U.S. v. Kohli
| Decision Date | 14 April 1997 |
| Docket Number | Nos. 94-50648,94-50650,s. 94-50648 |
| Citation | 110 F.3d 1475 |
| Parties | 97 Cal. Daily Op. Serv. 2707, 97 Daily Journal D.A.R. 4799 UNITED STATES of America, Plaintiff-Appellee, v. Navtej KOHLI, aka Tej Kohli, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Edward Charles MYERS, aka Charles Edward Myers, aka Charles Myers, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Richard Hanson, Allen, Hansen & Maybrown, Seattle, Washington, Loretta S. Shartsis, Pine Mountain, California, for defendants-appellants.
Peter S. Spivack and Christopher M.E. Painter, Assistant United States Attorneys, Los Angeles, California, for plaintiff-appellee.
Appeals from the United States District Court for the Central District of California Before KOZINSKI and LEAVY, Circuit Judges, and SCHWARZER, * Senior District Judge.
John G. Davies, District Judge, Presiding. D.C. Nos. CR-93-00298-JD(CT)-1, CR-93-00298-JD(CT)-2.
FACTS AND PROCEDURAL BACKGROUND
Defendants Navtej Kohli and Charles Myers were charged with conspiracy and mail fraud in executing the so-called Prime Cardinal scheme to defraud bona fide sellers of residential property by fraudulently inducing them to sell to strawbuyers, by compensating the sellers in part with payment notes on which the defendants later defaulted, and by fraudulently inducing lenders to make loans on the properties after inflated appraisals. Kohli and Myers diverted the loan proceeds to their own use and defaulted. In addition, Kohli was charged with mail fraud in executing the so-called Argent Alliance scheme by fraudulently soliciting funds from prospective investors in a project to convert apartment buildings into condominiums and misappropriating the funds.
After entering into a plea agreement with the government, Kohli pleaded guilty to all eleven counts in the Third Superseding Information. Count One charged a conspiracy to commit mail fraud. See 18 U.S.C. § 371. Counts Two through Eight charged mail fraud offenses in connection with the Prime Cardinal scheme. See 18 U.S.C. § 1341. Counts Nine through Eleven charged mail fraud offenses in connection with the Argent Alliance scheme. See id. The base offense level for fraud under the U.S. Sentencing Guidelines Manual section 2F1.1(a) (1995) [hereinafter "U.S.S.G."] is six; the district court imposed a fifteen-level enhancement for causing a loss of more than $10,000,000, see U.S.S.G. § 2F1.1(b)(1)(P), a two-level enhancement for more than minimal planning and more than one victim under Guideline section 2F1.1(b)(2), a four-level enhancement for having individually derived in excess of $1,000,000 from a crime that affected a financial institution, see U.S.S.G. § 2F1.1(b)(6)(B), and a three-level enhancement for role in the offense under Guideline section 3B1.1(b). After deducting three levels for acceptance of responsibility, the court arrived at a total offense level of twenty-seven, which, based on Kohli's criminal history category of I, resulted in a sentencing range of 70 to 87 months. Accepting the government's recommendation, the court sentenced Kohli to eighty months and ordered restitution of $5,000,000.
Myers, the junior partner in the scheme, also entered into a plea agreement and pleaded guilty to the conspiracy count and to seven counts of mail fraud in the Second Superseding Indictment. The court computed his sentence by increasing the base offense level of six by thirteen levels for having caused a loss of more than $2,500,000, see U.S.S.G. § 2F1.1(b)(1)(N), by four levels for having derived more than $1,000,000 from a crime that affected a financial institution, see U.S.S.G. § 2F1.1(b)(6)(B), by two levels for more than minimal planning, see U.S.S.G. § 2F1.1(b)(2), and by three levels for "manag[ing] or supervising" the conspiracy. See U.S.S.G. § 3B1.1(b). After deducting three levels for acceptance of responsibility, the court arrived at an offense level of twenty-five and a criminal history category of I; the applicable sentencing range was fifty-seven to seventy-one months. At the government's recommendation, the court sentenced Myers to sixty months and ordered restitution of $1,600,000.
Both defendants appeal their sentences. We have jurisdiction under 18 U.S.C. section 3742(a) and affirm in part and reverse in part.
We examine for clear error the district court's factual findings underlying a sentence. United States v. Mullins, 992 F.2d 1472, 1479 (9th Cir.), cert. denied, 509 U.S.
905, 113 S.Ct. 2997, 125 L.Ed.2d 691, 510 U.S. 994, 114 S.Ct. 556, 126 L.Ed.2d 457 (1993). We review interpretations of the Sentencing Guidelines de novo. Id. at 1478-79.
Guideline section 2F1.1(b)(6)(b) provides a four-level enhancement "[i]f the offense ... affected a financial institution and the defendant derived more than $1,000,000 in gross receipts from the offense." U.S.S.G. § 2F1.1(b)(6)(B). Both defendants contend that the $1,000,000 must be derived from a single financial institution. 1 The plain language of the guideline refutes the contention. It requires only (1) that the offense "affected a financial institution," and (2) that the defendant derived more than $1,000,000 "from the offense." There is no basis for requiring that the $1,000,000 be derived from a single financial institution. Application Note 16 confirms the broad sweep of this guideline:
"Gross receipts from the offense" includes all property ... which is obtained directly or indirectly as a result of such offense.
The critical factor in the application of this enhancement is that it turns on the culpability of the individual defendant. Application Note 11 states that the language of subsection (b)(6)(B) "generally means that the gross receipt to the defendant individually, rather than to all participants, exceeded $1,000,000." U.S.S.G. § 2F1.1(b)(6)(B) .16. Thus, that the defendants were convicted of conspiracy does not impose joint liability on them for purposes of the financial institutions enhancement. Cf. Pinkerton v. United States, 328 U.S. 640, 643-44, 66 S.Ct. 1180, 1182, 90 L.Ed. 1489 (1946) (). The sentencing court must determine the amount derived from the offense by each defendant individually. United States v. Millar, 79 F.3d 338, 346 (2d Cir.1996). It follows that in making that determination, no part of the amount found to have been derived by one defendant can be counted as having been derived by another defendant.
Relying on the Presentence Report, the district court found that the elements necessary for the application of Guideline section 2F1.1(b)(6)(B) existed. The Presentence Report states that a breakdown of the proceeds to Kohli from the fraudulent Prime Cardinal scheme shows that he received $1,696,979.24. Kohli contends that "there is no evidence that [he] personally derived anywhere close to that [$1,000,000] amount."
The Presentence Report adopts the findings in the report of the government's expert witness, FBI Special Agent Joel D. Brillhart, who made an investigation and analysis of bank real estate and loan records for the twelve transactions constituting the Prime Cardinal scheme. That analysis attributed to Kohli loan proceeds in the amount of $1,696,979.24 distributed directly to him or to an entity controlled by him out of each escrow, or delivered to him by Myers.
Kohli takes issue with the Brillhart analysis by arguing that it ignores subsequent transfers from Kohli to Myers and, in lesser amounts, to other business associates. Spreadsheets submitted by Kohli's expert, William E. McAleer, indicate that substantial transfers did occur among Kohli and his coconspirators-but regardless of the amount that Kohli disbursed, there is no doubt that he himself derived in excess of $1,000,000 from the enterprise. 2 As noted above, the The government attributed to Kohli not only funds received directly from escrow but also funds delivered to him by Myers. On the record, the government was entitled to do so, but it could not then attribute the same funds to Myers as well.
definition of "gross receipts" encompasses funds controlled by the defendant before he compensates his cohorts. There is ample evidence to support the district court's finding that Kohli derived more than $1,000,000 from the offense. See United States v. Wilson, 900 F.2d 1350, 1354 (9th Cir.1990) ().
The court made no finding with respect to the amount derived by Myers from the offenses. The Presentence Report states that he received $598,348.92. That amount was taken from the Brillhart report, which found that "Myers received a total of approximately $1,519,989.16 of which he transferred $921,640.24 to Kohli, leaving him with $598,348.92 of the loan proceeds."
In its brief, the government now argues that Myers received $1,519,989.16 of the fraudulent loan proceeds but does not explain why we should reject the calculation offered in the district court. If the government wishes to attribute to Myers funds he delivered to Kohli, it would have to show that those funds were not counted in the calculation of the amount derived by Kohli; the record shows, to the contrary, that its analysis of funds derived by Kohli includes funds received from Myers.
The government also argues that "defendants" received properties having an appraised value at the time of foreclosure of at least $6,000,000. As noted above, however, the guideline requires proof that the amount derived by "the defendant individually, rather than all participants, exceeded $1,000,000."...
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