Opinion ID: 2774634
Heading Depth: 1
Heading Rank: 6

Heading: sentencing enhancement application

Text: Plato’s sixth challenge concerns the district court’s enhancements to his sentence, but within this single challenge Plato raises two issues which we Appellee’s Br. 59 (citing BLACK’S LAW DICTIONARY 1353 (9th ed. 2009)). 44 See 440 F. App’x 393, 393-94 (5th Cir. 2011) (per curiam) (citing United States v. 45 Laury, 49 F.3d 145, 152 (5th Cir. 1995)). 46 In any event, the jury was presented with overwhelming evidence of misrepresentations relating to collateral oversubscription and cross-securitization in the Notes themselves, evidence which cannot be explained as mere marketing-related puffery, and thus the failure to give the instruction would be harmless under the circumstances shown here. 23 Case: 13-20222 Document: 00512919459 Page: 24 Date Filed: 01/29/2015 No. 13-20222 address separately. First, Plato challenges the district court’s enhancement as erroneous in its actual-loss calculation. Second, Plato asserts error in the district court’s increasing his sentence based on an abuse-of-trust enhancement.
Broadly, this court reviews a defendant’s sentencing under an abuse-ofdiscretion standard. 47 However, we consider the propriety of a district court’s guideline sentencing range in bipartite fashion, reviewing loss calculations and factual determinations for clear error, and reviewing legal questions of guidelines interpretation de novo. 48 Applying that rubric to the enhancement-specific standards, our approach to the abuse-of-trust enhancement is bifurcated, applying de novo review to whether a defendant occupied a position of trust, and clear-error review to whether the defendant abused that trust, 49 a question involving “a sophisticated factual determination.” 50 As to the loss-amount calculation, the parties dispute the standard to apply. Plato asserts that his challenge to the loss-amount calculation involves a legal question (the method of determining the amount of loss) requiring de novo review, relying on this court’s opinion in United States v. Harris. 51 The district court considered whether certain property, Ricaby Field, qualified as loss-reducing collateral. As explained below, since that determination concerned questions of fact rather than law, we review the district court’s loss-amount calculation for clear error. 47 See United States v. Morrison, 713 F.3d 271, 278 (5th Cir. 2013). 48 See id. at 279 (citing United States v. Tedder, 81 F.3d 549, 550 (5th Cir. 1996)). 49 United States v. Kay, 513 F.3d 432, 460 (5th Cir. 2007). 50 United States v. Wright, 496 F.3d 371, 375 (5th Cir. 2007) (quoting United States v. Burke, 431 F.3d 883, 889 (5th Cir. 2005)). 51 597 F.3d 242 (5th Cir. 2010). 24 Case: 13-20222 Document: 00512919459 Page: 25 Date Filed: 01/29/2015 No. 13-20222 While Harris does stand for the proposition that the legal question of the loss-calculation method is reviewed de novo, it supports applying clear-error review to the factual findings at issue in this case. The Harris panel considered a district court’s decision to aggregate the credit limits of cards used in a creditcard scheme, toward the end of calculating the intended-loss sentencing enhancement. 52 The situation required the court “to distinguish an application of the Sentencing Guidelines from a finding of fact,” 53 with appellants arguing that the decision to aggregate was an interpretation or application of the guidelines subject to de novo review, and the Government arguing that such review would deny appropriate deference to the intended-loss estimates as factual findings. 54 The Harris panel held that the amount of loss is a factual finding deserving of deference, 55 but that the court must first review de novo “whether the trial court’s method of calculating the amount of loss was legally acceptable.” 56 The primary distinction between this case and Harris is that the latter involved an intended-loss calculation, as opposed to the actual-loss calculation at issue here. In contrast to actual-loss determinations, an intended-loss determination involves an inherently inferential analysis due to legal questions of calculation methodology (e.g., the Harris question of whether the district court erred in inferring intent equal to the face value of jeopardized property 57). In this case, on the other hand, the dispute at sentencing involved factual, not legal, determinations. At the time of sentencing, the Government 52 See id. at 248-49. 53 Id. at 250. 54 See id. 55 See id. at 251 n.9. 56 Id. at 251 (quoting United States v. Klein, 543 F.3d 206, 214 (5th Cir. 2008)). 57 See id. at 259-60. 25 Case: 13-20222 Document: 00512919459 Page: 26 Date Filed: 01/29/2015 No. 13-20222 conceded the legal, sentence-reducing impact of a finding that Ricaby Field was loss-reducing collateral. Instead, the Government challenged the factual bases of the legal effect, including the ownership of Ricaby Field, the actual value of the assets, and the reliability of the tax appraisal as evidence of ownership and value. Since the propriety of the enhancement turns on the factual findings regarding Ricaby’s ownership and valuation, this court reviews the district court’s amount-of-loss calculation for clear error. 58 Applying clear-error review to both enhancements “only requires a factual finding to be plausible in light of the record as a whole,” and this court only finds such error when a review of all evidence results in “the definite and firm conviction that a mistake has been committed.” 59

Pursuant to Sentencing Guidelines § 2B1.1, the sentencing guideline range incorporates the amount of loss to the victims, calculated as the greater of actual or intended loss. 60 Plato’s sentence was calculated based on actual loss, which is “the reasonably foreseeable pecuniary harm that resulted from the offense.” 61 Pertinent here, Application Note 3(E)(ii) provides that the loss amount is reduced by the following: In a case involving collateral pledged or otherwise provided by the defendant, the amount the victim has recovered at the time of sentencing from disposition of the collateral, or if the collateral has 58 See United States v. Mata, 624 F.3d 170, 174 (5th Cir. 2010) (per curiam) (citing United States v. Solis-Garcia, 420 F.3d 511, 514 (5th Cir. 2005)). 59 United States v. Rodriguez, 630 F.3d 377, 380 (5th Cir. 2011) (per curiam) (internal quotation marks omitted). 60 U.S. SENTENCING GUIDELINES MANUAL § 2B1.1 application n.3(A) (2014). 61 Id. § 2B1.1, app. n.3(A)(i). 26 Case: 13-20222 Document: 00512919459 Page: 27 Date Filed: 01/29/2015 No. 13-20222 not been disposed of by that time, the fair market value of the collateral at the time of sentencing. 62 After applying any credits against loss, Sentencing Guidelines § 2B1.1(b) provides for increases in the offense level based on the final loss calculation; relevant to Plato’s challenge, a loss calculation of more than $1,000,000 results in a 16-level increase, while a calculation of more than $2,500,000 results in an 18-level increase. 63 The district court relied on the loss calculation of $3,051,777.44 in the PSR. Since this amount was in excess of $2,500,000, the district court increased the offense level by 18 levels, from 7 to 25. Plato asserts that the PSR loss calculation is erroneous, consistent with his objection at the time of sentencing, and appeals the district court’s reliance on that calculation. According to Plato, the PSR excludes the value of MPCowned assets in Ricaby Field, which, if properly included as collateral credit against the actual loss, 64 would result in a loss amount below $2,500,000 and an offense-level increase of 16 rather than 18. However, we easily find no merit in this argument. The district court had ample factual basis to reasonably discredit Ricaby’s classification as a lossreducing asset due to questions of Ricaby’s ownership, collateral classification, and valuation. First, evidence did not establish MPC’s ownership of the Ricaby assets. It is undisputed that MPC previously owned the Ricaby assets until selling them in 2007. Plato, however, asserts that MPC re-acquired those assets in 2010. In support, Plato cites to an assignment and bill of sale of the Ricaby assets to “M P C Energy, Inc., a Texas Corporation.” As the Government points 62 Id. § 2B1.1, app. n.3(E)(ii). 63 See id. § 2B1.1(b)(1). 64 Plato asserts that Ricaby Field was an asset of MPC, valued at $1,111,900. 27 Case: 13-20222 Document: 00512919459 Page: 28 Date Filed: 01/29/2015 No. 13-20222 out, however, Plato did not and has not provided any evidence that M P C Energy, Inc. is related to MPC, and the Notes do not place any obligation on M P C Energy, Inc. Plato replies that the assignment document has three references to MPC; yet, MPC is never referenced as a party to the assignment, and neither is MPC a signatory. 65 As a result, the district court had a reasonable basis to discredit MPC’s ownership of Ricaby as loss-reducing collateral. Additionally, evidence did not support Ricaby’s classification as collateral from which investors could recover their losses. Toward this end, the Government points out that only one Note used Ricaby Field assets as collateral, and “[o]nly seven of the 18 ‘Lease Name[s]’ in the tax appraisal were even arguably connected with the assets listed as Note collateral.” In his reply, Plato argues that Ricaby can serve as collateral to other noteholders, since the Notes “provided that the collateral was interchangeable.” However, the Note language that Plato cites in support grants to the note-maker (MPC), not to the noteholders, “the power and obligation to substitute additional oil and gas properties to satisfy the payment obligations contained herein”; Plato provides no basis for inferring that investors holding Notes for which Ricaby is not collateral were empowered to recoup losses therefrom. The parties do not discuss an additional point that renders that inference even less meritorious. As previously discussed, 66 the Notes (specifically the subscription agreements) expressly restricted the use of collateral to specific Funds, which implies that the “additional oil and gas properties to satisfy the payment obligations” 65 See Record Excerpt 13 at pp. 1 (handwritten reference to MPC); 5 (reference to MPC as signatory of separate “Letter Agreement”); and 8 (referencing MPC as a signatory of another Letter Agreement, dated April 2, 2009). 66 See supra Part I. 28 Case: 13-20222 Document: 00512919459 Page: 29 Date Filed: 01/29/2015 No. 13-20222 subject to substitution as collateral would necessarily exclude property, like Ricaby, which was already pledged as collateral in another Fund. Lastly, evidence supported Ricaby’s exclusion from the loss calculation as essentially valueless. For his part, Plato bases his value estimate on a tax appraisal valuation, while the Government instead relies on a productionvalue report. 67 Plato argues that the production-value report is less credible as a value metric than the appraisal, since production value would have dropped since Plato’s arrest and conviction. 68 Additionally, Plato distinguishes United States v. Nathan, 69 the opinion cited by the Government for the credibility of more recent value estimates, 70 by noting that the Nathan panel merely recognized that more recent evidence would have been preferable, but was not available given the lack of any interim appraisals. 71 Ultimately, however, the dispute on this point is a factual dispute on the value of the Ricaby assets, and Plato does not provide sufficient evidence to establish the requisite “definite and firm conviction that a mistake has been committed.” Accordingly, we affirm the district court’s finding that the Ricaby assets did not qualify as lossreducing collateral for the amount-of-loss calculation.
We find no error in the district court’s application of Sentencing Guidelines § 3B1.3. Plato occupied a position of trust as MPC’s President and Chief Executive Officer, and Plato misallocated company funds for personal benefit in a manner that facilitated or concealed the offense. Therefore, we conclude that the district court had ample basis under this court’s precedent 67 Appellant’s Br. at 64; Appellee’s Br. at 65. 68 See Reply Br. 17. 69 318 F. App’x 273 (5th Cir. 2009). 70 Appellee’s Br. 65. 71 See Nathan, 318 F. App’x at 275-76. 29 Case: 13-20222 Document: 00512919459 Page: 30 Date Filed: 01/29/2015 No. 13-20222 to find that Plato occupied a position of trust and abused that position for his own personal gain. 72 Accordingly, we find no error in the district court’s application of both enhancements.