James Friday v. Attorney General United States

• Court: Court of Appeals for the Third Circuit
• Decided: September 28, 2018
• Docket: 17-3790
• Status: Unpublished

Opinion

NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT _____________

No. 17-3790 _____________

JAMES OGUNYEMI FRIDAY, AKA Friday James, Petitioner

v.

ATTORNEY GENERAL UNITED STATES OF AMERICA, Respondent ____________

On Petition for Review of an Order of the Board of Immigration Appeals (A078-510-752)

Submitted Pursuant to Third Circuit L.A.R. 34.1(a) September 25, 2018

Before: AMBRO, CHAGARES, and GREENAWAY, JR., Circuit Judges.

(Filed: September 28, 2018)

____________

OPINION ∗ ____________

∗ This disposition is not an opinion of the full Court and, pursuant to I.O.P. 5.7, does not constitute binding precedent. CHAGARES, Circuit Judge.

Petitioner James Ogunyemi Friday challenges the decision of the Board of

Immigration Appeals (“BIA”) concluding that, as a result of his tax fraud conviction, he

is removable as an aggravated felon. As explained below, we conclude that Friday’s

stipulation at sentencing that a restitution order of $145,156 would be appropriate was a

concession that the actual loss tied to his counts of conviction was in excess of $10,000,

qualifying his 26 U.S.C. § 7206(2) conviction as an aggravated felony and rendering him

removable under 8 U.S.C. § 1227(a)(2)(A)(iii). Because the BIA did not err in

determining that Friday had committed an aggravated felony, we have no jurisdiction to

review the BIA’s final order of removal, so we will deny Friday’s petition for review.

I.

We write for the parties and so recount only the facts necessary to our decision.

Friday is a citizen of Liberia who has been a lawful permanent resident of the United

States since 2009. In 2013, he was convicted of 26 counts of aiding and assisting in the

preparation and filing of materially false tax returns, in violation of 26 U.S.C. § 7206(2).

The parties and the District Court agreed with the Presentencing Report (“PSR”) that the

loss calculation for the purposes of determining Friday’s sentence — which, per the

Sentencing Guidelines, includes intended loss stemming from the entire “course of

conduct,” whether or not charged, see United States Sentencing Guidelines (“U.S.S.G.”)

§ 2T1.1(c)(1) & cmt. n.2, 2T1.4 cmt. n.1 — was $1,215,562. Based on the resulting total

offense level of 24, the Guidelines recommended a sentence of between 51 and 63

2 months of imprisonment, but the District Court departed downward and sentenced Friday

to 36 months of imprisonment. Furthermore, citing Friday’s inability to pay and the

difficulty involved in the calculation, the District Court ordered no restitution, thereby

rejecting the parties’ agreement that a restitution order of $145,156 — which the

Government explained was “the actual fraud loss that can be traced to the counts of

conviction” — would be appropriate. Administrative Record (“AR”) 143.

The Department of Homeland Security thereafter sought to have Friday removed

under the Immigration and Nationality Act (“INA”) as an alien convicted of an

“aggravated felony,” 8 U.S.C. § 1227(a)(2)(A)(iii), which in turn is defined to include an

offense that “involves fraud or deceit in which the loss to the victim or victims exceeds

$10,000,” id. § 1101(a)(43)(M)(i). Friday contended that his conviction did not meet the

monetary threshold, but the Immigration Judge (“IJ”) concluded, based on Friday’s

failure at sentencing to object to the PSR’s loss calculation of “over a million bucks,” that

the Government had carried its burden to show by clear and convincing evidence that the

loss exceeded $10,000. Administrative Record (“AR”) 600–01. Friday appealed, and the

BIA remanded. Relying on Supreme Court and our precedent requiring a nexus between

the counts of conviction and the actual loss, the BIA concluded that the PSR’s

calculation, based on the loss attributed to Friday’s entire course of conduct (consisting of

roughly 2000 fraudulent returns), did not provide clear and convincing evidence that

more than $10,000 in losses resulted from the 26 returns for which Friday was convicted.

AR 366–67.

3 On remand, the IJ reaffirmed that Friday was removable. This time, the IJ relied

upon the Government’s statement at sentencing that the loss traceable to the counts of

conviction was $145,156, to which Friday’s counsel “concurred,” as proof that a loss of

over $10,000 resulted from the 26 returns for which Friday was convicted. AR 358–59.

On appeal, the BIA agreed that the sentencing colloquy “clearly and convincingly

supports the finding that the loss to the victim exceeded $10,000, and that that loss was

tied to the twenty-six specific counts covered by the actual conviction,” and dismissed the

appeal. AR 3–4. Friday timely petitioned this Court for review.

II.

The BIA had jurisdiction under 8 C.F.R. § 1003.1(b)(3), and we have jurisdiction

to review the BIA’s final order under 8 U.S.C. § 1252(a). Although we lack “jurisdiction

to review any final order of removal against an alien who is removable by reason of

having committed” an aggravated felony, 8 U.S.C. § 1252(a)(2)(C), we retain jurisdiction

to decide the prior question of whether the charged crime is an aggravated felony, which

we consider de novo, Singh v. Att’y Gen, 677 F.3d 503, 508 (3d Cir. 2012).

Because the quantum of loss specified in § 1101(a)(43)(M)(i) is not an element of

the underlying offense but rather a “specific circumstance[] in which a crime was

committed,” courts are not constrained to the modified categorical approach and may

look to the “sentencing-related material” in order to determine whether the crime meets

the monetary threshold. Nijhawan v. Holder, 557 U.S. 29, 38, 42 (2009). Sentencing

materials may include, among other things, the sentencing memoranda, PSR, parties’

4 stipulations, and sentencing transcripts. See Kaplun v. Att’y Gen., 602 F.3d 260, 266 (3d

Cir. 2010). In assessing whether these materials support qualifying a conviction as an

aggravated felony, a court must assure itself by clear and convincing evidence that an

actual loss of more than $10,000 resulted from the “specific counts covered by the

conviction.” Nijhawan, 557 U.S. at 42; see also Singh, 677 F.3d at 510–12. Losses

arising from acquitted, uncharged, or related conduct may not factor in to the

§ 1101(a)(43)(M)(i) analysis. Nijhawan, 557 U.S. at 42. The Supreme Court has

cautioned that this determination must be made “with an eye to . . . the burden of proof

employed,” id. (quoting In re Babaisakov, 24 I. & N. Dec. 306, 319 (2007)), and

considered in light “of any conflicting evidence” in the record, id.

III.

The parties agree that a violation of 26 U.S.C. § 7206(2) is an offense that

involves fraud, so the sole question before us is whether the offenses for which Friday

was convicted involved an actual loss to the victim (here, the Government) that exceeded

$10,000. This seemingly straightforward analysis is complicated by the absence of a

minimum dollar requirement in § 7206(2) and the Sentencing Guidelines’ reliance on

intended — rather than actual — loss for purposes of determining punishment. In the

context of a § 7206(2) conviction, there may be no reason for the Government to expend

energy conclusively establishing the oftentimes difficult-to-determine quantum of actual

loss. The disincentive to prove actual loss is furthered where the defense stipulates to the

fraud loss and the suggested amount of restitution. In the absence of a stipulation, in

5 order to establish the restitution amount the Government would have to establish, by a

preponderance of the evidence, “the actual losses suffered by the victims of the

defendant’s criminal conduct, and based upon losses directly resulting from such

conduct.” United States v. Vitillo, 490 F.3d 314, 330 (3d Cir. 2007) (quoting United

States v. Quillen, 335 F.3d 219, 226 (3d Cir. 2003)); see also Singh, 677 F.3d at 513

(“[C]ourts ordering restitution . . . are limited to remedying the actual loss caused by the

defendant’s ‘offense of conviction.’” (quoting Hughey v. United States, 495 U.S. 411,

413 (1990)). In other words, establishing the restitution amount requires the Government

to undertake the intricate task of establishing the actual losses that flowed from the

specific offenses for which the defendant was convicted.

Sure enough, no mention of actual loss was made in this case until the sentencing

hearing, when the Government amended an inaccuracy in the PSR and its sentencing

memo. Nevertheless, we agree that despite the District Court’s refusal to order

restitution, the Government’s assertion that $145,156 was “the actual fraud loss that can

be traced to the counts of conviction,” along with Friday’s counsel’s agreement that it

would be “appropriate . . . for the Court to order that full amount of restitution,” AR 143–

44, provide clear and convincing evidence that Friday was convicted of an aggravated

felony. Absent countervailing evidence, a party’s stipulation regarding the actual loss

amount may be treated as conclusive. See, e.g., Doe v. Att’y Gen., 659 F.3d 266, 275–76

(3d Cir. 2011); Tian v. Holder, 576 F.3d 890, 896 & n.4 (8th Cir. 2009); cf. Munroe v.

Ashcroft, 353 F.3d 225, 227 (3d Cir. 2003).

6 Our review of the sentencing transcript and the PSR provides additional support

for the conclusion that the counts of conviction resulted in greater than $10,000 in actual

losses. For instance, the District Court notes its understanding that the IRS “improperly

credited” either $7,500 or $8,000 “in almost every” one of Friday’s returns that

improperly claimed a First Time Home Buyer’s Credit. AR 147. Thirteen of the twenty

six returns the Friday was convicted of fraudulently filing improperly claimed that Credit

on behalf of clients. If almost every such return included such a significant payout, it is

no surprise that the loss amount for the counts of conviction would be in excess of

$10,000. 1 Moreover, the District Court’s rejection of the parties’ agreed-to restitution

1 The fact that some or even much of the improperly provided credits have been repaid — thereby reducing the restitution amount — does not lower the determination of the “actual loss” amount. There is no bright-line rule concerning the time at which we fix the actual loss, but where a fraud perpetrator deprives a victim of property without providing any security to counterbalance the deprivation, the loss is determined as of the time of detection, not the time of sentencing. See Singh, 677 F.3d at 518 (“[P]ayment of restitution should not, and does not, negate a loss that actually occurred. . . . It doesn’t matter how fleetingly the person obtains control. If the person’s offense deprives the defrauded party of property, an actual loss occurs to an actual victim under [8 U.S.C. § 1101(a)(43)(M)(i)].”). The rationale is that where a fraud perpetrator pledged collateral in exchange for the fraudulently induced payment, the victim’s loss is reduced by the value of the collateral in their possession, and so at sentencing the value of that collateral should be deducted before determining the victim’s actual loss. See United States v. Saunders, 129 F.3d 925, 931 n.4 (7th Cir. 1997). But here, where, as in the case of check kiting, the victim will bear the entire loss, the actual loss is determined at the time of the fraud’s detection without any reduction for “fortuit[ous]” repayments made thereafter. United States v. Shaffer, 35 F.3d 110, 115 (3d Cir. 1994) (noting the unfairness that would result from calculating loss at the time of sentencing, because it could yield different sentences for identical defendants if one of them is able to repay the victim between conviction and sentencing); United States v. Mummert, 34 F.3d 201, 204 (3d Cir. 1994) (“A defendant in a fraud case should not be able to reduce the amount of loss 7 order derived not from its rejection of the quantum of the loss, but of its conclusion that

Friday would be unable to pay such a sum and that calculating restitution — which would

involve linking actual losses to the counts of conviction, deducting third-party

repayments, and monitoring to reduce Friday’s restitution burden as repayments come in

— was “too complicated to determine at sentencing.” AR 144–45. The District Court

instead instructed Friday to discuss the issue directly with the IRS, who “keep tabs” on

the repayments and can independently impose restitution. AR 145. This colloquy makes

clear that the District Court both accepted that there was a quantum of actual loss that

remained outstanding, and that the number was significant enough that it would prove too

difficult to calculate in the first instance or to track as additional payments came in. If

that actual loss was below $10,000, we suspect that the calculation would not have been

as difficult — nor the ongoing monitoring as onerous — as the District Court feared.

We are unpersuaded by the allegedly “conflicting” evidence that Friday asserts

undermines confidence in this conclusion. First, he argues that we should not accept at

face value the Government’s extremely clear proffer — adopted by his counsel — that

“the actual fraud loss that can be traced to the counts of conviction” is $145,156, because

for sentencing purposes by offering to make restitution after being caught.”). Given that restitution is meant to “make the victim whole” and may not “result in the payment to the victim of an amount greater than the victim’s loss,” United States v. Diaz, 245 F.3d 294, 312 (3d Cir. 2001), the net-payout (that is, accounting for other repayments to the victim) is relevant for determining restitution at the time of sentencing. But it should play no role in determining the actual loss for the purposes of deportability, which must be ascertained at the time of the fraud’s detection. 8 the Government in its sentencing memo had been imprecise when explaining whether the

loss amount included relevant conduct. In one instance, the Government asserts that the

$1,215,562 number was “[t]he fraud loss associated with the charged returns,” AR 322

n.3, and in another the Government explains that the number “includes the loss arising

from the counts of conviction as well as [Friday’s] relevant conduct,” AR 326 n.20.

Friday argues that these quotes show that the Government failed consistently to represent

the provenance of the asserted fraud loss of $1,215,562, sometimes arguing that it was

related only to the “charged returns” while at other times indicating correctly that it

included the uncharged “relevant conduct.” Friday Br. 23. In light of this alleged

sloppiness, Friday maintains that we cannot take the Government at its word when it

asserted at sentencing that the “actual” loss “traced to the counts of conviction” does not

also include relevant conduct.

But the two instances that Friday points to suggest no such imprecision. As we

explained, the only relevant consideration for sentencing purposes was the total loss

intended by the entirety of Friday’s illegal conduct. See U.S.S.G. § 2T1.1(c)(1). It is

entirely consistent both to acknowledge that the total fraud loss amount includes relevant

conduct and also to assert — in language similar to that used in the Guidelines — that it

is the loss “associated with” the charged returns, meaning the loss that the Sentencing

Guidelines deem applicable to the scheme represented by the counts of conviction. See

id. § 2T1.1 cmt. n.2 (“In determining the total tax loss attributable to the offense . . . all

conduct violating the tax laws should be considered as part of the same course of conduct

9 or common scheme or plan . . . .”). More importantly, unlike at the sentencing hearing, in

neither of the alleged imprecise statements did the Government assert that $1,215,562

represented “actual” losses directly “traced” to (as opposed to generally “associated

with”) the counts of conviction. The use of that term at the hearing makes clear that the

Government had excluded the losses resulting from relevant conduct. We discern no

basis in the record to undermine the conclusion that the Government meant what it said

when it represented to the District Court that $145,156 was the proper restitution figure,

and that Friday’s counsel meant what he said when he agreed with that position.

We are likewise unswayed by Friday’s argument that the Government arrived at

the restitution number by simply deducting from the $1,215,562 figure the amount of

refunds that the IRS had recouped without also deducting from that figure the losses tied

only to relevant conduct. At sentencing, the Government corrected the PSR’s restitution

recommendation to account — as the law requires — only for the actual loss traceable to

the counts of conviction. The Government added that the corrected actual loss figure was

subject to change as the IRS continued to recoup refunds, which would result in a lower

actual loss. Friday reads the Government’s caveat as applying to the derivation of the

actual loss number, such that it was reached by deducting repayments but not uncharged

or acquitted conduct. But the more natural reading — based on the Government’s

introduction of the revised figure by discussing actual loss traceable to the counts of

conviction — is that the actual loss number was derived by looking only at the losses

sustained from the counts of conviction, and that even that revised number might be

10 further amended as repayments come in. To accept Friday’s theory would be to discount

entirely the Government’s precise description of the revised restitution figure as being the

actual loss tied to the counts of conviction. As we already noted above, the record

provides no support for such interpretive calisthenics.

We are mindful of the lower preponderance standard governing the determination

of the loss amount for sentencing and restitution, see Vitillo, 490 F.3d at 330, and of the

potential effect of that evidentiary standard on a defendant’s decision to stipulate to the

Government’s proposed loss amount. It is surely plausible that a defendant might

stipulate to a loss amount for restitution purposes that is higher than he or she believes is

the actual loss to the victim directly attributable to the counts of conviction out of fear

that, if they do not, the Government could by a preponderance establish an even greater

loss. However, the Supreme Court has expressly relied on a “defendant’s own

stipulation, produced for sentencing purposes,” to conclude that a loss met the threshold

for an aggravated felony. Nijhawan, 557 U.S. at 42. Our Court has followed suit, and

has relied on the defendant’s stipulation of the loss amount, even though the loss amount

was not an element of the offense and thus could have been established under the

preponderance standard. See, e.g., Doe, 659 F.3d at 275 (relying on loss stipulation in a

plea agreement regarding conviction for a wire fraud offense that “makes no distinctions

on the basis of the amount of loss”). Our sister courts have done the same. See, e.g.,

Kawashima v. Holder, 615 F.3d 1043, 1051, 1055 (9th Cir. 2010), aff’d, 565 U.S. 478

(2012); Tian, 576 F.3d at 896 & n.4; Arguelles-Olivares v. Mukasey, 526 F.3d 171, 179

11 (5th Cir. 2008). We conclude that Friday’s agreement to $145,156 of restitution is clear

and convincing evidence that the actual loss stemming from his counts of conviction was

more than $10,000. 2

IV.

In light of the foregoing, we will deny Friday’s petition for review.

2 We have considered and we reject Friday’s other claim that the BIA improperly engaged in factfinding in contravention of 8 C.F.R. § 1003.1(d)(3)(iv) when it agreed that the loss amount was established by “clear and convincing evidence” even though the IJ failed to mention that standard of review. The BIA relied only on the facts that the IJ considered, so it made no independent factfinding. Regardless, considering that the Court in Nijhawan itself determined that certain evidence was clear and convincing, see 557 U.S. at 43, we doubt whether such a determination is a factfinding at all. 12