2011 D e c i sion s O p inion s of the U nit e d
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. e du/thir dc ir c uit_2011/973PRECEDENTIAL UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

_____________

No. 10

- 2970

_____________
UNITED STATES OF AMERICA,

v.

JUSTINE WRIGHT

, Appellant

_______________ On Appeal from the United States District Court for the Eastern Dist rict of Pennsylvania (D.C. No. 09

- c r

- 635

- 02) District Judge: Hon. Timothy J. Savage

_______________ Argued April 1 4 , 2011

Before: FISHER, JORDAN and COWE N, Circuit Judges

.

(Filed : June 1, 2011 )

_______________2 Robert Epstein Brett G. Swei tzer [ARGUED] Mark T. Wilson Defender Association of Philadelphia Federal Court Division 501 Walnut Street

- #540 West Philadelphia, PA 19106 Counsel for Appellant

Maria M. Carrillo Robert A. Zauzmer [ARGUED] Office of United States Attor n ey 615 Chestnut Street

- #1250 Philadelphia, PA 19106 Counsel for Appellee

_______________

OPINION OF THE COURT

_______________
JORDAN, Circuit Judge

.

I. Background

Justine Wright 1 appeals the j udgment entered by the United States District Court for the Eastern District of Pennsylvania sentencing him to 20 months’ imprisonment. Wright argues that the sentence was procedurally unreasonable due to the erroneous application of an 8

- level

1 In th e record and briefs, Wright is referred to as both “Justin Wright” and “Justine Wright.” We use “Justine” here, as that name was used by Wright in his notice of appeal.3 enhancement. Although the District Court’s rationale fo r applying the 8

- level enhancement was thoughtful and well

explained , we agree with Wright that the enhancement should not have been applied in this case and will therefore vacate and remand for resentencing.

A. Factual History

On July 2, 2009, Wright approached Andrew Cella at Cella’s pizza restaurant in Morgantown, Pennsylvania, to inquire about purchasing the restaurant. Cella told Wright that he would sell the restaurant for $400,000. Wright said he did not have the money right then but that he wo uld return later with his brothe r , who did have the money

. On July 6, 2009, Wright returned to the restaurant accompanied by Soko Kanneh, who Wright falsely identified as his brother. Wright and Kanneh renewed Wright’s earlier offer, and Cella again told them he would sell the restaurant for $400,000. Wright and Kanneh told Cella that they had the money, informing him that their father had made “good money” as a p olitical figure and head of Sierra Leone ’s National Bank. Their father, they said, had rece ntly been assassinated, and they had fled to the United States as refugees. Cella was interested in their offer, and they agreed to meet again for dinner to discuss the details.

Several days later, Cella met Wright and Kanneh for dinner at their hotel in Philadelphia. After dinner, Kanneh told Cella that he wanted to show him something, and the three men went to Cella’s car. Once in the car, Kanneh removed a stack of black paper from a bag along with a plastic plate and several small bottles of liquid . Kanneh told Cella that the black paper was U.S. currency that had been4 given to Sierra Le one by the United States as aid but had been dyed black to keep it from being used by any rebels who might intercept it . He explained that the black dye could only be removed by a special solvent. Kanneh and Wright told Cella that their father had been responsible for cleaning the
money for the Sierra Leone government and that, after he died, they had brought the money with them to the United States.

As Kanneh a nd Wright told Cella about the black
money, Kanneh demonstrated the cleaning process by placing two black pieces of paper in the plastic plate, coating them with liquid from one of the bottles, and then “slosh[ing] [them] around on the plate like he was pa nning for gold.” ( App. at 93. ) As Kanneh did this, the paper “started to clean up” and “bec[ame] clearer and clearer.” ( Id. ) Once the pieces of paper were clean, they were revealed as two genuine $100 bills . Kanneh told Cella that he and Wright had

m illions of dollars in black bills in their hotel room but that they needed large amounts of money in order to buy the solvent to clean the bills. Kanneh and Wright then offered to sell Cella $120,000 worth of black bills and the necessary solvent to clean them for $60,000.

Although Cella told Wright and Kanneh that he would try to raise the $60,000, he instead contacted the police, who put Cella in touch with the U.S. Secret Service. At the behest of Secret Service Agent Matt Cimino, Cella contacted Wr ight and Kanneh to arrange another meeting, telling them he had a friend who also wanted to invest in the black money. Wright and Kanneh agreed to another meeting but stated that if there was a second investor, they wanted $100,000, for which they would d eliver $200,000 worth of black money. Cella5 arranged for Agent Cimino and himself to meet Wright and Kanneh on August 26, 2009

, in a Philadelphia hotel room. There, Wright and Kanneh repeated their earlier demonstration for Agent Cimino, cleaning two gen uine $100 bills that had been dyed black. They then showed Agent Cimino a suitcase full of black paper, which they claimed was $200,000 worth of “black money” but which was actually plain black construction paper. They told Agent Cimino that they had suf

ficient cleaning solution with them to clean all $200,000 and that they would sell Agent Cimino the money and the cleaning solution for $100,000. Following that performance and offer , Wright and Kanneh were arrested.

B. Procedural History

On September 24, 2009, Wright and Kanneh were charged with two counts of possessing and passing altered currency, in violation of 18 U.S.C. § 472; two counts of possessi ng false or fictitious items, in violation of 18 U.S.C. § 514(a)(2); and one count of conspiring to do the same, in violation of 18 U.S.C. § 371. After Kanneh pled guilty

, Wright proceeded to trial

. At the conclusion of the evidence

, the District Court entered an order of acquittal for the two § 514(a)(2) charges, after which the jury convicted Wright on the remaining charges of possession of altered currency and conspiracy

.
In preparation for a sentencing hearing on June 29, 2010

, a presentence investigation report recommended an offense level of 17 , calculated by taking a base offense level of 9, pu rsuant to U nited States Sentencing Guidelines6 (“U .S.S.G. ” or the “ Guidelines ”) § 2B5.1 (a)

, 2 and adding to it

an 8

- level enhancement pursuant to U.S.S.G. § 2B5.1(b)(1). Section 2B5.1(b)(1) states:

If the face value of the counterfeit items (A) exceeded $2 ,000 but did not exceed $5,000, increase by 1 level; or (B) exceeded $5,000, increase by the number of levels from the table in §2B1.1 (Theft, Property Destruction, and Fraud) corresponding to that amount.

The table in § 2B1.1 , in turn, calls for an 8

- lev el enhancement for amounts between $70,000 and $120,000.

Wright objected to the application of the 8

- level enhancement, arguing that § 2B5.1(b)(1) called for any enhancement to be based on “the face value of the counterfeit items,” which all parties ackn owledged was $400 , that is

, the four $100 bills used in the demonstrations. The District Court overruled Wright’s objection, concluding that

, despite § 2B5.1(b)(1) referencing only the “face value of the counterfeit items,” the enhancement could be applie d based

on the loss Wright intended to cause . The Court explained:

I don’t think that there is any question that the sentencing commission never anticipated the

2 U.S.S.G. § 2X1.1, which covers conspiracy convictions under § 371, directs the sente ncing court to use the base offense level f

rom the Guideline provision applicable
to the substantive crime, which, in this case, is § 2B5.1. As a result, Wright’s conviction for conspiracy under § 371 did not alter the base offense level.7 situation that we have before us. This is something new. Okay. And I am confident that had it been presented with such a case as this, that it would focus on what the intended loss was as opposed to the actual altered
currency.

... What they were using here is a scam and I believe that if the commission were to consider it, that they would calcu late the offense level based upon the total loss. And therefore, I am going to deny your request to change that.

(App. at 312

- 13.)

Based on that calculated offense level of 17 and a criminal history category of III, the recommended Guidelines
sentence w as 30 to 37 months ’ imprisonment. After analyzing the 18 U.S.C. § 3553(a) factors, the Court varied downward, and imposed a sentence of 20 months ’ imprisonment and three

- years’ supervised release. 3 In doing

so , t he Court stated that the sentence it impos ed was the same as it would have imposed even if the 8

- level enhancement pursuant to § 2B5.1 (b)(1) did not apply.

Wright’s timely appeal followed.

II. Jurisdiction and Standard of Review

The District Court had jurisdiction pursuant to 18

3 Neither party has objected to the variance under § 3553(a)

, and, therefore, it is not discussed herein.8 U.S.C. § 32 31

, and w e have jurisdiction pursuant to 18 U.S.C. § 3742(b) and 28 U.S.C. § 1291.

In sentencing a defendant, district courts follow a three

- step process: At step one , the court calculates the applicable Guidelines range , United States v. Tomko , 5 62 F.3d 558, 567 (3d Cir. 2009), which includes the application of any sentencing enhancements

, United States v. Shedrick

, 493 F.3d 292, 298 n.5 (3d Cir. 2007). At step two

, the court considers any motions for departure and, if granted, states how the departure affects the Guidelines calculation. Tomko

, 5 62 F.3d at 567

. At step three

, the court considers the recommended Guidelines range together with the statutory factors listed in 18 U.S.C. § 3553(a) and determines the appropriate sentence, which may vary upwa rd or downward from the range suggested by the Guidelines

. Tomko , 5 62 F.3d
at 567

.

Our review of a criminal sentence is for abuse of discretion and proceeds in two stages. Id. First, we review for procedural error at any sentencing step , including , for example, failing to make a “correct computation of the Guidelines range” at step one, United States v. Langford , 516 F.3d 205, 214 (3d Cir

. 2008), failing to rely on “appropriate bases for departure” at step two, United States v. Ali , 508 F.3d 136, 148 (3 d Cir. 2007) (internal quotation marks omitted), or fail ing to give “meaningful consideration to the § 3553(a) factors ” at step three, U

nited States v. Merced , 603 F.3d 203, 215 (3d Cir. 2010) (internal quotation marks omitted)

. 4 If we

4 The Supreme Court’s decision in Gall v. United States lists a number of potential procedural errors, “such as9 find procedural err or at any step, we will generally “ remand the case for re

- sentencing, without going any further.” Id. at 214.

I f the re is no procedural error, the second stage of our review is for substantive reasonableness, and “ we will affirm [the sentence] unless n o reasonable sentencing court would have imposed the same sentence on that particular defendant for the reasons the district court provide d .” Tomko , 562 F.3d at 56 8

.

I II

. Discussion

On appeal, Wright argues that the District Court committed procedural error at step one by imposing an 8

- level enhancement for intended loss under U.S.S.G. § 2B5.1(b)(1)

. He says that

, because § 2B5.1(b)(1) sets forth an enhancement based only on “the face value of the counterfeit items

, ” applying the enhancement based on intended loss was an abuse of discretion

. We agree that intended loss is not an aspect of § 2B5.1(b)(1) , though we do not accept all of Wright’s reasoning.

Both in his briefs and at oral argument, Wright argued that the District Court had the option of applying § 2B5.1 with its base offense level of 9 but no enhancement, or

failing to calculate (or improperly calculating) the G uidelines range, treating the Guidelines as mandatory, failing to consider the § 3553(a) factors, selecting a sentence based on clearly erroneous facts, or failing to adequately explain the chosen sentence

– including an explanation for any deviati on from the Guidelines range.” 552 U.S. 38, 51 (2007)

.10 applying § 2B1.1 “ in toto ” with a base offense level of 6 and an enhancement based on intended loss. However, the assertion that either § 2B5.1 or § 2B1.1 could be applied under the se circumstances is incorrect. Wright was convicted of altering four $100 bills in violation of 18 U.S.C. § 472. While the statutory index to the Guidelines states that either § 2B5.1 or § 2B1.1 may be applied for convictions under § 472, the index furth er instructs that “[i]f more than one guideline section is referenced for the particular statute, use th e guideline most appropriate for the offense conduct charged in the count of which defendant was convicted.” See U.S.S.G. app. A. Here, § 2B5.1 states that it applies to

o ffenses i nvolving “ Counterfeit Bearer Obligations o f the United States,” whereas § 2B1.1 applies to o ffenses i nvolving

“ Counterfeit Instruments Other than Counterfeit Bearer Obligations of the United States.” The Guidelines define “be arer obligations of the United States” as obligations “not made out to a specific payee,” including, among other things “currency and coins,” and define counterfeiting to include altering. U.S.S.G. § 2B5.1 cmt. n.1, 2. Accordingly, because the “offense c onduct” Wright was charged with was altering “bearer obligations of the United States

, ” namely $400 in United States currency

, § 2B5.1 is the appropriate base Guideline to apply in this case.

T he District Court thus properly applied § 2B5.1 and its base o ffense level of 9. Then, relying on the instruction in § 2B5.1(b)(1) to increase the offense level according to the table in § 2B1.1 “if the face value of the counterfeit items

... exceeded $5,000,” the Court concluded that

, because the intended loss for Wri ght’s scheme was $100,000 , it should increase the offense level by 8

, the number indicated11 in the § 2B1.1 table for values greater than $70,000 and less than or equal to $120,000.

While w e have never addressed whether § 2B5.1(b)(1) supports an enhanceme nt for intended loss

, the language of that section directs any enhancement to be based on face value only. The government concedes that point, acknowledging that § 2B 5 .1 (b)(1) does not support a step

- one enhancement based on intended loss. The government ’s only argument on appeal is that the District Court did not apply a step

- one enhancement but, instead, made a step

- two upward departure. The government points to U.S.S.G. § 5K2.0(a)(2)(B), which allows upward departures where “there is present a circums tance that the Commission has not identified.” Although the Court never used the word “departure,” the government argues that the Court’s statement that “the sentencing commission never anticipated the situation that we have before us” invoked § 5K2.0(a)( 2)(B) and should be viewed as a departure.

We do not dispute the District Court’s conclusion that “the sentencing commission never anticipated the situation” presented by this case. (App. at 312.) Indeed, t he primary harm in a scheme of the sort at i ssue here is the amount sought by the fraud , not the nominal value of the currency defaced to perpetrate th e fraud . Thus, by focusing on the value of the defaced currency, § 2B5.1 does not address the gravamen of the harm , as the District Court quite righ tly pointed out

. 5 A step

- two upward departure for unidentified

5 We note that, because of its focus on the face value of the counterfeit items, rather than intended loss, § 2B5.1 would not distinguish between a black money scheme that12 circumstances under § 5K2.0(a)(2)(B) would therefore be justified, as would a step

- three upward variance under § 3553(a)(2)(A) “to reflect the seriousness of the offense, ” and the District Cou rt might have legitimately reached the imposed sentence or a similar one through either or both of those procedural mechanisms.

Nonetheless, despite the government ’ s argument to the contrary, that is not what the Court did. The record plainly shows tha t the District Court imposed a step

- one enhancement. T he Court overrul ed Wright’s objection to the application of the 8

- level enhancement and stated that “the offense level will remain at 17.” ( App. at 31 3

. ) As Wright correctly notes, “ [i]f the district court had imposed a step

- two departure, the court would have sustained Mr. Wright’s objection to the enhancement, identified the applicable Guidelines range as 8

- 14 months, and then proceeded to upwardly depart from that range. Instead, the court squarel y overruled Mr. Wright’s objection.” ( Reply Br ief for Appellant at 3 (emphasis in original). ) Furthermore, the government never made a motion for an upward departure, nor did the District Court so much as mention the word “departure.” There is simply no basis in the record to conclude that the District Court did anything other than apply a step

- one enhancement for intended loss based on § 2B 5 .1 (b)(1). Because § 2B 5 .1 (b)(1) requires any enhancement to be based on the face value of the counterfeit

attempted to defraud a victim of $1, 000 and one that attempted to defraud a victim of $1,000,000. Plainly, the sentencing commission did not have this kind of scheme in mind when they penned § 2B5.1.13 items, the District Court erred in imposing an enhancement based on intended loss.

We acknowledge that a “form over substance” criticism can be leveled at that conclusion, but we are bound to follow what we perceive to be the plain meaning of the Guidelines . Fu rthermore, in the sentencing context it is firmly established that form

– i.e. procedure

– and substance are both of high importance. We have a responsibility “to ensure that a substantively reasonable sentence has been imposed in a procedurally fair way .” United States v. Levinson , 543 F.3d 190, 195 (3d Cir. 2008); see also Merced

, 603 F.3d at 2 14

- 15 (“[T]he broad substantive discretion afforded district courts ... makes adherence to procedural sentencing requirements all the more important.”). And, of

c ourse , our recognition that the District Court could reach this same result by use of a departure or variance does not mean that that result is compelled. On remand, Wright will have the opportunity to argue that neither a departure n or a variance is warr anted, something he was unable to do in the first instance. We cannot say whether the District Court will be persuaded by those arguments and, thus, cannot say whether the resulting sentence on remand will be identical to that already imposed. 6

6 The District Court’s statement that it would have imposed the same sentence whether or no t it had applied the 8

- level enhancement does not affect our disposition. We have previously held that a statement by a sentencing court that it would have imposed the same sentence even absent some procedural error does not render the error harmless unle ss that “alternative sentence” was, itself, the product of the three step sentencing process. United States v. Smalley

,14 Although the identified error requires that we vacate and remand

, w e emphasize again our agreement with the District Court’s conclusion that § 2B 5 .1 does not address the circumstances of this case. As we have already noted

, the focus of § 2B 5 .1 on face value fail s to capture the seriousness of Mr. Wright’s crime, and we endorse the District Court’s efforts to ensure that the sentence imposed is adequate in light of all relevant circumstances . We remand solely because those circumstance needed to be address ed at s teps two or three of the sentencing process , rather than through the imposition of a step

- one enhancement that, by its terms , does not apply.

I V. Conclusion

For the foregoing reasons, we will vacate Wright’s

sentence and remand for resentencing. 7

517 F.3d 208, 214

- 16 (3d Cir. 2008). Here, the District Court said only that it would have imposed the same sentence even absent the 8

- level enhancement, without explaining what the Guidelines range would have been without the enhancement, and without explaining why an upward departure or variance would be merited from that range. As the government concedes, that alternative sentence is procedurally insufficient and does not render the error here harmless.

7 Wright completed serving the 20

- month sentence on February 8, 2011. The case is not moot, however, because Wright is still serving his period of supervised release and if, on remand , the Distric t Court imposes a sentence of imprisonment less than the 20 months served, Wright may receive credit against his supervised release period for the excess months of imprisonment. See U nited States v.15 Cottman , 142 F.3d 160, 165 (3d Cir. 1998) ( holding that a sentencing appeal was not mooted by the prisoner’s release because if “the appropriate sentencing range [was] reduced

... . [it] would likely merit a credit against [the prisoner’s] period of supervised release for the excess period of impriso nment”).