United States Court of Appeals
Fifth Circuit
F I L E D
In the December 23, 2005
United States Court of Appeals Charles R. Fulbruge III
for the Fifth Circuit Clerk
_______________
m 04-30037
_______________
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
VERSUS
JERRY W. FREEMAN,
Defendant-Appellant.
_________________________
Appeal from the United States District Court
for the Eastern District of Louisiana
______________________________
Before JOLLY, SMITH, and DEMOSS, affirm the conviction but vacate and remand
Circuit Judges. for resentencing.
JERRY E. SMITH, Circuit Judge: I.
Freeman was indicted alongside co-defen-
Jerry Freeman challenges his conviction of dant Motillal Sudeen on 1 count of conspiracy
and sentencing for conspiracy, wire fraud, in violation of 18 U.S.C. § 371, 14 counts of
travel fraud, and money laundering. Although wire fraud in violation of 18 U.S.C. § 1343,
the district court correctly decided most of the 1 count of travel fraud in violation of 18
issues on appeal, it did commit reversible error U.S.C. § 2314, and 22 counts of money laun-
under United States v. Booker, 543 U.S. 220, dering in violation of 18 U.S.C. § 1957. Free-
125 S. Ct. 738 (2005). For this reason, we man worked at Sudeen’s pharmacy and as-
sisted Sudeen in various business ventures un- to use the credit as collateral for loans, the
related to pharmaceuticals. proceeds of which would also be invested, and
they represented that a fictitious minimum
The government presented evidence that investment was required to participate.
Sudeen had created a large Ponzi scheme that
involved telling investors that he would invest Continued participation was ensured by
their funds in high yield programs or “private lulling payments, encouraging investors to roll
placement secured trading programs” involv- over their investments rather than seeking
ing overseas trades of financial instruments. immediate returns, and by reassuring investors
He told investors they would receive a higher- that the funds were safely invested and soon
than-market rate of return and that their princi- would result in returns. When investors de-
pal would remain safe, exposed to little or no manded proceeds, the defendants would claim
risk, and would be returned on the expiration that the profits could not be paid because the
of the investment returns. He represented that investors had failed to comply with false re-
the trading programs involved highly rated quirements, that the profits were tied up by the
banks, were monitored by the federal govern- federal government, or that they could not be
ment, and would fund humanitarian projects in liquidated from overseas investments.
developing countries. He assured investors
that he had earned profits for himself and The government presented evidence that
others by making similar investments. The the defendants were involved in another fraud-
funds, however, were never invested as prom- ulent Ponzi scheme involving the trade of in-
ised, but instead were used for personal enric- sulin contracts, although they were not indict-
hment and to make “lulling payments” to prior ed for that scheme. Freeman was involved in
investors to make them believe that their initial the insulin contracts by giving the investors
investments were profitable.1 checks as initial, false profit returns; meeting
with investors to encourage and sign contracts
Sudeen and Freeman increased the appear- related to their continued participation in the
ance of legitimacy and safety of the invest- scheme; and assuring investors that “every-
ments by giving investors bogus “Private thing is legal.” When one investor told Free-
Placement Agreements” or “Joint Venture man she wanted to withdraw money, Freeman
Agreements,” guarantees and promissory gave her three checks totaling $10,000 and
notes. They also told investors that their funds informed her that the remainder of her money
were guaranteed by Sudeen’s personal wealth. had “two more banks to clear” before being
They instructed investors to purchase Certifi- returned. The money invested for insulin trade
cates of Deposit from banks to allow Sudeen was co-mingled with other investment funds
gained by the defendants’ various fraudulent
schemes, and the funds received from insulin
1
More than fifty people participated in the investors were used to make lulling payments.
high-yield trading program, and the victims named
in the indictment gave over $17 million to the de- Although the defendants were indicted to-
fendants. The funds were used to make lulling
gether, the court severed the trials. Freeman
payments and to pay Freeman’s salary, remodel
was convicted on all counts and was sentenced
Sudeen’s home, support Sudeen’s wife and chil-
dren, purchase property including luxury auto-
to 108 months’ imprisonment.
mobiles, and to make credit card payments.
2
II. gled and used to make lulling payments to in-
Freeman argues that the district court erred vestors from both schemes.3
in admitting evidence regarding the insulin
investment scheme; he claims the evidence was III.
not intrinsic to the offenses enumerated in the Freeman contends the insulin scheme evi-
indictment and also did not satisfy Federal dence constituted an impermissible construc-
Rules of Evidence 403 and 404(b). Freeman tive amendment of his indictment, or alterna-
properly objected on this ground; we review tively a fatal variance. Although Freeman
the admission of the evidence for abuse of broadly outlines the elements of each claim, he
discretion. See United States v. Hicks, 389 does not specifically delineate how the intro-
F.3d 514, 522 (5th Cir. 2004). duction of the evidence modified an essential
element of the offense so as to constitute a
Extrinsic evidence is not admissible to constructive amendment. Therefore, the claim
prove propensity to commit the charged crime, of constructive amendment is waived for
see rule 404(a), but may be admissible for inadequate briefing; we proceed to consider
other purposes enumerated under rule 404(b). only Freeman’s claim that there was a fatal
Intrinsic evidence is generally admissible, and variance.
its admission is not subject to rule 404(b). See
United States v. Coleman, 78 F.3d 154, 156 A variance occurs when the charging terms
(5th Cir. 1996). Evidence of acts other than of an indictment remain unaltered but the
conduct related to the offense is intrinsic evidence at trial proves facts other than those
“when the evidence of the other act and the alleged. See United States v. Puig-Infante, 19
evidence of the crime charged are ‘inextricably F.3d 929, 935 (5th Cir. 1994). A variance is
intertwined’ or both acts are part of a ‘single reviewed for harmless error; “[a] defendant
criminal episode’ or the other acts were ‘neces- cannot prevail on such a claim unless he dem-
sary preliminaries’ to the crime charged.” onstrates that the variance was material and
United States v. Williams, 900 F.2d 823, 825 prejudiced his substantial rights.” United
(5th Cir. 1990) (internal citations omitted).2 States v. Guidry, 406 F.3d 314, 322 (5th Cir.),
cert. denied, 126 S. Ct. 190 (2005). “As long
The district court did not abuse its discre- as the defendant receives notice and is not sub-
tion in admitting the evidence regarding the ject to the risk of double jeopardy, his sub-
insulin investment scheme, because it was in- stantial rights are not affected.” Id. (quoting
trinsic to the charged offense, involving the United States v. Mikolajczyk, 137 F.3d 237,
high yield investment scheme. The evidence 243 (5th Cir. 1998)).
regarding the insulin investors was inexorably
intertwined with the charged scheme as “part As we have said, the insulin investment
of a single criminal episode,” id.: The un- scheme evidence was intrinsic to the charged
charged offense arose out of the same series of
transactions, because the funds were co-min- 3
United States v. Dula, 989 F.2d 772, 777 (5th
Cir. 1993) (“ Evidence of an uncharged offense
arising out of the same transaction or series of
2
Such evidence is generally admissible to transactions as the charged offense is not an ‘extrin-
“complete the story of the crime.” United States v. sic’ offense within the meaning of rule 404(b), and
Walters, 351 F.3d 159, 166 n.2 (5th Cir. 2003). is therefore not barred by this rule.”)
3
conspiracy offense, because the schemes were tion. See United States v. Honer, 225 F.3d
inextricably intertwined. Because the insulin 549, 555 (5th Cir. 2000). “[A] new trial is
investment scheme evidence proved facts that required only if there is a significant possibility
were alleged in the indictment, there was no that the prejudicial evidence had a substantial
variance. impact upon the jury verdict, viewed in light of
the entire record.” United States v. Paul, 142
IV. F.3d 836, 844 (5th Cir. 1998). “In determin-
Freeman claims the district court erred in ing whether a prosecutor’s remarks constitute
denying his motion for a mistrial made after reversible error, [the court] consider[s] the
the government had elicited testimony barred magnitude of the prejudicial effect of the
by a ruling of the district court. Freeman tes- statements, the efficacy of any cautionary
tified on direct examination that he assisted instruction, and the strength of the evidence of
Sudeen in business ventures relating to a failed guilt.” United States v. Robles-Vertiz, 155
attempt to import shrimp from Guyana. On F.3d 725, 731 (5th Cir. 1998).
cross-examination, he denied altering an in-
voice to help Sudeen receive more money We dismiss Freeman’s argument because he
from a lawsuit filed against the shrimp sup- has failed to explain how the error would have
plier. a substantial prejudicial impact on the verdict.
Although his theory is completely conclusion-
The government called a witness who had al, the government correctly points out that
worked with the defendants when they were even if the prosecutor asked an improper ques-
involved in importing shrimp; he testified that tion, prejudice was minimal; the question was
Sudeen wanted to strengthen the lawsuit and never answered by the witness. Moreover, the
asked him to increase the amount of the origi- curative instruction was sufficiently plain and
nal invoice. Freeman objected to this testi- broad to prevent prejudice. The district court
mony on the ground that it was impermissibly did not abuse its discretion in denying a mis-
offered to show his involvement in other bad trial.
acts unrelated to the indictment. The district
court sustained the objection. V.
Freeman avers that the evidence was insuf-
Despite the court’s admonition, the govern- ficient to support a conviction. “In resolving
ment proceeded to show the witness an altered a sufficiency of the evidence claim, we must
invoice and asked whether he had a belief as to decide whether a rational trier of fact could
who had altered the document and sent it in have found that each element of the charged
connection with the lawsuit. Freeman ob- criminal offense was proven beyond a reason-
jected again and moved for a mistrial. The able doubt.”4 We consider all the evidence in
court granted the objection but denied the mo- a light most favorable to the government,
tion, and instructed the jury to disregard any drawing all inferences and credibility choices in
specific reference to the shrimp material.
Freeman argues that he was entitled to a 4
United States v. Arnold, 416 F.3d 349, 358
mistrial because he contends the curative in-
(5th Cir.), cert. denied, 126 S. Ct. 504 (2005); see
struction was insufficient to cure any preju- also United States v. Ortega Reyna, 148 F.3d 540,
dice. We review this claim for abuse of discre- 543 (5th Cir. 1998).
4
its favor. Id. Freeman challenges t he suffi- There is a wealth of evidence from which a
ciency of the evidence for the conspiracy reasonable jury could conclude that the agree-
count, the travel fraud count, one count of ment element of the conspiracy charge was
wire fraud, and one count of money launder- satisfied,6 including Freeman’s admission that
ing. he was aware that the investors’ funds were
being used for items unrelated to the invest-
A. ment program. This, combined with evidence
Count one charged Freeman with conspir- that Freeman was intimately familiar with
acy to violate wire fraud, travel fraud, and Sudeen’s business from being his only em-
money laundering statutes in violation of 18 ployee for many years, was sufficient to es-
U.S.C. § 371. To establish a violation of tablish a conspiratorial agreement and to sup-
§ 371, the government must prove: “(1) an port Freeman’s conviction under § 371.
agreement between two or more person to
pursue an unlawful objective; (2) the defen- B.
dant’s knowledge of the unlawful objective Freeman urges that the evidence was insuf-
and voluntary agreement to join the conspir- ficient to support his conviction of aiding and
acy; and (3) an overt act by one or more of the abetting travel fraud under § 2314. The travel
members of the conspiracy in furtherance of fraud count of the indictment specifically
the objective of the conspiracy.” United States charged Freeman with aiding and abetting Su-
v. Peterson, 244 F.3d 385, 389 (5th Cir. deen in inducing a particular investor, Joseph
2001). D’Amico, to travel from New Orleans to Pop-
larville, Mississippi, as part of the fraudulent
Freeman claims the evidence was insuffi- high yield investment scheme. To prove travel
cient to pro ve the first elementSSwhether a fraud, the government must demonstrate “(1)
conspiratorial agreement existed. Freeman that the defendant devised a scheme intending
suggests that the evidence was deficient be- to defraud a victim of money or property of a
cause there was no direct evidence of an minimum value of $5,000, and (2) that as a
agreement, because no testimony was intro- result of this scheme, a victim was induced to
duced from any alleged co-conspirator. This travel in interstate commerce.” United States
argument is without merit, because it is well- v. Richards, 204 F.3d 177, 206 (5th Cir. 2000)
settled that the government does not need to (internal citations omitted). To show aiding
show that the conspiratorial agreement was and abetting liability, the government had to
explicit or formalSSproof of a tacit agreement
is sufficient.5
6
Evidence indicated that Freeman was person-
ally involved in many of the aspects of the scheme,
including typing and witnessing many of the fraud-
5
United States v. Westbrook; 119 F.3d 1176, ulent agreements, maintaining financial records of
1189 (5th Cir. 1997) (“To be a conspiracy, an ex- the funds, and transferring funds used in the
press, explicit agreement is not required; a tacit scheme. He also made misrepresentations to the
agreement is enough.”); United States v. Robert- investors, including claims that they could not
son, 659 F.2d 652, 656 (Former 5th Cir. Oct. receive their funds promptly for false reasons and
1981) (“One may be convicted of conspiracy even reports that the funds they did receive in return
though the Government fails to prove an explicit or were investment profits, when in fact they were
formal agreement to establish the conspiracy.”). funds from other investors.
5
prove that Freeman knowingly and deliberately United States v. Dupre, 117 F.3d 810, 821
associated with a criminal venture, participated (5th Cir. 1997).
in the venture, and sought by his actions to
make it succeed. See United States v. Polk, Freeman argues that the evidence was de-
118 F.3d 286, 295 (5th Cir. 1997). ficient because Lukaszuk was not a witness at
trial; Freeman claims the record is otherwise
Freeman claims there was no evidence that devoid of evidence that false representations
he was involved in any scheme to defraud were made to Lukaszuk. This is incorrect;
D’Amico, but this contention is without merit. Lukaszuk’s testimony was not necessary, be-
Evidence demonstrated that Freeman was per- cause Freeman typed Lukaszuk’s agreement;
sonally involved7 and was sufficient for a rea- Lukaszuk wired money to Freeman and Su-
sonable jury to find Freeman guilty on the deen that was not invested in high yield invest-
travel fraud count. ments as promised; and Freeman made lulling
payments to Lukaszuk, as exhibited by re-
C. quests for wire transfers that Freeman signed.
Freeman challenges his conviction on one Moreover, a government expert traced a
of the wire fraud counts and one of the money $10,500 personal expenditure made by the
laundering counts, both dealing with a particu- defendants from Lukaszuk’s funds. The evi-
lar victim-investor, Krystoff Lukaszuk. To dence was sufficient to allow a reasonable jury
prove wire fraud in violation of § 1343, the to find Freeman guilty of both the wire fraud
government had to show that “a defendant and money laundering counts dealing with
knowingly participated in a scheme to defraud, Lukaszuk.
that interstate wire communications were used
to further the scheme, and that the defendant[] VI.
intended that some harm result from the Freeman posits that the district court gave
fraud.” Richards, 204 F.3d at 207. To prove improper jury instructions. A properly object-
the money laundering count under § 1957, the ed-to instruction is reviewed for abuse of dis-
government had to prove that Freeman know- cretion. See United States v. Daniels, 281
ingly engaged in a monetary transaction in F.3d 168, 183 (5th Cir. 2002). We consider
criminally derived property of a value greater whether the instruction, taken as a whole, “is
than $10,000 and that the property was de- a correct statement of the law and whether it
rived from specified unlawful activity. See clearly instructs jurors as to the principles of
law applicable to the factual issues confronting
them.” Id.
7
D’Amico testified that he gave Sudeen a $2
million check for investment in the high yield in- Freeman asserts that the district court com-
vestment program, and Freeman admitted that he mitted reversible error in instructing the jury
typed and signed the private agreement that lured that he acted “knowingly” if he acted with
his investment. D’Amico also testified that Free- deliberate ignorance or willful blindness, be-
man attended the meeting at which Sudeen ex- cause, he claims, the instruction was not sup-
plained the structure of the investment. D’Amico’s
ported by the evidence. The deliberate indif-
check was deposited in one of Sudeen’s accounts
ference charge permits “the jury to convict
for which Freeman was a signatory, the funds of
which were traced to lulling payments that Free-
without finding that the defendant was aware
man made to other investors. of the existence of illegal conduct.” United
6
States v. Moreno, 185 F.3d 465, 476 (5th Cir. volved in this case. Although there is no evi-
1999). dence that Freeman took any affirmative acts
to avoid knowledge, we have previously rec-
We have previously upheld the deliberate ognized that where the likelihood of criminal
indifference instruction, provided it has the wrongdoing is so high, and the circumstances
required factual basis. See id. The proper surrounding a defendant’s activities are ex-
factual basis is present if the record supports tremely suspicious, a failure to conduct further
inferences that “(1) the defendant was subjec- inquiry justifies an inference of deliberate in-
tively aware of a high probability of the exis- difference.8 Here, Freeman was intimately
tence of illegal conduct; and (2) the defendant involved in the finances of Sudeen’s operations
purposely contrived to avoid learning of the and should have made an inquiry into the
illegal conduct.” United States v. Scott, 159 legitimacy of the transactions based on the im-
F.3d 916, 922 (5th Cir. 1998). In determining mense number suspicious circumstances previ-
whether the evidence supports the charge, the ously described.
evidence and all reasonable inferences that may
be drawn from it are viewed in the light most Finally, Freeman argues that the district
favorable to the government. See United court erred by giving the deliberate indiffer-
States v. Sharpe, 193 F.3d 852, 871 (5th Cir. ence instruction, where the government pro-
1999). ceeded on a theory of actual knowledge at
trial. This argument is without meritSSwe
First, there is a wealth of evidence that have previously held that a deliberate indiff-
supports an inference that Freeman was sub- erence instruction is not inconsistent with
jectively aware of a high probability of the
existence of illegal conduct. He was involved
in typing and witnessing the agreements with 8
the investors that promised exorbitant returns, United States v. Faulkner, 17 F.3d 745, 766
and he was a signatory on the accounts into (5th Cir. 1994) (“We have held that in some cases
the likelihood of criminal wrongdoing is so high,
which the investments were deposited. Al-
and the circumstance surrounding a defendant’s
though he was aware of the arrangements, he activities and cohorts are so suspicious, that a fail-
wired funds into the account and checked on ure to conduct further inquiry or inspection can
the balances on a daily basis and wrote checks justify the inclusion of the deliberate ignorance in-
from them for items entirely unrelated to in- struction.”) (internal citations omitted); see United
vestments. Moreover, Freeman maintained States v. Gray, 105 F.3d 956, 967 (5th Cir. 1997)
financial records that reflected that investor (holding that the deliberate indifference instruction
funds were used to pay Sudeen’s corporate was appropriate where the defendant handled calls
and personal expenses and to make payments from irate loan applicants who received no money,
to other investors. Freeman was aware that but made only made a trivial attempt to discern
Sudeen had been accused of fraud by several whether anything was wrong); see also United
investors and was being investigated by the States v. Stouffer, 986 F.2d 916, 925 (5th Cir.
FBI. 1993) (holding that the deliberate indifference in-
struction was appropriate where corporate officer
used investment company funds for personal pur-
Next, there is sufficient evidence to support
poses, “blindly accept[ing]” co-defendant’s rep-
an inference that Freeman purposely contrived resentation that the company’s charter authorized
to avoid learning of the illegal conduct in- the expenditures).
7
evidence of actual knowledge.9 The district defendant or proved to the jury beyond a
court did not commit reversible error in in- reasonable doubt.” Booker, 543 U.S. at ___,
structing the jury on deliberate indifference. 125 S. Ct. at 756. Freeman asserts that the
district court’s factual determination that the
VII. conspiracy extended past the amendment of
Freeman claims the district court improp- the guidelines violated his Sixth Amendment
erly used the 2002 edition of the sentencing rights under Booker.
guidelines instead of the 2000 edition.10 Al-
though we discuss this issue as part of our 1.
“Booker error” analysis, the objection actually The government, however, contends that
subdivides into two distinct inquiries, only one Freeman did not properly preserve his Booker
of which Booker technically controls: objection and that we should thus review his
(1) whether the use of the 2002 edition con- challenge for plain error.11 The government is
stitutes an independent Booker error and incorrect.
(2) whether the use of the 2002 edition vio-
lated the Ex Post Facto Clause (a claim we At sentencing, Freeman argued that where,
analyze the same as we would have before “like Apprendi,” the factual determination of
Booker). when the conspiracy existed has the “practical
effect” of increasing the maximum for the of-
A. fense, it should be looked at as an issue that
Freeman claims his sentence is infirm under the “jury has to decide.” Despite the fact that
Booker, in which the Court made plain that he did not express reliance on Apprendi (ear-
under the Sixth Amendment, “[a]ny fact (other lier, counsel stated that he could “not in good
than a prior conviction) which is necessary to faith argue Apprendi fits [the] case”), and al-
support a sentence exceeding the maximum though he never explicitly mentioned the Sixth
authorized by the facts established by a plea of Amendment or Blakely before the district
guilty or a jury verdict must be admitted by the court, his objections adequately apprised the
court that he was raising a Sixth Amendment
violation to the guidelines edition issue based
9 on the ground that the government did not
United States v. Saucedo-Munoz, 307 F.3d
344, 349 (5th Cir. 2002) (noting that relevant cases prove to the jury beyond a reasonable doubt
do not “suggest[] that a deliberate ignorance in- that the conspiracy extended past November 1,
struction is improper where evidence may be con- 2001.12
strued as showing either actual knowledge or con-
trivance to avoid learning the truth. Instead, [the]
11
precedent suggests that a deliberate ignorance in- See Guidry, 404 F.3d at 322 (reviewing
struction may be given alongside evidence of actual Booker error under plain error standard where de-
knowledge.”). fendant failed to object on the appropriate Sixth
Amendment grounds at sentencing).
10
The government posits that the court actually
12
used the 2003 version, which was in effect on the This case is analogous to the situation we
date of sentencing. The difference is irrelevant, confronted in United States v. Akpan, 407 F.3d
because § 2S1.1 is the same in both. Use of the 360, 375 (5th Cir. 2005), in which the sentencing
2000 version, as urged, would have yielded a sub- range was increased based on the district court’s
stantially lower range. (continued...)
8
2. or about August 2001.”
a.
On the merits of the issue, Freeman also is In its brief on appeal, the government, in an
correct. Freeman asserts that, under Booker, effort to avoid use of the 2000 guidelines,
the district court cannot constitutionally have points to proof of several acts occurring on or
made factual determinations regarding the end- after November 1, 2001. 13 The government
date of the conspiracy. Freeman neither ad-
mitted that end-date, nor was it found by a
13
jury beyond a reasonable doubt. Nevertheless, According to the government’s brief,
that finding plainly increased his sentencing
range. Freeman continued to receive biweekly salary
payments of $1,450 through January 17, 2002,
There is no dispute that if the conspiracy and $9,000 was wired to co-conspirator Walter
Lauren at an account in Switzerland as late as
was proven to extend to a date on or after No-
February 27, 2002. Mortgage payments on the
vember 1, 2001, a set of guidelines later than Poplarville property using funds from investors
the 2000 version would apply (in an advisory were made until January 15, 2002. In addition,
capacity, of course, in the wake of Booker). lulling payments of $10,000, $2,000, and
The indictment states that “[b]eginning in or $2,500 were made to investors Frank Gunn,
about March 1997, and continuing to the pres- Kenneth Breaux and Sheran Frickey, respec-
ent [meaning February 28, 2002], . . . the de- tively, on December 12, 2001. In November
fendants . . . did knowingly and willfully . . . 2001, Sudeen promised that he would give a
conspire . . . .” The indictment charges the bank guarantee to investor Mattias Baumeler.
overt acts under the conspiracy with specifi- In February 2002 Baumeler met with Sudeen in
city; the latest such charged act is Sudeen’s Switzerland, and Sudeen promised that he
promise to pay a particular investor additional would remit all overdue profits within two
money, an act alleged to have occurred “[i]n weeks.
Moreover, Alice Celestin testified at trial and
sentencing that every 120 days she and her hus-
12
(...continued) band “rolled over” their principal and purported
determination that the range of financial loss was interest payments into a new contract. When
over one million dollars. We found that defendant she met with Freeman on July 1, 2001, and
had preserved his objection on Booker grounds signed a fifth contract, she advised him that she
because he repeatedly objected to the court’s deter- was going to need $54,000 back in November.
mination of the amount of financial loss on the When she didn’t receive the money, she tele-
ground that the “figure had not been proven at phoned Freeman frequently. In December 2001
trial.” Id. at 376. We concluded that “[a]lthough Freeman called her and said that he had both
[the defendant] never explicitly mentioned the Sixth good news and bad news: she was getting
Amendment, Apprendi, or Blakely until his Rule money, but it was only $10,000. They met the
28(j) letter, we are satisfied that his objection next day and he gave her three separate checks
adequately apprised the district court that [the totaling $10,000. She testified that at that time
defendant] was raising a Sixth Amendment object- she still believed that she had funds invested in
ion to the loss calculation because the government insulin. She continued calling Freeman and
did not prove to the jury beyond a reasonable doubt during their last conversation in February 2002
that the loss was between five to ten million dol- he said that her funds had “two more banks to
lars.” Id. (continued...)
9
also accurately points to the fact that at sen- Booker prohibits: The
tencing, the district court made a finding that
the conspiracy continued past November 1, actual sentence . . . was . . . longer than the
2001. The flaw in the government’s position, Guidelines range supported by the jury ver-
however, is that the procedure it correctly dict alone. To reach this sentence, the
recounts is the very essence of a Booker viola- judge found facts beyond those found by
tion. the jury . . . . ‘[T]he jury’s verdict alone
does not authorize the sentence. The judge
The jury was charged in relevant part as acquires that authority only upon finding
follows: some additional fact’ [quoting Blakely v.
Washington, 542 U.S. 296, 305 (2004)].
It is not essential that the Government
proved that the conspiracy started and end- Booker, 543 U.S. at ___, 125 S. Ct. at 751.
ed on those specific dates [i.e., March 1997
through February 2002]. Indeed it is suffi- In short, the indictment charged no specific
cient if you find that in fact a conspiracy acts after August 2001, and the jury was told
was formed and that it existed for some it could find defendants guilty without finding
time within the period set forth in the In- any overt acts on or after November 1, 2001.
dictment and that at least one overt act was There is no basis on which, in the wake of
committed to further the conspiracy within Booker, we can infer that any such acts indeed
that period of time. occurred, i.e., that the jury, if asked, would
have found them beyond a reasonable doubt.15
Accordingly, the fact of conviction does not
necessarily establish that the jury found the
14
existence of any overt acts on or after Novem- (...continued)
ber 1, 2001. It was only the district court, and infer that the jury made any such finding, much
not the jury, that found that the conspiracy less that it did so beyond a reasonable doubt.
continued beyond the trigger date for the post- 15
It is true that under the law of this circuit,
2000 guidelines.14 This is specifically what “[o]rdinarily, a defendant is presumed to continue
involvement in a conspiracy unless that defendant
makes a ‘substantial’ affirmative showing of with-
13 drawal, abandonment, or defeat of the conspirato-
(...continued)
clear.” Freeman’s misrepresentations plainly rial purpose.” United States v. Puig-Infante, 19
lulled Mrs. Celestin into the continued belief F.3d 929, 945 (5th Cir. 1994) (citation and internal
that her funds were safely invested and that the quotation marks omitted). Accord United States v.
promises made at the time of her initial invest- Schorovsky, 202 F.3d 727, 729 (5th Cir. 2000).
ment would be fulfilled. These authorities, although sound, address a
situation entirely different from the one presented
(Record citations and footnote omitted.) here; they involve multi-person conspiracies in
which the defendant claims he tried to withdraw
14
The government relies entirely on the fact that from the conspiracy that was continued by his co-
the district court found that the conspiracy contin- conspirators. Here, there were no acts found by a
ued past November 1, 2001. At no point does the jury after the trigger date, so there is no jury-found
government even attempt to argue that we may conspiracy at all that existed on or after that date.
(continued...) (continued...)
10
b.
Because Freeman’s sentence is infected B.
with Booker error, and he properly preserved We do not reach Freeman’s ex post facto
his objection, we must vacate the sentence and claim. Under Akpan, id. at 360 n.2, we have
remand for resentencing unless we determine the authority to leave to the district court the
that the error was harmless under Federal Rule discretion to consider this argument as long as
of Civil Procedure 52(a). See United States v. we have already determined there was a re-
Mares, 402 F.3d 511, 520 n.9 (5th Cir.), cert. versible Booker violation
denied, 126 S. Ct. 43 (2005). “Harmless error
is ‘any defect, irregularity, or variance that In summary, the judgment of conviction is
does not affect substantial rights of the defen- AFFIRMED. The judgment of sentence is
dant,’ and ‘arises when the mistake fails to VACATED and REMANDED for further
prejudice the defendant.’”16 Under this stan- proceedings in accordance with this opinion.
dard the government must demonstrate, be-
yond a reasonable doubt, that the error did not
contribute to the sentence that the defendant
received. See United States v. Olano, 507
U.S. 725, 734 (1993).
The government does not meet this burden.
It points to nothing that would show beyond a
reasonable doubt that the court would have
imposed the same sentence under an advisory
guidelines regime. See Akpan, 407 F.3d
at 377.17
15
(...continued)
In other words, those authorities demonstrate
that the absence of an overt withdrawal can extend
the operative dates of an alleged withdrawing de-
fendant’s vicarious liability to the end of the con-
spiracy. Those authorities do not suggest, how-
ever, that the absence of an overt withdrawal ex-
tends the length of the conspiracy itself.
16
Akpan, 407 F.3d at 376-77 (quoting rule
52(a); United States v. Munoz, 150 F.3d 401, 413
(5th Cir. 1998)).
17
Without the factual finding made by the dis-
trict c ourt, it would have been required to apply
the 2000 edition of the guidelines manual, which
would have resulted in an offense level of 26,
17
rather than the level of 31 that was reached using (...continued)
(continued...) the 2002 edition.
11
E. GRADY JOLLY, Circuit Judge, dissenting in part:
I respectfully dissent from the majority’s finding of Booker
error based on the district court’s application of the 2002 version
of the Guidelines. I would affirm Freeman’s sentence: No Booker
error exists because whether the conspiracy continued until the
effective date of the 2002 Guidelines is in this case a question of
law, not a question of fact.
The Guidelines provide that the court apply the version of the
Guidelines in effect on the date that the defendant is sentenced;
if such use implicates the Ex Post Facto clause of the Constitu-
tion, the court is directed to apply the version in effect on the
date the offense of conviction was committed. USSG § 1B1.11.
Because the 2002 Guidelines became effective on November 1, 2001,
the proper inquiry in this case is whether the offense of convic-
tion, the criminal conspiracy, was committed before, on or after,
November 1, 2001.
The indictment filed against Freeman on February 28, 2002 alleged
a conspiracy “[b]eginning in or about March 1997, and continuing to
the present. . . .” Thus, the indictment clearly alleged that the
offense of conviction was committed when the 2002 Guidelines
applied. The jury returned a general verdict finding Freeman
guilty of the offense charged in the indictment. I would hold that
the jury’s general verdict against Freeman on the count alleged in
the indictment is sufficient to affirm the district court’s
sentence. No Booker error exists because Freeman was sentenced on
12
the jury’s finding that he was guilty of participating in a
criminal conspiracy that continued until at least February 28,
2002.
The majority, however, relies on the jury instructions to
conclude that the jury’s verdict is insufficient to establish that
the conspiracy continued past the effective date of the 2002
Guidelines. The jury was instructed in relevant part:
It is not essential that the Government proved that the
conspiracy started and ended on those specific dates.
Indeed it is sufficient if you find that in fact a
conspiracy was formed and that it existed for some time
within the period set forth in the Indictment and that at
least one overt act was committed to further the conspir-
acy within that period of time.
Such an instruction, according to the majority, did not require
that the jury find the end date of the conspiracy beyond a
reasonable doubt. The majority further reads this instruction to
mean that the fact of conviction does not necessarily establish
that the jury found the commission of any overt acts on or after
November 1, 2001.18 Panel Opinion at __. Assuming that the majority is co
rrect , I cannot
agree wit h the majority’s conclusion that the district court must have found facts in order to
determine that the conspiracy continued after November 1, 2001, resulting in Booker error. Panel
Opinion at __.
As a matter of law, a conspiracy continues until the evidence affirmatively shows that the
18
In fact, the jury instructions do not require that the jury find any specific date for any overt act. The
majority’s reliance on the jury instruction to explain that the jury could not have found an overt act to have
occurred after November 1, 2001 is misplaced. Because the jury returned a general verdict, we do not know
whether the jury may have relied on an unalleged overt act not appearing in the indictment.
13
13
conspirators terminate the alleged conspiracy, or with respect to conspirators individually, until the
conspirators withdraw.19 The unchallenged affirmative evidence establishes that the defendant’s
scheme and the purposes underlying the scheme continued well past November 1, 2001.
Furthermore, with respect to the defendant, “[a] defendant is presumed to continue involvement in
a conspiracy unless she makes a ‘substantial affirmative showing of withdrawal, abandonment, or
defeat of a conspiratorial purpose.’” United States v. Schorovsky, 202 F.3d 727, 729 (5th Cir. 2000)
(quoting United States v. Puig-Infante, 19 F.3d 929, 945 (5th Cir. 1994)). None of these events ever
occurred before the return of the indictment. “To establish withdrawal a defendant bears the burden
of demonstrating affirmative acts inconsistent with the object of the conspiracy that are communi-
cated in a manner reasonably calculated to reach conspirators.” Id. Freeman never claimed that he
withdrew from the conspiracy. As such, his guilt of engaging in a criminal conspiracy continued as
a matter of law through the time of the indictment. The district court , therefore, did not commit
19
See 4 WHARTON'S CRIMINAL LAW § 688 (15th ed.) (“A conspiracy is terminated when its purpose has
been accomplished, i.e., the target offense has been committed, or when the conspirators agree to abandon their
criminal purpose; thereafter, no act or declaration of a former conspirator can be attributed to another.”); see
also United States v. Mayes, 512 F.2d 637, 642-43 (6th Cir. 1975) (“A conspiracy is completed when the
intended purpose of the conspiracy is accomplished. But where a conspiracy contemplates a continuity of
purpose and continued performance of acts, it is presumed to exist until there has been an affirmative showing
that it has terminated[.]”).
Further, as Judge Jones recently noted in United States v. Olis,
[t]his court has held that conspiracy “is a continuing offense” and that “[s]o
long as there is evidence that the conspiracy continued after the effective date
of the [amendments to the] guidelines, the Ex Post Facto Clause is not
violated.” Moreover, unless a conspirator effectively withdraws from the
conspiracy, he is to be sentenced under the amendments to the guidelines,
even if he did not commit an act in furtherance of the conspiracy after the
date of the new guidelines[.]
F.3d , No. 04-20322, 2005 WL 2842077 at *4 (5th Cir. Oct. 31, 2005) (second and third alterations in
original) (citation omitted) (quoting United States v. Buckhalter, 986 F.2d 875, 880 (5th Cir. 1993)).
14
14
Booker error by concluding that the conspiracy continued through the effective date of the 2002
Guidelines.
For the foregoing reasons, I would affirm Freeman’s sentence20 and, for that reason, I respectfully
dissent.
20
The real question at issue here is whether Freeman’s sentence under the 2002 Guidelines violates the Ex
Post Facto clause of the Constitution. The Sixth Amendment is only incidental to that question, implicated only
if we determine that the sentence violates the Ex Post Facto clause. Because I would find, as explained supra,
that the offense continued past the effective date of the 2002 version of the Guidelines, the Ex Post Facto clause
of the Constitution is not violated by the application of the 2002 Guidelines to Freeman’s sentence.
15
15