United States v. Domonic McCarns , 900 F.3d 1141 ( 2018 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, Nos. 16-10410
Plaintiff-Appellee, 17-10016
v. D.C. No.
2:08-cr-00116-KJM-5
DOMONIC MCCARNS,
Defendant-Appellant. OPINION
Appeals from the United States District Court
for the Eastern District of California
Kimberly J. Mueller, District Judge, Presiding
Argued and Submitted July 10, 2018
San Francisco, California
Filed August 21, 2018
Before: Susan P. Graber and Richard C. Tallman, Circuit
Judges, and Ivan L.R. Lemelle, * Senior District Judge.
Opinion by Judge Lemelle
*
The Honorable Ivan L.R. Lemelle, Senior United States District
Judge for the Eastern District of Louisiana, sitting by designation.
2 UNITED STATES V. MCCARNS
SUMMARY **
Criminal Law
The panel affirmed a conviction and sentence for
conspiracy to commit mail fraud.
Rejecting the defendant’s contention that the district
court failed to comply with the Speedy Trial Act, the panel
held that the district court’s references to Eastern District of
California local codes – which correspond to the factors set
forth in 18 U.S.C. § 3161(h)(7)(B) – sufficiently explain the
district court’s reasons for its findings that the “ends of
justice” were served by granting continuances.
Because any error was harmless, the panel did not reach
the question of whether the district court erred when it
increased the defendant’s Sentencing Guidelines offense
level for being a manager or supervisor pursuant to U.S.S.G.
§ 3B1.1(b). The panel held that the defendant’s Guidelines
sentence is necessarily 240 months because the 240-month
statutory maximum for the defendant’s offense is less than
the minimum of the applicable Guidelines range, regardless
of whether the § 3B1.1(b) enhancement applies.
The panel addressed other issues in a memorandum
disposition.
**
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
UNITED STATES V. MCCARNS 3
COUNSEL
Amitai Schwartz (argued), Law Offices of Amitai Schwartz,
Emeryville, California, for Defendant-Appellant.
Matthew G. Morris (argued) and Michael D. Anderson,
Assistant United States Attorneys; Camil A. Skipper,
Appellate Chief; McGregor W. Scott, United States
Attorney; United States Attorney’s Office, Sacramento,
California; for Plaintiff-Appellee.
OPINION
LEMELLE, Senior District Judge:
Domonic McCarns appeals his conviction and sentence
for conspiracy to commit mail fraud in violation of 18 U.S.C.
§ 1349. McCarns raises eight issues on appeal, including
that the district court failed to comply with the Speedy Trial
Act and that the district court erred at sentencing by
increasing McCarns’ offense level for being a manager or
supervisor. We address these two issues in this published
opinion and all other issues in an unpublished memorandum
disposition filed concurrently with this opinion. We affirm
McCarns’ conviction and sentence.
FACTUAL BACKGROUND AND PROCEDURAL
HISTORY
The scheme at the center of this case is as follows. Co-
defendant Charles Head established a trio of entities—one
that solicited distressed homeowners, one that recruited
straw buyers, and a third that obtained mortgages from
lenders. McCarns worked with the first entity as a
4 UNITED STATES V. MCCARNS
salesperson; his job was to convince homeowners to
participate in the scheme.
The scheme would identify distressed homeowners who
had equity in their homes. Salespeople, including McCarns,
would approach these homeowners with a proposal—sell
your home to an “investor” for one year, repair your credit
during that year by making monthly “rent” payments while
staying in your home, then repurchase your home at the end
of the year. The scheme was pitched as a way for distressed
homeowners to stay in their homes while regaining their
financial footing, but actually involved a series of fraudulent
transactions and regularly resulted in the victims losing their
homes.
The scheme accomplished its hidden agenda by
identifying “investors”—who were really straw buyers for
the defendants—to purchase the homes. The defendants
would create fraudulent loan applications for the straw
buyers, allowing them to secure mortgages for up to 100%
of the value of the victims’ homes. When a lender issued a
mortgage, the defendants would pay off the victim’s original
mortgage, make a small upfront payment to the victim, pay
a fee to the straw buyer, and keep the remainder of the
proceeds. This series of transactions allowed the defendants
to extract the equity that had accumulated in the victims’
homes and essentially left the victims as renters. If the
victims missed “rent” payments, the defendants would evict
them and sell the property.
In February 2010, the Government filed a superseding
indictment charging McCarns with one count of conspiracy
UNITED STATES V. MCCARNS 5
to commit mail fraud. 1 One of McCarns’ co-defendants was
Charles Head, the leader of the scheme. Head was charged
with conspiracy to commit mail fraud and mail fraud. 2 Prior
to trial, McCarns filed a motion to dismiss the charges
against him for violation of the Speedy Trial Act. The
motion was denied. McCarns and Head proceeded to a jury
trial and were convicted on all counts in December 2013. On
September 21, 2016, McCarns was sentenced to 168 months
of imprisonment, followed by 36 months of supervised
release. McCarns was later ordered to pay $4.9 million in
restitution, pursuant to a stipulation agreed to by McCarns
and the Government. McCarns timely filed two notices of
appeal, one after sentencing and the other after the order of
restitution.
JURISDICTION AND STANDARD OF REVIEW
The district court had jurisdiction pursuant to 18 U.S.C.
§ 3231. We have appellate jurisdiction pursuant to
28 U.S.C. § 1291.
“We review the district court’s interpretation and
application of the Speedy Trial Act de novo . . . .” United
States v. Medina, 524 F.3d 974, 982 (9th Cir. 2008). We
review a district court’s interpretation of the Sentencing
Guidelines de novo, its factual findings for clear error, and
1
McCarns was initially indicted in March 2008.
2
The Government had previously indicted Head and McCarns,
along with other co-defendants, in February 2008 on separate charges of
conspiracy to commit mail fraud, mail fraud, and conspiracy to commit
money laundering. Those charges related to a similar scheme, also
orchestrated by Head, that was executed immediately before the scheme
presently at issue. The charges against McCarns in the earlier case were
dismissed after McCarns was sentenced in this case.
6 UNITED STATES V. MCCARNS
its application of the Guidelines to the facts of the case for
abuse of discretion. United States v. Gasca-Ruiz, 852 F.3d
1167, 1170 (9th Cir.) (en banc), cert. denied, 138 S. Ct. 229(2017).
I. SPEEDY TRIAL ACT
The Speedy Trial Act requires that a defendant’s
criminal trial begin within seventy days of the defendant
being charged. 18 U.S.C. § 3161(c)(1). But the Act also
allows for continuances under various circumstances,
including when the district court “find[s] that the ends of
justice served by [granting a continuance] . . . outweigh the
best interest of the public and the defendant in a speedy
trial.” Id. § 3161(h)(7)(A). The Act provides four factors
for the district court to consider when making the “ends of
justice” finding. Id. § 3161(h)(7)(B). The district court’s
“reasons for” its “ends of justice” finding must be “set[]
forth, in the record of the case, either orally or in writing,”
for the continuance to be excluded from the Act’s seventy-
day limit. Id. § 3161(h)(7)(A).
On three occasions before McCarns’ trial began, the
district court continued the trial by referring to local codes—
T2 and T4—which are defined in the Eastern District of
California’s General Order No. 479. 3 General Order No.
479 was issued “to facilitate the recording of excludable time
on the record” and defines local codes to correspond to
various provisions of the Speedy Trial Act. General Order
No. 479 (E.D. Cal. Oct. 15, 2009). T2 corresponds to
3
McCarns’ trial was continued more than three times, but McCarns
challenges only three continuances on appeal. Cumulatively, these three
continuances lasted longer than seventy days.
UNITED STATES V. MCCARNS 7
§ 3161(h)(7)(B)(ii), see id. at 3, which is relevant when a
case is notably “unusual or complex.” 4 T4 corresponds to
§ 3161(h)(7)(B)(iv), see General Order No. 479 at 3, which
is relevant when the parties need more time to retain counsel
or effectively prepare for trial. 5 Prior to trial, McCarns
moved to dismiss the indictment for violations of the Speedy
Trial Act. The district court denied McCarns’ motion to
dismiss, concluding that its explanations for the various trial
continuances satisfied the requirement in § 3161(h)(7)(A)
that the district court explain the reasons for its “ends of
justice” findings.
McCarns does not dispute that the three challenged
continuances were factually supported by the complexity of
the case and counsel’s need for more time to adequately
prepare. Instead, McCarns argues that the district court
failed to make the requisite “ends of justice” findings on the
record when it referred to local codes T2 and T4. McCarns
maintains that the district court’s references to the local
4
Section 3161(h)(7)(B)(ii) instructs a district court to consider
“[w]hether the case is so unusual or so complex, due to the number of
defendants, the nature of the prosecution, or the existence of novel
questions of fact or law, that it is unreasonable to expect adequate
preparation for pretrial proceedings or for the trial itself within the time
limits established by this section.”
5
Section 3161(h)(7)(B)(iv) instructs a district court to consider
“[w]hether the failure to grant such a continuance in a case which, taken
as a whole, is not so unusual or so complex as to fall within
[§ 3161(h)(7)(B)(ii)], would deny the defendant reasonable time to
obtain counsel, would unreasonably deny the defendant or the
Government continuity of counsel, or would deny counsel for the
defendant or the attorney for the Government the reasonable time
necessary for effective preparation, taking into account the exercise of
due diligence.”
8 UNITED STATES V. MCCARNS
codes in General Order 479 were only “reasons that could
support” the “ends of justice” findings.
McCarns’ argument fails because the Speedy Trial Act
only requires a district court to state “its reasons for finding
that the ends of justice served by granting of such
continuance outweigh the best interests of the public and the
defendant in a speedy trial.” 18 U.S.C. § 3161(h)(7)(A)
(emphasis added). A district court does not need to recite
specific statutory language to satisfy § 3161(h)(7)(A) as
long as its reasoning is sufficient to justify excluding the
continuance from the Act’s seventy-day limit. See Medina,
524 F.3d at 985–86; United States v. Brickey, 289 F.3d 1144,
1150–51 (9th Cir. 2002), overruled on other grounds by
United States v. Contreras, 593 F.3d 1135, 1136 (9th Cir.
2010) (en banc); United States v. Ramirez-Cortez, 213 F.3d
1149, 1157 n.9 (9th Cir. 2000). A district court’s “discussion
of the statutory factors is adequate to support a continuance
that serves the ends of justice” when it is clear that the
district court “considered the factors in § 3161(h)([7])(B)
and determined that the continuance was merited based on”
the applicable factor or factors. Medina, 524 F.3d at 986. In
fact, because the Speedy Trial Act only requires a record of
the reasons for a continuance, “[d]istrict courts may fulfill
their Speedy Trial Act responsibilities by adopting stipulated
factual findings which establish valid bases for Speedy Trial
Act continuances.” 6 Ramirez-Cortez, 213 F.3d at 1157 n.9.
6
Nor must a district court put the requisite findings on the record
when it grants the continuance, it can do so later if and when a defendant
moves to dismiss the indictment for failure to comply with the Speedy
Trial Act. See Medina, 524 F.3d at 986. That being said, “the reasons
[later] stated must be the actual reasons that motivated the court at the
time the continuance was granted.” United States v. Engstrom, 7 F.3d
UNITED STATES V. MCCARNS 9
The district court’s references to the local codes, which
correspond to the § 3161(h)(7)(B) factors, sufficiently
explain the district court’s reasons for its “ends of justice”
findings. See Medina, 524 F.3d at 985–86. Each of the three
challenged continuances occurred at the end of a status
conference during which counsel for the parties described
the need to review voluminous discovery and then engage in
motions practice prior to trial. During the status
conferences, the court discussed the complexity of the case
and the parties’ need for more time for adequate preparation.
At the end of each conference, the district judge continued
the trial to a certain date and stated the local codes that
justified each continuance. The district court’s use of the
local codes creates an adequate record of the reasons for its
“ends of justice” findings because the local codes clearly
identify the statutory factors that the district court considered
when granting the continuances. See id.II. MANAGER OR SUPERVISOR ADJUSTMENT
“All sentencing proceedings are to begin by determining
the applicable Guidelines range.” United States v. Carty,
520 F.3d 984, 991 (9th Cir. 2008) (en banc). “The range
must be calculated correctly” because “the Guidelines are
the starting point and the initial benchmark, and are to be
kept in mind throughout the process.” Id. (internal citations
and quotation marks omitted). McCarns argues that the
district court erred when it increased his offense level by
three levels for being a manager or supervisor pursuant to
1423, 1426 (9th Cir. 1993) (internal quotation marks and citation
omitted).
10 UNITED STATES V. MCCARNS
U.S.S.G. § 3B1.1(b). 7 Normally, “[a] mistake in calculating
the recommended Guidelines sentencing range is a
significant procedural error that requires us to remand for
resentencing.” United States v. Munoz-Camarena, 631 F.3d
1028, 1030 (9th Cir. 2011) (per curiam). “However, if there
is a mistake made in the Guidelines calculation, harmless
error review does apply.” United States v. Leal-Vega,
680 F.3d 1160, 1170 (9th Cir. 2012); see also Munoz-
Camarena, 631 F.3d at 1030 & n.5.
We do not reach the question of whether the district court
erred when it increased McCarns’ offense level for being a
manager or supervisor because any error was harmless; the
district court correctly calculated the Guidelines sentencing
range. McCarns does not dispute that his criminal history
category was V. See McCarns’ offense level would have
been 35 without the 3-level adjustment for being a manager
or supervisor. 8 The Guidelines sentencing range for a
defendant with a criminal history category of V and an
offense level of 35 is 262 to 327 months of imprisonment.
See U.S.S.G. § 5A. With the 3-level adjustment, McCarns’
offense level was 38. The Guidelines sentencing range for a
defendant with a criminal history category of V and an
offense level of 38 is imprisonment for 360 months to life.
See id.
7
All citations are to the 2015 edition of the Guidelines, which was
used at McCarns’ sentencing.
8
McCarns challenged two other components of the Guidelines
calculation—the calculation of loss per U.S.S.G. § 2B1.1 and the upward
adjustment for targeting vulnerable victims per U.S.S.G. § 3A1.1(b)(1).
We affirmed the district court’s loss calculation and upward adjustment
for vulnerable victims in the unpublished memorandum disposition
issued concurrently with this opinion.
UNITED STATES V. MCCARNS 11
Ultimately, the difference between an offense level of 35
and an offense level of 38 does not affect the Guidelines
calculation because the statutory maximum sentence for
conspiracy to commit mail fraud is 240 months. See
18 U.S.C. §§ 1341, 1349. “Where the statutorily authorized
maximum sentence is less than the minimum of the
applicable guideline range, the statutorily authorized
maximum sentence shall be the guideline sentence.”
U.S.S.G. § 5G1.1(a). “For example, if the applicable
guideline range is 51–63 months and the maximum sentence
authorized by statute for the offense of conviction is
48 months, the sentence required by the guidelines under
[U.S.S.G § 5G1.1(a)] is 48 months; a sentence of less than
48 months would be a guideline departure.” Id. cmt.
Therefore, McCarns’ Guidelines sentence was 240 months
regardless of whether the manager or supervisor
enhancement was applied. Any error with respect to that
enhancement was therefore harmless. See cf. Munoz-
Camarena, 631 F.3d at 1030 & n.5.
Our conclusion is consistent with that reached by other
circuits that have encountered this same issue. See United
States v. Ramos, 739 F.3d 250, 253–54 (5th Cir. 2014)
(holding that sentencing error was harmless because, even if
error were corrected, the statutory maximum sentence would
remain the Guidelines sentence); United States v. Stotts,
113 F.3d 493, 499 (4th Cir. 1997) (same); United States v.
Rice, 43 F.3d 601, 608 n.12 (11th Cir. 1995) (same); see also
United States v. Kruger, 839 F.3d 572, 580–81 (7th Cir.
2016) (holding that district court did not plainly err because
there is no prejudice when statutory maximum sentence
would remain the Guidelines sentence if error were
corrected). Moreover, our conclusion is consistent with the
Supreme Court’s recent discussion in Koons v. United States
12 UNITED STATES V. MCCARNS
about the relationship between the Sentencing Guidelines
and statutory minimum sentences. 138 S. Ct. 1783 (2018).
In Koons, petitioners sought sentence reductions
pursuant to 18 U.S.C. § 3582(c)(2) because the United States
Sentencing Commission lowered the sentencing ranges that
applied to their crimes of conviction. Id. at 1786–88. But
when the petitioners were originally sentenced, “the
[district] court discarded the advisory ranges in favor of the
mandatory minimum sentences” because “the top end of the
Guidelines range fell below the applicable mandatory
minimum sentence.” Id. at 1787 (referring to U.S.S.G.
§ 5G1.1(b)). The Court held that the petitioners were not
entitled to sentence reductions because “the [district] court
scrapped the ranges in favor of the mandatory minimums,
and never considered the ranges again; as the [district] court
explained, the ranges dropped out of the case.” Id. at 1788.
The Court went on to explain that a key consideration when
assessing the role of the Guidelines at sentencing “is the role
that the Guidelines range played in the selection of the
sentence eventually imposed—not the role that the range
played in the initial calculation.” Id. at 1789.
The Court’s reasoning in Koons buttresses our
conclusion that any error in applying the manager or
supervisor enhancement was harmless because the district
court properly based McCarns’ sentence on the statutory
maximum. At sentencing, defense counsel argued that “the
20 year[] [statutory maximum] [wa]s where the court
need[ed] to start, not 360 to life.” The district court agreed,
explaining that it “do[es]n’t think about that guideline range
when there is a statutory maximum.” The district court
further disclaimed that the Guidelines range “d[id] not
inform [its] thinking in any way whatsoever.” As explained
in Koons, McCarns’ sentence was therefore based on the
UNITED STATES V. MCCARNS 13
statutory maximum, not the calculated Guidelines range.
See 138 S. Ct. at 1787–89.
AFFIRMED.