United States v. Hernandez

United States Court of Appeals,

Eleventh Circuit.

No. 96-8775.

UNITED STATES of America, Plaintiff-Appellee,

v.

Frank J. HERNANDEZ, Defendant-Appellant.

Nov. 9, 1998.

Appeal from the United States District Court for the Southern District of Georgia. (No. CR495-170),
B. Avant Edenfield, Judge.

Before TJOFLAT, BIRCH and MARCUS*, Circuit Judges.

TJOFLAT, Circuit Judge:

I.

In April 1993, Frank J. Hernandez, the owner and operator of a number of business

enterprises in southern Georgia, filed three voluntary petitions in the bankruptcy court for the

Southern District of Georgia. Hernandez sought relief under Chapter 11 of the United States

Bankruptcy Code for himself, personally, and for two of his business enterprises.1 These Chapter

11 cases were consolidated on June 7, 1993, and later converted to Chapter 7 cases because the

debtors were insolvent. During the pendency of both the Chapter 11 and Chapter 7 proceedings,

*
Honorable Stanley Marcus was a U.S. District Judge for the Southern District of Florida,
sitting by designation as a member of this panel, when this appeal was argued and taken under
submission. On November 24, 1997, he took the oath of office as a United States Circuit Judge
of the Eleventh Circuit.
1
On April 21, 1993, Classic Collision and Insurance Repairs, Inc., filed for relief under
Chapter 11, and on April 29, 1993, Classic Auto Painting and Bodyworks, Inc., did the same.
Frank Joseph Hernandez d/b/a/ Classic Auto Painting and Bodyworks also filed for relief on
April 21, 1993.
Hernandez committed fraud on the bankruptcy court by concealing assets and liabilities and

appropriating funds paid to his businesses by its customers.

On August 10, 1995, a grand jury returned a thirteen-count indictment against Hernandez,

charging him with bankruptcy fraud in violation of 18 U.S.C. § 152 (1994). On March 4, 1996,

pursuant to a plea agreement, Hernandez pled guilty to five counts of the indictment.2 Sentencing

was scheduled for June 13, 1996, following the preparation of a presentence investigation report

(PSI) by the court's probation office.

At the sentencing hearing, Hernandez objected to several factual statements in the PSI on

the ground that the information supporting the statements was unreliable. This information had been

provided by the FBI agent who investigated the case. The agent testified at the hearing and, after

entertaining argument from counsel, the district court found that the challenged information was

reliable. Following the testimony of two defense witnesses—a physician who said that Hernandez

suffered from angina and was recovering from a heart attack, and a psychiatrist who said that

Hernandez had an IQ of 84 and had difficulty paying attention to detail—the court adopted as its

findings of fact the factual statements contained in the PSI.

According to the PSI, the Sentencing Guidelines, see United States Sentencing Commission,

Guidelines Manual (Nov. 1, 1995), ranked Hernandez' offenses at level sixteen on the offense

severity scale, and his criminal history as category I. This combination yielded a sentence range of

twenty-one to twenty-seven months. The probation officer who prepared the PSI recommended that

the court make an upward departure to category III with respect to Hernandez' criminal history level,

2
As part of that plea agreement, the Government agreed to dismiss the remaining eight counts
of the indictment. These counts were dismissed at Hernandez' sentencing hearing.

2
which would yield a sentence range of twenty-seven to thirty-three months. After hearing from the

parties on the issue, the court fixed Hernandez' criminal history category at II, which, combined with

his offense level of sixteen, yielded a sentence range of twenty-four to thirty months. Then,

following Hernandez' allocution, the court imposed sentence: thirty months imprisonment on each

count, with the terms to run concurrently, to be followed by a three-year term of supervised release,

and a fine of $3,000 on each count, for a total of $15,000.

After imposing sentence, the court elicited the parties' objections, in accordance with

Eleventh Circuit precedent. See United States v. Jones, 899 F.2d 1097, 1102 (11th Cir.1990),

overruled on other grounds by United States v. Morrill, 984 F.2d 1136, 1137 (11th Cir.1993) (en

banc). The Government had no objections. Hernandez renewed the objections he had made to the

PSI prior to the sentencing hearing, as indicated above; he did not, however, make any new

objections. Specifically, he did not object to the court's imposition of the $15,000 fine or the

sentences of imprisonment.

II.

Hernandez now appeals his sentences, presenting four claims of error. First, he contends that

the district court erred by: (1) fining him $15,000 when the PSI suggested he would be unable to

pay a fine; (2) including the proceeds from the sale of two cars in the calculation of loss under

U.S.S.G. § 2F1.1(b)(1) used to determine his base offense level; (3) failing to decrease his base

offense level by two points under U.S.S.G. § 3E1.1(a) for his acceptance of responsibility; and (4)

making, in accordance with U.S.S.G. § 4A1.3, an upward departure from criminal history category

I to criminal history category II. We address these claims in order.

A.

3
 Hernandez contends that the district court erred by imposing the $15,000 fine because he

is unable to pay a fine. In support of this contention, he cites the PSI, which states that "the

defendant does not have the ability to pay a fine within the applicable fine range." Unfortunately

for Hernandez, his attorney made no objection at the sentencing hearing to the district court's

imposition of the fine. As a result, we review the court's decision for plain error, and will only upset

the decision if disregarding the error would result in "manifest injustice." See Jones, 899 F.2d at

1103. "This court has equated the manifest injustice inquiry with review under the plain error

doctrine." United States v. Newsome, 998 F.2d 1571, 1579 (11th Cir.1993).

The Sentencing Guidelines require courts to "impose a fine in all cases, except where the

defendant establishes that he is unable to pay and is not likely to become able to pay any fine."

U.S.S.G. § 5E1.2(a) (emphasis added). It is clear from section 5E1.2 that the burden is on the

defendant to prove an inability to pay the fine. If the sentencing court concludes that a fine is

appropriate, the Guidelines Manual lists several factors it should consider in determining the amount

of the fine.3 Circuits are split on whether a court must make specific factual findings with respect

3
The Sentencing Guidelines list the following considerations as important in determining the
appropriate fine:

(1) the need for the combined sentence to reflect the seriousness of the offense ..., to promote
respect for the law, to provide just punishment and to afford adequate deterrence;

(2) any evidence presented as to the defendant's ability to pay the fine (including the ability to
pay over a period of time) in light of his earning capacity and financial resources;

(3) the burden that the fine places on the defendant and his dependents relative to alternative
punishments;

(4) any restitution or reparation that the defendant has made or is obligated to make;

(5) any collateral consequences of conviction, including civil obligations arising from the

4
to these factors. See United States v. Lombardo, 35 F.3d 526, 529 (11th Cir.1994). While some

circuits require that the district court make specific findings, See id., we have adopted the less rigid

approach, and do not require the sentencing court to make specific findings of fact with respect to

the Sentencing Guideline factors as long as " "the record reflect[s] the district court's consideration

of the pertinent factors prior to imposing the fine.' " Id. at 530 (quoting United States v.

Washington-Williams, 945 F.2d 325, 328 (10th Cir.1991)). Of course, when the record provides no

guidance as to the court's reason(s) for imposing a fine, we must remand the case so that the

necessary factual findings can be made. See United States v. Rowland, 906 F.2d 621, 624 (11th

Cir.1990).

Had Hernandez objected to the fine, the district court could have addressed more specifically

on the record its reasons for imposing the fine. That was the purpose of our holding in Jones:

requiring the district court to seek objections from both parties after the pronouncement of the

sentence "serve[s] the dual purpose of permitting the district court to correct on the spot any error

it may have made and of guiding appellate review." Jones, 899 F.2d at 1102. Perhaps the court

would have, in the face of such an objection, made more specific findings on the record regarding

Hernandez' ability to pay, or after hearing evidence of his financial status, it may have imposed a

lesser fine—perhaps even a fine below that prescribed by the Sentencing Guidelines. Hernandez

did not make such an objection, however, and therefore the district court had no notice of the need

defendant's conduct;

(6) whether the defendant previously has been fined for a similar offense; and

(7) any other pertinent equitable considerations.

U.S.S.G. § 5E1.2(d).

5
to make further findings with respect to the fine. As a result, there is nothing in the record to guide

us in our review of the court's judgment.

While it is unclear what factors the court relied upon in imposing the fine, the record

suggests that Hernandez may be able to pay a $15,000 fine. For example, Hernandez owned a

$500,000 home and a $500,000 yacht immediately prior to seeking bankruptcy relief. In addition,

the PSI indicates that he was waiting until after the bankruptcy proceedings concluded to accept the

remaining payments due on his sale of a Dairy Queen franchise. Finally, his unwillingness to

answer specific questions concerning his financial dealings put to him by the probation officer who

prepared the PSI may permit the inference that he is still concealing assets from the bankruptcy

trustee. Given these circumstances, we conclude that sustaining the imposition of the $15,000 fine

will not result in manifest injustice. We therefore affirm the district court's imposition of the fine.

B.

Hernandez' second assignment of error involves the inclusion of $22,100—proceeds from

the auction sale of two of his automobiles—in the amount used to determine his base offense level.

In conjunction with Hernandez' bankruptcy proceedings, the FBI case agent located two

automobiles—a Dodge Intrepid and a Chevrolet Corvette—for sale on the grounds of a business

owned by Hernandez' brother. The contact telephone number found on the cars was that of

Hernandez. The agent notified the bankruptcy trustee, who moved the bankruptcy court to have the

cars seized for fear that Hernandez would conceal the proceeds derived from their sale. The court

granted the motion, and the trustee seized the cars and sold them at a public auction.

Hernandez argues that the inclusion of these funds in the calculation of loss for sentencing

purposes was improper. Under the Guidelines Manual, a court may use, in calculating the base

6
offense level, the loss that a defendant intended to inflict through fraudulent conduct, if that intended

loss is greater than the actual loss, and if the loss can be determined. See U.S.S.G. § 2F1.1,

comment. (n.7). The court must make that determination consistent with section 2X1.1, see id.,

which permits adjustments to a base offense level "for any intended offense conduct that can be

established with reasonable certainty." U.S.S.G. § 2X1.1(a). Hernandez argues that this language

forces the Government, in its attempt to show intended loss, to demonstrate the facts of its case to

a higher standard—with reasonable certainty—than the normal preponderance of the evidence

standard. According to Hernandez, the Government failed to show with reasonable certainty that

the cars belonged to Hernandez and that he intended to conceal their sale proceeds from the

bankruptcy trustee. We review the district court's determination of the amount of loss for clear error.

See United States v. Toussaint, 84 F.3d 1406, 1407 (11th Cir.1996).

In Toussaint, the court included in the amount of loss $360,000 in disaster loan proceeds that

Toussaint had fraudulently claimed in the aftermath of Hurricane Andrew, even though he never

actually received the funds. The court did not accept Toussaint's claim that this amount should not

be included in the loss calculation for sentencing purposes. See id. "The fact that no loss occurred

is immaterial to the inquiry of whether Toussaint intended to keep the loan amount; it is this intent,

whether or not brought to fruition, that the enhancement is meant to address." Id. at 1408.

In our case, it was equally reasonable for the court to conclude that Hernandez would have

kept the proceeds from the sale of his cars found at his brother's business by the case agent.

According to the PSI, Hernandez had engaged in an eighteen-month scheme to defraud the

bankruptcy court in a multitude of ways. In light of his other efforts to defraud the bankruptcy court,

his failure to disclose his intent to sell the cars, and his placement of the cars on his brother's

7
property rather than his own (evidence of his intent to hide the sale of the cars), the court could

conclude that Hernandez would have concealed the proceeds from the sale of the cars.

As to Hernandez' argument that he did not own the vehicles, it was not unreasonable for the

district court, in light of the case agent's testimony, to conclude that either Hernandez or a

corporation in which he was the primary (if not sole) equity holder owned the vehicles. At any rate,

"ownership" is irrelevant in this case. It clearly was reasonable for the district court to conclude

that, regardless of ownership, Hernandez personally would have received income from the sale of

the vehicles, and that he thereafter would have concealed that income from the bankruptcy trustee.

Therefore, the district court did not err by including the proceeds from the auction of the vehicles

in the total loss calculation for purposes of determining Hernandez' base offense level.

C.

Third, Hernandez claims that the district court erred in denying a two point downward

adjustment to his offense level pursuant to U.S.S.G. § 3E1.1(a) for his acceptance of responsibility.

"Whether a defendant is entitled to a sentence reduction for acceptance of responsibility is a factual

determination that must be affirmed on appeal unless clearly erroneous." United States v. Hromada,

49 F.3d 685, 688-89 (11th Cir.1995).

Hernandez pled guilty to the bankruptcy fraud, and he "comfortably accepted responsibility

for the counts of the conviction," according to the PSI. Based on these facts, Hernandez argues that

he fulfilled the requirements of acceptance of responsibility necessary for a downward adjustment.

The PSI, however, recommended that the court not grant the two point downward adjustment for

acceptance of responsibility because Hernandez failed to answer specific questions about how he

carried out the fraud; in fact, he "denied the manner in which the fraud was perpetrated."

8
Hernandez argued before the sentencing court that he was unable because of his limited intelligence

to recall the details of his criminal conduct—a limitation that prevented him from answering the

inquiries of the probation officer. To support this assertion, Hernandez offered the testimony of a

psychiatrist, Dr. Selma DeJesus-Zayas. Dr. DeJesus-Zayas testified that Hernandez had an I.Q. of

84, and that he had a particular inability to pay attention to detail. Dr. DeJesus-Zayas concluded that

the incomplete responses Hernandez gave to the probation officer regarding his specific conduct

were consistent with this inability. On cross-examination, however, Dr. DeJesus-Zayas conceded

that Hernandez would have been aware of his conduct if he had altered invoices in his business or

if he had failed to report money he received from customers. Dr. DeJesus-Zayas further agreed that

Hernandez had a tendency to lie at times.

Whether to grant a downward adjustment based on acceptance of responsibility is a matter

committed to the district court's discretion. See United States v. Thompson, 976 F.2d 666, 673 (11th

Cir.1992). In particular, we have held that a sentencing court may deny the two point reduction

when the defendant "denies relevant conduct which the court finds to be true," because that denial

is "inconsistent with the acceptance of responsibility." United States v. Diaz, 138 F.3d 1359, 1364

(11th Cir.1998). Applying these principles to our case, it was not clear error for the district court

to deny the two point adjustment to Hernandez because he denied certain parts of his bankruptcy

fraud and refused to answer specific questions about other conduct that he had admitted. Even his

own expert witness testified that Hernandez would be aware of the conduct about which he was

questioned, if he in fact engaged in such conduct.

How much weight to place on the testimony of Dr. DeJesus-Zayas, and on the contentions

of the defense that Hernandez had done all he could given his limited intelligence, are factual

9
determinations. We find ample evidence in the record to support the district court's denial of a two

point reduction for acceptance of responsibility, and therefore affirm the district court's decision.

D.

Hernandez next argues that the district court erred by using an upward departure to raise his

criminal history category under the Sentencing Guidelines from a category I to a category II. We

review the district court's departure for abuse of discretion. See Koon v. United States, 518 U.S. 81,

91, 116 S.Ct. 2035, 2043, 135 L.Ed.2d 392 (1996). This review involves a three-part inquiry.

"First, we deferentially review the district court's determination of whether the facts of a case take

it outside the heartland of the applicable guideline." United States v. Hoffer, 129 F.3d 1196, 1201

(11th Cir.1997). Next, we determine whether the departure factor upon which the district court

relied "has been categorically proscribed, is encouraged, encouraged but taken into consideration

within the applicable guideline, discouraged, or not addressed by the [Sentencing] Commission."

Id. Finally, we review deferentially the remaining factual issues, including whether the factor relied

on by the court to depart upward is present to such a degree as to warrant an upward departure. See

id.; see also United States v. Miller, 146 F.3d 1281, 1284 (11th Cir.1998).

In departing upward pursuant to U.S.S.G. § 4A1.3 with respect to Hernandez' criminal

history category, the district court concluded that "the defendant's Criminal History Category I

under-represents the seriousness of the defendant's criminal history and the likelihood that he will

commit further crimes." Specifically, the court identified three incidents of deposit account fraud,

for which Hernandez was not convicted, and a fraud Hernandez committed "in violation of the Fair

Labor Standards Act while perpetrating the instant offense," as conduct justifying the upward

departure. The court found that this conduct was "similar to that of the instant offense." According

10
to the court, the fact that this similar conduct did not result in points used to calculate Hernandez'

criminal history category caused that category to under-represent his prior record and his likelihood

of recidivism.

Sentencing Guidelines section 4A1.3 permits a court to impose "a sentence departing from

the otherwise applicable guideline range" if there is reliable evidence that indicates that the

defendant's criminal history category does not adequately reflect his likelihood of recidivism or the

seriousness of his prior criminal conduct. U.S.S.G. § 4A1.3. Among other things, the court may

consider: (1) "prior similar misconduct established by a civil adjudication"; (2) "whether the

defendant was pending trial or sentencing on another charge at the time of the instant offense"; and

(3) "prior similar adult criminal conduct not resulting in a criminal conviction." U.S.S.G. §

4A1.3(c)-(e).

Hernandez argues that the conduct the district court relied upon in making the upward

departure was not established by reliable information and was not "similar" for purposes of U.S.S.G.

§ 4A1.3(c) and (e). The probation officer based his recommendation of an upward departure in part

on "a large number of customer complaints involving the defendant's verbally abusive and assaultive

behavior." Hernandez counters that the information gathered by the probation officer regarding his

abusive behavior is not reliable, and that in any case abusive behavior is not similar to the

bankruptcy fraud for which he pled guilty. Furthermore, Hernandez argues that the district court

improperly relied on his arrest record in departing upward. Finally, Hernandez complains that the

court erred in considering his violation of the Fair Labor Standards Act in making the upward

departure.

11
 During the pronouncement of the sentence, the district court gave the following justification

for the upward departure:

As discussed in Part B of the presentence report, the defendant was charged with
three counts of deposit account fraud, and that was subsequently dismissed. And committed
a fraud in violation of the Fair Labor Standards Act while perpetrating the instant offense.

Therefore, since the prior civil adjudication and prior fraudulent conduct which did
not result in criminal history points is similar to that of the instant offense, the Court
concludes that the defendant's criminal history category under-represents his prior record and
likelihood that he will commit future crimes. As such, the Court has determined that the
defendant's prior record is more accurately represented at a minimum under Criminal History
Category II.

The court did not rely on Hernandez' "alleged abusive conduct" in pronouncing the sentence.

Therefore, we need not address his claims regarding the abusive conduct.

Hernandez' arguments with respect to the Fair Labor Standards Act violation and the three

counts of deposit account fraud, however, deserve discussion. We first discuss the Fair Labor

Standards Act violation. According to the PSI, Hernandez failed to pay his employees in accordance

with minimum wage and overtime payment guidelines established pursuant to the Fair Labor

Standards Act. The district court issued an order instructing Hernandez to adhere to the terms and

conditions of a settlement agreement reached with the Department of Labor regarding that violation.

The PSI stated that Hernandez failed to meet the requirements of that settlement agreement.4 He

4
The record on this issue is sparse. While Hernandez did not object to the court's
characterization of the settlement and order as a "civil adjudication," little information exists as
to whether this conduct was actually "established by civil adjudication or by a failure to comply
with an administrative order." U.S.S.G. § 4A1.3(c). During the sentencing hearing, Hernandez'
only objections were that "the information [regarding the Fair Labor Standards Act violation]
does not establish nor indicate any criminal misconduct," and that "there are no grounds for an
upward departure pursuant to U.S.S.G. § 4A1.3." Only in his brief to this court did he raise any
question about the reliability of the PSI's statements. Furthermore, even where Hernandez' brief
discusses this civil violation in the context of U.S.S.G. § 4A1.3(c), it makes no mention of the
lack of a civil adjudication. Because we conclude, infra, both that the court committed error in

12
argues that some of the evidence regarding that conduct is in dispute, and that at any rate it does not

reveal any similar criminal misconduct on which to base an upward departure. Hernandez

challenges the court's reliance on that conduct because it "neither establishes nor indicates any

criminal misconduct." Section 4A1.3(c), however, does not require that the information relied on

by the district court establish similar criminal misconduct; rather, the court may rely on "similar

misconduct established by a civil adjudication." (emphasis added). As stated earlier, the phrase

"similar misconduct" appears elsewhere in the Sentencing Guidelines. In chapter eight, the

Guidelines Manual defines similar misconduct as "conduct that is similar in nature to the conduct

underlying the instant offense." U.S.S.G. § 8A1.2 n. 3. The explanatory note states, for example,

that Medicare fraud would be misconduct similar to another type of fraud. See id. Although the

definition originates in a different chapter of the Guidelines Manual, the circumstances are

sufficiently analogous to permit its application here.5

departing upward based on the arrest record and that the error was harmless, we need not further
examine the question of whether the district court correctly based its upward departure on the
Fair Labor Standards Act violation.
5
As a general rule, definitions found in § 1B1.1 of the Sentencing Guidelines are applicable to
all chapters of the Guidelines. Definitions found in specific chapters, however, "are not designed
for general applicability; therefore, their applicability to sections other than those expressly
referenced must be determined on a case by case basis." U.S.S.G. § 1B1.1 n. 2. As such, the
definition of "similar misconduct" found in chapter eight, which addresses the sentencing of
organizations, does not generally apply to the Sentencing Guidelines. We therefore must
examine chapter eight to determine whether its use of that phrase is analogous to chapter four's
use of the same phrase. Section 8C2.5(c), entitled "Prior History," reads as follows:

If more than one applies, use the greater:

(1) If the organization (or separately managed line of business) committed
any part of the instant offense less than 10 years after (A) a criminal
adjudication based on similar misconduct; or (B) civil or administrative
adjudication(s) based on two or more separate instances of similar

13
 Section 4A1.3(c) by its terms necessarily includes misconduct other than criminal

misconduct, because civil adjudications do not establish criminal misconduct. We find it more

appropriate to focus on the word "nature" in the definition of similar misconduct. According to the

district court, the nature of his conduct in both offenses—the bankruptcy fraud and the violation of

labor regulations—was fraud. We must give deference to these factual findings. Because this labor

regulations violation was similar to the bankruptcy fraud, it was well within the court's power to

consider this violation in departing upward. In fact, civil misconduct is the sort of factor that the

Sentencing Commission, in section 4A1.3, suggested courts should use in determining whether the

circumstances warrant an upward departure. Therefore, we can find no abuse of discretion in the

district court's reliance on this conduct in making an upward departure.

We next review the district court's reliance on the three dismissed counts of deposit account

fraud listed in the PSI. In United States v. Williams, 989 F.2d 1137, 1142 (11th Cir.1993), we stated

that "a district court may not consider "a prior arrest record itself' when departing from the

guidelines." (quoting U.S.S.G. § 4A1.3). The facts in Washington-Williams indicate that a

misconduct, add 1 point; or

(2) If the organization (or separately managed line of business) committed
any part of the instant offense less than 5 years after (A) a criminal
adjudication based on similar misconduct; or (B) civil or administrative
adjudication(s) based on two or more separate instances of similar
misconduct, add 2 points.

U.S.S.G. § 8C2.5(c) (emphasis added). Section 4A1.3(c) states: "[Such information
about one's prior history may include information concerning] prior similar misconduct
established by a civil adjudication or by a failure to comply with an administrative
order." U.S.S.G. § 4A1.3(c) (emphasis added). Both sections involve "similar
misconduct" that lead to a civil adjudication. The use of the phrase "similar misconduct"
in § 8C2.5(c) and in § 4A1.3(c) are therefore sufficiently analogous to permit utilization
of the definition in our analysis of § 4A1.3(c).

14
sentencing court may rely on a presentence investigative report that lists prior arrests so long as the

report recites the facts that prompted the arrest(s). See id. Here, in contrast to Washington-Williams,

the PSI did not provide a factual background for the majority of Hernandez' arrests. In particular,

the PSI did not recite the facts on which the three dismissed counts of deposit account fraud were

based. Hernandez denied that he engaged in the alleged fraud, and in the face of this denial, the

court abused its discretion by imposing an upward departure based on a mere list of arrests.

The court's mistake, however, constituted harmless error. See Fed.R.Crim.P. 52(a). To find

harmless error, we must determine that the error did not affect the substantial rights of the parties.

See 28 U.S.C. § 2111 (1994); United States v. Johns, 734 F.2d 657, 665 n. 6 (11th Cir.1984). In

our case, the probation officer miscalculated Hernandez' criminal history category while preparing

the PSI. Had he properly made this calculation, he initially would have placed Hernandez in criminal

history category II, thereby eliminating the need for the district court to depart upward. Therefore,

no substantial rights of Hernandez were affected through the mistaken upward departure.

Hernandez did not receive any criminal history points in the PSI. According to that report,

however, Hernandez pled guilty in May of 1995 to two counts of deposit account fraud, for which

he received a twelve month jail term to be suspended upon payment of restitution. Under

Sentencing Guidelines section 4A1.2(c)(1), a sentence for an "insufficient funds check" is counted

for purposes of criminal history only (1) if the term of the sentence was at least 30 days in jail or the

term of probation was at least one year, or (2) that sentence involved an offense similar to the

present offense. U.S.S.G. § 4A1.2(c)(1). Here we have both. The twelve month sentence was

substantially longer than the thirty day jail term required in section 4A1.2(c)(1). According to

section 4A1.2(a)(3), when a sentence is totally suspended, that sentence "shall be counted as a prior

15
sentence under § 4A1.1(c)." Hernandez' sentence for that past offense therefore should have counted

towards the present criminal history calculation. Furthermore, the deposit account fraud is similar

to the bankruptcy fraud for which Hernandez has pled guilty, thereby satisfying the alternative prong

of section 4A1.2(c)(1). Because the conviction for deposit account fraud satisfies either condition

required under section 4A1.2(c)(1), Hernandez should have received one criminal history point for

the deposit account fraud.6

Hernandez also should have received a criminal history point for his 1986 conviction for

driving without a license. Under section 4A1.2(c), a sentence for driving without a license shall be

counted by a sentencing court if the conduct is similar to that of the instant case or if the sentence

was a term of at least 30 days in jail or a term of at least one year under probation. While the

conduct—driving without a license—was not similar to bankruptcy fraud, Hernandez was sentenced

to one month in jail. This sentence thus satisfies the 30-day jail term requirement.7 Hernandez

therefore should have received a second criminal history point. Two points would have placed him

in criminal history category II, and would have eliminated the need for an upward departure. The

district court's error in departing upward with respect to Hernandez' criminal history category was

therefore harmless, and thus does not necessitate reversal.

III.

6
According to the PSI, Hernandez pled guilty to two different instances of deposit account
fraud. For the purposes of the Sentencing Guidelines, however, the two offenses are considered
related because they were consolidated for sentencing. See U.S.S.G. § 4A1.2(a)(2) & comment.
(n.3). Therefore, under the Sentencing Guidelines we treat them as one sentence.
7
Although Hernandez' sentence for driving without a license was suspended, suspended
sentences—as stated earlier—are taken into account when determining the defendant's criminal
history category under U.S.S.G. § 4A1.1(c)(1).

16
The judgment of the district court is therefore AFFIRMED.

17