United States v. Kumar, Docket Nos. 06-5482-cr(L), 06-5654-cr (CON) (2d Cir. Aug. 12, 2010) (found here)
This decision is the appeal of the convictions sustained by Sanjay Kumar and Stephen Richards in the Computer Associates. Here's the Second Circuit's opening paragraph:
Appeal by Defendants from separate judgments entered in the United States District Court for the Eastern District of New York (I. Leo Glasser, Judge), following guilty pleas by Defendants to several counts of conspiracy, securities and wire fraud, obstruction of justice, and perjury. We hold that Richards’s guilty plea was not constitutionally infirm and that he was properly charged with, and convicted on his guilty plea to, obstruction of justice. We therefore AFFIRM Richards’s judgment of conviction in all respects. We further conclude that the use of the Sentencing Guidelines in effect at the time of sentencing to calculate Defendants’ Guidelines ranges for their fraud offenses, rather than the Guidelines in effect at the time of the commission of those offenses, did not violate the Ex Post Facto clause. We further conclude that the district court properly calculated the loss amount underlying Defendants’ monetary fines and that the district court did not abuse its discretion by denying Kumar an acceptance of responsibility credit in determining his Guidelines range. We further conclude that the district court erroneously failed to award Richards a two-point reduction for acceptance of responsibility. Thus, we AFFIRM Kumar’s sentence in all respects and VACATE Richards’s sentence and REMAND for resentencing.
Now that the end of the story is known, let's dig a little deeper into the details.
Did the Sentence Violate the Ex Post Facto Clause?
Kumar and Richards contended that application of the 2005 Guidelines book to their fraud offenses -- which were completed in 2000 -- violated the ex post facto clause. The Second Circuit found the claim to be without merit.
More specifically, the Second Circuit found that "there is no question that application of the 2005 Guidelines disadvantaged the defendants by subjecting them to the higher ranges of the 2005 Guidelines compared to the 1998 version of the Guidelines." The only question with which the Second Circuit had to deal was "whether application of the 2005 Guidelines" -- using the one book rule because certain of the offenses were grouped together but took place at different times -- "to the defendants's sentences was 'retrospective'" -- a question on which the court had "previously reserved ruling." In a nutshell, the Second Circuit concluded that the "one-book" rule does not violate the ex post facto clause, at least as applied to a series of similar offenses (like those in this matter).
Was the Loss Calculation Clearly Erroneous?
Loss was sharply disputed between the defense and the government. The most significant area of disagreement centered on how to properly frame the economic impact of certain conduct for which they pled guilty. The district court held a Fatico hearing, and questioned the experts for both the defense and the government. Ultimately, the district court accepted the government's calculation (as expressed through its expert). The Second Circuit was not persuaded that the district court's reliance on this loss analysis was "clearly erroneous."
Because district court's have such leeway in determining loss, it's often difficult to challenge a loss calculation on appeal. After all, a sentencing court is not required to calculate loss with precision. Instead, it need only make a reasonable estimate of loss. And since district courts have the evidence in front of them, appellate courts find that their loss determinations are entitled to a high level of deference.
Since losses in financial fraud cases so often are the driving force behind any Guidelines calculation, though, perhaps district court loss calculations should be held to a higher standard and subjected to a more rigorous appellate review.
Were the Defendants Properly Denied Acceptance of Responsibility Credit?
The defendants pled guilty. But they got no credit whatsoever for acceptance of responsibility (neither a 2 nor 3 level reduction in offense level).
For Kumar, the district court found that he obstructed justice and waited until the eve of trial before pleading guilty, and therefore was not entitled to any acceptance of responsibility credit. The Second Circuit rejected Kumar's argument that he was entitled to that credit, finding that it needn't resolve any of the flaws identified by Kumar on appeal "because an examination of the record shows that he engaged in sufficient objectionable post-indictment conduct to justify a rejection of his request for acceptance of responsibility credit. Specifically, Kumar . . . acted in ways that the district court reasonably found to be inconsistent with a full acceptance of responsibility." Read the decision for the details, but suffice it to say that deference to the district court played a large role in this appellate loss.
Richards is another story. The district court relied on a single factor in denying acceptance of responsibility points -- the lateness of his plea. Timeliness is an appropriate consideration for acceptance of responsibility. The two-level reduction provided for in U.S.S.G. § 3E1.1(a) is for demonstration of acceptance of responsibility. By contrast, the Guidelines specifically provide that timeliness of a plea is primarily relevant to the reduction of an additional point under U.S.S.G. § 3E1.1(b). Here, the lateness of Richards' plea was not a sufficient reason to totally reject acceptance of responsibility points. Thus, the Second Circuit remanded for resentencing. Richards will get his two points. But it likely won't take much (if anything) off of his seven year sentence which itself was a non-Guidelines sentence (a variance from the life sentence recommended by the Guidelines).