United States v. Kilkenny

05-6847
U.S.A. v. Kilkenny
1 UNITED STATES COURT OF APPEALS
2 FOR THE SECOND CIRCUIT
3
4 _______________
5
6 August Term, 2006
7
8 (Submitted October 27, 2006 Decided July 5, 2007)
9
10 Docket No. 05-6847-cr
11
12 _______________
13
14 United States of America,
15
16 Appellee,
17
18 v.
19
20 Patrick J. Kilkenny,
21
22 Defendant-Appellant.
23
24 _______________
25
26 Before:
27 CARDAMONE, WALKER, and STRAUB,
28 Circuit Judges.
29
30 _______________
31
32 Defendant Patrick Kilkenny appeals from an amended judgment
33 of conviction entered in the United States District Court for the
34 Northern District of New York (Hurd, J.) on December 8, 2005,
35 after pleading guilty to bank fraud in violation of 18 U.S.C.
36 § 1344(2), mail fraud in violation of 18 U.S.C. §§ 1341, 1342 and
37 structuring a financial transaction to evade currency reporting
38 requirements in violation of 31 U.S.C. § 5324(a)(3). Defendant
39 was sentenced to 216 months in prison, five years of supervised
40 release, restitution of $7,860,321.39, and a special assessment
41 of $300.
42
43 Remanded for resentencing.
44
45 _______________
1 _______________
2
3 Terence L. Kindlon, Kindlon and Shanks, P.C., Albany, New York,
4 filed a brief for Defendant-Appellant.
5
6 Sara M. Lord, Assistant United States Attorney, Albany, New York
7 (Glenn T. Suddaby, United States Attorney, Brenda K. Sannes,
8 Assistant United States Attorney, Northern District of New
9 York, Albany, New York, of counsel), filed a brief for
10 Appellee.
11
12 _______________
1 CARDAMONE, Circuit Judge:
2 Patrick Kilkenny (defendant or appellant) appeals from an
3 amended judgment of conviction entered on December 8, 2005 in the
4 United States District Court for the Northern District of New
5 York (Hurd, J.). The conviction followed Kilkenny's plea of
6 guilty to three counts of an information charging him with bank
7 fraud in violation of 18 U.S.C. § 1344(2), mail fraud in
8 violation of 18 U.S.C. §§ 1341, 1342, and structuring a financial
9 transaction to evade currency reporting requirements in violation
10 of 31 U.S.C. § 5324(a)(3).
11 Applying the 2002 version of the United States Sentencing
12 Guidelines (Guidelines or U.S.S.G.), the district court sentenced
13 Kilkenny principally to a term of 216 months imprisonment.
14 Kilkenny appeals this judgment alleging, inter alia, that the
15 district court's use of the 2002 version of the Guidelines
16 violated the Ex Post Facto Clause of Article I of the
17 Constitution. U.S. Const. art. 1, § 9, cl. 3. We think that
18 application of the 2002 version of the Guidelines was in error
19 and therefore remand the case for resentencing. We have
20 considered defendant's other arguments and find them to be
21 without merit.
22 BACKGROUND
23 The facts underlying this appeal are largely uncontested.
24 On July 25, 2003 Kilkenny waived indictment and pled guilty to
25 each of three counts in a felony information. The plea agreement
26 that defendant entered into with the government on that date
2
1 included a detailed set of stipulated facts that formed the
2 factual predicate for the guilty plea. Although Kilkenny
3 admitted to having fraudulently obtained over a dozen bank loans
4 and to having committed various other crimes, only three criminal
5 counts were charged against him in the information.
6 Count One charged him with executing a scheme "[f]rom in or
7 about September 2000 through on or about May 8, 2002" to defraud
8 M&T Bank. The government alleged, and defendant admitted, that
9 on September 19, 2000 he applied for and subsequently received a
10 loan from M&T Bank in the amount of $467,541. In his loan
11 application, Kilkenny grossly overstated his assets and income,
12 submitted fraudulent personal and corporate income tax returns,
13 and failed to report more than $1.3 million in debts. As a
14 result of these misrepresentations, M&T Bank was forced to
15 foreclose on the loan on May 8, 2002 and in so doing suffered a
16 monetary loss of more than $450,000. Count Two charged defendant
17 with defrauding 22 individuals of $910,000 by inducing them to
18 invest in Panamanian bonds which Kilkenny was not authorized to
19 issue and which were not valid instruments. The government
20 alleged and defendant admitted that this scheme took place from
21 February 2000 through June 2001. Finally, in Count Three of the
22 information, the government charged defendant with structuring
23 certain cash deposits on July 24, 2001 to avoid currency
24 reporting requirements.
25 Following defendant's guilty plea, the United States
26 Probation Office prepared a presentence investigation report
3
1 (PSR) using the 2002 version of the Guidelines. The PSR
2 calculated a base-offense level of six pursuant to U.S.S.G.
3 § 2B1.1(a) (2002) and recommended five enhancements: (1) a 20-
4 level enhancement for the amount of loss, id. at
5 § 2B1.1(b)(1)(K); (2) a four-level enhancement for the number of
6 victims, id. at § 2B1.1(b)(2)(B); (3) a two-level enhancement for
7 obtaining more than $1 million from financial institutions, id.
8 at § 2B1.1(b)(12)(A); (4) a two-level enhancement for obstruction
9 of justice, id. at § 3C1.1; and (5) a two-level enhancement for
10 defendant's supervision of a criminally responsible participant,
11 his bookkeeper, Melanie Ramsey, id. at § 3B1.1(c). The resulting
12 total offense level was 36, with a Guidelines range between 188
13 and 235 months imprisonment.
14 At a sentencing hearing on December 12, 2003 defense counsel
15 made several objections to the PSR. First, defense counsel took
16 issue with the version of the Guidelines used to calculate
17 defendant's sentence. Kilkenny contended that instead of the
18 2002 Guidelines, the 2000 Guidelines should have been applied
19 because all of the conduct relating to the offenses of conviction
20 occurred before November 1, 2001 when the 2001 version of the
21 Guidelines went into effect. Second, defense counsel objected to
22 the two-level enhancement for Kilkenny's supervision of a
23 criminally responsible participant. Third, the defense asserted
24 a three-level reduction was warranted for acceptance of
25 responsibility. The sentencing court was not persuaded by these
26 objections. Applying the 2002 version of the Guidelines, which
4
1 are in all relevant respects identical to the 2001 version, the
2 court sentenced Kilkenny to 235 months in prison, followed by
3 five years of supervised release, and restitution in the amount
4 of $7,327,854.36.
5 While defendant's first appeal to this Court was pending,
6 the Supreme Court handed down United States v. Booker, 543 U.S.
7 220 (2005), which rendered advisory the sentencing range
8 calculated under the Guidelines. In a summary order, we remanded
9 the case for resentencing pursuant to Booker and declined to
10 reach the other issues defendant raised on appeal. United States
11 v. Kilkenny, No. 03-1775 (2d Cir. March 15, 2005).
12 Defendant was resentenced on November 28, 2005. The
13 district court again applied the 2002 version of the Guidelines,
14 finding that the offense of conviction continued through May 8,
15 2002. In particular, it concluded that, although Kilkenny
16 applied for and received the M&T bank loan in September 2000, his
17 subsequent failure to make payments on the loan extended the
18 offensive conduct until the bank initiated foreclosure
19 proceedings in 2002. The trial judge stated that in applying the
20 2002 date he was "relying on the entire range of conduct" and
21 that Kilkenny's conduct of fraud and deception extended "actually
22 even into 2003 in relation to additional individual victims which
23 were not specifically charged but detailed in the presentence
24 report." The court also noted that "the May 8, 2002 date is
25 specifically charged in Count One of the Information." Applying
26 the 2002 Guidelines, it resentenced Kilkenny to a total term of
5
1 216 months imprisonment, 19 months less than the sentence it had
2 originally imposed, followed by five years of supervised release,
3 restitution of $7,860,321.39, and a special assessment of $300.
4 From this judgment, Kilkenny appeals. For the reasons set
5 forth below, we remand the case to the district court with
6 instructions to resentence defendant under the 2000 version of
7 the Guidelines.
8 DISCUSSION
9 I Standard of Review
10 We review a sentencing court's interpretation and
11 application of the Guidelines de novo. United States v. Sloley,
12 464 F.3d 355, 358 (2d Cir. 2006). Findings of fact are reviewed
13 under the clearly erroneous standard. Id. A finding is clearly
14 erroneous if, "although there is evidence to support it, the
15 reviewing court on the entire evidence is left with the definite
16 and firm conviction that a mistake has been committed." Anderson
17 v. Bessemer City, 470 U.S. 564, 573 (1985).
18 II Ex Post Facto Laws
19 The premise of this opinion rests on an application of that
20 provision in Article I of the United States Constitution that
21 prohibits Congress from passing any "ex post facto Law." See
22 U.S. Const. art. I, § 9, cl. 3; see also art. I, § 10, cl. 1
23 (prohibiting states from passing any ex post facto law). For
24 that reason it is helpful to state first our understanding of
25 what that constitutional clause means. It is hard to improve on
26 the definition of the Ex Post Facto Clause set out in an early
6
1 Supreme Court case, Calder v. Bull, 3 U.S. (3 Dall.) 386 (1798).
2 In that case Justice Chase described the following kind of
3 legislation as prohibited
4 1st. Every law that makes an action done
5 before the passing of the law, and which was
6 innocent when done, criminal; and punishes
7 such action.
8
9 2d. Every law that aggravates a crime, or
10 makes it greater than it was, when committed.
11
12 3d. Every law that changes the punishment,
13 and inflicts a greater punishment, than the
14 law annexed to the crime, when committed.
15
16 4th. Every law that alters the legal rules of
17 evidence, and receives less, or different
18 testimony, than the law required at the time
19 of the commission of the offence, in order to
20 convict the offender.
21
22 Id. at 390.
23 The reason for the clause's adoption in the Constitution
24 was, as the Supreme Court has explained, to restrain Congress
25 from enacting "arbitrary or vindictive" laws. See Miller v.
26 Florida, 482 U.S. 423, 429 (1987). The clause also ensures that
27 individuals are given "fair warning" of a law's effect. Id. at
28 430. Examples from history vividly illustrate the importance of
29 these dual functions. Perhaps the most dramatic example of a
30 vindictive law unconstrained by any ex post facto prohibition
31 occurred in pre-World War II Germany. After an arsonist burned
32 the Reichstag in Berlin in February 1933, the newly empowered
33 Nazi government authorized increasing the punishment for arson
34 from imprisonment to death. See 2 Morris Ploscowe, Crime and
35 Criminal Law 70-71 (1939). The arsonist was duly executed. Id.7
1 Blackstone illustrates the second purpose of the Ex Post Facto
2 Clause, providing fair warning, by looking to the policies of the
3 Roman despot Caligula. See 1 William Blackstone, Commentaries on
4 the Laws of England 46 (1765). Caligula had laws written in fine
5 print and hung them high up on pillars so that they were not
6 available to nor readable by the Roman citizens affected by such
7 laws. Id. They provided no fair warning and so, like laws made
8 ex post facto, they would not have provided citizens fair notice
9 to refrain from the criminalized conduct. Sash v. Zenk, 439 F.3d
10 61, 64 (2d Cir. 2006) (notice problems arise when retrospective
11 changes are made in laws upon which citizens are entitled to
12 rely).
13 Thus, the Ex Post Facto Clause enshrines in the Constitution
14 a basic presumption of our law, that is, legislation in the
15 criminal law "is not to be applied retroactively." See Johnson
16 v. United States, 529 U.S. 694, 701 (2000).
17 III Which Version of the Guidelines Applies?
18 A. General Principles
19 With that background, we turn to the case at hand.
20 Ordinarily a sentencing court must apply the version of the
21 Guidelines in effect on the date of the defendant's sentencing.
22 United States v. Keller, 58 F.3d 884, 889 (2d Cir. 1995); see
23 also United States v. Keigue, 318 F.3d 437, 442 (2d Cir. 2003)
24 (remanding because district court applied expired version of
25 Guidelines when no ex post facto problem was raised by
26 application of Guidelines in effect at time of sentencing). At
8
1 the same time we have recognized an exception to this general
2 rule. When the application of the Guidelines in effect at the
3 time of sentencing would result in a more severe penalty than
4 would application of the Guidelines in effect at the time the
5 offense was committed, the Ex Post Facto Clause requires the use
6 of the earlier version of the Guidelines. Keller, 58 F.3d at7 889.
8 B. Is This an Ex Post Facto Application of the Guidelines?
9 To decide whether a criminal law is ex post facto, we apply
10 a two-part test: first, the law must be retrospective, applying
11 to events that occurred before its enactment; second, the law
12 must be disadvantageous to the individual affected by it.
13 Miller, 482 U.S. at 430; Keller, 58 F.3d at 889. In this case,
14 it is not disputed that defendant was disadvantaged by the
15 application of the 2002 Guidelines. If appellant had been
16 sentenced under the 2000 Guidelines, he would have been subject
17 to a recommended Guidelines range of 97 to 121 months
18 imprisonment. Under the 2002 Guidelines, he was subject to a
19 recommended range of 188 to 235 months. That is roughly 8 to 10
20 years compared to 16 to 20 years.
21 Our inquiry is thus focused on the first prong of the ex
22 post facto test: Was the application of the 2002 Guidelines to
23 Kilkenny's crimes retrospective? The application of a particular
24 version of the Guidelines is retrospective if the version went
25 into effect after the last date of the offense of conviction.
26 See United States v. Fitzgerald, 232 F.3d 315, 318-19 (2d Cir.
9
1 2000) (per curiam). The district court determined the last date
2 of offensive conduct in this case was May 8, 2002. This finding
3 rested on the following bases: (1) the statement in the
4 information that the M&T Bank fraud scheme lasted "[f]rom in or
5 about September 2000 through on or about May 8, 2002;" (2)
6 Kilkenny's failure to make payments on the M&T Bank loan until
7 the loan was foreclosed on May 8, 2002; and (3) the "entire range
8 of conduct" which extended into 2003. We address each of these
9 bases in turn.
10 1. The Statement in the Indictment
11 To determine the last date of the offense of conviction, a
12 sentencing court looks at the conduct charged in the information
13 or indictment. See United States v. Broderson, 67 F.3d 452, 456
14 (2d Cir. 1995); U.S.S.G. § 1B1.11 cmt. n.2. Like any other
15 factual determination made by a sentencing court, the finding of
16 the last date of the offense of conviction must withstand clear
17 error review. See, e.g., United States v. Carter, 410 F.3d 1017,
18 1027 (8th Cir. 2005); United States v. Nash, 115 F.3d 1431, 1441
19 (9th Cir. 1997).
20 Because a sentencing court may not consider uncharged or
21 acquitted conduct in determining the last date of the offense of
22 conviction, see United States v. Zagari, 111 F.3d 307, 324-25 (2d
23 Cir. 1997), the dates alleged in the charging instrument will
24 generally be determinative for ex post facto purposes, see
25 Broderson, 67 F.3d at 456. However, circumstances may arise
26 where a date in the charging instrument clearly exceeds the
10
1 offensive conduct. See, e.g., United States v. Foote, 413 F.3d
2 1240, 1250 & n.6 (10th Cir. 2005) (finding that "uncontradicted
3 evidence" established that offense ended on December 7, 1998
4 despite statement in indictment that conspiracy continued until
5 October 2000). In such circumstances, it is clearly erroneous
6 for a sentencing court to rely on the date charged in the
7 indictment to determine the last date of the offense of
8 conviction. For example, in Nash, the Ninth Circuit had a case
9 before it in which the indictment charged that the defendant's
10 fraudulent scheme continued until 1988, but all of the specific
11 incidents described in the indictment occurred before November 1,
12 1987. 115 F.3d at 1441. The Nash court upheld the district
13 court's determination that, contrary to the statement in the
14 indictment, the offense was completed prior to November 1, 1987.
15 Id.16 Admittedly, we have not always made perfectly clear that
17 dates in an indictment are not necessarily dispositive. In
18 Broderson, for example, we stated, "[t]he last date of the
19 offense, as alleged in the indictment, is the controlling date
20 for ex post facto purposes." 67 F.3d at 456. Read in context,
21 however, this language only stands for the unsurprising
22 proposition that a sentencing court must look to the conduct
23 alleged in the count of the charging instrument under which the
24 defendant was convicted to determine the last date of offensive
25 conduct. The defendant in Broderson was charged with illegally
26 transmitting an interstate wire communication on October 1, 1990.
11
1 Id. On appeal, Broderson asserted the government could have
2 charged the crime differently, but he did not contest that he had
3 transmitted the wire communication on that date. Id. at 456-57.
4 We ruled that the district court had correctly determined the
5 last date of offensive conduct was October 1, 1990, as charged in
6 the indictment. Id. at 457. Broderson thus did not consider or
7 decide the question of whether a district court should rely on a
8 date in a charging instrument that clearly exceeds the offensive
9 conduct. We now hold that it may not.
10 The time period provided for in the charging instrument in
11 this case clearly exceeds the offensive conduct. Although the
12 information states that Kilkenny executed the M&T bank fraud
13 scheme from "in or about September 2000 through on or about May
14 8, 2002," neither the information nor the stipulated facts
15 accompanying the plea agreement describe any offensive conduct
16 taken by Kilkenny with respect to the M&T bank fraud scheme after
17 2000. It is instead uncontested that the M&T loan was applied
18 for and received by Kilkenny in September 2000 and that he took
19 no further action with respect to that loan -- apart from failing
20 to repay it -- after September 2000. There is no evidence that
21 any offensive conduct regarding the M&T bank fraud scheme
22 occurred after 2000. It was therefore clear error for the
23 district court to rely on the May 8, 2002 date.
24 2. Failure to Repay the Fraudulently Obtained Bank Loan
25 The district court's finding that Kilkenny failed to repay
26 the bank loan in 2002 does not change this result. Failure to
12
1 repay a fraudulently obtained bank loan does not constitute
2 conduct for the offense of bank fraud. Under the federal bank
3 fraud statute, it is a crime to "knowingly execute[ ], or
4 attempt[ ] to execute, a scheme or artifice . . . to obtain any
5 of the moneys, funds, credits, assets, securities, or other
6 property owned by, or under the custody or control of, a
7 financial institution, by means of false or fraudulent pretenses,
8 representations, or promises." 18 U.S.C. § 1344. The language
9 of § 1344 punishes each execution of a fraudulent scheme, not
10 each act in furtherance of such a plan. United States v. Harris,
11 79 F.3d 223, 232 (2d Cir. 1996). Although the statutory text
12 does not define "execution," there is helpful case law
13 interpreting that term. In analyzing when a fraudulent scheme
14 was executed, courts look to a number of factors, including the
15 overall contours of the fraudulent scheme and -- perhaps most
16 importantly -- the point at which the financial institution was
17 put at risk of financial loss. See United States v. De La Mata,
18 266 F.3d 1275, 1287-88 (11th Cir. 2001) ("[A] bank fraud offense
19 is complete upon the 'execution,' or attempted execution of the
20 scheme. . . . [E]ach part of the scheme that creates a separate
21 financial risk for the financial institution constitutes a
22 separate execution."); United States v. Anderson, 188 F.3d 886,
23 888 (7th Cir. 1999) ("[T]he crime of bank fraud is complete when
24 the defendant places the bank at a risk of financial loss, and
25 not necessarily when the loss itself occurs."); United States v.
26 Rimell, 21 F.3d 281, 287 (8th Cir. 1994) (stating that to
13
1 determine what constitutes an execution of a bank fraud scheme
2 one must first "ascertain the contours of the scheme"); United
3 States v. Hord, 6 F.3d 276, 282 (5th Cir. 1993) (finding that
4 bank fraud plan was executed with each deposit of a bogus check
5 in part because "it was the deposits that put the bank at risk");
6 see also United States v. Reitmeyer, 356 F.3d 1313, 1318 (10th
7 Cir. 2004) (holding, in the context of the Major Fraud Act, that
8 determining when a scheme is executed will depend on factors
9 including the goal of the plan, its nature, the benefits
10 intended, and whether the conduct created a new and independent
11 financial risk.).
12 There are of course situations where conduct for the offense
13 of bank fraud occurs after the point at which the bank is first
14 put at risk of financial loss. Our decision in United States v.
15 Duncan, 42 F.3d 97 (2d Cir. 1994), provides a useful illustration
16 of such a situation. In Duncan, several directors of a savings
17 and loan association conspired to purchase two parcels of real
18 estate in order to lease or sell the property back to the bank at
19 a profit. Id. at 99-100. The transactions were orchestrated so
20 as to hide the conspirators' interest in the real estate from the
21 other bank directors. Id. After his conviction for bank fraud,
22 Duncan raised an ex post facto challenge on appeal. He contended
23 the bank fraud was complete once the conspirators agreed to
24 secretly purchase the property. Id. at 103-04. We rejected that
25 characterization, holding instead that the offensive conduct was
26 not complete until the real estate was sold back to the bank.
14
1 Id. at 104. Key to the result in Duncan was the fact that the
2 sale of these properties to the bank was the "central object of
3 the charged criminal conduct." Id. (emphasis added). Notably,
4 the resale of the properties to the bank in Duncan posed a risk
5 of financial loss that was separate and independent from the
6 defendant's initial usurpation of the corporate opportunity. See
7 id. (stating that conspirators intended to both "seize for
8 themselves two pieces of property at a bargain" and "sell the
9 properties to the bank at a premium").
10 There are no facts in the case presently before us analogous
11 to those at issue in Duncan. It is clear that the main purpose
12 of Kilkenny's bank fraud scheme was to obtain the M&T bank loan
13 on false pretenses. The bank was put at risk of financial loss
14 as soon as Kilkenny had submitted the fraudulent loan application
15 and obtained the funds. The information alleges no further
16 conduct on Kilkenny's part that created a new or additional risk
17 of loss.
18 The government insists that, by failing to make payments on
19 the fraudulently obtained loan, appellant extended the life of
20 the illegal plan through his enjoyment of the proceeds. Adopting
21 this approach would go too far, potentially extending the offense
22 of bank fraud indefinitely. No doubt, the vast majority of bank
23 fraud schemes entail not only obtaining but also retaining the
24 ill-gotten gains. But when the proceeds of a criminal venture
25 are spent may not be viewed as part of a plan to defraud. See
26 Anderson, 188 F.3d at 891. To rule otherwise and hold that
15
1 failure to repay a fraudulently obtained bank loan constitutes
2 conduct for the offense of bank fraud would extend the life of
3 the offense so indefinitely as to render the ex post facto
4 prohibition ineffective. The Supreme Court has cautioned against
5 such a result in other contexts. See Grunewald v. United States,
6 353 U.S. 391, 402 (1957) (holding a conspiracy to conceal should
7 not be inferred from acts of concealment because "every
8 conspiracy will inevitably be followed by actions taken to cover
9 the conspirators' traces" and the opposite result would "extend
10 the life of a conspiracy indefinitely").
11 Kilkenny's M&T bank fraud scheme was executed no later than
12 when he received the funds from his fraudulent loan application.
13 Consequently, it was error for the district court to treat
14 defendant's subsequent failure to repay the fraudulently obtained
15 bank loan as conduct that was part of the offense of bank fraud.
16 3. The Relevance of the Entire Range of Conduct
17 Finally, the district court based its decision to apply the
18 2002 Guidelines on the entire range of conduct committed in the
19 case that continued "actually even into 2003 in relation to
20 additional individual victims which were not specifically charged
21 but detailed in the presentence report." However, the law in
22 this Circuit is plain that uncharged conduct occurring after the
23 conduct of conviction cannot be considered when determining which
24 version of the Guidelines to apply. See Zagari, 111 F.3d at 324-
25 25. Commentary to the Guidelines, which we have found to be
16
1 highly persuasive evidence of the Sentencing Commission's intent,
2 addresses this precise issue
3 Under subsection (b)(1), the last date of the
4 offense of conviction is the controlling date
5 for ex post facto purposes. For example, if
6 the offense of conviction (i.e., the conduct
7 charged in the count of the indictment or
8 information of which the defendant was
9 convicted) was determined by the court to
10 have been committed between October 15, 1991
11 and October 28, 1991, the date of October 28,
12 1991 is the controlling date for ex post
13 facto purposes. This is true even if the
14 defendant's conduct relevant to the
15 determination of the guideline range under
16 § 1B1.3 (Relevant Conduct) included an act
17 that occurred on November 2, 1991 (after a
18 revised Guideline Manual took effect).
19
20 U.S.S.G. § 1B1.11 cmt. n.2. Reliance on defendant's uncharged
21 conduct in 2002 and 2003 was accordingly in error.
22 Application of the 2002 version of the Guidelines was both
23 retrospective and disadvantageous to the defendant. As a
24 consequence, we remand to the district court for resentencing
25 under the 2000 Guidelines.
26 IV Defendant's Objections to Sentence Enhancements
27 Appellant raises two final objections to his sentence,
28 neither of which have merit. First, Kilkenny maintains the
29 district court erred in imposing a two-level enhancement for his
30 supervision of a criminally responsible participant. Under
31 U.S.S.G. § 3B1.1(c), a two-level enhancement may be applied if
32 the "defendant was an organizer, leader, manager, or supervisor
33 in any criminal activity." We review the district court's
34 finding that Kilkenny acted as the supervisor of a criminally
17
1 responsible participant under the clearly erroneous standard.
2 See United States v. Brinkworth, 68 F.3d 633, 641 (2d Cir. 1995).
3 Defendant declares there was no evidence his bookkeeper,
4 Melanie Ramsey, was a criminally responsible participant. To the
5 contrary, the uncontested evidence is that Ramsey, under
6 Kilkenny's supervision and at his direction, prepared fraudulent
7 tax forms and other documents that were used in the bank fraud
8 scheme. Ramsey also assisted Kilkenny's bank fraud plan by
9 writing a letter to a bank misrepresenting herself as the
10 regional manager of a financial group and falsely stating that
11 Kilkenny earned a monthly average of $115,000 in commissions.
12 The deliberate deception entailed in drafting such a letter to a
13 financial institution supports the trial court's finding that
14 Ramsey was not an unwitting participant in Kilkenny's fraudulent
15 activities. See Brinkworth, 68 F.3d at 641-42 (finding that an
16 accountant who knowingly prepared fraudulent tax returns was a
17 criminally responsible participant). Thus, the finding that
18 appellant was the supervisor of a criminally responsible
19 participant is not clearly erroneous.
20 Kilkenny's final point is that the two-level enhancement he
21 received for having derived more than $1 million dollars from a
22 financial institution, U.S.S.G. § 2B1.1(b)(12)(A) (2002) (now
23 codified at U.S.S.G. § 2B1.1(b)(13)(A)), constituted
24 impermissible double-counting because the amount of loss had
25 already been taken into account in determining the offense level
26 under U.S.S.G. § 2B1.1(b)(1)(K). We have previously ruled that
18
1 the cumulation of the dollar amount enhancement and the financial
2 institution enhancement do not constitute impermissible double-
3 counting because the two enhancements serve different purposes.
4 See United States v. Lauersen, 348 F.3d 329, 343 (2d Cir. 2003),
5 vacated on other grounds by 543 U.S. 1097, 125 S. Ct. 1109, 160
6 L. Ed. 2d 988 (2005); see also United States v. Campbell, 967
7 F.2d 20, 25 (2d Cir. 1992) ("[D]ouble counting is legitimate
8 where a single act is relevant to two dimensions of the
9 Guidelines analysis."). Although we noted in Lauersen that there
10 is a substantial overlap between the two enhancements that might
11 justify a downward departure in some circumstances, Lauersen, 348
12 F.3d at 344, any such departure would be discretionary. The
13 district court was well within its discretion in finding that no
14 downward departure was warranted here.
15 CONCLUSION
16 Accordingly, for the reasons stated above, this case is
17 remanded to the district court for resentencing in accordance
18 with this opinion.
19