United States v. Vampire Nation

Since Banks had not raised the objection that the court had failed to provide prior notice of the contemplated upward variance at the time of his actual sentencing, the appeals court was limited to plain error as its standard of review, Van Antwerpen wrote. Under that standard, the alleged error of the lower court would have to be very obvious and serious enough to have conceivably affected the outcome of the proceeding.[8]

Van Antwerpen began by noting that Rule 32(h) had been passed by Congress in response to the Supreme Court's 1991 holding in Burns v. United States that courts did not have discretion to depart upward from the guidelines, which then had the force of law, without notifying the parties.[15] But since Booker had held that the guidelines were advisory, courts were freer to adjust sentences as long as they started from a range derived from the guidelines. "Thus, district courts continue to consider all grounds properly advanced by the parties at sentencing, as they did in the past," the judge wrote. That included all the factors that had always been present in the statute governing sentencing.[16][8]

Before Booker, defendants had had firmer reasons to expect a sentence within the guidelines. Hence, Rule 32(h) was passed after Burns, requiring that courts give prior notice of a contemplated departure "on any grounds." Van Antwerpen quoted the Seventh Circuit, which had recalled the "unfair surprise" that led to Burns in reaching a similar conclusion about the applicability of Rule 32(h) to contemplated variances prior to Booker.[17] Since the guidelines were now advisory, a court could consider grounds other than those outlined for departures, including the factors in the statute, which had not been repealed.[8]

"Accordingly, given that defendants are aware that courts will consider the broad range of factors set forth in [the law] at sentencing, we perceive none of the 'unfair surprise' considerations that motivated the enactment of Rule 32(h)," Van Antwerpen wrote. Chondos, he added, had conceded the point during oral argument. "[R]equiring advance notice of "any ground" beyond the factors set forth in [statute] would undoubtedly prove to be unworkable." He ended that portion of the opinion by affirming another recent Third Circuit holding that continued, post-Booker, to require prior notice of a contemplated departure from the guidelines[18] and admonished district courts to state explicitly whether any adjustments to sentences they made outside the ranges fixed by the guidelines were variances or departures.[8]

The federal mail fraud statute authorized civil forfeiture as a punishment for any conviction, and criminal in personam forfeiture for "special circumstances" frauds that victimized a financial institution.[19] As part of the Civil Asset Forfeiture Reform Act of 2000 (CAFRA), Congress had added language allowing federal prosecutors to request, upon presentment of the indictment or information bringing the charges, criminal forfeiture for any crime punishable by civil forfeiture where criminal forfeiture was not specifically authorized.[20] The government had done so in this case, but Banks argued that the "special circumstances" provisions of the mail fraud statute controlled, barring it from having that request granted where the fraudulent scheme had not victimized a financial institution.[9]

Since it was a question of law, the court exercised plenary review. Van Antwerpen considered two district court opinions that came to opposite conclusions on the question. Within the Third Circuit, Judge Stewart Dalzell of the Eastern District of Pennsylvania had denied a government request for criminal forfeiture in United States v. Croce, a mail fraud case involving three defendants who had charged Blue Cross/Blue Shield $14 million for goods and services they never provided, following Banks' logic.[21] But in the Second Circuit, Judge Arthur Donald Spatt of the Eastern District of New York had in a similar case of textile manufacturers who defrauded insurers and creditors dismissed that argument as "add[ing] qualifying language that is simply not in the statute."[22]

To resolve the conflicting interpretations, Van Antwerpen began with the plain meaning of CAFRA.

Criminal forfeiture is not permitted unless (1) a substantive provision exists for civil forfeiture of the criminal proceeds at issue; and (2) there is no specific statutory provision that permits criminal forfeiture of such proceeds. Thus, we read the statute ... [as permitting] criminal forfeiture when no criminal forfeiture provision applies to the crime charged against a particular defendant but civil forfeiture for that charged crime is nonetheless authorized.[9]

In Croce, Dalzell had said it was "highly unlikely that, in passing the broad language of [CAFRA], Congress intended to silently remove the limitations on criminal forfeiture in mail fraud cases."[23] While that "presents a plausible construction of the statute, we are not persuaded," Van Antwerpen commented. CAFRA stated that "a forfeiture is authorized in connection with a violation of an Act of Congress"[20]

Van Antwerpen pointed to the federal money laundering statute, which Banks had also been convicted of violating. It included a long list of offenses[24] under which civil forfeiture was permitted, which further included by reference a similar list of crimes in the Racketeer Influenced and Corrupt Organizations Act that specifically included mail fraud without limiting it to mail fraud affecting financial institutions.[25] He read "this chain of cross-references" to "explicitly permit criminal forfeiture for general mail fraud, not just for mail fraud against financial institutions."[9]

The text of the statutes may have been ambiguous when read by themselves, allowing for Dalzell's Croce interpretation. But Van Antwerpen believed the statute's legislative history justified the court's more expansive reading in the instant case. A House committee's report on the bill had explicitly stated that its goal was "to extend proceeds forfeiture (both civil and criminal) to the crimes enumerated in the money laundering statute." Congress had also removed the language restricting criminal forfeiture to mail and wire frauds affecting financial institutions from the list of crimes for which forfeiture was authorized, he noted. "In our view, Van Antwerpen concluded, "Congress's expansion of the crimes for which civil forfeiture is available taken in conjunction with its decision to enact [legislation] which broadened the range of crimes for which criminal forfeiture was available, can only be viewed as intent to make criminal forfeiture essentially coextensive with civil forfeiture."[9]

In an earlier ruling in Croce, Dalzell had similarly held that a criminal forfeiture judgement for more than the defendant had was not authorized by the statute and contrary to the history of how forfeiture had evolved in American law.[26] Other precedent in the Third Circuit[27] and elsewhere,[28] Van Antwerpen noted, held clearly that the government was entitled to ask for, and receive, a forfeited amount equal to what it determined to be the full proceeds of the criminal activity without regard to the defendant's actual holdings as of the sentencing. "[A]dopting Banks's position would permit defendants who unlawfully obtain proceeds to dissipate those proceeds and avoid liability for their ill-gotten gains," he observed.[10]

Addressing Banks' other claims, which he had not raised at trial, Van Antwerpen found no plain error. The government's unrebutted testimony from a Microsoft antipiracy specialist that Banks' copies of their products were unauthorized, that they were probably covered by the company's copyrights and that he had been sent cease and desist letters was enough to establish that the products were copyrighted.[11] An existing circuit precedent[29] held that jury instructions that described the elements of the offense in the disjunctive when the indictment used the conjunctive, as Banks' had, did not constructively amend the indictment. Likewise, he upheld the witness tampering instruction since it had clearly referenced any proceeding including a grand jury, and Banks' reference to a subpoena in his email to Do indicated he was aware of the ongoing grand jury proceeding.[12]

Van Antwerpen considered Banks' claim that he had been improperly denied his request to represent himself under plenary review. He interpreted the denied motion, one of many Banks filed during the trial, as to equivocal to have been worthy of serious consideration by the court, more an expression of Banks' frustration that the prosecutor could only talk to his attorney and not to Banks directly.[12] Lastly, since Banks did not file his motion for Judge Thomas Hardiman to recuse himself over the complaint, one of many pro se motions he made over the course of the trial, until after he was sentenced, Banks could not raise it on appeal.[13]