United States v. Avan Nguyen , 854 F.3d 276 ( 2017 )

Case: 16-10186 Document: 00513952494 Page: 1 Date Filed: 04/13/2017
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
No. 16-10186
Fifth Circuit
FILED
April 13, 2017
UNITED STATES OF AMERICA, Lyle W. Cayce
Clerk
Plaintiff - Appellee
v.
AVAN NGUYEN,
Defendant - Appellant
Appeal from the United States District Court
for the Northern District of Texas
Before STEWART, Chief Judge, and JONES and OWEN, Circuit Judges.
CARL E. STEWART, Chief Judge:
Defendant-Appellant Avan Nguyen pleaded guilty to aiding and
assisting in the preparation of a false and fraudulent tax return. The district
court imposed a 36-month above-Guidelines sentence based on the 18 U.S.C. §
3553(a) factors and its conclusion that it was more likely than not that Nguyen
participated in the uncharged offense of currency structuring. Nguyen now
appeals the reasonableness of his sentence. Finding no error, we AFFIRM.
I. BACKGROUND
Nguyen, the owner of a wholesale salon equipment business, was
charged with aiding and assisting in the preparation of a false and fraudulent
corporate tax return. He pleaded guilty pursuant to a written plea agreement
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and entered into a settlement agreement with the Government, wherein he
agreed to forfeit $1,100,000 in seized funds. In preparing the presentence
report (“PSR”), the probation officer determined that Nguyen had a total
offense level of 13 and a criminal history category of I, resulting in an advisory
Guidelines range of 12–18 months. However, the probation officer also noted
that Nguyen appeared to be involved in unlawful structuring activities 1: IRS
agents found over $4,900,000 in structured deposits made by third parties to
bank accounts registered to Nguyen or his family members. Moreover, during
a raid of Nguyen’s business, IRS investigators found $3,215,703 in currency—
most of it separated into $10,000 bundles—whose source could not be
determined. In paragraph 87 of the PSR, the probation officer suggested the
structuring activities could warrant an upward departure under U.S.S.G. §
4A1.3 for an underrepresented criminal history or under U.S.S.G. § 5K2.21 for
uncharged conduct.
Nguyen objected to the suggestion that an upward departure may be
appropriate, and the Government agreed that there was insufficient evidence
to prove that he had structured or directed the structuring of deposits into his
bank accounts. The district court, however, entered an order tentatively
concluding that Nguyen’s objections to the upward departure were without
merit. The district court suggested that it would reject the plea agreement,
including the forfeiture settlement, and that Nguyen should receive a sentence
above the advisory Guidelines range, given the probability that he knew of the
1 A person “structures” a transaction if he, acting alone or in conjunction with others, “conducts
or attempts to conduct one or more transactions in currency, in any amount, at one or more financial
institutions, on one or more days, in any manner, for the purpose of evading . . . reporting
requirements.” 31 C.F.R. § 1010.100(xx). Section 5324 makes it a crime to “structure or assist in
structuring, or attempt to structure or assist in structuring,” a transaction to avoid § 5313’s
requirement that financial institutions file a currency transaction report (“CTR”) with the government
for all cash transactions exceeding $10,000. 31 U.S.C. §§ 5313(a); 5324(a)(3); United States v.
Rodriguez, 132 F.3d 208, 212 (5th Cir. 1997).
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structured deposits being made into his accounts and the Government’s failure
to prosecute him for that crime.
At the first sentencing hearing, the district court conducted an
evidentiary hearing to determine whether Nguyen had participated in illegal
structuring activities. The district court questioned three witnesses. Oanh
Nguyen, Defendant-Appellant’s wife, testified that the new business bank
accounts Nguyen had opened at Chase Bank (“Chase”) and Wells Fargo were
not an attempt to evade the law but rather a result of his decision to
restructure the company after their son decided to leave the business. IRS
Special Agent Alan Hampton and IRS Task Force Officer Alison Turner then
testified about the investigation into Nguyen’s financial activities. Afterwards,
the district court accepted the plea agreement but expressed its belief that
there was sufficient evidence to conclude that structuring activities occurred,
that Nguyen was aware of the illegal transactions, and that he aided and
abetted the deposits. The Government, while agreeing there was enough
evidence to show that the funds were structured, expressed doubt that there
was sufficient proof by a preponderance of the evidence to show that Nguyen
himself assisted in the structuring.
At the second sentencing hearing, the district court sustained Nguyen’s
objection to an upward departure as detailed in paragraph 87 of the PSR. The
district court also concluded that Nguyen was not entitled to a reduction for
acceptance of responsibility, which resulted in a newly applicable Guidelines
range of 21–27 months. Taking into account the 18 U.S.C. § 3553(a) factors,
the district court then sentenced Nguyen to 36 months in prison, to be followed
by a one-year term of supervised release and payment of a $250,000 fine. The
district court acknowledged the Government’s doubt as to whether Nguyen
participated in structuring activities, but explained that it had reached a
different conclusion based on its examination of the evidence and provided a
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lengthy explanation as to why “it [was] more likely than not that [Nguyen]
committed the offense of structuring.” In support of its decision, the district
court cited, inter alia, Nguyen’s dishonesty in underreporting his taxable
income for multiple years; the connection between the investigation into his
structuring activities and the discovery of tax fraud; and that Nguyen was able
to retain “millions of dollars” that could have been subject to forfeiture had the
Government pursued forfeiture proceedings. The district court rejected Ms.
Nguyen’s explanation for why the new bank accounts were opened and noted
that Defendant-Appellant gave conflicting explanations to IRS investigators as
to whether funds seized from his business were bank withdrawals. In its
thirteen-page Statement of Reasons (“SOR”), the district court reiterated these
conclusions and detailed the factors that influenced it to impose an above-
Guidelines sentence. Nguyen timely appealed.
II. DISCUSSION
This court reviews sentencing decisions for reasonableness. Gall v.
United States, 552 U.S. 38, 46 (2007); United States v. Cisneros-Gutierrez, 517
F.3d 751, 764 (5th Cir. 2008). Using a bifurcated review process, we first
examine whether the district court committed any significant procedural error.
Gall, 552 U.S. at 51. If the district court’s decision is procedurally sound, we
then consider the substantive reasonableness of the sentence. Id.
A. Procedural Reasonableness
1.
In considering the procedural unreasonableness of a sentence, we review
the district court’s interpretation and application of the Sentencing Guidelines
de novo and its findings of fact for clear error. Cisneros-Gutierrez, 517 F.3d at
764. If the district court committed a significant procedural error, we must
remand unless the error was harmless. United States v. Delgado-Martinez,
564 F.3d 750, 752–53 (5th Cir. 2009).
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Significant procedural errors include “failing to calculate (or improperly
calculating) the Guidelines range, . . . failing to consider the § 3553(a) factors,[2]
selecting a sentence based on clearly erroneous facts, or failing to adequately
explain the chosen sentence—including an explanation for any deviation from
the Guidelines range.” Gall, 552 U.S. at 51. “[W]e will give great deference to
[a] sentence” if the judge “carefully articulate[s] the fact-specific reasons she
concludes that [a non-Guidelines] sentence is appropriate,” “commits no legal
error in the procedure followed in arriving at the sentence,” and “gives
appropriate reasons for her sentence.” United States v. Mares, 402 F.3d 511,
519–20 (5th Cir.), cert. denied, 546 U.S. 828 (2005).
2.
Nguyen contends that the district court committed procedural error
because its determination that he participated in financial structuring
activities was not supported by sufficient evidence and thus could not form the
basis for an upward variance. We disagree.
Generally, structuring requires proof of three elements: that (1) the
defendant knew of the financial institution’s legal obligation to report
transactions in excess of $10,000; (2) the defendant knowingly structured (or
attempted to structure, or assisted in structuring) a currency transaction; and
(3) the purpose of the structured transaction was to evade that reporting
obligation. Fifth Circuit Pattern Jury Instructions (Criminal Cases) § 2.104
(2015) [hereinafter Jury Instructions § 2.104]. Although the Government must
prove each of these elements beyond a reasonable doubt to establish the
2 These include (1) the nature and circumstances of the offense and the history and
characteristics of the defendant; (2) the need for the sentence to reflect the seriousness of the offense,
deter criminal conduct, protect the public, and provide the defendant with correctional treatment; (3)
the kinds of sentences available; (4) the kinds of sentences and sentencing range established for the
applicable category of offense; (5) pertinent policy statements; (6) the need to avoid unwarranted
sentencing disparities; and (7) the need to provide restitution to victims. 18 U.S.C. § 3553(a).
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defendant’s guilt at trial, for sentencing purposes, the district court needed
only to find that the elements were satisfied by a preponderance of the
evidence. See Mares, 402 F.3d at 519 (“The sentencing judge is entitled to find
by a preponderance of the evidence . . . all facts relevant to the determination
of a non-Guidelines sentence.”). Additionally, direct evidence is not required;
rather, “the sentencing court is permitted to make common-sense inferences
from the circumstantial evidence.” United States v. Caldwell, 448 F.3d 287,
292 (5th Cir. 2006).
Given these standards, the district court did not err in inferring that
Nguyen participated in currency structuring. First, the district court’s
conclusion that “it is more likely than not that [Nguyen] knew of the banks’
reporting obligations” was not clearly erroneous. See Jury Instructions § 2.104.
In support of its conclusion, the district court pointed to a June 7, 2012 letter
written by Chase to Nguyen that stated in relevant part:
All banks operating in the United States are required by law to file
a Currency Transaction Report (CTR) when a customer’s cash
transaction(s) exceed $10,000 on any business day . . . . [W]e have
noted through a review of your account(s) a pattern of cash
transactions that potentially give the appearance of an attempt to
evade the CTR filing requirement. Attempting to evade the CTR
filing requirement may be viewed as structuring and is a violation
of the Bank Secrecy Act.
Therefore, Chase feels that it would be in our mutual best interest
for you to change your transaction patterns. If your pattern of cash
activity does not change promptly, your account, along with any
related accounts, may be at risk for closure.
Although Nguyen suggests there is an absence of evidence showing that
Chase actually mailed the letter or that he received it, we agree with the
district court’s conclusion that Nguyen received a letter that was addressed to
him—particularly given that he does not explicitly assert that he never
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received the letter nor does he explain why he would not have received it.
Moreover, Nguyen’s actions following the letter’s issue date support a
conclusion that he received it: five days later, he filed a business name change
with the Texas Secretary of State; approximately two weeks later, he opened a
new account at Chase under the new business name; shortly thereafter,
currency deposits into the Chase account referenced in the warning letter
became infrequent while frequent deposits appeared in the newly opened
account; and less than one week after that, one of Nguyen’s business
customers, Anh Le, changed the pattern of his currency deposits into Nguyen’s
accounts. The district court additionally noted that “[a]ny businessman of the
years of experience [Nguyen] had in running his own business, and with the
number of bank accounts he had and the number of currency transactions
conducted in those accounts, would have known of the [banks’ reporting]
requirement.” We are convinced that the Chase letter and Nguyen’s resultant
actions, combined with Nguyen’s extensive business experience, support the
district court’s conclusion that “it is more likely than not that [Nguyen] knew
of the banks’ reporting obligations.” 3
Next, the district court determined that “it is more likely than not” that
Nguyen “was intentionally and knowingly participating in the illegal currency-
structuring activities.” See Jury Instructions § 2.104. For example, the district
court referenced Nguyen’s actions after the date of the Chase letter, as detailed
3 Nguyen disputes the district court’s reliance on cases stating that the business background
of a defendant, when combined with evidence of structuring itself, is sufficient to create an inference
that the defendant knew of the bank’s currency reporting requirement. See United States v. Packer,
No. 99-40527, 2000 WL 1568150, at *1–2 (5th Cir. Sept. 11, 2000); Rodriguez, 132 F.3d at 212–13.
Nguyen argues that Packer and Rodriguez are distinguishable from the instant case because they
involved defendants who had themselves engaged in structuring. We do not read those cases as
creating a requirement that the defendant himself must have structured the funds. However, even
assuming arguendo that Nguyen’s interpretation is correct, his business background was only one
factor the district court considered in concluding that he probably knew of the banks’ reporting
obligation. Thus, we find no error in the district court’s analysis.
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above. The district court also explained that it was unpersuaded by Ms.
Nguyen’s explanation for why her husband opened the new bank accounts,
concluding that she lacked sufficient knowledge of his business activities to be
able to give informed answers “and that she was stretching to help her
husband.” 4
Furthermore, other evidence before the district court further supports
the conclusion that Nguyen knowingly and intentionally participated in
structuring activities. For example, IRS investigators found at his place of
business $3,215,703 in currency, most of which was separated into $10,000
bundles. Nguyen stated that he did not deposit the money in the bank “because
their fees are too high and he does not trust banks.” Nguyen also provided
conflicting explanations as to the source of the currency. He initially told the
officers that it came from his customers’ cash payments and from bank
withdrawals—which he made in increments of $5,000 or $10,000, and never
“over $10,000 at a time.” However, when officers asked why he never withdrew
more than $10,000, Nguyen “hesitated and then stated that the U.S. currency
[was] from only sales and the casino.” Nguyen’s counsel later told the
Government that “the cash found in the business was from gambling proceeds.”
Additionally, Nguyen’s bank records show that multiple $9,000 deposits were
made into his various accounts either on the same day or in close proximity to
one another, and because these deposits were round numbers—in contrast to
the “legitimate deposits,” all of which were less than $9,000 and non-round
numbers—the structured deposits likely would have stood out to Nguyen on
his bank statements.
4 Likewise, the district court did not accept as credible Mr. Le’s explanations for the structuring
activity in Nguyen’s bank accounts. The district court ultimately determined that Mr. Le’s awareness
that he too was at risk of prosecution for structuring activities caused him to be cautious in his
comments to investigators.
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This evidence, taken together, reasonably supports the district court’s
determination that Nguyen knowingly and intentionally participated in
structuring activities. See Caldwell, 448 F.3d at 292.
3.
For these reasons, we hold that the district court did not clearly err when
it determined, based on the circumstantial evidence, that it was more likely
than not that Nguyen participated in his customers’ structuring activities. See
Jury Instructions § 2.104; Mares, 402 F.3d at 519. We therefore conclude that
Nguyen’s sentence was not procedurally unreasonable. See Gall, 552 U.S. at
51; Mares, 402 F.3d at 519–20.
B. Substantive Reasonableness
Having determined that the district court’s decision was procedurally
sound, we turn to the question of whether it was substantively reasonable. See
Gall, 552 U.S. at 51.
1.
We review the substantive reasonableness of a sentence for abuse of
discretion. 5 Id.; Delgado-Martinez, 564 F.3d at 751. “A non-Guidelines
sentence unreasonably fails to reflect the statutory sentencing factors set forth
in § 3553(a) where it (1) does not account for a factor that should have received
significant weight, (2) gives significant weight to an irrelevant or improper
factor, or (3) represents a clear error of judgment in balancing the sentencing
factors.” United States v. Diehl, 775 F.3d 714, 724 (5th Cir. 2015) (quoting
United States v. Smith, 440 F.3d 704, 708 (5th Cir. 2006)). In reviewing a
5 The Government argues that plain error review is appropriate because Nguyen failed to
preserve his challenge to the substantive reasonableness of his sentence. See United States v. Peltier,
505 F.3d 389, 391 (5th Cir. 2007). This is a close question, however, our review of the record reveals
that some of Nguyen’s counsel’s objections and comments at sentencing can reasonably be construed
as preserving the challenge. Nevertheless, because Nguyen’s arguments fail under the abuse of
discretion standard, we pretermit further analysis under plain error review as moot.
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challenge to the length of a non-Guidelines sentence, this court “may take the
degree of variance into account and consider the extent of a deviation from the
Guidelines.” United States v. Herrera-Garduno, 519 F.3d 526, 530 (5th Cir.
2008) (quoting Gall, 552 U.S. at 47).
The fact that this court “might reasonably have concluded that a
different sentence was appropriate is insufficient to justify reversal.” Gall, 552
U.S. at 51. We “must give due deference to the district court’s decision that
the § 3553(a) factors, on a whole, justify the extent of the variance.” Id.; Diehl,
775 F.3d at 724 (“[O]ur ‘review for substantive reasonableness is highly
deferential, because the sentencing court is in a better position to find facts
and judge their import under the § 3553(a) factors with respect to a particular
defendant.’’’) (quoting United States v. Hernandez, 633 F.3d 370, 375 (5th Cir.
2011) (internal quotation marks omitted)). Thus, a “significant variance” from
the Guidelines is permitted where it is “commensurate with the individualized,
case-specific reasons provided by the district court.” Diehl, 775 F.3d at 724
(quoting United States v. McElwee, 646 F.3d 328, 338 (5th Cir. 2011)).
2.
Nguyen contends that the undue weight the district court gave to
insufficient evidence of alleged structuring and the court’s consideration of
improper factors—for example, that the Government chose not to forfeit all of
the funds it seized from him—rendered the imposed sentence an abuse of
discretion. Nguyen also argues that the district court failed to give weight to
the fact that his criminal conduct was fully captured by the Guidelines, that he
lacked a criminal record, and that he timely paid restitution and other penalties.
We disagree. First, as we held above, the district court’s determination
that Nguyen participated in structuring activities was not improper.
Furthermore, the district court, both in an extensive statement at sentencing
and in the SOR, explained that it was imposing the above-Guidelines sentence
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based on a variety of factors, including: (1) due to “the magnitude of [Nguyen’s]
dishonesty and unwillingness to abide by our society’s basic rules of conduct,”
(2) based on “the aggravated nature of [Nguyen’s] criminal conduct,” (3)
because Nguyen’s “exceptional [business] success . . . had a significant
foundation in [his] unlawful activity,” (4) because Nguyen “was able to retain
millions of dollars of funds” that “probably would have been forfeited to the
[G]overnment” had it pursued forfeiture proceedings, (5) to afford deterrence
to “others who are knowledgeable of [Nguyen’s] situation [and] would be
tempted to engage in [similar] criminal conduct,” (6) to protect the public from
Nguyen’s further crimes and the criminal conduct of others, and (7) because
financial penalties alone would not satisfy § 3553(a)’s sentencing objectives.
See 18 U.S.C. § 3553(a)(1)–(2). We cannot say that these considerations, taken
together, are insufficient to justify a 36-month upward variance. See Gall, 552
U.S. at 51; Diehl, 775 F.3d at 724; Mares, 402 F.3d at 519–20. Moreover, the
district court held an evidentiary hearing, questioned the witnesses,
thoroughly reviewed the exhibits, and explained its findings in considerable
detail. See Diehl, 775 F.3d at 724–25.
3.
Given this court’s “highly deferential” review for substantive
reasonableness, id., we hold that the district court did not abuse its discretion
in imposing the upward variance to Nguyen’s sentence.
III. CONCLUSION
For the foregoing reasons, Defendant-Appellant Avan Nguyen’s sentence
is AFFIRMED.
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