United States v. Kenneth Brown , 727 F.3d 329 ( 2013 )

Case: 12-10592 Document: 00512309422 Page: 1 Date Filed: 07/16/2013
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
July 16, 2013
No. 12-10592 Lyle W. Cayce
Clerk
UNITED STATES OF AMERICA,
Plaintiff - Appellee
v.
KENNETH WAYNE BROWN; LEAH MICHELE BROWN,
Defendants - Appellants
Appeals from the United States District Court
for the Northern District of Texas
Before ELROD and HIGGINSON, Circuit Judges, and MARTINEZ, District
Judge.*
HIGGINSON, Circuit Judge:
In this direct appeal, Kenneth and Leah Brown challenge the sufficiency
of the evidence supporting their federal jury trial convictions for conspiracy to
commit theft from a program receiving federal funds, as well as the procedural
and substantive reasonableness of their within-Guidelines sentences.
Concluding that the evidence is sufficient to support their convictions, and that
their sentences are procedurally and substantively reasonable, we AFFIRM.
*
District Judge of the Western District of Texas, sitting by designation.
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BACKGROUND
Kenneth and Leah Brown were charged in a single-count superseding
indictment with conspiracy to commit theft from a program receiving federal
funds, in violation of 18 U.S.C. §§ 371, 666(a)(1)(A). The indictment alleged that
the Browns conspired with Patricia Leathers and others to defraud the City of
Garland, Texas. Between 1999 and 2008, Leathers worked as an in-house
property and casualty claims adjuster for the City of Garland. In that capacity,
Leathers was responsible for investigating claims for property damage against
the City, evaluating the City’s liability, and negotiating claim settlements.
During that period, Leathers used her position to prepare false claims and to
direct the City to issue settlement checks for up to $10,000, the ceiling of her
authority to settle claims and authorize disbursements without supervisory
approval. By the time the conspiracy was detected, Leathers had issued checks
for hundreds of fraudulent claims resulting in a loss to the City of approximately
$1.9 million.
The indictment details that the Browns facilitated the check-cashing
scheme by submitting false insurance claims to the City of Garland for
reimbursement; fraudulently obtaining checks issued by the City of Garland and
made payable to Kenneth Brown, Leah Brown, and their friends and relatives;
endorsing the checks; cashing the checks or depositing them at banks where the
defendants or their co-conspirators held accounts; and sharing the proceeds. The
indictment specifically alleges that Leah Brown endorsed her name on the back
of two checks, totaling $11,275, and that “at least fourteen checks totaling more
than $102,000.00 were endorsed and negotiated by Kenneth Brown.” The
Browns pleaded not guilty to the indictment and proceeded to a jury trial.
The trial lasted four days. The government called fourteen witnesses in
its case-in-chief: Robby Neill, the risk manager for the City of Garland; Steven
Anderson, the accounting manager for the City of Garland; Matt Ladis, a
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detective for the Garland Police Department; Sheila Powell, an auditor for the
United States Attorney’s Office for the Northern District of Texas; Beth Huntley,
a forensic accountant with the Federal Bureau of Investigation (“FBI”); Jennifer
Mullican, a Special Agent with the FBI; and Jerry Diviney, Melissa Williams,
Mark Enloe, Joshua Clay, Duane Stailey, Angie Smith, Crystal Thompson, and
Brent Estep, co-conspirators and others involved in the check-cashing scheme.
The defense did not call any witnesses. The jury returned guilty verdicts against
both defendants on the sole count charged.
The district court sentenced the Browns together in a joint hearing. The
court sentenced Kenneth Brown to forty-two months of imprisonment, the
midpoint of his Guideline range, followed by two years of supervised release.
The court sentenced Leah Brown to thirty-four months of imprisonment, the
midpoint of her Guideline range, followed by two years of supervised release.
Additionally, the court ordered both defendants to pay restitution to the City of
Garland, for which they are jointly and severally liable with their
co-conspirators. The Browns filed timely notices of appeal.
DISCUSSION
The Browns argue on appeal that the evidence was insufficient to support
their convictions for conspiracy to commit theft from a federally funded program
and that their sentences are procedurally and substantively unreasonable.
I. Sufficiency challenges
The Browns were convicted of a single count of conspiracy to commit theft
from a program receiving federal funds. The substantive offense of theft from
a program receiving federal funds makes it a crime for an “agent” of an
“organization,” “government,” or “agency” that “receives, in any one year period,
benefits in excess of $10,000 under a Federal program,” to embezzle, steal,
obtain by fraud, or otherwise without authority knowingly convert or
intentionally misapply “property” “that is valued at $5,000 or more” and “is
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owned by, or is under the care, custody, or control of such organization,
government, or agency.” 18 U.S.C. § 666(a)–(b); Fifth Circuit Pattern Jury
Instructions (Criminal Cases) § 2.37A (2012); United States v. Ollison, 555 F.3d
152, 159 (5th Cir. 2009). “In short, . . . there must be an individual who acts as
an agent of an organization, the individual must have unlawfully obtained funds
from this organization, and the organization must receive over $10,000 in federal
funds in any one year period.” United States v. Abu-Shawish, 507 F.3d 550, 556
(7th Cir. 2007).
To obtain convictions against Kenneth and Leah Brown for conspiracy to
commit that offense, the government was required to prove beyond a reasonable
doubt that each of the Browns entered into an agreement with at least one other
person to commit theft from a program receiving federal funds, knowing the
purpose of the agreement and joining in it willfully, and one of the conspirators
knowingly committed an overt act in furtherance of the conspiracy. 18 U.S.C. §
371; Fifth Circuit Pattern Jury Instructions (Criminal Cases) § 2.20 (2012);
United States v. Read, 710 F.3d 219, 226 (5th Cir. 2012) (per curiam).
On appeal, the Browns contend that the evidence adduced at trial was
insufficient to support their convictions. Specifically, they argue that the
government failed to establish the “federal funds,” “nexus,” and “knowledge”
elements. See discussion infra Parts I.A, I.B, I.C. Our standard of review of
those challenges hinges on whether they were properly preserved.
At the close of the government’s case-in-chief, counsel for Kenneth Brown
and counsel for Leah Brown separately moved for judgment of acquittal under
Federal Rule of Criminal Procedure 29(a). Kenneth Brown “move[d] for
judgment of acquittal on the grounds that there is insufficient evidence to
establish the elements of knowingly and willfully.” Leah Brown began by
specifically challenging the knowledge element—“we move for a judgment of
acquittal on behalf of Ms. Leah Brown on the grounds that there’s insufficient
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evidence of intentionally, knowingly, willfully”—but went on to challenge, more
broadly, that “the Government has wholly failed to establish all of the elements
necessary for conviction under conspiracy.” The district court denied both
motions.
Kenneth Brown specifically preserved his sufficiency challenge to the
knowledge element by filing a timely motion for judgment of acquittal, and,
accordingly, our review of that challenge is de novo. Read, 710 F.3d at 226. But
because he asserted “specific grounds for a specific element of a specific count for
a Rule 29 motion,” Kenneth Brown failed to preserve sufficiency challenges to
the “federal funds” and “nexus” elements, United States v. Herrera, 313 F.3d 882,
884 (5th Cir. 2002) (en banc) (per curiam); accordingly, our sufficiency review of
those elements is for “manifest miscarriage of justice,” United States v.
McDowell, 498 F.3d 308, 312 (5th Cir. 2007). Leah Brown, by contrast, objected
that the government failed to establish all of the elements of the conspiracy
offense. Because a general challenge to the sufficiency of the evidence preserves
de novo review as to all potential sufficiency issues, our review of her challenge
to each of the elements of the offense is de novo. See Herrera, 313 F.3d at 885 n.*
(ruling that a defendant who “chose to make a quite specific, not a general,
motion for judgment of acquittal” did not preserve his sufficiency objection as to
all elements of the crime).
In reviewing de novo the sufficiency of the evidence, we ask whether “any
rational trier of fact could have found the essential elements of the crime beyond
a reasonable doubt.” United States v. Cooper, 714 F.3d 873, 880 (5th Cir. 2013)
(quoting Jackson v. Virginia, 443 U.S. 307, 319 (1979)). In reviewing for
manifest miscarriage of justice, we assess whether “the record is devoid of
evidence pointing to guilt,” or “the evidence on a key element of the offense is so
tenuous that a conviction would be shocking.” McDowell, 498 F.3d at 312(internal quotation marks omitted). Under both standards, “we consider the
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evidence in the light most favorable to the government, giving the government
the benefit of all reasonable inferences and credibility choices.” Id. (internal
quotation marks omitted). Where, as here, the evidence satisfies the less
searching Jackson standard, it follows that there has been no manifest
miscarriage of justice.
A. Federal funds element
The federal funds element requires that “the organization, government,
or agency receives, in any one year period, benefits in excess of $10,000 under
a Federal program involving a grant, contract, subsidy, loan, guarantee,
insurance, or other form of Federal assistance.” 18 U.S.C. § 666(b). To prove this
element, the government elicited testimony from Steven Anderson, the accounting
manager for the City of Garland. He testified, in relevant part, as follows:
Counsel: And as part of the funding for the City of Garland, does
the City also receive assistance from the federal
government?
Anderson: Yes, we do.
Counsel: Specifically from the years 1998 and each successive
12-month period until the year 2008, did the City of
Garland receive more than $10,000 each one of those
years?
Anderson: Yes, we did.
The Browns assert that this testimony, without corroborating documentary
evidence, is insufficient to establish that the City of Garland received a
minimum of $10,000 in federal funds during the period of the conspiracy. The
government responds that “unchallenged testimony from a person highly
knowledgeable about and responsible for the city’s funding sources easily defeats
the [Browns’] challenge to this element.”
Both sides agree that United States v. Jackson, 313 F.3d 231 (5th Cir.
2002), is the closest case on point. In Jackson, as here, the defendants were
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convicted of conspiracy to commit theft from a program receiving federal funds
and challenged on direct appeal the sufficiency of the evidence supporting the
federal funds element. Id. at 233. To prove this element, the government offered
testimony from the City of Monroe’s director of administration that the City
received federal grants in the amount of $12,900 and $10,090 for the Louisiana
Folk Life Festival. Id. at 234. Countervailing testimony was offered by the
director of the Louisiana Folk Life Festival, which, together with supporting
documentation, “demonstrated unequivocally that the $12,900 funding came
from the Northeast Louisiana Arts Council (NELAC)” and that the second grant
“was from the Louisiana Endowment for the Humanities (LEH)—not [the
National Endowment for the Humanities].” Id. at 234–35. Considered in total,
the evidence “support[ed] an inference that the City received some funding
indirectly from [] federal sources,” id. at 235 (emphasis added), but it was
uncertain “how much of the grants from local or state agencies were of federal
origin, and when such funds were received,” id. at 235, 235–38. Accordingly, the
court concluded, there was insufficient evidence from which the jury reasonably
could infer—instead of speculate—that at least $10,000 of the funds came from
federal sources and was received in the calendar years charged. Id. at 238.
The evidence in this case reveals no such uncertainty. The government
established that Anderson, the City’s accounting manager for the previous two
decades, was well informed about the City’s finances, accounts, and sources of
funding. After clarifying his basis of knowledge, Anderson testified without
equivocation that in each of the charged years, Garland received more than
$10,000 in federal funding. The defendants did not cross-examine him on this
point or offer evidence or argument rebutting it or calling it into question.
The Browns’ argument, therefore, reduces to a single contention: that
testimony not corroborated by documentary evidence is insufficient as a matter
of law to prove the federal funds element. Jackson does not stand for that
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proposition, and defendants have not alerted us to any case that does. To the
contrary, other courts have affirmed § 666 convictions against sufficiency
challenges where, as here, proof of the federal funds element was established
through unchallenged testimonial evidence without corroborating documentary
evidence. See United States v. Robinson, 663 F.3d 265, 270 (11th Cir. 2011)
(evidence “easily” sufficient where director of grants for Chicago Police
Department testified that Chicago received a federal grant in the amount of $4.2
million); United States v. Baldridge, 559 F.3d 1126, 1133, 1138–39 (10th Cir.
2009) (evidence sufficient where “[t]wo individuals testified that for the fiscal
year ending June 30, 2005, Rogers County received . . . a total of $685,464.97”
in federal funds); United States v. Kranovich, 401 F.3d 1107, 1112–13 (9th Cir.
2005) (evidence sufficient where police sergeant testified that county had been
approved for a federal grant of $12,775). We agree that “[a]lthough the
government could have easily produced documentation to establish the amount
of federal funding, its failure to do so does not preclude a reasonable juror from
finding that this jurisdictional qualification was satisfied.”1 United States v.
McAllister, 141 F.3d 1181, at *1 (9th Cir. 1998) (unpublished); see also Robinson,
663 F.3d at 270; Baldridge, 559 F.3d at 1133, 1138–39; Kranovich, 401 F.3d at1112–13.
B. Nexus element
The crime of theft from a program receiving federal funds requires a
“nexus between the criminal conduct and the [organization, government, or]
1
While we conclude that the testimonial evidence here was adequate, we have stressed
in the past—and continue to stress today—that it is best practice for the government to
provide documentary evidence to corroborate that the amount of federal funds received
satisfied the $10,000 threshold under 18 U.S.C. § 666(b). See Jackson, 313 F.3d at 238(emphasizing, when the government did not provide “a single record reference to suggest how
much of the $11,500 was of federal origin[,]” that “[t]o meet its burden of presenting evidence
from which a jury might properly find an element of a crime proved beyond a reasonable
doubt, the government must present more than a mere scintilla of evidence”).
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agency receiving federal assistance.” United States v. Whitfield, 590 F.3d 325,
345 (5th Cir. 2009); United States v. Phillips, 219 F.3d 404, 413–14 (5th Cir.
2000) (emphasis omitted); United States v. Moeller, 987 F.2d 1134, 1137 (5th Cir.
1993) (citation omitted); see also 18 U.S.C. § 666 (requiring that the property at
issue be “owned by” or “under the care, custody, or control of” an “organization,
government, or agency” that “receives, in any one year period, benefits in excess
of $10,000 under a Federal program”).
The Browns argue that the prosecution did not carry its burden of proving
the nexus element because the evidence allows for the possibility that the City had
a separate account into which federal funds were deposited and over which
Leathers had no control. Assuming arguendo that this challenge was properly
briefed, it is unavailing. Although the prosecution bears the burden of proving
each element of a crime beyond a reasonable doubt, In re Winship, 397 U.S. 358,
361–64 (1970), it is not required “to exclude every reasonable hypothesis of
innocence; the jury is free to choose among reasonable interpretations of the
evidence,” United States v. Perrien, 274 F.3d 936, 939–40 (5th Cir. 2001). Thus,
the government was not required to offer evidence disproving the existence of a
hypothetical separate account into which federal funds could have been deposited
and over which Leathers might have had no control. See Perrien, 274 F.3d at939–40; United States v. Guanespen-Portillo, 514 F.3d 393, 397 (5th Cir. 2008)
(rejecting defendants’ sufficiency challenge that “the evidence does not exclude the
possibility that there was another group in the area at the same time of their
arrest”).
The Browns argue also that the required nexus is absent because “the
money that was used to pay the claims was generated from tax revenue, utility
revenue, miscellaneous fees and permits.” Assuming arguendo the Browns did
not disclaim this challenge during oral argument, it, too, falls short. The
Supreme Court has held, and we have reiterated, that the required nexus is not
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between the property and the federal funding, but between the criminal conduct
and the organization, government, or agency receiving federal assistance. See
Salinas v. United States, 522 U.S. 52, 56–57 (1997) (“The enactment’s expansive,
unqualified language, both as to the bribes forbidden and the entities covered,
does not support the interpretation that federal funds must be affected to violate
§ 666(a)(1)(B).”); Whitfield, 590 F.3d at 345 (“[S]o long as there is a nexus
between the criminal conduct and the agency, the lack of a direct connection
between the . . . funds under the judges’ control and the federal funds in question
does not preclude them from being considered agents of the [Administrative
Office of the Courts] for the purposes of section 666.”) (internal quotation marks
and citation omitted); Phillips, 219 F.3d at 413–14 (“[A]lthough the conduct
prohibited by section 666 need not actually affect the federal funds received by
the agency, there must be some nexus between the criminal conduct and the
agency receiving federal assistance.”) (emphasis omitted) (quoting Moeller, 987
F.2d at 1137). The property at issue—here, City funds—“need not be purely
federal, nor must the conduct in question have a direct effect on federal funds.
The statute possibly can reach misuse of virtually all funds of [a local
government],” as long as the government received the requisite federal funding
and the agent involved “was authorized to act on behalf of the [government] with
respect to its funds.” Phillips, 219 F.3d at 411. The prosecution established with
competent evidence, and the Browns did not offer rebuttal evidence challenging,
that (1) Leathers was an agent of the City of Garland, a local government
receiving the required amount of federal funding, (2) Leathers was authorized
to act on behalf of the City with respect to its funds, and (3) the check-cashing
scheme she orchestrated and the Browns facilitated resulted in the loss of more
than $1 million in City funds. Consequently, it was reasonable for the jury to
conclude from the evidence presented that the government proved the requisite
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nexus beyond a reasonable doubt. See Salinas, 522 U.S. at 56–57; Whitfield, 590
F.3d at 345; Phillips, 219 F.3d at 413–14; Moeller, 987 F.2d at 1137.
C. Knowledge element
To prove a federal conspiracy offense, the government must establish, inter
alia, “the defendant’s knowledge of the unlawful objective and voluntary
agreement to join the conspiracy.” United States v. Arledge, 553 F.3d 881, 888
(5th Cir. 2008). As the district court instructed the jury:
Mere presence . . . at the scene of an event, even with knowledge
that a crime is being committed, or the mere fact that certain
persons may have associated with each other, and may have
assembled together and discussed common aims and interests, does
not necessarily establish proof of the existence of a conspiracy. Also,
a person who has no knowledge of a conspiracy, but who happens to
act in a way that advances some purpose of a conspiracy, does not
thereby become a conspirator.
But “[a] person may be guilty as a co-conspirator even if he plays only a minor
role, and he need not know all the details of the unlawful enterprise or know the
exact number or identity of all the co-conspirators, so long as he knowingly
participates in some fashion in the larger objectives of the conspiracy.” United
States v. Westbrook, 119 F.3d 1176, 1189 (5th Cir. 1997). “[V]oluntary
participation may be inferred from a collocation of circumstances, and knowledge
may be inferred from surrounding circumstances.” United States v. Lucas, 516
F.3d 316, 342 (5th Cir. 2008). “Once the government has produced evidence of
an illegal conspiracy, it need only introduce ‘slight evidence’ to connect an
individual defendant to the common scheme.” Westbrook, 119 F.3d at 1189–90.
1. Kenneth Brown
Kenneth Brown claims that “[t]here was no evidence that [he] had any
knowledge of the scheme that was created by Pat Leathers, Melissa Williams[,]
or Jerry Diviney” and that “Diviney and Williams were unequivocal in their
testimony that they did not tell [Kenneth] what the checks were for.”
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We conclude, to the contrary, that the jury’s finding that Brown was aware
of the unlawful nature of the check-cashing scheme and knowingly joined it was
well supported by the evidence. At trial, FBI Special Agent Jennifer Mullican
testified that Brown admitted to her that he had cashed three fraudulent checks
issued in his name. There is no evidence that Brown had, or believed he had, a
legitimate claim against the City; indeed, Brown admitted to Mullican that “he
felt that they were doing something wrong so he asked Mr. Diviney to stop
having checks issued in his name.” That did not stop Brown from cashing checks
payable to individuals with whom he was well acquainted and taking his share
of the proceeds. Jerry Diviney, a co-conspirator, testified that when other
individuals got “cold feet”—evidence that the scheme’s illegality was
apparent—Brown agreed to cash checks made out to them and was paid
$300–$500 for each check cashed. The government introduced into evidence
more than a dozen such checks. Thus, it was reasonable for the jury to infer
from the above evidence that Brown knew the purpose of the check-cashing
scheme and joined it willfully. See United States v. Fernandez, 559 F.3d 303, 322
(5th Cir. 2009) (explaining that the defendant’s “presence and association is part
of the circumstantial evidence that she voluntarily joined the conspiracy,”
notwithstanding her comparatively minor role); United States v. Nguyen, 504
F.3d 561, 570 (5th Cir. 2007) (holding that jury could reasonably conclude from
the surrounding circumstances that the defendant knew that a property
transaction was illegal, even though she did not structure the transaction or play
a role in selling the property, where she voluntarily participated by writing
checks and distributing the proceeds).
2. Leah Brown
The same is true for Leah Brown. The government introduced into
evidence two Garland checks totaling more than $11,000 signed by, and made
payable to, Leah Brown. Jerry Diviney testified that Brown cashed those
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checks, even though she, like her husband, had no legitimate claim against the
City. Diviney testified also that he gave Brown a share of the proceeds of the
checks she cashed, and that, upon his request, Brown successfully recruited
other individuals, including many family members, to take part in the scheme.
Evidence that Brown personally cashed fraudulent checks, received a share of
the proceeds, and recruited others to take part supports the jury’s finding that
she knew the purpose of the check-cashing scheme and joined it willfully. See
United States v. Curtis, 635 F.3d 704, 719–20 (5th Cir. 2011) (finding
circumstantial evidence sufficient to establish knowing and willful participation
in conspiracy where defendant recruited others and shared in the proceeds);
United States v. Luke, 152 F. App’x 412, 413–14 (5th Cir. 2005) (per curiam)
(unpublished) (affirming conviction for conspiracy against sufficiency challenge
where defendant cashed fraudulent checks and shared in the proceeds); United
States v. Ismoila, 100 F.3d 380, 389 (5th Cir. 1996) (holding that circumstantial
evidence established defendant’s “role in the illegal scheme was not limited to her
marital relationship” with a co-conspirator).
II. Sentencing challenges
The Browns next challenge the procedural and substantive reasonableness
of their within-Guidelines sentences. Because the Browns preserved these
challenges by filing objections to the PSR and renewing their objections during
sentencing, we review the district court’s interpretations of the Guidelines de
novo, and the district court’s findings of fact for clear error. United States v. Le,
512 F.3d 128, 134 (5th Cir. 2007).
A. Procedural reasonableness
The Browns contend that the district court made two procedural errors at
sentencing. First, they claim that the court erroneously applied a three-level
enhancement for their managerial roles in the offense. Second, they assert that
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the court attributed to them amounts of monetary loss for which they not are
responsible.
1. Managerial role enhancement
The Guidelines provide for a three-level increase to a defendant’s base-
offense level “[i]f the defendant was a manager or supervisor (but not an
organizer or leader) and the criminal activity involved five or more participants
or was otherwise extensive.” U.S.S.G. § 3B1.1(b). The district court applied this
enhancement on the basis of its finding that the Browns assumed “a supervisory
role” in the check-cashing scheme by providing the names of new payees and
recruiting others to cash checks. We will affirm the district court’s application
of the managerial role enhancement “if it is plausible in light of the record read
as a whole,” United States v. Nava, 624 F.3d 226, 229 (5th Cir. 2010), and will
reverse “only if, based on the entire evidence, [we are] left with the definite and
firm conviction that a mistake has been committed,” United States v. Rose, 449
F.3d 627, 633 (5th Cir. 2006).
The Browns argue that they were not managers or supervisors of the
scheme because, according to them, they did not “engage in decision-making
authority on how the scheme was devised or carried out”, “recruit accomplices”,
or “have a large share of the profits.” Their only role, they contend, was to cash
checks.
We agree that the Browns were not the ones who conceived of or
principally orchestrated the check-cashing scheme, but their role was not so
minimal as to disqualify them for the three-level “manager or supervisor”
enhancement applied by the district court. The district court found at
sentencing that the Browns “recruited others to act as persons who would cash
checks.” That finding is supported by Jerry Diviney’s trial testimony that Leah
Brown gave him “family or friends’ names who were people willing to cash City
of Garland checks,” by Mark Enloe’s trial testimony that he could not remember
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whether Diviney or Kenneth Brown recruited him to cash a check, and by
evidence that family, friends, and co-workers of the Browns who had no other
connection to Diviney or his daughter, Melissa Williams, ultimately become
involved in the scheme. That finding is not disproved by the Browns’ testimony
at sentencing that they did not recruit others; the district court was well
positioned to evaluate their credibility and was entitled to reject their testimony
as self-serving and inconsistent with the balance of the evidence presented. See
United States v. Sotelo, 97 F.3d 782, 799 (5th Cir. 1996).
The district court’s conclusion that the managerial role enhancement was
therefore warranted is not implausible in light of the evidence as a whole,
Guidelines commentary that “the recruitment of accomplices” is one factor
“court[s] should consider,” § 3B1.1(b) cmt. n.4, and our precedent affirming role
enhancements for similar conduct, see United States v. Liu, 960 F.2d 449, 456 (5th
Cir. 1992) (finding no clear error in district court’s application of “manager or
supervisor” enhancement to defendant responsible for finding accomplices to join,
and customers to fund, an immigration fraud scheme); see also United States v.
Ramcharan, 83 F. App’x 667, 671 (5th Cir. 2003) (per curiam) (unpublished)
(finding no clear error in district court’s application of “manager or supervisor”
enhancement where the defendant recruited family members to join an insurance
fraud conspiracy and directed them in the filing of fraudulent claims).
2. Loss calculation
The Guidelines “create[] a sliding scale that increases the defendant’s base
offense level by zero to thirty [levels] depending on the amount of [actual or
intended] loss.” United States v. John, 597 F.3d 263, 279 (5th Cir. 2010) (citing
U.S.S.G. § 2B1.1(b)(1)). They provide for a ten-level increase if the offense
results in a loss of more than $120,000 but less than $200,000, U.S.S.G. §
2B1.1(b)(1)(F); and a twelve-level increase if the offense results in a loss of more
$200,000 but less than $400,000, U.S.S.G. § 2B1.1(b)(1)(G). The district court
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adopted the PSR’s calculation that Kenneth Brown was responsible for a
$304,553.62 loss and Leah Brown was responsible for a $142,554.48 loss; found,
based on their particular involvement in the conspiracy, that those loss amounts
were “reasonably foreseeable” to each defendant; and adjusted upward their
offense levels accordingly.
A district court’s loss calculation, and its embedded determination that the
loss amount was reasonably foreseeable to the defendant, are factual findings
reviewed for clear error. United States v. Hebron, 684 F.3d 554, 560 (5th Cir. 2012)
(loss calculation reviewed for clear error); United States v. Hull, 160 F.3d 265, 269
(5th Cir. 1998) (foreseeability determination reviewed for clear error). The district
court need only make “a reasonable estimate of the loss,” Hebron, 684 F.3d at 560
(citing § 2B1.1 cmt. n.3(C)), and, given the “unique position” it occupies to assess the
loss amount, its loss calculation is entitled to appropriate deference, id.
a. Kenneth Brown
The district court attributed to Kenneth Brown a loss amount of
$304,553.62 based on the fourteen checks he cashed and twenty-five checks
made payable to his friends, associates, and family members. Kenneth Brown
contends that he “should only have been held responsible for the loss amount of
the checks he actually endorsed.”
Brown’s position that he is not responsible for checks cashed by others
participating in the scheme is contradicted by U.S.S.G. § 1B1.3(a)(1)(B), which
provides that a defendant is responsible for “all reasonably foreseeable acts and
omissions of others in furtherance of the jointly undertaken criminal activity.”
The district court’s finding that the loss resulting from the checks cashed by
other members of the conspiracy was reasonably foreseeable to Brown is well
supported. Brown recruited others to join, cashed checks when others backed
out, and was a central cog in the conspiracy: his spouse, children, sister, aunt,
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cousins, in-laws, business partner, employees, and friends cashed one or more
fraudulent checks.
b. Leah Brown
The district court attributed to Leah Brown a loss amount of $142,554.48
based on the two checks she cashed and sixteen checks made payable to her
friends, associates, and family members. She contests this amount on the sole
basis that “[t]he evidence was insufficient to show [that she] acted in concert
with others or participated in a jointly undertaken criminal activity.” Her
specific challenge that she is not liable for a loss amount of $142,554.48 because
she was not involved in the conspiracy is foreclosed by our earlier conclusion that
the evidence supports her conviction for conspiracy.
B. Substantive reasonableness
Having concluded that their sentences are procedurally sound, we turn to
the Browns’ contention that their within-Guidelines sentences of forty-two
months and thirty-four months of imprisonment are substantively unreasonable.
Properly calculated within-Guidelines sentences enjoy a presumption of
reasonableness that “is rebutted only upon a showing that the sentence does not
account for a factor that should receive significant weight, it gives significant
weight to an irrelevant or improper factor, or it represents a clear error of
judgment in balancing sentencing factors.” United States v. Cooks, 589 F.3d 173,
186 (5th Cir. 2009) (citation omitted). The Browns do not point to any
sentencing factor improperly omitted from consideration or given inappropriate
weight; they assert, without elaboration, that their sentences were “clearly
unreasonable” considering their “entire li[ves], background, lack of criminal
history, education, [and] all of the information contained in the PSR.” The
district court took into consideration their personal circumstances when
weighing the § 3553(a) factors and arriving at sentences it deemed “sufficient
but not greater than necessary to comply with the statutory purposes” of
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No. 12-10592
punishment. The Browns give us no reason to disturb the district court’s
considered judgment. See United States v. Diaz, 637 F.3d 592, 604 (5th Cir.
2011) (holding that defendant failed to rebut the presumption of reasonableness
where, contrary to the defendant’s objection, the record reflected that “[t]he
district court did take into account [his] personal history”); United States v. Ruiz,
621 F.3d 390, 398 (5th Cir. 2010) (“A defendant’s disagreement with the
propriety of the sentence imposed does not suffice to rebut the presumption of
reasonableness that attaches to a within-guidelines sentence.”).
CONCLUSION
For the foregoing reasons, the convictions and sentences of Kenneth and
Leah Brown are AFFIRMED.
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