United States v. Ubakanma ( 2000 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v. No. 97-4913
CHRISTIAN E. UBAKANMA,
Defendant-Appellant.
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
No. 97-4914
CHIDOZIE ONYEKONWU, a/k/a Charles
Thomas,
Defendant-Appellant.
Appeals from the United States District Court
for the District of Maryland, at Greenbelt.
Peter J. Messitte, District Judge.
(CR-97-108-PJM)
Argued: May 3, 2000
Decided: June 12, 2000
Before NIEMEYER, TRAXLER, and KING, Circuit Judges.
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Affirmed in part, vacated in part, and remanded by published opinion.
Judge King wrote the opinion, in which Judge Niemeyer and Judge
Traxler joined.
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COUNSEL
ARGUED: Marc Lanny Resnick, Washington, D.C., for Appellant
Ubakanma; Robert Thomas Durkin, Jr., Baltimore, Maryland, for
Appellant Onyekonwu. David Ira Salem, Assistant United States
Attorney, Greenbelt, Maryland, for Appellee. ON BRIEF: Lynne A.
Battaglia, United States Attorney, Greenbelt, Maryland, for Appellee.
_________________________________________________________________
OPINION
KING, Circuit Judge:
In these consolidated actions, Christian Ubakanma and Chidozie
Onyekonwu appeal their convictions and sentences in the District of
Maryland, following their guilty pleas to a single count of wire fraud,
in violation of 18 U.S.C. § 1343. The plea agreements stipulated facts
detailing the defendants' respective roles in a fraud scheme involving
solicitations for investments in a fictitious contract with the Nigerian
government.
For the reasons explained below, we affirm Ubakanma's convic-
tion and sentence of thirty months in custody and three years of super-
vised release. However, we vacate the district court's order that
Ubakanma pay $5,400 in restitution, and we remand this aspect of his
case for further proceedings. We likewise affirm Onyekonwu's wire
fraud conviction. However, we vacate his sentence of forty-six
months of incarceration and five years of supervised release, as well
as the order that he pay $12,000 in restitution. We also remand
Onyekonwu's case for further proceedings.
I.
Each of the defendants challenges the validity of his guilty plea to
wire fraud. We review their challenges in turn.
A.
Shortly after entering his guilty plea in August 1997, but before
sentencing, Ubakanma wrote the court requesting that his plea be
2
withdrawn and that new counsel be appointed. He asserted that he is
innocent and that he had pleaded guilty due to his attorney's intimida-
tion and poor advice. The district court denied this motion without a
hearing. Ubakanma asserts on appeal that the court erred in denying
his requests to withdraw his guilty plea and for appointment of new
counsel.
We review the denial of a motion to withdraw a guilty plea for
abuse of discretion. See United States v. Brown , 617 F.2d 54 (4th Cir.
1980). There is no absolute right to withdraw a guilty plea, see United
States v. Moore, 931 F.2d 245, 248 (4th Cir. 1991), thus the defendant
has the burden of showing a fair and just reason for withdrawal. See
id.; see also United States v. Puckett, 61 F.3d 1092, 1099 (4th Cir.
1995) (a "fair and just" reason is one that"essentially challenges" the
fairness of a proceeding under Fed. R. Crim. P. 11). In determining
whether a defendant has met his burden, courts consider multiple fac-
tors: (1) whether the defendant has offered credible evidence that his
plea was not knowing or otherwise involuntary; (2) whether the
defendant has credibly asserted his legal innocence; (3) whether there
has been a delay between entry of the plea and filing of the motion;
(4) whether the defendant has had close assistance of counsel; (5)
whether withdrawal will cause prejudice to the government; and (6)
whether withdrawal will inconvenience the court and waste judicial
resources.1 See Moore, 931 F.2d at 248.
On the first factor, the record reflects that the district court con-
ducted a thorough and comprehensive Rule 11 hearing prior to
accepting Ubakanma's guilty plea. In that proceeding, Ubakanma
acknowledged under oath that the factual stipulations underlying his
plea (and read into the record in open court) were true. He stated,
among other things, that no one had coerced him into pleading guilty
and that he was in fact guilty of the wire fraud offense. Ubakanma
was advised of the essential terms of the plea agreement, and he
asserted under oath that he understood them. The court reviewed the
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1 Mr. Ubakanma does not challenge factors (5) and (6) (prejudice and
inconvenience). In addition, the court weighed factor (3) (length of
delay) in favor of Ubakanma. Therefore, only the district court's findings
on factors (1), (2), and (4) -- and its ultimate weighing of all the factors
-- are the subject of this appeal.
3
maximum permissible sentence on the wire fraud conviction, and
Ubakanma acknowledged that he understood. The court also advised
Ubakanma of the constitutional rights being waived by his guilty plea,
and he again indicated his understanding. In these circumstances,
Ubakanma's conclusory post-plea assertions that his plea was not
knowing and voluntary, made in his unsworn letter to the court, fail
to overcome the barrier of the sworn statements made at his Rule 11
hearing. We therefore agree with the district court in weighing this
factor in favor of the Government.
As to the second factor, Ubakanma conclusorily asserts his legal
innocence. In light of his contrary statements during the Rule 11 pro-
ceeding, we also agree with the district court that this factor weighs
strongly in favor of the Government.
As to the fourth factor, our analysis is informed by the standard
that when a defendant alleges ineffective counsel as the sole basis for
a motion to withdraw his guilty plea, he must establish: (1) that his
counsel's performance fell below an objective standard of reasonable-
ness; and (2) that there was a reasonable probability that, but for
counsel's errors, he would not have pleaded guilty and would have
insisted on going to trial. See United States v. DeFreitas, 865 F.2d 80,
82 (4th Cir. 1989) (citation omitted). In this regard, the district court
found that Ubakanma's counsel "filed and litigated pretrial motions
and aggressively negotiated a disposition which, when viewed in light
of the alternatives, was quite favorable for Defendant."2 Ubakanma's
conclusory claims that he was "misinformed" or"intimidated" into
pleading guilty are insufficient to overcome the district court's find-
ings and Ubakanma's sworn statements that he was not coerced. Fur-
ther, Ubakanma acknowledged that he had received a copy of the
written plea agreement prior to the plea proceedings; that the contents
of the plea agreement were accurate; and that he had knowingly and
voluntarily signed the agreement. In addition, the plea agreement
clearly provides that Ubakanma had read and carefully reviewed it
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2 The district court implicitly denied Mr. Ubakanma's motion for sub-
stitution of counsel on the same grounds, which we cannot say was an
abuse of discretion. See United States v. Mullen , 32 F.3d 891, 895 (4th
Cir. 1994) (identifying factors relevant to whether a district court abused
its discretion by denying a defendant's motion to substitute counsel).
4
with his attorney, that he understood its provisions, and that he volun-
tarily agreed to its terms. In these circumstances, we agree with the
district court that this factor also weighs in favor of the Government.
Combining the six Moore factors, only one-- the timeliness of Mr.
Ubakanma's motion to withdraw his plea -- weighs in his favor.
Therefore, on this record, we cannot conclude that the district court
abused its discretion in denying the motion. We therefore affirm Mr.
Ubakanma's conviction on his plea of guilty.
B.
The other defendant, Mr. Onyekonwu, raises a post-sentencing
challenge to his conviction by guilty plea. In this circumstance, rever-
sal is warranted only if the plea proceedings were marred by a funda-
mental defect that inherently resulted in a complete miscarriage of
justice, or in omissions inconsistent with rudimentary demands of fair
procedure. See United States v. Miranda-Santiago , 96 F.3d 517, 522
n.9 (1st Cir. 1996). We have thoroughly reviewed the record, along
with the written and oral arguments, and we conclude that
Onyekonwu fails to identify any deficiency in the Rule 11 hearing
conducted in the district court. We therefore affirm Onyekonwu's
conviction.
II.
We next consider the issues raised by the defendants concerning
their sentences. First, we consider issues on custodial (imprisonment
and supervised release) conditions imposed by the district court, and
we then address the requirements that the defendants are to make res-
titution payments.
A.
1.
Mr. Onyekonwu first asserts that he pleaded guilty to a class D
wire fraud felony, which carries a statutory maximum of five years
imprisonment, rather than to a class B felony, which provides for a
5
thirty year statutory maximum. As a result, he argues, the district
court sentenced him to excessive imprisonment and supervised
release. The resolution of this issue turns on whether Onyekonwu's
wire fraud conviction "affect[ed] a financial institution." The wire
fraud statute under which Onyekonwu was convicted provides, in per-
tinent part, as follows:
Whoever . . . [commits wire fraud] shall be fined under this
title or imprisoned not more than five years, or both. If the
violation affects a financial institution, such person shall be
fined not more than $1,000,000 or imprisoned not more than
30 years, or both.
18 U.S.C. § 1343 (emphasis added). Both the Supreme Court and this
court have concluded that a statutory aggravating circumstance con-
stitutes an offense element for purposes of conviction and sentence.
See, e.g., Jones v. United States, 526 U.S. 227, 251 (1999) (construing
carjacking statute with aggravating facts to create distinct offenses,
where the statute provides for substantially increased punishment in
the presence of those facts); United States v. Davis, 202 F.3d 212, 217
(4th Cir. 2000) (construing property destruction statute with aggravat-
ing facts to create distinct offenses). We also conclude, in this situa-
tion, that the aggravating circumstance available here -- whether the
wire fraud crime "affects a financial institution" -- constitutes an
offense element and thereby creates a distinct wire fraud offense.3
The stipulated facts underlying the wire fraud offenses, set forth in
each of the plea agreements, demonstrate that the funds involved in
the fraud scheme were transferred into and out of accounts at various
financial institutions. However, there are no facts indicating that the
financial institutions themselves were harmed or victimized in any
way, or that they were intended to be so harmed or victimized by the
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3 We are unpersuaded by the Second Circuit's decision to the contrary,
as its decision was rendered prior to the Supreme Court's decision in
Jones. See United States v. Bouyea, 152 F.3d 192, 195 (2d Cir. 1998)
(stating that effect on a financial institution is not an element of a § 1343
offense), see also United States v. Black, No. 97-1430, 1998 WL 745986,
**3 (10th Cir. Oct. 26, 1998) (table) (same, citing Bouyea, 152 F.3d
192).
6
fraud scheme. The district court correctly concluded during Ubakan-
ma's sentencing hearing that a wire fraud offense under section 1343
"affected" a financial institution only if the institution itself were vic-
timized by the fraud, as opposed to the scheme's mere utilization of
the financial institution in the transfer of funds. See Bouyea, 152 F.3d
at 195 (parent financial institution was sufficiently directly "affected"
for § 1343 purposes by fraud against its wholly-owned subsidiary,
although the subsidiary was not a "financial institution"); United
States v. Pelullo, 964 F.2d 193, 215 (3d Cir. 1992) (same); United
States v. Briggs, 939 F.2d 222, 224 (5th Cir. 1991) (gravity of fraud
in the banking system reflected by Congress's enactment of expanded
protections against defrauding financial institutions, including the
greatly enhanced penalty for § 1343 offenses affecting such institu-
tions).4
The Government has now conceded that the absence of facts show-
ing that the fraud scheme in some way victimized or affected a finan-
cial institution requires us to conclude that the wire fraud offense to
which Onyekonwu pleaded guilty is a class D felony rather than a
class B felony. Where a statute fails to classify the letter grade of the
offense, as with the wire fraud statute, a general classification system
based on the statutory maximum term of imprisonment applies. See
18 U.S.C. § 3559(a). Pursuant to section 3559(a), an offense with a
maximum term of imprisonment of more than twenty-five years and
less than life imprisonment is a Class B felony. Id. On the other hand,
an offense with a maximum term of imprisonment of less than ten
years but five or more years is a Class D felony. Id._________________________________________________________________
4 A parallel Guidelines provision has been construed in a similar fash-
ion. Cf. United States v. Bennett, 161 F.3d 171, 192-93 & n.12 (3d Cir.
1998) (applying four-level enhancement under § 2F1.1(b)(7)(B) when
fraud "affected the financial institution" by exposing it to liability);
United States v. Johnson, 130 F.3d 1352, 1355 (9th Cir. 1997) (same,
when embezzlement "affected" a bank by causing it legal expenses and
by damaging its reputation, its employees' morale, and its customer rela-
tions); United States v. Schinnell, 80 F.3d 1064, 1070 (5th Cir. 1996)
(same, where forgery "realistically exposed [banks] to substantial poten-
tial liability"); United States v. Mizrachi , 48 F.3d 651, 656 (2d Cir. 1995)
(same, construing "affecting" a financial institution to require victimiza-
tion of the institution).
7
In this case, we accordingly conclude that Onyekonwu pled guilty
and was convicted of a Class D wire fraud felony (with a five year
maximum term of imprisonment), rather than the thirty year maxi-
mum Class B wire fraud felony.
2.
A term of supervised release of "not more than three years" is
authorized for conviction of a Class D felony, while"not more than
five years" of supervised release is authorized for a Class B felony
conviction. See 18 U.S.C. § 3583(b). In this case, the district court
sentenced Onyekonwu to a five year term of supervised release. The
Government concedes that this order constitutes an incorrect applica-
tion of law. Finding ourselves in agreement with this concession, we
must remand for resentencing of Onyekonwu under the Class D fel-
ony provisions.5
B.
The district court ordered Ubakanma and Onyekonwu to make res-
titution to the Government of $5,400 and $12,000, respectively. In
each instance, the court waived imposition of a fine based on "inabil-
ity to pay."
1.
Onyekonwu asserts on appeal that his restitution order is unlawful,
because the Government was not a victim of the wire fraud scheme.
However, since Onyekonwu did not object to the restitution order at
the sentencing hearing, our review is limited to plain error. See United
States v. Castner, 50 F.3d 1267, 1277 (4th Cir. 1995).
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5 The term of supervised release imposed on Onyekonwu confirms that
the district court incorrectly relied on the Government and the plea
agreement and viewed the statutory maximum as thirty years. This incor-
rect view of the applicable statutory maximum may have contributed to
the district court's imposition of the maximum term of imprisonment
permitted under the Sentencing Guidelines, incarceration for a period of
forty-six months. Since this aspect of the sentence could have been
affected by an erroneous reliance on the incorrect statutory maximum
penalty, we vacate Onyekonwu's sentence in this respect as well.
8
The Government contends that the restitution order should not be
disturbed absent abuse of discretion, and that none occurred here
because Onyekonwu pled guilty to conduct that included a $30,000
fraudulent transaction with a specifically named victim in the United
Arab Emirates. See United States v. Blake, 81 F.3d 498, 505 & n.3
(4th Cir. 1996) (restitution orders reviewed for abuse of discretion).
The Government continues, without citation to authority, that "the
statute does not require that the government have suffered the loss,"
and it also contends that it would receive the restitution payments in
trust for unidentified victim(s).6
The Government's position must be rejected. In sentencing a
defendant convicted of wire fraud, the court may order restitution
made "to any victim of such offense, or if the victim is deceased, to
the victim's estate," pursuant to the Victim and Witness Protection
Act of 1982 ("VWPA"). See 18 U.S.C.§ 3663(a)(1)(A); see also 18
U.S.C. § 3612(b)(1)(G) (requiring a judgment imposing restitution of
more than $100 to include information sufficient to identify each vic-
tim to whom restitution is owed). If the plea agreement so provides,
the court may also order restitution to persons other than the victim
of the offense. See 18 U.S.C. § 3663(a)(1)(A), (a)(3). Significantly,
there is no such provision in this case. Moreover, the statute defines
"victim" as:
a person directly and proximately harmed as a result of the
commission of an offense for which restitution may be
ordered including, in the case of an offense that involves as
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6 Specifically identifying the victim(s) in a restitution order is necessary
because the order creates a property interest in the restitution for the vic-
tim. At the request of a victim named in a restitution order, the clerk of
the court shall issue an abstract of judgment certifying that a judgment
has been entered in favor of such victim in the amount specified in the
order. 18 U.S.C. § 3664(m)(1)(B). Upon its recording, the abstract of
judgment is a lien on the property of the defendant in the same manner
and to the same extent as a judgment of a court of general jurisdiction
in the state. Id. Also, a victim may at any time assign his interest in resti-
tution payments to the Crime Victims Fund in the Treasury without in
any way impairing the obligation of the defendant to make such pay-
ments. 18 U.S.C. § 3664(g)(2).
9
an element a scheme, conspiracy, or pattern of criminal
activity, any person directly harmed by the defendant's
criminal conduct in the course of the scheme, conspiracy, or
pattern.
18 U.S.C. § 3663(a)(B)(2), see also Blake , 81 F.3d at 506 n.5 (con-
cluding that the term "victim" is very narrowly defined under the
VWPA). The VWPA also authorizes restitution only for losses trace-
able to the offense of conviction. See United States v. Broughton-
Jones, 71 F.3d 1143, 1145 (4th Cir. 1995). Under the statute, the Gov-
ernment has the "burden of demonstrating the amount of the loss sus-
tained by a victim as a result of the offense." 18 U.S.C. § 3664(e). In
addition, in making a restitution award, the court must consider vari-
ous factors, including the amount of loss sustained by the victim, the
financial resources of the defendant, the financial needs and earning
ability of the defendant and his dependants, and such other factors as
the court deems appropriate. See Blake, 81 F.3d at 505. A district
court's statement that it waives a fine because of the defendant's
inability to pay suggests that the defendant also cannot make restitu-
tion. See United States v. Piche, 981 F.2d 706, 718 (4th Cir. 1992).
A court's failure to make findings on these factors mandates a remand
in this respect.7 Id.The district court failed to make the statutorily mandated findings
of the actual losses suffered by the victim(s) of the offense to which
Onyekonwu pleaded guilty, or to make any specific finding on
Onyekonwu's assets.8 See Blake, 81 F.3d at 505. It is clear that a gen-
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7 While the sentencing court may satisfy this duty by adopting a Pre-
sentence Report that contains adequate factual findings to allow effective
appellate review, see, e.g., Castner, 50 F.3d at 1277, no such adoption
occurred here. Onyekonwu's Presentence Report makes no recommenda-
tion as to restitution; it merely notes that "the government maintains a
loss of approximately $5,000,000 in this case." It also states that "[t]he
victim's [sic] names and loss amounts are forthcoming."
8 The victim(s) of Onyekonwu's offense and the amount of their actual
losses were not mentioned at his sentencing hearing, and there was no
finding that the restitution was specifically ordered for losses traceable
to the offense of conviction. In fact, the record indicates that the Govern-
ment recovered approximately $1.4 million related to the fraud scheme.
10
eral restitution order payable to the Government, such as we have
here, is contrary to the provisions of the VWPA, which only autho-
rizes a district court to grant a future property right to a victim. See
supra note 6. The narrow statutory exceptions to this rule do not
apply in this case. An order that a defendant make restitution to the
Government rather than to a victim improperly converts that pur-
ported restitution payment into a fine. Cf. 18 U.S.C. § 3572(b) (pro-
viding that a fine or other monetary penalty may not impair the ability
of a defendant's obligation to make restitution to a victim who is
other than the United States). We find no indication in the record that
specific victims have either assigned any property interests to the
Government or have authorized the Government to act as their
trustee.
Four conditions must be met to correct plain error: there must be
(1) an error, such as a deviation from a legal rule; (2) the error must
be plain; (3) it must affect substantial rights; and (4) it must seriously
affect the fairness, integrity, or public reputation of judicial proceed-
ings. See, e.g., Davis, 202 F.3d at 216 n.5; Castner, 50 F.3d at 1277.
We have determined that the restitution order deviated from a legal
rule and we find such deviation to be plain. Onyekonwu's substantial
rights are clearly affected by the restitution order, and we conclude
that the erroneous order affects the fairness of the judicial proceed-
ings. We therefore find plain error in regard to Onyekonwu's order
of restitution.
We must accordingly vacate the district court's order of restitution
and remand for further proceedings, including appropriate findings on
the amount of the loss sustained by the victim(s), on Onyekonwu's
_________________________________________________________________
The plea agreement provides that Onyekonwu caused a specifically
named Omani businessman to wire $30,000 to a Maryland bank account
in December 1995; it also generally states that conduct by the defendant
and the entire conspiracy caused a total loss of $5 million. At Onyekon-
wu's Rule 11 proceeding, he agreed that he engaged in the fraud scheme
involving the Omani businessman's $30,000. At his sentencing hearing,
however, there was no discussion of victims' identities or amounts of
actual loss caused by the offense of conviction. The absence of findings
precludes effective review on appeal. See Blake , 81 F.3d at 505.
11
ability to pay, and also on the identification of the victim(s) who are
to receive restitution.
2.
For the reasons explained above with respect to Onyekonwu, supra
at Section II.B.1, and because we resolve the identical issue in favor
of his co-appellant, we conclude that we should also vacate Ubakan-
ma's restitution order, though no such error has been asserted by his
counsel. See Silber v. United States, 370 U.S. 717, 718 (1962) (appel-
late courts may on their own motion notice errors to which no excep-
tion has been taken, if they are obvious or if they otherwise seriously
affect the fairness of the proceedings). Ubakanma's Presentence
Report states that the "amount of restitution attributable to the defen-
dant has not been established to date." His plea agreement notes that
a "French victim" (who was specifically named in the indictment) was
defrauded of $200,000 as a result of Ubakanma's conduct. At his
Rule 11 proceeding, Ubakanma agreed that these facts were correct.
However, at Ubakanma's sentencing hearing, the district court
expressed its belief that Ubakanma was lying about his assets and that
he possessed money somewhere. The court made no findings on the
losses actually incurred by any victim, but assumed that Ubakanma
could earn $150 monthly for a thirty-six month period, for a total res-
titution of $5400. The district court also waived imposition of a fine,
based on Ubakanma's "inability to pay." Ubakanma's Presentence
Report does not provide any information concerning his earning
capacity, and no other evidence was provided on this point at the sen-
tencing hearing. We therefore vacate Ubakanma's restitution order
and remand for such further proceedings as may be appropriate.
III.
Pursuant to the foregoing, we affirm Mr. Ubakanma's conviction
and sentence of incarceration and supervised release. However, we
vacate the district court's order of restitution and remand for further
proceedings.
We also affirm Mr. Onyekonwu's conviction for wire fraud. How-
ever, we vacate the district court's sentence of incarceration, super-
12
vised release, and restitution, and we remand for further proceedings.
AFFIRMED IN PART, VACATED IN PART,
AND REMANDED
13