United States v. Charon ( 2006 )

United States Court of Appeals
Fifth Circuit
F I L E D
REVISED APRIL 17, 2006
March 10, 2006
IN THE UNITED STATES COURT OF APPEALS
Charles R. Fulbruge III
FOR THE FIFTH CIRCUIT Clerk
No. 05-10360
UNITED STATES OF AMERICA
Plaintiff - Appellee
v.
IRAELIO CHARON
Defendant - Appellant
Appeal from the United States District Court
for the Northern District of Texas
Before KING, SMITH, and BENAVIDES, Circuit Judges.
KING, Circuit Judge:
Defendant-appellant Iraelio Charon appeals his sentence,
arguing that: (1) the district court erred by using relevant
conduct to calculate his base offense level under U.S. SENTENCING
GUIDELINES MANUAL § 2S1.1(a)(1) (2004) [hereinafter U.S.S.G.]; (2)
the district erred by enhancing his sentence for sophisticated
laundering under U.S.S.G. § 2S1.1(b)(3); and (3) the application
of Justice Breyer’s remedial holding in United States v. Booker,
543 U.S. 220 (2005), violates the Ex Post Facto and Due Process
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Clauses. For the following reasons, we AFFIRM.
I. FACTUAL AND PROCEDURAL BACKGROUND
In March 2003, a confidential source told special agents
with the Drug Enforcement Administration (“DEA”) in Dallas, Texas
that Iraelio Charon was selling cocaine in the Fort Worth, Texas
area. The agents’ investigation revealed that on September 13,
1985, Charon was convicted in federal district court of
conspiracy to distribute cocaine, in violation of 21 U.S.C.
§ 846.1 Agents arranged for an informant to purchase cocaine
from Charon. Several transactions occurred between the informant
and Charon, in which the informant would purchase a substance
containing a detectable amount of cocaine from Charon.2 The
transaction on December 19, 2003, when Charon sold approximately
995 grams of cocaine to the informant, formed the basis for count
one of the information.
1
This information was contained in the penalty information
filed by the government pursuant to 21 U.S.C. § 851. As part of
his written plea agreement, Charon agreed that this information
was true and correct.
2
The parties stipulated to the following transactions in
the factual resume: April 8, 2003 (informant met with Charon and
purchased 124.6 grams of a substance containing cocaine); August
26, 2003 (informant met with Charon and purchased 498.2 grams of
a substance containing cocaine); September 9, 2003 (informant met
with Charon and purchased 498.2 grams of a substance containing
cocaine); November 11, 2003 (informant met with Charon and
purchased 499.5 grams of a substance containing cocaine);
December 19, 2003 (informant met with Charon and purchased 995.1
grams of a substance containing cocaine). As part of his plea
agreement, Charon agreed that the factual resume was true and
correct.
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The investigation further revealed that on September 18,
2002, Charon purchased property located at 2622 Edgewood Terrace
in Fort Worth. As a down payment on the property, Charon
tendered a cashier’s check in the amount of $20,000. The
cashier’s check was purchased for Charon by a third party in the
third party’s name. Charon provided the funds for the cashier’s
check from drug proceeds. As stipulated by the parties in the
factual resume, this property transaction was designed to allow
Charon to make a legitimate investment using drug proceeds, while
concealing the source of the funds. This conduct formed the
basis for count two of the information, which alleged that Charon
conducted a financial transaction involving drug proceeds.
On October 28, 2004, Charon was charged by an information
filed by the government with one count of distributing more than
five hundred grams of a mixture and substance containing cocaine,
in violation of 21 U.S.C. § 841(a)(1) and (b)(1)(B), and one
count of laundering of monetary instruments, in violation of 18
U.S.C. § 1956(a)(1)(B)(i). On November 12, 2004, Charon waived
prosecution by indictment and consented to proceed by the two-
count information. That same day, Charon pleaded guilty to both
counts pursuant to a written plea agreement.
In the Presentence Report (“PSR”), the probation officer
noted that Charon was convicted of two counts that required
grouping under U.S.S.G. §§ 3D1.1 and 3D1.2(d). Because the money
laundering offense produced the higher offense level, the
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probation officer used it to calculate the base offense level.
See U.S.S.G. § 3D1.3(b) (providing that when counts involve
offenses of the same general type to which different guidelines
apply, the offense guideline that produces the highest offense
level applies). The probation officer determined that the base
offense level for the money laundering offense should be
determined by using the underlying offense from which the
laundered funds were derived, as well as specific offense
characteristics. See id. § 2S1.1(a)(1). Because the laundered
funds were derived from Charon’s cocaine distribution business,
the probation officer used U.S.S.G. § 2D1.1, which determines the
base offense level using the drug quantity table, to come up with
a base offense level of 36. See id. § 2D1.1(c)(2) (indicating a
base offense level of 36 for an offense involving at least fifty
kilograms but less than 150 kilograms of cocaine).3 The
probation officer added two levels to arrive at a base offense
level of 38 after adjusting for Charon’s possession of a firearm.
See id. § 2D1.1(b)(1).
After arriving at a base offense level of 38, the probation
3
The probation officer noted that as a result of their
investigation, DEA agents were able to identify Charon and his
sources of cocaine supply and track their illegal activities.
The PSR indicated that “[i]ntercepted telephone calls by DEA
agents, interviews of cooperating individuals, and an undercover
meeting with Charon revealed Charon purchased and distributed
between 70 kilograms and 150 kilograms of cocaine during the
investigation.” PSR ¶ 10. However, according to the report,
“[t]he amount of cocaine purchased by undercover
officers/informants from Charon was 2 kilograms.” Id.
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officer added two points because Charon was convicted under 18
U.S.C. § 1956, see id. § 2S1.1(b)(2)(B), and added another two
points because the offense involved sophisticated money
laundering, see id. § 2S1.1(b)(3). The probation officer then
subtracted three points for Charon’s acceptance of responsibility
pursuant to U.S.S.G. § 3E1.1(a)-(b). Based on these adjustments,
the probation officer recommended a total offense level of 39.
With Charon’s criminal history category of VI, the recommendation
resulted in a guideline imprisonment range of 360 months to life.
The probation officer noted, however, that the maximum term of
imprisonment that may be imposed for count two is 240 months.
See 18 U.S.C. § 1956(a)(1).
Charon filed written objections to the PSR, disputing the
probation officer’s calculation of the base offense level under
U.S.S.G. § 2S1.1(a)(1) and the two-level enhancement for
sophisticated laundering under U.S.S.G. § 2S1.1(b)(3). First, he
argued that his base offense level should have been based solely
on the drugs underlying his money laundering conduct, rather than
his total amount of relevant conduct for drug dealing. Second,
he contended that his method of purchasing the property was not a
sophisticated laundering transaction and that the enhancement
under U.S.S.G. § 2S1.1(b)(3) was therefore improper.
In an addendum to the PSR, the probation officer maintained
that the base offense level of 38 was applicable and that the
enhancement for sophisticated laundering was appropriate. With
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regard to Charon’s objection to the base offense level, the
probation officer noted that Charon was convicted of distribution
of cocaine, as well as the money laundering offense. According
to the probation officer, “[t]he base offense level is determined
by using the underlying offense, [d]istribution of [c]ocaine and
all relevant conduct, from which the laundered funds were derived
(the defendant’s cocaine trafficking business).” The probation
officer also noted that the relevant conduct provisions do not
limit the drug quantities to that stipulated by the defendant in
his factual resume.
In response to Charon’s objection to the enhancement under
U.S.S.G. § 2S1.1(b)(3), the probation officer stated that
sophisticated laundering typically involves the use of
two or more levels (i.e., layering) of transactions,
transportation, transfers, or transmissions, involving
criminally derived funds that were intended to appear
legitimate. In this case, the defendant was a drug
dealer and he regularly engaged in laundering his
criminal proceeds by: opening various checking and/or
money-marketing accounts and making cash deposits; using
his wife to open an account in her name, and making
unexplained cash deposits; asking a third person to
purchase a cashier’s check and purchasing property with
the cashier’s check to disguise the criminal
proceeds. . . . The defendant’s actions constitute
“layering” within the meaning of [U.S.S.G.] § 2S1.1.
Charon objected to the addendum, re-urging his objections
and adding an objection based on United States v. Booker, 543
U.S. 220 (2005). He argued that after Booker, his base offense
level could not be determined based on information not alleged in
the information, admitted to by him, or proven to a jury beyond a
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reasonable doubt. He also contended that the Ex Post Facto and
Due Process Clauses prohibit the district court from applying
Booker’s remedial opinion to his case.
At sentencing, the district court overruled Charon’s
objections to the PSR and his objections based on Booker.4 In
doing so, the district court specifically adopted as the fact
findings and conclusions of the court the facts and conclusions
as set forth in the PSR and the addendum to the PSR. The
district court also found that Charon had provided substantial
assistance to the government and granted the government’s motion
for downward departure. In considering the advisory nature of
the Guidelines, the court stated:
Well, I am going to take into account the defendant’s
cooperation with the government. Of course, I’m also
taking into account his serious criminal history and his
extensive drug activity in this case. Actually, his
conduct, as reflected by the presentence report, would
establish a mandatory life sentence if he had actually
been convicted of his offense conduct. . . . I’m going to
give him a significant departure below the bottom of the
advisory guidelines.
The district court sentenced Charon to 240 months in prison,
eight years of supervised release, and a $200 mandatory special
assessment. In doing so, the court noted that it was departing
ten years below the advisory guideline minimum of 360 months.
4
In ruling on Charon’s objections, the district court
stated: “Well, I’ll overrule all of the objections. . . . And, of
course, that includes the objection that an application of the
ruling, the recent Supreme Court decisions to this case
constitutes an ex post facto application on the law.”
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The district court judge further stated that he believed the
sentence he was imposing “takes into account and properly
considers all of the factors that are mentioned in Title 18,
United States Code, Section 3553.”
Charon now appeals, arguing that: (1) the district court
erred by using relevant conduct to calculate his base offense
level under U.S.S.G. § 2S1.1(a)(1); (2) the district court erred
by imposing a two-level enhancement for sophisticated laundering
pursuant to U.S.S.G. § 2S1.1(b)(3); and (3) the district court’s
application of Justice Breyer’s remedial holding in United States
v. Booker, 543 U.S. 220 (2005), violates the Ex Post Facto and
Due Process Clauses.
II. DISCUSSION
A. Base Offense Level Under U.S.S.G. § 2S1.1(a)(1)
Charon argues that the district court’s calculation of his
base offense level should have been based only on the drugs that
were directly related to his money laundering offense, rather
than his drug dealing relevant conduct. According to Charon,
U.S.S.G. § 2S1.1(a)(1) does not direct the court to apply
relevant conduct; instead, the guideline limits the offense level
determination to the underlying offense from which the laundered
funds were derived. Charon contends that the Sentencing
Commission’s reasons for amending § 2S1.1(a)(1) illustrate that
the Commission did not intend for courts to consider relevant
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conduct. As support for his argument, Charon points out that the
Commission listed the base offense level, special offense
characteristics, cross references, and special instructions as
considerations for determining the base offense level for the
underlying offense, but did not mention relevant conduct. See
U.S.S.G. app. C at 227-30 (Supp. Nov. 2002).
Although the Sentencing Guidelines are now advisory, a
district court is still required to calculate the guideline
range. United States v. Angeles-Mendoza, 407 F.3d 742, 746 (5th
Cir. 2005) (citing Booker, 543 U.S. at 245-46, and United States
v. Mares, 402 F.3d 511, 518-19 (5th Cir. 2005), cert. denied, 126
S. Ct. 43 (2005)). In addressing Charon’s challenge to the
district court’s calculation of his guideline range, we continue
after Booker to review the district court’s interpretation and
application of the Guidelines de novo and its factual
determinations for clear error. See United States v. Solis-
Garcia, 420 F.3d 511, 513-14 (5th Cir. 2005); see also United
States v. Villanueva, 408 F.3d 193, 203 n.9 (5th Cir. 2005)
(noting that this court continues to review factual findings with
respect to the application of the Guidelines for clear error);
United States v. Villegas, 404 F.3d 355, 359 (5th Cir. 2005)
(concluding that this court continues after Booker to review the
district court’s interpretation and application of the Guidelines
de novo).
The issue presented for our review is whether, in
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calculating the base offense level under U.S.S.G. § 2S1.1(a)(1),
the “underlying offense” includes relevant conduct. The
guideline itself provides no guidance as to how “offense level
for the underlying offense” is to be determined when there is
only one underlying offense. Cf. U.S.S.G. § 2S1.1 cmt. n.2(A)
(“Multiple Underlying Offenses”). Although one court has
intimated, though not held, that relevant conduct can be used
under § 2S1.1(a)(1),5 we have found no published or unpublished
decisions, by this circuit or otherwise, holding that the
“underlying offense” in § 2S1.1(a)(1) includes relevant conduct.
The proper starting point for this discussion is the
guideline itself. The manual’s statutory index identifies
U.S.S.G. § 2S1.1 as the offense guideline section applicable to
18 U.S.C. § 1956, one of Charon’s statutes of conviction.
Section 2S1.1 provides alternative methods for determining a
defendant’s base offense level. See United States v. Harmon, 409
F.3d 701, 706 (6th Cir. 2005). Section 2S1.1(a)(1) describes the
first method of determining the base offense level, stating that
if two specified conditions are met, the base offense level is
“[t]he offense level for the underlying offense from which the
5
See United States v. Harmon, 409 F.3d 701, 710 (6th Cir.
2005) (stating in dicta that although the district court applied
the wrong edition of the Guidelines, the district court’s
calculation of the offense level under § 2S1.1(a)(1) based on
relevant conduct “would probably have been a correct reading of
the 2002 edition of the guidelines”).
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laundered funds were derived . . . .”6 The two conditions under
(a)(1) are: (1) the defendant committed the underlying offense
(or would be accountable for the underlying offense under
subsection (a)(1)(A) of § 1B1.3 (Relevant Conduct)); and (2) the
offense level for that offense can be determined. U.S.S.G.
§ 2S1.1(a)(1). Alternatively, if the two specified conditions
are not met, the second method is used, which defines the base
offense level as “8 plus the number of offense levels from the
table in § 2B1.1 (Theft, Property Destruction, and Fraud)
corresponding to the value of the laundered funds.” Id.
§ 2S1.1(a)(2). The commentary to this guideline clarifies that
(a)(2) applies to any case in which (1) the defendant did not
commit the underlying offense, or (2) the defendant committed the
underlying offense (or would be accountable for the underlying
offense under § 1B1.3(a)(1)(A)), but the offense level for the
underlying offense is impossible or impracticable to determine.
Id. § 2S1.1 cmt. n.3(A).
Both conditions for (a)(1) are satisfied in this case. The
two counts that Charon pleaded guilty to--a drug distribution
6
The guideline defines “laundered funds” as “property,
funds, or monetary instrument involved in the transaction” in
violation of 18 U.S.C. § 1956. U.S.S.G. § 2S1.1 cmt. n.1.
Because the term “underlying offense” is not defined in the
guideline, “offense” arguably takes on its ordinary meaning under
§ 1B1.1, which defines “offense” as “the offense of conviction
and all relevant conduct under § 1B1.3 (Relevant Conduct) unless
a different meaning is specified or otherwise clear from the
context.” Id. § 1B1.3 cmt. n.1(H).
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count occurring on December 19, 2003, and a money laundering
count occurring on September 18, 2002--do not by themselves tell
us whether Charon “committed the underlying offense” because the
money laundering offense occurred over one year prior to the drug
distribution offense. Nevertheless, based on our review of the
record, we are satisfied that Charon committed or was involved in
the commission of the offense underlying his money laundering
offense. See id. § 2S1.1 cmt. n.2(B). Charon admitted, as part
of the factual resume that was incorporated into his plea
agreement, that “[t]he funds for the cashier’s check were
proceeds of [his] dealing in cocaine,” that he provided the funds
to the third party, and that the transaction was designed “to set
up a legitimate investment using drug proceeds, while concealing
the source of the funds.” The second condition to § 2S1.1(a)(1)
is also satisfied because the offense level for cocaine
distribution can be determined by using the drug quantity table
in § 2D1.1(c).
The PSR, as adopted by the district court, recognized that
although § 2S1.1 was the applicable guideline for Charon’s count
of money laundering, § 3D1.1(d) instructs that offenses under
§§ 2S1.1 and 2D1.1 are to be grouped. Neither party disputes
that grouping was required or the method in which the district
court grouped the offenses.7 Section 3D1.3(b) directs the court
7
The parties do not mention the commentary to U.S.S.G.
§ 2S1.1 concerning grouping under § 3D1.2(c). See U.S.S.G.
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to apply the offense guideline that produces the highest offense
level. The district court, in adopting the PSR, determined that
guideline to be § 2S1.1. Again, neither party argues with the
district court’s application of the money laundering offense
guideline as producing the higher offense level.
The parties dispute the district court’s next step, in which
it incorporated relevant conduct to calculate Charon’s underlying
drug distribution offense. Under U.S.S.G. § 1B1.3(a)(2),
however, the district court properly considered relevant conduct
as part of the underlying offense. Section 1B1.3(a)(2) states
that “solely with respect to offenses of a character for which
§ 3D1.2(d) would require grouping of multiple counts [as here],
all acts and omissions . . . that were part of the same course of
conduct or common scheme or plan as the offense of conviction”
shall be used in determining the base offense level. The
district court, in following the addendum to the PSR, concluded
that the base offense level in this case should be calculated by
using the underlying offense for distribution of cocaine and all
relevant conduct.
Although Charon argues that the Sentencing Commission did
not direct the courts to use relevant conduct, relevant conduct
is inherent in the grouping rules under § 3D1.2(d). Charon is
§ 2S1.1 cmt. n.6. As neither party challenged the grouping of
Charon’s counts before the district court or before this court,
we need not decide the specific application of that commentary
note.
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correct that the reasons for the amendment to § 2S1.1 do not list
relevant conduct; however, the amendment also does not direct the
court to apply the grouping rules of § 3D1.2(d) any differently
than that provision requires. In other words, analysis under
§ 3D1.2(d) necessarily takes into account the “relevant conduct”
provisions of the Guidelines, and § 2S1.1(a)(1) does not require
the court to do anything differently under that section. See
United States v. Paulk, 917 F.2d 879, 883 (5th Cir. 1990)
(“Relevant conduct for offenses to which section 3D1.2(d) applies
is governed by section 1B1.3(a)(2), which allows the court to
consider ‘all such acts or omissions that were part of the same
course of conduct or common scheme or plan as the offense of
conviction.’”). Accordingly, it was not error for the district
court to consider relevant conduct. Because Charon does not
challenge the amount of drugs attributed to him as relevant
conduct, we need not address that issue in this appeal.
B. Sophisticated Laundering Enhancement Under U.S.S.G.
§ 2S1.1(b)(3)
Charon next argues that the district court erred by imposing
a two-level enhancement for sophisticated laundering under
U.S.S.G. § 2S1.1(b)(3). Charon contends that he did not engage
in sophisticated money laundering because he merely gave a third
party $20,000 in cash (from drug proceeds) to purchase a
cashier’s check in the third party’s name, which he then used as
a down payment on a piece of property. This conduct, according
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to Charon, is not sophisticated because it does not meet the
requirements of U.S.S.G. § 2S1.1(b)(3), which requires “complex
or intricate offense conduct” in order to be classified as
“sophisticated laundering.” To the extent the PSR relied on
other activities to show that Charon engaged in sophisticated
laundering, such as the fact that he opened numerous banking
accounts, had his wife open an account, and made large,
unexplained cash deposits, he claims that the district court
erred in adopting this information and using it to enhance his
sentence because he provided the information pursuant to a
cooperation agreement. Charon maintains that “[u]nless there is
some independent source, that information [obtained through his
cooperation with the government] could not be used to enhance
[his] guideline sentence.”
As an initial matter, we must address Charon’s contention
that the information used by the district court regarding his
various checking accounts and large cash deposits was obtained
solely from his cooperation with the government and that this
information cannot be used absent an independent source. Whether
the use of Charon’s debriefing information to enhance his
sentence violates the Sentencing Guidelines or his agreement with
the government is a question of law that we review de novo. See
United States v. Gonzalez, 309 F.3d 882, 886 (5th Cir. 2002)
(noting that whether the government’s use of information provided
by the defendant in a debriefing violated the plea agreement is a
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question of law that the court reviews de novo).
Section 1B1.8 of the Guidelines states that
[w]here a defendant agrees to cooperate with the
government by providing information concerning unlawful
activities of others, and as part of that cooperation
agreement the government agrees that self-incriminating
information provided pursuant to the agreement will not
be used against the defendant, then such information
shall not be used in determining the applicable guideline
range, except to the extent provided in the agreement.
U.S.S.G. § 1B1.8(a). In United States v. Gonzalez, we looked to
the plea agreement in that case to determine if the government
could disclose information obtained during the defendant’s
debriefing. 309 F.3d at 886. We concluded that the plea
agreement indicated that the government could disclose this
information only if certain exceptions applied. Id. After
determining that none of the exceptions in the plea agreement
applied, we held that the government was not allowed to use the
information against the defendant absent a showing that the
information came from a wholly independent source. Id. at 886-
87.
The record in this case simply does not support Charon’s
argument. First, Charon has not pointed to anything in the
record indicating that his cooperation agreement with the
government precluded the government from using this information.
See U.S.S.G. § 1B1.8(a). In fact, our extensive review of the
record supports the opposite conclusion--namely that the
government did not make any agreement with Charon concerning its
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use of this information.8 Neither paragraph six of the plea
agreement, entitled “Defendant’s cooperation,” nor paragraph
seven, entitled “Government’s agreement,” includes any sort of
agreement as envisioned by U.S.S.G. § 1B1.8(a), whereby the
government agrees not to use self-incriminating information
provided by the defendant in his cooperation with the government.
Cf. Gonzalez, 309 F.3d at 886 (stating that the plea agreement
allowed the government to disclose information obtained during
the debriefing only under certain circumstances).
Second, the record does not support Charon’s contention that
the information concerning the various accounts and cash deposits
came only from his cooperation with the government. Rather, the
record reveals that the offense conduct presented in the PSR was
gathered during an independent investigation conducted by the
probation officer. The probation officer pointed out in the PSR
that specific offense details were gleaned from numerous
investigative reports prepared by a DEA agent and an Internal
Revenue Service special agent. In addition, the probation
officer conducted an interview with both of these agents to
clarify and corroborate details contained in the investigative
8
Although the record contains a copy of the plea
agreement, it does not contain a separate “cooperation
agreement.” Notably, if the parties entered into a separate
cooperation agreement, it should have been in writing pursuant to
paragraph eleven of the plea agreement, which states that the
plea agreement is a complete statement of the parties’ agreement
and cannot be modified unless in writing and signed by both
parties.
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material.
Simply put, the record does not support Charon’s contention
that the details concerning his accounts and deposits came only
from his cooperation with the government, but instead indicates
that the probation officer obtained this information from
independent sources. See United States v. Miller, 406 F.3d 323,
335 (5th Cir. 2005) (noting that contrary to the defendant’s
argument that his statements are protected by the cooperation and
plea agreement and U.S.S.G. § 1B1.8 and therefore could not be
considered at sentencing, “the record is replete with information
on which the court could have reached the same conclusions
independently of the disputed admissions”), cert. denied, 126 S.
Ct. 207 (2005). Accordingly, we find Charon’s argument that the
district court should not have considered the information
relating to his various accounts and cash deposits to be without
merit.
Turning to Charon’s argument that the district court erred
by enhancing his sentence under U.S.S.G. § 2S1.1(b)(3), we will
reverse the district court’s finding that Charon’s conduct
involved sophisticated laundering only if that finding is clearly
erroneous. See United States v. Miles, 360 F.3d 472, 481 (5th
Cir. 2004) (reviewing the district court’s finding of
sophisticated laundering under § 2S1.1(b)(3) for clear error).9
9
In deciding the appropriate standard of review for a
finding of sophisticated money laundering, we recently noted, in
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“‘If the district court’s account of the evidence is plausible in
light of the record viewed in its entirety, the court of appeals
may not reverse it even though convinced that had it been sitting
as the trier of fact, it would have weighed the evidence
differently,’ or similarly, a factual finding is not clearly
erroneous unless ‘although there is evidence to support it, the
reviewing court on the entire evidence is left with the definite
and firm conviction that a mistake has been committed.’” United
States v. Harris, 434 F.3d 767, 773 (5th Cir. 2005) (quoting
Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 400 (1990), and
United States v. United States Gypsum Co., 333 U.S. 364, 395
(1948)).
Here, the district court adopted the factual findings and
United States v. Miles, that U.S.S.G. § 2S1.1(b)(3)
is relatively new and this court has not yet examined its
application. However, this court has reviewed for clear
error a district court’s factual determination whether
sophisticated means were used in the commission of an
offense under another sentencing guideline. See United
States v. Powell, 124 F.3d 655, 666 (5th Cir. 1997)
(examining 1995 Sentencing Guideline § 2T1.1 [which
concerns using sophisticated means for tax evasion]);
United States v. Clements, 73 F.3d 1330, 1340 (5th Cir.
1996) (same). Clear error should be the standard in this
case, too, because “layering” of transactions, which the
court found to exist, is defined as a form of
sophisticated money laundering by the guidelines
commentary. See U.S.S.G. § 2S1.1, cmt. n.5(A) (2001).
360 F.3d at 481.
This standard of review is unchanged by Booker because,
as we previously mentioned, this court continues to review the
district court’s interpretation and application of the Guidelines
de novo and its factual findings for clear error. See Solis-
Garcia, 420 F.3d at 513-14.
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conclusions of the PSR and the addendum to the PSR in concluding
that Charon’s sentence should be enhanced by two levels pursuant
to U.S.S.G. § 2S1.1(b)(3). Specifically, the district court
adopted the PSR’s finding that Charon
was a drug dealer and he regularly engaged in laundering
his criminal proceeds by: opening various checking and/or
money-marketing accounts and making cash deposits; using
his wife to open an account in her name, and making
unexplained cash deposits; asking a third person to
purchase a cashier’s check and purchasing property with
the cashier’s check to disguise the criminal
proceeds. . . . [Charon’s] actions constitute “layering”
within the meaning of [U.S.S.G.] § 2S1.1.
In deciding whether the district court erred by finding that
Charon’s conduct constituted “layering” under § 2S1.1, the
guideline and its commentary guide our analysis.10 Section
2S1.1(b)(3) provides that if the offense involved “sophisticated
laundering,” the offense level may be increased by two levels.
U.S.S.G. § 2S1.1(b)(3). The commentary to this section defines
“sophisticated laundering” in part as “complex or intricate
offense conduct” that typically involves the use of, inter alia,
“two or more levels (i.e., layering) of transactions,
transportation, transfers, or transmissions, involving criminally
derived funds that were intended to appear legitimate.” Id.
§ 2S1.1 cmt. n.5(A) & (iii).
10
“[C]ommentary in the Guidelines Manual that interprets
or explains a guideline is authoritative unless it violates the
Constitution or a federal statute, or is inconsistent with, or a
plainly erroneous reading of, that guideline.” Stinson v. United
States, 508 U.S. 36, 38 (1993).
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Charon argues that his conduct is not “complex or intricate”
because it involves only two levels of laundering (i.e., giving a
third party $20,000 in cash from his drug proceeds, having the
third party obtain a cashier’s check in the third party’s name,
and then using that check as a down payment on a piece of
property). Moreover, he contends that “layering” does not
automatically result in an enhancement for sophisticated
laundering under U.S.S.G. § 2S1.1(b)(3) because the guideline’s
commentary states that sophisticated laundering “typically
involves the use of . . . two or more levels (i.e., layering)
. . . .” Id. (emphasis added).
Charon’s arguments, however, are contrary to the
interpretations provided by the only two circuit courts to
address “layering” under § 2S1.1(b)(3): this circuit in United
States v. Miles, 360 F.3d 472 (5th Cir. 2004) (holding that the
district court did not err in applying § 2S1.1(b)(3)), and the
Eighth Circuit in United States v. Pizano, 421 F.3d 707 (8th Cir.
2005) (same), cert. denied, --- S. Ct. ----, 2006 WL 386990, at
*1 (U.S. Feb. 21, 2006) (No. 05-8684). In Miles, we held that
“[w]hen an individual attempts to launder money through ‘two or
more levels of transactions,’ the commentary clearly subjects an
individual to the sophisticated laundering enhancement.” 360
F.3d at 482 (emphasis added). Similarly, the Eighth Circuit in
Pizano determined that “[u]nder the plain language of § 2S1.1,
layering constitutes sophisticated laundering. . . . The
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guideline does not require a finding that each layer was composed
of a complex transaction.” 421 F.3d at 731 (emphasis added).
When Charon’s scheme to conceal or disguise his cocaine
trafficking proceeds is viewed in its entirety, we cannot say
that the district court clearly erred in finding that Charon’s
conduct constituted “sophisticated laundering.” See id.
Accordingly, we affirm the district court’s application of
U.S.S.G. § 2S1.1(b)(3).
C. Booker Objections
Finally, Charon makes two arguments under Booker, neither of
which deserves extensive treatment given that these arguments are
foreclosed by circuit precedent. First, he argues that
application of the Booker remedial opinion violates the
limitations of ex post facto judicial decision-making that are
inherent in the notion of due process. Charon contends that the
remedial opinion does not apply retroactively because it was
“unexpected and indefensible” under the Supreme Court’s holding
in Rogers v. Tennessee, 532 U.S. 451, 457 (2001).11 According to
Charon, “both prongs of the test for non-retroactivity [in
Rogers] are met, and the Booker remedy cannot be applied to the
11
In Rogers, the Supreme Court held that “[i]f a judicial
construction of a criminal statute is ‘unexpected and
indefensible by reference to the law which had been expressed
prior to the conduct in issue,’ [the construction] must not be
given retroactive effect.” 532 U.S. at 457 (alterations in
original) (quoting Bouie v. City of Columbia, 378 U.S. 347, 352
(1964)).
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detriment of a defendant who committed the offense before Booker
was decided.” See Rogers, 532 U.S. at 457.
Like other circuits addressing this issue, this circuit
recently has rejected this argument. In United States v. Austin,
432 F.3d 598 (5th Cir. 2005), we applied our holding in United
States v. Scroggins, 411 F.3d 572, 576 (5th Cir. 2005), in
rejecting the defendant’s ex post facto and due process
challenges. In Austin, we stated that
Scroggins controls here. The fact that [the defendant]
was sentenced post-Booker, as distinguished from [the
defendant in Scroggins], whose case was on appeal when
Booker was decided, does not affect the analysis. At the
core of [the defendant’s] ex post facto and due process
concerns are the “concepts of notice, foreseeability, and
the right to fair warning,” particularly the claim that
a person would have expected sentencing under a mandatory
sentencing regime at the time when [the defendant]
committed her crime. This anticipation does not depend
on the happenstance of when Booker was decided.
432 F.3d at 599 (internal citation omitted) (quoting Rogers, 532
U.S. at 459); see also United States v. Fairclough, --- F.3d
----, 2006 WL 465367, at *2 (2d Cir. Feb. 17, 2006) (concluding
that there was no ex post facto problem with the district court’s
application of the remedial holding of Booker at sentencing
because the defendant had fair warning that his conduct was
criminal, that enhancements or upward departures could be applied
to his sentence, and that he could be sentenced as high as the
statutory maximum). In accordance with Austin, we similarly hold
that the district court did not violate the limitations of ex
post facto that are inherent in the notion of due process by
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applying the remedial holding of Booker at sentencing.
Alternatively, Charon argues that the retroactive
application of the Booker remedial opinion directly violates the
Ex Post Facto Clause. Even though he correctly concedes that the
Ex Post Facto Clause does not apply to actions by the judiciary,
see Rogers, 532 U.S. at 456, he contends that Justice Breyer’s
remedial opinion in Booker, which established advisory
Guidelines, is “an implied legislative change because Booker
ruled that this was the remedy Congress would have intended.” We
find no merit in Charon’s alternative argument, as this court has
already rejected a similar challenge in our recent opinion in
United States v. Reinhart, --- F.3d ----, 2006 WL 541037, at *6
(5th Cir. Mar. 7, 2006) (concluding that the defendant’s argument
that the district court’s use of advisory Guidelines violates his
rights under the Ex Post Facto Clause “is meritless”) (citing
Rogers, 532 U.S. at 460).
Because Charon does not challenge the reasonableness of his
sentence, we need not reach that issue in this appeal.
Accordingly, we affirm.
III. CONCLUSION
For the foregoing reasons, we AFFIRM Charon’s judgment of
conviction and sentence as imposed by the district court.
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