United States v. Jeffrey D'AmbrosiA and Duane Pede

POSNER, Circuit Judge,

dissenting.

The district court imposed the organizer enhancement on these two defendants after grouping the tax and gambling offenses. My colleagues now affirm on a different ground, that the gambling offense was relevant conduct.

I disagree but I wish they had at least said that the grouping was improper, as it plainly was, rather than ducking the issue. The government’s defense of the district court’s ruling was irresponsible. Not only was it a palpable error for the district court to group the two offenses, but since grouping usually results in a more lenient sentence (and would have done so here had the judge not improperly enhanced the sentences) the government is arguing against its long-term interests. Once again a local office of the Justice Department, indifferent as it seems to the implications of its position for the Department as a whole, has embraced a position rejected by the Department in its other cases. See Adler v. Espy, 35 F.3d 263, 264 (7th Cir.1994); Ortega v. United States, 270 F.3d 540, 548-49 (8th Cir.2001); United States v. Bartlett, 856 F.2d 1071 , 1080 n. 13 (8th Cir.1988); cf. Woodhill Corp. v. Federal Emergency Management Agency, 168 F.3d 1025, 1027-28 (7th Cir.1999); United States v. White, 882 F.2d 250, 252 (7th Cir.1989).

Grouping — the purpose and usual effect of which are to limit the defendant’s sentence to the punishment for the most serious of the grouped offenses, U.S.S.G. ch. 3, pt. D, Introductory Commentary; United States v. Runyan, 290 F.3d 223, 251 (5th Cir.2002); United States v. Kalust, 249 F.3d 106, 110 (2d Cir.2001); United States v. Reetz, 18 F.3d 595 , 598 and n. 3 (8th Cir.1994); United States v. Patterson, 947 F.2d 635, 636-37 (2d Cir.1991) — is done when a defendant is convicted of multiple counts so closely related that they essentially merge into a single offense; or, in the words of the guideline, when they inflict “substantially the same harm,” U.S.S.G. § 3D1.2. When, as in this case, the victims are different (the victims of the gambling offense are the community as a whole, as in other “victimless” crimes, and perhaps the gamblers themselves, if a paternalistic view is taken, while the victims of the tax offenses are the members of the taxpaying public), grouping is improper, as several cases hold with regard to the closely related question whether to group fraud and tax evasion. Weinberger v. United States, 268 F.3d 346, 354-55 (6th Cir.2001); United States v. Astorri, 923 F.2d 1052, 1056-57 (3d Cir.1991); United States v. Vitale, 159 F.3d 810, 813-15 (3d Cir.1998); United States v. Lindsay, 184 F.3d 1138, 1142-43 (10th Cir.1999).

I acknowledge the existence of contrary precedents, illustrated by United States v. Gordon, 291 F.3d 181, 189-90 (2d Cir.2002), and United States v. Haltom, 113 F.3d 43, 46 (5th Cir.1997), that allow the grouping of fraud and tax evasion, but their reasoning is not persuasive, especially if carried over to a case like this., It is common for illegal gambling enterprises to pay income taxes in order to avoid compounding their offenses, especially since, as this case illustrates, the tax offense will often be more serious than what in the case of gambling is little more than a *996 “morals” offense. Gambling is extremely widespread in the United States' and broadly approved; the moral distinction between the gambling that is legal and the gambling that is illegal is faint to the point of invisibility.

In all the cases I have cited or could cite on both sides of the question, except Gordon , where the government grudgingly acknowledged the existence of binding circuit precedent that required grouping, the government was arguing against grouping, which is to say against the position it is arguing for in this case. See also Brief for the United States in Glover v. United States ( 531 U.S. 198 , 121 S.Ct. 696 , 148 L.Ed.2d 604 (2001)), pp. 39-44.

I said that the usual effect, not the invariable effect, of grouping is to lighten the defendant’s sentence. In United States v. Bjorkman, 270 F.3d 482, 495-97 (7th Cir.2001) (per curiam), we held, pursuant to U.S.S.G. § 1B1.3(a)(2), that when offenses constituting parts of the “same course of conduct or common scheme or plan” are grouped under section 3D1.2(d) of the guidelines (which is done “when the offense level is determined largely on the basis of the total amount of harm or loss, the quantity of a substance involved, or some other measure of aggregate harm, or if the offense behavior is ongoing or continuous in nature ... ”), a managerial role in one of the grouped offenses can be automatically attached to the offense of conviction. ■ For by definition offenses grouped on such a basis in such circumstances are not merely different characterizations of the same basic criminal activity but different building blocks of an overarching offense. A typical example would be where the defendant’s offense level is determined by what may have been the relatively minor amount of drugs that he handled but it was part of a larger course of conduct in which he played a managerial role.

Bjorkman was such a case; this is not; the difference is made clear by United States v. Ritsema, 31 F.3d 559, 565-66 (7th Cir.1994), which held that “section lB1.3(a)(2) cannot be read to make Ritse-ma’s obstruction of justice conduct relevant to his silencer offense [possession of an unregistered silencer] because by its terms, it applies only to offenses which would be grouped as multiple counts under section 3D1.2(d).” Substitute gambling for obstruction of justice and tax evasion for possessing an unregistered silencer and you have this case. In any event, my colleagues decline to decide whether grouping was proper in this case, making unintelligible their reliance on Bjorkman , a case that presupposed grouping — and under the inapplicable § 3D1.2(d), to boot. Pretending that the defendants had been convicted only of the tax offense, my colleagues adopt the government’s alternative argument that since that offense was related to the gambling offense and the sentencing guidelines provide that in deciding whether a defendant is an organizer the sentencing court should consider “relevant conduct,” U.S.S.G. ch. 3, pt. B, Introductory Commentary; United States v. Billingsley, 115 F.3d 458, 465 (7th Cir.1997); United States v. Febus, 218 F.3d 784 , 796 (7th Cir.2000), the defendants should be deemed organizers of the tax offense. This is a fiction. Their role in the tax offense was merely to accept the illegal advice of their tax lawyer. He concocted, organized, and implemented the offense. They are guilty too of course but are no more organizers of the offense than a thief who sells stolen property to a fence is an organizer of the fencing operation.

Is it a fiction commanded or countenanced by the sentencing guidelines? It is not. So far as bears on this case (since it is not a grouping case, or treated as one by the majority), relevant conduct is crimi *997 nal activity “that occurred during the commission of the offense of conviction, in preparation for that offense, or in the course of attempting to avoid detection or responsibility for that offense.” U.S.S.G. § lB1.3(a)(l). The offense of conviction was tax evasion, and the gambling activity that generated the income on which the defendants failed to pay taxes was not “in preparation for that offense.” We have made clear that “factually related to” is not synonymous with “in preparation for.” United States v. Tai, 994 F.2d 1204, 1213 (7th Cir.1993). Nor is this a case like United States v. Lewis, 79 F.3d 688 , 691—92 (7th Cir.1996), where the relevant conduct was money laundering undertaken to shield the offense of conviction, which was the sale of cocaine, from detection. The government has it backwards: the tax evasion was an attempt to avoid discovery of the gambling offense, not vice versa. And while the gambling offense and the tax offense overlapped in time, for an offense to “occur ... during the commission of the offense of conviction” implies more than a temporal overlap, as we held in United States v. Ritsema, supra, 31 F.3d at 566-67 ; see also United States v. Taylor, 272 F.3d 980, 982-84 (7th Cir.2001); compare United States v. Ellison, 113 F.3d 77, 83 (7th Cir.1997). Otherwise, if the defendants had beaten their wives during the period in which they were beating taxes, the wife-beating offense would be deemed relevant conduct. The purpose of “during the commission” is, we explained in Ritse-ma, “to free the [sentencing] court from the strict confínes of the indictment so that it may hold the defendant accountable for the full range of harms that stemmed from his offense conduct.” 31 F.3d at 567 . The harm from the defendants’ tax evasion was not augmented by the fact that the income on which they evaded taxes was generated by gambling. The harm would have been the same had it been generated by lawful business dealings.

The guidelines’ directive to consider relevant conduct in determining a defendant’s status as an organizer pertains to situations in which the relevant conduct enables the court to identify the defendant as an organizer of the offense of which he was convicted. Suppose that that offense is a single sale of drugs to an undercover agent by the defendant at the door of a crack house and the relevant conduct is defendant’s ownership and management of the crack house. Then it would be apparent that his role in relation to the sale had been that of an organizer rather than merely that of a sales clerk. See United States v. Noble, 246 F.3d 946, 954 (7th Cir.2001); United States v. McClinton, 135 F.3d 1178, 1191 (7th Cir.1998); see also United States v. Lillard, 929 F.2d 500, 503 (9th Cir.1991); cf. my earlier discussion of grouping under U.S.S.G. § 3D1.2(d). But the relevant conduct here, which is to say the gambling enterprise, does not demonstrate that the defendants played an organizing role in relation to the tax offense. All it demonstrates is the motive and source of funds for their dealings with the crooked tax lawyer.