Opinion ID: 4114143
Heading Depth: 3
Heading Rank: 2

Heading: Whether the District Court Clearly Erred

Text: “The sentencing judge is in a unique position to assess the evidence and estimate the loss based upon that evidence.” 28 “A district court may . . . exercise wide evidentiary latitude at sentencing and may look to the whole conspiracy to determine whether the acts of others were reasonably foreseeable.” 29 But the district court “must still make specific findings as to the scope of that conspiracy.” 30 “These findings need not be expressly made, but the meaning of the [district] court’s findings must be clear.” 31 “We will not upset these findings unless they are implausible in light of the record as a whole.” 32 The loss amount “need not be determined with precision,” but “to satisfy th[e] clear error test all that is necessary is that the finding be plausible in light of the record as a whole.” 33 “Before a court may attribute losses to a defendant’s fraudulent conduct, there must be some factual basis for the conclusion that those losses were the result of fraud.” 34 We generally consider the PSR “reliable evidence for sentencing purposes.” 35 “In making its factual findings for sentencing, a district court may adopt the findings of the PSR without additional inquiry if those facts have an evidentiary basis with United States v. Cooks, 589 F.3d 173, 185 (5th Cir. 2009) (quoting United States v. 28 Holbrook, 499 F.3d 466, 468 (5th Cir. 2007)). 29 United States v. Mateo Garza, 541 F.3d 290, 293 (5th Cir. 2008). 30 Id. 31 United States v. Hammond, 201 F.3d 346, 351 (5th Cir. 1999). 32 Mateo Garza, 541 F.3d at 293. 33 United States v. Reasor, 541 F.3d 366, 369 (5th Cir. 2008) (internal quotation marks omitted). United States v. Bernegger, 661 F.3d 232, 242 (5th Cir. 2011) (per curiam) (quoting 34 United States v. Randall, 157 F.3d 328, 331 (5th Cir. 1998)). 35 Reasor, 541 F.3d at 369 (internal quotation marks omitted). 11 Case: 16-40222 Document: 00513826679 Page: 12 Date Filed: 01/09/2017 No. 16-40222 sufficient indicia of reliability and the defendant does not present rebuttal evidence or otherwise demonstrate that the information is materially unreliable.” 36 The defendant has the burden of showing that the information in the PSR is materially unreliable. 37 “If the factual recitation [in the PSR] lacks sufficient indicia of reliability, then it is error for the district court to consider it at sentencing—regardless of whether the defendant objects or offers rebuttal evidence.” 38 The district court adopted the factual findings and undisputed Guideline applications contained in the PSR and concluded that “the information contained in the presentence report has sufficient indicia of reliability to support its probable accuracy.” The PSR relied on USSG § 1B1.3(a)(1)(B) to consider the loss amounts related to the nine additional properties in calculating Hearns’s base offense level. Under § 1B1.3(a)(1)(B), “a defendant can be liable for conduct that is (1) within the scope of the jointly undertaken criminal activity, (2) in furtherance of that criminal activity, and (3) reasonably foreseeable in connection with that criminal activity.” 39 36 United States v. Ford, 558 F.3d 371, 377 (5th Cir. 2009) (per curiam) (quoting United States v. Valles, 484 F.3d 745, 759 (5th Cir. 2007)). 37 Id. 38United States v. Zuniga, 720 F.3d 587, 591 (5th Cir. 2013) (per curiam) (alteration in original) (quoting United States v. Harris, 702 F.3d 226, 231 (5th Cir. 2012)); see also United States v. Windless, 719 F.3d 415, 420 (5th Cir. 2013); United States v. McGee, 559 F. App’x 323, 327 n.17 (5th Cir.) (per curiam), cert. denied, 135 S. Ct. 130 (2014). United States v. Gonzales, 841 F.3d 339, 359 (5th Cir. 2016) (internal quotation 39 marks omitted) (quoting U.S. SENTENCING GUIDELINES MANUAL § 1B1.3(a)(1)(B) (U.S. SENTENCING COMM’N 2015)). Specifically, § 1B1.3(a)(1) provides as follows: Unless otherwise specified, (i) the base offense level where the guideline specifies more than one base offense level, (ii) specific offense characteristics and (iii) cross references in Chapter Two, and (iv) adjustments in Chapter Three, shall be determined on the basis of the following: 12 Case: 16-40222 Document: 00513826679 Page: 13 Date Filed: 01/09/2017 No. 16-40222 The PSR explained as follows: “The Government has identified 10 properties [including the Brownstone Property] that involved fraud in the mortgage loan process. Government records reflect that with respect to these properties, . . . Hearns [and her co-conspirators] were all involved in the scheme to defraud.” The PSR otherwise provided no information or evidence to support the loss amounts or Hearns’s involvement in the other transactions. The government presented evidence with respect to three of these properties at trial, but the remaining six properties were not mentioned either at trial or at sentencing. 40 Nothing in the record reflects when the six remaining transactions occurred, whether criminal activity was associated with the transactions, or whether Hearns was involved in them. 41 The facts contained (A) all acts and omissions committed, aided, abetted, counseled, commanded, induced, procured, or willfully caused by the defendant; and (B) in the case of a jointly undertaken criminal activity (a criminal plan, scheme, endeavor, or enterprise undertaken by the defendant in concert with others, whether or not charged as a conspiracy), all acts and omissions of others that were— (i) within the scope of the jointly undertaken criminal activity, (ii) in furtherance of that criminal activity, and (iii) reasonably foreseeable in connection with that criminal activity; that occurred during the commission of the offense of conviction, in preparation for that offense, or in the course of attempting to avoid detection or responsibility for that offense[.] These six properties are 1610 Jensen Ct., Denton, Texas; 611 Oriole Blvd. #2401, 40 Duncanville, Texas; 611 Oriole Blvd. #2402, Duncanville, Texas; 611 Oriole Blvd. #2403, Duncanville, Texas; 611 Oriole Blvd. #2404, Duncanville, Texas; and a duplex at 1464 and 1466 Brook Meadow Circle, Lancaster, Texas. 41 We also note that § 1B1.3(a)(1) requires that the relevant conduct “occur[] during the commission of the offense of conviction, in preparation for that offense, or in the course of attempting to avoid detection or responsibility for that offense,” and we have explained that this provision can temporally limit the application of § 1B1.3(a)(1). See, e.g., United States v. Barraza, 655 F.3d 375, 385 (5th Cir. 2011) (“[S]eparate acts or conduct that did not occur during the commission of the presently charged offense may not be relevant conduct 13 Case: 16-40222 Document: 00513826679 Page: 14 Date Filed: 01/09/2017 No. 16-40222 in the PSR regarding these six properties lack an evidentiary basis with sufficient indicia of reliability. “Although a PSR may be considered as evidence by the court when making sentencing determinations, bare assertions made therein are not evidence standing alone.” 42 On this record, the district court clearly erred when it relied on the PSR to include the loss amounts from the six properties in its calculation of Hearns’s base offense level. We therefore vacate Hearns’s sentence and remand for resentencing. Of course, on remand, the district court might reach the same conclusion regarding relevant conduct and the loss amount that it did initially and re-enter the same sentence. 43 [under § 1B1.3(a)(1)].”); United States v. Fowler, 216 F.3d 459, 461–62 (5th Cir. 2000) (finding that the defendant’s receipt of “other sadistic images” did not constitute relevant conduct under § 1B1.3(a)(1) because, while “[t]he electronic mailing of the image that was the basis of the count of conviction occurred at a discrete moment,” the defendant’s “receipt of the other, sadistic images did not occur ‘during the commission of the offense of conviction’” and because “there was no proof that the sadistic images were part of preparing for the offense of conviction or avoiding detection of the crime”). Neither the PSR nor the district court explained whether these transactions occurred during the commission of the offense of conviction—here, “[f]rom [o]n or about June 11, 2008, . . . through on or about July 1, 2008”— in preparation for the offense of conviction, or in the course of attempting to avoid detection or responsibility for that offense. By contrast, § 1B1.3(a)(2) does not contain the same temporal limitation as Subsection (a)(1). Subsection (a)(2) applies to “all acts and omissions described in [Subsection (a)(1)] that were part of the same course of conduct or common scheme or plan as the offense of conviction.” Thus, conduct undertaken in the commission of separate conspiracies to defraud various victims at different times would qualify as relevant under (a)(2) as long as the separate conspiracies were part of the same course of conduct, common scheme, or plan as the offense of conviction. See, e.g., United States v. Hinojosa, 484 F.3d 337, 341–42 (5th Cir. 2007); United States v. Payne, 226 F.3d 792, 796 (7th Cir. 2000). Notably, in oral argument, the government commendably conceded that this legal error—that is, the district court’s application of Subsection (a)(1) rather than (a)(2)—would control. 42Bernegger, 661 F.3d at 242 (internal quotation marks omitted); see Zuniga, 720 F.3d at 591 (“[B]ald, conclusionary statements in a PSR are not sufficiently reliable.” (internal quotation marks omitted)). 43 See United States v. Locke, 643 F.3d 235, 246 (7th Cir. 2011) (“[W]e acknowledge that the district court might find—based upon sufficient evidence presented during resentencing—the conduct in the unconvicted counts relevant to [the defendant’s] sentencing. It could then state its findings with specificity and, presumably, enter the same sentence we 14 Case: 16-40222 Document: 00513826679 Page: 15 Date Filed: 01/09/2017 No. 16-40222