Case: 10-11024 Document: 00511591070 Page: 1 Date Filed: 09/01/2011
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
September 1, 2011
No. 10-11024 Lyle W. Cayce
Clerk
UNITED STATES OF AMERICA,
Plaintiff - Appellee
v.
BRION GARY RANDALL,
Defendant - Appellant
Appeals from the United States District Court
for the Northern District of Texas
USDC No. 3:10-CR-117-1
Before HIGGINBOTHAM, OWEN, and HAYNES, Circuit Judges.
PER CURIAM:*
Brion Gary Randall appeals his sentence following a plea of guilty to one
count of mail fraud in violation of 18 U.S.C. § 1341 and one count of bank fraud
in violation of 18 U.S.C. § 1344. Randall raises two issues before this court: (1)
whether the district court judge should have recused himself because the judge
also presided over a civil trial involving Randall that was based on the same
underlying facts; and (2) the procedural and substantive reasonableness of his
sentence. Finding no error, we AFFIRM.
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
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I. FACTS AND PROCEDURAL HISTORY
From 2004 to 2009, Randall conducted two schemes that eventually
defrauded at least twenty-seven investors and three banks. Randall conducted
the first scheme by persuading individuals, some of whom he met at Alcoholics
Anonymous (“AA”) meetings, to invest in non-existent, short-term loan programs
that promised investors high interest rates, low risk, and a quick return of
capital. Randall told his victims that he was pooling money from various
investors into two central bank accounts, that he had invested millions of dollars
of his own money in the venture, and that the accounts regularly maintained a
balance of between $25 to $29 million so the victims’ money was readily
accessible. Randall used fake statements, portfolio summaries, and computer
screen shots to reassure and convince the investors of his credibility.
Twenty-seven investors eventually sustained an aggregate loss of $4.6 million.
As part of his second scheme, Randall obtained over $1 million in loans from
Texas Capital Bank, Bank of America, and a predecessor of Wells Fargo Bank
by submitting fraudulent statements that inflated his income and assets.
Randall also forged the signatures of victims on loan guarantees. Randall
eventually defaulted on all of the fraudulently obtained loans, and the banks lost
$875,216.38.
On March 3, 2010, Randall was charged with bank fraud and mail fraud.
Randall waived indictment and pleaded guilty to both counts at an arraignment
before a magistrate judge. The district court judge agreed with the magistrate
judge’s recommendation to accept Randall’s plea and found Randall guilty on
June 2, 2010. Six days before Randall’s sentencing, the judge transferred the
case to a different district court judge, who was presiding over a civil case filed
by the Securities and Exchange Commission (“SEC”) against Randall based on
the same fraudulent conduct at issue in Randall’s criminal case. Randall filed
several motions, objecting to the transfer, moving for a continuance and for
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access to documents under seal in the civil case, and moving for the judge’s
recusal from the criminal sentencing. The judge to whom the case was
transferred denied these motions. After a hearing, that judge determined that
the guidelines range for Randall’s sentence was 97 to 121 months. The court
sentenced Randall to 180 months imprisonment, as well as a substantial
restitution payment and three years of supervised release. Randall appealed.
II. DISCUSSION
1. Recusal
Randall argues that the district court judge to whom the case was
transferred1 abused his discretion in denying Randall’s motion to recuse that
judge under both 28 U.S.C. § 455(a) and § 455(b)(1).2 Randall asserts that the
judge had personal knowledge of disputed facts because he also presided over the
civil suit filed by the SEC against Randall. In support of that assertion, Randall
contends that the knowledge gained by the receiver in the civil case should be
imputed to the judge. Further, during the civil suit, the judge presided over
depositions that primarily focused on the deletion of computer files from
computers owned by Randall.
Section 455(a) and § 455(b)(1) “afford separate, though overlapping,
grounds for recusal.” Andrade v. Chojnacki, 338 F.3d 448, 454 (5th Cir. 2003).
Thus, “whenever a judge’s partiality might reasonably be questioned, recusal is
required under § 455(a), irrespective [sic] whether the circumstance is covered
1
Randall does not challenge the transfer on appeal, only the decision by the transferee
judge not to recuse himself.
2
28 U.S.C. § 455 provides that:
(a) Any justice, judge, or magistrate [magistrate judge] of the United States shall
disqualify himself in any proceeding in which his impartiality might reasonably be
questioned.
(b) He shall also disqualify himself in the following circumstances:
(1) Where he has a personal bias or prejudice concerning a party, or personal
knowledge of disputed evidentiary facts concerning the proceeding; . . .
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by § 455(b).” Id. “[T]he view of the average, reasonable person is the standard
for analysis as to whether a judge shall disqualify himself or herself.” In re
Faulkner, 856 F.2d 716, 720 (5th Cir. 1988).
“[T]he origin of a judge’s alleged bias is of critical importance.” Andrade,
338 F.3d at 455 (noting that the Supreme Court applied the “extrajudicial source
rule” to the interpretation of § 455 in Liteky v. United States, 510 U.S. 540, 555
(1994)). “Personal knowledge” as used in § 455(b)(1) generally does not
encompass knowledge acquired by a judge while performing judicial duties. “As
a general rule, for purposes of recusal, a judge’s ‘personal knowledge’ of
evidentiary facts means ‘extrajudicial,’ so facts learned by a judge in his or her
judicial capacity regarding the parties before the court, whether learned in the
same or a related proceeding, cannot be the basis for disqualification.” Conkling
v. Turner, 138 F.3d 577, 592 (5th Cir. 1998) (internal quotation marks and
citation omitted). Thus, “[m]ere prior knowledge of some facts concerning a
litigant . . . is not in itself necessarily sufficient to require disqualification.”
United States v. Seiffert, 501 F.2d 974, 978 (5th Cir. 1974); see also United States
v. Clark, 605 F.2d 939, 941 (5th Cir. 1979) (per curiam) (finding that the trial
judge’s receipt of a presentence report did not disqualify him, as holding
otherwise would suggest that the court “would be disqualified to try the same
defendant on other offenses”; such a result “would be highly untenable in light
of the decisions that a trial judge, who is familiar with the defendant’s
background by reason of having tried him in previous cases, is not thereby
disqualified to try the same defendant in subsequent cases” (quoting Smith v.
United States, 360 F.2d 590, 592 (5th Cir. 1966))).
We review a trial court’s denial of a motion to recuse for abuse of
discretion. United States v. Allen, 587 F.3d 246, 251 (5th Cir. 2009), cert. denied,
130 S. Ct. 1564 (2010). We find no abuse of discretion in the judge’s denial of
Randall’s motion to recuse. Randall has made no showing that the judge
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obtained any “extrajudicial information.” Rather, all of the information the
judge allegedly received by presiding over the civil case was information gained
while the judge acted in a judicial capacity. Judges routinely receive potentially
inflammatory or irrelevant information that cannot later be used in a
subsequent or related proceeding—for example, evidence found to be
inadmissible. Yet, we rarely find such information requires recusal. Without
any showing that the “intrajudicial” information learned by the judge in this
case was of a type that would make fair judgment impossible, such information
is not disqualifying.
Nor do we believe that the mere fact that the judge obtained information
during the course of the civil proceeding would raise a question in the mind of
a reasonable person as to the judge’s impartiality. Randall does not point to any
adverse rulings or opinions that could demonstrate that the judge harbored “a
deep-seated favoritism or antagonism that would make fair judgment
impossible.” Liteky, 510 U.S. at 555; see also In re Corrugated Container
Antitrust Litigation, 614 F.2d 958, 963-64, 966 (5th Cir. 1980) (finding that a
judge did not need to recuse from presiding over a civil case simply because he
made evidentiary rulings during the course of a criminal trial in which the
defendant was also involved; noting that the rulings in the criminal trial would
not “cause a reasonable third party to question his impartiality in the civil
litigation”). The district court judge did not abuse his discretion in denying the
motion to recuse given the facts of this case.
2. Reasonableness of Sentence
Randall challenges both the procedural and substantive reasonableness
of his non-Guidelines sentence.3 We review the reasonableness of a district
3
We recognize three types of sentences: (1) “a sentence within a properly calculated
Guidelines range”; (2) “a sentence that includes an upward or downward departure as allowed
by the Guidelines”; and (3) “‘a non-Guideline sentence’ or a ‘variance’ that is outside of the
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court’s sentencing decision under an abuse of discretion standard. Gall v. United
States, 552 U.S. 38, 46 (2007); United States v. Herrera-Garduno, 519 F.3d 526,
529 (5th Cir. 2008). In reviewing a sentence, we utilize a two-step approach,
first asking “whether the district court committed a procedural error.” United
States v. Valencia, 600 F.3d 389, 433 (5th Cir.), cert. denied, 131 S. Ct. 285
(2010). Such errors include “miscalculating or failing to calculate the sentencing
range under the Guidelines, treating the Guidelines as mandatory, failing to
consider the § 3553(a) factors, selecting a sentence based on clearly erroneous
facts, or failing to adequately explain the chosen sentence—including an
explanation for any deviation from the Guidelines range.” United States v.
Mondragon-Santiago, 564 F.3d 357, 360 (5th Cir.), cert. denied, 130 S. Ct. 192
(2009). We review a district court’s interpretation of the sentencing Guidelines
de novo and the underlying factual findings for clear error. United States v.
Rajwani, 476 F.3d 243, 248 (5th Cir. 2007).
“If the sentence is procedurally proper, the court engages in a substantive
review based on the totality of the circumstances.” Mondragon-Santiago, 564
F.3d at 360. “[T]he fact that the appellate court might reasonably have
concluded that a different sentence was appropriate is insufficient to justify
reversal of the district court.” Herrera-Garduno, 519 F.3d at 530 (citation
omitted). “The reasonableness inquiry on appeal for both Guideline and
non-Guideline sentences must be guided by the sentencing considerations set
forth in 18 U.S.C. § 3553(a).” Rajwani, 476 F.3d at 250.
“A party must raise a claim of error with the district court in such a
manner so that the district court may correct itself and thus, obviate the need
for our review.” Mondragon-Santiago, 564 F.3d at 361 (quoting United States
v. Rodriguez, 15 F.3d 408, 414 (5th Cir. 1994) (quotation omitted)). If a
relevant Guidelines range.” United States v. Brantley, 537 F.3d 347, 349 (5th Cir. 2008)
(quoting United States v. Smith, 440 F.3d 704, 706-08 (5th Cir. 2006)).
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defendant fails to raise an objection to either the procedural or substantive
reasonableness of a sentence, we review the sentence for plain error. Id. To
survive plain error review, a defendant must show that: “(1) there is error (and
in light of Booker, an ‘unreasonable’ sentence equates to a finding of error); (2)
it is plain; and (3) it affects substantial rights.” United States v. Peltier, 505 F.3d
389, 392 (5th Cir. 2007). If the defendant makes that showing, we have the
discretion to correct the forfeited error, but should do so only if the “error
seriously affect[s] the fairness, integrity or public reputation of judicial
proceedings.” Id. (internal quotation marks and citation omitted).
A. Sentencing Procedure
Randall argues that the district court did not provide an adequate
explanation of the reasons for imposing a non-Guidelines sentence. Because
Randall did not specifically object during sentencing on this ground,4 we review
for plain error, see Mondragon-Santiago, 564 F.3d at 361, and find none on this
record. The district court cited several of the § 3553(a) factors during the
sentencing hearing, as well as discussed the facts of the case that warranted a
greater sentence than that provided by the Guidelines. Compare Rajwani, 476
F.3d at 251 (finding a sentence procedurally reasonable because the district
court’s explanation of the reason for its departure reflected a consideration of the
relevant § 3353(a) factors), with Mondragon-Santiago, 564 F.3d at 363 (finding
procedural error because the district court “did not give any reasons for its
sentence beyond a bare recitation of the Guideline’s calculation”). Although
when a district court imposes a non-Guidelines sentence, “a more thorough
4
Randall contends that his offer to file his objections in writing, which was rejected
by the district judge with words to the effect of “you have made your objections,” suffices to
encompass this procedural objection. However, he neither communicated this objection to the
district court nor made clear that he had additional objections not already raised.
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explanation is required,” Smith, 440 F.3d at 707, the district court gave such an
explanation here.5
Randall also argues that the district court erred because it did not first
consider the Guidelines departure provisions before imposing a variance. We
again conduct a plain error review, as Randall did not object during sentencing
on this ground. See United States v. Gutierrez, 635 F.3d 148, 152 (5th Cir. 2011)
(reviewing a similar argument for plain error because the district court could not
have understood from an objection to other procedural aspects of a sentence that
the defendant wanted the court to consider the departure policy statement in
§ 4A1.3).6
Randall relies on a case from the Third Circuit that states that a district
court must engage in a three-step process when imposing a sentence: “(1)
calculate the applicable Guidelines range, (2) formally rule on any departure
motions, and (3) exercise its discretion in applying the factors set forth in 18
U.S.C. § 3553(a).” See United States v. Grier, 585 F.3d 138, 141-42 (3d Cir.
5
To the extent that Randall challenges the written statement of reasons provided, that
statement was also adequate. See United States v. Gonzalez, 445 F.3d 815, 819-20 (5th Cir.
2006) (finding that the district court’s statements, made both orally in open court and in
writing in a statement of reasons, satisfied the requirements of § 3353(c)(2)); United States v.
Powell, 402 F. App’x 930, 932 (5th Cir. 2010) (per curiam) (unpublished) (finding no abuse of
discretion because the “sentencing hearing transcript, written judgment, and statement of
reasons, together provide details of the district court’s rulings” and, therefore, “the district
court sufficiently complied with § 3353(c)(2)”).
6
In his reply brief, Randall argues that a 2010 amendment to § 1B1.1 of the Guidelines
supports his position. That argument was arguably waived because Randall failed to raise it
in his opening brief. See United States v. Jackson, 426 F.3d 301, 304 n.2 (5th Cir. 2005)
(“Arguments raised for the first time in a reply brief, even by pro se litigants . . ., are waived.”).
Regardless of waiver, the cited amendment, Amendment 741, became effective after the date
of Randall’s sentence and has not been made retroactively applicable. The district court was
required to apply the Guidelines version in effect on the date of Randall’s sentence. See 18
U.S.C. § 3553(a)(4)(ii); see also United States v. Lindsey, No. 10-10769, 2011 WL 1758724, at
*1 (5th Cir. May 9, 2011) (per curiam) (unpublished) (stating that the district court correctly
applied a former Guideline provision because the defendant was sentenced prior to the
effective date of an amendment, and the amendment was not made retroactively applicable).
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2009). The Third Circuit found that “[b]y making the Guidelines advisory,
Booker gave district courts discretion at step three—but only after steps one and
two have been completed properly.” Id. at 142. Other circuits have held
similarly. See United States v. Tucker, 473 F.3d 556, 560-61 (4th Cir. 2007)
(stating that the court should first look to whether a departure is appropriate
and, if the “departure range still does not serve the factors set forth in § 3553(a),
the court may then elect to impose a non-guideline sentence” (quoting United
States v. Moreland, 437 F.3d 424, 434 (4th Cir. 2006)); United States v.
Solis-Bermudez, 501 F.3d 882, 884 (8th Cir. 2007) (holding that to preserve the
distinction between departures and variances, district courts must engage in the
three-step process); United States v. Guyton, 636 F.3d 316, 319-20 (7th Cir. 2011)
(noting that § 1B1.1 lays out the order in which courts apply the Guideline
provisions).
Here, the PSR did not recommend any departures, nor did the
Government ask for one. Even though the record does not clearly indicate
whether the district court considered any applicable departure provisions before
imposing a variance, Randall has not shown that this alleged defect in the
procedure constituted plain error affecting his substantial rights. We have also
recently rejected an argument similar to Randall’s. See Gutierrez, 635 F.3d at
150-52. Randall’s argument that the district court committed procedural error
because it did not first consider a departure before imposing a non-Guidelines
sentence fails under plain error review.
Finally, Randall asserts that the district court erred in relying on “further
crimes of the defendant” and “the history and characteristics of the defendant.”
Even though Randall did not have a criminal history, the PSR described a
disciplinary action against Randall after he conducted transactions on customer
funds without the consent of those customers while Randall was employed at
Merrill Lynch. The PSR described this disciplinary action, and victims testified
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during the sentencing about their knowledge of the incident. While the district
court did not specifically refer to the disciplinary action when explaining its
reasons for the variance, the district court could take that action into account.
Further, several witnesses testified that they believed Randall was capable of
committing fraud again. Given the facts of this case, we find no error in the
district court’s finding that these two factors supported a variance.
B. Substantive Reasonableness
Because Randall objected below to the substantive reasonableness of the
sentence, we review his arguments under an abuse of discretion standard. When
reviewing a sentence for substantive reasonableness, we do not use a “rigid
mathematical formula that uses the percentage of a departure [from the
Guidelines range] as the standard for determining the strength of the
justifications required for a specific sentence.” United States v. Williams, 517
F.3d 801, 811 (5th Cir. 2008) (quoting Gall, 552 U.S. at 47) (alteration in
original). However, we may “take the degree of variance into account and
consider the extent of a deviation from the Guidelines.” Id. at 811-12 (quoting
Gall, 552 U.S. at 47). “A non-Guideline sentence is unreasonable where it ‘(1)
does not account for a factor that should have received significant weight, (2)
gives significant weight to an irrelevant or improper factor, or (3) represents a
clear error of judgment in balancing the sentencing factors.’” United States v.
Tzep-Mejia, 461 F.3d 522, 528 (5th Cir. 2006) (quoting Smith, 440 F.3d at 708).
We first note that even though the variance in this case was approximately
fifty percent higher and fifty-nine months more than the top of the calculated
Guidelines range, we have upheld similar variances. See, e.g., Smith, 440 F.3d
at 705-06 (sentence of 60 months where maximum sentence under Guidelines
was 27 months); United States v. Jones, 444 F.3d 430, 433 (5th Cir. 2006)
(sentence of 120 months where maximum Guidelines sentence was 57 months);
United States v. Brantley, 537 F.3d 347, 348-50 (5th Cir. 2008) (variance from
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Guideline maximum of 51 months to sentence of 180 months); Williams, 517
F.3d at 811 (variance from Guideline maximum of 121 months to sentence of 172
months).
Randall argues that the district court erred in using his participation in
AA meetings and the fact that some of his victims were also members of AA to
support an upward variance. The district court stated that it did not feel that
the Guidelines took into account the unique facts of this case, namely that
Randall used his role as a leader in AA meetings to find at least some of his
victims. Further, the district court noted that individuals involved in AA were
expected to lower their guard and maintain “rigorous honesty.” While they were
not “vulnerable victims” as defined in § 3A1.1 of the Guidelines, they were
vulnerable to fraud crimes perpetrated by leaders within AA like Randall in a
way different from ordinary victims, thus making Randall’s conduct particularly
reprehensible. We do not find an abuse of discretion in the district court’s
conclusion that the Guidelines did not take such circumstances into
consideration.
During sentencing, defense counsel also objected to the variance on the
grounds that the Guidelines already accounted for certain aspects of the offense
and the victims. However, “a district court may rely upon factors already
incorporated by the Guidelines to support a non-Guidelines sentence.” Brantley,
537 F.3d at 350; see also Williams, 517 F.3d at 809 (“The Supreme Court’s
decision in Booker implicitly rejected the position that no additional weight could
be given to factors included in calculating the applicable advisory Guidelines
range, since to do otherwise would essentially render the Guidelines
mandatory.”). In Williams, we held that “the district court was not prohibited
from considering the number of victims, the harm to individuals, the expansive
reach of the crimes, or the complexity of the scheme, even though the Guidelines
sentencing range for money laundering may implicitly have taken complexity
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and the number of victims into account . . . .” 517 F.3d at 810-11. Thus, even
though the district court found the abuse of trust and vulnerable victim
enhancements unwarranted in this case does not mean that the district court
could not consider such facts when imposing a non-Guidelines sentence.
Randall has not shown that the district court gave weight to an irrelevant
or improper factor. Nor has Randall demonstrated that the district court did not
account for a factor that should have received significant weight. Although the
sentence in this case is high, Randall’s fraudulent schemes were lengthy,
complex, and involved numerous victims. We find the sentence to be both
procedurally and substantively reasonable.
AFFIRMED.
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