United States v. Reginald Clark

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued November 22, 2013 Decided April 4, 2014

No. 11-3072

UNITED STATES OF AMERICA,

APPELLEE

v.

REGINALD CLARK,

APPELLANT

Appeal from the United States District Court

for the District of Columbia

(No. 1:10-cr-00110-1)

Jessica L. Ellsworth, appointed by the court, argued the

cause for appellant. On the briefs were Peter S. Spivack and

Matthew J. Iaconetti, appointed by the court.

Katherine M. Kelly, Assistant U.S. Attorney, argued the

cause for appellee. With her on the brief were Ronald C.

Machen, Jr., U.S. Attorney, and Elizabeth Trosman, Assistant

U.S. Attorney.

Before: ROGERS and TATEL, Circuit Judges, and

RANDOLPH, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge TATEL.

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Concurring opinion filed by Senior Circuit Judge

RANDOLPH.

TATEL, Circuit Judge: Challenging his conviction for

bank and wire fraud, Appellant contends that the district court

erroneously denied his Batson challenge and wrongly

admitted certain evidence. Appellant also argues that the

district court violated the Ex Post Facto Clause by calculating

his sixty-three-month sentence on the basis of guidelines

adopted subsequent to his crimes, applied an unwarranted

aggravating role enhancement, and erred by basing his

$200,000-plus restitution obligation in part on acquitted

conduct. For the reasons set forth in this opinion, we reject

Appellant’s challenges to his conviction, his aggravating role

enhancement, and his restitution obligation. But because the

government concedes that the district court’s retroactive

application of the Sentencing Guidelines violated the Ex Post

Facto Clause, we vacate Appellant’s sentence and remand for

resentencing.

I.

From May 2001 through July 2003, Appellant Reginald

Clark stole thousands of dollars from his employer, Hoya

Federal Credit Union. Here’s how he did it. While working as

Hoya’s accountant, Clark manipulated its accounting system

so that the credit union funded Clark’s withdrawals from his

Hoya account. According to the indictment, Clark executed

sixty-four such fraudulent transactions totaling approximately

$119,280. Clark also arranged two unauthorized wire

transfers from Hoya’s account: one for $40,000 to an account

Clark’s cousin and the cousin’s wife owned jointly; the other

for $60,000 to Clark’s own retirement account. The grand

jury indicted Clark on four counts of bank fraud, 18 U.S.C.

§ 1344, two counts of false entry in federal credit institution

records, id. § 1006, and two counts of wire fraud, id. § 1343.

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For conspiring with his cousin and the cousin’s wife to

execute the $40,000 wire transfer, the grand jury indicted

Clark on one count of conspiracy to commit bank fraud and

wire fraud. Id. §§ 1349, 1344, 1343.

During jury selection, the government used five of its six

allotted peremptory strikes on black jurors: a teacher, a condo

manager, a software tester, a former employee of another

credit union, and a man upset about the legal representation

his cousin had received in an unrelated criminal case. Clark

responded with a Batson challenge, claiming that the

government unconstitutionally struck the black jurors on

account of race. See Batson v. Kentucky, 476 U.S. 79 (1986).

Seeking to determine whether the government allowed non-

black jurors with similar characteristics to serve on the jury,

the district court asked Clark’s counsel whether he had

prepared an analysis comparing the seated and struck jurors.

Counsel explained that he had not, and although the court

granted his request for “a moment” to do so, he never

followed through. Largely due to the absence of this

comparative analysis, the district court rejected Clark’s

Batson challenge, finding that he failed to produce sufficient

evidence to demonstrate that the government engaged in

purposeful discrimination.

At trial, the government presented testimony and

documentary evidence showing that Clark manipulated

Hoya’s check payment system, that he made two

unauthorized wire transfers, and that he used the stolen funds

to pay for personal expenses. In addition to this direct

evidence of guilt, the government elicited testimony from

Hazel Logan, Clark’s supervisor and Hoya’s CEO, explaining

how she discovered the scheme. Over Clark’s objection,

Logan testified that while conducting a routine review of

Clark’s bank account, she noticed that the account reflected a

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$5,500 deposit made at a Hoya ATM and that Clark had failed

to put any money into the ATM to cover the deposit. Logan

then initiated the audit that unearthed the scheme to defraud

Hoya.

The jury convicted Clark on all but two counts: the

conspiracy count, which the government never presented to

the jury and was later dismissed; and the bank fraud count

that alleged a single fraudulent automated bill payment. The

district court sentenced Clark to sixty-three months’

imprisonment. In so doing, the court calculated Clark’s

sentence based on the 2010 Sentencing Guidelines instead of

the Guidelines in effect at the time of the offense and then

applied a two-level aggravating role enhancement. See

U.S.S.G. § 3B1.1(c). Invoking the Mandatory Victims

Restitution Act of 1996 (MVRA), 18 U.S.C. § 3663A, the

court also ordered Clark to pay over $219,000 in restitution—

the entire loss alleged in the indictment, including losses

attributable to the bank fraud count on which Clark was

acquitted.

On appeal and with appointed counsel’s able assistance,

Clark now challenges his conviction on the grounds that the

district court erroneously rejected his Batson challenge and

admitted the ATM evidence, his sentence on the grounds that

the court violated the Ex Post Facto Clause by using the 2010

Sentencing Guidelines and erred by applying an aggravating

role enhancement, and his restitution obligation on the ground

that it included acquitted conduct. We consider each set of

issues in turn.

II.

The Constitution bars the government from using

peremptory challenges to exclude prospective jurors on the

basis of race. See Batson, 476 U.S. at 89; United States v.

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Moore, 651 F.3d 30, 40 (D.C. Cir. 2011). Batson challenges

proceed in three steps. First, the defendant must establish a

prima facie case of discrimination. Next, the government must

offer a race-neutral justification for each challenged strike.

Finally, the court must consider “all of the circumstances that

bear upon the issue of racial animosity” to determine whether

the government engaged in purposeful discrimination. Snyder

v. Louisiana, 552 U.S. 472, 478 (2008). In this case, the

district court was quite skeptical about several of the

government’s strikes. But observing that Clark failed to

present an analysis comparing the struck jurors with the

seated jurors, the court concluded at Batson’s final step that

Clark had offered insufficient evidence to find “that the

government’s . . . strikes were exercised for racial reasons.”

Trial Tr. 10 (Jan. 18, 2011). We review for clear error. United

States v. Gooch, 665 F.3d 1318, 1324 (D.C. Cir. 2012).

Clark first argues that the district court clearly erred by

relying on its own concern about one of the struck jurors—the

teacher—rather than limiting its analysis to the government’s

stated rationale, that it feared teachers would be too inclined

to give defendants second chances. Clark is correct that a

district court may not substitute its own reasons for those

given by the government, see Miller-El v. Dretke, 545 U.S.

231, 251–52 (2005), but he is wrong that the court did so in

this case. Although the district court had its own doubts about

the teacher’s fitness for jury service and was quite skeptical of

the government’s claim that teachers favor defendants, the

court made clear that it based its decision on the government’s

proffered justifications. “I don’t think there is enough here,”

the court explained, “to conclude that the government’s

representations about why the strikes were exercised are not a

genuine representation of the government’s thinking.” Trial

Tr. 10 (Jan. 18, 2011) (emphasis added).

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As to the other jurors, Clark contends that the district

court overlooked clear evidence that the government’s

justifications were pretextual. He maintains that the

government’s reason for striking the condo manager (she

knew too little about issues relevant to the case) and its reason

for striking the software tester (he knew too much) are

necessarily inconsistent and therefore pretextual. Yet as the

government points out, the justifications are in fact consistent.

The government—reasonably in our view—may have wanted

jurors able to follow the case while at the same time fearing

jurors who might bring unwanted expertise into their

deliberations. Likewise, the government worried—again

reasonably—that the former credit union employee would

bring her personal knowledge about credit union operations

into the case and that the juror whose cousin had a bad

defense lawyer could be overly sympathetic to defendants.

Far from committing clear error, the district court took

Clark’s Batson challenge seriously and made a reasonable

decision based on the arguments and facts presented.

For the first time on appeal, Clark now offers the

comparative analysis of struck and seated jurors that the

district court had inquired about, arguing that this analysis

provides powerful evidence of the government’s

discriminatory intent. As Clark concedes, we review this

unpreserved argument for plain error. Gooch, 665 F.3d at

1331–32. But cf. Miller-El, 545 U.S. at 241 & n.2 (reasoning

that comparative-analysis-based arguments are theories about

record evidence rather than new evidence). In the Batson

context, an error is plain if the government’s discriminatory

intent is “manifest, patent, or unmistakable.” Gooch, 665 F.3d

at 1332 (internal quotation marks omitted).

According to Clark, comparisons of the condo manager

(whom the government justified striking based on its concern

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that she lacked sufficient knowledge to follow the accounting

issues in the case) and the software tester (whom the

government justified striking based on its concern that he

might use his expertise to second-guess Hoya’s accounting

software) with several seated non-black jurors sharing these

characteristics reveal incontrovertible evidence of the

government’s discriminatory intent. But as the government

points out, the struck and seated jurors differ in meaningful

ways. With respect to the condo manager, the government had

a nondiscriminatory basis for believing that each of the seated

jurors could better follow the complex accounting issues:

Juror 1282 “handle[d] some financial[s] at work” and had

previously served on a jury, Trial Tr. 39 (Jan. 13, 2011); Juror

1395 was familiar with accounting principles from his work

as an accounting firm lobbyist, see id. at 51–53; and Juror

0488 had a Ph.D. in physics, see id. at 48–49. Likewise, with

respect to the software tester, none of the comparators

revealed similar levels of advanced software expertise: Juror

1124 worked on computer hardware, not software, see Trial

Tr. 87 (Jan. 13, 2011, P.M. Session); Juror 0488 was an

astronomer, not a software specialist, see Trial Tr. 49 (Jan. 13,

2011); and Juror 1210, a prosecutor in the Justice

Department’s intellectual property and computer crimes

section, worked on intellectual property cases, not computer

crimes, see id. at 70. Given these differences between struck

and seated jurors, Clark’s comparative analysis provides no

“unmistakable” evidence of the government’s discriminatory

intent. Gooch, 665 F.3d at 1332 (internal quotation marks

omitted); see also Snyder, 552 U.S. at 483 (cautioning that

“when alleged similarities were not raised at trial . . . an

appellate court must be mindful that an exploration of the

alleged similarities at the time of trial might have shown that

the jurors in question were not really comparable”). Clark has

thus failed to demonstrate that the district court committed

clear or plain error in denying his Batson challenge.

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Clark’s remaining challenge to his conviction fares no

better. He argues that the district court erred by failing to

exclude evidence about the $5,500 ATM transaction as

inadmissible propensity evidence. See Fed. R. Evid. 404(b).

Overruling Clark’s objection, the district court concluded that

the evidence fell outside Rule 404(b) because it was intrinsic

to the charged offenses and relevant to “tell the entire story of

what took place and how this whole thing was uncovered.”

Trial Tr. 232 (Jan. 19, 2011). It is true, as Clark argues, that

we have rejected a “complete the story” exception to Rule

404(b) and held that the “inextricably intertwined” exception

is narrow. United States v. Bowie, 232 F.3d 923, 928–29

(D.C. Cir. 2000). But in this case, we have no need to

determine whether the district court erred because any error,

even if one occurred, was harmless. See Kotteakos v. United

States, 328 U.S. 750, 776 (1946) (holding that

nonconstitutional errors that have no “substantial and

injurious effect . . . [on] the jury’s verdict” must be

disregarded). The government presented overwhelming

evidence of Clark’s guilt—most notably, documents showing

his use of the fraudulently obtained funds to pay for his own

expenses—and the ATM evidence added little to its case.

III.

Clark argues that the district court erred by applying a

two-level enhancement for his aggravating role as “an

organizer, leader, manager, or supervisor of criminal activity

involving fewer than five participants.” U.S.S.G. § 3B1.1(c).

In the district court, Clark objected to the enhancement on the

ground that it rested on the dismissed conspiracy charge. Here

he offers a different argument: that the district court failed to

make the necessary finding that Clark exercised control over

another criminal participant. See United States v. Smith, 374

F.3d 1240, 1250 (D.C. Cir. 2004) (“All persons receiving an

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enhancement [under Section 3B1.1] must exercise some

control over others . . . .” (internal quotation marks omitted)

(alteration in original)). Because Clark’s objection failed to

put the district court and the government on notice that he

disputed the issue of control, Clark has forfeited any

challenge to the sufficiency of the district court’s finding on

this question. See Adams v. Rice, 531 F.3d 936, 945 (D.C. Cir.

2008) (holding that a party forfeits for appeal arguments not

raised before the district court). Our review is thus for plain

error. See United States v. Mahdi, 598 F.3d 883, 888 (D.C.

Cir. 2010).

To justify the enhancement, the district court relied on

the presentence report’s unchallenged finding that Clark “was

the mastermind of his offense,” as well as its own finding that

Clark’s cousin, who siphoned nearly $30,000 from the

$40,000 Clark unlawfully wired to the cousin’s account, was

“involved in th[e] whole event.” Trial Tr. 7 (Aug. 4, 2011);

see Fed. R. Crim. P. 32(i)(3)(A) (providing district court

“may accept any undisputed portion of the presentence report

as a finding of fact”). As Clark emphasizes, we have

previously found “conclusory labels . . . inadequate”

justifications for sentencing enhancements. United States v.

Graham, 162 F.3d 1180, 1183 (D.C. Cir. 1998). But the word

“mastermind” has real meaning: masterminds direct and

control others. See Webster’s Third New International

Dictionary 1390 (1993) (“2: a person who supplies the

directing or creative intelligence for a project or for a group of

persons undertaking a project”). To be sure, the “others”

might be innocent and unwitting participants. Here, however,

we are convinced by the district court’s discussion of Clark’s

cousin’s criminal involvement that the court found that Clark

controlled at least one criminal participant. Because this

justification for the aggravating role enhancement hardly

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“exceeds the limits of our deference,” we see no error, much

less plain error. Smith, 374 F.3d at 1250.

Clark’s Ex Post Facto Clause challenge requires a

different result. The Ex Post Facto Clause prohibits the courts

from applying the Sentencing Guidelines retroactively. See

Peugh v. United States, 133 S. Ct. 2072, 2084 (2013). The

district court sentenced Clark under the 2010 Guidelines for

crimes he committed years earlier. Although Clark failed to

object at sentencing, the government concedes, as it must, that

this amounted to plain error. We shall therefore vacate Clark’s

sentence and remand for resentencing under the proper

Guidelines.

IV.

The Mandatory Victims Restitution Act directs

sentencing courts to order individuals convicted of bank fraud

to “make restitution to the victim of the offense.” 18 U.S.C.

§ 3663A(a)(1). Finding the approximately $219,000 loss

alleged in the indictment—including the losses from the bank

fraud count on which Clark was acquitted—attributable to

Clark’s scheme, the district court ordered him to make

restitution for the entire amount. Clark argues that the court’s

inclusion of losses flowing from the acquitted count violated

Supreme Court and D.C. Circuit decisions that limit

restitution orders to “the offense of conviction.” See Hughey v.

United States, 495 U.S. 411, 413 (1990) (emphasis added);

United States v. Dorcely, 454 F.3d 366, 377 (D.C. Cir. 2006).

In the district court, however, Clark made a very different

argument—that the restitution order lacked sufficient

evidentiary support. To be sure, Clark did refer to his

acquittal, but he never advanced the position he urges here—

that nothing in the MVRA authorizes restitution for acquitted

conduct. Our review is thus again for plain error. See Puckett

v. United States, 556 U.S. 129, 135 (2009).

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Contrary to Clark’s contention, neither of the decisions

he cites clearly forecloses including acquitted conduct in

restitution orders. Although the two decisions do limit

restitution to the “offense of conviction,” neither resolves the

question we face here: whether restitution is appropriate for

acquitted conduct that falls within the scope of other scheme-

based offenses of conviction—here, the other three bank fraud

counts. The district court thus committed no plain error. See

United States v. Laureys, 653 F.3d 27, 32–33 (D.C. Cir. 2011)

(“Rarely do we find an error to be plain where this court has

not ruled on the question.” (internal quotation marks

omitted)).

V.

For the foregoing reasons, we affirm Clark’s

conviction and restitution obligation, vacate his sentence, and

remand for resentencing.

So ordered.

RANDOLPH, Senior Circuit Judge, concurring: I join the

opinion of the court but write separately to say a few words

about § 3B1.1(c) of the U.S. Sentencing Guidelines. It seems to

me to be a mistake to say that the § 3B1.1(c) enhancement

applies if, and only if, the defendant has exercised “control”

over one or more of the participants in the crime.

Section 3B1.1(c) states: “If the defendant was an organizer,

leader, manager, or supervisor in any criminal activity other than

described in (a) or (b), increase [the offense level] by 2 levels.”1

In my view one can be a “leader” or “organizer” within the

meaning of that provision without controlling other persons.

The President of the United States, for instance, is sometimes

called the leader of the Free World, but no one thinks this means

he controls other countries. The commentary accompanying

§ 3B1.1 makes clear that control is just one of the many factors

to be considered in determining whether the defendant was a

leader or organizer. See U.S.S.G. § 3B1.1 application note 4.2

1

Subsections (a) and (b) are as follows:

(a) If the defendant was an organizer or leader of a

criminal activity that involved five or more participants or

was otherwise extensive, increase by 4 levels.

(b) If 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,

increase by 3 levels.

2

Application note 4 to § 3B1.1 instructs that, in determining

whether a defendant is a leader or organizer,

[f]actors 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

2

The court held in United States v. Graham that no one of those

factors is “dispositive.” 162 F.3d 1180, 1185 (D.C. Cir. 1998).

The confusion arises because Graham—a § 3B1.1(b) case,

not, as here, a § 3B1.1(c) case—a few lines later said: “All

persons receiving an enhancement must exercise some control

over others.” Id. Subsection (b) applies only to managers and

supervisors; it does not apply to a defendant who was an

organizer or leader. See U.S.S.G. § 3B1.1(b). Applying that

statement to the entire Guideline, including subsection (c),

would render lack of control dispositive for leaders and

organizers. This would render Graham self-contradictory

because control is just one of the factors to be considered.

I therefore would not treat this one sentence from Graham,

which was dictum as applied to organizers and leaders, as

settling the issue under § 3B1.1(c). Although the sentence has

been sporadically repeated, see, e.g., United States v. Smith, 374

F.3d 1240, 1250 (D.C. Cir. 2004); United States v. Quigley, 373

F.3d 133, 139 (D.C. Cir. 2004), it has hardly become our

consistent approach. Cf. Maj. Op. at 8. We have also repeated,

since Graham, that “[w]hile plainly control is one factor in

determining whether someone qualifies as an ‘organizer or

leader,’ the Guidelines include several other factors.” United

States v. Brodie, 524 F.3d 259, 270 (D.C. Cir. 2008); see also

United States v. Wilson, 240 F.3d 39, 122-23 (D.C. Cir. 2001).

A brief survey of the other circuits’ treatment of § 3B1.1

indicates that “[m]ost courts require that . . . the defendant []

exercise some degree of control over others involved in the

commission of the offense or [that he] have been responsible for

organizing the offense, the nature and scope of the illegal

activity, and the degree of control and authority exercised

over others.

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organizing others for the purpose of carrying out the crime.”

DAVID DEBOLD, PRACTICE UNDER THE FEDERAL SENTENCING

GUIDELINES § 3.04(A)(2)(c) (2013) (emphasis added); see, e.g.,

United States v. Wasz, 450 F.3d 720, 730 (7th Cir. 2006); United

States v. Riley, 335 F.3d 919, 929 (9th Cir. 2003); United States

v. Giraldo, 111 F.3d 21, 24 (5th Cir. 1997). The circuits do vary

somewhat in their approaches. See THOMAS W. HUTCHISON ET

AL., FEDERAL SENTENCING LAW & PRACTICE 1195-97 (2013).

But the approach Clark urges us to adopt would preclude

applying the enhancement when “the defendant played a

coordinating or organizing role,” United States v. Brown, 315

F.3d 929, 932 (8th Cir. 2003) (internal quotation marks and

citation omitted), or when, as here, it is the defendant’s

“expertise alone that made the operation possible,” United States

v. Kelly, 204 F.3d 652, 657-58 (6th Cir. 2000). I cannot

reconcile such an approach with the Guideline.

The record supports the district court’s finding that Clark

was the “mastermind” of this offense, and I agree with the

majority that “[m]asterminds direct and control others.” Maj.

Op. at 9. That is sufficient, though not in my view necessary, to

affirm the two-level enhancement.