Opinion ID: 152880
Heading Depth: 2
Heading Rank: 5

Heading: Were The Defendants Properly Denied Acceptance Of Responsibility Credit?

Text: Next, the defendants argue that, [a]lthough [they] pleaded guilty to all the charges against [them], the district court abused its discretion in denying them  any credit for acceptance of responsibility. Kumar Br. 44 (emphasis in original); see Richards Br. 47-48. A defendant is entitled to a two-point reduction under U.S.S.G. § 3E1.1(a) if he clearly demonstrates acceptance of responsibility for his offense. A defendant who enters a guilty plea is not entitled to an adjustment under this section as a matter of right. U.S.S.G. § 3E1.1, cmt. n.3. In particular, a defendant who engages in [c]onduct resulting in an enhancement under § 3C1.1 (Obstructing or Impeding the Administration of Justice) ordinarily would not be entitled to the reduction, as such conduct indicates that the defendant has not accepted responsibility for his criminal conduct. Id. at cmt. n.4. However, there may be extraordinary cases in which a defendant who obstructs justice in some way is also entitled to a reduction for acceptance of responsibility. Id. A district court's § 3E1.1 determination is entitled to great deference because the sentencing judge is in a unique position to evaluate a defendant's acceptance of responsibility. Id. at cmt. n. 5. A district court's decision to deny credit for acceptance of responsibility, primarily a factual determination, will be upheld unless it is without foundation. United States v. Harris, 13 F.3d 555, 557 (2d Cir.1994).
At sentencing, the district court denied Kumar's request for an acceptance of responsibility reduction under § 3E1.1, concluding that Kumar had not sufficiently accepted responsibility for his criminal conduct because he had obstructed justice, and because he had waited until the eve of trial to plead guilty. In addition, the district court noted that (1) Kumar's plea allocation was phrased to mute[] the gravity of his complicity in the securities fraud offenses, Sentencing Tr. 61:12-13, Nov. 2, 2006, and (2) Kumar's meritless objections to the evidence-tampering and fraudulent transaction allegations in the PSR revealed a lack of acceptance of responsibility, Kumar Sentencing Tr. at 60:18-61:21. On appeal, Kumar claims that the district court's rejection of his acceptance of responsibility request was erroneous. First, Kumar claims that, although an acceptance of responsibility departure is generally unavailable when a defendant engages in obstructive behavior, that exception does not apply to him because his obstructive behavior occurred pre-indictment and the exception only applies to post-indictment obstructive behavior. See, e.g., United States v. Gregory, 315 F.3d 637, 641 (6th Cir.2003) (granting acceptance points where [a]ll of [the defendant's] obstructive conduct predated [the] indictment); see also United States v. Teyer, 322 F.Supp.2d 359, 368 (S.D.N.Y. 2004) (Were courts to hold that any obstructive conduct, however early in the investigation ... of a case ... forever disentitled a defendant to credit for later acceptance of responsibility, this incentive would be ill served.). Second, Kumar argues that the district court placed too much reliance on the lateness of his plea in rejecting his request for an acceptance of responsibility reduction, which he argues is only a basis for denying him a third acceptance point, ... but [not] ... for denying the first two. Kumar Br. 44; see United States v. Sloley, 464 F.3d 355, 359 (2d Cir.2006) ([A] government motion is a necessary prerequisite to the additional one-level decrease [for a timely plea] under Guidelines § 3E1.1(b).); see also Kumar Br. 49 (noting that this Court has not directly addressed the relationship between the timeliness of a defendant's guilty plea and his receipt of acceptance credit). We need not resolve either of these alleged flaws in the district court's reasoning with respect to Kumar, however, because an examination of the record shows that he engaged in sufficient objectionable post-indictment conduct to justify a rejection of his request for acceptance of responsibility credit. Specifically, Kumar, individually and separately from Richards, acted in ways that the district court reasonably found to be inconsistent with a full acceptance of responsibility. For example, the district court found that Kumar's carefully worded plea allocution ... muted the gravity of his complicity in the securities fraud offenses.... When asked if he thought that [his fraudulent conduct] ... would have affected a prudent investor's decision to buy or sell his company's stock, his response was: `I could see the possibility where it could.' Kumar Sentencing Tr. 61:11-13, 17-21. Moreover, the district court found it particularly telling that Kumar objected to the PSR on various grounds related to evidence tampering and fraudulent transactions during his tenure at CA, but then withdrew those objections during the course of the Fatico hearing, implicitly acknowledging that his objections lacked merit. Indeed, notwithstanding Kumar's withdrawal of his objection, the district court expressly found at sentencing that there was clear[] and convincing[] evidence that at least one of Kumar's objections was meritless. Kumar Sentencing Tr. 61:9. See U.S.S.G. § 3E1.1, cmt. n.1(a) ([A] defendant who falsely denies, or frivolously contests, relevant conduct that the court determines to be true has acted in a manner inconsistent with acceptance of responsibility.). Thus, Kumar's post-indictment conduct provided a reasonable basis for rejecting his request for an acceptance of responsibility reduction.
While the district court set forth several reasons why Kumar did not deserve a sentencing reduction for acceptance of responsibility, in denying Richards's same request, the court relied on a single factor: the lateness of Richards's plea. According to the district court, the most significant factor in the acceptance of responsibility scale is the factor of time limits. Richards Sentencing Tr. 15:7-9. The district court concluded that, by pleading two weeks before trial, Richards had exceeded those time limits, and therefore, was not entitled to acceptance of responsibility credit. On this point, we disagree. Timeliness of a defendant's plea is an appropriate consideration in the acceptance of responsibility determination. U.S.S.G. § 3E1.1 cmt. n.1(h). However, while the two-level reduction provided for in § 3E1.1(a) is for demonstration of acceptance of responsibility, the Sentencing Guidelines specifically provide that timeliness of a plea is primarily relevant to the reduction of an additional point under § 3E1.1(b), ostensibly for helping the authorities save resources. United States v. Ortiz-Torres, 449 F.3d 61, 76 (1st Cir. 2006) (internal quotation marks omitted). See United States v. Eyler, 67 F.3d 1386, 1390-91 (9th Cir.1995) (While the key inquiry for purposes of [§ 3E1.1(a)] is whether the defendant has demonstrated contrition, once this has been determined, then the focus of the section (b) inquiry is on timeliness.  (emphasis in original)). As Judge Lynch stated in Teyer: The Guidelines specifically provide a sanction for belated guilty pleas that fail adequately to save the resources of the Government and the Court. Defendants who plead at an early stage qualify for an additional one-level reduction that is correspondingly unavailable for belated pleas. That a defendant can earn an additional one-level reduction merely by notifying the authorities of his intention to plead early enough to permit the government to avoid preparing for trial strongly implies that defendants may qualify for the basic two-level adjustment for acceptance of responsibility without doing so. 322 F.Supp.2d at 376 (alteration, internal citations, and quotation marks omitted). Here, the lateness of Richards's plea on its own was not a sufficient foundation for denying him any acceptance of responsibility credit. While under certain circumstances the lateness of a plea might indeed weigh against the defendant, those circumstances are not present in this case. For example, Richards's plea came neither after the [g]overnment ... concluded presenting its case, ... during the jury's deliberations, nor on the morning of trial, and the district court cited no other [relevant] factors that warranted a rejection of Richards's request. Id. It is undisputed that Richards's obstruction and culpability was of a different order than that of Kumar. Richards Sentencing Tr. 25:15-16. Unlike Kumar, Richards appeared to fully accept responsibility both prior to and during sentencing. See Richards Sentencing Tr. 12:14-16 (Your Honor, I fully accept responsibility for the actions that I have taken and regret those actions.). Also unlike Kumar, who tampered with physical evidence, bribed witnesses, and lied repeatedly during the course of a federal investigation, Richards's obstructive conduct consisted entirely of a single, albeit false, denial of knowledge of the 35-day month practice during an interview and subsequent testimony that predated his guilty plea by three years and was accounted for in the indictment. Indeed, denying Richards acceptance of responsibility solely due to his charged obstructive conduct would effectively raise the Guidelines level for such conduct by foreclosing the opportunity for acceptance of responsibility credit in obstruction cases. Because the paramount factor in determining eligibility for § 3E1.1 credit is whether the defendant truthfully admits the conduct comprising the offense or offenses of conviction, and because Richards did so here in a sufficiently timely manner so as to avoid a lengthy trial and avert the risk of an irrational verdict, Teyer, 322 F.Supp.2d at 376, his lateness in pleading guilty did not by itself provide a sufficient basis for the denial of more than a one-point reduction for acceptance of responsibility. Accordingly, because the district court erroneously failed to award Richards a two-point reduction for acceptance of responsibility that he should have received, Richards's sentence is vacated and the case remanded to the district court for resentencing on this additional basis.