DOJ Discovery “Strategy” Blue Book Not Made Public: Leaves No Belief In Fairness

Opinion found here:

D.C. Columbia Circuit, reluctantly, agrees with DOJ that their recently published “Blue Book” to aid federal prosecutors in their discovery obligations, published in the wake of the Ted Stevens scandal, is immune from release under the Freedom Of Information Act.   The Blue Book is termed “work product.”


Case is :  NATIONAL ASSOCIATION OF CRIMINAL DEFENSE LAWYERS,                                                                          APPELLANT v.


Argued January 14, 2016 Decided July 19, 2016 No. 15-5051

Conduct of DOJ prosecutors, the most powerful prosecution arm in the world, must not be thought of as “above board,” it must also actually be “above board.”  Letting it be seen is “above board.”

Government cannot force US Companies to turn over content email accounts stored outside of USA

Court: Government can’t make Microsoft reveal cloud data

NEW YORK - A federal appeals court has ruled that the government cannot force Microsoft to reveal content from a customer’s email account stored in Ireland.

The 2nd U.S. Circuit Court of Appeals in Manhattan ruled Thursday, overturning a lower court decision.

The appeals court says that Congress did not intend a U.S. law governing warrants to be enforced against a U.S.-based service provider storing contents of a customer’s electronic communications on servers outside the United States.

Prosecutors sought the information in December 2013, saying they believed the account in a Dublin facility opened in 2010 was being used to further narcotics trafficking.Dozens of businesses along with news organizations supported Redmond, Washington-based Microsoft Corp. (MSFT) in the case.

U.S. prosecutors said the U.S. properly followed the law in requesting the information.

According to CBS News justice reporter Paula Reid, “This is an incredibly significant win for tech companies.”

She added it was the biggest tech vs. government case before the FBI took on Apple over access to the San Bernardino shooter’s phone.

Microsoft Ireland case


87 Month Sentence For 10 Million Dollar Loss Deemed Too Much For White Collar Conviction

A Tenth Circuit panel on Tuesday tossed out an Oklahoma man’s 87-month prison sentence after he was found guilty of scamming a small-town bank out of nearly $10 million in loans, saying while the conviction will stand, the sentence goes too far.

Roy Lynn Wesberry faced 87 months in prison after an Oklahoma court found him guilty of bank fraud charges committed against the First National Bank of Davis that eventually shuttered after Wesberry didn’t pay back the loans. He appealed the decision and the sentence, which also included $3 million in restitution.

But the Tenth Circuit panel said that while Wesberry’s conviction won’t be overturned, the case should be remanded for re-sentencing. In a 14-page opinion, the panel agreed with Wesberry that his prison sentence was wrongly calculated on the basis of nominee loans, or bridge loans, that did not play a role in the bank’s failure.

“The government has not shown that these nominee loans substantially jeopardized the safety and soundness of First National, which failed from the excessive loans it made to Mr. Wesberry rather than the scheme to conceal these loans,” the panel’s opinion said.

The order upholds a conviction of four counts of bank fraud and one count of conspiracy to committee bank fraud, but vacates the sentence and remands for re-sentencing.

Wesberry was accused of owing First National Bank of Davis an estimated $9.6 million, a sum that caused the small-town bank to close down because it had reserves of under $1 million, according to a court history.

Wesberry was accused of working with the bank’s president W.A. “Dub” Moore, who pled guilty in 2014 and received 24 months in prison, to scam the bank, and of using nominee loans to avoid legal lending limits and cover up for his prior debts.

In August, Wesberry was found of guilty of conspiracy to commit bank fraud and four counts of bank fraud. He was ordered to spend 87 months in prison and pay more than $3.2 million in restitution.

Wesberry appealed the decision, arguing that the government didn’t bring enough prove the nominee loans were illegal and that the court erred by raising the sentencing guideline levels based on the conclusion that the four nominee loans jeopardized the safety of the bank.

The government argued that the guidelines were proper because the total of the nominee loans, including three others the court found to be relevant conduct, topped $5 million, which substantially jeopardized the bank.

In its decision to uphold the conviction, the panel said a reasonable trier of fact could’ve found Wesberry guilty beyond a reasonable doubt, as the government could prove Wesberry attempted to execute a scheme to conceal his debt through the use of nominee loans.

But when it came to the sentence, the district court erred in calculating the guideline range, the panel said. At sentencing, the district court found that Wesberry’s offense jeopardized the safety and soundness of the bank, which requires a four-level offense enhancement.

But the panel agreed with Wesberry’s argument that these enhancements wrongly took into account four nominee loans made during the scheme that did not cause the bank to fail.

“The government fails to show that the nominee loans, rather than prior loans to Mr. Wesberry and his companies, jeopardized the safety and soundness of First National,” the panel wrote. “Accordingly, the sentencing enhancement was not supported by the evidence.”

U.S. Circuit Judges Robert E. Bacharach, Mary Beth Briscoe and Carolyn B. McHugh sat for the panel.

The U.S. Attorney’s Office declined to comment.

Attorneys for Wesberry did not immediately respond to requests for comment.

Wesberry is represented by Warren Gotcher of Gotcher and Beaver.

The United States is represented by Linda A. Epperley and Melody Noble Nelson of the U.S. Department of Justice and Thomas M. Wright of Wright Stout & Wilburn.

The case is the United States of America v. Roy Lynn Wesberry, case number 15-7051, in the U.S. Court of Appeals for the Tenth Circuit.

Heck must be freezing over: IRS Desires To Refund Forfeited Funds It Took From Tax Payers

Reichel, Plesser, L.l.P. represented several folks who had their funds seized by the IRS for simple structuring suspicion–even if the funds were not connected in any way with illegal activity. It was a perversion of justice, plain and simple.  Only a big government NAZI would think otherwise.

IRS Will Allow Taxpayers Who Had Cash Seized to Petition for It Back

IRS Commissioner John Koskinen has announced that the IRS will be contacting hundreds of US taxpayers who may be entitled to a return of their seized property.
Koskinen made the announcement in a letter to Chairman Peter Roskam (R-IL) and Ranking Member John Lewis (D-GA) of the House Ways and Means Subcommittee on Oversight, following an investigation into asset seizures that took place prior to an agency policy change in October 2014.
Under the Bank Secrecy Act (BSA), financial institutions are generally required to report each deposit, withdrawal, exchange of currency, or other payment or transfer which involves a transaction in currency of more than $10,000. Multiple currency transactions must be treated as a single transaction if the financial institution has knowledge that the transactions are conducted by or on behalf of any one person and result in either cash in or cash out totaling more than $10,000 during any one business day.
A taxpayer may not structure, or assist in structuring, his deposits (e.g., by keeping a series of deposits under the $10,000 threshold) in order to avoid BSA requirements. A fine of no more than $250,000, or imprisonment for no more than five years, or both, may be imposed on a person who willfully violates this anti-structuring provision.
Civil forfeiture, in general, is a process by which the government can seize property, such as cash, that it suspects has been somehow used in criminal activity. Criminal forfeiture, on the other hand, generally follows a criminal conviction. A key distinction between the two is that with civil forfeiture, there is no requirement that a property owner be convicted of, or even charged with, a crime.
Scandal and Response
In October 2014, following a slew of negative press involving the IRS’s use of civil-forfeiture laws, the agency’s Chief of Criminal Investigation (CI) issued a statement explaining that the IRS would no longer pursue the seizure and forfeiture of funds associated solely with “legal source” structuring cases, unless there are exceptional circumstances that warrant such seizures or forfeitures.
Koskinen testified before the Oversight Committee in February 2015 to further explain the IRS’s new position. Koskinen noted that the practice of law-enforcement organizations seizing forfeiture funds that were structured, but were not derived from or associated with any other illegal activity, had been an issue in recent months.
While emphasizing that structuring bank deposits or withdrawals to evade BSA reporting requirements is a felony, regardless of whether the funds come from a legal or illegal source, Koskinen said that the IRS recognized that small businesses and individuals may make deposits under $10,000 without any intent to avoid the reporting requirements. Taking that into consideration, after conducting a review of structuring cases last year, the IRS concluded that it would focus its resources on cases where evidence indicates that the structured funds were derived from illegal sources.
Koskinen noted that the agency will only investigate “legal source” structuring cases under special circumstances and when the case has been approved by a senior headquarters executive within the agency’s criminal investigation unit. IRS CI special agents will view this act as an indicator that other, more serious crimes may be occurring. This ensures that the IRS CI continues to focus its limited investigative resources on identifying and investigating tax violations within its jurisdiction that closely align with the department’s mission and key priorities.
Koskinen said the new policy will help ensure consistency in how IRS CI structuring investigations and related seizures are conducted. Seizure and forfeiture in “illegal source” structuring cases will continue, and in conducting any and all asset-forfeiture actions, the commissioner said that the IRS CI will proceed to fully comply with all legal, regulatory, and policy requirements. Koskinen further indicated that the IRS recognizes that seizure and forfeiture are powerful tools that must be administered fairly, efficiently, and in compliance with the law.
Recent Developments
Koskinen again testified before the Oversight Subcommittee on May 25, 2016, then followed up with a letter to Committee Chairman Roskam and Ranking Member Lewis on the IRS’s planned actions.
He stated in the letter that the agency is taking steps towards addressing the subcommittee’s concerns, including a review of 76 investigations in which assets were seized prior to the October 2014 policy change.
The IRS intends to send notice to all persons or entities that had property seized relating to structuring activity between October 1, 2009 and October 17, 2014, that will advise them that they may be entitled to a return of their property through the “petition for remission or mitigation process.” Koskinen wrote that the IRS has identified over 700 investigations for which it will mail such notices.
The notices will be tailored depending on whether the forfeiture was an administrative forfeiture or a civil-judicial forfeiture. Once a petition is received as a result of these notices, the IRS will either make a determination in administrative cases, or make a recommendation to the Department of Justice in judicial-forfeiture cases.
For administrative cases, any property owner who participates in this process to seek a return of funds or property qualifies by establishing: (i) that the underlying funds came from a legal source; and (ii) that there is no evidence that the petitioning property owner engaged in structuring to conceal other criminal activity (e.g., tax evasion or money laundering).
The IRS said it expected to mail the notices for administrative cases the week of June 13, and letters relating to civil-judicial forfeitures by June 17, pending a followup meeting with the Department of Justice.

First conviction for criminal “spoofing” comes to sentencing

1st-Ever Convicted ‘Spoofer’ Asks For Probation

(June 30, 2016, 5:48 PM ET) — The first person convicted of the new post-financial-crisis offense of criminal “spoofing” asked a Chicago federal judge Wednesday for a sentence of probation, citing the vagueness of the law at the time and his settlements with regulators.

Michael Coscia was convicted in the first-ever criminal spoofing trial brought in the wake of the the 2010 Dodd-Frank Act. Prosecutors say that while running New Jersey-based high-frequency trading firm Panther Energy Trading LLC, Coscia implemented a strategy to offer out large orders, wait until they moved the market, and then retract them.

The objective was to benefit much smaller orders that needed the in-the-black nudge provided by the counterpoint of the fake large ones.

In a sentencing memorandum, Coscia took aim at the government’s sentencing recommendation of roughly six to seven years in prison, saying it doesn’t take into account his otherwise exemplary life or the deterrence already created by his settlements with regulators or the criminal conviction itself.

Moreover, he cited the vagueness of the spoofing statute and the lack of any interpretive guidance from the authorities prior to the case being brought. Coscia noted the anti-spoofing provision went into effect in July 2011, just weeks before he began trading with the programs at issue in the case.

“The very limited guidance available at the time of Mr. Coscia’s conduct should be considered when weighing the nature and circumstances of the offense for sentencing purposes,” the memorandum says.

Coscia says his allegedly illicit trading only lasted 10 weeks, and he ceased it promptly after exchanges voiced concern that his trading violated market rules relating to fair trading. He cites his cooperation with the Intercontinental Exchange Inc., the U.S. Commodity Futures Trading Commission and the CME Group Inc., and the $4.5 million he paid in fines and disgorgements as the result of regulatory settlements.

“Mr. Coscia has thus already paid significant consequences as a result of the trading that now forms the basis for his criminal convictions,” the memorandum says.

Representatives for the Chicago U.S. Attorney’s office and an attorney for Coscia did not immediately respond to requests for comment on Thursday.

Coscia was charged with six counts of spoofing and six counts of commodities fraud. After a two-week trial, it took an Illinois federal jury one hour to return a verdict of guilty on all counts.

In April, U.S. District Judge Harry Leinenweber upheld the verdict, brushing aside one of Coscia’s foundational objections to the prosecution effort, which, if accepted, would have been a significant roadblock to the government’s efforts to prosecute similar crimes in the future.

Coscia had argued that he simply induced other market players to engage with him, but that the orders themselves weren’t false. This inducement, he said, didn’t rise to the level of fraud. But Judge Leinenweber disagreed.

“The government alleged that Coscia engaged in a scheme to defraud by intentionally misleading market participants about price and volume information … through sham quote orders,” the judge said. “That theory fits the requirements of the statute.”

The government is represented by Renato Mariotti and Sunil Harjani of the U.S. Department of Justice.

Coscia is represented by Stephen J. Senderowitz, Lindsey A. Trachtenberg and Marilyn B. Rosen of Dentons US LLP as well as Michael S. Kim, David H. McGill and Jason Manning of Kobre & Kim LLP.

The case is U.S. v. Coscia, case number 1:14-cr-00551, in the U.S. District Court for the Northern District of Illinois.

LA Times Editorial On McDavid Case Reichel, Plesser want a hearing!

The LA Times Editorial today about the McDavid case should be the final straw for Sacramento federal criminal judge MC England to hold an Order T Show Cause Hearing about what exactly happened in the case where federal criminal defense attorney Mark Reichel was denied the evidence in a trial in 2007.  It should be.

Editorial found here.


The case against cheating prosecutors

  • cheating prosecutors should be reported to their superiors and to the state bar, and weighed for prosecution

It should go without saying that cheating criminal prosecutors who lie or hide evidence to bolster their cases, and cowardly state judges who cover for them, should be identified and punished. It should go without saying — but we say it in light of last month’s extraordinary remarks from a panel of U.S. 9th Circuit Court of Appeals judges at a hearing for convicted murderer Johnny Baca. A lower court had determined that a Riverside County prosecutor lied on the witness stand to back up the lies of a jailhouse informant, but the conviction was repeatedly upheld anyway until it got to the federal appeals panel on a habeas corpus petition.

Judges Alex Kozinski, Kim Wardlaw and William Fletcher lit into the state deputy attorney general who was in front of them to defend the convictions, and a video of the exchange went viral. It sparked news stories and spirited exchanges on legal blogs about what Kozinski had previously called an “epidemic” of prosecutorial misconduct and assertions that too many California state trial judges are unwilling to do anything about it.

But lives are also at stake in the criminal courtroom. A sentence of 10 years or 20 years or even more — or of death — should not be rendered without absolute assurance that the trials were fair and that the prosecutors were honest. An argument could be made that prosecutorial misconduct is far more egregious and unforgivable than a police officer’s deadly error, because police officers must react in an instant to a potentially deadly threat to themselves or the public. A prosecutor’s misdeed comes with ample time to reflect.

Keep in mind that criminal prosecutors have duties that defense lawyers don’t. The prosecutor’s goal is not, or rather should not be, merely to win, but to ensure that proceedings are fair and verdicts are just. Prosecutors must disclose any evidence that could tend to undermine their own cases. They may not — again, it should go without saying — lie, encourage others to lie, or present witnesses they know or suspect to be lying.

California trial judges and appellate justices who encounter such misconduct have to determine whether it was so egregious — and so material to the conviction — that the verdict must be reversed. But then what?

In the hearing on Baca’s case, Kozinski complained that state prosecutors will keep committing misconduct “because they have state judges who are willing to look the other way.” Wardlaw noted that California state judges “are elected judges. They are not going to be reversing these things.”

The legal community has latched on to those comments and is involved in a debate over whether the essential enabling factor of prosecutorial misconduct is the fact that, unlike their federal counterparts, who are appointed for life, California judges must face the electorate. The argument goes that no judge wants to overturn a conviction or nail a prosecutor for fear of being branded soft on crime at election time.

But before becoming comfortable with the assertion that the problem is state judges and elections, let’s recall that Kozinski’s remark about an “epidemic” of misconduct or error came not in the Baca case but in a 2013 dissent — in a federal case.

If violations of the prosector’s duty to turn over potentially exculpatory evidence, as required under the 1963 case of Brady vs. Maryland, are indeed “epidemic,” it appears to be a disease that can spring up in any courtroom in which prosecutors believe they will be rewarded for convictions and judges, whether elected or with lifetime appointments, believe there is little point in reporting cheaters.

The 9th Circuit panel’s outrage at the Riverside County prosecutors serves as a reminder of this serious problem. It is incumbent upon state and federal judges and prosecutors, the state bar and others involved in the justice system to acknowledge it, and to present a solution.

Sacramento Defense Attorneys Reichel Plesser Doing Good Work Here

Hopefully, the new DNA evidence in this criminal case will help release this young man.

My interview explaining it is here.



New DNA Evidence Could Completely Change Leila Fowler Case

POSTED 7:06 PM, FEBRUARY 19, 2015, BY , UPDATED AT 07:02PM, FEBRUARY 19, 2015


It’s been almost two years since a terrible murder scene played-out in Valley Springs, and 8-year-old Leila Fowler lost her life.

It’s been almost two years since her older brother Isaiah Fowler was charged with that murder and arrested.

He’s just 14-years-old. So, much of his 12th year, and all of his 13th, were spent either in custody or, when he’s in court, in shackles.

His defense attorneys are confident that will end tomorrow.

“He is not the murderer. He’s a 12-year-old boy who, when law enforcement got there, was almost completely clean of any evidence of a crime scene, which is beyond impossible. A 12-year-old can’t clean up a crime scene,” defense attorney Mark Reichel said.

And this crime scene was particularly gory. Leila was stabbed more than 20 times with a knife that punctured both her heart and lungs.

But it’s not just the absence of blood on Isaiah that demonstrates his innocence according to his attorneys. They say it’s the presence of the bodily fluids of another person – a man.

It’s DNA found during testing, ordered by the defense this January, on a strand of Leila’s own hair, retrieved from under her clothes, from the cleft of her buttocks.

“Now you have scientific evidence that shows sometime, recently, prior to her demise, there was a male adult very close to her – close enough to deposit significant DNA,” Reichel said.

There was no evidence of sexual assault on Leila’s body when she was killed.

I asked Reichel what Isaiah’s reaction might be Friday if he’s released on bail.

“Words probably would fall far short of describing his emotions and what he’s thinking,” he said.

We contacted the Calaveras County District Attorney’s Office about this story. They told us they would not comment, because it is a case involving a minor.

As of now, the 2nd degree murder trial of Isaiah Fowler is still on the court calendar for mid-May.

If not Isiah,  then who?

“Everybody wants an answer. I wish I could give everyone an answer. But we can’t give an answer, other than to say it’s not the boy you’re holding in custody,” Reichel ssaid.

For nearly two weeks after the brutal murder of Leila Fowler, the Calaveras County Sheriff lead a manhunt looking for her killer. It would end with arrest of her then 12-year-old brother, the boy who was babysitting Leila at the time of her death. The boy who provided a description of the killer.

Now his defense attorneys are saying the key to their case was not hiding in the rolling hills of Calaveras County, but with a single strand of Leila’s hair and the DNA they found on it.

“It’s a complete profile of a male, and it doesn’t match anybody associated with the Fowler family, or those that had visited recently or been in the neighborhood,” Reichel said.

Reichel says the Calaveras County Prosecutor now is running that DNA sample through law enforcement data bases, looking for a match.

The science says there is some possibility that the male it describes is a relative of Leila and Isiah’s father, Barney Fowler.

Reichel says there is a killer still out there, and just as it was in days right after Leila was killed, it’s the job of law enforcement to find him.

“I know they were beating the bush and you were there when they were doing it,” he told FOX40. “But if in your heart and your mind, you’re certain you’re not going to find anything, then you’re not doing the job right, and you can overlook things.”


Federal Indictment Based On ATF “Sting” Operation Dismissed In Los Angeles Central District For ATF Misconduct

Central District Judge Manuel  Real dismissed all charges in a case involving ATF Officers setting up defendants to rip off non-existent “stash” houses.   The case is 13-CR-751 United States v. Flores et al.  Read all about it by checking the pacer docket   here:

There are a few of these cases in the Eastern District right now.