U.S. v. Fine

• Decision Date: 14 September 1992
• Docket Number: No. 90-50280,90-50280
• Citation: 975 F.2d 596
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Robert FINE, Jr., Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 596

975 F.2d 596

UNITED STATES of America, Plaintiff-Appellee, v. Robert FINE, Jr., Defendant-Appellant.

No. 90-50280.

United States Court of Appeals Ninth Circuit.

Argued and Submitted June 18, 1992.

Decided Sept. 14, 1992.

Michael J. Treman, Santa Barbara, Cal., for defendant-appellant.

Stephen A. Mansfield, Asst. U.S. Atty., Los Angeles, Cal., for plaintiff-appellee.

Brian H. Getz, San Francisco, Cal., for Northern California Criminal Trial Lawyers Ass'n, as amicus curiae.

Appeal from the United States District Court for the Central District of California.

Before: WALLACE, Chief Judge, and HUG, SCHROEDER, FLETCHER, FARRIS, D.W. NELSON, BEEZER, WIGGINS, KOZINSKI, THOMPSON, and KLEINFELD, Circuit Judges.

KLEINFELD, Circuit Judge:

We revisit here the issue of what conduct is relevant to a sentence imposed under the sentencing guidelines. Fine was indicted for fourteen counts relating to mail fraud. He pleaded guilty to two. The other twelve were dismissed. The sentencing guidelines make the prison time depend on the amount of money involved in the scheme. Can the money involved in the twelve dismissed counts be considered? Yes.

We had, in the panel decision which we now reconsider, reversed the sentence on two grounds, one of which was that the court had improperly aggregated the amount of the loss in the dismissed counts with the amount in the two counts which Fine admitted. United States v. Fine, 946 F.2d 650, 651-52 (9th Cir.1991). The panel decision interprets United States v. Castro-Cervantes, 927 F.2d 1079 (9th Cir.1990) (amended opinion), in a way which puts it in conflict with United States v. Turner, 898 F.2d 705 (9th Cir.), cert. denied, 495 U.S. 962, 110 S.Ct. 2574, 109 L.Ed.2d 756 (1990), and in following that construction of Castro-Cervantes, the panel reached a conclusion which we are unable to reconcile with Turner. Our reconsideration en banc is limited to the question of whether the district court could properly treat the amount of loss in the dismissed counts as relevant conduct for sentencing purposes. We read Castro-Cervantes more narrowly than the panel, and see no intra-circuit conflict between Castro-Cervantes and Turner, so we need not reevaluate Castro-Cervantes. We reconsider and withdraw part I of the panel decision and affirm the district court judgment with regard to relevant conduct. ¹

I. Facts.

Fine stole money by pretending to be someone else, borrowing money in the other person's name and mortgaging the other person's property as security, and getting the other person's check. Fine admitted the parts of the fraud involving Anosh Toufigh. He borrowed $195,000 from Imperial Home Mortgage by signing a note and other loan documents in the name of Anosh Toufigh, and using the real Mr. Toufigh's previously unencumbered real estate as security for the loan. The real Mr. Toufigh knew nothing about the transaction. Imperial Home Mortgage recorded a deed of trust against the real Mr. Toufigh's property to secure $195,000, and sent a check for $113,550, evidently the loan amount less various fees and advance repayment installments, made out to Mr. Toufigh at the mail drop used by Fine. The check cleared, but the real Mr. Toufigh did not get the money.

The dismissed counts of the indictment charged that Fine had done the same thing, using the same technique, with property of Robert Rosenberg and Jacob Maarse. The loss caused by Fine, if only the Toufigh loan were counted, would be $195,000. If the Rosenberg and Maarse loans are counted too, then the loss was $613,000. Fine used lenders who did not require him to come in personally to sign the papers. He got caught because a lender noticed that the same addresses, phone numbers, occupation, employers' addresses and other information were used in the Maarse, Toufigh and Rosenberg loan applications. The lender caused official surveillance to be in place when Fine picked up the Maarse check at his mail drop and shouted to his companion in the car, "I've got it, the check is here." ²

Fine was indicted for ten counts of mail fraud, in violation of 18 U.S.C. § 1341, and four counts of use of fictitious names for the purpose of perpetrating a fraud, in violation of 18 U.S.C. § 1342. He pleaded guilty to two counts, the Toufigh mail fraud and use of Toufigh's name, pursuant to a plea agreement under Federal Rule of Criminal Procedure 11(e)(1)(A). The government promised to dismiss the remaining counts of the indictment, but there were "no other promises included as part of this agreement." At the change of plea proceeding, the judge advised Fine of the entire scheme as charged in the indictment, including the Rosenberg and Maarse frauds. Fine's attorney said "[t]he nature of the plea only goes to two counts which relate to Mr. Toufigh. It's my client's intention only to admit his involvement with regard to that specific individual and two counts...." Government counsel responded that the other counts "relate to the same mail fraud scheme." The judge made it clear that Fine was not by his plea admitting the facts charged regarding the Rosenberg and Maarse loans, but that the sentencing guidelines would apply, with a result not then predictable. The judge told Fine that he could be sentenced to a maximum of five years on each count, consecutively.

The court found at sentencing that Fine had applied for the Rosenberg and Maarse loans as part of his fraudulent scheme, so all $613,000 should be used to determine the offense level, not just the $195,000 obtained by using Toufigh's name. Fine objected to considering fraud other than that in the two counts to which he pleaded guilty, but did not offer any evidence contradicting the account in the presentence report of the other fraud. The judge found, based upon the presentence report, that the base offense level including the loss alleged in the dismissed counts was appropriate. The evidence showed that Fine committed the Rosenberg and Maarse frauds, and Fine does not claim otherwise, or suggest error in the factual finding, even though he did not plead guilty to those counts. His challenge is legal, not factual, and goes to whether the court could properly consider the dismissed counts, even if the court properly found that he committed the crimes charged in them.

Fine was sentenced to 50 months imprisonment on each count concurrently, plus fine, restitution and supervised release. The offense level under the guidelines was 12 if the loss was $100,000 to $200,000, or 14 if $500,000 to $1,000,000. The two level difference, after the other computations, caused Fine to be sentenced at offense level 18, criminal history category IV, for a sentencing range of 41 to 51 months. ³ Without the two levels for the Rosenberg and Maarse money, the range would have been 33 to 41 months. The other counts were dismissed pursuant to the agreement, after sentence was imposed.

II. Standard of Review.

The legality of a sentence is reviewed de novo. United States v. Turner, 898 F.2d 705, 708 (9th Cir.), cert. denied, 495 U.S. 962, 110 S.Ct. 2574, 109 L.Ed.2d 756 (1990). We accept the district court's findings of fact unless they are clearly erroneous, and give due deference to the district court's application of the guidelines to the facts. 18 U.S.C. § 3742(e); Turner, 898 F.2d at 708.

III. Relevant Conduct Under the Guidelines.

The guidelines, interpreted in light of the application notes, are unambiguous. ⁴ The fraud section of the guidelines says, in an application note relating to multiple count indictments, that "[t]he cumulative loss produced by a common scheme or course of conduct should be used in determining the offense level, regardless of the number of counts of conviction." U.S.S.G. § 2F1.1, comment. (n. 6) (emphasis added). The note cross references Chapter 3, Part D, which concerns grouping of multiple counts. The intended loss is used if larger than the actual loss, as when the defendant fails in all or part of the fraud. U.S.S.G. § 2F1.1, comment. (n. 7).

The cross reference to Chapter 3, Part D provides a direction that counts are grouped together if "the offense level is determined largely on the basis of the total amount of harm or loss, the quantity of a substance involved, or some other measure of aggregate harm...." U.S.S.G. § 3D1.2(d). The grouping provisions of the guidelines generally provide that some offenses are accumulated and treated as a single offense even if charged in multiple counts. U.S.S.G. Ch. 3, Part D, introductory commentary. The grouping guideline lists the kinds of offenses to be grouped, including fraud under § 2F1.1.

The relevant conduct guideline, § 1B1.3, controls whether the dismissed counts should be used to measure the amount of loss caused by Fine's fraud. It provides that where the guideline specifies more than one base offense level, as the fraud guideline does based on amount of money, and grouping is required under § 3D1.2(d), the offense level must be determined by "all such acts and omissions that were part of the same course of conduct or common scheme or plan as the offense of conviction." U.S.S.G. § 1B1.3(a)(2) (emphasis added). The application note explicitly provides that "multiple convictions are not required " for acts to be counted in "such acts or omissions." U.S.S.G. § 1B1.3, comment. (n. 2) (emphasis added).

The relevant conduct provisions quoted above, taken together with the fraud and grouping provisions, mean that conduct which was part of the scheme is counted, even though the defendant was not convicted of crimes based upon the related conduct. The emphasized words in the fraud application note, "regardless of the number of counts of conviction," necessarily imply that the loss to be counted is not limited by the counts of conviction. The words "as the offense of conviction" in the relevant conduct guideline necessarily imply that acts which are not included in the counts of conviction may be relevant conduct if the...