United States v. Joan Mohamed ( 1998 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
_____________
No. 98-1059
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United States of America, *
*
Appellee, *
* Appeal from the United States
v. * District Court for the
* District of Minnesota.
Joan Valentine Mohamed, also known *
as Joan Valentine and Joan Valentine *
Kerr, *
*
Appellant. *
_____________
Submitted: October 19, 1998
Filed: November 18, 1998
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Before BOWMAN, Chief Judge, RICHARD S. ARNOLD, and MORRIS SHEPPARD
ARNOLD, Circuit Judges.
_____________
BOWMAN, Chief Judge.
Pursuant to a written plea agreement, Jean Valentine Mohamed pleaded guilty
to committing one count of bankruptcy fraud in violation of 18 U.S.C. § 152 (1994).
The District Court1 calculated Mohamed's sentence pursuant to the United States
Sentencing Guidelines ("U.S.S.G." or "the Guidelines") and sentenced her to 24 months
1
The Honorable David S. Doty, United States District Judge for the District of
Minnesota.
of incarceration. Mohamed appeals, claiming the District Court erred when it relied
on factual findings in her presentence investigative report ("PSR") to which she had
objected. Mohamed argues this error resulted in the improper imposition of a two-level
enhancement for violation of a judicial order, injunction, decree, or process, and the
improper denial of a three-level reduction for acceptance of responsibility. We affirm.
I.
The underlying facts of this case have been set forth by this Court in a number
of previous opinions, see, e.g., Mohamed v. Kerr, 53 F.3d 911, 912-13 (8th Cir.)
(Mohamed II), cert. denied, 516 U.S. 868 (1995);2 Mohamed v. Kerr, 91 F.3d 1124,
1125 (8th Cir. 1996) (Mohamed III); therefore, we provide only those facts relevant to
this opinion. In July 1994, a federal district court granted Jean Valentine Mohamed
summary judgment, thereby awarding her more than $260,000 in life insurance
proceeds paid on the death of her ex-husband, Ivan Kerr. No stay having been
requested, the insurance proceeds were turned over to Mohamed. Nine months later,
this Court in Mohamed II reversed the judgment of the district court and, remanding
the case, ordered the district court to enter summary judgment in favor of Ivan Kerr's
estate. See Mohamed II, 53 F.3d at 917. The district court then entered summary
judgment in favor of Ivan Kerr's estate, and ordered Mohamed to repay the proceeds
to the estate. When Mohamed did not pay, her stepson Kevin Kerr ("Kerr"), personal
2
For the sake of consistency, we maintain the numbering system used in the
earlier opinions of this Court to refer to opinions involving defendant Mohamed.
Therefore, the full numerical order of the cases is as follows: Mohamed I refers to
Mohamed v. Kerr, No. 94-2953 (8th Cir. Oct. 27, 1994) (unpublished); Mohamed II
refers to Mohamed v. Kerr, 53 F.3d 911 (8th Cir.), cert. denied, 516 U.S. 868 (1995);
Mohamed III refers to Mohamed v. Kerr, 91 F.3d 1124 (8th Cir. 1996); Mohamed IV
refers to Mohamed v. UNUM Life Ins. Co., 116 F.3d 480 (8th Cir. 1997) (table); and
Mohamed V to Mohamed v. UNUM Life Ins. Co., 129 F.3d 478 (8th Cir. 1997). This
Court has also decided a sixth related case, Kerr v. Valentine, No. 97-3615 (8th Cir.
July 14, 1998) (unpublished).
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representative and a beneficiary of Ivan Kerr's estate, moved the district court and
obtained three orders, two in May 1995 and a third in January 1996 ("the May 1995
and January 1996 orders"), to enforce the district court's judgment in the estate's favor
and to prevent Mohamed from dissipating her assets.
Mohamed, however, did not comply with the May 1995 and January 1996 orders
and has not repaid Ivan Kerr's estate. Instead, according to the indictment, Mohamed
engaged in a series of transactions (such as transferring assets to her husband or
converting her assets to traveler's checks and smuggling them out of the country) to
conceal the remaining insurance proceeds and her other assets from Kerr.3
Mohamed also sought to prevent the estate from collecting on the district court's
judgment by filing four bankruptcy petitions between July and October 1995. In the
first of these petitions, according to uncontroverted factual allegations in the PSR,
Mohamed failed to disclose cash and other assets in her possession and recent transfers
of funds she had made to her husband.
In May 1997, a federal grand jury returned an eighteen-count indictment against
Mohamed. Count I of this indictment alleged that Mohamed knowingly and
fraudulently made false statements in her first bankruptcy petition in violation of 18
U.S.C. § 152 (1994). The remaining counts dealt with Mohamed's conduct in
concealing whatever remained of the life insurance proceeds and her other assets after
this Court issued its opinion in Mohamed II. These counts asserted that Mohamed
committed mail fraud (Counts II to VI), wire fraud (Count VII), money laundering
(Counts VIII to XII), failure to report monetary instruments (Counts XIII and XIV),
3
Mohamed denies that the assets she was concealing could be traced to the
insurance proceeds. She claims she spent all the insurance proceeds in the nine-month
period between the district court's summary judgment and the reversal of that judgment
in Mohamed II.
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and perjury (Counts XV to XVIII), all as part of a scheme to prevent Kerr from
enforcing Mohamed II. The indictment also included a forfeiture count.
In July 1997, less than one week before trial, Mohamed entered into a written
plea agreement with federal prosecutors. Pursuant to this agreement, Mohamed
pleaded guilty to Count I, bankruptcy fraud, and the government moved for dismissal
of all other counts in the indictment at sentencing.
A federal probation officer then prepared the PSR, to which Mohamed raised
three objections. First, Mohamed contested the amount of loss her bankruptcy fraud
had caused. Second, Mohamed objected on two grounds to the PSR's finding she had
violated a judicial order. Mohamed argued that the court orders she had allegedly
violated, the May 1995 and January 1996 orders, were not relevant to the bankruptcy
fraud count to which she had pleaded guilty. She also denied in various manners the
factual allegations in the PSR concerning her alleged dissipation of assets and violation
of the May 1995 and June 1996 orders. See, e.g., Defendant's Position Regarding
Sentencing Factors, at 5 (Nov. 28, 1997) (denying that "Mohamed knowingly violated
[May 1995 and January 1996] orders"); Sentencing Tr. at 8 (reporting Mohamed's
attorney denied "that there was a knowing violation of a court order"); id. at 34-35(reiterating Mohamed's objection "to the factual statements of the [PSR] to the extent
that they related to the insurance proceeds and whatever it is that happened to them,"
but indicating the defendant had no objection to the allegations "related to the
bankruptcy fraud"). Third, Mohamed argued that she should receive a three-level
reduction for acceptance of responsibility.
After hearing Mohamed's arguments on these three points, the District Court
determined that Mohamed should be sentenced to 24 months of incarceration, followed
by a three-year period of supervised release. To arrive at its determination of the
appropriate period of incarceration, the District Court adopted the parties' stipulation
in Mohamed's plea agreement that the base offense level for bankruptcy fraud was 6.
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See U.S. SENTENCING GUIDELINES MANUAL § 2F1.1(a) & App. A (1997). The District
Court also adopted the parties' stipulation that more than minimal planning was
involved in the offense, resulting in an additional two-level enhancement. See id. §
2F1.1(b)(2). Then, resolving a dispute between the parties, the District Court
determined that the amount of loss caused by the defendant's bankruptcy fraud was
$132,827, the amount of assets she had concealed in her first bankruptcy petition. This
amount-of-loss determination resulted in a seven-level enhancement. See id. §
2F1.1(b)(1)(H). These rulings have not been appealed.
The District Court made two other sentencing determinations that are at issue in
this appeal. First, the District found Mohamed should receive a two-level enhancement
pursuant to U.S.S.G. § 2F1.1(b)(3)(B) for violating a judicial or administrative order.4
Second, the court found that Mohamed should not receive a three-level reduction for
acceptance of responsibility under U.S.S.G. § 3E1.1.
After making these findings, the District Court calculated the relevant offense
level to be 17: a base offense level of 6, plus seven levels for the amount of loss
($132,827), plus two levels because the offense involved more than minimal planning,
plus two levels for violation of a judicial order. Mohamed's criminal history putting her
in Category I, the Guidelines sentencing range was 24 to 30 months. The District
Court sentenced her at the bottom of this range (24 months). The District Court also
ordered that Mohamed pay restitution to Kevin Kerr in the amount of $132,827.
Mohamed then filed this appeal.
4
Guideline § 2F1.1(b)(3)(B), in relevant part, reads as follows: "If the offense
involved . . . violation of any judicial or administrative order, injunction, decree, or
process not addressed elsewhere in the guidelines, increase by 2 levels." U.S.
SENTENCING GUIDELINES MANUAL § 2F1.1(b)(3)(B) (1997).
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II.
On appeal, Mohamed first argues the District Court erred when it assessed a
two-level sentence enhancement for violating the judicial process. Because this
challenge focuses on the application or construction of the Guidelines, we review the
District Court's actions de novo. See United States v. Wells, 127 F.3d 739, 744 (8th
Cir. 1997).
Mohamed's claim that she should not have received a two-level enhancement for
violating a court order involves two arguments. First, Mohamed argues that the court
orders she allegedly violated, the May 1995 and January 1996 orders, were not relevant
to the bankruptcy fraud, the only count to which she pleaded guilty. Mohamed claims
that those court orders instead were relevant only to Counts II-XVIII of the indictment,
counts to which Mohamed did not plead guilty, and should not be considered when
determining an appropriate sentence for her conviction on Count I. Second, Mohamed
argues that her statements that she denied the factual allegations in the PSR had
sufficient specificity and clarity to trigger the District Court's obligation to either state
it would not rely on the disputed allegations or to hold an evidentiary hearing and
require the government to prove the validity of those allegations. See United States v.
Wajda, 1 F.3d 731, 732 (8th Cir. 1993) (requiring that, if the defendant objects to a
factual allegation in the PSR with specificity and clarity, a district court must make a
factual finding based on evidence and cannot merely rely on the contested allegation);
see also United States v. Greene, 41 F.3d 383, 386 (8th Cir. 1994) (stating that, if a
defendant objects to factual allegations in the PSR, the court "must either state that the
challenged facts will not be taken into account at sentencing, or it must make a finding
on the disputed issue") (quoting United States v. Hammer, 3 F.3d 266, 272-73 (8th Cir.
1993), cert. denied, 510 U.S. 1139 (1994)). Mohamed argues that because the District
Court did not hold an evidentiary hearing on these factual allegations and did not state
that those allegations would not be considered when determining the appropriate
sentence, her case must be remanded for resentencing.
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We need not address either of these claims, however, because as a matter of law
the offense of concealing assets on a bankruptcy petition warrants, without more, a
two-level enhancement pursuant to U.S.S.G. § 2F1.1(b)(3)(B) for violation of judicial
process. Guidelines § 2F1.1(a) establishes a single base offense level for a wide range
of fraud-related offenses. When a defendant conceals assets on a bankruptcy petition,
thereby committing bankruptcy fraud, the defendant's "abuse of the bankruptcy process
makes her more culpable, and thus distinct from, others who have committed offenses
under § 2F1.1." United States v. Cheek, 69 F.3d 231, 233 (8th Cir. 1995). Because
of the increased culpability when a defendant conceals assets from bankruptcy court
officers and thus hinders the bankruptcy process, six other circuits agree with this
Court's decision in United States v. Lloyd, 947 F.2d 339, 340 (8th Cir. 1991), that the
act of concealing assets when filing a bankruptcy petition suffices to warrant a two-
level sentencing enhancement under U.S.S.G. § 2F1.1(b)(3)(B). See United States v.
Guthrie, 144 F.3d 1006, 1010 (6th Cir. 1998); United States v. Saacks, 131 F.3d 540,
545-46 (5th Cir. 1997); United States v. Messner, 107 F.3d 1448, 1457 (10th Cir.
1997); United States v. Welch, 103 F.3d 906, 908 (9th Cir. 1996); United States v.
Michalek, 54 F.3d 325, 332-33 (7th Cir. 1995); United States v. Bellew, 35 F.3d 518,
520 (11th Cir. 1994). But see United States v. Shadduck, 112 F.3d 523, 531 (1st Cir.
1997) (declining to determine if it will follow Lloyd and its progeny until the district
court first rules on the issue); United States v. Carrozzella, 105 F.3d 796, 799-802 (2d
Cir. 1997) (disagreeing with the holding in Lloyd). Therefore, because Mohamed
admits she concealed assets in her first bankruptcy petition, see Sentencing Tr. at 8, the
District Court was correct in imposing a two-level enhancement on Mohamed's
sentence for violation of the judicial process.
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III.
Mohamed also argues that the District Court erred when it refused to give her
a three-level sentencing reduction for acceptance of responsibility. In order to receive
a reduction for acceptance of responsibility, Mohamed had the burden of showing her
acceptance of responsibility for her offense. See United States v. Janis, 71 F.3d 308,
310 (8th Cir. 1995). A defendant is not entitled to a reduction merely because she
pleaded guilty. See U.S. SENTENCING GUIDELINES MANUAL § 3E1.1, Application Note
3 (1997); United States v. Byrd, 76 F.3d 194, 196 (8th Cir. 1996). Nor must a court
reduce a defendant's sentence merely because the defendant simply recites "the
appropriate litany of remorse." United States v. Mabry, 3 F.3d 244, 250 (8th Cir.
1993) (quoting United States v. Speck, 992 F.2d 860, 862 (8th Cir. 1993)), cert.
denied, 511 U.S. 1020 (1994). Rather, whether a defendant has made the necessary
affirmative showing that she has accepted responsibility for her criminal acts "is largely
a factual question that turns on issues of credibility, and we therefore reverse such a
decision only if it is clearly erroneous." United States v. Field, 110 F.3d 587, 591 (8th
Cir. 1997). This Court affords great deference to the district court, which is in a unique
position to evaluate whether or not the defendant has accepted responsibility for her
conduct. See id.Mohamed claims she was entitled to a two-level reduction pursuant to U.S.S.G.
§ 3E1.1(a) for acceptance of responsibility because she "made a full discussion of the
facts," "fully acknowledged making knowing misstatements in that petition to [the
district] court and to the probation officer," and "truthfully and forthrightly and
thoroughly acknowledged the conduct underlying the offense." Sentencing Tr. at 8.
Mohamed also argued that she was entitled to an additional third level of reduction
because her guilty plea allowed the government to avoid trial preparation and permitted
the court to allocate its resources efficiently. See U.S. SENTENCING GUIDELINES
MANUAL § 3E1.1(b) (1997).
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The District Court rejected Mohamed's arguments for a three-level sentencing
reduction, citing the following reasons:
The court finds that defendant has not demonstrated the requisite
regret for the crime committed. Defendant agreed to plead guilty to
Count I of the indictment, bankruptcy fraud, that did not identify Kevin
Kerr as the victim of defendant's acts. In addition, she refused to have the
$36,970 seized from her transferred directly to Mr. Kerr, and continues
to insist, as evidenced by the balance sheet and statements in the
presentence investigation, that she spent all of the insurance proceeds
prior to the 8th Circuit decision finding Mr. Kerr to be the rightful
beneficiary of the [life insurance] policy. Under these circumstances, the
court finds a reduction for acceptance of responsibility to be unwarranted.
While the presentence investigation report indicates that defendant has
stated that she regrets her conduct and is quite sorry for it, the court finds
that this evidence of regret is outweighed by conduct inconsistent with an
acceptance of responsibility.
United States v. Mohamed, No. CR 97-157(1), at 3 (Dec. 22, 1997) (Court's
Application of Guidelines to Facts); see also Sentencing Tr. at 25-26.
On appeal, Mohamed argues this Court should reverse the District Court's
determination because the District Court denied the reduction "based on the allegations
of wrongdoing with respect to the [life insurance] proceeds." Brief of Appellant at 10.
Mohamed argues these allegations "were, at most, part of the relevant conduct to the
offense of conviction." Id. Mohamed also renews her argument that, because she
objected to the factual allegations in the PSR concerning her alleged misuse of the
insurance proceeds, the District Court could not rely on disputed allegations of such
wrongdoing in determining her sentence. See id.
We find, however, that the District Court did not clearly err when it refused to
reduce the level of Mohamed's offense for acceptance of responsibility. As the District
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Court noted, Mohamed did not offer evidence that she has identified Kerr as the
"victim" of her crimes, nor has she sought promptly to reveal additional assets or to
repay Ivan Kerr's estate after judgment was rendered against her more than four years
ago. In these circumstances, we do not find the District Court clearly erred when it
suggested that Mohamed's admissions were merely an incantation of remorse, not
supported by her conduct, and thus concluded that she is undeserving of a reduction for
acceptance of responsibility.
IV.
For the reasons stated above, the judgment of the District Court is affirmed.
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
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