United States v. James , 556 F. App'x 711 ( 2014 )

FILED
United States Court of Appeals
UNITED STATES COURT OF APPEALS Tenth Circuit
TENTH CIRCUIT February 27, 2014
Elisabeth A. Shumaker
Clerk of Court
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
v. No. 11-1270
(D.C. No. 1:06-CR-00244-WYD-7)
TORRENCE JAMES, (D. Colo.)
Defendant - Appellant.
ORDER AND JUDGMENT*
Before TYMKOVICH, O’BRIEN, and MATHESON, Circuit Judges.
This case comes to us with a tortured past and an ironic twist. In this, latest,
installment Torrence James appeals from a 108-month prison sentence imposed on
remand from an earlier appeal. It is the very sentence he originally expected, based on
his plea agreement, and the one he requested after pleading guilty to two felonies. Both
*
This order and judgment is an unpublished decision, not binding precedent. 10th
Cir. R. 32.1(A). Citation to unpublished decisions is not prohibited. Fed. R. App. 32.1.
It is appropriate as it relates to law of the case, issue preclusion and claim preclusion.
Unpublished decisions may also be cited for their persuasive value. 10th Cir. R. 32.1(A).
Citation to an order and judgment must be accompanied by an appropriate parenthetical
notation B (unpublished). Id.
guilty pleas arose from a scheme to fraudulently obtain mortgage loans in order to
purchase twenty residential homes in and around Denver, Colorado. His appeal from the
original sentence of 151 months incarceration claimed the sentencing judge erroneously:
(1) found him to be a leader or organizer of the criminal enterprise under United States
Sentencing Guidelines Manual (“USSG” or “Guidelines”) §3B1.1(a); and (2) calculated
the loss sustained by the victim lenders under USSG §2B1.1. In United States v. James,
592 F.3d 1109, 1113 (10th Cir. 2010) (James I), a panel of this Court affirmed with
respect to his role in the offense, but remanded for recalculation of “the actual losses of
the ten original lenders [the district judge] identified as victims of Mr. James’s conduct.”
Id. at 1116.
On remand a different district judge considered new evidence and re-sentenced
James, who now appeals from the lesser sentence. Primarily, he claims procedural error
in applying a two-level enhancement based on 10 or more victims, USSG §2B1.1(b)(2).
But what this appeal really involves is the scope of a clearly limited sentencing remand.
There was no procedural error because the sentencing judge properly followed our
remand instructions. James also claims the government presented insufficient evidence
to establish the total loss sustained by the victims of his crimes exceeded $1 million. The
evidence was sufficient. We affirm.
BACKGROUND
A. Original Proceedings in District Court
The following factual summary is taken from James’s opening brief in his appeal
from the sentence originally imposed:
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On November 2, 2006, a 48-count second superseding indictment
was filed in this case, naming Torrence James and six others as defendants.
Mr. James was charged with 20 counts of wire fraud, in violation of 18
U.S.C. § 1343; three counts of aggravated identity theft, in violation of 18
U.S.C. § 1028A; three counts of money laundering, in violation of 18 U.S.
C. § 1956; three counts of engaging in monetary transactions in property
derived from specified unlawful activity, in violation of 18 U.S.C. §1957;
and one count of conspiracy to commit wire fraud and aggravated identity
theft, in violation of 18 U.S.C. § 371. He was also named in a forfeiture
count pursuant to 18 U.S.C. § 981(a)(1)(C) and 28 U.S.C. § 2461.
The wire-fraud counts charged that the defendants participated in a
scheme to obtain real estate financing by submitting materially false
statements to lenders in connection with purchases of real estate by
nominee or “straw” buyers, with Ronald Fontenot, Mr. James, and others
acting as their mortgage brokers. Through the use of inflated appraisals,
loans were obtained in amounts that exceeded the actual sale prices of the
properties, with the sellers agreeing to have the excess funds disbursed on
behalf of the buyers at closing, purportedly to fund improvements on the
property. These excessive funds, however, were disbursed to one or more
of the defendants for their personal benefit.
Mr. James ultimately entered into a written plea agreement with the
government. He agreed to plead guilty to one count of wire fraud (Count 5)
and to one count of engaging in a monetary transaction in property derived
from specified unlawful activity (Count 40). He also agreed to pay
restitution as determined by the court at sentencing. In return, the
government agreed to dismiss the remaining counts, to support a downward
adjustment for acceptance of responsibility, and to recommend a sentence
within the advisory guideline range.1 The district court conducted a
change-of-plea hearing on January 10, 2007, and received the pleas, finding
they were knowingly and voluntarily made. It deferred its decision as to
whether to accept the plea agreement until the probation department
completed a presentence report (“PSR”).
Although sentencing was initially set for April 6, 2007, the court did
not impose sentence until March 26, 2008. Four sentencing hearings were
held; eight addendums to the PSR were prepared. The issues disputed
included the scope of relevant conduct for which Mr. James should be held
responsible, the calculation of loss resulting from that conduct, Mr. James’s
role in the offense, and his acceptance of responsibility. Ultimately, the
district court accepted the plea agreement, and sentenced Mr. James to 151
months (12.6 years) on count 5 and 120 months on count 40, to run
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concurrently; 3 years of supervised release; joint and severable restitution
of $ 26,636 payable to two identified victims; and $200 in special
assessments. In addition to its oral findings and conclusions, the district
court filed a written statement of reasons for its sentencing determination.
FN1. The government subsequently withdrew it[s]
recommendation for a reduction based upon acceptance of
responsibility. The court, however, made the 3-level downward
adjustment.
(Appellant’s Opening Br., # 08-1115 at 2-4 (record citations omitted)).
The severity of a recommended guidelines sentence is determined (among other
things) by specific offense characteristics found in USSG § 2B1.1. In this case the
relevant characteristics are: (1) the total amount of economic loss resulting from the
illegal conduct (the greater the loss, the more points added for offense characteristics),
USSG § 2B1.1(b)(1), and (2) the number of victims (more than ten but less than 50 adds
two points), USSG § 2B1.1(b)(2)(A).
The total loss is defined as the greater of the actual loss or the intended loss.
USSG § 2B1.1 cmt. 3(A). If the total loss cannot reasonably be determined, the gain
from the crime(s) may be substituted for loss. Id. cmt. 3(B). At his first sentencing—and
as contemplated in the plea agreement and reflected in the Pre-Sentence Report (PSR)—
the government and James agreed that loss could not reasonably be determined so the
alternative method, gain, was the proper measure to establish the USSG § 2B1.1(b)(1)
offense characteristics. The original PSR did not even try to estimate loss; it used gain,
which it calculated to be $2,298,193. It was calculated by subtracting the actual price
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paid for the properties from the amount financed and disbursed to James and his cronies.
The government agreed with that amount. So did James.1
The district judge was of a different mind; he required the probation department to
estimate loss. That turned out to be a daunting task. As the loss figures became
available, the PSR was amended eight times over the course of a year to report for each
of the twenty loans: (1) the name of the original lender; (2) the total amount of the
original loan; and (3) the foreclosure sales price. James I, 592 F.3d at 1111. The
addenda to the PSR calculated the actual loss by subtracting, for each property, the
foreclosure sale price from the original loan amount. Id. After adding all twenty figures,
the final addendum to the PSR arrived at an actual loss amount of $3,731,839. Id. at
1111-12. That amount added 18 points to the offense level, USSG § 2B1.1(b)(1) (loss
between $2.5 and $7 million adds 18 points) rather than 16, as was done using gain
figures in original PSR (loss—or gain substituted for loss—between $1 and $2.5 million
adds 16 points). That change in offense characteristics moved the needle on the
recommend guidelines sentence from 108–135 months to 135–168 months. See id. at
1113.
1
“It is fair to assume . . . that by the time of final sentencing, the government’s
gain calculation was accepted by the defense.” (Appellant’s Reply Br., # 08-1115 at 4
n.4). “On appeal, Mr. James contends that actual loss in this case cannot reasonably be
determined, and that the district court should have considered his gain instead. Using the
$2,298,193 of gain reported in the plea agreement and the original PSR would have
increased his offense level by only 16 [instead of 18].” James I, 592 F.3d at 1115
(footnote omitted).
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But there was a complicating matter. Many of the 20 loans, along with the
pledged security for them—the property mortgages—had been sold to other financial
entities and those entities, not the original lenders, had foreclosed on the mortgages. In
his objections to the PSR, James argued:
[I]t was fairer to use gain, as had been previously agreed. The probation
department’s methodology was flawed because: (1) it did not reflect
payments made on the loans by the initial purchasers, such as Mr. James;
(2) although the original lenders sold most of the loans to other lenders, the
amounts they received upon such a sale were not taken into account
although the amounts clearly reduced their losses; and (3) the bulk of the
original lenders failed to provide information as to what, if any their losses
were.
(Appellant’s Opening Br., # 08-1115 at 8-9.)
With respect to the complication, the judge pointed out two things: First,
the guidelines do not require absolute precision in calculating loss, merely a
reasonable estimate; second, for the vagaries of loss calculations to make a
difference in the offense levels it would have to amount to over $1.2 million
($3,731,839 - $2,500,000 = $1,231,839) and the difference was unlikely to even
approach that amount. Being satisfied that the PSR reasonably calculated the total
losses, the judge turned to a related, but different task—figuring the restitution due
to each victim, as required by USSG § 5E1.1. For the most part, he determined
the difficulty in doing so would unduly burden the sentencing process, already
long delayed, and that burden outweighed the need to provide restitution to the
victims. However, two restitution claims were adequately documented; together
they amounted to $26,630, which was assessed against James. As a result, and in
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spite of his participation a scam costing mortgagors over a million dollars, James
was ordered to pay only a pittance in restitution.
B. Resolution of First Appeal
James appealed from the sentence originally imposed. Relevant here, only the
total amount of loss was at issue, as the summary of his argument clearly shows:
The district court committed significant procedural error when
calculating Mr. James’ advisory guideline range. First, it did so by refusing
to use gain for purposes of determining the specific offense characteristic
increase to the base offense level for fraud and deceit under USSG
§ 2B1.1(b), despite the parties’ agreement, the probation department’s
recommendation, and the readily determinable amount of gain.2
(Appellant’s Opening Br., # 08-1115 at 4.)
True to his argument summary, James made two points with respect to the amount
of loss: (1) the judge should have used gain [$2,298,193] because the loss figures were
not reasonably accurate, and (2) the judge’s analysis of actual loss for sentencing
purposes was inconsistent with his analysis of loss for specific victim restitution
purposes, and victim restitution is, like the guidelines loss computation, based on actual
loss. Significantly, neither James’s opening brief nor his reply brief in the original appeal
2
James raised another issue in his first appeal: the court erred “by enhancing Mr.
James’ offense level by four for his role in the offense under USSG § 3B1.1 [organizer or
leader enhancement] based upon findings that were not supported by the record.”
(Appellant’s Opening Br., # 08-1115 at 4.) We affirmed the four-level enhancement; it is
not involved in this appeal.
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made any mention of the two-level increase imposed for more than ten victims as dictated
by USSG § 2B1.1(b)(2)(A). Quite clearly, it was never an issue in the appeal.3
In James I, the panel identified another related matter that was not an issue in the
first appeal. The sentencing judge found the losses incurred by downstream (successor)
lenders not to “constitute reasonably foreseeable pecuniary harm. . . .” James I, 592 F.3d
at 1115. In footnote 3, we expressed no opinion as to the propriety of that finding,
because it was not challenged on appeal, id., but we decided it precluded the district
judge from considering downstream losses in computing total loss for purposes of
U.S.S.G.§ 2B1.1(b)(1). Id. at 1116.4
The panel reversed the district judge’s use of loss figures on exquisitely narrow
grounds:
It is enough to say that this particular record included no evidence to
support an inference that the foreclosure sales prices were appropriate
estimates of what the original lenders received when they sold the loans to
the successor lenders. Thus, those figures could not be used to determine
the original lenders’ actual losses.
Id. The remand was equally narrow and focused:
We therefore remand with instructions for the district court to recalculate
the actual losses of the ten original lenders it identified as victims of Mr.
3
“The parties’ sole disagreement is whether the $3,731,839 figure reasonably
represents the actual loss resulting from Mr. James’s conduct or whether gain should be
used as an alternative measure of loss.” James I, 592 F.3d at 1114 n.2.
4
Despite the district judge’s finding and what the James 1 panel may have said in
passing, the use of downstream foreclosure data may be used in estimating loss. See
United States v. Crowe, 735 F.3d 1229 (10th Cir. 2013); see also James I, 592 F3d at
1117 (Lucero. J, concurring in the result).
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James's conduct. . . . Because the court previously found, however, that the
successor lenders’ losses were not a reasonably foreseeable pecuniary
harm—a finding that the government does not challenge in this appeal—the
court shall not include their losses, if any, for purposes of the § 2B1.1(b)(1)
enhancement. If the district court finds that the original lenders have
suffered an actual loss, but that the loss cannot reasonably be determined, it
shall explain this finding . . . . and shall use gain as an alternative measure
of loss. In that case, we express no opinion on the appropriate calculation
of gain.
Id. (emphasis supplied and citations omitted).
C. Sentencing on Remand
On remand the new judge sentenced James to 108 months (the low end of the
advisory guidelines) on each of Counts 5 and 40, to run concurrently—precisely the
guideline sentence range James anticipated when he entered his guilty plea and the one he
urged at the original sentencing. To that was added three years of supervised release;
joint and several restitution of $26,636 payable to two identified victims; and $200 in
special assessments.
To establish actual loss as the James I panel directed, the government went back to
the drawing board with the assistance of IRS Special Agent Tim Chase. Chase testified
to having attempted to contact the original lenders through e-mail, telephone calls, and
correspondence. Due to the nature of James’s scheme, many of the properties involved
two loans. As a result of his investigation, Chase created a chart showing: (1) each of
the 20 properties; (2) the buyer; (3) the original lender; (4) the original loan numbers; and
(5) the actual loss, if any, sustained by the original lender.5 Chase identified the actual
5
Any loss to the downstream purchasers was excluded from the calculation.
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loss as undetermined if he could not find sufficient information to show whether there
was a loss, and listed $0 if his investigation revealed there was no loss. Of the ten lenders
identified in the first appeal, the chart showed one suffered no loss, and the loss to two
lenders could not be determined. Of the remaining seven lenders, the actual loss shown
in the loss column was followed by an exhibit number which included an affidavit from a
representative of the original lender stating the lender’s actual loss amount and back-up
documentation. By the time of the sentencing hearing on remand, the government
maintained seven of the original lenders accrued an actual loss of $1,400,567.28. (R.
Vol. I at 632.)
James objected to the government’s calculations on all but one property.6 He
argued it had failed to prove the original lenders were the same entities that owned the
loans at the time of foreclosure, or that the lender may have made a gain during the
course of transactions prior to foreclosure. The district judge agreed with James as to two
of the lenders and determined an actual loss of $1,192,567.28 to the remaining five
lenders resulting from the offense. He imposed a 16-level enhancement under USSG
§ 2B1.1(b)(1)(I) (loss between $1 and $2.5 million) and a two-level enhancement under §
2B1.1(b)(2) for an offense involving ten or more victims. Even though the Government
6
Long Beach Mortgage was purchased by Washington Mutual, which
subsequently failed. FDIC was appointed receiver. Dennis Rogers of the FDIC provided
an affidavit which stated Long Beach had never sold the property to any other entity prior
to the purchase of the company and the loss was $95,664.01. James does not contest this
loss on appeal.
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had proven losses for only five lenders, the judge concluded the limited scope of this
Court’s remand prevented him from reconsidering the ten-victim enhancement
established at James’s original sentencing.
DISCUSSION
“In reviewing a sentence on appeal, we first determine whether the sentence is
procedurally reasonable, reviewing the district court’s legal conclusions de novo and its
factual findings for clear error.” United States v. West, 646 F.3d 745, 747 (10th Cir.
2011).
A. Two-Level Enhancement Based on Number of Victims
In James’s estimation, a two-level enhancement for ten or more victims was
improper because at resentencing the government was only able to prove losses incurred
by fewer than the ten lenders identified in the first appeal. The government concedes this
would be error if this were James’s original sentencing, but contends the district court
correctly refused to consider the number of victims because doing so would be outside
the scope of our remand. We review this “purely legal issue” de novo. Id.
The government relies on the Fifth Circuit’s holding in United States v. Griffith,
522 F.3d 607 (5th Cir. 2008). There, citing the Fifth Circuit’s waiver approach
announced in United States v. Lee, the court said: “All other issues not arising out of this
court’s [remand] ruling and not raised in the appeals court, which could have been
brought in the original appeal, are not proper for reconsideration by the district court
below.” 358 F.3d 315, 323 (5th Cir. 2004). “It follows that an objection to a sentence
must be appealed for the district court, on remand, to have authority to revisit it.”
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Griffith, 522 F.3d at 610 (citations omitted). According to the government, because
James did not challenge the two-level enhancement at the original sentencing or in his
first appeal, the issue could not be considered on remand.
Our standard is less restrictive than the Fifth Circuit’s. Our precedent allows the
district court the discretion to expand the scope of resentencing “absent an express
limitation.” West, 646 F.3d at 749.
[T]he scope of the mandate on remand in the Tenth Circuit is carved out by
exclusion: unless the district court’s discretion is specifically cabined, it
may exercise discretion on what may be heard. Therefore we do not make
inquiry into whether the issue presented is antecedent to or arises out of the
correction on appeal. Instead the district court is to look to the mandate for
any limitations on the scope of the remand and, in the absence of such
limitations, exercise discretion in determining the appropriate scope.
Id. In other words, we have not adopted a strict waiver rule.
But our more elastic approach does not necessarily open the door to plenary
resentencing. Here, the district judge was correct to heed the panel’s articulated reason
for the remand. “Under the law of the case doctrine, findings made at one point during
litigation become law of the case for subsequent stages of that same litigation.” United
States v. Webb, 98 F.3d 585, 587 (10th Cir. 1996). Under the mandate rule, the district
court should conform to the appellate court’s mandate, see id., which, in this case,
directed the district court only to make findings under a particular sentencing guideline
and resentence James accordingly. “[B]ut the mandate rule is a discretion-guiding rule
subject to exception in the interests of justice” that may expand the “mandate under
exceptional circumstances, including (1) a dramatic change in controlling legal authority;
(2) significant new evidence that was not earlier obtainable through due diligence but has
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since come to light; or (3) if blatant error from the prior sentencing decision would result
in serious injustice if uncorrected.” Id. (internal citations, quotations and alterations
omitted).
If James were to be relieved of the consequences attending the law of the case,
forfeiture doctrines, and our remand instructions, the government should be as well. The
government’s forfeited right to challenge the original sentencing judges’ finding—that
the losses incurred by downstream (successor) lenders do not “constitute reasonably
foreseeable pecuniary harm”—would be open to reconsideration,7 as would the victim
restitution order.8 The use of intended loss as opposed to actual loss might also be on the
table.9
A freewheeling resentencing would involve all of those considerations, most of
which James would not welcome. Rather than a truly plenary resentencing, he invites a
quite limited, “heads I win, tails you lose,” approach. Understandable, but not what the
remand order contemplated. Our specific direction was to recalculate the actual losses
7
“We do not suggest that a district court may never consider successor lenders’
actual loss in calculating the total loss under U.S.S.G. § 2B1.1(b). So long as that harm is
reasonably foreseeable, it is properly considered actual loss under the Guidelines.”
James 1, 592 F.3d at 1115 n.4.
8
“Although we need not reach this issue, we note that the calculation of loss for
sentencing purposes does not necessarily establish loss for the purpose of awarding
restitution under the MVRA.” James I, 592 F.3d at 1116 n.6.
9
“The parties' sole disagreement is whether the $3,731,839 figure reasonably
represents the actual loss resulting from Mr. James's conduct or whether gain should be
used as an alternative measure of loss. Accordingly, we do not address the issue of
intended loss.” James I, 592 F.3d at 1114 n.2.
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under USSG § 2B1.1(b)(1)(I). The two-level enhancement under § 2B1.1(b)(2) was not
included in our mandate, the number of victims was the law of the case which went
unchallenged by James, and James does not argue any of the exceptional circumstances
listed above apply here. The district judge was correct in limiting the scope of
resentencing. There was no procedural error.
B. Calculation of Loss
The district judge determined there were five lenders who incurred an actual loss
totaling $1,192,567.28. James concedes a loss to Long Beach Mortgage of $95,664.01
and a loss to FMF Capital of $208,000. However, he challenges the actual losses
attributed to Countrywide Home Loans, New Century Mortgage, American Home
Mortgage, and First Franklin Financial. He claims the government’s documentation
following the history of these loans fails to demonstrate the lenders were the owners of
the properties through foreclosure or account for potential gains as the loans moved
through the system.
1. Countrywide Home Loans
Countrywide Home Loans was an original lender for four properties secured by
eight loans. The company was purchased by Bank of America in 2008. Chase submitted
the affidavit of Michael Hollenbeck, senior investigator and vice president of Bank of
America. The affidavit stated, “based solely on the principal amount of any loss to
Countrywide/Bank of America,” four of the loans resulted in an actual loss totaling
$386,950.13. (R. Vol. 3 at 20.)
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On cross-examination, Chase testified to no knowledge as to the amount Bank of
America paid Countrywide when it was purchased. Consequently, the defense argued the
government had not established what Bank of America, as a successor lender, paid for the
individual loans at issue. In addition, James produced documents indicating two of the
properties were foreclosed by Bank of New York as trustee for certificate holders of an
asset-backed security pool and one was foreclosed by Deutsche Bank as indenture
trustee. According to James, the government failed to prove what was paid to
Countrywide when these loans were placed in the pools, and therefore, the foreclosure
price was not a reasonable measure of actual loss.
2. New Century Mortgage
The next original lender, New Century Mortgage, went out of business. Chase
contacted Helen King, a former employee of New Century who had liquidated the
company. In her affidavit, she stated New Century suffered a loss on only one of ten
loans. The loss amounted to $84,592.97. James challenged the losses to New Century
because the deeds prior to foreclosure listed “Deutsche Bank National Trust Company, as
the Indenture Trustee, for the New Century Home Equity Loan Trust” as the holder of the
certificate of purchase. (R. Vol. 1 at 580.) He claimed there must have been some
transaction which was unaccounted for in the affidavit.
3. American Home Mortgage
American Home Mortgage Acceptance was the original lender on two loans
relating to one property. American Home Mortgage Acceptance declared bankruptcy in
August 2007. Chase contacted Roger Kistler, the assistant vice president in records
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management at American Home Mortgage Servicing, Inc., the company holding the
original records after the bankruptcy. Kistler’s affidavit stated the two loans had five
payments made toward each loan prior to foreclosure. The combined total loss on the
loans was $237,084.17. James found documents which again indicated Deutsche Bank
was the holder of American Home Mortgage property and again objected because the
government could not prove the transfer did not result in a gain for the original lender.
4. First Franklin Financial
First Franklin Financial originally provided four loans on two properties. The
affidavit of Michael Malenka, an assistant vice president at Bank of America, stated the
Bank held First Franklin’s loan files. Malenka combined the losses for each property and
reported losses of $135,000 for the first property, and a loss of $252,000 for the second.
He also stated First Franklin held the loans at the time of foreclosure. The defense
challenged the First Franklin Financial losses because a status letter from its attorney
stated no payments were made on either property, the properties were “sold back to First
Franklin,” and were currently owned by the bank. (R. Vol. 1 at 599.) Because, in
James’s view, the government presented no evidence regarding the statement “sold
back,” it had not established an actual loss. In addition, the affidavit for these properties
was written by a representative of Bank of America, which acquired Merrill Lynch,
which had previously acquired First Franklin. As a result, James argued the
government’s failure to account for the money received in the sale to successor lenders
was fatal to the government’s calculations.
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None of James’s challenges are persuasive. The district court was presented with
affidavits from the original lenders or their successors. The testimony established Chase
correctly instructed the lender representatives to only include permissible losses in the
calculation. The lenders complied. This is not a case where all of the lenders reported a
loss without regard to Chase’s instruction. The affidavits were based on the lender’s best
estimate of their actual loss. As we stated in James I:
We are aware that today’s banking realities—the bundling of mortgages
into securities, for example—may make it difficult to identify precisely the
proceeds a lender received for a specific mortgage loan. The Guidelines,
however, contemplate such circumstances and thus permit a district court to
estimate loss “based on available information.” U.S.S.G. § 2B1.1 cmt. n.
3(C) (emphasis added).
592 F.3d at 1116. “[W]e may disturb the district court’s loss determination—and
consequent Guidelines enhancement—only if the court’s finding is without factual
support in the record or if, after reviewing all the evidence, we are left with a definite and
firm conviction that a mistake has been made.” United States v. Gordon, 710 F.3d 1124,
1161 (10th Cir.), cert. denied, 134 S. Ct. 617 (2013) (quotation marks omitted). The
district judge carefully considered the information before it, parsed through each offer of
proof, and found many of the affidavits to be reliable and sufficient proof of loss. James
presented no evidence actually repudiating the affidavits.10 “The credibility of a witness
10
At best, it appears James’s challenges demonstrate that, at this stage of the
proceedings, the district court would not be able to reasonably determine the amount of
loss and the appropriate measure would be as James originally urged—the over-$2
million gain he admittedly received from his criminal endeavors. The same sentence
would result.
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whose testimony is relied upon at sentencing is for the sentencing court to analyze.”
United States v. Ivy, 83 F.3d 1266, 1289 (10th Cir. 1996).
After two appeals and two sentencings we come back to what the parties originally
contemplated—a sentence of 108 months in prison. Along the way James fortuitously
benefited from a ridiculously small victim restitution order. The result here may not be
ultimately fair, but any unfairness was visited on others, not James.
AFFIRMED.
Entered by the Court:
Terrence L. O’Brien
United States Circuit Judge
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11-1270, United States v. James
MATHESON, J., dissenting.
I agree we may not disturb the district court’s loss calculations under U.S.S.G.
§ 2B1.1(b). See United States v. Gordon, 710 F.3d 1124, 1161 (10th Cir.), cert. denied,
134 S. Ct. 617 (2013). I therefore join that portion of the majority’s order and judgment.
I would, however, reverse and remand regarding Mr. James’s two-level sentencing
enhancement under U.S.S.G. § 2B1.1(b)(2)(A), which applies to crimes affecting ten or
more victims. Despite determining that only five banks had suffered financial loss as a
result of Mr. James’s fraudulent actions, the district court concluded it lacked discretion
under our mandate in James I to reconsider the two-level enhancement for crimes
involving ten or more victims. See ROA, Vol. III at 148-49 (“It’s not that I don’t find
merit in your argument, but I think I’m hamstrung based on the language of the Tenth
Circuit opinion.”). This was procedural error because the court did have discretion to
address that issue.
Under our mandate rule, “resentencing [on remand] may proceed de novo,” United
States v. West, 646 F.3d 745, 749 (10th Cir. 2011), unless this court has “specifically”
limited the scope of remand, id. at 748 (quoting United States v. Moore, 83 F.3d 1231,
1234 (10th Cir. 1996)). Accordingly, “the scope of the mandate on remand in the Tenth
Circuit is carved out by exclusion: unless the district court’s discretion is specifically
cabined, it may exercise discretion on what may be heard.” Id. at 749.
In James I, we concluded the district court miscalculated the loss caused by Mr.
James’s actions and instructed the district court to “recalculate the actual losses of the ten
original lenders it identified as victims of Mr. James’s conduct.” 592 F.3d at 1116. We
further instructed the court that if it “finds that the original lenders have suffered an
actual loss, but that the loss cannot reasonably be determined, it shall explain this finding,
and shall use gain as an alternative measure of loss.” Id. (citation omitted).
Although the specificity of our mandate in James I precluded plenary
resentencing, it did not expressly prohibit the district court from reconsidering issues
inextricably entwined with or arising out of its new actual loss calculation under
§ 2B1.1(b)(1)—such as whether Mr. James’s conduct had, in fact, claimed ten victims as
required by § 2B1.1(b)(2)(A).
In fact, by instructing the district court to recalculate actual losses, which in turn
determines the number of victims, this court effectively instructed the district court to
reconsider its determination that the ten original lenders were victims of Mr. James’s
conduct. See U.S.S.G. § 2B1.1 cmt. n.1 (defining “[v]ictim,” as “any person [including
individuals, corporations, and companies] who sustained any part of the actual loss
determined under subsection (b)(1)” (emphasis added)); see also United States v. Leach,
417 F.3d 1099, 1107 (10th Cir. 2005) (“Because the loss suffered by these 200 donors
was not part of the actual loss determined by the court under U.S.S.G. § 2B1.1(b)(1)(F),
the district court erred by counting the donors as ‘victims’ for purposes of an
enhancement under U.S.S.G. § 2B1.1(b)(2).”); United States v. Abiodun, 536 F.3d 162,
169 (2d Cir. 2008) (“[T]he District court erred as a matter of law when including these
individuals among the tally of defendants’ victims because the losses attributable to these
victims were not included in the loss calculation.”); United States v. Armstead, 552 F.3d
-2-
769, 780-81 (9th Cir. 2008) (same).
On remand, the district court recalculated actual loss for only five original lenders
and declined to use gain as an alternative measure of loss. Given these calculations, the
district court erred in concluding it lacked discretion under our mandate to reconsider the
two-level enhancement for crimes involving ten or more victims. I would remand for the
district court to reconsider Mr. James’s enhancement under § 2B1.1(b)(2)(A), consistent
with the foregoing.
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