Sentencing Partners (June 2013) Part II

Posted by Chris Morales on Fri, Jul 05, 2013 @ 11:42 AM

Offense Conduct
(Chapter 2)

United States v. Philidor
2013 WL 2321689 (11th Cir. 2013) Enhancement for 250 or more victims
applied regardless of whether victims were living or deceased

The defendant and his brother each pled guilty to one count of conspiracy to steal government funds, and one count of theft of government funds.Their scheme involved submitting fraudulent tax returns to the IRS using stolen Social Security numbers, receiving refund checks, and depositing these proceeds in various bank accounts of corporate entities controlled by them. The PSR indicated that there were thousands of victims whose Social Security numbers were fraudulently used, but also noted that the government had only positively identified twenty-six of the taxpayer victims. The PSR recommended, and the district court imposed, a six-level enhancement under §2B1.1(b)(2)(C) because the offense involved 250 victims or more. On appeal, the defendants argued that the government failed to meet its burden to show that the offense involved 250 actual, living victims because the government did not show that 250 of the listed Social Security numbers were authentic and belonged to living people. The  Eleventh Circuit explained that under §2B1.1, “victim” means “any person who sustained any part of the actual loss” attributed to the crime and that in cases involving means of identification, such as a Social Security number, “victim” also included “any individual whose means of identification was used unlawfully or without authority.” Further, a means of identification must be of an “actual (i.e., not fictitious) individual.” Based on the evidence presented at sentencing, the appeals court affirmed the enhancement. The fact that the IRS issued refunds based on social security numbers that corresponded with the defendants’ bank accounts allowed “the district court to make the legitimate inference that the Social Security numbers corresponded to actual persons.” Further, the fact that the IRS paid the refunds “indicates that the Social Security numbers used to procure those refunds are associated with real people. The District Court’s conclusion was not clearly erroneous.” Finally, the definition of “means of identification” is limited to “an actual individual” and “actual” means “not fictitious.” “[T]he plain meaning of the language used by Congress was that not fictitious was the exclusive definition for ‘actual.’ Accordingly, the plain meaning of the phrase ‘actual’ does not distinguish between living and deceased persons.”

United States v. Crockett
2013 WL 2300480 (11th Cir. 2013)
§2K2.1(b)(6)(B) enhancement for possession of firearms affirmed

After being arrested for selling two firearms and three grams of cocaine to an undercover officer, the defendant pled guilty to being a felon in possession of a firearm. At sentencing, the district court applied the §2K2.1(b)(6)(B) four-level enhancement finding that the defendant possessed a firearm “in connection with” another felony offense, that is, his sale of cocaine. The question on appeal was whether the defendant’s sale of firearms and drugs together constituted the possession of a firearm “in connection with” a felony offense the sale of 7 Sentencing Partners 2012 cocaine. The defendant contended that his possession of the firearms was not in connection with the sale of cocaine because he sold both in the same transaction; the firearms were simply part of the consideration the buyer received. The appeals court explained that the phrase “in connection with” is not defined in the guidelines, but the commentary, at Application Note 14(A) to §2K2.1, indicates that the enhancement is warranted if the firearm “facilitated, or had the potential of facilitating,
another felony offense.” In affirming the sentence, the appeals court noted that the district court concluded that the defendant’s possession of the firearms had the potential of facilitating . . .the possession with intent to distribute” cocaine. Further, the firearms were ‘in close proximity to the drugs.” “Here, we cannot say that the district court clearly erred in concluding that [the defendant’s] possession of the firearms was in connection with his sale of cocaine.” “[T]he fact that the firearms were not used to embolden or protect[the defendant] while selling the cocaine does not change our conclusion. We have never held that the application of the §2K2.1(b)(6)(B) enhancement is appropriate only when a defendant uses a firearm to embolden or protect himself. As long as the firearms facilitated, or had the potential of facilitating, another felony offense, application of the enhancement is not improper.” United States v. Flores-Olague 2013 WL 2248961 (7th Cir. 2013) §2D1.1(b)(12) enhancement for maintaining premises for manufacturing/distributing controlled substance affirmed In 2008, law enforcement officers identified the defendant as a potential large-scale distributor of cocaine. Over a six-week period, a confidential informant and an undercover officer purchased a total of 39.1 grams of cocaine at a house which, during the relevant time period, was home to the defendant, his longtime girlfriend, and the couple’s teenage son. After executing a search warrant on the house, the defendant admitted that he had purchased and sold cocaine over a three-year period out of  possession of the firearms was not in connection with the sale of cocaine because he sold both in the same transaction; the firearms were simply part of the consideration the buyer received. The appeals court explained that the phrase “in connection with” is not defined in the guidelines, but the commentary, at Application Note 14(A) to §2K2.1, indicates thatthe enhancement is warranted if the firearm "facilitated, or had the potential of facilitating, another felony offense.” In affirming the sentence, the appeals court noted that the district court concluded that the defendant’s possession of the firearms had the potential of facilitating . . .the possession with intent to distribute” cocaine. Further, the firearms were ‘in close proximity to the drugs.” “Here, we cannot say that the district court clearly erred in concluding that [the defendant’s] possession of the firearms was in connection with his sale of cocaine.” “[T]he fact that the firearms were not used to embolden or protect [the defendant] while selling the cocaine does not change our conclusion. We have never held that the application of the §2K2.1(b)(6)(B) enhancement is appropriate only when a defendant uses a firearm to embolden or protect himself. As long as the firearms facilitated, or had the potential of facilitating, another felony offense, application of the enhancement is not improper.”

United States v. Flores-Olague
2013 WL 2248961 (7th Cir. 2013)
§2D1.1(b)(12) enhancement for maintaining premises for manufacturing/distributing controlled substance affirmed

In 2008, law enforcement officers identified the defendant as a potential large-scale distributor of cocaine. Over a six-week period, a confidential informant and an undercover officer purchased a total of 39.1 grams of cocaine at a house which, during the relevant time period, was home to the defendant, his longtime girlfriend, and the couple’s teenage son. After executing a search warrant on the house, the defendant admitted that he had purchased and sold cocaine over a three-year period out of his residence. The defendant pled guilty to charges of possession with intent to distribute and firearm charges. Based on the conclusion that the defendant had operated his home as a “stash house,” the probation officer included a two-level enhancement under §2D1.1(b)(12). The defendant objected to the enhancement on the grounds that he did not maintain the house for the sole purpose of selling drugs. The district court overruled his objection, accepted the factual findings and calculations in the PSR, and imposed a sentence of 168 months (108 months on the drug count and 60 months consecutive on the firearms count). The sole issue on appeal was: “whether the district court erred in imposing the §2D1.1(b)(12) sentencing enhancement in connection with [the drug count] of the indictment.” The appeals court noted that the §2D1.1(b)(12) enhancement was part of the Fair Sentencing Act of 2010, and applied “to a defendant who knowingly maintains a premises (i.e., a building, room, or enclosure) for the purpose of manufacturing or distributing a controlled substance.” See App. Note 28. Further, “among the factors the court should consider in determining whether the defendant ‘maintained’ the premises are (A) whether the defendant held a possessory interest in (e.g., owned or rented) the premises and (B) the extent to which the defendant controlled access to, or activities at, the premises. Manufacturing or distributing a controlled substance need not be the sole purpose for which the premises was maintained, but must be one of the defendant’s primary or principal uses for the premises, rather than one of the defendant’s incidental or collateral uses for the premises. In making this determination, the court should consider how frequently the premises was used by the defendant for manufacturing or distributing a controlled substance and how frequently the premises was used by the defendant for lawful purposes.” Relying on prior interpretations of 21 U.S.C. §856 (the “crack-house statute”) and United States v. Sanchez, 710 F.3d 724 (7th Cir. 2013), the court affirmed the enhancement. “Considering both the frequency and significance of  the illicit activities conducted on the premises, application of the §2D1.1(b)(12) enhancement to [the defendant’s] sentence is clearly warranted. As noted previously, the undisputed facts set out in the PSR establish that [the defendant’s] drug trafficking was for him an everyday occurrence. In addition, [he] neither contested the district court’s factual findings that he sold and stored drugs at his home nor denied that he did so ‘on a daily basis’ over a three-year period. Likewise, no other locations for drug dealing appear of record, and [he] did not attempt to demonstrate that he imposed any limitations on the times when he stored or sold drugs at the premises. These facts, considered in light of the frequency analyses . . . lead us to conclude that the prohibited activities that were conducted by [the defendant] at his home are sufficient to warrant the sentencing enhancement under §2D1.1(b)(12).”

United States v. Reynolds
2013 WL 1891294 (7th Cir. 2013) No ransom demand made, thus no enhancement under §2A4.1(b)(1)

The defendant and seven confederates held a drug dealer (Russell) captive for more than 12 hours while they robbed his home, transported him across state lines, and demanded that he give them money and drugs. The defendant was caught after Russell escaped, convicted by a jury of kidnapping, and sentenced to life imprisonment. As recommended in the PSR, the sentence included a six-level enhancement under §2A4.1(b)(1) for making a “ransom demand” during the crime. The district court noted that all of the defendant’s cohorts had agreed to the application of §2A4.1(b)(1) when they pled guilty and their guideline ranges had included that adjustment. On appeal, the defendant contended that the “ransom demand” finding was erroneous because no one testified that Russell was told he would be released if he provided more money or drugs. The Seventh Circuit noted that the issue was “difficult because ‘ransom’ is not defined in the guidelines, and the commentary to §2A4.1 gives no insight into what conduct the Sentencing Commission intends §2A4.1(b)(1) to punish” and that the definition in Black’s Law Dictionary was “over-inclusive.” The court concluded that “§2A4.1(b)(1) may be applied only if kidnappers’ demands for ‘money or other consideration’ reach someone other than the captured person. Section 2A4.1(b)(1) is a substantial adjustment, and additional punishment is warranted when demands reach third parties because those who are contacted will experience great stress and may attempt a
rescue, escalating the threat of violence. Moreover, kidnapping someone in order to compel others to act, as a substitute for confronting or attempting to rob those others in person, can be a very effective way to accomplish crime that merits heightened deterrence. But when a kidnapping is conducted without the knowledge of anyone except for the victim, the scope of the crime and risk of harm to others, while undoubtedly extensive, is nonetheless not as great.” The court noted that it had found no appellate court decision where the enhancement “had been applied to a defendant who did not intend for his demands to reach a third party. Thus, practitioners seemingly have not regarded defendants convicted of kidnapping as making ‘ransom’ demands when they do no more than force a victim to escort them to some stash of money or drugs before letting the victim go. We adopt the same interpretation today.” In this case, the demands for money or drugs were directed solely to Russell in exchange for his release, and there was no evidence that anyone else learned of them. Because the demands issued by the defendants did not reach a third party, “we must reverse the district court’s finding that a ‘ransom demand’ had been made.”

Published By Joaquin & Duncan, L.L.C.;
A Law Firm of Federal Sentencing Attorneys 

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Tags: defendant, drugs, plead guilty, victim, victims, crime, firearm