United States v. David Staples ( 2005 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________
No. 04-1010
___________
United States of America, *
*
Appellee, *
* Appeal from the United States
v. * District Court for the Eastern
* District of Missouri.
David Staples, also known as *
Andrew N. Blatt, *
*
Appellant. *
___________
Submitted: September 13, 2004
Filed: June 13, 2005
___________
Before MORRIS SHEPPARD ARNOLD, BRIGHT, and FAGG, Circuit Judges.
___________
MORRIS SHEPPARD ARNOLD, Circuit Judge.
David Staples appeals from his convictions and sentence for bank fraud, see
18 U.S.C. § 1344(1), (2), misuse of a social security number, see 42 U.S.C.
§ 408(a)(7)(B), and fraud with identification documents, see 18 U.S.C. § 1028(a)(7).
With respect to his convictions, he argues that the district court should have
suppressed evidence from two pretrial identifications, excluded two in-court
identifications, and granted him a new trial because he received ineffective assistance
of counsel. As for his sentence, Mr. Staples argues that the district court
miscalculated the intended loss under the sentencing guidelines and, in contravention
of Blakely v. Washington, 124 S. Ct. 2531 (2004), made the predicate factual findings
for two sentencing enhancements rather than allowing the jury to make them. We
affirm the convictions, but remand the case for resentencing.
I.
Mr. Staples argues that we should reverse his convictions and grant him a new
trial because the district court deprived him of his due process rights when it denied
his motion to suppress evidence of two pretrial identifications.
A man posing as Dr. Andrew Blatt bought a house with a counterfeit check.
The check bounced, and the impostor became a wanted man. A few months after the
closing, a television station in St. Louis broadcast a picture of Mr. Staples, as his
picture was on the driver's license used by the impostor and photocopied by the
employees of the title company at the closing. A state probation officer and a
St. Louis police officer independently saw the broadcast, identified the man in the
photograph as Mr. Staples, and called the agents working on the case to tell them so.
After receiving this information, the case agents showed the same photo
spreads separately to Michelle Clemons and Mary Layne, the two employees of the
title company who saw the impostor on the day of the closing. Prior to showing the
arrays, the agents did not ask either witness to work with an artist on a composite
drawing or to give a full description of the face of the impostor. Nor did the agents
show either witness a blank lineup (i.e., a lineup without Mr. Staples's picture in it)
before showing the challenged photo spreads. The agents told each witness that the
picture of the person who posed as Dr. Blatt might be in the spread and then asked if
the impostor's picture was in the array. Ms. Clemons and Ms. Layne each identified
the picture of Mr. Staples as the man who posed as Dr. Blatt. At trial, both witnesses
again identified Mr. Staples as the fake Dr. Blatt. The jury convicted Mr. Staples on
all three counts of the indictment.
-2-
We review the district court's interpretation of the protections afforded by the
fifth amendment's due process clause de novo, while we review its underlying factual
determinations for clear error. See United States v. Rose, 362 F.3d 1059, 1066 (8th
Cir. 2004); United States v. Smith, 383 F.3d 700, 703-04 (8th Cir. 2004). To succeed
in challenging the validity of the photo-array identifications on due process grounds,
Mr. Staples must show that the identification procedure was impermissibly suggestive
and that the suggestive procedure created a "very substantial likelihood of irreparable
misidentification." Simmons v. United States, 390 U.S. 377, 384 (1968); Robinson
v. Clarke, 939 F.2d 573, 575 (8th Cir. 1991) (per curiam).
Mr. Staples contends that the identical lineups were unduly suggestive because
the witnesses were not asked to create composite sketches, to give full descriptions
of the impostor's face, or to view blank lineups prior to seeing the challenged photo
spreads. Additionally, he argues, the lineups were suggestive because the witnesses
may have looked at the photocopy of the driver's license after the closing and before
the lineups, and because they likely saw the photograph of Mr. Staples on television.
Mr. Staples maintains that the latter two circumstances matter because someone stole
his driver's license, cut out the picture, and used it on the fraudulent Dr. Blatt driver's
license. So, Mr. Staples insists, if Ms. Clemons and Ms. Layne had looked at the
photocopy of the license after the closing or had seen the news story which used the
same picture, they would have seen his face and started to believe that he was the man
at the closing, though he was not. He concludes that the suggestive lineups tainted
his trial.
We are unpersuaded by Mr. Staples's arguments. We reject the argument that
a witness's failure to work on a composite drawing renders a photo array suggestive,
because Mr. Staples does not explain why this is so and does not cite any case for this
proposition. See Watson v. O'Neill, 365 F.3d 609, 615 (8th Cir. 2004). For the same
reason, we reject the argument that the agents corrupted the lineups by failing to
obtain descriptions of the impostor's face. Next, as we have held previously, a photo
-3-
array is not unconstitutionally suggestive just because it was not preceded by a blank
lineup. United States v. Amrine, 724 F.2d 84, 88, 88 & n.5 (8th Cir. 1983). Finally,
we refuse to conclude that the lineups were suggestive because the witnesses might
have reviewed the photocopy of the license or seen the television news story:
Mr. Staples points us to no evidence showing that either witness looked at the
photocopy after the closing or saw the story. Because the lineups were not unduly
suggestive, we do not need to address the question of whether they caused the pretrial
and in-court identifications to be unreliable. See Robinson, 939 F.2d at 575.
We note that Mr. Staples's brief states that "Ms. Layne ... did not deny looking
at the photograph" in the file after the closing and before viewing the photo array.
It also says that Ms. Layne did not deny seeing the news story about Mr. Staples. The
difficulty with these statements is that during her trial testimony Ms. Layne was never
asked whether she looked at the photograph after the closing and before the array or
whether she saw the news story. Thus, while the statements may be true, they are also
misleading. The argument is entirely disingenuous.
II.
Mr. Staples also argues that his convictions should be reversed because his trial
counsel (who withdrew before sentencing) offered ineffective assistance under the
sixth amendment by failing to call two witnesses, Ronald Harlan and Mr. Staples's
uncle, who would have testified that he was not the man who passed himself off as
Dr. Blatt. Mr. Harlan was the seller of the house, and he has pleaded guilty to bank
fraud in a related case. According to the defendant, Mr. Harlan met the impostor
several times and would have testified that Mr. Staples was not the impostor.
Mr. Staples's uncle has also pleaded guilty in a related case. Mr. Staples insists that
his uncle would have testified that Mr. Staples's driver's license was stolen from his
(the uncle's) car (which bolsters Mr. Staples's story that a third party presented his
driver's license picture at the closing) and that Mr. Staples could not have been
involved in the fraud.
-4-
Before proceeding to the merits of Mr. Staples's claim, we must decide if it is
amenable to review on direct appeal. Because ineffective-assistance-of-counsel
claims often encompass facts outside of the district court record, they are typically
best raised collaterally via motions filed under 28 U.S.C. § 2255. United States v.
Ford, 918 F.2d 1343, 1350 (8th Cir. 1990). When the claim does not turn on
information outside of the district court record, however, disposition on direct appeal
is appropriate. See id. We have previously decided on direct appeal ineffective-
assistance claims premised on an attorney's failure to call witnesses, e.g., United
States v. Hunter, 95 F.3d 14, 17-18 (8th Cir. 1996), and we do so again here.
Mr. Staples's claim requires us to assess the hypothetical costs and benefits of calling
his uncle and Mr. Harlan, and this task does not require off-the-record information
(as do, for example, claims about counsel's advice given in confidence).
To prevail on his ineffective-assistance claim, Mr. Staples must show that his
trial counsel's representation "fell below an objective standard of reasonableness,"
Strickland v. Washington, 466 U.S. 668, 687-88 (1984), and that he was prejudiced
such that "there is a reasonable probability that, but for counsel's unprofessional
errors, the result of the proceeding would have been different," id. at 694. When
assessing attorney performance, "[c]ourts should avoid 'the distorting effects of
hindsight' and try to evaluate counsel's conduct by looking at the circumstances as
they must have appeared to counsel at the time." Sera, 267 F.3d at 874 (quoting
Strickland, 466 U.S. at 689). Because of the difficulty of avoiding such bias, courts
"must indulge a strong presumption that counsel's conduct falls within the wide range
of reasonable professional assistance." Strickland, 466 U.S at 689.
Mr. Staples's ineffective-assistance-of-counsel claim is untenable. The
decision not to call a witness is a " 'virtually unchallengeable' " decision of trial
strategy, see United States v. Davidson, 122 F.3d 531, 538 (8th Cir. 1997), cert.
denied, 522 U.S. 1034 (1997) & 523 U.S. 1033 (1998) (quoting Bowman v. Gammon,
85 F.3d 1339, 1345 (8th Cir. 1996), cert. denied, 520 U.S. 1128 (1997)), and
-5-
Mr. Staples's attorney's decisions do not fall outside this wide perimeter of protection.
Testimony from Mr. Staples's uncle and Mr. Harlan might have provided some
benefits, but given the matters described below, it was not objectively unreasonable
for Mr. Staples's attorney to decide that the potential costs of calling the witnesses
outweighed the potential benefits.
The prosecutor's cross-examination of Mr. Harlan likely would have
diminished greatly the value of his testimony. Mr. Harlan was under indictment in
a related fraud case, and the conduct underlying that indictment almost certainly
would have been suitable material for impeachment pursuant to Federal Rule of
Evidence 608(b), as fraudulent conduct implicates a witness's character for
truthfulness, e.g., United States v. Smith, 80 F.3d 1188, 1193 (7th Cir. 1996). In
addition, any claim by Mr. Harlan that Mr. Staples was not the ersatz Dr. Blatt would
have been contradicted by the eyewitness testimony of Ms. Clemons and Ms. Layne.
(This analysis assumes, perhaps unrealistically, that Mr. Harlan would not have
invoked his fifth amendment right against self-incrimination when called to testify
even though he was facing related criminal charges.)
Impeachment specifics aside, there is considerable risk inherent in calling any
witness because if the witness does not hold up well on cross-examination, the jurors
might draw unfavorable inferences against the party who called him or her. See Lema
v. United States, 987 F.2d 48, 54 (1st Cir. 1993). As Mr. Harlan would have faced
a vigorous cross-examination, there was a not insignificant possibility that he would
not have held up well.
Mr. Staples's uncle would have been an even less convincing witness because
he shared all of Mr. Harlan's weaknesses as a witness (he too was under indictment
in a related fraud case, would have contradicted the two eyewitnesses, and faced a
tough cross-examination) and possessed one more: Because he is related to
-6-
Mr. Staples, the prosecutor could have argued that his testimony was shaped by
familial loyalty.
Mr. Staples did not receive ineffective assistance from his lawyer. In light of
the deferential presumption, the prospects for impeachment, and the risk inherent in
calling any witness, we conclude that Mr. Staples's attorney did not perform in an
objectively unreasonable manner by deciding not to call the two witnesses. Because
Mr. Staples's attorney's performance was not unreasonable, we need not address the
question of whether his performance prejudiced Mr. Staples's defense.
III.
Mr. Staples maintains that the district court erred in determining his sentencing
range because it miscalculated the loss that he intended to cause. We briefly review
the relevant facts. At a real estate closing, Mr. Staples gave the title company a fake
check for $249,493, the purchase price of the house. About $76,000 of the purchase
price represented the seller's equity in the property. The title company issued Mr.
Harlan, the seller (and an active participant in the fraud), a check for this amount,
which he cashed before the title company discovered that Mr. Staples's check was
counterfeit. About $170,000 of the purchase price represented money still owed to
the bank holding the mortgage. The title company paid the bank the amount of the
mortgage, but the bank returned the funds when it learned that Mr. Staples had given
the title company a fake check. Subsequently, the bank foreclosed on and sold the
house. It received only about $85,000 for the house at auction, thus incurring a loss
of around $85,000. (A few thousand dollars of the purchase price of the house went
for fees related to the purchase, but we ignore these as they do not affect the
outcome.)
To calculate the sentencing range for a fraud case, we need to determine the
amount of loss caused by the fraud. U.S.S.G. § 2B1.1. (All citations to the
sentencing guidelines are to the 2002 edition, which the district court used in
-7-
sentencing Mr. Staples.) The loss amount for sentencing purposes is the greater of
the actual or intended loss. U.S.S.G. § 2B1.1 comment. (n.2(A)). The parties agree
that the actual loss in this case was about $161,000, which is the sum of the
approximately $76,000 lost by the title company and the approximately $85,000 lost
by the bank.
The parties do not agree on the amount of the intended loss, however, because
they disagree about whether to deduct the apparent value of the house (i.e., what a
reasonable person at the time would have thought the house to be worth) from the
intended loss. Intended loss is "the loss the defendant intended to cause to the
victim." United States v. Wells, 127 F.3d 739, 746 (8th Cir. 1997). The government
must prove the intended loss by a preponderance of the evidence. United States v.
Jackson, 155 F.3d 942, 948 (8th Cir. 1998). Absent other evidence of the defendant's
intent, the size of the maximum loss that a fraud could have caused is circumstantial
evidence of the intended loss which satisfies the preponderance of the evidence
standard. See Wells, 127 F.3d at 746-47. Importantly, though, as our goal is to
capture the defendant's intent, we compute the maximum possible loss from the
perspective of a reasonable person in the defendant's position at the time of the fraud;
we do not assume either omniscience or irrationality. Cf. United States v. Wheeldon,
313 F.3d 1070, 1072-1073 & n.2 (8th Cir. 2002). In other words, the maximum
possible loss is the maximum loss that a reasonable person in the defendant's position
could have intended.
Stripped to its core, the intended loss disagreement is a dispute about whether
collateral should be considered when determining intended loss: if an immobile
object is the subject of a fraudulent purchase, then it is in essence collateral securing
the fraudulent purchase because it can be levied on (assuming it has not been sold by
the fraudulent purchaser to a bona fide purchaser). We review the district court's
resolution of this issue de novo because it involves the interpretation and application
of the guidelines. United States v. Mashek, 406 F.3d 1012, 1016 (8th Cir. 2005).
-8-
Mr. Staples insists that he could not have intended to defraud anyone of the
apparent value of the house because a reasonable person would have known that it
could be sold by the bank (or perhaps the title company) to mitigate any damages.
The government responds that the fact that losses were recouped by a later sale of the
house is irrelevant under the guidelines. At Mr. Staples's sentencing, the district court
determined that he intended to cause a loss of $249,493; in other words, it held him
responsible for the apparent value of the house.
We hold that courts should consider collateral when determining the intended
loss amounts attendant to transactions like the one involved in this case. If a
reasonable person intends for the collateral to revert to the defrauded party (or
understands that it will), then he or she does not intend to obtain the value of that
collateral. We do not mean that the value of the collateral necessarily must be
deducted from the intended loss; the defendant's intent is the touchstone. For
example, if a car were collateral in a fraudulent loan procurement case, and the
defendant were to hide the car, then the court should not deduct the value of the
collateral from the intended loss because under those circumstances the defendant
intended the loss to encompass the value of the collateral. See United States v.
Williams, 292 F.3d 681, 686-87 (10th Cir. 2002). We are not alone in concluding that
collateral is relevant to determining intent, as the Ninth Circuit reached the same
conclusion in United States v. McCormac, 309 F.3d 623, 629 (9th Cir. 2002).
The government's argument to the contrary is unpersuasive. According to the
government, that collateral is irrelevant because, in its words, the guidelines instruct
courts to ignore "later re-payments or recoupments of money by victims" when
calculating loss. Intended loss is meant to be a measure of a defendant's culpability.
U.S.S.G. § 2B1.1 comment. (background); United States v. McBride, 362 F.3d 360,
375 (6th Cir. 2004). With this in mind, courts do not subtract from the intended loss
repayments made by a defendant to his victim after the detection of the offense, as
such payments, given their timing, likely do not indicate anything about the
defendant's culpability. United States v. Swanson, 360 F.3d 1155, 1168-69 (10th Cir.
-9-
2004); see U.S.S.G. § 2B1.1 comment. (n.2(E)(i)). For the opposite reason, though,
courts do subtract payments that were made before the offense was discovered. See
U.S.S.G. § 2B1.1 comment. (n.2(E)(i)). To us, collateral is more like pre-detection
repayment than post-detection repayment because it bears on the defendant's
culpability: the existence of collateral could indicate that the defendant intended to
cause a smaller loss than would have occurred absent the collateral. Thus, sentencing
courts should subtract the value of the collateral from the intended loss amount when
the facts warrant it.
Applying the principles discussed above to the facts of this case, we conclude
that the intended loss was smaller than the actual loss. The only evidence of Mr.
Staples's intent is the maximum possible loss that could have been caused by the
fraud. This being so, we apply our inferential rule and conclude that a reasonable
person in Mr. Staples's position would have intended a loss of less than the actual loss
of $161,000. First, a reasonable person would not have thought that he could keep
the house because a house cannot be hidden like a car or other mobile form of
security. Second, a reasonable person would have thought that the house was worth
at least as much as the outstanding value of the mortgage (if not more, as houses often
appreciate), and hence could be sold to recoup much of the loss. Here, the house was
worth far less than the outstanding value of the mortgage, but we see no indication
that a reasonable person in the defendant's position would have known this fact. In
short, a reasonable person would have thought that at least the value of the mortgage
would be recouped and so would have intended a loss of less than $161,000.
Since the actual loss of about $161,000 was greater than the intended loss, the
court should have used the actual loss amount to calculate Mr. Staples's sentencing
range. Instead, the court calculated Mr. Staples's sentencing range using an intended
loss amount of $249,493. The court thus set Mr. Staples's offense level two levels
higher than it should have; his final offense level is 18, not 20. See U.S.S.G. § 2B1.1
(b)(1). As Mr. Staples falls in criminal history category III, his sentencing range is
-10-
33-41 months' imprisonment, and not 41-51 months' imprisonment as determined by
the district court. See U.S.S.G. § 5A.
We turn now to the appropriate remedy for this error. If the district court has
incorrectly interpreted or applied the guidelines, then pursuant to 18 U.S.C.
§ 3742(f)(1) we are to remand the case for resentencing, unless the error is a harmless
one. Mashek, 406 F.3d at 1015, 1017. An error is harmless if it is clear from the
record that the district court would have given the defendant the same sentence
regardless of which guidelines range applied. See United States v. Bassett, 406 F.3d
526, 527 (8th Cir. 2005) (per curiam).
There is no indication here that the court would have given Mr. Staples a 44-
month sentence regardless of what guidelines range applied: the court did not
sentence Mr. Staples in the overlap between the correct and incorrect guidelines
ranges (41 months' imprisonment) and did not otherwise suggest that the guidelines
range was irrelevant to its sentence. On the record before us, then, we cannot
conclude that the miscalculation did not affect the district court's selection of the
sentence imposed, and we thus remand the case for resentencing. See Williams v.
United States, 503 U.S. 193, 203 (1992); Mashek, 406 F.3d at 1020.
Before concluding, we briefly address Mr. Staples's argument that his sentence
runs afoul of Blakely. We interpret this as an argument pursuant to United States v.
Booker, 125 S. Ct. 738 (2005), and conclude that it is moot. We have already decided
to remand Mr. Staples's case for resentencing, and the district court will necessarily
resentence him in accord with Booker. See id. at 769.
-11-
IV.
For the above stated reasons, we affirm Mr. Staples's convictions and remand
the case for resentencing.
______________________________
-12-