§170 Relevant Conduct
(for Drug Relevant Conduct, see §260)
D.C. Circuit reverses because murder in Mexico did not qualify as racketeering activity. (170)(290) Defendant pleaded guilty to conspiracy to commit racketeering and accessory after the fact to the murder of an officer of the United States. All the events supporting defendant’s plea occurred in Mexico. At sentencing, the district court included as “relevant conduct,” an unrelated Mexico murder committed by defendant. The D.C. Circuit reversed, holding that to be considered as relevant conduct, the murder had to qualify as “racketeering activity.” Because the murder did not violate U.S. law, it could not constitute “racketeering activity.” U.S. v. Flores, __ F.3d __ (D.C. Cir. Jan. 4, 2019) No. 17-3090.
6th Circuit upholds reliance on coconspirators’ conduct in setting loss amount. (170)(219) Defendant participated in a scheme to defraud a school district by having a codefendant issue checks on behalf of the school district to shell companies. Defendant owned two of the shell companies, but in calculating the amount of loss for the offenses, the district court also relied on losses attributable to the codefendants. The Sixth Circuit rejected defendant’s claim that he never agreed to participate in his codefendants’ shell corporations. Instead, the court held, there was a single scheme to defraud the school district that relied on a single modus operandi and that required coordination among all the coconspirators. The court also relied on defendant’s knowledge of some of the other criminal activity and his participation in the scheme for two years. U.S. v. Donadeo, __ F.3d __ (6th Cir. Dec. 18. 2018) No. 17-4295.
6th Circuit upholds factual findings supporting loss determination. (170)(219) At defendant’s sentencing for fraud offenses rising from a scheme to defraud a school district, the district court held defendant responsible for his codefendants’ conduct. The district court found that defendant was not credible in stating that he did not know of his codefendants’ conduct, that the codefendants’ conduct was foreseeable to defendant, and that the presentence report accurately set forth the offense. The Sixth Circuit found these findings to be “less than optimal,” but sufficient to hold defendant accountable for his codefendants’ conduct. U.S. v. Donadeo, __ F.3d __ (6th Cir. Dec. 18. 2018) No. 17-4295.
6th Circuit says statute of limitations does not bar consideration of relevant conduct. (170) Over an eight-year period, defendant defrauded investors of $5 million. At sentencing for his fraud and tax evasion convictions, the district court used the full amount of losses to set defendant’s sentencing level. Defendant argued that he could not be held responsible for investors’ losses incurred more than five years prior to the end of the scheme because the conduct underlying those losses was outside the statute of limitations. The Sixth Circuit held that the district court could consider the full amount of loss as relevant conduct for sentencing purposes. U.S. v. Dyer, __ F.3d __ (6th Cir. Nov. 13, 2018) No. 17-6174.
4th Circuit finds drug conspiracy was relevant conduct for pharmacist’s structuring convictions. (170) (360) Defendant and his wife operated a pharmacy that supplied oxycodone pills to a drug trafficking operation. Defendant was convicted of structuring cash transactions to evade reporting requirements. The Fourth Circuit held that his participation in the prescription drug distribution conspiracy during the same time was “relevant conduct,” for his sentence for the structuring counts. Defendant’s convictions for discrete structuring acts on April 5, June 5, and June 6, 2014, were linked to his drug distribution conspiracy that had begun by August 2013 and that concluded in August 2014, with numerous transactions involving hundreds of thousands of units of oxycodone and millions of dollars in cash. U.S. v. Agyekum, 846 F.3d 744 (4th Cir. 2017).
6th Circuit finds rifle sold to undercover agent was relevant conduct to sale of pistol to felon and drug distribution. (170)(330) Defendant was convicted of selling a firearm to a convicted felon, and distribution of morphine. The felon was an informant working with an undercover agent, and during the same period defendant also sold a rifle to the agent. The Sixth Circuit held that the sale of the rifle to the agent was relevant conduct to his sale of the pistol and the morphine because they were part of the same course of conduct or common scheme or plan. The sale of the rifle was discussed and planned during the sale of the pistol; both involved defendant and the informant; and both took place at defendant’s residence, only two weeks apart. The connections between the sale of the rifle and the pills were even stronger. They were, at least in part, planned at the same time, the same parties were present at the sales, the same location was used, and the sales occurred contemporaneously. U.S. v. Henry, __ F.3d __ (6th Cir. Apr. 8, 2016) No. 15-5578.
7th Circuit reverses murder cross-reference because murder was not relevant conduct. (170)(240) A jury convicted defendant of conspiracy to distribute marijuana. Defendant’s PSR indicated that he and two others were suspected of murdering Edward Ewing while attempting to recover stolen cocaine and cash. The district court found that the Ewing murder was “drug-related activity” and applied §2D1.1(d)(1)’s murder cross-reference. The Seventh Circuit reversed, agreeing with defendant that the Ewing murder was not relevant conduct to his marijuana conspiracy. There was no evidence that the Ewing murder occurred during, in preparation for, or in the course of attempting to avoid detection for the marijuana conspiracy. Even if the murder was “drug-related activity,” it arose from the theft of cocaine, not marijuana. The district court erred to the extent that it found that the Ewing murder was relevant conduct under subsection (a)(1). The Ewing murder was also not relevant conduct under subsection (a)(2) because even if it was part of the same course of conduct as the marijuana conspiracy, §3D1.2(d) provides that murder cannot be grouped with other crimes. U.S. v. Taylor, __ F.3d __ (7th Cir. Feb. 24, 2016) No. 15-1236.
7th Circuit reverses for lack of finding that conduct was related to offenses of conviction. (170)(330)(460) Defendant was one of three armed men who robbed a bank. They were arrested over a month later after a high-speed chase. Based on the high-speed chase, the district court applied enhancements under §3C1.2 (reckless endangerment during flight) and §2K2.1(b)(6)(B) (use of a firearm “in connection with” another felony). The Seventh Circuit agreed with defendant that the relevant conduct guideline, §1B1.3(a) required that these enhancements be related to the offense of conviction, and the court erred by failing to make findings on this issue. The application notes to §2K2.1(b)(6)(B) refer directly to §1B1.3(a), making clear that the firearm in question must be “part of the same course of conduct or common scheme or plan” as the offense of conviction. The connection between §§1B1.3(a) and 3C1.2 was similarly undeniable. Here, the district court made no findings that would support the conclusion that the offenses of conviction, all of which stemmed from the robbery, were connected to the behavior underlying the two enhancements applied here. Applying the enhancements without such a finding was error. U.S. v. Seals, __ F.3d __ (7th Cir. Feb. 23, 2016) No. 15-1372.
9th Circuit reverses increase based on mere knowledge of related fraud. (170)(219) Defendant was the manager of a Florida telemarketing operation, and he knew about a California telemarketing operation that was bilking victims out of money using the same scheme as the Florida operation. Defendant did not benefit from the California operation. Defendant pleaded guilty to one count of mail fraud. At sentencing, the district court used the amount obtained from victims in both the Florida and California schemes to calculate defendant’s guidelines. The Ninth Circuit held that knowledge of another participant’s criminal acts in not enough to hold a defendant responsible for those acts and that under §1B1.3, defendant’s offense level should not have been calculated using the California scheme. U.S. v. Lloyd, __ F.3d __ (9th Cir. Dec. 4, 2015) No. 12-50499.
11th Circuit affirms increase for accomplice’s use of firearm in attempted robbery. (170)(224) Defendant was convicted of aiding and abetting an attempted armed robbery, but acquitted of aiding and abetting the use of a firearm in furtherance of a crime of violence. He challenged a five-level enhancement under §2B3.1(b)(2)(C) that was based on his accomplice Clinton’s brandishing of a firearm during the attempted robbery, and a two-level enhancement based under §2B3.1(b)(3)(A) because a victim of that robbery suffered bodily injury. The Eleventh Circuit upheld the enhancements. Defendant and Clinton jointly engaged in criminal activity: they attempted to rob the Walgreens store, with Clinton doing the actual robbing and defendant acting as the look-out. Clinton brandished a firearm while attempting to rob the store manager and the manager suffered bodily injury when Clinton pistol-whipped him. There was no question that these acts were done in furtherance of the jointly undertaken attempted robbery. Clinton’s conduct was reasonably foreseeable to defendant, because he knew that Clinton possessed the gun during the attempted robbery. U.S. v. Maddox, __ F.3d __ (11th Cir. Sept. 30, 2015) No. 14-15064.
11th Circuit allows consideration of robbery accomplice’s conduct. (170)(224)(470) Defendant was convicted of aiding and abetting an attempted armed robbery, but acquitted of aiding and abetting the use of a firearm in furtherance of a crime of violence. He received a five-level enhancement under §2B3.1(b)(2)(C) because his accomplice Clinton brandished a firearm during the attempted robbery, and a two-level enhancement under §2B3.1(b)(3)(A) because a victim suffered bodily injury. For the first time on appeal, defendant argued that the guidelines barred consideration of Clinton’s brandishing a firearm and causing bodily injury because §3D1.2(d) prohibited the grouping of defendant’s attempted robbery count, and therefore Clinton’s acts were not “relevant conduct” under §1B1.3(a)(2). The Eleventh Circuit held that §1B1.3(a)(1)(B) clearly permitted the district court to consider Clinton’s reasonably foreseeable acts. Section §1B1.3(a)(2) did not apply because robbery offenses are not “grouped” under §3D1.2(d). U.S. v. Maddox, __ F.3d __ (11th Cir. Sept. 30, 2015) No. 14-15064.
Commission emphasizes that conspirator is accountable only for scope of criminal activity he agreed to undertake. (170)(260) In determining whether a defendant is accountable for the conduct of others in a jointly undertaken activity under §1B1.3(a)(1)(B), the court applies a three-step analysis to (1) identify the scope of the jointly undertaken criminal activity; (2) determine whether the conduct of others in the jointly undertaken criminal activity was in furtherance of that criminal activity; and (3) determine whether the conduct of others was reasonably foreseeable in connection with that criminal activity. Prior to this amendment, the “scope” element of the three-step analysis was identified in the commentary but was not included in the text of §1B1.3 itself. This amendment makes it clear that a defendant is only accountable for the conduct of others in a jointly undertaken criminal activity if the conduct meets all three criteria of the three-step analysis. The Commission said this amendment is not intended as a substantive change. Amendment 790, effective November 1, 2015.
Commission emphasizes that conspirator is accountable only for scope of criminal activity he agreed to undertake. (170)(260) In determining whether a defendant is accountable for the conduct of others in a jointly undertaken activity under §1B1.3(a)(1)(B), the court applies a three-step analysis to (1) identify the scope of the jointly undertaken criminal activity; (2) determine whether the conduct of others in the jointly undertaken criminal activity was in furtherance of that criminal activity; and (3) determine whether the conduct of others was reasonably foreseeable in connection with that criminal activity. Prior to this amendment, the “scope” element of the three-step analysis was identified in the commentary but was not included in the text of §1B1.3 itself. This amendment makes it clear that a defendant is only accountable for the conduct of others in a jointly undertaken criminal activity if the conduct meets all three criteria of the three-step analysis. The Commission said this amendment is not intended as a substantive change. Proposed Amendment 1, effective November 1, 2015.
7th Circuit includes prior forgery conviction in criminal history, not relevant conduct. (170)(504) Based on a series of vehicle purchases made in Milwaukee in January 2013 with counterfeit money, defendant pled guilty to uttering counterfeit obligations or securities. At the time of his federal arraignment, defendant was serving a 90-day state sentence for forgery, stemming from an August 2013 arrest in Green Bay, Wisconsin. Defendant had been printing counterfeit currency to purchase large amounts of marijuana. The district court included the state forgery sentence in his criminal history, rather than considering it as relevant conduct. The Seventh Circuit held that the district court’s failure to consider his state forgery conviction as relevant conduct under §1B1.3 did not constitute plain error. The similarities between the instant offense and the state forgery conviction were minimal. The fact that both offenses involved counterfeit currency did not, by itself, demonstrate that they were part of the same course of conduct. The prior conduct took place over 100 miles away from the conduct underlying the instant offense, was relatively remote temporally, and involved entirely different victims, means, and purposes. U.S. v. Butler, __ F.3d __ (7th Cir. Jan. 15, 2015) No. 14-2770.
11th Circuit holds defendant accountable for jointly undertaken fraud activity. (170)(218) Defendant participated in a scheme involving the unauthorized use of personal identifying information to claim fraudulent tax refunds, which were deposited onto debit cards opened in the names of identity theft victims. He challenged enhancements based on the conspiracy’s total loss and the number of victims, arguing that his involvement in the conspiracy was limited. The Eleventh Circuit found no error, ruling that the acts attributed to defendant were in furtherance of jointly undertaken criminal activity and were reasonably foreseeable by defendant. At least 59 fraudulent returns, totaling approximately $200,000 in requested refunds, were submitted from the address listed on defendant’s driver’s license. Several returns were also sent to this address. When defendant moved, returns continued to be filed from his new address. Defendant also was captured by surveillance cameras on several occasions using cards connected with the scheme, one of which was in the name of an individual whose personal information was found in a co-conspirator’s vehicle. This evidence suggested that defendant agreed to participate fully in the broader scheme, rather than to engage in only a small handful of withdrawals. U.S. v. Baldwin, __ F.3d __ (11th Cir. Dec. 17, 2014) No. 13-12973.
Supreme Court allows sentence for crack cocaine even though jury found conspiracy to sell cocaine or crack. (170) Petitioners were charged with conspiring to sell mixtures containing cocaine and cocaine base. The jury was instructed that the government had to prove that the conspiracy involved measurable amounts of “cocaine or cocaine base,” and it returned a general guilty verdict. The judge found that each petitioner’s conduct involved both cocaine and crack and sentenced based on the crack guidelines. On appeal, for the first time, petitioners argued that the word “or” in the jury instruction required the judge to assume that the conspiracy involved only cocaine. In a unanimous opinion written by Justice Breyer, the Supreme Court affirmed the crack sentence, holding that under the guidelines, the judge, not the jury determines the kind and quantity of controlled substances. Moreover, even if the jury had found the substance was cocaine, the “relevant conduct” section of the guidelines, 1B1.3, requires the judge to consider all drugs that are “part of the same course of conduct or common scheme or plan as the offense of conviction.” Petitioners’ argument might have made a difference if the guideline sentence for crack had exceeded the statutory maximum for powder cocaine, but the sentences here were within the statutory limits for powder cocaine. Edwards v. U.S., 523 U.S. 511, 118 S.Ct. 1475 (1998).
Supreme Court finds no double jeopardy in prosecution for drugs included as relevant conduct in earlier sentence. (170) Defendant plead guilty to attempted possession of 1,000 pounds of marijuana. At sentencing, the district court found that 1,091 kilograms of cocaine were “relevant conduct” under USSG §1B1.3 and sentenced defendant for the cocaine as well as the marijuana. Several months later, defendant was indicted for the cocaine offenses, and he moved to dismiss on double jeopardy grounds, In an 8-1 opinion written by Justice O’Connor, the Supreme Court found no double jeopardy, ruling that the fact that conduct is considered as relevant conduct does not constitute “punishment” for that conduct. Justices Scalia and Thomas concurred, and Justice Stevens dissented. The majority noted that U.S.S.G. § 5G1.3(b) lessens the impact of its ruling by requiring a concurrent sentence if the defendant is serving an undischarged term of imprisonment resulting from offenses that have been fully taken into account as relevant conduct. This reduces the possibility that two separate prosecutions will grossly increase a defendant’s sentence. Witte v. U.S., 515 U.S. 389, 115 S.Ct. 2199 (1995).
1st Circuit examines relevant conduct requirements in fraud conspiracy. (170) Defendant and others were involved in the construction and sales of a real estate development. When sales began to slacken, they conspired to defraud lenders by secretly giving money, secured by late-filed second mortgages, to any purchaser who lacked the minimum down payment to purchase a house. In holding defendant responsible under section 2F1.1 for all the losses caused by the conspiracy, the 1st Circuit examined the standards for determining relevant conduct under section 1B1.3(a)(1)(B). The sentencing court must determine what acts and omissions of others were in furtherance of the defendant’s jointly undertaken activity, and to what extent such acts and omissions were reasonably foreseeable to defendant. Here, defendant helped found the conspiracy, and played an integral part in its operation. He served as the titular head of the firm that oversaw the construction, marketing, financing and sale of every home. Any reasonable person in defendant’s position, at the time of his agreement, would have recognized that 90 or more homes might be sold in this corrupt fashion. U.S. v. Lacroix, 28 F.3d 223 (1st Cir. 1994).
1st Circuit finds that stolen computer boards were part of same course of conduct. (170) Defendant, while employed at a computer company, sold 241 computer boards without invoices or other documentary evidence. The government was able to trace 112 of the boards to the employer’s stockroom. Defendant only admitted knowing that 29 of the boards were stolen, and challenged the inclusion of the remaining 83 boards as relevant conduct. The 1st Circuit concluded that the district court could have reasonably found the government proved by a preponderance of the evidence that the 83 boards were stolen and they were part of the same course of conduct or common scheme or plan as the offense of conviction. All 112 boards were taken from the same plant where defendant worked, and defendant had access to the storerooms where they were stored. Defendant sold these boards to the same company without providing with any receipts or other documentation. U.S. v. Skrodzki, 9 F.3d 198 (1st Cir. 1993).
1st Circuit holds defendant liable only for losses caused by co-conspirators’ reasonably foreseeable acts. (170) Defendant was involved in a conspiracy which made 124 fraudulent insurance claims amounting to $620,000. Defendant joined the conspiracy 18 months after it began, but the district court enhanced his base offense level under section 2F1.1 based on the total $620,000 loss. The 1st Circuit held that defendant could be held accountable at sentencing only for those losses caused by the reasonably foreseeable actions of his co-conspirators. The government only established defendant’s involvement in 10 of the 124 fraudulent claims; the district court never discussed whether the additional 114 fraudulent claims were reasonably foreseeable to defendant. Some of the co-conspirator acts presumably occurred before defendant joined the conspiracy. By definition, acts that occurred before a defendant enters a conspiracy cannot be foreseeable. U.S. v. Balogun, 989 F.2d 20 (1st Cir. 1993).
1st Circuit says amendment permitting consideration of relevant conduct in role in offense was mere clarification. (170) The Introductory Commentary to Chapter 3 of the guidelines in effect on the date defendant was sentenced provided that a defendant’s role in the offense is to be based upon all relevant conduct. This provision was added to the guidelines by Amendment 345, which the sentencing commission explained was a “clarification” of the law. Defendant contended that Amendment 345 was a substantive change, and that it violated the ex post facto clause to determine his role in the offense based upon other relevant conduct. The 1st Circuit agreed that the law prior to the amendment was unclear, and that the Sentencing Commission could not, merely by labeling an amendment a clarification, change a meaning retroactively. Nonetheless, the court affirmed the district court’s determination. U.S. v. Ruiz-Batista, 956 F.2d 351 (1st Cir. 1992).
1st Circuit finds consideration of relevant conduct and past conduct of defendant was proper. (170) Guideline § 1B1.3 permits consideration of information which sentencing courts have traditionally relied upon. Accordingly the 1st Circuit there was no error in the sentencing court’s consideration of the fact that on other occasions, various people had paid the defendant to keep cocaine on the ship for him. U.S. v. Wright, 873 F.2d 437 (1st Cir. 1989).
1st Circuit finds consideration of relevant conduct and past conduct of defendant was proper. (170) Guideline § 1B1.3 permits consideration of information upon which sentencing courts have traditionally relied. Accordingly the 1st Circuit found no error in the sentencing court’s consideration of the fact that on other occasions, various people had paid the defendant to keep cocaine on the ship for him. U.S. v. Wright, 873 F.2d 437 (1st Cir. 1989).
2nd Circuit remands for findings on scope of conspiracy and foreseeability of co-conspirator’s conduct. (170) Defendant, an American citizen, was convicted of fraud conspiracy charges stemming from his involvement in a scheme that defrauded American victims through a lottery telemarketing scheme operated out of three so-called “boiler rooms” at different locations in Israel. The district court sentenced him to 150 months and restitution of $8.2 million, a sum based on the loss amount and the number of victims swindled by workers in all three boiler rooms. The Second Circuit remanded for resentencing, finding that the court failed to make particularized findings regarding the scope of the activity or the foreseeability of the co-conspirators’ conduct to defendant. U.S. v. Getto, 729 F.3d 221 (2d Cir. 2013).
2nd Circuit holds that murder was relevant conduct for racketeering defendant. (170) Defendant, a member of a New York crime family, was convicted of racketeering and related charges. At sentencing, the district court found by a preponderance of the evidence that defendant was also involved in the murder of Sciascia, and that the murder was relevant conduct, even though the jury did not convict defendant of the murder. Defendant argued that the murder was not relevant conduct because it was not related to a conspiratorial object of which he was convicted. According to defendant, he was only convicted of racketeering acts involved in generating money for the family, and not racketeering acts that related to personal grievances of the family. He relied on § 1B1.2(d), which instructs the sentencing court, when faced with a conviction for a multi-object conspiracy, to treat it as several convictions for single-object conspiracies. The Second Circuit held that the district court properly considered the murder to be relevant conduct. Section 1B1.2 was not applicable because a RICO conspiracy is not a multi-object conspiracy. It is a single-object conspiracy, with the object being to engage in racketeering. Predicate racketeering acts are not conspiratorial objects. U.S. v. Massino, 546 F.3d 123 (2d Cir. 2008).
2nd Circuit holds activity need not be a federal crime to be relevant conduct. (170) Defendant operated a company that restored aircraft and bought and sold aircraft parts. He was convicted of transporting stolen aircraft parts in interstate commerce. The district court found that defendant’s possession of additional stolen parts was relevant conduct. Defendant argued that the stolen property he possessed came from a local business and federal jurisdiction was not implicated until defendant made his interstate sales. Thus, he contended that his possession of stolen but un-transported property could not be considered relevant conduct at sentencing. The Second Circuit held that a federal district court may consider any relevant conduct when sentencing a defendant, whether or not the conduct is a federal crime. In the context of § 1B1.3(a), jurisdictional considerations are not relevant to a defendant’s criminal responsibility. U.S. v. Martin, 157 F.3d 46 (2d Cir. 1998).
2nd Circuit rules relevant conduct need only be proven by a preponderance. (170) Defendants pled guilty to racketeering charges. The district court took into account as relevant conduct three additional kidnappings. Defendants argued that the relevant conduct should have been proved by a higher standard than a preponderance of the evidence. The Second Circuit held that the clear and convincing standard was not required. First, the Second Circuit has never adopted U.S. v. Kikumura, 918 F.2d 1084 (3d Cir. 1990), which requires use of the clear and convincing standard where the relevant conduct is “a tail which wags the dog of the substantive offense.” Moreover, the facts here were markedly different the 12‑fold, 330‑month increase in Kikumura. The relevant conduct here raised one defendant’s offense level from 25 to 33 and the corresponding range from 57-71 to 135-168 months. The second defendant’s offense level was raised from 25 to 33, with the corresponding range raised from 63-78 months to 151-188 months. The preponderance standard is sufficient for such an increase. Note 5 to § 1B1.2(d) does not require relevant conduct be proven beyond a reasonable doubt. U.S. v. Ruggiero, 100 F.3d 284 (2d Cir. 1996).
2nd Circuit says sentence based on previously considered relevant conduct did not violate double jeopardy. (170) Defendant was prosecuted twice for conduct that was part of a single pattern of fraudulent activity. He argued that his second sentence violated the double jeopardy clause because it was based, in part, on losses that were used as relevant conduct to calculate his first sentence. The Second Circuit disagreed based on Witte v. U.S., 515 U.S. 389 (1995). It does not violate the double jeopardy clause to prosecute a defendant for activity that has previously been considered as relevant conduct. A defendant is not “punished” when criminal activity is taken into account as relevant conduct under the guidelines U.S. v. McCormick, 58 F.3d 874 (2d Cir. 1995).
2nd Circuit says court may have confused “same course of conduct” with “common scheme.” (170) Defendant conspired to possess and use forged money orders. The district court included in his criminal history a state conviction for transporting stolen securities, finding it was not part of the instant offense under § 4A1.2(a)(1) because it was not part of the “same scheme.” The Second Circuit remanded, because it appeared the district court conflated § 1B1.3(a)(2)’s references to “same course of conduct” and “common scheme or plan,” which are not identical concepts. Acts are part of the same course of conduct if the defendant engaged in a repeated pattern of similar criminal acts, even if they were not part of a single scheme or plan. A repeated series of similar acts are not part of a common scheme or plan unless there is a mental element linking them. If the mental element is present, the acts need not be similar. Here, some of the facts would have supported a finding that the conduct underlying the state conviction was pursuant to a common scheme or part of the same course of conduct as the instant offense. U.S. v. Thomas, 54 F.3d 73 (2d Cir. 1995).
2nd Circuit says defendant not responsible for unforeseeable losses or losses after he withdrew from conspiracy. (170) Two conspirators fraudulently obtained equipment that enabled them to build a phony ATM machine. Defendant then joined the conspiracy, and assisted in installing the phony ATM at a mall. They used information from the phony ATM to create counterfeit ATM cards. From April 27 to May 18 they used the counterfeit cards to withdraw $107,000. Defendant claimed that on May 14, he told his conspirators that he no longer wished to be a part of the conspiracy. Nonetheless, the district court held him accountable under § 2F1.1 for the value of the stolen equipment ($100,000) plus the full $107,000 withdrawn with the counterfeit ATM cards. The Second Circuit remanded, holding that defendant was responsible for the stolen equipment only if the theft was in furtherance of defendant’s jointly undertaken criminal activity and was reasonably foreseeable. The district court did not make findings on these issues. In addition, if, as defendant claimed, he told the conspirators that he no longer wished to be a part of the conspiracy, then he withdrew from the conspiracy and was not responsible for losses that occurred after his withdrawal. U.S. v. Greenfield, 44 F.3d 1141 (2d Cir. 1995).
2nd Circuit holds defendants accountable for stolen goods they intended to purchase. (170) Defendants were convicted of conspiracy to receive and resell stolen goods, primarily silver and gold. The district court included in its offense calculation under section 2B1.1(b)(1) the value of a planned purchase of 5600 pounds of silver from a government agent. The 2nd Circuit affirmed. Agreement for the purchase had been reached, and there were extensive negotiations concerning the method and timing of delivery. Defendants were not entitled to a reduction under § 2X1.1(b)(2) for a conspiracy where the substantive offense is not committed. The reduction is appropriate only where the arrest occurs well before any of the acts necessary for the substantive offense are completed. These defendants undoubtedly had completed all the acts they believed necessary to receive the goods. Finally, even if sentencing entrapment is a valid claim, that defense was inapplicable here, since defendants were predisposed to engage in further transactions. U.S. v. Rosa, 11 F.3d 315 (2nd Cir. 1993).
2nd Circuit bases sentence on actual drugs carried by defendant, rather than lesser amount he believed he carried. (170) The district court based defendant’s sentence on the 850 grams of heroin he possessed, rather than the 400 grams he believed he possessed. The 2nd Circuit held that this was proper. The “relevant conduct” section, §1B1.3(a), requires a defendant to be held accountable for all quantities of a controlled substance with which he was directly involved. The court suggested that in an unusual situation a gap between belief and actuality might be so great as to make the guidelines unfair and thus merit a downward departure or possibly raise a constitutional issue. But this was not such a situation. U.S. v. Imariagbe, 999 F.2d 706 (2nd Cir. 1993).
2nd Circuit notes distinction between “course of conduct” and “common scheme.” (170) In determining whether defendant was responsible for drugs involved in uncharged transactions, the 2nd Circuit noted that the “same course of conduct” and “common scheme” concepts are distinct. The former is broader because “same course of conduct” does not require that a connection be established among the drug trafficking occasions in terms of participants or overall plan. A sentencing court need only look to see if the defendant has been engaged over time in an identifiable pattern of criminal conduct. It should examine factors such as the nature of defendant’s acts and how frequently the same sorts of acts have been repeated. In contrast, a “common scheme” requires a connection among participants and occasions. U.S. v. Shonubi, 998 F.2d 84 (2nd Cir. 1993).
2nd Circuit says driver of getaway car could not foresee armed robber’s prior use of gun. (170) Defendant drove an associate to a bank and waited outside. The associate robbed the bank at gunpoint, using a gun to strike a bank employee. When the employee attempted to follow the associate from the bank, the associate pointed his gun at him. Defendant and the associate then fled in the car. The 2nd Circuit rejected a four level enhancement under §2B3.1(b)(2)(B) based on the associate’s use of the gun in the bank. Before the associate came out of the bank, defendant did not know he was going to commit a bank robbery. It was not “reasonably foreseeable” to defendant when he decided to act as a getaway driver that the associate had already used the gun inside the bank. However, the court held that defendant should be held accountable for the associate’s brandishing the gun as he entered the car during the escape phase, and thus should receive a three level enhancement under §2B3.1(b)(2)(C). U.S. v. James, 998 F.2d 74 (2nd Cir. 1993).
2nd Circuit includes unforeseeable amounts because defendant aided and abetted the offense. (170) Defendant argued that his offense level should not have been enhanced 15 levels based on the $10 million scope of the counterfeiting conspiracy with which he was involved. He denied that the scope of the conspiracy was “reasonably foreseeable.” The 2nd Circuit disagreed, but also concluded that the quantity was properly attributable to defendant even if its scope had not been reasonably foreseeable. Relying on an illustration in the commentary to 1B1.3(a)(1), the court concluded that defendant had aided and abetted the offense, and therefore was responsible for the quantity irrespective of its foreseeability. U.S. v. Boothe, 994 F.2d 63 (2nd Cir. 1993).
2nd Circuit rules that erroneous downward departure based on sharing of illegal profits was harmless error. (170) The district court departed downward in part because the proceeds of defendant’s conspiracy were divided with another defendant. The 2nd Circuit rejected this as a ground for a downward departure, but found the error to be harmless. The commentary to guideline section 1B1.3 makes it clear that a defendant is accountable for the entire amount of money stolen during concerted criminal activity. Because the commission specifically addressed the issue of divided proceeds and decided that the entire amount should be included as part of each defendant’s relevant conduct, it could not be said that defendant’s splitting of proceeds with her co-conspirator amounted to a circumstance not adequately taken into consideration by the sentencing commission. U.S. v. Johnson, 964 F.2d 124 (2nd Cir. 1992).
2nd Circuit permits district court to determine whether to apply amendments adopted during appeal. (170) After defendant was sentenced and while his appeal was pending, the commentary to section 1B1.3 was amended to provide that conduct “associated with” a prior sentence should not be considered relevant conduct. This amendment would have reduced the quantity of drugs for which defendant was held accountable. The 2nd Circuit remanded for the district court to determine whether it had the authority to apply the amendment retroactively, and if it did, whether it wished to exercise its discretion to do so. In 18 U.S.C. section 3582(c)(2), Congress conferred authority on a sentencing court to reduce the term of imprisonment for a defendant who has been sentenced to a term of imprisonment based on a sentencing range that has subsequently been lowered by the Sentencing Commission. By authorizing, but not requiring, sentencing courts to reduce sentences in light of guideline revisions, Congress expressed a preference for discretionary district court action in response to amendments, rather than for mandatory appellate court application of all post-sentence amendments to pending appeals. U.S. v. Colon, 961 F.2d 41 (2nd Cir. 1992).
2nd Circuit rejects consideration of foreign crime as “relevant conduct.” (170) Defendant was convicted of importing one kilogram of heroin into the United States from Pakistan. In calculating defendant’s base offense level, the district court included three kilograms of heroin that defendant and others delivered from Pakistan to Cairo, Egypt. The 2nd Circuit ruled that although the Cairo transaction was part of the same course of conduct as the offense of conviction, it should not have been included in the determination of defendant’s base offense level because it was not a crime against the United States. Guideline section 1B1.3 does not explicitly address the issue of foreign crimes and activities. However, under guideline sections 4A1.2(n) and 4A1.3(a), foreign sentences may not be used in computing a defendant’s criminal history category, but may be used for upward departures from the otherwise applicable range. Moreover, considering foreign crimes would burden courts by requiring them to distinguish between activities that violate both domestic and foreign law and those which violate only domestic or only foreign law. U.S. v. Azeem, 946 F.2d 13 (2nd Cir. 1991).
2nd Circuit holds that applicable guidelines section must be based upon offense of conviction. (165) Defendant pled guilty to aggravated assault, but the district court determined that defendant had acted with a “depraved indifference to human life,” and applied the guideline section for assault with intent to commit murder. The 2nd Circuit reversed, holding that the applicable guideline section must be determined with reference to the offense of conviction, not to defendant’s other conduct. To sentence defendant on the basis of another guideline section, the parties should have sought a stipulation to the more serious offense pursuant to guideline § 1B1.2(a). Defendant’s agreement to describe his assaults at the time of his plea did not constitute the necessary stipulation, but rather an agreement to make available to the court information concerning the assaults for the purpose of evaluating the specific offense characteristics and evidence of relevant conduct. U.S. v. McCall, 915 F.2d 811 (2nd Cir. 1990).
2nd Circuit holds that whether conduct is relevant to the offense of conviction is reviewed for clear error. (170) Agreeing with the 1st, 6th and 8th Circuits, the 2nd Circuit held that “the determination that one transaction is part of the same course of conduct or part of a common scheme or plan as the offense of conviction necessitates an evaluation of the facts presented to the district court.” Since the requisite analysis is “essentially factual,” and since “the district court’s resolution of the question raises no important, widely applicable issues of law,” the court reviewed the district court’s determination for clear error. U.S. v. Vazzano, 906 F.2d 879 (2nd Cir. 1990).
2nd Circuit holds that defendant’s instructions to other persons allowed their conduct to be used to set his offense level. (170) Defendant was convicted of bringing butane on an airplane in violation of 49 U.S.C. § 809(a) & (b). He claimed that while his codefendants actually handled the butane, he himself did not. The 2nd Circuit held that he was properly sentenced for his codefendants’ activities because he instructed them to freebase cocaine on the airplane and was therefore liable for their actions. His activities were sufficient to subject him to relevant conduct provisions of § 1B1.3(a)(3). U.S. v. Moskowitz, 888 F.2d 223 (2nd Cir. 1989).
2nd Circuit holds relevant conduct need only be proven by a preponderance of the evidence. (170) The 2nd Circuit held that the preponderance of the evidence standard satisfies the requisite due process in determining relevant conduct under § 1B1.3 of the guidelines. To impose a higher standard would turn sentencing hearings into “second trials.” Due process is satisfied by affording the defendant the opportunity to contest the factors relied upon by the sentencing court. U.S. v. Guerra, 888 F.2d 247 (2nd Cir. 1989).
3rd Circuit says cross-referenced firearm conduct must be relevant conduct. (170) Defendant pled guilty to being a felon in possession of a firearm. The district court applied the cross-reference in § 2K2.1(c)(1) for using or possessing the firearm in connection with another felony offense—an extortion defendant committed 27 months earlier. The Third Circuit held that the conduct that can be cross-referenced in § 2K2.1(c)(1) is limited to relevant conduct under § 1B1.3. The extortion offense did not qualify as relevant conduct under § 1B1.3(a)(2) because the offenses were not part of the same course of conduct or common scheme. The 27-month time interval between defendant’s extortion offense and the firearm offense was substantial, and the similarity between the two offenses was very weak. Moreover, the regularity inquiry was not satisfied on these facts. The court never explicitly found that defendant possessed the gun throughout the 27-month period, and even if defendant’s possession of the gun was continuous, that would not be sufficient to automatically make two offenses relevant conduct. U.S. v. Kulick, 629 F.3d 165 (3d Cir. 2010).
3rd Circuit holds that checks converted by another “check casher” were relevant conduct. (170) Defendant participated in a stolen check scheme led by Jeffress, who provided the “check cashers” (defendant and three others), with stolen Treasury checks, as well as fake identification that matched the names on the checks, and drove them to check cashing stores. The district court included in its loss calculation the number and dollar amount of checks converted by defendant and by Lynn, another check casher. Defendant argued that he was operating parallel to, but independent of the other check cashers. The Third Circuit affirmed, finding that the district court could reasonably infer that there was an implicit agreement between defendant and Lynn to cash stolen checks for Jeffress. Defendant and Lynn knew each other, defendant knew Lynn was cashing stolen checks for Jeffress, and they were in the same check-cashing store at the same time on two occasions. Since Jeffress drove the check cashers to and from the cashing locations, an inference could be drawn that defendant and Lynn came and went to the location together. The district court did not clearly err in finding that defendant and Lynn were engaged in joint criminal activity. U.S. v. Robinson, 603 F.3d 230 (3d Cir. 2010).
3rd Circuit affirms enhancement for brandishing even though co-conspirator had no weapon. (170) Defendant and two co-conspirators robbed a bank. While in the bank, one co-conspirator pretended she had a gun in her hand beneath a concealing towel. The 3rd Circuit affirmed an enhancement under section 2B3.1(b)(2)(C) based on the co-conspirator’s brandishing a dangerous weapon, even though the co-conspirator did not actually possess a weapon. Defendant was accountable for his co-conspirator’s brandishing of the “gun” since it was in furtherance of the jointly undertaken robbery and was reasonably foreseeable. Note 2 to section 2B3.1 states that the enhancement applies when an object that appeared to be a dangerous weapon was brandished. The bank employees testified that they believed the towel concealed a gun. The Commission’s commentary is controlling unless it contradicts the guideline text. Judge Fullam dissented. U.S. v. Dixon, 982 F.2d 116 (3rd Cir. 1992).
3rd Circuit says court can consider only offense of conviction in making role adjustments for offenses prior to November 1, 1990. (170) Following several other circuits, the 3rd Circuit held that for offenses committed prior to November 1, 1990, a district court may not consider all relevant conduct in determining a defendant’s role in the offense. Rather, a court may consider only the conduct comprising the offense of conviction and any conduct in furtherance of the offense of conviction. For offenses committed after November 1, 1990, a court should consider all relevant conduct under guideline § 1B1.3. In this case, the finding that defendant supervised criminal activity involving five or more participants was clearly erroneous, since it was based on relevant conduct unrelated to the offense of conviction. U.S. v. Murillo, 933 F.2d 195 (3rd Cir. 1991).
4th Circuit approves cross-reference for non-groupable firearms offense. (170) Defendant was convicted of illegal possession of a firearm. Because he had used the firearm on the day of his arrest to shoot another person, the district court used the cross-reference in § 2K2.1(c) to apply the attempted second-degree murder guideline. The relevant conduct guideline, § 1B1.3(a) provides that cross-references shall be determined on the basis of several listed conditions. Defendant argued that all four subsections of § 1B1.3(a) must apply to sustain a cross-reference. Specifically, he argued that because attempted second-degree murder was a non-groupable offense, it was excluded from the relevant conduct guideline by § 1B1.3(a)(2). The Fourth Circuit disagreed, ruling that § 1B1.3(a) should be read disjunctively. A cross-referenced offense may satisfy either subsection (a)(1) or (a)(2) of the relevant conduct guideline, and subsections (a)(3) and (a)(4) simply supplement the two previous subsections. Because the attempted murder occurred on the same day with the same illegally-possessed firearm, this non-groupable offense only needed to satisfy subsection (a)(1). U.S. v. Ashford, 718 F.3d 377 (4th Cir. 2013).
4th Circuit rejects use of murder cross-reference where neither conviction nor cross-referenced offense was groupable. (170) Defendant was convicted of being a felon in possession of a firearm based on an incident with his girlfriend. However, the bulk of his sentencing hearing was devoted to testimony about a home invasion robbery and murder that occurred one week after the offense of conviction. The district court found that the murder was relevant conduct to the firearm offense, and applied the cross-reference in § 2K2.1(c)(1) to the murder guideline, § 2A1.1. The Fourth Circuit found sufficient evidence that defendant committed the murder. However, the murder was not relevant conduct under § 1B1.3(a)(2), and thus did not support application of the § 2K2.1(c)(1) cross-reference. The relevant conduct guideline applies where the offenses would require grouping of multiple counts under § 3D1.2. Although there is a circuit split on this issue, the panel held that subsection (a)(2) is applicable only when both the offense of conviction and the relevant conduct offense are capable of grouping. U.S. v. Horton, 693 F.3d 463 (4th Cir. 2012).
4th Circuit holds that relevant conduct need not be proved at trial. (170) At defendant’s trial for conspiracy to distribute cocaine, the government argued that defendant’s offense involved more than five kilograms, but the jury by special verdict form found that the offense involved between 500 grams and five kilograms. At sentencing, the government sought to present evidence that defendant’s offense involved between 90 and 100 kilograms of cocaine. Defendant argued that evidence that the government presented at trial and the jury’s verdict foreclosed the government from presenting evidence that defendant’s offense involved a greater quantity than that found by the jury. The Fourth Circuit held that the government need not present its relevant conduct evidence at trial and could establish defendant’s offense level at sentencing through evidence that had not been presented at trial. U.S. v. Young, 609 F.3d 348 (4th Cir. 2010).
4th Circuit says court cannot ignore relevant conduct in order to achieve sentence it deems proper. (170) Defendant was convicted of 24 counts of procuring the preparation of tax returns containing false statements. The PSR noted that the offenses of conviction involved losses of $75,814. It then estimated that the government suffered additional losses of $199,017 from 63 tax returns prepared by defendant that did not result in prosecution. Defendant objected to the inclusion of the non-indictment losses in the calculation of tax loss. The government disagreed with defendant’s objection, and offered to introduce evidence in support of its position. The district court agreed with defendant, finding that a tax loss of $75,814 resulted in a sufficient sentence. The Fourth Circuit reversed, since a court has no discretion to disregard relevant conduct in order to achieve the sentence it considers appropriate. The court made no inquiry into the adequacy of the government’s proffers. Instead, the ruling reflected the court’s personal assessment of what loss amount would result in an appropriate sentence, without regard to the sentencing guidelines. U.S. v. Hayes, 322 F.3d 792 (4th Cir. 2003).
4th Circuit holds that relevant conduct under guidelines must be criminal conduct. (170) Defendant pled guilty to violating the Lacey Act, 16 U.S.C. §§ 3372(a)(2)(A), 3373(d)(1), by selling or offering to sell black bear gall bladders (“galls”) in Virginia, in violation of Virginia law. Defendant argued that the district court erred in including as relevant conduct defendant’s sale of 118 galls to an undercover agent because that sale occurred in West Virginia, where the sale of galls is legal. The Fourth Circuit held that relevant conduct under the guidelines must be criminal conduct. “If conduct which is not illegal may be relevant conduct because it is ‘not benign,’ this approach would involve sentencing courts in the impossibly subjective task of determining the relative benignness’ of various legally permissible acts, and ‘would allow individuals to be punished … for activity which is not prohibited by law but merely morally distasteful or viewed as simply wrong by the sentencing court.’“ Defendant’s sale of the 118 galls did not violate Virginia law because it occurred outside the boundaries of Virginia jurisdiction. Defendant’s telephone offer to the agent in Virginia did not violate Virginia law, because defendant did not agree to make the sale until the agent agreed to travel to West Virginia to pick up the galls. Because Virginia law was not violated by this sale, the 118 galls could not be included as relevant conduct. U.S. v. Dove, 247 F.3d 152 (4th Cir. 2001).
4th Circuit considers as relevant conduct drug sale defendant made after indictment. (170) After defendant’s indictment on drug charges, he was released and sold more drugs to a government informant. This later drug sale was considered relevant conduct at sentencing under § 1B1.3. Defendant argued that the informant violated his 6th Amendment right to counsel by contacting him and purchasing drugs after he had been indicted. The 4th Circuit found no violation, since the evidence related to new criminal activity, and therefore no grounds to exclude the relevant conduct. The post-indictment transaction was clearly relevant conduct — the nature of the offenses were the same and defendant played the same role in both offenses. It is not inconsistent to hold that the post-indictment offense was not “closely related” to the charged offense for 6th Amendment purposes, but constituted the “same course of conduct” for relevant conduct purposes. U.S. v. Kidd, 12 F.3d 30 (4th Cir. 1993).
4th Circuit says there is no right to information about relevant conduct prior to trial. (170) The district court attributed 67 grams of cocaine base to defendant as relevant conduct. The 4th Circuit rejected defendant’s claim that he was deprived of effective assistance of counsel when the district court denied his pretrial motion to compel the government to disclose the quantity of cocaine it intended to attribute to him at sentencing. Defendant was informed of the maximum sentence available for each of the two counts for which he was convicted. He was entitled to no more information. A defendant has no right under the guidelines or the federal rules of criminal procedure to receive information about the guideline range prior to trial. U.S. v. Williams, 977 F.2d 866 (4th Cir. 1992).
4th Circuit applies aggravated assault guideline to inmate who threw chair at corrections officers. (170) The jury convicted defendant of using a deadly weapon during a prison riot and assaulting a correctional officer, based upon defendant’s act of throwing a chair at the officer. He contended that the court erred in sentencing him under guideline § 2A2.2 because his conduct did not amount to aggravated assault. In the alternative, he argued that it was error to increase his offense level under § 2A2.2(b)(3)(A) because his assault did not cause bodily injury. The 4th Circuit rejected the arguments. Even if the chair defendant threw did not cause a specific injury, defendant participated in and aided a riot in which assaults that caused bodily injuries occurred. The defendant was accountable for these injuries as relevant conduct under § 1B1.3. U.S. v. Bassil, 932 F.2d 342 (4th Cir. 1991).
4th Circuit holds statute of limitations does not bar consideration of prior fraudulent acts. (170) Defendant contended that his fraudulent conduct in 1982 and 1983 could not be considered as relevant conduct because the statute of limitations bars punishment for these offenses. The 4th Circuit rejected this contention, finding that the statute of limitations does not deal with the question of whether a court may consider uncharged conduct when fashioning an appropriate sentence. The guidelines expressly provide for the consideration of all prior relevant conduct at sentencing. To the extent this conflicts with the statute of limitations, the statute of limitations begins by stating that “[e]xcept as otherwise expressly provided by law.” U.S. v. Turner, 925 F.2d 1458 (4th Cir. 1991).
4th Circuit determines role based on relevant conduct, not just offense of conviction. (170) The 4th Circuit, disagreeing with several other Circuits, held that defendant’s role determination was to be based upon his role in the entirety of his relevant conduct, not solely on his role in the offense of conviction. A court should look beyond the count of conviction when considering adjusting his sentence based on his role in the offense, and consider all relevant conduct. Thus defendant’s sentence was properly adjusted for his leadership role, even though he was not a leader for the counts on which he was convicted. U.S. v. Fells, 920 F.2d 1179 (4th Cir. 1990).
4th Circuit holds that prior version of guidelines permitted consideration of defendant’s relevant conduct. (170) Defendant argued that relevant conduct could not be considered in calculating his base offense level because his offense occurred prior to amendments to guideline § 1B1.2 and 1B1.3, which became effective January 18, 1988. The prior version of these sections, defendant argued, did not permit consideration of relevant conduct. The 4th Circuit, following the 2nd, 6th and 10th Circuits, found that the amendments were not substantive changes, but simply clarified existing law that relevant conduct should be used to determine a defendant’s base offense level. U.S. v. Deigert, 916 F.2d 916 (4th Cir. 1990).
5th Circuit says defendant was not accountable for guns trafficked by her husband before she joined the conspiracy. (170) Defendant pled guilty to conspiracy to traffic and transfer firearms. Defendant’s husband trafficked over 300 guns to Chicago from 1998 to 2005. Based on this, the district court found that defendant’s offense involved over 200 firearms, triggering a ten-level increase under § 2K2.1(b)(1)(E). Defendant argued that she did not join the conspiracy until 2001, and that she could only be held accountable for the 45 guns she personally purchased. The Fifth Circuit held that defendant’s relevant conduct was not limited to the 45 guns she actually purchased. Defendant was accountable for “all reasonably foreseeable acts and omission of others in furtherance of … the same course of conduct or common scheme or plan as the offense of conviction.” § 1B1.3(a)(2). However, defendant’s relevant conduct did not include the conduct of co-conspirators prior to her joining the conspiracy. Although defendant and her eventual husband started dating in 1998, there was no evidence showing that she conspired with him prior to 2001. The district court’s application of § 2K2.1(b)(1)(E) lacked support. U.S. v. Longstreet, 603 F.3d 273 (5th Cir. 2010).
5th Circuit says defendant was not responsible for conspirators that were not part of his conspiracy. (170) Defendant picked up four illegal aliens in a town in Texas and was arrested as he drove them to another town in Texas. One of the aliens, Mejia-Lopez, testified that he illegally entered the country with a different group of aliens, and while walking around an immigration checkpoint, Mejia-Lopez got lost and was separated from his group. The following morning he encountered a second group of aliens, walked for about an hour through the brush to the road, where defendant waited in his pickup truck. The Fifth Circuit held that defendant’s sentence could not be enhanced for the acts of the alleged co-conspirators who transported Mejia-Lopez before he joined the second group of aliens. There was no evidence that Mejia Lopez’s first group was in any way related to the second group. Although defendant might reasonably foresee the actions of his co-conspirator, he could not foresee that an alien traveling with another group would join the group guided by defendant’s co-conspirator. U.S. v. Mateo Garza, 541 F.3d 290 (5th Cir. 2008).
5th Circuit holds that uncharged fraud was relevant conduct to scheme that produced laundered funds. (170) Defendant pleaded guilty to laundering money generated by a Ponzi scheme. The money laundering guideline, § 2S1.1 (b)(2), requires an offense-level enhancement based on the value of the funds laundered. The government argued that defendant’s offense level should be enhanced based on funds generated by a second fraudulent scheme for which defendant was never charged. Defendant operated the second scheme about three years after the scheme that led to his conviction. In the first and second schemes, defendant did not have common accomplices or victims, but both schemes used a similar modus operandi. The Fifth Circuit held that two fraudulent schemes do not have to be jointly planned and executed to qualify as relevant conduct for each other. On that basis, the court held that the district court did not clearly err in concluding that the second scheme constituted relevant conduct for defendant’s money laundering conviction and thus that the court properly considered the losses generated by the second scheme is setting defendant’s offense level. U.S. v. Hinojosa, 484 F.3d 337 (5th Cir. 2007).
5th Circuit says defendant was not accountable for sexual exploitation of minors in tape created before he joined conspiracy. (170) Based on a trip to Texas with a conspirator to take nude pictures of young boys, defendant pled guilty to one count of conspiracy to sexually exploit children, in violation of 18 U.S.C. § 2251(a). Under § 2G2.1, the offense level is based in part by the number of minors exploited in the offense. At sentencing, the district court held defendant accountable for the exploitation of two children depicted in a pornographic videotape created by his co-conspirator prior to the formation of their conspiracy. The co-conspirator took the tape with him on the trip to Texas. The district court found that even though the tape was created prior to the conspiracy, the § 2251(a) offense was inchoate, and remained inchoate until the tape was transported to Texas, well after the formation of the conspiracy. The Fifth Circuit disagreed. The inchoate character of a § 2251(a) offense depends on whether it is premised on the actual transport of pornography or on the existence of the intent to transport pornography at the time of the depiction’s creation. Because the conspiratorial liability charged in the indictment was premised on the knowledge or intent to transport pornography interstate when the depiction was created, rather than its actual transport interstate, the exploitation of minors in the videotape occurred at the moment the videotape was created, a time that clearly pre-dated the formation of the conspiracy. U.S. v. Reinhart, 357 F.3d 521 (5th Cir. 2004).
5th Circuit says cross-reference does not apply when gun used in foreign crime. (170) Defendant shot and killed a man in Mexico. He engaged in a gun battle with pursuing Mexican police, and then crossed the border into the United States. He pled guilty to illegally importing a firearm into the U.S. Sections 2K2.1(c)(1) and 2X1.1 direct a court to apply the guideline for the underlying offense, if the defendant used the gun in another crime. The district court applied § 2A2.1. The Fifth Circuit held that although defendant’s Mexican crimes did not count as relevant conduct, and thus could not be used to apply the cross-reference, the district court could have departed upward to impose the same sentence. Defendant’s foreign offenses did not literally fit the definition of relevant conduct under § 1B1.3. Although the foreign crimes were part of the same course of conduct as the offense of conviction, they were not the type of offenses for which § 3D1.2(d) would require grouping. Also, § 2K2.1’s cross-reference applies only where the gun was used in connection with another federal, state or local offense. However, under the unusual circumstances of the case, the district court could well have departed upward by analogy to impose the same sentence. U.S. v. Levario-Quiroz, 161 F.3d 903 (5th Cir. 1998).
5th Circuit directs court to decide whether relevant conduct was criminal. (170) Defendant was convicted of violating SEC Rule 10b‑5 in connection with the sale of securities to a union. Defendant promised the union an “immediate” $100,000 return on its initial investment. The union only received $45,558 from defendant, and was never provided the additional $54,442. There was also evidence that defendant had been diverting funds from the partnership in which the union and others had been investing. Evidence from a civil suit filed by investors showed that defendant had failed to distribute at least $1.3 in partnership funds. The district court included in the loss calculation both the $54,442 and the $1.3 million. The Fifth Circuit found that defendant could be held accountable under § 2F1.1 for the $1.3 million only if the district court found that defendant’s conduct was criminal, rather than a mere violation of his fiduciary agreement. However, the $54,442 was properly included in the loss determination because it was clearly related to the offense of conviction, i.e., making a misrepresentation in connection with the sale of a security. U.S. v. Peterson, 101 F.3d 375 (5th Cir. 1996).
5th Circuit remands because court attributed all loss to defendant without foreseeability finding. (170) Defendant, a prison guard, was involved in an altered money order scheme organized by the prison’s inmates. The district court held her accountable for the total $10,186 loss from the scheme, rather than the $1,200 she actually handled. The Fifth Circuit remanded because the district court attributed all of the loss to defendant without finding what amount was reasonably foreseeable to her. A sentencing court cannot assume that all acts of each participant in a jointly undertaken criminal activity were reasonably foreseeable to all participants. In making the foreseeability determination, the court should consider the defendant’s relationship with co-conspirators and her role in the conspiracy. U.S. v. Scurlock, 52 F.3d 531 (5th Cir. 1995).
5th Circuit upholds constitutionality of “relevant conduct” section, 1B1.3. (170) Defendant argued that the “relevant conduct” section of the guidelines, § 1B1.3, is unconstitutional because it permits a district court to consider uncharged conduct in determining the base offense level. The Fifth Circuit, without an extended discussion, held that it was not unconstitutional to permit a sentencer to consider uncharged conduct at sentencing. U.S. v. Patten, 40 F.3d 774 (5th Cir. 1994).
5th Circuit says punishment for offense previously considered as relevant conduct does not violate double jeopardy. (170) Defendant first pled guilty to a marijuana offense. At sentencing, the district court found that a cocaine offense was part of the same course of conduct, and included the cocaine as relevant conduct to determine defendant’s sentence. The government then indicted defendant on cocaine charges. The district court dismissed the indictment on double jeopardy grounds. The 5th Circuit reversed, holding that punishment for an offense previously considered as relevant conduct does not violate double jeopardy. Even assuming that including cocaine as relevant conduct was “punishment,” there was no double jeopardy violation because Congress permitted the second punishment. Guideline section 5G1.3(b) allows the government to prosecute and sentence a defendant in more than one federal proceeding for different criminal offenses that were part of the same course of conduct. The fact that a § 5K1.1 motion in the first prosecution would not pass to the second prosecution was not unfair. Defendant’s assistance related only to the marijuana offense, not the cocaine offense. U.S. v. Wittie, 25 F.3d 250 (5th Cir. 1994).
5th Circuit holds defendants are not accountable for conduct before they join conspiracy. (170) The 5th Circuit held that relevant conduct under § 1B1.3(a)(1)(B) is prospective only, so it cannot include conduct that occurs before a defendant joins a conspiracy. This ruling is in accord with the 1st and 9th Circuits, but disagrees with the 2nd and 7th Circuits. The court found this approach comports with the plain meaning of the term “foreseeable.” It also furthers the goals of individualized sentencing, and ensures proportionality. Finally, this approach is consistent with Circuit caselaw and 1992 amendments stating that the “scope of the agreement” and “reasonable foreseeability” are independent and necessary elements of relevant conduct under § 1B1.3(a)(1)(B). The offense level cannot be based on mere knowledge of historical facts, but the foreseeable object to which the defendant agreed. Of course, the past performance of the conspiracy may be relevant in determining his understanding of future drug quantities. U.S. v. Carreon, 11 F.3d 1225 (5th Cir. 1994).
5th Circuit sentences defendant for co-defendant’s sexual abuse of kidnapping victim. (170) Defendant pled guilty to aiding and abetting his co-defendant in kidnapping a woman. During the kidnapping, the co-defendant raped the woman several times. Because the co-defendant committed “another offense” during the kidnapping under § 2A4.1(b)(7), defendant was sentenced under § 2A3.1, the criminal sexual abuse guideline. Defendant argued that because he did not personally commit any sexual offense, and was “virtually unaware” of it, he should not be accountable for it. The 5th Circuit held that defendant was liable as an aider and abettor for the relevant conduct of defendant. The court rejected as untimely defendant’s claim that the enhancement was improper because he could not have been convicted of the federal crime of sexual abuse or aggravated sexual abuse. Moreover, the claim had no merit. Nothing in the commentary suggests that the term “another offense” was limited to violations of federal law. U.S. v. Anderson, 5 F.3d 795 (5th Cir. 1993).
5th Circuit holds defendant responsible for tax loss caused by co-conspirator. (170) Defendants argued that the district court erred by holding each of them responsible for the tax loss which the other caused. The 5th Circuit held that because each of the defendants’ conduct was reasonably foreseeable to the other defendant, the “relevant conduct” section of the guidelines, § 1B1.3, supported the district court’s decision to hold each defendant responsible not only for the tax loss which he caused, but also for the tax loss caused by his co-defendant. U.S. v. Charroux, 3 F.3d 827 (5th Cir. 1993).
5th Circuit finds statutory authority for the “relevant conduct” guideline. (170) The 5th Circuit rejected defendant’s claim that the Sentencing Commission exceeded its statutory authority in enacting the relevant conduct provision, section 1B1.3. The court held that 28 U.S.C. section 994(c)(2) provides statutory authority for section 1B1.3. U.S. v. Gracia, 983 F.2d 625 (5th Cir. 1993).
5th Circuit affirms using pre-guidelines offense as relevant conduct and in criminal history. (170) The 5th Circuit found no improper double counting in the use of defendant’s pre-guidelines social security offense to increase his criminal history score and as relevant conduct for purposes of calculating an offense level for his guidelines credit card offense. Double counting is legitimate where a single act is relevant to two dimensions of the guideline analysis. Here, the social security fraud conviction was relevant for determining the offense level for his credit card fraud conviction, since it constituted one fraudulent act on a continuum of similar efforts by defendant to disguise his identify and obtain credit. The social security fraud conviction was also relevant for determining defendant’s criminal history category. Section 4A1.1(e) provides for a three point increase in offense level if an offense is committed while the defendant is on parole and less than two years after release from prison. Defendant committed the social security fraud offense while on parole. U.S. v. Kings, 981 F.2d 790 (5th Cir. 1993).
5th Circuit affirms that defendant was responsible for loss caused by brother in joint fraud scheme. (170) Defendant and his brother each made numerous false claims on various insurance policies on the same car. The 5th Circuit affirmed that the value of the loss caused by defendant’s conduct under section 2F1.1 properly included the fraudulent claims made by his brother, since the brother’s conduct could be considered relevant conduct. The district court found that defendant’s brother’s conduct was part of a joint scheme or plan which defendant aided and abetted. While the court did not expressly state that it found the brother’s conduct was reasonably foreseeable to defendant, the meaning of the court’s finding was clear. U.S. v. Lghodaro, 967 F.2d 1028 (5th Cir. 1992).
5th Circuit upholds sentence based upon aggregate value of all vehicles within course of conspiracy. (170) Defendant was convicted of seven counts of illegal activities involving stolen vehicles. The district court determined defendant’s base offense level on the basis of the aggregate value of eight vehicles. The 5th Circuit affirmed that it was proper to base defendant’s sentence on all of the vehicles involved in the conspiracy. Under guideline section 1B1.3(a)(1), a defendant is accountable for the conduct of others in furtherance of a jointly-undertaken criminal activity that was reasonably foreseeable by the defendant. U.S. v. Patterson, 962 F.2d 409 (5th Cir. 1992).
5th Circuit rejects consideration of relevant conduct in determining applicable guideline. (170) Defendant pled guilty to discharging industrial waste in violation of 33 U.S.C. section 1319(c)(2)(A). Relying on defendant’s relevant conduct, the district court sentenced defendant under section 2Q1.2 (mishandling hazardous or toxic substances), rather than section 2Q1.3 (mishandling other environmental pollutants). The 5th Circuit held that it was error for the district court to consider relevant conduct in choosing the applicable guideline. A court should examine relevant conduct in choosing a base offense level where the guideline specifies more than one base offense level. But neither of the guidelines here provided for more than one base offense level. The district court should have relied solely on the defendant’s offense of conviction, i.e., discharge of industrial waste, to determine his base offense level. The most applicable guideline was section 2Q1.3. U.S. v. Goldfaden, 959 F.2d 1324 (5th Cir. 1992)1.
5th Circuit reviews relevant conduct determination under clearly erroneous standard. (170) The 5th Circuit held that a district court’s determination that certain transactions were part of the conspiracy for which a defendant was convicted is subject to review under the “clearly erroneous” standard. The district court is in the best position to determine what constitutes relevant conduct. U.S. v. Lokey, 945 F.2d 825 (5th Cir. 1991).
5th Circuit rules that “relevant conduct” must be considered in deciding whether crime was committed while on parole. (170) Defendant contended that the district court improperly considered pre-indictment activities in determining that he committed the “instant offense” while on parole and less than two years after his release from prison, under guideline sections 4A1.1(d) and (e). The 5th Circuit rejected the argument, holding that the “instant offense” includes any relevant conduct. In defendant’s case, although not specifically charged in the indictment, the government produced evidence that defendant was involved in methamphetamine production in 1987 while he was on parole and less than two years after his release from prison. These activities were nearly identical to the ones for which he was charged and convicted, and were temporally related as well. Because they were part of a continuing course of conduct, the district court could properly increase defendant’s criminal history score for committing the offense while on parole and less than two years after release from prison. U.S. v. Harris, 932 F.2d 1529 (5th Cir. 1991).
5th Circuit rejects argument that Supreme Court case prevents consideration of conduct outside offense of conviction. (170) In Hughey v. U.S., 495 U.S. 411 (1990), the Supreme Court held that the Victim and Witness Protection Act of 1982 (“VWPA”) permits restitution only for the specific conduct that was the basis of the offense of conviction. A sentencing court cannot consider losses caused by conduct related to dismissed counts or uncharged conduct. Defendants contended that the phrase “commission of an offense,” has the same meaning in the Sentencing Reform Act as it does in the VWPA. The 5th Circuit rejected this contention. The VWPA was passed long before the Sentencing Reform Act and was reenacted as part of a recodification and overhaul of federal criminal law. Although a court usually accords a similar meaning to similar language throughout a bill because it was drafted by one writer, such was not the case here. Moreover, the VWPA extended to judges a power they had never previously possessed. In contrast, the Sentencing Reform was enacted against a backdrop of hundreds of years of sentencing. The court refused to construe Congressional intent to change a long-standing practice without more explicit language. U.S. v. Thomas, 932 F.2d 1085 (5th Cir. 1991).
5th Circuit reverses finding that stipulation established more serious drug offense. (165) The district court sentenced defendants under the guideline governing drug trafficking, rather than the guideline governing the offense of using a communications facility to commit a drug trafficking offense. Defendants had pled guilty to the latter offense. The government contended that defendants stipulated to the greater offense when they concurred in the factual basis for their plea. The 5th Circuit found that the stipulation did not specifically establish a more serious offense than the offense of conviction. At best, the stipulation showed that defendants were present during the commission of a drug trafficking offense, which is not enough to establish possession with intent to distribute. The sentencing court could not, as suggested by the government, rely on facts in the presentence report to establish the elements of the greater offense simply because defendants failed to object to those facts. The factual basis for each element of the greater offense must appear in the stipulated facts as made on the record. U.S. v. Garcia, 931 F.2d 1017 (5th Cir. 1991).
5th Circuit finds use of stolen car to be relevant conduct for stolen credit card offense. (170) Defendant was arrested after unsuccessfully attempting to cash a stolen payroll check. He was in possession of a stolen rental card containing several stolen checks and credit cars. Defendant pled guilty to unlawfully possessing a stolen credit card. The 5th Circuit found that defendant’s use of the stolen rental car was relevant conduct under guideline § 1B1.3 for defendant’s credit card offense, especially since the stolen cards and checks were found in the car. U.S. v. Cryer, 925 F.2d 828 (5th Cir. 1991).
5th Circuit upholds consideration of related transactions to determine leadership role. (170) Defendant pled guilty to two counts of structuring transactions to evade reporting requirements. Defendant contended that the district court improperly determined that he was a leader based upon evidence that defendant directed participants in currency transactions other than the those for which he was convicted. The 5th Circuit found that the leadership enhancement was proper because the transactions in which defendant controlled other persons were part of the same underlying scheme and course of conduct as the offense of conviction. Following its recent opinion in U.S. v. Mir, 919 F.2d 940 (5th Cir. 1990), the court found that it was proper for the sentencing court to consider all conduct linked to the transaction, “even if it falls outside the four corners of the conviction itself.” U.S. v. Rodriguez, 925 F.2d 107 (5th Cir. 1991).
5th Circuit upholds consecutive sentences even though pre-guideline conduct was used to determine guideline offense level. (170) Defendant was convicted of making 27 bogus loans to herself totalling $280,000. Twenty-four of the loans occurred before the effective date of the guidelines. Although the total amounts of the loans made after the effective date of the guidelines was $25,500, the trial court used the $280,000 figure to calculate her offense level. Defendant received a 30 month sentence for the guidelines counts, to run consecutively to the 60 month sentence she received for the pre-guidelines counts. The 5th Circuit found no misapplication of the guidelines. Pre-guidelines conduct may be considered as relevant conduct under guideline § 1B1.3. Although courts commonly order concurrent sentences for defendants in this situation, and an advisory issued by the Sentencing Commission suggests that defendants such as this should usually receive concurrent sentences, the guidelines do not mandate this result. U.S. v. Parks, 924 F.2d 68 (5th Cir. 1991).
5th Circuit looks beyond offense of conviction to find that defendant was leader of amphetamine ring. (170) Defendant ran a large scale amphetamine distribution ring, and was responsible for the production of approximately 7,000 grams from her laboratory in Oklahoma. However, defendant pled guilty only to distributing two ounces of amphetamine, and argued that since she was the only participant in the offense charged, it was improper to treat her as a leader of a criminal activity involving five or more participants. The 5th Circuit agreed that the “offense” in guideline § 3B1.1(a) refers only to the offense charged. However, the court held that the court could consider “the underlying activities and participants that directly brought about the more limited sphere of the elements of the specific charged offense” as relevant conduct. In this case, defendant established an extensive manufacturing and distribution system. The sale to the agent was “but the final link in a chain of extensive drug activities.” Therefore, it was proper to find that defendant was a leader under § 3B1.1(a). U.S. v. Manthei, 913 F.2d 1130 (5th Cir. 1990).
5th Circuit rules that prior version of guidelines required showing of scienter to increase offense level for possession of a firearm. (170) Defendant pled guilty to possession of cocaine with intent to distribute. The district court increased defendant’s offense level by two based upon her possession of an unloaded semi-automatic pistol and a fully loaded clip. The gun and clip were found under defendant’s bed at the time police officers searched her house and seized various amounts of drugs both from her room and other parts of the house. On these facts the 5th Circuit upheld the district court’s finding that defendant possessed the weapon and that she did so while committing the drug offense. However, the 5th Circuit found that the version of guideline § 1B1.3 in effect at the time defendant committed the crime required a showing of scienter before a defendant’s offense level could be increased under guideline § 2D1.1(b). Section 1B1.3 had been amended by the date of defendant’s sentencing to remove the scienter requirement. Although the Sentencing Reform Act requires courts to consider the guidelines and policy statements in effect on the date of sentencing, the 5th Circuit found that application of the amended guideline to defendant’s crime would violate the ex post facto clause, since it would clearly “change the legal consequences of acts completed before its effective date.” The case was remanded for the district court to determine whether defendant had the requisite scienter. U.S. v. Suarez, 911 F.2d 1016 (5th Cir. 1990).
5th Circuit applies fraud guideline to false statements in bankruptcy. (165) Defendant pled guilty to making a false declaration under penalty of perjury in a bankruptcy proceeding. Defendant contended that the district court erred in sentencing him under the fraud guideline, § 2F1.1, rather than the perjury guideline, § 2J1.3. The 5th Circuit rejected this argument, finding that the Statutory Index specified the fraud guideline. A court may not look beyond the guideline listed in the Index unless that guideline is inappropriate in light of the statute or offense of conviction. Although defendant made his statement under penalty of perjury, his conduct constituted fraud because he attempted to conceal funds from the bankruptcy court. The 5th Circuit also rejected defendant’s argument that sentencing him under the fraud guideline violated due process because of his expectation that he would be sentenced under the perjury guideline. Since defendant stipulated to facts that established a factual basis for fraud, under guideline § 1B1.2(a), defendant could be sentenced to the higher offense. U.S. v. Beard, 913 F.2d 193 (5th Cir. 1990).
5th Circuit finds that guidelines § 1B1.2 does not deprive a defendant of right to effective assistance of counsel. (165) Defendant pled guilty to bank larceny, but the district court determined defendant’s base offense level by applying the section for Burglary of Other Structure, which has a higher base offense level than the section for Larceny, Embezzlement and Other Theft. Defendant argued that guidelines § 1B1.2 violated his 6th Amendment right to effective assistance of counsel, because it prevented defense counsel from predicting which specific guidelines section a judge will apply. Therefore, § 1B1.2 rendered defense counsel’s advice regarding possible sentences meaningless. The 5th Circuit rejected this argument, finding that the Constitution only requires that a defendant understand the maximum possible prison term and fine for the offense charged. The Constitution does not require that defense counsel be able to predict the sentence that a judge will impose. The 5th Circuit also rejected defendant’s argument that the district court violated Rule 11, Fed. R. Crim. P., by failing to ascertain that he understood that he could be sentenced under the guidelines for a greater offense than the one to which he pled guilty. U.S. v. White, 912 F.2d 754 (5th Cir. 1990).
5th Circuit upholds departure based on defendant’s conduct during flight. (170) The district court departed upward from the bank robbery guidelines because the defendants fired numerous shots at law enforcement officials in the course of their flight, endangered other persons on the highway and terrorized people while invading their homes and stealing their vehicles. The 5th Circuit affirmed the upward departure, noting that the relevant conduct § 1B1.3 provides that efforts to escape detection or responsibility for an offense are to considered in determining the guideline offense level. Moreover, in departing upward “the district court was entitled, if indeed not required, to consider conduct during flight.” U.S. v. Bates, 896 F.2d 912 (5th Cir. 1990).
5th Circuit holds court must sentence for stipulated offense if it is properly shown to exist. (165) Defendant pled guilty to a “telephone count” in violation of 21 U.S.C. § 843(b) while stipulating that he had met an undercover agent selling five pounds of methamphetamine for the purpose of distributing drugs. The district court sentenced defendant to five years probation. The government appealed, arguing that because defendant stipulated to a more serious offense he should have received the statutory maximum for that offense, four years. The Fifth Circuit agreed, holding that the court should have made a finding as to whether the stipulated facts established that defendant committed the more serious offense. In deciding whether the stipulation established the more serious offense the court must follow standards implicit in Fed. R. Crim. P. 11(f) and satisfy itself that a factual basis for each element of the crime exists. If the court finds that a more serious offense is not established, it shall apply the guidelines for the offense of conviction. If the more serious offense is established, the court shall apply the guidelines for the more serious offense, limited to the statutory maximum sentence for the offense of conviction. U.S. v. Martin, 893 F.2d 73 (5th Cir. 1990).
5th Circuit holds that stipulation established more serious offense than count of conviction. (165) U.S.S.G. § 1B1.2 provides that where a stipulation establishes “a more serious offense than the offense of conviction, the court shall apply the guideline most applicable to the stipulated offense.” Here the defendant pled to a telephone count but stipulated to possessing 130 grams of heroin. The 5th Circuit held that her guideline offense level was properly based on the stipulated offense of possession of heroin, so long as the sentence did not exceed the maximum for the offense of conviction. Nor did this violate due process. U.S. v. Strong, 891 F.2d 82 (5th Cir. 1989).
5th Circuit holds that stipulation established more serious offense than count of conviction. (165) U.S.S.G. § 1B1.2 provides that where a stipulation establishes “a more serious offense than the offense of conviction, the court shall apply the guideline most applicable to the stipulated offense.” Here the defendant pled to a telephone count but stipulated to possessing 130 grams of heroin. The 5th Circuit held that her guideline offense level was properly based on the stipulated offense of possession of heroin, so long as the sentence did not exceed the maximum for the offense of conviction. Nor did this violate due process. U.S. v. Strong, 891 F.2d 82 (5th Cir. 1989).
5th Circuit rules incorrect application of guidelines which results in sentence within appropriate range need not be vacated. (165) Defendant pled guilty to using a telephone to facilitate a drug offense, but stipulated to facts which showed that he possessed over 500 pounds of marijuana with intent to distribute. The district court departed from the telephone count because it felt that it did not adequately represent the severity of the offense. The 5th Circuit affirmed the sentence even though it found that the guidelines were incorrectly applied. When a defendant stipulates to facts which establish an offense more serious than of the offense of conviction, § 1B1.2, commentary 1 requires that the court sentence as if the stipulated facts were the offense of conviction. However, the case need not be remanded for resentencing because the sentence actually imposed would have been within the proper range had the guidelines been correctly applied. U.S. v. Garza, 884 F.2d 181 (5th Cir. 1989).
6th Circuit upholds relevant conduct findings to support fraud loss higher than jury verdict. (170) Defendants participated in a scheme that solicited money to invest in fictitious real estate deals and in fictitious proceedings to obtain a large inheritance. They challenged the court’s loss enhancements, arguing that the jury’s verdict limited the scope of the losses that the court could attribute to them. The Sixth Circuit found no error. A defendant is responsible for “all reasonably foreseeable acts and omissions of others in furtherance of the jointly undertaken criminal activity,” whether or not that activity is charged as a conspiracy. U.S.S.G. § 1B1.3(a) (1)(B). A district court must make “particularized findings with respect to both the scope of the defendant’s agreement and the foreseeability of his coconspirators’ conduct before holding the defendant accountable for the scope of the entire conspiracy.” The district court made such findings here. This was not a case in which the defendants played only a minor role in a larger scheme. Both defendants fully participated in the fundamental aspect of the scheme—convincing victims to part with their money using promises of guaranteed returns from fictitious real estate deals or a fictitious inheritance. U.S. v. Kennedy, 714 F.3d 951 (6th Cir. 2013).
6th Circuit finds use of company credit card was not relevant conduct because it was not illegal. (170) Defendant ran a business helping people obtain mortgages. He later used his former clients’ information to obtain credit cards and to open utility accounts in their names. He pled guilty to one count of identity theft. The district court included in its calculation losses stemming from credit cards that were in the name of U.S. Investments & Construction, a business that defendant started with a friend. Defendant argued that the business credit cards were not obtained or used in violation of criminal law, and therefore, the court erred in including those losses in its guidelines calculation. The Sixth Circuit agreed, since relevant conduct must be criminal conduct. Although the government contended that defendant’s conduct “closely mirror[ed]” his conduct in obtaining the other credit cards, defendant pointed to evidence that his friend authorized defendant to use his information to obtain credit cards for their business. It is unclear how defendant, the person who was responsible for running the company and who could sign on behalf of the company, violated criminal statutes by using the company’s credit cards. U.S. v. Catchings, 708 F.3d 710 (6th Cir. 2013).
6th Circuit includes state income and sales tax losses in tax loss. (170) Defendant failed to file federal and state income tax returns since 1993. He argued that the district court erred in considering state income and sales tax losses in its calculation of his federal tax evasion sentence. The Sixth Circuit found no error. State offenses may qualify as relevant conduct under § 1B1.3. Here, defendant’s state tax offenses and his federal tax offenses could be categorized both as a “common scheme or plan” and the same “course of conduct.” Defendant’s failure to file both federal and state tax returns constituted the same modus operandi—as a fervent tax protestor, defendant’s “method of pressing his challenges” was “to not file and not pay taxes.” Moreover, the temporal proximity, similarity, and regularity of defendant’s federal and state tax offenses indicated that they constituted the same course of conduct. U.S. v. Maken, 510 F.3d 654 (6th Cir. 2007).
6th Circuit holds that agreement’s bar on use of relevant conduct included leadership adjustment. (170) Defendant’s plea agreement provided that the government would recommend that “the defendant’s base offense level be calculated using 1000 pounds of marijuana and 1 kilogram of cocaine and that no other relevant conduct be used to increase the defendant’s base offense level.” Defendant argued that she understood the plea agreement to mean that no conduct other than the quantity of drugs specified in the plea agreement would be used to increase her sentence. The government contended that the disputed language related solely to the amount of marijuana and cocaine that would be used to calculate her offense level. Relying on the guidelines’ definition of relevant conduct, the Sixth Circuit found it “eminently reasonable” for defendant to believe that when the agreement agreed to recommend that no other “relevant conduct” be used to increase her base offense level, it foreclosed any opportunity to increase her sentence through a §3B1.1(a) leadership enhancement. Under USSG §1B1.3, the term “relevant conduct” means “Factors that Determine Guideline Range.” Thus, relevant conduct includes those factors that contribute to adjusting the offense level upward. “Relevant conduct” incorporates “the base offense level … specific offense characteristics … and adjustments in Chapter Three.” Moreover, ambiguities in plea agreement must be construed against the government. U.S. v. Fitch, 282 F.3d 364 (6th Cir. 2002).
6th Circuit holds telemarketer accountable for total loss from current and previous telemarketing jobs. (170) Defendant worked for a telemarketing company that defrauded hundreds of elderly victims out of money by convincing them they had won a valuable prize. Defendant worked for the firm for nine months, during which time he became the top “reloader,” generating over $443,209. Defendant had worked eight years in the telemarketing industry at companies using similar fraudulent schemes. The district court included in the loss calculation the total sales for the time defendant worked for this telemarketing company¾$2,677,000, and included $1,173,647 in sales for defendant’s work at other companies. The Sixth Circuit affirmed. The total loss from the current offense was reasonably foreseeable to defendant because the salespeople had access to each other’s sales logs. Defendant occasionally led sales meetings, the obvious purpose of which was to increase sales. The district court properly included the additional amounts defendant earned from previous telemarketing agencies as relevant conduct. These firms had the same modus operandi and purpose. Defendant took the same leads with him from job to job and victimized the same people on several occasions. U.S. v. Brown, 147 F.3d 477 (6th Cir. 1998).
6th Circuit holds embezzler responsible for full amount taken. (170) Defendant and other city workers embezzled money from their employer. She argued that she was only accountable for the amount that she actually received from the scheme. The Sixth Circuit disagreed, holding that defendant was accountable for the amount that she could reasonably foresee being taken in the scheme. Under § 1B1.3(a)(1)(B), in the case of a jointly undertaken criminal activity, a defendant is responsible for all reasonably foreseeable acts and omissions of others in furtherance of the activity. Given defendant’s central role in the embezzlement scheme, she could reasonably foresee the theft of $66,680. U.S. v. Brown, 66 F.3d 124 (6th Cir. 1995).
6th Circuit says relevant conduct may not be used in finding amount of funds structured. (170) Defendant structured a transaction to avoid reporting requirements by purchasing a $123,500 home with currency and cashier’s checks. The court held him accountable for structuring more than $100,000 under § 2S1.3 (b)(2). The Sixth Circuit held that the court should have excluded $29,000 from two cashier’s checks for which defendant and his brother filled out the reporting forms. The enhancement would have been proper under Fifth Circuit law, which allows a court to consider all funds involved in the same course of conduct or common scheme or plan as the offense of conviction. However, under U.S. v. Wright, 12 F.3d 70 (6th Cir. 1993), the relevant conduct adjustment does not apply where a guideline provision restricts its application to specific conduct. Defense counsel’s failure to object to the additional point was not ineffective assistance because there was no prejudice. Defendant was already serving a 420-month drug sentence that ran concurrently with the 57-month sentence he received on the structuring charge. Green v. U.S., 65 F.3d 546 (6th Cir. 1995).
6th Circuit approves use of pre-amendment relevant conduct. (170) Defendant was convicted of underreporting corporate income and attempting to evade individual income taxes. The district court used the November 1, 1989 edition of the guideline manual, which was in effect on the date defendant committed the crimes. The Sixth Circuit affirmed, holding that using the 1989 guidelines did not violate the ex post clause, even though some of defendant’s relevant conduct occurred before the effective date of the 1989 amendments. The ex post facto clause is not violated by taking into account relevant conduct that occurred before the adoption of any sentencing guidelines. U.S. v. Cseplo, 42 F.3d 360 (6th Cir. 1994).
6th Circuit holds defendant responsible for all loss caused by his fraud scheme. (170) Defendant pled guilty to charges of mail, wire and credit card fraud. He argued that he could not be held accountable for the total loss attributable to the insurance and credit card fraud because he could not have foreseen the full scope of criminal activity undertaken by his accomplices. He characterized his associates as independent contractors who received instruction from defendant on how to run a fraudulent racket. The 6th Circuit disagreed with this characterization. The district court reasonably concluded that the criminal activity was jointly undertaken and reasonably foreseeable to defendant, based on evidence that defendant was “intimately involved” in each transaction. U.S. v. Jackson, 25 F.3d 327 (6th Cir. 1994).
6th Circuit requires explicit finding on why conspiracy’s activities before defendant joined should be attributed to him. (170) Defendant joined an ongoing drug conspiracy. On conviction, the district court attributed to defendant the conspiracy’s entire drug quantity. The 6th Circuit remanded for explicit specification of the evidence on which the district court relied to attribute the pre-participation quantities to defendant. More generally, the 6th Circuit required the court to clarify the scope of the criminal activity each of several defendants agreed jointly to undertake. The district court had simply stated that a defendant is responsible for all the quantities dealt in by his conspiracy. U.S. v. Okayfor, 996 F.2d 116 (6th Cir. 1993).
6th Circuit rejects enhancement based on co-defendant’s possession of weapon. (170) Three defendants challenged their enhancement under guideline section 2D1.1(b) for possession of a firearm during a drug trafficking crime. The 6th Circuit affirmed the enhancement for two of the defendants, but reversed it for the third. The first defendant admitted to police that he had control over the pistol found in the apartment that served as headquarters for the drug operations. The second defendant was a co-conspirator of the first defendant, and the possession of the weapon was reasonably foreseeable. However, the enhancement could not stand for the third defendant, because he did not plead guilty to conspiracy. Although this distinction would be irrelevant under the current guidelines, it was relevant under the 1988 version of section 1B1.3. Because the third defendant’s conviction was not for conspiracy, the government was required to demonstrate that the defendant possessed the weapon himself or aided and abetted the possessed of the firearm by another. Judge Jones dissented in part. U.S. v. Tisdale, 952 F.2d 934 (6th Cir. 1992).
6th Circuit rules false statement which enabled defendant to commit similar offense six years later was not relevant conduct. (170) In 1983, defendant obtained a job with the U.S. Postal Service by lying about his previous back injury. He later reinjured his back, became disabled, and began to receive federal employee disability payments. In 1989, he stated on a Labor Department that he had not been employed during the previous 15 months, which was a lie. Defendant was convicted of making false statements to a U.S. agency in connection with his 1989 statements to the Labor Department. The 6th Circuit reversed the district court’s determination that the 1983 false statement concerning his back was relevant conduct for the instant offense. The two offenses were unrelated acts separated by the passage of six years. Although defendant may not have been in a position to commit the second offense if he had not committed the first offense, this did not, by itself, make the second offense part of the same course of conduct or common scheme or plan as the first offense. U.S. v. Kappes, 936 F.2d 227 (6th Cir. 1991).
6th Circuit holds that co-defendant’s possession of nunchucks was properly attributed to defendant. (170) Defendant and a co-defendant broke into a bank at night and stole various personal possessions belonging to bank employees and damaged the bank vault in an attempt to open it. Defendant and the co-defendant were apprehended in the building adjacent to the bank, lying on the floor with their eyes closed. Co-defendant had a set of nunchucks, a martial arts weapon, under his head. Defendant objected to the two level increase in his base offense level based upon his co-defendant’s possession of the nunchucks. The 6th Circuit found the increase was proper under guideline § 2B2.2. Possession of a weapon in the commission of an entry into a federally insured bank was foreseeable and it was reasonable to infer that defendant had knowledge of the weapon. U.S. v. King, 915 F.2d 269 (6th Cir. 1990).
6th Circuit rules that if court rejects proposed sentencing agreement, defendant must be allowed to withdraw his plea. (165) The plea agreement stated that only 99 grams of cocaine were involved, for an offense level of 16. The presentence report found that there were over 100 grams, for an offense level of 18. The district court rejected the plea agreement and sentenced the defendant according to 102 grams. The 6th Circuit found that the plea was properly characterized as a specific sentence agreement under Fed. R. Crim. P. 11(e)(1)(C). Therefore the district court was bound to defer acceptance of the plea agreement until it had an opportunity to consider the presentence report. The court also noted that under the sentencing guidelines, the district court is “not bound by stipulations of fact.” Otherwise the parties could by stipulation resolve crucial, disputed factual issues and thereby undercut the application of the guidelines. Thus the district court properly rejected the agreement with its incorrect stipulation. However, it was error to impose sentence without affording defendant an opportunity to withdraw his guilty plea. U.S. v. Kemper, 908 F.2d 33 (6th Cir. 1990).
6th Circuit upholds increase in sentence for getaway driver for injury which occured in bank during robbery. (170) Defendant, as driver of the getaway car, was convicted of being an “aider and abettor” during a bank robbery. During the robbery a teller hit her head and hip on the teller’s drawer while trying to lie on the floor. Defendant’s offense level was increased by two levels under U.S.S.G. 2B3.1(b)(3)(A) for bodily injuries sustained by the teller. The 6th Circuit held that under guideline 1B1.3 (a)(1), defendant was responsible for “acts and omissions committed or aided and abetted by the defendant” that occurred during the offense. Although defendant was outside the bank, the injury that occurred in the bank was reasonably foreseeable by the defendant and the increase was not clearly erroneous. U.S. v. Fitzwater, 896 F.2d 1009 (6th Cir. 1990).
7th Circuit finds bombing and armed robberies were relevant conduct for racketeer. (170) Defendant was convicted of racketeering based on his involvement in a criminal enterprise that distributed video gambling devices to local bars and restaurants. To protect their business, the enterprise bombed a rival video gambling business. The enterprise also made money from armed robberies targeting jewelry stores. The district court held defendant accountable for the bombing and the robberies at sentencing. The court found that defendant ordered the bombing, relying on a rival’s testimony that defendant had threatened him. It also found that defendant exercised control over the robberies, at least to the extent that he could put certain people or places off-limits. The court further noted that defendant seemingly had the ability to confer a degree of protection on his underlings. The Seventh Circuit agreed that these facts supported attributing the conduct to defendant under §1B1.3 as relevant conduct. U.S. v. Volpendesto, 746 F.3d 273 (7th Cir. 2014).
7th Circuit holds defendant accountable for lenders’ loss in mortgage fraud scheme. (170) Defendant and his son engaged in an elaborate mortgage fraud scheme that convinced unwitting buyers to purchase a large number of properties that they could neither afford nor rent out after purchasing. The district court found that mortgage lenders suffered losses totaling $1,084,671 for the 60 properties sold as part of the mortgage fraud scheme. The Seventh Circuit rejected defendant’s argument that he could not be held accountable for the lender’s losses simply because his son, rather than defendant, falsified the loan documents. A defendant may be held accountable for the conduct of others if that conduct was in furtherance of jointly undertaken criminal activity and reasonably foreseeable in connection with that criminal activity. The district court properly found the scope of the criminal activity that defendant and his son agreed to jointly undertake involved the fraudulent sale of real estate, and this included securing the buyers’ financing. The scheme as a whole hinged on unqualified buyers securing financing, and necessitated a high level of coordination between defendant and his son. Moreover, defendant could have reasonably foreseen that fraudulent funding was being secured for the unqualified buyers. The district court did not err in considering the lenders’ losses at sentencing. U.S. v. Sheneman, 682 F.3d 623 (7th Cir. 2012).
7th Circuit holds defendants accountable for co-schemers’ jointly undertaken activity. (170) Defendants participated in an Internet fraud scheme that defrauded thousands of victims. Foreign individuals, based in Romania, posed as sellers of goods on eBay and other internet auction sites. The victims of the scheme were directed to send payment by wire transfer. A network of individuals in the United States, including defendants and numerous others in the Chicago area, collected payment using false identifications. The co-schemers kept a percentage of the proceeds for themselves and forwarded the remainder to the foreign co-schemers. The Seventh Circuit held that defendants were properly held accountable for their co-schemers’ jointly undertaken criminal activity. This was a single scheme, with coordination of activities among co-schemers, and sharing of resources, including information and rides to currency exchanges. Both defendants knew the scope of the scheme and participated in it fully for more than two years. By coordinating their efforts, defendants furthered the other co-schemers’ criminal acts which were part of the joint criminal activity. U.S. v. Salem, 657 F.3d 560 (7th Cir. 2011).
7th Circuit counts in criminal history relevant conduct that is part of pattern of sexual exploitation. (170) In calculating a defendant’s criminal history, a district court cannot ordinarily consider previous sentences for acts that qualify as relevant conduct. This is because a “prior sentence” is defined in § 4A1.2(a)(1) as “any sentence previously imposed . . . for conduct not part of the instant offense.” Conduct is part of the instant offense if it qualifies as relevant conduct under § 1B1.3. See Application Note 1 to § 4A1.2. Nevertheless, § 2G2.2(b)(5) directs a five level increase if the defendant engaged in a pattern of activity involving the sexual abuse or exploitation of a minor, and Application Note 1 says that the enhancement applies “whether or not the abuse or exploitation (A) occurred during the course of the offense.” Application Note 3 says that a conviction taken into account under subsection (b)(5) “is not excluded from consideration of whether that conviction receives criminal history points.” Based on Application Note 3, the Seventh Circuit agreed with the district court that the Application Note carves out an exception to the general rule, so the court properly included the prior conviction in criminal history even though it was also used in the five-level “pattern” enhancement. U.S. v. Nance, 611 F.3d 409 (7th Cir. 2010).
7th Circuit treats family’s fraudulent visa applications as relevant conduct. (170) Defendant, a consular officer at the American embassy in Lithuania, was convicted of visa fraud for using his position for fraudulently facilitating the issuance of visas to certain Lithuanian citizens. The district court found that defendant’s crime involved more than six visas, and applied a § 2L2.1(b)(2)(A) enhancement for an offense involving between six and 24 documents. The parties agreed that the visas of the four co-conspirators were attributable to defendant. The Seventh Circuit affirmed the increase, finding the district court properly attributed to defendant additional visas based on evidence that he attempted to obtain visas for the family of one of his co-conspirators. The district court did not clearly err in finding by a preponderance of the evidence that defendant’s crime involved the family’s visa applications. U.S. v. Christ, 513 F.3d 762 (7th Cir. 2008).
7th Circuit holds that court may consider § 3553(a) evidence unrelated to offense of conviction. (170) Defendant pled guilty to being a felon in possession of a firearm. The firearm involved was a shotgun that defendant had taken with him to go duck-hunting. The government produced evidence at sentencing that defendant was exceptionally violent. The district court relied on this evidence to sentence defendant to 360 months, 67 months above the advisory range of 235-293 months. Defendant argued that the court erred in imposing a sentence above the guideline range based on factors that were not related to his use of the shotgun for duck-hunting. The Seventh Circuit found no error – defendant confused guideline provisions requiring the sentencing judge to make certain factual findings under the guidelines with the factors that may be considered under § 3553(a) in choosing the ultimate sentence. While the “Relevant Conduct” provision in U.S.S.G. § 1B1.3 allows a judge to enhance a defendant’s guideline range only for conduct that is “part of the same course of conduct or common scheme or plan as the offense of conviction,” once the applicable range is determined, the judge’s ability to choose which sentence to impose is not so limited. See 18 U.S.C. § 3661 (“No limitation shall be placed on the information concerning the background, character, and conduct of a person convicted of an offense which a court … may receive and consider for the purpose of imposing an appropriate sentence”). U.S. v. Vitrano, 495 F.3d 387 (7th Cir. 2007).
7th Circuit holds defendant was improperly sentenced for entire proceeds from fraud scheme. (170) Defendant originally invested in a fraudulent scheme. Sometime between 1996 and 1999, defendant confronted the leader of the scheme, told him that she knew it was an illegal scam, and told him that she knew a way to circumvent the law. Thereafter, she began marketing the scam herself. The Seventh Circuit held that it was improper to hold defendant accountable for entire amount of loss from the scheme. It was undisputed that defendant was not a part of the conspiracy at its conception. A defendant is not liable for that conduct which takes place before the defendant joins the conspiracy. U.S. v. Diamond, 378 F.3d 720 (7th Cir. 2004).
7th Circuit holds that reference to other relevant conduct subsections does not include “trailing” clause. (170) Guideline § 1B1.3(a)(1) provides that relevant conduct include certain acts and omissions by the defendant, and in the case of jointly undertaken criminal activity, certain joint conduct “that occurred during the commission of the offense of conviction, preparation for that offense, or in the course of attempting to avoid detection or responsibility for that offense.” Section 1B1.3(a)(2), which applies to offenses for which § 3D1.2 requires grouping, states that relevant conduct includes “all acts and omission described in subdivision (1)(A) and (1)(B) above that were part of the same course of conduct or common scheme or plan as the offense of conviction.” The district court held that § (a)(2)’s reference to sections (a)(1)(a) and (a)(1)(B) also incorporated the “trailing clause” of the entire (a)(1) section – in other words, to constitute relevant conduct, the conduct must have occurred “during the commission of the offense of conviction, the preparation for that offense, or in the course of attempting to avoid detection or responsibility for that offense.” The Seventh Circuit held that the district court misinterpreted § 1B1.3. The reference to subsections (1)(A) and (1)(B) in § 1B1.3(a)(2) refers only to the subsections themselves and not the trailing clause. Thus, in the context of a groupable offense, when evaluating whether some action constitutes relevant conduct, a court must look to see whether the acts and omissions “were part of the same course of conduct or common scheme or plan as the offense of conviction.” U.S. v. Johnson, 347 F.3d 635 (7th Cir. 2003).
7th Circuit upholds findings that uncharged frauds were related. (170) Defendant was convicted of mail fraud in connection with a scheme to secure student loans with false information. The district court considered evidence of two other frauds as relevant conduct. The government’s evidence relating to the two other frauds included names and social security numbers found in defendant’s apartment which were used to apply for the loans. The addresses listed for the loan application were located in the same neighborhood in the same area of New Jersey as the other addresses used by defendant, and the fraud victims lived near defendant’s other New Jersey victims. The district court found that each of these frauds bore a “remarkable similarity, in fact, virtual identity [sic] to the other frauds.” The court stated that these additional frauds “point almost in an identifying way as a fingerprint, or signature, or unique characteristic, common scheme and plan … for this defendant.” Further, “the overlap with respect to use of addresses and … technique … is so strikingly similar that it could be no one else.” The Seventh Circuit ruled that this written statement of reasons was sufficient to support using the uncharged frauds as relevant conduct. It was clear from the court’s statement regarding the “strikingly similar” technique that the judge had weighed the evidence relating to the frauds. The court’s finding was not clearly erroneous. U.S. v. Ojomo, 332 F.3d 485 (7th Cir. 2003).
7th Circuit holds that relevant conduct is limited to criminal conduct. (170) Defendant was convicted of a variety of fraud charges arising out of his sale of animation art. To support a $231,000 loss calculation, the PSR estimated that about 55 percent of defendant’s $420,000 in business receipts from 1994 to 1999 was attributable to fraudulent business practices. The 55 percent was derived from a sample of three sales made to customers in which 55 percent of the purchase price was attributable to false representations. These sales provided about 20 percent of defendant’s total receipts during their five-year period. Defendant argued that the government failed to prove that any of the losses incurred by defendant’s customers were the result of criminal conduct, and therefore they could not be considered relevant conduct. The Seventh Circuit agreed that relevant conduct under § 1B1.3 is necessarily limited to criminal conduct. The government failed to prove that the additional conduct relied on in the loss calculation was criminal. Although defendant’s entire business was “permeated with fraud,” that characterization may have both civil and criminal aspects. The primary defect in the district court’s loss calculation was that it failed to make explicit findings identifying with specificity the relevant unlawful conduct that allegedly caused the $231,000 loss. U.S. v. Schaefer, 291 F.3d 932 (7th Cir. 2002).
7th Circuit holds that filing of fraudulent tax returns for others was relevant conduct. (170) In addition to submitting her own fraudulent claim for a tax refund in 1997, defendant assisted five others in preparing and submitting false federal income tax returns to obtain refunds to which they were not entitled for the years 1995, 1996 and 1997. Defendant pled guilty to filing a single false tax return. The Seventh Circuit held that the district court properly considered the tax frauds defendant committed on behalf of others as relevant conduct under § 1B1.3(a). All of the financial transactions in which defendant was involved established a “common scheme or plan,” as defined in Application Note 9(A). Each transaction involved the filing of false tax returns seeking a refund. The IRS was a common victim in every instance. Defendant’s modus operandi was the same for every transaction in that she attached an altered or falsified W-2 form showing false wages and withholdings to each return. In addition, defendant’s filing of her own 1997 false return and the preparation of false returns for others in previous years amounted to the same course of conduct pursuant to Application Note 9(B). U.S. v. Leonard, 289 F.3d 984 (7th Cir. 2002).
7th Circuit holds that firearm possessed within four weeks of other firearm was relevant conduct. (170) On April 10, 1999, police investigating an armed robbery patted down defendant and arrested him after discovering a .38 caliber revolver. On May 9, 1999, police dispersing guests from a nightclub observed defendant remove an assault rifle from the trunk of a car. He was charged with two counts of being a felon in possession of a firearm, 18 U.S.C. § 922(g)(1). He pled guilty to Count I, which related to the first incident. The Seventh Circuit held that the district court acted properly in considering the charges contained in Count II, which related to the second incident, as relevant conduct. “[T]he contemporaneous, or nearly contemporaneous, possession of uncharged firearms is … relevant conduct in the context of a felon-in-possession prosecution.” U.S. v. Santoro, 159 F.3d 318 (7th Cir. 1998). Defendant twice possessed firearms about four weeks apart. This conduct unequivocally fell within the relevant conduct definition announced in Santoro. U.S. v. Wallace, 280 F.3d 781 (7th Cir. 2002).
7th Circuit holds that sentence increase from relevant conduct did not require clear and convincing evidence. (170) A sentencing court uses a preponderance of the evidence standard in making a factual finding that a defendant has engaged in relevant conduct. In extreme cases, an increase in a defendant’s sentence might be so great as to require the use of the more demanding clear and convincing evidence standard. See U.S. v. Ofcky, 237 F.3d 904 (7th Cir. 2001). Here, the consideration of the relevant conduct increased defendant’s sentencing range from 12-18 months to 41-51 months. The Seventh Circuit held that this increase was not so severe as to require the more demanding standard of proof. Previous cases have approved the use of the preponderance standard in instances in which a sentence was enhanced much more significantly than in defendant’s case. See, e.g. U.S. v. Rodriguez, 67 F.3d 1312 (7th Cir. 1995) (enhancement from 51-63 months to a sentence of life imprisonment). U.S. v. Anderson, 259 F.3d 853 (7th Cir. 2001).
7th Circuit holds that relevant conduct increase did not require clear and convincing evidence. (170) The district court’s relevant conduct finding increased defendant’s base offense level from 14 to 20, and increased his guideline range from 18-24 months to a range of 37-46 months. Defendant argued that such a dramatic increase required the relevant conduct to be proven by clear and convincing evidence, rather than the usual preponderance of the evidence standard. The Seventh Circuit found that the sentencing increase involved here was not so great as to require clear and convincing standard of proof. Although this circuit has not determined how large an increase requires the more demanding standard of proof, it has decided cases in which a large sentence increase was not so great as to require a higher standard of proof. See, e.g. U.S. v. Rodriguez, 67 F.3d 1312 (7th Cir. 1995) (upholding sentencing enhancement from 51-63 months to life). U.S. v. Ofcky, 237 F.3d 904 (7th Cir. 2001).
7th Circuit holds selling “auto sears” was relevant conduct to conviction for selling silencer. (170) Auto sears enable semi-automatic weapons to be used as fully automatic weapons, which means that they are defined as “machineguns” by 26 U.S.C. § 5845(b). Defendants sold 30 auto sears to undercover agents and agreed to sell another 37, plus a silencer and two semi-automatic rifles. Defendants pled guilty to conspiring to possess and transfer the silencer. The district court increased their sentences under § 2K2.1(b) based on the sale of the auto sears. Defendants argued that auto sears should not have been treated as firearms. The Seventh Circuit held that because auto sears are treated as machineguns under 26 U.S.C. § 5845(b) and machineguns are “firearms” under note 3(ii) to § 2K2.1, and none of the transfers was registered to the purchaser, the transfer of auto sears were properly treated as relevant conduct. Although an ATF ruling suggests that auto sears manufactured before 1981 need not be registered, the evidence showed that these auto sears were recently made by defendants. U.S. v. Cash, 149 F.3d 706 (7th Cir. 1998).
7th Circuit permits considering acts beyond statute of limitations as relevant conduct. (170) From 1978 to 1992, defendant failed to report to the Veterans Administration the income he earned. As a result, he received a larger VA pension than he was entitled to receive. He pled guilty to two counts relating to the false reports he filed 1991 and 1992. The district court calculated the loss as the total overpayment from 1978 to 1992. Defendant maintained that the loss should be limited to the false reports he filed within the five-year statute of limitations period. Because he was indicted in March 1996, the five-year statute of limitations would have excluded any acts before March 1991. The Seventh Circuit held that a court may properly consider acts beyond the statute of limitations as relevant conduct. Six other circuits have held that relevant conduct should not be limited by the statute of limitations. Relevant conduct does not focus on acts for which the defendant is criminally accountable. U.S. v. Matthews, 116 F.3d 305 (7th Cir. 1997).
7th Circuit rejects § 2B3.1(b)(2)(A) adjustment where security guard fired gun. (170) When defendant attempted to rob a bank, a security guard grabbed defendant from behind, placed a gun against his back, and said “Don’t struggle or you will be shot.” Defendant instead tried to elbow the guard, so the guard shot him. The Seventh Circuit rejected a § 2B3.1(b)(2)(A) enhancement based on the guard’s discharge of the gun. The enhancement is improper where a non-participant fires the gun. Section 1B1.3(a) limits specific offense characteristics to actions that the defendant actually intended or desired. A defendant does not induce or willfully cause a guard to discharge a gun simply because he commits a robbery, for that by itself shows no desire or intent regarding the firearm discharge. Reasonable foreseeability applies to the actions of co-conspirators, not the actions of bystanders or other non-participants in the crime. U.S. v. Gordon, 64 F.3d 281 (7th Cir. 1995).
7th Circuit upholds more than minimal planning enhancement for purchaser of food stamps. (170) Defendant was convicted of eight counts of unlawfully purchasing food stamps from an undercover agent. He argued that because the government was the seller and he merely the buyer, the more than minimal planning enhancement under section 2F1.1(b)(2)(A) was inapplicable. The 7th Circuit upheld the enhancement. More than minimal planning is present in any case involving repeated acts over a period of time, unless each instance was purely opportune. Defendant bought the food stamps on eight different occasions, and in no way were these transactions “purely opportune.” Each time, he produced the funds necessary to buy the stamps. Once, he even chastised the agent for failing to offer more stamps. U.S. v. Abdelkoui, 19 F.3d 1178 (7th Cir. 1994).
7th Circuit says uncharged robberies should have been used for criminal history departure. (170) Defendant pled guilty to six bank robberies and confessed to five more. The district court departed upward for the five uncharged robberies by including them in the multiple count sentencing calculations under §3D1.4, thus raising defendant’s offense level. The 7th Circuit rejected this methodology, holding that these uncharged crimes should have been the basis for a criminal history departure under §4A1.3. Although “relevant conduct” adjustments may be made under §1B1.3 for some offenses, bank robbery is not one of them. Moreover, before the district court could depart based on the uncharged robberies under the “general departure” section, §5K2.0, it must first find that a “criminal history” departure under §4A1.3 was not appropriate. Judge Crabb disagreed with the majority’s conclusion that §5K2.0 was unavailable as a basis for departure. U.S. v. Dawson, 1 F.3d 457 (7th Cir. 1993).
7th Circuit includes prior tax evasion as “relevant conduct.” (170) Defendant objected to the district court’s including tax loss from tax evasion in 1985 in his sentence for a later tax evasion. The 7th Circuit concluded that the prior evasion was properly included in the present offense as “relevant conduct” under §1B1.3. A 6th Circuit case refusing to include civil tax liability as relevant conduct did not dictate a different result, because defendant’s earlier tax evasion was a crime even though he had not been convicted. U.S. v. Harvey, 996 F.2d 919 (7th Cir. 1993).
7th Circuit upholds finding of single conspiracy in determining loss from criminal activity. (170) Defendant, a fare collector, bribed a supervisor to be assigned to a high-traffic position and then misrepresented the fares he collected, keeping some for himself. He appealed the district court’s inclusion of losses caused by other fare collectors who also were engaged in the same activity. The 7th Circuit affirmed, concluding that defendant was part of a single, large conspiracy including the other fare collectors rather than merely being involved in a smaller conspiracy. Defendant’s contacts with the other fare collectors bolstered the court’s conclusion. U.S. v. Narvaez, 995 F.2d 759 (7th Cir. 1993).
7th Circuit upholds use of uncharged conduct to which defendant stipulated in plea agreement. (165) In a plea agreement, the government promised not to charge defendant with using a false Social Security number in return for stipulating to 10 such violations. The plea agreement also provided that these 10 violations could be used for determining the appropriate sentencing guideline range. The 7th Circuit found that guideline § 1B1.2(c) authorized the district court to consider the uncharged crimes in setting his offense level. Stipulated offenses are to be treated as offenses of conviction. Judge Cudahy concurred to point out the dangers of “bootstrapping” offenses in this manner, particularly when the stipulated charges are unrelated to the offense of conviction. U.S. v. Eske, 925 F.2d 205 (7th Cir. 1991).
7th Circuit upholds calculation of criminal history from the date of earliest stipulated offense. (165) Defendant was convicted of firearms offenses. In his plea agreement, he stipulated to using a false Social Security number on 10 separate occasions. The 7th Circuit rejected defendant’s contention that his criminal history score must be calculated based on sentences imposed during the 10-year period prior to the date of the firearms offenses. Stipulated offenses are treated as offenses of conviction, and therefore, defendant’s criminal history was properly based upon the 10-year period prior to the earliest stipulated offense. U.S. v. Eske, 925 F.2d 205 (7th Cir. 1991).
7th Circuit upholds guidelines against due process challenge. (170) Defendant contended that guideline § 1B1.3, which permits the judge to increase a sentence based on related, but uncharged, drug activity, violates due process by requiring the judge to impose a fixed penalty for such activity. He argued that since uncharged relevant conduct need only be proved by a preponderance of the evidence, due process requires that judges have discretion to discount penalties imposed for such conduct. The 7th Circuit rejected this argument. Since standardizing the process of sentencing by using the same offense and offender characteristics is permissible, and sentencing defendants on the basis of crimes for which they have not been convicted is permissible, then Congress may impose a uniform penalty when the evidence indicates that defendant committed these other crimes. Moreover, Congress could have constitutionally prescribed a higher mandatory sentence for possession of any amount of drugs, making quantity irrelevant to the sentencing process. Congress adopted the less draconian method of making quantity a factor relevant to sentencing and mandating the weight to be accorded to additional quantities not proved beyond a reasonable doubt. U.S. v. Ebbole, 917 F.2d 1495 (7th Cir. 1990).
7th Circuit upholds upward departure based on outstanding warrants and pending charges. (170) The presentence report stated that there was reliable evidence that defendant engaged in bank fraud. The 7th Circuit found that since defendant failed to object to the presentence report, the district court’s upward departure based on defendant’s bank fraud was not clearly erroneous. Defendant also argued that it was unfair to use pending charges as a basis for sentencing, stating that when he was convicted for those other crimes, the future court would consider his current sentence which was based on those other crimes, creating a self-aggravating sentencing procedure. The 7th Circuit rejected this argument since the guidelines specifically permit a court to consider prior similar adult criminal conduct not resulting in a conviction as the basis for departure, and defendant was unable to provide any legal basis for invalidating this practice. U.S. v. Gaddy, 909 F.2d 196 (7th Cir. 1990).
8th Circuit counts losses to fraud victims found during financial planning seminars. (170) Defendant, who owned and operated an insurance business, defrauded his clients through a number of schemes, including failing to invest client funds as promised, selling property without owner’s permission and keeping the proceeds, and forging client signatures on checks. He also held financial planning seminars in which he offered to prepare wills for participants for a fee of $50 per will. He collected money but never prepared the wills. The Eighth Circuit upheld the district court’s finding that his offense involved 50 or more victims, holding that the court properly counted the victims of his uncharged wills-and-estate planning scheme. Defendant routinely held financial seminars to meet and develop relationships with potential victims and to determine whether they possessed assets he could steal. Given that the victims of the wills-and-estate planning scheme overlapped with the victims of other schemes, and that defendant used those seminars to find new victims, it was not clearly erroneous for the court to find they were part of the same course of conduct. U.S. v. Straw, 616 F.3d 737 (8th Cir. 2010).
8th Circuit includes tax loss that was counted as relevant conduct in prior prosecution. (170) In 1999, defendant was convicted of four counts of filing false tax returns for the years 1991 through 1994 and sentenced to 18 months’ imprisonment. In the instant case, he was convicted of five counts of filing false tax documents for the years 1996 through 2000. He argued that the district court erred by failing to reduce its tax loss calculations to exclude tax losses already assessed against him in the sentence he received for his earlier conviction. In defendant’s 1999 conviction, the district court added to the 1991 through 1994 tax loss about $83,000 in estimated unpaid taxes for the years 1996 and 1997. The Eighth Circuit found no error. Relevant conduct that has been considered in a prior sentencing can be a basis for subsequent prosecution without violating the double jeopardy clause so long as the earlier sentence was within the statutory or legislatively authorized punishment range. Defendant’s prior 18-month sentence was well within this range. U.S. v. Morse, 613 F.3d 787 (8th Cir. 2010).
8th Circuit rejects higher standard of proof for relevant conduct that significantly increases sentence. (170) Defendants pled guilty to conspiring to distribute more than 500 grams of methamphetamine, but the district court found them responsible for more than 15 kilograms. Defendants argued that the district court violated due process when it refused to require proof of drug quantity facts by clear and convincing evidence. Previous Eighth Circuit cases have adopted (although never actually applied) the Third Circuit’s view in U.S. v. Kikumura, 918 F.2d 1084 (3d Cir. 1990) that due process may require a heightened standard of proof for “extremely disproportionate” sentencing factors. The Eighth Circuit noted that these cases were based on a flawed reading of Supreme Court precedent, and in any event, were made obsolete by Booker. Booker granted sentencing judges far more discretion to impose sentences outside the applicable guideline range. This change eliminated any due process concern requiring a heightened standard of proof for fact finding that has an “extremely disproportionate” impact on the defendant’s advisory sentencing range. (8th Cir. 2009).
8th Circuit includes third-party tax losses as “relevant conduct.” (170) Defendant was a partner in a retail business that sold gold and silver coins and a trust system. Defendant advised purchasers that, by funneling funds through the trusts, they could eliminate their tax liability by deducting personal expenses from taxable income. Defendant and his wife personally used the trust system, and between 1999 and 2004, they filed Form 1040 returns that failed to report taxable income, causing a tax deficiency of over $600,000. The district court found that under § 2T1.1, defendant was responsible for a tax loss of $1,082.027, which included $427,770 in third-party tax deficiencies. Defendant did not object at sentencing, and on appeal, the Eighth Circuit found no plain error in including third-party tax losses in defendant’s offense level calculation. Defendant filed his taxes using the same trust/deduction system that he advised customers to use. Defendant’s advice to third-parties was “relevant conduct” as part of a related “common scheme or plan.” U.S. v. Aldridge, 561 F.3d 759 (8th Cir. 2009).
8th Circuit applies stolen firearm enhancement for gun that was part of relevant conduct. (170) Defendant was convicted of possessing an unregistered firearm. She also possessed two handguns, one of which was stolen, and received a § 2K2.1(b)(4) enhancement for possessing a firearm that was stolen. Defendant argued that the connection between the stolen handgun and the crime of possessing an unregistered shotgun was “too attenuated” for the enhancement to apply. The enhancement applies “[i]f any firearm was stolen.” The Eighth Circuit affirmed the increase, holding that it applies whenever a stolen firearm is involved in the offense of conviction or in relevant conduct. Here, defendant’s possession of a stolen handgun was part of the same course of conduct as her possession of the unregistered firearm. U.S. v. Cole, 525 F.3d 656 (8th Cir. 2008).
8th Circuit upholds increase where possession of additional guns was relevant conduct. (170) Defendant was convicted of possessing an unregistered firearm. This district court increased her sentence under § 2K2.1(b)(1)(A) for possessing three firearms. On appeal, she argued that the court should not have considered the two handguns found in her house because they were not part of the offense of conviction. The Eighth Circuit held that the enhancement was proper because, under §1B1.3, the possession of the additional handguns was relevant conduct to the offense of conviction. Defendant possessed all three weapons at the same time and place. She told police that she had the short-barreled shotgun to protect her family in light of the unsolved murder of her son, and she did not offer a different explanation for the handguns. U.S. v. Cole, 525 F.3d 656 (8th Cir. 2008).
8th Circuit holds that use of relevant conduct did not violate Apprendi. (170) Defendant contracted to cut and haul timber for several different landowners. Defendant was to deliver the timber to specific mills, but diverted some of the loads to unauthorized mills and disguised the source of the timber. The district court included in its sentencing calculations the loss caused by relevant conduct, and concluded that a loss of more than $350,000 was supported by a preponderance of the evidence. The Eighth Circuit held that the use of relevant conduct did not violate Apprendi v. New Jersey, 530 U.S. 466 (2000), since the use of defendant’s acquitted conduct did not put his sentence beyond the statutory maximum. A jury is not required to make factual findings as to all matters that enhance a sentence. See U.S. v. Madrid, 224 F.3d 757 (8th Cir. 2000) (acquitted conduct proven by a preponderance of the evidence can be used to enhance sentence). U.S. v. Wainright, 351 F.3d 816 (8th Cir. 2003).
8th Circuit finds cross-reference to murder guideline did not violate due process. (170) Defendant was convicted of robbery, conspiracy, gun-trafficking, and use of a gun in a crime of violence. The recommended guidelines sentence of life imprisonment was adjusted to comply with the statutory maximum sentences set for each of defendant’s offenses, yielding a total sentence of 540 months. Defendant argued that his sentence violated due process because this was a case where “a sentencing enhancement factor becomes ‘a tail which wags the dog of the substantive offense.’” The Eighth Circuit disagreed. This was not a case where a defendant received a life sentence based on the federal court’s finding that it “was more likely than not” that he committed murders for which he had been acquitted. Defendant was convicted by a federal judge of armed robbery. Section 2B3.1(c)(1) provides that “if a victim was killed under circumstances that would constitute murder under 18 U.S.C. § 1111” the court should apply § 2A1.1 (First Degree Murder). Section 111(a) defines “murder” to include felony murder. There was no question that defendant could have been convicted of felony murder. U.S. v. Al-Muqsit, 191 F.3d 928 (8th Cir. 1999), vacated in part on other grounds by U.S. v. Logan, 210 F.3d 820 (8th Cir. 2000).
8th Circuit, en banc, considers uncharged property crimes as relevant conduct. (170) Defendant pled guilty to one count of theft from an interstate shipment. The government sought to include seven uncharged thefts in the sentencing calculation, pursuant to the relevant conduct guideline, section 1B1.3. The district court refused, holding section 1B1.3 unconstitutional. A panel of the 8th Circuit found it unnecessary to reach the constitutional issues, ruling that consideration of the uncharged thefts under the relevant conduct guideline exceeded the statutory authority granted to the Sentencing Commission. On rehearing en banc, the 8th Circuit reversed and held that section 1B1.3(a)(2) is authorized by statute and is not unconstitutional. The broad grants of authority in 28 U.S.C. section 994(c)(2) gave the Sentencing Commission full authority to adopt a relevant conduct guideline. The court also held that consideration of uncharged conduct at sentencing does not violate constitutional rights to indictment, jury trial or proof beyond a reasonable doubt. The guidelines’ use of relevant conduct does not effectively transform the sentencing phase into a new guilt phase: uncharged conduct is a sentencing factor, not a new element of the offense. Judges Beam, Bright, Lay and McMillian dissented. U.S. v. Galloway, 976 F.2d 414 (8th Cir. 1992) (en banc).
8th Circuit affirms 2A2.1(b)(4) enhancement even though defendant was not convicted of conspiracy. (170) Defendant paid a confidential informant to kill a government witness. He received an enhancement under section 2A2.1(b)(4), which applies “if a conspiracy or assault was motivated by a payment or offer of money or other thing of value.” The 8th Circuit rejected defendant’s argument that the enhancement was improper because he was convicted of attempted murder rather than conspiracy or assault. Application note 1 to section 1B1.3(a)(1) makes it clear that a defendant need not be charged with conspiracy in order for the court to take into account conspiratorial conduct in applying the guidelines. U.S. v. Sims, 952 F.2d 1014 (8th Cir. 1991).
8th Circuit rules that loss under fraud guideline must be based on all relevant conduct. (170) Defendant pled guilty to three counts of mail fraud in connection with the sale of three cars with altered odometer readings. In exchange for his plea, the government dismissed a conspiracy count involving over 300 cars with altered odometer readings brought to defendant’s car auction by other car dealers. The district court determined the amount of loss caused by defendant’s offense under guideline section 2F1.1(b) based solely upon the three cars involved in the offense of conviction. The court refused to hear evidence relating to defendant’s involvement in the conspiracy. The 8th Circuit ruled that the loss resulting from the conspiracy could be included in the loss calculation if the conspiracy was part of the same course of conduct or common scheme or plan as the mail fraud counts. The case was remanded because it was unclear whether the district court refused to consider the conspiracy evidence because it believed the conspiracy was not relevant conduct, or because it believed that loss under section 2F1.1(b) could only be based upon the offense of conviction. The court rejected the government’s contention that the conspiracy was part of the offense of conviction because the mail fraud counts to which defendant pled guilty contained a preamble incorporating by reference assertions contained in the conspiracy count. U.S. v. Morton, 957 F.2d 577 (8th Cir. 1992).
9th Circuit finds possession of uncharged guns is not relevant conduct. (170) Police officers found 28 guns in defendant’s house, including an unregistered machine gun. Defendant was found guilty of possession of the unregistered machine gun, in violation of 18 U.S.C. § 922(o); he was not charged with offenses arising out of his possession of the other 27 guns. At sentencing, the district court enhanced defendant’s sentence under 2K2.1(b)(1) by six levels because defendant had 28 firearms. The Ninth Circuit held that the uncharged firearms were not relevant conduct to the offense of possessing an unregistered machine gun, and that the district court therefore erred in imposing the six-level enhancement. U.S. v. Vargem, 747 F.3d 724 (9th Cir. 2014).
9th Circuit finds misrepresentation in bankruptcy was relevant conduct for fraud. (170) The fraud guideline, 2B1.1(b)(9)(B), requires a two-level enhancement if the offense involved misrepresentation during a bankruptcy proceeding. Defendant gave a false statement in a bankruptcy proceeding four years after completing the fraud for which he was convicted. The Ninth Circuit held that the misrepresentation in the bankruptcy proceeding was relevant conduct to the fraud offense because it occurred in attempting to avoid detection for that offense. U.S. v. Tanke, 743 F.3d 1296 (9th Cir. 2014).
9th Circuit finds failure to pay taxes for companies was relevant conduct. (170) At defendant’s sentencing for evading payroll taxes, the district court included as relevant conduct defendant’s failure to withhold taxes from the 35 companies for which defendant provided payroll services. The Ninth Circuit upheld this determination, finding that defendant devised the payroll systems and administered them in the same illicit manner as the payroll services for his own company, and therefore his failure to pay taxes for other companies constituted relevant conduct. U.S. v. Kahre, 737 F.3d 554 (9th Cir. 2013).
9th Circuit says resisting arrest should be counted in illegal reentry offense level, not criminal history. (170) Defendant was convicted in state court of resisting arrest by fleeing from officers. When he finished his sentence for that offense, the government charged him with illegal reentry after deportation. At defendant’s sentencing for illegal reentry, defendant argued that his resisting arrest conviction should not be included in his criminal history score because he resisted arrest with the intent to avoid being arrested for illegal reentry. The district court disagreed, but the Ninth Circuit reversed. The court of appeals held that under the “relevant conduct” guideline, § 1B1.3(a)(1)(A), conduct that occurs “in the course of attempting to avoid detection” for the crime of conviction should be included in the specific offense characteristics of the offense and not counted toward a defendant’s criminal history score. U.S. v. Rivera-Gomez, 634 F.3d 507 (9th Cir. 2011).
9th Circuit says end date of conspiracy with ex post facto concerns is not “relevant conduct.” (170) On June 6, 2001, the Commission amended the Guidelines to increase the penalties for ecstasy. Defendant pleaded guilty to an indictment that alleged that he participated in a conspiracy to distribute ecstasy that continued until October 18, 2001, and the court imposed a sentence under the June 6, 2001 amendment. The Ninth Circuit reversed, holding that that defendant’s guilty plea did not constitute an admission that he engaged in conduct that occurred after the effective date of the new amendment. Moreover, on remand, the government would not be allowed to show that the conspiracy continued after the effective date of the amendment, because unlike an overt act, the end date of a conspiracy with ex post facto concerns is not “relevant conduct” under guideline section 1B1.3. Judge Hall dissented from this remand limitation. U.S. v. Forrester, 616 F.3d 929 (9th Cir. 2010).
9th Circuit upholds loss calculation in multi-defendant fraud scheme. (170) Defendants executed a fraudulent investment scheme. One defendant, Treadwell, was the mastermind of the scheme; another, Sluder, was Treadwell’s second in command; and a third, Saturday, was the salesman and sales-force trainer. At Sluder’s sentencing on fraud charges, the district court found him responsible for all the losses caused by the conspiracy because it found that Sluder was involved from start to finish and that he played a principal role in the scheme. At Saturday’s sentencing, the district court determined that the conspiracy obtained $38 million in fraudulent gains while he was a member, but attributed only $22 million to Saturday when calculating the loss caused by defendant’s offense. The Ninth Circuit held that the district court had fulfilled its duty under § 1B1.3 to attribute only losses that were reasonably foreseeable to each defendant. U.S. v. Treadwell, 593 F.3d 990 (9th Cir. 2010).
9th Circuit says relevant conduct may be in furtherance of joint activity or reasonably foreseeable. (170) Under §1B1.3 of the Guidelines, a defendant’s sentence should be calculated based on conduct in “jointly undertaken criminal activity” only when the conduct is undertaken in furtherance of the joint activity and it is reasonably foreseeable. In a special verdict form at defendant’s drug-trafficking trial, the district court allowed the jury to find that defendant was responsible for conduct if it was undertaken in furtherance of the joint activity or reasonably foreseeable. The Ninth Circuit held that the district court did not commit plain error by using the disjunctive in the special verdict form. U.S. v. Reed, 575 F.3d 900 (9th Cir. 2009).
9th Circuit upholds use of related retail losses in calculating loss in bank fraud scheme. (170) Defendant managed a scheme to defraud in which members of the conspiracy stole personal identification information from the victims. Most of the stolen information was used to cash checks on the victims’ bank accounts, but the conspirators also used the stolen information to obtain credit from retail establishments. At defendant’s sentencing for bank fraud, the district court included the losses suffered by the retail establishments in the loss calculation. The Ninth Circuit held that the retail fraud was relevant conduct to the scheme to defraud the banks and that the district court properly included those losses in the loss calculation. U.S. v. Armstead, 552 F.3d 769 (9th Cir. 2008).
9th Circuit finds firearm possession and conspiracy in same period were not relevant conduct. (170) Defendant, a convicted felon, participated in a conspiracy to commit a robbery. Based on that conduct, he was convicted under state law. The robbery investigation uncovered evidence that defendant possessed a firearm, and he was convicted in federal court of possession of a firearm by a convicted felon. Under an application note to § 4A1.2, a prior conviction does not count toward defendant’s criminal history score if the prior offense rests on behavior that qualifies as relevant conduct under the Guidelines. The Ninth circuit held that robbery conspiracy was not relevant conduct to the firearm offense because the evidence showed that defendant possessed the firearm during events unrelated to the conspiracy. U.S. v. Marler, 527 F.3d 874 (9th Cir. 2008).
9th Circuit finds that arranging to have boy perform sex acts was relevant conduct for child porn offense. (170) Defendant was convicted of transporting child pornography, in violation of 18 U.S.C. § 2252A(a)(1), after police arrested him for arranging through the Internet for a 14-year-old boy to perform sex acts for others. The pornography that defendant transported consisted of photographs of the 14-year-old that defendant posted on the Internet. The Guideline for defendant’s offense, § 2G2.1(b)(2)(A), requires a two-offense level enhancement if the offense involved “the commission of a sexual act or sexual conduct.” Defendant argued that the court erred in assessing that enhancement because he had not pleaded guilty to offenses arising out of his activities with the boy. The Ninth Circuit held that the term “offense” in § 2G2.1(b)(2)(A) includes relevant conduct for the offense of conviction and that defendant’s arranging sexual trysts for the boy was relevant conduct for the offense of conviction. U.S. v. Stoterau, 524 F.3d 988 (9th Cir. 2008).
9th Circuit says injury caused by smugglers who delivered aliens to defendant supported enhancement. (170) A defendant convicted of transporting aliens is subject to an offense-level enhancement if the offense caused a person to sustain bodily injury. § 2L1.1(b)(6). Defendants picked up five aliens, including three young children, who had been brought across the desert into the U.S. The smugglers who brought the children into the country ran out of water, and after defendants picked up the group, one of the children became unconscious and unresponsive due to heat and dehydration. The Ninth Circuit upheld the district court’s imposition of a “bodily injury” enhancement on defendants because the child suffered injury due to activity that defendants had jointly undertaken with others. U.S. v. Miguel, 368 F.3d 1150 (9th Cir. 2004).
9th Circuit says jointly undertaken relevant conduct must be reasonably foreseeable and in furtherance of conspiracy. (170) In 1992, the relevant conduct guideline, § 1B1.3(a)(1)(B), was amended to provide that a defendant’s offense level should be determined based on his own acts and, in the case of jointly undertaken criminal activity, all reasonably foreseeable acts of others in furtherance of the jointly undertaken criminal activity that occurred during the offense. The Ninth Circuit held that to constitute relevant conduct under this amendment, conduct must be both reasonably foreseeable and in furtherance of the jointly undertaken criminal activity. The court disavowed an earlier decision, U.S. v. Gutierrez-Hernandez, 94 F.3d 582 (9th Cir. 1996), which held that each conspirator was accountable for conduct that he reasonably foresaw or that fell within the scope of his particular agreement. U.S. v. Ortiz, 362 F.3d 1274 (9th Cir. 2004).
9th Circuit holds use of “relevant conduct” is not unconstitutional under Apprendi. (170) The Ninth Circuit rejected a defendant’s contention that Apprendi v. New Jersey, 530 U.S. 466 (2000), renders the relevant conduct guideline, § 1B1.3, unconstitutional because it permits courts to impose a sentence based on drug quantity neither charged in the accusatory pleading nor proven beyond a reasonable doubt. Instead, the court held, application of § 1B1.3 is constitutional because a sentence based in part on relevant conduct cannot exceed the statutory maximum for the underlying offense of conviction. U.S. v. Ochoa, 311 F.3d 1133 (9th Cir. 2002).
9th Circuit finds one robber’s use of a dangerous weapon was foreseeable to the others. (170) Two defendants went into the bank to rob it while a third waited in the car and a fourth approached the security guard and pressed a hard object into his back, which turned out to be a screwdriver. The district court found that the fourth defendant’s use of a dangerous weapon (the screwdriver) was foreseeable to the other defendants and on appeal, the Ninth Circuit affirmed. The robbers all knew that they were going to have to intimidate any customers, tellers, and guards who were present. None of the defendants explained how the fourth defendant would have been expected to subdue the guard other than by showing or pretending to have some sort of weapon. The district court’s factual finding that the use of a dangerous weapon was foreseeable was “not clearly erroneous.” U.S. v. Lavender, 224 F.3d 939 (9th Cir. 2000).
9th Circuit holds that relevant conduct includes acts beyond the statute of limitations. (170) In sentencing defendant for embezzlement under § 2B1.1, the court included twelve checks written more than five years before the return of the indictment, which were beyond the applicable statute of limitations. Including these amounts increased defendant’s base offense level by one level. On appeal, the Ninth Circuit affirmed, agreeing with eight other circuits which have held that consideration of conduct outside the statute of limitations is permitted under the guidelines. This is consistent with Congress’s directive in 18 U.S.C. § 3661 that “[n]o limitation shall be placed on the information concerning the background, character, and conduct of a person convicted of an offense which a court of the United State may receive and consider for the purpose of imposing an appropriate sentence.” U.S. v. Williams, 217 F.3d 751 (9th Cir. 2000).
9th Circuit says defendant “willfully caused” gun to discharge even though it was accidental. (170) Defendant argued that the discharge of the gun should not have been considered under the relevant conduct guideline, § 1B1.3, because it was accidental, not “willfully caused.” He relied on U.S. v. Gordon, 64 F.3d 281 (7th Cir. 1995), which held that when a third party fires a gun in the course of a crime, it must be shown that the defendant “willfully caused” him to do so before the conduct may be considered against the defendant. The Ninth Circuit held that the situation here was quite different, because the defendant himself fired the gun. Under § 1B1.3 the defendant is responsible for “all acts and omissions committed . . . or willfully caused by the defendant.” “Willfully” modifies “caused,” not “committed.” U.S. v. Wright, 215 F.3d 1020 (9th Cir. 2000).
9th Circuit says district court may consider evidence ruled inadmissible at trial as relevant conduct. (170) At sentencing, the district court considered evidence that defendant knew methamphetamine was being manufactured on his property and held him responsible for this relevant conduct under § 1B1.3. The evidence had been excluded at trial, but the Ninth Circuit held that a district court may consider evidence ruled inadmissible at trial in determining relevant conduct at sentencing. The evidence was supported by a witness who was now cooperating with the government, who testified that he had worked in the defendant’s laboratory. U.S. v. Mattarolo, 209 F.3d 1153 (9th Cir. 1999).
9th Circuit finds uncharged check was “relevant conduct” in bank fraud case. (170) Shortly before depositing one of the fraudulent checks charged in the indictment, defendant issued a worthless check for $47,000 to pay for a shipment of prize notification postcards from Barbados to the United States. The Ninth Circuit upheld counting this check as relevant conduct under § 1B1.3. Under U.S. v. Hahn, 960 F.2d 903, 910 (9th Cir. 1992), the court must consider the conduct’s “similarity, regularity and temporal proximity” to the charged offenses. Although the element of “regularity” was missing here, the “similarity” and “temporal proximity” elements were strong, so there was no clear error. U.S. v. King, 200 F.3d 1207 (9th Cir. 1999).
9th Circuit forbids departure based on conduct uncharged or dismissed in plea agreement. (170) Because the prosecution doubted that it could prove at trial which of the two parents was responsible for abusing their infant daughter, the defendants were allowed to plead guilty to making a false statement to the FBI. The district court accepted the plea agreement but then departed upward to sentence them under the aggravated assault guideline. On appeal, the Ninth Circuit held that this was plain error. Prior Ninth Circuit cases make it clear (although the Second, Third, Fourth, Fifth and Tenth Circuits disagree) that uncharged or dismissed conduct, in the context of a plea agreement, is an illegal basis for a departure. See U.S. v. Faulkner, 952 F.2d 1066 (9th Cir. 1991). Moreover, under § 6B1.2(a) a court may accept a plea agreement only if it determines “that the remaining charges adequately reflect the seriousness of the actual offense behavior.” If the district court felt the plea bargain did not reflect the seriousness of the defendants’ conduct, the correct remedy was to reject the plea agreement, not to depart upward. Furthermore, relevant conduct may be considered only in imposing guideline adjustments. It may not be used to select a guideline under § 1B1.2. U.S. v. Lawton, 193 F.3d 1087 (9th Cir. 1999).
9th Circuit says “on-line molestation” was reasonably foreseeable. (170) Defendant joined an on-line chat group called the Orchid Club so that members could share child pornography and advise one another on how to produce it. The Ninth Circuit held that even though defendant did not have advance notice of, or participate in, the on-line molestation of a ten-year old girl, the act was both reasonably foreseeable and “in furtherance of the jointly undertaken criminal activity,” under § 1B1.3(a)(1)(B). Thus, it was proper for the district court to treat this act as “relevant conduct” and increase his offense level by one under § 2G2.1(c) and Chapter 3, part D, which deals with multiple counts. U.S. v. Laney, 189 F.3d 954 (9th Cir. 1999).
9th Circuit upholds increase for restraining victim “in the course of” relevant conduct. (170) Guideline § 3A1.3 provides for a two-level enhancement if a victim is physically restrained “in the course of the offense.” The Ninth Circuit agreed with the Sixth Circuit’s opinion in U.S. v. Cross, 121 F.3d 234 (6th Cir. 1997) that the phrase “in the course of the offense” refers to the “relevant conduct” under § 1B1.3. In the present case, defendant was convicted of possession of a firearm by a prohibited person in violation of 18 U.S.C. § 922(g)(9). At the time he restrained his wife in her car in front of their apartment, he had dominion over the apartment where the gun was stored. “Because the legal definition of possession includes having dominion over the premises in which the contraband is concealed [defendant] possessed the weapon while restraining [his wife] at her car.” The two-level enhancement was proper. U.S. v. Johnson, 187 F.3d 1129 (9th Cir. 1999).
9th Circuit reverses “schoolyard” increase where conviction was under § 841. (170) Defendant pled guilty to distributing cocaine base in violation of 21 U.S.C. § 841, in return for dismissal of counts charging distribution of cocaine base within 1,000 feet of a school. At sentencing, the district court, sua sponte, increased the sentence by two levels under § 2D1.2, for conduct occurring near a protected location. The Ninth Circuit reversed, holding that when a defendant is convicted only under § 841, the increase under § 2D1.2 does not apply, because § 2D1.2 does not list § 841 as one of the offenses to which it applies. The panel rejected the government’s argument that selling within 1,000 feet of a school was “relevant conduct,” because “[s]ection 1B1.3 does not envision consideration of ‘relevant conduct’ in ascertaining which guideline to apply.” The Fifth Circuit reached the same result in U.S. v. Chandler, 125 F.3d 892 (5th Cir. 1997). The Fourth and Eleventh Circuits have gone further, holding that § 2D1.2 does not even apply when the defendant is convicted of conspiracy under § 846. U.S. v. Locklear, 24 F.3d 641 (4th Cir. 1994); U.S. v. Saavedra, 148 F.3d 1311 (11th Cir. 1998). On the other hand, the Sixth and Eighth Circuits in U.S. v. Benjamin, 138 F.3d 1069 (6th Cir. 1998); and U.S. v. Oppedahl, 998 F.2d 584 (8th Cir. 1993), have approved use of § 2D1.2 where defendant is convicted of a drug conspiracy under § 846 because the Statutory Index in Appendix A for § 846 lists § 2D1.2 as one of many possible guidelines that may apply. U.S. v. Crawford, 185 F.3d 1024 (9th Cir. 1999).
9th Circuit upholds loss calculation where defendant posed as surety for government contracts. (170) Defendant was convicted of fraud and making false statements after he fraudulently posed as a surety for at least nine government contracts, causing substantial losses to the government through the improper awarding of contracts. He argued for the first time on appeal that he could not have reasonably foreseen that he would be accepted as a surety on certain government contracts, and therefore should not have been held responsible for those losses. The Ninth Circuit rejected the argument, holding that defendant was “not being held responsible for anything other than that which has been caused by his own activity in the furtherance of his own scheme.” Thus, “reasonable foreseeability” under § 1B1.3(a) (1)(B) was satisfied. U.S. v. Palomba, 182 F.3d 1121 (9th Cir. 1999).
9th Circuit holds co-defendant’s obstruction of taxes was relevant conduct and foreseeable. (170) Defendant argued that because his co-defendant’s tax liabilities had reached judgment before defendant joined the organization, he should not have been held responsible for the co-defendant’s tax amount. The Ninth Circuit rejected the argument, noting that obstruction of the collection of the co-defendant’s liabilities had not ended when defendant joined the organization. Moreover, defendant could foresee that the co-defendant would obstruct the IRS’s efforts to collect its judgment against the codefendant. Defendant knew that other persons were using the organization to filter money and prevent the collection of taxes. Because the co-defendant owned the land on which the organization was headquartered, it was foreseeable that the co-defendant was one of the people filtering money through the organization. U.S. v. Hopper, 177 F.3d 824 (9th Cir. 1999).
9th Circuit holds telemarketers liable for entire loss as relevant conduct. (170) Defendants argued that the sales by other Nortay telemarketers were not within the scope of the criminal activity they had agreed to undertake and therefore they should have been held accountable only for their own telemarketing sales under the “relevant conduct” section of the guidelines, 1B1.3. They relied on the Second Circuit’s decision in U.S. v. Studley, 47 F.3d 569, 576 (2d Cir. 1995) which held that the facts of that case could not support a finding that the defendant was responsible for the activities of other telemarketers. The Ninth Circuit founds Studley distinguishable. Unlike the telemarketers in Studley, the Nortay telemarketers did not work alone. They all worked together to further the scheme. Moreover, unlike the sales people in Studley, Nortay employees did not work on a pure commission basis. Instead, most of them received a salary. Thus Nortay’s sales people depended on the success of the Nortay operation as a whole for their financial compensation. Thus, the Ninth Circuit agreed with other courts of appeals which have held telemarketers responsible for the losses caused by other telemarketers in their fraudulent company. U.S. v. Blitz, 151 F.3d 1002 (9th Cir. 1998).
9th Circuit reverses drug quantities that were not foreseeable and not part of joint activity. (170) Defendant sold a small amount of methamphetamine to an undercover officer. The next day defendant made another sale to the officer, and this time defendant’s friend, Lineberry, was present. A month later, Lineberry sold the undercover agent much larger amounts of methamphetamine and cocaine on four different occasions. Defendant was not present at these later sales. Nevertheless, Lineberry testified that he would not have sold drugs to the agent if the defendant had not introduced them. The agent eventually seized substantial amounts of meth, cocaine and marijuana from Lineberry’s residence. Defendant was convicted of conspiracy, and at sentencing, the district court held him responsible for all of the drugs sold by Lineberry. On appeal, the Ninth Circuit reversed because the district court made no findings that the amounts sold by Lineberry were reasonably foreseeable to defendant. Nor was there sufficient evidence that Lineberry’s sales were in furtherance of the jointly undertaken criminal activity as required by the “relevant conduct” section of the guidelines, § 1B1.3. The district court did not explicitly adopt the presentence report and even if it had, there was nothing in the report to explain why defendant should be held responsible for Lineberry’s drug sales. Defendant was not paid any profit from these sales and had no contact with the drugs or the money. U.S. v. Whitecotton, 142 F.3d 1194 (9th Cir. 1998).
9th Circuit remands to decide how much of total tax loss was “foreseeable” to conspirator. (170) The district court found that defendant Ford was responsible for the entire tax loss attributed to the conspiracy, under the relevant conduct guideline, §1B1.3. On appeal, the Ninth Circuit rejected his argument that the loss calculation was too speculative, but found that Ford “may well have been tagged with a higher amount of tax loss than could reasonably have been foreseen by him under the circumstances.” Thus, the court remanded “for a specific determination of the amount of tax loss that was reasonably foreseeable to him based on the criminal conduct he agreed to undertake.” U.S. v. Ladum, 141 F.3d 1328 (9th Cir. 1998).
9th Circuit counts city ordinance convictions as criminal history, not as relevant conduct. (170) Defendant Ford was convicted of violating municipal ordinances in connection with buying and selling regulated property at his second hand store. He argued that these convictions should not have been used to increase his criminal history score because the conduct that led to the convictions was part of the present tax conspiracy. The Ninth Circuit rejected the argument, ruling that there was an “insufficient degree of similarity and connection between the current offense and the local offense.” The object of the tax conspiracy was to impede the IRS’s determination of co-defendant Ladun’s taxes. The ordinance violations involved different victims ¾ local authorities instead of the IRS ¾ and different societal interests ¾ the regulation of stolen property instead of tax collection. U.S. v. Ladum, 141 F.3d 1328 (9th Cir. 1998).
9th Circuit says total amount of loss from bank fraud was “reasonably foreseeable.” (170) Under guideline section 1B1.3, a conspirator’s sentence is to be based not on the actions of the conspiracy as a whole but rather on those actions that fall within the “scope of his or her agreement, or are otherwise “reasonably foreseeable.” Here, defendant argued that the failure to repay the loan resulted from the conduct of defendant’s codefendants—conduct over which defendant had no control and which was itself not part of the conspiracy. The Ninth Circuit disagreed, noting that, under the loss table of § 2F1.1, the sentence is properly based on actual loss even if this may be greater than the intended, expected, or foreseeable loss. While it may have been true that the failure to repay the loan was no fault of the defendant, there was no doubt that he conspired to obtain the money in the first instance. “It . . . was reasonably foreseeable that the falsification of documents in support of a loan application might lead to the approval of that loan request.” U.S. v. Sarno, 73 F.3d 1470 (9th Cir. 1995).
9th Circuit upholds finding that each defendant laundered over $10 million. (170) In calculating the “value of funds” laundered under 2S1.1(b)(2)(J), the district court must consider conduct beyond the counts on which the defendant was convicted where the acts “were part of the same course of conduct or common scheme or plan as the offense of conviction.” U.S.S.G. § 1B1.3(a)(2). Here, the uncharged transactions were for the same customers, during the same time period, and otherwise similar to those for which one defendant was convicted. The other defendant received over $10 million in deposits traced to money laundering operations, more than half of which was for the charged transactions. The district court’s findings wee affirmed. U.S. v. Golb, 69 F.3d 1417 (9th Cir. 1995).
9th Circuit applies guidelines where co-conspirator’s acts continued after November 1, 1987. (170) Defendant argued that the sentencing guidelines should not be applied to him because the last overt act committed directly by him occurred in 1986, before the guidelines became effective on November 1, 1987. The Ninth Circuit rejected his argument, finding that the overt acts committed by his co-conspirators after November 1, 1987, were “in furtherance of the conspiracy and were reasonably foreseeable by [defendant]” within the meaning of § 1B1.3, the relevant conduct guideline. U.S. v. Bracy, 67 F.3d 1421 (9th Cir. 1995).
9th Circuit upholds firearms enhancement based on codefendants’ guns in robbery. (170) Defendant’s sentence was increased by five levels under 2B3.1(b)(2)(C) because his codefendants brandished guns during the bank robbery. On appeal, he argued that the enhancement was erroneous because he did only entered the bank after being threatened by a codefendant, and did not brandish a gun or agree to the codefendants’ possession of guns. The Ninth Circuit rejected the argument, noting that defendant pled guilty to armed bank robbery, and that it was reasonable foreseeable to him that guns would be used in the robbery because he saw one codefendant hand another codefendant a gun before the robbery. Moreover, defendant did not merely stand by idly during the robbery. He leaped over the counter and demanded the teller to put money in a pillowcase. U.S. v. Lipsey, 62 F.3d 1134 (9th Cir. 1995).
9th Circuit finds that eight bribes were separate and totaled $52,000. (170) Defendant was convicted of one count of conspiracy and three counts of bribery of a public official. The sentencing judge found that defendant was accountable for all eight bribes as relevant conduct. He adjusted the offense level upward by two levels because more than one act of bribery occurred and by five levels because the total amount of the bribes was $52,000. The 9th Circuit upheld each of these findings, and agreed that all eight bribes were part of the relevant conduct for which defendant was accountable under §2C1.1. U.S. v. Kahlon, 38 F.3d 467 (9th Cir. 1994).
9th Circuit says abuse of trust may be based on conduct outside offense of conviction. (170) Defendant, a sheriff’s deputy, was convicted of structuring financial transactions to avoid reporting requirements. He was also accused of stealing money seized from suspected drug dealers, but the jury failed to reach a verdict on these charges. On appeal, defendant argued that the court erred in increasing his offense level for abuse of public trust because his employment with the sheriff’s department did not facilitate his structuring offense. The 9th Circuit found no error, noting that the November, 1990, amendment to the introductory commentary to Chapter 3, part B of the guidelines requires the court, in applying the abuse of trust adjustment, to consider relevant conduct outside the offense of conviction. The court upheld the district court’s finding that defendant committed the theft offenses and that the thefts and the structuring were parts of a “common scheme or plan” under the relevant conduct section of the guidelines. U.S. v. Duran, 15 F.3d 131 (9th Cir. 1994).
9th Circuit says relevant conduct must show similarity, regularity and temporal proximity. (170) Defendant argued that amounts of methamphetamine in her prior drug arrests should not have been considered in determining her base offense level. The 9th Circuit agreed, relying on its decision in U.S. v. Hahn, 960 F.2d 903, 907 (9th Cir. 1992), which held that before such prior acts can constitute “relevant conduct” under section 1B1.3(a)(2), the government must show, in “sufficient proportions,” the similarity, regularity and temporal proximity of the prior acts to defendant’s conduct here. Since the record did not contain the required findings, the sentence was vacated. U.S. v. Soyland, 3 F.3d 1312 (9th Cir. 1993).
9th Circuit holds defendant responsible for coconspirators’ intended tax loss. (170) The district court added thirteen points to defendant’s base offense level because his coconspirator falsely claimed approximately $4.9 million in tax refunds. The 9th Circuit found no error, noting that under guideline section 1B1.3(a)(1)(B), defendant was responsible for the reasonably foreseeable conduct of his coconspirators. The court noted that the 9th Circuit has rejected the contention that “loss” under section 2F1.1 means only actual loss. The government need only show the intended loss, and the intended loss “does not have to be realistic.” Nor does the fact that the claimed refund “was obviously fraudulent” reduce the amount of loss. U.S. v. Lorenzo, 995 F.2d 1448 (9th Cir. 1993).
9th Circuit bases sentence on “parked profits” in stockbroker’s account regardless of victim. (170) Defendant, a stockbroker, stole money from an account. The indictment charged that the client was the victim, but defendant argued that the money was “parked profits” which really belonged to his employer, Prudential Bache. The 9th Circuit found the argument unpersuasive, noting that in calculating the amount of loss the district court was required to consider “all such acts and omissions that were part of the same course of conduct or common scheme or plan as the offense of conviction.” Thus, in this case “parking his profits in the Stroe’s account was part of the same course of conduct as the offense of conviction, regardless of whether the indictment identified the Stroes or Pru-Bache as the victim.” U.S. v. Donine, 985 F.2d 463 (9th Cir. 1993).
9th Circuit limits drug conspirator’s liability to amount he agreed to distribute. (170) The guidelines say that defendant who is hired only to offload a single shipment of marihuana is not accountable for prior or subsequent shipments of marihuana because those acts are “not in furtherance of his jointly undertaken criminal activity. See guideline section 1B1.3, Application Note 1, illustration (e) [now illustration (c)(3) in the November 1, 1992 Guidelines]. Relying on this illustration and the 7th Circuit’s opinion in U.S. v. Thompson, 944 F.2d 1331, 1343-44 (7th Cir. 1991), the 9th Circuit vacated the sentences in this case and remanded to determine (1) the quantity of drugs distributed that were reasonably foreseeable by each conspirator and (2) the quantity of drugs distributed that were within the scope of the particular agreement that each defendant entered. The court noted that one defendant could not have “foreseen” the drugs distributed before he joined the conspiracy. The other defendant may not have foreseen the drug transactions of his competitor who also supplied drugs. U.S. v. Petty, 982 F.2d 1374 (9th Cir. 1992). (Noonan, J.)
9th Circuit upholds reliance on relevant conduct to sentence for all losses arising out of mail fraud scheme. (170) Defendant argued that his offense level should have been calculated by the amount of the check mailed in count one, i.e. $580, rather than the amount of the total scheme to defraud, $38,906. He contended that his stipulation that the total losses exceeded $120,000 could not bind him to a sentence unauthorized by law. The 9th Circuit rejected the argument, relying on the “relevant conduct” section of the guidelines, section 1B1.3, and the cases of U.S. v. Newbert, 952 F.2d 281, 283-84 (9th Cir. 1991) and U.S. v. Niven, 952 F.2d 289, 291 (9th Cir. 1991). The court said that because “there was no dispute that the losses associated with counts I and II arose out of a common scheme or plan, the district court was required to take into account all losses associated with both counts when determining the appropriate offense level under section 2F1.1(b). U.S. v. Scarano, 975 F.2d 580 (9th Cir. 1992).
9th Circuit reverses drug amounts in relevant conduct for lack of finding of reasonable foreseeability. (170) Under the “relevant conduct” section, 1B1.3(a)(2), a defendant is responsible for amounts of drugs that he could have “reasonably foreseen” in furtherance of a joint agreement. Here, there was nothing in the presentence report to indicate that defendant aided and abetted any drug sales before June 28, 1990 or was a member of a conspiracy prior to that date. The district court apparently thought that relevant conduct should include the amounts in all of the counts of the indictment. Since the court made no factual findings as to defendant’s involvement in the distribution of cocaine prior to June 28, 1990, the sentence was reversed and the case was remanded for express findings. U.S. v. Chavez-Gutierrez, 961 F.2d 1476 (9th Cir. 1992).
9th Circuit limits consideration of “relevant conduct.” (170) Relying on U.S. v. Santiago, 906 F.2d 867 (2nd Cir. 1990), the 9th Circuit held that to decide whether conduct is “relevant” within the meaning of guideline section 1B1.3(a)(2), “the sentencing court is to consider such factors as the nature of the defendant’s acts, his role, and the number and frequency of repetitions of those acts, in determining whether they indicate a behavior pattern.” There must be “sufficient similarity and temporal proximity to reasonably suggest that repeated instances of criminal behavior constitute a pattern of criminal conduct” (quoting Wilkins and Steer, Relevant Conduct: The Cornerstone of the Federal Sentencing Guidelines, 41 S.C. L. Rev. 495, 515-16 (1990). Thus, the court held, “the essential components of the section 1B1.3(a)(2) analysis are similarity, regularity, and temporal proximity.” When one component is absent the court must look for a stronger presence of at least one of the other components. This methamphetamine case was remanded for resentencing in light of the opinion. U.S. v. Hahn, 960 F.2d 903 (9th Cir. 1992).
9th Circuit holds that minor participant was not accountable for drugs distributed after arrest. (170) Application note 1 to U.S.S.G. section 1B1.3 notes that “relevant conduct is not necessarily the same for every participant.” Thus even though as a general rule, the fact that a conspirator is taken into custody does not automatically indicate disavowal of the conspiracy, the defendant here was only a “minor” participant. “Once in custody, she was in no position to continue her role as a drug distributor. Thus the 9th Circuit held that it “stretches a legal fiction to the breaking point to hold her accountable for the drugs . . . distributed after May 20, 1989.” U.S. v. Johnson, 956 F.2d 894 (9th Cir. 1992), superseded on other grounds by Guideline as stated in U.S. v. Martinez-Martinez, 369 F.3d 1076 (9th Cir. 2004).
9th Circuit, en banc, upholds relevant conduct section of guidelines. (170) The original panel opinion in this case, U.S. v. Restrepo, 883 F.2d 781 (9th Cir. 1989), held 2-1 that the relevant conduct section of the guidelines, § 1B1.3, conflicted with the multiple count section, and therefore the district court erred in aggregating “quantities of drugs in counts of which Restrepo was convicted with quantities . . . of which [he] was neither charged not convicted.” Id. At 786. On rehearing, the court changed its mind, and a new 2-1 opinion was filed upholding the relevant conduct section, ruling that aggregation of drug amounts “reflects the balance struck by the Sentencing Commission between a ‘real offense’ sentencing system . . .and a ‘charge offense’ system.” 903 F.2d 648, 653 (9th Cir. 1990). The full court then granted rehearing en banc, and agreed with the new panel opinion, ruling that relevant conduct could be proved at sentencing by a preponderance of the evidence. U.S. v. Restrepo, 946 F.2d 654 (9th Cir. 1991) (en banc).
9th Circuit, en banc, holds that preponderance of evidence standard applies at sentencing. (170) In a 7-4 opinion written by Judge Wiggins, the 9th Circuit, sitting en banc, upheld the preponderance of evidence standard of proof at sentencing. The majority noted that every circuit that has considered the question has applied this standard. The court noted that McMillan v. Pennsylvania, 477 U.S. 79, 91 (1986), recognized that there may be an exception to the general rule “when a sentencing factor has an extremely disproportionate effect on the sentence relative to the offense of conviction.” But here, the judge found that in addition to the 37 grams of cocaine involved in the counts of conviction, defendant was responsible for 65 grams associated with the conviction of his codefendant. The 9th Circuit found that increasing the guideline range from 12 to 20 months for these additional amounts was simply not “a tail which wags the dog of the substantive offense.” Judge Tang concurred separately, and Judges Pregerson, Norris, Hug and D. Nelson dissented. U.S. v. Restrepo, 946 F.2d 654 (9th Cir. 1991) (en banc).
9th Circuit holds that defendant’s oral agreement in open court constituted stipulation to more serious offense. (165) Pursuant to a plea agreement, defendant pled guilty to bank larceny and the government dropped bank robbery charges. However, as permitted by the plea agreement, the government presented the actual facts in open court. Defendant agreed with these facts. The district court found that defendant had stipulated, under guideline § 1B1.2(a), to the more serious offense of bank robbery, and thus sentenced him under the robbery guideline. The 10th Circuit affirmed, finding that a stipulation under § 1B1.2 need not be written. The provision “turns on whether there was a knowing agreement by the defendant, as part of a plea bargain, that facts supporting a more serious offense occurred and could be presented to the court for application of guidelines relating to the more serious offense.” Defendant not only agreed in open court to the bank robbery facts, but refused the district court’s offer to let him withdraw his plea and go to trial if he disputed the existence of the agreement with respect to the more serious offense. U.S. v. Gardner, 940 F.2d 587 (10th Cir. 1991).
9th Circuit finds no need to stipulate to more serious guideline, where it was already the one most applicable. (165) A court may base a sentence on a more serious offense where the guilty plea stipulation specifically establishes the more serious offense. See guideline § 1B1.2(a). However, the § 1B1.2(a) exception “only applies where the court is choosing a guideline other than the one most applicable to the offense of conviction.” In this case the district court used the guideline most applicable to the offense charged, so there was no need for a stipulation. U.S. v. Cambra, 933 F.2d 752 (9th Cir. 1991).
9th Circuit says role in offense is not limited to offense of conviction, disapproving earlier dictum. (170) In U.S. v. Zweber, 913 F.2d 705 (9th Cir. 1990) the 9th Circuit approved in dictum of the 7th and D.C. Circuit’s view that the word “offense” as used in § 3B1.1 means “offense of conviction.” After Zweber was decided, the introductory commentary to chapter 3E was amended to state, “[t]he determination of a defendant’s role in the offense is to be made on the basis of all conduct within the scope of § 1B1.3 “and not solely on the basis of the elements and acts cited in the count of conviction.” Because of this change, the 9th Circuit held the adjustment for role in the offense under § 3B1.1 “is not limited to the offense of conviction.” Accordingly the court upheld a two level upward adjustment for defendant’s leadership role even though he was the only participant in the offense of conviction. U.S. v. Lillard, 929 F.2d 500 (9th Cir. 1991).
9th Circuit looks beyond the crime of conviction in imposing firearm enhancement. (170) The 9th Circuit stated that it was bound by the language of guideline § 1B1.3(a)(2) which says that specific offense characteristics “shall be determined on the basis of .ÿ.ÿ. all acts and omissions that were part of the same course of conduct or common scheme or plan as the offense of conviction.” Thus the court held that “for purposes of the firearm enhancement” the district court properly looked to all of the offense conduct, not just the crime of conviction. Distinguishing other cases, the court said that it has never required that guns and drugs be found in proximity to each other, in order to support a firearm enhancement. It must only be shown that the defendant “possessed the guns during the commission of the offense, and that it is not clearly improbable that the guns were connected with the offense.” U.S. v. Willard, 919 F.2d 606 (9th Cir. 1990).
9th Circuit upholds use of arson guidelines in mail fraud case. (165) Defendant pled guilty to mail fraud. Pursuant to guideline § 1B1.2, he stipulated that he conspired to blow up his store to collect the insurance proceeds. The district court sentenced him using the arson guidelines instead of the mail fraud guidelines, resulting in a sentence of five years — the statutory maximum. The 9th Circuit affirmed, noting that guideline § 1B1.2 expressly provides that a stipulation may establish a more serious offense than the offense of conviction, and that Application Note 13 to § 2F1.1 specifically suggests that a state arson offense might be prosecuted as a mail fraud where a fraudulent insurance claim is mailed. The court also found that the plea in this case was not inconsistent with guideline § 6B1.2, which requires courts to accept only pleas that reflect the seriousness of the conduct. U.S. v. Bos, 917 F.2d 1178 (9th Cir. 1990).
9th Circuit rejects 11th Circuit’s Pinkerton test for determining enhancement for coconspirator’s firearms possession. (170) In U.S. v. Otero, 890 F.2d 366 (11th Cir. 1989), the 11th Circuit established a three-part test for determining the propriety of enhancing the defendant’s sentence based on a coconspirator’s firearms possession. The 9th Circuit rejected this test on the ground that it dispensed with the requirement of reasonable foreseeability and relied on an erroneous interpretation of Pinkerton v. U.S., 328 U.S. 640 (1946). “More important, in relying on Pinkerton liability, the 11th Circuit’s opinion in Otero ignored the fact that coconspirator liability for the purpose of sentence enhancement has been dealt with explicitly in the guidelines.” The court held that the commentary to U.S.S.G § 1B1.3 “makes clear that reasonable foreseeability is a prerequisite to sentence enhancement on the basis of acts of a coconspirator.” U.S. v. Garcia, 909 F.2d 1346 (9th Cir. 1990).
9th Circuit limits bodily-injury adjustment to victim of charged assault. (170) Defendant pled guilty to assaulting agent Love with a handgun. The sentencing judge increased defendant’s offense level under § 2A2.2(b)(3) by two levels because defendant caused bodily injury to agent Purdy by colliding with his car while fleeing the assault on agent Love. The 9th Circuit held the adjustment improper because § 2A2.2(b)(3) calls for an adjustment in the case of injury to “the victim.” The court concluded that the section applied only when injury occurs to the victim of the assault charge on which the defendant has been convicted. While noting that § 1B1.3 authorizes considering all acts committed by a defendant during or while attempting to escape from the offense of conviction, the court concluded that this provision was overridden by the more specific language of § 2A2.2(b)(3). U.S. v. Graves, 908 F.2d 528 (9th Cir. 1990).
10th Circuit agrees that sale of third house was relevant conduct to real estate fraud. (170) Defendant was a real estate investor who conspired to defraud mortgage lenders by setting up sales to straw buyers at inflated prices, with the excess loan proceeds being distributed to defendant and others. He was convicted of conspiracy charges related to the sale of two houses. However, at sentencing, the district court included in its loss calculation the sale of a third residence. The Tenth Circuit upheld the court’s finding that the sale of the third house constituted relevant conduct. As with the other two sales, defendant used false loan applications and artificially inflated sales prices to obtain inflated loan proceeds from a lender. Although there were some dissimilarities between the transactions, this sale still involved a common purpose, common accomplices, and, at least in some aspects, a similar modus operandi. With all three transactions, defendant sought to defraud lenders into paying excessive loan proceeds based on artificially inflated sales prices and false loan applications. All three transactions involved the same seller and mortgage broker. U.S. v. Smith, 705 F.3d 1268 (10th Cir. 2013).
10th Circuit finds no error in refusal to consider co-defendants’ relevant conduct. 170) Defendant participated in a conspiracy to defraud a state government by submitting overbillings for the construction of a county courthouse. At defendant’s sentencing on fraud offenses, defendant sought to show that his co-defendants had been involved in a similar scheme to defraud the state in connection with other public construction projects. Defendant sought to introduce this evidence to show that he had played a minor role in the fraudulent conduct of his co-defendants over many years. The district court excluded this evidence of the co-defendants’ relevant conduct because it had not been used to calculate the co-defendants’ offense levels. The Tenth Circuit held that the district court properly refused to hear evidence of prior co-conspirator conduct that was never alleged in the indictment or used to sentence the co-conspirators. U.S. v. Martinez, 610 F.3d 1216 (10th Cir. 2010).
10th Circuit says defendant’s and co-defendant’s actions supported threat of death increase. (170) Defendant pled guilty to four bank robberies. In one robbery, defendant jumped on the teller’s countertop and ordered bank patrons to “[g]et on the [f***ing] ground.” When one customer did not comply, a co-defendant came up beside the customer and thrust something hard into the side of her stomach and ordered her again to get down. The Tenth Circuit held that defendant’s actions, combined with his co-defendant’s actions, supported an increase for an express threat of death. The co-defendant’s actions were attributable to defendant under § 1B1.3(a)(1). Defendant’s statement, in combination with the co-defendant’s actions, could “instill in a reasonable person, who is a victim of the offense, a fear of death.” Note 6 to § 2B3.1. During a bank robbery, a reasonable victim aggressively ordered to lie down, with a hard object thrust into his or her side for noncompliance, would experience a fear of death. A reasonable victim would conclude the robber had a weapon. U.S. v. Martinez, 602 F.3d 1166 (10th Cir. 2010).
10th Circuit treats uncharged loan as relevant conduct in calculating loss. (170) Defendant was convicted of making false statements in connection with bank loans secured by his Jaguar automobile. In calculating loss for sentencing, the district court included a third loan from a private individual, which was also secured by the same Jaguar automobile. In obtaining each loan, the defendant used his unlawful possession of car title documents to induce the trust of his creditors. The Tenth Circuit held that these facts were sufficient to support an inference of an “ongoing series of offenses, common purpose and common modus operandi,” thereby making the private loan relevant conduct for calculating loss with regard to the crimes of conviction. U.S. v. Williams, 292 F.3d 681 (10th Cir. 2002).
10th Circuit bases increase on restraint during relevant conduct. (170) In June 1999, defendant pled guilty to misdemeanor domestic violence charges. In August, defendant entered the home of his estranged wife, locked her in the bedroom and threatened her with a firearm. He escaped before police arrived. Six weeks later, he was arrested in possession of a gun, and ultimately pled guilty in federal court to possession of a firearm following conviction for a misdemeanor crime involving domestic violence. Guideline § 3A1.3 provides for a two-level enhancement if “a victim was physically restrained in the course of the offense.” Defendant argued that the restraint of his wife six weeks prior to the offense of conviction was not “in the course of the offense.” The Tenth Circuit held that the victim restraint enhancement can properly be based on restraint that occurs during relevant conduct. Section 1B1.3 says that unless otherwise specified, adjustments in Chapter Three (which includes the victim restraint provision), shall be determined on the basis of the various categories of relevant conduct. Section 3A1.3 does not “otherwise specify” a different meaning. U.S. v. Holbert, 285 F.3d 1257 (10th Cir. 2002).
10th Circuit holds that court made adequate findings to attribute losses caused by co-defendants. (170) Defendant was convicted of bank fraud in connection with a scheme to cash counterfeit checks at banks throughout New Mexico. Defendant argued that the district court made no findings regarding whether he agreed to jointly undertake the conduct of his co-defendants or whether that conduct was reasonably foreseeable. The Tenth Circuit found that the district court’s findings were adequate. The court determined that the conspirators traveled to New Mexico together, the travel reservations were made together, and they used the same transportation service once they arrived in New Mexico. In addition, the conspirators used the same checks, were committing the offense in the exact same manner, and went to the same banks. The court noted “I think that there are sufficient similarities and sufficient instances in which they are not only doing similar things, but doing them together, that it is appropriate in this context to attribute to all of them the full amount of loss.” These findings clearly supported the court’s conclusion that the fraudulent acts of defendant’s co-defendants were reasonably foreseeable to him and within the scope of his agreement. U.S. v. Tran, 285 F.3d 934 (10th Cir. 2002).
10th Circuit finds 1995 sexual abuse not part of 1994 travel to engage in sexual acts. (170) In May 1994, defendant drove from Florida to Oklahoma, picked up his sister’s children, and drove them to Florida to stay with him for the summer. During the trip and through the course of the summer, he molested his 11-year-old niece. In 1995, he again traveled to Oklahoma, picked up the kids, molested his niece and transported the kids to Florida, where he proceeded to molest his niece again through the course of the summer. Upon returning home, the girl informed her parents of the abuse. Based on his 1995 molestation, he pled no contest in Florida state court to sexual battery while in a custodial position. Defendant then pled guilty in federal court to traveling in interstate commerce in 1994 for the purpose of engaging in illegal sexual acts with a juvenile. The Tenth Circuit held that the Florida sexual battery conviction was properly included in defendant’s criminal history because it was not part of the instant offense. Because defendant’s Florida sentence was imposed prior to the sentence in his federal conviction, it qualified as a “prior sentence.” The “same course of conduct or common scheme or plan” approach in § 1B1.3(a)(2) only applies to offenses that are specifically groupable under § 3D1.2(d). The only question was whether defendant’s Florida conviction “occurred during the commission of the offense of” his federal conviction under § 1B1.3(a)(1). It did not. The two acts occurred on different occasions, separated by a temporal gap of almost a year, and involved multiple, separate instances of fear and harm. U.S. v. Cuthbertson, 138 F.3d 1325 (10th Cir. 1998).
10th Circuit permits consideration of time-barred acts as relevant conduct. (170) Defendant argued that the statute of limitations should have precluded any consideration at sentencing of checks she forged more than five years ago. The Tenth Circuit held that the statute of limitations does not bar consideration of relevant conduct for sentencing purposes. Defendant did not contend that the time-barred conduct was irrelevant to the charges on which she was properly convicted. U.S. v. Jaynes, 75 F.3d 1493 (10th Cir. 1996).
10th Circuit includes pre-guidelines conspiracy in drug quantity for guidelines offense. (170) Defendant was convicted of a cocaine conspiracy running from 1980 to July, 1987, and of distributing cocaine on May 20, 1992. The 10th Circuit approved the use of drug quantities involved in the pre-guidelines conspiracy to determine defendant’s base offense level for the guidelines distribution charge. This did not violate the ex post facto clause, the double jeopardy clause or due process, and was consistent with the relevant conduct guideline, section 1B1.3, since the drug quantities involved in the conspiracy were part of the same course of conduct as the distribution charge. The evidence, when viewed in its entirety, established that defendant was actively engaged in the same type of criminal activity, distribution of cocaine, from the 1980s through May, 1992. Defendant’s conduct was sufficiently similar and the instances of cocaine distribution were temporally proximate. U.S. v. Roederer, 11 F.3d 973 (10th Cir. 1993).
10th Circuit says counsel’s failure to predict inclusion of relevant conduct was not ineffective assistance. (170) The 10th Circuit held that defendant failed to show that counsel’s failure to predict that relevant conduct would be included in his offense level calculation was ineffective assistance entitling him to withdraw his guilty plea. A miscalculation or erroneous sentence estimation by defense counsel is not a constitutionally deficient performance rising to the level of ineffective assistance. Moreover, defendant failed to establish prejudice, given he pled guilty after being informed by the court that such conduct could be considered. U.S. v. Gordon, 4 F.3d 1567 (10th Cir. 1993).
10th Circuit upholds use of pre-guidelines tax loss to determine loss under section 2T1.1. (170) Defendant was convicted of three counts of tax evasion for the years 1985, 1986, and 1987. The first two counts were pre-guidelines offenses, the last count was a guideline offense. The 10th Circuit upheld a calculation of tax loss under section 2T1.1 for the guideline offense that included the loss involved in the pre-guidelines offenses. If defendant had been sentenced separately for the 1985 and 1986 offenses, his potential sentence would have been much greater. He could have received a five year sentence on each guideline count, rather than the 14-month maximum he received under the guidelines. U.S. v. Higgins, 2 F.3d 1094 (10th Cir. 1993).
10th Circuit affirms that defendant was responsible for accomplice’s actions in money laundering scheme. (170) In determining the value of the funds laundered in defendant’s money laundering scheme under guideline section 2S1.1(b), the district court considered the full amount of funds that defendant and his associate took from investors. The 10th Circuit affirmed that defendant was properly held accountable for the actions of his accomplice. Relevant conduct under section 1B1.3(a)(1) includes all acts which the defendant aided and abetted or for which he would otherwise be held accountable. Note 1 to section 1B1.3 indicates that conduct of others acting in concert with the defendant will be factored into the defendant’s sentence. Here, there was abundant evidence at trial and at sentencing that defendant’s accomplice was acting in concert with defendant in operating the scheme. U.S. v. Johnson, 971 F.2d 562 (10th Cir. 1992).
10th Circuit rules pre-November 1990 guidelines required role adjustments to be based on offense of conviction. (170) In U.S. v. Pettit, 903 F.2d 1336 (10th Cir. 1990), the 10th Circuit held that role adjustments must be based only on defendant’s role in the offense of conviction rather than other relevant conduct. In U.S. v. Riles, 928 F.2d 339 (10th Cir. 1991), it interpreted the same version of the guidelines as requiring the court to consider all relevant conduct in determining whether to grant a downward adjustment for a defendant’s mitigating role under section 3B1.2. The 10th Circuit noted that Pettit and Riles were “fundamentally at odds and lack[ed] any principled distinction.” Since Pettit was decided first, and Riles could not have overruled it, a district court prior to November, 1990 would have been required to follow Pettit’s analysis. However, effective November 1, 1990, the Introductory Commentary to Chapter 3, Part B was amended to state that role in the offense is to be based on all relevant conduct. U.S. v. Saucedo, 950 F.2d 1508 (10th Cir. 1991), abrogated on other grounds by Stinson v. U.S., 508 U.S. 36, 113 S.Ct. 1913 (1993).
10th Circuit rejects consideration of entrapment defense in determining relevant conduct. (170) Defendant pled guilty to one charge of distributing cocaine, and one charge of distributing crack. Defendant conceded that he was involved in the distribution of cocaine prior to his contact with undercover agents, but argued that he was entrapped by them into distributing the crack. Therefore, defendant contended it was improper for the district court to include the crack in determining his offense level. The 10th Circuit rejected defendant’s contention, since entrapment is an affirmative defense relevant only to whether defendant is guilty of the crime charged, not to sentencing. Since defendant pled guilty to distributing the crack, entrapment was not an issue. The “otherwise accountable” language in the relevant conduct guideline permits a court to consider acts in addition to the offense of conviction; it does not permit the defendant to raise at sentencing the issue of whether defendant is “otherwise accountable” for the offense of conviction. U.S. v. Riles, 928 F.2d 339 (10th Cir. 1991).
10th Circuit holds that “stipulation” § 1B1.2(a) is not void for vagueness. (165) U.S.S.G. § 1B1.2(a) provides that where a stipulation “specifically established a more serious offense than the offense of conviction,” the guidelines most applicable to the stipulated offense applies. Defendant argued that this section is unconstitutionally vague because it does not define “more serious offense” nor does it adequately set out criteria for determining the relative seriousness of an offense. The 10th Circuit found no merit to defendant’s argument. The guidelines provide a clear means by which the relative seriousness of offenses can be evaluated for purposes of sentencing. Degrees of seriousness can be evaluated by comparing each crime’s base offense level. The higher the level, the more serious the crime. U.S. v. Roberts, 898 F.2d 1465 (10th Cir. 1990).
11th Circuit bases fraud loss on entire amount billed, not just portion paid by Medicare. (170) Defendant, a dermatologist, was convicted of health care fraud, filing false claims and obstruction of justice in connection with Medicare reimbursement. She argued that the court clearly erred when it calculated the amount of loss based on the amount she billed to Medicare for each procedure instead of the amount of reimbursement she actually received. She argued that she was paid only 80 percent of the amount she billed to Medicare for each procedure she performed, and, because she was convicted of defrauding Medicare, the loss was the pecuniary harm that she inflicted on Medicare, and did not include the other 20 percent she was paid by private insurers and patients. The Eleventh Circuit disagreed. Defendant intended to receive the full amount that she billed Medicare as part of her fraud. She knew that she would be entitled to receive 80 percent of the billed amount from Medicare and the other 20 percent from either private insurance companies or patients. The losses sustained by the insurance companies and patients resulted from the fraud perpetrated on the Medicare program and was relevant conduct. U.S. v. Hoffman-Vaile, 568 F.3d 1335 (11th Cir. 2009).
11th Circuit holds that court erred in failing to make particularized loss findings for each defendant. (170) Defendants were participants in a counterfeit corporate cash checking ring that operated in South Florida from January 1997 until August 2000. The district court held three sentencing hearings and found that each defendant should be held responsible for the $125,000 in actual losses. The Eleventh Circuit held that the district court erred in determining each defendant’s relevant conduct. Although the court made findings regarding reasonable foreseeability, it did not determine the scope of the criminal activity that each defendant agreed to jointly undertake. Rather, the court held simply that because each defendant knew that he or she was part of a ring, he or she should be held accountable for all of the acts of all of the members. Because the court did not make particularized findings regarding the scope of defendants’ agreements, as required by U.S.S.G. § 1B1.3(a)(1)(b), the case was vacated and remanded for resentencing. U.S. v. Hunter, 323 F.3d 1314 (11th Cir. 2003).
11th Circuit says defendant not responsible for unforeseeable conduct. (170) Defendant Fuentes joined a stolen credit card conspiracy when he purchased two stolen credit cards from an undercover agent and used them to buy merchandise. One week earlier, a co-conspirator had also bought a stolen credit card and charged $2725 on it. The 11th Circuit held that in calculating the loss and number of victims involved in his offense under section 2F1.1(b), defendant could not be held responsible for the co-conspirator’s acts because they were not reasonably foreseeable to defendant. A conspiracy defendant can only be sentenced for co-conspirator acts that are committed in furtherance of the conspiracy and are reasonably foreseeable. U.S. v. Fuentes, 991 F.2d 700 (11th Cir. 1993).
11th Circuit holds that, as to other defendant, use of stolen credit card was reasonably foreseeable. (170) The 11th Circuit held that, as to defendant Colon, the losses caused by his co-conspirator’s use of a stolen credit card were reasonably foreseeable and thus, he could be held responsible for those losses. Colon was present when his co-conspirator bought a stolen credit card from an undercover agent. Later the conspirator charged $2,725 on the card. The district court’s finding that Colon could have reasonably foreseen that the co-conspirator would use the stolen credit card was not clearly erroneous. U.S. v. Fuentes, 991 F.2d 700 (11th Cir. 1993).
11th Circuit reviews relevant conduct under clearly erroneous standard. (170) The 11th Circuit reviewed under the clearly erroneous standard the district court’s determination of whether criminal activity was part of the same course of conduct as the offense of conviction. U.S. v. Rodgers, 951 F.2d 1220 (11th Cir. 1992), amended, 972 F.2d 1253 (11th Cir. 1992).
11th Circuit rejects claim that relevant conduct provisions are unconstitutional Bill of Attainder. (170) Defendant argued that guideline § 1B1.3, which permits a court to consider conduct other than that for which a defendant was indicted, is an unconstitutional Bill of Attainder. This provision, defendant contended, takes discretion away from the sentencing court, forcing it to consider, in his case, a quantity of drugs other than the drugs he was convicted of distributing. The 11th Circuit rejected this argument, noting that under circuit precedent, Congress has the power to restrict judicial discretion. Moreover, the consideration of all relevant conduct is a traditional sentencing practice. U.S. v. Bennett, 928 F.2d 1548 (11th Cir. 1991), superseded on other grounds by guideline as stated in U.S. v. Smith, 127 F.3d 1388 (11th Cir. 1997).
11th Circuit rejects enhancement based on defendant’s use of firearm seven months after drug transaction. (170) Seven months after a drug transaction involving a government informant, defendant discovered the informant, got into an argument with him and shot and missed him. The 11th Circuit reversed an enhancement based upon defendant’s possession of a firearm during a drug transaction. The only evidence of firearm possession was defendant’s act of retaliation against the informant, which occurred seven months after the drug transaction. The court rejected the government’s contention that since the altercation was about the drug transaction, the firearm could be tied in as relevant conduct. Guideline § 1B1.3 authorizes the use of relevant conduct “unless otherwise specified.” The enhancement in § 2D1.1(b)(1) “would appear to be “otherwise specified,” which precludes application of § 1B1.3. U.S. v. Bennett, 928 F.2d 1548 (11th Cir. 1991), superseded on other grounds by guideline as stated in U.S. v. Smith, 127 F.3d 1388 (11th Cir. 1997).
11th Circuit upholds consideration of funds found in defendant’s apartment. (170) Defendant pled guilty to money laundering, and was sentenced on the basis of $378,000 found in his apartment. The government contended that the district court misapplied the relevant conduct provision of the guidelines by failing to consider the amount of money involved in the total scheme rather than just the funds attributable directly to defendant. The 11th Circuit upheld the district court’s action. The government bore the burden of proof on this issue. A review of the record indicated that the district court understood it was to consider the total amount of funds involved in the criminal conduct. The district court’s calculation included the funds seized at defendant’s apartment and the monies he admitted delivering that day. U.S. v. De La Rosa, 922 F.2d 675 (11th Cir. 1991).
D.C. Circuit reverses relevant conduct ruling for lack of finding of temporal proximity. (170) Defendant produced false identifications and counterfeit documents that were used by others to bilk several banks out of more than $110,000. He pled guilty to possession of false document-making implements, in violation of 18 U.S.C. § 1028(A)(5). The district court ruled that the loss caused by the bank fraud scheme was relevant conduct, finding that defendant aided and abetted the fraud. The D.C. Circuit reversed. The district court did not clearly err in finding that defendant aided and abetted the bank fraud. However, the court did not address whether defendant’s aid to the fraud occurred “during the commission of the offense of conviction, in preparation for that offense, or in the course of attempting to avoid detection or responsibility for that offense.” § 1B1.3(a)(1). To include the bank fraud within the temporal component of the relevant conduct provision, it must be shown that the tools defendant used to aid the bank fraud were those he was caught with. U.S. v. McCants, 554 F.3d 155 (D.C. Cir. 2009).
D.C. Circuit rules court erred holding defendant liable for all stolen property wife brought into house. (170) Defendant’s wife defrauded the U.S. government of electronic goods worth hundreds of thousands of dollars, giving most of them to her relatives. Defendant took part in the criminal activity to the extent of joining with his wife to obtain a stolen laptop computer for his son from a previous marriage, and using some of the stolen goods around the home he shared with his wife. He appeared to have stayed out of the broad conspiracy. The D.C. Circuit held that the district court erred by holding defendant accountable for the total value of the stolen property brought into his house by his wife. The scope of a defendant’s particular conspiratorial agreement controls his sentencing exposure. While defendant certainly was responsible for the laptop and any equipment he used, for the bulk of the stolen equipment, the government showed at most, that defendant knew about its transitory presence in the house. The evidence of such knowledge did not show agreement, and such a showing was required to attribute the stolen equipment to defendant. The fact that defendant and his wife share a house was insufficient, particularly given that his wife tried to keep defendant from discovering much of the stolen goods present in the home. U.S. v. Mellen, 393 F.3d 175 (D.C Cir. 2004).
D.C. Circuit considers losses which occurred outside five-year statute of limitations. (170) Defendant embezzled money from her employer from 1980 until 1990. Because of the five-year statute of limitations, defendant was only charged with conduct from 1987 through 1990. However, the district court found that defendant’s 1980 through 1986 embezzlements were relevant conduct under section 1B1.3, and included them in calculating the loss. The D.C. Circuit held that the district court was authorized to consider the otherwise relevant conduct, even though it occurred outside the statute of limitations period. Evidence regarding conduct beyond the statutory period is not presumptively unreliable. Here, it was clear that defendant’s embezzlement during 1980 to 1986 was relevant to the 1987 to 1990 offenses for which she was convicted. Throughout the period 1980 to 1990 defendant was taking money from the same victim, by means of the same modus operandi. U.S. v. Wishnefsky, 7 F.3d 254 (D.C. Cir. 1993).
D.C. Circuit says crack house counts were not relevant conduct for sale count. (170) Defendant was convicted one count of aiding and abetting the distribution of crack cocaine, and five counts of maintaining a “crack house.” For sentencing purposes, the five crack house counts were grouped together and the distribution count was grouped separately. In determining the base offense level for the distribution count, the district court considered as relevant conduct the drugs involved in all six counts. The D.C. Circuit reversed. The offense level for the distribution count should have been calculated solely on the basis of the quantity of cocaine actually purchased without consideration of the drugs recovered from the search of the crack house. Section 1B1.3(a)(2) authorizes the sentencing court to take into account as relevant conduct solely those offenses for which section 3D1.2(d) would require grouping of multiple counts. Violation of the crack house statute cannot by itself be relevant conduct in calculating the offense level for a distribution conviction because the former is not of a character for which section 3D1.2(d) would require grouping of multiple counts. U.S. v. Lancaster, 968 F.2d 1250 (D.C. Cir. 1992).
D.C. Circuit permits criminal history departure for unrelated prior embezzlement. (170) Defendant pled guilty to two counts of fraud arising out of his theft and misuse of a credit card. The district court departed upward, adding three points to defendant’s criminal history for his admitted embezzlement of $56,000 from an art gallery where he had been employed. The embezzlement did not result in a criminal conviction. The D.C. Circuit rejected defendant’s claim that the embezzlement was “related” to the instant offense and therefore was not a proper basis for a criminal history departure. The art gallery incident occurred over a year before the fraud. Defendant perpetrated the instant fraud by relying on information from an individual he did not meet until after he had left the art gallery. U.S. v. Jones, 948 F.2d 732 (D.C. Cir. 1991).
D.C. Circuit refuses to extend exclusionary rule to sentencing hearing. (170) The prosecution admitted that the police engaged in “some irregularity” when they conducted a warrantless entry to arrest defendant at his apartment. The parties agreed that the prosecution would not introduce at trial any of the evidence the police obtained during the warrantless entry. The D.C. Circuit upheld the use of this evidence at defendant’s sentencing to determine his base offense level. Following other circuits, the court held that the deterrent effect would not outweigh the detrimental effect of excluding the evidence. There was no showing that the police purposely violated the Fourth Amendment to obtain evidence to increase defendant’s sentence, and the police misconduct was minor. The court expressly left open the issue of whether suppression would be proper in circumstances where the police acted egregiously. Judge Silberman, concurring, was troubled by the incentive this rule created for police to seize evidence illegally. U.S. v. McCrory, 930 F.2d 63 (D.C. Cir. 1991).
Article critiques guidelines’ reliance on alleged related offenses. (170) Under the guidelines, sentences are sometimes enhanced based on a defendant’s commission of crimes related to the offense of conviction, even if the defendant has not been charged with the related crimes or has been acquitted of them. David Yellen examines which aspects of the guidelines embrace this “real-offense” approach to sentencing and which embrace a contrary, “charge-offense” approach. He argues that neither the Commission’s explanation nor other plausible accounts is sufficient to support the Commission’s distinctions. Moreover, the Commission failed adequately to consider the extent to which plea bargaining would undermine its scheme. Yellen, David, “Illusion, Illogic, and Injustice: Real-Offense Sentencing and the Federal Sentencing Guidelines,” 78 Minn. L. Rev. 403-65 (1993).
Commission amends § 1B1.3 to limit “relevant conduct” in conspiracy cases. (170) In a proposed amendment effective November 1, 1994, the Sentencing Commission added an application note to § 1B1.3, the “relevant conduct” provision, to specify that “relevant conduct does not include the conduct of members of a conspiracy prior to the defendant’s joining the conspiracy, even if the defendant knows of that conduct (e.g. in the case of a defendant who joins an ongoing drug distribution conspiracy knowing that it had been selling two kilograms of cocaine per week, the cocaine sold prior to the defendant’s joining the conspiracy is not included as relevant conduct in determining the defendant’s offense level).” The Commission says that in unusual circumstances where the exclusion of the conduct would not adequately reflect the defendant’s culpability, an upward departure may be warranted. This amendment should resolve a developing split in the circuits over whether relevant conduct is prospective only. See U.S. v. Carreon, 11 F.3d 1125 (5th Cir. 1994) (discussing split in circuits).
Commission adopts 9th Circuit’s definition of “same course of conduct” (170) In a proposed amendment effective November 1, 1994, the Sentencing Commission clarified the definition of “same course of conduct” as used in § 1B1.3(a)(2). The amendment appears to adopt the “similarity, regularity, and temporal proximity” test and analysis developed by the 9th Circuit in U.S. v. Hahn, 960 F.2d 903 (9th Cir. 1992). The amendment adds “regularity (repetitions) of the offense” to the definition and specifically provides that when one of the factors–similarity, regularity and time interval–is absent “a stronger presence of at least one of the other factors is required. For example, where the conduct alleged to be relevant is relatively remote to the offense of conviction, a stronger showing of similarity or regularity is necessary to compensate for the absence of temporal proximity.”
Commission emphasizes that relevant conduct section applies to possession of a dangerous weapon in a drug offense. (170) The November 1, 1991, amendment to section 2D1.1(b)(1) makes explicit that the provisions of subsection (a)(2) of section 1B1.3 (relevant conduct) apply to the enhancement for possession of a dangerous weapon during a drug trafficking offense, and that the weapon need not have been possessed during the act constituting the count of conviction.
Commission amends relevant conduct section to clarify that not all conduct is relevant. (170) In an amendment effective November 1, 1992, the Commission extensively modified section 1B1.3, the “relevant conduct” section. The Commission stated that the “jointly undertaken criminal activity” is not necessarily the same as the scope of the entire conspiracy, and hence “relevant conduct is not necessarily the same for every participant.” The Commission included numerous illustrations of conduct for which as defendant is or is not accountable. For example, a girlfriend who participates in her boyfriend’s drug trafficking activity on only one occasion is not accountable for the other drug sales made by her boyfriend “because those sales were not in furtherance of her jointly undertaken criminal activity.”
Article objects to real-offense sentencing under all sentencing systems. (170) Elizabeth T. Lear outlines how non-conviction offenses serve as sentencing factors under the guidelines and how the federal courts have addressed constitutional challenges to the practice. Though others have argued that the guidelines regime makes inapplicable Supreme Court cases upholding reliance on uncharged conduct at sentencing under indeterminate schemes, the problem is that the earlier cases themselves should be reconsidered. Even under indeterminate schemes, reliance on uncharged conduct emasculates the roles of the grand and petit juries. Elizabeth T. Lear, Is Conviction Irrelevant?, 40 UCLA L. Rev. 1179-1239 (1993).
Article contests constitutionality of burden of proof for relevant conduct. (170) The Hon. Boyce F. Martin, Jr., contends that due process is offended by permitting relevant conduct to be established by a preponderance of the evidence. In at least some cases, proof beyond a reasonable doubt should be required. While the preponderance standard is appropriate for determining the drug quantity in an offense of conviction, it is inappropriate when it essentially permits the government to rely on separate conduct for which the defendant was not convicted. Boyce F. Martin, Jr., The Cornerstone Has No Foundation — Relevant Conduct in Sentencing and the Requirements of Due Process, 3 Constitutional L.J. 25-54 (1993).