IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_____________________
No. 93-9056
_____________________
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
CARLOS HILL,
Defendant-Appellant.
_________________________________________________________________
Appeal from the United States District Court for the
Northern District of Texas
(3:93-CR-187-R(06))
_________________________________________________________________
(January 9, 1995)
Before WHITE, Associate Justice (Ret.);1 BARKSDALE, and PARKER,
Circuit Judges.
RHESA HAWKINS BARKSDALE, Circuit Judge:
Carlos Hill, who pleaded guilty to conspiracy to commit wire
fraud, challenges his sentence on two bases: first, it being
consecutive to, rather than concurrent with, an undischarged
sentence of imprisonment imposed by a federal court in New Jersey
for an unrelated offense (the district court relied upon Sentencing
Guidelines § 5G1.3(c), p.s., but we conclude that § 5G1.3(a)
1
The Honorable Byron R. White, Associate Justice of the
United States Supreme Court, (Ret.), sitting by designation,
pursuant to 28 U.S.C. § 294(a).
applies; it requires a consecutive sentence); and second, the
amount of loss used in calculating his offense level. We AFFIRM.
I.
Indicted on 14 counts, Hill pleaded guilty to the first:
conspiracy to commit wire fraud, in violation of 18 U.S.C. §§ 371
and 1343. The factual basis for the plea may be briefly summarized
as follows. Between May and December 1990, co-defendant David
Arthur Lloyd represented to Hill that a person (fictitious) owned
Government National Mortgage Association (GNMA) securities, and had
executed a trust agreement, assigning the securities to Lloyd or
his company, as trustee. Lloyd obtained valid GNMA pool numbers
and used them to create the necessary documents, such as negotiable
promissory notes and pledge agreements. Hill, who became aware of
the fraudulent nature of the scheme, agreed with Lloyd to "rent"
the GNMA securities to individuals or companies who needed assets
for use as collateral, or to enhance their balance sheets.
In December 1993, the district court sentenced Hill to 57
months imprisonment, with the sentence to run consecutively to a
prior undischarged sentence of imprisonment imposed by a federal
court in New Jersey for an unrelated offense.
II.
Of course, one of the few bases for setting aside a sentence
is if it resulted from "an incorrect application of the ...
guidelines". 18 U.S.C. § 3742(a)(2); e.g., United States v.
Mathena, 23 F.3d 87, 89 (5th Cir. 1994). Along that line, Hill
claims misapplication by the district court in two respects:
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imposing a consecutive sentence; and using an incorrect amount of
loss for calculating his offense level. We review the district
court's interpretation and application of the Guidelines de novo;
its findings of fact, for clear error. E.g., United States v.
Wimbish, 980 F.2d 312, 313 (5th Cir. 1992), cert. denied, ___ U.S.
___, 113 S. Ct. 2365 (1993), abrogated in part on other grounds,
Stinson v. United States, ___ U.S. ___, 113 S. Ct. 1913 (1993).
A.
Guidelines § 5G1.3 governs imposition of a sentence on a
defendant subject to an undischarged term of imprisonment for
another offense. Hill contends that the district court misapplied
the section by imposing a sentence consecutive to -- rather than
concurrent with -- his New Jersey sentence. He maintains that §
5G1.3(c), p.s. requires the district court to conduct the analysis
described in note 3 of the commentary to determine whether a
consecutive sentence was a "reasonable incremental punishment for
the instant offense"; that the analysis would have compelled a
concurrent sentence; but that the court failed to perform it.2
2
Section 5G1.3(c), designated as a policy statement, provides
that, in cases in which subsections (a) and (b) are inapplicable,
"the sentence for the instant offense shall be imposed to run
consecutively to the prior undischarged term of imprisonment to
the extent necessary to achieve a reasonable incremental
punishment for the instant offense." Its commentary states:
To the extent practicable, the court should
consider a reasonable incremental penalty to be a
sentence for the instant offense that results in a
combined sentence of imprisonment that
approximates the total punishment that would have
been imposed under §5G1.2 (Sentencing on Multiple
Counts of Conviction) had all of the offenses been
federal offenses for which sentences were being
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The Government responds that § 5G1.3(a), not § 5G1.3(c), p.s.,
is applicable.3 Section § 5G1.3(a) provides that
[i]f the instant offense was committed while the
defendant was serving a term of imprisonment
(including work release, furlough, or escape
status) or after sentencing for, but before
commencing service of, such term of imprisonment,
the sentence for the instant offense shall be
imposed to run consecutively to the undischarged
term of imprisonment.
U.S.S.G. § 5G1.3(a).4 Its commentary explains that
[u]nder subsection (a), the court shall impose a
consecutive sentence where the instant offense (or
any part thereof) was committed while the defendant
was serving an undischarged term of imprisonment or
after sentencing for, but before commencing service
of, such term of imprisonment.
U.S.S.G. § 5G1.3, comment. (n.1) (emphasis added).5
For purposes of § 5G1.3(a), the "instant offense" is the
Dallas conspiracy, which lasted from June 1, 1989, through June 25,
imposed at the same time.
U.S.S.G. § 5G1.3, comment. (n.3).
3
In the alternative, the Government asserts that the
commentary to § 5G1.3(c), p.s. is not binding, and that the
district court exercised its discretion properly in imposing a
consecutive sentence. See note 9, infra.
4
Hill was sentenced for the Dallas conspiracy on November 5,
1993. Accordingly, we apply the 1993 version of the Guidelines,
which became effective on November 1, 1993. See U.S.S.G. §
1B1.11(a) ("The court shall use the Guidelines Manual in effect
on the date that the defendant is sentenced.").
5
"[C]ommentary in the Guidelines Manual that interprets or
explains a guideline is authoritative unless it violates the
Constitution or a federal statute, or is inconsistent with, or a
plainly erroneous reading of, that guideline." Stinson v. United
States, ___ U.S. ___, 113 S. Ct. 1913, 1915 (1993). Applying
that standard, we conclude that the commentary interpreting §
5G1.3(a) is authoritative.
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1991;6 the "undischarged term of imprisonment" is the 20-year
sentence imposed on April 3, 1991, by the federal district court in
New Jersey.7 Accordingly, as the Government points out, the Dallas
conspiracy continued (and thus part of the instant offense was
committed) after Hill was sentenced in New Jersey. Although Hill
was arrested for the Dallas conspiracy on March 8, 1991, and has
been incarcerated since then, his involvement in that conspiracy
did not end with his arrest and incarceration, because there is no
evidence that he withdrew from the conspiracy after then, or at any
time prior to June 25, 1991, when the conspiracy ended. See, e.g.,
United States v. Puig-Infante, 19 F.3d 929, 945 (5th Cir.)
(defendant is presumed to continue involvement in conspiracy unless
he makes a substantial, affirmative showing of withdrawal,
6
The plea agreement states that Hill pleaded guilty to count
one of the indictment, "except paragraph B (2) of count one
[conspiracy to violate 18 U.S.C. § 1956(a)(1)(A)(i) and
(a)(1)(B)(i)]." The dates for the conspiracy are set forth in
the first, unnumbered paragraph of section B of the indictment,
which is covered by Hill's plea agreement. Moreover, these are
the dates used in the Presentence Investigation Report; Hill did
not object to them.
7
For the New Jersey offense, Hill pleaded guilty to
conspiring to associate with an enterprise conducted through a
pattern of racketeering activity, in violation of 18 U.S.C. §
1962(d). The charge arose from an advance fee scheme, in which
Hill offered to arrange funding for loans in exchange for payment
of advance fees of $25,000 to $35,000. Hill agreed to plead
guilty to that offense in August 1988, and the New Jersey
district court accepted his plea on April 26, 1990. In the plea
agreement, the parties stipulated that the Guidelines were not in
effect at the time that the offense was committed. In addition,
Hill pleaded guilty to making a false statement in a January 1977
application for registration submitted to the Commodities Futures
Trading Commission, in violation of 18 U.S.C. § 1001; the New
Jersey district court sentenced him to five years probation for
that offense.
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abandonment, or defeat of the conspiratorial purpose; even after
arrest and incarceration, a conspirator continues to be responsible
for acts committed by co-conspirators unless he has withdrawn; and
withdrawal requires commission of affirmative acts inconsistent
with object of conspiracy that are communicated in a manner
reasonably calculated to reach co-conspirators), cert. denied, ___
U.S. ___, 115 S. Ct. 180 (1994); United States v. Killian, 639 F.2d
206, 209 (5th Cir.) (same), cert. denied, 451 U.S. 1021 (1981).
"The burden of proving withdrawal from a conspiracy rests upon
the defendant." Killian, 639 F.2d at 209. But, Hill neither
asserted in district court, nor offered any evidence, that he
withdrew from the Dallas conspiracy prior to being sentenced for
the New Jersey offense. In any event, he relies upon the district
court's finding that the Dallas offense was not committed after
sentencing for the New Jersey offense.8 As is more than well-
8
In district court, the Government relied upon subsection (a)
(in very summary fashion, and without reference to the above
discussed well-established legal principle on withdrawal from a
conspiracy); and Hill does not contest its right to assert that
position here. The Government did not cross-appeal from the
district court's ruling that the subsection is not applicable;
nor was it required to do so. See, e.g., United States v.
American Railway Express Co., 265 U.S. 425, 435 (1924) ("the
appellee may, without taking a cross-appeal, urge in support of a
decree any matter appearing in the record, although his argument
may involve an attack upon the reasoning of the lower court or an
insistence upon matter overlooked or ignored by it"); Hoyt R.
Matise Co. v. Zurn, 754 F.2d 560, 565 n.5 (5th Cir. 1985) ("Even
though an appellee has not filed a cross appeal, he may take the
position on appeal that the record supports the court's judgment
on any ground, including one rejected or ignored in the lower
court"). The Government is not seeking to enlarge Hill's
sentence, or to otherwise alter the judgment; instead, it
proffers an alternative legal theory upon which the district
court's imposition of a consecutive sentence may be upheld.
"Requiring conditional cross-appeals in such circumstances would
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oblige the Government (and defendants in response to Government
appeals of sentences) to file conditional cross-appeals
reflexively, anticipating all possible appellate adjustments of
the sentence in advance of knowing precisely the nature of the
appellant's challenge. That would burden appellees (and courts)
with no appreciable benefit to appellate practice." United
States v. Bohn, 959 F.2d 389, 394 (2d Cir. 1992) (conditional
cross-appeal not required for appellate court to entertain
Government's request to augment one component of a sentence on
one count in response to an appellate ruling decreasing another
component of the sentence on the same count).
As indicated, the Government's position on appeal is
consistent with its position in the district court. Cf. Gregory
v. Missouri Pacific R. Co., 32 F.3d 160, 164 (5th Cir. 1994)
(appellee cannot take one position before district court and urge
inconsistent position on appeal). As one of his objections to
the Presentence Investigation Report, Hill asserted that §
5G1.3(a) did not apply, but without stating why. In a letter
brief filed after the sentencing hearing, pursuant to the court's
directions at that hearing, the Government asserted:
... Hill would not have been entitled to have his
sentences run concurrent to each other where the
instant conspiracy continued after the date he was
sentenced for the New Jersey offense. Under §
5G1.3(a), he would be sentenced to consecutive
sentences because the instant offense extended in
time after the date he was sentenced in the New
Jersey case.
(Emphasis in original.) In its post-sentencing hearing
Memorandum Opinion, rendered after receipt of the supplemental
submissions from Hill and the Government, the district court
found, tracking the language of § 5G1.3(a), that "[t]he Dallas
offense was not committed `while the Defendant was serving a term
of imprisonment ... or after [his] sentencing for' the New
York/New Jersey offense, so §5G1.3(a) of the Sentencing
Guidelines is not applicable." (Emphasis, ellipsis, and brackets
by district court.)
We reject Hill's assertion at oral argument that the
Government's position on § 5G1.3(a) is inconsistent with a
statement made by the prosecutor at sentencing. Early in that
hearing, the prosecutor stated that Hill was on probation for the
New Jersey offense when he "got involved" in the Dallas
conspiracy. Later during the hearing, the prosecutor stated:
Your Honor, let me just correct one thing. I said
Mr. Hill was awaiting sentencing at the time that
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established, a factual finding is clearly erroneous "when although
there is evidence to support it, the reviewing court on the entire
evidence is left with the definite and firm conviction that a
mistake has been committed." Anderson v. City of Bessemer City,
N.C., 470 U.S. 564, 573 (1985) (citation omitted).
After reviewing the record, we conclude that the district
court clearly erred in finding that the instant offense was not
committed, at least in part, after Hill's sentencing in New Jersey.
It is undisputed that the Dallas conspiracy continued after
imposition of Hill's sentence in New Jersey. (For example, as
noted, consistent with Hill's guilty plea, the Presentence
he committed this offense, not probation, as I
stated earlier. I wanted to make the Court aware
of that.
This statement is not inconsistent with the Government's
position. It is undisputed that the Dallas conspiracy lasted
from June 1, 1989, to June 25, 1991; Hill was not sentenced in
New Jersey until April 3, 1991. Therefore, consistent with the
prosecutor's statement, a large part of the Dallas offense was
committed while Hill was awaiting sentencing in New Jersey. In
any event, the prosecutor's statement cannot change the fact that
a portion of the Dallas offense was committed after Hill was
sentenced for the New Jersey offense. Furthermore, the
Government's position was clarified in its letter brief filed
after the sentencing hearing.
In sum, the facts necessary for application of § 5G1.3(a)
(the time frame for the Dallas conspiracy and the date of Hill's
sentencing in New Jersey) were before the district court, and are
undisputed. The application of § 5G1.3(a) to those facts is, of
course, a question of law. See, e.g., United States v. Cabral-
Castillo, 35 F.3d 182, 186 (5th Cir. 1994). The Government
should have reminded the district court that Hill's involvement
in the Dallas conspiracy is presumed to continue after his arrest
and incarceration unless he made a substantial, affirmative
showing of withdrawal, but this does not preclude our applying
that well-established principle of law. We must, of course,
follow it in determining the applicability of § 5G1.3(a).
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Investigation Report states that the conspiracy lasted until June
25, 1991; Hill did not object.) And, the record contains no
evidence that Hill withdrew from that conspiracy prior to the
imposition of his New Jersey sentence, or at any time prior to the
conclusion of the Dallas conspiracy on June 25, 1991.
Accordingly, this case, which appears to be one of first
impression, falls squarely under § 5G1.3(a). Under that
subsection, "the sentence for the instant offense shall be imposed
to run consecutively to the undischarged term of imprisonment."
U.S.S.G. § 5G1.3(a) (emphasis added). Although the district court
concluded erroneously that § 5G1.3(a) was not applicable, and
instead imposed a consecutive sentence pursuant to § 5G1.3(c),
p.s., it nevertheless reached the correct result.9
B.
The amount paid to Hill by those who "rented" the securities
from him was approximately $800,000; but the face value of those
securities was approximately $69,000,000. The district court
adopted the probation officer's calculation of a 17-level increase
in Hill's offense level under U.S.S.G. § 2F1.1(b)(1)(R), based on
a loss of $69,000,000. Hill contends that the district court
misapplied the Guidelines by using the $69,000,000, rather than the
$800,000. According to Hill, "because these were not real GNMA
securities, there was never any risk of loss as to the face value
9
Because a consecutive sentence was imposed correctly, we do
not address whether, in determining that a consecutive sentence
was appropriate under § 5G1.3(c), p.s., the district court was
required to perform the analysis presented in its commentary.
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of the bogus securities (as there might have been had the
securities been real, but stolen)."
An amount of loss finding is reviewed only for clear error.
United States v. Chappell, 6 F.3d 1095, 1101 (5th Cir. 1993), cert.
denied, ___ U.S. ___, 114 S. Ct. 1232, 1235 (1994). Hill
maintains, however, that the appropriate standard of review is de
novo because it is the legal significance of the facts, not the
facts themselves, that are disputed. We disagree. As hereinafter
discussed, at issue is whether Hill intended a loss of the face
value of the securities, a question of fact.
Needless to say, the district court is not required to
determine the amount of loss with precision; "[t]he court need only
make a reasonable estimate of the loss, given the available
information." U.S.S.G. § 2F1.1, comment. (n.8). And, "if an
intended loss that the defendant was attempting to inflict can be
determined, this figure will be used if it is greater than the
actual loss." U.S.S.G. § 2F1.1, comment. (n.7). When reviewing
the calculation of an intended loss, we look to actual, not
constructive, intent, and distinguish between cases in which "the
intended loss for stolen or fraudulently obtained property is the
face value of that property" and those in which the intended loss
is zero because "the defendant intends to repay the loan or replace
the property." United States v. Henderson, 19 F.3d 917, 928 (5th
Cir.), cert. denied, ___ U.S. ___, 115 S. Ct. 207 (1994).
At sentencing, an FBI agent testified that the securities
rented to Hill's victims actually existed and had a value of
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$69,000,000, but that the defendants had no ownership interest in
those securities. He testified further that, if Hill's clients had
pledged the securities as collateral, the potential loss was
$69,000,000, because the securities were worthless to Hill's
clients.
Because Hill had no ownership interest in the "rented" GNMA
securities, he could not have intended to replace them with GNMAs
if it became necessary. See Henderson, 19 F.3d at 928. True,
Hill's victims paid him approximately $800,000 in rental fees, but
the purpose of the rental scheme was to allow the victims to pledge
the face value of the securities ($69,000,000) as collateral for
loans, or to allow them to increase the assets reflected on their
balance sheets by that amount. Accordingly, we conclude that the
district court did not clearly err. The "intended loss that the
defendant was attempting to inflict" was the face value of the
securities. See U.S.S.G. § 2F1.1, comment (n.7). ("For example,
if the fraud consisted of selling or attempting to sell $40,000 in
worthless securities, or representing that a forged check for
$40,000 was genuine, the loss would be $40,000.")10
III.
For the foregoing reasons, Hill's sentence is
10
The district court found that $69,000,000 was the
"potential" loss. Hill contends that "`potential loss' is not a
permissible measure of guideline `loss.'" Although it would have
been more appropriate for the district court to have referred to
the loss as "intended", rather than "potential", it did not
commit reversible error by so describing the loss. See United
States v. Hooten, 933 F.2d 293, 298 (5th Cir. 1991) (using term
"potential loss").
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AFFIRMED.
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