Court Opinion

ID: 73048
Source: CourtListenerOpinion
Date Created: 2010-04-26 07:53:26+00
Date Added: 2024-06-11T12:09:47.213823
License: Public Domain

[PUBLISH]

                 IN THE UNITED STATES COURT OF APPEALS

                         FOR THE ELEVENTH CIRCUIT

                            ________________________

                                   No. 97-8613
                            ________________________

                      D. C. Docket No. 2:96-CR-019-01-WCO

UNITED STATES OF AMERICA,

                                                                      Plaintiff-Appellee,

                                       versus

CLAUDE A. BLANC, JR.,

                                                                    Defendant-Appellant.

                            ________________________

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

                                   (July 14, 1998)

Before DUBINA and MARCUS, Circuit Judges, and PROPST*, Senior District Judge.

_____________________
*Honorable Robert B. Propst, Senior U.S. District Judge for the Northern District of
Alabama, sitting by designation.

MARCUS, Circuit Judge:
       Defendant-appellant Claude Blanc appeals the sentence imposed by the district court

in this criminal fraud case. Blanc claims that the district court erred in concluding that a

fraud charged in an earlier case for which Blanc is currently incarcerated did not constitute

relevant conduct under section 5G1.3 of the Sentencing Guidelines for purposes of

sentencing Blanc in the instant case. Consequently, Blanc argues, his sixty-month sentence

in this case should have been imposed to run concurrently with, rather than consecutively to,

the federal prison sentence imposed in the earlier fraud case, and we should vacate the

sentence and remand with instructions to sentence defendant to a term concurrent with the

undischarged portion of the sentence he is currently serving. Because we conclude that the

fraud charges in each case related to discrete, separate, and wholly identifiable crimes, the

district court properly found that the earlier fraud was not relevant conduct under section

5G1.3 of the Sentencing Guidelines, and we reject Blanc’s claim and affirm the district court.

                                              I.

       Although the record reflects that Blanc has engaged in numerous fraudulent schemes,

this appeal is concerned with only two: National Nurseries, Incorporated (“NNI”), the

instant case, and Crystal Clear Corporation (“CCC”), a previous fraud.            A detailed

explication of these distinct frauds is necessary to our analysis.

A.     Crystal Clear Corporation

       In the earlier scheme, the bulk of which occurred in 1989, Blanc, along with co-

conspirators James Plagman and Donald Ingram, solicited investors through newspaper

advertisements and toll-free telephone numbers to purchase and install bottled-water-vending

                                             -2-
machines. They told potential investors that CCC had hundreds of contracts, including one

with 7-Eleven stores, to install and maintain water machines. Blanc and his co-conspirators

promised investors that they would receive their choice of either a guaranteed monthly

amount or a percentage of the profits. CCC did not install or operate the vending machines,

but provided investors with false documentation and sometimes with “lulling checks” to give

them a false sense of security. Other than these “lulling checks,” CCC did not pay the

investors any return. The United States charged Blanc for his conduct in the CCC scheme

in 1994 in the Northern District of Georgia (“CCC Case”), and on August 9, 1995, Blanc

entered into a negotiated plea of guilty to one count of conspiracy to commit wire and mail

fraud. Although the Sentencing Guidelines suggested a significantly longer sentence, Blanc

was sentenced to the statutory maximum of sixty months in prison. The record in the case

under review suggests that the district court in the CCC Case did not consider Blanc’s

conduct in the NNI scheme when it sentenced him to sixty months in jail. Indeed, the

government was still investigating the facts relating to the NNI scheme when the district

court in the CCC Case sentenced Blanc in that matter.

B.     National Nurseries, Incorporated

       Between 1993 and 1994, Blanc participated in the NNI fraud which gives rise to the

instant appeal. NNI, which was incorporated on July 6, 1993, and engaged in the business

of marketing and selling greenhouse opportunities, advertised in newspapers throughout

South Carolina, North Carolina, Florida and Georgia. The advertisements read substantially

as follows:

                                           -3-
                       GREENHOUSE FOR FUN AND PROFIT

                     Grow house plans for major accounts such as Home
              Depot, K-Mart, Roses, etc. You need a minimum 12' x 16' yard
              for custom designed state of the art Greenhouse. Everything
              from delivery, installation and services of a certified
              horticulturist included. You don’t need a “green thumb” but
              must be able to follow instructions. You need approximately 2
              hours per day to care for the plants. POTENTIAL $1,800 to
              $5,300 PER MONTH by contract with wholesale buyer. You
              need $16,800 to $28,000 to start. 800-362-7299.

Potential investors who called the 800 number listed in the advertisement were told that the

company was National Nurseries, Incorporated.

       NNI scheduled appointments for the potential investors with various salesmen.

Ultimately, the investors met Blanc and co-defendant James Robertson. Robertson

represented himself as the president and an owner of NNI, and Blanc portrayed himself as

an independent grower, telling investors that he had recouped his investment within seven

months of purchasing his first greenhouse and was planning to buy a second greenhouse.

During these meetings, Blanc and Robertson reaffirmed the representations of the

advertisements, claiming that the business had accounts with the specified department stores.

Additionally, Blanc and Robertson told potential investors that they had sold greenhouses

to other investors who had already become successful growers making a lot of money.

       The potential investors also received a tour by Robertson, which included viewing

operating greenhouses, meeting with Blanc (introduced as “Mr. B”), and taking a trip to meet

with Tommy Stowers of Amicalola Florist and Landscaping, who represented himself to be

one of the buyers of the plants, with a greenhouse to tour. Stowers later attested that

                                            -4-
Robertson and Blanc had offered him $1,000 commission for greenhouses sold to the tour

groups that visited his place of business. Stowers also explained that Robertson and Blanc

had represented that they would actually give Stowers the money to pay for the plants if

Stowers would simply tell the people that he was the buyer of the plants.

      With the cost averaging $28,000, the investors purchased greenhouse business

opportunities from NNI and signed grower/buyer agreements with Amicalola Landscaping.

NNI subsequently built the greenhouses, which were purported to be “state of the art.” In

reality, however, the design of the greenhouses did not provide adequate light, space, and

ventilation to grow the number of plants necessary to generate $1,800 per month.

      NNI provided the investors with plugs and planting soils and assisted them in setting

up the greenhouses. After the growing cycle was completed and the plants were ready, the

investors contacted NNI to pick up the plants. Amicalola Florist and Landscaping, which

held the grower/buyer contract, filed for bankruptcy in December 1993 and went out of

business, leaving the contracts for buying the plants void. At that time, Blanc started C &

S Landscaping, Incorporated, which represented itself to be a wholesale buyer of plants

grown by investors who had purchased greenhouses from NNI. C & S purchased only very

few plants before Blanc began telling investors that he had to divert resources from C & S

to defend against legal procedures taken by the Attorney General of Georgia and therefore

had to cease operating C & S. The funds used to create C & S and to purchase the limited

number of plants that were actually picked up were transferred to C & S from the NNI bank

account.

                                           -5-
       To facilitate the commission of the NNI fraud, Blanc and Robertson employed the

United States mail and interstate telephone calls between Georgia and North Carolina, South

Carolina, and Florida. The entire conspiracy involved eighty-four victims who invested a

total of $1,865,267.

       Blanc and the others were indicted in the Northern District of Georgia in an eighty-

four-count indictment. Count one of the indictment charged Blanc with conspiracy in

violation of 18 U.S.C. §371. The remaining counts charged Blanc with wire fraud, mail

fraud, money laundering, perjury, and contempt. Blanc pled guilty to count one. Among

other aspects of the plea agreement, it provided as follows:

                    The government agrees to take no position regarding the
              defendant’s request that the sentence in the instant case be run
              concurrently with the remainder of the unexpired term of
              imprisonment imposed upon defendant in United States of
              America v. Claude Blanc, Case No. 1:94-CR-383-01 on
              November 28, 1995, pursuant to U.S.S.G. 5G1.3(c) and
              commentary.

                      The government stipulates that it was aware of and had
              an open investigation on defendant Claude Blanc for his
              involvement in the criminal activities of National Nurseries, Inc.
              at the time of defendant’s prosecution and sentencing in United
              States of America v. Claude Blanc, Case No. 1:94-CR-383-01
              and that it may have been possible to consolidate both the
              instant offense and Case No. 1:94-CR-383-01 for prosecution
              and sentencing.

       The Sentencing Guidelines defined Blanc’s offense level as 35, his criminal history

category as III, and his sentencing range as 97-121 months. In determining Blanc’s sentence,

the district court rejected Blanc’s argument that the CCC scheme constituted “relevant

                                            -6-
conduct” under section 5G1.3 of the Sentencing Guidelines for purposes of sentencing in the

instant case and sentenced Blanc on the NNI conduct to the statutory maximum period of

incarceration of sixty months to run consecutively to the term of imprisonment imposed in

the CCC Case.

                                                II.

       We review the sentencing court’s findings of fact for clear error and review the

application of the Sentencing Guidelines to the facts de novo. United States v. Exarhos, 135

F.3d 723, 729-30 (11th Cir. 1998) (citing United States v. Williams, 51 F.3d 1004, 1011 (11th

Cir.), cert. denied, 516 U.S. 900 (1995)). Therefore, the district court’s factual findings

regarding whether the two convictions at issue in this sentencing involved the same course

of conduct or were part of a common scheme or plan, thus requiring that they be considered

together as “relevant conduct,” will be reversed only if the determination is clearly erroneous.

United States v. Maxwell, 34 F.3d 1006, 1011 (11th Cir. 1994).

       The gravamen of Blanc’s claim is that the Sentencing Guidelines required the district

court to sentence him for the NNI scheme to a term of prison to run concurrently with the

prison term to which he was sentenced in the earlier CCC matter. In support of this

contention, Blanc first directs the Court to section 5G1.3 of the Sentencing Guidelines,

which, in relevant part, provides as follows:

              (a)     If the instant offense was committed while the defendant
                      was serving a term of imprisonment (including work
                      release, furlough, or escape status) or after sentencing
                      for, but before commencing service of, such term of
                      imprisonment, the sentence for the instant offense shall

                                             -7-
                     be imposed to run consecutively to the undischarged
                     term of imprisonment.

              (b)    If subsection (a) does not apply, and the undischarged
                     term of imprisonment resulted from offense(s) that have
                     been fully taken into account in the determination of the
                     offense level for the instant offense, the sentence for the
                     instant offense shall be imposed to run concurrently to
                     the undischarged term of imprisonment.

              (c)    (Policy Statement) In any other case, the sentence for the
                     instant offense may be imposed to run concurrently,
                     partially concurrently, or consecutively to the prior
                     undischarged term of imprisonment to achieve a
                     reasonable punishment for the instant offense.

U.S. Sentencing Guidelines Manual §5G1.3.

       The parties agree that subsection (a) does not pertain to this case. They quarrel,

however, over whether subsection (b) or (c) applies here. Blanc contends that subsection (b)

applies. Specifically, he claims that the district court was required to consider Blanc’s

conduct in the CCC Case in determining the appropriate offense level in the instant case

because, according to Blanc, his CCC activities constituted “relevant conduct” that was

required to be “fully taken into account” in the case under review. Because the district court

was required to take Blanc’s CCC activities fully into account when determining Blanc’s

offense level, Blanc argues, the sentence Blanc received in the instant case must run

concurrently with the sentence he received in the CCC case.

       This Court has previously held that in determining what conduct must be “fully taken

into account” for purposes of performing the section 5G1.3(b) analysis, we must decide what

criminal activity section 1B1.3 treats as “relevant conduct.” United States v. Fuentes, 107

                                            -8-
F.3d 1515, 1521-22 (11th Cir. 1997). Activity that meets the definition of “relevant conduct”

under section 1B1.3 must be “fully taken into account” when determining whether section

5G1.3(b) applies, regardless of whether the district court actually considered the activity

when it calculated the base level. Id.

       Section 1B1.3(a), in turn, defines four categories of “relevant conduct,” only one of

which Blanc claims applies here. Specifically, Blanc notes that section 1B1.3(a)(2) deems

all acts and omissions “that were part of the same course of conduct or similar common

scheme or plan as the offense of conviction” to be “relevant conduct.” Offenses form the

same course of conduct “if they are sufficiently connected or related to each other as to

warrant the conclusion that they are part of a single episode, spree, or ongoing series of

offenses.” U.S. Sentencing Guidelines Manual §1B1.3, cmt. (n.9(b)). Where one of these

factors is absent, “a stronger presence of at least one of the other factors is required.” Id.

Similarly, offenses qualify as a common scheme or plan if they are “substantially connected

to each other by at least one common factor, such as common victims, common accomplices,

common purpose, or similar modus operandi.” U.S. Sentencing Guidelines Manual §1B1.3,

Application Note 9(A). In determining whether two or more offenses meet these tests, the

sentencing court should consider “‘the degree of similarity of the offenses, the regularity

(repetitions) of the offenses, and the time interval between the offenses.’” Fuentes, 107 F.3d

at 1525 (quoting U.S. Sentencing Guidelines Manual §1B1.3, cmt. (n.9(b)) & citing

Maxwell, 34 F.3d at 1011).

                                            -9-
       As this Court has previously held, section 1B1.3 “is designed to take account of a

‘pattern of misconduct that cannot readily be broken into discrete identifiable units that are

meaningful for purposes of sentencing.’ Thus, ‘when illegal conduct does exist in “discrete,

identifiable units” apart from the offense of conviction, the Guidelines anticipate a separate

charge for such conduct.’” Maxwell, 34 F.3d at 1010-11 (quoting U.S. Sentencing Guidelines

Manual §1B1.3, cmt. (backg’d) & citing United States v. Hahn, 960 F.2d 903, 909 (9th Cir.

1992), United States v. Sykes, 7 F.3d 1331, 1335 (7th Cir. 1993), & United States v. Mullins,

971 F.2d 1138, 1143 (4th Cir. 1992)).

       Blanc argues that application of these principles to the facts before the Court demands

a finding that the CCC activity constituted “relevant conduct” in sentencing in the instant

case, and thus, the district court was required to take the CCC conduct fully into account and

to sentence Blanc to concurrent prison terms. He contends that this case is materially

indistinguishable from Fuentes. We disagree. In Fuentes, the defendant pled guilty to

conspiring to run a “chop shop” operation. Basically, he stole Porsches, took them to several

locations, removed many of their parts, altered or removed the vehicle identification

numbers, and resold the parts to customers throughout the country. Before the federal

prosecution, Fuentes had been convicted in state court for some of this activity, and at the

time of his conviction in the district court, he was serving two concurrent state sentences.

With respect to the acts charged in state court, Fuentes took the Porsches to a shed or to his

friend’s house to disassemble (“chop”) them. As for the federal case, Fuentes took the

Porsches to a warehouse to chop them. In providing the probation officer with information

                                            -10-
for the pre-sentencing report, the government did not include information relating to any of

the activity underlying the state charges. As a result, the district court did not consider the

state-convicted crimes in determining the sentence, and the district court imposed the federal

sentence to run consecutively to the state sentence. Fuentes appealed, claiming that the

district court was required to take the state-convicted activities into consideration when “fully

. . . account[ing]” for the offense level, and thus, the district court was required to make the

federal sentence run concurrently with the state sentence.

       This Court agreed. Among other conclusions, we found that the state and federal

Porsche-chopping formed an ongoing series of offenses and qualified as the same course of

conduct. Id. Both the state and federal offenses were “very similar, if not identical.” Id. at

1525. They were committed with “clear regularity and within a very close time period.” Id.

Additionally, the Court concluded that the offenses were part of a common scheme because

they shared the same purpose and a common modus operandi. Id. Specifically, we

concluded that the shared purpose was to “mak[e] money by selling stolen Porsche parts to

co-conspirators and bona fide purchasers.” Id. Although the Court noted that the offenses

involved different Porsches, different victims, and different chop shop locations, we

nonetheless found that the differences between the offenses were “dwarfed by the

similarities.” Id. at 1526.

       We find the case at hand entirely distinguishable from Fuentes. Unlike the conduct

at issue in the current case, Fuentes’s Porsche-chopping activity could not be reduced to

smaller, identifiable, discrete units of criminal conduct. Indeed, it is simply not possible to

                                             -11-
dissect the stealing and chopping of Porsches occurring over the same period into

meaningful, entirely separate and distinct subparts for purposes of determining “relevant

conduct” when sentencing. In other words, the conduct at issue in Fuentes was basically

fungible; one incident of Fuentes’s Porsche stealing and chopping was more or less identical

to any other occurrence. Indeed, one who did not know the various victims, times, and

locations of each of the incidents would have no way of distinguishing one incident of

Porsche theft and chopping from any other in which Fuentes engaged during the relevant

time period.

       The conduct at issue in the instant case, however, is more akin to that under review

in Maxwell, 34 F.3d 1006, most notably because the conduct is subject to meaningful

subdivision into wholly discrete and identifiable units.1 In Maxwell, the defendant had been

involved in a conspiracy from the middle of 1986 through June 1991 to distribute and to

possess with intent to distribute dilaudid. On one occasion in 1987, Lundy, a distributor who

was also involved in the conspiracy, sought to purchase dilaudid from Maxwell. Because

Maxwell had no dilaudid, he sold Lundy less than an ounce of cocaine instead. This was the

only occasion on which Lundy purchased cocaine from Maxwell. Maxwell never asked

Lundy to become involved in cocaine distribution. The government also presented extrinsic

evidence regarding other drug dealings in which Maxwell had allegedly been involved.

       1
         Because the Court decided Maxwell before note 9 of the commentary to section 1B1.3
was added, the Court evaluated the “similarity, regularity, and temporal proximity” between the
offenses. Id. at 1011. This fact, however, does not make the Maxwell analysis any less
applicable because these factors remain relevant considerations in the “relevant conduct”
analysis.

                                             -12-
Among other evidence, the government offered the testimony of Dycus, who testified that,

beginning in April of 1986, he had sold cocaine for Maxwell for a period of a month-and-a-

half to two months. According to Dycus, he had never discussed dilaudid with Maxwell and

had never had any dealings with those involved in the dilaudid distribution. Additionally,

the 1986 cocaine deals had occurred solely between Maxwell and him. In calculating

Maxwell’s offense level, the district court considered the cocaine-selling scheme in addition

to the dilaudid conspiracy.

       Finding that the cocaine-selling scheme did not constitute “relevant conduct” in

considering the scope of the dilaudid conspiracy under section 1B1.3, we held that the district

court erred. In reaching this conclusion, we found that the single cocaine sale to Lundy was

“directly related to the dilaudid distribution, as Lundy purchased the cocaine as a substitute

for dilaudid. Thus, Maxwell’s counts of conviction involve[d] a dilaudid distribution

scheme.”    Id. at 1011.      Furthermore, we found, “Other than Maxwell, the dilaudid

distribution scheme and the cocaine distribution scheme did not involve any of the same

parties.” Id. We continued, noting that Dycus’s sale of cocaine for Maxwell occurred more

than a year before Maxwell’s single sale of cocaine to Lundy, so the acts were “temporally

remote.” Id. Finding that there were no “‘distinctive similarities’” between the cocaine and

dilaudid distribution schemes that “‘signal that they are part of a single course of conduct,’”

we held that the offenses were “‘isolated, unrelated events that happen only to be similar in

kind.’” Id. (citation omitted). Finally, we stated,

                                            -13-
               We do not think that two offenses constitute a single course of
               conduct simply because they both involve drug distribution. To
               so conclude would be, in the words of the Fourth Circuit,

                      to describe [the defendant’s] conduct at such a level of
                      generality as to eviscerate the evaluation of whether
                      uncharged criminal activity is part of the “same course of
                      conduct or common scheme or plan” as the offense of
                      conviction. With a brushstroke that broad, almost any
                      uncharged criminal activity can be painted as similar in
                      at least one respect to the charged criminal conduct.

Id. (citation omitted).

       Applying the relevant case law and the express purpose of section 1B1.3, we find that

the NNI scheme and the CCC fraud constitute conduct that can “readily be broken into

discrete identifiable units that are meaningful for purposes of sentencing.” See Maxwell, 34

F.3d at 1010-11. Indeed, our ability to refer to the different frauds merely as “CCC” or

“NNI” and yet convey to the reader precisely to which conduct we refer, along with all of the

attendant facts relating to that particular swindle, illustrates the wholly distinct nature of each

of the frauds involved. To lump these discrete and unrelated frauds together for purposes of

defining relevant conduct would require us to ignore the wholly distinct nature of these

crimes simply because, at the highest order of abstraction, they both involved frauds. We are

not prepared to paint with so broad and undiscriminating a brushstroke.

       While Blanc claims that his use of newspaper advertisements and a toll-free number,

as well as his conning techniques employed in both cases, render the two schemes part of the

same course of conduct or a common scheme or plan, we may readily articulate the

numerous, significant differences between the CCC and NNI crimes. Indeed, the fact that

                                              -14-
both the CCC and NNI schemes were frauds is the only thing they have in common. Most

obviously, as in Maxwell, the two crimes at issue did not involve the same subject matter;

CCC pertained to water-vending machines, whereas NNI concerned greenhouses and plant

sales. Also like the Maxwell case, except for defendant himself, the two crimes did not

involve any of the same parties. Nor, notably, did Blanc defraud any of the same victims.

The CCC and NNI frauds, like the conduct reviewed in Maxwell, also were separated

temporally -- in the case at hand, by a few years. We similarly observe that the scope of the

CCC and NNI frauds differed: whereas Blanc victimized eighty-four individuals with the

NNI con, he preyed on only ten through the CCC fraud.

       Even a quick review of the substance of the schemes yields the conclusion that they

were different. In the NNI swindle, for example, Blanc duped his victims twice: first, he

sold and built for them substandard greenhouses, although he billed them as “state of the art,”

and second, if his victims were somehow able to succeed despite the handicap placed on

them by the deficient greenhouses, Blanc had no one to purchase the plants, although he

represented to investors that he had large corporate clients lined up. The CCC con, however,

did not require Blanc to build anything. In fact, unlike the NNI Case, where the greenhouses,

though defective, at least were delivered, in the CCC scheme, Blanc did not install or operate

the water-vending machines that investors purchased. Additionally, in the CCC fraud, Blanc

pirated brochure materials of a legitimate water-vending company to entice potential

investors. Further, the NNI scheme was substantially more complicated and involved than

the CCC fraud. Whereas in the CCC fraud, Blanc simply sold purported interests in water-

                                            -15-
vending machines to investors and occasionally provided them with “lulling” checks to lull

investors into a false sense of security to prolong the life of the scheme, in NNI, Blanc posed

as an investor, took potential investors on tours of facilities he and his co-defendant claimed

were plant-purchasing facilities, and lined up fake buyers. The NNI scheme caused victims

not only to lose their money, but also to waste their time, effort, and sweat growing plants

that would never be purchased by anyone, whereas the CCC swindle resulted only in the

victims’ loss of money. In short, the “two offenses [do not] constitute a single course of

conduct simply because they both involve [fraud].” See Maxwell, 34 F.3d at 1011. Rather,

the CCC and NNI schemes may “readily be broken into discrete, identifiable units that are

meaningful for purposes of sentencing[,]” see U.S. Sentencing Guidelines Manual §1B1.3,

comment (backg’d), and the district court’s factual finding that CCC involved a “totally

separate scenario or scheme” and “a separate conspiracy” from NNI was not clearly

erroneous.

                                             IV.

       We therefore conclude that the district court properly held that the CCC scheme did

not constitute “relevant conduct” for purposes of sentencing Blanc in the instant case.

Accordingly, the judgment of the district court must be, and is, AFFIRMED.

                                            -16-