UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
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No. 92-1686
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UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
JOE EVBUOMWAN,
Defendant-Appellant.
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Appeal from the United States District Court
for the Northern District of Texas
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( May 18, 1993 )
Before GOLDBERG and WIENER, Circuit Judges.*
GOLDBERG, Circuit Judge:
Joe Evbuomwan appeals his sentence for one count of credit
card fraud. Finding that the district court misapplied U.S.S.G §
1B1.3 in calculating Evbuomwan's sentence, we remand this case for
resentencing.
* Judge Garwood participated in the oral argument of this case but
subsequently thereto recused himself. Accordingly, he did not
participate in this decision. The case is being decided by a
quorum. 28 U.S.C. 46(d).
BACKGROUND and PROCEEDINGS BELOW
Evbuomwan pled guilty to one count of credit card fraud, in
violation of 18 U.S.C. § 1341, for obtaining an Exxon credit card
under a false name. Evbuomwan was sentenced to eighteen months in
custody plus two years of supervised release.
The total loss attributable to Evbuomwan's credit card fraud,
the offense to which Evbuomwan pled guilty, was $1,500. However,
the trial court calculated Evbuomwan's sentence using a base
offense level of $90,471. The district court reached the $90,471
figure by applying § 1B1.3 of the Federal Sentencing Guidelines,
under which a defendant's base offense level may be adjusted to
account for the "reasonably foreseeable acts" of others taken in
the "furtherance of a jointly undertaken criminal activity."
Of the $90,471, at least $66,000 is attributable to losses
arising from the "Bite Electronics" check fraud scheme perpetrated
against the NCNB Bank by Michael Aakhideno and Mark Dorenuma.
Aakhideno and Dorenuma opened a checking account at the NCNB Bank
under the name of "Bite Electronics," and wrote checks on that
account to pay off fraudulently obtained credit cards. Evbuomwan
was never charged with participating in this check fraud scheme or
with obtaining the credit cards paid off with the NCNB checks.
Evbuomwan's appeal challenges the district court's application
of § 1B1.3 in calculating Evbuomwan's base offense level.
Specifically, Evbuomwan contends that the district court erred by
including the losses incurred by the NCNB bank as a result of the
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Bite Electronics check fraud scheme in Evbuomwan's base offense
level. A "sentence imposed as a result of an incorrect application
of the sentencing guidelines must be reversed even if reasonable."
U.S. v. Mejia-Orosco, 867 F.2d 216, 218 (5th Cir. 1989) cert. den.
492 U.S. 924 (1989).
ANALYSIS
Under U.S.S.G § 1B1.3, effective at the date of Evbuomwan's
sentencing in August 1992, a defendant's base offense level could
be adjusted on the basis of "all acts and omissions committed or
aided by the defendant, or for which the defendant would be
otherwise accountable." The commentary clarified when a defendant
would be "otherwise accountable:"
In the case of criminal activity undertaken in concert
with others, whether or not charged as a conspiracy, the
conduct for which the defendant 'would be otherwise
accountable' also includes conduct of others in
furtherance of the execution of the jointly-undertaken
criminal activity that was reasonably foreseeable by the
defendant. Because a count may be broadly worded and
include the conduct of many participants over a
substantial period of time, the scope of the jointly-
undertaken criminal activity, and hence the relevant
conduct, is not necessarily the same for every
participant. Where it is established that the conduct
was neither within the scope of the defendant's
agreement, nor was reasonably foreseeable in connection
with the criminal activity the defendant agreed to
jointly undertake, such conduct is not included in
establishing the defendant's offense level under this
guideline. U.S.S.G. § 1B1.3, Application Note 1.
Under § 1B1.3, to hold Evbuomwan accountable for the losses
arising out of the Bite Electronics check fraud scheme, the
government must prove that: (1) the Bite Electronics check fraud
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scheme was within the scope of Evbuomwan's agreement to jointly-
undertake criminal activities with Aakhideno and Dorenuma, and (2)
that the check fraud scheme was reasonably foreseeable to
Evbuomwan. While the district court found that Aakhideno and
Dorenuma's participation in the check fraud scheme was reasonably
foreseeable to Evbuomwan, the lower court did not address the
question of whether the Bite Electronics check fraud scheme was
within the scope of Evbuomwan's agreement to jointly undertake
criminal activities with Aakhideno and Dorenuma, or even whether
Evbuomwan agreed to jointly undertake any criminal activities with
Aakhideno and Dorenuma.
The government's Pre-Sentence Report ("PSR") stated that "the
total loss attributable to the defendant's involvement in the
instant offense is $90,471." On the basis of this figure, the PSR
recommended a sentence increase on the basis of a loss exceeding
$70,000. Evbuomwan filed an objection to the PSR's computation of
the amount of loss, claiming that much of the alleged loss arose
from the fraudulent acts of third parties with whom Evbuomwan never
agreed to jointly undertake criminal activities. The government
responded to Evbuomwan's objection in an Addendum to the PSR. The
response stated in part:
The U.S. Secret Service Agents determined that the loss
cause by Mark Dorenuma was approximately $ 90,471. Even
though the defendant might not have had actual knowledge
that Co-offender Dorenuma was so extensively involved in
mail fraud and credit card fraud, it is reasonably
foreseeable that the defendant would at least 'suspect'
that his associate Dorenuma was involved in the same
criminal activity that the defendant and the other two
co-offenders were involved in. As stated in U.S.S.G §
1B1.3 Application Note 1, in the case of criminal
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activity undertaken in concert with others, whether or
not charged as a conspiracy, the conduct for which the
defendant 'would be otherwise accountable' also includes
conduct of others in furtherance of the execution of the
jointly undertaken criminal activity that was reasonably
foreseeable by the defendant.
Significantly, while the PSR Addendum found that it was
reasonably foreseeable "that the defendant would at least
'suspect'" Dorenuma's activity, the PSR Addendum did not claim that
Evbuomwan agreed to jointly undertake any criminal actions with
Dorenuma.
At the sentencing hearing, Evbuomwan again objected to the
PSR's calculation of his base offense level, claiming that the
government had produced no evidence showing that Evbuomwan agreed
to jointly undertake criminal activities with Aakhideno or
Dorenuma. At the close of the hearing, the district court decided
to calculate Evbuomwan's sentence using the base offense level
recommended in the PSR, explaining:
I believe that it was reasonably foreseeable when you got
all these interconnected items of evidence, I don't have
any question in my mind that these individuals each knew
that the others were up to something they weren't suppose
to be up to and I think he's responsible under the
guidelines. So I'm going to adopt and accept the
findings contained in the probation report as well as the
addendum.
The district court's analysis repeats the error committed by
the government in its Addendum PSR. While finding that the acts of
Aakhideno and Dorenuma were reasonably foreseeable to Evbuomwan,
the court never considered whether Evbuomwan agreed to jointly
undertake criminal acts with Dorenuma and Aakhideno, and whether
the Bite Electronics check fraud scheme was within the scope of any
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such agreement.
The Commentary to § 1B1.3 dictates that a defendant can be
sentenced on the basis of the "conduct of others in furtherance of
the execution of the jointly-undertaken criminal activity" that was
reasonably foreseeable by the defendant. Application Note 1. The
Commentary emphasizes that if "it is established that the conduct
was [not] within the scope of the defendant's agreement . . . such
conduct is not included in establishing the defendant's offense
level under this guideline." Id.
The revised Sentencing Guidelines, effective November 1, 1992,
clarify the requirements for sentence enhancement under § 1B1.3 and
describe a situation analogous to the case at hand in example
number (5):
Defendant O knows about her boyfriend's ongoing drug-
trafficking activity, but agrees to participate on only
one occasion by making a delivery for him at his request
when he was ill. Defendant O is accountable under [§
1B1.3] for the drug quantity involved on that one
occasion. Defendant O is not accountable for the other
drug sales mad by her boyfriend because those sales were
not in furtherance of her jointly undertaken criminal
activity (i.e., the one delivery).1
The above example illustrates that the mere knowledge that
criminal activity is taking place is not enough for sentence
1
The revised guidelines are not applicable to the
defendant. However, as we explained in United States v.
Aguilera-Zapata, 901 F.2d 1209, 1213 (5th Cir. 1990), if an
amendment
was intended only to clarify Section 1B1.3's
application and, therefore, implicitly was not intended
to make any substantive changes to it or its
commentary, we may consider the amended language of
Application Note 1 to Section 1B1.3 even though it was
not effective at the time of the commission of the
offense in question.
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enhancement under § 1B1.3. The rule does not hold accountable any
person who reasonably suspects that criminal activity is taking
place, regardless of their own involvement. To hold a defendant
accountable for the crime of a third person, the government must
establish that the defendant agreed to jointly undertake criminal
activities with the third person, and that the particular crime was
within the scope of that agreement.
A finding that Evbuomwan agreed to jointly undertake criminal
activities with Aakhideno and Dorenuma, and that the Bite
Electronics scheme was within the scope of that agreement, is an
absolute prerequisite to calculating Evbuomwan's base offense level
on the basis of the loss arising from the Bite Electronics scheme.
If Evbuomwan did not agree to jointly undertake criminal activities
with Aakhideno and Dorenuma, or if the Bite Electronics check fraud
scheme was not in the scope of Evbuomwan's agreement, the
government and lower court's findings that the check fraud scheme
was reasonably foreseeable is simply irrelevant. The appropriate
application of § 1B1.3 requires giving temporal primacy to the
determination of whether a defendant has agreed to jointly
undertake a criminal activity. If the defendant has not joined the
criminal activity, it does not matter that he could have foreseen
the criminal act. The reasonably foreseeable standard applies only
after it is shown that a jointly undertaken activity has taken
place.
In U.S. v. Rivera, 898 F.2d 442 (5th Cir. 1990), the district
court, in calculating the defendant's base offense level, adopted
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the government's pre-sentence report's inclusion of quantities of
heroin attributable to the defendant's co-defendants. On appeal,
the defendant argued that the district court erred in adopting the
pre-sentence report because the record contained no "factual
finding that Rivera was part of a jointly-undertaken scheme to
distribute heroin with any of his co-defendants." Id. at 446. We
remanded the case to the district court for resentencing,
explaining that "in the absence of a joint undertaking or plan, the
quantities of heroin distributed by persons other than Rivera
should not have been included in the calculation of his base
offense level." Id. See also U.S. v. Mir, 903 F.2d 825 (5th Cir.
1990)(remanded for resentencing because there was "no finding that
the conduct of the other persons named in the indictment was within
the scope of [defendant's] agreement").
The government concedes that the trial court never ruled on
whether Evbuomwan agreed to jointly undertake the relevant criminal
activity, but argues that this ruling is implicit in the trial
court's adoption of the government's Addendum PSR. Unfortunately,
the Addendum PSR also does not make a finding that Evbuomwan agreed
to jointly undertake the criminal activity. The government
maintains that this finding is implicit in the fact that the
Addendum PSR correctly recites § 1B1.3 after stating its
conclusion. We cannot assume that the trial court complied with §
1B1.3 by making an implicit ruling on the basis of the Addendum
PSR's implicit finding. We do not tolerate inferences based on
inferences. We remand this case for an explicit ruling on whether
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Evbuomwan agreed to jointly undertake any criminal activity with
Dorenuma and Aakhideno, and if Evbuomwan did agree, whether the
Bite Electronics check fraud scheme was within the scope of that
agreement.
CONCLUSION
For the foregoing reasons we VACATE Evbuomwan's sentence and
REMAND this case to the district court for resentencing consistent
with this opinion.
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