North Carolina Lawyers Weekly
U.S. v. White (Lawyers Weekly No. 001-067-17, 19 pp.) (Duncan, J.) No. 16-4070, March 9, 2017; USDC at Greenbelt, Md. (Grimm, J.) 4th Cir.
Holding: The trial testimony of a client who was represented by defendant, a disbarred lawyer, in managing the affairs of a ward permanently disabled by a stroke, did not support defendant’s demand for a Franks hearing to challenge a search warrant; the 4th Circuit affirms the former lawyer’s fraud, money laundering and aggravated identity theft convictions and her 132-month sentence.
No Need for Hearing
Defendant argues she was entitled to a Franks hearing because the client’s testimony called into question the validity of the search warrant. In Franks v. Delaware, 438 U.S. 154 (1978), the Supreme Court carved out a narrow exception to the general rule prohibiting a defendant from attacking a facially valid affidavit. To obtain a Franks hearing, a defendant must make a substantial preliminary showing that the affiant made a false statement, knowingly and intentionally, or with reckless disregard for the truth that was necessary to the finding of probable cause.
Defendant’s Franks claim fails on the merits because she did not make a substantial showing that the agent knowingly, intentionally or with reckless disregard made a false statement in the affidavit. The affidavit stated that the client had been to defendant’s home, “discussed this case with her there and knows her to maintain a home office at that location.”
On cross-examination, the client indicated she had been to defendant’s home on social occasions but had not had formal business meetings there. Based on these answers, defendant immediately requested a Franks hearing. On redirect, the client clarified that she had not been inside defendant’s home office but may have discussed the ward’s healthcare “in passing” at defendant’s home.
The district court did not err in finding that defendant failed to make the requisite showing for a Franks hearing. First, defendant cannot point to a false statement. The client’s acknowledgement on redirect that she had conversations regarding the ward with defendant at defendant’s home – no matter how fleeting – comport with the agent’s statements in the affidavit. Defendant also cannot establish the requisite scienter under Franks, as defendant did not show that the agent intentionally or recklessly included a false statement in the affidavit.
Sentence Challenge
Defendant argues the district court erred in applying a two-level enhancement for misrepresenting a government agency – here, the U.S. Treasury Department and the State of Maryland – and a two-level enhancement for sophisticated means. She also contends the court should have reduced her sentence based on her mental health diagnosis.
The district court did not err in imposing the 132-month sentence on defendant. Defendant solicited tax payments through fraudulent IRS notices and thereby misrepresented a government agency. The district court also did not err in finding that either defendant (in a disguised voice) or someone at her direction made a phone call purporting to represent the IRS and the “State of Maryland Department of Revenue,” informing the client that she, as the now-deceased ward’s personal representative, was responsible for paying taxes. The return phone number on the voicemail was a number defendant activated shortly after beginning the scheme, appeared on the fraudulent tax notices and was connected to numerous documents in defendant’s home.
The “sophisticated means” enhancement was proper because defendant took advantage of her relationship with a church member to scam approximately $800,000 from the client and the client’s incapacitated and deceased family members. In the multi-year scheme, defendant impersonated the ward to obtain a duplicate license and counterfeit university ID, created a fictitious entity and opened bank accounts and a P.O. box for the entity in the ward’s name and created fraudulent IRS notices to receive tax payments.
Finally, the district court credited one expert over another in rejecting the view that defendant’s mental health diagnosis rendered her incapable of understanding the wrongfulness of her actions.
