United States v. Helene Donna Alpert, United States of America v. Carl Henry Alpert

28 F.3d 1104, 1994 U.S. App. LEXIS 21942, 1994 WL 397643

• Court: Court of Appeals for the Eleventh Circuit
• Decided: August 17, 1994
• Docket: 91-8957, 91-9034
• Status: Published

Opinions

BLACK, Circuit Judge:

In this appeal we discuss the proper application of the United States Sentencing Guidelines (Guidelines or USSG) § 3C1.1 enhancement for obstruction of justice. We also review whether it was permissible under the circumstances of this case for the district court to depart upward from the Guidelines sentencing range to account for the duration and extent of fraudulent conduct. We hold that, to permit meaningful appellate review, district courts must make specific findings of fact when they enhance sentences under Guidelines § 3C1.1. We also hold that upward departure from the Guidelines sentencing range to reflect the duration and extent of fraudulent conduct was inappropriate because the Guidelines adequately account for the defendant’s fraudulent conduct.

I. FACTS

In 1988, the United States began investigating credit card and credit-related fraud being committed by Carl and Helene Alpert. By February 1990, the Government had located, served grand jury subpoenas on, and questioned the Alperts. In March, the Al-perts’ attorneys entered into plea negotiations with the Government; a final session was scheduled for April 1990. The Government withheld indictment during plea negotiations, intending to proceed later by information.¹

Before the last scheduled plea negotiation meeting in April, the Alperts disappeared. They did not leave a forwarding address with the post office, their landlord, their creditors, Helene’s mother, or the Government. Their son did not return to school following a spring holiday, although school officials were not notified of his withdrawal. A U-Haul trailer they rented on April 3,1990, was later found abandoned in Lebanon, Ohio, but the Government was unable to locate the Alperts. Consequently, plea negotiations ended and the Government presented its case against the Alperts to a grand jury. In September 1990, Carl Alpert was indicted on forty-one counts and Helene Alpert on five counts of credit card and credit-related fraud.

A few days after the indictment, Carl Alpert was arrested in California, where the family had moved, for fraudulently leasing an automobile. Carl gave police a false name upon arrest. A subsequent search of the

Alperts’ California home revealed dozens of false documents, indicating that the Alperts had continued to engage in their criminal activity from California. After officials determined that the Alperts had arrest warrants outstanding in Georgia, Carl was transported across the country in custody while Helene was permitted to return to Georgia on her own. In July 1991, Carl pled guilty to forty counts and Helene pled guilty to two counts of the September 1990 indictment.

At the sentencing hearing, the district court determined that the Alperts had defrauded eight financial institutions of almost $500,000 between 1984 and 1990. The district court inferred that their disappearance and subsequent activities slowed down the criminal process and enhanced both of their sentences by two levels under § 3C1.1 for obstructing justice. In addition, the district court enhanced Carl Alpert’s sentence by two levels under § 2Fl.l(b)(2) because his offenses involved more than minimal planning. The district court then departed upward by an additional three levels in Carl Alpert’s sentence: two levels after determining that the Guidelines did not adequately account for the duration and extent of his fraudulent activity, and one level to ensure that his sentence would be double that of his wife.

II. DISCUSSION

A. Obstruction of Justice

Guidelines § 3C1.1 provides that a sentence may be enhanced by two levels “[i]f the defendant willfully obstructed or impeded, or attempted to obstruct or impede, the administration of justice during the investigation, prosecution, or sentencing of the instant offense.” USSG § 3C1.1. In applying the enhancement, the district court stated, “the defendants leaving town in the middle of plea negotiations without notifying the government and their use of phony names in California once they got there constitutes an obstruction of justice since I infer that it slowed down the criminal process.” The Al-perts maintain that the district court erroneously applied the two-level obstruction enhancement. We agree.

This Court is bound by the Guidelines, including the commentaries that interpret or explain a guideline. Stinson v. United States, — U.S. —, —, 113 S.Ct. 1913, 1915, 123 L.Ed.2d 598 (1993).² The commentary accompanying § 3C1.1 states plainly that avoiding or fleeing from arrest does not warrant an enhancement. USSG § 3C1.1, comment, (n. 4(d)). This circuit and other circuits have recognized that successfully avoiding arrest, alone, does not warrant an enhancement for obstruction of justice. United States v. Burton, 933 F.2d 916, 918 (11th Cir.1991) (holding that the obstruction enhancement does not apply to flight from law enforcement officers about to make an arrest); United States v. Madera-Gallegos, 945 F.2d 264, 266-67 (9th Cir.1991) (holding obstruction enhancement inapplicable to defendants who successfully avoided arrest for nine months, knowing that Government agents were searching for them, but noting that “flight, coupled with other ‘obstructive’ conduct, may justify the § 3C1.1 enhancement”); United States v. Sanchez, 928 F.2d 1450, 1459 (6th Cir.1991) (holding obstruction enhancement inapplicable when “defendants undoubtedly abandoned their known residence in an attempt to avoid being arrested” after learning of the arrest of a co-conspirator). This rule does not mean that such uncooperative conduct must go unpunished. When a district court finds that a defendant engaged in uncooperative conduct that does not warrant the obstruction enhancement, like flight to avoid arrest, the Guidelines note that the district court may sanction that conduct within the applicable guideline range. USSG § 3C1.1, comment, (n. 4).

We conclude that the § 3C1.1 enhancement does not apply to persons engaged in criminal activity who learn of an investigation into that activity and simply disappear to avoid arrest, without more. Such persons do not face a two-level enhancement for failing to remain within the jurisdiction or for failing to keep the Government apprised of their whereabouts during its pre-indictment investigation.³ The disappearance may be considered only in determining the defendant’s sentence within the otherwise applicable guideline range. In this case, then, the Alperts’ sentences should not have been enhanced simply because they moved to California to avoid arrest. The Alperts may have engaged in additional conduct while avoiding arrest, however, that would warrant application of the obstruction enhancement, particularly if that conduct significantly hindered the investigation or prosecution of their offenses.

Certain uncooperative conduct deserves enhancement under § 3C1.1 if it actually obstructs justice. See USSG § 3C1.1, comment, (nn. 3 & 4). For example, application note 3(g) mandates the enhancement if a defendant’s materially false statement to a law enforcement officer significantly obstructed or impeded the investigation or prosecution of the offense. Id. at (n. 3(g)). In order to permit meaningful appellate review, when a district court applies the obstruction enhancement because a defendant made false statements, not under oath, to law enforcement officers, it must find that the statements were false and material. It must also explain how the statements significantly obstructed or impeded the investigation or prosecution of the offense. Similarly, because “providing a false name or identification document at arrest” does not justify the enhancement “except where such conduct actually resulted in a significant hindrance to the investigation or prosecution,” id. at (n. 4(a)), a district court applying the enhancement because a defendant gave a false name at arrest must explain how that conduct significantly hindered the prosecution or investigation of the offense.

While we are loathe to further ritualize the sentencing process by requiring district courts to make findings of fact that may perhaps appear obvious to a judge so familiar with the parties and their circumstances, our review of the application of the § 3C1.1 enhancement is a .fact-specific inquiry. See Burton, 933 F.2d at 917. In this case, the district court’s inference that the Alperts’ activities slowed down the criminal process does not permit this Court to review the enhancement with a sufficient understanding of the factual circumstances underlying the district court’s decision. Clear factual findings are necessary to assess whether one or both of the Alperts did more than simply move to avoid arrest, so that we may review whether they engaged in conduct for which the enhancement was appropriately applied under application notes 3 and 4 of the Guidelines.

We do not suggest that the record in this case cannot support a sentence enhancement for obstruction of justice. We merely hold that the district court’s findings were insufficient to permit application of the enhancement. On remand, if the district court applies the § 3C1.1 enhancement, it should note specifically what each defendant did, why that conduct warrants the enhancement, and, if applicable, how that conduct actually hindered the investigation or prosecution of the offense.

B. Upward Departure

When it sentenced Carl Alpert, the district court applied the two-level enhancement for more than minimal planning under Guidelines § 2F1.1. The district court then departed upward from the Guidelines range by three additional levels: two levels because it believed that the Guidelines did not adequately account for the “very large number of affirmative acts of fraud” that “covered so many years, four to five years, and involved so many victims,” and one level to ensure that Carl Alpert’s sentence was double that of his wife. Carl Alpert does not dispute the district court’s application of the two-level enhancement for more than minimal planning. Further, he and the Government agree that since his sentencing this circuit has held that a district court’s desire to account for differential culpability among defendants — in this case, to make Carl Alpert’s sentence double that of his wife — is not a valid basis for departure.⁴ Consequently, only the district court’s two-level upward departure designed to account for the duration and extent of the fraud in this case is in dispute. Carl Alpert asserts that this two-level upward departure is precluded because the Guidelines already account for those departure factors cited by the district court. We agree.

The Guidelines establish sentencing ranges for cases included in the “heartland [of] typical cases embodying the conduct that each guideline describes.” USSG Ch. 1, Pt. A 4(b), p.s. Departure from the Guidelines range should occur only in those atypical eases beyond the “heartland.” Id. Upward departure from the Guidelines range is permitted only when aggravating circumstances exist that were not adequately considered by the Sentencing Commission when it developed the Guidelines. 18 U.S.C. § 3553(b). The determination that particular circumstances were not adequately considered is a question of law subject to de novo review. United States v. Valle, 929 F.2d 629, 631 (11th Cir.), cert. denied, — U.S. —, 112 S.Ct. 401, 116 L.Ed.2d 350 (1991). The existence of those circumstances, however, is a factual determination made by the district court and reviewed under the clearly erroneous standard. Id. If we agree with the district court that the circumstances it cited as grounds for departure were not adequately considered in the Guidelines, we must then determine whether departure based upon those circumstances is consistent with the goals of the Guidelines. Id.

The duration and extent of Carl Alpert’s fraudulent activity were circumstances that were adequately considered by the Sentencing Commission when it developed § 2F1.1 of the Guidelines. As the Commission itself explained:

Empirical analyses of pre-guidelines practice showed that the most important factors that determined sentence length were the amount of loss and whether the offense was an isolated crime of opportunity or was sophisticated or repeated. Accordingly, although they are imperfect, these are the primary factors upon which the guideline has been based.

USSG § 2F1.1, comment, (backg’d.) (emphasis added). Consistent with the Guidelines’ goal of sentencing uniformity, § 2F1.1 contains a dollar loss table that substitutes an objective and quantifiable measure of loss in place of a district court’s subjective determinations. See USSG Ch. 1, Pt. A 4(b), p.s. Section 2F1.1 also includes an enhancement for more than minimal planning that applies when offenses involve “more planning than is typical for commission of the offense in a simple form” and “is deemed present in any case involving repeated acts over a period of time.” USSG § 1B1.1, comment, (n. 1(f)). The circumstances the district court cited as a reason for upward departure, rather than being factors not adequately considered by the Sentencing Commission, are the “primary factors” that formed the basis for the specific offense characteristics contained in § 2F1.1.

Carl Alpert defrauded eight financial institutions of almost $500,000. His fraudulent activities are not the atypical case; his conduct is not outside the heartland of that already considered by the Sentencing Commission in developing the Guidelines. We hold, therefore, that upward departure based upon the duration and extent of the fraud in this case is not permitted.

Other circuits have held that there are cases where fraudulent conduct is so extensive and repeated as to warrant departure. See, e.g., United States v. Benskin, 926 F.2d 562 (5th Cir.1991) (upward departure warranted for five-year scheme involving over 600 victims and more than $3.8 million); United States v. Burns, 893 F.2d 1343 (D.C.Cir.1990) (upward departure warranted for six-year scheme involving fifty-three separate fraudulent acts), rev’d on other grounds, 501 U.S. 129, 111 S.Ct. 2182, 115 L.Ed.2d 123 (1991). We recognize that a future atypical case may warrant upward departure. This, however, is not such a case. As we explained above, Carl Alpert’s conduct was adequately considered within Guidelines § 2F1.1. Accordingly, the district court may not apply an upward departure to his sentence to account for the duration and extent of his fraudulent conduct.

III. CONCLUSION

For the foregoing reasons, we VACATE the sentences of Carl and Helene Alpert and REMAND for resentencing consistent with this opinion.

1 . Carl Alpert's attorney said:

These were days when we thought we could sit down and draft what the guideline application would be, and we actually sat down and I said he will get two points for this and no points for this, and somehow we actually deceived ourselves into believing we would just submit that to a judge and that's how it would come out, and since then we learned you can’t do that....

2 . A Guidelines’ commentary does not bind federal courts if the commentary “violates the Constitution or a federal statute, or is inconsistent with, or a plainly erroneous reading of, that guideline.” Stinson, - U.S. at -, 113 S.Ct. at 1915. None of the exceptions identified in Stinson are present in this case.

3 . Of course, a defendant who escapes from custody or willfully fails to appear for a judicial proceeding as ordered should have his sentence enhanced. USSG § 3C1.1, comment, (n. 3(e)).

4 . The district court did not have the benefit of our holding in United States v. Chotas, 968 F.2d 1193 (11th Cir.1992), when it sentenced Carl Alpert. We held in Chotas that the Guidelines are intended to account for the relative culpability of offenders and that insufficient disparity in the sentences of co-defendants is an improper basis for departure. Id. at 1198. In this case, the district court may not depart upward to ensure that Carl Alpert’s sentence is double that given Helene Alpert.