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United States v. Byors

October 29, 2009

UNITED STATES OF AMERICA, APPELLEE,
v.
JOHN BYORS, DEFENDANT-APPELLANT.



SYLLABUS BY THE COURT

Defendant-appellant John Byors appeals from a judgment of the United States District Court for the District of Vermont (William K. Sessions, III, Chief Judge) sentencing him principally to 135 months' incarceration following his guilty plea to sixteen counts of mail fraud, wire fraud, travel fraud, bank fraud, and money laundering. On appeal, defendant argues that the District Court erred procedurally by miscalculating his sentencing range under the United States Sentencing Guidelines. Specifically, he alleges that the District Court erred in (1) not offsetting the loss attributable to his fraud by amounts that represented legitimate investment in his business and (2) applying a two-level enhancement for obstruction of justice. We hold that a defendant is not entitled to an offset against a loss based on business expenses that confer no benefit upon the victims. We further hold, on an issue of first impression in this Circuit, that Application Note 2(C) to section 2S1.1 of the Guidelines does not preclude an enhancement for obstruction of justice pursuant to section 3C1.1 of the Guidelines where a defendant's obstruction relates to an offense underlying a money laundering offense but not to the money laundering offense itself. Accordingly, we affirm the judgment of the District Court.

The opinion of the court was delivered by: JOSÉ A. Cabranes, Circuit Judge

Argued: October 9, 2009

Before: CABRANESand LIVINGSTON, Circuit Judges, KORMAN, District Judge.*fn1

Defendant-appellant John Byors ("Byors" or "defendant") appeals from a judgment of the United States District Court for the District of Vermont (William K. Sessions III, Chief Judge) sentencing him principally to 135 months' incarceration following his plea of guilty to sixteen counts of mail fraud, wire fraud, travel fraud, bank fraud, and money laundering. On appeal, defendant argues that the District Court erred procedurally by miscalculating his sentencing range under the United States Sentencing Guidelines ("U.S.S.G." or the "Guidelines"). Specifically, he argues that the District Court erred in (1) not offsetting the loss attributable to his fraud by legitimate business expenditures and (2) applying a two-level enhancement for obstruction of justice. Whether an enhancement is appropriate where a defendant has obstructed the investigation or prosecution of an underlying offense but has not obstructed the investigation or prosecution of a subsequent money laundering offense is an issue of first impression in this Circuit.

BACKGROUND

Defendant's conviction arises from his efforts to raise capital for a marble business based in Vermont.As part of those efforts, defendant made misrepresentations to investors about the value of the assets securing their loans, including the value of marble blocks and his rights under a lease of a quarry; purported orders to purchase marble by developers in the Middle East; his ownership of a patent for a process of turning marble chips into marble blocks;and the return the investors would realize on their investment. Furthermore, contrary to his representations to investors that their money would be used for business-related purposes, defendant used substantial amounts of the borrowed funds to make down payments on houses in Florida and Maine, to purchase automobiles and horses, and for a variety of other personal expenditures.

After several months of investigation by the Internal Revenue Service and the Federal Bureau of Investigation, defendant was arrested on December 20, 2005, on a criminal complaint charging him with bank fraud. He was released on bond and under conditions that required, among other things, that he obtain approval from Pretrial Services before requesting or applying for a personal or business loan.

Notwithstanding his conditions of release, on December 29, 2005, defendant borrowed $50,000 from Germaine Bourdeau ("Bourdeau"), a person who had loaned him money in the past. At the defendant's request, the money was transferred by a check made payable to Robert Byors, defendant's uncle, and deposited into a checking account that defendant had opened in his uncle's name.Defendant told Bourdeau that the loan was for legal fees but proceeded to use the majority of the funds for other expenditures.

In mid-February 2006, defendant called Robert Byors to ask him to come to Vermont to testify that he, and not defendant, was in charge of the checking account that defendant had opened. Robert Byors refused. Later that same month, defendant asked his wife to convince Bourdeau to tell law enforcement that his $50,000 loan to defendant was for legal fees and personal expenses.

On April 13, 2006, defendant was indicted for mail fraud, wire fraud, bank fraud, travel fraud, money laundering, and contempt of court. He negotiated a plea agreement with the government, but before he could enter a plea, the government withdrew its offer after learning that defendant was continuing to solicit money from investors while he was incarcerated. A Superseding Indictment and a Second Superceding Indictment were subsequently issued, and on March 4, 2008, defendant pleaded guilty to sixteen counts of fraud and money laundering as charged in the Second Superseding Indictment.

Defendant was sentenced by Judge Sessions on September 22, 2008. At the sentencing hearing, Judge Sessions adopted, over defendant's objection, the findings from the Presentence Report that the loss attributable to defendant's fraud was over $9 million and that defendant attempted to obstruct justice by tampering with witnesses. Those findings resulted in a twenty-level sentence enhancement based on the amount of the loss pursuant to U.S.S.G. § 2B1.1(b)(1)(K) and a two-level enhancement for obstruction of justice pursuant to U.S.S.G. § 3C1.1. With those enhancements, defendant's sentence range under the Guidelines was 135 to 168 months. Judge Sessions imposed a sentence of 135 months' incarceration and five years'supervised release. Defendant appeals that sentence.

DISCUSSION

Following United States v. Booker, 543 U.S. 220 (2005), a district court has broad latitude to "impose either a Guidelines sentence or a non-Guidelines sentence." United States v. Sanchez, 517 F.3d 651, 660 (2d Cir. 2008); see also United States v. Cavera, 550 F.3d 180, 189 (2d Cir. 2008) (en banc). Accordingly, the role of the Court of Appeals is limited to examining a sentence for reasonableness, which is akin to review under an "abuse of discretion" standard. See Cavera, 550 F.3d at 187-88; see also Gall v. United States, 552 U.S. 38, 128 S.Ct. 586, 591 (2007) ("[C]courts of appeals must review all sentences-whether inside, just outside, or significantly outside the Guidelines range-under a deferential abuse-of-discretion standard."); cf. Sims v. Blot, 534 F.3d 117, 132 (2d Cir. 2008) ("A district court has abused its discretion if it based its ruling on an erroneous view of the law or on a clearly erroneous assessment of the evidence or rendered a decision that cannot be located within the range of permissible decisions." (internal quotation marks, alteration, and citation omitted)). This standard applies "both to the [substantive reasonableness of the] sentence itself and to the procedures employed in arriving at the sentence." United States v. Verkhoglyad, 516 F.3d 122, 127 (2d Cir. 2008) (internal quotation marks omitted). ...


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