United States v. Sidney Baldon, II ( 2012 )

Case: 10-20703 Document: 00511716052 Page: 1 Date Filed: 01/05/2012
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
January 5, 2012
No. 10-20703 Lyle W. Cayce
Clerk
UNITED STATES OF AMERICA,
Plaintiff-Appellee
v.
SIDNEY BERLE BALDON, II,
Defendant-Appellant
Appeal from the United States District Court
for the Southern District of Texas
4:07-CR-00279-1
Before GARZA, CLEMENT, and SOUTHWICK, Circuit Judges.
PER CURIAM:*
Sidney Berle Baldon, II, pled guilty to violation of 18 U.S.C. § 371 by
evading federal fuel excise taxes. At rearraignment, the district court failed to
inform him of the court’s authority to order restitution as required by Rule
11(b)(1)(K) of the Federal Rules of Criminal Procedure. The district court
subsequently ordered Baldon to pay $3.3 million in restitution. On appeal,
Baldon contends that the district court’s failure to comply with Rule 11
constitutes reversible error. We affirm.
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
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I
Baldon, with the help of codefendant Tracy Diamond, avoided paying
excise taxes by representing to a Louisiana fuel producer that fuel purchased
from the producer was to be exported out of the country. Rather than export the
fuel, Baldon and Diamond transported the fuel to the Houston area, where it
was blended with additional materials at the direction of codefendant Yousef
Abuteir. The Defendants also avoided taxes on the new fuel mixture. Abuteir
then sold the fuel to Houston area retailers at reduced rates.
A grand jury subsequently indicted Baldon, Diamond, and Abuteir for
conspiracy to defraud the government, in violation of 18 U.S.C. § 371, by evasion
of federal fuel excise taxes (“Count 1”), and for tax evasion, in violation of 26
U.S.C. § 7201 (“Counts 2-9”). Baldon entered into a plea agreement, pursuant
to which he pled guilty to Count 1, agreed to make a complete financial
disclosure and cooperate fully in further investigation, waived his right to
appeal, and waived his right to post-conviction relief. In return, the Government
dismissed Counts 2-9 and agreed not to oppose efforts by Baldon to reduce his
total offense level.
At rearraignment, the district court informed Baldon that it could fine him
up to $250,000, but failed to inform him of its authority to order restitution, as
required by Federal Rule of Criminal Procedure 11. See FED. R. CRIM. P.
11(b)(1)(K) (“Before the court accepts a plea of guilty or nolo contendere, the
defendant may be placed under oath, and the court must address the defendant
personally in open court. During this address, the court must inform the
defendant of, and determine that the defendant understands . . . the court’s
authority to order restitution . . . .”). However, Baldon did not object to the
district court’s failure to do so. Neither did Baldon object to the pre-sentence
report’s (“PSR”) recommendation that the district court order Baldon to pay over
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$3.3 million in restitution, or to the final sentence which adopted the PSR’s
recommendations.
Baldon requested permission to file an out-of-time appeal pursuant to 28
U.S.C. § 2255, and the district court granted him leave to do so. Baldon
appealed and now requests that this court reduce the restitution amount to the
$250,000 fine mentioned by the district court at rearraignment, or alternatively
that this court vacate his guilty plea.
II
When an appellant has not preserved a Rule 11 error by timely objection,
the plain-error standard of Rule 52(b) applies. See United States v. Dominguez
Benitez, 542 U.S. 74, 76 (2004); FED. R. CRIM. P. 52(b). Baldon must therefore
show that the district court’s error affected his “substantial rights,” which
requires demonstrating a “reasonable probability that, but for the error, he
would not have entered the plea.” Dominguez Benitez, 542 U.S. at 76. In
answering this question of probability, we look at the entire record. See United
States v. Vonn, 535 U.S. 55, 59 (2002) (“[A] reviewing court may consult the
whole record when considering the effect of any error on substantial rights.”).
However, even if Baldon shows a reasonable probability that his plea would have
been different, “relief on plain error review is in the discretion of the reviewing
court,” and Baldon “has the further burden to persuade the court that the error
seriously affected the fairness, integrity or public reputation of judicial
proceedings.” Id. at 63 (internal quotation marks omitted).
Baldon contends that, because the restitution award (approximately $3.3
million) was so much larger than the fine announced at rearraignment
($250,000), there is a reasonable probability that he would not have plead guilty
if the court had informed him of its authority to order restitution and the
“probable quantum thereof.” See United States v. Powell, 354 F.3d 362, 370 (5th
Cir. 2003) (“[F]ailure of the district court to notify the defendant as to the
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quantum of mandatory restitution . . . could be harmful error when the quantum
of that restitution exceeds the liability amount used by the court in notifying the
defendant as to the consequences of his guilty plea.”). We are unpersuaded by
Baldon’s argument.
As an initial matter, it is not clear that Rule 11 requires the district court
to advise a defendant as to the “probable quantum” of restitution. Although the
purpose of Rule 11 is to ensure a defendant’s plea decision is fully informed, its
plain text merely requires the court to inform a defendant of its authority to
order restitution, not necessarily of how large such a restitution order may be.
Furthermore, the Powell court’s suggestion that Rule 11 requires more than its
plain language was dicta—the court ultimately affirmed the district court,
concluding that its Rule 11 error was harmless. See id. at 372. In any event, we
conclude for the following reasons that Baldon has not met the burden of plain
error review, his arguments regarding “probable quantum” notwithstanding.
Baldon’s primary contention is that this court’s decision in United States
v. Glinsey, 209 F.3d 386 (5th Cir. 2000), controls. In Glinsey, the defendant
argued that the district court committed reversible Rule 11 error by failing to
advise him in open court of its authority to order restitution. The Glinsey court
reduced the restitution award ($1.266 million) to the amount of the fine ($1
million) of which Glinsey had been advised. Id. at 395. The court reasoned that
“Glinsey [was] not prejudiced so long as his liability does not exceed the
maximum amount that the court informed him could be imposed as a fine.” Id.
Baldon contends that this court should follow Glinsey and reduce restitution to
the amount of the fine. We conclude that Glinsey does not control for the simple
reason that the Glinsey court never actually reached the “substantial rights”
question of whether the defendant’s plea would have been different. Id. at 395
(“Even assuming that the roughly $266,000 difference might have affected his
decision to plead guilty, the judgment need not be vacated. We may reduce the
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order of restitution to $1 million, an amount that does not infringe his
substantial rights.” (emphasis added)). Glinsey stands for the proposition that
a restitution award less than or equal to the amount announced at
rearraignment does not affect a defendant’s substantial rights. It does not, as
Baldon suggests, stand for the proposition that a restitution amount above the
amount announced at rearraignment necessarily does affect substantial rights.
The question of substantial rights was left unanswered by Glinsey. This
court’s decisions in United States v. Maharaj, 176 F. App’x 536 (5th Cir. 2006),
and United States v. Imeh, 291 F. App’x 637 (5th Cir. 2008), contain the
appropriate analysis, one which is consistent with the Supreme Court’s
instruction in Vonn that we consider the entire record. Vonn, 535 U.S. at 59. In
Maharaj and Imeh, the defendants contended that the district courts’ failure to
inform them of their authority to order restitution affected the defendants’
substantial rights. The Maharaj and Imeh courts considered several factors,
including (1) the difference between the maximum possible fine of which the
defendant was advised at rearraignment and the total amount of restitution and
fines imposed by the district court at sentencing; (2) whether the plea agreement
advised the defendant of the court’s authority to order restitution and, if so,
whether the defendant acknowledged that he had read and understood the plea
agreement during the rearraignment; and (3) whether the defendant was jointly
and severally liable with codefendants for making restitution. See Imeh, 291 F.
App’x at 641-42 & n.3; Maharaj, 176 F. App’x at 539.
We examine each of these factors in turn. First, Baldon is correct that the
difference between the fine announced at rearraignment and the amount of
restitution clearly distinguishes this case from Maharaj and Imeh. In those
cases, the differences came to approximately $100,000 and approximately
$169,000, respectively. See Imeh, 291 F. App’x at 642 n.3 (listing both amounts).
The difference in the present case is approximately $3 million—more than thirty
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times greater than the difference in Maharaj and approximately seventeen times
greater than the difference in Imeh. However, as to the second factor, the plea
agreement in this case contemplated restitution in several places, and Baldon
acknowledged at rearriagnment that he had read and understood the plea
agreement. Baldon contends that the plea agreement’s mentions of restitution
were insufficient to inform him of the court’s authority to order restitution, but
after reviewing Baldon’s plea agreement and comparing it with the substantially
similar plea agreements in Maharaj and Imeh, we disagree. Moreover, the
district court held Baldon jointly and severally liable with Diamond and Abuteir
for the restitution payment. As to this factor, we note that the Maharaj court’s
rationale that joint and several liability “decreases the likelihood that [the
defendant] would be held personally responsible for payments in excess of
$250,000” is not as appropriate in the instant scenario—there is still a high
probability, joint and several liability notwithstanding, that Baldon will be liable
for more than $250,000. Nevertheless, joint and several liability does serve to
reduce Baldon’s personal liability and counsels in favor of affirmance. Thus, the
Maharaj and Imeh factors at most tentatively suggest that the district court’s
Rule 11 error did not affect Baldon’s substantial rights.
But beyond the Maharaj and Imeh factors, the “entire record” suggests
that Baldon’s substantial rights are unaffected by the error. Specifically, the
PSR and the judge’s statements at the sentencing hearing both referenced the
exact amount of restitution, and Baldon did not object. Baldon acknowledges the
multiple references to restitution, but contends that, if in addition to all of this
information the court had stated to him at rearraignment that it had the
authority to order restitution, his plea decision would have been different. We
see no reason to conclude that this addition would have been determinative in
Baldon’s decision process. Baldon was aware of the possibility of restitution
before he signed the plea agreement, and Baldon was aware of the exact amount
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of restitution prior to sentencing and did not object. These facts together suggest
that Baldon’s decision to plead guilty was an informed one.
Alternatively, because we are reviewing for plain error, even if Baldon has
shown a reasonable probability that his plea would have been different, we may
still decline to reverse the district court judgment. See Vonn, 535 U.S. at 63 (“[A]
defendant has the further burden to persuade the court that the error seriously
affected the fairness, integrity or public reputation of judicial proceedings.”).
Baldon invokes United States v. Corn, 836 F.2d 889 (5th Cir. 1988), for the
proposition that failure to correct the Rule 11 error would result in a
“miscarriage of justice.” See id. at 894. In Corn, the district court did not inform
the defendant of its authority to order restitution, and this court reversed and
remanded, even though the defendant had failed to object at trial. Id. at 896.
However, Corn is distinguishable—“[t]he district court never mentioned
restitution until the sentencing hearing, two months after Corn had already
entered his plea without full knowledge of the direct consequences.” Id. at 894.
This is not the case with Baldon. The plea agreement quite clearly mentioned
the possibility of restitution, as did the PSR. Baldon’s failure on multiple
occasions to object to the court’s statements regarding not only its authority to
order restitution, but also the exact amount of impending restitution, suggests
the district court’s error does not jeopardize the fairness, integrity, or public
reputation of the judicial proceedings. Accordingly, we conclude that, even if
Baldon has shown a reasonable probability that his plea would have been
different absent Rule 11 error, Baldon has not shown that the error warrants
reversal under plain error review.
III
In conclusion, we hold that Baldon has not shown a reasonable probability
that, but for the district court’s failure to inform him of its authority to order
restitution, he would not have entered a guilty plea. The references to
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restitution in the plea agreement, in the PSR, and at the sentencing hearing all
indicate that Baldon was aware of the possibility and probable amount of
restitution. Alternatively, we find that the district court’s error does not
seriously affect the fairness, integrity, or public reputation of the judicial
proceedings. Accordingly, we AFFIRM the judgment of the district court.
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