Friday, May 26, 2017

Child Pornography, the Laptop and Asset Forfeiture

This post examines a recent opinion from the U.S. DistrictCourt for the Western District of North Carolina: United States v. Chase, 2017 WL 1966747 (2017). The issue in the case is whether Chase should be required to forfeit his laptop computer, a thumb drive and his home because they were used to carry out the offenses of which he was convicted. United States v. Chase, supra.
If you are interested in what criminal forfeiture of assets involve, check out Rule 32.2 of the Federal Rules of Criminal Procedure, which you can find here. And as Wikipedia explains, “criminal forfeiture is usually carried out in a sentence following a conviction and is a punitive act against the offender.”
Getting back to the Chase case, the District Court Judge begins the opinion by explaining that
THIS MATTER is before the Court on the United States of America's Motion for Preliminary Order of Forfeiture. The United States requests, pursuant to 18 U.S. Code § 2253(a)(3), Fed. R.Crim. P. 32.2(b), and the Special Verdict (Doc. 99) on forfeiture, that this Court order forfeiture of the following properties that the United States contends constitute properties used or intended to be used to commit or promote the commission of the Count One 18 U.S. Code § 2251A(g) offense of engaging in a child exploitation enterprise and the Count Three 18 U.S.C. § 2251(d) offense of advertising child pornography:

• One ASUS laptop, serial number E1N0CV090739012 (hereafter, `ASUS Laptop’);
• One Cruzer 128GB thumbdrive (hereafter, `Cruzer Thumbdrive’); and
• The real property at 3570 15th Avenue, SW, Naples, Florida, identified in a deed to Steve Chase and Barbara Chase, husband and wife, recorded at Book 2337, Page 0771 of the Collier County Clerk of the Circuit Court, also known as Parcel 37988440001, and more particularly described as follows:

THE EAST 105' OF THE EAST 180' OF TRACT 90, UNIT 27, GOLDEN GATE ESTATES, ACCORDING TO A PLAT THEREOF RECORDED IN PLAT BOOK 7, PAGES 17 AND 18, OF THE PUBLIC RECORDS OF COLLIER COUNTY, FLORIDA.
(hereafter, `Naples Residence’).

For good cause, this Court GRANTS the Motion.
United States v. Chase, supra.
The Judge then goes on to explain why he is granting the forfeiture motion:
On August 19, 2015, a Grand Jury in the Western District of North Carolina returned a Second Superseding Indictment (Doc. 31; hereafter, `Indictment’) against Defendant and others, charging Defendant with, inter alia, engaging in a child exploitation enterprise as set forth in Count One; a conspiracy to advertise child pornography as set forth in Count Two; advertising child pornography as set forth in Count Three; transporting child pornography as set forth in Count Four; transporting child pornography as set forth in Count Five; transporting child pornography as set forth in Count Six; and possessing child pornography as set forth in Count Seven. The charges were based on Defendant's role as administrator of a worldwide child pornography website known as `Playpen’ on the TOR network on the so-called `dark-web.’ The Government contends that Playpen facilitated the worldwide sharing of in excess of approximately 100,000 in images among in excess of 150,000 Playpen users.

The Indictment also contained a `Notice of Forfeiture and Finding of Probable Cause’ whereby the Grand Jury found probable cause that the Naples Residence was subject to forfeiture. Defendant resided at the Naples Residence during the course of the offenses. Further, the Naples Residence was titled to Defendant and his deceased spouse.

Defendant pled not guilty and elected a jury trial. Ahead of trial, the Government filed a Notice of Proposed Jury Instructions and Verdict Sheet (Doc. 88) and a Trial Brief (Doc. 90), informing Defendant and the Court that the Government intended to pursue forfeiture of, not only the Naples Residence, but also the ASUS Laptop and Cruzer Thumbdrive, all such forfeitures based on the allegation that Defendant used these items to promote his Count One, Count Two, and Count Three offenses.1 Defendant elected (Doc. 89) to retain the Jury to decide forfeiture.
United States v. Chase, supra.
The opinion then explains that
[d]uring the criminal trial, the Government introduced and the Court admitted evidence that established, among other facts, the following:

• On multiple occasions, from the Naples Residence, Defendant logged-in to an email account that he used to register Playpen;
• On at least one occasion, from the Naples Residence, Defendant accessed a PayPal account that he used to fund Playpen;
• On multiple occasions, from the Naples Residence, Defendant logged in to Playpen; and
• At execution of a Search Warrant by law enforcement at the Naples Residence, Defendant fought entry by law enforcement and, once law enforcement entered, law enforcement discovered the ASUS Laptop on, logged-in to the server hosting Playpen with Defendant logged-in as Playpen administrator, with the Cruzer Thumbrive inserted into the ASUS Laptop. Further, law enforcement discovered on the ASUS Laptop a browser history that reflected a history of access to the administrative forum of Playpen. Law enforcement also discovered passwords and administrative instructions for Playpen on the Cruzer Thumbdrive.

Based on, among other evidence, the above-referenced evidence, the Jury found (Doc. 98) Defendant guilty on all counts except for Count Two, on which the Jury was instructed not to return a verdict should the Jury find Defendant guilty on Count One. As to the Count One offense, the Jury found that predicate offenses included advertising child pornography from 2014 through 2015; transporting child pornography on February 1, 2015; transporting child pornography on October 12, 2014; transporting child pornography on September 26, 2014; and possession of child pornography on August 19, 2014 and February 17, 2015. Simply put, the Jury found Defendant guilty of numerous egregious crimes, wide-spread in their duration and impact.
United States v. Chase, supra.
The opinion goes on to point out that
[f]urther, following brief argument by the Government and Defendant, the Jury also returned a Special Verdict (Doc. 99) for forfeiture of the Naples Residence, ASUS Laptop, and Cruzer Thumbdrive. The Special Verdict constituted a finding by the Jury that there was a nexus between Counts One and Three, and the properties. The Government now requests that this Court issue a Preliminary Order of Forfeiture for these same items.
United States v. Chase, supra. If you are interested, you can find a special interrogatory verdict form here.
The opinion then takes up the legal issues in the case, noting, initially that
Title 18 U.S.C. §2253(a)(3) and Fed. R. Crim. P. 32.2(b)(1) provide for preliminary forfeiture of property used or intended to be used to commit or promote violation of the child exploitation enterprise statute as charged in Count One and a violation of the advertising child pornography statute as charged in Count Three. Forfeiture is appropriate upon a court finding of a nexus, or connection, between the property and the violations. Fed. R. Crim. P. 32.2(b)(1)(A). The finding may be based on evidence already in the record and any additional evidence or information submitted by the parties and accepted by the court as relevant and reliable. Fed. R. Crim. P. 32.2(b)(1)(B). The burden of proof on forfeiture is preponderance of the evidenceSee, e.g., United States v. Cherry, 330 F.3d 658, 669 (4th Cir. 2003). Here, the preponderance standard is easily satisfied.
United States v. Chase, supra.
The opinion then explains why the standard is “easily satisfied” in this case:
Specifically, at the trial of this matter, the Government introduced evidence, detailed above, that, on numerous occasions, Defendant accessed an email account from the privacy of the Naples Residence so that he could operate Playpen; that Defendant accessed a PayPal account from the privacy of the Naples Residence so that he could operate Playpen; that, on numerous occasions, Defendant accessed the Playpen server from the privacy of the Naples Residence; and that Defendant was operating Playpen via the ASUS Laptop and Cruzer Thumbrive, in the privacy of the Naples Residence, when law enforcement executed the Search Warrant. Further, the Jury returned a Special Verdict of forfeiture based on this evidence.

The Government submits that such evidence, along with the Verdict and Special Verdict, are more than sufficient to establish by a preponderance of the evidence that the assets were used or intended to be used to commit or promote the commission of the Count One and Count Three offenses. 18 U.S.C. § 2253(a)(3); see also United States v. Ownby, 926 F.Supp. 558, 566 (W.D. Va. 1996) (Overruling defendant's objection that forfeiture of residence in which he used computer to possess, receive, and transport child pornography was excessive; reasoning that `it is clear that the privacy afforded by the dwelling was essential to Ownby's commission of the charged offenses.’), aff'd, 131 F.3d 138 (4th Cir. 1997) (Table); United States v. Wilk, 2007 WL 2263942, at *1 (S.D. Fl. Aug. 6, 2007) (same in case of forfeiture of residence when in excess of 90 images were on computer in home); cf. United States v. 7046 Park Vista Road, 537 F.Supp.2d 929, 940–41 (S.D. Ohio 2008) (determining, on Government's summary judgment motion in civil forfeiture case, that residence in which Section 2251 and 2252 violations occurred was forfeitable).
United States v. Chase, supra.
The opinion then goes on to outline precisely what steps the court is ordering:
The Court agrees.
It is, therefore ORDERED:

1. Based upon Defendant's convictions, the trial evidence, the Verdict, and the Special Verdict, the United States is authorized to take and maintain possession of the following property belonging to Defendant, and the property is hereby forfeited to the United States for disposition according to law, provided, however, that such forfeiture is subject to any and all third party claims and interests, pending final adjudication herein:
• One ASUS laptop, serial number E1N0CV090739012;
• One Cruzer 128GB thumbdrive; and
• The real property at 3570 15th Avenue, SW, Naples, Florida, identified in a deed to Steve Chase and Barbara Chase, husband and wife, recorded at Book 2337, Page 0771 of the Collier County Clerk of the Circuit Court, also known as Parcel 37988440001, and more particularly described as follows:
THE EAST 105' OF THE EAST 180' OF TRACT 90, UNIT 27, GOLDEN GATE ESTATES, ACCORDING TO A PLAT THEREOF RECORDED IN PLAT BOOK 7, PAGES 17 AND 18, OF THE PUBLIC RECORDS OF COLLIER COUNTY, FLORIDA.
2. Pursuant to 21 U.S. Code § 853(n)(1), the Government shall publish notice of this order; notice of its intent to dispose of the property in such manner as the Attorney General may direct; and notice that any person, other than the Defendant, having or claiming a legal interest in any of the above-listed forfeited property must file a petition with the Court within thirty days of the final publication of notice or of receipt of actual notice, whichever is earlier. This notice shall state that the petition shall be for a hearing to adjudicate the validity of the petitioner's alleged interest in the property, shall be signed by the petitioner under penalty of perjury, and shall set forth the nature and extent of the petitioner's right, title or interest in the forfeited property and any additional facts supporting the petitioner's claim and the relief sought. The United States may also, to the extent practicable, provide direct written notice to any person known to have alleged an interest in property that is the subject of this Order of Forfeiture, as a substitute for published notice as to those persons so notified.
3. Upon adjudication of all third-party interests, this Court will enter a Final Order of Forfeiture.
https://www.law.cornell.edu/uscode/text/21/853
            SO ORDERED.

United States v. Chase, supra

Wednesday, May 24, 2017

The Undocumented Aliens, the State Insurance Database and the Fourth Amendment

This post examines a recent opinion from the U.S. Court of Appeals for the 5th Circuit: United States v. Broca-Martinez, 2017 WL 1521492 (2017).  As Wikipedia explains, this court is one of several U.S. Courts of Appeals which have jurisdiction over federal cases in the territory their Circuit encompasses.
The court, like most courts, begins the opinion by explaining how and why the prosecution arose:
Defendant–Appellant Cecilio Broca-Martinez appeals the district court's denial of his motion to suppress. While on patrol in December 2015, Officer Juan Leal began following Broca-Martinez's vehicle because it matched a description Homeland Security agents had provided the Laredo Police Department (`LPD’). Officer Leal stopped Broca-Martinez after a computer search indicated the vehicle's insurance status was `unconfirmed.’ The stop led to the discovery that Broca-Martinez was in the country illegally and that he was harboring undocumented immigrants at his residence. Broca-Martinez entered a conditional guilty plea to one count of conspiracy to transport undocumented aliens in violation of 8U.S. Code § 1324. On appeal, he contends that there was no reasonable suspicion justifying the initial stop. 
United States v. Broca-Martinez, supra.
For an overview of the vehicle insurance requirements of the U.S. states, check out this Wikipedia entry.
The Court of Appeals goes on to explain, in some detail, how the prosecution arose:
On December 2, 2015, Broca-Martinez was stopped by Officer Leal in Laredo, Texas. That day, Homeland Security Investigations (`HIS’) received a tip that undocumented immigrants were being housed at a residence on Zacatecas Avenue in Laredo. While surveilling the residence, HSI agents saw two men leave and enter a gray Nissan Altima. HSI subsequently notified the LPD to have its officers `be on the lookout’ for the vehicle. After receiving a radio transmission to `be on the lookout’ for this vehicle, Officer Leal saw an Altima that matched the description. He followed the vehicle and entered its license plate number into an `in-vehicle computer’ database designed to return vehicle information such as insurance status.

The computer indicated the insurance status was `unconfirmed.’ Based on his experience using this system, Officer Leal concluded that the vehicle was likely uninsured—a violation of Texas's driver financial responsibility law. Official Leal then stopped the vehicle. After being stopped, Broca-Martinez gave his name to Officer Leal and admitted he was in the United States illegally. While they waited for HSI agents to arrive, Officer Leal issued Broca-Martinez a citation for violating the insurance requirement and driving without a license.

When HSI agents arrived, they interviewed Broca-Martinez. The agents obtained verbal consent from Broca-Martinez to search the Zacatecas Avenue residence, where fourteen undocumented immigrants were being sheltered. On December 22, 2015, Broca-Martinez was indicted by a grand jury on three counts of conspiring to harbor illegal aliens in violation of 8 U.S.C. § 1324. Broca-Martinez filed a motion to suppress evidence on January 25, 2016. He argued there was no reasonable suspicion justifying the initial stop and that the exclusionary rule barred all evidence obtained as a result of the stop.

Officer Leal testified to the following at a hearing on the motion to suppress: At the time of the stop, Leal knew the radio-transmission instruction involved a Homeland Security investigation but was unaware of any details. Upon seeing a vehicle that matched the given description, he ran the `license plates through what is called the NCIC/TCIC system, which gives a return on the vehicle, make, model, [and] year’ as well as “a VIN number” and “a confirmation to see if the vehicle is insured.’ Officer Leal has in the past `performed multiple traffic stops for vehicles not having insurance’ and was familiar with the Texas law requiring drivers to have liability insurance. Leal did not stop the vehicle because of Broca-Martinez's undocumented status—a fact he did not know—but because he believed Broca-Martinez was uninsured. He explained that when he types a license plate number into the NCIC/TCIC system, it will either report `insurance confirmed’ or `unconfirmed,’ and after getting a response he knows, `with the knowledge and experience of working,’ whether the vehicle is uninsured.
United States v. Broca-Martinez, supra.
The Court of Appeals goes on to explain that
During the stop, Officer Leal did not ask for proof of insurance. He stated that he `already knew that the vehicle wasn't insured’ based on the `unconfirmed’ status generated by the computer. However, the district court questioned why Officer Leal did not seek to confirm the computer's report, asking specifically whether `reports are sometimes inaccurate.’ Leal responded: `For the most part, no.’ Later, Broca-Martinez's attorney pressed Officer Leal on the `unconfirmed’ status:

`Q: Officer Leal, you said that the information you got on the insurance is that it was unconfirmed?
A: Yes.
Q: So, in other words, he could have or not have insurance, correct?
A: No.
Q: It's unconfirmed?
A: Yes.’

The district court denied Broca-Martinez's motion to suppress. Broca-Martinez entered a conditional plea to one count of conspiracy to transport undocumented aliens in violation of 8 U.S. Code § 1324. Broca-Martinez preserved his right to appeal the district court's denial of his motion to suppress. On June 8, 2016, Broca-Martinez was sentenced to twelve months and one day imprisonment. He timely appealed.
United States v. Broca-Martinez, supra.
The Court of Appeals then takes up its analysis of the issues in the case, explaining that
`[i]n reviewing a district court's denial of a motion to suppress, we review the district court's findings of fact for clear error and its conclusions of law de novo.’ United States v. Lopez-Moreno, 420 F.3d 420, 429 (5th Cir. 2005). `Whether an officer had reasonable suspicion to support a stop is treated as a question of law.’ United States v. Castillo, 804 F.3d 361, 364 (5th Cir. 2015). Nonetheless, this Court views the evidence `in the light most favorable to the prevailing party in the district court—in this case, the Government.’ Id. The district court had jurisdiction under 18 U.S. Code § 3231, and this Court has appellate jurisdiction pursuant to 28 U.S. Code § 1291.
United States v. Broca-Martinez, supra.
The Court of Appeals then began its analysis of the issues, and the arguments, in the case:
Under Texas law, `[a] person may not operate a motor vehicle in [Texas] unless financial responsibility is established for that vehicle through’ either a `motor vehicle liability insurance policy’ or other means such a surety bond, a deposit, or self-insurance. Tex. Transp. Code Ann. § 601.051. Violating this statute is a misdemeanor. Id. § 601.191. At issue in this case is whether Officer Leal had reasonable suspicion that Broca-Martinez was in violation of this statute.
United States v. Broca-Martinez, supra. In a footnote appended to the last sentence above, the court explains that
Broca-Martinez acknowledges that the only reason for the stop was a traffic violation and that Officer Leal `had no information regarding any suspicion of any criminal activity by the passengers’ in the vehicle.
United States v. Broca-Martinez, supra.
The opinion goes on to take up the Fourth Amendment issue, explaining that the amendment
protects individuals against warrantless searches and seizures. U.S. Const. amend. IV. It `applies to seizures of the person, including brief investigatory stops such as the stop of the vehicle here.’ United States v. Cortez, 449 U.S. 411, 417(1981). When a vehicle is stopped, the officer `must have a particularized and objective basis for suspecting the particular person stopped of criminal activity.’ Id. at 417–18, 101 S.Ct. 690. This `reasonable suspicion’ exists `when the officer can point to specific and articulable facts which, taken together with rational inferences from those facts, reasonably warrant the search and seizure. Lopez-Moreno, 420 F.3d at 430. And while the officer must have more than a `mere hunch’ that the person stopped is engaged in illegal activity, `reasonable suspicion need not rise to the level of probable cause.’ Id. Indeed, it requires only `”some minimal level of objective justification” for making the stop.” Castillo, 804 F.3d at 367 (quoting United States v. Sokolow, 490 U.S. 1,7 (1989)).
United States v. Broca-Martinez, supra.
The Court of Appeals then took up the issue in controversy in this case, explaining that
[w]e have not yet addressed whether a state computer database indication of insurance status may establish reasonable suspicion. However, several other circuits have found that such information may give rise to reasonable suspicion as long as there is either some evidence suggesting the database is reliable or at least an absence of evidence that it is unreliable.
United States v. Broca-Martinez, supra.
The opinion then goes on to explain that
[i]n United States v. Cortez-Galaviz, 495 F.3d 1203 (10th Cir. 2007), the Tenth Circuit encountered similar facts and affirmed the denial of a motion to suppress. Id. at 1204. In that case, a Drug Enforcement Agency agent stopped a vehicle after inputting its license plate information into a computer database and receiving the following notification: `INSURED/Not Found: AS OF/9/30/2005 Recommend request proof of insurance.’ Id. The court found this information was `particularized and objective’ and `suggestive of a traffic violation.’ Id. at 1206. While acknowledging that the message `did not as definitively indicate criminal activity as a `no’ response,’ it also did not `equate to an `exculpatory “yes,”’ and the suggestive ambiguity of the particularized and objective information [the officer] had at hand justified his decision to warrant a brief traffic stop. Id. Like Broca-Martinez, the defendant in Cortez-Galaviz argued that the stop was not justified because there were alternative means of complying with the state insurance law. Id. at 1207. But the Tenth Circuit found that argument `overstate[d] the requirements for reasonable suspicion under the Fourth Amendment.’ Idsee also United States v. Miranda-Sotolongo, 827 F.3d 663, 669 (7th Cir. 2016) (`Reasonable suspicion ... does not require the officer to rule out all innocent explanations of what he sees.’). Additionally, although the defendant in Cortez-Galaviz challenged the reliability of the computer database, the court found limited evidence of unreliability, especially when viewed in the light most favorable to the government. 495 F.3d at 1208.
United States v. Broca-Martinez, supra.
And it went on to explain that
[b]y contrast, the Tenth Circuit reached a different conclusion in United States v. Esquivel-Rios, 725 F.3d 1231 (10th Cir. 2013), where there was evidence the database was unreliable. In that case, a Colorado state trooper stopped a vehicle after inquiring into the validity of its temporary registration tag. Id. at 1234. Even though the tag `looked genuine,’ the trooper `called in the tag number to a dispatcher who soon replied “that's a negatory on record, not returning.”’ Id. The trooper stopped the vehicle solely based on that information and found illegal drugs after obtaining consent for a search. Id. at 1234–35. On appeal, the Tenth Circuit found this case distinguishable from Cortez-Galaviz and other cases in which `the record suggested no reason to worry about the database's reliability.’ Id. at 1235. Here, the dispatcher provided critical testimony that `Colorado temp tags usually don't return,’ which the court regarded as `a piece of evidence our cases haven't confronted before: evidence admitted by a district court suggesting that the database on which the officer relied to justify his stop might bear a real problem.’ Id. (emphasis in original).

Cases from the Seventh, Sixth, and Eighth Circuits confronting similar fact patterns are generally consistent with the reasoning in Cortez-Galaviz and Esquivel-RiosSee Miranda-Sotolongo, 827 F.3d at 671 (finding reasonable suspicion established when the database showed no vehicle registration record, `at least in the absence of evidence that [the officer] could not reasonably rely on the absence of a registration record to support an investigative stop’); United States v. Sandridge, 385 F.3d 1032, 1036 (6th Cir. 2004) (concluding there was reasonable suspicion for a stop when license plate check three weeks prior had indicated the driver was driving without a valid license); United States v. Stephens, 350 F.3d 778, 779 (8th Cir. 2003) (holding that when database check showed license plates were `not on file,’ there was reasonable suspicion to stop the vehicle).
United States v. Broca-Martinez, supra.
The court went on to address another issue, explaining that
Broca-Martinez relies only on state court cases to support his argument. See Gonzalez-Gilando v. State, 306 S.W.3d 893, 896–97 (Tex. App.—Amarillo 2010, pet. ref'd) (finding database information insufficient to establish reasonable suspicion because there was no `evidence developing the source of the information comprising the database, explaining what was meant when insurance information was unavailable, . . . [or] illustrating the accuracy of the database’); State v. Daniel, 446 S.W.3d 809, 815 (Tex. App.—San Antonio 2014, no pet.); Contraras v. State, 309 S.W.3d 168, 173 (Tex. App.—Amarillo 2010, pet. ref'd). But although states may `impos[e] more stringent constraints on police conduct than does the Federal Constitution,’ this does not dictate our Fourth Amendment analysis. California v. Greenwood, 486 U.S. 35, 43 (1988). Even so, Broca-Martinez's case is distinguishable from Gonzalez-Gilando; here, there was testimony regarding Officer Leal's experience with the database and suggesting the system was reliable.
United States v. Broca-Martinez, supra. As this Wikipedia entry on precedent in U.S. and other common law countries explains, the decisions of a particular court are usually binding on that court, and may serve as persuasive precedent with regard to other courts. So, it is usual for litigators before a particular court to rely on that court’s precedent, as much as possible.
The Court of Appeals then began the process of enunciating its “holding” – its decision in the case:
[w]e agree with the other circuits that have confronted this question. A state computer database indication of insurance status may establish reasonable suspicion when the officer is familiar with the database and the system itself is reliable. If that is the case, a seemingly inconclusive report such as “unconfirmed” will be a specific and articulable fact that supports a traffic stop. Lopez-Moreno, 420 F.3d at 430. Viewed in the light most favorable to the government, Officer Leal's testimony provides sufficient support for the reliability of the database. Officer Leal explained the process for inputting license plate information, described how records in the database are kept, and noted that he was familiar with these records. He explained that `with the knowledge and experience of working,’ he knows the vehicle is uninsured when an `unconfirmed’ status appears because the computer system will either return an `insurance confirmed’ or `unconfirmed’ response. When Broca-Martinez's attorney questioned the system's reliability, Officer Leal confirmed that it was usually accurate. (`Q: So, in other words, he could have or not have insurance, correct? A: No.’) (`Q: You asked him for his insurance? A: Not that I recall. I already knew that the vehicle wasn't insured.’) (`Q: I mean reports are sometimes inaccurate, right? A: For the most part, no.’).
United States v. Broca-Martinez, supra.
It went on to point out that
[e]ven if Officer Leal was not positive Broca-Martinez was uninsured, he cleared the bar for reasonable suspicion. An officer does not have to be certain a violation has recurred. See Castillo, 804 F.3d at 366. `This would raise the standard for reasonable suspicion far above probable cause or even a preponderance of the evidence, in contravention of the Supreme Court's instructions.’ Id.
United States v. Broca-Martinez, supra.
The court therefore held that “[f]or the foregoing reasons, we AFFIRM the denial of Broca-Martinez's motion to suppress and AFFIRM Broca-Martinez's conviction and sentence.”
United States v. Broca-Martinez, supra.


Monday, May 15, 2017

Computer Crime, “Using” a Computer and the Motion for Judgment of Acquittal

This post examines a recent opinion from the Court of Appeals of Oregon: State v. Tecle, 2017 WL 1929845 (2017). The court begins its opinion by explaining that
[d]efendant appeals a judgment of conviction for 18 counts of identity theft, [Oregon Revised Statutes] 165.800; 12 counts of theft in the second degree, [Oregon Revised Statutes] 164.045; and 18 counts of computer crime, [Oregon Revised Statutes] 164.377(2). He assigns error to the trial court's denial of his motion for a judgment of acquittal on the computer crime counts, arguing that evidence that he knowingly provided false information to banks was not sufficient to show that he `used’ a computer within the meaning of [Oregon Revised Statutes] 164.377(2), because the state should have been required to prove that he directly accessed or manipulated the banks' computers. 
State v. Tecle, supra.
The Court of Appeals went on to point out that
[w]hen denial of a defendant's motion for a judgment of acquittal `centers on the meaning of the statute defining the offense,’ we review the interpretation of the statute for legal error.. State v. Hunt, 270 Or. App. 206, 210, 346 P.3d 1285 (2015) (internal quotation marks and citation omitted). In determining the sufficiency of the evidence, we review the facts in the light most favorable to the state to determine whether a rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt. State v. Cunningham, 320 Or. 47, 63, 880 P.2d 431 (1994), cert. den., 514 U.S. 1005 (1995).
State v. Tecle, supra.
The court then explained why the charges were brought against Tecle:
The relevant facts are undisputed. In September and October 2012, defendant engaged in a scheme to defraud two banks. Defendant personally visited several bank branches and opened checking and savings accounts. Defendant provided the banks' employees with false information, primarily fraudulent social security numbers and home addresses. The bank employees relied on the information defendant provided, entering that information into the banks' computer systems to create bank accounts for defendant. Defendant activated automatic teller machine (ATM) cards and provided worthless checks for deposit into his new accounts. In compliance with federal law, the banks made at least $100 available immediately after defendant opened the accounts, before the checks were processed. Shortly after defendant created the accounts, someone other than defendant used the ATM cards and passwords to withdraw credited funds from the accounts or make purchases before the banks could determine the validity of the checks. As a result, the banks suffered financial losses.

Defendant was charged with multiple counts of identity theft, theft in the second degree, and computer crime. At the close of the state's case, defendant moved for a judgment of acquittal on the computer crime counts, among others, arguing that the state failed to present any evidence that defendant `used’ a computer for purposes of ORS 164.377(2). He argued that there was no evidence that he opened an account online or that he withdrew any money from the accounts using an ATM. Defendant argued that, `just because a bank or a business that you go to uses computers, that doesn't mean that [defendant] used a computer.’ The state countered that defendant was `using a computer system’ by `trying to inflate a bank balance’ so that money could be withdrawn later from an ATM. In the state's view, providing false information to a bank employee, who then enters that information into the bank’s computer database, constitutes `using’ a computer under [Oregon Revised Statutes] 164.377(2). The trial court denied defendant's motion, and the jury convicted defendant on all counts.
State v. Tecle, supra.
The opinion then explains that
[o]n appeal, defendant renews his arguments made in the trial court. Defendant contends that the state's interpretation of the term `use’ under [Oregon Revised Statutes] 164.377(2) is overly broad and contrary to the legislature's intent. The state reiterates its arguments, relying primarily on the statute's text and context to contend that defendant “used” the banks' computer systems for purposes of ORS 164.377(2).

The parties' arguments raise a question of statutory interpretation of whether the legislature intended the phrase, to `use’ a computer system, to reach defendant's conduct here. In construing a statute, we consider its text, context, and legislative history, to discern legislative intent. State v. Gaines, 346 Or. 160, 171-72, 206 P.3d 1042 (2009).
State v. Tecle, supra.
The Court of Appeals began its analysis of this issue by explaining that
We begin with the text and context of the computer crime statute. That statute, [Oregon Revised Statutes] 164.377(2), provides:

`Any person commits computer crime who knowingly accesses, attempts to access or uses, or attempts to use, any computer, computer system, computer network or any part thereof for the purpose of:
`a) Devising or executing any scheme or artifice to defraud;
`(b) Obtaining money, property or services by means of false or fraudulent pretenses, representations or promises; or
`(c) Committing theft, including, but not limited to, theft of proprietary information or theft of an intimate image.’

The statute defines various terms, from `access’ to `services.’ For example, to `access’ is `to instruct, communicate with, store data in, retrieve data from or otherwise make use of any resources of a computer, computer system or computer network.’ ORS 164.377(a)(a) (emphasis added). The statute, however, does not define its term `use.’ 
State v. Tecle, supra.
The Court of Appeals then began its analysis of the meaning, and significance, of “using” a computer, explaining, initially, that 
`[b]ecause the legislature has not defined `use,’ we consider the term's ordinary, plain meaning. PGE v. Bureau of Labor and Industries, 317 Or. 606, 611, 859 P.2d 1143 (1993). The verb `use’ at the time the legislature enacted the statute was defined as `to carry out a purpose or action by means of : make instrumental to an end or process : apply to advantage : turn to account [.]’ Webster's Third New Int'l Dictionary 2524 (unabridged ed. 2002). The dictionary explains that `use is general and indicates any putting to service of a thing, usu[ally] for an intended or fit purpose or person [.]’ Id. That broad definition of `use’ posits a range of meanings, and it begs the question whether to `use’ may be directly or indirectly done.’
State v. Tecle, supra.
The opinion goes on to outline the arguments made by both parties, stating with Tecle:
Both parties argue that the text and context of [Oregon Revised Statutes] 164.377(2) supports their positions. Defendant observes that the plain meaning of `use’ can be either broad or narrow. Defendant argues that the `apply to advantage’ definition of `use’ connotes a `broad definition in which a person could take advantage of something indirectly, without accessing or manipulating it.’ Defendant contrasts that meaning of `use’ with the meaning of the phrases,`putting to service of a thing’ and `mak[ing] instrumental to an end.’ Webster's at 2524. He argues that the latter meaning of `use’ connotes a `more narrow definition in which a person directly manipulates something for an intended purpose, and that the thing being used be crucial to achieving that intended purpose.’ Defendant reasons that, because [Oregon Revised Statutes] 164.377(2) requires that the individual `use’ the computer `for the purpose of’ one of several prohibited activities, the context implies the direct manipulation of the computer for an intended and prohibited purpose, rather than indirectly taking advantage of someone else's manipulation of a computer system. Therefore, defendant posits that the legislature had a narrow definition of `use’ in mind—specifically to target computer hackers—when it enacted the computer crime statute.
State v. Tecle, supra.
The court then takes up the arguments made by the prosecution, explaining that the
state responds that nothing in the statute connotes a requirement that, to `use’ a computer in order to execute a fraud, the perpetrator must personally enter the fraudulent information into the computer. Applying one meaning of `use,’ the state argues that defendant `used’ a computer because defendant `carried out his purpose to commit fraud by means of the banks' computer networks.’ Or, applying another meaning, the state argues that defendant made the banks' computers `instrumental’ to the end of committing theft by fraud, and thus `used them for that purpose.’

For support, the state cites State v. Osborne, 242 Or. App. 85, 255 P.3d 513 (2011) as an application of the dictionary definition of the term `use’ in a different statute. In that case, we concluded that the evidence was sufficient for a jury to find that the defendant `used’ a knife for purposes of first-degree robbery, ORS 164.415, when he held a knife in his hand and demanded money from a store clerk. Id. at 89-90. Osborne does not resolve the question here, however, because, in that case, the defendant personally held the knife to carry out the robbery. Further, dictionary definitions do not resolve our question. `In construing statutes, we do not simply consult dictionaries and interpret words in a vacuum. Dictionaries, after all, do not tell us what words mean, only what words can mean, depending on their context and the particular manner in which they are used.’ State v. Cloutier, 351 Or. 68, 96, 261 P.3d 1234 (2011) (emphasis in original). In this case, further inquiry is needed to determine the legislature's intent.
State v. Tecle, supra.
The court went on to note that
[l]ike defendant, we acknowledge that the plain meaning of `use’ can be broad or narrow. As the parties' textual arguments demonstrate, the court could reach different results depending on how broadly or narrowly the term `use’ is construed. Recognizing a similar dilemma in interpreting another subsection of ORS 164.377, the Supreme Court looked to legislative history to understand that subsection based on the `context of the technology of the time. State v. Nascimento,’  360 Or. 28, 42-44, 379 P.3d 484 (2016); see State v. Perry, 165 Or. App. 342, 349, 996 P.2d 995 (2000), aff'd, 336 Or. 49, 77 P.3d 313 (2003) (`Context may be found in * * * the historical context of those relevant enactments.’). Although the state's proposed construction of the word `use’ in ORS 164.377(2) is plausible, that construction becomes untenable when considered in light of the legislative history.
State v. Tecle, supra.
The opinion goes on to explain that
[t]he statute, ORS 164.377, began as House Bill (HB) 2795. The bill was originally introduced during the 1985 legislative session to combat the theft of cable television services. See Bill File, HB 2795 (1985) (before amendment). Representatives of the General Telephone Company urged a House Judiciary subcommittee to adopt an amendment to respond to a related and growing problem at the time, described as `computer crime, or computer hackers if you will.’ Tape Recording, House Judiciary Committee, Subcommittee 1, HB 2795, May 6, 1985, Tape 576 (statement of Dave Overstreet, General Telephone Company). Sterling Gibson, an employee of General Telephone Company, explained that many businesses had come to use computers and that the purpose of the amendment was to `prevent people from calling into someone's computer’ to manipulate the data and `create havoc to that business or industry.’ Id. (statement of Sterling Gibson). To illustrate the kind of conduct the amendment sought to prohibit, he provided some examples: people who remotely accessed business computers and altered business documents; students who used computers to automatically `scan’ telephone exchanges for unsecured computer systems into which they could remotely dial; and individuals who publicly posted confidential long-distance telephone `billing codes’ on computer bulletin board systems. Id.
State v. Tecle, supra.
The Court of Appeals went on to explain that this
testimony, and other testimony, supports the sense that the bill was targeted at computer hacking and the direct manipulation of information stored within the computer or computer systems. For example, one legislator expressed concern that the amendment might criminalize the conduct of computer hobbyists who used telephone modems of that era to connect with other computers. Id. (statement of Rep Kopetski). Marion County District Attorney Dale Penn emphasized that the law would not apply to people who are allowed access to computer systems:

`There we get into the definition of ‘access.’ I think * * * if you call up to a computer system and you're not authorized you're probably not even going to be able to get the menu up. If you're calling to a bulletin board you're going to see the menu. And that's not what we're addressing here. We're addressing a computer system in which you're not authorized to dial. You won't know the codes.’

Id. (statement of District Attorney Dale Penn). A committee chair asked why the amendment was necessary in light of a previously enacted `theft of services’ statute. Gibson from General Telephone replied that the amendment was concerned with people utilizing computers to `manipulat[e] * * * documents that are vital to th[e] organization,’ which may or may not constitute theft. He stated that, `[a]gain we are not dealing necessarily with the theft of something, we are dealing with manipulation. We have in the environment computers with the ability of having information being observed by another * * *.’ Id. (statement of Sterling Gibson).

The amendments were adopted in the House Judiciary subcommittee and moved to the House Judiciary Committee and the Senate Judiciary Committee, where testimony again focused on computer hacking. At the House Judiciary Committee, legislative counsel stated that the proposed amendment was introduced to address the `idea of people who use their computers or instruments to get access to computer systems or networks and then gain by using the information or program that belongs to someone else.’ Tape Recording, House Judiciary Committee, HB 2795, May 13, 1985, Tape 613, Side A (statement of legislative counsel) (emphasis added). Before the Senate Judiciary Committee, Dave Overstreet, also from General Telephone, emphasized that the `bill address[es] computer hackers—persons who use computers to defraud. Computers can now be used to talk to other computers.’ Minutes, Senate Judiciary Committee, HB 2795, June 7, 1985, 18 (minutes noting comments; audiotape malfunctioned).
State v. Tecle, supra.
The Court of Appeal then began the process of articulating its holding – its decision – in this case, explaining that
[i]n sum, the legislative history of ORS 164.377 demonstrates that the bill was intended to combat `computer hacking,’ commonly understood as the practice of gaining access to a computer system and often tampering with sensitive data or information stored within. See Nascimento, 360 Or. at 42-44. In 1985, the legislature was concerned with people operating a computer to `call[ ] into someone's computer’ to manipulate the data stored within the computer, accessing someone's computer without authorization, and directly using computers for larcenous or fraudulent purposes. There is no indication that the bill was intended to reach the conduct of a person, such as defendant, who simply provided false information to an authorized employee, who then entered that false information into an employer's computer system. The 1985 legislature did not intend to turn ordinary theft or fraud into a computer crime merely when the victim's employee made authorized use of a computer, doing ordinary data entry, and when the perpetrator did not directly access or manipulate the computer.

The state acknowledges that the legislature's motivation was to criminalize computer hacking, but it argues that the `text the 1985 legislature ultimately adopted is not limited to addressing the problem of trespass-by-computer.’ The state argues that subsections (3) and (4) criminalize computer use that is `without authorization,’ so subsection (2) should be construed more broadly to include `areas outside that concern.’

In Nascimento, 360 Or. at 43-44, the Oregon Supreme Court rejected a similar argument about subsection (4) of ORS 164.377. In that case, the issue was the meaning of the phrase, `without authorization.’ Under 164.377(4), it is a crime to use, access, or attempt to access a computer or computer network `without authorization.’ ORS 164.377(4). The state urged the court to adopt a broad interpretation of `without authorization,’ arguing that the defendant's computer use violated her employer's computer use policies and, therefore, her violation of those policies constituted computer crime under ORS 164.377(4). Nascimento, 360 Or. at 35-36. The court concluded that the legislative history of ORS 164.377 established that the statute was intended to `address the unauthorized access of a computer by ‘hackers' or others who had no authority to use the computer.’ Id. at 43. The state contended that, even if the legislative history reflected those concerns, `the text that the legislature adopted is “not so limited,” and that it prohibits all “access” that is ‘without authorization’” Id. at 43-44 (emphasis in original). The court rejected the state's interpretation, explaining that the legislature may ultimately choose to adopt `broader language that applies to a wider range of circumstances than the precise problem that triggered legislative attention,’ but that `does not mean that we necessarily interpret statutes in the broadest possible sense that the text might permit.’ Id. at 44 (internal quotation marks and citation omitted).
State v. Tecle, supra.
The court then articulated its holding, its decision, on this issue:
[s]imilarly, here, the state urges us to interpret `use’ in the broadest possible sense, notwithstanding the narrower legislative history of ORS 164.377. However, we decline to interpret `use’ to include the situation in the present case, where defendant did not directly access or manipulate a computer or computer system in the commission of theft or fraud. Although defendant induced the banks to act to permit his theft, at all times the victim banks remained in unqualified and uncompromised control of their computer systems. Therefore, we conclude that defendant did not `use’ a computer or computer system within the meaning of ORS 164.377(2). The trial court, therefore, erred in denying defendant's motion for a judgment of acquittal on the computer crime counts.
State v. Tecle, supra.
It therefore held that
[c]onvictions on Counts 2, 5, 8, 11, 14, 16, 18, 21, 24, 26, 28, 31, 34, 36, 38, 41, 44, and 47 reversed; Count 10 reversed and remanded for entry of judgment of conviction for identity theft; remanded for resentencing; otherwise affirmed.
State v. Tecle, supra.