United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS
July 19, 2007
FOR THE FIFTH CIRCUIT
Charles R. Fulbruge III
__________________________ Clerk
No. 05-20545
__________________________
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
SAM JIMMIE MANN,
Defendant-Appellant.
___________________________________________________
On Appeal from the United States District Court
for the Southern District of Texas
4:03-CR-314-1
___________________________________________________
Before GARWOOD, WIENER, and CLEMENT, Circuit Judges.
EDITH BROWN CLEMENT, Circuit Judge:
Sam Jimmie Mann appeals his convictions for extortion under color of official right,
wire fraud, and conspiracy to commit these and other crimes. Mann also challenges the
sentencing enhancements and restitution ordered by the district court following
conviction. For the following reasons, we REVERSE his convictions on five counts and
AFFIRM all others. We also AFFIRM the sentence.
I. FACTS AND PROCEEDINGS
Mann served as police commissioner for the city of Kendleton, Texas, from 1996
until 2000. In 2003, a grand jury indicted Mann on 52 counts stemming from his alleged
misdeeds during his time as police commissioner. A jury found Mann guilty of all 52
counts, but the trial judge granted Mann’s motion for acquittal as to counts 5 and 6. The
judge then sentenced Mann to serve 60 months of imprisonment on count 1 and counts 10
through 52, and 63 months of imprisonment on counts 2, 3, 4, 7, 8, and 9, all such terms to
run concurrently. The district court also ordered, inter alia, that Mann pay $390,931.57 in
restitution. On appeal, Mann challenges the sufficiency of the evidence underlying all of
his convictions. He also asserts that the district court made numerous errors in calculating
his offense level under the United States Sentencing Guidelines and that the amount of
restitution it ordered was an abuse of its discretion.
The following facts were adduced at Mann’s trial. Kendleton is a small town of
about 600 people in Fort Bend County, Texas. United States Highway 59 passes through
the center of the town on its northbound route to Houston. In 1996, the mayor of
Kendleton, Carolyn Jones, hired Mann to serve as police commissioner. Prior to Mann’s
arrival, Kendleton did not have a police commissioner, and the Kendleton Police
Department (“KPD”) was headed by Clarence Hodges, who had been named police chief
in 1996. Mann served as police commissioner, a position superior to police chief, until his
termination in March of 2000.
A. The warrant scheme
Like many municipalities, Kendleton derived substantial revenue from issuing
traffic tickets. In Texas, however, municipalities of under 5,000 inhabitants are limited,
-2-
with some exceptions, to deriving only thirty percent of their revenue from fines collected
from violations of state highway law. TEX. TRANSP. CODE ANN. § 542.402(b). Any
additional fines must be sent, less one dollar, to the state of Texas. Id. Over time,
Kendleton became indebted to the state due to its failure to follow this provision. By May
of 2000, Kendleton owed the state approximately $500,000 in unremitted excess fines and
associated court costs.
In April of 2000, members of the Kendleton City Council became concerned about
this shortfall and sent a letter to Texas Ranger Jeff Cook, requesting that he investigate the
KPD. In the letter, the councilmembers explained their concern that ticket revenue was
being collected and not forwarded to the state, causing the city to fall deeper into debt.
Specifically, the letter suggested that the KPD was collecting cash in satisfaction of fines.
Cook investigated these allegations by interviewing former and present Kendleton officers
and reviewing the department’s bank records; he concluded from this investigation that
“there were some general standard practices being used in Kendleton that [he] had never
seen before.” Cook explained that in other municipalities, if a person did not pay his or
her traffic fine, the court would issue a warrant and send it to the police department to
serve, but the money collected following the issuance of the warrant would go directly to
the municipal court. By contrast, the KPD would issue the warrant itself, stamp it with a
judge’s signature, and then attempt to collect it. Once an officer collected the money, it
would be deposited into the department’s bank account. Cook stated that this procedure
was unique to Kendleton.
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On May 8, 2000, Cook executed a search warrant for the city’s offices and the KPD,
which occupied a single building in Kendleton. The search recovered the KPD’s “warrant
transaction sheets,” which were used to record fines paid to the department in satisfaction
of warrants. Cook compared the names on the sheets with the names of individuals whose
checks and money orders were deposited into the department’s bank account, and
discovered a “big anomaly” between the lists of names. Cook concluded that the
department was accepting payment in cash, checks, or money orders, but only depositing
the checks and money orders to the account. The warrant transaction sheets only reflected
the amounts paid in cash to the department. Cook also noted numerous money orders in
very small amounts, as little as one dollar, deposited into the department’s account. He
concluded that in order to make the cash total on the transaction sheet equal to the amount
deposited into the bank account, the department would purchase these small money
orders to make it look as if the amounts paid to the department were all being deposited.
Cook noted a second anomaly with the KPD’s bank account, which was that it was
used to pay the salaries of the officers, as well as the department’s operating costs. He
stated this was unusual because most municipalities have a single budget that covers all
departments, so the police department would not be as directly self-financed as
Kendleton’s. Once Cook identified this “theft scheme,” he alerted an FBI agent to his
conclusions.
The warrant division of the KPD was run by Gerald Davis, who was in charge of
all the warrants issued by the department, as well as all money received to pay the
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warrants. Davis would collect the fines and also make the concurrent bank deposits.
During Cook’s investigation, he spoke with Davis about the operations of the warrants
division, and Davis indicated that the department only accepted cash payments under
extraordinary circumstances, and the department had a policy, instituted by Mann, that
forbade the acceptance of cash. Davis’s testimony, recounted below, revealed this
statement to be false. Davis was the critical witness against Mann at trial where he
testified that he was “very close” with Mann and that Mann was like a “father figure” to
him. Davis explained that the scheme began one day when a check from a Western Union
1
wire transfer arrived at the KPD in Davis’s name. Davis alerted Mann, who instructed
Davis to cash the check. Davis did so, and Mann told Davis to give him the money. Davis
did this as well. Mann told Davis that he intended to keep the money and instructed Davis
to “do the switchout.” Davis had to ask what that meant, and Mann explained that he was
to switch the name of someone who paid cash with the name of the sender of the Western
Union order. Mann told Davis that the cash was going to be for a “separate account,” and
so Davis gave Mann deposit slips and warrant jackets to accompany the payments.
Eventually, Mann instructed Davis to destroy the warrant jackets that accompanied some
of the payments “to keep anyone from figuring out what happened.” Thereafter, Davis
destroyed the jackets by burning them in the barbeque pit at his house and ceased
providing the supporting paperwork to Mann.
1
Davis was not sure when he and Mann began stealing the cash from the
department, but he believed that it began in 1997 or 1998.
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Davis explained that he then began holding checks and money orders until he
collected an equivalent amount of cash, then depositing the checks and money orders but
noting only the cash payments on the warrant transaction sheets. Davis would also
purchase the low-value money orders necessary to make up any discrepancy between the
amount recorded on the warrant transaction sheets and the amount deposited. Davis
testified that Mann had instructed him to do all of these things and had initially given
Davis the cash to purchase the money orders.
Davis reviewed a number of warrant transaction sheets he prepared and explained
this process to the jury in great detail. He also stated that he “had to try to mislead” city
councilmembers, the department’s bookkeepers, or anyone with questions about the KPD’s
finances. To this end, he maintained two sets of receipt books, one of which was a
“dummy book” from which he would give receipts to those who paid by check or money
order; Davis would destroy this book once all of its receipts had been issued. Mann would
retain the “legitimate” receipt books in his office once Davis filled them.
Davis instructed several different officers of the KPD warrants division to go to the
homes of people who had received warrants and collect cash from them. These officers
would give him the cash at his home, their homes, the police department, or Club Uptown,
2
which was owned by Mann. Mann would periodically ask Davis how much cash he had
2
Evidence was presented at trial that Mann opened several bank accounts during
this time, and he made deposits into them that were out of line with his salary from the
KPD. He argued that the money came from the two local bars he owned, but sales tax
receipts from those bars suggested that this was highly unlikely.
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collected, and Davis would then turn the money over to Mann, who would give Davis
some portion of it to keep for himself. Davis testified that this activity continued even after
Mann had left the police department following his termination as police
commissioner—Davis would meet Mann at his home or club and the two would divide
the cash. Davis testified that on a few occasions, he kept all of the cash for himself. On one
occasion, Davis directly paid the collecting officer, A.J. Frank, with the cash he had
3
collected per an instruction from Mann. According to Davis, Mann observed him
collecting cash “several times.” Davis also testified that Mann typed checks drawing on
the KPD account two or three times per week.
B. The COPS scheme
During Mann’s tenure as police commissioner, Kendleton applied for a grant from
the federally-funded Community Oriented Policing Services (“COPS”) universal hiring
program. The application was signed by Mann, as Kendleton’s top law enforcement
executive, and Jones, as Kendleton’s top government executive. Mann and Jones also
signed a certification indicating that the information provided on the application was true.
The application form made it clear that COPS grant money could only be used for “new
officer positions.” The application requested funding for six additional full-time police
officers in 1997, three more in 1998, three more in 1999, and one more in 2000. The
application also stated that the current entry level salary for a Kendleton police officer was
3
According to Davis, officers routinely received a “fee” for collecting on a warrant,
with the fee coming out of the collected amount. In the instance discussed above, Officer
Frank sought an advance on his paycheck.
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$18,500 per year, plus $4,440 in benefits. The grant application was accepted, and the
COPS program awarded Kendleton a grant of $318,171 to be used over time to partially
fund the salaries of six additional full-time entry-level officers. Mann and Jones signed the
document accepting the award on May 1, 1998. The acceptance document repeated the
proviso that the funds “must be used to hire one or more new, additional career law
enforcement officers . . . . Unless authorized in writing by the COPS office, grant funds
may not be applied to the salary or benefits of an officer hired by a grantee prior to the
award start date.”
Ronald Waddell, a retired former employee of the Department of Justice’s Office
of the Inspector General (“OIG”), testified that as part of his job he monitored audits of the
recipients of COPS grants. At some point, Waddell oversaw an audit of Kendleton’s COPS
grant that turned up substantial irregularities, causing him to turn the matter over to the
investigations division of the OIG. Waddell explained that COPS universal hiring
program money may only be used to hire additional entry-level officers, not to fund the
salaries or benefits of officers already on the grantee’s payroll. He testified that at the time
the application was filed, Kendleton did not pay any health benefits to its officers, contrary
to what was stated on the grant application. Moreover, Kendleton paid its entry-level
officers just $10,000 per year, much less than the application stated. Waddell explained
that the award start date was May 1, 1998, and so all officers receiving COPS money had
to be hired after that date. Shortly after the award start date, the City of Kendleton began
drawing $4,684 dollars out of the available COPS money every couple of weeks until the
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payments were stopped in May of 2000. The money, a total of $213,297, was wired from
a federal reserve bank in New Jersey to Kendleton’s bank in Texas.
Waddell described the first annual report to COPS submitted by Kendleton, also
signed by Mann. The report was intended to describe how Kendleton spent the COPS
grant money allocated during 1998. The report contained numerous misrepresentations.
For example, it stated that the officer with Badge No. 801, for whom COPS money was
allocated, was newly hired on June 11, 1998. Badge No. 801 was Mann’s badge. Similar
information was filled in for Officers Bruce Jackson, Darryl Smith, Gerald Davis, Rene
4
Becerra, and Michael Davis. Waddell testified that he had analyzed payroll information
for Kendleton and found that all of these officers were on the payroll prior to the issuance
of the COPS grant.
At the close of trial, the jury convicted Mann of all 52 counts against him.
Specifically, it found him guilty of conspiracy to violate federal law, in violation of 18
U.S.C. § 371, eight counts of interference with commerce by threats or violence (Hobbs Act
extortion), in violation of 18 U.S.C. § 1951, and 43 counts of wire fraud, in violation of 18
U.S.C. § 1343. The trial judge then granted Mann’s motion to enter a judgment of acquittal
on two of the violations of 18 U.S.C. § 1951. At sentencing, the judge applied a two-level
enhancement for obstruction of justice based on the false testimony Mann gave at trial, a
two-level enhancement for Mann having committed more than one extortion, an eight-
4
The officers were all identified by their badge numbers. Waddell testified that
despite requests by the OIG, Mann never provided the names of the officers receiving
COPS money. Waddell managed to identify the other officers using public records.
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level enhancement because Mann held a high-level decision-making position, and a four-
level enhancement because the criminal activity was extensive. The judge also rejected
Mann’s challenge to the amount of restitution recommended in the PSI and imposed
5
restitution of $177,634.57 for the amount lost to Kendleton from the warrant scheme and
$213,297 for the amount transferred to Kendleton under the COPS program.
Mann challenges the sufficiency of the evidence as to all of his convictions. He also
challenges the enhancements to his sentence and the restitution ordered by the district
court.
II. STANDARD OF REVIEW
“In determining whether there was sufficient evidence to sustain [the] convictions,
we must decide, viewing the evidence and the inferences therefrom in the light most
favorable to the verdict, whether a rational juror could have found [the defendant] guilty
beyond a reasonable doubt.” United States v. Anderson, 174 F.3d 515, 522 (5th Cir. 1999)
(citing United States v. Burton, 126 F.3d 666, 669 (5th Cir. 1997); United States v. Payne, 99
F.3d 1273, 1278 (5th Cir. 1996)). “The evidence need not exclude every reasonable
hypothesis of innocence or be wholly inconsistent with every conclusion except that of
guilt, and the jury is free to choose among reasonable constructions of the evidence.” Id.
(quoting Burton, 126 F.3d at 669–70). “Moreover, our standard of review does not change
if the evidence that sustains the conviction is circumstantial rather than direct.” Id.
We review the district court’s interpretation and application of the Sentencing
5
Mann and Davis were found jointly liable for this amount.
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Guidelines de novo. United States v. Villanueva, 408 F.3d 193, 202–03 (5th Cir. 2005). We
review its factual findings for clear error. Id.
III. DISCUSSION
A. Sufficiency of the evidence
(1) Conspiracy
Mann asserts that his conviction for conspiracy to violate federal law was not
supported by sufficient evidence. “In order to prove conspiracy pursuant to 18 U.S.C. §
371, the Government must prove (1) an agreement between two or more persons to pursue
an unlawful objective; (2) the defendant's knowledge of the unlawful objective and
voluntary agreement to join the conspiracy; and (3) an overt act by one or more of the
members of the conspiracy in furtherance of the objective of the conspiracy.” United States
v. Floyd, 343 F.3d 363, 370 (5th Cir. 2003) (internal quotation omitted). “[A] general guilty
verdict on a multiple-object conspiracy charge may stand even if the evidence is
insufficient to sustain a conviction on one of the charged objects.” United States v. Calle,
120 F.3d 43, 45 (5th Cir. 1997). The evidence only needs to be sufficient to support a
conviction for one of the charged objects. Id.
The indictment charged Mann with conspiring, inter alia, to commit mail fraud.
“The three elements of conspiracy to commit mail fraud are (1) an agreement between
[Mann] and others (2) to commit the crime of mail fraud, and (3) an overt act committed
by one of the conspirators in furtherance of that agreement.” United States v. Sneed, 63
F.3d 381, 385 (5th Cir. 1995) (internal quotation omitted). “To sustain a mail fraud
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conviction, the government must prove (1) a scheme to defraud (2) which involves a use
of the mails (3) for the purpose of executing the scheme.” United States v. Ingles, 445 F.3d
830, 835 (5th Cir. 2006); see also 18 U.S.C. § 1341. The test to determine whether a
defendant caused the mails to be used is whether the use was reasonably foreseeable; the
defendant need not intend to cause the mails to be used. Id.
As described above, the government presented ample evidence at trial that Davis
and Mann conspired to defraud Kendleton of money due to it from individuals who failed
to appear in court. Davis testified that Mann instructed him to keep two sets of books in
order to hide some of the money and to burn the warrant jackets associated with certain
payments. Further, Davis testified that many of the checks and money orders arrived by
mail, and Davis would mail receipts back to the individuals, which was part of the
ordinary way in which warrants were processed. It was thus reasonably foreseeable to
Mann that the mails would be used for the purpose of executing the scheme at the time it
was concocted. We thus find that sufficient evidence supports Mann’s conviction for
conspiracy to violate federal law.
(2) Wire fraud
Mann asserts that his convictions for wire fraud were not supported by sufficient
evidence. “Wire fraud is (1) the formation of a scheme or artifice to defraud, and (2) use
of the wires in furtherance of the scheme.” United States v. Brown, 459 F.3d 509, 518 (5th
Cir. 2006). “Violation of the wire-fraud statute requires the specific intent to defraud, i.e.,
a conscious knowing intent to defraud.” Id. at 519 (internal quotation omitted).
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Mann’s wire fraud convictions stemmed from the 43 wire transfers of money from
the United States Treasury to Kendleton’s bank account. Testimony at trial established that
Mann formed a scheme to use the COPS grant for an improper purpose, including self-
enrichment. See United States v. Powers, 168 F. 3d 741, 746 (5th Cir. 1999) (“An intent to
defraud for the purpose of personal gain satisfies the ‘harm’ requirement of the wire fraud
statute.”).
Though Mann’s defense was that he simply did not understand the rules of the
COPS program, and thus had no intent to defraud, the application he submitted indicated
that Kendleton intended to hire new officers with the COPS money. Because he never
hired any new officers and instead used the money to increase salaries and benefits of
officers already on the payroll, the jury could infer that he had an intent to defraud when
he submitted the application. Use of the wires in furtherance of the scheme was
demonstrated by the transfers themselves. This use was reasonably foreseeable to Mann,
though he had no role in establishing the bank account, because money is commonly paid
over long distances by means of wire transfer. See, e.g., United States v. Richards, 204 F.3d
177, 207–08 (5th Cir. 2000), overruled on other grounds by United States v. Cotton, 535 U.S.
6
625, 631 (2002). The jury had sufficient evidence to convict Mann on these counts.
(3) Hobbs Act convictions
6
Mann also argues that the jury could not have convicted him on aiding and
abetting wire fraud, an alternative charge under counts 10 to 43 of the indictment. Because
we conclude that the jury had sufficient evidence to convict him on commission of wire
fraud, we need not reach this argument.
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Mann asserts that his convictions under the Hobbs Act, 18 U.S.C. § 1951, were not
supported by sufficient evidence because the government failed to prove that his alleged
acts interfered with interstate commerce, which is a required element for conviction under
the Hobbs Act.
Mann’s argument on this point is not perfectly briefed. With regard to each of the
Hobbs Act convictions, he offers a sentence noting that little evidence was presented about
the origins or destinations of the ticketed travelers or the effect that ticketing them had on
interstate commerce. Standing alone, these perfunctory arguments would probably be
insufficient to preserve the issue for review. See United States v. Green, 964 F.2d 365, 371
(5th Cir. 1992). However, Mann also challenges whether his convictions under the Hobbs
Act amounted to an unconstitutional application of the Commerce Clause. In his
discussion of that issue, he refers specifically to the “jurisdictional element” of the Hobbs
Act and cites United States v. Box, 50 F.3d 345 (5th Cir. 1995), discussed infra, to support
his argument that his convictions under the Hobbs Act are unconstitutional because no
7
evidence of an effect on interstate commerce was shown. Although inartfully pleaded,
Mann’s brief does raise the issue of the sufficiency of the evidence for our consideration.
Despite his conflation of the evidentiary and constitutional questions, we will evaluate his
8
arguments.
7
The first sentence of Mann’s brief reads, “[p]roving that interstate commerce has
been affected is critical because federal jurisdiction rests on that basis.”
8
This conflation is somewhat understandable in light of Fifth Circuit precedent—at
least one panel of this circuit has dispensed with both questions in a single analysis. See
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The Hobbs Act punishes “[w]ho[m]ever in any way or degree obstructs, delays, or
affects commerce or the movement of any article or commodity in commerce, by robbery
or extortion.” 18 U.S.C. § 1951(a). The term “commerce” as defined by the statute means,
inter alia, “all commerce between any point in a State, Territory, Possession, or the District
of Columbia and any point outside thereof.” Id. § 1951(b)(3). A Hobbs Act prosecution
requires the government to prove that the defendant committed, or attempted or conspired
to commit, a robbery or act of extortion that caused an interference with interstate
commerce. United States v. Robinson, 119 F.3d 1205, 1212 (5th Cir. 1997). In this instance,
sufficient evidence must indicate that each alleged violation of the Hobbs Act (i.e., each
driver who was pulled over and ultimately extorted) resulted in some interference with
interstate commerce. See United States v. Diaz, 248 F.3d 1065, 1084 (11th Cir. 2001)
(“Unlike a conspiracy charged under the Hobbs Act, which only requires proof that
defendants’ scheme would have affected interstate commerce, a substantive Hobbs Act
violation requires an actual effect on interstate commerce.”).
This circuit’s caselaw is consistent on this point. In Robinson, we noted that
“[e]very robbery or act of extortion in violation of the Hobbs Act must have an effect on
interstate commerce; the Act’s express jurisdictional element ensures this.” 119 F.3d at
1215. In United States v. Jennings, 195 F.3d 795, 802 (5th Cir. 1999), we affirmed the
defendant’s conviction for attempted interference with interstate commerce in violation
of the Hobbs Act only after finding that a successful completion of his scheme “would
United States v. Villafranca, 260 F.3d 374, 377 (5th Cir. 2001).
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have . . . curtailed interstate purchases.” 195 F.3d at 802. We have refused to affirm
convictions under the Hobbs Act when the government failed to prove that the defendant’s
acts had an effect on interstate commerce, which is necessarily more difficult to show when
the victim of the crime is an individual and not a business. See Box, 50 F.3d at 352; United
States v. Collins, 40 F.3d 95, 100–01 (5th Cir. 1994).
In Box, the defendants were convicted, inter alia, of both (1) conspiracy to extort in
violation of the Hobbs Act and (2) several substantive counts of extortion under the Hobbs
Act, stemming from a scheme in which they extorted money from travelers they arrested
for indecent exposure at a roadside park. 50 F.3d at 348. Two defendants challenged
these convictions and asserted that the government had failed to prove that their conduct
affected interstate commerce. Id. The court noted that while proving an effect on
interstate commerce is critical, “the effect on commerce need only be slight” to support a
conviction. Id. at 352. The court noted that evidence at trial showed that many of the
arrested travelers were from other states or traveling to them, that the highway on which
the rest area was located, U.S. Highway 287, “provided access to other highways leading
to other states,” and that the roadside park was specifically constructed to facilitate
interstate travel. Id. The court upheld the defendants’ conspiracy convictions based on
this evidence. Id.
Box demonstrates that a generalized connection between the alleged criminal
activity and interstate commerce is sufficient to sustain a conviction for conspiracy to
violate the Hobbs Act. However, substantive convictions under the Hobbs Act require that
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the alleged act actually have an effect on interstate commerce. The court in Box noted that
in order to sustain each substantive conviction under the Hobbs Act, it needed to “make
a closer examination of the evidence.” Id. It found that in regard to three of the counts,
because the victims “were Texas residents and traveling within the state, there has been
no showing that interstate commerce was affected.” Id. It held that the location of the
roadside park, by itself, was not sufficient to satisfy the interstate commerce requirement.
Id. It reversed these convictions for insufficient evidence. Id. By contrast, the court
upheld the defendants’ convictions with respect to travelers proven to have been engaged
in interstate travel at the time of the arrest. Id. The facts and analysis in Box demonstrate
that the government has the burden to show that each underlying count had an effect on
interstate commerce, beyond the mere use of a highway connecting to the interstate system
9
as the location of the extortion.
Of the six contested counts against Mann under the Hobbs Act, the government only
provided evidence that one of the travelers (Raul Salazar, named in count 3) who was
10
victimized by the extortion scheme was traveling to or from a point outside of Texas. The
9
Box has been cited approvingly in Hobbs Act cases following United States v.
Lopez, 514 U.S. 549 (1995), and its holding remains the law in this circuit. See Villafranca,
260 F.3d at 377–78 & n.12; Robinson, 119 F.3d at 1212. The dissent questions our reliance
on Box by suggesting that Lopez somehow broadened this circuit’s interpretation of
Congress’s Commerce Clause powers, such that Box is no longer good law. However, Box
itself was cited as recently as 2001 for reflecting our historically “expansive application of
the government’s commerce power in the Hobbs Act context.” Villafranca, 260 F.3d at 378
n.12.
10
Salazar testified that when he received his ticket he was traveling from Mexico to
Atlanta, Georgia. He missed his court date, and when his daughter called the KPD she
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traveler named in Count 2, Phyllis McIver Dowlin, did not testify as to her origin or
destination on the day she was stopped by the KPD. The traveler named in Count 4,
Wanda Mitchell, testified that when she received a citation for speeding from the KPD, she
was traveling from Houston to “San Antone.” No further evidence was presented about
her destination. The travelers named in Counts 7, 8, and 9, Linda Sedillo, Edith Salinas,
and Gloria Drayton, did not offer any testimony about their origins or destinations at the
11
time they were pulled over.
The government asserts that the other convictions may be sustained because: (1)
Highway 59 is used by a number of travelers who are engaged in interstate trips; (2) the
travelers here would not have stopped unless they were pulled over, unlike the travelers
in Box who had stopped at the rest area on their own; (3) the scope of the activities was
“pervasive” and thus affected a number of interstate drivers; and (4) federal funds were
used to pay the salaries of the arresting officers.
The first argument is unpersuasive, since it does not speak to the facts of any of the
individual offenses. The government’s second argument also fails, because it was the
was told to wire $537, payable to Gerald Davis, to satisfy the fine. He did so, but he
testified that he would not have paid the fine if he had known that it was going into
someone’s pocket, and not to the city of Kendleton. The docket sheet did not reflect any
disposition of his ticket. Mann contends that Salazar was never threatened with arrest or
use of force, but no threat or force need be proved when the defendant is a public officer.
United States v. Westmoreland, 841 F.2d 572, 581 (5th Cir. 1988).
11
A number of other travelers who had been issued warrants by the KPD testifed
as well, though their experiences were used to support the overt acts portion of the
conspiracy charge against Mann.
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destination of the travelers themselves that sustained the convictions in Box, not the place
of their arrest or the amount of inconvenience they suffered. The third argument also does
not speak to the individual acts charged. The government’s fourth argument
misunderstands the nature of the inquiry—each Hobbs Act violation must cause
interference with interstate commerce; it is not sufficient to show that interstate commerce
was somehow implicated in the course of events. See, e.g., United States v. Davis, 707 F.2d
880, 881–84 (6th Cir. 1983) (holding that a sheriff interfered with interstate commerce
because he coerced his deputies into diverting federal funds into his election campaign
coffers). Because the government failed to prove a substantial effect on interstate
commerce in counts 2, 4, 7, 8, and 9, we must reverse these convictions.
Mann asserts that count 3 should also be reversed, despite the fact that Salazar was
traveling interstate when he was stopped, because the government never proved that
Mann himself extorted Salazar. The evidence described supra indicates that Davis acted
according to Mann’s instructions regarding their scheme when he told Salazar’s daughter
that Salazar needed to send a money order made out in Davis’s name to satisfy Salazar’s
outstanding warrant. We affirm this conviction.
B. Constitutionality of the Hobbs Act convictions
Mann asserts that his convictions under the Hobbs Act were unconstitutional
because the government failed to prove that his conduct had a nexus with interstate
commerce. Having vacated all but one of Mann’s Hobbs Act convictions, we need only
examine this argument with respect to Count 3, in which the government proved that the
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traveler in question was headed from Mexico to Georgia. Mann agrees that Congress has
the power to prohibit activities that have a deleterious effect on interstate commerce, but
he asserts that stopping an interstate traveler and extorting money under color of official
right would lie outside of Congress’s powers under the Commerce Clause. This argument
directly contradicts the holding in Box, discussed supra, and is thus unavailing.
C. Challenges to sentencing
Mann was sentenced under the 1998 version of the Sentencing Guidelines. The
district court assigned Mann a base offense level of 10 and a criminal history category of
I. It then enhanced Mann’s offense level pursuant to four different sections of the
guidelines. Mann’s adjusted offense level was 26, yielding a guideline range of 63 to 78
months of imprisonment. The district court sentenced Mann to 60 months imprisonment
on the conspiracy and wire fraud charges (counts 1 and 10 through 52) and 63 months
imprisonment on counts 2 through 4 and 7 through 9, terms to be served concurrently. The
district court also imposed restitution of $390,931.57. Mann challenges the sentencing
enhancements and the restitution determination.
(1) Enhancement under U.S.S.G. § 2C1.1(b)(1)
The district court increased Mann’s offense level by two because it found that
Mann’s offenses involved more than one extortion “based upon the evidence at trial.” See
U.S.S.G. § 2C1.1(b)(1) (“If the offense involved more than one bribe or extortion, increase
by 2 levels.”). Mann contends that because the evidence did not support these convictions,
this enhancement was erroneous. The “offense” referred to in section 2C1.1(b)(1) includes
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“the offense of conviction and all relevant conduct under § 1B1.3 (Relevant Conduct)
unless a different meaning is specified or is otherwise clear from the context.” U.S.S.G. §
1B1.1 cmt. n.1(l). “Relevant conduct includes offenses that are part of the same course of
conduct or common scheme or plan as the offense of conviction.” United States v.
Brummett, 355 F.3d 343, 344 (5th Cir. 2003). A district court’s determination of what
constitutes relevant conduct is reviewed for clear error. United States v. Solis, 299 F.3d
420, 461 (5th Cir. 2002).
While we have reversed his convictions for several of the extortionate acts, this does
not remove those acts from the universe of relevant conduct. “A district court may
consider non-adjudicated offenses (offenses for which the defendant has neither been
charged nor convicted) that occur after the offense of conviction, provided they constitute
‘relevant conduct’ under U.S.S.G. § 1B1.3.” Brummett, 355 F.3d at 344. The extortions of
the non-interstate travelers, which were proven by a preponderance of the evidence, as
well as the testimony of Davis as to the overall scheme to extort, was sufficient to support
a finding that Mann participated in more than one extortionate act. The district court did
not err in applying this enhancement.
(2) Enhancement under U.S.S.G. § 2C1.1(b)(2)(B)
The district court applied an eight-level enhancement because the “offense involved
a payment for the purpose of influencing . . . any official holding a high-level decision-
making or sensitive position.” See U.S.S.G. § 2C1.1(b)(2)(B). Mann’s position as police
commissioner of the KPD made him an “official holding a high-level decision-making or
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sensitive position.” Id. § 2C1.1(b)(2)(B) cmt. n.1. Mann asserts that the purpose of the
enhancement is to punish the person who makes the payment, rather than the recipient of
the payment, but there is no support for this position in the language of the guidelines and
it is controverted by caselaw. See United States v. Villafranca, 260 F.3d 374, 381 (5th Cir.
2001) (“The Guideline does not require that the defendant have paid the money to the
decisionmaking official; instead, it merely requires that the offense involve a payment to
such an official.”). Further, the evidence indicated that Mann received extorted payments
for the purpose of influencing his management of the KPD’s finances and recordkeeping
system. We find that the district court did not err in applying this enhancement.
(3) Enhancement under U.S.S.G. § 3B1.1(a)
The district court enhanced Mann’s sentence by four levels because it determined
that he was an “organizer or leader of a criminal activity that involved five or more
participants or was otherwise extensive.” U.S.S.G. § 3B1.1(a). Mann asserts that his
scheme, which involved numerous officers of the KPD who collected warrant payments
and passed them along to Mann through Davis, was not “otherwise extensive.” We
disagree. Moreover, the mayor of Kendleton and other city employees were involved
(some innocently) in the scheme to defraud the COPS program. The comments to section
3B1.1(a) make it clear that the district court could consider, for the purposes of applying
the enhancement, all of the persons implicated in carrying out the offenses, including those
who did so unknowingly. See U.S.S.G. § 3B1.1(a) cmt. n.3. The enhancement was not
erroneously applied.
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(4) Enhancement under U.S.S.G. § 3C1.1
The district court applied a two-level enhancement for obstruction of justice, due
to Mann’s various untruthful statements during the investigation and trial. See U.S.S.G.
§ 3C1.1 (providing for a two-level increase if 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”).
Obstruction of justice includes “committing . . . perjury” and “providing materially false
information to a judge.” Id. at cmt. n. 4(b), (f). For an obstruction of justice enhancement,
the district court’s factual findings are reviewed for clear error. See United States v.
Holmes, 406 F.3d 337, 363 (5th Cir. 2005).
Mann testified at trial that he did not know that COPS grant money could not be
used to increase the salaries of officers already on the payroll. Considering the evidence
that Mann deliberately attempted to mislead the government into believing that he had in
fact hired new officers with the money, the district court justifiably found this statement
to be false and perjurious. Further, this statement was material to the charges of wire
fraud because the wire fraud hinged on knowingly using the COPS grant for a forbidden
purpose. The district court did not clearly err in applying the enhancement.
(5) Restitution
The district court ordered Mann to pay $390,931.57 in restitution. We review the
legality of such awards de novo, and if the award is legally permitted we review the
amount for abuse of discretion. See United States v. Cothran, 302 F.3d 279, 288 (5th Cir.
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2002). Restitution may be required for losses deriving from the scheme, conspiracy, or
pattern of the offense of conviction. United States v. Love, 431 F.3d 477, 480 (5th Cir. 2005).
When a defendant has been convicted of participating in a scheme to defraud, “the district
court’s inclusion of all losses caused by the scheme” is appropriate for calculating
restitution. United States v. Pepper, 51 F.3d 469, 473 (5th Cir. 1995).
At trial, Susan Ridley, a financial analyst with the FBI, testified that Kendleton lost
$177,634.57 due to the actions of Mann and Davis during the course of their scheme to steal
money intended to pay outstanding warrants. Counts 10 through 52 identify a total loss
of $180,506.98 to the federal COPS grant program. Waddell, an auditor with the DOJ,
testified that Kendleton received a total of $213,297 under the COPS grant. This loss was
caused by Mann’s deliberate misstatements to the DOJ in the grant application and
subsequent progress reports. Though Mann asserts that he should only be held liable for
the amounts proved in the counts for which he was convicted, our caselaw does not
support this position. We hold that the district court did not abuse its discretion in
determining the amount of restitution.
IV. CONCLUSION
For the foregoing reasons, we REVERSE Mann’s convictions on counts 2,4,7,8, and
9. All other convictions and Mann’s sentence are AFFIRMED.
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WIENER, Circuit Judge, concurring in part and dissenting in part:
I concur in the majority’s opinion in all respects, except for Section III.A.(3)
— the section that reverses all but one of Mann’s Hobbs Act convictions. As to
those reversals, I respectfully dissent because I disagree with (1) the majority’s
willingness to characterize Mann’s challenge as one of insufficient evidence of
interstate nexus to support the convictions on Counts 2, 4, and 7-9, and (2) the
majority’s reliance on United States v. Box1 to conclude that there was
insufficient evidence of an effect on interstate commerce.2
1
50 F.3d 345 (5th Cir. 1995).
2
To me, the panel majority erroneously characterizes Mann’s challenge as one to the
insufficiency of the evidence. Actually, Mann’s brief makes pellucid that he makes only
a unconstitutional-as-applied challenge to his Hobbs Act convictions. Moreover, even if
Mann had couched his challenge in evidentiary terms, it still would be properly cognizable
as a constitutional challenge. Mann does not contend that the government failed to offer
evidence of an effect on interstate commerce; only that the evidence offered by the
government was constitutionally insufficient, as applied, to support a Hobbs Act
conviction, because it did not demonstrate an adequate interstate nexus.
The panel majority has essentially conceded this point, acknowledging that
“[s]tanding alone, these perfunctory arguments would be insufficient to preserve the issue
for review.” Instead of stopping there as it should have, the panel majority goes on in the
next three sentences to conclude that, because Mann has adequately raised a completely
separate, unconstitutional-as-applied challenge to his convictions (which I agree he has),
he has also adequately raised an insufficiency-of-the-evidence argument (which I conclude
he has not). I am puzzled by the majority’s legerdemain here. As far as I know, this court
has always maintained a strong policy against “lawyering” a party’s case for him. Part
and parcel of this policy is that a litigant who fails to raise or brief an issue is deemed to
have waived or abandoned it. Thus, I am unaware of any principle of this court that
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As the majority notes, the defendants in Box were charged with and
convicted for numerous acts of extortion against individuals at a rest area
abutting a U.S. Highway. The Box panel affirmed some convictions and reversed
others, based on whether the individual victim in each count was traveling
interstate or purely intrastate at the time of the defendants’ extortion.
Specifically, three convictions were affirmed, one because the victim was
traveling from Texas to Oklahoma, another because the victim was traveling
from Texas to Colorado and New Mexico, and the third because the victim was
traveling from Colorado to Oklahoma. Three other convictions were reversed,
however, because each victim was traveling from one location in Texas to
another. In like manner, the panel majority today reverses all but one of Mann’s
Hobbs Act convictions (the one in which the victim was traveling from Mexico
to Georgia), because the government failed to introduce evidence that the victims
in the remaining counts were traveling interstate, only that they were traveling
on a U.S. Highway.
If Box were still good law, I could not fault my colleagues for that result.
But I see reliance on Box as no longer justifiable. Ever since the Supreme Court
blesses a panel’s sua sponte cobbling together bits and pieces of a party’s disparate
arguments to deem a litigant to have conjured up an argument he never made. It is the
party’s task, and the party’s task alone, to preserve his issues and arguments by
sufficiently raising and briefing them.
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handed down United States v. Lopez,3 we have applied its “aggregation doctrine”
— and rightly so — when determining whether an act of extortion under a
Hobbs Act charge has a substantial effect on interstate commerce.4 I read Box
as an outlier for its failure to acknowledge or apply this aggregation doctrine in
determining whether the extortions at issue there had a substantial effect on
interstate commerce. (This is not meant as a criticism of the panel that rendered
Box, as it was decided several months before the Supreme Court handed down
Lopez with its express embrace of applying the aggregation principle in
Commerce Clause cases.) Today’s panel majority errs in relying on Box, a single
pre-Lopez, pre-aggregation case.5 Instead, we should, as mandated by Lopez and
3
514 U.S. 549 (1995).
4
United States v. Jennings, 195 F.3d 795, 799-801 (5th Cir. 1999); United States v.
Robinson, 119 F.3d 1205, 1214-15 (5th Cir. 1997).
5
The panel majority erroneously invokes United States v. Villafranca to justify
reliance on Box as the law of this circuit after Lopez. 260 F.3d 374, 378 n.12 (5th Cir. 2001).
In Villafranca, we stated, “[a]lthough Box predates the watershed Supreme Court decision
in United States v. Lopez, this circuit has reaffirmed the expansive application of the
government’s commerce power in the Hobbs Act context and related criminal law
contexts.” Id. at 378 n.12 (internal citations omitted and emphasis added). The majority
mistakenly takes this statement to mean that Box is still good law. The panel majority,
however, has missed or disregarded the context of this statement.
First, the Villafranca court’s statement was only directed to Box’s treatment of the
defendants’ Hobbs Act conspiracy convictions. It had no bearing on Box’s handling of the
defendants’ substantive Hobbs Act convictions. Here, only the disposition of Mann’s
substantive Hobbs Act convictions are in dispute. Thus, Villafranca’s discussion of Box
is inapposite.
Even more significantly, the Villafranca statement acknowledges that, both pre- and
post-Lopez, this court has applied an expansive view of the government’s commerce
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our own post-Lopez caselaw, analyze the facts of the subject case in light of a
Commerce Clause challenge by determining whether Mann’s extortionate acts,
if repeated in the aggregate across the nation, would have a substantial effect
on interstate commerce. When that is done, I find the conclusion inescapable
that, if small town police departments and rural sheriff offices all across the
country were to take U.S. Highways hostage with extortionate schemes and acts
like Mann’s, there absolutely would be a substantial effect on interstate
commerce. We do not need some Daubert-qualified expert to testify in support
of the government’s position or to underpin the obvious answer that interstate
commerce would be substantially affected by such an aggregation. To me, this
conclusion is wholly unavoidable: I would affirm all of Mann’s Hobbs Act
convictions after applying the methodology mandated by Lopez.
In closing, I note in the alternative that my position is also consistent with
the Supreme Court’s acknowledgment in Lopez that Congress may regulate the
use of the channels of interstate commerce by keeping them free from immoral
power. In Box, three substantive Hobbs Act convictions were reversed as being beyond
the government’s commerce power. The panel majority cannot contend that the
Villafranca statement acknowledging this court’s expansive treatment of the government’s
commerce power reaffirms the post-Lopez viability of a case that narrowed the
government’s commerce power. Moreover, the Villafranca statement acknowledging our
expansive application of the government’s commerce power is completely averse to what
the panel majority does today — narrow the government’s commerce power.
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and injurious uses.6 It cannot be debated that U.S. Highway 59, which has
spanned this country’s midsection from Canada to Mexico since 1934, is a
channel of interstate commerce. This is an independent reason why I cannot see
how the majority can conclude that Congress is without authority to punish
Mann’s “highway robbery” — an obvious malignant use of our interstate
highway system.
For these reasons, I must respectfully dissent from the majority’s reversal
of Counts 2, 4, and 7-9.
6
514 U.S. at 558.
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