UNITED STATES COURT OF APPEALS
For the Fifth Circuit
No. 94-20951
UNITED STATES OF AMERICA
Plaintiff-Appellee
VERSUS
KENNETH LEE ADERHOLT
Defendant-Appellant
Appeal from the United States District Court
for the Southern District of Texas
June 28, 1996
Before SMITH, DUHÉ, and DeMOSS, Circuit Judges.
DUHÉ, Circuit Judge:
Appellant, Kenneth Lee Aderholt, was charged with one count of
conspiracy to commit mail fraud and three counts of aiding and
abetting mail fraud in violation of 18 U.S.C. §§ 2, 371 and 1341.
He pled guilty to the conspiracy count and one of the aiding and
abetting counts. He was sentenced to two consecutive terms of 60
months imprisonment. Aderholt appeals his sentence claiming the
Government acted in bad faith in failing to move for a downward
departure for substantial assistance and because his sentence was
calculated using the base offense level for murder. We affirm on
the substantial assistance issue but reverse, vacate and remand on
the use of the offense level for murder.
Aderholt and Christopher Mylett,1 created a partnership,
Empire Premium Finance Company (Empire). They named Scott Houck,
a bouncer at various Houston topless bars, president. Appellant
and Mylett then insured Houck’s life for $500,000 with an Allstate
“key man” life insurance policy which they obtained with the use of
falsified documents.
Within three weeks, Houck’s body was found in the trunk of his
car at Hobby Airport in Houston, Texas. At Mylett’s urging,
Appellant filed a claim on the insurance policy even though he
believed that Mylett either murdered or orchestrated the murder of
Houck. Aderholt claims he was not involved in the murder and never
believed that Houck’s murder was part of the scheme. Aderholt
persisted in his not guilty plea until the eve of trial.
Aderholt pled guilty to two of the four counts in the
indictment and agreed to cooperate fully with the Government. In
consideration for Aderholt’s plea, the Government agreed to dismiss
the two remaining counts, not oppose a finding of acceptance of
responsibility, and not prosecute Aderholt further for offenses
arising from the conduct charged in the indictment. The plea
agreement further states:
The United States reserves its option to seek any
departure from the applicable sentencing guidelines,
pursuant to United States Sentencing Guidelines § 5K1.1,
or Rule 35(b) of the Federal Rules Criminal Procedure, if
in the sole discretion of the United States, it is
determined that such a departure is appropriate.
1
Christopher Mylett was tried and convicted on all four counts
of the indictment. His appeal is pending.
2
During the taking of the plea, the prosecutor stated:2
[T]here is language in the plea agreement to the extent
that should Mr. Aderholt’s cooperation result in
substantial assistance under 5K1.1 of the sentencing
guidelines, that in the sole discretion of the United
States, the United States may move for a downward
departure based on that cooperation. Again, that is
within the sole discretion of the United States and the
United States will not waive that discretion.
Defendant stated that he agreed to and understood the terms
outlined by the government.
The Government did not move for downward departure. Aderholt
argues that the Government negotiated the plea agreement in bad
faith because it never intended to file a § 5K1.13 motion, and the
Government breached the plea agreement by refusing to file the
motion. Whether the government’s conduct violates a plea agreement
is a question of law. United States v. Hernandez, 17 F.3d 78, 80-
81. (5th Cir. 1994). In determining whether the terms of a plea
agreement have been violated, the court must determine whether the
government’s conduct is consistent with the parties’ reasonable
understanding of the agreement. Id. at 81.
Under the guideline,4 the Government is not required to file
2
The prosecutor prefaced his address by stating that his words
were not intended to amend or modify the terms of the written
agreement.
3
The 1993 edition of the United States Sentencing Commission
Guidelines Manual was used this case.
4
Section 5K1.1 states in part:
Upon motion of the government stating that the defendant
has provided substantial assistance in the investigation
of prosecution of another person who has committed an
offense, the court may depart from the guidelines.
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a § 5K1.1 motion but instead is granted discretion to do so. Wade,
504 U.S. at 185; United States v. Garcia-Bonilla, 11 F.3d 45, 46
(5th Cir. 1993). While the Government can bargain away its
discretion, it did not do so in this case. See Garcia-Bonilla, 11
F.3d at 46-47 (plea agreement with nearly identical language did
not bargain away prosecutorial discretion). If the Government
retains sole discretion to file the motion, its refusal to file is
reviewable only for unconstitutional motives such as the race or
religion of the accused. Garcia-Bonilla, 11 F.3d at 46-47.
Appellant does not assert that the Government’s refusal was
motivated by unconstitutional considerations.
Appellant argues that he offered all assistance that he
possibly could and that under the rules of United States v.
Hernandez, 17 F.3d 78 (5th Cir. 1994) and United States v. Wilder,
15 F.3d 1292 (5th Cir. 1994), he is entitled to a downward
departure for substantial assistance. Implicitly, Aderholt asks
this Court to determine whether his actions amounted to substantial
assistance as in Hernandez and Wilder. We cannot do so in this
case.
In both Hernandez and Wilder, the Government bargained away a
measure of its discretion when it agreed to move for a downward
departure if the accused rendered substantial assistance.
Therefore, those panels of this Court were required to evaluate the
Government’s conduct in light of the agreement. Here, the
Government did not bargain away any of its discretion and its
refusal to file a motion for downward departure is subject to the
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more limited review for unconstitutional motivation.
Appellant also argues that the Government’s retention of sole
discretion violates Appellant’s right to due process in two ways.
First, the retention of sole discretion puts the prosecutor’s
actions beyond review by the court. Second, the possibility of a
§ 5K1.1 motion was an inducement for the plea which requires that
Appellant give up constitutional rights and implicates due process.
Defendants have no constitutional right to a “substantial
assistance” departure. United States v. Harrison, 918 F.2d 30 (5th
Cir. 1990). The refusal to move for downward departure is
reviewable only for unconstitutional motivation when sole
discretion is retained. And, as recognized by this Court in United
States v. Watson, 988 F.2d 544, 552 (5th Cir. 1993), the
implication of the principle of just return for giving up
constitutional rights requires the existence of a plea bargain in
which the Government bargains away its discretion. There can be no
inducement when the Government retains sole discretion.
Appellant’s due process challenge is without merit.
Appellant also challenges the calculation of his sentence. A
sentence based on the Sentencing Guidelines must be upheld unless
the Appellant demonstrates that it was imposed in violation of the
law, was imposed as a result of an incorrect application of the
guidelines, or was outside the range of the applicable guidelines
and was unreasonable. 18 U.S.C. § 3742(e). Because Aderholt
asserts a ground of error not raised below, the judgment may be
reversed only upon a finding of plain error. Fed. R. Crim. P.
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52(b); United States v. Olano, 507 U.S. 725 (1993); United States
v. Calverley, 37 F.3d 160 (5th Cir. 1994)(en banc).
To determine Defendant’s base offense level, the district
court5 grouped the four counts in the indictment, and pursuant to
§§ 3D1.2 and 3D1.3, purported to choose the offense level for the
most serious offense. The district court chose the offense level
for murder because, relying on § 3D1.2 application note 8, §
1B1.2(d) and § 1B1.2 application note 5, it concluded that murder
was an object of the conspiracy.
Section 3D1.2 application note 8 advises:
A defendant may be convicted of conspiring to commit
several substantive offenses . . . In such cases, treat
the conspiracy count as if it were several counts, each
charging conspiracy to commit one of the substantive
offenses. See § 1B1.2(d) and accompanying commentary.
Section 1B1.2(d) states:
A conviction on a count charging a conspiracy to commit
more than one offense shall be treated as if the
defendant had been convicted on a separate count of
conspiracy for each offense that the defendant conspired
to commit.
Application note 5 to § 1B1.2 elaborates:
Particular care must be taken in applying subsection (d)
because there are cases in which the verdict or plea does
not establish which offense(s) was the object of the
conspiracy. In such cases, subsection (d) should only be
applied with respect to an object offense alleged in the
conspiracy count if the court, were it sitting as a trier
of fact, would convict the Defendant of conspiracy to
commit the object offense.
Defendant was ultimately sentenced to the statutory maximum
5
The district court adopted the calculations contained in the
Presentence Investigation Report.
6
sentences for conspiracy to commit and aiding and abetting mail
fraud because his total offense level exceeded the statutory
maximum sentences for the offenses of conviction. U.S.S.G. §
5G1.1; 18 U.S.C. §§ 371 and 1341. Had the base offense level for
mail fraud been used, Defendant’s potential sentence under the
guidelines would have been less than the statutory maximums.
Defendant argues that conspiracy to commit murder could not be
used to calculate the base offense level because he was not charged
with and did not plead guilty to conspiracy to commit murder. We
agree. Both § 3D1.2 application note 8 and § 1B1.2(d) apply when
a defendant is convicted of conspiring to commit more than one
offense. Aderholt was convicted of conspiring to commit only one
offense, mail fraud. The conspiracy count charges that Defendant
“did knowingly combine, conspire, confederate and agree . . . to
commit an offense against the United States, specifically, to use
the mail in execution of a scheme to defraud, in violation of Title
18, United States Code, Section 1341.” While the murder is
mentioned in section C of that count entitled “The Manner and Means
of the Conspiracy”, Aderholt was not charged with murder. In fact,
the Government concedes that Appellant could not have been
convicted in federal court for conspiracy to commit this murder
because this murder is a state offense.
Section 1B1.2 application note 5 also offers no support. It
applies to “cases in which the verdict or plea does not establish
which offense(s) was the object of the conspiracy.” Here, the
indictment clearly charges only conspiracy to commit mail fraud and
7
eliminates the need for the sentencing court to determine what
other offenses may be objects of the conspiracy.
The Government argues that conspiracy to commit murder is an
offense eligible for use in sentencing because “offense” includes
relevant conduct. The Guidelines define “offense” as “the offense
of conviction and all relevant conduct under § 1B1.3 (Relevant
Conduct) unless a different meaning is specified or is otherwise
clear from the context.” U.S.S.G. § 1B1.1 Application Note 1(l).
Both § 3D1.2 application note 8 and § 1B1.2(d) refer to the offense
of conviction, not merely offense as contemplated by the
definition. In these contexts, “offense” does not include relevant
conduct.
Finding that the district court erroneously applied the
Sentencing Guidelines, we must decide whether the error is plain
and affects substantial rights. Calverley, 37 F.3d at 162. Plain
means clear or obvious. Olano, 509 U.S. at 734. Affects
substantial rights, in most cases, means prejudicial, that is,
affected the outcome of the district court proceedings. Olano, 509
U.S. at 734-735. Both requirements are satisfied. The error is
evident from a plain reading of the statute and thus, is obvious.
See United States v. Smith, 80 F.3d 1188 (7th Cir. 1996).
Defendant was prejudiced by the error because, absent an upward
departure, he would have received a lesser sentence.
Rule 52(b), however, is permissive, not mandatory. We have
authority to order correction, but we are not required to do so.
Olano, 509 U.S. at 735. We should correct a plain error when the
8
error “seriously affect[s] the fairness, integrity or public
reputation of judicial proceedings.” Olano, 509 U.S. at 736
(quoting United States v. Atkinson, 297 U.S. 157 (1936)). In light
of the sentencing calculation errors, we think the fairness and
integrity of this judicial proceeding were seriously affected.
United States v. Franks, 46 F.3d 402 (5th Cir. 1995).
We AFFIRM in part, REVERSE in part, VACATE the sentence and
REMAND for resentencing.
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