UNITED STATES COURT OF APPEALS
For the Fifth Circuit
No. 01-50803
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
VERSUS
CHARLES DOUGLAS MESSERVEY,
Defendant-Appellant.
Appeal from the United States District Court
For the Western District of Texas, San Antonio Division
December 30, 2002
Before DAVIS, BENAVIDES, and DENNIS, Circuit Judges.
DENNIS, Circuit Judge:
Petitioner Charles Douglas Messervey appeals his conviction
and sentence for five counts of mail fraud and two counts of money
laundering in violation of 18 U.S.C. § 1341 and 18 U.S.C. § 1357.
Messervey challenges his conviction on grounds that his due process
rights were violated when the trial judge failed to grant his
attorneys a continuance at trial for additional preparation time.
He also argues that his conviction is flawed because the trial
1
judge did not sua sponte order a mental competency exam. Messervey
finally contends that even if his conviction is valid, his sentence
is not, arguing both that his sentencing score was improperly
calculated, and that the district court abused its discretion in
upwardly departing from the prescribed sentencing range.
We find Messervey’s challenges to his conviction lack merit,
and now affirm the appellant’s conviction. But because the
district court abused its discretion in upwardly departing from the
prescribed United States Sentencing Guidelines (USSG) range in
calculating Messervey’s sentence, we vacate his sentence and remand
this case to the district court for re-sentencing.
I. Factual and Procedural Background
Messervey’s leadership and participation in four distinct
fraudulent schemes formed the basis of his conviction for mail
fraud and money laundering. The relevant details of each scheme
are as follows:
A. 1993 Automobile Fraud
On December 12, 1993 Messervey reported his 1993 Ford Ranger
truck missing from where he parked it at a local mall. He then
filed a claim with his insurer, Farmer’s Insurance Co. (Farmer’s),
and received $12,600 on the claim. Following an anonymous tip,
Farmer’s located the truck a month later in front of Messervey’s
apartment, bearing no signs of having been started without the
ignition key, or of being stripped for parts, both of which would
2
be typical of stolen vehicles. The apartment manager and security
guard reported seeing Messervey drive the truck after it had been
reported stolen. Messervey denied owning the truck, and it was
ultimately seized by the insurance company.
B. 1994 Art Fraud
In October 1994 Messervey convinced his live-in girlfriend,
Deanna Robertson, to enter into an art fraud scheme. Messervey
“sold” nine paintings to Robertson for what receipts claimed was
$230,000, even though Robertson earned just $35,000 per year.
Robertson took out a $120,000 insurance policy with Farmer’s to
insure these paintings. Messervey and Robertson then staged a
break-in at Robertson’s home, in which they claimed the paintings
had been stolen, and filed a $170,000 claim with Farmer’s for the
paintings, $50,000 over the policy value. In fact, at least three
of the paintings remained in Robertson’s basement a month after the
burglary, and three were found in Messervey’s home two years after
the alleged theft. When Farmer’s investigators demanded
Robertson’s financial records before paying out the claim,
Robertson became nervous and withdrew her claim.
C. 1996 Art Fraud
From November 1995 to January 1996 Messervey had a
photographer produce prints of twelve of his oil paintings for
$19,000. He paid for these prints out of the $34,500 he obtained
from David Mendietta, his hairstylist, who believed he was
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investing in the production of the prints. Messervey then took out
$4 million worth of insurance for the paintings from the North
Brook Insurance Company (North Brook).
In May 1996 Messervey informed Mendietta that he would not get
any of his investment back unless Mendietta helped him stage a
heist of the prints with the aim of filing a false insurance claim.
To stage the theft, Messervey and his friend Brad Dublon destroyed
the prints that had been produced. Then, while Messervey was out
of town with his friend Larue Hedrick, Mendietta entered
Messervey’s apartment with keys given to him by Messervey. He
placed empty boxes in the apartment to make it appear that prints
had been stolen from the boxes, and left a note confessing to
destroying the works because Messervey had not repaid him his
money.
Upon returning home Messervey called the police and claimed $8
million in artwork had been stolen. At Messervey’s behest his
friend Carolyn Coe falsely told investigators that she had observed
the alleged burglary by Mendietta. Messervey then claimed the
maximum $4 million due under the policy from North Brook. When
North Brook refused to pay, Messervey brought a civil action
against the company seeking $4 million in losses, and $ 5 million
punitive damages, all trebled, for a total suit demand of $27
million. At civil trial North Brook argued it was at most
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responsible for $18,000, the replacement costs of the prints.1
D. 1997 Crime Victims Compensation Fund Fraud
On August 11, 1996 Messervey went to the emergency room with
a head wound. The next day he called Bexar County, Texas police
and reported that he had been assaulted by Mendietta. The
policeman investigating the case found no evidence of an assault.
Nine months later in May 1997, Messervey filed a claim with the
Texas Crime Victims Compensation Fund requesting $25,000 for missed
work due to emotional trauma and medical expenses. The fund paid
out that claim.
Based on these four fraudulent schemes, Messervey was charged
and convicted of five counts of mail fraud and two counts of money
laundering in the District Court for the Western District of Texas.
The Pre-Sentencing Report (PSR) indicated Messervey had five
criminal history points, resulting in a Criminal History Category
of III, and a USSG sentencing range of 70 to 87 months. Citing the
failure of the USSG grouping rules to sufficiently reflect
Messervey’s participation and direction in four separate schemes,
and Messervey’s exploitation of vulnerable persons as accomplices
and victims of his crimes, the district judge upwardly departed
from the prescribed range, sentencing Messervey to 220 months
incarceration. Messervey now timely appeals.
II. Challenges to the Conviction
1
The outcome of this trial is not in the record.
5
A. Denial of Trial Continuance
Messervey first challenges his conviction on grounds that the
trial judge violated his due process rights by denying him a trial
continuance to allow his attorneys additional preparation time.
While the trial judge did grant Messervey four continuances,
delaying the start of trial from July 6, 1998 to August 2, 1999,
appellant argues that the denial of a fifth trial continuance to
allow his attorneys to fully review government discovery was in
error.2
We review a district court’s denial of a continuance for an
abuse of discretion, and will order a new trial only where the
defendant demonstrates serious prejudice. United States v. Kelly,
973 F.2d 1145, 1147-48 (5th Cir. 1992). We employ a totality of
circumstances test to decide whether there was an abuse of
discretion. Id. at 1148. Factors we consider when determining
whether a continuance was warranted are: the amount of time
available for preparation; defendant’s role in shortening the time
needed; the likelihood of prejudice from denial; and the
2
The original scheduled trial date was July 6, 1998. Messervey
received a 2 month continuance for additional attorney preparation,
with a new scheduled trial date of September 14, 1998. Given new
charges added on August 5, 1998 the court granted a second
continuance to November 2, 1998. Because of a new charge added on
September 18, 1998, the court granted a third defense continuance
to April 12, 1999. Messervey then switched his trial attorney
twice, first one public defender to another in early March 1999,
then to a privately paid attorney on April 1, 1999. Because of the
new attorney on the case, a fourth trial continuance to August 2,
1999 was granted.
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availability of discovery from the prosecution. United States v.
Uptain, 531 F.2d 1281, 1286-87 (5th Cir. 1978).
We believe that district court did not abuse its discretion in
denying Messervey a fifth continuance. Appellant obtained
continuances totaling over a year from the original trial date,
which we believe gave his attorneys more than adequate time to
prepare a defense. Messervey argues that because he changed
attorneys in April 1999, the four months his new attorneys had to
prepare for the August 1999 trial was inadequate. We find this
argument unpersuasive for two reasons.
First, as we noted in Uptain, we consider whether benefits
from attorneys other than trial counsel accrued to defendant in
determining whether a trial continuance for additional preparation
is warranted. Id. at 1287. Here, Messervey benefitted from the
nearly one year of preparation done by his fired public defender,
as well as from the work of his civil attorney in his suit against
North Brook. The time spent and work done by these attorneys when
aggregated with the four months given to his new counsel to prepare
for trial indicate the trial judge allocated more than enough time
for Messervey to prepare an adequate defense.
Second, and more critically, Messervey has failed to show how
he was prejudiced by the denial of the continuance. The only
prejudice Messervey alleges is that his attorneys were unprepared
to elicit useful information from an Assistant U.S. Attorney (AUSA)
the defense subpoenaed. In fact, the AUSA was extensively
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questioned by the trial judge in camera to determine whether he had
any relevant evidence, and Messervey’s counsel and the judge agreed
that the AUSA did not. Thus, any lack of preparation by
Messervey’s attorney for questioning the AUSA did not hurt
Messervey. As Messervey demonstrates no prejudice, the trial judge
did not abuse his discretion in denying the continuance.
B. Mental Competency Exam
Messervey next argues that the trial court erred by not
ordering a sua sponte mental competency exam of Messervey as
allowed by 18 U.S.C. § 4241(a).3 The decision whether to grant a
mental competency exam rests in the sound discretion of the trial
court, and we review only for an abuse of discretion. United
States v. Davis, 61 F.3d 291, 304 (5th Cir. 1995). To determine
whether there is “reasonable cause” to doubt a defendant’s
competence, we consider: (1) any history of irrational behavior,
(2) the defendant’s demeanor at trial, and (3) any prior medical
3
That section states:
At any time after the commencement of a prosecution for an
offense and prior to the sentencing of the defendant, the
defendant or the attorney for the Government may file a motion
for a hearing to determine the mental competency of the
defendant. The court shall grant the motion, or shall order
such a hearing on its own motion, if there is reasonable cause
to believe that the defendant may presently be suffering from a
mental disease or defect rendering him mentally incompetent to
the extent that he is unable to understand the nature and
consequences of the proceedings against him or to assist
properly in his defense.
18 U.S.C. § 4241(a) (2002) (emphasis added).
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opinion on competency. Id.
Messervey offers no evidence of either prior irrational
behavior on his part, or of medical opinions given to the trial
judge that should have led the judge to question Messervey’s
competence. Rather, he argues that several minor incidents at
trial should have created “reasonable cause” for the trial judge to
order a sua sponte mental competency exam. These episodes were:
(1) the defense attorney telling the trial judge that Messervey
needed a longer recess to consult with his doctors over the dosage
of medicines needed to combat his manic depression; (2) the defense
attorney telling the trial judge that Messervey threatened a
witness because his medicines were wearing off; and (3) the trial
judge’s quip to defendant that he needed an “insanity hearing”
after Messervey debated the quality of his representation.
None of these incidents are sufficient to make the trial
judge’s failure to order a competency exam an abuse of discretion.
We have previously explained that where trial episodes alone
constitute the evidence of a defendant’s incompetence, those
episodes need to be “sufficiently manifest” for a trial judge to be
required to sua sponte order a mental competency exam. Id. at 304
(citing Zapata v. Estelle, 588 F.2d 1017, 1021 (5th Cir. 1979)).
The reason is that we cannot expect a busy trial judge to aggregate
information not clearly connected to the competence of the
defendant to require a mental exam not requested by either party.
Zapata, 588 F.2d at 1021. Applying this rule in Davis, we
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concluded that a defendant’s ingesting 50 anti-depressant pills in
a suicide attempt during the course of trial, without a previous
history of irrational behavior or a medical opinion suggesting
incompetence, was insufficiently manifest to make the trial court’s
failure to sua sponte order a mental competency exam an abuse of
discretion. Davis, 61 F.3d at 304. If a suicide attempt during
trial was not “sufficiently manifest” to require a trial judge to
order a competency exam, certainly these off-the-cuff references to
defendant’s depression are insufficient to make the judge’s failure
to order an exam an abuse of discretion.
III. Challenges to the Sentence
A. Amount of Loss Calculation
Messervey first challenges his sentence by arguing that the
district court misapplied the USSG in calculating the amount of
loss from his 1996 art fraud. The district court applied USSG §
2F1.1, which stated that the intended loss of a fraud is to be used
for sentencing purposes where that figure is greater than the
actual loss.4 U.S. Sentencing Guidelines Manual § 2F1.1, cmt. n.8
(2000). The district judge determined that the intended loss from
the scheme was $4 million, the amount of the fraudulent claim
Messervey filed with North Brook, and used this figure for
4
This section of the USSG was eliminated by Amendment 617
effective November 1, 2001. That amendment combined § 2F1.1 and §
2B1.1, among other things. U.S. Sentencing Guidelines Manual
Supplement to Appendix C, Amendment 617 (November 1, 2002).
10
sentencing purposes.
We review the district court’s loss determination used under
a clearly erroneous standard; so long as the finding is plausible
in light of the record as a whole, it is not clearly erroneous.
United States v. Sowels, 998 F.2d 249, 251 (5th Cir. 1993).
Messervey argues the district court clearly erred by using an
amount of loss figure that was factually impossible for him to
obtain. To support his argument Messervey points to United States
v. Santiago, 977 F.2d 517 (10th Cir. 1992), a case factually
similar to this one. There the Tenth Circuit held that under USSG
§ 2F1.1, where an intended loss is greater than the potential loss
of a fraud, the potential loss forms the upper limit of the amount
of loss figure. Id. at 526. In Santiago this meant that the
correct amount of loss figure in a staged auto theft fraud was the
blue book value of the car, which the court reasoned was the
maximum the insurer would pay on the policy, rather than the much
higher amount of Santiago’s filed claim. Id. at 525-26. Based on
Santiago Messervey reasons that since the insurance policy allowed
North Brook to pay the $18,000 replacement costs of the prints,
this is the most North Brook would have paid on the policy, and
hence the upper limit on the amount of loss for sentencing.
Unfortunately for Messervey his case does not arise in the
Tenth Circuit. We have previously held that we do not follow the
Tenth Circuit approach to USSG § 2F1.1 used in Santiago. Rather,
our interpretation is that “nothing in § 2F1.1 ... requires the
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defendant be capable of inflicting the loss he intends.” United
States v. Edwards, 303 F.3d 606, 645n.27 (5th Cir. 2002)(citing
United States v. Ismoila, 100 F.3d 380, 396 (5th Cir. 1996)).
Accordingly, the district court did not clearly err in finding that
Messervey intended a loss of $4 million, even if it was not within
his power to achieve such a loss.
B. Organizer of Criminal Activity
In his next point of error Messervey argues that the district
court erred when it found that those Messervey exploited to his
advantage in his fraud schemes were “participants” in the
offenses.5 That designation allowed four offense level points to
be added under § 3B1.1.6 Comment 1 to that section defines a
“participant is a person who is criminally responsible for the
commission of an offense, but need not have been convicted.”
U.S. Sentencing Guidelines Manual § 3B1.1(a), cmt. n.1 (2002).
Messervey argues that because the PSR described these people as
“victims,” they cannot be participants under the terms of § 3B1.1.
We review the district court’s factual findings used for
sentencing for clear error. Ismoila, 100 F.3d at 394. Here no
such error is present. The very section of the PSR Messervey cites
5
Messervey’s accomplices included his former girlfriend Deanna
Robertson, his hairdresser David Mendietta, and friends Brad
Dublon, Larue Hedrick, and Carolyn Coe.
6
USSG § 3B1.1 says that the offense level increases by four if
“the defendant was an organizer or leader of criminal activity that
involved five or more participants or was otherwise extensive.”
U.S. Sentencing Guidelines Manual § 3B1.1(a) (2002).
12
also describes Messervey’s cohorts as “participants” in his
fraudulent schemes. A quick examination of these individuals’
roles confirms this assessment. Mendietta staged a break in and
lied to the police; Dublon aided Messervey in destroying prints;
Hedrick provided an alibi for Messervey during the Mendietta break
in by accompanying him to Corpus Christi; Robertson filed a
fraudulent claim with Farmer’s; Coe lied under oath to having
observed a break-in. These persons were “participants” in
Messervey’s schemes in the true sense of the term. Messervey’s
appeal on this point lacks merit.
C. Upward Departures
Messervey finally argues that the district court erred in
upwardly departing from his sentencing score. The district judge
upwardly departed from the prescribed guideline range of 70 to 87
months to a 220 month sentence. We review a district court’s
upward departure from the sentencing guidelines for an abuse of
discretion. United States v. Nevels, 160 F.3d 226, 229 (5th Cir.
1998). There is no abuse of discretion where the judge both
provides acceptable reasons for the departure, and the degree of
departure is reasonable. Id. Departures from the sentencing
guidelines are allowed only where, considering the guidelines,
policy statements and official commentary, there is an aggravating
or mitigating circumstance of a kind or degree not adequately taken
into account in the guidelines. Koon v. Powell, 518 U.S. 81, 92-93
13
(1996) (citing 18 U.S.C. § 3553(b)).
The district judge offered two reasons for this upward
departure. First, the trial judge cited USSG § 3D1.3, comment 4 as
justifying an upward departure in Messervey’s sentence. That
comment explains that where offenses are grouped together,
sometimes one offense goes completely unconsidered for sentencing
purposes. For example, it notes that where rape occurs with a
robbery, rape forms the base sentencing offense, as the more
serious charge. Because robbery is not an aggravating factor in
the rape sentencing table, the robbery is not weighed when arriving
at a sentence. Thus, the comment explains, a large financial loss
in a robbery accompanying rape might be grounds for an upward
departure. U.S. Sentencing Guidelines Manual § 3D1.3, cmt. n.4
(2002). The district court reasoned this example was applicable
here. It held that the four separate schemes were not accounted
for because adding the value of all four schemes together resulted
in the same penalty as if Messervey had just committed the 1996 art
fraud.7
While that is true, the district court’s analysis
misunderstands the cited comment. In the rape-robbery example the
7
The PSR added the value of all four frauds as follows: $12,600
(pickup truck fraud) + $125,000 (1993 art fraud) + $4,000,000 (1996
art fraud) + $25,000 (victim’s compensation fraud) = $4,162,600.
Because the amount of loss tables in § 2F1.1 add the same offense
level points for schemes in which the loss totals between $2.5
million and $5 million, the same number of offense level points
were added for the four schemes aggregated as for the 1996 art
fraud alone.
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robbery would not be accounted for at all by a sentencing court in
reaching a sentence, hence making an upward departure appropriate.
By contrast, here the pecuniary loss from each of the four frauds
was considered in arriving at the amount of loss figure of §
2F1.1.8 The fact that one scheme was several magnitudes larger
than the other schemes does not change the fact that all the
smaller schemes were included in arriving at the offense total. As
all four schemes were included in the guidelines amount of loss
total, it was an abuse of discretion to upward depart in reliance
on comment 4 to § 3D1.3.
The district judge’s second stated reason for a sentencing
upward departure was the failure of the USSG to adequately account
for Messervey’s exploitation of “vulnerable individuals” as both
accomplices and victims in his schemes. Messervey’s frauds did use
and depend upon help he received from people he manipulated into
helping him. But, two separate provisions accounted for the
presence of multiple vulnerable victims/accomplices in a crime, and
both of these provisions were considered in Messervey’s PSR.
First, USSG § 3B1.1(a) allows for an increase in the offense
level of 4 levels if “the defendant was an organizer or leader of
criminal activity that involved five or more participants or was
otherwise extensive.” U.S. Sentencing Guidelines Manual § 3B1.1(a)
8
The PSR also added two offense level points pursuant to §
2F1.1(b)(2) to reflect the “extensive planning” and “multiple
victims” of Messervey’s frauds.
15
(2002). Messervey’s PSR applied this section, and added four
offense level points to account for the fact that Messervey was a
mastermind of a criminal enterprise that employed several other
people. Second, USSG § 3A1.1(b) allows for a two level increase in
the offense level “if the defendant knew or should have known the
victim of the crime was a vulnerable victim.” U.S. Sentencing
Guidelines Manual § 3A1.1(b) (2002). A vulnerable victim is one
who is “unusually vulnerable due to age, physical or mental
condition, or who is otherwise particularly susceptible to the
criminal conduct.” U.S. Sentencing Guidelines Manual § 3A1.1(b),
cmt. n.2 (2002). Messervey’s PSR applied this section to consider
whether Mendietta, a homosexual, was a vulnerable victim. It
concluded that while Mendietta had been exploited based on his
sexual orientation and mental condition, he did not meet the
requirements for a § 3A1.1(b) sentence enhancement.9
The district judge adopted these factual findings;
nevertheless, he concluded that an upward departure was warranted
because in his opinion the USSG sections dealing with the
exploitation of others for criminal purposes were inadequate. But
where a sentencing factor has been included in the USSG, a
departure is allowed only where there is an aggravating or
9
The PSR did not consider whether the other victims/accomplices,
Robertson, Dublon, Coe or Hedrick, were vulnerable victims. But
neither the reasons given by the district court nor the government
offer any reasons why these persons should have been considered
“vulnerable victims.”
16
mitigating circumstance of a kind or degree not contemplated by the
Guidelines. Koon, 581 U.S. at 92-93. No such circumstances exist
here. There were two provisions of the USSG specifically tailored
to deal with the district court’s concern about the crime as it
related to the participant/victims involved, and these provisions
were applied in the PSR. Nothing about Messervey’s relationship
with the participant/victims was of a “kind or degree” outside the
ambit of these two sections. Accordingly, it was an abuse of
discretion to order an upward departure on these already considered
and weighed factors, and we must vacate appellant’s sentence and
remand this case for re-sentencing by the district court.
IV. Conclusion
As appellant Messervey’s challenges to his conviction lack
merit, his conviction is AFFIRMED. Because the district court
abused its discretion by upwardly departing from the prescribed
USSG sentencing range, however, Messervey’s sentence is VACATED,
and the case is REMANDED for re-sentencing consistent with this
opinion.
AFFIRMED IN PART; VACATED IN PART; and REMANDED.
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