United States v. Berry
| Decision Date | 08 November 2019 |
| Docket Number | No. 18-20617,18-20617 |
| Parties | UNITED STATES OF AMERICA, Plaintiff - Appellee v. GWENDOLYN BERRY, also known as Gwen Berry, Defendant - Appellant |
| Court | U.S. Court of Appeals — Fifth Circuit |
Appeal from the United States District Court for the Southern District of Texas
Before BARKSDALE, STEWART, and COSTA, Circuit Judges.
*
Regarding her guilty-plea convictions for mail and wire fraud, in violation of 18 U.S.C. §§ 1341 and 1343, respectively, and for making and subscribing a false tax return, in violation of 26 U.S.C. § 7206(1), Gwendolyn Berry contests four sentencing rulings: application of the enhancements for use of sophisticated means, Sentencing Guidelines § 2B1.1(b)(10)(C), and abuse of a position of trust, Guideline § 3B1.3; the $1,820,858.40 restitutionorder, 18 U.S.C. §§ 3663A and 3664 (Mandatory Victims Restitution Act); and the criminal-forfeiture order in the same amount, 18 U.S.C. § 981(a)(1)(C), 21 U.S.C. § 853(p), and 28 U.S.C. § 2461(c). AFFIRMED; REMANDED TO CORRECT JUDGMENT.
Amanda and Leonard Davis employed Berry as a bookkeeper. Initially working through the firm of their financial advisor, Tye Williams, Berry subsequently worked directly for the Davises after they fired Williams. Unlike the Phoenix-resident Davises, Berry lived and worked in Houston. Her duties for the Davises included bookkeeping, bill-paying, and account-reconciliation. Berry's position afforded her access to the Davises' finances, including several bank accounts, their Next Financial Group, Inc. (Next), investment accounts, and section-529-education-savings accounts.
Unknown to the Davises, Berry began skimming money from their accounts to pay her and her family's personal expenses. After moving money into the Davises' bank accounts, often from their investment and section-529 accounts, Berry transferred it repeatedly among other Davis accounts. She then used some of it to pay, inter alia, her and her family's credit-card statements.
One of Berry's tasks was to record the Davises' financial transactions in Quicken, an accounting software. She masked her fraudulent transactions by labeling them as legitimate business expenses, the Davises' expenses, or charitable donations. The investigating Secret Service Agent identified 576 such fraudulent entries from November 2008 through September 2014, totaling $1,820,858.41.
A superseding indictment charged Berry with nine counts of wire fraud, in violation of 18 U.S.C. § 1343; three counts of mail fraud, in violation of 18 U.S.C. § 1341; and four counts of making and subscribing false tax returns, inviolation of 26 U.S.C. § 7206(1). It also notified her the Government sought: criminal forfeiture of approximately $1,749,000; a money judgment; and substitution of assets, pursuant to 21 U.S.C. § 853.
Berry pleaded guilty to all 16 counts, agreeing with the factual basis but disputing the loss, restitution, and forfeiture amounts. On 28 February 2018, the district court accepted her plea and found her guilty on all counts. After the presentence investigation report (PSR) was filed that May, Berry submitted 62 pages of objections, supported by 25 exhibits, contesting primarily: the loss and restitution amounts; and enhancements for substantial hardship, sophisticated means, and abuse of a position of trust. A revised PSR was filed on 16 August, recommending a Guidelines sentencing range of 51-to 63-months' imprisonment.
The Government had moved on 31 July for a preliminary forfeiture order. Berry objected on 1 and 13 August, requesting, inter alia, sentencing be continued pending a hearing on her forfeiture objections.
Sentencing, however, was held, as scheduled, on 23 August. Berry objected at the sentencing hearing, seeking a separate forfeiture hearing. After allowing her counsel an opportunity to contest the forfeiture amount, the court overruled the objection and sentenced her, inter alia, to 51-months' imprisonment; ordered restitution of $1,820,858.40 to the Davises and $344,268 to the IRS; and noted a final forfeiture order and money judgment would be entered, which occurred later that day. It declined to impose a fine.
As noted, Berry does not challenge her convictions. She does, however, contest four sentencing rulings: the sophisticated-means and abuse-of-a-position-of-trust enhancements, and the restitution and forfeiture awards.
Regarding the two challenged enhancements, although post-Booker, the Guidelines are advisory only, the district court must avoid significant procedural error, such as improperly calculating the Guidelines sentencing range. Gall v. United States, 552 U.S. 38, 46, 51 (2007). If no such procedural error exists, a properly preserved objection to an ultimate sentence is reviewed for substantive reasonableness under an abuse-of-discretion standard. Id. at 51; United States v. Delgado-Martinez, 564 F.3d 750, 751-53 (5th Cir. 2009). In that respect, for issues preserved in district court, its application of the Guidelines is reviewed de novo; its factual findings, only for clear error. E.g., United States v. Cisneros-Gutierrez, 517 F.3d 751, 764 (5th Cir. 2008).
A threshold issue is which Guidelines version applies. The court must use the version effective at sentencing, unless this would cause an ex post facto violation; if so, the court must use the version in effect when the offense was committed. U.S.S.G. §§ 1B1.11(a), (b)(1). The court must apply the same version in its entirety but also "consider subsequent amendments" that are "clarifying" and not "substantive changes". Id. § 1B1.11(b)(2).
Berry's scheme ended in 2014. When she was sentenced in 2018, the 2016 Guidelines were in effect. Because applying the 2016 Guidelines would cause an ex post facto violation, see Guideline § 2B1.1(b)(2)(A)(iii) (), the court properly applied the 2014 Guidelines, in effect when the offense was completed.
For Guideline § 2B1.1's two-level sophisticated-means enhancement, the district court's determination Berry used such means is a factual finding, upheld unless clearly erroneous: not "plausible in [the] light of the record as a whole". United States v. Miller, 906 F.3d 373, 376-77 (5th Cir. 2018) (citation omitted). This enhancement applies if the "offense otherwise involvedsophisticated means", Guideline § 2B1.1(b)(10)(C), with the commentary defining such means as "especially complex or especially intricate offense conduct pertaining to the execution or concealment of an offense", Guideline § 2B1.1 cmt. n.9(B).
Berry claims a 2015 Guidelines amendment is clarifying and, therefore, applicable retroactively. See id. app. C, Amend. 792 (). She did not, however, preserve this issue in district court.
In that regard, although her objections to the initial PSR noted that the enhancement was amended in 2015, she never contended, or explained why, it was clarifying and, therefore, applicable retroactively. "[I]f a party wishes to preserve an argument for appeal, the party must press and not merely intimate the argument during the proceedings before the district court". United States v. Soza, 874 F.3d 884, 889 (5th Cir. 2017) (alteration in original) (internal quotation marks and citations omitted); see Gabel v. Lynaugh, 835 F.2d 124, 125 (5th Cir. 1988) (). Accordingly, the issue of this amendment's retroactive effect vel non is waived.
For the following reasons, the court did not clearly err in finding Berry used sophisticated means. She contends her conduct was neither especially complex nor intricate because she created false Quicken entries the Davises could have easily discovered. Our court, however, has "affirmed the application of the sophisticated[-]means enhancement in cases involving some method that made it more difficult for the offense to be detected, even if that method was not by itself particularly sophisticated". Miller, 906 F.3d at 380(quoting United States v. Valdez, 726 F.3d 684, 695 (5th Cir. 2013) ()); see United States v. Clements, 73 F.3d 1330, 1340 (5th Cir. 1996) ().
Like defendant in Miller, Berry did not write checks to herself, instead writing them to vendors to pay her or her family's expenses. See Miller, 906 F.3d at 380. She falsified bookkeeping entries to pass these payments off as legitimate by, e.g., mischaracterizing payments made to her credit card as payments of the Davises' expenses, thereby "obscur[ing]" the transaction. See Clements, 73 F.3d at 1340. She cycled money among the Davises' accounts, concealing her fraudulent transfers and "mak[ing] it more difficult for the offense to be detected". See Miller, 906 F.3d at 380. Her conduct was "something more than an open and transparent direct deposit and movement of funds". See id. (internal quotation marks and citation omitted).
In challenging the two-level abuse-of-a-position-of-trust enhancement, Guideline § 3B1.3, Berry claims her position was merely a clerical role lacking discretion. The enhancement's applicability is also a factual finding, reviewed only for clear error. Miller, 906 F.3d at 376-77.
The enhancement applies if "defendant abused a position of public or private trust . . . in a manner that significantly facilitated the commission or concealment of the offense . . .". U.S.S.G. § 3B1.3. "A position of trust is characterized by (1) professional or managerial discretion (i.e., substantial discretionary judgment that is ordinarily given considerable deference), and (2) minimal supervision." Miller, 906 F.3d at 377 (quoting ...
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