# Petition for Writ of Certiorari — Kumar v. United States

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 2011
- **Citation:** 563 U.S. 1028

## Text

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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}

&, .

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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)

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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
Of Justice

Richards claim
obstruction of
statute und
destruction

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LQa
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

os

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tor confidence in CA’s management.
419:8, 18. Accepting

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and harming inves
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;
tT

in
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)

992 .
-Z00, UCT. Zo,

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

) ry A } —h9, 1

r ) \ OY (NA (*
POUT KOSAKA Lele 1 i i) { om

7
f.
v
hy

es
—_

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

“~

J
4.1)

TY}

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

jf y = . Pe »>* - aL if “ys
Laggravatles a cririe, OF Makes it greats

vas, When committed. 3rd. Every law that cha

uRImShHMeERL, an
i

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inthe law annexedat

Ja

4 > ,
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
ILED OCTOBER 25, 20

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386006_0882%3A1. Public record. Not legal advice.