FILED NOT FOR PUBLICATION OCT 27 2021 UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, No. 19-50272
Plaintiff-Appellee, D.C. No. 2:13-cr-00469-CJC-2 v.
KELEN MAGAEL BUCHAN, MEMORANDUM*
Defendant-Appellant.
Appeal from the United States District Court for the Central District of California Cormac J. Carney, District Judge, Presiding
Argued and Submitted August 31, 2021 Pasadena, California
Before: IKUTA, BENNETT, and R. NELSON, Circuit Judges. Concurrence by Judge R. NELSON
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.
* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. 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
2 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 co-
defendants 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.
3 FILED OCT 27 2021 USA v. Kelen Buchan, No. 19-50272 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS 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 “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.
2 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).
3 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
4 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 minutes
didn’t matter: Once he participated and used the wires one time in furtherance of it,
he was guilty of wire fraud. At that point, the extent of his participation in the
fraudulent scheme became a fact based on his offense of conviction that could be
proven at sentencing by a preponderance of the evidence.
5 III
The government also argues that the clear and convincing evidence rule is
clearly irreconcilable with Beckles, and therefore has been overruled. I agree.
“[W]here the reasoning or theory of our prior circuit authority is clearly
irreconcilable with the reasoning or theory of intervening higher authority, a three-
judge panel should consider itself bound by the later and controlling authority, and
should reject the prior circuit opinion as having been effectively overruled.” Miller
v. Gammie, 335 F.3d 889, 893 (9th Cir. 2003).
The clearly irreconcilable analysis does not focus solely on the issues or
holdings of the cases. “Rather, the relevant court of last resort must have undercut
the theory or reasoning underlying the prior circuit precedent in such a way that
the cases are clearly irreconcilable.” Gonzalez v. Barr, 955 F.3d 762, 768 (9th Cir.
2020) (emphasis added) (citing Miller, 335 F.3d at 900), cert. granted sub nom
Garland v. Gonzalez, No. 20-322, 2021 WL 3711642 (Aug. 23, 2021). In
evaluating whether our prior precedent has been overruled by intervening
precedent, the court must consider the “overall analytical framework” of the case
and “focus on the reasoning and analysis in support of a holding, rather than the
holding alone.” Lair v. Bullock, 697 F.3d 1200, 1206 (9th Cir. 2012) (citing In re
Flores, 692 F.3d 1021, 1030–31 (9th Cir. 2012)).
6 To be sure, this court has also held that to be clearly irreconcilable, the
intervening authority “would need to be so fundamentally inconsistent with our
prior cases that our prior cases cannot stand” and that if the court “can apply [its]
prior circuit precedent without running afoul of the intervening authority, [it] must
do so.” In re Gilman, 887 F.3d 956, 962 (9th Cir. 2018). But it is not just the
holdings that must be fundamentally inconsistent: it is the cases’ “reasoning and
principles.” Id. If this court’s prior reasoning is clearly inconsistent with
intervening precedent, then the case has been overruled, even if the holdings
themselves do not expressly conflict.
In Beckles, the Supreme Court held that because the Guidelines “merely
guide the exercise of a court’s discretion in choosing an appropriate sentence
within the statutory range,” they “are not amenable to a vagueness challenge”
under the Due Process Clause. 137 S. Ct. at 892, 894. The Court’s reasoning
relied on the observation that “in the long history of discretionary sentencing, this
Court has never doubted the authority of a judge to exercise broad discretion in
imposing a sentence within a statutory range.” Id. at 893 (internal quotation marks
omitted) (citing United States v. Booker, 543 U.S. 220, 233 (2005)). The Court
noted that “the system of purely discretionary sentencing that predated the
Guidelines was constitutionally permissible.” Id. at 894. The Court reasoned that
7 “[i]f a system of unfettered discretion is not unconstitutionally vague, then it is
difficult to see how the present system of guided discretion could be.” Id.
Of course, Beckles concerned a void-for-vagueness due process challenge.
But the Supreme Court itself did not confine its reasoning to that context: On top
of discussing other kinds of due process challenges, it even supported its reasoning
with a similar case from the Eighth Amendment context. Id. at 895–96 (citing
Espinosa v. Florida, 505 U.S. 1079, 1082 (1992) (per curiam)).
Every analytical element of the Supreme Court’s reasoning applies directly
to this court’s clear and convincing evidence rule. District judges are now free to
sentence anywhere within the statutory range, with or without making any
additional factual findings. “If a system of unfettered discretion is not
unconstitutional[]” when there are no factual findings at all, “then it is difficult to
see how the present system of guided discretion could be.” Id. The Supreme
Court’s exact reasoning, principles, and analytical framework all apply here.
Before the Sentencing Guidelines existed, a defendant’s due process rights
were violated “when a court relie[d] on extensively and materially false evidence
to impose a sentence on an uncounseled defendant.” Id. at 896 (internal quotation
marks omitted) (citing Townsend v. Burke, 334 U.S. 736, 741 (1948)). This rule is
still good law because it did not depend on the mandatory nature of the Guidelines.
Now that they are advisory, Beckles means that due process rules rooted in the
8 mandatory nature of the Guidelines are no longer valid. That reasoning applies
here: this court’s clear and convincing evidence rule is rooted in the mandatory
nature of the Guidelines, is clearly irreconcilable with the Supreme Court’s
reasoning and analysis in Beckles and has been overruled.
IV
In the alternative, 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.
The origin of the clear and convincing evidence rule line of cases is
McMillan v. Pennsylvania, 477 U.S. 79 (1986), which held that due process did not
require a sentencing enhancement to be proven by anything more than a
preponderance of the evidence. In dicta, the Court observed that the sentencing
provision at issue in that case—a state enhancement for visible possession of a
firearm—“gives no impression of having been tailored to permit the visible
possession finding to be a tail which wags the dog of the substantive offense.” Id.
at 88.
A few years later, in United States v. Kikumura, the Third Circuit confronted
a sentencing enhancement that increased the sentence “from about 30 months to 30
years.” 918 F.2d 1084, 1100 (3d Cir. 1990), overruled by United States v. Fisher,
9 502 F.3d 293, 305–07 (3d Cir. 2007). The Third Circuit observed that this
enhancement was “perhaps most the dramatic example of a sentence hearing that
functions as a tail which wags the dog of the substantive offense” and held “that in
such situations, the factfinding underlying that departure must be established at
least by clear and convincing evidence.” Id. at 1100–01 (citing McMillan, 477
U.S. at 88) (internal quotation marks omitted).
We first noted the possibility of such a potential due process requirement the
next year in Restrepo II, 946 F.2d at 660–61, but did not hold that there was such a
requirement until eight years later in United States v. Hopper, 177 F.3d 824, 833
(9th Cir. 1999).
After again applying the clear and convincing test in United States v. Mezas
de Jesus, 217 F.3d 638, 642–43 (2000), we laid out several factors to guide the
inquiry into whether a factual finding has an extremely disproportionate effect on a
sentence in United States v. Valensia, 222 F.3d at 1181–82.
The Supreme Court vacated Valensia after Apprendi v. New Jersey, 530 U.S.
466 (2000), in which the Court held that facts increasing the maximum statutory
penalty for a crime must be submitted to the jury and proven beyond a reasonable
doubt. Still, we continued to use what we began to call “the six Valensia factors”
as a framework to determine whether clear and convincing evidence was required.
United States v. Jordan, 256 F.3d 922, 928–29 (9th Cir. 2001).
10 The clear and convincing evidence rule and the Valensia factors became
entrenched in our case law and were cited and applied many times. See, e.g.,
United States v. Peyton, 353 F.3d 1080, 1088 (9th Cir. 2003), overruled on other
grounds by United States v. Contreras, 593 F.3d 1135 (9th Cir. 2010); United
States v. Bonilla-Montenegro, 331 F.3d 1047, 1050 (9th Cir. 2003).
Still, until the mid-2000s, this court had “applied the disproportionate impact
test only in the case of sentence enhancements.” United States v. Gonzalez, 365
F.3d 796, 799 (9th Cir. 2004). That was the status of this court’s rule in 2005,
when the Supreme Court decided Booker and held that the Sentencing Guidelines
were merely advisory.
When Booker was decided, three other circuits had adopted the clear and
convincing evidence rule. All three have now held via three judge panel that the
rule was overruled by intervening Supreme Court precedent: Booker.
The Third Circuit held that “concerns about the tail wagging the dog were
valid under a mandatory guideline system” but had been “put to rest when Booker
rendered the guidelines advisory.” Fisher, 502 F.3d at 305. The Seventh Circuit
held that the “debate” over McMillan had been “rendered academic” by Booker,
and that “[w]ith the guidelines no longer binding the sentencing judge, there is no
need for courts of appeals to add epicycles to an already complex set of (merely)
11 advisory guidelines by multiplying standards of proof.” United States v. Reuter,
463 F.3d 792, 793 (7th Cir. 2006). And the Eighth Circuit concluded that Booker
“dramatically altered [the] landscape” of the sentencing guidelines and that it
“eliminate[d] any due process concern requiring a heightened standard of proof for
fact findings that have an extremely disproportionate impact on the defendant's
advisory guidelines sentencing range.” United States v. Villareal-Amarillas, 562
F.3d 892, 897–98 (8th Cir. 2009).
This court, on the other hand, held that the clear and convincing evidence
rule survived Booker in United States v. Staten, 466 F.3d 708, 717–720 (9th Cir.
2006). And in Staten, we boldly extended the rule’s application from just factual
findings underlying sentencing enhancements to all factual findings made at
sentencing that have an extremely disproportionate effect on the ultimate sentence.
Id. at 720.1
Since Staten, only this court has continued to apply a clear and convincing
evidence standard to factual questions decided at sentencing that have an extremely
disproportionate effect on the ultimate sentence. See, e.g., Valle, 940 F.3d at 480–
81; United States v. Pineda-Doval, 614 F.3d 1019, 1041 (9th Cir. 2010).
1 In extending the rule, the Staten court relied only on Kikumura and other cases discussed above; it cited no example of the Ninth Circuit applying the clear and convincing evidence rule to a factual finding underlying a departure, rather than the application of a sentencing guideline. Id. at 719-20.
12 Staten was wrongly decided. The court in Staten relied on faulty reasoning.
The court acknowledged that the “general baseline” for findings of fact at
sentencing was “the preponderance of the evidence standard.” Staten, 466 F.3d at
720. Still, the court held that its prior clear and convincing cases survived Booker
because those cases “focused on the actual effect a given fact had on the sentence
that the district court ultimately imposed, not on whether the district court was
required to give a fact it found the effect it did.” Id.
This reasoning elides the fact that those decisions all relied on the
Guidelines’ mandatory nature. Kikumura and all this court’s previous cases in this
line relied on the mandatory nature of the Guidelines. See Fisher, 502 F.3d at
305–06 (“Kikumura’s holding was predicated on the then-mandatory nature of the
Guidelines . . . The critical distinction [now] is the advisory nature of the
Guidelines.”).
Kikumura concerned factual findings made in support of an upwards
departure from the mandatory Guidelines range. 918 F.2d at 1097–98. The Staten
court characterized the “reliance on disputed facts [in Kikumura as] discretionary
rather than mandatory.” 466 F.3d at 719. And it’s true that even when the
Guidelines were mandatory, district judges had discretion to depart upwards. But
the Staten court missed the point: What was mandatory was not the departure, but
the Guidelines range itself.
13 That the guidelines were mandatory was the basis for the clear and
convincing evidence rule. Here’s why: In a case like Kikumura, the district court
had to sentence the defendant within the Guidelines range, except if it departed
upwards. So the factual findings underlying the upward departure were the only
thing standing between a mandatory, lower Guidelines-range sentence and the
higher, departed sentence. Without those factual findings, the district court would
have had to choose a sentence within the Guidelines range. It is in that sense that
the Guidelines were mandatory.
Now that the Guidelines are advisory, district courts have discretion to
sentence anywhere within the entire statutory range, full stop. And “facts found at
sentencing merely inform the judge’s discretion; they do not increase the
maximum sentence to which a defendant is otherwise exposed.” Villareal-
Amarillas, 562 F.3d at 898. Accordingly, factual findings at sentencing cannot
logically lead to a sentence that is “extremely disproportionate” relative to the
mandatory sentence that would be imposed absent the factual finding, Staten, 466
F.3d at 717, because there is no longer any mandatory Guideline sentence at
all. Rather, the only “mandatory” range remaining after Booker is the statutory
range. As long as the ultimate sentence falls within that range and meets all other
requirements, a district court could sentence well beyond the Guidelines range
without making any additional factual findings. The reasoning of the clear and
14 convincing evidence rule rested on the mandatory nature of the Guidelines: That’s
why every other circuit got rid of the rule once the Guidelines became advisory.
We should follow suit, en banc if necessary.