CRIMES OF MORAL TURPITUDE " FRAUD OFFENSES " DEFINITION AGGRAVATED FELONIES " FRAUD OFFENSES " DEFINITION
The Supreme Court has held that "[T]he well-settled meaning of 'fraud' require[s] a misrepresentation or concealment of material fact" and "materiality of falsehood is an element of the federal mail fraud, wire fraud, and bank fraud statutes." Neder v. United States, 527 U.S. 1, 23, 25 (1999). Since Neder, the federal circuits have uniformly ruled that schemes criminalized by the mail or wire fraud statutes must involve material false representations, material omissions of fact, or both. Federal prosecutors in the Ninth Circuit recently have advanced the proposition that the federal wire and mail fraud statutes criminalize two different types of schemes: (1) those involving the common law element of material false statements and omissions; and (2) those covered by the term "scheme to defraud," as used in those fraud statutes, which omits this common law requirement and requires only an intent to deceive; nothing deceptive need actually ever be said or done. In a recent case in the Central District of California, the defendant was charged with obtaining funds by means of fraudulent representations and omissions, an allegation necessary to adequately state a fraud offense under Neder. But at trial the government argued that the wire fraud statute reaches "schemes" involving an intent to deceive or cheat, even absent the making of a material falsehood or omission. Over Namvar's objection, the district court took the unprecedented step of redacting from the Circuit's model instruction the element of a material misrepresentation and/or omission of fact, and Namvar was convicted. In an unpublished opinion, a three judge panel affirmed. In fact, the term "scheme to defraud," has always been interpreted to incorporate the core element of fraud at common law: "everything designed to defraud by representations as to the past or present, or suggestion, or promises as to the future." McNally v. United States, Id. 483 U.S. 350, 358 (1987) (quoting Durland v. United States, 161 U.S. 306, 313 (1896)) (emphasis added). Neder rejected the argument that the federal fraud statutes can be read to require no more than an intent to deceive. 527 U.S. at 23-24 (emphasis in original) That a panel decision could approve a sea change in the law of fraud in an unpublished opinion is deeply disturbing, not least of all because unpublished opinions rarely are reviewed by the Circuit sitting en banc. A group of ex-federal prosecutors, however, has taken the highly unusual step of filing an amicus in support of Namvar's petition for rehearing en banc. The amicus support provides hope that the Namvar opinion will receive reconsideration. If it does not, more fraud-less fraud prosecutions can be expected in the Ninth Circuit, and defense counsel will need to be prepared to counter them on the basis of Neder and McNally. Thanks to Dennis Riordan.

BIA

AGGRAVATED FELONY " DRUG TRAFFICKING OFFENSE " DISTRIBUTION OF SMALL AMOUNT OF MARIJUANA
Matter of Castro-Rodriguez, 25 I&N Dec. 698 (BIA 2012) (remanding case to IJ to allow respondent to present factual evidence that Virginia conviction of possession with the intent to give or distribute less than one-half ounce of marijuana, in violation of Va. Rev. Stat. 18.2-248.1(a)(1), involved only gratuitous distribution of a small amount of marijuana); following Matter of Aruna, 24 I&N Dec. 452 (BIA 2008) (the federal felony conspiracy to distribute a controlled substance offense, 21 U.S.C. 841(a)(1), (b)(1)(D), allows for the consideration of evidence outside the record of conviction for the purpose of reducing the felony offense to a misdemeanor); citing United States v. Hamlin, 319 F.3d 666, 670-71 (4th Cir. 2003). NOTE: The BIA relied upon Nijhawan v. Holder, 557 U.S. 29 (2009), to find the circumstance-specific approach is appropriate to determine whether a conviction of possession of marijuana with intent to distribute involved a small amount of marijuana and no remuneration. The BIA stated that the less than 30 grams of marijuana exception, may, in general, serve as a useful guidepost in determining whether an amount is small. Matter of Castro Rodriguez, 25 I&N Dec. at 703.

AGGRAVATED FELONY " DRUG TRAFFICKING " DELIVERY OF SIMULATED CONTROLLED SUBSTANCE
Matter of Sanchez-Cornejo, 25 I. & N. Dec. 273 (BIA 2010) (Texas conviction of delivery of a simulated controlled substance, as defined by 482.001(4) of the Texas Health and Safety Code, is not an aggravated felony drug trafficking offense because federal law does not punish distribution of a non-controlled substance in place of a real controlled substance; the violation is, however, a controlled substances offense for purposes of triggering removability under INA 237(a)(2)(B)).

AGGRAVATED FELONY - DRUG TRAFFICKING - MONEY LAUNDERING UNDER $10,000 AS A DRUG TRAFFICKING AGGRAVATED FELONY
A conviction of money laundering, under 18 U.S.C. 1956, 1957, should not be considered a drug trafficking aggravated felony. It is certainly not a drug trafficking crime, under the second theory, since it cannot be considered a "felony punishable under the Controlled Substances Act (21 U.S.C. 801 et seq.), the Controlled Substances Import and Export Act (21 U.S.C. 951 et seq.), or Chapter 705 of Title 46." (18 U.S.C. 924(c)(2), referred to in INA 101(a)(43)(B), 8 U.S.C. 1101(a)(43)(B). As the Ninth Circuit held: "Lara-Chacon's conviction under the Arizona racketeering statute is not a 'drug trafficking crime' because his crime is not 'punishable under the Controlled Substances Act.'" Lara-Chacon v. Ashcroft, 345 F.3d 1148, 1152 (9th Cir. 2003).

The Ninth Circuit continued:

In assessing whether a crime is a drug trafficking crime, we consider categorically whether the "full range of conduct" encompassed by the statute of conviction is punishable by the Controlled Substances Act. United States v. Rivera-Sanchez, 247 F.3d 905, 907-09 (9th Cir.2001) (en banc). The money laundering statute under which Lara-Chacon was convicted penalizes many different types of racketeering that are not punishable by the Controlled Substances Act, which makes it illegal to "use or invest, directly or indirectly, any part of such income[derived from committing any prohibited drug offense punishable by more than one year], or the proceeds of such income." See 21 U.S.C. 854. The Arizona statute under which Lara Chacon was convicted defines money laundering as follows: "A person is guilty of money laundering in the second degree who: 1. Acquires or maintains an interest in, transacts, transfers, transports, receives or conceals the existence or nature of racketeering proceeds knowing or having reason to know that they are the proceeds of an offense." Ariz.Rev.Stat. 13-2317(A)(1) (West 1999). In addition to acts for financial gain "involving ... prohibited drugs, marijuana, or other prohibited*1153 chemicals or substances," racketeering under Arizona law includes acts involving theft, asserting false claims, obscenity, a scheme or artifice to defraud, prostitution, terrorism, drug crimes punishable for less than one year, and counterfeiting, among others. Ariz.Rev.Stat. 13-2301(D)(4) (West 1999). Thus, the "full range of conduct" encompassed by the Arizona statute is not punishable by the Controlled Substances Act, which, for example, does not address terrorism, prostitution, theft, drug crimes punishable for less than a year, or obscenity. We therefore turn to the modified categorical approach.

(Id. at 1152-1153.)

A money-laundering conviction could therefore only be a drug trafficking aggravated felony if it was included within the plain language of the definition: "illicit trafficking in a controlled substance . . . ." (Ibid.) Standing alone, a financial transaction involving drug-trafficking proceeds does not appear to fall within this definition, since no federally defined controlled substances are exchanged in the money laundering transaction itself. In Lara-Chacon v. Ashcroft, 345 F.3d 1148, 1154 (9th Cir. 2003), a conviction under a state money-laundering statute was found not to be a drug-trafficking aggravated felony, but in that case the government only had a PSR which was not admissible under the modified categorical approach. Logically, financial transactions involving the proceeds of a sale of drugs are distinguishable from the drug transaction itself, and so should not fall under the "illicit trafficking" portion of the drug trafficking aggravated felony definition.

Third Circuit

AGGRAVATED FELONY " DRUG TRAFFICKING " FEDERAL FOOD, DRUG, AND COSMETIC ACT VIOLATIONS
Borrome v. Attorney General of the United States, 687 F.3d 150 (3d Cir. Jul. 18, 2012) (federal conviction for unauthorized wholesale distribution in interstate commerce of prescription drugs, in violation of 21 U.S.C. 331(t), 353(e), is not a drug trafficking aggravated felony).

Fourth Circuit

AGGRAVATED FELONY - DRUG TRAFFICKING
United States v. Maroquin-Bran, 587 F.3d 214 (4th Cir. Nov. 9, 2009) (California conviction for violation of Health & Safety Code 11360(a) is not necessary a "drug trafficking offense" for illegal re-entry sentencing purposes, since the statute of conviction is divisible and includes transportation for personal use); accord, United States v. Medina-Almaguer, 559 F.3d 420, 422-23 (6th Cir. 2009); United States v. Lopez-Salas, 513 F.3d 174, 177-78, 180 (5th Cir. 2008) (per curiam); United States v. Garcia-Medina, 497 F.3d 875, 877 (8th Cir. 2007); United States v. Almazan-Becerra, 482 F.3d 1085, 1089-90 (9th Cir. 2007); cf. United States v. Herrera-Roldan, 414 F.3d 1238, 1240 (10th Cir. 2005); United States v. Madera-Madera, 333 F.3d 1228, 1231-33 (11th Cir. 2003).