Consequences of a Federal Felony Conviction
With the increased emphasis on Federal prosecutions of individuals involved in so called business crimes (often actually violations of various agency rules or regulations) and the fact that most Federal prosecutions involve felony rather than misdemeanor charges, a potential target of such action must understand the collateral consequences of such charges beyond just the threat of prison and a fine. In general, the following consequences can follow from a Federal Felony conviction:
- Disbarment and Doing Business with the Government. Normally, disbarment and doing business with the government will relate to the type of crime involved. For example, fraud or any felony arising out of a contract with the Department of Defense will result in a five-year ban precluding the individual from holding various positions with a federal contractor or sub-contractor. 10 U.S.C. Section 2408. Other statutes provide for exclusion from health programs and from participation in parts of the generic drug industry. 42 U.S.C. Section1320a-7(a); 21 U.S.C. Section 335a. Conviction on tax charges normally does not disqualify you from any government contracts.
- Voting Rights and Jury Service. An individual's right to vote in a Federal election is determined by state law. Richardson v. Ramirez 412 U.S. 24 (1974). State law also determines your right to vote in state and local elections. Iowa law provides that a person convicted of a felony under Federal Law is disqualified from registering to vote and from voting. Iowa Code 48A.6 (1997). If the person's rights are later restored by the Governor, or by the President of the United States, the person may register to vote. Iowa Code 48A.6 (2003).
As a convicted felon, you would not be able to participate as a juror in the state courts. Iowa R. Civ. P. 187(A). A convicted felon may sit on a federal jury if an individual's civil rights have been restored under 28 U.S.C. Section 1865(b)(5). Under this Section, civil rights and restorations are governed by state law. The Courts and the Administrative Office of the U.S. Courts have construed Section 1865 to apply only when an affirmative act by the state to restore civil rights occurs - e.g., the act of granting a gubernatorial pardon or amnesty. Iowa law does not permit a federal felon to seek a governor's pardon and thus restoration of rights normally will not be available.
- Firearms. A federal felony conviction bars, under federal law, obtaining, receiving, transporting, or possessing any firearm or ammunition. 18 U.S.C. Section 921(a)(3). Subject to a very restricted exception for convictions under antitrust, restraint of trade, and unfair trade practices. 18 U.S.C. Section 921(20)(A). This ban continues permanently unless one of three events occurs. The first is a presidential pardon, pursuant to 18 U.S.C. Section 922(g)(1). Regulations regarding executive clemency by pardon are at 28 C.F.R. Section 1.1, 1.2. An application should not be made until five years after release from custody or, if not jailed, from conviction. A seven-year wait is prescribed for tax, controlled substance, weapon, large fraud, public corruption, and violent crime offenses. A waiver of the waiting period may be granted to an alien seeking a pardon in order to avoid deportation. There is an investigation process which takes some time. Very few pardons are granted by presidential pardon.
The second event is "Expungement of a Conviction", but in the federal system (unlike state systems) there is no formal "expungement" procedure for an adult and thus this process is not normally available for individuals. It should be noted that one District Court found that it had "inherent equitable powers and discretion to expunge federal criminal records in a special case" and expunged an eight-year-old false credit union entry conviction to allow a defendant to re-enlist in the Army Reserves and seek reinstatement in the California State Bar. United States v. Smith, 745 F.Supp. 1553 (C.D. Cal. 1990). Practically speaking, expungement is not a solution under the federal system.
The third event is an exception for a convicted felon who has "had civil rights restored". A federal felony offender can take advantage of the civil rights restoration exemption only if his civil rights are restored under federal law, rather than state law. But there is apparently no federal procedure for restoring civil rights to a federal felon. Beecham v. United States 511 U.S. 368 (1994).
Thus, practically speaking, an individual's only means of regaining his firearm privilege is by presidential pardon (unlikely) or under an administrative restoration process operated by the government under 18 U.S.C. Section 925(c). That Section and 37 C.F.R. Section 178.144(d) provide that application can be made to the Secretary of the Treasury for freedom from "disabilities imposed by federal laws" (the possession of guns). But, relief will not be granted by BATF if the state in which you reside bans possession of both long guns and hand guns by convicted felons. Iowa law does. But even in a state that permits the possession of some guns (shotguns for example), since 1992 BATF has been prohibited by Congress from spending funds to process applications from individuals and thus this remedy is not available. Thus, the only avenue currently open for a federal felon to be removed from firearm disability is a presidential pardon.
- Armed Forces. A felony conviction makes one ineligible to enlist in the Armed Forces. 10 U.S.C. Section504.
- Flying. An individual's ability to obtain or maintain a private pilot's license and aircraft registration is normally not jeopardized unless the felony involves controlled substances. 49 U.S.C. ' 44703, 44101-44103, 44106, 44703(e), 44709 and 44710.
- Private Radio Licenses. Only convictions involving controlled substances or Title 47 (Communications) offenses are grounds for revocation of a private radio operator's license. 47 U.S.C. Section 312(a).
- Other Federal Licenses. Custom brokers, export-import, merchant marine, S.E.C., N.A.S.D., C.F.T.C., a felony conviction can be a relevant factor when the agency reviews an application for a license. 19 U.S.C. Section 1641(d)(1)(B); 50 U.S.C. APP. Section 2410(h)(1), 22 U.S.C. Section 2778(g)(3)(a),(b). 5 F.C.C.R. 3252 and 21 U.S.C. Section 823.
- Holding Federal Offices. The Constitution does not prohibit felons from holding elected federal offices. U.S. Constitution Article I, Sections 1,2, Article II, Section 1, Article VI. However, the impeachment clause provides removal of all civil officers of the U.S. on impeachment for and conviction of, treason, bribery, or "other high crimes and misdemeanors". U.S. Constitution Article II, Section 4. Disqualification to hold any federal office may follow as a result of a federal conviction. U.S. Constitutional Article I, Section 3.
- Federal Employment. While felony convictions in general do not preclude federal employment (the felony is a factor in determining suitability), certain federal felony convictions under certain statutes require disqualification or bar from federal employment either permanently or for a specific period of time. For example, discharge from federal office may be required by a Court after a bribery conviction 18 U.S.C. Section 201(b). Further future government employment is affected under 18 U.S.C. Sections 2385, 2387, 1905, 1913; 26 U.S.C. Sections 7213, 7214; and 5 U.S.C. Section 7313. Numerous other occupational restrictions exist such as a prohibition against holding certain labor organization posts, banking or insurance company positions, or acting as a registered S.E.C., C.F.T.C. or N.A.S.D. actor. You cannot become a controlling shareholder in a federally insured depository institution. 12 U.S.C. Section1818(g)(1)(c), 1829 (Banking and Credit Unions); 7 U.S.C. Section 12a (CFTC); 15 U.S.C. Section 80b-3(e)(2), 708(b)(4)(B)(SEC); U.S.C. Section 504, 1111 (Labor); 18 U.S.C. Section 1033(e)(1)(A) (Interstate Insurance Business). Relief from these disabilities is administratively or judiciously possible, but often only after a certain period of time and violation of the least statutory restrictions can result in further felony charges or revocation of probation or supervised release. See e.g., 18 U.S.C. Section 1033.
- State Licenses and Occupational Restrictions. The convictions can prevent an individual from becoming an Iowa Peace Officer or obtaining or keeping numerous occupational or professional licenses if the crime is substantially related to the licensed activity or the licensee's fitness. Thus, crimes of "deceit" often serve as a basis for prohibiting the retention of a professional's license. Among the licenses that can be jeopardized by such convictions are doctors, lawyers, engineers, accountants, etc.
- Federal Benefits. For most crimes, federal benefits are not threatened, but 21 U.S.C. Section 862 list numerous federal benefits that are lost where one is convicted of drug offences. Pensions and annuities may be affected by conviction of certain national security crimes. See 5 U.S.C. Section 8312; 42 U.S.C. Section 402(u)(1). Old age survivors and disability benefits must be suspended for any month during which a defendant is actually confined in jail under any felony conviction. 42 U.S.C. Section 402(x)(1)(A).
- Guideline Impact. Under the federal system, sentencing occurs under non-binding guidelines based on the so called offense level (in business cases this is based normally on the amount of money involved or the number of violations occurring). Where an individual has prior convictions the guidelines also provide for so called criminal history categories which has the effect of increasing the penalties for a present prosecution beyond what they would have been had this been the first conviction. A felony conviction will normally have the effect of increasing the applicable penalties in the event of a subsequent conviction (even for events that have already occurred) as will a prosecution during a period of supervised probation that is normally part of every sentence. Where prosecutions for other offenses is a possibility this impact can be substantial.
- Travel Restrictions. Most sentences also provide for a period of supervised release following any formal restrictions on the individual's freedom. Some districts restrict travel outside of the Federal District during the first 60 days or so of supervised release. In addition, many foreign governments (Canada for example) make it a crime under their laws for an individual with a felony conviction to enter their country without special application (which, assuming it is available, can take a month or so to obtain from that country's consulate ).
The above list is undoubtedly not exhaustive of the subject and, of course, does not deal with the real or perceived problems such a conviction can cause in business relationships in general. It is, however, a realistic and true list of consequences that will result from a Federal felony conviction, whether by way of a plea agreement or a jury verdict.