Court Opinion

ID: 2668886
Source: CourtListenerOpinion
Date Created: 2014-04-04 16:07:17.736263+00
Date Added: 2024-06-11T12:57:02.170198
License: Public Domain

United States Court of Appeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued November 22, 2013              Decided April 4, 2014

                       No. 11-3072

               UNITED STATES OF AMERICA,
                       APPELLEE

                             v.

                     REGINALD CLARK,
                       APPELLANT

        Appeal from the United States District Court
                for the District of Columbia
                   (No. 1:10-cr-00110-1)

    Jessica L. Ellsworth, appointed by the court, argued the
cause for appellant. On the briefs were Peter S. Spivack and
Matthew J. Iaconetti, appointed by the court.

    Katherine M. Kelly, Assistant U.S. Attorney, argued the
cause for appellee. With her on the brief were Ronald C.
Machen, Jr., U.S. Attorney, and Elizabeth Trosman, Assistant
U.S. Attorney.

   Before: ROGERS and TATEL, Circuit Judges, and
RANDOLPH, Senior Circuit Judge.

    Opinion for the Court filed by Circuit Judge TATEL.
                              2
   Concurring opinion filed by Senior Circuit Judge
RANDOLPH.

     TATEL, Circuit Judge: Challenging his conviction for
bank and wire fraud, Appellant contends that the district court
erroneously denied his Batson challenge and wrongly
admitted certain evidence. Appellant also argues that the
district court violated the Ex Post Facto Clause by calculating
his sixty-three-month sentence on the basis of guidelines
adopted subsequent to his crimes, applied an unwarranted
aggravating role enhancement, and erred by basing his
$200,000-plus restitution obligation in part on acquitted
conduct. For the reasons set forth in this opinion, we reject
Appellant’s challenges to his conviction, his aggravating role
enhancement, and his restitution obligation. But because the
government concedes that the district court’s retroactive
application of the Sentencing Guidelines violated the Ex Post
Facto Clause, we vacate Appellant’s sentence and remand for
resentencing.

                              I.
     From May 2001 through July 2003, Appellant Reginald
Clark stole thousands of dollars from his employer, Hoya
Federal Credit Union. Here’s how he did it. While working as
Hoya’s accountant, Clark manipulated its accounting system
so that the credit union funded Clark’s withdrawals from his
Hoya account. According to the indictment, Clark executed
sixty-four such fraudulent transactions totaling approximately
$119,280. Clark also arranged two unauthorized wire
transfers from Hoya’s account: one for $40,000 to an account
Clark’s cousin and the cousin’s wife owned jointly; the other
for $60,000 to Clark’s own retirement account. The grand
jury indicted Clark on four counts of bank fraud, 18 U.S.C.
§ 1344, two counts of false entry in federal credit institution
records, id. § 1006, and two counts of wire fraud, id. § 1343.
                              3
For conspiring with his cousin and the cousin’s wife to
execute the $40,000 wire transfer, the grand jury indicted
Clark on one count of conspiracy to commit bank fraud and
wire fraud. Id. §§ 1349, 1344, 1343.

     During jury selection, the government used five of its six
allotted peremptory strikes on black jurors: a teacher, a condo
manager, a software tester, a former employee of another
credit union, and a man upset about the legal representation
his cousin had received in an unrelated criminal case. Clark
responded with a Batson challenge, claiming that the
government unconstitutionally struck the black jurors on
account of race. See Batson v. Kentucky, 476 U.S. 79 (1986).
Seeking to determine whether the government allowed non-
black jurors with similar characteristics to serve on the jury,
the district court asked Clark’s counsel whether he had
prepared an analysis comparing the seated and struck jurors.
Counsel explained that he had not, and although the court
granted his request for “a moment” to do so, he never
followed through. Largely due to the absence of this
comparative analysis, the district court rejected Clark’s
Batson challenge, finding that he failed to produce sufficient
evidence to demonstrate that the government engaged in
purposeful discrimination.

    At trial, the government presented testimony and
documentary evidence showing that Clark manipulated
Hoya’s check payment system, that he made two
unauthorized wire transfers, and that he used the stolen funds
to pay for personal expenses. In addition to this direct
evidence of guilt, the government elicited testimony from
Hazel Logan, Clark’s supervisor and Hoya’s CEO, explaining
how she discovered the scheme. Over Clark’s objection,
Logan testified that while conducting a routine review of
Clark’s bank account, she noticed that the account reflected a
                              4
$5,500 deposit made at a Hoya ATM and that Clark had failed
to put any money into the ATM to cover the deposit. Logan
then initiated the audit that unearthed the scheme to defraud
Hoya.

     The jury convicted Clark on all but two counts: the
conspiracy count, which the government never presented to
the jury and was later dismissed; and the bank fraud count
that alleged a single fraudulent automated bill payment. The
district court sentenced Clark to sixty-three months’
imprisonment. In so doing, the court calculated Clark’s
sentence based on the 2010 Sentencing Guidelines instead of
the Guidelines in effect at the time of the offense and then
applied a two-level aggravating role enhancement. See
U.S.S.G. § 3B1.1(c). Invoking the Mandatory Victims
Restitution Act of 1996 (MVRA), 18 U.S.C. § 3663A, the
court also ordered Clark to pay over $219,000 in restitution—
the entire loss alleged in the indictment, including losses
attributable to the bank fraud count on which Clark was
acquitted.

     On appeal and with appointed counsel’s able assistance,
Clark now challenges his conviction on the grounds that the
district court erroneously rejected his Batson challenge and
admitted the ATM evidence, his sentence on the grounds that
the court violated the Ex Post Facto Clause by using the 2010
Sentencing Guidelines and erred by applying an aggravating
role enhancement, and his restitution obligation on the ground
that it included acquitted conduct. We consider each set of
issues in turn.

                             II.
    The Constitution bars the government from using
peremptory challenges to exclude prospective jurors on the
basis of race. See Batson, 476 U.S. at 89; United States v.
                               5
Moore, 651 F.3d 30, 40 (D.C. Cir. 2011). Batson challenges
proceed in three steps. First, the defendant must establish a
prima facie case of discrimination. Next, the government must
offer a race-neutral justification for each challenged strike.
Finally, the court must consider “all of the circumstances that
bear upon the issue of racial animosity” to determine whether
the government engaged in purposeful discrimination. Snyder
v. Louisiana, 552 U.S. 472, 478 (2008). In this case, the
district court was quite skeptical about several of the
government’s strikes. But observing that Clark failed to
present an analysis comparing the struck jurors with the
seated jurors, the court concluded at Batson’s final step that
Clark had offered insufficient evidence to find “that the
government’s . . . strikes were exercised for racial reasons.”
Trial Tr. 10 (Jan. 18, 2011). We review for clear error. United
States v. Gooch, 665 F.3d 1318, 1324 (D.C. Cir. 2012).

     Clark first argues that the district court clearly erred by
relying on its own concern about one of the struck jurors—the
teacher—rather than limiting its analysis to the government’s
stated rationale, that it feared teachers would be too inclined
to give defendants second chances. Clark is correct that a
district court may not substitute its own reasons for those
given by the government, see Miller-El v. Dretke, 545 U.S.
231, 251–52 (2005), but he is wrong that the court did so in
this case. Although the district court had its own doubts about
the teacher’s fitness for jury service and was quite skeptical of
the government’s claim that teachers favor defendants, the
court made clear that it based its decision on the government’s
proffered justifications. “I don’t think there is enough here,”
the court explained, “to conclude that the government’s
representations about why the strikes were exercised are not a
genuine representation of the government’s thinking.” Trial
Tr. 10 (Jan. 18, 2011) (emphasis added).
                               6
     As to the other jurors, Clark contends that the district
court overlooked clear evidence that the government’s
justifications were pretextual. He maintains that the
government’s reason for striking the condo manager (she
knew too little about issues relevant to the case) and its reason
for striking the software tester (he knew too much) are
necessarily inconsistent and therefore pretextual. Yet as the
government points out, the justifications are in fact consistent.
The government—reasonably in our view—may have wanted
jurors able to follow the case while at the same time fearing
jurors who might bring unwanted expertise into their
deliberations. Likewise, the government worried—again
reasonably—that the former credit union employee would
bring her personal knowledge about credit union operations
into the case and that the juror whose cousin had a bad
defense lawyer could be overly sympathetic to defendants.
Far from committing clear error, the district court took
Clark’s Batson challenge seriously and made a reasonable
decision based on the arguments and facts presented.

     For the first time on appeal, Clark now offers the
comparative analysis of struck and seated jurors that the
district court had inquired about, arguing that this analysis
provides powerful evidence of the government’s
discriminatory intent. As Clark concedes, we review this
unpreserved argument for plain error. Gooch, 665 F.3d at
1331–32. But cf. Miller-El, 545 U.S. at 241 & n.2 (reasoning
that comparative-analysis-based arguments are theories about
record evidence rather than new evidence). In the Batson
context, an error is plain if the government’s discriminatory
intent is “manifest, patent, or unmistakable.” Gooch, 665 F.3d
at 1332 (internal quotation marks omitted).

    According to Clark, comparisons of the condo manager
(whom the government justified striking based on its concern
                               7
that she lacked sufficient knowledge to follow the accounting
issues in the case) and the software tester (whom the
government justified striking based on its concern that he
might use his expertise to second-guess Hoya’s accounting
software) with several seated non-black jurors sharing these
characteristics reveal incontrovertible evidence of the
government’s discriminatory intent. But as the government
points out, the struck and seated jurors differ in meaningful
ways. With respect to the condo manager, the government had
a nondiscriminatory basis for believing that each of the seated
jurors could better follow the complex accounting issues:
Juror 1282 “handle[d] some financial[s] at work” and had
previously served on a jury, Trial Tr. 39 (Jan. 13, 2011); Juror
1395 was familiar with accounting principles from his work
as an accounting firm lobbyist, see id. at 51–53; and Juror
0488 had a Ph.D. in physics, see id. at 48–49. Likewise, with
respect to the software tester, none of the comparators
revealed similar levels of advanced software expertise: Juror
1124 worked on computer hardware, not software, see Trial
Tr. 87 (Jan. 13, 2011, P.M. Session); Juror 0488 was an
astronomer, not a software specialist, see Trial Tr. 49 (Jan. 13,
2011); and Juror 1210, a prosecutor in the Justice
Department’s intellectual property and computer crimes
section, worked on intellectual property cases, not computer
crimes, see id. at 70. Given these differences between struck
and seated jurors, Clark’s comparative analysis provides no
“unmistakable” evidence of the government’s discriminatory
intent. Gooch, 665 F.3d at 1332 (internal quotation marks
omitted); see also Snyder, 552 U.S. at 483 (cautioning that
“when alleged similarities were not raised at trial . . . an
appellate court must be mindful that an exploration of the
alleged similarities at the time of trial might have shown that
the jurors in question were not really comparable”). Clark has
thus failed to demonstrate that the district court committed
clear or plain error in denying his Batson challenge.
                               8

     Clark’s remaining challenge to his conviction fares no
better. He argues that the district court erred by failing to
exclude evidence about the $5,500 ATM transaction as
inadmissible propensity evidence. See Fed. R. Evid. 404(b).
Overruling Clark’s objection, the district court concluded that
the evidence fell outside Rule 404(b) because it was intrinsic
to the charged offenses and relevant to “tell the entire story of
what took place and how this whole thing was uncovered.”
Trial Tr. 232 (Jan. 19, 2011). It is true, as Clark argues, that
we have rejected a “complete the story” exception to Rule
404(b) and held that the “inextricably intertwined” exception
is narrow. United States v. Bowie, 232 F.3d 923, 928–29
(D.C. Cir. 2000). But in this case, we have no need to
determine whether the district court erred because any error,
even if one occurred, was harmless. See Kotteakos v. United
States, 328 U.S. 750, 776 (1946) (holding that
nonconstitutional errors that have no “substantial and
injurious effect . . . [on] the jury’s verdict” must be
disregarded). The government presented overwhelming
evidence of Clark’s guilt—most notably, documents showing
his use of the fraudulently obtained funds to pay for his own
expenses—and the ATM evidence added little to its case.

                              III.
     Clark argues that the district court erred by applying a
two-level enhancement for his aggravating role as “an
organizer, leader, manager, or supervisor of criminal activity
involving fewer than five participants.” U.S.S.G. § 3B1.1(c).
In the district court, Clark objected to the enhancement on the
ground that it rested on the dismissed conspiracy charge. Here
he offers a different argument: that the district court failed to
make the necessary finding that Clark exercised control over
another criminal participant. See United States v. Smith, 374
F.3d 1240, 1250 (D.C. Cir. 2004) (“All persons receiving an
                                9
enhancement [under Section 3B1.1] must exercise some
control over others . . . .” (internal quotation marks omitted)
(alteration in original)). Because Clark’s objection failed to
put the district court and the government on notice that he
disputed the issue of control, Clark has forfeited any
challenge to the sufficiency of the district court’s finding on
this question. See Adams v. Rice, 531 F.3d 936, 945 (D.C. Cir.
2008) (holding that a party forfeits for appeal arguments not
raised before the district court). Our review is thus for plain
error. See United States v. Mahdi, 598 F.3d 883, 888 (D.C.
Cir. 2010).

     To justify the enhancement, the district court relied on
the presentence report’s unchallenged finding that Clark “was
the mastermind of his offense,” as well as its own finding that
Clark’s cousin, who siphoned nearly $30,000 from the
$40,000 Clark unlawfully wired to the cousin’s account, was
“involved in th[e] whole event.” Trial Tr. 7 (Aug. 4, 2011);
see Fed. R. Crim. P. 32(i)(3)(A) (providing district court
“may accept any undisputed portion of the presentence report
as a finding of fact”). As Clark emphasizes, we have
previously found “conclusory labels . . . inadequate”
justifications for sentencing enhancements. United States v.
Graham, 162 F.3d 1180, 1183 (D.C. Cir. 1998). But the word
“mastermind” has real meaning: masterminds direct and
control others. See Webster’s Third New International
Dictionary 1390 (1993) (“2: a person who supplies the
directing or creative intelligence for a project or for a group of
persons undertaking a project”). To be sure, the “others”
might be innocent and unwitting participants. Here, however,
we are convinced by the district court’s discussion of Clark’s
cousin’s criminal involvement that the court found that Clark
controlled at least one criminal participant. Because this
justification for the aggravating role enhancement hardly
                              10
“exceeds the limits of our deference,” we see no error, much
less plain error. Smith, 374 F.3d at 1250.

     Clark’s Ex Post Facto Clause challenge requires a
different result. The Ex Post Facto Clause prohibits the courts
from applying the Sentencing Guidelines retroactively. See
Peugh v. United States, 133 S. Ct. 2072, 2084 (2013). The
district court sentenced Clark under the 2010 Guidelines for
crimes he committed years earlier. Although Clark failed to
object at sentencing, the government concedes, as it must, that
this amounted to plain error. We shall therefore vacate Clark’s
sentence and remand for resentencing under the proper
Guidelines.

                              IV.
     The Mandatory Victims Restitution Act directs
sentencing courts to order individuals convicted of bank fraud
to “make restitution to the victim of the offense.” 18 U.S.C.
§ 3663A(a)(1). Finding the approximately $219,000 loss
alleged in the indictment—including the losses from the bank
fraud count on which Clark was acquitted—attributable to
Clark’s scheme, the district court ordered him to make
restitution for the entire amount. Clark argues that the court’s
inclusion of losses flowing from the acquitted count violated
Supreme Court and D.C. Circuit decisions that limit
restitution orders to “the offense of conviction.” See Hughey v.
United States, 495 U.S. 411, 413 (1990) (emphasis added);
United States v. Dorcely, 454 F.3d 366, 377 (D.C. Cir. 2006).
In the district court, however, Clark made a very different
argument—that the restitution order lacked sufficient
evidentiary support. To be sure, Clark did refer to his
acquittal, but he never advanced the position he urges here—
that nothing in the MVRA authorizes restitution for acquitted
conduct. Our review is thus again for plain error. See Puckett
v. United States, 556 U.S. 129, 135 (2009).
                              11

     Contrary to Clark’s contention, neither of the decisions
he cites clearly forecloses including acquitted conduct in
restitution orders. Although the two decisions do limit
restitution to the “offense of conviction,” neither resolves the
question we face here: whether restitution is appropriate for
acquitted conduct that falls within the scope of other scheme-
based offenses of conviction—here, the other three bank fraud
counts. The district court thus committed no plain error. See
United States v. Laureys, 653 F.3d 27, 32–33 (D.C. Cir. 2011)
(“Rarely do we find an error to be plain where this court has
not ruled on the question.” (internal quotation marks
omitted)).

                              V.
       For the foregoing reasons, we affirm Clark’s
conviction and restitution obligation, vacate his sentence, and
remand for resentencing.

                                                    So ordered.
    RANDOLPH, Senior Circuit Judge, concurring: I join the
opinion of the court but write separately to say a few words
about § 3B1.1(c) of the U.S. Sentencing Guidelines. It seems to
me to be a mistake to say that the § 3B1.1(c) enhancement
applies if, and only if, the defendant has exercised “control”
over one or more of the participants in the crime.

     Section 3B1.1(c) states: “If the defendant was an organizer,
leader, manager, or supervisor in any criminal activity other than
described in (a) or (b), increase [the offense level] by 2 levels.”1
In my view one can be a “leader” or “organizer” within the
meaning of that provision without controlling other persons.
The President of the United States, for instance, is sometimes
called the leader of the Free World, but no one thinks this means
he controls other countries. The commentary accompanying
§ 3B1.1 makes clear that control is just one of the many factors
to be considered in determining whether the defendant was a
leader or organizer. See U.S.S.G. § 3B1.1 application note 4.2

     1
         Subsections (a) and (b) are as follows:

     (a) If the defendant was an organizer or leader of a
     criminal activity that involved five or more participants or
     was otherwise extensive, increase by 4 levels.

     (b) If the defendant was a manager or supervisor (but not
     an organizer or leader) and the criminal activity involved
     five or more participants or was otherwise extensive,
     increase by 3 levels.
     2
      Application note 4 to § 3B1.1 instructs that, in determining
whether a defendant is a leader or organizer,

     [f]actors the court should consider include the exercise of
     decision making authority, the nature of participation in
     the commission of the offense, the recruitment of
     accomplices, the claimed right to a larger share of the fruits
     of the crime, the degree of participation in planning or
                                 2

The court held in United States v. Graham that no one of those
factors is “dispositive.” 162 F.3d 1180, 1185 (D.C. Cir. 1998).

     The confusion arises because Graham—a § 3B1.1(b) case,
not, as here, a § 3B1.1(c) case—a few lines later said: “All
persons receiving an enhancement must exercise some control
over others.” Id. Subsection (b) applies only to managers and
supervisors; it does not apply to a defendant who was an
organizer or leader. See U.S.S.G. § 3B1.1(b). Applying that
statement to the entire Guideline, including subsection (c),
would render lack of control dispositive for leaders and
organizers. This would render Graham self-contradictory
because control is just one of the factors to be considered.

     I therefore would not treat this one sentence from Graham,
which was dictum as applied to organizers and leaders, as
settling the issue under § 3B1.1(c). Although the sentence has
been sporadically repeated, see, e.g., United States v. Smith, 374
F.3d 1240, 1250 (D.C. Cir. 2004); United States v. Quigley, 373
F.3d 133, 139 (D.C. Cir. 2004), it has hardly become our
consistent approach. Cf. Maj. Op. at 8. We have also repeated,
since Graham, that “[w]hile plainly control is one factor in
determining whether someone qualifies as an ‘organizer or
leader,’ the Guidelines include several other factors.” United
States v. Brodie, 524 F.3d 259, 270 (D.C. Cir. 2008); see also
United States v. Wilson, 240 F.3d 39, 122-23 (D.C. Cir. 2001).

     A brief survey of the other circuits’ treatment of § 3B1.1
indicates that “[m]ost courts require that . . . the defendant []
exercise some degree of control over others involved in the
commission of the offense or [that he] have been responsible for

     organizing the offense, the nature and scope of the illegal
     activity, and the degree of control and authority exercised
     over others.
                               3

organizing others for the purpose of carrying out the crime.”
DAVID DEBOLD, PRACTICE UNDER THE FEDERAL SENTENCING
GUIDELINES § 3.04(A)(2)(c) (2013) (emphasis added); see, e.g.,
United States v. Wasz, 450 F.3d 720, 730 (7th Cir. 2006); United
States v. Riley, 335 F.3d 919, 929 (9th Cir. 2003); United States
v. Giraldo, 111 F.3d 21, 24 (5th Cir. 1997). The circuits do vary
somewhat in their approaches. See THOMAS W. HUTCHISON ET
AL., FEDERAL SENTENCING LAW & PRACTICE 1195-97 (2013).
But the approach Clark urges us to adopt would preclude
applying the enhancement when “the defendant played a
coordinating or organizing role,” United States v. Brown, 315
F.3d 929, 932 (8th Cir. 2003) (internal quotation marks and
citation omitted), or when, as here, it is the defendant’s
“expertise alone that made the operation possible,” United States
v. Kelly, 204 F.3d 652, 657-58 (6th Cir. 2000). I cannot
reconcile such an approach with the Guideline.

     The record supports the district court’s finding that Clark
was the “mastermind” of this offense, and I agree with the
majority that “[m]asterminds direct and control others.” Maj.
Op. at 9. That is sufficient, though not in my view necessary, to
affirm the two-level enhancement.