United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 6, 2001 Decided October 30, 2001
No. 00-3129
United States of America,
Appellee
v.
Arnett C. Smith,
Appellant
Appeal from the United States District Court
for the District of Columbia
(No. 99cr00370-01)
Charles B. Klein argued the cause for appellant. With him
on the briefs were Richard A. Hibey and Nathaniel H.
Speights.
Jeffrey W. Bellin, Assistant U.S. Attorney, argued the
cause for appellee. With him on the brief were Kenneth L.
Wainstein, U.S. Attorney, John R. Fisher and Mark H.
Dubester, Assistant U.S. Attorneys.
Before: Ginsburg, Chief Judge, Edwards and Sentelle,
Circuit Judges.
Opinion for the court filed by Circuit Judge Edwards.
Edwards, Circuit Judge: Arnett C. Smith appeals his
conviction under 18 U.S.C. s 208(a) and s 371 for conflict of
interest by an officer or employee of the District of Columbia
and conspiracy. Smith, formerly the District official respon-
sible for referring mentally disabled patients to day treat-
ment programs, was convicted after engaging in dubious
financial dealings with the owner of one of the facilities to
which he had sent patients. The District Court sentenced
Smith to 46 months in prison, after fixing his total offense
level under the Sentencing Guidelines at 22, which included a
three-level upward departure based on uncharged fraudulent
conduct.
On appeal, Smith challenges both his conviction and his
resulting sentence. He claims first that he was wrongly
convicted for violating s 208(a), advancing the novel theory
that this statute should be read to exclude persons who are
employed at his government salary level. We reject this
argument, which borders on the frivolous. Smith's attacks on
his sentence, however, have considerable merit. Specifically,
Smith asserts that the District Court applied the wrong
burden of proof in determining the predicate offense for his
conspiracy conviction. He is correct. Because this error was
plain, we are compelled to vacate and remand Smith's sen-
tence. In addition, we have concluded that the findings and
calculations that the District Court used to support its up-
ward departure are materially flawed. On remand, the trial
court must therefore reconsider its decision to depart.
I. Background
Smith's convictions grew out of a series of questionable
transactions that he entered between 1993 and 1995 with
Denise Braxtonbrown-Smith (no relation), the owner of Psy-
chological Development Associates ("PDA"). PDA offered
treatment services to the mentally disabled. One of Smith's
most important responsibilities as the Chief of the Day Pro-
grams Branch of the District of Columbia's Mental Retarda-
tion and Developmentally Disabled Administration
("MRDDA") was referring patients to treatment centers such
as those provided by PDA. In 1994, Smith helped PDA get
one of its facilities, Better Treatment Center ("BTC") accept-
ed into Medicaid, thus making it eligible to receive reimburse-
ments for patients sent by MRDDA. Quickly, MRDDA
referrals became a primary source of BTC's income. But all
was not rosy at BTC. On May 31, 1994, Smith received a
negative report on the conditions there from Jacquelin Smith
(also no relation), a MRDDA resource specialist. Ms. Smith
had visited the facility a week earlier and had concluded in
her report that the program was "not meeting the individual
needs of the customers as specified in their Individual Habi-
tation Plan." Government's Record Material ("GRM") A-2.
Even after receiving this report, however, Mr. Smith contin-
ued to refer patients to BTC.
During this same period, appellant involved himself with
Braxtonbrown-Smith and her company in a different capaci-
ty. First, in early 1995, he made three separate loans to
PDA, which, despite the now-steady stream of MRDDA refer-
rals, had found itself in financial difficulties. The first of
these loans was for $14,900; one week later PDA (on Brax-
tonbrown-Smith's direct order) repaid Smith $18,500. The
next two totaled $28,000, for which PDA wrote Smith a
$39,000 check less than a week after receiving the final loan.
Second, Smith entered into a complicated real estate deal in
which he purchased, at a significantly discounted price, a
piece of property that Braxtonbrown-Smith had been renting
and had a standing option to buy. In the fall of 1994,
Braxtonbrown-Smith told the property's elderly owner, Ear-
nestine Keaton, that although she could not afford to exercise
her option (then worth $85,000) she had a friend (Mr. Smith)
who could. On October 18, Smith signed a contract with
Keaton to buy the land, 501 Columbia Road in Northwest
Washington, for $65,000. Though the contract price was low,
Keaton testified that Braxtonbrown-Smith had told her that
she would "make the rest of it up in the future." Tr. 5/5/2000
at 10. In the course of this transaction, Keaton was not
represented by counsel; Braxtonbrown-Smith had assured
her that she did not need a lawyer, saying "we can trust each
other." See id. at 12. However, while Smith eventually paid
Keaton the entire $65,000 he owed her under the contract,
she received no more money from Braxtonbrown-Smith.
Soon after purchasing the house, Smith sold it to his
childhood friend, Terry Reid, for a net price of $102,000. In
the mortgage application that he completed to facilitate this
sale, Reid falsely stated (allegedly at Smith's urging) that he
himself would be moving into the Columbia Road property.
He went so far as to submit a fake lease, prepared by Smith,
in which Reid purported to rent his own house to Smith's
mother, whom Reid had never even met. Actually, however,
Braxtonbrown-Smith continued to occupy the property, and
to pay rent to its new owners, Reid and Smith. For, while
Reid did become the record owner, he and Smith had drawn
up a separate agreement by which they would own the
property as tenants-in-common. See id. at 78. Accordingly,
the two men shared Braxtonbrown's $1300 a month rental
payments, which more than covered their $1100 monthly
mortgage, and left them with a $200 monthly profit. This
arrangement continued until roughly 1997 or 1998, when
Braxtonbrown-Smith simply walked away from her lease.
See id. at 80.
Based on these events, Smith was indicted in November of
1999 on six counts of conflict of interest, paying and/or
receiving illegal gratuities, and conspiracy, in violation of 18
U.S.C. ss 208(a), 201(c), and 371, respectively. The Govern-
ment's theory was that Smith had steered clients toward
BTC, despite knowing that its care was substandard, in
exchange for valuable concessions from Braxtonbrown-Smith
(the favorable "loans" and the opportunity to purchase the
Columbia Road property at a bargain). Smith countered
that, while he had referred clients toward BTC, he had no
agreement, overt or tacit, with Braxtonbrown-Smith to swap
such referrals for anything of value. In the end, Smith was
convicted on two counts of conflict of interest and on one
count of conspiracy. As to the three substantive illegal
gratuities counts, however, the jury deadlocked, so no verdict
was reached. Moreover, while Smith's indictment had identi-
fied three possible predicate offenses for the conspiracy
charge -- conflict of interest, payment of illegal gratuities,
and receipt of illegal gratuities -- the jury did not indicate on
which of these its conspiracy conviction was based.
At sentencing, the District Court fixed Smith's total offense
level at 22. The court began with a base level of 7 for the
conspiracy count, the level for the substantive offense of
giving or receiving an illegal gratuity. See U.S. Sentencing
Guidelines Manual s 2C1.2 [hereinafter U.S.S.G.]. In select-
ing this base, the court noted that the jury had failed to
convict on the gratuities charges, but proceeded to determine,
by a preponderance of the evidence, that defendant was guilty
of conspiracy to receive and/or pay illegal gratuities. See
Memorandum Opinion and Order at 4 (D.D.C. Nov. 6, 2000)
("Sentencing Order"), reprinted in Joint Appendix ("J.A.")
tab 10. The court then supplemented this base level by
adding two levels for additional gratuities, see U.S.S.G.
s 2C1.2(b)(1), and four more for the value of the gratuities,
see id. at s 2C1.2(b)(2)(A), which the court set at $29,600. On
top of this, the court then added a two-level "vulnerable
victim" enhancement, see id. at s 3A1.1(b)(1), a two-level
"role in the offense" enhancement, see id. at s 3B1.1(c), and a
two-level enhancement for obstruction of justice by perjury,
see id. at s 3C1.1. Finally, the court departed upward three
levels for relevant, but uncharged, aggravating conduct, spe-
cifically Smith's alleged deceptions of Ms. Keaton and of the
mortgage company, as well as his attempts to defraud the
IRS by including false memo notations on checks that he
wrote in connection with the Columbia Road transactions.
See Sentencing Order at 19-26. This total offense level (22),
in connection with a criminal history level of I, produced a
Guidelines range of 41-51 months; the court imposed a
sentence of 46 months, plus a $25,000 fine. Smith now
appeals both this sentence and his underlying conviction.
II. Analysis
A. Smith's Conviction under 18 U.S.C. s 208(a)
In pertinent part, the federal conflict-of-interest statute, 18
U.S.C. s 208(a), forbids any "officer or employee of the
District of Columbia" from participating
personally and substantially as a Government officer or
employee, through decision, approval, disapproval, rec-
ommendation, the rendering of advice, investigation, or
otherwise, in a ... particular matter in which, to his
knowledge, he, his spouse, minor child, general partner,
organization in which he is serving as officer, director,
trustee, general partner, or employee, or any person or
organization with whom he is negotiating or has any
arrangement concerning prospective employment, has a
financial interest ...
Smith argues that his conviction under this provision should
be held invalid, as a matter of law, because he -- a govern-
ment worker paid only at the rate of GS-12 -- could not have
been an "officer or employee" who participated "personally
and substantially" in the decisions that gave rise to his
prosecution. His basis for advancing this interpretation is a
provision in the D.C. Code that, in the name of avoiding
conflicts of interest, requires any "public official" to make
certain financial disclosures. See D.C. Code s 1-1461(i)(1).
The linchpin of Smith's claim is that this requirement extends
only to those officials paid at GS-13 or above. Id. at
s 1462(a). Because he fails to meet this local law threshold,
Smith asserts, he cannot be convicted under the analogous
federal statute.
To state this argument is, in some sense, to refute it. In
the first place, the operative term in 18 U.S.C. s 208(a) is not
"public official," as it is in the D.C. Code, but rather "officer
or employee." It is perfectly obvious, and Smith does not and
indeed could not contest, that he was an "employee" of the
District of Columbia when he served as MRDDA's Chief of
Day Programs. Thus, the plain language of the statute, in
which we find no ambiguity relevant here, sweeps Smith
within its ambit. Moreover, even if there were some confu-
sion over the scope of this text, it would make little sense for
this court to interpret a term in the federal statute applicable
here by reference to a different term in an unrelated non-
federal statute. This is especially so given that in 18 U.S.C.
s 201(a)(1), which is a related federal statute, the phrase
"officer or employee" is enlisted to help construe the very
term, "public official," that Smith now urges this court to use
to define "officer and employee." Smith has thus unpersua-
sively attempted to reverse the interpretive chain; in Title 18,
"officer and employee" defines "public official," and not vice
versa. Finally, s 208(a) was intended, and has generally
been interpreted to have a broad reach, to cover all that a
commonsense reading of its language would suggest. See
United States v. Conlon, 628 F.2d 150, 154-55 (D.C. Cir.
1980). Smith's novel statutory construction argument must
therefore be rejected, and his conviction affirmed.
B. Smith's Base Offense Level
Smith's challenges to his sentencing stand on a different
footing, however. We agree with Smith that the District
Court committed plain error in determining the base offense
level ("BOL") for his conspiracy conviction, a mistake that
requires us to vacate and remand his sentence. When a
defendant is convicted of conspiracy, the Sentencing Guide-
lines direct the court to apply the offense level that would
have applied had that defendant been convicted of the sub-
stantive offense on which the conspiracy charge is based. See
U.S.S.G. s 2X1.1. However, where a count charges a con-
spiracy to commit more than one offense, and where the
guilty verdict does not establish which particular offense was
actually the object of the conspiracy, the above Guideline may
be applied only if "the court, were it sitting as a trier of fact,
would convict the defendant of conspiring to commit that
offense." U.S.S.G. s 1B1.2(d) & cmt. n.4 (emphasis added).
In this case, Smith's indictment listed both conflict of
interest and the more serious gratuities offense as possible
predicates for his conspiracy charge. The jury convicted
Smith of the substantive conflict of interest violation, but
hung on the gratuities counts. It did not specify on which of
these offenses its conspiracy conviction was hinged. Subse-
quently, however, the trial court found that "the evidence
proven by a preponderance at trial amply demonstrates that
defendant conspired to commit the offense of Receipt of
Illegal Gratuities and/or Payment of Illegal Gratuities." See
Sentencing Order at 4. Thus, although the jury, bound by a
reasonable doubt standard, had deadlocked as to whether
Smith had violated 18 U.S.C. s 201(c), the trial court judge,
relying on a far more relaxed evidentiary standard, concluded
that Smith had at least conspired to do so, and sentenced him
accordingly.
The District Court's use of a preponderance standard to
make this finding was undoubtedly erroneous. The phrase
"sitting as a trier of fact" in the Commentary to s 1B1.2(d)
clearly contemplates that when a court sets the basis for a
conspiracy conviction, it will do so under a heightened burden
of proof. Both the Sentencing Commission and the courts
that have considered this issue have held that the appropriate
standard is beyond a reasonable doubt. See U.S.S.G. app. C,
amend. 75; United States v. Conley, 92 F.3d 157, 162 n.4 (3d
Cir. 1996); United States v. McKinley, 995 F.2d 1020, 1026
(11th Cir. 1993); United States v. Macklin, 927 F.2d 1272,
1280 (2d Cir. 1991). We agree. This, however, does not
settle the issue before us.
The central question that we face is not what the evidentia-
ry standard should be, but whether the District Court's
failure to use the proper standard amounts to reversible
error. The Government claims that Smith did not object on
the burden of proof issue at sentencing, and thus that our
review can only be for plain error. Smith counters that in
fact he did preserve the issue, and that a harmless error
standard is therefore appropriate. We need not resolve
whether Smith offered a timely objection, because we con-
clude that the court's error was plain.
To prevail on an unpreserved issue, a criminal defendant
must establish that the error is "plain or obvious under
current law, affects substantial rights, and seriously affects
the fairness, integrity, or public reputation of judicial pro-
ceedings." United States v. Fields, 251 F.3d 1041, 1045 (D.C.
Cir. 2001) (internal quotations omitted). In other words,
Smith bears the burden of proving plainness, prejudice, and
public harm. See United States v. Olano, 507 U.S. 725, 734-
35 (1993); United States v. Gartmon, 146 F.3d 1015, 1024
(D.C. Cir. 1998). Here, the Government has conceded that
the trial court's error was plain. See Br. for Appellee 18.
Moreover, we have no trouble concluding that a misapplica-
tion of the burden of proof that results in a defendant serving
a longer sentence adversely affects the fairness and integrity
of the judicial proceeding. See United States v. Jordan, 256
F.3d 922, 932 (9th Cir. 2001) ("But, where, as here, the
district court applied the wrong standard of proof, we must
necessarily conclude that the fairness and integrity of the
proceeding is threatened."); cf. Tippett v. Mayland, 436 F.2d
1153, 1166 (4th Cir. 1971) (Sobeloff, J., concurring in part)
("The standard of proof is more than an empty semantic
exercise; it reflects the value society places on individual
liberty.").
The only remaining question is whether Smith suffered
"prejudice" as a result of the court's error; in other words,
whether he has demonstrated that his sentence might likely
have been different had the court used the correct standard
of proof. In answering this question, it is significant that the
error occurred during sentencing. For, while the plain error
analysis applies to mistakes committed during trial, this court
has held that "the burden of persuasion in showing 'prejudice'
should be somewhat lighter in the sentencing context." Unit-
ed States v. Saro, 24 F.3d 283, 288 (D.C. Cir. 1994). That is,
while the defendant in such cases must still "show a reason-
able likelihood that the sentencing court's obvious errors
affected his sentence," we are more willing to infer such a
causal relationship when the consequence is not that a convic-
tion is overturned, but rather that a sentence is vacated. Id.
at 287-88. Guided by this principle, we conclude that Smith
has indeed met his burden.
As an initial matter, there is little doubt that had the
District Court used the conflict of interest violation, instead of
the illegal gratuities offense, as the predicate for Smith's
conspiracy conviction, the resulting sentence would have been
less than the 46 months that he actually received. This is so
not only because the BOL for the former is less, but also
because a number of the enhancements that the court used to
augment Smith's offense level (based on the number and
value of the gratuities involved) are not available under the
conflict of interest guideline. Compare U.S.S.G. s 2C1.3
(conflicts) with s 2C1.2 (gratuities). As such, the length of
Smith's sentence depended on his being "convicted" by the
court of conspiring to violate 18 U.S.C. s 201(c). Cf. U.S.S.G.
app. C, amend. 75 (noting that when the jury does not specify
which offenses were the object of the conspiracy, a court's
s 1B1.2(d) finding creates "what is, in effect, a new count of
conviction"). And, because we find that it is reasonably likely
that Smith would not have been similarly convicted under a
reasonable doubt standard, it follows that the court's use of a
more lenient standard of proof was prejudicial.
We reach this conclusion for several reasons. First, we are
mindful of the significant difference between a preponderance
standard and a reasonable doubt standard. "Although the
phrases 'preponderance of the evidence' and 'proof beyond a
reasonable doubt' are quantitatively imprecise, they do com-
municate to the finder of fact different notions concerning the
degree of confidence he is expected to have in the correctness
of his factual conclusions." In re Winship, 397 U.S. 358, 370
(1970) (Harlan, J., concurring). Indeed, the reasonable doubt
standard requires the fact-finder to enter "a subjective state
of near certitude of the guilt of the accused." Jackson v.
Virginia, 443 U.S. 307, 315 (1979). A preponderance stan-
dard, in sharp contrast, requires merely that the fact-finder
believe that the existence of a fact is more probable than the
non-existence of that fact. See Neil Orloff & Jery Stedinger,
A Framework for Evaluating the Preponderance-of-the-
Evidence Standard, 131 U. Penn. L. Rev. 1159, 1159 (1983);
see also United States v. Fatico, 458 F. Supp. 388, 403-04
(E.D.N.Y. 1978) (Weinstein, J.). Whereas a reasonable doubt
standard is designed to "exclude as nearly as possible the
likelihood of an erroneous judgment" against a criminal de-
fendant, a preponderance standard compels the litigants to
"share the risk of error in roughly equal fashion." Addington
v. Texas, 441 U.S. 418, 423 (1979). For this reason, the
Supreme Court has indicated that a trial judge's improper
jury instruction regarding the necessity of proof beyond a
reasonable doubt can never be harmless error. See Sullivan
v. Louisiana, 508 U.S. 275 (1993). "Thus, a defendant whose
guilt was actually proved by overwhelming evidence would be
denied due process if the jury was instructed that he could be
found guilty on a mere preponderance of the evidence."
Jackson, 443 U.S. at 320 n.14 (internal citations omitted).
This case raises a similar concern. Here, the District
Court, in effect, erroneously instructed itself that it could
"convict" Smith of conspiring to violate 18 U.S.C. s 201(c)
based on a finding to that effect by a mere preponderance of
the evidence. Given (1) the substantial difference between the
standard that the trial court used and the proper standard,
(2) the due process concerns associated with convicting and
sentencing criminal defendants under the appropriate bur-
dens of proof, (3) the difficulties of determining whether an
erroneous burden of proof was outcome determinative, see
Carvalho v. Raybestos-Manhattan, Inc., 794 F.2d 454, 455
(9th Cir. 1986), and (4) our greater willingness to find preju-
dice in the context of sentencing errors, we find that Smith
has satisfied his burden of proof. One of our sister circuits
has reached the same result in like circumstances. Indeed,
United States v. Farese, 248 F.3d 1056 (11th Cir. 2001),
presented a similar situation to the one that now confronts us:
a sentencing court that had failed to use a reasonable doubt
standard to fix the unspecified predicate offense for a conspir-
acy conviction. The Eleventh Circuit reversed, holding that
the "district court's failure to apply the proper standard of
proof at sentencing compels us to vacate the appellants'
sentences and remand this case to the district court for
resentencing." Id. at 1061; see also United States v. Ngu-
yen, 255 F.3d 1335, 1341-42 (11th Cir. 2001) (vacating sen-
tences imposed under a RICO conspiracy conviction where
court determined unspecified predicate offense under a pre-
ponderance standard, and where that determination increased
defendants' offense levels); United States v. Ross, 131 F.3d
970, 994 (11th Cir. 1997) (vacating sentence imposed under
U.S.S.G. s 1B1.2(d) where district court "did not state that it
had determined that the evidence was sufficient to persuade
it beyond a reasonable doubt" that defendants had conspired
to commit a particular substantive offense).
Apart from misconstruing the burden of proof, the trial
court determined that Smith conspired to commit an offense
with respect to which the jury failed to convict. Normally,
this would not be noteworthy, because it is settled that
conspiracy and the substantive offense underlying a conspira-
cy are treated as separate and distinct crimes; indeed, a
defendant can be convicted of the former while simultaneous-
ly acquitted of the latter. See Ianelli v. United States, 420
U.S. 770, 777-78 (1975); United States v. Hernandez, 141
F.3d 1042, 1052-53 (11th Cir. 1998). In this case, however,
the result is anomalous. The discrepancy here between the
actions of judge and jury is most readily explained in one of
two ways: (1) the difference between conspiracy crimes and
substantive crimes or (2) the difference in the burdens of
proof applied with respect to each. None of the District
Court's pronouncements give any reason to credit the former
explanation.
In its Sentencing Order, the trial court announced that its
task under U.S.S.G. s 1B1.2(d) was "to make a finding as to
whether the evidence proven at trial establishes the object
offense of Receipt of Illegal Gratuities and/or Payment of
Illegal Gratuities." Sentencing Order at 4. True to its
stated intention, the trial court's analysis fails to address the
"sine qua non of the statutory crime of conspiracy," i.e., the
existence of an agreement to commit an illegal act, United
States v. Wilson, 160 F.3d 732, 737 (D.C. Cir. 1998). Rather,
the District Court focuses instead solely on the evidence
suggesting that Smith engaged in the object acts that would
render him criminally liable under 18 U.S.C. s 201(c) itself.
See Sentencing Order at 4-13. Moreover, at Smith's sentenc-
ing hearing, the trial court opined that the defendant "did, in
fact, take gratuities by taking these monies and the loans, and
charging the interest rates that [he] did while [he was] in a
position over the contracting." Tr. 12/12/2000 at 15. These
statements suggest that the District Court's determination
was based not on the technical differences between the
elements of the federal conspiracy statute and the federal
gratuities statute, but rather on its conclusion that Smith had
in fact violated the latter. As such, in light of the jury's
inability to reach a similar conclusion based on a reasonable
doubt instruction, it is at least reasonably likely that the court
would not have done so had it employed the same (and the
proper) standard of proof.
A final reason to think that the District Court's burden of
proof error was prejudicial lies in the court's treatment of the
elements of s 201(c). The Supreme Court has recently made
clear that, in order to obtain a conviction under this statute,
the Government "must prove a link between a thing of value
conferred upon a public official and a specific 'official act' for
or because of which it was given." United States v. Sun-
Diamond Growers of Cal., 526 U.S. 398, 414 (1999). While
the District Court here did identify Smith's official acts and
the things of value that he received, it never attempted to
articulate or to "prove a link" between the two. The court's
bare assertion that Braxtonbrown-Smith "undertook to en-
rich Smith and bestow reciprocal benefits on him" in acknowl-
edgment of his referrals to PDA, Sentencing Order at 7, is
not sufficient to satisfy a reasonable doubt standard. This
court is simply not empowered to comb the record on its own
to make a determination that the District Court should have,
but did not, make under a significantly heightened evidentia-
ry burden that the District Court should have, but did not,
use. See Jordan, 256 F.3d at 933 (remanding where district
court used a preponderance standard for a sentencing deter-
mination that should have been governed by clear and con-
vincing evidence; the Court of Appeals declared that "we are
not in a position to weigh conflicting evidence, which is an
important responsibility of the district court"); cf. Hernan-
dez, 141 F.3d at 1052 ("It is emphatically not within the
province of an appellate court to reweigh the evidence and the
credibility of the witnesses at trial.").
In sum, then, we hold that the court's use of a preponder-
ance standard to reach a conclusion that should have been
determined beyond a reasonable doubt was prejudicial. Ac-
cordingly, Smith's sentence must be vacated and the case
remanded so that the District Court may recalculate his
offense level under the proper standard of proof.
C. The Upward Departure
Smith also challenges the District Court's decision to im-
pose a three-level upward departure under U.S.S.G. s 5K2.0.
This departure elevated Smith's total offense level from 19 to
22; without such an increase, Smith's 46-month sentence
would have been impermissible. Applying the familiar
"heartland" analysis of Koon v. United States, 518 U.S. 81
(1996), the court held that the defendant's "commission of
other crimes on persons or entities in the course of commit-
ting the offenses of conviction" justified a departure. Sen-
tencing Order at 22. These purported "crimes," for which
Smith was never charged, included: (1) Smith's alleged ef-
forts to defraud the IRS by using false memo notations
(indicating business-related expenses) on checks that he
wrote in connection with the Columbia Road transactions; (2)
Smith's alleged defrauding of Earnestine Keaton by purchas-
ing her house at a reduced price after she had been told that
she did not need a lawyer; (3) Smith's alleged attempts to
commit bank fraud by helping Terry Reid submit a false
mortgage application.
Smith mounts three principal attacks on this departure.
First, he argues that none of these alleged frauds were
sufficiently related to the crimes for which he was actually
convicted. Second, he asserts that no record evidence sup-
ports the finding that Smith committed either the tax fraud
or the fraud on Ms. Keaton. Finally, and relatedly, he
contends that, even assuming a departure was warranted, the
court erred in determining the extent of that departure.
The first contention can be disposed of quickly. It is true
that while a sentencing court is not limited by the definition
of "relevant conduct" in U.S.S.G. s 1B1.3 in considering a
s 5K2.0 departure, a court may not depart based on "acts
bearing no relationship to the offense of conviction." United
States v. Kim, 896 F.2d 678, 684 (2d Cir. 1990); see also
United States v. Cross, 121 F.3d 234, 240 (6th Cir. 1997)
(citing cases). In other words, the conduct forming the basis
for the departure must be descriptively or logically, and not
merely temporally, connected to the crime for which the
defendant was actually convicted. See United States v.
Baird, 109 F.3d 856, 864-65 (3d Cir. 1997). Here, however,
the frauds on the bank and on Ms. Keaton were certainly
connected to Smith's conflict of interest crime in this relevant
sense, as both of these facilitated and made more lucrative
the purchase of the Columbia Road property, the improper
transaction that ultimately led to Smith's conviction. While
the tax fraud is perhaps more tangential, the evidence sug-
gests that Smith used the checks on which he included the
false memo notations to purchase the cashier's check with
which he made his initial payment to Ms. Keaton in Decem-
ber of 1994. See Tr. 5/9/2000 at 128-30; 5/10/2000 at 152-55.
That these deceptions may have allowed Smith to conceal his
involvement in the Columbia Road transaction, see Memoran-
dum and Order at 6 (D.D.C. Dec. 12, 2000) ("Sentencing
Reconsideration Order"), reprinted in J.A. tab 11, is relation-
ship enough to allow them to be considered for purposes of a
s 5K2.0 departure. See United States v. Burns, 893 F.2d
1343, 1346 (D.C. Cir. 1990), rev'd on other grounds, 501 U.S.
129 (1991).
Smith's next two arguments, however, are more compelling.
To see why, we must begin with the method by which the
District Court calculated its departure. The trial court treat-
ed each of the three alleged frauds as separate crimes and
inquired how Smith would have been sentenced, pursuant to
the "grouping" rules of U.S.S.G. s 3D, had he been convicted
of all three. Under this approach, the alleged loan fraud
resulted in an offense level of 12, which was composed of a
BOL of 6, see U.S.S.G. s 2F1.1, plus two-level enhancements
for planning, for role in the organization, and for perjury.
The alleged fraud on Ms. Keaton resulted in a level of 15, also
starting with a BOL of 6, with a three-level enhancement for
the amount of the fraud (more than $10,000), and two-level
increases for planning, role in the offense, and because Ms.
Keaton was deemed a vulnerable victim. Finally, the alleged
tax fraud produced an offense level of 8, based on a BOL of 6,
see U.S.S.G. s 2T1.1(a)(2), and a two-level perjury enhance-
ment. Sentencing Order at 24-25; Sentencing Reconsidera-
tion Order at 7-9. Still proceeding as if Smith had been
convicted of these offenses, the trial court then turned to
U.S.S.G. s 3D1.4, which is used to determine a defendant's
"combined offense level." Under this rule, one unit is as-
signed for the group with the highest offense level (here,
Smith's already problematic conspiracy sentence, to which the
court had assigned a level 19). Another unit was added for
Smith's "conviction" for defrauding Ms. Keaton, as the hypo-
thetical offense level of that offense was one to four levels less
serious than that of the conspiracy conviction. See U.S.S.G.
s 3D1.4(a). Finally, another half unit came from the alleged
loan fraud offense, as its offense level was five to eight levels
less serious. See U.S.S.G. s 3D1.4(b). And under the group-
ing rules, two-and-a-half units translates to three levels;
accordingly, the court departed by that degree. See Sentenc-
ing Order at 25.
In the abstract, this sentencing methodology is permissible,
because it helps provide a set of standards to guide what
otherwise could become a rather arbitrary decision. See
United States v. Molina, 952 F.2d 514, 521 (D.C. Cir. 1992)
("A district court's responsibility to respect the Guidelines'
underlying policies of uniformity and proportionality in sen-
tencing does not end when the court departs from the sen-
tencing grid; indeed, that responsibility becomes more
weighty because it is unguided departures that pose the
greatest danger of undermining sentencing uniformity."); cf.
United States v. Cash, 983 F.2d 558, 561 (4th Cir. 1992)
(suggesting that district courts may determine the proper
extent of a departure "by extrapolating from the existing
sentencing table"). However, a sentencing court's methodolo-
gy is only as good as its inputs; if the findings supporting the
multiple-conviction analogy were inadequate, then so too is
the analogy.
In this case, the District Court's presumed analogy results
in Smith being sentenced exactly as if he had actually been
convicted of two counts of fraud, i.e., offenses that were not
among the charges against him. While it is well-settled that
uncharged conduct, and even acquitted conduct, can serve as
the basis for a sentencing determination (including a depar-
ture) under the Guidelines, see U.S.S.G. s 1B1.3, cmt. back-
ground; United States v. Watts, 519 U.S. 148 (1997) (conduct
for which defendant was acquitted may be considered); Unit-
ed States v. Arce, 118 F.3d 335, 340-41 (5th Cir. 1997)
(conduct need not be criminal); Baird, 109 F.3d at 870
(conduct underlying dismissed counts is permissible), it is
equally well-settled that in order to satisfy due process such
conduct must be proven by a least a preponderance of the
evidence, see U.S.S.G. s 6A1.3, cmt. background; Watts, 519
U.S. at 157; United States v. Gigante, 94 F.3d 53, 56 (2d Cir.
1996); United States v. Mahaffey, 53 F.3d 128, 133 (6th Cir.
1995); United States v. Wilson, 900 F.2d 1350, 1354 (9th Cir.
1990). Thus, the District Court's analogy could not provide a
"reasoned basis" for determining the extent of a departure,
Molina, 952 F.3d at 522, unless the purported "convictions,"
and the corresponding enhancements, were supported by a
preponderance of the evidence. Applying the "clearly errone-
ous" standard under which we review the factual findings of a
sentencing court, see United States v. Bridges, 175 F.3d 1062,
1065 (D.C. Cir. 1999), we reject the trial court's findings
because with the benefit of the full record we have reached "a
definite and firm conviction" that the analogy underlying the
sentences is not supported by the greater weight of the
evidence. See United States v. U.S. Gypsum Co., 333 U.S.
364, 395 (1948).
First, Smith could not have been convicted of tax evasion,
under any standard of proof. The elements of that crime are
(1) willfulness, (2) the existence of a tax deficiency, and (3) an
affirmative act constituting an evasion. See Sansone v. Unit-
ed States, 380 U.S. 343, 351 (1965); United States v. Plitman,
194 F.3d 59, 65 (2d Cir. 1999). Even if the false memo
notations could be construed to satisfy the first and third
elements, there is absolutely no indication in the record of
any tax deficiency. The Government presented no evidence
that Smith ever took, or even tried to take, a deduction on the
basis of those notations. While cross-examining Smith, the
prosecutor raised the point briefly, but then dropped it after
Smith denied the suggestion. See Tr. 5/10/2000 at 155.
Second, the evidence does not support the conclusion that
Smith defrauded Ms. Keaton. In finding that he had done so,
the District Court focused on two facts: (1) Braxtonbrown-
Smith told Keaton that she did not need a lawyer in connec-
tion with the sale of her property to Smith; (2) Smith
prepared a real estate contract that was "utterly one-sided."
Sentencing Order at 23. Even assuming, as the court did,
that Braxtonbrown-Smith's statement was properly attrib-
uted to Smith on a theory of co-conspirator liability, see
Sentencing Reconsideration Order at 4-5, we do not see how
this could amount to a violation of any fraud statute. What
we seem to have here is a contract with some irregular,
buyer-friendly terms signed by a seller not represented by
counsel. While it may be that the defendant and others took
advantage of a vulnerable Ms. Keaton, it is not apparent,
absent further evidence of deception and reliance, that this
transaction could constitute a crime supporting an upward
departure.
Finally, while the court's conclusions regarding Smith's
loan fraud are well supported by the record, its decision to
include a hypothetical two-level enhancement for perjury
committed in connection with that offense, see U.S.S.G.
s 3C1.1, cmt. n.4, is questionable. We are concerned that
this finding may have confused lying to the bank, which Smith
admitted doing, with lying to the court. On rehearing, the
District Court should therefore reexamine whether Smith's
testimony regarding the phony lease actually meets all of the
elements of perjury. See United States v. Dunnigan, 507
U.S. 87, 94-95 (1993) (holding that a perjury enhancement is
only appropriate where the sentencing court makes a finding
that "encompasses all of the factual predicates for a finding of
perjury," specifically that the defendant gave "false testimony
concerning a material matter with the willful intent to provide
false testimony").
The problems we have identified regarding the alleged tax
fraud and the alleged fraud on Ms. Keaton, along with our
questions regarding this perjury enhancement, undermine the
trial court's justification for the extent of its departure. It
falls to the District Court on remand to reconsider both its
decision to depart and the proper degree of any such depar-
ture under a viable methodology.
III. Conclusion
For the reasons given above, we affirm Smith's conviction
under 18 U.S.C. s 208(a), but vacate his sentence and remand
the case for resentencing consistent with this opinion.