U.S.A. v. Bala

• Decision Date: 01 August 1999
• Docket Number: Docket No. 99-1597
• Parties: (2nd Cir. 2000) UNITED STATES OF AMERICA, Appellee, v. ABDUL MAJID BALA, also known as Sealed Defendant #2, Defendant, KANTILAL PATEL, also known as Sealed Defendant #1, Defendant-Appellant
• Court: U.S. Court of Appeals — Second Circuit

Page 87

236 F.3d 87 (2nd Cir. 2000)

UNITED STATES OF AMERICA, Appellee, v. ABDUL MAJID BALA, also known as Sealed Defendant #2, Defendant, KANTILAL PATEL, also known as Sealed Defendant #1, Defendant-Appellant.

Docket No. 99-1597

August Term, 1999

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

Argued: May 11, 2000

Decided: December 28, 2000

Appeal from United States District Court for the Northern District of New York (Thomas J. McAvoy, then-Chief Judge) sentencing defendant Kantilal Patel after a trial jury convicted him of conspiracy to launder money and substantive money laundering. Because the district court made no error of law, we affirm Patel's conviction and sentence.

Affirmed.

[Copyrighted Material Omitted]

[Copyrighted Material Omitted] PAUL SHECTMAN (Nathanial Z. Marmur, on the brief), Stillman & Friedman, New York, NY, for Defendant-Appellant Kantilal Patel.

BARBARA D. COTTRELL, Assistant United States Attorney, (Daniel J. French, United States Attorney, Kevin P. Dooley, Assistant United States Attorney, on the brief), Albany, NY, for Appellee.

Before: WALKER, Chief Judge^*, and KEARSE and POOLER, Circuit Judges.

POOLER, Circuit Judge:

Kantilal Patel appeals from the October 4, 1999, judgment of the United States District Court for the Northern District of New York (Thomas J. McAvoy, then-Chief Judge) sentencing him principally to 51 months imprisonment after a trial jury convicted him of conspiracy to launder money and substantive money laundering, in violation of 18 U.S.C. § 1956(h) and (a)(3). Although Patel raises several arguments on appeal relating to his trial, our primary focus is his contention that Judge McAvoy erred in refusing to grant a downward departure at the time of sentencing for "imperfect entrapment." We affirm Patel's conviction and sentence in all respects.

BACKGROUND

The government filed a sealed five-count indictment on October 29, 1998, charging Patel with three counts and Abdul Majid Bala with two counts of money laundering and both with one count of conspiracy to launder money. The indictment flowed from a government investigation using undercover agents from the Criminal Investigation Division of the Internal Revenue Service ("IRS") and a cooperating defendant. The investigation began in September 1996, when IRS agents arranged several meetings with Bharat Vakharia to negotiate money laundering transactions. Authorities arrested Vakharia in December 1996, and he agreed to cooperate with the government. Vakharia's cooperation led authorities to Patel. Vakharia told the government that Patel had invited him to a party in the summer of 1996 and that the two men discussed money laundering. Based on this background information, Vakharia made several telephone calls to Patel in January, February and May 1997, and the government monitored the calls. In their May conversation, the men discussed money laundering transactions.

On May 15, 1997, Patel met with Vakharia and an undercover agent in Endicott, New York and arranged to launder $25,000 in alleged heroin trafficking proceeds for a fee. Patel completed the transaction in a June 4, 1997, meeting. At the June 4 meeting, Patel introduced the agent to Bala, whom Patel had recruited. Patel had met Bala, who was Canadian, only the day before. A Canadian businessman whom Patel knew referred Patel's money laundering inquiries to Bala. On November 20, 1997, Bala met with an undercover agent in Buffalo to launder $50,000 in alleged heroin trafficking proceeds for a fee. The agent had first contacted Patel in order to reach Bala. On March 6, 1998, Patel and Bala met an undercover agent in Manhattan to launder $140,000 in alleged heroin trafficking proceeds. The agent had arranged the meeting directly with Bala, but Bala brought Patel along and gave Patel a portion of his fee. Finally, on November 9, 1998, Bala met with an undercover agent in Buffalo to launder $231,250. Police arrested Bala during the November 1998 meeting. Police arrested Patel on December 3, 1998.

Bala pleaded guilty to a charge of conspiracy to launder money on January 25, 1999. In a superseding indictment filed on March 11, 1999, the government charged Patel with conspiracy to engage in money laundering and five substantive money laundering counts based on the four transactions outlined above. Although he initially cooperated with authorities, Patel went to trial on April 19, 1999. The jury returned a guilty verdict against him on all counts on April 23, 1999. In the course of post-verdict motion practice, Judge McAvoy granted defendant's motion to dismiss counts 2 and 3 of the indictment, which concerned the $25,000 transaction in Endicott, because the government failed to prove that the deal had a nexus to interstate or foreign commerce as Section 1956(a)(3) required. The district court denied defendant's motion in all other respects. Judge McAvoy sentenced Patel on September 24, 1999, to 51 months imprisonment, two years supervised release, $16,000 fine, and $400 special assessment. Patel appeals his conviction and sentence.

DISCUSSION

I. Downward departure for imperfect entrapment

Patel claims that Judge McAvoy misapprehended his authority to make a downward departure at Patel's sentencing for "imperfect entrapment." The government responds that the imperfect entrapment doctrine is questionable in this circuit and does not apply to the facts of this case in any event. The government also contends that the district court rejected on the merits Patel's contentions related to entrapment when it denied defendant's post-verdict challenges to the jury's findings of guilt.

A defendant may not appeal a district court's decision not to make a discretionary downward departure unless the court relied "on the mistaken belief that it lacked authority to depart." United States v. Martin, 78 F.3d 808, 814 (2d Cir. 1996) (quoting United States v. Ekhator, 17 F.3d 53, 55 (2d Cir. 1994)). We review a district court's decision to make a sentencing departure for abuse of discretion, which includes making an error of law. See United States v. Bryson, 163 F.3d 742, 746 (2d Cir. 1998). In the case of the district court's refusal to grant a downward departure, we review the decision only if the sentencing judge imposed a sentence in violation of law or incorrectly applied the Sentencing Guidelines. See United States v. Campo, 140 F.3d 415, 418 (2d Cir. 1998) (per curiam). Some circuits have determined that "imperfect entrapment," described as "aggressive encouragement of wrongdoing, although not amounting to a complete defense," is a proper ground for downward departure at sentencing pursuant to U.S.S.G. § 5K2.12.¹ United States v. Garza-Juarez, 992 F.2d 896, 912 (9th Cir. 1993); see also United States v. Osborne, 935 F.2d 32, 35 n.3 (4th Cir. 1991) (noting district court's authority to depart downwardly for outrageous government conduct); United States v. Barth, 990 F.2d 422, 424-25 (8th Cir. 1993) (recognizing that sentencing entrapment generally is a valid departure ground but not on facts of that case).

Patel's imperfect entrapment argument is that a departure was warranted because he led a law-abiding life until encountering the government's sting operation and he was so inept at his crime that no real criminal would have done business with him.² The sentencing transcript shows that Judge McAvoy refused to consider imperfect entrapment as a ground for a downward departure motion because he believed that Second Circuit law did not authorize it.³

The Supreme Court has established a two-part test to determine whether a particular factor is a permissible basis for a downward departure. See Koon v. United States, 518 U.S. 81, 109 (1996). The court must first determine whether reliance on the factor is "proscribed, as a categorical matter," by the guidelines, and if it is not, the court must then determine whether the factor "takes the case outside the heartland of the applicable Guideline." Id. The first question - "whether a factor is a permissible basis for departure under any circumstances" - is a matter of law, and therefore "the court of appeals need not defer to the district court's resolution of the point." Id. at 100.

While to date we have not decided whether imperfect entrapment is proscribed by the guidelines as a ground for downward departure, we can find nothing in the guidelines to prohibit a district court from considering conduct by the government that does not give rise to an entrapment defense but that is nonetheless "aggressive encouragement of wrongdoing." Garza-Juarez, 992 F.2d at 912; see also United States v. Giles, 768 F. Supp. 101, 103-04 (S.D.N.Y.), aff'd without op., 953 F.2d 636 (2d Cir. 1991). Moreover, the policy statement in Section 5K2.12 can reasonably be read to authorize such a departure in appropriate cases. Nevertheless, it is for the district courts to decide for themselves whether, in a particular case, a downward departure based on imperfect entrapment would remove that case from the "heartland of the applicable Guideline." See United States v. Bonnet-Grullon, 212 F.3d 692, 700 (2d Cir. 2000) ("The determination of whether a case is within the heartland of the applicable guideline cannot be a matter of generalization."). We recognize the district courts' "institutional advantage over appellate courts in making these sorts of determinations." Koon, 518 U.S. at 98.

Although the district court here apparently believed that, as a matter of law, it was unable to consider imperfect entrapment, its misapprehension was harmless. In imposing sentence in the present case, Judge McAvoy noted that after looking at all of the evidence before him, he had concluded that Patel became involved in the money-laundering scheme solely out of greed. Although there might be cases whose circumstances would warrant a downward departure on the basis of imperfect entrapment, the record here does not suffice to take Patel out of the heartland...