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Third Circuit: Local Occupation Restrictions on Fraudulent "Attorney" Allowed

Third Circuit: Local Occupation Restrictions on Fraudulent "Attorney" Allowed

On April 19, 2006, the Third Circuit upheld occupational restrictions placed on a former federal prisoner that prohibited him from working for an attorney of law firm while on three years of supervised released.

Samuel David Smith, HI, a former federal prisoner, was convicted of wire fraud and sentenced to 41 months of incarceration and 3 years of supervised release. The wire fraud was part of a scheme in which he started a business named Litigation Support Services and claimed to be a legal consultant with ties to Motorola. The fraud netted him $589,750 and involved a forged letter on Motorola letterhead and a faked purchase order. Smith had prior convictions for forging a court order and letter on attorney stationary with a forged attorney's signature in an effort to defraud the Pennsylvania Board of Probation and Paroles and Allegheny Court of Common Pleas; altering, forging and/or counterfeiting documents while engaging in the unauthorized practice of law and holding himself out to be an attorney and collecting legal fees; intimidating a witness while claiming to be an attorney; falsifying another court order intended to defraud the Pennsylvania Board of Probation and Parole; and theft by deception in which he unlawfully withheld $25,700 while claiming to be an attorney. Identity theft was involved in that Smith applied for and received a driver's license in the name of an attorney that worked at the firm where Smith was employed. They also occurred while Smith was on parole for manslaughter and armed robbery.

At the time of his sentencing, Smith had no offers of employment with attorneys. At the time of his release, local attorneys offered to employ Smith. Smith's program review team considered, but rejected the idea. Two months later, the local attorneys petitioned the district court to allow the employment. The government then petitioned the district court to impose an occupational bar on Smith to prevent him from obtaining employment with a law firm or other entity where he would have access to personal information about clients. The district court denied Smith's petition and granted the government's petition, limiting it to employment related to attorneys or law firms. Smith appealed.

The Third Circuit held that the employment offer constituted unforeseen chanced circumstances since sentencing for which the district court could modify the sentence. It held that the occupational restriction did bear a reasonable and direct relationship to the offense of conviction and did not exceed the minimum scope and duration necessary to protect the public. Therefore, the district court did not abuse its discretion in fashioning the scope and duration of the restriction and the district court's order was upheld. See: United States v. Smith, No. 05-2697 (3rd Cir. 2006).

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Related legal case

United States v. Smith