Articles Posted in Current Events in Criminal Law (New York)

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This week, American law enforcement officers arrested Aurelien Michel, a French national living in the UAE, as he passed through JFK International Airport in New York City. He has since been arraigned before a federal magistrate judge in the Eastern District of New York (Brooklyn) on federal wire fraud charges, pursuant to 18 USC Section 1343. A complaint unsealed in federal court alleges that Mr. Michel advertised and marketed a series of Mutant Ape NFTs (non-fungible tokens) and collected nearly three million dollars in sales of various cryptocurrencies from numerous buyers and investors. However, it is further alleged that Mr. Michel never delivered the NFTs to his investors, but instead transferred this money to various accounts controlled by him. The complaint alleges that he later apologized on the platform Discord for the “rug pull” (i.e. a slang term for failing to deliver after receiving funds) because the community had become too “toxic.”

It would appear from the complaint that Mr. Michel has an obvious defense that he did not intend to defraud anyone, and that he fully intended to give his customers their NFTs eventually. He may have received the funds and then encountered difficulty in acquiring the NFTs for his customers due to volatile market conditions or other issues.

It is always difficult to estimate sentencing exposure at this stage of a criminal case, but preliminary estimates might suggest the following for Mr. Michel:

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Recently Manhattan federal prosecutors announced the arrests of 17 individuals for allegedly defrauding the federal government’s Small Business Administration (SBA) COVID-relief program called the Paycheck Protection Program. In a nutshell, these individuals are accused of wire fraud for purportedly applying for small business relief funds on behalf of small businesses (or sole proprietorships) that either did not exist or did not generate the revenues described in their loan applications.

For many small businesses, the SBA’s various COVID-relief programs, including the Paycheck Protection Program, were critical in helping those businesses survive the once-in-a-generation economic downturn created by the pandemic. However, the fraudulent abuses of the program have become almost legendary and have recently been the subject of many Congressional inquiries.

The Department of Justice this year launched a task force to prosecute – at the federal level – crimes involving abuse of the COVID relief programs. So, one should expect to see more such prosecutions launched against individuals in the near future.

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Recently, federal prosecutors in Brooklyn brought an indictment against eight individuals – including a medical doctor, three pharmacists, and several members of the doctor’s staff – for their alleged operation of a $24 million oxycodone ring that illegally diverted over 1.2 million pills. Prosecutors are motivated to bring these sorts of criminal charges because of the rapid and terrifying national rise in fatal opioid overdoses. The charges against the defendants include conspiracies to distribute narcotics (21 USC 846 and 841(b)(1)(C)) and money laundering, for concealing and structuring the illegal kickbacks and payments for the narcotics. In short, the defendant doctor is alleged to have written unnecessary prescriptions that were filled by the defendant pharmacists in exchange for illegal kickbacks, and employees of the doctor and pharmacist laundered these illegal proceeds.  Presumably, a cooperating witness revealed the scheme to law enforcement, but that remains unclear.

These charges carry significant potential jail sentences, as well as enormous possible money forfeitures. If it is shown that anyone died as a result of an overdose from one of these illegally distributed pills, then the defendants could easily be facing sentences in excess of ten years or more.

The Law Office of Matthew Galluzzo PLLC has significant experience representing alleged narcotics traffickers in federal court, especially in cases involving opioids and fentanyl. If you or a loved one are a doctor, pharmacist, or other alleged to have participated in an doctor-centered scheme to distribute narcotics, you should strongly consider contacting the Law Office of Matthew Galluzzo PLLC. Their lead counsel has had success representing defendants accused of these crimes and has obtained good results.

 

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Federal prosecutors sometimes have a powerful statute to use against drug sellers whose products cause fatal overdoses. Specifically, 21 U.S.C. Section 841 – the most common federal narcotics distribution charge – includes enhanced penalties for situations in which the defendants have sold or distributed narcotics that caused overdose deaths. A charge with no mandatory minimum under normal circumstances might carry a 20-year minimum where it can be proven that the drug that was sold caused someone to die. Some prior felons can also face potential mandatory life sentences for selling narcotics that cause fatalities. Even in a case in which the prosecution may not be able to prove beyond a reasonable doubt that the narcotics caused a death, the prosecution may be able to secure a very stiff sentence under the federal Sentencing Guidelines, where the evidence proves by a preponderance of the evidence that the defendant’s product is responsible.

First, the government has to prove that the defendant actually sold drugs to the deceased person. Law enforcement frequently uses text messages and phone records to prove transactions in these cases. Law enforcement also frequently attempts to purchase narcotics themselves (undercover) from the target/suspect. That way, in the very least, the government can prove a charge of 21 U.S.C. Section 841, if not the overdose aspect.

Many drug overdoses are polydrug situations, meaning that the deceased person ingested more than one drug recently. In those cases, it can be more complicated to ascertain the precise “but for” cause of death. Certain drugs may interact with each other in unclear ways, and other drugs may work together in aggregate towards the same toxidrome. It is critical to have the assistance of a toxicological expert and an attorney familiar with some of the issues in overdose analysis. Many if not most of the federal prosecutions in this sphere nowadays involve fentanyl, and that drug is indeed far more potent, prevalent and deadly than most others. But that doesn’t mean that fentanyl – even when it shows in the victim’s bloodwork – is always the but for cause of death.

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Following her conviction at trial in the Southern District of New York for various federal charges relating to the sex trafficking of minors, disgraced Jeffrey Epstein associate Ghislaine Maxwell received a sentence of 20 years in prison. She will get credit towards that sentence for the time she has already spent in prison, and assuming she receives the maximum amount of good time credit for her behavior in custody, she will probably only serve about 85% of that sentence, or 17 years.

The question on everyone’s mind has been whether Ms. Maxwell will finally disclose the names of the other purportedly rich and powerful celebrities who engaged in illicit conduct with minors and Jeffrey Epstein. Ms. Maxwell has steadfastly refused to do that, even after Epstein’s death (to the surprise of some). Ms. Maxwell initially denied being knowingly involved in any criminal conduct, and her statement at sentencing was hardly an apology, either.

Ms. Maxwell may also have a legitimate ground for an appeal to the Second Circuit Court of Appeals. After the verdict, a juror disclosed that they had not told the Court during jury selection about having been a victim of a sexual assault. Judge Nathan (the trial judge) denied a motion for a new trial on that basis, and Maxwell will almost certainly pursue that argument on appeal.

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Yesterday, during the Oscars award show in Los Angeles, comedian Chris Rock – the emcee/host of the event – made a joke about Jada Pinkett Smith’s hair loss. Will Smith, her husband and a famous actor, promptly walked onstage and smacked Rock hard in the face. Smith then sat back in his seat and cursed repeatedly at Rock. Obviously, this happened in California, so California state law applies to Smith’s slap. Apparently, Chris Rock has decided not to file any criminal charges or make any police reports in connection with the event, which was obviously witnessed by millions of people on live television.

This interesting and unexpected exchange provides a fun example to consider New York criminal law: What charges, if any, might have applied to this slap had it happened onstage in New York?

The most significant plausible charge here would be the Class A misdemeanor or Assault in the Third Degree (Penal Law Section 120.00). That statute makes it a misdemeanor punishable by up to a year in jail to intentionally cause physical injury to another person. Here, however, it does not seem that Chris Rock suffered any physical injury significant enough to justify the charge. Indeed, although he was obviously dazed and it appeared to be a fairly hard slap, Rock carried on with his emcee duties and even made a few quips about what had happened. A physical injury, as defined by New York law, is supposed to be “substantial pain” and/or “impairment of a bodily function.” Surely Rock felt some pain from the slap, but it appears to have been too temporary to have really justified an assault charge under New York law.

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After a long trial followed by over forty hours of jury deliberations, Ghislaine Maxwell finally stands convicted of several federal charges relating to the sexual abuse of minors. Ms. Maxwell somewhat curiously chose not to testify in her own defense, and she now faces a sentence of up to 65 years in federal prison. Ms. Maxwell’s fight is far from over, but ultimately it will almost certainly lead to one final choice: cooperate with the government or die in prison.

After a federal conviction – by guilty plea or by jury verdict – the defendant is interviewed by a specialized officer from the U.S. Department of Probation. These officers typically have backgrounds in social work, and it is their responsibility to prepare a biography – or presentence report – for the court. The judge uses this presentence report at sentencing to understand the defendant’s life, background, and circumstances. (The Bureau of Prisons also uses this report in determining the defendant’s prison designation.) The preparation of a report can easily take two months or more, as the interview has to be scheduled, a draft report prepared, edits and objections made by both the defense and the prosecution, and a final draft with a sentencing recommendation submitted to the sentencing court.

Following the preparation of the presentence report, both the prosecution and defense prepare sentencing memoranda for the judge. Both sides make arguments about the proper application of the U.S. Sentencing Guidelines and the sentencing factors pursuant to 18 U.S.C. § 3553(a). Defense lawyers usually submit character letters from friends and family of the defendant, and sometimes the defendant also submits his/her own letter of remorse. Eventually, the sentencing court then holds a sentencing hearing at which both sides make oral arguments about the sentence and the court pronounces its decision. That sentencing hearing could be anywhere from 4 to 6 months after the conviction, though it could take even longer.

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Platinum selling rap artist Fetty Wap (real name Willie Junior Maxwell II) was arrested and arraigned on October 29 pursuant to a federal indictment charging him and five other men with Conspiracy to Distribute Narcotics (the other five men were also charged with Use of Firearms in Connection with a Drug Crime). The charges are incredibly serious and Fetty Wap faces very significant jail time.

According to a press release from the U.S. Attorney’s Office for the Eastern District of New York, the rapper and five other men trafficked in significant quantities of heroin, cocaine, and the especially-dangerous drug, fentanyl. The defendants (including Anthony Leonardi, Robert Leonardi, Brian Sullivan, Anthony Syntje, and Kavaughn Wiggins) have all been arrested and detained pending trial. Prosecutors claim to have recovered at least 16 kilograms of cocaine, 2 kilograms of heroin, and fentanyl, though it is certain that they will allege that the group is responsible for far more than that. Indeed, the press release describes the amount of drugs trafficked by the crew as “massive”.

Fetty Wap is unlikely to be released on bail pending trial, though it may be possible given his likely financial resources. However, in federal narcotics cases of this size and scale, the presumption for judges is that a defendant should be detained pending trial. Fetty Wap would have to convincingly demonstrate that he does not pose a risk to the public, and that he would not flee if released on bond. Given his resources (and possible ability to live abroad), the amount of prison time that he is potentially facing, the fact that his codefendants are indicted for using firearms, and the fact that he allegedly trafficked in fentanyl, which is notorious for causing fatal overdoses, it seems unlikely that he will be bailed out pending trial.

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It was recently announced by the New York Attorney General’s Office that disgraced former New York governor Andrew Cuomo would be criminally prosecuted for an alleged groping of a female staffer at the governor’s mansion in Albany. 

Specifically, Cuomo will be charged with one count of Forcible Touching, in violation of Penal Law Section 130.52.* That code makes it a class A misdemeanor to intentionally, and for no legitimate purpose:

1. forcibly touch the sexual or other intimate parts of another person for the purpose of degrading or abusing such person, or for the purpose of gratifying the actor’s sexual desire;  or
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Today, the U.S. Attorney’s Office for the District of Connecticut announced the arrest of Democratic State Representative Michael DiMassa for allegedly defrauding over $600,000 from the city of West Haven. The federal wire fraud charges carry a maximum penalty of 20 years in prison.

According to a press release from the prosecutor, Mr. DiMassa supposedly formed an LLC with another person and used that LLC to bill the City of West Haven for consulting services that were not in fact provided. Allegedly, Mr. DiMassa made withdrawals from the LLC at about the same time he made large chip purchases at Mohegan Sun casino. One might suspect the government to argue that Mr. DiMassa’s fraud was the result of a gambling addiction.

Of course, nothing has been proven as of yet. But if Mr. DiMassa is in fact convicted of wire fraud for allegedly stealing $600,000, he is likely looking at a Federal Sentencing Guidelines range of between 33 and 57 months. In federal cases, crimes have minimum and maximum penalties, but judges use an advisory system called the Federal Sentencing Guidelines to narrow down the sentencing range. Those guidelines give defendants and attorneys an idea of what to expect at sentencing, but are nevertheless just approximations. This table provides the guidance.

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