§290 RICO, Loan Sharking, Gambling
9th Circuit finds violation of the Travel Act involving minor requires sex offender registration. (290)(580) Defendant pleaded guilty to violating the Travel Act, 18 U.S.C. § 1952(a)(3)(A) based on an incident in which she transported a minor across state lines for purposes of prostitution. As a condition of supervised release, the district court ordered defendant to register as a sex offender under the Sex Offender Registration and Notification Act, 34 U.S.C. § 20911. The Ninth Circuit held that defendant’s violation of the Travel Act required her to register as a sex offender, even though the Travel Act does not require involvement of a minor and Department of Justice guidelines do not require registration for violating the Travel Act. U.S. v. Dailey¸ __ F.3d __ (9th Cir. Nov. 4, 2019) No. 18-10134.
8th Circuit finds within-guidelines racketeering sentence is not grossly excessive. (290)(742) A jury convicted defendant of murder in aid of racketeering and use of a firearm during and in relation to a crime of violence. His guidelines range was 360 months to life, and he received a sentence of 380 months. On appeal, defendant argued that his sentence was “grossly excessive” because he would have received a lower sentence in state court and he was not subject to the Armed Career Criminal Act, as originally thought. The Eighth Circuit found the sentence was not substantively unreasonable. U.S. v. Morris, __ F.3d __ (8th Cir. Mar. 20, 2019) No. 17-2979.
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.
7th Circuit allows consideration of uncharged attempted murder that had previously been discounted. (175)(290) At defendant’s sentencing for racketeering offenses, the district court considered an attempted but uncharged murder as relevant conduct. At a prior sentencing of another defendant arising from the same offenses, the district court found that the government had not proved that this attempted murder occurred in the course of the RICO conspiracy. The Seventh Circuit affirmed, finding that the district court’s obligation to avoid conflicting findings does not require it to adhere to a previous mistake. The court of appeals also rejected defendant’s argument that his sentence was improperly higher than that of the codefendant, finding that the district court had properly calculated defendant’s guidelines range and provided sufficient reasons—including its error in previously refusing to consider the uncharged attempted murder —to justify any disparity. U.S. v. King, __ F.3d __ (7th Cir. Dec. 6, 2018) No. 16-1275.
7th Circuit finds that uncharged attempted murder furthered conspiracy. (175)(290) The district court at defendant’s sentencing for racketeering offenses considered an uncharged attempted murder in imposing sentence on defendant. The Seventh Circuit affirmed, finding that the evidence at defendant’s trial showed that the murder was committed in furtherance of the conspiracy. The court noted that a member of the conspiracy gave defendant a gun and asked him to kill the victim, that defendant was a member of the same gang as the person who gave him the gun, and that the victim had been the subject of prior gang-related efforts to kill him. U.S. v. King, __ F.3d __ (7th Cir. Dec. 6, 2108) No. 16-1275.
6th Circuit affirms that assault was assault to commit murder for racketeering. (210)(290) Defendant was convicted of racketeering and drug distribution conspiracy charges, and the district court found that defendant’s assault on Olivares was an assault with intent to murder under §2A2.1(a)(1). On appeal, the Sixth Circuit affirmed. Testimony suggested that defendant was upset because Olivares had previously taken cocaine from him. Defendant walked toward the truck where Olivares was sitting, and by the time Howell, one of defendant’s partners, got there, Olivares was unconscious, and defendant continued to “hit him a couple times through the window.” The assault continued, and Howell heard Olivares “gargling on his own blood” and then defendant said “[y]eah die motherfucker.” U.S. v. Rios, __ F.3d __ (6th Cir. July 21, 2016) No. 14-2495.
6th Circuit allows acquitted assault to be considered relevant conduct in RICO conspiracy. (175)(290) Defendant was convicted of racketeering and conspiracy to distribute drugs. The district court found by a preponderance that defendant assaulted Patton with intent to commit murder. Defendant argued that this was improper because the jury acquitted him of assaulting Patton and the government offered no additional proof at sentencing. The Sixth Circuit disagreed, noting that the district court could properly fined that the assault was relevant conduct under section 1B1.3. The district court’s finding, while terse, was not clearly erroneous. The testimony revealed a brutal assault with a knife and supported a finding that defendant was the one who stabbed Patton. Specific intent to kill could be inferred from defendant’s decision to stab Patton in the chest in the midst of the fight. At a minimum, it was not clearly erroneous to find that defendant aced with such intent. U.S. v. Rios, __ F.3d __ (6th Cir. July 21, 2016) No. 14-2495.
Commission increases guidelines for animal fighting. (290) Responding to increased penalties for animal fighting in 7 U.S.C. §2156, the Commission increased the base offense level for animal fighting crimes in §2E3.1 from 10 to 16. The Commission relied on data showing a high percentage of upward departures in these cases. The amendment also set a base offense level of 10 in §2E3.1 for causing a person under 16 to attend an animal fighting venture, in violation of §2156(a)(2)(B). The Commission included only the felony provisions of 7 U.S.C. §2156 in the Appendix A reference to §2E3.1. Thus, the misdemeanor of attending an animal fighting venture prohibited by section 2156(a)(2)(A), is governed by the guideline for Class A misdemeanor offenses, §2X5.2. The amendment also expanded existing upward departure language. Amendment 2, effective Nov. 1, 2016.
2nd Circuit upholds cross-reference to § 2A1.5 in murder-for-hire case. (210)(290) Defendant was convicted of conspiracy to commit murder-for-hire and the substantive offense of murder-for-hire, in violation of 18 U.S.C. §§ 1958, 2. Note 1 to U.S.S.G. § 2E1.4 states that “[i]f the underlying conduct violates state law, the offense level corresponding to the most analogous federal offense is to be used.” The Second Circuit held that the district court properly used § 2E1.4, Note 1, to calculate defendant’s offense level based on § 2A1.5, rather than § 2E1.4 itself. Although § 2E1.4 is the provision specifically indexed to 18 U.S.C. § 1958 in Appendix A, the Application Notes that accompany § 2E1.4 specifically instruct the district court to use “the offense level corresponding to the most analogous federal offense” in the event that “the underlying conduct violates state law” and the offense level is greater than 32. The First and Eighth Circuits have affirmed the use of this cross-reference prior to the last update of the April 30, 2015 amendments to the Guidelines. See U.S. v. Smith, 755 F.3d 645 (8th Cir. 2014); U.S. v. Vasco, 564 F.3d 12 (1st Cir. 2009). The Ninth Circuit also recently directed the use of the same cross-reference in U.S. v. Temkin, 797 F.3d 682 (9th Cir. 2015), in an analogous situation. See U.S. v. Lisyansky, 806 F.3d 706 (2d Cir. Nov. 30, 2015).
7th Circuit upholds life sentences for RICO juvenile crimes as not cruel and unusual. (140)(290) Defendants were sentenced to life in prison for RICO violations committed when they were juveniles. They brought motions under 28 U.S.C. § 2255, contending that the life sentences constituted cruel and unusual punishment under Miller v. Alabama, 132 S. Ct. 2455 (2012), which held that mandatory life sentences without parole for juveniles violated the Eighth Amendment. The district court denied the motions, finding that the life sentences did not violate Miller because they were not mandatory. The Seventh Circuit agreed that the life sentences were not mandatory, and thus did not constitute cruel and unusual punishment. The RICO statute, 18 U.S.C. § 1963(a), provides in part that defendants “shall be fined under this title or imprisoned not more than 20 years (or for life if the violation is based on a racketeering activity for which the maximum penalty includes life imprisonment), or both.” The panel agreed with the district court that § 1963(a) established a maximum, not a mandatory, sentence of life in prison for defendants. U.S. v. Martinez, __ F.3d __ (7th Cir. Oct. 16, 2015) No. 14-2737.
9th Circuit reverses error in calculating offense level for soliciting murder for hire. (210(290) Defendant was convicted of soliciting a crime of violence, in violation of 18 U.S.C. §373, and using interstate commerce facilities in the commission of a murder for hire, in violation of 18 U.S.C. §1958. The district court calculated defendant’s offense level at 32 under §2E1.4(a)(1), which governs murder for hire. On the government’s appeal, the Ninth Circuit held that the district court erred by not setting defendant’s offense level at 37. The court of appeals held that although the district court properly used §2E1.4, it should have applied the offense level for defendant’s “underlying unlawful conduct, “not defendant’s solicitation to commit murder for hire. Because under §2A1.5 the base offense level for solicitation to commit murder is 33, plus a four-level enhancement for exchange of money, the district court should have set defendant’s base offense level at 37. U.S. v. Temkin, __ F.3d __ (9th Cir. Aug. 13, 2015) No. 12-50103.
1st Circuit upholds cross-reference to solicitation to commit murder guideline. (290) Defendant was convicted of five counts relating to a murder-for-hire of his wife and daughter. Guideline § 2E1.4, the guideline applicable to use of interstate commerce facilities in commission of murder-for hire, provides that the offense shall be the greater of 32 or “the offense level applicable to the underlying conduct.” The court determined that the underlying unlawful conduct was solicitation to commit murder, meriting a base offense level of 33 under § 2A1.5. The First Circuit upheld the cross-reference to § 2A1.5, even though in virtually every case where a defendant is charged with the use of interstate commerce facilities in the commission of murder-for-hire, the underlying offense is solicitation to commit murder. U.S. v. Vasco, 564 F.3d 12 (1st Cir. 2009).
1st Circuit upholds use of murder guideline for RICO defendant. (290) Defendant was convicted of an assortment of crimes under the RICO statute, 18 U.S.C. §§ 1961-1968, and the Violent Crimes in Aid of Racketeering statute (VICAR), 18 U.S.C. § 1959. The sentencing guideline for both the substantive RICO violation and VICAR violation direct a court to determine the base offense level by looking at “the underlying racketeering activity.” USSG § 2E1.1. The district court found that defendant had conspired to murder Souza, and applied a base offense level of 43 to defendant’s RICO and VICAR counts. The First Circuit held that the district court’s consideration of the Souza murder was not clearly erroneous. In a RICO case, the sentencing court should not limit its relevant conduct inquiry to the predicate acts charged against the defendant, but should consider “all conduct reasonably foreseeable to the particular defendant in furtherance of the RICO enterprise to which he belongs.” U.S. v. Carrozza, 4 F.3d 70 (1st Cir. 1993). The sentencing judge made an implicit finding that the murder of Souza was reasonably foreseeable to defendant. Souza was part of a faction which defendant’s faction was trying to eliminate and defendant was present at various meetings selecting individuals to target. Defendant was also responsible for stealing and accumulating ammunition for use by his faction. When Souza’s body was found, he had with him an address book with the new license plate number of defendant’s girlfriend written in it. U.S. v. Marino, 277 F.3d 11 (1st Cir. 2002).
1st Circuit says abduction does not require physical force. (290) Electronic surveillance at defendant’s principal place of business proved that he and three others severely beat Goulet. Defendant was recorded telling an acquaintance that defendant had physically abducted Goulet, took him behind the Gaslight Lounge, and beat him up. However, the tape also contained statements by defendant suggesting that he tricked Goulet into following him to the Gaslight. Defendant challenged an abduction enhancement under § 2E2.1(b)(3)(A), arguing that he did not use any physical force to bring Goulet to the Gaslamp. Note 1(a) to § 1B1.1 says “abducted” means a victim was forced to accompany an offender to a different location. The First Circuit refused to hold that an “abduction” requires physical force. The dictionary defines force as compelling “by physical, moral, or intellectual means” or “to impose” or “win one’s way.” An abduction accomplished by use of threat and fear carries the same dangerous consequences as an abduction accomplished by use of physical force. In the present case, there was sufficient evidence that defendant abducted Goulet either by physical force or trickery to warrant the enhancement. U.S. v. Cunningham, 201 F.3d 20 (1st Cir. 2000).
1st Circuit holds stationing man at door to prevent escape was physical restraint. (290) Defendant was convicted of conspiring to use extortionate means to collect extensions of credit and related charges. In one instance, two underlings met with a victim who owed the organization money. During the meeting, one of the underlings gave the victim a sudden, violent blow to the head. Throughout the encounter, the other man remained by the door to prevent anyone from entering or leaving. The First Circuit upheld an enhancement under § 2E2.1(b)(3)(B) for physical restraint of the victim. Contrary to defendant’s claims, extortion does not invariably involve physical restraint. The assault here involved physical restraint, even though the victim was never tied, bound or locked up. The examples listed in note 1(i) to § 1B1.1 are illustrative rather than exhaustive. One man pushed the victim as he attempted to leave the hallway in which he was being assaulted, and the other man, throughout the encounter, stood at the hallway door barring egress by the victim. These physical restrictions on defendant’s freedom of movement constituted “physical restraint.” U.S. v. DeLuca, 137 F.3d 24 (1st Cir. 1998).
1st Circuit affirms that abuse of trust is not a specific offense characteristic of RICO violation. (290) Defendant, a police detective, was found guilty of RICO offenses for accepting bribes from a bookmaker. Defendant contended that because the predicate acts of the RICO convictions, bribery, involved an abuse of trust, an additional enhancement for abuse of trust under section 3B1.3 was improper. Following its recent decision in U.S. v. Butt, 955 F.2d 77 (1st Cir. 1992), the 1st Circuit affirmed the abuse of trust enhancement. Section 2E1.1 is a universal base offense level for RICO violations, implying no specific offense characteristics. Thus, abuse of trust is not a specific offense characteristic of the RICO guideline, and applying the enhancement was not double counting. U.S. v. McDonough, 959 F.2d 1137 (1st Cir. 1992).
1st Circuit rules that RICO conviction did not take into account defendant’s official status. (290) Defendant, a police officer, was convicted of RICO offenses as a result of his participation in a payoff scheme involving local prostitutes. Guideline section 2E1.1 directs a district court to use an offense level that is the greater of 19 and the offense level applicable to the underlying racketeering activity. The parties agreed that defendant’s underlying racketeering activity was extortion under color of right, which carries an offense level of 10. The district court refused to apply an enhancement under guideline section 3B1.3 for abuse of public trust because it found that this was an element of the offense of extortion under color of right. Since the 3B1.3 adjustment could not be added to the base offense level of 10 for the underlying racketeering activity, the district court reasoned that it also could not be added to the base offense level of 19. The 1st Circuit reversed, ruling that section 2E1.1(a)(1) established a generic base offense level for RICO crimes, that includes no particular offense characteristic or special skill. U.S. v. Butt, 955 F.2d 77 (1st Cir. 1992).
2nd Circuit affirms loss based on revenues of crime family over 30-year period. (290) Defendant was convicted of conducting the affairs of the Genovese organized crime family through a pattern of racketeering activity, to control the New York-New Jersey waterfront generally. The court determined a loss of $2.5 million based on the revenues realized by the Genovese family as a result of its corrupt control over one union, Local 1235. The Second Circuit found more than sufficient evidence to support the loss estimate. The Genovese family controlled Local 1235 for more than 30 years. To cause a loss of more than $2.5 million over 30 years, the Genovese family would have had to extort only $84,000 annually from Local 1235. Defendant alone obtained sufficient amounts to support himself and his wife comfortably for 11 years while he was a fugitive, and other conspiracy members also received money from the union. Other evidence showed that the Genovese family demanded several thousand dollars a month in tribute from each waterfront entity it controlled, and a much larger Christmas payment, reaching as high as $90,000 to $100,000. These amounts over 30 years easily would exceed $2.5 million. U.S. v. Coppola, 671 F.3d 220 (2d Cir. 2012).
2nd Circuit says 192-month sentence for racketeering was substantively reasonable. (290) Defendant was convicted of conducting and conspiring to conduct the affairs of the Genovese organized crime family through a pattern of racketeering activity. His advisory guideline range was 135-168 months, but the court sentenced him to concurrent terms of 192 months, to run consecutively to an undischarged 42-month sentence. Defendant contended that a 16-year sentence, particularly when run consecutively to a 42-month sentence, was substantively unreasonable given his age, his health, and the lesser sentences imposed on others convicted of participating in organized crime efforts. The Second Circuit held that the sentence was substantively reasonable. The district court clearly considered mitigating factors such as defendant’s age (63), and various health conditions, but concluded that they were outweighed by the seriousness of his criminal conduct, which reflected “a lifetime occupation as part of an organization” whose power “derive[d] from a well grounded fear that if you cross a member of that organization you will be killed.” U.S. v. Coppola, 671 F.3d 220 (2d Cir. 2012).
2nd Circuit bases leadership adjustment on role in overall RICO enterprise. (290) Defendant was a member of a violent Albanian racketeering organization based in New York. He challenged his sentence on the ground that any aggravating role enhancements should have been based on the conduct alleged in the underlying predicate acts, rather than on his role in the RICO enterprise as a whole. The Second Circuit disagreed, holding that a defendant’s role adjustment is to be made on the basis of the defendant’s role in the overall RICO enterprise. This makes more sense than considering defendant’s role in each underlying predicate act. In the case of a § 3B1.1(b) role enhancement, it makes little sense to allow a defendant who acts in a leadership capacity in a wide-ranging criminal enterprise to have his offense level adjusted on the basis of his participation in discrete racketeering acts. Also, the language of the Guidelines makes it clear that the requirement to look at each individual act in a RICO offense is only for the purpose of establishing the base level offense, not for applying the Chapter Three adjustments. U.S. v. Ivezaj, 568 F.3d 88 (2d Cir. 2009).
2nd Circuit finds defendant did not withdraw from conspiracy upon incarceration. (290) Defendant, a member of a New York crime family, was convicted of racketeering. The district court, when sentencing defendant in 2007, chose to use the post-2004 Guidelines to calculate defendant’s base offense level for a 1985 attempted murder, which was a predicate racketeering act under the RICO conspiracy. The court used the post-2004 Guidelines because it found that defendant’s involvement in the RICO conspiracy had continued beyond his arrest in 2003. Defendant argued that the law presumed that membership in a conspiracy ends upon incarceration, and the government did not rebut that presumption. The Second Circuit found there was no such presumption, and even if there were, the government introduced sufficient evidence to overcome it. Evidence established that membership in the crime family was lifelong and continued beyond arrest and incarceration. After defendant’s arrest his name remained on a list of active members that included others who had also been incarcerated. Defendant also continued to receive funds from the family’s “war chest.” U.S. v. Massino, 546 F.3d 123 (2d Cir. 2008).
2nd Circuit holds that murder was relevant conduct for racketeering defendant. (290) 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 uses predicate racketeering conspiracy acts as relevant conduct without proof beyond a reasonable doubt. (290) Defendant, an alleged member of the Gambino Crime Family, was convicted after trial of a RICO conspiracy. Although the indictment charged four separate predicate acts, the jury found unproven all of the charged racketeering acts except for loan sharking. The district court nonetheless found, for relevant conduct purposes, that defendant was involved in an attempted murder and kidnapping. The Second Circuit held that the district court properly considered the acquitted conduct at sentencing. A sentencing court may consider predicate acts as relevant conduct because their commission need not be proven beyond a reasonable doubt. The district court was in the unique position to consider the credibility of the witnesses and to conclude that two of the government’s witnesses had been particularly credible in their testimony about defendant’s participation in the kidnapping. U.S. v. Yannotti, 541 F.3d 112 (2d Cir. 2008).
2nd Circuit uses less serious money laundering guideline for RICO conspiracy defendant. (290) Defendant was convicted of a racketeering conspiracy. Section 2E1.1, the racketeering guideline, provides for an offense level of the higher of (1) 19, or (2) the offense level applicable to the underlying racketeering activity. The underlying racketeering activity here was money laundering, for which § 2S1.1(a) provides for a base offense level of.: “(1) 23, if convicted under 18 U.S.C. § 1956(a)(1)(A), (a)(2)(A), or (a)(3)(A); (2) 20, otherwise.” The government argued that although defendant was convicted of a RICO conspiracy under 18 U.S.C. § 1962(d), his base offense level should be calculated as if he were convicted under one of the listed promotion offenses in subsection (1). The Second Circuit disagreed, and held that the district court properly determined defendant’s base offense level to be 20 under subsection (2). Defendant’s conviction was based on the offense of participation in a RICO conspiracy, 18 U.S.C. 1962(d), not “conspiracy, attempt, solicitation, aiding or abetting, accessory after the fact, or misprision of felony” in respect to 18 U.S.C. 1956(a)(1)(A), (a)(2)(A) or (a)(3)(A). U.S. v. Rosse, 320 F.3d 170 (2d Cir. 2003).
2nd Circuit rules that court understood sentencing authority under racketeering statute. (290) Defendants were convicted of murder and conspiracy to commit murder, in violation of a federal statute prohibiting violent crime in aid of racketeering, 18 U.S.C. 1959. The statute provides that the punishment for murder shall be “by death, or life imprisonment, or a fine under this title, or both …” § 1959(a)(1). At sentencing, the judge stated that “[t]he law says what the law says, and the law says that I must impose a sentence of life imprisonment upon you.” One defendant argued that the district court mistakenly overlooked the option of a fine and thought that the statute required a term of life imprisonment. The Second Circuit ruled that the district court did not misunderstand its sentencing authority. “At the sentencing of each defendant, the district court explicitly rejected the possibility of a fine on the ground that no defendant had assets from which a fine of a magnitude appropriate to the offense could be paid. There was, therefore, no realistic possibility of a fine as a satisfactory possibility for the brutal, execution-style murder of a 16-year old boy.” It was reasonable for the district court to conclude that it had no realistic choice but to sentence defendants to life imprisonment. U.S. v. Feliciano, 223 F.3d 102 (2d Cir. 2000).
2nd Circuit rules payments to trustee were bribes, not gratuities. (290) Defendant ran a firm that marketed a health insurance program to employer groups. Defendant’s company engaged another firm to market the health plan. Defendant paid the trustee of the health plan $5 for each participant enrolled in the health plan through the sub-broker’s marketing efforts, and in return, the trustee allowed defendant to continue using the sub-broker. Defendant was convicted of bribing the trustee of a welfare benefits plan. The Second Circuit upheld the district court’s finding that the payments were bribes, not gratuities. Defendant and the trustee agreed that if defendant paid the trustee $5 for each additional participant, then the trustee would continue to use defendant’s company as his broker. This arrangement met the definition of a bribe. Bribery is an attempt to influence another to disregard his duty while continuing to appear devoted to it. In addition, defendant told a business associate that his payments to the trustee were “an expense of business” and that the payments gave defendant “some control” over the trustee. These statements were not consistent with the payment of a gratuity. U.S. v. Glick, 142 F.3d 520 (2d Cir. 1998).
2nd Circuit says measure of improper benefit is reduced only by direct costs. (290) Defendant ran a firm that marketed a health insurance program to employer groups. Defendant’s company engaged another firm to market the health plan. Defendant paid the trustee of the health plan $5 for each participant enrolled in the health plan through the sub-broker’s marketing efforts, and in return, the trustee allowed defendant to continue using the sub-broker. As a result of this plan, defendant paid the trustee about $150,000, and earned about $1.011 million in commissions. Defendant was convicted of bribing the trustee of a welfare benefits plan. The district court used the $1.011 million in commission to enhance defendant’s offense level under § 2E5.1(b)(2) for receipt of an improper benefit. Defendant argued that the court should not have used his gross profits, but should have deducted the amount of directs costs to derive the net value or benefit he actually received. The Second Circuit agreed that the appropriate measure of the “improper benefit” under § 2E5.1(b)(2) is the net value of the benefit received. However, defendant did not establish direct costs sufficient to warrant a sentence reduction. The costs defendant submitted were indirect costs associated with his company’s general business. Only direct costs, not indirect costs, are used to calculate the amount of “improper benefit.” U.S. v. Glick, 142 F.3d 520 (2d Cir. 1998).
2nd Circuit holds that insurance broker was fiduciary of welfare benefit plan. (290) Defendant ran a firm that marketed a health insurance program to employer groups. The money for the program was held in a fund that qualified as an employee welfare benefit plan under ERISA. Defendant’s company engaged another firm to market the health plan. Defendant paid the trustee $5 for each participant enrolled in the health plan through the sub-broker’s marketing efforts, and in return, the trustee allowed defendant to continue using the sub-broker. Defendant was convicted of bribing the trustee of a welfare benefits plan. The Second Circuit affirmed a § 2E5.1(b)(1) enhancement for being a fiduciary of the welfare fund. A person is a plan’s fiduciary if he exercises any discretionary authority over the management of the plan or the disposition of its assets. The participants’ contributions became assets of the fund as soon as the employees contributed them to their employers. The monies retained their character as fund assets as they passed through defendant to the fund’s bank account. U.S. v. Glick, 142 F.3d 520 (2d Cir. 1998).
2nd Circuit uses guideline for aiding murder where predicate RICO offense was facilitating murder. (290) Defendant was convicted of charges involving drugs, RICO, and money laundering, and conducting a continuing criminal enterprise. One of the predicate acts for his RICO conviction was the facilitation of murder in violation of New York law. In determining defendant’s sentence for his RICO conviction, the district court used the guideline offense level for aiding and abetting first-degree murder. Defendant argued that aiding and abetting a murder has a higher scienter requirement than facilitation of murder and thus was an inappropriate frame of reference. The Second Circuit disagreed. Under § 2E1.1, if the underlying conduct violates state law, the offense level for the most analogous federal offense is to be used. The district court here noted the substantive differences between criminal facilitation and the federal offense of aiding and abetting, but it found that aiding and abetting was especially close to the offense described in the New York statute. U.S. v. Miller, 116 F.3d 641 (2d Cir. 1997).
2nd Circuit upholds defendant’s involvement in relevant conduct. (290) Defendant pled guilty to racketeering charges. The district court took into account as relevant conduct three kidnappings for which defendant was not indicted. The Second Circuit held that the government adequately proved defendant’s involvement in the kidnappings. Two witnesses testified that they personally observed defendant take part in the first attempted kidnapping. Although defendant’s polygraph test results suggested the truthfulness of his denials, such “lie‑detector” tests are not generally admissible in federal court because of their questionable accuracy. Defendant’s participation in the second kidnapping presented a closer question, because several witnesses testified that defendant was socially occupied elsewhere at the time of the kidnapping. However, faced with two contradictory accounts of defendant’s activities that day, each supported by eyewitness testimony, the district court’s resolution was not improper. U.S. v. Ruggiero, 100 F.3d 284 (2d Cir. 1996).
2nd Circuit groups racketeering acts separately. (290) Defendants pled guilty to racketeering charges. The district court took into account as relevant conduct three kidnappings for which defendants were not indicted. Defendants argued that the district court improperly treated the kidnappings as separate counts of conviction and then combined them under the grouping rules, with the result that those incidents, rather than the counts of conviction, determined the total offense level. The Second Circuit held that the district court correctly applied the grouping provisions. The five separate incidents of racketeering activity—two attempted kidnappings that defendants admitted plus the three proven at sentencing—did not qualify for grouping under § 3D1.2. The counts did not involve the same victim, no count was a specific offense characteristic of another, and the offense level was not determined by quantity or some other measure of aggregate harm. U.S. v. Ruggiero, 100 F.3d 284 (2d Cir. 1996).
2nd Circuit affirms that RICO conspiracy extended beyond effective date of guidelines. (290) Based on a fraudulent mailing on March 29, 1988, the 2nd Circuit affirmed that the RICO conspiracy extended beyond November 1, 1987, the effective date of the guidelines. The determination that the conspiracy “straddled” the effective date of the guidelines was a sentencing factor to be determined by the judge, not the jury. One defendant’s claim that he held a minimal role in the conspiracy was irrelevant to this issue. The court rejected a second defendant’s claim that he should not be sentenced under the guidelines because he did nothing after November 1, 1987. It was reasonably foreseeable to him that the conspiracy would continue. The court also rejected claims that two defendants affirmatively withdrew from the conspiracy. Although one left the firm in 1984, he continued for work on an ad hoc basis. The other resigned his position to practice with an independent firm, but continued to be entitled to a percentage of the recovery in cases in which he had been involved. U.S. v. Eisen, 974 F.2d 246 (2nd Cir. 1992).
2nd Circuit affirms that conduct underlying previous sentence should not be used to calculate RICO base offense level. (290) One of the predicate acts for defendant’s instant RICO offense was his involvement in a murder. Defendant had previously been convicted of solicitation of murder as a result of his involvement in that murder. Relying upon application note 4 to guideline section 2E1.1, the district court did not use the murder to calculate defendant’s base offense level under the RICO guideline. The government appealed, contending that since defendant was only previously sentenced for soliciting a murder, note 4 did not bar using the conduct charged and proved in this case: the actual murder and activities leading up to that murder. Although the 2nd Circuit thought the government’s argument held some merit, it affirmed the district court’s decision. It was reasonable to construe note 4 to mean that the conduct underlying the previously imposed sentence should not be used to calculate the base offense level for the instant offense. U.S. v. Minicone, 960 F.2d 1099 (2nd Cir. 1992).
2nd Circuit upholds first degree murder as most analogous offense even though crime was second degree murder under state law. (290) Defendant was convicted of conspiring to participate in a racketeering enterprise based in part upon his involvement in a murder. The 2nd Circuit upheld the district court’s use of the first degree murder guideline to establish defendant’s base offense level, even though New York law would have categorized the murder as only second degree murder. The district court’s task under guideline section 2E1.1 was to find the offense level corresponding to the most analogous federal offense. A person is guilty of second degree murder under New York law when, with intent to cause the death of another, he causes the death of such person or third person. First degree murder is defined under federal law, 18 U.S.C. section 1111, as a “willful, deliberate, malicious and premeditated killing.” U.S. v. Minicone, 960 F.2d 1099 (2nd Cir. 1992).
2nd Circuit affirms that local branches of union were part of same RICO enterprise. (290) Over a 35-year period, defendant held various positions in the General Service Employees International Union (the “International”), including president of Local 200, trustee of several employee funds, and secretary-treasurer of Local 362. He was convicted of a RICO in connection with his embezzlement and improper use of union funds. Defendant contended that the sentencing guidelines did not apply to the RICO charge because the only racketeering act that occurred after the effective date of the guidelines involved Local 362, which he contended was a separate RICO “enterprise” from Local 200 and the employee benefit funds. The 2nd Circuit rejected this argument, ruling that Local 362 was part of the same enterprise as the other entities. An “enterprise” under the RICO statute may consist of more than one entity, so long as those entities have been connected by a defendant’s participation in them through a pattern of racketeering activity. Here, the indictment charged a broad enterprise that included Local 200, the pension funds, and Local 362. There was proof that these entities were all under the umbrella of the International, and that defendant participated in these otherwise lawful organizations through a pattern of racketeering. U.S. v. Butler, 954 F.2d 114 (2nd Cir. 1992).
2nd Circuit reverses downward departure in RICO case where offense level for underlying activity was less than RICO offense. (290) Defendant was convicted of a RICO offense carrying a base offense level of 19 under guideline section 2E1.1(a)(1). The district court departed downward to level 15 because it found that this was not a typical case. In choosing level 15, the court referred to the introductory commentary to the racketeering guideline which states that the offense level usually will be determined by the offense level of the underlying conduct, which in this case was 15. The 2nd Circuit reversed the downward departure. Application note 3 to section 3E1.1 makes it clear that the Sentencing Commission was aware that with certain RICO convictions, the base offense level for the underlying offense would be less than 19, but that nevertheless, the base offense level is to be 19. Thus, the sole justification for the departure had been considered and rejected by the Commission. U.S. v. Butler, 954 F.2d 114 (2nd Cir. 1992).
2nd Circuit holds that guideline § 2E1.1 does not violate due process. (290) Defendant pled guilty to one racketeering charge in a five count indictment and, as part of the plea, admitted to the five racketeering predicates charged in the indictment. On appeal, defendant argued his sentence should be vacated because U.S.S.G. § 2E1.1 violated due process by allowing the District Court to base its sentence on all five underlying predicate acts, even though only two were necessary for conviction. The 2nd Circuit rejected the argument, ruling that “a RICO offense is by definition an aggregation of underlying criminal acts, and there is nothing irrational in basing the severity of the sentence on all acts that were actually committed rather than on merely two.” U.S. v. Novod, 899 F.2d 149 (2nd Cir. 1990).
3rd Circuit rejects loss increase where no evidence that defendant was involved in early days of RICO conspiracy. (290) Defendant was part of a RICO conspiracy involved in murder, extortion, bookmaking, and theft of interstate goods. Defendant argued that he should not have received a three-level enhancement based on losses that were sustained prior to 1996, an enhancement based solely on the testimony of cooperating witness Scafidi. The Third Circuit agreed. Defendant was rarely mentioned by Scafidi in the course of his seven-day testimony, and when he was mentioned, it was almost in passing. While some of Scafidi’s testimony suggested defendant’s involvement in a 1992 Christmas extortion, on cross-examination, Scafidi conceded that he never saw defendant extort anyone in 1992 and had no personal knowledge that defendant had done so; that he never mentioned defendant’s name when he told the FBI, in 100 hours of debriefing, about the 1992 Christmas extortions, and that he never mentioned defendant’s name in his grand jury testimony about the 1992 Christmas extortions. Because there was no reliable evidence that defendant was involved in the conspiracy from its inception in 1992, the enhancement was improper. U.S. v. Merlino, 349 F.3d 144 (3d Cir. 2003).
3rd Circuit includes conviction for predicate RICO act in criminal history. (290) Defendant was convicted of RICO charges. He had previously been convicted in state court for a predicate act charged in one of the counts of convictions. The district court did not factor the predicate act, an attempted bribery, into defendant’s base offense level. Instead, following note 4 to § 2E1.1, the court treated the bribery sentence as a prior sentence under § 4A1.2(a)(1). Defendant argued that the bribery was part of the instant offense and should have been excluded from his criminal history. The Third Circuit held that the district court properly followed note 4. The Sentencing Commission’s treatment of the prior conviction for a RICO predicate act avoids the anomaly of treating a RICO defendant with such a conviction as a first offender with a criminal history category of I. Note 4 is an interpretation of the RICO guideline that “may not be compelled by the guideline text” but is nonetheless “not plainly erroneous or inconsistent” with § 4A1.2(a)(1). U.S. v. Marrone, 48 F.3d 735 (3d Cir. 1995).
3rd Circuit says predicate RICO act conviction may be used as predicate career offender crime. (290) Defendant was convicted of RICO charges. He had previously been convicted in state court for a predicate act charged in one of the counts of convictions. The district court did not factor the predicate act, an arson, into defendant’s base offense level. Instead, the court relied on the arson conviction, as well as an unrelated extortion conviction, to classify defendant as a career offender under § 4B1.1. The Third Circuit held that the district court’s action was consistent with note 4 to § 2E1.1, which directs a court to include a prior conviction for a predicate act in a RICO defendant’s criminal history score. The two prior felony convictions referred to in § 4B1.1 need only be separate from each other, they need not be separate from the instant offense. U.S. v. Marrone, 48 F.3d 735 (3d Cir. 1995).
3rd Circuit applies reasonable doubt standard to RICO criminal forfeiture. (290) The jury’s criminal RICO verdict found cash and real property were subject to forfeiture under 18 U.S.C. § 1963(a). Defendant argued that it was error to instruct the jury that the burden of proof was a preponderance of the evidence. The 3rd Circuit agreed. When the criminal forfeiture provisions were enacted in 1970, it was generally understood that a criminal forfeiture claim was similar to a substantive criminal charge and therefore had to be proved like a criminal charge. Congress later amended both RICO and CCE by specifically providing a preponderance of the evidence burden of proof with respect to CCE criminal forfeiture proceedings and certain aspects of RICO, but left section 1963(a) undisturbed. This showed that Congress intended the higher beyond a reasonable doubt standard to control in a section 1963(a) proceeding. U.S. v. Pelullo, 14 F.3d 881 (3rd Cir. 1994).
3rd Circuit holds that relevant conduct in a RICO case includes all reasonably foreseeable conduct in furtherance of RICO enterprise. (290) The 3rd Circuit held that relevant conduct in a RICO case includes all conduct reasonably foreseeable to a particular defendant in furtherance of the RICO enterprise to which he belongs. The term “underlying racketeering activity” in section 2E1.1(a)(2) means any act, whether or not charged against defendant personally, that qualifies as a RICO predicate act under 18 U.S.C. section 1961(a) and is otherwise relevant conduct under section 1B1.3. The district court erred when it limited relevant conduct to conduct in furtherance of the predicate acts charged against defendant. However, such relevant conduct could not be used to increase the statutory maximum from 20 years to a term of life imprisonment. The statutory maximum sentence must be determined by the conduct alleged in the indictment. U.S. v. Carrozza, 4 F.3d 70 (3rd Cir. 1993).
3rd Circuit upholds application of guidelines to RICO violation which began prior to and continued beyond guideline effective date. (290) Defendant argued that it was improper to apply the guidelines to his RICO offense which began prior to and continued after the effective date of the guidelines. The 3rd Circuit agreed with the district court that RICO is a continuing offense “directly analogous to the crime of conspiracy,” and that therefore the guidelines were applicable to defendant’s RICO conviction. The application of the guidelines to defendant’s offense did not violate the ex post facto clause. Defendant elected to continue his illegal pattern of conduct after the effective date of the guidelines, and the guidelines do not prescribe a higher sentence for his RICO offense than that provided by pre-guidelines law. U.S. v. Moscony, 927 F.2d 742 (3rd Cir. 1991).
4th Circuit approves murder guideline in RICO case despite jury acquittal of murder. (290) Defendant, a member of a gang involved in drug-trafficking, robbery, and murder, was convicted of RICO conspiracy charges. The jury found that the objectives of the conspiracy were distribution of cocaine and crack cocaine, and robbery. It declined to find that murder or conspiracy to commit murder was an objective of the conspiracy. Nonetheless, the district court found that defendant killed Jackson, and that the murder was relevant conduct, so it increased the offense level from 19 to 43. See § 2E1.1 (guideline for racketeering conspiracy is the greater of 19 or the offense level applicable to the underlying racketeering activity). The Fourth Circuit affirmed. Although the jury declined to find that defendant murdered Jackson, the government presented ample testimony from three co-conspirators that defendant committed the crime. U.S. v. Mouzone, 687 F.3d 207 (4th Cir. 2012).
4th Circuit uses murder as underlying RICO crime despite acquittal of murder charges. (290) Defendant was convicted of racketeering charges, including committing a crime of violence in aid of racketeering activity. At sentencing, the district court found that the crime of violence underlying defendant’s conspiracy conviction was conspiracy to commit murder. Defendant argued that this was improper because he was acquitted on the murder counts. The Fourth Circuit held that the acquittal did not prevent the court from finding that the murder conspiracy was the underlying crime of violence. An acquittal does not bar a court from considering conduct in computing the applicable guideline range. U.S. v. Martinez, 136 F.3d 972 (4th Cir. 1998).
4th Circuit affirms that defendant caused bodily injury despite victim’s testimony. (290) Defendant was convicted of collecting extensions of credit by extortionate means and received a two level enhancement under section 2E2.1(b)(2) for causing bodily injury to his victim. The 4th Circuit affirmed the enhancement, even though the victim testified that defendant struck him because he lied to defendant and that he suffered no physical effects from the injury and there was “no malice involved.” The victim’s testimony exemplified that of a loan-sharking victim who fears the consequences of non-repayment and of testifying as a complaining witness. The district court found persuasive testimony by four witnesses who observed the victim within a few hours after the battery occurred. One witness heard the victim say “I had the [expletive] slapped out of me,” and observed that the victim’s face was red. Another noticed that the victim’s face looked reddish and that the victim complained that his ear was ringing as a result of defendant’s blow. An FBI agent testified that the victim’s face looked a little puffy, while the victim’s son testified that he observed a red mark on defendant’s face. U.S. v. Isaacs, 947 F.2d 112 (4th Cir. 1991).
4th Circuit finds that gambling and money laundering are not closely related offenses. (290) Defendant used the proceeds of an illegal gambling operation to purchase a house. Two years later, he sold the house and fled the country with the proceeds. Defendant challenged the district court’s failure to group his money laundering conviction with his gambling conviction as closely-related counts. The 4th Circuit acknowledged that acts of money laundering which are closely integrated with an illegal gambling operation might, under certain circumstances, qualify as closely-related counts. However, in this case, but for the fact that the home defendant sold was originally purchased with gambling proceeds, the money-laundering offense was completely unrelated to the gambling operation. Therefore, the two counts were not closely-related. U.S. v. Porter, 909 F.2d 789 (4th Cir. 1990).
4th Circuit holds that pre-guideline drug transactions were properly considered in RICO case. (290) At sentencing the district court counted as “relevant conduct,” drug transactions that occurred before the effective date of the guidelines. Two uncharged drug transactions before the January 15, 1988 amendments to guidelines sections 1B1.2 and 1B1.3 were also included as relevant conduct. Defendant contended that this violated the ex post facto clause. The 4th Circuit rejected the argument. The RICO offense was a continuing offense. Therefore applying the guidelines to conduct occurring before the effective date of guidelines does not violate the ex post facto clause. The court doubted that § 1B1.3 had a different meaning after its amendment, but in any event, the amended version applied because defendant’s offense continued until January, 1989. U.S. v. Cusack, 901 F.2d 29 (4th Cir. 1990).
5th Circuit rules RICO defendant properly sentenced under murder guideline. (290) Defendant was convicted of RICO charges. He argued that the jury did not make specific findings regarding underlying racketeering activities in convicting him, and the district court usurped the jury’s role in making those findings. The Fifth Circuit found that defendant was properly sentenced. Defendant was found guilty of two RICO conspiracy counts in violation of 18 U.S.C. § 1962. Both RICO counts including Racketeering Acts A (conspiracy to commit murder and murder) and B (murder) in violation of the laws of Mississippi. The applicable sentencing guideline, § 2E1.1, provides that the base level is the greater of 19 or the “offense level applicable to the underlying racketeering activity.” Here, the underlying activity involved violations of Mississippi murder statutes, and the district court properly analogized this offense to the federal first-degree murder guideline. U.S. v. Sharpe, 193 F.3d 852 (5th Cir. 1999).
5th Circuit relies on police report to prove drug trafficker could have foreseen death to bystander. (290) Defendant was convicted of RICO conspiracy charges based on his involvement in an extensive drug-trafficking conspiracy. Under § 2E1.1(a)(2), the offense level is based on the underlying racketeering activity. The district court found that the murder of a woman was an underlying racketeering activity. Defendant argued that the murder was not a foreseeable consequence of his criminal activity, but was merely the result of a personal dispute between two co-conspirators. The Fifth Circuit upheld the court’s reliance on a police report to prove that murder was part of defendant’s racketeering activity. According to the police report, the death occurred when a member of a rival drug gang, seeing that he had walked into a trap in a night club parking lot, grabbed the woman and used her as a human shield to protect himself from defendant’s men. The woman sustained 14 bullet wounds. Defendant could have reasonably foreseen the woman’s murder because he and other conspirators had gone to the club to eliminate the rival drug dealer. The police report bore sufficient indicia of reliability to credit it over defendant’s self-serving testimony. U.S. v. Posada-Rios, 158 F.3d 832 (5th Cir. 1998).
5th Circuit rejects use of murder guideline in RICO case where murder conviction was reversed. (290) Defendants were members of a street gang that conspired to distribute drugs and committed violent crimes in aid of racketeering. The district court sentenced them under § 2A1.2, the second-degree murder guideline, rather than the alternative minimum base offense level provided in § 2E1.3, because a co-conspirator shot two men, and defendants told police that one of the men had reached for a gun immediately before the co-conspirator shot them. The PSR, which was adopted by the district court, found defendants statements were inconsistent with the jury’s verdict rejecting the co-conspirator’s claim of self-defense. Nevertheless, the Fifth Circuit reversed the use of the murder guideline because it previously vacated the co-conspirator’s murder conviction. The now-vacated conviction was the sole basis for the court’s determination that defendants lied to police. The district court plainly erred in resting its factual findings on a verdict that was later found to be infirm. U.S. v. Wilson, 116 F.3d 1066 (5th Cir. 1997), vacated in part on other grounds sub nom. U.s. v. Brown, 161 F.3d 256 (5th Cir. 1998) (en banc).
5th Circuit says § 2E1.2 applies to telephone counts, not § 2E1.4. (290) Defendant was convicted of various drug counts and use of a telephone with intent to commit a crime of violence. The Fifth Circuit held that the court should have applied § 2E1.2, rather than § 2E1.4, to the telephone counts. Section 2E1.2 applies to violation of 18 U.S.C. § 1952, prohibiting the use of interstate facilities in aid of a racketeering enterprise. U.S. v. Gaytan, 74 F.3d 545 (5th Cir. 1996).
5th Circuit finds no double counting in abuse of trust enhancement for Congressman convicted of RICO. (290) Defendant, a U.S. Congressman, was convicted of RICO charges for conducting his congressional office through a pattern of racketeering activity. He argued that a § 3B1.3 abuse of trust enhancement was double counting because his congressional office was already used to satisfy the RICO enterprise element. The Fifth Circuit held that the abuse of trust enhancement was not double counting because the base offense level of 19 in § 2E1.1 does not incorporate that element. Those RICO offenses that entail an abuse of trust must be distinguished on the basis of that additional element by adding the two level enhancement. U.S. v. Bustamante, 45 F.3d 933 (5th Cir. 1995).
5th Circuit affirms that most analogous offense for defendant who ran prostitution ring was Mann Act. (290) Defendant ran a prostitution ring that processed checks and credit card charges in interstate commerce. He was convicted of violating the Travel Act, which proscribes using a facility of interstate commerce with the intent to carry on an “unlawful activity.” Defendant was sentenced under guideline § 2E1.2, which provides for an offense level of six or the offense level of the underlying unlawful activity, whichever is higher. The commentary provides that where the underlying conduct violates state law, the offense level corresponding to the most analogous federal offense is to be used. The 5th Circuit affirmed the district court’s determination that the Mann Act was the most analogous federal offense. The fact that defendant did not transport prostitutes over state borders, as required for a Mann Act violation, did not mean it was not the most analogous offense. The term “analogous” implies a difference, and “that the state offense lacks the federalizing element of a given federal offense should not of itself necessarily prevent the two from being considered ‘analogous’ for purposes of such a guideline directive.” U.S. v. Langley, 919 F.2d 926 (5th Cir. 1990).
5th Circuit finds sentence properly based on amount of drugs entire conspiracy contemplated, not amount actually purchased. (290) Defendant joined a conspiracy that sought to purchase 2000 pounds of marijuana. However, defendant only agreed to purchase 500 pounds. After being arrested, defendant pled guilty to one count of Interstate Travel in Aid of Racketeering, 18 U.S.C. § 1952, in order to avoid prosecution on conspiracy with intent to distribute marijuana 21 U.S.C. 846. In calculating the sentence, the judge used the 2000 pound figure and defendant appealed, contending that the 500 pound figure should have been used. The 5th Circuit affirmed the sentence, ruling that under guideline 2D1.4 the offense level for an incomplete conspiracy is the same as if the object of the conspiracy had been completed. Although defendant only wanted to buy 500 pounds he was a member of a conspiracy seeking to buy 2000 pounds and therefore the judge’s calculation was not clearly erroneous. U.S. v. Farrell, 893 F.2d 690 (5th Cir. 1990).
6th Circuit directs resentencing based on least serious of predicate RICO acts where jury returned general verdict. (290) Defendant was convicted by a general guilty verdict of violating RICO and of conspiring to violate RICO. The jury did not specify which of four predicate acts they found that defendant had committed. However, the district court stated that it found by a preponderance of the evidence that defendant had a committed all four predicate acts and that the murder guideline, the most serious of the predicate offenses, was therefore appropriate. The Sixth Circuit held that by finding that defendant had committed all four predicate acts, the district court violated defendant’s Sixth Amendment right to trial by jury. There was no way of knowing whether defendant’s jury found beyond a reasonable doubt that he had committed only two of the predicate acts required for a RICO conviction, or three, or even all four. Rather than granting defendant a new trial, the panel remanded for resentencing based on the least serious of the predicate acts, arson and mail fraud, resulting in a guidelines base offense level of 24. U.S. v. Johnson, 440 F.3d 832 (6th Cir. 2005).
6th Circuit upholds finding that murder conspiracy was not underlying racketeering activity. (290) Defendant was convicted of two counts of conspiring to engage in racketeering activity. The district court found that the Bowman murder conspiracy was not underlying racketeering activity for the purposes of determining defendant’s RICO conspiracy offense level. The district court found that defendant had no direct involvement in the murder conspiracy and that the conspiracy was not a reasonably foreseeable act in furtherance of defendant’s jointly undertaken criminal activity. The Sixth Circuit held that these findings were not clearly erroneous. The only evidence that defendant was directly involved in the Bowman murder conspiracy was Tocco’s testimony that when he and Corrado presented their plan to kill Bowman to Corrado’s uncle, he said that “they,” meaning the uncle and defendant, would control the matter. However, it was unclear from this testimony what “control” means, and other evidence indicated that instead of causing Corrado and Tocco to plan to murder Bowman, defendant actually prevented them from killing Bowman. U.S. v. Tocco, 306 F.3d 279 (6th Cir. 2002).
6th Circuit says Hobbs Act conviction served function of special verdict on whether it was predicate act of RICO conspiracy. (290) Defendant was convicted of two counts of conspiring to engage in racketeering activity and one count of an extortion conspiracy in violation of the Hobbs Act. The district court found that the Hobbs Act conspiracy was not underlying racketeering activity for the purpose of calculating defendant RICO conspiracy base offense level. The Sixth Circuit held that the court erred in not including the Hobbs Act conspiracy as relevant conduct. The Hobbs Act conspiracy was listed as “underlying racketeering activity” in the RICO conspiracy indictment, and defendant was convicted of the Hobbs Act conspiracy. Because the jury verdict was general, it was impossible to know whether the jury found that the Hobbs Act conspiracy constituted a predicate act of defendant’s for the RICO conspiracy. However, defendant’s conviction for the Hobbs Act conspiracy served the function of a special verdict on that predicate act. Although the Hobbs Act conspiracy and the RICO conspiracy could theoretically be independent, in a previous appeal the court held that the Hobbs Act conspiracy was part of the RICO conspiracy. The district court also erred by failing to address whether each act of extortion was relevant conduct to the RICO conspiracy. U.S. v. Tocco, 306 F.3d 279 (6th Cir. 2002).
6th Circuit says law of the case from prior forfeiture bound court to find activities were relevant conduct. (290) Defendant was convicted of two counts of conspiring to engage in racketeering activity. The district court did not include as relevant conduct various activities related to the operation of the Edgewater Hotel and Casino. The Sixth Circuit held that under the law of the case doctrine, the district court was bound to consider the Edgewater Hotel activities. The government’s forfeiture actions was based on defendant’s and his co-conspirator’s RICO convictions, and this court previously held that “the criminal forfeitures sought in this case constitute a part of the defendants’ sentences.” The court was bound in this appeal by the holdings it made both in defendant’s previous direct appeal and in the appeal involving defendant’s and his co-defendants’ forfeiture. Because the appellate court previously held that the district court clearly erred in denying forfeiture against defendant for the Edgewater Hotel activities, the district court also clearly erred in concluding that the Edgewater Hotel activities were not reasonably foreseeable acts in furtherance of the RICO conspiracy. U.S. v. Tocco, 306 F.3d 279 (6th Cir. 2002).
6th Circuit holds that extortion conspiracy and acts of extortion were predicate acts of RICO conspiracy. (290) Defendant was convicted of RICO conspiracy charges, extortion, and obstruction of justice. In order to convict defendant of the RICO conspiracy charge, the jury necessarily had to find that defendant agreed to the commission of at least two RICO predicate acts. See 18 U.S.C. § 1961(5). The district court, however, found that defendant was responsible for only one “underlying racketeering offense,” obstruction of justice. Although the jury returned a general verdict and thus did not specify which of the predicate acts it found had been agreed to by defendant, “the other verdicts of the same jury may serve the function of a special verdict on the predicate acts, where those other verdicts necessarily required a finding that the RICO defendant had committed the predicate acts.” Callanan v. U.S., 881 F.2d 229 (6th Cir. 1989). Because the extortion conspiracy was listed as a predicate act in the indictment, the Sixth Circuit found defendant’s conviction on the extortion conspiracy counts served the function of a special verdict on that predicate act. It was clear error for the district court to find that the extortion conspiracy and the substantive acts of extortion involved in it were not “underlying racketeering activity” under USSG § 2E1.1(a)(2). U.S. v. Corrado, 304 F.3d 593 (6th Cir. 2002).
6th Circuit rules that underlying acts of racketeering conspiracy need only by proved by preponderance. (290) The district court fixed defendants’ base offense level for the RICO conspiracy at 28 because it found that one of the objects of the conspiracy was a plot to murder Bowman. The jury’s general verdict of guilty as to the RICO conspiracy count did not indicate whether the jury found that the defendants had actually conspired to murder Bowman. Defendants argued that the government was required to prove the existence of the underlying offense beyond a reasonable doubt, analogizing the situation to a multi-object conspiracy. The Sixth Circuit rejected this analogy, finding a crucial distinction between the two situations. A RICO conspiracy is considered a single object conspiracy with that object being the violation of RICO. Thus, the underlying acts of racketeering are not the objects of the conspiracy, but simply conduct that is relevant to the central objective—participating in a criminal enterprise. The existence of relevant conduct is determined at sentencing by a preponderance of the evidence. Thus, at resentencing (due to other errors), the district court will only be required to find that defendants conspired to murder Bowman by a preponderance of the evidence. U.S. v. Corrado, 227 F.3d 528 (6th Cir. 2000).
6th Circuit directs court to determine which underlying offenses were attributable to RICO defendant. (290) The RICO guideline, § 2E1.1, provides that the base offense level is either 19, or “the offense level applicable to the underlying racketeering activity,” whichever is greater. In the present case, the district court determined that the guideline for the underlying offense was § 2E3.1, relating to gambling offenses, which requires a base offense level of 12. The government argued that the underlying offense was extortion, which after a variety of enhancements applied, resulted in an offense level of 36. The Sixth Circuit remanded because the district court failed to make any specific findings on what conduct could be considered, and it failed to make any comparisons of the resulting offense levels from the underling racketeering offenses. The case involved more than one underlying offense, and the court must “treat each underlying offense as if contained in a separate count of conviction …” Moreover, defendant could only be held responsible for the reasonably foreseeable actions of his co-conspirators in furtherance of jointly undertaken activity. The district court made no findings as to what criminal activities were in furtherance of the conspiracy and what activities were reasonably foreseeable to defendant. U.S. v. Tocco, 200 F.3d 401 (6th Cir. 2000).
6th Circuit says court may have double-counted contraband cigarettes. (290) Defendant and two relatives sold untaxed cigarettes to local retailers. The district court assigned him an offense level of 14 based upon the amount of excise taxes evaded in the course of the cigarette smuggling activities. This corresponded to lost taxes of between $70,000 and $120,000. At a tax rate of $7.50 per carton, this required the court to find that defendant smuggled at least 9334 cartons of cigarettes. The Sixth Circuit remanded because of the possibility that the court may have “double-counted” certain cigarette cartons. Police seized 7100 cartons of cigarettes from a store, and an additional 1870 cartons were recovered from a storage locker in defendant’s name. The court also counted 2010 cartons included in order forms and receipts that were found with defendant’s fingerprints on them. However, the proof failed to show whether these receipts applied to cigarettes in the delivery truck, to those found in the storage shed, or to an entirely different shipment of contraband. U.S. v. Abdullah, 162 F.3d 897 (6th Cir. 1998).
6th Circuit says leadership enhancement for gambling defendant was not double counting. (290) Defendant was convicted of operating an illegal gambling business. He argued that a leadership enhancement was double counting because the underlying offense and offense level already accounted for this factor. The Sixth Circuit held that the leadership enhancement was not double counting. The statute of conviction, 18 U.S.C. § 1955, also applies to those who do not lead or manage the enterprise. The base offense level of 12 under § 2E3.1(a) is not strictly applied to leaders or organizers—a defendant need only “engage” in a gambling business to receive this level. U.S. v. Wall, 92 F.3d 1444 (6th Cir. 1996).
6th Circuit upholds application of guideline § 2E1.4 to defendant who attempted to hire hit man to kill wife. (290) Defendant pled guilty to using an interstate commerce facility in an attempt to have his wife killed. The 6th Circuit rejected defendant’s argument that he should have been sentenced under guideline § 2A2.1 (Conspiracy or Solicitation to Commit Murder), rather than guideline § 2E1.4 (Use of Interstate Commerce Facilities in the Commission of Murder-For-Hire). The Statutory Index indicated that either guideline was applicable to defendant’s conduct. However, guideline § 2E1.4(a) directs a court to apply the greater of a base offense level of 23, or the offense level applicable to the underlying conduct. Under the facts of this case, § 2A1.2 contains the offense level applicable to the underlying conduct and results in a base offense level of 20. Since 23 is greater than 20, the base level in guideline § 2E1.4 is applicable. U.S. v. Wilson, 920 F.2d 1290 (6th Cir. 1990).
7th Circuit finds bombing and armed robberies were relevant conduct for racketeer. (290) 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 approves above-guidelines sentence in dog-fighting case. (290) Three defendants pled guilty to a dog fighting conspiracy. They each had a recommended guideline range of zero to six months, but were sentenced, respectively, to 16, 18 and 24 months of imprisonment. The Seventh Circuit upheld the above-Guidelines sentences as reasonable. The panel did not express an opinion on the court’s apparent belief that the Guidelines are per se deficient with respect to large dog fighting conspiracy. However, the court’s sentencing considerations – the number of dogs, the number of fights, defendant’s leadership role in the enterprise and the duration of the misconduct – were properly considered as part of the “nature and circumstances of the offense” under 18 U.S.C. § 3553(A)(1). The court also appropriately applied the “extraordinary cruelty” departure described in note 2 to § 2E3.1 to defendant Addison in connection with his electrocuting a defeated dog. Although Addison received a longer sentence than a non-appealing co-conspirator who participated in the same electrocution, the other conspirator was a “comparatively peripheral” member of the conspiracy. There is nothing per se improper about a sentencing disparity among co-conspirators. U.S. v. Courtland, 642 F.3d 545 (7th Cir. 2011).
7th Circuit upholds bodily injury increase where beating victim needed nine stitches to head. (290) Defendant operated numerous gambling parlors and provided loans to patrons and others at high rates of interest. When borrowers could not meet these inflated terms, defendant would show up with various associates and gang members to forcibly demand payment. The Seventh Circuit affirmed a § 2E2.1(b)(2)(A) enhancement for bodily injury. Defendant conceded both in his brief, and at oral argument, that the beating of Ging Hong was sufficiently severe to require nine stitches to Hong’s head. Based on this incident alone, the district court did not err in applying the bodily injury increase. U.S. v. Dong Jin Chen, 497 F.3d 718 (7th Cir. 2007).
7th Circuit holds that bribery guideline should have applied to fraud. (290) Defendants, officers of a labor organization, collaborated on three schemes involving the misappropriation of the unions’ funds. In a “loans-for-deposits” scheme, defendants deposited large sums of union money in various banks. In exchange, the two received overly generous terms and conditions on personal loans. They were also involved in a more complicated hotel loan kickback scheme. The district court calculated defendants’ sentences under § 2F1.1 (fraud), but the government argued it should have applied § 2E5.1 (benefit plan bribery). The Seventh Circuit agreed with the government that the court should have sentenced defendant under § 2E5.1. Guideline § 1B1.2 encourages a court to find an appropriate guideline section to fit the conduct, not just the charge. Note 13 to the 1990 version of § 2F1.1 notes that where an indictment or information establishes an offense more aptly covered by another guideline, the court should apply that guideline rather than § 2F1.1. The indictment charged that one defendant “sought and received a substantial personal benefit and kickback in exchange for influencing” the bank to provide a $6.5 million loan, which is closer to bribery than mail fraud. Similarly, the loans-for-deposits scheme was basic bribery, with defendant promising union deposits to the banks in exchange for favorable personal loans. U.S. v. Serpico, 320 F.3d 691 (7th Cir. 2003).
7th Circuit says use of gross revenues as benefit received from bribes too speculative. (290) Defendant, the police chief of a suburb of Chicago, accepted $500 a month from organized crime to protect illegal gambling in the town’s bars and restaurant. The guidelines base the sentence for a crime that involves taking bribes on the “benefit received” in return for the bribe. The beneficiaries here were the owners of the bar and restaurants that profited from the illegal gambling that defendant protected, plus organized crime, which took a percentage of the gambling revenues. The district court estimated those revenues at $6 million. The Seventh Circuit held that this gross figure was too speculative to use as the “benefit received” from the bribes. The relevant “benefit received” was profit, not gross revenue. The government made no effort to net out the cost associated with the gambling. It was the government’s burden, not defendant’s, to provide evidence from which those costs could be estimated. Although it was possible that the $1 million by which the gross revenues exceeded the bottom of the sentencing bracket was a sufficient cushion, this was purely speculative. U.S. v. Sapoznik, 161 F.3d 1117 (7th Cir. 1998).
7th Circuit approves upward departure based on RICO defendant’s involvement in organized crime. (290) Defendants were convicted of RICO charges for their involvement in a Chicago crime syndicate. The district court, relying on U.S. v. Rainone, 32 F.3d 1203 (7th Cir. 1994), made a two-point upward departure based on their involvement in organized crime. Defendants argued that Rainone was distinguishable because the base offense level was determined to be 19 under § 2E1.1(a)(1), while defendants were sentenced under § 2E1.1(a)(2), which references the guideline for the underlying offense. In defendants’ case, this was “loansharking.” The Seventh Circuit held that a defendant’s involvement in organized crime is not reflected in the base offense level under § 2E1.1, regardless of whether the offense level is established under subsection (a)(1) or (a)(2). Neither the RICO statute nor the underlying offenses to which it applies are limited to defendants engaged in organized crime. Thus, the departure was proper. U.S. v. Zizzo, 120 F.3d 1338 (7th Cir. 1997).
7th Circuit approves upward departure for RICO defendant’s involvement in organized crime. (290) Defendant pled guilty to RICO charges. The district court made a two level upward departure based on his involvement in organized crime. Defendant argued that this was improper because § 2E1.1 already factors a defendant’s involvement in organized crime into the base offense level applicable to a RICO defendant. The Seventh Circuit held that a RICO defendant’s nexus to organized crime can provide a proper ground for an upward departure. Under U.S. v. Rainone, 32 F.3d 1203 (7th Cir. 1994), a defendant’s involvement in organized crime is not reflected in the base offense level assigned to him under § 2E1.1. U.S. v. Damico, 99 F.3d 1431 (7th Cir. 1996).
7th Circuit looks to overall racketeering conspiracy to assess role in the offense. (290) Defendant headed a criminal enterprise that engaged in extortion, armed robbery, and gambling and bookmaking. He pled guilty to RICO charges. Defendant challenged a § 3B1.1 role enhancement, arguing, based on Note 1 to § 2E1.1, that his role in the offense should be separately judged with respect to each underlying offense. The 7th Circuit held that the predicate-by-predicate approach of Note 1 applies in establishing the base offense level, and not in applying Chapter 3 adjustments. Nothing in § 2E1.1 or its commentary indicates that role adjustments should be applied any differently than they are for other offenses, i.e., by considering the count of conviction and all relevant conduct. Therefore, the district court properly looked to the overall racketeering conspiracy in assessing defendant’s role in the offense. U.S. v. Damico, 99 F.3d 1431 (7th Cir. 1996).
7th Circuit considers RICO murder despite acquittal or hung jury on murder counts. (290) Defendants, members of the “Mob,” were convicted of RICO charges. They challenged the judge’s finding that their conduct included a conspiracy to commit murder, since the jury either acquitted or hung on the murder counts. The Seventh Circuit held that the judge’s consideration of the murder did not usurp the jury’s function. The jury was asked to decide whether there was proof beyond a reasonable doubt, whereas the preponderance of the evidence standard applied at sentencing. Although two members of the circuit have recently expressed support for using a clear and convincing evidence standard at sentencing to justify a markedly higher sentence that the facts found at trial, that was not the view of the majority of the judges. U.S. v. DiDomenico, 78 F.3d 294 (7th Cir. 1996).
7th Circuit upholds consecutive sentences for RICO convictions and underlying substantive offenses. (290) Defendants were convicted of a RICO offense and several separate substantive offenses. They argued that the consecutive sentences for the RICO offense and the substantive offenses violated double jeopardy because the latter offenses also served as predicate acts supporting the RICO convictions and thus served to enhance the RICO sentence. The 7th Circuit held that no double jeopardy problem arises when a sentencing court considers other charged and sentenced conduct to determine the length of a consecutive sentence imposed for violation of a separate criminal statute. The court acknowledged that language in U.S. v. Randall, 947 F.2d 1314 (7th Cir. 1991) suggests a double jeopardy problem where, in sentencing a defendant for both pre-guidelines and post-guidelines conduct, a court imposes consecutive sentences based in part on the total amount of loss or drugs flowing from an entire course of criminal conduct. However, this language is dicta, since the sentencing court in that case explicitly divided the losses between pre- and post-guidelines counts. U.S. v. Morgano, 39 F.3d 1358 (7th Cir. 1994).
7th Circuit finds conspiracy straddled effective date of guidelines. (290) Defendants argued for the first time on appeal that the district court erred in finding that their RICO offense continued beyond November 1, 1987, the effective date of the guidelines. The 7th Circuit held that the finding was not plain error. Although the jury did not find that any defendant committed the two acts the government alleged to have occurred after November 1987, the judge decided that defendants did commit those acts. A sentencing court may find facts explicitly or implicitly rejected by the jury. One extortion victim testified that he made his last payment to the conspiracy in November 1987. Although the conspirator contradicted the victim, a court’s choice between competing evidence cannot be clearly erroneous and is certainly not plain error. Finally, the court rejected one defendant’s claim that he withdrew from the conspiracy in June 1987 when he was involuntarily terminated. Merely ceasing participation in a conspiracy is never enough to withdraw from it unless accompanied by some affirmative act, such as a confession to authorities or a clear communication to co-conspirators of abandonment of the conspiracy’s goals. U.S. v. Morgano, 39 F.3d 1358 (7th Cir. 1994).
7th Circuit rules that 19 is minimum base offense level for RICO conviction. (290) Defendant was convicted of a RICO offense. He argued that his predicate acts were closer to running an illegal gambling business than extortion, and therefore his base offense level under § 2E1.1(a) should have been the same as for illegal gambling under § 2E3.1(12). The 7th Circuit rejected this claim, noting that even if defendant’s predicate acts were closer to running an illegal gambling operation, § 2E1.1(a) establishes 19 as the minimum offense level for RICO violations. Defendant could not lower his offense level below 19 by choosing a different offense for his predicate acts. U.S. v. Morgano, 39 F.3d 1358 (7th Cir. 1994).
7th Circuit upholds separate grouping of extortion in violation of 18 U.S.C. § 1951. (290) Defendant argued that the district court should have grouped his conviction for operating a gambling business with the predicate extortion act used to determine his RICO sentence. The 7th Circuit upheld the separate grouping, since § 3C1.2(d) explicitly excludes extortion in violation of 18 U.S.C. § 1951 from the grouping procedure of § 3D1.2. U.S. v. Morgano, 39 F.3d 1358 (7th Cir. 1994).
7th Circuit approves upward departure for RICO defendants’ involvement with organized crime. (290) Defendants were convicted of a RICO conspiracy. The 7th Circuit approved an upward departure based on their involvement in organized crime, rejecting defendants’ claim that this was already considered in the base offense level of 19 for RICO convictions. Although a RICO conviction requires some minimal structure, the “enterprise” need be nothing more than a small, informal gang. The court did not explore the boundaries of an “organized crime” departure, since the criminal syndicate here, which dated back to Al Capone, operated on a range far beyond the ordinary RICO organization. The danger it posed to society was not adequately reflected in the guideline range. U.S. v. Rainone, 32 F.3d 1203 (7th Cir. 1994).
7th Circuit finds no ex facto violation where guideline amendment did not change offense level. (290) Defendant was convicted of conspiring to violate RICO based on his participation in a 1987 arson and his agreement to commit a second arson in 1989. He received a base offense level of 24 under the 1992 version of § 2K1.4. He claimed that this violated the ex post facto clause. The 7th Circuit found no ex post facto violation, since defendant would have had the same offense level of 24 under the 1989 guidelines. The 1989 guidelines provided for a base offense level of 6, but increased it by 18-levels if the defendant knowingly created a substantial risk of death or serious bodily injury. U.S. v. Korando, 29 F.3d 1114 (7th Cir. 1994).
7th Circuit sentences RICO defendant under arson guideline. (290) Defendant was convicted of conspiring to violate RICO based on his participation in a 1987 arson and his agreement to commit a second arson in 1989. The district court found that each arson represented a separate unit, and added two to his base offense level under § 3D1.4. Defendant argued that the court should have treated the entire matter as a scheme to defraud the insurance companies and should have determined his base offense level under § 2F1.1. The 7th Circuit held that the guidelines were correctly applied. Under § 2X1.1, the conspiracy to violate RICO was treated as a completed RICO violation. § 2E1.1 directed the court to look to the offense level applicable to the underlying racketeering activity. Here, the racketeering activity was two separate arsons. U.S. v. Korando, 29 F.3d 1114 (7th Cir. 1994).
7th Circuit affirms that RICO guideline complies with guidelines’ enabling legislation. (290) The 7th Circuit rejected the argument that the RICO guideline, section 2E1.1, conflicts with the guidelines’ enabling legislation by unfairly providing a high minimum base offense level and then failing to set forth specific aggravating or mitigating factors. Congress intended to make RICO a “weighty offense.” The very structure of the statute demonstrates that Congress has decided that a RICO conspiracy is a specific, identifiable crime apart from any underlying predicates. U.S. v. Ashman, 979 F.2d 469 (7th Cir. 1992).
7th Circuit upholds preponderance of evidence standard in racketeering case. (290) Defendant was convicted of racketeering charges. Section 2E1.1(a)(2) calls for the use of the offense level applicable to the underlying racketeering activity. Defendant contended that in considering whether a he committed some other offense, the court should use a standard more exacting than the preponderance of the evidence. The 7th Circuit held that the district court properly used the preponderance standard in concluding that defendant was responsible for his wife’s murder. Conviction at trial supplies all of the justification the Constitution requires for depriving a defendant of liberty for any term up to the maximum prescribed by statute. The court appeared to reject the 3rd Circuit’s conclusion in U.S. v. Kikumura, 918 F.2d 1084 (3rd Cir. 1990) that when findings at sentencing transform the offense of conviction into an far more serious offense with a much more severe penalty, the court should use an enhanced burden of persuasion. U.S. v. Masters, 978 F.2d 281 (7th Cir. 1992).
7th Circuit affirms use of murder guideline for RICO defendant. (290) Defendant was convicted of racketeering activities ranging from protecting bookies to soliciting the murder of his wife. Section 2E1.1(a)(2) calls for use of the offense level applicable to the underlying racketeering activity. The 7th Circuit affirmed the use of the murder guideline, section 2A1.1, rather than the conspiracy to commit murder guideline, section 2A2.1 (under the pre-November 1990 version of the guidelines). Since the murder of defendant’s wife occurred during the racketeering conspiracy, section 2E1.1(a)(2) and the relevant conduct guideline directed the court to the murder guideline rather than the solicitation guideline. The base offense level for murder is 43, i.e., life imprisonment. To come as close as possible to life imprisonment, the court properly gave under section 5G1.2(d) consecutive maximum sentences on each count, for a total of 40 years. The consecutive terms for racketeering and racketeering conspiracy did not constitute double jeopardy. U.S. v. Masters, 978 F.2d 281 (7th Cir. 1992).
7th Circuit finds that district court applied improper guideline in extortion case. (290) Defendant hired two burly men to assist him in collecting legitimate business debts. The two men used violent methods. The district court found that the two men should not be sentenced under guideline § 2E2.1 (Making, Financing or Collecting an Extortionate Extension of Credit) because there was no evidence of loan-sharking or organized crime activity. Accordingly he sentenced them under the lesser § 2B3.2 (Extortion). The 7th Circuit disagreed with the finding that there was no organized criminal activity. The two men were involved in a crudely organized ongoing pattern of violence in order to collect extensions of credit: they circulated business cards, threatened two customers, and made repeated phone calls. The fact that the debts were legitimate, and that the two men did not extend the credit themselves did not remove them from the scope of § 2E2.1. The 7th Circuit also found that the defendant who hired them was improperly sentenced under guideline § 2A6.1 (Threatening Communications). The defendant was not part of the violence, but he did participate in and benefit from the extortion. Therefore, he should have been sentenced under the more serious § 2B3.2 (Extortion). U.S. v. Bigelow, 914 F.2d 966 (7th Cir. 1990).
8th Circuit finds dog-fighting conspiracy involved “extraordinary cruelty.” (290) Defendant and other members of a dog-fighting conspiracy bred, raised, trained, sold and fought pit bulls. Note 2 to § 2E3.1 authorizes an upward departure for “extraordinary cruelty.” Defendant challenged the district court’s upward departure, contending that while his conduct was cruel, it was not extraordinarily cruel. The district court found that defendant raised and sold multiple dogs knowing that the dogs would be used in animal fighting ventures, knowing that some of the dogs would die in combat, and knowing that other dogs would be severely injured and then disposed of inhumanely. The court recognized that defendant was not alleged to have personally killed or maimed any of the dogs. The Eighth Circuit affirmed the departure, finding that the “egregious facts of this case” clearly constituted extraordinary cruelty under any ordinary meaning of that phrase. U.S. v. Hackman, 630 F.3d 1078 (8th Cir. 2011).
8th Circuit holds that court properly cross-referenced underlying conduct in murder-for-hire case. (290) Defendant was convicted of conspiracy to commit murder-for-hire, in violation of 18 U.S.C. §1958. Section 2E1.4, which applies to §1958 convictions, provides for a base offense level of the greater of (1) 32, or (2) the offense level applicable to the underlying unlawful conduct. The district court cross-applied §2A1.5 for Conspiracy or Solicitation to Commit Murder, which resulted in an offense level of 37. Defendant argued that subsection (2) should be applied only if the crime encompassed “underlying unlawful conduct” in addition to that required to violate 18 U.S.C. §1858. The Eighth Circuit found this interpretation contrary to the plain language of §2E1.4(a), which does not contain an additional conduct requirement. The district court did not err in its calculation of defendant’s advisory sentencing range. U.S. v. Dotson, 570 F.3d 1067 (8th Cir. 2009).
8th Circuit agrees that relevant conduct murder was underlying offense. (290) Defendant was convicted of traveling in interstate commerce with intent to commit murder for hire, in violation of 18 U.S.C. § 1958(a). Violations of § 1958 are governed by USSG § 2E1.4(a), which provides for a base offense level of either 32 or “the offense level applicable to the underlying unlawful conduct.” The court concluded that the underlying offense was first-degree murder, resulting in a base offense level of 43 and a mandatory sentence of life in prison. Defendant argued that his base offense level should be 32 because murder was not part of the offense charged in the indictment and therefore there was no underlying unlawful conduct as contemplated by USSG § 2E1.4(a)(2). The Eighth Circuit held that because the murder was relevant conduct, the district court properly cross-referenced the murder guideline. Defendant aided an interstate murder-for-hire that resulted in a murder. Thus, applying the relevant conduct criteria, first-degree murder became the underlying conduct for purposes of § 2E1.4(a)(2), whether or not that murder was charged as part of the offense. Because former 18 U.S.C. § 1958(a) authorized, and USSG § 2A1.1 of the guidelines mandated, a life sentence when first-degree murder results from the § 1958(a) offense, the court affirmed the life sentence. U.S. v. Smith, 232 F.3d 650 (8th Cir. 2000).
8th Circuit declines challenge to murder-for-hire guideline that did not affect defendant. (290) Defendant was convicted of conspiring to hire a hit man to kill his girlfriend’s husband, in violation of 18 U.S.C. § 1958. He argued that the guideline, § 2E1.4, was irrational and violated due process because the base offense level is the greater of 32 or the offense level for the underlying conduct. Thus, a person in criminal history category I with a base offense level of 32 would have a guideline range of 121-151 months, while a person in criminal history category VI would have a guideline range of 210-262 months. However, the statutory maximum for 18 U.S.C. § 1958 is ten years. Therefore, two level-32 defendants, one with a criminal history of I and one with a criminal history of VI, would receive the same term of imprisonment. The Eighth Circuit held that defendant lacked standing to raise this issue because he was sentenced well below the ten-year statutory maximum. Because he was in criminal history category I, the guidelines were more lenient than if he had been placed in any higher category. Thus, § 2E1.4 was not irrational as applied to him. U.S. v. Turechek, 138 F.3d 1226 (8th Cir. 1998).
8th Circuit upholds cross‑reference from § 2E1.2(a)(2) to § 2C1.1 to § 2J1.2. (290) Defendant, a police officer, was convicted of extorting money from a motorist after discovering a loaded handgun in the motorist’s car. The Eighth Circuit upheld a cross‑reference from § 2E1.2(a)(2) (Travel Act violations) to § 2C1.1 (Extortion under Color of Official Right) to § 2J1.2 (Obstruction of Justice). Defendant’s extortion was committed for the purpose of obstructing justice with respect to another criminal offense, i.e., the motorist’s firearm violation. The district court was not required to cross reference 2X3.1 (Accessory After the Fact), which calls for a base offense level six levels lower than the firearms offense. Section 2J1.2(c)(1) says to apply the cross reference to § 2X3.1 only if the resulting offense level under § 2X3.1 is greater than the level determined under § 2J1.2. Thus a cross reference to § 2X3.1 would have complicated the analysis, and would not have yielded a greater offense level than under § 2J1.2. U.S. v. Baker, 82 F.3d 273 (8th Cir. 1996).
8th Circuit says offense level for activity underlying RICO charges cannot be less than 19. (290) The 8th Circuit held that the district court misapplied § 2E1.1(a) (1991) in calculating defendant’s base offense level at 17 for her RICO conspiracy conviction. Section 2E1.1(a) provides that the base offense level for a RICO offense is 19, unless the offense level applicable to the underlying racketeering activity is greater. The district court calculated defendant’s offense level for defendant’s underlying crimes under § 2F1.1, and determined it was 17. Because 19 is greater than 17, it was error not to give defendant a base offense level of 19 under § 2E1.1(a). U.S. v. Olson, 22 F.3d 783 (8th Cir. 1994).
8th Circuit holds leadership enhancement was not double counting in gambling business. (290) Defendant argued that an enhancement under section 3B1.1(a) for being the leader of a criminal activity involving five or more participants was double counting, since five or more participants was an essential element of illegal gambling business conviction. The 8th Circuit rejected this argument. The section 3B1.1 enhancement was because defendant was a leader of criminal activity involving five or more participants, not because the organization contained five or more participants. U.S. v. Trupiano, 11 F.3d 769 (8th Cir. 1993).
8th Circuit upholds enhancement based on co-defendant’s possession of a gun. (290) Defendant acted as a middleman between a bookie and his clients, warning one gambler to pay his debt to the bookie. Defendant also surreptitiously took pictures of another gambler which the bookie used to intimidate the gambler. Defendant was convicted of aiding and abetting the bookie’s use of extortionate means to collect gambling debts. His sentence was enhanced under § 2E2.1(b)(1)(C), based on the bookie’s possession of a gun. Defendant argued that this was improper because the charge of carrying a firearm had been dismissed against the bookie and defendant had not been charged with conspiracy. The 8th Circuit disagreed, noting that defendant was involved in criminal activity undertaken in concert with the bookie. The bookie’s possession and display of the gun was in furtherance of such activity, and such conduct was reasonably foreseeable by defendant. U.S. v. Barragan, 915 F.2d 1174 (8th Cir. 1990).
9th Circuit says foreign conduct should not be used to calculate offense level. (290) Defendants were convicted of a RICO violation in which the underlying predicates consisted of defrauding a bank in China and then committing immigration fraud to flee to the U.S. At sentencing, the district court calculated defendants’ sentence using § 2S1.1(a)(1), which instructs that the base offense level should be calculated by using the offense level for the underlying offense. The court determined that the underlying offense was fraud. The Ninth Circuit held that the district court erred in using conduct that occurred in a foreign country to calculate defendants’ offense level and remanded for recalculation of defendants’ base offense level. U.S. v. Chao Fan Xu, 706 F.3d 965 (9th Cir. 2013).
9th Circuit rules minimum sentence for racketeering murder is life. (290) The Violence in Aid of Racketeering statute, 18 U.S.C. § 1959, provides that whoever commits murder in aid of racketeering “shall be punished by death or life imprisonment, or a fine under this title, or both.” Defendant argued that § 1959 allowed the court to impose a sentence of only a fine. The Ninth Circuit held that the minimum sentence for a violation of § 1959 involving a murder was life imprisonment. U.S. v. Rollness, 561 F.3d 996 (9th Cir. 2009).
9th Circuit finds that life sentence for RICO conviction is not cruel and unusual or in violation of equal protection. (290) Defendant was convicted of RICO and RICO conspiracy based on his participation in drug trafficking and violence on behalf of the Mexican Mafia, a violent street and prison gang. The predicate acts for defendant’s RICO conviction included conspiracy to commit murder. The Ninth Circuit found that defendant’s life sentence was not so grossly disproportionate as to violate the Eighth Amendment’s ban on cruel and unusual punishments. The court also held that no equal protection violation arose from the fact that under RICO similar criminal conduct may receive a different sentence based on the state where it occurs. U.S. v. Fernandez, 388 F.3d 1199 (9th Cir. 2004), amended, U.S. v. Fernandez, 425 F.3d 1248 (9th Cir. 2005).
9th Circuit finds that any error in sentencing RICO defendants is harmless because RICO maximum for offense involving murder is life. (290) Defendants were convicted of participating in a RICO enterprise that engaged in murder and drug dealing. The district court decided to sentence defendants who did not directly participate in the murders using the guideline for controlled substance offenses. On appeal, defendants alleged that their sentences violated Apprendi because the court, rather than the jury, made the drug quantity determinations to set their sentences. The Ninth Circuit held that any error was harmless because the maximum sentence for a RICO violation that includes murder is life. Because “the district court did not sentence [defendants] to more than life imprisonment,” the court affirmed their sentences. U.S. v. Shryock, 342 F.3d 948 (9th Cir. 2003).
9th Circuit says use of gun in extortion attempt was foreseeable to defendant. (290) Defendant arranged for several co-defendants to travel to Glendale, California to intimidate the victim into paying an alleged debt. Defendant said co-defendant Bekaryn would “tell you guys what you got to do there.” Bekaryn gave guns to two of the co-defendants, and the guns were shown to the victim to intimate him. The district court found the use of the firearms was foreseeable to defendant, and increased his sentence by three levels under § 2E2.1(b)(1)(c). On appeal, the Ninth Circuit found no clear error. The co-defendants were talking about the use of a gun 11 days before the extortion attempt, and defendant’s close supervision and involvement in the extortion scheme supported a finding that he knew guns would be used. U.S. v. Sarkisian, 197 F.3d 966 (9th Cir. 1999).
9th Circuit does not decide whether prior sentence would constitute double jeopardy for later charge. (290) Defendant was convicted in Rhode Island federal court of conspiracy to violate RICO and several substantive charges. He then returned to California for a second federal trial on related substantive offenses. He argued that the sentence imposed by the Rhode Island district court was based on conduct charged in the California indictment, and therefore the California prosecution violated double jeopardy. The Ninth Circuit found it unnecessary to decide whether a prior sentence would bar a later sentence for the same conduct, because the California conduct here was not included as relevant conduct by the Rhode Island district court. U.S. v. Saccoccia, 18 F.3d 795 (9th Cir. 1994).
11th Circuit says court did not err in considering acquitted conduct. (290) Defendant was convicted of crimes related to multiple schemes to defraud the Florida and California Medicaid programs. He argued that the 5th and 6th Amendments barred the district court from using the offense level for wire fraud, mail fraud and interstate transportation of stolen property in fixing his base offense level for Count I (racketeering) because the jury’s special verdict on Count I and not guilty verdicts on the wire fraud counts had acquitted him of such offenses. The Eleventh Circuit held that the district court did not infringe defendant’s constitutional rights in considering conduct for which the jury acquitted him. There was nothing inconsistent with a jury verdict. Since the district court found by a preponderance of the evidence that defendant had acted in concert with others in relation to the fraud scheme, his argument that being acquitted of the wire fraud counts related to those scheme meant his acts were not jointly undertaken criminal activity was “fanciful on its face.” U.S. v. Bradley, 644 F.3d 1213 (11th Cir. 2011).
11th Circuit allows juvenile who continued in RICO activities after turning 18 to be sentenced as an adult. (290) Defendant was convicted under Count 1 of a RICO conspiracy, for which the jury issued a special finding that defendant committed the Guzman murder, and under Count 2 of the Guzman murder, a violent crime in aid of racketeering (VICAR murder). He argued that the district court was not authorized to impose a sentence above 20 years’ because the racketeering act identified in the jury’s special verdict, defendant’s murder of Guzman, was an act of “juvenile delinquency” under the Juvenile Delinquency Act. The Eleventh Circuit held that in the context of a RICO conspiracy, if the defendant continues his participation in the activities of the conspiracy past the age of majority, those crimes may be considered for both determining guilt and his sentence. Defendant continued his RICO activities past the age of majority. Thus, the district court did not err by using 18 U.S.C. 1963(a) to enhance defendant’s sentence based on the jury’s finding that he committed the Guzman murder. U.S. v. Flores, 572 F.3d 1254 (11th Cir. 2009).
11th Circuit holds “grouping” rules apply to RICO predicate acts. (290) Defendants argued that the grouping rules in guideline § 3D1.1 apply only to counts of the indictment that result in convictions, not to RICO predicate acts. The Eleventh Circuit rejected the argument, relying on Application Note 1 to § 2E1.1 which provides that a sentencing court is to “treat each underlying offense as if contained in a separate count of conviction.” That application note also refers to Chapter 3D which includes the grouping provisions. “The plain language of the guidelines therefore clearly indicate that a sentencing court must apply the grouping rules, where applicable, to determine a defendant’s offense level for underlying racketeering conduct.” U.S. v. Nguyen, 255 F.3d 1335 (11th Cir. 2001).
11th Circuit reverses RICO sentences for Apprendi error. (290) The jury failed to find any RICO predicate act that had a potential penalty of life imprisonment. See 18 U.S.C. § 1963. Therefore, under Apprendi v. New Jersey, 530 U.S. 466 (2000), the maximum penalty any of the defendants could have received on each RICO count was 20 years. Because three defendants were sentenced to terms greater than 20 years on the RICO conspiracy count, the Eleventh Circuit vacated their sentences. Another defendant’s sentence was vacated because it exceeded forty years, the combined maximum sentences of the substantive count and the conspiracy count. U.S. v. Nguyen, 255 F.3d 1335 (11th Cir. 2001).
11th Circuit applies money laundering guideline to exchange of large bills for small bills. (290) Informants posing as drug dealers told defendants they had cash drug proceeds that they needed to convert into large-denomination bills in order to more easily conceal it for transport out of the country. For a commission, defendants exchanged currency with the informants on 12 occasions. Defendants were convicted of racketeering conspiracy charges. The district court sentenced them under § 2S1.1, the money laundering guideline. Defendant argued that they did not commit money laundering, contending that the type of transaction they engaged in, swapping large bills for small bills, does not “create the appearance of legitimate wealth.” The Eleventh Circuit disagreed. Exchanging large bills for small bills facilitates concealment of the “location” of funds because one large bill is easier to hide than several small bills of the same total value. However, the district court erred in applying a preponderance of the evidence standard to determine that the object of the racketeering conspiracy was money laundering. Defendants’ guilty pleas did not establish whether money laundering or mail fraud was the object of the racketeering conspiracy. Under § 1B1.2(d), as interpreted by U.S. v. Ross, 131 F.3d 970 (11th Cir. 1997), the district court could sentence defendants under the money laundering guideline only if it was convinced beyond a reasonable doubt that they committed that offense. U.S. v. Farese, 248 F.3d 1056 (11th Cir. 2001).
11th Circuit bases loss from credit card fraud on average amount per card charged before arrest. (290) Defendants pled guilty to a RICO conspiracy for a scheme in which, using phony credit cards, they made large purchases of expensive goods from luxury stores. The district court calculated the loss of $2.5 million by adding the number of completed false cards, unembossed false cards, signature panels, other unembossed cards found in a safe in a hotel where some of the defendants were staying, and a list of account numbers. The total number was multiplied by the $6900 average amount charged per account during the two weeks prior to defendants’ arrest. The Eleventh Circuit affirmed, since the use of averaging to calculate loss is acceptable. An intended loss need not be realistically possible. Nothing in § 2F1.1 requires a defendant be able to inflict the loss he intends. U.S. v. Wai-Keung, 115 F.3d 874 (11th Cir. 1997).
11th Circuit holds that § 2F1.1 does not apply to RICO conspiracy. (290) Defendants pled guilty to a RICO conspiracy for a scheme in which, using phony credit cards, they made large purchases of expensive goods from luxury stores. The Eleventh Circuit rejected a 3-level reduction under notes 7 and 9 to § 2F1.1. The district court correctly held that § 2F1.1 does not apply since RICO conspiracy is specifically covered in the guidelines for RICO offenses. U.S. v. Wai-Keung, 115 F.3d 874 (11th Cir. 1997).
11th Circuit says information charging gratuity did not bar sentence for bribery. (290) Defendants pled guilty to violating 18 U.S.C. § 1954, which prohibits receiving or soliciting a bribe or a gratuity. They argued that they were charged with and pled guilty only to the gratuity prong of § 1954 and that therefore the court should have sentenced them for a gratuity (base offense level of 6 under § 2E5.1(a)), rather than a bribe (base offense level of 10). The Eleventh Circuit held that § 1954 states a single crime, unlike guidelines that differentiate between levels of punishment applicable to that single offense. Therefore, even though the information in these cases used the term “gratuity,” defendants pled guilty to violating the statute and could be sentenced for bribery. U.S. v. Kummer, 89 F.3d 1536 (11th Cir. 1996).
11th Circuit agrees that loan to union official was bribe rather than gratuity. (290) Defendant, a union official, invested union funds in a real estate company in return for receiving a personal loan that he was otherwise unqualified to receive. He pled guilty to violating 18 U.S.C. § 1954, which prohibits receiving or soliciting a bribe or a gratuity. The Eleventh Circuit upheld the district court’s use of the base offense level for bribery rather than for a gratuity under § 2E5.1(a)(1) and (2). A bribe is an unlawful payment with the specific understanding that it will corruptly affect an official act of the recipient. A gratuity is an unlawful payment other than a bribe. There was sufficient evidence of an understanding between defendant and the real estate company. The head of the company spoke to defendant several times to encourage him to invest and defendant’s first application for a loan was turned down. The court did not improperly rely on defendant’s grand jury testimony that he was pushed into making the investment. The probation officer who recommended the use of the bribery guideline stated that she would have arrived at the same conclusion without considering the testimony. U.S. v. Kummer, 89 F.3d 1536 (11th Cir. 1996).
11th Circuit says value of bribe was net benefit of stock purchase. (290) Defendant, a union official, invested union funds in the stock of a real estate company in return for receiving a personal loan that he was otherwise unqualified to receive. He pled guilty to receiving or soliciting a bribe or a gratuity. At sentencing, the district court rejected defendant’s argument that the value of the improper benefit was the amount of the loan. Instead, it adopted the PSR’s recommendation that the “value of the improper benefit to the payer” under § 2E5.1(b)(2) was the full amount of defendant’s $253,041 investment. The Eleventh Circuit remanded with directions to determine the net benefit of the $253,000 stock purchase. If that figure is less than the $85,000 loan to defendant, the court will need to determine the value of the loan to see if it is greater than the net value of the investment. The value of a loan to the borrower may be less than the face amount. U.S. v. Kummer, 89 F.3d 1536 (11th Cir. 1996).
11th Circuit rejects downward departure for Travel Act offense that did not involve organized crime. (290) Defendant was convicted of interstate travel with intent to carry on the unlawful activity of extortion. During a recorded phone call, defendant told the victim that he would “make sure you never walk again” if the victim did not repay money he owed defendant. The district court departed downward, finding that the case fell outside the heartland of Travel Act offenses because defendant was not involved with organized crime. The 11th Circuit disagreed. The widespread use of the Travel Act in federal prosecutions and judicial approval of its application to offenses not associated with organized crime made it unlikely that the Sentencing Commission did not consider the fact that organized crime would not be a part of some Travel Act offenses. The Commission did not intend any sentencing distinction under 2E1.2 based on association with organized crime. U.S. v. Dailey, 24 F.3d 1323 (11th Cir. 1994).
11th Circuit says extortion victim who defrauded defendant provoked offense. (290) Defendant was convicted of interstate travel with intent to carry on the unlawful activity of extortion. During a recorded phone call, defendant told the victim that he would “make sure you never walk again” if the victim did not repay money he owed defendant. The 11th Circuit agreed that the victim’s wrongful conduct contributed significantly to provoking defendant’s actions under section 5K2.10. The victim had defrauded defendant out of tens of thousands of dollars. Defendant only threatened physical harm after he and his family came under financial distress. U.S. v. Dailey, 24 F.3d 1323 (11th Cir. 1994).
11th Circuit holds that Hobbs Act conspiracy is not subject to reduction under § 2X1.1. (290) Defendants were convicted of conspiracy to rob a bank in violation of the Hobbs Act. They argued they were entitled to a three-level reduction under section 2X1.1 for conspiracies that are not covered by a specific offense guideline. The 11th Circuit concluded that defendants were not entitled to the reduction. Section 2E1.5 covers Hobbs Act extortion or robbery, but does not specifically mention conspiracy. However, a conspiracy to violate the Hobbs Act is a violation of the Hobbs Act itself. Where the statute defining the offense of conviction prohibits conspiracies, and that section is expressly covered by a particular guideline, the offense level provided by that guideline is controlling and section 2X1.1 does not apply. U.S. v. Thomas, 8 F.3d 1552 (11th Cir. 1993).
Florida district court applies murder offense level to murder-for-hire sentence. (290) Defendants were convicted of violating 18 U.S.C. § 1958, the federal murder-for-hire statute. The application notes to § 2E1.4 of the guidelines provide that if the underlying conduct violates state law, the offense level corresponding to the most analogous federal offense is to be used. The Florida district court held that this note applies if the underlying conduct violates state law, but it does not prevent the court from looking to federal law to define the underlying unlawful conduct where the conduct also violates federal law. The court held that either under the federal murder statute, 18 U.S.C. § 1111, or the state murder statute, defendant’s base offense level was 43. The court also rejected defendant’s double jeopardy and collateral estoppel arguments. U.S. v. Sanchez, 741 F.Supp. 215 (S.D. Florida 1990), affirmed by U.S. v. Sanchez, 992 F.2d 1143 (11th Cir. 1993).
Commission adopts guidelines for unlawful demonstrations at cemeteries and internet gambling. (290) A new offense at 38 U.S.C. § 2413 prohibits certain demonstrations at cemeteries controlled by the National Cemetery Administration. The Commission referenced convictions under 38 U.S.C. § 2413 to guideline § 2B2.3 (Trespass) and expanded the scope of the two-level enhancement at § 2B2.3(b)(1). A new offense at 31 U.S.C. § 5363 prohibits acceptance of any financial instrument for unlawful Internet gambling and provides a statutory maximum term of imprisonment of five years. In response, the Commission referenced convictions under 31 U.S.C. § 5363 to § 2E3.1 (Gambling Offenses). Amendment 703, effective November 1, 2007.