No. 95-1505
United States of America, *
*
Appellee, *
* Appeal from the United States
v. * District Court for the
* Eastern District of Missouri.
John A. Allen, Sr., *
*
Appellant. *
Submitted: January 10, 1996
Filed: February 6, 1996
*
Before BEAM and MORRIS SHEPPARD ARNOLD, Circuit Judges, and KYLE,
District Judge.
MORRIS SHEPPARD ARNOLD, Circuit Judge.
In mid-1994, John Allen was indicted in federal district court
on one count of conspiracy, one count of misuse of a social
security number, and multiple counts of mail fraud, wire fraud, and
money laundering in connection with the establishment of four
companies that collected premiums to pay for health insurance but
in fact failed to provide such insurance. Pursuant to a plea
agreement with the government, Mr. Allen pleaded guilty to three
counts of the indictment and was sentenced in early 1995
*
The HONORABLE RICHARD H. KYLE, United States District
Judge for the District of Minnesota, sitting by
designation.
to 36 months in prison. He appeals his sentence. We affirm the
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judgment of the district court.
I.
The presentence report on Mr. Allen calculated the loss to the
victims to be $2,745,400 (all numbers are rounded) -- premiums of
$2,000,000 and outstanding claims of $745,400. Under the federal
sentencing guidelines, a loss to the victims of more than
$2,500,000 requires an increase in base offense level of 13 levels.
See U.S.S.G. § 2F1.1(b)(1)(N). Taking into account that increase
and various other adjustments not at issue for the purposes of this
opinion, the district court determined that the appropriate
sentencing range for Mr. Allen under the guidelines was between
41 and 51 months (level 22). Responding to a government motion for
departure from the guidelines range based on substantial assistance
to the government by Mr. Allen, however, see U.S.S.G. § 5K1.1(a),
the district court sentenced Mr. Allen to 36 months in prison.
Mr. Allen contends on appeal that he objected to the
calculation of loss to the victims but that the district court
failed to make the findings on that "controverted matter" required
by Fed. R. Crim. P. 32(c)(1). Mr. Allen asserts, therefore, that
his sentence should be vacated and that his case should be remanded
for resentencing. See, e.g., United States v. Furst, 918 F.2d 400,
401, 408 (3d Cir. 1990). The government responds, however, that
Mr. Allen failed to object clearly and specifically enough to the
calculation of loss to the victims and, accordingly, that the
district court was entitled to rely on the figures included in the
presentence report. See, e.g., United States v. Saffeels, 39 F.3d
833, 838 (8th Cir. 1994), and United States v. Toirac, 917 F.2d 11,
13 (8th Cir. 1990).
1
The Honorable Stephen N. Limbaugh, United States District
Judge for the Eastern District of Missouri.
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Mr. Allen filed no written objections with the district court.
At the sentencing hearing, Mr. Allen's lawyer stated that he had
"explained to Mr. Allen some things regarding the determination of
the dollar amount used to reach ... the total offense level" and
that he had "pointed out to Mr. Allen that the amount of money that
had been received by the company is the determiner." The district
court then asked Mr. Allen himself if he had any "changes or
corrections" to the presentence report. Mr. Allen stated that
there was "no mention" of deductions for amounts legitimately paid
out -- for either the few health insurance policies that the
companies in question did buy or the claims that were paid. The
district court asked what those deductions would be. In response,
Mr. Allen said that he was "guessing" but proffered a total
of $132,000.
Subsequently, Mr. Allen said that he had "one other thing" and
stated that he "never received anything" from two of the companies
in question. "That would be my objection," he continued, evidently
concerned about whether the amounts received by those companies
were included in the calculation of loss to the victims that was
used in his presentence report. Those amounts were in fact
included in the loss calculation, according to the government.
That inclusion was proper, as a matter of law. Mr. Allen
stipulated in his plea agreement that he and two co-defendants
formed both of those companies and that he was "to share equally in
the profits" from both of those companies. Under the sentencing
guidelines, the calculation of loss to the victims used in
determining the offense level of an individual defendant who has
participated in a "jointly undertaken criminal activity" is to
include "all reasonably foreseeable acts ... of others ... that
occurred during the commission of the offense of conviction."
See U.S.S.G. § 1B1.3(a)(1)(B) and application note 2,
illustration (c)(2); see also U.S.S.G. § 1B1.1, application
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note 1(l) (definition of "offense" is "the offense of conviction
and all relevant conduct under § 1B1.3"), and U.S.S.G. § 2F1.1,
application note 6 ("cumulative loss produced by a common scheme
... should be used in determining the offense level, regardless of
the number of counts of conviction").
It appears to us that Mr. Allen's second "objection" was
actually an inquiry with respect to a question of law -- i.e.,
whether the amount of loss to the victims, for purposes of
determining his offense level, depended on how much of the proceeds
he personally received. Under the sentencing guidelines, the
answer to that question, in light of the stipulations in
Mr. Allen's plea agreement, was that the amount of money paid by
the victims to any of the four companies in question, plus the
amount of money owed to the victims for outstanding claims -- and
not the amount of money received by Mr. Allen individually -- were
the critical figures. We therefore do not consider that inquiry to
have concerned the type of factual dispute contemplated by Fed. R.
Crim. P. 32(c)(1).
The only "objection" by Mr. Allen of the type contemplated by
the rule was, then, his initial statement that there was "no
mention" of deductions for legitimate expenses incurred by the
companies in question. We assume, without deciding, that that
statement was specific and clear enough, see, e.g., United States
v. Toirac, 917 F.2d at 13, to amount to an objection under Fed. R.
Crim. P. 32(c)(1). Even so, the district court's failure to make
a specific finding with respect to that objection amounted to
harmless error, because a deduction of $132,000 from the previously
calculated figure of $2,745,400 still leaves more than $2,500,000
as the amount of loss. In other words, even if the district court
had considered Mr. Allen's objection and had made a specific
finding favorable to him on that objection, the appropriate
sentencing guidelines range would have been unchanged. Indeed, the
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district court recognized that point, remarking that "accepting
[Mr. Allen's] point of view ... would not alter the ultimate
calculation of the total offense level." Under these
circumstances, we reject Mr. Allen's argument that the district
court's failure explicitly to follow Fed. R. Crim. P. 32(c)(1)
requires a remand for resentencing.
II.
Mr. Allen also argues that the figure of $2,745,400 for the
amount of loss to the victims was not supported by anything other
than the presentence report and, therefore, that it was improper
for the district court to rely on that figure. Mr. Allen would
have a better argument if he had in fact objected to that figure.
What he objected to, however, was that no deductions had been made
for legitimate expenses of the companies in question. He never
contended that the victims had not paid $2,000,000 in premiums or
that the victims did not have $745,400 in outstanding claims.
"Under our cases, a district court is clearly permitted to
accept as true all factual allegations contained in the
[presentence report] that are not specifically objected to by the
parties." United States v. Beatty, 9 F.3d 686, 690 (8th Cir.
1993). The district court was therefore entirely proper in using
the figure of $2,745,400 that was given in the presentence report.
III.
Mr. Allen contends as well that using the figures from the
presentence report violated his confrontation clause rights under
the sixth amendment. That argument is foreclosed by our ruling in
United States v. Wise, 976 F.2d 393, 401 (8th Cir. 1992) (en banc),
cert. denied, 113 S. Ct. 1592 (1993).
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IV.
The indictment charged Mr. Allen with twelve counts of mail
fraud, two counts of wire fraud, and one count of conspiracy, all
derived from his activities with the companies in question. Under
his plea agreement with the government, Mr. Allen pleaded guilty
only to one count of mail fraud in relation to those activities,
and the government stipulated that it would not prosecute him "for
offenses ... which are related to or arose out of the operation of"
those companies. Mr. Allen now contends that the government
breached that agreement by allowing the allegations of the other
counts to be considered as relevant conduct in calculating the
amount of loss to the victims.
Mr. Allen himself stipulated, however, that the offenses to
which he pleaded guilty were "subject to" the sentencing
guidelines. Those guidelines require that all relevant conduct be
considered, see U.S.S.G. § 1B1.1, application note 1(l),
"regardless of the number of counts of conviction," see U.S.S.G.
§ 2F1.1, application note 6. The sentencing court, moreover, is
not bound by the stipulations in a plea agreement in "determin[ing]
the facts relevant to sentencing." See U.S.S.G. § 6B1.4(d);
see also U.S.S.G. § 6B1.2(a) ("a plea agreement that includes
the dismissal of a charge or a plea agreement not to pursue a
potential charge shall not preclude the conduct underlying such
charge from being considered under the [sentencing guidelines]
provisions" related to relevant conduct). We therefore reject
Mr. Allen's argument that the government breached its plea
agreement with him.
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V.
For the reasons stated, we affirm the judgment of the district
court.
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
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