United States v. Scungio

United States Court of Appeals
For the First Circuit

No. 00-2229

UNITED STATES,

Appellee,

v.

JOHN A. SCUNGIO,

Defendant, Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF RHODE ISLAND

[Hon. Ronald R. Lagueux, U.S. District Judge]

Before

Torruella, Circuit Judge,

Campbell, Senior Circuit Judge,

Schwarzer,* Senior District Judge.

Francis J. DiMento with whom DiMento & Sullivan and Jason
A. Kosow were on brief for appellant.
Donald C. Lockhart, Assistant United States Attorney, with
whom Margaret E. Curran, United States Attorney, were on brief
for appellee.

*Of the Northern District of California, sitting by
designation.
 July 6, 2001

CAMPBELL, Senior Circuit Judge. John Scungio was

convicted on a plea of guilty to making false statements in

violation of 18 U.S.C. § 1001. He appeals from his sentence,

arguing that the district court erred: (1) by sentencing him

under the Obstruction of Justice guideline instead of under the

Fraud and Deceit Guideline, see U.S.S.G. § 2F1.1, cmt. n. 14;

and (2) by applying a two-level increase in his offense level on

the basis of his “special skill” of lawyering, see U.S.S.G. §

3B1.3. Agreeing that the district court erred, we vacate the

sentence and remand for resentencing.

At sentencing, the parties stipulated to the factual

statement set forth in the presentence report (PSR).1 Because

this appeal involves sentencing issues following a guilty plea,

we take the background facts from the presentence report that

followed defendant’s conviction. United States v. Brady, 168

F.3d 574, 576 (1st Cir. 1999).

1 In a letter to the probation office, Scungio objected to
two factual assertions in the PSR. We have noted those
objections in the factual recitation, infra. The district court
did not resolve the factual disputes, however, as it appears
from the sentencing transcript that Scungio never reiterated his
objections to the court. Because our disposition of this case
does not turn on the facts to which Scungio originally objected,
we recite the entire factual description from the PSR.

-2-
 During 1998, the Defendant, John A.
Scungio, an attorney licensed to practice
law in the State of Rhode Island and
Florida, represented Gail and Paul Calenda
in connection with an appeal to the
Providence Board of Tax Assessment Review
(BTAR). The purpose of the appeal was to
lower the assessed value, and therefore the
taxes, of three properties owned by the
Calendas in the City of Providence.

The Chairman of the [BTAR] was Joseph
A. Pannone. Pannone recommended the
defendant to Gail Calenda for the purpose of
facilitating her appeal. On May 18, 1998,
Scungio appeared before the BTAR and made a
presentation for a tax reduction on behalf
of the Calendas. The [BTAR] approved a
reduction from about $800,340 to $560,500.
. . . The annual net tax savings was
approximately $7,600 per tax year.

Prior to the May 18, 1998 hearing,
Gail Calenda had met with Joseph A. Pannone
and the Vice-Chairman of the BTAR, David C.
Ead. The three discussed the upcoming
hearing and the resulting reduction.
Indeed, Ead provided the figures for Calenda
to complete her appeal form and it was those
figures which were submitted to the BTAR.

Between the May 18, 1998 hearing and
July 24, 1998, Pannone told Scungio that
Pannone, Ead, and Deputy Tax Assessor
Rosemary Glancy would be splitting a $5,000
bribe from the Calendas in exchange for the
reduction. On or about July 24, 1998, Gail
Calenda delivered a check in the amount of
$2,672.88 to John A. Scungio as a fee for
services rendered. At the same time, she
delivered an envelope with $5,000 in cash to
the [d]efendant, John A. Scungio, for
delivery to Pannone.

Scungio delivered the envelope to
Pannone. Pannone told Scungio that he would

-3-
 split the money with Ead and Glancy.
Pannone then asked for $200 more from
Scungio which would be pooled with $200 each
from Ead and Pannone. The resulting $600
would be given to Rosemary Glancy. At first
Scungio balked at paying the $200 but then
relented and gave Pannone $200 cash for
Glancy.

On May 12, 1999, Scungio was
interviewed by [FBI] Agents Beverly Bartzer
and William Rose . . . . In the
interview[,] Scungio falsely denied that the
Chairman of the [BTAR], Joseph A. Pannone,
had received any money for his assistance in
the reduction of the Calendas’ taxes, when,
in fact, John A. Scungio had delivered a sum
of cash, $5,000 more or less, to Pannone
from his client to be distributed among
Pannone, Ead, and Glancy.

Also on May 12, 1999, Scungio denied
knowing how Calenda had learned about and
came to hire him when in fact, Scungio knew
that Calenda had been sent to him by the
then Chairman of the [BTAR].

In addition to the above offense
facts, Scungio admitted paying Pannone $200
in or around 1997 for Pannone’s help and
referral to Scungio of the owner of East
Side Copy who had a tangible tax problem
with the City of Providence. Scungio
represented East Side Copy in front of the
BTAR and in negotiations with City Tax
Assessor, Tom Rossi.2

2 Scungio objected to this paragraph, clarifying that the
case described was not pending before and was never decided by
the BTAR. Scungio also clarified that, as far as he knows,
Pannone never rendered any “help” to Scungio or his client
before the BTAR. The $200 was intended as an expression of
gratitude for the referral only.

-4-
 Scungio also admitted paying Joseph
Pannone around $75 for Anthony Annarino.
Annarino, the then City Tax Collector, would
waive interest due on overdue tax bills for
a cash payment. Annarino waived interest
due on property owned by Scungio.

In or about 1997, Scungio paid Pannone
$100 to give to former Tax Assessor Ted
Little, for Little’s help obtaining an
abatement on property that Scungio owned in
Providence. Finally, Scungio acknowledged
purchasing approximately $500 in Friends of
Cianci campaign tickets from Pannone during
1997 and 1998. Scungio paid cash for the
3
tickets.

At the sentencing hearing, the district court made the

two decisions favorable to the government that are the subject

of this appeal. The first decision concerned the construction

of application note 14 of the Fraud and Deceit guideline,

U.S.S.G. § 2F1.1, the guideline that governs the sentence for

the offense of making false statements, 18 U.S.C. § 1001, to

which Scungio pled guilty. Note 14 concludes as follows:

Where the indictment or information setting
forth the count of conviction (or a
stipulation as described in § 1B1.2(a))
establishes an offense more aptly covered by
another guideline, apply that guideline
rather than § 2F1.1. Otherwise, in such
cases, § 2F1.1 is to be applied, but a
departure from the guidelines may be
considered.

3 Scungio also objected to the factual assertion in this
paragraph, stating that the $100 payment to Mr. Little was made
in September 1994, not in 1997.

-5-
U.S.S.G. § 2F1.1, cmt. n. 14. Defendant contended that there

was no other guideline that “more aptly covered” his offense of

making false statements, and therefore that he should be

sentenced under the Fraud and Deceit guideline. The government

argued to the contrary, contending that the facts of record to

which defendant had agreed, in addition to constituting the

crime of making false statements, establish a violation of the

“omnibus clause” of 18 U.S.C. § 1503, which prohibits, in

relevant part, “corruptly . . . endeavor[ing] to influence,

obstruct, or impede the due administration of justice . . . .”4

18 U.S.C. § 1503. As that offense is listed under the

Obstruction of Justice guideline, U.S.S.G. § 2J1.2, cmt.

(statutory provisions), the government argued that the

Obstruction of Justice guideline “more aptly cover[s]” Scungio’s

offense and he should be sentenced thereunder.

The district court’s second challenged decision was to

apply a two-level enhancement for Scungio’s alleged “special

skill” of lawyering. See U.S.S.G. § 3B1.3 (directing that “if

the defendant abused a position of public or private trust, or

used a special skill, in a manner that significantly facilitated

4This clause is often called the “omnibus clause” of 18
U.S.C. § 1503 because it serves as a catch-all obstruction of
justice provision. See United States v. Frankhauser, 80 F.3d
641, 650 (1st Cir. 1996).

-6-
the commission or concealment of the offense, increase [offense

level] by two levels”). The PSR recommended that this two-level

enhancement was appropriate as Scungio’s special skill of

lawyering exacerbated his crime.

At the conclusion of the hearing, the district court

agreed with the government on both issues. It sentenced Scungio

under the guideline relevant to Obstruction of Justice and it

imposed the two-level enhancement, both over defendant’s

objections. After departing downward, the court ordered

defendant to serve three years of probation, the first six

months to be served in home confinement, and a $40,000 fine. In

considering Scungio’s appeal from both decisions, we review the

district court’s interpretation of the legal meaning and scope

of the sentencing guidelines de novo, and the district court’s

factual findings for clear error. See United States v. Santos

Batista, 239 F.3d 16, 21 (1st Cir. 2001). See also United

States v. Henry, 136 F.3d 12, 20 (1st Cir. 1998) (reviewing de

novo the district court’s determination pursuant to note 14 of

U.S.S.G. § 2F1.1 that the fraud and deceit guideline “more aptly

covered” defendant’s offenses than the guideline concerning

environmental crimes).

I. Applying the Guideline That “more aptly cover[s]”
Defendant’s Offense

-7-
 As he did below, Scungio now contends that the facts

to which he pled guilty and on which the district court relied

at sentencing cannot, as a matter of law, establish a violation

of 18 U.S.C. § 1503 or any of the other offenses to which the

Obstruction of Justice guideline pertains. See U.S.S.G. § 2J1.1

(cross-referencing 18 U.S.C. §§ 1503, 1505-16, 1516). The

Obstruction of Justice guideline, therefore, cannot and does not

“more aptly cover[]” his offense. The district court did not

disagree with Scungio’s contention that the facts to which he

pled guilty did not establish the offense of obstructing justice

as that is defined by 18 U.S.C. § 1503. The court nonetheless

determined that defendant’s crime is “more aptly covered” by the

Obstruction of Justice guideline because “th[e] phrase

[obstruction of justice] is given a broader meaning in the

guidelines than in the statutes.” Defendant contends that this

construction of the guideline was legal error. We agree.

The district court explained its reasoning as follows:

[I]t seems to me that under the guidelines
the most appropriate guideline is the one
entitled, “Obstruction of justice”. Now
that phrase is given a broader meaning in
the guidelines than in the statutes. The
obstruction of justice statutes prescribe
that there shall be penalties for certain
types of conduct, and some of it very
serious conduct, such as intimidating
witnesses and the like. But under the
guidelines it has a much broader meaning.
For example, it can be an obstruction of

-8-
 justice under the guidelines if a defendant
lies to the probation office about certain
things. I add some points in those cases
when that does happen, or lies to the Court.
So that it’s sort of a generic obstruction
of justice guideline here that applies when
the other guideline, fraud and deceit, is
not the most applicable. It seems to me,
considering the underlying offense, and the
conduct of the defendant toward the FBI,
that this was an obstruction of justice in
the very broad sense.

Although we understand the court’s point of view,5 we

can find no support for applying note 14 of U.S.S.G. § 2F1.1,

which is the section of the guideline that authorizes looking

beyond § 2F1.1 in certain circumstances, in the manner done by

5 We recognize there are circumstances under which a
district court, when sentencing a defendant for an offense other
than obstruction of justice, may nevertheless enhance that
sentence for behavior deemed to have obstructed justice even
when the defendant has not been charged with the offense of
obstruction of justice as defined by 18 U.S.C. § 1503. It is
possible that this is the kind of situation the district court
had in mind. The guidelines provide for such an enhancement

[i]f (A) the defendant willfully obstructed or
impeded, or attempted to obstruct or impede, the
administration of justice during the course of the
investigation, prosecution, or sentencing of the
instant offense of conviction, and (B) the obstructive
conduct related to (i) the defendant's offense of
conviction and any relevant conduct; or (ii) a closely
related offense....

U.S.S.G. § 3C1.1. However, enhancing the sentence for another
crime pursuant to this provision of the guidelines in Chapter
Three (“Adjustments”) is not the same as sentencing a defendant
for offense conduct described in Chapter Two (“Offense Conduct”)
and referenced under the Obstruction of Justice guideline, §
2J1.1, contained therein.

-9-
the district court. The language of application note 14 of

U.S.S.G. § 2F1.1 directing use of another sentencing guideline

where the indictment establishes an offense “more aptly covered”

by that guideline must be construed in context of the entire

application note, which reads as follows:

Sometimes, offenses involving fraudulent
statements are prosecuted under 18 U.S.C. §
1001, or a similarly general statute,
although the offense is also covered by a
more specific statute. Examples include
false entries regarding currency
transactions, for which § 2S1.3
[“Structuring Transactions to Evade
Reporting Requirements . . . Knowingly
Filing False Reports”] would be more apt,
and false statements to a customs officer,
for which § 2T3.1 [“Evading Import Duties or
Restrictions (Smuggling); Receiving or
Trafficking in Smuggled Property”] likely
would be more apt. Where the indictment or
information setting forth the count of
conviction (or a stipulation as described in
§ 1B1.2(a)) establishes an offense more
aptly covered by another guideline, apply
that guideline rather than § 2F1.1.
Otherwise, in such cases, § 2F1.1 is to be
applied, but a departure from the guidelines
may be considered.

U.S.S.G. § 2F1.1, cmt. n. 14. (emphasis supplied). The first

sentence of application note 14 indicates that recourse to

another guideline under that note was designed for situations

where fraudulent statements are prosecuted under 18 U.S.C. §

1001 (as here), or under another general statute, but where the

offense is “also covered by a more specific statute.” U.S.S.G.

-10-
§ 2F1.1, cmt. n. 14 (emphasis supplied). In such cases, the

sentencing guideline applicable to the more specific statute may

be used. The examples given in note 14 are of this type. Not

only does the application note not appear to encompass movement

from a guideline covering a general offense, such as making

false statements, 18 U.S.C. § 1001, to another guideline

covering an equally or more general offense, such as obstruction

of justice, 18 U.S.C. § 1503 (as invoked here), but it also

makes no provision for use of another sentencing guideline

unless defendant’s stipulated offense conduct is “also covered”

by the requirements of an offense referenced under the

alternative guideline, here U.S.S.G. § 2J1.2 (“Obstruction of

Justice”). U.S.S.G. § 2F1.1, cmt. n. 14 (emphasis supplied).

See also id. (“Where the indictment . . . setting forth the

account of conviction (or . . . stipulation . . .) establishes

an offense more aptly covered by another guideline . . . .”)

(emphasis supplied). Even assuming, therefore, that 18 U.S.C.

§ 1503 were a more specific statute within the meaning of

application note 14, that note’s express language makes clear

that unless defendant’s stipulated offense conduct established

a violation of 18 U.S.C. § 1503 as well as of 18 U.S.C. § 1001,

it could not be “more aptly covered” by the former’s guideline.

-11-
 This last point merits further discussion. When the

district court jumped from the Fraud and Deceit guideline to the

Obstruction of Justice guideline pursuant to application note 14

to U.S.S.G. § 2F1.1, it opined that the “phrase [’obstruction of

justice’] . . . is given a broader meaning in the guidelines

than in the statutes.” While there may be some truth to this

statement as regards the making of adjustments under Chapter

Three, see supra note 5, it has no relevance to application note

14. Indeed, the court’s interpretation runs counter to this

circuit’s precedent in United States v. Brady, 168 F.3d 574 (1st

Cir. 1999), a case that neither party brought to the district

court’s attention.

In Brady, in the context of reviewing a district

court’s conclusion that the crime of criminal contempt to which

the defendant had pled guilty was most “analogous” for

sentencing purposes to those category of crimes listed under the

obstruction of justice guideline,6 this court determined that

6 The term “analogous” comes from a provision of the
sentencing guidelines other than that at issue here, which
provides that “[f]or statutory provisions not listed in the
Statutory Index [such as criminal contempt, the offense at issue
in Brady], use the most analogous guideline. See § 2X5.1 (Other
Offenses).” U.S.S.G. § 1B1.2(a). This directive does not come
into play in our case because the offense of making false
statements is listed in the Sentencing Guidelines’ Statutory
Index. Brady remains instructive, however, as it interpreted
the scope of the same Obstruction of Justice guideline as much
narrower than did the district court.

-12-
“the [Sentencing] Commission intended the . . . phrase

[’obstruction of justice’, in the title of U.S.S.G. § 2J1.2] to

have the same meaning as the crime defined in 18 U.S.C. § 1503,

which is cross-referenced by the [Obstruction of Justice]

guideline U.S.S.C. § 2J1.2, comment. (statutory

provisions) . . . .” Id. at 577. Brady went on to conclude

that despite defendant’s plea to criminal contempt, the facts of

record established by a preponderance of the evidence the

offense of obstructing justice as defined by 18 U.S.C. § 1503,

permitting the district court to have sentenced him, by analogy,

under the Obstruction of Justice guideline. Id. at 577-580.

“The elements of the obstruction offense -- purely an issue of

law -- are defined by the statute and interpretive case law.”

Id. at 577.

Under Brady’s reasoning as well as the language of

application note 14 to U.S.S.G. § 2F1.1, when the district court

sentenced the defendant under the Obstruction of Justice

guideline as the guideline that “more aptly cover[s]” the

offense of conviction, it was required to have done so (1) with

reference to a statute listed thereunder that more specifically

describes the defendant’s offense conduct than does the offense

of making false statements and (2) by finding by a preponderance

-13-
of the evidence that the elements of that “more specific

statute” were met. U.S.S.G. § 2F1.2, cmt. n. 14. The district

court did not follow this approach. Instead, it adopted the

mistaken premise that the Obstruction of Justice guideline, the

one that ostensibly “more aptly covered” the offense of

conviction, “is given a broader meaning in the guidelines than

in the statute,” and held that, despite the lack of factual

support for a finding of a violation of 18 U.S.C. § 1503 to

which the government referred in order to invoke the Obstruction

of Justice guideline, Scungio’s crime of lying to the FBI was

“obstruction of justice in the very broad sense.” This approach

went beyond anything authorized in the guidelines.

Had the district court applied the factual allegations

in the indictment charging Scungio with making false statements,

or the stipulated facts in the PSR describing the offense

conduct, to the elements of 18 U.S.C. § 1503, it would not have

been able to conclude that the Obstruction of Justice guideline

or the offense of obstructing justice as defined by 18 U.S.C. §

1503 covers -- let alone “more aptly cover[s]” -- Scungio’s

offense. Neither the indictment charging Scungio with making

false statements nor the stipulated facts contained in the PSR

establish what the Supreme Court has ruled is an essential

element of 18 U.S.C. § 1503: that defendant knew or had notice

-14-
of a pending proceeding that his false statements would

obstruct. See Pettibone v. United States, 148 U.S. 197, 207

(1893) (holding that “a person is not sufficiently charged with

obstructing or impeding the due administration of justice in a

court unless it appears that he knew or had notice that justice

was being administered in such court”). See also United States

v. Aguilar, 515 U.S. 593, 601 (1995) (extending Pettibone,

holding that defendant’s false statements to the FBI did not

violate 18 U.S.C. § 1503's prohibition of endeavoring to

obstruct the due administration of justice absent evidence that

defendant knew that his false statements would be provided to

the grand jury); Frankhauser, 80 F.3d at 650-51 (in a

prosecution under 18 U.S.C. § 1503, in the absence of some

evidence that defendant knew or had notice of a pending grand

jury proceeding concerning the individual about whom he lied to

the FBI, motion of acquittal should have been granted). In

other words, without facts to support by a preponderance of the

evidence an essential element of the relevant obstruction of

justice offense, Scungio’s offense was not “more aptly covered”

by the Obstruction of Justice guideline and sentencing could not

proceed thereunder. See, e.g., United States v. Duranseau, 19

F.3d 1117, 1123 (2d Cir. 1994) (interpreting the same “more

aptly covered” language that annotates the Fraud and Deceit

-15-
guideline, § 2F1.1, and holding that it was reversible error to

sentence under the Obstruction of Justice guideline because the

referenced perjury offense did not “more aptly cover[]” the

defendant’s offense as the defendant never submitted a statement

under oath or the penalty of perjury, an essential element of

perjury).

The only factual finding the district court made with

regard to the requirement that the defendant knew of the pending

proceeding he is alleged to have obstructed is that some such

related proceeding was actually pending before a grand jury.

The district court found that “when [Scungio] lied to the FBI

about [Pannone accepting the Calendas’ bribe money and Pannone

referring Scungio to the Calendas for representation], the FBI

was in the middle of a very serious investigation and a grand

jury had been already impaneled.” Notably, the district court

did not find that the defendant knew of the grand jury

proceeding, see Frankhauser, 80 F.3d at 650-51, or, more

importantly, that the false statements he provided to the FBI in

connection with that proceeding would be provided to the grand

jury, see Aguilar, 515 U.S. at 601. Moreover, there are no

facts in the indictment or in the PSR from which the district

court could have found such specific knowledge on Scungio’s

part. At most, the facts establish that Scungio knew that the

-16-
FBI was investigating Pannone about his role in public

corruption in Providence. These facts do not establish by a

preponderance of the evidence that Scungio knew of the grand

jury proceeding that was investigating Pannone’s past acts of

extortion and mail fraud, past acts that were unrelated to those

in the present case involving Scungio. See id. (stating that

the mere fact that defendant knows of a grand jury proceeding

when he makes false statements to an FBI agent “would not enable

a rational trier of fact to conclude that [defendant] knew that

his false statement would be provided to the grand jury, and

that the evidence goes no further than showing that the

[defendant] testified falsely to an investigating agent”). Nor

do they establish that Scungio knew that the statements he was

making to the FBI, fairly construed as exculpatory denials,

would reach the grand jury.

As neither the indictment nor the PSR establish a

violation of 18 U.S.C. § 1503, Scungio’s offense is not “more

aptly covered” by the Obstruction of Justice guideline.

Sentencing Scungio thereunder was therefore error.

II. Applying the “Special Skill” Enhancement

In response to Scungio’s second issue on appeal, the

government now concedes that the district court erred in

-17-
applying a two-level increase in defendant’s offense level on

the basis of his “special skill” of lawyering, see U.S.S.G. §

3B1.3, as there was insufficient evidence in the record to

support such an enhancement. See id. (for the special skill

enhancement to apply, the government must show both that the

defendant possessed a special skill and that he used that

special skill “in a manner that significantly facilitated the

commission or concealment of the offense”); United States v.

Reccko, 151 F.3d 29, 31 (1st Cir. 1998) (defining this

enhancement process as a two-step inquiry: (1) determining

whether the defendant possesses a special skill and (2) how, if

at all, the defendant used that skill to facilitate or conceal

the offense). We agree. Not only was there insufficient

evidence to conclude that Scungio’s skill as a tax lawyer

significantly facilitated his deceitful responses to the FBI in

these circumstances,7 but the district court also did not make

findings to that effect. See Reccko, 151 F.3d at 31 (defining

7 The sentencing guidelines define attorneys as possessing
a special skill. See U.S.S.G. § 3B1.3, cmt. n. 3. The question
before the district court, then, was whether the government
proffered evidence sufficient to support a finding by a
preponderance of the evidence that Scungio’s skill as an
attorney “significantly facilitated” the commission of his
offense. See United States v. Connell, 960 F.2d 191, 197 (1st
Cir. 1992) (“The prosecution has the burden of proving, by a
fair preponderance of the evidence, that section 3B1.3 applies
in a given situation.”).

-18-
the second prong as requiring a finding that the defendant used

that skill to facilitate or conceal the offense in a significant

way). At most, it might be surmised that Scungio’s lawyering

skills could be put to such a use in other hypothetical

circumstances. This is not enough to support the enhancement.

We therefore vacate the sentence as imposed by the

district court under U.S.S.G. § 2J1.1, the Obstruction of

Justice guideline, and under U.S.S.G. § 3B1.3, and remand to the

district court for resentencing not inconsistent with this

opinion.

-19-