United States v. Sihai Cheng

849 F.3d 516, 2017 WL 781484, 2017 U.S. App. LEXIS 3728
CourtCourt of Appeals for the First Circuit
DecidedMarch 1, 2017
Docket16-1144P
StatusPublished
Cited by1 cases

This text of 849 F.3d 516 (United States v. Sihai Cheng) is published on Counsel Stack Legal Research, covering Court of Appeals for the First Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Sihai Cheng, 849 F.3d 516, 2017 WL 781484, 2017 U.S. App. LEXIS 3728 (1st Cir. 2017).

Opinion

HOWARD, Chief Judge.

Sihai Cheng challenges the reasonableness of the 108-month incarcerative sen-fence he received for his role in an illicit scheme to export pressure transducers— sensitive goods with nuclear applications— from.the United States to Iran through the People’s Republic of China. We affirm.

I.

Between 2009 and 2011, Cheng caused at least 1,185 MKS Instruments, Inc. (“MKS”) Model 722A pressure transducers to be exported from the United States to Iran via China. Cheng placed numerous orders for the pressure transducers, participated in fraudulently obtaining U.S. export licenses for them, and was involved in stripping them of their MKS serial numbers and repackaging them in order to conceal the fact that they were being shipped in violation of U.S. export laws and the U.S. embargo against Iran. Cheng engaged in this course of conduct despite knowing that the MKS pressure transducers would be used at Iran’s uranium enrichment facilities to advance the country’s nuclear weapons program. Further, at various points, he expressed animosity towards the United States and invoked the specter of “WORLD WAR THREE” in an apparent effort to drum up sales.

After being extradited from the United Kingdom to the United States, Cheng pleaded guilty to six counts of a ten-count indictment, including: conspiracy to commit export violations in violation of 50 U.S.C. § 1705; conspiracy to smuggle goods in violation of 18 U.S.C. § 371; and four counts of unlawfully exporting U.S. goods to Iran in violation of 50 U.S.C. § 1705.

The parties and the Probation Office agreed that U.S.S.G. § 2M5.1 was the applicable Guideline and that — after applying *518 a three-level reduction for acceptance of responsibility under § 3E1.1 — the total offense level was 23. When combined with Cheng’s Criminal History Category of I, this yielded an advisory Guidelines sentencing range of forty-six to fifty-seven months’ imprisonment.

During Cheng’s sentencing hearing, however, the district court upwardly departed six levels based on Application Note 2 to U.S.S.G. § 2M5.1. Application Note 2 provides that an upward departure may be warranted where the following factors are “present in an extreme form:” “the degree to which the violation threatened a security interest of the United States, the volume of commerce involved, the extent of planning or sophistication, and whether there were multiple occurrences.” U.S.S.G. § 2M5.1 cmt. (n.2). The district court explained that “[a]ll of those factors” were present to an extreme degree and observed that “[i]t’s almost as if someone were writing [Application Note 2] for this case.” The court therefore determined that the total offense level — after the six-level upward departure — was 29 and imposed a sentence of 108 months, the upper end of the Guidelines sentencing range. .

This appeal timely followed.

II.

On appeal, Cheng’s overarching claim is that this 108-month incarcerative sentence is unreasonable. Specifically, he argues: that the sentencing court erred in departing from the Guidelines under Application Note 2; that his sentence was disproportionate to sentences in similar and related cases; and that his sentence was greater than necessary to achieve the sentencing goals of 18 U.S.C. § 3553(a).

Claims of sentencing error trigger a two-step inquiry in this court: “we first determine whether the sentence imposed is procedurally reasonable and then determine whether it is substantively reasonable.” United States v. Clogston, 662 F.3d 588, 590 (1st Cir. 2011). Cheng objects only to the substantive reasonableness of his sentence. 1 Therefore, our review is for abuse of discretion, taking into account the totality of the circumstances. United States v. Zavala-Marti, 715 F.3d 44, 50 (1st Cir. 2013). Although Cheng did not object to the substantive reasonableness of his sentence below, we will assume arguendo that our review is nevertheless for abuse of discretion. Cf. United States v. Nuñez, 840 F.3d 1, 7 (1st Cir. 2016) (assuming without deciding that review of unpreserved claims of substantive unreasonableness is for abuse of discretion).

Considering. Cheng’s three arguments in turn, we find them unavailing.

A.

Cheng contends that the district court erred in upwardly departing under *519 Application Note 2 because (1) neither planning nor sophistication were present in extreme form and (2) the security interests of the United States had already been taken into account in calculating his base offense level.

The district court properly considered the entire scope of the illegal scheme, see U.S.S.G. § 1B1.3, and could reasonably conclude from the record that Cheng was involved in an illegal procurement network that was both carefully planned and highly sophisticated, as it spanned three countries, involved more than five people, generated thousands of communications, and included circuitous shipping routes and other considerable efforts to evade detection. There was no abuse of discretion, and we need go no further on this particular point.

Cheng argues, however, that even if planning and sophistication were present in extreme form, inappropriate double counting is afoot. Yet, contrary to Cheng’s claims, the fact that the security interests of the United States are considered in determining the appropriate base offense level under U.S.S.G. § 2M5.1 does not mean that those security interests cannot also be used in assessing whether an upward departure is justified under Application Note 2. We have said that “[s]ince double counting is often perfectly proper, the guidelines themselves are the most helpful aid in the task of separating permissible double counting from its impermissible counterpart.” United States v. Lilly, 13 F.3d 15, 19 (1st Cir. 1994) (citation omitted). “The Sentencing Commission has not been bashful about explicitly banning double counting in a number of instances. We believe the Commission’s ready resort to explicitly stated prohibitions against double counting signals that courts should go quite slowly in implying further such prohibitions where none are written.” Id. at 19-20 (collecting cases).

The Guidelines do not prohibit double-counting under U.S.S.G. §-2M5.1. To the contrary, the Guidelines explicitly instruct courts to consider the degree to which an export violation threatened national security in determining (1) the base offense level for export violations, (2) the appropriate sentence within the Guideline range, and (3) the applicability of a departure. U.S.S.G. § 2M5.1.

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Related

United States v. Sihai Cheng
392 F. Supp. 3d 141 (District of Columbia, 2019)

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Bluebook (online)
849 F.3d 516, 2017 WL 781484, 2017 U.S. App. LEXIS 3728, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-sihai-cheng-ca1-2017.