United States v. Wyjack

UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT

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No. 97-50630
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UNITED STATES OF AMERICA,

Plaintiff-Appellant,

versus

THOMAS GREGG WYJACK,

Defendant-Appellee.

_________________________________________________________________

Appeal from the United States District Court
for the Western District of Texas
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May 7, 1998

Before WIENER, BARKSDALE, and DeMOSS, Circuit Judges.

PER CURIAM:

Primarily at issue is whether, pursuant to an Application Note

to U.S.S.G. § 2B5.1(b)(2), the use of a photocopying machine to

produce counterfeit currency precludes applying that section’s

sentence enhancement, which mandates an offense level of 15 for use

of a counterfeiting device. The Government appeals the sentence

imposed on Thomas Gregg Wyjack, who pleaded guilty to three counts

involving the counterfeiting, by use of a photocopying machine, of

$20 Federal Reserve Notes. The sole issue presented is whether the

district court erred by not increasing Wyjack’s base offense level

pursuant to § 2B5.1(b)(2). We VACATE and REMAND for resentencing.
 I.

Wyjack pleaded guilty to conspiracy to pass counterfeit

Federal Reserve Notes, making fraudulent Federal Reserve Notes, and

passing fraudulent Federal Reserve Notes, in violation of 18 U.S.C.

§§ 371, 471, and 472. He admitted that he and a co-defendant

purchased a color copier/printer and used it to produce counterfeit

currency. The Presentence Report (PSR) calculated Wyjack’s base

offense level as 9, and recommended a two-level downward adjustment

for acceptance of responsibility.

The Government objected to the PSR, asserting that, pursuant

to U.S.S.G. § 2B5.1(b)(2), the base offense level should be 15.

The district court overruled the Government’s objection and

sentenced Wyjack to 15 months imprisonment.

II.

At issue is whether the district court erred by failing to

apply the § 2B5.1(b)(2) enhancement, which would have increased

Wyjack’s base offense level from 9 to 15. Section 2B5.1(b)(2)

states:

If the defendant manufactured or produced any
counterfeit obligation or security of the
United States, or possessed or had custody of
or control over a counterfeiting device or
materials used for counterfeiting, and the
offense level as determined above is less than
15, increase to 15.

In overruling the Government’s objection to the PSR, the

district court relied on the Application Notes for § 2B5.1, which

provide, in pertinent part:

Subsection (b)(2) does not apply to persons
who merely photocopy notes or otherwise

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 produce items that are so obviously
counterfeit that they are unlikely to be
accepted even if subjected to only minimal
scrutiny.

U.S.S.G. § 2B5.1, comment. (n.3). (Application Note 3 was re-

numbered as Note 4 in the Guidelines that took effect on 1 November

1997. Wyjack was sentenced in June 1997, under the Guidelines in

effect at that time.)

The Government contends that, under Application Note 3, the

enhancement should be applied to cover photocopied counterfeit

currency, unless, in the words of Note 3, the quality of such

photocopied currency is so poor that it is “unlikely to be accepted

[when] subjected to only minimal scrutiny”. Wyjack counters that,

under the plain meaning of Note 3, the enhancement does not apply

to persons, such as himself, who merely photocopy notes. In the

alternative, Wyjack contends that, even under the Government’s

interpretation, the enhancement is inapplicable because the notes

he produced were obviously counterfeit.

We review the district court’s application of the Sentencing

Guidelines de novo and its findings of fact for clear error. E.g.,

United States v. Stevenson, 126 F.3d 662, 664 (5th Cir. 1997). A

sentence will be upheld on appeal unless it was “imposed in

violation of law; imposed as a result of an incorrect application

of the sentencing guidelines; or outside the range of the

applicable sentencing guideline and is unreasonable.” United

States v. Garcia, 962 F.2d 479, 480-81 (5th Cir.), cert. denied,

506 U.S. 902 (1992). “[C]ommentary in the Guidelines Manual that

interprets or explains a guideline is authoritative unless it

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violates the Constitution or a federal statute, or is inconsistent

with, or a plainly erroneous reading of, that guideline. Stinson

v. United States, 508 U.S. 36, 38 (1993).

A.

Our court has not interpreted § 2B5.1(b)(2) or Application

Note 3. The plain language of Note 3 gives considerable force to

the reading urged by Wyjack and adopted by the district court.

But, we agree with the Fourth, Sixth, Ninth, and Tenth Circuits,

which have concluded that the enhancement contemplated by §

2B5.1(b)(2) applies to counterfeiters who produce instruments by

photocopying, unless the instruments produced are so obviously

counterfeit that they are unlikely to be accepted after only

minimal scrutiny. See United States v. Miller, 77 F.3d 71, 75-76

(4th Cir. 1996); United States v. Stanley, 23 F.3d 1084, 1086 & nn.

1-2 (6th Cir. 1994); United States v. Taylor, 991 F.2d 533, 535

(9th Cir.), cert. denied, 510 U.S. 858 (1993); United States v.

Bruning, 914 F.2d 212, 213 (10th Cir.), cert. denied, 498 U.S. 990

(1990).

The Tenth Circuit reasoned that the construction of

Application Note 3 now being urged by Wyjack would protect the most

successful of counterfeiters solely because their method of

production was photocopying. Bruning, 914 F.2d at 213. The court

stated further that exempting from application of the enhancement

those counterfeiters whose method of production was photocopying

would be inconsistent with the purposes of the enhancement, as set

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forth in the background note to § 2B5.1. Id. That background

commentary states:

Possession of counterfeiting devices to copy
obligations (including securities) of the
United States is treated as an aggravated form
of counterfeiting because of the
sophistication and planning involved in
manufacturing counterfeit obligations and the
public policy interest in protecting the
integrity of government obligations.
Similarly, an enhancement is provided for a
defendant who produces, rather than merely
passes, the counterfeit items.

U.S.S.G. § 2B5.1, comment. (backg’d).

In Miller, the Fourth Circuit adopted a two-part test for

determining the applicability of § 2B5.1(b)(2):

First, the district court should determine
whether the defendant “manufactured or
produced any counterfeit obligation or
security of the United States, or possessed or
had custody of or control over a
counterfeiting device or materials used for
counterfeiting.” USSG § 2B5.1(b)(2). If the
answer to this question is no, the enhancement
does not apply; if the answer is yes, the
district court should then determine whether
the notes “are so obviously counterfeit that
they are unlikely to be accepted even if
subjected to only minimal scrutiny.” USSG §
2B5.1, comment. (n.3).

Miller, 77 F.3d at 76.

Wyjack admitted to manufacturing or producing counterfeit

currency by photocopying it on a color copier/printer that he

possessed or had custody of or control over. Accordingly, the

enhancement applies unless the notes produced were “so obviously

counterfeit that they were unlikely to be accepted even if

subjected to only minimal scrutiny”. U.S.S.G. § 2B5.1, comment.

(n.3).

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 B.

At the sentencing hearing, the Government presented evidence

regarding the quality of the counterfeit currency produced by

Wyjack. A Secret Service Agent testified that all of the ten

establishments (bars) to which the currency was presented had

accepted it, although two establishments later realized that it was

counterfeit. The Agent also acknowledged, however, that the ink

would come off if the currency got wet; the PSR states that one of

Wyjack’s co-defendants attempted to eat a counterfeit bill prior to

his arrest and it turned his tongue green.

The district court’s ruling appears to rest solely on its

interpretation of Application Note 3 as not applying to mere

photocopying; the court stated that it was not deciding whether the

counterfeit currency met the minimal inspection test. Because that

determination is a factual finding, see United States v. Bollman,

No. 97-40998, ___ F.3d ___ (5th Cir. 1998), rendered on the same

day as this opinion, the district court should make that

determination in the first instance.

In assessing the quality of the notes on remand, the district

court may wish to consider, if applicable and appropriate, some or

all of the following factors, as listed in Miller:

(1) physical inspection during the trial or at
the sentencing hearing; (2) whether the
counterfeit notes were successfully passed;
(3) the number of counterfeit notes
successfully passed; (4) the proportion of the
number of counterfeit notes successfully
passed to the number of notes attempted to be
passed; and (5) the testimony of a lay witness
who accepted one or more of the counterfeit

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 notes or an expert witness who testified as to
the quality of the counterfeit notes.

Miller, 77 F.3d at 76. This list is not exclusive, and no one

factor should be dispositive. Id. A “far-reaching inquiry” is not

necessary; instead, the district court should make “a common sense

judgment on the quality of the counterfeit notes at issue”. Id.

III.

For the foregoing reasons, Wyjack’s sentence is VACATED, and

the case is REMANDED for resentencing.

VACATED and REMANDED

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