Court Opinion

ID: 47543
Source: CourtListenerOpinion
Date Created: 2010-04-25 23:23:53+00
Date Added: 2024-06-11T17:18:04.105616
License: Public Domain

[DO NOT PUBLISH]

               IN THE UNITED STATES COURT OF APPEALS

                        FOR THE ELEVENTH CIRCUIT                    FILED
                          ________________________         U.S. COURT OF APPEALS
                                                             ELEVENTH CIRCUIT
                                                                 April 21, 2006
                                No. 05-11933                  THOMAS K. KAHN
                          ________________________                CLERK

                       D. C. Docket No. 03-00667-CR-1-1

UNITED STATES OF AMERICA,

                                                                  Plaintiff-Appellee,

                                     versus

JAMES RONALD DAVIS,

                                                             Defendant-Appellant.

                          ________________________

                   Appeal from the United States District Court
                      for the Northern District of Georgia
                        _________________________

                                 (April 21, 2006)

Before DUBINA, MARCUS and PRYOR, Circuit Judges.

PER CURIAM:

      James Ronald Davis appeals his sentence for inducing a person to travel in

interstate commerce in furtherance of a scheme to defraud that person. Davis
argues that the district court (1) erroneously applied a two-level enhancement for

the use of “sophisticated means” in the scheme to defraud, (2) erroneously relied

on facts that Davis did not admit when it ordered restitution in violation of United

States v. Booker, 543 U.S. 220, 125 S. Ct. 738 (2005), (3) erroneously admitted

hearsay testimony of a private investigator to describe the victims’ loss at Davis’s

sentencing hearing in violation of Crawford v. Washington, 541 U.S. 36, 124 S. Ct.

1354 (2004), and (4) erroneously applied the guidelines as advisory in violation of

the Ex Post Facto Clause. We affirm.

                                I. BACKGROUND

      In October 2000, Davis and Robert Peterson incorporated Reliant

Technologies Group, Inc. Through Reliant, Davis and Peterson sold “vending

machines called ‘Prepaid Express’ which dispensed prepaid telephone cards,

cellular telephones, and beepers” and advertised this investment opportunity on the

Rush Limbaugh radio show. In these advertisements, Reliant stated that it was

“MCI Worldcom’s exclusive U.S. marketers.” The advertisements provided a toll-

free number for prospective investors to call.

      Investors who responded using the advertised phone number spoke with

either Davis or Peterson. Davis and Peterson referred the potential investor to one

or more shills, “references” who were paid by Reliant to make false statements

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about the profits they made operating the machines. “[T]he shills were located

outside Georgia.” Prospective investors were then urged to visit Reliant’s facilities

in the Atlanta, Georgia, area at Reliant’s expense.

      The investors were sorely disappointed. They “found the machines arrived

late, and often did not work properly. The inventory sent was not what was

promised and sometimes would not dispense properly from the machines.” “Some

victims did not receive the machines and/or inventory.” An investigation ensued,

and on November 13, 2003, Davis and Peterson were indicted on forty-two counts

related to the fraud. See 18 U.S.C. § 2314.

      Each count in Davis’s indictment related to a specific victim of the fraud.

On May 26, 2004, Davis pleaded guilty to Count One of the indictment in

exchange for dismissal of the remaining charges. The plea agreement provided,

“The defendant understands that the Probation Office and the Court may still

consider the conduct underlying such dismissed counts in determining relevant

conduct under the Sentencing Guidelines.”

      The PSI applied the 2000 version of the Sentencing Guidelines and

calculated a base offense level of six. The PSI recommended an 11-level

enhancement for an amount of loss in excess of $800,000; this amount was based

on $781,243 allocated to victims included in the indictment and $123,040 allocated

                                          3
to victims for which Davis was not indicted for a total of $904,283. See U.S.S.G. §

2F1.1(b)(1)(L). The PSI also recommended a two-level enhancement because the

“scheme to defraud involved more than one victim and involved more than

minimal planning,” see id. § 2F1.1(b)(2)(B), a two-level enhancement “because the

offense was committed through mass-marketing,” see id. § 2F1.1(b)(3), a two-level

enhancement “because the offense involved ‘sophisticated means,’” see id. §

2F1.1(b)(6)(C), a two-level enhancement for violation of a judicial order, see id. §

2F1.1(b)(4)(C), and a two-level enhancement for Davis’s role as the organizer of

the scheme, see id. § 3B1.1(c). After a three-level reduction for acceptance of

responsibility, see id. §§ 3E1.1(a), (b), Davis’s total offense level was 24. With a

criminal history category of I, the guidelines range was 51 to 63 months of

imprisonment.

      At the sentencing hearing, the government presented the testimony of Robin

Martinelli, a private investigator who worked for the victims of Davis’s fraud

scheme. Martinelli sought to testify to the impact of the fraud scheme on the

victims. Davis objected to Martinelli’s testimony on the ground that it was hearsay

and not subject to cross-examination. See Crawford, 541 U.S. at 59, 124 S. Ct. at

1369. The district court overruled the objection.

                                          4
      Davis also raised several objections to the enhancements recommended in

the PSI. First, Davis contended that the amount of loss exceeded the total loss

charged in the indictment, and the government conceded that the amount of loss

should be based on only the victims for which Davis was indicted. This

concession resulted in a ten- instead of eleven-level enhancement, a total offense

level of 23, and a guidelines range of 46 to 57 months of imprisonment. Second,

Davis argued that it was a violation of the Ex Post Facto Clause of the

Constitution, U.S. Const. art. I, § 9, cl. 3, to apply the remedial holding of Booker

to allow the district court to find facts to support sentencing enhancements under

an advisory scheme. Third, Davis objected to the two-level enhancement for the

use of “sophisticated means” on two grounds: there was insufficient evidence to

support the enhancement and applying the enhancement along with the

enhancements for mass advertising and more than minimal planning would result

in “double counting.” Fourth, Davis argued that the district court could not order

restitution to victims for which he was indicted but did not plead guilty under

Apprendi v. New Jersey, 530 U.S. 466, 490, 120 S. Ct. 2348, 2362-63 (2000), and

Booker, 543 U.S. at 243-44, 125 S. Ct. at 755-56.

      The district court overruled Davis’s second and third objections and

sentenced Davis to 48 months of imprisonment. The district court also overruled

                                           5
Davis’s fourth objection and imposed restitution under the Mandatory Victim

Restitution Act in the amount of $781,243. See 28 U.S.C. § 3663A(a)(2). This

amount reflected the total loss charged in the indictment.

                          II. STANDARD OF REVIEW

      This Court reviews the factual findings of the district court for clear error,

but reviews de novo the interpretation of the sentencing guidelines. United States

v. Miranda, 348 F.3d 1322, 1330 (11th Cir. 2003). “Whether the cumulative

enhancement of a sentence under two separate guideline provisions constitutes

impermissible double counting presents a question of law reviewed de novo.”

United States v. Humber, 255 F.3d 1308, 1311 (11th Cir. 2001). This Court

reviews de novo “the scope of constitutional rights.” United States v. Cantellano,

430 F.3d 1142, 1144 (11th Cir. 2005), cert. denied, No. 05-9303, ___ U.S. ___,

___ S. Ct. ___, 2006 U.S. LEXIS 2450 (March 20, 2006).

                                III. DISCUSSION

      Davis raises four issues on appeal. First, Davis argues that the enhancement

for the use of sophisticated means was erroneous. Second, Davis argues that the

district court erroneously relied on facts not admitted by Davis in determining the

amount of restitution. Third, Davis argues that the district court erroneously

admitted Martinelli’s hearsay testimony during his sentencing hearing. Fourth,

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Davis contends the application of the remedial holding of Booker violates the Ex

Post Facto Clause because it permitted the district court to engage in judicial

factfinding to enhance his sentence. We address each argument in turn.

               A. The District Court Did Not Erroneously Enhance
               Davis’s Sentence for the Use of Sophisticated Means.

      Davis raises two arguments to challenge his enhancement for the use of

sophisticated means. First, Davis argues that the evidence does not support the

enhancement. Second, Davis contends that the enhancement constitutes double

counting because it is based on the same evidence as his enhancements for more

than minimal planning and mass advertising.

             1. The Evidence Supported Davis’s Enhancement for the
                          Use of Sophisticated Means.

      Davis argues that the district court erroneously imposed the sophisticated

means enhancement under guidelines section 2F1.1(b)(6) because there is

insufficient evidence to support it. Section 2F1.1 of the 2000 version of the United

States Sentencing Guidelines provides, “If (A) the defendant relocated, or

participated in relocating, a fraudulent scheme to another jurisdiction to evade law

enforcement or regulatory officials; (B) a substantial part of a fraudulent scheme

was committed from outside the United States; or (C) the offense otherwise

involved sophisticated means, increase by 2 levels.” U.S.S.G. § 2F1.1(b)(6)

                                          7
(2000). The commentary states, “For purposes of subsection (b)(6)(C),

‘sophisticated means’ means especially complex or especially intricate offense

conduct pertaining to the execution or concealment of an offense.” Id. cmt. 18.

The section also provides examples: “[I]n a telemarketing scheme, locating the

main office of the scheme in one jurisdiction but locating soliciting operations in

another jurisdiction would ordinarily indicate sophisticated means. Conduct such

as hiding assets or transactions, or both, through the use of fictitious entities,

corporate shells, or offshore bank accounts also ordinarily would indicate

sophisticated means.” Id. The sophisticated means enhancement is “essentially a

factual issue, which is entrusted primarily to the district court.” United States v.

Barakat, 130 F.3d 1448, 1457 (11th Cir. 1997) (interpreting the sophisticated

means enhancement under guidelines section 2T1.1(b)(2)).

       Davis’s enhancement for the use of sophisticated means is supported by the

evidence. The facilities of Reliant were in Atlanta, Georgia, but the shills operated

in other states. It is not clearly erroneous for the district court to find that the shills

were part of the “soliciting operations” and located in “another jurisdiction” than

the facilities. U.S.S.G. § 2F1.1(b)(6), cmt. 18. These facts fall directly within the

example provided in the comments. Id.

                                             8
      Despite Davis’s assertions, his offense was not a “garden variety fraud

scheme.” The scheme involved nationwide advertising, a purported exclusive

partnership with MCI/WorldCom, a toll-free number that provided phony

references to facilitate the fraud, and a plan to induce victims to travel to Georgia

to encourage them to invest. The fraud took place over a seven-month period.

Taken as a whole, these facts qualify as “especially complex or especially intricate

offense conduct pertaining to the execution or concealment of an offense.” Id.

The evidence supports Davis’s enhancement for the use of sophisticated means in

his fraud.

                   2. The Enhancement Did Not Result in Double
                                   Counting.

      Davis argues that the district court committed impermissible double

counting when it imposed the sophisticated means enhancement along with the

more than minimal planning and mass marketing enhancements. “Impermissible

double counting occurs only when one part of the Guidelines is applied to increase

a defendant’s punishment on account of a kind of harm that has already been fully

accounted for by application of another part of the Guidelines.” United States v.

Naves, 252 F.3d 1166, 1168 (11th Cir. 2001). On the other hand, “[d]ouble

counting a factor during sentencing is permitted if the Sentencing Commission []

intended that result and each guideline section in question concerns conceptually

                                           9
separate notions relating to sentencing.” United States v. Stevenson, 68 F.3d 1292,

1294 (11th Cir. 1995). “We presume that the Commission intended to apply

separate guideline sections cumulatively unless specifically directed otherwise.”

Id. Davis argues that, because “identical facts were utilized to support” the three

enhancements, the enhancements constitute double counting.

      The language of the guidelines undermines Davis’s argument. See U.S.S.G.

§ 2F1.1. The commentary to section 2F1.1 states, “The enhancement for

sophisticated means under subsection (b)(6)(C) requires conduct that is

significantly more complex or intricate than the conduct that may form the basis

for an enhancement for more than minimal planning under subsection (b)(2)(A).”

Id. cmt. 18. This statement evidences that the drafters contemplated the

application of both the more than minimal planning enhancement and the

sophisticated means enhancement. The commentary also shows that the

sophisticated means enhancement requires more evidence than the more than

minimal planning enhancement.

      The evidence supporting the sophisticated means enhancement was not

“fully accounted for” by the more than minimal planning enhancement. Naves,

252 F.3d at 1168. In particular, the use of shills in other states provides an

independent ground for the sophisticated means enhancement. See U.S.S.G. §

                                          10
2F1.1, cmt. 18. Because there is nothing in section 2F1.1 to suggest that the

guidelines sections are not to be applied cumulatively, we affirm the enhancement

for the use of sophisticated means. See Stevenson, 68 F.3d at 1294; see also

Humber, 255 F.3d at 1314 (“A defendant who uses sophisticated means will

always receive, in addition, an enhancement for more than minimal planning.”).

                 B. The District Court Did Not Err When It Determined
                               the Amount of Restitution.

         Davis argues that the district court erroneously awarded restitution based on

facts he did not admit when he pleaded guilty in violation of Apprendi, 530 U.S. at

490, 120 S. Ct. at 2362-63, and Booker, 543 U.S. at 243-44, 125 S. Ct. at 755-56.

We disagree. The district court did not err when it calculated the amount of

restitution because this Court recently held that “Booker does not apply to

restitution orders.” United States v. Williams, No. 04-15117, ___ F.3d ___, 2006

U.S. App. LEXIS 9211, *20 (April 13, 2006). Furthermore, even if Booker

applied to restitution orders, there would be no error because the facts relied upon

by the district court were contained in the PSI and Davis did not contest those

facts.

                                            11
                C. The District Court Properly Considered Martinelli’s
                                      Testimony.

       Davis argues that the district court erroneously admitted Martinelli’s hearsay

testimony at his sentencing hearing in violation of Crawford, 541 U.S. at 59, 124 S.

Ct. at 1369, but we rejected this argument in Cantellano, 430 F.3d at 1144. In

Cantellano we held, “The right to confrontation is not a sentencing right.” Id.

Because our precedents foreclose Davis’s argument and Davis does not challenge

the reliability of Martinelli’s testimony, see United States v. Zlatogur, 271 F.3d

1025, 1031 (11th Cir. 2001), we affirm the admission of Martinelli’s testimony.

                D. The Application of Booker’s Remedial Holding Does
                        Not Violate the Ex Post Facto Clause.

       Davis argues that the district court erroneously applied the remedial holding

of Booker, 543 U.S. at 259-60, 125 S. Ct. at 764-65, to permit judicial factfinding

to increase his sentence in violation of the Ex Post Facto Clause. Davis contends

that his sentence was based on evidence that he did not admit when he pleaded

guilty, although this assertion is dubious given his failure to object to the facts

contained in the PSI. Davis argues that “[t]he district court did not have the

authority to treat the federal guidelines as non-mandatory” because to allow a

sentence outside the guidelines range would violate the Ex Post Facto Clause, U.S.

Const. art. I, § 9, cl. 3.

                                           12
       Even if we assume Davis did not admit the facts relied upon by the district

court, Davis’s argument fails. See United States v. Duncan, 400 F.3d 1297, 1307-

08 (11th Cir.), cert. denied, 126 S. Ct. 432 (2005). In Duncan, this Court held that

a defendant has sufficient notice of the potential penalty for a crime based on the

statutory maximum to satisfy the Ex Post Facto Clause and the Due Process Clause

of the U.S. Constitution. Id. We affirm the use of advisory guidelines by the

district court.

                                 IV. CONCLUSION

       Davis’s sentence, including the order of restitution, is

       AFFIRMED.

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