1999 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

2-23-1999

USA v. Cohen

Precedential or Non-Precedential:

Docket 97-1888

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Recommended Citation

"USA v. Cohen" (1999). 1999 Decisions. Paper 47.

http://digitalcommons.law.villanova.edu/thirdcircuit_1999/47
Filed February 19, 1999 

UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

Nos. 97-1888 and 98-1004 

UNITED STATES OF AMERICA, 

 Appellant in No. 97-1888 

v. 

GERSON COHEN, 

 Appellant in No. 98-1004 

On Appeal from the United States District Court 

for the Eastern District of Pennsylvania 

(D.C. Crim. No. 97-124) 

District Judge: Honorable Clarence C. Newcomer 

Argued June 8, 1998 

Reargued January 12, 1999 

Before: SCIRICA, NYGAARD, and ROTH,* Circuit Judges

(Opinion filed February 19, 1999) 

_________________________________________________________________ 

* Judge Seitz was a member of the original panel. However, he died 

before the matter was decided. Judge Roth has been designated a 

member of the panel in his stead. 
 Michael R. Stiles 

 Walter S. Batty, Jr. 

 Amy L. Kurland (Argued) 

 Office of the United States Attorney 

 Suite 1250 

 615 Chestnut Street 

 Philadelphia, PA 19106 

 Counsel for Appellant/Cross- 

 Appellee United States of America 

 Catherine M. Recker (Argued) 

 Aeryn S. Fenton 

 Welsh & Recker, P.C. 

 Suite 3402 

 1818 Market Street 

 Philadelphia, PA 19103 

 Counsel for Appellee/Cross- 

 Appellant Gerson Cohen 

OPINION OF THE COURT 

NYGAARD, Circuit Judge. 

A jury convicted Gerson Cohen of mail fraud for paying 

kickbacks to a grocery store's purchasing agents. Cohen 

challenges his conviction, claiming that the evidence was 

insufficient; that the Court improperly admitted evidence 

that his co-conspirators had pleaded guilty; and that the 

Court wrongfully denied judicial immunity to a defense 

witness. We will affirm his conviction. The Government 

appeals Cohen's sentence, claiming that the District Court 

erred in calculating the enhancement by using the dollar 

value of the bribes rather than the benefit conferred by the 

bribe, and by granting a reduction for accepting 

responsibility. We will vacate Cohen's sentence and remand 

for resentencing. 

I. 

Butler Foods, a wholesale meat distribution company, 

sells meat to supermarket chains, individual grocery stores, 

 2 
and restaurants. Butler Foods' salesmen made illegal cash 

payments to customers' meat managers to induce them to 

purchase from Butler Foods. The payments usually 

amounted to one penny per pound of meat purchased, 

provided that the customer bought at least 10,000 pounds 

a week. After customers made qualifying purchases, Larry 

Lipoff, part owner of Butler Foods, gave the kickback 

money to his salesmen, who then delivered the cash to the 

meat managers. 

Gerson Cohen, a meat salesman for Butler Foods, 

participated in this illegal payment scheme. From 1992 

through 1995, Cohen paid kickbacks totaling $111,548.21 

to five meat managers for Thriftway Food Stores. In

addition to Cohen's regular salary by corporate check, 

Butler Foods paid Cohen $500 per week in cash. He failed 

to report this income on his tax returns for three years, 

resulting in a tax deficiency of $23,939. He was charged 

with twenty-five counts of mail fraud, in violation of 18 

U.S.C. S 1341, and three counts of subscribing a false tax 

return, in violation of 26 U.S.C. S 7206. The District Court 

severed the charges and convened a jury trial on mail 

fraud. 

The jury convicted Cohen on all twenty-five counts of 

mail fraud. He then pleaded guilty to the three counts of 

income tax fraud. Applying U.S.S.G. S 2B4.1 to Cohen's 

participation in the kickback scheme, the District Court 

initially assigned a base offense level of 8, then enhanced it 

6 levels by using the actual dollar amount of the kickbacks. 

It granted Cohen a decrease of 2 levels under U.S.S.G. 

S 3B1.2(b) for his minor role in the offense. The Court then 

considered Cohen's tax offenses and assigned a combined 

offense level of 14 under U.S.S.G. S 3D1.4. Finally, the 

Court granted Cohen a reduction of 2 levels for accepting 

responsibility under U.S.S.G. S 3E1.1. The District Court 

sentenced Cohen to twenty-eight concurrent terms offive 

months in prison, five months home confinement, three 

years supervised release, a $7500 fine, and a $1400 special 

assessment. 

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II. 

A. 

Cohen first argues that the Government's evidence was 

insufficient to prove that he used the U.S. mail. We 

disagree. An essential element of mail fraud is "the use of 

the United States mails in furtherance of the fraudulent 

scheme." United States v. Hannigan, 27 F.3d 890, 892 (3d 

Cir. 1994). This element requires some competent evidence 

that, as a routine business practice or office custom, the 

type of document at issue in the case was sent through the 

U.S. mail. See id. at 893-94. As we indicated in Hannigan, 

"the prosecution need not affirmatively disprove every 

conceivable alternative theory as to how the specific 

correspondence was delivered," but "some reference to the 

correspondence in question is required." Id. at 892-93. 

Cohen himself need not have placed the particular 

documents into the U.S. mail. A mailing is knowingly 

caused within the terms of the statute "[w]here one does an 

act with knowledge that the use of the mails will follow in 

the ordinary course of business." Pereira v. United States, 

347 U.S. 1, 8-9, 74 S. Ct. 358, 363 (1954).1 Here, the 

bookkeeper for Butler Foods, who supervised the clerical 

workers who were responsible for generating and mailing 

invoices, testified extensively about the company's standard 

business practice for billing its customers. She testified 

that after the meat invoices were prepared, they were 

placed in envelopes, run through the postal meter, and put 

in a U.S. mail bin which Lipoff took to the post office in his 

car. She testified that Butler Foods never used any delivery 

method other than the U.S. mail for any of its invoices, and 

that the Thriftway invoices at issue in this case were 

handled in the normal manner. 

A manager at the company testified that it was standard 

practice to pick up the invoices in the U.S. mail bin and 

_________________________________________________________________ 

1. In a factually similar case, the Ninth Circuit Court of Appeals held 

that a meat buyer for a supermarket chain was subject to the statute 

even though he did not personally participate in the relevant mailings. 

See United States v. Lea, 618 F.2d 426, 430 (9th Cir. 1980). 

 4 
drop them off at the post office, and that he himself did this 

on occasion. Finally, an accountant for the Thriftway stores 

testified that it was normal business practice for his 

company to receive Butler Foods' invoices through the U.S. 

mail. This testimony provides sufficient evidence that Butler 

routinely delivered its invoices through the U.S. mails. 

B. 

Next, Cohen argues that the District Court erred by

admitting evidence that the three Thriftway meat managers 

whom the Government called as witnesses had pleaded

guilty to receiving kickbacks from Cohen. Cohen contends 

that this evidence was inadmissible under Federal Rule of 

Evidence 403 because the risk that the jury would convict 

him based on his co-conspirators' guilty pleas substantially 

outweighed their probative value. We review the admission 

of such evidence only for abuse of discretion. See United 

States v. Gaev, 24 F.3d 473, 476 (3d Cir. 1994). 

Although the plea agreements of co-conspirators are not 

admissible to prove the defendant's guilt, they are

admissible for some purposes: to rebut the inference that 

the defendant was unfairly singled out for prosecution, to 

dampen attacks on credibility, to foreclose an inference that 

the prosecution is hiding evidence, to explain the witness's 

firsthand knowledge of the defendant's misdeeds, and to 

elicit facts bearing on the witness's credibility. In Gaev, we 

held that the general principle applicable to the admission 

of such testimony is this: "If a co-conspirator who appears 

as a witness has pleaded guilty, the trier of fact should 

know about the plea agreement in order properly to 

evaluate the witness's testimony, unless that would unduly 

prejudice the defendant." Id. 

Cohen argues that admitting the guilty pleas of the three 

Thriftway meat managers was an abuse of discretion 

because he promised not to attack their credibility on that 

basis. However, "[w]hile plea agreements have often been 

admitted in response to actual or anticipated attacks on a 

witness's credibility, an attack is not always necessary to 

justify their introduction." Id. at 477-78. Even absent any 

suggestion by Cohen, it would have been natural for the 

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jury to wonder why Cohen was prosecuted but the meat 

managers were not. Moreover, the guilty pleas were 

admissible to impeach the credibility of the managers, 

whose testimony supported Cohen's claim that paying

kickbacks was a common practice in the wholesale meat 

industry, and therefore, not criminal. That these same 

managers had entered guilty pleas for accepting the

payments contradicted this testimony. The District Court 

concluded that admitting the guilty pleas was proper for 

one or all of the reasons cited in Gaev and would not be 

unduly prejudicial to defendant Cohen. 

In any case, a proper limiting instruction will normally 

cure a potentially prejudicial admission of plea agreements. 

The District Court instructed the jury not to draw 

conclusions or inferences about Cohen's guilt from the fact 

that prosecution witnesses had pleaded guilty to similar 

charges. Because the Government proffered the evidence for 

valid purposes, and the District Court gave a sufficient 

limiting instruction, admitting the guilty pleas was well 

within the Court's discretion. 

C. 

Cohen also claims that the District Court erred by 

refusing to confer judicial immunity on a witness crucial to 

his defense. According to Cohen's proffer, Larry Lipoff, part 

owner of Butler Foods, would have testified that Harold 

Friedland, owner of several Thriftway stores, admitted 

knowing of Cohen's kickbacks to two Thriftway meat 

managers. That knowledge, the defense contends, would 

have prevented Cohen from being found guilty under the 

fraud statute. When Cohen attempted to call him as a 

defense witness, Lipoff invoked his Fifth Amendment

privilege against self-incrimination. The Government 

refused to immunize Lipoff, who was under investigation for 

his role in the kickback scheme, and the District Court 

refused Cohen's request to confer judicial immunity on 

Lipoff. 

A judge may confer immunity on a defense witness who 

otherwise refuses to testify if five conditions are met: the 

immunity is properly sought in the district court, the 

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witness is available to testify, the proffered testimony is 

clearly exculpatory, the proffered testimony is essential to 

the defense, and there is no strong governmental interest 

against the immunity. See Government of V.I. v. Smith, 615 

F.2d 964, 972-73 (3d Cir. 1980). A potential prosecution of 

the prospective witness is a sufficient governmental interest 

to countervail a grant of judicial immunity. See United 

States v. Lowell, 649 F.2d 950, 965 (3d Cir. 1981). Here, 

the Government suspected that Lipoff, as the owner of 

Butler Foods and Cohen's employer, was the architect of 

the kickback scheme. Lipoff was under investigation at the 

time of Cohen's trial and has since been indicted for his 

role. Therefore, because the Government had a strong 

interest in not immunizing Lipoff, the District Court 

correctly denied judicial immunity. 

D. 

Finally, Cohen argues that the Government is 

impermissibly using his post-conviction immunized 

testimony. After Cohen's conviction, the Government

granted him use immunity and compelled him to testify 

before a grand jury. Shortly thereafter, the Government 

appealed Cohen's sentence, and the same prosecutor who 

questioned him before the grand jury filed the 

Government's appellate brief. Based on this fact, Cohen 

claims that the Government is exploiting his immunized 

testimony in this appeal. 

It is true, of course, that the Government may not use a 

witness's compelled immunized testimony as evidence

against him in a subsequent criminal prosecution. See 18 

U.S.C. S 6002. Thus, Cohen's immunized testimony may 

have tainted a subsequent trial, were we ordering one. 

Moreover, the decision of the U.S. Attorney here could 

potentially have infected this appeal if Cohen could point to 

some information given in the immunized testimony that 

the Government is using against him. Cohen, however, has 

not alleged any specific manner in which the Government 

used the information learned during his immunized 

testimony to gain an unfair advantage in this appeal. The 

Government supported all factual assertions in its brief 

with citations to the District Court record and made no 

 7 
reference to Cohen's immunized testimony. Cohen, 

therefore, has not shown any prejudice to him from this 

dual role of the prosecutor. 

III. 

The Government appeals Cohen's sentence, arguing that 

the District Court misapplied two sections of the United 

States Sentencing Guidelines. We review the District 

Court's factual findings for clear error. Questions regarding 

the District Court's interpretations of the sentencing 

guidelines are "purely legal," and thus require plenary 

review. United States v. Frierson, 945 F.2d 650, 655 (3d Cir. 

1991). 

A. 

First, the Government argues that the District Court 

misinterpreted U.S.S.G. S 2B4.1 by enhancing Cohen's 

sentence with reference to the actual dollar amount of the 

kickbacks rather than to the net value Butler Foods gained 

as a result of those kickbacks. Section 2B4.1(a) assigns an 

initial base offense level of 8 to conduct involving 

commercial bribery and kickbacks. Subsection (b)(1) then 

provides an enhancement based on the greater of two dollar 

amounts: "the value of the bribe or the improper benefit to 

be conferred." The commentary to this section states that if 

the latter figure cannot be estimated, then the court must 

use the former. See U.S.S.G. S 2B4.1 application note 6. 

At sentencing, the parties disagreed over the correct 

interpretation of "improper benefit." The Government 

argued that the phrase referred to the net value Butler 

Foods gained as a result of Cohen's payment of the 

kickbacks. Cohen argued that it referred to the money he 

himself pocketed as a result of his kickbacks. In a colloquy 

with Cohen's attorney, the District Court appeared to agree 

that "improper benefit" meant the money accruing to Cohen 

as an individual. The Court then found it "extremely 

difficult, if not impossible, to measure the benefit to the 

briber in this case." Therefore, it instead used the actual 

dollar amount of the kickbacks, $111,548.21, to enhance 

 8 
Cohen's base offense by 6 levels. See U.S.S.G. 

SS 2B4.1(b)(1), 2F1.1(b)(1)(G). 

The District Court misinterpreted "improper benefit." 

"Improper benefit" is "the value of the action to be taken or 

effected in return for the bribe." U.S.S.G. S 2B4.1

application note 2. The commentary to section 2B4.1 crossreferences section 2C1.1, the comments to which state: 

 The value of "the benefit received or to be received" 

 means the net value of such benefit. Examples: . .. A 

 $150,000 contract on which $20,000 profit was made 

 was awarded in return for a bribe; the value of the 

 benefit received is $20,000. Do not deduct the value of 

 the bribe itself in computing the value of the benefit 

 received or to be received. In the above examples, 

 therefore, the value of the benefit received would be the 

 same regardless of the value of the bribe. 

U.S.S.G. S 2C1.1 application note 2 (emphasis added). In 

addition, the comments to section 2B4.1 state: 

 As with non-commercial bribery, this guideline 

 considers not only the amount of the bribe but also the 

 value of the action received in return. Thus, for 

 example, if a bank officer agreed to the offer of a 

 $25,000 bribe to approve a $250,000 loan under terms 

 for which the applicant would not otherwise qualify, 

 the court, in increasing the offense level, would use the 

 greater of the $25,000 bribe, and the savings in 

 interest over the life of the loan compared with 

 alternative loan terms. If a gambler paid a player 

 $5,000 to shave points in a nationally televised 

 basketball game, the value of the action to the gambler 

 would be the amount that he and his confederates won 

 or stood to gain. If that amount could not be estimated, 

 the amount of the bribe would be used to determine 

 the appropriate increase in offense level. 

U.S.S.G. S 2B4.1 application note 6 (emphasis added). 

Thus, "improper benefit" refers to the net value accruing 

to the entity on whose behalf the individual paid the bribe. 

Other courts agree. See, e.g., United States v. Landers, 68 

F.3d 882, 884 (5th Cir. 1995) (sales representative who 

 9 
paid bribes is subject to enhancement based on the net 

value his employer derived from contracts obtained as a 

result of the bribes); United States v. Ziglin, 964 F.2d 756, 

758 (8th Cir. 1992) (defendant subject to enhancement for 

the total amount of improper benefit that resulted from 

bribery scheme, not merely for his individual share); United 

States v. Kant, 946 F.2d 267, 269 (4th Cir. 1991) 

(defendant's sentence must be enhanced based on net

value of improper benefit accruing to him and his two coconspirators). 

Cohen's attorney conceded at oral argument that this 

understanding of "improper benefit" is correct. She

acknowledged that the net value of the contracts gained by 

Butler Foods as a result of the Thriftway kickback scheme 

would be the appropriate basis for calculating Cohen's 

sentence, if the Government's evidence accurately reflected 

the net value of these contracts. 

At sentencing, the Government adduced evidence of the 

"improper benefit" that accrued to Butler Foods. Cohen's 

kickbacks induced Thriftway to purchase $10,000,000

worth of meat from Butler Foods, whose seven percent 

margin yielded a profit of $700,000. On remand, the

District Court must specifically address the evidence 

produced by the Government and any contrary evidence 

put forth by Cohen and state its reasons for accepting or 

rejecting the evidence. A $700,000 "improper benefit," if 

sufficiently proved, mandates an enhancement of 10 levels 

to Cohen's base offense. See U.S.S.G. SS 2B4.1(b)(1), 

2F1.1(b)(1)(K). 

Cohen offers two other arguments to support the District 

Court's enhancement calculation. First, he claims that 

section 2B4.1(b)(1) permits enhancement based on 

"improper benefit" only if that benefit would not have been 

realized "but for" the kickback. We do not interpret section 

2B4.1 to be so rigid. The text requires the court to estimate 

the value of the "improper benefit to be conferred." "To be 

conferred" is tentative language that requires something 

less than actual causation; it could include any benefit that 

the briber expected to receive at the time he paid the bribe, 

even if he did not ultimately receive it. If Cohen's reading 

were correct, the language would read "improper benefit 

 10 
actually conferred" rather than "to be conferred." Moreover, 

even if Cohen's claim that most distributors paid kickbacks 

to customers is accurate, his "but for" argument fails. If 

paying kickbacks to potential customers was as 

commonplace as Cohen claims, then it follows that the 

contracts secured by Butler Foods as a result of its 

acquiescence in this illegal practice would not have been 

conferred if Cohen had not made these payments. 

Second, Cohen argues that the Government should be 

estopped from claiming that the actual dollar amount of the 

bribe was the correct measure under section 2B4.1. In 

prosecuting the three Thriftway meat managers for their 

roles in accepting Cohen's bribes, the Government entered 

into plea agreements stating that "the value of the improper 

benefit to Butler Foods to be conferred by the 

bribery/kickback payments is not readily provable as of the 

date of this agreement." In these earlier plea agreements, 

the Government simply acknowledged that, at that time, it 

did not have enough information to calculate the improper 

benefit to Butler Foods. By the time of Cohen's conviction, 

the Government had learned the relevant facts--the total 

value of meat Thriftway purchased and Butler's profit 

margin--that permitted the proper determination. Hence, 

Cohen's estoppel theory fails entirely. 

We conclude that the District Court misinterpreted 

section 2B4.1 and, as a result, may have applied an

incorrect enhancement to Cohen's base offense level. 2 We 

will therefore vacate and remand for resentencing. Of 

course, it remains for the District Court to find whether the 

Government has proven its claims of resulting value by a 

preponderance of the evidence. See United States v.

McDowell, 888 F.2d 285, 291 (3d Cir. 1989). 

_________________________________________________________________ 

2. Judge Scirica notes that where the improper benefit conferred on a 

principal is grossly disproportionate to the bribe paid and to the amount 

received by the agent, and the disproportion is "present to an exceptional 

degree," a downward departure under S 5K2.0 might be appropriate. 

Koon v. United States, 518 U.S. 81, 96 (1996). 

 11 
B. 

The Government also argues that the District Court erred 

by granting Cohen a 2-level reduction under section 3E1.1. 

The District Court must reduce the base offense by 2 levels 

"[i]f the defendant clearly demonstrates acceptance of 

responsibility for his offense." U.S.S.G. S 3E1.1. The 

determination of the sentencing judge as to whether such 

acceptance of responsibility has been shown "is entitled to 

great deference on review." U.S.S.G. S 3E1.1 application 

note 5. 

At sentencing, Cohen stated to the Court: "If I would have 

known when this started that it was going to be like this, 

your Honor, I would have lost the job and I would have 

gladly lost it. I'm sorry." The District Court found that 

Cohen "has accepted responsibility for his offenses, borne 

out by his statements here in court," and granted Cohen 

the reduction. 

The Government argues that Cohen should not have been 

granted this reduction because he went to trial on the mail 

fraud counts. This argument is supported by an application 

note to section 3E1.1 which states: "This adjustment is not 

intended to apply to a defendant who puts the Government 

to its burden of proof at trial by denying the essential 

factual elements of guilt, is convicted, and only then admits 

guilt and expresses remorse." U.S.S.G. S 3E1.1 application 

note 2. While the note admits to some rare exceptions (for 

example, a defendant may go to trial to "assert and

preserve issues" unrelated to factual guilt), none of those 

appear to be applicable to Cohen. See id. In addition, "in 

each [rare exception], . . . a determination that a defendant 

has accepted responsibility will be based primarily upon 

pre-trial statements and conduct." Id. 

Cohen argues that the effect of application note 2 is to 

create an unconstitutional burden on defendants in 

Cohen's position by effectively penalizing them for asserting 

their constitutional right to trial. Our holding in Frierson, 

945 F.2d at 650, offers some support for this position. In 

Frierson, we held that the denial of a reduction under 

section 3E1.1 is a penalty which cannot properly be

imposed solely for the defendant's assertion of his Fifth 

Amendment privilege. See id. at 658-59. 

 12 
The characterization of 3E1.1 reductions has been the 

subject of some dispute. Even within circuits, the approach 

has occasionally been erratic. Compare United States v. 

Parker, 903 F.2d 91, 105 (2d Cir. 1990) ("We, like the 

Eleventh Circuit, `are unprepared to equate the possibility 

of leniency with impermissible punishment.' "), with United 

States v. Oliveras, 905 F.2d 623, 626 (2d Cir. 1990) ("So 

long as the defendant's statements are not immunized 

against use in subsequent criminal prosecutions, the effect 

of requiring a defendant to accept responsibility for crimes 

other than those to which he has pled guilty or of which he 

has been found guilty is to penalize him."). A majority of the 

other courts construe denied 3E1.1 reductions as"denied 

benefits" rather than "penalties." See, e.g., United States v. 

Frazier, 971 F.2d 1076, 1086 (4th Cir. 1992) ("we fail to see 

how withholding the leniency offered in U.S.S.G.S 3E1.1 

from those who refuse to waive their right to remain silent 

can be thought punitive"); United States v. White, 869 F.2d 

822, 826 (5th Cir. 1989) ("The fact that a more lenient 

sentence is imposed upon a contrite defendant does not 

establish a corollary that those who elect to stand trial are 

penalized."); United States v. Henry, 883 F.2d 1010, 1011 

(11th Cir. 1989) ("Section 3E1.1 may add to the dilemmas 

facing criminal defendants, but . . . [w]e are unprepared to 

equate the possibility of leniency with impermissible 

punishment."). These decisions often rely on Corbitt v. New 

Jersey, 439 U.S. 212, 99 S. Ct. 492 (1978). 

We believe that Corbitt controls our decision. In Corbitt, 

the Supreme Court held that a New Jersey murder statute 

that provided the potential for a shorter sentence to 

defendants who pleaded non vult was constitutional and did 

not violate the defendant's Sixth Amendment right to trial. 

See Corbitt, 439 U.S. at 218, 99 S. Ct. at 497. In doing so, 

the Court noted that "not every burden on the exercise of 

a constitutional right, and not every pressure or 

encouragement to waive such a right, is invalid. 

Specifically, there is no per se rule against encouraging 

guilty pleas." Id. at 218-19, 99 S. Ct. at 497. To the extent 

that Corbitt is in tension with our decision in Frierson, we 

must follow the Supreme Court. Sentencing Guideline

3E1.1 creates an analogous incentive for defendants to 

 13 
plead guilty, and under Corbitt, this incentive is 

constitutional. 

Were this simply a matter of determining a defendant's 

credibility, we would defer entirely to the District Court 

because we cannot claim to have an equal ability to

perceive and judge the defendant's demeanor. That is to 

say, the words "I am sorry," uttered by a defiant defendant, 

mean nothing. The same words from a contrite defendant 

mean everything. Here, however, because the sentencing 

guidelines need to be consistently interpreted to serve their 

purpose, and because the comments to the various sections 

provide an avenue to consistent interpretation, we must see 

that they are applied by a sentencing court. We will vacate 

and remand for further consideration. 

We recognize that this case presents the unusual 

situation in which the defendant has pleaded guilty to some 

of the charges against him (the tax counts) while going to 

trial on others. The sentencing guidelines do not specifically 

address this situation, noting only that "truthfully 

admitting the conduct comprising the offense(s) of 

conviction" is a factor for the judge to consider. U.S.S.G. 

S 3E1.1 application note 1(a). In cases such as this, the 

trial judge "has the obligation to assess the totality of the 

situation in determining whether the defendant accepted 

responsibility." McDowell, 888 F.2d at 293 n.2. Were the 

District Court able to grant a credit for Cohen's guilty plea 

to the three tax charges separately, then we would see no 

error. However, the guidelines do not allow for this because 

multiple counts of conviction must be grouped before an 

adjustment can be made for acceptance of responsibility 

under Part E of Chapter 3 of the guidelines. See U.S.S.G. 

S 1B1.1. As a result, the "totality" assessment must include 

the fact that Cohen originally pleaded not guilty to all the 

counts and put the Government to its proof on the majority 

of the charges, pleading guilty to the tax counts only after 

being convicted on the bribery charges. 

IV. 

Because we conclude that the District Court 

misinterpreted sections 2B4.1 and 3E1.1 of the sentencing 

 14 
guidelines, and that it must make findings of fact with 

respect to whether the Government has proved the benefit 

to be conferred upon Butler Foods, we will vacate Cohen's 

sentence and remand for resentencing in accordance with 

this opinion. We reject all other allegations of error. 

A True Copy: 

Teste: 

 Clerk of the United States Court of Appeals 

 for the Third Circuit 

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