N O T FO R PUB L ICAT IO N UNITED STATES C OUR T OF APPEALS FOR THE NINTH C IR C UIT UNITED STATES OF AM ER IC A, Plaintiff-Appe lle e , v. M OHAM M A D ADNAN KHAN, De fe nda

nt-Appe lla

nt. No. 15-10487

D.C . No. 2:12-c r-00180-M C E-1
M EM O R ANDUM *

UNITED STATES OF AM ER IC A, Plaintiff-Appe lle e , v. M OHAM M A D NAWAZ KHAN, De fe nda

nt-Appe lla

nt. No. 15-10505

D.C . No. 2:12-c r-00180-M C E-2

Appe a l from

the Unite d

Stat e s Distric t C ourt for the Ea ste rn Distric t of C a lifornia M o rrison C . Engla

nd, Jr., Distric t Judge , Pre siding Argue d a nd Subm itte d

June 15, 2017 San Fran c isc o , C a lifornia 

# F IL ED JUL 05 2017 M OLLY C. DW Y E R, CLERK U. S. CO URT O F APPEALS

* This disposition is not a ppropria te for public at ion a

nd is not pre c e de nt e xc e pt a s provide d

by 9th C ir. R . 36-3.B e fore : THOM AS, C hie f Judge , FR IEDLAND, C irc uit Judge , a nd C AR NEY, ** Distric t Judge
. De fe nda nts-Appe lla

nts M oha m m a d Adna

n Kha n (“ Adna n” ) and M oha

m m a d Nawa zKha

n (“ Nawa z ” ), son a

nd fathe r (toge the r, “ the Kha ns” ), a ppe a l the ir 108
and 150 m onth se n t e nc e s, re spe c tive ly , following the ir guilty ple a s to c onspira c y to
c om m it m a il fra

ud in viola

tion of 18 U.S.C . § 1349. 1 The Kha ns ple d guilty

to de vising a

nd pa rtic ipating in a

fic titious wage sc h e m e to de fraud the State of C a lifornia Em ploy m e nt De v e lopm e nt De pa

rtm e n t (“ EDD” ) into pa

y ing
une m ploy m e n t and disa b ility be ne fits to m any individuals who e ithe r did not work for the Kha

ns’ farm la bor c ontra c tor c om

pa n ie s or did not do so for the num be r of hours tha t the y re porte d to EDD. The Kha ns a sse rt tha

t the distric t

c ourt m a de thre e signific ant e rrors at

the ir se nte n c ings: (1) it fai le d to m ake the findings
re quire d unde r Fe de ra l R

ule of C rim ina l Proc e dure 32 re g a rding theloss a

m ounts,

** The Honora

b l e C orm a c J. C arne y , Unite d State s Distric t Judge for the C e ntra l Distric t of C a lifornia , sitting by de signa tion. 1 At his ple a h e aring, Adna n wa s a dvise d of the e le m e nts of c onspira c y to c om m it m a il fra

ud, 18 U.S.C . § 1349, hethe n ple d guilty to tha t c rim e , and c e rta i n pa rts of his ple a

a gre e m e nt c orre c tly

re fe r to tha

t offe nse . Howe ve r, the ple a a gre e m e nt e rrone ously

lists the e le m e nts of thesubsta ntive m a il fra

u d offe nse unde r 18 U.S.C . § 1341, his pre se nte nc e inve stiga tion re port re fe re nc e s § 1341 ra the r tha n § 1349, the

judgm e nt e nte re d a ga i nst him sta te s tha t he ple d guilty

to viola ting § 1341, a

nd the distric t c ourt sta

t e d at his se nte nc ing he a

ring tha t Adna n ple d guilty to viola ting § 1341. At re se nte nc ing, the distric t c ourt sha ll c o rre c t the s e e rrors in the re c ord. 2whic h we re re lie d on by the distric t

c o urt to a pply a twe nty -le ve l inc re a s e to the ir offe nse le ve ls unde r § 2B 1.1 of the Se nte nc ing Guide line s for a loss e x c e e d ing $7
m illion; (2) it ac c e pte d a s re a sona ble e stim ate s the loss a

m ounts se t forth in the Kha ns’ pre se nte nc e inve stiga

tion re ports (“ PSR s” ); a

nd (3) it de nie d the Kha

ns’
re que s t for a

n e vide ntia

ry he aring on theissue of loss a m ounts. W e re vie w de novo whe the r the distric t c ourt c om plie d with R

ule 32 in m aking its de te rm i nation of theloss a m o unts, Unite d

State s v . Stote rau , 524 F.3d 988, 1011 (9th C ir. 2008), we re vie w for c le ar e rror the fa c tua l findings unde rly ing the distric t c o urt’ s im

p osition of the

se nte n c ing e nha

nc e m e nt for the loss a

m o unts, 2 Unite d State s v . Garro , 517 F.3d 1163, 1167 (9th C i r. 2008), a nd we re vie w for
a buse o f disc re tion the distric t c ourt’ s de nia l of the Kha ns’ re que st for a

n
e vide ntia ry he a ring, Unite d State

s v . Sarno , 73 F.3d 1470, 1502 (9th C ir. 1995). W e va c a te the Kha

ns’ se nte nc e s a

nd re m a n d the i r c a s e s for re s e nte nc ing. W e a gre e with theKha

ns tha t the distric t c ourt’ s findings on the loss
am ounts we re ina de quate unde r R ule 32. W

h e n a de fe nda nt m ake s a

spe c ific fa c t ua l obje c tion to a

m atte r that will a ffe c t

se nte nc ing, a s both of theKha n s did

2 C ontra ry to the gove rnm e nt’ s a

rgum e nt, the Kha

ns re pe ate dly

c h a lle nge d the l oss a m ounts in the

PSR s be fore the distric t

c ourt, a nd the ir a rgum e nts on a ppe a l a re c onsiste nt with those

c ha lle nge s. Ac c ordingly , we re vie wfor c le ar e rror— not pla in e rror. Unite d State s v . Pallare

s-Galan , 359 F.3d 1088, 1094–95 (9th C ir. 2004). 3he re , the distric t c o urt m u st rule on the obje c tion a n d m ake “ e xp re ss” or “ e xplic it” fa c t ua l findings tha

t re s olve tha

t obje c tion. Unite d

State s v . Doe , 705 F.3d 1134, 1153 (9th C ir. 2013) (quoting Unite d State s v . Houston , 217 F.3d 1204, 1208 (9th C ir. 2000)). Stric t c om

plia nc e with R

ule 32 is re q

uire d
. Unite d State

s v . J ob , 851 F.3d 889, 906 (9th C ir. 2017) (quoting Doe , 705 F.3d a t 1153). Fa ilure to m ake the n e c e ssa

ry findings under R

u le 32 re quire s a de fe nda

n t’ s se nte nc e to be va c at e d
and the c a se re m ande d

for re s e n te nc ing. Unite d State s v . He rre ra-Rojas , 243 F.3d 1139, 1142 (9th C ir. 2001). The distric t c ourt he re m a de no fa c t ua l findings on the

Kha ns’ obje c tions
re ga rding the loss a

m ounts. ThePSR s e stim ate d a n a c tua l loss of $6.7 m

illion a nd
an inte nde d loss of $13.2 m illion for Adna

n, a nd e s tim at e d a

n a c tua l loss of $7.1
m illion a n d a n inte nde d loss of $14.1 m illion for Na

wa z . The Kha

ns spe c ific a lly obje c te d to the se e stim a te s of inte nde d a nd a c tua l loss, c onte nding tha t the
e stim a te s we re infla

te d a nd wrongfully

inc lude d am ounts pa id by EDD for le gitim ate be ne fits c la im s. The distric t c o urt sum m a rily ove rrule d those obje c tions
and a dopte d the e stim a te d loss a m o unts se t

forth in thePSR s without making a ny spe c ific fa c tua l finding on the Kha ns’ obje c tions. A district c ourt m ay not sim ply
re ly on the fa c t

ua l sta te m e nts in a

PSR whe n a de fe nda n t obje c ts to those fa c ts.

4Unite d

State s v . Show alte r , 569 F.3d 1150, 1160 (9th C ir. 2009) (c iting Unite d State s v . Ame line , 409 F.3d 1073, 1085–86 (9th C ir. 2005) (e n ba nc )). W e a lso a gre e with theKha ns tha t the distric t c ourt c l e arly

e rre d whe n it
a c c e pte d the e stim a te s of the loss a m ounts se t forth in thePSR s to a pply a twe nty le ve l e nha

nc e m e nt to the ir se n te nc e s unde r § 2B 1.1 of the Se nte nc ing Guide line s for a l oss e xc e e ding $7 million. The distric t c ourt m

ust c orre c tly c a lc ulate the Se nte n c i ng Guide l ine s ra

nge be fore se nte nc i ng a

de fe nda nt. Gall v . Unite d State

s , 552 U.S. 38, 49 (2007). If the distric t c ourt m ake s a m ate ria l m isc a lc ulation, a de fe nda n t’ s se n te nc e m

ust be va c ate d

and the c a se re m a

n de d for re se nte nc ing. Show a lte r , 569 F.3d a

t 1159 (c iting Unite d State s v . Zolp , 479 F.3d 715, 721 (9th C ir. 2007)). T he gove rnm e nt be ars the burde n of proof whe n it se e k s se nte nc ing
e nha nc e m e nts, Ame line , 409 F.3d a t 1086, a nd m ust de m onstra

te the ba sis for a loss a m ount e nha

n c e m e n t by

a pre ponde ran c e of the e vide nc e , Unite d State s v . Laurie nti , 611 F.3d 530, 556 (9th C ir. 2010). The distric t c ourt ne e d not c a lc ulate loss a m ount with “ a

bsolute pre c ision” but ra

t he r only ne e ds to m ake a

“ re a sona ble
e stim a te ” of loss a

m ount. Id. at 558 (quoting Zolp , 479 F.3d a t 719). The Se nte nc ing Guide line s e nha nc e m e nt for loss a

m ount unque stiona

bly ha d a m a te ria l im

pa c t on the Kha

ns’ se nte nc e s. Inde e d, it wa s the m ost signific ant fa c t or in the c a l c ulation of the i r offe nse le ve ls unde r the Se nte nc ing Guide line s. 5Ye t we c annot disc e rn from the re c ord be fore us whe the r the e s tim at e s of the a c tua l
and inte nde d losse s se t forth in thePSR s a nd re lie d on by

the distric t c ourt to a

pply the Se nte nc ing Guide line s e nha nc e m e nt we re re a sona

ble . No e xpla

nation or
ana ly sis of how those

e stim a te s we re c a lc ulate d, wha t proportion of those

e stim at e s
we re attributa

ble to le gitim a te pa

ym e nts m a d e by EDD for le gitim ate be ne fits
c la im s, a nd why those pa

ym e nts we re inc lude d in the e stim ate s wa s provide d by the d istric t c o urt, se t forth in thePSR s, or offe re d by the gove rnm e nt be fore the distric t c o urt or in its e v i de ntia ry subm issions on a

ppe a l . Tha

t om i ssion is pa rtic u la rly proble m a tic give n tha

t the gove rnm e nt’ s own e v ide nc e de m o nstra te s that at le a st som e proportion— pe rha ps a s m uc h a s 30%— of EDD pa

ym e nts we nt to le gitim a t e c l a im ants. W e are thus le ft gue ssing a s to the e xpla nation or a

n a ly sis supporting the

loss a m o unts. B e c a

use it is not a

ppa re nt from the re c ord whe the r those loss a

m ounts a re a re a sona ble e stim ate of inte nde d loss, wec onc lude tha t the distric t c o urt e rre d. Fina lly , the distric t c ourt did not a b use its disc re tion whe n it de nie d the Kha ns’ re que st for a

n e vide ntia

ry he aring on theloss a

m o unts. “ T he re is no ge ne ra l right to a

n e vide ntia

ry he aring a t se nte nc i ng.” U

nite d State

s v . Laurie nti , 731 F.3d 967, 972 (9th C ir. 2013) (a lte ra tion omitte d) (quoting Unite d State s v . Re al-He rnande

z , 90 F.3d 356, 362 (9th C ir. 1996)). A distric t c ourt m ay re fuse to 6hold one a s long a s the de fe nda nt is a llowe d a

n opportunity

to re b ut the findings
and re c om

m e ndations of a

PSR through ora l or writte n subm issions. Sarno , 73 F.3d at 1502–03 (c iting Unite d State s v . Bak e r , 894 F.2d 1083, 1084–85 (9th C ir. 1990)). He re , the Kha

ns we re provide d e xte nsive disc ove ry m onths in a dva

nc e of the i r se nte nc ings a

nd we re give n am

ple opportunitie s to pre se nt both written a nd
ora l se nte nc ing submissions. Inde e d, c ontinua nc e s of the ir se n te nc ing he arings
we re grante d by

the distric t c ourt for this ve ry purpose . It wa s the re fore we ll within thedistric t c o urt’ s disc re tion to c onc l ude tha t the Kha ns ha d be e n give n a

n
am ple opportunity

to pre se nt the ir a

rgum e nts.
V ACAT E D AND RE M ANDE D.

7