Court Opinion

ID: 202099
Source: CourtListenerOpinion
Date Created: 2011-02-07 05:44:27+00
Date Added: 2024-06-11T17:27:24.106914
License: Public Domain

United States Court of Appeals
                        For the First Circuit

No. 05-1822

                      UNITED STATES OF AMERICA,

                              Appellee,

                                  v.

              JUAN MANUEL CRUZADO-LAUREANO, a/k/a Manny,

                        Defendant, Appellant.

          APPEAL FROM THE UNITED STATES DISTRICT COURT

                   FOR THE DISTRICT OF PUERTO RICO

         [Hon. José Antonio Fusté, U.S. District Judge]

                                Before

                          Boudin, Chief Judge,
                     Stahl, Senior Circuit Judge,
                       and Lynch, Circuit Judge.

     Alexander Zeno for appellant.
     Thomas F. Klumper, Assistant United States Attorney, with
whom H. S. Garcia, United States Attorney, and Nelson Pérez-Sosa,
Assistant United States Attorney, were on brief, for appellee.

                            March 14, 2006
              STAHL, Senior Circuit Judge.           In 2002, a jury convicted

Juan Manuel Cruzado-Laureano, the former mayor of Vega Alta, Puerto

Rico, on a broad slate of corruption-related charges.                   Through a

variety      of   schemes,   Cruzado     extorted     funds    from    government

contractors and embezzled funds that belonged in the city coffers.

Although we sustained his convictions in an earlier appeal, we

vacated his sentence because it was imposed under the wrong version

of the United States Sentencing Guidelines.                After resentencing,

Cruzado      is   back   before    us   in    this   appeal,    contesting    the

applicability of particular provisions of the Guidelines to the

facts of his case.           In large part, the district court acted

properly in imposing Cruzado's sentence. However, we find that the

district court impermissibly increased Cruzado's sentence on the

basis of two provisions that dealt with his abuse of his elected

office. We therefore vacate the sentence and once again remand for

re-sentencing.

                                  I. Background

              This case comes to us on appeal for the second time.            The

facts of the case are laid out extensively in our prior opinion,

see United States v. Cruzado-Laureano, 404 F.3d 470, 473-80 (1st

Cir. 2005), and we need not rehearse them here in any great detail.

Briefly put, Juan Manuel "Manny" Cruzado-Laureano has had a varied

career. A high-school mathematics teacher for seven years early on

in   life,    Cruzado    later    worked     16   years   in   the    construction

                                        -2-
industry, four as an administrator in his wife's dental practice,

and five as the owner and manager of a check-cashing business.                     In

November    2000,    Cruzado      was   elected       mayor   of   Vega   Alta,    a

municipality in Puerto Rico.             Almost immediately after taking

office, Cruzado began extorting and laundering money by, among

other   things,     demanding     kickbacks     on    municipal    contracts      and

redirecting funds intended for the government into his own pocket.

Cruzado    would    clear   the   extorted     money     through   his    own   bank

account, through his old check-cashing business (now owned by his

son), or through the accounts at his wife's dental practice.                    The

Federal    Bureau    of   Investigation       began    investigating      Cruzado's

conduct in 2001, and an initial indictment was issued in October of

that year.     During the course of the investigation and after the

initial indictment was handed down, Cruzado compounded his legal

troubles by attempting to tamper with three potential witnesses

against him.

            A 14-count superseding indictment was returned on January

25, 2002.      The indictment charged Cruzado with one count of

embezzlement under 18 U.S.C. § 666(a)(1)(A)(i) and (a)(1)(A)(ii)

(2000); six counts of extortion under § 1951(a); six counts of

money laundering under § 1956(a)(1)(B)(i) and (a)(1)(B)(ii); and

one count of tampering with a witness under § 1512(b)(1) and

(b)(2).    After the close of evidence, the court dismissed one of

the money-laundering charges, and the jury eventually returned a

                                        -3-
verdict of not guilty on one of the extortion charges.             Cruzado was

convicted by the jury on each of the remaining twelve charges.

            The district court imposed a 63-month sentence.1            In his

earlier appeal, Cruzado unsuccessfully challenged his conviction on

a number of grounds not relevant here. Cruzado prevailed, however,

on his claim that the district court applied the wrong version of

the Sentencing Guidelines.         The court had sentenced Cruzado under

the 2000 edition of the Guidelines.         We held that it ought to have

relied on the 2002 Guidelines, and so vacated the sentence and

remanded the case for resentencing. On remand, the court performed

the sentencing calculation anew under the 2002 Guidelines.2

            Section   2C1.1   of    the   Guidelines   provides     sentencing

guidance for "Offering, Giving, Soliciting, or Receiving a Bribe;

Extortion   Under     Color   of   Official   Right,"    and   §    2S1.1   for

"Laundering    of     Monetary     Instruments;   Engaging     in     Monetary

Transactions in Property Derived from Unlawful Activity."               Money

laundering is, generally speaking, a derivative offense: money

needs to be laundered because it was illegally derived.                     In

recommending a sentence for money laundering under § 2S1.1, the

     1
      The court also imposed a one-year sentence for the
witness-tampering charge, to run concurrently with the 63-month
sentence imposed for the rest of the charges.
     2
      The court imposed the new sentence after the Supreme Court's
decision in United States v. Booker, 543 U.S. 220 (2005), which
rendered the Guidelines advisory.        It nevertheless imposed
sentence based on the Guidelines recommendation.

                                      -4-
Guidelines take as the base offense level the full computed offense

level relevant to the underlying offense. In making its sentencing

calculation, the district court proceeded by:

1)        turning from the money laundering provision, § 2S1.1,3 to

          the provision for the underlying offense, § 2C1.1;4

2)        determining the base offense level for extortion offenses

          under § 2C1.1(a);

3)        adjusting that level upward according to the rules for

          specific offense characteristics applicable under the

          extortion guideline, § 2C1.1(b);

4)        taking the resulting final offense level for extortion as

          the base offense level for money laundering under §

          2S1.1(a);

5)        applying additional enhancements specified by the money

          laundering guideline under § 2S1.1(b);

     3
      In the 2002 Guidelines Manual, § 2S1.1 read in relevant part:
"Base Offense Level: . . . The offense level for the underlying
offense from which the laundered funds were derived . . . ," §
2S1.1(a)(1); "If the defendant was convicted under 18 U.S.C. §
1956, increase by 2 levels," § 2S1.1(b)(2)(B).
     4
      In 2002, § 2C1.1 read in relevant part: "Base Offense Level:
10," § 2C1.1(a); "If the offense involved more than one bribe or
extortion, increase by 2 levels," § 2C1.1(b)(1); "If the offense
involved a payment for the purpose of influencing an elected
official or any official holding a high-level decision-making or
sensitive position, increase by 8 levels," § 2C1.1(b)(2)(B).

                               -5-
6)          applying additional enhancements under relevant general

            adjustment provisions laid out in Chapter Three of the

            Guidelines Manual.

            Thus, the district court started with a base offense

level of 10, specified         by § 2C1.1(a) as the base offense level for

extortion.   It applied a two-level enhancement under § 2C1.1(b)(1)

because the offense involved more than one incident of extortion,

and an eight-level enhancement under § 2C1.1(b)(2)(B) because the

extortion involved a payment for the purpose of influencing an

elected decision-making official.            The final offense level under §

2C1.1 was thus 20.        Under § 2S1.1(a), level 20 became the base

offense level for the money laundering, to which the court applied

an additional two-level enhancement under § 2S1.1(b)(2)(B) because

the offense involved a conviction under the money laundering

statute, 18 U.S.C. § 1956.

            The court then turned to the general-purpose adjustment

provisions of Chapter Three, and found two applicable.            The court

applied a two-level enhancement for abuse of a position of public

trust    under   §   3B1.3,5    and   another   two-level   enhancement   for

     5
      In 2002, § 3B1.3 read in relevant part: "If the defendant
abused a position of public or private trust, or used a special
skill, in a manner that significantly facilitated the commission or
concealment of the offense, increase by 2 levels. This adjustment
may not be employed if an abuse of trust or skill is included in
the base offense level or specific offense characteristic."       §
3B1.3.

                                       -6-
obstruction of justice under § 3C1.1.6     Cruzado's final offense

level under these calculations was 26, and the court determined

that he fell into criminal history category I. Taken together, the

offense level and criminal history category produced a recommended

sentence of 63-78 months.   See USSG Ch.5, Pt.A (Sentencing Table).

This recommended sentence was no shorter and potentially longer

than the 63 months to which Cruzado had originally been sentenced.

The court decided that Cruzado ought not to suffer for having

exercised his right of appeal, and imposed a sentence identical to

the one earlier imposed.    Cruzado timely brought this appeal,

challenging the district court's application of several provisions

of the Guidelines.7

                      II. Legal Challenges

          On a challenge to a sentence imposed on the basis of a

Guidelines recommendation, we "determine the legal meaning of

     6
      In 2002, § 3C1.1 read: "If (A) the defendant willfully
obstructed or impeded, or attempted to obstruct or impede, the
administration of justice during the course of the investigation,
prosecution, or sentencing of the instant offense of conviction,
and (B) the obstructive conduct related to (I) the defendant's
offense of conviction and any relevant conduct; or (ii) a closely
related offense, increase the offense level by 2 levels." § 3C1.1.
     7
      Cruzado also challenges the court's order requiring payment
of restitution and a fine, and ordering supervised release, but in
too perfunctory a manner to permit us to evaluate the merits of
those aspects of his punishment.      "[I]ssues adverted to in a
perfunctory manner, unaccompanied by some effort at developed
argumentation, are deemed waived." United States v. Zannino, 895
F.2d 1, 17 (1st Cir. 1990).

                                -7-
Guidelines provisions de novo."      United States v. Robinson, 433

F.3d 31, 35 (1st Cir. 2005).

A. Extortion by an Elected Official

          The district court increased Cruzado's offense level by

eight points under § 2C1.1(b)(2)(B), which states: "If the offense

involved a payment for the purpose of influencing an elected

official or any official holding a high-level decision-making or

sensitive position, increase by 8 levels."    Cruzado was convicted

for being on the receiving end of various corrupt pay-offs, and he

argues that this provision only applies when a defendant has made,

rather than received, the payment.    Nothing in the quoted language

suggests that this is so.   The provision reflects the Sentencing

Commission's determination that the abuse of a position of great

public trust, or the effort to corrupt a person holding such a

position, is more dangerous than the corruption of, for example, a

housing inspector or tax assessor.      The eight-level increase is

mandated for a defendant precisely like the defendant here, an

elected official who abuses his position.      Extortion "involves"

payments intended to influence the behavior of the extortioner just

as clearly as bribery "involves" payments intended to influence the

bribe-taker.8   See United States v. Bynum, 327 F.3d 986, 993-94

(9th Cir. 2003); United States v. Villafranca, 260 F.3d 374, 381-82

     8
      Nor is the rule of lenity applicable, as Cruzado claims:
there is nothing at all ambiguous in § 2C1.1.

                               -8-
(5th Cir. 2001).    The district court correctly applied an eight-

level enhancement under § 2C1.1(b)(2)(B).

B.   Incorporation of a Referenced Guideline

           Section 2S1.1 of the Sentencing Guidelines, which applies

to money laundering, directs the sentencing court to take as the

base offense level for purposes of § 2S1.1 the full calculated

offense level that applies to the offense which produced the

laundered funds.    See § 2S1.1(a) ("Base Offense Level" for money

laundering is "[t]he offense level for the underlying offense from

which the laundered funds were derived").       Here, this instruction

meant   that,   before   considering    what   money-laundering-related

adjustments to apply to Cruzado's sentence, the court first had to

calculate the sentence as it would have applied to the extortion

counts standing alone, making reference to § 2C1.1.        It was only

then required to return to § 2S1.1 (and specifically to § 2S1.1(b))

to determine if further adjustments were necessary under that

provision. In this case, having calculated the final offense level

for the extortion offenses under § 2C1.1 and applied it as the base

offense level for money laundering under § 2S1.1, the district

court went on to find that a further two-level enhancement was

warranted under § 2S1.1(b)(2)(B), because Cruzado was convicted of

money laundering under 18 U.S.C. § 1956.

           Cruzado contends that, having once turned from § 2S1.1 to

§ 2C1.1 under the direction of § 2S1.1(a), the district court

                                  -9-
should not have turned back to a consideration of the special

offense characteristics under § 2S1.1(b), but this is flatly

incorrect.    As is generally the case among the offense guidelines

specified    in   Chapter    Two   of    the   Guidelines   Manual,   §   2S1.1

contemplates      that      the    adjustments      for     special   offense

characteristics specified in its part (b) will be applied after the

base offense level specified in its part (a) has been calculated,

whether or not that base offense level is calculated by reference

to another provision of the Guidelines.9                  The district court

rightly applied the special offense characteristic provisions of §

2S1.1(b) after finishing its § 2C1.1 calculations.

C. Abuse of Trust

            The district court applied a two-level abuse-of-trust

enhancement under § 3B1.3. That section calls for such an increase

"[i]f the defendant abused a position of public or private trust .

. . in a manner that significantly facilitated the commission or

     9
      Section 1B1.5 provides instructions for reading a guideline
that refers to another guideline. That section directs that "[a]n
instruction to use the offense level from another offense guideline
refers to the offense level from the entire offense guideline." §
1B1.5(b)(1).   This provision meant here that, where § 2S1.1(a)
incorporated the offense level for extortion as the base offense
level for money laundering, it incorporated the final calculated
offense level for the extortion, which was 20, and not merely the
unadjusted base offense level for extortion, which would have been
10.   Cruzado argues that the instruction under § 1B1.5 that §
2S1.1(a) be read to incorporate the "entire offense guideline"
specified at § 2C1.1 precluded making further adjustments under the
remainder of § 2S1.1, but this reading of § 1B1.5 is simply
implausible.

                                        -10-
concealment of the offense."    § 3B1.3.   It cautions, however, that

"[t]his adjustment may not be employed if an abuse of trust or

skill is included in the base offense level or specific offense

characteristic."   Id.   This second provision bars application of a

§ 3B1.3 abuse-of-trust enhancement to a case in which any provision

that increases a sentence for an offender who holds high public

office already applies.    This is such a case.

          The district court here evidently found the § 3B1.3

abuse-of-trust provision applicable because Cruzado had used the

power of his high office in extorting and embezzling funds.10 Abuse

of high office was the same concern, however, that justified the

application of an eight-level enhancement under § 2C1.1(b)(2)(B).

Section 3B1.3 and § 2C1.1(b)(2)(B) both increase a defendant's

sentence for abusing a position of trust, and by the terms of §

3B1.3 cannot both be applied to increase the same defendant's

sentence.11

     10
      While the court did not explain in detail its reasons for
imposing the § 3B1.1 abuse-of-trust enhancement, it is evident that
it did so because it considered Cruzado's use of his high office to
facilitate his wrongdoing to trigger the guideline provision, and
this is indeed a typical understanding of the provision.       See,
e.g., United States v. Sarault, 975 F.2d 17 (1st Cir. 1992) (noting
that former mayor had been determined to have merited, and had not
challenged, § 3B1.3 abuse-of-trust enhancement for role in
corruption scheme).
     11
      The Sentencing Commission itself appears to recognize that
§ 2C1.1(b)(2)(B) and § 3B1.3 are redundant, for in the application
notes to § 2C1.1, the Commission directs that when sentencing under
the provisions of § 2C1.1, a sentencing court should "not apply §
3B1.3 (Abuse of Position of Trust or Use of Special Skill)." §

                                 -11-
           In arguing in favor of the § 3B1.3 enhancement, the

Government   relies      primarily    on     an   application     note   to   the

laundering guideline, which says that in cases where the offense

level is determined by reference to the guideline for another

offense, "application of any Chapter Three adjustment shall be

determined based on the offense covered by this guideline (i.e.,

the   laundering    of   criminally      derived   funds)   and    not   on   the

underlying offense from which the laundered funds were derived."

§ 2S1.1 cmt. n.2(C).          At first blush, one might read this to

suggest that in this case the calculation under the extortion

guideline, including its abuse-of-trust enhancement, should simply

be ignored when it comes to considering the § 3B1.3 adjustment, and

instead one should simply ask the mechanical question whether in

his money laundering activities a defendant abused a position of

trust.   In answer to that question, the district court apparently

found that Cruzado's official position facilitated not only his

extortion but also his money laundering.                Cruzado attacks the

latter conclusion, but it seems plausible enough to us.

           The     weakness   of   the     Government's     larger    argument,

however, is that the § 3B1.3 abuse-of-trust enhancement, as we have

noted, "may not be employed if an abuse of trust . . . is included

in the base offense level or specific offense characteristic."                 §

2C1.1 cmt. n.3. We do not rely on the application note in reaching
our decision, however, but on the plain language of § 3B1.3.

                                      -12-
3B1.3.         While   application     note    2(C)    to   the     money-laundering

guideline       provides    that    Chapter    Three       adjustments     should    be

determined with reference to the money-laundering offense and not

to   the   underlying      offense,    the    fact    remains       that   the   money-

laundering offense level was itself determined pursuant to a cross-

reference that already required an upward adjustment based on abuse

of   trust--thereby        literally    triggering      the    prohibition       ("This

adjustment may not be employed . . .") which we have just quoted.

               Although      double-counting          is      not      automatically

impermissible under the Guidelines (and is sometimes intentionally

directed), we can see no particular reason why one would want

double-counting in this situation.             For these reasons, we conclude

that   the      district   court    erred     in   applying     an    abuse-of-trust

enhancement under § 3B3.1.

                                   III. Conclusion

               Having determined that the court's interpretation of the

Guidelines was legally erroneous, see Robinson, 433 F.3d at 35, we

must again send the case back to the district court.                       See United

States v. Plaza-Garcia, 914 F.2d 345, 347 (1st Cir. 1990); 18

U.S.C.     §    3742(f)(1)     (requiring      that     incorrectly        calculated

sentences be remanded).         In remanding the case, we do not intend to

intimate that the length of the sentence should necessarily be

changed; what matters is that the premise as to the Guideline range

must be correct.

                                        -13-
          The sentence imposed by the district court is vacated and

the case is remanded for resentencing.

                               -14-