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United States v. McCants

February 10, 2009

UNITED STATES OF AMERICA, APPELLEE
v.
CALVIN MCCANTS, APPELLANT



Appeal from the United States District Court for the District of Columbia, (No. 02cr00130-01).

The opinion of the court was delivered by: Griffith, Circuit Judge

Argued October 21, 2008

Before: GRIFFITH, Circuit Judge, and EDWARDS and WILLIAMS, Senior Circuit Judges.

Calvin McCants produced false identifications and counterfeit documents that were used by others to bilk several banks out of more than $110,000. McCants pleaded guilty to possession of false document-making implements in violation of 18 U.S.C. § 1028(a)(5) (2000). On appeal, he challenges his sentence on the ground that the district court improperly calculated his sentencing range under the Federal Sentencing Guidelines. McCants argues that the court erred by applying a two-level enhancement for the use of "sophisticated means," and that the court's calculation of the loss caused by his "relevant conduct," which affects his total offense level, was incorrect. Because the record supports the district court's conclusion that McCants used sophisticated means to conceal his offense, we find no error in that enhancement. We vacate and remand for resentencing, however, because the district court erred by including within McCants's relevant conduct a bank fraud the government failed to show had the requisite connection to McCants's offense.

I.

On March 15, 2002, the government filed a 15-count indictment against McCants, charging him with, inter alia, aiding and abetting a scheme to defraud several banks in violation of 18 U.S.C. § 1344, possession of false identification documents in violation of 18 U.S.C. § 1028(a)(7), and possession of false document-making implements in violation of 18 U.S.C. § 1028(a)(5). The alleged scheme involved the creation and use of false identification documents to obtain fraudulent loans from various banks. Appellant's App. at 24 (Indictment). McCants's role in the scheme was to acquire credit histories and other personal information for the innocent people under whose names the loans would appear. Id. at 25. McCants used this information to produce false identification documents bearing the names of his creditworthy victims with the pictures of individuals his coconspirators recruited to seek fraudulent loans from the banks. Id.

On August 19, 2003, McCants pleaded guilty to knowing possession of false document-making implements.*fn1 The plea agreement stipulates that section 2B1.1 of the Sentencing Guidelines applies to McCants's offense, see U.S. SENTENCING GUIDELINES MANUAL § 2B1.1 (2003) [hereinafter U.S.S.G.], and that his base offense level is 6. Appellant's App. at 38 (Plea Agreement). McCants also agreed to a two-level increase to his sentence because his offense involved more than ten but fewer than fifty victims, and another two-level increase because the offense involved the possession of device-making equipment. Id. For its part, the government agreed to dismiss the remaining counts of the indictment and to decrease McCants's sentence by two levels because he accepted responsibility for his crime. Id. at 39. For those keeping score, which we recommend when trying to follow the reasoning of courts making their way through the numbers-driven world of the Sentencing Guidelines, McCants's offense level at this point is 8.

Disputes nonetheless remained over McCants's final offense level. Section 2B1.1 pegs an offense level to the amount of loss for which the defendant is responsible. This loss calculation depends on the scope of the defendant's "relevant conduct," see U.S.S.G. § 1B1.3(a), and the government and McCants disagreed on whether the bank fraud fell within his "relevant conduct," as that phrase is defined in the Sentencing Guidelines. If the bank fraud is conduct relevant for McCants's offense, the loss he caused would rise to between $200,000 and $400,000, and his offense level would increase by twelve levels. The government and McCants also disagreed on whether his offense involved "sophisticated means," which would support an added two-level enhancement. See id. § 2B1.1(b)(8)(C).

In a statement attached to his plea agreement, McCants admitted possessing an inventory of false document-making implements on three dates: December 12, 2000, December 21, 2000, and March 25, 2002. Appellee's R. Material at 1--5 (Factual Statement). The statement referred only to those discrete dates and said nothing about McCants possessing the inventory at any other time. It was on these dates that the government executed search warrants at McCants's home, the Washington, D.C., and Baltimore, Maryland, offices of his company, Custom Computers, and several storage units that had been rented under one of his aliases. Id. Among the equipment found and confiscated on these dates were electronic templates for driver's licenses, passports, and birth certificates; unfinished Social Security cards; a pamphlet titled "How to make driver's licenses and other ID's on your home computer"; and a paper file titled "Bank Fraud Issues." Id.

After McCants entered his plea, the United States Probation Office prepared and issued its final Presentencing Investigation Report (PSR), which concluded that an enhancement for the use of sophisticated means was not appropriate. The Probation Office found, however, that McCants's offense resulted in more than $200,000 but less than $400,000 in loss from conduct relevant to his crime. The Probation Office's loss calculation was comprised of $145,500 in loss unrelated to the bank fraud, $110,252 in loss associated with the bank fraud, and $32,949 in loss stemming from two defaulted loans held under the name "Celvin McCants." PSR ¶¶ 32--33. Beginning at the agreed-upon offense level of 8, the Probation Office applied the twelve-level increase from the loss calculation and settled upon a recommended total offense level of 20. Id. ¶¶ 41--50. Combined with McCants's criminal history category of III, the Probation Office's determinations yielded a sentencing range of 41 to 51 months. Id. ¶¶ 54, 83.

The district court held a sentencing hearing to resolve McCants's objection to the Probation Office's conclusion regarding his relevant conduct. The government presented testimony by Rickey Buchanan, the confessed ringleader of the bank fraud who was now cooperating with the prosecution. Buchanan testified that McCants gave him the false driver's licenses and military identifications, credit reports, and other financial information needed to commit the bank fraud. Sentencing Hr'g Tr. 76--79 (Mar. 3, 2004). He also testified that McCants did much more. According to Buchanan, McCants not only knew of the bank fraud but advised him how to pull it off. For example, McCants told Buchanan the documents needed to obtain bank loans, how many times to use a particular identification, and how many loans he could obtain at a single bank without creating suspicion. Id. at 82--83. McCants also told Buchanan that his coconspirators should "dress the part" when impersonating loan-seekers. See id. at 83. The government introduced physical evidence to corroborate Buchanan's testimony, including false identifications and documents used in the bank fraud that were obtained from McCants.

The district court announced McCants's sentence on May 11, 2004. Although it used the recommended PSR offense level of 20 as its "basic figure," Sentencing Hr'g Tr. 7 (May 11, 2004), the court departed from the PSR in two respects. It concluded that McCants employed sophisticated means worthy of an added two-level enhancement. Id. at 8--9. The court also imposed an additional two-level enhancement not applied in the PSR to account for McCants's falsification of Social Security numbers and military identifications. Id. at 9-- 10. These enhancements led to an offense level of 24 and a sentencing range of 63 to 78 months in prison. The district court sentenced McCants to 78 months and ordered him to pay restitution to the defrauded banks in the amount of $77,852.15. Id. at 36. The court did not issue a sentencing opinion.

On his first appeal, McCants argued that the district court failed to make findings on disputed material sentencing issues as required by Federal Rule of Criminal Procedure 32(i)(3)(B). See United States v. McCants, 434 F.3d 557, 561 (D.C. Cir. 2006). We agreed and remanded for resentencing, finding "[c]hief among the controversies left unaddressed by the District Court was the scope of McCants' 'relevant conduct,'" id. at 562, and the facts that triggered the sophisticated means enhancement, id. at 564--65.

On remand, the district court imposed an identical sentence. United States v. McCants, No. 02-0130, slip op. at 1 (D.D.C. Oct. 27, 2006). The court found that the bank fraud, which resulted in a loss of $110,252, was part of the relevant conduct for which McCants was responsible. Together with the $32,949 loss associated with the Celvin McCants loans and $133,500 in loss associated with his possession and sale of counterfeit credit cards and other similar devices, the court concluded that McCants was responsible for more than $200,000 but less than $400,000 in loss. As a result, it increased his sentence by twelve levels. Id. at 22. Turning to the sophisticated means enhancement, the court "wholeheartedly" agreed that McCants used sophistication in the execution and concealment of his offense and applied a two-level enhancement. Id. at 23--25. The court also imposed another two-level enhancement because the sentence provided for by the Sentencing Guidelines failed to "reflect the seriousness of the offense." Id. at 25--29. The next step for the district court was totaling McCants's offense level based on the sum of the various calculations called for by the Sentencing Guidelines. McCants's base offense level for unlawful possession of the false document-making tools was 6. This level rose to 26 after upward adjustments of four levels as stipulated in the plea agreement, twelve levels for the amount of loss caused, two levels for the use of sophisticated means, ...


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