F I L E D
United States Court of Appeals
Tenth Circuit
August 5, 2005
UNITED STATES COURT OF APPEALS
TENTH CIRCUIT PATRICK FISHER
Clerk
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v. No. 04-4037
(D.C. No. 2:02-CR-476-01-TC)
RICHARD TAYLOR BARLOW, (D. Utah)
Defendant-Appellant.
ORDER AND JUDGMENT *
Before SEYMOUR , LUCERO , and O’BRIEN , Circuit Judges.
Richard Barlow appeals his sentencing for mail fraud and tax evasion
arising from operation of a prime bank “Ponzi” scheme , and contends the
Supreme Court’s recent decision in Booker v. United States , 125 S.Ct. 738
(2005), requires his resentencing. In Booker , the Court held that sentences
exceeding the statutory maximum under a mandatory Guidelines regime must be
*
The case is unanimously ordered submitted without oral argument
pursuant to Fed. R. App. P. 34(a)(2) and 10th Cir. R. 34.1(G). This order and
judgment is not binding precedent, except under the doctrines of law of the case,
res judicata, and collateral estoppel. The court generally disfavors the citation of
orders and judgments; nevertheless, an order and judgment may be cited under the
terms and conditions of 10th Cir. R. 36.3.
based solely on facts admitted by a defendant or found by a jury under a “beyond
a reasonable doubt” standard. In this case, we must determine whether the district
court committed plain error when it enhanced Richard Barlow’s sentence by
engaging in judicial factfinding as mandated by the Guidelines. Because we
conclude that Barlow has satisfied all four prongs of the plain error test, we
REMAND to the district court for resentencing.
I
Barlow pled guilty to two counts of mail fraud in violation of 18 U.S.C.
§§ 1341 and 1342 and one count of tax evasion in violation of 26 U.S.C. § 7201.
In the pre-sentence report (“PSR”), the loss attributed to Barlow’s criminal
conduct exceeded $20 million, triggering a sixteen-level increase to his base
offense level of 6 for the fraud charge. The PSR recommended additional
adjustments to his offense level based on five additional factual findings, 1
resulting in an adjusted offense level of 34. At level 34, the applicable
1
The report concluded that, in addition to the sixteen level enhancement
for the loss amount, the following adjustments to his offense level were
warranted: (1) an additional two levels for obstruction of justice under U.S.S.G.
§ 3C.1.1 because Barlow had violated a federal district court restraining order; (2)
two levels under U.S.S.G. § 2F.1.1(b)(4) because Barlow had violated an
administrative consent order issued by the Utah Division of Securities; (3) four
levels under U.S.S.G. § 3B.1.1(a) as an organizer or leader of an extensive
criminal enterprise; (4) two levels because a substantial part of the fraudulent
scheme was conducted outside the United States or involved sophisticated means
under U.S.S.G. § 2F.1.1(b)(5); and (5) two levels under U.S.S.G. § 2F1.1(b)(2)
because the crime involved more than minimal planning or a scheme to defraud
more than one victim.
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Guidelines range was 151 to 188 months. Based solely on the facts admitted by
Barlow in his guilty plea, however, the adjusted Guidelines range for the fraud
would have been 10 to 16 months, with a total Guidelines range for all charges of
18-24 months. 2
The court adopted the PSR’s factual findings and sentenced
Barlow to 151 months’ imprisonment.
Barlow appealed and subsequently moved to file a supplemental brief
arguing that his sentence was invalid under Blakely v. Washington, 124 S.Ct.
2531 (2004). We granted that motion and will consider his argument in light of
the Supreme Court’s ruling in Booker, which applied Blakely to the Guidelines.
See United States v. Clifton , 406 F.3d 1173, 1175 n.1 (10th Cir. 2005) (“We must
apply the holdings in Blakely and Booker to all cases in which a defendant raised
an issue under either case.”).
II
Booker holds that when a district court, acting under the mandatory terms
2
Barlow contends on appeal that he should have been sentenced using an
offense level no higher than 15, based solely on his admissions. That offense
level is predicated on the loss amount from the one victim included in the charge
to which Barlow pled guilty, resulting in a Guidelines range no higher than 18-24
months. Barlow, recognizing that the guilty plea and colloquy did not include
admissions of the amount of loss to this one victim, argues that the appropriate
range “may well have been lower.” The offense level of 15 is based on a $82,000
loss to the one victim involved in his plea, using the loss figure contained in his
submission at sentencing. We, therefore, estimate that Barlow’s sentencing range
based solely on facts admitted in his guilty plea would be 18 to 24 months based
on a combined adjusted offense level of 15.
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of the Sentencing Reform Act, enhances a sentence based on facts it alone finds,
it violates a defendant’s Sixth Amendment right to have “[a]ny fact (other than a
prior conviction) which is necessary to support a sentence exceeding the
maximum authorized by the facts established by a plea of guilty or a jury verdict
. . . be admitted by the defendant or proved to a jury beyond a reasonable doubt.”
Booker, 125 S.Ct. at 756 (citing Apprendi v. New Jersey, 530 U.S. 466 (2000)).
A constitutional infirmity exists when a court relies upon judge-found facts, other
than the fact of prior convictions, to enhance a defendant’s sentence mandatorily.
United States v. Gonzalez-Huerta, 403 F.3d 727, 731 (10th Cir. 2005) (en banc).
Because Barlow did not raise the Blakely/Booker issue below, we will
evaluate his appeal using the plain-error standard, determining if there is (1)
error, (2) that is plain, and (3) that affects substantial rights. If all three
conditions are met, an appellate court may then exercise its discretion to notice a
forfeited error, but only if the error seriously affects the fairness, integrity, or
public reputation of judicial proceedings. United States v. Olano, 507 U.S. 725,
732-736 (1993); see Gonzalez-Huerta, 403 F.3d at 732. We conduct this analysis
“less rigidly when reviewing a potential constitutional error.” United States v.
James, 257 F.3d 1173, 1182 (10th Cir. 2001); United States v. Easter, 981 F.2d
1549, 1557 (10th Cir. 1992).
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A
In Gonzalez-Huerta we identified two types of Booker error. When a court
relies upon judge-found facts, other than those of prior convictions, to enhance a
defendant’s sentence mandatorily, a court commits constitutional Booker error. A
court commits non-constitutional Booker error when it applies the Guidelines in a
mandatory fashion even when the resulting sentence was calculated solely on
facts that were admitted by the defendant, found by the jury, or based upon the
fact of prior conviction. Gonzalez-Huerta, 403 F.3d at 731-32. To determine
which error is present in this case, we must determine whether Barlow admitted
the facts supporting the sentence.
During the sentencing hearing, Barlow’s counsel agreed that the potential
loss from the fraud exceeded $25 million dollars and conceded that the computed
adjusted Guidelines range was correct. In doing so, the government contends that
Barlow admitted all the facts upon which the judge relied to enhance his sentence.
We have already held in light of Booker, however, that it is constitutionally
impermissible to say that failure to object to a fact in a PSR is equivalent to an
admission for purposes of authorizing a sentence enhancement under a mandatory
Guidelines system: facts merely unobjected-to are not “admitted by the
defendant” or “found by a jury beyond a reasonable doubt.” Booker, 125 S. Ct. at
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756; see United States v. Bass, 411 F.3d 1198, 1204 n.7 (10th Cir. 2005). We
need not decide whether counsel’s concession of the amount of potential loss,
made under a preponderance-of-the-evidence standard and prior to the Blakely
decision, constitutes an admission by the defendant for Booker purposes sufficient
to avoid a Sixth Amendment violation, because the sentencing judge found other
facts by a preponderance of the evidence which were used to enhance Barlow’s
sentence. As a consequence, the district court committed constitutional Booker
error when it imposed a sentence at least 100 months longer than Barlow would
have received without these enhancements. 3 Moreover, this constitutional error
satisfies the second prong of plain error review, because the error is clear or
obvious at the time of the appeal. Johnson v. United States, 520 U.S. 461, 468
(1997). Therefore, the first two prongs of the plain error test are met. See
Gonzalez-Huerta, 403 F.3d at 732.
B
After proving that an error is plain, a defendant must show that it affects
his substantial rights. An error affects substantial rights when it is prejudicial; in
other words, it must have affected the outcome of the district court proceedings.
3
Taking solely the loss enhancement into account, the combined adjusted
offense level would have been 22, resulting in a Guideline range of 41-51 months,
compared to the 151-188 month range used by the district court after including
the five enhancements relevant to this appeal.
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See Olano, 507 U.S. at 734. One approach, recognized in United States v. Dazey,
403 F.3d 1147 (10th Cir. 2005), allows a defendant to establish prejudice either
by showing a reasonable probability that a jury, applying a reasonable doubt
standard, would not have found the same facts necessary to support the
enhancements, or by demonstrating that the district court would reasonably
impose a sentence outside the Guidelines range. Dazey, 403 F.3d at 1175.
Testifying at sentencing, Barlow contested the PSR’s four level
enhancements for violating two restraining orders, arguing he lacked knowledge
of either order. At the hearing both parties proceeded by proffer, differing as to
the correct amount of actual loss, restitution due, knowledge of the restraining
orders, and acceptance of responsibility, with Barlow asserting that the fraud
scheme actually did invest the funds received from the various investors in bona
fide investments, that the total amount of actual loss was far less than the
potential loss figure in the PSR because he returned over $14 million to investors,
and that the amount retained by the operators of the scheme was far lower than
that retained in other fraudulent schemes. Although the government presented
evidence to support the five enhancements, Barlow testified and continued to
deny many of the factual findings in the PSR during the sentencing hearing – a
circumstance that caused the sentencing court to reject his motion for downward
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departure for acceptance of responsibility. 4 Barlow’s testimony on his lack of
knowledge of the two restraining orders could have created a reasonable doubt in
the minds of a jury.
Thus, after reviewing these issues “less rigidly,” as we must, we conclude,
in light of these disputes and the existence of conflicting evidence in the record,
that there exists a reasonable probability that a jury would not have found the
material facts underlying the two enhancements involving the restraining orders
beyond a reasonable doubt.
Moreover, all of Barlow’s assertions as to the amount of actual loss, his
contention that bona fide investments were made, and the amount of money
retained are facts that the pre-Booker Guidelines considered irrelevant to the
determination of the mandatory Guidelines range. Barlow argued for a downward
departure based on his age, status as a good citizen and church member, aberrant
behavior and atypical crime. Although these mitigating factors might not have
justified a downward departure under a mandatory Guidelines regime, these facts,
conjoined with Barlow’s assertions that the actual loss was far less than asserted
by the government, reasonably may have influenced the district court in a purely
discretionary sentencing decision. See United States v. Ranum, 353 F.Supp. 2d
4
In fact, Barlow continued to deny any intent to defraud his investors. On
this basis, he sought to withdraw his guilty plea; the district court denied his
request.
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984, 985-86 (E.D. Wis. 2005) (concluding that factors formerly forbidden to be
considered under the Guidelines, such as a defendant’s age, family ties and
responsibilities, and physical, mental and emotional condition, may now be
considered, post-Booker, pursuant to § 3553(a)). The fact that the district court
sentenced Barlow at the bottom of the mandatory sentencing range adds to our
conclusion that the district court might reasonably impose a different sentence
under a discretionary regime. Under both approaches recognized in Dazey,
Barlow has established the requisite prejudice and effect on his substantial rights
to satisfy Olano’s third prong.
C
Our final step in the plain error analysis is determination whether the error
“seriously affects the fairness, integrity, or public reputation of judicial
proceedings,” such that we should exercise our discretion to correct it. Because
the district court’s plain error affected Barlow’s Sixth Amendment constitutional
rights, “the ‘plain error review burden’ imposed on [Barlow] is ‘less rigorous’
than it would otherwise be in a case involving non-constitutional error.” Bass,
411 F.3d at 1205 (citing Dazey, 403 F.3d at 1178). The district court’s fact-
finding on the two sentence enhancements increased Barlow’s offense level by 4
levels, thus increasing his sentencing range from 97-121 months to 151-188
months. This 30-month sentence disparity weighs heavily when viewed in
conjunction with the 100-month disparity between the sentence authorized by
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Barlow’s plea and admissions and the sentence imposed by the district court. 5
The district court made these findings despite Barlow’s testimony contesting the
underlying facts, and his attempt to present evidence that other factors not taken
into account by the Guidelines were present. See id. at 1205. We also consider
that the district court sentenced Barlow at the bottom of the applicable Guidelines
range. Id. On consideration of all of the circumstances, we conclude that this
plain error warrants remand for resentencing.
III
Barlow argues, and the government concedes, that the district court erred in
delegating the scheduling of restitution. Both 18 U.S.C. §§ 3664(f)(2) and (k),
and our decision in United States v. Overholt, 307 F.3d 1231 (10th Cir. 2002),
establish that the district court committed plain error in delegating the schedule
for payment of restitution to the Bureau of Prisons and, upon Barlow’s release
from prison, to the probation office. Therefore, upon remand, the district court
5
Although the error in this case involved a sentence that exceeded that
authorized by Barlow’s plea and admissions by 100 months, this component of the
fourth prong analysis considers only the 30-month sentence disparity that resulted
after our third prong analysis under the first Dazey approach. Nevertheless,
because we also conclude that Barlow’s substantial rights were affected under the
second approach recognized in Dazey, we view the 30-month sentence disparity
here as weighing more heavily in the fourth prong, and warranting resentencing
when combined with the other factors listed above.
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should set a schedule for payment of restitution. 6
IV
For the foregoing reasons, Barlow’s conviction is AFFIRMED, but we
REMAND to the district court with instructions to vacate Barlow’s sentence and
for further proceedings consistent with this opinion.
ENTERED FOR THE COURT
Carlos F. Lucero
Circuit Judge
6
Additionally, Barlow contends for the first time on appeal that the
magistrate never formally “accepted” his plea of guilty. A determination of
whether the magistrate “accepted” the guilty plea is fact-intensive and we may
exercise our discretion not to review the issue when the appellant’s failure to
raise the objection below prevented the district court from making necessary
findings of fact. Because Barlow’s failure to raise the issue prevented the district
court from inquiring into the facts, we decline to consider it. See United States v.
Dewitt , 946 F.2d 1497, 1502 (10th Cir. 1991); see also Easter , 981 F.2d at 1556
(“[P]lain error review is not appropriate when the alleged error involves the
resolution of factual disputes.”).
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