Jacksonville Criminal Lawyer Blog

For a long time in federal criminal court, sentences for crimes involving crack cocaine were much harsher than sentences for crimes involving powder cocaine. In fact, all other things being equal, a person with 100 grams of powder cocaine may likely receive the same sentence as a person with 1 gram of crack cocaine. The Obama administration has discussed changing this system so that crack cocaine crimes are punished more in line with powder cocaine crimes in federal court.

Congress recently passed a law to help accomplish that goal, at least partially. The law does not equalize powder cocaine and crack cocaine sentences, but it significantly lowers the sentencing ratio. Now, all things being equal, 1 gram of powder cocaine is punished the same way as 18 grams of crack cocaine in federal criminal cases. Additionally, 28 grams of crack cocaine will trigger the 5 year minimum mandatory prison sentence while 280 grams of powder cocaine will trigger that 5 year minimum mandatory federal prison sentence.

Now, the question for many people who are serving sentences for crack cocaine crimes in federal prison, or have pending crack cocaine cases in federal court, is whether this new law applies to them. Can a person who is serving a sentence for a crack cocaine crime who was sentenced pursuant to the 100-1 ratio go back in front of a federal judge to get his/her sentence reduced? Can a person with a pending crack cocaine case be sentenced pursuant to the new 18-1 ratio? The new law does not address these questions, i.e. when the law becomes effective, or whether the law is retroactive. Normally, when a law does not address this issue of the effective date or retroactivity, it does not apply to prior or existing cases. Normally, it would only apply to cases where the date of the offense occurred after the date the law was officially passed. However, that issue will likely be argued and litigated in federal criminal cases going forward.

Several Employees of United Directories, a company located in Jacksonville Beach, Florida, were indicted in federal court for allegedly defrauding businesses out of more than $400 million by allegedly sending fraudulent bills for Yellow Pages advertisements. Federal law enforcement officials said United Directories and its employees sent the false Yellow Pages advertisement bills of several hundred dollars each to more than 100,000 companies across the country over a four year period.

Two of the charges include mail fraud and money laundering. The federal government will charge someone with mail fraud any time a person is alleged to have used the mail to commit or facilitate fraud. Using the mail as part of a scheme to defraud confers jurisdiction upon the federal government in a criminal case. Money laundering involves taking money that is known to come from illegal activity or an illegal source and mixing it with legitimate money in an attempt to conceal the source of the money, or clean it. When this kind of money is involved in an alleged fraudulent scheme, the potential penalties can be quite severe.

U.S. Attorney General Eric Holder recently issued a memorandum regarding the U.S. Attorney's Office charging of federal crimes and sentencing. The new memo basically supersedes the previous policy of former U.S. Attorney General John Ashcroft. Aschcroft's policies on charging and sentencing sought more uniformity and less discretion. Holder's policy appears to recognize that each case and each defendant are different so more discretion and "individual assessment" are appropriate when considering the charges and sentencing enhacements.

The prior policy of the government was to charge the most serious crime(s) that can be considered consistent with the defendant's conduct and likely to obtain a conviction. The new policy appears to encourage prosecutors to take a closer look into the characteristics of the individual defendant and the case to see if a departure from the most serious charges and sentencing enhancements may be warranted.

The U.S. Senate recently passed a bill that would make sentences for crack cocaine crimes more in line with sentences for similar powder cocaine crimes in federal courts. As it stands now, defendants can be sentenced much more harshly for crack cocaine crimes as opposed to equivalent powder cocaine crimes. In other words, a person can have a relatively small amount of crack cocaine and receive a much higher prison sentence than a person who has an equal or even lesser amount of powder cocaine. The unfairness of this system in federal courts has been discussed for years, and the Obama administration has given a clear indication of its intent to move towards equalizing the two crimes or at least pulling sentences closer together.

The bill that passed in the Senate does not go as far as making crack cocaine and powder cocaine crimes equal in terms of penalties, but it does reduce the disparity when a person is sentenced for crack cocaine crimes versus powder cocaine crimes. The bill also eliminates minimum mandatory sentences for people charged with simple possession of crack cocaine.

The bill making crack cocaine and powder cocaine sentences more similar, though not equal, is not yet the law. The bill still has to go through the normal legislative process. However, it is likely that at some point in the future, crack cocaine sentences and powder cocaine sentences will get in the same ballpark. But until that happens, the sentences for crack cocaine cases are much more serious than sentences for powder cocaine cases in federal courts.

Based on the tone and substance of a recent speech and press release from Eric Holder, the federal government plans to step up investigations and prosecutions of medical professionals for health care fraud. Mr. Holder made it clear that the government considers health care fraud one of the country's "most destructive" and "widespread" challenges. As a result, the federal government has created a couple of task forces specifically conceived to deal with health care fraud cases. Mr. Holder is also asking state and local law enforcement agencies to assist the federal government in making health care fraud cases and make their own cases.

Health care fraud, also referred to as Medicare or Medicaid fraud, can take several forms. Some of the more common accusations of health care fraud involve claims that doctors are charging the government for medical services or equipment that were not necessary or doctors are charging the government for medical services or equipment that were not provided. Investigators will look for what they consider to be excessive or unusual billing practices when investigating health care fraud cases.

According to the government, approximately $60 billion in public and private health care spending is lost each year to health care fraud. As a result, the government is increasing its budget to fight what they perceive to be health care fraud. In 2010, the federal government increased the health care fraud budget from $200 million to $300 million. As expected, health care fraud cases have increased. In the six months prior to the speech and press release, 60 health care fraud cases were filed and over 200 people were charged with health care fraud related crimes.

When the government focuses on a particular issue, they will pump more money into enforcement and increase arrests and prosecutions. Often times, the wide net cast by the government to make these cases crosses the line between illegal fraud and honest mistakes and aggressive but legal business practices.

A Jacksonville Beach, Florida man was recently indicted on three counts of possessing child pornography, one count of transporting child pornography and one count of receiving child pornography in federal court, according to an article on Firstcoastnews.com. The charges together carry a maximum potential sentence of 100 years in federal prison.

Law enforcement authorities on the state and federal levels are focusing more and more on child pornography cases. As most people should know, it is a federal crime and a state crime to possess child pornography pictures and videos, create them, share them, distribute them or receive them. Viewing child pornography on one's computer and then deleting the file is illegal. Law enforcement officials have effective computer tracking technology which can tell them which computers may contain child pornography files. As this technology gets better and more people use the internet (which gives people better access and opportunity to view child pornography pictures and videos), state and federal law enforcement will make more and more arrests. And when these arrests are made and child pornography charges are brought, the potential penalties are very serious.

Federal law enforcement officials arrested 26 doctors, nurses and other health care providers in Miami, New York and Detroit for Medicare fraud according to a recent article. We are also aware of similar arrests made recently in the Jacksonville, Florida area. According to the article, the alleged Medicare fraud was committed in several ways. Medicare fraud typically involves a doctor or other medical provider billing Medicare for services that were never performed or required, billing for unnecessary medical equipment or billing at an excessive rate.

In these cases, the suspects allegedly committed Medicare fraud by billing for expensive shoe inserts while providing a much cheaper version to the patients, billing for expensive treatments that were not medically necessary, submitting old ultrasound readings that were found at another doctor's office and billing for expensive home-care visits for homeless people or people who were paid to fake symptoms. The article indicates that the total amount of the Medicare fraud cost taxpayers approximately $16 million.

The government has established a new task force called the Financial Fraud Enforcement Task Force which is designed to investigate and prosecute major financial crimes, according to a Department of Justice press release. The agencies that are part of the new task force will focus primarily on the areas of mortgage fraud, securities fraud and corporate fraud. The task force is a collaboration of a variety of different agencies that work in those fields including the Department of Justice, the Department of Labor, the Securities and Exchange Commission, the FBI and many others along with state and local law enforcement agencies as well.

Although a similar task force was created in 2002 (which was replaced by this one), the logical result of this will be more investigations and prosecutions of so-called white collar crimes, particularly in the area of mortgage fraud. Florida is commonly seen as one of the states, if not the state, with the highest number of mortgage fraud complaints and investigations.

After the Bernie Madoff debacle, Ponzi schemes are getting more publicity in the news. Ponzi schemes can be committed in different ways, but they typically involve a person or persons who are able to elicit trust from others who believe that person has the ability to make extraordinary returns on an investment. The Ponzi schemer will solicit money from a number of people and use those new payments from newer victims to pay prior victims just enough to keep them satisfied and avoid suspicion. However, invariably, the Ponzi schemer runs out of new investors, and money, or an investor gets suspicious and starts asking questions and requesting documentation about the investment and the Ponzi scheme falls apart.

In this case, Reed Diehl, who was a former Tennessee Titan in the NFL, solicited money from victims claiming that he would invest the money into loan programs and condominium projects in Mexico that would provide a high rate of return, according to a press release on the local U.S. Attorney's Office's website. When the Ponzi scheme fell apart, Mr. Diehl was ultimately charged with federal crimes such as wire fraud and money laundering. He entered a guilty plea and admitted to stealing over $5 million. There were never any investments in loans or building projects. Mr. Diehl was sentenced to 57 months in federal prison in California.

Several times, we have discussed the trend we have seen towards more federal investigations and arrests in mortgage fraud cases in Florida and Jacksonville. Federal authorities are responding to the tremendous meltdown in the housing markets and numerous mortgages that have gone unpaid. In many local U.S. Attorney offices in Florida, mortgage fraud cases used to occupy a relatively small percentage of the caseload. However, since the mortgage and housing crisis, some offices in Florida have so many mortgage fraud cases that all of the prosecutors have one or more of them.

The trends towards increased federal prosecution of mortgage fraud cases certainly includes the Jacksonville, Florida market. According to a recent article on News4Jax.com, there were twenty-four recent mortgage fraud related arrests in Jacksonville. There were over one hundred such arrests throughout Florida. Florida is obviously a major target for mortgage fraud related criminal cases due to the sheer volume of real estate and real estate transactions in the state. For some reason, many people consider Jacksonville the number one city in Florida for mortgage fraud.

However, the crime of mortgage fraud is often not black and white like some other crimes. What one prosecutor or FBI agent calls mortgage fraud, someone else may call good business or a misunderstanding on behalf of one of the parties to the mortgage transaction. Whether a transaction is a mortgage fraud crime or not may depend on what disclosures were made, whether verbal or in writing. There are often honest and legitimate differences of opinion between what one side considers a legitimate way of conducting business and the other side considers a serious felony crime. When law enforcement casts the net of arrests so wide so quickly, it is certainly likely that many of these cases fall on the legitimate business side of the line.

Most people understand that when they have a private conversations with their lawyers about an existing or potential case, whether criminal or civil, those conversations are supposed to remain confidential. This is referred to as the attorney-client privilege, and it means that no one can compel the attorney or the client to disclose what was discussed between them.

However, in the context of a pending case or investigation involving a corporation and its executives or employees, it may not be clear who exactly the attorney represents. For instance, in a recent federal criminal case, the government was investigating a company and its chief financial officer for conspiracy and securities fraud. The company hired a lawyer to assist with an internal investigation and an audit. That lawyer interviewed the CFO who gave that lawyer important information critical to his own case. The CFO believed that the lawyer was his lawyer and all communication between the two was confidential and private. This particular attorney had even represented the CFO in the past in civil cases, which further led the CFO to believe that he was having confidential discussions with his personal lawyer.

Subsequent to those conversations with the CFO, the lawyer disclosed information from those conversations to other lawyers and accountants assisting in the internal investigation of the company and ultimately to the government. The government then intended to use that information against the CFO.

The CFO then hired his own criminal defense attorney. He argued that none of the information obtained by the government by the initial lawyer should be used against the CFO. To do so would violate the attorney-client privilege. However, the government argued that the CFO should have known that the information he provided to the lawyer would be shared with the accountants, auditors and others as part of the company's internal investigation. As a result, the CFO should have known that the lawyer was not his personal lawyer but a lawyer whose client was the company. And if the attorney's client was the company rather than the CFO personally, information provided by the CFO could be shared with others related to the company.

This issue has not been finally decided, and it may depend on what exactly the attorney told the CFO prior to their discussions regarding exactly whom the lawyer represented and what would be done with the information. In any case, where a company and an executive or employee of the company are facing criminal charges or an investigation, it is important to know the exact nature of the relationship with the attorney and what he/she intends to do with the information before making any statements. If the attorney-client relationship is later determined not to exist because the client is the company and not the individual, then any statements made to the attorney may be used against the individual.

Federal judges testified in front of the U.S. Sentencing Commission regarding the abnormally high sentences given for the federal crime of possession of child pornography. The judges asked the Commission to review the criminal sentencing guidelines for possession of child pornography cases. The judges noted that some people are getting inordinately high sentences for sitting in their homes looking at pictures of child pornography that are the same or more than sentences for crimes such as rape and bank robbery. Additionally, the judges noted that people who are convicted of possession of child pornography crimes are receiving sentences that are no less than those for people convicted of manufacturing or commercially distributing child pornography. As a point of reference, one judge noted that in his district, the average sentence for possession of child pornography increased from 50 months to 109 months from 2002 to 2007.

The judges indicated they were not trying to downplay the seriousness of possession of child pornography but were merely trying to ensure that the sentencing guidelines for that crime were appropriate when compared to more serious and violent crimes and also more threatening child pornography crimes such as manufacturing and/or distributing child pornography. The U.S. Sentencing Commission appeared to be receptive to the testimony and may consider adjusting the sentencing guidelines for possession of child pornography crimes in federal court in the future.

As we have discussed several times on this blog, the federal authorities are focusing more on fraud related crimes, or so called white collar crimes. We have seen the greatest concentration of federal investigative resources go towards mortgage fraud cases recently, particularly in Florida. However, they are looking at fraud cases of all types.

In Kingsland, Georgia, a recent criminal investigation resulted in the indictment of the former owner of the Cisco Travel Plaza and several others connected to that business. The indictment alleges that these individuals committed the crimes of fraud, conspiracy, bribery and/or criminal trademark infringement. Specifically, the law enforcement authorities, which included the FBI, GBI, local Kingsland police and the IRS, are alleging that Mr. Cisco and the others miscalibrated the fuel pumps at three Cisco Travel Plaza locations to provide less fuel than what was indicated and paid for, substituted cheaper fuel at the premium and mid-grade fuel pumps, sold non-BP fuel while using the BP logo at the centers and bribed Georgia Department of Agriculture inspectors who came to inspect the centers and the pumps. The indictment alleges that these offenses occurred between 2005 and 2006 and resulted in a loss of $7 million to customers of Cisco Travel Plaza.

Several times we have written posts about the shifting priorities of the FBI and federal prosecutors in the Jacksonville, Florida area and throughout Florida, from immigration and terrorism related cases years ago to securities fraud to mortgage fraud. It seems you can follow the latest sensational crime and economic stories to see where federal prosecutors are going to focus next. Recently, the failing housing market and increasing foreclosure rates have inundated the news. As a result, we wrote that the FBI and federal prosecutors are allocating significant resources to investigating, indicting and prosecuting mortgage fraud cases. We also noted that the state of Florida seems to be the focal point for mortgage fraud cases.

We do not expect the trend towards more mortgage fraud prosecutions to change any time soon. A recent FBI report noted that mortgage fraud is getting worse, and the Obama administration has made mortgage fraud cases a top priority. In fact, mortgage fraud cases have become such a priority that certain members of Congress have expressed concern that other white collar crimes may not receive the attention from the FBI and federal prosecutors they deserve due to the classic limited resources problem.

Reports of mortgage fraud by lenders increased 36% in 2008, and financial institutions estimate that they lost $1.4 billion in 2008 due to mortgage fraud, a 83% increase from 2007. With numbers like those, it is no surprise that the government is allocating significant funds for law enforcement to use to combat mortgage fraud. As a result, we should see more federal mortgage fraud cases in the Jacksonville, Florida area and throughout Florida in 2009 and beyond, at least until the next major trend takes over.

In order for a criminal defense attorney to properly defend a person or corporation who is being investigated for or has been charged with a mortgage fraud crime, it certainly helps to have experience in the area and specialized knowledge of the mortgage business. If you have any questions about mortgage fraud or a pending mortgage fraud case, feel free to contact us for a free consultation.

We have written before about how people who commit crack cocaine crimes in federal court receive higher sentences than people who commit similar crimes involving powder cocaine. In other words, in order to get a similar sentence in certain situations, it would take the possession of much more powder cocaine than crack cocaine. The Obama administration has indicated an intention to eliminate this sentencing disparity in federal criminal courts.

A new law is also being considered that would establish equal sentences for crack cocaine and powder cocaine crimes. The new law would lower the crack cocaine sentences to the current powder cocaine level instead of the inverse. If and when this law passes, people charged and convicted of crack cocaine crimes in federal court will be exposed to lower sentencing ranges that are in line with those of powder cocaine crimes.

Federal agents raided dozens of doctors' offices and homes during investigations into alleged Medicare fraud. As part of the government's effort to reform health care and save money, the federal government is focusing on Medicare fraud and what they say are millions of dollars that are fraudulently taken from the government pursuant to the Medicare laws. The recent raids occurred in Houston, New York, Boston and Louisiana. In Houston alone, thirty-two indictments were recently unsealed charging $16 million in Medicare fraud claims.

Medicare fraud can be committed in various ways, but it often involves a doctor or someone in a doctor's office billing Medicare for supplies that were not medically necessary and/or never provided to the patient. Under the Medicare laws, when a doctor prescribes a medical product, such as a wheelchair, to a patient, the doctor has a right to reimbursement from the government. In this case and other cases of Medicare fraud, the government alleges that the medical supplies were unnecessary and/or the medical supplies were never given to the patient and the doctor pocketed the reimbursement money. In this case, wheelchairs, arthritis kits and tube feeding supplies were the most common supplies that were the subjects of the alleged Medicare fraud.

Due to its relatively large elderly population, Medicare fraud is a significant issue in Florida. With the publicity surrounding health care reform, wasted money in the health care industry and the enormous tax burden on the public, it is likely that the federal government and state law enforcement in Florida will continue to investigate doctors for Medicare fraud.

Many states, including Florida, allow qualified residents to apply for and obtain concealed weapons permits. These permits allow the person to carry a concealed weapon, such as a firearm, in their vehicles and other concealed places. In Florida, carrying a concealed firearm without such a permit is a third degree felony punishable by up to five years in prison; carrying a concealed weapon (non-firearm, such as a knife), without authorization is a misdemeanor.

The laws of each state are different, and particulars regarding how and where a person can carrying a concealed firearm or weapon are not the same in each state. As a result, if a person has a concealed weapon permit in one state and travels to another that has different laws regarding how that weapon can be concealed, that person may be violating the concealed weapon law of the second state even though he/she has a valid concealed weapon permit and is following the law of his/her home state. The new proposal would make it clear that a person who has a concealed weapon permit from one state can travel into other states with the concealed weapon as long as the other state also issues concealed weapon permits.

One group that would welcome such a law is semi truck drivers who constantly travel across state lines and often have to stop in dangerous and secluded areas while carrying valuable cargo. Truck drivers are at greater risk of becoming robbery targets and should have the right to protect themselves when they are on the road.

Under the Obama Administration, the Department of Justice has indicated an increased focus on mortgage fraud and other white collar crimes. We have discussed this marked increase in investigations and prosecutions of various white collar crimes in previous blogs here , here and here. However, a recent press release from the U.S. Department of Justice further emphasizes the point that mortgage fraud and other white collar crimes remain high on the government's list of priorities.

According to the press release, the government is currently investigating more than 2100 mortgage fraud cases, which is an increase of 400% from five years ago, and the government has doubled the number of agents investigating such crimes.

A U.S. Supreme Court ruling on the federal crime of aggravated identity theft makes it harder for the government to obtain a conviction for that crime. Several months ago, we wrote about how the U.S. government was using the federal crime of aggravated identity theft as a tool to deport illegal immigrants who often obtain fake social security numbers and cards when they enter the country. The federal crime of aggravated identity theft occurs when a person knowingly and without authority uses a means of identification of another person. For instance, law enforcement officials often arrest suspected illegal immigrants for using or possessing fake social security cards with fake social security numbers on them. However, since this criminal law requires that a person "knowingly" use the identification card of another, there was a question as to whether the law required a person to know that the social security number actually belonged to another person. The government's position, of course, was that the law did not impose such a requirement for a conviction. Criminal defense attorneys argued that the government must prove that the defendant knew the social security number actually belonged to another person.

The U.S. Supreme Court appears to have sided with the criminal defense lawyers. If a person is arrested for the federal crime of aggravated identity theft for possessing or using a fake social security card, the government must prove that the defendant knew the social security number belonged to another person. Now, for a person who has a specific victim in mind and obtains his/her social security number and/or other personal information, this ruling may not be of much benefit. However, for someone, such as an illegal alien, who comes into the country and purchases a fake social security card with nine random numbers on it with no conception of whether they form an actual, assigned social security number, this ruling makes it very difficult to convict that person of the federal crime of aggravated identity theft. It also makes it difficult for law enforcement authorities to charge illegal immigrants with a serious felony that makes it easier to deport them.

The U.S. Department of Justice under the Obama administration has indicated an opposition to the current disparities between sentences in crack cocaine cases versus powder cocaine cases in the federal criminal system. Currently, as a result of the Anti-Drug Abuse Act of 1986, mandatory sentences in federal criminal cases are harsher for crack cocaine cases than powder cocaine cases. This is true even though crack cocaine and powder cocaine are basically the same. The primary difference is that crack comes in a form that is smoked while cocaine comes in a form that is snorted.

The difference in federal sentences for these two drug crimes has had a major effect on who has been going to prison for long periods of time as opposed to getting relatively minor sentences. For instance, a person convicted of the crime of distributing 5 grams of crack cocaine faces a mandatory sentence of 5 years in prison while it would take the distribution of 500 grams of powder cocaine to get the same mandatory sentence in federal court. Studies show that crack cocaine is more often used by lower income individuals and minorities. In fact, more than 80% of the people prosecuted for crack cocaine charges in federal court are African-American, according to the U.S. Sentencing Commission.

No law has yet passed to address the difference in sentencing between crack cocaine crimes and powder cocaine crimes in federal court. However, there is clearly a shift in criminal and sentencing policies with the Obama administration and some indication that a new law will be passed to eliminate this difference.