UNITED STATES of America, Plaintiff-Appellant, v. Craig Michael COSCARELLI, also known as John Coscarelli, Defendant-Appellee.
No. 96-20264.
United States Court of Appeals, Fifth Circuit.
Feb. 3, 1997.
In the instant case, we apply the 2-level enhancement for possession of a dangerous weapon, and thus Gonzalez-Balderas‘s offense level is 44 (38 from the drug quantity table plus 2 for the weapon enhancement plus 4 from
AFFIRMED.
Ray Christopher Goldsmith, Houston, TX, for defendant-appellee.
Before REYNALDO G. GARZA, JONES and DeMOSS, Circuit Judges.
DeMOSS, Circuit Judge:
Craig Michael Coscarelli pleaded guilty to an indictment charging him in Count I with conspiracy to commit wire fraud, mail fraud, money laundering, and the use of fictitious names in a mail fraud scheme. The government appeals from the sentence imposed upon Coscarelli, contending that the district court improperly applied United States Sentencing Guidelines (U.S.S.G.)
BACKGROUND
Beginning in 1993, Coscarelli and others were involved in a telemarketing-fraud scheme. Using fictitious business monikers, the co-conspirators purchased lists of names, telephone numbers, and addresses of persons who had previously participated in telemarketing “sweepstakes.” The co-conspirators used telephone banks operating out of sham telemarketing businesses or “reload rooms” from various addresses in and around Houston. These reload rooms were used to make calls to potential victims. The telemarketers contacted potential victims and told them that they had won a contest and that they were to receive various awards. A telemarketer would explain that the award would be sent after the “winner” mаiled a check, payable to one of the fictitious companies, to a “mail drop” address in California, Florida or Texas, allegedly to cover taxes and other shipping costs necessary to send the prize.
Coscarelli was responsible for collecting the cash from the money orders and checks cashed in California, Florida, and Texas and routing the money back to himself. Coscarelli then distributed the proceeds to the other co-conspirators. The record reflects that victims sent $915,143.56 to the fictitious companies of this telemarketing scheme. The indictment alleged that Coscarelli encouraged the telemarketers to use fictitious names in order to conceal their identities from the victims and law enforcement agencies. Coscarelli further concealed and frequently changed the locations of the reload rooms. He also changed the telephone numbers of the fictitious companies.
Furthermore, Coscarelli and others were responsible for distributing the proceeds of the fraud to themselves, to the individual telemarketers, and to pay for the operating expenses of the reload rooms. Coscarelli was the person who executed applications for mail drops, filed records with the Secretary of the State of Texas for at least one of the fictitious companies, and executed lease agreements for the reload rooms.
This scheme ended in late 1994 with the arrest and indictment of Coscarelli and other co-conspirators. In an 11-count indictment, Coscarelli was charged in Count I with conspiracy to commit wire fraud, mail fraud, using fictitious names in a scheme to defraud, and money laundering in violation of
In June 1995, Coscarelli pleaded guilty to all 11 counts. There was no written plea agreement prepared. At the Rule 11 plea hearing, the district court explained that “on each of the 11 counts to which you‘ve indicated you wish to plead guilty the maximum penalty is imprisonment for up to five years and a fine of not more than $250,000....”
After Coscarelli pleaded guilty, the probation department prepared its presentence investigation report (“PSI”). The probation department calculated Coscarelli‘s offense level in the PSI using the money laundering guideline,
Coscarelli‘s objection to the PSI stated that:
Mr. Coscarelli was not charged with money laundering as a substantive count and Mr. Coscarelli did not knowingly or intentionally commit money laundering. Any money laundering that occurred was incidental to the main misconduct of wire and mail fraud via telemarketing.
As a result, Coscarelli argued that
At the sentencing hearing, the district court sustained Coscarelli‘s objection, concluding that the fraud guideline,
The district court, applying the fraud guidelines, found Coscarelli‘s base offense level to be 23. With a criminal history category of II, Coscarelli‘s Sentencing Guideline calculation showed a punishment range of 51-63 months. The district court then imposed a sentence of 63 months. The government filed a timely notice of appeal.
DISCUSSION
Challenges to the district court‘s application of the sentencing guidelines are reviewed de novo. United States v. Brown, 54 F.3d 234, 240 (5th Cir.1995). The district court‘s factfindings in support of its application of the guidelines are reviewed for clear error. Id.
1. The Application of U.S.S.G. § 2S1.1 to a Multiple-Object Conspiracy
The government contends that the district court erred by sustaining Coscarelli‘s objection to the use of
Coscarelli contends that
Coscarelli also notes that the district court correctly determined which purpose or purposes of the conspiracy were supported by the evidence and which offenses were proven beyond a reasonable doubt. Based on Coscarelli‘s plea, the district court properly concluded that the fraud guideline more appropriately applies to the conduct at issue for sentencing purposes.
Further, Coscarelli argues that the district court did not base its decision solely on the lack of a substantive money laundering count. Coscarelli contends that the district court also relied on his objection which noted that the object of the conspiracy was unclear. The district court‘s findings implied that insufficient proof existed to justify sentencing Coscarelli under the money laundering guidelines.
We begin our analysis by noting that Coscarelli pleaded guilty as charged to the indictment. Count I of the indictment charged him with violating
The base offense level from the guideline for the substantive offense, plus any adjustments from such guideline for any intended offense conduct that can be establishеd with reasonable certainty.
In determining which substantive offense guideline to apply to a multiple-object conspiracy, this Court has held that
A conviction on a count charging conspiracy to commit more than one offense shall be treated as if the defendant had been convicted on a separate count of conspiracy for each offense that the defendant conspired to commit.
Particular care must be taken in applying subsection (d) because there are cases in which the verdict or plea does not establish which offense(s) was the object of the conspiracy. In such cases, subsection (d) should only be applied with respect to an object offense alleged in the conspiracy count if the court, were it sitting as a trier of fact, would convict the defendant of conspiring to commit that object offense. Note, however, if the object offenses specified in the conspiracy count would be grouped together under
§ 3D1.2(d) (e.g., a conspiracy to steal three government checks) it is not necessary to engage in the foregoing analysis, because§ 1B1.3(a)(2) governs consideration of the defendant‘s conduct.
However, this analysis is unnecessary if the counts would be grouped together under
All counts involving substantially the same harm shall be grouped together into a single Group. Counts involve substantially the same harm within the meaning of this rule:
(a) When counts involve the same victim and the same act or transaction.
(b) When counts involve the same victim and two or more acts or transactions connected by a common criminal objective or constituting part of a common scheme or plan.
(c) 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.
(d) When the offense level is determined largely on the basis of the total amount of harm or loss, the quantity of a substance involved, or some other measure of aggregate harm, or if the offense behavior is ongoing or continuous in nature and the оffense guideline is written to cover such behavior.
A defendant may be convicted of conspiring to commit several substantive offenses and also of committing one or more of the substantive offenses. In such cases, treat the conspiracy count as if it were several counts, each charging conspiracy to commit one of the substantive offenses. See
§ 1B1.2(d) and accompanying commentary. Then apply the ordinary grouping rules to determine the combined offense level based upon the substantive counts of which the defendant is convicted and the various acts cited by the conspiracy that would constitute behavior of a substantive nature.
Next, we must apply the ordinary grouping rules to determine the combined offense level based on the substantive counts of conviction and the various acts alleged by the conspiracy count. We hold that, under the grouping rules of
The district court applied
To obtain a conviction for money laundering under
Therefore, after reviewing the district court‘s application of the Sentencing Guidelines de novo, we hold that the district court misapplied the Sentencing Guidelines by using the fraud guidelines to calculate Coscarelli‘s sentence.
2. The Rule 11 Hearing
Our inquiry does not end with the determination that the district court erred in calculating Coscarelli‘s base offense level. Our examination of the sentencing issue appealed by the government necessitated a thorough review of the events which transpired at the Rulе 11 plea hearing in this case. That examination disclosed a problem which we conclude requires our sua sponte consideration in order that justice be served in this case. See Silber v. United States, 370 U.S. 717, 718, 82 S.Ct. 1287, 1288, 8 L.Ed.2d 798 (1962) (recognizing the Court‘s power to sua sponte notice and correct a plain error even though it was not assigned or specified); United States v. Pineda-Ortuno, 952 F.2d 98, 105 (5th Cir.1992) (“Where plain error is apparent, the issue [Rule 11] may be raised sua sponte by this court even though it is not assigned or specified.”); United States v. Adams, 634 F.2d 830, 836-838 (5th Cir.1981) (quoting Silber, the Court recognized that “appellate courts, in the public interest, may, of their own motion, notice errors to which no exception has been taken, if the errors are obvious, or if they otherwise seri-
The district court‘s violation of Rule 11 is obvious from the face of the record. The district court never informed Coscarelli of the correct maximum possible statutory penalty. See United States v. Watch, 7 F.3d 422, 428 (5th Cir.1993) (holding that Rule 11 error occurred when the district court failed to inform the dеfendant of the statutory minimum sentence for the charges); and see United States v. Still, 102 F.3d 118, 122-123 (5th Cir.1996), United States v. Herndon, 7 F.3d 55, 57 (5th Cir.1993), United States v. Whyte, 3 F.3d 129, 130 (5th Cir.1993) (holding same). Therefore, we may review sua sponte the district court‘s violation of Rule 11 as the error is obvious and it affects “the fairness, integrity or public reputation of judicial proceedings.” Silber, 370 U.S. at 718, 82 S.Ct. at 1288; Pineda-Ortuno, 952 F.2d at 105; Adams, 634 F.2d at 836. We begin our review with an analysis of the Rule 11 requirements.
Before accepting a plea of guilty or nolo contendere, the court must address the defendant personally in open court and inform the defendant of, and determine that the defendant understands, the following: ... the mandatory minimum penalty provided by law, if any, and the maximum possible penalty provided by law ....
(Emphasis added.)
At the plea hearing, the following colloquy took place:
THE COURT: Do you understand that the offenses to which you‘ve indicated you wish to plead guilty are felony offenses and that if your plea is accepted and you are adjudged guilty those offenses[,] that the adjudication may deprive you of valuable civil rights, such as the right to vote, the right to hold public office, the right to serve on a jury, the right to possess a firearm of any kind?
THE DEFENDANT: Yes, your honor.
THE COURT: All right. The indictment consists of 11 counts, on each of the 11 counts to which you‘ve indicated you wish to plead guilty the maximum possible penalty is imprisonment for up to five years and a fine of not more than $250,000, in addition, the government—in addition, the court may assess a special—will assess a special assessment of $50 per count; additionally, the court may impose a period of supervised release not to exceed three years. Do you understand that, sir?
(Emphasis added.)
Coscarelli acknowledged that he understood the ramifications of his plea.
Count I charged Coscarelli with violating
The first question presents a case of first impression for this Court. We find United States v. Watch, 7 F.3d 422 (5th Cir.1993), instructive. Watch was charged with knowingly and intentionally possessing cocaine with intent to distribute at least 50 grams of cocaine base in violation of
In Watch, we held that a district court was required to inform the defendant of any possible statutory minimum sentence he might face as a result of application of the quantity-based Guidelines. Watch, 7 F.3d at 429. Applying the standards set out in United States v. Johnson, 1 F.3d 296 (5th Cir.1993) (en banc), we held that, by failing to advise a defendant that he might be subject to statutorily required sentences, a district court misleads a defendant as to the рossible term of imprisonment for his guilty plea and, as a result, the district court fails to satisfy Rule 11. Watch, 7 F.3d at 429.
Similarly, in the case sub judice, the district court did not address the 20-year maximum statutory sentence which might be imposed by one of the object offenses listed in the conspiracy count,
The dramatic impact which the statutory maximum penalty for conspiracy to engage in money laundering is self evident from a comparison of the base offense level of the guideline
We turn next to our second question: whether the district court‘s failure to inform Coscarelli about the statutory maximum penalty for money laundering was harmless error. In making this determination, we may only consider the Rule 11 transcript, and certain portions of the sentencing hearing. Johnson, 1 F.3d at 302. Applying the principles set forth in Johnson, it is clear that Coscarelli did not know or understand that he was facing a substantially greater maximum sentence than the five year maximum explained by the district court.5 The record indicates only that Coscarelli understood that he could be sentenced to imprisonment for up to five years. The record does
Our colleague in dissent chastises us rather sharply for considering the Rule 11 problem sua sponte and for not concluding that the error we found was harmless. We respond briefly to these charges.
This case comes to us by reason of the government exercising its right to appeal the sentence fixed by the district court on the grounds of erroneous application of the guidelines. We have determined that the government correctly asserts that the money laundering guideline (
Also, the dissent cites United States v. Pierce, 5 F.3d 791, as an example of a case in which our Court determined that error regarding the statement of a possible maximum sentence can be harmless. That‘s true, but in Pierce the actual correct sentence fixed by the district court was 72 months, just about 1/3 of the 18 year maximum statutory penalty stated by the district court at Pierce‘s Rule 11 hearing. Pierce‘s contention of error related to an application for enhancement filed by the government after his Rule 11 hearing which could have exposed Pierce to a maximum sentence of 39 years instead of 18 years, and that he had not been forewarned of that at his Rule 11 hearing. This Court hеld that the district court erred in failing to hold another Rule 11 hearing when the government filed its application for enhancement but such error was harmless. There was no error in Pierce as to the determination of the actual sentence as there is here in Coscarelli. The actual sentence in Pierce was well within the statutory maximum of which Pierce was advised at his Rule 11 hearing which will not be the case here in Coscarelli when the correct guidelines are applied.
CONCLUSION
For the foregoing reasons, we vacate Coscarelli‘s conviction and sentence and remand for repleading and resentencing in accordance with this opinion.
VACATED and REMANDED.
REYNALDO G. GARZA
UNITED STATES CIRCUIT JUDGE
EDITH H. JONES, Circuit Judge, dissenting:
I concur with the majority that the district court improperly applied the fraud guidelines when sentencing Coscarelli and that he should have been exposed to a sentencing range of 121–151 months because of the money-laundering element of the conspiracy count. I must respectfully dissent, however, from that part of the opinion which sua sponte vacates Coscarelli‘s guilty plea for a reason that was neither preserved below nor raised on appeal to this court. It is improper
As far as I have found, it is unprecedented for a federal appellate court to investigate the adequacy of a Rule 11 plea colloquy on its own motion—much less vacate the plea—when the defendant never challenged the adequacy of his plea in any respect in either the trial court or the appellate court. Cf. United States v. Corbett, 742 F.2d 173, 178 n. 12 (5th Cir.1984) (“We hold only that where, as here, appellant challenges the validity of his plea and seeks to withdraw it, we should review the adequacy of the plea based on the Rule 11 transcript.” [emphasis added]); United States v. Adams, 634 F.2d 830, 836 (5th Cir. Unit A Jan.1981) (in an appeal where the defendant sought to enforce his plea bargain, this court could, on its own motion, review the plea colloquy for error).
This court has consistently refused to consider issues that were neither preserved below nor raised in the briefs or arguments before this court. See United States v. Johnson, 718 F.2d 1317, 1325 n. 23 (5th Cir.1983) (en banc) (we will not review an improper jury instruction that was neither raised in the trial court nor claimed to be error on appeal). If this court sets out—as the majority has done here—to review all plea colloquies on our own motion for reversible error, our workload will be intolerable, and one of the most significant restraints on this court‘s exerсise of appellate authority—confining review to issues properly preserved—will vanish. See United States v. Calverley, 37 F.3d 160, 162 (5th Cir.1994) (en banc) (the practice of this court to review errors that have been properly preserved is founded upon considerations of fairness to this court, to the parties, and of the public interest in bringing litigation to an end after a fair opportunity has been afforded to present all issues of law and fact), cert. denied, U.S. —, 115 S.Ct. 1266, 131 L.Ed.2d 145 (1995).1
Even assuming that this court may consider the adequacy of the Rule 11 plea colloquy, the majority‘s application of a harmless error analysis is incorrect. Errors not raised in the district court are to be reviewed by this court for plain error, not harmless error. See
Whether plain error or harmless error furnishes the appellate standard, however, any error which may have occurred is not, in my view, reversible. In order to withstand a plain error inquiry, the error must, inter alia, affect substantial rights: “the affecting of substantial rights requires that the error
Under a harmless error analysis, any error which may have occurred was not reversible. “To determine whether a Rule 11 error is harmless (i.e., whether the error affects substantial rights), we focus on whether the defendant‘s knowledge and comprehension of the full and correct information would have been likely to affect his willingness to plead guilty.” Johnson, 1 F.3d at 302. After a thorough review of the Rule 11 transcript and the sentencing hearing, I am persuaded that Coscarelli did understand the consequences of his plea. See id.
First, the majority states that “it is clear that Coscarelli did not know or understand that he was facing a substantially greater maximum sentence than the five year maximum.” The record does not support this contention. The majority quotes that part of the plea colloquy where the district court informs Coscarelli that he may be sentenced to up to five years for each count of the indictment:
The indictment consists of 11 сounts, on each of the 11 counts to which you‘ve indicated you wish to plead guilty the maximum possible penalty is imprisonment for up to five years and a fine of not more than $250,000, in addition, the government—in addition, the court may assess a special—will assess a special assessment of $50 per count....
(emphasis added). The district court‘s language did not, as the majority concludes, suggest to Coscarelli that he would receive a maximum sentence of five years. Rather, he was informed that he may receive up to five years for each of the eleven counts of the indictment.
Second, the majority states that in response to being given this information from the court, “Coscarelli acknowledged that he understood the ramifications of his plea.” In fact, before acknowledging his assent, Coscarelli inquired whether the special assessment would be $50 total or $50 for each count of the indictment. The court went on to explаin that Coscarelli would be assessed $50 for each count of the indictment. This is significant because surely if Coscarelli had any questions regarding the court‘s language regarding the maximum penalty per count of the indictment, he would have spoken up at that point, as he did regarding the special assessment.
Third, during the plea colloquy the court further explained to Coscarelli:
Do you understand that I may not be able to determine that guideline sentence for you [sic] case until after a presentence report has been prepared by the probation department and you and the government have had an opportunity to review that report and challenge any fact reported and that the sentence imposed might be different than any estimate your attorney may have given you?
The Defendant: Yes.
The Court: Do you also understand that after it‘s been determined what guidelines apply to your case that I have the authority in some instances to impose a sentence that‘s greater or less than what is called for under the guidelines?
The Defendant: Yes, your honor.
Finally, at sentencing, in a statement to the court, Coscarelli indicated his willingness to plead guilty to the offenses charged:
I really feel bad about everything that‘s happened. I got my son involved in this. I take responsibility for him on that. You know, bar the thing about getting the two points [referring to the lawyers’ discussions with the court regarding the calculation of his points under the guidelines]. I don‘t care. I have to say this. I want to make it up to him, my mother, and hopefully society sometime.... [I]t‘s funny
in a way, I almost like to thank [the prosecution] for doing this. It stopped a chain that was like an addiction and I couldn‘t hardly stop myself.... [I] I don‘t blame anybody but me. I make no excuses.
In the face of Coscarelli‘s penitence, there is no record evidence—nothing more than the majority‘s speculation—undergirding their conclusion that if the district court had informed Coscаrelli of the potentially longer sentence for one object of the conspiracy count, he would have been unwilling to plead guilty.
The majority relies on United States v. Watch, 7 F.3d 422 (5th Cir.1993), in concluding that the district court‘s alleged erroneous instruction to Coscarelli on the maximum penalty was harmful. Watch is, however, inapposite. In Watch, the defendant appealed to this court complaining of a Rule 11 violation. See id. at 424. Coscarelli has not. Further, in Watch the sentencing court misadvised the defendant regarding the mandatory minimum time to which he would be sentenced. See id. at 425–26. In the case at bar, Coscarelli was allegedly misadvised concerning his possible maximum sentence.2
In another similar case in which the sentencing court misadvised the defendant regarding the possible maximum sentence, this court found the error to be harmless. See United States v. Pierce, 5 F.3d 791, 794 (5th Cir.1993) (DeMoss, J.). As this court stated in Pierce:
[T]he fact that [the defendant‘s] true “worst case scenario” [ie. the maximum sentence that he could receive] was actually worse than he was informed would not have reasonably caused [the defendant] to doubt the wisdom of his plea. To the contrary, logic and rеason would weigh this factor in favor of his decision to plead guilty: if [the defendant] was willing to plead guilty when facing what he believed was an 18 year maximum, would he not have been just as willing if [he had] known that the maximum was 38 years?
Id. See also
While I firmly believe that Coscarelli was not misinformed of his possible maximum sentence, I also believe that the record shows that any error concerning Coscarelli‘s possible maximum sentence did not affect his decision to plead guilty. By choosing to vacate Coscarelli‘s guilty plea without even as much as a hint from Coscarelli regarding any dissatisfaction with his plea, and without allowing the government a fair opportunity to respond, the majority has grossly interfered with the plea bargain process. A guilty plea pursuant to a plea agreement is a bargain betwеen the government and the defendant. Rule 11 authorizes neither the trial court nor this court to reshape that bargain. Nevertheless, that is the effect of the majority‘s action in vacating Coscarelli‘s plea. I respectfully dissent.
UNITED STATES of America, Plaintiff-Appellee, v. William Joseph KIRK, Defendant-Appellant.
No. 94-50472.
United States Court of Appeals, Fifth Circuit.
Feb. 3, 1997.
Notes
All counts involving substantially the same harm shall be grouped together into a single Group. Counts involve substantially the same harm within the meaning of this rule:
* * *
(d) When the offense level is determined largely on the basis of the total amount of harm or loss, quantity of а substance involved, or some other measure of aggregate harm, or if the offense behavior is ongoing or continuous in nature and the offense guideline is written to cover such behavior....
Whoever, knowing that the property involved in a financial transaction represents the proceeds of some form of unlawful activity, conducts or attempts to conduct such a financial transaction which in fact involves the proceeds of a specified unlawful activity—
(A)(i) with the intent to promote the carrying on of specified unlawful activity; ...
shall be sentenced to a fine of not more than $500,000 or twice the value of the property involved in the transaction, whichever is greater, or imprisonment for not more than twenty years, or both.
United States v. Guerra, 94 F.3d 989 (5th Cir. 1996), a habeas appeal cited by the majority, is also distinguishable from the case at bar. In Guerra, the petitioner vigorously pursued his claim that he did not knowingly, voluntarily plead guilty because he was misinformed that an extraordinarily high potential sentence could be imposed.18 U.S.C.
§ 241 Conspiracy against civil rights any term of years or life
§ 286 Defraud government on claims 10 years
§ 757 To aid escape of prisoner of war 10 years
§ 794(c) To give information to foreign government any term of years or life
§ 1201(c) Kidnaping any term of years or life
§ 2271 To destroy vessels 10 years
§ 2384 Seditious conspiracy 20 years
§ 2388(b) To cause insubordination 20 years
§ 2153(b) Destruction of war materials 30 years
§ 2154(b) Production of defective war materials 30 years
21 U.S.C.
§ 946 To commit offense under Title 21 Chap. 13 subchapter I relating to controlled substances same as offense