Vol. 5, No. 44        As Published in the Advance Sheets on November 2, 1998       Copyright © 1998

Highlights of this Issue:  

Leading Case  

Prison Cases  

U.S.S.G. and Sentencing Issues 

United States v. Silkman, 156 F.3d 833 (8th Cir. 1998) (Judge Loken)

This is a rare tax evasion case which the defendant won, largely because he was able to convince the Court of the inherent unfairness of the IRS's practice of issuing "naked assessments."  Technically, the issue in this case was "whether an IRS tax assessment that is administratively final for the purposes of the agency's civil collection remedies is also conclusive proof of the tax deficiency in a tax evasion prosecution?"  (Id., at 835).  To that question of first impression on the Eighth Circuit, the Court answered in the negative, concluding that the Government had no authority for its "startling contention"; and it therefore reversed the defendant's conviction.

In fact, the arguments raised in this case were much broader than the single issue addressed by the Court, and for that reason we have included a copy of the brief filed in this case by famed tax attorney Lowell Becraft in the Briefs and Motions section of our Web site at www.fedcrimlaw.com/.  We also note that Attorney Becraft maintains his own Web site at http://home.HiWAAY.net/~becraft, where there is a valuable collection of articles dealing with many current and provocative tax issues.

The facts of this case are as follows: In March 6, 1991, the IRS issued a statutory "notice of deficiency" to the defendant Silkman, seeking to assess Federal income taxes against him for the years 1981 through 1985.  Silkman responded to the notice by sending letters to the IRS expressing his objections to the calculation of the taxes due; and when the IRS did not respond to his letters, Silkman concluded that the matter had been resolved.

Silkman, however, did not petition the Tax Court for any relief; and this failure to challenge this determination through the Tax Court led to an administrative assessment of a large amount of taxes against him on  September 16, 1991.  When Silkman failed to pay the amount set forth in the deficiency notice, he was indicted for wilful evasion of income taxes under 26 U.S.C. § 7201.  The indictment alleged that Silkman had used various schemes to liquidate his property for the purpose of preventing the Internal Revenue Service from collecting the taxes due.

It should be noted that Silkman had tax problems of various sorts in the past; and, while in previous litigation the IRS had issued a summons to him to obtain information about his income, in this case it refused to avail itself of that remedy.  Instead, it relied on government statistics and Form 1099 information to conclude what Silkman's income had been in the years in question.  Concluding that the Government's calculation of the taxes was both arbitrary and erroneous, Attorney Becraft's commented on the IRS's procedures with these words:

"Naturally, the amount of taxes allegedly due for these years according to the IRS' calculations was just simply a wild guess. From Silkman's viewpoint, during these years he had large losses and the reason why he did not file returns was because he believed that with losses he was not required to file returns.  Silkman's beliefs that he did have substantial losses was a provable fact; he meticulously kept most of the records regarding his business expenses incurred during these years and just these records alone demonstrated large expenditures for his farming operation. When these expenses are compared against the income the IRS proclaimed Silkman made during these years, losses are shown for four of the five years at issue. But the losses for the first four of these years are so large that any alleged gain in the last year is negated by loss carryovers. Consequently, Silkman had an excellent case that he owed no taxes and thus could not be convicted of tax evasion."

Before the case went to trial, Silkman filed various discovery requests for the IRS's actual assessment documents; but, in accordance with its practice of keeping its assessment procedures secret, the IRS simply stonewalled those discovery requests.  When the trial commenced, Silkman attempted to introduce evidence supporting his contention that he owed no taxes and that he did not intend to evade taxes.  At the Government's urging, the district court (Judge Battey) refused to allow him to introduce such evidence.  Effectively agreeing with the Government's theory of the case that "once a tax is assessed, that is the tax liability", the court instructed the jury that the tax assessment for each year "establishes the tax liability" - even though the Government made absolutely no effort to show what Silkman had earned during the years in question.

When Silkman was convicted, he appealed, raising several issues, one of which was that the district court had erred in excluding all evidence of his actual income and expenses in the years in question.  On that issue, the Court firmly ruled that "an assessed deficiency may be challenged by the defendant accused of tax evasion, and the issue is one for the jury. . . . The government argues, in effect, that the alleged tax deficiency may be conclusively presumed from an administratively final assessment.  But conclusive presumptions are invalid in criminal cases because they ‘conflict with the overriding presumption of innocence with which the law endows the accused and which extends to every element of the crime, and which would invade the factfinding function which in a criminal case the law assigns solely to the jury' Sandstrom v. Montana, 442 U.S. 510 (1979). . .  [I]t is not rational to make the assessment conclusive proof of the deficiency, particularly because in the absence of a tax return an assessment is based upon a ‘substitute' return prepared by the IRS without the benefit of factual input from the taxpayer."  (Id., at 835-36).

Amatel v. Reno, 156 F.3d 192 (D.C.Cir. 1998) (Judge Williams)

This case deals with a challenge brought by a group of prisoners and publishers challenging the constitutionality of a recent amendment to the law which effectively permits the Bureau of Prisons to refuse to distribute magazines such as Playboy and Penthouse to prisoners on the grounds that such magazines interfere with the "rehabilitative environment" of prisons.

We are certain that most people, acting out of extreme boredom if not outright satisfaction, will quickly dismiss this decision as insignificant.  After all, who really cares if prisoners are denied the right to receive magazines that feature nudity and sexually explicit materials?  However, we submit that the scope of the majority's decision in this case is far from insignificant, as evidenced by the strong and persuasive reasoning set forth in Judge Wald's detailed dissenting opinion.  If nothing else, the majority's decision shows the dangers of ignoring the First Amendment in order to achieve politically popular, quick-fix solutions that are based on esoteric, ivory-tower theories about dealing with the problems inherent in our burgeoning prison system.

By way of background, prior to 1996, prison wardens were authorized to reject publications mailed to prisoners only if the publication was determined "detrimental to the security, good order, or discipline of the institution or it it might facilitate criminal activities."  (28 C.F.R. § 540.71(b)).  Then, in 1996, Congress enacted the so-called Ensign Amendment, which bars the use of Bureau of Prisons funds to pay for the distribution of commercial material that "is sexually explicit or features nudity."  (See Omnibus Consolidated Appropriations Act of 1997, Pub.L. No. 104-208 § 614)).

The Ensign Amendment was named after Congressman Ensign who stated, when arguing for passage of his bill, that "Magazines that portray and exploit sex acts have no place in the rehabilitative environment of prisons, nor should we pay Bureau of Prisons staff to distribute them." (Id., at 196).  Since the distribution of mail to prisoners can only be done by prison guards whose salaries are paid by the BOP, the Court recognized that the Ensign Amendment narrowly - but neatly - constitutes an "outright ban" on the distribution of publications that fall within the law's subjective prohibitions.

Of course, the BOP promptly enacted new regulations, at 28 C.F.R. § 540.72(b), which assigned exceedingly narrow, subjective meanings to the words contained in the Ensign Amendment.  (E.g., "nudity" means "a pictorial depiction where . . . female breasts are exposed.").  Ultimately, three inmates who were denied copies of Playboy and Penthouse sued, challenging the validity of the Ensign Amendment and the BOP's implementing regulations as violative of their First Amendment rights.

District Judge Sporkin, in a decision reported at 975 F.Supp. 365 and summarized in the Nov. 17, 1997 issue of Punch and Jurists, emphatically concluded that the Ensign Amendment was facially invalid under the First Amendment; and he permanently enjoined its enforcement.  Notable in his decision was his finding that: "No hearings were held by Congress in enacting the Ensign Amendments and no committee report was issued.  No discussion of the statute appears in any Conference Report."  In fact, the one floor statement cited by the Court was the following statement made by the appropriately named Representative Christiansen who barked: "It is deplorable . . . to think that America's Federal prisoners are granted access to vulgar, sexually explicit materials while serving time in our Federal prisons. . . . It is time to stop this ridiculous cycle of hypocrisy and end prisoner's (sic!) access to sexually explicit materials.  I believe that this bill will make sure prisons are punishment, not playgrounds."

Judge Sporkin's decision was quickly appealed; and in this decision a divided panel of the D.C. Circuit reversed Judge Sporkin and held that the Ensign Amendment did not violate the First Amendment, principally because it found that "the government could rationally have seen a connection between pornography and rehabilitative values" (id., at 199) - a statement that seems hard-pressed in view of Judge Sporkin's tracing of the non-existent legislative history of the Ensign Amendment.

In any event, both the majority judges, and Judge Wald, in her eloquent dissent, relied on their interpretations of Turner v. Safley, 482 U.S. 78 (1987), as did Judge Sporkin in his decision.  All the judges essentially agreed that the Supreme Court, in Safley, had directed the courts to uphold a prison regulation, even one circumscribing constitutionally protected interests, so long as it is "reasonably related to legitimate penological interests."  (Safley, id., at 89).  The Supreme Court also directed the lower courts to look at four factors when assessing the overall reasonableness of a particular regulation, namely: (1) whether the regulation or action has a logical connection to the legitimate governmental interests invoked to justify it; (2) whether there are alternative means of exercising the rights that remain open to the prisoners; (3) the impact the accommodation of the asserted constitutional right will have on other prisoners, guards and prison resources; and (4) the presence or absence of ready alternatives that fully accommodate the prisoner's rights at de minimis costs to valid penological interests.  (Safley, id., at 89-90).

Where the disagreement arose was whether there was a valid relationship between pornography and the amorphous goal of rehabilitating prisoners.  While the majority certainly assumed that there was such a relationship, we found it difficult to pin-point even a single passage where it showed what that relationship was or how Safley's analysis helped it arrive at its conclusion.

Judge Wald's dissent, however, was both clear and blunt.  She concluded: "Today's ruling that prisoners may be stripped of rights to view publications of their choice on the mere assertion of legislators or regulators - far removed from the prison scene and without supporting evidence of any kind - that those publications will hinder their ‘rehabilitation' goes well beyond prior precedent and the case law in other circuits.  It is a most troubling precedent." (Id., at 214).  Because of the importance of what Judge Wald wrote we have set forth below in the Quote of the Weeka series of her observations.

Whitley v. Hunt, Docket No. 97-40938 (5th Cir. Oct. 23, 1998) (Judge DeMoss)
Lunsford v. Jumao, Docket No. 96-56503 (9th Cir. Oct. 5, 1998) (Per Curiam)

In these decisions, the Fifth and Ninth Circuits held that a prisoner, seeking to bring a Bivens-action against federal officials (see, Bivens v. Six Unknown Named Agents, 403 U.S. 388 (1971)), on the basis of claims involving prison conditions, is not obliged by the provisions of the Prison Litigation reform Act to exhaust all prison remedies first, if the suit seeks only monetary relief and there are no prison remedies capable of affording such relief.

Under 42 U.S.C. § 1997e, as amended by the PLRA, no action respecting prison conditions may be brought under any federal law by a prisoner "until such administrative remedies as are available are exhausted."  In Whitley, the Fifth Circuit refused to interpret "available" as requiring exhaustion of remedies that could not accomplish the purpose of the lawsuit.

United States v. Gordon, 156 F.3d 376 (2nd Cir. 1998) (Per Curiam)

This case raises a question that we have often asked: Do the Guidelines really "create a clear, definite expectation in respect to the sentence that a court will impose if a trial takes place", as promised in the Introduction to the Guidelines (U.S.S.G., Chap.1, Part A, § 4(c))?

In this case, the defendant's counsel wrote the defendant a letter, before trial, in which he expressed his opinion that a conviction under the defendant's indictment "would result in a sentence of incarceration of 120 months."  Later, at a pretrial conference attended by both the defendant and the Government, the lawyer informed the district court that a plea offer "would expose the defendant to a sentence of eighty- four months."  After a bench trial, the defendant was found guilty of all 12 counts in the indictment.

The Probation Department then prepared its presentence report and concluded that the defendant's Guideline sentencing range was 262 to 327 months.  The badly shaken lawyer advised the district court (Judge Telesca) that he had mistakenly advised the defendant that his maximum sentencing exposure upon conviction would be 120 months in prison; and he asked to be relieved as counsel.  The district court granted that request and appointed new counsel.  The defendant then moved for a downward departure  (inexplicably under U.S.S.G. § 5K1.1), stating that, if he been told that the maximum sentence after trial would be 12 to 17 years greater than what his counsel told him, he would have accepted "the plea offer."

After a hearing, the district court granted the defendant a downward departure, and imposed a sentence of 210 months - which was 4 years less than his Guideline range but still 7-½ years more than what his counsel had told him.  The defendant then filed a motion pursuant to 28 U.S.C. § 2255, asking that his conviction be set aside and that he be granted a new trial on the basis that his Sixth Amendment right to effective assistance of counsel had been violated.  Again, Judge Telesca granted the defendant's motion, over the strenuous objections of the Government.  The Government appealed and the Second Circuit affirmed.

The Government's arguments were quite revealing.  First, the Government attempted to excuse itself for remaining silent when the defendant was told in open court that his sentence would be 84 months, by equivocating that "there was some calculation on the guidelines quickly just looking at the book without formally sitting down."  Then it attempted to argue that the defendant's counsel had not been ineffective and that in any event the defendant had not been prejudiced by relying on his attorney's advice.  The Court firmly rejected those arguments, noting that "the decision whether to plead guilty or contest a criminal charge is ordinarily the most important single decision in a criminal case . . . [and] counsel may and must give the client the benefit of counsel's professional advice on this crucial decision."  (Id., at 380, citing Boria v. Keane, 99 F.3d 492, 496-97 (2nd Cir. 1996)).  The Court then concluded that "By grossly underestimating Gordon's sentencing exposure in a letter to his client, [the attorney] breached his duty as a defense lawyer in a criminal case ‘to advise his client fully on whether a particular plea to a charge appears desirable'."  (Id.)

United States v. Wilke, 156 F.3d 749 (7th Cir. 1998) (Judge Kanne)
United States v. Paradies, 14 F.Supp.2d 1315 (N.D.Ga. 1998) (Judge Alaimo)

Both of these cases deal with a growing problem for prison officials: what to do with prisoners who are unusually susceptible to prison abuse.  Wilke is particularly instructive because it seems to imply that the manner in which the district court addresses that issue may be as important as the ultimate solution; and Paradies is noted because of the novelty of the defendant's claim - that he would be subject to abuse from other inmates because his brother-in-law was a Federal Judge.

Wilke was first noted in the June 22, 1998 issue of Punch and Jurists.  In that earlier decision, District Judge Bucklo granted a downward departure to a defendant, who had been convicted of child pornography, by sentencing him to five months of community confinement rather than to a Guideline imprisonment range of 10 to 16 months in prison.  The district court noted that the defendant was a homosexual, whose demeanor was both "passive and meek", and it was likely that he would be subjected to additional punishment while in prison both because of his sexual orientation and the nature of his crime.

Before making her ruling, Judge Bucklo held an evidentiary hearing at which the Government called four witnesses.  One of those witnesses was a probation officer who testified that none of his "clients" had ever told him that they had been assaulted and therefore he "did not believe it happened."  Another witness, the chief psychologist at FCI Butner in North Carolina, testified that he believed that the defendant could be protected from sexual abuse once placed in the BOP system; although he appeared to contradict the Government's assertion that "sexual assault does not occur in U.S. prisons" when he also testified that sexual assault in U.S. prisons was indeed a problem.

The Government appealed the downward departure that was granted; and on appeal, the Seventh Circuit reversed the downward departure for a number of reasons.  First, citing U.S. v. Graham, 83 F.3d 1466, 1481 (D.C.Cir. 1996), the Court held that a downward departure based on a defendant's vulnerability to prison "must be so extreme as to substantially affect the severity of confinement, such as where only solitary confinement can protect the defendant from abuse."  Second, the Court held that Judge Bucklo had abused her discretion by relying on the nature of the defendant's crime in evaluating his vulnerability to abuse (even though that was only one of several factors cited by Judge Bucklo in her ruling); and it flatly ruled that "a district court may not rely on the nature of a defendant's offense as a factor justifying a sentencing departure for vulnerability to abuse in prison."  (Id., at 753).

In our opinion, what really annoyed the Court was Judge Bucklo's suggestion that sexual abuse in prisons was a problem of far greater magnitude than the BOP was willing to admit.  In fact, it was so unraveled by Judge Bucklo's implication that the Government's evidence on that point had been "unhelpful and unreliable", that it invoked Circuit Rule 36 on its remand, requiring that the case be reassigned to a different judge.  That reassignment caused Judge Cudahy to dissent.  He not only felt that Judge Bucklo had made "more than adequate findings" to support the sentence she had imposed, he also felt she had exercised "her considerable discretion in a fully appropriate way"; and that it was wrong to remand the case to a different judge.  (Id., at 755-56).

In the Paradies case, Judge Alaimo dealt with the sentencing of a 77-year old defendant who suffers from a number of ailments including severe osteoarthritis in his knees, hands, spine, and neck.  He had been convicted of 83 counts of mail fraud and a variety of other charges; and he was sentenced to 33 months in prison.  He had requested downward departures from his Guideline's sentence based on a combination of factors,  including his advanced age, his poor health, and his familial relationship with a U.S. District Judge.  Judge Alaimo rejected any departure based on any of those grounds.  Noting that age and physical condition are "discouraged" departure factors, he concluded that neither the defendant's age nor his health were sufficiently extraordinary to warrant any sentence reduction; and he simply concluded that he did not believe "that inmates will target Paradies merely because his brother-in-law is a Federal District Judge."  (Id., at 1320, n. 11).

United States v. Hargrett, 156 F.3d 447 (2nd Cir. 1998) (Judge Winter)

Last year in the July 21, 1997 issue of Punch and Jurists, we noted a decision from the Second Circuit, U.S. v. Reyes, 116 F.3d 67 (2nd Cir. 1997), where the Court held that, even when a district court departs downward, if the Guideline sentencing range exceeds 24 months, the provisions of 18 U.S.C. § 3553(c)(1) require the court to explain the reasons why it has chosen a particular sentence.  While the Court acknowledged that its "strict interpretation of statutory language is open to criticism as elevating form over substance", it concluded that its decision was necessary to promote "not only the underlying purposes of the statute but also some of the values inherent in our criminal justice system." (Reyes, id., at 71).

There must have been a lot of appeals based on Reyes, because the Second Circuit has now decided to put aside those "values inherent in our criminal justice system."  In this decision, the Court decided to "abrogate" Reyes because it now felt that "permitting a defendant to appeal from a downward departure simply because the district court fails to state the reasons therefore, would impermissibly erode the jurisdictional limitation contained in § 3742(a)(3)."  (Id., at 450).

United States v. Martinez-Martinez, 156 F.3d 936 (9th Cir. 1998) (Judge Reinhardt)

The sole (and somewhat esoteric) issue raised on this appeal was whether the district court (Judge King) had "clearly erred" in refusing the reduce the defendant's Guidelines' base offense level under U.S.S.G. § 2X1.1(b)(2) - a rarely invoked provision which becomes relevant when a person, arrested before completing the substantive offense, is convicted of a conspiracy to commit the crime and that conspiracy is not covered by a specific offense guideline.  The Guidelines entitle such a defendant to a three-level decrease in the base offense level below the applicable Guideline for the underlying substantive offense unless he had completed or was about to complete the intended offense.

Most of the cases on this section deal with the issue of whether the defendant or a co-conspirator had completed all the acts the conspirators believed necessary on their part for the successful completion of the substantive offense.  This case deals with the issue of whether "the circumstances demonstrate that the conspirators were about to complete all such acts but for their apprehension or interruption by some similar event beyond their control."  (Emphasis added).

Here the defendant paid a security guard $15,000 to allow him to case certain cargo containers to decide which ones should be stolen.  The guard promptly told the FBI and, from that point on, the defendant was watched as he searched the various containers over a week's period.  The defendant finally decided that one of the containers held some promise and he took a few "samples" to show to his boss.  As he left the premises with the samples he was arrested.  The issue therefore became whether he was "about to complete" the theft of the entire container.

Although the probation office recommended that he get the three level reduction called for by § 2X1.1(b)(2), the district court concluded that there was sufficient evidence that the boss had already approved the theft of the entire container; and he denied the sentence reduction.  The Ninth Circuit held that, based upon the record, the district court's conclusion was clearly erroneous and it reversed and remanded the case for resentencing.  The Court held that "unless the remaining steps to be taken in the commission of the crime are so insubstantial that the commission of the substantive offense is inevitable, barring an unforseen occurrence that frustrates its completion, the conspirators are not about to complete the requisite acts and the defendant must be granted the three point reduction."  (Id., at 939) (Emphasis in original).

QUOTE OF THE WEEK  -  Making darn sure that prisons are punishment - not playgrounds.

"To read Safley - as the majority appear to - as permitting unblinking deference to any ‘plausible' legislative judgment about the rehabilitative benefits of denying a prisoner's most fundamental constitutional right, i.e., her freedom to read, renders any and all prisoners' constitutional rights a nullity. . . . ‘Deference to the administrative expertise and discretionary authority of correctional officials must be schooled, not absolute.' . . . (Id., at 205).

"I agree that rehabilitation is, conceptually, a legitimate governmental interest, even if no one is sure how to achieve it and the Federal Sentencing Guidelines have abandoned it as an attainable goal. . . . ‘Almost everyone involved in the criminal justice system now doubts that rehabilitation can be induced reliably in a prison setting, and it is now quite certain that no one can really detect whether or when a prisoner is rehabilitated.' . . . (Id., at 206).

"I might . . . have been able to go along - as the majority does here - with deferring to Congress had the government seen fit to proffer evidence that links a ban on the prohibited publications to rehabilitation of if the connection between that ban and rehabilitation was so self-evident that no further evidence was necessary to demonstrate its reasonableness.  But neither event has occurred, and the majority's once-over-lightly of the scientific literature that does exist certainly does not accomplish the task, as the majority itself admits. . . . (Id., at 208).

"I believe that it needs to be stressed that the assertion of ‘rehabilitation' as the reason for impinging on prisoners' First Amendment rights is particularly disconcerting in its potential for abuse.  Unlike its interest in institutional security, the contours of the government's interest in rehabilitation are quite amorphous and ill-defined. . . . [I]ndeed, ‘totalitarian ideologies we profess to hate have styled as "rehabilitation" the process of molding the unorthodox mind to the shape of prevailing dogma' . . . (Id., at 209-10).

"[T]he proposition that all material that is sexually explicit or that features nudity will have a detrimental effect on rehabilitation is belied by the prior actions of the prison officials under the re-Amendment policy.  At that time, prison officials were authorized to prohibit sexually explicit materials that they believed would negatively affect the discipline or ‘good order' of the institution.  Significantly, the prison officials - to whose expertise the Supreme Court has repeated[ly] deferred on matters such as this - did not choose to prohibit all material that is sexually explicit or that features nudity. . . . (Id., at 211).

"The First Amendment does not allow the warden to take into account whether a prisoner is in a high- or low-security institution, whether a prisoner is male or female, what kinds of crimes the prisoner has committed, the nature of the prisoner's sentence, how long the prisoner has been incarcerated and how long he or she has left to serve, whether the prisoner is receiving rehabilitative treatment, or even whether a prisoner is in a prison environment that provides an opportunity to share the material with anyone else (particularly with other prisoners convicted of sex crimes).  In these respects, the Amendment ‘sweeps much more broadly than can be explained by [the government's] penological objectives'."  (Id., at 213) Judge Weld, dissenting in Amatel v. Reno, 156 F.3d 192 (D.C.Cir. 1998).

Scorecard of published criminal cases reviewed by our staff this year:

Cases in the Federal Reporter:              This week:     57       Year to date:         1928
Cases in the Federal Supplement:         This week:     27       Year to date:         1052

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