United States v. Marilyn DeLuca ( 1999 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v. No. 99-4135
MARILYN S. DELUCA,
Defendant-Appellant.
Appeal from the United States District Court
for the Eastern District of Virginia, at Alexandria.
Claude M. Hilton, Chief District Judge.
(CR-98-154)
Argued: October 28, 1999
Decided: December 30, 1999
Before NIEMEYER and WILLIAMS, Circuit Judges,
and HAMILTON, Senior Circuit Judge.
_________________________________________________________________
Affirmed by unpublished per curiam opinion.
_________________________________________________________________
COUNSEL
ARGUED: William Anthony DeStefano, SAUL, EWING, REMICK
& SAUL, Philadelphia, Pennsylvania, for Appellant. Robert Charles
Erickson, Jr., Assistant United States Attorney, Alexandria, Virginia,
for Appellee. ON BRIEF: Maura F. Ratigan, SAUL, EWING, REM-
ICK & SAUL, Philadelphia, Pennsylvania, for Appellant. Helen F.
Fahey, United States Attorney, Daniel L. Bell, II, Assistant United
States Attorney, Robert W. Wiechering, Assistant United States
Attorney, Alexandria, Virginia, for Appellee.
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
_________________________________________________________________
OPINION
PER CURIAM:
On September 22, 1998, Marilyn DeLuca pleaded guilty pursuant
to a plea agreement to one count of mail fraud and aiding and abetting
mail fraud in violation of 18 U.S.C. §§ 2 and 1341. Her plea agree-
ment contained an appellate waiver provision waiving her "right to
appeal any sentence within the maximum provided in the statute(s) of
conviction (or the manner in which that sentence was determined) on
grounds set forth in Title 18, United States Code Section 3742 or on
any ground whatever, in exchange for the concessions made by the
United States" in the plea agreement. (J.A. 139). Marilyn DeLuca's
plea agreement also contained a provision leaving to the govern-
ment's sole discretion the decision of whether to make a motion pur-
suant to United States Sentencing Guidelines Manual§ 5K1.1 (1998)
(USSG § 5K1.1) for a reduction in her sentence based upon her sub-
stantial assistance to the government. Prior to sentencing, based upon
an alleged oral promise the government made her through her coun-
sel, Marilyn DeLuca made a motion for specific performance of the
plea agreement seeking to force the government to make a USSG
§ 5K1.1 motion. The district court denied her motion for specific per-
formance and sentenced Marilyn DeLuca to eighteen months' impris-
onment and three years of supervised release.
On appeal, Marilyn DeLuca challenges the district court's denial of
her motion for specific performance and makes a Fifth Amendment
due process challenge to the district court's finding that the amount
of loss for purposes of determining her offense level under United
States Sentencing Guidelines Manual § 2F1.1 (1998) (USSG
§ 2F1.1), the fraud guideline, is $641,000. The government contends
the appellate waiver provision in her plea agreement precludes Mari-
lyn DeLuca from making either challenge. In response, Marilyn
DeLuca contends the appellate waiver provision is unenforceable on
the ground that she did not knowingly, intelligently, and voluntarily
2
agree to it. Alternatively, she argues that the appellate waiver provi-
sion, by its terms, does not preclude her from challenging the district
court's denial of her motion for specific performance or the district
court's loss finding with respect to USSG § 2F1.1.
For reasons that follow, we hold that Marilyn DeLuca knowingly,
intelligently, and voluntarily agreed to the appellate waiver provision
contained in her plea agreement, and therefore, hold the provision is
enforceable. We, however, hold that the appellate waiver provision
does not preclude Marilyn DeLuca from challenging the district
court's denial of her motion for specific performance. But on the mer-
its of that issue, we affirm the district court. We also hold that the
appellate waiver provision does not preclude Marilyn DeLuca's due
process challenge, but affirm on the merits of that issue as well.
I.
On July 16, 1998, a federal grand jury in the Eastern District of
Virginia returned a forty-five count indictment charging Robert
DeLuca, his wife Marilyn DeLuca, their son Mark DeLuca, and other
employees of American Property Services with various substantive
offenses, including mail fraud, allegedly committed in connection
with the operation of American Property Services. The indictment
also charged the same defendants with conspiracy to commit various
substantive offenses, including mail fraud. Robert and Marilyn
DeLuca (the DeLucas) owned and operated American Property Ser-
vices, which also employed their son Mark.
Shortly after the grand jury returned the indictment, the govern-
ment offered Marilyn DeLuca an opportunity to plead guilty to being
"willfully blind" to the activities alleged in Count Twenty-Five of the
indictment in return for the dismissal of all other counts in which she
was charged and the dismissal of all counts against her son. Count
Twenty-Five charged all of the defendants in the indictment with mail
fraud and aiding and abetting mail fraud in violation of 18 U.S.C.
§§ 2 and 1341.
Marilyn DeLuca entered into a plea agreement with the govern-
ment on September 16, 1998. The plea agreement incorporated by ref-
erence a stipulated statement of facts as the factual basis for Marilyn
3
DeLuca's plea. The stipulated statement of facts outlined a fraudulent
scheme whereby Robert DeLuca caused $641,000 to be diverted from
Principal Mutual Life Insurance Corporation (Principal Mutual) to
him. From June 1986 until September 1990, Principal Mutual made
mortgage loans totaling $56.9 million to businesses owned by the
DeLucas. The loans were secured by commercial property owned and
managed by the DeLucas. As part of the mortgage agreement, the
DeLucas agreed to forfeit their rights to collect rents due on these
commercial properties in favor of Principal Mutual in the event their
businesses defaulted on the loans.
By July 1994, the DeLucas' businesses had defaulted on the loans.
Soon thereafter, Principal Mutual rightfully exercised its option to
collect rent from the commercial properties owned by the DeLucas by
notifying the DeLucas and the tenants of those properties that all rent
due should be paid to Principal Mutual.
Thereafter, Robert DeLuca organized and led a scheme intended to
defraud Principal Mutual [of $641,000 as agreed in the stipulated
statement of facts] by persuading the tenants to pay all rents due Prin-
cipal Mutual directly to him and his wife. Robert DeLuca, his agents,
and employees fraudulently informed the tenants that the DeLucas
would forward the rents they collected to Principal Mutual. After
obtaining the rents from the tenants, Robert DeLuca, his agents, and
employees converted the rents to the DeLucas' own uses. Marilyn
DeLuca admitted that from July 1994 until June 1995,"through her
willful blindness she took part" in this scheme to defraud Principal
Mutual. (J.A. 148). Marilyn DeLuca acknowledged that, pursuant to
this scheme to defraud, "the use of the United States mail in further-
ance of the scheme was reasonably foreseeable by her." (J.A. 150).
On September 22, 1998, the district court conducted a hearing pur-
suant to Federal Rule of Criminal Procedure 11 to accept Marilyn
DeLuca's guilty plea to Count Twenty-Five of the indictment pursu-
ant to the September 16, 1998 plea agreement. After Marilyn DeLuca
pleaded guilty, the government debriefed her about the scheme to
defraud Principal Mutual, but did not believe that she gave truthful
statements. The government also did not believe that Marilyn DeLuca
was forthcoming with respect to every matter discussed during her
debriefing. Because the government did not believe that Marilyn
4
DeLuca had been truthful and forthcoming with respect to every mat-
ter discussed during the debriefing, the government decided in its sole
discretion not to make a motion for a reduction in her sentence pursu-
ant to USSG § 5K1.1 for rendering substantial assistance to the
government.1 On September 30, 1998, Robert DeLuca pleaded guilty
pursuant to a plea agreement to Count One of the indictment, which
charged conspiracy to commit various substantive offenses and to
defraud the United States.
Upon learning the government intended not to make a motion pur-
suant to USSG § 5K1.1 on her behalf, Marilyn DeLuca filed a motion
for specific performance seeking to compel the government to make
such a motion. According to Marilyn DeLuca, the government orally
promised as part of the plea agreement to make a USSG § 5K1.1
motion if she pleaded guilty to Count Twenty-Five, allowed herself
to be debriefed, and her husband pleaded guilty. Marilyn DeLuca
argued that she met her end of this bargain, and therefore, the govern-
ment should be forced to meet its end of the bargain. The government
denied making the oral promise claimed by Marilyn DeLuca regard-
ing making a USSG § 5K1.1 motion and opposed the motion on the
ground that the plea agreement, which contained an integration
clause, left to the government's sole discretion the decision of
whether it would make a motion for a reduction in her sentence pursu-
ant to USSG § 5K1.1. The government also opposed the motion on
the alternative ground that in its good faith view, Marilyn DeLuca
failed to render substantial assistance to the government. Following
the submission of extensive briefs and sworn affidavits regarding the
government's plea negotiations with Marilyn DeLuca, the district
court held a hearing on Marilyn DeLuca's motion for specific perfor-
mance on February 4, 1999. At the conclusion of the hearing, the dis-
trict court denied the motion on the ground that the unambiguous
terms of the plea agreement left to the government's sole discretion
the decision of whether to make a motion pursuant to USSG § 5K1.1,
which discretion the government exercised in good faith.
_________________________________________________________________
1 The terms of the plea agreement left to the government's sole discre-
tion the decision of whether to make a motion for a reduction in Marilyn
DeLuca's sentence pursuant to USSG § 5K1.1.
5
The district court sentenced Marilyn DeLuca the next day. At the
sentencing hearing, the district court determined Marilyn DeLuca's
sentencing range under the Sentencing Guidelines to be eighteen to
twenty-four months based upon a total offense level of fifteen and a
criminal history category of I. For purposes of determining Marilyn
DeLuca's specific offense characteristics under USSG§ 2F1.1(b)(1),
the district court found that the amount of intended loss under the
fraudulent scheme was $641,000. The district court sentenced Mari-
lyn DeLuca to eighteen months of imprisonment and three years of
supervised release. This timely appeal followed.
II.
We begin our analysis with Marilyn DeLuca's contention that she
did not knowingly, intelligently, and voluntarily agree to the appellate
waiver provision in her plea agreement. Her argument is without
merit.
"A defendant may waive her right to appeal, if that waiver is the
result of a knowing and intelligent decision to forgo the right to
appeal." United States v. Broughton-Jones, 71 F.3d 1143, 1146 (4th
Cir. 1995) (internal quotation marks omitted). In order to determine
whether Marilyn DeLuca knowingly, intelligently, and voluntarily
agreed to the appellate waiver provision contained in her plea agree-
ment, we must examine "the particular facts and circumstances sur-
rounding [the] case, including the background, experience and
conduct of the accused." Id. (internal quotation marks omitted) (alter-
ation in original).
Based upon the record before us, we have no trouble in concluding
that Marilyn DeLuca knowingly, intelligently, and voluntarily agreed
to the appellate waiver provision contained in her plea agreement. At
her hearing pursuant to Federal Rule of Criminal Procedure 11, the
district court established that Marilyn DeLuca was a sophisticated
person with respect to understanding agreements, was represented by
counsel at the time she entered into the plea agreement, and had dis-
cussed with her counsel the nature of Count Twenty-Five. Marilyn
DeLuca personally indicated during the Rule 11 colloquy that she
understood the maximum penalties to which she could be subject,
understood that any sentence imposed upon her would be affected by
6
the Sentencing Guidelines, and understood that if she did not plead
guilty to Count Twenty-Five she would have certain constitutional
guarantees such as the right to a speedy and public trial on all counts
in the indictment. When the district court specifically questioned her
as to whether she understood that under the appellate waiver provi-
sion in her plea agreement she was waiving any right to appeal the
sentence imposed upon her, she indicated that she did. Furthermore,
when the district court specifically questioned her as to whether she
had reviewed the entire plea agreement and as to whether the agree-
ment reflected the entire understanding that she had with the govern-
ment, she responded yes to both questions. Finally, when the district
court specifically questioned Marilyn DeLuca regarding the voluntari-
ness of her plea, she denied that anyone had made any promise or
threat to induce her to plead guilty.
Viewing all of these circumstances under which Marilyn DeLuca
entered her plea, we conclude that her agreement to the appellate
waiver provision was knowing, intelligent, and voluntary. Our deci-
sion in Broughton-Jones, 71 F.3d at 1146, compels this conclusion.
In Broughton-Jones, the defendant challenged the validity of the
appellate waiver provision contained in her plea agreement on the
ground that she did not knowingly, intelligently, and voluntarily agree
to it. See id. The Rule 11 colloquy in Broughton-Jones was identical
in all material respects to the Rule 11 colloquy in this case except that
in Broughton-Jones the district court did not specifically question the
defendant about the appellate waiver provision as the district court did
in this case. See id. Under the circumstances in Broughton-Jones, we
concluded that the defendant's agreement to the appellate waiver pro-
vision contained in her plea agreement was knowing, intelligent, and
voluntary. See id. The fact that Marilyn DeLuca personally indicated
in response to questioning by the district court that she understood
that under the appellate waiver provision in her plea agreement she
was waiving any right to appeal the sentence imposed upon her is just
additional evidence, not present in Broughton-Jones, of the knowing,
intelligent, and voluntary nature of her waiver. In sum, we hold that
Marilyn DeLuca's agreement to the appellate waiver provision con-
tained in her plea agreement was knowing, intelligent, and voluntary.
Therefore, the provision is enforceable.
7
III.
Having concluded that the appellate waiver provision contained in
Marilyn DeLuca's plea agreement is enforceable, we next address the
government's argument that the same provision precludes her from
challenging the district court's denial of her motion for specific per-
formance. Without deciding whether a defendant can ever validly
waive in a plea agreement his or her right to make a motion for spe-
cific performance to force the government to perform its obligations
under a plea agreement, we hold that the language of the appellate
waiver provision in Marilyn DeLuca's plea agreement does not pre-
clude her from challenging the district court's denial of her motion for
specific performance.
Our interpretation of Marilyn DeLuca's plea agreement is guided
by contract law. See United States v. McQueen , 108 F.3d 64, 66 (4th
Cir. 1997); United States v. Peglera, 33 F.3d 412, 413 (4th Cir. 1994).
Thus, we next examine the language of the appellate waiver provision
contained in Marilyn DeLuca's plea agreement to determine whether
it precludes her from challenging the district court's denial of her
motion for specific performance. See id.The language at issue in the plea agreement is as follows:
The defendant is aware that Title 18, United States Code,
Section 3742 affords a defendant the right to appeal the sen-
tence imposed. Acknowledging all this, the defendant know-
ingly waives the right to appeal any sentence within the
maximum provided in the statute(s) of conviction (or the
manner in which that sentence was determined) on the
grounds set forth in Title 18, United States Code, Section
3742 or on any ground whatever, in exchange for the con-
cessions made by the United States in this plea agreement.
(J.A. 139). When examined carefully, this language, while broad in
scope, does not preclude Marilyn DeLuca from challenging the dis-
trict court's denial of her motion for specific performance on the part
of the government. Critically, her agreement to waive her right to
appeal any sentence imposed is in exchange for the concessions made
by the government in the plea agreement. Here, Marilyn DeLuca
8
seeks to enforce what she contends is one of those concessions--i.e.,
the government's alleged oral promise as part of the plea agreement
to make a motion for a reduction in her sentence pursuant to USSG
§ 5K1.1 if she pleaded guilty, allowed herself to be debriefed about
the fraudulent scheme, and her husband pleaded guilty. Thus, the
appellate waiver provision does not prevent her from seeking to
enforce this alleged obligation of the government under the agree-
ment. See United States v. Hicks, 129 F.3d 376, 380 (7th Cir. 1997)
(recognizing that when a plea agreement contains an appellate waiver
provision with respect to a defendant's sentence, the "defendant
should be allowed to appeal on the narrow issue of whether the gov-
ernment has breached its responsibilities under the plea agreement").
IV.
Having concluded that the appellate waiver provision does not pre-
clude our review of the district court's denial of Marilyn DeLuca's
motion for specific performance, we now address that issue on the
merits. USSG § 5K1.1 provides:
Upon motion of the government stating that the defendant
has provided substantial assistance in the investigation or
prosecution of another person who has committed an
offense, the court may depart from the guidelines.
(a) The appropriate reduction shall be determined by the
court for reasons stated that may include, but are not
limited to, consideration of the following:
(1) the court's evaluation of the significance and
usefulness of the defendant's assistance, tak-
ing into consideration the government's eval-
uation of the assistance rendered;
(2) the truthfulness, completeness, and reliability
of any information or testimony provided by
the defendant;
(3) the nature and extent of the defendant's assis-
tance;
9
(4) any injury suffered, or any danger or a risk of
injury to the defendant or his family resulting
from his assistance;
(5) the timeliness of the defendant's assistance.
Id.
As a general matter, the decision whether to make a motion for a
reduction in a defendant's sentence pursuant to USSG§ 5K1.1 for
rendering substantial assistance to the government is committed to the
unbridled discretion of the government, and no amount of substantial
assistance standing alone will obligate the government to make such
a motion. See United States v. Dixon, 998 F.2d 228, 230 (4th Cir.
1993). We have recognized two limitations, however, on the discre-
tion afforded the government under USSG § 5K1.1: (1) the govern-
ment may not withhold a USSG § 5K1.1 motion for an
unconstitutional reason; and (2) it may not withhold a USSG § 5K1.1
motion that it is obligated to make by the terms of a valid contractual
agreement with the defendant. See United States v. Wallace, 22 F.3d
84, 87 (4th Cir. 1994). The burden of establishing that the govern-
ment's refusal to make a USSG § 5K1.1 motion violates one of these
two limitations on its discretion is on the defendant who seeks to
compel the government to make such a motion. See id.; Dixon, 998
F.2d at 230.
Marilyn DeLuca does not argue that an unconstitutional reason
motivated the government's refusal to make a USSG§ 5K1.1 motion
on her behalf. Instead, she seeks to enforce an alleged oral promise
by the government under the plea agreement, attested to by her coun-
sel in an affidavit, that the government would make a USSG § 5K1.1
motion if she pleaded guilty, allowed herself to be debriefed about the
fraudulent scheme, and her husband pleaded guilty. The government
denies it made such a promise.
We reject as being without merit Marilyn DeLuca's challenge to
the district court's denial of her motion for specific performance.
Under our circuit precedent, if the language in a plea agreement "``is
unambiguous as a matter of law, and there is no suggestion of govern-
ment overreaching of any kind, the agreement should be interpreted
10
and enforced accordingly.'" United States v. Garcia, 956 F.2d 41, 43
(4th Cir. 1992) (quoting United States v. Harvey , 791 F.2d 294, 300
(4th Cir. 1986)). Here, Marilyn DeLuca's written plea agreement
unambiguously states that it constituted the complete agreement
between the United States, her, and her counsel, and that the United
States had made no promises or representations except as set forth in
writing in her plea agreement. Furthermore, the record contains no
evidence of overreaching on the part of the government with respect
to the plea negotiations between Marilyn DeLuca and the govern-
ment. The record also does not contain any evidence of bad faith on
the part of the government in refusing to make a USSG § 5K1.1
motion on behalf of Marilyn DeLuca. Finally, when specifically ques-
tioned by the district court at her Rule 11 hearing as to whether the
plea agreement reflected the entire understanding that she had with
the government, she responded affirmatively. Under these circum-
stances, we must enforce the plea agreement as written, see Garcia,
956 F.2d at 43, which left to the government's sole discretion the
decision of whether to make a USSG § 5K1.1 motion for a reduction
of her sentence. Because Marilyn DeLuca has failed to establish an
enforceable promise on the part of the government to make a USSG
§ 5K1.1 motion on her behalf, we affirm the district court's denial of
Marilyn DeLuca's motion for specific performance.
V.
Lastly, Marilyn DeLuca challenges the district court's setting the
loss amount at $641,000 for purposes of sentencing her pursuant to
USSG § 2F1.1 on the ground that it violated her Fifth Amendment
due process right not to be sentenced upon materially false informa-
tion. She makes such a challenge despite the fact that she stipulated
the fraudulent scheme involved an actual loss to Principal Mutual of
$641,000. She explains that at the time she stipulated to this figure,
neither she nor the government knew that the amount of actual loss
suffered by Principal Mutual was offset by amounts totaling approxi-
mately $400,000 that she and her husband spent maintaining the com-
mercial properties involved. If the loss figure is set at $200,000 for
purposes of USSG § 2F1.1, Marilyn DeLuca's sentencing range
would decrease from eighteen to twenty-four months' imprisonment
to ten to sixteen months' imprisonment.
11
The Fifth Amendment's Due Process Clause affords a criminal
defendant the right not to be sentenced on materially false informa-
tion, see United States v. Lee, 540 F.2d 1205, 1210-11 (4th Cir.
1976), and "a defendant's agreement to waive appellate review of his
sentence is implicitly conditioned on the assumption that the proceed-
ings following entry of the plea will be conducted in accordance with
constitutional limitations." United States v. Attar, 38 F.3d 727, 732
(4th Cir. 1994). Thus, to the extent Marilyn DeLuca is alleging a vio-
lation of her Fifth Amendment due process right not to be sentenced
upon materially false information, we may review her challenge
despite the appellate waiver provision contained in her plea agree-
ment. Cf. id. at 732-33 (holding appellate waiver provision did not
preclude defendants from challenging their sentences on ground that
the proceedings following entry of their guilty pleas, including their
sentencing hearings, were conducted in violation of their Sixth
Amendment right to counsel).
USSG § 2F1.1(a) provides a base offense level of six. For losses
exceeding $2,000, USSG § 2F1.1(b)(1) provides an enhancement
which is dependant upon the greater of (1) the amount of intended
loss or (2) the amount of actual loss. See USSG § 2F1.1, comment.
(n.8) (providing that for purposes of USSG § 2F1.1(b)(1) "if an
intended loss that the defendant was attempting to inflict can be deter-
mined, this figure will be used if it is greater than the actual loss.").
The record shows that in setting the loss figure at $641,000 for pur-
poses of USSG § 2F1.1(b)(1), the district court did not rely upon
materially incorrect information. From our review of the transcript of
the sentencing hearing, we have no doubt that the district court found
that the intended loss to Principal Mutual amounted to $641,000 and
sentenced Marilyn DeLuca under USSG § 2F1.1(b)(1) on that basis.
The district court's intended loss finding is amply supported by the
stipulated fact contained in the plea agreement by Marilyn DeLuca
that "[i]t was part of the scheme to defraud that defendant ROBERT
R. DELUCA would . . . obtain approximately $641,000 from Princi-
pal Mutual and the said DeLuca tenants by knowingly and fraudu-
lently persuading the tenants to pay rents directly to the DeLucas or
their business enterprises instead of them paying them directly to
Principal Mutual." (J.A. 148). Because Marilyn DeLuca does not
challenge the accuracy of this stipulated fact concerning her hus-
12
band's activities and was willfully blind to the scheme, we cannot
conclude that the district court relied upon materially false informa-
tion in sentencing Marilyn DeLuca.2
VI.
In sum, we hold: (1) Marilyn DeLuca knowingly, intelligently, and
voluntarily agreed to the appellate waiver provision in her plea agree-
ment; (2) the appellate waiver provision in her plea agreement does
not prevent this court from reviewing her challenge to the district
court's denial of her motion for specific performance; (3) the district
court did not err in denying Marilyn DeLuca's motion for specific
performance; (4) Marilyn DeLuca's due process challenge to the loss
amount found by the district court for purposes of sentencing her pur-
suant to USSG § 2F1.1 is not precluded by the appellate waiver provi-
sion contained in her plea agreement; and (5) the district court's
finding that the intended loss of the scheme to defraud Principal
Mutual is not based upon materially false information. Accordingly,
we affirm the judgment of the district court.
AFFIRMED
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2 To the extent Marilyn DeLuca challenges the district court's use of
the "intended loss" figure as opposed to the alleged lesser "actual loss"
figure for purposes of sentencing her under USSG§ 2F1.1, this challenge
to the district court's application of the Sentencing Guidelines is squarely
foreclosed by the appellate waiver provision in her plea agreement.
13