STEPHEN V. WILSON, District Judge.
A jury convicted Albert Robles on thirty counts
Between 1999 and 2001, Robles took contributions from Michael Klistoff, the owner of Klistoff & Sons Waste Company. Id. at 990. Klistoff hoped to gain access to the city's waste-hauling contracts. Id. And when the city's contract became available in 2001, Klistoff told Robles's longtime friend George Garrido that he wanted it. Id.
Before the city solicited proposals, Robles met with Klistoff and showed him the draft documents. Id. at 991. The draft proposal envisioned four companies providing different services, but Klistoff suggested that one company do it all. Id. Robles evidently agreed, and the final request called for a single company to haul all the city's waste. Id.
Klistoff & Sons submitted a bid. Id. Robles then tapped his friend, Louis Moret, as the city's bidding facilitator, telling him that Klistoff & Sons was his "horse in the race." Id. Still, Robles expressed concern to Moret that Klistoff might not be able to make a persuasive presentation to the contract selection committee. Id. So Moret recommended Ray Garubo as a consultant, whom Garrido soon after told Klistoff to hire. Id. Garubo became Klistoff's consultant, but Garrido paid Garubo's fees. Id.
Robles also provided Klistoff with other competitive advantages. He showed him the other bids, which were supposed to be confidential. Id. And he directed Moret to provide Garubo with the questions the committee would ask bidders, which were also supposed to be confidential. Id.
After all the bidders made oral presentations, the selection committee voted to negotiate only with Klistoff & Sons. Id. The city council approved the selection and awarded the $48 million contract to Klistoff's company. Id.
The government filed its original indictment in November 2004. Id. at 992. Robles proceeded to trial some time later under a second superseding indictment alleging twenty-one counts of honest services mail and wire fraud, four counts of money laundering, and five counts of bribery. Id. The indictment and jury instructions permitted the jury to convict Robles of honest services fraud under two different theories: (1) bribery and kickbacks or (2) failing to disclose conflicts of interests. Id. at 995-97. And the government's case rested on both, although the prosecutor emphasized Robles's undisclosed conflicts in his closing arguments. Id. at 996-97. The jury convicted Robles on all charges. Id. at 992. The Court sentenced him to ten years imprisonment. Id. Robles then appealed. Id.
During the pendency of Robles's appeal, the Supreme Court decided United States v. Skilling, 561 U.S. 358 (2009). Before then, honest services fraud could be based on either bribery or undisclosed conflicts of interest. Garrido, 713 F.3d at 993; United States v. Kincaid-Chauncey, 556 F.3d 923, 942 (9th Cir. 2009). Skilling changed that: honest services fraud only encompassed bribery and kickback schemes, the Supreme Court said, not failures to disclose conflicts of interest. 558 U.S. at 409-12; Garrido, 713 F.3d at 993-94.
This intervening change in the law rendered the Court's jury instructions erroneous. Garrido, 713 F.3d at 994-95. Even though there was "evidence in the record that could support a bribery or kickback conviction," the gravaman of the indictment, instructions, and prosecution's arguments was the nondisclosure theory, making it "impossible to conclude that the jury convicted Robles . . . based on [his] participation in either a bribery or kickback scheme instead of based on Skilling's unconstitutional failure to disclose a conflict of interest." Id. at 996-97. The Ninth Circuit consequently reversed Robles's honest services fraud convictions. Id. at 998.
The Ninth Circuit upheld Robles's bribery convictions though. Id. at 1002. In doing so, the Ninth Circuit pointed to the ample evidence supporting the jury's verdict:
Id. at 1000. The Ninth Circuit then rejected Robles's other legal argument, id. at 1000-02, and remanded the case for further proceedings consistent with its opinion, id. at 1002.
The government declined to retry Robles for honest services fraud due to the age of the case and the time Robles already served. Gov't's Sentencing Position, 1:24-28, ECF No. 418.
The reversal of Robles's honest services fraud convictions unbundled the Court's prior sentence. See United States v. Ruiz-Alvarez, 211 F.3d 1181, 1184 (9th Cir. 2000). Since the Ninth Circuit's remand was unlimited, the Court must repackage a de novo sentence in light of the entire record. See United States v. Matthews, 278 F.3d 880, 885-86 (9th Cir. 2002); United States v. Garcia-Guizar, 234 F.3d 483, 490-91 (9th Cir. 2000); United States v. Barron, 172 F.3d 1153, 1160 (9th Cir. 1999) (en banc); United States v. Ponce, 51 F.3d 820, 826 (9th Cir. 1995) (per curiam). Consequently, the Court must calculate Robles's Sentencing Guidelines range, consider the range, assess the factors outlined in 18 U.S.C. § 3553(a), arrive at an appropriate sentence, and explain the reasons for imposing the chosen sentence. United States v. Blinkinsop, 606 F.3d 1110, 1114 (9th Cir. 2010). The Court cannot presume the Guidelines range is reasonable. Id. And although the Court may exercise its discretion in tailoring a sentence, the ultimate punishment must be reasonable. Gall v. United States, 552 U.S. 38, 51 (2007). As a general rule, the Court uses a preponderance of the evidence standard when making factual findings. United States v. Dare, 425 F.3d 634, 642 (9th Cir. 2005).
Since the Court considers Robles's sentence upon an open record, it is not temporally circumscribed to the facts as they existed at the original sentencing hearing. See, e.g., Ponce, 51 F.3d at 826. And a de novo sentence includes a recalculation of Robles's criminal history in light of all relevant evidence. See id.; United States v. Romano, 749 F.Supp. 53, 57 (D. Conn. 1990) aff'd, 937 F.2d 54 (2d Cir. 1991).
Robles has three criminal convictions. He spent ten days in jail for a vehicle code violation in 1986. The age of this conviction, however, renders it irrelevant to Robles's criminal history score. U.S. Sentencing Guidelines Manual § 4A1.2(e)(3) (2000) [hereinafter USSG].
A court may impose a downward variance where the defendant's criminal history category "significantly over-represents the seriousness of a defendant's criminal history or the likelihood that the defendant will commit further crimes." USSG § 4A1.3. The Probation Department submits (and Robles does not object) that this case warrants such a departure. In essence, they contend that Robles had not incurred this conviction at the time of the original sentencing, so its inclusion would repunish him for the same conduct. But Robles "has no legitimate expectation of finality in the original sentence when he has placed those sentences in issue by direct appeal and has not completed serving a valid sentence." United States v. Andersson, 813 F.2d 1450, 1461 (9th Cir. 1987). The Court must consider the full record as it currently stands. Ponce, 51 F.3d at 826; see also United States v. Montalvo-Rodriguez, 540 F. App'x 339, 340-41 (5th Cir. 2013) (per curiam); United States v. Allen, 153 F.3d 1037, 1043 (9th Cir. 1998). And neither Robles nor the Probation Department have pointed to any evidence that Robles's criminal conduct was more innocuous than his past convictions suggest. See United States v. Sablan, 469 F. App'x 601, 603 (9th Cir. 2012). Thus, the Court has no reason to conclude that classifying Robles as a category II offender significantly over-represents the seriousness of his criminal history.
All parties agree that Robles's base offense level is 10. See USSG § 2C1.1. The question is how far the Court should adjust the base level.
A defendant's offense level is increased by four points if he was an organizer or leader of a criminal activity involving more than five participants. USSG § 3B1.1(a). Courts add two points if the scheme involved less than five people and is not "otherwise extensive." USSG § 3B1.1(c). The Probation Department and Robles contend that the initial bases for the organizer or leader enhancement were his honest services fraud convictions, which no longer exist. The government contends that there is sufficient evidence of Robles's organization and leadership role in the bribery scheme.
Robles participated in an organized bribery scheme: as the Ninth Circuit recounted, there was "ample evidence that Robles accepted Bribes from Klistoff with the intention to be influenced in connection with the waste-hauling contract." Garrido, 713 F.3d at 1000. Indeed, Robles "used his considerable influence exclusively for Klistoff's benefit" directly and indirectly — personally providing him with confidential information and dispatching his cronies to help Klistoff & Sons secure the contract. Id.
The first question, therefore, is whether the preponderance of evidence shows that Robles was an organizer or leader. The Sentencing Guidelines direct courts to consider the defendant's decision-making authority, the nature of his participation, the recruitment of accomplices, the claimed right to a larger share of the crime's fruits, the degree of planning or organization undertaken by the defendant, the nature and scope of the illegal activity, and the degree of control and authority wielded by the defendant. USSG § 3B1.1 app. n.4; United States v. Lopez-Sandoval, 146 F.3d 712, 717 (9th Cir. 1998); see also United States v. Brown, 771 F.3d 1149, 1158-59 (9th Cir. 2014) (requiring a finding that the defendant exercised some degree of control or organizational authority over others).
Robles was an organizer and leader under this definition. Robles was a direct participant in the scheme. Garrido, 713 F.3d at 1000 ("Robles showed Klistoff a draft request for the proposals for the contract. . . . Robles showed Klistoff the other companies' competing bids."). He directed others to perform certain functions. Id. ("Robles assigned his friend Moret to work as facilitator for the bidding process. . . . Robles requested that Moret recommend a consultant to assist Klistoff & Sons."). He vicariously recruited Garubo. Id. ("Robles requested that Moret recommend a consultant to assist Klistoff & Sons. . . . Klistoff & Sons hired [Moret's] recommended consultant."). And he constantly coordinated with his cronies. E.g., id. ("Robles communicated with Moret frequently."). Moreover, Robles was the one occupying office — the one with influence over the contract — and thus the indispensable cog in the bribery scheme. See id. at 989-990 ("Robles was Treasurer of the City of South Gate, California. . . . Klistoff agreed to make these contributions [to Robles's campaign] because he knew Robles had influence in South Gate and Klistoff was hoping to gain access to future waste-hauling contracts.").
The second component of this enhancement examines the number of participants. See USSG § 3B1.1. Under this enhancement, a participant is a person who is criminally responsible — i.e., an aider and abettor, a co-conspirator, or the like — regardless of whether he or she was convicted. USSG § 3B1.1(a) app. n.1.
According to the government, Robles's scheme included five people. Robles was the leader. Klistoff offered the bribes. Garrido, 713 F.3d at 990-91. Moret was Robles's appointed facilitator, channeling information and assistance to Klistoff. Id. Garubo served as Klistoff's consultant. Id. And Garribo paid Garubo's salary while serving as a conduit between Robles and Klistoff. Id.
Although each person participated in the scheme, there is insufficient evidence that Garubo was criminally responsible. To be an aider and abettor, a person must knowingly and intentionally aid and abet the principles in each essential element of the crime. United States v. Bancalari, 110 F.3d 1425, 1429 (9th Cir. 1997); see also 18 U.S.C. § 2. There is not enough evidence that Garubo knowingly and intentionally aided Robles in his bribery scheme. See 18 U.S.C. §§ 2, 666. Garubo took money from Garrido to consult for Klistoff & Sons, and he received confidential information that other bidders were not privy to. Garrido, 713 F.3d at 991, 1000. But there is no evidence that Garubo consulted in order to further Robles's plan. Garrido was also Klistoff's consultant, Garrido, 713 F.3d at 900, so Garubo may not have thought it odd to receive payment from him. And receiving confidential information through Moret is not enough to show Garubo was aware of and intended to aid Robles's corrupt scheme.
Thus, Robles is not subject to the full Section 3B1.1(a) enhancement. Rather, he was the organizer and leader of a four-person scheme, which is subject to a two-level adjustment. USSG § 3B1.1(c).
Although the preponderance of the evidence standard is generally appropriate, courts may apply a clear and convincing standard when the enhancement would have "an extremely disproportionate" effect on the sentence. United States v. Hopper, 177 F.3d 824, 733 (9th Cir. 1999). There is no rigid test for determining whether an adjustment's effect is extremely disproportionate. See Dare, 425 F.3d at 342. Rather, courts must consider several indicia:
Id. (citing United States v. Jordan, 256 F.3d 922, 928 (9th Cir. 2001)).
Here, the loss enhancement could have a significant impact. If the government prevails in imposing a thirteen level enhancement, Robles's Guidelines range would more than triple. See USSG § 5A. Without any loss enhancement, Robles faces a Guidelines range of 12-18 months imprisonment. With the government's proposed thirteen level increase, the guidelines sentence jumps to 63-78 months. Thus, the loss calculation in this case is the primary driver behind the Guidelines range — more than doubling the offense level and tripling the suggested sentence — and a clear and convincing standard ought to apply.
Since Robles's offense involved receiving bribes, his Guidelines range is subject to further enhancement based on the pecuniary loss associated with his crime. See USSG § 2C1.1(b)(2). The loss is the greatest among "the value of the payment, the benefit received or to be received in return for the payment, or the loss to the government from the offense." Id. Although the Court may not consider the benefit to an unrelated third party, the benefit need not flow directly to the defendant. United States v. Gillam, 167 F.3d 1273, 1279 (9th Cir. 1999). So for example, the amount assessed against a defendant who swayed a civil jury is the verdict's amount, not the bribe received. United States v. Muhammad, 120 F.3d 688, 700 (7th Cir. 1997). The amount assessed against government inspectors who smuggled prohibited products would be the importers' profits, not the amount of the bribes. Gillam, 167 F.3d at 1275-76, 1278-79.
The benefit received was the value provided to Klistoff deriving from the bribes paid to Garrido. See USSG § 2C1.1 app. n.2 ("The value . . . means the net value of such benefit.") (emphasis added); Gillam, 167 F.3d at 1278-79 (finding the value to be the bribing party's profits enabled by the bribed official's preferential treatment). Indeed, the Guidelines' commentary provides guidance for this scenario: "A $150,000 contract on which $20,000 profit was made was awarded in return for a bribe; the value of the benefit received is $20,000." USSG § 2C1.1 app. n.2. Thus, the value of the benefit received was the profit attributable to Robles's influence.
The government and Probation Department both calculate the value based on the value of Garrido's contract with Klistoff — the government using the contract's lifetime value, the Probation Department submitting the amount actually paid under the contract. These loss values, however, do not fit the Guidelines' paradigm. Garrido's contract may have been a byproduct of the bribery scheme — Klistoff employed Garrido in pursuit of his ultimate goal in the bribery scheme — but it was not the value to be received in return for the payments. That was the waste-hauling contract itself.
The government failed to offer evidence of the precise portion of the waste-hauling contract deriving from Robles's influence. Thus, the government failed to prove the value of Robles's aid by clear and convincing evidence.
As a result, the Court must use the value of the bribes themselves. USSG § 2C1.1(b)(2). It is undisputed (and well-established in the record) that Klistoff gave $22,898.78 worth of bribes to Robles. That corresponds to a four level increase. See § 2F.1.1(b)(1)(E).
Robles's criminal history category is II. His base offense level is 10. He is subject to a two-level increase as an organizer and leader as well as a four-level increase for the value of the bribes. His adjusted offense level is therefore 16. Consequently, Robles's Guidelines range is 24-30 months imprisonment. USSG § 5A.
The Court must consider the suggested range, but it is not presumptively reasonable. See United States v. Carty, 520 F.3d 984, 995-96 (9th Cir. 2008). Instead, the guidelines range is a starting point, and the Court considers the factors enumerated in 18 U.S.C. § 3553(a) to ensure the sentence is sufficient but not greater than necessary. See Kimbrough v. United States, 552 U.S. 85, 108 (2007). Any significant departure from the guidelines must be supported by sufficient justification. Gall, 552 U.S. at 46.
In a "mine-run" case, the Guidelines reflect Section 3553(a)'s considerations. See Rita v. United States, 551 U.S. 338, 351 (2007). This is not a mine-run case. An intervening change in the law invalidated some of Robles's convictions by injecting uncertainty into the jury's verdict. This doctrinal change, however, did not alter the culpability of Robles's conduct. Moreover, the Guidelines do not reflect the severity of Robles's offense, and the suggested sentence would not provide adequate deterrence.
First, the Guidelines sentence underestimates the amount of loss. The Guidelines were "clearly written with the assumption that the amount of loss could be ascertained." United States v. Hilgers, 560 F.3d 944, 947 (9th Cir. 2009). But precise calculation is not always possible, and a Guidelines sentence can therefore underappreciate the seriousness of the offense. See id. at 947-48. Here, the Court could only ascertain with particularity the value of the bribes Robles accepted. Given the size of the waste-hauling contract — $48 million — the loss calculation almost certainly undervalues the actual loss. Moreover, Robles's corrupt conduct reached other city projects and involved broader misuse of public funds. Garrido, 713 F.3d at 989-990, 997. Therefore, the loss calculation under the Guidelines does not track the seriousness of Robles's corruption. See 18 U.S.C. § 3553(a)(1); Hilgers, 560 F.3d at 947-48 (affirming a sentence almost three times the length of the guidelines because, in large part, the Guidelines did not reflect the loss to the victims).
Second, the Guidelines fail to account for a significant portion of Robles's culpable conduct. The government prosecuted Robles on two different theories of honest services fraud were available. Skilling found that only bribery and kickback schemes constituted honest services fraud. 558 U.S at 409-12. So the Ninth Circuit vacated Robles's honest services fraud: because the indictment, instructions, and argument had permitted conviction on either a constitutional or unconstitutional theory, there was insufficient certainty the jury found Robles guilty of a bribery and kickback scheme beyond a reasonable doubt. Garrido, 713 F.3d at 996-98.
Id. at 997. The Court can consider this evidence. See United States v. Watts, 519 U.S. 148, 156 (1997); United States v. Virrey-Camez, 585 F. App'x 481(9th Cir. 2014); United States v. Mercado, 474 F.3d 654, 656 (9th Cir. 2007); United States v. Lipman, 133 F.3d 726, 729-30 (9th Cir. 1998). And the Court agrees with the Ninth Circuit — more than a preponderance of the evidence shows Robles committed honest services fraud even after Skilling. See Garrido, 713 F.3d at 997.
Third, a Guidelines range sentence would not provide adequate deterrence. Because Robles's conduct evinced extensive and pernicious abuse of his public office, a 24-30 month sentence is insufficient to promote adequate respect for the law. Corruption — an anathema to a democratic self-government — is far too prevalent. See, e.g., Matthew J. Parlow, Revolutions in Local Democracy? Neighborhood Councils and Broadening Inclusion in the Local Political Process, 16 Mich. J. Race & L. 81, 86-87 (2010); Aaron R. Petty, How Qui Tam Actions Could Fight Public Corruption, 39 U. Mich. J.L. Reform 851, 851-53, 857-63 (2006); Alan Vinegrad, Government Corruption and Civil Rico: Providing Compensation for Intangible Losses, 58 N.Y.U. L. Rev. 1530, 1530-32 (1983). Robles solicited and took bribes, gave kickbacks, and misused the authority invested in him by the public. On the unusual facts of this case, the Guidelines only account for a sliver of the malfeasance supported by the record; the Court, however, cannot ignore Roble's widespread abuses while tailoring his sentence under Section 3553(a).
The Court would be inclined to reimpose the original 120 month sentence because Robles is equally culpable today; however, new considerations render that sentence greater than necessary. Evidence of post-sentence rehabilitation is relevant to the Court's evaluation of Section 3553(a)'s factors. See Pepper v. United States, 131 S.Ct. 1229, 1242 (2011). Robles, to his credit, exhibits indicia of rehabilitation. He has complied with the terms of his sentence for the past several years. He has returned to gainful employment. And he has complied with the terms of his supervised release while on bond. Given Robles's reintegration into society and his apparent ability to live a law-abiding life, sending him to prison would be excessive at this time. Moreover, the length of time Robles has already served is substantial, and it is sufficient to deter him and others from committing such offenses. Therefore, the Court concludes that the amount of time Robles has served — namely, 84 months imprisonment — coupled with 3 years of supervised release will effectuate the purposes of Section 3553(a).
For the foregoing reasons, and in full consideration of the factors laid out in 18 U.S.C. § 3553(a), the Court finds that a sentence of 84 months imprisonment and 3 years supervised release is sufficient but not greater than necessary.
