United States v. Buchan

NOT FOR PUBLICATION

Argued and Submitted August 31, 2021 Pasadena, California

Appeal from the United States District Court for the Central District of California D.C. No. 2:13-cr-00469-CJC-2 Cormac J. Carney, District Judge, Presiding

Before: IKUTA, BENNETT, and R. NELSON, Circuit Judges.

MEMORANDUM ^[*]

Kelen Magael Buchan appeals his conviction and sentence following a guilty plea to one count of wire fraud in violation of 18 U.S.C. § 1343. We have jurisdiction under 18 U.S.C. § 3742(a) and 28 U.S.C. § 1291, and affirm.

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Even if the district court erred when it applied the preponderance standard instead of the clear and convincing standard at sentencing to the two disputed enhancements, see United States v. Jordan, 256 F.3d 922, 928-29 (9th Cir. 2001), any error was harmless because the district court held that it would have reached the same conclusion had it applied the clear and convincing standard, and this conclusion is not clearly erroneous. Cf. United States v. Hymas, 780 F.3d 1285, 1292 (9th Cir. 2015). Given the evidence in the record that scheme-related materials were located in Buchan's bedroom dating back to the beginning of the scheme in December 2011, including a managerial cell phone that contained outgoing messages with the same pattern of speech as Buchan's prison communications, the district court did not clearly err in concluding that the loss from the entire scheme was attributable to Buchan as "(i) within the scope of the jointly undertaken criminal activity, (ii) in furtherance of that criminal activity, and (iii) reasonably foreseeable in connection with that criminal activity." U.S.S.G. § 1B1.3(a)(1)(B); see also United States v. Blitz, 151 F.3d 1002, 1012 (9th Cir. 1998). Therefore, the district court did not err in applying a 12-level upward adjustment for the loss. U.S.S.G. § 2B1.1(b)(1)(G).

Likewise, given evidence in the record that Buchan had control over at least one person in the scheme through Buchan's use of the managerial cell phone, the

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district court did not clearly err in finding that a 3-level adjustment under U.S.S.G. § 3B1.1(b) applied. See United States v. Camper, 66 F.3d 229, 231 (9th Cir. 1995); United States v. Gadson, 763 F.3d 1189, 1222 (9th Cir. 2014).

The district court did not abuse its discretion in imposing Buchan's below-Guidelines sentence of 51 months, and such a sentence was not substantively unreasonable, because the district court adequately weighed the 18 U.S.C. § 3553(a) factors, took into account the "unique evils" of the scam to which Buchan pleaded guilty, and took into account Buchan's mitigating factors. See United States v. Scrivener, 189 F.3d 944, 951-52 (9th Cir. 1999). Buchan's codefendants who received lighter sentences were not similarly situated as managers.

Buchan waived his objection regarding the restitution order because he failed to raise that objection to the district court. See United States v. Van Alstyne, 584 F.3d 803, 819 (9th Cir. 2009). The district court did not plainly err in finding that Buchan was involved in the scheme from December 2011 to February 2012, and therefore ordering $519, 400 in restitution and imposing joint and several liability.

AFFIRMED.

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R. NELSON, Circuit Judge, with whom IKUTA, Circuit Judge, joins as to Part IV, concurring:

I join in full the court's memorandum disposition affirming the district court. I write separately because I would also hold that (1) the district court properly applied a preponderance standard to factual questions decided at sentencing; (2) our clear and convincing evidence rule (for factual findings that have an extreme impact on the sentence) is clearly irreconcilable with Beckles v. United States, 137 S.Ct. 886 (2017); and (3) regardless, the clear and convincing evidence rule should be reversed en banc because it is incorrect, unmoored from its original basis in the mandatory nature of the Guidelines, and contrary to the law of every other circuit.

I

Kelen Magael Buchan and his co-schemers participated in a scheme to scam money from victims. Buchan was charged with twenty-five counts of wire fraud and attempted wire fraud. He pleaded guilty to a single count of wire fraud.

At sentencing, the district court described the scheme as "over a half million dollars" of "money taken from senior citizens and their life savings and their retirement," as "about as aggravating as a fraud scheme as I've seen," and as so

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"horrible" that "gang-on-gang violence to me is more understandable than something like this."

Buchan's indictment charged him with participation in a scheme that lasted for at least several months. But in his plea and at sentencing, he admitted only that he participated in the scheme for at least a few days.

"As a general rule, a preponderance of the evidence standard applies" to factual findings at sentencing. United States v. Valle, 940 F.3d 473, 479 (9th Cir. 2019). But when the Sentencing Guidelines were mandatory, this court, along with several others, adopted a due process rule requiring that factual findings with "an extremely disproportionate effect on the sentence relative to the offense of conviction" be proven by clear and convincing evidence. United States v. Valensia, 222 F.3d 1173, 1178-79 (9th Cir. 2000) (citing United States v. Restrepo, 946 F.2d 654 (9th Cir. 1991) (en banc) (Restrepo II), judgment vacated by Valensia v. United States, 532 U.S. 901 (2001). The district court applied a preponderance standard because it reasoned that its factual findings about the extent of the fraudulent scheme arose from the offense of conviction and therefore could not have "an extremely disproportionate effect on the sentence relative to the offense of conviction." Valensia, 222 F.3d at 1178-79.

Buchan argues that the district court should have applied the clear and convincing evidence standard.

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II

A

"[W]here the sentencing enhancements are based on . . . the offense of conviction, the preponderance of the evidence standard is sufficient." United States v. Hymas, 780 F.3d 1285, 1289-90 (9th Cir. 2015) (alteration in original) (internal quotation marks omitted) (citing United States v. Harrison-Philpot, 978 F.2d 1520, 1524 (9th Cir. 1992)). We impose a higher burden of proof only "when the challenged sentencing factor had an extremely disproportionate effect on the defendant's sentence relative to the offense of conviction." United States v. Parlor, 2 F.4th 807, 816-17 (9th Cir. 2021) (cleaned up) (emphasis added) (citing United States v. Jordan, 256 F.3d 922, 927, 929 (9th Cir. 2001)). Only when the enhancement is not based on the offense of conviction may a higher burden of proof be imposed, see, e.g., Hymas, 780 F.3d at 1291.

The question, then, is whether factual findings about the scope of wire fraud are findings that go to the offense of conviction. Circuit precedent in the context of conspiracy suggests that they do. Clear and convincing evidence is never required to prove the scope of a conspiracy because the scope of the conspiracy goes to "the nature and extent of the offense to which [the defendant] pled guilty." United States v. Riley, 335 F.3d 919, 926 (9th Cir. 2003).

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Conspiracy requires proof of an overt act taken in furtherance of the conspiracy. United States v. Gonzalez, 786 F.3d 714, 718 (9th Cir. 2015). But the scope of a conspiracy is not confined to the facts admitted in a defendant's plea. Instead, once the underlying offense of a conspiracy has been proven, everything relating to "the extent of the conspiracy" is based on the offense of conviction and thus can be proven by a preponderance of the evidence at sentencing. Riley, 335 F.3d at 926.

The "offense of conviction" rule is not limited to the extent of a conspiracy: it applies to all crimes, including wire fraud. In Valle, 940 F.3d at 480 n.8, we noted that the rule applies "where a defendant has been convicted . . . as a participant in a fraudulent scheme and the extent of the . . . fraudulent scheme is the basis of the enhanced sentence." See also United States v. Garro, 517 F.3d 1163, 1168-69.

Like the conspiracy statute, the wire fraud statute does not criminalize each specific instance of wrongful conduct. The conspiracy statute criminalizes an agreement to pursue unlawful ends and an overt act in furtherance of the agreement. 18 U.S.C. § 371. Once these elements are proven, then other acts relating to the extent of the conspiracy are based on the offense of conviction. Riley, 335 F.3d at 926-27. In the same way, the wire fraud statute criminalizes knowing participation in a scheme or plan to defraud and use of the wires in

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furtherance of that scheme or plan. 18 U.S.C. § 1343; Ninth Circuit Model Jury Instructions 8.124; United States v. Jinian, 725 F.3d 954, 960 (9th Cir. 2013). Once these elements are proven, then other acts relating to the extent of the fraudulent scheme are based on the offense of conviction, too.

Hymas says nothing to the contrary. What Hymas says is that if a defendant pleads guilty and admits only one fraudulent transaction, then the court will not consider other transactions. 780 F.3d at 1291-92. Hymas says nothing about defendants who admit schemes involving multiple transactions.

B

Buchan pleaded guilty to and admitted participating in an international scheme involving multiple transactions and multiple victims. To be sure, in his plea agreement, he only admitted to participating in that scheme for "at least" four days. But that makes no difference: the actual degree of his participation goes to the extent of the scheme, not to the fact of his participation itself. Whether Buchan admitted participating in the scheme for four days, or four months, or four...