United States v. White

883 F.3d 983

UNITED STATES of America, Plaintiff-Appellee,

v.Vance WHITE, Defendant-Appellant.

No. 17-1131

United States Court of Appeals, Seventh Circuit.

Argued January 5, 2018

Decided March 2, 2018

Debra Riggs Bonamici, Attorney, Office of the United States Attorney, Chicago, IL, for Plaintiff–Appellee.

Peter W. Henderson, Attorney, Office of the Federal Public Defender, Urbana, IL, Thomas W. Patton, Attorney, Office of the Federal Public Defender, Peoria, IL, for Defendant–Appellant.

Before Kanne, Rovner, and Hamilton, Circuit Judges.

Hamilton, Circuit Judge.

Vance White participated in a wire fraud scheme and pleaded guilty to one count of wire fraud, 18 U.S.C. § 1343, and one count of aggravated identity theft, 18 U.S.C. § 1028A(a)(1). The district court calculated White’s Sentencing Guidelines range based on the amount of loss caused by the entire scheme over four years. During most of that time, though, White was in prison. We conclude that White’s guilty plea did not admit his involvement from the outset of the scheme. No other evidence in the record provides sufficient support to hold White responsible for the entire duration. We therefore vacate his sentence and remand for resentencing.

I. Factual and Procedural Background

White and his co-schemers bought merchandise in retail stores with fake checks and then returned the merchandise for cash. Over about four years, the group targeted 32 stores and inflicted actual losses of approximately $627,000. Posing as representatives of a third-party check-processing company, the schemers contacted retail stores and obtained customers' bank account information from the most recent personal checks used at the stores. The schemers used the account information to make counterfeit checks. They then used the checks to buy merchandise that they would later return for cash.

In his plea agreement, White admitted to a key paragraph of the government’s factual basis for the plea:

Beginning no later than in or around the fall of 2009 and continuing until at least in or around the summer of 2013 , in the Northern District of Illinois, Eastern Division, and elsewhere, ... VANCE WHITE ..., together with other individuals known and unknown to the Grand Jury (the "co-schemers"), knowingly devised, intended to devise, and participated in a scheme to defraud and to obtain money by means of materially false and fraudulent pretenses, representations, and promises.

The problem is that White was in prison for most of that time. He entered state custody on September 18, 2009 and was not released until nearly two years later, on August 19, 2011. He went back into custody on August 20, 2012, leaving him at liberty to pursue the fraud for only one year during the four-year scheme.¹

In calculating a guideline sentencing range, the district court found that White’s offense level was 22. White’s criminal history category was VI, already the highest level at age 30, based on numerous fraud, theft, and forgery convictions. The guideline range was 84 to 105 months in prison. The court imposed a total sentence of 59 months, giving White credit for 24 months served on a related Illinois forgery conviction. See U.S.S.G. §§ 5G1.3(b), 5K2.23. The court structured the sentence in two parts: 35 months for the wire fraud count, plus a mandatory, consecutive 24 months for the identity theft count. The court also ordered that the 59-month sentence run concurrently with sentences from two different Illinois cases. White is due to be released in August 2018.

II. Analysis

A. Loss Amount

White’s principal argument is that the district court used the wrong guideline offense level, holding him responsible for losses imposed by co-schemers while he was in prison before he joined the scheme. The guideline issue is governed by U.S.S.G. § 1B1.3(a)(1), which offers guidance for when a particular defendant should be held responsible for actions of co-schemers. According to White, the district court used an offense level that was two levels too high. We review de novo legal interpretations and applications of the Guidelines, United States v. Sykes , 774 F.3d 1145, 1149 (7th Cir. 2014), citing United States v. Wright , 651 F.3d 764, 774 (7th Cir. 2011), and we review findings of loss amounts for clear error. United States v. Orillo , 733 F.3d 241, 244 (7th Cir. 2013), citing United States v. Littrice , 666 F.3d 1053, 1060 (7th Cir. 2012).

1. Harmless Error?

Since the Sentencing Guidelines are advisory rather than binding, Beckles v. United States , 580 U.S. ––––, ––––, 137 S.Ct. 886, 894, 197 L.Ed.2d 145 (2017) ; United States v. Booker , 543 U.S. 220, 245, 125 S.Ct. 738, 160 L.Ed.2d 621 (2005), and since the district court imposed a sentence that was in fact below the calculated guideline range, we have looked first for signs as to whether the disputed loss amount actually made a difference in the defendant’s final sentence.

In federal sentencing, the advisory Guidelines are the "starting point and ... initial benchmark," and serve to "anchor ... the district court’s discretion." Molina-Martinez v. United States , 578 U.S. ––––, ––––, 136 S.Ct. 1338, 1345, 194 L.Ed.2d 444 (2016), quoting Gall v. United States , 552 U.S. 38, 49, 128 S.Ct. 586, 169 L.Ed.2d 445 (2007) (omission in original), and Peugh v. United States , 569 U.S. 530, 549, 133 S.Ct. 2072, 186 L.Ed.2d 84 (2013) (omission in original). After calculating an advisory guideline range, the district court must consider the final sentence under 18 U.S.C. § 3553(a), and it must do so without presuming that a guideline sentence will be reasonable. Rita v. United States , 551 U.S. 338, 351, 127 S.Ct. 2456, 168 L.Ed.2d 203 (2007). Still, a judge imposing sentence must calculate the applicable Sentencing Guidelines range correctly; an error is "a procedural error that we presume influenced the judge’s choice of sentence, unless the judge said otherwise." United States v. Marks , 864 F.3d 575, 582 (7th Cir. 2017) ; see generally Molina-Martinez , 578 U.S. at ––––, 136 S. Ct. at 1347–48. At the same time, we have often encouraged district judges facing a tricky guideline issue to ask themselves whether the answer actually makes a difference to them. Marks , 864 F.3d at 576 ("when an arcane and arbitrary issue arises under the Sentencing Guidelines, the sentencing judge should ask, ‘Why should I care?’ "). When a judge explains that a disputed guideline issue ultimately did not matter for the exercise of sentencing discretion under § 3553(a), we will treat an arguable error in the guideline calculation as harmless. United States v. Snyder , 865 F.3d 490, 500 (7th Cir. 2017).

In this case, we have no signals that might support a finding that any error was harmless. The district court explained, quite properly, that White’s sentence was below the calculated guideline range to give him credit for a state sentence that he had already served, as provided in U.S.S.G. §§ 5G1.3(b) and 5K2.23, and to account for § 3553(a) factors, like his "tough life" and the non-violent nature of his crimes. The judge did not otherwise signal that the guideline loss calculation did not affect the final sentence, so we must address the issue on the merits.

2. Loss Amount Merits

We begin with a roadmap of the applicable guideline provisions to determine the correct offense level. For fraud crimes, the most important offense characteristic is often the amount of the actual or intended loss resulting from the scheme. See U.S.S.G. § 2B1.1(b)(1) and cmt. n.3. Specific offense characteristics depend on both the offense of conviction and "relevant conduct," which is a critical concept in the entire Sentencing Guidelines structure and which can cover conduct much broader than the offense of conviction. See U.S.S.G. § 1B1.3. The loss amount calculation includes losses based not only on the defendant’s own actions but also the actions of co-schemers, if those actions were "within the scope of," "in furtherance of," and "reasonably foreseeable in connection with" the jointly undertaken criminal activity, § 1B1.3(a)(1)(B), and "occurred during the commission of the offense of conviction, in preparation for that offense, or in the course of attempting to avoid detection or responsibility for that offense," § 1B1.3(a)(1) ; see also Sykes , 774 F.3d at 1150. The notes to § 1B1.3 explain that in joint criminal activity, the scope of different defendants' relevant conduct may be different. Relevant conduct "does not include the conduct of members of a conspiracy prior to the defendant joining the conspiracy, even if the defendant knows of that conduct." § 1B1.3 cmt. n.3(B).

When the issue of individual responsibility for conduct of others is contested, a district court should make a finding on each element of the relevant conduct test. See, e.g., Sykes , 774 F.3d at 1150 (requiring "two-step analysis" under previous version of § 1B1.3(a)(1)(B) );² United States v. Salem , 597 F.3d 877, 886 (7th Cir. 2010) (requiring findings on scope, in-furtherance, and foreseeability). The problem here is that the indictment alleged that White participated in a scheme to defraud beginning in the fall of 2009 and continuing at least until the summer of 2013, yet White was in prison for most of that time, having been out of prison during that range only from August 19, 2011 until August 20, 2012. It is surely rare for a defendant’s criminal history to work this way as a potential mitigating factor, but that is the possible effect here, at least as to loss amount and offense level.

As a general rule, the government must show an aggravating offense characteristic under the Guidelines by a preponderance of the evidence, and this rule applies to the loss amount in a fraud offense. Orillo , 733 F.3d at 244, citing Littrice , 666 F.3d at 1060. In this case, both the evidence and the district court’s findings are insufficient to support the full loss amount used in White’s sentencing. To meet its burden on the loss amount, the government relied...