U.S. v. Mullins

• Decision Date: 07 August 1992
• Docket Number: No. 92-5087,92-5087
• Citation: 971 F.2d 1138
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Lee Roy MULLINS, Jr., Defendant-Appellant.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 1138

971 F.2d 1138

UNITED STATES of America, Plaintiff-Appellee, v. Lee Roy MULLINS, Jr., Defendant-Appellant.

No. 92-5087.

United States Court of Appeals Fourth Circuit.

Argued May 5, 1992.

Decided Aug. 7, 1992.

Hunt Lee Charach, Federal Public Defender, Charleston, W.Va. (argued), for defendant-appellant.

Michael Lee Keller, Asst. U.S. Atty., Charleston, W.Va. (argued), (Michael W. Carey, U.S. Atty., Mary S. Feinberg, Asst. U.S. Atty., on brief), for plaintiff-appellee.

Before PHILLIPS, MURNAGHAN, and NIEMEYER, Circuit Judges.

OPINION

MURNAGHAN, Circuit Judge:

Lee Roy Mullins, Jr. was charged by information with aiding and abetting the commission of wire fraud, in violation of 18 U.S.C. §§ 1343 and 2. He pleaded guilty before the United States District Court for the Southern District of West Virginia, and was sentenced to six months of community confinement and ordered to pay restitution in the amount of $42,500. Mullins appeals from the sentence and the order of restitution.

The issues considered here are whether the district court erred in determining the extent of "relevant conduct" attributable to Mullins, see United States Sentencing Commission Guidelines Manual, § 1B1.3 (Nov.1991), and whether the order of restitution meets the requirements of the Victim and Witness Protection Act ("VWPA"), 18 U.S.C. § 3663 et seq. We hold that the separate uncharged fraudulent scheme was not part of the "same course of conduct or common scheme or plan" as the offense of conviction. In addition, we hold that the findings as to the victim's loss were not in compliance with the requirements of the VWPA. Therefore, we vacate the sentence and remand for resentencing, and we vacate the order of restitution and remand for further findings of fact.

I. BACKGROUND

The offense of conviction is based on Mullins' involvement in a fraudulent scheme conducted by his brother, Paul J. Mullins ("Paul"). In 1987, Paul initiated a scheme to defraud Gary Workman of Modern Equipment Company in Charleston, West Virginia of kitchen equipment. Paul acquired the equipment from Workman by submitting a false credit application that misrepresented his financial resources. The application included a statement that "Marie Keeney" agreed to be jointly liable for the debt. Keeney's signature was forged. Equipment valued at $45,000 was provided to Paul on credit by Workman.

There is no indication that Mullins had any knowledge of the fraud perpetrated on Workman by his brother Paul. Around the time that Paul obtained the equipment from Workman, Mullins moved to the country of Oman.

In the fall of 1988, Paul arranged an amplification of the scheme to forestall Workman from taking action to repossess the equipment. He telephoned his brother in Oman and asked him to tell Workman, in a subsequent phone call to be placed the following day, that Mullins owed money to Paul and that he was mailing a check to Paul in the amount of $35,000 as payment of that debt. The next day, in the presence of Workman, Paul telephoned his brother in Oman and Mullins spoke with Workman as arranged, telling him that he would send the check to Paul in two to three weeks.

Mullins testified at the plea hearing that he made the false statements to Workman so that his brother "could have some breathing room." Mullins maintains that his brother told him he intended to pay Workman eventually, but that he needed his assistance simply to get Workman "off his back" temporarily. In early 1989, some of the equipment was repossessed by Workman and auctioned at public sale. Because Paul had taken measures to prevent repossession, some of the equipment was not recovered.

Having learned the limits on the extent of a duty to be one's brother's keeper, Mullins pleaded guilty to the charge of aiding and abetting the commission of wire fraud, the person defrauded being Workman.

The separate, uncharged fraud determined by the district court for sentencing purposes to be "relevant conduct" under U.S.S.G. § 1B1.3 had arisen from Mullins' involvement in early 1988 with his brother's scheme to defraud several life insurance companies. The life of the same woman whose signature was forged in the credit application submitted to Workman, Marie Keeney, was fraudulently insured by having a younger woman pose as Keeney. The younger woman underwent physical examinations, purchased insurance from three life insurance companies for amounts totaling $1,100,000 in the name of Keeney, and named Paul as Keeney's beneficiary. Paul asked his brother to transport the woman to the physical examinations, and Mullins did so on three separate occasions, with knowledge as to the fraudulent nature of the plan.

Mullins had been charged in a one-count information with aiding and abetting wire fraud, in violation of 18 U.S.C. §§ 1343 and 2. ¹ The information to which he pled guilty charged Mullins with making false statements in a telephone conversation with a businessman "for the purpose of aiding and abetting" a pre-existing "scheme and artifice to defraud" the businessman. That "scheme and artifice to defraud" was described in the information as a scheme perpetrated by a known individual "to obtain [the businessman's] money and property in the approximate amount of $45,000 by means of false and fraudulent pretenses, representations and promises."

In a letter to Mullins' attorney dated July 25, 1990, the same day as the plea agreement, the government set forth the particulars of the Workman case against Mullins. The letter also described the life insurance frauds. Regarding the kitchen equipment, the letter stated that the purpose of Mullins' false statement to Workman was "to convince Mr. Workman that Paul would have money with which to pay Mr. Workman," that the equipment had been "purchased with a note allegedly signed by Marie Keeney," and that Mullins "knew when he made the false statement that he was aiding and abetting Paul in a scheme to defraud Mr. Workman." Regarding the life insurance scheme, the government stated in the letter that Mullins had transported a woman to three physical examinations at which the woman had falsely represented that she was Marie Keeney, and that Mullins was aware of that fact. No information about the identity of the woman who posed as Keeney was included in the letter.

Pursuant to a grant of use and sentencing immunity in the plea agreement, Mullins informed the government that the woman whom he transported to the physical examinations was named Mildred Irene Hunting. He also stated that he had introduced Hunting to his brother. Upon questioning Hunting, the government learned that she not only posed as Keeney in the insurance scheme, but that she had forged Keeney's signature on papers given to her by Paul, including one that Paul later turned into the fraudulent credit application submitted to Workman.

The government argued that, in sentencing Mullins for his participation in defrauding Workman, the sentence should be based on the dollar value of the intended loss involved in the life insurance fraud as well, because it was "relevant conduct" within the meaning of U.S.S.G. § 1B1.3. A charge had not been made of, and, of course, there was no conviction for, the insurance frauds. Mullins protested that it was not relevant conduct and that any link between the schemes was based on information he had provided pursuant to the grant of immunity. The government claimed that his assistance of knowledge of Hunting's full name and its use of information obtained from Hunting did not violate the grant of immunity because, prior to any discussions with Mullins, investigators knew that the woman who posed as Keeney to obtain the insurance was named "Irene" and that she resided in Lincoln County, West Virginia, even though her full name was not then known to the government.

Relative to the sentence, the presentence report contained the following calculation: (1) a base offense level for fraud of six levels, under U.S.S.G. § 2F1.1(a); (2) a nine-level increase under U.S.S.G. § 2F1.1(b)(1)(J), based on the potential loss of over one million dollars in the uncharged insurance fraud scheme which was relevant conduct in sentencing the kitchen equipment fraud; ² (3) a two-level increase under U.S.S.G. § 2F1.1(b)(2)(A), for an offense involving more than minimal planning; (4) a three-level decrease for Mullins' minor role in the offense; and (5) a two-level decrease for Mullins' acceptance of responsibility. That amounted, after adding and subtracting, to an offense level of twelve.

At the sentencing hearing on January 13, 1992, Mullins claimed (1) that the uncharged insurance fraud was not related to the offense of conviction; (2) that any evidence linking the two schemes was provided by him pursuant to the provision of immunity in his plea agreement; and (3) that he should not be held accountable for Workman's full financial loss. The district court rejected those objections, but found that the two-level increase for an offense involving more than minimal planning was unjustified. Thus, the offense level was determined to be ten, producing a sentencing range of 6-12 months. The district court sentenced Mullins to six months of community confinement and four and a half years of supervision.

On the issue of restitution, the presentence report stated that Workman's total loss was $42,500, and the government requested the court to order restitution of that amount. Mullins objected on the grounds that (1) the amount included consequential damages (legal fees and investigator fees and other sums expended for repossession of the equipment) that may not properly be included, and (2) his earning capacity was insufficient to enable him to pay that amount. The district court ordered Mullins to pay $42,500. ³

II. DISCUSSION

A. SENTENCE ENHANCEMENT FOR OTHER RELEVANT CONDUCT

On appeal, Mullins has challenged the district court's determination of "relevant conduct" under U.S.S.G....