U.S. v. Keleta

• Decision Date: 23 January 2009
• Docket Number: No. 07-3021.,07-3021.
• Citation: 552 F.3d 861
• Parties: UNITED STATES of America, Appellee v. Kesetbrhan M. KELETA, Appellant.
• Court: U.S. Court of Appeals — District of Columbia Circuit

552 F.3d 861

UNITED STATES of America, Appellee v. Kesetbrhan M. KELETA, Appellant.

No. 07-3021.

United States Court of Appeals, District of Columbia Circuit.

Argued September 4, 2008.

Decided January 23, 2009.

Appeal from the United States District Court for the District of Columbia (No. 05cr00371-01).

Tony Axam Jr., Assistant Federal Public Defender, argued the cause for appellant. With him on the briefs was A.J. Kramer, Federal Public Defender.

Leslie Ann Gerardo, Assistant U.S. Attorney, argued the cause for appellee. With her on the brief were Jeffrey A. Taylor, U.S. Attorney, and Roy W. McLeese III, Florence Pan, and Jay I. Bratt, Assistant U.S. Attorneys.

Before: SENTELLE, Chief Judge, and HENDERSON, Circuit Judge, and WILLIAMS, Senior Circuit Judge.

Opinion for the Court filed by Chief Judge SENTELLE.

Dissenting opinion filed by Senior Judge WILLIAMS.

SENTELLE, Chief Judge:

Kesetbrhan M. Keleta was convicted of operating a money-transmitting business without a license, in violation of 18 U.S.C. § 1960. He was sentenced pursuant to United States Sentencing Guidelines §§ 2S1.3 and 2B1.1. At sentencing, the district court denied reduction of Keleta's sentence in accordance with § 2S1.3(b)(3), a "safe harbor" provision permitting a sentence reduction when specified conditions are met. On appeal he argues that his sentence pursuant to Sentencing Guidelines §§ 2S1.3 and 2B1.1 was unreasonable, that the district court erred in denying him safe harbor, and that his counsel was ineffective for failing to object to alleged shifts in burdens of proof and for failing to present safe harbor evidence.

Because we conclude that Keleta's sentence was reasonable, that there was no error in denying him safe harbor, and that his attorney was not ineffective, we affirm the judgment of the district court.

Background

The Embassy of Eritrea established a money-transmitting business in Washington, D.C., in the mid-1990s to enable Eritrean citizens living in the United States to send money back to Eritrea. In August 2000, the business was taken over by a company called "Himbol Financial Services." Himbol enabled customers to send money not only to Eritrea but also to Eritrean nationals in other parts of the world. In 2001 Himbol hired the appellant, Kesetbrhan M. Keleta, to manage the business. One of his duties was to obtain a license for the money-transfer business. He filed a license application, which was pending between May 2001 and February 2002. Keleta left Himbol's employ at the end of 2002. In October 2005, he was charged with two counts of violating 18 U.S.C. § 1960, which prohibits conducting, controlling, managing, supervising, or directing an unlicensed money-transmitting business. The first count related to conduct occurring between March 2001 and October 25, 2001. Reflecting amendment of the statute on October 26, 2001, the second count related to conduct occurring between October 26, 2001, and September 2002. Following a jury trial, Keleta was convicted on both counts.

The district court sentenced Keleta pursuant to § 2S1.3 (a)(2) of the United States Sentencing Guidelines ("USSG" or "Guidelines"). That section provides for a base offense level of 6 plus additional levels "corresponding to the value of the funds." Those additional levels are to be determined using the table in § 2B1.1 of the Guidelines, with increased levels depending upon the "loss" incurred. The government offered evidence that, during the time of alleged illegal conduct, Keleta had sent or authorized over $10 million in wire transfers. This amount under § 2B1.1 resulted in an enhancement of 20 levels, bringing Keleta's base offense level to 26. Keleta argued to the district court that there was no basis for using the table in § 2B1.1 because there was no "loss" in his case. The district court disagreed, stating that loss to a victim was not an issue in punishing violations of 18 U.S.C. § 1960, which were "more akin to money laundering." The district court noted that the Guidelines range at this point was 63 to 78 months.

The court also considered whether USSG § 2S1.3(b)(3), the so-called "safe harbor" provision, applied. Under that provision, if the defendant did not act with reckless disregard of the source of the funds, the funds were the proceeds of lawful activity, and the funds were to be used for a lawful purpose, then the base offense level was to be decreased back to 6. The court found, however, that Keleta did not meet any of these criteria and therefore denied him a sentence reduction under the "safe harbor" provision.

The court gave Keleta a 3-level reduction for acceptance of responsibility as well as an additional 2-level reduction for mitigating circumstances, including Keleta's belief that he would receive some protection from the Eritrean Embassy for his involvement with Himbol, as well as Keleta's belief that he thought he was helping his country and those who lived there. His base offense level was therefore 21, with a corresponding sentencing range of 37 to 46 months. The court then subtracted six months, for Keleta's status as a deportable alien, from the bottom of the range. His final sentence was therefore 31 months.

Discussion

Keleta now appeals his sentence, arguing that it was unreasonable, that the district court improperly denied him the benefit of the safe harbor provision, and that his lawyer at sentencing was ineffective.

Unreasonable sentence

Keleta was convicted of violating 18 U.S.C. § 1960(b)(1)(A) and (B). In determining Keleta's base offense level for sentencing, the district court applied USSG § 2S1.3(a)(2). That section calls for a base offense level of "6 plus the number of offense levels from the table in § 2B1.1 ... corresponding to the value of the funds." Because there was testimony presented at trial that the value of the funds transferred by Keleta was approximately $10 million, Keleta's offense level under the table in § 2B1.1(b)(1) was increased by 20 points. USSG § 2B1.1(b)(1)(K). Keleta objected to any increase under § 2B1.1(b)(1), noting that that section specifically refers to increases in the offense level for specific amounts of "loss" and there was no loss involved in the funds he had transferred. At the sentencing colloquy the district court rejected Keleta's argument, stating:

Loss to a victim is not a requirement. Loss is clearly not an issue in these 1960 transaction[s]. They are more akin to money laundering. And the table in [§]2B1 is used really only to indicate the levels to be increased by the funds.

Keleta's primary focus on this appeal is the district court's "akin to money laundering" statement. That statement shows, he argues, that the court's rationale for using the value of the transferred funds to increase his sentence was to equate his crime to money laundering. But, he asserts, money laundering was not a part of the nature and circumstances of his crime, contending that money laundering is "a specific intent crime" and the subsections of 18 U.S.C. § 1960 under which he was convicted have a much narrower focus than general money laundering statutes. He asserts that those subsections were enacted to punish businesses that fail to register, not to punish the actual transfer of money. He further asserts that in 2001 Congress amended 18 U.S.C. § 1960 to add a provision for punishing money laundering, subsection (b)(1)(C), and that this addition indicates that Congress did not intend to use the licensing and registration provisions of the subsections he was convicted under-i.e., (b)(1)(A) and (b)(1)(B)-to punish defendants for the value of the funds transferred.

Given his individual facts and circumstances, Keleta argues that his sentence was not reasonable. He notes that in United States v. Booker, 543 U.S. 220, 125 S.Ct. 738, 160 L.Ed.2d 621 (2005), the Supreme Court directed sentencing courts to consider the factors set forth in 18 U.S.C. § 3553(a) in addition to any applicable Guidelines, and that among those factors are the nature and circumstances of the offense. Keleta claims that here the district court explicitly adopted the rationale that the nature and circumstances of his offense involved money laundering and the court thus incorporated the value of the funds from the table in § 2B1.1 in determining his base offense level. He asserts that the value of the funds he transferred had no relationship to the individual nature and circumstances of his crime of operating an unlicensed money-transmitting business. Consequently, he claims that any increase to his sentence based upon the value of the transferred funds was unreasonable.

Responding to Keleta's claim, the government contends that the district court in fact did not increase his sentence because of a presumption of money laundering. The government asserts that the district court's "akin to money laundering" remark was not a factual finding but rather was made in response to an argument raised by Keleta, and was only intended to explain why the table in § 2B1.1 is incorporated into § 2S1.3 when there is no loss to a victim. The government further argues that § 2S1.3 establishes a sentencing scheme for unlicensed money transmission which does not require proof that the monies involved in the offense be classified as laundered funds. The government finally contends that the district court did not assume that Keleta had engaged in money laundering, and that in fact the court discussed at sentencing the lack of evidence that Keleta was involved in funding terrorism and other illegal enterprises.

Regardless of the district court's use of the term "akin to money laundering," its calculation of Keleta's base offense level was correct. In Gall v. United States, ___ U.S. ___, 128 S.Ct. 586, 596, 169 L.Ed.2d 445 (2007), the Supreme Court explained that "a district court should begin all sentencing proceedings by correctly calculating the applicable Guidelines range." As the government notes, USSG...