United States v. Kieffer

FILED
United States Court of Appeals
Tenth Circuit
June 11, 2012
PUBLISH Elisabeth A. Shumaker
Clerk of Court
UNITED STATES COURT OF APPEALS
TENTH CIRCUIT
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v. No. 10-1391
HOWARD O. KIEFFER,
Defendant-Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
(D.C. No. 1:09-CR-00410-CMA-1)
Karin M. Fojtik, Assistant United States Attorney (Carlie Christensen, United States
Attorney, with her on the brief), Salt Lake City, Utah, for Plaintiff-Appellee.
Gail K. Johnson, Johnson & Brennan, PLLC, Boulder, Colorado, for Defendant-
Appellant.
Before TYMKOVICH, BALDOCK, and HOLMES, Circuit Judges.
BALDOCK, Circuit Judge.
Oh what a tangled web we weave, when first we practice to deceive!
Sir Walter Scott
Scottish Novelist (1771–1832)
By all appearances, Defendant Howard Kieffer had a successful nationwide
criminal law practice based in Santa Ana, California. Defendant held himself out as
Executive Director of Federal Defense Associates, and touted his services through
websites, legal conferences, and professional contacts. As early as 1997, Defendant
appeared as co-counsel of record in United States v. Olsen, 1997 WL 67730 (9th Cir.
1997) (unpublished). Over the next few years, Defendant gained admission to a slew
of federal trial and appellate courts around the country, where he appeared on behalf
of numerous criminal defendants. All the while, Defendant had a secret. He is not
and never has been an attorney. He never went to law school, never sat for a bar
exam, and never received a license to practice law.
Defendant no longer has a secret. In 2009, a jury in the District of North
Dakota convicted Defendant of mail fraud, in violation of 18 U.S.C. § 1341, and
making false statements, in violation of 18 U.S.C. § 1001. The jury found Defendant
gained admission to the District of North Dakota by submitting a materially false
application to the court. He then relied on that admission to gain admission to the
District of Minnesota, District of Colorado, and Western District of Missouri. Once
admitted in those districts, Defendant proceeded to appear on behalf of federal
criminal defendants unaware of his true identity. The district court sentenced
Defendant to 51 months imprisonment and ordered him to pay $152,750 in restitution
to six victims of his scheme. The Eighth Circuit affirmed. United States v. Kieffer,
621 F.3d 825 (8th Cir. 2010).
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Defendant’s web of deception continued to unravel in 2010 when a jury in
the District of Colorado also convicted him of making false statements in violation
of § 1001, in addition to wire fraud, in violation of 18 U.S.C. § 1343, and contempt
of court, in violation of 18 U.S.C. § 401. As to the false statements count, the jury
found that to gain admission to the District of Colorado, Defendant fraudulently
represented to the court clerk’s office that he was licensed to practice law in the
District of Columbia. As to the wire fraud count, the jury found Defendant used a
website, www.boplaw.com, to promote his unauthorized practice of law and bilk a
criminal defendant’s brother out of several thousand dollars. Lastly, as to the
contempt count, the jury found Defendant jeopardized the administration of justice
by lying to the clerk’s office and purporting to represent that criminal defendant
before the district court. The district court sentenced Defendant to 57 months
imprisonment to run consecutively to the 51 month sentence previously imposed on
him in the District of North Dakota. The court further ordered him to pay restitution
in the amount of $152,019 to seven victims of his scheme unaccounted for in North
Dakota, and directed him as a special condition of supervised release to obtain
the probation office’s preapproval of any proposed employment or business ventures.
Defendant now appeals his most recent convictions and sentence. Our jurisdiction
arises under 28 U.S.C. § 1291 and 18 U.S.C. § 3742(a)(2). For reasons to follow,
we affirm the district court’s judgment of conviction, but vacate its judgment of
sentence on the wire fraud and false statements counts, and remand for resentencing.
3
I.
Defendant presents three challenges to his convictions in the District of
Colorado. Each is based on his Sixth Amendment right to have the Government
prove, and a jury find, all elements of the charged crimes beyond a reasonable doubt.
First, Defendant asserts he is entitled to a judgment of acquittal on the wire fraud
count because the Government failed to prove all of § 1343’s necessary elements.
Specifically, Defendant argues the Government’s evidence failed to establish that his
internet communications (1) traveled in interstate commerce or (2) were used for the
purpose of executing a scheme to defraud. Second, Defendant asserts he is entitled
to a new trial on all counts because the district court’s “reasonable doubt” instruction
erroneously defined that term and shifted the burden of proof to him.
Defendant further presents five challenges to his sentence, three of which bear
directly upon the district court’s application of the Sentencing Guidelines. First,
Defendant asserts the district court improperly included his sentence in the District
of North Dakota in its criminal history calculation under U.S.S.G. § 4A1.1, rather
than the offense underlying that sentence in its consideration of relevant conduct
under § 1B1.3. Second, Defendant contends the district court’s failure to consider
his offense in the District of North Dakota as relevant conduct enabled it to impose
a sentence consecutive to the sentence imposed on him in North Dakota, contrary to
§ 5G1.3. Third, Defendant asserts the court failed on the evidence presented to make
a reasonable estimate of loss amounts under § 2B1.1 in its calculation of his offense
4
level. Defendant also challenges the district court’s restitution order based on the
Government’s failure to prove actual loss amounts to identified victims of his
scheme by a preponderance of the evidence, as required by 18 U.S.C. § 3664(e).
Lastly, Defendant challenges, as contrary to 18 U.S.C. §§ 3563(b)(5), the court’s
imposition of the special condition of supervised release that he obtain the probation
office’s approval before undertaking any occupational endeavor.
We present our discussion of Defendant’s numerous legal challenges in two
parts and various subparts. In Part II, we address Defendant’s three challenges to
his convictions. First, we set forth in a light most favorable to the Government the
trial evidence relevant to Defendant’s § 1343 conviction. See United States v. Bass,
661 F.3d 1299, 1307 (10th Cir. 2011). We then analyze Defendant’s sufficiency
challenges to that conviction based on the evidence and the applicable law. We
conclude Part II by analyzing Defendant’s challenge to the district court’s reasonable
doubt instruction. In Part III, we address Defendant’s five challenges to his
sentence. We begin by summarizing the presentence proceedings through the final
sentencing hearing. Therein, we include additional facts which the Government did
not present at trial, but which the district court considered in reaching its sentencing
decision. We then analyze Defendant’s sentencing challenges, as well as the
Government’s assertion of harmless error, based on the record evidence and
applicable sentencing statutes and guidelines.
5
II.
We begin our recitation of the evidence with the trial testimony of Natalie
Sterling. Sterling is the custodian of records for both Network Solutions and Name
Secure, a subsidiary of Network Solutions. Network Solutions and Name Secure are
domain name registrars headquartered in Herndon, Virginia. In addition to being a
registrar, parent company Network Solutions provides hosting services for websites.
On direct examination, Sterling made no distinction between Network Solutions and
Name Secure. On cross-examination, Sterling clarified that she was the custodian
of records for both companies. She explained (1) Name Secure was “a separate
functioning registrar from Network Solutions,” (2) anyone who wanted to register
a domain name could “go through” either Name Secure or Network Solutions, and
(3) Network Solutions, “in addition to being a registrar, provides hosting services.”
Rec. vol. 3, at 219–22.
Sterling explained that a domain name is necessary to create a website. Once
a purchaser registers a domain name with either Network Solutions or Name Secure,
that purchaser may create an internet website associated with the domain name. As
long as that registration is maintained, the domain name is exclusive to the registrant.
Q. Once a registrant registers their web site name with your
company, is that web site available on the internet?
A. It is.
Q. And how does that website name get broadcast over the internet,
for lack of a better term?
A. When a customer purchases the domain name, they would
associate files with that domain name and then those files would
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be available on the internet.
Q. Do you guys operate servers or anything like that?
A. We do.
Q. And where are those servers located?
A. Sterling, Virginia.
Q. And what do those servers function to do? What is their job?
A. They process and store data.
Q. Okay. When you say “process and store data,” do they help
distribute the web site information over the internet?
A. Yes.
Q. Okay. So anyone who would register a domain name with your
company, would that site be viewable anywhere in the United
States?
A. Yes.
Rec. vol. 3, at 199–200. Based on records maintained in a customer service database
by Network Solutions, labeled Plaintiff’s Exhibit 9, Sterling testified that on May 13,
2004, one Howard Kieffer, P.O. Box 206, Santa Ana, California, 92702, registered
the domain name boplaw.com with Name Secure. Kieffer reported his email address
as hkieffer@dcounsel.com. That registration, which Network Solutions’ records
indicated was last updated in September 2006, expired on May 13, 2010.
FBI Special Agent David Carr testified that in April 2010 he utilized a website
known as archive.org to review boplaw.com. Archive.org allows one to access
screen shots of web pages that no longer actively appear on the internet. In other
words, archive.org “endeavor[s] to go out and capture what’s on the Internet” at a
particular point in time. Rec. vol. 3, at 459. The contents of the boplaw.com
website, labeled Plaintiff’s Exhibit 8, and, according to Agent Carr, last updated in
June 2006, promoted Federal Defense Associates (FDA). In bold lettering, the
website’s “Home” page described FDA’s “Practice [as] Limited to Application of
7
Federal Sentencing Guidelines, Post-Conviction and Bureau of Prisons Issues.” The
homepage prominently displayed the member symbol of the National Association of
Criminal Defense Lawyers. The “Firm Profile” page described “Mr. Kieffer,” the
only individual whose name appeared anywhere on the website, as having “served
on the faculty of programs sponsored by,” among others, the “National Association
of Criminal Defense Lawyers (NACDL), . . . and the Federal Bureau of Prisons
(BOP).” The “Mission” page stated FDA “is committed to providing defense counsel
and their clients with specialized, creative and tenacious criminal defense, post
conviction representation and Bureau of Prison advocacy.” The “Attorneys Only”
page described “How It Works:” “Following initial consultation, the Firm reviews
relevant court records . . . and client data. The attorneys confer to develop
sentencing strategies. . . . Unlike the ‘paralegal firm’ providing ‘consulting
services,’ we are bound by the Rules of Professional Responsibility.” Finally, on the
“Contact Us” page, the website listed the following contact information:
Federal Defense Associates
Howard O. Kieffer
Executive Director
34 Civic Center Plaza
P.O. Box 206
Santa Ana, California 92702
Telephone: 714-836-6031
Facsimile: 714-543-5890
email: hkieffer@dcounsel.com
8
Government witness Gail Shifman, a criminal defense attorney practicing in
San Francisco, testified she met Defendant through NACDL. Shifman spoke with
Defendant at NACDL conferences on multiple occasions. Shifman stated Defendant
“had a lot of knowledge about BOP issues. He ran—he told me he ran a website.
And I had been on [Defendant’s] list serve, I think it was, or e-mail listing for
bop.gov and bopwatch maybe.” Rec. vol. 3, at 112. Shifman stated Defendant “held
himself out to be a lawyer.” Id. at 114. In September 2006, both Shifman
and Defendant attended a NACDL conference in Washington, D.C. During the
conference, another attendee informed Shifman that Defendant was not a lawyer.
Shifman promptly sent Defendant an email at hkieffer@dcounsel.com, labeled
Plaintiff’s Exhibit 16, asking him to clarify his status because “if it is correct that
you are not a licensed attorney, then you’ve directly lied to me on more than one
occasion.” Defendant responded to Shifman via return email, a part of Plaintiff’s
Exhibit 16. Among other things, Defendant wrote:
In short, I am “licensed”—if that is the operative term (and I am not
sure that it is) in no state, but I have been admitted (for various
purposes) or specially appeared (in accord with local rules) in certain
(federal) jurisdictions.
I went to Antioch Law School—and graduated.
Defendant’s return email to Shifman concluded:
• Howard O. Kieffer
• Federal Defense Associates
• Santa Ana, California
• 714-836-6031 x 250
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• www.boplaw.com
• hkieffer@dcounsel.com
Shifman immediately contacted NACDL’s executive committee. Shortly thereafter,
she contacted the California State Bar and the FBI.
This was not the first time the FBI received a complaint about Defendant’s
legal escapades. Agent Dominic Anselmo testified that in 2004, the FBI received a
complaint regarding Defendant’s unauthorized practice of law. Apparently, that
complaint stemmed from Defendant’s involvement with an illegal alien convicted
of possessing a firearm. Anselmo phoned Defendant regarding the complaint.
According to Anselmo’s report, Defendant “acknowledged that he is not an attorney”
and was “aware that it is illegal to represent to . . . the courts that you are an attorney
when in fact you are not.” Rec. vol. 3, at 326. Defendant “explained that he [was]
only providing complainant administrative assistance while complainant was serving
his sentence.” Id. at 326–27. The FBI phoned Defendant a second time in late June
or early July 2007, again on a report, perhaps Shifman’s, that Defendant was engaged
in the unauthorized practice of law. This time Agent Carr posed as an individual
looking for an attorney to assist his imprisoned cousin. In a recording labeled
Plaintiff’s Exhibit 17, Defendant told Carr he had been practicing law in federal
court for twenty-five years. Defendant also told Carr he had a website and a listserv.
Defendant described his work to Carr as “sentencing and after. I’m always the last
lawyer hired, I’m always hired too late no matter how early that is.”
10
Stephen Bergman testified that in June 2007 he viewed boplaw.com on a
computer from his residence in Tennessee. Bergman stated Plaintiff’s Exhibit 8
reflected the content of that website. When asked if anything in Exhibit 8 looked
familiar, Bergman responded: “Yes, I recall seeing this on the Internet.” Rec. vol.
3, at 251. After viewing the website and speaking with Defendant over the phone,
Bergman met Defendant in Santa Ana, California, on June 26, 2007. Bergman
tendered Defendant $10,000 to defend his sister, Gwen Bergman, against criminal
charges filed in the District of Colorado after she allegedly paid an undercover “hit
man” $30,000 to murder her ex-husband. Defendant gave Bergman a business card
labeled Plaintiff’s Exhibit 11. That card named Howard O. Kieffer as Executive
Director of FDA. The card listed, among other things, a website—www.boplaw.
com—and email address—hkieffer@ dcounsel.com. Bergman testified that because
his sister was “being treated for a mental condition” in a federal prison, he was
“looking for an attorney [who] specialized in [BOP] issues.” Rec. vol. 3, at 248.
When asked what led him to think Defendant was an attorney, Bergman responded:
“I read certain things on—not just that website, but on another website where
[Defendant] had given other attorneys advice about [BOP] issues, so he seemed to
be somewhat of an expert . . . .” Id. at 250.
Before Defendant could enter his court appearance for Bergman’s sister,
however, he needed to be admitted to practice in the District of Colorado. As
attorney services coordinator in the federal district court clerk’s office, Mark
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Fredrickson processes applications for admission to the District of Colorado.
Fredrickson testified that according to both the district’s civil and criminal local
rules, an applicant for admission must be “licensed by the highest court of a state,
federal territory, or the District of Columbia, where a written examination was
required for admission.” Rec. vol. 3, at 177. Fredrickson stated that in October
2007, he was reviewing Defendant’s application, labeled Plaintiff’s Exhibit 1, when
he noticed Defendant had failed to indicate, as requested on the application form,
where he received his license to practice law. Instead, Defendant typed “N/A; See
Below” in the space provided. Below, where asked to indicate the courts in which
he had been admitted to practice, Defendant listed three federal courts, namely,
the Fourth and Ninth Circuit Courts of Appeals and the District of North Dakota.
Fredrickson phoned Defendant at the number listed on the application to inquire.
Defendant informed Fredrickson “he was licensed in the District of Columbia.” Rec.
vol. 3, at 175. As a result, Fredrickson wrote “called, licensed to practice in D.C.”
on a sticky note, part of Plaintiff’s Exhibit 1, and placed it on Defendant’s
application. Fredrickson testified Defendant was admitted to the District of Colorado
on October 1, 2007, the date of his application’s file stamp.
On October 9, 2007, Defendant entered his appearance for Gwen Bergman,
labeled Plaintiff’s Exhibit 4, in United States v. Bergman No. 04-CR-180-WDM
(D. Colo., filed April 30, 2004). A few days later, Defendant commenced his in
court representation of Ms. Bergman, appearing on her behalf at a competency
12
hearing. Following a bench trial in May 2008, at which Defendant and co-counsel
represented Ms. Bergman, the district court found her guilty of solicitation to commit
murder and conspiracy to commit murder for hire. See United States v. Bergman,
599 F.3d 1142, 1145–46 (10th Cir. 2010) (tracing Defendant’s involvement in Ms.
Bergman’s prosecution). By June 7, 2008, Stephen Bergman had paid Defendant a
total of $65,750 to represent his sister. To pay Defendant’s escalating fee, Bergman
testified he took out a second mortgage on his home and his mother sold stock.
Prior to Defendant’s entry of appearance, Edward Pluss, an attorney with the
Federal Public Defender’s office in Denver, Colorado, represented Ms. Bergman.
Pluss testified that when he received notice of Defendant’s entry of appearance, he
accessed the internet and “looked up to see who Mr. Kieffer was.” Rec. vol. 3, at
142. Pluss recalled viewing “the website for Mr. Kieffer’s law firm on the internet.”
Id. Pluss stated that although “[i]t was a long time ago,” the website he had viewed
“look[ed] similar” to the contents of the boplaw.com website introduced through
Agent Carr and labeled Plaintiff’s Exhibit 8. Id. When asked what led him to
believe Defendant was an attorney, Pluss responded: “He entered an appearance to
represent Ms. Bergman. . . . I learned he was involved in the NACDL as an expert,
involving post-sentencing and the BOP issues. His website.” Id. at 146. Pluss
subsequently withdrew as counsel for Ms. Bergman.
Shortly after Ms. Bergman’s trial, Defendant’s web of deception began to
crumble. On June 12, 2008, Defendant received a show cause order from the District
13
of North Dakota inquiring into the veracity of statements he made on his application
for admission to that court. See In re Admission of Howard Kieffer, No. 08-MC-7-
DLH, Order to Show Cause (D.N.D., filed June 5, 2008). Bergman testified he
received a phone call from a reporter with the Denver Post around the same time.
That phone call led Bergman to believe Defendant might not be an attorney.
Bergman informed Defendant “there appears to be a problem” and “[t]hey’re saying
that you’re not an attorney.” Rec. vol. 3, at 263. Defendant referred to the matter
as “just a misunderstanding.” Id. On July 2, 2008, Defendant, now represented by
counsel, submitted his response, labeled Plaintiff’s Exhibit 14, to the District of
North Dakota’s show cause order. Therein, Defendant admitted he is “not a
member” of the bar of any state or other jurisdiction and “holds no degree” from
Antioch Law School. Rec. vol 3, at 356. Consistent with Defendant’s response, a
search of the bar records for the District of Columbia uncovered “[n]o record for
Howard O. Kieffer.” Id. at 276. Similarly, a search of the Antioch College of Law’s
records uncovered nary a trace that Defendant was “ever a student” there. 1 Id. at
289–90. On July 4, 2008, the District of Colorado suspended Defendant from the
practice of law. In February 2010, a grand jury in the District of Colorado returned
1
Antioch College of Law in Washington D.C. opened in 1972 and closed in
1988. Antioch University in Yellow Springs, Ohio, maintains the law school’s
records. Sometime in 2006, Defendant requested a copy of “his diploma” from
Antioch University’s transcript clerk. This, of course, set the records department on
a wild goose chase searching for something that did not exist. See Rec. vol. 3, at
286–90.
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a superceding indictment charging Defendant in Count I with wire fraud in violation
of 18 U.S.C. § 1343, in Count II with making false statements in violation of 18
U.S.C. § 1001, and in Count III with contempt of court in violation of 18 U.S.C.
§ 401. Two months later, a petit jury found Defendant guilty on all counts.
A.
Defendant first challenges the sufficiency of the evidence relating to his wire
fraud conviction under Count I of the superceding indictment. The federal wire
fraud statute, 18 U.S.C. § 1343, provides in relevant part:
Whoever, having devised or intending to devise any scheme or artifice
to defraud, or for obtaining money or property by means of false or
fraudulent pretenses, representations, or promises, transmits or causes
to be transmitted by means of wire, [or] radio . . . communication in
interstate . . . commerce, any writings, signs, signals, [or] pictures, . . .
for the purpose of executing such scheme or artifice, shall be fined
under this title or imprisoned not more than 20 years, or both.
By its plain terms, § 1343 required the Government to prove, among other things,
that Defendant (1) used interstate wire or radio (wireless) communications (2) for
the purpose of executing a scheme to defraud. See United States v. Cooper, 654
F.3d 1104, 1116 (10th Cir. 2011). According to Defendant, the Government proved
neither of these elements, and thus his wire fraud conviction cannot stand.
We well know that “no person shall be made to suffer the onus of a criminal
conviction except upon . . . evidence necessary to convince a trier of fact beyond a
reasonable doubt of the existence of every element of the offense.” Jackson v.
Virginia, 443 U.S. 307, 316 (1979). But this does not mean the evidence need
15
convince a trier of fact beyond all doubt. Rather, the evidence, both direct and
circumstantial, considered in a light most favorable to the Government, “need only
reasonably support the jury’s finding that the defendant is guilty of the offense
beyond a reasonable doubt.” United States v. Kaufman, 546 F.3d 1242, 1263 (10th
Cir. 2008). The evidence, together with the reasonable inferences to be drawn
therefrom, “must be substantial, but it need not conclusively exclude every other
reasonable hypothesis and it need not negate all possibilities except guilt.” United
States v. Kitchell, 653 F.3d 1206, 1228 (10th Cir. 2011). Mindful of the governing
standard, we proceed to review Defendant’s sufficiency challenges de novo. 2
2
The Government urges us to review Defendant’s sufficiency challenges
only for plain error because Defendant failed to raise in the district court the
particular grounds for relief he now presses upon us. To be sure, Defendant,
pursuant to Fed. R. Crim. P. 29(a), moved for a judgment of acquittal on Count I at
the close of the Government’s case on grounds different than those he now proffers.
And, as a general rule, when a defendant moves for a Rule 29 judgment of acquittal
in the district court on specified grounds, those grounds not specified are forfeited.
See United States v. Goode, 483 F.3d 676, 680–81 (10th Cir. 2007). But here,
Defendant sought to renew his motion after the close of all the evidence consistent
with Rule 29(a), only to be cut off by the district court:
Court: If there is nothing further, we’ll take a ten-minute break.
Counsel: I move for a judgment of acquittal based on the –
Court: I always forget, I’m sorry. Based on the same reason for
denying the Rule 29, I deny that motion.
Rec. vol. 3, at 461. Through no apparent fault of Defendant, we cannot be certain
of the unspecified grounds on which he planned to base his renewed motion for
judgment of acquittal. We therefore provide Defendant the benefit of de novo
review, while encouraging the district court to permit, within reason, a defendant to
make the record necessary to preserve possible error and ensure meaningful review.
16
1.
The sole legal basis on which Defendant argues the Government failed to
establish the interstate nature of his internet communications is United States v.
Schaefer, 501 F.3d 1197 (10th Cir. 2007), superceded by Effective Child
Pornography Prosecution Act of 2007, Pub. L. No. 110-358 (Oct. 8, 2008),
and overruled in part by United States v. Sturm, 672 F.3d 891 (10th Cir. 2012) (en
banc). We need not discuss the particulars of that war-torn decision here. Suffice
to say Schaefer still stands for the proposition that one individual’s use of the
internet, “standing alone,” is insufficient to establish that a web transmission
“traveled across state lines in interstate commerce.” Schaefer, 501 F.3d at 1200–01;
but see, e,g., United States v. Lewis, 554 F.3d 208, 214–16 (1st Cir. 2009) (holding
one’s use of the internet, “standing alone,” is enough to satisfy a penal statute’s “in
interstate . . . commerce” element); United States v. MacEwan, 445 F.3d 237, 244
(3d Cir. 2006) (same).
Like the statute at issue in Schaefer, the federal wire fraud statute requires a
transmission “in interstate . . . commerce.” 18 U.S.C. § 1343. In Schaefer, we
recognized that § 1343’s “‘in commerce’ terminology has been repeatedly held to
require that communications actually cross state lines to support a conviction.”
Schaefer, 501 F.3d at 1202; see, e.g., Smith v. Ayres, 845 F.2d 1360, 1366 (5th Cir.
1988) (Higginbotham, J.) (“As several courts have recognized, [§ 1343] requires that
the wire communication cross state lines.”). In his opening brief, Defendant says the
17
Government failed to carry its burden because it did not “present any evidence of
any interstate movement of a wire transmission posting a website advertising
[Defendant’s] legal services on the internet.” Considering, as we must, the evidence
in a light most favorable to the Government, together with the reasonable inferences
to be drawn therefrom, we disagree: A jury could view the Government’s evidence
as establishing the required interstate nexus.
We begin with some facts readily discernible from the record. First, at all
relevant times, Defendant was in control of the content of an internet website
with the domain name boplaw.com. 3 Second, Defendant registered the domain
3
At this point, we need address Defendant’s suggestion, made within the
context of his sufficiency challenges, that the district court abused its discretion
by admitting Plaintiff’s Exhibit 8 into evidence because the Government failed
to properly authenticate it. Exhibit 8, recall, portrays the screen shots of boplaw.
com from the relevant time period. Detective Carr testified he retrieved those shots
from archive.org. shortly before trial. Under Fed. R. Evid. 901(a), “[t]o satisfy the
requirement of authenticating or identifying an item of evidence, the proponent must
produce evidence sufficient to support a finding that the item is what the proponent
claims it is.” (emphasis added). The proponent can authenticate such item in
various ways, including by “[t]he appearance, contents, [or] substance, . . . of the
item, taken together with all the circumstances.” Id. R. 901(b)(4). The district court
need only “assess[] whether the proponent has offered a satisfactory foundation from
which the jury could reasonably find that the evidence is authentic.” United States
v. Vidacak, 553 F.3d 344, 349 (4th Cir. 2009). “The factual determination of
whether the evidence is that which the proponent claims is ultimately reserved for
the jury.” Id. In this case, the district court did not abuse its discretion in ruling that
Defendant’s objection to Exhibit 8 went to its weight rather than its admissibility.
Prior to Exhibit 8’s admission, Natalie Sterling testified that (1) a domain name
remains under the registrant’s exclusive control prior to the registration’s expiration;
(2) Defendant registered the domain name boplaw.com in May 2004; and (3) the
registration did not expire until May 2010. Unsurprisingly then, Detective Carr
characterized the screen shots obtained from boplaw.com through archive.org as
(continued...)
18
name boplaw.com with Name Secure, a subsidiary of Network Solutions. Third,
by definition, Network Solutions, as the parent company, owned and controlled
Name Secure. See Webster’s Third New Int’l Dictionary 2279 (1981) (defining
“subsidiary” as “belonging to or controlled by another”). Fourth, Network Solutions
operated host servers in Virginia that permitted a domain name registrant’s website
to be viewed on the internet once the registrant associated files with, i.e., uploaded
content under, the domain name. Fifth, Stephen Bergman and Edward Pluss accessed
boplaw.com from computers in Tennessee and Colorado, respectively.
At this point, a jury might reasonably infer that because Bergman and Pluss
accessed the content of boplaw.com from computers in different states, Defendant
caused that content to be transmitted across state lines. The presence of end users
in different states, coupled with the very character of the internet, render this
inference permissible even absent evidence that only one host server delivered web
content in these two states. Let us explain. Suppose local host servers in Tennessee
and Colorado hosted the content of Defendant’s website. Further suppose Bergman
and Pluss accessed boplaw.com through those local servers. Unknown for the
3
(...continued)
describing and promoting the “Practice” of FDA. Those same screen shots identified
Defendant as FDA’s “Executive Director.” Additionally, both Stephen Bergman and
Edward Pluss later testified that the contents of Exhibit 8 appeared similar to what
they viewed on the website boplaw.com in 2007. Therefore, “[t]he appearance,
contents, [and] substance . . . of the item, taken together with all the circumstances”
were “sufficient to support a finding” that Exhibit 8 accurately portrayed
Defendant’s website boplaw.com as it existed during the relevant time period.
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moment is the whereabouts of an interstate transmission. But let us back up. Before
both Bergman and Pluss could access boplaw.com through those local servers, two
preconditions had to be met. First, Defendant had to upload the content of
boplaw.com to an origin server in some state, maybe Tennessee, maybe Colorado,
or perhaps Virginia. Where does not matter because end users in different states are
involved. Second, that origin server had to transmit the uploaded content across
state lines to the local host server in at least one of the two states involved, i.e.,
either the server Bergman’s computer accessed in Tennessee (this assumes the origin
server was located in Colorado), or the server Pluss’ computer accessed in Colorado
(this assumes the origin server was located in Tennessee), or both (this assumes
the origin server was located in a third state). See Akami Tech., Inc. v. Cable &
Wireless Internet Serv., Inc., 344 F.3d 1186, 1189 (Fed. Cir. 2003) (describing
“caching,” “mirroring,” and “redirection” as innovations designed to alleviate
congestion in an origin server). 4 The transmission from the origin server located in
4
The Federal Circuit has explained the underlying process in understandable
terms. First, the user’s personal computer sends a web page request to the “host
server, or origin server.” Akami Tech., 344 F.3d at 1189. An origin server is a
computer that in the early stages of the internet received all web page requests and
was responsible for responding to such requests. “[I]n response to a request from a
user, the origin server would provide the web page to the user’s browser. Internet
congestion problems quickly surfaced in this system when numerous requests for the
same web page were received by the origin server at the same time.” Id. As Akami
Tech. describes, computer specialists addressed the problem by developing a system
essentially consisting of multiple host servers that in various ways draw web content
from the origin server and deliver it to the end user.
20
one state to a host server located in another state—a transmission link in a
communication chain necessary to deliver boplaw.com’s content to Bergman’s
computer in Tennessee, or Pluss’ computer in Colorado, or both—is sufficient in
this case to satisfy § 1343’s “in interstate . . . commerce” requirement. 5 See United
States v. Mullins, 613 F.3d 1273, 1281 (10th Cir. 2010) (“The wire fraud statute
doesn’t require that a defendant be able to anticipate every technical detail of a wire
transmission, before []he may be held liable for causing it. It’s enough if []he ‘set
forces in motion which foreseeably would involve’ use of the wires.”).
Accordingly, we have no quarrel with the narrow proposition for which
Schaefer still stands, namely that one individual’s use of the internet, “standing
alone,” does not establish an interstate transmission. See United States v. Vigil, 523
F.3d 1258, 1266 (10th Cir. 2008) (recognizing the Government’s “only evidence
regarding interstate commerce” in Schaefer was defendant’s use of the internet).
This is because the origin and host servers, whether one and the same or separate,
might be located in the same state as the computer used to access the website. But
because a website’s origin server is located in only one state, that proposition
5
Of course, one might suppose Defendant traveled from Santa Ana, California
and separately uploaded boplaw.com’s content to two different origin servers, one
in Tennessee and one in Colorado. One might also suppose the moon is made of
green cheese. (If Defendant had uploaded his web content from California to an
origin server outside that state, this too might have provided the required interstate
transmission). Yet evidence sufficient to sustain a conviction “need not conclusively
exclude every other . . . hypothesis;” nor need such evidence “negate all possibilities
except guilt.” Kitchell, 653 F.3d at 1228.
21
has no application in cases such as this where computers in multiple states access
the same website. To arrive on a host server in another state (or for that matter on an
end user’s computer where no local host server is present), the content of the website
contained on the origin server must transmit across state lines.
This case, then, is the ‘typical’ case where ‘the evidence of the
interstate element can be gleaned from the record’ evidence, and not a
case where the [G]overnment relies exclusively on an assumption that
materials downloaded from the Internet [by a single user in a single
state] traveled in interstate commerce.
United States v. Swenson, 335 Fed. Appx. 751, 753–54 (10th Cir. 2009) (unpub-
lished) (internal brackets and ellipses omitted) (quoting Schaefer, 501 F.3d at 1208(Tymkovich, J., concurring)).
2.
Assuming an interstate transmission sufficient to satisfy § 1343, Defendant
contends in the alternative that the Government failed to prove such transmission
was made for the “purpose of executing [a] scheme” to defraud. To support his
alternative claim, Defendant relies largely on our statement in United States v.
Redcorn, 528 F.3d 727, 738 (10th Cir. 2008), that “[t]o meet § 1343’s ‘purpose’
requirement, a wire transmission must be part of the execution of the scheme as
conceived by the perpetrator at the time.” (emphasis added) (internal quotations
omitted). Defendant states in his opening brief that even assuming he conceived of a
scheme to defraud, “the [G]overnment failed to present evidence sufficient to prove
beyond a reasonable doubt that any wire transmission caused by [Defendant] in
22
connection with posting a website advertising his legal services was part of the
execution of such a scheme as conceived by [Defendant] at the time.” (emphasis
added). Again, we cannot agree with Defendant’s assessment of the evidence.
In Redcorn, we held the Government failed to prove defendants’ “four charged
transfers, from their private bank accounts in Oklahoma to their out-of-state
investment accounts, were ‘for the purpose of executing [a] scheme or artifice’ to
‘defraud.’” Redcorn, 528 F.3d at 738 (quoting 18 U.S.C. § 1343). We reasoned that
“[o]nce the defendants deposited the funds into their personal bank accounts, they
had accomplished their crime and the funds were available for their personal use.
That they chose to transfer part of their stolen money to their broker in Florida . . .
[was] purely incidental to the fraud.” Id. at 739. Unlike the scheme in Redcorn,
which achieved its objective and came to fruition prior to any interstate transmission,
Defendant’s fraudulent scheme was ongoing and came to an abrupt halt only upon
legal compulsion. The Government does not rely on any wire or radio transmission
occurring after the fact, that is, after Defendant got caught. So Defendant must
be arguing the Government’s evidence did not sufficiently negate the possibility that
the interstate transmission occurred before he devised a scheme to engage in the
unauthorized practice of law and defraud unknowing victims like the Bergmans. See
United States v. Gallant, 537 F.3d 1202, 1229 (10th Cir. 2008) (reversing
defendants’ § 1343 convictions where the wire transmissions occurred before
defendants became participants in a fraudulent scheme).
23
The evidence indicated Defendant registered the domain name boplaw.com
in May 2004 and last updated the website’s content in June 2006. Using terms such
as “attorneys,” “firm,” “practice,” “defense,” “representation,” and “advocacy,” and
listing his email address as hkieffer@dcounsel.com, Defendant undoubtedly designed
the content of his website to give the impression that he was a criminal defense
attorney authorized to engage in the practice of law. A jury could readily find that
by the time Defendant uploaded his final revisions to boplaw.com in June 2006, the
website was an integral part of his scheme to defraud unwitting patrons and engage
in the unauthorized practice of law. This is illustrated by Defendant’s promotion of
his website after June 2006 by way of mouth, business card, and correspondence.
For instance, recall that the closing of Defendant’s return email to Gail Shifman in
September 2006 referenced boplaw.com. The business card Defendant gave Stephen
Bergman, Gwen Bergman’s brother, in June 2007, likewise referenced boplaw.com.
Thinking Agent Carr to be a dupe, Defendant mentioned his “website” to him during
their phone conversation in late June or early July 2007. Both Bergman and Edward
Pluss, Gwen Bergman’s court-appointed defender who withdrew upon Defendant’s
entry of appearance, testified that the content of boplaw.com led them to believe
Defendant was an attorney authorized to practice law.
As we learned in the preceding subpart, at least one interstate transmission
was an indispensable part of the communication strand necessary to provide both
Bergman and Pluss access to boplaw.com in June and October 2007, respectively.
24
As we further learned, that transmission occurred after Defendant uploaded the
deceptive website’s content to an origin server, or, in other words, after Defendant
instigated his fraudulent scheme. Because a jury could readily find this interstate
transmission at the time was “incident to the accomplishment of an essential part of
the scheme,”—namely, Defendant duping Bergman and Pluss so that for a substantial
fee he could “represent” the former’s sister on criminal charges in the District of
Colorado—such transmission “is considered to be for the purpose of furthering a
scheme to defraud” within the meaning of § 1343. Redcorn, 528 F.3d at 738(internal quotations omitted).
B.
Defendant next challenges his three convictions by complaining that Jury
Instruction #3, the district court’s reasonable doubt instruction, deprived him of his
Sixth Amendment right to a fair trial. That instruction read in part:
Although the Government’s burden of proof is a strict and heavy
burden, proof beyond a reasonable doubt does not mean proof beyond
all possible doubt. There are very few things in this world that we
know with absolute certainty. The test is one of reasonable doubt. A
“reasonable doubt” is a doubt based upon reason and common sense
after careful and impartial consideration of all the evidence in the case.
Reasonable doubt may arise from the evidence, the lack of evidence, or
the nature of the evidence. It is the kind of proof that would make a
reasonable person hesitate to act. Proof beyond a reasonable doubt
must, therefore, be proof which is so convincing that a reasonable
person would not hesitate to rely and act upon it in making the most
important decisions in his/her own life.
Rec. vol 1, at 101 (emphasis added). In his opening brief, Defendant says use of
the word “proof” rather than “doubt” in the above italicized sentence resulted in
25
the court “misstat[ing] the definition of reasonable doubt by telling the jury that
‘reasonable doubt’ is a ‘kind of proof,’” thus “wrongly suggest[ing] that [Defendant]
had to prove something in order to establish a reasonable doubt.” (internal brackets
omitted). Because Defendant did not object to the instruction at trial, we consider
the alleged error forfeited and subject only to plain error review under Fed. R.
Crim. P. 52(b). “‘A plain error that affects substantial rights may be considered even
though it was not brought to the court’s attention’” if such error “seriously affects
the fairness, integrity or public reputation of judicial proceedings.” Puckett v.
United States, 556 U.S 129, 135 (2009) (quoting Fed. R. Crim. P. 52(b)) (internal
brackets and quotations omitted). Accordingly, “[p]lain error occurs when there is
(1) error, (2) that is plain, which (3) affects the defendant’s substantial rights, and
which (4) seriously affects the fairness, integrity, or public reputation of judicial
proceedings.” United States v. Mendoza-Lopez, 669 F.3d 1148, 1151 (10th Cir.
2012) (internal quotations omitted).
Relying extensively on Sullivan v. Louisiana, 508 U.S. 275 (1993), Defendant
seeks to skirt plain error analysis by asserting the district court’s alleged error was
“structural,” that is to say, the instruction’s purported “misstatement” necessarily
prejudiced Defendant and rendered his trial fundamentally unfair from beginning to
end. See Arizona v. Fulminante, 499 U.S. 279, 310 (1991) (defining structural errors
as those affecting “the framework within which the trial proceeds”). In Sullivan,
the district court tendered a reasonable doubt instruction to the jury that equated
26
reasonable doubt with “grave uncertainty” and “substantial doubt.” Sullivan, 508
U.S. at 277. Addressing an almost identical instruction in Cage v. Louisiana, 498
U.S. 39, 41 (1990) (per curiam), overruled in part by Estelle v. McGuire, 502 U.S.
62, 72 n.4 (1991), the Court earlier had opined that “the words ‘substantial’ and
‘grave,’ as they are commonly understood, suggest a higher degree of doubt than
is required for acquittal under the reasonable-doubt standard.” Sullivan held that
because such an instruction denied defendant “the right to a jury verdict of guilt
beyond a reasonable doubt,” a “structural defect[] in the constitution of the trial
mechanism, which def[ies] analysis by harmless-error standards,” had occurred, thus
warranting reversal of defendant’s conviction. Sullivan, 508 U.S. at 281.
Subsections (a) and (b) of Fed. R. Crim. P. 52 address harmless and plain error
respectively. Harmless error, the sort of error Sullivan described, is a preserved
“error . . . that does not affect substantial rights.” Fed. R. Crim. P. 52(a). Rule 52(a)
harmless error analysis and the third or “substantial rights” prong of Rule 52(b) plain
error analysis “normally require[] the same kind of inquiry.” United States v. Olano,
507 U.S. 725, 734 (1993). Because Sullivan tells us structural error defies harmless
error analysis under subsection (a)’s “substantial rights” test, such error would seem
to defy analysis under the third prong of subsection (b)’s plain error standard. Cf.
Puckett, 556 U.S. at 140 (declining “to resolve whether ‘structural’ errors . . .
automatically satisfy the third prong of the plain-error test”). But this in no sense
suggests that structural error is per se reversible in the plain error context. A
27
defendant failing to object to structural error in the district court likely would still
need to establish that an error was plain and seriously affected the fairness, integrity,
or public reputation of the judicial proceedings. See United States v. Rodriguez, 406
F.3d 1261, 1282–83 (11th Cir. 2005) (Tjoflat, J., dissenting from denial of reh’g en
banc). We need not foment that matter further, however, because the district court’s
reasonable doubt instruction in this case constitutes neither structural nor even plain
error. That instruction did not deny Defendant his right to have the Government
prove, and a jury find, him guilty beyond a reasonable doubt.
We do not assess the district court’s reasonable doubt instruction in “artificial
isolation,” but view it “in the context of the overall charge.” Cupp v. Naughten, 414
U.S. 141, 146–47 (1973). “[T]he proper inquiry is not whether the instruction ‘could
have’ been applied in an unconstitutional manner, but whether there is a reasonable
likelihood that the jury did so apply it.” Victor v. Nebraska, 511 U.S. 1, 6 (1994).
Our lens focused, we summarily reject Defendant’s argument that the instruction
erroneously shifted the onus of proof to him, thereby relieving the Government of
its burden to prove him guilty of the charged crimes. Under either plain or structural
error analysis, “[f]irst, there must be an error or defect—some sort of ‘deviation from
a legal rule’—that has not been . . . affirmatively waived.” Puckett, 556 U.S. at 135
(internal brackets omitted). Four instructions informed the jury that the burden
of proof was on the Government. Another told the jury the burden never shifted
from the Government. Two more instructions informed the jury Defendant was
28
presumed innocent of the charges. See Cupp, 414 U.S. at 147. The two paragraphs
of Instruction #3 immediately proceeding the paragraph at issue read:
The Court instructs you that you must presume Defendant Howard O.
Kieffer to be innocent of the crime(s) charged. Thus, Defendant
Kieffer, although accused of crimes in the Superceding Indictment,
begins the trial with a “clean slate”—with no evidence against him.
The law permits the jury to consider only legal evidence presented in
court. . . .
The Government has the burden of proving Defendant Kieffer guilty
beyond a reasonable doubt. Unless the Government proves, beyond a
reasonable doubt, that Defendant Kieffer has committed each and every
element of the offense(s) charged in the Superceding Indictment, you
must find him not guilty of those offenses not proven. This burden
never shifts to Defendant Kieffer because the law never imposes upon
a defendant in a criminal case the burden or duty of calling any witness,
producing any evidence, or even cross-examining the Government’s
witness.
Rec. vol. 1, at 101.
Because the instructions, considered in their entirety, properly placed the
burden of establishing Defendant’s guilt on the Government, all that remains of his
objection is the claim that, like the erroneous instruction in Sullivan, Instruction #3
wrongly defined the extent of that burden. The apposite portion of the instruction
began by explaining that “proof beyond a reasonable doubt” does not mean the
Government must prove Defendant guilty of the charges “beyond all possible doubt”
or “with absolute certainty.” Rec. vol. 1, at 101. Rather, the instruction described
reasonable doubt as “doubt based upon reason and common sense” in light of “all the
evidence.” Id. The instruction explained “[r]easonable doubt may arise from the
29
evidence, the lack of evidence, or the nature of the evidence.” Id. Considered in
context, a jury might plausibly read the preceding explanation’s references to (1) the
evidence presented, (2) the evidence not presented, and (3) the character of the
evidence, as referring to the Government’s proof. So read, the next sentence’s
description of reasonable doubt as a “kind of proof that would make a reasonable
person hesitate to act,” does not constitute a clear or obvious misstatement of law as
required by the second prong of plain error analysis. (emphasis added).
To be plain, a “legal error must be clear or obvious, rather than subject to
reasonable dispute.” Puckett, 556 U.S. at 135. By definition, reasonable doubt in
the criminal context denotes insufficient proof of guilt. So viewed, the instruction’s
concluding sentence logically follows from the preceding sentence’s description
of reasonable doubt as a “kind of proof.” That sentence reads: “Proof beyond a
reasonable doubt must, therefore, be proof which is so convincing that a reasonable
person would not hesitate to rely and act upon it . . . .” Rec. vol. 1, at 101 (emphasis
added). A description of “reasonable doubt” as resting on “proof that would make
a reasonable person hesitate to act” is simply the converse of a description of
“beyond a reasonable doubt” as “proof . . . so convincing that a reasonable person
would not hesitate to . . . act.” Id. “[T]hat is, if a reasonable doubt makes a
reasonable person hesitate to act, proof beyond a reasonable doubt is proof upon
which a reasonable person would not hesitate to act.” United States v. Smith, 531
F.3d 1261, 1269 (10th Cir. 2008) (internal quotations omitted).
30
Perhaps Instruction #3 should have described reasonable doubt as a “kind
of doubt” or “lack of proof,” – rather than a “kind of proof,” – that would make
a reasonable person “hesitate to act.” We have stated “the preferable ‘reasonable
doubt’ instruction is one couched in terms of the kind of doubt that would make a
person hesitate to act.” United States v. Barrera-Gonzales, 952 F.2d 1269, 1271
(10th Cir. 1992) (emphasis added). But wording preferable to that the district court
employed does not alone render the court’s instruction so infirm as to constitute an
error that is plain and affects Defendant’s substantial rights, contrary to the Sixth
Amendment. See Fed. R. Crim P. 52(b). Defendant was entitled to a fair trial, not
a perfect one. We need not belabor the point. Suffice to say, any error, if error, in
the district court’s instruction labeling reasonable doubt as a “kind of proof that
would make a reasonable person hesitate to act” shares no common features with the
instructional errors in Sullivan that grossly misdefined reasonable doubt as “grave
uncertainty” or “substantial doubt,” and served to “vitiate[] all the jury’s findings.”
Sullivan, 508 U.S. at 281. The alleged instructional error is not plain, let alone
structural. Accordingly, we affirm Defendant’s convictions in their entirety.
III.
Having upheld Defendant’s convictions, we turn to his previously identified
sentencing challenges – five in total. See, supra at 4–5. Given the tortuous nature
of the process that culminated in Defendant’s actual sentencing, some familiarity
with the United States Sentencing Guidelines is assumed. Our point of departure is
31
the original Presentence Investigation Report (PSR). Using the 2009 version of
the Guidelines, the PSR grouped Defendant’s wire fraud and false statements
convictions pursuant to U.S.S.G. § 3D1.2(d), because of the ongoing nature of
Defendant’s criminal objective, i.e., to engage in the unauthorized practice of law
at the expense of the Bergmans and others. Based on an adjusted offense level of
24 and a criminal history category II, the PSR set Defendant’s advisory guideline
sentencing range on the grouped convictions at 57 to 71 months imprisonment. 6
According to the PSR, Defendant’s offense level included a 14-level increase
because his scheme involved twelve victims, including Stephen Bergman, suffering
an aggregate loss of $324,769. 7 The PSR disregarded most of Defendant’s criminal
history, much of which involved fraudulent misconduct, due to the age of his prior
convictions and/or his lack of imprisonment. Defendant’s criminal history category
6
The PSR placed Defendant’s contempt conviction outside the group because
the district court before which he appeared as Gwen Bergman’s counsel suffered
distinct harm as a result of that conduct. See U.S.S.G. § 3D1.2 (stating “[a]ll counts
involving substantially the same harm shall be grouped together as a single Group”).
The district court sentenced Defendant to 37 months imprisonment on that conviction
to run concurrently with the 57 month sentence on his grouped convictions. On
appeal, Defendant does not challenge the 37 month sentence on his contempt
conviction.
7
The PSR identified those 12 individuals and their losses as follows: Stephen
Bergman ($65,750); Ken Henderson ($30,000); Natasha Caron ($25,000); Joel Wells
($37,000); Vernon Reed ($15,000); Donald Sturgis ($3,519); Edwin Stupka
($20,000); Dr. Victor Souaid ($32,000); Richard Lynn ($5,000); Michael Danton
($40,000); Wayne Milton ($36,500); and Mark Anthony Roberts ($15,000). As part
of Defendant’s sentencing in the District of North Dakota, that court accounted for
the losses to Bergman (and his mother), Henderson, Caron, Wells, and Reed in both
its calculation of Defendant’s offense level and in its order of restitution.
32
II arose solely from his 1989 convictions for making multiple false tax refund claims
against the Government in violation of 18 U.S.C. § 287. The original PSR
recommended the district court impose a 60 month sentence on Defendant to run
concurrently with the 51 month sentence he received in the District of North Dakota.
The PSR further recommended the court order Defendant to pay a total of $152,019
to seven identified victims of his scheme unaccounted for in the District of North
Dakota’s restitution order. See, supra n.7. The PSR made no recommendation
regarding a special condition of supervised release requiring Defendant to obtain the
probation office’s prior approval of employment or business ventures.
Defendant posed numerous objections to the original PSR. In addition to
denying that any identified victim was entitled to restitution, Defendant objected on
two pertinent grounds to the PSR’s statement that he bilked twelve individuals out of
$324,769 during the course of his scheme. Defendant argued the record contained
“no evidence” to support the PSR’s allegations. Rec. vol. 5, at 4. Defendant also
argued that apart from Stephen Bergman, none of the identified victims “b[ore] any
relationship to either the Bergman case or the District of Colorado.” Rec. vol. 4, at
51. The Government responded to Defendant’s second argument in particular. The
Government noted that where convictions on two or more counts are grouped, the
district court determines the specific offense characteristics affecting the calculation
of a defendant’s offense level under the “relevant conduct” provisions of U.S.S.G.
§ 1B1.3(a)(2), or, in other words, from all “acts and omissions . . . that were part of
33
the same course of conduct or common scheme or plan as the offense of conviction.”
The probation office’s first addendum to the PSR similarly responded:
As noted in the Government’s response to Defendant’s objections, the
Defendant used the same scheme in all of his relevant conduct, filed
court pleadings as though he was an attorney, attended attorney
trainings, and told a number of individuals that he was an attorney. The
Probation Office stands by its position concerning relevant conduct in
this case.
Rec. vol. 4, at 107. Included in this position was the original PSR’s determination
that Defendant’s criminal misconduct accounted for in the District of North Dakota
was part of his relevant conduct within the meaning of § 1B1.3(a)(2).
At a preliminary sentencing hearing, the district court expressed its intent to
impose a non-guideline sentence on Defendant in the form of an upward variance.
The court opined that U.S.S.G. § 5G1.3(b)(2), by way of § 1B1.3(a)(2), provided that
any term of imprisonment imposed on Defendant should run concurrently to the
sentence imposed on him in the District of North Dakota. But the court believed a
60 month sentence of imprisonment to run concurrently with Defendant’s prior 51
month sentence was “not sufficient to achieve the statutory purposes of sentencing
set forth at 18 [U.S.C. §] 3553(a).” Rec. vol. 3, at 518.
[I]t is my finding that [Defendant’s] criminal history score . . . under-
represents the seriousness of [his] criminal history and the danger that
he presents to the public based on [his] repeated pattern of taking
advantage of others.
In addition, although both the Government and [Defendant] refer to
[U.S.S.G §] 5G1.3, in . . . recommending that I run the sentence that I
impose concurrent with [Defendant’s] North Dakota case, I find that
34
guideline does not fit in [his] circumstances because that will result in
a much lower sentence than [he] deserve[s].
Therefore, I’m continuing this sentencing hearing. I am putting
[Defendant] on notice that I intend to upward depart. . . . I would like
some briefing on whether I am bound by [§] 5G1.3 . . . . [I]t is my
position that I am not bound by that. It is a recommendation, and I
don’t feel that the [§ 3553(a) sentencing] factors are met in this case.
Id. at 521–22. Both sides acknowledged that although the 2009 Guidelines,
including § 5G1.3, were advisory, the law required the district court to adhere to
proper sentencing procedures in determining Defendant’s applicable guideline range.
The probation office also responded to the district court in a third addendum
to the original PSR. (The second addendum does not affect this appeal). The third
addendum remarkably suggested the district court not consider as relevant conduct
under § 1B1.3(a)(2) those victims and their losses the District of North Dakota had
determined to be relevant conduct under the same provision. That encompassed
the loss attributable to five cases including the Bergman case. See, supra n.7. The
addendum suggested the court instead consider Defendant’s sentence in the District
of North Dakota as part of his criminal history pursuant to § 4A1.1. In this manner,
the district court could sidestep § 5G1.3(b)(2) and still sentence Defendant within
a guideline range of 57 to 71 months based on a revised adjusted offense level of 23
and a revised criminal history category III. The addendum explained that “should
the court determine the . . . loss in the District of North Dakota is not relevant
conduct, U.S.S.G. § 5G1.3(b) would no longer be applicable and the court maintains
35
the discretion to impose the sentence for the instant offense to run concurrent or
consecutive to the North Dakota sentence.” Rec. vol. 4, at 121. Apparently
modifying his earlier position that none of the PSR’s other identified victims bore
any relationship to the Bergmans, Defendant objected to the third addendum:
Curiously, the third addendum attempts to address a number of different
issues that would arise if the North Dakota case is not regarded as
relevant conduct herein. The Third Addendum is curious in this regard
because it has never been suggested by either the Government or
[Defendant] that the North Dakota case is not relevant conduct. Any
such suggestion would fly in the face of the evidence as the North
Dakota conduct was used to obtain admission to the United States
District Court in Colorado. Indeed the Sentencing Guidelines make
abundantly clear that the North Dakota case is relevant conduct and
must be considered thusly.
Id. at 135.
Swayed by the third addendum’s suggested approach, the district court at
Defendant’s final sentencing hearing (1) abandoned its previously stated intent to
vary upward from the applicable guideline range based on § 3553(a)’s sentencing
factors, (2) excluded from Defendant’s relevant conduct the five cases considered
as relevant conduct in the District of North Dakota, and (3) included Defendant’s
sentence in the District of North Dakota in his criminal history. At the hearing’s
outset, the court noted Defendant’s “object[ion] to the inclusion of the 12 separate
clients representing a loss of $324,769.” Rec. vol. 3, at 532. The court “agree[d]
that the inclusion of some of this information must be excluded in calculating the
offense level.” Id. at 532–33. The court then stated its revised intentions.
36
The district court began by observing that according to PACER, the Public
Access to Court Electronic Records website, Defendant had appeared of record in
18 federal criminal cases over the course of his scheme. To calculate Defendant’s
offense level, the court would exclude the five cases accounted for in the District of
North Dakota. Next, the court would take judicial notice of 13 cases around the
country in which Defendant had appeared because, in its words, Defendant “used the
same scheme in all of these cases.” Rec. vol. 3, at 537. As to the amount of loss to
the victims in those 13 cases, the court would find the PSR “establishe[d] by a
preponderance of the evidence that the loss was at least $152,019.” Id. The district
court obviously based that figure on the aggregate loss to the seven victims the
original PSR specifically identified as entitled to restitution. Based on these and
other proposed findings that differed somewhat from the proposed findings proffered
in the PSR’s third addendum, the court stated it intended to set Defendant’s adjusted
offense level at 23, one level lower than the original PSR. To arrive at Defendant’s
criminal history category III, one category higher than the original PSR, the court
stated it would include in his criminal history “all matters that were included as
relevant conduct in the North Dakota case.” Id. at 539.
All this machination resulted in the same 57 to 71 month advisory guideline
range as the original PSR, with one important exception. Because the district court
did not intend to consider the victims and the loss amounts used to determine
Defendant’s offense level in the District of North Dakota as conduct relevant to his
37
convictions in the District of Colorado within the meaning of § 1B1.3(a)(2),
§ 5G1.3(b)(2)’s concurrent sentencing provision necessarily would not apply. And
this, the court reasoned, would permit it to impose a sentence on Defendant that ran
consecutive to the sentence imposed on him in the District of North Dakota: “5G1.3
does not apply because in calculating the offense level in this case, I have not
included either the crime for which [D]efendant was convicted in North Dakota, nor
any of the relevant conduct included by the sentencing judge in the North Dakota
case when he computed the [D]efendant’s sentence . . . .” Rec. vol. 3, at 565–66.
At this point, the court provided the parties the opportunity to comment on its
revised intentions. Defendant renewed both his prior factual and legal objections,
focusing on the lack of evidence before the court:
[T]he real big argument . . . is the . . . Government has the burden to
prove loss by a preponderance. And we have made a specific objection
to the loss amounts in the PS[R]. There has been no proof as to those
loss amounts. Therefore, we believe the loss amount is zero. At most
it is $65,750 [the amount of loss to the Bergmans].
Rec. vol. 3, at 544. In response, the Government called Special Agent Todd Wilcox
to the stand. Agent Wilcox testified he received a report from inmate Richard Lynn.
Lynn reported he paid Defendant $5,000 to represent him in a prison disciplinary
appeal. The court asked the Government if it was “going to offer any evidence of
the other amounts outstanding.” Id. at 554. The Government said no, but argued the
record established Defendant on average had charged in excess of ten victims
$10,000 and $20,000 each: “It is reasonable that [he] was charging somewhere
38
between $5,000, which he charged Mr. Lynn, and $65,000; that was for [Gwen
Bergman’s] trial, so admittedly that would be high. About [$]10– to $20,000,
according to the matters in North Dakota, that [Defendant] was charging these
clients.” 8 Id. at 555. The court seemed receptive to the Government’s argument,
stating “there is some indication” in the record that Defendant charged his victims
between $15,000 and $40,000: “And even if I took the lowest amount, the [$]15,000
per [victim], with the additional 13 [victims] that I have identified here, that would
exceed the [$]120,000 that I indicated.” Id. at 557–58. Defendant again objected:
“Your Honor, that is not proof by a preponderance of the evidence; that is making
things up.” Id. at 558.
During a brief recess, surely to contemplate what had become an imbroglio,
the district court again changed its mind. In purporting to impose a within-guideline
range sentence on Defendant, the court first found his relevant conduct involved
more than 10 victims resulting, pursuant to U.S.S.G. § 2B1.1(b)(2)(A)(i), in a 2 level
increase to his uncontested base offense level of 7. Apparently troubled by the lack
of record evidence regarding the disputed loss amount, the court next set that amount
at $91,500, based on the loss to only three victims identified in the PSR:
8
The Government added Defendant estimated he earned between $5,000 and
$6,500 per month during the relevant period: “Take [$]60,000 a year times however
many years the court wants, and that is more than sufficient to sustain the court’s
loss calculation.” Rec. vol. 3, at 559.
39
With respect to the amount of the loss, the court wishes the Government
had provided it with better direct testimonial evidence. The Court
believes that there is sufficient information by which it could easily
calculate a reasonable estimate of the loss to exceed $200,000.
***
Nonetheless, instead of applying the 10 or 12 point enhancement that
this court believes is sufficiently documented, the court will apply a
conservative estimate based on the discovery provided by the
Government to the Defendant, which included several FBI reports
confirming that one victim’s loss was [$]35,000, another [$]36,500, and
Mr. Stupka’s letter indicating that his loss was [$]20,000, for a total
loss of [$]91,500.
Rec. vol. 3, at 581–82. This reduced loss figure added 8 levels to Defendant’s
offense level pursuant to § 2B1.1(b)(1)(E). Consistent with § 3B1.3, the court then
added 2 levels for Defendant’s abuse of a position of trust. Finally, the district court
added a multiple count adjustment of 2 levels under § 3D1.4, to reach an adjusted
offense level of 21. Because the court excluded from its calculation of Defendant’s
offense level all matters the District of North Dakota included as relevant conduct,
the court, pursuant to § 4A1.1(a), assessed him 3 criminal history points for his
North Dakota sentence. This, coupled with 3 points assessed for his federal false
claims convictions under 18 U.S.C. § 287 established a criminal history category III.
The court’s actual findings resulted in an entirely new guideline range for Defendant
of 46 to 57 months imprisonment.
The district court sentenced Defendant to 57 months imprisonment to run
consecutively to the 51 month term imposed on him in the District of North Dakota.
40
The court also imposed a five year term of supervised release on Defendant. As a
special condition of that supervised release, the court directed Defendant to obtain
the probation office’s prior approval of any proposed employment or business
ventures. Lastly, the court ordered Defendant to make restitution to seven victims
identified in the original PSR “for whom compensation ha[d] not been previously
ordered by any court.” Rec. vol. 3, at 588–89; see, supra n.7. Defendant renewed
his objection to the court’s restitution order for “the lack of evidence, the failure of
proof.” Rec. vol. 3, at 595. Defendant never objected to any of the conditions of his
supervised release.
A.
We review a sentence of imprisonment for reasonableness under an abuse of
discretion standard. Gall v. United States, 552 U.S. 38, 51 (2007); see also United
States v. Booker, 543 U.S. 220, 261 (2005). Within that milieu, “we review factual
findings for clear error and legal determinations de novo.” United States v. Kristl,
437 F.3d 1050, 1054 (10th Cir. 2006). “The correct Guidelines calculation is . . .
the ‘natural starting point’ from which the sentencing court exercises its discretion
under § 3553(a).” 9 United States v. Langford, 516 F.3d 205, 212 (3d Cir. 2008). We
9
Section 3553(a) sets forth various factors that a district court must consider
in imposing sentence on a defendant. These “include the nature of the offense and
characteristics of the defendant, as well as the need for the sentence to reflect the
seriousness of the crime, to provide adequate deterrence, to protect the public, and
to provide the defendant with needed training or treatment.” Kristl, 437 F.3d at 1053
(citing 18 U.S.C. § 3553(a)(1) & (2)). But first, the court “shall consider . . . the
(continued...)
41
“must first ensure that the district court committed no significant procedural error”
in calculating the advisory guideline range. Gall, 552 U.S. at 51 (emphasis added).
That is, we must determine whether the method by which the court calculated that
range is “‘procedurally sound.’” Id. “[I]mproperly calculating the Guidelines range,
. . . failing to consider the § 3553(a) factors, [or] selecting a sentence based on
clearly erroneous facts” are just three examples of likely “significant procedural
error.” Id. (internal parentheses omitted). We will consider the substantive
reasonableness of a defendant’s sentence only absent “reversible procedural error.”
United States v. Lente, 647 F.3d 1021, 1030 (10th Cir. 2011). We deem procedural
error not reversible, i.e., harmless, if the record viewed as a whole clearly indicates
the district court would have imposed the same sentence had it not relied on the
procedural miscue(s). See Williams v. United States, 503 U.S. 193, 203 (1992). In
other words, remand is necessary “if the sentence was ‘imposed as a result of an
incorrect application’ of the Guidelines.” Id. at 202–03 (quoting 18 U.S.C. §
3742(f)(1)).
1.
Defendant is correct when he claims the method by which the district court
calculated his guideline range was seriously flawed in at least three respects. First,
9
(...continued)
kinds of sentence and the sentencing range established for . . . the applicable
category of offense committed by the applicable category of defendant as set forth
in the guidelines.” 18 U.S.C. § 3553(a)(4)(A). This is to say “the Guidelines should
be the starting point and initial benchmark” in sentencing. Gall, 552 U.S. at 49.
42
Defendant points out the court erred when it included his federal sentence in North
Dakota in its criminal history calculation under U.S.S.G. § 4A1.1, and excluded the
offense upon which that sentence was based from its consideration of his relevant
conduct under § 1B1.3. To prevent double counting, a court considering a prior
sentence as part of a defendant’s criminal history cannot consider the offense
underlying that sentence as relevant conduct for the purpose of calculating the
defendant’s offense level. The Guideline’s instructions for computing criminal
history plainly state that “[t]he term ‘prior sentence’ means any sentence previously
imposed upon an adjudication of guilt . . . for conduct not part of the instant
offense.” U.S.S.G. § 4A1.2(a)(1) (emphasis added). Because the district court did
not consider Defendant’s offense in the District of North Dakota when calculating
his offense level, but instead used the sentence he received there to determine his
criminal history category, we “must review the court’s underlying [factual] finding
that the prior sentence was not part of the instant offense, i.e., that it was not relevant
conduct” within the meaning of § 1B1.3. United States v. Wilson, 416 F.3d 1164,
1168 (10th Cir. 2005) (internal quotations omitted). “The [G]overnment bears the
burden of proving the prior offense is not relevant conduct.” Id.In determining a defendant’s offense level for an instant offense, the district
court must account for both the actual conviction and all other relevant conduct:
“Conduct that is part of the instant offense means conduct that is relevant conduct
to the instant offense under the provisions of § 1B1.3.” U.S.S.G. § 4A1.2 cmt. n.1.
43
Once the court determines the “appropriate offense guideline section,” § 1B1.2(b)
directs it to “determine the applicable guideline range in accordance with § 1B1.3.”
Section 1B1.3 provides that where multiple offenses are grouped pursuant to
§ 3D1.2(d), as they were in Defendant’s case, relevant conduct “shall be determined
on the basis of . . . all [criminal] acts and omissions . . . that were a part of the same
course of conduct or common scheme or plan as the offense of conviction.” U.S.S.G.
§ 1B1.3(a)(1)(A) & (2) (emphasis added).
Because Defendant’s prior offense in the District of North Dakota arose out
of the same ongoing scheme that gave rise to his prosecution in the District of
Colorado, the district court had little choice but to find that “[t]he prior offense,
the North Dakota conviction, is relevant conduct to the instant case.” 10 Rec. vol. 3,
at 565. Like Defendant’s “instant offense,” his “prior offense” includes both “the
10
Section 1B1.3’s commentary makes apparent the point:
For two or more offenses to constitute part of a common scheme or
plan, they must be substantially connected to each other by at least one
common factor, such as . . . common purpose, or similar modus
operandi. . . .
Offenses that do not qualify as part of a common scheme or plan may
nonetheless qualify as part of the same course of conduct if they are
sufficiently connected or related to each other as to warrant the
conclusion that they are part of a[n] . . . ongoing series of offenses.
U.S.S.G. § 1B1.3 cmt. n.9(A) & (B).
44
offense of conviction and all relevant conduct under § 1B1.3.” 11 Contrary to what
the district court’s finding entailed and what the Guidelines required, however, the
court in calculating Defendant’s offense level decided not to include as relevant
conduct “either the crime for which Defendant was convicted in North Dakota, nor
any of the relevant conduct included by the sentencing judge in the North Dakota
case.” Id. at 565–66. This, the Government concedes on appeal, was error:
In this matter the Government did contend, and the court did find that
[Defendant] engaged in a continuing scheme to represent himself as a
licensed attorney and practice law in federal courts throughout the
country. The Government offered no proof at sentencing that the North
Dakota offense was unrelated to the scheme, nor did the district court
make factual findings specifically distinguishing the facts of the North
Dakota case from [Defendant’s] Colorado conviction. The district court
simply stated it would not consider the North Dakota case and the
related relevant conduct in that case when sentencing [Defendant], and
without further findings or evidence. . . . [T]his was error.
(internal record citations omitted). But why did the district court indulge such clear
error—an error that resulted in an incorrect increase in Defendant’s criminal history
category from II to III? This question conveniently brings us Defendant’s second
11
The commentary to the Guidelines’ “Application Instructions” in relevant
part defines the term “offense” to include:
[T]he offense of conviction and all relevant conduct under § 1B1.3 . . .
unless a different meaning is specified or is otherwise clear from the
context. The term “instant” is used in connection with “offense,”
“federal offense,” or “offense of conviction,” as the case may be, to
distinguish the violation for which the defendant is being sentenced
from a prior or subsequent offense.
U.S.S.G. § 1B1.1 cmt. n.1(H).
45
and interrelated claim of procedural error—the imposition of a consecutive sentence.
2.
Defendant rightly claims that in addition to its erroneous criminal history
calculation, the district court erred in manipulating the calculation of his offense
level so it could ignore U.S.S.G. § 5G1.3(b) and ostensibly impose a within-
guideline range sentence on him while running that sentence consecutive to the
sentence he received in the District of North Dakota. Section 5G1.3 applies where
a court imposes sentence on a defendant who is subject to an undischarged term of
imprisonment. Generally, a district court has broad discretion under § 5G1.3(c) in
crafting a concurrent or consecutive sentence “to achieve a reasonable punishment
for the instant offense.” Subsections (a) and (b), however, restrict that discretion.
The former requires a consecutive sentence where the defendant committed the
instant offense after being sentenced to serve another term of imprisonment. See
United States v. Contreras, 210 F.3d 1151, 1152 (10th Cir. 2000). Because
subsection (a) does not apply in this case, we turn to subsection (b), the “central
aim” of which “is to ensure no defendant is punished twice for the same crime.”
United States v. Contreras-Martinez, 409 F.3d 1236, 1239 (10th Cir. 2005) (internal
quotations omitted). Subsection (b) states in relevant part:
If subsection (a) does not apply, and a term of imprisonment resulted
from another offense that is relevant conduct to the instant offense of
conviction under the provisions of subsections (a)(1), (a)(2), or (a)(3)
of § 1B1.3 (Relevant Conduct) and that was the basis for an increase in
the offense level for the instant offense, . . . the sentence for the instant
46
offense shall be imposed to run concurrently to the remainder of the
undischarged term of imprisonment.
U.S.S.G. § 5G1.3(b)(2).
The district court stated it did “not believe that its decision with respect to the
non-applicability of [§] 5G1.3[(b)] in this case is a departure from the Sentencing
Guidelines.” Rec. vol. 3, at 585. The court’s stilted view was a result of its refusal
to properly consider Defendant’s North Dakota offense as relevant conduct under
§ 1B1.3(a). As we just explained, the court had no discretion in this particular
matter. In calculating Defendant’s advisory guideline range, § 1B1.3(a)(1)(A) &
(2) required the court to consider that prior offense as part of his relevant conduct
rather than the resulting sentence as part of his criminal history. This, in turn,
required the court to account for U.S.S.G. § 5G1.3(b)(2) and, absent a variance based
on the § 3553(a) factors, impose a concurrent term of imprisonment on Defendant
as part of any sentence within the applicable guideline range. 12
12
The commentary to § 5G1.3 reiterates that “[s]ubsection (b) applies in cases
in which all of the prior offense (i) is relevant conduct to the instant offense . . . and
(ii) has resulted in an increase in the . . . offense level for the instant offense.”
U.S.S.G. § 5G1.3 cmt. n.2(A). The Government has never suggested (nor did the
district court ever suggest) that a proper consideration of the relevant conduct the
district court in North Dakota deemed a part of Defendant’s prior offense—one that
accounted for both the number of victims and the losses they sustained—would not
affect his offense level. In cases where consideration of relevant conduct does
not affect a defendant’s offense level, the threat of double punishment does not exist,
rendering subsection (b) of § 5G1.3 inapplicable. See United States v. Dunbar, 660
F.3d 54, 56–57 (1st Cir. 2011).
47
On this point, the Government refuses to concede error, instead insisting in its
appellate brief that the district court’s “thorough and individualized analysis of the
[§] 3553(a) [factors] and why they support a consecutive sentence . . . does not cause
a ‘non-Guideline sentence’ and thus no procedural error occurs.” The Government
cites no pertinent § 5G1.3 authority for this proposition and we have found none.
At best the Government’s argument is disingenuous, as evidenced by the position it
took on § 5G1.3’s application before the district court. In its supplemental
sentencing memorandum, the Government acknowledged: Ҥ 5G1.3(b) applies and
the court must take that into account in computing the applicable guideline range for
[Defendant].” Rec. vol. 1, at 140 (emphasis added). The court too acknowledged
at the preliminary sentencing hearing that a proper calculation of Defendant’s
guideline range required it to account for U.S.S.G. § 5G1.3(b). What matters,
however, is that in the end the district court committed procedural error when it
purported to impose a within-guideline sentence on Defendant without accounting
for subsection § 5G1.3(b).
3.
This brings us to Defendant’s third claim of procedural error. Defendant
correctly posits the court erred in calculating the amount of loss associated with his
relevant conduct. Recall the court increased Defendant’s offense level by 8 pursuant
to U.S.S.G. § 2B1.1(b)(1)(E), based on its contested finding that the actual loss to
three victims of his scheme totaled a mere $91,500 (in contrast to the PSR’s
48
contested statement that twelve victims of his scheme lost a total of $324,769). 13 But
the Government apparently never charged Defendant with criminal misconduct
related to the three individuals whose losses the court included in its loss calculation.
And the district court in North Dakota did not consider those losses as part of
Defendant’s relevant conduct there. Consequently, before the court could include
those individual losses as part of Defendant’s relevant conduct within the meaning
of § 1B1.3, the Government first had to prove by a preponderance of the evidence
that the conduct giving rise to those losses (1) was a part of Defendant’s ongoing
scheme to engage in the unauthorized practice of law and (2) constituted a criminal
offense under a federal or state statute. See United States v. Griffith, 584 F.3d 1004,
1013 (10th Cir. 2009); see also U.S.S.G. § 1B1.3 cmt. background (“Conduct that is
not formally charged . . . may enter into the determination of the applicable guideline
sentencing range.”). Assuming the Government met its initial burden of proving
relevant conduct, it then had to prove the amount of loss (or a reasonable estimate
thereof) associated with that conduct by a preponderance of the evidence. See
United States v. Peterson, 312 F.3d 1300, 1302 (10th Cir. 2002).
13
Under subsection (b)(1), “loss is the greater of actual or intended loss.”
U.S.S.G. § 2B1.1 cmt. n.3(A). “‘Actual loss’ means the reasonably foreseeable
pecuniary harm that resulted from the offense.” Id. cmt. n.3(A)(i). “‘Intended loss’
. . . means the pecuniary harm that was intended to result from the offense.” Id. cmt.
n.3(A)(ii).
49
Our review of the record reveals the Government failed to meet its burden of
proof in all respects. Of the three victims the district court considered in assessing
the amount of loss for purposes of § 2B1.1, the court mentioned only Edwin Stupka
by name. The court failed to name the other two victims, instead stating “several
FBI reports confirm[] that one victim’s loss was [$]35,000, another [$]36,500.” Rec.
vol. 3, at 582. The court also referred to a “letter indicating that Mr. Stupka’s loss
was [$]20,000.” Id. Unfortunately, neither the court nor the Government ever
entered the FBI reports or the letter into the record. And of course, the court’s
statements do not constitute proof that the actual losses to the three individuals arose
from Defendant’s relevant conduct. To be sure, the PSR identified Stupka as losing
$20,000, and indicated an individual by the name of Wayne Milton lost $36,500. But
the PSR identified none of Defendant’s victims as losing $35,000. Moreover, the
record evidence fails to substantiate any of these three loss amounts. Aside from the
$5,000 loss to Richard Lynn—which the district court did not include in its amount
of loss finding—the Government’s proof regarding the loss, actual or intended, to the
victims of Defendant’s scheme unaccounted for in North Dakota also fell woefully
short. See, supra n.7. The record simply does not support the court’s factual
findings underlying its calculation of the amount of loss. The likelihood that certain
facts bearing upon Defendant’s offense level exist, no matter how probable, does not
relieve the Government of its burden, after proper objection, to establish their
actuality.
50
4.
All that remains for us to consider in connection with Defendant’s 57 month
sentence on the grouped wire fraud and false statements counts is the Government’s
assertion of harmless error. The question is whether the district court’s numerous
procedural errors in sentencing Defendant so affected his substantial rights that Fed.
R. Crim. P. 52(a) requires resentencing on the grouped counts. Subsection (f)(1) of
18 U.S.C. § 3742 states that where a “sentence was imposed . . . as a result of an
incorrect application of the guidelines, the court shall remand the case for further
sentencing proceedings.” In Williams, the Supreme Court explained that “[w]hen a
district court has not intended to depart from the Guidelines, a sentence is imposed
‘as a result of’ an incorrect application of the Guidelines when the error results in
the district court selecting a sentence from the wrong guideline range.” Williams,
503 U.S. at 203; see also Lente, 647 F.3d at 1037–38 (“A harmless error ‘is that
which did not affect the district court’s selection of the sentence imposed.’”). We
subsequently opined that unless the district court indicated at sentencing that the
sentence imposed would be the same under multiple sentencing approaches, one of
which was the correct approach, “we are compelled to remand for resentencing when
we find . . . that an improper offense level [or criminal history category] was
applied.” United States v. Urbanek, 930 F.2d 1512, 1516 (10th Cir. 1991). Absent
such an indication in the record, we have no way of knowing whether the district
court would have imposed the same sentence under a proper application of the
51
Guidelines. See Williams, 503 U.S. at 203. “[T]o say that the district court would
have imposed the same sentence given [a] new legal landscape . . . places us in the
zone of speculation and conjecture—we simply do not know what the district court
would have done . . . .” United States v. Labastida-Segura, 396 F.3d 1140, 1143
(10th Cir. 2005).
The Government has the burden of establishing by a preponderance of the
evidence that the district court’s procedural miscues were harmless. Lente, 647 F.3d
at 1037. To that end, the Government tells us in its brief:
If the North Dakota relevant conduct had been considered as part of the
relevant conduct loss calculation in this case, the presentence report’s
original calculation of a loss of $324,726 would have been accurate.
Accordingly, treating the North Dakota offense as relevant, rather than
as a prior conviction, would have increased [Defendant’s] base offense
level by two levels, pursuant to § 2B1.1(b)(1)(G), to a total base offense
level of 26 instead of 24. This combined with the reduction of his
criminal history category from a level III to a level II would have
provided a recommended guideline range of 70-87 months, well above
the 57 month sentence ultimately imposed.
(internal record citations omitted). The Government’s argument misses the mark.
First, the Government simply assumes the original PSR’s statement regarding the
amount of loss is accurate. But the Government offered no evidence at trial or
sentencing to substantiate that loss amount. 14 See United States v. Orr, 567 F.3d 610,
14
The record before us establishes, at most, a loss amount of $167,750. This
amount consists of the $5,000 loss to Lynn and the $162,750 loss considered a part
of Defendant’s relevant conduct and prior offense in North Dakota. See Kieffer, 621
F.3d at 834 (“The district court found Kieffer intended the victims to suffer losses
(continued...)
52
617–18 (10th Cir. 2009) (explaining a district court’s findings regarding contested
facts in the PSR are insupportable where the Government fails to present “evidence
to substantiate the allegations at the time of sentencing”). Second, the Government
ignores the elephant in the room. The district court ordered Defendant’s 57 month
sentence to run consecutively to the sentence he received in the District of North
Dakota. But we well know that given U.S.S.G. § 5G1.3(b), a properly calculated
within-guideline range sentence would likely need to run concurrently with that prior
sentence, and would likely not, contrary to the Government’s claim, result in
Defendant’s imprisonment “well above the 57 month sentence ultimately imposed.”
See, supra n.12.
All this is not to say procedural error in calculating an advisory guideline
sentencing range can never be harmless. But where the beginning point for a
sentencing court’s analysis of the § 3553(a) factors is measurably wrong, the ending
point usually will result from an incorrect application of the Guidelines. See
Langford, 516 F.4d at 217. Contrary to § 3553(a)(4), “[a]n erroneous calculation of
the Guidelines will frustrate the sentencing court’s ability to give meaningful
consideration to ‘the kinds of sentence and the sentencing range established for . . .
the applicable category of defendant as set forth in the guidelines.’” Id. at 212; see
also United States v. Anderson, 526 F.3d 319, 329 (6th Cir. 2008) (“If the premise
14
(...continued)
totaling 162,750.”). In resentencing Defendant, the district court may consider this
loss amount a baseline for the purpose of calculating Defendant’s offense level.
53
from which the district court must begin its sentencing analysis is incorrect, then it
seems that an appellate court would have a difficult time saying that the result would
have been unchanged.” (internal citation omitted)).
In this case, the record reflects that by the time of Defendant’s actual
sentencing, the district court had decided to sentence him within the advisory
guideline range. 15 The court then proceeded to calculate Defendant’s guideline range
incorrectly on the basis of numerous procedural errors, both factual and legal. As
a result, the court selected a sentence from the wrong guideline range. Most
importantly from Defendant’s standpoint, that range failed to account for the
concurrent sentencing provisions of § 5G1.3(b)(2). See Williams, 503 U.S. at 203.
The court provided no indication whatsoever that it would have imposed the same
sentence under a proper application of the Guidelines. See Urbanek, 930 F.2d at
1516. Accordingly, we must vacate Defendant’s sentence on Counts I and II of the
superceding indictment and remand for resentencing.
B.
Apart from the district court’s erroneous calculation of his guideline range,
Defendant objects to its order of restitution. The court ordered Defendant to make
15
After the preliminary sentencing hearing, the court never again suggested
that it might impose an outside-the-Guidelines upward variance on Defendant. But
even if it had done so, the fact remains that such a variance would have been based
on an erroneous consideration of the § 3553(a)(4) factor. See, supra n.9. Whether
that alone would render the variance unsustainable we need not decide today.
54
restitution in the total amount of $152,019 to the following individuals: Donald
Sturgis ($3,519); Edwin Stupka ($20,000); Victor Souaid ($32,000); Richard Lynn
($5,000); Michael Danton ($40,000); Wayne Milton ($36,500); and Mark Anthony
Roberts ($15,000). In his objections to the original PSR, Defendant stated that “[a]s
to the seven individuals listed as victims in the instant case for whom restitution was
not ordered in North Dakota, [Defendant] denies that they are victims or entitled
to any restitution.” Rec. vol. 5, at 4 (emphasis added). Defendant subsequently
renewed his objections at sentencing. See Rec. vol. 3, at 594–95.
In cases of fraud or deceit, the Mandatory Victims Restitution Act (MVRA)
requires a sentencing court to order “that the defendant make restitution to the victim
of the offense.” 16 18 U.S.C. § 3663A(a)(1). The MVRA defines a victim as “any
person directly harmed by the defendant’s criminal conduct in the course of [a]
scheme, conspiracy, or pattern [of criminal activity].” Id. § 3663A(a)(2). The court
must “order restitution to each victim in the full amount of each victim’s losses as
determined by the court.” Id. § 3664(f)(1). While “a restitution order must be
specific in a dollar amount that is supported by the evidence in the record[,] . . . the
determination of an appropriate restitution is by nature an inexact science, so that
16
The MVRA does not apply in cases of fraud or deceit where the court finds
“from facts on the record, that . . . determining complex issues of fact related to the
cause or amount of the victim’s losses would complicate or prolong the sentencing
process to a degree that the need to provide restitution to any victim is outweighed
by the burden on the sentencing process.” 18 U.S.C. § 3663A(c)(3)(B); see also
U.S.S.G. § 5E1.1(a) & (b).
55
absolute precision is not required.” United States v. James, 564 F.3d 1237, 1247
(10th Cir. 2009) (internal brackets, citation, and quotations omitted). “Any dispute
as to the proper amount . . . of restitution shall be resolved by the court by a
preponderance of the evidence. The burden of demonstrating the amount of the loss
sustained by a victim as a result of the offense shall be on the attorney for the
Government.” 18 U.S.C. § §3664(e).
On appeal, Defendant contends the district court’s order of restitution was
improper because the Government proved neither (1) that the seven individuals
awarded restitution were “victims” of his “criminal conduct” within the meaning of
the MVRA nor (2) that six of those individuals suffered any loss. The lone exception
to Defendant’s latter objection is Richard Lynn’s $5,000 loss. Where a defendant
preserves his objection to a district court’s order of restitution, which Defendant
undoubtedly did in this case, we review the ultimate legality of that order de novo,
but any underlying factual findings only for clear error. Griffith, 584 F.3d at 1019.
Assuming the legality of the order, we will not disturb the actual amount of
restitution imposed absent an abuse of discretion. Id.As to the actual amounts of restitution, the Government conceded at oral
argument that “the factual basis, the only thing the Government presented was the
testimony regarding Mr. Lynn.” Thus, the Government admits no factual basis exists
in the record for the other amounts the court included in its restitution order.
Similarly, in its brief, the Government makes no serious attempt to establish that it
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met its burden of proving any of the individuals the court deemed entitled to
restitution were “victims” of Defendant’s “criminal conduct” within the meaning of
the MVRA. Accordingly, the district court’s order of restitution fails for lack of
proof.
C.
Finally, Defendant objects to the district court’s imposition of a special
condition of supervised release which reads: “Any employment or business ventures
by the [D]efendant must be approved in advance by the probation officer.” Rec. vol.
1, at 166. Both parties agree Defendant did not object to this condition of supervised
release before the district court, so he has the burden of establishing plain error. See
Olano, 507 U.S. 732–37; see also supra at 26–28. Federal law, specifically 18
U.S.C. §§ 3563(b)(5) & 3583(d) and U.S.S.G. § 5F1.5, authorizes the imposition of
such condition under appropriate circumstances. In United States v. Wittig, 528 F.3d
1280, 1286–89 (10th Cir. 2008), we set forth a thorough explanation of the law
related to occupational restrictions during a term of supervised release, and we need
not repeat that here. Suffice to say that in this case, any error the district court may
have committed by placing occupational restrictions on Defendant during his period
of supervised release is hardly “clear or obvious, rather than subject to reasonable
dispute.” Puckett, 556 U.S. at 135.
The original PSR tells us that Defendant’s history of fraudulent and deceitful
conduct is rather lengthy. In addition to his convictions for making false federal tax
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refund claims, Defendant has been in trouble for, among other things, possessing
stolen checks; possessing stolen property; possessing bad checks; improperly using
an employer’s credit card; improperly using a former employer’s credit card; and
forging a deed and using the resulting “equity” on the property to obtain a loan. All
these offenses occurred before Defendant embarked on his decade long (or longer)
“legal career.” To be sure, the court at sentencing failed to “provide at least
generalized reasons for imposing [the] special condition[] of supervised release” on
Defendant. United States v. Smith, 606 F.3d 1270, 1283 (10th Cir. 2010). The court,
however, could easily have found the condition requiring the probation office’s
preapproval of Defendant’s future employment and business opportunities was
“linked to the offense [of conviction] and [was] no broader than necessary to
rehabilitate the defendant and protect the public,” without constituting an undue
deprivation of his liberty or property. Id. at 1282. This is sufficient to overcome
Defendant’s objection to the special condition of supervised release on the basis of
plain error.
***
For all the foregoing reasons, Defendant’s convictions are AFFIRMED.
Defendant’s sentence on Counts I and II of the superceding indictment is VACATED
and this matter is REMANDED to the district court for resentencing on those counts
not inconsistent with this opinion.
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