Appellant worked for a company that (generously) matched the charitable donations of its employees “up to $25,000 in donations per employee annually.” Opinion (“Op”) at 2. From 2015 to 2019, Appellant he “carried out a scheme to defraud” by “submitt[ing] fake documentation purporting to show that he, as well as some of his coworkers, had made significant charitable donations to an entity that Strange himself controlled.” Op at 2-3. The coworkers “had no knowledge of the submissions.” Op at 3. Appellant received about $600,000 from the company’s matching program, which he used “for personal expenses.” Id.
Appellant ultimately pleaded guilty to one count of wire fraud (18 U.S.C. § 1343). And his initial Guidelines range was “33 to 41 months incarceration.” Op at 3.
But a few days before sentencing, he submitted three letters “each encouraging the imposition of a probationary sentence rather than imprisonment.”Op at 3. The government investigated the letters, however, and established that they had been drafted by Appellant “without the knowledge or approval of the purported authors.” Op at 3-4.
Because of the forged letters, the sentencing court “applied the obstruction of justice enhancement and denied the acceptance of responsibility reduction.” It then imposed a Guidelines sentence of 57 months’ imprisonment. Op at 4.
I. The Second Circuit rejects the argument that the obstruction enhancement applies only if the obstructive conduct “relate[s] to (A) the defendant’s offense of conviction and any relevant conduct; or (B) a closely related offense]” — as stated in U.S.S.G. § 3C1.1(2).
The obstruction-of-justice Guideline, § 3C1.1 is comprised of two clauses. “Clause 1 establishes a temporal restriction” (Op at 5), requiring that the defendant have “‘willfully obstructed or impeded, or attempted to obstruct or impede, the administration of justice with respect to the investigation, prosecution, or sentencing of the instant offense of conviction[.]’” Op at 5 (quoting § 3C1.1(1)) (emphasis added) .
Clause 2 — on which Appellant’s argument relied — “provides the nexus element.” Op at 5. It requires that “‘the obstructive conduct related to (A) the defendant’s offense of conviction and any relevant conduct; or (B) a closely related offense.’” Op at 5 (quoting § 3C1.1(2)) (emphasis added). Appellant argued “that the forged letters fail to satisfy this second requirement.” Op at 6.
A “mixed standard of review” applies to obstruction enhancements: clear error applies to findings of fact, and legal conclusions are reviewed de novo. Op at 4.
The Circuit holds that the phrase “related to,” in the second clause of § 3C1.1, “does not require a relation to the underlying unlawful conduct.” Op at 6. The Circuit reasoned: “If it were otherwise, then the two clauses of U.S.S.G. § 3C1.1 would be contradictory. Clause 1 expressly authorizes the enhancement when the defendant obstructed justice with respect to the ‘sentencing’ of the underlying offense. If Clause 2 required the obstructive conduct to relate only to the underlying offense conduct as distinct from the sentencing, then obstruction at the sentencing phase would never qualify.” Op at 7. Thus, the Circuit explained, “[b]ecause the preferred meaning of a statutory provision is one that is consonant with the rest of the statute, we reject Strange’s interpretation of the second clause.” Id. (citations and internal quotation marks omitted).
It turns out that the Second Circuit had only addressed the issue of whether the obstruction-enhancement applied only to obstructive conduct related to the underlying offense, in a “nonprecedential summary order”: United States v. Butters, 513 F. App’x 103 (2d Cir. 2013). See op at 6 n.1. Butters reached a conclusion similar to this Opinion. The Circuit states that it “now adopt[s]” the ruling in Butters “by opinion.” Op at 6 n.1.
Appellant also argued that the forged letters weren’t “material” to the district court’s sentencing decision, under Application Notes 4(F) & 6, of § 3C1.1. See Op at 7-8. The district court acknowledged that one of the letters (which related how Appellant had aided a couple “in a time of need)” probably couldn’t have affected the sentencing decision. Op at 3, 7-8. But, given the district court’s explanation of how the two other letters could have been material, the Circuit concluded that the application of the obstruction enhancement was proper. Op at 7-8.
II. It wasn’t an abuse of discretion for the court to deny any offense-level reduction for Acceptance of Responsibility.
Appellant argued that “his situation is an ‘extraordinary’ case that warrants an exception to the general rule that the obstruction enhancement will be accompanied by the denial of the acceptance of responsibility reduction.” Op at 8-9; see U.S.S.G. § 3E1.1, cmt. n.4 (“Conduct resulting in an enhancement under § 3C1.1 (Obstructing or Impeding the Administration of Justice) ordinarily indicates that the defendant has not accepted responsibility for his criminal conduct”).
Here, Appellant argued that his case was “‘extraordinary’” “because he pleaded guilty and expressed responsibility for his actions, despite his later submission of the false letters.” Op at 10.
But a defendant “who enters a guilty plea is not automatically entitled to an adjustment for acceptance of responsibility.” Op at 9 (quoting United States v. Ortiz, 218 F.3d 107, 108 (2d Cir. 2000)). The “decision to grant the reduction is discretionary.” Op at 9. And Application Note 3 to § 3E1.1, provides — the Circuit notes — that “‘evidence of acceptance of responsibility … may be outweighed by conduct of the defendant that is inconsistent with such acceptance of responsibility.” Id. (quoting § 3E1.1 cmt. n. 3). Also, the Circuit notes, in deciding whether to apply the acceptance reduction, a sentencing court considers factors such as the defendant’s “‘voluntary termination or withdrawal from criminal conduct or associations.’” Op at 10 (quoting § 3E1.1 cmt. n.1(b)).
Applying these principles, the Circuit concludes that the district court didn’t abuse its discretion in denying any reduction for acceptance of responsibility. Op at 10. It said it agreed with the district court “that it is hard to ‘believe a defendant accepts responsibility when he fabricates evidence that’s aimed at escaping just punishment for his crime’” Id. It also noted the district court’s observation that the forgery of the sentencing letters “resembled the forgeries [Appellant] submitted as part of the donation scheme, indicating that Strange had not abandoned his criminal conduct.” Op at 10.