U.S. v. Quigley, 03-3059.

• Decision Date: 06 July 2004
• Docket Number: No. 03-3059.,03-3059.
• Citation: 373 F.3d 133
• Parties: UNITED STATES of America, Appellee, v. Dorothy QUIGLEY, Appellant.
• Court: U.S. Court of Appeals — District of Columbia Circuit

373 F.3d 133

UNITED STATES of America, Appellee, v. Dorothy QUIGLEY, Appellant.

No. 03-3059.

United States Court of Appeals, District of Columbia Circuit.

Argued May 10, 2004.

Decided July 6, 2004.

Appeal from the United States District Court for the District of Columbia (No. 01cr00082-01).

Lisa B. Wright, Assistant Federal Public Defender, argued the cause for appellant. With her on the briefs was A. J. Kramer, Federal Public Defender.

Patricia A. Heffernan, Assistant U.S. Attorney, argued the cause for appellee. With her on the brief were Roscoe C. Howard, Jr., U.S. Attorney, John R. Fisher, Roy W. McLeese III, and Virginia Cheatham, Assistant U.S. Attorneys.

Before: GINSBURG, Chief Judge, and SENTELLE and ROBERTS, Circuit Judges.

Opinion for the Court filed by Circuit Judge SENTELLE.

SENTELLE, Circuit Judge:

Dorothy Quigley appeals from a judgment sentencing her to twenty-seven months' imprisonment. Her sole argument on appeal is that the district judge improperly enhanced her offense level by four levels pursuant to the "organizer or leader" role enhancement under § 3B1.1(a) of the United States Sentencing Guidelines. For the reasons more fully set forth below, we agree with appellant that the district court erred in imposing this enhancement, and therefore vacate the judgment and remand for resentencing.

I.

In January 2000, Federal Bureau of Investigation agents confronted Quigley concerning her involvement in a scheme to defraud the federal government. The scheme involved land "flips" in the District of Columbia. Quigley operated as the real estate agent for co-conspirators, helping them buy and then sell (that is, "flip") D.C. properties that were in general disrepair. She aided her conspirators in obtaining a higher price for the land by hiring appraisers who would value the land at an inflated cost. Most of the purchasers could not qualify for the federally insured mortgages critical to the success of the scheme. To solve this problem, Quigley would help the buyers qualify for federally insured mortgages through the Federal Housing Administration ("FHA"), part of the Department of Housing and Urban Development ("HUD"). She helped buyers to get false income records, misrepresenting their ability to pay the mortgage, and at times gave them down-payment money. At the time of the plea agreement, thirteen of the forty-two such loans she had helped to procure from the FHA were in default, resulting in an estimated loss of around $700,000 to the federal government.

After she was approached by the FBI, Quigley and the United States entered a plea agreement. The agreement provided that Quigley would plead guilty to one count of conspiracy to defraud the United States and to make false statements within HUD's jurisdiction and would cooperate with the government in investigating the fraud in which she was involved. In return, the government agreed to drop all other potential charges and not to use any information that Quigley provided against her. The government also agreed to consider moving for a downward departure pursuant to § 5K1.1 of the United States Sentencing Guidelines if Quigley's assistance was substantial.

The parties estimated the final offense level at 18, based on a reading of the 1999 edition of the Guidelines, the version that applied to Quigley. The plea agreement computed that level as follows: (1) a base-offense level of 6, see U.S. Sentencing Guidelines Manual § 2F1.1 (1999) (repealed and consolidated with § 2B1.1 effective Nov. 1, 2001) ("USSG"); (2) a loss amount of between $500,000 and $800,000, which added ten levels to the sentence; and (3) a two-level upward adjustment for more-than-minimal planning under § 2F1(b)(2). The government also agreed not to oppose an additional three-level downward adjustment for acceptance of responsibility. The agreement said nothing about role enhancements. Finally, the agreement noted that the court alone would determine the applicable guideline range, and said that the government "cannot and does not make any promises, representations or predictions regarding what sentence the Court will impose."

In April 2001, Quigley pleaded guilty to one count of conspiracy to defraud the United States and to make false statements within HUD's jurisdiction. At her guilty plea hearing, the government submitted a two-page factual proffer that appellant had acknowledged was accurate. That proffer is not in the record; neither party apparently can locate it and it was not formally filed with the district court. The government, however, summarized the proffer's contents at the hearing:

Ms. Quigley is a real estate agent in D.C. who used her skills to further a conspiracy to illegally obtain FHA insured mortgages based on fraudulently inflated appraisals and falsely qualified buyers.

Ms. Quigley participated in approximately 42 home sales that were based on these fraudulent appraisals and falsely qualified buyers. At the time of her plea agreement, thirteen of the 42 properties were already in default or foreclosure, with estimated losses to the FHA and HUD of over $700,000.

The government will primarily be relying on a written factual proffer that was provided in advance to defense counsel and to the court, and which has been signed today by Ms. Quigley and her counsel.

The district court also examined Quigley in open court concerning the contents of the proffer:

THE COURT: Is it correct that on a substantial number of occasions, the government says there were 42-at least 42 of these, but at least on a substantial number, that you in agreement and in cooperation with a number of other individuals who the government has simply identified as co-conspirators, that you identified properties which could be used for the FHA insured loan program, that you identified potential buyers, and that you helped those buyers appear to get qualified for the loans, and by that I mean that you helped get false pay stubs for them, that in some instances you had them indicate that they were getting their down payment as a gift from a relative, which is legal, when, in fact, one of the co-conspirators was providing the money for the down payment.

Are those facts correct?

MS. QUIGLEY: Yes.

THE COURT: Is it also true that you arranged for appraisals on the property, and that you provided the appraiser with the contract price which resulted in getting an inflated price for insurance purposes from FHA?

MS. QUIGLEY: Yes.

THE COURT: And, of course, you were working with other people to do that, is that correct?

MS. QUIGLEY: That is correct.

After her plea, Quigley's sentencing was continued to allow her time to cooperate with the government. The government filed a sealed § 5K1.1 motion, requesting that the sentencing court depart downward three levels. According to that motion, Quigley's information was very useful and resulted in multiple leads, recorded conversations, search warrants, and other guilty pleas. (Quigley's brief states that the trial prosecutor has confirmed that this summary of sealed material does not reveal any nonpublic information.)

The presentence report contained additional facts relevant to Quigley's role in the conspiracy. The report, which the parties have not included in the appendix but is quoted extensively in Quigley's brief, confirms the facts Quigley admitted at the plea hearing. Quigley acknowledged that there were no "material/factual inaccuracies" in the PSR. The report's sentencing calculation agreed with the sentencing calculations contained in Quigley's plea agreement, thus starting from a total offense level of 18. The report reduced the sentence three levels for acceptance of responsibility, leading to an offense level of 15, not counting any reduction that might result from the government's § 5K1.1 motion. The report did not recommend that a role adjustment be added to Quigley's sentence.

In April 2003, the district court held a sentencing hearing for Quigley. At the hearing, the district court questioned the probation officer, the prosecutor, and defense counsel concerning whether the court should add a role enhancement to Quigley's offense level, in view of the court's "recollection of the facts in this case from pleas and from two trials that the defendant was probably — I am not making a finding at this point, an organizer or leader of this entire scheme." The probation officer said that he did not believe that a role enhancement for Quigley was appropriate, and that instead he had enhanced her sentence two levels for more-than-minimal planning. When asked to address the role enhancement possibility, the prosecutor said that, at the time the plea agreement was struck between the government and Quigley, it was not clear that she was involved in the sales contracts for all forty-two properties they knew of at the time. The prosecutor requested that the court reduce Quigley's sentence three levels, to a total offense level of 12, in view of her extensive cooperation. Defense counsel, when asked to respond, requested a two-week continuance, which the district court granted. Counsel filed a brief memorandum objecting to applying a § 3B1.1(a) role enhancement to Quigley.

On May 8, the district court held a second sentencing hearing for Quigley. The court questioned the government about Quigley's role in the conspiracy:

THE COURT: Based on the government's knowledge and investigation and intensive prosecution of the entire conspiracy, what is the government's understanding of the role that Miss Quigley played?

The government responded by noting that the original plea agreement had not included a role enhancement, and by saying that there was testimony from the trial of one of Quigley's co-conspirators, the Golden trial, from one Timothy Blackburn that Quigley had recruited him to buy real estate. This factual assertion was erroneous, according to the government's brief. The court then asked the government:

THE COURT: And is...