Petition for Writ of Certiorari — Kumar v. United States

Supreme Court, U.S.

FILED

No. 10 10-961 JAN 24 2011

IN THE OFFICE OF THE CLERK

Supreme Court of the United States

SANJAY KUMAK,

Petitioner,

v.

UNITED STATES OF AMEICRICA,

Respondent.

On PETITION FOR A WRIT OF CERTIORARI TO THE

UNrrep Staves Court OF APPEALS FOR THE SECOND Cincure

PETITION FOR A WRIT OF CERTIORARI

PAUL SHECHTMAN

Counsel of Record

NATHANIEL Z. MARMUR

STILLMAN, I*RIEDMAN &

SHECHTMAN, P.O.

425 Park Avenue

New York, NY 10022

212-223-0200

pshechtman@stillmanfriedman.com

Counsel for Petitioner

Z3A2ZH2 ce

COUNSEL PRESS

(800) 274-3821 © (800) 359 6850

QUESTION PRESENTED

Whether the retroactive application of the 2005

Sentencing Guidelines Manual to calculate a defendant’s

offense level for securities fraud crimes completed in

2000 violates the Ex Post Facto Clause, where the 2005

Manual results in a dramatic increase in the defendant's

suideline range

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TABLE OF APPENDICES

APPENDIX A — OPINION OF THE UNITED

STATES COURT OF APPEALS FOR THE

SECOND CIRCUIT, DATED AUGUST 12,

PU sax

APPENDIX B ORDER DENYING

PETITION FOR REHEARING OF

THE UNITED STATES COURT OF

APPEALS FOR THE SECOND CIRCUIT,

DATED OCTOBER 25, 2010

TABLE OF CITED AUTHORITIES

FEDERAL CASES

‘alder v. Bull,

3 US. 3886 (1798)

Fle tcher v. Peck,

6 Cranch &7 (1810

Tre T UV. Jone s,

529 U.S. 244 (2000

(y re enfield 2 Scafati.,

277 F. Supp. 644 (D. Mass. 1967)(three-ju

court). aff'd mem., 390 U.S. 713 (1968)

Gryger v Burke ;

334 U.S. 728 (1948

ohnson ) United State

529 U.S. 694 (2000)

Viller v. Florida.

182 U.S. 423 (1987

nited States wv. ( aput

156 F-. Supp. 2d GTO (N.D

ited State S 2 Me ’ k ‘e

25 EF3d 1117 (2d Cir. 1

United States v. Regan,

989 F.2d 44 (1st Cir. 19938).

United States v. Rodriguez,

2010 WL 5297173 (1st Cir. 2010)

United States v. Safavian,

461 F Supp. 2d 76 (D.D.C. 2006

Weaver v. Graham,

450 U.S. 24 (1981) ..

CONSTITUTIONAL PROVISION

U.S. Const., Art. I, See. 9

FEDERAL STATUTE

28 U.S.C. § 1254(1) ..

SENTENCING GUIDELINES PROVISIOD

U.S.S.G. § 1B1.11(b)(3)

U.S.S.G. § 2B1.1(b)(1)(Supp. 2002

U.S.S8.G. § 2B1.1(b)(2)

U.S.S.G. § 2B1.1(b)(13

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MISCELLANEOU

Post Facto Clause, 70 U. Chi. L. Rev. 1011 (200

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A Le na M r Y l C » | a i iid (>7 f [ rs)

’ : , ve =

LrOverning | Lolations OF SU pe ri]

) W. New Eng. L. Rev. 499 (1997)

]

Sanjay Kumar respectfully petitions for a writ of

certiorari to review the judgment of the United States

Court of Appeals for the Second Circuit.

OPINION BELOW

The opinion of the United States Court of Appeals for

the Second Circuit (App. A) is published at 617 F.3d 612.

JURISDICTION

The judgment of the court of appeals was entered on

August 12, 2010. A petition for en banc review was denied

on October 25, 2010. (App. B). The jurisdiction of this

Court is invoked under 28 U.S.C. § 1254(1).

CONSTITUTIONAL PROVISION INVOLVED

Article I § 9 of the United States Constitution

provides, in pertinent part: “No Bill of Attainder or ex

post facto Law shall be passed.”

PARTIES TO THE PROCEEDING

Petitioner was a defendant-appellant below. His co-

defendant, Stephen Richards, who was also an appellant

in the Second Circuit, is not seeking certiorari.’

1. The Seeonce Circuit concluded that the district court

had erroneously denied Richards a reduction on the basis of his

acceptance of responsibility and remanded for resentencing.

Richards, who was originally sentenced to 84 months’ imprisonment,

was resentenced to time served (43 months).

2

STATEMENT

1. Sanjay Kumar joined Computer Associates, a

publicly traded corporation, in August 1987 and became its

COO in 1994. Headquartered on Long Island, New York,

CA earned most of its revenue from licensing its computer

software products to other businesses. Under established

accounting rules, CA recognized the present value of a

license fee (which was generally paid in installments) in the

quarter in which the agreement was reached. The criminal

charges against Mr. Kumar arose from his involvement in

CA’s practice of backdating contracts executed in the first

few days of a quarter so that revenue would be recognized

in the prior quarter. The practice, which had begun in

the 1980s, came to be known as the “35-day month.” Mr.

Kumar ended the practice shortly after he became CEO

in August 2000.

2. The charges against Mr. Kumar were in two

parts. Counts One through Five charged him with various

fraud crimes for engaging in the 35-day month practice,

including conspiracy to commit securities fraud and wire

fraud from April 1998 to April 2004. Counts Six through

Nine charged obstruction crimes. The thrust of those

charges was that in 2003 and 2004 Mr. Kumar engaged

in acts intended to cover-up the existence of the 35-day

month practice. On April 24, 2006, Mr. Kumar pleaded

guilty to all of the charges. Prior to the entry of the plea,

the parties agreed to “redact the indictment” so that it

was clear that the fraudulent conduct extended only until

October 31, 2000. See Tr. 4/24/06 at 4 (the court: “we are

shortening the duration of the conspiracy . . . [to] October

31 2000”).

3

3. Sentencing took place on November 2, 2006.

The district court first determined that because the

guidelines were advisory, the Fx Post Facto Clause

was not implicated, and the 2005 Sentencing Guidelines

Manual applied.” Finding that the “loss” was more than

$400 million and that Mr. Kumar merited a four-level

enhancement for leadership role, the court calculated an

offense level of 50, which carries an advisory guideline of

life imprisonment. Based on Mr. Kumar’s extraordinary

charitable acts and the fact that the loss “substantially

overstated the seriousness of the offense,” the court

departed downward and imposed a sentence of 12 years’

imprisonment.

4. Onappeal, Mr. Kumar argued that the application

of the 2005 Manual to determine the offense level for fraud

offenses completed in 2000 violated the Ex Post Facto

Clause.* In its response, the government abandoned the

argument that it had advanced (and prevailed on) in the

district court: that after Booker, the Ex Post Facto Clause

does not apply to the federal sentencing guidelines. See

2. Mr. Kumar’s sentencing was originally scheduled for

September 2006. Sentencing was postponed and took place on

November 2, 2006, by which time the 2006 Manual had been

issued. There were no relevant changes to the Guidelines between

2005 and 2006, and the parties have continued to refer to the 2005

Manual in their submissions.

3. Mr. Kumar also challenged the finding that the “loss”

exceeded $400 million. Based on the testimony of his expert,

Professor Daniel R. Fischel, he argued that his fraudulent conduct

consisted largely of shifting revenue between periods and not

fabricating revenue and that the $400 million loss figure was

premised on a methodology that assumed fabrication. The Court

of Appeals rejected that argument, and we do not press it here.

4

G. Br. 45 n.15. Instead, the government conceded that the

Ex Post Facto Clause applies to advisory Guidelines, but

argued that because Mr. Kumar’s obstructive conduct

continued into 2004, use of the 2005 Manual to calculate

Mr. Kumar’s offense level for his fraud crimes was

constitutionally permissible.

As the Court of Appeals recognized, the choice

between the 1998 Manual (the Guidelines in effect at

the time Mr. Kumar’s fraud was committed) and the

2005 Manual (the Guidelines in effect at the time of his

sentencing) has profound consequences. In November

2001, after Mr. Kumar’s fraud was completed, the

Sentencing Commission overhauled the fraud guidelines

to provide for a substantial increase based upon “loss.” In

November 2002, in response to the Sarbanes-Oxley Act,

the Commission further expanded the loss table by adding

two more categories -- more than $200 million and more

than $400 million -- with the latter calling for a 30-level

enhancement. U.S.S.G. § 2B1.1(b)(1)(Supp. 2002). That

same year, the Commission also created enhancements

for the number of victims, so that a 6-level enhancement

now applies to frauds involving 250 or more victims.

See U.S.S.G. § 2B1.1(b)(2). And it added a new 4-level

enhancement if the offense involved a violation of the

securities law and the defendant was an officer or director

of a publicly traded company. See U.S.S.G. § 2B1.1(b)(13).

The result is that the 2005 Manual punishes Mr.

Kumar’s fraud far more harshly than the 1998 Manual.*

4. As noted, the obstruction counts charged conduct occurring

in 2003 and 2004. There were no pertinent guidelines changes for

obstruction offenses between then and Mr. Kumar’s sentencing.

If the 1998 Manual applies to Mr. Kumar’s fraud offenses,

then his combined offense level is 30, and the advisory

Guidelines range is 97 to 121 months’ imprisonment. If

the 2005 Manual applies, then his combined offense level

is at least 50, and the “range” is life imprisonment. See

United States v. Caputo, 456 F. Supp. 2d 970, 983 (N.D. Tl.

2006)(“[t]he average federal sentence faced by corporate

executives has more than tripled . .. as a direct result of

... the [post-2000 amendments]”).°

A divided panel of the Second Circuit concluded

that application of the 2005 Guidelines Manual did not

violate the Ex Post Facto Clause. The majority relied on

the so-called “one-book rule” to reach that conclusion.

The one-book rule is the Commission’s policy statement

that “[ilf the defendant is convicted of two offenses, the

first committed before, and the second after, a revised

Nor did the so-called grouping rules change between 1998 and

2006. Where a defendant has committed fraud and obstruction,

the offenses are grouped together into a single Group because

“one of the counts embodies conduct that is treated as a[n]...

adjustment to the guideline applicable to [the other] count{].”

U.S.S.G. § 3D1.2(c). That is because obstruction of justice calls for

a 2-level enhancement to the fraud offense level. U.S.S.G. § 3C1.1

The offense level applicable to the resulting Group is that “for

the most serious of the counts comprising the Group.” U.S.S.G.

§ 3D1.3(a). For Mr. Kumar, the fraud offense level, including the

2-level increase for obstruction, is far higher than the separately

calculated obstruction offense level, and therefore the former i:

controlling.

5. We say “at least 50” because the district court failed to

add two points for obstruction of justice under U.S.S.G. § 3D1.2(¢)

Adding those two points would result in an offense level of 52 under

the 2005 Manual

6

edition of the Guidelines Manual became effective, the

revised edition of the Guidelines Manual is to be applied

to both offenses.” See U.S.S.G. § 1B1.11(b)(3). That policy

statement, the panel majority reasoned, overcame any ex

post facto concern:

Applying these principles to §1B1.11(b)(3), we

hold that the adoption of the one-book rule

prior to the commission of the defendant{’s]

obstruction offense had placed [him] on

notice of the consequences of committing that

second offense. That the consequences of the

second offense included the application of the

post-amendment Guidelines to all offenses

considered at the defendant|’s| sentencing was

fully apparent prior to the commission of the

crimes that triggered those consequences. When

the defendant] | committed [his] obstruction

offenses, it was not the amendments to the

Sentencing Guidelines that disadvantaged jthe

defendant], it was [his] election to continue [his]

criminal activity.

617 F.3d at 628 (citations omitted). In so holding, the

panel majority analogized the one-book rule to “recidivist

statutes and ‘three strike’ laws upheld by the Supreme

Court and our sister circuits in the past.” /d. at 629 (citing

Gryger v. Burke, 334 U.S. 728 (1948)).

5. Judge Sack dissented, arguing that Mr. Kumar’s

“commission of subsequent obstruction of justice offenses

_. . [did] not render [the 2005] Guidelines applicable to

the... fraud charges because at the time |Mr. Kumar}

committed the... fraud offenses, | he] did not have the ‘fair

notice’ of the severity to the penalties tow hich | he| migh

be subjected for them under the later, harsher Guidelines

The majority’s attempt to “find in the one-book rule a form

of constructive notice,” Judge Sack wrote, went beyor

‘rymnastics to contortions.” 617 F.3d at 642

REASONS FOR GRANTING THI

This Court should grant certiorari (1) becau

the decision of the Second Circuit runs counter to thi

most fundamental precept of ex post facto law in that

it authorizes imposition of enhanced punishment for ;

completed crime; (ii) because the decision below relies on

a form of constructive notice that this C es has rejected

in Miller v. Florida, 482 U.S. 423 (1987); (iii) because

the decision below seriously misreads this fon ’s ruling

in Gryger v. Burke, 334 U.S. 728 (1948), to support its

position; and (iv) because the decision below is at odds with

this Court’s summary affirmance in Greenfield v. Scafati,

277 F. Supp. 644 (D. Mass. 1967)(three-judge cou |

mem., 390 U.S. 713 (1968

I It is well settled that for a law to contravene t

x Post Facto Clause, “two critical elements must b

present: First, the law must be retrospective, that 1s, 11

must apply to events occurring before its enactment; an

second it must disadvantage the offender affected by it.

Miller, 482 U.S. at 4380. Accord Calder v. Bull, 3 U

386, 390 (1798)(“[e]very law that changes the punishmet

and infle cts a greater apo nt than the law annexe

whe My OVI tthe vIoOl: if : the fi’ pP

a

Facto clause)(emphasis added); see also Garner v. Jones,

529 U.S. 244, 249 (2000)(“[olne function of the Ha Post

Facto Clause is to bar enactments which, by retroactive

operation, zxcrease the punishment for a crime after its

commission” (emphasis added). Here, the 2005 Guidelines

Manual was applied to caleulate the offense level for Mr.

Kumar’s fraud offenses which were completed in 2000.

There can be no doubt that the retroactive application

of that Guidelines Manual seriously disadvantaged Mr.

Kumar: it increased his advisory guideline from 97 to 121

months to life imprisonment. A more basic violation of ex

post facto law is hard to imagine.®

2. The Second Circuit majority found that the use

of the 2005 Manual was constitutionally permissible

because Mr. Kumar committed obstruction in 2003 and

2004 and “the adoption of the one-book rule prior to the

commission of [Mr. Kumar’s] obstruction offense .

placed [him] on notice of the consequences of committing

that second offense.” 617 F.3d at 628. But the one-book

rule is not a talisman in whose presence the kx Post

Facto Clause disappears. As Judge Sack observed in

his dissent, the “notice” that the majority relied upon is

6. As noted, the government conceded in the Court of Appeals

that advisory guidelines are “laws” for purposes of the Ax Post

Facto Clause. The Circuits are divided on the issue. See United

States v. Rodriguez, 2010 WL 5297173 (st Cir. 2010)(deseribing

Circuit split on question whether “sentencing a defendant under

advisory Guidelines made more severe since the time of the

crime violate[s] the Constitution’s ex post facto clause”). The

rovernment’s concession removes that issue from this case. See 617

I.3d at 626 n.12 (noting that in light of the government’s concession,

the court would “proceed ...on the assumption that the /x Post

Facto clause applies to the advisory Guidelines”).

Y

insufficient to overcome the prohibition against ex post

facto laws. What the Ex Post Facto Clause requires is

not a warning that the punishment for a crime might be

changed, but fair warning of the punishment for the crime

at the time it 1s committed. As this Court has observed,

“(t]he constitutional prohibition against ex post facto laws

cannot be avoided merely by adding to a law notice that it

might be changed.” Miller, 482 U.S. at 431; see also Note,

Revised Sentencing Guidelines and the Ex Post Facto

Clause, 70 U. Chi. L. Rev. 1011, 1030 (2003)(“LiJt is difficult

to see how [the notice supplied by §1B1.11(b)(3)] is any

different from the brand of notice rejected in Miller’”).’

An analogy underscores the point. Assume that

Congress increased the punishment for securities fraud

from 10 years to 20 years and made the new law effective

(a) for any securities fraud crime committed after the

law’s enactment and (b) for any securities fraud crimes

committed before the law’s enactment if the defendant

obstructs that crime after the law’s enactment. Clearly,

subseetion (b) is uneonstitutional. To be sure, the

subsection gives the defendant “notice,” but it is not the

7. In Miller, the State unsuccessfully argued that it was

sufficient “that petitioner was given ‘fair warning’ that he would

be sentenced pursuant to the [parole] guidelines then in effect on

his sentencing date.” 482 U.S. at 431. The panel majority sought to

distinguish Miller on the ground that Mr. Kumar “at the time of

[his] obstruction offenses [was] on notice that the law had changed

and would apply to [his] convictions for fraud if, and only if, [he}

invoked the one-book rule by committing a subsequent offense.”

617 F.3d at 629 n.15 (emphasis added). But that misses the point.

The question is: was he on notice of the higher punishment for

securities fraud at the tome of kis securities fraud offenses, and

the answer is plainly “no.”

ur notice that the £2 fost Far

not notice of the punishment anne?

raud crime when committed

3. The Second Circuit majority sought support

r its holding in Gryger v. Burke, 334 U.S. 728 (1948),

which upheld a recidivist statute against an ex post facto

challenge. As noted above, the majority wrote: “[t]he one

book rule, when it leads to a higher sentencing range than

would be applied to a single offense, operates In a manne!

similar to that of the recidivist statutes ... upheld by the

Supreme Court and our sister circuits in the past.” 617

“3d at 629. But that gets it wrong. This Court has held

that “the sentence as a.

. habitual criminal ts not

additional penalty for the earlier crime[] [but] a stiffened

penalty for the latest crime, which is considered to be an

aggravated offense because a repetitive one.” 334 U.S. at

732 (emphasis added). By contrast, what occurred here

was the imposition of a stiffened penalty for a completed

erime (securities fraud) and not for the latest crime

(obstruction). Thus, the Second Cireuit majority found

upport in recidivist cases which, properly read, go the

ther way. See United States v. Meeks, 25 F.3d 1117, 1121

2d Cir. 1994)(“habitual-offender statutes

alter the legal consequences of /

mphasis added)

simply

nduct”

re erim

we <>.j > ee

§ See 617 F.3d at 6435 (Sack Lin}

at the notice that the defendant] |] received here was notice as to

punishment for the wrong crime: not as to the fraud and conspiracy

‘rimes for which punishment was revised markedly upward, but

the subsequent obstruction offenses for which the Guideiines ha)

t changed”

1]

4. The Second Circuit majority’s decision is also

inconsistent with Greenfield v. Scafati, 277 F. Supp. 644

(D. Mass. 1967)(three-judge court), affd mem., 390 U.S.

713 (1968); see Weaver v. Graham, 450 U.S. 24, 37 (1981)

(Blackmun, J., concurring)(describing Greenfield as one of

“t]he Court’s precedents”). Greenfield held that a statute

enhancing penalties for parole violations operated as an

ex post facto law when applied to a parolee whose original

offense predated the statute, even if his parole violation

occurred afterwards. Because the statute “extend[ed] [the

defendant’s] sentence and increaseled] his punishment”

beyond the amount he had notice of when he committed

his underlying crime, its application violated the Clause.

277 F. Supp. at 645. Accord United States v. Meeks, 25

F.3d at 1122 (2d Cir. 1994)(holding that imposition of new

mandatory minimum sentence for violation of supervised

release ran afoul of Ex Post Facto Clause; “[wlhile it ts

true that a defendant would have notice of that [penalty]

enhancement before he committed his violation of

supervised release, it is equally true that he would have

had no such notice before the original offense”); see also

Zenga, The Ex Post Facto Implications of Amending the

Statutory Provisions Governing Violations of Supervised

Release, 19 W. New Eng. L. Rev. 499, 540 (1997)(“the

majority of courts of appeals have accurately compared

supervised release to parole for ex post facto analysis

and followed the reasoning used in... Greenfield”).

9. In Meeks, the Second Circuit wrote this:

We are unpersuaded by the government’s argument

that the Fx Post Facto Clause is not implicated so

long as the penalty for a supervised-release violation

is enhanced before the defendant engages in his

supervised-release-violative conduct because the

Simply stated, Mr. Kumar may have had notice of the

fraud enhancements before he committed his obstructive

conduct, but he did not have notice of them before he

committed his fraud offenses, which is what Greenfield

requires.

5. As Judge Sack observed in his dissent, the

majority’s decision applies “irrespective of the relationship,

if any, between [the old and new crimes],” so long as they

are joined in one prosecution. 617 F.3d at 645. Thus, if Mr.

Kumar had been convicted of selling marijuana in 2004,

the Second Circuit would still authorize application of the

2005 Manual to calculate his offense level for his pre-2002

fraud. That is to say no matter how distinct or minor the

new offense, it still wags the dog (increasing the securities

fraud offense level from 97 to 121 months to life). Such a

result should give any judge pause.

6. Finally, it bears note that a ruling in Mr.

Kumar's favor would not invalidate the “one-book rule”

violator then has notice and fair warning that that

conduct will result in the enhanced penalty. While

it is true that a defendant would have notice of that

enhancement before he committed his violation of

supervised release, it is equally true that ke would

have had no such notice before he committed the

original offense .... Thus, the government’s notice

argument is not helpful to resolving the issu

presented by this appeal

25 F.3d at 1122 (emphasis added). Meeks was abrogated by Johnso7

Uneted States, 529 U.S. 694 (2000). There, this Court held that

Congress did not intend the enhancement provision to apply

retroactively, and therefore “the ex post facto question does not

ise.” Jd. at 702.

oy

in the great majority of cases. Consider, for example, the

hypothetical that the Sentencing Commission describes

in its commentary to § 1B1.11: a defendant is “convicted

of two counts of embezzlement, one committed before

the [enhancement] amendments were enacted, and the

second after.” In such a case, the Commission is correct

that “the Ex Post Facto Clause would not bar application

of the amended guideline.” § 1B1.11 commt. (backg’d).

That is not because the one-book rule gives the defendant

constructive notice, but because the defendant is, in effect,

being sentenced for his new crime (which occurred after

the amendment went into effect), and his punishment

for that crime is being increased because of his prior

criminal activity (which is relevant conduct). See United

States v. Regan, 989 F.2d 44, 48 (1st Cir. 1993)(“the prior

acts of embezzlement were ‘relevant conduct’ that would

enhance [the] defendant’s sentence for the embezzlements

that occurred after the guideline increase even if he had

been convicted only on the latter counts”). In short, the

Commission’s embezzlement hypothetical 2s analogous to

a recidivist statute, and it 7s rot analogous to Mr. Kumar’s

Ine 10

case.

For all of these reasons, this Court should grant

certiorari and reverse the decision below. If there is one

10. The distinction between the Commission’s embezzlement

hypothetical and “straddle cases” like Mr. Kumar's was first

pointed out by Judge Paul Friedman in United States v.

Safavian, 461 F. Supp. 2d 76, 81 (D. D.C. 2006): “to penalize a

defendant when sentencing him for earlier committed Crime A

. simply because he committed dissimilar Crime B... after the

Sentencing Commission increased the offense level for Crime A

...is inconsistent with the principles underlying the proscription

against ex post facto application of the law.”

14

settled principle in this area of jurisprudence, it is that “[a]

n ex post facto law is one which renders an act punishable

in a manner in which it was not punishable when it was

committed.” Fletcher v. Peck, 6 Cranch 87, 138 (1810)

(emphasis added). When Sanjay Kumar completed his

securities fraud in 2000, the guideline punishment was far

less severe than it was at the time of his sentencing tn 2006.

The fact that Mr. Kumar later obstructed justice is not a

constitutionally valid reason to dramatically increase (by

20 levels) the guidelines for his earlier fraud. In concluding

otherwise, the decision of the Court of Appeals is in direct

conflict with this Court’s precedents.

CONCLUSION

For the reasons stated above, the petition for a writ

of certiorari should be granted.

Dated: New York, New York

January 24, 2011

Respectfully submitted,

PAUL SHECHTMAN

Counsel of Record

NATHANIEL Z. MARMUR

STILLMAN, FRIEDMAN &

SHECHTMAN, P.C.

425 Park Avenue

New York, NY 10022

212-223-0200

pshechtman@

stillmanfriedman.com

Counsel for Petitioner Sanjay Kumar

APPENDIX A — OPINION OF THE

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT,

ARGUED SEPTEMBER 19, 2008,

DECIDED AUGUST 12, 2010

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

Docket Nos. 06-5482-er(L), 06-5654-er(CON

UNITED STATES OF AMERICA,

SANJAY KUMAR and STEPHEN RICHARDS,

Defendants-Appellants

September 19, 2008, Argued

August 12, 2010, Decided

JUDGES: Before: WALKER, SACK, LIVINGSTON,

Circuit Judges. Judge Sack dissents in part in a separate

opinion.

OPINION BY: JOHN M. WALKER, JR

OPINION

1p rend,

PI lalx

JOHN M. WALKER, JR., Circuit Judge:

Defendants-Appellants Sanjay Kumar and Stephen

Richards appeal from separate judgments of conviction

by the district court (I. Leo Glasser, Judge), pursuant

to their guilty pleas to several counts of conspiracy,

securities and wire fraud, obstruction of justice, and

perjury. After accepting their pleas, the district court

calculated defendants’ Guidelines ranges for their fraud

and obstruction offenses pursuant to the Sentencing

Guidelines Manual (“Guidelines”) in effect at the time

of their sentencings, and sentenced Kumar and Richards

to non-Guidelines sentences of imprisonment of 144

months and 84 months, respectively, and ordered

restitution payments of $ 800 million and $ 29 million,

respectively.

On appeal, Richards challenges his conviction for

obstruction of justice, arguing that the indictment failed

to properly charge him with that offense. In addition,

Richards attacks his guilty plea to all counts as

constitutionally infirm because it resulted from undue

coercion by the government. Both defendants argue

that, by calculating their Guidelines range according to

the Guidelines in effect at sentencing, instead of at the

time the fraud offenses were committed, the district

court sentenced them in violation of the Ex Post Facto

clause. They also claim that the district court improperly

denied them acceptance of responsibility credit, and that

its orders of restitution were based on erroneous loss

calculations.

We find no infirmity in Richards’s conviction, in the

district court’s application of the 2005 version of the

Guidelines,’ in the district court’s loss determination,

or in the denial of Kumar’s request for acceptance of

responsibility credit at sentencing. We conclude,

however, that the district court erroneously denied

Richards a reduction on the basis of his acceptance of

responsibility and remand for resentencing on that

basIs.

BACKGROUND

Kumar joined Computer Associates (“CA”),

publicly traded corporation, in August 1987 and was

elevated to CEO in August of 2000 and to Chairman ot

the Board of Directors in 2002. Richards joined CA in

1988 and became Head of North American Sales in 1999

During the tenure of both defendants, CA engaged in a

fraudulent accounting practice known as the “35-day

month,” whereby CA backdated contracts executed in

the first few days of a financial quarter to recognize that

revenue in the prior quarter. The purpose of the 35-day

month practice, which began in the 1980s under Kumar’s

predecessor, was to deceive investors into believing that

the company had met or exceeded its quarterly earning

estimates

4a

Appendix A

In February 2002, the United States Attorney’s

Office (*“USAO”) and Securities and Exchange

Commission (“SEC”) began a joint investigation into the

35-day month practice as contravening both accounting

principles and federal securities law. As part of its

investigation, government investigators sought witness

statements from CA personnel. On June 9, 20038, the

USAO and SEC requested that CA conduct its own

internal investigation into the practice and give the

USAO and SEC “direct access” to company employees.

CA’s outside counsel advised CA to comply fully with

the investigation.

On August 25, 2003, the SEC subpoenaed the

testimony of ten individuals associated with CA,

including Kumar and Richards. The SEC interviews

were held at the USAO office in Central Islip, New York.

On September 22, 2003, prosecutors and SEC staff told

Richards’s counsel that Richards was a target of their

criminal investigation, and the SEC reiterated its

demand that Richards comply with the subpoena for his

testimony. In early October 2003, CA told Richards that

he would be terminated if he didn’t comply with the

subpoena. On October 22, 2003, CA’s outside counsel

interviewed Richards, and the following day, Richards

testified before the SEC. Richards falsely denied

knowledge of the 35-day month practice during both

meetings and in his testimony.

On September 22, 2004, CA entered into a deferred

prosecution agreement with the USAO and a civil

settlement with the SEC. The following day, an

Sa

Appendi xr A

indictment charging Richards and Kumar was unsealed.

A superceding indictment was filed on May 17, 2005. By

this indictment, Richards was charged with both

conspiracy to commit, and substantive counts of,

securities and wire fraud, as well as filing false public

statements with the SEC and perjury. Richards was also

charged under 18 U.S.C. § 1512(¢) with obstruction of

justice arising out of his false exculpatory statements

to CA’s counsel and the SEC.

The superceding indictment charged Kumar with

both conspiracy to commit, and substantive counts of,

securities and wire fraud, as well as filing false public

statements with the SEC and making false statements

to the FBI. Kumar was also charged with obstruction of

justice. However, Kumar’s obstruction charge (also

brought pursuant to 18 U.S.C. § 1512(c)) arose out of

different conduct from that of Richards. Specifically, the

government alleged that Kumar, in an effort to cover

up the existence of the 35-day month practice, lied to

CA’s outside counsel, instructed CA’s general counsel

to coach CA employees to lie, authorized CA’s general

counsel to pay a $ 3.7 million bribe to an individual to

procure his silence, and lied to FBI agents and others

during his interview at the USAO’s office.

Both Richards and Kumar made various motions to

dismiss the charges against them. Relevant to this

appeal, first they unsuccessfully moved to dismiss the

obstruction charges, arguing that their oral statements

to government investigators were beyond the reach of

18 U.S.C. § 1512(¢), which they claimed was confined to

documentary evidence.

Next, Richards moved to suppress his false

statements to CA’s outside counsel and the SEC,

claiming that they were coerced in violation of the Fifth

Amendment. Without addressing the merits, the district

court denied the motion on the basis that Richards had

not shown “good cause” for failing to timely file the

motion to suppress pursuant to the court-ordered

deadline.

In April 2006, both defendants pled guilty to all

charges and the Probation Department prepared a

Presentence Report (“PSR”) for each defendant. Both

PSRs ealeulated defendants’ Guidelines ranges based

on the instructions provided in the 2005 Sentencing

Guidelines, notwithstanding the fact that the 35-day

month practice - the basis for the securities fraud

charges - ended in 2000. Richards’s PSR arrived at an

offense level of 50 and a Guidelines range of life

imprisonment, and Kumar’s PSR recommended an

offense level of 51 and a Guidelines range of life

imprisonment. Both PSRs calculated losses to the public

resulting from the 35-day month practice to exceed $400

million

In August 2006, the defendants submitted

objections to the Guidelines calculations in the PSR. The

defendants argued that application of the 2005

Sentencing Guidelines (effective November 2005) to the

securities fraud offenses instead of the 1998 Sentencing

Guidelines (effective November 1998) would violate the

Ny Post Facto clause beeause the 2005 Guideline

ral ignificant enhancement |

i

Appendix A

securities fraud that were not in effect when the fraud

offenses were committed.* The defendants further

objected to the $400 million victim loss calculation as

overinflated.*

In November 2006, the district court sentenced both

defendants under the 2005 Guidelines. At sentencing,

the district court rejected both defendants’ objections

to their PSRs, finding that (1) because the Guidelines

were advisory, the Ha Post Facto clause was not

implicated by sentencing decisions, and (2) the $ 400

million figure was not erroneous, as it was based on the

persuasive testimony of the government's expert

2. According to Kumar, the 35-day month practice ended

in October 2000, when “|CA’s] New Business Model brought [it

to] an end.” Kumar Br. 16. The government does not dispute

that the 35-day month practice ended in October 2000, and the

indictment cites no overt acts of securities fraud by either

defendant after May 2000. Accordingly, the 1998 Guidelines

Manual, which was effective between November 1, 1998, and

November 1, 2000, was the version of the Manual in effect at

the time the defendants’ fraud offenses were completed.

)

3. Individually, and unlike Richards, Kumar also objected

to the PSR’s recitation of his offense conduct, insofar as it

alleged that he had erased data from his computer and engaged

in fraudulent transactions as CA’s CEO. On October 23, 2006,

the district court held a separate Fatico hearing to consider

Kumar’s individual objections. After two days of testimony,

Kumar withdrew all of his individual objections to the PSR

before the district court could rule on them (although he

maintained objections that he held jointly with Riehards and

the government agreed to withdraw one contested allegation

in the PSR).

Sa

Appendix A

witness. The district court also rejected an application

by both defendants for a two-level reduction to the

Guidelines’ base offense level for acceptance of

responsibility. The district court found that Kumar had

not sufficiently accepted responsibility for his crimes to

warrant the departure and that Richards’s acceptance

of responsibility was “[un]timely” because he pled guilty

“just... two weeks before the trial was to begin.” See

Richards Sentencing Tr. 15:14, 16:1-2, Nov. 14, 2006; see

also Richards Sentencing Tr. 16:5-6 (noting that, in light

of Richards’s non-Guidelines sentence, rejection of the

two-level reduction “ma[de] very little difference insofar

as what [his] sentence [was] going to be”).*

The district court then decided to impose non.

Guidelines sentences for both defendants, sentencing

downwardly from the Guidelines’ calculation of life

imprisonment. The court found that “[t]o impose th[e]

sentence[s] [recommended by the Guidelines] in this

case would shock the conscience of this Court... Land]

the conscience of the reasonable person.” Kumar

4. The district court also rejected a two-level enhancement

for obstruction of justice, concluding that the defendants had

“plled] guilty to that crime in other counts and this enhancement

is superfluous and may even be regarded as double counting.”

See Kumar Sentencing Tr. 65:18-20, Nov. 2, 2006; see also

Richards Sentencing Tr. 16:8-13. It appears that the court erred

in not adding two points for obstruction, see, e.g., United States

v Frore, 381 F.3d 89, 95 (2d Cir. 2004); Kumar even coneedes the

error. However, the government has not cross-appealed this

issue and, thus, has waived the issue on appeal. See Norton v

Sam’s Club, 145 F.3d 114, 117 (2d Cir. 1998).

pentencing Ir.

Sentencing Tr. 25:5

Kumar and Richard:

Was Richards

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Richards claim

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Appendix A

the SEC.’ Richards Br. 18. The government argues that

Richards’s challenge is barred by his guilty plea, and

that, in any event, § 1512(c)(2) covers all obstructive

conduct, not just destruction of physical evidence. While

the government may be correct that § 1512(c)(2) applies

to testimonial evidence, we need not reach this issue of

first impression in this circuit, because we find that any

defect asserted is non-jurisdictional and was waived by

the guilty plea.

A plea of guilty “waive{s] any and all non-

jurisdictional defects in the indictment.” United States

v. Moloney, 287 F.3d 236, 239 (2d Cir. 2002). To challenge

the court’s jurisdiction, “the defendant who has pleaded

guilty must establish that the face of the indictment

discloses that the count or counts to which he pleaded

guilty failed to charge a federal offense.” Hayle v. United

States, 815 F.2d 879, 881 (2d Cir. 1987). Thus, to attack

a conviction post-plea, a defendant must establish that

the district court lacked the “power to entertain the

prosecution.” Jd. at 882; see United States v. Cotton, 535

U.S. 625, 6380, 122 S. Ct. 1781, 152 L. Ed. 2d 860 (2002)

(defining “jurisdiction” as “the courts’ statutory or

constitutional power to adjudicate the case”).

Richards claims that he has met this burden by

showing that § 1512(c)(2) does not proscribe false

testimony, thereby establishing that he did not violate

a federal statute. However, regardless of whether

6. The government’s brief repeatedly refers to

“defendants’” statutory argument, thus implying that both

Kumar and Richards challenge their convictions for obstruction

of justice. However, only Richards challenges his conviction on

this basis.

Appendi x A

Richards'’s false testimony violated § 1512(c)(2), it plainly

violated § 1503(a), and the indictment charges at least

that offense. Because the indictment created federal

jurisdiction under § 1503(a), Richards’s claim has no

jurisdictional significance and thus is waived by his guilty

plea.

Section 1503(a) provides, in relevant part, that

“[w]Jhoever corruptly .. . influences, obstructs,

impedes, or endeavors to influence, obstruct, or impede,

the due administration of justice” is guilty of a criminal

violation. 18 U.S.C. § 1503(a). In United States v.

Aguilar, 515 U.S. 598, 598, 115 S. Ct. 2857, 1382 L. Ed.

2d 520 (1995), the Supreme Court interpreted this

subsection as a “eatchall” intended to prohibit all

obstructive behavior. See id. (referring to subdivision

four of § 1503(a) as “far more general in scope” than the

remainder of the subsection). Courts in this circuit have

likewise given § 1503’s omnibus clause a genet ies non-

restrictive reading. See, e.g., United States v. Rosner,

352 F. Supp. 915, 919 (S.D.N.Y. 1972) (noting that the

omnibus clause “embraces the widest variety of conduct

that impedes the judicial process”); see also United

States v. Solow, 138 F. Supp. 812, 814 (S.D.N.Y. 1956)

(characterizing the omnibus provision as “all-

embracing”). Other circuits’ readings of § 1503's

omnibus clause have been as broad as, or even broader

than, the reading in this circuit.’

7. See, e.g., United States v. Maloney, 71 F.3d 645, 659 (7th

Cir. 1995); U nite d States v. Kenny, 973 F.2d 339, 342-43 (4th Cir.

1992): Unated States v. London, 714 F.2d 1558, 1566-67 (11th Cir.

1983); Unrated States v Faudman, 640 F.2d 20, 23 (6th Cir. 1981);

United States v. Howard, 569 F.2d 1331, 1833 (Sth Cir. 1978)

United States v Walasek, 527 F.2d 676, 679 n.11 (3d Cir. 197:

4ppendix A

However, § 1503(a) only prohibits false testimony that

has a direct “nexus” to an official government

proceeding. Aguilar, 515 U.S. at 600. In endorsing a

nexus test, the Supreme Court stated that

[t]he action taken by the accused must be with

an intent to influence judicial or grand jury

proceedings; it is not enough that there be an

intent to influence some ancillary proceeding,

such as an investigation independent of the

court’s or grand jury's authority. .. . [T]he

act must have a relationship in time, causation,

or logic with the judicial proceedings. In other

words, the endeavor must have the natural

and probable effect of interfering with the due

administration of justice. ... [I]f the

defendant lacks knowledge that his actions

are likely to affect the judicial proceeding, he

lacks the requisite intent to obstruct.

Id. at 599 (internal citations and quotation marks

omitted). The nexus limitation is “best understood as

an articulation of the proof of wrongful intent that will

satisfy the mens rea requirement of ‘corruptly’

obstructing or endeavoring to obstruct.” United States

v. Quattrone, 441 F.3d 153, 170 (2d Cir. 2006). Thus,

statements made to investigating agents who might or

might not testify before a grand jury are insufficient to

violate § 1503(a), because false testimony given in

anticipation of a purely hypothetical judicial proceeding

is not covered by § 1503(a). See United States v. Bruno,

383 F.3d 65, 87-88 (2d Cir. 2004); see also United States

l3a

Appendix A

v. Schwarz, 283 F.3d 76, 109 (2d Cir. 2002). Nevertheless,

a defendant does not need to know with certainty that

his conduct would affect judicial proceedings, nor does

his conduct need to actually obstruct justice. Instead,

the defendant’s conduct must only have the “natural

and probable effect of interfering with the due

administration of justice.” Aguilar, 515 U.S. at 599

(internal quotation marks omitted). Section 1503(a)

applies where a defendant “inten[{ds] to obstruct justice”

but “is foiled in some way.” /d. at 601-02.

Here, Richards’s conduct easily falls within the

ambit of § 1503(a). Richards lied to the SEC in an attempt

to “impede” the SEC’s ongoing investigation, which

Richards knew was not simply an agency fishing

expedition or an “ancillary proceeding” that might or

might not result in criminal proceedings. /d. at 599.

Richards concedes that he knew that criminal

proceedings were not merely possible when he made his

false statements, but that the government “predicted”

that criminal charges would be brought against him

prior to his SEC interview. See Richards Br. 10; see also

Post-Argument Letter from Stephen Richards to the

Court, dated Sept. 26, 2008 (“Richards Letter”), at 1

(“Richards testified ... at the [USAO] under the .

belief that admitting knowledge of the 85 Day Month

would incriminate him in securities fraud.”). Richards

thus plainly “entertained ... expectations” during his

interview at the USAO that his false statements to the

SEC would impede impending criminal proceedings

brought against him. Schwarz, 283 F.3d at 109; see

United States v. Cueto, 151 F.3d 620, 634 (7th Cir. 1998)

Ida

Appendix A

(finding nexus to exist where defendant’s conduct, which

“pre-date[d] the empaneling of the grand jury, .. .

corruptly endeavored to obstruct the due administration

of justice”).§ “{I]t is clear that if the representations”

8. Although “ § 1503’s application typically begins after

the commencement of formal judicial proceedings,” United

States v. Novak, 217 F.3d 565, 572 (8th Cir. 2000) (internal

quotation marks and emphasis omitted), in this case, Richards

concedes that, when he lied, he knew that “formal judicial

proceedings” were not only possible or likely, but that the

government intended to bring them. Such obstructive behavior

during a federal investigation - whether that investigation is

conducted by a grand jury, or by a federal agency like the SEC

where there is also a “quite strong, perhaps inescapable”

inference that the witness’s statements “would be presented to

[a] grand jury” - is covered by § 1503(a). See United States v.

Triumph Capital Group, Inc., 544 F3d 149, 169 (2d Cir. 2008);

see, e.g., United States v. Giovanelli, 464 F.3d 346, 350-51 (2d Cir.

2006) (per curiam) (obstructive behavior during a grand jury

investigation but before indictment sufficient to trigger

application of § 1503(a)); see also United States v. Macar, 453

F.3d 926, 939-40 (7th Cir. 2006) (noting that “the Aguzlar court

did not draw a line between subpoenaed or ‘actual’ and non-

subpoenaed or ‘potential’ witnesses,” but instead “focused on

the defendant's intent ... when he performed the alleged act of

lying to investigating FBI agents”) ; United States v. Davis,

183 F.3d 231, 243 n.3 (3d Cir. 1999) (nexus requirement satisfied

where conspirators “knew of or anticipated a grand jury

investigation” (emphasis added)); Unzted States v. Vaghela, 169

F.3d 729, 734-35 (11th Cir. 1999) (holding that a conviction for

conspiracy to obstruct justice under § 1503 does not require a

“judicial proceeding [to] exist []” at the time of the offense, but

only that the defendant “directly intended to prevent or

otherwise obstruct the processes of a specifie judicial

proceeding in a way that is more than merely ‘speculative’”

(Cont'd)

5a

Appendix A

made by Richards “had been believed, the grand jury

would have been thrown completely off the trail that it

was pursuing with respect to” Richards. United States

v. Jespersen, 65 F.3d 993, 1001 (2d Cir. 1995). Therefore,

there was a sufficiently close “relationship in time,

causation, [and] logic” between Richards’s conduct and

likely judicial proceedings to satisfy § 1503(a)’s nexus

requirement. United States v. Reich, 479 F.3d 179, 186

(2d Cir. 2007) (internal quotation marks omitted).

In addition, the indictment fully apprised Richards

of the elements of his offense under § 1503(a).

Specifically, the indictment stated that

Richards well knew and believed that certain

of the statements he made during the

interviews were false and that he otherwise

concealed during the interviews information

which he knew to be material to tke

Government Investigations. Richards further

well knew, and in fact intended, that his false

(Cont'd)

(quoting Aguilar, 515 U.S. at 601)); Cueto, 151 F.3d at 634 (“It is

well established that investigations undertaken with the

intention of presenting evidence before a grand jury are

sufficient t constitute ‘the due administration of justice’ under

§ 1503.”) Gnternal citation and quotation marks omitted)). Cf

United States v. Brenson, 104 F.3d 1267, 1280 (11th Cir. 1997)

(“Section 1503 employs the term ‘due administration of justice’

to provide a protective cloak over all judicial proceedings,

irrespective of at what stage in the judicial process the improper

activity occurs.”’).

l6a

Appendix A

statements and concealment of material

information would have the effect of

obstructing and impeding the Government

Investigations.

As the government correctly notes, “[t]he citation of a

statutory section number ...is not a part of the offense,

and... an allegedly erroneous statutory citation is not

a jurisdictional defect.” Gov’t Br. 11; see Fed. R. Crim.

P 7(e)(3) (“Unless the defendant was misled and thereby

prejudiced, neither an error in a citation nor a citation’s

omission is a ground... to reverse a conviction.”). The

failure of the indictment to specify § 1503(a), as opposed

to § 1512(c) (2), is therefore not grounds for vacating

Richards’s guilty plea.’®

Richards’s remaining arguments, the government

also correctly notes, are “mere corollaries of [his]...

claim that [he] pleaded to a ‘non-offense.’” Gov’t Br. 13

14. For example, Richards argues that his guilty plea

9. The government may have charged Richards with

violating § 1512(c)(2) instead of § 1503 (a) due to its concern

that a § 1503(a) charge would raise a “Masterpol issue.” See

Gov’t Br. 22 n.8 (citing United States v. Masterpol, 940 F.2d 760

(2d Cir. 1991)). In Masterpol, we held that witness tampering 1s

prohibited only by § 1512, and is not covered by § 1503’s omnibus

clause. 940 F.2d at 763. The government’s concern with respect

to Richards’s obstruction charge was misplaced. While

Masterpol might have presented an obstacle for indicting

Kumar, who attempted to bribe a witness, as previously noted,

Kumar is not appealing his obstruction of justice conviction.

Unlike Kumar, Richards did not engage in witness tampering.

Thus, Masterpol is not implicated here.

17a

Appendix A

should be vacated because he was “misinformed of the

elements of [his] crime,” since, according to Richards, §

1512(c)(2) does not reach testimonial evidence. Richards

Br. 19 (citing Bousley v. United States, 523 U.S. 614,

618, 118 S. Ct. 1604, 140 L. Ed. 2d 828 (1998)). But

Richards’s argument rests on the flawed premise that

the indictment charged him with a “non-offense.” That

is not the case here; at most, the charge should have

been brought under § 1503(a) instead of § 1512(c)(2),

and the indictment fully stated the elements of an

offense under that section. Vacating Richards’s plea is

therefore unnecessary, as Richards does not “stand |]

convicted of an act that the law does not make criminal.”

Bousley, 528 U.S. at 620 (internal quotation marks

omitted). In any event, because there was no

jurisdictional defect in Richards’s obstruction charge,

his guilty plea waived any ancillary claims based on that

charge.

Il. Does Richards’s Guilty Plea Bar His Coercion

Claim

Next, Richards argues that the government violated

the Fifth Amendment’s prohibition on government-

compelled testimony by placing improper pressure on

CA to cooperate in the government’s investigation that

resulted in CA’s insistence that Richards either testify

before the SEC or be terminated. The district court

rejected Richards’s motion to suppress his testimony,

which was admittedly false and became the basis for the

obstruction of justice charge to which Richards pled

guilty, as untimely in light of the district court’s schedule

[Sa

Appendix A

for motions. On appeal, Richards argues that his guilty

plea should not bar his coercion claim because review of

his claim is necessary “to preserve the integrity of the

judicial process.” Richards Br. 32. Richards’s coercion

claim is easily resolved because the Fifth Amendment

does not protect false testimony.

As previously noted, a plea of guilty “waivels] any

and all non-jurisdictional defects in the indictment.”

Moloney, 287 F.3d at 239. However, this court may

overturn a guilty plea on involuntariness grounds when

the defendant shows that his plea “was substantially

motivated by a coerced confession.” United States ex

rel. Ross v. McMann, 409 F.2d 1016, 1028 (2d Cir. 1969)

(en banc), vacated on other grounds sub nom. McMann

v. Richardson, 397 U.S. 759, 90S. Ct. 1441, 25 L. Ed. 2d

763 (1970). In addition, a guilty plea that is otherwise

“voluntary and intelligent” may be overturned if it

contains “constitutional violations” that are “logically

inconsistent with the valid establishment of factual

guilt.” Menna v. New York, 423 U.S. 61, 62 n.2, 965. Ct.

241, 46 L. Ed. 2d 195 (1975) (per curiam).

Richards’s coercion claim is not viable, because it is

based on a fatally flawed premise: that false statements

- whether or not made under coercive circumstances

are protected by the Fifth Amendment. To the contrary,

the Supreme Court has repeatedly held that the fifth

Amendment does not “confer [|] a privilege to lie.”

Brogan v. United States, 522 U.S. 398, 404, 118 5. Ct.

805, 139 L. Ed. 2d 830 (1998). “[P]Jroper invocation of

the Fifth Amendment privilege against compulsory self

19a

Appendix A

incrimination allows a witness to remain silent, but not

to swear falsely ....” United States v. Apfelbaum, 445

U.S. 115, 117, 100 S. Ct. 948, 63 L. Ed. 2d 250 (1980); see

also United States v. Wong, 431 U.S. 174, 180, 97S. Ct.

1823, 52 L. Ed. 2d 231 (1977); Bryson v. United States,

396 U.S. 64, 72, 90 S. Ct. 355, 24 L. Ed. 2d 264 (1969).

Richards’s coercion claim is based entirely on perjured

testimony, and thus, is unsupportable. See, e.g., Scher

v. Nat’l Ass'n of Sec. Dealers, Inc., 386 F. Supp. 2d 402,

409 (S.D.N.Y. 2005) (finding plaintiff could not state a

claim for “supposed deprivation of her constitutional

rights” where she had perjured herself before the

National Association of Securities Dealers); see also

United States v. Nanni, 59 F.3d 1425, 1431 (2d Cir. 1995)

(negative inferences may not be drawn from immunized

exculpatory testimony “except to the extent that the

testimony amounts to perjury”).

Richards is attempting to turn the “dilemma” faced

by individuals who are improperly coerced into

incriminating themselves or who risk a negative

inference from their silence, into a “trilemma” whereby

an individual feels he must either testify truthfully, risk

the inference, or lie under oath. See Brogan, 522 U.S

at 404. The Supreme Court rejected this “trilemma,”

which is “wholly of the guilty suspect’s own making,” as

insufficient to implicate the Fifth Amendment's

protection. /d. The government may have been provided

“the leverage to secure | Richards’s] guilty plea” by

Richards’s lies, see Richards Reply Br. 25, but Richards’s

attempt to draw a sort of constitutional equivalency

between a “coerced confession” and a coerced lie, see

We previously reserved ruling on this question. Se

United States v. Santopietro, 166 F.3d 88, 96-97 (2d Cir.

1999), abrogated on other grounds, Sabri v. United

States, 541 U.S. 600, 124 S. Ct. 1941, 158 L. Ed. 2d 891

2004). In Santopietro, we noted that “[t]he Commission

has issued a policy statement specifying that where some

offenses occur before and some occur after a revised

Guidelines version, the later version is to be applied to

all offenses.” Jd. at 96; accord U.S.S8.G. § 1B1.11(b)(3)

(1998). However, the Commission’s policy statement does

not mark the end of the inquiry, because “an agency's

interpretation of its own regulations” is only given

“controlling weight” where its interpretation “does not

violate the Constitution or a federal statute.” Stinson

v. United States, 508 U.S. 36, 45, 113 8S. Ct. 1913, 123 L.

Ed. 2d 598 (19938) (internal quotation marks omitted);

accord United States v. Stephens, 347 F.3d 427, 430 (2d

Cir. 2003). Thus, we must independently consider

whether the one-book rule violates the Aa Post Fact

elause.

A majority of circuit courts has held that the one

book rule does not contravene the Ex Post Facto clause,

“at least as applied... to a series of similar offenses.”

Santopietro, 166 F.3d at 96. In United States v. Vivit,

the Seventh Circuit held that “the enactment of the

grouping rules funder U.S.S.G. § 3D1.2] provides fair

notice such that the application of § 1B1.11(b)(8) and

3D1.2 does not violate the Ex Post Facto Clause.” 214

F.3d 908, 919 (7th Cir. 2000). According to the Seventh

Circuit, the combination of the grouping rules and the

one-book rule puts a defendant on notice that “the

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/d. (emphasis in original) (internal citation omitted). The

Ortland court effectively found that application of the

one-book rule under the circumstances would be akin

to the “tail wagging the dog.” See, e.g., United States v.

Bertoli, 40 F.3d 1384, 1404 n.17 (3d Cir. 1994) (coneluding

that, “while the one-book rule... certainly can compel

application of the earlier Manual,” the #x Post Facto

clause may apply so as to prohibit the application of the

later Manual to all counts); see also Santopietro, 166

F.3d at 96 (discussing the related problem, left by

Ortland and Bertolt, of “whether the grouping rules of

the earlier or later versions are to be applied, after each

version has been used to determine the adjusted base

ffense level] for each count”)

In Santopietro we declined to reach this issue, 1

part because of the circuit conflict, and in part because

it was possible that the defendant’s sentence in that case

would not be affected by the difference in the two

Guidelines versions. /d. at 96-97.'4 In this case, we must

face the issue because the defendants’ Guidelines

calculations under the later version had an unequivocally

negative impact on their recommended sentences. In

addition, in the decade since Santopzetro was decided,

courts within this circuit have repeatedly wrestled with

and are divided on, the issue. Compare United States v.

Weisberg, No. 0O7C R66, 2008 U.S. Dist. LEXIS 43094,

2008 WL 2323376 at *4-5 (W.D.N.Y. June 2, 2008)

14. Nor did th us circuit’s ruling in United States v Meeks

solve the issue currently before us. 25 F.3d 1117 (2d Cir. 1994),

tbrogated by Johnson v United States, 529 U.S. 694, 1208S. |

5, 146 L. Ed. 2d 727 (2000). Se

29a

Appendix A

(finding no ex post facto problem where “defendant was

on notice that any tax offense committed after

November 2001 would face the more stringent tax

table”), with United States v. Johnson, Nos. 97-CR-206,

98-CR-160, 1999 U.S. Dist. LEXIS 8819, 1999 WL

395381, at *9-11 (N.D.N.Y. June 4, 1999) (concluding

that “the most appropriate way to handle. . . multiple

counts in light of the [E']x [P]ost [F'Jacto clause is to apply

the earlier Sentencing Manual to those counts as to

which the underlying conduct was completed before the

later version became effective ... and apply the current

version to counts involving subsequent conduct”). Thus,

this case presents the appropriate opportunity to

“provide [] definitive instructions on how to handle such

a situation.” Johnson, 1999 U.S. Dist. LEXIS 8819, 1999

WL 395381, at *10.

We conclude that the one-book rule set forth in §

1B1.11(b)(8) does not violate the Ex Post Facto clause

when applied to the sentencing of offenses committed

both before and after the publication of a revised version

of the Guidelines. “[C]Jentral to the ex post facto

prohibition is a concern for ‘the lack of fair notice and

governmental restraint when the legislature increases

punishment beyond what was prescribed when the

crime was consummated.” Miller, 482 U.S. at 430

(quoting Weaver v. Graham, 450 U.S. 24, 30, 101 S. Ct.

960, 67 L. Ed. 2d 17 (1981)). The existence of an ex post

facto violation turns on whether an individual was

deprived of fair notice, “not [on] an individual’s right to

less punishment.” Weaver, 450 U.S. at 30. The Framers’

intent in requiring such notice was “to assure that

ippenal ‘

legislative Acts give fair warning of their effect and

permit individuals to rely on their meaning until

explicitly changed.” /d. at 28-29.

Applying these principles to § 1B1.11 (b) (3), we hold

that the adoption of the one-book rule prior to the

commission of the defendants’ obstruction offense had

placed them on notice of the consequences of committing

that second offense. That the consequences of the

second offense included the application of the post-

amendment Guidelines to all offenses considered at the

defendants’ sentencing was fully apparent prior to the

commission of the crimes that triggered those

consequences. When the defendants committed their

obstruction offenses, “it was not the amendments to the

Sentencing Guidelines that disadvantaged [the

defendants], it was [their] election to continue [their]

criminal activity.” Cooper, 35 F.3d at 1250; accord Vivit,

214 Fi3d at 919.

Our affirmance of the defendants’ sentences on this

ground offends neither of the fundamental concerns -

notice and governmental restraint - protected by the

E'x Post Facto clause. As to notice, we observe that prior

to the commission of their obstruction offenses the

defendants could have altered their conduct so as to

avoid any heightened punishment imposed on the basis

of the one-book rule by choosing not to obstruct the

government’s investigation of their prior fraud. As to

governmental restraint, our holding continues to

prevent the Sentencing Commission and Congress from

imposing a heightened punishment following the

sla

Appendix A

commission of the criminal conduct triggering that

punishment. As the Guidelines themselves recognize,

application of the one-book rule does not, and indeed

may not, entail the application of a sentencing range

devised after the commission of all of the offenses

subject to sentencing. See § 1B1.11 emt. background

(2008) (“[E]}ven in a complex case involving multiple

counts that occurred under several different versions

of the Guidelines Manual, it will not be necessary to

compare more than two manuals to determine the

applicable guideline range - the manual in effect at the

time the last offense of conviction was completed and

the manual in effect at the time of sentencing.” (emphasis

added)).!°

The one-book rule, when it leads to a higher

sentencing range than would be applied to a single

offense, operates in a manner similar to that of the

recidivist statutes and “three strikes” laws upheld by

the Supreme Court and our sister circuits in the past.

15. Contrary to Judge Sack’s contention, our ruling does

not suggest that legislatures may avoid the restrictions of the

Ex Post Facto clause by including in criminal laws some notice

that the law “might change.” See Dissent at 24 (quoting Miller,

482 U.S. at 431). Kumar and Richards, at the time of their

obstruction offenses, were on notice that the law had changed

and would apply to their convictions for fraud if, and only if,

they invoked the one-book rule by committing a subsequent

offense. Nor was the notice provided to the defendants

“speculative and incomplete,” Dissent at 25; at no point would

an examination of the Sentencing Guidelines have left the

defendants uncertain as to the sentencing ranges applicable to

their conduct.

Appendix A

The Supreme Court in Gryger v. Burke, 334 U.S. 728,

68 S. Ct. 1256, 92 L. Ed. 1683 (1948), rejected the

defendant’s argument that the consideration of his past

offenses in determining his sentence for a later offense

was foreclosed by the Hx Post Facto clause. Jd. at 732.

(“| W]e [do not] think the fact that one of the convictions

that entered into the calculations by which petitioner

became a fourth offender occurred before the Act was

passed, makes the Act invalidly retroactive ....”). The

Ninth Circuit has on several occasions upheld such laws.

United States v. Ahumada-Avalos, 875 F.2d 681, 684

(9th Cir. 1989) (per curiam) (upholding a repeat offender

statute); see also United States v. Kaluna, 192 F.3d 1188,

1199 (9th Cir. 1999) (en banc) (“The Supreme Court and

this court uniformly have held that recidivist statutes

do not violate the Ex Post Facto clause if they are ‘on

the books at the time the {present] offense was

committed.” (alteration in original) (quoting Ahumada-

Avalos)). The Fifth, Seventh, Eighth, and Eleventh

Circuits have come to this same conclusion. See United

States v. Rosarvo-Delgado, 198 F.3d 1354, 1356 (11th Cir.

1999); United States v. Rasco, 123 F.3d 222, 227 (5th Cir.

1997); United States v. Washington, 109 I'3d 335, 338

(7th Cir. 1997) (“The three-strikes law was enacted

before Washington committed the bank robberies, so

he had fair warning of the consequences attached to new

violent offenses.”); United States v. Farmer, 73 F.3d 836,

841 (8th Cir. 1996).

The fact that the impetus for enacting the recidivist

statutes was to reflect the greater culpability associated

with the latter offenses, whereas the impetus for the

{ppendix A

enactment of the one-book rule is to avoid “piecemeal”

sentencing, U.S.8.G. § 1B1.11 emt. background (2008),

is of no relevance for purposes of determining the

retroactivity of the legal consequences of a defendant’s

actions. It might also be argued that the recidivist

statutes impose punishment upon only a single crime,

the prior offenses having already been committed and

for which the defendant had been sentenced. Of the

seven cases cited above, however, six place no reliance

on that potential distinction. Only the Eighth Circuit, in

Farmer, implies that the sentencing of only the last

crime that triggered the consequences of the recidivist

statute was a factor supporting the constitutionality of

the “three strikes” law. 73 F.3d at 841 (“[S]o long as the

actual crime for which a defendant is being sentenced

occurred after the effective date of the new statute, there

is no ex post facto violation.” (quoting United States v

Allen, 886 F.2d 143, 146 (8th Cir. 1989)) (internal

quotation marks omitted)). Despite this statement in

Farmer, the distinction between the recidivist statutes

and the one-book rule makes neither a practical nor a

logical difference for purposes of an analysis under the

Ex Post Facto clause. In both cases, prior conduct

becomes the basis for imposing a heightened sentence

only upon conviction for a later criminal act.'° Here, the

16. Judge Sack attempts to distinguish the operation of

recidivist statutes from the operation of the one-book rule by

noting that recidivist statutes “impose a stiffer penalty for the

latest crime,” but he fails to acknowledye that the stiffer penalty

is imposed only because the defendant committed earlier

crimes. See Dissent at 28. Judge Sack also states that Conpress

could rewrite the one-book rule to reflect its coneern with the

(Cont’d)

The loss calculation in this case was sharply disputed.

The most significant area of disagreement centered on

how to properly frame the economic impact of the 35-

day month practice. The government's expert, Dr.

Mukesh Bajaj, framed the loss resulting from the 35-

day month practice as an “earnings miss,” which caused

an estimated 10.68% decline in CA’s stock price that

translated into a loss of $ 330 million for one quarter of

fiscal year 2000 alone. Conversely, the defendants’

expert, Professor Daniel Fischel, denied that the 35-

day month practice caused ah “earnings miss,” whereby

the earnings CA _ reported were completely

“fabricate[d],” but instead testified that the practice

only caused an “earnings shift,” whereby earnings that

were properly attributable to a future quarter were

reported in the previous quarter. Kumar Br. 29-30

(internal quotation marks omitted). Fischel did not

submit his own loss calculation, but focused only on

refuting Bajaj’s analysis."

The district court held a #atico hearing in order to

untangle this web. During the hearing, the district court

questioned both Bajaj and Fischel on their respective

analyses. Specifically, the district court challenged

Bajaj’s analysis as based on only one quarter's losses,

which Fischel argued resulted in an artificially inflated

loss caleulation. In turn, the district court questioned

18. Bajaj also submitted “two alternative scenarios” to th

district court, calculating loss figures of “at least $ 3.1 billion”

and “at least $3.5 billion.” Supplemental Report of Dr. Mukesh

Bajaj, at 22-23, Oct. 9, 2006. The district court did not rely on

these alternative figures in its loss calculation

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Fatico Hr’g Tr. 416:13-14, 23,

Fischel’s testimony would cast doubt on the entire basis

for the Generally Accepted Accounting Principles rule

hat earnings earned in one quarter must be reported

n the same quarter; if merely “shifting” earnings

between quarters had no negative effect on investo1

there would be no need for the rule in the first place. As

Bajaj noted in his report, “[mJany firms that missed

earnings in a given quarter could also have avoided

announcing the miss if they could ‘borrow’ sufficient

earnings from the next quarter to cover their shortfall.”

Supplemental Report of Dr. Mukesh Bajaj, at 12, Oct

government properly characterizes

), 2006. Thus, the

“stretching | «

ischel’s analysis as

a aan hoe eae ‘ded reasons why Fische!

VOril ent not only proviaeda reasons Wry a GL St

alysis was wrong, but also provided reasons wh;

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Bajaj’s analysis was sound. Specifically, the governmen

howed that “re-booked” false earnings in one quartet

ould indeed have caused CA’s stock price to decline,

inter alia, causing loss to investors who purchased

\ stock at inflated prices because of fraudulent

selosures and omissions flowing from the 35-day

10nth, then sold after such inflation had seeped out of

al

e stock. as well as losses to investors who sold

the 35-day month caused CA ti

2)

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leflated prices, whe}

inderstate results. See Fatico Hr’g Tr.

2006. In other words, individual sales and purchases o

4

A came out even in the end \a ljubious contention, ;:

best), CA’s individual investors did not go unharmed.

Instead, claims filed by individual investors with CA’s

claims administrator for their losses resulting from the

35-day month practice reveal that those losses not only

existed, but were significantly underestimated by Baja),

who “calculated damages only to an artificially narrow

subset of victims: namely, those victims who filled out

and submitted claims for restitution,” which is often

“substantially fewer than all eligible victims.” Gov’t Br

55 n.22. This potential disconnect between the financial

health of a corporation and that of individual investors

is precisely why the type of “event study” undertaker

by Bajaj “conforms to the most widely accepted practi

f economists.” Jd. at 55

| +o itonnan? c . + i ‘ | 8. 197

1 Ile qgQerenadallt: @isU Clidilli Ulidat baja)

calculation was erroneous because the “sample

earnings misses” he used in his study “involved firm

that had experienced genuine adverse developments .

such that a stock price decline would be expected.

Kumar Br. 30. Thus, the defendants argue that tl

C

sample firms Bajaj used in his study were not

appropriate comparators to CA. Again, the defendant:

argument is unpersuasive. In estimating a

calculation, a sentencing court should not analyze thé

impact of fraud in a vacuum, but instead shoul

recognize that “[mJany factors may cause a decline it

share price between the time of the fraud and the

revelation of the fraud,” not all of which will b

attributable to fraudulent acti’ LLY mited

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—_

Appendix A

a loss of confidence in management is properly included

in the loss calculation, see F'bbers, 458 F.3d at 127. Thus,

we affirm the district court’s loss calculation of greater

than $ 400 million as not clearly erroneous.

V. Were The Defendants Properly Denied

Acceptance Of Responsibility Credit

Next, the defendants argue that, “[a]lthough [they]

pleaded guilty to all the charges against [them],” the

district court abused its discretion in denying them “any

credit for acceptance of responsibility.” Kumar Br. 44

(emphasis in original); see Richards Br. 47-48.

A defendant is entitled to a two-point reduction

under U.S.8.G. § 3E1.1(a) if he “clearly demonstrates

acceptance of responsibility for his offense.” A defendant

“who enters a guilty plea is not entitled to an adjustment

under this section as a matter of right.” U.S.S.G. § 3E1.1,

emt. n.3. In particular, a defendant who engages in

“lejonduct resulting in an enhancement under § 3C1.1

(Obstructing or Impeding the Administration of Justice)

ordinarily” would not be entitled to the reduction, as

such conduct “indicates that the defendant has not

accepted responsibility for his criminal] conduct.” /d. at

emt. n.4. However, there may be “extraordinary cases”

in which a defendant who obstructs justice in some way

is also entitled to a reduction for acceptance of

responsibility. /d.

A district court’s § 3E1.1 determination is entitled

to “great deference” because the “sentencing judge i:

inn

in aunique position to evaluate a defendant's acceptance

of responsibility.” /d. at emt. n.5. A district court’s

decision to deny credit for acceptance of responsibility,

primarily a factual determination, will be upheld unless

it is “without foundation.” United States v. Harris, 13

E§3d 555, 557 (2d Cir. 1994).

\. Kumar’s Acceptance Of Responsibility

At sentencing, the district court denied Kumar’s

request for an acceptance of responsibility reduction

under § 3E1.1, concluding that Kumar had not

sufficiently accepted responsibility for his criminal

conduct because he had obstructed justice, and because

he had waited until the eve of trial to plead guilty. In

addition, the district court noted that (1) Kumar’s plea

allocation was phrased to “mute [] the gravity of his

complicity in the securities fraud offenses,” Sentencing

Tr. 61:12-13, Nov. 2, 2006, and (2) Kumar’s meritless

objections to the evidence-tampering and fraudulent

transaction allegations in the PSR revealed a lack of

acceptance of responsibility, Kumar Sentencing Tr. at

60:18-61:21.

On appeal, Kumar claims that the district court's

rejection of his acceptance of responsibility request was

erroneous. First, Kumar claims that, although an

acceptance of responsibility departure is generally

unavailable when a defendant engages in obstructive

behavior, that exception does not apply to him because

his obstructive behavior occurred pre-indictment and

the exception only applies to post-indictment obstructive

47a

Appendix A

behavior. See, ¢.g., United States v. Gregory, 315 3d

637, 641 (6th Cir. 2003) (granting acceptance points

where “lal]ll of [the defendant’s] obstructive conduct

predated [the] indictment”); see also United States v.

Teyer, 322 F. Supp. 2d 359, 368 (S.D.N.Y. 2004) (“Were

courts to hold that any obstructive conduct, however

early in the investigation ... of a case... forever

disentitled a defendant to credit for later acceptance of

responsibility, this incentive would be ill served.”).

Second, Kumar argues that the district court placed too

much reliance on the “lateness” of his plea in rejecting

his request for an acceptance of responsibility reduction,

which he argues is only a basis for denying him “a third

acceptance point, ... but [not]... for denying the first

two.” Kumar Br. 44; see United States v. Sloley, 464 F.3d

355, 359 (2d Cir. 2006) (“[A] government motion is a

necessary prerequisite to the additional one-level

decrease [for a timely plea] under Guidelines §

3E1.1(b).”); see also Kumar Br. 49 (noting that “this

Court has not directly addressed the relationship

between the timeliness of a defendant’s guilty plea and

his receipt of acceptance credit”).

We need not resolve either of these alleged flaws in

the district court’s reasoning with respect to Kumar,

however, because an examination of the record shows

that he engayed in sufficient objectionable post

indictment conduct to justify a rejection of his request

for acceptance of responsibility credit. Specifically,

Kumar, individually and separe iy from Richards, acted

in ways that the district court reasonably found to be

inconsistent with a full acceptance of responsibility. kor

request, the court relied on a single factor: the lateness

of Richards’s plea. According to the district court, “the

most significant factor in the acceptance of responsibilit)

scale is the factor of time limits.” Richards Sentencing

‘Tr. 15:7-9. The district court concluded that, by pleading

two weeks before trial, Richards had exceeded those

“time limits,” and therefore, was not entitled t

acceptance of responsibility credit. On this point, we

disagree.

Timeliness of a defendant’s plea is an appropriate

consideration in the acceptance of responsibility

determination. U.S.S.G. § 3E1.1 emt. n.1(h). However.

while the two-level reduction provided for in § 3E1.1(a)

is for demonstration of acceptance of responsibility, the

Sentencing Guidelines specifically provide that

timeliness of a plea is primarily relevant to the reduction

of an additional] point under § 3E1.1(b), ostensibly “for

helping the authorities save resources.” LU/nited States

v. Ortiz-Torres, 449 F.3d 61, 76 (ist Cir. 2006) (internal

quotation marks omitted). See United States v. Eyler.

67 F.3d 1386, 1390-91 (9th Cir. 1995) (“While the kev

inquiry for purposes of [§ 3E1.1(a)] is whether the

defendant has demonstrated contrition, once this has

been determined, then the focus of the section (b) inquiry

is on timeliness.” (emphasis in original)). As Judge

Lynch stated in Teye?

lhe Guidelines specifically provide a sancti

for belated guilty pleas that fail adequately

to save the resources of the Government and

the Court. Defendants who plead at an earl)

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VI. Was Richards’s Sentence Substantively

Unreasonable

Finally, Richards contends that his non-Guidelines

sentence of seven years’ imprisonment was

unreasonably long. despite the PSR’s recc sndation

unreasonably iong, despite the Fons recommendation

of a life sentence. However, because we vacate

Richards’s sentence as procedurally unsound and

remand the case for resentencing, there is no need to

entertain his substantive reasonab ences argument at

this time. See Gall v. United States, 552 U.S. 38, 128 S.

Ct. 586, 597, 169 L. Ed. 2d 445 (2007) (“Assuming that

the district court’s sentencing decision is procedurally

sound, the appellate court should then consider the

substantive reasonableness of the sentence imposed

under an abuse-of-discretion standard.”) (emphasis

idded); accord United States v. Cavera, 550 F.3d 180,

190 (2d Cir. 2008) (en bane)

CONCLUSION

For the foregoing reasons, the district court

judgment and sentence as to Kumar is AFFIRMED in

all respects; the district court hipseir sito as to Richards

is AFFIRMED, but Richards’s sentence is VACATED

and REMANDED to the district court for resentencing

eonsistent with this opin ion

~

CONCUR BY: SAC

DISSENT BY: SACK

DISSENT

SACK, Circuit J

dissenting in part

[ join in the majority’s conclusions regarding the

sufficiency of evidence for Richards’s conviction of

obstruction of justice, the rejection of Richards’s

eoercion claim, the applicability of 18 U.S.C. § 1512(¢)

to Richards’'s conduct, the district court’s loss

calculation, and the defendants’ acceptance of

responsibility. I disagree, however, with the majority's

conclusion that the defendants’ sentencing on securities

and wire fraud charges on the basis of the “one book”

of the Sentencing Guidelines in effect in 2005, long after

those violations had been completed, does not violate

the constitutional prohibition against ex post facto laws.

The defendants’ commission of subsequent obstruction

of justice offenses, though related to the underlying

securities and wire fraud charges and committed at a

time when the 2005 Guidelines would apply, does not, in

my view, render those Guidelines applicable to the

securities and wire fraud charges because at the time

the defendants committed the securities and wire fraud

offenses, they did not have “fair notice” of the severity

of the penalties to which they might be subjected for

them under the later, harsher Guidelines. To the extent

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that the majority conclude otherwise, | respectt

dissent.

The Ex Post Facto clause of Article 1, Section 9,

reads: “No Bill of Attainder or ex post facto Law shall

be passed.”' U.S. CONST. ART. I, § 9, cl. 3. Some eleven

vears after it was adopted as part of the original United

States Constitution, Justice Samuel Chase, a President

Washington appointee, observed that this “prohibition

necessarily requires some explanation; for, naked

and without explanation, it is unintelligible, and means

nothing.” Calder v. Bull, 3 U.S. 386, 390, 1 L. Ed. 648, 3

Dall. 386 (1798) (Chase, J.). He then established as black

letter Constitutional law that, inter alia, “[e]very

criminal] law that changes the punishment, and inflicts

a greater punishment, than the law annexed to the

crime, when committed,” violates the Ex Post Fa

] : gz . hsycie ++

‘lause. /d.- (emphasis omitte

an acti

tne passing oI the law, and WHICNA Was 21?

done, eriminal: and punishes sucn action. 2n

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Appendix

Nearly two hundred years later, Chief Justice

Rehnquist, writing for the Court, explained:

(Cont'd)

law required at the time of the commission of

offence, 77 order to convict the offender.

Id. (emphasis in original). The continued viability of the fourth

category, at least with the breadth suggested by Justice Chase,

is in doubt, see Collins v. Youngblood, 497 U.S. 37,43 n.3, 1108.

Ct. 2715, 111 L. Ed. 2d 30(1990) (“As cases subsequent to Calder

make clear, this language was not intended to prohibit the

appheation of new evidentiary rules in trials for crimes

committed before the changes.”), but that aspect of ex post facto

law is not implicated in this appeal.

)

3. The Supreme Court has consistently and repeatedly held

that a law that increases the punishment of a crime after the

completion of the offending act violates the x Post Facto clause.

See, eg., Garner v. Jones, 529 U.S. 244, 249, 1208S. Ct. 1862, 146

L. Ed. 2d 236 (2000) (“One function of the #'r Post Facto Clause

is to bar enactments which, by retroactive operation, increase

the punishment for a crime after its commission.”); Collins, 497

U.S. at 43 (“Legislatures may not retroactively ... increase the

punishment for criminal acts.”); Weaver v. Grakam, 450 U.S. 24,

30, 101 S. Ct. 960, 67 L. Ed. 2d 17 (1981) (finding that the Fx

Post Facto clause “forbids the imposition of punishment more

severe than the punishment assigned by law when the act to be

punished occurred”); Calder, 3 U.S. at 397 (Paterson, J.) (“The

enhancement of a crime, or penalty, seems to come within the

same mischief as the creation of a crime or penalty; and

therefore they may be classed together.”). These decisions

recognize no distinction between the scope of protection under

the Ex Post Facto clause for laws that increase a sentence and

laws that criminalize conduct after the commission of the

relevant act.

S6a

Appendix A

Early opinions of the Court portrayed

[the enumeration by Justice Chase in Calder]

as an exclusive definition of ex post facto laws

{citing three Nineteenth Century Supreme

Court decisions}. So well accepted were these

sener igs 7 the Court in Beazell v. Ohio,

269 U.S. 167, 468. Ct. 68, 70 L. Ed. 216 (1925),

was ee en confidently summarize the

meaning of the Clause as follows

“It is settled, by decisions of this

Court so well known that their

citation may be dispensed with, that

any statute which punishes as a

crime an act previously committed,

which was innocent when done; which

makes more burdensome the

punishment for a crime, after its

commission, or which deprives one

charged with crime of any defense

available according to law at the time

when the act was committed,

prohibited as ex post facto.” Id., at

169-170.

See also Dobbert v. Florida, 432 U.S. 282,

97 S. Ct. 2290, 53 L. Ed. 2d 344 (1977).

The Beazell formulation is faithful to our

best knowledge of the original understanding

of the Ex Post Facto Clause: Legislatures may

not retroactively alter the definition of crimes

or increase the punishment for criminal acts.

Appendix A

Collins v. Youngblood, 497 U.S. 37, 42-43, 110 S. Ct.

2715, 111 L. Ed. 2d 30 (1990) (holding change in State

law allowing reformation of improper criminal verdicts

not to violate Fx Post Facto clause) (footnotes omitted).

As we observed in somewhat different

circumstances, “the ex post facto doctrine is concerned

not just with notice, but with the inherent injustice

associated with retroactivity itself.” Sash v. Zenk, 439

F:3d 61, 64 (2d Cir. 2006) (denial of panel rehearing); see

also id. (contrasting the ex post facto doctrine and the

rule of lenity, which is “more narrowly focused” on the

sole issue of notice).4 The ex post facto doctrine therefore

4. We continued:

For this reason, the Supreme Court has

associated the ex post facto doctrine with the

Fifth Amendment’s Takings Clause, which

“prevents the Legislature ... from depriving

private persons of vested property rights

except for a ‘public use’ and upon payment of

‘just compensation,’” and with the

“prohibitions on ‘Bills of Attainder’ in Art. I,

§§ 9-10, [which] prohibit legislatures from

singling out disfavored persons and meting

out summary punishment for past conduct.”

Landgraf v. USI Film Prods., 511 U.S. 244,

266, 114 S. Ct. 1483, 128 L. Ed. 2d 229 (1994).

Ex post facto is as much a doctrine of

retroactivity as it is a doctrine of notice.

ld. at 64-65.

Sa

Appendix A

requires not only “notice,” but notice that is “fair.” See,

e.g., Weaver v. Graham, 450 U.S. 24, 30, 101 5. Ct. 960,

67 L. Ed. 2d 17 (1981).

The “One-Book Rule”

Section 1B1.11 of the United States Sentencing

Guidelines provides in pertinent part:

Use of Guidelines Manual in Effect on

Date of Sentencing (Policy Statement)

(a) The court shall use the Guidelines

Manual! in effect on the date that the

defendant is sentenced.

(b)(1) If the court determines that use of

the Guidelines Manual in effect on the date

that the defendant is sentenced would violate

the ex post facto clause of the United States

Constitution, the court shall use the

Guidelines Manual in effect on the date that

the offense of conviction was committed.

(2) The Guidelines Manual! in effect on

a particular date shall be applied in its

entirety. ...

(3) If the defendant is convicted of two

offenses, the first committed before, and the

second after, a revised edition of the Guidelines

Manual became effective, the revised edition

of the Guidelines Manual is to be applied to

both offenses.

S9a

Appendix A

The notion that only one set of Guidelines should be

applied in imposing a single sentence, even where that

sentence covers multiple crimes the commission of which

straddles the effective dates of two sets of Guidelines,

appears to derive from the principle that each set of

Guidelines is meant to act as a “cohesive whole.” United

States v. Bailey, 123 F.3d 1381, 1404 (11th Cir. 1997). “A

sentencing court has no authority to pick and choose,

taking one provision from an earlier version of the

guidelines and another from a later version .. . . [The

one-book rule] avoids twisting the guidelines, depriving

them of uniformity and consistency.” /d. (quoting

United States v. Keller, 58 F.3d 884, 890 (2d Cir. 1995)

(brackets and ellipsis in Bazley)).

Consistent with that principle, Application Note 2

to Section 1B1.11 provides, in relevant part, that

the approach set forth in subsection (b) (3)

should be followed regardless of whether the

offenses of conviction are the type in which

the conduct is grouped under § 3D1.2(d). The

ex post facto clause does not distinguish

between groupable and nongroupable

offenses, and unless that clause would be

violated, Congress’ directive to apply the

sentencing guidelines in effect at the time of

sentencing must be followed.

U.S.S.G. § 1B1.11 App. Note 2.

60a

Appendix A

Relevant Facts

The facts relevant to the ex post facto issue before

us are relatively simple and straightforward.

The defendants engaged in securities and wire

fraud, and conspired to commit such fraud. The last

overt act of the conspiracy was committed in May of

2000, and the fraud itself — the use of a so-called “35

day accounting month” — ended no later than October

2000. At the time the defendants committed these

crimes, the November 1, 1998, edition of the Guidelines

was in effect.

Between 2001 and 2003, the Guidelines were revised

so as to increase the punishment for crimes of the sort

that the defendants had previously committed. The

revisions resulted in an increase in the offense levels

applicable to those crimes based upon the amount of

money lost by the victims of the crime, and in an

expansion of the loss table through the addition of new

categories for losses of $ 200 and $ 400 million, with the

latter calling for a 30-level enhancement compared to

the 20-level enhancement that would have applied to a

$ 400 million loss under the 1998 version of the

Guidelines. The revised Guidelines also created a new

6-level enhancement for fraud involving 250 or more

victims, and a 4-level enhancement for violations of

securities laws by defendants who were officers or

directors of public companies. See U.5.5.G.

§§ 2B1.1(b)(2)&(b)(13).

6la

Appendix A

Under the Guidelines in effect at the time of the

defendants’ commission of the fraud and conspiracy

crimes, the applicable offense level was 30, which

translated into a Guidelines range of 97 to 121 months’

imprisonment. As a result of the subsequent revisions,

the offense level was raised to 50, resulting ina

recommended sentence of life imprisonment. See Maj.

Op. at [24].

Beginning in September 2002 and continuing until

April 2004, the defendants engaged in various acts

designed to cover up their previously committed

conspiracy and fraud. In a 2005 superseding indictment

— the original indictment had been handed down in 2004

-the defendants were charged with committing fraud

and conspiracy to commit fraud over a period of time

ending in 2000.° But the superseding indictment also

charged Richards with committing perjury thereafter,

Kumar with making false statements to a Special Agent

of the FBI thereafter, and both defendants with filing

5. The indictment purports to charge the frauds as

oecurring “[ojn or about and between April 1, 1998 and April 6,

2004, both dates being approximate and inclusive,” but alleges

no overt act after May of 2000 and itself describes “The Scheme

to Defraud” as occurring “{pJrior to and during CA’s fiseal year

2000, which ended March 31, 2000.” On appeal, the government

does not dispute that the frauds were completed before the

revision of the Guidelines in 2001 and 2002 and the subsequent

increases in the penalties for securities and wire fraud. See, e ¢.,

Appellees’ Br. at 46 (“This case involves the application of a

Guidelines manual to two sets of crimes, one occurring before,

and one after, a revision of the Guidelines.”).

¢

~ ’ 7 ; :

, , ¢ ~ —_ :

ass 2

14

Yt 4 ,

, .

’ ‘< 4 ri }

receive was notice as to punishment

ong crime: not as to the fraud and conspi

yr which punishment was revised marked

pw ard, but tne subsequent oostruction offe nses

not changed. This

the defendants were

tion: ft

which the Guidelines have

inconsequential because

jected to an increased sentence for obstruc

were subject d to an increased nay ence for

completed frauds. And I think that the

ifficient attention to the quality of notice

It is not notice s?

facto jurisprudence re quire

but notice that is “fair.’ ne the Supreme Court sal

‘The constitutional prohibition against ex ,

t ae avoided merely by adding to a law

> changed;” in that case the Court

tion beeause the defendant

» laws eanno

notice that it mig

viola

inge of punishment

iitted it. Miller 482

.

T

A

aware ol! the prescribed rd

for his offense at the time he con

’ ‘) es % - hs . : sie ye = aise ’

431. k 2% Post facto is as much a doctrine oO!

1S. at

etroactivity as i a doctrine of notice,’ :

64-65, and “the inherent a

retroactivit) 1ust gulde

nypersuaded

“umMen

}

iicatec

the fraud after the revision, that use of the revised

Guidelines violated the Fx Post Facto clause where the

alleged frauds before and after the revision were “not

properly subsumed into one huge scheme to defraud,

but rather should be thought of as separate schemes

’*

)

Six of our sister circuits that have addressed this

issue have limited their conclusion of constitutionality

either to cases that involve a continuing course of

conduct or to cases in which the offenses are sufficiently

similar to be subject to “grouping” under the Guidelines.

See United States v. Duane, 533 F.3d 441, 449 (6th Cir.

2008) (concluding the “better argument in favor of §

1B1.11(b)(3)’s constitutionality” to be “that a Guidelines

revision, § 1B1.11(b)(3) itself, and the § 3D1.2(d)

grouping rules provide a criminal fair warning that

committing future similar crimes may subject him to

increased penalties for similar prior offenses”); United

States v. Sullivan, 255 F.3d 1256, 1262-63 (10th Cir. 2001)

(“[T]he grouping rules and the relevant conduct

provisions gave [the defendant] notice that his three

consecutive failures to file would be considered part of

the same course of conduct and would collectively

determine his sentence.”); Vivit, 214 F.8d at 919

(deciding that the Guidelines, including in particular the

grouping rules, succeed in “provid[ing] notice to

criminals that engaging in ongoing fraudulent behavior

involving the same type of harm risks grouping of

convictions, which because of the one-vook rule, will all

be sentenced according to the Guidelines in effect when

the latest conduct oecurred.”); United States v. Aimler,

70a

Appendix A

167 F.3d 889, 895 (5th Cir. 1999) (“[The defendant] had

proper notice that, if he continued to commit related

offenses that would be grouped under § 3D1.2(d), he

would be sentenced under the guidelines in use when

he committed the last offense in the grouped series.”);

Railey, 123 F.3d at 1404-05 (“[T]he one book rule,

together with the Guidelines grouping rules and

relevant conduct, provide that related offenses

committed in a series will be sentenced together under

the Sentencing Guidelines Manual in effect at the end

of the series. Thus, a defendant knows, when he

continues to commit related crimes, that he risks

sentencing for all of his offenses under the latest,

amended Sentencing Guidelines Manual.”); United

States v. Regan, 989 F.2d 44, 48 (1st Cir. 1993) (deciding,

before the establishment of the one-book rule, that it

was not an ex post facto violation to use revised

Guidelines where offenses committed prior to revision

had been grouped with offenses committed after the

revision and “were manifestly part of the same ongoing

scheme of embezzlements”).

Two other circuits have found the one-book rule to

be constitutional even in cases not involving continuing

courses of conduct or grouped offenses. These circuits

only reached a conclusion of constitutionality, however,

in cases that involved repeated commission of the same

offense before and after the revision of the Guidelines.

See United States v. Lewis, 235 F.3d 215, 218 (4th Cir.

2000) (finding the application of the one-book rule to be

constitutional in a case involving multiple acts of tax

evasion before and after a revision of the Guidelines);

/\a

Appendix A

United States v. Cooper, 35 F.3d 1248, 1251 (8th Cir. 1995)

(concluding that the Ex Post Facto clause was not

violated where “a series of firearms offenses” straddled

a revision of the Guidelines, and comparing series of

offenses to a “conspiracy that straddles the Sentencing

Guidelines’ effective date”).

The two remaining circuits that have addressed this

issue® have unequivocally concluded, to the contrary,

that the one-book rule is unconstitutional in these

circumstances, even where the convictions that straddle

a revision of the Guidelines are grouped for sentencing

purposes. See United States v. Ortland, 109 F.3d 539

(9th Cir. 1997); United States v. Bertoli, 40 F.3d 1384

(3d Cir. 1994).

So, it seems, we now stand alone: The panel

concludes that any offense that has been committed by

a defendant after a revision of the Guidelines may be

used as a basis to apply the revised Guidelines to crimes

committed before the revision so long as the pre- and

post-revision crimes are prosecuted together but

irrespective of the relationship, if any, between them.”

9, The D.C. Circuit does not appear yet to have dealt with

the situation with which we are faced here.

10. The majority suggest that the Eighth Circuit has a

similar rule based on that court’s recent decision in United

States v Anderson, 570 F.3d 1025 (8th Cir. 2009), which the

majority understands to “base [] its holding entirely on the

application of the one-book rule.” Maj. Op. at 27 n.13. [am not

persuaded that Anderson stands for the proposition that the

one-book rule alone is sufficient to overcome ex post facto

(Cont'd)

The majority take this position in a case in which th

two sets of crimes, the substantive crimes and the

coverup offenses, are in fact related indeed, they have

(Cont'd)

problems inherent in sentencing a defendant under one versio!

of the Guidelines for crimes committed both before and after

that version came into effect. The majority properly note that

“the erimes at issue [in Anderson] were potentially subject to

grouping under Guidelines section 2J1.6 and 3D1.2(¢).” id. But

the crimes at issue in Anderson were not only “potentially”

subject to grouping under the named sections, they were in

fact grouped under those sections. See Appellee’s Br., Unztea

States v. Anderson, Nos. 08-3402, 08-3436, 2009 U.S. Dist. LEXIS

4331. 2009 WL 2819251 (8th Cir. Feb. 5, 2009) (“Per the grouping

rules, the district court properly grouped the underlying wir

fraud convictions with the failure-to-appear conviction and then

applied the ‘one-book rule’ to the group.”). And while the

language in that decision may be broad enough to suggest that

the holding is based solely on the one-book rule, see Anderson,

570 F.3d at 1034 (“Pursuant to the one-book rule, becaust

Anderson had been convicted of two offenses, the first wir

fraud — committed before, and the second failure to appear

—~ committed after, a revised edition of the guidelines manual

became effective, the revised edition of the guidelines should

be applied.”), the decision was based entirely on case la

pertaining to grouped offenses, see id. at 1033 (“We have held

that the one-book rule does not violate the #’x Post Facto Clause

even when it results in a higher guidelines range, because

defendants have ‘fair warning’ that the revised guideline:

manual will apply to grouped offenses.” (emphasis added))

Because the decision in Anderson was rendered in a cas

involving grouped crimes and relied entirely upon precedent

that applied only to grouped offenses, | remain doubtful that

such language can be read as an affirmative holding on th

]

{

post facto implications of the one-book rule

73a

Appendix A

been grouped together for sentencing purposes — and

no such broad holding is required for resolution of this

appeal." As discussed in more detail below, I do not think

the relationship of these offenses to be sufficiently close

to conceive of them as groupable continuing offenses

and therefore to overcome the ex post facto problem,

but such a holding would at least acknowledge that there

is a notice problem inherent in allowing a Guideline

revised after a crime was committed to be used to

sentence for that crime.

The majority seek to find in the one-book rule a form

of constructive notice to defendants as to the

consequences of their crimes because they knew at the

time they committed any successive crime that the

sentence for all prior completed crimes indicted

together with the successor crime would be increased

as a consequence of that successive crime. But the x

Post Facto clause requires not only notice, but also that

11. It is worth noting that the government repeatedly

makes clear that it only argues that there is no ex post facto

problem in this case because the crimes straddling the revision

of the Guidelines are related. See, e.g., Appellee’s Br. at 45

(“{Blecause the securities fraud and the obstruction constitute

‘relevant conduct’ vis-a-vis one another, application of the later

Guidelines did not violate the Constitution.” (citation omitted));

id. at 47 (“The grouping rules, together with the one-book rule,

put the defendant on notice... .”); 7d. at 48 (“[TJhis Court

recognizes obstruction after-the-fact to be ‘relevant conduct’

to prior fraud.”); 2d. at 50 (“Because these counts were properly

grouped pursuant to § 3D1.2, the application of the 2005

Guidelines pursuant to § 1B1.11 did not violate the kx Post

Facto Clause.”).

J4a

Appendix A

the notice be “fair.”!* In the case of Messrs. Kumar and

Richards, it was not.

I agree with the sentiments of Judge Kelly, of the

Tenth Circuit, dissenting under somewhat similar

circumstances: “[T]he only notice .. . provide[d to the

defendants] at the time of commission of the . . . pre-

amendment offenses is that the sentence could be

determined in accordance with guideline provisions that

may or may not be amended. Even if the notice is

sufficient to inform a defendant that the last offense

could determine the sentence, only a defendant with the

prescience of a clairvoyant could anticipate an actual

sentence based upon a yet-to-be amended guideline.”

United States v. Sullivan, 255 F.3d 1256, 1266 (0th Cir.

2001) (Kelly, J., dissenting).

Grouping

The majority and I agree that grouping is not

determinative of whether the sentences here comport

1?

Blackstone illustrates the second purpose of the /’x

Post Facto Clause, providing fair warning, by

looking to the policies of the Roman despot Caligula.

See 1 William Blackstone, Commentaries on the

Laws of England 46 (1765). Caligula had laws written

in fine print and hung them high up on pillars so

that they were not available to nor readable by the

Roman citizens affected by such laws. /d. They

provided no fair warning and so, like laws made ex

post facto, they would not have provided citizens

fair notice to refrain from the criminalized conduct.

United States v. Kilkenny, 493 F.3d 122, 126 (2d Cir. 2007)

75a

Appendix A

with the Due Process Clause. We reach this conclusion

for different reasons, however. The issue of grouping of

offenses affects the ex post facto inquiry, it seems to me,

in at least two ways — each relevant to the case at bar,

and only one of which is acknowledged in the majority

opinion.

First, there is considerable support for the

argument that when offenses are grouped for sentencing

purposes because “the behavior is ongoing or continuous

in nature and the offense guideline is written to cover

such behavior,” U.S.S.G. § 3D1.2(d), ex post facto

concerns are met. According to the Eighth Circuit, for

example, “it has been held that applying the Sentencing

Guidelines to a conspiracy that straddles the Sentencing

Guidelines’ effective date is not violative of the ex post

facto clause. [Courts have] noted that with conspiracy

and other continuing offenses it is the completion date

of the offense that controls the version of the Sentencing

Guidelines to be applied.” Cooper, 35 F.3d at 1251

(emphasis added; citations omitted). This argument

would support a finding of constitutionality despite the

fact that the penalty prescribed for the crime is made

harsher during the course of the criminal behavior

because the defendants at least theoretically made a

choice to continue their unlawful activity while the

penalties for it were being increased."

13. A similar argument, albeit a less convincing one, might

be made to justify the use of a revised version of the Guidelines

to sentence the repeated commission of the same crime

committed both before and after the revision, as the Fourth

Circuit did in Lewis and the Eighth Circuit did in Cooper. Such

is not the case here. See Lewis, 235 F.3d at 218; Cooper, 35 F.3d at

1251.

Appendix f

This is precisely the argument the government

makes here, contending that the obstruction offenses

are part of a “continuing course of conduct” with the

fraud and conspiracy offenses. Appellee’s Br. at. 49. While

| do not think this argument persuasive in this particular

ease,’ [ recognize that the argument at least attempts

14. The argument that continuing offenses do not implicate

ex post facto concerns might carry some day, but not this one. |

do not think it proper to cast the abortive attempt to cover up

the fraud and conspiracy several years later as a continuation

of those crimes. They were complete when the defendants’

fraudulent and conspiratorial activity ended. When the

defendants engaged in fraud they likely hoped, even expected,

to escape detection altogether. That they did not, and later

engaged in obstruction of justice to try to avoid further

exposure and thereby criminal prosecution, does not seem to

me to be a part of the orivinal criminal activity.

[ think it significant in this respect that the obstruction

and fraud/conspiracy offenses were prouped together under

Section 8D1.2(¢), and not 8D14.2(d). (The fraud and conspiracy

offenses were in fact prouped with each other under Section

3D1.2(d), but these offenses were then grouped with the

obstruction offenses under Section 8D1.2(¢c)). These two sections

rovern different kinds of conduct and have distinet implications

for ex post facto analysis. Grouping a continuing offense under

Section 8D1.2(d) may not cause ex post facto concern where

crimes are grouped because “the behavior is ongoing or

continuous in nature,” and therefore the crimes are arguably

nol completed until after the Guidelines are revised.

But there is no such implication of continuation under

Section 3D1.2(c), invoked here, which requires grouping

“t'wihen one of the counts embodies conduct that is treated as a

specific offense characteristic in, or other adjustment to, the

(Cont'd)

77a

Appendix A

to address the ex post facto problems inherent in

applying a revised version of the Guidelines to the

sentence of an act completed before the revision. Had

this been the basis of the majority’s decision today, our

disagreement on the law would seem to me to be a

narrow one.

But the majority appear to view the impact of

grouping in asecond fashion instead, one that has indeed

been endorsed by several of our sister circuits. It was

expressed explicitly by the Seventh Cireuit in V2vit:

“(T]he adoption of the one-book rule and the grouping

rules put[s] criminals on notice that ‘the version of the

sentencing ruidelines in effect at the time he committed

the last series of grouped offences will apply to the entire

proup.’” Vivit, 214 F3d at 918 (quoting Kimler, 167 F.8d

at 895). Before they violated the securities fraud and

conspiracy laws, the defendants “knew” the Guidelines

sentence at the time, but they also “knew” that it could

be increased if they later committed an offense in

(Cont'd)

guideline appheable to another of the counts.” U.S.S.G.

§ 3D1.2(¢c). That fraud and obstruction offenses share an offense

characteristic or may lead to an adjustment to the sentence for

one another has no bearing | can see on whether the fraud

offenses ean be understood as continuing through the time that

the Guidelines were revised. In this ease, as | have tried to

explain, the fraud cunnot be so understood. The fact that the

two sets of crimes were prouped together under this section of

the Guidelines has no implications with respect to the notice

the defendants received of the consequences of their conduet

committed before the Guidelines were revised

78a

Appendix A

this case obstruction of justice — that would be grouped

with it.

The majority base their unique holding on the one

book rule rather than the grouping theory described

here, but the two analyses bear similarities: The one-

book rule as applied here is constitutional because the

Guidelines provide notice that the law is subject to

change. Even if they do not provide notice of what that

change will be at the time an act is committed, they

provide such notice before a subsequent act. Whether

this analysis is conducted under the grouping rules or

the one-book rule seems largely beside the point to me.

In either event it permits notice that is insufficient under

the observation in Maller that “[t]he constitutional

prohibition against ex post facto laws cannot be avoided

merely by adding to a law notice that it might be

changed.” Miller 482 U.S. at 48

This sort of compound, abstract notice hardly seems

to me to be “fair” notice at the time the fraud and

conspiracy crimes were committed of what punishment

the defendants might receive if they misbehaved in that

manner — giving notice only that if they did what they

did, and later committed another (potentially

“sroupable”) crime, their sentence could be increased

by some unknown amount. | am reminded again of

Judge Kelly’s reference to the “defendant with the

prescience of a clairvoyant [who alone] could anticipate

an actual sentence based upon a yet-to-be amended

ruideline.” Sullivan, 255 I.3d at 1266 (Kelly, J.,

dissentingy). It is, in short, speculative and incomplete

notice and therefore not “fair.”

1)

fppendix A

Recidivism Cases

The majority reason by analogy to decisions,

including those of the Supreme:-Court, upholding

recidivism statutes those that punish crimes

committed by a person with a specified level of criminal

record more harshly than those committed by a person

without such a reeord. “The one-book rule,” the

majority say, “when it leads to a higher sentencing range

than would be applied to a single offense, operates in a

manner similar to that of the recidivist statutes and

‘three strikes’ laws upheld by the Supreme Court and

our sister circuits in the past.” Maj. Op. at 32. They cite

Gryger v. Burke, 334 U.S. 728, 68S. Ct. 1256, 92 L. Ed.

1683 (1948), as having “rejected the defendant’s

argument that the consideration of his past offenses in

determining his sentence for a later offense was

foreclosed by the #’x Post Facto clause. Jd. at 732.” Maj.

Op. at 32.

The majority then assert that “[t]he fact that the

impetus for enacting the recidivist statutes was to reflect

the greater culpability associated with the latter

offenses, whereas the impetus for the enactment of the

one-book rule is to avoid ‘piecemeal’ sentencing is of no

relevance for the purposes of determining the

retroactivity of the legal consequences of the

defendant’s actions.” Maj. Op. at 38 (citation omitted).

The majority therefore conclude that “the distinction

between the recidivist statutes and the one-book rule

makes neither a practical nor a logical difference for

purposes of an analysis under the #'x Post Facto clause,”

because “the defendants’ obstruction offense is the

SOa

{ppendix A

‘actual crime’ triggering the application of the one-book

rule, the defendants had prior notice of the

consequences of that crime, and therefore the

application of the one-book rule is proper.” Maj. Op. at

[2

34 -eded.

I think, to the contrary, that there is a crucial

difference between the legislative branch deciding that

a particular crime is more serious when committed by

-and that the public is in need of more protection from

a person who has a specified level of past eriminal

behavior than someone who does not, and increasing a

penalty for a completed crime “triggered” by the

commission of a subsequent one — indeed, irrespective,

in the majority’s view, of whether there is a connection

between those crimes committed before the change and

those committed afterward. Justice Jackson, writing for

the Court in Gryger, put it thus:

Nor do we think the fact that one of the

convictions that entered into the calculations

by which petitioner became a fourth offender

oecurred before the Act was passed, makes

the Act invalidly retroactive or subjects the

petitioner to double jeopardy. The sentence

as a fourth offender or habitual criminal is

not to be viewed as either a new jeopardy or

additional penalty for the earlier crimes. If

is a stiffened penalty for the latest crime,

which is considered to be an aggravated

offense because a repetitive one.

Gryger, 334 U.S. at 732 (emphasis added)

Sla

Appendix A

The later crime may, as the majority say, “trigger”

the change in the sentence for the earlier crimes, but

what it triggers is what the Gryger court said was

improper: an “additional penalty for the[ir] earlier

crimes.” Whatever the trigger, the revisions increased

the offense levels applicable to the earlier fraud and

conspiracy crimes, not the later obstruction of justice

offenses. The revisions added an increase based upon

the amount of money lost by the victims of the fraud

and conspiracy crimes; they expanded the loss table for

the fraud and conspiracy offenses, not the obstruction

of justice offenses, by adding new categories for losses

of $ 200 and $ 400 million; and they created a new 6.

level enhancement for fraud, not obstruction of justice,

involving 250 or more victims; and added a 4-level

enhancement for violations of securities laws, not the

obstruction of justice laws, by defendants who were

officers or directors of public companies. See U.S.S.G.

§§ 2ZB1.1(b) (2)&(b) (13); ef Cooper, 35 F.3d 1248, 1251

(Sth Cir. 1994) (“It is well settled that habitual offender

statutes do not offend the ex post facto clause, even

though such statutes impact imposition of an instant

sentence in consideration of past criminal conduct.

[Citing Gryger, 334 U.S. at 732.] The enhanced sentence

is considered to impose a stiffer penalty for the latest

crime, which is considered to be an aggravated offense

due to its repetitive nature.” (emphasis added)). This

is, of course, the critical difference between recidivist

statutes and the circumstances we are faced with here:

that while, as the majority point out and as Gryger

makes clear, “the consideration of [] past offenses in

determining [the] sentence for a later offense” may be

Sla

Appendix A

permissible for ex post facto purposes, Maj. Op. at [32],

it is the consideration of a later offense in determining

the sentence for past offenses, as we do here, that runs

afoul of ex post facto considerations.

As a “practical” matter, to be sure, Congress, or

perhaps the Sentencing Commission, might have — and

may still — adopt a permissible recidivism statute to

cover a circumstance very much like the present one: A

person who commits an obstruction of justice in order

to cover up a fraud in which the losses inflicted by the

fraud are $ X will receive a Y level increase in offense

level. It does not follow, “logically” or otherwise, that

reaching a similar result by the present method — by

retroactively increasing the punishment for fraud — is

constitutional. The hypothetical law would provide

punishment for behavior of which the potential violator

would be fully and fairly warned before engaging in that

behavior. It would reflect the perceived seriousness of

future obstruction offenses, publically disseminated

before any such offense is committed, and not an attempt

to re-punish completed past acts. To increase the

punishment for fraud and conspiracy after they are

completed provides no “fair notice” and evokes “the

inherent injustice associated with retroactivity itself.”

Sash, 489 F.3d at 64.

CONCLUSION

We have been instructed for more than 200 years

that “a law that changes the punishment, and inflicts a

greater punishment, than the law annexed to the crime,

APPENDIX B — ORDER DENYING PETITION

FOR REHEARING OF THE UNITED STATES

COURT OF APPEALS FOR THE

SECOND CIRCUIT

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