United States v. Nguyen, 16-10186

• Decision Date: 13 April 2017
• Docket Number: No. 16-10186,16-10186
• Citation: 854 F.3d 276
• Parties: UNITED STATES of America, Plaintiff–Appellee v. Avan NGUYEN, Defendant–Appellant
• Court: U.S. Court of Appeals — Fifth Circuit

854 F.3d 276

UNITED STATES of America, Plaintiff–Appellee

v.Avan NGUYEN, Defendant–Appellant

No. 16-10186

United States Court of Appeals, Fifth Circuit.

FILED April 13, 2017

Emily Baker Falconer, James Wesley Hendrix, Assistant U.S. Attorneys, U.S. Attorney's Office, Dallas, TX, for Plaintiff–Appellee.

Richard Bratton Roper, III, Esq., Thompson & Knight, L.L.P., Dallas, TX, for Defendant–Appellant.

Before STEWART, Chief Judge, and JONES and OWEN, Circuit Judges.

CARL E. STEWART, Chief Judge:

Defendant–Appellant Avan Nguyen pleaded guilty to aiding and assisting in the preparation of a false and fraudulent tax return. The district court imposed a 36–month above-Guidelines sentence based on the 18 U.S.C. § 3553(a) factors and its conclusion that it was more likely than not that Nguyen participated in the uncharged offense of currency structuring. Nguyen now appeals the reasonableness of his sentence. Finding no error, we AFFIRM.

I. BACKGROUND

Nguyen, the owner of a wholesale salon equipment business, was charged with aiding and assisting in the preparation of a false and fraudulent corporate tax return. He pleaded guilty pursuant to a written plea agreement and entered into a settlement agreement with the Government, wherein he agreed to forfeit $1,100,000 in seized funds. In preparing the presentence report ("PSR"), the probation officer determined that Nguyen had a total offense level of 13 and a criminal history category of I, resulting in an advisory Guidelines range of 12–18 months. However, the probation officer also noted that Nguyen appeared to be involved in unlawful structuring activities¹ : IRS agents found over $4,900,000 in structured deposits made by third parties to bank accounts registered to Nguyen or his family members. Moreover, during a raid of Nguyen's business, IRS investigators found $3,215,703 in currency—most of it separated into $10,000 bundles—whose source could not be determined. In paragraph 87 of the PSR, the probation officer suggested the structuring activities could warrant an upward departure under U.S.S.G. § 4A1.3 for an underrepresented criminal history or under U.S.S.G. § 5K2.21 for uncharged conduct.

Nguyen objected to the suggestion that an upward departure may be appropriate, and the Government agreed that there was insufficient evidence to prove that he had structured or directed the structuring of deposits into his bank accounts. The district court, however, entered an order tentatively concluding that Nguyen's objections to the upward departure were without merit. The district court suggested that it would reject the plea agreement, including the forfeiture settlement, and that Nguyen should receive a sentence above the advisory Guidelines range, given the probability that he knew of the structured deposits being made into his accounts and the Government's failure to prosecute him for that crime.

At the first sentencing hearing, the district court conducted an evidentiary hearing to determine whether Nguyen had participated in illegal structuring activities. The district court questioned three witnesses. Oanh Nguyen, Defendant–Appellant's wife, testified that the new business bank accounts Nguyen had opened at Chase Bank ("Chase") and Wells Fargo were not an attempt to evade the law but rather a result of his decision to restructure the company after their son decided to leave the business. IRS Special Agent Alan Hampton and IRS Task Force Officer Alison Turner then testified about the investigation into Nguyen's financial activities. Afterwards, the district court accepted the plea agreement but expressed its belief that there was sufficient evidence to conclude that structuring activities occurred, that Nguyen was aware of the illegal transactions, and that he aided and abetted the deposits. The Government, while agreeing there was enough evidence to show that the funds were structured, expressed doubt that there was sufficient proof by a preponderance of the evidence to show that Nguyen himself assisted in the structuring.

At the second sentencing hearing, the district court sustained Nguyen's objection to an upward departure as detailed in paragraph 87 of the PSR. The district court also concluded that Nguyen was not entitled to a reduction for acceptance of responsibility, which resulted in a newly applicable Guidelines range of 21–27 months. Taking into account the 18 U.S.C. § 3553(a) factors, the district court then sentenced Nguyen to 36 months in prison, to be followed by a one-year term of supervised release and payment of a $250,000 fine. The district court acknowledged the Government's doubt as to whether Nguyen participated in structuring activities, but explained that it had reached a different conclusion based on its examination of the evidence and provided a lengthy explanation as to why "it [was] more likely than not that [Nguyen] committed the offense of structuring." In support of its decision, the district court cited, inter alia , Nguyen's dishonesty in underreporting his taxable income for multiple years; the connection between the investigation into his structuring activities and the discovery of tax fraud; and that Nguyen was able to retain "millions of dollars" that could have been subject to forfeiture had the Government pursued forfeiture proceedings. The district court rejected Ms. Nguyen's explanation for why the new bank accounts were opened and noted that Defendant–Appellant gave conflicting explanations to IRS investigators as to whether funds seized from his business were bank withdrawals. In its thirteen-page Statement of Reasons ("SOR"), the district court reiterated these conclusions and detailed the factors that influenced it to impose an above-Guidelines sentence. Nguyen timely appealed.

II. DISCUSSION

This court reviews sentencing decisions for reasonableness. Gall v. United States , 552 U.S. 38, 46, 128 S.Ct. 586, 169 L.Ed.2d 445 (2007) ; United States v. Cisneros–Gutierrez , 517 F.3d 751, 764 (5th Cir. 2008). Using a bifurcated review process, we first examine whether the district court committed any significant procedural error. Gall , 552 U.S. at 51, 128 S.Ct. 586. If the district court's decision is procedurally sound, we then consider the substantive reasonableness of the sentence. Id.

A. Procedural Reasonableness

1.

In considering the procedural unreasonableness of a sentence, we review the district court's interpretation and application of the Sentencing Guidelines de novo and its findings of fact for clear error. Cisneros–Gutierrez , 517 F.3d at 764. If the district court committed a significant procedural error, we must remand unless the error was harmless. United States v. Delgado–Martinez , 564 F.3d 750, 752–53 (5th Cir. 2009).

Significant procedural errors include "failing to calculate (or improperly calculating) the Guidelines range, ... failing to consider the § 3553(a) factors,^{[2 ]} selecting a sentence based on clearly erroneous facts, or failing to adequately explain the chosen sentence—including an explanation for any deviation from the Guidelines range." Gall , 552 U.S. at 51, 128 S.Ct. 586. "[W]e will give great deference to [a] sentence" if the judge "carefully articulate[s] the fact-specific reasons she concludes that [a non-Guidelines] sentence is appropriate," "commits no legal error in the procedure followed in arriving at the sentence," and "gives appropriate reasons for her sentence." United States v. Mares , 402 F.3d 511, 519–20 (5th Cir.), cert. denied , 546 U.S. 828, 126 S.Ct. 43, 163 L.Ed.2d 76 (2005).

2.

Nguyen contends that the district court committed procedural error because its determination that he participated in financial structuring activities was not supported by sufficient evidence and thus could not form the basis for an upward variance. We disagree.

Generally, structuring requires proof of three elements: that (1) the defendant knew of the financial institution's legal obligation to report transactions in excess of $10,000; (2) the defendant knowingly structured (or attempted to structure, or assisted in structuring) a currency transaction; and (3) the purpose of the structured transaction was to evade that reporting obligation. Fifth Circuit Pattern Jury Instructions (Criminal Cases) § 2.104 (2015) [hereinafter Jury Instructions § 2.104]. Although the Government must prove each of these elements beyond a reasonable doubt to establish the defendant's guilt at trial, for sentencing purposes, the district court needed only to find that the elements were satisfied by a preponderance of the evidence. See Mares , 402 F.3d at 519 ("The sentencing judge is entitled to find by a preponderance of the evidence ... all facts relevant to the determination of a non-Guidelines sentence."). Additionally, direct evidence is not required; rather, "the sentencing court is permitted to make common-sense inferences from the circumstantial evidence." United States v. Caldwell , 448 F.3d 287, 292 (5th Cir. 2006).

Given these standards, the district court did not err in inferring that Nguyen participated in currency structuring. First, the district court's conclusion that "it is more likely than not that [Nguyen] knew of the banks' reporting obligations" was not clearly erroneous. See Jury Instructions § 2.104. In support of its conclusion, the district court pointed to a June 7, 2012 letter written by Chase to Nguyen that stated in relevant part:

All banks operating in the United States are required by law to file a Currency Transaction Report (CTR) when a customer's cash transaction(s) exceed $10,000 on any business day.... [W]e have noted through a review of your account(s) a pattern of cash transactions that potentially give the appearance of an attempt to evade the CTR filing requirement. Attempting to evade the CTR filing requirement may be viewed as structuring and is a violation of the Bank Secrecy Act.

Therefore, Chase feels that it would be in our mutual best interest for you to change your transaction patterns. If

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