Source: http://openjurist.org/286/f3d/1291/united-states-v-morris
Timestamp: 2013-12-12 03:16:33
Document Index: 548779340

Matched Legal Cases: ['§ 371', '§ 3', 'in fine', '§ 3', '§ 3', '§ 3', '§ 3', '§ 3', '§ 3', 'art, 273', '§ 3']

286 F3d 1291 United States v. Morris | OpenJurist
286 F. 3d 1291 - United States v. Morris	Home286 f3d 1291 united states v. morris
286 F3d 1291 United States v. Morris 286 F.3d 1291
UNITED STATES of America, Plaintiff-Appellee,v.James Charles MORRIS, Defendant-Appellant.
No. 01-10955.
Craig L. Crawford (Court-Appointed), Orlando, FL, for Defendant-Appellant.
Terry Flynn, Tallahassee, FL, R. Jerome Sanford, Gainesville, FL, Pamela A. Moine, Pensacola, FL, for Plaintiff-Appellee.
Defendant-appellant James Charles Morris appeals from the sentence imposed by the district court after he pleaded guilty to conspiracy to defraud and conspiracy to launder money. In addition to concurrent 97 month terms of imprisonment, Morris faces a three year term of supervised release and was ordered to pay $419,125 in restitution. On appeal, Morris alleges that the district court erred in ordering restitution when it failed to advise Morris of the possibility of an order of restitution before accepting his guilty plea. Morris also contends that the district court erred in imposing a sentence enhancement for abuse of a position of trust.
Morris and four others were indicted and charged with various counts stemming from investment fraud. In the scheme, Morris's co-conspirators obtained investors' funds by falsely representing the investments as legitimate high-yield opportunities. The co-conspirators then would use bank wire transfers to send funds to other persons and entities, including Morris, thus concealing the money trail and promoting the investment fraud.
Pursuant to a written plea agreement, Morris pleaded guilty to conspiracy to defraud and conspiracy to launder money, in violation of 18 U.S.C. §§ 371 and 1956(h). The agreement and the plea colloquy informed Morris that he could face the following fines: (1) for conspiracy to defraud, a maximum fine of $250,000 and (2) for conspiracy to launder money, a maximum fine of the greater of $500,000 or twice the value of the transaction. Neither the plea colloquy nor the plea agreement alerted Morris to the fact that he could be sentenced to pay restitution.
The presentence report recommended that Morris receive a two-level enhancement for abuse of a position of trust under U.S.S.G. § 3B1.3. Morris objected to the enhancement, arguing that he did not hold a special position of trust as envisioned by the Guidelines. The government responded that the enhancement was appropriate because Morris had used his attorney trust account to funnel the money in promotion of the fraudulent scheme and the other conspirators had informed the victims that Morris was a trader and an attorney. The court overruled Morris's objection, but did grant a three-level reduction for acceptance of responsibility, which resulted in a base offense level of 28. This adjusted offense level and a criminal history category I led to a Guidelines range of 78 to 97 months. The court sentenced Morris to 97 months imprisonment to be followed by a three-year term of supervised release, and ordered Morris to pay $419,125 in restitution to sixteen victims, jointly and severally with his four co-defendants. Morris did not object at sentencing to the court order to pay restitution. This appeal follows.
A. Rule 11 and Restitution
Morris asserts that the district court violated Federal Rule of Criminal Procedure 11 by ordering restitution where it failed to advise him, before he pleaded guilty, of the possibility that such an order might be issued. This court reviews the issue of a Rule 11 violation for plain error when it was not raised before the district court. See United States v. James, 210 F.3d 1342, 1343 (11th Cir. 2000). Morris must show that there is (1) "error," (2) that is "plain," and (3) that "affect[s] substantial rights." See United States v. Olano, 507 U.S. 725, 732-34, 113 S.Ct. 1770, 123 L.Ed.2d 508 (1993). "If all three conditions are met, an appellate court may then exercise its discretion to notice a forfeited error, but only if (4) the error `seriously affect[s] the fairness, integrity, or public reputation of judicial proceedings.'" Johnson v. United States, 520 U.S. 461, 467, 117 S.Ct. 1544, 137 L.Ed.2d 718 (1997) (quoting Olano, 507 U.S. at 732, 113 S.Ct. 1770) (other internal quotation marks omitted).
The government concedes that Morris was not made aware of the possibility of an order of restitution at either the plea hearing or in the plea agreement.1 Rule 11(c) provides:
Advice to the defendant. Before accepting a plea of guilty or nolo contendere, the court must address the defendant personally in open court and inform the defendant of, and determine that the defendant understands, the following:
Fed.R.Crim.P. 11(c). Because the court erred by failing to inform Morris of the possibility of restitution, the next issue is whether or not this error affected his substantial rights. See Fed.R.Crim.P. 11(h) ("Any variance from the procedures required by this rule which does not affect substantial rights shall be disregarded."). "We have identified three core objectives of Rule 11: (1) ensuring that the guilty plea is free of coercion; (2) ensuring that the defendant understands the nature of the charges against him; and (3) ensuring that the defendant is aware of the direct consequences of the guilty plea." United States v. Quinones, 97 F.3d 473, 475 (11th Cir.1996). "Failure to satisfy any of the core objectives violates the defendant's substantial rights." Id.
Morris argues that by omitting the possibility of an order of restitution, the court failed to satisfy the concerns of Rule 11 and violated his substantial rights. Both the plea agreement and the plea colloquy, however, informed Morris that he faced a maximum fine of $250,000 on the conspiracy to defraud count and a fine on the conspiracy to launder money count of the greater of $500,000 or twice the value of the transaction. Because Morris faces a restitution order that is below the amount he was informed he could face in fines, the government contends that the his substantial rights were not impaired.
This is a question of first impression for this court. In United States v. McCarty, 99 F.3d 383 (11th Cir.1996), we concluded that a defendant's substantial rights were not affected when a district court failed to mention specifically the possibility of restitution but the defendant had been fully advised of his obligation to make restitution in the plea agreement. See id. at 386-87. Morris, however, was not made aware of the possibility of restitution in either the plea agreement or the plea hearing.
Although Federal Rule of Criminal Procedure 11(c) requires the district court to explain a defendant's liability for both fines and restitution, we hold that failure to do so does not impact a defendant's substantial rights where he was warned of a potential fine larger than the actual amount of restitution ordered. Here, the restitution order was considerably less than the fine Morris was warned of at the time of his guilty plea. In a case that involved an earlier version of Rule 11, the Supreme Court stated that "matters of reality, and not mere ritual, should be controlling." McCarthy v. United States, 394 U.S. 459, 467-68 n. 20, 89 S.Ct. 1166, 22 L.Ed.2d 418 (1969) (citation omitted). We agree with the holding of seven of the eight circuits to have ruled on this question that a defendant "is not prejudiced so long as his liability does not exceed the maximum amount that the court informed him could be imposed as a fine. It is the amount of liability, rather than the label `restitution,' that affects [a defendant's] substantial rights." United States v. Glinsey, 209 F.3d 386, 395 (5th Cir.2000).2 Accordingly, we conclude that the district court's failure to mention the possibility of restitution was not plain error.
B. Enhancement for Abuse of a Position of Trust
Morris also contends that the district court erred in enhancing his sentence pursuant to U.S.S.G. § 3B1.3 for abuse of a position of trust. The Sentencing Guidelines require a two-level increase of a defendant's base offense level "[i]f the defendant abused a position of public or private trust, or used a special skill, in a manner that significantly facilitated the commission or concealment of the offense." U.S. Sentencing Guidelines Manual § 3B1.3 (2001). "For the adjustment to apply, the government must establish both elements: (1) that the defendant held a place of public or private trust; and (2) that the defendant abused that position in a way that significantly facilitated the commission or concealment of the offense." United States v. Ward, 222 F.3d 909, 911 (11th Cir.2000). "We review the district court's fact findings for clear error, but its determination whether the facts justify an abuse-of-trust enhancement we review de novo." Id. (quoting United States v. Mills, 138 F.3d 928, 941 (11th Cir.1998)).
Morris claims that, because he did not occupy a position of public or private trust, the enhancement was erroneous. Morris was represented to the victims by his co-conspirators as a professional trader and a licensed attorney, both of which the government claims are positions of public trust. The government further contends that Morris "abused those positions when he convinced the victims of the fraud to invest or continue in their investments and by using his attorney trust account to receive, launder and transfer monies," thereby significantly facilitating the commission of the crime.
This argument is insufficient to merit the enhancement. The government states that the enhancement was appropriate because Morris was "represented" and "described" as an attorney and trader, and points to our statement that the "determination of whether a defendant occupied a position of trust that would warrant this enhancement is assessed from the perspective of the victim of the crime." United States v. Garrison, 133 F.3d 831, 837 (11th Cir.1998). Because the co-conspirators represented Morris as an attorney and trader, the government asserts that he occupied a position of trust from the victims' perspective.
The government's argument misreads the Sentencing Guidelines. Under the government's view of § 3B1.3, Morris would face a two-level enhancement to his sentence because of the representations of others. However, "the structure of the sentencing guidelines compels the conclusion that the abuse of trust enhancement must be based on an individualized determination of each defendant's culpability." United States v. Moore, 29 F.3d 175, 179 (4th Cir.1994). The provisions of Part B of Chapter Three of the Sentencing Guidelines, "Role in the Offense," provide for "adjustments to the offense level based upon the role the defendant played in committing the offense." U.S.S.G. ch. 3, pt. B, introductory cmt. (2001). "By their very nature, the role in the offense adjustments cannot be based upon the actions of co-conspirators." Moore, 29 F.3d at 179. Here, the government contends that the co-conspirators represented Morris to be a trader and attorney. The language and structure of the Guidelines prevents application of the § 3B1.3 enhancement to Morris based upon the representation of others.3
Both the Government's statement of facts presented at the plea colloquy4 and the probation officer's presentence report reveal evidence that the government could have presented to bolster its argument for the § 3B1.3 enhancement.5 This is especially true given that this case involved a guilty plea and therefore the record is quite limited. According to the statement of facts, Morris portrayed himself as a trader who had conducted successful multi-million dollar international bank trades in the past.6 The statement further relates that, after the initial investments, investors "contacted and maintained contact" with Morris directly. Furthermore, Morris and two other co-conspirators allegedly called a victim numerous times and advised, "The money is on the way." The probation office conducted follow-up telephone calls to victims and reported the results in an addendum to the presentence report.7 One victim stated that after her initial investment, she "later spoke directly with the defendant who confirmed he was a practicing attorney." A second victim interviewed related that he was "introduced to the defendant through co-defendant Brown, who identified the defendant as being an attorney and the investor or `trader.'" Morris identified himself to a third victim as the trader and "indicated he was going to get him a big return on his investment."
"Determining what constitutes a position of trust for the purposes of § 3B1.3 is not a simple task." United States v. Iannone, 184 F.3d 214, 222 (3d Cir.1999). In addition to the Guidelines' lack of a clear definition of what constitutes a position of trust, see id.; United States v. Mullens, 65 F.3d 1560, 1566 (11th Cir.1995), the determination of whether to apply the enhancement is highly dependent on the specific facts in each situation. See United States v. Hart, 273 F.3d 363, 375 (3d Cir.2001). Although the facts here make the question of the applicability of § 3B1.3 difficult, we conclude that, based upon Eleventh Circuit precedent, the evidence is not enough to justify the enhancement in this case. There is no doubt that the statements attributed to Morris were integral to the fraud itself, but that is insufficient to justify the enhancement. See Mullens, 65 F.3d at 1567 ("Often there is a component of misplaced trust inherent in the concept of fraud."); United States v. Koehn, 74 F.3d 199, 201 (10th Cir.1996) ("In every successful fraud the defendant will have created confidence and trust in the victim, but the sentencing enhancement is not intended to apply in every case of fraud."). Morris may have abused the trust of the victims, but that is not the inquiry here. The initial question is whether or not Morris occupied a position of trust. See Mullens, 65 F.3d at 1567 ("One must hold a position of trust before it can be abused, however.").
Morris's status as an attorney (in a