United States v. Wilder ( 1994 )

UNITED STATES COURT OF APPEALS
FIFTH CIRCUIT
_______________
No. 92-4790
_______________
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
BILL WILDER,
Defendant-Appellant.
__________________________________________________
Appeal from the United States District Court
For the Eastern District of Texas
__________________________________________________
(February 22, 1994)
Before DUHE, EMILIO M. GARZA, Circuit Judges, and BLACK, District
Judge.*
EMILIO M. GARZA, Circuit Judge:
Defendant Bill Wilder pled guilty to one count of conspiring
to defraud an agency of the United States, in violation of 18
U.S.C. § 371, and one count of defrauding a financial institution,
in violation of 18 U.S.C. § 1344, pursuant to a plea agreement with
the government. The district court sentenced Wilder to a seventy-
one month term of imprisonment and three years supervised release.
The district court also imposed a fine of four million dollars.
*
Chief Judge of the Northern District of Texas, sitting by
designation.
Wilder now appeals his sentence on several grounds. We affirm in
part and reverse and remand in part.
I
Wilder, a licensed attorney and a self-described "land
trader/developer," sought to build several hotels and to purchase
a federally-insured depository institution. Wilder procured the
assistance of Mark Hale, the president and chief executive officer
of General Savings Association ("GSA"),1 to help obtain funding for
these projects. Hale then caused several loans to be made to
Wilder, or for his benefit, that were not reflected in the regular
loan files of GSA.2 Wilder also requested, and received, from GSA
several irrevocable letters of credit,3 many of which were typed on
GSA stationery in Wilder's law office by Wilder's employees. Like
the loans, Hale did not cause the letters to be identified in GSA's
records and their existence was not disclosed to federal bank
examiners. Wilder then used these letters as collateral on loans he
1
Wilder was a stockholder of GSA and the majority stockholder,
founder, and chairman of the board of Bedford Savings Association ("BSA"), both
of which were insured by the Federal Savings and Loan Insurance Corporation.
2
Hale apparently caused the loans to be erroneously
identified as "simple interest loans," which did not require that
the recipient of the loans be identified. Moreover, Hale kept the
ledger reflecting the true extent of GSA's loans to Wilder in his
office and did not show it to federal banking authorities or to
GSA's board of directors.
3
A letter of credit is "[a]n engagement by a bank
. . . made at the request of a customer that the issuer will honor
drafts or other demands for payment upon compliance with the
conditions specified in the credit." Black's Law Dictionary 903-04
(6th ed. 1990).
-2-
received from other financial institutions. Additionally, Wilder
obtained several fraudulent certificates of deposit, which he used
as collateral for loans, listing GSA as the depository institution.
Hale and Wilder also joined forces to conceal from GSA's board
of directors Wilder's involvement in GSA's purchase of a tract of
land in Bedford, Texas. Wilder purchased the land in 1984 for
$1.375 million. Approximately one year later, Hale presented to
GSA's board a proposal to purchase the land as investment property.
Hale, however, informed the board that the land was owned by R.J.
Kinney, one of Wilder's business associates. After GSA's board
approved the purchase, Wilder deeded the land to Kinney, and Kinney
received the $1.823 million purchase price. Kinney then gave
Wilder the sale proceeds, and Wilder ultimately paid Hale a
kickback of over $25,000.
Subsequently, Wilder, Kinney, and Toni Lockridge formed G & K
Development, Inc. ("G&K") to purchase property near the Dallas-Fort
Forth Airport that Wilder had previously agreed to purchase. Kent
Glasscock became a director of G&K, and Wilder signed an agreement
assuming liability on any loan obtained to purchase the property
and releasing Glasscock, Kinney, and G&K from liability. G&K then
obtained a loan from Bedford Savings, with part of the proceeds
used to purchase the land and part used by Wilder to pay various
debts. When Glasscock complained to Wilder that G&K was actually
a "front" for Wilder, Wilder caused BSA to release Glasscock from
liability on the loan. Freeport Development, Inc., a company
-3-
listing Kinney as a director, later purchased the land from G&K
using loan funds provided by BSA.4 This loan then was transferred
to GSA in an attempt to hide its existence from bank examiners;
Hale caused GSA to assume the loan without the knowledge of GSA's
board.
After a lengthy government investigation, Wilder, Kinney, and
Glasscock were indicted on numerous charges of defrauding GSA and
BSA. One the eve of trial, Wilder and the government entered into
a plea agreement requiring Wilder to plead guilty to one count of
conspiring to defraud an agency of the United States and one count
of defrauding a financial institution. The agreement also provided
that the government would recommend a reduced sentence if Wilder
assisted the government in investigating or prosecuting other
individuals. After debriefing Wilder on several occasions, the
government ultimately determined that Wilder had not provided
sufficient cooperation and refused to move for a reduced sentence.
Wilder then filed a motion to compel specific performance of the
plea agreement, which the district court denied. Wilder now
appeals this ruling and the sentence ultimately imposed by the
district court.
4
Wilder's law firm performed the legal work on this
transaction. In response to a request by the president of BSA for
all documents prepared by Wilder's firm regarding the Freeport
transaction, however, Wilder denied that his firm prepared any
documents.
-4-
II
Wilder first argues that the government, in the plea
agreement, agreed to file a § 5K1.1 motion requesting a downward
departure in his sentence,5 and that the government breached this
promise by not filing the motion. The government contends the
Departure Committee for the Eastern District legitimately
determined that the government should not move for a § 5K1.1
departure because Wilder had not provided substantial assistance.6
The disputed provision in the plea agreement provided:
[I]n the event it is determined that [Wilder] provides
substantial assistance in the investigation and/or
prosecution of other individuals, the United States will
move the court to depart downward from the guidelines
under Section 5K1.1. BILL WILDER understands that even
if such a motion is made, that the court has sole
discretion to grant or deny the motion.
This agreement bound not only the prosecutor in the Eastern
District, but also federal prosecutors in other districts who were
pursuing possible charges against Wilder.
5
The Sentencing Guidelines provides that "[u]pon motion of
the government stating that the defendant has provided substantial
assistance in the investigation or prosecution of another person
who has committed an offense, the court may depart from the
guidelines." United States Sentencing Commission, Guidelines
Manual, § 5K1.1 (Nov. 1991).
6
The United States Attorney's office for the Eastern
District of Texas determines whether to recommend a § 5K1.1
departure in a particular case by referring the matter to its
Departure Committee. Pursuant to the office's policies, the
prosecutor informs the committee of the extent, nature, and quality
of a defendant's assistance. A defendant also has the opportunity
to submit a statement to the committee. Here, the members of the
committee unanimously voted not to move for a downward departure.
-5-
A
"Whether the government's conduct violated the terms of the
plea agreement is a question of law." United States v. Watson, 988
F.2d 544, 548 (5th Cir. 1993), cert. denied, ___ U.S. ___, 114 S.
Ct. 698 (1994). Wilder, as the party alleging a breach of the plea
agreement, bears "the burden of proving the underlying facts
establishing a breach by a preponderance of the evidence." Id.
"In determining whether the terms of the plea bargain have been
violated, the court must determine whether the government's conduct
is consistent with the parties' reasonable understanding of the
agreement." United States v. Valencia, 985 F.2d 758, 761 (5th Cir.
1993).
B
Wilder submits that a letter written by Charles W. Cobb, a
Justice Department trial attorney in the Northern District of
Texas, demonstrated that Wilder provided substantial assistance,
thereby obligating the government to file the motion for downward
departure.7 Wilder also contends that he was prepared to provide
7
Cobb's letter stated: (1) Although Wilder was initially
reluctant to provide details of various transactions, Wilder later
was "much more forthcoming" and provided "numerous documents" and
"information [that] helped in the investigation of other
individuals at Bedford Savings Association." (2) Wilder testified
before a grand jury "concerning numerous transactions" and
"indirectly" helped the government obtain two indictments. (3)
Wilder's cooperation also may have convinced Bedford's former
president to plead guilty to conspiracy to commit bank fraud. (4)
Wilder additionally testified before the grand jury about kickbacks
that he received from Edward Richter; "[a]s a result of [Wilder's]
known cooperation, Edward Richter pled guilty" to two bank fraud
offenses. (5) Wilder's cooperation "likewise led to a guilty plea
-6-
additional assistance to the government, but the government
informed him that it did no longer needed his assistance. The
government, on the other hand, argues both that the plea agreement
allowed the government to determine whether Wilder provided
substantial assistance and that the Departure Committee's good-
faith determination that Wilder had not provided substantial
assistance was correct.8
by William Kemp" to making false statements, and Cobb anticipated
that information provided by Wilder would "lead to future
indictments." (6) Finally, Wilder provided "very valuable"
information and documents during an investigation of Bedford's
comptroller; "[a]s a result of Mr. Wilder's cooperation," Cobb
anticipated "an indictment against the comptroller . . . in the
near future." The prosecutor did not submit Cobb's letter to the
Departure Committee because it was not written until after the
Committee had met.
In the same vein, we note that the government, while declining
to file § 5K1.1 motion, filed a motion before sentencing detailing
Wilder's cooperation. The motion reported that Wilder "responded
to every request for documents by the Government," "furnished
voluminous documents" regarding his own case, and "met with several
agents of the F.B.I. at their convenience and discussed what he
knew about what they inquired." This motion also referenced and
included Cobb's letter.
8
The prosecutor in this case, Assistant United States
Attorney Larry Eastepp, submitted two letters to the committee
detailing Wilder's assistance. The first, from government agent
Norman Middleton to Eastepp, stated: (1) Wilder provided documents
relating to the prosecution of Glasscock; "[a]lthough these
documents did not result in conviction, Wilder's cooperation was
helpful." (2) "Wilder allowed the Government access to any
documents in his possession and at times allowed his accountants to
assist the Government in the analysis of these records." (3)
Wilder's grand jury testimony against Ed and Devon Richter
"substantiated the information which the Government already had,
strengthening the Government's case," although the government "had
enough information without Wilder's testimony to prosecute the
Richters." "In summary," Middleton concluded, "Wilder's
information was true, accurate, and assisted the prosecution of
several individuals, but came at a time when the Government was
already positioned to prosecute these people, without Wilder's
-7-
In United States v. Hernandez, 996 F.2d 62, 63 (5th Cir.
1993), a case involving facts remarkably similar to the case at
bar, the plea agreement provided that "if Mr. Hernandez should
provide substantial assistance to the Government, . . . the
Government may make a motion for downward departure at sentencing."
When the government refused to move for a downward departure,
Hernandez sought to compel the government to do so, arguing that
"he provided every bit of assistance within his power." Id. at 64.
The district court, explicitly finding that Hernandez had not
provided substantial assistance, rejected Hernandez's claim that
the government breached the plea agreement. We vacated Hernandez's
sentence, however, because the district court did not "determine
whether the government's conduct [was] consistent with the parties'
reasonable interpretation of . . . what might constitute
substantial assistance." Id.
assistance."
The second letter, from Eastepp to the committee, stated: (1)
Wilder did not testify in the Glasscock trial because the plea
agreement with Wilder was not reached until shortly before
Glasscock's trial began, and Eastepp did not have time to debrief
Wilder. (2) Other than one grand jury appearance, "Wilder [w]as
not . . . asked to testify for the government" and there existed no
instances "where his testimony may have been needed and was not
used." (3) Wilder offered primarily historical or corroborative
information about other co-conspirators. (4) Ed Richter's decision
to enter into a plea agreement was "in part attributable to
information that Wilder provided." (5) While Wilder "alluded to
having detailed information about the criminal acts of others,
. . . when pressed he [either did] not come forward with this
additional information or it [w]as . . . corroborative/known
information." (6) "Wilder has only reluctantly cooperated in
[related civil] suits filed against him personally."
-8-
Here, as in Hernandez, the district court concluded))without
making any discrete factual determinations as to the reasonable
expectations of either Wilder or the government))that the
assistance provided by Wilder was not substantial.9 See id.
Although the government, and the district court, believed the
information provided by Wilder to be insubstantial, "[t]he record
. . . is silent as to just what the parties did believe, at the
time the plea agreement was entered into, would constitute
substantial assistance." Id. (emphasis added). Moreover, "[t]he
record is simply devoid of information concerning what quantity or
quality of information and cooperation the parties contemplated
that [Wilder] would (but did not) provide in this case." Id. We
also note the district court failed to address Wilder's claim that
government investigators failed to both follow up on information he
provided and fully debrief him. See United States v. Melton, 930
F.2d 1096, 1098-99 (5th Cir. 1991) (noting that when a defendant,
"in reliance on a [promise by the government], accepted the
government's plea offer and did his part, or stood ready to perform
but was unable to do so because the government had no further need
or opted not to use him, the government is obliged to move for a
9
At sentencing, the district court found that Wilder "did
not render a full and complete debriefing and substantial
assistance to the Government as agreed by him. Instead, [Wilder's]
assistance [was] for the most part grudging, reluctant, and not
forthcoming, and he revealed information only upon specific
requests." In a memorandum opinion issued shortly after Wilder was
sentenced, the district court found the government's determination
that Wilder did not provide substantial assistance to be
"objectively reasonable."
-9-
downward departure"). Consequently, we must remand this case for
such determinations.10 On remand, if the district court determines
that Wilder did provide substantial assistance, it must then
determine whether the plea agreement obligates the government to
move for a downward departure))i.e., whether the government, in the
agreement, retained its discretion to refuse to move for a downward
departure even if Wilder provided substantial assistance.
Hernandez, 996 F.2d at 66; see also Wade v. United States, ___
U.S. ___, 112 S. Ct. 1840, 1843, 118 L. Ed. 2d 524 (1992)
(recognizing that the government could obligate itself to file a
substantial-assistance motion in exchange for a defendant's guilty
plea).
III
Wilder's next contention, which is closely related to the
substantial assistance issue, is that the district court erred in
sentencing him based on ex parte information, thereby depriving him
of the opportunity to rebut any incorrect factual assumptions made
by the court. Specifically, Wilder challenges the government's
decision to submit ex parte to the district court the letters upon
which the Departure Committee relied when deciding not to file the
§ 5K1.1 departure motion. The government contends that Wilder had
no right to examine the letters and, even if such a right exists,
Wilder waived that right by not asserting it prior to sentencing.
10
We of course express no view as to the ultimate
resolution of these issues.
-10-
We agree that Wilder waived any right he may have had to
receive the letters submitted by the government when he failed to
petition the district court for access to the letters prior to
sentencing. See United States v. Lemons, 941 F.2d 309, 320 (5th
Cir. 1991) (rejecting a claim that the district court should have
provided Lemons with certain letters because "when the district
court referenced that correspondence, Lemons did not object, did
not request to examine it, and did not request that it be made a
part of the record"). While Wilder argues that he did "object[] to
the fact that he had not been permitted to even see the letters,"
the record reveals that Wilder did not ask the district court to
order production of the letters until after he had been sentenced.11
Consequently, we need not determine whether Wilder had a right to
examine the documents submitted by the government because, if such
a right exists, Wilder waived it.
11
Accordingly, it is irrelevant that Wilder "repeatedly
requested the information" from the government "but had been
deprived of it." Moreover, even when Wilder broached the subject
of the letters during the sentencing hearing, he did not ask the
district court to order their production so that he could respond
to their contents prior to being sentenced. See Transcript of July
28, 1992 Sentencing Hearing at 24 ("I presume the Court is aware of
the fact that we have not been privy to viewing the materials that
are in camera . . . ."); id. at 39 ("may we ask the Government to
consider allowing Counsel for the Defendant access to [the letters]
so we can make an adequate determination with regard to the
appellate issues, Your Honor?"); id. at 39-40 ("I would move at
this time that the Court consider unsealing [the letters] so that
we can adequately and intelligently make a decision with regard to
the appeal; and if we do decide to appeal, whether we can
adequately respond and intelligently argue our position before the
Court of Appeals.").
-11-
IV
Wilder next asserts that the district court erred by
increasing his offense level by two points for obstruction of
justice.12 Wilder contends that the district court, in finding the
obstruction enhancement applicable, unlawfully relied on evidence
obtained pursuant to Wilder's cooperation with the government.13
We review the district court's finding that Wilder obstructed
justice using the clearly erroneous standard. United States v.
Pofahl, 990 F.2d 1456, 1481 (5th Cir. 1993).
The basis for the obstruction enhancement was the district
court's finding that Wilder removed a loan file from BSA to hinder
the government's investigation. Wilder, however, argues that he
provided the loan file to the government only after the plea
agreement was signed, thus barring the government from using the
file against him in any way. The government failed to produce
evidence demonstrating whether it obtained the loan file from Mark
12
U.S.S.G. § 3C1.1 provides: "If the defendant willfully
obstructed or impeded, or attempted to obstruct or impede, the
administration of justice during the investigation, prosecution, or
sentencing of the instant offense, increase the offense level by 2
levels."
13
The plea agreement provided that "no truthful statements
made during the course of [Wilder's] cooperation will be used
against him, nor . . . will any such information . . . be used in
determining the applicable guideline range, with the exception of
the provisions of § 1B1.8(b) of the U.S.S.G." U.S.S.G. § 1B1.8(b)
provides, inter alia, that the government may use against a
defendant any information "known to the government prior to
entering into the cooperation agreement."
-12-
Hale, as it contends, or from Wilder, as Wilder contends.14 The
government also failed to demonstrate whether it knew, prior to
entering into the plea agreement, that Wilder had removed the file
from BSA. Because there is not "sufficient evidence in the record
to permit the sentencing judge to conclude that [Wilder] obstructed
the administration of justice," United States v. Frances-Torres,
869 F.2d 797, 800, we are compelled to find the district court's
conclusion that Wilder obstructed justice to be clearly erroneous.15
See id. at 801 (noting that § 3C1.1 should not be applied "when the
prosecution has failed to procure available evidence crucial to the
resolution of a controversy"). As this error affected the district
court's selection of the sentence imposed, we vacate Wilder's
sentence and remand for resentencing without consideration of the
obstruction enhancement. United States v. Surasky, 976 F.2d 242,
247 (5th Cir. 1992).
14
We note, however, that a letter sent by Eastepp to the
§ 5K1.1 committee reported that "[t]he main set of documents [to
which the government gained access pursuant to the plea agreement]
consisted of an original loan file taken out of Wilder's
institution, Bedford Savings, ostensibly by Wilder."
15
Notwithstanding the lack of evidence regarding the
circumstances under which the government obtained the loan file,
the government argues that the obstruction finding was appropriate
given Wilder's tardiness in returning to the probation office the
standard financial disclosure statement needed to properly complete
the PSR. However, "[a] defendant's . . . refusal to . . . provide
information to a probation officer . . . is not a basis for
application" of the obstruction enhancement. U.S.S.G. § 3C1.1,
comment. (n.1). Accordingly, we do not believe that Wilder's
three-month delay in returning the disclosure statement, standing
alone, constitutes obstruction of justice.
-13-
V
Wilder next argues that he is entitled to a downward
adjustment in his offense level because he accepted responsibility
for his crimes. Under § 3E1.1(a) of the guidelines, "[i]f the
defendant clearly demonstrates a recognition and affirmative
acceptance of personal responsibility for his criminal conduct,"
the district court may reduce the defendant's offense level by two
points. "The mere entry of a guilty plea, however, does not
entitle a defendant to a sentencing reduction for acceptance of
responsibility as a matter of right." United States v. Shipley,
963 F.2d 56, 58 (5th Cir.) (per curiam), cert. denied, ___ U.S.
___, 113 S. Ct. 348, 121 L. Ed. 2d 263 (1992).
Entry of a plea of guilty prior to the commencement of
trial combined with truthful admission of involvement in
the offense and related conduct will constitute
significant evidence of acceptance of responsibility
. . . . However, this evidence may be outweighed by
conduct of the defendant that is inconsistent with such
acceptance of responsibility.
U.S.S.G. § 3E1.1, comment. (n.3) (emphasis added). Here, the
district court found that Wilder did not fully accept
responsibility for his criminal acts. We review this finding using
the clearly erroneous standard. United States v. Hardeman, 933
F.2d 278, 283 (5th Cir. 1991).16
16
We have not definitively determined what standard applies
when reviewing a district court's refusal to credit a defendant's
acceptance of responsibility. Compare Hardeman, 933 F.2d at 283
(applying the clearly erroneous standard) with United States v.
Thomas, 870 F.2d 174, 176 (5th Cir. 1989) (applying the "without
foundation" standard) and United States v. Brigman, 953 F.2d 906,
909 (5th Cir.) (applying the "great deference" standard), cert.
-14-
While Wilder accepted responsibility for some acts, he did not
demonstrate "sincere contrition" regarding the full extent of his
criminal conduct. See United States v. Beard, 913 F.2d 193, 199
(5th Cir. 1990). Instead, Wilder sought to minimize his
participation in the offenses, blame others for his criminal
activity, and resist efforts by the Resolution Trust Corporation
and the probation office to investigate his financial affairs. See
United States v. Windham, 991 F.2d 181, 183 (5th Cir.) (noting that
a defendant is required under the pre-1992 guidelines to accept
responsibility for all relevant criminal conduct to be eligible for
a downward departure under § 3E1.1), cert. denied, ___ U.S. ___,
114 S. Ct. 444, 126 L. Ed. 2d 377 (1993); United States v. Alfaro,
919 F.2d 962, 968 (5th Cir. 1990) (same). Moreover, Wilder did not
agree to plead guilty until the eve of trial, thereby putting the
government to much effort and expense preparing for trial. See
U.S.S.G. § 3E1.1, comment. (1(g)) (noting that the district court
should consider "the timeliness of the defendant's conduct in
manifesting the acceptance of responsibility"). Accordingly, the
district court's finding that Wilder did not accept responsibility
is not erroneous.
denied, ___ U.S. ___, 113 S. Ct. 49, 121 L. Ed. 2d 16 (1992).
However, "[t]here appears to be no practical difference between the
three standards." United States v. Cartwright, 6 F.3d 294, 304
(5th Cir. 1993).
-15-
VI
-16-
Wilder contends that the district court erred in awarding him
a four point upward adjustment for his role in the conspiracy.
Such an adjustment is proper "[i]f the defendant was an organizer
or leader of a criminal activity that involved five or more
participants or was otherwise extensive." U.S.S.G. § 3B1.1(a). In
determining the number of participants in a criminal activity, the
district court must focus upon "the number of transactional
participants, which can be inferentially calculated provided that
the court does not look beyond the offense of conviction to enlarge
the class of participants." United States v. Barbontin, 907 F.2d
1494, 1498 (5th Cir. 1990). The term "offense," however, "is
broader than the offense charged, and includes the `contours of the
underlying scheme itself.'" United States v. Kleinebreil, 966 F.2d
945, 955 (5th Cir. 1992) (quoting United States v. Mir, 919 F.2d
940, 945 (5th Cir. 1990)). Thus, "the scope to be considered
. . . encompasses . . . the underlying activities and participants
that directly brought about the more limited sphere of the elements
of the specific charged offense." United States v. Manthei, 913
F.2d 1130, 1136 (5th Cir. 1990). We review the district court's
findings on this issue under the clearly erroneous standard.
United States v. Mergeson, 4 F.3d 337, 347 (5th Cir. 1993).
The record adequately demonstrates that Wilder participated in
a criminal activity involving at least five individuals. First,
Wilder himself may be counted as a participant. Barbontin, 907
F.2d at 1498. Moreover, the record reflects that Kinney,
-17-
Glasscock, and Hale also were participants in the underlying
criminal scheme. Finally, evidence submitted by Wilder indicates
that at least one of his employees prepared the fraudulent letters
of credit and was otherwise associated with the counterfeit
certificates of deposit and the fraudulent land transfers.
Consequently, the criminal scheme in which Wilder was a participant
involved at least five individuals.17
The record also establishes Wilder's status as a leader or
organizer of the scheme. In determining whether a defendant was a
leader or organizer, the district court should consider:
the exercise of decision making authority, the nature of
participation in the commission of the offense, the
recruitment of accomplices, the claimed right to a larger
share of the fruits of the crime, the degree of
participation in planning or organizing the offense, the
nature and scope of the illegal activity, and the degree
of control and authority exercised over others.
U.S.S.G. § 3B1.1, comment. (n.3). Here, application of these
factors indicates that Wilder organized and managed almost every
aspect of the scheme. For example, Wilder enlisted the assistance
of Glasscock, Hale, and Kinney in defrauding the two savings and
loans and concealing Wilder's participation in transactions through
the use of sham land transfers. Moreover, Wilder agreed to release
Glasscock and Kinney from liability regarding the G&K land purchase
17
We also note that the parties stipulated that Wilder's
scheme to defraud the two savings and loans caused losses of over
five million dollars. See United States v. Allibhai, 939 F.2d 244,
252-53 (5th Cir. 1991) (upholding district court's finding that a
money laundering scheme was "otherwise extensive" because over one
million dollars was involved), cert. denied, ___ U.S. ___, 112 S.
Ct. 967, 117 L. Ed. 2d 133 (1992).
-18-
transaction and received the bulk of the proceeds and benefits from
the fraudulent schemes. The evidence thus amply supports the
district court's conclusion that Wilder exercised a leadership role
in the criminal scheme.
VII
Wilder next argues that the district court erred in imposing
a four million dollar fine, which was an upward departure from the
guideline range.18 In determining whether to impose a fine, the
district court must consider two factors particularly relevant to
our inquiry: "any pecuniary loss inflicted upon others as a result
of the offense" and "the need to deprive the defendant of illegally
obtained gains from the offense." 18 U.S.C. § 3572(a)(3), (4).
Moreover, "[i]f any person derives pecuniary gain from the offense,
or if the offense results in pecuniary loss to a person other than
the defendant, the defendant may be fined not more than the greater
of twice the gross gain or twice the gross loss . . . ."19 18
18
Section 5E1.2 of the guidelines provides a fine range for
Wilder's offense level of $10,000 to $100,000.
19
The guidelines also recognize that upward departures from
the fine guideline range are appropriate in certain cases:
Where . . . two times either the amount of gain to the
defendant or the amount of loss caused by the offense
exceeds the maximum of the fine guideline, an upward
departure from the fine guideline may be warranted.
Moreover, where a sentence within the applicable
fine guideline range would not be sufficient to ensure
both the disgorgement of any gain from the offense that
otherwise would not be disgorged . . . and an adequate
punitive fine, an upward departure from the fine
guideline range may be warranted.
-19-
U.S.C. § 3571(d). Accordingly, Wilder must have derived a gross
gain or caused gross losses of at least two million dollars to
justify the four million dollar fine.
A
Although we have recognized the general standards for
reviewing departures from the sentencing guidelines, we have not
yet addressed the standards for reviewing upward departures from
fine guideline ranges. Because the statute governing appellate
review of sentences draws no distinction between review of
departures from fine or imprisonment ranges, see 18 U.S.C.A.
§ 1372(e)-(f) (West Supp. 1993), the standards we previously have
established for review of upward departures from imprisonment
ranges are equally applicable to reviewing departures from fine
ranges. See United States v. Graham, 946 F.2d 19, 21 (4th Cir.
1991) (reaching the same conclusion). Thus, we review the district
court's decision to depart from the guidelines for an abuse of
discretion. See United States v. Roberson, 872 F.2d 597, 601 (5th
Cir.), cert. denied, 493 U.S. 861, 110 S. Ct. 175, 107 L. Ed. 2d
131 (1989). "A departure from the guidelines will be affirmed if
the district court offers `acceptable reasons' for the departure
and the departure is `reasonable.'" United States v. Velasquez-
Mercado, 872 F.2d 632, 635 (5th Cir.), cert. denied, 493 U.S. 866,
110 S. Ct. 187, 107 L. Ed. 2d 142 (1989). The reasons articulated
by the district court in support of its decision to depart from the
U.S.S.G. § 5E1.2, comment. (n.4).
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guidelines constitute findings of fact that we review for clear
error. Id.
B
The district court based its decision to upwardly depart on
two grounds: first, that the enhanced fine was necessary to ensure
that Wilder disgorged any gain from his criminal activities and,
second, that the enhanced fine was permitted by § 3571(d) because
Wilder's criminal acts resulted in pecuniary losses to other
persons exceeding five million dollars. The district court's
findings that Wilder derived at least two million dollars in gross
gains and caused at least two million dollars in gross losses is
not clearly erroneous. For example, the parties stipulated to the
fact that the losses caused by Wilder's scheme exceeded five
million dollars. Moreover, the record adequately demonstrates that
Wilder received gross profits of over two million dollars from the
scheme to defraud. Thus, the district court did not abuse its
discretion by upwardly departing from the fine guideline range.
VIII
Wilder's last contention is that the government breached the
plea agreement by recommending to the district court that it adopt
the PSR, which in turn recommended the upward departure regarding
Wilder's fine. The government in the plea agreement promised "not
to oppose any sentence falling within the guidelines established
for" the offenses committed by Wilder. Wilder argues that the
prosecutor violated that promise by telling the district court that
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the probation office had supplied the court "with an excellent
Presentence Report [providing] the Court with great detail about
this case . . . , [giving] the Court a good picture of what
occurred in this case and . . . fully inform[ing] the Court so that
the Court can make the proper decision in this case."
Wilder failed to object to the comments that he now
challenges. Consequently, we review his claim for plain error.
United States v. Goldfaden, 959 F.2d 1324, 1327 (5th Cir. 1992).
Plain error
is error which, when examined in the context of the
entire case, is so obvious and substantial that failure
to notice and correct it would affect the fairness,
integrity or public reputation of judicial proceedings.
. . . Alternatively stated, when a new factual or legal
issue is stated for the first time on appeal, plain error
occurs when our failure to consider the question results
in "manifest injustice."
United States v. Lopez, 923 F.2d 47, 50 (5th Cir.) (citation
omitted), cert. denied, ___ U.S. ___, 111 S. Ct. 2032, 114 L. Ed.
2d 117 (1991). The government's breach of a plea agreement can
constitute plain error. Goldfaden, 959 F.2d at 1328.
The prosecutor's comments do not amount to a breach of the
plea agreement. From the context in which the prosecutor made the
quoted remarks, it is clear that he was not recommending that the
district court depart from the applicable fine guideline range.
Rather, the prosecutor was commenting on the usefulness of the
PSR's recitation of facts.20 Additionally, the PSR did not
20
Because Wilder opted to plead guilty instead of going to
trial, thereby depriving the district court of the opportunity to
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affirmatively state that the district court should impose a fine
greater than the guideline amount,21 and the issue of departing from
the guideline range was not mentioned during sentencing until the
district court announced its intent to impose an enhanced fine.
Cf. United States v. Hand, 913 F.2d 854 (10th Cir. 1990) (no breach
where the prosecutor presented no direct evidence in contradiction
to agreement). This case, therefore, is distinguishable from the
two cases cited by Wilder to support his claim that the government
violated the plea agreement by recommending an upward departure.
See United States v. Canada, 960 F.2d 263, 269 (1st Cir. 1992)
(where the government, after agreeing to recommend that the
sentencing court impose a specific sentence, failed to recommend
that sentence, urged the judge to impose a lengthy sentence and to
send a very strong message); Goldfaden, 959 F.2d at 1328 (where
the government, in the face of a promise to make no recommendation
as to the defendant's sentence, "suggested a base offense level,
argued for a minimum offense level . . . , later advanced a higher
base offense level . . . , and recommended an upward departure").
hear the factual basis for the charges brought by the government,
the PSR necessarily needed to provide the sentencing court "with
great detail about this case" and give the court "a good picture of
what occurred." Without such information, the sentencing court
could not properly impose a sentence.
21
The PSR, under the heading "Factors That May Warrant
Departure," stated that the amount of the loss caused by the scheme
to defraud and the extensive nature of the scheme "support an
upward departure for the fine amount."
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Accordingly, we find that the government did not breach the plea
agreement by commending the PSR to the district court.
IX
For the foregoing reasons, we REVERSE the district court's
determination that Wilder obstructed justice, VACATE Wilder's
sentence, and REMAND for resentencing. On remand, the district
court should determine the validity of Wilder's allegations that he
rendered substantial assistance pursuant to the terms of the plea
agreement and that the government breached that agreement. In all
other respects, we AFFIRM the judgment of the district court.
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