Court Opinion

ID: 194615
Source: CourtListenerOpinion
Date Created: 2011-02-07 02:21:15+00
Date Added: 2024-06-11T09:43:09.424982
License: Public Domain

March 19, 1993
                  UNITED STATES COURT OF APPEALS
                      For The First Circuit
                                           

No. 92-1668

                    UNITED STATES OF AMERICA,

                            Appellee,

                                v.

                      HENRY OLAWALE BALOGUN,

                      Defendant, Appellant.

                                           

No. 92-1825

                    UNITED STATES OF AMERICA,

                            Appellee,

                                v.

                         EBENEZER ALUKO,

                      Defendant, Appellant.

                                           

          APPEALS FROM THE UNITED STATES DISTRICT COURT

                 FOR THE DISTRICT OF RHODE ISLAND

          [Hon. Ronald R. Lagueux, U.S. District Judge]
                                                      

                                           

                              Before

                       Breyer, Chief Judge,
                                          

              Torruella and Boudin, Circuit Judges.
                                                  

                                           

     Edward  C. Roy, Jr., with whom Roy  & Cook, was on brief for
                                               
appellant Henry Olawale Balogun.
     Francis J. Gillan III for appellant Ebenezer Aluko.
                          
     Margaret E. Curran,  Assistant United States  Attorney, with
                       
whom  Lincoln  C. Almond,  United  States  Attorney, and  Seymour
                                                                 
Posner,  Assistant  United States  Attorney,  were  on brief  for
      
appellee.

                                           

                          March 19, 1993
                                           

          TORRUELLA,  Circuit Judge.   Appellants  Ebenezer Aluko
                                   

and Henry Olawale Balogun pled  guilty to conspiracy, mail fraud,

and insurance  fraud in violation  of 18  U.S.C.    371,  1341-42

(1984)  and  42  U.S.C.    408(a)(7)(B)  (1991).    Specifically,

appellants procured  insurance  coverage on  vehicles  registered

under fictitious  names.  The conspiracy entailed one hundred and

twenty-four fraudulent  claims amounting  to $620,000.1   Balogun

and another co-defendant  initiated the scheme on April  1, 1989;

Aluko joined the conspiracy on or about October 6, 1990.

          The  district  court  sentenced  Aluko  to  twenty-four

months  in   prison2   and  Balogun   to  thirty-three   months.3

Appellants appeal their sentences.

          "We review  a trial  court's  determinations under  the

[United  States]  Sentencing  Guidelines only  for  clear error."

United States  v. Panet-Collazo,  960 F.2d  256,  262 (1st  Cir.)
                               

(citing  United States v. Sklar,  920 F.2d 107,  110-11 (1st Cir.
                               

1990)),  cert.  denied,  113 S.  Ct.  645  (1992).   However,  we
                      

interpret provisions of the relevant  guidelines de novo.  United
                                                                 

States v. St. Cyr, 977 F.2d 698, 701 (1st Cir. 1992).  Because we
                 

find  no clear  error  in the  district  court's calculation,  we

affirm Balogun's  sentence.  However,  we find that  the district

                    

1  Although  the claims amounted to  $620,000, appellants' arrest
prevented the collection of $403,000.

2    The  judge also  imposed  a  three-year  term of  supervised
release, restitution of $16,750, and a $50 special assessment.

3  The judge  also imposed a three-year supervised  release term,
restitution  of $100,000 if the defendant was not deported, and a
$200 special assessment.

                               -3-

court  improperly interpreted  a  guideline  relevant to  Aluko's

sentence.    Thus, we  vacate that  sentence  and remand  for re-

sentencing consistent with this opinion.

          We address the appeals in turn.

Appellant Aluko
               

          At   his  sentencing   hearing,  Aluko   contested  his

presentence  report's calculation  of  offense  level  under  the

United   States   Sentencing   Guidelines   ("U.S.S.G.").4     In

calculating the  total offense  level in the  presentence report,

the probation officer  based his calculation  on all one  hundred

and  twenty-four   fraudulent  claims   filed  as  part   of  the

conspiracy.   As these claims  amounted to $620,000,  he enhanced

Aluko's base  offense level  by ten  levels pursuant to  U.S.S.G.

  2F1.1(b)(1)(K) (Nov. 1991) (ten level offense increase required

for losses  between $500,000  and $800,000).    In addition,  the

probation  officer concluded  that Aluko's  participation in  the

scheme involved  more than  minimal planning.   Thus, he  further

enhanced Aluko's offense level by two levels pursuant to U.S.S.G.

  2F1.1(b)(2) (Nov. 1991).5  Finally, the probation officer  also

subtracted  two levels  for  acceptance of  responsibility.   The

district court adopted the presentence report calculation.

                    

4  Both parties  agree that the 1991 sentencing  guidelines apply
to this case.

5  Section 2F1.1(b)(2) provides:

            If the  offense involved . .  . more than
            minimal  planning .  .  . increase  by  2
            levels.

                               -4-

          At  sentencing, Aluko challenged the presentence report

on two  grounds, both of which he revives in this appeal.  First,

Aluko contends that the government established his involvement in

only ten of  the one hundred  and twenty-four fraudulent  claims,

and that  he can only be  held responsible for those  ten claims.

He  asserts that  the  rest of  the  claims were  actions of  co-

conspirators which were not  reasonably foreseeable to him.   See
                                                                 

U.S.S.G.    1B1.3(a)(1),  Application  Note 1  (Nov.  1991)  (for

sentencing  purposes, defendant  is accountable  for "conduct  of

others  in  furtherance of  the  execution  of jointly-undertaken

criminal   activity  that  was   reasonably  foreseeable  by  the
                                                        

defendant") (emphasis added).

          In  its  sentencing ruling,  the  district court  never

discussed whether Aluko's co-conspirators' additional one hundred

and  fourteen fraudulent  claims were  reasonably foreseeable  to

Aluko.  The court simply concluded that Aluko

            was a conspirator with two  other people.
            He   was   an  important   part   of  the
            conspiracy  regardless  of the  numerical
            figures  involved in claims  filed, or in
            amount of  money that he  received.   And
            so,  he's  responsible   for  the   whole
            conspiracy.  It's seldom that we find co-
            conspirators who know  all facets of  the
            operation.  They know they're involved in
            a conspiracy and they're involved  at one
            tier level or another and, therefore, are
            integral parts and necessary parts of the
            success of the whole conspiracy.

            (sentencing hearing transcript at 14).

          This language  suggests that once a  defendant plays an

integral  role in a  conspiracy, he is  liable for co-conspirator

                               -5-

acts  in  furtherance  of  the conspiracy,  regardless  of  their

foreseeability.   While  this  language  correctly describes  the

proper  standard for  a defendant's  criminal conviction  for co-
                                                        

conspirator acts, United States  v. Fusaro, 708 F.2d 17,  21 (1st
                                          

Cir.  1983),  it  does   not  correctly  describe  a  defendant's

responsibility  for   these  actions  for   sentencing  purposes.
                                                                

U.S.S.G.    1B1.3(a)(1),  Application  Note 1;  United  States v.
                                                              

O'Campo, 973 F.2d 1015, 1025-26 n.11 (1st Cir. 1992).
       

          We  might  in some  circumstances  treat  a finding  of

foreseeability as inherent in  the nature of the conspiracy.   In

this   case,  however,   it  appears   that  the   judge  thought

foreseeability inherent  in all conspiracies.   This  is not  the
                               

law.

          In addition, some of the co-conspirator acts presumably

occurred before Aluko joined the conspiracy as he joined one year

after  it  began.   By definition,  acts  that occurred  before a

defendant enters  a conspiracy  cannot be foreseeable.   O'Campo,
                                                                

973 F.2d at 1026.

          Accordingly, we vacate Aluko's sentence and remand  for

a determination of which, if  any, of co-defendants' actions were

reasonably  foreseeable  to  Aluko,6  and  for  re-sentencing  in

accordance with that determination.

          Second, Aluko argues that he played a  minimal or minor

role in the conspiracy,  and thus deserved a downward  adjustment

                    

6  We note that this determination should also address  the issue
of  which co-conspirator conduct, if any, took place before Aluko
joined the conspiracy.

                               -6-

to his total  offense level pursuant  to U.S.S.G.   3B1.2(a)  and

(b)  (Nov. 1991).7    We  first  note  that  defendants  are  not

automatically entitled to  a downward adjustment, whatever  their

role  in the crime.   United States v.  Valencia-Lucena, 925 F.2d
                                                       

506,  514 (1st  Cir.  1991).   Indeed, the  record  in this  case

adequately supports the district court's denial of the reduction.

Aluko indicated that his  involvement in the conspiracy  began on

October 6, 1990.   He remained active in the  conspiracy until he

was  arrested one  year later.   He was  directly involved  in at

least  ten fraudulent  claims.   Ultimately, the  court concluded

that Aluko was an integral part of the conspiracy and granted him

no reduction.  We find no clear error in this determination.

Appellant Balogun
                 

          Before Balogun's sentencing, the government objected to

his  presentence report,  claiming that  his total  offense level

should  have  been  increased  two points  pursuant  to  U.S.S.G.

  3B1.1(c)  (Nov.  1991).8   Specifically, the  government argued

                    

7  Section 3B1.2(a) provides:

            If   the   defendant   was    a   minimal
            participant  in  any  criminal  activity,
            decrease by 4 levels.

   Section 3B1.2(b) provides:

            If the defendant  was a minor participant
            in  any criminal activity,  decrease by 2
            levels. 

8  Section 3B1.1(c) provides:

            If  the  defendant   was  an   organizer,
            leader,  manager,  or  supervisor in  any
            criminal activity other than described in

                               -7-

that  Balogun was  an "organizer, leader,  or supervisor"  of the

conspiracy  for the  purposes of  that section.   The  sentencing

judge accepted the government's representations and increased the

total offense level from sixteen to eighteen.

          Balogun  offers  two  principal  arguments  against the

judge's calculation of his  sentence.  First, he argues  that the

district   court   impermissibly  relied   on   the  prosecutor's

statements  in  reaching  its   conclusion.    Balogun  does  not

challenge  the  facts  at   issue;  however,  he  challenges  the

application of   3B1.1(c) to these facts.

          Application Note 3 of U.S.S.G.   3B1.1 counsels that in

determining  whether  a defendant  is  an  organizer, leader,  or

supervisor  pursuant  to   3B1.1(c),  the  court should  consider

factors   including:     (1)  decision   making   authority;  (2)

participation in the offense; (3) recruitment of accomplices; (4)

claimed  right to a larger share of  the fruits of the crime; (5)

degree of planning or organizing; (6) nature of illegal activity;

and (7) degree of control over others.

          The  undisputed facts  in  the present  case show  that

Balogun  initiated the conspiracy with another co-conspirator; he

received significantly more money from the conspiracy than Aluko;

he used cars fraudulently registered to Aluko to stage accidents;

and he paid  Aluko for his cooperation in the scheme.  We find no

clear error in the  district court's conclusion that Balogun  fit

the role of an organizer, leader, or supervisor.

                    

            (a) or (b), increase by 2 levels.

                               -8-

          Second,  Balogun  argues that  the  sentence adjustment

resulted in impermissible double  counting because in addition to

the  increase for being an organizer,  supervisor, or leader, the

district court also accepted the presentence report's enhancement

of Balogun's sentence for more than minimal  planning pursuant to

U.S.S.G.   2F1.1(b)(2).

          In United States  v. Fuller, 897  F.2d 1217, 1222  (1st
                                     

Cir.  1990),  we reversed  an  enhancement  based on    3B1.1(c),

noting  our concern  that  such an  enhancement  would result  in

double  counting.  The sentencing  court in that  case based both

its   3B1.1(c)  and its    2F1.1(b)(2) enhancements on  one fact:

the quantity of marijuana involved.  See id.
                                           

          Balogun argues that the sentencing judge considered the

elaborate  nature of the scheme  in applying the  increase for an

organizer, leader, or supervisor  even though that complexity was

already  accounted   for  in  the  more   than  minimal  planning

enhancement.   In support  of this contention,  Balogun notes the

following statements by the sentencing judge.

            . . . I'm  satisfied that Mr. Balogun and
            Mr. [Oyelele] were the organizers of this
            scheme.  They were the people who thought
            this matter up, maybe with help of others
            unknown, and  Aluko was  just one of  the
            people who was initiated into the scheme,
            to  be part of some facets of it.  So I'm
                                                     
            satisfied that Balogun and [Oyelele] were
                     
            organizers and leaders and supervisors of
            this matter. . . .

            This  was a fairly  elaborate scheme, one
            that required a lot of planning and a lot
            of organization, and  a lot of fraudulent
            documents.    And,  therefore,  I  think,
            under   the   circumstances,  the   total

                               -9-

            offense level should be 20. . . .  

            (sentencing transcript at 9) (emphasis added).

As we  see  it, this  language  shows that  the court  based  his

  3B1.1(c)  enhancement decision on  Balogun's initiation  of the

scheme and recruitment  of Aluko,  not on the  complexity of  the

scheme.   The judge's allusion  to the scheme's  elaborate nature

simply  provided  further   superfluous  justification  for   the

resulting   total  offense   level.     We   therefore  find   no

impermissible double counting.9

          We affirm Balogun's sentence in its entirety.

          Affirmed in part; reversed and remanded in part.
                                                         

                    

9   As an alternative  ground, we  note that as  Balogun did  not
clearly raise this issue  in the district court, he  is precluded
from raising it on appeal.  United States v. Ortiz, 966 F.2d 707,
                                                  
717 (1st Cir. 1992), cert. denied, 113 S. Ct. 1005 (1993).  
                                 

                               -10-