United States v. O'Brien ( 2017 )

United States Court of Appeals
For the First Circuit
No. 15-1961
UNITED STATES OF AMERICA,
Appellee,
v.
JANE E. O'BRIEN,
Defendant, Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Nathaniel M. Gorton, U.S. District Judge]
Before
Lynch, Lipez, and Barron,
Circuit Judges
Inga L. Parsons on brief for appellant.
Carmen M. Ortiz, United States Attorney, and Stephen E. Frank,
Assistant United States Attorney, on brief for appellee.
August 31, 2017
LIPEZ, Circuit Judge. Jane E. O'Brien, a professional
investment adviser, engaged in a long-running scheme to defraud
several of her clients -- mostly elderly women who relied on her
financial advice and friendship -- out of their life savings. This
scheme was eventually uncovered, and she pled guilty -- in two
separate cases -- to securities fraud, investment adviser fraud,
wire fraud, and mail fraud. O'Brien now appeals her sentence on
both procedural and substantive grounds. Specifically, she
challenges the district court's imposition of a two-level
obstruction of justice enhancement and a two-level vulnerable
victim enhancement, as well as contending that the length of her
sentence was substantively unreasonable. Finding no basis for
undoing the district court's well-reasoned sentencing decisions,
we affirm.
I. Background
We provide here only a brief synopsis of the essential
facts of this case, reserving additional detail for the analysis
that follows. Because this appeal follows a guilty plea, we draw
the relevant facts from the plea agreement, the change-of-plea
colloquy, the undisputed portions of the presentence investigation
report ("PSR"), and the transcript of the disposition hearing.
United States v. Rivera-González, 776 F.3d 45, 47 (1st Cir. 2015).
Over approximately eighteen years, O'Brien -- a
registered securities broker who was employed at various times by
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two large brokerage firms (Merrill Lynch and Smith Barney) --
persuaded some of her clients to withdraw money from their
brokerage accounts and give the money to her personally to invest
on their behalf. After gaining control of her client's money,
however, O'Brien did not make the promised investments. Instead,
she used her clients' money to pay personal expenses or to repay
money given to her by other clients. To perpetuate and conceal
the fraud, she made lulling payments, forged signatures, and
repeatedly lied to her clients about the state of their
investments.
In April 2012, after one of her clients filed a complaint
with the Financial Industry Regulatory Authority, O'Brien, through
her attorney, met with an assistant United States Attorney and
disclosed that she had misappropriated funds from one of her
clients, RC.1 During this meeting, O'Brien also provided the
government with the names of other former clients from whom she
had improperly obtained money. Two months after this meeting,
O'Brien pled guilty to one count of securities fraud, under 15
U.S.C. § 78j(b), based on her defrauding of RC. On May 30, 2013,
O'Brien was sentenced to thirty-three months in prison on this
count. O'Brien raises no claims of error specific to this
sentence.
1 The parties have identified the victims by their initials.
We do the same.
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While O'Brien was in custody awaiting sentencing on the
2012 case, she was also charged in an eight-count indictment with
investment fraud, wire fraud, and mail fraud for conduct related
to three other former clients: PN, EG, and KD. O'Brien
subsequently pled guilty -- without a plea agreement -- to all but
one of the counts charged in the indictment. At a hearing on
August 6, 2015, the court sentenced O'Brien to forty-five months
of imprisonment, to be served consecutively to the thirty-three-
month term of imprisonment from the 2012 case. Because O'Brien's
cases were aggregated for purposes of calculating the applicable
guidelines sentencing range ("GSR"), the district court's
imposition of a consecutive sentence of forty-five months brought
O'Brien's total sentence (seventy-eight months) to the bottom end
of the advisory GSR. O'Brien timely appealed.
II. Discussion
O'Brien challenges the district court's imposition of
two, two-level sentencing enhancements: the first, for obstruction
of justice, under U.S.S.G. § 3C1.1; the second, a vulnerable-
victim enhancement, under U.S.S.G. § 3A1.1(b)(1). She also
contends that her sentence was substantively unreasonable. We
address each argument in turn, reviewing O'Brien's preserved
claims of error under our "multifaceted" abuse-of-discretion
standard, whereby "we apply clear error review to factual findings,
de novo review to interpretations and applications of the
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guidelines, and abuse of discretion review to judgment calls."
United States v. Cox, 851 F.3d 113, 119 (1st Cir. 2017) (quoting
United States v. Nieves–Mercado, 847 F.3d 37, 42 (1st Cir. 2017)).
A. Obstruction of Justice Enhancement
Under U.S.S.G. § 3C1.1, a defendant's offense level is
increased by two levels if "(1) the defendant willfully obstructed
or impeded, or attempted to obstruct or impede, the administration
of justice with respect to the investigation, prosecution, or
sentencing of the instant offense of conviction, and (2) the
obstructive conduct related to (A) the defendant's offense of
conviction and any relevant conduct; or (B) a closely related
offense." Covered conduct includes, among other things,
"threatening, intimidating, or otherwise unlawfully influencing a
. . . witness . . . or attempting to do so." Id. cmt. n.4(A).
The conduct that led to this enhancement involved
payments O'Brien made or promised to make to some victims during
the government's investigation of her crimes, as well as related
conversations O'Brien had with an attorney for one of her victims.
Specifically, between April and June 2013, O'Brien -- who was in
prison at the time, having been remanded pending sentencing in the
2012 case for violating her release conditions -- directed her
brother to make payments to PN and EG. From prison, O'Brien also
had several phone calls with PN's attorney, Michael Faherty, in
which she tried to convince Faherty that the money given to her by
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PN was a series of personal loans, not money to be invested on
PN's behalf.2 These conversations were lawfully recorded.3 In one
conversation on April 10, 2013, the following exchange occurred:
FAHERTY: I’m just concerned that [PN] is very clear that
these monies went to you as investments, investments in
some projects you were working on, and I just need to
get her paid back so, she’s destitute.
O’BRIEN: Right, well and that’s my goal too, but the
terminology is a problem if that’s what she’s relaying
to them, because it makes it sound like I did, presented
her with some kind of concrete investment which I did
not, it was clearly, at least as far as I’m concerned,
you know, her investing in me as a person and helping me
to be able to move forward with some things I’ve been
working on. But if she, you know, pursues it on that,
along those lines, that really is a problem for me.
On a subsequent recorded call on April 29, 2013, O'Brien told
Faherty that PN would continue to receive monthly payments from
2 For the first time on appeal, O'Brien alleges that Faherty
was an informant "planted by the government" "to try to entrap
[O'Brien] into mak[ing] incriminating statements," and that
Faherty was "directing the conversations in an obvious effort
. . . to get O'Brien to respond in a certain way." O'Brien cites
no evidence in the record supporting this contention, however, and
we can find none. Instead, the record demonstrates that O'Brien
argued at sentencing that Faherty initially contacted her after he
contacted her brother to discuss the periodic payments O'Brien was
making to PN.
3 Facilities that record inmates' calls or visitations
generally inform inmates that their conversations will be
recorded, except for conversations with the inmate's attorney.
See United States v. Novak, 531 F.3d 99, 100 (1st Cir. 2008)
(O'Connor, J.) ("Massachusetts and the Federal government have
both promulgated regulations prohibiting prison officials from
monitoring phone calls between inmates and their attorneys."); see
also 28 C.F.R. § 540.102.
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O'Brien's brother. When Faherty asked O'Brien what she would like
to say to PN, O'Brien stated:
My feeling and my situation in terms of my obligation to
[PN] has not changed and will not change. And I am
trying to do whatever I can to make sure that my
obligation is taken care of. I’d rather it be taken
care of sooner rather than later. But a lot is going to
depend I’m thinking on, you know, what people decide
they want to talk to the U.S. Attorney about and um, you
know, how much he wants to make this a big deal. I
don’t, you know, I don’t know how else to say [it].
During another call with Faherty the same day, O'Brien stated:
I’m totally sick about it and I wish that I could be,
you know, more forthcoming to you right now but it
. . . and the matter is I simply can’t [be]cause I don’t
have anything in front of me. And that’s why I’m trying
to get out of here because everything they’ve got me in
here for is completely false. And, but when she says
that she invested in me it -- and I’m not trying to put
words into her mouth -- but I am, or to say something
that it wasn’t, it was that she believed in me in terms
of the business I was trying to build, but the money
that came to me was in the form of personal loans. As
far as I’m concerned that’s what it was and I believe
that that’s what she would say. But she would say it in
terms of, yes she felt that she was helping me build my
business.
Based on this conduct, the PSR recommended that a two-
level enhancement for obstruction of justice be imposed. O'Brien
objected to the enhancement, both in her objections to the PSR and
at sentencing, contending that principles of res judicata and
collateral estoppel barred the court's consideration of the
enhancement, or, in the alternative, that, taken in context, her
statements to Faherty did not demonstrate a "willful intent to
obstruct justice." Both contentions are meritless.
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As to O'Brien's res judicata and collateral estoppel
arguments, she contends that, because her conversations with
Faherty were discussed at sentencing in her 2012 case, and no
obstruction-of-justice enhancement was imposed when the court
calculated her GSR, the government was not permitted to request,
and the court was not permitted to impose, the enhancement in this
case. This argument makes little sense. Putting aside the
question of when or if various preclusion doctrines might apply to
a district court's calculation of an advisory GSR, O'Brien's
obstructive conduct, as the government explained at sentencing,
was still being investigated when she was sentenced in her 2012
case, and the question of whether the enhancement applied was never
decided. Hence, the district court was in no way precluded from
considering the obstruction-of-justice enhancement.
As to O'Brien's claim that her actions did not
demonstrate a willful intent to obstruct justice, she argued at
sentencing that she specifically told Faherty that she was not
trying to influence him or "to put words in [PN's] mouth," and
that the conversation, taken in context, did not demonstrate
obstructive intent. The district court, however, rejected these
claims after the following exchange with O'Brien's attorney:
THE COURT: So, if somebody in a conversation says, "I’m
not trying to influence you" and then in the next
sentence says, "I am trying to influence you," the second
statement doesn’t count?
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MS. PUCCI: Well, I just -- I disagree that any of these
statements are clear.
THE COURT: Well, I mean, but that’s the bottom line is,
if the conversation is inconsistent when one thing says,
I’m not trying to influence you and then in the next
breath, she says, But you know, if they want to get
repaid, they’d better not talk to the Feds, does the
first statement negate the second one?
MS. PUCCI: Well, you have to look at overall, Your Honor,
whether there was willful intent to obstruct. So, I
understand the point the Court is trying to make. I
would argue that none of the statements clearly have her
trying to get the victims to say anything different, and
some of them are clear implications that she’s backing
off and saying, Look, I’m not trying to get you to advise
her to say something different.
THE COURT: All right. I’ve heard enough, and the
objection is overruled. I will accept the
recommendation of the Probation Officer to apply a two-
level increase for obstruction of justice.
O'Brien claims that the district court's failure to make
particularized factual findings before imposing the enhancement
amounts to reversible error. However, such findings are
unnecessary where the sentencing court speaks generally to the
pertinent considerations and the relevant facts are apparent from
the record. See United States v. Aker, 181 F.3d 167, 172 (1st
Cir. 1999) ("Although particularized findings are certainly
helpful, the ultimate question is whether the district judge did
find a willful obstruction or attempted obstruction and whether
the evidence supports these findings.") (citation omitted). Here,
the PSR spelled out the factual underpinnings for the enhancement
-- which O'Brien did not contest -- and the government argued that
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those facts demonstrated that O'Brien attempted to unlawfully
influence one of her victims not to cooperate with the government
by suggesting that the victim had a better chance of getting repaid
if she did not do so. Although O'Brien asserts that she, in fact,
had no obstructive intent, and that her conduct did not "amount to
a threat, intimidation, or unlawful influence," within the meaning
of U.S.S.G. § 3C1.1, the record fully supports the district court's
contrary inference from the record. Hence, the district court did
not clearly err. See United States v. Jones, 778 F.3d 375, 383
(1st Cir. 2015) ("When the raw facts are susceptible to more than
one reasonable inference, a sentencing court's choice between
those competing inferences cannot be clearly erroneous.").
Finally, O'Brien argues that her statements, within the
context of a communication with a victim's attorney, fail to
demonstrate obstructive intent. This argument, however, simply
provides a new and irrelevant gloss on O'Brien's other arguments.
Attempting to influence a witness not to cooperate with the
government, either directly or indirectly, is just the type of
conduct covered by § 3C1.1. See United States v. Monell, 801 F.3d
34, 50-51 (1st Cir. 2015) (upholding obstruction-of-justice
enhancement where defendant attempted to persuade others to
testify falsely); United States v. Anderson, 139 F.3d 291, 298
(1st Cir. 1998) (upholding obstruction-of-justice enhancement
where defendant instructed his son to give victim $3,500 to retract
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accusations). The fact that O'Brien's statements were made
indirectly through a victim's attorney does not make them any less
obstructive.4 Not only do the guidelines not make this
distinction, see § 3C1.1 cmt. n.2, but we can find no support for
it in our precedent, or for O'Brien's assertion that Faherty, as
an attorney, was required to warn her that her comments could be
construed as obstructive. In sum, the district court drew a
reasonable inference from the undisputed facts that O'Brien
attempted to improperly influence one of her victims through that
victim's counsel. No more was required.
B. Vulnerable Victim Enhancement
Under U.S.S.G. § 3A1.1(b)(1), the defendant's offense
level is raised two levels if "the defendant knew or should have
known that a victim of the offense was a vulnerable victim." The
Guidelines define a "vulnerable victim" as "a person (A) who is a
victim of the offense of conviction . . . ; and (B) who is unusually
vulnerable due to age, physical or mental condition, or who is
otherwise particularly susceptible to the criminal conduct."
U.S.S.G. § 3A1.1, cmt. n.2. "We have interpreted the term
'susceptible to the criminal conduct' as being 'primarily
concerned with the impaired capacity of the victim to detect or
4 Moreover, as the government notes in its brief, and O'Brien
did not dispute, she also reached out to several victims from
prison.
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prevent the crime, rather than the quantity of the harm suffered
by the victim.'" United States v. Bailey, 405 F.3d 102, 113 (1st
Cir. 2005) (quoting United States v. Donnelly, 370 F.3d 87, 92
(1st Cir. 2004)).
A sentencing court must make two separate determinations
before imposing a § 3A1.1(b)(1) enhancement. First, the court
must conclude "that the victim of the crime was vulnerable, that
is, that the victim had an 'impaired capacity . . . to detect or
prevent the crime.'" Donnelly, 370 F.3d at 92 (quoting United
States v. Fosher, 124 F.3d 52, 55–56 (1st Cir. 1997)). Second, the
court must find "that the defendant knew or should have known of
the victim's unusual vulnerability." Id.
O'Brien objected to the vulnerable-victim enhancement,
both in her objections to the PSR and at the sentencing hearing,
contending that (1) her victims were not "unusually vulnerable"
within the meaning of U.S.S.G. § 3A1.1(b)(1); and (2) because she
already received a four-level enhancement under U.S.S.G.
§ 2B1.1(b)(19)(A)(iii) for violating securities laws as an
investment adviser, imposing the vulnerable-victim enhancement for
defrauding her clients amounted to impermissible double counting.
We reject both arguments.
As to O'Brien's first argument, she asserted that her
victims were not unusually vulnerable because, despite their age,
they were "college-educated women who chose to invest their funds"
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with her, yet she failed to contest any of the facts set forth in
the PSR characterizing her victims. As the Probation Officer
explained in response to O'Brien's objections:
The victims in this case are not characterized as
vulnerable victims solely due to their age, but
primarily due to each of their individual circumstances
and the nature of their relationships with the
defendant. As explained by the government in the
additional information provided in response to the
defendant's objections, each of the victims trusted the
defendant as a close friend and became entirely
dependent on her to manage their financial affairs when
they were faced with difficult personal circumstances.
By virtue of the defendant's close relationships with
these woman [sic], the defendant knew that they were
particularly susceptible to the criminal conduct.
As the PSR went on to explain, one victim, EG, "was 70 years old
at the time of the fraud against her, and had recently had a stroke
that left her permanently disabled and unable to work." Another
victim, KD, was "89 years old, recently widowed, and had serious
health problems at the time of the fraud against her in 2012."
Given these unchallenged facts, the district court did
not err in applying the enhancement. Indeed, we have upheld a
vulnerable-victim enhancement under similar circumstances. See
United States v. Pol-Flores, 644 F.3d 1, 4 (1st Cir. 2011)
(upholding vulnerable-victim enhancement because victim was
"particularly susceptible [to fraud] based on her advanced age,
status as a widow, difficulty resolving her husband's estate, and
desire to invest the money to establish an income").
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Moreover, as the government argued at sentencing,
O'Brien had many other clients as an investment adviser, but she
chose only to defraud those who were financially unsophisticated,
had weak support networks, or were in frail health. Although
O'Brien asserts on appeal that the district court erred by failing
to specifically articulate why each victim qualified as
vulnerable, the district court was entitled to accept the
uncontested facts in the PSR as true. See United States v.
Prochner, 417 F.3d 54, 66 (1st Cir. 2005) (upholding reliance on
a PSR's listing of victims and loss amounts "[i]n the absence of
rebuttal evidence beyond defendant's self-serving words"); United
States v. Cyr, 337 F.3d 96, 100 (1st Cir. 2003) ("[I]f the
defendant's objections to the PSR are merely rhetorical and
unsupported by countervailing proof, the district court is
entitled to rely on the facts in the PSR."). Here, the vulnerable-
victim enhancement is amply supported by the record.
O'Brien's contention that the vulnerable-victim
enhancement is already accounted for in the four-level enhancement
under U.S.S.G. § 2B1.1(b)(19)(A)(iii) is also without merit.
Section 2B1.1(b)(19)(A) applies where "the offense involved . . . a
violation of securities law and, at the time of the offense, the
defendant was . . . an investment adviser." The focus of this
enhancement, like the more general "abuse of position of trust or
use of special skill" enhancement under § 3B1.3, is on the
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defendant's conduct: the use of her position as an investment
adviser to commit her crimes. For this reason, the guidelines
specifically prohibit the application of both a § 2B1.1(b)(19)(A)
enhancement and an abuse-of-trust enhancement under § 3B1.3 in the
same case. See U.S.S.G. § 2B1.1, cmt. n.15(C) ("If
[§ 2B1.1](b)(19) applies, do not apply § 3B1.3.").
Unlike the focus of the investment-adviser and abuse-
of-trust enhancements, however, the focus of the vulnerable-victim
enhancement under § 3A1.1(b)(1) is the "vulnerability of the victim
and the defendant's awareness of that vulnerability." United
States v. Stella, 591 F.3d 23, 30 (1st Cir. 2009). Because "[n]ot
all [investment-adviser frauds] involve vulnerable victims
. . . there is no double counting." Id. Indeed, the kind of
"double counting" O'Brien objects to is "often perfectly proper"
where two enhancements address different sentencing concerns. Id.
at 30 n.9 (quoting United States v. Lilly, 13 F.3d 15, 19 (1st
Cir. 1994)), and we have upheld the imposition of similar
enhancements over a defendant's "double-counting" objections. See
id. at 30; see also United States v. Burnett, 805 F.3d 787, 795
(7th Cir. 2015) (upholding imposition of both abuse-of-trust and
vulnerable-victim enhancements because "the two enhancements
punished different aspects of [the defendant]'s conduct").
Further, although "some guidelines expressly prohibit
applying certain enhancements because doing so would lead to double
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counting," we will rarely find that two enhancements impermissibly
overlap where the guidelines make no explicit prohibition. See
Stella, 591 F.3d at 30 n.9; see also Lilly, 13 F.3d at 19 ("We
believe the [Sentencing] Commission's ready resort to explicitly
stated prohibitions against double counting signals that courts
should go quite slowly in implying further such prohibitions where
none are written."). Thus, although the guidelines explicitly
prohibit the application of both an investment-adviser enhancement
under U.S.S.G. § 2B1.1(b)(19)(A)(iii) and an abuse-of-trust
enhancement under U.S.S.G. § 3B1.3, the guidelines contain no
explicit bar against imposing a vulnerable-victim enhancement
along with either of those two enhancements. We see no reason to
read such a prohibition into the guidelines where the Sentencing
Commission has declined to do so. See United States v. Fiume, 708
F.3d 59, 62 (1st Cir. 2013) ("Given the Commission's proclivity
for indicating when double counting is forbidden, we are reluctant
to infer further such instances out of thin air.").
C. Substantive Reasonableness
Finally, O'Brien claims that her bottom-of-the-
guidelines sentence was substantively unreasonable. For a
preserved challenge to the substantive reasonableness of a
sentence, "we proceed under the abuse of discretion rubric, taking
account of the totality of the circumstances." United States v.
Ruiz-Huertas, 792 F.3d 223, 226 (1st Cir. 2015). O'Brien, however,
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did not object below. In such cases, the applicable standard of
review in this circuit is "somewhat blurred" as to whether the
ordinary abuse of discretion standard or the plain error standard
applies. Id. at 228. Regardless, we need not decide this issue
because O'Brien's claim fails under either standard.
As we have repeatedly emphasized, a challenge to the
substantive reasonableness of a sentence is particularly
unpromising when the sentence imposed comes within the confines of
a properly calculated GSR. Cox, 851 F.3d at 126. We will deem a
sentence substantively reasonable "so long as it rests on a
'plausible sentencing rationale' and embodies a 'defensible
result.'" Ruiz-Huertas, 792 F.3d at 228 (quoting United States v.
Martin, 520 F.3d 87, 96 (1st Cir. 2008)). "[T]here is not a single
reasonable sentence but, rather, a range of reasonable sentences,"
and, "[c]onsequently, reversal will result if -- and only if --
the sentencing court's ultimate determination falls outside the
expansive boundaries of that universe." Martin, 520 F.3d at 92.
The district court's rationale for the sentence was
clear and justified. In sentencing O'Brien, the court emphasized
the "utter depravity" of her conduct, which it described as
"bilking vulnerable friends . . . out of their entire life savings
for what can only be described as your insatiable greed." The
court further justified the sentence, explaining that a
"significant sentence" was necessary, "not only to deter you from
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ever committing another such crime but also to deter anyone else
who thinks he or she can bilk innocent investors out of their hard-
earned money." Given the undisputed facts of this case, the
bottom-of-the-guidelines sentence imposed falls well within the
universe of reasonable sentences, and none of O'Brien's contrary
assertions have any merit.
Affirmed.
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