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The Department of Justice (DOJ) recently announced the seizure of virtual currency valued at approximately $112 million, linked to a number of cryptocurrency investment scams. DOJ Press Release

According to the DOJ press release, the seized virtual currency accounts were allegedly used to launder proceeds from various cryptocurrency confidence scams. In these schemes, fraudsters cultivated long-term relationships with their victims, usually through online platforms, and enticed them to invest in fraudulent cryptocurrency trading platforms. The victims' funds were then funneled to cryptocurrency addresses and accounts controlled by the scammers and their co-conspirators. Crypto Criminal Defense Lawyer 

The scams often involved "pig butchering" or "Sha Zhu Pan," a Chinese phrase that loosely translates to the same. Scammers targeted victims through social networking platforms, online communications, dating websites, and even misdialed phone calls and text messages. After gaining the victims' trust, scammers would introduce the idea of trading in cryptocurrency and direct them to fraudulent investment platforms.

Victims would be encouraged to make an initial investment, which would appear to show substantial gains. In some cases, victims were even allowed to withdraw some of these gains to further engender trust in the scheme. However, after making a large investment, victims would find themselves unable to withdraw their funds.

The DOJ's seizure of virtual currency linked to these scams further reaffirms the government's focussed attention on investigating and prosecuting cryptocurrency fraud. Law enforcement agencies are using various tools to trace and seize illicit funds, including tracking transactions on the blockchain and dismantling online infrastructure used by scammers.

In 2022, investment fraud caused the highest losses of any scam reported by the public to the FBI’s Internet Crimes Complaint Center (IC3), totaling $3.31 billion. Frauds involving cryptocurrency, including pig butchering, represented the majority of these scams, increasing a staggering 183% from 2021 to $2.57 billion in reported losses last year. DOJ Press Release 

This blog post was prepared with the assistance of ChatGPT-4 AI. Nothing in this post should be considered legal advice or the creation of an attorney-client relationship. This blog is strictly for informational purposes only.

According to a DOJ Press Release, Rashawn Russell former investment banker from Brooklyn, has been arrested on charges related to operating a cryptocurrency investment fraud scheme. Russell allegedly defrauded investors by making false promises of high returns from their investments in cryptocurrencies, misappropriating funds for personal use, gambling, and repaying other investors. The indictment also states that Russell failed to repay investors' principal investments or provide the promised returns, and falsely claimed to have wired money to investors who requested repayment. DOJ Press Release 

Russell was scheduled to appear in Brooklyn federal court on April 11 for arraignment on an indictment charging him with perpetrating a cryptocurrency investment fraud scheme. Crypto Criminal Defense Lawyer Blog 

“As alleged, Russell turned the demand for cryptocurrency investments into a scheme to defraud numerous investors in order to fund his lifestyle,” stated United States Attorney Peace.  “This Office will continue to aggressively pursue fraudsters perpetrating these schemes against investors in the digital asset markets.”   

As alleged in court documents, Russell engaged in a scheme to defraud multiple investors by falsely promising that their money would be used for cryptocurrency investments that would generate large—and sometimes “guaranteed”—returns.  In truth, much of the investors’ money was misappropriated by Russell and used for his personal benefit, to gamble, and to repay other investors.  Russell formerly worked as an investment banker and was a registered broker with the Financial Industry Regulatory Authority.

As part of the scheme, Russell lied to investors about the status of their investments and fabricated multiple documents that he sent to investors.  As alleged, Russell sent one investor an altered image of a bank balance displayed on a bank website that purported to show Russell’s substantial liquidity.  When another investor sought to recoup their investment, Russell never sent the money and instead sent the investor a fabricated bank wire transfer confirmation that purported to show the return of the investor’s money.  DOJ Press Release 

In a parallel civil enforcement action, the CFTC charged Russell fraud and misappropriation in a digital asset trading scheme. The CFTC alleges Russell fraudulently solicited retail investors for a digital asset trading fund and misappropriated at least $1 million in investor assets. CFTC Press Release 

This blog post was prepared with the assistance of ChatGPT-4 AI. Nothing in this post should be considered legal advice or the creation of an attorney-client relationship. This blog is strictly for informational purposes only.

The issue of consent is a critical aspect of search and seizure law, as it can significantly impact the admissibility of evidence in criminal cases. According to the Texas Court of Criminal Appeals holding in Meekins v. State, 340 S.W.3d 454, 458-60, the validity of consent to search is a question of fact, determined from all the circumstances. Consent can be communicated in various ways, such as words, actions, or circumstantial evidence showing implied consent. However, the Fourth and Fourteenth Amendments require that consent is not coerced, either explicitly or implicitly. Meekins v. State, 340 S.W.3d 454,457 (Tex. Crim. App. 2011).

The voluntariness of consent is also a question of fact, and it is determined by analyzing all the circumstances of a particular situation. The trial judge must conduct a careful sifting and balancing of the unique facts and circumstances of each case in deciding whether a particular consent search was voluntary or coerced. Tyler Criminal Defnese Lawyer Carlo D'Angelo Blog 

The standard for measuring the scope of consent under the Fourth Amendment is "objective" reasonableness, as explained by the Supreme Court. The courts must review the totality of the circumstances of a particular police-citizen interaction from the point of view of the objectively reasonable person, without considering the subjective thoughts or intents of either the officer or the citizen. Florida v. Jimeno500 U.S. 248, 250-51111 S.Ct. 1801114 L.Ed.2d 297 (1991).

Whether consent was voluntary is a factual question and must be analyzed based on the totality of the circumstances. Here as some factors courts consider in determining whether voluntary was consent:

  1. Physical mistreatment

  2. Use of violence

  3. Threats or threats of violence

  4. Promises or inducements

  5. Deception or trickery

  6. The physical and mental condition and capacity of the defendant 

United States v. Pena143 F.3d 1363, 1367 (10th Cir. 1998). The Tenth Circuit explained,

In determining whether a consent to search was free from coercion, a court should consider, inter alia, physical mistreatment, use of violence, threats, threats of violence, promises or inducements, deception or trickery, and the physical and mental condition and capacity of the defendant within the totality of the circumstances. An officer's request for consent to search docs not taint an otherwise consensual encounter as long as the police do not convey a message that compliance with their request is required.

As cited in Meekins v. State, 340 S.W.3d 454, 460 n.26 (Tex. Crim. App. 2011).

This blog post was prepared with the assistance of ChatGPT-4 AI. Nothing in this post should be considered legal advice or the creation of an attorney-client relationship. This blog is strictly for informational purposes only.

The U.S. Department of the Treasury has released the world's first DeFi Illicit Finance Risk Assessment, examining risks associated with decentralized finance (DeFi) services. DeFi refers to virtual asset protocols and services enabling automated peer-to-peer transactions, typically through smart contracts on blockchain technology. Crypto Criminal Defense Lawyer Blog 

Criminals, scammers, and North Korean cyber actors are exploiting DeFi services to launder illicit funds, taking advantage of vulnerabilities such as non-compliance with anti-money laundering (AML) and countering the financing of terrorism (CFT) regulations. Treasury Press Release 

According to the Treasury Report, the primary vulnerability lies in non-compliance with AML/CFT and sanctions obligations, but other weaknesses include weak or nonexistent AML/CFT controls in other jurisdictions and poor cybersecurity controls. The Report recommends strengthening U.S. AML/CFT regulatory supervision, providing further guidance for the private sector, and assessing enhancements to address regulatory gaps. 

The Treasury Report notes that the vulnerabilities in DeFi services exploited by “nation-state cyber groups” pose a threat to United States national security: 

Cyber-Related Vulnerabilities

DeFi services are often particularly vulnerable to large-scale thefts due to a combination of factors, including aggregation of large amounts of funds, the lack of requirements for cybersecurity and audits in the DeFi space, concentrated administrator rights, and the availability of open-source code for DeFi services’ smart contracts. As noted above, these vulnerabilities can be exploited by hackers through security breaches, code exploits, and flash loan attacks. The documented efforts of nation-state cyber groups or other illicit actors to steal or fraudulently acquire money, including

“The documented efforts of nation-state cyber groups or other illicit actors to steal or fraudulently acquire money, including virtual assets, present a national security concern.”

virtual assets, present a national security concern. The noted cybersecurity gaps of DeFi services leave their operations vulnerable to theft and fraud, which also present risks for consumers and the virtual asset industry. Treasury Report 

The U.S. Treasury's DeFi Illicit Finance Risk Assessment 39-page report outlines the abuse of decentralized finance (DeFi) services by illicit actors and identifies vulnerabilities in these services. The assessment report finds that ransomware cybercriminals, thieves, scammers, and North Korean cyber actors are exploiting DeFi services to transfer and launder illicit proceeds, particularly targeting services not compliant with existing anti-money laundering (AML) and countering the financing of terrorism (CFT) obligations.

The Bank Secrecy Act (BSA) imposes obligations on financial institutions, including DeFi services, to help detect and prevent money laundering. However, many existing DeFi services fail to comply with AML/CFT obligations, often due to a lack of understanding among industry participants. 

This assessment was prompted by the findings of the 2022 National Risk Assessments (NRAs) and rising global concerns related to DeFi risks. It acknowledges that most illicit financial activities still occur through traditional methods outside the virtual asset ecosystem.

The assessment explores the market structure of the DeFi ecosystem and how threat actors misuse DeFi services for illicit activities like ransomware attacks, theft, fraud, scams, drug trafficking, and proliferation finance. It also examines vulnerabilities such as non-compliance with AML/CFT and sanctions obligations, disintermediation, and inadequate implementation of international AML/CFT standards in foreign countries. 

The report includes recommendations for the U.S. government to mitigate illicit finance risks associated with DeFi services and poses questions for further consideration. The assessment report recommends strengthening U.S. AML/CFT supervision and enforcement, engaging with the industry to clarify applicable laws and regulations, and closing any identified regulatory gaps in the BSA to ensure all DeFi services are covered.

This blog post was prepared with the assistance of ChatGPT-4 AI. Nothing in this post should be considered legal advice or the creation of an attorney-client relationship. This blog is strictly for informational purposes only.

Blockchain and cryptocurrency technologies offer consumers a lower-cost alternative to institutional banks for moving money instantly across the globe. Money transmitting businesses that provide such services to consumers are required to register with FinCEN “to help mitigate the risks of criminal abuse of MSBs for money laundering and terrorist financing.” FinCEN.gov 

Unlike other financial institutions regulated by FinCEN that are subject to ongoing prudential regulation and supervision for safety and soundness purposes - such as banks, securities broker-dealers, and insurance companies - MSBs become subject to FinCEN regulations not because of their license or charter, but rather based on the activities they conduct. While generally understood today, in addition to the fact that MSBs have increasingly become subject to regulation at the State level, when FinCEN first issued its regulations with respect to MSBs, there was a need to identify and educate many of the entities that would be subject to the regulatory requirements. FinCEN.gov 

In addition to possible potential civil liability, MSB businesses that fail to register with FinCEN face also risk criminal prosecution under 18 USC 1960. Crypto Criminal Defense Lawyer Blog 

Civil and Criminal Penalties for Operating an Unregistered Money Transmitting Business

Any person who fails to comply with any requirement of 31 U.S.C. 5330 or this section [31 CFR 103.41] shall be liable for a civil penalty of $5000 for each violation.BSA registration requirements, in an amount up to $5,000 for each day a registration violation continues.
[31 U.S.C. § 5330(e) and 31 C.F.R. § 103.41(e)]

Whoever knowingly conducts, controls, manages, supervises, directs, or owns all or part of an unlicensed money transmitting business, shall be fined in accordance with this title or imprisoned not more than 5 years, or both. 
[18 U.S.C § 1960(a)]

A money transmitting business which affects interstate or foreign commerce in any manner or degree and fails to comply with the money transmitting business registration requirements under section 5330 of title 31, United States Code, or regulations prescribed under such section, shall be fined in accordance with this title or imprisoned not more than 5 years, or both.
[18 U.S.C § 1960(b)(1)(B)] FinCEN.gov 

Under 18 USC 1960, it is a federal crime to operate an unlicensed money transmitting business (MTB) when certain conditions are met. An MTB is considered unlicensed if it:

  1. Operates without an appropriate state money transmitting license where such operation is punishable as a misdemeanor or a felony under state law, regardless of whether the defendant knew that the operation was required to be licensed or that the operation was punishable (18 USC § 1960(A)).

  2. Fails to comply with the money transmitting business registration requirements under section 5330 of title 31, United States Code, or regulations prescribed under such section (18 USC § 1960(B)).

  3. Involves the transportation or transmission of funds that the defendant knows were derived from a criminal offense or are intended to be used to promote or support unlawful activity (18 USC § 1960(C)).

The rise of cryptocurrencies has led to an increase in MTBs that use these digital currencies to facilitate transactions. Some MTBs may attempt to evade regulations by operating without proper licensing or registration, thereby violating 18 USC 1960. As cryptocurrencies can provide anonymity and are easily transferred across borders, they are increasingly used to facilitate illicit activities, including the operation of unlicensed MTBs to facilitate crimes such as money laundering. 

In United States v. Lord, the Fifth Circuit reiterated that MTBs are subject to 18 USC § 1960, which criminalizes the failure to obtain a state license, when required, and to comply with federal registration requirements. The court outlined the three conditions that render an MTB unlicensed, as discussed above (18 USC § 1960(A)-(C)). Furthermore, the court noted that other regulations require MTBs to register with the Financial Crimes Enforcement Network (FinCEN) within 180 days of the date the business is established (31 CFR § 1022.380(b)(3)).  United States v. Lord, 915 F.3d 1009, 1013 (5th Cir. 2019). 

In order to avoid violating 18 USC 1960, money transmitting businesses (MTBs) must comply with registration requirements outlined in 31 U.S.C. § 5330. By adhering to these requirements, MTBs can ensure they operate within the boundaries of the law and avoid the penalties associated with operating an unlicensed MTB. 

This blog post was prepared with the assistance of ChatGPT-4 AI. Nothing in this post should be considered legal advice or the creation of an attorney-client relationship. This blog is strictly for informational purposes only.

Section 922(g) of Title 18 governs offenses for unlawful possession of a firearm and ammunition by a convicted felon. Tyler Criminal Defense Lawyer Blog  Before a defendant can be found guilty of an offense under Section 922(g), the government must prove three distinct elements: 

  1. The defendant was a convicted felon;

  2. The defendant was in knowing possession of a firearm; and

  3. The firearm was in or affecting interstate commerce. 

The Supreme Court's recent holding in Rehaif v. United States further requires the government to also prove that that the defendant knew he possessed a firearm and that he knew he belonged to the relevant category of persons barred from possessing a firearm.

We conclude that in a prosecution under 18 U.S.C. § 922(g) and § 924(a)(2), the Government must prove both that the defendant knew he possessed a firearm and that he knew he belonged to the relevant category of persons barred from possessing a firearm. We express no view, however, about what precisely the Government must prove to establish a defendant's knowledge of status in respect to other § 922(g)provisions not at issue here.

Rehaif v. United States, 139 S. Ct. 2191, 2200 (2019).

In the recent case of United States v. Feliciano, No. 22-11390, at *4 (11th Cir. Mar. 10, 2023), the Eleventh Circuit Court of Appeals applied the Supreme Court’s holding in Rehaif noting that to establish a violation of Section 922(g), the prosecution had to prove not only that the defendant was a convicted felon in knowing possession of a firearm, but also that he knew he was barred from possessing a firearm due to his felon status. The Feliciano case emphasizes the government's burden in proving both elements of knowledge in order to secure a conviction under Section 922(g).

Feliciano argued on appeal that the district court abused its discretion at trial by admitting evidence of his 2015 felony conviction for possession of a firearm by a convicted felon. See United States v. Feliciano, No. 22-11390, at *2 (11th Cir. Mar. 10, 2023). The government offered the 2015 conviction under Rule of Evidence 404(b) as evidence “proving motive, opportunity, intent, preparation, plan, knowledge, identity, absence of mistake, or lack of accident." Fed.R.Evid. 404(b)(2)” United States v. Feliciano, No. 22-11390, at *2 (11th Cir. Mar. 10, 2023). 

The admission of that 2015 prior felony conviction into evidence helped the government establish that Feliciano knew he belonged to the relevant category of persons barred from possessing a firearm.

Further, a prior conviction in which the defendant possessed a gun provides a "logical connection between a convicted felon's knowing possession of a firearm at one time and his knowledge that a firearm is present at a subsequent time (or, put differently, that his possessionat the subsequent time is not mistaken or accidental)." Id. at 1281 (stating that a defendant's prior offenses that involved the knowing possession of a firearm "plainly bore" on the defendant's knowledge that the gun was present in the charged instance).

United States v. Feliciano, No. 22-11390, at *3-4 (11th Cir. Mar. 10, 2023)

Here, we conclude that the district court did not abuse its discretion at trial when it admitted a prior felon in possession conviction under Federal Rule of Evidence 404(b) The court properly determined that the evidence was sufficiently probative of Feliciano's knowing possession of a firearm, which was an issue at trial, and that its probative value outweighed the risk of unfair prejudice, particularly given the district court's limiting instructions. Further, we also conclude that even if the court should not have admitted the evidence, any error in this respect was harmless. The other evidence of Feliciano's refusal to pull over after an officer activated his blue lights, his attempt to outrun police vehicles in pursuit, his flight from the overturned vehicle, his post-arrest recorded statements while in jail, his trial testimony about a "driver" not observed by troopers, and his denial of driving the vehicle or knowing about the firearms inside all support his conviction independent of the 2015 conviction. Accordingly, we affirm.

United States v. Feliciano, No. 22-11390, at *5 (11th Cir. Mar. 10, 2023).

This blog post was prepared with the assistance of ChatGPT-4 AI. Nothing in this post should be considered legal advice or the creation of an attorney-client relationship. This blog is strictly for informational purposes only.

If the RESTRICT Act as currently proposed becomes law, it could result in criminal prosecution for individuals or entities that violate key provisions of the Act, including fines and imprisonment. The bill outlines penalties for violating any regulation, order, direction, mitigation measure, prohibition, or other authorization or directive issued under the Act, including civil penalties of up to $250,000 and criminal penalties of up to $1,000,000 or imprisonment for up to 20 years. 

(B) No person may cause or aid, abet, counsel, command, induce, procure, permit, or approve the doing of any act prohibited by, or the omission of any act required by any regulation, order, direction, mitigation measure, prohibition, or other authorization or directive issued under, this Act.

SEC. 11. PENALTIES.

If the Act is passed as written, it will likely face challenges to key provision that appear to over-criminalize the use of internet protocols that have traditionally been regarded as otherwise as lawful security measures to protect user privacy. Critics of the Act believe, for example, it could potentially criminalize the use of VPNs. Digital rights experts told Motherboard the RESTRICT Act, which may be used to ban TikTok, could impact many other types of services too, including VPNs.

A spokesperson for the Bill’s sponsors take a contrary view noting that: 

“This legislation is aimed squarely at companies like Kaspersky, Huawei and TikTok that create systemic risks to the United States’ national security—not at individual users.” 

“The threshold for criminal penalty in this bill is incredibly high—too high to ever be concerned with the actions of someone an individual user of TikTok or a VPN.”

Vice: Rachel Cohen, Communications Director for Senator Warner

The proposed legislation also raises significant Fourth Amendment concerns about an over-expansion of search and seizure authority by the government under the Act. The Act also includes provisions for search and seizure, with designated officers and employees of federal agencies authorized to inspect, search, seize, and obtain information from any person subject to the provisions of the Act. 

The Fourth Amendment of the United States Constitution protects individuals from unreasonable searches and seizures by the government. It states that people have the right to be secure in their persons, houses, papers, and effects, and that no warrants shall be issued without probable cause and a specific description of the place to be searched and the persons or things to be seized. The Framers believe that the Fourth Amendment should act as a check on the power of law enforcement to protect citizens from unreasonable privacy intrusions. Of course, when the Framers drafted the Fourth Amendment, they could never have imagined the privacy concerns we are now confronting in the modern digital age of social media apps and the like. 

Senator Thune, one of the advocates of the RESTRICT Act believes the proposed legislation instead protects Americans against foreign privacy intrusions: 

“In the United States, of course, we have the Fourth Amendment to the Constitution to protect the data Americans provide to apps from being seized by the government

“But the Chinese Communist Party has no such restraints.”

“In fact, Chinese law requires social media and technology companies to provide information – including individually identifiable personal information – to the Chinese government when asked. 

“So there is no legal framework in China to effectively protect TikTok users – or users of any China-based app – from having their personal information turned over to the Chinese Communist Party.

Thune Discusses Bill to Combat National Security Risks From Foreign Adversary Technologies

Although the Act does provide for an administrative and judicial review processes, there are also limitation in the Act relating to the submission of classified and sensitive information. Under the proposed legislation, such information must be submitted to the court ex parte and in camera (meaning such information would be submitted to the reviewing court by one-party, the government, and not subject to public disclosure). This raises grave concerns and could invite possible Due Process violations as well as hinder the ability of persons or entities who are subject to the Act from effectively being put on notice of these searches and being a afforded an opportunity to challenge these government actions. 

If passed as currently written, the Act will likely result in a number of Fourth Amendment challenges to the the potentially over-broad authority granted to federal government agencies to conduct these searches and seizures. Criminal defense attorneys will likely challenge these provisions arguing that the Act lacks clear limitations on the scope of the government’s power to conduct searches and seizures and these powers are too overly-broad and violate the Fourth Amendment. 

Summary of the RESTRICT Act Proposed Legislation: 

 

The RESTRICT Act was introduced on March 7, 2023 by Senator Mark Warner. Senate Bill S.686. “RESTRICT” is short for “Restricting the Emergence of Security Threats that Risk Information and Communications Technology”. 

According to a statement released by Senators Warner and John Thune, the bill proposes a solution challenges the United States currently faces in securing its information and communications technology (ICT) supply chain as the result rapid technological advancements and increasing global interconnectedness. Warner & Thune Statement. The proposed legislation specifically seeks to address foreign vendors, some controlled by autocratic and illiberal governments, that are gaining significant market share in internet infrastructure, online communications, and networked software markets. The RESTRICT Act’s objective is to empower the Department of Commerce to better protect the US supply chain from potential threats.

The Senators’ joint statement notes that foreign tech such as telecommunications equipment, social media applications, security software, and e-commerce platforms have entered the US market, becoming increasingly embedded within the nation's information and communications networks. Warner & Thune Statement. They cite notable ICT products like Kaspersky antivirus software, Huawei's telecommunications equipment, and software products from Chinese firms, have raised concerns about the risks they pose to US citizens' data, critical infrastructure, privacy, and the security of everyday products. Id.

The Senators suggest that past efforts to address these risks have been “disjointed” and insufficient, often relying on antiquated authorities delegated to the President by Congress in a pre-digital age. Id. They instead propose a new approach to systematically review and address the challenges posed by technology from foreign adversaries.

Senators Warner and Thune maintain that “the solution” is a Bill that establishes a “risk-based process” for the Department of Commerce to identify and mitigate foreign threats to ICT products and services. Id. They believe this approach is “vital in the context of personal communications services, where federal courts have previously blocked remedial steps against foreign software vendors as insufficiently tailored and based on inadequately substantiated risks.” Id.

The proposed legislation would require the Secretary of Commerce to establish procedures to identify, deter, disrupt, prevent, prohibit, and mitigate transactions involving information and communications technology products that any foreign adversary has an in interest in and that poses any undue or unacceptable risk to United States national security interests.

According to the joint statement, the RESTRICT Act will: 

• Prioritize evaluation of ICT products used in critical infrastructure, integral to telecommunications products, or pertaining to a range of defined emerging, foundational, and disruptive technologies with serious national security implications.

• Ensure comprehensive actions to address risks of untrusted foreign ICT by requiring the Secretary to take up consideration of concerning activity identified by other USG entities.

• Educate the public and business community about the threat by requiring the Secretary of Com- merce to coordinate with the Director of National Intelligence to provide declassified information on how transactions denied or otherwise mitigated posed undue or unacceptable risk. Id.

Summary of Key Provisions of the RESTRICT Act Proposed Bill:

 
Section 3 - ADDRESSING INFORMATION AND COMMUNICATION TECHNOLOGY PRODUCTS AND SERVICES THAT POSE UNDUE OR UNACCEPTABLE RISK: 

Addresses the risks posed by information and communication technology (ICT) products and services, and outlines actions that the Secretary may take to mitigate those risks. 

Subsection (a) lists the types of risks that the Secretary is authorized to address, including those related to ICT products and services that pose an “undue or unacceptable risk” to critical infrastructure, national security, or democratic processes. 

Subsection (b) outlines the review process for covered transactions and requires the Secretary to determine if a covered transaction poses an undue or unacceptable risk, and if so, to take appropriate action. 

Paragraph (2) requires the Secretary to publish information, “in declassified form” explaining how a covered transaction that was denied or mitigated meets the established criteria.

Finally, paragraph (3) of subsection (b) specifies that certain administrative procedure requirements do not apply to any regulation promulgated pursuant to paragraph (1). Section 3 of S.686

Section 4 - ADDRESSING INFORMATION AND COMMUNICATIONS TECHNOLOGY PRODUCTS AND SERVICES HOLDINGS THAT POSE UNDUE OR UNACCEPTABLE RISK: 

Outlines the process for identifying and mitigating risks associated with information and communication technology (ICT) product and service holdings that are considered “undue or unacceptable.” 

The Secretary, in consultation with relevant executive departments and agencies, is directed to identify and refer any “covered holding that poses an undue or unacceptable risk to the national security of the United States or the security and safety of United States persons.” The Executive Branch may then take appropriate action to compel divestment of or mitigate the risk associated with such covered holdings.  Section 4 of S.686

Section 5 - CONSIDERATIONS:

Outlines the considerations that the Secretary must take into account when carrying out reviews of covered transactions. Under Section 5, the Secretary must prioritize the evaluation of certain information and communications technology products and services, including those used in critical infrastructure, telecommunications, data hosting and computing, and other emerging technologies. 

Section 5 also requires the Secretary to consider various factors when determining whether a covered transaction poses an undue or unacceptable risk, including any orders or revocations issued by federal agencies, the nature and likelihood of consequences to the public and private sectors, and any relevant threat assessments or reports. Section 5 of S.686

Section 6 - DESIGNATION OF FOREIGN ADVERSARIES: 

Section 6 of Senate Bill S.686 allows the Secretary, “in consultation with the Director of National Intelligence, to designate any foreign government or regime as a foreign adversary if the Secretary finds that the foreign government or regime is engaged in a long-term pattern or serious instances of conduct significantly adverse to the national security of the United States or the security and safety of United States persons.” 

Not later than 15 days before the date on which the Secretary makes or removes a designation under subsection (a), the Secretary shall, by classified communication, notify the President pro tempore, Majority Leader, and Minority Leader of the Senate, the Speaker and Minority Leader of the House of Representatives, and the relevant committees of Congress, in writing, of the intent to designate a foreign government or regime as a foreign adversary under this section, together with the findings made under subsection (a) with respect to the foreign government or regime and the factual basis therefor. Section 6 of S.686

Section 7 - RESOLUTION OF DISAPPROVAL OF DESIGNATION OR REMOVAL OF DESIGNATION OF A FOREIGN ADVERSARY:

Outlines the rules for a resolution of disapproval of designation or removal of designation of a foreign adversary. The section defines terms such as "covered joint resolution," "joint resolution of disapproval of designation," and "joint resolution of disapproval of removal of designation." 

It provides for expedited consideration of such resolutions in both the House of Representatives and the Senate, outlining the procedures for introduction, committee referral, reporting and discharge, debate, and voting. If a joint resolution of disapproval of designation or removal of designation is enacted, it would either remove or prohibit the removal of the designation as a foreign adversary for purposes of this Act. The section also emphasizes that these rules are part of the rules of each House and that they supersede other rules only to the extent that they are inconsistent with such rules. Section 7 of S.686

Section 8 -IMPLEMENTING AUTHORITIES : 

Section 8 of the proposed legislation provides implementing authorities for the Secretary to carry out the responsibilities under the Act. The Secretary is authorized to establish regulations, procedures, and rules as needed. The Secretary can take action with respect to both individual covered transactions and classes of covered transactions. 

Additionally, the Secretary may issue guidance, create lists of foreign persons, and undertake any other action necessary to carry out the responsibilities under this Act. The Secretary may also appoint technical advisory committees to provide advice, and Chapter 10 of part 1 of title 5, United States Code, shall not apply to any meeting of such an advisory committee held pursuant to this subsection. Section 8 of S.686

Section 9 - INFORMATION TO BE FURNISHED: 

Outlines the information that the Secretary of Commerce can require from any party involved in a transaction or holding under review or investigation. The Secretary may require complete information, including reports and documents, relating to any act, transaction, or holding. 

The Secretary has the authority to:

(3) conduct investigations, hold hearings, administer oaths, examine witnesses, receive evidence, take depositions, and require by subpoena the attendance and testimony of witnesses and the production of any documents relating to any transaction or holding under review or investigation, regardless of whether any report has been required or filed in connection therewith, including through another person or agency. Section 9 of S.686

Section 10 - ENFORCEMENT: 

Section 10 of the proposed legislation discusses the enforcement of the act. It states that the President shall rely on the Secretary and other federal agencies to conduct investigations of violations. 

Designated officers and employees of these agencies may inspect, search, seize, and obtain information from any person subject to the provisions of the act. They may also administer oaths and issue subpoenas. In case of refusal to obey a subpoena, the district court may issue an order requiring compliance. 

(2) ACTIONS BY DESIGNEES.—In conducting investigations described in paragraph (1), designated officers or employees of Federal agencies described that paragraph may, to the extent necessary or appropriate to enforce this Act, exercise such authority as is conferred upon them by any other Federal law, subject to policies and procedures approved by the Attorney General.

(b) Permitted Activities.—Officers and employees of agencies authorized to conduct investigations under subsection (a) may—

(1) inspect, search, detain, seize, or impose temporary denial orders with respect to items, in any form, or conveyances on which it is believed that there are items that have been, are being, or are about to be imported into the United States in violation of this Act or any other applicable Federal law;

(2) require, inspect, and obtain books, records, and any other information from any person subject to the provisions of this Act or other applicable Federal law;

(3) administer oaths or affirmations and, by subpoena, require any person to appear and testify or to appear and produce books, records, and other writings, or both; and

(4) obtain court orders and issue legal process to the extent authorized under chapters 119, 121, and 206 of title 18, United States Code, or any other applicable Federal law.

(c) Enforcement Of Subpoenas.—In the case of contumacy by, or refusal to obey a subpoena issued to, any person under subsection (b)(3), a district court of the United States, after notice to such person and a hearing, shall have jurisdiction to issue an order requiring such person to appear and give testimony or to appear and produce books, records, and other writings, regardless of format, that are the subject of the subpoena. Any failure to obey such order of the court may be punished by such court as a contempt thereof.

(d) Actions By The Attorney General.—The Attorney General may bring an action in an appropriate district court of the United States for appropriate relief, including declaratory and injunctive, or divestment relief, against any person who violates this Act or any regulation, order, direction, mitigation measure, prohibition, or other authorization or directive issued under this Act. In any such action, the limitations as described under section 12(b) shall apply.

Section 10 of S.686

Section 11 - PENALTIES:

Section 11 of the proposed legislation outlines the civil and criminal penalties that will be imposed on individuals or entities that violate any regulation, order, direction, mitigation measure, prohibition, or other authorization or directive issued under this Act. 

(1) IN GENERAL.—It shall be unlawful for a person to violate, attempt to violate, conspire to violate, or cause a violation of any regulation, order, direction, mitigation measure, prohibition, or other authorization or directive issued under this Act, including any of the unlawful acts described in paragraph (2).

2) SPECIFIC UNLAWFUL ACTS.—The unlawful acts described in this paragraph are the following:

(A) No person may engage in any conduct prohibited by or contrary to, or refrain from engaging in any conduct required by any regulation, order, direction, mitigation measure, prohibition, or other authorization or directive issued under this Act.

(B) No person may cause or aid, abet, counsel, command, induce, procure, permit, or approve the doing of any act prohibited by, or the omission of any act required by any regulation, order, direction, mitigation measure, prohibition, or other authorization or directive issued under, this Act.

(C) No person may solicit or attempt a violation of any regulation, order, direction, mitigation measure, prohibition, or authorization or directive issued under this Act.

(D) No person may conspire or act in concert with 1 or more other person in any manner or for any purpose to bring about or to do any act that constitutes a violation of any regulation, order, direction, mitigation measure, prohibition, or other authorization or directive issued under this Act.

(E) No person may, whether directly or indirectly through any other person, make any false or misleading representation, statement, or certification, or falsify or conceal any material fact, to the Department of Commerce or any official of any other executive department or agency—

(i) in the course of an investigation or other action subject to this Act, or any regulation, order, direction, mitigation measure, prohibition, or other authorization or directive issued thereunder; or

(ii) in connection with the preparation, submission, issuance, use, or maintenance of any report filed or required to be filed pursuant to this Act, or any regulation, order, direction, mitigation measure, prohibition, or other authorization or directive issued thereunder.

(F) No person may engage in any transaction or take any other action with intent to evade the provisions of this Act, or any regulation, order, direction, mitigation measure, prohibition, or other authorization or directive issued thereunder.

(G) No person may fail or refuse to comply with any reporting or recordkeeping requirement of this Act, or any regulation, order, direction, mitigation measure, prohibition, or other authorization or directive issued thereunder.

(H) Except as specifically authorized in this subchapter, any regulation, order, direction, mitigation measure, or other authorization or directive issued thereunder or in writing by the Department of Commerce, no person may alter any order, direction, mitigation measure, or other authorization or directive issued under this Act or any related regulation. Section 11 of S.686

See the link and text of the proposed for a further discussion of the proposed civil and forfeiture penalties. 

Section 12 - JUDICIAL REVIEW:

This section of the proposed legislation establishes the administrative and judicial review process for actions taken under the Act. The term "classified information" is defined to include information that requires protection against unauthorized disclosure for reasons of national security. 

The actions taken by the President and the Secretary under this Act shall not be subject to administrative or judicial review, except as otherwise provided in this section. 

(b) Administrative And Judicial Review.—Notwithstanding any other provision of law, actions taken by the President and the Secretary, and the findings of the President and the Secretary, under this Act shall not be subject to administrative review or judicial review in any Federal court, except as otherwise provided in this section. Actions taken by the Secretary under this Act shall not be subject to sections 551, 553 through 559, and 701 through 707 of title 5, United States Code.

However, an aggrieved person may file a petition for review in the United States Court of Appeals for the District of Columbia Circuit within 60 days of the Secretary's or President's action under sections 3(a) and 4(c), respectively. 

(1) IN GENERAL.—Not later than 60 days after the Secretary takes action under section 3(a), or the President takes action under section 4(c), an aggrieved person may apply for review by filing a petition for review in the United States Court of Appeals for the District of Columbia Circuit.

(2) STANDARD OF REVIEW.—The court shall not disturb any action taken by the Secretary under section 3(a), or by the President under section 4(c), unless the petitioner demonstrates that the action is unconstitutional or in patent violation of a clear and mandatory statutory command.

The United States Court of Appeals for the District of Columbia Circuit shall have exclusive jurisdiction over claims arising under this Act. 

(1) IN GENERAL.—The procedures described in this subsection shall apply to the review of a petition for review under this section.

(2) FILING OF RECORD.—The United States shall file with the court an administrative record, which shall consist of the information that the appropriate official relied upon in taking a final action under this Act.

(3) UNCLASSIFIED, NONPRIVILEGED INFORMATION.—All unclassified information contained in the administrative record filed pursuant to paragraph (2) that is not otherwise privileged or subject to statutory protections shall be provided to the petitioner with appropriate protections for any privileged or confidential trade secrets and commercial or financial information.

(4) IN CAMERA AND EX PARTE REVIEW.—The following information may be included in the administrative record and shall be submitted only to the court ex parte and in camera:

(A) Sensitive security information, as defined by section 1520.5 of title 49, Code of Federal Regulations.

(B) Privileged law enforcement information.

(C) Information obtained or derived from any activity authorized under the Foreign Intelligence Surveillance Act of 1978 (50 U.S.C. 1801 et seq.), except that, with respect to such information, subsections (c), (e), (f), (g), and (h) of section 106 (50 U.S.C. 1806), subsections (d), (f), (g), (h), and (i) of section 305 (50 U.S.C. 1825), subsections (c), (e), (f), (g), and (h) of section 405 (50 U.S.C. 1845), and section 706 (50 U.S.C. 1881e) of that Act shall not apply.

(D) Information subject to privilege or protections under any other provision of law, including the Currency and Foreign Transactions Reporting Act of 1970 (31 U.S.C. 5311 et seq.).

(5) INFORMATION UNDER SEAL.—Any information that is part of the administrative record filed ex parte and in camera under paragraph (4), or cited by the court in any decision, shall be treated by the court consistent with the provisions of this section. In no event shall such information be released to the petitioner or as part of the public record.

The determination by the court under this section shall be the exclusive judicial remedy for any claim described in this section

(f) Exclusive Remedy.—A determination by the court under this section shall be the exclusive judicial remedy for any claim described in this section against the United States, any executive department or agency, or any component or official of any such executive department or agency.

Section 12 of S.686

Conclusion: 

 

Although the RESTRICT Act proposed by Senator Warner attempts to address risks posed by foreign ICT products and services, the Act as written also raises concerns regarding the potential over-criminalization of technology applications such as VPNs designed to protect privacy and security of individuals while on the internet. In addition, the proposed Act raises significant possible Fourth Amendment concerns regarding the scope and potential overreach of the government’s authority to conduct search and seizures of individual’s internet activity. 

Will Congress respond to these concerns and include clear limitations on the scope of search and seizure authority to ensure that individuals are afforded adequate Fourth Amendment and Due Process protections under the United States Constitution?

This blog post was prepared, in part, with the assistance of ChatGPT-4 AI. Nothing in this post should be considered legal advice or the creation of an attorney-client relationship. This blog is strictly for informational purposes only.

Under federal law, possession of marijuana is still illegal, despite its legalization in some states for medical or recreational use. The Controlled Substances Act categorizes marijuana as a Schedule I controlled substance, which means it is considered to have a high potential for abuse and no accepted medical use. DAngeloLegal Blog

21 U.S.C. § 844 (Penalties for simple possession) states that it is illegal for anyone to knowingly or intentionally possess a controlled substance, including marijuana. Those who violate this provision by possessing marijuana can face imprisonment for up to one year and a minimum fine of $1,000. 

However, recent developments suggest a potential shift in federal policy regarding marijuana possession offenses. On October 6, 2022, President Biden issued a “full, complete, and unconditional pardon” to all current U.S. citizens and lawful permanent residents who were convicted of or committed “the offense of simple possession of marijuana in violation of the Controlled Substances Act, as currently codified at 21 U.S.C. § 844.” This action provides relief to individuals who have been burdened by the consequences of a marijuana possession conviction, including difficulties in finding employment, housing, and other basic needs.

In addition to the pardon, the President has also requested an expedited review of how marijuana is scheduled under the Controlled Substances Act. The review will be conducted by the Secretary of Health and Human Services and the Attorney General. This could potentially lead to changes in federal marijuana policy and a reclassification of marijuana to a lower schedule, which would make it easier to study and potentially legalize.

Recent legislative proposals have also aimed to remove marijuana from the Controlled Substances Act schedules, eliminate criminal penalties for marijuana offenses, and expunge prior marijuana convictions. The Marijuana Opportunity Reinvestment and Expungement (MORE) Act, which was passed by the U.S. House of Representatives in December 2020, includes provisions for expungement of federal marijuana offenses and incentives for states to do the same.

Overall, while marijuana possession remains illegal under federal law, recent actions by the President and legislative proposals signal a potential shift in federal policy regarding marijuana offenses. Individuals who have been affected by a marijuana possession conviction should consult with an experienced criminal defense attorney to determine if they are eligible for relief under the recent pardon or other available options for post-conviction relief.

The United States Department of Justice (“DOJ”) recently launched a program to implement President Joe Biden’s Federal Cannabis Conviction Pardon Presidential Proclamation allowing recipients of the October 6, 2022, presidential pardon for simple possession of marijuana to obtain a pardon certificate.This blog post will outline the eligibility criteria for obtaining a pardon certificate and provide guidance on how a lawyer can assist clients throughout the process. DAngeloLegal Blog 

Eligibility Criteria:

According to the Pardon Attorney, an applicant must meet the following criteria to be eligible for a pardon certificate:

  1. Have been charged or convicted of simple possession of marijuana in either a federal court or D.C. Superior Court.

  2. Have been lawfully within the United States at the time of the offense.

  3. Have been a U.S. citizen or lawful permanent resident on October 6, 2022.

Required Information for the Online Form:

To obtain a pardon certificate, applicants must provide the following information on the online form:

  1. Personal information, including name, date of birth, and place of birth.

  2. Contact information: email address is strongly preferred, but an applicant can also include a mailing address and/or phone number. If the applicant does not have their own email, mailing address or phone number, they can include the contact information of a person who is helping them complete the application.

  3. Information regarding the applicant’s citizenship or immigration status, including alien registration or citizenship number of a person who is a lawful permanent resident or naturalized citizen and the date those statuses were attained.

  4. Court documents that include the district of conviction, code section of the conviction, date of conviction, and docket number, if convicted; or

  5. Court documents that include the code section of the charge, district where charged, and docket number, if charged but not convicted.

How can a Experienced Federal Criminal Pardon Lawyer Assist?

A an experienced Federal Criminal Pardon Lawyer can play a crucial role in helping clients navigate the pardon certificate process by:

  1. Determining eligibility: A lawyer can help clients review their case history and determine if they meet the criteria for a pardon certificate.

  2. Gathering necessary documentation: A lawyer can help clients obtain the required court documents and other relevant information for the online form.

  3. Completing the online form clients: A lawyer can provide guidance in accurately completing the online form with the necessary information and ensure all required fields are filled out.

  4. Monitoring the application status: A lawyer can help clients track the progress of their pardon certificate application and address any potential issues that may arise during the process.

  5. Advising on additional legal matters: In the event that the pardon certificate affects other legal matters, such as employment or immigration status, a lawyer can provide guidance and support.

The new Federal Cannabis Conviction Pardon Program presents a significant opportunity for those with qualifying convictions to clear their records. An experienced Federal Criminal Defense Attorney can play a pivotal role in helping clients navigate this process by determining eligibility, gathering necessary documentation, and providing ongoing support. 

Federal Criminal Defense Attorney Carlo D’Angelo 

In Texas, individuals arrested for driving while intoxicated (DWI) face both criminal charges and an administrative license suspension. The latter is conducted by the Texas Department of Public Safety (DPS) and is separate from the criminal case. This article will discuss what the Texas DPS must prove by a preponderance of the evidence in a DWI administrative license suspension hearing to demonstrate probable cause to arrest the defendant for operating a motor vehicle while intoxicated, according to Tex. Transp. Code § 524.035(a)(2). DAngelo Legal Blog

The Administrative License Suspension Hearing

When an individual is arrested for DWI in Texas, their driver's license is subject to an immediate suspension. The driver has 15 days to request an administrative license suspension hearing, which is conducted by the State Office of Administrative Hearings (SOAH). This hearing is solely focused on determining whether there was probable cause to arrest the individual for DWI, and it does not determine guilt or innocence in the criminal case.

Burden of Proof in Texas DWI Administrative License Suspension Hearings:

Under Tex. Transp. Code § 524.035(a)(2), the Texas Department of Public Safety (DPS) has the burden of proof in an ALR hearing. This means that DPS must establish, by a preponderance of the evidence, that the arresting officer had reasonable grounds to believe you were operating a motor vehicle while intoxicated.

Preponderance of the Evidence:

The term "preponderance of the evidence" is a standard of proof that means the evidence presented by the DPS must be more convincing than the evidence presented by the opposing party (the licensee). In other words, the DPS must prove that it is more likely than not that the officer had reasonable grounds to believe you were intoxicated.

Key Factors in the Burden of Proof:

To satisfy the burden of proof under Tex. Transp. Code § 524.035(a)(2), the DPS must present evidence that demonstrates:

  1. Reasonable suspicion for the initial traffic stop.

  2. Probable cause for the DWI arrest.

  3. Proper administration of the required statutory warnings.

  4. Proper administration of the breath or blood test, if applicable.

Tex. Transp. Code § 524.035: 

(a) The issues that must be proved at a hearing by a preponderance of the evidence are:

(1) whether:

(A) the person had an alcohol concentration of a level specified by Section 49.01(2)(B), Penal Code, while operating a motor vehicle in a public place or while operating a watercraft; or

(B) the person was a minor on the date that the breath or blood specimen was obtained and had any detectable amount of alcohol in the minor's system while operating a motor vehicle in a public place or while operating a watercraft; and

(2) whether reasonable suspicion to stop or probable cause to arrest the person existed.

(b) If the administrative law judge finds in the affirmative on each issue in Subsection (a), the suspension is sustained.

(c) If the administrative law judge does not find in the affirmative on each issue in Subsection (a), the department shall:

(1) return the person's driver's license to the person, if the license was taken by a peace officer under Section 524.011(b);

(2) reinstate the person's driver's license; and

(3) rescind an order prohibiting the issuance of a driver's license to the person.

(d) An administrative law judge may not find in the affirmative on the issue in Subsection (a)(1) if:

(1) the person is an adult and the analysis of the person's breath or blood determined that the person had an alcohol concentration of a level below that specified by Section 49.01, Penal Code, at the time the specimen was taken; or

(2) the person was a minor on the date that the breath or blood specimen was obtained and the administrative law judge does not find that the minor had any detectable amount of alcohol in the minor's system when the minor was arrested.

(e) The decision of the administrative law judge is final when issued and signed.

Tex. Transp. Code § 524.035

This blog post was prepared with the assistance of ChatGPT-4 AI. Nothing in this post should be considered legal advice or the creation of an attorney-client relationship. This blog is strictly for informational purposes only.

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