Filed: Jan. 09, 2017
Latest Update: Mar. 03, 2020
Summary: Case: 16-40222 Document: 00513826679 Page: 1 Date Filed: 01/09/2017 IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT United States Court of Appeals Fifth Circuit No. 16-40222 FILED January 9, 2017 UNITED STATES OF AMERICA, Lyle W. Cayce Clerk Plaintiff - Appellee v. EUNEISHA HEARNS, Defendant - Appellant Appeal from the United States District Court for the Eastern District of Texas Before WIENER, CLEMENT, and HIGGINSON, Circuit Judges. WIENER, Circuit Judge: Defendant-Appellant Euneis
Summary: Case: 16-40222 Document: 00513826679 Page: 1 Date Filed: 01/09/2017 IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT United States Court of Appeals Fifth Circuit No. 16-40222 FILED January 9, 2017 UNITED STATES OF AMERICA, Lyle W. Cayce Clerk Plaintiff - Appellee v. EUNEISHA HEARNS, Defendant - Appellant Appeal from the United States District Court for the Eastern District of Texas Before WIENER, CLEMENT, and HIGGINSON, Circuit Judges. WIENER, Circuit Judge: Defendant-Appellant Euneish..
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Case: 16-40222 Document: 00513826679 Page: 1 Date Filed: 01/09/2017
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
No. 16-40222 FILED
January 9, 2017
UNITED STATES OF AMERICA, Lyle W. Cayce
Clerk
Plaintiff - Appellee
v.
EUNEISHA HEARNS,
Defendant - Appellant
Appeal from the United States District Court
for the Eastern District of Texas
Before WIENER, CLEMENT, and HIGGINSON, Circuit Judges.
WIENER, Circuit Judge:
Defendant-Appellant Euneisha Hearns was convicted of one count of
conspiracy to commit bank fraud. The district court attributed to Hearns loss
amounts from nine additional transactions that allegedly occurred within the
same scheme to defraud mortgage lenders when calculating her advisory range
under the Sentencing Guidelines. The court concluded that her advisory
Guidelines range was 46 to 57 months in prison and sentenced her to 46
months imprisonment followed by 5 years supervised release. The district
court also held Hearns jointly and severally liable with her co-conspirators for
restitution totaling $180,235.45 and ordered her to pay a special
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No. 16-40222
assessment of $100. We affirm Hearns’s conviction, vacate her sentence, and
remand for resentencing.
I. FACTS AND PROCEEDINGS
Hearns was a mortgage loan officer who was charged in a one-count
amended second superseding indictment (“the indictment”) with conspiracy to
commit bank fraud, in violation of 18 U.S.C. § 1349. As part of the conspiracy,
Hearns made materially false statements on prospective buyers’ loan
applications to help them obtain loans for which they did not qualify. In June
2008, a co-conspirator referred a prospective buyer who was interested in
purchasing property at 4006 Brownstone Ct., Dallas, Texas (“the Brownstone
Property”) to Hearns to obtain a mortgage loan. Despite knowing that the
buyer did not have enough money to make a down payment on the Brownstone
Property and likely would not qualify for the loan, Hearns prepared and
submitted a loan application with materially false statements on his behalf. As
a result, Countrywide Bank, FSB (“Countrywide”) provided the buyer with a
loan to purchase the Brownstone Property. The buyer purchased the
Brownstone Property, but he ultimately defaulted on the loan and the bank
foreclosed on the property.
The indictment charged Hearns with conspiring to knowingly execute a
scheme to defraud Countrywide “[f]rom [o]n or about June 11, 2008, . . .
through on or about July 1, 2008.” At the conclusion of a four-day trial, the jury
convicted Hearns of one count of bank-fraud conspiracy. The presentence
report (“PSR”) prepared after trial attributed to the conspiracy a total loss of
$865,940.18, which included $180,235.45 for the Brownstone Property plus
loss amounts related to nine other properties. Based on the total loss amount,
Hearns’s base offense level was 21, pursuant to United States Sentencing
2
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No. 16-40222
Guidelines (“USSG”) § 2B1.1 and § 2X1.1. 1 Her offense level was increased by
two levels for “abus[ing] a position of public or private trust,” pursuant to
USSG § 3B1.3, for a total offense level of 23. With Hearns’s criminal history
category of I, her sentencing range was 46 to 57 months. 2
Hearns objected to the PSR, contending that the loss figure should have
been limited to $180,235.45 for the Brownstone Property, which would have
reduced her base offense level from 21 to 17. 3 The district court overruled
Hearns’s objection at the sentencing hearing and ruled that the total loss of
$865,940.18 was attributable to the conspiracy and was foreseeable by Hearns.
She was sentenced to 46 months imprisonment followed by 5 years supervised
release. The district court also held Hearns jointly and severally liable with
her co-conspirators for restitution totaling $180,235.45 and ordered her to pay
a special assessment of $100. Hearns timely appealed.
II. ANALYSIS
Hearns asserts on appeal that (1) her conviction violated the Ex Post
Facto Clause of the U.S. Constitution, (2) the court constructively amended the
indictment by not requiring the jury to find that the defrauded institution was
a “mortgage lending business,” and (3) the court incorrectly determined the
amount of loss for which Hearns was responsible.
1 All references to the Sentencing Guidelines are to the 2015 edition.
2 U.S. SENTENCING GUIDELINES MANUAL ch. 5, pt. A (U.S. SENTENCING COMM’N
2015).
U.S. SENTENCING GUIDELINES MANUAL § 2B1.1(a)(1), (b)(1)(F) (U.S. SENTENCING
3
COMM’N 2015). With the two-level increase under USSG § 3B1.3, Hearns’s total offense level
would have been 19, and her sentencing range would have been 30 to 37 months. U.S.
SENTENCING GUIDELINES MANUAL ch. 5, pt. A (U.S. SENTENCING COMM’N 2015).
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A. Ex Post Facto Challenge
Hearns argues that her conviction violates the Ex Post Facto Clause of
the U.S. Constitution because Countrywide was not a “financial institution” as
statutorily defined at the time of her offense conduct, so “the conduct for which
she was convicted was not a crime at the time she engaged in the conduct.”
Because Hearns did not raise this argument in the district court, we review it
for plain error. 4 “Plain error exists if (1) there is an error, (2) the error is
plain, . . . (3) the error affect[s] substantial rights and (4) the error seriously
affect[s] the fairness, integrity or public reputation of judicial proceedings.” 5
The Constitution provides that “[n]o . . . ex post facto [l]aw shall be
passed.” 6 A law violates this clause “if it (1) punishes as a crime an act
previously committed which was not a crime when done; (2) makes more
burdensome the punishment for a crime after it has been committed; or
(3) deprives a defendant of any defense available according to the law at the
time the charged act was committed.” 7
The indictment charged Hearns with conspiracy to commit bank fraud
against Countrywide from June 11, 2008, through July 1, 2008. In 2008, 18
U.S.C. § 1344 made it a crime to “knowingly execute[], or attempt[] to execute,
a scheme or artifice . . . (1) to defraud a financial institution; or (2) to obtain
any of the moneys, funds, credits, assets, securities, or other property owned
by, or under the custody or control of, a financial institution, by means of false
4 United States v. Hickman, 331 F.3d 439, 445 (5th Cir. 2003).
5United States v. Gordon, 838 F.3d 597, 604 (5th Cir. 2016) (alterations in original)
(quoting United States v. Garcia-Carrillo,
749 F.3d 376, 378 (5th Cir. 2014) (per curiam)).
6 U.S. CONST. art. I, § 9, cl. 3.
7 Hickman, 331 F.3d at 445.
4
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or fraudulent pretenses, representations, or promises.” 8 “It is the financial
institution itself . . . that is the victim of the fraud the statute proscribes.” 9
Title 18 of the United States Code provided nine definitions of “financial
institution” in 2008. 10 Hearns insists that the government relied on a tenth
definition of “financial institution”—“a mortgage lending business”—that was
not added until 2009. 11
The government responds on appeal that it used the definition of
“financial institution” found in 18 U.S.C. § 20(1) at the time of Hearns’s
charged conduct: “an insured depository institution (as defined in section
3(c)(2) of the Federal Deposit Insurance Act).” Section 3(c)(2) of the Federal
Deposit Insurance Act defined “insured depository institution” as “any bank or
savings association the deposits of which are insured by the [Federal Deposit
Insurance] Corporation.” 12
Although the indictment identified Countrywide as “a residential
mortgage lender,” it also defined Countrywide as “a financial institution”
whose “deposits were insured by the Federal Deposit Insurance Company,”
thus satisfying the definition of “financial institution” at the time of the offense
conduct. 13 At trial, the government presented evidence to show that
8 18 U.S.C. § 1344 (West 2008). The text of 18 U.S.C. § 1344 has not changed since
2008.
9 United States v. Saks, 964 F.2d 1514, 1518 (5th Cir. 1992).
10 18 U.S.C. § 20 (West 2008).
11 See United States v. Grasso, 724 F.3d 1077, 1089 n.13 (9th Cir. 2013) (“In 2009,
Congress amended 18 U.S.C. § 20(1), which supplies the definition of ‘financial institution’
for § 1344, to cover ‘mortgage lending businesses’ . . . . This amendment applies prospectively
. . . .” (citation omitted)); 18 U.S.C. § 20(10) (West 2010).
12 12 U.S.C. § 1813(c)(2) (West 2008).
See 18 U.S.C. § 20(1) (West 2008) (defining “financial institution” as “an insured
13
depository institution (as defined by section 3(c)(2) of the Federal Deposit Insurance Act)”).
5
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Countrywide satisfied this definition. 14 Hearns did not present evidence to the
contrary or otherwise challenge that Countrywide was insured by the Federal
Deposit Insurance Company at trial or at sentencing.
At the close of the evidence, the district court instructed the jury that the
government could establish bank fraud under 18 U.S.C. § 1344 in either one of
two ways: (1) to hold Hearns guilty of bank-fraud conspiracy under § 1344(1),
the jury must find, among other factors, that “Countrywide, FSB, was a wholly-
owned subsidiary of Bank of America, a financial institution”; (2) to hold
Hearns guilty of bank-fraud conspiracy under § 1344(2), the jury must find
that “Countrywide Bank, FSB, was a wholly-owned subsidiary of Bank of
America, a financial institution insured by the Federal Deposit Insurance
Corporation.” 15 The district court never instructed the jury that it had to find
14The vice president and business support manager of Bank of America, which later
acquired Countrywide, testified as follows:
Q: [In June of 2008], was Countrywide Bank, FSB, a federally insured
financial institution?
A: Yes.
Q: Their accounts were insured by the [Federal Deposit Insurance
Corporation]; is that correct?
A: Yes.
15 Curiously, the reference to Bank of America also appears in both the government’s
and Hearns’s proposed jury instructions. As the government concedes, however, the record
reflects that Bank of America did not acquire Countrywide until after Hearns completed her
offense conduct.
Also, the government’s proposed jury instructions contained the definition of
“financial institution” found in 18 U.S.C. § 20(1) in 2008: “an institution that is insured by
the Federal Deposit Insurance Corporation.” Although the government included this
definition in the context of proposed instructions regarding a later-dismissed money-
laundering count under 18 U.S.C. § 1956, the same definitions of “financial institution,”
found in 18 U.S.C. § 20, applied to both the money-laundering count under 18 U.S.C. § 1956
and the bank-fraud conspiracy count under 18 U.S.C. §§ 1344, 1349. See 18 U.S.C. § 20 (West
2008) (defining the term “financial institution” “[a]s used in this title”). The district court,
however, did not include this definition in its instructions to the jury.
6
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that Countrywide was a “mortgage lending business” pursuant to the
definition of “financial institution” added in 2009.
Hearns fails to show that the definition of “financial institution” added
in 2009 was applied retroactively, 16 and the record demonstrates that the
government and the district court used the term “financial institution” as it
was defined in 2008. Hearns thus fails to demonstrate any ex post facto error
in her conviction.
B. Constructive Amendment of the Indictment
Hearns claims that the district court constructively amended the
indictment by failing to instruct the jury that it must find that Countrywide
was a “mortgage lending business.” “[A]n action of either the judge or
prosecutor [that] allows the jury to convict the defendant upon a factual basis
that effectively modifies an essential element of the offense charged constitutes
an improper constructive amendment and is grounds for reversal.” 17
The indictment charged Hearns with conspiracy to commit bank fraud
against Countrywide and defined it as “a financial institution” whose “deposits
were insured by the Federal Deposit Insurance Company.” As discussed above,
the government was relying on one of the nine definitions of “financial
institution” set forth in 18 U.S.C. § 20 in 2008—namely, “an insured depository
institution.” “Residential mortgage lender” was not a statutory definition of
“financial institution” at the time of Hearns’s offense conduct. The district
court did not err when it did not instruct the jury that it must find that
Countrywide is a “residential mortgage lender.”
16See Ortiz v. Quarterman, 504 F.3d 492, 499 (5th Cir. 2007) (“Under the Ex Post
Facto Clause, [the appellant] must prove that the law, retroactively applied to him, caused
him some disadvantage.”).
17 United States v. Cooper, 714 F.3d 873, 878 (5th Cir. 2013) (alterations in original)
(internal quotation marks omitted).
7
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C. Loss Amount
Hearns contends that the district court erred procedurally in
determining that the loss amount for which she was responsible totaled
$865,940.18, thereby miscalculating her Sentencing Guidelines advisory
range. We agree.
1. Standard of Review
We review factual findings related to a district court’s loss calculations
under the Sentencing Guidelines for clear error and that court’s calculation
methodology de novo. 18 A relevant-conduct determination is a finding of fact. 19
“A sentence will be upheld unless it was imposed in violation of law, was an
incorrect application of the sentencing guidelines, or is outside the range of the
applicable sentencing guideline.” 20 “Failure to object to either the PSR or the
district court’s sentence,” however, “results in review for plain error.” 21
The parties dispute whether Hearns preserved this challenge. “There is
‘[n]o bright-line rule . . . for determining whether a matter was raised below.’” 22
“[I]f a party wishes to preserve an argument for appeal, the party must press
and not merely intimate the argument during the proceedings before the
district court. An argument must be raised to such a degree that the district
18United States v. Minor, 831 F.3d 601, 607 (5th Cir. 2016); see United States v. Ocana,
204 F.3d 585, 588 (5th Cir. 2000).
19 United States v. Ekanem, 555 F.3d 172, 175 (5th Cir. 2009).
20 Ocana, 204 F.3d at 588.
21Id.; see United States v. Garcia-Perez, 779 F.3d 278, 281 (5th Cir. 2015) (“When a
defendant objects to his sentence on grounds different from those raised on appeal, we review
the new arguments raised on appeal for plain error only.” (quoting United States v. Medina–
Anicacio,
325 F.3d 638, 643 (5th Cir. 2003))).
22 United States v. Brown, 561 F.3d 420, 435 n.12 (5th Cir. 2009) (alterations in
original) (quoting Castillo v. Cameron Cty.,
238 F.3d 339, 355 n.21 (5th Cir. 2001)).
8
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court has an opportunity to rule on it.” 23 “The raising party must present the
issue so that it places the opposing party and the court on notice that a new
issue is being raised.” 24
Hearns objected to the PSR, claiming that the probation officer “provided
contradictory information with regard to the total loss amount deemed
attributable to his client ($865,940.18) and the amount of restitution owed by
his client.” Hearns argued that the loss figure should have been limited to the
loss associated with the Brownstone Property, or $180.235.45, which would
have reduced her base offense level from 21 to 17. 25 At the sentencing hearing,
Hearns’s attorney addressed her objection: “We would ask that the base level
be reduced to 17. We would base that on the fact that Ms. Hearns was convicted
for the charge on the 4006 Brownstone property. The loss amount was
approximately $180,000. We would ask that that be used as the amount to
determine the calculation.”
The probation officer responded to Hearns’s objection to the PSR, noting
that the total loss amount was the result of relevant conduct and thus was
appropriately used to calculate Hearns’s offense level pursuant to USSG
§ 1B1.3(a)(1)(B). At the sentencing hearing, in response to Hearns’s objection,
the Assistant United States Attorney stated that the fraud related to the nine
additional properties was “relevant conduct and . . . part of the same course of
23Dallas Gas Partners, L.P. v. Prospect Energy Corp., 733 F.3d 148, 157 (5th Cir. 2013)
(quoting Keelan v. Majesco Software, Inc.,
407 F.3d 332, 340 (5th Cir. 2005)); see also Garcia-
Perez, 779 F.3d at 282 (“The ‘objection must be sufficiently specific to alert the district court
to the nature of the alleged error and to provide an opportunity for correction.’” (quoting
United States v. Neal,
578 F.3d 270, 272 (5th Cir. 2009))).
24Kelly v. Foti, 77 F.3d 819, 823 (5th Cir. 1996) (quoting Portis v. First Nat’l Bank,
34
F.3d 325, 331 (5th Cir. 1994)).
25Hearns’s base offense level would be 7, pursuant to USSG § 2B1.1(a)(1), plus an
additional 10 levels for a loss greater than $150,000, pursuant to USSG § 2B1.1(b)(1)(F), as
opposed to a 14-level increase for a loss greater than $550,000 pursuant to § 2B1.1(b)(1)(H).
9
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conduct,” language found in § 1B1.3. The district court overruled Hearns’s
objection, concluding that the total loss amount “ha[d] to do with the amount
attributable to . . . [the] conspiracy.” The district court did not use the term
“relevant conduct,” but it noted that the nine other transactions were
“foreseeable” to Hearns as part of the conspiracy, a factor considered in a
relevant-conduct determination under § 1B1.3(a)(1)(B)(iii). The court also
adopted the factual findings and Guidelines applications contained in the PSR,
which relied on § 1B1.3(a)(1)(B) when attributing the loss amounts for the nine
other properties to Hearns and her co-conspirators. The probation officer’s
response to Hearns’s objection to the PSR and the exchange at the sentencing
hearing reflect that both the government and the district court understood
Hearns’s challenge to address whether the alleged fraud related to the nine
additional properties qualified as relevant conduct under the Guidelines. 26
Hearns’s challenge to the PSR, which was addressed at the sentencing
hearing, was therefore sufficient to put the government and the district court
on notice that Hearns was raising a relevant-conduct challenge and “to permit
the district court to rule on [her objection].” 27 We review Hearns’s challenge for
clear error.
26 See Ocana, 204 F.3d at 589 (finding that, “[w]hile [the defendant] did not specifically
cite to the USSG section which the PSR applied,” she made “a general objection that notified
the court of her disagreement” and thus “sufficiently raised the issues which she
now appeals”).
27See In re Liljeberg Enters., Inc., 304 F.3d 410, 427 n.29 (5th Cir. 2002) (noting that
an argument is preserved “if the argument on the issue before the district court was sufficient
to permit the district court to rule on it”); see also
Ocana, 204 F.3d at 589 (“The purpose of
requiring defendants to make timely objections to the PSR and actual sentence is ‘founded
upon considerations of fairness to the court and to the parties and of the public interest in
bringing litigation to an end after fair opportunity has been afforded to present all issues of
law and fact.’” (quoting United States v. Ruiz,
43 F.3d 985, 988 (5th Cir. 1995))).
10
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2. Whether the District Court Clearly Erred
“The sentencing judge is in a unique position to assess the evidence and
estimate the loss based upon that evidence.” 28 “A district court
may . . . exercise wide evidentiary latitude at sentencing and may look to the
whole conspiracy to determine whether the acts of others were reasonably
foreseeable.” 29 But the district court “must still make specific findings as to the
scope of that conspiracy.” 30 “These findings need not be expressly made, but
the meaning of the [district] court’s findings must be clear.” 31 “We will not
upset these findings unless they are implausible in light of the record as
a whole.” 32
The loss amount “need not be determined with precision,” but “to satisfy
th[e] clear error test all that is necessary is that the finding be plausible in
light of the record as a whole.” 33 “Before a court may attribute losses to a
defendant’s fraudulent conduct, there must be some factual basis for the
conclusion that those losses were the result of fraud.” 34 We generally consider
the PSR “reliable evidence for sentencing purposes.” 35 “In making its factual
findings for sentencing, a district court may adopt the findings of the PSR
without additional inquiry if those facts have an evidentiary basis with
United States v. Cooks, 589 F.3d 173, 185 (5th Cir. 2009) (quoting United States v.
28
Holbrook, 499 F.3d 466, 468 (5th Cir. 2007)).
29 United States v. Mateo Garza, 541 F.3d 290, 293 (5th Cir. 2008).
30 Id.
31 United States v. Hammond,
201 F.3d 346, 351 (5th Cir. 1999).
32 Mateo Garza, 541 F.3d at 293.
33 United States v. Reasor, 541 F.3d 366, 369 (5th Cir. 2008) (internal quotation marks
omitted).
United States v. Bernegger, 661 F.3d 232, 242 (5th Cir. 2011) (per curiam) (quoting
34
United States v. Randall, 157 F.3d 328, 331 (5th Cir. 1998)).
35 Reasor, 541 F.3d at 369 (internal quotation marks omitted).
11
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sufficient indicia of reliability and the defendant does not present rebuttal
evidence or otherwise demonstrate that the information is materially
unreliable.” 36 The defendant has the burden of showing that the information
in the PSR is materially unreliable. 37 “If the factual recitation [in the PSR]
lacks sufficient indicia of reliability, then it is error for the district court to
consider it at sentencing—regardless of whether the defendant objects or offers
rebuttal evidence.” 38
The district court adopted the factual findings and undisputed Guideline
applications contained in the PSR and concluded that “the information
contained in the presentence report has sufficient indicia of reliability to
support its probable accuracy.” The PSR relied on USSG § 1B1.3(a)(1)(B) to
consider the loss amounts related to the nine additional properties in
calculating Hearns’s base offense level. Under § 1B1.3(a)(1)(B), “a defendant
can be liable for conduct that is (1) within the scope of the jointly undertaken
criminal activity, (2) in furtherance of that criminal activity, and (3) reasonably
foreseeable in connection with that criminal activity.” 39
36 United States v. Ford, 558 F.3d 371, 377 (5th Cir. 2009) (per curiam) (quoting United
States v. Valles,
484 F.3d 745, 759 (5th Cir. 2007)).
37 Id.
38United States v. Zuniga,
720 F.3d 587, 591 (5th Cir. 2013) (per curiam) (alteration
in original) (quoting United States v. Harris,
702 F.3d 226, 231 (5th Cir. 2012)); see also
United States v. Windless,
719 F.3d 415, 420 (5th Cir. 2013); United States v. McGee, 559 F.
App’x 323, 327 n.17 (5th Cir.) (per curiam), cert. denied,
135 S. Ct. 130 (2014).
United States v. Gonzales, 841 F.3d 339, 359 (5th Cir. 2016) (internal quotation
39
marks omitted) (quoting U.S. SENTENCING GUIDELINES MANUAL § 1B1.3(a)(1)(B) (U.S.
SENTENCING COMM’N 2015)). Specifically, § 1B1.3(a)(1) provides as follows:
Unless otherwise specified, (i) the base offense level where the guideline
specifies more than one base offense level, (ii) specific offense characteristics
and (iii) cross references in Chapter Two, and (iv) adjustments in Chapter
Three, shall be determined on the basis of the following:
12
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The PSR explained as follows: “The Government has identified 10
properties [including the Brownstone Property] that involved fraud in the
mortgage loan process. Government records reflect that with respect to these
properties, . . . Hearns [and her co-conspirators] were all involved in the
scheme to defraud.” The PSR otherwise provided no information or evidence to
support the loss amounts or Hearns’s involvement in the other transactions.
The government presented evidence with respect to three of these properties
at trial, but the remaining six properties were not mentioned either at trial or
at sentencing. 40 Nothing in the record reflects when the six remaining
transactions occurred, whether criminal activity was associated with the
transactions, or whether Hearns was involved in them. 41 The facts contained
(A) all acts and omissions committed, aided, abetted,
counseled, commanded, induced, procured, or willfully caused by the
defendant; and
(B) in the case of a jointly undertaken criminal activity (a
criminal plan, scheme, endeavor, or enterprise undertaken by the
defendant in concert with others, whether or not charged as a
conspiracy), all acts and omissions of others that were—
(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;
that occurred during the commission of the offense of conviction, in
preparation for that offense, or in the course of attempting to avoid
detection or responsibility for that offense[.]
These six properties are 1610 Jensen Ct., Denton, Texas; 611 Oriole Blvd. #2401,
40
Duncanville, Texas; 611 Oriole Blvd. #2402, Duncanville, Texas; 611 Oriole Blvd. #2403,
Duncanville, Texas; 611 Oriole Blvd. #2404, Duncanville, Texas; and a duplex at 1464 and
1466 Brook Meadow Circle, Lancaster, Texas.
41 We also note that § 1B1.3(a)(1) requires that the relevant conduct “occur[] during
the commission of the offense of conviction, in preparation for that offense, or in the course
of attempting to avoid detection or responsibility for that offense,” and we have explained
that this provision can temporally limit the application of § 1B1.3(a)(1). See, e.g., United
States v. Barraza, 655 F.3d 375, 385 (5th Cir. 2011) (“[S]eparate acts or conduct that did not
occur during the commission of the presently charged offense may not be relevant conduct
13
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in the PSR regarding these six properties lack an evidentiary basis with
sufficient indicia of reliability. “Although a PSR may be considered as evidence
by the court when making sentencing determinations, bare assertions made
therein are not evidence standing alone.” 42
On this record, the district court clearly erred when it relied on the PSR
to include the loss amounts from the six properties in its calculation of Hearns’s
base offense level. We therefore vacate Hearns’s sentence and remand for
resentencing. Of course, on remand, the district court might reach the same
conclusion regarding relevant conduct and the loss amount that it did initially
and re-enter the same sentence. 43
[under § 1B1.3(a)(1)].”); United States v. Fowler, 216 F.3d 459, 461–62 (5th Cir. 2000) (finding
that the defendant’s receipt of “other sadistic images” did not constitute relevant conduct
under § 1B1.3(a)(1) because, while “[t]he electronic mailing of the image that was the basis
of the count of conviction occurred at a discrete moment,” the defendant’s “receipt of the other,
sadistic images did not occur ‘during the commission of the offense of conviction’” and because
“there was no proof that the sadistic images were part of preparing for the offense of
conviction or avoiding detection of the crime”). Neither the PSR nor the district court
explained whether these transactions occurred during the commission of the offense of
conviction—here, “[f]rom [o]n or about June 11, 2008, . . . through on or about July 1, 2008”—
in preparation for the offense of conviction, or in the course of attempting to avoid detection
or responsibility for that offense.
By contrast, § 1B1.3(a)(2) does not contain the same temporal limitation as Subsection
(a)(1). Subsection (a)(2) applies to “all acts and omissions described in [Subsection (a)(1)] that
were part of the same course of conduct or common scheme or plan as the offense of
conviction.” Thus, conduct undertaken in the commission of separate conspiracies to defraud
various victims at different times would qualify as relevant under (a)(2) as long as the
separate conspiracies were part of the same course of conduct, common scheme, or plan as
the offense of conviction. See, e.g., United States v. Hinojosa, 484 F.3d 337, 341–42 (5th Cir.
2007); United States v. Payne,
226 F.3d 792, 796 (7th Cir. 2000). Notably, in oral argument,
the government commendably conceded that this legal error—that is, the district court’s
application of Subsection (a)(1) rather than (a)(2)—would control.
42Bernegger, 661 F.3d at 242 (internal quotation marks omitted); see
Zuniga, 720 F.3d
at 591 (“[B]ald, conclusionary statements in a PSR are not sufficiently reliable.” (internal
quotation marks omitted)).
43 See United States v. Locke, 643 F.3d 235, 246 (7th Cir. 2011) (“[W]e acknowledge
that the district court might find—based upon sufficient evidence presented during
resentencing—the conduct in the unconvicted counts relevant to [the defendant’s] sentencing.
It could then state its findings with specificity and, presumably, enter the same sentence we
14
Case: 16-40222 Document: 00513826679 Page: 15 Date Filed: 01/09/2017
No. 16-40222
III. CONCLUSION
We affirm Hearns’s conviction, vacate her sentence, and remand to the
district court for resentencing consistent with this opinion.
vacate today.”); see also United States v. Marmolejo, 139 F.3d 528, 530–31 (5th Cir. 1998)
(holding that “[t]he only issues on remand properly before the district court are those issues
arising out of the correction of the sentence ordered by this court” and clarifying that the
district court on remand may “gather[] relevant facts and evidence on the specific and
particular issues heard by the appeals court and remanded for resentencing”).
If on remand the district court concludes that any defrauding allegedly related to
these six properties does not constitute relevant conduct, the total loss amount would be
$418,802.79, and Hearns’s base offense level would be 19, pursuant to USSG § 2B1.1(a)(1)
and (b)(1)(G). With the two-level increase under § 3B1.3, Hearns’s total offense level would
be 21, and her sentencing range would be 37 to 46 months. U.S. SENTENCING GUIDELINES
MANUAL ch. 5, pt. A (U.S. SENTENCING COMM’N 2015).
15
