United States v. Olawale Balogun

• Court: Court of Appeals for the First Circuit
• Decided: March 19, 1993
• Docket: 92-1668
• Status: Published

Opinion

USCA1 Opinion

March 19, 1993
                            UNITED STATES COURT OF APPEALS
                                For The First Circuit
                                 ____________________

          No. 92-1668

                              UNITED STATES OF AMERICA,

                                      Appellee,

                                          v.

                                HENRY OLAWALE BALOGUN,

                                Defendant, Appellant.

                                 ____________________

          No. 92-1825

                              UNITED STATES OF AMERICA,

                                      Appellee,

                                          v.

                                   EBENEZER ALUKO,

                                Defendant, Appellant.

                                 ____________________

                    APPEALS FROM THE UNITED STATES DISTRICT COURT

                           FOR THE DISTRICT OF RHODE ISLAND

                    [Hon. Ronald R. Lagueux, U.S. District Judge]
                                             ___________________

                                 ____________________

                                        Before

                                 Breyer, Chief Judge,
                                         ___________

                        Torruella and Boudin, Circuit Judges.
                                              ______________

                                _____________________

Edward  C. Roy, Jr., with whom Roy  & Cook, was on brief for
               ___________________            ___________
          appellant Henry Olawale Balogun.
               Francis J. Gillan III for appellant Ebenezer Aluko.
               _____________________
               Margaret E. Curran,  Assistant United States  Attorney, with
               __________________
          whom  Lincoln  C. Almond,  United  States  Attorney, and  Seymour
                __________________                                  _______
          Posner,  Assistant  United States  Attorney,  were  on brief  for
          ______
          appellee.

____________________

                                    March 19, 1993
                                 ____________________

TORRUELLA,  Circuit Judge.   Appellants  Ebenezer Aluko
                                _____________

          and Henry Olawale Balogun pled  guilty to conspiracy, mail fraud,

          and insurance  fraud in violation  of 18  U.S.C.    371,  1341-42

          (1984)  and  42  U.S.C.    408(a)(7)(B)  (1991).    Specifically,

          appellants procured  insurance  coverage on  vehicles  registered

          under fictitious  names.  The conspiracy entailed one hundred and

          twenty-four fraudulent  claims amounting  to $620,000.1   Balogun

          and another co-defendant  initiated the scheme on April  1, 1989;

          Aluko joined the conspiracy on or about October 6, 1990.

                    The  district  court  sentenced  Aluko  to  twenty-four

          months  in   prison2   and  Balogun   to  thirty-three   months.3

          Appellants appeal their sentences.

                    "We review  a trial  court's  determinations under  the

          [United  States]  Sentencing  Guidelines only  for  clear error."

          United States  v. Panet-Collazo,  960 F.2d  256,  262 (1st  Cir.)
          _____________     _____________

          (citing  United States v. Sklar,  920 F.2d 107,  110-11 (1st Cir.
                   _____________    _____

          1990)),  cert.  denied,  113 S.  Ct.  645  (1992).   However,  we
                   _____________

          interpret provisions of the relevant  guidelines de novo.  United
                                                           _______   ______

          States v. St. Cyr, 977 F.2d 698, 701 (1st Cir. 1992).  Because we
          ______    _______

          find  no clear  error  in the  district  court's calculation,  we

          affirm Balogun's  sentence.  However,  we find that  the district
                              
          ____________________

          1  Although  the claims amounted to  $620,000, appellants' arrest
          prevented the collection of $403,000.

          2    The  judge also  imposed  a  three-year  term of  supervised
          release, restitution of $16,750, and a $50 special assessment.

          3  The judge  also imposed a three-year supervised  release term,
          restitution  of $100,000 if the defendant was not deported, and a
          $200 special assessment.

                                         -3-

court  improperly interpreted  a  guideline  relevant to  Aluko's

          sentence.    Thus, we  vacate that  sentence  and remand  for re-

          sentencing consistent with this opinion.

                    We address the appeals in turn.

          Appellant Aluko
          Appellant Aluko
          _______________

                    At   his  sentencing   hearing,  Aluko   contested  his

          presentence  report's calculation  of  offense  level  under  the

          United   States   Sentencing   Guidelines   ("U.S.S.G.").4     In

          calculating the  total offense  level in the  presentence report,

          the probation officer  based his calculation  on all one  hundred

          and  twenty-four   fraudulent  claims   filed  as  part   of  the

          conspiracy.   As these claims  amounted to $620,000,  he enhanced

          Aluko's base  offense level  by ten  levels pursuant to  U.S.S.G.

            2F1.1(b)(1)(K) (Nov. 1991) (ten level offense increase required

          for losses  between $500,000  and $800,000).    In addition,  the

          probation  officer concluded  that Aluko's  participation in  the

          scheme involved  more than  minimal planning.   Thus, he  further

          enhanced Aluko's offense level by two levels pursuant to U.S.S.G.

            2F1.1(b)(2) (Nov. 1991).5  Finally, the probation officer  also

          subtracted  two levels  for  acceptance of  responsibility.   The

          district court adopted the presentence report calculation.

____________________

          4  Both parties  agree that the 1991 sentencing  guidelines apply
          to this case.

          5  Section 2F1.1(b)(2) provides:

                      If the  offense involved . .  . more than
                      minimal  planning .  .  . increase  by  2
                      levels.

                                         -4-

At  sentencing, Aluko challenged the presentence report

          on two  grounds, both of which he revives in this appeal.  First,

          Aluko contends that the government established his involvement in

          only ten of  the one hundred  and twenty-four fraudulent  claims,

          and that  he can only be  held responsible for those  ten claims.

          He  asserts that  the  rest of  the  claims were  actions of  co-

          conspirators which were not  reasonably foreseeable to him.   See
                                                                        ___

          U.S.S.G.    1B1.3(a)(1),  Application  Note 1  (Nov.  1991)  (for

          sentencing  purposes, defendant  is accountable  for "conduct  of

          others  in  furtherance of  the  execution  of jointly-undertaken

          criminal   activity  that  was   reasonably  foreseeable  by  the
                               ___________________________________

          defendant") (emphasis added).

                    In  its  sentencing ruling,  the  district court  never

          discussed whether Aluko's co-conspirators' additional one hundred

          and  fourteen fraudulent  claims were  reasonably foreseeable  to

          Aluko.  The court simply concluded that Aluko

                      was a conspirator with two  other people.
                      He   was   an  important   part   of  the
                      conspiracy  regardless  of the  numerical
                      figures  involved in claims  filed, or in
                      amount of  money that he  received.   And
                      so,  he's  responsible   for  the   whole
                      conspiracy.  It's seldom that we find co-
                      conspirators who know  all facets of  the
                      operation.  They know they're involved in
                      a conspiracy and they're involved  at one
                      tier level or another and, therefore, are
                      integral parts and necessary parts of the
                      success of the whole conspiracy.

                      (sentencing hearing transcript at 14).

                    This language  suggests that once a  defendant plays an

          integral  role in a  conspiracy, he is  liable for co-conspirator

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acts  in  furtherance  of  the conspiracy,  regardless  of  their

          foreseeability.   While  this  language  correctly describes  the

          proper  standard for  a defendant's  criminal conviction  for co-
                                               ___________________

          conspirator acts, United States  v. Fusaro, 708 F.2d 17,  21 (1st
                            _____________     ______

          Cir.  1983),  it  does   not  correctly  describe  a  defendant's

          responsibility  for   these  actions  for   sentencing  purposes.
                                                __________________________

          U.S.S.G.    1B1.3(a)(1),  Application  Note 1;  United  States v.
                                                          ______________

          O'Campo, 973 F.2d 1015, 1025-26 n.11 (1st Cir. 1992).
          _______

                    We  might  in some  circumstances  treat  a finding  of

          foreseeability as inherent in  the nature of the conspiracy.   In

          this   case,  however,   it  appears   that  the   judge  thought

          foreseeability inherent  in all conspiracies.   This  is not  the
                                      ___

          law.

                    In addition, some of the co-conspirator acts presumably

          occurred before Aluko joined the conspiracy as he joined one year

          after  it  began.   By definition,  acts  that occurred  before a

          defendant enters  a conspiracy  cannot be foreseeable.   O'Campo,
                                                                   _______

          973 F.2d at 1026.

                    Accordingly, we vacate Aluko's sentence and remand  for

          a determination of which, if  any, of co-defendants' actions were

          reasonably  foreseeable  to  Aluko,6  and  for  re-sentencing  in

          accordance with that determination.

                    Second, Aluko argues that he played a  minimal or minor

          role in the conspiracy,  and thus deserved a downward  adjustment
                              
          ____________________

          6  We note that this determination should also address  the issue
          of  which co-conspirator conduct, if any, took place before Aluko
          joined the conspiracy.

                                         -6-

to his total  offense level pursuant  to U.S.S.G.   3B1.2(a)  and

          (b)  (Nov. 1991).7    We  first  note  that  defendants  are  not

          automatically entitled to  a downward adjustment, whatever  their

          role  in the crime.   United States v.  Valencia-Lucena, 925 F.2d
                                _____________     _______________

          506,  514 (1st  Cir.  1991).   Indeed, the  record  in this  case

          adequately supports the district court's denial of the reduction.

          Aluko indicated that his  involvement in the conspiracy  began on

          October 6, 1990.   He remained active in the  conspiracy until he

          was  arrested one  year later.   He was  directly involved  in at

          least  ten fraudulent  claims.   Ultimately, the  court concluded

          that Aluko was an integral part of the conspiracy and granted him

          no reduction.  We find no clear error in this determination.

          Appellant Balogun
          Appellant Balogun
          _________________

                    Before Balogun's sentencing, the government objected to

          his  presentence report,  claiming that  his total  offense level

          should  have  been  increased  two points  pursuant  to  U.S.S.G.

            3B1.1(c)  (Nov.  1991).8   Specifically, the  government argued
                              
          ____________________

          7  Section 3B1.2(a) provides:

                      If   the   defendant   was    a   minimal
                      participant  in  any  criminal  activity,
                      decrease by 4 levels.

             Section 3B1.2(b) provides:

                      If the defendant  was a minor participant
                      in  any criminal activity,  decrease by 2
                      levels. 

          8  Section 3B1.1(c) provides:

                      If  the  defendant   was  an   organizer,
                      leader,  manager,  or  supervisor in  any
                      criminal activity other than described in

                                         -7-

that  Balogun was  an "organizer, leader,  or supervisor"  of the

          conspiracy  for the  purposes of  that section.   The  sentencing

          judge accepted the government's representations and increased the

          total offense level from sixteen to eighteen.

                    Balogun  offers  two  principal  arguments  against the

          judge's calculation of his  sentence.  First, he argues  that the

          district   court   impermissibly  relied   on   the  prosecutor's

          statements  in  reaching  its   conclusion.    Balogun  does  not

          challenge  the  facts  at   issue;  however,  he  challenges  the

          application of   3B1.1(c) to these facts.

                    Application Note 3 of U.S.S.G.   3B1.1 counsels that in

          determining  whether  a defendant  is  an  organizer, leader,  or

          supervisor  pursuant  to   3B1.1(c),  the  court should  consider

          factors   including:     (1)  decision   making   authority;  (2)

          participation in the offense; (3) recruitment of accomplices; (4)

          claimed  right to a larger share of  the fruits of the crime; (5)

          degree of planning or organizing; (6) nature of illegal activity;

          and (7) degree of control over others.

                    The  undisputed facts  in  the present  case show  that

          Balogun  initiated the conspiracy with another co-conspirator; he

          received significantly more money from the conspiracy than Aluko;

          he used cars fraudulently registered to Aluko to stage accidents;

          and he paid  Aluko for his cooperation in the scheme.  We find no

          clear error in the  district court's conclusion that Balogun  fit

          the role of an organizer, leader, or supervisor.
                              
          ____________________

                      (a) or (b), increase by 2 levels.

                                         -8-

Second,  Balogun  argues that  the  sentence adjustment

          resulted in impermissible double  counting because in addition to

          the  increase for being an organizer,  supervisor, or leader, the

          district court also accepted the presentence report's enhancement

          of Balogun's sentence for more than minimal  planning pursuant to

          U.S.S.G.   2F1.1(b)(2).

                    In United States  v. Fuller, 897  F.2d 1217, 1222  (1st
                       _____________     ______

          Cir.  1990),  we reversed  an  enhancement  based on    3B1.1(c),

          noting  our concern  that  such an  enhancement  would result  in

          double  counting.  The sentencing  court in that  case based both

          its   3B1.1(c)  and its    2F1.1(b)(2) enhancements on  one fact:

          the quantity of marijuana involved.  See id.
                                               ___ __

                    Balogun argues that the sentencing judge considered the

          elaborate  nature of the scheme  in applying the  increase for an

          organizer, leader, or supervisor  even though that complexity was

          already  accounted   for  in  the  more   than  minimal  planning

          enhancement.   In support  of this contention,  Balogun notes the

          following statements by the sentencing judge.

                      . . . I'm  satisfied that Mr. Balogun and
                      Mr. [Oyelele] were the organizers of this
                      scheme.  They were the people who thought
                      this matter up, maybe with help of others
                      unknown, and  Aluko was  just one of  the
                      people who was initiated into the scheme,
                      to  be part of some facets of it.  So I'm
                                                         ______
                      satisfied that Balogun and [Oyelele] were
                      _________
                      organizers and leaders and supervisors of
                      this matter. . . .

                      This  was a fairly  elaborate scheme, one
                      that required a lot of planning and a lot
                      of organization, and  a lot of fraudulent
                      documents.    And,  therefore,  I  think,
                      under   the   circumstances,  the   total

                                         -9-

offense level should be 20. . . .  

                      (sentencing transcript at 9) (emphasis added).

          As we  see  it, this  language  shows that  the court  based  his

            3B1.1(c)  enhancement decision on  Balogun's initiation  of the

          scheme and recruitment  of Aluko,  not on the  complexity of  the

          scheme.   The judge's allusion  to the scheme's  elaborate nature

          simply  provided  further   superfluous  justification  for   the

          resulting   total  offense   level.     We   therefore  find   no

          impermissible double counting.9

                    We affirm Balogun's sentence in its entirety.

                    Affirmed in part; reversed and remanded in part.
                    _______________________________________________

____________________

          9   As an alternative  ground, we  note that as  Balogun did  not
          clearly raise this issue  in the district court, he  is precluded
          from raising it on appeal.  United States v. Ortiz, 966 F.2d 707,
                                      _____________    _____
          717 (1st Cir. 1992), cert. denied, 113 S. Ct. 1005 (1993).  
                               ____________

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