ELLEN SEGAL HUVELLE, District Judge.
On September 5, 2008, a federal grand jury indicted Kevin Ring, a lobbyist who worked with Jack Abramoff, for payment of an illegal gratuity (Count II), honest services wire fraud (Counts III, IV, V, VI, VII, and VIII), and conspiracy (Count I). A jury trial that commenced on September 1, 2009 ultimately resulted in a hung jury
Before the Court is the matter of calculating the appropriate sentence for defendant under the Sentencing Guidelines. The parties' respective positions could hardly differ more dramatically. By the government's calculation, Ring's total offense level is 37, corresponding to a Guidelines sentence of 210 to 262 months.
Before the Court can proceed to sentencing, it must resolve this stark conflict between the parties, for in the wake of United States v. Booker, 543 U.S. 220, 125 S.Ct. 738, 160 L.Ed.2d 621 (2005) and Gall v. United States, 552 U.S. 38, 128 S.Ct. 586, 169 L.Ed.2d 445 (2007), a set of procedural requirements have developed that govern sentencing. "A district court begins by calculating the appropriate Guidelines range, which it treats as `the starting point and the initial benchmark' for sentencing." United States v. Akhigbe, 642 F.3d 1078, 1084 (D.C.Cir.2011) (quoting Gall, 552 U.S. at 49, 128 S.Ct. 586). "Then, after giving both parties an opportunity to argue for whatever sentence they deem appropriate," the court considers all of the sentencing factors listed in 18 U.S.C. § 3553(a)
Given the complexity of the sentencing issues that confront the Court, it ordered the parties to brief the disputed factual
Ring asserts that he is being penalized for exercising his Sixth Amendment right to trial, arguing that the government should be bound by the prior methodology it has consistently used for calculating the Guidelines sentences of the other Greenberg Traurig lobbyists/coconspirators who were also convicted of honest services fraud. The Court will address this issue first, and then will turn to the host of remaining disputes regarding the calculation of defendant's Guidelines sentence, which include:
This prosecution arose out of the Jack Abramoff lobbying scandal that first came to light in early 2004. Between 2005 and 2009, Abramoff, along with his fellow lobbyists from Greenberg Traurig—Michael Scanlon, Neil Volz, Todd Boulanger, and Tony Rudy—pled guilty to participating in an influence-peddling and bribery scheme whereby they provided travel, meals, tickets to sporting events, and other things of value to federal public officials, with the expectation that these officials would, in turn, perform official acts on behalf of the lobbyists' clients on an "as-needed" basis. Some of the public officials, including Ann Copland (staffer to Sen. Thad Cochran), John Albaugh (chief of staff to Rep. Ernest Istook), Mark Zachares (aide to Rep. Don Young), former Congressman Robert Ney, and William Heaton (Ney's chief of staff), also pled guilty to honest services fraud for their role in the scheme.
The Guidelines calculations for each of these defendants are detailed in Appendix A. Each of the public official defendants pled guilty to honest services fraud, and for each, the government entered into a plea agreement stipulating to an applicable base offense level under the 2003 Guidelines
Each of the Greenberg Traurig lobbyist defendants (except for Scanlon and Abramoff) entered into similar plea agreements with the government, whereby Guideline § 2C1.7 and an 8-level "elected official" enhancement was used, resulting in a total offense level of 18 prior to adjustments, including a 3-point reduction for acceptance of responsibility. Of these, only Volz has been sentenced as of this date—the government recommended a sentence "at the low end" of 4-10 months of home confinement. Without taking into account the 5K1.1 letter they are expected to receive for their cooperation, Rudy and Boulanger have agreed to Guidelines calculations that expose them to 24-30 months incarceration and 18-24 months incarceration, respectively.
Scanlon and Abramoff faced higher sentencing ranges under the Guidelines, having been convicted of multiple counts including a kickback conspiracy to defraud Abramoff's clients known as "Gimme Five." Scanlon's Guidelines range (including a 3-level reduction for acceptance of responsibility) was 51-63 months, while Abramoff faced a range of 108-135 months. The government recommended a sentence of 24 months for Scanlon and an effective sentence of 39 months for Abramoff,
As Ring points out, the government now advocates for a Guidelines methodology that it has never asked for before (and that the Court has not previously employed) with respect to calculating the sentences of his co-conspirators. The government urges the Court to apply the cross reference found at § 2C1.7(c)(4) and sentence defendant under the bribery guideline, § 2C1.1—something it has done only for Abramoff and Scanlon (who, unlike Ring, were actually charged with conspiracy to commit bribery in violation of 18 U.S.C. § 201(b)). (See Dkt. No. 257 at 2.) For each of the other co-conspirators charged with honest services fraud, the government advocated for a Guidelines calculation pursuant to § 2C1.7.
Defendant's position is that the government is retaliating against him for exercising his Sixth Amendment right to trial. It is easy to see why such an inference might be justified, since the government's new methodology for calculating defendant's offense level (prior to adjustments for role in the offense and obstruction of justice) would result in a Guidelines sentence of between 121 and 151 months—nearly nine years longer than it would otherwise have been. Even assuming that the § 2C1.1 cross reference applies, the use of the 20-level "value of benefits received" enhancement in lieu of the 8-level "elected official" enhancement translates into an eight-year difference in the ultimate sentence. Indeed, the government's position is that Ring's total offense level (37) should be the highest of all participants in the conspiracy, despite the fact that Abramoff (whose offense level was 34, not including acceptance of responsibility) and Scanlon (whose offense level was 27, not including acceptance of responsibility) were clearly more culpable.
The notion that an ostensibly objective system of sentencing guidelines can produce such wildly varying results for essentially the same offense conduct is deeply troubling, and indeed, as Ring argues, if the Guidelines are "subject to manipulation" in this fashion, it would mock the very consistency the Guidelines were meant to impose on such elementary concepts as "offense level." (Dkt. No. 258 at 5.)
The government's first line of response is to argue that Ring is not similarly situated to his co-conspirators, because "he is the only lobbyist who went to trial and chose not to plead guilty and cooperate with the United States."
The leniency that results from such cooperation can be dramatic. Jack Abramoff's offense level prior to accounting for acceptance of responsibility under § 3E1.1 was 34, corresponding to a Guidelines range of 151-188 months.
The government's argument that it has unlimited freedom to afford "leniency" to those who plead guilty and that this does not amount to a penalty for the exercise of a defendant's constitutional right to stand trial is unpersuasive. For, as even the government admits, what it cannot do is "calculate the Guidelines based on whether or not someone went to trial." (Tr. 8/30/11 6:17-18.) Employing a dramatically different
If accepted, the government's position would undermine the very purpose of the Guidelines, and give prosecutors even more power over sentencing than is already the case. "Congress enacted the sentencing statutes in major part to achieve greater uniformity in sentencing, i.e., to increase the likelihood that offenders who engage in similar real conduct would receive similar sentences." Booker, 543 U.S. at 255, 125 S.Ct. 738 (Remedial Op., Breyer, J.). The Guidelines vindicate this principle in a number of ways. Judges are required and empowered to take into account not only the charges actually brought by the government, but any relevant conduct (including uncharged or acquitted conduct) occurring during the commission of the charged offense as well. U.S.S.G. § 1B1.3. In addition, the Guidelines require plea agreements to "set forth the relevant facts and circumstances of the actual offense conduct and offender characteristics," id. § 6B1.4(a)(1), and forbid parties from "stipulat[ing] to misleading or non-existent facts" in plea agreements, "even when both parties are willing to assume the existence of such `facts' for purposes of the litigation." Id. § 6B1.4 cmt.; accord id. § 6B1.4(a)(2) (stipulations of fact accompanying plea agreements "shall ... not contain misleading facts"). Arguably, this system does not permit the calculation of offense levels using one methodology for defendants who plead guilty, but a dramatically different one for the "only lobbyist who went to trial and chose not to plead guilty and cooperate with the United States." (Tr. 8/30/11 5:21-22.) For to do so raises the specter that a defendant has been impermissibly retaliated against for exercising his constitutional right to stand trial. See Mazzaferro, 865 F.2d at 460 ("The law is clear beyond peradventure that a sentence based on retaliation for exercising the constitutional right to stand trial is invalid."); United States v. Rolfsema, 468 F.3d 75, 79 (1st Cir.2006) ("[T]he Government may not vindictively seek to raise a defendant's sentence solely because of that defendant's exercise of a constitutional right."); Carter, 560 F.3d at 1121 (government may afford leniency to those who enter pleas "so long as there is no indication the defendant has been retaliated against for exercising a constitutional right").
But, as explained herein, the Court need not decide whether the granting leniency in this fashion represents an unconstitutional burden on defendant's right to trial by jury. Since the hearing before the Court, the government has somewhat retreated from what one might view as an absolutist position, and now argues that Ring is dissimilar from his co-conspirators "both factually and legally." (Dkt. No. 274 at 6-7.) Specifically, the government argues that between the time the plea agreements were signed with Ring's co-conspirators (late 2005 through 2009) and now, there have been significant changes both in the controlling law, see Skilling v. United States, ___ U.S. ___, 130 S.Ct. 2896, 177 L.Ed.2d 619 (2010), as well as in the relevant facts learned by the government over the course of the investigation.
Ring argues that the government was free to advocate in favor of the bribery cross-reference for Albaugh, who the government argued had breached his plea agreement and whose sentence occurred post-Skilling. (Dkt. No. 258 at 2-3; Dkt. No. 274 at 5.) The fact that it did not, according to defendant, belies the government's claim that it has changed its sentencing methodology due to the Skilling decision. Likewise, Ring notes that the government did not seek to enhance Albaugh's sentence pursuant to § 2C1.1(b)(2)(A) by referencing the total amount of appropriations sought by Ring, despite the fact that these amounts were known to the government at that time and specified in the factual basis for Albaugh's plea. (See Albaugh Factual Proffer ¶ 12(i).) In addition, defendant contends that the government was aware of all relevant facts at least by the time Abramoff was sentenced in August 2008, when it stated to the Court that it remained "confident that [Abramoff's] plea agreement and factual basis reflect substantially all of the fraudulent conduct which we have found Abramoff to have engaged in." United States v. Abramoff, 06-001 (D.D.C. Aug. 27, 2008), Dkt. No. 33 at 9.
The first issue is simple to resolve: the law surrounding honest services fraud changed dramatically in June 2010 when the Supreme Court decided Skilling. (See infra Part II.A.) This change in the law justifies the use of the § 2C1.1 cross-reference, as well as the decision by the government to argue in favor of the 20-level "value of the benefits received" enhancement previously unavailable to it under § 2C1.7.
The fact that the government did not adopt this position during Albaugh's sentencing
The government's second argument is highly relevant to its decision to argue in the alternative for a 16-level enhancement for defendant based on the value of the bribes, rather than employing the 8-level elected-official enhancement it had so consistently utilized in the past. (See supra Part I; Attachment A). Because the Court must use the greater of the two enhancements, prior representations by the government that the 8-level elected-official enhancement applied or was "greater than any adjustment which might otherwise have applied based on value under § 2C1.7(b)(1)(A)" (see Albaugh Plea Agreement ¶ 8(a); Boulanger Plea Agreement ¶ 9(a)), necessarily mean that the government once believed the ascertainable value of corrupt payments in this conspiracy totaled less than $120,000.
The fact that the government may properly take into account new facts it has learned in the years since Ring's co-conspirators plead guilty does not mean that it may engage in fact bargaining. As previously explained, the Guidelines provide prosecutors with ample tools to afford leniency to those who have demonstrated the attributes on which leniency is based. See Carter, 560 F.3d at 1120-21. The government may not, however, mislead the court, even if it has promised a defendant it will do so as a reward for pleading guilty or for cooperation.
Our system of sentencing is in part designed to ensure that sentences are based upon "the real conduct that underlies the crime of conviction." Booker, 543 U.S. at 250, 125 S.Ct. 738 (Remedial Op., Breyer, J.). "One of the principal reasons for this,
Ultimately, however, attempting to resolve the question of precisely what facts the prosecutors knew at the time of the plea raises serious separation-of-powers and prosecutorial discretion concerns. See, e.g., Scott, 631 F.3d at 406-07. Moreover, such an exercise would pose challenging evidentiary issues given the number of prosecutors and defendants involved in this conspiracy. In criminal cases involving plea agreements, the Court and the probation office are frequently at the mercy of the parties to disclose and explain the relevant facts. As a result, the Court may not always get a full picture of the defendant's offense conduct, nor does it have the means to learn the information on its own.
But, as will be clear from Part II.C, infra, the Court need not decide these difficult and troubling issues. First, as explained herein, the Court concludes that the 8-level enhancement for offenses involving an elected or high-level decision-making official is the correct method for determining "loss," due to the failure of the government to sustain its burden for either a 20-level "value of benefits received" enhancement or a 16-level "value of the bribes" enhancement. Second, even if the Court could validly consider disparity among convicted co-conspirators at the Guideline calculation stage, it is not necessary to do so since even the government concedes that such disparity is among the permissible factors that may be considered under 18 U.S.C. § 3553(a). (Dkt. No. 274 at 3-4.) See United States v. Martinez, 610 F.3d 1216, 1228 (10th Cir.2010) ("[A]lthough § 3553(a) does not require a consideration of co-defendant disparity, ... it is not improper for a district court to undertake such a comparison....") (citations omitted); United States v. Wills, 476 F.3d 103, 110 (2d Cir.2007) ("Under the advisory Guidelines scheme explicated in Booker, it is appropriate for a district court, relying on its unique knowledge of the totality of circumstances of a crime and its participants, to impose a sentence that would better reflect the extent to which the participants in a crime are similarly (or dissimilarly) situated and tailor the sentences accordingly."); United States v. Lazenby, 439 F.3d 928, 934 (8th Cir.2006) (extreme disparity among co-defendants fails to serve the legislative intent reflected in § 3553(a)(6)). Thus, it is a subject that can be addressed more fully with respect to the final sentence.
Finally, the Court notes that the government could easily have avoided much of this dispute by recommending that the Court apply the Guidelines in a manner consistent with Ring's co-defendants. A remarkably similar situation arose just last month in United States v. DiMasi. Salvatore F. DiMasi, the former Speaker of the Massachusetts House of Representatives, was convicted earlier this year of receiving a stream of bribes and kickbacks in exchange for official acts. DiMasi's co-defendant pled guilty before trial, and in his plea agreement the government took the position that the Court should measure "value" under § 2C1.1(b)(2) by looking to the value of the bribes and kickbacks ($915,000). In its sentencing memorandum filed just last month in DiMasi's case, the government recognized that the correct measure of "value" under the Guidelines was actually the "benefit received" in exchange for the bribes ($3,691,000). Despite this fact, the government urged the Court to use the lower value of the bribes and kickbacks "for the sake of fairness and
Since the Court does not rely on defendant's argument that the government is bound to calculate the Guidelines range consistent with the methodology it has previously used for the coconspirators who entered pleas, it will now address the specific disputes over the calculation of defendant's Guidelines sentence.
Defendant was convicted of three counts of honest services fraud (as well as one count of conspiracy to commit honest services fraud). The applicable provision under the 2003 Guidelines for honest services fraud is U.S.S.G. § 2C1.7 (Fraud Involving Deprivation of the Intangible Right to the Honest Services of Public Officials; Conspiracy to Defraud by Interference with Governmental Functions). The government argues, however, that the Court should apply the cross-reference at § 2C1.7(c)(4),
Defendant contends that the cross-reference in § 2C1.7(c)(4) applies "on its face" only "to public corruption cases in which the government has charged multiple offenses in separate counts," including the scenario when "a jury convicts of honest services fraud and bribery." (Dkt. No. 258 at 6.) Thus, defendant argues that the cross-reference does not apply here because the government did not charge, nor did the jury convict, Ring with violating a bribery statute (18 U.S.C. §§ 201 or 666). (Id. at 6-7.) This is not how multiple offenses are accounted for by the Guidelines. Where there are multiple counts of conviction, the Court determines the base offense level, specific offense characteristics, cross references, and role adjustments for each count of conviction (including relevant conduct) separately. § 1B1.1(a)-(c). After this calculation has been made, the Court "[a]ppl[ies] Part D
Instead, under § 2C1.7(c)(4) the Court must examine a defendant's offense conduct and determine whether the offense is more specifically "covered" under § 2C1.1 (bribery) or § 2C1.7 (honest services fraud). Where a defendant's honest services scheme "essentially involve[s]" bribery, then the cross-reference is appropriate. United States v. Hasner, 340 F.3d 1261, 1276 (11th Cir.2003) (per curiam) (upholding application of cross-reference to § 2C1.3 (conflict of interest) where "the offenses at issue essentially involve [defendant's] failure to disclose his conflicts of interest"). Where, however, a defendant's scheme is comprised of multiple dissimilar acts and there is therefore "more to [the defendant's] scheme" than bribery, the cross-reference is inappropriate. United States v. Jennings, 487 F.3d 564, 588 (8th Cir.2007) (upholding district court's decision not to apply cross-reference to § 2C1.3 where defendant's offense conduct included not only nondisclosure of his conflict of interest, but also "us[ing] his position to influence his colleagues and members of the utility industry for personal gain," lying, and "fabricat[ing] documents"); United States v. Grandmaison, 77 F.3d 555, 567 (1st Cir.1996) (cross-reference to § 2C1.3 not applied where, in addition to failing to disclose his conflict of interest, defendant "secretly delivered gratuities to [three board members] to secure favorable votes").
Ring argues that the application of § 2C1.1 would be inconsistent with the treatment of those co-conspirators who have been charged and sentenced in connection with the same scheme to defraud. In particular, he notes that the government has not previously advocated for the use of the cross-reference for Volz, Rudy, Boulanger, Ney, Heaton, Zachares, Albaugh or Copland, either in their plea agreements or at sentencing, instead choosing to calculate the Guidelines range based on § 2C1.7.
As previously alluded to, however, this inconsistency is explained by the fact that the applicable law has changed since the time that each of those co-conspirators entered their plea agreements. Ring's co-conspirators each "pleaded guilty to honest
Ring, however, went to trial after the Supreme Court's ruling in Skilling. That case limited the scope of honest services fraud to bribery or kickback schemes and rejected the government's argument that 18 U.S.C. § 1346 could also permissibly proscribe "undisclosed self-dealing." As a result, the government was required to prove a bribery scheme in order to obtain a conviction for honest services fraud, and the jury was specifically instructed that, on the facts of this case, "the only type of scheme that the honest services fraud law forbids is a scheme to deprive the public of its right to honest services through bribery."
As a result, the Court will apply the bribery cross-reference, § 2C1.7(c)(4) and the bribery guideline in § 2C1.1 to Ring's offense conduct.
Given the applicability of § 2C1.1, the base offense level of 10 for bribery is enhanced by 2 levels where "the offense involved more than one bribe." § 2C1.1(b)(1). The Application Notes, however, state that "[r]elated payments that, in essence, constitute a single incident of bribery or extortion (e.g., a number of installment payments for a single action) are to be treated as a single bribe or extortion, even if charged in separate counts." § 2C1.1 cmt. n. 6.
Invoking this exception, Ring argues that the multiple bribe enhancement should not apply because the government proceeded to trial on a "stream of benefits" theory, charging Ring with numerous counts that together were part of a "single scheme to defraud" the public of the honest services of public officials.
The Court rejects this argument. Section 2C1.1(b)(1) speaks not of multiple "schemes to defraud" but of multiple "bribes," and Ring was both charged and convicted of a scheme to defraud involving multiple public officials. This is altogether different from "a number of installment payments for a single action," and there was ample evidence at trial of multiple "incidents" of bribery, targeted at multiple
Accordingly, § 2C1.1(b)(1) should be applied, and defendant's offense level is increased by 2 levels.
Section 2C1.1(b)(2) enhances the offense level for bribery based on the greatest of the following calculations:
Loss calculations "need not be precise," United States v. Antico, 275 F.3d 245, 270 (3d Cir.2001), and the Guidelines require only that the Court "make a reasonable estimate" of these values. § 2B1.1 cmt. n. 3(C).
The government asserts that the value of the benefits received in exchange for Ring's corrupt payments was over $14 million, triggering an enhancement of 20 levels under § 2B1.1(b)(1)(H). In the alternative, the government argues that the value of the corrupt payments exceeds $1 million, triggering a 16-level enhancement under § 2B1.1(b)(1)(I). If neither of these enhancements apply, the government maintains that the 8-level "elected official" enhancement, § 2C1.1(b)(2)(B) would apply as well. Ring challenges the use of each of these enhancements.
The primary measure of "loss" for purposes of § 2C1.1(b)(2)(A) is the value of the "benefit received or to be received in return for the payment," as this value is typically larger than the amount of the bribe itself, and the Guidelines instruct the Court to use whichever measure of value is greatest. § 2C1.1(b)(2)(A). The government "bears the burden of supporting its loss calculation with reliable and specific evidence." United States v. Gupta, 463 F.3d 1182, 1200 (11th Cir.2006).
"The value of `the benefit received or to be received' means the net value of such benefit." § 2C1.1 cmt. n. 2. Thus, where a defendant pays a bribe in return for being awarded a government contract, the "value of the benefit" is the profit made on the contract, not the gross value of the contract. Id.; United States v. Sapoznik, 161 F.3d 1117, 1118-20 (7th Cir. 1998) (Posner, J.) ("[T]he relevant `benefit received' is indeed profit (net revenue) and
The government asserts that the value of the benefits received in exchange for Ring's corrupt payments was over $14 million. This figure includes 1) the $7.3 million increase in the Department of Justice award for the Choctaw Jail, 2) $4.95 million in transportation earmarks that were funded by the House due to Albaugh's intervention,
Applying this admonition, the Court cannot conclude that the government has sustained its burden of proving by a preponderance of the evidence that a 20-level enhancement is appropriate given the host of problems with these figures. First is the issue of how to determine the "net value accruing" to Ring's clients as a result of these congressional appropriations. According to the government, Ring's clients (Indian tribes and municipalities) received not cash or valuable contracts, but rather a larger jail for the Choctaw than the tribe might otherwise have built, various roads and other transportation projects, and an Army Corps of Engineers study for a future water project for Saipan in the Commonwealth of the Northern Mariana Islands
The second major issue with the government's chosen "amount of the benefit received" figures is the attenuated, if not nonexistent, causal link between these appropriations and corrupt lobbying. As the government correctly notes, the "threshold for establishing a causal connection under § 2C1.1(b)(2)(A) is low," United States v. McNair, 605 F.3d 1152, 1230 (11th Cir.2010), and the government need not prove that the bribes were the "but for" cause of the benefit.
"[T]he question of causation is different," however, "from the question of quantification." Sapoznik, 161 F.3d at 1119 (emphasis added). The government has presented little to no evidence tying the additional $7.3 million award for the Choctaw jail to any corrupt payments by Ring or his co-conspirators.
The government's theory appears to be premised on aggregating the value of any appropriations that can be directly traced to Kevin Ring's lobbying efforts. But in determining the value of the benefits "received or to be received in return for the payment," the Court must take care to take into account benefits that would have been received in any event. United States v. Whitfield, 590 F.3d 325, 368 (5th Cir. 2009) (where trial judge bribed by an attorney, intended loss under § 2C1.1(b)(2) is not the amount of the verdict, but rather must be "adjusted by taking into account a reasonable estimate of whatever intrinsic value that case may have had if litigated before an impartial judge"). Similarly, the benefits Ring's clients received from his corrupt lobbying must be compared with what might have happened had there been no corrupt lobbying, not, as the government would have it, by looking to what would have happened had there been no lobbying at all. (See Dkt. No. 260 at 10-14.) This is particularly true given the government's necessary concession that only some portion of Ring's lobbying was corrupt or improper. (See, e.g., Dkt. No. 257 at 18.)
Finally, and most importantly, the government has made no effort to distinguish between bribes and gratuities when discussing the corrupt payments it claims are connected to benefits to Ring's clients. The distinction is important. Bribery requires the corrupt intent to exchange things of value for official acts, while an illegal gratuity need only be given "for or because of" an official act. The Guidelines reflect this distinction not only with different base offense levels for bribery (10) and illegal gratuities (7), but also by allowing for an enhancement based on "benefit received or to be received" under § 2C1.1 (bribery), but not under § 2C1.2 (illegal gratuities). Consequently, benefits received in connection with an illegal gratuity cannot serve as the basis for a "value of the benefit" enhancement under § 2C1.1(b)(2)(A), but the government has never attempted to distinguish the two, choosing instead to merely lump them together under the heading of "corrupt payments."
The Court therefore determines that it cannot arrive at a reasonable estimate of the "value received or to be received" in return for the bribes paid by defendant.
An alternative method of calculating the § 2C1.1(b)(2) enhancement is by determining the value of the corrupt payments themselves. For this calculation, the government lists three types of corrupt payments: $5 million spent on tickets to sports and entertainment events at the MCI Center, FedEx Field, and baseball games used by the co-conspirators during the course of the conspiracy; $500,000 expensed for meals at restaurants (including Signatures, which was owned by Abramoff); $200,000 spent on travel with public officials; and corrupt payments to Julie Doolittle ($96,000) and Lisa Rudy ($50,000) in the form of paid "little-work jobs." (Dkt. No. 15-19.)
To begin with, the government's figure for the value of the tickets is clearly too high. As the government notes (Dkt. No. 257 at 17 n. 7), this Court held during Coughlin's sentencing that the "value" of these tickets is their face (or fair market)
Even setting these issues aside, there is much more fundamental flaw with the government's calculations. The government freely admits that not all of these expenses were necessarily corrupt (Dkt. No. 257 at 17), but it also resists any attempt to define what exactly is a corrupt payment. (See, e.g., Tr. 8/30/11 73-92.)
This is unacceptable. The Court is mindful that loss calculations "need not be precise," Antico, 275 F.3d at 270, and the Guidelines require only that the Court "make a reasonable estimate" of these values. § 2B1.1 cmt. n. 3(C). But the government "bears the burden of supporting its loss calculation with reliable and specific evidence," and it may not simply guess where such evidence is unavailable. Gupta, 463 F.3d at 1200 (While "generally a district court's `reasonable estimate of the intended loss will be upheld on appeal' ... such calculation may not be mere speculation.") (quoting United States v. Renick, 273 F.3d 1009, 1025 (11th Cir.2001)); United States v. Cuti, No. 08-cr-972, 2011 WL 3585988, at *4, 2011 U.S. Dist. LEXIS 84791, at *12-13 (S.D.N.Y. July 29, 2011) (while the court "need only make a reasonable estimate of the loss, given the available information," it "may not engage ... in `pure speculation.'" (internal citation omitted); United States v. Deutsch, 987 F.2d 878, 886 (2d Cir.1993)).
Moreover, the government's reliance on United States v. Bras, 483 F.3d 103 (D.C.Cir.2007), is misplaced. (See Tr. 8/30/11 78:23-24.) While Bras held that a district court "need only make a reasonable estimate of the loss, given the available information," Bras, 483 F.3d at 112, a closer look at the facts of that case reveal the extent of the deficiencies in the government's approach here. Bras pled guilty mid-trial to overcharging the D.C. Department of Public Works for asphalt used to pave the District streets. Prior to sentencing, the district court conducted a two-day evidentiary hearing to determine "loss to the government" from Bras's scheme. The government employed the following methodology:
Id. at 110. At the district court's request, the government went further and recalculated the loss by excluding any items insufficiently supported by documentary evidence. Id. at 110-11. Here, by contrast, the government seeks to increase Ring's Guidelines range by nearly four years (prior to taking offense role and obstruction into account) by applying an admittedly arbitrary discount factor to an admittedly inflated gross total. Such a cavalier approach cannot be squared with the government's burden of having to prove a "reasonable estimate" of the value of the corrupt payments, and, therefore, the Court concludes that it cannot reasonably determine the value of the corrupt payments pursuant to § 2C1.1(b)(2)(A).
Given that the Court cannot reasonably determine either the value of the corrupt payments or the benefit received or to be received in return for corrupt payments under § 2C1.1(b)(2)(A), it will turn to the "elected or high-level decision-making official" enhancement. This provision provides an eight-level enhancement where "the offense involved a payment for the purpose of influencing an elected official or any official holding a high-level decision-making or sensitive position." § 2C1.1(b)(2)(B).
Ring argues that a similar provision— § 2C1.7(b)(1)(B)—would not apply to the facts of this case, were the Court to apply § 2C1.7 instead of § 2C1.1. (See supra Part II.A.) Specifically, Ring argues that under this provision (which applies where the offense "involved" an elected or high-level decision-making official), the elected or high-level decision-making official must be a participant in the scheme, and "the eight-point enhancement is reserved for schemes that include a high-level or elected official within its group of involved actors." (Dkt. No. 258 at 20-21.)
Given that the Court is not applying § 2C1.7, it is unclear whether Ring similarly objects to the use of § 2C1.1(b)(2)(B). Any such objection would be misplaced, however, as § 2C1.1(b)(2)(B) explicitly applies where the "payment" is "for the purpose of influencing" an elected official. Ring was charged and convicted of a bribery scheme that sought to influence, inter
The government argues that Ring's sentence should be enhanced pursuant to § 3B1.1(b), which increases the offense level by 3 levels where "the defendant was a manager or supervisor (but not an organizer or leader) and the criminal activity involved five or more participants or was otherwise extensive." The Application Notes to this section comment that factors "the court should consider include the exercise of decision-making authority, the nature of participation in the commission of the offense, the recruitment of accomplices, the claimed right to a larger share of the fruits of the crime, the degree of participation in planning or organizing the offense, the nature and scope of the illegal activity, and the degree of control and authority exercised over others" in applying this provision. § 3B1.1 cmt. n. 4.
While admitting to a managerial or supervisory role within the overall lobbying practice at Greenberg Traurig (Dkt. No. 258 at 23-24), Ring argues that the evidence was insufficient to demonstrate a managerial or supervisory role over the criminal lobbying activity.
The evidence at trial, however, demonstrated that Ring was the so-called "Chief Operating Officer" of the lobbyists who worked for Jack Abramoff. (Tr. 10/25/10 a.m. 56:8-19.) Ring was the client manager for a number of the lobbying team's clients, including the Choctaw, E-Lottery, and the CNMI, and consequently signed off on the expense reports detailing the corrupt gifts to public officials by Neil Volz and Todd Boulanger. (Tr. 10/28/10 p.m. 62:24-63:18.) In addition, the government charges that Ring cultivated a number of public officials (including Robert Coughlin, David Lopez, and Jennifer Farley) as "champions," thereby recruiting them into the conspiracy. (See Dkt. No. 257 at 22; Tr. 10/28/10 p.m. 32:20-33:18.)
Ring's argues that the government's "theory that a team of young lobbyists learned corrupt lobbying from Jack Abramoff" is inconsistent with its suggestion today that Ring was a manager or organizer of the criminal activity of others. (Dkt. No. 258 at 25.) Abramoff received a 4-level enhancement in consideration of his role as the "organizer or leader" of the conspiracy. But this fact in no way precludes the Court from enhancing defendant's offense level based on the lower "manager or supervisor" provision. Indeed, "there can be more than one person who qualifies as a leader or organizer of a criminal association or conspiracy." § 3B1.1 cmt. n. 4.
Based on the evidence presented at trial, the Court concludes that Ring had an "active supervisory role in the actual criminal conduct of others," United States v. DeGovanni, 104 F.3d 43, 46 (3d Cir.1997), and therefore, he qualifies for the 3-level "manager or supervisor" enhancement.
The government asserts that Ring's sentence should be enhanced for obstructing justice, pursuant to § 3C1.1, which states:
Application Note 4 to § 3C1.1 sets forth a non-exhaustive list of "examples of the types of conduct to which this adjustment applies," which includes "other conduct prohibited by obstruction of justice provisions under Title 18, United States Code." § 3C1.1 cmt. n. 4(i).
The government charges that Ring made false statements to Henry Schuelke and another private attorney and investigators hired by Greenberg Traurig, and that these statements are sufficient to prove, by a preponderance of the evidence, that Ring intended to obstruct justice. Specifically, the government points to Ring's "false and misleading statements about his knowledge of and participation in the [Michael] Scanlon-Abramoff kickback scheme, his receipt of $135,000 related to the Sandia Pueblo [tribe], as well as his knowledge [of] the corruption scheme involving payments to Julie Doolittle for a little-work job." (Dkt. No. 257 at 25.)
Ring admittedly made false statements to Schuelke regarding his knowledge of the Abramoff-Scanlon "Gimme Five" kickback scheme and the circumstances surrounding his receipt of $135,000 from Abramoff and Scanlon. (See GX-OKR 184, 185.) Even if the Court were to assume, however, that Ring's actions "willfully obstructed or impeded, or attempted to obstruct or impede, the administration of justice," § 3C1.1(A), the obstruction enhancement is not triggered unless Ring's obstructive conduct "related to (i) the defendant's offense of conviction and any relevant conduct; or (ii) a closely related offense." § 3C1.1(B). As the Court has previously held, the Scanlon-Abramoff kickback scheme (and Ring's receipt of $135,000 in connection with these kickbacks) is not the same scheme or transaction as the public corruption scheme Ring was tried and convicted of. Indeed, it was for this very reason that the Court severed Counts IX and X, which charged defendant with obstruction of justice based on this same conduct. (See Tr. 6/26/09 64:20-21 ("it's not the same scheme or transaction"); id. 65:1-2, 10-11 ("I think it's completely unrelated to what this case is about.... whether or not the billings of Greenberg Traurig were fair, not fair, true, not true ... has nothing to do with honest services.")) Indeed, the government now concedes that "Ring's false and misleading statements about his receipt of kickbacks may not be best handled under the § 3C1.1 obstruction enhancement." (Dkt. No. 274 at 5.)
By contrast, had Ring obstructed justice by lying about the "little-work job" for Julie Doolittle, such conduct obviously would relate to the offense of conviction since Ring's conviction on Count VIII involved a wire transfer of monies to Julie Doolittle. Here, however, the government has not met its burden of proving obstruction.
"An enhancement under § 3C1.1 `is only appropriate where the defendant acts with the intent to obstruct justice.' Where conduct is `directly and inherently obstructive'—that is, where the defendant engages in `behavior that a rational person would expect to obstruct justice'—the court may infer an intent to obstruct justice and need not make a separate finding of specific intent." United States v. Reeves, 586 F.3d 20, 23 (D.C.Cir.2009) (quoting United States v. Henry, 557 F.3d 642, 646, (D.C.Cir.2009)). The government asserts that Ring obstructed justice by "deny[ing] [that he] remember[ed] much about the corrupt job for Julie Doolittle" during the fourth interview with Schuelke (Dkt. No. 257 at 26), as demonstrated by the fact that during the fifth interview, "Ring provided additional information regarding
(Tr. 8/30/11 122:13-19.) Since Ring's lack of memory as to Julie Doolittle "stand[s] alone," and it does not constitute obstruction of justice, the Court will not apply the § 3C1.1 enhancement.
Finally, Ring argues that the Court should grant a 2-level reduction under § 3E1.1 for acceptance of responsibility, notwithstanding the fact that he has gone to trial and been convicted. While "[t]his adjustment is not intended to apply to a defendant who puts the government to its burden of proof at trial by denying the essential factual elements of guilt, is convicted, and only then admits guilt and expresses remorse," a defendant's conviction at trial "does not automatically preclude a defendant from consideration for such a reduction." § 3E1.1 cmt. n. 2. "[W]here a defendant goes to trial to assert and preserve issues that do not relate to factual guilt (e.g., to make a constitutional challenge to a statute or a challenge to the applicability of a statute to his conduct)," the defendant may, in rare circumstances, still be able to clearly demonstrate an acceptance of responsibility for his criminal conduct sufficient to trigger application of this provision. Id. Ring asserts that this is just such a case, and that his "comprehensive cooperation" during thirteen meetings with prosecutors and agents over a period of fourteen months and his "complete candor" during these meetings evidences his acceptance of responsibility. (Dkt. No. 258 at 41.)
The Court disagrees. Ring did not end his cooperation and proceed to trial "to make a "constitutional challenge" to the honest services fraud or illegal-gratuities statute, or to admit the essential elements of his conduct, but "challenge the applicability" of these statutes to his conduct. See § 3E1.1 cmt. n. 2. Nor is it accurate to conclude that, as Ring argues, his "cooperation with the government ended because he refused to adopt the government's legal theory." (Dkt. No. 258 at 41 (emphasis added).) Rather, Ring "put the government to its burden of proof at trial by denying [an] essential factual element[] of guilt": his own corrupt intent to exchange things of value for official acts by public officials. § 3E1.1 cmt. n. 2.
The Court therefore denies Ring's request for an acceptance-of-responsibility reduction under § 3E1.1.
For the foregoing reasons, the Court's calculation of defendant's Guidelines range is as follows:
Base Offense Level
Offering or Giving a Bribe 2C1.1(a) 10
Specific Offense Characteristics
More Than One Bribe 2C1.1(b)(1) +2
Elected or High-Level Decision-Making Official 2C1.1(b)(2)(B) +8
Aggravating Role in the Offense
Manager or Supervisor 3B1.1(b) +3
_______________________________________________________________________________
TOTAL 23
Co-conspirator pica agreements (with final government recommendation at sentencing and ultimate sentence imposed by Court). All references are to the 2003 Guidelines Manual.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------| | Public Official Co-Conspirators Who Pled to Honest-Services Fraud Defendant |Date of |Offense(s) |Guideline |Honest- |Adjustments |Total |Government |Court's Sentence | | |Flea | |(Base Offense |Services/Bribery | |Offense |Recommendation | | | | | |Level) |Enhancements | |Level | | | |----------------|---------|--------------|---------------|------------------------|-----------------|----------|-------------------------|---------------------| | Robot Ney | 9/15/06 | Honest- | §2C1.7(10) | +8 | +2 or+3 | 17 or 18 | 27 months (argued in | 30 months | | | | Services | and | (Elected Official) | (Role in the | (24-30 | favor of+3 "Role in | incarceration | | | | Fraud, False | §2C1.3(6) | | Offense) | months | the Offense" | | | | | Statements. | | | -3 | or 27-33 | enhancement) | | | | | Employment | | | (Acceptance of | months) | | | | | | Restrictions | | | Responsibility) | | | | |----------------|---------|--------------|---------------|------------------------|-----------------|----------|-------------------------|---------------------| | William Heaton | 2/26/07 | Honest- | §2C1.7(10) | +8 | -3 | 15 | "Low end" of 6-12 | 48 months probation | | | | Services | | (Elected Official) | (Acceptance of | (18-24 | month range with | | | | | Fraud | | | Responsibility) | months) | home confinement | | | | | | | | | | (5K1.1 letter requested | | | | | | | | | | 5-level reduction) | | |----------------|---------|--------------|---------------|------------------------|-----------------|----------|-------------------------|---------------------| | Mark Zachares | 4/24/07 | Honest- | §2C1.7(10) | +8 | -3 | 15 | 12-18 months | 48 months probation | | | | Services | | (Elected Official) | (Acceptance of | (18-24 | (5K1.1 letter requested | (24 days in jail on | | | | Fraud | | | Responsibility) | months) | 2-level reduction) | weekends) | |----------------|---------|--------------|---------------|------------------------|-----------------|----------|-------------------------|---------------------| | John Albaugh | 6/2/08 | Honest- | §2C1.7(10) | +8 | -2 | 16 | 27 months | 60 months probation | | | | Services | | (Elected Official; | (Acceptance of | (21-27 | (Objected to 2-level | (4 months in | | | | Fraud | | "greater than any | Responsibility) | months) | reduction for | halfway house) | | | | | | adjustment ... based | | | Acceptance of | | | | | | | on value of [bribes]") | | | Responsibility) | | |----------------|---------|--------------|---------------|------------------------|-----------------|----------|-------------------------|---------------------| | Ann Copland | 3/10/09 | Honest- | §2C1.7(10) | +4 | -2 | 12 | 10 to 16 months | 48 months probation | | | | Services | | (Value of bribe | (Acceptance of | (10-16 | | (75 days in halfway | | | | Fraud | | "exceeds $10,000 but | Responsibility) | months) | | house, 75 days | | | | | | is less than | | | | home detention) | | | | | | $30,000") | | | | | |---------------------------------------------------------------------------------------------------------------------------------------------------------------|
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------| | Greenberg Traurig Lobbyist Co-Conspirators Who Pled to Honest-Services Fraud Defendant |Date of |Offense(s) |Guideline |Honest-Services/ |Adjustments |Total |Government |Court's | | |Plea | |(Base Offense Level) |Bribery | |Offense |Recommendation |Sentence | | | | | |Enhancements | |Level | | | |------------------|----------|-----------------|-------------------------|-----------------------|-----------------|-------------|--------------------|---------------| | Michael | 11/21/05 | Bribery, Fraud, | §2C1.1 (10) for | -2 | +1 (Multiple | 24* | 24 months (5K1.1 | 20 months | | Scanlon | | Honest-Services | "Corruption Offenses" | (More Than One | Counts) | (51-63 | letter) | incarceration | | | | Fraud | §2B1.1 (6) for "Fraud | Bribe) | -3 (Acceptance | months) | | | | | | | Offenses" | +8 | of | | | | | | | | | (Elected Official) | Responsibility) | | | | |------------------|----------|-----------------|-------------------------|-----------------------|-----------------|-------------|--------------------|---------------| | Jack Abramoff | 1/3/06 | Bribery, Fraud, | §2C1.1 (10) for | +2 | +4 (Role in the | 31* | 39 months | 48 months | | | | Honest-Services | "Corruption Offenses" | (More Than One | Offense) | (108-135 | (5K1.1 letter | incarceration | | | | Fraud, Tax | §2B1.1 (6) for "Fraud | Bribe) | +1 (Multiple | months) | requested 6-level | | | | | Evasion, | Offenses" | +8 | Counts) | | reduction and | | | | | Employment | §2T4.1 (22) for "Tax | (Elected Official) | -3 | | credit for time | | | | | Restrictions | Offenses" | | (Acceptance of | | served for offense | | | | | | | | Responsibility) | | in S.D. FI.) | | |------------------|----------|-----------------|-------------------------|-----------------------|-----------------|-------------|--------------------|---------------| | Neil Volz | 5/8/06 | Honest-Services | §2C1.7 (10) for Honest- | +8 | -3 (Acceptance | 15 | "low end" of 4-10 | 24 months | | | | Fraud, | Services Fraud | (Elected Official) | of | (18-24 | months, with home | probation | | | | Employment | §2C1.3 (6) for | | Responsibility) | months) | confinement | | | | | Restrictions | Employment Restrictions | | | | (5K1.1 letter | | | | | | | | | | requested 6-level | | | | | | | | | | reduction) | | |------------------|----------|-----------------|-------------------------|-----------------------|-----------------|-------------|--------------------|---------------| | Tony Rudy | 3/31/06 | Mail & Wire | §2C1.7 (10) for Honest- | +8 | +2 (Multiple | 17 | Plea Agreement | Not yet | | | | Fraud, Honest- | Services Fraud | (Elected Official) | Counts) | (24-30 | includes potential | sentenced | | | | Services Fraud, | §2B1.1 (6) for Mail & | | -3 | months) | for 5K1.1 letter | | | | | Employment | Wire Fraud | | (Acceptance of | | | | | | | Restrictions | §2C1.3(6) for | | Responsibility) | | | | | | | | Employment Restrictions | | | | | | |------------------|----------|-----------------|-------------------------|-----------------------|-----------------|-------------|--------------------|---------------| | Todd Boulanger | 1/30/09 | Honest-Services | §2C1.7(10) | +8 | -3 | 15 | Plea Agreement | Not yet | | | | Fraud | | (Elected Official; | (Acceptance of | (18-24 | includes potential | sentenced | | | | | | "greater than any | Responsibility) | months) | for 5K1.1 letter | | | | | | | adjustment ... based | | | | | | | | | | on" bribe value) | | | | | |------------------|----------|-----------------|-------------------------|-----------------------|-----------------|-------------|--------------------|---------------| | Kevin Ring | N/A | Illegal | §2C1.1 (10) | +2 (More Than One | +3 | 37 | 210 to 262 months | | | (Government's | | Gratuities, | | Bribe) | (Role in the | (210 to 262 | | | | current position | | Honest-Services | | +20 (Benefit received | Offense) | months) | | | | re: Guidelines) | | Fraud | | in exchange for | +2 | | | | | | | | | bribes between | (Obstruction of | | | | | | | | | $7mm and $20mm) | Justice) | | | | |----------------------------------------------------------------------------------------------------------------------------------------------------------------------|
(Jury Instruction No. 28, Dkt. No. 222 at 30.) The Second Circuit reached a similar conclusion in United States v. Ganim, 510 F.3d 134 (2d Cir.2007) (Sotomayor, J.), when it affirmed the following instruction:
Id. at 149 (alteration and omission in original).
