United States v. Peter Chui Lin Wong , 2 F.3d 927 ( 1993 )

SCHROEDER, Circuit Judge:

In this case, we once again are asked to review the relevant conduct provisions of the Sentencing Guidelines, U.S.S.G. § 1B1.3. Appellant Peter Chui Lin Wong contends that these provisions, which allow the consideration of total losses from groupable offenses as identified in section 3D1.2(d), violate the statutory mandate of the Sentencing Guidelines’ authorizing legislation. He asks us to determine that the Sentencing Commission exceeded the scope of its statutory authority when it promulgated the relevant conduct provisions of the Sentencing Guidelines. The Eighth Circuit en banc has recently rejected a similar contention, United States v. Galloway, 976 F.2d 414 (8th Cir.1992) (en banc). We conclude that we must reach the same result.

Wong was charged in 1989 with 18 counts of bank fraud in violation of 18 U.S.C. § 1344 and five counts of false claims in violation of 18 U.S.C. § 1001 in a superseding indictment. Wong was alleged to have used his business, the Pacific Atlantic Trading Company (“PATCO”), to receive loans or extensions of credit from a number of banks based on false bills of lading. Wong pleaded guilty to two counts. The first was a bank fraud count against the Bank of Trade under 18 U.S.C. § 1344. The second was another charge of bank fraud against the Bank of Credit and Commerce International.

Bank fraud, as a crime of fraud, falls within U.S.S.G. § 2F1.1, and so is a groupable offense under section 3D1.2 of the Sentencing Guidelines. The relevant conduct provisions allow the sentencing judge to take account of “all such acts and omissions that were part of the same course of conduct or common scheme or plan as the offense of conviction” for crimes which qualify under section 3D1.2(d). U.S.S.G. § lB1.3(a)(2). For bank fraud, the “offense level is determined largely on the basis of the total amount of harm or loss,” which here would be the total financial loss from Wong’s scheme. U.S.S.G. § 3D1.2(d).

The plea agreement identified a total amount of loss of $4.3 million arising from Wong’s scheme; this amount included losses from all the indicted charges. Such an amount would lead to an offense level of 18 and a 27-33 month sentence range. At sentencing, the government urged the district court to consider a higher figure of $8.3 million, based on losses from the total scheme, including losses from crimes for which Wong was not indicted. The Presen-tence Report used the $8.3 million figure and recommended an offense level of 19 and a sentence range of 30-37 months.

Appellant argued at sentencing that his sentence should be based only on the total losses from the two counts to which he pleaded guilty, amounting to $100,000. Appellant’s $100,000 figure would result in an offense level of 13 and a sentence of 12 to 18 months.

The district court imposed a sentence of 30 months, based on an offense level of 18. The sentence was consistent with the $4.3 million figure described in the plea agreement.

Appellant’s first argument is that this court’s panel decision in United States v. Fine, 946 F.2d 650 (9th Cir.1991), prohibits the district court from relying on dismissed counts in determining the applicable guideline range. However, this court has since ruled en banc that the relevant conduct provisions allow the sentencing judge to take into account groupable offenses which were charged but to which the defendant has not pleaded guilty. United States v. Fine, 975 F.2d 596 (9th Cir.1992) (en banc). Both Wong and Fine were guilty of fraud, crimes which fall under section 2F1.1 of the Guidelines, and so are groupable under the relevant conduct provisions of section 1B1.3(a)(2). The en banc decision in Fine controls and forecloses the interpretation urged by appellant.

Appellant next argues that if the relevant conduct provisions of the Guidelines permit consideration of the fraud offenses that were charged but dismissed, then the relevant conduct provisions exceed the statutory mandate of the United States Sentencing Guidelines. 28 U.S.C. §§ 991, 994. Although Fine does not directly address the question of whether the relevant conduct provisions are authorized by the statute, it does explicitly recognize that prior to the Sentencing Guidelines, judges had “ ‘broad latitude ... [to] consider evidence of counts for which an indictment has been dismissed.’” Fine, 975 F.2d at 600 (quoting United States v. Lewis, 862 F.2d 748, 750 (9th Cir.1988), cert. denied, 489 U.S. 1032, 109 S.Ct. 1169, 103 L.Ed.2d 227 (1989)). Nothing in Fine or in the history of the Guidelines’ authorizing statutes suggests that Congress intended to circumscribe that latitude. Appellant points to 28 U.S.C. § 991(b)(1)(B) and § 994(f), which direct the Sentencing Commission to avoid sentencing disparities among defendants found guilty of “similar criminal conduct.”¹ He contends that these sections forbid any sentence that takes into account crimes which the defendant may have committed but which were not part of the crime of conviction. Yet the language relied upon contains no such limiting principle. Indeed, the message Congress has conveyed is to avoid disparity but to retain the flexibility to consider both “mitigating” and “aggravating” factors. In 28 U.S.C. § 994(e)(2) Congress authorized the Commission to promulgate guidelines that take into account “the circumstances under which the offense was committed which mitigate or aggravate the seriousness of the offense.” The relevant conduct provisions can be seen as an effort to implement that objective. Whatever we may conclude about the wisdom of the Commission in directing courts to impose sentences based on conduct related to, but not part of, the crime of conviction, we cannot conclude that Congress has forbidden the Commission to do so.

The Eighth Circuit has recently rejected a similar statutory challenge to the relevant conduct provisions. United States v. Galloway, 976 F.2d 414 (8th Cir.1992) (en banc). The majority in Galloway agreed that section 1B1.3 is authorized by the broad grant of authority in § 994(c)(2) of the statute.

Section 994(c)(2) of title 28 allows the Commission to promulgate guidelines that take into account “the circumstances under which the offense was committed which mitigate or aggravate the seriousness of the offense.” More generally, the preceding language in section 994(c) orders the Sentencing Commission to “consider whether [certain factors later enumerated within the statute], among others, have any relevance” in establishing guidelines and policy statements to determine sentences. 28 U.S.C. § 994(c) (emphasis added). The open-ended language “among others” invites the Commission to consider sentencing factors that Congress failed to specifically list. See S.Rep. No. 98-225, 98th Cong., 2d Sess. at 169 (1983), reprinted in 1984 U.S.C.C.A.N. 3182, 3352 (“The Sentencing Commission is also required under subsection (c) [of section 994] to determine whether other factors not specifically listed are relevant to the sentencing decision.”).

We are satisfied that within the broad grants of authority to the Commission, this specific statutory language of section 994(c)(2) gives the Commission full authority to adopt a relevant conduct guideline, although it certainly cannot be said that the Commission was required to do so.

Id. at 420. As the Eighth Circuit went on to point out, even if the statute is “silent or ambiguous with respect to the specific issue, the question for the court is whether the agency’s answer is based on a permissible construction of the statute.” Id. (citing Chevron U.S.A., Inc. v. National Resources Defense Council, Inc., 467 U.S. 837, 842-43, 104 S.Ct. 2778, 2782, 81 L.Ed.2d 694 (1984)).

The Fifth, Sixth and Seventh Circuits have also found that the relevant conduct provisions fall within the statutory mandate. See United States v. Davern, 970 F.2d 1490 (6th Cir.1992) (en banc); United States v. Thomas, 932 F.2d 1085 (5th Cir.1991), cert. denied, - U.S. -, 112 S.Ct. 264, 116 L.Ed.2d 217 (1991 and 1992); United States v. Ebbole, 917 F.2d 1495 (7th Cir.1990). We agree with these circuits that section 1B1.3 falls within the broad meaning of the Sentencing Guidelines statute.

The holding which the dissenting judges in Galloway would like to reach is actually a very narrow one. It is stated by Judge Beam: “I would hold the provision unenforceable insofar as it permits offenders to be systematically penalized for factually and temporally distinct property crimes that have neither been charged by indictment nor proven at trial.” 976 F.2d at 433. In our case, Wong’s crimes were charged by the indictment, so that even under the dissenters’ view articulated in Galloway, Wong’s entire fraud scheme would be considered at sentencing. While appellant’s brief refers to uncharged crimes, the district court based its sentence on total losses from the indicted offenses, not on uncharged conduct. The sentence is even based upon the amount identified in the plea agreement. Here, despite the remonstrations of Judge Norris’ dissent, application of the Guidelines has worked no unfairness.

The appellant’s constitutional challenge to the relevant conduct provisions is precluded by our decision in United States v. Restrepo, 946 F.2d 654 (9th Cir.1991) (en banc). We there held that the preponderance of the evidence standard at sentencing does not violate due process where the resulting sentence is not exceptionally disproportionate to that which would be imposed on the conduct underlying the crimes proved at trial.

Finally, appellant’s argument that the district court erred in applying the multiple counts section of the Guidelines, § 3D1.1, is misplaced. Wong was sentenced under section 1B1.3, not section 3D1.1. The section 3D1.2 provisions were used to identify what counts as a “groupable” offense under section 1B1.3.

We therefore reject appellant’s arguments and AFFIRM the sentence of the district court.

1 . 28 U.S.C. § 991(b)(1)(B) provides:

(b) The purposes of the United States Sentencing Commission are to—

(1) establish sentencing policies and practices for the Federal criminal justice system that—

(B) provide certainty and fairness in meeting the purposes of sentencing, avoiding unwarranted sentencing disparities among defendants with similar records who have been found guilty of similar criminal conduct while maintaining sufficient flexibility to permit individualized sentences when warranted by mitigating or aggravating factors not taken into account in the establishment of general sentencing practices....

28 U.S.C. § 994(f) provides:

(f) The Commission, in promulgating guidelines pursuant to subsection (a)(1), shall promote the purposes set forth in section 991(b)(1), with particular attention to the requirements of subsection 991(b)(1)(B) for providing certainty and fairness in sentencing and reducing unwarranted sentence disparities.