Court Opinion

ID: 9554813
Source: CourtListenerOpinion
Date Created: 2023-08-09 21:00:33.138676+00
Date Added: 2024-06-11T15:36:41.955095
License: Public Domain

United States Court of Appeals
                        For the First Circuit

Nos. 22-1444, 22-1449

                           UNITED STATES,

                              Appellee,

                                 v.

                           BERNARD GADSON,

                        Defendant, Appellant.

         APPEALS FROM THE UNITED STATES DISTRICT COURT
                   FOR THE DISTRICT OF MAINE

            [Hon. Jon D. Levy, U.S. District Judge]

                               Before

                   Kayatta, Selya, and Howard,
                         Circuit Judges.

     Chauncey B. Wood, with whom Danya F. Fullerton and Wood &
Nathanson, LLP were on brief, for appellant.
     Benjamin M. Block, Assistant United States Attorney, with
whom Darcie N. McElwee, United States Attorney, was on brief, for
appellee.

                           August 9, 2023
           KAYATTA, Circuit Judge.          Bernard Gadson was sentenced to

110 months' imprisonment after pleading guilty to crimes arising

from his role in a bank fraud scheme.               On appeal, he challenges

the procedural reasonableness of his sentence, asserting that the

district court miscalculated the appropriate Guidelines sentencing

range.   He also challenges the inclusion of certain amounts in the

court's restitution order.        For the following reasons, we affirm

Gadson's prison sentence, and vacate in part the restitution order.

                                       I.

           We   begin   by   summarizing      the    factual   background   and

procedural    history   that    form   the    basis   of   Gadson's   appeals.

"Because [Gadson pleaded] guilty, we draw the relevant facts from

the change-of-plea colloquy, the unchallenged portions of the

Presentence     Investigation    Report      ('PSR'),   and    the   sentencing

hearing transcript."     United States v. González-Andino, 58 F.4th

563, 565 (1st Cir. 2023) (quoting United States v. Díaz-Rivera,

957 F.3d 20, 22 (1st Cir. 2020)).

           On October 25, 2021, Gadson pleaded guilty to three

crimes stemming from his involvement in a bank fraud conspiracy:

(i) attempted bank fraud, in violation of 18 U.S.C. §§ 2, 1344(2);

(ii) aiding and abetting aggravated identity theft, in violation

of 18 U.S.C. §§ 2, 1028A(1); and (iii) criminal contempt,1 in

     1  Gadson was initially arrested in August 2019 and
subsequently released on bond. The criminal contempt charge

                                   - 2 -
violation of 18 U.S.C. § 401(3).           As relevant here, Gadson and his

coconspirators       obtained    the     names    and    personal      information

(including dates of birth and social security numbers) of real

individuals, and then used that information to apply for loans for

themselves in those persons' names, with no intention of repaying

the loans.        To support the loan applications, Gadson and his

coconspirators       also    created     and     used   fraudulent      supporting

documents, such as counterfeit driver's licenses, pay stubs, and

lease agreements.       The specific conduct that formed the basis for

the bank fraud and identity theft charges occurred in January 2019.

            The     district    court    sentenced      Gadson    to   110 months'

imprisonment.       In determining the total offense level for bank

fraud and criminal contempt (which were grouped together under the

applicable United States Sentencing Guidelines), the court added

twelve     levels    under     section 2B1.1      for    the     monetary   losses

associated with Gadson's conduct, including losses stemming from

uncharged relevant conduct.             See United States v. Flete-Garcia,

925 F.3d 17, 28 (1st Cir. 2019).                 Pursuant to the applicable

Guidelines commentary, the court looked to "intended loss" rather

than "actual loss" because the "intended loss" was the greater of

the two.    U.S.S.G. § 2B1.1, cmt. n.3(A).

resulted from conduct that violated the terms of his pretrial
release.

                                        - 3 -
          Additionally, the court denied Gadson's requested three-

level   reduction     for     acceptance     of   responsibility        under

section 3E1.1.     The government had initially agreed in Gadson's

plea agreement to recommend that the district court apply the

reduction.   And the PSR         recommended that Gadson receive the

reduction (although it said it was a "close call"), noting the

parties' agreement.       But the government had reserved the right to

change its view, and ultimately opposed the credit because Gadson,

according to the government, "falsely den[ied], and frivolously

contest[ed], relevant conduct" during the sentencing proceedings.

          The district court sided with the government, resting

the denial on the fact that Gadson had not "truthfully admitted

the conduct that . . . comprise[d] the offense of conviction."

Although he had pleaded guilty, Gadson contested the government's

characterization of his role in the scheme.              He disputed the

application of a three-level increase for his role as a "manager

or supervisor" of the scheme, as well as the inclusion of much of

the conduct taken into account for the purpose of determining loss

under section 2B1.1.      The court rejected Gadson's contentions, and

asked   "whether    his     challenging    [of]   the   findings   in     the

[presentence] report associated with his role [was] frivolous and

so lacking in merit as to disqualify him from acceptance of

responsibility credit."       The court then observed that Gadson had

incorrectly "disputed . . . his role in the conspiracy, shifting

                                   - 4 -
blame to his co-conspirators [and] characterizing himself as a

minor player relative to them."                The court found "ample evidence

that   he   was    the    top   person    in    this    criminal   activity,"       and

determined that Gadson "ha[d] not accepted that."                         "With that

background," the court could not "in good faith conclude that he

ha[d] sufficiently taken responsibility for his actions so as to

receive a reduction."

             Ultimately, the court calculated a total offense level

of twenty-seven for bank fraud and criminal contempt, yielding a

Guidelines sentencing range of 100–125 months.                     The court then

imposed a downward-variant sentence of 80 months for those counts,

to    run   consecutively       with   the     mandatory     minimum     sentence   of

24 months for identity theft and a 6-month sentence pursuant to 18

U.S.C. § 3147 for committing a new offense while on pretrial

release.

             The court also ordered restitution in the amount of

$256,537.      Included in that calculation was an auto loan for

$107,437 issued by TD Bank to Gadson in October 2020.                         Gadson

obtained     the   loan    in   his    own     name    but   submitted    fraudulent

documents regarding his income and employment when applying for

it.    Gadson was current on all payments on the loan at the time of

sentencing, and the court applied a credit of $13,196 for the

amount already paid off.

                                         - 5 -
                                    II.

            Gadson argues that his prison sentence was procedurally

unreasonable based on two Guidelines calculation errors.             First,

he challenges the district court's use of "intended loss" rather

than "actual loss" in determining his offense level for the bank

fraud and criminal contempt counts.          Second, he asserts that the

court erred in denying the three-level reduction for acceptance of

responsibility.    We address these arguments in turn.

                                     A.

            Gadson concedes that he did not raise his "actual loss"

argument to the district court, and thus we review it for plain

error.   See United States v. Lewis, 963 F.3d 16, 25 (1st Cir.

2020).   "In order to establish plain error, a defendant must show

that: '(1) there was error; (2) the error was plain; (3) the error

affected [his] substantial rights; and (4) the error adversely

impacted the fairness, integrity, or public reputation of judicial

proceedings.'"     Id. (alteration in original) (quoting              United

States v. Clemens, 738 F.3d 1, 10 (1st Cir. 2013)).

            We begin our review with the relevant Guidelines text.

For   certain   theft   crimes,     including      Gadson's,   section 2B1.1

specifies a base offense level and then provides for offense-level

increases   depending    on   the   amount    of    the   loss.    U.S.S.G.

§ 2B1.1(a), (b)(1).     If, for example, the loss is more than $6,500

and less than or equal to $15,000, two levels are added; if the

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loss is more than $15,000 and less than or equal to $40,000, four

levels are added, and so on.            U.S.S.G. § 2B1.1(b)(1)(B), (C).

            The Guidelines themselves do not define "loss," but the

Guidelines commentary to section 2B1.1 provides that "loss is the

greater of actual loss or intended loss."                        U.S.S.G. § 2B1.1,

cmt. n.3(A).       The commentary then defines "actual loss" as "the

reasonably   foreseeable         pecuniary      harm    that     resulted    from   the

offense," and defines "intended loss" as "the pecuniary harm that

the defendant purposely sought to inflict."                       U.S.S.G. § 2B1.1,

cmt. n.3(A)(i)–(ii).

            As discussed above, the district court here determined

that    intended    loss   was    greater    than       actual    loss,     ultimately

resulting in a twelve-level increase in Gadson's total offense

level.    Gadson asserts on appeal that the district court should

have used actual loss instead of intended loss, and that, had the

court done so, he would have received at most a ten-level increase

under section 2B1.1.

            Gadson    thus       asks   us      to     reject     the   commentary's

definition of "loss."         In Stinson v. United States, 508 U.S. 36

(1993), the Supreme Court held that the Guidelines commentary

should be "treated as an agency's interpretation of its own

legislative rule," and that, accordingly, the commentary "must be

given    'controlling      weight   unless      it     is   plainly     erroneous   or

inconsistent with the regulation.'"              Id. at 44–45       (quoting Bowles

                                        - 7 -
v. Seminole Rock & Sand Co., 325 U.S. 410, 414 (1945)).         Applying

Stinson, we have held that "disregarding commentary in favor of a

guideline or statute is permissible 'only when "following one will

result in violating the dictates of the other."'"         United States

v. Duong, 665 F.3d 364, 368 (1st Cir. 2012) (quoting United States

v. Piper, 35 F.3d 611, 617 (1st Cir. 1994)).

            Gadson makes no argument that he could prevail if Stinson

applied.   Instead, he asserts that the Supreme Court's decision in

Kisor v. Wilkie, 139 S. Ct. 2400 (2019), changed the standard for

deferring to the commentary.      Kisor clarified that courts should

not defer to an agency's interpretation of its own regulation

"unless the regulation is genuinely ambiguous."         Id. at 2415; see

Lewis, 963 F.3d at 23–24 (noting that although Kisor rejected a

challenge to the Auer/Seminole Rock doctrine of agency deference,

"[i]t is nevertheless fair to say that Kisor sought to clarify the

nuances    of   judicial   deference   to   agency   interpretations   of

regulations").     "And before concluding that a rule is genuinely

ambiguous, a court must exhaust all the 'traditional tools' of

construction."      Kisor,    139 S. Ct. at 2415 (quoting Chevron,

U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 843

n.9 (1984)).     "Then, '[i]f genuine ambiguity remains,' a court

must ensure that 'the agency's reading [is] "reasonable,"' meaning

that it 'must come within the zone of ambiguity the court has

identified after employing all its interpretive tools.'"          Lewis,

                                  - 8 -
963   F.3d    at   24   (alterations   in     original)   (citation      omitted)

(quoting Kisor, 139 S. Ct. at 2415–16).

              Applying Kisor, Gadson argues that "loss" as used in

section 2B1.1 unambiguously means "actual loss."                 Gadson further

asserts that even if "loss" were ambiguous, defining that term to

include "intended loss" would not be reasonable.

              Gadson must do more than simply prove that the Guidelines

mean what he says they mean.           Rather, because we are reviewing

Gadson's claim for plain error, he must prove that the district

court's error "was plain -- which is to say, clear or obvious."

United States v. Romero, 906 F.3d 196, 209 (1st Cir. 2018).                   And

even assuming that Kisor abrogated Stinson, and further assuming

that the district court committed error by using intended loss,

any such error was not "clear or obvious."

              Gadson concedes that his reading of section 2B1.1 does

not directly follow from First Circuit precedent. "With no binding

precedent on his side, [he] cannot succeed on plain-error review

unless he shows his [loss] theory is compelled by the guidelines'

language itself."        Id. at 207.     In making that argument, Gadson

cites heavily from United States v. Banks, 55 F.4th 246 (3d Cir.

2022),   in    which    the   Third   Circuit    reviewed   de    novo   whether

section 2B1.1 encompasses intended loss.             Id. at 255 n.29.        That

court concluded that "in the context of a sentence enhancement for

basic economic offenses, the ordinary meaning of the word 'loss'

                                      - 9 -
is the loss the victim actually suffered."   Id. at 258.   The court,

applying Kisor, placed "no weight" on the commentary's definition

to the contrary.    Id.

          In reaching its conclusion, the Third Circuit explained,

"The Guideline does not mention 'actual' versus 'intended' loss;

that distinction appears only in the commentary.       That absence

alone indicates that the Guideline does not include intended loss."

Id. at 257.     The court also relied in part on dictionaries,

finding, "Our review of common dictionary definitions of 'loss'

point to an ordinary meaning of 'actual loss.' None of these

definitions suggest an ordinary understanding that 'loss' means

'intended loss.'"     Id. at 258.

          Because the Third Circuit was reviewing the question de

novo, it expressed no opinion as to whether its interpretation was

"clear or obvious."    So even if we were to agree with that court's

ultimate conclusion that "loss" means actual loss, it would not

resolve the matter here.     See Lewis, 963 F.3d at 27 (concluding,

with respect to a pure question of law, that "any error, if there

was one, could not have been 'clear or obvious' as required to

establish plain error");     Romero, 906 F.3d at 209 (same); United

States v. Caraballo-Rodriguez, 480 F.3d 62, 76 (1st Cir. 2007)

(same).   The Third Circuit itself provided reason to believe that

its conclusion in Banks was not necessarily "obvious," noting that

in certain contexts "'loss' could mean pecuniary or non-pecuniary

                                - 10 -
loss and could mean actual or intended loss."   Banks, 55 F.4th at

258.

          More importantly, our discussions of section 2B1.1 in

past opinions put paid to the claim that it is "obvious" that

"loss" does not encompass intended loss.   Although we have never

squarely addressed a challenge to the commentary's use of intended

loss (either before or after Kisor), we have regularly -- both

before and after Kisor -- explained the concept in the context of

loss calculation challenges.   See, e.g., United States v. Akoto,

61 F.4th 36, 45 (1st Cir. 2023) (quoting the commentary to explain

that loss for purposes of section 2B1.1 is "the greater of actual

loss or intended loss"); United States v. Carrasquillo-Vilches, 33

F.4th 36, 41–42 (1st Cir. 2022) (same); United States v. Rueda,

933 F.3d 6, 8 (1st Cir. 2019) (same);   Flete-Garcia, 925 F.3d at

28 (same); United States v. Stokes, 829 F.3d 47, 54 (1st Cir. 2016)

(same).   In none of these cases have we expressed any doubt

regarding the use of intended loss.     To the contrary, we have

described such use approvingly, noting that "[i]n fraud cases,

amount of loss is meant to be a proxy for the harm (both actual

and intended) inflicted by the fraudster's nefarious activities,"

Flete-Garcia, 925 F.3d at 33 (emphasis added), and that "intended

loss is frequently a better measure of culpability than actual

loss," United States v. Appolon, 695 F.3d 44, 67 (1st Cir. 2012)

(emphasis added).   These statements provide, at the very least,

                               - 11 -
reasonable arguments as to why "loss" as used in section 2B1.1

does not unambiguously mean only actual loss, and why "intended

loss" falls within that term's "zone of ambiguity."2    See Kisor,

139 S. Ct. at 2415–16.   Accordingly, using intended loss in this

case was not "clear or obvious" error.3

          As discussed above, our conclusion is not in direct

tension with the Third Circuit's holding in Banks.     Further, our

opinion is consistent with a more similar case from the Fourth

Circuit, United States v. Limbaugh, No. 21-4449, 2023 WL 119577

     2  The existence of reasonable arguments in support of these
positions does not necessarily mean that we would find such
positions correct if they were squarely presented on the merits.
We reiterate that, for purposes of this opinion, we have only
assumed (without deciding) that the district court committed
error. See Romero, 906 F.3d at 209 (concluding that an alleged
Guidelines interpretation error was not plain, without "tak[ing]
a definitive stand on" the meaning of the relevant Guidelines
section); Caraballo-Rodriguez, 480 F.3d at 70 (noting that the
court's   conclusion   that  an   alleged   error  of   statutory
interpretation was not plain did not constitute a "ruling on the
merits" of the statute's meaning).
     3  Gadson briefly mentions that the rule of lenity demands a
narrow interpretation of section 2B1.1. But it is hardly clear
how invoking lenity -- a rule reserved for circumstances in which
"substantial ambiguity as to the guideline's meaning persists even
after a court looks to its text, structure, context, and purposes,"
United States v. Pinkham, 896 F.3d 133, 138 (1st Cir. 2018)
(quoting United States v. Suárez-González, 760 F.3d 96, 101 (1st
Cir. 2014)) -- could make it "obvious" that section 2B1.1 compels
a particular reading of "loss." Gadson fails to bridge this gap.
     Additionally, because we reject Gadson's intended loss
argument, we need not address his claim that the district court
erred in including the TD Bank auto loan in the loss calculation.
Gadson concedes that such error becomes material only if the
district court plainly erred in using intended loss.

                              - 12 -
(4th Cir. Jan. 6, 2023).           There, as here, the court reviewed for

plain error "whether the commentary defining 'loss' [to include

intended loss] . . . can be reconciled with the text of § 2B1.1's

'loss' provision."       Id. at *4.          The court observed that it had

never directly addressed the "loss" issue, but it "ha[d] routinely

deferred to and relied on those commentary definitions in reviewing

challenges     to     loss    calculations."          Id.       "Under   those

circumstances," the court (like this court today) could not "say

that the district court committed a 'clear' or 'obvious' error" by

using intended loss.         Id.

                                        B.

          Gadson additionally argues that the district court erred

in   denying    the     three-level      reduction     for     acceptance    of

responsibility.        "We    review   'a     sentencing    court's   factbound

determination that a defendant has not accepted responsibility'

for clear error."       United States v. D'Angelo, 802 F.3d 205, 209

(1st Cir. 2015) (quoting United States v. Jordan, 549 F.3d 57, 60

(1st Cir. 2008)); see United States v. Coleman, 884 F.3d 67, 73

(1st Cir. 2018).

          Section 3E1.1(a) provides for a two-level decrease "[i]f

the defendant clearly demonstrates acceptance of responsibility

for his offense." U.S.S.G. § 3E1.1(a). If the defendant qualifies

for that two-level decrease, and the defendant's offense level

before that reduction was sixteen or more, then section 3E1.1(b)

                                      - 13 -
provides for an additional one-level decrease upon a motion by the

government "stating that the defendant has assisted authorities in

the investigation or prosecution of his own misconduct by timely

notifying authorities of his intention to enter a plea of guilty."

U.S.S.G. § 3E1.1(b).4

            As relevant here, the commentary to section 3E1.1 lists

the following as "appropriate considerations" in "determining

whether a defendant qualifies under subsection (a)": "truthfully

admitting the conduct comprising the offense(s) of conviction, and

truthfully    admitting    or   not    falsely      denying    any   additional

relevant conduct for which the defendant is accountable under

§ 1B1.3     (Relevant     Conduct)";         "post-offense      rehabilitative

efforts";    and   "the   timeliness    of    the   defendant's      conduct   in

manifesting the acceptance of responsibility."                U.S.S.G. § 3E1.1,

cmt. n.1. The commentary also adds that "[a] defendant who falsely

denies, or frivolously contests, relevant conduct that the court

determines to be true has acted in a manner inconsistent with

     4  As noted above, the government opposed any reduction for
acceptance of responsibility, and thus made no motion for the
additional one-level decrease. "But in practice, a district court
retains some ability to grant the [additional] reduction even if
the government" makes no motion under section 3E1.1(b).     United
States v. Rivera-Morales, 961 F.3d 1, 16 (1st Cir. 2020). "This
ability is narrowly circumscribed: a sentencing court may exercise
it only 'when the government's withholding of the predicate motion
"was based on an unconstitutional motive" or "was not rationally
related to any legitimate government end."'" Id. (quoting United
States v. Meléndez-Rivera, 782 F.3d 26, 30 (1st Cir. 2015)).

                                  - 14 -
acceptance of responsibility, but the fact that a defendant's

challenge is unsuccessful does not necessarily establish that it

was either a false denial or frivolous."   Id.

          On appeal, Gadson asserts that he is entitled to the

reduction based upon his guilty plea "well in advance of trial,"

the   district   court's    recognition    of    his    post-offense

rehabilitative efforts, and the probation officer's support for

the reduction.    But he does not contest the district court's

factual findings that Gadson had, without merit, "disputed . . .

his role in the conspiracy" and "ha[d] not accepted" "that he was

the top person in this criminal activity" -- the findings that

formed the basis for the district court's decision to deny the

reduction.

          Gadson fails to explain why, based on the Guidelines

commentary or anything else, his guilty plea and rehabilitative

efforts should outweigh his false denial of his role in the scheme.

"A defendant who pleads guilty is not entitled to a downward

adjustment for acceptance of responsibility as a matter of right."

United States v. Muriel, 111 F.3d 975, 982 (1st Cir. 1997).

Further, "[i]t is within the discretion of the district court to

deny a reduction on the basis of its determination that a defendant

has resorted to half-truths or evasions from the truth in an effort

to minimize his or her culpability."   Id. at 982–83.   Accordingly,

                              - 15 -
we cannot conclude that the district court clearly erred in

determining that Gadson had not accepted responsibility.

                                    III.

            Finally, Gadson asserts that the district court should

not have included the TD Bank auto loan in the restitution order.

Because     the    government   agrees    with     Gadson,   we   vacate   the

restitution order to that extent and remand this matter to the

district court without addressing it on the merits.               See United

States v. Foley, 783 F.3d 7, 27–28 (1st Cir. 2015).

                                    IV.

            For the foregoing reasons, we affirm Gadson's prison

sentence.         We vacate in part (as to the TD Bank loan), and

otherwise    affirm    the   district    court's   restitution    order,   and

remand for further proceedings consistent with this opinion.

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