to a plea bargain-and therefore no constitutional right to assistance of counsel during a plea bargain- the Supreme Court disagreed. Under a 5-4 majority vote, Justice Kennedy opined that the right to adequate assistance of counsel guaranteed in the Constitution cannot exclude the "central role plea bargaining plays." Because plea bargaining is used in 95% of cases to determine "who goes to jail and for how long[,] [i]t is not an adjunct to the criminal justice system. It is the criminal justice system." When a defense attorney provides ineffective assistance of counsel during plea negotiations, the Supreme Court held that if a defendant can show that they would have accepted the original plea offer, the prosecutor would not have withdrawn the offer, and that the judge would have approved the offer, the defendant can get a second chance to accept the original plea offer.

Justice Scalia, in his dissenting opinion, believed that the decision did away with the idea that plea bargaining was "a necessary evil" to prevent the system from "grinding to a halt" if a majority of cases went to trial. Justice Scalia went on further by stating that this decision emphasized the idea that plea bargaining was like gambling at a casino. According to him, the decision "embraces the sporting chance theory of criminal law, in which the state functions like a conscientious casino operator, giving each player a fair chance to beat the house─that is to serve less time than the law says he deserves." An article discussing the potential ramifications of the above decision can be found here at npr.org.

Florida Doctor Convicted for Healthcare Fraud After 3-Week Jury Trial

A Miami-area doctor was convicted in federal court after a jury determined that he was guilty of five felony counts for his role in a $23 million dollar HIV injection and infusion Medicare fraud scheme, according to a press release from the Department of Justice. The federal court jury convicted Rene De Los Rios of one count of conspiracy to commit health care fraud and four counts of submission of false claims to the Medicare program. The conspiracy charge carries a maximum penalty of 10 years in prison and a $250,000 fine, while each false claims count carries a maximum penalty of five years in prison.

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Evidence presented at trial showed that the Dr. De Los Rios was hired by the medical clinic owner, Damaris Oliva, to "order unnecessary tests, sign medical analysis and diagnosis forms, and authorize treatments to make it appear that legitimate medical services, including injection and infusion therapies, were being provided to patients who were Medicare beneficiaries." De Los Rios was also accused of signing patient charts, often without seeing the patient, indicating that injection and infusion treatments were medically necessary, when, in fact, he knew they were not. Further, De Los Rios allegedly diagnosed almost all of his patients with the same rare blood disorders, which the patients did not in fact have, in order to ensure maximum reimbursement from Medicare, and that he prescribed expensive (and medically unnecessary) medications to patients for the sole purpose of receiving reimbursement from the Medicare program.

This case represents another victory for the Medicare Fraud Strike Force, which has now charged more than 1,000 defendants and organizations that collectively have billed the Medicare program for more than $2.3 billion. In this particular case, from approximately April 2003 through October 2005, the medical clinic where De Los Rios worked submitted approximately $23 million in claims to the Medicare program for injection and infusion treatments for Medicare beneficiaries that were not medically necessary, and were not provided. The Medicare program paid approximately $11.7 million in claims.

Tennessee Man Pleads Guilty to Violating Arms Export Control Act

January 21, 2011, by The McKellar Law Firm, PLLC

Knoxville, Tennessee federal criminal defense lawyers won't often deal with violations of 22 U.S.C. § 2778, which is commonly referred to as the Arms Export Control Act (AECA). The AECA provides the federal government with authority to control the export of defense articles and services.

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Earlier this week, Jerome Pendzich of Hampton, Tennessee, pleaded guilty to violating the AECA here in U.S. District Court in Knoxville. According to an article by Jamie Satterfield in the Knoxville News Sentinel, Immigration and Customs Enforcement Agency (ICE) officials searched the internet to find sellers who were selling munitions and other weaponry which violated the AECA. ICE officials found Pendzich on Ebay offering "worldwide shipment" of a type of body armor which is governed by the AECA.

Federal agents set up a sting as they pretended to be customers from Bogota, Colombia. Pendzich mailed prohibited items to Colombia and labeled them as "gifts" and "ceramic plates." ICE agents raided Penzich's home in 2009, and he ultimately admitted that he knew his actions were illegal. Penzich has not yet been sentenced.

Violation of the AECA is governed in part by the United States Sentencing Guidelines Section 2M5.2. This section of the Guidelines provides a base offense level of 26 (which would be 63-78 months of imprisonment for Category I offenders) or a level of 14 if the offense involved only non-fully automatic small arms, and the number of weapons did not exceed ten. Level 14 provides a range of punishment of 15-21 months for Category I offenders. However, a downward departure from these ranges of punishments may be in order if the offense did not have the potential to be harmful to a security or foreign policy interest of the United States, as was the case with Pendzich.

Tennessee Engineers Found Guilty of Stealing Trade Secrets

December 11, 2010, by The McKellar Law Firm, PLLC

A federal jury in Knoxville, Tennessee has found two Greenback, Tennessee engineers guilty of stealing and making use of trade secrets. Clark Alan Roberts and Sean Edward Howley were found guilty on all counts, including charges of conspiracy, theft and attempted theft of trade secrets, and wire fraud. Sentencing is scheduled for April 14, 2010.

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According to an article by Ed Marcum with the Knoxville News Sentinel, federal prosecutors argued that Roberts and Howley, who worked for Greenback-based Wyko Tire Technology Inc., faced a tight deadline to produce tire-making machinery for a Chinese company that wanted to make a certain specialized type of over-sized tires, which Wyko had not previously made. However, prosecutors contended that Goodyear, for which Wyko was a supplier, had developed such machinery. Prosecutors claimed that the defendants made a visit to a Goodyear plant Kansas in May 2007 so that defendant Howley could secretly use a cell phone camera to photograph such a machine.

Violations of federal trade secrets law fall under the guise of The Economic Espionage Act of 1996, which is codified at 18 U.S.C. Sections 1831 and 1832. To be found guilty of violating Section 1832 of the Economic Espionage Act, the Government must prove beyond a reasonable doubt that:
(1) the defendant stole, or without the owner's authorization obtained, sent, destroyed, or conveyed information;
(2) the defendant knew or believed that the information was a trade secret;
(3) the information was in fact a trade secret;
(4) the defendant intended to convert the trade secret to the economic benefit of somebody other than the owner;
(5) the defendant knew or intended that the owner of the trade secret would be injured; and (6) the trade secret was related to, or was included in, a product that was produced or placed in interstate or foreign commerce.

A defendant is also prohibited from attempting to steal a trade secret, or to receive, purchase, destroy, or possess a trade secret which the defendant knew was stolen. 18 U.S.C. §§1832(a)(2) - (4).

Additional Resources
"Jury Finds Two Greenback Engineers Guilty," Knoxnews.com, December 10, 2010
Dept. of Justice Press Release, December 9, 2010

Criminal Forfeiture in Federal Cases - An Overview

November 26, 2010, by The McKellar Law Firm, PLLC

Criminal forfeiture of a defendant's assets is another punitive tool that the Government can employ which causes enormous financial damage to the accused. In federal criminal cases, the court procedure for forfeiture is primarily set forth in Federal Rule of Criminal Procedure 32.2 , 18 U.S.C. § 982, and 21 U.S.C. § 853.

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Below is a list of federal crimes that provide for criminal forfeiture:

1. Chemical Weapons (18 U.S.C. § 229B, 22 U.S.C. § 6744)
2. Controlled Substances (21 U.S.C. §§ 853, 970)
3. Espionage and Censorship (18 U.S.C. §§ 793, 794, 798)
4. Food-stamp Program Violation (7 U.S.C. § 2024)
5. Fraud - Access Devices (18 U.S.C. § 1029)
6. Fraud - Aircraft or Space Vehicle Parts (18 U.S.C. § 38)
7. Fraud - Computer Fraud & Electronic Mail (18 U.S.C. § 1030, 1037)
8. Fraud - Identification Documents (18 U.S.C. § 1028)
9. Internal Security (50 U.S.C. § 783)
10. Monetary Instruments (31 U.S.C. § 5317)
11. Obscenity (18 U.S.C. § 1467)
12. RICO - Racketeer Influenced and Corrupt Organizations Act (18 U.S.C. § 1963)
13. Sexual Exploitation and Abuse of Children (18 U.S.C. § 2253)
14. Special Supplemental Nutrition Program (42 U.S.C. § 1786)
15. Stolen Property (18 U.S.C. § 2323)
16. Trade Secrets (18 U.S.C. § 1834)
17. Violation of Act of Congress (28 U.S.C. § 2461)

Criminal forfeiture procedure can often be complex and filled with pitfalls along the way. Make sure to obtain an experienced criminal forfeiture attorney before navigating the land mines of forfeiture law.

Bank Fraud Scheme Results in 30 Arrests in Knoxville Federal Court

November 24, 2010, by The McKellar Law Firm, PLLC

United States Prosecutors unleashed an Indictment last week against 30 defendants from Tennessee and Georgia for an alleged conspiracy to commit bank fraud, in violation of 18 U.S.C. Section 1344. The indictment alleges that the ringleaders of this alleged conspiracy recruited homeless people to cash fake payroll checks in area banks. According to an article by the Knoxville News Sentinel's Jamie Satterfield, Judge Bruce Guyton ordered the alleged ringleader of the conspiracy to be held without bond pending his trial.

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Federal law on Bank Fraud is codified at 18 U.S.C. Section 1344 as follows:

Whoever knowingly executes, or attempts to execute, a scheme or artifice-- (1) to defraud a financial institution; or (2) to obtain any of the moneys, 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.

This case is another example of the Government continuing its efforts to prosecute white collar and economic crimes. If you are unfortunate enough to be accused of committing economic crimes, your best move is usually to contact an experienced criminal defense attorney immediately. Oftentimes, the Government has been investigating the alleged crimes long before a suspected defendant is even aware of the Government's involvement. Accordingly, time is of the essence to ensure that your rights are protected.

Additional Resources:
"Alleged Leader of Fraud Scheme Jailed," Knoxnews.com, November 24, 2010
112410ring.pdfUnited States v. Larry Seymore, et al., Indictment
18 U.S.C. Section 1344 - Bank Fraud

Foreign Corrupt Practices Act Continues to Spread Its Wings

November 17, 2010, by The McKellar Law Firm, PLLC

Federal Criminal Defense Lawyers will occasionally encounter clients charged with violating The Foreign Corrupt Practices Act of 1977, 15 U.S.C. §§ 78dd-1, et seq. ("FCPA"), which makes it illegal for certain classes of persons and entities to make payments to foreign government officials to assist in obtaining or retaining business. In other words, bribing foreign government officials can put a client in jail and/or result in substantial financial penalties.

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Lanny Breuer, Assistant Attorney General for the Criminal Division of the Justice Department, recently said that in the past year, the Justice Department has imposed the most criminal penalties in FCPA-related cases in any single 12-month period ever, including more than $1 billion worth of penalties. He further said that in 2009 and 2010, the Justice Department has charged over 50 individuals and collected nearly $2 billion for FCPA violations and there are currently roughly 35 defendants awaiting trial on FCPA charges.

According to the Department of Justice's Lay-Person's Guide to the FCPA, the following affirmative defenses are available to someone or some entity charged with violating the FCPA:

A person charged with a violation of the FCPA's anti-bribery provisions may assert as a defense that the payment was lawful under the written laws of the foreign country or that the money was spent as part of demonstrating a product or performing a contractual obligation. Whether a payment was lawful under the written laws of the foreign country may be difficult to determine. You should consider seeking the advice of counsel or utilizing the Department of Justice's Foreign Corrupt Practices Act Opinion Procedure when faced with an issue of the legality of such a payment. Moreover, because these defenses are "affirmative defenses," the defendant is required to show in the first instance that the payment met these requirements. The prosecution does not bear the burden of demonstrating in the first instance that the payments did not constitute this type of payment.


Additional Resources
Dept. of Justice Site on FCPA
"FCPA: Strong and Getting Stronger," Wall Street Journal (Online), November 16, 2010

Tennessee Couple Sentenced For Tax Evasion

October 15, 2010, by The McKellar Law Firm, PLLC

As a Tennessee tax evasion attorney, I'm always interested when cases hit close to home. Tennessee residents Edward Eastwood and his Russian mail-order bride Elina Gromova-Eastwood were sentenced this week in Greeneville Federal Court for their convictions in a decade-long plot to commit tax evasion. U.S. District Judge Ronnie Greer sentenced Mr. Eastwood to a 97-month prison sentence and Mrs. Eastwood to a 60-month sentence. Mrs. Eastwood's daughter, Violetta Gromova, pleaded guilty earlier this year to committing perjury at the direction of her parents and will be sentenced at a later date.

To make matters worse, Elina Gromova-Eastwood confessed earlier this month to the location of over $200,000 in gold and silver coins, which had been hid in the Cherokee National Forest. These hidden assets have now been retrieved and are property of the United States.

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While I personally enjoy learning of the (often frivolous) arguments from my clients about the reasons they believe they are not required to pay their taxes, Judge Greer apparently was not as enthused to hear of the Eastwood's position on failing to pay their taxes. Judge Greer stated:

You accept the services taxpayers pay for. You drive on the roads taxpayers pay for. You use the institutions taxpayers pay for, but, on the other hand, you take the position...the government has no right to collect income taxes from you.

In a move that usually ends with horrible results, the Eastwoods decided to represent themselves at trial. As the old saying goes, the person who represents himself, represents a fool.

Additional Resources
$200K in gold, silver coins linked to tax evader, Knoxnews.com, October 12, 2010