Monday, February 15, 2010

Judge Posner Addresses Double Jeopardy and Sentencing Financial Loss Calculations

In United States v. Peel, 595_F.3d 763 (7th Cir. 2010), Judge Posner addresses a variation of the double jeopardy issue in a nontax case. I address Peel in this blog because variations of the double jeopardy theme do arise in tax cases. I discuss my notions on the related themes -- lesser-included offense and merger -- in my text, but here devote the discussion to Judge Posner's decision in Peel.

The defendant was convicted of bankruptcy fraud and of obstruction of justice arising out of the same conduct. Unhappy with that result, the defendant argued on appeal that "to convict him of both violated the double jeopardy clause of the Fifth Amendment, because one offense is included in the other." Double jeopardy is most often encountered in successive trial situations, but, as Judge Posner noted, "with respect to cumulative sentences imposed in a single trial, the Double Jeopardy Clause prevents the sentencing court from prescribing greater punishment than the legislature intended." (Internal quotes and marks omitted.) Judge Posner reasoned that the dual charges here did violate the double jeopardy prohibition. His reasoning (stripped of quotes and case citations) is:
The test for whether there are two offenses or only one, is whether each provision requires proof of a fact which the other does not. The test was flunked here because convicting Peel of obstruction of justice did not require proof of any fact that didn't have to be proved to convict him of bankruptcy fraud. It was thus a lesser-included offense of bankruptcy fraud and the Blockburger test makes clear, and many cases hold, that to punish a person for a lesser-included offense as well as the "including" offense is double jeopardy unless Congress intended the double punishment. The government does not argue that Congress intended that.

This is like a case in which a person is tried for both murder and attempted murder. The elements are different, but since conviction for murder automatically convicts the defendant of attempted murder (for there can be no murder without attempting the deed), the defendant cannot be convicted of both crimes. There is an exception for cases in which the defendant was convicted of the lesser-included offense before he could have been prosecuted for the greater one, as when the defendant is convicted of attempted murder and later his victim dies. In such a case he can be tried for murder. The exception has no application to this case, which must therefore be remanded with directions that the judge vacate one of the two convictions.
Having concluded that there was a double jeopardy violation, the Court then addressed the murkier and unsettled issue of which of the two convictions should be vacated. You can sense Judge Posner's mind at work in his analysis of that issue (stripped of quotes and case citations):
The defendant argues that his conviction for obstruction of justice is the one that should be vacated, even though it carries the higher statutory maximum sentence, because it is a lesser-included offense of bankruptcy fraud. It is lesser in the sense of having fewer elements, because one can commit obstruction of justice without committing bankruptcy fraud but not bankruptcy fraud without committing obstruction of justice. That is the only sense of "lesser" that matters under the Blockburger test: that offense A has elements a, b, c, and offense B has elements a, b, c, and d, so that conviction of B automatically convicts the defendant of A as well. The remedy is to eliminate the doubleness. But which conviction must be vacated is not dictated by the Constitution. It is a matter committed to the trial judge's discretion because functionally it is a decision concerning the length of the defendant's sentence. But usually it's the conviction carrying the lesser penalty that is vacated. As we noted in Lanier, it would be paradoxical to give the defendant a shorter sentence than he would have received had the government not also charged him with the less serious offense.

What is true is that in a case in which the lesser-included offense has fewer elements and is the less serious offense, vacating the sentence for the graver offense would be an abuse of discretion: imagine convicting a person of attempted murder and of murder and punishing him only for the attempt. This is not such a case; the lesser-included offense of obstruction of justice is the graver offense.
With that, the Court remanded the issue of which crime to vacate to the sound discretion of the district court.

In addition to addressing the double jeopardy issue, Judge Posner also held that, for sentencing purposes, the financial loss attributable to a future stream of payments may be discounted to current value in determining the base offense level.  Presumably the same analysis would apply in tax cases if the tax loss amount includes future intended tax losses.

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