United States v. Anderson ( 1999 )

Revised May 18, 1999
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_____________________
No. 98-40420
_____________________
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
JAMES ANDERSON and DEAN HODGE,
Defendants-Appellants.
_________________________________________________________________
Appeals from the United States District Court
for the Eastern District of Texas
_________________________________________________________________
April 26, 1999
Before KING, Chief Judge, STEWART, Circuit Judge, and LITTLE,
Chief District Judge.*
KING, Chief Judge:
Defendants-appellants James Anderson and Dean Hodge appeal
their convictions and sentences for conspiracy, transporting and
selling stolen goods in interstate commerce, and bank fraud. For
the following reasons, we affirm Hodge’s conviction and sentence,
and Anderson’s conviction. We vacate Anderson’s sentence and
remand for resentencing.
I. FACTUAL AND PROCEDURAL BACKGROUND
*
Chief Judge F. A. Little, Jr., of the Western District of
Louisiana, sitting by designation.
On July 9, 1997, a federal grand jury for the Eastern
District of Texas returned a seven-count indictment against
defendants-appellants James Anderson and Dean Hodge
(collectively, defendants) and co-defendant Christopher Garner.
Defendants and Garner were arraigned and entered not guilty
pleas.
On September 10, 1997, the same grand jury returned a seven-
count superseding indictment against defendants and Garner.
Defendants and Garner were all named in counts one through three.
Count one charged a violation of 18 U.S.C. § 371, conspiracy to
transport and sell stolen goods in interstate commerce in
violation of 18 U.S.C. §§ 2314 and 2315. Count two charged
violations of 18 U.S.C. §§ 2314 and 2, transportation and aiding
and abetting the transportation of stolen goods in interstate
commerce. Count three charged violations of 18 U.S.C. §§ 2315
and 2, sale and aiding and abetting the sale of stolen goods in
interstate commerce. Counts four through seven charged Hodge
with bank fraud in violation of 18 U.S.C. § 1344. Defendants
were arraigned and entered not guilty pleas. Garner entered into
a plea agreement with the government and testified against
defendants at trial.
A jury trial began on December 10, 1997. According to the
evidence presented at trial, during the period between February
1, 1996 and March 27, 1996, defendants illegally harvested timber
from four Louisiana properties owned respectively by Willamette
2
Industries (Willamette), Discus Oil Corporation (Discus) and WLS
Corporation (WLS), W.E. Barron, Jr., and Elmer Davies. Pursuant
to the scheme, Garner reviewed county or parish tax records in
order to obtain the names and addresses of individuals who owned
tracts of land with timber. He then sent out a bulk mailing to
these individuals in which he offered to provide forest
management and timber services. He specifically sought out
landowners whose property was adjacent to land owned by non-
resident owners. In several instances, Garner entered into a
contract with landowners who had responded to his mailing and
then assigned the contract to Anderson for a percentage of the
profits. Anderson in turn hired Hodge to harvest the timber.
However, in addition to, or instead of, harvesting the timber on
the land that was the subject of the contract, Hodge and/or his
crew harvested the timber on adjoining land owned by non-
residents. Defendants transported a portion of the harvested
timber from Louisiana to mills in Texas and sold the timber.
More specifically, in February 1996, Garner contracted to
harvest timber on land owned by Kelley Barnes. On February 23,
1996, Garner assigned the contract to Anderson. On February 25,
1996, Anderson hired Hodge to harvest the timber. From February
25, 1996 until March 8, 1996, Hodge’s crew actually harvested
timber on land located north of the Barnes tract that was owned
by Willamette, and then transported that timber from the
Willamette tract to the Arkansas Forest Products mill located in
3
Shelby County, Texas, where it was sold. Willamette suffered
losses amounting to $57,582.12.
In March 1996, Garner contracted to harvest timber from land
owned by Roosevelt Boler. On March 13, 1996, Garner assigned the
Boler contract to Anderson, who then hired Hodge to harvest the
Boler timber. Anderson paid Boler, but never cut his timber. On
March 13, 1996, Anderson, Hodge, and crew actually harvested
timber on a tract of land adjacent to the Boler tract owned by
Discus and WLS. Discus and WLS suffered losses amounting to
$38,532.53.
On March 20, 1996, Garner contracted to harvest timber from
land owned by the Molly Peoples estate. On March 20, 1996,
Garner assigned the contract to Anderson. On March 26, 1996,
Anderson hired Hodge to harvest the timber. On March 27, 1996,
Hodge’s crew actually harvested timber on two neighboring tracts
of land owned by Barron and Davies respectively. Barron suffered
losses amounting to $3833.38 and Davies suffered losses amounting
to $1461.20.
With respect to the bank fraud counts alleged in the
indictment, the evidence at trial established that on July 24,
1995, Hodge entered into a loan agreement with the First National
Bank of Hughes Springs (First National). As part of the
agreement, Hodge assigned his company’s (Circle H Timber’s)
interest in two timber deeds to First National as collateral for
a loan. Thereafter, on January 29, 1996, Hodge executed a
4
renewal of this loan in the amount of $26,092. Hodge falsely
represented to First National that he would repay the loan from
proceeds of the sale of timber from the collateral property when,
in fact, Hodge knew that prior to the execution of the loan
renewal he had harvested and sold the timber in question.
Similarly, on September 7, 1995, Hodge assigned Circle H
Timber’s interest in another timber deed to First National as
collateral for a second loan. On March 25, 1996, Hodge renewed
this loan in the amount of $41,067, and again falsely informed
First National that he would repay the loan from the proceeds of
the sale of timber from the aforementioned property, but had
already harvested and sold the timber without giving any of the
proceeds to First National.
As collateral for a third loan, Hodge assigned his interest
in another timber deed on September 25, 1995. On March 25, 1996,
Hodge renewed this loan in the amount of $15,554 by falsely
representing to First National that this loan would be repaid
from the proceeds of the sale of timber taken from the property.
At the time Hodge renewed the loan, he knew that he had already
harvested and sold all the timber from the property and had
provided none of the proceeds to First National.
Finally, on November 14, 1995, Hodge assigned Circle H
Timber’s interest in a timber deed from another property to First
National as collateral for a fourth loan. On March 25, 1996,
Hodge renewed this loan in the amount of $8854 by falsely
5
representing to First National that he would repay the loan with
the proceeds of the sale of timber taken from the property. In
fact, Hodge had already harvested and sold the timber from the
property and had not provided the proceeds to First National.
The combined value of the four fraudulently renewed loans
was $91,567. First National auctioned other collateral
substituted by Hodge worth $49,257.42, and applied that amount to
Hodge’s four outstanding loans. Thereafter, a balance of
$42,309.58 remained.
At the close of the government’s case, defendants moved for
judgments of acquittal. The court denied the motions. At the
close of all evidence, defendants renewed their motions for
judgments of acquittal. The district court again denied the
motions. On December 15, 1997, the jury found defendants guilty
on all counts with which they were charged.
Anderson appeared for sentencing on March 20, 1998.
Anderson’s presentence report (PSR) had added eleven levels to
his initial base offense level of four pursuant to United States
Sentencing Guideline (U.S.S.G.) § 2B1.1(b)(1)(L) because the loss
Anderson had caused was more than $350,000, and two levels
pursuant to U.S.S.G. § 2B1.1(b)(4) because the offense involved
more than minimal planning. Based on a final base offense level
of seventeen and a criminal history category of II, the
sentencing guidelines suggested a range of twenty-seven to
thirty-three months of imprisonment. Anderson received a
6
sentence of twenty-seven months of imprisonment to be followed by
three years of supervised release. The district court also
ordered Anderson to pay restitution in the amount of $354,905.30
and a $50 special assessment for each count of conviction.
Anderson timely appealed, and the district court granted
Anderson’s motion for release pending appeal.
Hodge appeared for sentencing on March 26, 1998. His PSR
calculated his base offense level with regard to counts one
through three by adding ten levels to the initial base level of
four pursuant to U.S.S.G. § 2B1.1(b)(1)(K) because the loss
caused by Hodge was more than $200,000 but less than $350,000,
and by adding two levels pursuant to U.S.S.G. § 2B1.1(b)(4)
because the offense involved more than minimal planning. The
PSR’s calculations further increased Hodge’s base offense level
by four levels pursuant to U.S.S.G. § 3B1.1(a) for his role as an
organizer or leader, resulting in an adjusted base offense level
of twenty. With regard to counts four through seven, the PSR
calculated Hodge’s base offense level by increasing the initial
base level of six by six levels because the loss was more than
$70,000 but less than $120,000, and by increasing that total by
two levels for more than minimal planning, resulting in a total
adjusted offense level of fourteen. Pursuant to U.S.S.G.
§ 3D1.4, the multiple-count adjustment, Hodge’s combined adjusted
base offense level was twenty-one. Based on this base offense
level and a criminal history category of I, the guidelines
7
suggested a range of thirty-seven to forty-six months of
imprisonment. Hodge received a sentence of thirty-seven months
of imprisonment to be followed by five years of supervised
release. The district court ordered Hodge to pay restitution in
the amount of $245,711.90 and a $50 special assessment for each
count of conviction. Hodge timely appealed, and the district
court granted his motion for a stay of imprisonment pending
appeal.
On appeal, Anderson argues that the evidence was
insufficient to support his conviction on counts one through
three. He also contends that the district court erred by
considering conduct other than the conduct charged in the
indictment for purposes of calculating Anderson’s base offense
level at sentencing. The PSR used losses stemming from this
other conduct to increase Anderson’s base offense level.
Finally, Anderson argues that the district court erred by failing
to enter any findings as to the contested issues of fact that
Anderson raised in his objections to the PSR.
Hodge similarly argues that the evidence was insufficient to
support his conviction on counts one through seven of the
indictment. He further argues that the district court erred by
failing to read the superseding indictment to the jury. He also
challenges his sentence, contending that he is entitled to a
downward adjustment for acceptance of responsibility, that the
loss attributable to him under the bank fraud counts should be
8
the actual, rather than the intended, loss to First National,
that he is entitled to a reduction for minor participant status,
and that evidence of other conduct should not have been
considered at sentencing for purposes of calculating his base
offense level.
II. DISCUSSION
A. Sufficiency of the Evidence
Both Anderson and Hodge argue that the evidence failed to
establish that they participated in a conspiracy as charged in
count one of the superseding indictment, or that they aided and
abetted in the commission of the substantive offenses of
transportation and sale of stolen goods in interstate commerce as
charged in counts two and three. Hodge additionally argues that
the evidence failed to demonstrate that he committed the offense
of bank fraud as charged in counts four through seven of the
superseding indictment.
Both defendants moved for acquittal at the close of the
government’s case and at the close of evidence. We review the
district court’s denial of defendants’ motions for acquittal de
novo, applying the same standards as the district court in
reviewing the sufficiency of the evidence. See United States v.
Payne, 99 F.3d 1273, 1278 (5th Cir. 1996). In determining
whether there was sufficient evidence to sustain defendants’
convictions, we must decide, viewing the evidence and the
9
inferences therefrom in the light most favorable to the verdict,
whether a rational juror could have found defendants guilty
beyond a reasonable doubt. See United States v. Burton, 126 F.3d
666, 669 (5th Cir. 1997); Payne, 99 F.3d at 1278. “‘The evidence
need not exclude every reasonable hypothesis of innocence or be
wholly inconsistent with every conclusion except that of guilt,
and the jury is free to choose among reasonable constructions of
the evidence.’" Burton, 126 F.3d at 669-70 (quoting United
States v. Bermea, 30 F.3d 1539, 1551 (5th Cir. 1994)); see United
States v. Bell, 678 F.2d 547, 549 (5th Cir. Unit B 1982) (en
banc), aff’d, 462 U.S. 356 (1983). Moreover, our standard of
review does not change if the evidence that sustains the
conviction is circumstantial rather than direct. See Burton, 126
F.3d at 670; United States v. Cardenas, 9 F.3d 1139, 1156 (5th
Cir.1993); Bell, 678 F.2d at 549 n.3.
To establish a conspiracy to transport and sell stolen goods
in interstate commerce, the government was required to prove (1)
an agreement between two or more persons, (2) to commit the
crimes, and (3) an overt act committed by one of the conspirators
in furtherance of the agreement. See Burton, 126 F.3d at 670.
Moreover, there must be proof beyond a reasonable doubt that “the
defendant[s] knew about the conspiracy and . . . voluntarily
became part of it.” United States v. Krenning, 93 F.3d 1257,
1264 (5th Cir. 1996) (internal quotation marks omitted).
10
To convict defendants of the transportation of stolen goods
in violation of 18 U.S.C. § 2314, the government was required to
show that defendants transported stolen goods in interstate
commerce, that defendants knew the goods were stolen, and that
the goods were worth more than $5000. See United States v.
Mackay, 33 F.3d 489, 493 (5th Cir. 1994). To convict defendants
of the sale of stolen goods in violation of 18 U.S.C. § 2315, the
government was required to show that defendants sold stolen
goods, that the goods were worth more than $5000 and had crossed
state lines after being stolen, and that defendants knew the
goods were stolen. See 18 U.S.C. § 2315. Because defendants
were charged with aiding and abetting the substantive offenses,
it was not necessary to prove that each defendant completed each
specific act charged in the indictment. See United States v.
Ismoila, 100 F.3d 380, 387 (5th Cir. 1996). The government must
prove, however, that the defendants shared the criminal intent
required for the substantive offenses. See id. Aiding and
abetting means simply that the defendants assisted a criminal
venture while sharing the requisite criminal intent, and took
some affirmative action to make the venture succeed. See id.;
United States v. Martiarena, 955 F.2d 363, 366 (5th Cir. 1992).
Mere presence and association are insufficient to sustain a
conviction for aiding and abetting. See Martiarena, 955 F.2d at
366.
11
Anderson argues that the evidence against him was tenuous
and could not have supported the jury’s verdict. He contends
that no evidence established an agreement between him and Garner
and Hodge to commit a crime. He argues that, in the case of the
Discus and WLS property, he paid Boler for the timber he had
contracted to cut, indicating at best that a mistake as to
boundaries had occurred. Similarly, Hodge argues that there was
no evidence showing that he was part of a conspiracy and that he
was merely harvesting timber pursuant to the instructions of
Anderson and Garner.
After reviewing the evidence in the light most favorable to
the verdict, we conclude that it was sufficient to sustain
Anderson’s and Hodge’s convictions on counts one through three.
The jury could have reasonably inferred from the evidence
presented that Garner and defendants entered into an agreement to
cut timber from Louisiana property without obtaining the
permission of the owners and then transport that stolen timber to
out-of-state mills to be sold. The jury was free to disbelieve
Anderson’s theory that a mistake as to boundaries had occurred
and free to believe Garner’s testimony that he and Anderson had
an understanding that timber on land adjacent to the land that
was the subject of their contracts would be cut. From this, the
jury was free to infer the existence of a conspiracy. The jury
was also free to infer Hodge’s participation in the conspiracy
from Garner’s testimony. Garner testified that he once informed
12
Hodge that Hodge was cutting on the wrong property, but Hodge
told Garner not to worry about it. Garner also testified that
Hodge informed Garner that he had left some timber uncut along a
particular road in order to hide the fact that timber had been
cut on the wrong property. Similarly, there was testimony that
Hodge’s crew continued to harvest timber on the Willamette
property for six weeks after being informed that they were on the
wrong tract. Thus, there is sufficient evidence to sustain
Anderson’s and Hodge’s convictions on counts one through three.
As to counts four through seven, Hodge maintains that the
evidence cannot support his conviction because he did not obtain
monetary funds from First National at the time of his loan
renewals, and because he later executed a substitution of
collateral agreement with the bank in lieu of the timber
initially pledged as collateral.
Bank fraud under 18 U.S.C. § 1344 involves, inter alia, the
knowing execution of a scheme or artifice to defraud a financial
institution. See United States v. Campbell, 64 F.3d 967, 975
(5th Cir. 1995). A scheme to defraud includes “the use of
fraudulent pretenses or representations intended to deceive to
obtain something of value from a financial institution.” Id.
Additionally, the defendant must have knowingly made a
misrepresentation to the bank.1 See id.
1
In United States v. Dupre, 117 F.3d 810, 815-16 (5th Cir.
1997), we declined to determine whether materiality is still an
13
After reviewing the evidence in the light most favorable to
the jury’s verdict, we conclude that there is sufficient evidence
to sustain Hodge’s conviction on counts four through seven.
Testimony established that at the time of each loan renewal Hodge
informed his loan officer that the timber serving as collateral
had not been cut, when in fact it had been cut, and that the loan
officer thereafter renewed the loan. The evidence is therefore
sufficient to establish that Hodge knowingly made a
misrepresentation that influenced the bank’s decision with the
intention of obtaining something of value from the bank--the use
of the bank’s money for longer than Hodge would have otherwise
been entitled to it. Cf. United States v. Dobbs, 63 F.3d 391,
395-96 (5th Cir. 1995) (finding evidence sufficient to sustain
bank fraud conviction where defendant sold collateral but did not
use proceeds to pay off loan, constituting a diversion of funds
belonging to the bank and establishing defendant’s intent to
defraud). That Hodge later substituted new collateral once he
was confronted with the missing collateral is irrelevant because
the crime was already completed.
B. Failure to Read Superseding Indictment to Jury
Hodge contends that the district court erred by failing to
require the reading of the superseding indictment to the jury.
element of 18 U.S.C. § 1344 in light of the Supreme Court’s
decision in United States v. Wells, 117 S. Ct. 921 (1997), which
held that materiality is not an element of 18 U.S.C. § 1014. We
need not decide that issue today, and decline to do so.
14
Hodge did not object to the failure to read the indictment at
trial. Thus, we review for plain error. See United States v.
Calverley, 37 F.3d 160, 162-64 (5th Cir. 1994) (en banc). Under
Federal Rule of Criminal Procedure 52(b), this court may correct
forfeited errors only where the appellant demonstrates (1) that
there is an error, (2) that the error is plain, and (3) that the
error affects the appellant’s substantial rights. See United
States v. Olano, 507 U.S. 725, 732-35 (1993). Even if these
factors are met, this court will correct a forfeited error only
if the error “seriously affect[s] the fairness, integrity or
public reputation of judicial proceedings.” Id. at 736 (internal
quotation marks omitted) (alteration in original).
Although the district court did not read the indictment to
the jury, the government had summarized the charges during voir
dire and explained the charges during its opening statement.
More importantly, the district court instructed the jury on each
element of the offenses charged, provided a copy of the
indictment to the jury at the conclusion of the trial for use in
their deliberations, and admonished the jury that the indictment
itself has no evidentiary value. Previously, we have held that
it is not error for a district court to fail to read the entire
indictment to the jury, but instead to instruct the jury to read
part of it themselves, where the district court had instructed
the jury that the indictment is not evidence. See United States
v. Sutherland, 656 F.2d 1181, 1202 (5th Cir. Unit A Sept. 1981);
15
United States v. Jones, 587 F.2d 802, 805-06 (5th Cir. 1979).
Additionally, courts have upheld the reading of summaries of the
indictment. See United States v. Rodriguez-Alvarado, 952 F.2d
586, 590 (1st Cir. 1991) (“The purpose of reading the indictment
is to inform the jury fairly of the charges against the
defendant. . . . There is no requirement that such information be
given by reading the whole, or even part, of the indictment.”)
(citation omitted). We conclude that the district court did not
plainly err by failing to read the superseding indictment to the
jury.
C. Sentencing
Hodge and Anderson each challenge their sentences on several
grounds. We review the district court’s findings of fact at
sentencing for clear error, and its application of the sentencing
guidelines de novo. See United States v. West, 58 F.3d 133, 137
(5th Cir. 1995).
Hodge contends that the district court erred by failing to
sustain his objection to his PSR’s use of the value of the
renewed loans, rather than the actual amount of the loss suffered
by First National, to calculate Hodge’s base offense level for
his bank fraud offenses. The four loans Hodge fraudulently
renewed totaled $92,369. Because the bank later sold collateral
substituted by Hodge, the actual loss to the bank was only
$42,309.58. Hodge’s argument lacks merit. Application note 7(b)
16
to U.S.S.G. § 2F1.1 provides that, in fraudulent loan application
cases, the intended loss should be used to calculate the base
offense level where it is greater than the actual loss. See U.S.
SENTENCING GUIDELINES MANUAL § 2F1.1 application note 7(b) (1997).
Moreover, because of the grouping provisions of U.S.S.G. § 3D1.4,
Hodge’s total base offense level would not change even had the
district court sustained his objection. Thus, the district court
did not err in adopting the intended loss in calculating Hodge’s
base offense level.
Hodge next contends that he was entitled to a two-level
decrease in his base offense level for acceptance of
responsibility because of the substitution of collateral
agreement he executed. The PSR recommended no adjustment for
acceptance of responsibility because Hodge denied his guilt and
put the government to its burden of proof at trial. Hodge
objected to this determination, admitting that he denied his
guilt, but contending that because he voluntarily cooperated with
First National in the sale of the substitute collateral he was
entitled to a § 3E1.1 adjustment. U.S.S.G. § 3E1.1 provides for
a two-level reduction “[i]f the defendant clearly demonstrates
acceptance of responsibility for his offense.” U.S. SENTENCING
GUIDELINES MANUAL § 3E1.1(a). Whether a defendant is entitled to a
downward adjustment for acceptance of responsibility is thus a
factual determination. We will affirm a sentencing court’s
decision not to award a reduction under U.S.S.G. § 3E1.1 unless
17
it is “without foundation,” a standard of review more deferential
than the clearly erroneous standard. United States v. Hooten,
933 F.2d 293, 297-98 (5th Cir. 1991) (internal quotation marks
omitted); see United States v. Kinder, 946 F.2d 362, 367 (5th
Cir. 1991). The district court’s conclusion that Hodge had not
accepted responsibility for his actions does not lack foundation.
Although Hodge did agree to substitute collateral, he waited
until after the bank discovered his disposal of the original
collateral. Moreover, he denied his guilt and forced the
government to prove its case at trial. We conclude that the
district court did not err by refusing to award Hodge a two-level
reduction for acceptance of responsibility.
Hodge next contends that the district court should have
awarded him a downward adjustment based on his minor role in the
timber theft conspiracy. Hodge claims that Anderson and Garner
received virtually all of the profits from the scheme, while he
received only a small fee based on the tonnage of logs hauled. A
minor participant is defined as “any participant who is less
culpable than most other participants, but whose role could not
be described as minimal.” U.S. SENTENCING GUIDELINES MANUAL § 3B1.2
application note 3. The PSR did not recommend a downward
departure pursuant to U.S.S.G. § 3B1.2, and Hodge made no
objection to this omission. Instead, the PSR recommended, and
the district court awarded, a four-level increase pursuant to
U.S.S.G. § 3B1.1(a) because Hodge was the organizer or leader of
18
a criminal activity involving five or more participants.2 Hodge
did object to this increase, but does not challenge it on appeal.
Because Hodge failed to raise before the district court his
argument for a two-level decrease for minor participant status,
our review is for plain error. See Calverley, 37 F.3d at 162-64.
We conclude that it was not plain error for the district court to
fail to decrease Hodge’s base offense level for minor participant
status in light of the fact that it awarded a four-level increase
for organizer or leader status pursuant to U.S.S.G. § 3B1.1(a).
See United States v. Thomas, 932 F.2d 1085, 1092 (5th Cir. 1991)
(“It is improper for a court to award a minor participation
adjustment simply because a defendant does less than the other
participants. Rather, the defendant must do enough less so that
he at best was peripheral to the advancement of the illicit
activity.”).
Finally, both Hodge and Anderson argue that the district
court erred in calculating the amount of loss attributable to
them, and thus their base offense levels, because the district
court included conduct not charged in the superseding indictment
as relevant conduct pursuant to U.S.S.G. § 1B1.3. They argue
that this conduct lacked a sufficient relationship to the other
conduct attributed to them for sentencing purposes. Both
defendants objected to their PSR’s inclusion of these incidents
2
The PSR included this adjustment because Hodge directed
his crew to cut timber that they were not authorized to cut.
19
as relevant conduct. The district court overruled their
objections and adopted the findings of the PSR.3 A district
court’s calculation of the amount of loss attributable to a
defendant at sentencing and its determination of what constitutes
relevant conduct are reviewed for clear error. See United States
v. Peterson, 101 F.3d 375, 384 (5th Cir. 1996).
The guidelines define “relevant conduct,” for offenses (such
as the instant offenses) for which U.S.S.G. § 3D1.2(d) would
require grouping of multiple counts, to include “all acts and
omissions . . . that were part of the same course of conduct or
common scheme or plan as the offense of conviction.” U.S.
SENTENCING GUIDELINES MANUAL § 1B1.3(a)(2). It is not necessary for
the defendant to have been charged with or convicted of carrying
out the other acts before they can be considered relevant
conduct. See United States v. Thomas, 969 F.2d 352, 355 (7th
Cir. 1992); United States v. Moore, 927 F.2d 825, 827 (5th Cir.
1991). However, for the acts to constitute relevant conduct, the
conduct must be criminal. See United States v. Powell, 124 F.3d
655, 665 (5th Cir. 1997); Peterson, 101 F.3d at 385. Two or more
offenses form part of a “common scheme or plan” where they are
3
Anderson also challenges the district court’s failure to
make specific factual findings. The district court implicitly
adopted the findings contained in the PSR and overruled
Anderson’s objections thereto, and thus did not need to reiterate
its specific factual findings. See United States v. Gaytan, 74
F.3d 545, 557 (5th Cir. 1996); United States v. Carreon, 11 F.3d
1225, 1230-31 (5th Cir. 1994); United States v. Mora, 994 F.2d
1129, 1141 (5th Cir. 1993).
20
“substantially connected to each other by at least one common
factor, such as common victims, common accomplices, common
purpose, or similar modus operandi.” U.S. SENTENCING GUIDELINES
MANUAL § 1B1.3 application note 9(A). “Offenses that do not
qualify as part of a common scheme or plan may nonetheless
qualify as part of the same course of conduct if they are
sufficiently connected or related to each other as to warrant the
conclusion that they are part of a single episode, spree, or
ongoing series of offenses.” Id. § 1B1.3 application note 9(B).
Relevant factors to consider in making this determination include
“the degree of similarity of the offenses, the regularity
(repetitions) of the offenses, and the time interval between the
offenses.” Id.; see United States v. Bethley, 973 F.2d 396, 401
(5th Cir. 1992) (“To qualify as relevant conduct, the prior
conduct must pass the test of similarity, regularity and temporal
proximity.”).
Hodge’s PSR included as relevant conduct the following four
incidents:
In 1990, Hodge met Hazel Jones, an absentee landowner, who
informed him that she owned property in East Texas and was
interested in having her timber cut. Hodge replied that he would
have a forester look over her property. Jones later met Hodge
and showed him the property. She then returned to California
where she waited to hear from Hodge. She never heard from Hodge
and never entered into a timber contract with him. At a later
21
date, a family member of Jones discovered that Hodge’s timber
crew was removing timber from Jones’s property. Hodge removed
approximately twenty-four acres of trees valued at approximately
$4100. Jones received no compensation from Hodge for the timber
he removed.
On October 14, 1993, Roger Niemann advised the sheriff’s
office that timber was being illegally removed from his property.
Hodge had entered into a timber contract with Harriet Ross, who
owned property adjacent to Niemann’s. At some point prior to
October 14, 1993, Hodge had begun removing timber from the
Niemann property. While removing the Niemann timber, sheriff’s
deputies confronted Hodge and told him to cease operations. Once
the deputies left, however, Hodge continued to harvest Niemann’s
timber, which was later transported to mills in Louisiana,
Arkansas, and Texas. The value of the Niemann timber totaled
approximately $42,138.77.
In 1990, Diane Sweet gave Hodge permission to cross her land
in order to get to an adjacent tract of land his crew was
cutting. She later observed that Hodge had damaged her property
and had taken 100 trees off her land. In 1994 and 1995, she
again found Hodge removing timber from her property. At no time
did Sweet have a contract with Hodge for the removal of timber.
Hodge has never compensated Sweet for the illegal removal of her
timber, the value of which was $25,000.
22
In May 1995, Charles Swift received a call from a friend who
asked him if he had sold some of his timber in Harrison County,
Texas. Swift responded that he had not. He then contacted local
authorities who went to Swift’s land. Upon arriving, officers
observed equipment belonging to Hodge’s company, Circle H Timber.
Between May 15, 1995 and May 17, 1995, Hodge had illegally
harvested and transported at least 708 tons of timber to six
mills located in Texas and Louisiana. The value of the timber
totaled approximately $32,878.
The PSR calculated the loss amount attributable to Hodge by
adding the loss that directly resulted from the offense of
conviction ($103,797.33) to the loss that resulted from the above
four incidents ($104,116.77), for a total combined loss of
$207,914.10. This amount resulted in an increase to Hodge’s base
offense level of ten levels pursuant to U.S.S.G.
§ 2B1.1(b)(1)(K).
Hodge argues that there was an insufficient temporal and
locational relationship between the incidents described above and
the conduct charged in the superseding indictment. The district
court adopted the reasoning of the PSR, which concluded that all
the conduct attributable to Hodge formed part of a common scheme
or plan because there existed a common purpose and similar modus
operandi. See U.S. SENTENCING GUIDELINES MANUAL § 1B1.3 application
note 9(A). The common purpose was the illegal removal and sale
of timber that did not belong to Hodge. The similar modus
23
operandi involved removing timber from land belonging to absentee
landowners who would be less likely to discover the removal, and
removing timber from land adjacent to land containing timber that
Hodge had permission to harvest. Although the incidents occurred
over a period of several years, there is “no separate statute of
limitations beyond which relevant conduct suddenly becomes
irrelevant.” Moore, 927 F.2d at 828. Moreover, the incidents
occurred regularly over this period, with the last one occurring
a mere nine months before the events alleged in the superseding
indictment. There is “sufficient similarity and temporal
proximity to reasonably suggest that repeated instances of
criminal behavior constitute a pattern of criminal conduct.”
Bethley, 973 F.2d at 401 (internal quotation marks omitted). We
conclude that the district court did not clearly err in finding
that the above incidents were sufficiently connected to the
offense conduct to constitute relevant conduct for purposes of
§ 1B1.3(a)(2).4
4
Hodge relies on United States v. Madkins, 14 F.3d 277,
279 (5th Cir. 1994), for the proposition that “conduct occurring
before the defendant joined the conspiracy typically cannot be
included in the relevant conduct inquiry.” Based on this
proposition, Hodge argues that conduct occurring before February
1996, the beginning of the conspiracy alleged in the superseding
indictment, cannot be attributed to him for sentencing purposes.
This argument lacks merit. In Madkins, the issue was whether to
attribute to the defendant the reasonably foreseeable conduct of
co-conspirators pursuant to U.S.S.G. § 1B1.3(a)(1)(B). The
relevant conduct attributed to Hodge, however, was his own
conduct, and the applicable guidelines provisions are U.S.S.G.
§ 1B1.3(a)(2) and U.S.S.G. § 1B1.3(a)(1)(A). Thus, Madkins is
inapposite.
24
Anderson makes an argument similar to Hodge’s, challenging
the relevant conduct attributed to him pursuant to § 1B1.3(a)(2).
Anderson’s PSR set forth the following ten incidents of relevant
conduct:
In February 1993, Oprea Anderson entered into a timber-
cutting agreement with Treetop Timber Company to harvest timber
on her property for $3000. On March 17, 1994, defendant Anderson
and his partner purchased the contract for $500. Anderson then
harvested the timber without his partner’s knowledge but never
compensated Mrs. Anderson, who suffered losses amounting to
$3000.
In 1993, Elizabeth Clark and Gerry Ray entered into an
agreement with Treetop Timber Company to harvest timber on their
property for $50,000. On March 8, 1994, Anderson and a partner
purchased the contract for $3,069.08. Without his partner’s
knowledge, Anderson harvested part of the timber. Clark and Ray
received partial payment but were never fully compensated. As a
result, they suffered losses totaling $46,500.
In April 1994, Kyle Bradley entered into an agreement with
Anderson in which Anderson agreed to haul timber on Bradley’s
property to a mill in Oklahoma. During a three-week period in
July 1994, Anderson took 2000 tons of timber valued at $82,000
from the property of Bradley, Bradley’s father, and two private
landowners under contract with Bradley. Bradley compensated the
private landowners, but never received compensation from
25
Anderson. According to the PSR, Anderson was indicted for theft
as a result of his actions and Bradley obtained a civil judgment
against him in the amount of $84,859.70.
In January 1995, Margaret Falsone contracted with Tree South
Land and Timber Company to harvest timber on her property for
$30,000. Anderson later purchased the contract and harvested the
timber. Falsone received only $1,841.63 from Anderson, resulting
in a loss of $28,158.37.
In January 1995, Donna and Helen Anderson entered into a
timber contract with Tree South Land and Timber Company to
harvest timber on their property. Anderson later purchased the
contract and harvested the timber. In June 1995, Helen Anderson
inspected the property and discovered damage, including litter
strewn about the property and damage to the fences and gates.
Although Donna and Helen Anderson received checks totaling
$8,187.51 and $2,047.03, respectively, from Anderson, they claim
to have suffered losses totaling $20,000.
In March 1995, Loren Griswold contracted with Tree South
Land and Timber Company to remove a portion of the timber on his
property for $5000. Anderson purchased the contract and
harvested all the timber on the property, which was valued at
$12,000. Anderson also cut approximately fifty feet onto a
neighbor’s property. Anderson paid Griswold $3,398.33. Griswold
suffered losses totaling $8602.
26
In May 1995, John Rummel entered into an agreement with Tree
South Land and Timber Company to harvest a portion of the timber
on his property for $4000. Anderson purchased the contract and
harvested the timber. Rummel later visited the property to find
that the timber had been harvested and the land extensively
damaged. Anderson paid Rummel $478.32, resulting in a loss to
Rummel of $3600.
In May 1995, Victor Weber contracted with Tree South Land
and Timber Company to harvest a portion of timber on his property
for $28,000. Anderson purchased the contract and harvested the
timber. Anderson paid Weber only $4524, resulting in a loss to
Weber of $23,476.
In 1995, Elmer Peebles contracted with Anderson to harvest
timber on his property. Anderson harvested the timber specified
in the contract, and also harvested additional timber. Peebles
suffered losses amounting to $5500.
In April 1997, John Clopton received a letter from Anderson
stating that Anderson had cut timber on forty acres of Clopton’s
land. Clopton informed Anderson that he was one of fifteen
owners of the property in question and that he was unaware of any
agreement to harvest timber on the land. Anderson responded that
Christopher Garner had procured the original timber cutting
agreement in February 1996 and assigned it to Anderson. Anderson
provided a copy of the agreement which contained the forged
signatures of Clopton and his aunt. Clopton advised Anderson
27
that he had never met Christopher Garner. Eventually, Clopton
and Anderson reached an agreement whereby Anderson would pay the
property owners $25,000 for the harvested timber and would
replant the tract of land at an additional cost of $4800.
Anderson failed to make any payments, resulting in a loss to
Clopton of $29,800.
The PSR calculated the loss amount attributable to Anderson
by adding the loss that directly resulted from the offense of
conviction ($103,797.33) to the loss that resulted from the
above-described incidents ($253,496.07), for a total combined
loss of $357,293.40. This amount resulted in an increase to
Anderson’s base offense level of eleven levels pursuant to
U.S.S.G. § 2B1.1(b)(1)(L).
We conclude that the district court clearly erred by
including the incident involving Donna and Helen Anderson as
relevant conduct for purposes of calculating Anderson’s base
offense level because, at least on the record before us, this
incident involved only property damage and implicated no criminal
conduct. Moreover, it is not clear from the record that many of
the other incidents described above involve criminal conduct.
Anderson argues that they involve mere contract disputes--
situations where Anderson did not make the full amount of the
payment called for by the contract. Only the incidents involving
Bradley, Griswold, Peebles, and Clopton on their face and without
further inquiry involve criminal conduct.
28
As to the remainder of the incidents, the record on appeal
is conspicuously devoid of citations to state or federal law that
would confirm the criminal nature of Anderson’s conduct. The
PSR, the transcript of Anderson’s sentencing, and the
government’s appellate brief are all silent on this point.
Because Anderson’s base offense level decreases once the
incident involving Donna and Helen Anderson is removed from
consideration, we vacate Anderson’s sentence and remand for
resentencing.5 On remand, we direct the district court to make
specific findings as to the criminal nature and the relevancy of
each incident it includes as relevant conduct. See Peterson, 101
F.3d at 385 (remanding for resentencing so that district court
could determine whether losses attributed to defendant resulted
from criminal conduct).
III. CONCLUSION
For the foregoing reasons, we AFFIRM Hodge’s conviction and
sentence. We AFFIRM Anderson’s conviction, but VACATE his
sentence, and REMAND to the district court for resentencing
pursuant to our instructions.
5
Subtracting the loss derived from the incident involving
Donna and Helen Anderson ($20,000) from the total loss inflicted
by Anderson ($357,293.40), results in a one-level decrease to
Anderson’s base offense level pursuant to U.S.S.G.
§ 2B1.1(b)(1)(K).
29