*2 Loon tip Chiarella, received from Don NYGAARD, Before BECKER and Circuit confidential informant. Chiarella related YOHN, Judges, Judge.* District him (King) told that he had the
stolen bonds.3 Chiarella said he informed King that he knew an individual Philadel- OPINION OF THE COURT phia purchase who would the bonds for 20 YOHN, Judge. District cents on the day, dollar. That same Ben Defendant-appellant King plead- Stuart, co-defendant, Robert L. Renfro delivered guilty ed pos- one count of denomination $1000 States Gov- United sessing bonds, savings savings ernment bonds to Chiarella at his Yohn, Jr., Honorable sentencing guidelines *The H. William effect at the time Judge States District Eastern District was sentenced. Pennsylvania, sitting by designation. Ultimately, bonds were recovered from 2. 1.Effective November 2B1.2 de- King. approximately whereabouts entirety leted in its and consolidated with remaining fifteen bonds was unknown at C, U.S.S.G.App. 2B1.1. See amendment sentencing. time of The enhancement for receiving "in the property” now (b)(5)(B). located U.S.S.G. §§ 1.1 2B 18 U.S.C. gained possession It is how unknown 3553(a)(4) 3553(b) application mandate bonds. There no evidence guideline responsible effect on the date of burglary sentenc- initial and theft of ing. Throughout opinion, (See this ("PSR”) unless Report otherwise the bonds. Presentence noted, we make to those reference sections of the ¶ 11.) FBI. At to the burglary dletown him advised place of business his court set sentencing hearing, the district then King. Chiarella had come adjusted the 14. It then Loon, level at base offense to Van the bonds turned pur- levels by two upward offense level among were determined *3 3Bl.l(c) conclu- upon the §to based suant burglary. Middletown in the leader, “organizer, King an was sion that 1992, 16, Loon and Van November On to sell of the scheme supervisor” manager, or Taylor, Gregory help.of Chiarella —with adjusted the base It also the stolen bonds. Dauphin Coun- agent with an undercover under four levels upward level play the role who would Force ty Drug Task upon a conclusion § based Philadelphia— from “source” of Chiarella’s in the person was “a King King- King. Chiarella trap for a set King property.” 18,1992, in the on November to meet agreed challenging both enhancements. appeals, now meeting King At this of a hotel. parking lot $4,000 for the 20 to receive II. to trans- and was already delivered been had possession in his remaining bonds fer the King’s appeal over jurisdiction We have them provide Chiarella, in turn would who judgment of sen the district court’s from Taylor. 3742(a) and 28 to 18 pursuant U.S.C. tence review of a § 1291. Our standard Stuart, U.S.C. Chiarella, King, 18th, On the adjust a defen decision district court’s vehicles, at the arrived separate driving all guidelines under offense level dant’s base at parked his car a lot. Stuart parking hotel and law of fact the mixture “depends on Taylor intro- the others. from distance determination.” necessary to that court’s “source” King as Chiarella’s duced 1061, 1064 Bierley, 922 F.2d v. States had re- individual who- Philadelphia —the omitted). Cir.1990) (citation (3d “Where previously delivered 20 bonds ceived the essentially factual an grounded on $4,000 decision is King Taylor paid to Chiarella. Stuart findings basis, court’s to the district we defer previously delivered the 20 bonds cash for if the only clear error [but] and reverse purchase negotiated issue should legal, the alleged error negotia- After these remaining bonds. de novo.” Id. Stuart, reviewed concluded,4 King signalled tions car, park- across walked his exited Stuart SBl.l(e) Enhance- Two-Point A. The car, King package a handed ing lot to ment later deter- that were containing 109 bonds Mid- in the those stolen among mined to be 3Bl.l(c) sentencing Séction return to his began to burglary, dletown two-point enhance for a guidelines provides way his as he made was arrested car. Stuart if level he offense ment of a defendant’s as he car, King was arrested to his leader, or su manager, organizer, an “was parking lot with 109 to leave attempted activity than any criminal pervisor Taylor $4,000 had and the stolen bonds participants more or involves five [that the conversa- recording made of A paid him. extensive].” was otherwise Taylor King and revealed tion between 3Bl.l(c). district Eng contends had anoth- Taylor that he informed had offense it increased his when court erred $1,000 to sell. er 3Bl.l(c) only did because not level under to sell the scheme 19, mastermind 1998.5 Chiarella January guilty on pleaded Chiarella, gov as a also because bonds but day of his May On in the participant agent, was not ernment deter- 76 bonds King surrendered hearing, have over could whom criminal offense in the Mid- those taken among to be mined January jury guilty by on was found 5. Stuart Taylor and According government, to the on price of cents purchase agreed upon a (Appellee’s remaining Br. bonds. dollar specific 6.) no mention PSR makes ¶ (PSR 7.) negotiations. substance exercised control. turning See U.S.S.G. remaining bonds in the comment, (n. 1) (“A person is not crimi- parking lot.... nally responsible for the commission of the (App. 16.) 3Bl.l(c) at N.T. Because pro- (e.g., offense an undercover law enforcement for a vides two-level enhancement if the de- officer) participant”). Whatever the fendant acted organizer as an either or lead- be, however, merits of contentions may these alternately er a manager or supervisor, completely ignores their focus on Chiarella will we sustain the district court’s decision to scrutiny the district court’s of the extent of increase offense level under sec- Stuart, control over his co-defendant. tion if there grounds were sufficient factual for the district court to (“PSR”), have Report Presentence whose in any *4 acted factual findings adopted, the district roles. See comment, (see 3B1.1, (not- § 34B), U.S.S.G. Appendix (“App.”) (backg’d.) states that ing arrest, 3Bl.l(c)). § shortly inclusiveness of after his investiga- Stuart told King tors that had recruited Stuart to assist The direction and control of others is a him in the stolen King bonds and that recurrent in legal theme definitions of the had directed to Stuart deliver the first batch “manager” See, terms “supervisor.” and e.g., ¶ (PSR 8.) of 20 bonds to Chiarella. More- (6th Dictionary 960, Black’s Law ed. over, Stuart, according King to it 1990).6 above, As noted the district court planned exchange the mechanics of the adopted findings the factual in the PSR that in parking bonds lot on November King recruited Stuart to assist him in the 1993, instructing him to hold the bonds and scheme bonds, to sell the stolen instructed to King only deliver them to after he had him to deliver the first batch of 20 bonds to signal King received a from a citizen later, Chiarella and then at the meeting on ¶ (PSR 9.) band radio. concluded PSR 18, 1992, November directed him to hold 109 King that “organizer/leader” an in the and King deliver them to only upon criminal offense recommended that he King’s signal. None of those factual deter- receive a offense enhance- level clearly Indeed, minations is King erroneous. 3Bl.l(c). (PSR pursuant § ment to U.S.S.G. seriously does contest validity.7 their ¶ 19.) Thus, did, if King contends, even Chiarella bonds, mastermind the scheme to sell the King’s sentencing At hearing the district way that in no from detracts the evidence specifically court did not state whether it King Stuart’s directed role in the agreed with the PSR’s characterization of scheme. “organizer/leader” as the of the scheme sell bonds or saw him as instead fact, specifically the district court found manager supervisor a or criminal ac- arranged that Chiarella dispos- the means of tivity. Rather, it was a ing the bonds but that set up both the “major player” in the scheme sell the delivery initial plan 20 bonds and the later bonds, noting that: turning for over 109 parking lot.
[Although] arranged Mr. Chiarella for a conclude We from evidence of disposing bonds, means of of these ... Mr. control over Stuart those two activities King set up operation the entire of first acted at least as manager a or testing by delivering por- the situation supervisor, a if perhaps not as an organizer or tion of setting up leader, them and then the rather in the to sell the scheme stolen bonds complex plan but rather detailed the district court’s conclusion was not "manager” Section 3B1.1 defines neither exchanges nor Stuart’s actions in the two of bonds “supervisor,” but does (See delineate list of a factors unchallenged. 13-14.) App. went at N.T. distinguishing that courts “[i]n should consider a Moreover, appeal, King directly in this never leadership organizational role one of specific findings addresses the factual of the PSR management supervision.” mere U.S.S.G. regard with to his control over Stuart than comment, (n. 4). to assert without elaboration that “Mr. equally culpable.” Mr. (Appellant’s Stuart were King’s sentencing hearing, government's 7. At 3.) Br. at King managed contention supervised (7th Cir.1990). sky, F.2d 468-69 Accordingly, will af- we
legally erroneous.
(5th
its conclusion instance, court’s deci In this the district property. selling stolen receiving of and sentence under King’s sion to enhance 5.)9 Consequently, Br. at (Appellant’s 2B1.2(b)(4)(A) large part in predicated was must four-point enhancement the argues that supra, that an upon holding Esquivel, in the district court could the vacated because be under that “in business” enhancement the he was properly have not require finding “a that a not does section business of engaged in the fencing engaged in previously has defendant (Id.) property. selling stolen 16.) App. at N.T. That {See activities.” Cyr, indeed sound. See St. principle addressed never before We have (declining, like the 702-03 court 2B1.2(b)(4)(A). 977 F.2d at guidelines themselves application of to limit the Esquivel, in meaning pivotal of the silent on the are professional to “so-called A courts of.” few the business phrase —“in fences”). Esquivel, in however, presented have, The facts offered circuit outside our however, present markedly those “in differ provision’s the some elucidation Therefore, although the in un ease. Seventh Circuit language. The business” findings upon the derlying factual which dis apply to does not section has held that the King that its was they trict based conclusion that have thieves who sell receiving selling stolen in business v. Braslaw- the personally stolen. 4.) (App. entirety by at N.T. [bonds] that he could deliver.” in its was deleted 8. Section 2B1.2 November that had turned effective it was discovered consolidation with When key FBI, essentially urged its government restated which then the 76 bonds to the terminology. accept that surrender of district court to alleged prom- earlier proxy King’s as a bonds delivery were the initial 9. The other transactions (App. at the future. to sell more bonds in ise exchange bonds in of 109 of 20 bonds and 5-6.) King's whether it was It is unclear N.T. might parking third transaction lot. the FBI on of 76 bonds to surrender actual day possibili- accurately termed the perhaps be more possibility 75 in the ty sell another bonds would Taylor might 75 sell another surrender of 76 fixture rather than a transaction in court characterized district gov- sentencing hearing, At FBI. in reaching was its conclusion meeting during in repre- ernment asserted property. receiving arrest, lot, prior had parking to his 75 Taylor that “he had an additional sented to clearly erroneous, property were not Cyr, supra, the First Circuit con did not warrant facts such a conclusion.10 trasted it Esquivel’s what termed “elaborate fencing operation” with the activities of the Esquivel, defendant stored 350 defendant in that case who had twice suc cases athletic shoes a warehouse cessfully and once unsuccessfully tried to re he leased and controlled. Esquivel, quantities turn small of stolen sweaters to á F.2d at 959. He sold the stolen shoes on retailer for cash Cyr, refunds. St. 977 F.2d consignment per pair, keeping per for $15 $5 There, at the court held that the pair paying for himself and the remainder to government “simply had produced one who had stolen the shoes quantum show, of evidence sufficient to supplied them to him. Id. He was standard, reasonable [defendant] assisted the resale of the stolen shoes engaged a business” and that “his delivery man whom he would by pag- contact trafficking casual in sweaters [was] insuffi provide er and regarding “information justify cient ... an enhancement under customer, date, quantity pur- 2B1.2(b)(4)(A).” (foot Id. poses making deliveries.” Id. In uphold- omitted). note analysis The same .holds true ing sentencing judge’s determination that simply case. There was enough fencing the defendant’s activities amounted justify evidence to the district court’s conclu business, ato the Fifth Circuit that: noted sion that engaged “in the business” Esquivel in acted manag- substance as the property. organized er anof enterprise commercial engaged in making multiple Indeed, sales from a as the Cyr noted, court in St. merchandise, stock of stolen employing an “regularity of conduct is one universal thread electronic system communications place in virtually legal all definitions of business.” *6 orders with his allocating assistant and Cyr, St. F.2d (citing at 703-04 cases income in consignment where, accordance with a contexts, in various “courts have in plan- [Moreover,] isolated, [t]he 'shoes were sisted casual, that more than or sold out of a central storage sporadic location activity be shown a before business multiple exist”) (footnote were distributed to omitted). is customers. found to One example Cyr noted involved U.S.S.G. Id. at 960. governs 2T1.4 which convicted of Here, contrast, by King’s all of transac aiding, assisting, procuring, counseling, or purchaser. Moreover, tions involved a single advising tax Currently, fraud. his sale of the stolen bonds involved nowhere 2T1.4(b)(l)(B) mandates a of sophistication near the level of present fense level enhancement for “in defendants Esquivel’s fencing operation Esquiv- —unlike the of preparing assisting or in the el, he never a storage utilized central loca preparation of tax returns.” The commen tion, employed never an electronic communi tary §to 2T1.4 states that this enhancement system place cations to orders with an assis applies “persons to regularly prepare who or tant, and never according allocated income preparation assist the of tax returns for consignment plan. Furthermore, a King’s comment, profit.” 2T1.4, (n. 2).11 U.S.S.G. of stolen property sales were re even motely repetitive Esquivel’s most, as as background The commentary note —at successfully he completed two sales and to former explains 2B1.2 that the enhance- possibility broached of one sale. future ment for persons property who receive stolen noted, previously supra 10. As see discrepancy n. it is un- between the of number bonds sur- clear whether the district by King (76) characterized rendered sentencing to the FBI at King’s third transaction with the Taylor and the number he told that stolen he could (75) the actual possibly surrender of 76 bonds to the on FBI sell is likewise immaterial to our day sentencing of possibility or the he conclusion. might event, Taylor. sell another 75 bonds to however, our determination that the guidelines,, district court 11. Other sections uti- improperly lize offering any “in the term "business" without receiving selling business” of property meaning. stolen Cyr, illumination of its See St. would same under either (citing F.2d at 704 examples). version. n. 4 Nonetheless, opinion. ty’s amount of well-articulated because “the justified is for resale majority’s test underrepresent disagree likely I because property is criminality extent to and the their a receiver scope determining of whether for other encourage or facilitate they of goods is “in the business comment, crimes.” dis- respectfully I property,” stolen however, case, there (backg’d.). sent. a conclu- upon which no evidence sentencing scheme envi- our irregular suggest and occasional I sion crim- scope his of than that underrepresented considerably simpler test sales sions a encouraged to which inality extent Basically, or the majority. two employed two He made crimes. facilitated re- prosecuted are types of defendants bonds and stolen single lot of from a sales acquire goods: who ceiving stolen sale —all of a third possibility mentioned use, own for their merchandise “hot” His sales were purchaser. to the same others. The do so for resale those who of a an indication there repetitive, nor was (1992) § 2B1.2 commentary to U.S.S.G. than this selling anything other pattern of states: evidence quantum of of bonds. one lot property court at receive stolen Persons who the district before three isolated incidents hearing be- enhancement a sentence resale receive —two single lot —did selling stolen likely to the amount cause “in King was conclusion not warrant of their criminal- scope underrepresent receiving and stolen the business” encourage they to which ity the extent property.12 added). (emphasis other crimes or facilitate analysis, con- foregoing we In view tele- Thus, person acquires under enhancement clude culpable is less his own use vision set for being “in the business at a acquires one to sell person who than the property” consti- selling stolen encourages ad- professional A fence profit. Accordingly, sen- legal error. tuted others, their who know ditional thefts without it. recalculated must be tence market. This booty ready has a III. fence’s length [the] regardless of “the true *7 Esquivel, 919 v. resume.” offense level enhancement The Cir.1990). 3Bl.l(c) (5th will to U.S.S.G. F.2d pursuant imposed However, district the because affirmed. be then, mind, be sim- my the test should To guideline the en- incorrectly applied acquire the stolen ple: the defendant did “in the business hancement for so, them? If to resell goods with the intent property,” we selling stolen Intent, applies. enhancement the four-level to the judgment and remand vacate will the sale, focus of the must the actual be an proceedings consis- further court for district here, cases, a sale test, many in although opinion. tent with this intent. evidence of provide overwhelming will concurring Judge, NYGAARD, contexts, readily Circuit infer- intent will dissenting: ease. of the the circumstances able act of apprehended in the King was majority what the most of agree I with obviously not I-II(A) majori- the were stolen join parts says I already in a result reading dissent's resold that the 12. We also believe way § struc- 2B1.2 is of four. The base level the fact 2B1.2 overlooks tured, something else in order involving then do he must of four for offense level sets a base case, In this Transferring, the enhancement. Transporting, Trans- receive something "Receiving, is in the "busi- must be else Possessing Property." The Stolen mitting, or property. reselling section, ness” particularly the reference title of contrast, requires by interpretation, The dissent’s "Transferring,” that the indicates resale else, reading phrase essentially "in nothing setting already contemplated in goods is guidelines right of” out of level, respect to certain at least offense Thus, many cases. a defendant the mere fact that defendants. use; hence, obtained for his I would equipment own stolen stereo from the back of a enhanced, affirm the sentence of the van, district court. yet avoid an I sentence. adopt would not such a rule. court, applying The district the “in the enhancement, largely business” relied on Es- sum, I believe whether one is “in the quivel. majority distinguishes that case simple intent, business” is a matter of ground fencing on the that the scheme because it manifestly clear that ac- considerably more elaborate than in this quired resale, these I would affirm case. I am Although not convinced. I be- judgment district court’s of sentence. monetary lieve that the goods value of the Hence, respectfully I dissent. fenced is purposes applying irrelevant for enhancement, “in the business” I note that the goods value of the stolen here was $220,000
approximately and close to value
of the 350 cases of athletic shoes at issue
Esquivel. Esquivel, King Like also an had working
“assistant” fencing for him in the
operation.
Indeed, most of the distinctions
majority
relied on
between the two
SURIN, Appellant,
Gabriel ST.
spring
cases
more from the differences be-
goods
tween the
themselves and the different
v.
ways they
disposed
had to be
of. Stolen
NEWS,
VIRGIN
INC.;
ISLANDS DAILY
savings bonds and stolen sneakers are differ-
Printery,
Inc.,
Brodhurst
d/b/a
ent —the
might
former
be saleable
in.two
Croix Avis.
three transactions
requires
while
latter
consignment scheme with central storage and
No. 93-7553.
electronic communications —but this
does
King any
culpable
make
United
Esquivel.
Appeals,
less
than
States Court of
Third Circuit.
majority
heavily
instead relies
on
(1st
Cyr,
States
v. St.
ease-by-case scheme, basis. Under this important
most factor is regularity fencing operation,
defendant’s its followed
sophistication. Following Id. at 703.
reasoning Cyr, *8 of St. a sentencing may
apply the enhancement if the defendant has
regularly been engaged professional as a
fence; that, failing the enhancement still applied, even
be past without evidence of
fencing activity, if sufficiently the scheme is
complex. Id. at 704.
I think that Cyr simply wrong. is Un- needlessly its complicated
der unpredict- test, (or worse,
able first-time fence
skilled, experienced appre- fence who is time)
hended for the first given cannot be
“in the business” enhancement unless
fencing operation unusually complex. I
think that test, Following nonsense. this
person might caught red-handed