United States v. Paredes

• Court: Court of Appeals for the Tenth Circuit
• Decided: August 22, 2006
• Docket: 05-4081
• Status: Published

Opinion

F I L E D United States Court of Appeals Tenth Circuit PUBLISH August 22, 2006 UNITED STATES CO URT O F APPEALS Elisabeth A. Shumaker Clerk of Court TENTH CIRCUIT

U N ITED STA TES O F A M ER ICA,

Plaintiff - Appellee v. No. 05-4081

ED W ARD LEO NARD O PAREDES, also known as Ed Paredes, also known as Eddie Perales,

Defendant - Appellant.

A PPE AL FR OM T HE UNITED STATES DISTRICT COURT FOR T HE DISTRICT OF UTAH (D .C . N O. 2:04-C R-150-D AK )

Submitted on the briefs:

Scott C. W illiams, Salt Lake City, Utah, for D efendant - Appellant.

Paul M . W arner, United States Attorney, and Diana Hagen, Assistant United States Attorney, Salt Lake City, Utah, for Plaintiff - Appellee.

Before BR ISC OE and HA RTZ, Circuit Judges, and KR IEGER , District Judge. *

HA RTZ, Circuit Judge.

* The Honorable M arcia S. Krieger, United States District Judge for the District of Colorado, sitting by designation. Edward Paredes challenges his sentence of 37 months’ imprisonment,

arguing that the district court erred (1) in applying a Sentencing Guidelines

enhancement for relocation of a fraudulent scheme, (2) imposing an unreasonable

sentence, and (3) treating the Guidelines as mandatory. W e affirm.

I. FACTS

M r. Paredes was indicted on M arch 17, 2004, in the United States District

Court for the District of Utah on one count of conspiracy, see 18 U.S.C. § 371,

ten counts of bank fraud, see 18 U.S.C. § 1344, four counts of wire fraud, see

18 U.S.C. § 1343, and four counts of mail fraud, see 18 U.S.C. § 1341. All

charges arose from the following multistate scheme operating between April and

August 2001: M r. Paredes and various coconspirators recruited others, primarily

from New York, to come W est for w ork. Upon arriving in one of the cities in

which the scheme operated, the recruits were taken by M r. Paredes to obtain local

state identification cards using their true identities and then to local banks, where

they were instructed by M r. Paredes to open checking accounts and request

expedited checks using their real names and false addresses. The accounts were

opened with initial deposits of substantial amounts of cash provided by

M r. Paredes. The recruits were then instructed to purchase electronic equipment

at local retailers using checks written on the accounts. Before the checks cleared,

however, the money was withdrawn, victimizing the retailers. Each recruit was

paid $1,000. The scheme operated in Nevada, Utah, Idaho, and W ashington.

-2- M r. Paredes was convicted by a jury on all counts. The presentence report

(PSR ) used the 2000 version of the United States Sentencing Guidelines (USSG )

applicable at the time of the offenses. It calculated M r. Paredes’s offense level as

follow s:

Base Offense Level under U SSG § 2F1.1(a): 6 Enhancement based on amount of loss under U SSG § 2F1.1(b)(1)(I): 8 Enhancement for his role in the offense under U SSG § 3B1.1(a): 4 Enhancement for relocation of the offense under U SSG § 2F1.1(b)(6)(A): 2 Enhancement for multiple victims under U SSG § 2F1.1(b)(2): 2 TOTAL: 22

(Section 2F1.1 was deleted in the November 2001 version of the Guidelines; its

provisions were renumbered and consolidated with § 2B1.1.) At sentencing on

April 4, 2005, the district court adopted the PSR’s calculation with a single

change: It adjusted the proposed enhancement under § 3B1.1(a) down from four

to three because it concluded that M r. Paredes was more of a manager of the

scheme than its leader. Combined with a criminal-history category of I, the

offense level of 21 produced a G uidelines range of 37 to 46 months, and the court

sentenced him at the bottom of that range.

II. D ISC USSIO N

A. A pplication of U SSG § 2F1.1(b)(6)(A) / § 2B1.1(b)(9)(A)

M r. Paredes first argues that the district court committed an error of law in

applying an enhancement under USSG § 2F1.1(b)(6)(A) to his sentence. Because

the identical language now appears in § 2B1.1(b)(9)(A), we will refer to the new

-3- section numbering. W e review the district court’s factfinding for clear error and

its legal interpretation of the Guidelines de novo. United States v. Bedford, 446

F.3d 1320, 1324 (10th Cir. 2006).

Section 2B1.1(b)(9)(A) provides for a two-level enhancement “[i]f the

defendant relocated, or participated in relocating, a fraudulent scheme to another

jurisdiction to evade law enforcement or regulatory officials.” M r. Paredes

argues that this enhancement did not apply because (1) there was no evidence that

the scheme was relocated for the purpose of evading law enforcement; (2)

M r. Paredes did not himself relocate; (3) there was no evidence that M r. Paredes

was the “driving force” in relocating the scheme; and (4) M r. Paredes did not

“attempt[] to disguise his identity or manipulate records of his activities.” Aplt

Br. at 17. W e disagree.

First, M r. Paredes argues that there was no evidence that the scheme was

relocated from one jurisdiction to another for the purpose of evading law

enforcement. But Jose Vergara-Diaz, a recruit who participated in the scheme,

testified at trial about an occasion when the participants, including M r. Paredes,

and a U-Haul full of fraudulently obtained goods moved from Utah to Idaho

because Utah became “hot” after one of the recruits was arrested. This testimony

suffices to establish that the relocation was “to evade law enforcement.”

M r. Paredes also argues that the district court erred in applying

§ 2B1.1(b)(9)(A) to him because he did not himself actually relocate. Throughout

-4- the scheme, he contends, he remained a resident of New York City. He relies on

an Eighth Circuit opinion, United States v. Smith, 367 F.3d 737 (8th Cir. 2004),

vacated on other grounds, 543 U .S. 1103 (2005), which set out a three-prong test

for application of § 2B1.1(b)(9)(A): “(1) the defendant relocated from one

jurisdiction to another; (2) the fraudulent scheme moved with the defendant; and

(3) the defendant intended to evade law enforcement or regulatory officials.” Id.

at 740. In Smith, however, neither the fact that the defendant relocated nor the

fact that the scheme relocated with him were in dispute.

W e disagree with Smith’s dictum that the first prong, on which M r. Paredes

relies, is required by the language of the Guidelines subsection. The Guidelines

language— “[i]f the defendant relocated, or participated in relocating, a fraudulent

scheme to another jurisdiction to evade law enforcement or regulatory

officials”— clearly refers to the relocation of the scheme only, not the relocation

of the defendant himself. Smith misreads “the defendant relocated” as an

independent phrase, when the immediately following language “or participated in

relocating” makes clear that the verb relocated is a transitive verb whose direct

object is a fraudulent schem e. One can participate in a scheme’s relocation

without relocating oneself, and the district court was entitled to conclude, based

on the evidence, that that is what occurred in this case. The district court did not

err.

-5- M r. Paredes’s final two arguments— that there was no evidence that he was

the “driving force” behind the relocation or that he changed his identity or

attempted to conceal his activities— find no support in the language of the

provision. Section 2B1.1(b)(9)(A ) requires only that the defendant participated

in relocating the scheme; he did not have to be the “driving force” behind the

relocation for the enhancement to apply. And, as noted above, the government

presented evidence that M r. Paredes participated in the relocation of this scheme

from Utah to Idaho. Similarly, although evidence that he concealed his identity

or activities may have been relevant to a showing that the relocation was for the

purpose of evading law enforcement, § 2B1.1(b)(9)(A) contains no requirement of

concealment, other than the relocation itself.

B. Reasonableness

After United States v. Booker, 543 U.S. 220 (2005), we review sentences

for reasonableness. See United States v. Galarza-Payan, 441 F.3d 885, 887 (10th

Cir. 2006). Reasonableness review “necessarily encompasses both the

reasonableness of the length of the sentence, as well as the method by which the

sentence was calculated.” United States v. Kristl, 437 F.3d 1050, 1055 (10th Cir.

2006). A sentence imposed within a properly calculated Guidelines range is

presumptively reasonable, but a defendant may rebut that presumption with a

showing that the sentence is unreasonable under the factors set out in 18 U.S.C.

§ 3553(a). Id.

-6- M r. Paredes argues that his sentence, which is at the bottom of the

applicable Guidelines range, is unreasonable because the district court

overemphasized the Guidelines and “failed to consider 18 U.S.C. § 3553— either

expressly or implicitly.” Aplt Br. at 20. But the court need not recite on the

record each of the factors in § 3553(a): “W e do not require a ritualistic

incantation to establish consideration of a legal issue, nor do we demand that the

district court recite any magic w ords to show us that it fulfilled its responsibility

to be mindful of the factors that Congress has instructed it to consider.” United

States v. Lopez-Flores, 444 F.3d 1218, 1222 (10th Cir. 2006) (internal quotation

marks omitted). The district court must, however, “provide sufficient reasons to

allow meaningful appellate review of [its] discretionary sentencing decision[],”

United States v. Sanchez-Juarez, 446 F.3d 1109, 1117 (10th Cir. 2006), and

where a defendant has raised a nonfrivolous argument that the § 3553(a) factors warrant a below-Guidelines sentence and has expressly requested such a sentence, we must be able to discern from the record that the sentencing judge did not rest on the guidelines alone, but considered whether the guidelines sentence actually conforms, in the circumstances, to the statutory factors,

id. (internal quotation marks, brackets, and ellipsis omitted).

At M r. Paredes’s sentencing hearing the district court reviewed the

Guidelines calculation, adjusting one point downward from the recommendation

in the PSR. Both the defense and the prosecution were allowed to present

arguments, and the court explained that it was adopting a sentence at the lower

-7- end of what it determined to be the applicable Guidelines range. Although the

court did not specifically mention the factors in § 3553(a), neither did

M r. Paredes make a “nonfrivolous argument that the § 3553(a) factors warrant[ed]

a below -Guidelines sentence” that would have triggered the district court’s

obligation to address the factors on the record. See id. at 1117. All the

arguments presented during the sentencing hearing related to the application of

the Guidelines and to M r. Paredes’s general character as “a good, productive,

hardworking, God-fearing student.” R. Vol. VII at 12. M r. Paredes argues on

appeal that the materials presented to the district court implicated several of the

statutory factors, but the defense did not mention at sentencing any of the

nonguidelines § 3553(a) factors or make any argument that the statute justified a

below-Guidelines sentence. M r. Paredes has not overcome the presumption that

the court’s sentence at the bottom of the applicable Guidelines range was

reasonable.

C. Constitutional Booker error

M r. Paredes’s final challenge to his sentence is that the district court

committed constitutional error under Booker. “A district court commits

constitutional Booker error when it applies the Guidelines in a mandatory fashion,

makes factual findings (other than the fact of prior convictions), and imposes a

sentence above the maximum that would apply in the absence of such findings.”

-8- United States v. Clark, 415 F.3d 1234, 1238 (10th Cir. 2005) (internal quotation

marks and emphasis omitted).

In sentencing M r. Paredes, the district court found that (1) the intended loss

of the scheme exceeded $200,000 but was less than $350,000; (2) the offense

involved more than minimal planning or a scheme to defraud more than one

victim; (3) M r. Paredes relocated, or participated in relocating, the scheme to

evade law enforcement; and (4) he was an organizer or leader of a criminal

activity that involved five or more participants. The only issue is whether the

district court used these findings to enhance M r. Paredes’s sentence mandatorily.

M r. Paredes points to the district court’s comment that “I think otherwise

I'm basically stuck with the guidelines.” App. Vol. VII at 24. On the other hand,

the district court did mention its discretion: “I think that's the best I can do under

the law, despite his pleas. I mean, that's an exercise of discretion. That's right on

the line, I think, even now.” Id. W e generally assume that the district court

knows the law and applies it correctly. See U nited States v. Rose, 185 F.3d 1108,

1110-11 (10th Cir. 1999). Because counsel for both parties briefed the district

court on the implications of Booker and the Supreme Court’s opinion was the

subject of extensive comment within the judiciary, we will not interpret the

court’s imprecise comments on the extent of its discretion as blatant disregard of

Booker. W e are not persuaded that the district court failed to recognize that the

Guidelines are advisory. W e have held that it is not error for the district court to

-9- give them “heavy weight.” United States v. Terrell, 445 F.3d 1261, 1265 (10th

Cir. 2006).

III. C ON CLU SIO N

W e AFFIRM the sentence imposed by the district court.

-10-