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Published By Joaquin & Duncan, L.L.C.;
A Law Firm of Federal Sentencing Attorneys January 2015
S e n t e n c i n g P a r t n e r s
Sentencing Commission Seeking Comments on Proposed Amendments
The United States Sentencing Commission voted recently to publish proposed guideline amendments, including:
1) revisions to the guideline governing fraud – clarifying the definition of “intended loss,” and where the offense “involved (i) the fraudulent inflation or deflation in the value of a publicly traded security or commodity and (ii) the submission of false information in a public filing with the Securities and Exchange Commission or similar regulator, the enhancement determined above shall be based on the gain that resulted from the offense rather than the loss.”
2) increases the guideline level for drug offenses involving hydrocodone, the deletion of references to “Schedule III Hydrocodone,” and proposes a Marijuana Equivalency of 1 gram of “hydrocodone (actual)” equates to
[4,467]/[6,700] grams of marijuana.”
3)clarifies the provisions for mitigating roles where “average participant” would mean only those persons who actually participated in the criminal activity at issue, so that relative culpability is determined only by reference to his or her co-participants. The proposed amendment also provides a non-exhaustive list of factors for the court to consider in determining whether to apply a mitigating role adjustment and, if so, the amount of the adjustment.
4) adjusts §2B1.1 loss tables for inflation. The current lowest amount of $5,000, would be $7,000; the highest amount would change from $400,000,000 to $536,000,000.
5) amends the commentary to §4A1.2 to provide that, when multiple prior sentences are counted as a single sentence, the court should treat each of the multiple prior sentences as if it received criminal history points for purposes of determining predicate offenses.
6) revises §1B1.3 (Relevant Conduct – Factors that Determine the Guideline Range) “to provide more guidance on the use of ‘jointly undertaken criminal activity’ in determining relevant conduct under the guidelines.” The proposed amendments and issues for comment will be subject to a public comment period running through March 18. The full text of the amendments is available at the Sentencing Commissions website:
http://www.ussc.gov/sites/default/files/pdf/amendmentprocess/readerfriendlyamendments/2015014-RFP-Amendments.pdf
Case Summaries
U.S. Supreme Court
Whitfield v. United States 2015 WL 144680 (2015)
Defendant forced victim to “accompany” him while fleeing from bank robbery
The Petitioner was fleeing police after a botched bank robbery. He entered the home of 79 year-old Parnell and guided her from the hallway to another room, a distance of four to nine feet. There, Parnell suffered a fatal heart attack. Petitioner fled, and was found hiding nearby. He was charged with, among other things, violating §2113(e) which provides: “Whoever, in committing any offense defined in this section, or in avoiding or attempting to avoid apprehension for the commission of such offense … forces any person to accompany him without the consent of such person, shall be imprisoned not less than ten years, or if death results shall be punished by death or life imprisonment.” (Emphasis added.) He was convicted by a jury and his conviction was affirmed on appeal. At the Supreme Court, he argued that §2113(e) required “substantial” movement, and that his movement with Parnell did not qualify. The Court affirmed the conviction, holding: “A bank robber ‘forces [a] person to accompany him,’ for purposes of §2113(e), when he forces that person to go somewhere with him, even if the movement occurs entirely within a single building or over a short distance. Accompaniment requires movement that would normally be described as from one place to another. Here, [Petitioner] forced Parnell to accompany him for at least several feet, from one room to another, and that surely sufficed. The severity of the penalties for a forced-accompaniment conviction – a mandatory minimum of 10 years, and a maximum of life imprisonment – does not militate against this interpretation, for the danger of a forced accompaniment does not vary depending on the distance traversed.”
Johnson v. United States 13-7120
Supreme Court restores case to calendar for reargument on ACCA vagueness issue
In 2012, Petitioner pled guilty to one count of being a felon in possession of a firearm, acknowledging that the ACCA might apply, raising the penalties from no more than ten years to a term of fifteen years to life. The PSR concluded that Petitioner’s criminal history contained three prior convictions which qualified as “violent felonies” – two convictions for simple robbery and a 2007 conviction for possession of a short-barreled shotgun. The district court rejected Petitioner’s challenge to the ACCA application and imposed a sentence of 180 months. The Eighth Circuit affirmed, citing United States v. Vincent, 575 F.3d 820 (8th Cir. 2009), and United States v. Lillard, 685 F.3d 773 (8th Cir. 2012), where the court had already ruled on the issue,and that possession of a sawed-off shotgun qualified as a violent felony under the “residual clause” to the ACCA. The Supreme Court heard oral argument on November 5, 2014. On January 9, 2015, the Court restored the case to the calendar for reargument on the following issue: “Whether the residual clause in the Armed Career Criminal Act of 1984, 18 U.S.C. §924(e)(2)(B)(ii), is unconstitutionally vague.” The parties were directed to file argument during the April 2015 session.
McFadden v. United States, 14-378
Certiorari granted in Controlled Substance Analogue Enforcement Act case
On January 16, 2015, the Court granted certiorari on the following issue: Whether, to convict a defendant of distribution of a controlled substance analogue – a substance with a chemical structure that is “substantially similar” to a schedule I or II drug and has a “substantially similar” effect on the user (or is believed or represented by the defendant to have such a similar effect) – the government must prove that the defendant knew that the substance constituted a controlled substance analogue, as held by the Second, Seventh, and Eighth Circuits, but rejected by the Fourth and Fifth Circuits.
General Information
(Chapter 1)
United States v. Sykes
2014 WL 7355653 (7th Cir. 2014) Defendant accountable for the total loss
From October 2007 to November 2009, the defendant and her co-defendant participated in a scheme to defraud Chicago area banks through a check-kiting scheme. They recruited individuals, known as nominees, to open checking accounts with the victim banks in the names of fictitious businesses, fraudulently inflated the balance of those accounts with worthless checks, and then withdrew funds from the accounts before the banks discovered that the checks were worthless. The scheme employed five recruiters and 47 nominees. They opened approximately 336 accounts at approximately eight different banks and fraudulently inflated accounts by a total of $653,417, of which $506,507 was actually withdrawn. The defendant pled guilty and admitted in her plea agreement that the account balances were inflated by at least “approximately $184,400,” of which $116,106 was withdrawn. The PSR calculated a total offense level at 23 and a criminal history category at III. The PSR concluded that the defendant reasonably could have foreseen, and thus was responsible for, the scheme’s entire intended loss amount of $653,417. On appeal, the defendant argued that she should not have been held responsible for the entire loss amount, but instead could only foresee the $196,400 loss that directly resulted from her participation. The Seventh Circuit explained that the amount of loss depended on relevant conduct and reasonably foreseeable pecuniary harm, under §1B1.3(a)(1)(B), applied through a two-step analysis. “With respect to the loss amount that can be attributed to a defendant, the court must determine (1) whether the acts resulting in the loss were in furtherance of jointly undertaken criminal activity; and (2) whether those acts were reasonably foreseeable to the defendant . . . .” Further, reasonable foreseeability can determined “based on whether [the defendant] demonstrated a substantial degree of commitment to the conspiracy’s objectives, either through his words or his conduct.” Here, the defendant “admitted that she knew what the scheme entailed and knew that she was participating in a larger scheme,” and “knew that at least one other person was recruiting nominees for the scheme as well.” The scheme utilized approximately five recruiters and 47 nominees. The defendant was a recruiter and assisted at least five nominees by going with them to open fraudulent bank accounts. Some of these nominees were individuals who had been recruited by others. Her cousin, also a recruiter, introduced her to the scheme and was her roommate during the scheme. “On these facts, the district court was entitled to conclude that [the defendant] reasonably could foresee the total intended fraud loss caused by her co-defendants.”
Offense Conduct
(Chapter 2)
United States v. Sykes
2014 WL 7355653 (7th Cir. 2014)
Sophisticated means enhancement applied
From October 2007 to November 2009, the defendant and her co-defendant participated in a scheme to defraud Chicago area banks through a check-kiting scheme. The scheme employed five recruiters and forty-seven nominees. They opened approximately 336 accounts at approximately eight different banks and fraudulently inflated accounts by a total of $653,417, of which $506,507 was actually withdrawn. The defendant pled guilty. Her PSR recommended a two-level enhancement under §2B1.1(b)(10)(C), because the offense had involved “sophisticated means.” The district court agreed, focusing in particular on the scheme’s use of fictitious entities and the need to coordinate time-sensitive conduct among numerous coconspirators. On appeal, the defendant argued that the enhancement did not apply because the offense involved no “complex or especially intricate conduct.” The Seventh Circuit disagree, noting that the purpose of the enhancement was to deter “elaborate efforts to avoid detection” including the use of fictitious entities to hide transactions. Further, in cases involving jointly undertaken criminal activity, the enhancement may apply “so long as the use of sophisticated means by [his] other criminal associates was reasonably foreseeable to him.” Here, the defendant knew that the scheme required co-conspirators to create a variety of complex counterfeit documents for a number of fake corporations, coordinate time-sensitive conduct among numerous coconspirators, and required deceiving numerous business bankers. “Together, these facts certainly provide ample support for the district court’s finding that [the defendant’s] offense involved sophisticated means.
United States v. Norwood
2014 WL 7182129 (8th Cir. 2014)
Sophisticated means and means-ofidentification enhancements applied
The defendant, along with several other codefendants, was involved in a scheme where United States mail was stolen from approximately 20 businesses. Shortly thereafter, banks noticed that computer-generated counterfeit checks were being cashed from the very accounts of the businesses that had reported the mail theft. Two of the co defendants recruited homeless individuals and used their government-issued identification cards to generate and cash the counterfeit checks. The defendant acted as “security” during the recruitment process to make sure the codefendants were not threatened by the homeless men. They successfully cashed four checks totaling $12,321.79, and two uncashed checks for an additional $4,163.87 were found in their vehicle. The defendant pled guilty to one count of knowingly and intentionally conspiring to commit bank fraud. The PSR recommended two enhancements: sophisticated means under §2B1.1(b)(10)(C) and “the unauthorized transfer or use of any means of identification unlawfully to produce or obtain any other means of identification” under §2B1.1(b)(11)(C)(i). Other than what was presented in the PSR, the government offered no evidence regarding the enhancements at sentencing, and neither party objected to the facts in the PSR. The district court applied both enhancements and the enhancement applied because he had only limited knowledge and participation in the conspiracy. The Eighth Circuit noted that applying “[t]he sophisticated-means enhancement is proper when the offense conduct, viewed as a whole, was notably more intricate than that of the gardenvariety [offense].” Here, the defendant knowingly assisted in recruiting homeless men, helped obtain their government-issued identification cards, had knowledge that these identification cards were being used by coconspirators to print fraudulent checks, and then gave these checks to the homeless men to cash. “We determine that [the defendant’s] actions and knowledge of the conspiracy, despite their limits, rise to the level of complexity sufficient to justify the application of the sophisticated-means enhancement. The scheme [he] participated in exceeds the ‘garden-variety’ scheme to commit bank fraud. Even the limited part of the scheme involving [the defendant] required recruiting others so as to avoid detection, using government-issued identification cards, and using this identification to create computergenerated checks.” As for the enhancement under §2B1.1(b)(11)(C)(i), the defendant argued that he never produced or obtained another means of identification, but instead simply copied real bank account and routing numbers onto computer-generated checks. Citing United States v. Newsome, 439 F.3d 181 (3d. Cir. 2006), the court held that “duplicating a means of identification onto another medium satisfies the sentencing enhancement where that duplication enables an altered or hybrid means of identification or false identification.” “We read the Guidelines’s definition of ‘produce’ to include duplicating a means of identification such as a bank account number and transferring it onto a new medium, such as a counterfeit check. While the district court reached the same conclusion for different reasons, we need not remand the case, but affirm based on our analysis.”
United States v. Correy
2014 WL 6790759 (1st Cir. 2014)
Failure to make individualized drug-quantity finding violated mandate rule
In 1994, DEA agents stopped a vehicle containing 81 kilograms of cocaine at the San Juan airport. An investigation followed, exposing a vast drug conspiracy that resulted in 60 defendants, including Correy, being charged with conspiracy to distribute 1400 grams of heroin and 9445 kilograms of cocaine. Following a seven-month jury trial, the defendant was convicted, based primarily on the testimony of two leading figures in the conspiracy who pled guilty and received lighter sentences. The defendant was sentenced to 480 months after the court found him responsible for over 150 kilos of cocaine. The defendant’s first appeal was reversed because probation department failed to timely serve him with a revised PSR making specific drug-quantity findings grounded in the record. The remand instructed the district court to review the entire record and make credibility determinations in order to determine drug quantity. At resentencing, the judge found the defendant responsible for at least 908 kilograms of cocaine and re-imposed the 480-month sentence. In 2009, the sentence was again reversed because the PSR relied upon was deficient in that it was “the exact same [report]” as was used at the prior sentencing, and which “simply included allegations copied from the indictment” rather than providing the individualized, record-based assessment that this court demanded. At the third sentencing, the amended PSR found the defendant responsible for over 150 kilograms consistent with the previous sentences. The defendant objected, arguing that his conduct involved 3.5 to 5 kilos of cocaine. A new judge, misinterpreting the remand order and believing that he could not impose a sentence based on a drug amount under 5 kilos, found the defendant responsible for between 5 and 15 kilos and imposed a sentence of 360 months. In the most recent appeal, the defendant argued that the district court failed to follow the First Circuit’s instruction to make individualized, record-based drug-quantity findings on remand. The court reversed the sentence once again, explaining that “absent an individualized finding, the drug quantity attributable to the conspiracy as a whole cannot automatically be shifted to the defendant for the purpose of calculating a Guidelines incorrectly thought that the conspiracy wide amount of at least five kilograms represented the minimum amount attributable to the defendant. “He further concluded that, because a drugquantity finding of anything between five and fifteen kilograms of cocaine would result in the same Guidelines range based on [the defendant’s] previous offenses, it would be a ‘somewhat moot exercise’ to make credibility determinations and to state a more specific and, he implied, likely higher finding.” The judge’s misunderstanding led him to forgo making the individualized drug-quantity finding, based on a review of the entire record and assessment of witness credibility, that was demanded by the instructions on remand. As a result, the judge refused to consider the defendant’s record-based argument that he was responsible for under five kilograms of cocaine. “This failure to comply with our order justifies vacatur and remand, just as it did when we considered this case in 2005 and 2011.”
