United States v. Eddy ( 2004 )

F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS
JUN 29 2004
TENTH CIRCUIT
PATRICK FISHER
Clerk
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v. No. 03-1035
(D. Colo.)
DAVID RAND EDDY, a/k/a Randy (D.Ct. No. 02-CR-104-N)
Eddy,
Defendant-Appellant.
ORDER AND JUDGMENT *
Before TACHA, Chief Circuit Judge, and PORFILIO and BRORBY, Senior
Circuit Judges.
After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist the determination of
this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is
therefore ordered submitted without oral argument.
*
This order and judgment is not binding precedent except under the doctrines of
law of the case, res judicata and collateral estoppel. The court generally disfavors the
citation of orders and judgments; nevertheless, an order and judgment may be cited under
the terms and conditions of 10th Cir. R. 36.3.
David Rand Eddy appeals his thirty-seven month sentence, imposed after he
pled guilty to one count each of wire fraud, money laundering, and bankruptcy
fraud, in violation of 18 U.S.C. §§ 1343, 1956, and 152(3), respectively.
On appeal, Mr. Eddy argues the district court erred in grouping together his
wire fraud and bankruptcy offenses in determining the base offense level for his
money laundering conviction pursuant to §2S1.1(a)(1) of the United States
Sentencing Guidelines, thereby resulting in a significantly increased sentence.
Exercising jurisdiction under 28 U.S.C. § 1291 and 18 U.S.C. § 3742(a), we
affirm.
Mr. Eddy began selling life insurance policies for Provident American Life
and Health Insurance Company (“Provident”) in 1997 through his closely held
Colorado corporation, A.A.V., Inc. Provident paid A.A.V., Inc. on a commission
basis for policies Mr. Eddy sold. Provident would pay advanced commissions
after Mr. Eddy submitted various documents establishing he sold a new policy.
Beginning in March 1998 and continuing through January 1999, Mr. Eddy made a
series of false and fraudulent representations and statements to Provident in order
to obtain commissions for nonexistent new policies.
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After receiving the fraudulently obtained commissions, Mr. Eddy then
transferred some of the commission money to his daughter’s bank account, which
they used to purchase a home in her name in Pueblo West, Colorado. 1
Subsequently, Mr. Eddy assisted his daughter in obtaining a second mortgage on
the new home. Thereafter, Mr. Eddy transferred the money from the second
mortgage to A.A.V., Inc. as repayment for the fraudulent funds used to purchase
the home. In August 1999, Mr. Eddy filed for Chapter 7 bankruptcy and
concealed from the bankruptcy trustee, despite questioning, that A.A.V., Inc.
contributed money to the purchase of the Pueblo West home.
In February 2002, the government filed a forty-count indictment in the
federal district court of Colorado, charging Mr. Eddy with a number of wire
fraud, money laundering, and bankruptcy fraud counts. Mr. Eddy subsequently
pled guilty to three of those counts.
In determining Mr. Eddy’s offense level for his money laundering count,
the district court first found the base offense level to be 18. The district court
arrived at an offense level of 18 because U.S.S.G. §2S1.1(a)(1) requires the
1
Mr. Eddy arranged virtually all aspects of the purchase and financing of the
home; the daughter acted only as a “strawman,” purchasing the home for Mr. Eddy.
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offense level for money laundering be based on the offense level for the
underlying offense, which in this case included the grouping together of both
offenses of wire and bankruptcy fraud. For either or both of these two types of
fraud, under §2B1.1(a), the base offense level is 6. With respect to special
characteristics, under §2B1.1(b)(1)(F), the district court increased the base
offense level ten levels because the loss exceeded $120,000.00, and increased it
another two levels under §2B1.1(b)(7)(B) because the offense involved a
misrepresentation or other fraudulent action during a bankruptcy proceeding, for a
total offense level of 18 (i.e., 6+10+2=18).
Pursuant to U.S.S.G. §2S1.1(b)(2)(B), the court then found Mr. Eddy’s
offense level of 18 warranted a two-point upward adjustment because he was
charged under § 1956(a)(1)(B)(i). The district court made another two-point
upward adjustment finding the offense involved sophisticated laundering pursuant
to §2S1.1(b)(3). Finally, the district court found Mr. Eddy entitled to a three-
point downward adjustment for acceptance of responsibility. Therefore, the
district court found his offense level for money laundering and total offense level
to be 19. 2 With Mr. Eddy’s criminal history category of I and offense level of 19,
2
The district court used the money laundering offense level as Mr. Eddy’s total
offense level because the offense grouping rules required the district court to apply the
offense level for the most serious of the counts in the group. U.S.S.G. §3D1.3 (2001).
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his sentencing guideline range was thirty to thirty-seven months. The district
court subsequently sentenced Mr. Eddy to thirty-seven months. Mr. Eddy
concedes he never objected to the district court’s offense level calculations.
Mr. Eddy now argues the district court erred in using his unrelated
bankruptcy fraud conduct to enhance the base offense level of his money
laundering count. Mr. Eddy contends the bankruptcy conduct should not be
considered because the money laundering guideline, U.S.S.G. §2S1.1(a)(1)
(2001), directs a sentencing court to consider only the offense from which the
laundered funds were “derived,” and the misappropriated funds were not
“derived” from his misrepresentations at his bankruptcy proceeding.
Because Mr. Eddy did not object in the district court to his sentence
calculation, we review his sentence for plain error. United States v. Ballard, 16
F.3d 1110, 1114 (10th Cir. 1994). Under this standard, “we will only reverse ...
in an exceptional circumstance – one where the error was patently plainly
erroneous and prejudicial and fundamental injustice would otherwise occur.”
Barber v. T.D. Williamson, Inc., 254 F.3d 1223, 1227 (10th Cir. 2001) (quotation
marks and citation omitted).
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Mr. Eddy’s argument is without merit because arguably even if the
bankruptcy offense was not considered as one of the underlying offenses, the
result would be the same. First, in calculating the base offense level for a money
laundering count, U.S.S.G. §2S1.1(a)(1) directs a sentencing court to apply “[t]he
offense level for the underlying offense from which the laundered funds were
derived.” In Mr. Eddy’s case, one of the underlying offenses is wire fraud,
governed by U.S.S.G. §2B1.1, which, when applied alone, would result in the
same offense level as when grouped with the bankruptcy fraud offense. See
U.S.S.G. §2B1.1(a). This is because a criminal who has committed an offense
under §2B1.1 automatically receives a minimum offense level of 6. U.S.S.G.
§2B1.1(a).
Next, in determining Mr. Eddy’s sentence, a sentencing court applies
U.S.S.G. §2B1.1 in its entirety. See U.S.S.G. §1B1.5(a) (2001) (“A cross
reference (an instruction to apply another offense guideline) refers to the entire
offense guideline (i.e., the base offense level, specific offense characteristics,
cross references, and special instructions).” (emphasis added).) Thus, as pointed
out in §1B1.5, the offense level can be raised based on whether special offense
characteristics, cross references, or special instructions are applicable for a
particular crime. Specific offense characteristics are determined by relevant
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conduct, defined as:
all acts and omissions committed ... induced, procured or wilfully
caused by the defendant ... that occurred during the commission of
the offense for conviction ... or in the course of attempting to avoid
detection or responsibility for that offense ... [and] solely with
respect to offenses of a character for which §3D1.2(d) would require
grouping of multiple counts, all acts and omissions [as referenced]
above that were part of the same course of conduct or common
scheme or plan as the offense of conviction.
U.S.S.G. §1B1.3(a)(1)(A) and (a)(2).
In Mr. Eddy’s case, under §2B1.1(b)(1)(F), as a special offense
characteristic, the district court properly added ten levels because Mr. Eddy’s
crime resulted in a loss exceeding $120,000. In the same vein, as a special
offense characteristic, the district court also added an enhancement of two
additional levels pursuant to §2B1.1(b)(7)(B), because Mr. Eddy’s crime involved
“a misrepresentation or other fraudulent action during the course of a bankruptcy
proceeding,” specifically, his concealment of the fraudulently obtained wire
transfer funds from the bankruptcy trustee during his Chapter 7 bankruptcy
proceeding. 3 Although the fraudulently obtained funds were not directly obtained
via this bankruptcy proceeding, Mr. Eddy’s bankruptcy misrepresentation directly
3
Even though, Mr. Eddy’s enhancements for a loss exceeding $120,000 and for
misrepresentation during a bankruptcy proceeding both fall under the special offense
characteristics portion of U.S.S.G. §2B1.1, Mr. Eddy does not contend the monetary loss
enhancement was in error.
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related to his efforts in concealing these funds and, therefore, constituted part of
his wire fraud scheme, regardless of whether the bankruptcy offense is
considered.
Thus, under our plain error review and the circumstances of this case, we
conclude the district court’s calculation of Mr. Eddy’s total offense level was not
patently or plainly erroneous, nor did the requisite prejudicial or fundamental
injustice result therefrom.
The judgment of the district court is AFFIRMED.
Entered by the Court:
WADE BRORBY
United States Circuit Judge
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