Lead Opinion
Judge SACK dissents in part in a separate opinion.
Defendants-Appellants Sanjay Kumar and Stephen Richards appeal from separate judgments of conviction by the district court (I. Leo Glasser, Judge), pursuant to their guilty pleas to several counts of conspiracy, securities and wire fraud, obstruction of justice, and perjury. After accepting their pleas, the district court calculated defendants’ Guidelines ranges for them fraud and obstruction offenses pursuant to the Sentencing Guidelines Manual (“Guidelines”) in effect at the time of their sentencings, and sentenced Kumar and Richards to non-Guidelines sentences of imprisonment of 144 months and 84 months, respectively, and ordered restitution payments of $800 million and $29 million, respectively.
On appeal, Richards challenges his conviction for obstruction of justice, arguing that the indictment failed to properly charge him with that offense. In addition, Richards attacks his guilty plea to all counts as constitutionally infirm because it resulted from undue coercion by the government. Both defendants argue that, by calculating their Guidelines range according to the Guidelines in effect at sentencing, instead of at the time the fraud offenses were committed, the district court sentenced them in violation of the Ex Post Facto clause. They also claim that the district court improperly denied them ac
We find no infirmity in Richards’s conviction, in the district court’s application of the 2005 version of the Guidelines,
BACKGROUND
The following facts are material to this appeal.
Kumar joined Computer Associates (“CA”), a publicly traded corporation, in August 1987 and was elevated to CEO in August of 2000 and to Chairman of the Board of Directors in 2002. Richards joined CA in 1988 and became Head of North American Sales in 1999. During the tenure of both defendants, CA engaged in a fraudulent accounting practice known as the “35-day month,” whereby CA backdated contracts executed in the first few days of a financial quarter to recognize that revenue in the prior quarter. The purpose of the 35-day month practice, which began in the 1980s under Kumar’s predecessor, was to deceive investors into believing that the company had met or exceeded its quarterly earnings estimates.
In February 2002, the United States Attorney’s Office (“USAO”) and Securities and Exchange Commission (“SEC”) began a joint investigation into the 35-day month practice as contravening both accounting principles and federal securities law. As part of its investigation, government investigators sought witness statements from CA personnel. On June 9, 2003, the USAO and SEC requested that CA conduct its own internal investigation into the practice and give the USAO and SEC “direct access” to company employees. CA’s outside counsel advised CA to comply fully with the investigation.
On August 25, 2003, the SEC subpoenaed the testimony of ten individuals associated with CA, including Kumar and Richards. The SEC interviews were held at the USAO office in Central Islip, New York. On September 22, 2003, prosecutors and SEC staff told Richards’s counsel that Richards was a target of their criminal investigation, and the SEC reiterated its demand that Richards comply with the subpoena for his testimony. In early October 2003, CA told Richards that he would be terminated if he didn’t comply with the subpoena. On October 22, 2003, CA’s outside counsel interviewed Richards, and the following day, Richards testified before the SEC. Richards falsely denied knowledge of the 35-day month practice during both meetings and in his testimony.
On September 22, 2004, CA entered into a deferred prosecution agreement with the USAO and a civil settlement with the SEC. The following day, an indictment charging Richards and Kumar was unsealed. A superceding indictment was filed on May 17, 2005. By this indictment, Richards was charged with both conspiracy to commit, and substantive counts of, securities and wire fraud, as well as filing false public statements with the SEC and perjury. Richards was also charged under 18 U.S.C. § 1512(c) with obstruction of justice arising out of his false exculpatory statements to CA’s counsel and the SEC.
The superceding indictment charged Kumar with both conspiracy to commit, and substantive counts of, securities and wire fraud, as well as filing false public state
Both Richards and Kumar made various motions to dismiss the charges against them. Relevant to this appeal, first they unsuccessfully moved to dismiss the obstruction charges, arguing that their oral statements to government investigators were beyond the reach of 18 U.S.C. § 1512(c), which they claimed was confined to documentary evidence.
Next, Richards moved to suppress his false statements to CA’s outside counsel and the SEC, claiming that they were coerced in violation of the Fifth Amendment. Without addressing the merits, the district court denied the motion on the basis that Richards had not shown “good cause” for failing to timely file the motion to suppress pursuant to the court-ordered deadline.
In April 2006, both defendants pled guilty to all charges and the Probation Department prepared a Presentence Report (“PSR”) for each defendant. Both PSRs calculated defendants’ Guidelines ranges based on the instructions provided in the 2005 Sentencing Guidelines, notwithstanding the fact that the 35-day month practice—the basis for the securities fraud charges—ended in 2000. Richards’s PSR arrived at an offense level of 50 and a Guidelines range of life imprisonment, and Kumar’s PSR recommended an offense level of 51 and a Guidelines range of life imprisonment. Both PSRs calculated losses to the public resulting from the 35-day month practice to exceed $400 million.
In August 2006, the defendants submitted objections to the Guidelines calculations in the PSR. The defendants argued that application of the 2005 Sentencing Guidelines (effective November 2005) to the securities fraud offenses instead of the 1998 Sentencing Guidelines (effective November 1998) would violate the Ex Post Facto clause because the 2005 Guidelines contained several significant enhancements for securities fraud that were not in effect when the fraud offenses were committed.
In November 2006, the district court sentenced both defendants under the 2005
The district court then decided to impose non-Guidelines sentences for both defendants, sentencing downwardly from the Guidelines’ calculation of life imprisonment. The court found that “[t]o impose th[e] sentenced] [recommended by the Guidelines] in this case would shock the conscience of this Court ... [and] the conscience of the reasonable person.” Kumar Sentencing Tr. 65:24-66:1, Nov. 2, 2006; see also Richards Sentencing Tr. 25:5-9. Accordingly, the court sentenced Kumar and Richards to imprisonment terms of twelve years and seven years, respectively.
Defendants appealed.
DISCUSSION
I. Was Richards Properly Convicted Of Obstruction Of Justice?
Richards claims that he was “erroneously convicted” of obstruction of justice because 18 U.S.C. § 1512(c),
A plea of guilty “waive[s] any and all non-jurisdictional defects in the indictment.” United States v. Moloney,
Richards claims that he has met this burden by showing that § 1512(c)(2) does not proscribe false testimony, thereby establishing that he did not violate a federal statute. However, regardless of whether Richards’s false testimony violated § 1512(c)(2), it plainly violated § 1503(a), and the indictment charges at least that offense. Because the indictment created federal jurisdiction under § 1503(a), Richards’s claim has no jurisdictional significance and thus is waived by his guilty plea.
Section 1503(a) provides, in relevant part, that “[w]hoever corruptly ... influences, obstructs, or impedes, or endeavors to influence, obstruct, or impede, the due administration of justice” is guilty of a criminal violation. 18 U.S.C. § 1503(a). In United States v. Aguilar,
However, § 1503(a) only prohibits false testimony that has a direct “nexus” to an official government proceeding. Aguilar,
[t]he action taken by the accused must be with an intent to influence judicial or grand jury proceedings; it is not enough that there be an intent to influence some ancillary proceeding, such as an investigation independent of the court’s or grand jury’s authority.... [T]he act must have a relationship in time, causation, or logic with the judicial proceedings. In other words, the endeavor must have the natural and probable effect of interfering with the due administration of justice.... [I]f the defendant lacks knowledge that his actions are likely to affect the judicial proceeding, he lacks the requisite intent to obstruct.
Id. at 599,
Here, Richards’s conduct easily falls within the ambit of § 1503(a). Richards lied to the SEC in an attempt to “impede” the SEC’s ongoing investigation, which Richards knew was not simply an agency fishing expedition or an “ancillary proceeding” that might or might not result in criminal proceedings. Id. at 599,
In addition, the indictment fully apprised Richards of the elements of his offense under § 1503(a). Specifically, the indictment stated that
Richards well knew and believed that certain of the statements he made during the interviews were false and that he otherwise concealed during the interviews information which he knew to be material to the Government Investigations. Richards further well knew, and in fact intended, that his false statements and concealment of material information would have the effect of obstructing and impeding the Government Investigations.
As the government correctly notes, “[t]he citation of a statutory section number ... is not a part of the offense, and ... an allegedly erroneous statutory citation is not a jurisdictional defect.” Gov’t Br. 11; see Fed.R.Crim.P. 7(c)(3) (“Unless the defendant was misled and thereby prejudiced, neither an error in a citation nor a citation’s omission is a ground ... to reverse a conviction.”). The failure of the indictment to specify § 1503(a), as opposed to § 1512(c)(2), is therefore not grounds for vacating Richards’s guilty plea.
Richards’s remaining arguments, the government also correctly notes, are “mere corollaries of [his] ... claim that [he] pleaded to a ‘non-offense.’ ” Gov’t Br. 13-14. For example, Richards argues that his guilty plea should be vacated because he was “misinformed of the elements of [his] crime,” since, according to Richards, § 1512(c)(2) does not reach testimonial evidence. Richards Br. 19 (citing Bousley v. United States,
II. Does Richards’s Guilty Plea Bar His Coercion Claim?
Next, Richards argues that the government violated the Fifth Amendment’s prohibition on government-compelled testimony by placing improper pressure on CA to cooperate in the government’s investigation that resulted in CA’s insistence that Richards either testify before the SEC or be terminated. The district court rejected Richards’s motion to suppress his testimony, which was admittedly false and became the basis for the obstruction of justice charge to which Richards pled guilty, as untimely in light of the district court’s schedule for motions. On appeal, Richards argues that his guilty plea should not bar his coercion claim because review of his claim is necessary “to preserve the integrity of the judicial process.” Richards Br. 32. Richards’s coercion claim is easily resolved because the Fifth Amendment does not protect false testimony.
As previously noted, a plea of guilty “waive[s] any and all non-jurisdictional defects in the indictment.” Moloney,
Richards’s coercion claim is not viable, because it is based on a fatally flawed premise: that false statements—whether or not made under coercive circumstances—are protected by the Fifth Amendment. To the contrary, the Supreme Court has repeatedly held that the Fifth Amendment does not “eonfer[] a privilege to lie.” Brogan v. United States,
Richards is attempting to turn the “dilemma” faced by individuals who are im
Richards argues that the rule denying constitutional protection to coerced false testimony does not apply to this case because the government acted “covert[ly]” in securing his testimony, by “compell[ing][him] to speak without disclosing ... its role in his dilemma to speak or be fired.” Richards Letter at 1. But even assuming that the government engaged in such “covert acts” by not revealing its role in CA’s investigation, see id.—a curious claim given that Richards was interviewed at the United States Attorney’s Office, and now concedes on appeal that he knew at his interview that he was a target of a securities fraud investigation—Richards cites no case law supporting his argument, nor can he because, as he concedes, even “[o]utside the immunity context, courts often have repeated that the Fifth Amendment grants no right to lie,” id. at 2.
While circumstances may provide a duress defense due to improper government pressure, see, e.g., United States v. Knox,
III. Do The Defendants’ Sentences Violate The Ex Post Facto Clause?
Next, Kumar and Richards contend that application of the 2005 Guidelines to their fraud offenses, which were completed in 2000, violated the Ex Post Facto clause. See U.S. Const. art. I, § 9, cl. 3; see also art. I, § 10, cl. 1 (prohibiting states from passing any ex post facto law). We believe this claim is without merit.
A “sentencing court must generally apply the version of the Guidelines that is in effect at the time of sentencing, unless there is an ex post facto problem” with such application. United States v. Rodriguez,
The defendants contend that application of the 2005 Guidelines to their fraud offenses was both “disadvantage[ous]” and “retrospective.” Miller,
Here, there is no question that application of the 2005 Guidelines disadvantaged the defendants by subjecting them to the higher ranges of the 2005 Guidelines compared to the 1998 version of the Guidelines in effect when the 35-day month practice was discontinued in October 2000.
We previously reserved ruling on this question. See United States v. Santopietro,
A majority of circuit courts has held that the one-book rule does not contravene the Ex Post Facto clause, “at least as applied ... to a series of similar offenses.” Santopietro,
The Third and Ninth circuits, however, have rejected the Commission’s position as incompatible with the Ex Post Facto clause. In United States v. Ortland, the defendant was charged with five identical counts of mail fraud.
The Ninth Circuit viewed each count as a “completed” offense, and concluded that “[application of the [Commission’s] policy statement in this case would violate the Constitution; its application would cause Ortland’s sentence on earlier, completed counts to be increased by a later Guideline.” Id. at 547. The Ortland court further questioned the “logic[ ]” behind the one-book rule, opining that
[t]he harm caused by the earlier offenses can be counted in sentencing the later one. That does not mean that the punishment for the earlier offenses themselves can be increased, simply because the punishment for the later one can be. In fact, were the later count to fall at some time after sentencing, all that would remain would be the earlier sentences, which would be too long. There are, in fact, five separate crimes; each carnes its own punishment, even if the sentences are all run concurrently to the extent that they overlap.
Id. (emphasis in original) (internal citation omitted). The Ortland court effectively found that application of the one-book rule under the circumstances would be akin to the “tail wagging the dog.” See, e.g., United States v. Bertoli,
In Santopietro we declined to reach this issue, in part because of the circuit conflict, and in part because it was possible that the defendant’s sentence in that case would not be affected by the difference in the two Guidelines versions. Id. at 96-97.
We conclude that the one-book rule set forth in § 1B1.11(b)(3) does not violate the Ex Post Facto clause when applied to the sentencing of offenses committed both before and after the publication of a revised version of the Guidelines. “[C]entral to the ex post facto prohibition is a concern for ‘the lack of fair notice and governmental restraint when the legislature increases punishment beyond what was prescribed when the crime was consummated.’ ” Miller,
Applying these principles to § 1B1.11(b)(3), we hold that the adoption of the one-book rule prior to the commission of the defendants’ obstruction offense had placed them on notice of the consequences of committing that second offense. That the consequences of the second offense included the application of the post-amendment Guidelines to all offenses considered at the defendants’ sentencing was fully apparent prior to the commission of the crimes that triggered those consequences. When the defendants committed their obstruction offenses, “it was not the amendments to the Sentencing Guidelines that disadvantaged [the defendants], it was [their] election to continue [their] criminal activity.” Cooper,
Our affirmance of the defendants’ sentences on this ground offends neither of the fundamental concerns—notice and governmental restraint—protected by the Ex Post Facto clause. As to notice, we observe that prior to the commission of their obstruction offenses the defendants could have altered them conduct so as to avoid any heightened punishment imposed on the basis of the one-book rule by choosing not to obstruct the government’s investigation of their prior fraud. As to governmental restraint, our holding continues to prevent the Sentencing Commission and Congress from imposing a heightened punishment following the commission of the criminal conduct triggering that punishment. As the Guidelines themselves recognize, application of the one-book rule does not, and indeed may not, entail the application of a sentencing range devised
The one-book rule, when it leads to a higher sentencing range than would be applied to a single offense, operates in a manner similar to that of the recidivist statutes and “three strikes” laws upheld by the Supreme Court and our sister circuits in the past. The Supreme Court in Gryger v. Burke,
The fact that the impetus for enacting the recidivist statutes was to reflect the greater culpability associated with the latter offenses, whereas the impetus for the enactment of the one-book rule is to avoid “piecemeal” sentencing, U.S.S.G. § 1B1.11 cmt. background (2008), is of no relevance for purposes of determining the retroactivity of the legal consequences of a defendant’s actions. It might also be argued that the recidivist statutes impose punishment upon only a single crime, the prior offenses having already been committed and for which the defendant had been sentenced. Of the seven cases cited above, however, six place no reliance on that potential distinction. Only the Eighth Circuit, in Farmer, implies that the sentencing of only the last crime that triggered the consequences of the recidivist statute was a factor supporting the constitutionality of
Kumar offers a hypothetical situation that, he claims, demonstrates the incorrectness of our ruling. Kumar Br. 25. In
In substance, the defendants propose a rule requiring notice before the first offense of the sentencing consequences flowing from subsequent offenses. The emptiness of the notice demanded by the defendants’ position is obvious. Notice of the consequences of a subsequent offense, an offense presumably not even contemplated at the time the first offense is committed, would have no bearing on the commission of the first offense. The one-book rule only becomes relevant to a defendant at the time of the commission of a subsequent offense, when it puts the defendant on notice that when he commits that subsequent offense the sentence for his first offense will be higher than it would have been otherwise.
In rejecting the holdings of the Third and Ninth circuits, we recognize the practical—though unlikely—risk that applying the one-book rule to offenses that straddle a Guidelines revision could result in a defendant being sentenced for offenses according to the revised Guidelines only to see the second offense, which enabled the application of the one-book rule, fall out after sentencing. See Ortland,
IV. Was The Loss Calculation Clearly Erroneous?
Next, the defendants argue that the district court’s determination that their fraudulent conduct resulted in financial losses greater than $400 million was clearly erroneous and, as a result, improperly enhanced their Guidelines level by thirty points. The government responds that there was ample support for the district court’s calculation based on the testimony of the government’s expert at the Fatico
A sentencing court is not required to compute the loss resulting from a fraud offense “with precision.” United States v. Jacobs,
The loss calculation in this case was sharply disputed. The most significant area of disagreement centered on how to properly frame the economic impact of the 35-day month practice. The government’s expert, Dr. Mukesh Bajaj, framed the loss resulting from the 35-day month practice as an “earnings miss,” which caused an estimated 10.68% decline in CA’s stock price that translated into a loss of $330 million for one quarter of fiscal year 2000 alone. Conversely, the defendants’ expert, Professor Daniel Fischel, denied that the 35-day month practice caused an “earnings miss,” whereby the earnings CA reported were completely “fabricatefd],” but instead testified that the practice only caused an “earnings shift,” whereby earnings that were properly attributable to a future quarter were reported in the previous quarter. Kumar Br. 29-30 (internal quotation marks omitted). Fischel did not submit his own loss calculation, but focused only on refuting Bajaj’s analysis.
The district court held a Fatico hearing in order to untangle this web. During the hearing, the district court questioned both Bajaj and Fischel on their respective analyses. Specifically, the district court challenged Bajaj’s analysis as based on only one quarter’s losses, which Fischel argued resulted in an artificially inflated loss calculation. In turn, the district court questioned Fischel’s analysis insofar as seeming to imply that the fraudulent conduct caused no economic loss whatsoever. Fischel conceded, however, that, even if Bajaj’s “earnings miss” nomenclature was inaccurate, there was still an investor loss to be ascertained based not only on the market impact of the 35-day month practice on earnings, but also on the “real effect on cash flows resulting from th[e] disclosure” of the practice, which led to a drop in confidence in CA’s management and market speculation about the extent of the fraudulent activity. See Fatico Hr’g Tr. 416:13-14, Oct. 25, 2006.
Ultimately, the district court accepted Bajaj’s calculation. The court found that “[a]lthough[the] precise dollar amount of
On appeal, Kumar and Richards claim that the district court’s reliance on Bajaj’s “earnings miss” analysis was clearly erroneous, because Fischel showed that the 35-day month practice did not result in earnings misses but instead in earnings shifts whereby any earnings lost in one quarter were made up in the subsequent one. As an initial matter, the record reveals that Fischel’s objection to the term “earnings miss” was partly semantic. As the defendants now concede, Bajaj did not analyze the 35-day month practice as resulting in an earnings miss, but instead his analysis simply “removed the earnings associated with each contract from the quarter in which it had been improperly booked and ‘re-booked’ it in the proper quarter.” Kumar Br. 27. However, despite this concession, the defendants argue that Bajaj’s calculation was nevertheless erroneous because he only calculated the “miss” part of the shift, and did not take into account that, had CA “reported ... its earnings correctly, ... it would have reported higher earnings in the third and fourth quarters of fiscal year 2000 than the earnings it actually reported.” Kumar Br. 30 (emphasis in original, internal quotation marks omitted). Thus, the defendants argue that Bajaj’s calculation should have accounted for these higher earnings, which would have significantly—or completely—offset the earnings miss in the prior quarters.
We are not persuaded. Taken to its logical conclusion, the defendants’ argument would also compel the conclusion that CA’s investors did not suffer any loss due to the 35-day month practice, since under Fischel’s hypothesis, the false gains and the false losses should have effectively canceled each other out. Fischel himself undermined this conclusion during the Fatico hearing when he conceded that the 35-day month practice “obviously” had a “real negative monetary effect” on CA’s investors, not only by affecting CA’s “cash flow[ ],” but by injecting “speculation” into the market and harming investor confidence in CA’s management. Fatico Hr’g Tr. 416:13-14, 23, 419:8, 18. Accepting Fischel’s testimony would cast doubt on the entire basis for the Generally Accepted Accounting Principles rule that earnings earned in one quarter must be reported in the same quarter; if merely “shifting” earnings between quarters had no negative effect on investors, there would be no need for the rule in the first place. As Bajaj noted in his report, “[m]any firms that missed earnings in a given quarter could also have avoided announcing the miss if they could ‘borrow’ sufficient earnings from the next quarter to cover their shortfall.” Supplemental Report of Dr. Mukesh Bajaj, at 12, Oct. 9, 2006. Thus, the government properly characterizes Fischel’s analysis as “stretch[ing] credulity.” Gov’t Br. 53.
In addition, during the Fatico hearing, the government not only provided reasons why Fischel’s analysis was wrong, but also provided reasons why Bajaj’s analysis was sound. Specifically, the government showed that “re-booked” false earnings in one quarter could indeed have caused CA’s stock price to decline, by, inter alia, causing loss to investors who purchased CA
The defendants also claim that Bajaj’s loss calculation was erroneous because the “sample of earnings misses” he used in his study “involved firms that had experienced genuine adverse developments ... such that a stock price decline would be expected.” Kumar Br. 30. Thus, the defendants argue that the sample firms Bajaj used in his study were, not appropriate comparators to CA. Again, the defendants’ argument is unpersuasive. In estimating a loss calculation, a sentencing court should not analyze the impact of fraud in a vacuum, but instead should recognize that “[m]any factors may cause a decline in share price between the time of the fraud and the revelation of the fraud,” not all of which will be attributable to fraudulent activity. United States v. Rutkoske,
In this case, the district court properly focused on loss attributable to the defendants’ fraud. As previously established, the 35-day month practice did indeed cause a “genuine adverse development” to CA’s financial health. Moreover, Bajaj’s study took other causes for CA’s stock decline into account by comparing the earnings misses of CA to those of thirty other similarly situated companies, and “performing] a comprehensive regression analysis in an effort to isolate the event-specific impact of the given firm’s earnings-miss disclosure on its stock price, while controlling for market-wide or industry-wide factors.” Gov’t Br. 56. The district court was fully entitled to credit Bajaj’s assessment of the impact of external causes on CA’s stock and reject Fischel’s, particularly in light of Fischel’s inherently contradictory analysis.
Finally, in reviewing the district court’s loss calculation, we find it particularly telling that CA’s stock closed $5.85 below what would have been expected on October 10, 2003, two days after CA’s public disclosure of the 35-day month practice. Multiplying that undisputed figure by the 200.2 million affected shares would have brought the estimated loss to investors to more than $1 billion, alone. Even assuming that the losses of October 9 and 10, 2003 were tied, not to the actual operation of the fraudulent 35-day month practice, but to the “possibility of an- open-ended criminal and regulatory investigation that could ... [have] disastrous effects for the company,” Kumar Br. 37 (alteration in the original), financial loss caused by speculation that stems from the fraudulent practice and a loss of confidence in management is properly included in the loss calculation, see Ebbers,
V. Were The Defendants Properly Denied Acceptance Of Responsibility Credit?
Next, the defendants argue that, “[a]lthough [they] pleaded guilty to all the charges against [them],” the district court abused its discretion in denying them “any credit for acceptance of responsibility.” Kumar Br. 44 (emphasis in original); see Richards Br. 47-48.
A defendant is entitled to a two-point reduction under U.S.S.G. § 3E1.1(a) if he “clearly demonstrates acceptance of responsibility for his offense.” A defendant “who enters a guilty plea is not entitled to an adjustment under this section as a matter of right.” U.S.S.G. § 3E1.1, cmt. n.3. In particular, a defendant who engages in “[cjonduct resulting in an enhancement under § 3C1.1 (Obstructing or Impeding the Administration of Justice) ordinarily” would not be entitled to the reduction, as such conduct “indicates that the defendant has not accepted responsibility for his criminal conduct.” Id. at cmt. n.4. However, there may be “extraordinary cases” in which a defendant who obstructs justice in some way is also entitled to a reduction for acceptance of responsibility. Id.
A district court’s § 3E1.1 determination is entitled to “great deference” because the “sentencing judge is in a unique position to evaluate a defendant’s acceptance of responsibility.” Id. at cmt. n. 5. A district court’s decision to deny credit for acceptance of responsibility, primarily a factual determination, will be upheld unless it is “without foundation.” United States v. Harris,
A. Kumar’s Acceptance Of Responsibility
At sentencing, the district court denied Kumar’s request for an acceptance of responsibility reduction under § 3E1.1, concluding that Kumar had not sufficiently accepted responsibility for his criminal conduct because he had obstructed justice, and because he had waited until the eve of trial to plead guilty. In addition, the district court noted that (1) Kumar’s plea allocation was phrased to “mute[] the gravity of his complicity in the securities fraud offenses,” Sentencing Tr. 61:12-13, Nov. 2, 2006, and (2) Kumar’s meritless objections to the evidence-tampering and fraudulent transaction allegations in the PSR revealed a lack of acceptance of responsibility, Kumar Sentencing Tr. at 60:18-61:21.
On appeal, Kumar claims that the district court’s rejection of his acceptance of responsibility request was erroneous. First, Kumar claims that, although an acceptance of responsibility departure is generally unavailable when a defendant engages in obstructive behavior, that exception does not apply to him because his obstructive behavior occurred pre-indictment and the exception only applies to post-indictment obstructive behavior. See, e.g., United States v. Gregory,
We need not resolve either of these alleged flaws in the district court’s reasoning with respect to Kumar, however, because an examination of the record shows that he engaged in sufficient objectionable post-indictment conduct to justify a rejection of his request for acceptance of responsibility credit. Specifically, Kumar, individually and separately from Richards, acted in ways that the district court reasonably found to be inconsistent with a full acceptance of responsibility. For example, the district court found that “Kumar’s carefully worded plea allocution ... muted the gravity of his complicity in the securities fraud offenses.... When asked if he thought that [his fraudulent conduct] ... would have affected a prudent investor’s decision to buy or sell his company’s stock, his response was: ‘I could see the possibility where it could.’ ” Kumar Sentencing Tr. 61:11-13, 17-21. Moreover, the district court found it particularly telling that Kumar objected to the PSR on various grounds related to evidence tampering and fraudulent transactions during his tenure at CA, but then withdrew those objections during the course of the Fatico hearing, implicitly acknowledging that his objections lacked merit. Indeed, notwithstanding Kumar’s withdrawal of his objection, the district court expressly found at sentencing that there was “clear[] and convincing[]” evidence that at least one of Kumar’s objections was meritless. Kumar Sentencing Tr. 61:9. See U.S.S.G. § 3E1.1, cmt. n.1(a) (“[A] defendant who falsely denies, or frivolously contests, relevant conduct that the court determines to be true has acted in a manner inconsistent with acceptance of responsibility.”).
Thus, Kumar’s post-indictment conduct provided a reasonable basis for rejecting his request for an acceptance of responsibility reduction.
B. Richards’s Acceptance Of Responsibility
While the district court set forth several reasons why Kumar did not deserve a sentencing reduction for acceptance of responsibility, in denying Richards’s same request, the court relied on a single factor: the lateness of Richards’s plea. According to the district court, “the most significant factor in the acceptance of responsibility scale is the factor of time limits.” Richards Sentencing Tr. 15:7-9. The district court concluded that, by pleading two weeks before trial, Richards had exceeded those “time limits,” and therefore, was not entitled to acceptance of responsibility credit. On this point, we disagree.
Timeliness of a defendant’s plea is an appropriate consideration in the acceptance of responsibility determination. U.S.S.G. § 3E1.1 cmt. n.1(h). However, while the two-level reduction provided for in § 3E1.1(a) is for demonstration of acceptance of responsibility, the Sentencing Guidelines specifically provide that timeliness of a plea is primarily relevant to the reduction of an additional point under § 3E1.1(b), ostensibly “for helping the authorities save resources.” United States v. Ortiz-Torres,
The Guidelines specifically provide a sanction for belated guilty pleas that fail adequately to save the resources of the Government and the Court. Defendants who plead at an early stage qualify for an additional one-level reduction that is correspondingly unavailable for belated pleas. That a defendant can earn an additional one-level reduction merely by notifying the authorities of his intention to plead early enough to permit the government to avoid preparing for trial strongly implies that defendants may qualify for the basic two-level adjustment for acceptance of responsibility without doing so.
Here, the lateness of Richards’s plea on its own was not a sufficient foundation for denying him any acceptance of responsibility credit. While under certain circumstances the lateness of a plea might indeed weigh against the defendant, those circumstances are not present in this case. For example, Richards’s plea came neither “after the [gjovernment ... concluded presenting its case, ... during the jury’s deliberations,” nor “on the morning of trial,” and the district court cited no “other [relevant] factors” that warranted a rejection of Richards’s request. Id. It is undisputed that Richards’s obstruction and culpability was “of a different order” than that of Kumar. Richards Sentencing Tr. 25:15-16. Unlike Kumar, Richards appeared to fully accept responsibility both prior to and during sentencing. See Richards Sentencing Tr. 12:14-16 (‘Your Honor, I fully accept responsibility for the actions that I have taken and regret those actions.”). Also unlike Kumar, who tampered with physical evidence, bribed witnesses, and lied repeatedly during the course of a federal investigation, Richards’s obstructive conduct consisted entirely of a single, albeit false, denial of knowledge of the 35-day month practice during an interview and subsequent testimony that predated his guilty plea by three years and was accounted for in the indictment. Indeed, denying Richards acceptance of responsibility solely due to his charged obstructive conduct would effectively raise the Guidelines level for such conduct by foreclosing the opportunity for acceptance of responsibility credit in obstruction cases.
Because “the paramount factor in determining eligibility for § 3E1.1 credit is whether the defendant truthfully admits the conduct comprising the offense or offenses of conviction,” and because Richards did so here “in a sufficiently timely manner so as to avoid a lengthy trial and avert the risk of an irrational verdict,” Teyer,
VI. Was Richards’s Sentence Substantively Unreasonable?
Finally, Richards contends that his non-Guidelines sentence of seven years’ imprisonment was unreasonably long, despite the PSR’s recommendation of a life sentence. However, because we vacate Richards’s sentence as procedurally unsound and remand the case for resentencing, there is no need to entertain his substantive reasonableness argument at this time. See Gall v. United States,
CONCLUSION
For the foregoing reasons, the district court’s judgment and sentence as to Kumar is AFFIRMED in all respects; the district court’s judgment as to Richards is AFFIRMED, but Richards’s sentence is VACATED and REMANDED to the district court for resentencing consistent with this opinion.
Notes
. Judge Sack dissents as to this portion of our opinion.
. According to Kumar, the 35-day month practice ended in October 2000, when "[CA's] New Business Model brought [it to] an end.” Kumar Br. 16. The government does not dispute that the 35-day month practice ended in October 2000, and the indictment cites no overt acts of securities fraud by either defendant after May 2000. Accordingly, the 1998 Guidelines Manual, which was effective between November 1, 1998, and November 1, 2000, was the version of the Manual in effect at the time the defendants' fraud offenses were completed.
. Individually, and unlike Richards, Kumar also objected to the PSR’s recitation of his offense conduct, insofar as it alleged that he had erased data from his computer and engaged in fraudulent transactions as CA’s CEO. On October 23, 2006, the district court held a separate Fatico hearing to consider Kumar’s individual objections. After two days of testimony, Kumar withdrew all of his individual objections to the PSR before the district court could rule on them (although he maintained objections that he held jointly with Richards and the government agreed to withdraw one contested allegation in the PSR).
. The district court also rejected a two-level enhancement for obstruction of justice, concluding that the defendants had “pl[ed] guilty to that crime in other counts and this enhancement is superfluous and may even be regarded as double counting.” See Kumar Sentencing Tr. 65:18-20, Nov. 2, 2006; see also Richards Sentencing.Tr. 16:8-13. It appears that the court erred in not adding two points for obstruction, see, e.g., United States v. Fiore,
. Section 1512(c) provides:
Whoever corruptly'—-
(1) alters, destroys, mutilates, or conceals a record, document, or other object, or attempts to do so, with the intent to impair the object's integrity or availability for use in an official proceeding; or
(2) otherwise obstructs, influences, or impedes any official proceeding, or attempts to do so,
shall be fined under this title or imprisoned not more than 20 years, or both.
.The government's brief repeatedly refers to "defendants’ " statutory argument, thus implying that both Kumar and Richards challenge their convictions for obstruction of justice. However, only Richards challenges his conviction on this basis.
. See, e.g., United States v. Maloney,
. Although " § 1503’s application typically begins after the commencement of formal judicial proceedings,” United States v. Novak, 217 F.3d 566, 572 (8th Cir.2000) (internal quotation marks and emphasis omitted), in this case, Richards concedes that, when he lied, he knew that "formal judicial proceedings” were not only possible or likely, but that the government intended to bring them. Such obstructive behavior during a federal investigation—whether that investigation is conducted by a grand jury, or by a federal agency like the SEC where there is also a "quite strong, perhaps inescapable” inference that the witness's statements “would be presented to [a] grand jury”—is covered by § 1503(a). See United States v. Triumph Capital Group, Inc.,
. The government may have charged Richards with violating § 1512(c)(2) instead of § 1503(a) due to its concern that a § 1503(a) charge would raise a “Masterpol issue.” See Gov’t Br. 22 n.8 (citing United States v. Masterpol,
. The relevant changes to the Guidelines occurred in 2001, 2002 and 2003. In November 2001, the Sentencing Commission (the "Commission”) revised the fraud guidelines to provide for "an increase based upon the 'loss' ” for most loss amounts. Kumar Br. 17 (quoting Thomas W. Hutchinson, Highlights of the 2001 Amendments, Federal Sentencing Guidelines Manual, 2001 edition, XII (West 2001 ed.)) (internal quotation marks omitted). In January of 2003, in response to the Sarbanes-Oxley Act, the Commission further expanded the loss table by adding two new categories—more than $200 million and more than $400 million—with the latter calling for a 30-level enhancement in sentence under the Guidelines. See U.S.S.G. § 2B1.1(b)(1) (Supp.2002). In January of 2003, the Commission also created enhancements for the number of victims, so that a six-level increase is now required for frauds involving 250 or more victims. See id. § 2B1.1(b)(2). At the same time, the Commission added a new four-level enhancement if the offense involved a violation of the securities laws and the defendant was an officer or director of a publicly traded company. See id. § 2B1.1(b)(13).
. Regardless of whether the 1998 or the 2005 Guidelines are applied to the defendants’ fraud offense, the grouping rules would require the sentencing court to impose "the highest offense level of the counts in the Group.” U.S.S.G. § 3D1.3(a). As the defendants recognize, the offense level attributed to the defendants’ fraud counts would be higher than that attributed to the obstruction count irrespective of the Guidelines version applied. Therefore, the government's assertion that the sentences do not violate the Ex Post Facto
. The district court found that the one-book rule did not raise an ex post facto issue in this case, based on its conclusion that, after United States v. Booker,
. In its recent opinion in United States v. Anderson,
. Nor did this circuit’s ruling in United States v. Meeks resolve the issue currently before us.
. Contrary to Judge Sack’s contention, our ruling does not suggest that legislatures may avoid the restrictions of the Ex Post Facto clause by including in criminal laws some notice that the law "might change.” See Dissent at 648 (quoting Miller,
. Judge Sack attempts to distinguish the operation of recidivist statutes from the operation of the one-book rule by noting that recidivist statutes “impose a stiffer penalty for the latest crime," but he fails to acknowledge that the stiffer penalty is imposed only because the defendant committed earlier crimes. See Dissent at 649. Judge Sack also states that Congress could rewrite the one-book rule to reflect its concern with the gravity of the subsequent triggering offense and thereby satisfy his reading of the Ex Post Facto clause. Dissent at 649-50. As we previously noted, the motivation for enacting the one-book rule, whether to avoid disjointed sentences or to reflect a crime’s severity, is irrelevant to an ex post facto analysis of retroactivity. Contra Dissent at 649 (“[Tjhere is a crucial difference between the legislative branch deciding that a particular crime is more serious when committed by ... a person who has a specified level of past criminal behavior than someone who does not, and increasing a penalty for a completed crime 'triggered' by the commission of a subsequent one.”). That a revised one-book rule could satisfy Judge Sack’s standard while accomplishing precisely the same results, with only a superficial change to the rule’s current language, underscores the dissent's essential formalism.
. Judge Sack’s dissent relies in part on United States v. Meeks,
Nor does our decision today run counter to the Supreme Court’s dicta in Johnson, as Judge Sack implies. Dissent at 643-44 n. 8. The “serious constitutional questions” to which Johnson alludes did not relate to the Ex Post Facto clause, but to the prospect of criminal punishment for non-criminal conduct and problems of double jeopardy.
. Bajaj also submitted "two alternative scenarios" to the district court, calculating loss figures of "at least $3.1 billion” and "at least $3.5 billion.” Supplemental Report of Dr. Mukesh Bajaj, at 22-23, Oct. 9, 2006. The district court did not rely on these alternative figures in its loss calculation.
Concurrence Opinion
concurring in part and dissenting in part.
I join in the majority’s conclusions regarding the sufficiency of evidence for Richards’s conviction of obstruction of justice, the rejection of Richards’s coercion claim, the applicability of 18 U.S.C. § 1512(c) to Richards’s conduct, the district court’s loss calculation, and the defendants’ acceptance of responsibility. I disagree, however, with the majority’s conclusion that the defendants’ sentencing on securities and wire fraud charges on the basis of the “one book” of the Sentencing Guidelines in effect in 2005, long after those violations had been completed, does not violate the constitutional prohibition against ex post facto laws. The defendants’ commission of subsequent obstruction of justice offenses, though related to the underlying securities and wire fraud charges and committed at a time when the 2005 Guidelines would apply, does not, in my view, render those Guidelines applicable to the securities and wire fraud charges because at the time the defendants committed the securities and wire fraud offenses, they did not have “fair notice” of the severity of the penalties to which they might be subjected for them under the later, harsher Guidelines. To the extent that the majority conclude otherwise, I respectfully dissent.
Ex Post Facto Clause
The Ex Post Facto clause of Article I, Section 9, reads: “No Bill of Attainder or ex post facto Law shall be passed.”
Nearly two hundred years later, Chief Justice Rehnquist, writing for the Court, explained:
Early opinions of the Court portrayed [the enumeration by Justice Chase in Calder ] as an exclusive definition of ex post facto laws [citing three Nineteenth Century Supreme Court decisions]. So well accepted were these principles that the Court in Beazell v. Ohio,
“It is settled, by decisions of this Court so well known that their citation may be dispensed with, that any statute which punishes as a crime an act previously committed, which was innocent when done; which makes more burdensome the punishment for a crime, after its commission, or which deprives one charged with crime of any defense available according to law at the time when the act was committed, is prohibited as ex post facto.” Id., at 169-170 [46 S.Ct. 68 ].
See also Dobbert v. Florida,432 U.S. 282 , 292 [97 S.Ct. 2290 ,53 L.Ed.2d 344 ] (1977).
The Beazell formulation is faithful to our best knowledge of the original understanding of the Ex Post Facto Clause: Legislatures may not retroactively alter the definition of crimes or increase the punishment for criminal acts.
Collins v. Youngblood,
As we observed in somewhat different circumstances, “the ex post facto doctrine is concerned not just with notice, but with the inherent injustice associated with retroactivity itself.” Sash v. Zenk,
The “One-Book Rule”
Section 1B1.11 of the United States Sentencing Guidelines provides in pertinent part:
Use of Guidelines Manual in Effect on Date of Sentencing (Policy Statement)
(a) The court shall use the Guidelines Manual in effect on the date that the defendant is sentenced.
(b)(1) If the court determines that use of the Guidelines Manual in effect on the date that the defendant is sentenced would violate the ex post facto clause of the United States Constitution, the court shall use the Guidelines Manual in effect on the date that the offense of conviction was committed.
(2) The Guidelines Manual in effect on a particular date shall be applied in its entirety....
(3) If the defendant is convicted of two offenses, the first committed before, and the second after, a revised edition of the Guidelines Manual became effective, the revised edition of the Guidelines Manual is to be applied to both offenses.
The notion that only one set of Guidelines should be applied in imposing a single sentence, even where that sentence covers multiple crimes the commission of which straddles the effective dates of two sets of Guidelines, appears to derive from the principle that each set of Guidelines is meant to act as a “cohesive whole.” United States v. Bailey,
Consistent with that principle, Application Note 2 to Section IB 1.11 provides, in relevant part, that
the approach set forth in subsection (b)(3) should be followed regardless of whether the offenses of conviction are the type in which the conduct is grouped under § 3D1.2(d). The ex post facto clause does not distinguish between groupable and nongroupable offenses, and unless that clause would be violated, Congress’ directive to apply the sentencing guidelines in effect at the time of sentencing must be followed.
U.S.S.G. § 1B1.11 App. Note 2.
Relevant Facts
The facts relevant to the ex post facto issue before us are relatively simple and straightforward.
The defendants engaged in securities and wire fraud, and conspired to commit such fraud. The last overt act of the conspiracy was committed in May of 2000, and the fraud itself—the use of a so-called “35-day accounting month”—ended no later than October 2000. At the time the defendants committed these crimes, the November 1, 1998, edition of the Guidelines was in effect.
Between 2001 and 2003, the Guidelines were revised so as to increase the punishment for crimes of the sort that the defendants had previously committed. The revisions resulted in an increase in the offense levels applicable to those crimes
Under the Guidelines in effect at the time of the defendants’ commission of the fraud and conspiracy crimes, the applicable offense level was 30, which translated into a Guidelines range of 97 to 121 months’ imprisonment. As a result of the subsequent revisions, the offense level was raised to 50, resulting in' a recommended sentence of life imprisonment. See Maj. Op. at 625.
Beginning in September 2002 and continuing until April 2004, the defendants engaged in various acts designed to cover up their previously committed conspiracy and fraud. In a 2005 superseding indictment—the original indictment had been handed down in 2004—the defendants were charged with committing fraud and conspiracy to commit fraud over a period of time ending in 2000.
Relying on the one-book rule, the district court sentenced the defendants on all of the charges.to which they pled guilty under the 2005 Guidelines. The court decided that no ex post facto issue was presented by the fact that this version of the Guidelines was not in effect at the time the defendants committed the fraud and conspiracy crimes; it therefore did not apply the exception set forth in subsection (b)(1) that instructs a court not to apply the Guidelines manual in effect on the date of sentencing if so doing would violate the Ex Post Facto clause. Using the 2005 Guidelines, the district court sentenced each defendant to what would appear to be (depending on the actual longevity of each defendant) well below his Guidelines-indicated life sentence: Kumar to 144 months’ incarceration, followed by three years of supervised release; Richards to 84 months’ incarceration, followed by three years of supervised release.
The Majority Opinion
There is an inherent tension between the one-book rule and the Ex Post Facto
The majority and I begin on common ground. We first assume that the ex post facto doctrine applies to the Sentencing Guidelines after the Supreme Court decided, in United States v. Booker,
Where I depart from the majority’s view is on the question of retroactivity. The majority recognize that
“central to the ex post facto prohibition is a concern for ‘the lack of fair notice and governmental restraint when the legislature increases punishment beyond what was prescribed when the crime was consummated.’ ” Miller,482 U.S. at 430 ,107 S.Ct. 2446 (quoting Weaver v. Graham,450 U.S. 24 , 30,101 S.Ct. 960 ,67 L.Ed.2d 17 (1981)). The existence of*643 an ex post facto violation [thus] turns on whether an individual was deprived of fair notice....
Id. at 628. They find sufficient notice to the defendants by concluding that
the adoption of the one-book rule prior to the commission of the defendants’ obstruction offense had placed them on notice of the consequences of committing that second offense. That the consequences of the second offense included the application of the post-amendment Guidelines to all offenses considered at the defendants sentencing was fully apparent prior to the commission of the crimes that triggered those consequences.
Id. (emphasis added).
But it seems to me that the notice that the defendants received here was notice as to punishment for the wrong crime: not as to the fraud and conspiracy crimes for which punishment was revised markedly upward, but the subsequent obstruction offenses for which the Guidelines have not changed. This notice was inconsequential because the defendants were not subjected to an increased sentence for obstruction; they were subjected to an increased sentence for already completed frauds. And I think that the majority give insufficient attention to the quality of notice that ex post facto jurisprudence requires. It is not notice simpliciter, but notice that is “fair.” As the Supreme Court said in Miller, “The constitutional prohibition against ex post facto laws cannot be avoided merely by adding to a law notice that it might be changed;” in that case the Court found an ex post facto violation because the defendant was not aware of the prescribed range of punishment for his offense at the time he committed it. Miller
What we said in the related context of the change of rules regarding supervised release bears repeating here:
We are unpersuaded by the government’s argument that the Ex Post Facto Clause is not implicated so long as the penalty for a supervised-release violation is enhanced before the defendant engages in his supervised-release-violative conduct because the violator then has notice and fair warning that that conduct will result in the enhanced penalty. While it is true that a defendant would have notice of that enhancement before he committed his violation of supervised release, it is equally true that he would have had no such notice before he committed the original offense. Indeed, the enhanced punishment of supervised-release revocation simply would not be applicable to him had he not committed his original offense and been sentenced, for that offense, to supervised release. Thus, the government’s notice argument is not helpful to resolving the issue presented by this appeal.
United States v. Meeks,
Six of our sister circuits that have addressed this issue have limited their conclusion of constitutionality either to cases that involve a continuing course of conduct or to cases in which the offenses are sufficiently similar to be subject to “grouping” under the Guidelines. See United States v. Duane,
Two other circuits have found the one-book rule to be constitutional even in cases not involving continuing courses of conduct or grouped offenses. These circuits only reached a conclusion of constitutionality, however, in cases that involved repeated commission of the same offense before and after the revision of the Guidelines. See United States v. Lewis,
The two remaining circuits that have addressed this issue
So, it seems, we now stand alone: The panel concludes that any offense that has been committed by a defendant after a revision of the Guidelines may be used as a basis to apply the revised Guidelines to crimes committed before the revision so long as the pre- and post-revision crimes are prosecuted together but irrespective of the relationship, if any, between them.
The majority seek to find in the one-book rule a form of constructive notice to defendants as to the consequences of their crimes because they knew at the time they committed any successive crime that the sentence for all prior completed crimes indicted together with the successor crime would be increased as a consequence of that successive crime. But the Ex Post Facto clause requires not only notice, but also that the notice be “fair.”
I agree with the sentiments of Judge Kelly, of the Tenth Circuit, dissenting under somewhat similar circumstances: “[T]he only notice ... providefd to the defendants] at the time of commission of the ... pre-amendment offenses is that the sentence could be determined in accordance with guideline provisions that may or may not be amended. Even if the notice is sufficient to inform a defendant that the last offense could determine the sentence, only a defendant with the prescience of a clairvoyant could anticipate an actual sentence based upon a yet-to-be amended guideline.” United States v. Sullivan, 255 F.3d 1256, 1266 (10th Cir.2001) (Kelly, J., dissenting).
Grouping
The majority and I agree that grouping is not determinative of whether the sentences here comport with the Due Process Clause. We reach this conclusion for dif
First, there is considerable support for the argument that when offenses are grouped for sentencing purposes because “the behavior is ongoing or continuous in nature and the offense guideline is written to cover such behavior,” U.S.S.G. § 3D1.2(d), ex post facto concerns are met. According to the Eighth Circuit, for example, “it has been held that applying the Sentencing Guidelines to a conspiracy that straddles the Sentencing Guidelines’ effective date is not violative of the ex post facto clause. [Courts have] noted that with conspiracy and other• continuing offenses it is the completion date of the offense that controls the version of the Sentencing Guidelines to be applied.” Cooper,
This is precisely the argument the government makes here, contending that the obstruction offenses are part of a “continuing course of conduct” with the fraud and conspiracy offenses. Appellee’s Br. at 49. While I do not think this argument persuasive in this particular case,
But the majority appear to view the impact of grouping in a second fashion instead, one that has indeed been endorsed by several of our sister circuits. It was expressed explicitly by the Seventh Circuit in Vivit: “[T]he adoption of the one-book rule and the grouping rules put[s] criminals on notice that ‘the version of the sentencing guidelines in effect at the time he committed the last series of grouped offences will apply to the entire group.’ ” Vivit,
The majority base their unique holding on the one-book rule rather than the grouping theory described here, but the two analyses bear similarities: The one-book rale as applied here is constitutional because the Guidelines provide notice that the law is subject to change. Even if they do not provide notice of what that change will be at the time an act is committed, they provide such notice before a subsequent act. Whether this analysis is conducted under the grouping rules or the one-book rale seems largely beside the point to me. In either event it permits notice that is insufficient under the observation in Miller that “[t]he constitutional prohibition against ex post facto laws cannot be avoided merely by adding to a law notice that it might be changed.” Miller,
This sort of compound, abstract notice hardly seems to me to be “fair” notice at the time the fraud and conspiracy crimes were committed of what punishment the defendants might receive if they misbehaved in that manner—giving notice only that if they did what they did, and later committed another (potentially “groupable”) crime, their sentence could be incx-eased by some unknown amount. I am reminded again of Judge Kelly’s reference to the “defendant with the prescience of a clairvoyant [who alone] could anticipate an actual sentence based upon a yet-to-be amended guideline.” Sullivan,
Recidivism Cases
The majority reason by analogy to decisions, including those of the Supreme Coux’t, upholding recidivism statutes— those that punish crimes committed by a person with a specified level of criminal record more harshly than those committed by a person without such a record. “The one-book rule,” the majority say, “when it leads to a higher sentencing range than would be applied to a single offense, operates in a manner similar to that of the recidivist statutes and ‘three strikes’ laws upheld by the Supreme Court and our sister circuits in the past.” Maj. Op. at 629. They cite Gryger v. Burke,
The majority then assert that “[t]he fact that the impetus for enacting the recidivist statutes was to reflect the greater culpability associated with the latter offenses, whereas the impetus for the enactment of
I think, to the contrary, that there is a crucial difference between the legislative branch deciding that a particular crime is more serious when committed by—and that the public is in need of more protection from-—a person who has a specified level of past criminal behavior than someone who does not, and increasing a penalty for a completed crime “triggered” by the commission of a subsequent one—indeed, irrespective, in the majority’s view, of whether there is a connection between those crimes committed before the change and those committed afterward. Justice Jackson, writing for the Court in Gryger, put it thus:
Nor do we think the fact that one of the convictions that entered into the calculations by which petitioner became a fourth offender occurred before the Act was passed, makes the Act invalidly retroactive or subjects the petitioner to double jeopardy. The sentence as a fourth offender or habitual criminal is not to be viewed as either a new jeopardy or additional penalty for the earlier crimes. It is a stiffened penalty for the latest crime, which is considered to be an aggravated offense because a repetitive one.
Gryger,
The later crime may, as the majority say, “trigger” the change in the sentence for the earlier crimes, but what it triggers is what the Gryger court said was improper: an “additional penalty for the[ir] earlier crimes.” Whatever the trigger, the revisions increased the offense levels applicable to the earlier fraud and conspiracy crimes, not the later obstruction of justice offenses. The revisions added an increase based upon the amount of money lost by the victims of the fraud and conspiracy crimes; they expanded the loss table for the fraud and conspiracy offenses, not the obstruction of justice offenses, by adding new categories for losses of $200 and $400 million; and they created a new 6-level enhancement for fraud, not obstruction of justice, involving 250 or more victims; and added a 4-level enhancement for violations of securities laws, not the obstruction of justice laws, by defendants who were officers or directors of public companies. See U.S.S.G. § 2b1.1(b)(2) & (b)(13); cf. Cooper,
As a “practical” matter, to be sure, Congress, or perhaps the Sentencing Commission, might have—and may still—adopt a permissible recidivism statute to cover a circumstance very much like the present one: A person who commits an obstruction of justice in order to cover up a fraud in which the losses inflicted by the fraud are $ X will receive a Y level increase in offense level. It does not follow, “logically” or otherwise, that reaching a similar result by the present method—by retroactively increasing the punishment for fraud—is constitutional. The hypothetical law would provide punishment for behavior of which the potential violator would be fully and fairly warned before engaging in that behavior. It would reflect the perceived seriousness of future obstruction offenses, publically disseminated before any such offense is committed, and not an attempt to re-punish completed past acts. To increase the punishment for fraud and conspiracy after they are completed provides no “fair notice” and evokes “the inherent injustice associated with retroactivity itself.” Sash,
CONCLUSION
We have been instructed for more than 200 years that “a law that changes the punishment, and inflicts a greater punishment, than the law annexed to the crime, when committed” violates the Ex Post Facto clause. Calder,
Again, I have no reason to doubt that the Guidelines Commission may promulgate obstruction of justice guidelines that take into account the gravity, as it then views the gravity to be in the context of the crime for which punishment is being evaded, so as prospectively to prescribe harsher sanctions for the obstruction. But then it must prescribe those sanctions to the obstruction itself and not to crimes that are over. I think that to be a violation of the Ex Post Facto clause.
For the foregoing reasons and to the extent indicated, I respectfully dissent.
. Section 10, which applies to the States as opposed to Congress, contains a similar prohibition against ''pass[ing] any Bill of Attainder [or] ex post facto Law....” U.S. Const. Art. I, § 10, cl. 1.
. Justice Chase's complete enumeration of prohibited ex post facto laws reads:
1st. Every law that makes an action, done before the passing of the law, and which was innocent when done, criminal; and punishes such action. 2nd. Every law that aggravates a cnme, or makes it greater than it was, when committed. 3rd. Every law that changes the punishment, and inflicts a greater punishment, than the law annexed to the crime, when committed. 4th. Every law that alters the legal rules of evidence, and receives less, or different, testimony, than the law required at the time of the commission of the offence, in order to convict the offender.
Id. (emphasis in original). The continued viability of the fourth category, at least with the breadth suggested by Justice Chase, is in doubt, see Collins v. Youngblood,
. The Supreme Court has consistently and repeatedly held that a law that increases the punishment of a crime after the completion of the offending act violates the Ex Post Facto clause. See, e.g., Garner v. Jones,
. We continued:
For this reason, the Supreme Court has associated the ex post facto doctrine with the Fifth Amendment's Takings Clause, which "prevents the Legislature ... from depriving private persons of vested property rights except for a 'public use’ and upon payment of 'just compensation,’ " and with the “prohibitions on 'Bills of Attainder' in Art. I, §§ 9-10, [which] prohibit legislatures from singling out disfavored persons and meting out summary punishment for past conduct.” Landgraf v. USI Film Prods.,511 U.S. 244 , 266,114 S.Ct. 1483 , 128 L.Ed.2d*640 229 (1994). Ex post facto is as much a doctrine of retroactivity as it is a doctrine of notice.
Id. at 64-65.
. The indictment purports to charge the frauds as occurring "[o]n or about and between April 1, 1998 and April 6, 2004, both dates being approximate and inclusive,” but alleges no overt act after May of 2000 and itself describes “The Scheme to Defraud” as occurring "[p]rior to and during CA's fiscal year 2000, which ended March 31, 2000.” On appeal, the government does not dispute that the frauds were completed before the revision of the Guidelines in 2001 and 2002 and the subsequent increases in the penalties for securities and wire fraud. See, e.g., Appellees’ Br. at 46 (“This case involves the application of a Guidelines manual to two sets of crimes, one occurring before, and one after, a revision of the Guidelines.”).
. We all assume for present purposes that the Guidelines were promulgated by a "legislature.” Cf. footnote 7, infra.
. We have not yet explicitly decided whether the now-advisory Guidelines can implicate the Ex Post Facto clause, although we implicitly assumed this to be the case in United States v. Kilkenny,
. Although Meeks was subsequently abrogated by Johnson, it was not because the Supreme Court thought our logic on the present score unpersuasive. To the contrary, there are repeated suggestions in the dicta in Johnson that had the issue been properly presented to the Court, it would have ruled the same way this Court did in Meeks. But the government in Johnson specifically "disavow[ed]’’ the argument that it had made to, and had been endorsed by, the district court in Meeks, and that is made by the majority here: that there is no ex post facto violation because “revocation of supervised release imposes punishment for defendants’ new of
. The D.C. Circuit does not appear yet to have dealt with the situation with which we are faced here.
. The majority suggest that the Eighth Circuit has a similar rule based on that court's recent decision in United States v. Anderson,
. It is worth noting that the government repeatedly makes clear that it only argues that there is no ex post facto problem in this case because the crimes straddling the revision of the Guidelines are related. See, e.g., Appellee’s Br. at 45 (''[Bjecause the securities fraud and the obstruction constitute 'relevant conduct' vis-a-vis one another, application of the later Guidelines did not violate the Constitution.” (citation omitted)); id. at 47 (“The grouping rules, together with the one-book rule, put the defendant on notice ....”); id. at 48 ("[T]his Court recognizes obstruction after-the-facl to be 'relevant conduct' to prior fraud.”); id. at 50 (“Because these counts were properly grouped pursuant to § 3D1.2, the application of the 2005 Guidelines pursuant to § 1B1.11 did not violate the Ex Post Facto Clause.”).
.
Blackstone illustrates the second purpose of the Ex Post Facto Clause, providing fair warning, by looking to the policies of the Roman despot Caligula. See 1 William Blackstone, Commentaries on the Laws of England 46 (1765). Caligula had laws written in fine print and hung them high up on pillars so that they were not available to nor readable by the Roman citizens affected by such laws. Id. They provided no fair warning and so, like laws made ex post facto, they would not have provided citizens fair notice to refrain from the criminalized conduct.
United States v. Kilkenny,
. A similar argument, albeit a less convincing one, might be made to justify the use of a revised version of the Guidelines to sentence the repeated commission of the same crime committed both before and after the revision, as the Fourth Circuit did in Lewis and the Eighth Circuit did in Cooper. Such is not the case here. See Lewis,
. The argument that continuing offenses do not implicate ex post facto concerns might carry some day, but not this one. I do not think it proper to cast the abortive attempt to cover up the fraud and conspiracy several years later as a continuation of those crimes. They were complete when the defendants' fraudulent and conspiratorial activity ended. When the defendants engaged in fraud they likely hoped, even expected, to escape detection altogether. That they did not, and later engaged in obstruction of justice to try to avoid further exposure and thereby criminal prosecution, does not seem to me to be a part of the original criminal activity.
I think it significant in this respect that the obstruction and fraud/conspiracy offenses were grouped together under Section 3D 1.2(c), and not 3D 1.2(d). (The fraud and conspiracy offenses were in fact grouped with each other under Section 3D1.2(d), but these offenses were then grouped with the obstruction offenses under Section 3D 1.2(c)). These two sections govern different kinds of conduct and have distinct implications for ex post facto analysis. Grouping a continuing offense under Section 3D 1.2(d) may not cause ex post facto concern where crimes are grouped because "the behavior is ongoing or continuous in nature,” and therefore the crimes are arguably not completed until after the Guidelines are revised.
But there is no such implication of continuation under Section 3D 1.2(c), invoked here, which requires grouping "[w]hen 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.” U.S.S.G. § 3D1.2(c). That fraud and obstruction offenses share an offense characteristic or may lead to an adjustment to the sentence for one another has no bearing I can see on whether the fraud offenses can be understood as continuing through the time that the Guidelines were revised. In this case, as I have tried to explain, the fraud cannot be so understood. The fact that the two sets of crimes were grouped together under this section of the Guidelines has no implications with respect to the notice the defendants received of the consequences of their conduct committed before the Guidelines were revised.