United States v. Anderson

Revised May 18, 1999

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

_____________________

No. 98-40420
_____________________

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

JAMES ANDERSON and DEAN HODGE,

Defendants-Appellants.

_________________________________________________________________

Appeals from the United States District Court
for the Eastern District of Texas
_________________________________________________________________
April 26, 1999
Before KING, Chief Judge, STEWART, Circuit Judge, and LITTLE,
Chief District Judge.*

KING, Chief Judge:

Defendants-appellants James Anderson and Dean Hodge appeal

their convictions and sentences for conspiracy, transporting and

selling stolen goods in interstate commerce, and bank fraud. For

the following reasons, we affirm Hodge’s conviction and sentence,

and Anderson’s conviction. We vacate Anderson’s sentence and

remand for resentencing.

I. FACTUAL AND PROCEDURAL BACKGROUND

*
Chief Judge F. A. Little, Jr., of the Western District of
Louisiana, sitting by designation.
 On July 9, 1997, a federal grand jury for the Eastern

District of Texas returned a seven-count indictment against

defendants-appellants James Anderson and Dean Hodge

(collectively, defendants) and co-defendant Christopher Garner.

Defendants and Garner were arraigned and entered not guilty

pleas.

On September 10, 1997, the same grand jury returned a seven-

count superseding indictment against defendants and Garner.

Defendants and Garner were all named in counts one through three.

Count one charged a violation of 18 U.S.C. § 371, conspiracy to

transport and sell stolen goods in interstate commerce in

violation of 18 U.S.C. §§ 2314 and 2315. Count two charged

violations of 18 U.S.C. §§ 2314 and 2, transportation and aiding

and abetting the transportation of stolen goods in interstate

commerce. Count three charged violations of 18 U.S.C. §§ 2315

and 2, sale and aiding and abetting the sale of stolen goods in

interstate commerce. Counts four through seven charged Hodge

with bank fraud in violation of 18 U.S.C. § 1344. Defendants

were arraigned and entered not guilty pleas. Garner entered into

a plea agreement with the government and testified against

defendants at trial.

A jury trial began on December 10, 1997. According to the

evidence presented at trial, during the period between February

1, 1996 and March 27, 1996, defendants illegally harvested timber

from four Louisiana properties owned respectively by Willamette

2
Industries (Willamette), Discus Oil Corporation (Discus) and WLS

Corporation (WLS), W.E. Barron, Jr., and Elmer Davies. Pursuant

to the scheme, Garner reviewed county or parish tax records in

order to obtain the names and addresses of individuals who owned

tracts of land with timber. He then sent out a bulk mailing to

these individuals in which he offered to provide forest

management and timber services. He specifically sought out

landowners whose property was adjacent to land owned by non-

resident owners. In several instances, Garner entered into a

contract with landowners who had responded to his mailing and

then assigned the contract to Anderson for a percentage of the

profits. Anderson in turn hired Hodge to harvest the timber.

However, in addition to, or instead of, harvesting the timber on

the land that was the subject of the contract, Hodge and/or his

crew harvested the timber on adjoining land owned by non-

residents. Defendants transported a portion of the harvested

timber from Louisiana to mills in Texas and sold the timber.

More specifically, in February 1996, Garner contracted to

harvest timber on land owned by Kelley Barnes. On February 23,

1996, Garner assigned the contract to Anderson. On February 25,

1996, Anderson hired Hodge to harvest the timber. From February

25, 1996 until March 8, 1996, Hodge’s crew actually harvested

timber on land located north of the Barnes tract that was owned

by Willamette, and then transported that timber from the

Willamette tract to the Arkansas Forest Products mill located in

3
Shelby County, Texas, where it was sold. Willamette suffered

losses amounting to $57,582.12.

In March 1996, Garner contracted to harvest timber from land

owned by Roosevelt Boler. On March 13, 1996, Garner assigned the

Boler contract to Anderson, who then hired Hodge to harvest the

Boler timber. Anderson paid Boler, but never cut his timber. On

March 13, 1996, Anderson, Hodge, and crew actually harvested

timber on a tract of land adjacent to the Boler tract owned by

Discus and WLS. Discus and WLS suffered losses amounting to

$38,532.53.

On March 20, 1996, Garner contracted to harvest timber from

land owned by the Molly Peoples estate. On March 20, 1996,

Garner assigned the contract to Anderson. On March 26, 1996,

Anderson hired Hodge to harvest the timber. On March 27, 1996,

Hodge’s crew actually harvested timber on two neighboring tracts

of land owned by Barron and Davies respectively. Barron suffered

losses amounting to $3833.38 and Davies suffered losses amounting

to $1461.20.

With respect to the bank fraud counts alleged in the

indictment, the evidence at trial established that on July 24,

1995, Hodge entered into a loan agreement with the First National

Bank of Hughes Springs (First National). As part of the

agreement, Hodge assigned his company’s (Circle H Timber’s)

interest in two timber deeds to First National as collateral for

a loan. Thereafter, on January 29, 1996, Hodge executed a

4
renewal of this loan in the amount of $26,092. Hodge falsely

represented to First National that he would repay the loan from

proceeds of the sale of timber from the collateral property when,

in fact, Hodge knew that prior to the execution of the loan

renewal he had harvested and sold the timber in question.

Similarly, on September 7, 1995, Hodge assigned Circle H

Timber’s interest in another timber deed to First National as

collateral for a second loan. On March 25, 1996, Hodge renewed

this loan in the amount of $41,067, and again falsely informed

First National that he would repay the loan from the proceeds of

the sale of timber from the aforementioned property, but had

already harvested and sold the timber without giving any of the

proceeds to First National.

As collateral for a third loan, Hodge assigned his interest

in another timber deed on September 25, 1995. On March 25, 1996,

Hodge renewed this loan in the amount of $15,554 by falsely

representing to First National that this loan would be repaid

from the proceeds of the sale of timber taken from the property.

At the time Hodge renewed the loan, he knew that he had already

harvested and sold all the timber from the property and had

provided none of the proceeds to First National.

Finally, on November 14, 1995, Hodge assigned Circle H

Timber’s interest in a timber deed from another property to First

National as collateral for a fourth loan. On March 25, 1996,

Hodge renewed this loan in the amount of $8854 by falsely

5
representing to First National that he would repay the loan with

the proceeds of the sale of timber taken from the property. In

fact, Hodge had already harvested and sold the timber from the

property and had not provided the proceeds to First National.

The combined value of the four fraudulently renewed loans

was $91,567. First National auctioned other collateral

substituted by Hodge worth $49,257.42, and applied that amount to

Hodge’s four outstanding loans. Thereafter, a balance of

$42,309.58 remained.

At the close of the government’s case, defendants moved for

judgments of acquittal. The court denied the motions. At the

close of all evidence, defendants renewed their motions for

judgments of acquittal. The district court again denied the

motions. On December 15, 1997, the jury found defendants guilty

on all counts with which they were charged.

Anderson appeared for sentencing on March 20, 1998.

Anderson’s presentence report (PSR) had added eleven levels to

his initial base offense level of four pursuant to United States

Sentencing Guideline (U.S.S.G.) § 2B1.1(b)(1)(L) because the loss

Anderson had caused was more than $350,000, and two levels

pursuant to U.S.S.G. § 2B1.1(b)(4) because the offense involved

more than minimal planning. Based on a final base offense level

of seventeen and a criminal history category of II, the

sentencing guidelines suggested a range of twenty-seven to

thirty-three months of imprisonment. Anderson received a

6
sentence of twenty-seven months of imprisonment to be followed by

three years of supervised release. The district court also

ordered Anderson to pay restitution in the amount of $354,905.30

and a $50 special assessment for each count of conviction.

Anderson timely appealed, and the district court granted

Anderson’s motion for release pending appeal.

Hodge appeared for sentencing on March 26, 1998. His PSR

calculated his base offense level with regard to counts one

through three by adding ten levels to the initial base level of

four pursuant to U.S.S.G. § 2B1.1(b)(1)(K) because the loss

caused by Hodge was more than $200,000 but less than $350,000,

and by adding two levels pursuant to U.S.S.G. § 2B1.1(b)(4)

because the offense involved more than minimal planning. The

PSR’s calculations further increased Hodge’s base offense level

by four levels pursuant to U.S.S.G. § 3B1.1(a) for his role as an

organizer or leader, resulting in an adjusted base offense level

of twenty. With regard to counts four through seven, the PSR

calculated Hodge’s base offense level by increasing the initial

base level of six by six levels because the loss was more than

$70,000 but less than $120,000, and by increasing that total by

two levels for more than minimal planning, resulting in a total

adjusted offense level of fourteen. Pursuant to U.S.S.G.

§ 3D1.4, the multiple-count adjustment, Hodge’s combined adjusted

base offense level was twenty-one. Based on this base offense

level and a criminal history category of I, the guidelines

7
suggested a range of thirty-seven to forty-six months of

imprisonment. Hodge received a sentence of thirty-seven months

of imprisonment to be followed by five years of supervised

release. The district court ordered Hodge to pay restitution in

the amount of $245,711.90 and a $50 special assessment for each

count of conviction. Hodge timely appealed, and the district

court granted his motion for a stay of imprisonment pending

appeal.

On appeal, Anderson argues that the evidence was

insufficient to support his conviction on counts one through

three. He also contends that the district court erred by

considering conduct other than the conduct charged in the

indictment for purposes of calculating Anderson’s base offense

level at sentencing. The PSR used losses stemming from this

other conduct to increase Anderson’s base offense level.

Finally, Anderson argues that the district court erred by failing

to enter any findings as to the contested issues of fact that

Anderson raised in his objections to the PSR.

Hodge similarly argues that the evidence was insufficient to

support his conviction on counts one through seven of the

indictment. He further argues that the district court erred by

failing to read the superseding indictment to the jury. He also

challenges his sentence, contending that he is entitled to a

downward adjustment for acceptance of responsibility, that the

loss attributable to him under the bank fraud counts should be

8
the actual, rather than the intended, loss to First National,

that he is entitled to a reduction for minor participant status,

and that evidence of other conduct should not have been

considered at sentencing for purposes of calculating his base

offense level.

II. DISCUSSION

A. Sufficiency of the Evidence

Both Anderson and Hodge argue that the evidence failed to

establish that they participated in a conspiracy as charged in

count one of the superseding indictment, or that they aided and

abetted in the commission of the substantive offenses of

transportation and sale of stolen goods in interstate commerce as

charged in counts two and three. Hodge additionally argues that

the evidence failed to demonstrate that he committed the offense

of bank fraud as charged in counts four through seven of the

superseding indictment.

Both defendants moved for acquittal at the close of the

government’s case and at the close of evidence. We review the

district court’s denial of defendants’ motions for acquittal de

novo, applying the same standards as the district court in

reviewing the sufficiency of the evidence. See United States v.

Payne, 99 F.3d 1273, 1278 (5th Cir. 1996). In determining

whether there was sufficient evidence to sustain defendants’

convictions, we must decide, viewing the evidence and the

9
inferences therefrom in the light most favorable to the verdict,

whether a rational juror could have found defendants guilty

beyond a reasonable doubt. See United States v. Burton, 126 F.3d

666, 669 (5th Cir. 1997); Payne, 99 F.3d at 1278. “‘The evidence

need not exclude every reasonable hypothesis of innocence or be

wholly inconsistent with every conclusion except that of guilt,

and the jury is free to choose among reasonable constructions of

the evidence.’" Burton, 126 F.3d at 669-70 (quoting United

States v. Bermea, 30 F.3d 1539, 1551 (5th Cir. 1994)); see United

States v. Bell, 678 F.2d 547, 549 (5th Cir. Unit B 1982) (en

banc), aff’d, 462 U.S. 356 (1983). Moreover, our standard of

review does not change if the evidence that sustains the

conviction is circumstantial rather than direct. See Burton, 126

F.3d at 670; United States v. Cardenas, 9 F.3d 1139, 1156 (5th

Cir.1993); Bell, 678 F.2d at 549 n.3.

To establish a conspiracy to transport and sell stolen goods

in interstate commerce, the government was required to prove (1)

an agreement between two or more persons, (2) to commit the

crimes, and (3) an overt act committed by one of the conspirators

in furtherance of the agreement. See Burton, 126 F.3d at 670.

Moreover, there must be proof beyond a reasonable doubt that “the

defendant[s] knew about the conspiracy and . . . voluntarily

became part of it.” United States v. Krenning, 93 F.3d 1257,

1264 (5th Cir. 1996) (internal quotation marks omitted).

10
 To convict defendants of the transportation of stolen goods

in violation of 18 U.S.C. § 2314, the government was required to

show that defendants transported stolen goods in interstate

commerce, that defendants knew the goods were stolen, and that

the goods were worth more than $5000. See United States v.

Mackay, 33 F.3d 489, 493 (5th Cir. 1994). To convict defendants

of the sale of stolen goods in violation of 18 U.S.C. § 2315, the

government was required to show that defendants sold stolen

goods, that the goods were worth more than $5000 and had crossed

state lines after being stolen, and that defendants knew the

goods were stolen. See 18 U.S.C. § 2315. Because defendants

were charged with aiding and abetting the substantive offenses,

it was not necessary to prove that each defendant completed each

specific act charged in the indictment. See United States v.

Ismoila, 100 F.3d 380, 387 (5th Cir. 1996). The government must

prove, however, that the defendants shared the criminal intent

required for the substantive offenses. See id. Aiding and

abetting means simply that the defendants assisted a criminal

venture while sharing the requisite criminal intent, and took

some affirmative action to make the venture succeed. See id.;

United States v. Martiarena, 955 F.2d 363, 366 (5th Cir. 1992).

Mere presence and association are insufficient to sustain a

conviction for aiding and abetting. See Martiarena, 955 F.2d at

366.

11
 Anderson argues that the evidence against him was tenuous

and could not have supported the jury’s verdict. He contends

that no evidence established an agreement between him and Garner

and Hodge to commit a crime. He argues that, in the case of the

Discus and WLS property, he paid Boler for the timber he had

contracted to cut, indicating at best that a mistake as to

boundaries had occurred. Similarly, Hodge argues that there was

no evidence showing that he was part of a conspiracy and that he

was merely harvesting timber pursuant to the instructions of

Anderson and Garner.

After reviewing the evidence in the light most favorable to

the verdict, we conclude that it was sufficient to sustain

Anderson’s and Hodge’s convictions on counts one through three.

The jury could have reasonably inferred from the evidence

presented that Garner and defendants entered into an agreement to

cut timber from Louisiana property without obtaining the

permission of the owners and then transport that stolen timber to

out-of-state mills to be sold. The jury was free to disbelieve

Anderson’s theory that a mistake as to boundaries had occurred

and free to believe Garner’s testimony that he and Anderson had

an understanding that timber on land adjacent to the land that

was the subject of their contracts would be cut. From this, the

jury was free to infer the existence of a conspiracy. The jury

was also free to infer Hodge’s participation in the conspiracy

from Garner’s testimony. Garner testified that he once informed

12
Hodge that Hodge was cutting on the wrong property, but Hodge

told Garner not to worry about it. Garner also testified that

Hodge informed Garner that he had left some timber uncut along a

particular road in order to hide the fact that timber had been

cut on the wrong property. Similarly, there was testimony that

Hodge’s crew continued to harvest timber on the Willamette

property for six weeks after being informed that they were on the

wrong tract. Thus, there is sufficient evidence to sustain

Anderson’s and Hodge’s convictions on counts one through three.

As to counts four through seven, Hodge maintains that the

evidence cannot support his conviction because he did not obtain

monetary funds from First National at the time of his loan

renewals, and because he later executed a substitution of

collateral agreement with the bank in lieu of the timber

initially pledged as collateral.

Bank fraud under 18 U.S.C. § 1344 involves, inter alia, the

knowing execution of a scheme or artifice to defraud a financial

institution. See United States v. Campbell, 64 F.3d 967, 975

(5th Cir. 1995). A scheme to defraud includes “the use of

fraudulent pretenses or representations intended to deceive to

obtain something of value from a financial institution.” Id.

Additionally, the defendant must have knowingly made a

misrepresentation to the bank.1 See id.

1
In United States v. Dupre, 117 F.3d 810, 815-16 (5th Cir.
1997), we declined to determine whether materiality is still an

13
 After reviewing the evidence in the light most favorable to

the jury’s verdict, we conclude that there is sufficient evidence

to sustain Hodge’s conviction on counts four through seven.

Testimony established that at the time of each loan renewal Hodge

informed his loan officer that the timber serving as collateral

had not been cut, when in fact it had been cut, and that the loan

officer thereafter renewed the loan. The evidence is therefore

sufficient to establish that Hodge knowingly made a

misrepresentation that influenced the bank’s decision with the

intention of obtaining something of value from the bank--the use

of the bank’s money for longer than Hodge would have otherwise

been entitled to it. Cf. United States v. Dobbs, 63 F.3d 391,

395-96 (5th Cir. 1995) (finding evidence sufficient to sustain

bank fraud conviction where defendant sold collateral but did not

use proceeds to pay off loan, constituting a diversion of funds

belonging to the bank and establishing defendant’s intent to

defraud). That Hodge later substituted new collateral once he

was confronted with the missing collateral is irrelevant because

the crime was already completed.

B. Failure to Read Superseding Indictment to Jury

Hodge contends that the district court erred by failing to

require the reading of the superseding indictment to the jury.

element of 18 U.S.C. § 1344 in light of the Supreme Court’s
decision in United States v. Wells, 117 S. Ct. 921 (1997), which
held that materiality is not an element of 18 U.S.C. § 1014. We
need not decide that issue today, and decline to do so.

14
Hodge did not object to the failure to read the indictment at

trial. Thus, we review for plain error. See United States v.

Calverley, 37 F.3d 160, 162-64 (5th Cir. 1994) (en banc). Under

Federal Rule of Criminal Procedure 52(b), this court may correct

forfeited errors only where the appellant demonstrates (1) that

there is an error, (2) that the error is plain, and (3) that the

error affects the appellant’s substantial rights. See United

States v. Olano, 507 U.S. 725, 732-35 (1993). Even if these

factors are met, this court will correct a forfeited error only

if the error “seriously affect[s] the fairness, integrity or

public reputation of judicial proceedings.” Id. at 736 (internal

quotation marks omitted) (alteration in original).

Although the district court did not read the indictment to

the jury, the government had summarized the charges during voir

dire and explained the charges during its opening statement.

More importantly, the district court instructed the jury on each

element of the offenses charged, provided a copy of the

indictment to the jury at the conclusion of the trial for use in

their deliberations, and admonished the jury that the indictment

itself has no evidentiary value. Previously, we have held that

it is not error for a district court to fail to read the entire

indictment to the jury, but instead to instruct the jury to read

part of it themselves, where the district court had instructed

the jury that the indictment is not evidence. See United States

v. Sutherland, 656 F.2d 1181, 1202 (5th Cir. Unit A Sept. 1981);

15
United States v. Jones, 587 F.2d 802, 805-06 (5th Cir. 1979).

Additionally, courts have upheld the reading of summaries of the

indictment. See United States v. Rodriguez-Alvarado, 952 F.2d

586, 590 (1st Cir. 1991) (“The purpose of reading the indictment

is to inform the jury fairly of the charges against the

defendant. . . . There is no requirement that such information be

given by reading the whole, or even part, of the indictment.”)

(citation omitted). We conclude that the district court did not

plainly err by failing to read the superseding indictment to the

jury.

C. Sentencing

Hodge and Anderson each challenge their sentences on several

grounds. We review the district court’s findings of fact at

sentencing for clear error, and its application of the sentencing

guidelines de novo. See United States v. West, 58 F.3d 133, 137

(5th Cir. 1995).

Hodge contends that the district court erred by failing to

sustain his objection to his PSR’s use of the value of the

renewed loans, rather than the actual amount of the loss suffered

by First National, to calculate Hodge’s base offense level for

his bank fraud offenses. The four loans Hodge fraudulently

renewed totaled $92,369. Because the bank later sold collateral

substituted by Hodge, the actual loss to the bank was only

$42,309.58. Hodge’s argument lacks merit. Application note 7(b)

16
to U.S.S.G. § 2F1.1 provides that, in fraudulent loan application

cases, the intended loss should be used to calculate the base

offense level where it is greater than the actual loss. See U.S.

SENTENCING GUIDELINES MANUAL § 2F1.1 application note 7(b) (1997).

Moreover, because of the grouping provisions of U.S.S.G. § 3D1.4,

Hodge’s total base offense level would not change even had the

district court sustained his objection. Thus, the district court

did not err in adopting the intended loss in calculating Hodge’s

base offense level.

Hodge next contends that he was entitled to a two-level

decrease in his base offense level for acceptance of

responsibility because of the substitution of collateral

agreement he executed. The PSR recommended no adjustment for

acceptance of responsibility because Hodge denied his guilt and

put the government to its burden of proof at trial. Hodge

objected to this determination, admitting that he denied his

guilt, but contending that because he voluntarily cooperated with

First National in the sale of the substitute collateral he was

entitled to a § 3E1.1 adjustment. U.S.S.G. § 3E1.1 provides for

a two-level reduction “[i]f the defendant clearly demonstrates

acceptance of responsibility for his offense.” U.S. SENTENCING

GUIDELINES MANUAL § 3E1.1(a). Whether a defendant is entitled to a

downward adjustment for acceptance of responsibility is thus a

factual determination. We will affirm a sentencing court’s

decision not to award a reduction under U.S.S.G. § 3E1.1 unless

17
it is “without foundation,” a standard of review more deferential

than the clearly erroneous standard. United States v. Hooten,

933 F.2d 293, 297-98 (5th Cir. 1991) (internal quotation marks

omitted); see United States v. Kinder, 946 F.2d 362, 367 (5th

Cir. 1991). The district court’s conclusion that Hodge had not

accepted responsibility for his actions does not lack foundation.

Although Hodge did agree to substitute collateral, he waited

until after the bank discovered his disposal of the original

collateral. Moreover, he denied his guilt and forced the

government to prove its case at trial. We conclude that the

district court did not err by refusing to award Hodge a two-level

reduction for acceptance of responsibility.

Hodge next contends that the district court should have

awarded him a downward adjustment based on his minor role in the

timber theft conspiracy. Hodge claims that Anderson and Garner

received virtually all of the profits from the scheme, while he

received only a small fee based on the tonnage of logs hauled. A

minor participant is defined as “any participant who is less

culpable than most other participants, but whose role could not

be described as minimal.” U.S. SENTENCING GUIDELINES MANUAL § 3B1.2

application note 3. The PSR did not recommend a downward

departure pursuant to U.S.S.G. § 3B1.2, and Hodge made no

objection to this omission. Instead, the PSR recommended, and

the district court awarded, a four-level increase pursuant to

U.S.S.G. § 3B1.1(a) because Hodge was the organizer or leader of

18
a criminal activity involving five or more participants.2 Hodge

did object to this increase, but does not challenge it on appeal.

Because Hodge failed to raise before the district court his

argument for a two-level decrease for minor participant status,

our review is for plain error. See Calverley, 37 F.3d at 162-64.

We conclude that it was not plain error for the district court to

fail to decrease Hodge’s base offense level for minor participant

status in light of the fact that it awarded a four-level increase

for organizer or leader status pursuant to U.S.S.G. § 3B1.1(a).

See United States v. Thomas, 932 F.2d 1085, 1092 (5th Cir. 1991)

(“It is improper for a court to award a minor participation

adjustment simply because a defendant does less than the other

participants. Rather, the defendant must do enough less so that

he at best was peripheral to the advancement of the illicit

activity.”).

Finally, both Hodge and Anderson argue that the district

court erred in calculating the amount of loss attributable to

them, and thus their base offense levels, because the district

court included conduct not charged in the superseding indictment

as relevant conduct pursuant to U.S.S.G. § 1B1.3. They argue

that this conduct lacked a sufficient relationship to the other

conduct attributed to them for sentencing purposes. Both

defendants objected to their PSR’s inclusion of these incidents

2
The PSR included this adjustment because Hodge directed
his crew to cut timber that they were not authorized to cut.

19
as relevant conduct. The district court overruled their

objections and adopted the findings of the PSR.3 A district

court’s calculation of the amount of loss attributable to a

defendant at sentencing and its determination of what constitutes

relevant conduct are reviewed for clear error. See United States

v. Peterson, 101 F.3d 375, 384 (5th Cir. 1996).

The guidelines define “relevant conduct,” for offenses (such

as the instant offenses) for which U.S.S.G. § 3D1.2(d) would

require grouping of multiple counts, to include “all acts and

omissions . . . that were part of the same course of conduct or

common scheme or plan as the offense of conviction.” U.S.

SENTENCING GUIDELINES MANUAL § 1B1.3(a)(2). It is not necessary for

the defendant to have been charged with or convicted of carrying

out the other acts before they can be considered relevant

conduct. See United States v. Thomas, 969 F.2d 352, 355 (7th

Cir. 1992); United States v. Moore, 927 F.2d 825, 827 (5th Cir.

1991). However, for the acts to constitute relevant conduct, the

conduct must be criminal. See United States v. Powell, 124 F.3d

655, 665 (5th Cir. 1997); Peterson, 101 F.3d at 385. Two or more

offenses form part of a “common scheme or plan” where they are

3
Anderson also challenges the district court’s failure to
make specific factual findings. The district court implicitly
adopted the findings contained in the PSR and overruled
Anderson’s objections thereto, and thus did not need to reiterate
its specific factual findings. See United States v. Gaytan, 74
F.3d 545, 557 (5th Cir. 1996); United States v. Carreon, 11 F.3d
1225, 1230-31 (5th Cir. 1994); United States v. Mora, 994 F.2d
1129, 1141 (5th Cir. 1993).

20
“substantially connected to each other by at least one common

factor, such as common victims, common accomplices, common

purpose, or similar modus operandi.” U.S. SENTENCING GUIDELINES

MANUAL § 1B1.3 application note 9(A). “Offenses that do not

qualify as part of a common scheme or plan may nonetheless

qualify as part of the same course of conduct if they are

sufficiently connected or related to each other as to warrant the

conclusion that they are part of a single episode, spree, or

ongoing series of offenses.” Id. § 1B1.3 application note 9(B).

Relevant factors to consider in making this determination include

“the degree of similarity of the offenses, the regularity

(repetitions) of the offenses, and the time interval between the

offenses.” Id.; see United States v. Bethley, 973 F.2d 396, 401

(5th Cir. 1992) (“To qualify as relevant conduct, the prior

conduct must pass the test of similarity, regularity and temporal

proximity.”).

Hodge’s PSR included as relevant conduct the following four

incidents:

In 1990, Hodge met Hazel Jones, an absentee landowner, who

informed him that she owned property in East Texas and was

interested in having her timber cut. Hodge replied that he would

have a forester look over her property. Jones later met Hodge

and showed him the property. She then returned to California

where she waited to hear from Hodge. She never heard from Hodge

and never entered into a timber contract with him. At a later

21
date, a family member of Jones discovered that Hodge’s timber

crew was removing timber from Jones’s property. Hodge removed

approximately twenty-four acres of trees valued at approximately

$4100. Jones received no compensation from Hodge for the timber

he removed.

On October 14, 1993, Roger Niemann advised the sheriff’s

office that timber was being illegally removed from his property.

Hodge had entered into a timber contract with Harriet Ross, who

owned property adjacent to Niemann’s. At some point prior to

October 14, 1993, Hodge had begun removing timber from the

Niemann property. While removing the Niemann timber, sheriff’s

deputies confronted Hodge and told him to cease operations. Once

the deputies left, however, Hodge continued to harvest Niemann’s

timber, which was later transported to mills in Louisiana,

Arkansas, and Texas. The value of the Niemann timber totaled

approximately $42,138.77.

In 1990, Diane Sweet gave Hodge permission to cross her land

in order to get to an adjacent tract of land his crew was

cutting. She later observed that Hodge had damaged her property

and had taken 100 trees off her land. In 1994 and 1995, she

again found Hodge removing timber from her property. At no time

did Sweet have a contract with Hodge for the removal of timber.

Hodge has never compensated Sweet for the illegal removal of her

timber, the value of which was $25,000.

22
 In May 1995, Charles Swift received a call from a friend who

asked him if he had sold some of his timber in Harrison County,

Texas. Swift responded that he had not. He then contacted local

authorities who went to Swift’s land. Upon arriving, officers

observed equipment belonging to Hodge’s company, Circle H Timber.

Between May 15, 1995 and May 17, 1995, Hodge had illegally

harvested and transported at least 708 tons of timber to six

mills located in Texas and Louisiana. The value of the timber

totaled approximately $32,878.

The PSR calculated the loss amount attributable to Hodge by

adding the loss that directly resulted from the offense of

conviction ($103,797.33) to the loss that resulted from the above

four incidents ($104,116.77), for a total combined loss of

$207,914.10. This amount resulted in an increase to Hodge’s base

offense level of ten levels pursuant to U.S.S.G.

§ 2B1.1(b)(1)(K).

Hodge argues that there was an insufficient temporal and

locational relationship between the incidents described above and

the conduct charged in the superseding indictment. The district

court adopted the reasoning of the PSR, which concluded that all

the conduct attributable to Hodge formed part of a common scheme

or plan because there existed a common purpose and similar modus

operandi. See U.S. SENTENCING GUIDELINES MANUAL § 1B1.3 application

note 9(A). The common purpose was the illegal removal and sale

of timber that did not belong to Hodge. The similar modus

23
operandi involved removing timber from land belonging to absentee

landowners who would be less likely to discover the removal, and

removing timber from land adjacent to land containing timber that

Hodge had permission to harvest. Although the incidents occurred

over a period of several years, there is “no separate statute of

limitations beyond which relevant conduct suddenly becomes

irrelevant.” Moore, 927 F.2d at 828. Moreover, the incidents

occurred regularly over this period, with the last one occurring

a mere nine months before the events alleged in the superseding

indictment. There is “sufficient similarity and temporal

proximity to reasonably suggest that repeated instances of

criminal behavior constitute a pattern of criminal conduct.”

Bethley, 973 F.2d at 401 (internal quotation marks omitted). We

conclude that the district court did not clearly err in finding

that the above incidents were sufficiently connected to the

offense conduct to constitute relevant conduct for purposes of

§ 1B1.3(a)(2).4

4
Hodge relies on United States v. Madkins, 14 F.3d 277,
279 (5th Cir. 1994), for the proposition that “conduct occurring
before the defendant joined the conspiracy typically cannot be
included in the relevant conduct inquiry.” Based on this
proposition, Hodge argues that conduct occurring before February
1996, the beginning of the conspiracy alleged in the superseding
indictment, cannot be attributed to him for sentencing purposes.
This argument lacks merit. In Madkins, the issue was whether to
attribute to the defendant the reasonably foreseeable conduct of
co-conspirators pursuant to U.S.S.G. § 1B1.3(a)(1)(B). The
relevant conduct attributed to Hodge, however, was his own
conduct, and the applicable guidelines provisions are U.S.S.G.
§ 1B1.3(a)(2) and U.S.S.G. § 1B1.3(a)(1)(A). Thus, Madkins is
inapposite.

24
 Anderson makes an argument similar to Hodge’s, challenging

the relevant conduct attributed to him pursuant to § 1B1.3(a)(2).

Anderson’s PSR set forth the following ten incidents of relevant

conduct:

In February 1993, Oprea Anderson entered into a timber-

cutting agreement with Treetop Timber Company to harvest timber

on her property for $3000. On March 17, 1994, defendant Anderson

and his partner purchased the contract for $500. Anderson then

harvested the timber without his partner’s knowledge but never

compensated Mrs. Anderson, who suffered losses amounting to

$3000.

In 1993, Elizabeth Clark and Gerry Ray entered into an

agreement with Treetop Timber Company to harvest timber on their

property for $50,000. On March 8, 1994, Anderson and a partner

purchased the contract for $3,069.08. Without his partner’s

knowledge, Anderson harvested part of the timber. Clark and Ray

received partial payment but were never fully compensated. As a

result, they suffered losses totaling $46,500.

In April 1994, Kyle Bradley entered into an agreement with

Anderson in which Anderson agreed to haul timber on Bradley’s

property to a mill in Oklahoma. During a three-week period in

July 1994, Anderson took 2000 tons of timber valued at $82,000

from the property of Bradley, Bradley’s father, and two private

landowners under contract with Bradley. Bradley compensated the

private landowners, but never received compensation from

25
Anderson. According to the PSR, Anderson was indicted for theft

as a result of his actions and Bradley obtained a civil judgment

against him in the amount of $84,859.70.

In January 1995, Margaret Falsone contracted with Tree South

Land and Timber Company to harvest timber on her property for

$30,000. Anderson later purchased the contract and harvested the

timber. Falsone received only $1,841.63 from Anderson, resulting

in a loss of $28,158.37.

In January 1995, Donna and Helen Anderson entered into a

timber contract with Tree South Land and Timber Company to

harvest timber on their property. Anderson later purchased the

contract and harvested the timber. In June 1995, Helen Anderson

inspected the property and discovered damage, including litter

strewn about the property and damage to the fences and gates.

Although Donna and Helen Anderson received checks totaling

$8,187.51 and $2,047.03, respectively, from Anderson, they claim

to have suffered losses totaling $20,000.

In March 1995, Loren Griswold contracted with Tree South

Land and Timber Company to remove a portion of the timber on his

property for $5000. Anderson purchased the contract and

harvested all the timber on the property, which was valued at

$12,000. Anderson also cut approximately fifty feet onto a

neighbor’s property. Anderson paid Griswold $3,398.33. Griswold

suffered losses totaling $8602.

26
 In May 1995, John Rummel entered into an agreement with Tree

South Land and Timber Company to harvest a portion of the timber

on his property for $4000. Anderson purchased the contract and

harvested the timber. Rummel later visited the property to find

that the timber had been harvested and the land extensively

damaged. Anderson paid Rummel $478.32, resulting in a loss to

Rummel of $3600.

In May 1995, Victor Weber contracted with Tree South Land

and Timber Company to harvest a portion of timber on his property

for $28,000. Anderson purchased the contract and harvested the

timber. Anderson paid Weber only $4524, resulting in a loss to

Weber of $23,476.

In 1995, Elmer Peebles contracted with Anderson to harvest

timber on his property. Anderson harvested the timber specified

in the contract, and also harvested additional timber. Peebles

suffered losses amounting to $5500.

In April 1997, John Clopton received a letter from Anderson

stating that Anderson had cut timber on forty acres of Clopton’s

land. Clopton informed Anderson that he was one of fifteen

owners of the property in question and that he was unaware of any

agreement to harvest timber on the land. Anderson responded that

Christopher Garner had procured the original timber cutting

agreement in February 1996 and assigned it to Anderson. Anderson

provided a copy of the agreement which contained the forged

signatures of Clopton and his aunt. Clopton advised Anderson

27
that he had never met Christopher Garner. Eventually, Clopton

and Anderson reached an agreement whereby Anderson would pay the

property owners $25,000 for the harvested timber and would

replant the tract of land at an additional cost of $4800.

Anderson failed to make any payments, resulting in a loss to

Clopton of $29,800.

The PSR calculated the loss amount attributable to Anderson

by adding the loss that directly resulted from the offense of

conviction ($103,797.33) to the loss that resulted from the

above-described incidents ($253,496.07), for a total combined

loss of $357,293.40. This amount resulted in an increase to

Anderson’s base offense level of eleven levels pursuant to

U.S.S.G. § 2B1.1(b)(1)(L).

We conclude that the district court clearly erred by

including the incident involving Donna and Helen Anderson as

relevant conduct for purposes of calculating Anderson’s base

offense level because, at least on the record before us, this

incident involved only property damage and implicated no criminal

conduct. Moreover, it is not clear from the record that many of

the other incidents described above involve criminal conduct.

Anderson argues that they involve mere contract disputes--

situations where Anderson did not make the full amount of the

payment called for by the contract. Only the incidents involving

Bradley, Griswold, Peebles, and Clopton on their face and without

further inquiry involve criminal conduct.

28
 As to the remainder of the incidents, the record on appeal

is conspicuously devoid of citations to state or federal law that

would confirm the criminal nature of Anderson’s conduct. The

PSR, the transcript of Anderson’s sentencing, and the

government’s appellate brief are all silent on this point.

Because Anderson’s base offense level decreases once the

incident involving Donna and Helen Anderson is removed from

consideration, we vacate Anderson’s sentence and remand for

resentencing.5 On remand, we direct the district court to make

specific findings as to the criminal nature and the relevancy of

each incident it includes as relevant conduct. See Peterson, 101

F.3d at 385 (remanding for resentencing so that district court

could determine whether losses attributed to defendant resulted

from criminal conduct).

III. CONCLUSION

For the foregoing reasons, we AFFIRM Hodge’s conviction and

sentence. We AFFIRM Anderson’s conviction, but VACATE his

sentence, and REMAND to the district court for resentencing

pursuant to our instructions.

5
Subtracting the loss derived from the incident involving
Donna and Helen Anderson ($20,000) from the total loss inflicted
by Anderson ($357,293.40), results in a one-level decrease to
Anderson’s base offense level pursuant to U.S.S.G.
§ 2B1.1(b)(1)(K).

29