United States v. Kumar, No. 06-5482-cr (2d Cir. August 12, 2010) (Walker, Sacks, Livingston, CJJ)
Sanjay Kumar and Stephen Richards, officers as a company called Computer Associates, engineered a huge accounting fraud that ended in October of 2000. Had that been the end of the story, their sentence would have been calculated under the November 1998 Guideline Manual (for obscure political reasons there is no November 1999 Manual), and their offense level would have been 30. However, the defendants engaged in additional criminal conduct associated with the government’s investigation of the accounting fraud – obstruction of justice, mainly – between 2002 and 2004.
Eventually, they pled guilty to everything and, in 2006, were sentenced under the November 2005 Guideline manual, which was in effect at the time, and under which the offense level for the fraud offenses had increased dramatically – from 30 to 50.
In this opinion, a divided circuit panel held that the district court’s use of the 2005 manual – correct under the so-called “one-book rule” – did not violate the Ex Post Facto clause.
The Majority’s Opinion
The one-book rule, a longstanding Chapter One instruction, provides that if the defendant is convicted of two offenses, one committed before and one committed after the effective date of a revised edition of the Guideline Manual, the revised edition is to be applied to both offenses.
An ex post facto violation occurs where a later law is retrospectively applied to a defendant’s disadvantage. Here, the application of the 2005 Manual clearly disadvantaged the defendants by subjecting them to a higher range than that recommended by the 1998 edition. But the majority held that the application of the 2005 Manual was not “‘retrospective’ within the meaning of the Ex Post Facto clause.” The major policy concern animating the ex post facto prohibition – a “lack of fair notice and government restraint when the legislature increases punishment beyond what was prescribed when the crime was consummated” – was not implicated here. The core right is to “fair notice,” and not to “less punishment.”
Since the one-book rule was adopted before the defendants committed the obstruction offenses, they were on notice of the consequences of committing that second offense, which included “the application of the post-amendment Guidelines to all offenses considered at the defendants’ sentencing.” The defendants could have “altered their conduct so as to avoid any heightened punishment imposed on the basis of the one-book rule by choosing not to obstruct the government’s investigation into their prior fraud.”
The majority also likened the one-book rule to a recidivist statute or “three strikes” law, which do not violate the Ex Post Facto clause. The situations are analogous even though the impetus for recidivism statutes is to “reflect the greater culpability associated with” the later offenses and the impetus for the one-book rule is to avoid “‘piecemeal’ sentencing.” This distinction “makes neither a practical nor a logical difference for purposes of an analysis under the Ex Post Facto clause.” Either way, “prior conduct becomes the basis for imposing a heightened sentence only upon conviction for a later criminal act.”
Since the “actual crime” triggering the one-book rule was the obstruction of justice, and since the defendants had prior notice of its consequences, the application of the one-book rule was proper.
Judge Sack dissented. In his view, since the defendants did not have “fair notice” of the severity of the penalties to which they might be subjected under the later Guidelines at the time they committed the fraud offenses, the application of the one-book rule constituted an ex post facto violation. To him, the notice that the defendants received was for the “wrong crime: not as to the fraud … for which punishment was revised markedly upward, but the subsequent obstruction offenses for which the Guidelines have not changed. This notice was inconsequential because the defendants were not subjected to an increased sentence for obstruction; they were subjected to an increased sentence for already completed frauds.” Moreover, while the defendants had notice of the fraud enhancement before they committed the obstruction offenses, they did not have that notice before they committed the original fraud.
This is an extremely interesting issue, one on which the circuits are divided. But it also implicates a more fundamental ex post facto question that has not yet been resolved: does the clause apply at all to the Sentencing Guidelines now that they are advisory? The circuits are split on the question, and the Second Circuit has not yet ruled on it.
Here, the government took the position in the district court that Booker eliminated any ex post facto concerns with respect to the Sentencing Guidelines, and the district court’s ruling was based in large part on that. But, on appeal, the government abandoned that position, which permitted the panel to assume without deciding – and both the majority and the dissent did – that the Ex Post Facto clause still forbids the retrospective application of a more severe Guideline Manual.
Given the circuit split on the issue presented here, the defendants might well seek certiorari in this case. But it seems likely that the broader question ex post facto will have to be resolved by the Supreme Court before the question presented here can be addressed.
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