United States v. Wellington Icaza ( 2007 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 06-2882
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United States of America, *
*
Appellee, *
*
v. *
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Wellington Icaza, also known as *
Arnaldo Javier Garcia, *
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Appellant. *
* Appeals from the United States
___________ District Court for the
Southern District of Iowa.
No. 06-2883
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United States of America, *
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Appellee, *
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v. *
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Rosaura Amparo Jaramillo- *
Martinez, *
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Appellant.
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No. 06-3003
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United States of America, *
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Appellee, *
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v. *
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Gladys Icaza Peterson, *
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Appellant. *
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Submitted: April 10, 2007
Filed: July 10, 2007
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Before MELLOY, BOWMAN and GRUENDER, Circuit Judges.
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GRUENDER, Circuit Judge.
Wellington Icaza, Rosaura Jaramillo-Martinez and Gladys Icaza Peterson pled
guilty to conspiracy to commit interstate transportation of stolen property and
interstate transportation of stolen property in violation of 18 U.S.C. §§ 371 and 2314.
Jaramillo-Martinez also pled guilty to illegally reentering the United States after
deportation in violation of 8 U.S.C. § 1326. The appellants appeal their sentences.
For the reasons discussed below, we vacate the sentences of all three appellants and
remand to the district court for resentencing.
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I. BACKGROUND
Icaza, Jaramillo-Martinez and Peterson (“the appellants”) traveled across the
United States shoplifting over-the-counter medicines and other items from a multitude
of retail stores. Police apprehended the appellants after employees observed them
shoplifting from a Walgreens in Bettendorf, Iowa. After entry of their guilty pleas,
the district court sentenced the appellants at a single sentencing hearing. Two law
enforcement officials, along with Jerry Biggs, Coordinator of the Organized Retail
Crime Division for Walgreens, testified as to the scope of the appellants’ criminal
enterprise. The Government also introduced a number of ledgers seized from the
appellants indicating quantities of items stolen. An analysis of just one ledger
revealed the value of stolen items detailed in that ledger to be $611,194. In
combination with the value of items recovered after apprehension of the appellants,
this evidence supported a total theft value of $855,833, of which $674,634 could be
tied to thefts from Walgreens stores. A Government witness extrapolated from the
value of items stolen from the Bettendorf Walgreens to estimate that the appellants
shoplifted from approximately 407 Walgreens stores in order to accumulate that
$674,634 worth of stolen items.
At sentencing, in calculating the advisory guidelines range for each appellant,
the district court applied a 14-level enhancement under § 2B1.1(b)(1) of the United
States Sentencing Guidelines for an actual loss of more than $400,000 but less than
$1,000,000. The district court noted that the amount-of-loss enhancement would have
been significantly higher had the Government analyzed and presented evidence from
every ledger instead of just one. In addition, the district court, counting each
Walgreens store as a victim, applied a 6-level enhancement under § 2B1.1(b)(2)
because the offense involved 250 or more victims. The resulting advisory guidelines
ranges were 46 to 57 months for Icaza, 57 to 71 months for Jaramillo-Martinez and
51 to 63 months for Peterson. Each appellant was sentenced within his or her
advisory guidelines range. The court sentenced Icaza to 47 months, Jaramillo-
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Martinez to 57 months, and Peterson to 63 months in prison. On appeal, each
appellant argues that the district court erred in finding that each Walgreens store was
a separate victim for purposes of the § 2B1.1(b)(2) number-of-victims enhancement.
B. DISCUSSION
We must consider whether the district court erred in finding that each retail
store of a corporation counted as a separate victim for purposes of the § 2B1.1(b)(2)
number-of-victims enhancement. We review the district court’s interpretation and
application of the guidelines de novo and its findings of fact for clear error. United
States v. Mashek, 406 F.3d 1012, 1017 (8th Cir. 2005). We hold that the district court
erred in interpreting the term “victim” in § 2B1.1(b)(2) to include each individual
store when only the Walgreens corporation sustained an actual loss.
Section 2B1.1(b)(2) of the sentencing guidelines provides:
(Apply the greatest) If the offense--
(A) (i) involved 10 or more victims; or (ii) was committed through mass-
marketing, increase by 2 levels;
(B) involved 50 or more victims, increase by 4 levels; or
(C) involved 250 or more victims, increase by 6 levels.
Section 2B1.1 Application Note 1 defines “victim” as “any person who sustained any
part of the actual loss determined under subsection (b)(1). . .‘Person’ includes
individuals, corporations, companies, associations, firms, partnerships, societies, and
joint stock companies.” Therefore, a victim must be an individual, corporation or
company of some type that sustained part of the actual loss determined by the district
court.
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The district court found that each of the 407 Walgreens stores were separate
victims of the actual $674,634 loss and applied a six-level enhancement. However,
Walgreens’ Biggs testified as follows at sentencing:
Q. [Defense counsel]: Assuming that the defendants were found
responsible in this case for $674,000 in loss, and restitution was ordered,
to whom would that restitution go?
A. It would go to our corporation.
Q. There aren’t any individual stores that would receive any of that
benefit or any of the money?
A. No. Those stores would be – they would – everything is done by
budget. They have inventoried – they have taken their loss, but
ultimately the corporation takes the loss.
Q. The corporation ultimately bears the loss of the product and the lost
value in it?
A. Yes, sir.
Accordingly, the individual Walgreens stores did not “sustain[] any part of the actual
loss determined under subsection (b)(1)”; instead, Walgreens corporation “sustained
. . . the actual loss determined under subsection (b)(1).” U.S.S.G. § 2B1.1 cmt. n.1.
Therefore, Walgreens corporation is the only victim for the $674,634 loss under
§ 2B1.1(b)(2).
We do not believe, as the Government argues, that the decision in United States
v. Longo, 184 Fed. Appx. 910 (11th Cir. 2006) (unpublished per curiam), suggests a
different result. Longo embezzled funds from four employee benefit plans, two of
which had a combined membership of more than 110 members. Id. at 912. The
Longo court held that the district court did not err in counting the 110 individual plan
members, rather than just the four plans, as victims for purposes of the § 2B1.1(b)(2)
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enhancement. Id. at 913. However, the record in Longo showed that plan members
“each individually suffered pecuniary harm because they each owned a pro rata share
of the plan assets and held them jointly and severally.” Id.1 By contrast, in the instant
case, there is no evidence that Walgreens’ corporate structure gives individual
Walgreens stores ownership of a pro rata share of corporate assets to be held jointly
and severally. Furthermore, Biggs testified that no individual Walgreens store
ultimately bore the pecuniary harm. For similar reasons, we also reject the
Government’s alternative argument that every shareholder of Walgreens is a victim
for § 2B1.1(b)(2) purposes. See United States v. Carralero, 195 Fed. Appx. 874, 878-
79 (11th Cir. 2006) (unpublished per curiam) (affirming a § 2B1.1(b)(2) enhancement
based on 20 corporate victims, presumably credit-card issuers, where the defendant
possessed 112,000 unauthorized credit card numbers).
For these reasons, we find that the district court erred in counting each
Walgreens store as a separate victim for purposes of the § 2B1.1(b)(2) number-of-
victims enhancement. Absent a showing that the error was harmless, an error in
calculation of the sentencing guidelines requires remand. Mashek, 406 F.3d at 1015.
1
The Eleventh Circuit noted:
In particular, the record showed that Longo’s fraud and theft diminished
the total plan assets. The liquidation and eventual freezing of the plans’
assets also resulted in more direct problems for the individual plan
participants, especially retired individuals who used the money to pay
living expenses. For instance, one man was forced to return to the
workforce after his retirement, another had to get two jobs to make ends
meet, and a third had to borrow $ 10,000 to avoid losing his retirement
home.
Longo, 184 Fed. Appx. at 912.
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The Government argues that any sentencing error with respect to Peterson is harmless
because the district court stated with respect to Peterson’s sentence:
I’m saying that what I think is sufficient but not greater than necessary
sentence, which is the charge the district court is given, I think it’s 63
months, and to the extent that I have done a sword dance in accepting or
rejecting role, amount of loss, number of victims, I think 63 months is a
fair sentence under the Booker analysis and the Haack analysis.
The Government argues that the guidelines calculation error is harmless because “it
is clear from the record that the district court would have given the defendant the same
sentence regardless of which guidelines range applied.” United States v. Staples, 410
F.3d 484, 492 (8th Cir. 2005). However, we have held that a statement by a district
court such as the one above is not detailed enough to support a finding of harmless
error:
[W]here, as here, the sentencing court pronounces an identical alternative
sentence, not based on any alternative guidelines calculation but instead
intended to cover any and all potential guidelines calculation errors, the
sentencing court effectively has ignored the requirement of Haack to
“first determine the appropriate guidelines sentencing range” for the
alternative sentence. We cannot make a finding of harmless error where
the identical alternative sentence was not based on a correctly calculated
advisory guidelines range.
Our conclusion is supported by the fact that the absence of an
identifiable advisory guidelines range for the alternative sentence thwarts
our review of the sentence for reasonableness. Because a sentence
within the properly calculated guidelines range is presumptively
reasonable, a correctly calculated guidelines range is the necessary
starting point for assessing the reasonableness of a variance.
United States v. Bah, 439 F.3d 423, 431-32 (8th Cir. 2006) (internal citations omitted);
see also Rita v. United States, 551 U.S. ---, No. 06-5754, slip op. at 7 (June 21, 2007)
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(holding that “a court of appeals may apply a presumption of reasonableness to a
district court sentence that reflects a proper application of the Sentencing
Guidelines”).
Thus, to support a finding of harmless error, the record clearly must show not
only that the district court intended to provide an alternative sentence, but also that the
alternative sentence is based on an identifiable, correctly calculated guidelines range.
Here, the district court did not determine an alternative guidelines range without the
disputed number-of-victims enhancement and explain a variance from it based on
§ 3553(a) factors, but rather it made a blanket statement that 63 months is a “fair”
sentence. Such a statement cannot provide the basis for a finding of harmless error.
Furthermore, the remainder of the record indicates the district court did not
intend to pronounce the same sentence if the § 2B1.1(b)(2) enhancement was rejected
on appeal. In fact, the district court explicitly disavowed such an intent later in the
record in response to the Government’s request for an alternative sentence if
§ 2B1.1(b)(2) was found not to apply:
I’m gonna leave the sentence at 63 months based upon the guideline–the
advisory guideline and the other 3553(a) factors. So I think the record
is solid here that the number of victims, the amount of the loss, her
criminal history category is not in dispute, so I’m going to stay with what
the Court has made a record on.
This statement indicates that the district court based its 63-month sentence on the
advisory guidelines range as determined by the record before the court, which
included the miscalculated number of victims. For these reasons, we conclude that the
guidelines miscalculation does not constitute harmless error.
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III. CONCLUSION
Accordingly, we vacate the sentences of all three appellants and remand to the
district court for resentencing.
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