U.S. v. Studevent

• Decision Date: 08 July 1997
• Docket Number: No. 96-3095,96-3095
• Citation: 116 F.3d 1559
• Parties: UNITED STATES of America, Appellee, v. Robert Anthony STUDEVENT, Appellant.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 1559

116 F.3d 1559

325 U.S.App.D.C. 383

UNITED STATES of America, Appellee, v. Robert Anthony STUDEVENT, Appellant.

No. 96-3095.

United States Court of Appeals, District of Columbia Circuit.

Argued May 5, 1997.

Decided July 8, 1997.

Appeal from the United States District Court for the District of Columbia (No. 95cr00175-01).

L. Barrett Boss, Assistant Federal Public Defender, argued the cause for the appellant. A.J. Kramer, Federal Public Defender, Washington, DC, and Frances H. Pratt, Attorney, Alexandria, VA, were on brief.

Jeanne M. Hauch, Assistant United States Attorney, Washington, DC, argued the cause for the appellee. Eric H. Holder, Jr., United States Attorney, and John R. Fisher, Thomas C. Black and Harry R. Benner, Assistant United States Attorneys, Washington, DC, were on brief.

Before WALD, HENDERSON and TATEL, Circuit Judges.

Opinion for the court filed by Circuit Judge HENDERSON.

Opinion concurring in part and dissenting in part filed by Circuit Judge TATEL.

KAREN LECRAFT HENDERSON, Circuit Judge:

Robert A. Studevent (Studevent) appeals his 18-month sentence for bank fraud. He argues principally that the district court should have limited the "intended loss" attributed to his theft and forgery of checks under application note 7 to section 2F1.1 of the United States Sentencing Guidelines (U.S.S.G. or Guidelines) to an amount that was realistic or at least possible. In his view, the fact that he was enmeshed in a government sting and thus could have caused no actual loss should limit the amount of intended loss attributed to his crime. Studevent argues in the alternative that the district court misunderstood its authority to depart downward pursuant to application note 10 to section 2F1.1. We reject both assignments of error and affirm Studevent's sentence.

I. FACTS

In January 1995, Studevent gave Anthony Wallace, his employer at the time, a blank check he had stolen from a former employer. Wallace made out the stolen check for $28,759.97 and deposited it in his company's account. Studevent received $3,110.95 from the proceeds. As a result of that crime, a Federal Bureau of Investigation (FBI) agent operating under the name "Bob Vieta" contacted Studevent through an acquaintance and offered to fence any further stolen checks Studevent could obtain.

Studevent did steal a number of additional checks. Studevent met with his FBI fence five times between April and July 1995 and sold him eleven stolen checks. The FBI agent told Studevent to whom to make out the checks and gave him a ballpark figure for the amount of each check. Studevent decided the actual amounts and signed the checks. Including the one given to Wallace, the checks were made out for a total of $535,592.35. Studevent received $5,700 from the FBI agent for the eleven checks.

Studevent was arrested on July 6, 1995 and charged with one count of bank fraud in violation of 18 U.S.C. §§ 1344 and 2, five counts of bank fraud in violation of 18 U.S.C. § 1344, eleven counts of possession of a forged security in violation of 18 U.S.C. § 513(a) and one count of obstruction of correspondence in violation of 18 U.S.C. § 1702. On December 6, 1995, Studevent pleaded guilty to a single violation of 18 U.S.C. § 1344. After the government and Studevent filed sentencing memoranda, the district court attributed an intended loss of $535,592.35 to Studevent's fraud and sentenced him to 18 months' imprisonment, the bottom of the applicable Guidelines range. United States v. Studevent, Criminal Case No. 95-0175, Memorandum and Order at 2-4 (D.D.C. May 30, 1996) (Memorandum and Order), reprinted at Appellant's App. 139-41; Appellant's App. 146. The court declined to depart downward on the ground that the intended loss overstated the seriousness of the crime. Memorandum and Order at 4, reprinted at Appellant's App. 141.

II. DISCUSSION

A. Calculation of Loss

Guidelines section 2F1.1, which governs sentencing for various forms of fraud, ties a defendant's sentence to the amount of loss caused by his fraud. Application note 7 to the section explains that, "if an intended loss that the defendant was attempting to inflict can be determined, this figure will be used if it is greater than the actual loss." U.S.S.G. § 2F1.1 application n.7. Studevent argues that intended loss should be limited to the loss that he realistically could have caused. Under his theory, the district court's loss calculation should not have included the checks he passed to the FBI agent because there was no possibility that those checks would be deposited and their rightful possessors defrauded and because there was no evidence that the accounts on which the checks were drawn were open and contained sufficient funds. We disagree.

Studevent relies principally on the Tenth Circuit's decision in United States v. Galbraith, 20 F.3d 1054 (10th Cir.), cert. denied, 513 U.S. 889, 115 S.Ct. 233, 130 L.Ed.2d 157 (1994). In Galbraith, the Tenth Circuit held that "the loss [the] defendant subjectively intended to cause is not controlling if he was incapable of inflicting that loss" and accordingly concluded that the appropriate amount of loss to attribute to a defendant caught in a sting operation is zero. Id. at 1059; see also United States v. Santiago, 977 F.2d 517, 526 (10th Cir.1992). The Sixth Circuit has adopted the same position, holding that "intended loss must have been possible to be deemed relevant." ¹ United States v. Watkins 994 F.2d 1192, 1196 (6th Cir.1993); see also United States v. Khan, 969 F.2d 218, 221 (6th Cir.1992). The Fifth, Seventh and Ninth Circuits, on the other hand, have decided that a defendant need not have been capable of inflicting the intended loss under Guidelines section 2F1.1. ² United States v. Ismoila, 100 F.3d 380, 396 (5th Cir.1996) ("The fact that the victims were not at risk for the charges above their credit limit is not dispositive."); United States v. Coffman, 94 F.3d 330, 336 (7th Cir.1996) (rejecting argument "that a loss that cannot possibly occur cannot be intended"), cert. denied, --- U.S. ----, ----, 117 S.Ct. 1425, 1426, 137 L.Ed.2d 535 (1997); United States v. Koenig, 952 F.2d 267, 271-72 (9th Cir.1991) ("[S]ection 2F1.1 only requires a calculation of 'intended loss' and does not require a finding that the intentions were realistic."). We agree with the Fifth, Seventh and Ninth Circuits on the issue.

As an initial matter--and most importantly--application note 7 does not qualify "intended loss" in any way. See Ismoila, 100 F.3d at 396 ("plain language of comment 7 makes clear" that "intent is critical" regardless of likelihood of success); United States v. Robinson, 94 F.3d 1325, 1328 (9th Cir.1996) (under "plain meaning reading" of application note 7, nothing "mandates that the defendant be capable of inflicting the loss he intends"). Application note 7 does state that intended loss should be used "[c]onsistent with the provisions of § 2X1.1 (Attempt, Solicitation, or Conspiracy)" and section 2X1.1 calls for a three-point reduction in offense level if the offense was not completed. Section 2X1.1 does not suggest, however, that intended loss should be limited by economic reality. Instead, section 2X1.1(a) refers to "any intended offense conduct" without qualification and application notes 2 and 4 to section 2X1.1 indicate that a defendant should be sentenced based on what he intended even if he did not succeed, if his intent can be determined with specificity and if the offense level for his intended conduct minus three points is greater than for his actual conduct.

The United States Sentencing Commission (Commission) currently is considering whether to add language to application note 7 regarding impossibility or economic reality. Sentencing Guidelines for United States Courts, 62 Fed.Reg. 152, 173 (1997) ("[T]he Commission invites comment on whether intended loss should be limited by concepts of 'economic reality' or impossibility, such as in a government sting operation...."). Unless and until it does so, however, the application note should be applied as written. See United States v. Smaw, 22 F.3d 330, 333 (D.C.Cir.1994) ("We owe the Sentencing Commission's commentary on its own guidelines the same treatment as we afford 'an agency's interpretation of its own legislative rules.' " (quoting Stinson v. United States, 508 U.S. 36, 44, 113 S.Ct. 1913, 1919, 123 L.Ed.2d 598 (1993))). We therefore decline to graft an impossibility or improbability limitation onto the Commission's intended loss provision.

Application note 10 to section 2F1.1 bolsters our reading of the plain language of application note 7. Note 10 authorizes a downward departure "where a defendant attempted to negotiate an instrument that was so obviously fraudulent that no one would seriously consider honoring it." U.S.S.G. § 2F1.1 application n.10. It would be unnecessary to authorize such a departure if the unlikelihood of success already limited the intended loss attributable to a defendant under application note 7. See Coffman, 94 F.3d at 336 (application note 10 "implies that the unlikelihood of an actual loss does not affect the computation of the 'intended loss' ").

Our reading also accords with the general scheme of the Guidelines. One of the Guidelines' goals is to tailor punishment to a defendant's particular degree of culpability. See U.S.S.G. subpart 1A3 ("Congress sought proportionality in sentencing through a system that imposes appropriately different sentences for criminal conduct of differing severity."). Limiting intended loss to that which was likely or possible, however, would eliminate the distinction between a defendant whose only ambition was to make some pocket change and one who plotted a million-dollar fraud. See Coffman, 94 F.3d at 336 (argument that intended loss is limited by impossibility "would, if accepted, irrationally erase any distinction in the severity of punishment between a defendant who tries to defraud his...