U.S. v. Cianscewski, 89-1160

• Decision Date: 18 January 1990
• Docket Number: No. 89-1160,89-1160
• Citation: 894 F.2d 74
• Parties: UNITED STATES of America, Appellee, v. Richard CIANSCEWSKI, Appellant.
• Court: U.S. Court of Appeals — Third Circuit

Page 74

894 F.2d 74

UNITED STATES of America, Appellee, v. Richard CIANSCEWSKI, Appellant.

No. 89-1160.

United States Court of Appeals Third Circuit.

Argued July 10, 1989.

Decided Jan. 18, 1990.

Steven A. Morley (argued), Morley & Farber, Philadelphia, Pa., for appellant.

Michael M. Baylson, U.S. Atty., Walter S. Batty, Jr., Asst. U.S. Atty., Chief of Appeals, Ann E. Campbell (argued), Asst. U.S. Atty., Philadelphia, Pa., for appellee.

Before BECKER, SCIRICA, and NYGAARD, Circuit Judges.

OPINION OF THE COURT

BECKER, Circuit Judge.

This appeal presents several questions arising out of the new federal sentencing guidelines, the most important of which involves the applicability of the criminal livelihood guideline in effect before November 1, 1989 to someone with a high percentage, but low amount, of income that is illicit. We conclude that the guideline is inapplicable to defendants whose yearly profit from crime is less than 2000 times the hourly minimum wage.

In this case, the district court's application of the criminal livelihood guideline enhanced the sentence appellant Richard Cianscewski otherwise would have received under the fraud and deceit guideline. We conclude that the district court correctly calculated the appropriate sentencing range under the fraud and deceit guideline, but misapplied the criminal livelihood enhancement. Accordingly, we will vacate and remand for resentencing.

I. Facts and Procedural History

Richard Cianscewski appeals his sentence of 41 months' imprisonment following conviction of one count of conspiracy, ¹ three counts of possessing stolen mail, ² and three counts of selling stolen United States treasury checks. ³ Cianscewski and his common-law wife were indicted for possessing and selling stolen treasury checks on four separate occasions. She was charged with selling checks worth $3126.45 for $1040 on March 3, 1988. He was charged with selling checks worth $2128.91 for $710 on March 22, 1988; checks worth $2309 for $780 on April 1, 1988; and checks worth $2066.82 for $680 on April 11, 1988.

On each date, Cianscewski or his wife met an undercover government agent in the same McDonald's parking lot to complete the respective sales, which involved a total of twelve checks, seven not counting the checks that she sold on March 3. The Cianscewskis received the checks from a former thief turned government informant. At their joint trial, they each advanced an entrapment defense. A jury acquitted her of the March 3 charges, convicted him of all substantive charges, and convicted both of conspiracy. The face value of all the checks at issue is $9631.18, for which the Cianscewskis received $3210. Excluding the checks Cianscewski's wife sold on March 3, for which no conviction was obtained, the total face value of the remaining checks is $6504.73, for which Cianscewski received $2170.

Cianscewski's offense level was calculated from section 2F1.1 of the Guidelines, which governs fraud and deceit. ⁴ That guideline provides for a base offense level of six, to be increased by two for losses valued between $5000 and $10,000. In calculating the total amount of loss caused by Cianscewski's criminal activity, the district court included the checks sold by Cianscewski's wife on March 3 and valued all the checks at their face amount. As a result, it determined the total amount of loss to be $9631.18--near the top of the plus-two range for amount of loss. The district court increased Cianscewski's offense level by two more points because his offenses involved more than minimal planning, see Guidelines Sec. 2F1.1(b)(2)(A), and denied him a two-point reduction for acceptance of responsibility, see id. Sec. 3E1.1. These determinations would have placed Cianscewski's offense level at ten; however, the district court determined that the criminal livelihood provision, which prescribes an offense level of not less than 13, see id. Sec. 4B1.3, was applicable.

Cianscewski unquestionably has a Category VI criminal history, the highest that the guidelines employ. ⁵ A level 13 offense committed by a Category VI criminal yields a sentencing range of 33 to 41 months, see Guidelines Ch. 5, Pt. A, and the district court imposed a 41-month sentence.

On appeal, Cianscewski challenges (1) the applicability of the criminal livelihood provision; (2) the district court's method for calculating amount of loss; (3) the finding of more than minimal planning; and (4) the rejection of acceptance of responsibility. Each of these claims involves an assertedly incorrect application of the guidelines; thus, we have appellate jurisdiction by virtue of 18 U.S.C. Sec. 3742(a)(2).

II. Criminal Livelihood

The criminal livelihood provision applicable at the time of Cianscewski's sentencing provided:

If the defendant committed an offense as part of a pattern of criminal conduct from which he derived a substantial portion of his income, his offense level shall be not less than 13, unless Sec. 3E1.1 (Acceptance of Responsibility) applies, in which event his offense level shall be not less than 11.

Guidelines Sec. 4B1.3 (Oct. 1988 ed.). ⁶ Read literally, the provision's use of the word "portion," as opposed to simply "amount," seems to suggest that the guideline is applicable to Cianscewski, who, during the period of his present offenses, derived a "substantial portion" of his income (close to 100%) from criminal conduct. ⁷ Cianscewski, however, argues that the criminal livelihood provision was not intended to cover crimes that yield only insubstantial profits. In effect, he asks us to infer a minimum illicit profit requirement--measured in absolute amount--below which the provision is inapplicable, regardless of how high a "portion" of one's income is illicit. Despite the apparently plain meaning of the term "portion," we conclude that there are at least five reasons for doing so.

First, the geneology of the criminal livelihood provision suggests such an implied limitation. The criminal livelihood provision implements 28 U.S.C. Sec. 994(i)(2), ⁸ and the legislative history of section 994(i) makes clear that Congress derived that provision from the old special offender statutes, ⁹ which had prescribed enhanced punishment for any defendant whose "pattern" of criminal activity "constituted a substantial source of his income." ¹⁰ The special offender statutes defined "substantial source of income" in part as "a source of income which for any period of one year or more exceeds [2000 times the hourly] minimum wage." ¹¹ To be sure, section 994(i) and the criminal livelihood guideline speak of substantial "portion" where the special offender statutes spoke of substantial "source"; nonetheless, Congress indicated that that guideline should "embody[ ] the same considerations which are contained in the ... special offender statutes." S.Rep. No. 225, 98th Cong., 2d Sess. 120, reprinted in 1984 U.S.Code Cong. & Admin.News 3182, 3303.

Second, the application note to the criminal livelihood guideline, which states that "[t]his guideline is not intended to apply to minor offenses," suggests an implicit absolute threshold requirement. See Guidelines Sec. 4B1.3 application note 1 (Oct. 1988 ed.).

Third, a literal reading of the word "portion" as used in section 994(i) and the criminal livelihood guideline is difficult to reconcile with 28 U.S.C. Sec. 994(d), which requires that the guidelines be "entirely neutral as to the ... socioeconomic status of the offenders." To the extent that "portion" means "portion," as opposed to "amount," a theft of a given sum of money would qualify its perpetrator for potentially harsher treatment under the criminal livelihood guideline if and only if he earned a sufficiently small amount of legitimate income during the relevant period that his "portion" of illegitimate income was correspondingly large. Reading a minimum absolute threshold into the criminal livelihood guideline does not eliminate the apparent tension between sections 994(i) and 994(d), but does reduce it. ¹²

Fourth, the Sentencing Commission has since amended the criminal livelihood guideline, effective November 1, 1989. The amendment replaces the phrase "from which he derived a substantial portion of his income" with the phrase "engaged in as a livelihood" and adds the following application note:

"Engaged in as a livelihood" means that (1) the defendant derived income from the pattern of criminal conduct that in any twelve-month period exceeded 2,000 times the then existing hourly minimum wage under federal law; and (2) the totality of circumstances shows that such criminal conduct was the defendant's primary occupation in that twelve-month period.

See Guidelines Sec. 4B1.3 (Nov. 1989 ed.). Of course this amendment was not yet applicable at the time of Cianscewski's sentencing. Nonetheless, to the extent that the amendment resurrects the minimum threshold requirement from the old special offender statutes, it can fairly be read to clarify, rather than alter, the standard in the old guideline. Therefore, "we may give it substantial weight in determining the meaning of the existing guideline." United States v. Ofchinick, 877 F.2d 251, 257 n. 9 (3rd Cir.1989). ¹³

Finally, every court to have considered the issue has concluded that the old criminal livelihood provision, despite its vague "substantial portion" language, does in fact contain a minimum absolute threshold. See United States v. Luster, 889 F.2d 1523, 1527 (6th Cir.1989); United States v. Nolder, 887 F.2d 140, 142 (8th Cir.1989); United States v. Rivera, 694 F.Supp. 1105, 1106-08 (S.D.N.Y.1988); United States v. Kerr, 686 F.Supp. 1174, 1177-78 (W.D.Pa.1988). ¹⁴

For all of these reasons, we conclude that the version of the criminal livelihood guideline in effect on the date Cianscewski was sentenced is inapplicable to someone whose "income" from illicit activity during any twelve-month period is below 2000 times the hourly minimum wage, i.e. $6700. ¹⁵ The most...