Court Opinion

ID: 1037456
Source: CourtListenerOpinion
Date Created: 2013-08-12 20:09:22.45943+00
Date Added: 2024-06-11T12:34:48.133124
License: Public Domain

NOT FOR PUBLICATION

                    UNITED STATES COURT OF APPEALS                            FILED
                            FOR THE NINTH CIRCUIT                             AUG 12 2013

                                                                          MOLLY C. DWYER, CLERK
                                                                            U.S. COURT OF APPEALS

UNITED STATES OF AMERICA,                        No. 11-50245

              Plaintiff - Appellee,              D.C. No. 2:06-cr-00909-R-1

  v.
                                                 MEMORANDUM*
STEVEN M. FERGUSON,

              Defendant - Appellant.

                   Appeal from the United States District Court
                      for the Central District of California
                    Manuel L. Real, District Judge, Presiding

                     Argued and Submitted December 7, 2012
                              Pasadena, California

Before: PREGERSON, PAEZ, and HURWITZ, Circuit Judges.

       Defendant Steven M. Ferguson appeals his sentence imposed following his

jury convictions for three counts of mail fraud (18 U.S.C. § 1341), five counts of

travel fraud (18 U.S.C. § 2314), five counts of promotion of unlawful activity with

criminal proceeds (18 U.S.C. § 1956(a)(1)(A)(i)), two counts of engaging in

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
monetary transactions with criminally derived proceeds (18 U.S.C. § 1957), six

counts of obstruction of justice (18 U.S.C. § 1503), and two counts of tax evasion

(26 U.S.C. § 7201; 18 U.S.C. § 2). We have jurisdiction under 18 U.S.C. § 3742

and 28 U.S.C. § 1291, and we affirm in part, vacate in part, and remand for

resentencing.

(1)   The district court did not violate Rule 32 by failing to resolve a factual

dispute relevant to the court’s sentencing determination because Ferguson did not

actually dispute the accuracy of the relevant factual statements in the PSR. Rather,

Ferguson raised a legal objection as to whether the obstruction counts related to the

other charged offenses for purposes of the 2-level enhancement under U.S.S.G.

§ 3C1.1 (2001). Such a claim does not put facts in the PSR in dispute within the

meaning of Rule 32, and we find no error.

(2)   The district court erred in grouping the obstruction counts with the fraud

counts under U.S.S.G. § 3D1.2(c) (2001) and applying the two-level enhancement

for obstruction to the grouped counts under § 3C1.1 as recommended by the PSR.

The PSR recommended grouping the obstruction counts with the mail fraud and

travel counts “because they embody conduct that was treated as a specific offense

characteristic, or other adjustment, to the guideline applicable to the money

laundering counts,” citing U.S.S.G. § 3D1.2(c) (2001). The PSR further noted that

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the obstruction counts grouped with the “underlying mail fraud, travel, and money

laundering counts” pursuant to Application Note 8 to U.S.S.G. § 3C1.1 and

U.S.S.G. § 3D1.2(c). The PSR then recommended application of a two-level

increase to the offense level because the obstruction counts grouped with the

“related underlying counts.” The district court adopted these recommendations.

      The district court erred in relying on Application Note 8 to U.S.S.G. § 3C1.1

(2001). United States v. DeGeorge, 380 F.3d 1203, 1222 (9th Cir. 2004). Note 8

explains how the adjustment for obstructive conduct applies when a defendant is

convicted of a separate obstruction offense that takes place “during the course of

the investigation, prosecution, or sentencing of the instant offense of conviction.”

U.S.S.G. § 3C1.1 (2001).The obstructive conduct here did not occur with respect to

the mail fraud or money laundering offenses, but during a separate civil forfeiture

proceeding. Linking the obstructive conduct during the civil forfeiture proceeding

with the criminal investigation into the money laundering and fraud offenses

“serv[es] only to make Note 8 inconsistent with the text of § 3C1.1 itself, which

requires the perjury to occur ‘during the course of the [criminal] investigation.’”

DeGeorge, 380 F.3d at 1222.

      There is not a sufficient nexus of relatedness between the civil forfeiture

proceeding where the obstructive conduct occurred and the mail fraud and money

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laundering counts merely because the proceeds from the latter were used to

purchase the house. The purchase of the house was not alleged in the indictment as

conduct underlying any of the fraud or money laundering counts.

      Nor does our case law support the government’s theory that there was a

sufficient relationship because the criminal investigation into the fraud scheme

began before the civil forfeiture action. The clauses in § 3C1.1 are conjunctive: “If

(A) the defendant [obstructed 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 conduct1; or (ii) a closely related offense2, increase the offense level by 2

levels” (emphasis added). The obstructive conduct thus must be related to the

      1
       “Relevant conduct” is defined in U.S.S.G. § 1B1.3(1) (2001) as “all acts
and omissions committed, aided, abetted, counseled, commanded, induced,
procured, or willfully caused by the defendant . . . that occurred during the
commission of the offense of conviction, in preparation for that offense, or in the
course of attempting to avoid detection or responsibility for that offense.” Section
1B1.3(2) limits that “solely with respect to offenses of a character for which
§ 3D1.2(d) would require grouping of multiple counts, all acts and omissions
described [in subdivision (1)] that were part of the same course of conduct or
common scheme or plan as the offense of conviction.” Subdivision (2) only relates
to counts grouped under § 3D1.2(d), which is not at issue in this case.
      2
       A “closely related” case is “such as that of a co-defendant.” U.S.S.G.
§ 3C1.1, Application Note 1 (2001). In supplemental briefing, the government
disclaimed that the enhancement was applied under § 3C1.1(B)(ii).

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offense of conviction or a closely related offense and have taken place during the

course of the investigation of the instant offense of conviction. See, e.g., Williams,

693 F.3d at 1071, 1076.3

      Nor is grouping mandatory under § 3D1.2(c), which applies when “counts

involv[e] substantially the same harm,” meaning “when one of the counts

embodies conduct that is treated as a specific offense characteristic in, or other

adjustment to, the guideline applicable to another of the counts.”4 Obstructive

conduct is not a “specific offense characteristic” listed in the Guideline used to

calculate the base offense level for the fraud charges. U.S.S.G. § 2B1.1 (2001). Nor

is it an “adjustment to” the fraud guideline under § 3C1.1 where that enhancement

does not apply. None of the application notes to § 3C1.1 discuss adding the

enhancement to charges grouped under any provision other than § 3D1.2(c).

      Accordingly, we vacate the sentence and remand for resentencing without

grouping the obstruction counts with the fraud and money laundering accounts

      3
       See also Application Note 7 to § 3C1.1“[T]his adjustment is not to be
applied to the offense level for that offense except if a significant further
obstruction occurred during the investigation, prosecution, or sentencing of the
obstruction offense itself.”
      4
        The government’s argument that Ferguson’s wrongful conduct as alleged in
the civil forfeiture proceeding and the indictment involve the same victims and
substantially the same harm is unavailing, as that would invoke grouping under
U.S.S.G. § 3D1.2(b), which was not the basis for grouping in this case.

                                          5
under U.S.S.G. § 3D1.2(c), and without the application of the § 3C1.1

enhancement. Remand for resentencing is on an open record. United States v.

Matthews, 278 F.3d 880, 885 (9th Cir. 2002).

(3)   The district court did not abuse its discretion by imposing supervised release

condition number 10, a complete ban on self-employment. The court specifically

noted at re-sentencing that the self-employment condition was “based upon the

court’s concern that defendant is an economic danger to the community. The

evidence at trial convinces this court that the defendant’s fraud scheme could be

repeated by defendant where no supervision is available to his conduct in

business.”

(4)   Ferguson did not object in the district court to the imposition of other special

conditions. Thus, we review his appeal of special conditions 6, 9, and 13 for plain

error. United States v. Daniels, 541 F.3d 915, 927 (9th Cir. 2008).

      Conditions 6 and 9 are not plain error affecting Ferguson’s substantial rights,

and we affirm the imposition of those conditions.

      We vacate Condition 13, delegating to the probation officer the

determination of how any windfall money should be applied to restitution, as

contrary to United States v. Betts, 511 F.3d 872, 876–77 (9th Cir. 2007).

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(5)   We vacate the order of restitution to the IRS and remand to the district court

to enter the order of restitution pursuant to 18 U.S.C. §§ 3663, 3663A, including

the total amount of restitution due and amount of payments if restitution is awarded

to the IRS as a condition of supervised release. See United States v. Batson, 608

F.3d 630, 632–33 (9th Cir. 2010) (holding that restitution for a Title 26 offense

may be imposed under 18 U.S.C. §§ 3663 and 3663A as a condition of supervised

release). Otherwise, restitution is not authorized for non-Title 18 offenses. United

States v. Elias, 269 F.3d 1003, 1021, supplemented 27 F. App'x 750 (9th Cir.

2001).

      We reject Ferguson’s request that this case be assigned to a different judge

on remand. Remand to a new judge is reserved for “unusual circumstances,”

United States v. Arnett, 628 F.2d 1162, 1165 (9th Cir.1979), and those

circumstances are not present here.

      We AFFIRM in part, VACATE in part, and REMAND for resentencing in

accordance with this disposition.

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