United States v. Andrew M. Brown, Sr. ( 1999 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v. No. 98-4592
ANDREW MCKINLEY BROWN, SR.,
Defendant-Appellant.
Appeal from the United States District Court
for the Eastern District of North Carolina, at Raleigh.
Terrence W. Boyle, Chief District Judge.
(CR-98-53)
Submitted: March 9, 1999
Decided: June 3, 1999
Before NIEMEYER and HAMILTON, Circuit Judges, and
PHILLIPS, Senior Circuit Judge.
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Vacated and remanded by unpublished per curiam opinion.
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COUNSEL
William Arthur Webb, Federal Public Defender, G. Alan DuBois,
Assistant Federal Public Defender, Raleigh, North Carolina, for
Appellant. Janice McKenzie Cole, United States Attorney, Anne M.
Hayes, Assistant United States Attorney, Raleigh, North Carolina, for
Appellee.
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Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
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OPINION
PER CURIAM:
Andrew M. Brown, Sr., appeals his sentence imposed upon his
guilty plea to one count of larceny of government property, see 18
U.S.C.A. § 641 (West Supp. 1998), one count of conspiracy to com-
mit larceny of government funds, see 18 U.S.C. § 371 (1994), one
count of false statements, see 18 U.S.C.A.§ 1001 (West Supp. 1998),
and one count of wire fraud, see 18 U.S.C.§ 1343 (1994). Brown
contends that the Government breached the plea agreement because
it failed to disclose to the court the full extent of his cooperation and
whether it deemed Brown's assistance as substantial. Brown also con-
tends that the court erred by concluding that it had no authority to
grant Brown's motion for substantial assistance made pursuant to U.S.
Sentencing Guidelines Manual § 5K1.1 (1997). Because we find that
the Government breached the plea agreement, we vacate the sentence
and remand for resentencing.
Brown, a retired United States Army chief warrant officer, owned
and operated Chief's Military Surplus and Repair in Fayetteville,
North Carolina, near Fort Bragg. Brown's store sold military surplus
items and procured parts for the military. Certain authorized person-
nel at Fort Bragg were permitted to make small military purchases at
Brown's store using an International Merchant Purchase Authoriza-
tion Card ("IMPAC"). Several IMPAC-authorized personnel allowed
Brown to use their IMPAC card to make fraudulent purchases. In
addition, the personnel gave Brown stolen military goods, which he
later sold at his store. Brown used an IMPAC card to charge the
United States Army for non-existent goods and services. Brown
received funds on the basis of the charges, but the Government did
not receive the goods or services. Brown split the funds with the per-
sonnel involved in the scheme. Subsequently, Brown used this
scheme to secure funds to invest in a supper club he owned.
2
An indictment was issued charging Brown with four separate
counts as a result of this scheme. Brown entered into a plea agreement
with the Government in which he agreed to:
waive knowingly and expressly the right to appeal whatever
sentence is imposed on any ground, including an appeal pur-
suant to 18 U.S.C. § 3742, and further to waive any right to
contest the conviction or the sentence in any post-conviction
proceeding, including any proceeding under 28 U.S.C.
§ 2255, excepting the Defendant's right to appeal based
upon grounds of ineffective assistance of counsel and pro-
secutorial misconduct not known to the Defendant at the
time of the Defendant's guilty plea.
(J.A. at 14-15). For its part, the Government agreed to:
make known to the Court at sentencing the full extent of the
Defendant's cooperation, including whether the Government
deems the Defendant to have substantially assisted authori-
ties, but the Government is not promising to move for
departure pursuant to 18 U.S.C. § 3553(e) or U.S.S.G.
§ 5K1.1.
(J.A. at 21). At the plea hearing, the court reviewed the plea agree-
ment, including Brown's waiver of his right to contest the conviction
and sentence in a post-conviction proceeding. Brown was informed
that if he gave false or misleading testimony, it would be a breach of
the agreement. Brown informed the court that he read and understood
the plea agreement and that he voluntarily agreed to the terms of the
agreement.
The presentence investigation report found that the total value of
stolen goods and cash received from fraudulent IMPAC-card use was
over $85,000. Thus, the report recommended a base offense level of
four, see USSG § 2B1.1(a), an eight-level increase in the offense level
due to the amount of loss, see § 2B1.1(b)(1)(I), a four-level increase
due to Brown's role in the offense, see USSG§ 3B1.1(a), another
four-level increase for receipt of stolen property, see USSG
§ 2B1.1(b)(4)(B), and a three-level reduction due to Brown's accep-
tance of responsibility, see USSG § 3E1.1(b).
3
Brown objected to the amount of loss attributed to his conduct. He
also objected to the four-level increase for his role in the offense. The
Government also objected, contending that the amount of loss
exceeded $200,000. At the sentencing hearing, Brown told the court
that there were only approximately thirteen fraudulent transactions
using the IMPAC card. The Government, on the other hand, claimed
that there were hundreds of fraudulent transactions. The court heard
testimony from several persons, including a criminal investigator with
military police, Special Agent Michael Blewett, a former employee of
Brown's, and a co-conspirator.
Brown's counsel questioned Blewett on cross-examination regard-
ing the extent of assistance provided by Brown.
Counsel: Are you aware that Mr. Brown was debriefed by
several officers in April of '98 at Wilson County
Jail?
Blewett: Yes, sir, I was present.
Counsel: Are you aware that Mr. Brown testified at an
Article 32 Hearing against Mr. Freeman at Wil-
son County Jail?
Blewett: Yes, sir, I am.
Counsel: Are you aware that Mr. Brown was prepared by
Captain Greg Illikainen to testify against I
believe it was Mr. Widow and Mr. Williams?
Blewett: Yes, sir, I am.
Counsel: Are you aware that Captain Michele Jackson
prepped Mr. Brown to testify against Mr. Con-
way Swinton and Mr. Hayes, prepared to testify
against them for their Article 32 Hearing; are
you aware of that?
Blewett: I am aware that he was prepared for Conway.
4
Counsel: Are you aware that there was supposed to be two
32 hearings going on this week? Mr. Freeman,
he was supposed to plea as a result of Mr. Brown
being prepped?
Blewett: No, I am not aware of that.
Counsel: Are you aware that Mr. Widow's case was con-
tinued for a couple of weeks and they wish for
Mr. Brown to testify there?
Blewett: Yes, I am aware of that.
Counsel: Are you aware that Mr. Edwards who is part of
the high-ranking officer of all these men here,
that Mr. Brown was prepped to testify against
him?
Blewett: I am aware of that.
Counsel: And are you aware of them prepping Mr. Brown
a [sic] equivalent of an indictment was held
against Mr. Edwards? A complaint was sworn
out?
Blewett: Yes, I am aware of that.
Counsel: Are you aware that they wish for Mr. Brown to
testify against Mr. Edwards?
Blewett: Yes, I am aware of that.
Counsel: And the rest of the men who have yet to go
through the Article 32 Hearing?
Blewett: Yes, that is a part of this plea agreement, sir.
(J.A. at 89-91). After this testimony, the court asked the prosecutor
if he was going to file a motion under USSG § 5K1.1, to which the
5
prosecutor responded in the negative.1 (J.A. at 91). The prosecutor did
not comment on Blewett's cross-examination testimony one way or
the other. In addition, there was no affirmative testimony or a state-
ment from the prosecutor regarding the extent of Brown's assistance,
nor did the prosecutor state whether Brown's assistance was deemed
substantial.
Based on the evidence, the court found that the total loss exceeded
$200,000, resulting in a ten-level increase above the base offense
level of four. The court also imposed a four-level increase due to
Brown's role in the offense, a four-level increase for receipt of stolen
property, and a three-level reduction for acceptance of responsibility.
Brown's total offense level was nineteen and he was placed in crimi-
nal history category II.
Brown moved for a downward departure under USSG§ 5K1.1.
The court denied the motion on the ground that only the Government
had the authority to make a motion pursuant to USSG§ 5K1.1. The
court sentenced Brown to 41 months' imprisonment, at the top end of
the applicable sentencing guidelines range.
Before addressing Brown's claims, we must determine the effect of
his waiver of his right to appeal contained in the plea agreement. A
waiver-of-appeal-rights provision in a valid plea agreement is
enforceable so long as it is the result of a knowing and intelligent
decision to forego the right to appeal. See United States v. Attar, 38
F.3d 727, 731 (4th Cir. 1994). Brown does not argue that his waiver
was not knowingly and intelligently made. In addition, we find, after
considering Brown's college background, age, business experience,
and plea colloquy, that there was no evidence that Brown's accep-
tance of the waiver provision was anything other than knowing and
intelligent. See United States v. Davis, 954 F.2d 182, 186 (4th Cir.
1992) (finding waiver of appeal rights contained in plea agreement to
be knowing and intelligent, even though trial judge did not explicitly
question defendant about his understanding of the waiver provision,
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1 Section 5K1.1 of the sentencing guidelines states: "Upon motion of
the government stating that the defendant has provided substantial assis-
tance in the investigation or prosecution of another person who has com-
mitted an offense, the court may depart from the guidelines."
6
where the record established that the defendant was a college gradu-
ate, that he had no difficulty with the English language, and that he
had discussed the plea agreement extensively with his counsel). On
the other hand, we agree with both parties that the waiver provision
does not bar consideration of Brown's claim that the Government
breached the plea agreement. See United States v. Rosa, 123 F.3d 94,
98 (2d Cir. 1997) (defendant may appeal, despite waiver of such right,
if government breaches the plea agreement).
Brown bears the burden of demonstrating that the agreement was
breached. See United States v. Conner, 930 F.2d 1073, 1076 (4th Cir.
1991). He contends that the Government's failure to make any affir-
mative representations regarding his assistance or to announce to the
court whether it deemed Brown's assistance substantial breached the
plea agreement. The interpretation of the plea agreement is guided by
contract law. "Because a defendant's fundamental and constitutional
rights are implicated when he is induced to plead guilty by reason of
a plea agreement, our analysis of the plea agreement or a breach
thereof is conducted with greater scrutiny than in a commercial con-
tract." United States v. McQueen, 108 F.3d 64, 66 (4th Cir. 1997)
(holding that government's breach of the plea agreement was plain
error).
Because Brown failed to assert in the district court that the Govern-
ment breached the plea agreement, our review is limited to plain
error. See United States v. Fant, 974 F.2d 559, 564-65 (4th Cir. 1992).
Under this analysis, it must be shown that there was an error, the error
was plain, and the plain error affected substantial rights, which Brown
bears the burden of demonstrating. See United States v. Hastings, 134
F.3d 235, 239-40 (4th Cir. 1998), cert. denied , ___ U.S. ___, 66
U.S.L.W. 3758 (U.S. May 26, 1998) (No. 97-8732). Specifically, he
must show that the error prejudiced him to the extent that it affected
the outcome of the proceedings. See United States v. Lewis, 10 F.3d
1086, 1092 (4th Cir. 1993). Finally, "[w]hen reviewing a breached
plea agreement for plain error . . . we must establish whether the
breach was so obvious and substantial that failure to notice and cor-
rect it affect[ed] the fairness, integrity or public reputation of the judi-
cial proceedings." McQueen, 108 F.3d at 66 (internal quotation
omitted).
7
The Government contends that it substantially complied with the
terms of the plea agreement. It points to Blewett's testimony on cross-
examination in which he acknowledged several instances in which
Brown provided assistance to the Government. The Government also
contends that the prosecutor's refusal to move for a§ 5K1.1 down-
ward departure was an implicit statement that the Government did not
deem Brown's assistance as substantial. Substantial compliance with
the terms of a contract assists the court in determining whether "con-
duct should, in reality, be considered the equivalent of compliance
under the contract." Phoenix Mut. Life Ins. Co. v. Adams, 30 F.3d
554, 561 n.15 (4th Cir. 1994). If a party deviated from the terms of
the contract to a substantial measure or frustrated the purpose of the
contract, then the party cannot be said to be in substantial compliance.
See Joseph A. by Wolfe v. New Mexico Dep't of Human Servs., 69
F.3d 1081, 1086 (10th Cir. 1995).
Brown argues that there is no way of knowing whether Blewett's
testimony reflected the full extent of Brown's cooperation or whether
it fully described to what use the Government put Brown's coopera-
tion. Certainly, Brown is entitled to the benefit of the bargain, and the
plea agreement obligated the Government to inform the court of the
full extent of Brown's cooperation. See McQueen , 108 F.3d at 66.
Although Blewett was aware of most of Brown's statements regard-
ing his assistance, he admitted that he was unaware that a specific co-
conspirator was planning to plead guilty as a result of Brown's assis-
tance. He was also unaware that Brown was prepared by investigators
to testify against another co-conspirator. The prosecutor did not state
whether the conduct of which Blewett was unaware actually did
occur. Brown contends that the court was not informed that his coop-
eration was instrumental in obtaining guilty pleas from other co-
conspirators.
The Government asserts that its obligation was fulfilled by coun-
sel's cross-examination. The prosecutor gave no indication whether
the content of defense counsel's questions, including those questions
that the witness could not answer affirmatively, reflected the full
extent of Brown's assistance. We think this falls short of the perfor-
mance for which Brown bargained.
Furthermore, we find that the Government's refusal to file a
§ 5K1.1 motion is not the same as deeming that Brown did not pro-
8
vide substantial assistance. It is well established that the Government
has the power, but not the duty, to file a § 5K1.1 motion. Absent a
promise, no amount of substantial assistance obligates the Govern-
ment to file the motion. See United States v. Dixon, 998 F.2d 228, 230
(4th Cir. 1993). In the instant appeal, the Government specifically
stated that it did not promise to move for a § 5K1.1 departure. Thus,
even if the Government believed Brown's assistance to be substantial,
it was not under any obligation to file the motion. It follows, then, that
the prosecutor's declaration that he did not intend to make the motion
does not necessarily imply that the Government deemed that Brown's
assistance was not substantial. As we stated in Dixon, "[T]he govern-
ment promised to ``deem,' one way or the other. It must keep this
promise." Dixon, 998 F.2d at 231. Accordingly, we find plain error.
We must decide whether the breach affected the outcome of the
proceedings. See Lewis, 10 F.3d at 1092. Brown contends that due to
his assistance, the Government should have filed a§ 5K1.1 motion.
He further contends that the Government did not deem his assistance
substantial or file a § 5K1.1 motion merely on the basis of his chal-
lenge to the amount of loss attributed to him. He also contends that
had the Government informed the court of the extent of his assistance,
he might not have been sentenced at the top end of the sentencing
guidelines range.
According to the Government, Brown's unwillingness to admit the
true magnitude of his scheme in court decreased the value of his prior
assistance.2 Furthermore, the Government contends that Brown was
not entitled to a § 5K1.1 motion because prior to the Government's
investigation into his activities, he threatened a store employee
because the employee was angry with him and threatened to report
him to the authorities.3 These arguments were not made in the district
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2 The Government claims that Brown made statements under oath that
contradicted his prior statements made during the debriefings with gov-
ernment investigators. We note that the record does not reflect whether
Brown was under oath when he engaged in a colloquy with the court
describing the mechanics and magnitude of the scheme. Furthermore, the
Government cites no specific examples of how Brown's statement in
court contradicted prior statements.
3 We note that the PSI did not recommend an enhancement for obstruc-
tion of justice.
9
court, of course, because there was no discussion about Brown's
assistance.
We find Brown's argument that the breach may have had an effect
on his sentence within the guideline's range persuasive. Because
Brown was sentenced at the top end of the sentencing guidelines
range, the Government's breach may have affected the outcome of the
proceedings. Despite the lack of a § 5K1.1 motion, the court has the
authority to consider a defendant's assistance when determining a
sentence within a range. See USSG § 1B1.4 (in determining sentence
within range, "court may consider, without limitation, any informa-
tion concerning the background, character and conduct of the defen-
dant"); United States v. Doe, 934 F.2d 353, 357 (D.C. Cir. 1991)
("holding that a court may always consider a defendant's assistance
in selecting a sentence from within the guideline range") (emphasis in
original).4 Thus, we conclude that Brown was substantially prejudiced
by the Government's breach.
Since it appears that Brown provided some assistance, including
testifying against his co-conspirators and possibly influencing a co-
conspirator to plead guilty, we find the prosecutor's failure to unam-
biguously inform the court as to the full extent of Brown's assistance
violated the plea agreement. Equally violative of the plea agreement
is the prosecutor's failure to deem whether Brown's assistance was
substantial. "[B]ecause violations of plea agreements on the part of
the government serve not only to violate the constitutional rights of
the defendant, but directly involve the honor of the government, pub-
lic confidence in the fair administration of justice, and the effective
administration of justice in a federal scheme of government," we find
that the Government's breach constituted plain error and entitles
Brown to relief. McQueen, 108 F.3d at 66 (internal quotation omit-
ted).
Insofar as Brown contends that the court erred in denying his
§ 5K1.1 motion, we find that the court did not have the authority to
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4 On the other hand, because there was not a complete discussion
regarding the extent of Brown's assistance, there is no reason to find that
he was entitled to a § 5K1.1 motion or that the Government acted in bad
faith when it failed to deem his assistance substantial.
10
grant the motion.5 We note at least one circuit court has found that in
light of Koon v. United States, 518 U.S. 81 (1996), a sentencing court
may grant a defendant's motion for downward departure based on the
defendant's substantial assistance. See United States v. Solis, 161 F.3d
281, 283-84 (5th Cir. 1998) (holding that a substantial assistance
departure without a government motion is within court's discretion
because it was not adequately considered by the Sentencing Commis-
sion); see also In re Sealed Case (Sentencing Guidelines, Substantial
Assistance), 149 F.3d 1198 (D.C. Cir.) (same), reh'g granted, opinion
vacated in part, 159 F.3d 1362 (D.C. Cir. 1998). However, more than
one year after Koon was decided, this Court reaffirmed the proposi-
tion that a court can impose a downward departure for substantial
assistance only upon the Government's motion. See United States v.
Schaefer, 120 F.3d 505, 508 (4th Cir. 1997).
Because the government breached the plea agreement, we vacate
the sentence and remand this case for resentencing. At the new sen-
tencing, the government is required to satisfy its obligations under the
agreement. We remand the case to a different district judge for resen-
tencing as we are required to do. See United States v. Peglera, 33
F.3d 412, 415 (4th Cir. 1994). We dispense with oral argument
because the facts and legal contentions are adequately presented in the
materials before the court and argument would not aid the decisional
process.
VACATED AND REMANDED
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5 The Government contends that unlike the prior claim, this claim is
foreclosed from review due to Brown's waiver of his appeal rights.
Because the substance of Brown's claim is without merit, we decline to
reach this issue.
11