U.S. v. Gates

• Decision Date: 24 August 2006
• Docket Number: No. 05-1818.,No. 05-2006.,05-1818.,05-2006.
• Citation: 461 F.3d 703
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Kristopher Adam GATES (05-1818) and Bradley William Conley (05-2006), Defendants-Appellants.
• Court: U.S. Court of Appeals — Sixth Circuit

461 F.3d 703

UNITED STATES of America, Plaintiff-Appellee, v. Kristopher Adam GATES (05-1818) and Bradley William Conley (05-2006), Defendants-Appellants.

No. 05-1818.

No. 05-2006.

United States Court of Appeals, Sixth Circuit.

Argued and Submitted: July 26, 2006.

Decided and Filed: August 24, 2006.

ARGUED:

Kenneth P. Tableman, Grand Rapids, Michigan, for Appellant. Daniel Y. Mekaru, Assistant United States Attorney, Grand Rapids, Michigan, for Appellee.

ON BRIEF:

Kenneth P. Tableman, Grand Rapids, Michigan, Edwin L. Hettinger, Hettinger & Hettinger PC, Portage, Michigan, for Appellants. Daniel Y. Mekaru, Assistant United States Attorney, Grand Rapids, Michigan, for Appellee.

Before: BATCHELDER and McKEAGUE, Circuit Judges; ACKERMAN, District Judge.^*

OPINION

McKEAGUE, Circuit Judge.

Defendants Gates and Conley appeal their sentences following the entry of guilty pleas to charges arising from their involvement in a counterfeit check cashing scheme. For the reasons that follow, we affirm both sentences.

I. BACKGROUND

Gates and Conley participated in an elaborate counterfeit check cashing scheme involving as many as seven individuals. The scheme involved stealing outgoing mail containing checks, creating counterfeit checks using the information procured from the stolen checks, stealing identifications, and then cashing the counterfeit checks at a bank using the stolen identifications. The scheme took place in Michigan, Indiana, Missouri, and Florida.

A. Appellant Gates's Role

Gates stole outgoing mail from mailboxes in order to obtain bank routing and account numbers from checks. The information obtained from the stolen checks was used to produce counterfeit checks using a computer check-writing program. Gates also admitted to recruiting two other individuals, co-defendants Bradley Heistand and Brent Vreeland, to go into the various banks and cash the counterfeit checks. Testimony from one other individual, Henry Goble, indicates that Gates attempted persistently, but unsuccessfully, to recruit him into the scheme as well.

Gates agreed to plead guilty to Count One of the indictment charging him with conspiring to open U.S. Mail, using stolen identification, and committing bank fraud, in violation of 18 U.S.C. § 371. In exchange for his plea and his cooperation in the investigation, the Government agreed to dismiss the remaining counts of the indictment against Gates, to not oppose a request for reduction of the offense level for acceptance of responsibility, and to consider filing a motion for the reduction of his sentence pursuant to the Sentencing Guidelines § 5K1.1, if he fully cooperated and materially and substantially assisted the Government in the investigation or prosecution of others.

During the sentencing hearing, Gates objected to the Presentence Investigation Report's (PSR) three-level enhancement for his role as a manager in the offense. The PSR indicated that while Gates was not an organizer or a leader, he did serve as a manager by recruiting individuals and directing them to cash the counterfeit checks. The district court overruled Gates's objection, finding that there were sufficient facts to support Gates's role as a manager and that because five or more people were involved, a three-point enhancement under § 3B1.1 was appropriate.

Gates continued to object, asking the court to reconsider. The court emphasized Gates's role as a recruiter of two of the co-defendants and his persistent attempt to recruit Goble, noting that Gates did not just steal checks, but was in between the organizers and those that cashed the checks.

Gates also noted for the record his written objection to fact-finding by a preponderance of the evidence, urging that although Sixth Circuit law is to the contrary, United States v. Davis, 430 F.3d 345 (6th Cir.2005), suggests that facts that cause an increase in the offense level should be found beyond a reasonable doubt. The district court clarified for the record that it had found the facts supporting the sentence enhancement by a preponderance of the evidence, not beyond a reasonable doubt.

Gates also objected to the PSR's finding that he was responsible for $30,549 in loss based on all checks that were cashed in Missouri, and all checks cashed by co-defendant Heistand. Gates stated that he was not aware of the last three checks cashed by Heistand, or any of the Missouri checks. He reminded the court that he admitted to having received between $4500 and $5000 at his plea hearing.

The court overruled the objection to the loss enhancement recommendation in the PSR, but stated that it would not consider any statements given by a confidential informant used in the case. The court found that based on the facts set out in the PSR, most of which came from co-conspirators or Gates himself, it was reasonably foreseeable to Gates that Hiestand would continue to cash checks using the same scheme. In so deciding, the court pointed out Gates's role in procuring the Missouri checks, and assisting others in cashing them.

The court found that Gates had an offense level of twelve, based on a Base Offense Level of six, a six-level enhancement for a loss of $30,549, a two-level enhancement for use of an unauthorized access device, a three-level enhancement for role as a manager, a three-level decrease for acceptance of responsibility, and a two-level decrease for cooperating with the investigation and assisting in the prosecution of others under § 5K1.1. Additionally, the court considered the § 3553(a) factors. Based on an offense level of twelve, and a criminal history category of VI (because of numerous prior convictions), the court sentenced Gates to thirty-two months imprisonment, three years of supervised release, and restitution of $17,795.

B. Appellant Conley's Role

Conley was an organizer of the scheme, and he recruited Gates into the plan. Conley was also responsible for obtaining stolen identifications used for cashing the counterfeit checks. According to testimony from co-conspirators, Conley went to bars frequented by college students. Once there, he would seek out patrons that resembled the individuals who would later cash the checks. He would follow the students home, enter their homes, and steal their identifications.

As part of his plea agreement with the Government, Conley agreed to plead guilty to Counts One, Two, Six, and Thirty-Seven of the indictment. Count One charged Conley with conspiring to open the U.S. Mail in violation of 18 U.S.C. § 371; Count Two with obstructing correspondence in violation of 18 U.S.C. § 1702; Count Six with using stolen identification in violation of 18 U.S.C. § 1028; and Count Thirty-Seven, committing bank fraud in violation of 18 U.S.C. § 1344. In exchange for his guilty plea and agreeing to cooperate with the investigation, the Government agreed to move to dismiss the remaining counts of the indictment, to not oppose a request for reduction of his offense level for acceptance of responsibility, and to consider filing a motion for reduction of sentence pursuant to sentencing guidelines § 5K1.1, if Conley fully cooperated and materially and substantially assisted the Government in the investigation or prosecution of others. Conley acknowledged, as part of the plea agreement, that the determination of whether substantial assistance was provided was in the sole discretion of the U.S. Attorney's Office, and that the Government was not promising to file such a motion.

The U.S. Attorney's office did not file a § 5K1.1 motion for a downward departure for substantial assistance to the authorities, choosing instead to file a motion for an upward departure based on the number of victims of the crime and Conley's prior criminal history. JA 205.¹ Conley opposed the motion on the basis that it deprived him of the benefit of his plea bargain and "[left] him out in the cold."

After considering the § 3553(a) factors, the district court found a total offense level of twenty-one. The court determined that Conley had a Base Offense Level of six, and added a ten-level enhancement for an amount of loss of $183,755, a two-level enhancement for more than ten victims, a two-level enhancement for the production or trafficking of unauthorized access devices, a four-level enhancement for Conley's role as an organizer or leader of the conspiracy, and a three-level decrease for acceptance of responsibility. The court found that Conley had a criminal history category of VI, based on numerous prior convictions.

Despite the Government's motion for an upward departure, based on the number of victims, the prior criminal history, and the nature of the crimes, the court sentenced Conley within the original guideline calculation. Conley was sentenced to ninety-six months' imprisonment, sixty months on Counts One and Two, and ninety-six months on Counts Six and Thirty-Seven, to run concurrently; three years supervised release on Counts One, Two and Six, and five years on Count Thirty-Seven, to run concurrently; and restitution in the amount of $129,215.

II. ANALYSIS

Gates brings three issues on appeal. First, he argues that the district court erred in using a preponderance of the evidence standard when it engaged in judicial fact-finding in order to determine his sentence. He claims that the preponderance standard violated both his Fifth Amendment due process rights and his Sixth Amendment right to jury trial. Second, he argues that even under a preponderance of the evidence standard, there was insufficient evidence for the court to find that he acted as a manager or supervisor of the scheme. Third, he argues that the doctrine of constitutional avoidance requires a beyond a reasonable doubt standard for judicial fact-finding at sentencing.

Conley advances one issue on appeal. He raises a claim of prosecutorial misconduct, because he entered into a plea agreement with the possibility of a § 5K1.1 motion for a downward departure based on substantial...