Restitution and Proximate Cause

As Wikipedia explains, in law “proximate cause” is “an event sufficiently related to a legally recognizable injury to be held the cause of that injury.”

The Wikipedia entry is really dealing with proximate cause in civil law, especially tort law. As the entry notes, the civil concept of proximate cause includes both actual cause (“but-for” cause, i.e., the harm would not have occurred but for the event that is alleged to have set it in motion) and a more amorphous notion which, as Wikipedia correctly notes, tends to be a device courts use to control the scope of liability in civil cases.

This post is not about a civil case. It’s about a federal criminal case in which proximate cause was used to challenge a court’s order of restitution to the victim of the crime. The case is U.S. v. Woods, 2010 WL 724194 (U.S. District Court for the Northern District of Iowa 2010), and this is how it arose:

Vicky is 19 years of age. [Her] biological father sexually abused her when Vicky was 10 and 11 years old. [He] photographed and videotaped the sexual abuse. Several years later, Vicky was identified as the victim depicted in what has become known as the `Vicky Series.’ The `Vicky Series’ is a collection of child pornography . . . that depicts Vicky's sexual abuse at the hands of her father. . . . [P]eople throughout the world have downloaded and viewed the images of the abuse.

The child pornography found on [Thomas Woods’] computer included six video images and three still images from the `Vicky Series.’ . . .

U.S. v. Woods, supra. Woods was charged with receiving and possessing child pornography in violation of 18 U.S. Code § 2252A. He pled guilty to the receiving child pornography count (Count 1), which initiated the process of imposing sentence on him. U.S. v. Woods, supra. The issue of restitution arose during the sentencing process. As the federal district court judge noted,

Vicky seeks restitution for `$170,345.00 to $193,025.00 in the cost of therapy, $28,366.10 in expenses related to restitution requests . . . and $3,500.00 in attorneys fees.’ . . . In sum, Vicky requests $202,211.10 to $224,891.10 in restitution for her losses. The government seeks this amount on Vicky's behalf.

At the [sentencing] Hearing, the . . . court received as evidence a `Forensic Psychological Examination’ (`Report’) prepared by Randall L. Green, a clinical psychologist. Dr. Green interviewed Vicky on April 10, 2009 and . . . concluded that Vicky `suffered significant, permanent psychological damage as a direct result of the knowledge that images of her victimization, humiliation and exploitation have been downloaded and viewed by numerous individuals.’ Dr. Green believes that Vicky will `continue to suffer from the knowledge and belief that those images of her childhood abuse are at high probability to continue to be downloaded for prurient purposes.’

Among the specific harms Vicky suffered or continues to suffer, Dr. Green . . . reduced academic performance, alcohol abuse, anger/resentment, anxiety, depression, distrust of men, lost earnings, insomnia and sleep disturbances, `reactivation’ of trauma-related reminders and shame and embarrassment. . . . [He] estimated that the recommended therapy for Vicky would cost between $126,365 and $128,005, plus medication costs.

The court also received a `Psychological Status Report Summary’ (`Supplemental Report’) prepared by Dr. Green. On November 6, 2009, [he] conducted a follow-up interview with Vicky. . . . [He] found Vicky's emotional well-being had deteriorated since his initial Report. Dr. Green attributes this to . . . Vicky's live statements at the sentencing hearings of several defendants who possessed her images, her receipt of more `victim notifications’ and several attempts by individuals to contact her over the Internet. Dr. Green now estimates Vicky's costs for therapeutic recommendations to be between $170,345 and $193,025.

U.S. v. Woods, supra. In considering the sentence and possible restitution to be imposed on Woods, the court also accepted a letter from Vicky, in which she wrote:

I learn about each [defendant who possessed the `Vicky Series’] because of the Victim Notices. I have a right to know who has the pictures of me. The Notice puts name on the fear that I already had and also adds to it. When I learn about one defendant having downloaded the pictures of me, it adds to my paranoia, it makes me feel again like I was being abused by another man who had been leering at pictures of my naked body being tortured, it gives me chills to think about it. I live in fear that any of them[ ] may try to find me and contact me and do something to me.

U.S. v. Woods, supra. Woods objected to an award of restitution to “based upon a lack of proximate cause between his offense of conviction and the areas of restitution sought by the victim.” U.S. v. Woods, supra. The prosecution argued that “Vicky is a victim of [Woods’] who was directly and proximately harmed by [his] conduct.” U.S. v. Woods, supra. In ruling on the issue, the federal judge addressed two issues: (i) whether restitution was mandatory or discretionary and (ii) whether it was appropriate in this case. U.S. v. Woods, supra.

On the first issue, the court noted that 18 U.S. Code § 2259 makes restitution mandatory for “Chapter 110 offenses” and that possessing and receiving child pornography “are Chapter 100 offenses which would typically be subject to the mandatory restitution provision.” U.S. v. Woods, supra. (Section 2252A of Title 18 of the U.S. Code is in Chapter 110 of that title, which makes then Chapter 110 offenses.) The judge ultimately held, however, that the mandatory restitution provision didn’t apply here because Woods pled guilty to receiving child pornography and the images from the Vicky Series were not part of the factual basis for that count (though they were part of the factual basis for the possessing child pornography count). U.S. v. Woods, supra. In other words, the count to which he pled guilty was not based on images from the Vicky Series.

The judge then noted that § 3663 of Title 18 of the U.S. Code gives courts discretion to award restitution in sentencing for Title 18 offenses; possessing child pornography is a Title 18 offense, as is receiving child pornography. U.S. v. Woods, supra. The judge didn’t need to decide if Woods’ pleading guilty to a count that didn’t involve images form the Vicky Series prevented her from imposing restitution because in his plea agreement Woods agreed to pay restitution to “victims of the offense to which he is pleading guilty as well as to all those victimized as part of the same course of conduct. . . . [which’ includes any offense dismissed as a result of this plea agreement”. U.S. v. Woods, supra. The judge therefore found that she had discretion to order Woods to pay restitution to Vicky, if that seemed appropriate. U.S. v. Woods, supra.

Woods, remember, objected to restitution on the grounds that he wasn’t the proximate cause of the injuries for which Vicky sought restitution. The judge, therefore, addressed the issue of causation. She found, first, that § 2259 (which didn’t apply here) “requires a causal connection between the offense of conviction and the victim’s harm.” U.S. v. Woods, supra. She found a similar requirement in § 3663, which did apply here: “Courts have . . . required some showing of proximate cause for discretionary restitution awards under § 3663. This requirement is gleaned from the statute's definition of `victim’ as a person who is `directly and proximately harmed by the commission of an offense for which restitution may be ordered’”. U.S. v. Woods, supra (quoting § 3663(a)(2)).

The 8^th Circuit Court of Appeals, which is the court whose decisions are binding on federal district courts in Iowa, has not “developed a precise causation standard for restitution awards”, so this judge relied on decisions from other federal Courts of Appeal. U.S. v. Woods, supra. She noted that the 1^st Circuit Court of Appeals held, in U.S. v. Vaknin, 112 F.3d 579 (1997), that in seeking restitution the prosecution “must show not only that a particular loss would not have occurred but for the conduct underlying the offense of conviction, but also that the causal nexus between the conduct and the loss is not too attenuated (either factually or temporally).” U.S. v. Woods, supra. The judge therefore found that restitution would only be appropriate in this case if the government proved by a preponderance of the evidence that Woods’ conduct was the proximate cause of Vicky’s losses. U.S. v. Woods, supra.

In analyzing causation in this case, the judge said it was “abundantly clear . . . that Vicky has been, and continues to be, harmed by the . . . knowledge of individuals who receive and possess images depicting her abuse” and will require “extensive counseling” to deal with the harm done by the dissemination of the images. U.S. v. Woods, supra. She did not, though, find that the government proved the causal connection between that harm and Woods’ conduct necessary for her to award restitution:

[T]here is no evidence . . . as to what losses were caused by [Woods’] possession of her images. Neither Dr. Green's Report nor his Supplemental Report identify any particular loss attributable to [Woods’] possession of Vicky's images. [His] name is not mentioned in either document. None of the documentation offered in support of Vicky's restitution request mentions [his] name or the impact [his offense had on [her]. . . .

The court is unable to determine to any reasonable certainty what losses are attributable to the original abuse by Vicky's father, what losses are attributable to others who have received, distributed or possessed the images or what losses were caused by [Woods’] conduct. . . .

[I]t is the court's duty . . . to determine whether [Woods] can be ordered to pay restitution to Vicky. To do so, the court must be able to determine, within reason, what losses Vicky suffered as a result of [his] conduct. . . . [T]he court is unable to make this determination.

U.S. v. Woods, supra. The judge declined to order restitution and said she would sentence Woods “on a date and time set forth by separate order.” U.S. v. Woods, supra. According to this news story, on March 26 Woods was sentenced to serve 97 months in prison, followed by 10 years of supervised release.

In her opinion, the Woods judge noted that “victims and the government have only recently begun seeking restitution from those who receive and/or possess child pornography.” U.S. v. Woods, supra. She explained that courts are taking one of three approaches to the issue: (i) some award the entire amount of restitution requested without conducting a proximate cause analysis; (ii) others conduct a proximate cause analysis and often refuse to award restitution; and (iii) some have “adopted a set amount” of restitution for each defendant convicted of possessing child pornography. U.S. v. Woods, supra. “For example, the Central District of California seems to routinely order restitution of $5000 while the Eastern District of California routinely orders restitution of $3000.” U.S. v. Woods, supra.

"Fantasy Alone"

This post is about a federal prosecution that was brought under 18 U.S. Code § 2422(b). Section 2422(b) provides as follows:

Whoever, using the mail or any facility or means of interstate or foreign commerce, . . . knowingly persuades, induces, entices, or coerces any individual who has not attained the age of 18 years, to engage in prostitution or any sexual activity for which any person can be charged with a criminal offense, or attempts to do so, shall be fined under this title and imprisoned not less than 10 years or for life.

The case is U.S. v. Hofus, 2010 WL 986799 (U.S. Court of Appeals for the 9^th Circuit 2010), and this is how it arose:

In February 2008, several 12 to 16-year-old girls had a sleep over party in Nevada. During the party, two of the girls, M.M. and B.T., took nude photos of themselves and sent them by cell phone to a 15-year-old boy, T.H. Although unclear how [Terrance] Hofus learned about the photos, after the party B.T. began receiving text messages from a number she did not recognize. From that number, Hofus sent her various sexual messages and told her that unless she and M.M. met with him to do sexual things, he would send the nude photos to everyone they knew and post them on the Internet.

After the party, M.M. also exchanged text messages with Hofus, thinking he was the 15-year-old boy. When these texts became very sexual, M.M. told her mother and older sister about them. M.M.'s sister called the number and told him to stop calling her 14-year-old sister. Hofus also left several voicemail messages on M.M.'s phone.

Although . . . Hofus's phone did not give him the ability to view the nude photos, he made the girls believe he had seen them and had them in his possession. For example, Hofus sent B.T. a text that he was at a Kinko's copy shop and had found a way to enlarge cell phone images to poster size: `think that if we printed up the 2 of u girls and hung them up at the high skol that it wud help u keep u r promise to me they look hot there a lot detail big.’

B.T. eventually told a teacher about the problem, and, ultimately, the FBI took over the investigation. Special Agent Brewer took M.M.'s cell phone and downloaded the voicemail messages from Hofus. Brewer also took B.T.'s cell phone and found several text messages from Hofus, including one which said `I am ok with not having sex it wud help me get rid of the urge if we could just talk like the 3 of us did before that's all want’ and another which said `come on babe lets do this u know u want to be with me.’

Brewer posed as B.T. and began texting with Hofus. Brewer recorded all text messages and voicemails received on B.T.'s phone. Brewer asked for the pictures back; Hofus asked what she was willing to do to get them. Later, Hofus . . . became suspicious and asked her `Why are u talking 2 the police’ and `some one knows a detective.’ Hofus asked B.T. to promise that whatever they might do would stay between them -- `no friends parents police.’ He insisted on talking to B.T. on the phone to arrange a meeting (`We need to talk on phone how far can u travel` `we need to talk tonight or forget it’).

With her parents' permission, B.T. spoke to Hofus on a monitored phone and arranged to meet him at the Parklane movie theater to see the movie Juno. . . . [H]e continued to send her sexually explicit texts asking about her sexual experiences. . . .

[T]he FBI set up surveillance at the Parklane theater. At noon, Hofus sent a text asking, `Are u going to let me taste u naked.’ He also sent a message suggesting B.T. go to the McDonald's near the theater instead. When the agents went to the McDonalds, they noticed Hofus sitting on a bus stop bench across the street from the theater, using his cell phone, and arrested him.

U.S. v. Hofus, supra. Hofus was charged with 1 count of violating § 2422(b), convicted by a jury and sentenced to 130 months in prison. U.S. v. Hofus, supra. He appealed, arguing, among other things, that the judge “erred by limiting the scope of his expert's opinion and thereby prevented him from presenting a defense.” U.S. v. Hofus, supra.

At trial, Hofus's expert, Dr. McEllistrem, made a proffer of his testimony, which included his opinion that (1) there was no `grooming’ activity . . . as you would normally find with sex offenders, because the girls were sexually experienced; (2) Hofus valued the text communications as `fantasy alone’; and (3) Hofus was not a hebophile (having an abnormal sexual interest in youthful women with some secondary sexual characteristics) or a pedophile (having an abnormal sexual interest in prepubescent children).

The court ruled that the doctor could testify about `grooming,’ his opinion that Hofus was not a hebophile, and generally about fantasy-based communications. However, the court agreed with the government that pedophilia was irrelevant because the case involved only post-pubescent girls, and Dr. McEllistrem could not express any opinion concerning Hofus's actual intent at the time specific acts occurred. When prompted by the government to clarify how that ruling applied to the `fantasy’ testimony, the court ruled:

`Well, he certainly cannot testify that in the final stages of this text messaging that Hofus was operating under a fantasy because the opinion that he was operating under a fantasy suggests there was no intent to persuade, induce, or entice these girls and, one, it's frankly irrelevant to that, and two, it's confusing to the jury, so I would not allow that.’

The defense then asked whether Dr. McEllistrem could testify that it was unlikely Hofus would act on the intentions expressed in his texts. The court concluded that this was also irrelevant, and that the expert could not testify whether Hofus was likely to engage in the ultimate sexual activity with the minor.

U.S. v. Hofus, supra. The 9^th Circuit Court of Appeals held that the trial judge correctly excluded the fantasy testimony under its decision in U.S. v. Goetzke, 494 F.3d 1231 (U.S. Court of Appeals for the 9^th Circuit 2007).

The Goetzke court held that there is a “distinction between the intent to persuade or attempt to persuade a minor to engage in a sex act and the intent to actually commit the criminal sex act itself.” U.S. v. Goetzke, supra. The Court of Appeals also relied on a decision from the U.S. Court of Appeals for the Sixth Circuit: U.S. v. Bailey, 228 F.3d 637 (2000). The Bailey court explained that while

it may be rare for there to be a separation between the intent to persuade and the follow-up intent to perform the act after persuasion, they are two clearly separate and different intents and the Congress has made a clear choice to criminalize persuasion and the attempt to persuade, not the performance of the sexual acts themselves. Hence, a conviction under the statute only requires a finding that the defendant had an intent to persuade or to attempt to persuade.

U.S. v. Bailey, supra.

The Hofus court therefore found that expert testimony as to whether Hofus was

likely to actually have sex with B.T. was irrelevant to whether Hofus violated § 2422. Similarly, the proffered testimony that Hofus valued the sexual texting with B.T. `in fantasy alone’ necessarily implies that Hofus lacked the intent to actually have sex with B.T., but does not make it more likely or not that he attempted to entice or persuade her to agree to an illegal sex act. . . . The district court also correctly noted that this portion of the expert's proposed testimony would likely confuse the jury as to which intent it was required to find Hofus had possessed.

U.S. v. Hofus, supra.

The Hofus court distinguished the U.S. Court of Appeals for the 7^th Circuit’s decision in U.S. v. Gladish, 536 F.3d 646 (2008), which held that a defense expert should have been allowed to testify that “`it was unlikely, given the defendant’s psychology, that he would act on his intent’” as expressed in the sexual chats he had engaged in with a federal agent posing as a minor. U.S. v. Hofus, supra (quoting U.S. v. Gladish).

The Hofus court distinguished the Gladish decision on the grounds that the Gladish case only involved “Internet banter”, which presumably did not clearly support the inference that Gladish would act on what was being said. U.S. v. Hofus, supra. “[T]he situation here is factually distinct because Hofus took the additional steps of proposing a meeting, agreeing to a place, and arriving at a place near that destination.” U.S. v. Hofus, supra.

The proffered expert testimony in Hofus's case appears directed solely at the propensity to actually commit the underlying sexual act, which was not before the jury. But even if the `fantasy alone’ testimony was offered to show an absence of intent to `persuade, induce or entice’ (as opposed to an absence of intent to commit the underlying sexual act), then it goes to the ultimate issue the jury must decide, and was properly excluded under Rule 704(b) [of the Federal Rules of Evidence] (`No expert witness testifying with respect to the mental state . . . of a defendant in a criminal case may state an opinion or inference as to whether the defendant did or did not have the mental state . . . constituting an element of the crime charged or a defense thereto.’). To say that Hofus meant the texting only as fantasy is simply another way of saying he did not really intend to entice or persuade the young girls, which is precisely the question for the jury. If the jury accepted Dr. McEllistrem's testimony that Hofus engaged in texting B.T. `in fantasy alone,’ it would necessarily follow that Hofus did not possess the requisite mens rea to violate § 2422. Such an opinion would thus run afoul of Rule 704(b)’s prohibition on such testimony.

U.S. v. Hofus, supra.

The distinction the 9^th Circuit draws between actually engaging in sexual activity with a minor and persuading (or attempting to persuade) a minor to engage in such activity makes sense if you realize that the § 2422(b) crime is an inchoate, or incomplete crime. As Wikipedia explains, inchoate crimes – such as conspiracy, attempt and solicitation – all involve activity that is designed to culminate in the commission of a completed, or substantive, crime. As I’ve noted, these traditional inchoate crimes all require that there have been a target crime: Someone cannot be charged merely with attempt; someone is necessarily charged with attempting to commit murder or rape or arson, etc. This means, as Wikipedia notes, that the defendant has to have had the intent to commit the target crime, e.g., murder, rape or arson.

Section 2422(b) essentially creates a free-standing inchoate crime. It makes it an offense to persuade or entice or attempt to persuade or entice a minor to engage in sexual activity; the crime therefore does not require an intent to carry through and actually engage in sexual activity with a minor (other statutes criminalize that).

The Councilman, Spyware and the Computer Fraud and Abuse Act

This post is about a federal prosecution that was brought in South Carolina in the fall of 2009. The defendant – Harold Anthony "Tony" Trout – was elected to the Greenville County Council in 2004 and held that office until he was indicted on the charges we’re going to examine in this post. Appellant’s Opening Brief, U.S. v. Trout, 2009 WL 3398217 (U.S. Court of Appeals for the 4^th Circuit).

In discussing the facts, the charges and most of the issues in the case, I’m going to rely on the briefs the parties filed with the U.S. Court of Appeals for the 4^th Circuit after Trout was convicted. U.S. v. Trout, supra. I’m relying primarily on the briefs because Trout raised only one issue on appeal and the 4th Circuit rather summarily rejected his arguments on that issue (so the opinion is short).

While I think the 4^th Circuit’s ruling on that issue is probably correct. I found other aspects of this case interesting, and so decided to write about it. Here, according to the appellate brief Trout filed with the 4^th Circuit, is how the prosecution arose:

[Councilman,] Trout focused on procurement . . . .[His] requests for information on county procurement often resulted in excuses and delays. . . . Trout's battle for public disclosure of information on county procurement put him at odds with the majority of the council. . . .Eventually the chairman and county council began to resist Trout's attempts to make procurement information public, first through statements and later by passing resolutions contrary to his efforts. Trout responded by attempting to have the grand jury investigate several matters involving the county's administration and procurement. . . .

[In] 2008, council chairman Butch Kirven approached Trout about trouble Kirven was having at his home and office. Kirven [asked] Trout if he had any knowledge about security programs for computers. . . . Trout purchased and sent Kirven . . . a computer program (Remote Spy) from a company called Cyberspy. . . .

Kirven forwarded the email from Trout, with the Remote Spy attachment, to county administrator Kernell. Kirven [said he] didn't recognize the sender . . . and was having trouble opening the attachment; [he] did not alert Kernell of the Remote Spy attachment. When Kernell attempted to open the email . . . the program deployed on Kernell's county computer. . . . [and] began to monitor the use of Kernell's county computer by sending information. . . to a server in Texas where the information was available for retrieval using the password provided with the purchase of the program.

Trout later accessed the information on the Texas server and discovered information which apparently originated from Kernell's county computer. Believing the county's computer policy provided no expectation of privacy through Kernell's use of a county computer Trout monitored information being sent to the Texas server. Trout discovered several things sent from Kernell's computer that appeared to be against the law, county policy, or both. [He] discovered what appeared to be . . . grand jury tapes Kernell was accessing. There appeared also to be evidence Kernell was accessing websites and having personal communications contrary to county policy. From information Kernell had entered on the county computer Trout was also able to access Yahoo email accounts used by Kernell. This led to additional discoveries of numerous violations by Kernell of the County's electronic media policy. . . .

Trout maintained a website he used to inform the public of his efforts against public corruption. [He posted] . . . information and screen shots from the Texas server, as well as information . . . from . . . Kernell's Yahoo account . . .on his website. . . . [He also] provided . . . information . . .from Kernell's county computer to the foreman of the grand jury, the attorney general, judges, a public corruption task force [and] the newspaper. This resulted in at least one matter being turned over to the Ethics Committee. Trout also provided information from Kernell's computer to a friend, David Smith, for delivery to the FBI. Based on his understanding of the county computer policy, Trout never believed at any time prior to his arrest that he might have broken the law. Trout's understanding of the county's policy was that Kernell had, by signing the policy document, consented to the monitoring of his county computer and that none of the information on the computer had any expectation of privacy associated with it. . . . Trout was surprised when the . . . FBI execut[ed] search warrants at his home on the morning of election day.

Appellant’s Opening Brief, supra. You can read more about the facts here.

On October 22, 2008, a federal grand jury indicted Trout on 5 counts of violating three federal criminal statutes. Brief of Appellee, U.S. v. Trout, 2009 WL 4623515 (U.S. Court of Appeals for the 4^th Circuit). He was charged with 2 counts of violating 18 U.C. Code § 1030(a)(2)(C); 2 counts of violating 18 U.S. Code § 2511; and one count of violating 18 U.S. Code § 1519.

As I’ve noted before, 18 U.S. Code § 1030 (a/k/a the Computer Fraud and Abuse Act) is the general federal computer crime statute. Section 1030(a)(2)(C) makes it a crime to intentionally access a computer without authorization of by exceeding authorized access and thereby obtain information from the computer. As I’ve also explained, 18 U.S. Code § 2511 makes it a crime to unlawfully intercept electronic communications. So Trout is basically charged with 2 counts of hacking and 2 counts of illegal wiretapping. Section 1519 creates an obstruction of justice offense; under this statute, it’s a federal crime to alter, destroy, conceal and/or falsify any record with the intent to obstruct a federal investigation. I really don’t know what facts supported this particular charge.

Trout was convicted and appealed, arguing that the trial court admitted evidence in violation of Rule 404(b) of the Federal Rules of Evidence. U.S. v. Trout, supra. As I noted in an earlier post, Rule 404(b) is an exception to the general evidentiary rule that bars using prior acts to prove a defendant’s character in order to show that what he did which led to his being charged was consistent with what he’d done before.

Trout argued that the trial judge violated Rule 404(b) when he let the government introduce evidence concerning his behavior as a councilman. Specifically, he said the prosecution “attempted to show Trout as a rogue official who bullied county employees in his attempts to obtain information” and sought to link that “character” evidence to the facts at issue in the indictment. Appellant’s Opening Brief, supra. This evidence was used to rebut Trout’s claim that he believed he was not violating the law when he used the Remote Spy program to acquire information from county files and from Kernall’s email account. Appellant’s Opening Brief, supra.

The prosecution had a very different take on all this. Its appellate brief says Kirven didn’t ask Trout for help with his computer; instead, according to the government’s witnesses, Trout bought the spyware program and then emailed it using “an anonymous email account that he created . . . prior to sending the RemoteSpy bug to Kirven.” Brief of Appellee, supra. And, again according to the government, Trout used the program to obtain

screenshots, keystroke logs, and username and password information from the county administrator's computer. The usernames and passwords included a credit card account, a bank account, an account with the South Carolina Department of Natural Resources, and two private email accounts. [Trout] then used the usernames and passwords that he had intercepted to separately access Kernell's private email accounts.

Brief of Appellee, supra.

Trout, remember, said he lacked criminal intent when he did all this (which pretty clearly violated both § 1030 and § 2511). To rebut that argument, the prosecution used the testimony of Kirven and Kernell and the testimony of Mark Tollison, the Greenville County Attorney; Tollison testified “about the lack of authority that individual members of county council have when it pertains to the management and investigation of county employees” and about “three formal measures that were taken . . . to limit the repeated and abusive demands from defendant on county employees.” Brief of Appellee, supra.

In responding to Trout’s Rule 404(b) argument, the prosecution pointed out that the “violations in this case did not occur in a vacuum. Instead, they occurred within the broader context of an extended pattern” of Trout’s efforts to conduct investigations and gather information. Brief of Appellee, supra. The prosecution argued that it needed the testimony of the witnesses noted above plus other evidence of the measures the county council (and, apparently, other agencies) had taken in an effort to put a stop to Trout’s unauthorized efforts to conduct his own investigations. Brief of Appellee, supra. The government, then, pointed out that the evidence was relevant to charges in the case and that Trout didn’t object to some of it, including a memo by the chair of the county council that said “`only the council can authorize and initiate . . . investigations”. Brief of Appellee, supra.

Given all this, it’s probably not surprising that the 4^th Circuit didn’t spend much time on Trout’s appeal. After noting the purpose and limitations of Rule 404(b), the 4^th Circuit said that “[h]aving carefully reviewed the record, we “hold that the evidence pertaining to Trout's history with the other council members, Kernell, and other county staff is intertwined with and provided context to Trout's conduct underlying the charges.” U.S. v. Trout, supra. The appellate court did not find it necessary to hear oral argument in the case, instead deciding it on the factual record and the briefs submitted by the parties. U.S. v. Trout, supra.

That, I assume, leaves Mr. Trout to finish serving the sentence the federal judge imposed on him after he was convicted. As this news story explains, Trout was sentenced to 12 months and 1 day in prison, that to be followed by 3 years of supervised release by the U.S. Probation Office. The story says he qualifies for credit for good behavior, and so could serve as little as 10 months. I don’t know when he began serving the sentence, but as this story notes, he was in prison in mid-March, when this decision came down. If you’d like to see an interview Trout gave just after being convicted (and other videos related to this case), you can find them here.

I cannot imagine what possessed Mr. Trout. I’m sure he honestly believed he was trying to clean up local government, but how could anyone believe that desire justifies gaining unlawful access to government computers, and bank, credit card and email accounts?

Cyber-Extortion

I keep looking for good cyber-extortion cases, but I rarely find one. This post is about a man who was recently charged with cyber-extortion, but not under the general federal cybercrime statute: 18 U.S. Code § 1030. I’m writing about this case because it illustrates the very specific types of conduct the general federal cybercrime statutes addresses in its provision on extortion.

According to this U.S. Department of Justice Press Release, on March 6, 2010 Anthony Digati was arrested was arrested on charges of `attempting to extort approximately $200,000 from a New York-based life insurance company by threatening to make false public statements and transmit computer spam in an effort to damage the reputation of the company and cost it millions of dollars in revenue.’ Here’s how the complaint that was used to charge Digati described what he did:

On February 22, 2010, more than a dozen employees, executives, and one board member of the life insurance company (the `Company’) received an e-mail signed `Anthony Digati.’ The e-mail reads, in part, `I HIGHLY suggest you visit this website and contact me afterwards.’ The e-mail provides a website address that leads a viewer to a website created by DIGATI (the `Website’).

The website includes, among other things, the following text:

1. These things, unless you honor the below claim, WILL HAPPEN on March 8, 2010.
2. As you have denied my claim I can only respond in this way. You no longer have a choice in the matter, unless of course you want me to continue with this outlined plan. I have nothing to lose, you have everything to lose.
3. My demand is now for $198,303.88. This amount is NOT negotiable, you had your chance to make me an offer, now I call the shots.
4. I have 6 MILLION e-mails going out to couples with children age 25-40, this e-mail campaign is ordered and paid for. 2 million go out on the 8th and every two days 2 million more for three weeks rotating the list. Of course it is spam, I hired a spam service, I could care less, The damge [sic] will be done.
5. I am a huge social networker, and I am highly experienced. 200,000 people will be directly contacted by me through social networks, slamming your integrity and directing them to this website within days.
6. I think you get the idea, I am going to drag your company name and reputation, through the muddiest waters imaginable. This will cost you millions in lost revenues, trust and credibility not to mention the advertising you will be buying to counter mine. Sad thing is it’s almost free for me!
7. The process is in motion and will be released on March 8th, 2010. If you delay and the site goes live, The price will then be $3,000,000.00.

Press Release, supra. According to this news story, Digati “allegedly contacted the company’s customer service phone center in January and expressed dissatisfaction with the performance of his variable universal life insurance” and then contacted the company “by letter in February, demanding the return of his premiums paid to date on the policy”.

Now let’s talk extortion law. As I noted in a post I did earlier this year, in 2008 Congress revised the federal cyber-extortion provision, which is codified as 18 U.S. Code § 1030(a)(7). As I explained in that post, Congress expanded the statute’s scope because prior to the revision it only targeted sending threats to “cause damage” to a computer. I don’t think what the conduct being attributed to Digati would have constituted extortion under the version of the statute.

The revised version of § 1030(a)(7) (which went into effect in 2008 and could therefore apply to what Digati is alleged to have done) makes it a federal crime for one acting with the intent to extort “any money or other thing of value” to transmit interstate commerce “any communication containing” a threat to do any of the following: (i) cause damage to a computer; (ii) obtain information from a computer without authorization or in excess of authorization or to impair the confidentiality of information obtained from a computer without authorization or by exceeding authorized access or (iii) demand “money or other thing of value in relation to damage to a” computer where the damage “was caused to facilitate the extortion”.

The second option clearly couldn’t apply to the conduct attributed to Digati because there’s no allegation that he obtained information from a computer without being authorized to do so. And it doesn’t appear that the other options would apply, either. Since both require “damage” to a computer, for either to apply what Digati is alleged to have done would have to constitute his “damaging” a computer. I don’t think we have that here.

Section 1030(e)(8) of Title 18 of the U.S. Code defines “damage” as “any impairment to the integrity or availability of data, a program, a system, or information.” What Digati is alleged to have done clearly constitutes extortion, as I explain below, but I don’t see that it involved any “damage” to a computer. His (alleged) extortion scheme wasn’t predicated on damaging a computer; it was (allegedly) predicated on damaging the company’s “name and reputation.” It seems, then, that he couldn’t be prosecuted under 18 U.S. Code § 1030(a)(7).

But he was charged with extortion, which means he had to be charged under another federal extortion statute. The Press Release, and news stories I’ve seen on the case, say Digati was charged “with one count of extortion through interstate communications.” Press Release, supra. My guess is that he’s charged under 18 U.S. Code § 875(d), a federal statute that makes it a crime for someone to do the following: “with intent to extort from any person, firm, association, or corporation, any money or other thing of value, transmit[] in interstate or foreign commerce any communication containing any threat to injure the property or reputation of the addressee”. (emphasis added). That statute clearly seems to apply here . . . and I don’t think any of the other federal extortion statutes (there aren’t that many) would apply.

So let’s assume Digati is charged under § 875(d). I can see an argument his attorneys (if and when he gets attorneys) could make as to why the charge is flawed and/or why he should not be convicted of it if he goes to trial. As I noted above, Digati earlier contacted the company and asked them to return the payments he’d made on his life insurance premium because he wasn’t satisfied with its performance. The e-mail he allegedly sent to company officials demanded they pay $198,303, “or four times the amount of his total paid premiums.” I don’t know where he got the concept of quadrupling his premiums, but his demand clearly had some basis in what he’d paid the company and his dissatisfaction with what he got for what he paid.

Why do I bring that up, you ask? Well, the § 875(d) crime, unlike the § 1030(a)(7) crime and other extortion offenses, is predicated in part on mere speech. That is, extortion statutes – like § 1030(a)(7) – are usually predicated on threats to injure a person or property; that kind of threat is much more straightforward than the reputational kind of threat criminalized by § 875(d).

In U.S. v. Jackson, 180 F.3d 55 (U.S. Court of Appeals for the Second Circuit 1999), a federal court of appeals noted that “not every threat to make a disclosure that would harm another person’s reputation is wrongful”, i.e., not every such threat comes with the scope of § 875(d). In explaining what kinds of threats can be prosecuted under § 875(d), the court noted that

not all threats to reputation are within the scope of § 875(d). . . . [T]he objective of the party employing fear of . . . damage to reputation will have a bearing on the lawfulness of its use, and . . . it is material whether the defendant had a claim of right to the money demanded.

We . . . view as inherently wrongful the type of threat to reputation that has no nexus to a claim of right. There are significant differences between . . . threatened disclosures of such matters as consumer complaints and nonpayment of dues, as to which the threatener has a plausible claim of right, and . . . threatened disclosures of such matters as sexual indiscretions that have no nexus with any plausible claim of right. In the former category of threats, the disclosures themselves -- not only the threats -- have the potential for causing payment of the money demanded; in the latter category, it is only the threat that has that potential, and actual disclosure would frustrate the prospect of payment. . . .

We conclude that where a threat of harm to a person's reputation seeks money or property to which the threatener does not have, and cannot reasonably believe she has, a claim of right, or where the threat has no nexus to a plausible claim of right, the threat is inherently wrongful and its transmission in interstate commerce is prohibited by § 875(d).

U.S. v. Jackson, supra.

Since Digati’s alleged conduct involved a demand for a sum of money that was apparently rooted in the premiums he had paid the company and believed should be refunded, I could see his defense attorney making an argument under this court’s interpretation of § 875(d). That is, I could see the defense attorney arguing that in engaging in the conduct attributed to him, Digati was acting under a “claim of right,” i.e., he believed he was entitled to the money he allegedly demanded from the company.

I’m not saying the argument would work. I’m just saying I can see its being made.

On another note, I continue to be amused by the press’ referring to crimes like this as “cyber-extortion.” And yes, I know I used that term as the caption for this post, but I had my reasons for doing so.

I chose to write about this case in part to point out that it is not being prosecuted under the federal cyber-extortion provision, § 1030(a)(7), but under § 875(d), a statute that was added to the federal criminal code in 1948 and hasn’t been substantially altered since. There’s a certain irony there: The cyber-specific federal extortion provision, which was added to the federal criminal code in 1984 and was substantially revised in 2008, simply doesn’t address the kind of (allegedly) extortionate conduct at issue in this case. Instead, prosecutors had to rely on a generic extortion statute.

As I’ve noted here and elsewhere, I think we should be cautious about creating new, cyber-specific criminal statutes; I think we should, whenever possible, either rely on existing offenses or update those offenses so they can encompass the use of computer technology to commit an old crime. I think that approach is advisable for two reasons: One is that it avoids cluttering up criminal codes with new and at least arguably superfluous offenses. The other is that it lets us use established offenses, which have been reviewed and analyzed by courts, to prosecute cases; that, in turn, can reduce the possibility of a charge being thrown out because of some defect in the statute itself and/or in the way the crime was charged.

Borders, Laptops and Exigencies

As I’ve noted in several earlier posts, the border search exception is one of the exception to the 4^th Amendment’s default requirement that officers get a warrant before they search and/or seize someone’s property. Wikipedia has a post that does a good job of explaining what the border search exception is and what it authorizes.

This post is about a recent case from a federal judge in Michigan that involved the border search exception. The case is U.S. v. Laich, 2010 WL 259041 (U.S. District Court for the Eastern District of Michigan 2010), and this is how it arose:

Ronald Mancos, of Melvindale, Michigan, complained to his local police department that he had received two images of child pornography while chatting online during the early morning hours of February 13, 2005. Mancos [said]. . . the person with whom he had been chatting utilized a Yahoo! profile name of `playthangnyc 18.’ Four days later, this information was conveyed to Immigration and Customs Enforcement (ICE) agents who determined that . . . playthangnyc 18 was registered to [James] Laich. . . . After Mancos consented to a forensic search of his computer, the ICE agents retrieved eight child pornographic images from `unallocated space’ on its hard drive. The images were not attached to any email and were not found to be connected to playthangnyc 18 or Laich. . . . [O]nly four of the images were the same as those Mancos reported to the ICE agents. [Agent] Buloushi, who had been authorized by Mancos to search his email account, found no evidence of child pornography after examining approximately 750 messages.

ICE agents placed Laich on a Treasury Enforcement Communications System (TECS) `lookout’ list which is maintained by the United States Customs and Border Protection . . . On April 1, 2005, CBP officers intercepted Laich and detained him upon his arrival on an international flight at the San Francisco International Airport. . . . [A]fter examining his laptop computer, released him when their search revealed no incriminating evidence.

Five days later, ICE agents . . . interviewed Cheri Wilson, manager of the condominium complex where Laich lived in Novi, Michigan. . . . [She said] Laich (1) [had] a desktop computer in his home and (2) spent time alone with a 12 year-old male relative. ICE agents confirmed Laich had internet access at his home. They also learned that in . . . February of 2005, Laich admitted to Novi police he had posed online as a woman who sought the attention of a male to have sex with `her’ fictitious five year old daughter. . . .

On April 10, CBP officers detained Laich and his baggage upon his arrival at the Dallas-Fort Worth International Airport on a flight from Mexico. . . . [When they] did not find any incriminating evidence after searching his luggage, they permitted him to proceed to his connecting flight. When the agents contacted Buloushi to [give him] an updated address for Laich, they . . . were asked to seize the laptop in Laich's possession. . . . Laich was escorted back to the customs inspection area where he was detained for approximately one and one half hours. Although Laich was allowed to leave the detention area after the ninety-minute span, his camera and laptop were permanently retained by the CBP officers. Rather than continue their search of Laich[‘s] computer or camera on-site, the officers [sent] the[m] to Buloushi in Detroit through Federal Express. . . . Buloushi gave the items to Special Agent MacBride. . . . Acting without . . . a search warrant, MacBride searched Laich's laptop, and found approximately five child pornography images in allocated space, one child pornography image in unallocated space, three child pornography images in the recycle bin and two child pornography movies which contained 150 images.

Buloushi prepared a [search warrant] affidavit . . . in which he . . .relied heavily on the evidence discovered during the forensic search of Laich's computer . . . . Relying on . . . the affidavit, the magistrate judge authorized [the warrant,] which was executed on June 15. . . . [A]gents seized . . . (1) a Toshiba laptop computer; (2) a Dell Dimension desktop computer with two hard drives; and (3) electronic storage media devices. A forensic examination of these devices revealed more than 1000 images of child pornography and 22 movies involving the same content.

U.S. v. Laich, supra. Laich was charged with “possessing material which contained images of child pornography and transporting those images in interstate commerce” in violation of 18 U.S. Code §§ 2256 and 2252. U.S. v. Laich, supra. Laich filed a motion to suppress, arguing that “the evidence of alleged child pornography [was] . . . removed from the laptop computer by agents of the federal government in violation of the Fourth Amendment.” U.S. v. Laich, supra.

In ruling on Laich’s motion, the federal judge noted that he seemed to concede that the “initial detention and search of his laptop at the Dallas-Fort Worth Airport falls within the border exception” but argued that when this search “bore no incriminating evidence, there was no legal exigency to support a second detention or the permanent seizure of his laptop.” U.S. v. Laich, supra. The prosecution responded with two arguments, neither of which the judge found persuasive:

First, it highlights Laich's placement on a TECS lookout . . .This factor is unpersuasive, in that the Government has not provided the Court with any insight into the overall nature of the TECS list, the standards, if any, that were used to determine an individual's placement on this list, or the significance, if any, of being designated as one for whom officials should `lookout.’

Second, the Government relies heavily upon the evidence that Buloushi told the Dallas CBP officers that Laich was the subject of a child pornography investigation in Michigan. Generally speaking, such information could arguably qualify as a “specific and articulable fact” that would ordinarily justify an officer in reasonably suspecting that a person had committed a criminal act. However, these facts alone do not support an inference that Laich's suspected criminal activity had any reasonable relationship to his recent border crossing. . . .

Laich's suspected crime was rooted in events that presumably had occurred several months prior to his arrival at the airport. . . . [T]he Government does not argue that his international travels were in furtherance of the alleged offense. . . . Because there is no showing that Laich was reasonably suspected of criminal activity related to his border crossing, the Government cannot justify its seizure of Laich's laptop as part of an extended border search.

U.S. v. Laich, supra. The “extended border search” is a doctrine some federal circuits have adopted; the U.S. Court of Appeals for the Sixth Circuit, which is the circuit whose law is binding on Michigan district courts, adopted the doctrine in U.S. v. McGinnis, 247 Fed. Appx. 589 (2007). The extended border search doctrine, then, could have applied here if the requisite elements existed. In adopting it, the Sixth Circuit noted that in deciding whether the doctrine applied in a given case, a court should pay “special attention to whether the suspected criminal activity relates to a recent border crossing”. U.S. v. McGinnis, supra. In the passage above, the Michigan district court judge applies that standard and finds that the doctrine did not apply on the facts at issue here.

That, though, was not the real issue the judge had to address. Remember, the CBP agents didn’t just take Laich’s laptop away from him and search it while they were detaining him at the DFW airport. They seized his laptop and Fed Ex’d it to Buloushi in Michigan, where another agent searched it for child pornography. U.S. v. Laich, supra. Taking the laptop from Laich and sending it to agents in Michigan was a “seizure” under the 4^th Amendment; as I’ve noted, the 4th Amendment bars "unreasonable" searches and seizures, and a seizure interferes with someone’s possession and use of their property.

If you take my laptop and send it off to agents in another state, you’ve completely deprived me of its possession and use. If that seizure is “reasonable” under the 4^th Amendment, the agents will be able to use what they find (as long as the search of the laptop was “reasonable,” too). If the seizure wasn’t “reasonable” – i.e, if it wasn’t authorized by a warrant or an exception to the warrant requirement – the agents won’t be able to use what they found because the seizure violated the 4^th Amendment.

The judge found that this expanded seizure of Laich’s property wasn’t “reasonable:”

[T]here was no legal basis to support the permanent seizure of Laich's laptop computer. When the CBP officers directed Laich to return to the inspection area, they did not conduct an additional search of his laptop. Rather, they detained him and retained his computer for approximately ninety minutes and, thereafter, mailed the seized property to Buloushi in Detroit. Although the decision by the Supreme Court in United States v. Place, 462 U.S. 696,701-707 (1983) may have provided the officers with the legal authority to briefly seize Laich's laptop to investigate the circumstances which aroused their reasonable suspicion of a criminal wrongdoing, such an investigative detention was not properly limited in its scope here. In the absence of a demonstrated probable cause, the Government's decision to permanently seize Laich's property in Dallas and transport it hundreds of miles to another jurisdiction for further search was unreasonable by Fourth Amendment standards.

U.S. v. Laich, supra. The judge also found that Agent MacBride’s search of the laptop was “unreasonable:”

[T]here has been no evidence from the Government that would justify the subsequent warrantless forensic examination of Laich's computer. Inasmuch as the laptop was Laich's personal property, he had a reasonable expectation of privacy in the computer and its contents. . . . Although there may be situations in which law enforcement officers may seize the personal property of an individual and hold it until a search warrant is obtained, . . . no such effort was undertaken here. Furthermore, the Government has not pointed to any exigency or other circumstance that would justify the Court in making an exception to the general rule that searches must be conducted only with prior approval by a judge or magistrate.

U.S. v. Laich, supra. The judge therefore held that MacBride’s search of Laich’s laptop violated Laich’s rights under the 4^th Amendment “and any evidence which was obtained as a result of this search must be stricken from the search warrant and suppressed from evidence.” U.S. v. Laich, supra. I suspect the two sides are arguing about exactly what this holding means, as to the child pornography seized from Laich’s home, but it seems clear that the child pornography MacBride found on the laptop has to be suppressed and therefore can’t be used to prove the charges against Laich.

It’s also clear that the child pornography found on his laptop couldn’t lawfully have been used to establish probable cause for a warrant to search his home, so I’m guessing that the child pornography they found there can’t be used either. That aspect of the case might implicate the Supreme Court’s decision in Franks v. Delaware, which I discussed in an earlier post.