Court Opinion

ID: 2966383
Source: CourtListenerOpinion
Date Created: 2015-09-22 00:29:05.986576+00
Date Added: 2024-06-11T11:36:39.905951
License: Public Domain

PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

UNITED STATES OF AMERICA,
Plaintiff-Appellee,

v.                                                                    No. 94-5951

JAMES BARNETT MILLER,
Defendant-Appellant.

Appeal from the United States District Court
for the Middle District of North Carolina, at Durham.
William L. Osteen, Sr., District Judge.
(CR-93-270)

Argued: December 8, 1995

Decided: March 6, 1996

Before WILKINSON, Chief Judge, and WIDENER and
HAMILTON, Circuit Judges.

_________________________________________________________________

Affirmed in part, vacated in part, and remanded for resentencing by
published opinion. Judge Hamilton wrote the opinion, in which Chief
Judge Wilkinson joined. Judge Widener wrote a separate concurring
and dissenting opinion.

_________________________________________________________________

COUNSEL

ARGUED: Gregory Davis, Assistant Federal Public Defender,
Greensboro, North Carolina, for Appellant. Michael Francis Joseph,
Assistant United States Attorney, Greensboro, North Carolina, for
Appellee. ON BRIEF: William E. Martin, Federal Public Defender,
Greensboro, North Carolina, for Appellant. Walter C. Holton, Jr.,
United States Attorney, Greensboro, North Carolina, for Appellee.

_________________________________________________________________

OPINION

HAMILTON, Circuit Judge:

James Barnett Miller (Miller) appeals his sentence following his
plea of guilty to passing and uttering a counterfeit fifty-dollar federal
reserve note, see 18 U.S.C.A. § 472 (West Supp. 1995), and possess-
ing and concealing six counterfeit fifty-dollar federal reserve notes,
see id. Among the questions this appeal raises is whether our decision
in United States v. Johnson, 48 F.3d 806, 808-09 (4th Cir. 1995),
holding that a district court lacks authority to delegate to the proba-
tion officer the final authority to determine the amount and timing of
restitutionary installment payments, without retaining ultimate author-
ity over such decisions, equally applies to fines. We hold it does.
Accordingly, we vacate the fine and restitution order imposed by the
district court. We also vacate that portion of Miller's sentence pertain-
ing to the district court's six-level enhancement of Miller's offense
level pursuant to United States Sentencing Commission, Guidelines
Manual, (USSG) § 2B5.1(b)(2) (Nov. 1994). The case is remanded
for resentencing. Finally, we affirm the district court's refusal to
reduce Miller's offense level by two levels under USSG § 3E1.1 for
acceptance of responsibility.

I.

On December 14, 1993, Miller made seven color photocopies of
both sides of a fifty-dollar United States federal reserve note at the
Kinko Copy Center in Durham, North Carolina. After noticing Mil-
ler's actions, Kinko Copy Center employees asked him to leave. Mil-
ler then used scissors to cut out the photocopied notes, gluing the
corresponding front and backsides together to create counterfeit notes.
On December 15, Miller successfully passed one of the counterfeit
notes to an employee at the Piece Goods Fabric Store in Durham. The
employee did not notice the counterfeit nature of the note until the
store closed for the day. The next day, December 16, Miller unsuc-

                     2
cessfully attempted to pass the remaining six counterfeit notes at five
Durham businesses, and as a result, the police received numerous
telephone calls from those merchants reporting that an individual had
attempted to pass counterfeit fifty-dollar federal reserve notes at their
respective businesses. The Piece Goods Fabric Store also reported
Miller's successful passing of a fifty-dollar counterfeit note.

Upon investigation, the police obtained video surveillance tapes
from two of the Durham businesses showing Miller attempting to pass
the counterfeit notes. The police promptly arrested Miller and found
six counterfeit fifty-dollar federal reserve notes in his possession. The
Kinko Copy Center employees positively identified Miller as the per-
son who attempted to copy the notes on the color copy machine, and
the Piece Goods Fabric Store employee positively identified Miller as
the person who passed the counterfeit note at the store. A search of
the hotel room in which Miller was staying at the time revealed mate-
rials used for counterfeiting the notes: glue, scissors, paper, and green
ink.

As a result of Miller's activities during December 14 through
December 16, Miller was indicted on one count of unlawfully making
a counterfeit fifty-dollar federal reserve note (Count I), see 18
U.S.C.A. § 474 (West Supp. 1995); one count of passing and uttering
a counterfeit fifty-dollar federal reserve note, see 18 U.S.C.A. § 472
(Count II); and one count of possessing and concealing six counterfeit
fifty-dollar federal reserve notes (Count III), see id. After entering
into a written plea agreement with the government, Miller pleaded
guilty on April 7, 1994 to Counts II and III of the indictment in
exchange for the dismissal of Count I. The district court then released
Miller from formal custody and put him under pre-trial supervision
pending his sentencing hearing set for August 25, 1994. Sometime
between his release from formal custody and his scheduled sentencing
hearing, Miller fled to Florida, and thus failed to appear at the sen-
tencing hearing. Miller was subsequently apprehended in Florida and
returned to North Carolina for sentencing on December 6, 1994.

Adopting the factual findings and sentencing guidelines application
of the presentence report (PSR), the district court initially calculated
Miller's total offense level at seventeen and his criminal history cate-
gory at six. In reaching the offense level calculation, the district court

                     3
first grouped counts two and three together pursuant to USSG
§ 3D1.2(d). Then, beginning with a base offense level of nine, see
USSG § 2B5.1(a), the district court added six levels based on its find-
ings that Miller had produced counterfeit notes and/or possessed
materials used for counterfeiting, see USSG§ 2B5.1(b)(2). Finally,
the district court added two levels for Miller's obstruction of justice
by fleeing to Florida while on pre-trial supervision and failing to
appear at his originally scheduled sentencing hearing, see USSG
§ 3C1.1. The district court refused to give Miller a two-level reduc-
tion for acceptance of responsibility, see USSG 3E1.1, because it con-
cluded that his flight to Florida evidenced his refusal to accept
responsibility for his instant crimes.

The district court's calculations having thus far resulted in a sen-
tencing range of fifty-one to sixty-three months' imprisonment, the
district court concluded the sentencing range did not reflect the seri-
ousness of Miller's past criminal conduct. Therefore, the district court
departed upward three-levels to offense level twenty, resulting in a
sentencing range of seventy to eighty-seven months' imprisonment.
Under this range, the district court sentenced Miller to seventy-eight
months' imprisonment and three years' supervised release.

Next, the district court ordered Miller to pay a $3,000 fine and
fifty-dollars restitution to the Piece Goods Fabric Store under the
Inmate Financial Responsibility Program, see 28 C.F.R. § 545.10-
545.11 (1994). In both its oral pronouncement and written judgment,
the district court ordered that Miller make payments toward the
$3,000 fine and the fifty-dollar restitution at such times and in such
amounts as the Bureau of Prisons and/or the Probation Office may
direct.

Miller noted a timely appeal of his sentence, contending the district
court erred: (1) in failing to award him a two-level reduction in his
base offense level for acceptance of responsibility under USSG
§ 3E1.1; (2) in increasing his base offense level by six levels under
USSG § 2B5.1(b)(2) for producing counterfeit notes and possessing
materials used for counterfeiting; and (3) in delegating to the Bureau
of Prisons and/or the probation officer the determination of the timing
and amount of his installment payments for the fine and order of resti-
tution. We address each assignment of error in turn.

                    4
II.

First, Miller contends the district court erred by refusing to reduce
his offense level by two levels under USSG § 3E1.1 for acceptance
of responsibility. He concedes that in most cases where a defendant
has received an enhancement for obstruction of justice, see USSG
§ 3C1.1, the defendant will not be entitled to a reduction for accep-
tance of responsibility, see USSG § 3E1.1, comment. (n.4). He never-
theless argues that his is an extraordinary case in which both
adjustments may apply. The district court's decision whether to grant
a two-level reduction for acceptance of responsibility is a factual
determination that we review for clear error. See United States v.
Castner, 50 F.3d 1267, 1279 (4th Cir. 1995). The district court's deci-
sion is not clearly erroneous.

USSG § 3E1.1 provides a two-level reduction in offense level "[i]f
a defendant clearly demonstrates acceptance of responsibility for his
offense." Application Note 4 provides that "conduct resulting in an
enhancement under § 3C1.1 (obstructing or impeding the administra-
tion of justice) ordinarily indicates that the defendant has not accepted
responsibility for his criminal conduct. There may, however, be
extraordinary cases in which adjustments under both§§ 3C1.1 and
3E1.1 apply."

At Miller's sentencing, the district court made several underlying
factual findings before ultimately finding Miller had not clearly dem-
onstrated acceptance of responsibility. First, the district court found
Miller had willfully and intentionally absented himself from pre-trial
supervision and sentencing. Next, the district court found Miller had
not reported to his probation officer as required, but instead, tele-
phoned the Assistant United States Attorney and stated that he was
going to South America. Based on these findings, the district court
concluded that "there was clearly a demonstration of [Miller's] failure
to accept the responsibility of his activities . . .." (J.A. 38-39).

Here, Miller urges us to excuse his conduct resulting in his
enhancement for obstruction of justice, see USSG § 3C1.1, based on
his assertion that he fled out of fear for his life. 1 Miller then argues
_________________________________________________________________
1 The record reflects that on February 23, 1994, while Miller was in
custody for a psychological evaluation to determine his mental compe-

                    5
that absent his flight, he would be entitled to the reduction for accep-
tance of responsibility because he pleaded guilty and truthfully admit-
ted the conduct composing his offenses of conviction. See USSG
§ 3E1.1, comment. (n.3).

Accepting as true, for purposes of this appeal, Miller's statement
that he fled out of fear for his life, such fear does not excuse Miller's
conduct. As the district court aptly noted, Miller had other options
besides flight that would not have violated the terms of his pre-trial
supervision and would have allowed him to attend his first scheduled
sentencing hearing. For example, Miller could have disclosed the
threatening letter to his probation officer, a member of the Secret Ser-
vice, or a member of the local police department, who could have
ensured that Miller received appropriate protection. Instead, Miller
fled North Carolina to Florida.

Furthermore, once in Florida, Miller's behavior strongly evidenced
his refusal to accept responsibility for his criminal conduct. Miller
only returned to the court's jurisdiction upon arrest by Tampa, Florida
police officers, who were "summoned by Barnett Bank security offi-
cers because of a complaint that [Miller] was attempting a check
scam." (J.A. 84). Like his conduct resulting in his instant convictions,
Miller's attempt at a check scam involved his intent to fraudulently
obtain money from businesses. Such behavior belies any notion that
he had accepted responsibility for his counterfeiting crimes. See
United States v. Reed, 951 F.2d 97, 99-100 (6th Cir. 1991) (defen-
dant's credit card fraud while awaiting sentencing for conviction of
credit card fraud evidenced his refusal to accept responsibility), cert.
denied, 503 U.S. 996 (1992).
_________________________________________________________________

tency to stand trial for the instant offenses, a fellow pre-trial detainee
stabbed Miller twenty times. As a result, Miller underwent medical treat-
ment and hospitalization. The pre-trial detainee was criminally charged
for his actions and Miller was scheduled to testify against him. Prior to
Miller's release on pre-trial supervision, Miller received a threatening
letter from his assailant. Although the letter does not appear in the
record, the record indicates the district court examined the letter before
making its determination on this issue.

                     6
In sum, we do not believe Miller's case is one of those extraordi-
nary cases warranting both adjustments for obstruction of justice and
acceptance of responsibility. The district court's finding that Miller
failed to demonstrate clearly his acceptance of responsibility is not
clearly erroneous. Accordingly, we affirm the district court's refusal
to grant a reduction for acceptance of responsibility.

III.

Next, Miller contends the district court erroneously increased his
base offense level by six levels pursuant to USSG§ 2B5.1(b)(2). We
agree.

To the extent Miller's assertion of error involves a challenge to the
district court's interpretation of USSG § 2B5.1, we apply a de novo
standard of review. See United States v. Daughtrey, 874 F.2d 213,
217 (4th Cir. 1989). To the extent Miller's assertion of error chal-
lenges the district court's factual findings, we apply the clearly erro-
neous standard of review. See id.

The guideline applicable to counterfeiting violations is USSG
§ 2B5.1. The base offense level under USSG§ 2B5.1 is nine. USSG
§ 2B5.1(a). USSG § 2B5.1(b)(2) provides a six-level enhancement to
the base offense level of nine if "the defendant manufactured or pro-
duced any counterfeit obligation or security of the United States, or
possessed or had custody of or control over a counterfeiting device or
materials used for counterfeiting, and the offense level as determined
[in USSG § 2B5.1(b)(1)] is less than 15." USSG § 2B5.1(b)(2). The
purpose of this enhancement is to provide harsher sentences for indi-
viduals who possess counterfeiting devices and produce, rather than
merely pass, counterfeit obligations:

          Possession of counterfeiting devices to copy obligations
          . . . of the United States is treated as an aggravated form of
          counterfeiting because of the sophistication and planning
          involved in manufacturing counterfeit obligations and the
          public policy interest in protecting the integrity of govern-
          ment obligations. Similarly, an enhancement is provided for
          a defendant who produces, rather than merely passes, the
          counterfeit items.

                     7
USSG § 2B5.1, comment. (backg'd.). However, the Commentary to
USSG § 2B5.1 is clear that the subsection (b)(2) enhancement does
not apply to individuals "who merely photocopy notes or otherwise
produce items that are so obviously counterfeit that they are unlikely
to be accepted even if subjected to only minimal scrutiny." USSG
§ 2B5.1, comment. (n.3). Despite the use of the conjunction "or,"
courts have interpreted Application Note Three to"exclud[e] from
subsection (b)(2) those defendants who produce notes, by photocopy-
ing or other means, that `are so obviously counterfeit that they are
unlikely to be accepted even if subjected to only minimal scrutiny.'"
United States v. Bruning, 914 F.2d 212, 213 (10th Cir.), cert. denied,
498 U.S. 990 (1990); see also United States v. Stanley, 23 F.3d 1084,
1086 (6th Cir. 1994); United States v. Taylor , 991 F.2d 533, 535 (9th
Cir.), cert. denied, 114 S. Ct. 170 (1993). To read this Application
Note as excluding from subsection (b)(2) all persons who produce
counterfeit notes by photocopying "would protect even the most suc-
cessful counterfeiters from the enhanced penalties of subsection (b)(2)
based solely on the method of production, photocopying." Bruning,
914 F.2d at 213.

From these principles, we discern two steps for the district court to
undertake when determining the applicability of subsection (b)(2).
First, the district court should determine whether the defendant "man-
ufactured or produced any counterfeit obligation or security of the
United States, or possessed or had custody of or control over a coun-
terfeiting device or materials used for counterfeiting." USSG
§ 2B5.1(b)(2). If the answer to this question is no, the enhancement
does not apply; if the answer is yes, the district court should then
determine whether the notes "are so obviously counterfeit that they
are unlikely to be accepted even if subjected to only minimal scru-
tiny." USSG § 2B5.1, comment. (n.3). This latter determination obvi-
ously turns on the quality of the notes as counterfeit notes. Several
factors are extremely valuable in assessing the quality of the notes as
counterfeit notes. They include: (1) physical inspection during the
trial or at the sentencing hearing; (2) whether the counterfeit notes
were successfully passed; (3) the number of counterfeit notes success-
fully passed; (4) the proportion of the number of counterfeit notes
successfully passed to the number of notes attempted to be passed;
and (5) the testimony of a lay witness who accepted one or more of
the counterfeit notes or an expert witness who testifies as to the qual-

                    8
ity of the counterfeit notes. No one factor is dispositive. And we do
not believe a far-reaching inquiry is necessary. What is necessary is
a common sense judgment on the quality of the counterfeit notes at
issue. To assist appellate review, the district court should state its rea-
sons for granting or denying the enhancement on the record.

In this case, the evidence in the record sufficiently supports the dis-
trict court's finding that Miller had manufactured counterfeit obliga-
tions of the United States and possessed materials used for
counterfeiting. Specifically, the record shows that Miller had manu-
factured seven counterfeit obligations of the United States by photo-
copying the front and backside of a United States federal reserve note,
cutting out the photocopies, and gluing the corresponding front and
backsides together. The record also shows that Miller had possessed
the following materials used in counterfeiting: glue, scissors, paper,
and green ink. This evidence is sufficient to support the district
court's finding as to the first step.

Whether the notes "are so obviously counterfeit that they are
unlikely to be accepted even if subjected to only minimal scrutiny,"
USSG § 2B5.1, comment. (n.3), is another matter. Based solely on
Miller's success in passing one of the counterfeit notes, the district
court, without physically inspecting or viewing any of the seven
counterfeit notes, found that the counterfeit notes were not so obvi-
ously counterfeit that they were unlikely to be accepted even if sub-
jected to only minimal scrutiny.

Miller points to two facts in support of his argument that the dis-
trict court's finding is clearly erroneous. First, and foremost, he points
to the poor quality of the notes. Second, he points to the fact that,
while he tried to pass others, only one note in seven was passed.

At this point, we are reluctant to review the district court's finding
because, under the circumstances of this case, we consider it prudent
for the district court to have conducted a physical inspection of the
counterfeit notes involved or to have taken testimony regarding their
quality. This case is materially different from other cases in which
appellate courts have upheld the same factual finding without the dis-
trict court having physically inspected the counterfeit notes or taken
testimony regarding their quality. For example, in Stanley, 23 F.3d at

                     9
1086, the defendant and a co-defendant had successfully passed "a
substantial number" of counterfeit notes. See also United States v.
Gaither, 1 F.3d 1040, 1044 (10th Cir. 1993) (thirty-three counterfeit
notes passed). In such a case, the role of physical inspection or testi-
mony is much less important because the large number of the counter-
feit notes passed gives strong indicia that the notes were not so
obviously counterfeit that they were unlikely to be accepted even if
subjected to only minimal scrutiny. In contrast to Stanley and Gaither,
here, only one note in seven was successfully passed. And we believe
this fact alone is not sufficient to warrant the enhancement. However,
the district court did not have the benefit of the aforementioned analy-
sis. Under such circumstances, we believe the prudent course is to
vacate the enhancement and remand the case to the district court to
allow the district court to revisit the issue with the guidance set forth
herein.2 Any finding made by the district court upon remand will be
subject to a clearly erroneous standard of review.

IV.

Lastly, Miller contends the district court's delegation of its author-
ity to establish the installment amount and timing of his fine and resti-
tution payments to the Federal Bureau of Prisons and/or the United
_________________________________________________________________
2 We find no merit to Miller's argument that the subsection (b)(2)
enhancement was inappropriate due to the dollar amount involved ($350)
and the level of sophistication of the counterfeiting materials that Miller
possessed (glue, scissors, paper, and green ink). The Background Note
to USSG § 2B5.1 makes clear that the Sentencing Commission intends
the sentencing enhancement under USSG § 2B5.1(b)(2) to apply to a
defendant who, rather than merely passing a counterfeit note, either pos-
sesses a counterfeiting device or materials used for counterfeiting or pro-
duces a counterfeit note. Under this explanation, we see no basis to
support Miller's argument that the enhancement should not apply in his
case due to the counterfeiting materials he possessed or the dollar
amount of counterfeit notes involved. To accept Miller's argument would
limit application of the subsection (b)(2) enhancement to a monetary
minimum and to a level of sophistication of the counterfeiting materials
possessed that the language of USSG § 2B5.1 and its accompanying
commentary do not provide. Here, Miller meets both alternative bases
provided in the Background Note: he possessed materials used for pro-
ducing counterfeit notes and did in fact produce counterfeit notes.

                     10
States probation officer was error that requires us to vacate his sen-
tence and remand for resentencing. We agree.

In United States v. Johnson, 48 F.3d 806, 808-09 (4th Cir. 1995),
we held that a district court lacks authority to delegate to the proba-
tion officer the final authority to determine the amount of restitution-
ary installment payments, without retaining ultimate authority over
such decisions. Ultimate authority can be retained by requiring the
probation officer to recommend restitutionary decisions for approval
by the court. Id. at 809. We reasoned that the statutory duty imposed
upon district courts under 18 U.S.C.A. § 3663(f)(1) (West Supp.
1995) "to fix the terms of restitution must be read as exclusive
because the imposition of a sentence, including any terms for proba-
tion or supervised release, is a core judicial function." Id. at 808. We
recognized that courts may use nonjudicial officers, such as probation
officers, to support judicial functions, as long as a judicial officer
retains and exercises ultimate responsibility.3

Although Johnson involved the district court's delegation of
authority to set the amount and timing of restitutionary installment
payments, its reasoning equally applies when the delegation involves
a fine. Title 18 U.S.C.A. § 3572(d) (West Supp. 1995) provides that
a "person sentenced to pay a fine or other monetary penalty shall
make such payment immediately, unless, in the interest of justice, the
court provides for payment on a date certain or in installments." This
section as well as § 3663(f)(1), setting forth the district court's statu-
tory duty to fix the terms of restitution, both impose upon the "court"
the responsibility for determining installment payments. Like restitu-
tion, the statutory duty imposed upon district courts to fix the terms
of a fine must be read as exclusive because the imposition of a sen-
tence, including the terms of probation or supervised release, is a core
judicial function. Accordingly, we hold a district court may not dele-
gate its authority to set the amount and timing of fine payments to the
Bureau of Prisons or the probation officer. See United States v.
Kassar, 47 F.3d 562, 568 (2d Cir. 1995) (holding that a district court
may not delegate its responsibility under 18 U.S.C.A. § 3572 for
determining installment payments with regard to a fine).
_________________________________________________________________
3 We recognize that the district court did not have the benefit of
Johnson when Miller was sentenced.

                     11
Applying our holding here, we conclude the district court errone-
ously delegated its authority to set the amount and timing of Miller's
fine and restitution payments to the Bureau of Prisons and/or the pro-
bation officer, without retaining ultimate authority over such deci-
sions. Therefore, the portion of Miller's sentence relating to the fine
and restitution must be vacated.

V.

In conclusion, we affirm the district court's refusal to reduce Mil-
ler's offense level for acceptance of responsibility, see 3E1.1., but
vacate Miller's sentence with respect to the six-level enhancement
under USSG § 2B5.1(b)(2) and the district court's delegation of the
determination of the amount and timing of Miller's restitution and
fine payments to the Bureau of Prisons and/or the probation officer.
On both these last issues, we remand the case for resentencing.

AFFIRMED IN PART, VACATED IN PART, AND REMANDED
FOR RESENTENCING

WIDENER, Circuit Judge, concurring and dissenting:

I concur in all of the opinion of the majority except Part III.

As to part III, I do not agree with its implicit conclusion as clearly
erroneous the finding of the district court that the counterfeit notes
were not so obviously counterfeit that they were unlikely to be
accepted even if subjected to only minimal scrutiny. As to that con-
clusion, I respectfully dissent. I would affirm.

                     12