United States v. Wright

United States Court of Appeals

Fifth Circuit

F I L E D

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT August 9, 2007

Charles R. Fulbruge III

Clerk

No. 05-10894

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

versus

DUNYELL LASALLE WRIGHT,

Defendant-Appellant.

--------------------

Appeal from the United States District Court

for the Northern District of Texas

--------------------

Before HIGGINBOTHAM, DAVIS, and WIENER, Circuit Judges.

PATRICK E. HIGGINBOTHAM, Circuit Judge:

Defendant Dunyell Wright plead guilty to wire fraud stemming

from a scheme which defrauded mortgage lenders. He challenges the

district court’s enhancements to his sentence for obstruction of

justice, abuse of position of trust, and use of sophisticated

means, as well as its finding of relevant conduct and order of

restitution. We vacate the sentence and remand for resentencing.

I

Defendant Dunyell Wright founded MFG Financial Services, a

mortgage brokerage, in Arlington, Texas in November of 2001. From

December 10, 2002 through January, 2003, Wright worked with David

Hale to fraudulently secure a mortgage in Hale’s name, the

purchased house to be used by Hale and his partner K&B One Stop

Real Estate Services as part of a business venture. As part of the

scheme, Wright misstated Hale’s creditworthiness on applications to

WMC Mortgage Corporation, the eventual lender, secretly used his

own funds to pay the closing costs, and used a cashier’s check from

his account to pay the down payment, then submitted a copy of the

check to WMC that had Hale’s name on it to imply that Hale had paid

the down payment. All of this, of course, was to ensure that Hale

was approved with a good rate, increasing Wright’s commission, and

possibly garnering him a side payment. Chase Home Finance

eventually purchased the mortgage from WMC and lost $104,000 on it.

As part of another scheme, Damon Tippie sought to purchase a

house, which K&B would then turn into an assisted living center,

after which K&B would pay Tippie a salary and pay Tippie’s mortgage

for six months. Tippie, who knew he didn’t have the means to get

the required $750,000 mortgage, was told by K&B to work with

Wright. Wright again performed his sleight of hand. Chase Home

Finance eventually purchased this mortgage as well, suffering a

$149,727 loss.

Following Wright’s indictment, FBI Special Agent Frank Super

found Wright at an apartment in Grand Prarie, Texas. After

knocking on the door, Wright appeared and initially denied his

identity. After Wright admitted his identity, Super advised him of

the warrant for his arrest. While standing in front of the door,

Super told Wright to get dressed because he was going to be

2

arrested and transported to jail in Forth Worth. Wright briefly

argued with Super, then abruptly closed and locked the door. Super

called local police, who arrived fifteen minutes later and knocked

on the door. They suspected Wright was inside because they heard

noises and saw the blinds move. Sometime later, the police

forcefully entered the house and determined that Wright had earlier

fled out the back door. Wright remained a fugitive until his

capture in Irving, Texas six weeks later.

The Government charged Wright with three counts of bank fraud,

one count of false use of a Social Security Number, and one count

of wire fraud. Wright eventually plead guilty to the last count

without a plea agreement. The PSR concluded that the loss amount

was $270,446, representing the two losses to Chase Home Finance and

about $16,755 of losses to other banks alleged in counts one

through four. It then added two levels for obstruction of justice

based on Wright’s flight, two levels for abuse of trust, and two

levels for use of sophisticated means. After deducting three

levels for acceptance of responsibility, the range was 70 to 87

months.

Wright objected to all three enhancements and the inclusion of

the Tippie loss and the $16,755 in the loss amount. Regarding the

obstruction of justice enhancement, Wright argued that “the

Application notes for U.S.S.G. § 3C1.1 specifically exclude

‘avoiding or fleeing from arrest’ as grounds for an enhancement for

obstruction of justice.” In its response, the Government agreed

3

that the obstruction of justice enhancement should not apply but

defended the other two. It conceded that the $16,755 should not be

included in the loss amount, but it defended inclusion of the

Tippie loss. The amended PSR reaffirmed all three enhancements and

inclusion of the Tippie loss.

At sentencing, the parties discussed the enhancements and the

loss amount with the court. The district court applied all three

enhancements and found the loss to include the Tippie loss, but

apparently not the $16,755 - it never mentioned that number. After

sustaining Wright’s objection to the calculation of his criminal

history points, the final range was 46 to 57 months. The court

gave Wright 57 months and ordered him to pay $270,466 in

restitution, a figure which includes the $16,755. Pursuant to the

Government’s motion, the court dismissed the first four counts.

Wright appeals application of the three enhancements, the

inclusion of the Tippie loss in calculating the offense level, and

the inclusion of the Tippie and $16,755 losses in the order of

restitution. We address each in turn.

II

U.S.S.G. § 3C1.1 provides a two-level increase for obstruction

of justice. Application Note five lists conduct for which the

increase doesn’t apply, and 5(d) is “avoiding or fleeing from

arrest.” Note 4 lists conduct for which the increase does apply,

and 4(c) is “escaping or attempting to escape from custody.”

4

As an initial matter, Wright argues that we review de novo the

applicability of this enhancement to the undisputed facts of this

case.1 The Government urges plain error because, as we explain

later, the parties and the court used the wrong standard in

analyzing the issue. Thus, the Government asserts, Wright’s

“theory” on appeal is different from that advanced below. While it

is true that a defendant can’t argue a new “theory” on appeal,2

Wright is not presenting a new theory here - he objected to the

enhancement, citing the exact note to the Guideline provision that

controls the issue, he just didn’t cite this court’s controlling

precedent interpreting that note. The cases cited by the

Government all involve more than just lack of citation to the

proper cases. And, of course, it was up to the district court to

apply the proper law. Wright preserved the issue, which we review

de novo.

The PSR stated that the enhancement applied because Wright

fled in a “deliberate” rather than “spontaneous” manner. In

response to Wright’s objection, the amended PSR urged again that

Wright’s flight was deliberate. At sentencing, Wright’s counsel

disputed the enhancement, stating: “[T]he probation officer says

the flight [was] other than spontaneous, but actually, the facts

show just the opposite. They show a spontaneous flight. They

don’t show any kind of deliberation.” The court and counsel then

1

See United States v. Chavarria, 377 F.3d 475, 478 (5th Cir. 2004).

2

See United States v. Green, 324 F.3d 375, 381 (5th Cir. 2003).

5

discussed whether Wright’s flight was spontaneous or deliberate.

The district court ultimately ruled:

I’m going to hold on to my position there. If he just

fled and had been caught promptly, I think I would not

tip over the line, but when he’s been told he’s about to

be arrested, closes the door, and he goes out the back,

and then he’s out for six more weeks, they can’t find

him, he doesn’t report, he knows at that point that he is

– has an arrest warrant outstanding for him and still

stays out, I think that’s obstruction.

In United States v. Huerta,3 this Court adopted the reasoning

of the Fourth Circuit in United States v. Williams4 and Sixth

Circuit in United States v. McDonald5 that the critical, simple

inquiry under 5(d) and 4(e) is whether the defendant escaped from

custody or was avoiding custody, regardless of his state of arrest.

In Williams, the defendant escaped soon after being placed in the

back of a police car. On appeal, Williams argued that although he

had technically been arrested when he fled, he was not “truly in

custody” at that time because he escaped during the “arrest

episode,” noting that most § 3C1.1 enhancements were levied for

escape long after arrest, after the defendants were clearly in

“custody.” The court rejected this reach for a “gray area” between

5(d) and 4(e) because “custody” and “arrest” are “well-settled” as

separate legal concepts, hence a defendant who escapes from

“custody,” even if he does so during the “arrest episode,” has

3

182 F.3d 361 (5th Cir. 1999).

4

152 F.3d 294, 304 (4th Cir. 1998).

5

165 F.3d 1032, 1035 (6th Cir. 1999).

6

obstructed justice. In other words, the court reconciled 5(d) and

4(e) by holding that “custody” is the key question - once a

defendant is in “custody,” he is no longer “avoiding or fleeing

from arrest” if he escapes. This court in Huerta explicitly

rejected the reasoning of the Second and Seventh Circuits, which

focused on whether the defendant’s conduct was deliberate or

spontaneous.6 Consequently, the parties and the court below used

the wrong standard, as the parties recognize on appeal. We ask

only whether Wright was in custody when he fled.7

This court recently defined “custody” under § 3C1.1 as the

Miranda standard of “custody.” In United States v. Brown, deputies

responded to a domestic violence call.8 They picked up the victim

and drove her to her boyfriend’s trailer. On the way, they learned

the boyfriend’s name and discovered he had a warrant for his

arrest. After arriving at the trailer, they informed Brown of the

warrant and one deputy grabbed him, but he broke free and ran away,

remaining on the lam for about eight months before he was finally

captured. The court, quoting a Supreme Court case defining

“custody” for Miranda purposes, framed the question as whether

there was “a formal arrest or restraint on freedom of movement of

6

See United States v. Draves, 103 F.3d 1328 (7th Cir. 1998); United

States v. Stroud, 893 F.3d 504 (2d Cir. 1990).

7

We note that “avoiding or fleeing from arrest” under Application Note

5(d) must mean “avoiding arrest,” not “avoiding arrest or escaping after being

arrested,” otherwise Application Note 4(c) makes no sense. In any event, our

only inquiry is what constitutes “custody.”

8

470 F.3d 1091 (5th Cir. 2006).

7

the degree associated with formal arrest.”9 The court then held

that Brown was never in such “custody” because he broke free and

escaped and the deputies never exercised “a degree of formal

control or restraint over him.” Unable to distinguish our case

from Brown,10 we must conclude that Wright was not in “custody” when

he fled. Indeed, here Agent Super never had physical contact with

Wright before Wright ran. We must vacate the sentence and remand,

although we address the remaining issues for reasons of economy.11

III

U.S.S.G. § 3B1.3 provides a two-level increase for abuse of

position of trust. “The district court’s application of section

3B1.3 is a sophisticated factual determination that we review for

clear error.”12

9

Id. at 1095 (quoting Stansbury v. California, 511 U.S. 318, 322

(1994)).

10

The court in Brown also held that § 3C1.1 did not apply because

Brown’s flight did not occur “during the course of the investigation,

prosecution, or sentencing of the instant offense of conviction,” as § 3C1.1

requires, because the deputies found the gun which led to the federal

conviction under § 922(g) in Brown’s trailer after Brown escaped. That

holding is inapplicable here because Wright escaped during the investigation

for fraud. The Government argues that Brown’s “custody” holding was,

therefore, dicta. But it’s well-settled that alternative holdings are

binding, they are not dicta. The Government also suggests that statements in

Brown after the court’s “custody” holding permit a different result here, but

those statements - discussion of policy and some particulars of Brown’s case -

were only in “further support” of the court’s holding. Brown’s custody

holding is clear.

11

See United States v. Farfan-Carreon, 935 F.2d 678,679 (5th Cir. 1991)

(electing to address legal issues, even after concluding that remand was

appropriate for another reason, as a guide to the court on remand).

12

See United States v. Burke, 431 F.3d 883, 889 (th5 Cir. 2005).

8

Section 3B1.3 provides a two-level increase if “a defendant

abused a position of public or private trust, or used a special

skill, in a manner that significantly facilitated the commission or

concealment of the offense....” Application note 1 provides:

‘Public or private trust’ refers to a public or private

trust characterized by professional or managerial

discretion (i.e., substantial discretionary judgment that

is ordinarily given considerable deference). Persons

holding such positions ordinarily are subject to

significantly less supervision than employees whose

responsibilities are primarily non-discretionary in

nature. For this adjustment to apply, the position of

public or private trust must have contributed in some

significant way to facilitating the commission or

concealment of the offense.

In United States v. Jobe, this court interpreted that note to mean

that 3B1.3

encompasses two factors: (1) whether the defendant

occupies a position of trust and (2) whether the

defendant abused her position in a manner that

significantly facilitated the commission of concealment

of the offense. To determine whether the position of

trust ‘significantly facilitated’ the commission of the

offense, the court must decide whether the defendant

occupied a superior position, relative to all people in

a position to commit the offense, as a result of her

job.13

Recommending enhancement here, the PSR stated:

The defendant abused his trust as the owner and operator

of MFG Financial Services, a mortgage brokerage business,

to facilitate the offense and his scheme and artifice to

defraud. As a mortgage broker, WMC Mortgage Corporation

and Ameriquest Mortgage entrusted the defendant to

truthfully and accurately submit financial information

about the loan applicants. Instead, the defendant

entered false information on loan applications with the

intent of deceiving the lenders into approving loans.

13

See 101 F.3d 1046, 1065 (5th Cir. 1996).

9

Responding to Wright’s objection, the amended PSR stated:

[Wright’s] position of trust was characterized by the

faith given to him by financial institutions to present

truthful and accurate information to make their

credit-based decisions. His ability to function as an

independent broker further illustrates [his] position of

trust since he could only operate with a license.

At sentencing, the court heard Agent Super’s testimony that

“brokers are expected to do some diligence when putting a loan

together. In essence, when that package goes to the mortgage

company, they expect that most of that stuff that’s on there, the

employment, income, and other information, has pretty much been

proven by the broker.” The district court applied the enhancement.

Wright argues first that, while no cases are directly on

point, he did not occupy a position of trust with WMC because he

didn’t work for that company and because borrower-lender

relationships, and by extension broker-lender relationships, are

arms-length. He cites Jobe, where the defendant was a director of

the bank which he defrauded through a check-kiting scheme, as the

classic position of trust case. He also cites the Second Circuit’s

decision in United States v. Jolly, where the court, in striking

down the enhancement where the defendant fraudulently raised money

from investors by providing them false information, stated that

borrower-lender relationships are generally arms-length and solely

contractual.14 Second, he argues, even if he occupied a position

of trust, that position did not “significantly facilitate[] the

14

See 102 F.3d 46, 48 (2d Cir. 1996).

10

commission of concealment of the offense” because he simply

forwarded the loan applications to WMC, and the application could

have been submitted just as easily by the individuals themselves.

The Government focuses on Agent Super’s testimony about the

trust that lenders give to mortgage brokers, arguing that that

trust placed him in a superior position than most people to

victimize WMC. It also emphasizes Wright’s license, arguing that

the license highlights and justifies the presence of such trust.

For this proposition it cites United States v. Gonzalez-Alvarez,15

where the First Circuit held that a licensed dairy farmer who

intended that contaminated milk reach the public abused a position

of trust, partially because of the license.

Although this is a close case, we will not disturb the

district court’s conclusion that Wright occupied a position of

trust that significantly facilitated his fraud. Although there is

no legally recognized-relationship of trust between brokers and

lenders, such legal recognition is not required, and the undisputed

record in this case reveals that lenders often rely to some degree

on statements by brokers in evaluating applications. That lenders,

who are generally distrusting and like to verify information for

themselves, would do so makes more sense given that brokers

independently verify all relevant information before submitting

applications and that brokers deal repeatedly with the same lenders

and multiple lenders, unlike the average borrower. The

15

277 F.3d 73, 81 (1st Cir. 2001).

11

relationship here is not lender-borrower, which we agree will

seldom be a relationship of trust. It’s lender-middleman, and

there is a difference. We inquire if there is a position of trust

against the background reality that, wherever there is fraud the

victim relies on the defendant’s statements, so there must be more

than just reliance based on factors idiosyncratic to the case at

hand. Here there is reliance that flows from the structure of the

mortgage industry itself, which sets a patterned process for loan

application that over time cultivates trust between brokers and

lenders.

In sum, on the facts before it the district court did not

clearly err in concluding that Wright abused his position of trust

as a mortgage broker.

IV

U.S.S.G. § 2B1.3 provides a two-level increase for use of

“sophisticated means” in certain crimes. We review the district

court’s determination of this enhancement for abuse of

discretion.16 Application note 1 provides:

Sophisticated Means Enhancement - For purposes of [this

enhancement], ‘sophisticated means’ means especially

complex or especially intricate offense conduct

pertaining to the execution of concealment of the

offense. For example, in a telemarketing scheme,

locating the main office of the scheme in just one

jurisdiction but locating soliciting operations in

another jurisdiction ordinarily indicates sophisticated

means. Conduct such as hiding assets or transactions, or

both, through the use of fictitious entities, corporate

16

See United States v. Powell,124 F.3d 655, 666 (5th Cir. 1997).

12

shells, or offshore financial accounts also ordinarily

indicates sophisticated means.

Recommending enhancement here, the PSR stated:

As part of the scheme to defraud financial institutions,

the defendant used his own funds to purchase cashier’s

checks for closing costs in the names of the loan

applicants, made copies of the same checks which were

forwarded to the lenders, then deposited the same

cashier’s checks into his account. The defendant

committed these acts with the intent of misrepresenting

the applicants’ available funds, in order to bolster

their creditworthiness, thereby facilitating the approval

of their loans.

In objecting to this rendition of the facts, Wright asserted that

although he paid for the cashier’s checks, he was later reimbursed

for them. The amended PSR tried to clarify:

The defendant did not use his own funds to purchase

cashier’s checks in the names of the loan applicants to

somehow assist them. Instead, he misrepresented the

buyers as having proceeds in order to deceive the lenders

and acquire financial gain. The manner of sophistication

involved his steps of purchasing the cashier’s checks in

the names of the buyers with his own funds, forwarding

copies of the same checks to the lenders as if they were

legitimate buyer assets, then returning the original

cashier’s check/proceeds to the bank. His actions were

intricate, complex, and calculated so as to facilitate

the commission of the offense without being detected on

either end by his bank or the lender.

At sentencing, the court distilled what actually happened after

Wright called Agent Super as a witness:

Q [Wright’s counsel]: Okay. What you’re saying is, no, he

did not take the cashier’s check for that particular deal

[described in count 5 of the indictment] and deposit it

back into the account. That was actually someone wrote

him a check to put in that account; is that correct?

A. That’s correct. Someone wrote him a personal check or

a business check off their business checking account,

13

gave it to Mr. Wright. He deposited it into his account

and then purchased a cashier’s check.

THE COURT: And what was the purpose of doing that?

THE WITNESS: The purpose is to get a cashier’s check for

the borrower that is not in Mr. Wright’s name but in the

borrower’s name as if the borrower bought it and then use

the cashier’s check to pay the borrower’s closing costs

at the closing.

THE COURT: And what does that achieve?

THE WITNESS: It tells the lender that the borrower has

that money when they really don’t. That’s the act of

deception in that count of the indictment.

On cross-examination by the Government, Agent Super further

testified as follows:

Q. What happened in Count 5 is what you have been

describing; is that correct?

A. Yes.

Q. But was this part of a pattern where the third party

would routinely round up borrowers who didn’t have the

cash for down payments and would, through this type of

similar deception, have Mr. Wright falsely represent that

the closing funds came from the borrower when, in fact,

it came from the third party?

A. That’s correct.

Q. This happened over and over again; isn’t that right?

A. Yes.

The court overruled Wright’s objection, stating:

[T]he scheme was advanced by the fact that funds were

made apparent and present for the closing of the deal,

which would not have been closed but for the inaccurate

impression left that the funds or closing costs came from

the borrowers. So that isn’t changed by whether the funds

came from his account or from a third party’s account,

and he was the one who was managing that part of the

scheme.

14

So whether they came from his funds or someone else’s

funds, the point is he was involved in a little mini

scheme there to mislead the lenders into thinking that

the borrowers had enough money to pay closing costs.

That’s important to lenders because they know that if a

person can’t even scrape up the money to pay closing

costs, they probably are not a very good risk on the

loan.

So it seems to me that on the specific offense

characteristic, while it’s true that it’s not extremely

sophisticated, the question that I have to answer is [if]

it’s sufficiently sophisticated that this defendant ought

to be punished for it, sufficiently sophisticated beyond

the base kind of offense that we ought to add on the two

points. I conclude that it is. It’s not the most

sophisticated plot I have ever seen, but I think it’s

sufficient to punish him more than the person who didn’t

do this as part of the scheme.

...

And I agree that it’s not rocket science or brain

surgery, but I think it does show a level of

sophistication sufficient to trigger additional

punishment.

Wright argues summarily that his actions weren’t

sophisticated, pointing to the court’s own tepid language. The

Government argues briefly to the contrary, noting that the bar is

low and citing to United States v. Clements,17 where this court

upheld the enhancement against a defendant who took payments under

a contract, converted them into cashier’s checks, then deposited

the checks into a separate account in his wife’s name. In so

holding, we held that “[e]ven though [the defendant’s] transactions

did not involve the use of offshore bank accounts or fictional

17

See 73 F.3d 1330, 1340 (5 Cir. 1996).

15

entities, his use of multiple cashier’s checks and his wife’s

separate bank account to obscure the link between the money [and

the scheme] made it more difficult for the IRS to detect his

evasion.” The Government cites this language, arguing that if the

simple use of cashier’s checks to make discovery of the crime “more

difficult” is use of sophisticated means, then use of such checks

as part of the scheme, to make it impossible for the lender to

discover the fraud, is too.18

We find no error in the finding that Wright used sophisticated

means. Depositing a check from someone else into your account, and

then using that money to purchase a cashier’s check in someone

else’s name, are means as sophisticated as those in Clements, at

least as part of a scheme to defraud a mortgage broker.

V

The district court included loss from both the scheme of

conviction and loss from the Tippie scheme in sentencing Wright.

We review that determination for clear error.19

U.S.S.G. § 1B1.3(a)(2) provides that a defendant’s offense

level may be determined on the basis of “all acts and

omissions...that were part of the same course of conduct or common

18

We have held that the sophisticated means must relate to the scheme

itself, see United States v. Stokes, 998 F.2d 279, 282 (5th Cir. 1993)

(holding that efforts by defendant to hide embezzled money was related to

embezzlement, not tax evasion for which she was convicted), and in reply

Wright suggests that his use of the cashier’s check wasn’t related to the

scheme itself. That’s ridiculous, of course.

19

See United States v. Cockerham, 919 F.2d 286, 289 ( 5th Cir. 1990).

16

scheme or plan as the offense of conviction....” “Only after the

government has met its burden of establishing, by a preponderance

of the evidence, ‘a sufficient nexus between the [extraneous]

conduct and the offense of conviction,’ may the sentencing court,

in its sound discretion, make a ‘relevant conduct’ adjustment.”20

Count five of the indictment alleged that the fraud of

conviction occurred from December 10, 2002 to January 17, 2003.

Wright argues that because the Tippie loan didn’t “generate” - that

is, it wasn’t funded by WMC - until January 30, 2003, it wasn’t

relevant conduct. Relatedly, he urges, nothing else in the

indictment or the stipulation of facts mentioned the Tippie loan.

Moreover, he continues, the scheme was entirely separate - as

evidenced by the Government’s own reference to the schemes as

“different” schemes. In sum, he argues, although the schemes were

similar, they weren’t part of the same “course of conduct” or a

“common scheme or plan.”

The Government cites United States v. Anderson,21 which held

that:

It is not necessary for the defendant to have been

charged with or convicted of carrying out the other acts

before they can be considered relevant conduct. However,

for the acts to constitute relevant conduct, the conduct

must be criminal. Two or more offenses form part of a

common scheme or plan where they are substantially

connected to each other by at least one common factor,

such as common victims, common accomplices, common

20

See United States v. Bennett, 37 F.3d 687, 692 n.8 (1st Cir. 1994).

21

See 174 F.3d 515, 526 (5th Cir. 1999).

17

purpose, or similar modus operandi. Offenses that do not

qualify as part of a common scheme or plan may

nonetheless qualify as part of the same course of conduct

if they are sufficiently connected or related to each

other as to warrant the conclusion that they are part of

a single episode, spree, or ongoing series of offenses.

Relevant factors in making this determination include the

degree of similarity of the offenses, the regularity

(repetitions) of the offenses, and the time interval

between offenses.

The Government then points to Agent Super’s testimony at

sentencing, where he stated that the Tippie scheme was “practically

identical” to the scheme of conviction, other than the identity of

the borrowers. Super further explained that “[b]oth Tippie and

Hale, their loan packages, when the applications, the requests,

were sent to WMC Mortgage, [were] both December of 2002. Now, it

just so happens that Mr. Hale’s loan I believe closed on January 17

of 2003, and Mr. Tippie’s loan closed, I believe on January [30] of

2003.” Thus, the Government asserts, the two schemes were part of

a common scheme or plan because they involved a common victim, a

common purpose, and a similar modus operandi; moreover, they were

part of the same course of conduct because they were similar and

near in time. It’s irrelevant that the Tippie loan closed a few

days after January 17, it continues, citing Anderson.

The district court did not clearly err in including loss from

the Tippie loan. It is reasonable to conclude under Anderson that

the Tippie scheme was part of a “common scheme or plan” with the

indicted scheme because there was a common purpose, similar modus

operandi, a common accomplice, and, arguably, a common victim. And

18

it is reasonable to conclude that the Tippie scheme was part of the

same “course of conduct” as the indicted scheme given the

similarity and temporal proximity of the offenses.

VI

Finally, Wright challenges the award of restitution for the

Tippie and $16,755 losses. He argues that we should review the

award of restitution for abuse of discretion, contending that his

objection to inclusion of the Tippie and $16,755 losses for

purposes of the Guidelines range preserved the issue, even though

he never objected to the restitution specifically.22 The Government

urges plain error. The standard for “relevant conduct” under the

Guidelines is more lax than that for determining what conduct can

be the basis of restitution, hence the two arguments are distinct

and the district court never had the opportunity to address the

restitution argument. On the other hand, in this case the

arguments are essentially the same, and this court’s opinion in

United States v. Cockerham could be read to hold that an objection

to the Guidelines loss calculation preserves a restitution

argument.23 In any event, we need not decide the issue because,

22

See United States v. Hughey, 147 F.3d 423, 436 (5th Cir. 1998)

(reviewing preserved argument against award of restitution for abuse of

discretion).

23

919 F.2d 286, 288 & n.1 (5th Cir. 1990). Cockerham isn’t entirely

clear, however. The court stated, “Upon review of the record, we determine

that Cockerham’s objections were sufficient to require adherence to the [Rule

of Criminal Procedure governing restitution] and the VWPA. [fn 1.]” Although

that statement does not by itself help, the footnote’s parentheticals for two

cases are more significant: “(when defendant objects to the factual accuracy

of the PSI, [the same Rule of Criminal Procedure regarding restitution]

requires the district court to append written findings to the PSI)” and “(loss

19

assuming Wright has preserved the issue, it was not error to award

restitution for the Tippie loss, and the Government concedes it was

error to award restitution for the $16,755.

Under this court’s decision in United States v. Inman, “[a]

defendant sentenced under the Mandatory Victim Restitution Act

(“MVRA”) is only responsible for paying restitution for the conduct

underlying the offense for which he was convicted.”24 However,

“[w]here a fraudulent scheme is an element of the conviction, the

court may award restitution for ‘actions pursuant to that

scheme.’”25 Yet, under Inman, “the restitution for the underlying

scheme to defraud is limited to the specific temporal scope of the

indictment.” Wright argues that the Tippie loan was both unrelated

to the scheme of conviction, incorporating his Guidelines argument,

and outside the temporal scope of the indictment here.26 The

Government responds that the Tippie loan was related to the scheme

of conviction, incorporating its Guidelines argument. And it

contends that Wright’s reading of “limited to the specific temporal

amount in PSI challenged at sentencing hearing necessitates procedural

requirements of [same Rule of Criminal Procedure])”.

24

See 411 F.3d 591, 595 (5th Cir. 2005).

25

See United States v. Cothran, 302 F.3d 279, 289 (5th Cir. 2002).

26

In his plea agreement, Wright conceded the court’s ability to order

“restitution which may be mandatory under the law, and which the defendant

agrees may include restitution arising from all relevant conduct, not limited

to that arising from the offense of conviction alone....” This language,

using the term “relevant conduct,” could be read as authorizing restitution

more broadly than Inman, a questionable propostion. In any event, the

Government does not argue that Wright’s concession alters the strictures of

Inman.

20

scope of the indictment” regarding the Tippie loan is unduly

narrow, technical, and unsupported because here almost all parts of

the Tippie fraud occurred before January 17 - most notably, the

preparation and sending of the loan packets.

We conclude that the Tippie scheme was part of the same scheme

as the scheme of conviction for purposes of the MVRA, for the

reasons stated in the previous section. Moreover, we conclude that

the Tippie scheme fell within the “temporal scope of the

indictment.” Count five of the indictment alleged that Wright

perpetrated the fraud of conviction from December 10, 2002 through

January 17, 2003, although it alleged that Wright made the wire

transfer prompting the actual wire fraud charge on January 21. The

Tippie scheme did not predate the main scheme. And the only part

of the Tippie scheme occurring after January 17 was the actual

funding of the loan. Everything else - most notably, the planning

and the preparation and sending of the applications - occurred

before that date. In short, the two schemes occurred

simultaneously. Inman is easily distinguishable because there the

transactions for which restitution was ordered “were not alleged in

the indictment and occurred over two years before the specified

temporal scope of the indictment.”

The Government concedes that the $16,755 order of restitution

was error because it was for losses unconnected to the scheme of

conviction. The district court on remand should remove that amount

from the order of restitution.

21

SENTENCE VACATED AND CASE REMANDED.

22