United States v. Strange ( 2023 )

21-2923-cr
U.S. v. Strange
In the
United States Court of Appeals
FOR THE SECOND CIRCUIT
AUGUST TERM 2022
No. 21-2923
UNITED STATES OF AMERICA,
Appellee,
v.
STEVEN KENT STRANGE,
Defendant-Appellant.
On Appeal from the United States District Court
for the District of Connecticut
SUBMITTED: MARCH 6, 2023
DECIDED: APRIL 17, 2023
Before: POOLER, WESLEY, and MENASHI, Circuit Judges.
Defendant-Appellant Steven Kent Strange appeals the
judgment of the United States District Court for the District of
Connecticut (Shea, J.) sentencing him to 57 months’ imprisonment
following his plea of guilty to one count of wire fraud in violation of
18 U.S.C. § 1343. Strange argues that the district court incorrectly
applied a two-level obstruction enhancement and improperly denied
him a three-level sentence reduction. We disagree and affirm the
judgment of the district court.
___________
James Matthew Branden, Law Office of James M.
Branden, Staten Island, NY.
Christopher Schmeisser, Robert S. Ruff, Assistant United
States Attorneys, for Vanessa Roberts Avery, United
States Attorney for the District of Connecticut, New
Haven, CT.
___________
MENASHI, Circuit Judge:
Defendant-Appellant Steven Kent Strange appeals the
judgment of the United States District Court for the District of
Connecticut (Shea, J.) sentencing him to 57 months’ imprisonment
following his plea of guilty to one count of wire fraud in violation of
18 U.S.C. § 1343. Strange argues that the district court incorrectly
applied a two-level obstruction enhancement and improperly denied
him a three-level sentence reduction. We disagree and affirm the
judgment of the district court.
BACKGROUND
Strange was employed at Collins Aerospace in Wilson, North
Carolina, as a senior supervisor in the Fire Extinguisher Division from
2014 to 2019. Collins Aerospace is a business unit of United
Technologies Corporation (“UTC”), a company headquartered in
Farmington, Connecticut.
While Strange was employed there, UTC encouraged its
employees to make charitable donations through its matching
program and would match up to $25,000 in donations per employee
annually. From 2015 to 2019, Strange carried out a scheme to defraud
UTC in which he fabricated invoices that he submitted to the
matching program. Strange submitted fake documentation
2
purporting to show that he, as well as some of his coworkers, had
made significant charitable donations to an entity that Strange himself
controlled. His coworkers had no knowledge of the submissions. In
total, Strange received approximately $600,000 from the matching
program and used those funds for personal expenses.
Strange was arrested in September 2019. His guilty plea was
accepted in September 2020, and the presentence investigation
concluded in October 2020. Shortly thereafter, the parties filed
sentencing memoranda. The government’s memorandum proposed a
within-Guidelines sentence of 33 to 41 months’ incarceration. Strange
proposed a sentence significantly below the Guidelines range.
The sentencing was continued for months due to scheduling
difficulties related to the Covid-19 pandemic. After the sentencing
was scheduled for August 2021, the Probation Office updated the
presentence report in early August. Just a few days prior to the
sentencing, Strange filed a supplemental sentencing memorandum
and related documents. Strange submitted three letters, each
encouraging the imposition of a probationary sentence rather than
imprisonment. The “Kornegy Letter,” purportedly authored by
Strange’s employer William Kornegy, claimed that Kornegy’s
company could not survive without Strange’s skills and that many
would lose their jobs as a result of Strange’s absence. The “Bala
Letter,” purportedly written by Strange’s physician Dr. Robert Bala,
recounted Strange’s medical ailments and explained that his
condition would deteriorate without constant care. The “Ellington
Letter,” purportedly from Strange’s friend Thomas Ellington, detailed
the ways in which Strange had aided Ellington and his wife in a time
of need to show that Strange merited clemency.
By October 2021, the government had investigated the letters
and established that all three were fraudulent. Strange had drafted
the letters without the knowledge or approval of the purported
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authors. In light of this discovery, the government indicated in a joint
status report that it would seek a two-level enhancement for
obstruction of justice under U.S.S.G. § 3C1.1 and oppose a three-level
reduction for acceptance of responsibility under U.S.S.G. § 3E1.1.
Strange’s sentencing took place on November 19, 2021. As
recommended by the Probation Office, the district court applied the
obstruction of justice enhancement and denied the acceptance of
responsibility reduction, ultimately imposing a sentence of 57
months. Strange challenges both decisions on appeal.
STANDARD OF REVIEW
In reviewing the application of an obstruction enhancement,
we apply a “mixed standard of review.” United States v. Khedr, 343
F.3d 96, 102 (2d Cir. 2003). Findings of fact are reviewed for clear
error, and legal conclusions such as “[a] ruling that the established
facts constituted obstruction or attempted obstruction under the
Guidelines” are reviewed de novo. Id.We review the decision of the district court to deny the
acceptance of responsibility reduction for abuse of discretion. See, e.g.,
United States v. Chu, 714 F.3d 742, 746 (2d Cir. 2013). “Because the
sentencing court is in a unique position to evaluate a defendant’s
acceptance of responsibility, its determination ‘is entitled to great
deference on review,’” United States v. Defeo, 36 F.3d 272, 277 (2d Cir.
1994) (quoting U.S.S.G. § 3E1.1 application note 5), and it will “not be
disturbed unless it is without foundation,” id. (quoting United States
v. Moskowitz, 883 F.2d 1142, 1155 (2d Cir. 1989)).
DISCUSSION
We have previously affirmed the application of the obstruction
enhancement under U.S.S.G. § 3C1.1 when the defendant provided
false information that would have been capable of influencing the
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court had it not been discovered to be false. See United States v.
Stephens, 369 F.3d 25, 27 (2d Cir. 2004) (noting that the defendant’s
“false testimony [in a Fatico hearing], if it had been credited, would
clearly tend to influence the District Court’s determination”). Courts
have applied the same principle to false letters submitted to a
sentencing court. See, e.g., United States v. Rickert, 685 F.3d 760, 767-68
(8th Cir. 2012). We agree with those courts and hold that the
submission of false information to a sentencing court, if it would have
been capable of influencing the sentence, is a valid basis for applying
U.S.S.G. § 3C1.1’s obstruction enhancement. We affirm the judgment
of the district court with regard to the application of the obstruction
enhancement and the denial of the responsibility reduction.
I
Strange offers two arguments for why the enhancement should
not apply. Strange’s first argument is that the forged letters “did not
relate to his offense of conviction, to any relevant conduct, or to a
closely related offense, such as, say, a co-defendant’s case,” as he
argues U.S.S.G. § 3C1.1 requires. Appellant’s Br. 11. Under U.S.S.G.
§ 3C1.1, the application of the two-level obstruction enhancement is
appropriate if:
(1) the defendant willfully obstructed or impeded, or
attempted to obstruct or impede, the administration of
justice with respect to the investigation, prosecution, or
sentencing of the instant offense of conviction, and
(2) the obstructive conduct related to (A) the defendant’s
offense of conviction and any relevant conduct; or (B) a
closely related offense.
U.S.S.G. § 3C1.1. Clause 1 establishes a “temporal” restriction that
“requires the obstruction to occur during the investigation,
prosecution, or sentencing of the offense of conviction.” United States
5
v. Byors, 586 F.3d 222, 227 (2d Cir. 2009). Clause 2 provides the “nexus
element,” which “requires that the obstructive conduct relate to the
offense of conviction.” Id. (emphasis added). Strange contends that
the forged letters fail to satisfy this second requirement.
We agree with the sentencing court that “[t]he preparation of
these letters certainly didn’t relate to some other offense.” App’x 178.
Despite not being part of the conduct constituting the offense, the
letters were submitted “to influence the outcome of the adjudication
of conviction.” Id. The sentencing court correctly decided that the
phrase “related to” encompasses the “submission of fabricated letters
to the [c]ourt for the sentencing of the offense of conviction” and that
the term does not require a relation only to the underlying unlawful
conduct. Id.In reaching that conclusion, the district court relied on our
summary order in United States v. Butters, 513 F. App’x 103 (2d Cir.
2013). That case involved a defendant’s misrepresentation that he was
an American citizen during interviews with Pretrial Services and with
the Probation Office in connection with a presentence investigation
related to the unlawful possession of a firearm. The district court
correctly concluded that “Butters reflects an understanding that the
obstructive conduct need not relate substantively to the offense of
conviction in the sense that it has to somehow stem from or carry out
or help conceal the offense of conviction. The false statements need
not be about the offense of conviction.” App’x 179. 1
1 “Although we decided [Butters] by nonprecedential summary order,
rather than by opinion, our ‘[d]enying summary orders precedential effect
does not mean that the court considers itself free to rule differently in
similar cases.’” United States v. Payne, 591 F.3d 46, 58 (2d Cir. 2010) (quoting
Order dated June 26, 2007, adopting 2d Cir. Local R. 32.1). The district court
relied on Butters for the proposition we now adopt by opinion.
6
If it were otherwise, then the two clauses of U.S.S.G. § 3C1.1
would be contradictory. Clause 1 expressly authorizes the
enhancement when the defendant obstructed justice with respect to
the “sentencing” of the underlying offense. If Clause 2 required the
obstructive conduct to relate only to the underlying offense conduct
as distinct from the sentencing, then obstruction at the sentencing
phase would never qualify. Because “the preferred meaning of a
statutory provision is one that is consonant with the rest of the
statute,” In re WorldCom, Inc., 723 F.3d 346, 355 (2d Cir. 2013) (quoting
Auburn Hous. Auth. v. Martinez, 277 F.3d 138, 144 (2d Cir. 2002)), we
reject Strange’s interpretation of the second clause.
Strange’s second argument is that the letters were not
“material.” Strange argues that “the main thrust of the defense
sentencing submission” did not depend on the content of the letters
but rather on “Mr. Strange’s care-taking role and ‘unique’ family ties
and responsibilities” as well as on the “co-morbidities that would
make imprisonment during Covid-19 especially harsh.” Appellant’s
Br. 12. According to Strange, the Kornegy and Ellington Letters
“added nothing to these principal themes” and the Bala Letter was
"largely duplicative of the medical history portion of the presentence
report.” Id.The commentary to U.S.S.G. § 3C1.1 explains that the
obstruction enhancement applies if the false information is
“material[].” U.S.S.G. § 3C1.1 application note 4(F). Application note
6 defines “material” evidence as “evidence, fact, statement, or
information that, if believed, would tend to influence or affect the
issue under determination.” U.S.S.G. § 3C1.1 application note 6.
During the sentencing hearing, the district court stated that it was
“able to say with great confidence that had [it] found the letters to be
legitimate, they would have made a difference in the sentence.”
App’x 181. With regard to the Kornegy Letter, the district court noted
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that “it’s common for judges to consider the impact of incarceration
on third parties, not just families, but employees for when … judges
sentence white collar defendants.” Id. at 183. Regarding the Bala
Letter, the district court suggested that if separating Strange from his
medical team would have resulted in “irreversible damage to
[Strange’s] body,” it would have increased the risks associated with
incarcerating Strange. Id. at 182. The district court acknowledged that
the Ellington Letter “probably wouldn’t have made a difference in the
sentence,” though the other two would have. Id. at 184. Given these
explanations from the district court, we conclude that at least two of
the forged letters satisfy § 3C1.1’s materiality requirement, which
makes application of the obstruction enhancement proper.
II
Strange next argues that the district court erroneously denied
him the acceptance of responsibility reduction. After applying the
obstruction enhancement, the district court decided to deny the
acceptance of responsibility reduction because of the dishonesty
exhibited in Strange’s fraudulent submissions and the degree to
which the fraudulent submissions mimicked the behavior for which
he had been convicted. The district court did not abuse its discretion
in doing so.
Strange suggests that the district court abused its discretion in
two ways. First, he claims that because the district court erroneously
applied the obstruction of justice enhancement and because that
erroneous application justified the denial of the acceptance of
responsibility reduction, the denial of the reduction was erroneous
too. Because we have already concluded that the application of the
obstruction enhancement was appropriate, we reject Strange’s first
argument. Second, Strange claims that his situation is an
“extraordinary” case that warrants an exception to the general rule
that the obstruction enhancement will be accompanied by the denial
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of the acceptance of responsibility reduction. We are again
unpersuaded.
Assuming an offense level of 16 or greater, a three-level
reduction in the offense level is appropriate “if the defendant clearly
demonstrates acceptance of responsibility for his offense.” U.S.S.G.
§ 3E1.1(a-b). However, the decision to grant the reduction is
discretionary. “Under the guidelines, a sentencing court may reduce a
defendant’s offense level by up to three points if he ‘clearly
demonstrates acceptance of responsibility for his offense.’” United
States v. Ortiz, 218 F.3d 107, 108 (2d Cir. 2000) (emphasis added). We
have emphasized that “[a] defendant who enters a guilty plea is not
automatically entitled to an adjustment for acceptance of
responsibility.” Id.; see U.S.S.G. § 3E1.1 application note 3 (noting that
“evidence of acceptance of responsibility … may be outweighed by
conduct of the defendant that is inconsistent with such acceptance of
responsibility”).
“Whether or not a defendant has accepted responsibility for a
crime is a factual question.” United States v. Irabor, 894 F.2d 554, 557
(2d Cir. 1990) (alteration omitted) (quoting United States v. Thomas, 870
F.2d 174, 176 (5th Cir. 1989)). A district court generally weighs
relevant facts when determining whether the reduction is
appropriate. “Although a guilty plea, combined with truthful
statements about the defendant’s offense and other relevant conduct,
is ‘significant evidence’ of acceptance of responsibility, it can be
outweighed by conduct that is inconsistent with acceptance of
responsibility.” Ortiz, 218 F.3d at 108. Application note 4 to § 3E1.1
explains that “[c]onduct resulting in an enhancement under § 3C1.1
(Obstructing or Impeding the Administration of Justice) ordinarily
indicates that the defendant has not accepted responsibility for his
criminal conduct.” U.S.S.G. § 3E1.1 application note 4 (emphasis
added). The note adds that “[t]here may, however, be extraordinary
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cases in which adjustments under both § 3C1.1 and § 3E1.1 may
apply.” Id.
Strange contends that his situation is such an “extraordinary”
case because he pleaded guilty and expressed responsibility for his
actions, despite his later submission of the false letters. But this
argument rests on the assumption that a guilty plea and public
admission alone are sufficient to warrant the three-level reduction.
That is incorrect. See Ortiz, 218 F.3d at 108. In any event, we agree with
the district court that it is hard to “believe a defendant accepts
responsibility when he fabricates evidence that’s aimed at escaping
just punishment for his crime.” App’x 184.
In deciding whether to apply the sentence reduction, a district
court considers factors such as the defendant’s “voluntary
termination or withdrawal from criminal conduct or associations.”
U.S.S.G. § 3E1.1 application note 1(b). Here, the district court
observed that Strange’s forgery of the sentencing letters resembled
the forgeries he submitted as part of the donation scheme, indicating
that Strange had not abandoned his criminal conduct. These were
appropriate considerations. We conclude that the district court did
not abuse its discretion in denying the acceptance of responsibility
reduction.
CONCLUSION
The district court correctly applied U.S.S.G. § 3C1.1’s
obstruction enhancement to Strange’s sentence and did not abuse its
discretion in denying Strange U.S.S.G. § 3E1.1’s acceptance of
responsibility reduction. We affirm the judgment of the district court.
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