United States v. John G. Grant, Jr.

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
December 21, 2006
No. 05-12504 THOMAS K. KAHN
Non-Argument Calendar CLERK
________________________
D. C. Docket No. 04-00398-CR-RBP-PWG
UNITED STATES OF AMERICA,
Plaintiff-Appellee
Cross-Appellant,
versus
JOHN G. GRANT, JR.,
Defendant-Appellant,
Cross-Appellee.
________________________
Appeals from the United States District Court
for the Northern District of Alabama
_________________________
(December 21, 2006)
Before BIRCH, DUBINA and CARNES, Circuit Judges.
PER CURIAM:
John G. Grant Jr. challenges his convictions for making false statements to a
federally-insured bank, in violation of 18 U.S.C. §§ 1014 and 2. On appeal, Grant
argues that his convictions are not supported by sufficient evidence, and that,
therefore, the district court erred in denying his motion for acquittal. He also
argues that the jury instructions submitted in his case were erroneous and
confusing, such that they prejudiced his trial. The government cross-appeals
Grant’s sentences, contending that the district court committed errors in sentencing
Grant. Upon review of the record, we discern no error as to Grant’s convictions,
but we find that the district court erred in calculating Grant’s sentence.
Accordingly, we AFFIRM Grant’s convictions, VACATE his sentence and
REMAND this case for re-sentencing.
I. BACKGROUND
Grant was the president and principal owner of Southern Pride Contractors,
Inc. (“Southern Pride”), an Alabama company that did general contracting work on
various government construction projects. Southern Pride had a business line of
credit with Covenant Bank, the terms of which were governed by a commitment
letter. Under the terms of the parties’ agreement, Southern Pride was given a line
of credit of up to $500,000. The bank secured the line of credit by claiming a
security interest in Southern Pride’s inventory and accounts receivable. The
commitment letter required that Southern Pride provide Covenant Bank with
2
statements showing its accounts receivable, on a monthly basis. In addition, the
letter stipulated that Southern Pride could only draw funds on its line of credit up
to 80% of the value of the accounts receivable that it had pledged as collateral.
In August or September 2002, Southern Pride began pursuing a lucrative
construction contract with the Anniston Army Depot in Anniston, Alabama (the
“Anniston contract”). However, Southern Pride was having short-term financial
difficulties; the record suggests that its $500,000 line of credit was almost fully
exhausted by the fall of 2002.1 Thus, in an apparent effort to increase its cash flow
and hopefully procure the Anniston building contract, Southern Pride sought to
raise its line of credit with Covenant Bank to $800,000.
In a meeting with Southern Pride’s officers, Covenant Bank indicated that,
in order to have its line of credit raised to $800,000, Southern Pride would be
required to show that had accounts receivable of approximately $1 million.
Subsequent to that meeting, in September 2002, Southern Pride began submitting
statements to Covenant Bank showing monthly accounts receivable of
approximately $1 million.2 In reality, Southern Pride’s actual accounts receivable
1
At the sentencing hearing, a representative of the bank testified that, sometime around
September 2002, the line of credit had an outstanding balance of approximately $496,000.
2
Southern Pride submitted the following accounts receivable statements: September
2002 ($1,046,700); October 2002 ($1,089,000); November 2002 ($985,750); December 2002
($889,000); April 2003 ($1,109,550); May 2003 ($1,112,000).
3
were substantially less than the amounts that were reported to the bank during this
period. Although the line of credit was never increased as Southern Pride had
hoped, it is undisputed that its submissions to the bank were not accurate, and that
the company’s financial position was much more dire than its monthly financial
statements suggested. Southern Pride ceased its operations completely in 2003,
and the bank was unable to collect the outstanding balance on the line of credit.
After recovering approximately $12,000 from seizing a backhoe, the total amount
of the bank’s unrecovered balance was $484,137.84.
Following an investigation by the Federal Bureau of Investigation (FBI),
Grant, as principal and owner of Southern Pride, was charged with six counts3 of
“knowingly mak[ing] any false statement or report” to a federally-insured bank for
the purpose of influencing its action on a loan or advance, in violation of 18 U.S.C.
§ 1014. The indictment alleged that Grant had made, or had aided and abetted his
subordinates in making, “inflated and overstated” reports with respect to Southern
Pride’s accounts, for the purpose of extending the company’s line of credit, and
that Grant had known that the actual submissions were “substantially less than
what was stated.” R1-1 at 1-2. In addition, Count Seven of the indictment alleged
3
The indictment contained six counts under 18 U.S.C. § 1014, one for each monthly
submission in which the company’s accounts receivable amounts were overstated.
4
a count for bank fraud, 18 U.S.C. § 1344.4 Count Eight alleged a separate count
for conspiracy to defraud a federally-insured bank, 18 U.S.C. § 371. Grant’s
erstwhile comptroller, Michael Crisp, who had participated in the submissions to
the bank during the period in question, was separately charged with violating 18
U.S.C. § 1014; he later pled guilty and testified against Grant at trial.
Grant’s jury trial was held in January 2005. Following a two-day trial, the
jury convicted Grant of all six counts of making a false statement to a federally-
insured bank, in violation of 18 U.S.C. § 1014. The jury acquitted Grant of the
conspiracy charge alleged in Count Eight. The district court sentenced Grant to a
term of ten months, consisting of five months of imprisonment, followed by five
months of home detention. These appeals followed.
II. DISCUSSION
A. Grant’s Appeal of the Convictions
Grant raises two issues on appeal. First, he contends that there was
insufficient evidence to convict him of violating 18 U.S.C. § 1014. Second, he
contends that the jury instructions that the district court submitted to the jury were
erroneous and confusing, and that, as a result, his trial was prejudiced. We address
each of these arguments in turn.
4
The government voluntarily dismissed Count Seven prior to Grant’s trial, and thus this
charge was not submitted to the jury for a verdict.
5
1. Sufficiency of the Evidence
Grant first challenged the sufficiency of the evidence at the close of his trial
by moving for a judgment of acquittal, which the district court denied. Grant
contends that this denial was in error. On appeal, we review the denial of a
defendant’s motion for acquittal de novo.5 United States v. Perez-Tosta, 36 F.3d
1552, 1556 (11th Cir. 1994) (citations omitted). In considering the sufficiency of
the evidence, we view all of the evidence in the light most favorable to the
government, with all inferences and credibility choices drawn in the government’s
favor. United States v. LeCroy, 441 F.3d 914, 924 (11th Cir. 2006). We “cannot
reverse a conviction for insufficiency of the evidence unless after reviewing the
evidence in the light most favorable to the government, we conclude that no
reasonable jury could find proof beyond a reasonable doubt.” United States v.
Jones, 913 F.2d 1552, 1557 (11th Cir. 1990) (citation omitted).
Grant’s specific contention on appeal is that there was insufficient evidence
that he “made” false statements to the bank. Essentially, Grant argues that,
although he submitted falsified accounts receivable reports to Ashley Page, a loan
5
The government argues that we should review the denial of acquittal under the plain
error standard of review, since the gravamen of Grant’s argument, at least in its present form,
was not articulated before the district court. As is discussed subsequently, however, we need not
apply plain error review in this case, since Grant’s argument fails even under the more liberal de
novo standard of review.
6
officer at Covenant Bank, those reports remained in Page’s possession and the
bank never became aware of them nor relied upon them. Grant suggests that the
submission of the false reports to Page alone (who, according to Grant, was the
sole bank employee who knew of the false reports) was akin to making a false
statement and hiding it in a desk drawer, rather than circulating it within the bank.
According to this novel argument, since the bank was not aware of the existence of
the false statements, Grant could not be convicted of “mak[ing]” a false statement
to the bank. 18 U.S.C. § 1014.
We reject this contention. We have made clear that an offense is complete
under 18 U.S.C. § 1014 when it is established that (1) the defendant made a false
statement or report; and (2) that he did so for the purpose of influencing the
conduct of a federally-insured bank with respect to an application, advance,
commitment, or loan. United States v. Thorn, 17 F.3d 325, 327 (11th Cir. 1994)
(citation and internal quotations omitted). Contrary to Grant’s contention, we have
never required that the bank be actually aware of the false statement that was made.
In fact, in United States v. Lentz, our predecessor circuit rejected the suggestion
that the government was obligated to show that the false statements were
“direct[ly] present[ed]” to the bank; it was enough, we held, to show that the
defendant had “a reasonable expectation that the statement would reach [the
7
bank].” 524 F.2d 69, 70-71 (5th Cir. 1975). Nor have our cases required a
showing that the bank actually be deceived by the false statements when they are
made. United States v. Johnson, 585 F.2d 119, 125 (5th Cir. 1978). Rather, we
have made clear that the focus under 18 U.S.C. § 1014 is “on the defendant’s intent
rather than the victim.” Id. at 124. We focus on the defendant’s conduct--not
whether the bank was aware or unaware of that conduct.
In Grant’s case, it is undisputed that the reports that were submitted to the
bank were false.6 Nor does Grant actually dispute that the false statements were
intended to influence the bank.7 Rather, his appeal hinges on an additional “bank
awareness” requirement to 18 U.S.C. § 1014, one for which our case law provides
no precedent. There was ample evidence presented 8 from which a jury could
6
See Appellant’s Br. at 7 (“There is no question that the statements given [to Covenant
Bank] on the six occasions are false statements.”).
7
In arguing that his conduct was theoretically akin to hiding false reports in a bank desk
drawer, Grant rather tellingly states that “[h]e made the false statement and he intended to use it
to influence the bank but it is in the drawer and the bank doesn’t know.” Appellant’s Br. at 12
(emphasis added). His appeal does not dispute that he intended to influence the bank; rather, he
argues that the bank was not actually influenced because it remained unaware of his falsehoods.
8
Although Grant testified that he was largely unaware of the false statements that were
emanating from his company, there was a significant amount of evidence from which the jury
could have concluded otherwise. The evidence at trial included the testimony of Hayes Parnell,
the president of Covenant Bank, who testified that false statements were submitted to the bank
during the time Southern Pride was seeking a credit line increase, and that when Parnell
confronted Grant about it he did not deny that the statements were false. The government also
presented the damaging testimony of comptroller Crisp, who testified that Grant instructed him
to show accounts receivables of approximately $1 million, that Grant reviewed each of the false
statements before they were submitted to the bank, and that Grant assured Crisp not to worry
about the fact that the numbers were plainly false. Further testimony included that of Edwin
8
conclude, beyond a reasonable doubt, that Grant (1) made a false statement and
that (2) he did so with the purpose of influencing Covenant Bank’s conduct on the
line of credit. Accordingly, Grant’s motion for acquittal was properly denied.
2. Jury Instructions
Grant argues on appeal that the district court’s special jury instruction was
erroneous and confusing, and that it prejudiced his trial. Prior to having the jury
retire for its deliberations, the judge instructed the jury that, in order to find Grant
guilty, it needed to find, beyond a reasonable doubt: (1) “that the defendant
knowingly made a false statement or report to the financial institution”; (2) “that
the deposits of that institution were insured by the [FDIC]”; and (3) “that the
defendant made the false statement or report willfully and with the intent to
influence the action of the institution.” R5 at 311-12. The judge also advised the
jury that reliance on the part of the bank was not an element of the crime; the court
explained that the jury was not obligated to find “that the institution . . . was in fact
influenced or misled” by Grant’s conduct. Id. at 312.
Markham, a project manager with Southern Pride, who testified that the statements were
prepared with numbers obtained directly from Grant, and Shannon Roberts, an office manager at
Southern Pride, who testified that Grant reviewed the false reports, instructed her to fax them to
the bank, and assured her that, once the company procured the Anniston contract, the false
statements would no longer be necessary. Taken as a whole, there was ample evidence from
which “a reasonable trier of fact could find that the evidence established guilt beyond a
reasonable doubt.” United States v. Harris, 20 F.3d 445, 452 (11th Cir. 1994) (citations
omitted).
9
Subsequent to this instruction, however, the court drew the jury’s attention
to a special question at the end of the jury form, which stated: “[i]f your verdicts
as to any one or more counts is or are guilty, what amount of loss did you find,
beyond a reasonable doubt, that the Covenant Bank suffered as a result of the
offenses charged.” R5 at 320 (emphasis added). Although the amount of the
bank’s monetary loss was not an element of the crime charged, this question was
apparently submitted because of uncertainty as to what individual facts the jury
needed to find beyond a reasonable doubt in the wake of Blakely v. Washington,
542 U.S. 296, 124 S. Ct. 2531 (2004).9 The judge reminded the jury that this
additional question as to loss was to be asked only “if [it] found [Grant] guilty of
any one or more counts.” R5 at 320.
Grant argues that this instruction was confusing to the jury and that it
prejudiced him “by directing the jury to consider a matter not an element of the
crime charged in reaching its decision about the guilt or innocence of [Grant].”
9
In Blakely, the Supreme Court concluded that a sentencing judge erred in enhancing the
defendant’s sentence by 37 additional months due to the judge’s conclusion that the defendant
had acted with “deliberate cruelty,” when that fact was neither admitted by the defendant nor
found by the jury beyond a reasonable doubt. 542 U.S. at 303, 124 S. Ct. at 2537. Because the
Blakely decision suggested that certain facts needed to be found by a jury in order to later be
used in sentencing, in Grant’s case the district court asked the jury to determine, beyond a
reasonable doubt, the total amount of monetary loss the bank suffered, despite the fact that this
was not an element of the crime. This extra question was, if anything, borne of an over-
abundance of caution on the part of the district court, due its concerns as to the implications of
Blakely.
10
Appellant’s Br. at 14. Grant did not object to the jury instructions at trial, raising
this issue for the first time on appeal. Although ordinarily a challenge to a jury
instruction is reviewed de novo, because Grant failed to object to the instruction at
trial, we review for plain error only. LeCroy, 411 F.3d at 930. Under plain error
review, we may correct an error where (1) an error occurred; (2) the error was
plain; (3) the error affects substantial rights; and (4) the error seriously affects the
fairness, integrity or public reputation of judicial proceedings. Id.; see also United
States v. Olano, 507 U.S. 725, 732-36, 113 S. Ct. 1770, 1777-79 (1993).
Over and above the deference we typically afford the district court under
plain error review, we have stated that judges are given great discretion with
respect to the submission of jury instructions, and that jury instructions are not to
be “dissected on appeal.” United States v. Brown, 43 F.3d 618, 623, 627 (11th Cir.
1995). Rather, we look at the entirety of the jury instruction, examining whether,
viewed as a whole, it had a tendency to mislead the jury. Id. at 627. Grant argues
that the judge’s additional request–asking that the jury assess the amount of loss to
Covenant Bank–was tantamount to adding an extra element to the crime charged,
and that it was unduly prejudicial to his trial. We disagree.
First, at the outset of his instructions, the judge carefully instructed the jury
as to the requisite elements of the offense. Those instructions constituted an
11
accurate statement of the law. It was only after the judge had recited the elements
necessary to convict that he asked the jury to render a special finding on the
amount of loss. Despite this extra question, however, the judge made clear that the
question of loss was an additional question on the verdict form–i.e., that it was not
a part of the crime–and that the question was contingent upon the jury first finding
guilt beyond a reasonable doubt for the crime charged. As the judge explained it,
the jury was only to inquire into monetary loss “[i]f [its] verdicts as to any one or
more counts” was guilty. R5 at 320. See also id. (“So you would find that amount
if you found him guilty of any one or more counts.”) (emphasis added). The
contingent phrasing of the question made clear that it was a question to be asked
separate from the question of Grant’s guilt or innocence.
Nor does Grant explain how the special verdict question could have affected
the outcome of his case, other than his generalized contention that it caused him
“prejudice[].” Appellee’s Br. at 14. Simply put, we fail to see how this aspect of
the jury instruction substantially affected Grant’s rights. See LeCroy, 441 F.3d at
930-31 (upholding a jury instruction that permitted the jury to ask whether the
defendant was a threat to the public “if the jury first found, beyond a reasonable
doubt,” that the defendant posed an escape risk, and finding that defendant failed to
“demonstrate that there [was] a reasonable possibility of a different outcome”
12
without the jury instruction) (emphasis added). Given the careful nature of the
judge’s instructions, as well as the court’s well-founded concerns, at the time, over
the potential implications of Blakely on fact-finding for sentencing purposes, we
cannot say that the instructions constituted error, plain or otherwise.
B. Government’s Cross Appeal of Grant’s Sentence
The government cross-appeals Grant’s sentence, arguing that the district
court judge committed errors in sentencing Grant. The government’s argument on
appeal is two-fold. First, the government asserts that the district court’s calculation
of the amount of loss for sentencing purposes was clearly erroneous. Second, the
government contends that the sentence that the court imposed on Grant was
improper because it was below the range recommended by the Sentencing
Guidelines, and the court failed to state adequate reasons supporting that sentence.
Because we agree with the government’s first contention, we need not reach the
second issue.
1. Calculation of Loss
The district court’s calculation of the amount of loss for sentencing purposes
is a factual determination reviewable for clear error. United States v. Delgado, 321
F.3d 1338, 1348 (11th Cir. 2003); United States v. Maung, 267 F.3d 1113, 1118
(11th Cir. 2001). We have indicated that clear error will be present when “we are
13
left with a definite and firm conviction that a mistake has been committed” by the
district court. United States v. Crawford, 407 F.3d 1174, 1177 (11th Cir. 2005)
(citation omitted).
Under U.S.S.G. § 2B1.1, the base offense level for a theft offense involving
fraud or deceit is six. In addition, the Guidelines state that a defendant’s offense
level is subject to enhancement if the monetary loss in the case exceeded $5,000.
U.S.S.G. § 2B1.1(b)(1). The extent of the sentence enhancement is determined by
the total amount of the loss. Id. A loss of more than $400,000, for example, leads
to a fourteen-level enhancement. See U.S.S.G. § 2B1.1(b)(1)(H).
In Grant’s case, the probation officer prepared a Presentence Investigation
Report (“PSI”) prior to the Sentencing Hearing. The PSI calculated Grant’s base
offense level as six, pursuant to U.S.S.G. § 2B1.1(a). The PSI calculated the total
loss to the bank as $481,945.38. Thus the PSI recommended a fourteen-level
enhancement to Grant’s sentence, since the offense involved a loss of more than
$400,000 but less than $1,000,000. See U.S.S.G. § 2B1.1(b)(1)(H). The PSI also
recommended another two-level enhancement for obstruction of justice, pursuant
to U.S.S.G. § 3C1.1. This resulted in a total offense level of 22. With an offense
level of 22 and a criminal history category of I, Grant was subject to a Guidelines
14
range of 41 to 51 months of imprisonment.10
At the sentencing hearing, the district court judge expressed concern over
the proper calculation of the loss amount for purposes of U.S.S.G. §2B1.1. The
court made clear that it was unconvinced that the total loss was $481,945.38, the
figure indicated in the PSI. Specifically, the court observed that Southern Pride’s
line of credit was close to fully exhausted–with a balance of around $496,000–even
before the company started falsifying its accounts receivable in September 2002.
In light of that fact, the court expressed skepticism that Grant’s conduct caused a
loss of over $400,000, as the PSI alleged. The court asked the government to
establish with more certainty the sum of money that Grant obtained and failed to
pay back as a result of his false statements to the bank. R9 at 4. As the court
indicated, if Grant “already owed the money [] before he ever gave that [false]
information, [then] giving that information didn’t cause the loss.” Id.
In response, the government offered the testimony of Hayes Parnell, the
president of Covenant Bank. Parnell testified that the total outstanding balance on
the account at the time Southern Pride ceased its operations in 2003 was
approximately $496,000, and that, after recovering a single backhoe worth
$12,000, the total loss that the bank wound up suffering was approximately
10
The 2003 edition of the Sentencing Guidelines was used in calculating Grant’s
sentence.
15
$484,000. When pressed by the court as to whether that loss was caused by
Grant’s false statements in 2002 (as opposed to being simply a prior outstanding
balance), Parnell testified that if the bank not been deceived by Grant throughout
2002-2003, it could have taken steps, prior to Southern Pride’s closing, to protect
its security interest. Parnell pointed out that the bank had a contractual right, in the
event of a default, to offset the outstanding balance on line of credit with Southern
Pride’s deposits, and that it would have sought to do so had it known of Southern
Pride’s repeated false submissions. Parnell also testified that the bank “could have
done what we could to get the note paid down to where it was within the amount of
the collateral; or we would have called the whole loan, if we had been suspicious
enough to think that something really bad was happening.” R9 at 10-11. The
government maintained that, since the bank might have collected some of the lost
funds from Southern Pride’s accounts receivables had it known of Grant’s false
statements sooner–and, at least in that sense, Grant’s fraudulent conduct “caused”
the bank’s loss–the loss amount should be the sum that the bank had failed to
recover, i.e. $484,000.
The district court, however, remained unpersuaded by this argument. The
court informed the government that it could not find, by a preponderance of the
evidence, that the total loss was $484,000. When the court asked Grant’s counsel
16
for his suggested loss amount for purposes of § 2B1.1, he indicated that the loss
should be approximately $20,000.11 The court rejected both figures, stating: “I’m
going to find, and I know this may sound arbitrary . . . . I’m going to find that the
loss is $50,000.” R9 at 18. This determination resulted in a six-level enhancement
in Grant’s sentence, see U.S.S.G. § 2B1.1(b)(1)(D), rather than the fourteen-level
enhancement that the government had sought. Consequently, Grant’s sentencing
range went from a recommended 41 to 51 months of prison (Offense Level 22) to a
15 to 21 month sentencing range (Offense Level 14).
In cases involving financial fraud, such as Grant’s, the district court is
required to calculate properly the amount of loss pursuant to U.S.S.G. § 2B1.1.
See United States v. Hamaker, 455 F.3d 1316, 1336 (11th Cir. 2006). Indeed, the
commentary to U.S.S.G. § 2B1.1 states that “loss serves as a measure of the
seriousness of the offense and the defendant’s relative culpability and is a principal
factor in determining the offense level under this guideline.” U.S.S.G. § 2B1.1 cmt.
backg’d (emphasis added). While the district court retains broad discretion in
determining the loss amount, Hamaker at 1338, the court nevertheless is obligated
11
Grant’s attorney arrived at this figure by arguing that the balance in October 2002 had
been drawn down to $464,000, and that the line increased between that period and Southern
Pride’s demise in 2003 to $484,000–a difference of $20,000. Although Grant’s counsel stated at
the hearing that the difference between $464,000 and $484,000 was “$10,000,” R9 at 17, we
assume that he intended to state $20,000 as the loss proposed figure.
17
to “make independent findings establishing the factual basis for its guidelines
calculation.” Id. “The district court’s factual findings for purposes of sentencing
may be based on, among other things, evidence heard during trial, undisputed
statements in the PSI, or evidence presented during the sentencing hearing.”
United States v. Polar, 369 F.3d 1248, 1255 (11th Cir. 2004).
In this case, the district court first concluded that government had failed to
show a loss of $484,000 by the preponderance of the evidence. In the wake of that
determination, the court proceeded to reject both the government’s recommended
loss amount ($484,000) and the defendant’s recommended loss amount ($20,000),
as well as the loss that had been found, beyond a reasonable doubt, by the jury at
trial ($350,000). Rather than adopting any of these figures, the court settled,
somewhat inexplicably, on a total loss amount of $50,000. Not only was the
record devoid of any such basis for arriving at that figure as the loss, but the court
failed to state any “findings establishing the factual basis for its Guidelines
calculation.” Hamaker at 1338. Moreover, in a burst of candor, the court stated its
recognition that the $50,000 figure “may sound arbitrary.” R9 at 18. In similar
cases involving unexplained loss calculations by the sentencing judge, we have
seen fit to vacate the sentence and remand the case for re-sentencing. See, e.g.,
United States v. Liss, 265 F.3d 1220, 1231 (11th Cir. 2001) (vacating a district
18
court’s sentence and remanding for re-sentencing, since the court “fail[ed] to make
sufficient factual findings regarding the amount of loss” under the Guidelines).
We do so here.
The case of United States v. Renick, 273 F.3d 1009 (11th Cir. 2001) (per
curiam), is strikingly on point with the facts of Grant’s case. In Renick, which
involved Medicare fraud, the sentencing judge noted difficulties in calculating the
total amount of loss, due to factual gaps in the record. After rejecting the
government’s recommended loss amount, the court stated: “in the absence of
anything more concrete, I’m just gonna arbitrarily pick a number and say it’s
between 70,000 and a hundred twenty thousand and we will proceed.” 273 F.3d at
1024. On appeal, we held that this estimate of the loss was arbitrary, “an abuse of
discretion and contrary to law.” Id. at 1027. We stated that there was “no basis for
making a reasonable estimate as to [the] loss,” and that, apparently, “the district
court felt some duty to find some loss, arbitrary or otherwise, but . . . stated no
findings upon which its ‘estimate’ was made.” Id. Accordingly, we vacated the
sentence imposed and remanded the case for re-sentencing. Id. at 1028.
Here, as in Renick, the district court failed to provide any factual basis
whatsoever for its ultimate loss calculation of $50,000. Thus, the district court
clearly erred in calculating the amount of loss attributable to Grant’s false
19
statements. And because the amount of loss is an essential component in the
calculation of a defendant’s sentence under U.S.S.G. § 2B1.1, the court erred in
calculating Grant’s sentence under the Guidelines. We conclude that Grant’s
sentence should be vacated, and that his case should be remanded to the district
court for re-sentencing.
2. Sentence Imposed
The government also argues that the district court erred in sentencing Grant
below the recommended Guidelines range without stating its reasons in support of
that decision. The court sentenced Grant to ten months–five months of
imprisonment followed by five months of home custody–when the recommended
range (for an Offense Level 14) was 15 to 21 months.12 Because we have already
concluded that the district court’s calculation of the sentencing range was based on
an improper calculation of the total loss amount, however, we need not address the
12
As an aside, we note that the district court judge imposed Grant’s sentence under the
apparent misapprehension that he was sentencing Grant within the recommended Guidelines
range. The judge stated “I see no grounds for departure” and then proceeded to sentence outside
of the Guidelines range. R9 at 37. Over and above the court’s erroneous calculation of Grant’s
sentence as discussed in the previous section, this fact alone would be sufficient grounds to
vacate Grant’s sentence and remand his case, since we have made clear that the court’s duty to
properly “consult” the guidelines cannot be based on an erroneous understanding of them. See
Crawford, 407 F.3d at 1183 (“[B]ecause true consultation cannot be based on an erroneous
understanding of the Guidelines, the district court erred in failing to consult properly the
Guidelines.”); id. at 1179 (“A misinterpretation of the Guidelines by a district court effectively
means that the district court has not properly consulted the Guidelines.”(citation and alteration
omitted)).
20
government’s separate argument concerning the district court’s failure to state its
reasons for a downward departure. The recommended range itself was based on a
faulty calculation of the loss amount; that fact, standing alone, militates in favor of
a remand, irrespective of the court’s decision to sentence outside of that range.
III. CONCLUSION
Grant has appealed his convictions for violating 18 U.S.C. § 1014,
challenging both the sufficiency of the evidence and the district court’s instructions
to the jury prior to its deliberations. The government has cross-appealed,
contending that the district court committed errors in the manner in which it
calculated and imposed Grant’s sentence. Upon careful review of the record, we
discern no error pertaining to Grant’s convictions. However, we agree that the
district court committed errors in calculating Grant’s sentence. Accordingly, we
AFFIRM Grant’s convictions, VACATE Grant’s sentence, and REMAND this
case for re-sentencing.
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