District court erred in ‘distribution’ enhancement in child porn case, 7th Circuit rules

A man convicted of transporting and possessing child pornography could have his sentence reduced after a federal appeals court determined his saving of the images in a cloud-based folder didn’t amount to “distribution.”

In 2019, law enforcement received a tip from cloud-storage host Dropbox that someone had uploaded child pornography to it. Officers tracked the IP address to Kenneth R. Hyatt’s home, and he admitted he had uploaded the files.

Hyatt was charged with transporting, receiving and possessing child pornography. Initially, he agreed to plead guilty to the transportation charge in exchange for a below-guidelines sentence of 15 years. But the U.S. District Court for the Northern District of Indiana rejected that agreement, so Hyatt returned with a plea of guilty — unaccompanied by any agreement with the prosecutor — to the receiving offense.

The presentence investigation report determined Hyatt had a total offense level of 34, using U.S. Sentencing Guidelines § 2G2.2.

Hyatt did not object to any of the calculations but pressed for the below-guidelines sentence of 15 years. He argued the court should disregard four of the enhancements: those for sadistic behavior, prepubescent children, using a computer and 600 or more images.

But the defendant did not mention the two-level distribution enhancement, despite the PSR not explaining what evidence, other than Hyatt’s upload to Dropbox, supported it.  The lone explanation the report writer provided for a distribution enhancement was that Hyatt “uploaded 65 files of child pornography on Dropbox.”

Unpersuaded by his arguments, the district court sentenced Hyatt to just over 24 years in prison. Before announcing the sentence, the court repeated that the distribution enhancement was based on Hyatt’s “uploading 65 images to Dropbox, which is a file-sharing platform.”

On appeal, Hyatt argued for the first time that the district court erred in applying the enhancement provided by U.S.S.G. § 2G2.2(b)(3)(F) for distribution.

The 7th Circuit Court of appeals agreed and reversed, vacating Hyatt’s sentence and remanding to the district court for resentencing.

After finding Hyatt didn’t waive his argument on appeal, the 7th Circuit concluded the district court erred in its reasoning for the enhancement.

“The problem for the government is, in a nutshell, that as far as this record shows, no one was able to obtain access to anything in the Dropbox folder that Hyatt was using without his active intervention and permission,” Judge Diane Wood wrote. “And no evidence indicates that he ever opened it up to anyone. No one doubts that it would have been easy for Hyatt to grant access — as the district court put it, it would have required only ‘the push of a button.’ But there is no evidence that the button was ever pushed, and, as we now explain, this gap in the record cannot be laid at Hyatt’s feet.”

At the 7th Circuit, the government argued in its responsive brief that the search-warrant affidavit authorizing the search of Hyatt’s phones stated that he was sending his files to a folder called “Share #2.”

“That got our attention, since such a name suggests at least an intent to distribute, if not actual distribution. But we then learned at oral argument that the affidavit had been sealed throughout the proceedings in the district court and that counsel for Hyatt learned of the ‘Share #2’ folder only when she read the government’s appellate brief,” Wood wrote. “The Share #2 folder itself is not in the record, nor is anything else about it (such as, for instance, information about whether it was ever made available to others).

“When there is no evidence in a record other than a conclusory statement in a (PSR) recommending the application of a guideline enhancement, we are hard pressed to say that the government has carried its burden of persuasion,” Wood continued. “In the present case, this is a problem that uniquely affects the distribution enhancement — the images themselves were proof enough of the four other enhancements that Hyatt wanted the court to discount under (18 U.S.C. § 3553(a)): sadistic behavior, prepubescent children, use of a computer, and more than 600 images. But there is not a hint of distribution in the record.”

Remanding to the district court, the 7th Circuit determined the vacated sentencing order was prejudicial.

“When all is said and done, we find too many problems with this sentence to allow it to stand. Even on plain-error review, we cannot accept a reading of the term ‘distribution’ in U.S.S.G. § 2G2.2 that equates it with ‘transportation,’” Wood concluded.

The case is United States of America v. Kenneth R. Hyatt, 21-1212.

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