A Chemistry Lesson from the Seventh Circuit

seventh-circuit51Under the federal sentencing guidelines, sentences in drug-trafficking cases turn largely on weight — that is, how much of each type of drug was sold by the defendant — which can cause all sorts of problems in sentencing long-time dealers who were not considerate enough to keep meticulous records of their sales for the police.  Witness the case of crack dealer Joshua Hines, who admitted acquiring 1.531 kilograms of powder cocaine.  The district judge assumed that Hines cooked this powder into an equivalent weight of crack for resale, which resulted in a sentence of 168 months in prison.  Given much harsher treatment of crack than powder, the guidelines would not have resulted in nearly so long a sentence on the basis of the 1.531 kg of powder alone.  So, is it fair to assume that a crack dealer who possessed a certain weight of powder also possessed the same weight of crack?

No, said the Seventh Circuit in United States v. Hines (No. 08-3255).  Writing for the court, Judge Posner offered a little chemistry lesson, explaining that the process of cooking powder into crack removes hydrochloride from the drug.  Under ideal conditions, cooking results in an eleven-percent weight loss.  But, given the potential for careless waste during cooking, it is not clear that even the eleven-percent loss should be assumed.  The court concluded, “[If] the government wants the sentencing judge to infer the weight of the crack from the weight of the powder from which the crack was manufactured, it has to present evidence, concerning the cooking process, that would enable a conversion ratio to be estimated” (3).  (Judging by the mess on my kitchen counter most mornings, I am guessing that the “conversion ratio” when my six-year-old cooks oatmeal into hot cereal is about 2:1.  Fortunately, and notwithstanding its cholesterol-lowering benefits, the street value of oatmeal remains a lot less than cocaine.)

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Judge Posner’s Argument Concerning “A Failure of Capitalism”

88px-Richard_posner_harvardzSurely there are more pressing things to do at this hour than scan my Google Reader headlines (well, actually, I’ve become a Feedly user, but the Feedly feed comes from Reader, mostly).

Nonetheless,  I couldn’t pass up today’s essay by Seventh Circuit Judge Richard A. Posner, on Foreign Policy’s website.   Titled “The Real Danger of Debt,” the article is described as having been “adapted from” Judge Posner’s book, “A Failure of Capitalism: The Crisis of ‘o8 and the Descent into Depression.”  In the article, Posner describes the “deeply wounded economy” of the United States, explaining that, essentially, “private savings are being borrowed by the government, combined with the government’s foreign borrowing, and then transferred to households to enable them to maintain their accustomed level of consumption. People are saving more, but government borrowing overwhelms their saving, with the result that aggregate saving — public plus private — is negative.”

He goes on to outline, in his usual clear, bracing style, the steps by which this state of affairs could lead to rising interest rates, instability in the value of the dollar, the loss of the dollar’s status as the chief  international reserve currency, increased savings rates, and decreased economic growth:

As real interest rates rise as a consequence of a growing public debt and declining demand for the U.S. dollar as an international reserve currency, U.S. savings rates will rise and, by reducing consumption expenditures, slow economic activity. Economic growth may also fall as more and more resources are poured into keeping alive elderly people, most of whom are not highly productive members of society from an economic standpoint. The United States may find itself in the same kind of downward economic spiral that developing countries often find themselves in.

This ominous prediction of where current trends may lead us is dramatic in itself  (although, sadly, much less dramatic than it would have seemed in 2007).  But rather than the worrisome warnings about a second economic depression, the passages that struck me most are the ones characterizing the current political situation in the United States.  

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Seventh Circuit Weighs in on Bankruptcy Fraud

seventh-circuit51In the wake of a surge in bankruptcies, can a boom in bankruptcy fraud prosecutions be far behind?  If so, district court judges will benefit from the Seventh Circuit’s opinion today in United States v. Peel (No. 07-3933), which addressed a number of unsettled legal questions.

The facts in Peel were unusually lurid for a bankruptcy case.  Back in the 1970’s, Peel had an affair with his wife’s sixteen-year-old sister.  Although the affair ended after a few months, Peel kept several nude pictures of the sister.  Some time later, Peel was divorced from his wife, and bankruptcy followed.  Peel’s largest financial obligation was to his ex-wife: $230,000 plus an additional $2500 per month for the rest of his life, pursuant to the terms of the divorce settlement.  The ex-wife filed a claim in the bankruptcy proceedings in order to ensure that these obligations were not discharged.  Peel then attempted to pressure her into dropping the claim by threatening to release the nude pictures of her sister.  The ex-wife complained to police, and Peel was eventually convicted of bankruptcy fraud, obstruction of justice, and possession of child pornography.

Judge Posner, writing for the court, addressed several issues relating to Peel’s convictions and sentence. 

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