Dr. Evil demands $1 million, gets convicted for wire fraud and extortion

From Monday's U.S. Court of Appeals for the 6th Circuit decision in U.S. v. Brown:

When criminal-law cases imitate art, they do not always choose its highest form. In Austin Powers: International Man of Mystery, Dr. Evil develops a plan to steal a nuclear warhead and to hold the world hostage for $1 million. This was not, Dr. Evil's deputy pointed out, all that much money for a 1990s global criminal enterprise.

But it was enough for an anonymous extortionist in today's case, who apparently was familiar with the movie and who chose some features of it as signatures of his 2012 crime. Assuming the nom de guerre "Dr. Evil," the individual demanded $1 million in Bitcoin in exchange for an encryption key to Mitt Romney's unreleased tax returns. The extortionist claimed to have stolen Romney's returns from PricewaterhouseCoopers, and he posted a taunting, digitally altered image of Mike Myers's Dr. Evil, wearing a Secret Service badge, in the lobby of the accounting firm's offices in Franklin, Tennessee.

A trail of digital breadcrumbs led law enforcement to Tennessean Michael Brown. It turned out that Brown never stole Romney's returns. And his attempt to extort PricewaterhouseCoopers, the Democratic and Republican parties, and the public earned Brown twelve convictions for wire fraud and extortion, a four year prison sentence, and an order to pay over $200,000 in restitution.

Brown appeals his convictions on the grounds that the Secret Service's search warrant lacked probable cause and that he was prejudiced by the trial judge's decision to allow questions from the jury. Brown also appeals the obstruction of justice enhancement in the district court's calculation of his sentence. We affirm Brown's convictions but vacate his sentence.

Dr. Evil's partial sentencing victory (which might reduce his 4-year sentence by perhaps a year or so) had to do with whether he had obstructed justice by a statement during the investigation; the district court said yes, but the appellate court said no:

The district court found one obstructive act: that Brown "ran a rabbit across the trail" by telling investigators that other people had "access" to his computer and thus may have committed the crimes. There is some dispute over whether the two unnamed black men Brown mentioned during the proffer were included in the list of eight people with access to Brown's computer that his lawyer later emailed to investigators.

But Brown cannot be subject to an obstruction enhancement either way. If the two men were not included in the list, the government has not shown, and the district court did not find, that this statement caused any obstruction, significant or otherwise, to the government's investigation.

And even if the list of eight included the two men mentioned during the proffer, Brown's statements do not establish obstruction of justice for two reasons. The first is that Brown did not lie. The emailed list of eight names, supplied by his lawyer to investigators, responded to a question posed by investigators and came with the caveat that it was "not furnished as being exculpatory." The trial established that six of the eight people had indeed been to Brown's house and thus had "access" to Brown's computer. As for the two individuals on the list who had never been to Brown's house, they were added to the list by Brown's wife, not Brown.

The second reason is that the email did not "hurt or retard [the] investigation." [Text moved: [Even] a lie to an investigator by itself does not usually warrant an enhancement unless it substantially interferes with the government's investigation.] Brown's defense was that he didn't do it and that these eight people had access to his computer and thus may have committed the crime. All the investigators had to do in response was investigate the eight people on the list.

The investigators interviewed each one. They called each one at trial. And when each of the persons on this discrete list denied using Brown's computer, that helped the government, as it undermined Brown's credibility, bolstered the government's case, and eliminated one of the few remaining ways in which this crime could have been committed. Brown's statements to prosecutors thus did not "significantly obstruct[] or impede[] the government's investigation" and thus cannot suffice for an obstruction of justice enhancement.

Thanks to Howard Bashman (How Appealing) for the pointer.