Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-03-03087/USCOURTS-caDC-03-03087-0/pdf.json

Parties Involved:
Arnett C. Smith
Appellant
United States of America
Appellee

Document Text:

Notice: This opinion is subject to formal revision before publication in the

Federal Reporter or U.S.App.D.C. Reports. Users are requested to notify

the Clerk of any formal errors in order that corrections may be made

before the bound volumes go to press.

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 20, 2004 Decided July 20, 2004

No. 03-3087

UNITED STATES OF AMERICA,

APPELLEE

v.

ARNETT C. SMITH,

APPELLANT

Appeal from the United States District Court

for the District of Columbia

(No. 99cr00370-01)

Charles B. Klein argued the cause and filed the briefs for

appellant.

David B. Goodhand, Assistant U.S. Attorney, argued the

cause for appellee. With him on the brief were Roscoe C.

Howard, Jr., U.S. Attorney, John R. Fisher, Barbara J.

Valliere, and Mark H. Dubester, Assistant U.S. Attorneys.

 Bills of costs must be filed within 14 days after entry of judgment.

The court looks with disfavor upon motions to file bills of costs out

of time.

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Before: ROGERS, GARLAND, and ROBERTS, Circuit Judges.

Opinion for the Court filed by Circuit Judge ROBERTS.

ROBERTS, Circuit Judge: In this case, which is before this

court for a second time, appellant Arnett C. Smith raises

several challenges to the district court’s recalculation of his

sentence for conspiracy and conflict of interest. The district

court enhanced Smith’s offense level by six levels under the

Sentencing Guidelines, finding that Smith committed perjury

during the trial, that his offense involved vulnerable victims,

and that he had played a leadership role in the offense. The

court also departed upward an additional two levels, relying

on the fact that Smith’s conduct included loan fraud for which

he was not charged. Smith challenges all the enhancements

and the upward departure. We affirm the sentence.

I.

The facts are set forth in detail in United States v. Smith,

267 F.3d 1154 (D.C. Cir. 2001) (Smith I); we recount only

those pertinent to this appeal. Smith was the chief of the

Day Programs Branch of the District of Columbia’s Mental

Retardation and Developmentally Disabled Administration

(MRDDA). His job included referring patients to treatment

centers; one of the centers that regularly received such

referrals was known as Better Treatment Centers (BTC).

BTC’s parent company, Psychological Development Associates, Inc. (PDA), was owned by Denise Braxtonbrown–Smith

(no relation to appellant). The conflicts of interest for which

Smith was convicted arise from several financial transactions

among Smith, Braxtonbrown–Smith, and PDA.

First, in the fall of 1994, Smith set about purchasing a

house on Columbia Road in the District of Columbia. Braxtonbrown–Smith rented the house from its elderly owner,

Earnestine Keaton, and had an option to buy it. Braxtonbrown–Smith told Keaton that she could not afford to buy the

house, but that her friend Smith could buy it at the current

price of $85,000. Smith and Keaton signed a contract in

October 1994 under which Smith was obligated to pay a total

of $65,000; Braxtonbrown–Smith told Keaton (who was not

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represented by a lawyer; Braxtonbrown–Smith had assured

her that no lawyer was necessary because they were friends)

that she would pay the remaining $20,000.

Smith, however, had no intention of being the record owner

of the property. Even prior to his contract with Keaton, he

arranged for his childhood friend Terry Reid to purchase the

house. Reid submitted a mortgage application in September

1994; to facilitate the approval of the loan, he stated on the

application that he would be occupying the house on Columbia

Road as his principal residence. To make that statement

more plausible, Smith drew up a fake lease that provided for

Smith’s mother, Florence Ricks, to move into Reid’s current

home in Upper Marlboro, Maryland. The mortgage was

approved and Reid bought the house on Columbia Road from

Smith in December 1994 for $102,000 — providing substantial

profit to Smith, who at that time had paid only $10,000 toward

the $65,000 that he owed to Keaton. The following month,

Smith paid Keaton another $10,000; he paid the remaining

$45,000 in April 1995, but only after Keaton contacted him

when she learned from a newspaper about the sale of the

property to Reid.

Braxtonbrown–Smith was now nominally Reid’s tenant, but

Smith retained a significant role in the affairs relating to the

house. He oversaw the preparation of a lease that Braxtonbrown–Smith and Reid signed, under which Braxtonbrown–

Smith agreed to pay roughly $1,300 per month in rent. He

and Reid also entered into their own agreement — again

prepared at Smith’s direction — which provided that Reid

would record the deed to the property solely in his name.

The same agreement, however, established that Smith and

Reid would in fact own the property as tenants in common,

each with a fifty percent share. Reid and Smith thus executed a new deed reflecting their tenancy in common; by the

express terms of the agreement, this new deed was to remain

unrecorded. Smith and Reid took equal shares of the profit — roughly $200 per month — that was earned from renting

the home to Braxtonbrown–Smith.

The second series of transactions involved in this case were

short-term loans from Smith to PDA. In January 1995,

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Smith lent $14,900 to PDA and received, just one week later,

a repayment of $18,500. Two additional loans from Smith to

PDA, in late January and March 1995, totaled $28,000, for

which Smith received a repayment of $39,000 from PDA in

early April 1995.

Smith was charged with three counts of receiving illegal

gratuities under 18 U.S.C. § 201(c)(1)(B), two counts of conflict of interest under 18 U.S.C. § 208(a), and one count of

conspiracy under 18 U.S.C. § 371. The conspiracy charge

identified three possible predicate offenses: payment of illegal gratuities (a violation of 18 U.S.C. § 201(c)(1)(A)), receipt

of illegal gratuities, and conflict of interest. The jury deadlocked on the first three counts — the charges of receipt of

illegal gratuities — but convicted Smith on the conflict of

interest and conspiracy counts. The verdict left one issue,

which would be relevant at Smith’s sentencing, unresolved: it

failed to identify which of the three possible predicate offenses identified in the indictment was the offense underlying

the conspiracy conviction. At sentencing, the district court

resolved the issue, determining that ‘‘the evidence proven by

a preponderance at trial amply demonstrate[d] that [Smith]

conspired to commit the offense of Receipt of Illegal Gratuities and/or Payment of Illegal Gratuities.’’ United States v.

Smith, No. 99-CR-370, mem. op. at 4 (D.D.C. Nov. 6, 2000)

(Initial Sentencing Op.). The court added several enhancements to the base sentencing level for that assumed predicate

offense, relying on the number and value of the gratuities and

the fact that the conspiracy involved a vulnerable victim. See

2002 U.S.S.G. §§ 2C1.2(b)(1) (multiple gratuities),

2C1.2(b)(2)(A) (value of gratuities), 3A1.1(b)(1) (vulnerable

victim). Further enhancements were warranted, the court

found, because Smith was the organizer of the conspiracy and

had committed perjury at his trial. See id. §§ 3B1.1(c)

(aggravating role), 3C1.1 (obstruction of justice).

After adding these enhancements, the court turned its

attention to a government motion for an upward departure

under Section 5K2.0 of the Guidelines. The government

emphasized that certain conduct related to Smith’s conspiracy

offense — ‘‘efforts to evade income taxes, commit bank fraud

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and defraud Mrs. Keaton’’ — were not accounted for in the

sentencing guidelines applicable to the conspiracy charge.

Initial Sentencing Op. at 20–21. The court adopted the

government’s reasoning and departed upward. Id. at 24. In

exercising its discretion as to the extent of this departure, the

court examined how many levels would be added to Smith’s

sentence — under the grouping rules of Section 3D of the

Guidelines — if he had actually been convicted of all three

additional offenses (tax evasion, bank fraud, and fraud on

Mrs. Keaton). Concluding that a hypothetical conviction on

these offenses, with certain enhancements — including an

enhancement for perjury relating to the bank fraud — would

warrant a three-level increase in Smith’s offense level, the

court chose to depart upward to that extent. Id. at 24–25.

The foregoing calculations yielded a guideline range of 41 to

51 months’ imprisonment, and the court sentenced Smith to a

46-month prison term.

Smith appealed, and we affirmed his conviction but vacated

his sentence and remanded for resentencing. Smith I, 267

F.3d at 1163. As an initial matter, we concluded that the

court had erred by using a preponderance-of-the-evidence

standard, instead of requiring proof beyond a reasonable

doubt, in determining that payment/receipt of illegal gratuities was the predicate offense implicit in the conspiracy

conviction. Id. at 1161–63. With respect to the upward

departure, we approved of the district court’s methodology

for determining the extent of the departure, but found that

two of the three uncharged offenses on which the court had

relied — tax evasion and fraud on Mrs. Keaton — should not

have been used in the calculation. Id. at 1165–66. As for the

third uncharged offense — the loan fraud — we held that

‘‘the court’s conclusions TTT [were] well supported by the

record,’’ but found that the court’s decision to add an enhancement for perjury in its calculation of the adjusted

offense level for that hypothetical offense may have been

improper because the court ‘‘may have confused lying to the

bank TTT with lying to the court.’’ Id. at 1166.

On remand, the district court concluded that a conflict of

interest offense, rather than a gratuities offense, was the

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predicate offense for the conspiracy of which Smith was

convicted. United States v. Smith, No. 99-CR-370, mem. op.

at 2–3 (D.D.C. June 23, 2003) (Resentencing Op.). The court

noted that the base offense level for that offense was six, see

2002 U.S.S.G. § 2C1.3, and reached a total offense level of

twelve by adding most of the same enhancements it had

applied in the initial sentencing: two levels for Smith’s perjury at trial, two levels under the vulnerable victim provision,

and two levels for Smith’s role as an organizer. Resentencing

Op. at 3–4. In adopting the last two enhancements, the court

stated that ‘‘the Court of Appeals failed to find that these

adjustments were unwarranted or unsupported by the record,

and therefore the adjustments are not before the Court on

remand.’’ Id. The court elaborated, however, that ‘‘[w]hile

the object offense of the conspiracy has changed, the facts

supporting the two adjustments have not.’’ Id. at 4.

The court again opted to depart upward, although the

government had not requested an upward departure during

the resentencing. Heeding this court’s conclusions in Smith

I, the district court focused only on the uncharged bank fraud

in calculating the extent of the upward departure, and clarified that the perjury enhancement on that hypothetical

charge stemmed from false statements that Smith made at

trial, not the statements he made to the bank. Id. at 3, 10.

Concluding that the uncharged bank fraud — with enhancements for more than minimal planning, Smith’s role in the

offense, and Smith’s perjury at trial — would have yielded a

two-level upward adjustment under the Sentencing Guidelines’ grouping rules, the court chose to use that same number of levels for its discretionary upward departure under

Section 5K2.0. Smith was sentenced to 21 months in prison

and appealed again.

II.

A. Applicable Sentencing Guidelines

As a threshold matter, we address Smith’s contention that

the 1995 version of the Sentencing Guidelines, rather than the

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2002 version in effect at the time of Smith’s resentencing,

must be used to avoid an ex post facto problem. See 2002

U.S.S.G. § 1B1.11(b)(1) (‘‘If the court determines that use of

the Guidelines Manual in effect on the date that the defendant is sentenced would violate the ex post facto clause of the

United States Constitution, the court shall use the Guidelines

Manual in effect on the date [of] the offense of conviction’’).

He points to two amendments made in the Guidelines after

1995.

First, in November 1997, the Application Notes to Section

3C1.1 were amended to change the standard of proof for

applying a perjury enhancement: language requiring that

evidence of alleged perjury ‘‘should be evaluated in a light

most favorable to the defendant’’ was removed and replaced

with an admonition for courts to ‘‘be cognizant that inaccurate

testimony or statements sometimes may result from confusion, mistake, or faulty memory.’’ U.S.S.G. app. C, amend.

566. This court construed the amendment to mean that while

proof of perjury by clear and convincing evidence had formerly been required, such allegations could now be proven by a

preponderance of the evidence. See United States v. McCoy,

242 F.3d 399, 407 n.14 (D.C. Cir. 2001) (citing United States v.

Dozier, 162 F.3d 120, 124 n.1 (D.C. Cir. 1998)). Second, in

November 1998, Section 3C1.1 and its Application Notes were

both amended to clarify that the enhancement could be

applied if the perjury ‘‘related to TTT the defendant’s offense

of conviction and any relevant conduct.’’ U.S.S.G. app. C,

amend. 581 (emphasis added). Prior to that amendment, this

court had held that an enhancement for perjury could apply

only for perjury relating to the offense of conviction itself.

United States v. Barry, 938 F.2d 1327, 1333 (D.C. Cir. 1991).

Nowhere, however, does Smith show how these amendments actually disadvantage him — a showing that he is

required to make: ‘‘For purposes of ex post facto analysis, the

question is whether, if applied retroactively, the amendment

would effect any pertinent substantive change that disadvantages the defendant.’’ United States v. Clark, 8 F.3d 839, 844

(D.C. Cir. 1993); see also United States v. Harris, 41 F.3d

1121, 1123 (7th Cir. 1994) (no ex post facto violation because

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defendant ‘‘failed to show that he suffered any detriment as a

result of the district court’s application of the Guidelines

which were in effect at the time of sentencing’’). The district

court adopted the stricter evidentiary standard for its perjury

determination, so Smith was not prejudiced by the November

1997 change. Resentencing Op. at 11 (‘‘Perjury must be

found by clear and convincing evidence.’’) (citing United

States v. Montague, 40 F.3d 1251, 1254 (D.C. Cir. 1994)).

Similarly, the perjury finding that we affirm herein relates

solely to Smith’s offense of conviction, and thus would be

justified under either set of Guidelines. We therefore conclude that the outcome of this case would be the same

whichever set of Guidelines is used. That being so, no ex post

facto problem arises from applying the 2002 Guidelines, and

there is no basis to depart from the default rule that the

Guidelines in effect at the time of sentencing should apply.

See 2002 U.S.S.G. § 1B1.11(a).

B. Perjury Enhancement

Under United States v. Dunnigan, 507 U.S. 87, 94 (1993),

an enhancement for perjury at trial under Section 3C1.1 of

the Guidelines can be imposed only if the district court finds

that the defendant gave ‘‘false testimony concerning a material matter with the willful intent to provide false testimony,

rather than as a result of confusion, mistake, or faulty memory.’’ The district court held that on three occasions during

the trial, Smith gave testimony that satisfied the requirements of falsity, materiality, and willfulness.

The first was during Smith’s testimony about the fake lease

that he created to help Reid win approval for the mortgage

on the Columbia Road house. Smith ‘‘testified that his

mother was completely unaware that her name was being

bandied about TTT as a purported lessee of Reid’s Upper

Marlboro home,’’ Resentencing Op. at 11, but he also testified

as follows:

Q: And you were actually going to move [your mother]

into [Reid’s home] if necessary?

A: Well, the truth of the matter is that was a possibility

because her house needs to be rehabed [sic]. We’ve

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talked about it a number of times, and I think I

probably could have convinced her to do that at that

time.

Trial Tr. (May 10, 2000), at 146. The district court ruled that

this testimony was false, noting that it was ‘‘unclear who the

‘we’ in that sentence is: it could not have been his mother,

TTT and it could not have been Reid, who testified that he did

not know who Florence Ricks was or if she even existed when

the lease was executed.’’ Resentencing Op. at 12. The court

also found that the testimony was ‘‘material TTT because it

went to defendant’s credibility’’ and that it was willful, noting

that all three Dunnigan factors were satisfied by clear and

convincing evidence. Id. at 12, 14.

Although the district court found that this first instance of

perjury was ‘‘entirely adequate’’ to support the two-level

enhancement that it imposed under Section 3C1.1, it held that

Smith had committed perjury on two other occasions. Id. at

14–15. One of those instances was Smith’s testimony about

steps he took to help provide interim office space for BTC in

a District of Columbia government building while BTC was

awaiting approval for a new permanent location. As the

district court noted, Smith initially ‘‘testified that he probably

was not in town at the time this happened, and might not

have spoken to his staff about the issue.’’ Id. at 14 (citing

Trial Tr. (May 11, 2000), at 37–38). Subsequently, when

confronted with evidence that he had signed a check on the

day of BTC’s move to the interim space, Smith admitted that

he had not been out of town, see Trial Tr. (May 11, 2000), at

40; the district court concluded that Smith’s initial testimony

was false, material, and willful. Resentencing Op. at 14.

The final instance of testimony that the court deemed

perjurious was Smith’s explanation of a check for $1415.95

that included the notation ‘‘XMAS — Disney.’’ The evidence

at trial showed that when Reid purchased the house in

December 1994, Smith gave a cashier’s check to a title

company in the amount of $9405.95. According to the records

of the bank that issued the cashier’s check, the funds came

from an $8000 check drawn on Smith’s own credit union

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account and a $1415.95 check from a company Smith owned

called SAGA Adventures (reduced by a $5.00 cash withdrawal

and a $5.00 service charge). On the witness stand, Smith

insisted that the SAGA Adventures check — which bore the

Disney notation — was used to pay for ‘‘a Disney excursion

that left Washington taking some disabled folks.’’ Trial Tr.

(May 10, 2000), at 152. The district court concluded that this

testimony was ‘‘false and disproved by the documentary

evidence,’’ as well as material and not the result of confusion

or faulty memory. Resentencing Op. at 15.

Smith argues that the court erred in finding perjury in

these three instances because, in each instance, none of the

Dunnigan requirements was satisfied. We review sentencing

decisions under a now-familiar trichotomy: ‘‘purely legal

questions are reviewed de novo; factual findings are to be

affirmed unless ‘clearly erroneous’; and we TTT give ‘due

deference’ to the district court’s application of the guidelines

to [the] facts.’’ United States v. Kim, 23 F.3d 513, 517 (D.C.

Cir. 1994).

We affirm the two-level enhancement for Smith’s perjury,

based on his testimony regarding the purported Disney

check. The district court did not clearly err in finding by

clear and convincing evidence that Smith’s testimony about

the check was false: the documentary evidence demonstrated

the origins of the $9405.95 check to the title company with so

much precision that there was no error in refusing to credit

Smith’s insistence that the money was instead used for a trip

to Disney World. Indeed, although Smith made passing

reference in his testimony to documents in his possession that

would confirm the Disney story, see Trial Tr. (May 10, 2000),

at 152, it appears that no such documents were ever entered

into evidence during trial. On appeal, Smith points only to

the fact that SAGA Adventures was, in general, a company

that ‘‘organized excursions to places such as Disney World on

behalf of disabled individuals,’’ Appellant’s Br. at 22; that

general observation does not explain away the fact that the

check used to purchase the title-company check was for an

amount identical to the amount of the particular SAGA check

that was the focus of Smith’s testimony.

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The SAGA check was clearly material to the charge of

conspiracy to commit a conflict of interest, because the truth

or falsity of the Disney notation shed light on whether Smith

took steps to hide his role in the purchase of the house where

Braxtonbrown–Smith lived — that is, on Smith’s alleged

criminal intent. Finally, the testimony was clearly willful:

Smith had several opportunities to clarify or retreat from his

stance that the money was used for a Disney excursion, but

he steadfastly refused to do so. In response to a specific

question about whether he used the SAGA check to purchase

the title check, Smith answered, ‘‘No, I did not do that.’’

Trial Tr. (May 10, 2000), at 152; see also id. (‘‘That check is

in reference to a Disney excursion that left Washington

taking some disabled folks.’’). The prosecution pursued the

issue further, emphasizing in detail the correlation between

the amount of the alleged Disney check and the subsequent

cashier’s check to the title company and asking, ‘‘[Do] you

dispute that that $1,400 check on the screen in front of you

was used as part TTT of this cashier’s check?’’ Id. at 153.

Smith answered, ‘‘I dispute the fact that you’re saying that I

used this check. I’m saying TTT the cash that was used out of

this check was for a trip to Disney.’’ Id. And when asked

pointedly whether the Disney notation was on the check to

hide his involvement in buying the house, Smith said ‘‘No,

sir.’’ Id.

Smith argues that because, at one point during this testimony, he uttered the phrase, ‘‘[I]f my memory serves me

correct,’’ id. at 152, each of the statements regarding the

SAGA check was simply a result of faulty memory — and

therefore, under the express terms of Dunnigan, not willful.

In context, however, Smith’s reference to his possibly faulty

memory pertained not to the SAGA check at all, but rather to

the $8000 personal check that accounted for the other portion

of the $9405.95 cashier’s check. Id. (‘‘I did get $8000 out of

my credit union account, and if my memory serves me

correct, and my files are over there, I do have receipts to

support that.’’). Even if his offhand reference to his memory

could be read to qualify the first of his statements that the

SAGA check was used for an innocuous Disney excursion, it

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would not undercut the several subsequent statements about

the SAGA check, which were increasingly definitive — unadorned by caveats or qualifications.

C. Vulnerable Victim Enhancement

The district court based its two-level enhancement for

vulnerable victims on a finding that ‘‘Smith exploited and

used his power over mentally retarded adults to realize

personal financial gains to their detriment.’’ Initial Sentencing Op. at 15; see also Resentencing Op. at 4 (court adopts

the initial opinion’s factual and legal support for vulnerable

victim and role in the offense enhancements).1

 We affirm the

enhancement.

The district court did not clearly err in finding that Smith’s

MRDDA clients were harmed when he referred them to

BTC: the testimony of several witnesses indicated that the

treatment of patients at BTC was substandard. Jacquelin

Smith, an MRDDA employee (no relation to appellant), testified about a negative report that she wrote after a May 1994

visit to BTC, cataloging numerous deficiencies in the program’s record-keeping and activities. Trial Tr. (May 4, 2000),

at 113–17. Ms. Smith’s report concluded with the ‘‘overall

impression’’ that BTC was ‘‘not meeting the individual needs

of the customers.’’ Id. at 116. On the stand, Ms. Smith

stated that she could not recall ever having written a report

so critical of a day program. Id. at 117. A former BTC

1 The district court initially suggested that the vulnerable victim

and role in the offense enhancements were ‘‘not before [it] on

remand’’ because our opinion in Smith I did not address either of

those enhancements. Resentencing Op. at 3–4. Ultimately, however, the district court did not simply rest on its assumption that

these enhancements were off-limits. Rather, the court explained

why the enhancements applied to the conflict of interest charges,

stating that ‘‘[w]hile the object offense of the conspiracy has

changed, the facts supporting the two adjustments have not. Nor

does the change in the predicate offense affect the Guidelines

provisions.’’ Id. at 4. We conclude that the district court gave due

consideration to the applicability of the enhancements to the

changed predicate offense.

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employee named Juanita Cook, who had begun work at the

company more than six months after Ms. Smith’s report,

testified that the staff was ‘‘minimal’’ and that many of the

staff members ‘‘were not trained to work with developmental[ly] disabled clients.’’ Trial Tr. (May 8, 2000), at 60. She

added that BTC ‘‘didn’t have appropriate materials and supplies to work with the clients,’’ and that ‘‘[t]he documentations

and records were not in very good shape.’’ Id.

We further agree with the district court that these harmful

referrals are ‘‘relevant conduct’’ for appellant Smith’s conflict

of interest offense, and that the requirements for an enhancement under Section 3A1.1 of the Guidelines are satisfied.

That section states, in pertinent part, that a vulnerable victim

is ‘‘a victim of the offense of conviction and any [relevant

conduct] TTT who is unusually vulnerable due to TTT mental

condition, or who is otherwise particularly susceptible to the

criminal conduct.’’ 2002 U.S.S.G. § 3A1.1 App. Note 2; see

also 1995 U.S.S.G. § 3A1.1(b) (enhancement applies when ‘‘a

victim of the offense was unusually vulnerable due to TTT

mental condition, or TTT otherwise particularly susceptible to

the criminal conduct’’).2

 There is little doubt that MRDDA

2 Smith emphasizes that the 1995 Guidelines mention only the

offense, thus suggesting that relevant conduct is not a basis for the

Section 3A1.1 enhancement under that version of the Guidelines.

See Reply Br. at 12. But this allegation of a discrepancy between

the 1995 and 2002 versions of the Guidelines fails. The word

‘‘offense’’ in the 1995 Guidelines — indeed, in every version of the

Guidelines — is a term of art defined to include relevant conduct.

See 1995 U.S.S.G. § 1B1.1 App. Note 1(l) (‘‘ ‘Offense’ means the

offense of conviction and all relevant conduct TTT unless a different

meaning is specified or is otherwise clear from the context.’’).

Section 3A1.1 was amended in 1997 to spell out what eight circuits

had held the Guidelines already provided — that the word ‘‘offense’’

in that section included relevant conduct. See U.S.S.G. app. C,

amend. 564; THOMAS W. HUTCHISON ET AL., FEDERAL SENTENCING LAW

AND PRACTICE § 3A1.1, at 1155–56 & n.34 (2004) (listing cases).

Only one circuit had disagreed, see United States v. Wright, 12 F.3d

70, 73–74 (6th Cir. 1993), and we had not decided the issue. Given

this background, Smith cannot carry his burden of showing that the

amendment changed the law to his disadvantage.

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clients were vulnerable to Smith’s conflict-laden referral

scheme: due to their mental condition and the reliance that

they placed on MRDDA, they were in no position to recognize

that the treatment they received at BTC was substandard.

D. Role in the Offense Enhancement

Smith argues that the two-level enhancement for his role as

organizer or leader of the offense, under Section 3B1.1 of the

Guidelines, was unwarranted. Given the deference we accord

to the district court’s application of the Guidelines to the

facts — we use a standard of review that is ‘‘somewhere

between de novo and ‘clearly erroneous,’ TTT something akin

to the review we give administrative agency determinations of

such mixed questions,’’ Kim, 23 F.3d at 517 — we affirm the

enhancement.

Section 3B1.1 provides for a two-level enhancement if the

defendant was ‘‘the organizer, leader, manager, or supervisor

of one or more other participants.’’ 2002 U.S.S.G. § 3B1.1

App. Note 2; see also id. § 3B1.1(c). The district court

based its decision to enhance on two principal findings: first,

that Smith ‘‘directed Terry Reid in the submission of false

representations to the mortgage lender,’’ and second, that

Smith had ‘‘superior bargaining power over Braxtonbrown–

Smith.’’ Initial Sentencing Op. at 18. From our deferential

viewpoint, the court properly applied the enhancement for

Smith’s role in the scheme to hide his interest in the Columbia Road house (including the fraud on the bank in obtaining

the mortgage) and his direction of Reid in carrying out that

scheme.

The Sentencing Guidelines list a number of factors for a

sentencing court to consider when deciding whether to apply

an enhancement for a defendant’s role as organizer or leader:

they include

the exercise of decisionmaking authority, the nature of

participation in the commission of the offense, the recruitment of accomplices, the claimed right to a larger

share of the fruits of the crime, the degree of participation in planning or organizing the offense, the nature

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and scope of the illegal activity, and the degree of control

and authority exercised over others.

2002 U.S.S.G. § 3B1.1 App. Note 4; see also United States v.

Kelley, 36 F.3d 1118, 1129 (D.C. Cir. 1994). Reid’s testimony

showed that a number of these factors are present here.

Smith recruited Reid to participate in the scheme: when Reid

initially told Smith of his interest in purchasing rental property, Smith told him that purchasing the Columbia Road property ‘‘would be a TTT good investment TTT because [Braxtonbrown–Smith was] staying there.’’ Trial Tr. (May 5, 2000), at

59. Smith exercised more decisionmaking authority than

Reid, and was the driving force in planning and organizing

the offense: when Reid applied for the mortgage, the decision

to falsely state that Reid would be living in the house was

‘‘Mr. Smith’s decision.’’ Id. at 61. The side agreement that

created the tenancy in common between Reid and Smith left

it entirely up to Smith to record the corresponding deed at a

time of his choosing. Id. at 75. Reid admitted that he did

not fill out the mortgage application himself; it was ‘‘filled out

for [him],’’ and Smith had handed it to him, so he ‘‘assumed

that [Smith] probably had filled it out.’’ Trial Tr. (May 8,

2000) at 11.

Smith’s participation in the offense was also much more

significant than Reid’s. Reid in fact testified that he had

‘‘never seen’’ Braxtonbrown–Smith. Id. at 39. The fake

lease between Reid and Ricks, designed to facilitate Reid’s

mortgage, was created by Smith. Trial Tr. (May 5, 2000), at

63, 94. After Reid became the record owner of the house,

Smith presented him and Braxtownbrown–Smith with the

agreement governing Braxtonbrown–Smith’s continued tenancy. Id. at 73. When Braxtonbrown–Smith was behind in

her rent — on a house nominally owned by Reid alone — it

was nonetheless Smith who drafted correspondence and ‘‘presented it’’ to Reid for a signature. Id. at 82.

‘‘All persons receiving an enhancement [under Section

3B1.1] must exercise some control over others,’’ United States

v. Graham, 162 F.3d 1180, 1185 (D.C. Cir. 1998), and that

requirement is satisfied in this case. When Reid was asked

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why he indicated on the loan application that he would occupy

the house on Columbia Road, he responded, ‘‘I was told I

needed to check that box.’’ Trial Tr. (May 8, 2000), at 34.

And as Reid explained in response to a general question

about the real estate deal near the end of his testimony, the

house ‘‘means nothing to meTTTT [In] the process of flipping

[the] house over TTT I just followed that instruction.’’ Id. at

35; see also id. at 38 (‘‘These terms were presented to me by

[Smith].’’). In light of the evidence, we cannot say that the

district court’s conclusion — that Smith was the organizer of

the scheme and exercised sufficient control over Reid to

warrant a sentence enhancement — exceeds the limits of our

deference.

E. Upward Departure

We turn finally to Smith’s argument that the two-level

upward departure under Section 5K2.0 of the Guidelines was

improper. The government argues that Smith has waived

any challenge to the court’s authority to depart upward, and

we agree. In his memorandum to the court during resentencing, Smith straightforwardly stated: ‘‘Though he does not

believe that such is warranted, assuming the Government so

moves, the Defendant recognizes the Court’s ability to impose

an upward departure pursuant to U.S.S.G. § 5K2.0 for loan

fraud.’’ Def.’s Mem. in Aid of Sentencing (Feb. 15, 2002), at

12. This concession was, as Smith points out, apparently

contingent on a government motion for an upward departure,

and the government chose not to file such a motion. Later in

the same document, however, Smith stated unconditionally

that ‘‘the Court may choose to depart upward.’’ Id. at 14.

This waiver of objections to the fact of departure may have

been influenced by our decision in Smith I, which found the

upward departure for the uncharged loan fraud ‘‘well supported by the record.’’ 267 F.3d at 1166.

Having also approved, in Smith I, the district court’s

methodology for selecting the extent of the upward departure, we affirm the two-level upward departure that the court

imposed at resentencing as within the district court’s discretion. In doing so, we need not reach the issue of enhanceUSCA Case #03-3087 Document #837249 Filed: 07/20/2004 Page 16 of 17
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ment for perjury in relation to the uncharged bank fraud; we

instead affirm the two-level ‘‘enhancement’’ for more than

minimal planning, which Smith does not contest, see Appellant’s Br. at 24 n.12, and the two-level ‘‘enhancement’’ for

Smith’s role as an organizer or leader, for the reasons discussed above.3

* * *

The sentence imposed by the district court is affirmed.

3 With the perjury enhancement for the uncharged bank fraud

omitted, the district court’s methodology for calculating the extent

of the upward departure still yields a departure of two levels. As

the district court found, a hypothetical conviction for the bank fraud

would have constituted a separate ‘‘group’’ from the conspiracy and

substantive conflict of interest offenses, for purposes of the Guidelines’ grouping rules, because the bank fraud involved a different

victim. Resentencing Op. at 17; see 2002 U.S.S.G. §§ 3D1.1,

3D1.2(a). In the district court’s calculation, the offense level for the

group containing the conspiracy and conflict of interest offenses was

level twelve, and the hypothetical offense level for the group

containing the bank fraud was also twelve. See Resentencing Op.

at 16. Under our calculation, the offense level for the first group is

level twelve, and the hypothetical offense level for the second group

is ten (because we do not address the two-level enhancement for

perjury in relation to the uncharged bank fraud). With one group

at level twelve and a second group at level ten, each group

constitutes one ‘‘unit’’ under the Guidelines. See 2002 U.S.S.G.

§ 3D1.4(a) (group with highest offense level constitutes one unit,

and any other group up to four levels less serious counts as one

additional unit). The same was true — that is, each group constituted a single unit — when the district court included a two-level

perjury enhancement for the uncharged bank fraud; in other

words, the two-level difference between the district court’s calculation and our calculation does not alter the fact that the bank fraud

constitutes a separate unit from the conflict of interest unit. See id.

These two units, in turn, would yield an enhancement of two levels

if the bank fraud were not merely hypothetical. See id. § 3D1.4.

Under the district court’s methodology, the upward departure

under Section 5K2.0 of the Guidelines would thus be the same two

levels.

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