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Parties Involved:
Dorothy Quigley
Appellant
United States of America
Appellee

Document Text:

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

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued May 10, 2004 Decided July 6, 2004

No. 03-3059

UNITED STATES OF AMERICA,

APPELLEE

v.

DOROTHY QUIGLEY,

APPELLANT

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.

 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: 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

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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

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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.

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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-thanminimal planning. When asked to address the role enhanceUSCA Case #03-3059 Document #833929 Filed: 07/06/2004 Page 5 of 12
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ment 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 it not correct that in the Golden

trial there was extensive testimony about Ms. Quigley

calling Mr. Golden to make arrangements for the false

appraisals and to pay him money for those appraisals?

MS. CHEATHAM: Yes.

THE COURT: My memory may not be right about this

but over the many proceedings we’ve had in these cases,

ranging from statuses to guilty pleas to sentencing, et

cetera, I certainly came away with the impression–maybe

it was wrong–that Miss Quigley was indeed the brains

and the organizer behind this very complex conspiracy.

Is that the Government’s view or not?

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MS. CHEATHAM: Answering just regarding the facts

and not the legal consequences of the facts, I think the

answer is yes, partly because the real estate agent often

does that in either a legal or illegal real estate transaction. Often, the real estate agent is the one who has the

charisma, has personality, who can draw people from

various sources to make a deal happen. Typically that’s

what we see in real estate agents in general and I think

that it would be accurate to say that that’s what happened here. And, of course, it’s our contention that this

was an illegal real estate transaction.

The court also asked the probation officer about whether

an ‘‘organizer’’ role enhancement should apply to Quigley:

THE COURT: Had you considered the issue of whether

3(b)1.1 applied?

MS. LUBINSKY: We did, your Honor. I had myself

Mr. John Quigley and Daniel Page and when we first got

this case we kind of looked at all of those people as

independent contractors who kind of did their own thing.

Like George Daniel Page fixed up the buildings and that

was his thing and it wasn’t something that–I mean Miss

Quigley may have depended on that but she didn’t necessarily supervise or manage him. At the time, we didn’t

see it that way and I don’t know if I necessarily see it

that way now, but I do see where the Court can gather

that from the facts.

We were just kind of looking at everybody in their own

independent—

THE COURT: Well, of course, it isn’t just being a

manager or supervisor. Subsection (a) uses the term

organizer or leader. I would certainly agree with you

that based on all the evidence that I’ve heard and the

pleas that I’ve taken, I don’t think the term manager or

supervisor applies, no.

The court eventually decided to add the four-level organizer role enhancement to Quigley’s sentence, increasing her

offense level from 15 to 19:

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I do conclude based on all of my exposure to the facts of

this conspiracy–the trials, the pleas, all of which had

statements of fact appended to them, the representations

by the Government–that Miss Quigley was certainly an

organizer or leader of the criminal activity. I think

perhaps a more accurate word, which is not a word used

in the guideline, is an orchestrator of the activity. I see

her as the hub of this conspiracy. There were many

spokes to it, from Mr. Golden, who made phony appraisals, to Miss Clark, who I do know and I recognize that

Miss Quigley didn’t directly deal with, to Mr. Page, who

worked on the properties and in some instances found

them, but there is no question that Miss Quigley was at

the center and the heart of the conspiracy.

TTT

Miss Quigley essentially, with her smarts and her

business acumen and her organizational skills, put it all

together and made it all work, and that’s why I think the

four levels under 3(b)1.1 are appropriate in this case.

The court decided to depart downward an additional two

levels based on Quigley’s assistance to the government, leaving her with a final offense level of 17. That put Quigley in

the twenty-four-to-thirty-month guideline range. The district

court sentenced her to twenty-seven months’ imprisonment.

This appeal followed.

II.

The issue in this appeal is whether, giving all ‘‘due deference’’ to the district court’s application of the sentencing

guidelines to the facts of this case, see United States v.

Wilson, 240 F.3d 39, 47 (D.C. Cir. 2001), the court nonetheless erred in imposing the sentencing enhancement pursuant

to USSG § 3B1.1(a). With all respect to the difficult role of

the sentencing court, we hold that it did.

Section 3B1.1, entitled ‘‘Aggravating Role,’’ provides:

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Based on the defendant’s role in the offense, increase the

offense level as follows:

(a) If the defendant was an organizer or leader of a

criminal activity that involved five or more participants

or was otherwise extensive, increase by 4 levels.

(b) If the defendant was a manager or supervisor (but

not an organizer or leader) and the criminal activity

involved five or more participants or was otherwise extensive, increase by 3 levels.

(c) If the defendant was an organizer, leader, manager,

or supervisor in any criminal activity other than that

described in (a) or (b), increase by 2 levels.

In addition, Application Note 4 to § 3B1.1 further explicates the meaning of ‘‘organizer or leader’’:

In distinguishing a leadership or organizational rule from

one of mere management or supervision, titles such as

‘‘kingpin’’ or ‘‘boss’’ are not controlling. Factors the

court should consider include [1] the exercise of decision

making authority, [2] the nature of the participation in

the commission of the offense, [3] the recruitment of

accomplices, [4] the claimed right to a larger share of the

fruits of the crime, [5] the degree of participation in

planning or organizing the offense, [6] the nature and

scope of the illegal activity, and [7] the degree of control

and authority exercised over others.

As her counsel made clear at oral argument, Quigley does not

challenge that the conspiracy at issue here involved ‘‘five or

more participants or was otherwise extensive.’’ Quigley’s sole

claim is instead that the evidence does not support that she

was an ‘‘organizer or leader’’ of that conspiracy.

Quigley argues that the evidence adduced below does not

show that she controlled any participant in the scheme.

Quigley notes, quite correctly, that the district court found

that she did not ‘‘manage or supervise’’ anyone in the conspiracy, thus making her ineligible for a three-level role enhancement under § 3B1.1(b), yet nevertheless concluded that

Quigley was an organizer or leader under § 3B1.1(a), and

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therefore eligible for an even-higher four-level enhancement.

In light of that finding, Quigley says, at most, she ‘‘managed’’

or ‘‘controlled’’ property transactions, rather than people, a

less-culpable role that Application Note 2 of the commentary

to § 3B1.1 says renders a § 3B1.1(a) role enhancement inappropriate.

The government answers that there is evidence that Quigley did in fact control other members of the conspiracy. The

government says that Quigley controlled the property buyers

because she recruited them and told them how to trick the

FHA into insuring their loans. The government also claims

that Quigley controlled the appraisers, as she told them the

false appraisal value to employ and solicited them. Moreover, the government continues, Quigley’s other conduct satisfied some of the other seven factors identified in Application

Note 4. Specifically, the government points to the breadth of

the scheme, Quigley’s recruitment of buyers and selection of

potential properties, and the fact that it is ‘‘fair to infer’’ that

Quigley profited more from the scheme than the other participants.

Quigley has the better of this debate. There is simply no

evidence that Quigley exercised control over any of the other

participants in this scheme. As we have recognized, ‘‘[a]ll

persons receiving an enhancement [under § 3B1.1] must exercise some control over others.’’ United States v. Graham,

162 F.3d 1180, 1185 (D.C. Cir. 1998).

Guideline § 3B1.1 orders conspirators based on their ‘‘relative responsibility’’ for the conspiracy. USSG § 3B1.1 cmt.

background. It represents a policy judgment that the more

control (that is, responsibility) the offender exercises over the

conspirators, the more culpable that offender is, and the

greater sentence she deserves. See Graham, 162 F.3d at

1185 n.5. As we noted in Graham, § 3B1.1 ‘‘creates three

relevant tiers for conspiracies that are ‘extensive’: a tier for

leaders and organizers, a tier for managers and supervisors,

and a tier for everyone else,’’ and that these levels ‘‘differ

only in degree rather than in kind.’’ Id. at 1185. Given that

tiered structure, an offender is eligible for a four-level role

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enhancement as an organizer or leader under § 3B1.1(a) only

if she would also be eligible for a three-level role enhancement as a ‘‘manager or supervisor’’ under § 3B1.1(b).

We read subsection (b) to sweep in lower level managerial

and supervisory conduct, and subsection (a) to encompass

higher level managerial and supervisory conduct. It stands

to reason that one more responsible, that is, higher up in the

organization’s hierarchy, than a manager or supervisor for a

conspiracy would herself have managerial or supervisory

authority of some sort. True, not everything organizers or

leaders do is manage or supervise; the formulation of grand

strategy, for example, is not management or supervision, yet

is surely something many organizers or leaders do. That

fact, however, only highlights why the guidelines punish

organizers and leaders more severely than they do managers

and supervisors. We are confident that all organizers or

leaders of a conspiracy qualify as managers or supervisors

under § 3B1.1(b).

The government’s reliance on Application Note 4 actually

supports this proposition. That note ‘‘governs in cases in

which the court must distinguish an organizer or leader from

a manager or supervisor.’’ Graham, 162 F.3d at 1185 n.5.

The wording and structure of Application Note 4 raises a

strong implication of a hierarchical relationship between the

two roles. The first clause of that application note ‘‘distinguish[es] a leadership and organizational role from one of

mere management or supervisionTTTT’’ (Emphasis added).

An application note guiding the distinctions between two

levels of enhancement which refers to one as ‘‘mere’’ and

recites a list of factors inclusive of degrees of such factors as

participation and planning, organizing, controlling, and exercising authority over others, is at the very least strongly

suggestive of a hierarchical relationship between the two.

This relationship between subsections (a) and (b) is crucial

to this case because, as Quigley’s brief stresses, the district

court found, and the record supports, Quigley was not even a

manager or supervisor within the meaning of § 3B1.1(b).

Entirely lacking on the record before us is any evidence that

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Quigley had any sort of hierarchically superior relationship

with the persons who were purportedly her subordinates.

We understand the concept of ‘‘control’’ or ‘‘authority,’’ implicit in the notion of ‘‘management’’ or ‘‘supervision,’’ to

connote some sort of hierarchical relationship, in the sense

that an employer is hierarchically superior to his employee.

The district court failed, however, to require any proof that

Quigley was hierarchically superior to her co-conspirators.

Instead, the district court focused its inquiry upon whether

Quigley was the ‘‘hub’’ or ‘‘orchestrator’’ of the conspiracy.

Because the district court applied the four-level enhancement

for organizers and leaders, even though it found the threelevel enhancement for managers and supervisors was inapplicable, and because it applied an incorrect legal standard to

determine whether the four-level role enhancement applied,

the district court erred in adding a four-level role enhancement for organizers and leaders to Quigley’s offense level.

III.

For the reasons expressed above, we reverse the district

court’s imposition of a four-level organizer role enhancement

under § 3B1.1(a), vacate Quigley’s sentence, and remand the

case to the district court for resentencing.

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