United States v. Munoz

United States Court of Appeals
Fifth Circuit
F I L E D
REVISED APRIL 29, 2005
IN THE UNITED STATES COURT OF APPEALS April 29, 2005
FOR THE FIFTH CIRCUIT
_____________________ Charles R. Fulbruge III
Clerk
No. 04-40481
_____________________
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
versus
RUFINO SERNA MUNOZ,
Defendant - Appellant.
_________________________________________________________________
Appeal from the United States District Court
for the Southern District of Texas, Corpus Christi Division
District Court Cause No. 03-CR-289(1)
_________________________________________________________________
Before REAVLEY, JOLLY and PRADO, Circuit Judges.
EDWARD C. PRADO, Circuit Judge:
Appellant Rufino Serna Munoz challenges his sentence in this
appeal. After considering his arguments, the court vacates
Munoz’s sentence and remands this case for resentencing.
Background of the Case
Munoz was a party to a Ponzi scheme that defrauded numerous
individuals by convincing them to turn over funds under the false
pretense that they would be invested in legitimate enterprises.1
Early investors received “profits” from funds contributed by
1
A Ponzi scheme involves payment of early investors with
funds taken from later investors. See United States v. Cook, 573
F.2d 281, 282 n.3 (5th Cir. 1978).
1
later investors, and the scheme eventually collapsed. Munoz and
his codefendants were indicted for 33 counts of various instances
of conspiracy, wire fraud, mail fraud, and money laundering.
Pursuant to a written plea agreement, Munoz pleaded guilty
to conspiracy to commit wire fraud and mail fraud in violation of
18 U.S.C. § 371 and to conspiracy to commit money laundering in
violation of 18 U.S.C. § 1956 (a)(1)(A)(I) and (h), as charged in
counts one and fourteen of the indictment. In return for Munoz’s
guilty plea, the Government agreed to recommend that Munoz
receive maximum credit for acceptance of responsibility and a
sentence at the lowest end of the guideline range; dismiss all
remaining counts against him in the indictment; and, if Munoz
provided substantial assistance, move for a downward departure.
The Government agreed that the applicable sentencing guidelines
for the fraud offense should be calculated using a base offense
level of 6,2 increased by 14 levels because the loss in his case
was less than $1,000,000, but more than $400,000;3 increased by 2
levels because the scheme defrauded more than ten, but fewer than
50 victims;4 increased by two levels because execution of the
offense involved sophisticated means;5 increased by two levels
2
See U.S. SENTENCING GUIDELINES MANUAL § 2B1.1(a) (2003).
3
See id. § 2B1.1(b)(1)(H).
4
See id. § 2B1.1(b)(2)(A).
5
See id. § 2B1.1(b)(8)(C).
2
because Munoz was a leader and organizer of the criminal
conduct;6 and decreased by three levels for acceptance of
responsibility.7 The Government also agreed that Munoz’s base
offense level for the money laundering offense should be
calculated using a base offense level of 24,8 increased by 2
levels because Munoz was convicted under 18 U.S.C. § 1956,9
increased by two levels because Munoz was a leader and organizer
of the criminal conduct;10 and decreased by three levels for
acceptance of responsibility.11 Taking the higher of the two
offense levels, the Government further agreed that the resulting
total offense level of 25, combined with a criminal history
category of I, yielded a guidelines sentencing range of 57-71
months of imprisonment.
The presentence report (PSR) calculated Munoz’s sentence
differently. The PSR grouped the offenses12 and assigned Munoz a
6
See id. § 3B1.1(c).
7
See id. § 3E1.1(a), (b).
8
See id. § 2S1.1(a)(1).
9
See id. § 2S1.1(b)(2)(B).
10
See id. § 3B1.1(c).
11
See id. § 3E1.1(a), (b).
12
The sentencing guidelines instruct the sentencing court to
“group” offenses “[w]hen one of the counts embodies conduct that
is treated as a specific offense characteristic in, or other
adjustment to, the guideline applicable to another of the
counts.” Id. § 3D1.2(c). The guidelines further provide that
the offense level for the grouped offenses is “the offense level
3
base offense level of 6 for the fraud offense as the offense with
the highest offense level.13 The PSR recommended that the base
offense level be increased by 16 levels because the loss in the
case was more than $1,000,000, but less than $2,500,000;14
increased by four levels because the scheme defrauded more than
50;15 increased by two levels because execution of the offense
involved sophisticated means;16 increased by two levels because
Munoz was a leader and organizer of the criminal conduct;17 and
increased by two levels because the offense was facilitated
through abuse of a position of trust;18 and reduced by three
levels for acceptance of responsibility.19 Munoz’s total offense
level of 29, combined with his criminal history category I,
yielded a sentencing guidelines range of 87-108 months of
imprisonment.
Munoz filed a written objection to the PSR in which he
. . . for the most serious of the counts comprising the [g]roup,
i.e., the highest offense level of the counts in the [g]roup.”
Id. § 3D1.3(a). In Munoz’s case, count I——conspiracy to commit
wire fraud and mail fraud——carried the highest offense level.
13
See id. § 2B1.1(a).
14
See id. § 2B1.1(b)(1)(I).
15
See id. § 2B1.1(b)(2)(B).
16
See id. § 2B1.1(b)(8)(C).
17
See id. § 3B1.1(c).
18
See id. § 3B1.3.
19
See id. § 3E1.1(a), (b).
4
challenged the enhancement of his sentence for an abuse of trust
and asked the district court to follow the calculation set forth
in the plea agreement. The probation officer did not revise his
recommendations.
At sentencing, Munoz renewed his objection to the PSR’s
recommendation of an abuse-of-trust enhancement and asked the
district court to follow the sentencing guidelines calculation in
the plea agreement. Munoz’s attorney explained that the two-
point adjustment for an abuse of trust was not included in the
plea agreement. The Assistant United States Attorney (AUSA)
acknowledged that the enhancement was not part of the agreement,
but stated that he was free to take a position on the
enhancement. The district court then questioned several victim
witnesses about whether they trusted Munoz. During its
questioning, the court periodically asked the AUSA to clarify
certain facts relevant to the enhancement.
After hearing the testimony, the district court asked the
AUSA if he urged the application of the abuse-of-trust
enhancement. The AUSA answered in the affirmative. The court
admonished Munoz in accordance with the PSR’s guideline
calculations and asked the AUSA if there was a motion for a
downward departure. The AUSA moved for a departure based on
substantial assistance, and the district court granted the
motion. The court then sentenced Munoz to 90 months of
imprisonment for the money laundering conviction and 60 months of
5
imprisonment for the wire fraud conviction, to run concurrently.
The court dismissed the remaining counts against Munoz upon
motion by the Government. Munoz timely filed a notice of appeal.
Whether the Government Breached the Plea Agreement
Munoz argues that the Government breached the plea agreement
by arguing at the sentencing hearing that his conduct constituted
an abuse of trust. Munoz explains that the Government stipulated
in the plea agreement to a guidelines calculation that did not
include an enhancement for an abuse of trust. Munoz complains
that despite the agreement, the Government breached its promise
to recommend and support the stipulated-to guidelines range by
affirmatively advocating for an enhancement that was not included
in the plea agreement. Munoz contends that he is entitled to
specific performance of the agreement, and thus, he asks this
court to vacate his sentence and remand his case for resentencing
before a different judge.
Whether the Government has breached a plea agreement is a
question of law that the court reviews de novo.20 Because Munoz
did not object on this basis at sentencing, the court reviews the
argument for plain error.21 The Government’s failure to fulfill
its promise affects the fairness, integrity, and public
20
United States v. Brown, 328 F.3d 787, 790 (5th Cir. 2003);
United States v. Reeves, 255 F.3d 208, 210 (5th Cir. 2001).
21
Brown, 328 F.3d at 790; Reeves, 255 F.3d at 210.
6
reputation of judicial proceedings, and thus, a breach of the
plea agreement can constitute plain error without regard to the
whether the sentencing judge was influenced by the Government's
actions.22
If a defendant pleads guilty as part of a plea agreement,
the Government must strictly adhere to the terms and conditions
of its promises in the agreement.23 “[W]hen a plea rests in any
significant degree on a promise or agreement of the prosecutor,
so that it can be said to be part of the inducement or
consideration, such promise must be fulfilled.”24 In determining
whether the Government violated a plea agreement, this court
considers whether the Government's conduct was “consistent with
the defendant's reasonable understanding of the agreement.”25 If
22
See United States v. Goldfaden, 959 F.2d 1324, 1328 (5th
Cir. 1992) (concluding that breach of a plea agreement can
constitute plain error); United States v. Saling, 205 F.3d 764,
766-67 (5th Cir. 2000) (“If a breach has in fact occurred, the
sentence must be vacated without regard to whether the judge was
influenced by the government's actions.”); see United States v.
Olano, 507 U.S. 725, 734, (1993) (explaining that the appellate
court should correct a plain error if it seriously affects the
fairness, integrity or public reputation of judicial
proceedings); see also United States v. Reeves, 255 F.3d 208, 210
(5th Cir. 2001) (recognizing that the Government's breach may
constitute plain error).
23
United States v. Valencia, 985 F.2d 758, 761 (5th Cir.
1993).
24
Santobello v. New York, 404 U.S. 257, 262 (1971).
25
Brown, 328 F.3d at 790; United States v. Wittie, 25 F.3d
250, 262 (5th Cir. 1994).
7
the Government breaches a plea agreement, the defendant is
entitled to specific performance of the agreement with sentencing
by a different judge.26
Here, the record indicates that the Government breached the
plea agreement. The agreement states that the Government and
Munoz “agree that the applicable sentencing guidelines should be
calculated as follows.” The agreement then sets out a specific
guideline calculation, which does not include an enhancement for
an abuse of trust. By not including an enhancement for an abuse
of trust, the parties agreed that it was not an applicable
guideline and that it should not be included in the guideline
calculation.
Despite the agreement, the Government, through the AUSA,
urged application of the abuse-of-trust enhancement. When
district court asked him, “What’s your position,” the AUSA
answered, “I believe that there was a private trust that was
violated.” The AUSA explained that “I . . . did not mention this
aspect in the Plea Agreement, but that didn’t mean I was not free
to argue my position about it.” When the court asked if he urged
the application of the enhancement, the AUSA answered, “Yes, your
Honor.” These responses are inconsistent with the plea
26
Valencia, 985 F.2d at 761; see Santobello, 404 U.S. at 263
(allowing the state court to decide if specific performance and
sentencing by a different judge, or withdrawal of the defendant’s
guilty plea, was proper remedy where government breached the plea
agreement).
8
agreement. Even though the Government reserved the right to
“dispute sentencing factors or facts material to sentencing,” the
Government implicitly promised not to argue for an enhancement
that was not part of the plea agreement. Urging an enhancement
that was not part of the agreement constituted a breach.27
Although the Government has a duty to provide the sentencing
court with relevant factual information and to correct
misstatements,28 it may not hide behind this duty to advocate a
position that contradicts its promises in a plea agreement.29
Here, the Government suggests that it was duty-bound to urge the
abuse-of-trust enhancement because Munoz’s attorney incorrectly
27
United States v. Rivera, 357 F.3d 290, 295 (3d Cir. 2004)
(“Because the Offense Level was specifically stipulated to,
whereas the government's right to advocate a role enhancement was
not, the government's endorsement of an enhancement that would
raise the Offense Level above the stipulated level contravened
the plea agreement.”); United States v. Taylor, 77 F.3d 368, 371
(11th Cir. 1996) (explaining that the Government breached the
plea agreement by advocating a position contrary to its
agreed-upon recommendation and supporting a position inconsistent
with the agreement).
28
See United States v. Block, 660 F.2d 1086, 1091 (5th Cir.
Unit B. Nov. 1981) (explaining that the prosecutor must speak up
where the sentencing court lacks certain relevant information or
where the court is mistaken about the facts, and thus the
prosecutor did not breach the plea agreement in which he agreed
to take no position in the defendant’s sentence).
29
Colvin v. Taylor, 324 F.3d 583, 586 (8th Cir. 2003) (“As
an officer of the court, the prosecutor had the duty to convey to
the court facts about the case and the defendant as long as the
specific terms of the plea agreement were not violated.” (relying
on this court’s reasoning in United States v. Block, 660 F.2d
1086, 1091 (5th Cir. Unit B. Nov. 1981))).
9
stated that the AUSA did not agree with the PSR’s recommendation
for a two-point increase. Munoz’s attorney, however, made no
misstatement. Instead, the attorney stated, “I have noted in the
Plea Agreement, the Government was not recommending the two-point
adjustment. The Government, through [the AUSA], was not
recommending the two-point adjustment for purposes of the
calculation of Mr. Munoz’s guidelines.” Those statements are
correct, and thus Munoz’s attorney conveyed accurate facts to the
court. Had the AUSA simply provided the court with accurate
relevant facts, the Government would not have breached the
agreement;30 but the Government crossed the line to breach by
affirmatively advocating the application of the enhancement.
Although, in closing, the AUSA asked the court to follow the plea
agreement,31 that request, considered in light of the AUSA’s
position on the enhancement, amounted to little more than lip
service to the plea agreement and did not rectify the breach.
The United States Court of Appeals for the Third Circuit
reached the same conclusion in United States v. Rivera.32 In
30
See Block, 660 F.2d at 1092-92.
31
The AUSA stated that he wanted to “clear for the record
[his] position on the . . . guideline application due to our Plea
Agreement in the case.” The AUSA stated further that “the total
numbers that I did give to the Probation Department are correct
the way they have it calculated, but I’m asking the Court, based
on our Plea Agreement, to follow the recommendation [in the plea
agreement] that would place Mr. Munoz at a level 25 instead of a
29.”
32
357 F.3d 290 (3d Cir. 2004).
10
that case, defendant Rivera and the Government agreed to a total
offense level of 35.33 The PSR, however, recommended a four-
point enhancement based on a leadership role.34 Although the PSR
acknowledged that the adjustment was contrary to the plea
agreement, it recommended an offense level of 39.35 In response
the Rivera’s objection, the Government maintained that it was not
precluded from arguing for the enhancement, and the AUSA stated
at sentencing that it stood by the probation officer’s
conclusions.36 On appeal, the Government argued that it was free
to advocate for the enhancement because it had reserved “its
right to take any position with respect to the appropriate
sentence.” The court of appeals rejected this argument because
endorsing the PSR’s recommendation for an offense level of 39
after agreeing to an offense level of 35 was inconsistent with
the plea agreement.37 Likewise, this court rejects the
Government’s position that it was free to urge the abuse-of-trust
enhancement because the plea agreement was silent about the
enhancement. Advocating an enhancement that was not in the plea
agreement and that increased the sentencing range was
33
Rivera, 357 F.3d at 292.
34
Id.
35
Id.
36
Id. at 292-93.
37
Id. at 295.
11
inconsistent with the agreement.
The United States Court of Appeals for the Eleventh Circuit
reached a similar conclusion in United States v. Taylor.38 In
Taylor, the defendant agreed to plead guilty to possession of
marijuana in exchange for the Government’s promise to recommend a
sentence of ten years, with the qualification that the Government
would recommend a lesser sentence if Taylor cooperated with the
Government.39 The PSR, however, considered Taylor’s attempt to
import cocaine as relevant conduct under the sentencing
guidelines and recommended a sentencing range of 188-235
months.40 Taylor objected to the inclusion of the cocaine-
related activities as relevant conduct.41 In its response to the
objection, the Government stated that it was prepared at
sentencing to prove by a preponderance of the evidence that
Taylor conspired to import cocaine.42 At sentencing, the
Government’s attorney recommended a sentence of ten years, but
the sentencing judge adopted the PSR’s position on relevant
conduct, applied a two-point reduction for acceptance of
responsibility, and sentenced Taylor to 151 months of
38
77 F.3d 368 (11th Cir. 1996).
39
Taylor, 77 F.3d at 369.
40
Id.
41
Id.
42
Id.
12
imprisonment.43 On appeal, the court of appeals determined that
the Government breached the plea agreement by advocating the
PSR’s position on related conduct.44 The court explained that
the defendant reasonably understood the Government’s promise to
recommend a ten-year sentence as including a promise not to
advocate a position that would require a longer sentence.45 The
court characterized the Government’s request that the court
follow the plea agreement as lip service that did not cure the
breach.46 Like defendant Taylor, Munoz reasonably understood the
Government’s agreement to a specific guidelines calculation as
including a promise not to advocate an enhancement that was not
included in the agreement. Paying lip service to the agreed-to
calculation did not cure the breach.
Conclusion
The Government breached the plea agreement, and thus, the
court need not reach Munoz’s other arguments. Munoz is entitled
to be sentenced by a different judge as the Government abides by
its agreement.47 Consequently, the court VACATES Munoz’s
sentence and REMANDS to the district court for reassignment to a
43
Id.
44
Id. at 370-71.
45
Id. at 370.
46
Id. at 371.
47
See Valencia, 985 F.2d at 761.
13
different judge and resentencing.
SENTENCE VACATED and REMANDED FOR RESENTENCING.
14