Offense Conduct
(Chapter 2)
United States v. Robinson
2013 WL 1405534 (7th Cir. 2013)
§2G2.2(b)(3)(F) enhancement for distribution of child pornography reversed
The defendant was convicted of possessing child pornography. He admitted in an interview
with police to having downloaded child pornography through two peer-to-peer file-sharing computer programs, FrostWire and LimeWire, but he denied knowing that the files he downloaded could be viewed by other users of the programs. The district court imposed a sentence of 108 months, which included a two-level enhancement under §2G2.2(b)(3)(F), for distribution. On appeal, the defendant argued that the enhancement was erroneous because he had no knowledge that the files could be viewed by others. The government countered that such knowledge was not required. Reviewing under plain error, the Seventh Circuit reversed, holding that the government “clearly failed . . . to prove that the defendant knowingly made files of child pornography available to other users of LimeWire or FrostWire.” The court cited with approval United States v. Durham, 618 F.3d 921 (8 Cir. 2010) (sentencing judge must find that th defendant either knew, or was reckless in failing to discover, that files he was downloading could be viewed by other people). The court disagreed with the contrary finding by the Tenth Circuit in United States v. Ray, 704 F.3d 1307 (10 Cir. 2013), th “which, surprisingly, does not cite or mention Durham.” The judgment was vacated and the case remanded. “At the resentencing hearing the prosecutor will have an opportunity to present evidence as to what the defendant knew or probably knew.”
United States v. Morrison
2013 WL 1348657 (5 Cir. 2013) th
Loss amount correctly calculated; Mass-marketing enhancement applied
The defendant and his co-defendant devised and carried out a scheme to defraud homeowners (“Sellers”), home buyers (“Buyers”) and mortgage lenders (“Lenders”). They contacted Sellers whose homes were slated for foreclosure and offered to purchase the property. They convinced the Sellers not to notify the lenders, thus avoiding the “due on sale” clause of the mortgage. The defendants then advertised the properties in the local newspapers and offered to sell them to Buyers using owner financing and representing that they would continue making payments on the underlying mortgages. The Buyers would make large down payments and agree to make monthly payments to the defendants. For the most part the defendants did not make payments on the underlying mortgages, but instead used the funds received their personal use. They also assumed the identities of the Sellers and attempted to negotiate loan modifications with the Lenders. During the course of the scheme, the Lenders were unaware that the properties had been “sold” or that the defendants were involved with the properties. In addition, the Buyers were unaware that their payments were not being applied to their “mortgages.” The scheme involved a total of nine properties. The district court calculated the amount of loss to be $769,356 by subtracted the amounts paid to the Lenders ($34,424) from the total of all of the mortgages ($803,789). The court also imposed a two level “mass marketing” enhancement under §2B1.1(b)(2)(A)(ii) based on the newspaper ads placed bythe defendants. On appeal, the defendant claimed that the loss amount was incorrect, arguing that the district court should have deducted the collateral value of each property from each loan’s total value. The Fifth Circuit affirmed the loss amount, holding: “The record more than amply supports the district court’s findings that [the defendant] and his co-defendant intended to cause a total loss of the loan amounts where they had no intent to repay the loans and repayment was in the control of third parties, not the defendants.” Further, “simply offsetting the value of the collateral from the loan amounts would fail to capture the full scope of the fraud here.” The defendant also argued that the district court erred in applying the mass marketing enhancement because the properties were listed in local newspapers on “distinctly separate occasions,” and for each listing, they sought only one purchaser for the property; therefore, the plan was not one “to induce a large number of persons.” The Fifth Circuit found the argument “unavailing.” “[T]he defendants used advertisements in newspapers circulated to thousands of people and potentially more through online viewing. In this way, their advertisements reached ‘a large number of persons.’ While the defendants may have phrased their advertisements to sell one house to one person, they solicited thousands of potential buyers in order to find the one buyer for each property. Consequently, the district court did not err in imposing the massmarketing enhancement.”
United States v. Washington
2013 WL 1776271 (11 Cir. 2013) th
Enhancement for 250 or more victims was not warranted;
On remand, government not allowed to prove there were 250 or more victims
The defendant and his cohorts fraudulently obtained credit card numbers of others by purchasing them (together with related account information) over the Internet. They then encoded those numbers and account information onto gift cards which they sold or used to make retail purchases. Hepled guilty to four offenses related to the fraud. The PSR recommended a six-level enhancement under §2B1.1(b)(2)(C), for more than 250 victims, stating that the offense involved hundreds of individual victims whose financial information was stolen and unlawfully used, as well as approximately 30 credit card companies that incurred losses as a result of the fraud. The defendant objected to the enhancement, requested that at least 250 businesses or individuals be identified by name, and noted that the government had only identified 70 banks and financial institutions as victims. The addendum to the PSR stated that the defendant had been provided with “spreadsheets detailing the victims,” who numbered over 250. In its sentencing memorandum, the government claimed that “thousands of individuals had their credit card numbers stolen.” However, it did not submit any evidence to support this assertion. At sentencing, the district court stated that other co-defendants had been sentenced based on more than 250 victims, overruled the objection, and adopted the PSR. On appeal, the defendant argued that the government never proved that there were over 250 victims. The Eleventh Circuit agreed, holding that the government’s assertions at sentencing were insufficient. “Absent a stipulation or agreement between the parties, an attorney’s factual assertions at a sentencing hearing do not constitute evidence that a district court can rely on.” Although the district court had applied the enhancement to the defendant’s co-conspirators, “on this record those rulings could not serve as a basis for applying the enhancement to [the defendant].” “[E]vidence presented at the trial [or sentencing hearing] of another may not – without more – be used to fashion a defendant’s sentence if the defendant objects. If the government wanted to rely on evidence presented and findings made during the co-conspirators’ sentencing hearings, it had the obligation to order the transcripts of those hearings and make them available to [the defendant].” “Because it failed to present any evidence as to the identities of the individual victims, and when their credit card numbers and related account information were stolen, the government did not meet its burden of establishing that the fraud scheme involved 250 or more victims.” Further, the court denied the government’s request to offer evidence at re-sentencing to support the enhancement because “remand for further findings is inappropriate when the issue was before the district court and the parties had an opportunity to introduce relevant evidence, and here the government failed to present any evidence concerning the number of victims.” “The 6-level enhancement under §2B1.1(b)(2)(C) is set aside, and the case is remanded for resentencing without that enhancement. Thedistrict courtshould impose a 2-level enhancement under §2B1.1(b)(2)(A) because [the defendant] has conceded on appeal that there were 10 or more victims of his conduct.”
Sentence Adjustments
(Chapter 3)
United States v. Conaway
2013 WL 1591102 (7 Cir. 2013)
Six-level official victim enhancement under §3A1.2(b) was proper
The defendant made a series of threatening phone calls to a local imam and numerous federal and state officials. He also posted on Facebook his plans to burn the “holyquaran” (sic). He also made threatening calls to the offices of the Illinois Attorney General, Congressman John Shimkus, the U.S. Department of State, and the White House. Federal agents responded to the threats and a sevenhour standoff ensued at the defendant’s home, where he claimed that he had a bomb “capable of blowing up the entire block.” All told, at least fifteen state and federal agencies werepresent at the scene and well over 100 individual state and federal law enforcement agents. Ultimately the defendant surrendered (in exchange for the promise of a psychiatric evaluation and two cigarettes) and it was learned that the entire thing had been an elaborate hoax. The defendant pled guilty to one count of making false threats with an explosive device and one count of influencinga federal official by threat. The PSR calculated a sentencing range of 46 to 57 months, which included a six-level enhancement under §3A1.2(b) becausethe offense was motivated by the official status of the victim. After considering the sentencing factors in 18 U.S.C. §3553(a), the district court imposed a sentence of 60 months. On appeal, the defendant claimed that the §3A1.2(b) enhancement did not apply because his threats were simply “a general harangue against anybody and everybody.” The Seventh Circuit found no error. “The record amply demonstrates that from the time [the defendant] set his plan in motion – with Facebook posts and phone calls to top-level state and federal officials – he anticipated a response from law enforcement. When that response came, he escalated his behavior with continuing threats and occasional countdowns to a supposed bomb detonation. This demonstrates that [the defendant] was ‘motivated’ by the fact that his victims were government officers and not simply bystanders on his block, whom he could have threatened without an elaborate plan to draw countless state and federal agencies to his home using incendiary threats to kill President Obama and incite violenceagainst Muslims.” The sentence was affirmed.
United States v. Davis
2013 WL 1405540 (7 Cir. 2013) th
Court lacked authority to direct AUSA to file motion for third acceptance point
The defendant repeatedly gave false addresses when purchasing guns, six of which were later
recovered from persons who could not lawfully possess them. He pled guiltyto two counts of lying to gun dealers. The government declined to file a motion under §3E1.1(b) for the third “acceptance” point because the defendant refused to waive his right to appeal. On appeal, the defendant argued that a motion from the government was mandatory whenever a defendant pleads guilty early enough to spare the prosecutor the burden of trial preparation, but he acknowledged that the Seventh Circuit had rejected that contention in United States v. Deberry, 576 F.3d 708 (7 Cir. 2009). Deberry held that th “§3E1.1(b) confers an entitlement on the prosecutor, not on the defendant. Theprosecutor may withhold such a motion for any reason that does not violate the Constitution.” The sentence was affirmed.
Circuit Split
Two courts of appeals have held that a court may direct the prosecutor to file a motion under §3E1.1(b) even if the prosecutor’s reason for withholding that motion does not violate the Constitution. See United States v. Lee, 653 F.3d 170 (2d Cir. 2011) and United States v. Divens, 650
F.3d 343 (4 Cir. 2011). Four courts of appeals have reached the same conclusion as Deberry. See United States v. Collins, 683 F.3d 697 (6 Cir. th 2012); United States v. Johnson, 581 F.3d 994 (9th Cir. 2009); United States v. Beatty, 538 F.3d 8 (1st Cir. 2008); and United States v. Newson, 515 F.3d 374 (5 Cir. 2008).
Publisher’s Note: this circuit split will be resolved in favor of the defendant Davis under the latest proposed guideline amendments. (see discussion of amendments above).
United States v. Tovar-Pina
2013 WL 1788494 (7 Cir. 2013) th
Single offense level, instead of separate offense levels, should have been used
The defendant, a Mexican native who first entered the United States in 1988, was convicted in 1992 of receiving stolen property, stealing an automobile, attempting to pass a fraudulent check, selling cocaine, and committing two forgeries involving bank victims. He was deported, but reentered the country, was convicted of crimes involving stolen payroll checks, and deported in 1999. In June 2005, he returned to the U.S. and was again convicted of stealing and cashing payroll checks. He was deported a third time. In 2010, the defendant was arrested and charged in the Central District of Illinois with bank fraud. He was also charged in the Southern District of Iowa with unlawful reentry after deportation, as well as separate charges in the Western District of Virginia for violations of his supervised release. The charges were consolidated in the Central District of Illinois. Two PSRs were prepared, one for the unlawful re-entry case (sentencing range of 24 to 30 months) and one for the bank fraud case (also sentencing range of 24 to 30 months). The probation officer also prepared a memo for the supervised release violation, with a sentencing range of 24 to 30 months, with a maximum of 24 months. No one noticed that a single offense level should have been calculated. At sentencing, the government argued for consecutive 30-month sentences forthe re-entryoffense and the bank fraud offense, plus an additional 24-month sentence for the supervised release violation. The district court adopted the government’s argument and imposed a total sentence of 84 months. On appeal, the defendant claimed that the district court committed plain error by failingto determine a single combined offense level for the re-entry offense and the bank fraud offense. The government conceded error. The Seventh Circuit agreed, explaining that under §§3D1.4-5, sentencing courts “are to determine a single offense level that encompasses all counts of conviction for a given defendant, including those ‘contained in the same indictment or information,’ or as relevant here, ‘contained in different indictments or information for which sentences are to be imposed at the same time or in a consolidated proceeding.’” The single offense level “should have been 15 with a criminal category IV, leading to a Guidelines range of 30 to 37 months’ imprisonment on each count, with all counts running concurrently.” Because the original sentence amounted to an upward variance of 23 months above the correct sentencing range, and because the judge did not explain this upward variance, the error was not harmless. The sentence was vacated and remanded.
United States v. Zehrung
2013 WL 1668214 (1 Cir. 2013) st
Record inadequate concerning enhancement for abuse of trust
The defendant worked for a doctor and eventually found herself in charge of billing for the practice, with no oversight. The doctor would see the patient, then the doctor or a nurse would take a “super bill” and circle the relevant billing code on the bill that indicated the services provided. The defendant would then enter that code into a software program, generate a bill, then submit the bill to the insurance payers. The defendant ran the billing process and had unsupervised access over the checkbook and accounts payable. Over time, monthly revenues increased by 33%. The defendant offered several reasonable bases for the increase, but the doctor began to suspect something was not right, and determined that the defendant had been “upcoding,” (changing the code to overstate the services provided, leading to higher payments). The defendant had also been submitting bills for services not rendered. She profited from the scheme, as she received bonuses tied to revenues. The defendant ultimatelypled guiltyto violating the federal healthcare-fraud statute, 18 U.S.C. §1347, and received a 37-month sentence, which included an enhancement under §3B1.3 for abusing a position of trust. The defendant appealed, arguing that the enhancement was improper. The First Circuit determined that a supplemental fact finding would be required from the district court. If the defendant held a position of trust, and used that position in a significant way to facilitate or conceal the offense, the enhancement was warranted. The district court applied the enhancement based on its finding that the defendant did billing with no supervision, no direct oversight, no review, and assumed complete financial control in the office, making it easier for her to commit the crime. The court of appeals held that these findings were not enough to support the enhancement as the district court did not identify what discretionary authority the doctor had trusted the defendant with. The court found that it seemed that her position was more like a bank teller, who had access to commit the crime, but had little professional or managerial discretion in performing tasks. However, the PSR indicated that the defendant may have had discretion to change the codes, and did indicate that she had financial control over the office. The basis for the enhancement was not clear, and the court vacated and remanded for further findings regarding the enhancement.
United States v. Quirion
714 F.3d 77 (1 Cir. 2013) st
Defendant’s false statements supported obstruction of justice enhancement
The defendant pled guilty to possession of marijuana with intent to distribute and possession of a firearm by a convicted felon, after a search warrant was executed at the house he shared with his girlfriend and authorities found 4.9 kilograms of marijuana, drug paraphernalia and four firearms. The defendant debriefed with agents on three occasions, and on two occasions told agents that he had inherited three of the firearms from his father. During the plea colloquy, the defendant affirmed that he inherited the guns from his father. However, after he received the PSR, the defendant objected and asserted for the first time that he had received the three guns from a pawn shop transaction that took place in 2009, and not as an inheritance from his father. He admitted that this contradicted the account he had given to agents previously, and explained that he gave incorrect information because he did not want to implicate the person who had pawned the guns, his girlfriend. At sentencing, the district court found that the story the defendant had given to agents was a “flat-out lie,” that significantly impaired the government’s investigation and prosecution of the case, leading to a two-point enhancement for obstruction of justice under §3C1.1. Thedefendant received a sentence of 80 months, and appealed the obstruction enhancement, arguing that the statements were not material to his prosecution, as theywere designed to protect his girlfriend from prosecution, thus were material only to her prosecution. The court of appeals upheld the enhancement finding: (1) the guns were the basis of count 2, such that statements of his possession of those firearms were material to the prosecution of his offense; (2) the timing of his receipt of the guns was material to whether he possessed firearms while serving a term of probation, which would affect his criminal history calculation; and (3) lying about the firearms affected whether he received credit for acceptance of responsibility. The court held that the statements were material, and they significantly impeded the investigation, prosecution and sentencing of the defendant. They led to an amended PSR, a presentence conference with the court, use of government funds for further investigation and an evidentiaryhearing on contested sentencing issues. The sentence was affirmed.
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