*

The HONORABLE RICHARD H. KYLE, United States District

Judge for the District of Minnesota, sitting by 

designation.

 

No. 95-1505

 

United States of America, *

*

 Appellee, *

* Appeal from the United States

 v. * District Court for the

 * Eastern District of Missouri.

John A. Allen, Sr., *

*

 Appellant. *

 

Submitted: January 10, 1996

Filed: February 6, 1996 

Before BEAM and MORRIS SHEPPARD ARNOLD, Circuit Judges, and KYLE,*

District Judge. 

MORRIS SHEPPARD ARNOLD, Circuit Judge.

In mid-1994, John Allen was indicted in federal district court

on one count of conspiracy, one count of misuse of a social

security number, and multiple counts of mail fraud, wire fraud, and

money laundering in connection with the establishment of four

companies that collected premiums to pay for health insurance but

in fact failed to provide such insurance. Pursuant to a plea

agreement with the government, Mr. Allen pleaded guilty to three

counts of the indictment and was sentenced in early 1995
 1

The Honorable Stephen N. Limbaugh, United States District

Judge for the Eastern District of Missouri.

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to 36 months in prison. He appeals his sentence. We affirm the

judgment of the district court.1

I.

The presentence report on Mr. Allen calculated the loss to the

victims to be $2,745,400 (all numbers are rounded) -- premiums of

$2,000,000 and outstanding claims of $745,400. Under the federal

sentencing guidelines, a loss to the victims of more than

$2,500,000 requires an increase in base offense level of 13 levels.

See U.S.S.G. § 2F1.1(b)(1)(N). Taking into account that increase

and various other adjustments not at issue for the purposes of this

opinion, the district court determined that the appropriate

sentencing range for Mr. Allen under the guidelines was between

41 and 51 months (level 22). Responding to a government motion for

departure from the guidelines range based on substantial assistance

to the government by Mr. Allen, however, see U.S.S.G. § 5K1.1(a),

the district court sentenced Mr. Allen to 36 months in prison.

Mr. Allen contends on appeal that he objected to the

calculation of loss to the victims but that the district court

failed to make the findings on that "controverted matter" required

by Fed. R. Crim. P. 32(c)(1). Mr. Allen asserts, therefore, that

his sentence should be vacated and that his case should be remanded

for resentencing. See, e.g., United States v. Furst, 918 F.2d 400,

401, 408 (3d Cir. 1990). The government responds, however, that

Mr. Allen failed to object clearly and specifically enough to the

calculation of loss to the victims and, accordingly, that the

district court was entitled to rely on the figures included in the

presentence report. See, e.g., United States v. Saffeels, 39 F.3d

833, 838 (8th Cir. 1994), and United States v. Toirac, 917 F.2d 11,

13 (8th Cir. 1990).
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Mr. Allen filed no written objections with the district court.

At the sentencing hearing, Mr. Allen's lawyer stated that he had

"explained to Mr. Allen some things regarding the determination of

the dollar amount used to reach ... the total offense level" and

that he had "pointed out to Mr. Allen that the amount of money that

had been received by the company is the determiner." The district

court then asked Mr. Allen himself if he had any "changes or

corrections" to the presentence report. Mr. Allen stated that

there was "no mention" of deductions for amounts legitimately paid

out -- for either the few health insurance policies that the

companies in question did buy or the claims that were paid. The

district court asked what those deductions would be. In response,

Mr. Allen said that he was "guessing" but proffered a total

of $132,000.

Subsequently, Mr. Allen said that he had "one other thing" and

stated that he "never received anything" from two of the companies

in question. "That would be my objection," he continued, evidently

concerned about whether the amounts received by those companies

were included in the calculation of loss to the victims that was

used in his presentence report. Those amounts were in fact

included in the loss calculation, according to the government.

That inclusion was proper, as a matter of law. Mr. Allen

stipulated in his plea agreement that he and two co-defendants

formed both of those companies and that he was "to share equally in

the profits" from both of those companies. Under the sentencing

guidelines, the calculation of loss to the victims used in

determining the offense level of an individual defendant who has

participated in a "jointly undertaken criminal activity" is to

include "all reasonably foreseeable acts ... of others ... that

occurred during the commission of the offense of conviction."

See U.S.S.G. § 1B1.3(a)(1)(B) and application note 2,

illustration (c)(2); see also U.S.S.G. § 1B1.1, application
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note 1(l) (definition of "offense" is "the offense of conviction

and all relevant conduct under § 1B1.3"), and U.S.S.G. § 2F1.1,

application note 6 ("cumulative loss produced by a common scheme

... should be used in determining the offense level, regardless of

the number of counts of conviction").

It appears to us that Mr. Allen's second "objection" was

actually an inquiry with respect to a question of law -- i.e.,

whether the amount of loss to the victims, for purposes of

determining his offense level, depended on how much of the proceeds

he personally received. Under the sentencing guidelines, the

answer to that question, in light of the stipulations in

Mr. Allen's plea agreement, was that the amount of money paid by

the victims to any of the four companies in question, plus the

amount of money owed to the victims for outstanding claims -- and

not the amount of money received by Mr. Allen individually -- were

the critical figures. We therefore do not consider that inquiry to

have concerned the type of factual dispute contemplated by Fed. R.

Crim. P. 32(c)(1).

The only "objection" by Mr. Allen of the type contemplated by

the rule was, then, his initial statement that there was "no

mention" of deductions for legitimate expenses incurred by the

companies in question. We assume, without deciding, that that

statement was specific and clear enough, see, e.g., United States

v. Toirac, 917 F.2d at 13, to amount to an objection under Fed. R.

Crim. P. 32(c)(1). Even so, the district court's failure to make

a specific finding with respect to that objection amounted to

harmless error, because a deduction of $132,000 from the previously

calculated figure of $2,745,400 still leaves more than $2,500,000

as the amount of loss. In other words, even if the district court

had considered Mr. Allen's objection and had made a specific

finding favorable to him on that objection, the appropriate

sentencing guidelines range would have been unchanged. Indeed, the
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district court recognized that point, remarking that "accepting

[Mr. Allen's] point of view ... would not alter the ultimate

calculation of the total offense level." Under these

circumstances, we reject Mr. Allen's argument that the district

court's failure explicitly to follow Fed. R. Crim. P. 32(c)(1)

requires a remand for resentencing.

II.

Mr. Allen also argues that the figure of $2,745,400 for the

amount of loss to the victims was not supported by anything other

than the presentence report and, therefore, that it was improper

for the district court to rely on that figure. Mr. Allen would

have a better argument if he had in fact objected to that figure.

What he objected to, however, was that no deductions had been made

for legitimate expenses of the companies in question. He never

contended that the victims had not paid $2,000,000 in premiums or

that the victims did not have $745,400 in outstanding claims.

"Under our cases, a district court is clearly permitted to

accept as true all factual allegations contained in the

[presentence report] that are not specifically objected to by the

parties." United States v. Beatty, 9 F.3d 686, 690 (8th Cir.

1993). The district court was therefore entirely proper in using

the figure of $2,745,400 that was given in the presentence report.

III.

Mr. Allen contends as well that using the figures from the

presentence report violated his confrontation clause rights under

the sixth amendment. That argument is foreclosed by our ruling in

United States v. Wise, 976 F.2d 393, 401 (8th Cir. 1992) (en banc),

cert. denied, 113 S. Ct. 1592 (1993).
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IV.

The indictment charged Mr. Allen with twelve counts of mail

fraud, two counts of wire fraud, and one count of conspiracy, all

derived from his activities with the companies in question. Under

his plea agreement with the government, Mr. Allen pleaded guilty

only to one count of mail fraud in relation to those activities,

and the government stipulated that it would not prosecute him "for

offenses ... which are related to or arose out of the operation of"

those companies. Mr. Allen now contends that the government

breached that agreement by allowing the allegations of the other

counts to be considered as relevant conduct in calculating the

amount of loss to the victims.

Mr. Allen himself stipulated, however, that the offenses to

which he pleaded guilty were "subject to" the sentencing

guidelines. Those guidelines require that all relevant conduct be

considered, see U.S.S.G. § 1B1.1, application note 1(l),

"regardless of the number of counts of conviction," see U.S.S.G.

§ 2F1.1, application note 6. The sentencing court, moreover, is

not bound by the stipulations in a plea agreement in "determin[ing]

the facts relevant to sentencing." See U.S.S.G. § 6B1.4(d);

see also U.S.S.G. § 6B1.2(a) ("a plea agreement that includes

the dismissal of a charge or a plea agreement not to pursue a

potential charge shall not preclude the conduct underlying such

charge from being considered under the [sentencing guidelines]

provisions" related to relevant conduct). We therefore reject

Mr. Allen's argument that the government breached its plea

agreement with him.
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V.

For the reasons stated, we affirm the judgment of the district

court.

A true copy.

Attest:

 CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.