Petition for Writ of Certiorari — Dahod v. United States

\ Supreme Court. U.S

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97-589 OCI - | 1997

No.

OFFICE QF IHE CLERK

In The

SUPREME COURT OF THE UNITED STATES

October Term, 1997

AARIF DAHOD,

Petitioner,

V.

UNITED STATES OF AMERICA,

Respondent.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH

PETITION FOR WRIT OF CERTIORARI

BRUCE A. ZIMET, ESQUIRE

Counsel For Petitioner

One Financial Plaza

Suite 2612

Fort Lauderdale, FL 33394

(954) 764-7081

i

QUESTIONS PRESENTED FOR REVIEW

1. | Whether the sentencing court's use of the 1993 Sentencing

Guidelines to impose a sentence governed by 1987 Sentencing

Guidelines violates the ex post facto protection of the

Constitution.

2. Whether the sentencing court's dissimilar application of

similar specific offense characteristics among codefendants

constitutes improper disparate sentencing.

3. Whether imposition of sentence enhancements pursuant to

both §2F1.1(b)(2) and §3B1.1B(b) U.S.S.G. constitutes

impermissible double counting.

a

il

LIST OF ALL PARTIES TO THE PROCEEDING

1. Aarif Dahod, Petitioner

2. United States of America, Respondent

iil

TABLE OF CONTENTS

QUESTIONS PRESENTED FOR REVIEW ........... i

BASIS FOR JURISDICTION OF THIS COURT ........ l

CONSTITUTIONAL PROVISIONS AND STATUTES

INVOLVED IN THE CASE..................... l

CONCISE STATEMENT OF THE CASE ............. 2

1. Basis for Federal Jurisdiction in the Court of First

DG Ae hte C hers en 4

ARGUMENT:

I. THE SENTENCING COURT'S USE OF THE

1993 SENTENCING GUIDELINES TO

IMPOSE A SENTENCE GOVERNED BY 1987

SENTENCING GUIDELINES VIOLATES THE

EX POST FACTO PROTECTION OF THE

| a a 5

I]. THE SENTENCING COURT'S DISSIMILAR

APPLICATION OF SIMILAR SPECIFIC

OFFENSE CHARACTERISTICS AMONG CO-

DEFENDANTS CONSTITUTES IMPROPER

DISPARATE SENTENCING ................ 8

iV

oe One OG

Ill. IMPOSITION OF SENTENCE

ENHANCEMENTS PURSUANT TO BOTH

§2F1.1(b)(2) AND §3B1.1B(b) U.S.S.G.

CONSTITUTES IMPERMISSIBLE DOUBLE

CEE 05 oss cs cabeeonae ace ce 10 |

COO oa eh ee eee 13 |

APPENDICES:

OPINION OF THE UNITED STATES COURT OF /

APPEALS, ELEVENTH CIRCUIT, MARCH 6,

POOF oi Se es Ce CEO A eee App. A

ORDER OF THE UNITED STATES COURT OF

APPEALS, ELEVENTH CIRCUIT, DENYING

PETITIONER'S PETITION FOR REHEARING... App. B

EXCERPT FROM TRIAL TRANSCRIPT .... App. C

EXCERPT FROM TRIAL TRANSCRIPT .... App. D

§1B1.11 - USE OF GUIDELINES MANUAL IN

EFFECT ON DATE OF SENTENCING (Policy

PU Fis ke OS CaN eh rl Oe a nee kas 5 App. E

§2F1.1-FRAUD AND DECEIT ............ App. F )

§2F1.1 - FRAUD AND DECEIT ............ App. G

§3Bl.1- AGGRAVATING ROLE ........... App. H

PETITION FOR REHEARING .............. App. I

Vv

TABLE OF AUTHORITIES

PAGE

CASES

Miller v. Florida, 482 U.S. 423 (1987) ................ 5

Stinson v. United States, 113 S.Ct. 1913 co: , CRIS iaan 12

United States v. Boula, 997 F.2d 263 (7th Cir. 1993) .. 6,11

United States v. Cableigh, 75 F.3d 242 (6th Cir. 1996) ... 12

United States v. Canon, 66 F.3d 1073 (9th Cir. ) ow 6

United States v. Curtis, 934 F.2d 553 (5th Cir. 1991) .... 11

United States v. Godfrey, 25 F.3d 263 (5th Cir.), cert.

denied, _U.S.___ 115 S.Ct. 429, 130 L_Ed.2d 342

fe ae ee re ea ee ee eee 10

United States v. Harotunian, 920 F.2d 1040 (1st Cir. 1990) . . 6

United States v. Kelly, 993 F.2d 702 (9th Cir. | 1]

United States v. Massey, 48 F.3d 1560 (10th Cir.), cert.

denied, _ _ U.S. ___, 115 S.Ct. 429, L.Ed.2d 342

Es ee tax ca eet te ee 10

United States v. Rodriguez, 968 F.2d 130 (2d Cir.), cert.

denied, 113 S.Ct. 139 (1992) .................... 6

United States v. Romano, 970 F.2d 164 (6th Cir. 1992).. 10, 12

United States v. Rappaport, 999 F.2d 57 (2d Cir. 1993) .. 10

United States v. Safeels, 39 F.3d 833 (9th Cir. 1994) ..... 6

United States v. Stevenson, 68 F.3d 1292 (11th Cir. 1995) .. 10

United States v. Tisdale, 7 F.3d 957 (10th Cir. 1991), cert.

denied 114 S.Ct. 1201 (1994)... 2.00... 6

vi

Table of Authorities (continued)

PAGE

United States v. Willis, 997 F.2d 407 (8th Cir. 1993), cert.

denied, _US.___,114S.Ct. 704, 126 L.Ed.2d 670

CIPS) cvcccenescas enleceuapeenene eee 10

United States v. Wong, 3 F.3d 667 (3d Cir. 1993) ....... 10

STATUTES

ESSE 2 sie: | ee ee rer rR ny eh ype 4

ae UA SERED desea che aes Pea poake rea 2

Federal Sentencing Guideline §1B1.11 ............. 1,11

Federal Sentencing Guideline §2F1.1 (1987) ......... 1,6

Federal Sentencing Guideline §2F11 (1993) ........ 1,7,8

Federal Sentencing Guideline §2F1.1(b)(2)(A) ..... 9, 10, 11

Federal Sentencing Guideline §3B].1B(b) ........ 1,10, 11

United States Constitution, Art.I, §9, cl.3; (ex post facto

ORME 6 o.5 5:0 05 ora coeh ehy 0eeate Dee ]

CITATION TO DECISION IN COURT BELOW

Petitioner’s conviction and sentence was affirmed by the

Eleventh Circuit Court of Appeals, in United States v. Logal,

106 F.3d 1547 (11th Cir.1997).

BASIS FOR JURISDICTION OF THIS COURT

This Petition for Writ of Certiorari follows a judgment of

the Eleventh Circuit Court of Appeals affirming Petitioner’s

conviction and sentence. This Court has jurisdiction to

consider this Petition for Writ of Certiorari pursuant to 28

U.S.C.§1254(1).

The Eleventh Circuit Court of Appeals judgment was

entered on March 6, 1997, Petitioner’s application for rehearing

was denied on June 19, 1997. This Court issued an order on

extending until October 1, 1997 Petitioner’s filing of his

Petition for Writ of Certiorari.

CONSTITUTIONAL PROVISIONS AND

STATUTES INVOLVED IN THE CASE

The Petition for Writ of Certiorari relates to the following

Constitutional Provisions and statutes:

|. United States Constitution, Art. I, §9, cl.3; (ex post facto

clause):

“No Bill of Attainder or ex post facto law shall be passed”.

2. Federal Sentencing Guideline §1B1.11.

3. Federal Sentencing Guideline §2F1.1 (1987).

4. Federal Sentencing Guideline §2F1.1 (1993).

5. Federal Sentencing Guideline §3B1.1B(b).

2

CONCISE STATEMENT OF CASE

Petitioner is currently serving a one hundred and two

month sentence following his conviction for various mail and

security fraud related offenses in the United States District

Court for the Southern District of Florida. Petitioner restricts

this Petition to issues relating to his sentence.

Petitioner had been employed by a Florida Corporation,

Sahlen and Associates, which was involved in various

legitimate security related industries. However, through a

variety of activities, Sahlen, a public company regulated by the

SEC, inflated its worth. The inflated value of Sahlen

influenced its stock trade, as well as its ability to borrow

money.

Although Petitioner was sentenced in 1994, the sentencing

court agreed to utilize the sentencing guidelines in effect in

1989 since those guidelines were clearly more lenient to

Petitioner. Unfortunately, the sentencing court calculated a

sentence identical to the sentence proscribed by the 1993

Sentencing Guidelines which the sentencing court was

precluded from utilizing. Petitioner’s sentence accordingly

increased nearly fifty percent from a range of 51-63 months to

his ultimate sentence of 102 months.

The sentencing court stated that its enhanced sentence was

based upon:

|. the extraordinary amount of the loss and, independently,

2. the sophisticated nature of the offense and the pervasive

role of the defendant.

The 1987 sentencing guidelines set forth an offense level

of “17” for amounts of loss attributed to fraud exceeding five

million dollars. The 1987 sentencing guidelines do not include

3

any higher offense level than the “level 17” relating to loss in

excess of $5 million.

By contrast, the 1993 sentencing guideline sets forth an

offense level of 20 for losses in excess of $5 million. Obvious

calculation reveals a three level increase between the 1987 and

1993 guideline.

In addition to increasing the offense level guideline for

equal amount of loss, the 1993 sentencing guideline also sets

forth offense levels for losses exceeding $5 million. It is clear

that the newly created offense levels are related to and

dependent upon the increased offense levels for lessor amounts

of loss.

Petitioner was found to be responsible for loss in the

' amount of $59 million. The 1987 Guidelines’ highest amount

of loss was “in excess of $5 million”. The 1993 Guidelines

provided for a loss of $59 million. This newly created level

was three levels higher than the offense level for a loss in

excess of $5 million.

However, since the 1993 offense levels had ben set at

higher levels than the 1987 offense levels, a three level increase

from the $5 million dollar offense level resulted in an offense

level of “23”. In contrast, had Petitioner received a three level

increase from the 1987 offense level, his adjusted offense level

would have been “Level 20”.

The sentencing court concluded that it utilized the 1993

Guidelines as “guidance” in determining a higher offense level.

Petitioner submitted that the sentencing court’s use of the 1993

Sentencing Guidelines violated ;the ex post facto clause of the

Constitution. Additionally, Petitioner submitted that even if the

1993 Guidelines could be used for “guidance”, the use

employed by the sentencing court, which included adoption of

4

a three level increase in offense levels, violated the ex post

facto clause.

In addition, Petitioner was calculated to have an offense

level higher than persons whose amount calculation was higher

than Petitioner’s.

Petitioner, who proceeded to trial was calculated to have

an amount of loss of $59 million. Codefendants who entered

plea agreements were found to have losses in excess of the $59

million loss attributed to Petitioner. However, these

codefendants, Davis (loss in excess of $100,000,000) and

Leinwebber (loss in excess of $71 million) did not receive the

six point offense level increase based upon specific offense

characteristics received by Petitioner. No basis existed for this

disparate sentencing treatment received by Petitioner.

Petitioner was also assessed additional points both for his

role in the offense as well as for the sophistication of the

offense. Petitioner challenged the sentencing court’s authority

to “double count” the same activity for two separate offense

enhancements.

1. Basis for Federal Jurisdiction in the Court of First Instance.

Jurisdiction in the United States District Court for the

Southern District of Florida was created pursuant to 18 U.S.C.

§3231 with the return of an indictment alleging offenses against

the laws of the United States.

5

ARGUMENT

I.

THE SENTENCING COURT’S USE OF THE 1993

SENTENCING GUIDELINES TO IMPOSE A

SENTENCE GOVERNED BY 1987 SENTENCING

GUIDELINES, VIOLATES THE EX POST FACTO

PROTECTION OF THE CONSTITUTION

The sentencing court imposed Petitioner’s 102 month

sentence in 1994 by improperly utilizing 1993 sentencing

guidelines. The 1993 sentencing guidelines provided a more

severe penalty than the 1987 sentencing guidelines in effect at

the time the offense was committed. Use of the 1993 more

severe sentencing guidelines violated the ex post facto clause

of the Constitution.

While the federal sentencing guidelines require use of the

guidelines in effect at the time of sentencing, a specific

exception to that requirement arises when the sentence to be

imposed under the guidelines in effect at the time of sentencing

are more severe than the guidelines in effect at the time of the

offense being committed. See Miller v. Florida, 482 U.S. 423

(1987); §IBI.11 U.S.S.G.

The sentencing court recognized that Petitioner’s

guidelines in effect at the time of sentencing were more severe

than the sentencing guidelines in effect at the time of the

offense (1989) and therefore opted to sentence Petitioner

pursuant to the 1987 guidelines.

Unfortunately, the sentencing court’s decision to utilize the

1987 guidelines as opposed to the 1993 guidelines constituted

little more than a legal fiction. The vehicle through which the

fiction was facilitated was the sentencing court’s finding that

the 1987 guidelines did not adequately account for the size of

loss in Petitioner’s case as well as the sophisticated nature of

6

the offense and the pervasive role of the Petitioner in that

offense.

Petitioner does not dispute the finding that application note

ten to the relevant guideline provision §2F1.1 (1987) did allow

the court to upwardly depart for amounts of loss in excess of $5

million. Petitioner, for the purpose of this application, does not

contest that the sentencing court concluded that the amount of

loss was $59 million.

Petitioner does dispute the methodology utilized by the

sentencing court in applying the 1993 guidelines as “guidance”

in determining the amount of enhancement to be applied.

Petitioner would respectfully request that this Court

resolve a split between the Circuits concerning whether

amendments to sentencing guidelines should be utilized as

“guidance” to sentencing courts. See United States v. Canon,

66 F.3d 1073, 1080 (9th Cir. 1995)(disapproving of retroactive

guidance); United States v. Safeels, 39 F.3d 833, 838 (8th Cir.

1994); United States v. Tisdale, 7 F.3d 957, 967-68 (10th Cir.

1991), cert. dénied, 114 S.Ct. 1201 (1994); United States v. Boula,

997 F.2d 263, 267 (7th Cir. 1993); United States v. Rodriguez,

968 F.2d 130 (2d Cir.), cert. denied, 113 S.Ct. 139 (1992);

United States v. Harotunian, 920 F.2d 1040 (ist Cir.

1990)(approving retroactive guidance).

Petitioner respectfully submits that any use of a subsequent

amendment as “guidance” is in reality nothing more than an

unauthorized judicial exception to the ex post facto clause. No

viable test exists to determine whether the subsequent

amendment is being utilized as “guidance” or is in fact being

relied upon as the operative guideline.

Petitioner’s case provides a more compelling example of

why the subsequent guideline amendment should not be relied

upon. The guideline in question, §2F1.] in its 1987 version, did

7

not provide an offense level for amounts of loss substantially

greater than $5 million. It did, however, provide for amounts

of loss greater than $5 million with an offense level of

“seventeen”. In contrast, the 1993 amendment to §2F1.1

provided an offense level of “twenty” for losses in excess of $5

million. In addition, the 1993 amendment provided a three

level offense level increase for amounts of loss in excess of $40

million. Consequently, a person sentenced under the 1993

amendment with a loss amount of $59 million would have an

offense level of twenty-three.

A sentencing court that truly utilized the 1993 amendment

to §2F1.1 to determine an offense level for amounts greatly in

excess of $5 million would observe that the amendment

provided a three level increase in the offense level for the

proscribed level for a $5 million loss. In Petitioner’s case, his

offense level would increase three levels from his 1987 offense

level of twenty to an offense level of twenty-three.

However, if the sentencing court merely adopted the 1993

amendment and rubber stamped to the offense level set forth in

1993 without regard to the fact that the entire offense leve! had

been increased in 1993 from the 1987 levels, the 1993 level

would not be utilized as “guidance” but in fact, be substituted

for the 1987 guideline.

In Petitioner’s case, the sentencing court impermissibly

substituted the 1993 sentencing guideline for the 1987 guideline.

Even should this Court permit subsequent guideline

amendments to be used for “guidance”; the sentencing court in

the instant case traveled far beyond even the most acceptable

level of guidance.

Petitioner respectfully requests that this Court resolve the

split among the circuits and determine that subsequent

increases in offense levels created by Sentencing Guidelines

amendments may not be utilized by sentencing courts as

8

“guidance” in imposing sentences. In the alternative, Petitioner

requests that this Court conclude the subsequent amendments

may only be utilized to determine the quantity of levels

determined to apply for undetermined levels of conduct.

Il.

THE SENTENCING COURT’S DISSIMILAR

APPLICATION OF SIMILAR SPECIFIC

OFFENSE CHARACTERISTICS AMONG

IMPROPER CO-DEFENDANTS CONSTITUTES

DISPARATE SENTENCING

Petitioner’s sentencing was governed by the provisions of

§2F1.1 U.S.S.G. The sentencing guideline section identifies

“specific offense characteristics” which are based upon the

amount of loss suffered by the fraud victim. While the amount

of loss attributed to any particular defendant in a multiple

defendant case may logically differ, similar amounts of loss

should not result in dissimilar specific offense characteristics.

Unfortunately, the sentencing judge implemented among co-

defendants dissimilar offense characteristics which ultimately

resulted in impermissible disparate sentences.

Petitioner’s “amount of loss” was calculated to be in the

amount of $59 million. The sentencing court found an offense

level of twenty-three based upon a specific offense

characteristic of “17”. However, the record in the sentencing

court reveals that despite the fact that at least three co-

defendants had amounts of loss equal to or greater than

Dahod’s, the sentencing court found specific offense

characteristics for those codefendants to be Jess than Dahod’s.

Application note 10 to the 1987 guideline

provided that: The adjustments for loss do not

distinguish frauds involving losses greater than

$5,000,000. Departure above the applicable guideline

9

may be warranted if the loss substantially exceeds

that amount.

(Emphasis added).

The Application Note does not identify the activity of the

defendant as a basis to depart, but rather unequivocally

identifies the amount of loss as the only basis for departure.

Accordingly, it should be axiomatic that codefendants with

similar amounts of loss should not receive dissimilar specific

offense characteristics.

That Petitioner suffered this disparity, to wit: an extra six

levels on the offense level compared to the offense levels of

codefendants is improper and mandates Petitioner’s

resentencing in a manner consistent with that of his co-

defendants.

Petitioner recognizes that a variety of other offense

characteristics or individual roles may influence the ultimate

adjusted offense level. However, no legitimate or acceptable

argument can support dissimilar specific offense characteristics

based upon similar losses.

Petitioner is particularly concerned that the only

discernable difference between himself and his codefendants

who did not receive additional specific offense characteristics

increases was that Petitioner exercised his right to trial.

Allowing disparities which may be based upon the exercise

of Constitutional rights should be unacceptable.

Petitioner requests that this Court determine that

application of the specific offense characteristics of §2F1.1(b)

require that whatever factual finding concerning the amount of

loss is made relating to an individual defendant that the

sentencing court equally apply said offense characteristics.

10

Since Petitioner has been victimized with an offense level

six points higher than codefendants found to have an amount of

loss in excess of that of Petitioner, he requests that his case be

remanded for resentencing in a manner consistent to that of his

co-defendants.

Il.

IMPOSITION OF SENTENCE ENHANCEMENTS

PURSUANT TO BOTH §2FLI(b)(2) AND

§3BLIB(b) U.S.S.G. CONSTITUTES

IMPERMISSIBLE DOUBLE COUNTING

Petitioner’s sentence included cumulative enhancements

based upon two sentencing guideline provisions, §2F1.1(b)(2)

(more than minimal planning) and §3B1.1B(b) (role as manager

or supervisor). These enhancements constitute impermissible

double counting. Petitioner’s objection to said double counting

was improperly overruled.

A clear split exists in the circuits concerning the specific

issue. See Untied States v. Romano, 970 F.2d 164, 167 (6th Cir.

1992) (considerations of lenity and due process forbid the

cumulative application of the two guideline sections in the

absence of a clear statement permitting such use); United States

v. Stevenson, 68 F.3d 1292 (11th Cir. 1995)(double counsng of

the provisions permitted unless specifically prohibited by

sentencing guidelines). Stevenson relied upon the following

decisions from other circuits supporting its conclusion: United

States v. Massey, 48 F.3d 1560, 1570 (10th Cir.), cert. denied,

__US.___, IIS S.Ct. 2628, 132 L.Ed.2d 868 (1995); United

States v. Godfrey, 25 F.3d 263, 264 (Sth Cir.), cert. denied,

__US. __, 115 S.Ct. 429, 130 L.Ed.2d 342 (1994); United

States v. Wong, 3 F.3d 667, 670-72 (3d Cir. 1993); United

States v. Rappaport, 999 F.2d 57, 60-61 (2d Cir. 1993); United

States v. Willis, 997 F.2d 407, 418-19 (8th Cir. 1993), cert.

denied, _US. ___, ll4 S.Ct. 704, 126 L.Ed.2d 670 (1994);

ee ee ee ee

1]

United States v. Kelly, 993 F.2d 702, 704-05 (9th Cir. 1993);

United States v. Curtis, 934 F.2d 553, 556 (Sth Cir. 1991);

United States v. Boula, 932 F.2d 651, 654-55 (7th Cir. 1991).

Petitioner received, without objection, a two level increase

based upon “more than minimal planning” U.S.S.G.

§2F1.1(b)(2)(A). Petitioner received, over objection, a three

level increase for his role as a manager or supervisor of more

than five persons. The sentencing court rejected the

Government’s argument that Petitioner receive a four point

increase as an organizer or leader.

Petitioner submits that the same conduct which formulated

the “more than minimal planning” enhancement was utilized to

designate Petitioner as a “manager or supervisor”. Simply

stated, being a manager or supervisor of five or more persons

necessitates more than minimal planning.

Petitioner respectfully submits that the failure of the 1987

Sentencing Guidelines to specifically allow for the double

counting of §§2F1.1(b)(2) and 3B1.1(b), requires that only one of

the two enhancements be permitted. Respondent requests that

this Court adopt the Romano rationale and conclude that the

absence of guideline authorization precludes double counting

as violative of due process and the rule of lenity in criminal

cases.

Finally, Petitioner recognizes the relative narrow

application of this issue. Effective November |, 1993, the

Application Notes to §1BI.1 U.S.S.G. was amended:

“Absent an instruction to the contrary, the

adjustments from different guideline sections are

applied cumulatively (added together). For example,

the adjustments from §2F1.1(b)(2)(more than minimal

planning) and §3Bl.l(aggravating role) are applied

cumulatively.”.

12

This amendment clarifies the Commission’s intent

that, absent an instruction to the contrary, adjustments

from different guideline sections are to be applied

cumulatively. The effective date of this amendment

is November 1, 1993.

Indeed, the Sixth Circuit refused to follow Romano in

sentencing after November, 1993 which presumably were based

upon 1993 guidelines. United States v. Cableigh, 75 F.3d 242

(6th Cir. 1996).

While Petitioner was sentenced subsequent to the 1993

amendment, it is without question that he was sentenced

pursuant to the 1987 Guidelines. Additionally, although the

language to the Amendment to §1BI.1 is couched in terms of

“clarification”, the effect of the Amendment subjected

Petitioner to a greater sentence than the 1987 guidelines as

interpreted by Romano. Further, given the binding nature of

commentary amendments, see Stinson v. United States, 113

S.Ct. 1913 (1993), application of the Amendment to Petitioner

would violate the ex post facto clause.

Petitioner therefore requests that his case be remanded for

resentencing with instructions that Petitioner not receive the

“double counting” described herein.

13

CONCLUSION

Wherefore, based upon the foregoing authority, Petition

respectfully requests that the Honorable Court accept

jurisdiction over this matter, grant this Petition for Writ of

Certiorari, address the questions presented herein, and reverse

the judgment of the Eleventh Circuit Court of Appeals

affirming Petitioner’s sentence.

Respectfully submitted,

BRUCE A. ZIMET, ESQUIRE

APPENDICES

s

Cg ee, 2

(ct -) m RS

i

APPENDICES

See the record excerpt provided on appeal from the U.S.

District Court for copies of pleadings there.

OPINION OF THE UNITED STATES COURT OF

APPEALS, ELEVENTH CIRCUIT, MARCH 6,

ag a ne ne ee App. A

ORDER OF THE UNITED STATES COURT OF

APPEALS, ELEVENTH CIRCUIT, DENYING

PETTTIONER’S PETITION FOR REHEARING . App. B

EXCERPT FROM TRIAL TRANSCRIPT .... App. C

EXCERPT FROM TRIAL TRANSCRIPT .... App. D

§1B1.11 - USE-OF GUIDELINES MANUAL IN

EFFECT ON DATE OF SENTENCING (Policy

a ae Per Peeper App. E

§2F1.1- FRAUD AND DECEIT ............ App. F

§2F1.1- FRAUD AND DECEIT ............ App. G

§3B1.1- AGGRAVATING ROLE........... App. H

PETITION FOR REHEARING .............. App. I

la

APPENDIX A

UNITED STATES of America,

Plaintiff-Appellee,

V.

Nelson LOGAL, Aarid Dahod, a.k.a. Aarid

Mansur Dahodwala, John Kuczek,

Defendants-Appellants.

No. 94-4748

United States Court of Appeals,

Eleventh Circuit,

March 6, 1997.

Various defendants were convicted of mail and securities

fraud violations, and were ordered to pay restitution, in the

United States District Court for the Southern District of

Florida, No. 93-6014 CR-SM, Stanley Marcus, J. Defendants

appealed. Following one defendant’s death by suicide, counsel

filed “suggestion of death” with Court of Appeals, asking that

appeal be dismissed as moot and case be returned to District

Court with instructions to dismiss indictment. The Court of

Appeals, Dubina, Circuit Judge, held that: (1) as to surviving

defendants, trial court could consider amendments to

Sentencing Guidelines adopted after offenses in question were

completed, in determining suitable degree of upward departure

from Guidelines in effect at time of offenses, and (2) as to

deceased defendant conviction would be vacated, even through

restitution was involved.

Affirmed in part; vacated in part and remanded.

2a

Cohill, Senior District Judge, sitting by designation,

concurred in part and dissented in part and filed opinion.

1. Criminal Law - 1239

Trial court could consider amendments to Sentencing

Guidelines effective after date offense was completed in

determining degree of upward departure from Sentencing

Guidelines applicable to defendant. U.S.S.G. §1B1.1 et seq.,

18 U.S.C.A.

2. Criminal Law - 303.50, 1208.4(2)

Defendant’s conviction would be vacated, following his

death by suicide, even though part of sentence involved

payment of restitution under Victim and Witness Protection

Act; restitution requirement was penal in nature rather than

compensatory and there were civil actions which could prevent

estate of defendant from receiving windfall. 18 U.S.C.A.

§3663.

Appeal from the United States District Court for the

Southern District of Florida.

Before HATCHETT, Chief Judge, DUBINA, Circuit

Judge, and COHILL’ ,Senior District Judge.

DUBINA, Circuit Judge.

“Honorable Maurice b. Cohill, Jr., Senior U.S. District Judge for the

Western District of Pennsylvania, sitting be designation

3a

I. Statement of the Case

1. Factual History.

In 1981, Howard F. Sahlen, Jr. (“Sahlen”) founded a

private investigation and security firm called Sahlen &

Associates, Inc. (“SAI”). Sahlen was chairman and chief

executive officer of the company through April of 1989. In

1984, SAI became a publicly traded company with its

headquarters in Atlanta, Georgia. !

As a publicly traded corporation, SAI was required to file

a registration statement with the Securities and Exchange

Commission (“SEC”) detailing certain information for use by

potential investors. In addition, SAI was required to file

quarterly and annual reports containing financial information

about the corporation’s worth and profit levels. Financial

statements included in SEC filings must be audited, and

between 1985 and 1989 SAI’s annual reports were audited by

the accounting firm of Peat Marwick or its predecessor, Main

Hurdman.

Between 1983 and 1989, SAI’s operation grew from one

office with 10 to 15 employees to about 100 offices with

approximately 12,000 employees, and the company reported a

tremendous increase in revenues. Unfortunately, SAI achieved

this growth by making public stock offerings and obtaining

bank loans through the use of false financial documents. SAI

employees and others -- including Sahlen, Nelson Logal

(“Loga!”), Aarif Dahod (“Dahod”), and John Kuczek

(“Kuczek”) -- used various means to misrepresent SAI’s

financial condition, including check kiting, falsifying revenue

figures in financial statements, and creating false documents to

support the inflated revenue figures. Sahlen, Logal, Dahod,

' The headquarters were later relocated to Deerfield Beach, Florida.

4a

and Kuczek also devised and implemented various schemes to

conceal the fact that they had inflated and fabricated SAI’s

revenue figures.

One of Sahlen’s schemes to inflate revenue figures

involved the generation of false invoices and investigative files

for clients who were closely associated with Sahlen. SAI listed

these accounts, which were never paid, under the heading of

“special accounts”, P.J. Management --whose president,

Logal, was a childhood friend of Sahlen -- enjoyed one of these

“special accounts” with SAI. Kuczek & Associates, an

insurance brokerage company owned by Kuczek, also had a

“special account” during the 1987 fiscal year. Dahod was

actively involved in the generation of false investigative files

to authenticate the invoices, even going so far as to create a

computer program to facilitate the generation of false

documentation on a computer he called “Betsy”.

In order to disguise the financial instability of SAI, Sahlen

devised a check kiting scheme to give the illusion that SAI had

the funds necessary to pay operating expenses. Logal, who was

operating his own business in Ohio called N.H. Logal, assisted

Sahlen in the check kiting scheme by helping to deposit checks

with full knowledge that the checks were backed by insufficient

funds. In another scheme to conceal SAI’s true fiscal status,

SAI reported non-existent revenue in a category called “work

in progress”. 2

The reporting of false revenue escalated substantially with

each quarterly report filed by SAI, ultimately growing to

$7,124,073. The house of cards began to fall when auditors

from Peat Marwick started expressing concern about the large

* “Work in progress” is an accounting device used to to report

anticipated revenues from partially completed work.

5a

amount of aging accounts receivable on SAI’s books. Peat

Marwick told Sahlen that unless SAI began showing significant

collections activities, the accounts receivable figures would

have to be discounted, which would result in the reporting of

much smaller income and revenue figures. To cover up the

false revenue reported as accounts receivable, the defendants

created additional schemes.

By the end of 1988, the amount of false revenue had grown

to millions of dollars,, and most of the uncollected receivables

were fictitious. In late March of 1989, Sahlen learned that the

SEC was investigating SAI’s methods of reporting revenue.

Sahlen also learned that Peat Marwick auditors planned to visit

SAI’s Miami, Florida, and Newark, New Jersey, field offices

to examine files. Upon completion of its investigation, the

SEC sought federal indictments against Sahlen, Logal, Dahod,

and Kuczek.

2. Procedural History.

A federal grand jury in the Southern District of Florida

returned a 29-count superseding indictment charging Logal,

Dahod, and Kuczek, as well as Sahlen, with various violations

of federal law.? All four defendants were charged in count |

with conspiring to defraud the SEC and to commit securities

fraud, bank fraud, and mail fraud, in violation of 18 U.S.C.

§371, and in count 28 with filing a false registration statement

with the SEC on or about March 14, 1989, in violation of 15

U.S.C. §§78m and 78ff(a) and 18 U.S.C. §2. Logal, Dahod, and

Sahlen were also charged with seven counts of securities fraud,

in violation of 15 U.S.C. §§78j(b) and 78ff(a), 17 C.F.R.

§240.10b-5 (Rule 10b-5),and 18 U.S.C. §2 (counts 2-8); eight

> Additional defendants Theordore Leinwebber, Paula Firebaugh, and

Tony Davis pled guilty before the return of the superseding indictment and

testified for the government at trial.

6a

counts of mail fraud, in violation of 18 U.S.C. §§1341 and 2

(counts 9-16); six counts of filing false reports and statements

with the SEC, in violation of 15 U.S.C> §§78m adj 78ffa) and

18 U.S.C> §2 (counts 22-27); and one count of bank fraud, in

violation of 18 U.S>C. §§1344 and 2 (count 29). Logal was

charged with one additional count of dank fraud (count 17), and

Sahlen was charged with five additional counts of bank fraud

(counts 17-21).

Sahlen pled guilty to all counts of the indictment, but

Logal, Dahod and Kuczek proceeded to trial. The district court

granted a motion for judgment of acquittal as to Dahod and

Logal on count 9. The jury found Logal guilty of counts 1-8,

10-16, 22-25, and 29, and not guilty of counts 17 and 26-28.

The jury found Dahod guilty of counts 1-8, 10-16, and 24-29,

and not guilty of counts 22 and 23. The jury found Kuczek

guilty of count 1 and not guilty of count 28.

Logal was sentenced to 60 months imprisonment as to

count | and to 27 months of imprisonment as to the remaining

counts, with the 27-month sentence to run consecutively to the

60-month sentence, for a total of 87 months of imprisonment.

The court also ordered Logal to pay restitution totaling

$59,338,184. Dahod was sentenced to a total of 144 months

imprisonment and ordered to pay restitution inn the amount of

$59,338,184. | Kuczek was sentenced to 37 months

imprisonment and a 3-year term of supervised release and

ordered to pay a fine of $4,000 adj restitution totaling

$21,586,487. Logal and Dahod are currently incarcerated.

Kuczek is not incarcerated, however, because he

committed suicide the day before he was to begin serving his

term of imprisonment. Following Kuczek’s suicide, his

counsel filed a “suggestion of death” with this court and asked

this court to dismiss Kuczek’s appeal as moot, to vacate

Kuczek’s sentence and conviction in toto, and to remana the

7a

case to the district court with instructions to dismiss the

indictment. This court ordered that Kuczek’s motions be

carried with the case and instructed Kuczek’s counsel to

address in his brief the effect of Kuczek’s suicide on the

restitution order imposed by the district court. In response to

a motion for clarification, we specified that only issues relating

to the effect of Kuczek’s death on the restitution order should

be addressed in Kuczek’s appellate brief.‘ In his brief, counsel

for kuczek requests that he be allowed to file a brief presenting

further challenges to the restitution order if this court

determines that it has jurisdiction to entertain the merits of the

appeal.

II. Issues Presented

1. Whether the district court abused its discretion by denying

Logal’s motions for severance from Kuczek.

2. Whether Dahod’s allegations of prosecutorial misconduct

warrant reversal of his and Logal’s convictions.

3. Whether the district court abused its discretion by

admitting challenged evidence.

4. Whether the district court abused its discretion by

declining to give requested jury instructions.

5. Whether the district court abused its discretion in framing

its response to a jury question.

6. Whether the district court properly sentenced Dahod and

Logal.

7. Whether the restitution component of Kuczek’s sentence

survives his death.

* Counsel for Kuczek complied fully with this court’s directives.

8a

8. Whether this court should dismiss Kuczek’s appeal as

moot, vacate his conviction and sentence, and remand this

matter to the district court to dismiss the indictment.

Ill. Standards of Review

Regarding all but the last three issues presented in this

appeal, we conclude that the defendants’ arguments are

meritless. Accordingly, we affirm the defendants’ convictions

without further discussion.’ We also affirm without discussion

all of the sentencing issues raised by Dahod and Logal, save for

their contention that the district court, in imposing their

sentences, violated the Ex Post Facto Clause of the Constitution

by considering amendments to the United States Sentencing

Guidelines (“U.S.S.G.” or “guidelines”) that went into effect

after Dahod and Logal’s crimes had been completed. A

defendant’s claim that his or her sentence was imposed in

violation of the Ex Post Facto Clause presents a question of

law, and we review questions of law de novo. See, e.g., United

States v. Hooshmand, 931 F.2d 725, 727 (11th Cir. 1991). The

remaining issues--viz, whether the restitution component of

Kuczek’s sentence survives hid death, and whether this court

should dismiss the appeal as moot, vacate Kuczek’s conviction

and sentence, and remand to the district court for dismissal of

the indictment—also present questions of law subject to de novo

review. See generally, United States v. Asset, 990 F.2d 208

(Sth Cir. 1993); United States v. Dudley, 739 F.2d 175 (4th Cir.

1984); United States v. Schumann, 861 F.2d 1234 (11th Cir.

1988).

> See 11th Circuit Rule 36-1.

ee ee ee eS ee Ty Se ae ee a ht it I Te PE ee ee, ee ae <<

9a

IV. Discussion

l. Guidelines Issue.

[1] Although Dahod and Logal were sentenced in 1994,

they were sentenced pursuant to the prel989 guidelines,

because their offenses had ended prior to the enactment of the

1989 amendments and because those amendments included

increases int he offense levels for fraud cases. See Miller v.

Florida, 482 U.S. 423, 435-36, 107 S.Ct. 2446, 2454, 96

L.Ed.2d 351 (1987). Both Dahod and logal acknowledge that

the district court imposed sentence on them pursuant to the pre-

1989 version of U.S.S.G. §2F1.1. Nevertheless, they argue that

the district court violated the Ex Post Facto Clause by looking

to the 1989 amendment to §2F1.1 for guidance in determining

the degree of their upward sentencing departures. Because the

court indisputably used the pre-1989 guidelines to sentence

Dahod and Logal, we conclude that no Ex Post Facto Clause

violation occurred. Moreover, we note that six of our sister

circuits have already approved the practice of looking at

guidelines amendments that post-date applicable guidelines for

the purpose of determining the appropriate degrees of upward

sentencing departures. See, United States v. Harotunian, 920

F.2d 1040, 1046 (1st Cir. 1990)(approving use of amended

guideline to guide upward departure); United States v.

Rodriguez, 968 F.2d 130, 140 (2d Cir.) (same) cert. denied, 506

U.S. 847, 113 S.Ct. 140, 121 L.Ed.2d 92 (1992); United States

v. Bachynsky, 949 F.2d 722, 734-35 (5th Cir. 1991) (approving

district court’s consideration of proposed amendments to §2F1.1

in determining level of upward departure), cert. denied, 506

U.S. 850, 113 S.Ct. 150, 121 L.Ed.2d 101 (1992); United States

v. Boula, 997 F.2d 263, 267 (7th Cir. 1993)(approving district

court’s consideration of amended §2F1.1 to fashion upward

departure and rejecting argument that doing so constituted

application of the amended guideline); United States v.

10a

Saffeels, 39 F.3d 833, 838 (8th Cir. 1994)(holding that

“subsequent guidelines can be a useful touchstone in making

the determinations of reasonableness called for in upward

departure cases”); United States v. Tisdale, 7 F.3d 957, 967-68

(10th Cir. 1993)(holding that use of amended guideline to

guide upward departure is permissible so long as the district

court understands that the amended guideline provision is not

controlling), cert denied, 510 U.S. 1169, 114 S.Ct. 1201, 127

L.Ed.2d 549 (1994). But see United States v. Canon, 66 F.3d

1073, 1080 (9th Cir. 1995)(holding that district court erred in

referring to amended guideline to determine reasonable amount

of upward departure). We choose to adopt the majority view

of our sister circuits. Accordingly, we affirm Dahod and

logal’s sentences.

2. Restitution.

[2] Counsel for Kuczek asserts that the restitution order

entered by the district court cannot survive Kuczek’s suicide.

Kuczek was sentenced to serve a 37 month term of

imprisonment and a 3-year term of supervised release.

Additionally, Kuczek was ordered to pay a fine of $4,000 and

restitution totaling $21,586,487, pursuant to the Victim and

Witness Protection Act (“VWPA”), 18 U.S.C. §3663. Kuczek

filed a notice of appeal, but the day before he was to begin

serving his sentence of incarceration, he committed suicide.

Kuczek’s appellate attorney argues that his client’s death

rendered the entire conviction and sentence, including the

restitution order, void ab initio, and that the restitution order is

therefore without effect.

This circuit has adopted the general rule that the death of

a defendant during the pendency of his direct appeal renders his

conviction and sentence void ab initio, i.e., it is as if the

defendant had never been indicted and convicted. See, United

lla

States v. Pauline, 625 F.2d 684, 685 (Sth Cir. 1980);° United

States v. Schumann, 861 F.2d 1234, 1236 (11th Cir. 1988).

However, two of our sister circuits have recognized an

exception to the general rule of abatement ab initio in cases in

which a criminal sentence includes an order that the defendant

pay restitution to the victims of his crimes. See United States

v. Dudley, 739 F.2d 175, 177 (4th Cir. 1984); United States v.

Asset, 990 F.2d 208 (Sth Cir. 1993). In Dudley, the Fourth

Circuit premised its holding on the assumption that a restitution

order is compensatory in nature. That assumption is Clearly at

odds with out holding in United States v. Johnson, 983 F.2d

216, 220 (11th Cir. 1993), that “though restitution resembles a

judgment ‘for the benefit of’ a victim, it is penal, rather than

compensatory.” Furthermore, any implication that restitution

resembles a civil judgment is undermined in this court’s

opinion in United States v. Satterfield, 743 F.2d 827, 836 (11th

Cir. 1984) cert. denied, 471 U.S. 1117, 105 S.Ct.. 2362, 86

L.Ed.2d 262 (1985).

The Fifth Circuit’s opinion in United States v. Asset, 990

F.2d 208 (Sth Cir. 1993), is also distinguishable. Asset held

only that an abatement did not disturb a voluntary restitution

payment made prior to the defendant’s death. Jd. at 214. This

holding is in accordance with our decision in Schumann where

we amended Pauline to hold that only fines not yet collected at

the time of death are abated. Schumann, 861 F.2d at 1236.

If we were to allow the restitution order to survive Kuczek,

a statutory problem would also arise. Title 18 U.S.C.

§3663(a)(1) states that before the court can impose a restitution

order, a defendant must first be convicted of a crime. Under

* In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981)

(en banc), this court adopted as binding precedent all decisions of the

former Fifth Circuit handed down prior to October 1, 1981.

12a

the doctrine of abatement ab initio, however, the defendant

“stands as if he never had never been indicted or convicted.”

Schumann, 861 F.2d at 1237. The absence of a conviction

precludes imposition of the restitution order against Kuczek or

his estate pursuant to §3663.

Moreover, a fundamental principle of our jurisprudence

from which the abatement principle is derived is that a criminal

conviction is not final until resolution of the defendant’s appeal

as a matter of right. See Griffin v. Illinois, 351 U.S. 12, 18, 76

S.Ct. 585, 590, 100 L.Ed. 891 (1956). AS the Seventh Circuit

has stated, “when an appeal has been taken from a criminal

conviction to the court of appeals and death has deprived the

accused of his right to our decision, the interests of justice

ordinarily require that he not stand convicted without resolution

of the merits of his appeal. . . .” United States v. Moehlenkamp,

557 F.2d 126, 128 (7th Cir. 1977). In the present case, Kuczek

appealed both the conviction and the restitution order with the

expectation that his appeal would result in a reversal. To

uphold the restitution order against Kuczek, who has been

denied the opportunity to properly contest his conviction,

violates the finality principle.

Concerning the argument that the heirs of Kuczek’s estate

may receive a windfall, nothing precludes the victims from

bringing a separate civil action to prevent any improper benefit

to Kuczek’s estate. Accordingly, we grant Kuczek’s motion

requesting that we vacate his conviction adj sentence, remand

the case to the district court, and instruct the district court to

dismiss the indictment.

AFFIRMED in part, VACATED in part, and

REMANDED for further proceedings consistent with this

opinion.

Fn ee et ae

SRT sae) te ASP Re eal as gt i SD be ere PROT,

13a

COHILL, Senior District Judge, concurring in part and

dissenting in part.

I respectfully dissent from that portion of the opinion in

which a majority of the panel holds that Mr. Kuczek’s death by

suicide, before his appeal was decided, necessitates the

abatement of the restitution order. While United States v.

Moehlenkamp, 557 F.2d 126, 128 (7th Cir. 1977), states that a

conviction can not stand where “death has deprived the accused

of his right to appeal our decision,” in this case the accused

deprived himself of that right by his own hand. This situation

is more analogous to the scenario in which the appellant in a

criminal case becomes a fugitive; in such a case, his appeal is

lost. Molinaro v. New Jersey, 396 U.S. 365, 365-366, 90 S.Ct.

498, 498-499, 24 L.Ed.2d 586 (1970). I believe that a narrow

exception should be carved out of the general abatement rule

where an appellant takes his own life.

I join in the opinion in all other respects.

l4a

APPENDIX B

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

No. 94-4748

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

versus

NELSON LOGAL; AARIF DAHOD,a.k.a. Aarid Mansur

Dahodwala; JOHN KUCZEK,

Defendants-Appellants.

On Appeal from the United States District

Court for the

Southern District of Florida

ON PETITION FOR REHEARING

BEFORE: HATCHETT, Chief Judge, DUBINA, Circuit Judge,

and COHILL’, Senior District Judge.

PER CURIAM:

The petition for rehearing filed by the Appellant, Aarif

Dahod is denied.

“Honorable Maurice B. Cohill, Jr., Senior U.S. District Judge for the

Western District of Pennsylvania, sitting be designation

lSa

The petition for rehearing filed by the Appellee, United

States of America is denied.

ENTERED FOR THE COURT:

UNITED STATES CIRCUIT JUDGE

l6a

APPENDIX C

THE COURT: If you and your client would approach the

podium.

As I said earlier, this Court has had the opportunity to

think a great deal about the case. I presided over the trial that

lasted from November well into February. We had extensive

hearings as to the nature and extent of the loss, sentencing

hearings a couple of weeks ago, and continued it to today.

After considering the statements by all of the parties,

having reviewed the presentence investigative report, and based

upon the large amount of the loss involved, extraordinary

amount of loss involved in this case, and, indeed,

independently based upon the sophisticated nature of the

offense and the pervasive role the defendant played in that

regard, I believe that a sentence that departs above the

applicable guidelines range is appropriate in this case.

The defendant argues first that no departure is appropriate.

Second, that if a departure is appropriate and to the extent

that it’s calculated or grounded in the loss, that it ought to be a

three-level increase.

I do not share that view.

The loss chart for a 2F 1.1 for fraud and deceit calculated

at a loss in excess of $5,000,000 is meriting an ll-point increase

int he defendant’s offense level.

The defendant argues that a 14-point increase at most is

appropriate calculating the loss between $5,000,000 and

$10,000,000, therefore meriting the 14-point increase. This 3-

point difference contained in the $5,000,000 fraud level should

be taken out of the Court’s calculus of Dahod’s offense level

the defendant contends because otherwise it would constitute

EEE ae

17a

impermissible retroactive application of harsh or subsequent

guideline provisions.

I do not agree. I begin by observing that application note

10 of the 1987 Guidelines specifically says the Court can

depart upward for amounts of loss greatly in excess of

$5,000,000 even if the subsequent guidelines did not offer

additional guidance. And they do offer guidance to the Court

as to the amount to increase the offense level for a $59,000,000

loss. We would clearly depart the six levels based upon this

Court’s specific finding as to the amount and extent, the

seriousness of the loss. I made specific findings as to Sahlen,

Logal, and now Dahod as to the nature and extent of the loss

and the fraud, and it fully justifies a six-level upward departure

in this case based simply on loss.

I have taken into account all of the factors that the parties

have asked me to look at, but I believe that a six-level departure

based upon loss alone is altogether warranted in this case. We

are talking here about a loss that I have calculated at

$59,338,184. It is greatly beyond the $5,000,000 figure, which

is the top of the figure used in the loss chart for the 1987

Guidelines.

An altogether independent basis for upward departure here

would be the sophisticated nature of the offense and the

pervasive role that the defendant played in this scheme, and I

think it is fair and accurate to describe his role as being

pervasive and to define the scheme as being extraordinarily

sophisticated in nature.

If the defendant had been sentenced under the 1993

Guideline manual, 17 levels would have been added to the base

offense level because the loss was, as this Court has found, at

least $59,000,000.

18a

AS I said, I think there are two wholly independent bases

for an upward departure, either of which would be more than

sufficient to satisfy me. I think they are both evidence in this

case. First is the extraordinarily large amount of loss here,

$59,000,000, adj second is, as I said, the extraordinarily

sophisticated nature of the offense and the defendant’s

pervasive role in the offense.

If, indeed, this Court were to look at the 1993 Guideline

manual for guidance -- and I underscore it is for guidance -- 17

levels would have been added to the base offense level because

the loss was at least $59,000,000. That would have resulted in

a total offense level of 30, which would have a guideline

imprisonment range of 97 to 121 months.

I look to that for guidance, as I said. I will impose a

sentence within, but at the lower end, although not at the

bottom of that range.

Furthermore, it is the finding of the Court that the

defendant is not able to pay a fine. Accordingly, none shall be

imposed. The defendant does, however, have a compelling

responsibility to pay restitution to the victims of the offense

and will be required to do so.

Pursuant to the Sentencing Reform Act of 1984, it is the

judgment of the Court that the defendant, Aarif Dahod, is

hereby committed to the custody of the Bureau of Prisons to be

imprisoned for a term of 102 months. That breaks down as

follows: This term consists of 60 months on each of counts 1

through 8, counts 10 through 16 and counts 24 through 28, each

to be served concurrently with the other.

Additionally, this term consists of 42 months on count 29

to be served consecutively to the terms imposed on counts 1

through 8, 10 through 16 and 24 through 28.

19a

It is further ordered and adjudged that the defendant shall

pay restitution in the amount of $59,338,184 jointly and

severally with all of the other co-defendants. No further

payment shall be required after the sum of the amounts paid by

all of the defendants has fully covered the financial loss

sustained by the victims.

Upon release from imprisonment the defendant shall be

placed on supervised release for a term of three years. While

on supervised release the defendant shall not commit another

Federal, state or local crime and shall comply fully with the

standard conditions adopted by the Court.

The defendant shall be required, as well, to provide full

financial disclosure to the probation officer as requested. The

defendant shall not be employed in the securities or

investigative field if this employment involves his preparing

billing statements or time and expense logs for customers. The

defendant shall make full disclosure of the instant offense to

any subsequent employer.

It is further ordered and adjudged that the defendant shall

pay to the United States a special assessment in the amount of

$1,050.

Now that sentence has been imposed, counsel, does

counsel or the defendant have any objection to any finding of

fact, conclusion of law or manner by which sentence waas

pronounced?

Mr. Zimet.

(Trial Transcript 49-54).

20a

APPENDIX D

THE COURT: Let me give you my thought on that.

Essentially what the defendant is arguing here is that by

sentencing him under both 2F1.1(b)(2) for more than minimal

planning and 3B1.1, adjustment for role for being an organizer,

leader, manager or supervisor, amounts to impermissible

double counting and, therefore, is proscribed.

The support for the Dahod position is found in United

States versus Romano, a Sixth Circuit case cited by Mr. Zimet

at 970 F.2d 164, Sixth Circuit, 1992.

As best I can tell, the Eleventh Circuit has not yet squarely

ruled on precisely this issue. Every other circuit that has ruled

on it, however, has rejected the position taken in Romano, and,

indeed, even the Sixth Circuit has cut back on the position to

some extent there.

I cite to you United States versus Curtis, a Fourth Circuit

case, 934 F.2d 553, Fourth Circuit, 1991; United States versus

Godfrey, brand new opinion out of the Fifth Circuit -- it’s not

reported yet in F.3d -- it’s 1994 WL-279830. that’s in the

Westlaw, Fifth Circuit, June the 24th, 1994, an opinion

rendered by Judge Wisdom. The third would be an Eighth

Circuit case, U.S. v. Willis, 997 F.2d 407 at 418 and 419

decided in 1993.

The three Courts that I have cited have directly disagreed

with the contention that sentencing a defendant pursuant to the

two sentencing provisions constitutes double counting.

The logic behind the position that these circuits have taken

is essentially those two provisions constitute distinct

conceptual bases for sentencing the defendant. 2F1.1(b)(2)

increases the punishment whether defendant’s crime evidenced

planning and forethought. 3B1.1 recognizes the additional

2la

culpability that a defendant should bear for being a leader or

organizer of a criminal activity that may involve five or more

participants.

Accordingly, if the crime has its base offense level

increased for more than minimal planning, it may be enhanced

as well.

Again, if the defendant, in addition, is one who organized

or led the planning of the offense.

The Eleventh Circuit has not ruled upon this specific issue.

At lease I don’t think it has. It has repeatedly held that what

would otherwise be considered double counting is permissible

if the Sentencing Commission intended the result and if the

result is permissible, because each section concerns

conceptually separate notions relating to sentencing.

That’s the language that comes out of the Eleventh Circuit

in U.S. versus Adeleke, A-d-e-l-e-k-e, 968 F.2d 1159 at 1161.

That’s an Eleventh Circuit case decided in 1992.

Quoting an earlier Eleventh Circuit case, U.S. versus

Aimufua, 935 F.2d 199 at 1201, Eleventh Circuit, 1991.

It appears to me that based upon the more than convincing

reasons in the opinions of the Willis court, the Curtis court and

the court in Godfrey that these are two provisions here that

involve conceptually distinct bases, and so the contention to

follow Romano is rejected.

I might add that courts have distinguished Romano from

their cases on the basis that Romano only dealt with one-half

of the 2F1.1(b)(2), the more than minimal planning aspect of

that provision. Romano did not address the more than one

victim portion of the provision.

22a

Indeed, the Fifth Circuit in Godfrey relied on this rationale

as an alternative basis for allowing sentencing under both

2F1.1(6)(2) and 3B1.1 in addition to saying flatly that it

directly disagreed with the Romano court.

Indeed, I think it’s also worth noting that the Sixth Circuit,

the circuit that produced Romano, has relied on this ground for

permitting sentencing under both 2F1.1(b)(2) and 3B1.1. See

United States versus Aideyan, A-i-d-e-y-a-b, Il F.2d 74 at 76,

Sixth Circuit, 1993.

Therefore, I think it’s probably accurate to say that no

circuit, including the Sixth, has taken the position that the

District Court cannot sentence under the two provisions if the

more than one victim portion of 2F1.1(b)(2) is the stated basis

for the upward departure.

In all events, I think that it does not amount to

impermissible double counting. I think the Probation

Department got it right, and that there can be an adjustment for

orle in the offense under 3B1.1 at the same time that there is an

adjustment for more than minimal planning. So the contention

is rejected. At least those are my reasons for rejecting it.

Having said that, we still have a question as to beyond the

legal proposition of whether or not one can be adjusted upward

on both grounds, whether it’s appropriate here. So why don’t

you go right to that issue.

(Trial Transcript, 8-12).

23a

APPENDIX E

§1B1.11. 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.

The court shall not apply, for example, one

guideline section from one edition of the

Guidelines Manual and another guideline

section from a different edition of the

Guidelines Manual. However, if a court

applies an earlier edition of the Guidelines

Manual, the court shall consider subsequent

amendments, to the extent that such

amendments are clarifying rather than

substantive changes.

24a

APPENDIX F

§2F1.1 Fraud and Deceit

(a) Base Offense Level: 6

(b) Specific Offense Characteristics

(1) If the loss exceeded $2,000, increase the offense level

as follows:

Loss Increase in Level

(A) 2,000 or less no increase

(B) $2,001-$5,000 add 1

(C) $5,001-$10,000 add 2

(D) $10,001-$20,000 add 3

(E) $20,001-$50,000 add 4

(F) $50,001-$100,000 add 5

(G) $100,001-$200,000 add 6

(H) $200,001-$500,000 add 7

(I) $500,001-$1,000,000 add 8

(J) $1,000,001-$2,000,000 add 9

(K) $2,000,001-$5,000,000 add 10

(L) over $5,000,000 add 11

(2) If the offense involved (A) more than minimal planning;

(B) a scheme to defraud more than one victim; (C) a

misrepresentation that the defendant was acting on behalf

of a charitable, educational, religious or political

organization, or a government agency; or (D) violation of

any judicial or administrative order, injunction, decree or

process; increase by 2 levels, but if the result is less than

level 10, increase to level 10.

(3) Ifthe offense involved the use of foreign bank accounts or

transactions to conceal the true nature or extent of the

fraudulent conduct, and the offense level as determined

above is less than level 12, increase to level 12.

25a

APPENDIX G

§2F1.1 Fraud and Deceit

(a) Base Offense Level: 6

(b) Specific Offense Characteristics

(1) If the loss exceeded $2,000, increase the offense level

as follows:

Loss (Apply the Greatest) Increase in Level

(A) 2,000 or less no increase

(B) More than $2,000 add |

(C) More than $5,000 ; add 2

(D) More than $10,000 add 3

(E) More than $20,000 add 4

(F) More than $40,000 add 5

(G) More than $70,000 add 6

(H) More than $120,000 add 7

(I) More than $200,000 add 8

(J) More than $350,000 add 9

(K) More than $500,000 add 10

(L) More than $800,000 add 1]

(M) More than $1,500,000 add 12

(N) More than $2,500,000 add 13

(O) More than $5,000,000 add 14

(P) More than $10,000,000 add 15

(Q) More than $20,000,000 add 16

(R) More than $40,000,000 add 17

(S) More than $80,000,000 add 18.

(2) If the offense involved (A) more than minimal planning;

(B) a scheme to defraud more than one victim, increase by

2 levels.

(3)

(4)

(5)

(6)

26a

If the offense involved (A) a misrepresentation that the

defendant was acting on behalf of a charitable,

educational, religious or political organization, or a

government agency, or (B) violation of any judicial or

administrative order, injunction, decree or process,

increase by 2 levels. If the resulting offense level is less

than level 10, increase to level 10.

If the offense involved the conscious or reckless risk of

serious bodily injury, increase by 2 levels. If the resulting

level is less than level 13, increase to level 13.

If the offense involved the use of foreign bank accounts or

transactions to conceal the true nature or extent of the

fraudulent conduct, and the offense level as determined

above is less than level 12, increase to level 12.

If the offense --

(A) substantially jeopardized the safety of soundness of a

financial institution; or

(B) affected a financial institution and the defendant

derived more than $1,000,000 in gross receipts from

the offense, increase by 4 levels. If the resulting

offense level is less than level 24, increase to level 24.

27a

APPENDIX H

§3B1.1 Aggravating Role

Based on the defendant’s role in the offense, increase the

offense level as follows:

(a)

(b)

(c)

If the defendant was an organizer or leader of a

criminal activity that involved five or more

participants or was otherwise extensive, incrase by 4

levels;

If the defendant was a manager or supervisor (but not

an organizer or leader) and the criminal activity

involved five or more participants or was otherwise

extensive, increase by 3 levels.

If the defendant was an organizer, leader, manager, or

Supervisor in any criminal activity other than

described in (a) or (b), increase by 2 levels.

28a

APPENDIX I

UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

CASE NO. 94-4748

UNITED STATES OF AMERICA,

Appellee,

V.

AARIF DAHOD,

Appellant.

PETITION FOR REHEARING

Appellant AARIF DAHOD, through undersigned counsel,

pursuant to Rule 40, Fed.R.App.P., petitions this Court for

rehearing of the Court’s March 6, 1997 decision affirming

Dahod’s conviction and sentence.

I.

INTRODUCTION

Following oral argument, this Court, on March 6, 1997,

issued its’ opinion affirming Dahod’s conviction and sentence.

The Court likewise affirmed the conviction and sentence of co-

defendant Logal while reversing the restitution order relating

to deceased co-defendant Kuczek.

Dahod’s Petition for Rehearing exclusively relates to

sentencing issues raised concerning Dahod’s one hundred-two

month sentence. Dahod’s Petition for Rehearing focuses upon

two primary issues, to wit: the disparate application of Federal

Sentencing Guidelines between Dahod and co-defendants; and,

the sentencing court’s violation of the Ex Post Facto clause of

29a

the Constitution through application and use of more severe

guidelines implemented after Dahod’s alleged criminal activity

had been completed.

Dahod submits that the sentencing court, in determining an

offense level pursuant to §2F 1.1 of the Sentencing Guidelines,

was first required to determine an amount of loss and then

determine, based upon that amount of loss, which the offense

level applied to a defendant. Once that offense level was

determined, the sentencing court could make adjustments as set

forth in Chapter Three of the Sentencing Guidelines, as well as

for other special offense characteristics. See §1B1.1

(Application Guidelines).

The offense level for §2F1.1 offenses is based upon the

amount of loss suffered by the victim. It is therefore axiomatic

that in determining the appropriate offense level defendants

with the same “amount of loss” will have the same offense level

(prior to consideration of any other special offense

characteristics or Chapter Three adjustments). Not only was

Dahod’s (pre-adjustment) offense level not the same as co-

defendants, with the same or similar amounts of loss, but more

tragically, Dahod’s offense level was higher than co-defendants

with a higher amount of loss! The disparate application of the

§2F1.1 offense levels between co-defendants should benefit

from the close scrutiny of this Court. Dahod submits that the

obvious disparity contradicts the intent of the Sentencing

Guidelines and this Court’s restriction against disparity of

sentences. Rehearing would allow an unambiguous infirmity

to be cured.

Dahod also submits that close scrutiny of this Court is

required to review the sentencing court’s actual application of

amended sentencing guidelines (§2F1.1) which provided a

more harsh sentence to Dahod. Although this Court concluded

in its’ March 6, 1997 opinion to follow other circuits which

30a

have found the use of subsequent guidelines not to violate ex

post facto provision of the Constitution, Dahod submits that the

actual application of subsequent guidelines in Dahod’s case far

exceeded the methodology and use found to satisfy ex post

facto concerns.

Accordingly, when the actual use of the subsequent

guidelines are reviewed, that application constitutes a violation

of the Ex Post Facto clause.

II.

THE SENTENCING COURT'S IMPLEMENTATION

OF THE SENTENCING GUIDELINES WAS

IMPROPERLY DISPARATE BETWEEN CO-DEFENDANTS

Dahod submits that one of the most significant sentencing

errors related to the unambiguous disparity in the sentence

calculations between co-defendants. The court in its’ March 6,

1997 opinion did not specifically discuss this issue, however,

Dahod submits that the sentencing court’s error should be

addressed. In order to facilitate this Court’s review, Dahod will

attempt to narrow and focus the legal issue.

Section 2F1.1 of the Sentencing Guidelines clearly

requires that a sentencing court first make a factual finding

concerning the “amount of loss” from the fraud. A sentencing

court, based upon the amount of loss, then determines which

offense level should be applied. Subsequent to that

determination, other adjustments based upon special offense

characteristics and Chapter Three of the Sentencing Guidelines

matters may be made.

It is axiomatic that calculation of co-defendants offense

levels in the same fraud should result in the same adjusted

offense level if the amount of loss is determined to be the same

as the co-defendants amount of loss (prior to the

3la

aforementioned adjustments). Unfortunately, Dahod’s sentence

was constructed with an offense level higher than the offense

level of co-defendants who had been found to have either the

same or in certain cases larger “amounts of loss” than Dahod!

Dahod submits that the Sentencing Guidelines preclude the

sentencing court from arriving at and implementing disparate

application of “fraud” offense levels where the “amount of the

loss” is the same. Simply stated, where the amount of loss in

a fraud case is the same, the offense level based upon that loss

must be the same. Unfortunately, the trial court failed to

similarly apple the offense levels.

Dahod has fully set forth the scope of the disparity

between the particular co-defendants in his briefs to this Court.

Dahod submits that the disparity application in fact is precisely

the type of improper guideline application previously cited by

this Court. See United States v. Alpert, 989 F.2d 454, 459

(11th Cir. 1992); United States v. Chotas, 968 F.2d 1193 (11th

Cir. 1992).

Ii.

THE TRIAL COURT’S SENTENCE

VIOLATED THE EX POST FACTO CLAUSE

The Court’s opinion specifically discussed whether the

trial court’s use of sentencing guidelines not in existence at the

time of the offense which provided a more severe punishment

than the guidelines in affect at the time of the offense, violated

the ex post facto clause of the Constitution. The Court’s

opinion correctly cited the split among the circuits which have

previously addressed the ex post facto issue. The Court

rejected the rationale of the Ninth Circuit as set forth in United

States v. Canon, 66 F.3d 1073, 1081 (9th Cir. 1995), that a

sentence based upon a sentencing guideline provision adopted

32a

after the date of the crime which increased a defendant’s

punishment violated the ex post facto clause.

The “words and intent” of the Ex Post Facto Clause

encompass “[e] very law that changes the punishment,

and inflicts a greater punishment than the law annexed

to the crime when committed.” Calder v. Bull, 3 U.S.

(3 Dall) 386, 390, 1 L.Ed. 648 (1798)(opinion of

Chase, J.).

United States v. Canon, 66 F.3d at 1081.

Dahod obviously submits that the Canon (Ninth Circuit)

analysis should be relied upon in this case of apparent first

impression in this circuit. Nevertheless, the Court’s opinion

rejected Canon and instead relied upon a body of other cases

from other judicial circuits which permitted the “use” of

subsequent, more severe sentencing guidelines so long as the

new guidelines were “used” as a “benchmark” or “analogue”.

Unfortunately, no guideline has been provided to the

sentencing court or to a reviewing appellate court to identify

the difference between directly applying a new, more severe

guideline provision and merely utilizing the provision as a

yardstick, benchmark or analogy.

Although a sentencing court may state that a new, more

severe sentencing guideline is only being used as a “yardstick”

or a “benchmark”, that label is practically and functionally a

fiction when the sentencing imposed is precisely the sentence

that would be imposed had the “yardstick” guideline been in

effect.

Dahod’s sentence provides a graphic illustration of

mislabelling actual application of new, more severe sentencing

guidelines as “benchmark” or “analogue”.

33a

The relevant sentencing guideline §2F1.1 provides for a

base offense level of “6” with specific offense level increases

based upon “amount of loss”. The maximum amount of loss

provided by §2F1.1 is in “excess of five million dollars”, which

allows an eleven offense level increase.

Thus, an individual sentenced pursuant to these sentencing

guidelines should receive an adjusted offense level of seventeen

(base offense six plus specific offense eleven level increase).

A sentencing court, pursuant to “Commentary 10” to §2F1.1,

could depart above the eleven point specific offense level

increase if the loss substantially exceeded the $5 million loss.

The new sentencing guidelines provide for specific offense

levels increases for losses in excess of $5 million. Specifically,

the new guidelines provide three additional levels above the

five million dollar offense level for loss that include the $59

million amount assigned to Dahod.

Accordingly, if the new sentencing guideline would

actually be used as an analogue, the sentencing court would add

three levels to the existing adjusted offense level establishing

an adjusted offense level of twenty, (base offense level of six,

plus three level increase analogous to the three level increase

above the $5 million level).

However, instead of utilizing the new sentencing guideline

as an analogue, the sentencing court looked to what a $59

million loss would be with the amended §2F1.1. The

sentencing court then applied that level which was a seventeen

specific offense level increase and determined an amended

offense level of “23”.

The root of the sentencing court’s error was failing to

recognize that the amended sentencing guideline increased the

offense level for all losses above $100,000. Therefore, instead

of recognizing increases in the existing guidelines which,

34a

because of the Ex Post Facto clause, should have been

discounted, the trial court sentenced Dahod directly based upon

those increases. Comparison of §2F1.1 in the applicable and

amended guideline reveal the three level disparity.

EXISTING AMENDED

GUIDLINE GUIDELINE

LEVEL LEVEL

LOSS INCREASE INCREASE

(L) Over $5,000,00 Addil Add 14

Actually utilizing the amended sentencing guideline as an

analogue would result in Dahod’s offense level being a level

“20” instead of the level “23” determined by the court. The

level “23” reflects a direct application of the new sentencing

guideline and a violation of the Ex Post Facto clause of the

Constitution.

WHEREFORE, Appellant Dahod requests that his Petition

for Rehearing be granted.

Respectfully submitted,

BRUCE A. ZIMET, P.A.

Attorney for Appellant Dahod

One Financial Plaza, #2612

Ft. Lauderdale, FL 33394

Ft. Lauderdale: 954-764-7081)

(Miami: 305-948-3648)

BRUCE A. ZIMET, ESQUIRE

Florida Bar #225053

35a

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that true and correct copies of the

forgoing have been mailed this 26th day of March, 1997 to

Anne Schultz, Esquire, Assistant United States Attorneys, 99

N.E. Fourth Street, Miami, Florida 33132, Clark D. Mervis,

Esquire, Attorney for Appellant Logal, 2937 S.W. 27th

Avenue, Suite 202, Miami, Florida 33133 and Roy Black,

Esquire, Attorney for Appellant John Kuczek, 201 South

Biscayne Boulevard, Suite 1300, Miami, Florida 33131.

BRUCE A. ZIMET, ESQUIRE