Court Opinion

ID: 4107370
Source: CourtListenerOpinion
Date Created: 2016-12-14 22:01:19.013818+00
Date Added: 2024-06-11T12:16:29.210724
License: Public Domain

NOT RECOMMENDED FOR PUBLICATION
                                File Name: 16a0670n.06

                                            No. 15-4200
                                                                                      FILED
                                                                                Dec 14, 2016
                           UNITED STATES COURT OF APPEALS                   DEBORAH S. HUNT, Clerk
                                FOR THE SIXTH CIRCUIT

UNITED STATES OF AMERICA,                                    )
                                                             )
       Plaintiff-Appellee,                                   )
                                                             )   ON APPEAL FROM THE
v.                                                           )   UNITED STATES DISTRICT
                                                             )   COURT FOR THE SOUTHERN
JASON COX,                                                   )   DISTRICT OF OHIO
                                                             )
       Defendant-Appellant.                                  )             OPINION
                                                             )
                                                             )

       BEFORE:         BATCHELDER, STRANCH, and DONALD, Circuit Judges.

       JANE B. STRANCH, Circuit Judge. Jason Cox pled guilty to several counts of mail

fraud, wire fraud, and money laundering and was sentenced to sixty months’ imprisonment and

ordered to pay restitution. In this appeal, Cox challenges the length of his sentence and the

restitution amount. For the following reasons, we AFFIRM Cox’s sentence.

                                     I.      BACKGROUND

       Jason Cox worked as an investment advisor with Edward Jones at the time of his

fraudulent activities. Around that time, he also developed a gambling addiction and began

gambling heavily, and he fraudulently acquired funds from three of his clients to pay the debts he

incurred. In his position as an investment advisor, Cox was “subject to little oversight with

respect to the handling of his clients’ financial accounts.” Cox repaid the principal plus the

promised interest to two of his clients before his arrest.
No. 15-4200, United States v. Cox

       The third client that Cox defrauded, Jodene Beavers, was a developmentally disabled

woman in her fifties. Cox became the advisor for Beavers’s father, and was introduced to her as

“the person she could trust to manage her money after [her father] was no longer able to do so.”

Before Beavers’s father’s death, he paid her bills, paid the mortgage on her condo in Upper

Arlington, Ohio, and provided her with financial assistance, as she was rarely employed. He also

established a joint account that could have provided enough money to support her for most, if not

all, of her life. Upon her father’s death, Beavers inherited all of his assets. As Beavers relied

heavily on her father and had difficulty understanding the responsibilities of managing an estate,

her estate’s executor spoke with Cox several times about the importance of ensuring that her

funds last as long as possible.

       Over the next two years Cox took nearly all of Beavers’s money. Cox sold the holdings

in the IRA account opened by Beavers’s father that was worth $164,000; as Beavers received

checks, Cox convinced her to write checks to him in amounts equal to or slightly lesser that the

amounts she received. He told her that he was “investing the money in mutual funds for her”

and that they were in a “joint business venture.” He caused Beavers to sell her condo, contacted

the real estate agent, and was present throughout the process. He convinced her to move into an

apartment in Whitehall, Ohio where he prepaid the rent, and “she was forced to leave a couch

and small refrigerator in her home which she really wanted to keep.” In her new apartment,

Beavers heard gunshots that caused her to have panic attacks, insomnia, and fear of walking

outside in the area. She also contracted scabies and was told there were bedbugs in her building.

       Cox was charged with multiple counts of mail fraud, wire fraud, and money laundering.

He pled guilty to two counts of mail fraud, one count of wire fraud, and two counts of money

laundering, and agreed to pay restitution to Beavers.         The Pre-Sentence Report (PSR)
No. 15-4200, United States v. Cox

recommended a total offense level of twenty-two, based on a loss range between $400,000 to

$1,000,000. The PSR calculated the base offense level at seven, increased by fourteen levels for

the loss amount, two levels for Beavers’s vulnerability, and two levels for abuse of trust. The

level was decreased to twenty-two for acceptance of responsibility.

       In the plea agreement, however, both Cox and the Government argued in favor of

applying a lower loss range of $200,000 to $400,000, which would lead to a total offense level of

twenty. The probation officer, as well as the parties and the court, based this lower range in part

on new Guidelines that would be in effect soon, increasing the loss range for a twelve point

enhancement to $250,000 to $550,000. In light of this, both parties and the district court agreed

to a loss range of $200,000 to $400,000. And all agreed that a twelve level increase, instead of a

fourteen level increase, was appropriate.

       The restitution amount indicated in the PSR was $432,539, but before sentencing the

Government submitted an addendum that adjusted that number due to a calculation error; the

updated restitution figure was $412,252.85, consisting of $360,150 in cash and checks provided

by Beavers, early distribution tax penalties of $22,244, wire transfer fees of $935, real estate fees

of $5,688.65, and ATM withdrawals and debit card purchases of $23,235.20.

       At sentencing, the court applied a criminal history category of II and an offense level of

twenty for a Guidelines range of 37-46 months, and overruled Cox’s objection regarding the

abuse of trust enhancement. The court varied upward from the suggested range, imposed a

sentence of sixty months, and granted restitution in the amount of $412,252.85.

       Cox appeals various elements of his sentence. He argues that the district court erred in

applying the abuse of trust enhancement, in accepting the government’s restitution amount, and

that his above-Guidelines sentence is both procedurally and substantively unreasonable.
No. 15-4200, United States v. Cox

                                        II.   ANALYSIS

A.     The abuse of trust enhancement

       A district court's determination that a defendant occupied a position of trust for the

purposes of the Sentencing Guidelines is reviewed de novo. United States v. Gilliam, 315 F.3d

614, 617 (6th Cir. 2003) (citing United States v. Tribble, 206 F.3d 634, 635 (6th Cir. 2000)).

       The Guidelines authorize enhancement of an offense level in certain situations. “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.”

USSG § 3B1.3. The Guidelines define “a position of public or private trust” as “characterized by

professional or managerial discretion (i.e., substantial discretionary judgment that is ordinarily

given considerable deference).       Persons holding such positions ordinarily are subject to

significantly less supervision than employees whose responsibilities are primarily non-

discretionary in nature.” Id. at cmt. n.1.

       In determining whether or not the abuse of trust enhancement is appropriate, Sixth Circuit

precedent directs courts to look at “the level of discretion accorded an employee” as “the

decisive factor in determining whether his position was one that can be characterized as a trust

position.” United States v. Brogan, 238 F.3d 780, 783 (6th Cir. 2001) (citing Tribble, 206 F.3d

at 637). The specific job must be “characterized by substantial discretionary judgment that is

ordinarily given considerable deference.” Id. (quoting United States v. Ragland, 72 F.3d 500,

503 (6th Cir. 1996)).

       Cox argues that his position was not a position of trust and that the deceit that occurred

was due to Beavers’s credulity. Further, he distinguishes his position because he “solicited

additional funds from his clients to invest in ‘off the books’ investments and continued even after
No. 15-4200, United States v. Cox

he was terminated from Edward Jones.”            The Government responds that in controlling

investments and concealing the nature of his schemes, Cox had total authority to invest his

victim’s money. The Government also notes that Cox defrauded three non-disabled victims in

addition to Beavers.

       Cox had significant discretion to use his clients’ money as he wished in his position as an

Investment Advisor for Edward Jones. The PSR explained that Cox had very little oversight,

and that lack of oversight permitted him to commit fraud relatively undetected by his employer.

In light of this record, the district court’s application of the two level abuse of trust enhancement

was appropriate.

       Cox also argues that it was double-counting for him to receive both the abuse of trust and

the vulnerable victim enhancements.        “Double counting ‘occurs when identical conduct is

described in two different ways so that two different adjustments apply.’” United States v.

Dobish, 102 F.3d 760, 762 (6th Cir. 1996) (citing United States v. Haines, 32 F.3d 290, 293 (7th

Cir. 1994)). In Dobish, we noted that double counting does not necessarily result when both the

abuse of trust and vulnerable victim enhancements are applied.            102 F.3d at 762.      “The

enhancement for vulnerable victims focuses on the choice of victims” while the abuse of trust

enhancement, “in contrast, focuses on the offender’s post-selection conduct.” Id. (finding that

the defendant had both selected victims for their susceptibility and abused his position as an

investment manager). Here too, Cox’s seeming intentional selection of Beavers was in addition

to, and distinct from, his abuse of his position of trust as an investment advisor. Thus, the district

court did not err in applying both of these enhancements.
No. 15-4200, United States v. Cox

B.     Calculation of restitution amount

       Cox argues that his restitution amount is too high because it was based on a loss amount

that incorrectly included early distribution tax penalties, wire transfer fees, and real estate fees.

       1.      Standard of review

       As an initial matter, the parties dispute the appropriate standard of review for resolving

this claim, and whether the claim was forfeited. The district court's loss calculation is reviewed

for clear error. United States v. Younes, 194 F. App'x 302, 315 (6th Cir. 2006) (citing United

States v. Orlando, 363 F.3d 596, 600–01 (6th Cir. 2004)). We review forfeited arguments for

plain error. United States v. Nazzal, 644 F. App'x 655, 658 (6th Cir. 2016) (quoting United

States v. Evers, 669 F.3d 645, 654 (6th Cir. 2012); United States v. Coppenger, 775 F.3d 799,

803 (6th Cir. 2015)). “Whereas forfeiture is the failure to make the timely assertion of a right,

waiver is the ‘intentional relinquishment or abandonment of a known right.’” Nazzal, 644 F.

App'x at 658 (quoting United States v. Olano, 507 U.S. 725, 733 (1993)). For there to be plain

error, Cox must show “(1) error (2) that ‘was obvious or clear,’ (3) that ‘affected defendant's

substantial rights’ and (4) that ‘affected the fairness, integrity, or public reputation of the judicial

proceedings.’” United States v. Vonner, 516 F.3d 382, 386 (6th Cir. 2008) (en banc) (citation

omitted).

       2.      Loss amount and restitution

       Cox was ordered to pay restitution to Beavers pursuant to the Mandatory Victims

Restitution Act (MVRA), 18 U.S.C. § 3663A and USSG § 5E1.1. The Guidelines provision that

is used to calculate loss for the purpose of determining the offense level is USSG § 2B1.1.

A comment to that section excludes from loss “interest of any kind, finance charges, late fees,
No. 15-4200, United States v. Cox

penalties, amounts based on an agreed-upon return or rate of return, or other similar costs.”

USSG § 2B1.1 cmt. n.3(D)(i).

        The original PSR recommended a total offense level of twenty-two, based on the loss

amount of $432,539 (this number was lowered in a subsequent addendum) and the loss range of

$400,000 to $1,000,000. Cox’s counsel objected to the inclusion of fees and penalties in the loss

amount in his Objections to the PSR.1 If the fees and penalties had been removed, the loss would

have been under $400,000; however, the parties reached an agreement to apply the lower loss

range of $200,000 to $400,000 regardless. They did not appear to resolve whether or not fees

and penalties should be included in the loss amount calculation. They simply agreed to the lower

loss range, at least in part to take into account new Guidelines that would go into effect soon.

        At sentencing, the parties and the court agreed to the lower loss range. Cox mentioned

the issue of fees at sentencing in the context of describing, in part, how the parties reached the

agreement regarding the lower loss range: “in negotiating the plea agreement, we looked to the

amount of finance charges, late fees, other similar types of costs that the Guidelines specifically

exempt from addition to computing what the loss is. So that’s how we arrived at that figure

between $200,000 and $400,000.” (R. 63, PAGEID# 265). The Government said that it did not

agree that fees are not part of the loss, noting that, in agreeing to the lowered range, it was

recognizing that the Guidelines were changing soon.          Finally, in regard to the amount of

restitution, Cox stated at sentencing, “I don’t disagree the $412,000 is the correct restitution

figure. . . . That’s a correct restitution figure.” Id.

        Cox now clarifies that he is not appealing the loss as it relates to the offense level.

Rather, he is appealing the dollar amount of the loss that he alleges improperly included fees,

1
 The figures he objected to including were the early distribution tax penalties of $22,244, wire
transfer fees of $935, and real estate fees of $5,688.65.
No. 15-4200, United States v. Cox

which was then used as the restitution amount. He acknowledges that restitution does not always

need to equal loss, but argues that it should in this case. Cox further clarifies that the district

court should have at least explained the restitution amount instead adopting it without discussion.

          It is true that the loss amount should not include penalties or fees, and that the

$412,252.85 amount does include them. The range actually adopted by the court ($200,000 to

$400,000), however, reflected a number that did not include those penalties or fees and thus the

loss amount, used as intended to calculate the sentencing level, did not in function include

penalties or fees.

          Restitution does not need to equal the loss amount. The parties pointed to few cases in

this circuit, but United States v. Rutley, 482 F. App'x 175, 178–79 (7th Cir. 2012) is helpful.

There, the defendant argued that interest must be excluded from his restitution amount because

interest was not allowed to be included in the loss amount for sentencing purposes. The court

stated:

          [N]o case law and nothing in the Mandatory Victim Restitution Act or the
          sentencing guidelines support [the defendant’s] argument. Application Note
          3(D)(i) to § 2B1.1 applies to the loss amount only. Restitution is calculated under
          18 U.S.C. § 3663A and U.S.S.G. § 5E1.1, and those provisions do not exclude
          bargained-for interest (or finance charges) from a restitution award. See United
          States v. Jimenez, 513 F.3d 62, 87 (3d Cir.2008); United States v. Morgan,
          376 F.3d 1002, 1014 (9th Cir.2004).

Rutley, 482 F. App’x at 179. Even if there were fees and penalties in the restitution amount,

therefore, it does not mean that the restitution amount is erroneous.

          The district court could have clarified these issues at the hearing, Cox argues, by

explaining: (1) whether the court accepted the argument that loss should include fees and

penalties and that restitution should equal loss, or (2) whether the court accepted Cox’s argument

that loss should not include fees but decided that restitution should reflect those charges. With

the parties in apparent agreement about both the sentencing range and the restitution amount,
No. 15-4200, United States v. Cox

however, it may have been difficult for the court to know that it needed to explain this particular

issue. The inclusion of fees in the restitution amount, or the court’s failure to expound upon this

issue at sentencing, does not rise to the level of plain error.

C.      Reasonableness of Cox’s sentence

        Because Cox did not object to the selected Guidelines range independently, or in

response to the Bostic question, the parties agree that this claim is unpreserved. We review

unpreserved claims of procedural (or substantive) reasonableness for plain error. United States

v. Bostic, 371 F.3d 865, 872–73 (6th Cir. 2004); see United States v. Penson, 526 F.3d 331, 337

(6th Cir. 2008). “Sentences must be both procedurally and substantively reasonable.” United

States v. Walters, 775 F.3d 778, 781 (6th Cir. 2015) (citing Gall v. United States, 552 U.S. 38, 51

(2007)). Cox argues that his sentence is both procedurally and substantively unreasonable.

        1.      Procedural reasonableness

        A sentence is procedurally unreasonable if the district court commits 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.

        Cox first argues that the district court, in varying upward to a sentence of 60 months,

actually (or accidentally) assessed the variance from a previously rejected sentencing range of

46-57 months. The agreed upon sentencing range was 37-46 months, and during the hearing, the

court stated numerous times that it was using that range. As Cox notes, the court did state once

that it was going to “vary under 3553(a) to an amount just slightly above what [the probation

officer] had originally computed as the sentencing guideline range.” (R. 63, PageID# 297).
No. 15-4200, United States v. Cox

But the district court made its decision clear in repeatedly referencing the chosen range, then

expressly noting how it reached the sixty month figure.

       Cox also argues that the court failed to explain the upward variance and notes that though

the court stated the loss did not capture the essence of the offense, Cox did receive a two level

enhancement for targeting a vulnerable victim. The Government responds that the district court

adequately explained its decision to impose an above-Guidelines sentence, in that it considered

Cox’s childhood, employment history, and addiction, as well as the severity of the crime and

other factors.

       Cox points to United States v. Blackie, 548 F.3d 395 (6th Cir. 2008), as a similar case

where the district court was “ambiguous about the exact nature of the new offense level and the

Guidelines range at sentencing.” However, in Blackie, the court never stated the applicable

range at all, nor explained how it reached its sentence. 548 F.3d at 401. Here, however, the

court stated the range and also considered Cox’s “very, very troubling” conduct, the fact that

Beavers is left with “essentially no assets,” and the conclusion that this was “about as most

serious a financial offense as one can imagine.” The court discussed Cox’s minimal criminal

history, addiction, his years of gainful employment, and that the “physical abuse” he suffered as

a child at the hands of his step-father was “not something that should be ignored in a court of

justice.” The district court sufficiently explained its reasons for varying upward in determining

Cox’s sentence. There is no plain error in the sentence.

       2.        Substantive reasonableness

       “The essence of a substantive-reasonableness claim is whether the length of the sentence

is ‘greater than necessary’ to achieve the sentencing goals set forth in 18 U.S.C. § 3553(a).”

United States v. Tristan–Madrigal, 601 F.3d 629, 632–33 (6th Cir. 2010). Courts must “take
No. 15-4200, United States v. Cox

into account the totality of the circumstances, including the extent of any variance from the

Guidelines range.” Gall, 552 U.S. at 51. A sentence may be substantively unreasonable if the

district court “fail[s] to consider pertinent § 3553(a) factors, or giv[es] an unreasonable amount

of weight to any pertinent factor.” United States v. Griffin, 530 F.3d 433, 439–40 (6th Cir. 2008)

(alterations in original) (citation omitted). The fact that we “might reasonably have concluded

that a different sentence was appropriate is insufficient to justify reversal of the district court.”

Gall, 552 U.S. at 51.

       Cox argues that the court placed too much weight on one 18 U.S.C. § 3553(a) factor, the

seriousness of the crime, and failed to consider other relevant factors, such as his history,

cooperation with the prosecution, and willingness to repay Beavers.

       At the sentencing hearing, the court discussed the nature of the offense and Cox’s “very,

very troubling” conduct, as well as his criminal history, noting that he tended towards the low

end of criminal history and that his two DUIs may show an addiction issue. § 3553(a)(1). The

court also noted the physical abuse that Cox suffered as a child, the importance of protecting the

public from further crimes, and of providing deterrence both to Cox and to society. § 3553(a)(2).

The court described the kinds of sentences available and the sentencing range, and indicated that

Cox should be considered as a candidate for the Residential Drug Abuse Program because of

“substantial untreated addiction.” § 3553(a)(3) and (4). And finally, the court discussed the

need for restitution.   § 3553(a)(7).    The court might have addressed more specifically the

Guideline policy statements and the need to avoid unwarranted sentencing disparities.

§ 3553(a)(5) & (6). However, because courts do not require a “ritualistic incantation of the

§ 3553(a) factors,” the sentence was reasonable. United States v. Chandler, 419 F.3d 484, 487

(6th Cir. 2005) (quoting United States v. Washington, 147 F.3d 490, 491 (6th Cir. 1998)).
No. 15-4200, United States v. Cox

                                    III.   CONCLUSION

       For the foregoing reasons, we AFFIRM Cox’s sentence.