Opinion ID: 2996020
Heading Depth: 3
Heading Rank: 1

Heading: Grouping as to Chavin

Text: Chavin challenges the district court’s refusal to group the tax and bankruptcy counts together as closely related under § 3D1.2(d) of the sentencing guidelines. Had the district court grouped these counts, Chavin would have received a lower sentence. Guideline § 3D1.2 provides: All counts involving substantially the same harm shall be grouped together into a single Group. Counts involve substantially the same harm within the meaning of this rule: ... (d) When the offense level is determined largely on the basis of the total amount of harm or loss, the quantity of a substance involved, or some other measure of aggregate harm, or if the offense behavior is ongoing or continuous in nature and the offense guideline is written to cover such behavior. Offenses covered by the following guidelines are to be grouped under this subsection: [Several guideline provisions then are listed, including § 2F1.1 and § 2T1.1, the offenses for which Chavin was convicted.] U.S. Sentencing Guidelines Manual (“U.S.S.G.”) § 3D1.2 (2000). Chavin first contends that since he was convicted of offenses listed in the “to be grouped” category the district court had no choice but to group the offenses because listed offenses must be grouped automatically. Because such a conclusion flies in the face of the overriding purpose of § 3D1.2, we disagree, and as we note below, we are not alone in this determination. See, e.g., United States v. Williams, 154 F.3d 655, 657 (6th Cir. 1998) (“The bulk of the courts to have considered the proper construction of 12 Nos. 01-2302 & 01-3414 subsection (d) have concluded that there is no automatic grouping of counts simply because those counts are on the ‘are to be grouped’ list.”). In United States v. Wilson, we noted that the primary goal of § 3D1.2 “is to combine offenses involving closely related counts.” 98 F.3d 281, 282 (7th Cir. 1996) (quotations omitted). In cases, like this one, where two different offense guidelines are at issue, automatic grouping would often lead to the grouping of entirely unrelated counts. See United States v. Harper, 972 F.2d 321, 322 (11th Cir. 1992) (“In some circumstances, automatic grouping detracts from the main purpose of section 3D1.2: to combine offenses involving closely related counts.”). In light of the purpose of § 3D1.2, we seriously doubt that its drafters would have desired such an outcome. In fact, the commentary to § 3D1.2 makes it clear that they did not: “[c]ounts involving offenses to which different offense guidelines apply are grouped together under subsection (d) if the offenses are of the same general type and otherwise meet the criteria for grouping under this subsection.” U.S.S.G. § 3D1.2 cmt. n.6 (emphasis added). Consequently, at least in cases where different offense guidelines apply—as is the case here, where the offenses are under § 2F1.1 and § 2T1.1— grouping is not automatic; rather the sentencing court is required to make an additional inquiry into whether the offenses are “of the same general type.” In support of his argument for automatic grouping, Chavin points to cases in the Second and Ninth Circuits that hold that grouping is required when offenses are listed on subsection (d)’s “to be grouped” list. We see an important distinction, however, between those cases and the case before us. In both of those cases, the defendants sought to have charges grouped that were covered by the same offense guideline. United States v. Gelzer, 50 F.3d 1133, 1144-45 (2d Cir. 1995) (counts that the court held were reNos. 01-2302 & 01-3414 13 quired to be grouped were possession of a firearm with an obliterated serial number and possession of a firearm by a felon, both offenses to which § 2K2.1 applied); United States v. Buenrostro-Torres, 24 F.3d 1173, 1176 (9th Cir. 1994) (“If the offenses at issue are covered by one of the listed guidelines we do not analyze the facts of the particular case. Here, the offenses . . . are covered by § 2F1.1.”) (emphasis added). Consequently, the courts in those cases did not need to consider the commentary language about situations where the offenses at issue are covered by different offense guidelines.4 In fact, when the Second Circuit was faced with the issue of whether to group counts that were covered by different guidelines—§ 2F1.1 (fraud) and § 2S1.1 (money laundering), both of which were on the “to be grouped” list—they did not find that automatic grouping was appropriate, stating instead that the two counts “should only be grouped if the counts are also of the same general type.” United States v. Napoli, 179 F.3d 1, 10 (2d Cir. 1999). Ultimately, the court found that the two offenses involved there should not be grouped. Id. at 10-11. Therefore, the Second Circuit clearly does not view that grouping is always automatic simply because the offenses are listed. The Second Circuit is not alone in this finding. At least four other circuits have reached the same conclusion. See Williams, 154 F.3d at 657 (noting that the courts that have considered the proper construction of subsection (d) have held that there is no automatic grouping); United States v. Walker, 112 F.3d 163, 166-67 (4th Cir. 1997) (stating that when considering whether to group mail fraud (§ 2F1.1) and money launder- 4 We should note that we do not today adopt in this circuit the interpretations put forth in the Second and Ninth Circuits that grouping is automatic when the counts involved are covered by the same offense guideline. We simply note that Chavin’s case is distinguishable from those decisions on that basis. 14 Nos. 01-2302 & 01-3414 ing (§ 2S1.1) “[s]ubsection (d) expressly permits the grouping of offenses under the fraud and money laundering guidelines, but any grouped offenses must be ‘closely related’ ”); United States v. Seligsohn, 981 F.2d 1418, 1425 (3d Cir. 1992) (“[A]lthough all of the counts are listed in subsection (d) as appropriate for grouping, that inclusion does not mean that the counts must be grouped. Counts must be of the ‘same general type’ before grouping is appropriate.”) (citations omitted); United States v. Harper, 972 F.2d 321, 322 (11th Cir. 1992) (“[G]rouping is not automatic, even if all offenses in question are encompassed within this [‘to be grouped’] category.”). We join these circuits in finding that grouping under subsection (d) is not automatic simply because the offenses at issue are listed on the “to be grouped” list. Although we reject automatic grouping, the counts in Chavin’s case could still be grouped if the offenses are “of the same general type and otherwise meet the criteria for grouping under . . . subsection [(d)].” U.S.S.G. § 3D1.2 cmt. n.6. Chavin’s offenses, however, are not “of the same general type.” We agree with the district court’s reasoning as to why the tax and bankruptcy counts are not of the same general type: [T]he victims are different, and the time frame and context do not completely overlap. Mr. Chavin’s effort to cheat his creditors simply does not involve “substantially the same harm” as does his effort to cheat the government. (R.173.) Defendants argue at some length that the district court erred because it based its finding that the offenses were not of the same type partially on the fact that the victim of the bankruptcy fraud was different from the victim of the tax evasion. According to Chavin, while identity of victims is required for application of subsections (a) and (b) of Nos. 01-2302 & 01-3414 15 § 3D1.2, it is irrelevant to subsections (c) and (d). While we agree that identity of victims is not required for grouping under subsection (c) or (d), the notion that identity of victims is irrelevant is in conflict with precedent in this circuit and with the guideline commentary. In United States v. Wilson, in considering whether to group two counts under subsection (d), we stated “[w]hether the offenses involve different victims is, as the background commentary notes, ‘a primary consideration’ in the grouping decision.” 98 F.3d at 283 (citing U.S.S.G. § 3D1.2 cmt. background). In fact, our decision to group the two offenses involved in Wilson was based largely on the fact that the victim was essentially the same. Id. at 283 (rejecting an argument that mail fraud and money laundering involve different victims in favor of a more intuitive argument that the victims are in reality the same). Consequently, the district court properly considered the fact that the victim of the tax fraud was the United States government and the victims of the bankruptcy fraud were Chavin’s creditors as a factor in determining whether these offenses were of the same general type. Even aside from there being different victims involved, there are other considerations that lead us to the conclusion that Chavin’s crimes are not of the same general type. The tax and bankruptcy frauds were not “part of a single continuous course of criminal activity.” United States v. Petrillo, 237 F.3d 119, 125 (2d Cir. 2000). Indeed, the two offenses are quite separate. The core of Chavin’s tax fraud was committed in 1992 when he made the sham sale to Glickman and filed his fraudulent tax return for that year.5 The core of the bankruptcy fraud did not occur until De- 5 We recognize that Chavin was convicted of tax fraud for his later tax returns as well but clearly these were only spin-offs of the original fraud that occurred in 1992. 16 Nos. 01-2302 & 01-3414 cember 1994. Further, the bankruptcy was not even initiated by Chavin, but rather by his creditors, so the idea that it was part of his criminal plan seems implausible. Also, as the government notes in its brief, the harms involved in these offenses were quite different: “the financial loss to bankruptcy creditors is not ‘of the same general type’ as the harm implicated by a tax offense, which is a crime against the polity and which has indirect effects on all taxpayers and on the government’s ability to protect and serve the public at large.” (Gov. Brief at 37.) Finally, as the district court correctly noted at the sentencing hearing, the only real connection between the bankruptcy fraud and tax fraud appears to be the testimony offered by Glickman in the bankruptcy proceedings. Even construing “of the same general type” broadly, as the application notes suggest we should, we do not find that this minimal connection between the offenses requires grouping in this case. U.S.S.G. § 3D1.2 cmt. n.6.