Sentencing Partners - April 2014 (Part II)

Posted by Chris Morales on Wed, May 07, 2014 @ 10:59 AM

Sentencing Partners - April 2014

Sentence Adjustments
(Chapter 3)

United States v. Evans
2014 WL 929164 (10 Cir. 2014) 
Government’s refusal to file for one-level acceptance point was not rationally related to any legitimate end

The defendant was a property manager and organizer of real estate investment funds. From May 2003 until August 2005, he solicited investors for three limited partnerships that acquired, renovated, and operated low-income apartment complexes. Investors purchased limited partnership interests and certificates (debt) bearing interest at 12% with an expected maturity of seven years. He raised over $16 million and served as general partner of each limited partnership. After the properties started experiencing cash flow problems, and the defendant was unable to make the payments to investors, he contributed $4.5 million his own funds to the projects. When this did not turn the ventures around, the defendant started using funds from each offering to pay operational expenses of others, changing some of the income and expenses reported by the entities, and making false journal entries in monthly financial statements. The false reports were provided to investors, lending institutions, and others. In April 2007, the defendant was removed as property manager and an appointed receiver took control of the projects. The receiver recommended that one of the remaining properties be abandoned to foreclosure, but believed that two others could be salvaged. By September 2009, the value of the properties dropped significantly, and the receiver allowed the remaining properties to fall into foreclosure. The defendant pled guilty one count of
conspiracy to commit mail and wire fraud. In the defendant’s sentencing memo, he argued that there was no actual loss because there was no causal link between the criminal conduct and the investors’ losses. In response, the government insisted that the defendant should not receive a reduction for acceptance of responsibility, and it did not file a request for a one-level reduction under §3E1.1(b) as it previously represented it would. At sentencing, the district court granted a two-level reduction for acceptance, but upheld the government’s refusal to request a third point. The court sentenced the defendant to 168 months. On appeal, the defendant contended that the district court erred in refusing to award him a one-level reduction for acceptance of responsibility under §3E1.1(b). The Tenth Circuit agreed. The government argued that it declined to file the motion because the defendant had not truly accepted responsibility. However, “the district court necessarily rejected that argument in finding that a two-level reduction under §3E1.1(a) was appropriate.” “Considering the above, we find that the government’s refusal was not rationally related to resource allocation. Nor do we find [the defendant’s] arguments regarding the foreseeability of loss inconsistent with acceptance of responsibility. We therefore conclude that the district court committed clear error in accepting the government’s refusal to request a third one-level reduction under §3E1.1(b), and that [the defendant] is entitled to a three-level reduction for acceptance of responsibility.”

United States v. Reichert
2014 WL 1259610 (6th Cir. 2014)
Use of special skill enhancement warranted

The defendant, a truck driver, was also a moderator on a website that hosted forums dedicated to discussing the modification of video game consoles so that “pirated” games could be used with the consoles. After the defendant modified a Nintendo Wii for an undercover agent, the defendant was charged with violating the Digital Millennium Copyright Act (the “DMCA”). He was convicted by a jury. The PSR assigned him an a two-point “special skills” enhancement under §3B1.3, concluding that his crime was facilitated by his possession of technical computer skills “not . . . possessed by members of the general public.” With this enhancement, the sentencing range was 15 to 21 months. The district varied downward and sentenced him to twelve months and one day. On appeal, the defendant argued that his skills were not “special” within the meaning of §3B1.3, and emphasized that he was a truck driver with only a high school diploma. He also claimed that he learned how to modify game consoles through trial and error, using how-to books and information from the internet; therefore, his ability to modify game consoles was not reasonably comparable to the skills listed in Application Note 4. The Sixth Circuit disagreed, finding that the defendant’s self-taught skills were “particularly sophisticated” and “could not be duplicated by ‘[m]ost persons of average ability’ with ‘a minimum of difficulty.’” While the defendant’s skills in this case were not as sophisticated as those in United States v. Petersen, 98 F.3d 502 (9th Cir. 1996), (defendant’s self-taught computer skills enabled him to hack into secure computer systems of major financial institutions), “the record here demonstrates that [the defendant’s] skill with computer hardware and specialized game console components was substantially more difficult to acquire.” “Accordingly, the district court did not err in applying §3B1.3’s special skills enhancement.”

United States v. Sandoval
2014 WL 1258083 (7th Cir. 2014)
Lie to court was material; obstruction of justice enhancement warranted

The defendant, a Mexican citizen, illegally entered the United States numerous times between
the mid-1990s and 2006. Each time he was caught and removed, but he would enter again. The last time was 2006. On March 30, 2009, the defendant met a man (Quinonez) at a truck stop in Monee, Illinois, where he was to purchase 20 kilograms of cocaine that he believed Quinonez had transported from Texas. During the meeting, the defendant gave Quinonez $500 for fuel expenses and said that he would pay $300,000 for the cocaine on the following day. Unbeknownst to the defendant, Quinonez had been arrested earlier that day and was cooperating with law enforcement. Thus, Quinonez was only carrying sham cocaine and the rendezvous as recorded by law enforcement. The defendant was arrested after he placed two duffle bags containing the sham cocaine in his vehicle and departed. After his vehicle was stopped, the defendant denied knowing what was inside the duffle bags and he gave a false name - Adrian Payan - to the arresting officers. He continued to invoke the Payan alias at his pretrial services interview, initial appearance, and other court proceedings. The district court granted him bond and released him on his own recognizance. The government finally learned his true identity and that he was present illegally in the U.S. His bond was then revoked and he was taken into custody. Shortly before his trial, the defendant pled guilty. A factual basis for his plea, he stated: “I only knew that I was going to pick up drugs but I did not know what type of drugs it was. I also knew that I had to deliver it to someone else but I did not know who that other person was.” The district court concludedthat the defendant’s misrepresentations about his identity at and after his arrest warranted an obstruction of justice enhancement under §3C1.1. With the enhancement, the sentencing range was 188 to 235 months (with a mandatory minimum of 120 months), but the court varied downward and imposed a sentence of 140 months. On appeal, the defendant argued that his use of the alias was not “material” within the meaning of Application Note 4, because his lie did not “tend to influence or affect” his criminal prosecution. See §3C1.1, Application Note 6. The Seventh Circuit disagreed, concluding that the argument was foreclosed by United States v. Bedolla-Zavala, 611 F.3d 392 (7th Cir. 2010), where the court held that “[p]ersonal information is a highly relevant factor in determining whether a defendant should remain in custody or be granted bond, and thus is material not only at sentencing, but a arraignment.” Here, the defendant lied about his identity and concealed his illegal presence within the United States. “Indeed, once the district court learned of [his] true identity and immigration status, the court revoked [his] bond and had him taken into custody. This indicates that [the defendant’s] lie tended to influence or affect” the district court’s decision about detention. Therefore, the defendant failed to establish that the district court erred in imposing the obstruction of justice enhancement.

Criminal History
(Chapter 4)
United States v. Pepper
2014 WL 1063313 (8th Cir. 2014)

State conviction was separate/distinct offense supporting three criminal history points

On June 29, 2009, Arkansas sheriff deputies arrested the defendant after finding drugs and four firearms in his car during a traffic stop. He was charged in Arkansas state court for simultaneous possession of drugs and firearms, in violation of Ark. Code §5-74-106, and was admitted into a Drug Court Program without having pled guilty or been sentenced. He repeatedly failed drug tests while participating in the drug court program. On July 21,
2011, agents from the ATF executed a search warrant at the defendant’s home. The agents discovered 110 firearms, ammunition, a glass jar containing cocaine residue, and a smoking device. The defendant pled guilty in federal court to being an unlawful user of a controlled substance in possession of a firearm. The defendant was terminated from the Drug Court Program, the state court found him guilty of simultaneous possession of drugs and firearms, and sentenced him to 120 months. In the federal court, the defendant pled guilty to possession of a firearm by an unlawful user of a controlled substance. The PSR recommended adding three points to the criminal history score pursuant to §4A1.1(a), based on his 2012 state conviction for simultaneous possession of drugs and firearms. The defendant objected, but the district court accepted the PSR and imposed a 60-month sentence. On appeal, the defendant contended that his state sentence was not “previously imposed” because it was imposed after he pled guilty to the federal offense. The Eighth Circuit rejected this argument, finding: “It is true-but irrelevant-that the state court did not impose its sentence until after [the defendant] had pled guilty to the federal offense. A sentence is previously imposed if it was ‘imposed prior to sentencing on the instant offense.’ The district court sentenced [the defendant] for the federal offense on July 30, 2013, more than ten months after the state court imposed its sentence. Thus, the district court correctly concluded that the state sentence was previously imposed.” The defendant also argued that his state conviction covered conduct that was “part of the instant offense” and thus was not a prior sentence under §4A1.1(a). The court explained that to be part of the instant offense, the conduct must constitute “relevant conduct” under §1B1.3. “Factors we have consistently applied in reviewing this determination include temporal and geographical proximity, common victims, common scheme, charge in the indictment, and whether the prior conviction is used to prove the instant offense.” Based on these factors, the court found that the state offense was not relevant conduct and thus properly counted in the criminal history. “Although the state and federal offenses are similar in nature, several factors convince us that the offenses nevertheless are severable and distinct. [The defendant] committed the state offense in 2009, while he committed the federal offense more than two years later in 2011. The state offense occurred in [his] car, while the federal offense occurred in his home. The state offense involved [his] possession of four firearms, while the federal offense involved his possession of at least forty-one firearms. The convictions resulted from different law enforcement investigations, were prosecuted by different sovereigns, and depended on proof of different facts. Nothing in the record shows any continuity between the two offenses. In addition, the federal indictment did not mention the state offense. Thus, the district court did not clearly err in concluding that the state offense was severable and distinct from the federal offense.”

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