Court Opinion

ID: 4679466
Source: CourtListenerOpinion
Date Created: 2021-04-21 18:00:41.381061+00
Date Added: 2024-06-11T08:03:50.595964
License: Public Domain

Case: 20-10350      Document: 00515830442         Page: 1     Date Filed: 04/21/2021

              United States Court of Appeals
                   for the Fifth Circuit                                 United States Court of Appeals
                                                                                  Fifth Circuit

                                                                                FILED
                                                                            April 21, 2021
                                   No. 20-10350
                                                                           Lyle W. Cayce
                                                                                Clerk
   United States of America,

                                                              Plaintiff—Appellee,

                                       versus

   Chapman Rogers Mays,

                                                           Defendant—Appellant.

                   Appeal from the United States District Court
                       for the Northern District of Texas
                             USDC No. 4:19-CR-350

   Before King, Elrod, and Willett, Circuit Judges.
   Per Curiam:*
          Defendant-Appellant Chapman Rogers Mays was sentenced to an
   above-Guidelines sentence of sixty-months’ imprisonment and ordered to
   pay $1,675,669.44 in restitution after pleading guilty to false bankruptcy
   declaration. On appeal, Mays argues that the factual basis was insufficient to
   support his guilty plea. Alternatively, he argues that his plea agreement is not

          *
            Pursuant to 5th Circuit Rule 47.5, the court has determined that this
   opinion should not be published and is not precedent except under the limited
   circumstances set forth in 5th Circuit Rule 47.5.4.
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                                    No. 20-10350

   binding because the Government breached it; that in the absence of a valid
   plea agreement, the restitution amount was illegal; and that the district
   court’s upward variance was substantively unreasonable. For the reasons
   that follow, we AFFIRM.
                                         I.
          Defendant-Appellant Chapman Roger Mays was appointed under the
   Texas Uniform Transfers to Minors Act (“TUTMA”), Tex. Prop.
   Code § 141.004, as the custodian of his daughter’s royalty-producing oil,
   gas, and mineral interests. Mays set up two bank accounts to facilitate the
   receipt of royalty payments. Over time, Mays misappropriated these funds
   by, inter alia, building a personal home and spending over $180,000 on travel.
   In total, Mays misappropriated over $1.8 million of his daughter’s royalty
   payments.
          During his appointment as custodian of his daughter’s interests, Mays
   filed a voluntary bankruptcy petition in the U.S. Bankruptcy Court for the
   Northern District of Texas. Throughout these bankruptcy proceedings,
   Mays failed to disclose the existence of the two bank accounts where the
   royalty payments were deposited; he did not tell his daughter that he was
   using the funds; and he failed to disclose to the bankruptcy court that he had
   used funds in those accounts for his personal benefit.
          Subsequently, as a result of his conduct, Mays was charged by
   information in the Northern District of Texas with one count of false
   bankruptcy declaration, in violation of 18 U.S.C. § 152(3). Mays waived
   indictment and pleaded guilty pursuant to a plea agreement. Therein, Mays
   agreed to pay restitution to his daughter for all losses resulting from his
   criminal conduct, and the Government agreed to sell the property seized in
   connection with these proceedings and to use the profits from the liquidation

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   toward the restitution amount. Mays also agreed “not to contest, challenge,
   or appeal in any way the government’s disposal of the seized property.”
          At sentencing, the district court calculated Mays’s advisory
   sentencing range under the Sentencing Guidelines as ten- to sixteen-months’
   imprisonment. But, after explaining its reasoning for doing so, the court
   varied upwards from the Guidelines range and imposed a statutory maximum
   sentence of sixty-months’ imprisonment. The court also imposed three years
   of supervised release and ordered the payment of $1,675,669.44 in
   restitution. Mays timely appealed.
          Mays argues on appeal that his guilty plea was unsupported by the
   proffered factual basis. In the alternative, he asserts that his plea agreement
   is not binding because the Government breached the agreement and that, in
   the absence of a valid plea agreement, the restitution amount was illegal. And,
   finally, Mays argues that the district court’s upward variance was
   substantively unreasonable. We address each of these arguments in turn.
                                         II.
      A. Proffered Factual Basis
          We turn first to Mays’s argument that the factual basis for his guilty
   plea was insufficient.
          As Mays did not raise this argument before the district court, our
   review is for plain error. United States v. Ortiz, 927 F.3d 868, 872 (5th Cir.
   2019). To succeed on plain-error review, Mays must show (1) that the district
   court made an error (2) that is clear and obvious, and (3) affected his
   substantial rights. United States v. Avalos-Sanchez, 975 F.3d 436, 439 (5th Cir.
   2020). Once he has shown as much, we still then have “discretion to correct
   the error and will do so only if ‘the error seriously affects the fairness,

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   integrity, or public reputation of judicial proceedings.’” Id. at 439-40
   (quoting United States v. Marek, 238 F.3d 310, 315 (5th Cir. 2001)).
          Our first task under this framework is to determine whether the
   district court erred in accepting Mays’s guilty plea, and, based on this record,
   we conclude that it did not.
          Under Federal Rule of Criminal Procedure 11(b)(3), a district court
   taking a guilty plea must “make certain that the factual conduct admitted by
   the defendant is sufficient as a matter of law to establish a violation of the
   statute to which he entered his plea.” United States v. Trejo, 610 F.3d 308,
   313 (5th Cir. 2010) (emphasis omitted). The factual basis must satisfy each
   element of the crime of conviction. Id.; see also Avalos-Sanchez, 975 F.3d at
   440. In reviewing the factual basis for plain error, we “may look beyond those
   facts admitted by the defendant during the plea colloquy and scan the entire
   record for facts supporting his conviction.” Ortiz, 927 F.3d at 872-73
   (quoting Trejo, 610 F.3d at 313).
          Here, Mays pleaded guilty to false bankruptcy declaration under
   18 U.S.C. § 152(3), which prohibits “knowingly and fraudulently mak[ing] a
   false declaration, certificate, verification, or statement under penalty of
   perjury . . . in or in relation to any case under title 11.” The elements of the
   offense are as follows: “(1) there was a bankruptcy proceeding; (2) defendant
   made a declaration or statement under penalty of perjury in relation to the
   proceeding; (3) the declaration concerned a material fact; (4) the declaration
   was false; and (5) defendant made the declaration knowingly and
   fraudulently.” United States v. Grant, 850 F.3d 209, 214 (5th Cir. 2017)
   (quoting United States v. Spurlin, 664 F.3d 954, 962 (5th Cir. 2011)).
          At issue in this case is only whether the factual basis proffered was
   sufficient to establish that Mays made a false declaration for purposes of
   18 U.S.C. § 152(3). Mays admitted before the district court that he failed to

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   disclose the two accounts and royalty payments in connection with the
   bankruptcy proceeding, 1 and that he did so knowingly and fraudulently.
   Nevertheless, Mays contends that the royalty payments he received as
   custodian of his daughter’s property interests were not part of the bankruptcy
   estate, and so his failure to disclose them did not amount to a false declaration
   under the law.
           18 U.S.C. § 152(3), the provision under which Mays was charged,
   broadly prohibits false statements in connection with a bankruptcy
   proceeding; the false statements need not concern the bankruptcy estate.
   This stands in stark contrast to other criminal bankruptcy statutes that
   explicitly refer to “the estate” or “the estate of a debtor.” 2
           The focus of our inquiry, then, contrary to Mays’s assertions, is not
   whether the royalty payments were ultimately part of the bankruptcy estate,
   but whether omitting them or any other information in connection with the
   bankruptcy proceeding amounted to a false statement. It did.
           A debtor in a bankruptcy proceeding must file, among other things, “a
   schedule of assets and liabilities” and “a statement of the debtor’s financial
   affairs” using the official forms prescribed by the Judicial Conference of the
   United States. 11 U.S.C. § 521(a)(1)(B)(i), (iii); Fed. R. Bankr. P.
   1007(b)(1)(A), (D), 9009(a). Mays did not list the royalty payments on either
   filing. He did this even though his receipt and use of the funds was directly

           1
            Specifically, Mays admitted not only that he failed to list his daughter’s royalties
   “as an asset on his bankruptcy schedules,” but also, broadly, that he “did not disclose that
   he was continuing to collect and use [his daughter’s] royalties for his own benefit.”
           2
             For example, 18 U.S.C. § 152(1) criminalizes the knowing and fraudulent
   concealment of “any property belonging to the estate of a debtor.” Similarly,
   18 U.S.C. § 152(4) prohibits the knowing and fraudulent presentation of false claims for
   proof against “the estate of a debtor.”

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   pertinent to answering certain questions posed by Official Form 7, the
   statement of financial affairs form, which he signed under penalty of perjury.
   See Bankr. Petition at 34, In re Mays, No. 14-44898 (Bankr. N.D. Tex. Dec.
   3, 2014).
          Specifically, question 2 of Official Form 7 asked for income earned in
   the previous two years “other than from employment, trade, profession, or
   operation of the debtor’s business.” See Bankr. Petition at 34, In re Mays, No.
   14-44898 (Bankr. N.D. Tex. Dec. 3, 2014) (listing as a response to the second
   question of Official Form 7, the “Statement of Financial Affairs,” a
   $24,000.00 gift from his father and $500.00 in mineral income); see also In re
   Crumley, 428 B.R. 349, 360 (Bankr. N.D. Tex. 2010) (describing this same
   form and question). As the bankruptcy court in In re Crumley recognized,
   withdrawals from accounts for which the debtor is the custodian under
   TUTMA “fall within the expansive definition of income required by
   Question 2.” 428 B.R. at 362.
          Like Mays was for his daughter, in Crumley, the debtor was the
   custodian under TUTMA of two bank accounts for his minor children. Id.
   The debtor in Crumley used $38,500.00 from the accounts for living expenses
   and construction costs for a home he was building. Id. at 361-62. The
   bankruptcy court reasoned that to the extent the withdrawals were used for
   the benefit of the debtor’s children, as authorized by TUTMA, the
   withdrawals were analogous to child support, which must be reported as
   income under Question 2. Id. at 362. And to the extent the withdrawals were
   not used for the benefit of the children, they were analogous to gifts, which
   also must be reported as income. Id. at 360-62. Hence, under Question 2,
   Mays was obligated to disclose his use of funds from his daughter’s accounts
   as income. He failed to do so, and this omission amounts to a false statement
   under § 152(3). See, e.g., United States v. Theall, 525 F. App’x 256, 265 (5th
   Cir. 2013) (“To obtain a conviction, the Government had to show that the

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   [defendants] ‘knowingly and fraudulently’ failed to disclose that
   information.”) (citing to 18 U.S.C. § 152(3)).
          Further, in Mays’s amended Official Form 6D, particularly Schedule
   F inquiring about all creditors holding unsecured nonpriority claims, Mays
   stated that he was “custodian for [his] daughter’s mineral trust” and that he
   “took [a] loan from [her] trust to pay for legal and household expenses.” He
   stated that the loan totaled $55,000.00. Mays declared, under penalty of
   perjury, that the information contained in this form was true and correct. But
   as part of the factual resume supporting his plea, Mays admitted to having
   used his daughter’s royalties for personal expenses totaling over $1.8 million.
   He admitted that he did not disclose that he controlled and used these funds
   in his creditor schedules. And his failure to list his daughter as an unsecured
   creditor as to the two accounts and the royalty payments he took had the
   effect of concealing from her the full extent of her claim against him. This
   omission amounts to a false statement under § 152(3). See Theall, 525 F.
   App’x at 265-66.
          Because Mays failed to disclose royalty payments in his statement of
   financial affairs and in his unsecured creditor schedule, a sufficient factual
   basis existed to establish each element of the relevant offense, and the district
   court did not err in accepting his guilty plea.
      B. Validity of Plea Agreement
          Having established that Mays’s guilty plea is valid, we turn to his
   argument that his plea agreement is not because the Government breached it
   by failing to make sure the proceeds from property it seized were deducted
   from the restitution amount in the judgment. Pursuant to a warrant, the
   Government seized an airplane, funds from various bank accounts, and
   several pieces of jewelry from Mays. Rather than pursue forfeiture of the

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   property, the Government agreed to apply the proceeds from its sale to
   Mays’s restitution obligations.
           But the Marshals Service did not conduct the sale of the property
   before Mays was sentenced, and at sentencing, the district court ordered
   Mays to pay $1,675,669.44 in restitution to his daughter, without making any
   concessions based on the value of the seized property.
           On appeal, Mays contends that the Government was obligated to
   ensure that the value of the seized property was reflected in the judgment. As
   with his previous argument, Mays failed to object to the Government’s
   breach before the district court, and so our review is again for plain error. See
   United States v. Cluff, 857 F.3d 292, 297 (5th Cir. 2017). 3
           Plea agreements are interpreted according to general principles of
   contract law. Id. at 298. In determining whether the Government breached
   the plea agreement, the inquiry is “whether the government’s conduct is
   consistent with the defendant’s reasonable understanding of the
   agreement.” Id. (quoting United States v. Pizzolato, 655 F.3d 403, 409 (5th
   Cir. 2011)).
           Under the plea agreement’s plain terms, the parties merely agreed to
   apply the proceeds from the seized property to Mays’s restitution obligation.
   The Government did not promise that the property would be sold before
   sentencing nor did it promise that the judgment would reflect the value of the
   property. The plea agreement cites United States v. Messervey, 182 F. App’x
   318, 319 (5th Cir. 2006), and summarizes the opinion’s holding as “affirming

           3
           Although Mays “agree[d] not to contest, challenge, or appeal in any way the
   government’s disposal of the seized property,” appeal waivers do not bar claims that the
   Government breached a plea agreement. United States v. Purser, 747 F.3d 284, 289 (5th Cir.
   2014). Mays’s argument is thus properly before us.

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   order for property seized but not forfeit[ed] to be applied to judgment debt.”
   In Messervey, the seized property was not scheduled to be sold until after the
   appeal became final. Id. at 320. On appeal, we rejected the petitioner’s
   argument that the seized property should be returned due to the absence of a
   written agreement concerning restitution where the parties had agreed in
   open court to a post-judgment sale of the seized property to satisfy
   restitution. Id.
            With the cite to Messervey, then, the plea agreement in this case
   reasonably contemplated that the seized property would be sold after the
   judgment was entered. Based on this and the plain terms of the plea
   agreement, “the government’s conduct is consistent with the defendant’s
   reasonable understanding of the agreement.” Pizzolato, 655 F.3d at 409
   (quoting United States v. Elashyi, 554 F.3d 480, 501 (5th Cir. 2008)). That is
   to say, Mays could not have reasonably understood the plea agreement as
   providing that the seized property would be applied to the restitution pre-
   judgment. Cf. id. at 409-10 (concluding that the reasonable understanding of
   a plea agreement was that the Government agreed only to a particular
   sentencing range and not a particular sentence and that the defendant “could
   not have reasonably understood the plea agreement as providing
   otherwise”). We can identify no “error or defect—[nor any] sort of
   ‘[d]eviation from a legal rule.’” Puckett v. United States, 556 U.S. 129, 135
   (2009) (quoting United States v. Olano, 507 U.S. 725, 732-33 (1993)). All
   property that was seized can still be sold and the proceeds of that sale can still
   be applied in accordance with the plea agreement’s terms. Therefore, the
   Government has not breached the plea agreement, and Mays’s challenge to
   the district court’s order of restitution, predicated on this alleged breach,
   fails.

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       C. Upward Variance
           At last, we turn to Mays’s challenge of his sixty-month sentence as
   substantively unreasonable. Mays preserved this claim by arguing for a
   shorter sentence below, so review is for abuse of discretion. 4 Holguin-
   Hernandez v. United States, 140 S. Ct. 762, 766 (2020); see also Gall v. United
   States, 552 U.S. 38, 56 (2007).
           We must first ensure that the district court’s actions below did not
   amount to a “significant procedural error, such as failing to calculate (or
   improperly calculating) the Guidelines range, treating the Guidelines as
   mandatory, failing to consider the § 3553(a) factors, selecting a sentence
   based on clearly erroneous facts, or failing to adequately explain the chosen
   sentence—including an explanation for any deviation from the Guidelines
   range.” Gall, 552 U.S. at 51.
           If we conclude that the district court’s determinations below were
   procedurally sound, we then consider the substantive reasonableness of the
   sentence imposed. In imposing a sentence, a district court must consider the
   factors listed in 18 U.S.C. § 3553(a). “A sentence is unreasonable when it (1)
   does not account for a factor that should have received significant weight, (2)
   gives significant weight to an irrelevant or improper factor, or (3) represents
   a clear error of judgment in balancing the sentencing factors.” United States
   v. Gutierrez, 635 F.3d 148, 154 (5th Cir. 2011). Whether a sentence is
   reasonable depends on “the totality of the circumstances, including the
   extent of any variance from the Guidelines range.” Gall, 552 U.S. at 51. “The
   farther a sentence varies from the applicable Guideline sentence, the more

           4
             Because we conclude that the district court did not abuse its discretion in
   imposing a sixty-month sentence, we need not decide whether some of Mays’s specific
   arguments might be subject to plain-error review. See United States v. Holguin-Hernandez,
   955 F.3d 519, 520 n.1 (5th Cir. 2020).

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   compelling the justification based on factors in section 3553(a) must be.”
   United States v. McElwee, 646 F.3d 328, 343 (5th Cir. 2011) (quoting United
   States v. Smith, 440 F.3d 704, 707 (5th Cir. 2006)). But, nevertheless, the
   district court’s sentence, including its decision to vary, is owed significant
   deference. Id.; Gutierrez, 635 F.3d at 154.
          To begin, it is clear that the district court’s determinations below were
   procedurally sound. Mays argues, however, that his sentence was
   substantively unreasonable because the district court improperly considered
   uncharged conduct in varying upward “to provide just punishment for the
   offense” under § 3553(a). Specifically, Mays contends that his
   misappropriation of royalty payments from his daughter was not part of the
   false bankruptcy declaration “offense” as that term is used in § 3553(a) and
   therefore should not have factored into his sentence.
          Even accepting Mays’s characterization of the misappropriation of his
   child’s funds as “uncharged conduct” as accurate—and we do not suggest
   that it is—the district court may consider uncharged conduct at sentencing,
   so long as there is a sufficient connection between said conduct and the
   charged offense. See United States v. Newsom, 508 F.3d 731, 735 (5th Cir.
   2007) (discussing that the Guidelines allow a court to consider uncharged
   conduct that is at least “remote[ly] connect[ed]” with the offense of
   conviction for an “upward departure”); see also U.S. Sent’g Guidelines
   Manual § 1B1.1 cmt. n.1(I) (U.S. Sent’g Comm’n 2018) (defining “offense”
   as “the offense of conviction and all relevant conduct under § 1B1.3 (Relevant
   Conduct) unless a different meaning is specified or is otherwise clear from
   the context”) (emphasis added). The papers accompanying the charging
   instrument in this case indicate that the charges were filed because Mays did
   not disclose the two accounts and royalty payments on his bankruptcy
   schedules and “did not disclose that he was continuing to collect and use [his
   daughter’s] royalties for his own benefit.” The connection between Mays’s

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   misappropriation of funds and the offense to which he pleaded guilty—false
   bankruptcy declaration under 18 U.S.C. § 152(3)—is sufficient. The district
   court therefore did not abuse its discretion in considering Mays’s
   misappropriation of funds from his daughter at sentencing.
          Mays also argues that the district court abused its discretion by
   varying upward based on the need “to afford adequate deterrence to criminal
   conduct” under § 3553(a). Mays emphasizes that he has already been
   removed as custodian of his daughter’s accounts and will be unable to
   misappropriate funds from her in the future. But Mays neglects to mention
   that after he was removed as custodian, he cashed an $8,900 check that
   should have been turned over to the new custodian—a fact that the district
   court specifically relied on as a reason to vary upward. Further, § 3553(a)
   considers general deterrence directed to the public at large, not just specific
   deterrence directed to the particular defendant. United States v. Stafford, 983
   F.2d 25, 28 (5th Cir. 1993) (discussing the goals of sentencing); see also U.S.
   Sent’g Guidelines Manual ch. 4, pt. A, introductory cmt. (U.S. Sent’g
   Comm’n 2018) (“General deterrence of criminal conduct dictates that a
   clear message be sent to society that repeated criminal behavior will aggravate
   the need for punishment with each recurrence.”). Therefore, the district
   court did not abuse its discretion in varying upward to achieve adequate
   deterrence.
                                        III.
          For the foregoing reasons, we AFFIRM.

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