United States v. Richard Poirier, Jr.

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
FEBRUARY 13, 2003
No. 01-15989 THOMAS K. KAHN
________________________ CLERK

D.C. Docket No. 97-00508-CR-2-1-MHS

UNITED STATES OF AMERICA,

Plaintiff-Appellee
Cross-Appellant,
versus

RICHARD POIRIER, JR.,
MICHAEL DEVEGTER,

Defendants-Appellants
Cross-Appellees.

__________________________

Appeals from the United States District Court
for the Northern District of Georgia
_________________________

(February 13, 2003)

Before ANDERSON and CARNES, Circuit Judges, and POLLAK*, District
Judge.

_____________________________
* Honorable Louis H. Pollak, United States District Judge for the Eastern District of
Pennsylvania, sitting by designation.
CARNES, Circuit Judge:

Defendants Michael deVegter and Richard Poirier, Jr. were convicted of

wire fraud and conspiracy as a result of evidence that they participated in a scheme

to defraud Fulton County, Georgia. In this appeal they challenge the sufficiency

of the indictment, the sufficiency of the evidence against them, and the correctness

of the jury instructions. Their arguments primarily center around their contention

that Fulton County was not actually defrauded of “money and property,” and for

that reason their wire fraud convictions and the conspiracy convictions based upon

the same prosecutorial theory cannot stand. DeVegter also challenges his

sentence, arguing that the district court should not have applied the enhancement

for abusing a position of trust. For reasons we will explain, we find no merit in

the defendants’ contentions.

The government, on the other hand, cross-appeals the sentences given both

defendants on a variety of grounds, and its contentions do have merit.

I. BACKGROUND

Defendants deVegter and Poirier were indicted for their roles in corrupting

the process by which Fulton County selected an underwriter for a bond refunding

project. Fulton County hired deVegter to serve as its independent financial

advisor as it solicited and evaluated proposals from competing underwriters.

2
Poirier was a partner with Lazard Freres & Co. (the Lazard firm), which eventually

was awarded the underwriting contract. In exchange for deVegter’s covert

assistance in ensuring that the Lazard firm’s proposal was selected, Poirier

through an intermediary paid deVegter over $40,000.00. A grand jury

subsequently indicted both deVegter and Poirier, charging them with three

offenses: conspiracy to commit wire fraud in violation of 18 U.S.C. § 371;

money-and-property wire fraud in violation of 18 U.S.C. § 1343; and honest-

services wire fraud in violation of 18 U.S.C. § 1346.1

The jury returned a verdict finding both defendants guilty of conspiracy and

of § 1343 wire fraud. It did not reach a verdict on the § 1346 honest services

charge.

II. DISCUSSION

A. THE CONVICTIONS ISSUES

1. The Sufficiency of the Indictment

Defendants contend that the indictment was insufficient to support a

conviction for § 1343 wire fraud, an issue we review de novo. United States v.

Pendergraft, 297 F.3d 1198, 1204 (11th Cir. 2002). “Generally, an indictment is

1
In a prior opinion in this case, we reversed the district court’s dismissal of the § 1346
charge. United States v. DeVegter, 198 F.3d 1324 (1999). That opinion details the allegations of
the indictment more than we have here. Id. at 1326.

3
sufficient if it: 1) sets forth the elements of the offense in a manner which fairly

informs the defendant of the charge against which he must defend and 2) enables

him to enter a plea which will bar future prosecution for the same offense.” Belt

v. United States, 868 F.2d 1208, 1211 (11th Cir. 1989) (citing Hamling v. United

States, 418 U.S. 87, 117, 94 S. Ct. 2887, 2907 (1974)). “A grand jury indictment

must set forth each essential element of an offense in order for a resulting

conviction to stand.” United States v. Italiano, 837 F.2d 1480, 1482 (11th Cir.

1988) (quoting United States v. Outler, 659 F.2d 1306, 1310 (5th Cir. Unit B Oct.

1981) overruled on other grounds by United States v. Steele, 147 F.3d 1316, 1320

(11th Cir. 1998) (en banc)). The elements of a § 1343 wire fraud violation are:

(1) intentional participation in a scheme to defraud; and (2) use of wire

communications to further that scheme. United States v. Brown, 40 F.3d 1218,

1221 (11th Cir. 1994).

The defendants argue that the indictment was insufficient because it failed

to specify the money or property Fulton County was deprived of. The indictment

alleged that defendants “did knowingly and willfully devise and intend to devise a

scheme and artifice to defraud Fulton County, Georgia, and its citizens of money

and property and the good, faithful and honest services of defendant Michael

deVegter.” (emphasis added). In addition, the indictment specifically referred to

4
§§ 1343 and 1346, the money and property and the honest services wire fraud

provisions, respectively. Other parts of the indictment made it evident that the

property involved was certain confidential information.

According to the indictment, deVegter “had a duty not to disclose

confidential information received in his capacity as a financial advisor without

Fulton County’s permission.” The indictment specified that while supposedly in

the service of Fulton County, deVegter faxed a copy of Fulton County’s early draft

request for proposal to Poirier, and he later faxed a copy of its nearly-final draft

request for proposal to a third party, who in turn faxed it to Poirier. In addition,

the indictment alleged that deVegter obtained a copy of the proposal submitted by

one of the Lazard firm’s competitors, which he faxed to Poirier. The point of the

allegations was that deVegter was entrusted with Fulton County documents, which

he improperly transferred to Poirier in return for money.

Although the indictment did not expressly allege that the documents

deVegter obtained and transferred were confidential, “[w]hen analyzing challenges

to the sufficiency of an indictment, courts give the indictment a common sense

construction, and its validity is to be determined ‘by practical, not technical,

considerations.’” United States v. Gold, 743 F.2d 800, 812 (11th Cir. 1984)

(quoting United States v. Morano, 697 F.2d 923, 927 (11th Cir. 1983)). Common

5
sense tells us that the documents listed in the indictment constituted confidential

information. Anyone with a modicum of understanding about bidding processes

knows that those kind of documents are confidential. Moreover, the indictment’s

charge that the conduct violated § 1343 also indicates that they were.

Of course, the government could have avoided this issue altogether by

simply saying in the indictment that the documents were confidential, but “the

appropriate test . . . is not whether the indictment might have been drafted with

more clarity, but whether it conforms to minimal constitutional standards.” United

States v. Varkonyi, 645 F.2d 453, 456 (5th Cir. Unit A May 1981)). “Minor

deficiencies that do not prejudice the defendant will not prompt this Court to

reverse a conviction.” United States v. Chilcote, 724 F.2d 1498, 1505 (11th Cir.

1984). In other words, we do not punish a party for unnecessarily making us

decide an issue by deciding that issue against the party.

Defendants also contend that even apart from the question of the adequacy

of the allegations about confidentiality, the indictment was insufficient because

the specified documents did not constitute property and therefore could not

support a § 1343 wire fraud conviction. In McNally v. United States, 483 U.S.

350, 107 S. Ct. 2875 (1987), the Supreme Court held that wire and mail fraud

statutes protect only property rights, and that the words “to defraud,” as used in the

6
statutes, “usually signify the deprivation of something of value by trick, deceit,

chicane or overreaching.” Id. at 358, 107 S. Ct. at 2881 (quoting Hammerschmidt

v. United States, 265 U.S. 182, 188, 44 S. Ct. 511, 512 (1924)) (internal quotation

marks omitted).2 With its McNally decision the Court overturned a line of cases

that permitted wire fraud convictions based on deprivation of intangible rights like

the right to honest services. Id. at 355-56, 107 S. Ct. at 2879.3

Shortly after McNally, the Supreme Court elaborated on the scope of § 1343

in Carpenter v. United States, 484 U.S. 19, 108 S. Ct. 316 (1987). In that case the

Court affirmed convictions stemming from the fraudulent misappropriation of pre-

publication Wall Street Journal articles. Id. at 28, 108 S. Ct. at 321-22. In

rejecting the contention that the defendants had not defrauded the Journal of

money or property by disclosing and using the information in the stories before

publication, the Court explained that “[t]he Journal, as [one of the defendant’s]

employer, was defrauded of much more than its contractual right to his honest and

2
The convictions in McNally were based on § 1341 mail fraud, not § 1343 wire fraud.
McNally, 483 U.S. at 352, 107 S. Ct. at 2877. The McNally decision is nonetheless instructive
because “[t]he mail and wire fraud statutes share the same language in relevant part.” Carpenter
v. United States, 484 U.S. 19, 25 n.6, 108 S. Ct. 316, 320 n.6 (1987).
3
Congress responded to McNally by amending the mail fraud statute to include § 1346,
which defines “the term ‘scheme or artifice to defraud’ [to] include[] a scheme or artifice to
deprive another of the intangible right of honest services.” 18 U.S.C. § 1346; see also Belt, 868
F.2d at 1212 n.4. Because the jury in this case was unable to reach a verdict on the § 1346
charge, this appeal involves only the § 1343 money or property fraud charge.

7
faithful service.” Id. at 25, 108 S. Ct. at 320. Indeed, “the object of the scheme

was to take the Journal’s confidential business information . . . and its intangible

nature does not make it any less ‘property’ protected by the mail and wire fraud

statutes. McNally did not limit the scope of § 1341 to tangible as distinguished

from intangible property rights.” Id., 108 S. Ct. at 320.

In this case Fulton County was involved in a competitive bidding process

involving confidential information that, like the information in Carpenter, had

commercial value. Fulton County had an interest in keeping its draft requests for

proposals confidential until they were issued, and it had an interest in keeping

submitted bids confidential until all of them had been received. Otherwise, the

bidding process could become corrupted. As the Supreme Court noted,

“[c]onfidential business information has long been recognized as property.”

Carpenter, 484 U.S. at 26, 108 S. Ct. at 320. The object of the scheme in this case,

like the one in Carpenter, was to take the victim’s confidential information by

disclosing it early to those who could profit from that disclosure. And “its

intangible nature does not make it any less ‘property.’” Id. at 25, 108 S. Ct. at

320.

The Carpenter decision alone is enough to carry our conclusion, but there is

further support for it in our case law. In Belt, we reinstated a conviction on facts

8
that are similar. The defendant in that case pleaded guilty to § 1343 wire fraud

prior to the Supreme Court’s decision in McNally. Belt, 868 F.2d at 1210. The

indictment alleged that by accepting bribes from companies bidding on

subcontracts, Belt had defrauded his employer and deprived it of his honest

services. Id. According to the indictment, Belt provided competing companies

with secret bid information and other confidential documents. Id. After McNally

was decided, the district court overturned Belt’s conviction, concluding that the

indictment was insufficient in view of McNally’s property deprivation

requirement. Id. at 1210 n.2. We reversed the district court’s decision for reasons

that are equally applicable to this case:

[T]he petitioner released confidential business information of his
employer to third parties. In exchange for bribes, Belt released
business information regarding the subcontractor bids submitted . . .
which made the bids submitted higher than they normally would have
been. We see little difference in the character of the confidential
information involved in this case and that involved in Carpenter. In
both cases, the confidentiality of the information was integral to the
proper operation of the employer’s business and to its reputation.
Thus, although the scheme did not cause [Belt’s employer] a direct
monetary loss, like the information in Carpenter, the confidential
information constituted an intangible property right protected under
§ 1343.

Id. at 1213.

9
 For these reasons, the indictment in this case sufficiently alleged a

deprivation of money and property under § 1343.4

2. The Correctness of the Jury Instructions

Defendants contend that even if the indictment were sufficient, the

convictions should be overturned because the jury instructions were improper.

According to defendants, the language in the instructions allowed the jury to

return a guilty verdict upon finding nothing more than a financial gain to

defendants. We review jury instructions only for an abuse of discretion. Roberts

& Schaefer Co. v. Hardaway Co., 152 F.3d 1283, 1295 (11th Cir. 1998).

The jury instructions explained that proof the defendants acted willfully and

with the intent to defraud was essential to a guilty verdict. The instructions

defined the necessary intent as follows: “To act with intent to defraud means to

act knowingly and with the specific intent to deceive someone, ordinarily for the

purpose of causing some financial loss to another or bringing about some financial

gain to one’s self.” (emphasis added). Defendants contend that the “or” in that

definition improperly allowed the jury to convict based only on a finding of

4
As alternative theories, the government contends that the bonds themselves were
property and that the increased spread Fulton County paid on the bids was property. Because we
find that the indictment sufficiently alleged a deprivation of property in the form of confidential
information, we need not reach the government’s alternative theories.

10
financial gain to defendants. The language they focus on, though, defines intent.

Cf. United States v. De La Mata, 266 F.3d 1275, 1299 n.30 (11th Cir. 2001)

(affirming bank fraud conviction where identical words were used to define intent

to defraud). It does not define the offense itself. A complete reading of the

instructions makes clear that a finding of financial gain alone is insufficient for a

conviction. The jury instructions in this case adequately laid out the elements of

money or property wire fraud:

A defendant can be found guilty of [§ 1343 wire fraud] only if all of
the following facts are proved beyond a reasonable doubt. First, that
the defendant knowingly devised or participated in a scheme to
defraud or for obtaining money or property by means of false
pretenses, representations or promises. Second, that the defendant
did so willfully and with an intent to defraud. Third, that the fraud
related to a material matter. And, fourth, that the defendant [used
wire communications].

After receiving that charge, the jury returned its verdict by checking “Guilty”

under “Scheme to defraud Fulton County of money and property” on the special

verdict form. “On appeal, we examine whether the jury instructions and verdict

form, considered as a whole, were sufficient ‘so that the jurors understood the

issues and were not misled.’” McNely v. Ocala Star-Banner Corp., 99 F.3d 1068,

1072 (11th Cir. 1996) (quoting Wilkinson v. Carnival Cruise Lines, Inc., 920 F.2d

1560, 1569 (11th Cir. 1991)). We do not focus on any single sentence in jury

11
instructions because, “[i]f the instructions, taken together, properly express the law

applicable to the case, no reversible error has occurred, even if an isolated clause

may be inaccurate, ambiguous, incomplete, or otherwise subject to criticism.”

Busby v. City of Orlando, 931 F.2d 764, 776 (11th Cir. 1991). Having read the

instructions as a whole and in conjunction with the verdict form, we are satisfied

that the jury did not convict based solely upon a finding of financial gain for the

defendants.

3. The Sufficiency of the Evidence

Defendants contend there was insufficient evidence to sustain their

convictions for money and property wire fraud, which is an issue we decide de

novo. United States v. Suba, 132 F.3d 662, 671 (11th Cir. 1998). We review the

evidence to determine whether “a reasonable jury, viewing the evidence and all

reasonable inferences therefrom in the light most favorable to the government

could find the defendant[s] guilty as charged beyond a reasonable doubt.” United

States v. Navarro-Ordas, 770 F.2d 959, 966 (11th Cir. 1985) (internal citations

omitted).

The government presented evidence that deVegter had a duty to keep Fulton

County’s bidding documents confidential. The request for proposal to which

deVegter responded in landing his position as financial advisor unequivocally

12
stated that “[n]o reports, information, or data given to or prepared by the firm

under the contract shall be made available to any individual or organization by the

firm without the prior written approval of the County.” There was evidence

showing that deVegter accepted those terms, and therefore knew of his

confidentiality obligation. The government also presented evidence that during the

underwriter selection process, deVegter disclosed drafts of the request for

proposal relating to that process to the Lazard firm. Defendants contend that the

drafts were not confidential because they were comprised of public boilerplate

provisions. The evidence, however, permitted the jury to find to the contrary.

Fulton County’s finance director testified that the request for proposal was

“customized” for Fulton County and contained specific numerical assumptions

unique to Fulton County’s project. Besides, even if the drafts had contained only

public provisions, the County’s decision about which public provisions to include

could itself constitute confidential information.

In addition to disclosing drafts of Fulton County’s request for proposal

before its release, there was evidence that deVegter forwarded Poirier a copy of a

proposal submitted by Bear Stearns, a competitor of the Lazard firm. According

to a government witness, Fulton County treated all proposals submitted, including

the Bear Stearns proposal, as confidential until the selection was made public. The

13
reasons the County wanted them kept confidential are obvious, and deVegter even

admitted on cross examination that it would have been improper for him to

disclose the Bear Stearns proposal to another competitor. He denied doing so, but

there was plenty of evidence that he had faxed that proposal to the Lazard firm’s

office. Further, because the jury did not believe deVegter, his demeanor while

testifying may be considered substantive evidence of his guilt. See United States

v. Brown, 53 F.3d 312, 314 (11th Cir. 1995).

Poirier’s involvement in the scheme is also demonstrated by the evidence.

The government presented testimony that Poirier was concerned that his firm was

not in a good position to win the underwriting contract. His concern led him to

authorize the payment to deVegter in exchange for deVegter’s improper

assistance. There was evidence that deVegter’s improper and corrupt assistance

aided Poirier in obtaining the contract for his firm.

In sum, the government presented evidence that deVegter had access to

confidential documents, had a duty to protect them, and improperly disclosed them

to Poirier and others. The evidence also demonstrated that Poirier authorized the

14
illicit payment to deVegter in exchange for deVegter’s assistance. There was

sufficient evidence for a jury to convict deVegter and Poirier.5

B. THE SENTENCE ISSUES

DeVegter contends that even if his conviction stands, his sentence should

not because the district court erroneously applied the U.S.S.G. § 3B1.3

enhancement for abuse of a position of trust. His argument is based on the fact

that he did not have the authority to make the final decision in Fulton County’s

awarding the underwriting business to the Lazard firm. That fact is not

determinative. Fulton County hired deVegter to serve as a fair and unbiased

financial advisor and put him in a position to do that. With that position came

Fulton County’s trust, and deVegter clearly abused it. The enhancement for

abusing a position of trust was appropriate.

The government has cross-appealed contending that the district court: (1)

applied the wrong guideline, and if not, that it incorrectly determined loss under

U.S.S.G. § 2F.1.1(b)(1), and should have imposed the § 2F1.1(b)(2) more than

minimal planning enhancement; (2) should have imposed the obstruction of justice

5
Defendants contend that their conspiracy convictions are based on their wire fraud
convictions and should be reversed if those convictions are. Perhaps so, but we affirm the wire
fraud convictions.

15
enhancement under § 3C1.1; and (3) should have imposed on Poirier an

enhancement based on his leadership role under § 3B1.1.

1. The Applicable Guideline

In sentencing the defendants the district court applied as the base offense

guideline § 2F1.1, which covers offenses involving fraud or deceit. The

government contends it should have applied § 2B4.1, which covers commercial

bribery and kickbacks. We review de novo the district court’s application of the

law to the facts. United States v. Geffrard, 87 F.3d 448, 452 (11th Cir. 1996).

The offense conduct in this case is § 1343 wire fraud.6 The Statutory Index

lists two possible guidelines for that offense, §§ 2C1.7 & 2F1.1. U.S.S.G.

appendix A. We agree with the parties that § 2C1.7 is inapplicable, which leaves

§ 2F1.1. The application of § 2F1.1 leads us to yet another guideline, because

Application Note 14 to § 2F1.1 specifically allows for use of other guidelines in

some circumstances. It says: “[i]n certain . . . cases, the mail or wire fraud

statutes, or other relatively broad statutes, are used primarily as jurisdictional

6
The defendants were also convicted of conspiracy to commit wire fraud. Under the
sentencing guidelines, the two counts of conviction are grouped, and the more serious one is used
for determining the offense conduct. See U.S.S.G. §§ 3D1.2(b) & n.4, 3(a). Here, that is the
wire fraud count.

16
bases for the prosecution of other offenses.” U.S.S.G. § 2F1.1 n.14.7 In those

cases, a court should use another guideline if “the indictment or information

setting forth the count of conviction . . . establishes an offense more aptly covered

by another guideline.” Id.; see also United States v. Kurtz, 237 F.3d 154, 156 (2d

Cir. 2001) (“[W]hen sentencing a defendant . . . under the 2000 version of the

Guidelines, the district court is to look to § 2F1.1; and that section, as explicated

in Application Note 14, gives the court express authority to apply a different

guideline that is ‘more apt[].’”).8 Thus, the question is whether defendants’

7
We follow the Application Note because commentary to the guideline is authoritative
and binding unless it is inconsistent with the Constitution, a federal statute, or the guidelines
themselves. Stinson v. United States, 508 U.S. 36, 37, 113 S. Ct. 1913, 1915 (1993).
8
Until November 2000, the Statutory Index included the following language: “If, in an
atypical case, the guideline section indicated for the statute of conviction is inappropriate because
of the particular conduct involved, use the guideline section most applicable to the nature of the
offense conduct charged in the count of which the defendant was convicted.” U.S.S.G. Appendix
A (1999). Dropping that language was part of an effort “intended to emphasize that the
sentencing court must apply the offense guideline referenced in the Statutory Index for the statute
of conviction unless the case falls within the limited ‘stipulation’ exception set forth in
§ 1B1.2(a).” U.S.S.G. Amendment 591 (explanation). The amendment left in place Application
Note 14 to § 2F1.1 allowing courts to apply a different guideline if the indictment or information
setting forth the count of conviction established an offense “more aptly covered by another
guideline.” U.S.S.G. § 2F1.1 n.14.

The current guidelines merge § 2F1.1 with § 2B1.1 and abandon Application Note 14, but
new § 2B1.1(c)(3) stands in its place and specifies that: “If [certain conditions are not applicable
and] the conduct set forth in the count of conviction establishes an offense specifically covered
by another guideline in Chapter Two (offense Conduct), [courts should] apply that other
guideline.” U.S.S.G. § 2B1.1(c)(3) (2002). The amendment to include § 2B1.1(c)(3):

is more generally applicable and intended to apply whenever a broadly applicable
fraud statute is used to reach conduct that is addressed more specifically in

17
conduct is “more aptly” covered by a guideline other than § 2F1.1, the one for

fraud or deceit.

As we have already explained, Fulton County hired deVegter to provide fair

and disinterested assistance in selecting an underwriter, and deVegter betrayed

Fulton County. In exchange for payment through an intermediary, he gave

confidential documents to Poirier which improperly assisted Poirier’s firm in the

proposal process. We conclude that the defendants’ “conduct more closely

resembled a fraud achieved through bribery than a straight fraud,” United States v.

Montani, 204 F.3d 761, 769 (7th Cir. 2000), and for that reason the § 2B4.1

guideline applies. Our conclusion is supported by other decisions in which courts

have applied the commercial bribery guideline to fraud convictions. See, e.g., id.

(§§ 1341 and 1346 mail fraud convictions sentenced under § 2B4.1); United States

v. Cohen, 171 F.3d 796 (3d Cir. 1999) (§ 1341 mail fraud conviction sentenced

under § 2B4.1); United States v. Josleyn, 99 F.3d 1182 (1st Cir. 1996) (conspiracy

and § 1341 convictions sentenced under § 2B4.1).

another Chapter Two guideline. Prior to this amendment, the fraud guideline
contained an application note [14] that instructed the user to move to another,
more appropriate Chapter Two guideline, under specified circumstances.

U.S.S.G. Amendment 617. For purposes of this appeal, we will apply the 2000 version of the
guidelines because it was in effect at the time of sentencing and the version in effect at the time
of the offense conduct is not more favorable to the defendants. U.S.S.G. § 1B1.11.

18
 The defendants attempt to distinguish Montani on the basis that they, unlike

the defendant in that case, were not convicted of § 1346 honest services fraud.

According to deVegter, “the hallmark of commercial bribery is the deprivation of

honest services.” It is certainly true that accepting or providing bribes is

inconsistent with the delivery of honest services, but that is not to say that the

commercial bribery guideline cannot also be applied to a § 1343 money and

property wire fraud case. The defendants’ conduct in giving and receiving money

in exchange for the misappropriation of documents is “more aptly” covered by the

commercial bribery guideline than by the fraud guideline.

Our decision in United States v. Saavedra, 148 F.3d 1311 (11th Cir. 1998),

is not to the contrary. In that case the Statutory Index to the sentencing guidelines

listed only one guideline for the offense conduct. Id. at 1315. That guideline

contained no applicable cross-references to other guidelines, but the sentencing

court nevertheless applied a different guideline. Id. at 1313. We vacated the

sentence because “[t]here is no provision in the guidelines for borrowing base

offense levels from other offense guidelines.” Saavedra, 148 F.3d at 1316.

In contrast to Saavedra, applying § 2B4.1 in this case does not constitute

unauthorized “borrowing . . . from other offense guidelines,” because “[o]nce the

proper guideline section has been selected, relevant conduct is considered in

19
determining various sentencing considerations within that guideline, including the

base offense level, specific offense characteristics, and any cross-references.” Id.

at 1317 (citing U.S.S.G. § 1B1.3(a)) (emphasis added). We get to § 2B4.1 by

applying § 2F1.1, which is the guideline specifically associated with the offense

conduct. Application Note 14 of § 2F1.1 is essentially a cross reference that sends

us to § 2B4.1. We are not improperly “borrowing . . . from other offense

guidelines,” but instead are applying the offense guideline and its Application

Note.

For these reasons, the sentencing court should have reached and applied

§ 2B4.1 to determine the defendants’ base offense level. We will remand for

correction of that error.

Because we conclude that § 2F1.1 was not the correct guideline, we need

not consider the government’s contentions that the sentencing court incorrectly

determined loss under § 2F1.1, and that it should have imposed that guideline’s

more than minimal planning enhancement.

2. The Obstruction of Justice Enhancement

The sentencing guidelines provide for an increased sentence if a defendant

“willfully obstructed or impeded . . . the administration of justice during the course

of the investigation, prosecution, or sentencing.” U.S.S.G. § 3C1.1. The

20
government contends that the district court erred in not enhancing defendants’

sentences under this provision.

We review a district court’s determination about whether a defendant

obstructed justice only for clear error, United States v. Cain, 881 F.2d 980, 982

(11th Cir. 1989), and “[w]e will not find clear error unless our review of the record

leaves us ‘with the definite and firm conviction that a mistake has been

committed,’” Coggin v. Commissioner, 71 F.3d 855, 860 (11th Cir. 1996) (quoting

United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S. Ct. 525, 542

(1948)). That high standard is met in this case.

The record clearly establishes that both defendants obstructed justice. They

each provided false testimony to the Securities and Exchange Commission in an

effort to conceal their conduct. In addition, each of them encouraged another

person to provide false testimony. DeVegter tried to convince Nat Cole, a

middleman in the scheme, to sign a false affidavit, and Poirier persuaded a

colleague of his at the Lazard firm, Jim Eaton, to lie to the SEC. Finally, deVegter

provided false testimony at trial and stubbornly maintained his incredible

testimony that the money he received was for legitimate, unrelated consulting

engagements. In the face of all this evidence of obstruction, the sentencing court,

without further explanation, simply said: “I find there is no willful attempt by

21
either defendant to obstruct the investigation, nothing in the defendants’ conduct

that would warrant an obstruction adjustment, so there will be no enhancement.”

We are left with the definite and firm conviction that the sentencing court should

have applied the enhancement for obstruction of justice to both defendants. Its

inexplicable finding that the defendants did not obstruct justice is clearly

erroneous, and must be corrected on remand.

3. The Aggravating Role Enhancement for Poirier

The guidelines provide for an enhancement where a defendant was an

organizer, leader, manager, or supervisor in the criminal activity. U.S.S.G.

§ 3B1.1. A two-level increase in the offense level is required “[i]f the defendant

was an organizer, leader, manager, or supervisor in any criminal activity” and the

offense did not “involve[] five or more participants or was otherwise extensive”

(in which case a three- or four-level increase would be required). U.S.S.G.

§ 3B1.1(c), (b). In this case the sentencing court declined to enhance either

defendant’s sentence for an aggravating role. The government accepts that

decision as it involves deVegter, but contends that the enhancement should have

been applied in Poirier’s case.

We review only for clear error a sentencing court’s decision about whether

to impose an aggravating role enhancement. United States v. Phillips, 287 F.3d

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1053, 1055 (11th Cir. 2002). The evidence at trial established that Poirier

supervised Jim Eaton at the Lazard firm, and that he authorized the corrupt payoff

to a person who passed half the money on to deVegeter. To qualify for an increase

under § 3B1.1, “the defendant must have been the organizer, leader, manager, or

supervisor of one or more other participants.” U.S.S.G. § 3B1.1 n.2. The

evidence at trial read in light of the guilty verdict establishes that Eaton was a

participant in the criminal activity as defined by the guidelines, id. n.1, and Poirier

was his superior, his supervisor, and his manager. The district court did not find

to the contrary, but instead simply and inexplicably failed to apply the

enhancement. That was clear error. On remand the § 3B1.1(c) enhancement must

be applied to Poirier.

III. CONCLUSION

The convictions of deVegter and Poirier are AFFIRMED. The sentencing

decisions of the district court are AFFIRMED IN PART and REVERSED IN

PART, and the case is REMANDED to the district court for resentencing. At

resentencing, the court must apply in both cases the § 2B4.1 offense guideline and

the obstruction of justice enhancement, and in Poirier’s case it must apply the

§ 3B1.1(c) aggravating role enhancement.

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