United States v. Felton

Opinions of the United
1995 Decisions States Court of Appeals
for the Third Circuit
5-22-1995
United States v Felton
Precedential or Non-Precedential:
Docket 94-5431
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UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________________
No. 94-5431
_____________________
UNITED STATES OF AMERICA
v.
DENNIS FELTON
Appellant
_____________________
On Appeal from the United States District Court
For the District of New Jersey
(D.C. Crim. Action No. 93-cr-209)
_____________________
Argued February 16, 1995
Before: STAPLETON and COWEN, Circuit Judges,
and HUYETT, District Judge*
(Opinion Filed May 22, 1995 )
Chester M. Keller (argued)
Assistant Federal Public Defender
972 Broad Street
Newark, New Jersey 07102
Attorney for Appellant
Faith S. Hochberg
United States Attorney
Jayne K. Blumberg
Alain Leibman (argued)
Assistant United States Attorney
970 Broad Street
Newark, New Jersey 07102
Attorney for Appellee
_____________________
*
Honorable Daniel H. Huyett, 3rd, United States District Judge
for the Eastern District of Pennsylvania, sitting by designation.
OPINION OF THE COURT
_____________________
HUYETT, District Judge:
Appellant Dennis Felton was a tax examining assistant
with the Automated Collection Service ("ACS") of the Internal
Revenue Service ("IRS"). He was responsible for, among other
things, contacting taxpayers with regard to collecting delinquent
income tax payments. Felton offered delinquent taxpayers the
opportunity to settle tax debts with the IRS for personal
payments to him. He was convicted of one count of demand and
acceptance of a bribe by a public official and five counts of
unlawful gratuity demanded and sought by a public official.
Felton appeals his sentence on three grounds. First,
Felton argues that the district court erred in adjusting his
offense level upward by two levels pursuant to United States
Sentencing Guideline section 3B1.1 for being a leader, organizer,
manager, or supervisor of a criminal activity. Second, he argues
that the district court erred in departing from the Sentencing
Guidelines to make a one-level upward adjustment. Third, he
argues that the district court made a mathematical error in its
computation of his offense level that caused it to find him
ineligible for a decrease in his offense level authorized by
section 3E1.1 of the Sentencing Guidelines. We agree with
Felton's third contention and vacate the district court's
judgment of sentence and remand for resentencing.
I. Factual and Procedural Background
In early September 1992, while working for the IRS,
Felton received a telephone call from a Colonia, New Jersey
taxpayer concerning approximately $22,000 she owed in taxes in
connection with her 1990 Form 1040. In response to her inquiry
as to whether she could be excused from penalties and interest on
the money she owed, Felton telephoned her and told her that if
she paid him, he would "take care of business." He arranged a
meeting at a mall in New Jersey, where he told her that in
exchange for a personal payment of $8,000, he would close the
collection action, abate all penalties and interest, and arrange
for the return of approximately $13,000 to her. Subsequently,
she contacted the IRS Office of the Regional Inspector concerning
this incident and participated in a controlled investigation. At
an October 6, 1992 meeting, the taxpayer paid Felton $2000 and
Felton told her that he wanted to receive the balance of the
bribe payment when she received the refund check. The ACS
received a return with falsified information, and in June 1993,
the taxpayer received a refund check for $24,805.44. Felton was
arrested on July 14, 1993 after he demanded and received the
remaining $6,000 payment.
On Felton's arrest, he advised the authorities that his
co-worker, Walter Clark, actually amended the return for the
taxpayer and that Clark was to share equally in the payments.
Felton needed Clark or some other person to participate in the
schemes because Felton is legally blind and cannot alter tax
returns alone. Following Felton's arrest, agents reviewed the
files Felton and Clark handled and investigated the five other
frauds for which Felton was convicted. With Felton's
cooperation, the authorities investigated Clark's involvement in
the schemes and prosecuted him for his involvement in one fraud.
In the five incidents for which Felton was convicted of
demanding a gratuity, Felton sought payments to prepare tax
returns or resolve tax penalties or other tax problems. In some
instances, he offered to reduce their individual tax liabilities
and generate refunds in exchange for payments to him. In other
instances, he solicited taxpayers by offering to amend their
income tax returns and cause refunds to issue in exchange for
payments to him. In several instances, he demanded and took
money from taxpayers without performing services. In two frauds,
involving taxpayers from Englewood, New Jersey and Mount Holly,
New Jersey, Felton contacted taxpayers after they called the IRS
to resolve their tax problems. The Mount Holly taxpayers later
referred Felton as a tax adviser to their friends and relatives,
which led to frauds against taxpayers in Burlington Township, New
Jersey, Williamstown, New Jersey, and Budd Lake, New Jersey. The
Mount Holly, Burlington Township, Williamstown, and Budd Lake
taxpayers claimed that they did not know Felton was an IRS agent.
On April 22, 1994, Felton entered a guilty plea to an
information charging him with one count of "demand and acceptance
of bribe by public official," in violation of 18 U.S.C. §
201(b)(2), and five counts of "unlawful gratuity demanded and
sought by public official," in violation of 18 U.S.C. §
201(c)(1)(B). A sentencing hearing was held on July 11, 1994.
In the judgment, subsequently filed on July 20, 1994, the
district court adopted the factual findings and Guideline
applications in the Presentence Investigation Report
("presentence report" or "PSR") except for three paragraphs.
App. 115 (Judgment, July 20, 1994). Thus, the record reviewed
includes the presentence report, the court's oral explanation of
its decision at the hearing, and the judgment order.
At the sentencing hearing, the district court
calculated a base offense level of ten, pursuant to section
2C1.1, "Offering, Giving, Soliciting, or Receiving a Bribe;
Extortion Under Color of Official Right." As recommended in the
presentence report, pursuant to subsection 3B1.1(c), the court
raised the offense level by two levels because Felton played an
aggravating role in the offense. The court also considered the
specific offense characteristics provisions of section 2C1.1(b).
First, the court adopted the probation office's calculation of a
$31,295.44 loss attributable to Felton and increased the offense
level by four levels because the aggregate harm exceeded $20,000,
pursuant to subsection 2C.1.1(b)(2). Second, the district court
rejected the probation officer's calculations and agreed with
Felton that although the Guidelines authorized a two-level
increase for multiple gratuities or multiple bribes, the
Guidelines did not authorize an increase when there was just one
bribe, but multiple gratuities. The court, however, used
Felton's argument to depart from the Guidelines to increase the
offense level by one level. Next, although the presentence
report recommended a three-level decrease for acceptance of
responsibility pursuant to section 3E1.1, the court granted only
a two-level decrease. The court believed that by not imposing
the two-level increase for multiple bribes, the offense level
prior to the operation of subsection 3E1.1(a) was 15, and not 16
or greater, which would have permitted another decrease in
offense level for timely providing information concerning
involvement in offense or timely notifying authorities of his
intention to enter a plea of guilty. Finally, the district court
granted a one-level downward departure, following the
government's section 5K1.1 motion.
In summary, the district court's modification of the
presentence report yielded an offense level of 14. The following
calculation reflects the order in which the offense level should
be calculated, pursuant to the application instructions of
section 1B1.1:
Base offense level, § 2C1.1(a) 10
Specific offense characteristics, § 2C1.1(b)
More than one gratuity or bribe 0
Aggregate harm more than $20,000 + 4
Aggravating role in the offense, § 3B1.1(c) + 2
Acceptance of responsibility, § 3E1.1(a) - 2
Additional adjustment for acceptance of
responsibility, § 3E1.1(b) 0
Upward Departure from § 2C1.1 + 1
Downward departure, § 5K1.1 - 1
Total Offense Level = 14
For an offense level of 14, the Guidelines prescribe a sentence
within the range of 15 to 21 months. USSG Ch. 5, Pt. A. The
district court sentenced Felton to 15 months on the bribery
charge and 15 months on each of the gratuities charges, each to
be served concurrently.
II. Discussion
We have appellate jurisdiction over this appeal from
the final decision of the district court pursuant to 28 U.S.C. §
1291. The district court had subject matter jurisdiction in this
criminal matter. See 18 U.S.C. § 3231. We review the district
court's factual findings in relation to sentencing issues for
clear error. United States v. Fields, 39 F.3d 439, 447 (3d Cir.
1994); United States v. Miele, 989 F.2d 659, 663 (3d Cir. 1993);
United States v. Belletiere, 971 F.2d 961, 964 (3d Cir. 1992). A
finding is clearly erroneous, if, after reviewing all of the
evidence, we are left with the firm conviction that a mistake has
been made. Belletiere, 971 F.2d at 969. Our review with respect
to the district court's application and interpretation of the
Sentencing Guidelines is plenary. Id. at 964; United States v.
Bogusz, 43 F.3d 82, 85 (3d Cir. 1994); United States v. Murillo,
933 F.2d 195, 197 (3d Cir. 1991). When the application of the
Guidelines presents a mixed question of law and fact, "our
standard and scope of review takes on greater scrutiny,
approaching de novo as the issue moves from one of strictly fact
to one of strictly law." Belletiere, 971 F.2d at 964 (quoting
Murillo, 933 F.2d at 198).
A. Adjustment for Aggravating Role
We first address Felton's argument that the district
court's two-level increase for Felton's aggravating role in the
offense was in err. The pertinent portion of section 3B1.1 of
the Guidelines provides:
Based on the defendant's role in the offense,
increase the offense level as follows: . . .
(c) If the defendant was an organizer,
leader, manager, or supervisor in any
criminal activity other than described in (a)
or (b), increase by 2 levels.
USSG § 3B1.1.1 Section 3B1.1 requires the district court to find
that "the defendant exercised control over at least one other
person." United States v. Katora, 981 F.2d 1398, 1402 (3d Cir.
1992). See also USSG § 3B1.1, comment. (n.2) ("the defendant
must have been the organizer, leader, manager, or supervisor of
one or more other participants").
Felton takes issue with the district court's
determination that he was a leader in criminal activity. This
determination is essentially factual, therefore, we reverse the
district court only if its conclusion was clearly erroneous.
Fields, 39 F.3d at 447; United States v. Phillips, 959 F.2d 1187,
1191 (3d Cir.), cert. denied, ___ U.S. ___, 113 S. Ct. 497, 121
L. Ed. 2d 434 (1992); United States v. Ortiz, 878 F.2d 125, 127
(3d Cir. 1989).
The presentence report mentions Clark in connection
with three of the six incidents for which Felton was convicted,
although Clark was only charged with and convicted of one fraud.
Neither Felton nor the government objected to the facts as
presented by the probation office with regard to these three
incidents. With regard to the bribery concerning the Colonia
taxpayer, Felton offered to arrange the return of taxes she
1
. Subsections (a) and (b) concern situations where the
defendant was a leader, organizer, manager, or supervisor of
criminal activity that involved five or more participants or was
otherwise extensive.
already paid to the IRS for a personal payment to him, Felton
requested that the check be payable to him, and Felton requested
documentation relating to her mortgage, sale of her home, and her
profit sharing plan. Felton also scheduled meetings with her and
agreed to adjust her current and past tax returns, Felton told
the taxpayer how to make payments, and Felton personally accepted
$6,000 in cash from the taxpayer. Clark, along with Felton and
other Tax Examining Assistants, extended her account suspension.
Clark also amended the taxpayer's income tax return, received
$1,000 for this service, and Felton promised him another $3,000
after payment of the balance owed by her.
With respect to the Englewood taxpayer, Felton's first
contact with the taxpayer was through the IRS toll free telephone
number. Felton later contacted her to assist her with her tax
problems, Felton requested money in exchange for purported
services, and Felton received payments from this taxpayer. Clark
only attended meetings at her residence with Felton.
With respect to the Mount Holly taxpayers, after the
taxpayers had made numerous telephone contacts with IRS
representatives, Felton contacted them. He told them that he
could prepare and submit their income tax returns using
information they provided, Felton denied that any illegality was
involved, and Felton was paid by the taxpayers. According to the
presentence report, Clark met one of the taxpayers with Felton,
amended the tax return, and got some portion of the payment
received by Felton.
The probation officer summarized their involvement and
offenses as follows:
26. Felton made all initial and subsequent
contacts with the victim's [sic] of this
offense. He made preliminary judgments as to
feasibility of amending their returns, and
made the arrangements to gather necessary
information from the victims to be used in
amending the returns. He solicited the
assistance of Walter Clark, who was
responsible for amending some or all of the
returns, in exchange for payment by Felton,
and presumably provided Clark with the
information necessary for amendment.
Pursuant to 3B1.1(c), Felton was the
organizer of the offense.
27. Clark's role was in assistance to
Felton, such as transporting Felton to
meetings with the victims, and taking notes
during the meetings. While Clark was
responsible for actually amending the returns
themselves, his assistance was solicited by
Felton, by whom Clark was paid. Pursuant to
3B1.2(b), Clark was a minor participant in
the offense.
PSR ¶¶ 26-27. Neither party specifically objected to these
paragraphs, although they both objected to the probation
officer's characterization of Felton as an organizer in other
parts of the presentence report. The court, however, considered
Felton the leader, stating:
There is no question that he should get the
two point enhancement under 3B1.1(c). Mr.
Felton's sentence should reflect his conduct
without reference to whatever sentence Clark
got and why. Under 3B1.1(c), Mr. Felton in
my judgment was clearly the organizer,
leader, manager of this criminal activity.
He recruited Clark and, I suggest, others.
App. at 85 (Transcript).
"When a person manages or supervises another in the
course of a criminal enterprise, the manager or supervisor will
normally be more culpable than the person managed or supervised."
United States v. Fuentes, 954 F.2d 151, 153 (3d Cir. 1992). "The
direction and control of others is a recurrent theme in legal
definitions of the terms 'manager' and 'supervisor.'" United
States v. King, 21 F.3d 1302, 1305 (3d Cir. 1994). The record
supporting the district court's conclusion that Felton was the
organizer, leader, manager, or supervisor is not extensive,
especially considering that at the sentencing, neither the
prosecution nor the defense thought the increase was appropriate.
However, several uncontested facts in the presentence report do
tend to support the district court's conclusion that Felton
played a supervisory role over Clark. First, Felton made all
initial contacts with the victims of the fraud. Second, Clark
performed much of the menial work of the scheme: he drove Felton
to meetings with the victims, he took notes during those
meetings, and he was given the responsibility of amending the
victims' tax returns. While Felton's blindness -- and inability
to perform these tasks -- no doubt diminishes the import of those
tasks to determining Clark's role, we think that they do evidence
the fact that Felton had at least some authority over Clark to
have Clark do his bidding. Finally, the fact that Felton was
involved in more incidents than Clark supports the district
court's conclusion that it was Felton's scheme to begin with and
that Felton "recruited Clark" to work for him. The evidence
concerning their individual roles in the offense was sufficient
record evidence for the district court to conclude that Felton
was an organizer, leader, manager, or supervisor, even though
Clark did not participate in every scheme. The district court's
finding was not clearly erroneous.
B. Departure from the Guidelines
We next consider Felton's argument that the district
court erred in departing from the Sentencing Guidelines to adjust
his offense level upward by one level. Generally, the district
court must sentence a defendant within the applicable guideline
range. However, when "the court finds that there exists an
aggravating or mitigating circumstance of a kind, or to a degree,
not adequately taken into consideration by the Sentencing
Commission in formulating the guidelines that should result in a
sentence different from that described" the court may depart from
the guideline range. 18 U.S.C. § 3553(b). See also United
States v. Bertoli, 40 F.3d 1384, 1408 (3d Cir. 1994); United
States v. Kikumura, 918 F.2d 1084, 1098 (3d Cir. 1990).
We review the district court's decision according to
the model set forth in United States v. Kikumura, 918 F.2d 1084.
First, we determine whether the circumstances upon which the
district court relied to justify the departure were adequately
considered by the Sentencing Commission. This requires a two-
fold inquiry: we exercise plenary review over the district
court's determination that the Guidelines do not adequately take
a particular factor into consideration, Kikumura, 918 F.2d at
1098, and we apply a clearly erroneous standard of review to
determine whether the facts support the sentencing court's
rationale. United States v. Seale, 20 F.3d 1279, 1287 (3d Cir.
1994); Kikumura, 918 F.2d at 1098. Second, we must determine
whether the sentence imposed was reasonable. This also demands a
two-fold inquiry: we consider whether the factors on which the
court relied were appropriate and whether the degree of departure
was appropriate. United States v. Ryan, 866 F.2d 604, 610 (3d
Cir. 1989). In this determination, we permit the district courts
to exercise a substantial amount of discretion. Bertoli, 40 F.3d
at 1408; Kikumura, 918 F.2d at 1098. We address each issue in
turn.
1. Adequate Consideration by the Sentencing Commission
We must first determine whether the Sentencing
Commission took adequate consideration of the aggravating
circumstance upon which the district court relied. In this case,
the factual basis for departure was not disputed. The district
court found that Felton accepted one bribe and five gratuities.
The district court reasoned that the magnitude of Felton's
schemes was an aggravating factor that the Sentencing Commission
did not adequately consider.
The district court is permitted to examine only the
Sentencing Guidelines, the policy statements, and the official
commentary of the Guidelines to determine whether the Sentencing
Commission adequately considered this aggravating factor. 18
U.S.C. § 3553(b); Kikumura, 918 F.2d at 1104.2
2
. To minimize confusion in the arguments Felton advances, we
briefly explain the Guideline sections applied. The Sentencing
Guidelines require the district court to group together all
counts involving substantially the same harm. USSG § 3D1.2. The
Section 2C1.1 requires a two-level increase in offense
level, "[i]f the offense involved more than one bribe or
extortion." USSG § 2C1.1(b)(1). Section 2C1.2, which would have
applied had their been no bribes, requires a two-level increase
"[i]f the offense involved more than one gratuity." USSG §
2C1.2(b)(1). The Guidelines, the policy statements, and the
official commentary of the Sentencing Commission do not mention
that an increase is available to raise the offense level for one
bribe and multiple gratuities. See § 2C1.1(b)(1).
The court's analysis of this issue was not extensive.
While making objections to the presentence report, Felton's
counsel argued that the Guidelines do not permit the court to
aggregate one bribe with multiple gratuities to increase the
offense level by two levels because then the gratuities would be
treated as bribes. The court appeared to accept this argument
and used this argument to justify its departure from the
Guidelines. An exchange concerning this issue was as follows:
MR. KELLER: I'm saying that it's totally
improper to start aggregating one bribe with
certain gratuities and lump all these
gratuities, all of a sudden to become bribes.
. . .
THE COURT: Well, suppose I don't give him
those two points. Look, at the rate you're
going I'm going to have to give him a
present.
(..continued)
counts of bribery and gratuities must be grouped together. §
3D1.2(d). Because these counts involve offenses of the same
general type, the court must apply the offense guideline that
produces the highest offense level. § 3D1.3(b). Because the
bribery provision, § 2C1.1, produces a higher offense level than
the gratuity provision, § 2C1.2, the bribery guideline is used.
You know, I'm not going to buy this
argument, though I'll tell you I am not going
to not count five counts on which he accepted
an illegal gratuity. So even if you're right
on the law here, it would certainly be an
appropriate ground for an upward departure.
Right? You couldn't disagree with that.
MR. KELLER: Well --
THE COURT: Because this is conduct which
would not otherwise be counted. So I mean I
don't know, which way do you want me to go on
that?
App. at 78-79 (Transcript). After a recess, the court explained
its departure from the Guidelines as follows:
I am going to grant Mr. Keller's objection to
the -- what is it, 2C1.1 bribery or extortion
language. This is very complicated. I think
I could make an argument that because one is
referred under the gratuity statute to 2C1.1,
and that language of bribery or extortion,
that perhaps Mr. Keller's argument should be
rejected. But I'm not clear enough on it to
say. It is just too murky. So I'm going to
take off those two points.
That does not quite end the issue
though. Because by taking off those two
points, Mr. Felton is no longer eligible for
the additional point on acceptance of
responsibility. Because he's down into a --
what's it, a 15 instead of a 16. So all of
that having been said, that's not to say Mr.
Keller, because I told you I would, I'm going
to give you the two points on that particular
objection. But I will upward depart and I
will upward depart one level to compensate
for the one level that is being lost on the
acceptance of responsibility, third point.
App. at 85-86 (emphasis added) (Transcript).
In the judgment order, the court explained its basis
for the upward departure as follows:
Because one bribery and five gratuities were
not aggregated to receive the 2 level
increase under 2C1.1, the gratuities would
not be punished absent an upward departure, a
circumstance not adequately taken into
consideration by the Commission.
App. at 114 (Judgment).
We reject Felton's argument that the multiple count
provisions, found in Chapter Three, Part D of the Sentencing
Guidelines, make clear that the Sentencing Commission considered
the impact of multiple count convictions on the sentencing
process and believed that certain offenses were so closely
intertwined that they should not receive any increase under the
Guidelines. As explained by the Sentencing Commission in its
introductory commentary to the multiple count provisions:
Some offense guidelines, such as those for
theft, fraud and drug offenses, contain
provisions that deal with repetitive or
ongoing behavior. Other guidelines, such as
those for assault and robbery, are oriented
more toward single episodes of criminal
behavior. Accordingly, different rules are
required for dealing with multiple-count
convictions involving these two different
general classes of offenses.
USSG Ch. 3, Pt. D, intro. comment. The Sentencing Commission
explicitly authorized a two-level increase in offense level for
multiple bribes in section 2C1.1 and a similar increase for
multiple unlawful gratuities in section 2C1.2. Thus, despite the
multiple count provisions, the Sentencing Commission approved an
increase in offense level for multiple bribes or gratuities, as
compared to single instances of a bribe or a gratuity.
The Sentencing Commission authorized an increase in
offense level for six bribes or six gratuities, but not for a
combination of one bribe and five gratuities. The Sentencing
Guidelines, the commentary, and the background notes do not
indicate that the Sentencing Commission believed that this type
of repeated unlawful conduct involving a bribe and gratuities
should be treated less harshly than repeated unlawful conduct
involving only bribes or only gratuities. Thus, it appears that
the Sentencing Commission did not consider this result.
2. Reasonableness of the Adjustment
We also must consider whether the district court's
upward adjustment was reasonable. Kikumura, 918 F.2d at 1110.
Review is deferential. Id. at 1098. To determine whether the
sentence was reasonable, we consider the factors set forth in 18
U.S.C. § 3553(a) and the reasons for the imposition of the
particular sentence as stated by the district court, pursuant to
section 3553(c). 18 U.S.C. § 3742 (Review of a sentence);
Kikumura, 918 F.2d at 1098. We consider "whether the factors
relied on are appropriate; and whether the degree of departure
was appropriate." Kikumura, 918 F.2d at 1098 (internal
quotations omitted). "In order to be 'appropriate,' a factor
occasioning or contributing to an upward departure must be
relevant to the defendant's culpability." United States v.
Schweitzer, 5 F.3d 44, 48 (3d Cir. 1993).
The factors upon which the court relied were
appropriate. The fact that Felton accepted multiple gratuities
is relevant to his culpability because the Sentencing Guidelines
already meted increased punishment for public officials who
accepted multiple bribes or multiple gratuities. To sentence
pursuant to the Guidelines would have been equivalent to
sentencing Felton for one bribe greater than $20,000 without
reflecting the multitude of gratuities demanded or accepted.
Furthermore, the degree of departure was appropriate. The
increase in the offense level was no greater than the increase
that would have been required for acceptance of two gratuities,
had there been no bribery charges. Thus, we find no error in the
court's upward departure.
C. Reduction for Acceptance of Responsibility
Finally, we consider Felton's argument that the
district court erred in its computation of his offense level,
which caused the district court to find him ineligible for a
third decrease in his offense level which was authorized by
section 3E1.1 of the Sentencing Guidelines. The district court
decreased Felton's offense level by two levels, pursuant to
subsection 3E1.1(a). Felton argues that he should have received
an additional one-level decrease pursuant to subsection 3E1.1(b).
Section 3E1.1 provides as follows:
(a) If the defendant clearly demonstrates
acceptance of responsibility for his offense,
decrease the offense level by 2 levels.
(b) If the defendant qualifies for a decrease
under subsection (a), the offense level
determined prior to the operation of
subsection (a) is level 16 or greater, and
the defendant has assisted authorities in the
investigation or prosecution of his own
misconduct by taking one or more of the
following steps:
(1) timely providing complete
information to the government concerning
his own involvement in the offense; or
(2) timely notifying authorities of his
intention to enter a plea of guilty,
thereby permitting the government to
avoid preparing for trial and permitting
the court to allocate its resources
efficiently,
decrease the offense level by 1 additional level.
USSG § 3E1.1. The district court is particularly well suited to
evaluate a defendant's acceptance of responsibility. Therefore,
its determination can only be reversed if we find it was clearly
erroneous. United States v. Pardo, 25 F.3d 1187, 1193 (3d Cir.
1994).
Felton argues that the district court failed to grant
him a reduction of one level pursuant to subsection 3E1.1(b)
because it thought that he had an offense level of only 15
instead of 16. The transcript of the sentencing hearing and the
ensuing judgment support this argument. Prior to the operation
of subsection 1B1.1(a), Felton's offense level was sixteen, based
on a base offense level of ten, a four-level increase for loss
greater than $20,000, and a two-level increase for Felton's role
as organizer. The court, however, said with respect to this
issue:
[B]y taking off those two points, Mr. Felton
is no longer eligible for the additional
point on acceptance of responsibility.
Because he's down into a -- what's it, a 15
instead of a 16. So all of that having been
said, that's not to say Mr. Keller, because I
told you I would, I'm going to give you the
two points on that particular objection.
App. at 107 (Transcript). The court repeated this reasoning in
the judgment as follows:
2C1.1 states that if the offense involved
more than one "bribe or extortion" increase
by 2 levels. The offense here involved one
bribe and five gratuities. Because it is
unclear whether this aggregate behavior can
receive the 2 level increase, the two level
increase was deleted. As a result, the
additional adjustment for acceptance of
responsibility in paragraph 46 was deleted as
well.
App. at 115 (Judgment). The court's explanation was clear
error.3 The government argues that Felton was not granted the
additional one-level reduction because the district court could
have made independent findings of fact that Felton failed to
assist authorities. The district court, however, never made any
such findings. The only evidence of Felton's failure to assist
that the government can find is an offhand remark by the
government's counsel that Felton embellished certain facts
surrounding the offense in the course of aiding the authorities.
3
. The government maintains that Felton never objected to the
district court's refusal to give a three-level reduction and
accordingly waived his right to appeal unless the mistake was
plain error. United States v. Pollen, 978 F.2d 78, 88 (3d Cir.
1992) (sentencing disputes reviewed for plain error where
defendant fails to object in the district court but finding that
the miscalculation in that case was plain error), cert. denied,
___ U.S. ___, 113 S. Ct. 2332, 124 L. Ed. 2d 244 (1993). Under a
plain error standard, the court is concerned only with errors
that seriously affect substantial rights or compromise the
fairness of the proceedings. Id. This circuit and others have
found that the miscalculation of a defendant's offense level
"certainly is error that seriously affect[s] [the defendant's]
rights, and so amounts to plain error." Id. at 90; United States
v. Moss, 9 F.3d 543, 553 (6th Cir. 1993) (application of clearly
incorrect base level offense deemed clear error); United States
v. Plaza-Garza, 914 F.2d 345, 348 (1st Cir. 1990).
The district court never referred to this comment, nor did it
explicitly find that Felton failed to assist. The district
court's reason for denying the third offense level decrease for
acceptance of responsibility was clear error. We remand the case
for resentencing on this issue.
III. Conclusion
In summary, we hold that the district court's reason
for denying an additional decrease for acceptance of
responsibility was clear error. The court did not err, however,
in finding that Felton was a leader, organizer, manager, or
supervisor, nor did the court err in departing upward one level
in sentencing Felton. Accordingly, we will vacate the district
court's judgment and order of sentence and remand with
instructions for the district court to resentence Felton in
accord with this opinion.