United States v. Lewis ( 2000 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
UNITED STATES OF AMERICA, 
Plaintiff-Appellee,
v.  No. 00-4016
VERNA M. LEWIS,
Defendant-Appellant.

Appeal from the United States District Court
for the Western District of Virginia, at Roanoke.
Samuel G. Wilson, Chief District Judge.
(CR-98-57-R)
Argued: September 29, 2000
Decided: December 19, 2000
Before WILKINS and MOTZ, Circuit Judges, and
HAMILTON, Senior Circuit Judge.
Affirmed in part and vacated and remanded in part by published opin-
ion. Judge Wilkins wrote the opinion, in which Judge Motz and
Senior Judge Hamilton joined.
COUNSEL
ARGUED: Melissa Windham Friedman, Roanoke, Virginia, for
Appellant. Gregory Victor Davis, Tax Division, UNITED STATES
DEPARTMENT OF JUSTICE, Washington, D.C., for Appellee. ON
BRIEF: Anthony F. Anderson, Roanoke, Virginia, for Appellant.
Paula M. Junghans, Acting Assistant Attorney General, Robert E.
2 UNITED STATES v. LEWIS
Lindsay, Alan Hechtkopf, Robert P. Crouch, Jr., United States Attor-
ney, Tax Division, UNITED STATES DEPARTMENT OF JUS-
TICE, Washington, D.C., for Appellee.
OPINION
WILKINS, Circuit Judge:
Verna M. Lewis was convicted of numerous charges related to the
filing of false income tax returns and now appeals her convictions and
the resulting sentence. Among other things, Lewis maintains that
application to her of the 1998 version of the U.S. Sentencing Guide-
lines Manual violated the Ex Post Facto Clause and that the district
court improperly ordered her to pay restitution. We affirm Lewis’
convictions and the application of the guidelines, but vacate the resti-
tution order and remand for further proceedings regarding that aspect
of Lewis’ sentence.
I.
Lewis is a physiatrist, a physician who specializes in physical med-
icine and rehabilitation. In 1988, she was recruited to work for the
Lewis-Gale Hospital in Salem, Virginia. As part of Lewis’ employ-
ment package, the Hospital guaranteed Lewis an income of at least
$125,000 for the first year. In 1993, the Internal Revenue Service
(IRS) began an investigation of guaranteed-income agreements at Vir-
ginia hospitals. When Lewis’ tax returns were reviewed as part of this
investigation, IRS personnel discovered improper deductions for pur-
ported business expenses that were actually personal in nature. In an
effort to conceal the improper deductions, Lewis presented falsified
documents to IRS investigators. Lewis also filed a false tax return for
the year 1992 and filed false amended tax returns for the years 1990,
1991, and 1992.
Lewis was charged with, and convicted of, various offenses in con-
nection with these activities. She now appeals, raising numerous chal-
lenges to her convictions and sentence. We have carefully reviewed
Lewis’ arguments related to her convictions and determined them to
UNITED STATES v. LEWIS 3
be without merit. Accordingly, we will not discuss them further.
Some of Lewis’ claims regarding her sentence, however, do warrant
discussion.
II.
Lewis makes three challenges concerning her sentence. First, she
contends that the district court violated the Ex Post Facto Clause
when it applied the 1998 Guidelines Manual in calculating her sen-
tence. Second, Lewis maintains that her due process rights were vio-
lated when the district court determined the tax loss, and hence the
applicable guideline range, by a preponderance of the evidence.
Finally, she argues that the restitution order entered by the district
court is plainly erroneous. We address these contentions seriatim.
A.
Lewis was convicted of four counts of filing false tax returns. The
first offense occurred on April 13, 1993, when Lewis filed a false tax
return for the year 1992. The other three offenses occurred on Decem-
ber 10, 1993, when Lewis filed false amended tax returns for the
years 1990, 1991, and 1992. In the interim, on November 1, 1993, the
sentencing guidelines were amended so as to increase the base offense
level for filing a false tax return. Specifically, Amendment 491
amended the tax table in U.S.S.G. § 2T4.1 so that a tax loss of more
than $40,000 resulted in a base offense level of 13, rather than 11. See
U.S.S.G. App. C, amend. 491 (1997).
The district court is to apply the Guidelines Manual in effect at the
time of sentencing unless doing so would violate the Ex Post Facto
Clause. See U.S.S.G. § 1B1.11(a), (b)(1), p.s.; see also id. § 1B1.11,
p.s., comment. (backg’d.) (noting that "courts to date generally have
held that the ex post facto clause does apply to sentencing guideline
amendments that subject the defendant to increased punishment").
The guidelines specifically instruct, however, that "[i]f the defendant
is convicted of two offenses, the first committed before, and the sec-
ond after, a revised edition of the Guidelines Manual became effec-
tive, the revised edition of the Guidelines Manual is to be applied to
both offenses." Id. § 1B1.11(b)(3), p.s. Pursuant to § 1B1.11, the dis-
trict court applied the 1998 Guidelines Manual in determining Lewis’
4 UNITED STATES v. LEWIS
1
sentence. Lewis maintains that because application of the 1998
Guidelines Manual resulted in increased punishment for the first inci-
dent of tax evasion, her sentence violates the Ex Post Facto Clause.
The question of whether the Ex Post Facto Clause is violated when
a revised edition of the guidelines is applied to offenses that predate
and postdate the revision is one that has divided the circuit courts of
appeal. Compare United States v. Vivit, 214 F.3d 908, 917-19 (7th
Cir.) (holding that application of revised Guidelines Manual to
offenses that occurred both before and after revision, but which were
grouped for sentencing purposes, did not violate Ex Post Facto
Clause), cert. denied, 121 S. Ct. 388 (2000), United States v. Kimler,
167 F.3d 889, 893-95 (5th Cir. 1999) (same), United States v. Bailey,
123 F.3d 1381, 1406-07 (11th Cir. 1997) (same), United States v.
Cooper, 35 F.3d 1248, 1250-52 (8th Cir. 1994) (same), cert. granted,
judgment vacated, 514 U.S. 1094 (1995), opinion reinstated, 63 F.3d
761, 763 (8th Cir. 1995) (per curiam), and United States v. Regan,
989 F.2d 44, 48 (1st Cir. 1993) (holding that application of revised
guidelines to offenses that occurred both before and after revision did
not violate Ex Post Facto Clause), with United States v. Ortland, 109
F.3d 539, 545-47 (9th Cir. 1997) (holding that application of revised
Guidelines Manual to offenses that occurred both before and after
revision violated Ex Post Facto Clause), and United States v. Bertoli,
40 F.3d 1384, 1402-04 (3d Cir. 1994) (same).
The constitutional provision on which Lewis relies forbids the
enactment of any "ex post facto Law." U.S. Const. art. I, § 9, cl. 3.
The Ex Post Facto Clause prohibits, inter alia, the enactment of "any
law which imposes a punishment for an act which was not punishable
at the time it was committed; or imposes additional punishment to
that then prescribed." Weaver v. Graham, 450 U.S. 24, 28 (1981)
(internal quotation marks omitted). Accordingly, a law violates the Ex
Post Facto Clause when it is retrospective— i.e., when it applies to
events predating its enactment—and it disadvantages those to whom
it applies. See Lynce v. Mathis, 519 U.S. 433, 441 (1997). The central
concern of the ex post facto prohibition is "the lack of fair notice and
governmental restraint when the legislature increases punishment
beyond what was prescribed when the crime was consummated." Mil-
1
The relevant guidelines have not been amended since 1993.
UNITED STATES v. LEWIS 5
ler v. Florida, 482 U.S. 423, 430 (1987) (internal quotation marks
omitted). The Clause seeks to ensure "that legislative Acts give fair
warning of their effect and permit individuals to rely on their meaning
until explicitly changed," and guards against "arbitrary and potentially
vindictive legislation." Weaver, 450 U.S. at 28-29.
We conclude that the guidelines provision of which Lewis com-
plains, U.S.S.G. § 1B1.11(b)(3), does not violate the Ex Post Facto
Clause. Section 1B1.11(b)(3) was added to the guidelines on Novem-
ber 1, 1993. Lewis therefore had ample warning, when she committed
the later acts of tax evasion, that those acts would cause her sentence
for the earlier crime to be determined in accordance with the Guide-
lines Manual applicable to the later offenses, and thus that the inter-
vening amendment to the tax table would apply. Accordingly, it was
not § 1B1.11(b)(3) that disadvantaged Lewis, but rather her decision
to commit further acts of tax evasion after the effective date of the
1993 guidelines. See Cooper, 35 F.3d at 1250.
B.
This court has consistently held that, while facts necessary for con-
viction must be proved beyond a reasonable doubt in order to satisfy
the requirements of due process, facts relevant to a sentencing deter-
mination need only be proved by a preponderance of the evidence.
See, e.g., United States v. Urrego-Linares, 879 F.2d 1234, 1237-38
(4th Cir. 1989). In her reply brief, however, Lewis argues that her
sentence was imposed in violation of the Due Process Clause because
the tax loss on which her guideline range was based was not charged
in the indictment and found by the jury beyond a reasonable doubt.2
In making this argument, Lewis relies on the recent decision of the
Supreme Court in Apprendi v. New Jersey, 120 S. Ct. 2348, 2362-63
(2000), in which the Court held that "any fact that increases the pen-
2
Lewis also argues that the district court failed to make adequate fac-
tual findings to support its calculation of the tax loss for sentencing pur-
poses. We conclude that the district court made a reasonable estimate of
the loss based upon the available facts. See U.S.S.G. § 2T1.1, comment.
(n.1).
6 UNITED STATES v. LEWIS
alty for a crime beyond the prescribed statutory maximum must be
submitted to a jury, and proved beyond a reasonable doubt."3
Because Lewis did not raise this argument in the district court, our
review is for plain error only.4 See Fed. R. Crim. P. 52(b); United
States v. Olano, 507 U.S. 725, 731-32 (1993); see also United States
v. Meshack, 225 F.3d 556, 575 (5th Cir. 2000) (noting that Apprendi
claims would be reviewed for plain error when no objection was
raised before the district court); cf. United States v. David, 83 F.3d
638, 645 (4th Cir. 1996) (explaining that plain error review is appro-
priate when "an objection at trial would have been indefensible
because of existing law, but a supervening decision prior to appeal
reverses that well-settled law"). In order to establish our authority to
notice an error not preserved by a timely objection, Lewis must show
that an error occurred, that the error was plain, and that the error
affected her substantial rights. See Olano, 507 U.S. at 732; United
States v. Cedelle, 89 F.3d 181, 184 (4th Cir. 1996). Even if Lewis can
satisfy these requirements, correction of the error remains within our
3
Apprendi was decided after Lewis filed her opening brief, and she
raised her due process claim in her reply brief, the next available oppor-
tunity. This court has held that "an issue first argued in a reply brief is
not properly before a court of appeals." Cavallo v. Star Enter., 100 F.3d
1150, 1152 n.2 (4th Cir. 1996). There is some authority, however, for the
proposition that special circumstances may justify deviation from this
rule. See, e.g., United States v. Valdez, 195 F.3d 544, 546 n.3 (9th Cir.
1999) (observing that court may exercise discretion to consider argument
raised in reply brief when issue is purely legal or review would prevent
manifest injustice); United States v. Darden, 70 F.3d 1507, 1549 n.18
(8th Cir. 1995) (stating that court would not consider issues raised in
reply brief "[a]bsent some reason" why the claims were not raised ear-
lier); cf. United States v. All Assets & Equip. of West Side Bldg. Corp.,
58 F.3d 1181, 1191 (7th Cir. 1995) (holding that issue was not waived
when raised at first opportunity); cf. also Griffith v. Kentucky, 479 U.S.
314, 328 (1987) (holding that new rules of criminal procedure are retro-
actively available to cases pending on direct review). Because the claim
is without merit in any event, we need not decide whether it was properly
raised.
4
We note that in addressing a similar claim, United States v. Angle,
230 F.3d 113 (4th Cir. 2000), conducted harmless-error review, which is
the appropriate standard for issues first raised in the district court.
UNITED STATES v. LEWIS 7
sound discretion, which we "should not exercise . . . unless the error
‘seriously affect[s] the fairness, integrity or public reputation of judi-
cial proceedings.’" Olano, 507 U.S. at 732 (second alteration in origi-
nal) (quoting United States v. Young, 470 U.S. 1, 15 (1985)); see
David, 83 F.3d at 641.
We conclude that there was no error. The decision of the Supreme
Court in Apprendi was, by its terms, limited to facts that increase pun-
ishment beyond the prescribed statutory maximum. Here, because no
fact found by the district court in determining Lewis’ sentence
resulted in a penalty greater than the applicable statutory maximum,
Lewis’ due process rights were not violated. See Meshack, 225 F.3d
at 576-77.
C.
Lewis next challenges the restitution order entered by the district
court. Although the presentence report indicated that restitution was
not an issue, at the sentencing hearing the district court imposed resti-
tution of $105,651.69 as a special condition of supervised release.5
This figure apparently was provided to the court by the Government
during the sentencing hearing. The court did not make any factual
findings as to the proper amount of restitution or as to Lewis’ ability
to pay. See 18 U.S.C.A. § 3556 (West 2000) (providing that a court
must comply with 18 U.S.C.A. § 3664 in ordering restitution as a con-
dition of supervised release); United States v. Castner, 50 F.3d 1267,
1277 (4th Cir. 1995) (explaining that § 3664(a) requires a district
court to make explicit factual findings prior to entering an order of
restitution). Accordingly, we vacate this aspect of Lewis’ sentence
and remand for further proceedings.
5
Pointing to the Judgment and Commitment Order, which sets forth the
restitution amount elsewhere than in the section pertaining to conditions
of supervised release, Lewis argues that the district court improperly
imposed restitution as part of her sentence. Because we vacate the resti-
tution order for other reasons, we need not determine whether this techni-
cal error would require remand in and of itself.
8 UNITED STATES v. LEWIS
III.
In sum, we affirm Lewis’ convictions and the application of the
sentencing guidelines. However, we vacate the order of restitution
and remand for further proceedings consistent with this opinion.
AFFIRMED IN PART, VACATED AND
REMANDED IN PART