United States v. McCants, Calvin

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued December 9, 2005 Decided January 13, 2006

Reissued January 18, 2006

No. 04-3064

UNITED STATES OF AMERICA,

APPELLEE

v.

CALVIN MCCANTS,

APPELLANT

Appeal from the United States District Court

for the District of Columbia

(No. 02cr00130-01)

Ketanji Brown Jackson, Assistant Federal Public Defender,

argued the cause for appellant. With her on the brief was A.J.

Kramer, Federal Public Defender. Neil H. Jaffee, Assistant

Federal Public Defender, entered an appearance.

Lisa H. Schertler, Assistant U.S. Attorney, argued the cause

for appellee. With her on the brief were Kenneth L. Wainstein,

U.S. Attorney, John R. Fisher, Assistant U.S. Attorney at the

time the brief was filed, Elizabeth Trosman and Virginia

Cheatham, Assistant U.S. Attorneys. Roy W. McLeese, III,

Assistant U.S. Attorney, entered an appearance.

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Before: RANDOLPH and GRIFFITH, Circuit Judges, and

EDWARDS, Senior Circuit Judge.

Opinion for the Court filed by Senior Circuit Judge

EDWARDS.

EDWARDS, Senior Circuit Judge: Calvin McCants pled

guilty to possessing false document-making implements in

violation of 18 U.S.C. § 1028(a)(5) (2000). The Presentence

Investigative Report (“PIR”) prepared by the United States

Probation Office contained several highly contested factual

issues. At sentencing, however, the District Court made no

specific factual findings with respect to matters in dispute

between the defendant and the prosecutor. At the conclusion of

sentencing, the prosecutor inquired: “[A]s a housekeeping

matter . . . do I understand the Court to have adopted the

presentence report with respect to our sentencing

guidelines. . . ?” The trial judge replied, “That is correct.” On

appeal, the Government contends that the District Court’s last

minute “adoption” of the PIR amounted to the required

“findings” by the court mirroring those stated in the PIR. We

disagree.

Federal Rule of Criminal Procedure 32(i)(3)(B) states that

a sentencing court

must – for any disputed portion of the presentence report or

other controverted matter – rule on the dispute or determine

that a ruling is unnecessary either because the matter will

not affect sentencing, or because the court will not consider

the matter in sentencing.

Because the District Court failed to follow the strictures of Rule

32, we will remand the case for resentencing accompanied by

the required findings of fact.

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I. BACKGROUND

On March 15, 2002, the Government issued a 15-count

indictment against McCants, charging him with conspiracy to

defraud a number of financial institutions and unlawfully

transfer various means of identification. The indictment alleged

a number of specific offenses, several of which involved

presenting misappropriated credit histories and false

identifications to financial institutions to obtain fraudulent loans.

Unnamed co-conspirators actually obtained the loans, according

to the indictment, but McCants supplied them with stolen credit

histories and accompanying identification documents. McCants

was also charged with independent substantive offenses.

Relevant to this appeal is Count 13 of the indictment, which

accused McCants of violating 18 U.S.C. § 1028(a)(5) by

knowingly possessing tools used for the intentional production

of false identification documents.

Appellant reached an agreement with the Government to

plead guilty to Count 13. As part of that agreement, McCants

acquiesced to a factual statement of his offense, which was

appended to the plea. The factual statement described the fruits

of four Government searches targeting McCants. In essence, it

provided an inventory of the illicit supplies discovered in

McCants’ possession. These items are not in dispute.

The United States Probation Office released an initial PIR

on December 23, 2003. Both parties took issue with its findings.

The prosecution claimed that the report understated the amount

of loss attributable to McCants, failed to showcase evidence of

McCants’ use of “sophisticated means” to execute the offense,

and did not grasp the seriousness of the offense, which

warranted an additional upward departure. In particular, the

Government described the extensive holding of document-

making paraphernalia recovered in the four searches described

in McCants’ offense statement. The Government then alleged

that McCants sold two fake credit cards to Rickey Buchanan –

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a prosecution informant who bought phony documents from

McCants and led the ring of individuals who perpetrated the

bank fraud operations – in “controlled buys” orchestrated by

federal law enforcement agents. The Government also linked

McCants to 283 counterfeit or “obliterated” credit cards, which

the prosecution characterized as “access devices” for purposes

of United States Sentencing Guidelines § 2B1.1. Further, the

Government attributed to McCants $110,252 in losses stemming

from the bank fraud scheme, which the Government accused

McCants of facilitating; in connecting McCants to the larger

scheme, the memorandum asserted that he “shar[ed] in the loan

proceeds.” Government’s Memorandum in Aid of Sentencing

and Mot. for Upward Departure at 18, United States v. Calvin

McCants, Cr. No. 02-130 (D.D.C. filed Feb. 4, 2004). Finally,

the Government referred to identifications and credit cards in the

name of “Celvin McCants” found in appellant’s possession, and

asserted that “[h]e also obtained bank loans in that name – loans

which he did not repay.” Id. at 19. Those loans added another

$32,949.57 to the Government’s proposed loss calculation. On

top of the Guidelines score reflecting this proposed loss

attribution, the Government urged the District Court to increase

McCants’ offense level by two pursuant to United States

Sentencing Guidelines § 2B1.1(b)(8)(C), because McCants

utilized “sophisticated means” to perpetrate his crime. The

Government also urged a two-level upward departure, arguing

that the calculated loss amount “grossly understate[d] the

seriousness of McCants’ criminal conduct.” Id. at 22.

Attached to the Government’s sentencing memorandum

were transcripts of a series of telephone conversations between

McCants and Buchanan. McCants’ dealings with Buchanan

formed the basis of the Government’s theory linking McCants

to the bank frauds. The Government therefore relied heavily on

these conversations to establish the scope of McCants’

culpability. In particular, the Government has highlighted the

following information discerned from the transcripts: McCants

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claimed that an associate could acquire “dossiers,” which

provide “a whole log on anybody you want”; McCants priced a

package of materials, apparently including military

identification and driver’s licenses, in which “everything looked

legal,” at $3,000; McCants reported that his associate, “Doc,”

possessed fabricated licenses intended for Buchanan, and that,

with respect to one of Buchanan’s cohorts, “we put your boy’s

face on” the licenses. Finally, the Government attached a

second addendum with an itemized list of the credit cards

uncovered during searches of McCants’ addresses.

The defense also lodged objections to the initial PIR and

filed a responsive memorandum with the trial court. First, it

challenged the Government’s calculation of the amount of loss

attributable to McCants, and offered a counter-calculation. In

particular, McCants posited that the total loss for which he was

responsible “is $136,500, and in the worse [sic] case would be

no more than $187,692.05.” Defendant’s Mot. for

Consideration for Downward Departure and Opp. to the Gov’ts

Memorandum in Aid of Sentencing and Mot. for Upward

Departure at 2, United States v. Calvin McCants, Cr. No. 02-130

(D.D.C. filed Feb. 23, 2004). The difference in loss calculation

was critical to determining McCants’ sentence, because losses

over $200,000 increase the base level for McCants’ offense of

conviction by 12 points, whereas losses between $120,000 and

$200,000 increase the base level by only 10 points. See

U.S.S.G. § 2B1.1(b)(1)(F), (G) (2003).

To scale back the calculation, McCants first argued that he

possessed only 273 “access devices,” not the 283 cited by the

Government, in part because “obliterated” cards – i.e., cards on

which the identifying information has been filed off – could not

count. McCants also denied responsibility for the two cards

allegedly sold in the controlled buys, maintaining that he never

actually transmitted the cards to Buchanan or received any

money for them. Next, the defense strongly opposed penalizing

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McCants for any of the bank fraud schemes perpetrated by

Buchanan and his crew. McCants attacked Buchanan’s

credibility and emphasized the financial independence of the

two men, insisting that McCants received a flat fee for his

product and no portion of Buchanan’s proceeds. McCants also

countered the Government’s support of an adjustment for his

alleged use of “sophisticated means,” arguing that the false

document-making implement statute already contemplates the

use of sophisticated equipment.

In May 2004, the Probation Office issued a final PIR. It

maintained the view that Buchanan’s bank fraud operation was

“relevant conduct,” see U.S.S.G. § 1B1.3, for purposes of

devising McCants’ sentence. The PIR found that appellant

“engaged in a scheme which defrauded banks and lending

institutions of over $100,000.” Presentence Investigative Report

¶ 10, United States v. Calvin McCants, Cr. No. 02-130 (D.D.C.

May 6, 2004) (“PIR”). It further found that McCants “would

typically receive a ‘one-third payment’ for his activities, either

at the time he produced a loan package . . . for an unnamed

coconspirator or after a fraudulent loan was obtained [with

proceeds from the loan].” Id. ¶ 13 (brackets in original). An

additional $32,949 was assigned to McCants because “the

government indicated that the defendant is responsible for two

defaulted loans [using the name Celvin McCants].” Id. ¶ 33

(brackets in original). In sum, the PIR calculated that

$289,701.15 in loss was attributable to McCants.

At a series of sentencing hearings, the Government

presented testimony from two witnesses: Secret Service Special

Agent Jeffrey Porter, who had investigated McCants, and

Buchanan. Porter described the trove of equipment, credit

histories, and counterfeit documents uncovered during the

successive raids on McCants’ properties. Buchanan testified

that appellant would provide him with the documents needed to

commit bank fraud, including credit histories and other financial

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information, as well as identification documents manufactured

with pictures of the individuals Buchanan dispatched to the

lending institutions. He further recalled that McCants advised

him to avoid using a particular identity more than three or four

times so as to avoid attracting suspicion, and to ensure that his

cohorts dressed appropriately when they impersonated

legitimate loan-seekers. On cross-examination, Buchanan

reported the pricing scheme McCants imposed. Buchanan

claimed that prices reflected factors like what kind of document

was being transacted, its quality, and even McCants’ mood on

a given day; but Buchanan never alluded to dividing profits from

particular acts of bank fraud or any other fraudulent venture.

After the testimony and oral proffers by each side’s counsel,

the District Court announced its ruling. It began by noting that,

“under the revised presentence report, the total offense level

would be 20.” Tr. 5/11/04 at 7. The court then queried “are we

all in agreement on that,” and the prosecutor responded: “We all

agree that that’s what the presentence report says, but I think

both [defense counsel] and I have disagreements as to that being

applicable.” Id. The court replied that it was using that level as

“the basic figure.” Id.

The court then commenced its analysis. It noted that “one

of the issues – and the Court is going to file a memorandum . . .

is whether or not the defendant in this matter used a

sophisticated means in order to – in the commission of the

offense.” Id. at 8. The court observed that the statutory offense

covers possession of document-making implements. It then

concluded:

Because the sentencing guidelines seem to refer to the

sophisticated means used in covering up or hiding an

offense or relating to the commission of the offense

charged, and I guess an argument can be made as to when

you look at the offense charged, it seems to be possession,

whether that would cover it.

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I have considered that, and the Court is satisfied and

will rule that these were sophisticated means and that the

offense level should be enhanced by two.

This brings then the total offense level to 22, criminal

category III.

Id. at 9. The court further indicated that a sentencing

memorandum would be forthcoming. The court also

emphasized the gravity of producing false military

identification, which had the potential to threaten national

security; in light of this concern, the court enhanced the offense

level by two more points. After each side’s counsel addressed

McCants’ background and character, the court sentenced

McCants to 78 months in prison, followed by three years of

supervised release, as well as $77,852.15 of restitution. Id. at

36. The District Court never made findings to resolve the

factual issues between the parties over disputed portions of the

PIR. Nor did the court ever issue the promised memorandum

explaining its decision.

After the District Court pronounced its sentence, the

prosecutor inquired: “[A]s a housekeeping matter . . . do I

understand the Court to have adopted the presentence report

with respect to our sentencing guidelines, with the additional

two provisions, that being the upward adjustment for

sophisticated means, and a two-level upward departure?” Id. at

41. The court replied, “That is correct.” Id.

II. ANALYSIS

As noted above, Federal Rule of Criminal Procedure

32(i)(3)(B) (2004) (“Rule 32") provides that a sentencing court

must – for any disputed portion of the presentence report or

other controverted matter – rule on the dispute or determine

that a ruling is unnecessary either because the matter will

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not affect sentencing, or because the court will not consider

the matter in sentencing.

The Rule further states that the prescribed determinations must

be appended to any copy of the presentence report made

available to the Bureau of Prisons. FED. R. CRIM. P. 32(i)(3)(C).

We agree with appellant that the District Court’s failure to

adhere to the commands of Rule 32 requires a remand of this

case.

Appellant argues that the District Court transgressed Rule

32 by incorporating the PIR’s recommended sentence as its

“basic figure” without ever making specific factual findings. In

particular, McCants points out that the District Court made no

findings on (1) the existence and scope of McCants’ facilitation

of the Buchanan conspiracy, (2) McCants’ responsibility for the

fraudulent loans allegedly obtained by “Celvin McCants,” and

(3) the number of “access devices” McCants possessed.

McCants argues that, since the PIR contained factual assertions

that were hotly contested by the defendant and the prosecutor,

Rule 32 obligated the trial court to confront the factual disputes

and resolve them on the record. We agree. Key elements of the

PIR’s calculation rely on contentious assumptions. Those

assumptions may be valid, but Rule 32 requires the sentencing

court to spell out its findings on disputed factual matters. Its

failure to do so here impels us to remand for resentencing.

The District Court’s failure to resolve factual contests

violated Rule 32. While we have refrained from mandating a

“bright line rule that every failure of literal compliance with

Rule 32 requires remand for resentencing,” we have remanded

when “the record does not reveal the District Court’s finding on

a serious and potentially pivotal sentencing factor.” United

States v. Chaikin, 960 F.2d 171, 175 (D.C. Cir. 1992). The fact-

finding requirement “serves more than the purely ministerial

function” of transmitting accurate information to the Bureau of

Prisons and Parole Commission; more importantly, “it protect[s]

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a defendant’s due process rights to be sentenced on the basis of

accurate information, and facilitates appellate review by

furnishing a clear record of the resolution of disputed facts.”

United States v. Graham, 83 F.3d 1466, 1477 (D.C. Cir. 1996)

(internal quotations and citations omitted) (alterations in

original). As we have noted, sentences under the Guidelines

“‘must be supported by reasons,’” and that means “‘something

more than conclusions – a distinction important not only to the

defendant whose future is at stake but also to the appellate

process.’” United States v. Childress, 58 F.3d 693, 723 (D.C.

Cir. 1995) (quoting United States v. Edwards, 945 F.2d 1387,

1399 (7th Cir. 1991)).

This case underscores the need for adherence to Rule 32.

The issues presented by McCants’ sentencing raise inescapable

controversies. The appellate court is not in a position to resolve

those controversies in the first instance. Nor are we equipped to

discern the District Court’s view of the facts. McCants has

pointed to several alleged defects with his sentence. All of them

turn on issues of fact. For us to determine whether the

sentencing court properly calculated McCants’ sentence, we

need to know what factual propositions it credited. Were there

no dispute as to any of the operative facts, we might be able to

infer the trial court’s view. But, as we discuss below, the record

assembled before the District Court does not self-evidently

resolve these quandaries. And the District Court’s assurance, in

response to the prosecutor’s “housekeeping” query, that it

intended to adopt the PIR does not resolve the underlying factual

controversies. McCants has called into question the evidentiary

basis for several of the PIR’s recommendations. Thus, this is

not a case in which the findings in the PIR are “‘so clear that the

reviewing court is not left to “second-guess” the basis for the

sentencing decision.’” Graham, 83 F.3d at 1477 (quoting

United States v. Carreon, 11 F.3d 1225, 1231 (5th Cir. 1994)).

The record before us in this case is inadequate for appellate

review.

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McCants has pointed to four sentencing issues with respect

to which the underlying factual predicate is unclear. We

emphasize that our brief discussion of these disputes is meant

only to highlight the factual issues whose resolution must

precede a determination of McCants’ sentence. In other words,

we address these matters only to explain why they remain

obscure. We do not attempt to resolve the factual issues, or even

to offer interpretive guidance to the District Court. “We only

direct the Court to enter the findings required by Rule 32 or state

its non-reliance on the contested matter[s].” Chaikin, 960 F.2d

at 175.

Chief among the controversies left unaddressed by the

District Court was the scope of McCants’ “relevant conduct,”

and, in particular, whether it extends to the bank fraud operation

run by Buchanan. Under the Sentencing Guidelines, an

offender’s relevant conduct will encompass “all acts and

omissions committed, aided, abetted, counseled . . . . or willfully

caused by the defendant,” U.S.S.G. § 1B1.3(a)(1)(A) (2003),

and “in the case of jointly undertaken criminal activity . . . all

reasonably foreseeable acts and omissions of others in

furtherance of the jointly undertaken criminal activity,” id. §

1B1.3(a)(1)(B). Additionally, for certain offenses – including

appellant’s – relevant conduct includes “all acts and omissions

described in subdivisions (1)(A) and (1)(B) above that were part

of the same course of conduct or common scheme or plan as the

offense of conviction.” Id. § 1B1.3(a)(2).

Eleven instances of fraud or attempted fraud against six

financial institutions were included in the PIR’s determination

of McCants’ relevant conduct. According to the allegations in

the PIR, unnamed co-conspirators used documents provided by

McCants to obtain fraudulent loans or lines of credit. PIR ¶¶ 16-

26. No allegation of bank fraud listed in the PIR accuses

McCants of any involvement beyond providing the necessary

credit histories and documents. These 11 offenses allegedly

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resulted in a loss of $110,252.15, and they form a substantial

portion of the losses attributed to McCants by the PIR.

Conduct related to the bank fraud scheme was undeniably

“pivotal” in arriving at McCants’ sentence, but the record is not

clear enough to automatically assign culpability from that

scheme to McCants. This is not to say the record clearly

contravenes the sentence he received, only that crucial facts

remain unsettled. Without the benefit of Rule 32 findings, we

cannot properly assess the sentence McCants received.

The PIR does not specify what provision of the relevant

conduct guideline justifies inclusion of the bank fraud losses.

As noted above, there are three distinct criteria for including

relevant conduct beyond the crime of conviction. The PIR

invokes all three – that is, U.S.S.G. §§ 1B1.3(a)(1)(A),

(a)(1)(B), and (a)(2) – but provides no analysis specific to each

subsection. See PIR at 30-31. The Government has argued that,

in conjunction with the other evidence adduced against

McCants, we can infer that the District Court’s factual findings

warranted inclusion of the bank fraud operation under §

1B1.3(a)(1)(A). With respect to the other relevant conduct

provisions in the Guidelines, the Government maintains that

assignment of responsibility for the bank fraud is clear enough

under § 1B1.3(a)(1)(A) that it is “unnecessary” to address

subsections (a)(1)(B) or (a)(2). Gov’t Br. at 46-47. We address

only the inference that the Government draws from the record

– that the District Court concluded that McCants aided, abetted,

or counseled Buchanan.

To link McCants to the bank fraud under § 1B1.3(a)(1)(A),

the Government leans heavily on the assertion that McCants

“counseled” Buchanan on how to use his illicit materials to

execute bank fraud. As recounted in Buchanan’s testimony, the

counseling he received from McCants consisted of two

admonitions: (1) that “[w]hen you get too many loans at one

place, they start noticing and . . . you’ll either get caught or the

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loan won’t go through,” and (2) that with respect to the

appropriate appearance when attempting to obtain a fraudulent

loan, one “can’t look like someone on drugs going to pick up a

loan.” Tr. 3/3/04 at 83. In addition to this exchange, the

Government points to evidence that McCants provided the

documents used in the fraud. We note also that the record

contradicts the PIR on a critical matter relating to the extent of

McCants’ involvement with the Buchanan conspiracy. The PIR

asserted that McCants “would typically receive a ‘one-third

payment’ for his activities, either at the time he produced a loan

package . . . or after a fraudulent loan was obtained.” PIR ¶ 13.

But Buchanan testified that McCants’ products had bounded

prices ranges, see Tr. 3/03/04 at 96-97, 99, and that the variation

in price “all depends on the workload during that day, workload

meaning that if he’s in a good mood he’ll give it to you for

whatever price,” but on occasions where “he needs some money

. . . then it would be a different price,” Tr. 3/5/04 at 10. There

is nothing to support a finding that McCants received a “one-

third payment for his activities.”

This record simply does not provide any obvious insight

into what facts propelled the District Court’s decision to attach

the losses from the bank fraud conspiracy to McCants. This is

especially troubling because the testimonial evidence seems to

contradict the PIR’s allegation that McCants profited in direct

proportion to the Buchanan conspiracy’s successes. We have no

way to tell how the District Court resolved that inconsistency.

That aside, it is not apparent whether the District Court defined

McCants’ relevant conduct purely on the basis of his

transactions with Buchanan, or if the added involvement of

“counseling” Buchanan tipped the scale.

It is also unclear what findings the District Court relied on

to assign McCants responsibility for the “Celvin McCants”

loans. The PIR’s only discussion of those loans was the

following: “Furthermore, the government indicated that the

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defendant is responsible for two defaulted loans [using the name

Celvin McCants] in the amount of $32,949 . . . .” PIR ¶ 33

(brackets in original). There is no evidence in the record

indicating the basis for attributing these loans to McCants. The

Government argues that McCants conceded the issue below,

because he did not specifically contest the veracity of this

allegation. But this claim is unpersuasive. McCants offered a

counter-calculation of the amount of loss that should be

attributed to him and it did not include the losses associated with

the “Celvin McCants” loans. This was enough to put the

Government – and the District Court – on notice that the issue

was in dispute. Yet the District Court never made findings to

resolve the dispute.

Similarly, the District Court’s failure to heed Rule 32

deprives us of the ability to review the number of “access

devices” – i.e., misappropriated credit cards – it attributed to

McCants. Appellant denies the Government’s allegation that he

sold them to Buchanan in a controlled buy. The District Court

gave no indication as to whether or why it credited the

Government’s account. McCants also argues that the

“obliterated” credit cards found in his possession, accounting for

more than a dozen of the nearly three hundred attributed to him,

cannot count as “access devices” under U.S.S.G. § 2B1.1,

because the absence of an account number renders those cards

incapable of penetrating any credit account. The Government

counters that anything that can be used “in conjunction with” an

account number falls within the statutory definition of “access

device.” See 18 U.S.C. § 1029(e)(1). We have not previously

addressed this question, though two of our sister circuits have

issued potentially divergent opinions. Compare United States

v. Nguyen, 81 F.3d 912 (9th Cir. 1996) (holding that blank credit

cards are access devices), with United States v. Abozid, 257 F.3d

191 (2d Cir. 2001) (holding that blank airline ticket stock is not

an access device as long as it lacks an account number). We

will not engage this issue now. Again, we flag it only to

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underscore the need for written sentencing findings in accord

with Rule 32.

Although the parties urge us to rule on the proper

interpretation of the “sophisticated means” enhancement in

§ 2B1.1(b)(8) of the Guidelines, it would be inappropriate for us

to do so in the absence of more specific factual findings by the

District Court. Appellant asserts that the District Court

inappropriately enhanced his sentence because he utilized

sophisticated technology, whereas the enhancement is meant to

target schemes relying on sophisticated methods of concealment.

The Government contends that, even under that interpretation,

McCants’ operation qualifies for the enhancement since he

operated out of multiple locations and exhibited impressive skill.

Unfortunately, we have no way to discern the District Court’s

view. Its only comments on the subjects, quoted supra, are

cryptic and unspecific. They reveal nothing about the District

Court’s view of the enhancement’s application or the facts that

triggered it in this case.

III. CONCLUSION

For the reasons indicated above, we remand the case for the

District Court to resentence McCants in accord with Rule 32.