United States v. KinterUnited States v. Kinter
- Reporters:
- Before:
- Niemeyer, Traxler, Frederick P. Stamp Jr.
Before NIEMEYER and TRAXLER, Circuit Judges, and Frederick P. STAMP, Jr., Chief United States District Judge for the Northern District of West Virginia, sitting by designation.
Affirmed by published opinion. Judge Niemeyer wrote the opinion, in which Judge Traxler and Chief Judge Stamp joined.
COUNSEL
OPINION
NIEMEYER, Circuit Judge:
For his bribery-related convictions, Paul Kinter was sentenced to 46 months imprisonment, a term based on the amount of benefit that a government contractor received as a result of the bribes rather than the lesser amount of benefit that Kinter personally received from the scheme. It is this lesser amount that Kinter contends is appropriate to consider under
I
When Scott King, an IRS employee, informed Paul Kinter, his former father-in-law, during thе summer of 1990 that the IRS planned to consolidate many of its computer maintenance contracts into a single, multimillion dollar contract that it would award to a company certified by the Small Business Administration as a § 8(a) contractor,* the two men decided to sell King‘s influence at the IRS in exchange for kickbacks from a yet-to-be-identified company for whom they would obtain the
With the assistance of a co-conspirator, Mark Nicholas, Kinter eventually located and brought into the scheme Washington Data Systems, Inc., and its subcontractor RGI, Inc. (collectively “Washington Data“), as a § 8(a) contractor. In furtherance of the scheme, Washington Data hired Kinter and Nicholas as “consultants” and agreed to pay them a kickback of approximately 3% of any revenue that Kinter and Nicholas would secure for Washington Data. Kinter and Nicholas were to pay King his share from their amount. Kinter and Nicholas initially рaid King approximately $300 per week. After King recommended Washington Data to the contracting officer and Washington Data obtained its first purchase order, King‘s payments increased to $500 per week. Washington Data had no previous experience in computer maintenance and would not have received the IRS‘s contract but for King‘s influence with the contracting officer.
Following the successful completion of that first contract, Washington Data had its “foot in the door” and received approximately 30 short-term and long-term purchase ordеrs from the IRS over the following 5 years. As Kinter had anticipated, the revenues to Washington Data from these contracts exceeded $57 million, generating $9.5 million in profits for Washington Data. Although King ceased to be the technical representative at the IRS‘s Martinsburg facility in 1992, Kinter and King continued to receive payments from Washington Data until December 1996. In the aggregate, Kinter received between $340,000 and $350,000 from Washington Data, and he paid a substantial portion of this amount to King.
The grand jury indicted Kinter in December 1998 on charges of conspiracy, in violation of
This appeal followed.
II
For bribery offenses, the Sentencing Guidelines provide that the sentence shall be enhanced by the greatest of (1) the value of the bribery payment, (2) the “benefit received or to be received” as a result of the bribery payment, or (3) the loss to the government.
The government contends that the proper measure for determining the enhancement in this case is the “benefit received” by Washington Data — the $9.5 million profit that it received from the IRS contracts, yielding the 14-level enhancement that the district court found in this case.
Because resolution of this issue turns primarily upon the legal interpretation of the Sentencing Guidelines, our standard of review is de novo. See United States v. Nale, 101 F.3d 1000, 1003 (4th Cir. 1996); United States v. Jones, 31 F.3d 1304, 1315 (4th Cir. 1994).
Kinter‘s argument discounts the effect of his crime in a manner that is contrary to the explicit provisions of the Sentencing Guidelines.
(A) all acts and omissions committed, aided, abetted, counseled, commanded, induced, procured, or willfully caused by the defendant; and
(B) in the case of a jointly undertaken criminal activity (criminal plan, scheme, endeavor, or enterprise undertaken by the defendant in concert with others, whether or not charged as a conspiracy), all reasonably foreseeable acts and omissions of others in furtherance of the jointly undertaken criminal activity,
that occurrеd during the commission of the offense of conviction, in preparation for that offense, or in the course of attempting to avoid detection or responsibility for that offense . . . .
Mr. Nicholas may have been more important than Mr. Kinter in getting to an 8(a) [contractor] that was willing to pay the kickbacks, but Mr. Kinter was no less instrumental in arranging for this three-way relationship to take place.
He not only, in my view, was necessary to that beginning, he participated in it, . . . [and he] was intimately involved in the decisions that the coconspirators made and carried out.
* * *
Mr. Kinter was very involved in the ongoing process of receiving the commissions from [Washington Data] and getting them laundered and split up.
These findings alone make the $9.5 million in profits received by Washington Data relevant to the
The district court also found thаt Kinter and Washington Data undertook the bribery conspiracy jointly and that during the conspiracy Kinter foresaw the scope of the continued course of dealing between the IRS and Washington Data, thus rendering the contractor‘s profits includable also through application of
[T]he initiation of this and the continuing receipt of the commissions [from Washington Data] is all part of the conduct that constitutes the bribery scheme. There was no break, no unforeseen intervening event that stopped the course of this bribery scheme. The fact that IRS continued dealing with [Washingtоn Data] was not unforeseen. It was, in fact, foreseen. It was the purpose of setting up the arrangement.
(Emphasis added). The court found further,
[Washington Data] decided to take [Nicholas and Kinter] up on their offer and benefited mightily from it, so did Mr. Kinter, financially while it lasted,
and I don‘t think that the $9.5 million or, frankly, over $5 million, the 14 level adjustment overrepresents the seriousness of what happened here.
These findings likewise make the full $9.5 million relevant in the
In addition to the broad scope of activities made relevant by both subsections (A) and (B) of
At bottom, because substantial evidence supported the lower court‘s finding that Kinter acted on Washington Data‘s behalf, the district court‘s inclusion of the $9.5 million in its
Notwithstanding these Sentencing Guidelines’ instructions, Kinter argues skillfully that our decision in United States v. Ellis, 951 F.2d 580 (4th Cir. 1992), confines the scope of “benefit received” under
We were careful in Ellis, however, to limit our holding to its specific facts and distinguish Muldoon, a case in which we stated that the district court should not focus upon the defendant‘s personal benefit when making
Muldoon involved discrete government contracts, for which there is a reliable measure of the total benefit received — net profit on the illegally obtained contract. In contrast, calculating the total benefit received by companies who profit from improperly passed legislation is a far less certain endeavor, one that (as this case suggests) is potentially limitless in reach.
Ellis, 951 F.2d at 586 (citing Muldoon, 931 F.2d at 289); see also United States v. Kant, 946 F.2d 267, 269 (4th Cir. 1991) (using, without protest from the defendant, corporate benefit as the measure of “benefit received“).
Our driving concern in Ellis was the difficulty inherent in computing the total benefit from the bribe-induced legislation at issue — a vague, indeterminate measure that would have extended to persons and business that had no direct relationship with the defendant. Cf. Gillam, 167 F.3d at 1279 (“In Ellis, the court of appeals simply rejected the government‘s cross-appeal from a determination that the
Perhaps more important to the applicability of Ellis to the case before us is the fact that we rendered our decision in Ellis prior to the 1992 amendments to
Thus, because the pertinent language in Ellis has no application to the facts of this case and, in any event, has been put into question by subsequent amendments to the Sentencing Guidelines, its holding does not bar us from imputing to Kinter, in accordance with the Sentencing Guidelines, all of the benefits received by Washington Data as a result of his bribery activities. In so holding, we join all of the other circuit courts that have сonsidered the issue, which have uniformly held that when a middleman defendant acts on behalf of a third-party payer of the bribe, the district court may consider the payer‘s bribe-generated benefits when calculating the “benefit received” under
III
Seizing upon the Ellis court‘s discussion of the reliability-of-profit measures, Kinter also contends that the $9.5 million profit figure was not sufficiently reliable to be inсluded in the district court‘s calculation of “benefit received.” He argues that the $9.5 million amount represents benefits received by Washington Data not only for contracts to which the bribes were directly related but also subsequent contracts awarded to Washington Data. Kinter‘s argument is grounded upon his assertion that he made payments to King only in exchange for King‘s recommendation that Washington Data be awarded an initial contract, valued at $950,000. He maintains that after the first contract, a combination of institutional inertia, competent performance by Washingtоn Data, and a lack of other qualified § 8(a) contractors led to the subsequent awards worth $57 million to Washington Data over the course of several years. In other words, he claims that the evidence did not support the sentencing court‘s finding that his bribes were the but-for cause of the $9.5 million benefit to Washington Data. The district court‘s determination on this mixed question of law and fact is subjected to a standard approximating clear error review when, as here, the issues involved are “essentially factual.” United States v. Daughtrey, 874 F.2d 213, 217 (4th Cir. 1989).
The threshold for the causation inquiry for
Kinter points out that the “foot in the door” evidence should not justify an analysis that would permit the “‘benefit received’ to run in perpetuity.” While we agree with this observation, we note that
IV
Finally, we permitted Kinter to file a supplemental brief addressing the relevance
At issue in Apprendi was a New Jersey hate crime statute that provided for the enhancement of a defendant‘s sentence if the trial judge found, by a preponderance of the evidence, that the offense was committed with a “purpose to intimidate an individual or group of individuals because of race, color, gender, handicap, religion, sexual orientation or ethnicity.” Apprendi, 120 S. Ct. at 2351 (quoting N.J. Stat. Ann. § 2C:44-3(e) (internal quotation marks omitted)). After Apprendi fired several bullets into the home of an African-American family in a previously all-white neighborhood, he pled guilty before a state court to a firearm possession charge for which the maximum penalty, as established by New Jersey statute, was 10 years imprisonment. See id. at 2352. The trial court, however, found by a preponderance of the evidence that Apprendi‘s conduct was “motivated by racial bias” and sentenced him tо a 12-year term. Id. After the New Jersey Supreme Court affirmed the judgment, the United States Supreme Court reversed, concluding that “[o]ther than the fact of a prior conviction, any fact that increases the penalty for a crime beyond the prescribed statutory maximum must be submitted to a jury, and proved beyond a reasonable doubt.” Id. at 2362-63. Because Apprendi had not admitted his bias in the plea agreement and New Jersey had not proven that bias to a jury beyond a reasonable doubt, the Court concluded that Apprendi could be subjected only to the 10-year maximum punishmеnt for firearm possession — the only crime for which he had waived the process guaranteed to him by the Fifth and Fourteenth Amendments. See id. at 2355-56.
In the case before us, the sentencing judge determined, under a preponderance standard, that Kinter paid more than one bribe and that Washington Data‘s profit was $9.5 million — findings that required the court to impose a sentence of between 46 and 57 months. In the absence of these findings, the maximum punishment allowable under the Sentencing Guidelines for a person standing in Kinter‘s shoes would have been ten months. See
The Apprendi Court, however, did not paint with the broad brush that Kinter now offers us. On thе contrary, the majority opinion explicitly limited its holding to factual determinations “that increase[] the penalty for a crime beyond the prescribed statutory maximum.” Apprendi, 120 S. Ct. at 2362-63 (emphasis added). The outcome of our case thus turns upon the definition of “prescribed statutory maximum.” If the district court‘s factual findings did not result in an enhancement that exceeded that maximum, Apprendi is irrelevant. The government contends, and all of the Courts of Appeals to have considered the issue have thus far agreed, that to find the “prescribed statutory maximum” as contemplated in Apprendi, one need only look to the language of the statute
Although we ultimately agree with the conclusion reached by these other Courts of Appeals, Kinter‘s argument is not without support, and the issue is sufficiently complex to warrant a brief discussion here. After all, the Apprendi dissenters expressed their fear that Apprendi would eventually stand for the principle that “a defendant is entitled to have a jury decide, by proof beyond a reasonable doubt, every fact relevant to the determination of [his] sentence under a determinate-sentencing scheme” — a fear that the majority did little to allay. Apprendi, 120 S. Ct. at 2393-94 (O‘Connor, J., dissenting). Moreover, claims such as Kinter‘s are indeed covered by the holding of Apprendi if the relevant “prescribed statutory maximum” is found in the Sentencing Guidelines rather than on the face of the relevant substantive statute.
And though we reject it here, there is at least a colorable argument that the Sentencing Guidelines do provide that maximum. As Justice Thomas noted in his concurring opinion in Apprendi, “the Guidelines ‘have the force and effect of laws.‘” Apprendi, 120 S. Ct. at 2380 n.11 (Thomas, J., concurring) (quoting Mistretta v. United States, 488 U.S. 361, 413 (1989) (Scalia, J., dissenting)). Moreover, because the maximums set by the Sentencing Guidelines mаy not be exceeded by sentencing judges, they are legally binding enactments in a manner nearly indistinguishable from congressionally enacted criminal statutes. If, for example, the district court in this case had sentenced Kinter to 59 months imprisonment on the bribery charge, we would have been required to vacate it because the court would have disregarded the maximum 57-month penalty for Kinter‘s crime prescribed by law (i.e., by the Sentencing Guidelines) — even though the 59-month sentence would have been well below the 15-year maximum established by
If this analysis were correct, Apprendi would indeed work a watershed change upon the federal courts’ current sentencing practices. District courts would no longer be permitted to make factual determinations that had the effect, in any real sense, of enhancing the defendant‘s sentence, and the Sentencing Guidelines would thus be rendered essentially useless, insidiously undermining the constitutional seal of approval bestowed upon the Sentencing Commission by the Supreme Court in Mistretta. Cf. Apprendi, 120 S. Ct. at 2391-95 (O‘Connor, J., dissenting) (warning that the majority opinion would have precisely this effect). But cf. id. at 2400 (Breyer, J., dissenting) (noting that the majority had expressed “no constitutional objection” to the Guidelines).
We conclude, however, that the Sentencing Guidelines pass muster under the Apprendi Court‘s conception of due process for reasons that closely parallel the principles animating the Mistretta Court‘s separation-of-powers-based decision. Mistretta made clear that the Sentencing Commission and its Sentencing Guidelines enjoy a unique constitutional status. See Apprendi, 120 S. Ct. at 2380 n.11 (Thomas,
This characterization of the Sentencing Guidelines is extremely significant because the Supreme Court, in both Apprendi and its precursor, Jones v. United States, 526 U.S. 227 (1999), explained that there is no constitutional infirmity in a trial court‘s use of facts proven only by a preponderance of the evidence when exercising the wide discretion to “impos[e] a judgment within the range prescribed by statute.” Apprendi, 120 S. Ct. at 2358; see also Jones, 526 U.S. at 248 (“It is not, of course, that anyone today would claim that every fact with a bearing on sentencing must be found by a jury; we have resolved that general issue and have no intention of questioning its resolution“); cf. United States v. Watts, 519 U.S. 148, 156 (1997) (per curiam) (holding that, in general, the use of a preponderance standard at sentencing satisfies due process). There is, accordingly, no due process infirmity in a district court‘s use of similarly-proven facts to determine a sentence under the constitutionally unique process established by the Commission, whiсh is itself part of the judicial branch, given that
The Sentencing Guidelines do not create crimes. They merely guide the discretion of district courts in determining sentences within a legislatively-determined range, and this discretion has been entrusted to the federal courts “[f]rom the beginning of the Republic.” Apprendi, 120 S. Ct. at 2358 n.9 (quoting K. Stith and J. Cabranes, Fear of Judging: Sentencing Guidelines in the Federal Courts 9 (1998) (internal quotation marks omitted)). Accordingly, we agree with the conclusions reached by the Fifth, Seventh, and Eleventh circuits that the relevant “maximum” under Apprendi is found on the face of the statute rather than in the Sentencing Guidelines. See Nealy, 232 F.3d 825; Doggett, 230 F.3d 160; Talbott, 226 F.3d at 869; cf. Apprendi, 120 S. Ct. at 2366 n.21 (citing, with seeming approval, language from Edwards v. United States, 523 U.S. 511, 515 (1998), indicating that the statute itself provides the relevant maximum). Because the sentencing enhancements at issue in this case did not extend Kinter‘s sentence beyond the maximums prescribed for his offenses by the substantive provisions of the United States Code, the government was not required to submit to a jury and prove beyond a reasonable doubt the facts relevant to those enhancements.
For this reason and the others given above, the judgment of the district court is
AFFIRMED.