Wednesday, October 23rd, 2019

Second Circuit affirms application of Sentencing Guidelines enhancement under § 2D1.1(b)(16)(E) for criminal conduct committed as part of a livelihood, addressing for the first time what constitutes “a substantial period of time” in this context and what it means for criminal activity to be engaged in as a “primary occupation.”

On October 22, 2019, the Second Circuit, in an opinion by Judge Chin (joined by Judge Cabranes and concurred with, in part, by Judge Calabresi), affirmed the application of two Sentencing Guidelines enhancements, including one for committing an offense as part of criminal conduct engaged in as a livelihood. With regard to that enhancement, the Court addressed several issues of first impression in this Circuit. Judge Calabresi concurred in the result but not the discussion of the criminal livelihood enhancement.

In United States v. Moran (reported case name United States v. Pristell), __ F.3d __, 2019 WL 5382053 (2d. Cir. 2019), Lamont Moran was sentenced, following a guilty plea, to 84 months’ imprisonment for conspiring to distribute and possess with intent to distribute 100 grams or more of heroin, in violation of 21 U.S.C. §§ 841(a)(1), 841(b)(1)(B), and 846. Before sentencing, Moran challenged both the managerial/supervisory role enhancement and the criminal livelihood enhancement. As to the criminal livelihood enhancement, the probation department agreed with Moran that it was inapplicable, resulting in a Guidelines range of 97 to 121 months, down from the previous calculation of 121 to 151 months. The district court applied both enhancements and adopted the higher range, but it noted that the range would “not [ ] make a great deal of difference” because the court was “not going to sentence [Moran] to 121 months or 97 months,” but instead imposed a sentence of 84 months.

After agreeing with the district court’s assessment that the nature and volume of intercepted conversations between Moran and his co-defendants supported the aggravating role enhancement under U.S.S.G. § 3B1.1(b), based on Moran playing a managerial role in criminal activity involving at least 5 participants, the Court turned to the criminal livelihood enhancement under U.S.S.G. § 2D1.1(b)(16)(E). For this enhancement to apply, a defendant must first receive an adjustment for an aggravating role under § 3B1.1(b), and then additionally must 1) commit the offense as part of a “pattern of criminal conduct” occurring over a “substantial period of time,” and 2) engage in the conduct “as a livelihood.”

As to the first prong of the enhancement, which requires a “pattern of criminal conduct,” defined in the commentary as acts occurring over “a substantial period of time,” Moran argued that because he was alleged to have engaged in criminal conduct for no more than 9 months, this did not satisfy the Guidelines, particularly where the commentary regarding the second prong of the criminal livelihood enhancement refers to a 12-month period in defining what constitutes conduct being “engaged [in] as a livelihood.” Not only did the Court reject the idea that this definition in the second prong should be applied to the first, but it also noted that other Circuits had concluded that periods as short as 5 months are sufficient. The Court found that the 9-month period at issue here, which demonstrated that Moran’s criminal activity “was not a ‘short, quick, one-time offense,’ but rather a sustained enterprise,” constituted a “substantial period of time.”

The second prong of the enhancement has two elements: an income threshold and a requirement that the criminal conduct be the defendant’s “primary occupation” or livelihood. As to the first element, the income threshold requires that a defendant derived income from the pattern of criminal conduct that in any 12-month period exceeded 2,000 times the then-existing hourly minimum wage under federal law, in this case $14,500 (based on $7.25 an hour). While not specifically challenging that he earned the requisite $14,500, Moran argued that the government had to show that he made $14,500 in net, not gross. Noting that the majority of other Circuits have used gross income, the Court agreed that use of gross income was the correct approach, particularly given the guideline’s intention to approximate the income of an employee earning the federal minimum wage, which is a gross figure.

As to the second element of the second prong, which considers whether the criminal activity was the defendant’s “primary occupation,” Moran noted that he was employed as a part-time youth counselor earning $14 an hour during some of the time that he was also engaged in criminal conduct. The Court adopted the approach of other Circuits that have considered the proportion of income derived from criminal, as opposed to legitimate, sources in determining whether the “primary occupation” was criminal conduct. Although the Court noted that there was no evidence of how much Moran earned from his legitimate employment during the time period at issue, his adjusted gross income from prior years suggested a range that was less than the $14,500 he earned from drug trafficking over a 12-month period. Thus, the Court found both elements of the second prong were met, in addition to the first prong, and the criminal livelihood enhancement was applicable.

In his concurrence, Judge Calabresi agreed with the result and the opinion as to the aggravating role enhancement but did not join in the opinion regarding the criminal livelihood enhancement. Judge Calabresi concluded that because the district court made clear that it would have given the same sentence regardless of whether the criminal livelihood enhancement applied, the discussion of the criminal livelihood enhancement was unnecessary.

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