Articles Posted in U.S. 6th Circuit Court of Appeals

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Snelling defrauded investors by soliciting funds for two fictitious financial companies, CityFund and Dunhill, which supposedly invested clients’ money in overseas mutual funds and overnight depository accounts, and promised investors an annual return of 10 to 15%. In reality, Snelling and his partner operated a Ponzi scheme in which “returns” on earlier investors’ capital were part of new investors’ deposits. The rest of the new deposits went to Snelling and his partner, who used the money to buy vacation houses and boats, pay private-school tuition, and live extravagantly. Among the tactics they employed were intentional targeting of victims’ IRA and 401(k) accounts, issuance of false quarterly statements by mail and, in confronting investors’ suspicions, production of false records that showed a balance of $8.5 million in the fund when it actually held $995.. Neither Snelling nor his partner paid taxes on the diverted funds. Snelling pled guilty to conspiracy to commit mail and wire fraud, 18 U.S.C. 1349; obstruction of justice, 18 U.S.C. 1519 and 2; and tax evasion, 18 U.S.C. 7201. Snelling appealed his 131-month prison sentence, claiming that the Guidelines-range calculation employed a loss figure that did not take into account the sums paid back to investors in the course of the fraud. The Sixth Circuit agreed and vacated the sentence. View "United States v. Snelling" on Justia Law

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Bell dealt crack cocaine for years and customarily cooked it in his kitchen; police stopped his car after receiving a tip and found 58 grams of crack cocaine and thousands of dollars in cash. In his home they found three police scanners, a digital scale, and drug-packaging materials. His ex-wife, who still lived in Bell’s house, had removed thousands of dollars in cash, packaged-to-sell crack cocaine, and guns from the house after he called her from jail. Based on those facts, the district court imposed a two-level enhancement to his sentence under U.S.S.G. 2D1.1 for maintaining a premises for the purpose of manufacturing and distributing drugs. The Sixth Circuit affirmed; precedents under the guideline do not carve out residences as safe havens from being drug-production premises. View "United States v. Bell" on Justia Law

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Elsass and his companies, FRG, and STS, were charged with violations of the Tax Code, including claiming theft-loss deductions for losses that did not involve criminal conduct, claiming those deductions before it was clear that there was no reasonable prospect of recovery, falsely characterizing theft losses as losses incurred in a trade or business to artificially inflate refunds, claiming theft-loss deductions to which taxpayers were not entitled because the losses were incurred by deceased relatives, negotiating customers’ tax-refund checks and depositing them into defendants’ bank accounts, falsely indicating that Elsass was an attorney in good standing, making deceptive statements to customers that substantially interfered with the administration of the tax laws, promoting an abusive tax shelter through false or fraudulent statements about the tax benefits of participation, and aiding and abetting the understatement of tax liability. The district court held that there was no genuine issue as to whether Elsass and FRG had engaged in each of these prohibited practices and enjoined them from serving as tax-return preparers. While it granted summary judgment to STS with respect to all claims except on, because STS is wholly owned by Elsass, it enjoined STS to the same extent as Elsass and FRG. The Sixth Circuit affirmed. View "United State v. Elsass" on Justia Law

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Young helped a neighbor sort and sell her late husband’s possessions, including a box of seven shotgun shells, which he stored in a drawer where they would be safe from his children. Young had been convicted of several burglary-related offenses, 1990-1992, so it was a crime for him to possess ammunition. He was unaware of this legal disability. Police later visited Young’s home, investigating recent burglaries at an auto repair shop and a storage building. During the consent search, officers found items reported stolen and the shotgun shells. The government charged Young as a felon in possession of ammunition, 18 U.S.C. 922(g)(1). The statute carries a 15-year mandatory minimum sentence for anyone who has at least three prior felony convictions. Young argued that the ACCA mandatory minimum sentence, as applied to him, would violate the Eighth Amendment because it is grossly disproportionate to his offense. His advisory Guidelines range, absent the ACCA would have been 10-16 months. He also argued that he did not have fair notice of the prohibition against felons possessing ammunition. The district court expressed concerns about fairness, but determined that it had no discretion and imposed a 15-year sentence. The Sixth Circuit affirmed. That the magnitude of Young’s crime culpability, and motive were low is offset by his recidivism. View "United States v. Young" on Justia Law

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Farah was a member of the Somali Outlaws gang, but renounced his affiliation with the gang. In 2010, while in immigration custody Farah agreed to assist in a government investigation. Farah believed that he would receive immunity from prosecution, reversal of the revocation of his work permit, help obtaining citizenship and release from custody. Farah was granted transactional immunity, testified before the grand jury, and assisted with the identification and location of gang members. Gang members apparently suspected his involvement and threatened Farah, who then refused to testify at trials concerning conspiracies including sex trafficking of minors, interstate transportation of stolen goods. and other offenses. Farah was convicted of violating 18 U.S.C. 401(3), for willfully disobeying an order requiring his testimony by deposition and for violating 18 U.S.C. 1591(d), which prohibits obstruction, or attempt to obstruct enforcement of section 1591(a), a child sex trafficking statute. The Sixth Circuit vacated the section 401(3) conviction as violating the Double Jeopardy Clause and the rule of Yates v. United States. Farah’s Double Jeopardy rights were only partly violated because he was also convicted of obstructing or attempting to obstruct the child sex trafficking laws; that conviction passes the “same elements” test of Blockburger v. United States. View "United States v. Farah" on Justia Law

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Henness was indicted for murder with prior calculation and design; aggravated robbery-murder; and kidnap-murder. He also was charged with aggravated robbery, kidnapping, four counts of forgery, and having a weapon while under disability. Henness pled guilty to the forgery counts and was convicted of the remaining counts. The trial court adopted the jury’s recommendation that he be sentenced to death. The Ohio Court of Appeals and Ohio Supreme Court affirmed. In 1996, Henness filed a state post-conviction petition, which the trial court denied. The Ohio Court of Appeals affirmed. The Ohio Supreme Court denied Henness permission to further appeal this decision. In 2001, Henness moved to reopen his direct appeal. The court denied the motions because Henness had not established good cause for his failure to timely file the motions. The Ohio Supreme Court rejected his appeal as untimely. In 2001, Henness filed his 28 U.S.C. 2254 petition, which the district court dismissed as meritless. The Sixth Circuit affirmed. In 2013, Henness filed the current Rule 60(b)(6) motion, seeking to revisit the previous dismissal of several ineffective assistance of trial counsel claims. The Sixth Circuit affirmed the district court’s denial of the motion as meritless. View "Henness v. Bagley" on Justia Law

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Clark was charged with making a false statement to a federally licensed firearm dealer, 18 U.S.C. 924(a)(1)(A), and with possession of an unregistered sawed-off shotgun, 26 U.S.C. 5861(d). She entered a nolo contendere plea to the false-statement charge and a guilty plea to the possession charge. In 2008, the district court sentenced Clark to 60 months for the false-statement charge and 108 months for the possession charge, to be served concurrently. The Sixth Circuit affirmed Clark’s convictions and sentences and allowed counsel to withdraw. In 2010, Clark filed a pro se motion under 28 U.S.C. 2255 to vacate, set aside, or correct her sentence, claiming ineffective assistance and that her plea was not knowing or voluntary. A magistrate recommended denial. Clark did not object to the recommendation, but moved to amend, claiming that “severe depression” made her unable to file a comprehensive motion in the first instance. She sought to add claims that the four-level enhancement for transferring a firearm to be used in a felony and the two-level enhancement for obstruction of justice were incorrectly applied and alleging selective prosecution and judicial misconduct. The district court denied the motion and dismissed her petition. Clark did not timely appeal, but filed a second, identical, motion to amend, which was also denied. The Sixth Circuit affirmed. View "Clark v. United States" on Justia Law

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Fabian, a financial advisor, diverted millions of dollars to companies that he controlled. He pled guilty to wire fraud, 18 U.S.C. 1343, and agreed to criminal forfeiture, 21 U.S.C. 853, of $4.8 million. He paid one million dollars. After U.S. Marshals inventoried his property, the district court entered an order that listed, as substitute property subject to forfeiture, real property and more than 800 items of personal property, including a collection of military trucks and equipment. Mais a victim of the fraud and member of a companies that Fabian controlled, contested the forfeiture, claiming that property in which Mais asserted a “legal interest” lacked any “nexus” to Fabian’s fraud. The district court dismissed for lack of standing. The Sixth Circuit affirmed. Under section 853(k), a third party “claiming an interest in property subject to forfeiture” cannot “intervene in a trial or appeal of a criminal case involving forfeiture of such property.” Nor can third parties file a separate lawsuit to assert their interest in forfeitable property. A district court “must enter” its preliminary order of forfeiture “without regard to any third party’s interest in the property.” The sole avenue for a third party to assert an interest in forfeitable property is an ancillary proceeding under section 853(n). Mais’s petition asserted only a conclusory legal interest in the properties, which Mais conceded does not meet the requirements of 853(n)(3). View "United States v. Fabian" on Justia Law

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U.S. Marshals arrived at Krause’s Redford home on December 12, 2008 with a warrant for Krause’s arrest for felony possession of more than 50 grams of cocaine. When Krause saw the Marshals, he slammed the door shut and ran into a bedroom. The Marshals followed. One entered the bedroom but left when he found Krause standing in the corner pointing a handgun at him. As the others took up positions around the bedroom, they again announced themselves and explained they had a warrant for his arrest. Krause told them he had multiple guns and would kill anyone who tried to enter. A negotiator began talking to Krause from the hallway outside the open bedroom door. They talked for about eight hours. Sometimes Krause yelled and screamed; sometimes he “got very quiet.” Officers brought in Krause’s father and girlfriend to talk to Krause, without success. Eventually, the officers used a “flash bang” device in an effort to stun Krause. In the seconds that followed, Krause fired a shot at the officers; an officer fatally shot Krause in response. In a suit under 42 U.S.C. 1983, the district court granted qualified immunity to the officers. The Sixth Circuit affirmed. The decisions to use a flash bang and to shoot Krause were reasonable, not “reckless,” View "Krause v. Jones" on Justia Law

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Using the ARES Peer-to-Peer network, DHS agents downloaded child pornography images from Mabee's Internet address six times in 2012. Agents confronted Mabee at his home and Mabee admitted that he used the ARES software to download child pornography. Forensic examiners recovered at least 73 images and 14 videos, as well as evidence that Mabee had “searched extensively for child pornography using the ARES program.” All of the videos and one of the images had been stored so that they were available for other ARES users to download from Mabee’s computer. Mabee pleaded guilty to a distribution count; other counts were dismissed under Mabee’s Rule 11 plea agreement. Mabee admitted that he knew that the child pornography he had downloaded was available to other ARES users. There was no agreement as to Sentencing Guidelines factors or the appropriate guideline range. Mabee appealed his 121-month sentence arguing that the court misapplied a five-level offense level enhancement (U.S.S.G. 2G2.2(b)(3)(B)), for “receipt, or expectation of receipt, of a thing of value, but not for pecuniary gain.” Mabee argued that the record showed only that he used ARES to download and store child pornography, and there was no evidence that he engaged in trading of images with others. The Sixth Circuit affirmed. The district court could have relied on circumstantial evidence in the record that Mabee made his own computer files available because he expected to receive additional pornography from others. View "United States v. Mabee" on Justia Law