Opinion ID: 588132
Heading Depth: 3
Heading Rank: 1

Heading: sentence enhancement for other relevant conduct

Text: 17 On appeal, Mullins has challenged the district court's determination of relevant conduct under U.S.S.G. § 1B1.3(a)(2). 4 He has argued that (1) the district court misinterpreted the scope of § 1B1.3(a)(2), and that as a result the court erred in sentencing him for the full loss resulting from the scheme to defraud Workman and for the intended losses in the life insurance scheme; and (2) the use of information he provided pursuant to the grant of use and sentencing immunity in the plea agreement was improperly used to establish the nexus between the Workman fraud and the life insurance fraud for purposes of establishing that the latter was relevant conduct. It was not improper to sentence Mullins on the basis of the full loss resulting from the scheme to defraud Workman, without applying the analysis of relevant conduct under U.S.S.G. § 1B1.3. 5 We are, however, troubled by the court's finding that the life insurance scheme was relevant conduct within the meaning of U.S.S.G. § 1B1.3. 18 The parties disagree as to whether the district court's finding is a factual determination which we review only for clear error, or whether we should review de novo the court's adoption of an expansive view of U.S.S.G. § 1B1.3(a)(2) as a matter of legal interpretation. See United States v. Daughtrey, 874 F.2d 213, 217-18 (4th Cir.1989). It is clear that the district court did not merely make a factual determination, but endeavored to interpret the scope of the guideline, concluding that the very broadest definition of relevant conduct would be adopted by the Fourth Circuit. We find that the district court was not incorrect in adopting a broad approach. We do not contradict the use of a broad approach. However, the court's application of the scope of that broad approach was clearly erroneous. The application approaches a rule that knowing a brother to be a crook makes any conduct assisting the brother in carrying out an uncharged offense relevant conduct. 19 The relevant conduct provision in § 1B1.3(a)(2) is applicable only to the kinds of offenses that would be grouped together under § 3D1.2(d), and is designed to take account of a pattern of misconduct that cannot readily be broken into discrete, identifiable units that are meaningful for purposes of sentencing. U.S.S.G. § 1B1.3, comment. (backg'd). Offenses are grouped together under § 3D1.2(d), inter alia, [w]hen the offense level is determined largely on the basis of the total amount of harm or loss, as is the case with fraud. U.S.S.G. § 3D1.2(d). As a specific offense characteristic for the offense of fraud, the Sentencing Guidelines require a determination as to the dollar value of the loss, including both the actual loss and intended loss. U.S.S.G. § 2F1.1(b)(1); id., comment. (n. 7). Conviction for the commission of other fraudulent activity would require grouping the convictions together and determining the offense level based upon the total dollar loss. U.S.S.G. § 3D1.2(d). In sentencing Mullins on the one count for aiding and abetting the Workman fraud, the Guidelines required the court to include the loss attributable to all acts and omissions committed or aided and abetted by him, or for which he would be otherwise accountable, U.S.S.G. § 1B1.3(a)(2); id., comment. (n. 2), and that would be grouped together under § 3D1.2(d) if there were multiple counts of conviction, if they are part of the same course of conduct or common scheme or plan as the offense of conviction, U.S.S.G. § 1B1.3(a)(2), even if such other conduct is not formally charged or is not an element of the offense of conviction, U.S.S.G. § 1B1.3, comment. (backg'd). The issue, then, is whether the life insurance fraud was part of the same course of conduct or common scheme or plan as the offense of conviction, the Workman fraud, within the meaning of § 1B1.3(a)(2), such that Mullins' sentence must also be based upon the dollar value of intended losses in the insurance fraud, i.e., $1,100,000, or only upon the dollar value of the loss involved in defrauding Workman. 20 In assessing conduct for purposes of § 1B1.3(a)(2), the sentencing court is to consider such factors as the nature of the defendant's acts, his role, and the number and frequency of repetitions of those acts, in determining whether they indicate a behavior pattern. United States v. Santiago, 906 F.2d 867, 872 (2d Cir.1990). The significant elements to be evaluated are similarity, regularity and temporal proximity between the offense of conviction and the uncharged conduct. United States v. Hahn, 960 F.2d 903 (9th Cir.1992). Although an appellate court cannot formulate precise recipes or ratios in which these components must exist in order to find conduct relevant, a district court should look for a stronger presence of at least one of the components if one of the components is not present at all. Hahn, 960 F.2d at 910. If the uncharged conduct is both solitary and temporally remote, then there must be a strong showing of substantial similarity. Id. 21 Regularity and temporal proximity are extremely weak here, if present at all, as the uncharged conduct took place over six months prior to the two phone calls underlying the offense of conviction. Thus, we are left to consider similarity, and that is essentially the basis upon which the district court found the insurance fraud to be relevant conduct. 6 Conduct on the part of Mullins that the district court identified as similar in both schemes was that Mullins gave his proxy to his brother, to aid his brother's commission of fraud when asked to do so. Another connection between the schemes identified by the court was the involvement of Hunting, Mullins and Paul in both schemes. 22 The connection based on Hunting's involvement in both fraudulent schemes is contested by Mullins on the ground that establishment of the nexus relies upon information he provided pursuant to the grant of use and sentencing immunity. Although the court sought to avoid relying on the information provided by Mullins by stating that there was enough of a connection between Hunting, Mullins and Paul whether or not Hunting was specifically identified, that overlooks one point--the fact that Hunting was involved in any way in the Workman equipment fraud was not known until investigators questioned Hunting after Mullins revealed her identity. However, we need not decide whether the court was entitled to use the information based on the government's assertion that the investigators already knew enough to locate Hunting on their own. Even if that information could be used, we still do not find the insurance fraud to be part of the same course of conduct or common scheme or plan as the Workman equipment fraud. 23 The fact that the same three individuals were involved in two schemes in which Hunting masqueraded as Keeney does not, in and of itself, make them sufficiently similar as to be part of the same course of conduct or common scheme or plan. There must be some consideration of the relative significance to the overall scheme of a particular similarity that is identified. See Hahn, 960 F.2d at 911 (requiring a strong showing of substantial similarity if the conduct is neither regular nor temporally related). The fact that Keeney's name was used in both schemes by the same woman is not sufficiently significant to either fraudulent scheme as to create a substantial similarity, as is apparent from a description of each course of conduct. The offense of conviction centered on false statements made by Mullins by wire communication to a seller to delay repossession of property that had been provided to Paul on the basis of a fraudulent credit application. The uncharged offense conduct involved Mullins' assisting a younger woman to pose as an older woman to obtain life insurance and name Paul as the beneficiary. The use of the name Keeney by Hunting is not a particularly significant element of either scheme, such as would create a substantial similarity enabling us to find that the two are part of the same course of conduct or common scheme or plan. 24 The other connection found, i.e., Mullins' willingness to aid his brother's fraudulent endeavors, relies upon an unduly broad description of that similar feature to reach the conclusion that the two quite independent schemes were both part of the same course of conduct or common scheme or plan. It is not sufficient that other crimes are of the same kind as the charged offense if they are not part of the same course of conduct or plan. U.S. v. Wood, 924 F.2d 399, 404 (1st Cir.1991) (quoting United States v. White, 888 F.2d 490, 500 (7th Cir.1989)). To state that the pattern of Mullins' conduct was that of assisting his brother in committing various frauds when asked to do so, as did the district court, is to describe his conduct at such a level of generality as to eviscerate the evaluation of whether uncharged criminal activity is part of the same course of conduct or common scheme or plan as the offense of conviction. With a brushstroke that broad, almost any uncharged criminal activity can be painted as similar in at least one respect to the charged criminal conduct. The goal of the provision ... is for the sentence to reflect accurately the seriousness of the crime charged, but not to impose a penalty for the charged crime based on unrelated criminal activity. Id. 25 Moreover, while neither connection identified by the district court indicates a substantial similarity, the distinctions between the uncharged frauds and the offense of conviction are indeed quite significant. Those distinctions include the kind of property to be obtained and the method of doing so, the type of victim to be defrauded, the general modus operandi of the criminal activity, and the actual conduct engaged in by the defendant. 26 We conclude, therefore, that the uncharged conduct involved in the life insurance fraud was not sufficiently similar, regular, or temporally related as to be part of the same course of conduct or common scheme or plan as the offense of conviction. The offense level and sentencing range should not have been based on the intended losses attributable to the uncharged insurance fraud. We vacate the sentence and remand to the district court for resentencing. We do note, however, that even though Mullins' participation in the life insurance fraud is not relevant conduct that should be used to calculate his offense level and sentencing range, the conduct may be considered by the court in determining which sentence to impose within the designated sentencing range. See U.S.S.G. § 1B1.3 comment.