Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-90-06235/USCOURTS-ca10-90-06235-0/pdf.json

Parties Involved:
Michael L. Johnson
Appellant
United States of America
Appellee

Document Text:

PUBLISH 

FILED 

United States Court of Appeals 

Tenth Ci:-cl"it 

UNITED STATES COURT OF APPEALS AUG 15 1991 

TENTH CIRCUIT 

UNITED STATES OF AMERICA, ) 

) 

Plaintiff-Appellee, ) 

) 

v. ) 

) 

MICHAEL L. JOHNSON, ) 

) 

Defendant-Appellant. ) 

No. 

ROBERT L. HOECKER 

Clerk 

90-6235 

ON APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE WESTERN DISTRICT OF OKLAHOMA 

(D.C. No. CR-90-36-A) 

Robert E. Mydans (Timothy D. Leonard, United States Attorney, and 

Barbara E. Poarch, Special Assistant United States Attorney, on 

the brief), Oklahoma City, Oklahoma, for Plaintiff-Appellee. 

Susan M. Otto, Assistant Federal Public Defender (William P. 

Earley, Assistant Federal Public Defender, on the brief), Oklahoma 

City, Oklahoma, for Defendant-Appellant. 

Before BRORBY and EBEL, Circuit Judges, and KANE,* Senior District 

Judge. 

BRORBY, Circuit Judge. 

* The Honorable John L. Kane, Jr., 

District Judge for the District of 

designation. 

Senior United States 

Colorado, sitting by 

Appellate Case: 90-6235 Document: 01019667180 Date Filed: 08/15/1991 Page: 1 
( 

Michael L. Johnson (hereinafter Defendant) appeals his 

conviction and sentence for mail fraud and equity skimming. One 

issue in this appeal concerns whether the prosecution (hereinafter 

Government) violated Defendant's Fifth Amendment rights because 

the Government excluded potential jurors who, like Defendant, are 

African-American ("black"). The remaining arguments in this 

appeal take exception to the federal district court's application 

of the federal Sentencing Guidelines. 

Before addressing the legal issues, a brief and generalized 

summary of the case is desirable. 

I 

Defendant wanted to become a prosperous businessman by 

acquiring income-producing real estate. In early 1988, Defendant 

responded to a newspaper advertisement listing for sale various 

residential properties owned and rented out to tenants by Baer 

Realty. 1 After several meetings with Baer representatives, 

Defendant purchased eighteen homes in Oklahoma. 2 The homes all 

carried mortgages held by a single mortgage company, and were 

insured against default by the United States Department of Housing 

and Urban Development. 

1 Baer Realty is a real estate brokerage firm and property 

management company with offices in New Mexico and Oklahoma. It 

operates under various names, but is referred to in this opinion 

only as Baer Realty. 

2 The parties agree Defendant purchased eighteen homes, 

although the briefs only specifically list eleven properties. 

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Baer Realty agreed to sell its homes to Defendant after 

verifying he was steadily employed and had no unfavorable credit 

history. Baer also required a business plan from Defendant, 

outlining how he would manage the properties. Defendant knew 

before purchasing that the properties were losing money. Although 

Defendant at one time discussed converting the homes into 

properties for federally subsidized low-income tenants, he 

apparently never took any action on this idea. 

The terms by which Defendant purchased the homes were 

generous, and reflected his desire to buy only properties where he 

could legally just assume the loan from Baer and take title. 

Defendant paid no money up front and did not pay the closing 

costs. Given these terms, Defendant bought over $400,000 worth of 

property with no money down even though his income as a State of 

Oklahoma employee was only $1,200 per month. At the closing, 

Defendant also received a check covering the security deposits on 

each of the properties. 

After acquiring the homes, Defendant notified all the tenants 

to start mailing their rent checks to him. Some did, although 

others simply stopped paying. There was testimony at trial 

explaining that when Defendant received rent, he got it through 

the mail from tenants who mailed their checks to him. 

Defendant never made a single mortgage payment on any of the 

properties, even though he collected a total of over $16,000 in 

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rent from the tenants who continued to pay. Defendant put less 

than $2,000 into work on the properties. As for the rest of the 

money, Defendant apparently spent some of it to pay off an 

approximately $4,000 loan stemming from a failed concert promotion 

deal. He spent other rent money on clothing, jewelry, and 

furniture for himself even though his rental income was the only 

money he had to meet the mortgage payments he was legally required 

to make. 

Defendant defaulted on all of the properties and the lending 

institution foreclosed. Defendant was convicted of ten counts of 

mail fraud, and one count of equity skimming and sentenced to 

thirty months imprisonment on each count, to be served 

concurrently. Defendant was also fined $5,000, plus an additional 

$550 special assessment. See 18 u.s.c. § 1341 (mail fraud 

statute); 12 u.s.c. § 1709-2 (equity skimming statute). Having 

reviewed the background, we now turn to the matters on appeal. 

II 

Defendant's first issue concerns the racial makeup of the 

jury that convicted him. Defendant is black, and because the 

Government used peremptory challenges to exclude the only two 

blacks who were in the final pool, or petit venire, from which 

Defendant's jury was selected, Defendant alleges he was denied his 

implicit Fifth Amendment right to equal protection under the law. 3 

3 See,~' Edmonson v. Leesville Concrete Co., U.S. ~-' 

111 s. Ct. 2077, 2080 (1991) (recognizing equal protection 

component of the Fifth Amendment's Due Process Clause applies in 

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He argues the Government's attempt to show a race-neutral reason 

for excluding the two black individuals from the jury venire is 

"insufficient," and further argues the record does not support the 

district court's ruling for the Government on this matter. He 

concludes 11 the prosecution removed those jurors solely on the 

basis of race and denied him equal protection and trial by a jury 

of his peers." We must decide whether Defendant's arguments have 

merit. 

A 

During the jury selection process, two prospective jurors who 

are black were called. In response to the trial court's inquiry 

concerning employment, the first potential black juror told the 

court she was a legal secretary who worked on fraud cases. The 

record reveals the following discussion concerning the potential 

juror's employment: 

[THE COURT:] Has anyone or anyone close to you had 

any personal experience in the past with a mail fraud or 

with an instance of at least alleged manipulation of 

mortgages? Well, I --

JUROR HALL: Well, on my job. I['m] working for 

[a] housing attorney and, of course, the biggest case is 

just started about the utilities, I'm involved in that 

because I work -- I'm secretary for one of the attorneys 

of Legal Aid. 

THE COURT: Yes, and Legal Aid of Western Oklahoma, 

right? So you probably sit there and read and type and 

federal civil suits when a party uses peremptory challenges to 

exclude potential jurors on account of race). See also Washington 

v. Davis, 426 U.S. 229, 239 (1976) (equal protection component of 

Fifth Amendment Due Process Clause applies to the federal 

government); Bolling v. Sharpe, 347 U.S. 497, 499 (1954). 

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discuss a great many related instances like this, is 

that correct? 

JUROR HALL: Yes. 

THE COURT: would that, Mrs. Hall, have any effect 

on your ability to sit here as an objective and detached 

juror? 

JUROR HALL: I don't think so, .it's not the same 

set of circumstances. I haven't had anything to do with 

the mortgage skimming or anything like that. 

THE COURT: All right. And of course, if you are 

selected as a juror in this case, Mrs. Hall, I'll 

instruct you that you can't go back to your office and 

ask your boss there at the Legal Aid of Western Oklahoma 

whether the Judge's instructions are correct or 

incorrect. 

JUROR HALL: No, sir. 

The only other potential black juror called to the venire 

panel revealed she had a relative who had been convicted of a 

criminal offense. The record reveals the following discussion 

with respect to the criminal conviction: 

[THE COURT:] Well, I'm not prodding or 

prying but must ask, because this is a criminal case, 

the question whether you or anyone close to you has ever 

been convicted of a criminal offense, other than a 

traffic-type violation? Minor infraction. 

Mrs. Crain? 

JUROR CRAIN: Yes, I have a brother that was 

convicted of a criminal offense. 

THE COURT: How long ago, ma'am? 

JUROR CRAIN: Eight years. 

THE COURT: And I'm sure this was very distressing 

for everybody in the family, but would that predispose 

you in favor of one side or another here? 

JUROR CRAIN: No. 

THE COURT: Do you think 

objective and detached as if that 

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you would be just as 

experience had not 

Appellate Case: 90-6235 Document: 01019667180 Date Filed: 08/15/1991 Page: 6 
occurred in your family? 

JUROR CRAIN: Yes. 

THE COURT: Thank you .... 

Following more questioning, the attorneys exercised their 

peremptory challenges. The Government used two of its six 

peremptories to strike the two black persons from the final jury. 

The trial judge realized the Government's action raised an equal 

protection question and called both sides to the bench for a 

conference. During this conference the judge prompted the 

Defendant's lawyer to make an objection and then allowed the 

Government to respond before ruling: 

THE COURT: 

make concerning 

Hall and Crain? 

Mr. Earley, have you any observation to 

the · implication of the challenges of 

MR. EARLEY: 

Government to 

removing them. 

Yes, Your Honor. I would request the 

state on the record the purpose for 

MRS. POARCH: I'm sorry, I can't hear. 

MR. EARLEY: I would request the Government to 

state on the record the purpose for removing Mrs. Hall 

and Miss Crain, the only two black jurors who were 

called on this panel. 

MRS. POARCH: As to -- you'll have to refresh my 

memory on the names, as to Mrs. Hall. 

THE COURT: Hall was the legal secretary. 

MRS. POARCH: Hall was the legal secretary working 

for Legal Aid, the Government's position with her 

association in a law practice, that she may already have 

some predisposition about either procedural aspects of 

the case or legal aspects of the case just by virtue of 

her experience in a law office. 

As to Miss Crain, on 

Government's concern, of course, 

relative that was convicted of a 

that would be extremely difficult. 

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the front row, the 

is having a close 

serious felony, that 

I know she expressed 

Appellate Case: 90-6235 Document: 01019667180 Date Filed: 08/15/1991 Page: 7 
that she would be capable of setting that aside but the 

Government feels that it would be extremely difficult to 

in fact set that aside and not be biased against the 

Government in the bringing of a criminal case, criminal 

charge. 

MR. EARLEY: Your Honor, I believe her responses to 

your question about whether or not she could be fair and 

impartial were in the affirmative, and she didn't show 

any hesitation in that respect. So if the Government's 

feelings were that strong, I would assume they would 

have challenged her for cause. 

THE COURT: Anything to say about Miss Hall, the 

legal secretary? 

MR. EARLEY: I believe that she also stated 

affirmatively that nothing about her occupation or work 

would have any effect upon her, and that her dealings 

with matters that are even closely related to this sort 

of activity were simply, I'll just define it, clerical, 

and would not have any bearing on her decision in this 

case. 

THE COURT: I'm not so sure everybody understands 

CBJatson, I don't in all its ramifications, but I think 

it's clear under CBJatson that the Government doesn't 

have to state anything that would be so strong as a 

basis for a challenge for cause. If there were that 

kind of basis, it would have been a challenge for cause 

and we wouldn't be talking about p[er]emptory challenges 

but, rather, the obligation that the Government has to 

come up with some articulable, objective explanation for 

the challenge that would be a reasonable explanation 

without regard to the race of the juror who was 

challenged. In Miss Hall's case, of course, we haven't 

any evidentiary presentation to this effect but we all 

know that Legal Aid of Western Oklahoma is, it is a 

thoroughly worthwhile organization that delivers legal 

services to indigent people, and her occupation is in 

the -- for the Housing Attorney there; so that, it seems 

to me, would be ample base for a p[er]emptory challenge 

without regard to the race. 

And with respect to Juror Crain, my recollection is 

that the Juror Phillips likewise had a brother who was 

convicted of a drug offense, and he was also challenged. 

And I think it's objectively reasonable in a criminal 

case that somebody who's had such event occur in the 

immediate family would be a less suitable juror, so I 

will accept the panel as it is. 

MR. EARLEY: 

record. 

May my objection be noted on the 

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THE COURT: It just was. 

B 

The Supreme Court, in Batson v. Kentucky, 476 U.S. 79 (1986), 

forged the modern Constitutional test for determining whether a 

jury is selected in a race-neutral manner. Borrowing from the 

proof model used in Title VII disparate treatment cases, the Court 

fashioned a process where the burden of producing evidence shifts 

at appropriate points from a defendant to the state. Id. at 94 

n.18. First, to establish a prima facie case of discrimination: 

(1) the defendant must show he is a member of a 

cognizable racial group, and that the prosecution has 

exercised peremptory challenges to remove members of a 

particular race from the venire; (2) the defendant is 

entitled to rely on the fact that peremptory challenges 

are a jury selection practice which permits 

discrimination by those who wish to discriminate; and 

(3) the defendant must show that these facts and other 

relevant circumstances raise an inference that the 

prosecutor used that practice to exclude the venire 

members from the petit jury on account of their race. 

United States v. Esparsen, 930 F.2d 1461, 1465 (10th Cir. 1991) 

(footnote omitted) (citing Batson, 476 U.S. at 96), petition for 

cert. filed 7/15/91 (S. Ct. No. 5163). 

The shift in production of evidence occurs in the next step 

after the defendant establishes a prima facie case. Although a 

defendant always carries the ultimate burden of persuasion, 476 

U.S. at 94 n.18, "[o]nce the defendant makes a prima facie 

showing, the burden shifts to the State to come forward with a 

neutral explanation" for the peremptory challenge. Id. at 97. 

Finally, after the trial court receives the state's explanation, 

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it then has "the duty to determine 

established purposeful discrimination." 

if the defendant has 

Id. (footnote omitted). 

Recently the Supreme Court clarified how an appeals court 

must scrutinize a trial court's implementation of Batson. See 

Hernandez v. New York, 111 s. Ct. 1859 (1991) (plurality opinion). 

At the outset, the first issue of whether a prima facie case of 

discrimination exists becomes moot whenever the prosecutor offers 

a race-neutral explanation for his peremptory challenges and the 

trial court rules on the ultimate factual issue of whether the 

prosecutor intentionally discriminated. Id. at 1866. As for our 

review, we analyze the prosecutor's explanation for his actions as 

a legal issue, while we review only for clear error the trial 

court's ultimate factual ruling on whether the prosecutor 

intentionally discriminated. Hernandez, 111 S. Ct. at 1865-66. 

As mentioned, the legal question 

prosecutor's explanation which comes 

we focus upon is the 

after the defendant 

establishes a prima facie case. "In evaluating the raceneutrality of an attorney's explanation, a court must determine 

whether, assuming the proffered reasons for the peremptory 

challenges are true, the challenges violate the Equal Protection 

Clause as a matter of law." Id. at 1866 (emphasis added). "At 

this step of the inquiry, the issue is the facial validity of the 

prosecutor's explanation. Unless a discriminatory intent is 

inherent in the prosecutor's explanation, the reason offered will 

be deemed race neutral. " Id. (emphasis added) . Moreover, the 

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disparate impact of a prosecutor's actions cannot, standing alone, 

establish an equal protection violation. Id. at 1867. 

Finally, we review the trial judge's ultimate decision on 

whether the Defendant proved discrimination by the prosecution. 

Because "the trial court's decision on the ultimate question of 

discriminatory intent represents a finding of fact of the sort 

accorded great deference on appeal," id. at 1868, we review the 

trial court's ultimate ruling only for clear error. According to 

the Court: 

In the typical peremptory challenge inquiry, the 

decisive question will be whether counsel's race-neutral 

explanation for a peremptory challenge should be 

believed. There will seldom be much evidence bearing on 

that issue, and the best evidence often will be the 

demeanor of the attorney who exercises the challenge. 

As with the state of mind of a juror, evaluation of the 

prosector's state of mind based on demeanor and 

credibility lies "peculiarly within a trial judge's 

province." Wainwright v. Witt, 469 U.S. 412, 428 

(1985), citing Patton v. Yount, 467 U.S. 1025, 1038 

( 19 84) . 

Id. at 1869. See, ~' Batson, 476 U.S. at 98 n.21 (a finding of 

intentional discrimination is a finding of fact entitled to 

appropriate deference on appeal) (citing Anderson v. Bessemer 

City, 470 U.S. 564, 573 (1985)). Also, the fact this is a 

criminal appeal does not change our standard of review on the 

issue before us. When addressing an issue other than the 

accused's guilt or innocence, the clearly erroneous standard of 

review applies to appellate review of trial court fact findings. 

Hernandez, 111 S. Ct. at 1866; Maine v. Taylor, 477 U.S. 131, 145 

(1986). Having set forth the standard of review, we turn to the 

merits of this case. 

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c 

Because the Government offered a race-neutral explanation for 

its peremptory challenge of the two black jurors, and because the 

trial court ruled on the ultimate question of intentional 

discrimination, the preliminary issue of whether Defendant 

actually made a prima facie showing of discrimination is now moot. 

Hernandez, 111 s. Ct. at 1866. See also United States v. Forbes, 

816 F.2d 1006, 1010 (5th Cir. 1987) ("[A]ppellate review should 

not become bogged down on the question of whether the defendant 

made a prima f acie showing in cases where the district court has 

required an explanation."). But see Esparsen, 930 F.2d at 1466 

(cautioning that when a defendant attempts to show discrimination, 

the burden of creating an appropriate factual record is on the 

defendant) . 

We now address the facial validity of the prosecutor's 

explanation for striking the two black jurors, and decide whether 

the explanation was race neutral. We need not pause long to 

consider this point since even a cursory review of the record 

reveals the racial neutrality of the explanation. In this case, 

the Government peremptorily struck one black juror from the venire 

because she was a "legal secretary working for Legal Aid." The 

prosecutor explained she feared this potential juror was 

predisposed because of her Legal Aid job. The other possible 

black juror was stricken because her brother was once convicted of 

a crime, and the prosecutor felt her family history would bias the 

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juror against the Government's criminal case.

4 We hold these 

reasons are facially valid and do not violate equal protection as 

a matter of law because no discriminatory intent is inherent in 

the prosecutor's explanation. The prosecutor's remarks do not 

indicate she acted "because of, 11 rather than "in spite of" race. 

Hernandez, 111 S. Ct. at 1866. Also, the fact the prosecutor's 

criteria meant the only two prospective black jurors did not serve 

on Defendant's jury does not mean her actions are a per se Equal 

Protection violation. Id. at 1867. 

Finally, proceeding to the trial judge's ultimate ruling, we 

do not conclude it is clearly erroneous. The trial judge, who was 

in the best position to ·observe the demeanor and credibility of 

the Government attorney exercising the peremptory challenges, 

believed her explanation. In his ruling, the judge remarked there 

was "ample bas[is]" for removing a juror who worked for Legal Aid. 

As for the other juror whose brother had a criminal conviction, 

the judge declared "it's objectively reasonable in a criminal case 

that somebody who's had such [an] event occur in the immediate 

family would be a less suitable juror." Furthermore, another, 

apparently non-minority juror who "had a brother who was convicted 

of a drug offense 11 was also removed from the venire by the 

4 The prosecutor stated the juror's brother was convicted of a 

"serious felony." This comment does not square with the record 

made available to us. When she was questioned by the judge, all 

the potential juror said was her brother had been convicted of a 

"criminal offense." The juror did not specify whether her 

brother's conviction was a felony or a misdemeanor. Nevertheless, 

the Government's explanation it was peremptorily striking the 

juror because a close relative was once convicted of a crime is 

still a valid race-neutral reason. 

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prosecutor and the judge noted and evidently considered this fact 

before ruling for the Government. 

We are not the first federal appeals court to consider the 

constitutionality of peremptory challenges based on employment or 

on family members with criminal records. In United States v. 

Johnson, 905 F.2d 222 (8th Cir.), cert. denied, 111 S. Ct. 304 

(1990), "[t]he prosecutor explained that he peremptorily had 

struck two black venirepersons, as he had struck a white 

venireperson, because of their employment with the Division of 

Family Services, based on the belief they would be sympathetic to 

Johnson's defense." Id. at 222. The court of appeals wrote the 

record supported the prosecutor's race-neutral explanation. Id. 

at 223. Similarly, in United States v. Nicholson, 885 F.2d 481 

(8th Cir. 1989), the court accepted the race-neutral reason for 

peremptorily challenging a juror who "had a relative who was 

incarcerated." Id. at 483. Nicholson, like the case before us, 

involved mail fraud. However, unlike the instant case, the 

prosecutor's explanation in Nicholson for removing certain black 

jurors was given only after the court of appeals remanded for an 

explanation and for an initial ruling by the district court. On 

remand, the prosecutor recalled the fact that one juror had an 

incarcerated relative. Id. With the record finally developed, 

the appeals court concluded the prosecutor's explanation was 

acceptable and affirmed the conviction. Id. It said the district 

court did not clearly err in holding the Government's peremptory 

challenges were exercised in a constitutionally permissible 

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/ 

manner. Id. 

After reviewing the 

Government's explanation 

record in this case, where the 

and district court ruling were promptly 

made at trial, we are not left with a definite and firm conviction 

a mistake was committed. Anderson, 470 U.S. at 573; United States 

v. United States Gypsum Co., 333 U.S. 364, 395 (1948). 

Accordingly, we hold the district court's ruling is not clearly 

erroneous and the Government's peremptory challenges were 

exercised in a constitutionally permissible manner. See also 

United States v. Hughes, 911 F.2d 113, 114 (8th Cir. 1990) 

(peremptory challenge of a black juror because a family member had 

a felony conviction is permissible); United States v. Jackson, 914 

F.2d 1050, 1052 (8th Cir. 1990) (peremptory challenge of black 

juror whose nephew was incarcerated upheld); Forbes, 816 F.2d at 

1010 (not clearly erroneous to peremptorily remove a black juror 

"whose two sons had been in trouble with the law")• 

III 

Having found no constitutional error in the makeup of 

Defendant's jury, we are required to consider his remaining 

arguments concerning his sentence. Defendant claims he is 

entitled to be resentenced because the district court incorrectly 

applied the federal Sentencing Guidelines ("the Guidelines") in 

his sentencing. Only two specific Guidelines contentions raised 

by Defendant require discussion. 

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A 

Defendant claims it was improper for the district court to 

count a deferred sentence he received from an Oklahoma state court 

in scoring his criminal history. To address this argument we are 

required to examine Oklahoma's deferred sentencing law, as well as 

the Guidelines. We begin by reviewing how Defendant's sentence 

was determined. 

Defendant was given one criminal history point for passing a 

bogus check for $104 in 1980 when he was twenty-three years old. 

Defendant received a two year deferred sentence from the Oklahoma 

County District Court, and was also ordered to pay restitution. 

According to the Presentence Report, Defendant "successfully 

completed the terms of probation and on March 4, 1982, the case 

was dismissed." However, the bogus-check charge was still counted 

in assessing Defendant's criminal history because his Oklahoma 

criminal record contained "no evidence that the record was 

officially expunged." By counting this charge with another 

unrelated bogus-check charge, Defendant received a total of two 

criminal history points and was placed in Criminal History 

Category II. See United States Sentencing Commission, Guidelines 

Manual, ch. 5, Sentencing Table (Nov. 1990) (hereinafter 

u.s.s.G.). If the deferred sentence had been ignored, Defendant 

would have received only one criminal history point and would have 

been in Criminal History Category I. A defendant in Criminal 

History Category I is eligible for a lighter sentence than a 

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defendant in Criminal History Category II. 5 

Defendant takes the position it is not necessary under 

Oklahoma law to have a state criminal record "officially 

expunged. 11 He contends a criminal record in Oklahoma is 

automatically expunged by "operation of law" after a successful 

probation. In support of this argument, Defendant points to 

Oklahoma's law governing court procedures for deferred judgements, 

which reads, in pertinent part: 

Upon completion of the probation term ... the defendant 

shall be discharged without a court judgment of guilt, 

and the verdict or plea of guilty or plea of nolo 

contendere shall be expunged from the record and said 

charge shall be dismissed with prejudice to any further 

action. 

Okla. Stat. Ann. tit. 22, § 991c (West 1986) (emphasis added). 

While the Government admits Oklahoma's deferred sentencing 

statute leaves "much to be desired in terms of the expungement 

procedure," it nevertheless contends it is clear from the statute 

that expunction does not automatically occur by operation of law 

upon dismissal of a case. Reading the statute as Defendant 

5 Defendant in this case was sentenced to 30 months, which is 

the maximum amount of time permitted by the Guidelines for his 

Offense Level and Criminal History Category. 

Defendant's Offense Level is 16. (R, Vol. II, Presentence 

Report at ,r,r 21, 25.) A defendant with an Offense Level of 16 and 

a Criminal History Category of II may· be imprisoned for 24-30 

months. However, a defendant with an Offense Level of 16 and a 

Criminal History Category of I may only be imprisoned for 21-27 

months. u.s.s.G. ch. 5, Sentencing Table. For a brief and 

simplified explanation of how the Guidelines work, see United 

States v. Williams, 922 F.2d 578, 579 n.l. (10th Cir. 1990), cert. 

denied, 111 s. Ct. 1637 (1991). 

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suggests would, according to the Government, be "absurd" in light 

of Oklahoma's public policy of preserving and maintaining public 

records. See Okla. Stat. Ann. tit. 74, §§ 150.12, 150.7 (West 

1987). The Government also quotes the district judge, who said: 

I am in agreement with the view that in order to 

obtain the benefit of expunction a Defendant must 

present some actual evidence of expunction and can't 

just say to the Court, "Well the time has passed and 

nothing happened." There's no way, really, for a 

verification of that except to run around to the 

counties in Oklahoma, and indeed outside the state, and 

track down records. Which is an undue burden on the 

probation office when, really, it's a simple matter for 

a Defendant to present his evidence on that point. 

The construction of Oklahoma's deferred sentencing statute is 

a question of law, United States v. Louisiana-Pacific Corp., 754 

F.2d 1445, 1447 (9th Cir. 1985), which we are required to review 

de novo without deference to the district court sitting in 

Oklahoma. Salve Regina College v. Russell, 111 s. Ct. 1217, 1225 

(1991). De novo review means we make an independent determination 

of the issues. United States v. Irvin, 906 F.2d 1424, 1426 (10th 

Cir. 1990). In this case, we undertake the task of construing 

Oklahoma law out of necessity. The correctness of Defendant's 

federal sentence must be ascertained. Since the Guidelines 

specify expunged convictions are not counted in calculating 

criminal history, u.s.s.G. § 4Al.2(j), we must determine if the 

bogus-check charge is expunged, or whether it should be treated as 

expunged under Oklahoma law. Cf. United States v. Cox, 934 F.2d 

1114 (10th Cir. 1991) (federal appeals court considering whether a 

defendant's California conviction had been set aside examined 

California law and then applied its determination in considering 

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/ 

the validity of defendant's federal sentence). 

The word expunge generally means the physical destruction of 

information. Dubnoff v. Goldstein, 385 F.2d 717, 724 (2d Cir. 

1967) With respect to criminal records, expunction refers to the 

process of sealing or destroying the record of a criminal 

conviction after expiration of a certain time. Black's Law 

Dictionary at 522 (5th ed. 1979). See generally Annotation, 

Judicial Expunction of Criminal Record of Convicted Adult, 11 

A.L.R. 4th 956 (1982). 

The key 

sentencing law 

question here is whether Oklahoma's deferred 

automatically expunges a criminal record upon 

successful completion of probation, or whether an individual must 

take some affirmative action after probation to have their record 

expunged. We believe the statute operates automatically. We 

reach this conclusion after examining the statute itself, Oklahoma 

cases construing the statute, and other pertinent material. 

As already mentioned, Oklahoma's deferred sentencing statute 

states that upon completion of probation a criminal record "shall 

be expunged." Okla. Stat. Ann. tit. 22, § 991c (West 1986) 

(emphasis added). "In the construction of statutes, 'shall' is 

usually given its common meaning of 'must.' It is interpreted as 

implying a command or mandate." Sneed v. Sneed, 585 P.2d 1363, 

1364 (Okla. 1978) (footnote omitted). It is highly significant 

when a legislature chooses the word "shall" because it implies a 

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I 

j ' j 

command or mandate. Woolen v. Coffman, 676 P.2d 1375, 1377 (Okla. 

Crim. App. 1984). Shall is not a permissive word. Lenion v. 

State, 763 P.2d 381, 382 (Okla. Crim. App. 1988). 

We realize, of course, the word "shall" does not necessarily 

mean "is," and therefore the deferred sentencing statute could be 

read to require some action by a defendant seeking to have a 

criminal record expunged. However, this construction of the 

statute would clearly be at odds with Oklahoma's expressed policy 

in § 991c of allowing defendants to expunge their criminal records 

after probation. Section 991c contains no mechanism an individual 

must follow to have a record expunged. Nor does it refer to any 

other statute setting out a formal expunction procedure. All the 

law commands is that the record "shall be expunged." Okla. Stat. 

Ann. tit. 22, § 991c (West 1986). Reading the statute in context, 

the implication that it operates automatically is strong. To read 

the law otherwise would place obstacles in an individual's path 

that Oklahoma's Legislature did not intend to erect. In addition, 

we observe that Oklahoma's criminal appeals court acknowledges the 

statute's mandatory nature. In State v. Rodriguez, 547 P.2d 974, 

975 (Okla. Crim. App. 1976), the court referred to the provisions 

of§ 991c as "mandatory provisions." Likewise, in State ex rel. 

Hicks v. Freeman, 795 P.2d 110 (Okla. Crim. App. 1990), the court 

wrote "§ 991c clearly authorizes the expunction of a 'verdict or 

plea of guilty or plea of nolo contendere.'" Id. at 112 (emphasis 

added). This construction of the statute is echoed by one 

commentator who calls it mandatory and observes a defendant is not 

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required to petition a court in order for the statute to work. 

Note, Criminal Procedure: Expunction Fact or Fiction?, 31 

Okla. L. Rev. 978, 992 (1978). 

"The fundamental rule of statutory construction is to 

ascertain and give effect to the intention of the legislature as 

expressed in the statute." Freeman, 795 P.2d at 112. Accord Hess 

v. Excise Bd. of McCurtain County, 698 P.2d 930, 932 (Okla. 1985). 

Following this fundamental rule, we hold the expunction provisions 

of Oklahoma's deferred sentencing statute operate automatically 

and the Defendant in this case was not required to follow some 

unknown and unspecified procedure to have his prior criminal 

record expunged after he successfully completed probation for his 

Oklahoma deferred sentence. In so holding, we reject the 

Government's public policy argument, which contends other Oklahoma 

statutes override the expunction statute. 

The first statute the Government points to in its argument is 

inapposite as it deals only with the transmission of fingerprint 

arrest records on persons who may be wanted in other 

jurisdictions. Okla. Stat. Ann. tit. 74, § 150.12 (West 1987). 

The second statute concerns only general reports and records of 

the Oklahoma State Bureau of Investigation and requires those 

reports to be kept for ten years. Okla. Stat. Ann. tit. 74, 

§ 150.7 (West 1987). This second statute also says nothing about 

court conviction or probation records. To read it in the broad 

fashion the Government advances would overwhelm the plainly 

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expressed policy contained in the phrase "shall be expunged." See 

Okla. Stat. Ann. tit. 22, § 991c (West 1986). Moreover, when 

Oklahoma's Attorney General interpreted an aspect of the 

expunction statute, he too remarked how the word "shall" usually 

means "must." See Okla. Att'y Gen. Op. No. 83-48 (1984). Our 

construction of the expunction statute is therefore entirely 

consistent with the interpretation rendered by Oklahoma's courts 

and executive officers. Indeed, the Government prosecutor here 

candidly admitted during Defendant's sentencing that individuals 

in Oklahoma are often led to believe they need do nothing to have 

their criminal records expunged after probation. Her comments 

came as she was expressing personal misgivings about counting 

Defendant's deferred sentence as part of his criminal history. 

The prosecutor stated: 

I'll be real candid with the Court and say that 

from a personal standpoint I have some difficulty with 

this area of the guidelines as far as deferred sentence. 

Having practiced in State Court in the District 

Attorney's Office, I know that often the Defendants are 

led to believe that at the conclusion of that successful 

period of a deferred sentence that in fact that slate is 

wiped clean. So in honesty, I'm bothered somewhat by 

this. 

The trial judge likewise expressed misgivings about counting 

Defendant's deferred sentence, but ruled for the Government 

because he did not feel federal probation officers should be 

required to "run around to the counties in Oklahoma" to track down 

records. However, Defendant's presentence report reveals that 

probation officers already obtained all background information 

about Defendant before calculating his criminal history. For 

example, Defendant's presentence report indicates the Oklahoma 

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deferred check charge was filed in Oklahoma County District Court, 

and it further identifies the case by its state file number. The 

report notes Defendant was represented in the Oklahoma courts by 

counsel and successfully served a two year deferred sentence 

beginning on March 5, 1980, and ending March 4, 1982. The report 

even states the bogus-check amount and names the party it was 

written to. As for Defendant's deferred sentence, the report says 

the state file contained no evidence the record was "officially 

expunged." Given all this information, it is plain that federal 

probation officers dutifully researched Defendant's background, 

and could easily have known if his deferred sentence was revoked. 6 

Thus, we feel the trial judge's comments -- while commendably 

expressing concern for the workload of federal probation officers 

are nevertheless overstated. Also, the fact that probation 

officers obtained information about Defendant's probation does not 

mean Defendant's record was not expunged, or should not be treated 

as expunged. Oklahoma, like other states, may implement its 

expunction law by sealing records from the general public while 

preserving them for statistics and law enforcement personnel, 

including probation officers. See, ~' State v. Zawistowski, 339 

So.2d 315, 316 (Fla. Dist. Ct. App. 1976). Even if Oklahoma does 

not follow this policy, the rule of lenity requires us to 

interpret criminal laws so as not to increase the penalty placed 

on an individual. "[I]n case of doubt concerning the severity of 

6 In fact, the prosecutor realized Defendant was not entitled 

to expunction on his second Oklahoma bogus-check charge. The 

second bogus-check charge was discussed in the presentence report 

without any indication that expunction applied to it. 

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the penalty prescribed by a statute, 

milder penalty over a harsher one." 

Const., § 59.03 at 12 (4th ed. 1986). 

States, 447 U.S. 381, 387 (1980) 

construction will favor a 

N. Singer, Sutherland Stat. 

See also Bifulco v. United 

(the policy of lenity means 

courts do not interpret criminal statutes so as to increase 

penalties). Since Oklahoma has no controlling statute or ruling 

requiring an individual to petition for expunction, we construe 

Oklahoma's expunction 

Defendant's favor. 

law as it is presently written in 

B 

Defendant was charged and convicted of mail fraud and equity 

skimming. The presentence report said the loss suffered by the 

Government because of Defendant's activities was over $551,000. 

Applying the Guidelines, the presentence report added eight points 

to Defendant's offense level due to the significant loss. 

u.s.s.G. s 2Fl.l(b)(l)(I). 

Defendant, however, contends the Government did not suffer 

the loss stated in the presentence report. Defendant argues the 

Government lost only the rent money Defendant collected while he 

owned the real estate. Defendant believes the gist of his 

convictions are for obtaining the rent monies and not the real 

estate. He therefore says the district court erred in sentencing 

him based on the real estate's value. 

In response, the Government argues Defendant was convicted 

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for obtaining both money and real estate by means of 

fraudulent pretenses, representations and promises. 

government argues the district court properly included 

false and 

Thus, the 

the value 

of the real estate in arriving at Defendant's Guidelines sentence. 

We believe Defendant's mail fraud conviction covers his 

activities in acquiring the real estate, as well as the rent 

monies. We reach this conclusion after reviewing the indictment. 

The indictment charges Defendant with a scheme to "make false and 

fraudulent representations to the seller of the properties and 

mortgage companies in order to fraudulently induce the seller to 

transfer his property to the defendant." The indictment further 

charges Defendant with scheming to collect rent from his tenants 

until "the tenants were notified of impending foreclosure or were 

evicted by the mortgage company or financial institution." 

Because the indictment clearly indicates Defendant was being held 

accountable for both acquiring the real estate and rent monies, we 

reject Defendant's argument insofar as it implies he was convicted 

only for acquiring the rent checks. We now proceed to consider 

Defendant's argument as it relates to his sentencing by the 

district court. 

During sentencing the district court commented it was proper 

to consider the real estate's value in arriving at Defendant's 

sentence. The district judge felt this way because "[i]t's 

inconceivable that a person with the financial circumstances of 

the Defendant could have entered into the transactions that he did 

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without foreknowledge that they were economically doomed and that 

foreclosures would ensue, casting this great loss upon the 

Government." It is plain from this comment the district judge 

intended to punish Defendant for the loss he caused the 

Government. 

Our concern in reviewing Defendant's sentence is with the 

meaning of the term "loss." In construing the term loss we are 

deciding whether the district court correctly computed the loss 

attributable to Defendant's criminal activities. United States v. 

Whitehead, 912 F.2d 448, 451 (10th Cir. 1990). 

Consideration of this matter is aided by the Guidelines' 

commentary on the meaning of the term loss. The relevant 

commentary states: 

'Loss' means the value of the property taken, damaged, 

or destroyed. Ordinarily, when property is taken or 

destroyed the loss is the fair market value of the 

particular property at issue. Where the market value is 

difficult to ascertain or inadequate to measure harm to 

the victim, the court may measure loss in some other 

way, such as reasonable replacement cost to the victim. 

u.s.s.G. § 2Bl.1 comment. (n.2). 

We believe the real estate was "taken" within the meaning of 

the term "loss" as it is used in the Guidelines. See u.s.s.G. 

§ 2Bl.1 comment. (n.2). The Government's reacquisition of the 

real estate through foreclosure does not change the fact that the 

Defendant took the real estate in the first place. For example, 

in a case involving the loss of a vehicle, we held "the amount 

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taken was the entire vehicle and its contents." United States v. 

Westmoreland, 911 F.2d 398, 399 (10th Cir. 1990). In 

Westmoreland, we noted "[t]he fact that good police work 

diminished the actual loss to the ... victim should not affect the 

determination of the extent of defendant's culpability and 

responsibility for purposes of sentencing." Id. The same is true 

here. The fact the Government was able to reacquire the 

properties does not diminish Defendant's culpability and 

responsibility for the fraudulent scheme he masterminded. We hold 

the district court committed no error in construing the term loss. 

The district court permissibly decided to base Defendant's 

sentence on the value of all the property taken, including the 

value of the real estate and cash. 

The preceding holding does not, however, end the problem. 

The Guidelines say property value is defined by its fair market 

value. u.s.s.G. § 2Bl.1 comment. (n.2). We cannot tell from the 

presentence report or sentencing transcript if the figures used to 

arrive at Defendant's offense level is the real estate's fair 

market value. At one point the presentence report indicates the 

7 Government lost over $551,000. However, the presentence report 

further notes the real estate was insured for over $700,000. We 

do not know which figure is the real estate's correct fair market 

value, or even if both figures are inaccurate regarding the fair 

7 In their briefs on appeal the parties agree the real estate's 

value is around $400,000. The presentence report figure 

estimating the Government's loss at $551,000 considers other 

activities by Defendant that also cost the Government money. 

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market value. On remand the district court should make factual 

findings that will reveal the fair market value of the real 

estate. The court may then properly set Defendant's offense level 

by combining the real estate's fair market value with the cash 

amount the Government lost to determine the Government's total 

loss. 

If the district court decides the final figure is "inadequate 

to measure [the] harm to the victim," then the court is free to 

"measure the loss in some other way, such as reasonable 

replacement cost to the victim." u.s.s.G. § 2Bl.1, comment. 

(n.2). Of course, if the court elects to use an alternative 

measurement, it should make an appropriate record with sufficient 

detail so that appellate review will be facilitated. 

c 

Defendant's remaining Guidelines complaints allege the 

district court erred when it (1) ruled Defendant engaged in more 

than "minimal planning" in committing his crimes; and (2) erred in 

determining Defendant accepted no responsibility for his actions. 

We carefully reviewed Defendant's remaining contentions and 

believe they are meritless and warrant no discussion. 

IV 

In conclusion, the Government did not violate Defendant's 

constitutional right to equal protection when it peremptorily 

struck two black jurors from Defendant's jury. The district 

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court's judgment of conviction is therefore AFFIRMED. However, 

because there were errors in sentencing, the case is REMANDED to 

the district court with instructions to vacate Defendant's 

sentence and then to immediately resentence him in accordance with 

the views expressed in this opinion. 

Conviction AFFIRMED; REMANDED for resentencing. 

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