IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
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m 01-20043
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UNITED STATES OF AMERICA,
Plaintiff-Appellee,
VERSUS
RICHARD ALLISON HAMMOND,
Defendant-Appellant.
_________________________
Appeal from the United States District Court
for the Southern District of Texas
(H-96-CR-172-1)
_________________________
October 1, 2001
Before JOLLY, SMITH, and WIENER, Richard Hammond appeals the sentence he
Circuit Judges. received for embezzlement, contending that
the district court erred in enhancing his
JERRY E. SMITH, Circuit Judge:* sentence for actions committed by others.
Finding no reversible error, we affirm.
I.
*
Pursuant to 5TH CIR. R. 47.5, the court has From 1971 to 1995, Hammond was
determined that this opinion should not be president and business manager of the
published and is not precedent except under the International Brotherhood of Teamsters Local
limited circumstances set forth in 5TH CIR. R. Union 988. Between 1990 and 1995, he
47.5.4.
repeatedly embezzled union funds by using his third parties involved in jointly undertaken
union-issued American Express credit card for criminal activity.1 Hammond again appeals his
personal expenses unrelated to legitimate sentence.
Local 988 business. In 1998, he was
convicted on multiple counts of embezzling II.
union funds totaling $231,502.49 and also on The sentence must be affirmed if “the dis-
several other charges not relevant to the trict court . . . ha[s] made findings establishing
present appeal. Of the amount in question, that (1) Hammond agreed to undertake
$41,712.49 was spent not by Hammond but by criminal activities jointly with third parties, (2)
his associates, Louis Stewart and Gerald the losses caused by the third parties were
Doerr. within the scope of the agreement, and (3) the
third parties’ misconduct was reasonably
Stewart was secretary-treasurer of Local foreseeable to Hammond.” Hammond I, 201
988, and Doerr was its business agent, during F.3d at 351. “A finding by a district court that
the period when Hammond embezzled the conduct is part of a common scheme is a
funds. Stewart had used his own union-issued factual determination subject to review under
American Express card to charge $31,484.01 the clearly erroneous standard.” United States
in personal expenses, while Doerr had v. Vital, 68 F.3d 114, 118 (5th Cir. 1995).
embezzled $10,228.48 in the same way. The The district court must find that a
district court sentenced Hammond to fifty-one preponderance of evidence indicates that the
months’ imprisonment, a five-year term of defendant committed the relevant conduct.
supervised release, and $369,000 in restitution. United States v. Bryant, 991 F.2d 171, 177
(5th Cir. 1993). Thus, we reverse only if the
We affirmed Hammond’s conviction but finding that a preponderance of evidence
vacated the sentence and remanded for resen- connected Hammond to the conduct of
tencing. United States v. Hammond, 201 F.3d Stewart and Doerr is clearly erroneous.
346 (5th Cir. 1999) (“Hammond I”). The sen-
tence was vacated because it had been Because the record indicates a substantial
augmented as a result of the attribution of likelihood that Hammond, Doerr, and Stewart
Stewart and Doerr’s actions to Hammond. had coordinated their criminal activities, the
The panel required “a specific finding of jointly findings are not clearly erroneous. It is
undertaken activity” if the sentence was to be difficult to dispute the conclusion that
upheld. Id at 352. Hammond was likely to have been aware of
Doerr’s and Stewart’s illegal activities but
On remand, the district court reinstated the
fifty-one-month sentence, convinced that the
reversal of its earlier ruling had been a result of 1
As noted below, the appropriate level of proof
“deficient articulation” and that this court had for this case was not in fact “reasonable doubt” but
been “looking for certain key words.” The preponderance of the evidence. Therefore, the
district court found “beyond a reasonable finding that, beyond a reasonable doubt, Hammond
doubt” that the funds embezzled by Doerr and had participated in a common scheme with Stewart
Stewart could be attributed to Hammond as and Doerr was unnecessary; it would have been
reasonably foreseeable acts and omissions of sufficient to show that such an inference was
supported by a preponderance of the evidence.
2
failed to report them, despite having a From these facts, an “explicit or implicit
fiduciary duty to do so. For several years in agreement” can certainly be “fairly inferred
the early 1990’s, Hammond was president of from the conduct of the defendant and others.”
Local 988 at a time when he, Doerr, and U.S.S.G. § 1B1.3 (comment n.2). It is unlike-
Stewart were simultaneously embezzling union ly that the three embezzlers would have violat-
funds. Hammond had ultimate responsibility ed their fiduciary duty to report each other’s
for all Local 988 spending and so had a activities or felt confident that their own
fiduciary duty to report and prevent any criminal acts would go undetected in the
embezzlement by his subordinates. Similarly, absence of what the district court called a “re-
Stewart and Doerr had a fiduciary duty to ciprocal relationship” between them.
scrutinize Hammond’s expenditures and report
any potential embezzlement. As secretary- Thus, the judgment on remand satisfies the
treasurer of the Local and a member of its three criteria laid out in Hammond I, 201 F.3d
executive board, Stewart had a especially at 351. From the evidence, it can be fairly in-
strong responsibility in this regard. ferred that Hammond “agreed to undertake
criminal activities jointly with third parties.”
Under the sentencing guidelines, “the court Id. And a fair inference of an “explicit or im-
may consider any explicit or implicit plicit agreement” is all that the sentencing
agreement fairly inferred from the conduct of guidelines require. U.S.S.G. § 1B1.3
the defendant and others.” U.S.S.G. § 1B1.3 (comment n.2). The finding that a reciprocal
(comment n.2). District courts are also arrangement existed between Hammond,
allowed to take into account “all acts and Stewart, and Doerr satisfies Hammond I’s
omissions committed, aided, abetted, requirement of a “specific finding of jointly
counseled, commanded, induced, procured, or undertaken activity.” Hammond I, 201 F.3d at
willfully caused by the defendant.” U.S.S.G. 352.
§ 1B1.3(a)(1)(A).
We do not opine that Hammond’s mere
It is certainly possible to “infer” that an “ex- knowledge of Stewart’ s and Doerr’s activities
plicit or implicit agreement” existed between was sufficient proof of an agreement.2 Rather,
Hammond, Stewart, and Doerr to cover up it is the combination of his knowledge with the
and perhaps even facilitate each other’s em- fact that he violated his fiduciary duty to
bezzlement. Among the items they illegally report their misconduct, and that they in turn
purchased with their union-issued credit cards violated their duty to report Hammond’s own
were hunting rifles, expensive brand-name embezzlement, that creates a legitimate
clothing, monogrammed luggage, sporting inference of “explicit or implicit agreement”
goods, and home electronics equipment. As sufficient to satisfy the requirements of the
they reviewed the records of each other’s guidelines. Id.
expenditures, the three could hardly have been
in any doubt that their associates were
engaged in embezzlement and that these 2
Cf. United States v. Evbuomwan, 992 F.2d
expenditures were not for legitimate union 70, 74 (5th Cir. 1992) (holding that “the mere
business. knowledge that criminal activity is taking place is
not enough for sentence enhancement under
§ 1B1.3").
3
There is no doubt that the district court’s
findings on remand satisfy the second
requirement of Hammond I, that “the losses
caused by the third parties were within the
scope of the agreement.” Hammond I, 201
F.3d at 351. By definition, an agreement
reciprocally to facilitate one another’s
embezzlement contemplated the facilitation of
precisely the sort of “losses” that Doerr and
Stewart inflicted on the union. Id.
Finally, it is also highly likely that “the third
parties’ misconduct was reasonably fore-
seeable to Hammond.” Id. Given that Ham-
mond was responsible for supervising Doerr
and Stewart and was embezzling union funds
himself, he reasonably could foresee that his
apparent reciprocal arrangement with them
would facilitate the very sort of “misconduct”
in which they actually engaged. Id.
AFFIRMED.
4