Court Opinion

ID: 172866
Source: CourtListenerOpinion
Date Created: 2010-08-14 18:58:32+00
Date Added: 2024-06-11T17:25:21.876025
License: Public Domain

FILED
                                                          United States Court of Appeals
                                                                  Tenth Circuit

                                                               November 13, 2009
                     UNITED STATES COURT OF APPEALS
                                                  Elisabeth A. Shumaker
                                                                  Clerk of Court
                                   TENTH CIRCUIT

 UNITED STATES OF AMERICA,

          Plaintiff-Appellee,
 v.                                                     No. 08-1136
 JANNICE MCLAIN SCHMIDT,                        (D.C. No. 04-CR-103-REB)
                                                        (D. Colo.)
          Defendant-Appellant.

                                ORDER AND JUDGMENT *

Before HARTZ, BALDOCK, and TYMKOVICH, Circuit Judges.

      As a consequence of her participation in a ponzi scheme which cost defrauded

investors upwards of $50 million, Defendant Jannice McLain Schmidt pled guilty to

two counts of Securities Fraud in violation of 15 U.S.C. §§ 77q(a) and 77x. The

district court sentenced her to 60 months imprisonment on the first count of a

superceding information, and 48 months imprisonment on the second count, to be

served consecutively. To make a long story short, the parties from the outset of

the sentencing process have wrangled over the amount of loss properly attributable

to Defendant. Prior to the first sentencing hearing, the Government supplied a loss

      *
         This order and judgment is not binding precedent except under the doctrines
of law of the case, res judicata, and collateral estoppel. It may be cited, however,
for its persuasive value consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
figure attributable to Defendant of $25,656,958.96. Defendant meanwhile initially

calculated the loss due to her participation in the scheme at $11,384,617.00. The

Presentence Investigation Report (PSIR) set the loss attributable to Defendant at

$27,276,442.93. For a loss between $20 million and $50 million, the United States

Sentencing Guidelines (U.S.S.G.) provide an offense level increase of 22. See

U.S.S.G. § 2B1.1 Over Defendant’s objection, the court at the first sentencing

hearing accepted the PSIR’s findings without independent inquiry, and concluded

that a 22 offense level increase was appropriate. Based upon an adjusted offense

level of 31 and a criminal history category of I, the advisory guidelines set

Defendant’s imprisonment range between 108–135 months.              But because the

statutory maximum sentence for the two offenses was five years each, the PSIR

reduced the high end of the range to 120 months.

      Following the district court’s imposition of a 108 month sentence, Defendant

appealed, arguing the district court did not comply with Fed. R. Crim. P. 32(i)(3)(B).

Rule 32 requires that when a defendant alleges a factual inaccuracy in the PSIR, the

district court may not simply refer back to the PSIR to defeat the objection.

Defendant pointed out that the court failed to make a clear and independent ruling

on the disputed amount of loss and instead merely adopted the factual findings and

guideline applications of the PSIR. We agreed with Defendant and remanded for

resentencing:

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         The evidence showed that Schmidt was originally recruited as a
      victim into the scheme, and only later became a participant. The plea
      agreement lacks detail concerning her participation in specific aspects
      of the scheme. Given her objection to the PSIR, the nature and extent
      of her participation were key factors to be resolved in determining the
      appropriate advisory Guideline range and her appropriate sentence.

United States v. Schmidt, 244 Fed. App’x 902, 907 (10th Cir. 2007) (unpublished).

On remand, the district court conducted a three day evidentiary hearing on the issue

of loss, and the probation office prepared an addendum to the original PSIR. This

time, both the Government and the PSIR estimated the loss attributable to Defendant

at $24,709,954.02. See Gov’t Exh. 4. Following the hearing, the court made

independent findings on the record consistent with the PSIR, and resentenced

Defendant to 108 months imprisonment. See Rec. vol. VI, at 17-21. Defendant

again appeals, steadfastly disputing the amount of loss attributable to her.

      Under the Sentencing Guidelines (specifically the applicable 2002 version),

a defendant for purposes of sentence calculation generally may be held responsible

for “relevant conduct,” i.e., conduct “that occurred during the offense of conviction,

in preparation for that offense, or in the course of attempting to avoid detection or

responsibility for that offense.” U.S.S.G. § 1B1.3(a)(1). Such conduct includes “all

acts and omissions committed, aided, abetted, counseled, commanded, induced,

procured, or willingly caused by the defendant.” Id. § 1B1.3(a)(1)(A). In the event

of “jointly undertaken criminal activity (a criminal plan, scheme, endeavor, or

enterprise undertaken by the defendant in concert with others, whether or not charged

                                          3
as a conspiracy)” a defendant also may be held responsible for “all reasonably

foreseeable acts and omissions of others in furtherance of the jointly undertaken

criminal activity.” Id. § 1B1.3(a)(1)(B).

      Defendant first argues (as she did in the district court) that application of

U.S.S.G. § 1B1.3(a)(1) is restricted per the terms of her plea agreement to that time

period beginning in the spring of 2003—that period encompassing the fraudulent

misconduct charged in the second count of the superceding information. Defendant

asserts the Government breached the plea agreement when it insisted at sentencing

that the time period of Defendant’s relevant conduct commenced in the winter of

2002—that period encompassing the fraudulent misconduct charged in the first count

of the superceding information. We review de novo the legal question of whether

the Government breached the plea agreement in this case. See United States v.

Trujillo, 537 F.3d 1195, 1200 (10th Cir. 2008). We look to the language of the

agreement as a whole to ascertain both the nature of the Government’s promise and

Defendant’s reasonable understanding of that promise. Id.

      Applying this standard, we need not detail Defendant’s argument. Suffice

to say we have carefully reviewed the record, in particular the plea agreement, and

arguments presented (written and oral), and conclude the district court interpreted

the plea agreement consistent with the applicable law, thereby properly rejecting

Defendant’s claim of breach. Where the district court accurately analyzes an issue

and articulates a cogent rationale, it serves no useful purpose for us to write at

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length. See Metro. Life Ins. Co. v. Zaldivar, 413 F.3d 119, 120 (1st Cir. 2005) (per

Baldock, J.). Thus, we reject Defendant’s first argument substantially for the reasons

set forth in the district court’s written order which ably explains why the

Government did not breach the plea agreement. United States v. Schmidt, No. 04-

CR-00103-REB-05, Order Denying Defendant’s Oral Motion to Preclude Breach of

the Plea Agreement (D. Colo., Feb. 13, 2008). We add only that ¶ 12 of the

agreement, contained in a section entitled “Stipulation of Factual Basis and Facts

Relevant to Sentencing” (emphasis added), expressly states “[t]he parties agree that

the government’s evidence would show that the date on which conduct relevant to

the offense (§ 1B1.3) began is approximately the fall of 2001.” Defendant fails to

provide any persuasive explanation as to why we, considering the plea agreement as

a whole, should deem facts commencing around that period as inconsequential to the

determination of her relevant conduct under U.S.S.G. § 1B1.3.

      Defendant’s second argument posits that the district court, in calculating the

amount of loss attributable to her, relied upon erroneous findings of fact to conclude

“the defendant was engaged in jointly undertaken criminal activity, involving the

fraudulent solicitation of investments from January 11, 2002, the date of her

conviction in Count 1 of the Superceding Information, through mid-2004.” 1 Rec.

      1
        Defendant’s third and final argument, that her sentence is procedurally
unreasonable, is based upon the proposition that the district court relied on clearly
erroneous factual findings in calculating her guideline range. In other words,
                                                                       (continued...)

                                          5
vol. VI, at 17. Rather, Defendant asserts she had no understanding of the fraudulent

scheme prior to the spring of 2003 as evidenced by the fact she was investing her

own money in the illicit enterprise up to that time. The district court’s determination

of “relevant conduct” is a factual finding subject to a preponderance of the evidence

standard, and clear error review. United States v. Zapata, 546 F.3d 1179, 1192 (10th

Cir. 2008). To constitute clear error, the finding must be “simply not plausible or

permissible in light of the entire record on appeal.” Id. (internal quotations omitted).

      Having carefully reviewed the transcript of the sentencing hearing in this case,

we have little difficulty sustaining as plausible and permissible the district court’s

underlying findings supporting its determination regarding Defendant’s knowledge

of and willing participation in the fraudulent scheme from January 2002. Based upon

the testimonial and documentary evidence presented, the court justifiably found

Defendant solicited investments from numerous investors from January 11, 2002

forward in cooperation with her cohort Charles Lewis without ever disclosing the

material fact of Lewis’ prior felony conviction. Equally as damaging to her cause

was evidence from which the district court could properly infer that from March

2002, Defendant knew of a Nebraska cease and desist order regarding the

      1
        (...continued)
Defendant simply attacks the court’s factual findings regarding her involvement in
the scheme from a different angle. Because such argument is subsumed within her
ill-fated second argument, we need not address it further. See United States v.
Zapata, 546 F.3d 1179, 1192-93 (10th Cir. 2008).

                                           6
“investments” she was touting. She sought to avoid the impact of that order by

directing Nebraska investors to use her Colorado post office box as their address and

misrepresenting the nature of the Nebraska regulatory proceedings to investors. That

same month, Defendant was present at a business meeting during which her husband,

Norman Schmidt, stated “he had withdrawn money from a non-depleting account and

used it for other purposes.” Rec. vol. IV, at 114. The court could properly infer that

Defendant was aware of the fraudulent activities associated with the scheme by her

attendance at this meeting as well as subsequent sales meetings and social events

where the schemers gathered. The court’s finding of relevant conduct further rests

on evidence from which it could infer that Defendant, through her role as bookkeeper

and subsequently through her role as sole signatory on two purportedly “non-

depleting” accounts, understood, in the words of the district court, “that investors’

money was not being deposited into non-depleting accounts, that no profits were

being generated from any trading activity, and that payments to investors [including

herself] were funded by deposits from other investors.” Rec. vol. VI, at 19. As we

noted in our prior opinion, Defendant, to be sure, was recruited into the scheme as

a victim. But the record belies any conclusion that the district court committed clear

error in concluding that things changed in January 2002. The factual arguments that

Defendant makes on appeal relating to her knowledge of and participation in the

scheme were most emphatically for the fact-finder.

                                          7
Accordingly, the judgment of the district court is AFFIRMED.

                              Entered for the Court,

                              Bobby R. Baldock
                              United States Circuit Judge

                                 8