United States v. Sihai Cheng ( 2017 )

United States Court of Appeals
For the First Circuit
No. 16-1144
UNITED STATES OF AMERICA,
Appellee,
v.
SIHAI CHENG,
Defendant, Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Patti B. Saris, Chief U.S. District Judge]
Before
Howard, Chief Judge,
Souter, Associate Justice,*
and Stahl, Circuit Judge.
Katherine C. Essington for appellant.
B. Stephanie Siegmann, Assistant U.S. Attorney, with whom
Carmen M. Ortiz, United States Attorney, was on brief, for
appellee.
March 1, 2017
* Hon. David H. Souter, Associate Justice (Ret.) of the
Supreme Court of the United States, sitting by designation.
HOWARD, Chief Judge. Sihai Cheng challenges the
reasonableness of the 108-month incarcerative sentence he received
for his role in an illicit scheme to export pressure transducers
-- sensitive goods with nuclear applications -- from the United
States to Iran through the People's Republic of China. We affirm.
I.
Between 2009 and 2011, Cheng caused at least 1,185 MKS
Instruments, Inc. ("MKS") Model 722A pressure transducers to be
exported from the United States to Iran via China. Cheng placed
numerous orders for the pressure transducers, participated in
fraudulently obtaining U.S. export licenses for them, and was
involved in stripping them of their MKS serial numbers and
repackaging them in order to conceal the fact that they were being
shipped in violation of U.S. export laws and the U.S. embargo
against Iran. Cheng engaged in this course of conduct despite
knowing that the MKS pressure transducers would be used at Iran's
uranium enrichment facilities to advance the country's nuclear
weapons program. Further, at various points, he expressed
animosity towards the United States and invoked the specter of
"WORLD WAR THREE" in an apparent effort to drum up sales.
After being extradited from the United Kingdom to the
United States, Cheng pleaded guilty to six counts of a ten-count
indictment, including: conspiracy to commit export violations in
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violation of 50 U.S.C. § 1705; conspiracy to smuggle goods in
violation of 18 U.S.C. § 371; and four counts of unlawfully
exporting U.S. goods to Iran in violation of 50 U.S.C. § 1705.
The parties and the Probation Office agreed that
U.S.S.G. §2M5.1 was the applicable Guideline and that -- after
applying a three-level reduction for acceptance of responsibility
under §3E1.1 -- the total offense level was 23. When combined
with Cheng's Criminal History Category of I, this yielded an
advisory Guidelines sentencing range of forty-six to fifty-seven
months' imprisonment.
During Cheng's sentencing hearing, however, the district
court upwardly departed six levels based on Application Note 2 to
U.S.S.G. §2M5.1. Application Note 2 provides that an upward
departure may be warranted where the following factors are "present
in an extreme form:" "the degree to which the violation threatened
a security interest of the United States, the volume of commerce
involved, the extent of planning or sophistication, and whether
there were multiple occurrences." U.S.S.G. §2M5.1 cmt. (n.2).
The district court explained that "[a]ll of those factors" were
present to an extreme degree and observed that "[i]t's almost as
if someone were writing [Application Note 2] for this case." The
court therefore determined that the total offense level -- after
the six-level upward departure -- was 29 and imposed a sentence of
108 months, the upper end of the Guidelines sentencing range.
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This appeal timely followed.
II.
On appeal, Cheng's overarching claim is that this 108-
month incarcerative sentence is unreasonable. Specifically, he
argues: that the sentencing court erred in departing from the
Guidelines under Application Note 2; that his sentence was
disproportionate to sentences in similar and related cases; and
that his sentence was greater than necessary to achieve the
sentencing goals of 18 U.S.C. § 3553(a).
Claims of sentencing error trigger a two-step inquiry in
this court: "we first determine whether the sentence imposed is
procedurally reasonable and then determine whether it is
substantively reasonable." United States v. Clogston, 662 F.3d
588, 590 (1st Cir. 2011). Cheng objects only to the substantive
reasonableness of his sentence.1 Therefore, our review is for
1 The government invites us to categorize Cheng's claim that
the sentencing court erred in departing from the Guidelines under
Application Note 2 as an attack on his sentence's procedural
reasonableness. Cf. United States v. Torres-Rivera, 661 Fed.
App'x 727, 730 (1st Cir. 2016) (reviewing for procedural
reasonableness claim that district court erred by relying on the
application note to §3B1.1 in imposing an above-guidelines
sentence). Cheng did not object below, and our review would, as
Cheng concedes, be for plain error if we accepted the government's
invitation. However, because we understand Cheng to be arguing
that Application Note 2 does not apply to him regardless of the
procedures used, we will assume (favorably to Cheng) without
deciding that the claim speaks to the substantive reasonableness
of his sentence. Therefore, we are choosing to evaluate the
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abuse of discretion, taking into account the totality of the
circumstances. United States v. Zavala-Martí, 715 F.3d 44, 50
(1st Cir. 2013). Although Cheng did not object to the substantive
reasonableness of his sentence below, we will assume arguendo that
our review is nevertheless for abuse of discretion. Cf. United
States v. Nuñez, 840 F.3d 1, 7 (1st Cir. 2016) (assuming without
deciding that review of unpreserved claims of substantive
unreasonableness is for abuse of discretion).
Considering Cheng's three arguments in turn, we find
them unavailing.
A.
Cheng contends that the district court erred in upwardly
departing under Application Note 2 because (1) neither planning
nor sophistication were present in extreme form and (2) the
security interests of the United States had already been taken
into account in calculating his base offense level.
The district court properly considered the entire scope
of the illegal scheme, see U.S.S.G. §1B1.3, and could reasonably
conclude from the record that Cheng was involved in an illegal
procurement network that was both carefully planned and highly
sophisticated, as it spanned three countries, involved more than
five people, generated thousands of communications, and included
entirety of the sentence under the more lenient abuse of discretion
standard. This does not change the outcome.
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circuitous shipping routes and other considerable efforts to evade
detection. There was no abuse of discretion, and we need go no
further on this particular point.
Cheng argues, however, that even if planning and
sophistication were present in extreme form, inappropriate double
counting is afoot. Yet, contrary to Cheng's claims, the fact that
the security interests of the United States are considered in
determining the appropriate base offense level under U.S.S.G.
§2M5.1 does not mean that those security interests cannot also be
used in assessing whether an upward departure is justified under
Application Note 2. We have said that "[s]ince double counting is
often perfectly proper, the guidelines themselves are the most
helpful aid in the task of separating permissible double counting
from its impermissible counterpart." United States v. Lilly, 13
F.3d 15, 19 (1st Cir. 1994) (citation omitted). "The Sentencing
Commission has not been bashful about explicitly banning double
counting in a number of instances. We believe the Commission's
ready resort to explicitly stated prohibitions against double
counting signals that courts should go quite slowly in implying
further such prohibitions where none are written." Id. at 19–20
(collecting cases).
The Guidelines do not prohibit double-counting under
U.S.S.G. §2M5.1. To the contrary, the Guidelines explicitly
instruct courts to consider the degree to which an export violation
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threatened national security in determining (1) the base offense
level for export violations, (2) the appropriate sentence within
the Guideline range, and (3) the applicability of a departure.
U.S.S.G. §2M5.1. Simply put, Application Note 2 recognizes that
export violations pose varying degrees of threat to national
security and that those violations posing the most significant
threats may warrant upward departure. This is entirely consistent
with the principle that "a district court may rely on a particular
fact for multiple sentencing purposes." United States v.
Sepúlveda-Hernández, 817 F.3d 30, 35 (1st Cir. 2016).
B.
Next, Cheng argues that his sentence was substantively
unreasonable because it was disproportionate to sentences in
similar and related cases.
Cheng complains that some participants in the instant
scheme to illegally export MKS pressure transducers faced no
consequences: some were not indicted, while others were subjects
of a diplomatic arrangement. Therefore, he asserts, "it was error
for the district court judge to hold Mr. Cheng solely responsible
for the illegal export of over a thousand pressure transducers
where the export would not have been possible without the
assistance" of others. In the circumstances of this case, this
"he did it too!" argument is unpersuasive. Stated bluntly, the
fact that the sentencing court had no ability to sentence certain
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of Cheng's co-conspirators does not make Cheng's own sentence
substantively unreasonable. Cf. United States v. Wallace, 573
F.3d 82, 97 (1st Cir. 2009) ("A 'defendant is not entitled to a
lighter sentence merely because his co-defendants received lighter
sentences.'" (quoting United States v. Marceau, 554 F.3d 24, 33
(1st Cir. 2009)). To hold otherwise would lead to absurd
consequences.
Second, Cheng points to the thirty-four month
incarcerative sentence received by Qiang Hu, who was involved in
this same scheme and sentenced by the same district court judge.
We have observed that "concerns could arise if two identically
situated defendants received different sentences from the same
judge." Id. No such concerns arise here, however, as the judge
"confronted the [sentencing] disparity head-on." Id. Unlike
Cheng, Hu was not involved in exporting any of the MKS pressure
transducers to Iran and was unaware that transducers were being
sent to Iran to assist in Iran's nuclear weapons program. Because
Hu and Cheng were not identically situated, there is no reason to
think that Cheng was entitled to the same sentence as Hu. See id.Finally, Cheng's efforts to establish a national
sentencing disparity falter. See United States v. Ayala-Vazquez,
751 F.3d 1, 32 (1st Cir. 2014) (noting that consideration of
sentencing disparity primarily targets disparities among
defendants nationally). Although Cheng points us to several cases
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in which others received shorter sentences after committing export
violations than he did, those cases are readily distinguishable.
For example, defendants in those cases merely attempted to commit
export violations, see United States v. Vaghari, 500 Fed. App'x
139 (3d Cir. 2012) (attempting to buy a centrifuge), exported far
fewer items, see United States v. Tsai, 954 F.2d 155 (3d Cir. 1992)
(exporting 11 items of military electronics), exported less
sensitive items, see id., or exported items to end-users in
countries other than Iran, see United States v. Zhen Zhou Wu, 711
F.3d 1 (1st Cir. 2013) (exporting to end-users in China).
Disparity analysis is simply not appropriate if a defendant's "case
'was not in the same camp' as those he offer[s]." United States
v. Reyes-Rivera, 812 F.3d 79, 89 (1st Cir. 2016) (quoting United
States v. Garcia-Ortiz, 792 F.3d 184, 192 (1st Cir. 2015)).
Therefore, we will not engage in it.
Because Cheng fails to show that the sentence imposed
resulted in any kind of unwarranted or impermissible disparity, we
decline to find that it was substantively unreasonable in this
respect.
C.
Lastly, Cheng argues that his sentence was substantively
unreasonable because it was greater than necessary to accomplish
the sentencing goals of 18 U.S.C. § 3553(a).
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Both during the sentencing hearing and again in its
thoughtful sentencing memorandum, the district court noted that it
had considered the 18 U.S.C. § 3553(a) factors. Further, the court
made specific, detailed findings with respect to the relevant
§ 3553(a) factors -- including both aggravating and mitigating
factors -- and adequately explained its sentence. See United
States v. Arroyo-Maldonado, 791 F.3d 193, 201 (1st Cir. 2015). As
we have said before, "[a] sentence will stand so long as there is
a 'plausible sentencing rationale and a defensible result.'"
Reyes-Rivera, 812 F.3d at 89. "The district court had plenty of
reason to sentence as it did here." Id.
Cheng contends in particular that the sentence is
greater than necessary to serve a deterrent function -- either for
Cheng himself or for others. As part of its sentencing rationale,
the district court stated that "there is under the 3553(a) factors
a need for deterrence . . . . You're not the first case I've seen
like this, and I think there has to be a deterrent message sent
out there, particularly if you know you're helping a nuclear
weapons program." We have repeatedly recognized that deterrence
is an important factor in the sentencing calculus. E.g., United
States v. Díaz-Arroyo, 797 F.3d 125, 129 (1st Cir. 2015).
Moreover, a district court can -- as it did here -- consider at
sentencing the gravity and prevalence of the crime. See United
States v. Madsen, 809 F.3d 712, 720 (1st Cir. 2016). Cheng's claim
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that he was motivated "solely by financial greed" does little to
help his cause. See id. (affirming sentence as substantively
reasonable in light of the defendant's "goal of personal profit at
the expense of the broader societal good").
At bottom, Cheng disagrees with the district court's
weighing of the various sentencing factors, but we find no abuse
of the court's broad discretion. Cf. Arroyo-Maldonado, 791 F.3d
at 200 (finding no plain error when defendant disagreed with the
sentencing court's weighing of factors). Criminal defendants are
entitled to a weighing of the relevant § 3553(a) factors, "not to
a particular result." United States v. Carrasco-de-Jesús, 589
F.3d 22, 29 (1st Cir. 2009). Under the circumstances, imposition
of a 108-month sentence was not substantively unreasonable. Cf.
Clogston, 662 F.3d at 592 ("There is no one reasonable sentence in
any given case but, rather, a universe of reasonable sentencing
outcomes.").
III.
For the forgoing reasons, we affirm.
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