FILED
United States Court of Appeals
Tenth Circuit
PUBLISH
May 12, 2011
UNITED STATES COURT OF APPEALS
Elisabeth A. Shumaker
Clerk of Court
TENTH CIRCUIT
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
No. 10-4114
v.
NEIL RICK VIGIL,
Defendant - Appellant.
Appeal from the United States District Court
for the District of Utah
(D.C. No. 2:09-CR-00884-DB-1)
Benjamin C. McMurray, Assistant Federal Public Defender (Steven B. Killpack, Federal
Public Defender, and Scott Keith Wilson, Assistant Federal Public Defender, with him on
the briefs), Salt Lake City, Utah, for Defendant-Appellant.
Karin M. Fojtik, Assistant United States Attorney (Carlie Christensen, United States
Attorney, with her on the brief), Salt Lake City, Utah, for Plaintiff-Appellee.
Before KELLY, TACHA, and EBEL, Circuit Judges.
EBEL, Circuit Judge.
Defendant-Appellant Neil Vigil was arrested after police pulled him over and
found in his car a vast cache of counterfeit identifications and other materials indicative
of identity theft. Mr. Vigil ultimately reached a plea deal with the government. At
sentencing, the district court applied a two-level enhancement under Section 2B1.1(b)(4)
of the Sentencing Guidelines, which provides for such an enhancement where "the
offense involved receiving stolen property, and the defendant was a person in the
business of receiving and selling stolen property" (the "ITB Enhancement"). The district
court also imposed a $10,000 fine over Mr. Vigil's objection, despite the finding in the
Presentence Report that Mr. Vigil did not appear able to pay a fine.
Mr. Vigil contends that the district court erred in both applying the enhancement
and imposing the fine. First, Mr. Vigil argues that the ITB Enhancement only applies
where a defendant actually has sold stolen property, and there is no evidence that he ever
sold stolen property in this case. Second, Mr. Vigil argues that imposition of the fine was
improper in light of his inability to pay a fine and his obligation to pay restitution. For
the reasons discussed below, we reverse the district court's application of the
enhancement and imposition of the fine, vacate Mr. Vigil’s sentence, and remand for
resentencing.
BACKGROUND
On July 18, 2009, Mr. Vigil was pulled over by an officer from the Cedar City,
Utah, Police Department. During a search of the car, the officer found extensive
2
evidence of identity theft, including hundreds of cashed and uncashed checks, several
driver's licenses of other individuals, counterfeit identifications showing Mr. Vigil's
picture, numerous counterfeit checks, a large volume of check-stock and photo paper, a
knife, pearl pigment, spray glue, and a wallet belonging to one theft victim, "R.L." The
officer also found four laptop computers and electronic storage devices, which, as a
subsequent search revealed, contained (1) over 200 jail booking photos and/or driver's
license photos of other individuals; (2) over 500 scanned images of identification
templates and identification features, stolen identifications, bank logos, checks, birth
certificates, and counterfeit identifications bearing Mr. Vigil's photo; (3) over 600 logged
check records regarding the production of counterfeit checks; (4) other files related to the
production of checks; and (5) other files related to apparent victims of identity theft.
Subsequent investigation revealed that R.L.'s wallet had been stolen from a Gold's
Gym locker, and that Mr. Vigil had used R.L.'s identity to obtain credit cards from
Cabelas and Best Buy. Mr. Vigil then used those cards to make various purchases and
obtain a $1,000 cash advance. The investigation also revealed that Mr. Vigil had used
another victim's identification to negotiate a counterfeit check at Zions Bank in Logan,
Utah, and to open an account and receive cash back at a Wells Fargo branch. During a
police interview, Mr. Vigil admitted that in addition to stealing checks from mail boxes
and wallets from gym lockers, he purchased information stolen by others.
On November 24, 2009, Mr. Vigil was indicted on seven counts of fraudulent
conduct. He ultimately pled guilty to three counts: (1) access device fraud, in violation of
3
18 U.S.C. § 1029(a)(5); (2) aggravated identity theft, in violation of 18 U.S.C. § 1028(a);
and (3) possession of stolen mail, in violation of 18 U.S.C. § 1708.
With respect to the access-device-fraud and possession-of-stolen-mail counts, the
Presentence Investigation Report ("PSR") calculated Mr. Vigil's offense level to be 17,
which included, inter alia, a base-offense level of six (U.S.S.G. § 2B1.1(a)(2)); a six-level
enhancement for an offense involving 250 or more victims (the "Victim Enhancement")
(U.S.S.G. § 2B1.1(b)(2)(C)); and a two-level enhancement under the ITB Enhancement.
With respect to the aggravated-identity-theft count, the PSR noted that the Guideline
sentence is the term of imprisonment required by 18 U.S.C. § 1028A —in this case, a
two-year consecutive sentence.
The PSR calculated Mr. Vigil's criminal-history category to be VI, based on 19
criminal-history points. Accordingly, the PSR calculated Mr. Vigil's Guideline range to
be 51-63 months for the access-device-fraud and possession-of-stolen-mail counts, and
24 months for the aggravated-identity-theft count, for a total range of 75-87 months.
The PSR also recommended ordering restitution in the amount of $15,642.91
(including $2,717.19 to Cabelas; $3,918.62 to Best Buy; $7,455.10 to Zions Bank; and
$1,552 to Wells Fargo). Although the PSR described several jobs held by Mr. Vigil in
the past, with pay ranging from $6.50 to $17 per hour, the PSR concluded that he did not
appear to have the ability to pay a fine due to his apparent lack of income or assets.
In his sentencing memorandum, Mr. Vigil objected to the PSR's application of the
Victim and ITB Enhancements. Mr. Vigil also contended that the restitution amount was
4
limited to Cabelas's loss of $2,717.19, because the other losses described in the PSR
stemmed from conduct underlying counts that were dismissed pursuant to the plea
agreement and thus not subject to restitution.
At sentencing, Mr. Vigil and the government agreed that the number of "victims"
that could be taken into account for the purposes of the Victim Enhancement was actually
ten, and thus that the Victim Enhancement provided for a two-level increase instead of a
six-level increase. The parties also agreed that under the plea agreement, restitution was
limited to $2,717.19. However, the parties disagreed about the applicability of the ITB
Enhancement. Mr. Vigil argued that while he received stolen identity information and
checks, there was no evidence that he sold such material, and thus he could not be
deemed to be in the business of receiving and selling stolen property. The government,
in turn, argued that while it did not have evidence that Mr. Vigil specifically sold stolen
property, Mr. Vigil's lifestyle, coupled with his apparent unemployment, permitted the
inference that he was in the business of receiving and selling stolen property.
The court rejected Mr. Vigil's argument and applied the ITB Enhancement,
concluding that the totality of the circumstances indicated that the enhancement applied:
Here I find from the totality of the circumstances that this guideline
provision fits this case. It says if the offense involved receiving stolen
property and the defendant was the person in the business of receiving and
selling stolen property, increase by two levels. Let me say it this way, that
if this case does not fit the purpose behind that guideline provision, then I
don't know one that does. Given all of the factual record that I have before
me on what the defendant was about, what he had in his possession and
what he admitted to doing with this property that he would steal and make
use of, and if we're going to quibble about what the word selling means, we
5
are not going to do it before me. If this does not fit here, then it is difficult
for me to think of a case where it would fit any better, especially given the
volume of materials here that were involved with Mr. Vigil. I respectfully
disagree with the defense's position on that point.
(Record on Appeal ("ROA"), vol. ii at 13.)
Accordingly, the court found that with respect to the access-device-fraud and
possession-of-stolen-mail counts, Mr. Vigil's offense level was 13 (reflecting the four-
point reduction in the Victim Enhancement). Coupled with a criminal-history category of
VI, this yielded a Guideline range of 33-41 months. Although Mr. Vigil argued for a
sentence of 33 months on all counts, the court rejected Mr. Vigil's request and applied the
two-year sentence on the aggravated-identity-theft count consecutively to the high end of
the Guideline range on the other counts, for a total of 65 months.
The court then ordered restitution of $15,642.91, the amount set forth in the PSR.
However, Mr. Vigil again objected that only Cabelas's loss of $2,717.19 could be subject
to restitution, as the other losses stemmed from conduct underlying counts that were
dismissed pursuant to the plea agreement. The government conceded this point, but the
court asked for confirmation that the plea agreement "tie[d the court's] hands," and
commented that "[p]eople should pay back money they steal." (Id. at 33.) Ultimately,
however, the court imposed the lower restitution amount. The court then stated that it
was not imposing a fine, but in the very next sentence stated, "No, wait, I am. A fine of
$10,000." (Id. at 34.) Mr. Vigil objected to the fine on the grounds that he was indigent,
but the court made no further findings or comments on this issue.
6
DISCUSSION
I. The ITB Enhancement
"In reviewing a district court's application of the Guidelines, we review its legal
conclusions de novo and its factual findings for clear error." United States v. De La
Cruz-Garcia, 590 F.3d 1157, 1158 (10th Cir. 2010). "[T]o the extent [a] defendant asks
us to interpret the Guidelines or hold that the facts found by the district court are
insufficient as a matter of law to warrant an enhancement, we must conduct a de novo
review." United States v. Martinez, 602 F.3d 1156, 1158 (10th Cir. 2010) (internal
quotation marks omitted). Accordingly, although we review the factual findings made by
the district court for clear error, we review de novo whether those facts are sufficient to
warrant the ITB Enhancement.
Mr. Vigil contends that the ITB Enhancement applies only to professional fences,
and thus that for the enhancement to apply there must be evidence that a defendant
actually sold stolen property.1 Accordingly, Mr. Vigil argues, the district court erred in
applying the ITB Enhancement in his case because there is no evidence that he ever sold
any stolen property. The government, conversely, argues that we need only refer to a
four-factor test set forth in an application note of the ITB Enhancement—a test that at
1
In his appellate briefs, Mr. Vigil also argued that the first part of the ITB
Enhancement—that the offense involve receiving stolen property—was not satisfied in
his case because none of the specific offenses for which he was convicted contain as an
element the receipt of stolen property. However, Mr. Vigil withdrew this contention at
oral argument.
7
least on its face appears not to require evidence that the defendant actually sold stolen
goods—to determine whether the enhancement applies. The government therefore
contends that the enhancement can be applied without evidence that the defendant sold
stolen property.
We agree with Mr. Vigil. As described below, the text and legislative history of
the ITB Enhancement indicate that for the enhancement to apply, there must be
(1) evidence that the defendant received and sold stolen property, and, further,
(2) evidence that the defendant was in the business of receiving and selling stolen
property. We find no such evidence in the record in this case.
A. The ITB Enhancement Applies Only to Professional Fences—Those
That Receive and Sell Stolen Property.
This Court has yet to construe the ITB Enhancement. However, it can hardly be
disputed that the ITB Enhancement is directed at professional fences—those that receive
and sell stolen goods, not those that merely receive goods for their own use or sell goods
that they themselves steal.
First, by restricting application of the ITB Enhancement to defendants who are "in
the business of receiving and selling stolen property," the plain language of the ITB
Enhancement indicates that it applies only to professional fences. U.S.S.G.
§ 2B1.1(b)(4). Courts have thus held that the ITB Enhancement cannot apply to a
defendant who merely sells goods that he himself has stolen, or merely uses goods stolen
by and received from others. See United States v. Kimbrew, 406 F.3d 1149, 1153 (9th
8
Cir. 2005) ("[N]early every circuit that has addressed the meaning of this enhancement
has agreed that a thief who sells goods that he himself has stolen is not in the business of
receiving and selling stolen property." (internal quotation marks omitted)); United States
v. Saunders, 318 F.3d 1257, 1267 (11th Cir. 2003) (finding that a prerequisite to the
application of a similar enhancement under U.S.S.G. § 2B6.1(b)(2) "is that the defendant
personally received and sold stolen property");2 United States v. McMinn, 103 F.3d 216,
222 (1st Cir. 1997) ("[A] thief would not qualify for the ITB enhancement if the only
goods he distributed were those which he had stolen."); United States v. Sutton, 77 F.3d
91, 94 (5th Cir. 1996) ("[O]ur approach views the [ITB E]nhancement as a punishment
for fences, people who buy and sell stolen goods, thereby encouraging others to steal, as
opposed to thieves who merely sell the goods which they have stolen.").
Moreover, the legislative history of the ITB Enhancement further supports this
interpretation. Originally, Section 2B1.1 governed only "Larceny, Embezzlement, and
Other Forms of Theft," and did not contain the ITB Enhancement. U.S.S.G. § 2B1.1
2
Section 2B6.1 of the Guidelines governs offenses involving alteration or removal
of motor vehicle identification numbers, and provides that "if the defendant was in the
business of receiving and selling stolen property, increase by 2 levels." U.S.S.G. §
2B6.1(b)(2). The Saunders court noted the "striking similarities" between the ITB
Enhancement and the enhancement under Section 2B6.1(b)(2), and relied on other courts'
analysis of the ITB Enhancement in construing Section 2B6.1(b)(2). Saunders, 318 F.3d
at 1264 n.9; see also United States v. Maung, 267 F.3d 1113, 1118 n.5 (11th Cir. 2001)
("[Other courts'] analysis of the phrase 'in the business of receiving and selling stolen
property' in interpreting § 2B1.1(b)(4)(B) applies to the identical language in § 2B6.1."),
abrogated on other grounds by Dolan v. United States, 130 S. Ct. 2533 (2010).
9
(1987).3 Instead, Section 2B1.2, which governed "Receiving Stolen Property," provided
an enhancement where "the offense was committed by a person in the business of selling
stolen property." Id. § 2B1.2(b)(2)(A). The "Background" to Section 2B1.2 explained
the rationale for the enhancement: "Persons who receive stolen property for resale receive
a sentencing enhancement because the amount of property is likely to underrepresent the
scope of their criminality and the extent to which they encourage or facilitate other
crimes." Id. § 2B1.2 cmt. background (emphasis added).
In 1989, Section 2B1.2 was expanded to cover "Transporting, Transferring,
Transmitting, or Possessing" in addition to "Receiving" stolen property, and the
Commission added the words "receiving and" to the enhancement, so that it applied
where "the offense was committed by a person in the business of receiving and selling
stolen property." U.S.S.G. app. C, amend. 102 (Nov. 1, 1989). In 1993, Section 2B1.2
was deleted and consolidated with Section 2B1.1, and the enhancement was moved there.
In addition, the enhancement was amended to add the first clause, requiring that "the
offense involved receiving stolen property," thereby maintaining the enhancement's
applicability only to offenses involving receipt. U.S.S.G. app. C, amend. 481 (Nov. 1,
1993).
3
Section 2B1.1 now governs "Larceny, Embezzlement, and Other Forms of Theft;
Offenses Involving Stolen Property; Property Damage or Destruction; Fraud and Deceit;
Forgery; [and] Offenses Involving Altered or Counterfeit Instruments Other than
Counterfeit Bearer Obligations of the United States." U.S.S.G. § 2B1.1.
10
In light of this legislative history, courts prior to 2001 construed the ITB
Enhancement to apply to professional fences; that is, those who buy and receive stolen
property. See McMinn, 103 F.3d at 220 (finding that the legislative history of the ITB
Enhancement "substantiates that it was meant to cover the professional fence, not the
thief"); United States v. Warshawsky, 20 F.3d 204, 214 (6th Cir. 1994) ("A person 'in the
business of receiving and selling stolen property' is a person once referred to less
flatteringly as a 'fence.'"); United States v. St. Cyr, 977 F.2d 698, 703 (1st Cir. 1992)
("Where there is no indication either of a pattern of dealing in stolen property or of a
developed operation that promises such consistency for the future, the defendant is
unlikely to be 'in the business.'"); United States v. Braslawsky, 913 F.2d 466, 468 (7th
Cir. 1990) ("The common understanding of a person in the business of receiving and
selling stolen property is a professional fence and not a person who sells property that he
has already stolen.").
However, courts differed in the nuances of their application of the ITB
Enhancement, and, arguably, a circuit split developed. The Fifth, Sixth, and Seventh
Circuits applied a "fence test," in which "the sentencing courts merely examine[] the
defendant's operation to determine: (1) if stolen property was bought and sold, and (2) if
the stolen property transactions encouraged others to commit property crimes."
Warshawsky, 20 F.3d at 215; see also United States v. Esquivel, 919 F.2d 957, 960 (5th
Cir. 1990); Braslawsky, 913 F.2d at 468. The First, Third, and Ninth Circuits adopted a
"totality-of-the-circumstances" test, in which "the sentencing judge must undertake a
11
case-by-case approach, weighing the totality of the circumstances, with particular
emphasis on the regularity and sophistication of a defendant's operation, in order to
determine whether a defendant is 'in the business' of receiving and selling stolen
property." St. Cyr, 977 F.2d at 703; see also United States v. Cottman, 142 F.3d 160,
165-66 (3d Cir. 1998); United States v. Zuniga, 66 F.3d 225, 228-29 (9th Cir. 1995).
In 2001, the Sentencing Commission resolved this conflict by adding Application
Note 5 to Section 2B1.1. U.S.S.G. app. C, amend. 617 (Nov. 1, 2001). Application Note
5 provides as follows:
For purposes of subsection (b)(4), the court shall consider the following
non-exhaustive list of factors in determining whether the defendant was in
the business of receiving and selling stolen property:
(A) The regularity and sophistication of the defendant's activities.
(B) The value and size of the inventory of stolen property
maintained by the defendant.
(C) The extent to which the defendant's activities encouraged or
facilitated other crimes.
(D) The defendant's past activities involving stolen property.
U.S.S.G. § 2B1.1 cmt. appl. n.5. In describing the reason for the amendment, the
Sentencing Commission noted the similarity between the "fence" test and the "totality-of-
the-circumstances" test, in that under either test, "courts consider the sophistication and
regularity of the business as well as the control, volume, turnover, relationship with
thieves, and connections with buyers." U.S.S.G. app. C, amend. 617 (emphasis added).
However, the Commission explicitly stated that it was adopting the totality-of-the-
circumstances approach "because it is more objective and more properly targets the
12
conduct of the individual who is actually in the business of fencing." Id. (emphasis
added).
The Commission thus appears to have reaffirmed that the ITB Enhancement
applies only to fences—those that buy and sell stolen property. Accordingly, in
construing the ITB Enhancement, courts have found that adoption of the "totality-of-the-
circumstances" test—rather than the "fence" test—does not alter the threshold
requirement that the defendant be a "fence." See Kimbrew, 406 F.3d at 1153-54
("[T]here is nothing inconsistent about adopting a totality of the circumstances approach
to the 'in the business' question, while also requiring a defendant to be a fence—to
receive and sell property stolen by others—before the enhancement applies. . . . In other
words, the 'totality of the circumstances' and 'fence' tests diverge on the considerations
that apply to being 'in the business,' but both tests operate on the predicate that the
defendant is a fence."); Saunders, 318 F.3d at 1268-69 ("[A]n interpretation of the
enhancement requiring that the defendant be a fence is not inconsistent with our adoption
of the totality of the circumstances test for applying the enhancement. . . . That the
defendant must . . . receive and sell stolen goods is the common denominator between the
[fence and totality-of-the-circumstances] tests."); Cottman, 142 F.3d at 167 n.9
("Although some Circuits have described the 'totality of the circumstances' approach,
upon which this Court relies, as a ‘competing test,’ nothing we said in [United States v.
King, 21 F.3d 1302 (3d Cir. 1994),] forecloses us from requiring in the future that a
defendant be a 'fence' for the enhancement to apply." (citation omitted)).
13
In short, it is apparent that in order for the ITB Enhancement to apply, one must
(1) receive and sell stolen property, and (2) be “in the business” of receiving and selling
stolen property. Application Note 5 guides our determination of the latter inquiry, but
does not extinguish the former. In providing that a court should consider, inter alia, the
regularity and sophistication of the defendant’s “activities,” the extent to which the
defendant’s “activities” encouraged or facilitated other crimes, and the defendant’s past
“activities” involving stolen property, Application Note 5 assumes that these “activities”
include both receipt and sales. An interpretation of the ITB Enhancement that does not
require that the defendant receive and sell stolen property would contravene the text and
purposes of the enhancement.
B. The District Court Erred by Applying the ITB Enhancement in the
Absence of a Factual Finding That Mr. Vigil Actually Sold Stolen
Property.
With the above-described principles in mind, we believe the district court erred in
applying the ITB Enhancement in this case. As the government conceded, there is no
evidence that Mr. Vigil ever sold any stolen property, much less that he was “in the
business” of selling stolen property. (See Aple. Br. at 23 ("Admittedly, no direct
evidence of resale of the property stolen by Vigil was before the court."); ROA, vol. ii, at
10 ("[T]he truth be told, we are not able to pinpoint and say, look, he sold stuff right
there . . . .").) If anything, the PSR indicates that Mr. Vigil used his own photograph in
14
conjunction with others’ stolen identities to make fraudulent identifications for his own
use.4 (ROA, vol. iii at 6.)
In any event, the district court did not make any factual findings as to whether Mr.
Vigil actually sold any stolen property. Instead, the court based its application of the ITB
Enhancement on “what [Mr. Vigil] was about, what he had in his possession and what he
admitted to doing with this property that he would steal and make use of.” (ROA, vol. ii
at 13 (emphasis added).) This reflects a legal conclusion that using stolen property
equates with selling stolen property. That conclusion is incorrect. See, e.g., Black’s Law
Dictionary 1360 (6th ed. 1990) (defining “sell” as “[t]o dispose of by sale” and “[t]o
transfer title or possession of property to another in exchange for valuable
consideration”). The court failed to make any finding that Mr. Vigil actually sold stolen
property, and without such a finding, it was error for the district court to have concluded
that Mr. Vigil was “in the business” of selling stolen property. Nor, on this record, would
any such finding be supported factually.
4
The record does reflect that Mr. Vigil’s inventory included over 200 jail booking
photos and/or driver's license photos of other individuals. However, the record is
agnostic as to what Mr. Vigil was doing with these photographs. It is possible that these
photos were somehow for sale, but it is equally possible that Mr. Vigil or others
associated with him were merely planning to use the photos for their own illicit ends.
The district court made no factual finding on this issue.
15
C. The District Court’s Error Was Not Harmless.
The government argues that even if the district court erred in applying the ITB
Enhancement, this error was harmless because the record reflects that even if the
Guideline range were lower, the court would have nonetheless varied upward to reach the
65-month sentence. This argument is without merit.
"Harmless error is that which did not affect the district court's selection of the
sentence imposed." United States v. Montgomery, 439 F.3d 1260, 1263 (10th Cir. 2006)
(internal quotation marks omitted). The burden of proving that the error is harmless is on
the beneficiary of the error—in this case, the government. Id.; see also United States v.
Abbas, 560 F.3d 660, 667 (7th Cir. 2009) ("To prove harmless error, the government
must be able to show that the Guidelines error did not affect the district court's selection
of the sentence imposed." (internal quotation marks omitted)).
The government is correct that at the sentencing hearing, the district court
indicated that it thought a sentence even longer than 65 months may have been
appropriate:
Section 3553 says I'm supposed to look hard at protecting the community
from the defendant. In this case if I were to read in this courtroom the
explanation given in the presentence report of the defendant's conduct, I
think most people would think the sentence should be higher. I just worry.
(ROA, vol. ii at 30.) In addition, although the district court reduced the Victim
Enhancement from a six-level to a two-level increase based on the government's
16
concession regarding the number of victims, the court noted that in sentencing it would
still consider the number of individuals impacted by Vigil's conduct:
The number is going down, but that does not mean that I'm not [sic]
eliminating my understanding of the dozens of people here who were
affected by in [sic] a negative way the behavior of Mr. Vigil. I will take
that into account in sentencing generally, but for guideline calculation
purposes only, we're down to a level 13 with a criminal history category of
six yielding a range of 33 to 41 months.
(Id. at 14.)
However, the court also indicated that, despite its view that the sentence probably
should be longer, it intended to sentence within the Guideline range:
With the guideline range I came in with, I thought the sentence would be 87
months. That was reduced because of the government's concession on the
victim issue and essentially reduced this from 87 to 65 months. I guess for
pragmatic and practical reasons I am staying within the guideline sentence
range. I think the sentence probably should be a lot longer.
(Id. at 29 (emphasis added).) At no point did the court state that the sentence would be
the same even if its calculation of the Guideline range were in error and the Guidelines
range were actually lower still.
The record suggests that if the court had calculated the Guideline range
differently, it still would have sentenced within that range. Indeed, the district court was
initially prepared to impose an 87-month sentence, but reduced it to 65 months based on
the applicable range. The record does not establish that had the court calculated the range
to be lower, it would have nonetheless varied upward simply to add a few additional
17
months.5 The government thus cannot show that, if the court erred, the error was
harmless. We therefore vacate Mr. Vigil’s sentence and remand to the district court for
resentencing. See United States v. Alapizco-Valenzuela, 546 F.3d 1208, 1215 (10th Cir.
2008) ("A non-harmless error in calculating the Guidelines range renders the sentence
unreasonable and entitles the defendant to resentencing.").6
II. The Fine
This Court reviews the district court's imposition of the $10,000 fine for abuse of
discretion. See United States v. Trujillo, 136 F.3d 1388, 1398 (10th Cir. 1998), cert.
denied, 525 U.S. 833 (1998). Mr. Vigil argues that the district court erred in imposing a
fine of $10,000 because (1) the PSR found that he was unable to pay a fine; (2) he
5
It appears that without the ITB Enhancement, Vigil's offense level would only be
reduced by one point, for a total of 12. This is because Vigil received the benefit of a
three-point reduction for acceptance of responsibility based on his pre-reduction offense
level of 16. See U.S.S.G. § 3E1.1 (providing for two-point reduction for acceptance of
responsibility generally, but three-point reduction where "the offense level determined
prior to the operation of [the reduction] is level 16 or greater"). Thus, if the ITB
Enhancement does not apply, Vigil's pre-reduction offense level would be 14, and he
would only qualify for a two-point reduction for acceptance of responsibility, resulting in
an offense level of 12.
With an offense level of 12 and a criminal history category of VI, the Guideline
range for the access-device-fraud and possession-of-stolen-mail counts would be 30-37
months. U.S.S.G. Ch. 5, Sentencing Table. Coupled with the two-year consecutive
sentence for aggravated identity theft, the applicable Guideline range would be 54-61
months, instead of 57-65 months as found by the district court.
6
The district court’s error resulted in the calculation of an incorrect Guideline
range. However, because the Guidelines are advisory, the district court would still have
discretion upon remand to vary upward from a properly-calculated Guideline range based
on the court’s considerations of the factors under 18 U.S.C. § 3553(a).
18
objected to the imposition of the fine on the basis of his inability to pay; and (3) the fine
impermissibly impairs his ability to pay restitution. Because the district court abused its
discretion by considering neither Mr. Vigil's ability to pay the fine nor the effect the fine
might have on his ability to pay restitution, this part of Mr. Vigil's sentence must be
reversed.
The Sentencing Guidelines provide that "[t]he court shall impose a fine in all
cases, except where the defendant establishes that he is unable to pay and is not likely to
become able to pay any fine." U.S.S.G. § 5E1.2(a). "If the defendant establishes that . . .
he is not able and, even with the use of a reasonable installment schedule, is not likely to
become able to pay all or part of the fine . . . , the court may impose a lesser fine or waive
the fine." Id. § 5E1.2(e). As the plain language of Section 5E1.2 indicates, "[t]he
defendant bears the burden of demonstrating an inability to pay a fine." United States v.
Deters, 184 F.3d 1253, 1258 (10th Cir. 1999).
18 U.S.C. § 3572(a) sets forth factors that must be considered by a district court
“[i]n determining whether to impose a fine, and the amount, time for payment, and
method of payment of a fine." Section 5E1.2(d) of the Guidelines sets forth similar
factors to be considered in determining the amount of a fine. Both sections include the
defendant's ability to pay as a consideration. See 18 U.S.C. § 3572(a)(1)-(2); U.S.S.G. §
5E1.2(d)(2)-(3). In addition, under 18 U.S.C. § 3572(b), a "court shall impose a fine or
other monetary penalty only to the extent that such fine or penalty will not impair the
ability of the defendant to make restitution." See also id. at § 3572(a)(4) (providing that a
19
court shall consider "whether restitution is ordered or made and the amount of such
restitution"); U.S.S.G. § 5E1.2(d)(4) (providing that a court shall consider "any restitution
or reparation that the defendant has made or is obligated to make").
In imposing a fine, a district court is not required to make factual findings specific
to each factor set forth in 18 U.S.C. § 3572(a) or U.S.S.G. § 5E1.2. See Trujillo, 136
F.3d at 1398; United States v. Washington-Williams, 945 F.2d 325, 328 (10th Cir. 1991).
However, the record must reflect the court's consideration of the pertinent factors and the
basis for the imposition of a fine. See Trujillo, 136 F.3d at 1398 ("It is sufficient that the
record reflects the basis for the imposition of the fine."); Washington-Williams, 945 F.2d
at 328 ("[S]atisfactory compliance with § 5E1.2 merely requires that the record reflect the
district court's consideration of the pertinent factors prior to imposing the fine.").
In United States v. Foote, the defendant argued on appeal that the district court's
imposition of a fine of $104,107.50 was excessive because it exceeded his ability to pay.
413 F.3d 1240, 1252 (10th Cir. 2005). We found that the record did not reveal "any
findings by the district court supporting [the defendant's] ability to pay" the fine. Id. at
1253. We noted that although "[d]istrict courts are not required to make specific findings
in cases where uncontested evidence establishes the defendant's ability to pay," the
defendant in that case "disputed his ability to pay and presented evidence in support of
his position." Id. Accordingly, we ordered that "[t]he district court on remand should
20
therefore make findings regarding [the defendant's] ability to pay and consider these
findings in deciding the amount of the fine to impose." Id.7; see also United States v.
Gonzalez, 541 F.3d 1250, 1256 (11th Cir. 2008) (per curium) ("[Defendant] objected at
sentencing and the court therefore had notice of the need to provide some reasoned basis
for imposing the fine. Because the record provides no explanation regarding the basis
upon which the court imposed the fine, we vacate the sentence imposed by the district
court and remand this case for resentencing." (citation omitted)).
In Mr. Vigil's case, the PSR described several jobs that he held in the past,
including as a carpenter, a concrete finisher, and a laborer, with pay ranging from $6.50
to $17 per hour. The PSR also stated that “Mr. Vigil has employable skills in carpentry,
concrete finishing, caulking, retail sales, computer repair, and Microsoft Office," and
"has past certification in CPS and has a heavy machinery operator's license." (ROA, vol.
iii at 28.) However, the PSR concluded that Mr. Vigil did not appear to have the ability
to pay a fine: "The defendant stated that he does not have any income and does not have
any assets. He reported that he owes creditors but . . . has no idea [about] the amount.
Based on the defendant's financial profile, it appears that he does not have the ability to
pay a fine." (Id.) Neither the government nor Mr. Vigil objected to these portions of the
PSR.
7
Before reaching this issue, we had found that the district court improperly
applied the Guidelines, and thus that the defendant's sentence must be reversed and
remanded. Foote, 413 F.3d at 1251.
21
At the sentencing hearing, the district court initially stated that it was not going to
impose a fine, but then immediately changed course and imposed a fine of $10,000.
Although the district court did not give any explicit reasons for the fine, the record
strongly suggests that the court felt that a fine was appropriate in light of the court's
inability, because of the plea agreement, to impose the full restitution amount of
$15,642.91 as called for by the PSR. The relevant portion of the sentencing-hearing
transcript is useful in understanding the court's decision:
THE COURT: Restitution is ordered in the amount of $15,642.91, with
regular payments to begin immediately. Cabela's, $2,717; Best Buy,
$3,918; Zions Bank, $7,455; and Wells Fargo Bank, $1,552. . . .
[DEFENSE COUNSEL]: Your Honor, as outlined in our objection, our
position is that given the convictions that were entered here, that the only
restitution that can be ordered is the $2,717.19.
...
THE COURT: You didn't say anything about that today, Mr. Huber
[AUSA]. What is your position on that?
[AUSA]: Judge --
THE COURT: I'm sorry. I'm at a loss here.
[AUSA]: We did respond in the pleading and noted that we didn't have an
adequate provision in our plea agreement to accommodate the other
restitution.
THE COURT: Is that what it boils down to, the plea agreement? Well, then
with the acknowledgement of the government it is $2,717.19. $100 a
month. That will be adjusted based on the probation officer's assessment
of the defendant's ability to pay. I guess it is a plea agreement thing.
People should pay back money they steal. That is apparently all that we
have an agreement on. Does that tie my hands? Why would your plea
agreement tie my hands?
22
[DEFENSE COUNSEL]: The statutes are set forth in my brief, Your
Honor.
...
THE COURT: Okay. Has he waived his appeal rights?
[DEFENSE COUNSEL]: He has not.
THE COURT: You have ten days to take an appeal if you feel this sentence
has been illegal or for any other reason you're planning to appeal to the
Tenth Circuit Court of Appeals. A $300 special assessment fee is imposed
pursuant to statute. I'm not imposing a fine. No, wait, I am. A fine of
$10,000. Anything else, Mr. McMurray [DEFENSE COUNSEL]?
[DEFENSE COUNSEL]: Just to note an objection to the fine on the
grounds that my client is indigent. That is all I want to note.
(Id. at 32-34 (emphasis added).)
The district court's imposition of the $10,000 fine must be reversed. Although the
fine was well within the applicable Guideline range of $3,000 to $30,000, see U.S.S.G.
§ 5E1.2(c)(3), the record does not reflect "the district court's consideration of the
pertinent factors prior to imposing the fine." Washington-Williams, 945 F.2d at 328.
Specifically, despite the PSR's finding that Mr. Vigil did not appear to be able to pay a
fine and the absence of any objection by the government to this finding, the district court
did not address at all the issue of Mr. Vigil's ability to pay. Indeed, the district court did
not provide any reasons for imposing the fine. In addition, the district court did not
consider whether the imposition of the fine might impair Mr. Vigil's ability to pay the
restitution ordered. Under these circumstances, the district court abused its discretion.
See Foote, 413 F.3d at 1253; Gonzalez, 541 F.3d at 1256.
23
The government nonetheless argues that the fine was appropriate because Mr.
Vigil's employment history, as described by the PSR, indicated that Mr. Vigil would be
able to pay the fine in the future. In support, the government cites two cases—one
published and one unpublished—finding that a defendant's present inability to pay does
not foreclose the imposition of a fine where the defendant may be able to pay the fine in
the future. See United States v. Platt, 97 F. App'x 851, 858 (10th Cir. 2004)
(unpublished) ("The fact a defendant is indigent at the time of sentencing does not
preclude a fine from being imposed."); United States v. Klein, 93 F.3d 698, 706 (10th
Cir. 1996) ("[The defendant's] indigence at the time of sentencing did not preclude
imposition of a fine."). However, in Platt we did not address whether or to what extent
the district court considered the defendant's ability to pay, 97 F. App'x at 858-59, and in
Klein, the district court specifically made findings regarding the defendant's employment
history and earning capacity in finding that the defendant could pay the fine over time in
the future, 93 F.3d at 705-06.
In this case, the district court did not indicate that it was basing the fine on Mr.
Vigil's future ability to pay. Indeed, the district court did not provide any reasons
supporting its implicit determination that Mr. Vigil was able to pay or would become able
to pay a $10,000 fine. This constitutes an abuse of discretion, and we therefore reverse
the court's imposition of the fine and remand for resentencing.
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CONCLUSION
For the reasons discussed above, we REVERSE the district court's application of
the two-level enhancement under U.S.S.G. § 2B1.1(b)(4) and imposition of a $10,000
fine, VACATE Mr. Vigil’s sentence, and REMAND for resentencing.
25