Opinion ID: 547492
Heading Depth: 3
Heading Rank: 1

Heading: Application of the Fraud Standard

Text: 11 Under the Sentencing Guidelines Sec. 1B1.1(a) directs the court to look to the statute of conviction to determine the most appropriate offense guideline, while Sec. 1B1.2(a) directs the court to look to the offense of conviction in making that determination. T. Hutchison & D. Yellen, Federal Sentencing Law and Practice 21 ann. 3 (1989) [hereinafter Sentencing Practice ] (citing U.S.S.G. Secs. 1B1.1(a) & 1B1.2(a)). Beard argues this means that even though the Statutory Index specifies the guideline to apply, the court should ignore the referenced guideline and choose the one closest to the conduct contemplated in the statute of conviction. In this case, Beard argues, the perjury guideline is the closest to the conduct contemplated in the statute of conviction because 18 U.S.C. Sec. 152 uses the phrase under penalty of perjury. He claims that the offense of conviction, making a false statement, is more similar to perjury than it is to fraud; therefore, perjury is the most applicable guideline to the conduct. Beard further argues that applying a fraud standard is incorrect because the status of the $175,000 was unknown at the time of his offense; therefore, he could not have committed a fraud upon his creditors because the funds, or at least most of the funds, belonged to him. 12 Beard incorrectly characterizes his offense. He was under the duty to disclose to the court the existence of assets whose immediate status in the bankruptcy is uncertain, even if that asset is ultimately determined to be outside of the bankruptcy estate. See United States v. Cherek, 734 F.2d 1248, 1254 (7th Cir.1984). His failure to disclose the existence of the $175,000 and his continued attempts to conceal its presence constituted a fraud upon the court. Therefore, ownership of the assets is irrelevant to the selection of the correct guideline, in light of Beard's duty to disclose the existence of the asset to the bankruptcy court. Fraud is therefore a part of Beard's offense of conviction. 13 It is clear to us from the language in sections 1B1.1(a) and 1B1.2(a) that the Commission intended the choice of most applicable guideline to apply only when two or more guideline sections are listed in the Index for the statute of conviction. See U.S.S.G. Sec. 1B1.1(a) (June 15, 1988) (If more than one guideline is referenced for the particular statute, select the guideline most appropriate for the conduct of which the defendant was convicted). In such an instance, the court must choose the most appropriate guideline from among the ones listed, using the conduct for which the defendant was convicted to determine the choice. 2 The sentencing court is not to look beyond the referenced guidelines listed in the Index unless only one guideline is listed and that guideline is deemed inappropriate in light of the statute or offense of conviction. See Sentencing Practice, supra at 21 & 25 n. 2. Only when the Index lists a single guideline should the court look beyond the guideline referenced. Therefore, if more than one guideline is referenced in the Index, the court must choose the most appropriate guideline of those listed, based on the offense of conviction. 14 In the instant case, the statutory index references two guidelines for convictions under 18 U.S.C. Sec. 152. The first, 2B4.1, deals with commercial bribery and is clearly inappropriate to Beard's offense of conviction. The second, 2F1.1, deals with offenses involving fraud and deceit. 15 Guideline 2F1.1 is the more appropriate guideline for two reasons. First, Beard's offense specifically included fraud as a part of the offense because Beard pled guilty to knowingly and fraudulently making a false statement under the language of the statute. See 18 U.S.C. Sec. 152. Second, irrespective of the statute of conviction, his conduct constituted fraud because he attempted to conceal funds from the bankruptcy court while he was under a duty to reveal their existence and allow the court to determine their ownership. Therefore, the only appropriate choice between the two guidelines referenced is Guideline 2F1.1. Furthermore, the Statutory Index does not list Guideline 2J1.3, the perjury guideline, in reference to violation of 18 U.S.C. Sec. 152. Clearly, perjury was not contemplated as a sentence for Beard's offense.