United States v. Davis

NOT RECOMMENDED FOR PUBLICATION
File Name: 05a0054n.06
Filed: January 21, 2005
No. 03-4114
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
ON APPEAL FROM THE UNITED
v. STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF OHIO
WILLIAM J. DAVIS,
Defendant-Appellant.
________________________________/
BEFORE: KEITH, CLAY and COOK, Circuit Judges.
CLAY, Circuit Judge. Defendant William J. Davis appeals his conviction and sentence for
bank fraud in violation of 18 U.S.C. § 1344, entered by the United States District Court for the
Southern District of Ohio on August 29, 2003. For the reasons set forth below, we AFFIRM
Defendant’s conviction; however, in light of the Supreme Court’s recent opinion in United States
v. Booker, 543 U.S. ____ (2005), we VACATE Defendant’s sentence and REMAND the case for
resentencing in a manner consistent with this opinion.
I. BACKGROUND
Procedural History
On August 16, 1993, Defendant received a target letter from the United States Attorney for
the Southern District of Ohio, advising him that the United States intended to initiate criminal
proceedings against him for violations of 18 U.S.C. §§ 1014 and 1344. Nothing further occurred,
however, until December 15, 1999, when Defendant was indicted. The indictment included five
separate counts: Count 1 alleged a conspiracy between Defendant, his wife Marilyn K. Davis, and
No. 03-4114
other unindicted coconspirators, to defraud the First National Bank of Dayton (“First National”), a
federal insured financial institution, in violation of 18 U.S.C. § 371; Counts 2 and 3 alleged that
Defendant made materially false statements in connection with federally insured loans, in violation
of 18 U.S.C. § 1014; and Counts 4 and 5 charged Defendant with bank fraud in violation of 18
U.S.C. § 1344. Defendant was arraigned on January 14, 2000, and pleaded not guilty.
Defendant and his wife were tried jointly; their trial commenced on May 15, 2002. At the
close of the government’s case, Defendant moved for a judgment of acquittal under Federal Rule
of Criminal Procedure 29, and the court dismissed Counts 1 and 3 of the indictment. The court also
dismissed the government’s case against Mrs. Davis. On May 23, 2002, the jury returned its verdict,
acquitting Defendant on Count 2 but convicting him on Counts 4 and 5.
Defendant’s sentencing hearing was held on August 13, 2003, at which time the court
sentenced Defendant to 33 months imprisonment, followed by five years supervised release. The
district court entered its final judgment on August 29, 2003.
Defendant timely filed a Notice of Appeal with this Court on August 29, 2003.
Substantive Facts
From 1978 until May, 1992, Defendant was the president and part-owner of Fries
Correctional Equipment of Kentucky, Inc. (“Fries of Kentucky”) and Fries Correctional Equipment
of Ohio, Inc. (“Fries of Ohio”). Along with his wife and two daughters, Defendant was also partner
in the D&A Company (“D&A”), an Ohio partnership. Fries was in the business of manufacturing
and installing jail and prison equipment.
2
No. 03-4114
In November, 1989, a mutual acquaintance introduced Defendant to Neal Ratliff, then a
commercial loan officer and vice-president at First National Bank.1 Defendant was seeking
financing for Fries of Kentucky, and was unhappy with his current bank. On June 1, 1990, First
National approved a line of credit in the amount of $1.6 million for Fries of Kentucky. That same
day, the bank also approved a loan to D&A for $1 million, and a $50,000 personal line of credit for
Defendant. Regular payments were made on the D&A loan, and on September 30, 1991, First
National renewed Fries of Kentucky’s and Defendant’s personal lines of credit.
The First National loans were only partially secured by Fries’ accounts, inventory and
equipment. Thus, in order to secure the original loans in 1990 and to renew them in 1991, First
National required personal guarantees from Defendant and his wife. Defendant submitted personal
financial statements to First National in 1990 and 1991.2 The 1990 statement listed personal assets
including property, livestock, stored crops, a gold and silver coin collection, and shares of stock
other than Fries stock. The 1991 statement, submitted to First National on July 29, 1991, listed
similar assets, including 140 shares of Pitney Bowes and Polaroid stock. The 1991 statement listed
liabilities of $227,711.00, divided between mortgages, loans on life insurance, accounts payable, and
accrued interest payable.
1
First National Bank of Dayton is now National City Bank.
2
Fries was also required to submit an audited financial statement, which was prepared by an
outside accounting firm. That statement failed to properly disclose that Fries of Kentucky had a
default judgment of over $1 million pending against it in an Alabama court. First National
eventually sued the accounting firm and collected $300,000 in compensation. Defendant was
charged under Count 2 with tendering a fraudulent financial statement which failed to properly
disclose the default judgment, however, the jury acquitted him of that charge.
3
No. 03-4114
On April 25, 1991, Defendant and his wife borrowed $100,000.00 from Alice Baldwin,
Defendant’s mother-in-law. This debt was not recorded anywhere on Defendant’s 1991 personal
financial statement. At trial, Neal Ratliff testified about the importance of the guarantee, asserting
that had the additional $100,000.00 debt been recorded it “would certainly reduce the strength of
the personal guarantee,” and would be a “negative.”
In early 1992, Defendant notified Ratliff that Fries of Kentucky was having some financial
difficulties, which Defendant connected to a large job pending in Connecticut. Defendant told
Ratliff that he was thinking about selling the company, although a buyer never materialized. The
Fries loan went into default in late February or early March of 1992. On April 1, 1992, First
National sent a letter to Defendant advising him that the Fries loan was in default, and demanding
that the principal balance of $1.6 million be paid in full.
Shortly after their letter to Defendant, First National filed a civil suit in the Montgomery
County Court of Common Pleas, attempting to recover the balance on the Fries loan. On April 15,
1992, Defendant’s deposition was taken in connection with the civil suit. Defendant denied that
either he or his wife still owned any of the securities listed on their July, 1991 personal financial
statement. However, Schedule D of their joint federal income tax return for 1992 indicates that they
acquired fifty-six shares of Pitney Bowes stock on April 1, 1988, and sold the shares on October 29,
1992, realizing a capital gain of $1,189.92.
On May 7, 1992, Defendant and Mrs. Davis were escorted out of Fries’ offices, and First
National took control of the business, placing a receiver in charge. Shortly before First National
took over, Neal Ratliff spoke with Defendant, asking him to transfer certain assets into his name.
4
No. 03-4114
Ratliff was referring to the fact that on March 2, 1992, Defendant and Mrs. Davis executed six deeds
conveying title in various properties to their daughter. Between February and May of 1992,
Defendant also wrote thirteen checks, totaling over $86,000, from Fries’ bank account to himself,
his wife, and their two daughters. At Defendant’s bank fraud trial, Ratliff testified that Defendant
refused to transfer the assets back into his name, and said that “he would do what he had to protect
his family and his assets.”
Ultimately, First National sold Fries’ assets, and Defendant and his wife declared
bankruptcy. The bankruptcy proceedings were completed sometime in 1996. Despite collecting
funds from both the sale of Fries’ assets and Defendant’s bankruptcy, the district court found that
First National was still owed over $600,000 when Defendant was sentenced in 2002.
A jury convicted Defendant of two counts of bank fraud, stemming from his omission of the
$100,000 debt in his 1991 personal financial statement and his denial that he owned the Pitney
Bowes stock during his 1992 deposition. Defendant appeals both his conviction and the 33 month
sentence imposed by the district court.
II. DISCUSSION
Defendant raises several issues on appeal. First, he challenges his conviction, alleging that
there was insufficient evidence presented at trial to convict him, and that the judge should have
granted his motion for a judgment of acquittal under Rule 29. Second, Defendant argues that the
district court improperly sentenced him by using the version of the Sentencing Guidelines in effect
at the time of sentencing, as opposed to the time Defendant’s crime occurred. Finally, Defendant
5
No. 03-4114
claims that in calculating his sentence, the district court erroneously determined the amount of loss
attributable to his conduct. We will address each of these contentions in turn.
A. Sufficiency of the Evidence
We have often noted that we “will sustain a jury’s guilty verdict so long as, ‘after viewing
the evidence in the light most favorable to the government, any rational trier of fact could have
found the elements of the crime beyond a reasonable doubt.’” United States v. Ware, 282 F.3d 902,
905 (6th Cir. 2002) (quoting United States v. Beddow, 957 F.2d 1330, 1334 (6th Cir. 1992)); accord
United States v. Spearman, 186 F.3d 743, 746 (6th Cir. 1999); United States v. Lutz, 154 F.3d 581,
587 (6th Cir. 1998). Thus, Defendant “bears a very heavy burden” in his sufficiency of the evidence
challenge to his conviction. Spearman, 186 F.3d at 746 (citing United States v. Vannerson, 786 F.2d
221, 225 (6th Cir. 1986)). The same standard for sustaining a jury verdict also applies to the district
court’s denial of Defendant’s motion for a judgment of acquittal under Rule 29. See United States
v. Bowker, 372 F.3d 365, 387 (6th Cir. 2004).
6
No. 03-4114
Defendant was convicted of bank fraud in violation of 18 U.S.C. § 1344.3 There are three
elements to the offense: (1) that the defendant knowingly executed or attempt to execute a scheme
to defraud a financial institution; (2) that the defendant did so with the intent to defraud; and (3) that
the financial institution was insured by the Federal Deposit Insurance Corporation (“FDIC”). United
States v. Everett, 270 F.3d 986, 989 (6th Cir. 2001); United States v. Hoglund, 178 F.3d 410, 413
(6th Cir. 1999).
Defendant focuses his argument on the second element, intent to defraud. Defendant points
to the district court judge’s statement at sentencing that “[t]here’s no question when this defendant
initially took the loan, when Mr. Davis applied for the extension of the loan, he had every
expectation that he would pay it back.” Defendant argues that this comment shows that he did not
have the requisite intent to defraud First National, and thus the jury verdict was unsupported by
sufficient evidence.
We find absolutely no merit to Defendant’s argument. First, as a practical matter, if the
district judge actually believed that the government failed to prove an essential element of the crime,
3
Section 1344 provides:
Whoever knowingly executes, or attempts to execute, a scheme or artifice --
(1) to defraud a financial institution; or
(2) to obtain any of the moneys, funds, credits, assets, securities, or other property owned
by, or under the custody or control of, a financial institution, by means of false or fraudulent
pretenses, representations, or promises;
shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.
18 U.S.C. § 1344 (2004).
7
No. 03-4114
he would have been bound to grant Defendant’s Rule 29 motion. The fact that at the close of the
evidence the judge dismissed Counts 1 and 3 against Defendant, but not Counts 4 and 5, indicates
that the judge separately evaluated the evidence with respect to the various counts, and did not
believe the evidence was insufficient to support a conviction by the jury as to Counts 4 and 5.
Second, we note that Defendant takes the judge’s comments completely out of context. At the
sentencing hearing, right after he made the above comment, the judge stated that it was “clear when
Mr. Davis lied at a deposition about the ownership of certain corporate securities and when he took
steps to conceal assets from the bank, he did intend to harm the bank.” And third, regardless of the
judge’s comments about Defendant’s intent, this Court has held that it is “not a defense [to § 1344]
that the defendant ‘may not have intended to cause the bank to lose any money; it is sufficient that
he was shown to have intended to facilitate the transfer of bank funds’ in pursuit of a fraudulent
scheme.” Everett, 270 F.3d at 991 (quoting United States v. Kropp, 132 F.3d 34, 1997 WL 735331
at **2 (6th Cir. 1997)).
Defendant also claims the evidence was insufficient to convict him because his
misrepresentations to the bank came after First National extended money to him, and therefore he
could not have intended to defraud the bank when he made the false statements. Once again, we are
not persuaded by Defendant’s argument. First, given that intent to defraud need not be an intent that
the bank lose money, see, e.g., Everett, supra, a reasonable trier of fact could find that misstatements
made after the loans were advanced, such as Defendant’s failure to disclose the Pitney Bowes stock,
were intended to defraud the bank. Second, Defendant erroneously claims that the personal financial
statement omitting the $100,000 debt was submitted to First National in 1992, after the Fries loan
8
No. 03-4114
went into default. However, the evidence presented at Defendant’s trial clearly shows that the 1991
personal financial statement was submitted in July, 1991, and was used to secure the 1991 renewal
of the Fries and personal lines of credit.
Defendant has failed to make any plausible arguments on appeal to show that the evidence
presented at trial was insufficient to support his conviction. Given the deference that we afford to
jury verdicts, and the heavy burden on Defendant, we decline to overturn Defendant’s conviction
under 18 U.S.C. § 1344.
B. Version of Guidelines Applied
Defendant contends that the district court erred in applying the 2002 version of the United
States Sentencing Guidelines, which were in effect at the time of sentencing, as opposed to the 1991
or 1992 versions of the Guidelines, which were in effect at the time Defendant’s offense conduct
took place.4 We preface our analysis of Defendant’s argument by noting the relevance of the
Supreme Court’s discussion of the Sentencing Guidelines in the recent Booker decision. Under
Booker, application of the Guidelines by the district court is not mandatory; however, the court,
“while not bound to apply the Guidelines, must consult those Guidelines and take them into account
when sentencing.” Booker, supra, 543 U.S. at ____ (slip op. at 21-2), 2005 WL 50108 at *27
(Breyer, J.). The statute directing the district court to consider the instructions set forth in the
Guidelines, 18 U.S.C. § 3553 (a)(4), (5), has not been excised and severed by Booker. We read
Booker to require that when district courts consult the Guidelines, they are to continue to consider
4
For the purposes of Defendant’s case, the relevant provisions of the 1991 and 1992 versions
of the Guidelines are identical.
9
No. 03-4114
the sentence, sentencing range, and pertinent policy statements contained in those Guidelines, as
required by § 3553 (a)(4) and (5). In a case such as this one, where Defendant contests the manner
in which the district court applied the consulted Guideline, we are instructed to review the sentence
for reasonableness. Id. (slip op. at 22), 2005 WL 50108 at *27.
However, Defendant did not object to the version of the Guidelines used by the district court,
instead raising the argument for the first time on appeal. When a defendant fails to object to the use
of a particular version of the Guidelines before the district court, we review for plain error under
Federal Rule of Criminal Procedure 52(b).5 United States v. Green, 305 F.3d 422, 432 (6th Cir.
2002) (citing United States v. Fountain, 2 F.3d 656, 669-70 (6th Cir. 1993)); United States v.
Koeberlein, 161 F.3d 946, 949 (6th Cir. 1998). This is so even after Booker, which instructs us “to
apply ordinary prudential doctrines, determining, for example, whether the issue was raised below
and whether it fails the ‘plain-error’ test.” Booker, 543 U.S. at ____ (slip op. at 25-6), 2005 WL
50108 at *29; see also United States v. Ameline, 376 F.3d 967, 978-79 (9th Cir. 2004) (pre-Booker,
case applying Blakely v. Washington, 542 U.S. ____, 124 S. Ct. 2531 (2004), to Guidelines, but
concluding that because the defendant failed to object to his sentence before the district court, plain
error analysis governs review). Thus, we will proceed with our analysis under established plain
error law.
5
Rule 52(b) states: “Plain Error. A plain error that affects substantial rights may be
considered even though it was not brought to the court’s attention.” FED. R. CRIM. P. 52(b) (2004).
10
No. 03-4114
Because Defendant forfeited his right to object below, he bears the burden of persuading this
Court that application of the 2002 Guidelines was plain error. See United States v. Vonn, 535 U.S.
55, 63, 122 S. Ct. 1043, 152 L. Ed. 2d 90 (2002). In order to show plain error, Defendant must
satisfy the following criteria: “(1) that an error occurred in the district court; (2) that the error was
plain, i.e., obvious or clear; (3) that the error affected defendant’s substantial rights; and (4) that this
adverse impact seriously affected the fairness, integrity or public reputation of the judicial
proceedings.” Koeberlein, 161 F.3d at 949 (citing Johnson v. United States, 520 U.S. 461, 467, 117
S. Ct. 1544, 137 L. Ed. 2d 718 (1997); United States v. Thomas, 11 F.3d 620, 629-30 (6th Cir.
1993)); see United States v. Olano, 507 U.S. 725, 732-37, 113 S. Ct. 1770, 123 L. Ed. 2d 508
(1993).
Generally, the district court is instructed to apply the version of the Guidelines in place at
the time of sentencing. U.S. SENTENCING GUIDELINES MANUAL (“U.S.S.G.”) § 1B1.11(a) (2002).
However, the Guidelines clearly instruct the court to apply the version in place at the time the
defendant’s offense was committed if applying the current Guidelines would amount to a violation
of the ex post facto clause, Article I, § 9, cl. 3 of the United States Constitution. U.S.S.G. § 1B1.11
(a), (b)(1) (2002)6; see also Miller v. Florida, 482 U.S. 423, 107 S. Ct. 2446, 96 L. Ed. 2d 351
6
Section 1B1.11 states, in relevant part:
(a) The court shall use the Guidelines Manual in effect on the date that the defendant is
sentenced.
(b) (1) If the court determines that use of the Guidelines Manual in effect on the date
that the defendant is sentenced would violate the ex post facto clause of the
United States Constitution, the court shall use the Guidelines Manual in
effect on the date that the offense of conviction was committed.
11
No. 03-4114
(1987); United States v. Kussmaul, 987 F.2d 345, 351-52 (6th Cir. 1993). The ex post facto clause
is implicated where a law punishes retrospectively; “[a] law is retrospective if it ‘changes the legal
consequences of acts completed before its effective date.’” Miller, 482 U.S. at 430, 107 S . Ct. 2446
(quoting Weaver v. Graham, 450 U.S. 24, 31, 101 S. Ct. 960, 67 L. Ed. 2d 17 (1981)); see also
United States v. Milton, 27 F.3d 203, 210 (6th Cir. 1994) (noting that “when the guidelines in effect
at the time of sentencing provide for a higher range than those in effect at the time the crime was
committed . . . an ex post facto problem exists and the court must not impose a sentence in excess
of that allowed by the older guidelines.”) (citation omitted).
Defendant was sentenced to 33 months imprisonment under § 2B1.1 of the 2002 Guidelines.
The base offense level under § 2B1.1 is 6, and the district court added 14 by calculating the loss
attributable to Defendant’s conduct as being between $400,000 and $1,000,000. U.S.S.G. §
2B1.1(b)(1)(H). The sentencing range for level 20, criminal history category I is 33-41 months.
Defendant contends that he should have been sentenced under the 1991 version of the Guidelines,
which was in effect at the time of Defendant’s offense conduct. The relevant section under the 1991
Guidelines is § 2F1.1. Section 2F1.1 also has a base offense level of 6, but only adds 11 for a loss
between $800,000 and $1,500,000. U.S.S.G. § 2F1.1(b)(1)(L) (1991). The sentencing range for
level 17, criminal history category I is 24-30 months. Thus, Defendant argues, application of the
2002 Guidelines resulted in the imposition of a sentence 3 months longer than what he could have
possibly received under the 1991 Guidelines.
U.S.S.G. § 1B1.11 (2002).
12
No. 03-4114
The government rebuts Defendant’s argument by alleging that his sentence would have been
the same under the 1991 Guidelines, and thus there is no ex post facto violation, because had the
1991 Guidelines been applied, Defendant would have been eligible for a 2-level increase for “more
than minimal planning.” Offense level 19, criminal history category I under the 1991 guidelines
produces a sentence of 30-37 months. Because Defendant’s 33 month sentence is within this range,
the government argues that even if it was an error for the district court to apply the 2002 Guidelines,
Defendant’s substantial rights have not been affected.
Before addressing the merits of Defendant’s claim under the plain error standard, we note
that the government’s argument about the application of the “more than minimal” planning
enhancement is highly speculative, particularly in light of Booker. We previously stated that the
“more than minimal planning” enhancement is appropriate in “(1) cases where more planning occurs
than is typical for commission of the offense in a simple form; (2) cases involving significant
affirmative steps to conceal; and (3) cases involving repeated acts over a period of time, unless each
instance was purely opportune.” United States v. Lutz, 154 F.3d 581, 590 (6th Cir. 1998) (citations
omitted). Whether or not any of these factors applied was a matter committed to the discretion of
the district court, and pre-Booker, imposition of the enhancement was reviewed on appeal for clear
error. Id. Post-Booker, however, it is unclear to us whether the district court judge could apply a
more than minimal planning enhancement at sentencing without running afoul of the Supreme
Court’s command that “[a]ny fact (other than a prior conviction) which is necessary to support a
sentence exceeding the statutory maximum authorized by the facts established by a plea of guilty
13
No. 03-4114
or a jury verdict must be admitted by the defendant or proved to a jury beyond a reasonable doubt.”
Booker, 543 U.S. at ____ (slip op. at 20), 2005 WL 50108 at *15 (Stevens, J.).
In addition to the speculativeness of the applicability of the “more than minimal planning”
enhancement after Booker, we find another factor that counsels against our taking the government’s
view on this issue. Had the district court applied the enhancement, the guideline range for
Defendant’s sentence would have been 30-37 months. The actual sentence that Defendant received,
33 months, is clearly within that range; however, it is also the lowest sentence Defendant could have
gotten without a downward departure under the 2002 Guidelines. At the sentencing hearing, the
district court declined to give any downward departures, but the court specifically noted that it was
sentencing Defendant to the lowest sentence possible under the then-mandatory Guidelines, due to
his age and the delay in prosecution. The court stated that “[n]ormally the Court would be inclined
to sentence in the middle or the upper reaches of the guideline range,” because the amount of loss
was close to $1 million. However, the court went on to state:
I am mindful of the fact that [Defendant] is 69 years old and that in
truth this offense took place eleven years ago. And while that’s not
sufficient for a downward departure, in my opinion- in this Court’s
opinion, it qualifies for a sentence on the low end of the guideline
range.
Based on these statements, had the district court applied the 1991 Guidelines even with the “more
than minimal planning” enhancement, it is quite possible that Defendant would also have been given
the low end sentence of 30 months, which is still 3 months shorter than the 33 month sentence
Defendant actually received. Therefore, we find that even with the enhancement, an ex post facto
problem exists. See United States v. Keigue, 318 F.3d 437, 443-45 (2d Cir. 2003) (finding plain
14
No. 03-4114
error where district court used incorrect version of Guidelines, but defendant nonetheless received
a sentence within overlapping portion of both correct and incorrect Guidelines, and district court
commented that it was sentencing defendant to low end of Guideline range).
Having identified an ex post facto problem, our inquiry is not at an end. We must determine
whether the application of the 2002 Guidelines was plain error. Because we agree with Defendant
that an ex post facto problem exists, we hold that the application of the incorrect version of the
Guidelines was an error, and second, that the error was plain or obvious. The ex post facto clause
announces a fundamental constitutional absolute. U.S. Const. Art. I, § 9, cl. 3 (“No Bill of Attainder
or ex post facto Law shall be passed.”). The Guidelines, as well as Supreme Court and Sixth Circuit
precedent, clearly instruct the district court to apply the Guidelines in effect at the time the offense
was committed if the application of the current Guidelines would work an ex post facto violation.
See, e.g., U.S.S.G. § 1B1.11(b)(1); Miller, 482 U.S. at 435, 107 S. Ct. 2446; Milton, 27 F.3d at 210;
Kussmaul, 987 F.2d at 351-52. We therefore think that when the district court applied the 2002
version of the Guidelines, it committed an obvious error.
The third inquiry under the plain error test is whether the error affected Defendant’s
substantial rights. “This usually means that the error must have affected the outcome of the district
court proceedings.” United States v. Cotton, 535 U.S. 625, 632, 122 S. Ct. 1781, 152 L. Ed. 2d 860
(2002) (quotation omitted); see also Olano, 507 U.S. at 734, 113 S. Ct. 1770 (stating that “in most
cases [affects substantial rights] means that the error must have been prejudicial”). In this case, use
of the 2002 Guidelines caused Defendant to be sentenced to anywhere from 3 to 9 more months than
he would have gotten under the 1991 Guidelines, without the enhancement. “‘[A] sentence based
15
No. 03-4114
on an incorrect guideline range constitutes an error affecting substantial rights and can thus
constitute plain error.’” United States v. Hall, 212 F.3d 1016, 1022 (7th Cir. 2000) (quoting United
States v. Robinson, 20 F.3d 270, 273 (7th Cir. 1994)). Furthermore, even with the “more than
minimal planning” enhancement, the district court’s comments at sentencing make it seem likely
to us that Defendant would have gotten the low end sentence of 30 months had the court used its
discretion to apply the enhancement. “[W]here, as here, the record permits the inference that a
defendant would have received a different, shorter sentence absent an unobjected-to error, the
defendant’s substantial rights have been affected within the meaning of Rule 52(b).” Keigue, 318
F.3d at 445 (emphasis in original).
The final inquiry is whether the error “seriously affect[s] the fairness, integrity or public
reputation of the judicial proceedings.” United States v. Atkinson, 297 U.S. 157, 160, 56 S. Ct. 391,
80 L. Ed. 555 (1936). Whether this factor is met is within this Court’s discretion. See Olano, 507
U.S. at 735, 113 S. Ct. 1770, 123 L. Ed. 2d 508 (“Rule 52(b) is permissive, not mandatory. If the
forfeited error is ‘plain’ and ‘affect[s] substantial rights,’ the court of appeals has authority to order
correction, but is not required to do so.”). Two factors counsel in favor of exercising our discretion
to remand in this case. First, we again emphasize that the ex post facto clause is a constitutional
mandate that laws must not punish retroactively. Where that mandate is violated, we think that it
seriously affects the fairness and integrity of the judicial proceeding.
Second, we note that a number of other circuits have found plain error in the application of
an incorrect version of the Guidelines. See United States v. Syme, 276 F.3d 131, 136 (3d Cir. 2002)
(finding plain error and ex post facto violation where defendant was sentenced using enhancement
16
No. 03-4114
not in effect at time crime was committed); United States v. Chea, 231 F.3d 531, 539-40 (9th Cir.
2000) (finding plain error standard met where incorrect version of Guidelines was applied at
sentencing); United States v. Comstock, 154 F.3d 845, 850 (8th Cir. 1998) (finding plain error
standard met where incorrect version of Guidelines was applied and ex post facto violation resulted);
United States v. Orr, 68 F.3d 1247, 1252-53 (10th Cir. 1995) (holding that retroactive application
of revised Guidelines was an ex post facto violation which constituted plain error and required court
to remand for resentencing); United States v. Anderson, 61 F.3d 1290, 1301 (7th Cir. 1995) (“We
have held that a district court commits plain error when it applies the sentencing Guidelines in a
manner that violates the Ex Post Facto Clause.”); United States v. Keller, 58 F.3d 884, 893 (2d Cir.
1995), abrogated on other grounds by United States v. Mapp, 170 F.3d 328 (2d Cir. 1999) (finding
plain error and stating that “[b]ecause the wrong version of the Guidelines was used to determine
[defendant’s] sentence, we must vacate it and remand for re-sentencing”). We find these other
courts’ analyses persuasive, and join them in concluding that because the wrong Guidelines were
applied to Defendant, and an ex post facto violation resulted, this case must be remanded for
resentencing.
C. Amount of Loss Calculation
Defendant also challenges the amount of monetary loss the district court concluded was
attributable to his conduct.7 This issue is squarely governed by the Supreme Court’s decisions in
7
Because Defendant was sentenced in 2002, long before the Supreme Court issued its opinion
at the end of last term in Blakely v. Washington, Defendant did not raise a Sixth Amendment
challenge to the amount of loss calculation before the district court. However Defendant did object
to the district court’s calculation on other grounds at sentencing, and although the briefs in this case
were due before Blakely was decided, Defendant filed updated citations to this Court prior to oral
17
No. 03-4114
Booker and Blakely. It is now settled law that the Sixth Amendment forbids a judge from increasing
a defendant’s sentence based on facts not admitted by the defendant or proven to a jury beyond a
reasonable doubt. Booker, 543 U.S. at ____ (slip op. at 3), 2005 WL 50108 at *5 (Stevens, J.);
Blakely, 542 U.S. at ____, 124 S. Ct. at 2537. In other words, “[w]hen a judge inflicts punishment
that the jury’s verdict alone does not allow, the jury has not found all the facts which the law makes
essential to the punishment and the judge exceeds his proper authority.” Blakely, 542 U.S. at ____,
124 S. Ct. at 2537 (internal citations omitted).
In the case sub judice, the amount of the loss was not argued to the jury, which merely found
Defendant guilty of bank fraud under 18 U.S.C. § 1344. The amount of loss is not an element of the
offense, but rather is relevant to Defendant’s sentence under the Guidelines. At the sentencing
hearing before the district judge, Defendant argued that the amount of loss was as little as
$161,000.00, or possibly no loss at all; conversely, the government argued that the amount of loss
was $834,835.24. The district court judge rejected both the Defendant’s and the government’s
calculations, instead performing an independent review of the evidence and concluding that the
amount of loss attributable to Defendant’s conduct was $914,478.68. Under the 2002 Guidelines
applied by the district court, an amount of loss between $400,000.00 and $1,000,000.00 adds 14
levels to the base offense level, and in Defendant’s case yielded a sentencing range of 33-41 months
imprisonment. U.S.S.G. § 2B1.1 (b)(1)(H) (2002). By contrast, had the district court determined
that the amount of loss was the $161,000.00 figure raised by Defendant, only 10 levels would have
argument. Additionally, both Defendant and the government debated the application of Blakely to
the district court’s amount of loss calculation at oral argument. We are sufficiently satisfied that
Defendant has preserved an objection to his sentence on Blakely grounds.
18
No. 03-4114
been added to Defendant’s base offense level, yielding a sentencing range of 21-27 months
imprisonment. § 2B1.1 (b)(1)(F). Alternatively, had the court found no loss at all, nothing would
have been added to Defendant’s base offense level, and the sentencing range would have been 0-6
months imprisonment. § 2B1.1 (b)(1)(A).8
We note the variation in Defendant’s possible sentences in order to demonstrate that the
district judge’s calculation of the amount of loss clearly determined the length of Defendant’s
sentence under the Guidelines. Under Booker, this type of independent fact-finding by the district
judge, which enhances Defendant’s sentence beyond the facts established by the jury verdict, clearly
violates the Sixth Amendment and requires us to remand for resentencing. Booker, 543 U.S. at ____
(slip op. at 20), 2005 WL 50108 at *15 (Breyer, J.).
Our analysis of Booker rejects the notion that the maximum sentence authorized by § 1344,
30 years, is also the maximum sentence authorized by the jury verdict. Our conclusion is compelled
by the Supreme Court’s own application of its holding to the facts in Booker. Booker was convicted
by a jury of possessing at least 50 grams of crack cocaine, based upon evidence that he had 92.5
grams of crack in a duffel bag. Id., 543 U.S. at ____(slip op. at 10), 2005 WL 50108 at *9 (Stevens,
J.). Had the district court calculated Booker’s sentence using these amounts, the applicable
Guideline range would have been 210-262 months. Id. However, the district judge engaged in
independent fact-finding, concluded that Booker possessed an additional 566 grams of crack, and
8
The contrast in possible sentences depending on the amount of loss are equally varied under
the 1991 or 1992 Guidelines: Defendant’s sentencing range for a loss between $800,000.00 and
$1,500,000 is 24-30 months; for a loss of $161,000 the range is 12-18 months; and for no loss the
range is 0-6 months. U.S.S.G. § 2F1.1 (b)(1) (A), (H) and (L) (1991).
19
No. 03-4114
sentenced him to 360 months. Id. The additional quantity of crack was never argued to the jury,
thus the Court concluded that “just as in Blakely, ‘the jury’s verdict alone does not authorize the
sentence. The judge acquires that authority only upon finding some additional fact.’” Id., 543 U.S.
at __ (slip op. at 11), 2005 WL 50108 at *10 (quoting Blakely, 542 U.S. at ____, 124 S. Ct. at 2538).
The Court makes no reference to the maximum sentence authorized by the statute under which
Booker was convicted, 21 U.S.C. § 841 (b)(1)(A)(iii), which incidentally is life imprisonment.
Rather, the Court’s entire analysis refers to the maximum sentence authorized by the facts proven
to the jury under the Guidelines: 262 months. We are therefore persuaded that our analysis of
Defendant’s sentence under the Guideline ranges, and not the statutory maximum of 30 years, is
correct. Just as Booker’s 360 month sentence, based on independent judicial fact-finding, violated
the Sixth Amendment, so too did Defendant’s 33 month sentence, based on the district judge’s
independent calculation of the amount of loss. The case therefore must be remanded to the district
court for resentencing.
III. CONCLUSION
For the reasons set forth above, we AFFIRM Defendant’s conviction under 18 U.S.C. §
1344, but VACATE Defendant’s sentence and REMAND this case for resentencing in a manner
consistent with this opinion.
20