Opinion ID: 748851
Heading Depth: 1
Heading Rank: 3

Heading: The Obstruction/Impeding Justice Enhancement

Text: 72 A district court's factual determinations under Section 3C1.1 of the guidelines are reviewed for clear error, and a district court's characterization of a defendant's conduct as obstruction within the meaning of Section 3C1.1 is reviewed de novo. United States v. Ford, 989 F.2d 347, 351 (9th Cir.1993).
73 Section 3C1.1 of the guidelines is entitled Obstructing or Impeding the Administration of Justice and states: If the defendant willfully obstructed or impeded, or attempted to obstruct or impede the administration of justice during the investigation, prosecution, or sentencing of the instant offense, increase the offense level by 2 levels. U.S.S.G. § 3C1.1 (Nov. 1, 1990). 74 As the Commentary to Section 3C1.1 acknowledges, [o]bstructive conduct can vary widely in nature, degree of planning, and seriousness. U.S.S.G. § 3C1.1, comment. (n.2). The non-exhaustive list of examples of the types of conduct to which this enhancement applies includes destroying or concealing or directing or procuring another person to destroy or conceal evidence that is material to an official investigation or judicial proceeding.... Id. at n. 3(d) (emphasis added). 75
76 On appeal, Shetty essentially takes two positions regarding the enhancement. First, he contends that since the Government demonstrated that the $280,000 existed during the taxable years in question and relied on the $280,000 in establishing [his] net worth, the Government was unable to demonstrate how the movement of the money in December 1991 obstructed its investigation or prosecution. (Reply Brief of Appellant, at 21 and 22.) Secondly, Shetty contends that the district court improperly departed upward--without any notice in the PSR or at any time prior to sentencing-- the extent it based the enhancement on a finding that the transfer of funds in December 1991 concealed his ability to pay a fine at the time of sentencing in October 1996. Despite these arguments, we do not find a remand for resentencing warranted. 77 For a district court to apply this enhancement, the guidelines only require a finding of an attempt[ ] to obstruct or [impede], the administration of justice during the investigation, prosecution, or sentencing of the instant offense. U.S.S.G. § 3C1.1 (emphasis added). 78 The following time frames evidence Shetty's attempts to conceal the $280,000 once he learned of the IRS's civil audit, and later, after he learned of the criminal investigation. Shetty was initially informed by a letter dated June 20, 1990, that his tax returns were being audited. On June 29 and July 2, 1990, a total of $280,000 was withdrawn from savings accounts and made payable to Shetty's wife in four cashier's checks. The checks were not negotiated and became stale in September 1991 when a single check in the amount of $280,000 was reissued. On December 3, 1991, Shetty was notified of the criminal tax investigation; on December 23, 1991, the $280,000 cashier's check was voided; and on December 24, 1991, the funds were wired by Shetty's wife 2 to a bank in Switzerland. 79 The foregoing time frames can hardly be considered coincidental. The fact that the Government eventually learned of the $280,000 does not change the fact that Shetty's transfer of the funds to a Swiss bank was a classic attempt to conceal evidence ... material to an official investigation. U.S.S.G. § 3C1.1, comment. (n.3(d)) (emphasis added). As it applied the obstruction enhancement at Shetty's sentencing hearing, the district court observed: 80 The Court takes notice of the facts in this case, and it's very clear what was going on here. This money was being transferred out before it was closed in on in some way. I think it was very apparent that that's the case. And whether it was--I think that the conduct had many possible benefits, as the defendant saw it. The potential fine in this case is not a nominal amount, and we see the defendant appearing today to argue that he just doesn't have the ability to pay a fine. And that argument would have been very hard to make had he had $280,000 sitting in the bank. So I think it's quite clear that that's an obstruction. 81 What I have described as fairly commonplace in today's world is the person who puts the money offshore so that they can get access to it later and others can't, just in case. It's walking-around money, just in case somebody finds himself in some strange new place or has to take some other kinds of action. For that reason, it's an obstruction of justice, in my view. 82 The transfer of it ... was an obstruction of justice, if you look at it in terms of the transmitting of evidence or the taking away of evidence, the presence of which could have helped the government's case.... 83 Tr. at 51-52 (Oct. 11, 1996). 84 Of course, had the fine issue been the district court's only basis for the enhancement, and had the defendant not had any notice of that basis, a remand might be appropriate. However, the mere mention of the $280,000 in relation to Shetty's ability to pay a fine does not warrant a remand. On the contrary, the record on appeal demonstrates that the district court had ample bases for making the reasonable inference that Shetty attempted to obstruct or impede the administration of justice. 85 In addition to the statements made at the hearing itself, the district court's statement of reasons attached to the judgment and commitment order filed October 18, 1996, adopted the factual findings and guideline application from the presentence report which detailed the nature of the charged offenses, i.e., subscribing to false tax returns, and the timing of the transfer of $280,000 to Switzerland--three weeks after Shetty learned of the criminal investigation. Moreover, on appeal, Shetty concedes that the $280,000 existed during the taxable years in question. In light of that concession, one must conclude that Shetty's attempt to conceal $280,000 in a Swiss bank account was, at the very least, an attempt to conceal evidence ... material to an official investigation of his tax returns for 1987, 1988 and 1989. U.S.S.G. § 3C1.1, comment. (n.3(d)). And, as simply stated by the Government: [I]n a tax case, money is material evidence. 86 We find the district court's factual determinations under Section 3C1.1 of the guidelines were not clearly erroneous, and that the characterization of Shetty's conduct as an obstruction within the meaning of Section 3C1.1 was correct as a matter of law. 87 AFFIRMED.