U.S. v. Leonard

• Decision Date: 14 August 1995
• Docket Number: 93-2769 and 93-2778,Nos. 93-2768,s. 93-2768
• Citation: 61 F.3d 1181
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Richard LEONARD, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Rhonda KELLEY and Veronica McCracken, Defendants-Appellants. UNITED STATES of America, Plaintiff-Appellee, v. Alfred C. GREENE, Jr., Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1181

61 F.3d 1181

UNITED STATES of America, Plaintiff-Appellee, v. Richard LEONARD, Defendant-Appellant.

UNITED STATES of America, Plaintiff-Appellee, v. Rhonda KELLEY and Veronica McCracken, Defendants-Appellants.

UNITED STATES of America, Plaintiff-Appellee, v. Alfred C. GREENE, Jr., Defendant-Appellant.

Nos. 93-2768, 93-2769 and 93-2778.

United States Court of Appeals Fifth Circuit.

Aug. 14, 1995.

Richard Leonard, Oakdale, LA, pro se.

George D. Murphy, Asst. Federal Public Defender, Roland E. Dahlin, II, Federal Public Defender, Thomas S. Berg, Asst. Federal Public Defender, Houston, TX, for Kelley.

Sylvia Yarborough (court-appointed), Houston, TX, for McCracken.

Frank E. Sheeder, III, Charles W. Blau, Meadows, Owens, Collier, Reed & Coggins, Dallas, TX, for Greene.

Alfred C. Greene, Jr., Spring, TX, pro se.

James L. Powers, Paula C. Offenhauser, Asst. U.S. Attys., Gaynell Griffin Jones, U.S. Atty., Houston, TX, for U.S.

Appeals from the United States District Court for the Southern District of Texas.

Before KING and EDITH H. JONES, Circuit Judges, and KAZEN, District Judge. ^*

EDITH H. JONES, Circuit Judge:

In this consolidated appeal, we reject challenges to the convictions and sentencing of four operators and employees of a Houston-based telemarketing scam. Alfred Greene, owner and operator of the business, and Richard Leonard, manager of the phone room, both entered pleas of guilty to wire and mail fraud, conspiracy, and using a false name to further a scheme to defraud. They waived their right to jury trial and contested the money laundering counts at a bench trial. Greene was convicted on several counts whereas Leonard was found not guilty on the sole money laundering offense with which he was charged. Employees of the operation, Kelley and McCracken, contested all the fraud and money laundering offenses with which they were charged and, therefore, obtained a severance from Greene and Leonard and were tried before a jury. They were both convicted of conspiracy as well as wire and mail fraud. Finding no error, we affirm the convictions and sentencing decisions in every aspect.

I. BACKGROUND

The scheme itself was simple. Callers, hired by Greene and Leonard, used phone lines set up in a suite of small offices in the Houston area to contact elderly citizens located across the country and inform them that their names had been selected by a committee to receive one of four awards. These individuals, whose identities had been purchased from a mail order company, were read to from a pre-designed script and told In fact, there was no contest, there was no drawing, there was no committee, and the victims had not sent in entry cards to which the script referred. The scheme also included a follow-up letter to the victim referring to the phone call and repeating the "good news" that a prize had been won. This letter was designed to lull the victim into a sense of satisfaction with the contest. Later, a box of cheap cosmetics was delivered to the victim for the same purpose. No one ever received anything other than a $15.00 pendant. In effect, the victims each bought a $15.00 pendant for almost $400.00. By the time the FBI executed a search warrant at the office of Promotional Advertising Concepts, the business name of the operation, the scheme had reeled in 497 victims and grossed close to $200,000.00.

                that they had already been chosen to receive either first prize of $15,000.00 cash;  second prize consisting of a diamond and sapphire pendant;  third prize which was a large-screen Sony television;  or, fourth prize consisting of $1,000.00 cash.  The pendant, the only prize ever given out, was designated as second prize so that the victim would think it the second-most valuable item after the $15,000.00.  In fact, a portion of the script anticipated questions as to the value of the pendant and was designed to mislead the person to believe that the jewelry, later appraised for $15.00, was worth between $2,000.00 and $2,500.00.  To obtain the prize, the victim was informed that he or she had to pay $395.50.  This money, the listeners were told, was for "promotional fees," "shipping and handling," "registration and processing," and "buying soap." 1  To reduce the chances of the victim's changing his or her mind, or a family member's coming home and extinguishing the deal, Federal Express was dispatched to pick up the $395.50 check shortly after the phone call
                

II. DISCUSSION

A. Greene

Greene first contends that the district court violated his constitutional rights by considering evidence in his bench trial which was admitted during the jury trial of Kelley and McCracken. Greene suggests that the district judge promised he would not consider evidence that he had heard during the jury trial of the severed codefendants. A fair reading of the exchange between counsel and the court indicates, however, that what was really contemplated was a "divorce" between the trials on the merits and not a complete ban for sentencing purposes. Nothing in the record suggests that the district court considered any evidence from the first trial in its determination of Greene's guilt of money laundering.

Further, at sentencing, Greene did not object to the court's observations concerning the elderly victims who testified at the first trial, so he must now establish "plain error." United States v. Bullard, 13 F.3d 154, 159 (5th Cir.1994). This he cannot do. To resolve a dispute at sentencing, the district court may consider non-admissible "relevant information" provided that it "has sufficient indications of reliability." U.S.S.G. Sec. 6A1.3(a); United States v. Bermea, 30 F.3d 1539, 1576 (5th Cir.1994). Testimony under oath observed by the district court would qualify.

United States v. Smith, 13 F.3d 860 (5th Cir.1994), is not to the contrary. Although this court vacated a sentence where the court considered of factual matters contained in a co-defendant's pre-sentencing report, the Smith court premised its concern on the defendant's lack of opportunity to "see" the PSR or "contest [its] accuracy." Id. at 867. In contrast, once the court reported his observations of the elderly witnesses to defendant at the sentencing hearing, Greene could have attempted to rebut the court's impressions, or at least asked for some time to do so.

Greene also contends the district court erred in sentencing him under the money laundering guidelines instead of the fraud Greene explicitly analogizes his situation to the facts of United States v. Skinner, 946 F.2d 176, 179 (2nd Cir.1991), where the court vacated sentences calculated under the money laundering guidelines for $3,320 of expenditures because the essence of the crime was the conspiracy and distribution of cocaine. Unfortunately for Greene, the Second Circuit remanded to the district court for reconsideration of a downward departure. Id. at 180 ("The financial transactions ... can only be said to have facilitated additional crimes in the most minimal sense. Accordingly, appellants' conduct was both atypical of the conduct described by the Sentencing Guidelines and inadequately considered by the Sentencing Commission, thus empowering the district court to consider a downward departure.") In the Fifth Circuit, the decision not to depart is unreviewable on appeal. United States v. Miro, 29 F.3d 194, 198-199 (5th Cir.1994). ³ In fact, this court lacks jurisdiction over a district court's refusal to grant a downward departure. United States v. DiMarco, 46 F.3d 476, 477 (5th Cir.1995) (failure to grant discretionary downward departure is "not subject to appellate review"). ⁴ Although, in accord with Skinner, the district court may effectuate the "heartland" language of the introductory chapter of the Sentencing Guidelines through the vehicle of a downward departure, its decision not to depart downward is conclusive.

guidelines. The crux of Greene's argument is that while convicted of laundering "only" $3,638.78, compared to a fraud scheme that grossed nearly $200,000.00 and victimized at least 497 people, he was, nevertheless, sentenced under the "stiffer" money laundering guidelines. Indeed, a substantial disparity does exist between the guideline range Mr. Greene would have confronted under the fraud guidelines of Sec. 2F1.1 and the sentence he actually received under the money laundering terms found in U.S.S.G. Sec. 2S1.1. ²

Indeed, because of the Guideline's grouping rules, where money laundering and fraud offenses can be properly grouped, the imposition of the higher base offense level attached to money laundering was required. Greene, not surprisingly, insists that the grouping of the money laundering counts of conviction with those of conspiracy, mail and wire fraud, and the false name counts was error. The issue of grouping counts for sentencing purposes is generally a question of law subject to a de novo review. United States v. Patterson, 962 F.2d 409, 416 (5th Cir.1992). The sentence will be upheld if it was imposed as the result of "a correct application of the guidelines to factual findings which are not clearly erroneous." United States v. Ponce, 917 F.2d 841, 842 (5th Cir.1990) (citing United States v. Sarasti, 869 F.2d 805, 806 (5th Cir.1989)).

Grouping by virtue of Sec. 3D1.2(d) of the Sentencing Guidelines necessitates offenses involving the same victim and involving multiple acts tied together by a common illegal objective or part of a common scheme. When this predicate is satisfied, Sec. 3D1.2(d) explicitly provides for grouping of offenses covered by the fraud and money laundering guidelines. Undoubtedly, this scam did involve several transactions as part of a larger We distinguish this case from those cited by Greene because in none of those cases did the money laundering activities of the defendants perpetuate the underlying crimes. Here, however, Greene's money laundering activity, regardless of its limited extent, advanced the mail and wire fraud...