[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
FEBRUARY 13, 2003
No. 01-15989 THOMAS K. KAHN
________________________ CLERK
D.C. Docket No. 97-00508-CR-2-1-MHS
UNITED STATES OF AMERICA,
Plaintiff-Appellee
Cross-Appellant,
versus
RICHARD POIRIER, JR.,
MICHAEL DEVEGTER,
Defendants-Appellants
Cross-Appellees.
__________________________
Appeals from the United States District Court
for the Northern District of Georgia
_________________________
(February 13, 2003)
Before ANDERSON and CARNES, Circuit Judges, and POLLAK*, District
Judge.
_____________________________
* Honorable Louis H. Pollak, United States District Judge for the Eastern District of
Pennsylvania, sitting by designation.
CARNES, Circuit Judge:
Defendants Michael deVegter and Richard Poirier, Jr. were convicted of
wire fraud and conspiracy as a result of evidence that they participated in a scheme
to defraud Fulton County, Georgia. In this appeal they challenge the sufficiency
of the indictment, the sufficiency of the evidence against them, and the correctness
of the jury instructions. Their arguments primarily center around their contention
that Fulton County was not actually defrauded of “money and property,” and for
that reason their wire fraud convictions and the conspiracy convictions based upon
the same prosecutorial theory cannot stand. DeVegter also challenges his
sentence, arguing that the district court should not have applied the enhancement
for abusing a position of trust. For reasons we will explain, we find no merit in
the defendants’ contentions.
The government, on the other hand, cross-appeals the sentences given both
defendants on a variety of grounds, and its contentions do have merit.
I. BACKGROUND
Defendants deVegter and Poirier were indicted for their roles in corrupting
the process by which Fulton County selected an underwriter for a bond refunding
project. Fulton County hired deVegter to serve as its independent financial
advisor as it solicited and evaluated proposals from competing underwriters.
2
Poirier was a partner with Lazard Freres & Co. (the Lazard firm), which eventually
was awarded the underwriting contract. In exchange for deVegter’s covert
assistance in ensuring that the Lazard firm’s proposal was selected, Poirier
through an intermediary paid deVegter over $40,000.00. A grand jury
subsequently indicted both deVegter and Poirier, charging them with three
offenses: conspiracy to commit wire fraud in violation of 18 U.S.C. § 371;
money-and-property wire fraud in violation of 18 U.S.C. § 1343; and honest-
services wire fraud in violation of 18 U.S.C. § 1346.1
The jury returned a verdict finding both defendants guilty of conspiracy and
of § 1343 wire fraud. It did not reach a verdict on the § 1346 honest services
charge.
II. DISCUSSION
A. THE CONVICTIONS ISSUES
1. The Sufficiency of the Indictment
Defendants contend that the indictment was insufficient to support a
conviction for § 1343 wire fraud, an issue we review de novo. United States v.
Pendergraft, 297 F.3d 1198, 1204 (11th Cir. 2002). “Generally, an indictment is
1
In a prior opinion in this case, we reversed the district court’s dismissal of the § 1346
charge. United States v. DeVegter, 198 F.3d 1324 (1999). That opinion details the allegations of
the indictment more than we have here. Id. at 1326.
3
sufficient if it: 1) sets forth the elements of the offense in a manner which fairly
informs the defendant of the charge against which he must defend and 2) enables
him to enter a plea which will bar future prosecution for the same offense.” Belt
v. United States, 868 F.2d 1208, 1211 (11th Cir. 1989) (citing Hamling v. United
States, 418 U.S. 87, 117, 94 S. Ct. 2887, 2907 (1974)). “A grand jury indictment
must set forth each essential element of an offense in order for a resulting
conviction to stand.” United States v. Italiano, 837 F.2d 1480, 1482 (11th Cir.
1988) (quoting United States v. Outler, 659 F.2d 1306, 1310 (5th Cir. Unit B Oct.
1981) overruled on other grounds by United States v. Steele, 147 F.3d 1316, 1320
(11th Cir. 1998) (en banc)). The elements of a § 1343 wire fraud violation are:
(1) intentional participation in a scheme to defraud; and (2) use of wire
communications to further that scheme. United States v. Brown, 40 F.3d 1218,
1221 (11th Cir. 1994).
The defendants argue that the indictment was insufficient because it failed
to specify the money or property Fulton County was deprived of. The indictment
alleged that defendants “did knowingly and willfully devise and intend to devise a
scheme and artifice to defraud Fulton County, Georgia, and its citizens of money
and property and the good, faithful and honest services of defendant Michael
deVegter.” (emphasis added). In addition, the indictment specifically referred to
4
§§ 1343 and 1346, the money and property and the honest services wire fraud
provisions, respectively. Other parts of the indictment made it evident that the
property involved was certain confidential information.
According to the indictment, deVegter “had a duty not to disclose
confidential information received in his capacity as a financial advisor without
Fulton County’s permission.” The indictment specified that while supposedly in
the service of Fulton County, deVegter faxed a copy of Fulton County’s early draft
request for proposal to Poirier, and he later faxed a copy of its nearly-final draft
request for proposal to a third party, who in turn faxed it to Poirier. In addition,
the indictment alleged that deVegter obtained a copy of the proposal submitted by
one of the Lazard firm’s competitors, which he faxed to Poirier. The point of the
allegations was that deVegter was entrusted with Fulton County documents, which
he improperly transferred to Poirier in return for money.
Although the indictment did not expressly allege that the documents
deVegter obtained and transferred were confidential, “[w]hen analyzing challenges
to the sufficiency of an indictment, courts give the indictment a common sense
construction, and its validity is to be determined ‘by practical, not technical,
considerations.’” United States v. Gold, 743 F.2d 800, 812 (11th Cir. 1984)
(quoting United States v. Morano, 697 F.2d 923, 927 (11th Cir. 1983)). Common
5
sense tells us that the documents listed in the indictment constituted confidential
information. Anyone with a modicum of understanding about bidding processes
knows that those kind of documents are confidential. Moreover, the indictment’s
charge that the conduct violated § 1343 also indicates that they were.
Of course, the government could have avoided this issue altogether by
simply saying in the indictment that the documents were confidential, but “the
appropriate test . . . is not whether the indictment might have been drafted with
more clarity, but whether it conforms to minimal constitutional standards.” United
States v. Varkonyi, 645 F.2d 453, 456 (5th Cir. Unit A May 1981)). “Minor
deficiencies that do not prejudice the defendant will not prompt this Court to
reverse a conviction.” United States v. Chilcote, 724 F.2d 1498, 1505 (11th Cir.
1984). In other words, we do not punish a party for unnecessarily making us
decide an issue by deciding that issue against the party.
Defendants also contend that even apart from the question of the adequacy
of the allegations about confidentiality, the indictment was insufficient because
the specified documents did not constitute property and therefore could not
support a § 1343 wire fraud conviction. In McNally v. United States, 483 U.S.
350, 107 S. Ct. 2875 (1987), the Supreme Court held that wire and mail fraud
statutes protect only property rights, and that the words “to defraud,” as used in the
6
statutes, “usually signify the deprivation of something of value by trick, deceit,
chicane or overreaching.” Id. at 358, 107 S. Ct. at 2881 (quoting Hammerschmidt
v. United States, 265 U.S. 182, 188, 44 S. Ct. 511, 512 (1924)) (internal quotation
marks omitted).2 With its McNally decision the Court overturned a line of cases
that permitted wire fraud convictions based on deprivation of intangible rights like
the right to honest services. Id. at 355-56, 107 S. Ct. at 2879.3
Shortly after McNally, the Supreme Court elaborated on the scope of § 1343
in Carpenter v. United States, 484 U.S. 19, 108 S. Ct. 316 (1987). In that case the
Court affirmed convictions stemming from the fraudulent misappropriation of pre-
publication Wall Street Journal articles. Id. at 28, 108 S. Ct. at 321-22. In
rejecting the contention that the defendants had not defrauded the Journal of
money or property by disclosing and using the information in the stories before
publication, the Court explained that “[t]he Journal, as [one of the defendant’s]
employer, was defrauded of much more than its contractual right to his honest and
2
The convictions in McNally were based on § 1341 mail fraud, not § 1343 wire fraud.
McNally, 483 U.S. at 352, 107 S. Ct. at 2877. The McNally decision is nonetheless instructive
because “[t]he mail and wire fraud statutes share the same language in relevant part.” Carpenter
v. United States, 484 U.S. 19, 25 n.6, 108 S. Ct. 316, 320 n.6 (1987).
3
Congress responded to McNally by amending the mail fraud statute to include § 1346,
which defines “the term ‘scheme or artifice to defraud’ [to] include[] a scheme or artifice to
deprive another of the intangible right of honest services.” 18 U.S.C. § 1346; see also Belt, 868
F.2d at 1212 n.4. Because the jury in this case was unable to reach a verdict on the § 1346
charge, this appeal involves only the § 1343 money or property fraud charge.
7
faithful service.” Id. at 25, 108 S. Ct. at 320. Indeed, “the object of the scheme
was to take the Journal’s confidential business information . . . and its intangible
nature does not make it any less ‘property’ protected by the mail and wire fraud
statutes. McNally did not limit the scope of § 1341 to tangible as distinguished
from intangible property rights.” Id., 108 S. Ct. at 320.
In this case Fulton County was involved in a competitive bidding process
involving confidential information that, like the information in Carpenter, had
commercial value. Fulton County had an interest in keeping its draft requests for
proposals confidential until they were issued, and it had an interest in keeping
submitted bids confidential until all of them had been received. Otherwise, the
bidding process could become corrupted. As the Supreme Court noted,
“[c]onfidential business information has long been recognized as property.”
Carpenter, 484 U.S. at 26, 108 S. Ct. at 320. The object of the scheme in this case,
like the one in Carpenter, was to take the victim’s confidential information by
disclosing it early to those who could profit from that disclosure. And “its
intangible nature does not make it any less ‘property.’” Id. at 25, 108 S. Ct. at
320.
The Carpenter decision alone is enough to carry our conclusion, but there is
further support for it in our case law. In Belt, we reinstated a conviction on facts
8
that are similar. The defendant in that case pleaded guilty to § 1343 wire fraud
prior to the Supreme Court’s decision in McNally. Belt, 868 F.2d at 1210. The
indictment alleged that by accepting bribes from companies bidding on
subcontracts, Belt had defrauded his employer and deprived it of his honest
services. Id. According to the indictment, Belt provided competing companies
with secret bid information and other confidential documents. Id. After McNally
was decided, the district court overturned Belt’s conviction, concluding that the
indictment was insufficient in view of McNally’s property deprivation
requirement. Id. at 1210 n.2. We reversed the district court’s decision for reasons
that are equally applicable to this case:
[T]he petitioner released confidential business information of his
employer to third parties. In exchange for bribes, Belt released
business information regarding the subcontractor bids submitted . . .
which made the bids submitted higher than they normally would have
been. We see little difference in the character of the confidential
information involved in this case and that involved in Carpenter. In
both cases, the confidentiality of the information was integral to the
proper operation of the employer’s business and to its reputation.
Thus, although the scheme did not cause [Belt’s employer] a direct
monetary loss, like the information in Carpenter, the confidential
information constituted an intangible property right protected under
§ 1343.
Id. at 1213.
9
For these reasons, the indictment in this case sufficiently alleged a
deprivation of money and property under § 1343.4
2. The Correctness of the Jury Instructions
Defendants contend that even if the indictment were sufficient, the
convictions should be overturned because the jury instructions were improper.
According to defendants, the language in the instructions allowed the jury to
return a guilty verdict upon finding nothing more than a financial gain to
defendants. We review jury instructions only for an abuse of discretion. Roberts
& Schaefer Co. v. Hardaway Co., 152 F.3d 1283, 1295 (11th Cir. 1998).
The jury instructions explained that proof the defendants acted willfully and
with the intent to defraud was essential to a guilty verdict. The instructions
defined the necessary intent as follows: “To act with intent to defraud means to
act knowingly and with the specific intent to deceive someone, ordinarily for the
purpose of causing some financial loss to another or bringing about some financial
gain to one’s self.” (emphasis added). Defendants contend that the “or” in that
definition improperly allowed the jury to convict based only on a finding of
4
As alternative theories, the government contends that the bonds themselves were
property and that the increased spread Fulton County paid on the bids was property. Because we
find that the indictment sufficiently alleged a deprivation of property in the form of confidential
information, we need not reach the government’s alternative theories.
10
financial gain to defendants. The language they focus on, though, defines intent.
Cf. United States v. De La Mata, 266 F.3d 1275, 1299 n.30 (11th Cir. 2001)
(affirming bank fraud conviction where identical words were used to define intent
to defraud). It does not define the offense itself. A complete reading of the
instructions makes clear that a finding of financial gain alone is insufficient for a
conviction. The jury instructions in this case adequately laid out the elements of
money or property wire fraud:
A defendant can be found guilty of [§ 1343 wire fraud] only if all of
the following facts are proved beyond a reasonable doubt. First, that
the defendant knowingly devised or participated in a scheme to
defraud or for obtaining money or property by means of false
pretenses, representations or promises. Second, that the defendant
did so willfully and with an intent to defraud. Third, that the fraud
related to a material matter. And, fourth, that the defendant [used
wire communications].
After receiving that charge, the jury returned its verdict by checking “Guilty”
under “Scheme to defraud Fulton County of money and property” on the special
verdict form. “On appeal, we examine whether the jury instructions and verdict
form, considered as a whole, were sufficient ‘so that the jurors understood the
issues and were not misled.’” McNely v. Ocala Star-Banner Corp., 99 F.3d 1068,
1072 (11th Cir. 1996) (quoting Wilkinson v. Carnival Cruise Lines, Inc., 920 F.2d
1560, 1569 (11th Cir. 1991)). We do not focus on any single sentence in jury
11
instructions because, “[i]f the instructions, taken together, properly express the law
applicable to the case, no reversible error has occurred, even if an isolated clause
may be inaccurate, ambiguous, incomplete, or otherwise subject to criticism.”
Busby v. City of Orlando, 931 F.2d 764, 776 (11th Cir. 1991). Having read the
instructions as a whole and in conjunction with the verdict form, we are satisfied
that the jury did not convict based solely upon a finding of financial gain for the
defendants.
3. The Sufficiency of the Evidence
Defendants contend there was insufficient evidence to sustain their
convictions for money and property wire fraud, which is an issue we decide de
novo. United States v. Suba, 132 F.3d 662, 671 (11th Cir. 1998). We review the
evidence to determine whether “a reasonable jury, viewing the evidence and all
reasonable inferences therefrom in the light most favorable to the government
could find the defendant[s] guilty as charged beyond a reasonable doubt.” United
States v. Navarro-Ordas, 770 F.2d 959, 966 (11th Cir. 1985) (internal citations
omitted).
The government presented evidence that deVegter had a duty to keep Fulton
County’s bidding documents confidential. The request for proposal to which
deVegter responded in landing his position as financial advisor unequivocally
12
stated that “[n]o reports, information, or data given to or prepared by the firm
under the contract shall be made available to any individual or organization by the
firm without the prior written approval of the County.” There was evidence
showing that deVegter accepted those terms, and therefore knew of his
confidentiality obligation. The government also presented evidence that during the
underwriter selection process, deVegter disclosed drafts of the request for
proposal relating to that process to the Lazard firm. Defendants contend that the
drafts were not confidential because they were comprised of public boilerplate
provisions. The evidence, however, permitted the jury to find to the contrary.
Fulton County’s finance director testified that the request for proposal was
“customized” for Fulton County and contained specific numerical assumptions
unique to Fulton County’s project. Besides, even if the drafts had contained only
public provisions, the County’s decision about which public provisions to include
could itself constitute confidential information.
In addition to disclosing drafts of Fulton County’s request for proposal
before its release, there was evidence that deVegter forwarded Poirier a copy of a
proposal submitted by Bear Stearns, a competitor of the Lazard firm. According
to a government witness, Fulton County treated all proposals submitted, including
the Bear Stearns proposal, as confidential until the selection was made public. The
13
reasons the County wanted them kept confidential are obvious, and deVegter even
admitted on cross examination that it would have been improper for him to
disclose the Bear Stearns proposal to another competitor. He denied doing so, but
there was plenty of evidence that he had faxed that proposal to the Lazard firm’s
office. Further, because the jury did not believe deVegter, his demeanor while
testifying may be considered substantive evidence of his guilt. See United States
v. Brown, 53 F.3d 312, 314 (11th Cir. 1995).
Poirier’s involvement in the scheme is also demonstrated by the evidence.
The government presented testimony that Poirier was concerned that his firm was
not in a good position to win the underwriting contract. His concern led him to
authorize the payment to deVegter in exchange for deVegter’s improper
assistance. There was evidence that deVegter’s improper and corrupt assistance
aided Poirier in obtaining the contract for his firm.
In sum, the government presented evidence that deVegter had access to
confidential documents, had a duty to protect them, and improperly disclosed them
to Poirier and others. The evidence also demonstrated that Poirier authorized the
14
illicit payment to deVegter in exchange for deVegter’s assistance. There was
sufficient evidence for a jury to convict deVegter and Poirier.5
B. THE SENTENCE ISSUES
DeVegter contends that even if his conviction stands, his sentence should
not because the district court erroneously applied the U.S.S.G. § 3B1.3
enhancement for abuse of a position of trust. His argument is based on the fact
that he did not have the authority to make the final decision in Fulton County’s
awarding the underwriting business to the Lazard firm. That fact is not
determinative. Fulton County hired deVegter to serve as a fair and unbiased
financial advisor and put him in a position to do that. With that position came
Fulton County’s trust, and deVegter clearly abused it. The enhancement for
abusing a position of trust was appropriate.
The government has cross-appealed contending that the district court: (1)
applied the wrong guideline, and if not, that it incorrectly determined loss under
U.S.S.G. § 2F.1.1(b)(1), and should have imposed the § 2F1.1(b)(2) more than
minimal planning enhancement; (2) should have imposed the obstruction of justice
5
Defendants contend that their conspiracy convictions are based on their wire fraud
convictions and should be reversed if those convictions are. Perhaps so, but we affirm the wire
fraud convictions.
15
enhancement under § 3C1.1; and (3) should have imposed on Poirier an
enhancement based on his leadership role under § 3B1.1.
1. The Applicable Guideline
In sentencing the defendants the district court applied as the base offense
guideline § 2F1.1, which covers offenses involving fraud or deceit. The
government contends it should have applied § 2B4.1, which covers commercial
bribery and kickbacks. We review de novo the district court’s application of the
law to the facts. United States v. Geffrard, 87 F.3d 448, 452 (11th Cir. 1996).
The offense conduct in this case is § 1343 wire fraud.6 The Statutory Index
lists two possible guidelines for that offense, §§ 2C1.7 & 2F1.1. U.S.S.G.
appendix A. We agree with the parties that § 2C1.7 is inapplicable, which leaves
§ 2F1.1. The application of § 2F1.1 leads us to yet another guideline, because
Application Note 14 to § 2F1.1 specifically allows for use of other guidelines in
some circumstances. It says: “[i]n certain . . . cases, the mail or wire fraud
statutes, or other relatively broad statutes, are used primarily as jurisdictional
6
The defendants were also convicted of conspiracy to commit wire fraud. Under the
sentencing guidelines, the two counts of conviction are grouped, and the more serious one is used
for determining the offense conduct. See U.S.S.G. §§ 3D1.2(b) & n.4, 3(a). Here, that is the
wire fraud count.
16
bases for the prosecution of other offenses.” U.S.S.G. § 2F1.1 n.14.7 In those
cases, a court should use another guideline if “the indictment or information
setting forth the count of conviction . . . establishes an offense more aptly covered
by another guideline.” Id.; see also United States v. Kurtz, 237 F.3d 154, 156 (2d
Cir. 2001) (“[W]hen sentencing a defendant . . . under the 2000 version of the
Guidelines, the district court is to look to § 2F1.1; and that section, as explicated
in Application Note 14, gives the court express authority to apply a different
guideline that is ‘more apt[].’”).8 Thus, the question is whether defendants’
7
We follow the Application Note because commentary to the guideline is authoritative
and binding unless it is inconsistent with the Constitution, a federal statute, or the guidelines
themselves. Stinson v. United States, 508 U.S. 36, 37, 113 S. Ct. 1913, 1915 (1993).
8
Until November 2000, the Statutory Index included the following language: “If, in an
atypical case, the guideline section indicated for the statute of conviction is inappropriate because
of the particular conduct involved, use the guideline section most applicable to the nature of the
offense conduct charged in the count of which the defendant was convicted.” U.S.S.G. Appendix
A (1999). Dropping that language was part of an effort “intended to emphasize that the
sentencing court must apply the offense guideline referenced in the Statutory Index for the statute
of conviction unless the case falls within the limited ‘stipulation’ exception set forth in
§ 1B1.2(a).” U.S.S.G. Amendment 591 (explanation). The amendment left in place Application
Note 14 to § 2F1.1 allowing courts to apply a different guideline if the indictment or information
setting forth the count of conviction established an offense “more aptly covered by another
guideline.” U.S.S.G. § 2F1.1 n.14.
The current guidelines merge § 2F1.1 with § 2B1.1 and abandon Application Note 14, but
new § 2B1.1(c)(3) stands in its place and specifies that: “If [certain conditions are not applicable
and] the conduct set forth in the count of conviction establishes an offense specifically covered
by another guideline in Chapter Two (offense Conduct), [courts should] apply that other
guideline.” U.S.S.G. § 2B1.1(c)(3) (2002). The amendment to include § 2B1.1(c)(3):
is more generally applicable and intended to apply whenever a broadly applicable
fraud statute is used to reach conduct that is addressed more specifically in
17
conduct is “more aptly” covered by a guideline other than § 2F1.1, the one for
fraud or deceit.
As we have already explained, Fulton County hired deVegter to provide fair
and disinterested assistance in selecting an underwriter, and deVegter betrayed
Fulton County. In exchange for payment through an intermediary, he gave
confidential documents to Poirier which improperly assisted Poirier’s firm in the
proposal process. We conclude that the defendants’ “conduct more closely
resembled a fraud achieved through bribery than a straight fraud,” United States v.
Montani, 204 F.3d 761, 769 (7th Cir. 2000), and for that reason the § 2B4.1
guideline applies. Our conclusion is supported by other decisions in which courts
have applied the commercial bribery guideline to fraud convictions. See, e.g., id.
(§§ 1341 and 1346 mail fraud convictions sentenced under § 2B4.1); United States
v. Cohen, 171 F.3d 796 (3d Cir. 1999) (§ 1341 mail fraud conviction sentenced
under § 2B4.1); United States v. Josleyn, 99 F.3d 1182 (1st Cir. 1996) (conspiracy
and § 1341 convictions sentenced under § 2B4.1).
another Chapter Two guideline. Prior to this amendment, the fraud guideline
contained an application note [14] that instructed the user to move to another,
more appropriate Chapter Two guideline, under specified circumstances.
U.S.S.G. Amendment 617. For purposes of this appeal, we will apply the 2000 version of the
guidelines because it was in effect at the time of sentencing and the version in effect at the time
of the offense conduct is not more favorable to the defendants. U.S.S.G. § 1B1.11.
18
The defendants attempt to distinguish Montani on the basis that they, unlike
the defendant in that case, were not convicted of § 1346 honest services fraud.
According to deVegter, “the hallmark of commercial bribery is the deprivation of
honest services.” It is certainly true that accepting or providing bribes is
inconsistent with the delivery of honest services, but that is not to say that the
commercial bribery guideline cannot also be applied to a § 1343 money and
property wire fraud case. The defendants’ conduct in giving and receiving money
in exchange for the misappropriation of documents is “more aptly” covered by the
commercial bribery guideline than by the fraud guideline.
Our decision in United States v. Saavedra, 148 F.3d 1311 (11th Cir. 1998),
is not to the contrary. In that case the Statutory Index to the sentencing guidelines
listed only one guideline for the offense conduct. Id. at 1315. That guideline
contained no applicable cross-references to other guidelines, but the sentencing
court nevertheless applied a different guideline. Id. at 1313. We vacated the
sentence because “[t]here is no provision in the guidelines for borrowing base
offense levels from other offense guidelines.” Saavedra, 148 F.3d at 1316.
In contrast to Saavedra, applying § 2B4.1 in this case does not constitute
unauthorized “borrowing . . . from other offense guidelines,” because “[o]nce the
proper guideline section has been selected, relevant conduct is considered in
19
determining various sentencing considerations within that guideline, including the
base offense level, specific offense characteristics, and any cross-references.” Id.
at 1317 (citing U.S.S.G. § 1B1.3(a)) (emphasis added). We get to § 2B4.1 by
applying § 2F1.1, which is the guideline specifically associated with the offense
conduct. Application Note 14 of § 2F1.1 is essentially a cross reference that sends
us to § 2B4.1. We are not improperly “borrowing . . . from other offense
guidelines,” but instead are applying the offense guideline and its Application
Note.
For these reasons, the sentencing court should have reached and applied
§ 2B4.1 to determine the defendants’ base offense level. We will remand for
correction of that error.
Because we conclude that § 2F1.1 was not the correct guideline, we need
not consider the government’s contentions that the sentencing court incorrectly
determined loss under § 2F1.1, and that it should have imposed that guideline’s
more than minimal planning enhancement.
2. The Obstruction of Justice Enhancement
The sentencing guidelines provide for an increased sentence if a defendant
“willfully obstructed or impeded . . . the administration of justice during the course
of the investigation, prosecution, or sentencing.” U.S.S.G. § 3C1.1. The
20
government contends that the district court erred in not enhancing defendants’
sentences under this provision.
We review a district court’s determination about whether a defendant
obstructed justice only for clear error, United States v. Cain, 881 F.2d 980, 982
(11th Cir. 1989), and “[w]e will not find clear error unless our review of the record
leaves us ‘with the definite and firm conviction that a mistake has been
committed,’” Coggin v. Commissioner, 71 F.3d 855, 860 (11th Cir. 1996) (quoting
United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S. Ct. 525, 542
(1948)). That high standard is met in this case.
The record clearly establishes that both defendants obstructed justice. They
each provided false testimony to the Securities and Exchange Commission in an
effort to conceal their conduct. In addition, each of them encouraged another
person to provide false testimony. DeVegter tried to convince Nat Cole, a
middleman in the scheme, to sign a false affidavit, and Poirier persuaded a
colleague of his at the Lazard firm, Jim Eaton, to lie to the SEC. Finally, deVegter
provided false testimony at trial and stubbornly maintained his incredible
testimony that the money he received was for legitimate, unrelated consulting
engagements. In the face of all this evidence of obstruction, the sentencing court,
without further explanation, simply said: “I find there is no willful attempt by
21
either defendant to obstruct the investigation, nothing in the defendants’ conduct
that would warrant an obstruction adjustment, so there will be no enhancement.”
We are left with the definite and firm conviction that the sentencing court should
have applied the enhancement for obstruction of justice to both defendants. Its
inexplicable finding that the defendants did not obstruct justice is clearly
erroneous, and must be corrected on remand.
3. The Aggravating Role Enhancement for Poirier
The guidelines provide for an enhancement where a defendant was an
organizer, leader, manager, or supervisor in the criminal activity. U.S.S.G.
§ 3B1.1. A two-level increase in the offense level is required “[i]f the defendant
was an organizer, leader, manager, or supervisor in any criminal activity” and the
offense did not “involve[] five or more participants or was otherwise extensive”
(in which case a three- or four-level increase would be required). U.S.S.G.
§ 3B1.1(c), (b). In this case the sentencing court declined to enhance either
defendant’s sentence for an aggravating role. The government accepts that
decision as it involves deVegter, but contends that the enhancement should have
been applied in Poirier’s case.
We review only for clear error a sentencing court’s decision about whether
to impose an aggravating role enhancement. United States v. Phillips, 287 F.3d
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1053, 1055 (11th Cir. 2002). The evidence at trial established that Poirier
supervised Jim Eaton at the Lazard firm, and that he authorized the corrupt payoff
to a person who passed half the money on to deVegeter. To qualify for an increase
under § 3B1.1, “the defendant must have been the organizer, leader, manager, or
supervisor of one or more other participants.” U.S.S.G. § 3B1.1 n.2. The
evidence at trial read in light of the guilty verdict establishes that Eaton was a
participant in the criminal activity as defined by the guidelines, id. n.1, and Poirier
was his superior, his supervisor, and his manager. The district court did not find
to the contrary, but instead simply and inexplicably failed to apply the
enhancement. That was clear error. On remand the § 3B1.1(c) enhancement must
be applied to Poirier.
III. CONCLUSION
The convictions of deVegter and Poirier are AFFIRMED. The sentencing
decisions of the district court are AFFIRMED IN PART and REVERSED IN
PART, and the case is REMANDED to the district court for resentencing. At
resentencing, the court must apply in both cases the § 2B4.1 offense guideline and
the obstruction of justice enhancement, and in Poirier’s case it must apply the
§ 3B1.1(c) aggravating role enhancement.
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