United States v. Calvin Manis

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 09a0605n.06
No. 09-5043
FILED
UNITED STATES COURT OF APPEALS Aug 26, 2009
FOR THE SIXTH CIRCUIT LEONARD GREEN, Clerk
UNITED STATES OF AMERICA, )
) ON APPEAL FROM THE
Plaintiff-Appellee, ) UNITED STATES DISTRICT
) COURT FOR THE EASTERN
v. ) DISTRICT OF KENTUCKY
)
CALVIN MANIS, )
)
Defendant-Appellant. )
)
BEFORE: KEITH, SUTTON, and WHITE, Circuit Judges.
DAMON J. KEITH, Circuit Judge. Defendant-Appellant Calvin Manis pleaded guilty to
one count of being a licensed firearms dealer who failed to maintain records of transactions at his
place of business in violation of 18 U.S.C. §§ 922(m) and 924(a)(3)(B). At sentencing, the district
court found that Manis falsified his records to conceal sales of firearms to a convicted felon in
violation of 19 U.S.C. § 922(d), which resulted in an increase in his advisory guideline range
pursuant to U.S.S.G. § 2K2.1. He was sentenced to 12 months of imprisonment, the statutory
maximum, ordered to pay a $15,000 fine and given a 12-month term of supervised release. Manis
challenges his sentencing on appeal. He argues the district court incorrectly considered incriminating
hearsay testimony in finding he sold firearms to a prohibited person and that the district court’s
finding that he intended to conceal unlawful firearm sales lacked evidentiary support. For the
following reasons, we AFFIRM the district court’s sentencing order.
No. 09-5043
United States v. Manis
I.
Defendant-Appellant Calvin Manis (“Manis”) was a pharmacist and a federally licensed
firearms dealer. He owned and operated the Parkway Pharmacy, located in Barbourville, Kentucky,
which also housed a small gun shop. Manis was indicted for various federal firearm offenses
following a investigation conducted by the Bureau of Alcohol, Tobacco, and Firearms (“ATF”) that
originally focused on the conduct of Manis’ friend, William Phillips (“Phillips”),1 but later expanded
to include Manis as well. Manis ultimately pleaded guilty2 to one count of being a licensed firearms
dealer who failed to maintain records of transactions at his place of business, in violation of 18
U.S.C. §§ 922(m) and 924(a)(3)(B).3
The Pre-Sentence Investigation Report (“PSR”) computed Manis’ proposed guideline range
under U.S.S.G. §2K2.1. The base offense level for firearms record-keeping violations of 18 U.S.C.
§ 922(m) is six. U.S.S.G. § 2K2.1(a)(8). Section 2K2.1(b)(7) instructs, however, “If a
recordkeeping offense reflected an effort to conceal a substantive offense involving firearms or
ammunition, increase to the offense level for the substantive offense.” The probation officer who
1
William Phillips is incorrectly identified throughout the transcript of the sentencing hearing,
as well in the parties’ briefs on appeal, as “William Phipps” and “William” or “Willie Phelps.”
United States v. Manis, No. 6:08-115-DCR, 2009 WL 301943, *2 n.4 (E.D. Ky. Feb. 2, 2009).
2
Manis’ original indictment and subsequent plea deal are explained in detail in Manis, 2009
WL 301943, at *1.
3
18 U.S.C. § 922(m) states, “It shall be unlawful for any licensed importer, licensed
manufacturer, licensed dealer, or licensed collector knowingly to make any false entry in, to fail to
make appropriate entry in, or to fail to properly maintain, any record which he is required to keep
pursuant to section 923 of this chapter or regulations promulgated thereunder.” 18 U.S.C. § 924(a)(3)
sets a maximum of one year imprisonment for licensed firearms dealers who violate 18 U.S.C. §
922(m).
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prepared the PSR concluded that Manis’ records concealed violations of 18 U.S.C. § 922(d), which,
inter alia, prohibits the sale of firearms to any person whom the seller knows or has reasonable cause
to believe “is under indictment for, or has been convicted in any court of, a crime punishable by
imprisonment for a term exceeding one year.” 18 U.S.C. § 922(d)(1). The probation officer
specifically found Manis made unlawful straw sales to Phillips, a convicted felon, using Phillips’
wife as the purchaser of record.4 Accordingly, a base offense level of 14 was established for Manis.
See U.S.S.G. § 2K2.1(a)(6)(B), (b)(7), n.9.5 A six-level enhancement was added in light of evidence
that Phillips’ wife had purchased 41 firearms on behalf of her husband. See U.S.S.G. §
2K2.1(b)(1)(C).6
After factoring in a three-level reduction for acceptance of responsibility, the PSR established
a total offense level of 17 which – combined with a criminal history category of I – resulted in an
advisory guideline range of 24 to 30 months of imprisonment. The probation officer ultimately
recommended a sentence of 12 months of imprisonment – the statutory maximum. See 18 U.S.C.
§ 924(a)(3)(B).
4
A “straw” transaction occurs when a federal firearms licensee knowingly allows someone
to purchase a firearm on behalf of a prohibited person.
5
Section § 2K2.1(a)(6)(B) sets a base offense level of 14 if the defendant was convicted under
18 U.S.C. § 922(d). Application note 9 of § 2K2.1 states, “Under subsection (b)(7), if a
record-keeping offense was committed to conceal a substantive firearms or ammunition offense, the
offense level is increased to the offense level for the substantive firearms or ammunition offense
(e.g., if the defendant falsifies a record to conceal the sale of a firearm to a prohibited person, the
offense level is increased to the offense level applicable to the sale of a firearm to a prohibited
person).”
6
Section 2K2.1(b)(1)(C) increases the offense level by six when the offense involved between
25 and 99 firearms.
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United States v. Manis
Manis objected to the PSR based on the increases in offense level effected by U.S.S.G. §
2K2.1(b)(7) and (a)(6)(B). In relevant part, he argued that incriminating hearsay statements attested
to by ATF Agent Thomas Chittum (“Agent Chittum”) from Phillips regarding Manis’ straw sales
were not credible, and thus, could not be relied upon during sentencing. Implicit in his objection was
that his base offense should have remained at six prior to any reductions for acceptance of
responsibility. Manis also took issue with the PSR’s conclusion that he kept the firearms records
at his residence to conceal unlawful transactions. He contended the records were maintained there
because of remodeling at the pharmacy.
At Manis’ sentencing hearing on January 5, 2009, the government reasserted the conclusions
of the PSR and argued Manis concealed 41 straw sales to Phillips. The district court summarized
the government’s relevant evidence presented at sentencing:
The United States presented the testimony of Thomas Chittum, a Special Agent with
the Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”), and Thomas
Black, a lay witness who had purchased a number of firearms through William
Phillips, during the January 5, 2009, sentencing hearing. In addition, thirteen exhibits
were offered and admitted for the Court’s consideration. Through the testimony of
Special Agent Chittum, the United States established that Defendant Manis has sold
approximately 41 firearms to Phillips, a felon, using his wife has [sic] a straw
purchaser. Special Agent Chittum’s investigation revealed that, around 2000, Phillips
had attempted to purchase a firearm legitimately through a pawn shop located in
Corbin, Kentucky. However, after the background check revealed his felony
conviction, Phillips had his wife fill-out [sic] paperwork for later purchases from
Defendant Manis. Although Special Agent Chittum did not believe that Phillips
provided truthful or accurate statements concerning all aspects of his investigation,
he was able to confirm that Manis knew Phillips was a felon and engaged in straw
purchases to transfer numerous weapons to him. Special Agent Chittum testified that,
A. [SA Chittum] He was denied because he was a convicted felon.
Mr. Phipps [sic] knew that he couldn’t pass a background check
again, so he said that his wife did the paperwork for him. He hemmed
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and hawed some and said, well, sometimes she bought them as gifts,
but eventually acquiesced and said, no, she basically does whatever
I tell her and whenever I want a gun, she goes and fills out the
paperwork for it. And he told me that he and she did that with Mr.
knowledge and consent.
Q. And at any point, did Mr. Phipps [sic] relay to you whether or not
he had informed Mr. Manis about this NICS [“National Instant
Criminal Background Check System”] denial?
A. Yes, he told me that he had.... He told me that he told Mr. Manis
that he had tried to purchase a firearm and had been denied by the
NICS background check and he said he thought it was because of
criminal charges he had faced in federal court. Mr. Manis suggested
that Phipps [sic] have his record expunged, to take it off his record.
In fact, Mr. Phipps [sic] did try and have his record expunged here in
federal court, it was denied. But he continued to purchase firearms
through his wife rather than attempt another background check.
Special Agent Chittum subsequently obtained a search warrant for Defendant
business, Parkway Pharmacy. During the search of the Pharmacy, Special Agent
Chittum discovered the affidavit he had prepared in connection with an earlier search
of Phillips’ home. And when questioned by Special Agent Chittum, Manis admitted
that he had sold a number of firearms to Phillips, knowing that he was a convicted
felon.
A. [SA Chittum] When I interviewed him, he said that he had known
both of them [ i.e., Phipps [sic] and Kenny Sizemore] for a long time,
admitted that they came in there and got firearms. He said that he
believed that maybe about ten or so of the guns had been gifts for the
Phipps [sic] son, Kendall, but that he knew that most of them were
not and that it was them coming in and getting them. He admitted that
Phipps [sic] had told him that he [i.e., Phillips] had once been denied
on a NICS background check.
***
Q. And did Mr. Manis confirm to you that he, indeed, sold Barbara
Phipps [sic] firearms knowing that the actual purchaser or the person
coming in and ordering the gun, the person paying for the gun, was
actually William Phipps [sic]?
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A. Yes. But to say that he sold them to Barbara Phipps [sic] I think
overstates it. He says that Barbara filled out the paperwork but that
Phipps [sic] would come in and pick them out, that on occasion
Phipps came in and picked them up himself, even though Barbara had
done the paperwork.
Q. And did Mr. Manis confirm to you that William Phipps [sic]
always paid for the firearms?
A. Yes, and the [sic] he required him to pay up front because he was
afraid that he would not get paid.
Q. And did Mr. Manis confirm to you that William Phipps [sic]
would tell Manis what type of firearm he would like to purchase and
then Manis would order the specific firearm?
A. Yes. And Phipps [sic] told me the same thing, that Mr. [] business
was essentially special order. Mr. Manis told me the same thing, that
he didn’t maintain an inventory but rather ordered firearms on an
as-needed basis.
Manis, 2009 WL 301943, at *3-4 (denying Manis’ motion for release pending appeal) (citations to
the record omitted).
During cross-examination, Agent Chittum conceded he did not find Phillips to be an “honest
witness” and deemed him to have “very low credibility.” The government’s other witness Gary
Black, who had purchased guns from Phillips, also considered Phillips to be a “liar” and a “con
artist.” Manis did not testify at the sentencing hearing.
The sentencing court found by a preponderance of evidence that Manis knowingly allowed
straw purchases by Phillips through Phillips’ wife. While acknowledging the credibility questions
surrounding Phillips, the court found that his testimony on the issue of straw purchases contained
“sufficient indicia of reliability.” It also found that the preponderance of evidence established that
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United States v. Manis
Manis maintained his firearms records in his residence to conceal the illegal transactions, rather than
to protect them during the remodeling of his pharmacy. Thus, the sentencing court overruled Manis’
objections to the PSR and adopted its findings. After considering the 18 U.S.C. § 3553(a) factors
and allocution arguments, the court issued a statutory maximum sentence of 12 months of
imprisonment, fined Manis $15,000, and imposed a 12-month term of supervised release. Manis
filed a timely notice of appeal and challenged the sentencing order.
II.
“On appeal, we must determine whether a district court’s sentencing determination was
reasonable, which includes review of the district court’s Guidelines calculations.” United States v.
Hunt, 487 F.3d 347, 350 (6th Cir. 2007). We review the district court’s application of the
Sentencing Guidelines de novo and the district court’s findings of fact at sentencing, including the
determination of whether hearsay statements have “sufficient indicia of reliability,” for clear error.
See id. at 350, 353 (reviewing whether hearsay statements “were supported by sufficient indicia of
reliability” for clear error). The district court’s factual findings must be supported by a
preponderance of evidence. See, e.g., United States v. Ferguson, 456 F.3d 660, 665 (6th Cir. 2006).
III.
Manis first argues on appeal that the district court clearly erred in finding that he engaged in
straw purchases with Phillips, a convicted felon, in violation of 18 U.S.C. § 922(d). He specifically
claims the district court improperly relied upon hearsay testimony from Agent Chittum, who
recounted incriminating statements made to him by Phillips about Manis, which indicated that Manis
knowingly engaged in the prohibited transactions. Manis submits Phillips was not credible and, thus,
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United States v. Manis
the hearsay statements offered by Agent Chittum were “unreliable.” Accordingly, Manis maintains
that the lower court violated his due process rights by considering the testimony.7
In general, a sentencing court “may consider relevant information without regard to its
admissibility under the rules of evidence applicable at trial.” U.S.S.G. § 6A1.3(a); see 18 U.S.C. §
3661 (stating “[n]o limitation shall be placed on the information concerning the background,
character, and conduct of a person convicted of an offense which a court of the United States may
receive and consider for the purpose of imposing an appropriate sentence.”). Thus, it is well-
established that a sentencing court may consider hearsay testimony. See United States v. Hamad,
495 F.3d 241, 246 (6th Cir. 2007). Nevertheless, due process requires that the factual findings
supporting sentencing “have some minimal indicium of reliability.” United States v. Silverman, 976
F.2d 1502, 1504 (6th Cir. 1992) (en banc) (quoting United States v. Baylin, 696 F.2d 1030, 1040 (3d
Cir. 1982)). This standard presents a “relatively low hurdle,” and comports with the Sentencing
Guidelines requirement that information considered by the sentencing court, including hearsay, must
have “sufficient indicia of reliability to support its probable accuracy.” United States v. Greene, 71
F.3d 232, 235 (6th Cir. 1995) (partially quoting U.S.S.G. § 6A1.3); see also United States v. Bates,
315 F. App’x 591, 594 (6th Cir. 2009).
7
When asked at oral argument if the defendant was waiving this hearsay argument, Manis
counsel responded in the affirmative on the ground that it conflicted with this Court’s recent decision
in United States v. White, 551 F.3d 381 (6th Cir. 2008) (en banc). But White only held that acquitted
conduct could be considered at sentencing. Id. at 385. This principle is inapposite to Manis’
separate argument that the district court should not have considered Phillips’ incriminating hearsay
statements because they supposedly lacked reliability. It appears that counsel was actually waiving
a third argument made below that the straw sales to Phillips were not relevant conduct at sentencing
because those charges were not included in his superceding indictment. Given the ambiguity over
the waiver, we accord Manis’ hearsay argument appellate review.
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At sentencing, Agent Chittum testified to various statements by Phillips regarding the latter’s
straw purchases from Manis. Phillips specifically indicated that he could not pass a background
check necessary to purchase a firearm because of a prior felony conviction. To circumvent this
obstacle, Phillips had his wife “fill out the paperwork for him” while Phillips continued to select and
pay for the guns at the Parkway pharmacy. Agent Chittum testified that Phillips confirmed that
Manis was aware that Phillips had failed a prior background check due to his felony conviction and
that Phillips’ firearms purchases through his wife were done with “Manis’[] knowledge and
consent.” The district court relied upon Phillips’ statements in finding “abundant information that
would cause the Court to believe that straw purchases were taking place from Mr. Manis through
Mrs. Phipps [sic] to a prohibited person, that being Mr. Phipps [sic].” (Sentencing Tr. 78).
As noted above, Manis argues that Phillips hearsay statements offered through Agent
Chittum were “unreliable” and should have been disregarded by the district court at sentencing. In
support of this claim, Manis calls attention to Agent Chittum’s assessment that Phillips was not an
“honest witness” and was considered to have “very low credibility.” Manis also points out that Gary
Black described Phillips as a “liar” and a “con artist” at sentencing. Without the incriminating
statements from Phillips, Manis claims the district court lacked an adequate basis for concluding
Manis made straw sales to Phillips under the preponderance of evidence standard.
But as the government correctly points out, Manis’ contention rests “upon the faulty premise
that the district court made findings by considering only Phipps’s [sic] statements.” While hearsay
statements by those, such as Phillips, who may seek to “curry the favor of law enforcement” require
“closer scrutiny,” see Hill v. Hofbauer, 337 F.3d 706, 717 (6th Cir. 2003), corroborating evidence
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can provide questionable statements with a sufficient indicia of reliability. See Hunt, 487 F.3d at
353. In this case, Manis completely ignores the corroborative force of his own statements, which
were also conveyed by Agent Chittum at sentencing. Specifically, Manis admitted to Agent Chittum:
(1) he sold firearms to Phillips’ wife knowing the actual purchaser was Phillips, as Phillips was the
person selecting and paying for the guns; and (2) Phillips told Manis that he had been previously
denied on a firearms background check. This testimony alone is sufficient to support the reliability
of Phillips’ claims that Manis knowingly engaged in straw sales. See Bates, 315 F. App’x at 594-95
(finding an informant’s hearsay regarding drug quantity sufficiently reliable because, in part, it was
corroborated by defendant’s own admission of his involvement in drug trafficking).
In light of the ample evidence supporting Phillips’ assertions of straw purchases from Manis,
it cannot be maintained that they lacked “sufficient indicia of reliability” under the deferential
standard of review employed by this Court on questions of fact. Therefore, we rule that the district
court did not clearly err in finding by a preponderance of the evidence that Manis engaged in
unlawful straw purchases with a prohibited person in violation of 18 U.S.C. § 922(d)(1).
IV.
Manis also takes issue with the sentencing court’s application of U.S.S.G. § 2K2.1(b)(7) on
the ground that his record-keeping offense was not an “effort to conceal” straw sales. He alleges that
he kept the firearms records in his home because his business premises were being remodeled rather
than to conceal the transfer of the firearms to Phillips’ wife. Manis claims that the government
offered no evidence to prove intent to conceal at sentencing and, as a result, the district court’s
adverse finding on the matter necessarily lacked evidentiary support.
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United States v. Manis
We have held that “[w]hen a defendant fails to produce any evidence to contradict the facts
set forth in the PSR, a district court is entitled to rely on those facts when sentencing the defendant.”
United States v. Geerken, 506 F.3d 461, 467 (6th Cir. 2007). The PSR in the case at bar stated that
Phillips “acknowledged that he saw paperwork relating to firearms sales and a logbook at the
defendant’s residence approximately one year prior to [the] interview.” The district court
specifically relied on this information to find Manis made an “effort to conceal” unlawful straw
transactions, noting that the extended period during which the records were stored at his home
undermined Manis’ position that they were kept there because of the remodeling of his small shop.
(Sentencing Tr. 77-78). Because Manis failed to offer evidence to rebut the relevant factual assertion
set forth in the PSR, he cannot claim the district court erred in relying upon that fact when it applied
§ 2K2.1(b)(7). See Geerken, 506 F.3d at 467. Accordingly, we conclude the district court’s
determination that Manis intended to conceal straw sales by keeping the records at his residence was
not clear error.
V.
For the foregoing reasons, the district court’s sentencing order is AFFIRMED.
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