Court Opinion

ID: 3031694
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:46:26.28934+00
Date Added: 2024-06-11T11:40:43.012915
License: Public Domain

FOR PUBLICATION
  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA,                 
                 Plaintiff-Appellee,             No. 04-10193
                v.
                                                  D.C. No.
                                                CR-99-20196-JW
RODNEY ROBERT KIMBREW, a.k.a.
Carlton Cochran,                                   OPINION
             Defendant-Appellant.
                                          
         Appeal from the United States District Court
           for the Northern District of California
           James Ware, District Judge, Presiding

                    Argued and Submitted
          April 12, 2005—San Francisco, California

                       Filed May 11, 2005

        Before: Donald P. Lay,* Betty B. Fletcher, and
           Michael Daly Hawkins, Circuit Judges.

                   Opinion by Judge Hawkins

   *The Honorable Donald P. Lay, Senior United States Circuit Judge for
the Eighth Circuit, sitting by designation.

                                5133
5136              UNITED STATES v. KIMBREW
                         COUNSEL

Michael V. Severo, Los Angeles, California, for the
defendant-appellant.

Amber S. Rosen (argued) and Jeffrey D. Nedrow (briefed),
Assistant United States Attorneys, San Jose, California, for
the plaintiff-appellee.

                         OPINION

HAWKINS, Circuit Judge:

   Rodney Kimbrew, a.k.a. Carlton Cochran, appeals his con-
viction and sentence for conspiracy to commit money laun-
dering. In an issue of first impression, we must decide
whether the sentencing enhancement for being in the business
of receiving and selling stolen property can apply to a defen-
dant who sells only property that he himself has obtained by
fraud. We agree with the overwhelming majority of circuits
that it cannot. We affirm Kimbrew’s conviction, but vacate
his sentence and remand for resentencing.

        FACTS AND PROCEDURAL HISTORY

   Beginning in 1996, Kimbrew and several co-conspirators,
including Dayne Williams and Damien Springs, began a
scheme to defraud computer suppliers: they set up fake corpo-
rations and then established lines of credit with wholesale
computer supply companies using phony references and falsi-
fied credit information.

   The fraudulent companies used telephone answering ser-
vices in San Jose, California, which would forward calls to
the companies’ shell offices elsewhere. The co-conspirators
would then return the calls, posing as the phony trade and
                  UNITED STATES v. KIMBREW                5137
bank references. After establishing credit, the companies
would place orders for computers, and then resell the comput-
ers through co-defendant Nicholas Krallis, but they would
never pay the original suppliers.

   Kimbrew obtained a driver’s license in the false name of
Carlton Cochran and used that identity to set up a bank
account into which proceeds from the computer sales were
deposited. The Cochran account was used to hold a portion of
the funds and to distribute proceeds to Williams and Springs.

   In July 1997, investigators arranged for a controlled deliv-
ery and arrested Williams and Springs. A grand jury thereafter
returned an indictment against Kimbrew, Williams, Springs,
Krallis, and one other co-defendant, Herbert Powell. The
indictment charged Kimbrew with one count of conspiracy to
commit mail fraud and wire fraud, in violation of 18 U.S.C.
§ 371 (“Count One”), one count of conspiracy to commit
money laundering, in violation of 18 U.S.C. § 1956(h)
(“Count Two”), and one count of wire fraud, in violation of
18 U.S.C. § 1343 (“Count Three”).

  Williams and Springs pled guilty and testified against Kim-
brew at trial. The jury convicted Kimbrew of Count Two, but
acquitted him of Counts One and Three.

   The district court sentenced Kimbrew in March 2004.
Although the government urged the district court to find the
amount of loss to be $678,000 (the total loss from the
scheme), the district court, at Kimbrew’s urging, found a loss
amount of approximately $140,000, based on amounts
deposited into the Cochran account. The district court also
applied three two-level enhancements to Kimbrew’s sentence
for (1) receiving and selling stolen property (U.S.S.G.
§ 2B1.1(b)(4)); (2) use of sophisticated means (U.S.S.G.
§ 2B1.1(b)(8)(A) & (C)); and (3) role in the offense (U.S.S.G.
§ 3B1.1(c)). This yielded a guideline range of 51-63 months,
and the district court sentenced Kimbrew to the statutory
5138               UNITED STATES v. KIMBREW
maximum of 60 months. Kimbrew appeals his conviction and
sentence.

                 STANDARD OF REVIEW

   Whether a defendant’s double jeopardy rights have been
violated is a question of law reviewed de novo. United States
v. McClain, 133 F.3d 1191, 1193 (9th Cir. 1998). This court
reviews the district court’s interpretation of the Sentencing
Guidelines de novo, the district court’s application of the Sen-
tencing Guidelines to the facts of this case for abuse of discre-
tion, and the district court’s factual findings for clear error.
United States v. Barnes, 125 F.3d 1287, 1290 (9th Cir. 1997).

                        DISCUSSION

I.   Double Jeopardy

   [1] Kimbrew first argues that his conviction violates the
Double Jeopardy Clause because the government improperly
subdivided a single criminal conspiracy into multiple counts.
“The Double Jeopardy Clause prohibits the imposition of
multiple trials, convictions and punishments for the same
offense.” United States v. Arlt, 252 F.3d 1032, 1035 (9th Cir.
2001) (en banc). In determining what constitutes the “same
offense” in cases like this, involving the general conspiracy
statute, 18 U.S.C. § 371, we must first consider the elements
of the specific offense that the defendant is alleged to have
conspired to commit. Id. at 1038. We then apply the Block-
burger test to the two conspiracy counts to determine
“whether each provision requires proof of an additional fact
which the other does not.” Id. at 1036 (citing Blockburger v.
United States, 284 U.S. 299, 304 (1932)).

   [2] The Blockburger test focuses on the statutory elements
of each offense, not on the actual evidence presented at trial.
Illinois v. Vitale, 447 U.S. 410, 416 (1980). Thus, it matters
not that there is “substantial overlap” in the evidence used to
                   UNITED STATES v. KIMBREW                5139
prove the two offenses, so long as they involve different statu-
tory elements. United States v. Cuevas, 847 F.2d 1417, 1429
(9th Cir. 1988) (citation omitted).

   [3] Kimbrew was charged in Count One with violating
§ 371 by conspiring to commit mail fraud and wire fraud in
violation of 18 U.S.C. §§ 1341 & 1343. Kimbrew was
charged in Count Two with conspiracy to launder money —
that is, conspiracy to conduct financial transactions involving
the proceeds of a specified unlawful activity — in violation
of 18 U.S.C. § 1956(h). Although both conspiracies con-
cerned the same underlying fraud, the conspiracies were
legally distinct and each required proof of something the other
did not.

   [4] To convict on Count One, the jury was required to find
an agreement to use the mail or interstate wire communica-
tions to execute the scheme to defraud, whereas to convict on
Count Two, the jury had to find an agreement to conduct a
financial transaction involving the proceeds of mail or wire
fraud. Thus, the acts necessary to establish a conspiracy to
commit mail and wire fraud will not necessarily also support
a conviction for conspiracy to launder money, or vice versa.
See Arlt, 252 F.3d at 1038-39 (conspiracy to violate drug laws
and conspiracy to launder drug money separate offenses);
Cuevas, 847 F.2d at 1429 (drug conspiracy and conspiracy to
fail to report export of currency obtained from the drug con-
spiracy separate offenses). Nor did the differences between
the counts escape the jury, which acquitted Kimbrew of the
wire fraud counts, while convicting him of conspiracy to com-
mit money laundering. Kimbrew’s conviction does not violate
the Double Jeopardy Clause and is hereby affirmed.

II.   Sentencing

  [5] Kimbrew also challenges the district court’s enhance-
ment of his sentence under the Sentencing Guidelines. Even
though the Guidelines are no longer mandatory after the
5140                  UNITED STATES v. KIMBREW
Supreme Court’s decision earlier this year in United States v.
Booker, 125 S. Ct. 738 (2005), the district court should still
consult them for advice as to the appropriate sentence, id. at
767, and we therefore address the merits of Kimbrew’s argu-
ment with respect to the enhancement for receipt of stolen
property.

   [6] The Guidelines permit a two-level enhancement “[i]f
the offense involved receiving stolen property, and the defen-
dant was a person in the business of receiving and selling
stolen property.” U.S.S.G. § 2B1.1(b)(4). The district court
did not make any specific factual findings in this regard, but
apparently accepted the government’s argument that Kimbrew
was in the business of receiving and selling stolen property
because he was involved in receiving and selling the comput-
ers that he had obtained by fraud.

   [7] However, nearly every circuit that has addressed the
meaning of this enhancement has agreed “that a thief who
sells goods that he himself has stolen is not in the business of
receiving and selling stolen property.” United States v.
Maung, 267 F.3d 1113, 1118 (11th Cir. 2001) (quotation
marks omitted); see also United States v. McMinn, 103 F.3d
216, 219-21 (1st Cir. 1997) (guideline not meant to apply to
defendant who sells only property he has stolen); United
States v. Sutton, 77 F.3d 91, 94 (5th Cir. 1996) (enhancement
“a punishment for fences, people who buy and sell stolen
goods, thereby encouraging others to steal, as opposed to
thieves who merely sell the goods which they have stolen”);
United States v. Braslawsky, 913 F.2d 466, 468 (7th Cir.
1990) (“a person in the business of receiving and selling
stolen property is a professional fence and not a person who
sells property that he has already stolen”).1 The courts that
   1
     The Eighth Circuit has affirmed the use of the enhancement where the
thief delivered goods he stole to an auction house and then split the pro-
ceeds with the auction house. See United States v. Collins, 104 F.3d 143,
144 (8th Cir. 1997). However, Collins did not argue that the enhancement
was inappropriate because he had stolen the goods, nor did the court
explicitly address that question, focusing instead on Collins’s role as an
integral part of the auction house scheme. Id.
                      UNITED STATES v. KIMBREW                       5141
have engaged in an in-depth analysis of this provision have
generally based their views on three factors: (1) the plain lan-
guage of the enhancement, which requires both “receiving”
and “selling” stolen property;2 (2) the historical evolution of
the guidelines in this area, which have traditionally punished
fencing differently than mere theft; and (3) the underlying
purpose of the enhancement, i.e., to increase the penalty
because the ready availability of a fence to dispose of goods
may promote theft crimes. See United States v. Saunders, 318
F.3d 1257, 1267-1269 (11th Cir. 2003); McMinn, 103 F.3d at
219-22. This analysis is sound, and we adopt it today.

   Although the government did not even cite or attempt to
address this authority in its brief, at argument the government
contended that this circuit has previously rejected the notion
that a thief cannot receive the enhancement for selling his
own stolen goods in United States v. Zuniga, 66 F.3d 225 (9th
Cir. 1995). In Zuniga, we were called upon to decide whether
a defendant was “in the business” of receiving and selling
stolen property. We adopted the “totality of the circum-
stances” test originally set forth in United States v. St. Cyr,
977 F.2d 698, 703 (1st Cir. 1992), and rejected the “fence”
test propounded by several other circuits. Zuniga, 66 F.3d at
228-29. The fence test considers only whether the defendant
was a person who buys and sells property stolen by others
(i.e., a “fence”) and whether the defendant’s activities encour-
aged others to commit crimes. See United States v. War-
shawsky, 20 F.3d 204, 214-15 (6th Cir. 1994). The totality
approach considers numerous factors, such as the regularity of
the defendant’s dealings in stolen property, the sophistication
of the enterprise, and the defendant’s prior activities. Zuniga,
66 F.3d at 228-29.
  2
    As the First Circuit noted, “statutes which criminalize ‘receiving’ are
generally not thought to target the thief himself, but the wrongdoer who
knowingly acquires the loot from or through the thief.” McMinn, 103 F.3d
at 219.
5142                  UNITED STATES v. KIMBREW
   In Zuniga, we decided only how to determine whether a
defendant is “in the business” of receiving and selling stolen
property. We did not decide whether the enhancement could
apply to a defendant who was selling property he himself had
stolen, for it was not necessary for us to do so: the evidence
in that case established Zuniga was selling goods stolen by oth-
ers.3 As various decisions in other circuits since Zuniga have
made clear, there is nothing inconsistent about adopting a
totality of the circumstances approach to the “in the business”
question, while also requiring a defendant to be a fence — to
receive and sell property stolen by others — before the
enhancement applies. See Saunders, 318 F.3d at 1268 (“an
interpretation of the enhancement requiring that the defendant
be a fence is not inconsistent with our adoption of the totality
of the circumstances test”); McMinn, 103 F.3d at 222
(explaining that the St. Cyr decision did not reach this ques-
tion and does not support the government’s argument that the
enhancement could apply if the only goods distributed were
those the defendant had stolen); see also United States v.
Cottman, 142 F.3d 160, 167 n.9 (3rd Cir. 1998). In other
words, the “totality of the circumstances” and “fence” tests
diverge on the considerations that apply to being “in the busi-
ness,” but both tests operate on the predicate that the defen-
dant is a fence. Saunders, 318 F.3d at 1269.

   [8] Thus, the district court made a legal error by applying
this enhancement to Kimbrew, as there was no evidence that
Kimbrew dealt in property stolen by others. This error
resulted in a guideline range of 51-63 months, instead of 41-
51 months. Because of this error, we reverse Kimbrew’s sen-
tence and remand for resentencing.
  3
    Indeed, the only comment on this question in Zuniga actually supports
Kimbrew’s interpretation: upholding the enhancement, we noted that
“[t]he district court could reasonably conclude from the evidence pre-
sented that Zuniga was warehousing and selling merchandise stolen by
others, i.e., fencing property, in addition to property stolen by him.” 66
F.3d at 229 (emphasis added).
                  UNITED STATES v. KIMBREW               5143
   In light of our decision, we do not address Kimbrew’s
remaining arguments with respect to sentencing error under
Booker. On remand, of course, the district court may entertain
these arguments and should sentence Kimbrew in accordance
with the Supreme Court’s decision.

                      CONCLUSION

   Kimbrew’s conviction did not violate the Double Jeopardy
Clause because the two conspiracy counts each required proof
of a fact the other did not. We therefore AFFIRM Kimbrew’s
conviction. The district court erred, however, by enhancing
Kimbrew’s sentence for “receiving and selling stolen proper-
ty,” because Kimbrew was not dealing in property stolen by
others. We VACATE the sentence and REMAND FOR
RESENTENCING, which should be in accordance with the
Supreme Court’s decision in Booker.