713 F. App'x 704
9th Cir.2018Background
- George was convicted of mail fraud, wire fraud, wire fraud affecting a financial institution, and conspiracy to commit mail and wire fraud. He appealed his convictions and sentence.
- At sentencing the district court applied a two‑level enhancement under USSG § 2B1.1(b)(9)(A) for purportedly representing he acted on behalf of a government agency.
- The district court applied a vulnerability enhancement under USSG § 3A1.1(b)(1) because victims were on the brink of foreclosure.
- Several jury instructions and evidentiary rulings were challenged on appeal, including (a) an instruction that fraud "affects a financial institution" if it creates "any new or increased risk of loss," (b) admission of out‑of‑court statements (Buck and DiRoberto) without limiting instructions, and (c) an instruction defining "intent to defraud" as "intent to deceive or cheat."
- The Ninth Circuit affirmed the convictions, vacated the sentence, and remanded for resentencing based primarily on erroneous application of the § 2B1.1(b)(9)(A) enhancement; several other errors were found but deemed harmless or non‑prejudicial.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Applicability of USSG § 2B1.1(b)(9)(A) (government‑agency representation enhancement) | Gov't: enhancement proper because victims were told about government programs/agency references | George: no one represented he acted to obtain benefits on behalf of a government agency and divert them | Vacated enhancement — application note controlling requires representation of acting on behalf of agency to obtain/divert benefits; background commentary not controlling (error by district court) |
| Ineffective assistance of counsel | George: raised on direct appeal | Gov't: record inadequate for direct review | Deferred to 28 U.S.C. § 2255; direct review inappropriate; court urges district court to consider guideline changes at resentencing |
| USSG § 3A1.1(b)(1) vulnerability enhancement | Gov't: victims unusually vulnerable due to imminent foreclosure | George: contest scope/applicability | Affirmed — financial distress can show unusual vulnerability; court reminded comparison must be to typical victim of the offense, not general population |
| Jury instruction re: "affects a financial institution" ("any new or increased risk of loss") | George: instruction overbroad and legally erroneous | Gov't: harmless or correct | Error, if any, was harmless beyond a reasonable doubt |
| Admission of Buck’s and DiRoberto’s statements without limiting instruction | George: admission was obvious error and prejudicial | Gov't: not prejudicial to George | Error was obvious but did not affect George’s substantial rights (harmless) |
| Instruction defining "intent to defraud" as "intent to deceive or cheat" | George: instruction erroneous under Shaw | Gov't: harmless | Instruction was obviously erroneous after Shaw but did not affect substantial rights (harmless) |
| Prosecutors interviewing represented target (ethical challenge) | George: argued violation of professional conduct rule | Gov't: no violation | No violation of California Rule of Professional Conduct 1-120 found |
| Motion for judgment of acquittal and stipulation non‑introduction | George: sought acquittal; contends error from non‑introduction of stipulation | Gov't: counsel made a specific (not general) JMA, waiving objection | No manifest miscarriage of justice; objection waived under Graf |
Key Cases Cited
- Stinson v. United States, 508 U.S. 36 (1993) (advisory‑guideline commentary rule: application notes control over background commentary)
- Shaw v. United States, 137 S. Ct. 462 (2016) (clarification of "intent to defraud" jury instruction)
- United States v. Jeronimo, 398 F.3d 1149 (9th Cir. 2005) (ineffective assistance review on direct appeal standards)
- United States v. Jacobo Castillo, 496 F.3d 947 (9th Cir. 2007) (en banc) (overruling context for prior ineffective assistance discussion)
- United States v. Nielsen, 694 F.3d 1032 (9th Cir. 2012) (definition and comparison standard for "unusually vulnerable" victim enhancement)
- United States v. Stargell, 738 F.3d 1018 (9th Cir. 2013) (harmless‑error analysis for "affects a financial institution" instruction)
- United States v. Graf, 610 F.3d 1148 (9th Cir. 2010) (waiver of objections following specified motions)
SENTENCE VACATED AND REMANDED; CONVICTIONS AFFIRMED.