IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 98-10396
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
ALLEN LANDERMAN,
Defendant-Appellant.
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Appeal from the United States District Court
for the Northern District of Texas
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February 12, 1999
Before KING, Chief Judge, and POLITZ and BENAVIDES, Circuit
Judges.
BENAVIDES, Circuit Judge:
Allen Landerman appeals the sentence imposed after he
pleaded guilty under 18 U.S.C. § 371 to one count of conspiracy
to commit mail fraud, wire fraud, and money laundering. We affirm
in part and dismiss the appeal in part.
Landerman participated in a scheme that established
companies to market oil and gas drilling projects and to solicit
investors. Acting as attorney for marketing companies established
as part of the scheme, Landerman misled salesmen and investors,
drafted intentionally misleading documents, served as a reference
to encourage investments in the scheme, drafted promissory notes
to conceal the conspirators’ actual use of invested funds, and
helped design a shell holding company to hide other transactions
within the scheme. Landerman also worked to establish Exciting
Tans, a business providing sexually oriented services to reward
salesmen and other employees of the scheme. Landerman laundered
checks for $15,000 and $8,000 through his attorney trust account
to cover Exciting Tans start-up expenses, despite his knowledge
that the funds in fact were oil drilling investments. The scheme
raised approximately $6.4 million while Landerman was involved,
resulting in a net loss to investors of approximately $6.1
million.
A jury convicted Landerman of two counts of money laundering
and one count of conspiracy to commit mail fraud, wire fraud, and
money laundering. This Court overturned Landerman’s conviction
and remanded for further proceedings. See United States v.
Landerman, 109 F.3d 1053, as modified, 116 F.3d 119 (5th Cir.
1997). Following remand, Landerman entered into a plea agreement
and pleaded guilty to conspiracy. The district court accepted his
plea and granted the government’s motion to dismiss the other
charges. Acting pursuant to the United States Sentencing
Guidelines, the district court sentenced Landerman to sixty
months in prison and three years of supervised released and
ordered Landerman to pay a $10,000 fine.
Landerman raises three issues on appeal. First, he argues
that the district court erred when it sentenced him under the
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money laundering guideline by considering the total amount lost
to the fraudulent scheme, instead of just the amount that he
himself laundered. Second, Landerman argues that the district
court abused its discretion when it denied his request for a
downward departure from the sentence set by the guidelines.
Third, Landerman argues that the district court erred in imposing
the $10,000 fine. We uphold the sentence.
A
We review the district court’s application of the Sentencing
Guidelines de novo and its findings on the value of funds used to
determine the sentence for clear error. See United States v.
Dupre, 117 F.3d 810, 825 (5th Cir. 1997), cert. denied, 118 S.
Ct. 857 (1998). We uphold the sentence as long as it results from
a correct application of the guidelines to factual findings that
are not clearly erroneous. See United States v. Sarasti, 869 F.2d
805, 806 (5th Cir. 1989).
Landerman argues that the district court erred in grouping
together, for sentencing purposes, the fraud and money laundering
offenses that underlay his conspiracy conviction. A defendant
convicted of a conspiracy to commit more than one offense is
treated as if he had been convicted on a separate count of
conspiracy for each underlying crime. See U.S. Sentencing
Guidelines Manual § 1B1.2(d). The guideline applicable to a
conspiracy count is § 2X1.1, which directs the court to sentence
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conspirators according to whichever guidelines would apply to
their underlying substantive offenses--in this case, § 2F1.1,
which is the fraud guideline, and § 2S1.1, which is the money
laundering guideline. The district court, according to Landerman,
acted pursuant to § 3D1.2(d)1 and grouped together the fraud and
money laundering offenses in order to consider the aggregated
$6.1 million as the harm of a single offense. From there,
according to Landerman’s analysis, the district court, pursuant
to § 3D1.3(b), applied the relevant guideline that produced the
highest offense level, § 2S1.1 instead of § 2F1.1. Section 2S1.1
provides that if the value of funds involved exceeds $6,000,000,
then the offense level increases by eight. There is no increase
in the offense level if the laundering involves $100,000 or less.
Landerman argues that, when sentencing him under § 2S1.1, the
court should have considered only the $23,000 that he himself
laundered and should not have grouped that amount with the total
amount acquired through fraud.
We begin by noting that the record does not evince on its
face that the district court grouped Landerman’s offenses. The
presentence report relied on § 1B1.3 to recommend a base offense
1
Section 3D1.2(d) groups together counts involving
“substantially the same harm” when “the offense level is
determined largely on the basis of the total amount of harm or
loss, the quantity of a substance involved, or some other measure
of aggregate harm.” Note 6 of the commentary accompanying
§ 3D1.2(d) states that a conspiracy to commit an offense is
covered under that subsection if the offense that is the object
of the conspiracy is covered under the subsection.
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level of 30. Under § 1B1.3, Landerman bears responsibility for
“all reasonably foreseeable acts and omissions of others in
furtherance of [] jointly undertaken criminal activity.” The
presentence report states that virtually all of the $6.1 million
acquired by the scheme during Landerman’s involvement was
laundered. Under this factual scenario, because that laundering
was reasonably foreseeable to Landerman, who helped devise a
shell company to hide fraudulently obtained funds, § 1B1.3 makes
Landerman responsible for the entire $6.1 million. Although
§ 1B1.3(a)(2) allows for grouping offenses to which § 3D1.2(d)
would apply, the presentence does not reach this provision and
instead holds Landerman responsible for the foreseeable
laundering undertaken by his co-conspirators. The district court
specifically adopted the presentence report’s factual findings.
These findings provide an adequate basis to affirm Landerman’s
sentence without our having to determine the § 3D1.2(d) issue.2
2
Landerman apparently argues that the district court could
not have reached a base offense level of 30 without grouping,
because contrary to the presentence report, nothing in the record
suggests that the entire $6.1 million was laundered. A district
court may rely on a presentence report in making factual
determinations. See United States v. Montoya-Ortiz, 7 F.3d 1171,
1180 (5th Cir. 1993). “If information is presented to the
sentencing judge with which the defendant would take issue, the
defendant bears the burden of demonstrating that the information
cannot be relied upon because it is materially untrue, inaccurate
or unreliable.” United States v. Angulo, 927 F.2d 202, 205 (5th
Cir. 1991). Although Landerman objected at sentencing to the
presentence report, he did not show by a preponderance of the
evidence that the money was not laundered. See, e.g., United
States v. Mourning, 914 F.2d 699, 706 (5th Cir. 1990). As such,
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Were we to assume that the district court grouped
Landerman’s offenses under § 3D1.2(d), such grouping would be
proper. Landerman relies on United States v. Tansley, 986 F.2d
880 (5th Cir. 1993), United States v. Johnson, 971 F.2d 562 (10th
Cir. 1992), and United States v. Hildebrand, 152 F.3d 756 (8th
Cir. 1998), to support his argument that the district court
should have considered only $23,000 when sentencing him under
§ 2S1.1. Contrary to Landerman’s assertion, nothing in Tansley
compels the conclusion that a court sentencing a defendant under
the money laundering guideline may consider only money that the
defendant laundered or that he himself was “reasonably capable”
of laundering. Furthermore, in United States v. Leonard, 61 F.3d
1181 (5th Cir. 1995), this Court distinguished Johnson and its
kin from cases in which, as here, the money laundered was
reinvested into and perpetuated the fraudulent activity. Although
Hildebrand counsels against grouping fraud with money
laundering,3 Landerman cannot escape the precedent set by this
the district court’s factual finding that the conspirators
laundered virtually all of the $6.1 million was not clearly
erroneous, see Sarasti, 869 F.2d at 806, and we will not disturb
it on appeal.
3
We also note that, whatever its reasoning as to grouping,
Hildebrand would nonetheless support Landerman’s sentence under
the § 1B1.3 reasoning. “Of course, if a sentencing court finds
that all fraud proceeds were laundered, then the amount of fraud
loss and the value of money laundered will be the same for
sentencing purposes.” Hildebrand, 152 F.3d at 763 n.2.
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Court in Leonard, which explicitly would allow grouping.4
B
Landerman next complains that the district court abused its
discretion and denied him due process when it denied his motion
for a downward departure pursuant to Sentencing Guideline
§ 5K2.0. We have jurisdiction to review a district court’s
decision not to depart downward from the guideline range only if
the district court based its decision upon an erroneous belief
that it lacked the authority to depart. See United States v.
DiMarco, 46 F.3d 476, 478 (5th Cir. 1995). Moreover, something in
the record must indicate that the district court held such an
erroneous belief. See United States v. Willey, 57 F.3d 1374, 1392
n.32 (5th Cir. 1995). Nothing so indicates here. To the contrary,
the district court indicated at sentencing that it could, but
that it refused to, grant Landerman the downward departure he
requested. Accordingly, Landerman’s appeal of this issue is
dismissed for lack of jurisdiction.
C
In a supplemental brief before this Court, Landerman argues
that the district court abused its discretion by ordering him to
4
We also note and reject Landerman’s assertion that his
sentence violates his constitutional right to due process. See
United States v. Lopez, 923 F.2d 47, 50-51 (5th Cir. 1991)
(“[T]he error asserted, involving as it does the technical
application of a single guideline, is far from an obviously
constitutional one.”).
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pay a $10,000 fine. Because Landerman did not challenge the
imposition of the fine before the district court, we review for
plain error only. See United States v. Maldonado, 42 F.3d 906,
909-12 (5th Cir. 1995).
The Sentencing Guidelines require a defendant to prove his
inability to pay a fine. See United States v. Fair, 979 F.2d
1037, 1041 (5th Cir. 1992). The defendant may rely on the
presentence report in order to establish his inability to pay the
fine. See id. If a district court chooses to disregard the
presentence report recommendation, it must make specific findings
regarding the defendant’s ability to pay a fine. See id.
Landerman’s presentence report states, “It does not appear the
defendant has the financial resources or future earning capacity
to pay a fine within the guideline range [$15,000 to $150,000].”
The report, however, further advises: “Subject to the defendant’s
ability to pay, the Court shall impose [a] fine amount that is at
least sufficient to pay the cost to the government of any
imprisonment, probation or supervised release ordered, unless the
Court finds it is clearly unreasonable to do so.” The report also
contains evidence that indicates that Landerman might be able to
pay a lesser fine, i.e., that Landerman and his wife have a net
monthly cash flow of $387. Without making additional specific
findings concerning Landerman’s ability to pay, the district
court imposed a fine of $10,000, without interest, payable in
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$300 monthly installments beginning sixty days after Landerman is
released on supervision. In imposing this fine, which is
considerably below the Guideline range, the district court did
not depart from the presentence report. Therefore, we see no
plain error and uphold the imposition of the fine.
D
For the foregoing reasons, we DISMISS Landerman’s appeal of
the district court’s refusal to grant the requested downward
departure from the Sentencing Guidelines. In all other respects,
we AFFIRM Landerman’s sentence.
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