United States v. McCormack

United States Court of Appeals
For the First Circuit

No. 02-2579

UNITED STATES OF AMERICA,

Appellee,

v.

JAMES McCORMACK,

Defendant, Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Joseph L. Tauro, U.S. District Judge]

Before

Lynch, Circuit Judge,
Lipez, Circuit Judge, and
Garcia-Gregory,* District Judge.

Charles W. Rankin, with whom Rankin & Sultan was on brief, for
appellant.
Kathleen A. Felton, Attorney, U.S. Department of Justice, with
whom Michael J. Sullivan, U.S. Attorney, and George W. Vien and
Michael D. Ricciuti, Assistant U.S. Attorneys, were on brief, for
appellee.

June 8, 2004

*
Of the District of Puerto Rico, sitting by designation.
 LYNCH, Circuit Judge. This case raises two issues:

whether this Hobbs Act prosecution was within the scope of

Congress's power under the Commerce Clause, and whether the

defendant's sentence was in error in light of his acquittal on one

count.

Seeking to extort money from James Carter, a former drug

dealer, James McCormack helped plan and execute Carter's kidnapping

and ransom. After violently abducting Carter from his home,

McCormack and his fellow kidnappers threatened to kill and torture

him unless they were paid a million dollars. When Carter pleaded

that he only possessed about $300,000 in mutual funds and other

non-liquid assets, the kidnappers agreed to release him and told

him to liquidate his mutual funds in small increments until he

could pay them $100,000.

McCormack was eventually apprehended and convicted by a

jury of both attempting and conspiring to violate the Hobbs Act, 18

U.S.C. § 1951(a). He was acquitted of using and carrying a firearm

in relation to a crime of violence, id. § 924(c). He was sentenced

to serve 188 months in prison.

McCormack argues that there was insufficient evidence to

support the Hobbs Act convictions because no rational jury could

have found that his actions would have at least a de minimis effect

on interstate commerce. We reject this claim. In doing so, we do

not adopt the government's test that a particular amount of money

-2-
(here $100,000) is per se sufficient to meet the commerce element

of a Hobbs Act offense. McCormack also argues that his sentence is

plainly erroneous because it is longer than it would have been had

the jury convicted, rather than acquitted, him of the firearm

offense. This sentencing argument has a common-sense appeal,

especially to anyone not familiar with the specialized world of the

federal sentencing guidelines. But in this case, McCormack cannot

show plain error because he cannot bear his burden of demonstrating

that he was harmed. Consequently, we affirm his 188-month

sentence.

I.

The facts are described, for purposes of McCormack's

sufficiency of the evidence challenge, as a reasonable jury could

have found them, in the light most favorable to the verdict.

United States v. Casas, 356 F.3d 104, 109 (1st Cir. 2004).

Sometime in 1997, James McCormack was approached by his

friend and fellow Charlestown, Massachusetts resident, James Dagle,

and asked about his willingness to participate in the possible

robbery or kidnapping of James Carter. Dagle, a long-time

criminal, explained to McCormack that he had learned from his

attorney, Fred Ford, that Carter had accumulated large sums of

money in the early 1980s from selling marijuana. Although Carter

was eventually convicted and served eighteen months in prison in

the late 1980s, he was fined only $15,000, and his assets were not

-3-
forfeited. Dagle told McCormack that robbing or kidnapping Carter,

who had recently moved back to the Boston area and was self-

employed in the real estate business, could be potentially

lucrative, and that Ford wanted to gauge McCormack's interest in

participating in such a scheme.

McCormack, who independently knew that Carter had made a

lot of money by selling drugs in the 1980s, told Dagle he was

interested. Thereafter, Ford, Dagle and McCormack met several

times to determine how they could find where Carter was living.

Eventually, Ford learned that Carter was living with his family in

Carlisle, Massachusetts. Ford1 passed this information to

McCormack and Dagle, who arranged to obtain Carter's address from

records in the Carlisle Town Hall.

McCormack and Dagle started watching Carter's house to

see if there was an opportunity to break in while nobody was home.

After ten or fifteen multiple-hour surveillance missions, the pair

determined that Carter's house was rarely, if ever, empty. They

told Ford that they did not believe that burglary of Carter's house

was a feasible option, and Ford urged them to pursue the kidnapping

plan.

1
Attorney Ford was eventually convicted of attempting to hire
an undercover agent to kill McCormack and Dagle because he feared
that they would cooperate with authorities against him in
connection with the Carter kidnapping.

-4-
 In early 1998, McCormack organized a meeting with Dagle

and two other acquaintances he had recruited, Phil Myers and

Richard Hegarty, to discuss kidnapping Carter. McCormack proposed

that the group wait outside of Carter's house and abduct him from

his driveway immediately after he returned home from dropping off

his two children at school. McCormack was familiar with Carter's

schedule as a result of his surveillance activities. The group

also discussed who would obtain the necessary equipment for

conducting the kidnapping, and Dagle was put in charge of procuring

several handguns.

Less than an hour after the meeting ended, Dagle met with

McCormack and provided him with the promised guns, but told him

that he no longer wanted to participate in the kidnapping. With

the help of Myers, McCormack replaced Dagle with Dennis Quirk. The

reconstituted group, which included McCormack, Myers, Hegarty, and

Quirk, met several more times to finalize the details of the plan.

On about April 10, 1998, Hegarty and Myers stole two cars and a van

for use in the kidnapping, which was planned to take place a week

later.

On the morning of April 17, 1998, the four conspirators

met at a designated location in Somerville, Massachusetts. They

were joined by a fifth person, Francis Lang, whom Hegarty and Quirk

had recruited. McCormack put the guns that Dagle had supplied in

the stolen car, along with handcuffs, gloves and hats. At least

-5-
Quirk and Lang were given guns. McCormack, accompanied by Myers,

then drove the stolen van up to Carter's house and waited in a

small bend part-way up Carter's long driveway. The other three

drove the stolen car to the school that one of Carter's children

attended. When they saw Carter returning from dropping off his

child at the school, they radioed McCormack and Myers and then

followed Carter home.

When Carter pulled into his driveway, his path forward

was blocked by the van; once Carter stopped his car, he was boxed-

in from behind by the car driven by Hegarty. Myers and Quirk, who

were wearing stockings over their heads and vests that read "FBI,"

approached Carter's SUV, and Myers told Carter that he was under

arrest. Carter attempted to escape by ramming his SUV into the

van; in response, Quirk fired his gun into the front of Carter's

vehicle. Myers then pulled Carter out of the window of the jeep

using a choke hold and dragged him into the van, where he was

handcuffed, blindfolded, and bound with duct tape. In the process,

Lang, who had gotten into the van, hit Carter in the face with the

butt of a gun and broke several of his front teeth.

McCormack, who was driving the van, sped off once Carter

was inside. Followed by Quirk, who was driving Carter's SUV, and

Hegarty, who was still in the stolen car, McCormack drove the van

to Charlestown. During the drive, Myers and Quirk threatened to

kill Carter unless he paid them a million dollars. Carter

-6-
explained that he did not have that much money, but said that he

did own about $300,000 in mutual funds.

After picking up Quirk, who had ditched Carter's SUV when

it ran out of gas, McCormack drove the van to a warehouse in

Charlestown. There, the kidnappers transferred the bound and

blindfolded Carter into a laundry cart, which McCormack had

arranged beforehand, and wheeled him inside the warehouse. The

kidnappers took shifts interrogating Carter about how much money he

had and where he kept it. Throughout, they hit Carter, poked him

with knives, and threatened to torture him and cut off parts of his

body. Carter pleaded that while he was once a marijuana dealer, he

no longer dealt drugs; he had invested most of the money he made

while dealing drugs in real estate, mutual funds, and stocks.

Eventually, McCormack told Carter that he would be

released so that he could sell his mutual funds and turn over

$100,000 to the kidnappers. Carter was instructed to liquidate his

mutual funds slowly, in increments under $10,000, and was told that

somebody named "Sam" would call him with follow-up instructions.

If he refused to pay the money or contacted the police, Carter was

told that both he and his family would be killed. Keeping Carter

bound and blindfolded, the kidnappers then removed his bloodied

clothing, dressed him in new clothing, and dropped him off at the

side of a road in Woburn, Massachusetts. Carter eventually found

his way to a telephone and contacted his family.

-7-
 The following day, after Carter spoke with his attorney,

he reported the kidnapping to the Carlisle police. He also had

extensive dental work done on his broken front teeth and learned

that he had suffered a small stroke during the ordeal. As a result

of the stroke, Carter suffers from several permanent disabilities:

he slurs his speech, has a slight limp, and has problems

maintaining his balance.

Several days after Carter reported the kidnapping to the

police, his SUV, which had a bullet hole in its fender, was

recovered. Carter also received several messages from "Sam" on his

answering machine; the voice was McCormack's. But it was not until

Myers was arrested in September of 1998 on an unrelated matter that

the police learned who was behind Carter's abduction. Myers led

officers to Dagle, who agreed to cooperate with authorities. Dagle

recorded several conversations with McCormack in which the two

discussed the Carter kidnapping and whether they would be caught by

the police.

On December 21, 2000, a superseding indictment was filed

in the District of Massachusetts that charged McCormack, inter

alia, with conspiring and attempting to obstruct commerce by

robbery and extortion, 18 U.S.C. § 1951(a) (Hobbs Act), and with

using and carrying a firearm during and in relation to a crime of

-8-
violence, id. § 924(c).2 After a five-day trial in which both

Dagle and Myers testified and McCormack's incriminating recorded

statements were presented to the jury, McCormack was convicted on

the Hobbs Act counts, but acquitted of the firearm charge. On

November 5, 2002, the district court sentenced McCormack to 188

months of imprisonment.

II.

A. Sufficiency of the Evidence

Because McCormack moved under Fed. R. Crim. P. 29 for a

judgment of acquittal at the close of evidence, he has fully

preserved his challenge to the sufficiency of the evidence. United

States v. Van Horn, 277 F.3d 48, 54 (1st Cir. 2002). Our review is

de novo. United States v. Cornier-Ortiz, 361 F.3d 29, 32 (1st Cir.

2004). The issue is whether a rational factfinder, considering all

of the evidence in the light most favorable to the verdict, could

have found beyond a reasonable doubt that Carter's kidnapping "in

any way or degree obstruct[ed], delay[ed] or affect[ed] commerce,"

18 U.S.C. § 1951(a). See United States v. Boulerice, 325 F.3d 75,

79 (1st Cir. 2003) (standard of review for denials of Rule 29

motions).

2
The indictment also charged McCormack with conspiracy and
attempt to possess with the intent to distribute five kilograms or
more of cocaine. These counts were dismissed before trial and are
not at issue here.

-9-
 The commerce element of a § 1951(a) offense extends to

the limit of Congress's Commerce Clause authority. Stirone v.

United States, 361 U.S. 212, 215 (1960); United States v. Capozzi,

347 F.3d 327, 335 (1st Cir. 2003). It reaches all conduct that

creates a "realistic probability of a de minimis effect on

interstate commerce." Capozzi, 347 F.3d at 335 (quoting United

States v. Butt, 955 F.3d 77, 80 n.2 (1st Cir. 1992)). Under this

standard, it is the purpose of the conspiracy, rather than the

result the conspirators achieve, that is relevant in determining

the impact on commerce. United States v. Nguyen, 246 F.3d 52, 54

(1st Cir. 2001). Importantly, the de minimis test under the Hobbs

Act remains applicable after the Supreme Court's Commerce Clause

decisions in United States v. Lopez, 514 U.S. 549 (1995), and

United States v. Morrison, 529 U.S. 598 (2000). See Capozzi, 347

F.3d at 335-36.

The government contends that the kidnappers' extortionate

demand of $100,000, standing alone, is sufficient to satisfy the

Hobbs Act's commerce element under the de minimis effects test. It

argues that any reasonable factfinder would conclude that, in order

to satisfy such an exorbitant demand, the victim would need to

liquidate assets in a manner affecting interstate commerce.

We decline to adopt any bright-line rule that an

extortionate demand of a certain sum from an individual can

automatically satisfy the commerce element of the Hobbs Act.

-10-
Determining whether an act has a reasonable probability of having

a "de minimis effect" on interstate commerce inherently requires a

multifaceted and case-specific inquiry. See United States v.

Carcione, 272 F.3d 1297, 1301 n.6 (11th Cir. 2001) ("[W]e have

repeatedly held that in determining whether there is a minimal

effect on commerce, each case must be decided on its own facts."

(internal quotation marks omitted)). Moreover, it is far from

clear that, as the government asserts, a $100,000 demand would

necessarily require transactions affecting interstate commerce in

every case: many people would simply have no way of gathering

$100,000 together, whereas those specifically targeted because of

their access to money may well be able to satisfy such a demand

without resort to large financial transactions affecting interstate

commerce. Finally, the government's proposed standard does not

adequately distinguish between the extortion or robbery of a

business and that of an individual.

McCormack, ably represented, seizes on this last point to

argue that the evidence is too attenuated here because the victim

was an individual rather than a business or institution and was

targeted because he was believed to have cash on hand. He

correctly points out that the victim's connection to a business

entity is an important, though not dispositive, consideration in

determining whether the commerce element of a Hobbs Act violation

can be met. Cf. United States v. Perrotta, 313 F.3d 33, 36 (2d

-11-
Cir. 2002) (there is a significant distinction between "the

extortion of an individual and the extortion of a business for the

purposes of establishing Hobbs Act jurisdiction"). Because

criminal acts that are directed at individuals rather than at

businesses normally have a less substantial effect on interstate

commerce, courts have often required a heightened showing of an

effect on commerce to sustain such Hobbs Act convictions. See id.;

United States v. Lynch, 282 F.3d 1049, 1054 (9th Cir. 2002); United

States v. Wang, 222 F.3d 234, 238-40 (6th Cir. 2000); United States

v. Quigley, 53 F.3d 909, 910-11 (8th Cir. 1995).

The evidence here satisfies this heightened standard. A

reasonable jury could have concluded that there was a "realistic

probability" that the kidnapping would have a de minimis effect on

interstate commerce. Nguyen, 246 F.3d at 54. Here, the kidnappers

specifically instructed Carter to liquidate $100,000 of his mutual

funds after they learned that he could not meet a one million

dollar demand. These funds, both parties agree, were managed by

companies in interstate commerce and were themselves traded in

interstate commerce; if Carter had sold them, as the kidnappers had

demanded, both parties agree that "the sale would have reduced the

value of the companies that managed the funds and the mutual funds

themselves." Numerous courts have opined that the extortion of an

individual can satisfy the commerce element of the Hobbs Act when

it "cause[s] or create[s] the likelihood that the individual will

-12-
deplete the assets of an entity engaged in interstate commerce."

United States v. Collins, 40 F.3d 95, 100 (5th Cir. 1994); see also

Lynch, 282 F.3d at 1054-55; United States v. Diaz, 248 F.3d 1065,

1085 (11th Cir. 2001). The kidnappers' demand did just that.

Further, the kidnappers told Carter to liquidate his

mutual funds slowly, in increments under $10,000. A rational jury

could have concluded that the purpose of this instruction was to

evade federal regulatory oversight of large financial transactions.

Cf. 31 U.S.C. § 5313; 31 C.F.R. § 103.22 (requiring many financial

institutions to file currency reports when they participate in a

transaction involving currency of more than $10,000). The jury

could have concluded that the kidnappers' instruction to Carter

directly undermined the federal regulation of substantial monetary

transactions, and thus affected interstate commerce. Taken in

conjunction with the instruction to liquidate appreciable sums from

mutual funds that were traded in interstate commerce, the jury had

more than sufficient evidence to conclude rationally that there was

a reasonable probability that McCormack's criminal activity, if

successful, would have had a de minimis effect on interstate

commerce.

B. McCormack's Sentence

McCormack also challenges the 188-month sentence he

received, which he says violates the Sentencing Commission's

statutory mandate to "provid[e] certainty and fairness in

-13-
sentencing and reduc[e] unwarranted sentence disparities." 28

U.S.C. § 994(f). McCormack admits that he did not raise this issue

in front of the district court, and so our review is only for plain

error. United States v. Olano, 507 U.S. 725, 733-36 (1993). Under

the plain error test, McCormack bears the burden of demonstrating

"(1) an error, (2) that is plain, (3) that affects substantial

rights (i.e., the error was not harmless), and (4) that seriously

undermines the fairness, integrity, or public reputation of

judicial proceedings." United States v. Fazal-Ur-Raheman-Fazal,

355 F.3d 40, 48 (1st Cir. 2004); see United States v. Geronimo, 330

F.3d 67, 74-75 (1st Cir. 2003) (burden is on the defendant).

McCormack's argument is that his sentence is longer than

it would have been if the jury had convicted, rather than

acquitted, him of the firearm charge. The reason, claims

McCormack, is that the district court increased his base offense

level by seven for his Hobbs Act offenses because a firearm was

discharged in the course of the kidnapping.3 U.S.S.G. §

3
This enhancement was permissible even though McCormack was
acquitted of the firearm offense. There are differences in both
the standard of liability and the government's burden of proof
between the § 924(c) offense and the sentencing enhancements for
possession or use of a firearm. The crime requires proof beyond a
reasonable doubt that the firearm was, actually or constructively,
carried or used in a crime of violence. See United States v. Cruz,
352 F.3d 499, 509-10 (1st Cir. 2003). The sentencing enhancements
relating to firearms, by contrast, require only proof by a
preponderance of the evidence of the relevant conduct. See United
States v. Rodriguez, 112 F.3d 26, 28 (1st Cir. 1997). Even if the
conduct involved is the same, acquitted conduct may be used for
sentencing. Id.

-14-
2B3.2(b)(3). As a result of this seven-level enhancement (which

McCormack admits was applicable on its face), McCormack's total

offense level increased from 28 to 35,4 which, given his Criminal

History Category of II, raised the applicable sentencing range from

87-108 months to 188-235 months, see id. ch. 5 pt. A. The judge

sentenced McCormack at the low end of this range, imposing a 188-

month sentence.

But if the jury had convicted him of the firearm charge

pursuant to § 924(c), McCormack argues, then the Sentencing

Guidelines would have directed the judge not to apply the firearm

enhancement. See id. § 2K2.4 cmt. 4. Although the § 924(c)

conviction would have added 60 months to his sentence,5 see 18

U.S.C. § 924(c)(1), this would have resulted in a sentencing range

of only 147-168 months, which, even if the judge imposed the

4
The base offense level under the Guidelines is 18, but
McCormack also received several other enhancements, which are not
challenged on appeal, that increased his offense level to 28.
These included a two-level enhancement because the offense involved
the express or implied threat of death, § 2B3.2(b)(1); a two-level
enhancement because the amount demanded was more than $50,000 but
less than $250,000, § 2B3.1(b)(7); a two-level enhancement due to
the victim's bodily injury, § 2B3.2(b)(4)(A); and a four-level
increase because a person was abducted to facilitate the offense,
§ 2B3.2(b)(5).
5
The statute was amended in 1998 to provide for a ten-year
sentence when a firearm is discharged. Pub. L. No. 105-386, §
1(a), 112 Stat. 3496, 3496 (Nov. 13, 1998). At the time of the
offense, however, the statute provided for only a five-year
sentence.

-15-
maximum, is still 20 months fewer than the 188-month sentence he

received.

As McCormack admits, the Sentencing Guidelines anticipate

this anomaly. To avoid the possibility of inconsistent sentences,

the application notes to the provision dealing with violations of

§ 924(c), provide, in relevant part, that:

In a few cases in which the defendant is determined not
to be a career offender, the offense level for the
underlying offense . . . may result in a guideline range
that, when combined with the mandatory consecutive
sentence under 18 U.S.C. . . . § 924(c). . . , produces
a total maximum penalty that is less than the maximum of
the guideline range that would have resulted had there
not been a count of conviction under 18 U.S.C. . . . §
924(c) . . . (i.e., the guideline range that would have
resulted if the enhancements for possession, use, or
discharge of a firearm had been applied). In such a
case, an upward departure may be warranted so that [a]
conviction under . . . § 924(c) . . . does not result in
a decrease in the total punishment. An upward departure
under this paragraph shall not exceed the maximum of the
guideline range that would have resulted had there not
been a count of conviction under 18 U.S.C. . . . §
924(c). . . .

U.S.S.G. § 2K2.4 cmt. 4 (emphasis added). See generally United

States v. Hickey, 280 F.3d 65, 68 (1st Cir. 2002). Several courts

have affirmed such upward departures. See, e.g., United States v.

Banks-Giombetti, 245 F.3d 949, 953-54 (7th Cir. 2001); United

States v. Collins, 226 F.3d 457, 465-66 (6th Cir. 2000); United

States v. Johnson-Dix, 54 F.3d 1295, 1310-11 (7th Cir. 1995). The

government reasons that because of this provision it is not likely

that McCormack would have received a lesser sentence had he been

convicted of the § 924(c) charge.

-16-
 McCormack contends that this solution is insufficient to

meet the statutory mandate of avoiding unwarranted disparities in

sentences because the district court retains discretion not to

depart upward when a § 924(c) conviction has the effect of reducing

a defendant's sentence. McCormack says that the result of this

discretion is that it is preferable in certain circumstances, from

the defendant's point of view, to be convicted under § 924(c). The

sentencing range in such cases can be no higher than if the

defendant were acquitted, see § 2K2.4 cmt. 4, and there is at least

the possibility of convincing a sympathetic judge not to depart

upward. Because of this potential, McCormack argues that the

Guidelines are inconsistent with the statutory command in 28 U.S.C.

§ 944(f).

We are doubtful that the mere potential for a disparity

in sentences is enough to put the Guidelines and statute into

conflict, especially given the application note. The existence of

a potential disparity is nonetheless a very good reason for defense

counsel to present the issue to the sentencing judge. That was not

done here. We cannot say that there was plain error because

McCormack cannot show that his "substantial rights" were affected.

Fazal-Ur-Raheman-Fazal, 355 F.3d at 48. There is no reason to

assume that if McCormack had been convicted of the firearm offense

in § 924(c) then he would have been sentenced according to the 147-

168 month range that he calculates. The district court may well

-17-
have departed upward, as encouraged by the Guidelines. In fact,

the district court could have departed upward beyond the 188-month

sentence that McCormack received, up to 235 months, the maximum of

the Guidelines range that McCormack faced. See § 2K2.4 cmt. 4.

McCormack's acquittal on the § 924(c) count may well have been what

influenced the judge to sentence at the low end of the available

range. We add that the use of firearms during the kidnapping was

a very serious matter, and the judge was well within his authority

in giving the sentence that he did.

III.

McCormack's conviction and sentence are affirmed.

-18-