United States v. McLamb ( 1996 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v. No. 95-6773
PHILLIP CHESTNUT MCLAMB,
Defendant-Appellant.
Appeal from the United States District Court
for the Eastern District of North Carolina, at Raleigh.
James C. Fox, Chief District Judge.
(CR-91-46-F, CA-94-852-CV-5-F)
Argued: November 1, 1995
Decided: February 26, 1996
Before NIEMEYER, HAMILTON, and MICHAEL, Circuit Judges.
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Affirmed in part, vacated in part and remanded for resentencing by
unpublished opinion. Judge Hamilton wrote the opinion, in which
Judge Michael joined. Judge Niemeyer wrote a separate concurring
opinion.
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COUNSEL
ARGUED: James Baxter Rivenbark, Greensboro, North Carolina, for
Appellant. Barbara Dickerson Kocher, Assistant United States Attor-
ney, Raleigh, North Carolina, for Appellee. ON BRIEF: Janice Mc-
Kenzie Cole, 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Unpublished opinions are not binding precedent in this circuit.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
HAMILTON, Circuit Judge:
Phillip Chestnut McLamb (McLamb) appeals from the district
court's denial of his motion pursuant to 28 U.S.C.A.§ 2255 (West
1994), collaterally attacking his convictions for money laundering,
see 18 U.S.C.A. § 1956(a)(3) (West Supp. 1995), and transaction
structuring, see 26 U.S.C.A. (I.R.C.) § 6050I(f)(1) (West Supp. 1995),
and his sentence flowing therefrom. For reasons that follow, we
affirm McLamb's convictions, but vacate his sentence and remand for
resentencing consistent with this opinion.
I.
The facts of this case are fully set forth in our opinion on direct
appeal, see United States v. McLamb, 985 F.2d 1284, 1286-87 (4th
Cir. 1993), and thus, we restate them only insofar as is necessary to
resolve this appeal. McLamb's charges stemmed from two separate
incidents connected with a car dealership he owned. The first incident
took place in July 1990 with McLamb structuring the sale of a Ford
van for the purpose of evading the Internal Revenue Service (IRS)
reporting requirement in violation of I.R.C. § 6050I(f)(1). The second
incident took place in August 1990 with McLamb laundering "sting"
money during the sale of a Lincoln Town Car to an undercover gov-
ernment agent in violation of 18 U.S.C.A. § 1956(a)(3). The under-
cover agent told McLamb that his brother-in-law wanted to purchase
a car with money that had its origin in the sale of illegal drugs. The
money was, in fact, "sting" money, provided by the government for
the purpose of conducting the undercover sting operation. McLamb
offered to accept the money for purchase of the car and told the
undercover officer exactly how to structure the transaction to avoid
IRS reporting requirements. On the day of the contemplated sale,
McLamb instructed the financial officer employed by the dealership
to prepare documents for the sale of the Lincoln Town Car in the
2
name of the alleged brother-in-law. The record contains no evidence
that indicates the financial officer had any knowledge of the alleged
illegal source of the "sting" money. The sting ended when McLamb
allowed the financial officer to accept the "sting" money.
McLamb was subsequently indicted on multiple charges arising out
of these two incidents. The jury ultimately convicted McLamb of two
of them, money laundering arising out of the sting incident with the
undercover agent in violation of 18 U.S.C.A. § 1956(a)(3) and trans-
action structuring arising out of the Ford van sale in violation of
I.R.C. § 6050I(f)(1).
McLamb was sentenced on March 9, 1992. The district court calcu-
lated McLamb's total offense level on the money laundering count at
twenty-five and his total offense level on the transaction structuring
count at twenty. McLamb had a criminal history category of I. In
reaching the total offense level of twenty-five on the money launder-
ing count, the district court enhanced McLamb's base offense level
of twenty, see United States Sentencing Commission, Guidelines
Manual (USSG) § 2S1.1(a)(2), by two-levels for McLamb's role in
the offense as an organizer or leader, see USSG § 3B1.1(c) (Nov.
1991), and by three levels under the 1991 version of USSG
§ 2S1.1(b)(1) for knowing and believing the funds involved were "the
proceeds of an unlawful activity involving the manufacture, importa-
tion, or distribution of narcotics or other controlled substances,"
USSG § 2S1.1(b)(1) (Nov. 1991). Both enhancements taken together
increased McLamb's sentencing range from thirty-three to forty-one
months' imprisonment to fifty-seven to seventy-one months'
imprisonment.1 The district court sentenced McLamb to seventy-one
months' imprisonment.2
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1 The three-level enhancement taken alone raised McLamb's total
offense level from level twenty-two to level twenty-five, thus increasing
his sentencing range from forty-one to fifty-one months' imprisonment
to fifty-seven to seventy-one months' imprisonment. The two-level
enhancement taken alone raised McLamb's total offense level from level
twenty-three to level twenty-five, thus increasing his sentencing range
from forty-six to fifty-seven months' imprisonment to fifty-seven to
seventy-one months' imprisonment.
2 Grouping both counts and using the count with the highest offense
level, see USSG § 3D1.2(d), the district court used the offense level
twenty-five from the money laundering count as McLamb's total offense
level in calculating his sentencing range. Without explanation, the dis-
trict court also sentenced McLamb separately on the transaction structur-
ing count to sixty months' imprisonment to run concurrently.
3
McLamb appealed and we affirmed. See McLamb, 985 F.2d at
1284. McLamb then filed a motion in the district court under 28
U.S.C.A. § 2255 collaterally attacking his convictions and sentence.
In his motion, McLamb claimed that his convictions violated the bar
of double jeopardy, the Fourth Amendment's prohibition against ille-
gal searches and seizures, and his Sixth Amendment right to effective
assistance of counsel. He also claimed the indictment was insufficient
to charge him with money laundering. Next, McLamb claimed the
district court's application of the 1991 version of USSG § 2S1.1(b)(1)
violated the Ex Post Facto Clause. Finally, McLamb claimed the dis-
trict court erroneously increased his base offense level by two levels
pursuant to USSG § 3B1.1(c) for his role as an organizer or leader in
a criminal activity. The district court denied the motion in toto. This
appeal followed.
II.
While McLamb has raised several claims in his § 2255 motion,
only two merit discussion.
A.
In the first claim meriting discussion, McLamb contends that his
sentence should be vacated and his case should be remanded for
resentencing because the district court's three-level increase in his
base offense level on the money laundering count pursuant to the
1991 version of USSG § 2S1.1(b)(1) violated the Ex Post Facto
Clause of the Constitution, see U.S. Const. art. I, § 9, cl. 3. Arguing
McLamb did not suffer an ex post facto violation, the government
contends that McLamb should be denied relief. We agree with
McLamb.3
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3 Ordinarily, the government's interest in finality of its criminal judg-
ments bars our review of § 2255 claims that could have been raised on
direct appeal but were not. See United States v. Metzger, 3 F.3d 756,
757-58 (4th Cir. 1993), cert. denied, 114 S. Ct. 1374 (1994). See also
United States v. Maybeck, 23 F.3d 888, 891-92 (4th Cir. 1994). However,
if the government fails to assert this bar, the bar is waived and the cause
and prejudice standard is not applied. Metzger 3 F.3d at 757. Under such
circumstances, it is said that "the government fail[s] to vindicate" its
4
As a general rule, a defendant's sentence should be based upon the
United States Sentencing Guidelines "in effect on the date the defen-
dant is sentenced." 18 U.S.C.A. § 3553(a)(4) (West Supp. 1995).
However, amendments to the Sentencing Guidelines occurring after
a defendant's offense of conviction but before sentencing should not
be applied if doing so would increase his sentence. See United States
v. Morrow, 925 F.2d 779, 782-83 (4th Cir. 1991). Such an increase
would violate the Ex Post Facto Clause in Article I, Section 9, Clause
3 of the Constitution, which provides that neither Congress nor any
State shall pass any "ex post facto Law." U.S. Const. art. I, § 9, cl.
3; see Collins v. Youngblood, 497 U.S. 37, 41 (1990) (stating that
under the Ex Post Facto Clause, legislatures may not retroactively
increase the punishment for criminal acts). We now turn to consider
whether McLamb has suffered an ex post facto violation.
When McLamb's criminal activities ended in August 1990, USSG
§ 2S1.1(b)(1) provided a three-level sentencing enhancement for a
defendant convicted of money laundering, "[i]f the defendant knew
that the funds were the proceeds of an unlawful activity involving the
manufacture, importation, or distribution of narcotics or other con-
trolled substances." USSG § 2S1.1(b)(1) (Nov. 1989) (emphasis
added). The enhancement did not apply to the target of a government
sting, who like McLamb, could not know that the funds were the pro-
ceeds of unlawful activity. See United States v. Barton, 32 F.3d 61(4th Cir. 1994) (holding that under the 1989 version of USSG
§ 2S1.1(b)(1), a defendant's actual knowledge of the source of the
funds was required to trigger enhancement, not mere belief, as can
only be the case when sting money is involved). However, by the time
of McLamb's sentencing on March 9, 1992, USSG § 2S1.1(b)(1) had
been amended to provide a three-level sentencing enhancement for a
defendant convicted of money laundering, "[i]f the defendant knew or
believed that the funds were the proceeds of an unlawful activity
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interest in finality. Id. In this court, the government proffered that the
appropriate standard of review for this claim is de novo, see Appellee's
Brief at 3, and has not argued that McLamb's failure to raise this claim
on direct appeal is bar to our review. Therefore, the government has
waived any bar that would apply to our review of this claim as a result
of McLamb's failure to raise it on direct appeal.
5
involving the manufacture, importation, or distribution of narcotics or
other controlled substances." USSG § 2S1.1(b)(1) (Nov. 1991)
(emphasis added). The amended version of USSG § 2S1.1(b)(1) does
apply to a defendant who is the target of a government sting. See
Barton, 32 F.3d at 67 ("The amendment of the guideline to add the
words ``or believed' was, according to the statement of purpose, a
``revis[ion] . . . to reflect the enactment' of a new law designed to net
targets of government stings who could not know in fact that the
money was from illegal trade.").
Under these circumstances, the district court's application of the
1991 version of USSG § 2S1.1(b)(1) to increase McLamb's base
offense level by three levels violated the Ex Post Facto Clause. The
district court used the 1991 version of the Sentencing Guidelines to
determine McLamb's sentence. Because the money involved in the
money laundering count was "sting" money, McLamb would have
been subject to a three-level enhancement under the 1991 version of
USSG § 2S1.1(b)(1) but not under the 1989 version. Enhancement of
McLamb's base offense level pursuant to the 1991 version of USSG
§ 2S1.1(b)(1) increased the legal consequences of McLamb's acts that
were completed before the effective date of the 1991 version in viola-
tion of the Ex Post Facto Clause. The enhancement raised McLamb's
total offense level from level twenty-two to twenty-five, thus increas-
ing his sentencing range from forty-one to fifty-one months' impris-
onment to fifty-seven to seventy-one months' imprisonment. In light
of our conclusion that an ex post facto violation has occurred, we
vacate McLamb's sentence and remand for resentencing using the
1989 version of USSG § 2S1.1(b)(1).4
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4 The government also argues that Barton announces a new rule for
purposes of Teague v. Lane, 489 U.S. 288 (1989) (plurality opinion), and
its progeny, and thus asserts that we are barred from applying our deci-
sion in Barton to conclude that the district court's three-level enhance-
ment of McLamb's base offense level under the 1991 version of USSG
§ 2S1.1(b)(1) violated the Ex Post Facto Clause. The government's argu-
ment is without merit. Teague does not bar the retroactive application on
collateral review of a decision concerning the reach of a federal statute,
or as here, a sentencing guideline. See United States v. Dashney, 52 F.3d
298, 299 (10th Cir. 1995); United States v. McClelland, 941 F.2d 999,
1001 (9th Cir. 1991); United States v. Tayman , 885 F. Supp. 832 (E.D.
6
B.
In the second claim meriting discussion, McLamb seeks vacatur of
his sentence and resentencing on his claim that the district court erred
by increasing his base offense level on the money laundering count
by two-levels for his role as an organizer or leader in a criminal activ-
ity. See USSG § 3B1.1(c).5 The core of McLamb's claim is that he did
not organize or lead anyone who qualified as a "participant" in the
conduct of criminal activity, and that an amendment to the commen-
tary of USSG § 3B1.1 after his sentencing makes clear that an
enhancement under USSG § 3B1.1 is inappropriate unless he did. See
USSG § 3B1.1, comment. (n.2) (Nov. 1993). According to McLamb,
the 1993 amendment applies retroactively, because although the Sen-
tencing Commission did not list it as one of the amendments having
retroactive effect under USSG § 1B1.10, it did characterize the
amendment as "clarif[ying]". USSG, App. C, amd. 500 (effective
Nov. 1, 1993).
USSG § 3B1.1 provides as follows:
Based on the defendant's role in the offense, increase the
offense level as follows:
(a) If the defendant was an organizer or leader of
a criminal activity that involved five or more
participants or was otherwise extensive,
increase by 4 levels.
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Va. 1995); cf. United States v. Bonnette, 781 F.2d 357, 362-364 (4th Cir.
1986) (pre-Teague decision allowing federal habeas prisoner to assert
claim for collateral relief based on a subsequent Supreme Court opinion
construing a federal criminal statute to exclude the conduct underlying
the prisoner's conviction).
5 This claim was also not raised on direct appeal. In this court, the gov-
ernment has not asserted that McLamb's failure to raise this claim on
direct appeal bars our review. Therefore, the government has waived any
bar that would apply to our review of this claim as a result of McLamb's
failure to raise it on direct appeal. See Metzger, 3 F.3d at 757-58; supra,
note 3.
7
(b) If the defendant was a manager or supervisor
(but not an organizer or leader) and the crimi-
nal activity involved five or more participants
or was otherwise extensive, increase by 3
levels.
(c) If the defendant was an organizer, leader,
manager, or supervisor in any criminal activ-
ity other than described in (a) or (b), increase
by 2 levels.
At sentencing, the presentence report recommended a two-level
increase in McLamb's base offense level on the money laundering
count under USSG § 3B1.1(c), stating that McLamb "was an orga-
nizer and leader of a criminal act." (J.A. 380). The district court
adopted this recommendation and finding without comment.
A year and a half after McLamb was sentenced, the Sentencing
Commission amended the commentary to USSG § 3B1.1 by adding
a new Application Note 2:
To qualify for an adjustment under this section, the defen-
dant must have been the organizer, leader, manager, or
supervisor of one or more other participants. An upward
departure may be warranted, however, in the case of a
defendant who did not organize, lead, manage, or supervise
another participant, but who nevertheless had management
responsibility over the property, assets, or activities of a
criminal organization.
USSG § 3B1.1, comment. (n.2) (Nov. 1993). The Commission stated
that this amendment "clarifies the operation of[USSG § 3B1.1] to
resolve a split among the courts of appeal." USSG, App. C,
amd. 500 (effective Nov. 1, 1993). The split, between the First,
Third, Sixth and Ninth circuits on the one hand 6 and the
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6 See United States v. Fuentes, 954 F.2d 151 (3d Cir.), cert. denied,112
S. Ct. 2950 (1992) (requiring degree of control over other persons for
USSG § 3B1.1 to apply); United States v. Mares-Molina, 913 F.2d 770(9th Cir. 1990) (same); United States v. Fuller , 897 F.2d 1217 (1st Cir.
1990) (same); United States v. Carroll, 893 F.2d 1502 (6th Cir. 1990)
(same).
8
Fourth7 on the other, concerned whether an enhancement under USSG
§ 3B1.1 was appropriate if the defendant had only exercised control
over property, assets, or criminal activity with no exercise of control
over one or more participants. In Chambers, 985 F.2d at 1263, our
circuit took the view that a defendant's management control over
property, assets, or criminal activities could trigger enhancement. Id.
at 1268. The 1993 amendment to the commentary of USSG § 3B1.1
is not listed in USSG § 1B1.10, which sets forth the amendments that
may apply retroactively to reduce a defendant's sentence. See United
States v. Capers, 61 F.3d 1100, 1109 (4th Cir. 1995).
McLamb argues the amendment is clarifying rather than a substan-
tive change in the law, and thus should be applied retroactively to
reduce his sentence despite the fact USSG § 1B1.10 does not list it
as an amendment having retroactive effect, see id. (court may apply
a post-sentence clarifying amendment even though USSG § 1B1.10
does not list it as having retroactive effect). In Capers, we recently
rejected this very argument, holding the 1993 amendment to the com-
mentary of USSG § 3B1.1 is not clarifying, but amounts to a substan-
tive change in the law, and thus, may not be applied retroactively to
reduce a defendant's sentence. Id. at 1112-1113. After application of
several factors used for distinguishing between a clarifying amend-
ment and an amendment that changes substantive law, we concluded
that the amendment:
is not a mere clarification because it works a substantive
change in the operation of the guideline in this circuit. The
amendment has the effect of changing the law in this circuit.
Before the amendment, a defendant in this circuit could
receive the enhancement without having exercised control
over other persons; after the amendment, the defendant
must have exercised control over other persons to warrant
the enhancement.
Id. at 1110 (emphasis added).
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7 See United States v. Chambers , 985 F.2d 1263 (4th Cir.) (defendant
may be a "manager" even though he did not directly supervise other per-
sons), cert. denied, 114 S. Ct. 107 (1993).
9
Although we are convinced that had McLamb been sentenced after
the effective date of the amended commentary, the enhancement
would have been inappropriate,8 under Capers, we may not apply the
1993 amendment retroactively, and thus, the question becomes
whether the district court appropriately applied the enhancement
under the pre-amendment state of the law. We believe the district
court correctly applied the enhancement. McLamb initiated the
money laundering transaction with the undercover agent and told him
exactly how to structure the transaction to avoid the IRS reporting
requirement. McLamb also directed a person under his employ, the
financial officer, to prepare a document necessary to complete the
money laundering transaction. Thus, although McLamb did not exer-
cise control over "participants" as is now required under the amended
version of USSG § 3B1.1, he exercised sufficient control over the
criminal activity to warrant the enhancement under pre-amendment
law. Accordingly, we affirm the district court's denial of McLamb's
motion on this claim.
C.
We are left with the consideration of McLamb's appropriate sen-
tencing range on remand. Upon resentencing, the district court will be
confronted with an offense level of twenty-two on the money launder-
ing count and twenty on the transaction structuring count. Grouping
both offense levels, see USSG § 3D1.2(d), McLamb will have a com-
bined offense level of twenty-two. An offense level of twenty-two
will combine with McLamb's criminal history category of I to pro-
duce a sentencing range of forty-one to fifty-one months' imprison-
ment. Our vacation of McLamb's sentence includes the sixty month
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8 Other than McLamb, the conduct underlying McLamb's money laun-
dering conviction only involved the undercover agent and the financial
officer; neither may count as a participant, because neither were crimi-
nally responsible for the commission of the offense. See USSG § 3B1.1,
comment. (n.1) (Nov. 1991) ("A ``participant' is a person who is crimi-
nally responsible for the commission of the offense, but need not have
been convicted. A person who is not criminally responsible for the com-
mission of the offense (e.g., an undercover law enforcement officer) is
not a participant.").
10
concurrent sentence the district court gave McLamb on the transac-
tion structuring count.9
III.
In sum, we hold the district court's application of the 1991 version
of USSG § 2S1.1(b)(1) to increase McLamb's base offense level on
the money laundering count violated the Ex Post Facto Clause.
Accordingly, we vacate McLamb's sentence and remand for resen-
tencing consistent with this opinion. In addition to concluding
McLamb's claim pertaining to the organizer or leader enhancement
under USSG § 3B1.1(c) is without merit, we have reviewed
McLamb's remaining claims and conclude they are without merit.
We, therefore, affirm the district court's judgment in all other
respects.
AFFIRMED IN PART, VACATED IN PART AND REMANDED
FOR RESENTENCING
NIEMEYER, Circuit Judge, concurring:
I concur in the opinion of the court except for footnote 3. I cannot
join in footnote 3 because it suggests that we obtained our right to
review the sentence in this case because "the government has waived
any bar that would apply to our review of this claim." In my opinion,
the government waived no rights. I believe that the defendant has a
substantive right to review an illegal sentence despite his failure to
appeal the issue, and I do not believe that we could permit a defendant
to remain in prison under an illegal sentence. See 28 U.S.C. § 2255;
Sanders v. United States, 373 U.S. 1, 12 (1963) (§ 2255 was enacted
to provide expeditious remedy for correcting erroneous sentences of
federal prisoners without resort to habeas corpus).
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9 Under the grouping principle of USSG § 3D1.2(d), on remand the dis-
trict court may not give McLamb a separate sentence on the transaction
structuring count.
11