Court Opinion

ID: 35415
Source: CourtListenerOpinion
Date Created: 2010-04-25 19:28:04+00
Date Added: 2024-06-11T17:13:27.195612
License: Public Domain

United States Court of Appeals
                                                                                      Fifth Circuit
                                                                                    F I L E D
                                                                                      June 22, 2004
                      IN THE UNITED STATES COURT OF APPEALS
                               FOR THE FIFTH CIRCUIT
                                                                                Charles R. Fulbruge III
                                                                                        Clerk
                                __________________________

                                       No. 02-31181
                                __________________________

UNITED STATES OF AMERICA,
                                                                               Plaintiff-Appellee,

versus

GEORGE W. WILLIAMS,
                                                                           Defendant-Appellant.

                 ___________________________________________________

                         Appeal from the United States District Court
                            For the Western District of Louisiana
                                    (No. 01-CR-60041-1)
                 ___________________________________________________

Before KING, Chief Judge, BENAVIDES, and CLEMENT, Circuit Judges.

EDITH BROWN CLEMENT, Circuit Judge:*

         Appellant George W. Williams (“Williams”) was convicted of fraud, conspiracy to commit

fraud, money laundering, conspiracy to commit money laundering, and criminal forfeiture. Williams

contends that the district court erred by enhancing his sentence on t he ground that he committed

perjury at trial, and by departing upward from the sentencing guidelines based on the fraudulent

scheme’s complexity and large number of victims.

         *
        Pursuant to 5TH CIR. R. 47.5, this Court has determined that this opinion should not be
published and is not precedent except under the limited circumstances set forth in 5TH CIR. R.
47.5.4.

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                                I. FACTS AND PROCEEDINGS

       Williams was president, director, and a founding partner of CPR Medical, Inc. (“CPR”).

During his tenure with CPR, Williams induced various persons to invest in the company by issuing

a series of false statements about CPR’s low-voltage heart difibrillator, which was called the C-FIB.

Williams falsely claimed that the C-FIB was patented and ready for manufacture, that it had been

approved by the U. S. Food & Drug Administration (“FDA”), and that CPR would make an initial

public offering of its stock due to the C-FIB’s early success.

       On April 13, 2001, Williams and two fellow CPR directors were charged with 51 counts of

fraud, conspiracy to commit fraud, money laundering, conspiracy to commit money laundering, and

criminal forfeiture. Williams’s co-defendants pleaded guilty, and Williams was convicted of all counts

following a jury trial. At the sentencing hearing, the district court grouped Williams’s offenses, and

applied the base-offense level of the money laundering guideline on the ground that it was the highest

amongst the grouped offenses. See U.S.S.G. § 3D1.2 (1998). The court enhanced Williams’s offense

level by two based o n its finding that he obstructed justice by committing perjury at trial. See

U.S.S.G. § 3C1.1 (1998). The court then departed upward from the guidelines four levels on the

ground that the money laundering scheme was complex and involved a large number of victims. See

U.S.S.G. § 5K2.0 (1998). The court reasoned that the scheme required deposits into five different

accounts at separate banks, and harmed approximately 297 persons.

       Williams appeals, contending that the district court erred by enhancing his sentence based on

obstruction of justice, and by departing upward from the guidelines based on the scheme’s complexity

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and large number of victims.1

                                  II. STANDARD OF REVIEW

       “A finding of obstruction of justice under § 3C1.1 is a factual finding reviewed for clear

error.” United States v. Edwards, 303 F.3d 606, 645-46 (5th Cir. 2002). A factual finding is not

clearly erroneous if it is plausible in light of the complete record. United States v. Huerta, 182 F.3d
361, 364 (5th Cir. 1999). “[C]redibility determinations in sentencing hearings are peculiarly within

the province of the trier-of-fact.” United States v. Sotelo, 97 F.3d 782, 799 (5th Cir. 1996).

       The standard of review for sentencing departures is governed by the Prosecutorial Remedies

and Other Tools to End the Exploitation of Children Today Act of 2003 (“PROTECT Act”). Pub.

L. No. 108-21, 117 Stat. 650 (April 30, 2003). The PROTECT Act provides that this Court should

not defer to district court conclusions in our “determinations under subsection 3(A) or 3(B)” of 18

U.S.C. § 3742(e).2 Subsection 3(A) is not at issue in this appeal.3 Subsection 3(B) provides that the

court of appeals shall determine whether

       the sentence departs from the applicable guideline range based on a factor that—
               (i) does not advance the objectives set forth in section 3553(a)(2); or
               (ii) is not authorized under section 3553(b); or
               (iii) is not justified by the facts of the case; . . .

This Court in United States v. Bell, No. 03-20194, 2004 WL 1114580, at *3 (5th Cir. May 19, 2004),

       1
           Williams waived his recusal claim at oral argument.
       2
          Williams’s appeal was pending on the PROTECT Act’s enactment date. This Court
recently held that the PROTECT Act’s de novo standard of review may be applied retroactively to
cases, such as this one, where sentencing occurred prior to the Act’s effective date. See United
States v. Bell, No. 03-20194, 2004 WL 1114580, at *2 (5th Cir. May 19, 2004).
       3
          Subsection (3)(A) mandates that the court of appeals review whether “the district court
failed to provide the written statements of reasons required by section 3553(c).”

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interpreted the PROTECT Act, and held that

        we must review de novo the sentencing court’s decision to depart (under subsection
        (3)(B)), determining whether the departure is based on appropriate factors and taking
        into account the statutory provisions listed in (3)(B)(i) and (ii), the facts of the case
        under review, and the sentencing court’s application of the guidelines to those facts.

                                           III. ANALYSIS

A.      Enhancement for obstruction of justice based on perjury

        Williams first contends that the district court erred when it applied a two-level enhancement

for obstruction of justice under U.S.S.G. § 3C1.1 Section 3C1.1 provides for a two-level increase

if “the defendant willfully obstructed or impeded, or attempted to obstruct or i mpede, the

administration of justice during the course of the investigation, prosecution, or sentencing of the

instant offense.” United States v. Storm, 36 F.3d 1289, 1295 (5th Cir. 1994) (citing U.S.S.G. §

3C1.1 (1994)). “If a district court finds that a defendant has committed perjury at trial, an

enhancement is required under section 3C1.1.” Id.

        Perjury occurs when a witness (1) testifies under oath or affirmation, (2) gives false testimony

concerning a material matter, and (3) does so “with the willful intent to provide false testimony, rather

than as a result of confusion, mistake, or faulty memory.” United States v. Dunnigan, 507 U.S. 87,

94 (1993). Testimony is “material” which, “if believed, would tend to influence or affect the issue

under determination.” Storm, 36 F.3d at 1297. If the defendant objects to a sentence adjustment for

perjury, the district court must make independent findings that the defendant committed perjury. See

United States v. Como, 53 F.3d 87, 89 (5th Cir. 1995). “The finding is sufficient . . . if the court

makes a finding of an obstruction or impediment of justice that encompasses all of the factual

predicates for a finding of perjury.” Storm, 36 F.3d at 1295.

                                                   4
       At the sentencing hearing, the district court identified several specific instances of perjury by

Williams. Williams testified at trial that he was not responsible for a scrolling ticker on CPR’s

website that falsely touted the C-FIB as a patented device, and testified that he did not have a pre-

investment conversation with investor Mark Goodyear. These two instances of Williams’s testimony,

however, were directly contradicted by the testimony of government witnesses: CPR’s web designer

testified that Williams provided the website’s misleading information; and Goodyear testified that

Williams told him prior to his investment that CPR’s technology was patented, that the product had

received FDA approval, and that a public offering of CPR stock was “a done deal.” Williams’s false

testimony was material because it implicated his efforts to induce persons to invest in CPR. Further,

the record does not indicate that Williams’s controverted testimony was the result of confusion or

mistake. As a result, the district court’s two-level enhancement for obstruction of justice pursuant

to § 3C1.1 did not constitute clear error.

B.     Upward departure pursuant to § 5K2.0

       Williams next contends that the district court erred by imposing a four-level upward departure

from the applicable guideline range based on the money laundering scheme’s complexity and large

number of victims. Section 5K2.0 of the guidelines states that a district court may depart from the

applicable guideline range when it finds “‘that there exists an aggravating or mitigating circumstance

of a kind, or to a degree, not adequately taken into consideration by the Sentencing Commission in

formulating the guidelines that should result in a sentence different from that described.’” U.S.S.G.

§ 5K2.0 (1998) (quoting 18 U.S.C. § 3553(b)).

       This Court, in evaluating the propriety of a departure, must first review whether the departing

                                                  5
factor is forbidden, encouraged, discouraged, or unmentioned by the Sentencing Commission. See

Koon v. United States, 518 U.S. 81, 95 (1996); United States v. Threadgill, 172 F.3d 357, 374 (5th

Cir. 1999).

       If the special factor is a forbidden factor, the sentencing court cannot use it as a basis
       for departure. If the special factor is an encouraged factor, the court is authorized to
       depart if the applicable Guideline does not already take it into account. If the special
       factor is a discouraged factor, or an encouraged factor already taken into account by
       the applicable Guideline, the court should depart only if the factor is present to an
       exceptional degree or in some other way makes the case different from the ordinary
       case where the factor is present.

Koon, 518 U.S. at 95-96.

       It is well established that an offense’s complexity and number of victims are departing factors

that are encouraged by the Sentencing Commission. See generally U.S.S.G. § 2B2.1(b)(1) (1998)

(providing an enhancement for “more than minimal planning”); U.S.S.G. § 2F1.1(b)(2) (1998)

(describing a specific offense charact eristic for “a scheme to defraud more than one victim”).

Although the 1998 money laundering guideline does not expressly “take into account” these two

factors, the guideline does calculate harm by reference to a loss table that accounts for losses up to

$100 million. See U.S.S.G. § 2S1.1(b)(2) (1998). In United States v. Corrigan, the Sixth Circuit

held that a loss table calculating harm caused by fraud presupposed the existence of multiple victims.

128 F.3d 330, 335 (6th Cir. 1997). The court reasoned that “[i]t is inconceivable that a provision

which calculates loss levels of up to $80,000,000 would consider only one victim” and that “[a] loss

figure this great presupposes a large number of victims.” Id. Following the reasoning of the Sixth

Circuit, we hold that the 1998 money laundering guideline, which provides for losses up to $100

million, clearly presupposes that money laundering offenses are complex and involve a large number

                                                   6
of victims.

        Because the departing factors are encouraged by the Commission, but taken into account by

the applicable guideline, the court’s decision to depart is only permissible if these factors are present

in Williams’s case to an exceptional degree. This Court has found that the money laundering

guideline governs “long-running schemes far more elaborate than [an] isolated instance of money-

laundering.” United States v. Hemmingson, 157 F.3d 347, 363 (5th Cir. 1998). In United States v.

Tansley, 986 F.2d 880 (5th Cir. 1993), involving a nationwide telemarketing scheme operated by 18

principals that victimized 3,500 people for a total loss of $1.5 million, the district court elected not

to depart upward from the money laundering guideline based on the scheme’s complexity or its large

number of victims. In United States v. Peterson, 244 F.3d 385 (5th Cir. 2001), the district court did

not depart upward based on scheme complexity or number of victims even though the money

laundering enterprise lasted three years, victimized 27,000 property owners, and collected more than

$9 million for services not rendered.4 In light of these decisions, Williams’s scheme—harming 297

persons and involving deposits in five different banks—is exceptional in neither its complexity nor

its number of victims. We therefore conclude that the court erred by departing upward from the

sentencing guidelines pursuant to § 5K2.0.

                                        IV. CONCLUSION

        The district court did not clearly err by applying a sentence enhancement for obstruction of

justice based on perjury. It did, however, err by departing upward from the money laundering

        4
         In the two related cases where managers of this operation were prosecuted, there was no
indication that the district court departed from the money laundering guideline based on the
scheme’s complexity or number of victims. United States v. Reissig, 186 F.3d 617 (5th Cir.
1999).

                                                   7
guideline based on the scheme’s complexity and large number of victims. We VACATE the

sentencing order and REMAND to the district court for resentencing in accordance with this opinion.

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