United States v. James KennedyUnited States v. James Kennedy
KAREN NELSON MOORE, Circuit Judge.
James R. Kennedy pleaded guilty to one count of willfully aiding and abetting in the preparation and filing of false tax returns under
I. FACTS AND PROCEDURE
Kennedy ran a tax-return-preparation business, J.R. Kennedy and Associates, from 2006 through April 2009. R. 55 (Plea Agreement ¶ 3) (Page ID # 197). Based on his prior military work experience and contacts in the aerospace industry, he held himself out as an expert in preparing taxes for those connected to the aerospace industry. R. 90 (Sent’g Tr. at 44-45) (Page ID # 868-69). On April 14, 2011, Kennedy was indicted on twenty-three counts of willfully aiding and abetting in the preparation and filing of false tax returns under
The Presentence Report (PSR) determined Kennedy’s total offense level to be 18 and his criminal history category to be I. R. 78 (PSR ¶¶ 26, 33) (Page ID # 309-10). This yielded a guidelines range of 27 to 33 months’ imprisonment. Id. ¶ 66 (Page ID # 316). The total offense level reflected a base offense level of 18, plus an uncontested two-level enhancement for specific offense characteristics, minus two points for acceptance of responsibility under
Kennedy submitted a nine-page document called Objections and Corrections to the Presentence Investigation Report for James Raymond Kennedy dated May 9, 2013 to the probation officer preparing the PSR. Id. at 16-25 (Page ID # 319-28). In
The government submitted a letter to the probation officer objecting to the PSR’s acceptance-of-responsibility recommendation. Id. at 29-31 (Page ID # 332-34). The probation officer declined to reconsider its recommendation, but noted that absent any clear authority, the probation officer believes this is an issue best for the Court to decide. Id. at 32 (Page ID # 335). The government continued to object to the acceptance-of-responsibility recommendation in its Sentencing Memorandum. R. 69 (Gov’t’s Sent’g Mem. at 3-6) (Page ID # 249-52). Kennedy did not address either the tax-loss calculation or the relevant conduct of the 118 other tax returns in his Sentencing Memorandum. R. 67 (Def.’s Sent’g Mem.) (Page ID # 222-31).
The district court held a sentencing hearing on July 18, 2013. Kennedy did not object to anything in the PSR at the sentencing hearing. After hearing from the government and Kennedy’s trial counsel, the district court denied Kennedy an acceptance-of-responsibility reduction. R. 90 (Sent’g Tr. at 19) (Page ID # 843). The court pointed to (1) the fact that Kennedy pled guilty on the third day of a trial; (2) the now-withdrawn objections Kennedy submitted to the PSR that the court characterized as maintain[ing] his innocence; and (3) letters submitted in support of Kennedy, including from his family and Sergeant Major Hubert quoting the defendant in denying his responsibility for illegal conduct and basically just saying that he made mistakes and didn’t want to fight the government. Id. at 18-19 (Page ID # 842-43). The district court then sentenced Kennedy to thirty-six months of imprisonment and one year of supervised release. Id. at 48 (Page ID # 872).
Kennedy appeals the district court’s sentence. He makes fives claims: (1) that the district court abused its discretion in relying on the tax-loss calculation in the PSR; (2) that the district court abused its discretion in determining that the 118 other tax returns described in the PSR constituted relevant conduct; (3) that the district court committed an error of law in applying the acceptance-of-responsibility guidelines; (4) that the district court clearly erred in denying Kennedy an acceptance-of-responsibility reduction; and (5) that Kennedy’s trial counsel’s failure to review the objections Kennedy wrote to the PSR before sending them to the probation officer and his failure to object to the PSR’s tax-loss figure amounted to ineffective assistance of counsel. Appellant Br. at 2.
II. ANALYSIS
A. Plain Error Review Applies to Kennedy’s Tax-Loss Calculation & Relevant Conduct Claims.
Kennedy did not raise his tax-loss calculation or relevant conduct claims in his
After pronouncing his sentence, the district court asked, Is there any legal objection to the sentence as stated, [defense counsel]? R. 90 (Sent’g Tr. at 52) (Page ID # 876). Kennedy’s counsel replied No legal objection; no, your Honor. Id. We have held on several occasions that phrasing almost exactly the same as that used by the district court in this case satisfies Bostic. See, e.g., United States v. Herrera-Zuniga, 571 F.3d 568, 577-78 (6th Cir. 2009) (holding that the sentencing judge complied with the Bostic rule by ask[ing] the parties whether they had ‘[a]ny legal objection to the sentence being imposed’ ); United States v. Blackie, 548 F.3d 395, 398 (6th Cir. 2008) (holding that the district judge provided the parties an opportunity to object following the imposition of the sentence by ask[ing] the parties if they had ‘any legal objection to the sentence imposed’ ).
Thus, the district court properly complied with Bostic, and the standard of review is plain error. To show plain error, there must be (1) error, (2) that is plain, ... (3) that affects substantial rights[, and] (4) ... the error seriously affect[s] the fairness, integrity, or public reputation of judicial proceedings. United States v. Maliszewski, 161 F.3d 992, 1003 (6th Cir. 1998) (internal quotation marks and citation omitted).
B. The District Court Did Not Plainly Err in Relying on the Tax-Loss Calculation in the PSR.
Kennedy argues that the district court erred in accepting the PSR’s calculation of total tax loss because it is manifestly unreliable. Appellant Br. at 16. He asserts that in analogous circumstances, a threshold finding of reliability has been imposed on sentencing courts and that a similar requirement should be imposed on the reliability of undisputed facts in PSRs. Id. at 22-23. Such a requirement, Kennedy argues, also comports with due process. Id. at 23.
When the facts in a PSR are undisputed, we repeatedly have held that the district court may rely on those undisputed facts and does not need to find those facts independently. See, e.g., United States v. Geerken, 506 F.3d 461, 467 (6th Cir. 2007) ( When a defendant fails to produce any evidence to contradict the facts set forth in the PSR, a district court is entitled to rely on those facts when sentencing the defendant. ); United States v. Treadway, 328 F.3d 878, 886 (6th Cir. 2003) ( We can find no reason to require a district court to make independent findings outside the PSR when the facts are undisputed.... Accordingly, we hold that a district court may properly rely exclusively on the PSR for drug quantity when the drug quantity contained therein is not in dispute. ). This case law accords with
At the same time, we have held that evidence relied on by a sentencing court must have at least a minimum indication of reliability. Whether this line of cases applies to undisputed facts in a PSR is less clear. In the case that Kennedy cites as analogous, United States v. Reid, 357 F.3d 574 (6th Cir. 2004), we held that [t]he credited testimony of a single witness is sufficient to support factual findings by a preponderance of the evidence on sentencing, which will survive clear error review, if that evidence bears more than a minimum indicium of reliability. Reid, 357 F.3d at 582 (emphasis added) (internal quotation marks and citation omitted). However, the defendant had objected at sentencing that the evidence was insufficient to support the ‘felonious use’ enhancement at issue. Id. at 577-78. Other Sixth Circuit cases reaffirming this reliability requirement have also focused on disputed facts. See, e.g., United States v. Denson, 728 F.3d 603, 614 (6th Cir. 2013) ( [W]hile a district court must base its findings on reliable information, a sentencing court may accept any undisputed portion of the presentence report as a finding of fact. ) (internal quotation marks and citations omitted); United States v. Greene, 71 F.3d 232, 235 (6th Cir. 1995) (discussing this minimum indicia of reliability requirement as being based in
Given that Kennedy did not object to the PSR at his sentencing hearing, the district court did not plainly err in accepting the undisputed tax-loss calculation figure.
Moreover, Kennedy’s trial counsel appeared to agree expressly to the facts in the PSR, which would preclude him from challenging those facts on appeal. The following exchange occurred at the beginning of the sentencing hearing:
THE COURT: ... I note that there were numerous objections filed. Most of those have been resolved. According to my information, the only one that requires a resolution by the Court is Objection No. 3 to Paragraph 10 of the PSR; is that correct?
...
MR. GORDON: ... Well, the probation officer says Objection No. 3 to Paragraph 10 does not impact the guidelines; however, it does offer context into Kennedy’s overall conduct.... So it really doesn’t affect the guidelines.
...
THE COURT: Okay. The Court will note all objections for the record, but there are none raised by the defendant at this point that require a ruling from
the Court, as they do not impact the guidelines.
R. 90 (Sent’g Tr. at 3-5) (Page ID # 827-29). Thus, Kennedy’s trial counsel’s apparent agreement with the district court that the written objections had all been resolved or did not impact the guidelines could qualify as express agreement to the facts within the PSR. [O]nce a defendant has ‘expressly agreed that he should be held accountable’ for the amount of drugs involved, ‘he cannot now challenge the court’s factual finding on this issue.’ United States v. Pruitt, 156 F.3d 638, 648 (6th Cir. 1998) (quoting United States v. Nesbitt, 90 F.3d 164, 168 (6th Cir. 1996)).
Assuming that a reliability requirement still applies to the tax-loss figure, we conclude that the figure was not so patently unreliable as to fail the minimum-indicium-of-reliability requirement. The PSR does not explain mathematically how it arrived at the figure of $345,715.32. R. 78 (PSR ¶ 11) (Page ID # 307). Nor does the PSR explain how the illegitimate and legitimate tax returns averages were calculated. Id. ¶ 12 (Page ID # 307-08). We do note, however, that multiplying the difference between the illegitimate-returns average and the legitimate-returns average by 119 total tax returns yields a figure of $342,224. This figure is close enough to the total tax-loss figure such that the latter is not patently unreliable.
C. The District Court Did Not Plainly Err in Accepting the PSR’s Relevant Conduct Determination.
Kennedy argues that the district court committed an error of law in accepting the PSR’s characterization of the other 118 allegedly improper tax returns as relevant conduct. Appellant Br. at 25. He argues that, in determining whether something is relevant conduct, ‘the conduct should not be considered at a level of generality that would render worthless the relevant conduct analysis.’ Id. (quoting United States v. Hill, 79 F.3d 1477, 1483 (6th Cir. 1996)). Kennedy claims that the PSR offers no factual detail that would have permitted the district court to move beyond this impermissible level of generality because [n]owhere are the dates, improper deductions, or tax loss amounts for each of these 119 returns described. Id. at 25-26.
The evidence here does not demonstrate that the 118 other tax returns cited in the PSR are clearly unrelated. Pierce, 17 F.3d at 150. Application Note 2 of
Thus, the district court did not plainly err in accepting the PSR’s characterization of the 118 other tax returns as relevant conduct.
D. The District Court Did Not Err in Denying Kennedy an Acceptance-of-Responsibility Reduction.
1. Standard of Review
The defendant has the burden of demonstrating by a preponderance of the evidence that a reduction for acceptance of responsibility is warranted. United States v. Banks, 252 F.3d 801, 806 (6th Cir. 2001). We review a district court’s determination of acceptance of responsibility under the overall deferential scope of review set forth in Buford v. United States, 532 U.S. 59, 64-65 (2001). United States v. Bolden, 479 F.3d 455, 464 (6th Cir. 2007). [P]urely factual components of the acceptance of responsibility determination are rejected only if ... clearly erroneous. Id. [T]he trial court’s determination of whether a defendant has accepted responsibility is [g]enerally a question of fact. United States v. Morrison, 983 F.2d 730, 732 (6th Cir. 1993). However, if the only issue presented is the propriety of applying the reduction to the uncontested facts, the decision is reviewed de novo. United States v. Coss, 677 F.3d 278, 290 (6th Cir. 2012) (internal quotation marks omitted).
Here, neither party contests the facts relevant to the acceptance-of-responsibility reduction, so we review the district court’s decision de novo.
2. The district court properly denied Kennedy an acceptance-of-responsibility reduction
Kennedy argues that the district court erred in denying him an acceptance-of-responsibility reduction. First, he argues that [t]he district court improperly penalized [him] for pleading guilty after two days of trial in denying him an acceptance-of-responsibility reduction because the court focused only on the waste of government resources in preparing for trial. Appellant Br. at 28. In so doing, Kennedy argues that the district court misunderstood the concerns animating
Second, Kennedy argues that the district court erred because he fully satisfied the requirements of Section 3E1.1(a). Id. at 32-33. He points to his guilty plea prior to conviction by trial, and that he
We first note that Kennedy’s guilty plea standing alone is insufficient to entitle him to an acceptance-of-responsibility reduction. As Application Note 3 makes clear, [a] defendant who enters a guilty plea is not entitled to an adjustment under this section as a matter of right.
Turning to the factors cited by the district court, we hold that the district court did not commit an error of law in considering the resources the government spent in undertaking two days of trial in deeming Kennedy’s plea untimely.
At the sentencing hearing, the district court focused on the fact that the most if not all of the efficiencies associated with a timely plea were at least minimized in this case because the government prep was done, a jury was impaneled, [and] three days of evidence had been admitted. R. 90 (Sent’g Tr. at 18) (Page ID # 842). The district court did not discuss the timing of Kennedy’s plea as demonstrating manufactured or insincere remorse.
Looking first to the Sentencing Guidelines, the government rightly points out that Application Note 1(H) invites a district court to consider the timeliness of the defendant’s conduct in manifesting the acceptance of responsibility under
However, Application Note 6 appears to distinguish timeliness under
The timeliness of the defendant’s acceptance of responsibility is a consideration under both subsections, and is context specific. In general, the conduct qualifying for a decrease in offense level under subsection (b) will occur particularly early in the case. For example, to qualify under subsection (b), the defendant must have notified authorities of
his intention to enter a plea of guilty at a sufficiently early point in the process so that the government may avoid preparing for trial and the court may schedule its calendar efficiently.
The guidelines commentary also invites consideration of manufactured remorse, as Kennedy claims. But the commentary does not state that, once a defendant proceeds to trial, only manufactured remorse can be considered in the timeliness factor. And Application Note 2, which Kennedy cites, appears to be primarily focused on defendants convicted by trial. Id. cmt. n. 2 (emphasis added) ( This adjustment is not intended to apply to a defendant who puts the government to its burden of proof at trial by denying the essential factual elements of guilt, is convicted, and only then admits guilt and expresses remorse. ).
We previously have noted that the timing of a plea wasted government resources in preparing for trial in holding that district courts properly denied an acceptance-of-responsibility reduction under
Similarly, we hold that the district court did not commit an error of law in citing the statements attributed to Kennedy in his letters of support in denying him an acceptance-of-responsibility reduction.
The district court properly cited the letters of support from Kennedy’s wife and Sergeant Major Hubert as inconsistent evidence indicating that Kennedy did not accept responsibility for his crime. We have held that [m]erely expressing regret for the consequences of the criminal conduct, without admitting wrongful intent, does not constitute acceptance of responsibility within the meaning of the Guidelines. United States v. Genschow, 645 F.3d 803, 813 (6th Cir. 2011) (emphasis added). The two letters of support indicate that Kennedy did not admit wrongful intent. Instead, he characterized his guilty plea as necessary in the face of the government’s greater resources and his
In Kennedy’s wife’s letter of support, she wrote that, As he told me the morning he accepted the plea agreement, ‘When you’ve got the full force and unlimited resources of the United States government against you, how can you really fight it?’ R. 68-1 (Ex. A at 11) (Page ID # 245). Sergeant Major Hubert wrote:
I have spoken with Mr. Kennedy right after he took the plea agreement and asked him why he took this agreement. He stated to me that his attorney went into court totally unprepared to defend him and that on some level he had to take responsibility because he did make mistakes in some of the returns, but that’s what they were, mistakes.
Id. at 8 (Page ID # 242) (emphasis added). Similar language has been held to indicate denial of criminal intent. Genschow, 645 F.3d at 813-14 (pointing to the defendant’s statement that while I now recognize that this Court has determined my actions to have been wrong, I continue to believe that I acted honorably and in good faith ); United States v. Hughes, 283 Fed. Appx. 345, 353 n. 6 (6th Cir. 2008) (noting that our reading of the record did not reveal any indication that Hughes accepted responsibility for his actions[,] in part because of his statement during the allocution that he ‘made a mistake, honest mistake.’ ).
We have at least once looked to the defendant’s conduct as reflected in letters of support submitted on the defendant’s behalf as relevant to the acceptance-of-responsibility determination. See United States v. Montague, 519 Fed. Appx. 337, 338-39 (6th Cir. 2013) ( The record shows that Montague has convinced his family of his innocence, as both his mother and aunt made statements indicating that Montague was only in this position because he accepted a ride from the wrong people on the day of his arrest. ).
Moreover, Kennedy’s argument that the letters are not reflective of his conduct—what should be the focus of the guidelines—is misplaced. The district court relied on the letters only to the extent of what the authors reported that Kennedy had told them about his reason for pleading guilty. R. 90 (Sent’g Tr. at 19) (Page ID # 843) (emphasis added) ( [L]etters submitted in the record quoting the defendant in denying his responsibility for illegal conduct and basically just saying that he made mistakes and didn’t want to fight the government certainly are not indicative of someone who understands the wrongfulness of his actions, accepts responsibility for them, and is even sorry for them. ). Thus, the district court properly remained focused on Kennedy’s conduct and whether his conduct revealed that he had accepted responsibility.
In sum, hold that the district court properly denied Kennedy an acceptance-of-responsibility reduction given his untimely plea and the statements attributed to him in his letters of support.1
Finally, Kennedy raises an ineffective-assistance-of-counsel claim. Appellant Br. at 39. Kennedy alleges two errors. First, he points to his trial counsel’s alleged failure to review the written objections Kennedy prepared to the PSR before sending them to the probation officer. He argues this amounted to a breach of attorney-client privilege as well as a breach of an attorney’s obligation to review the PSR with his client and advise the client of the impacts communication with probation might have on sentencing outcomes. Appellant Br. at 40-41. He argues that his trial counsel’s action prejudiced him because the objections became part of the record and the district court cited those objections in denying him an acceptance-of-responsibility reduction. Id. at 42-43. Second, Kennedy points to his trial counsel’s failure to object to the patently unreliable tax loss calculations at sentencing, id. at 43, the adoption of which potentially resulted in a significant increase in the applicable sentencing range, id. at 44.
To prevail on an ineffective-assistance-of-counsel claim, a defendant must demonstrate that his trial counsel’s performance (1) ‘fell below an objective standard of reasonableness’ and (2) was prejudicial, i.e., ‘but for counsel’s unprofessional errors, the result of the proceeding would have been different.’ United States v. Franklin, 415 F.3d 537, 556 (6th Cir. 2005) (quoting Strickland v. Washington, 466 U.S. 668, 693-94 (1984)). We generally do not address claims of ineffective assistance of counsel on direct appeal. See, e.g., United States v. Bradley, 400 F.3d 459, 462 (6th Cir. 2005) (citing cases). However, there is a narrow exception to the general rule that ineffective assistance claims may not be considered on direct appeal—namely, when the existing record is adequate to assess properly the merits of the claim. Franklin, 415 F.3d at 555-56 (internal quotation marks and citation omitted).
The record here does not appear to fall within the narrow exception to the general rule of declining to consider ineffective-assistance-of-counsel claims on direct appeal. There is certainly more evidence than is typically the case on direct appeal of problems with Kennedy’s trial counsel’s performance. Kennedy’s trial counsel appeared to imply that he had failed to review Kennedy’s objections to the PSR at all before sending them to probation:
The objections that were filed by Mr. Kennedy. I was not in the office for a couple of days then. I said, Let’s get the objections in. We got them in, we filed them. We sent them. We then had a meeting with the Probation Office. We went over the objections. We made a decision together that those are not appropriate objections.
R. 90 (Sent’g Tr. at 13) (Page ID # 837). And Kennedy’s statement later in the sentencing hearing that he had thought that [his trial counsel] was going to review those [objections] and give me counsel before those objections went in [to probation] would seem to support this. Id. at 32 (Page ID # 856). However, it is not clear if Kennedy’s trial counsel had previously discussed the PSR with Kennedy or the objections Kennedy eventually articulated in written form. If he had not, this would seem to cast significant doubt on there being any valid strategic reason for
Regarding the failure to object to the tax-loss calculation, the record does not contain any information as to why Kennedy’s trial counsel withdrew Kennedy’s original objection to the tax-loss calculation. Thus, it is not possible to determine whether Kennedy’s counsel had no strategic reason for doing so. See United States v. Gilmore, 387 Fed. Appx. 613, 617 (6th Cir. 2010) ( The court declines to rule on Gilmore’s ineffective assistance claim on direct appeal because the existing record is not adequate to evaluate whether Gilmore’s counsel had a strategic reason to withdraw his objection to the PSR’s drug quantity. ).
III. CONCLUSION
For the reasons set forth above, we AFFIRM the sentence of the district court and DECLINE to review Kennedy’s ineffective-assistance-of-counsel claim.