Practice Advisory: Nijhawan and the $10,000 Loss Requirement for Aggravated Felonies Involving Fraud or Deceit

 

PRACTICE ADVISORY: NIJHAWAN AND THE $10,000 LOSS REQUIREMENT FOR AGGRAVATED FELONIES INVOLVING FRAUD OR DECEIT                              

 

Prepared by: Jon B. Jacobs - Partner, Perkins Coie LLP

Julissa Milligan - Visiting Clinical Assistant Professor, Boston University School of Law

July 2018

 

ISSUE SUMMARY

  • Defeating an “aggravated felony” charge can open new avenues for deportation relief.
  • One type of aggravated felony is a crime involving fraud or deceit in which the loss to the victim was over $10,000.
  • In a plea deal, a defendant may stipulate to a loss that covers both convicted and unconvicted conduct.
  • To find an aggravated felony, the $10,000 loss can only include loss from convicted conduct.

 

PRACTICE SUMMARY: ASK THE RIGHT QUESTIONS

If DHS charged your client with removability because of an aggravated felony in which the crime caused loss to the victim of at least $10,000, ask:

  • Did my client plead guilty? If yes à
  • Review the plea deal. Did my client stipulate to loss? If yes à
  • Look at the stipulation. Is it possible that the stipulation included unconvicted conduct —e.g., actions outside of the counts of conviction? If yes à
  • Check for evidence of actual loss from the convicted conduct. Is there an argument that the loss was actually under $10,000? If yes à
  • Consider arguing that your client did not committed an aggravated felony.

Remember, it is DHS’s burden to show, by clear and convincing evidence, that the loss to the victim was over $10,000!

 

PRACTICE ADVISORY

            Respondents found removable based on a conviction of an “aggravated felony” have very few options to avoid deportation.[1]  They are not eligible for cancellation of removal[2] or asylum.[3]  Given the seriousness of an aggravated felony charge, counsel for respondents need to ensure that all of the elements of such a charge are met before admitting to the allegations.  The INA lists many different kinds of aggravated felonies.[4]  One is “an offense that involves fraud or deceit in which the loss to the victim or victims exceeds $10,000.”[5]

            To determine whether an aggravated felony resulted in a loss of at least $10,000, “the ‘loss’ must ‘be tied to the specific counts covered by the conviction.’” Nijhawan v. Holder, 557 U.S. 29, 42 (2009).  The loss “cannot be based on acquitted or dismissed counts or general conduct.”[6]

            In many criminal cases in which defendants plead guilty, however, they stipulate to losses from all of their alleged fraudulent conduct, including conduct cited in counts of the indictment that are dismissed as part of the plea agreement.  And district courts often issue restitution orders based on those stipulations.  When the amount of restitution is based on a plea agreement between the government and defendant, it need not be limited to the actual loss alleged in the specific counts to which the defendant is pleading guilty.[7]  This can create a disparity between the amount of loss stipulated by the defendant for purposes of his criminal case and the amount of loss that is relevant for purposes of his immigration case.

            Counsel representing respondents charged with an aggravated felony involving fraud or deceit need to be wary of this possible disparity.  Do not take restitution orders of more than $10,000 at face value.  Do not assume that the loss for purposes of removal proceedings is greater than $10,000 even if the respondent has stipulated to losses greater than that amount.  The Department of Homeland Security must still prove, by clear and convincing evidence, that the actual losses stemming from the specific counts to which respondent pled guilty exceeded $10,000.

            In 2017, we successfully litigated this issue in Immigration Court in Arlington, Virginia.  When we were retained in August, our client had just been found removable by an Immigration Judge for committing an aggravated felony.  In 2016, he pled guilty to two counts of aiding and assisting in the preparation of false tax returns in violation of 26 U.S.C. § 7206(2).  The other six counts of his indictment, alleging additional instances of the same crime, were dismissed.  In his plea agreement, our client stipulated that the tax loss to the U.S. Treasury from his actions was at least $64,240.  The district court accepted his plea, sentenced him to six months in jail, and ordered restitution of $64,240.  DHS subsequently charged him with an aggravated felony.  The Immigration Judge found that the tax loss exceeded $10,000 based solely on the district court’s restitution order.

            A close review of his file, however, showed that the $64,240 restitution amount could not have been based just on the two counts to which he had pled guilty.  Those two counts charged him with unlawfully claiming $35,465 in deductions for certain clients of his tax preparation business.  It is difficult to imagine how $35,465 in improper deductions could result in a tax loss of $64,240.  Additional inconsistencies between his indictment, the plea agreement, and the stipulated loss amount led us to conclude that the restitution order was based on all eight counts of his indictment, not just the two to which he had pled guilty.

            We filed a motion to amend our client’s pleadings, DHS filed a brief setting forth its position why the restitution order should control, and we filed  a reply.  Both sides agreed that the issue was whether unconvicted fraudulent conduct, used in the calculation of restitution and specifically admitted to in the plea agreement, can be used in the calculation of loss amounts for removal proceedings.  Both sides also agreed that the Fourth Circuit had not yet addressed this issue.

            In support of our position, we cited various authority.  We argued that the plain language of the statute is clear: unconvicted fraudulent conduct cannot be counted for purposes of removability.  Removal must be predicated on a convicted offense resulting in a loss greater than $10,000.[8]  We cited the Supreme Court’s admonition that the loss “must be tied to the specific

counts covered by the conviction.”  Nijhawan, 557 U.S. at 42 (internal quotation mark omitted).

Although we conceded that the Court in that case ultimately upheld the immigration judge’s reliance on the defendant’s stipulation and the restitution order in that case, it did so because there was an “absence of any conflicting evidence[.]”  Id. at 43.  In our case, there was conflicting evidence based on the specific deductions alleged in the indictment.[9]

            We also cited the opinions of appellate courts that faced these same facts—a loss from the convicted counts of less than $10,000, and an alien’s stipulation that the loss from all of the charges was greater than $10,000 (or a restitution order to that effect)—and held that that the alien’s conviction was not an aggravated felony:

  • Singh v. Attorney General of the United States, 677 F.3d 503, 507, 512, 515 (3d Cir. 2012) (rejecting argument that restitution order of $54,418.08 was clear and convincing evidence of actual loss; “[u]nder Nijhawan, a restitution order must be assessed in the context of ‘conflicting evidence.’”);
  • Alaka v. Attorney General of the United States, 456 F.3d 88, 92, 106 (3d Cir. 2006) (Where loss from convicted count was $4,716.68 and sentencing court found total loss of $47,969, it “was legal error for the IJ to consider the amount of intended loss for all of the charges rather than the single count for which she was convicted.”);
  • Knutsen v. Gonzales, 429 F.3d 733, 735, 739-40 (7th Cir. 2005) (Where loss from convicted count was $7,350 and defendant stipulated that the total loss from the offense of conviction and relevant conduct exceeded $20,000, unconvicted relevant conduct cannot be used to calculate loss.); and
  • Chang v. INS, 307 F.3d 1185, 1187-88, 1190 (9th Cir. 2002) (Where loss from single count of conviction was $605.30 and restitution amount was $32,628.67, there was no aggravated felony; “[t]o adopt the government's approach would divorce the $10,000 loss requirement from the conviction requirement[.]”).

            DHS relied principally on two other cases.  The first, Iecho v. Attorney General, 317 Fed. App’x. 222 (3d Cir. 2009), was an unpublished Third Circuit opinion decided three months before Nijhawan.  In that case, the alien was charged with three counts of trafficking in unauthorized access devices (specifically, stolen credit card numbers).  317 Fed. App’x. at 223.  He pled guilty to one count, and the other two counts were dismissed.  Id.  He admitted in his plea agreement that “the appropriate loss amount for each of the 557 stolen credit cards involved was $100 for a total of $55,700,” and the Third Circuit relied on that number to find he had been convicted of an aggravated felony.  Id.  In our case, DHS argued that Iecho supported its position because the $55,700 number was the total loss for all three counts, not the loss for the single count of conviction.  But there is no support in the Third Circuit’s opinion for that assumption.  It does not specify whether the $55,700 was the loss for just the one count to which the alien pled guilty or for all of the counts.  More than likely, it was limited to just the single count of conviction because the Third Circuit reaffirmed its earlier holding in Alaka that any “loss tied to the dismissed charges” could not be included in the calculation.  317 Fed. App’x. at 223.

 

            The second case DHS relied on was Khalayleh v. INS, 287 F.3d 978 (10th Cir. 2002), decided seven years before Nijhawan.  DHS used this case to argue that even if the tax loss from the two counts of conviction was less than $10,000, the losses from the other six dismissed counts should still be counted because our client was convicted of a “single scheme” of tax fraud.  In Khalayleh, the alien was indicted on four counts of bank fraud.  He pled guilty only to Count Two, which “alleged a scheme to defraud that encompassed a number of checks,” and listed one check as an example.  287 F.3d at 980.  The sample check identified in that count was in an amount of $9,308.  The sentencing court ordered restitution of $24,324.03.  The Tenth Circuit rejected the alien’s argument that the loss for the one count of conviction was limited to $9,308 because there was “no ambiguity regarding the scope of the offense to which [he had] pleaded,” which reached beyond the sample check.  Id.  For that reason, the “offense of conviction was the entire scheme charged in Count Two of the indictment.”  Id.  In our case, we argued that this case did not support DHS’s argument.  The Tenth Circuit did not conclude that the losses from all four counts of the indictment should be counted; instead, it held that the losses just from the single count to which the alien had pled guilty (which encompassed more checks than just the one $9,308 check) should be included.  We also cited two cases questioning the Tenth Circuit’s “single scheme” approach.[10]

 

            After briefing and oral argument, the Immigration Judge dismissed the aggravated felony charge.  The IJ acknowledged the conflicting record evidence on the amount of loss and concluded that the $64,240 restitution amount was very likely inclusive of unconvicted conduct.  Because Nijhawan therefore precluded reliance on the restitution amount alone, and DHS had not offered any other evidence of the loss amount, the IJ found that DHS had not carried its burden on proving loss.  It also stated that it was not bound by the Third Circuit’s opinion in Iecho and declined to follow the Tenth Circuit’s reasoning in Khalayleh because that opinion was issued prior to the Supreme Court’s guidance in Nijhawan.

 

            After that charge was dismissed, DHS recharged our client with being removable for committing two or more crimes involving moral turpitude not arising out of a single scheme.      8 U.S.C. § 1227(a)(2)(A)(ii).  But because he no longer was deemed to have committed an aggravated felony, he was eligible to apply for cancellation of removal under INA 240A(1)(a).   8 U.S.C. § 1229b(a).  He was a particularly suitable candidate for cancellation, having lived in the United States for 35 years and having come to this country when he was only 10 years old.  In January 2018, he was granted cancellation and was able to find a place to live and a job so he could begin to pay off his restitution obligation.

 

[1] Section 237(a)(2)(A)(iii) of the Immigration and Nationality Act provides that “[a]ny alien who is convicted of an aggravated felony at any time after admission is deportable.”  8 U.S.C. § 1227 (a)(2)(A)(iii).

 

[2] 8 U.S.C. § 1229b(a)(3) (aliens convicted of any aggravated felony not eligible for cancellation of removal).

 

[3] 8 U.S.C.§ 1158(b)(2)(A)(ii)(alien not eligible for asylum if convicted of  a “particularly serious crime”), § 1158 (b)(2)(B)(i)(conviction of aggravated felony is considered to be conviction of particularly serious crime).

 

[4] 8 U.S.C. § 1101(a)(43).

 

[5] 8 U.S.C. § 1101(a)(43)(M)(i).

 

[6] Id. (citing Alaka v. Attorney General, 456 F.3d 88, 107 (3d Cir. 2006)); see also Knutsen v. Gonzales, 429 F.3d 733, 739-740 (7th Cir. 2005).

 

[7] 18 U.S.C. § 3663(a)(3)(A “court may also order restitution in any criminal case to the extent agreed to by the parties in a plea agreement”); United States v. Broughton-Jones, 71 F.3d 1143, 1147 (4th Cir. 1995) (Where “parties agreed to an amount of restitution in a plea agreement[,] such agreements may authorize restitution in an amount greater than the loss attributable to the offense of conviction.”).

[8] 8 U.S.C. §§ 1227(a)(2)(A)(iii), 1101(a)(43)(M)(i) (emphasis added).

 

[9] We also offered an affidavit from our client’s criminal defense lawyer, who had access to the materials that the IRS used to calculate tax loss for each count of the indictment.  She determined that the loss from the two counts of conviction was less than $4,000.  Because Nijhawan’s circumstance-specific approach allows courts to look beyond the records of conviction from the district court, the Immigration Judge acknowledged the affidavit and relied on it, among other things, to conclude that DHS had not met its burden of proving tax loss exceeding $10,000.

[10] In Knutsen, the Seventh Circuit distinguished the facts of its case but did so only after noting that “[e]ven if we agreed with the Tenth Circuit's analysis that the calculation of a total loss amount could include losses from unconvicted counts that are encompassed by an overall fraudulent scheme, the IJ’s decision could not stand . . . .” 429 F.3d at 738 (emphasis added).  And in Doe v. Attorney General, 659 F.3d 266 (3d Cir. 2011), the Third Circuit observed that the “case does not require us to consider whether Khalayleh’s approach is the law of this circuit.”  Id. at 276.

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