United States v. Milan

Opinions of the United

2002 Decisions States Court of Appeals

for the Third Circuit

9-3-2002

USA v. Milan

Precedential or Non-Precedential: Precedential

Docket No. 01-2603

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PRECEDENTIAL

Filed September 3, 2002

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 01-2603

UNITED STATES OF AMERICA

v.

MILTON MILAN

Appellant

On Appeal from the United States District Court

for the District of New Jersey

(D.N.J. Crim. No. 00-194)

District Judge: Honorable Joel A. Pisano

Argued May 20, 2002

BEFORE: BECKER, Chief Judge,

GREENBERG, Circuit Judge, and

BARZILAY, Judge, U.S. Court of International Trade*

(Filed: September 3, 2002)

Richard Coughlin (argued)

Julie A. McGrain

Office of the Federal Public Defender

800 Hudson Square

Suite 350

Camden, NJ 08102

Attorneys for Appellant

_________________________________________________________________

*Honorable Judith M. Barzilay, Judge, United States Court of

International Trade, sitting by designation.

Robert J. Cleary

United States Attorney

970 Broad Street, Room 700

Newark, N.J. 07102-2535

Norman Gross (argued)

Assistant United States Attorney

George S. Leone (argued)

Chief, Appeals Division

Office of the United States Attorney

Camden Federal Building and

United States Courthouse

401 Market Street, Fourth Floor

Camden, NJ 08101

Attorneys for Appellee

OPINION OF THE COURT

GREENBERG, Circuit Judge.

This case comes on before this court on appeal from a

final judgment of conviction and sentence entered in the

district court following defendant-appellant Milton Milan’s

conviction by a jury on 14 counts of mail fraud, wire fraud,

money laundering, and related criminal conspiracies in part

for his activities undertaken while in public office. The

district court sentenced Milan, the former mayor and city

council president of the City of Camden, New Jersey, to 87

months imprisonment.

On appeal, Milan advances three grounds to overturn his

conviction on all counts. First, he contends that under

Matson v. Kentucky, 476 U.S. 79, 106 S.Ct. 1712 (1986),

the district court erred in finding that the government’s

decision to exercise a peremptory challenge to a juror was

not motivated by discriminatory intent. In the alternative,

Milan maintains that the district court misapplied the legal

standards the Supreme Court enunciated in Batson by

improperly deferring to the prosecution’s proffered

legitimate justifications for using three of four of its

peremptory challenges to strike African-American jurors

from the panel. Lastly, Milan suggests that the district

2

court erred by using the phrase "moral certainty" in its jury

charge on reasonable doubt.

Milan also challenges specific counts of his conviction.

First, he argues that we should reverse his conviction on

counts 3 and 9 (wire fraud and conspiracy arising out of

his illegal receipt of monies and other benefits during his

tenure in office) because the government premised its case

largely on testimony from a cooperating witness without

disclosing material impeachment evidence (tape recorded

conversations) in violation of Brady v. Maryland , 373 U.S.

83, 83 S.Ct. 1194 (1963), which imposes a duty on the

government to provide the defense with potential

exculpatory or impeachment evidence. Second, Milan

argues that we should reverse his conviction on counts 3,

9, 15, 16, and 17 because the government improperly

vouched for the credibility of key witnesses whose

testimony advanced Milan’s convictions on those counts.

Finally, Milan maintains that we should vacate his

sentence and remand the case for resentencing because the

district court erred in applying a 3-level upward departure

for Milan’s acts of public corruption under U.S.S.G.

S 2C1.7, Application Note 5, to the final combined offense

level after grouping rather than to the offense level

established for the public corruption charges only.

The panel unanimously agrees that the judgment of

conviction should be affirmed on all counts and thus

unanimously joins in all aspects of the opinion except for

section II. E. "3-Level Upward Departure." Judge

Greenberg, however, believes that the judgment should be

reversed to the extent that it imposed the sentence and

thus is filing a separate opinion dissenting from the

affirmance of the sentence.

I. BACKGROUND

A. Milan’s Crimes in his Private Capacity

The evidence at the trial demonstrated the following.1 In

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1. We point out that Milan does not challenge the sufficiency of the

evidence to support his conviction.

3

October 1992, Milan formed the Atlas Contracting

Company ("Atlas") with his friend, Gholam H. Darakhshan,

to undertake commercial and residential construction

projects in the Camden area. On August 11, 1994, Atlas

obtained a contract for the construction of 13 homes at

Arthur’s Court in Camden. Inasmuch as the contract

required Atlas to secure a performance and payment bond,

it entered into a surety arrangement with Amwest Surety

Insurance Company in which Amwest agreed to issue

bonds for each phase of construction. Amwest, however,

required Atlas to post collateral as a condition for Amwest

issuing the bonds.

To satisfy this obligation to post security, Milan and

Darakhshan borrowed $65,000 in cash from Jose Rivera,

the owner of an automotive parts store which functioned in

part as a front to launder the profits of local drug dealers.

Realizing that Rivera had obtained the loan money from

nefarious activities, Milan and Darakhshan concocted a

scheme to utilize the narcotics-related proceeds without

arousing the suspicions of the Internal Revenue Service to

which, by law, domestic currency transaction reports for

cash deposits of $10,000 or more must be sent.

Specifically, they divided the cash into amounts of less than

$10,000 which they distributed to friends and relatives

who, in turn, transferred the money to Atlas in the form of

bank checks or personal checks. Milan and Darakhshan

also deposited some of the cash directly into an Atlas

account. They then purchased a $60,900 certificate of

deposit from a bank in Camden and assigned it to Amwest

as collateral security. Subsequently, over the course of a

few months, Milan and Darakhshan issued a series of

checks in amounts of less than $10,000 made out from

Atlas to themselves or to various friends and family

members as ostensible "loan repayments."2 Milan and

Darakhshan eventually cashed the checks and repaid

Rivera the $65,000 together with $10,000 in interest.

In addition to money laundering, Milan and Darakhshan

used Atlas to perpetrate insurance fraud. In June 1994 and

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2. Milan and Darakhshan wrote the words "loan repayments" on the

memo lines of some checks.

4

February 1995, Atlas entered into an agreement with AT&T

Capital Leasing Corporation for the lease of two computers,

two printers, and one copy machine. Atlas then secured

commercial property insurance from Selective Insurance

Company to protect against loss or damage to the

machines.

On December 31, 1995, Milan and Darakhshan staged a

sham burglary of the Atlas office, removing property and

breaking a window. They later filed a false stolen property

report with the Camden police and a lost property

worksheet with the insurance company. Atlas received

$4,743.50 from Selective in satisfaction of the false claim.

Milan kept one of the computers for personal use until

August 1997, when he sold it to a former student intern.

B. Milan’s Crimes as a Public Official

Milan was elected a member of the Camden city council

on November 7, 1995, and was elected its president on

January 1, 1996. On May 13, 1997, Milan was elected

mayor of Camden, a position to which he was sworn in on

July 1, 1997.

In March 1996, Milan met Daniel Daidone, an associate

of Ralph Natale, a notorious organized crime boss in

Philadelphia. Natale previously had recruited Daidone and

Caesar Ortiz, a Puerto-Rican businessman and electrical

contractor, to manage and operate Trans-Aero, a

government certified minority-owned business enterprise

which was to compete for government contracts on Natale’s

behalf.

Correctly anticipating that Milan would be receptive to

accepting kickbacks in exchange for helping Trans-Aero

secure business projects in Camden, Daidone delivered an

initial payment of $500 in cash to Milan, a transaction he

reported to Natale. Thereafter, Daidone, acting on Natale’s

behalf, continued to deliver periodic bribes to Milan

(occasionally at his office in Camden City Hall) until Milan’s

arrest in June 1998. All told, Milan received between

$30,000 and $50,000 in cash, including a $1,433 payment

toward a January 1998 Florida vacation for himself and his

then fiance. Milan, in turn, did numerous favors for Natale

and his organized crime associates, including lobbying on

5

their behalf to secure federally-subsidized construction

contracts in a Camden empowerment zone, attempting to

contact the mayor of Cherry Hill, New Jersey, to obtain a

liquor license for a restaurant owned by one of Natale’s

associates, and arranging a meeting between Natale’s

associates and government officials presiding over Camden

waterfront renovation projects.3

In addition to cash, Milan received other improper

benefits during his tenure in public office. On December

16, 1996, Milan arranged to have the title of a 1990

Chevrolet Lumina Van transferred to his fiance from Nick’s

Towing, an outfit which provided towing services to the City

of Camden.4 Milan also obtained approximately ten months

free use of a 1996 GMC Jimmy truck leased to Dominick

Monaco, the owner of Nick’s Towing. On March 27, 1997,

the city council of Camden awarded a contract to Nick’s

Towing to provide towing services for a two-year term at a

contract price not to exceed $480,000. Milan did not

disclose publicly his receipt of these gifts from Nick’s

Towing on his state-mandated financial disclosure

statements.

In June 1997, the James B. Ryan Air Conditioning

Company executed a three-year contract with the City of

Camden for the servicing and maintenancing of air

conditioning and heating systems in various city-owned

buildings. In May 1998, at Milan’s request, the company

installed an air conditioning system at Milan’s personal

residence. Milan did not pay for these services and did not

disclose his receipt of them on his financial disclosure

statements. The services, valued at $3,346, took two men

six days to complete.

In April 1998, a concrete recycling company, Delaware

River Recycling, applied to the Camden County Solid Waste

Advisory Council for a permit to operate a recycling facility.

That same month, Milan asked Robert Casey, the owner of

Delaware River Recycling, to do home improvement work at

_________________________________________________________________

3. The Cherry Hill mayor did nothing improper and did not support the

application.

4. Nick’s effectuated the transfer through a third party.

6

Milan’s private residence. Casey obliged, sending a work

crew to tear down a garage and remove a tree. Casey also

paid $700 for the installation of new carpeting at Milan’s

home. Milan, who did not pay for these services, wrote a

letter in his official capacity on September 3, 1998,

supporting the application of Delaware River Recycling.

Casey forwarded the letter to the Camden County Solid

Waste Advisory Council. As in the other instances we have

recounted with respect to improper benefits, Milan did not

disclose his receipt of these gifts from Casey.

In July 1998, Milan received an estimate from R&G Home

Improvement for the installation of new windows at his

residence. R&G, owned and operated by Ralph Cruz Sr. and

Ralph Cruz Jr., provided a figure that included costs for

materials and supplies but not for labor, with the

anticipation that Milan in turn would take the necessary

steps to expedite payments owed to R&G for work it had

done for the City of Camden. Sure enough, on August 14,

1998 (five days after R&G submitted its estimate), Milan

arranged a meeting among himself, Ralph Cruz Sr., Ralph

Cruz Jr., and the director of the Camden Housing Services

Department to discuss the unpaid bills. From September

until December 1998, R&G installed approximately 25 new

windows at Milan’s home without charging Milan for the

$1,800 in labor costs it incurred.

Milan abused his public office in other, more creative

ways. In April 1997, he established with the New Jersey

Election Law Enforcement Commission a Joint Candidates

Committee ("JCC") to raise campaign funds for three city

council candidates politically affiliated with him. Milan

installed his aide, Milton Bradley, as JCC treasurer. Milan

later informed Bradley that he and several of his political

supporters would be taking a celebratory vacation to Puerto

Rico after the May 1997 city council elections. He then

directed Bradley to finance the trip with funds from the

JCC. Milan and Bradley devised a scheme to disguise the

disbursement as a legitimate business expense for the JCC.

They asked Mark Willis, the owner of the Camden office

building in which Milan’s mayoral campaign headquarters

was located, to draft a fake lease to demonstrate that

monthly lease payments were due from Milan’s campaign

7

even though Milan’s campaign was using Willis’s office

space without charge.

On May 1, 1997, flights and hotel reservations for this

trip were booked through a travel agency for 15 people,

including Milan and his fiance. The group vacationed in

Puerto Rico from May 16 to May 20, 1997, with expenses

charged on the personal American Express account of a

Camden attorney. Upon his return, Milan had Bradley draw

a check for $7,500 on the JCC bank account payable to

Willis’s management company. On June 4, Willis deposited

the check into his corporate bank account and, through a

series of transactions with third parties, obtained $7,500 in

cash proceeds from the check. On June 12, Willis gave

$5,000 to Bradley and $2,500 to Milan. Bradley, in turn,

gave the $5,000 to the attorney as a partial repayment for

vacation expenses.

As a public official, Milan was required under New Jersey

state law to complete an annual financial disclosure

statement detailing his business interests and sources of

income. Milan completed, signed, and mailed those forms

in 1997, 1998, and 1999, but, as we have indicated, failed

to mention his receipt of the benefits we have described.

C. Procedural History

On March 23, 2000, a grand jury sitting in Camden

returned a 19-count indictment against Milan. A

superseding indictment was returned on July 12, 2000.

Counts 1 through 8 charged a scheme to defraud the public

of Milan’s honest services as a public official in violation of

the mail and wire fraud acts, 18 U.S.C. SS 1341, 1343,

1346, and 2. Specifically, counts 1, 4, and 8 involved the

mailing of Milan’s financial disclosure statements, count 2

involved a phone call between Daidone and Milan (during

which Milan asked Daidone to supply him with

"resources"), count 3 involved a January 2, 1998 fax

transmission from a travel agency concerning Milan’s trip

to Florida, and counts 5 and 6 involved Milan’s letter to

Robert Casey supporting the application of Delaware River

Recycling for a recycling permit.

Count 9, involving conduct while Milan was in public

office from March 1996 until June 1998, charged a

8

conspiracy to travel and use interstate facilities to solicit

and accept bribes to influence a public servant in violation

of 18 U.S.C. S 371. Counts 10 and 11 charged Milan with

conspiracy and extortion under 18 U.S.C. S 371 and 18

U.S.C. S 1951(a), alleging that Milan threatened to remove

the municipal public defender from office unless he

contributed $5,000 to a political action committee aligned

with Milan.

Counts 12, 13, and 14 charged Milan with using political

campaign contributions to pay for the Puerto Rico vacation

in violation of the mail and wire fraud acts, 18 U.S.C.

SS 1341, 1343, 1346, and 2. Specifically, count 12 was

predicated on a phone call from a domestic travel agency to

a hotel in Puerto Rico, count 13 on a computer request for

an airline ticket from an airline in Tulsa, Oklahoma, and

count 14 on a mailed $7,000 check payable to a credit card

company.

Counts 15, 16, and 17 charged a conspiracy to structure

currency transactions in violation of 18 U.S.C.S 371, a

conspiracy to commit money laundering in violation of 18

U.S.C. S 1956(h), and money laundering in violation of 18

U.S.C. S 1957(a). These charges pertained to Milan’s

financial transactions involving the $65,000 loan from Jose

Rivera to Atlas Contracting Company. Finally, counts 18

and 19 charged mail fraud in violation of 18 U.S.C.SS 1341

and 2, predicated on Milan’s use of the mail in connection

with his staged burglary of Atlas to collect insurance

proceeds.

Jury selection commenced on October 23, 2000. During

the final selection process Milan’s attorney raised an

unsuccessful Batson objection to the government’s use of

its peremptory challenges. The evidence portion of the trial

began on November 6, 2000, and was concluded on

December 21, 2000. The jury convicted Milan on all counts

except 2, 5, 6, 10, and 11.5

Following the verdict, the court at Milan’s request

removed his trial attorney and appointed the Federal Public

_________________________________________________________________

5. The jury acquitted Milan on counts 10 and 11 and was unable to

reach a verdict on counts 2, 5, and 6.

9

Defender to file post-verdict motions and represent Milan at

sentencing. In May 2001, Milan’s new attorney wrote a

letter to the prosecutor requesting copies of taped

conversations (or evidence documenting their disclosure to

his prior attorney) of Natale during his incarceration from

October to December 1999. The tapes, recorded by the

Bureau of Prisons, allegedly indicated, among other things,

that Natale expected an early release as a result of his

agreement to cooperate with the government. Milan

subsequently moved for a new trial on the counts to which

Natale’s testimony was directed (3 and 9) on the grounds

that the government’s failure to disclose the tapes, germane

for impeachment purposes at Milan’s trial, violated Brady

and the Jenks Act, 18 U.S.C. S 3500. The district court

denied the motion, concluding that the tapes were

sufficiently immaterial such that their non-disclosure did

not undermine the integrity of the verdict to warrant a new

trial.

On June 15, 2001, the district court sentenced Milan to

87 months imprisonment, in part arriving at this figure by

departing upwards 3 levels by reason of Milan’s pervasive

and systematic corruption of a government function. Milan

unsuccessfully objected to the court’s sequencing

methodology, arguing that the departure should have been

added only to the counts grouped as corruption-related

rather than to the combined, total offense level calculated

after grouping. If the court had accepted Milan’s argument

his sentence range would have been lower. The court

entered the judgment of conviction and sentence on June

15, 2001, and Milan subsequently filed a timely appeal. We

have jurisdiction under 28 U.S.C. S 1291 and 18 U.S.C.

S 3742(a), eand the district court exercised subject matter

jurisdiction pursuant to 18 U.S.C. S 3231.

II. DISCUSSION

A. Batson Challenges

In one of his two Batson challenges, Milan argues that

the district court erred in concluding that the government’s

decision to strike one of the jurors was not motivated by

discriminatory intent. We review a court’s finding of fact on

10

this issue for clear error, United States v. Uwaezhoke, 995

F.2d 388, 394 (3d Cir. 1993), and thus will accept its

factual determination unless it "either (1) is completely

devoid of minimum evidentiary support displaying some

hue of credibility, or (2) bears no rational relationship to the

supportive evidentiary data." Haines v. Liggett Group, Inc.,

975 F.2d 81, 92 (3d Cir. 1992) (quoting Krasnov v. Dinan,

465 F.2d 1298, 1302 (3d Cir. 1972)).

Owing to the high publicity surrounding the case, the

district court conducted an individual voir dire, questioning

the 71 prospective jurors directly and allowing the

attorneys to ask follow-up questions. After dismissals for

cause and hardship, the court seated 12 individuals from

the final pre-qualified pool at random. At this point, both

the defense and prosecution initiated their exercise of

peremptory challenges. The government utilized three of its

first four challenges to strike African-Americans, Ms.

Hargis, Ms. Gorrell, and Mr. Robinson, and used one

challenge to strike a Caucasian.6 It also exercised two

peremptory challenges to strike Caucasian potential

alternates.

After the fifth round of peremptories (during which the

government struck Mr. Robinson), Milan raised a Batson

objection at a bench conference. Under Batson and its

progeny, courts should evaluate a claim of an equal

protection violation7 in jury selection using the following

three-step process: (1) has the objector established a prima

facie case by demonstrating a pattern of peremptory

challenges of jurors of a particular race?; (2) if yes, did the

party defending the challenges rebut the prima facie case

by tendering a race-neutral explanation for the strikes?; (3)

_________________________________________________________________

6. Under Fed. R. Crim. P. 24, the government has six peremptories and

the defense ten. Both sides had two peremptories to challenge potential

alternates.

7. In Batson, which involved a state prosecution, the Supreme Court

construed the Fourteenth Amendment’s Equal Protection Clause, which

does not itself govern federal prosecutions. Nonetheless, the Batson

analysis governs this case because the Fifth Amendment which does

apply to the federal government generally requires the same equal

protection analysis as in Fourteenth Amendment cases. See, e.g., United

States v. Leslie, 813 F.2d 658, 659 (5th Cir. 1987) (en banc).

11

if so, has the objector carried his burden of proving

purposeful discrimination, for instance by showing that the

proffered explanation is pretextual. See Hernandez v. New

York, 500 U.S. 352, 358-359, 111 S.Ct. 1859, 1866 (1991)

(citing Batson).

Nevertheless, even before the district court evaluated

whether Milan had presented a prima facie case, the

government, as is common in the context of a Batson

objection, immediately responded by stating a race-neutral

explanation for each of its contested challenges. The

government noted that Ms. Hargis had lived her adult life

primarily in Essex County in northern New Jersey and had

moved to southern New Jersey, where Camden is located,

only three years earlier. Consequently, it stated a concern

that she would not "blend" with the remaining jurors who

were far more familiar with the local geography and had a

higher level of interest in and familiarity with the

community issues relevant to Milan’s trial. The prosecutor

explained that Ms. Gorrell had indicated holding religious

beliefs that interfered with her ability to pass judgment on

other people. Finally, the prosecution emphasized that Mr.

Robinson had substantial difficulty answering a number of

the questions and acknowledged being unsure of what

"impartial" meant. The prosecution elaborated that it was

not confident of his ability to follow the nuances and

complexities of a case which included 19 counts, some

involving fairly intricate financial transactions, over 70

witnesses, and hundreds of exhibits.

The court rejected Milan’s Batson objections, informing

the parties that it would make further rulings after the

completion of jury selection. Thereafter, when revisiting the

issue, the court made the following findings. First, agreeing

that the government’s explanations were indeed facially

neutral with respect to race, the court noted that the

prosecutors had made no statements during voir dire which

would indicate any latent bias against African-Americans.

Second, the court noted that the government had chosen

not to strike three other African-Americans who were

seated in the final jury. Finally, the court made a credibility

determination with respect to the prosecutors, holding that

their reasons were genuine and made in "good faith" rather

12

than being pretextual to camouflage a race-conscious

motive percolating beneath.

Milan now focuses his argument on the finding with

respect to Ms. Hargis. The court, in evaluating the

government’s stated motivation for striking Ms. Hargis --

her inability to "blend" with the other jurors because of her

lack of familiarity with south Jersey -- to some extent

agreed with the defense that the reasoning seemed

somewhat attenuated considering that nothing else in her

background suggested an inability to function adequately

as a juror. See App. at 694. Nevertheless, the court

determined that the prosecution’s reason was sincere and

therefore survived Batson scrutiny.

This finding was not clearly erroneous. To begin with, the

facts underlying the government’s concern were accurate:

leading up to the trial, Ms. Hargis indeed had lived in south

Jersey for a shorter period than any of the 12 initially

seated jurors. Moreover, it was not patently unsound or

unreasonable for the government to prefer a juror with

greater community ties and regional familiarity. 8 We

recognize that the prosecution did not strike two other

jurors with relatively transient ties to the south Jersey

community: Ms. Bond who had resided in the area for only

four years and before that had lived on the west coast and

Ms. Cain who had resided in the area for only six years. Yet

absent further evidence probative of prejudicial motive, this

minor discrepancy,9 particularly in light of the finite

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8. We note that neither we nor the district court must endorse or reject

the logic of the government’s nonracial motive so long as it is deemed

genuine and credible. See Hernandez, 505 U.S. at 365, 111 S.Ct. at

1869 ("In the typical peremptory challenge inquiry, the decisive question

will be whether counsel’s race-neutral explanation for a peremptory

challenge should be believed.").

9. The fact remains that Ms. Hargis had the briefest recent residence of

the three. Our analysis might be different if the reverse were true. See,

e.g., Jones v. Ryan, 987 F.2d 960, 973 (3d Cir. 1993) (rejecting the

prosecutor’s proffered race-neutral explanation for striking black jurors

where the prosecutor did not apply the same rationale to white jurors in

the identical or more extreme position). It also bears mentioning that

Milan struck Ms. Bond and Ms. Cain, albeit in rounds after the

government struck Ms. Hargis.

13

number of peremptories available, does not undermine the

integrity of the district court’s factual finding.

Nothing else in the record, including the nature of the

crimes, the race of the defendant or any witnesses, and the

government’s strikes of Ms. Gorrell and Mr. Robinson

(unassailed on appeal), suggests that the government took

race into account in exercising its strikes. To the contrary,

though it did not exhaust its allocated peremptories, the

government did not strike three of six African-American

jurors.10 In fact, the percentage of African-Americans seated

on the jury appears to have exceeded the percentage of

African-Americans among total venirepersons. Moreover, we

find nothing suspect in the government’s use of the term

"blending," a word that, in some circumstances, conceivably

could be a cue to the presence of a sublimated

discriminatory motive.11 Ultimately, the district court found

the government’s explanation credible, and nothing before

us suggests that we should upset that finding. In short, the

district court’s factual finding regarding Ms. Hargis was not

clearly erroneous.

In his second Batson argument, Milan claims that the

district court disregarded the correct analytical framework

for judging his Batson objections by failing to scrutinize

_________________________________________________________________

10. We recognize that the fact that a prosecutor did not exhaust the

government’s peremptory challenges to exclude all black venirepersons

does not mean that the prosecutor did not exercise any peremptory

challenges in a discriminatory manner. See United States v. Clemons,

843 F.2d 741, 747 (3d Cir. 1988) ("[W]e doubt the significance of

including a single black on a panel if, at the same time, the government

used most of its peremptory challenges . . . to strike blacks with

backgrounds similar to the white jurors ultimately selected.").

11. We realize that a prosecutor might couch a preference for a more

homogeneous jury by accentuating an innocuous characteristic (e.g.,

geography, age, socio-economic status, marital status) which, in the

interest of so-called "jury blending," not coincidentally correlates to

certain demographic realities and may serve to cleave one race from

another. See, e.g., Batson, 476 U.S. at 106, 106 S.Ct. at 1728 (Marshall,

J., concurring) ("A prosecutor’s own conscious or unconscious racism

may lead him easily to the conclusion that a prospective black juror is

‘sullen,’ or ‘distant,’ a characterization that would not have come to his

mind if a white juror had acted identically.").

14

appropriately the race-neutral explanations the prosecution

proffered for its exercise of peremptory challenges. This

argument is distinct from his factual contention with

respect to the government’s challenge to Ms. Hargis.

Typically, we exercise plenary review of a district court’s

application of legal precepts. See Shade v. Great Lakes

Dredge & Dock Co., 154 F.3d 143, 152 (3d Cir. 1998). The

government suggests, however, that our review here is

governed by the more stringent plain error standard

because Milan failed to object to the district court’s

methodology in the district court. See Fed. R. Crim. P. 52(b)

("[p]lain errors or defects affecting substantial rights may be

noticed although they were not brought to the attention of

the court"). Milan counters with the assertion that he did

preserve the claim for appellate review by pressing his

generic discrimination argument, which presumptively put

the court on notice that a failure to apply the correct legal

standards to the facts would be objectionable.

Nevertheless, we need not determine the standard of

review definitively because even under the more expansive

de novo standard Milan’s claim is without merit. The record

explicates that the district court properly applied the three-

prong analysis that Batson and its progeny delineated. In

the first instance, Milan raised an objection when three of

the first four prospective jurors the government struck were

African-American. Then the government, before the court

determined whether the prima facie threshold had been

crossed, quickly articulated race-neutral explanations for

all three challenged venirepersons. The district court, as

required by the strictures of Batson, contemplated the

proffered explanations and the evidence before it and

concluded ultimately that the defense had not carried its

burden of showing purposeful discrimination on the part of

the government. For example, in reviewing the challenge to

Ms. Gorrell, the court, in line with Batson step three, noted

that it did not find "the exercise of that challenge to have

been racially motivated." App. at 693.

Perhaps the court could have articulated more clearly its

basis for finding that the government’s race-neutral

explanations were legitimate and "expressed in good faith."

See App. at 670. Notwithstanding, the court, specifically

15

citing to and quoting Batson as well as our related case

law, United States v. Casper, 956 F.2d 416 (3d Cir. 1992),12

as the proper legal standard under which to analyze the

claim, fulfilled its required constitutional task by evaluating

the government’s reasons against the backdrop of the

record to see whether there had been purposeful

discrimination. Finding no basis to cast doubt on the

government’s race-neutral explanations, the court overruled

Milan’s objection. As no special scrutiny was required,13 the

district court did not commit a legal error.

B. Reasonable Doubt Instruction

Milan argues next that we should reverse his conviction

on all counts because the district court diluted the

constitutionally required standard of proof in its jury

instruction on reasonable doubt. As Milan did not raise this

objection at trial, we review this contention for plain error.

See United States v. Wolfe, 245 F.3d 257, 260-61 (3d Cir.

2001).

At the outset of the trial, the court gave a brief definition

of proof beyond a reasonable doubt as evidence of"such a

convincing character that a reasonable person without

hesitation would rely and act upon it in the most important

of his or her own affairs." App. at 738. The court also

explained the presumption of innocence afforded to Milan

and the burden of persuasion demanded of the government,

with the latter satisfied only on the basis of "evidence that

is produced during the course of this trial." App. at 737.

At the close of the trial, the court instructed the jury in

its final charge as follows, in relevant part:

A reasonable doubt is a doubt which a reasonable

person has after carefully weighing all of the evidence

_________________________________________________________________

12. See App. at 689-95.

13. Milan points to a statement in Uwaezhoke , 995 F.2d at 393, that a

trial court should exercise special scrutiny in the third Batson step when

the government’s explanation would have a disparate impact on a

particular racial group. The Uwaezhoke court, however, immediately

qualified this position, explaining that the existence of a disparate

impact does not alter the legal standard the trial judge should apply. See

id. at 393 n.4.

16

based upon reason and common sense. It is the kind

of doubt that would make a reasonable person hesitate

to act . . . Now, a reasonable doubt is not a possible

doubt or a fanciful doubt. A reasonable doubt is not a

doubt arbitrarily or capriciously asserted by a juror

because of his or her reluctance to perform a difficult

task. It is not a doubt arising from the natural

sympathy which one may have for another . . . it is not

necessary for the government to prove the guilt of the

defendant beyond all possible doubt or to a

mathematical certainty. If that were the rule, few

persons would ever be convicted, however guilty they

might be. The reason is that in this world of ours, it is

practically impossible to be absolutely and completely

convinced of any disputed fact which by its nature

is not susceptible to mathematical certainty.

Consequently, in a criminal case, it is sufficient if the

proofs show that the defendant is guilty beyond a

reasonable doubt, and not beyond all possible doubt.

And I will sum up the concept for you in this way.

Reasonable doubt may be said to exist in any case

when, after careful and impartial consideration of the

evidence, the jurors do not feel convinced to a moral

certainty that a defendant is guilty. If, however, after a

fair, impartial and careful consideration of all the

evidence you are convinced of the guilt of the

defendant beyond a reasonable doubt, then it is your

duty to return a verdict of guilty with respect to that

charge. On the other hand, after such a fair, impartial

and careful consideration of all the evidence, if you

have a reasonable doubt as to the defendant’s guilt,

then it is your duty to find the defendant not guilty of

the particular offense charged. Keep in mind that in

every criminal case, and certainly in this one as well,

the burden is upon the government to prove the

defendant’s guilt beyond a reasonable doubt. The

burden of proving their guilt beyond a reasonable

doubt remains with the government throughout the

case, and it never shifts to the defendant. And this

burden of proof beyond a reasonable doubt extends

and relates to each essential element of the crimes

charged.

17

App. at 3610-12 (emphasis added).

Milan posits error in the court’s equating of proof beyond

a reasonable doubt with "moral certainty" without defining

or contextualizing the phrase. See United States v. Jacobs,

44 F.3d 1219, 1226 (3d Cir. 1995) ("moral certainty" should

not be used in charge). When viewed as a whole, 14 however,

the instructions did not create a reasonable likelihood that

the jury would have believed that it could convict Milan

based on a standard of proof lower than that required by

the Due Process Clause of the Constitution. See Victor v.

Nebraska, 511 U.S. 1, 6, 114 S.Ct. 1239, 1243 (1994).

Rather, we are satisfied that the court’s comprehensive

charge mitigated any taint created by its single, isolated

utterance of the phrase "moral certainty," as it clearly and

repeatedly admonished the jury to consider only the

evidence (rather than its subjective moral sensibilities) and

allocated the burden of proof squarely within the province

of the prosecution (the burden of proof "remains with the

government throughout the case" and "extends and relates

to each essential element of the crimes charged"). Moreover,

the charge explained the meaning of reasonable doubt at

great length, appropriately, and without reference to the

objectionable phrase. We see no reason to doubt that the

jury, guided by these comprehensive instructions, 15 applied

the law correctly in its deliberation.

Milan correctly notes that we expressly have discouraged

use of "moral certainty" language in a reasonable doubt

instruction. See Jacobs, 44 F.3d at 1226. However, the

mere presence of the phrase in a jury charge does not

_________________________________________________________________

14. See United States v. Thayer, 201 F.3d 214, 221 (3d Cir. 1999) (in

evaluating a challenge to jury instructions, "we consider the totality of

the instructions and not a particular sentence or paragraph in isolation")

(quoting United States v. Coyle, 63 F.3d 1239, 1245 (3d Cir. 1995)).

15. We presume that the jury followed the district court’s instructions.

See Francis v. Franklin, 471 U.S. 307, 324 n.9, 105 S.Ct. 1965, 1976 n.9

(1985) (dubbing it a "crucial assumption" underlying our trial system

that jurors carefully follow instructions) (citation omitted). Moreover, the

record is consistent with this presumption, considering that the jury,

after eight days of deliberation, returned a mixed verdict of convictions,

acquittals, and hung counts. See United States v. Gilsenan, 949 F.2d 90,

96 (3d Cir. 1991).

18

render the instructions constitutionally defective. See

Victor, 511 U.S. at 16, 114 S.Ct. at 1248 (engaging in a

case-specific analysis to conclude it not reasonably likely

that a jury understood the words "moral certainty" as

"suggesting a standard of proof lower than due process

requires or as allowing conviction on factors other than the

government’s proof "); see also Johnson v. Alabama, 256

F.3d 1156, 1192 (11th Cir. 2001) ("use of the term ‘moral

certainty’ in a reasonable doubt instruction is not fatal"). As

we are satisfied that the district court’s charge adequately

ensured that the "moral certainty" terminology reasonably

would not be understood to lower the government’s burden,

Milan fails to demonstrate plain error, i.e. an unfair

prejudicial impact on the outcome of the case.16

C. Brady Claim

Milan next argues that the government’s failure to reveal

exculpatory evidence requires that we reverse his conviction

on counts 3 and 9. Our review of the denial of a motion for

new trial on the basis of a Brady argument is de novo with

respect to the district court’s conclusions of law and is

based on the "clearly erroneous" standard with respect to

its findings of fact. See United States v. Perdomo, 929 F.2d

967, 969 (3d Cir. 1991).

Counts 3 and 9 centered around Milan’s receipt of cash

and other benefits from Natale through Daidone from

March 1996 to June 1998. Natale, who signed a

cooperating plea agreement in September 1999 with respect

to two criminal informations, was a principal government

witness at Milan’s trial. Daidone, however, did not testify.

Natale, who also was slated to testify for the government in

a separate organized crime prosecution brought in the

Eastern District of Pennsylvania against Joseph Merlino,

was incarcerated pending Milan’s trial at F.C.I. Allenwood

where the Bureau of Prisons monitored and recorded a

number of his phone conversations.

The defense in the Merlino case learned of the existence

of the tapes and successfully moved for their preservation

and disclosure. R.J. Saturno, an FBI agent who worked on

_________________________________________________________________

16. See United States v. Thayer, 201 F.3d 214, 222-23 (3d Cir. 1999).

19

both the Milan and Merlino cases, subsequently transported

the tapes to the office of the United States Attorney in

Philadelphia.

Before jury selection began in Milan’s trial, an Assistant

United States Attorney from the District of New Jersey

learned of the tapes. Accordingly, the prosecutor contacted

the United States Attorney’s Office in Philadelphia regarding

the tapes and transcripts but was advised that that office,

on the basis of its review of them, determined that they

contained only irrelevant discussions of family matters and

the like. See App. at 3772.

On May 23, 2001, some four months after the completion

of the Milan trial, the government provided Milan’s new

attorney with copies of the tapes, as well as a written

summary of the conversations and transcripts of three

particular conversations. Milan moved for a new trial on the

basis of the tapes on June 6, 2001, but the court denied

the motion during Milan’s sentencing hearing.

On July 9, 2001, the district court issued a

memorandum opinion explaining its denial as follows.

Revising statements made during the hearing, the court

concluded that the government "could have easily reviewed

the tapes and had an obligation to do so" because the

information contained in them was "easily accessible." App.

at 4182, 4185. Nevertheless, the court ruled that Milan’s

defense was not prejudiced by his trial attorney’s inability

to use the tapes in cross-examining Natale. We agree.

Under Giglio v. United States, 405 U.S. 150, 154-55, 92

S.Ct. 763, 766 (1972), the government must disclose

materials that go to the question of guilt or innocence as

well as materials that might affect the jury’s judgment of

the credibility of a crucial prosecution witness. See also

United States v. Bagley, 473 U.S. 667, 676-77, 105 S.Ct.

3375, 3380-81 (1985). However, to warrant a reversal, the

withheld evidence must be material, that is, of sufficient

significance that its suppression deprived the defendant of

a fair trial. See United States v. Agurs, 427 U.S. 97, 108, 96

S.Ct. 2392, 2399 (1976); see also Pennsylvania v. Ritchie,

480 U.S. 39, 57, 107 S.Ct. 989, 1001 (1987) (evidence is

material only if there is a "reasonable probability that, had

20

the evidence been disclosed to the defense, the result of the

proceeding would have been different") (citations omitted).

Portions of the tapes reveal that Natale expected an early

release from prison as a result of his cooperation with the

government. For example, in one conversation with Daniel

D’Ambrosia, a former crime associate, Natale surmises a

likely release in approximately one to two years. See App. at

3840. In another conversation, Natale informs one of his

daughters that he expects to be home "not too far in the

future." App. at 4067. In addition, the tapes demonstrate

that Natale suggested that his involvement in the case

might bring about a lucrative book or movie deal. See App.

at 3922. Milan maintains that the tapes were relevant to

impeach Natale’s credibility by demonstrating his motive to

falsify his connection to Milan to secure a reduced sentence

or a financial windfall.

After a review of the extensive record in this case, we

conclude that the government’s failure to divulge the tapes

did not impair the integrity of the trial as a whole or put the

case in such a different light so as to undermine confidence

in the verdict. At the outset, it bears mentioning that Milan

overstates the potential benefit of the tapes to his defense

inasmuch as they included, inter alia, Natale’s inculpatory

statement that he was "buying Milan," App. at 4131, and a

statement by Natale that "I don’t have to make a story up"

because he had been "promised nothing" from the

government. App. at 4074-75. Furthermore, to the extent

that they demonstrate that Natale once anticipated

government leniency in exchange for his cooperation, the

tapes are undercut by Natale’s subsequent recognition at

his plea colloquy, some five months after the last tape was

recorded, that the district court had discretion to reject any

government U.S.S.G. S 5K1.1 motion for a reduced sentence

or grant the motion and nevertheless limit any reduction.

See id. at 775-76. Likewise, as the district court correctly

noted, the suggestion that Natale had a financial incentive

to lie and capitalize on his crimes is far-fetched considering

that there was no credible evidence of a potential book or

movie deal. In fact, Natale testified during the Merlino case

that he had inflated his prospects when speaking to his

wife and daughter in order to assuage their concerns over

21

mounting financial woes. See Appellee’s Supp. App. at 797-

99. Furthermore, there was an obvious non-financial

reason why Natale would tell his wife and daughter that he

expected to be home soon: to comfort them in a time when

they missed his presence in their lives.

Most importantly, the additional evidence would have

been merely cumulative. See Hollman v. Wilson , 158 F.3d

177, 182 (3d Cir. 1998); United States v. Hill , 976 F.2d 132,

136 (3d Cir. 1992). The government disclosed to Milan a

wealth of impeachment materials concerning Natale,

including his entire criminal history, transcripts of his

testimony before a United States Senate Subcommittee

investigating organized crime, a civil RICO complaint,

scores of FBI 302s, hundreds of intercepted recorded

conversations between Natale and other crime associates,

wiretap affidavits, his cooperation agreement, the two

informations to which he had pleaded guilty, the transcript

of his guilty plea hearing, and an audiotape of a parole

hearing. Amply equipped with materials evincing that

Natale cooperated with the government in return for the

possibility of a reduced sentence, Milan’s trial attorney

exploited this fact on cross-examination:

Attorney: Now, getting back to the plea agreement.

Your understanding is as a result of your

cooperation, the government is prepared to

file what is known as a substantial

assistance motion, known as a 5K1.1,

correct?

Natale: Correct.

Attorney: And that particular motion would allow

you to escape the mandatory life [sentence]

that you’re looking at, correct?

Natale: True.

App. at 1512. In addition, the district court specifically

instructed the jury that in evaluating the credibility of

witnesses it could consider any plea arrangements in which

the government agreed to urge leniency at sentencing in

exchange for witness cooperation during investigation and

trial. See id. at 3607.

22

In that sense, this case is distinguishable from those

relied upon by Milan where the withheld evidence was

material because it deprived the defense of any reasonable

opportunity to pursue a particular avenue of impeachment.

See, e.g., Crivens v. Roth, 172 F.3d 991, 999 (7th Cir. 1999)

(new trial warranted where the state failed to turn over the

criminal history records of its witness for impeachment

purposes); United States v. Service Deli Inc. , 151 F.3d 938,

942-44 (9th Cir. 1998) (new trial required because failure to

disclose information regarding the central government

witness, which included statements attributing inconsistent

testimony to "a stroke which affected his memory,"

completely foreclosed certain impeachment strategies).

Moreover, even without access to the largely redundant

tapes, Milan’s attorney pursued a number of other means

of attacking Natale’s credibility, including highlighting a

prior criminal record that included complicity in more than

a dozen murders. Milan’s attorney also inquired into

Natale’s relationship with a previous Camden city council

president, with whom Natale had met face-to-face on

numerous occasions to bribe. This line of questioning cast

doubt on Natale’s claim that he had to pay Milan off using

Daidone as a middle man in order to avoid public attention.

In short, Milan’s attorney was not precluded from

pursuing any theory of impeachment with respect to Natale.

See United States v. Johnson, 199 F.3d 123, 128 (3d Cir.

1999) (rejecting Brady challenge where the defense

otherwise was allowed to cross-examine prosecution

witnesses on "many areas affecting credibility"). As there

was considerable other evidentiary support to sustain the

conviction on counts 3 and 9,17 Milan is not entitled to

_________________________________________________________________

17. To reiterate, count 3, a wire fraud charge, alleged that Milan carried

out a scheme to defraud the public of his honest services by accepting

a paid golf vacation to Palm Beach, Florida. The government bolstered

Natale’s testimony with travel agency business records showing that

Daidone paid for the trip in cash, testimony from investigators who

witnessed Milan and Daidone board the plane to Florida, testimony from

a hotel employee confirming their arrival, and other evidence to

demonstrate that Daidone was doing and seeking business with the City

of Camden. Count 9 charged a conspiracy to accept illegal payments

23

relief. See, e.g., United States v. Price, 13 F.3d 711, 722 (3d

Cir. 1994).18

D. Improper Vouching

Milan challenges his conviction on counts 3, 9, 15, 16,

and 17 on the ground that the government vouched for the

integrity and strength of its case on these counts. 19

Specifically, Milan complains that there was improper

vouching when the prosecutor introduced testimony about

the district court’s role in approving wiretaps, elicited

testimony about the truthfulness of cooperating witnesses,

and introduced testimony concerning the prosecution of

government witnesses Jose Rivera and Saul Febo before

they decided to cooperate. Because, as he acknowledges,

Milan raised no objection at trial to the alleged vouching,

we review the contention only for plain error. See United

States v. Saada, 212 F.3d 210, 224 (3d Cir. 2000).

Vouching constitutes an "assurance by the prosecuting

attorney of the credibility of a Government witness through

personal knowledge or by other information outside of the

testimony before the jury." United States v. Walker, 155

F.3d 180, 184 (3d Cir. 1998). Vouching runs the danger of

influencing the jury to disregard its fact-finding mandate in

favor of privileging and perhaps deferring to the view of the

evidence as endorsed by a sovereign representative. See

_________________________________________________________________

from Natale in violation of the Travel Act. To demonstrate that Daidone

functioned as an intermediary between Natale and Milan, the

government introduced a tape recording of a March 1996 conversation

between Daidone and Natale discussing Daidone’s first meeting with

Milan, as well as testimony from government agents who witnessed

Daidone exiting Natale’s apartment to meet with Milan, parked nearby.

There was also testimony from the owner of an Italian restaurant to the

effect that Natale paid him approximately $1,000 to cover the cost of a

dinner at the restaurant the previous evening celebrating Milan’s election

as mayor.

18. We do not reach the issue of whether the prosecution had actual or

constructive knowledge of the tapes and transcripts as their suppression

did not materially impair the fairness of the trial.

19. These counts involved testimony of witnesses on whose behalf the

government allegedly vouched.

24

United States v. Young, 470 U.S. 1, 18-19, 105 S.Ct. 1038,

1048 (1985) (vouching for witnesses or expressing personal

opinions concerning guilt of the accused carries"the

imprimatur of the Government and may induce the jury to

trust the Government’s judgment rather than its own view

of the evidence"). Vouching also runs the risk of

engendering a jury belief in the existence of outside

information tending to support the position of the

government. See United States v. Toner, 173 F.2d 140, 142

(3d Cir. 1949) (acknowledging a defendant’s "right to have

his guilt or innocence determined by the evidence presented

against him").

For example, in United States v. Dispoz-O-Plastics, Inc.,

172 F.3d 275, 284 (3d Cir. 1999), we found a prosecutor’s

remark about a policy of the Department of Justice not to

give "two-for-one deals" improper because it was meant to

convince the jury that the prosecutor somehow knew that

the witnesses were telling the truth, i.e., that the

department would not give a deal in return for the two

guilty pleas unless it was convinced that there were two

separate offenses. See also United States v. DiLoreto, 888

F.2d 996, 998 (3d Cir. 1989) (reversing convictions where

the prosecutor attempted to bolster the credibility of its

cooperating witnesses by stating during closing rebuttal:

"We don’t take liars. We don’t put liars on the stand. We

don’t do that").20

While Milan attacks specific and isolated strategic

choices the prosecution pursued at trial, he fails to

demonstrate that a representative of the government gave

inappropriate personal assurances concerning the reliability

of a witness based on facts not before the jury. For

instance, Milan suggests that the prosecutor’s pursuit of

testimony concerning judicial approval for wiretaps 21

_________________________________________________________________

20. United States v. Zehrbach, 47 F.3d 1252, 1267 (3d Cir. 1995) (en

banc), overruled DiLoreto because DiLoreto applied a per se rule in its

analysis. However, Zehrbach did not overrule the result reached in

DiLoreto. See id. at 1255 n.1.

21. The government asked Agent Saturno whether"the wiretaps on

Natale’s residential telephone [were] authorized by a District Court Judge

right here in Camden," to which he replied, "yes." App. at 1163. While we

25

created the "appearance that the very court where the trial

was heard had participated in and approved the

government investigation." Br. at 90. But this evidence,

though of tangential relevance considering that Milan’s

attorney never sought to challenge the government’s use of

wiretap techniques, was nevertheless admissible 22 and,

more significantly, did not involve superfluous, personal

opinions of the prosecutor vouching for a witness. See

Saada, 212 F.3d at 225 (two criteria required to find

vouching are: (1) the prosecutor must assure the jury that

the testimony of a government witness is credible, and (2)

this assurance must be based on either the prosecutor’s

personal knowledge or other information not contained in

the record).

Likewise, with respect to the cooperating witnesses

Natale, Rivera, and Febo, the prosecutor inquired into their

previous convictions and their cooperation agreements,

specifically those aspects requiring truthfulness in

exchange for a leniency recommendation, but never made

any statement that invited a plausible jury inference of

extra-record proof of reliability in the government’s

exclusive possession. See United States v. Ramos , 27 F.3d

65, 67 n.4 (3d Cir. 1994) (no improper vouching where

government merely made reference to the "truthfulness

provision" of a plea agreement). As Milan fails to show that

the prosecutors referred to facts not adduced at trial or

offered personal opinions to bolster the integrity and

believability of their witnesses, he does not carry his

burden of showing prejudice. See United States v. Turcks,

41 F.3d 893, 897 (3d Cir. 1994) (an error is "plain" if it

"seriously affect[s] the fairness, integrity or public

reputation of the judicial proceedings") (citations omitted).

_________________________________________________________________

see no basis to find that there was vouching by reason of this question,

particularly in the absence of an objection at trial, we must say that we

can see no legitimate reason for the reference to"right here in Camden."

We also point out that if the prosecution stated to the jury that the judge

thought that the defendant was guilty the comment might be so

prejudicial as to require a new trial.

22. The defense opened the door by intimating during opening

statements that the government was willing to engage in improprieties --

had made "a pact with devils," App. at 823, in order to convict Milan.

26

E. 3-Level Upward Departure

Lastly, Milan contends that the district court erred when

it applied a 3-level upward departure to his combined

offense level rather than to the public corruption counts

only, which had the effect of increasing his sentence by 16

months.23 On this point, a majority of the panel affirms the

district court; however, Judge Greenberg, the author of the

rest of this opinion, would reverse. The following portion of

this opinion, therefore, represents the views of Chief Judge

Becker as joined in by Judge Barzilay, with Judge

Greenberg offering the reasons for his disagreement in a

separate dissenting opinion, infra.

At sentencing, the court adopted, without objection, the

grouping calculations of the Presentence Investigation

Report (PSR) which, applying the methodology set forth in

U.S.S.G. S 3D1.2,24 trisected Milan’s convictions into

distinct groups according to the nature of the offenses:

Group One, involving Milan’s unlawful financial

transactions concerning the loan from Rivera (counts 15,

16, and 17); Group Two, involving Milan’s crimes as a

public official (counts 1, 3, 4, 7, 8, 9, 12, 13, and 14); and

Group Three, involving the staged burglary of Atlas

Contracting Company and subsequent insurance fraud

(counts 18 and 19).

The government moved for an upward departure on the

grounds that Milan was involved in systematic or pervasive

corruption of a public office which caused a loss of

_________________________________________________________________

23. Our review of the district court’s construction of the Sentencing

Guidelines is plenary. See United States v. Swan , 275 F.3d 272, 275 (3d

Cir. 2002).

24. Section 3D1.1(a) of the guidelines establishes a three-step procedure

for determining the proper offense level in a case that involves multiple

counts of conviction. First, counts that are "closely related" must be

grouped in accordance with the provisions of section 3D1.2. Each group

then is assigned an offense level based on the count with the highest

offense level within that group. See U.S.S.G. S 3D1.3. Finally, if there is

more than one group, section 3D1.4 provides that the combined offense

level is derived by determining "units" for each group and adding offense

level increases for each group to the offense level for the group with the

highest specified offense level.

27

confidence in government. Specifically, U.S.S.G.S 2C1.7,

the guideline used to calculate the adjusted offense level for

the Group Two crimes, which is entitled "Fraud Involving

Deprivation of the Intangible Right to the Honest Services of

Public Officials; Conspiracy to Defraud by Interference with

Governmental Functions," contains within its commentary

Application Note 5, which states:

Where the court finds that the defendant’s conduct was

part of a systematic or pervasive corruption of a

governmental function, process, or office that may

cause loss of public confidence in government, an

upward departure may be warranted. See Chapter Five,

Part K (Departures).

The court granted the government’s motion, adding a 3-

level upward departure to Milan’s combined offense level for

a total base of 27 as follows:

Section 3D1.4

Units

Adjusted Offense Level for Group One: 23

Adjusted Offense Level for Group Two: 18

Adjusted Offense Level for Group

Three: 11

Total Units 1-1/2

Greater Adjusted Offense Level 23

Increase in Offense Level 1

Section 2C1.7 Departure Increase 3

Total Offense Level 27

See PSR at 21-27. With criminal history category I, the

sentencing range was 70 to 87 months, and the court

imposed the maximum term available within the range.

Milan maintains that the district court should have

applied the departure only to the Group Two adjusted

offense level, the group encompassing Milan’s acts of public

corruption to which the departure was applicable, before

applying the multiple-grouping adjustments found in

U.S.S.G. S 3D1.4. Applying the 3-level public corruption

departure only to calculate the adjusted offense level of the

public corruption charges would have yielded the following

results:

28

Section 3D1.4

Units

Adjusted Offense Level for Group One: 23

Adjusted Offense Level for Group Two

(with three-level section 2C1.7

departure applied): 21

Adjusted Offense Level for Group

Three: 11

Total Units 2

Greater Adjusted Offense Level 23

Increase in Offense Level 2

Total Offense Level 25

With a criminal history category I, the sentencing range

under Milan’s proposed methodology would have been 57 to

71 months.

Under U.S.S.G. S 1B1.1 the steps for calculating a

sentence are as follows: (a) determine the applicable

guideline section for each offense from Chapter Two; (b)

determine the base offense level and apply any appropriate

"specific offense characteristics, cross references, and

special instructions" contained in the particular guideline

in Chapter Two; (c) apply the adjustments as appropriate

related to victim, role, and obstruction of justice from Parts

A, B, and C of Chapter Three; (d) repeat steps (a) through

(c) for each count and adjust the offense level accordingly

if there are multiple counts of conviction; (e) apply the

adjustment as appropriate for the defendant’s acceptance of

responsibility from Part E of Chapter Three; (f) determine

the defendant’s criminal history category as specified in

Part A of Chapter Four; (g) determine the guideline range in

Part A of Chapter Five that corresponds to the offense level

and criminal history category previously determined; (h)

determine from Parts B through G of Chapter Five the

sentencing requirements and options related to probation,

imprisonment, supervision conditions, fines, and

restitution; and, (i) "[r]efer to Parts H and K of Chapter Five,

Specific Offender Characteristics and Departures, and to

any other policy statements or commentary in the

guidelines that might warrant consideration in imposing

sentence." U.S.S.G. S 1B1.1(a)-(i). We have held that these

steps are to be applied sequentially by the sentencing

29

court. See United States v. Johnson, 155 F.3d 682, 684 (3d

Cir. 1998) ("The court reads these instructions as providing

a sequence of steps for the court to follow in the order in

which they appear."); United States v. McDowell, 888 F.2d

285, 293 (3d Cir. 1989) (construing S1B1.1 as reflecting

"[t]he intent of the Sentencing Commission . . . that the

Guidelines be applied like a formula; a court . . . should go

down each guideline in order, making the necessary

calculations"). As we will explain infra, we think that

structure applicable here.

Milan contends that the district court erred in applying

the S 2C1.7 Application Note 5 upward departure at step (i)

(after the step (d) grouping) rather than at step (b) (before

grouping). Milan asserts that Note 5 is a departure specific

to S 2C1.7 and not the type of more general,"unguided"

Chapter 5 departure to which step (i) refers. This

conclusion is supported, according to Milan, by the

language of Note 5, which is narrowly written and directed

toward the offense level determination for a S 2C1.7 offense.

For the same reason, Milan submits that applying the Note

5 departure to the adjusted base offense level before

grouping is more consistent with the "punishment fits the

crime" logic of the Guidelines in that the upward departure

for governmental corruption ought to be specifically tied to

that portion of his sentence that relates to his crimes as a

public official.

The government counters by arguing that Milan’s

proposed methodology is inconsistent with the Guidelines’

text. Specifically, the government contends that the Note 5

departure is neither a "specific offense characteristic," a

"cross reference," nor a "special instruction," and therefore

does not fall within the ambit of S 1B1.1 step (b). Rather,

the government contends, Note 5 is simply a reference to

the type of Chapter 5 departure that the sentencing court

may properly consider at step (i), only after the multiple-

groups adjustments have been performed. Furthermore, the

government argues that the district court’s methodology is

more consistent with general Guidelines principles in that

it allows the judge to assess the factors listed in Note 5 only

after the judge has considered all of the information

relevant to determining whether a departure is appropriate,

30

such as the defendant’s criminal history and whether the

defendant has accepted responsibility for his acts.

We hold that the government’s position is correct, and

that the district court did not err in applying Note 5 to

Milan’s sentence after grouping. We reach this conclusion

primarily because we find the text of the Sentencing

Guidelines clear on this point. In particular, we think it

plain that the departure warranted by Application Note 5

does not amount to a "specific offense characteristic,"

"cross reference," or "special instruction," the only three

types of sentencing adjustments to which step (b) explicitly

refers.

Milan has conceded that Note 5 is not a "specific offense

characteristic," see Milan’s Reply Br. at 18, and he has not

raised any argument that Note 5 is a "cross reference," nor

could he reasonably do so in light of the fact thatS 2C1.7

does not include Note 5 within its four provisions--

U.S.S.G. S 2C1.7(c)(1)-(4) -- expressly designated as "cross

references," see United States v. Gay, 240 F.3d 1222, 1232

(10th Cir. 2001) (concluding that the Guidelines’ career

offender provision, U.S.S.G. S 4B1.1, is not a"cross

reference" in part because it is not labeled as such), nor

does Note 5 instruct the sentencing court to apply any

other guideline, which is a requirement under the

Guidelines’ definition of a "cross reference." See U.S.S.G.

S 1B1.5 (defining a "cross reference" as"an instruction to

apply another offense guideline").

We also think it clear that Note 5 does not qualify, as

Milan argues, as a "special instruction," a phrase which is

used as a term of art in the Guidelines. The Guidelines take

care to label "special instructions" expressly as such in

many subsections of Chapter Two. See, e.g., U.S.S.G.

SS 2A3.1(d), 2B1.1(d), 2B4.1(c). Note 5, however, is not

expressly labeled a "special instruction." We apply the rules

of statutory construction when interpreting the Guidelines,

see United States v. Robinson, 94 F.3d 1325, 1328 (9th Cir.

1996), and under the well-established canon of statutory

construction of expressio unius est exclusio alterius, the

Guidelines’ failure to expressly designate Note 5 as a

"special instruction" when this label is conspicuously

affixed to many other provisions within the same chapter is

31

a clear sign that the authors of the Guidelines did not

intend for Note 5 to operate as a "special instruction."

Indeed, all of the provisions prominently labeled as"special

instructions" appear within the text of each Guideline,

unlike Note 5, which appears within the commentary to

S 2C1.7. Even if Milan is correct that it is more "intuitive"

to apply the Note 5 departure, which is for systematic or

pervasive governmental corruption causing loss of public

confidence in government, only to Milan’s offenses that

relate to his crimes as a public official, where the text of the

Guidelines appears clear, as it does here, whatever

"intuition" we may have must yield to the language of the

Guidelines.

Milan argues that even if Note 5 is not expressly

designated as a "special instruction," it is the functional

equivalent thereof, and therefore ought to be treated as

such for the purposes of step (b) of S 1B1.1. We disagree. As

mentioned above, the text of S 1B1.1(b) refers only to

"specific offense characteristics, cross references, and

special instructions," and does not include any sort of

"catch-all" provision for subsections or commentary that,

while different in form, are similar in function to these

three very specifically defined Guideline terms. In contrast,

subsection (i) of S 1B1.1, which is the step at which the

district court applied Note 5, does contain a "catch-all"

provision that refers to "any other policy statements or

commentary in the guidelines that might warrant

consideration in imposing sentence." Moreover, Milan’s

contention that Note 5 is the functional equivalent of a

"special instruction" is simply a restatement of his claim

that Note 5 ought to be applied at step (b) rather than at

step (i); in other words, Note 5 is only a functional

equivalent of a "special instruction" if Milan is correct that

Note 5 should be applied before the grouping adjustment.

For the reasons stated above, we reject this assertion on

the basis of the Guidelines’ clear text.25

_________________________________________________________________

25. As support for his position, Milan cites to United States v. Nguyen,

255 F.3d 1335 (11th Cir. 2001), in which the United States Court of

Appeals for the Eleventh Circuit was called upon to determine when the

sentencing court ought to have applied Application Note 1 of the

32

Moreover, applying the Note 5 departure after grouping is

logical. Sentencing within the range prescribed by the

_________________________________________________________________

commentary to U.S.S.G. S 2A1.1, which provides that a departure may

be warranted in a murder conviction where the defendant did not

intentionally or knowingly cause death (such as in the case of so-called

"felony-murder"): during step (b) of the S 1B1.1 sequence, or after the

determination of the combined offense level, at step (i). Interestingly,

because the departure at issue in Nguyen was a downward rather than

an upward departure, the roles of the parties in Nguyen were reversed:

the government argued for applying the departure only to the particular

offense, and the defendant argued for applying the departure to the

combined offense level. The Eleventh Circuit agreed with the government

and concluded that it was proper for the sentencing court to apply the

departure only to the murder offense at step (b) before determining the

combined offense level.

Nguyen does not dissuade us from concluding that Milan’s argument

is incorrect. As the dissent points out, the court in Nguyen "implicitly"

concluded that the S 2A1.1 Note 1 departure is comparable to "specific

offense characteristics, cross references, and special instructions" for

purposes of S 1B1.1(b). Dis. Op. at 45. The reasoning of the Nguyen

court, however, was only implicit and never explicit, as the court made

no effort to reconcile its conclusion with the plain language of step (b).

Indeed, the Nguyen court addressed this issue in only one paragraph,

see 255 F.3d at 1344-45, and offered only the summary conclusion that

the sentencing court "did not err in first departing downward from the

base offense level for murder and then applying the grouping rules . . . ."

Id. at 1345. Furthermore, Nguyen is arguably distinguishable because it

addressed an application note from an entirely different guideline section

than that presented here. Although the application note considered in

Nguyen, S 2A1.1 Application Note 1, is similar to the application note at

issue here in that it is not expressly labeled as a"special instruction," it

is different in that it makes no explicit citation to "Chapter Five, Section

K (Departures)," as does S 2C1.7 Application Note 5. It may well be,

therefore, that a better argument can be made thatS 2A1.1 Application

Note 1 is a functional equivalent of a "special instruction" than can be

put forth on behalf of S 2C1.7 Application Note 5.

Nguyen illustrates how our holding today may not always be to the

government’s advantage. Rather, as counsel for the government

conceded at oral argument, in cases in which it is a downward departure

rather than an upward departure that is at issue, it would be to the

government’s advantage to have the departure deducted from the

sentence before grouping rather than afterwards. See Trans. of Oral

33

Guidelines is supposed to be the norm, and departures the

exception, see U.S.S.G., Chapter One, Part A, Intro.

Comment 4(b) (departures permitted only when the

sentencing court finds "an aggravating or mitigating

circumstance of a kind, or to a degree, not adequately

taken into consideration by the Sentencing Commission in

formulating the guidelines that should result in a sentence

different from that described" (quoting 18 U.S.C.S 3553(b)).

Therefore it is sensible to first calculate the correct

Guidelines sentencing range before the court determines

whether a sentence within that range provides an

appropriate punishment for the defendant or whether a

departure is necessary. In this sense, Note 5 simply serves

to "flag" for the sentencing judge an aggravating

circumstance likely to occur in a S 2C1.7 offense for later

consideration at the more discretionary departure stage.26

_________________________________________________________________

Argument at 44-45 ("This isn’t always going to hurt the defendant, it

may be that if you get in a situation where there’s going to be a

downward departure, the defendant is better off having the departure

applied after the grouping . . . . [S]o, this isn’t a procedure that always

helps the government . . . ."). The United States Attorney’s Office for the

District of New Jersey, therefore, has apparently made the tactical

decision that it would prefer that these departures be applied after

grouping, a decision which appears to be in conflict with the strategy of

its sister office, the United States Attorney’s Office for the Northern

District of Georgia, in Nguyen.

26. The dissent observes that the Note 5 departure for systematic or

pervasive corruption of government that may cause loss of public

confidence in government is distinct from the S 5K2.7 departure for

"disruption of governmental function." See Dis. Op. at 43 n.7. We agree.

However, we fail to see how this distinction sheds any light on the

question of when in the U.S.S.G. S 1B1.1 sequence to apply the Note 5

departure. The dissent’s reasoning seems to be that since we know that

S 5K2.7 is a departure to be applied at step (i), the fact that Note 5 is

different from S 5K2.7 in terms of the conduct to which it applies

indicates that Note 5 does not apply at step (i). In our opinion, however,

the dissent has taken one distinction between the two provisions -- the

types of conduct to which they apply -- and erroneously inferred from

this distinction another, unrelated distinction-- the point at which to

apply each departure. We see no justification for this inference; the mere

fact that Note 5 and S 5K2.7 apply to different types of conduct does not

indicate to us that they should also apply at different stages of the

S 1B1.1 sequence.

34

Then, when the sentencing court considers Note 5 at step

(i), it may determine the propriety of a departure in light of

full information regarding other factors relevant to the

defendant’s sentence, such as the defendant’s background,

conduct, and character. See U.S.S.G. S 1B1.1(c)-(h).27 In

contrast, under Milan’s scenario, the sentencing court

would be forced to make a departure decision before it had

made any of these findings, which would have the effect of

placing, as the government colorfully observes,"the

departure cart before the Guidelines Range horse."

The dissent believes that even if we are correct that a

Note 5 departure must be applied only during step (i), "it

does not follow logically that the court may apply the

departure only to the final offense level." Dis. Op. at 41.

Rather, the dissent submits, because step (i) directs a

sentencing court only to "refer to," rather than "apply" the

Chapter Five departures, the sentencing court is free to

" ‘refer’ to a provision of the guidelines at step (i) but

nevertheless then ‘apply’ the departure at an earlier step of

its calculations." Id. We find the dissent’s reading of a

supposed distinction between "refer" and "apply" to be

inconsistent with our case law interpreting S 1B1.1 as

imposing a sequential order for the application of steps (a)

through (i). See United States v. Johnson, 155 F.3d 682,

684 (3d Cir. 1998) ("The court reads these instructions as

providing a sequence of steps for the court to follow in the

_________________________________________________________________

27. The language of U.S.S.G. S 5K2.0, entitled "Grounds for Departure

(Policy Statement)," seems to contemplate a phenomenon akin to what

has presented itself here. It notes:

[A] factor may be listed as a specific offense characteristic under one

guideline but not under all guidelines. Simply because it was not

listed does not mean that there may not be circumstances when

that factor would be relevant to sentencing. For example, the use of

a weapon has been listed as a specific offense characteristic under

many guidelines, but not under other guidelines. Therefore, if a

weapon is a relevant factor to sentencing under one of these other

guidelines, the court may depart for this reason.

(Emphasis added.) This excerpt only confirms our conclusion that when

a factor resembles a "special instruction," but is not specifically labeled

as such, the Guidelines intend for it to be considered by the sentencing

court at the departure stage, which is step (i) of the S 1B1.1 sequence.

35

order in which they appear.") (second emphasis added);

United States v. McDowell, 888 F.2d 285, 293 (3d Cir. 1989)

(construing S1B1.1 as reflecting "[t]he intent of the

Sentencing Commission . . . that the Guidelines be applied

like a formula; a court should go down each guideline in

order, making the necessary calculations") (emphasis

added). Under the dissent’s proposed reading, step (i)

departures could be applied retroactively at step (b),

thereby creating an end-around to our requirement that the

steps of S 1B1.1 be applied in strict sequential order. While

we recognize that, as the dissent correctly observes, neither

Johnson nor McDowell considered whether all of the steps

of S 1B1.1 ought to be applied in sequential order, we see

no logical reason why the rule endorsed in each decision

should not extent to subsection (i).

Moreover, we think that the dissent is incorrect in its

view as to why the authors of the Guidelines use the term

"refer to," rather than "apply," in step (i). The departures

referenced in step (i) are discretionary in nature. See United

States v. Kikumura, 918 F.2d 1084, 1110 (3d Cir. 1990)

(noting that district courts have a "substantial amount of

discretion" in deciding whether to depart). It is for this

reason (and, as far as we can discern, this reason alone)

that the Guidelines instruct the district court merely to

"refer to" the departure provisions. "Refer" is defined by

Webster’s as "to direct attention," Webster’s Third New Int’l

Dict. 1907 (Phillip B. Gove ed., 1966), and this is precisely

what step (i) intends to do -- direct the attention of the

sentencing judge to the appropriate factors to be considered

in deciding whether to depart. "Refer to," therefore, is a

more appropriate term for the inherently discretionary

exercise of departing than "apply," which is defined by

Webster’s as "to put into effect," id. at 105, and connotes a

rote, mechanical, non-discretionary execution of duties. We

believe that it is for this reason, and not for the reasons

offered by the dissent, that step (i) uses "refer to" instead of

"apply."

For the foregoing reasons, we hold that the district court

was correct to apply the Note 5 departure at step (i), after

36

the grouping of the counts, and we will therefore affirm the

sentence.28

III. CONCLUSION

In accordance with our reasoning set forth above, we will

affirm the judgment of conviction and sentence entered

June 15, 2001.

_________________________________________________________________

28. Finally, we note that, as our dissenting colleague Judge Greenberg

pointed out during a colloquy with government counsel at oral argument,

had the sentencing court applied the Note 5 departure at step (b) rather

than step (i), the court still could have arrived at the same final sentence

had it been willing to depart seven, rather than three, levels for Milan’s

pervasive or systematic corruption. The following represents the

hypothetical calculation:

Section 3D1.4 Units

Adjusted Offense Level for Group One: 23

Adjusted Offense Level for Group Two

(with seven-level section 2C1.7 departure applied): 25

Adjusted Offense Level for Group Three: 11

Total Units 27

Greater Adjusted Offense Level 25

Increase in Offense Level 2

Total Offense Level 27

The practical import of our holding, therefore, may be limited in that

it is possible for the sentencing court to reach the same final sentence

under either Milan’s or the government’s proposed methodologies.

However, there is, without doubt, importance in our deciding by which

route it is that the district court arrives at its final sentence. As defense

counsel explained at oral argument, while it would have been possible

for the sentencing court to impose the same sentence under Milan’s

method, in doing so the court would have had to"justify" the propriety

of upwardly departing seven levels rather than merely three, which may

have been difficult for the sentencing court to do. See Trans. of Oral

Argument at 61-62. Moreover, as we explained above, by departing at

step (i) rather than at step (b), the sentencing court has the benefit of

having already considered all of the other factors listed in subsections (c)

through (h) that are relevant to the defendant’s sentence.

37

GREENBERG, Circuit Judge, dissenting:

The majority rejects Milan’s argument that the district

court erred when it applied a 3-level upward departure to

his combined offense level rather than to the public

corruption counts only. I, however, dissent on this point.

As the majority indicates, at sentencing the court

trisected Milan’s convictions into distinct groups: Group

One, involving Milan’s unlawful financial transactions

concerning the loan from Rivera (counts 15, 16, and 17);

Group Two, involving Milan’s crimes as a public official

(counts 1, 3, 4, 7, 8, 9, 12, 13, and 14); and Group Three,

involving the staged burglary of Atlas Contracting Company

and subsequent insurance fraud (counts 18 and 19).

The government moved for an upward departure on the

grounds that Milan was involved in a systematic or

pervasive corruption of a public office which caused a loss

of confidence in government on the basis of Application

Note 5 of the commentary to U.S.S.G. S 2C1.7, 1 the

guideline used to calculate the adjusted offense level for the

Group Two crimes, which states:

Where the court finds that the defendant’s conduct was

part of a systematic or pervasive corruption of a

governmental function, process, or office that may

cause a loss of public confidence in government, an

upward departure may be warranted. See Chapter Five,

Part K (Departures).

(emphasis in original). The court granted the motion,

adding a 3-level upward departure to Milan’s combined

offense level for a total base of 27 as follows:

Section 3D1.4

Units

Adjusted Offense Level for Group One: 23

Adjusted Offense Level for Group Two: 18

Adjusted Offense Level for Group

Three: 11

Total Units 1-1/2

_________________________________________________________________

1. Entitled "Fraud Involving Deprivation of the Intangible Right to the

Honest Services of Public Officials; Conspiracy to Defraud by Interference

with Governmental Functions."

38

Greater Adjusted Offense Level 23

Increase in Offense Level 1

Section 2C1.7 Departure Increase 3

Total Offense Level 27

See PSR at 21-27. The total offense level when combined

with a criminal history category I, yielded a sentencing

range of 70 to 87 months. The court then imposed an 87-

month sentence.

As the majority indicates, Milan maintains that the

district court should have applied the departure only to the

Group Two adjusted offense level, the group encompassing

Milan’s acts of public corruption to which the departure

was applicable, before applying the multiple-grouping

adjustments found in U.S.S.G. S 3D1.4. Applying the 3-level

public corruption departure only to calculate the adjusted

offense level of the public corruption charges would have

yielded the following results:

Section 3D1.4

Units

Adjusted Offense Level for Group One: 23

Adjusted Offense Level for Group Two

(with three-level section 2C1.7

departure applied): 21

Adjusted Offense Level for Group

Three: 11

Total Units 2

Greater Adjusted Offense Level 23

Increase in Offense Level 2

Total Offense Level 25

The total offense level of 25 combined with a criminal

history category I would have yielded a sentencing range of

57 to 71 months.

I believe that Milan’s approach is correct and thus I

dissent on this point. As the majority sets forth, under

U.S.S.G. S 1B1.1, the sequence for calculating a sentence is

as follows: (a) determine the applicable guideline section for

each offense from Chapter Two; (b) determine the base

offense level and apply any appropriate "specific offense

characteristics, cross references, and special instructions"

contained in the particular guideline in Chapter Two; (c)

39

apply the adjustments as appropriate related to victim, role,

and obstruction of justice from Parts A, B, and C of

Chapter Three; (d) repeat steps (a) through (c) for each

count and adjust the offense level accordingly if there are

multiple counts of conviction; (e) apply the adjustment as

appropriate for the defendant’s acceptance of responsibility

from Part E of Chapter Three; (f) determine the defendant’s

criminal history category as specified in Part A of Chapter

Four; (g) determine the guideline range in Part A of Chapter

Five that corresponds to the offense level and criminal

history category previously determined; (h) determine from

Parts B through G of Chapter Five the sentencing

requirements and options related to probation,

imprisonment, supervision conditions, fines, and

restitution; and, (i) "[r]efer to Parts H and K of Chapter Five,

Specific Offender Characteristics and Departures, and to

any other policy statements or commentary in the

guidelines that might warrant consideration in imposing

sentence." U.S.S.G. S 1B1.1(a)-(i).

The government interprets section 1B1 as requiring a

district court to apply any departures that do not qualify

explicitly as "specific offense characteristics, cross

references, and special instructions" (which are considered

during step (b) in calculating the offense level) during the

last step in the process and thus only after grouping and

only to the combined, total offense level. Thus, goes the

argument, inasmuch as the section 2C1.7, Application Note

5 departure for systematic or pervasive corruption is part of

the "commentary in the guidelines" but not a"specific

offense characteristic," "cross reference," or "special

instruction," the court may apply it only after completing

the grouping calculations during step (i) listed above. The

majority accepts the government’s approach.

I believe, however, that the government’s position is off

the mark. To begin with, the text of the guidelines is more

ambiguous than the government posits. Accepting arguendo

the government’s initial premise that a section 2C1.7,

Application Note 5 departure must be applied like a

Chapter 5, Part K departure only during step (i) because it

does not appear under any of the section 2C1.7 headings of

"specific offense characteristic," "cross reference," or

40

"special instruction,"2 it does not follow logically that the

court may apply the departure only to the final offense

level. U.S.S.G. S 1B1.1(i) directs a court simply to "refer"3 to

the Chapter 5, Part K departures and any other policy

statements or guideline commentaries before settling on a

final sentence. However, the guidelines do not dictate

rigidly how or at what point in the process the departure is

to be applied. In marked contrast, the section 1B1.1

Application Instructions very clearly instruct a court to

"[a]pply" any victim, role, and obstruction of justice

adjustments during step (c) after calculating the base

offense level4 and to "[a]pply" any acceptance of

responsibility adjustment during step (e) after applying the

grouping rules to determine the total offense level. 5 See

United States v. McDowell, 888 F.2d 285, 293 (3rd Cir.

1989) ("With respect to the adjustment for acceptance of

responsibility, the Guidelines specify that this adjustment

should be made only after the counts are combined.")

(emphasis added). Plainly the court can "refer" to a

provision of the guidelines at step (i) but nevertheless then

"apply" the departure at an earlier step of its calculations.6

_________________________________________________________________

2. The government also emphasizes the fact that Application Note 5

expressly references "Chapter Five, Part K (Departures)." But, this could

mean one of two things: either that an Application Note 5 departure is

a type of Chapter 5, Part K departure or that it is analogous to one for

purposes of the general policy considerations applicable to all

departures. See United States v. Reyes, 239 F.3d 722, 746 (5th Cir.

2001); see also The Bluebook: A Uniform System of Citation (Columbia

Law Review Ass’n et al. eds., 17th ed., The Harvard Law Review Ass’n

2000) at 22-23 (the signal "see" demonstrates that the cited authority

"clearly supports the proposition," drawing an"inferential step between

the authority cited and the proposition it supports." However, "see" does

not reflect that "the proposition is . . . directly stated by the cited

authority" rather than merely following from it).

3. Emphasis added.

4. U.S.S.G. S 1B1.1(c) (emphasis added).

5. U.S.S.G. S 1B1.1(e) (emphasis added).

6. To the extent that I accept for purposes of argument that a sentencing

court must consider a section 2C1.7, Application Note 5 departure

during step (i), I am consistent with our precedents holding that steps (a)

through (i) are applied in a strict sequential order. See, e.g., United

41

Furthermore, though it does not appear under the

heading "specific offense characteristic,""cross reference,"

or "special instruction," a departure for systematic or

pervasive corruption of a government function is identified

within the public corruption guideline itself, section 2C1.7,

not within Chapter 5, Part K. Listed as an "Application

Note" in the commentary, it expresses the position of the

Sentencing Commission that a court, in aggravating

circumstances such as those present here, may consider

adjusting the sanctions (i.e. increasing the offense level)

specifically for corruption-related offense conduct that falls

within the scope of Section 2C. That is to say, the

placement of the public corruption departure within the

_________________________________________________________________

States v. Johnson, 155 F.3d 682, 684 (3d Cir. 1998); McDowell, 888 F.2d

at 292-93. Thus, the court makes the necessary calculations under each

step in order (choosing the guideline, determining the base offense level,

applying adjustments, etc.) until arriving at the final step, step (i). At this

point, the court considers (i.e. "refer[s] to") the Specific Offender

Characteristics and Departures of Chapter Five as well as any other

policy statements or commentary in the guidelines before imposing

sentence. Once the court makes that consultation, it literally fulfills step

(i) in keeping with our sequential-order rule as well as fundamental

canons of statutory interpretation. See, e.g., United States v. Wong, 3

F.3d 667, 670 (3d Cir. 1993) ("As with statutory language, the plain and

unambiguous language of the Sentencing Guidelines affords the best

recourse for their proper interpretation."). Under this approach, any

course of action taken by the court after that consultation is not cabined

by the sequential methodology of section 1B1.1. Certainly there can be

no doubt that in concluding infra that a section 2C1.7, Application Note

5 departure is to be applied during step (b) as the functional equivalent

of a "specific offense characteristic," "cross reference," and "special

instruction," I am not in conflict with our precedents. Moreover, one

plausibly can argue that our precedents do not stand for the proposition

that the entirety of the Sentencing Guideline Application Instructions are

to be applied in the order in which they appear. Johnson actually stated

only that subsections (a)-(g) provide a rigid sequence of steps. See 155

F.3d at 683-84. Likewise, McDowell held only that an adjustment for

acceptance of responsibility under step (e) must be applied after the

combined offense level has been calculated in order pursuant to steps

(a)-(d). See 888 F.2d at 292-93. The cases simply do not address the

question of whether the serial method of applying section 1B1.1 extends

to step (i).

42

Chapter 2 public corruption guideline itself rather than

within the generic rubric of Chapter 5 strongly suggests

that the Commission intended for the departure to be

considered at the moment the court consults the section

2C1.7 guideline to calculate the offense level for pertinent

crimes.7 A contrary reading, on the other hand, confounds

a uniform, systematic reading of the guidelines by virtue of

a consequently scattershot application, with some portions

of a given guideline applied in computing the offense level

and others applied at some later stage in the process.

The point I make is consistent with the Sentencing

Commission’s contemplation of two distinct types of

departures: those in which "the guidelines provide specific

guidance for departure by analogy or by other numerical or

non-numerical suggestions" and those catch-all departures

that "remain unguided," resting either upon"grounds

referred to in Chapter Five, Part K (Departures) or on

grounds not mentioned in the guidelines." U.S.S.G., ch. 1,

pt. A, 4(b). So-called "guided departures"-- where a

guideline or related commentary suggests that a departure

may be warranted under certain specific circumstances

considered by the Sentencing Commission8 -- "are more

akin to adjustments, such as those in Chapters Two and

Three, which judges use to calculate the applicable

Guidelines range, rather than a departure from the

Guidelines range." Michael S. Gelacak et al., Departures

Under the Federal Sentencing Guidelines: An Empirical and

Jurisprudential Analysis, 81 Minn. L. Rev. 299, 315 (1996);

_________________________________________________________________

7. In fact, Chapter 5 already provides for an analogous departure in

circumstances where a "defendant’s conduct results in a significant

disruption of a governmental function." U.S.S.G.S 5K2.7. At first glance,

the sweeping language of section 5K2.7 would seem to encompass the

departure formulated in Application Note 5 of section 2C1.7. Yet, as even

the government conceded at oral argument and as the majority

acknowledges, the two departures are indeed distinct, a circumstance

which I find indicative of the drafters’ understanding that the more

particularized section 2C1.7, Application Note 5 departure is to be

applied only in the context of the precise guideline in which the

Sentencing Commission deliberately situated it.

8. See, e.g., U.S.S.G. S 2B1.1, Application Note 15; U.S.S.G. S 2D1.1,

Application Note 14; U.S.S.G. S 2G1.2, Application Note 12.

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see also Bruce M. Selya & Matthew R. Kipp, An

Examination of Emerging Departure Jurisprudence Under the

Federal Sentencing Guidelines, 67 Notre Dame L. Rev. 1, 11

(1991) (A "guided" departure involves "instances in which a

guideline or related commentary suggests that under

particular circumstances a departure is warranted.").

Moreover, the application of a section 2C1.7, Application

Note 5 departure after completion of the grouping analysis

lends itself to untenable outcomes. In this case, for

instance, it resulted in the district court’s enhancing

Milan’s punishment for crimes temporally and

substantively unrelated to his abuse of public office. It

created a sentencing anomaly whereby, simply by opting to

try distinct charges together,9 the government was able to

bootstrap a 3-level public corruption departure to the

unconnected money laundering charge which drove the

guideline range (an adjusted offense level of 23 as opposed

to 18 for the corruption counts). Put differently, the court

in essence enhanced the money laundering convictions

(Group One), whose guideline range was calculated

separately under Chapter 2, Section S, on the basis of an

offense-specific departure contained in an unrelated section

of the guidelines concerning public corruption. This

methodology contravened an express design of the grouping

rules to "limit the significance of the formal charging

decision." U.S.S.G. ch. 3, pt. D, Introductory Commentary.

See also U.S.S.G. ch. 1, pt. A, 4(a) ("the Commission has

written its rules for the treatment of multicount convictions

with an eye toward eliminating unfair treatment that might

flow from count manipulation"); U.S.S.G. ch. 1, pt. A, 3 (the

Sentencing Guidelines promote horizontal uniformity in

sentencing by requiring that similarly situated defendants

are sentenced similarly).

In the closest case for comparison of which I am aware,

United States v. Nguyen, 255 F.3d 1335, 1345 (11th Cir.

2001), the Court of Appeals for the Eleventh Circuit

confronted a similar issue with respect to applying a

downward departure under U.S.S.G. S 2A1.1, Application

_________________________________________________________________

9. Of course, the consolidated trial in itself resulted in an increased

combined offense level under the grouping rules.

44

Note 1, which provides that a departure may be warranted

in a murder conviction where the defendant did not

intentionally or knowingly cause death. In Nguyen, one of

the defendants was convicted of multiple counts in a RICO

conspiracy, including felony murder. At sentencing the

district court calculated the offense level under section

2A1.1, departed downward 6 levels pursuant to Application

Note 1, and then applied the grouping rules to determine

the combined offense level. See Nguyen, 255 F.3d at 1344-

45.

On appeal, the defendant advanced the government’s

position in this case, namely that the district court first

should have grouped the offenses and then applied the

downward departure to the combined offense level. The

court of appeals disagreed, holding that the section 2A1.1,

Application Note 1 departure was to be considered in the

aforementioned step (b) base offense level determination.

See id. at 1345. In other words, the court implicitly

concluded that a departure identified in the commentary to

an offense guideline is comparable to "specific offense

characteristics, cross references, and special instructions"

for purposes of U.S.S.G. S 1B1.1(b), and thus properly is

considered in determining the base offense level before

grouping. While the majority indicates that Nguyen does

not dissuade it from concluding that Milan’s argument is

incorrect and notes that the Nguyen court addressed the

issue in only a single paragraph, still the Nguyen ruling is

clear and I see no escape from a conclusion that by

reaching our result we are creating a conflict between two

circuits. Of course, as the majority points out, the conflict

reflects an apparent rift between the United States

Attorneys’ offices in New Jersey and the Northern District of

Georgia.10

Overall, I am satisfied that a section 2C1.7, Application

Note 5 departure for systematic or pervasive corruption of

a government function, like "specific offense characteristics,

cross references, and special instructions," may be applied

_________________________________________________________________

10. I do not doubt, however, that sophisticated defense attorneys reading

the opinions here and in Nguyen will conclude that the actual rule is

"heads, the government wins, tails the defendant loses."

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to adjust only the base offense level of the specific,

corruption-related offenses to which it applies. Thus, I

believe that the district court erred when it applied the 3-

level departure to a final combined offense level after

applying the grouping methodology to multiple and

disparate counts. Consequently, I dissent on this point.

A True Copy:

Teste:

Clerk of the United States Court of Appeals

for the Third Circuit

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