1 18-3765 United States v. Bayfield 

### UNITED STATES COURT OF APPEALS FOR THE SECO ND CIRCUIT SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROC EDURE 32.1 AND THIS COURT = S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMEN T FILED WITH THIS CO URT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATA BASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING TO A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPR ESENTED BY COUNSEL. At a stated term of the United States Court of Appeals for th e Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Fole y Square, in the City of New York, on the 4 th day of December, two thousand nineteen. Present: P IERRE N. L EVAL , R ICHARD C. W ESLEY , D EBRA A NN L IVINGSTON , Circuit Judges

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_____________________________________ U NITED S TATES OF A MERICA , Appellee , v. 18-3765-cr J AMES B AYFIELD , Defendant-Appellant

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_____________________________________ For Appellee: D AVID P ITLUCK , Assistant United States Attorney (Kevin Trowel, Mark E. Bini, Michael Keilty, Assistant United States Attorneys, on the brief ), for Richard P. Donoghue, United States Atto rney for the Eastern District of New York, Brooklyn, NY For Defendant-Appellant: J EREMY G UTMAN , New York, NY

* The Clerk is respectfully requested to amend the caption accordingly.2 Appeal from a judgment of the United States Dist rict Court for the East ern District of New York (Vitaliano, J .). UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the judgment of the district court is AFFIRMED in part and REMANDED for proceedings consistent with this order. Defendant-Appellant James Bayfield (“Ba yfield”) appeals from a December 19, 2018 judgment and sentence of 21 months incarceration fo llowed by three years of supervised release, in the United States District Court for th e Eastern District of New York (Vitaliano, J .) following a conviction after jury trial for one count of conspiracy to commit bank fra ud and wire fraud in violation of 18 U.S.C. §§ 1343, 1344, 1349 and three c ounts of bank fraud in vi olation of 18 U.S.C. § 1344. Bayfield’s conviction aros e from his participat ion in a scheme to obtain mortgages on favorable terms by submitting fals e documentation to the issuing banks. We assume the parties’ familiarity with the underlying fact s, the procedural history of th e case, and the issues on appeal. * * * I. The False Deed In December 2012, four years af ter the completion of one of the fraudulent real-estate transactions underpinning Bayfield ’s conviction, Bayfield forged a deed (the “False Deed”) purporting to transfer one of the properties at issue (“the Property”) from the transaction’s straw buyer to himself, backdating the d eed to the month after the transa ction took place. At trial, the government introduced evidence of this False Deed to show Bayfield’s k nowledge that the straw buyer, who falsely indicated that sh e resided at the Property in order to secure a lowe r interest rate, “was never going to be the primar y resident of that property.” See G.A. 165. In fact, Bayfield intended to reside at the Propert y, and did so until he began se rving his senten ce in connection3 with the conviction appealed from here. Bayfield argues that evidence of this False Deed was unfairly prejudicial character ev idence in violation of Federa l Rules of Evidence 403 and 404, and that its admission was therefore an abuse of the district court’s discretion. We conclude that the district court properly admitte d evidence of the False Deed pursuant to Rule 404(b). We review a district cour t’s evidentiary rulings for abuse of discretion. United States v. McDermott , 245 F.3d 133, 140 (2d Cir. 2001). We will overtur n such a ruling only if it “cannot be located within the range of permis sible decisions or is based on a clearly erroneous factual finding or an error of law.” United States v. Scully , 877 F.3d 464, 474 (2d Cir. 2017) (internal quotation marks omitted). Under Rule 404(b) , “[e]vidence of a crime, wrong, or other act is not admissible to prove a person’s character in order to show that on a particular occasion the person acted in accordance with the character.” Fed. R. Evid. 40 4(b). But such “evidence may be admissible for another purpose, such as proving motive, oppor tunity, intent, preparation, plan, knowledge, identity, absence of mistake , or lack of accident.” Id . Our Circuit takes an “inclusionary approach” designed to admit evidence “for any purpose othe r than to demonstrate criminal propensity.” United States v. Paulino , 445 F.3d 211, 221 (2d Cir. 2006) (inter nal quotation marks omitted). But our precedent requires that “the reviewing court consider[] whether (1) [the evidence] was offered for a proper purpose; (2) it was rele vant to a material issue in dis pute; (3) its probative value is substantially outweighed by its pr ejudicial effect; and (4) the tr ial court gave an appropriate limiting instruction to the jury if so requested by the defendant.” 1 U.S. v. LaFlam , 369 F.3d 153, 156 (2d Cir. 2004) ( per curiam ); see also Huddleston v. United States , 485 U.S. 681, 691–92

1 Since Bayfield did not request a special limiting instruction on this point, we need not address this element of the Rule 404 analysis. See United States v. Scott , 677 F.3d 72, 79 (2d Cir. 2012) (“No limiting instruction was requested here, a nd so we limit our analysis to the first three factors.”).4 (1988). This analysis incorporates th e balancing test required under Rule 403. See United States v. Scott , 677 F.3d 72, 83 (2d Cir. 2012); U.S. v. Curl ey, 639 F.3d 50, 56 (2d Cir. 2011) (explaining that the Second Circuit’s 404(b) te st admits “other act” eviden ce “that does not serve the sole purpose of showing the defendant’s bad character and that is neith er overly prejudicial under Rule 403 nor irrelevant under Rule 402”). It was well within the district court’s disc retion to admit evidence of the False Deed pursuant to Rule 404(b). Contrary to Bayfield’s arguments, the Fa lse Deed was evidence of more than a mere propensity to crea te fraudulent documents. Rather, it was probative of Bayfield’s specific knowledge that the Prope rty had been transferred during the period to which the False Deed was backdated, and of Bayfield’s intent ion that he—rather than the straw buyer—would reside at and contro l the Property. The district court correctly determined that Bayfield had put knowledge and intent at issue. While cross-examining a testifyi ng co-conspirator, Bayfield’s counsel elicited testimony that the individuals who submitted a false bank statement would not have required Bayfield’s express permission to do so, and that Bayfield had gone to significant effort to rehabilitate the Propert y. This testimony raised the inferen ce that Bayfield did not actually know of the fraudulent documents submitted to the mo rtgage issuers, and that his interest in the properties was purely legitimate. Th e fact that he had falsified a deed to cement one object of the fraudulent transactions—his conti nued control of the Property following the straw sale—is relevant to the government’s fore closing that line of defense. See United States v. Edwards , 342 F.3d 168, 177 (2d Cir. 2003) (noting that evidence of uncharged acts is admissible when there is a “tangible connection between the acts”). Likewise, we do not find that the risk of unfair prejudice stemming from the False Deed substantially outweighed its probative value. The trial record is replete with evidence that Bayfield5 arranged for his coconspirato rs to create and file numerous fraudulent documents, all in furtherance of a scheme to mislead financial in stitutions and enrich himself. The False Deed evidence was thus probative as to knowledge and, at the same time, unlik ely to “unfairly . . . excite emotions” and prejudice him in the eyes of the jury. See Old Chief v. United States , 519 U.S. 172, 180 (1997). We conclude that the di strict court properly exercised its discretion in admitting this evidence. II. Bayfield’s Sentence At sentencing, when the distri ct court calculated the applicable sentence under the United States Sentencing Guidelines (the “Guidelines”), it included a tw o-point enhancement pursuant to § 3B1.3 of the Guidelines, which pr ovides for such an enhancement if “the defendant . . . used a special skill, in a manner that significantly facilitated the commission or concealment of the offense.” U.S.S.G. § 3B1.3. Then, having determined that the Guidelines range was too low to reflect the seriousness of Bayfield ’s crimes, the district court re calculated his sentence under the “shadow guidelines” promulgate d by the American Bar Associ ation (“ABA”) as “a proposed federal sentencing guideline to ef fectuate” reforms “in the senten cing of federal economic crimes.” See Am. Bar Ass’n, A Report on Behalf of the American Bar A ssociation Criminal Justice Section Task Force on the Reform of Federal Sentencing for Economic Crimes (2014), https://www.americanbar.org/content/dam/aba/publications/criminaljustice/economic_crimes.pdf. Bayfield challenges the pr ocedural reasonableness of the district court’s sentence because, in his view, the “special skill” enhancement is inapplicab le to Bayfield’s schemes, which did not benefit directly from Bayfield’s expertise in short sales. The governme nt does not address this point, but concedes that it was error to include that enha ncement in its Guidelines calculation alongside an equivalent enhancement reflecting Bayfield ’s “aggravating role” in the conspiracy. See United6 States v. Thorn , 317 F.3d 107, 122 (2d Cir. 2003) (“[T]he District Court . . . could not apply [the special skill] enhancement in th is case because it had already applied an aggravating role enhancement under § 3B1.1.”); see also U.S.S.G. § 3B1.3 (“[I]f this ad justment is based solely on the use of a special skill, it may not be em ployed in addition to an adjustment under § 3B1.1 (Aggravating Role).”). “In most cases[,] a defendant who has shown that the distri ct court mistakenly deemed applicable an incorrect, higher Guidelines range has demonstrated a reas onable probability of a different outcome,” and is entitled to resentencing. Molina-Martinez v. United States , 136 S. Ct. 1338, 1346 (2016). But “[t]here may be instances wh en, despite application of an erroneous Guidelines range, a reasonable probability of prejudice does not exist.” Id . In particular, “[t]he record in a case may show . . . that the district court thought the sentence it chose was appropriate irrespective of the Guidelines ra nge,” or a judge’s “detailed explanation . . . could make it clear that the judge based the sentence he or she sel ected on factors independent of the Guidelines.” Id

. at 1346–47; see also United States v. Jass , 569 F.3d 47, 68 (2d Cir. 2009) (“Where we identify procedural error in a sentence, but the record indi cates clearly that the di strict court would have imposed the same sentence in any event, the error may be deemed harmless, avoiding the need to vacate the sentence and to remand the case for resentencing.” (inter nal quotation marks omitted)). That said, where “the record is silent as to what the district court might have done had it considered the correct Guidelines range, the court’s relianc e on an incorrect range in most instances will suffice to show an effect on the defendant’s substantial rights.” Molina-Martinez, 136 S. Ct. at 1347. The government urges us to find this error ha rmless because the district court considered even the erroneously inflated Guidelines sent ence to be too low and consequently based its7 sentence on factors independent of the Guidelines. 2 And we have no doubt th at the district court would have turned to the ABA’s guidelines even if it had calculated the Guidelines sentence correctly. But it is not clear from the record that the district c ourt would have imposed the same sentence under those alternative guidelines had it appreciated the official Guidelines’ limitations on combining enhancements for a defendant’s aggravated role a nd special skills. Indeed, Judge Vitaliano’s primary reason for depa rting from the official Guidelines was that they insufficiently accounted for the victims’ losses in this case. Fr om his discussion, we can assume that when he departed from the rules governing the role of victim s’ losses in determining a Guidelines sentence, that deviation was purposeful. But when he re calculated the appropriate offense level under the ABA guidelines, he raised Bayfield’s offe nse level not only through “Victim Impact” enhancements, but also through “Culpa bility” enhancements that reflected, inter alia , the same real estate skills that could not have contribute d to its calculation of the appropriate Guidelines range. Since the district court’s decision to depart from the Guidelines did not explicitly reflect a policy disagreement with how the Gu idelines treat special skills ( i.e. , by ignoring them when the sentence already imposes an aggravated-role enhan cement), it is impossible for us to say whether Judge Vitaliano would have deferred to these Guid elines rules in determining the sentence had he recognized what those rules were. Since we cannot be certain on the record before us that the district court’s error played no role in the ultimate sentence, we remand with a direction that the district court indicate on the record whether due considerati on of the rules limiting the app licability of “special skill”

2 Furthermore, in selecting an above-Guidelines sentence, the district court may have been comforted by the fact that the sentence provide d by the ABA rubric was not significantly higher than what the district cour t erroneously believed to be the guidelines range.8 enhancement would have made a di fference in the sentence imposed. See generally United States v. Jacobson, 15 F.3d 19 (2d Cir. 1994). If the district c ourt indicates on rema nd that the sentence would have been the same as originally imposed, the procedural error is harmless. But if the district court indicates that it would have imposed a different sentence had it correctly applied U.S.S.G. § 3B1.3, it is directed to vacate the sentence, arra nge for defendant’s appearance, and proceed to resentencing. See United States v. Romeo , 385 Fed. App’x 45, 50–51 (2d Cir. 2010). After the district court has either affirmed that it would have imposed the same sentence were it not for the Guidelines error or vacated its original senten ce and imposed a new one, e ither party may restore jurisdiction to this Court within 30 days of the entr y of a final order by letter to the Clerk’s Office (attaching a copy of the relevant order). In that ev ent, no new notice of appeal or additional filing fee will be required, and a ny reinstated appeal will be assigned to this panel. We have considered Bayfield’s remaining arguments and find them to be without merit. Accordingly, we AFFIRM Bayfield’s conviction and REMAND his sentence for proceedings consistent with this order. FOR THE COURT: Catherine O’Hagan Wolfe, Clerk