Friday, December 1, 2017

Michael Flynn Plea Documents, Analysis and Comments (12/1/17; 12/4/17)

This is a federal tax crimes blog.  However, I thought it might be a good teaching experience for at least some readers and a learning experience for me to go through Michael Flynn's plea documents filed today.  I assume that everyone knows by now the Flynn did plead to one count for false statement under 18 USC § 1001(a)(2), here.  The relevant crime is:
whoever, in any matter within the jurisdiction of the executive, legislative, or judicial branch of the Government of the United States, knowingly and willfully * * * makes any materially false, fictitious, or fraudulent statement or representation.
This has been analogized to a perjury crime except the speaker is not under oath with penalty of perjury.  Like most tax crimes, this is an obstruction crime.

The plea documents are
  1. The criminal information, here.
  2. The plea agreement, here.
  3. The Statement of the Offense, here (which should give the judge sufficient facts to assure himself that the crime to which Flynn pled is proper.)
The false statement crime is used in many tax prosecutions.  I have discussed its application in tax crimes in my Federal Tax Crimes Publication 2013 edition, as updated, which may be downloaded here.

I won't delve into the false statements crime here except that it is a 5-year felony.  Suffice it to say that Flynn lied and the lies were material to the FBI investigation.

I turn to the plea agreement.  The plea is to FRCrP 11(c)(1)(B), here.  This means that the parties can recommend particular plea factors or calculations.  This is a recommendation only.  The sentencing judge makes the final decision.

The parties recommend the following:
SG §2B1.1(a)(2) with a base offense level of 6.  
I am curious as to this stipulation because Part B of the Guidelines including this section is for "Basic Economic Offenses."  The introductory comment says:
Introductory Commentary 
These sections address basic forms of property offenses: theft, embezzlement, fraud, forgery, counterfeiting (other than offenses involving altered or counterfeit bearer obligations of the United States), insider trading, transactions in stolen goods, and simple property damage or destruction.  (Arson is dealt with separately in Chapter Two, Part K (Offenses Involving Public Safety)).  These guidelines apply to offenses prosecuted under a wide variety of federal statutes, as well as offenses that arise under the Assimilative Crimes Act.
The offenses covered by § 2B1.1, the stipulated provision, are:
§2B1.1.     Larceny, Embezzlement, and Other Forms of Theft; Offenses Involving Stolen Property; Property Damage or Destruction; Fraud and Deceit; Forgery; Offenses Involving Altered or Counterfeit Instruments Other than Counterfeit Bearer Obligations of the United States
Federal Tax Crimes are economic crimes as well, but sentenced under the tax guidelines that parallel these economic crimes Guidelines.  As with economic crimes generally, the guidelines are primarily influenced by the amount of the economic crime the defendant committed or intended to commit.  The smallest amounts get the smallest base offense level in both cases of 6.  Then, higher offense levels apply as to the economic object of the offense goes up.

In this case, the plea agreement does not state the amount of the economic crime effected or intended but just pronounces that the level is the base offense level of 6.  I think this is odd.
The conduct to which Flynn pled is very serious indeed.  Normally, raising the offense level based on economic amounts calibrates, at least roughly, the seriousness of the crime.  In this case, if indeed the Base Offense Level of 6 applies, that would implies that the object of the crime was small beans economically.  There may have been no economic crime with regard to the false statements about the Russian contacts, but there was certainly potential economic economic crimes related to the failure to register for the Turkey Project.  Indeed, since there was no economic crime related to the Russian investigation, the Turkey Project would presumably be the economic crime justifying the sentencing under SG § 2B1.  And the amounts involved certainly were more than $6,000 which would cause additional offense levels to be added to the Base Offense Level of 6.

But, if there is no economic crime here with a high dollar amount involved, then I would think that the Base Level of 6 understates the seriousness of the crime.  That might justify applying another Guideline which I have not attempted to identify or even justify a Booker upward variance at sentencing.

The plea agreement then stipulates to the 2-level acceptance of responsibility reduction under SG § 3E1.1  to derive the final offense level of 4 for the Sentencing Table.  Nothing unusual here.

With these Guidelines calculations, the estimated sentencing range is 0 - 6 months.

Paragraph added 12/4/17:  I questioned above whether SG § 2B1.1 is the proper Guideline.  I do understand that Appendix A, the statutory index indicates that false statement under § 1001 is to be sentenced under SG § 2B1.1, but I am not sure that is binding if the Guideline does not fit.  I would think that the better fit, since the conduct in the count of conviction is not an economic crime, would be obstruction of justice or perjury under SG §§ 2J1.2 or 2J1.3, with perjury being the better analog since false statement is much like perjury, just without being under oath with penalty of perjury.  I understand that, where the false statement is an economic crime, that might be the better fit, but where it is not an economic crime, perjury seems the better fit.  Perjury has a Base Offense Level of 14.  The 2-level acceptance of responsibility downward adjustment would produce an offense level of 12.  The Sentencing Table shows a Guidelines range of 10  to 16 months for offense level 12, before any 5K1 adjustment.

The plea agreement then contemplates a downward "departure" from the Guidelines range under § 5K1 for cooperation.  The parties agree that, apart from the § 5K1 departure, the foregoing Guidelines apply and no further "departure or adjustment to the Estimated Guidelines Range" will be sought.  The plea agreement seems to deal only with the Guidelines Range.  It permits no adjustments for other "departure" -- a term of art applying only to the Guidelines calculations and factors covered in the Guideline -- or "other adjustment."  It is not clear what other adjustment may mean, but if they were meaning to stipulate about no Booker variances, they would have said so specifically.  It is possible that the sentence, read as written, is not addressing Booker variances either way.  And, in any event it is just a recommendation.  My suspension is that, if the Court is going to consider a Booker variance, the variance will be upward because the calculations with a Base Offense Level of 6 and no other upward adjustments seriously understates the harm of the crime and related conduct he was attempting to cover up by lying.

The plea agreement requires Flynn's cooperation.

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