The Honorable Elizabeth A. Kovachevich 34th Annual National Seminar on Federal Sentencing
July 30 – August 1, 2025 For more information, see here.
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Category: Sentencing
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The speculation now begins about where Elizabeth Homes will serve her sentence, what her sentence will be, and how "cushy" she will find things in confinement. The Bloomberg Law story is here. Her sentence is likely to be more substantial than the three years being predicted by anonymous experts in this story. Nevertheless, as a first-time offender with no violent past and a non-violent offense of conviction, she is very likely going to a minimum security camp unless her sentence is longer than 10 years. That's the way the system works.
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Here is the CNN story. The jury acquitted Holmes, the former CEO of blood-testing startup Theranos, on all 4 counts related to the alleged defrauding of patients. She was convicted on 4 counts related to defrauding of investors, including a conspiracy count. The jury hung on 3 additional investor fraud counts. There will be no retrial of the counts that the jury could not reach agreement on, because Holmes' ultimate sentence would not be affected by a guilty verdict on those counts. Moreover, under current Supreme Court case law, the trial court can (unfortunately) consider the government's evidence against Holmes on both the acquitted and hung counts in determining her sentence. The SEC long ago settled its case against Holmes without demanding an admission of wrongdoing on her part. Had she made such an admission there would have been no need for a criminal trial.
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In two cases consolidated for appeal, U.S. v. Yusuf and U.S. v. Campbell, the Third Circuit reversed downward variances based on defense breaches of the plea agreement. Both cases came out of the District of New Jersey and both involved plea agreements that recognized the sentencing court's ability to downwardly vary, but forbade the defense from arguing for a departure or variance below the recommended Guidelines range. The agreements also forbade the government from arguing for a departure or variance above the recommended range. Yusuf pled guilty to aggravate identity theft and conspiracy to commit bank fraud. Campbell pled guilty to felon in possession. Both cases involved mitigating circumstances that typically garner downward variances. Both cases involved sympathetic judges who all but encouraged defense breaches based on their searching inquiries during sentencing. Both cases stand for the proposition that there is a difference between defense counsel presenting the sentencing judge with all relevant facts about the defendant and the offense, including mitigating facts, and defense counsel asking for a downward variance, either directly or through questions to the client. This distinction is critical for defense counsel to keep in mind, even in response to questions for the court. In Campbell, defense counsel had the client ask the court for no jail time. In Yusuf, a much closer case in the Third Circuit's view, defense counsel suggested a sentence below the recommended Guidelines range. The Court distinguished defense counsel's sentencing hearing arguments in Yusuf from those of counsel for Yusuf's co-defendant Adekunle. (Adekunle's case was not on appeal and he had been sentenced by a different judge.) Adekunle's lawyer had reminded the sentencing court of its duty to consider proportionality, and the sentences handed down to co-defendants, but never asked for a downward variance and reminded the court twice that she was bound by the plea agreement: "I am constrained from arguing a below guideline sentence." The government also argued in Campbell that presenting character letters to the court asking for probation violated the plea agreement. The Third Circuit declined to reach this issue, which had not been preserved at sentencing, based on its finding that counsel's arguments alone constituted a breach. The Court cautioned district court judges at sentencing, "to be particularly mindful of the strictures on counsel when plea agreement provisions like the ones here are in place."
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Perhaps one of the most difficult issues to explain to students is that acquitted conduct may be used by a court in sentencing someone convicted of a crime. And it should be difficult to explain this, as it goes against the grain of fundamental constitutional rights at the core of our democracy. It is therefore good to see that US Senators Dick Durbin and Chuck Grassley have "introduced the bipartisan, bicameral Prohibiting Punishment of Acquitted Conduct Act of 2021." " This legislation would end the unjust practice of judges increasing sentences based on conduct for which a defendant has been acquitted by a jury." (see here). Due process demands that this be passed. As noted in Senator Durbin's press release, Justice Scalia in a dissent to a petition for certiorari wrote, "not only did no jury convict these defendants of the offense the sentencing judge thought them guilty of, but a jury acquitted them of that offense." Justices Ginsburg and Thomas had joined in this dissent. This is a strong bipartisan issue that needs correction. (proposed bill here).
See also Cara Salvatore, Law360, Sens. Revive Push to Ban Sentencing for Acquitted Conduct
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Title 18, United States Code, Section 1001, criminalizes certain false statements or omissions made to the federal government. The statute requires that the false statement be material to a matter within the jurisdiction of a federal agency or department. Materiality is an element of the offense that must be alleged and proved beyond a reasonable doubt. It is usually a fairly easy element for prosecutors to establish.
General Michael Flynn was charged with violating Section 1001 in a one count Criminal Information that tracked a portion of the statutory language. The Information was filed in federal court on December 1, 2017, by prosecutors in Special Counsel Robert Mueller's office. Those prosecutors charged Flynn with lying to the FBI during the course of a White House interview conducted on January 24, 2017. The January 24 interview concerned late December 2016 conversations between Flynn and Russian Ambassador Vitaly Kislyak during the post-election Presidential transition period.
A federal court cannot accept a guilty plea without a Factual Basis, sometimes referred to as a Factual Statement or Statement of the Offense. It is typically filed along with the Plea Agreement or is incorporated into the Plea Agreement itself. According to the Statement of the Offense filed in General Flynn's case: "Flynn's false statements and omissions impeded and otherwise had a material impact on the FBI's ongoing investigation into the existence of any links or coordination between individuals associated with the Campaign and Russia's efforts to interfere with the 2016 presidential election." We now know this wasn't true. Flynn's statements, whether false or not, had no effect on the Russian Collusion investigation.
Crossfire Hurricane, launched on July 31, 2016, was the name given to the FBI’s counterintelligence investigation into possible collusion, witting or unwitting, between members of Trump’s campaign team and Russians attempting to influence the 2016 election. Crossfire Hurricane was not begun based on any allegations related to General Michael Flynn. Instead, the Bureau authorized Crossfire Hurricane after it learned, third-hand, that Russia may have “suggested” assisting the Trump campaign by anonymously releasing dirt on Hillary Clinton. An FBI subfile was created on Flynn, not because of any allegations against him, but because of Flynn’s known contacts with Russia. Such contacts would hardly be surprising for a former Director of the Defense Intelligence Agency who was a Trump advisor rumored to be Trump’s choice for National Security Director if he won the election. The subfile investigation of Flynn was known as Crossfire Razor.
FBI officials Jim Comey, Andy McCabe, Peter Strzok, and Lisa Page each knew, well before Flynn's January 24 interview, that the General had no involvement whatsoever in any improper or illegal coordination with Russia regarding the 2016 election. Flynn had already been completely cleared in Crossfire Razor by January 4, 2017. A draft Closing Communication, documenting the complete lack of evidentiary support for Flynn's involvement in, or knowledge of, 2016 election collusion, was prepared on January 4 by the Crossfire Razor team. But the decision to close the file had been made even before January 4. Such a draft Closing Communication would never have been commenced unless the case agents had received prior approval from their FBI Supervisor, and Former FBI Director Comey testified that he authorized the closing of Crossfire Razor by December 2016.
But none of this exculpatory information regarding materiality was shared at any time with the original defense attorneys representing Flynn, either before or after he entered his December 1, 2017 guilty plea. (Nor was it shared with Deputy Attorney General Rod Rosenstein, who was by then the Acting Attorney General for purposes of the Mueller Investigation and had final authority over Mueller's charging decisions.) The knowledge that Flynn's January 24, 2017 interview responses did not influence and were arguably incapable of influencing the Crossfire Hurricane investigation was relevant both to Flynn's guilt and punishment. While there is some uncertainty in the law as to whether Brady material must be turned over to the defense prior to a guilty plea, there is no uncertainty about Judge Emmet G. Sullivan's standing Discovery Order that he enters in every criminal case, and entered in Flynn's. It directs the government "to produce to defendant in a timely manner any evidence in its possession that is favorable to defendant and material either to defendant's guilt or punishment. This government responsibility includes producing, during plea negotiations, any exculpatory evidence in the government's possession."
Flynn had already pled guilty when his case was transferred to Sullivan's court, but he was still awaiting punishment. After the case was transferred, and Sullivan entered his Standing Order, Mueller's team produced voluminous additional documents to Flynn's team. Why did they do this when, under the terms of the Plea Agreement, Flynn was no longer allowed to request additional documents from the government? Because Mueller's prosecutors knew the significance of Sullivan's Standing Order and the additional burden it placed on them. Moreover, Sullivan had Flynn reaffirm his original plea colloquy, under oath, in December 2018. There is thus no question that the information discovered by Eastern District of Missouri U.S. Attorney Jeffrey Jensen, and publicly released for the first time last month at the direction of Bill Barr, should have been produced by Mueller's team to Flynn. What we don't know yet is whether any prosecutor on Mueller's original team, or on the post-Mueller team handling the Flynn case, knew about the recently disclosed documents.
And one more thing. You can ignore commentators like Chuck Rosenberg, who recently listed here, in the Washington Post, all the folks (Trump, Pence, Priebus, etc.) who presumably thought Flynn's allegedly false statements were material. Chuck is relying on the general public's ignorance of federal criminal law. The only materiality at issue in U.S. v. Flynn is the materiality of the January 24, 2017 statements Flynn made to high-ranking FBI Supervisory Agents, which statements formed the basis of Michael Flynn's guilty plea and Statement of the Offense. Those post-inauguration statements about post-election conversations with Ambassador Kislyak, were clearly immaterial to an investigation of election-related collusion that had already cleared Flynn.
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The press is reporting that three four line prosecutors have filed to withdraw from the Roger Stone case. See Matt Zapotosky, Devlin Barrett, Ann E. Marimow & Spencer S. Hsu, Prosecutors Quit Amid Escalating Justice Dept. Fight Over Roger Stone's Prison Term) This is highly unusual to have AUSAs withdraw after they have filed an initial Sentencing Memorandum. It is anticipated that A new sentencing memo has now been filed forthcoming -also unusual.
In the initial sentencing memo the government included a 3C1.1 enhancement for obstruction of justice.The new memo is here (law.com). It excludes enhancements, including 3C1.1 for obstruction of justice. It states in part with regard to this enhancement, "it is unclear to what extent the defendant's obstructive conduct actually prejudiced the government at trial." Yes, this is the government, not the defense, making this statement. The initial memo was a detailed 26 page memo and it was replaced with a 5 page memo. Whether the government should have initially asked for enhancements is something that many will question – but filing a second memo with this language is certainly unusual. Will DOJ be filing memos in all the other cases out there with similar facts?
Two things to also watch here: 1) what will the probation department come in on sentencing; 2) what will the judge give as the sentence. The final decision will be that of the judge.
A question will also be whether there has been any political influence here. Some of us can remember when there was an Investigation of Allegations of Politicized Hiring in the DOJ Honors Program – it didn't go well for DOJ.
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The NACDL recently released an important report detailing the impact of the trial penalty, which is the difference between the sentence a defendant receives in return for pleading guilty and the often much larger sentence he or she receives in return for exercising his or her constitutional right to trial.
From the NACDL press release:
The ‘trial penalty’ refers to the substantial difference between the sentence offered in a plea offer prior to trial versus the sentence a defendant receives after trial. This penalty is now so severe and pervasive that it has virtually eliminated the constitutional right to a trial. To avoid the penalty, accused persons must surrender many other fundamental rights which are essential to a fair justice system
This report is the product of more than two years of careful research and deliberation. In it, NACDL examines sentencing and other data underlying the fact that, after a 50 year decline, fewer than 3% of federal criminal cases result in a trial. With more than 97% of criminal cases being resolved by plea in a constitutional system predicated upon the Sixth Amendment right to a trial, the fact of imbalance and injustice in the system is self-evident. The report identifies and exposes the underlying causes of the decline of the federal criminal trial and puts forth meaningful, achievable principles and recommendations to address this crisis. With its release, NACDL intends to launch a sustained effort to rein in the abuse of the trial penalty throughout federal and state criminal justice systems. The Trial Penalty report, and the principles and recommendations it puts forward, seeks to save the right to a trial from extinction.
The entire report is well worth reading. For those in the white collar field, I'll note that the report contains a specific section on economic crimes. This portion of the report focuses on Section 2B1.1 of the Federal Sentencing Guidelines. The report discusses the role of 2B1.1 and loss calculations in creating incentives for defendants to plead guilty. You can access the entire NACDL report here.
I found the NACDL report particularly interesting as I've engaged in much research on the issue of plea bargaining and sentencing differentials, including the impact of such incentives on innocent defendants. In one study, we found that 56% of innocent participants were willing to falsely confess guilt and "plead guilty" in return for a bargain. You can read more about those findings and the issue of plea bargaining's innocence issue here.
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Alexander van der Zwann is the first individual to be sentenced from Special Counsel Mueller's Investigation (see here). The sentence is 30 days. (see here & here). According to the terms of the plea agreement, he faced a maximum of 5 years imprisonment. (see here). The agreement called for a level 6 under the sentencing guidelines, with a reduction of 2 for acceptance of responsibility, finalizing at a level 4. The details of the false statement that led to the violation of 18 U.S.C. 1001 are here.
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A few weeks ago, in United States v Nesbeth (15 CR-18, EDNY, May 24, 2016) Judge Frederic Block wrote an important opinion on the effect of post-conviction collateral consequences on one convicted of a felony, and as a result of such consequences imposed a one-year probation sentence on a woman convicted of importing cocaine. He wrote that "sufficient attention has not been paid at sentencing by me and lawyers – both prosecutors and defense counsel – as well as by the Probation Department to the collateral consequences facing a convicted defendant." He went on to a history of collateral consequences, efforts at reform, and the breadth of post-conviction statutory and regulatory collateral consequences. He noted the "broad range of collateral consequences that serve no useful purpose other than to punish criminal defendants after they have completed their court-imposed sentences."
The opinion is a call for reform, for mitigation of sentences because of such additional punishment, and for increased awareness of collateral consequences by all participants in the sentencing process. Judge Block specifically called for probation officers "to assess and apprise the court, prior to sentencing, of the likely collateral consequences facing a convicted defendant."
Judge Block recognized an apparent Circuit split as to whether collateral consequences may be a mitigating factor in sentencing. The Sixth, Seventh, Tenth and Eleventh Circuit seemingly have found that collateral consequences may not be considered, while the Second and Fourth Circuits appear to have found that they may. I believe that under 18 USC 3553(a) they may, especially when atypical, be considered.
White-collar defendants obviously face not only the usual collateral consequences applicable to all convicted felons, but often also special ones such as loss of licenses or other professional bars. I personally have had limited success in appealing to judges to mitigate sentences against white-collar defendants because of collateral consequences. Many judges feel that that to consider those factors would favor the rich and well-educated over the poor and less-educated. To be sure, as Judge Block's opinion demonstrates, the poor and less-educated too suffer from such collateral consequences.
Defense lawyers should, as Judge Block writes, be aware of such consequences in order to set them forth as mitigating factors at sentencing. Such knowledge is also necessary to inform defendants of these consequences so that they may make an educated decision whether to plead guilty. As indicated by the flurry of defendants who have claimed they were unaware that their guilty pleas would subject them to deportation, lawyers historically may not have focused on collateral consequences.
MattBray.net 