Opinion ID: 3090871
Heading Depth: 2
Heading Rank: 8

Heading: Sentencing (Simpson and Shafer)

Text: Both Simpson and Shafer raise multiple challenges to their sentences. In reviewing the sentences, first, we consider whether the district court committed a “significant procedural error,” such as miscalculating the advisory Guidelines range. United States v. Odom, 694 F.3d 544, 547 (5th Cir. 2012). If there is no procedural error or the error is harmless, we proceed to the second step and review the substantive reasonableness of the sentence imposed for an abuse of discretion. Id. We review the district court’s interpretation and application of the Guidelines de novo, and the district court’s factual findings for clear error. Id. at 546-47.
Simpson argues that the sentencing enhancement for perjury was erroneously applied to him. 1 He received a 2-level increase in his offense level for obstruction of justice based on the district court’s finding that he had committed perjury during the trial. U.S.S.G. § 3C1.1 provides that the offense level is increased by two levels if the defendant willfully obstructed justice during the prosecution. The application notes provide that this section applies to perjury. § 3C1.1, cmt. n.4(b). “Though the court may not penalize a defendant for denying his guilt as an exercise of his constitutional rights, a sentence may be enhanced if the defendant commits perjury.” United States v. Como, 53 F.3d 87, 89 (5th Cir. 1995); see also United States v. Dunnigan, 507 U.S. 87, 93-95 (1993). The district court specified the testimony it found to be 1Simpson separately argues that his within-Guidelines sentence of 480 months is substantively unreasonable. In light of our remand of Simpson’s sentence due to reversal of Count Seven, we do not express an opinion on the ultimate reasonableness of Simpson’s sentence. 18 Case: 12-10574 Document: 00512501580 Page: 19 Date Filed: 01/15/2014 No. 12-10574 perjury, and found by a preponderance of the evidence that in each instance: (1) Simpson gave false testimony; (2) under oath at trial; (3) it was material; (4) Simpson did not believe it to be true; and (5) Simpson gave it with willful intent rather than because of mistake or lack of memory. The court found eight instances of perjury. Simpson has not shown that the district court clearly erred in its perjury findings. Simpson argues only that much of the testimony that the court found to be perjury related to testimony about his own motives for taking certain actions, or related to “matters concerning which individual perspective and recollection are bound to vary.” However, the first instance of perjured testimony found by the court was Simpson’s testimony that he did not associate with spammers. This is contradicted by evidence establishing Simpson’s association with Faulkner and UDC, who he knew to facilitate spam, and the assistance he gave Faulkner to ensure that service providers would not receive spam complaints. Further, several of the instances of testimony the court found to be perjury concerned specific actions that Simpson had taken to hide his activity or his characterization of his relationship with Faulkner, a core conspirator, including: that he put the name of his girlfriend’s mother down as an employee on a license application without her knowledge because she would really have been an employee; that he told Bandwidth.com that Aston Technology were Nigerian spammers, when he knew the spam at issue was coming from Faulkner’s impersonation of the company; that he paid Faulkner’s mortgage and employees because he generally owed Faulkner money and thought he would be paid back; that he paid for Faulkner to have a consultation with a lawyer because Faulkner had no money and they were friends, and; that he stayed with Faulkner for a period because he thought he could change Faulkner’s ways and show him that it is more profitable to run a business by 19 Case: 12-10574 Document: 00512501580 Page: 20 Date Filed: 01/15/2014 No. 12-10574 paying vendors. We cannot conclude that the district court erred in finding that this testimony was intentionally deceptive and materially false. In any event, it appears that the two levels added by the perjury enhancement would have made no difference to Simpson’s Guidelines range. Simpson’s offense level was calculated at 45. Any offense level higher than 43 is treated as an offense level of 43. If there were no perjury enhancement, the offense level would have been 43. Standing alone—and Simpson does not challenge any other enhancements applied to him—the perjury enhancement did not affect his offense level or Guidelines range. 2
Shafer makes several arguments concerning procedural aspects of his sentence. First, he argues that the district court clearly erred in determining the loss amount attributable to him. He also contends that the district court erred in calculating the number of companies that were victims of his conduct. He alternatively argues that if the district court did not factually err in determining the loss amount, it erred by using the preponderance of the evidence standard as opposed to a higher clear and convincing evidence standard. Lastly, he argues that the court should not have given him two criminal history points for committing the offense while on probation. 2 Simpson also argues that the perjury enhancement somehow proves that his right to a speedy trial was violated. He seems to be arguing that because the trial took a long time, due to the number of defendants and companies, and involved a substantial amount of discovery and evidence, he cannot have been expected to have an accurate memory of events or to accurately testify to certain details. However, the district court expressly found that the instances of perjury were material misrepresentations, not mere inconsistences. Simpson also claims that the fact that the judge ordered pre-trial detention shows that the judge pre- judged his guilt. Simpson has not shown that the district judge was biased or pre-judged him. 20 Case: 12-10574 Document: 00512501580 Page: 21 Date Filed: 01/15/2014 No. 12-10574
Shafer contends that the loss amount attributed to him at sentencing pursuant to U.S.S.G. § 2B1.1(b)(1) was too high. We review the amount of loss, a factual finding, for clear error. See United States v. Jones, 475 F.3d 701, 705 (5th Cir. 2007). Findings of fact for sentencing purposes need only be found by a preponderance of the evidence. See United States v. Harper, 448 F.3d 732, 734 (5th Cir. 2006). The finding must be plausible in light of the record as a whole. Jones, 475 F.3d at 705. The general rule is that the loss amount is the greater of actual or intended loss. U.S.S.G. § 2B1.1(b)(1) & cmt. n.3(A). Actual loss is the “reasonably foreseeable pecuniary harm that resulted from the offense.” Id. Intended loss is “the pecuniary harm that was intended to result, even if it was impossible or unlikely to occur.” Id. The district court “need only make a reasonable estimate of the loss.” Id. cmt. n.3(C). In the Fifth Circuit, the district court is entitled to rely upon the information in the pre-sentence report (PSR) in making factual determinations at sentencing, as long as the information bears some indicia of reliability. United States v. Scher, 601 F.3d 408, 413 (5th Cir. 2010). If challenging the PSR, the defendant bears the burden of presenting rebuttal evidence to demonstrate that the information in the PSR is inaccurate or materially untrue. Id. Before sentencing Simpson and Shafer, the district court conducted an evidentiary hearing to determine the loss amount attributable to each convicted defendant. At the hearing, the district court granted several of Shafer’s objections to the loss calculation. It agreed that Shafer would not be held responsible for losses that occurred before he had joined the conspiracy, and excluded several loss amounts because the information supporting the claimed loss amount lacked sufficient indicia of reliability. The district court rejected Shafer’s other objections, finding that the challenged losses were based on sufficiently reliable information and were reasonably foreseeable to 21 Case: 12-10574 Document: 00512501580 Page: 22 Date Filed: 01/15/2014 No. 12-10574 Shafer. The total loss attributed to Shafer at sentencing, including the amounts that Shafer does not challenge on appeal, was over $3.2 million. On appeal, Shafer asserts that the loss figures for several victim companies are unreliable because they were provided without sufficient detail, such that it cannot be determined if the loss occurred after he joined the conspiracy. He points to case law providing that “[b]ald, conclusory statements do not acquire the patina of reliability by mere inclusion in the PSR.” United States v. Elwood, 999 F.2d 814, 817-18 (5th Cir. 1993). Here, however, the district court did not accept the statements in the PSR as the loss amount. The court conducted a separate evidentiary hearing on that issue, where the case agent testified about the instructions given to the victim companies, the losses the companies identified, and the supporting documentation provided by the companies. The agent was also cross-examined by Simpson’s and Shafer’s attorneys. The district court considered all this evidence before making its findings regarding the loss amounts. Shafer’s speculative assertions that some of the loss amounts might have occurred before he joined the conspiracy are insufficient to meet his burden or to show that the district court clearly erred, particularly given the district court’s detailed consideration of the loss calculation. Further, even if all of Shafer’s objections are valid, except for the objection to XO Communications, the error would have been harmless because the offense level would not have changed. A loss of approximately $3,200,000 was attributed to Shafer after the evidentiary hearing; he would have to reduce that amount to less than $2.5 million for his offense level to be reduced. See U.S.S.G. § 2B1.1(b)(1)(I), (J). Only the loss to XO Communications is large enough to affect the offense level. Shafer contends, as he did at the evidentiary hearing, that the XO Communications loss of $1,303,439.51 should not be attributed to him because it is not clear when it occurred, and thus it might 22 Case: 12-10574 Document: 00512501580 Page: 23 Date Filed: 01/15/2014 No. 12-10574 have occurred before he joined the conspiracy. The agent testified at the evidentiary hearing that this portion of XO Communications’ losses related to services XO had provided to two companies operated by the co-conspirators, A&B Communications and Incavox. XO’s representative at trial testified that the losses from A&B, which amounted to nearly $270,000, were billed by March 2009. XO’s representative testified that the Incavox losses on two separate accounts, one with a loss around $237,000 and one with a loss of nearly $800,000, were billed by March or April of 2009. Shafer, pretending to be someone else, signed the XO contract for Incavox in February 2009. Shafer joined the conspiracy in October 2008. Though on appeal Shafer questions the bases of these losses, he does not point to any countervailing evidence showing that XO Communications did not suffer those losses. The district court’s findings that these losses occurred after Shafer joined the conspiracy and were reasonably foreseeable to him are not clearly erroneous. Shafer also objects to certain losses on the basis that they are excluded by U.S.S.G. § 2B1.1(b)(1) cmt. n.3(d), which provides that “Loss shall not include. . . . interest of any kind, finance charges, late fees, penalties, amounts based on an agreed upon return or rate of return or other similar costs.” AT&T described some portion of its loss as “regulatory/other fees,” and CBeyond described some portion of its losses as “service charges and taxes.” Shafer asserts that these losses fall within the text of the exclusionary language. However, the district court reasoned that the exclusion applies to types of charges that the companies did not actually lose out-of-pocket; for example, late fees that it would have been paid if the clients had paid their bills, as opposed to the billed amount itself. The court specifically inquired into the bases of the challenged amounts and found that Shafer could not show that the losses fell within the exception or that companies did not actually incur those 23 Case: 12-10574 Document: 00512501580 Page: 24 Date Filed: 01/15/2014 No. 12-10574 amounts as losses. We find no basis in the record to conclude that the district court clearly erred. Shafer also objects to the inclusion of losses that occurred after Faulkner fled the U.S. to Mexico in early 2009, claiming that he was no longer involved in any jointly undertaken criminal activity. Shafer may be correct that he did not take any additional steps to advance the conspiracy, but there is no evidence that he attempted to withdraw from it. See United States v. Torres, 114 F.3d 520, 525 (5th Cir. 1997). Mere cessation of activity does not constitute withdrawal from a conspiracy. See id. Further, Shafer continued to communicate with Faulkner, including asking that Faulkner pay him for past work, and there was evidence presented at the sentencing hearing indicating that Shafer was aware that Faulkner was continuing his activities. In these circumstances, the district court’s findings that the continued losses were the result of the jointly undertaken activity and were foreseeable to Shafer are not clearly erroneous. In sum, after reviewing the record, we find no basis on which to conclude that the district court clearly erred in calculating the loss amounts attributable to Shafer. 3
Shafer next argues that where the loss calculation increased his Guidelines range from 8-14 months to 97-121 months, due process requires a higher burden of proof. The Fifth Circuit has acknowledged that in some circumstances, proof of sentencing facts by clear and convincing evidence may 3 Shafer also argues that the district court’s finding that he defrauded ten or more victims is erroneous. See U.S.S.G. § 2B1.1(b)(2)(A)(i). He admits that this assertion of error is only applicable if we find that district court erred in calculating the loss amount. We find no error in the loss calculation, and thus no error in the calculation of the number of victims. 24 Case: 12-10574 Document: 00512501580 Page: 25 Date Filed: 01/15/2014 No. 12-10574 be required. See United States v. Mergerson, 4 F.3d 337, 343-44 (5th Cir. 1993). Though we have continued to leave this door open, we have never actually required a heightened burden for factual determinations at sentencing. See United States v. Brooks, 681 F.3d 678, 712-13 (5th Cir. 2012). Recently, we held that an enhancement that increased the sentencing range from 18-14 months to 168-210 months did not require proof by clear and convincing evidence. Id. at 713. Thus, the loss enhancement, which increased Shafer’s sentencing range from 8-14 months to 97-121 months, likewise did not require a heightened evidentiary burden.
Shafer’s last argument is that the district court erred by applying two criminal history points because Shafer was on probation at the time of the offense. U.S.S.G. § 4A1.1(d). Shafer was found guilty by a jury on June 30, 2006 of misdemeanor assault. He received a two-year probated jail sentence that was stayed pending appeal. His conviction was affirmed on appeal, and he started serving the probated sentence on October 30, 2008. During sentencing, the district court added two points to his criminal history score because he committed the instant offense from October 2008 to his arrest in 2009, while serving probation for the assault conviction. See U.S.S.G. § 4A1.1(d). Shafer argues that § 4A1.2(l) provides that a sentence that is stayed pending appeal shall be counted in the criminal history as if it had not been stayed, which means that for purposes of the Guidelines calculation, his probationary period started to run on June 30, 2006, as if it had not been stayed, and expired by the time he committed the instant offense. Shafer’s interpretation of the Guidelines is directly contradicted by the text of § 4A1.1(d). § 4A1.1(d) provides that two points are added “if the defendant committed the instant offense while under any criminal justice sentence, including probation. . . . ” Shafer did not begin serving his probation 25 Case: 12-10574 Document: 00512501580 Page: 26 Date Filed: 01/15/2014 No. 12-10574 until October 2008, and was thus actually serving a sentence of probation at the time he committed the instant offense. This situation falls squarely within the text of § 4A1.1(d). We find no error.