Opinion ID: 723742
Heading Depth: 2
Heading Rank: 2

Heading: Enhancements and Departures

Text: 28 Googel's principal argument on appeal is that the district court's reasons for imposing the obstruction enhancement were insufficient. He contends that the sentencing court erred in finding a willful attempt to obstruct justice and that, in any event, there is no evidence that the conduct at issue obstructed the prosecution of the conviction offenses as required under U.S.S.G. § 3C1.1. We disagree. 29 The obstruction of justice enhancement was based on Googel's involvement with the generation of cash, which permitted former Colonial salesman and cooperating Government witness James Cahill to bribe the Mayor of Waterbury and its Corporation Counsel. Specifically, the district court focused its attention on a December 1990 telephone call made by Googel to Cahill, finding that Googel's efforts [in communicating with Cahill] to focus the investigation on the actual physical passing of the cash ... constituted an effort by [him] to obstruct the investigation of payoffs by Colonial Realty and that in attempt[ing] to set up a meeting with Cahill.... [Googel] acted with a specific intent to obstruct justice and that [he] consciously acted with the purpose of obstructing justice. The district court based this adjustment on Googel's telephone conversation with Cahill and made the following findings of fact: 30 In December 1990, James Cahill received a telephone call from you during which conversation you indicated that you wished to get together with Mr. Cahill to confirm that you never gave Cahill any cash. I also find that on or about December 20, 1990, in a telephone call to Mr. Cahill initiated by Ken Zak [ ], a Colonial salesman, you requested a meeting with Mr. Cahill. Cahill initially agreed and suggested that he would meet you here in Waterbury. You told Cahill that you did not believe that meeting in Waterbury would be a good idea and so you and Cahill agreed on a location named the Long Wharf in New Haven. After speaking with you, Cahill called his attorney, who counseled against this meeting. Cahill immediately called you back and told you that based on his attorney's advice, he could not meet with you. You, sir, apparently switched phones, and I find by a preponderance of the evidence that you did, and stated to Cahill that you wanted to ask one thing, that being confirmation that you had never given Cahill any cash. Cahill at that point asked you what you were talking about and you repeated the question. 31 Section 3C1.1 provides for a two-level enhancement [i]f the defendant willfully obstructed or impeded, or attempted to obstruct or impede, the administration of justice during the investigation, prosecution, or sentencing of a given offense. Under this section, a defendant's statement must be evaluated in the light most favorable to the defendant and can be used to enhance his sentence only if the statement unambiguously demonstrates an obstructive intent. U.S.S.G. § 3C1.1, application note 1; see United States v. Johns, 27 F.3d 31, 34-35 (2d Cir.1994). In considering whether a defendant acted with obstructive intent, a district court may properly draw all reasonable inferences both from the words used and from the relevant circumstances. United States v. Shoulberg, 895 F.2d 882, 885 (2d Cir.1990). Circumstantial evidence is a sufficient basis on which the district court may impose an obstruction of justice enhancement under § 3C1.1. See United States v. Onumonu, 999 F.2d 43, 47 (2d Cir.1993). 32 We review for clear error the determination as to what the defendant meant by his words, and how a listener would reasonably interpret those words. Shoulberg, 895 F.2d at 884. Whether the facts on which the sentencing court relied constitute obstruction of justice under § 3C1.1 is a question of law subject to de novo review. Johns, 27 F.3d at 34; Onumonu, 999 F.2d at 45. Because we find that the district court's inference that Googel willfully attempted to obstruct justice is a reasonable one, supported by the evidence in context, we do not disturb it on appeal. However, that does not end the inquiry, because to trigger the application of the obstruction enhancement pursuant to U.S.S.G. § 3C1.1 the obstruction must be tied to a count of conviction. United States v. Perdomo, 927 F.2d 111, 118 (2d Cir.1991). 33 Googel contends that the district court erred in enhancing his sentence for obstruction of justice because the conduct relied upon did not affect the investigation of the offenses of conviction. Googel argues that the obstruction of justice enhancement may not be tied to the straw investor fraud counts (Counts One through Three) both because those counts are unrelated either to Cahill or to the Waterbury payoffs and because the government's investigation of the straw investor scheme had not even begun at the time of the Googel-Cahill telephone conversation in December 1990. 34 The government in fact has conceded that the Waterbury payoffs arose in the context of various Colonial limited partnerships separate from those involved in the fraud counts and that the government's investigation of this conduct began after the Googel-Cahill telephone conversation. For this reason, we agree with Googel that Googel's conduct in paying off the Mayor of Waterbury could not have obstructed the investigation of the fraud counts, and we therefore reverse the two-level enhancement for obstruction of justice with respect to Counts One through Three. 35 The government argues, however, that Googel's fourth count of conviction is not time limited because it charges him with an ongoing pattern of conduct that impeded the functions of the IRS through September 1990, the time of the bankruptcy. Moreover, in addressing an upward departure, the district court expressly found that the payment made to Mayor Santopietro and Corporation Counsel Donnarumma in connection with the City of Waterbury's investment of pension funds in Colonial was related to count four, the tax count, ... because the payoff to Santopietro and Donnarumma, like count four, involved the payment in cash of finders fees. Additionally, in its response to the second notice, the government stated: Mr. Googel's fourth count of conviction involves his participation in a process whereby the IRS was impeded in the collection of tax revenues through the payment of cash finders' fees. The money used to pay the former Mayor was paid through this same process. Therefore it is plain to us that Googel's call to Cahill, designed to turn investigators' attention away from Googel and toward the physical transfer of cash, supports the enhancement for obstruction of justice.
36 Sisti challenges nearly every aspect of his sentence. He argues that the sentencing court erred in 1) imposing a seven-level upward departure, 2) imposing enhancements, and 3) finding two groups of criminal conduct instead of only one. 37 In upwardly departing seven levels, the sentencing court cited a number of reasons, stating that each ground was individually sufficient. Sisti argues that none of the grounds cited by the court justifies the upward departure. 38 Sisti contends generally that the conduct relied upon by the district court to support the departure is not sufficiently related to his offenses of conviction. An upward departure under U.S.S.G. § 5K2.0 is permitted for misconduct not leading to conviction if the defendant committed acts  'relate[d] in some way to the offense of conviction, even though not technically covered by the definition of relevant conduct.'  United States v. Uccio, 917 F.2d 80, 86 (2d Cir.1990) (quoting United States v. Kim, 896 F.2d 678, 684 (2d Cir.1990) (alteration in Uccio )). In departing under § 5K2.0, the sentencing court must support the departure with findings of fact and explain how it determined the departure's magnitude. United States v. Tropiano, 50 F.3d 157, 164 (2d Cir.1995). 39 The first ground cited by the district court was Sisti's Waterbury bribe conduct. Specifically, the sentencing court found that Sisti's involvement with the cash payoffs made to Donnarumma and Santopietro to facilitate the City of Waterbury's pension fund investments in Colonial was related to Sisti's fourth count of conviction, which charged restructuring, on the ground that the payoffs to Santopietro and Donnarumma were made with cash generated by structured transactions. We agree that the harm identified by the district court in this instance was related to the structuring conviction. 40 After finding as a factual matter that the payoff did occur, the district court stated: 41 ... I find by a preponderance of the evidence that you were aware of and participated in this transaction and the method by which it was carried out. This in turn, Mr. Sisti, directly connects you to the generation of the money that was used for the payment of the illegal bribe, which led to the failed investment of the Waterbury Pension Fund. I find that this is related misconduct which led directly to the improper investment of the pension fund and its ultimate failure, which had a devastating effect on those people who did not assume the risk that their pension contributions would be invested in an investment vehicle as risky as those were. 42 In reaching this conclusion, Mr. Sisti, I find that the payoff of which you were a part and the resultant risky investment of the pension is an aggravating circumstance that the Sentencing Commission did not adequately, and I stress the word adequately, consider in formulating the guidelines. Further, I find that the resultant effect of this payoff and failed investment had on innocent investors existed to a degree not adequately considered by the Sentencing Commission in formulating the guidelines. Accordingly, I am departing upward on this ground. 43 We review de novo whether this factor, the extent of the harm resulting from the illegal use of the funds, was adequately considered by the Sentencing Commission. See United States v. Williams, 37 F.3d 82, 85 (2d Cir.1994). Although U.S.S.G. § 2S1.3(b) creates a two-level sentence enhancement for the illegal use of structured funds, a departure may still be warranted if the court determines that, in light of unusual circumstances, the guidelines level attached to that factor is inadequate. U.S.S.G. § 5K2.0. Application note 10 of U.S.S.G. § 2F1.1 specifically acknowledges that an upward departure may be warranted where the loss determined under [section 2F1.1(b)(1) ] does not fully capture the harmfulness and seriousness of the conduct. See United States v. Kaye, 23 F.3d 50, 53-54 (2d Cir.1994); United States v. Stouffer, 986 F.2d 916, 928 & n. 16 (5th Cir.) (investors' loss of life savings not fully considered by dollar loss gradation of § 2F1.1), cert. denied, 510 U.S. 837, 919, 114 S.Ct. 115, 314, 126 L.Ed. 80, 261 (1993). In this case, we find that the degree of harm flowing from the illegal use of the structured funds--a devastating harm to shareholders of the pension fund--so far exceeded that anticipated by the Commission for that offense that an upward departure was appropriate. 44 Sisti also challenges the extent of the departure as unreasonable. In departing upward, a district court must explain the extent of its departure in light of its factual findings. See Tropiano, 50 F.3d at 164; United States v. Thomas, 6 F.3d 960, 964-65 (2d Cir.1993). In this case, the sentencing court stated: 45 In accordance with the law of this circuit, I will explain how I determined the extent of the departure. This is not an exact science. To determine that extent of the departure I consulted the case law and the guidelines. I also referred to the fraud table in Section 2F1.1 for guidance, keeping in mind the multi-count analysis suggested by United States v. Alter, 985 F.2d (2d Cir.1993), and the considerations of United States v. Tropiano, 50 F.3d (2d Cir.1995), as well as the amount of the loss occasioned by your activities in attracting the investors when you knew Colonial was failing, in using illegal means to obtain pension fund investments, and in your misuse of funds through structured transactions. 46 In Williams v. United States, 503 U.S. 193, 194, 112 S.Ct. 1112, 1116, 117 L.Ed.2d 341 (1992), the Supreme Court stated that once the reviewing court has determined that the sentencing court properly decided to depart upward, the court of appeals may affirm the sentence as long as it is also satisfied that the departure is reasonable under [18 U.S.C.] § 3742(f)(2). To that end, we should consider the amount and extent of the departure in light of the grounds for departing. Id. We have little difficulty in concluding that the bribery of high public officials to induce the investment of municipal pension funds into the defendants' fraudulent enterprise satisfies the reasonableness test for a seven-level departure. In our view, the reasons given by the district court are sufficient to justify the extent of the departure. 47 In conclusion, because we find that the defendant's conduct in connection with the Waterbury bribes, standing alone, was sufficiently related to the structuring conviction and the extent of the departure based on the bribes was reasonable, we have no need to review the other grounds separately cited by the sentencing court in support of the departure. See United States v. Leonard, 67 F.3d 460, 461 (2d Cir.1995) (per curiam). 48 We have considered Sisti's remaining contentions, find them to be without merit, and dispose of them in a summary order filed simultaneously with this opinion.