United States v. Andrew M. Brown, Sr.

UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v. No. 98-4592

ANDREW MCKINLEY BROWN, SR.,

Defendant-Appellant.

Appeal from the United States District Court

for the Eastern District of North Carolina, at Raleigh.

Terrence W. Boyle, Chief District Judge.

(CR-98-53)

Submitted: March 9, 1999

Decided: June 3, 1999

Before NIEMEYER and HAMILTON, Circuit Judges, and

PHILLIPS, Senior Circuit Judge.

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Vacated and remanded by unpublished per curiam opinion.

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COUNSEL

William Arthur Webb, Federal Public Defender, G. Alan DuBois,

Assistant Federal Public Defender, Raleigh, North Carolina, for

Appellant. Janice McKenzie Cole, United States Attorney, Anne M.

Hayes, Assistant United States Attorney, Raleigh, North Carolina, for

Appellee.

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Unpublished opinions are not binding precedent in this circuit. See

Local Rule 36(c).

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OPINION

PER CURIAM:

Andrew M. Brown, Sr., appeals his sentence imposed upon his

guilty plea to one count of larceny of government property, see 18

U.S.C.A. § 641 (West Supp. 1998), one count of conspiracy to com-

mit larceny of government funds, see 18 U.S.C. § 371 (1994), one

count of false statements, see 18 U.S.C.A.§ 1001 (West Supp. 1998),

and one count of wire fraud, see 18 U.S.C.§ 1343 (1994). Brown

contends that the Government breached the plea agreement because

it failed to disclose to the court the full extent of his cooperation and

whether it deemed Brown's assistance as substantial. Brown also con-

tends that the court erred by concluding that it had no authority to

grant Brown's motion for substantial assistance made pursuant to U.S.

Sentencing Guidelines Manual § 5K1.1 (1997). Because we find that

the Government breached the plea agreement, we vacate the sentence

and remand for resentencing.

Brown, a retired United States Army chief warrant officer, owned

and operated Chief's Military Surplus and Repair in Fayetteville,

North Carolina, near Fort Bragg. Brown's store sold military surplus

items and procured parts for the military. Certain authorized person-

nel at Fort Bragg were permitted to make small military purchases at

Brown's store using an International Merchant Purchase Authoriza-

tion Card ("IMPAC"). Several IMPAC-authorized personnel allowed

Brown to use their IMPAC card to make fraudulent purchases. In

addition, the personnel gave Brown stolen military goods, which he

later sold at his store. Brown used an IMPAC card to charge the

United States Army for non-existent goods and services. Brown

received funds on the basis of the charges, but the Government did

not receive the goods or services. Brown split the funds with the per-

sonnel involved in the scheme. Subsequently, Brown used this

scheme to secure funds to invest in a supper club he owned.

2

An indictment was issued charging Brown with four separate

counts as a result of this scheme. Brown entered into a plea agreement

with the Government in which he agreed to:

waive knowingly and expressly the right to appeal whatever

sentence is imposed on any ground, including an appeal pur-

suant to 18 U.S.C. § 3742, and further to waive any right to

contest the conviction or the sentence in any post-conviction

proceeding, including any proceeding under 28 U.S.C.

§ 2255, excepting the Defendant's right to appeal based

upon grounds of ineffective assistance of counsel and pro-

secutorial misconduct not known to the Defendant at the

time of the Defendant's guilty plea.

(J.A. at 14-15). For its part, the Government agreed to:

make known to the Court at sentencing the full extent of the

Defendant's cooperation, including whether the Government

deems the Defendant to have substantially assisted authori-

ties, but the Government is not promising to move for

departure pursuant to 18 U.S.C. § 3553(e) or U.S.S.G.

§ 5K1.1.

(J.A. at 21). At the plea hearing, the court reviewed the plea agree-

ment, including Brown's waiver of his right to contest the conviction

and sentence in a post-conviction proceeding. Brown was informed

that if he gave false or misleading testimony, it would be a breach of

the agreement. Brown informed the court that he read and understood

the plea agreement and that he voluntarily agreed to the terms of the

agreement.

The presentence investigation report found that the total value of

stolen goods and cash received from fraudulent IMPAC-card use was

over $85,000. Thus, the report recommended a base offense level of

four, see USSG § 2B1.1(a), an eight-level increase in the offense level

due to the amount of loss, see § 2B1.1(b)(1)(I), a four-level increase

due to Brown's role in the offense, see USSG§ 3B1.1(a), another

four-level increase for receipt of stolen property, see USSG

§ 2B1.1(b)(4)(B), and a three-level reduction due to Brown's accep-

tance of responsibility, see USSG § 3E1.1(b).

3

Brown objected to the amount of loss attributed to his conduct. He

also objected to the four-level increase for his role in the offense. The

Government also objected, contending that the amount of loss

exceeded $200,000. At the sentencing hearing, Brown told the court

that there were only approximately thirteen fraudulent transactions

using the IMPAC card. The Government, on the other hand, claimed

that there were hundreds of fraudulent transactions. The court heard

testimony from several persons, including a criminal investigator with

military police, Special Agent Michael Blewett, a former employee of

Brown's, and a co-conspirator.

Brown's counsel questioned Blewett on cross-examination regard-

ing the extent of assistance provided by Brown.

Counsel: Are you aware that Mr. Brown was debriefed by

several officers in April of '98 at Wilson County

Jail?

Blewett: Yes, sir, I was present.

Counsel: Are you aware that Mr. Brown testified at an

Article 32 Hearing against Mr. Freeman at Wil-

son County Jail?

Blewett: Yes, sir, I am.

Counsel: Are you aware that Mr. Brown was prepared by

Captain Greg Illikainen to testify against I

believe it was Mr. Widow and Mr. Williams?

Blewett: Yes, sir, I am.

Counsel: Are you aware that Captain Michele Jackson

prepped Mr. Brown to testify against Mr. Con-

way Swinton and Mr. Hayes, prepared to testify

against them for their Article 32 Hearing; are

you aware of that?

Blewett: I am aware that he was prepared for Conway.

4

Counsel: Are you aware that there was supposed to be two

32 hearings going on this week? Mr. Freeman,

he was supposed to plea as a result of Mr. Brown

being prepped?

Blewett: No, I am not aware of that.

Counsel: Are you aware that Mr. Widow's case was con-

tinued for a couple of weeks and they wish for

Mr. Brown to testify there?

Blewett: Yes, I am aware of that.

Counsel: Are you aware that Mr. Edwards who is part of

the high-ranking officer of all these men here,

that Mr. Brown was prepped to testify against

him?

Blewett: I am aware of that.

Counsel: And are you aware of them prepping Mr. Brown

a [sic] equivalent of an indictment was held

against Mr. Edwards? A complaint was sworn

out?

Blewett: Yes, I am aware of that.

Counsel: Are you aware that they wish for Mr. Brown to

testify against Mr. Edwards?

Blewett: Yes, I am aware of that.

Counsel: And the rest of the men who have yet to go

through the Article 32 Hearing?

Blewett: Yes, that is a part of this plea agreement, sir.

(J.A. at 89-91). After this testimony, the court asked the prosecutor

if he was going to file a motion under USSG § 5K1.1, to which the

5

prosecutor responded in the negative.1 (J.A. at 91). The prosecutor did

not comment on Blewett's cross-examination testimony one way or

the other. In addition, there was no affirmative testimony or a state-

ment from the prosecutor regarding the extent of Brown's assistance,

nor did the prosecutor state whether Brown's assistance was deemed

substantial.

Based on the evidence, the court found that the total loss exceeded

$200,000, resulting in a ten-level increase above the base offense

level of four. The court also imposed a four-level increase due to

Brown's role in the offense, a four-level increase for receipt of stolen

property, and a three-level reduction for acceptance of responsibility.

Brown's total offense level was nineteen and he was placed in crimi-

nal history category II.

Brown moved for a downward departure under USSG§ 5K1.1.

The court denied the motion on the ground that only the Government

had the authority to make a motion pursuant to USSG§ 5K1.1. The

court sentenced Brown to 41 months' imprisonment, at the top end of

the applicable sentencing guidelines range.

Before addressing Brown's claims, we must determine the effect of

his waiver of his right to appeal contained in the plea agreement. A

waiver-of-appeal-rights provision in a valid plea agreement is

enforceable so long as it is the result of a knowing and intelligent

decision to forego the right to appeal. See United States v. Attar, 38

F.3d 727, 731 (4th Cir. 1994). Brown does not argue that his waiver

was not knowingly and intelligently made. In addition, we find, after

considering Brown's college background, age, business experience,

and plea colloquy, that there was no evidence that Brown's accep-

tance of the waiver provision was anything other than knowing and

intelligent. See United States v. Davis, 954 F.2d 182, 186 (4th Cir.

1992) (finding waiver of appeal rights contained in plea agreement to

be knowing and intelligent, even though trial judge did not explicitly

question defendant about his understanding of the waiver provision,

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1 Section 5K1.1 of the sentencing guidelines states: "Upon motion of

the government stating that the defendant has provided substantial assis-

tance in the investigation or prosecution of another person who has com-

mitted an offense, the court may depart from the guidelines."

6

where the record established that the defendant was a college gradu-

ate, that he had no difficulty with the English language, and that he

had discussed the plea agreement extensively with his counsel). On

the other hand, we agree with both parties that the waiver provision

does not bar consideration of Brown's claim that the Government

breached the plea agreement. See United States v. Rosa, 123 F.3d 94,

98 (2d Cir. 1997) (defendant may appeal, despite waiver of such right,

if government breaches the plea agreement).

Brown bears the burden of demonstrating that the agreement was

breached. See United States v. Conner, 930 F.2d 1073, 1076 (4th Cir.

1991). He contends that the Government's failure to make any affir-

mative representations regarding his assistance or to announce to the

court whether it deemed Brown's assistance substantial breached the

plea agreement. The interpretation of the plea agreement is guided by

contract law. "Because a defendant's fundamental and constitutional

rights are implicated when he is induced to plead guilty by reason of

a plea agreement, our analysis of the plea agreement or a breach

thereof is conducted with greater scrutiny than in a commercial con-

tract." United States v. McQueen, 108 F.3d 64, 66 (4th Cir. 1997)

(holding that government's breach of the plea agreement was plain

error).

Because Brown failed to assert in the district court that the Govern-

ment breached the plea agreement, our review is limited to plain

error. See United States v. Fant, 974 F.2d 559, 564-65 (4th Cir. 1992).

Under this analysis, it must be shown that there was an error, the error

was plain, and the plain error affected substantial rights, which Brown

bears the burden of demonstrating. See United States v. Hastings, 134

F.3d 235, 239-40 (4th Cir. 1998), cert. denied , ___ U.S. ___, 66

U.S.L.W. 3758 (U.S. May 26, 1998) (No. 97-8732). Specifically, he

must show that the error prejudiced him to the extent that it affected

the outcome of the proceedings. See United States v. Lewis, 10 F.3d

1086, 1092 (4th Cir. 1993). Finally, "[w]hen reviewing a breached

plea agreement for plain error . . . we must establish whether the

breach was so obvious and substantial that failure to notice and cor-

rect it affect[ed] the fairness, integrity or public reputation of the judi-

cial proceedings." McQueen, 108 F.3d at 66 (internal quotation

omitted).

7

The Government contends that it substantially complied with the

terms of the plea agreement. It points to Blewett's testimony on cross-

examination in which he acknowledged several instances in which

Brown provided assistance to the Government. The Government also

contends that the prosecutor's refusal to move for a§ 5K1.1 down-

ward departure was an implicit statement that the Government did not

deem Brown's assistance as substantial. Substantial compliance with

the terms of a contract assists the court in determining whether "con-

duct should, in reality, be considered the equivalent of compliance

under the contract." Phoenix Mut. Life Ins. Co. v. Adams, 30 F.3d

554, 561 n.15 (4th Cir. 1994). If a party deviated from the terms of

the contract to a substantial measure or frustrated the purpose of the

contract, then the party cannot be said to be in substantial compliance.

See Joseph A. by Wolfe v. New Mexico Dep't of Human Servs., 69

F.3d 1081, 1086 (10th Cir. 1995).

Brown argues that there is no way of knowing whether Blewett's

testimony reflected the full extent of Brown's cooperation or whether

it fully described to what use the Government put Brown's coopera-

tion. Certainly, Brown is entitled to the benefit of the bargain, and the

plea agreement obligated the Government to inform the court of the

full extent of Brown's cooperation. See McQueen , 108 F.3d at 66.

Although Blewett was aware of most of Brown's statements regard-

ing his assistance, he admitted that he was unaware that a specific co-

conspirator was planning to plead guilty as a result of Brown's assis-

tance. He was also unaware that Brown was prepared by investigators

to testify against another co-conspirator. The prosecutor did not state

whether the conduct of which Blewett was unaware actually did

occur. Brown contends that the court was not informed that his coop-

eration was instrumental in obtaining guilty pleas from other co-

conspirators.

The Government asserts that its obligation was fulfilled by coun-

sel's cross-examination. The prosecutor gave no indication whether

the content of defense counsel's questions, including those questions

that the witness could not answer affirmatively, reflected the full

extent of Brown's assistance. We think this falls short of the perfor-

mance for which Brown bargained.

Furthermore, we find that the Government's refusal to file a

§ 5K1.1 motion is not the same as deeming that Brown did not pro-

8

vide substantial assistance. It is well established that the Government

has the power, but not the duty, to file a § 5K1.1 motion. Absent a

promise, no amount of substantial assistance obligates the Govern-

ment to file the motion. See United States v. Dixon, 998 F.2d 228, 230

(4th Cir. 1993). In the instant appeal, the Government specifically

stated that it did not promise to move for a § 5K1.1 departure. Thus,

even if the Government believed Brown's assistance to be substantial,

it was not under any obligation to file the motion. It follows, then, that

the prosecutor's declaration that he did not intend to make the motion

does not necessarily imply that the Government deemed that Brown's

assistance was not substantial. As we stated in Dixon, "[T]he govern-

ment promised to `deem,' one way or the other. It must keep this

promise." Dixon, 998 F.2d at 231. Accordingly, we find plain error.

We must decide whether the breach affected the outcome of the

proceedings. See Lewis, 10 F.3d at 1092. Brown contends that due to

his assistance, the Government should have filed a§ 5K1.1 motion.

He further contends that the Government did not deem his assistance

substantial or file a § 5K1.1 motion merely on the basis of his chal-

lenge to the amount of loss attributed to him. He also contends that

had the Government informed the court of the extent of his assistance,

he might not have been sentenced at the top end of the sentencing

guidelines range.

According to the Government, Brown's unwillingness to admit the

true magnitude of his scheme in court decreased the value of his prior

assistance.2 Furthermore, the Government contends that Brown was

not entitled to a § 5K1.1 motion because prior to the Government's

investigation into his activities, he threatened a store employee

because the employee was angry with him and threatened to report

him to the authorities.3 These arguments were not made in the district

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2 The Government claims that Brown made statements under oath that

contradicted his prior statements made during the debriefings with gov-

ernment investigators. We note that the record does not reflect whether

Brown was under oath when he engaged in a colloquy with the court

describing the mechanics and magnitude of the scheme. Furthermore, the

Government cites no specific examples of how Brown's statement in

court contradicted prior statements.

3 We note that the PSI did not recommend an enhancement for obstruc-

tion of justice.

9

court, of course, because there was no discussion about Brown's

assistance.

We find Brown's argument that the breach may have had an effect

on his sentence within the guideline's range persuasive. Because

Brown was sentenced at the top end of the sentencing guidelines

range, the Government's breach may have affected the outcome of the

proceedings. Despite the lack of a § 5K1.1 motion, the court has the

authority to consider a defendant's assistance when determining a

sentence within a range. See USSG § 1B1.4 (in determining sentence

within range, "court may consider, without limitation, any informa-

tion concerning the background, character and conduct of the defen-

dant"); United States v. Doe, 934 F.2d 353, 357 (D.C. Cir. 1991)

("holding that a court may always consider a defendant's assistance

in selecting a sentence from within the guideline range") (emphasis in

original).4 Thus, we conclude that Brown was substantially prejudiced

by the Government's breach.

Since it appears that Brown provided some assistance, including

testifying against his co-conspirators and possibly influencing a co-

conspirator to plead guilty, we find the prosecutor's failure to unam-

biguously inform the court as to the full extent of Brown's assistance

violated the plea agreement. Equally violative of the plea agreement

is the prosecutor's failure to deem whether Brown's assistance was

substantial. "[B]ecause violations of plea agreements on the part of

the government serve not only to violate the constitutional rights of

the defendant, but directly involve the honor of the government, pub-

lic confidence in the fair administration of justice, and the effective

administration of justice in a federal scheme of government," we find

that the Government's breach constituted plain error and entitles

Brown to relief. McQueen, 108 F.3d at 66 (internal quotation omit-

ted).

Insofar as Brown contends that the court erred in denying his

§ 5K1.1 motion, we find that the court did not have the authority to

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4 On the other hand, because there was not a complete discussion

regarding the extent of Brown's assistance, there is no reason to find that

he was entitled to a § 5K1.1 motion or that the Government acted in bad

faith when it failed to deem his assistance substantial.

10

grant the motion.5 We note at least one circuit court has found that in

light of Koon v. United States, 518 U.S. 81 (1996), a sentencing court

may grant a defendant's motion for downward departure based on the

defendant's substantial assistance. See United States v. Solis, 161 F.3d

281, 283-84 (5th Cir. 1998) (holding that a substantial assistance

departure without a government motion is within court's discretion

because it was not adequately considered by the Sentencing Commis-

sion); see also In re Sealed Case (Sentencing Guidelines, Substantial

Assistance), 149 F.3d 1198 (D.C. Cir.) (same), reh'g granted, opinion

vacated in part, 159 F.3d 1362 (D.C. Cir. 1998). However, more than

one year after Koon was decided, this Court reaffirmed the proposi-

tion that a court can impose a downward departure for substantial

assistance only upon the Government's motion. See United States v.

Schaefer, 120 F.3d 505, 508 (4th Cir. 1997).

Because the government breached the plea agreement, we vacate

the sentence and remand this case for resentencing. At the new sen-

tencing, the government is required to satisfy its obligations under the

agreement. We remand the case to a different district judge for resen-

tencing as we are required to do. See United States v. Peglera, 33

F.3d 412, 415 (4th Cir. 1994). We dispense with oral argument

because the facts and legal contentions are adequately presented in the

materials before the court and argument would not aid the decisional

process.

VACATED AND REMANDED

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5 The Government contends that unlike the prior claim, this claim is

foreclosed from review due to Brown's waiver of his appeal rights.

Because the substance of Brown's claim is without merit, we decline to

reach this issue.

11