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United States v. Cooper

United States Court of Appeals, District of Columbia Circuit

March 30, 2018

United States of America, Appellee
Gary Cooper, Appellant

          Argued February 16, 2018

          Appeal from the United States District Court for the District of Columbia (No. 1:15-cr-00147-3)

          Jonathan Zucker, appointed by the court, argued the cause and filed the briefs for the appellant.

          Rachel E. Timm, Trial Attorney, United States Department of Justice, argued the cause for the appellee. Vincent J. Falvo, Jr., Trial Attorney, was with her on brief.

          Before: Henderson and Tatel, Circuit Judges, and Williams, Senior Circuit Judge.


          Karen LeCraft Henderson, Circuit Judge

         Gary Cooper (not that one) was convicted of five counts for his role in a scheme to steal from a labor union. Counts One and Two both charged conspiracy under 18 U.S.C. § 371. Count One alleged a conspiracy to embezzle money from the union. Count Two alleged a conspiracy to pay off the union official who embezzled the money. At sentencing, the district court enhanced Cooper's offense level for Count Two-the count that dictated his overall offense level-under section 2E5.1(b)(1) of the United States Sentencing Guidelines (U.S.S.G. or Guidelines).[1] Section 2E5.1(b)(1) applies "[i]f the defendant was a fiduciary of" the victim union. The court sentenced Cooper to 68 months in prison on Count Two. It also sentenced him to 68 months on each of the other counts, with all terms to run concurrently.

         Cooper appeals, advancing three claims. First, he argues that the two alleged conspiracies were in fact one. As a result, he contends, his conviction on either Count One or Count Two must be vacated as multiplicitous. Second, he urges us to vacate all of his sentences because, in his view, they rest on an erroneous application of section 2E5.1(b)(1). Third, Cooper points out that a prison term for conspiracy cannot exceed section 371's five-year maximum-a restriction he says the district court violated in imposing a 68-month sentence on each conspiracy count. Finding merit in Cooper's claims, we vacate his sentences and remand for resentencing. On remand, the district court's first step will be to decide, in its discretion, which one of the multiplicitous convictions should be vacated. See Ball v. United States, 470 U.S. 856, 864-65 (1985).

          I. BACKGROUND

         Cooper's convictions and sentences followed one year of pretrial litigation, an eight-day jury trial and a thorough sentencing process. We recite only the background necessary to resolve Cooper's claims of multiplicity and sentencing errors.

         A. Indictment

         "Charg[ing] the same offense in more than one count"- "a problem known as multiplicity"-is "a defect[] in the indictment." United States v. Weathers, 186 F.3d 948, 951, 953 (D.C. Cir. 1999) (internal quotations omitted); see United States v. Harris, 959 F.2d 246, 250-51 (D.C. Cir. 1992) (per curiam), abrogated on other grounds as recognized by United States v. Stewart, 246 F.3d 728, 730-32 (D.C. Cir. 2001); see also Fed. R. Crim. P. 12(b)(3)(B)(ii). We therefore begin with the indictment against Cooper and his codefendants. It alleged as follows.

         Generally. Laborers International Union of North America, Local 657 (Union) is a labor union in Washington, D.C. It represents construction workers. Under the Union's constitution and bylaws, each Union officer is a fiduciary who can spend the Union's money only for the Union's benefit.

         Anthony Frederick was a Union officer and thus a fiduciary. Christopher Kwegan and Gary Cooper owned STS General Contracting, Inc. (STS), a Maryland construction company. Kwegan and Cooper were signatories to STS's bank account, which they opened in May 2013.

         Count One. According to Count One, Frederick, Kwegan and Cooper-"together and with others known and unknown to the grand jury"-violated 18 U.S.C. § 371 by agreeing to commit an offense under 29 U.S.C. § 501.[2] Joint Appendix (JA) 28. From about April 2013 through about June 2014, the defendants conspired to embezzle Union money, secretly causing the Union to pay STS some $1.7 million "for uses other than for the benefit of [the Union] and its members." JA 28-29. Specifically, the defendants caused the Union to pay STS about $1.1 million for less than $100, 000 of renovations to the Union's hall. And they caused the Union to pay STS nearly $600, 000 in "exorbitant fee[s]" "to expedite building permits" for the Union's training center. JA 29. Frederick made the payments in installments. Kwegan and Cooper deposited the proceeds into STS's bank account.

         Count Two. According to Count Two, Frederick, Kwegan and Cooper-"and other persons both known and unknown to the [g]rand [j]ury"-violated 18 U.S.C. § 371 by agreeing to commit an offense under 29 U.S.C. § 186.[3] JA 34. From about April 2013 through about June 2014, the defendants conspired to make unlawful payments in cash and in kind to Frederick. The payments included a $225, 000 down payment on a house for Frederick and his wife; construction of a three-car garage at the house; and $8, 000 via cashier's check. The money came from the same STS bank account into which Kwegan and Cooper had deposited the embezzled Union funds.

         Other counts. Cooper was also charged in Counts Three, Fourteen and Twenty-One. Count Three charged Frederick, Kwegan and Cooper with defrauding the Union "by means of wire communications"-in the process depriving the Union of property and Frederick's honest services-in violation of 18 U.S.C. §§ 2, 1343 and 1346. JA 43. The gravamen of the fraud scheme, according to Count Three, was that Kwegan and Cooper secretly paid Frederick "bribes and kickbacks . . . in return for favorable action" on their overpriced renovations and bogus fees, thereby "caus[ing] the expenditure of more than $1.70 million" of Union money. JA 40. Counts Fourteen and Twenty-One charged Cooper with laundering the proceeds of the scheme in violation of 18 U.S.C. § 1957.

         B. Motion To Dismiss And Trial

         Cooper pleaded not guilty. Before trial, he moved to dismiss Counts One and Two as multiplicitous. Alternatively, he argued that the government should be required to elect only one conspiracy count on which to proceed. The district court "defer[red] ruling . . . until after [the] verdict." JA 74; see JA 70-71 ("[I]t's perfectly acceptable to deal with that issue after trial, if there are convictions, and that's what I'll do.").

         Frederick and Kwegan pleaded guilty. Kwegan testified at Cooper's trial. He explained some of the mechanics of the scheme and the ways in which he, Frederick and Cooper tried to conceal it. He admitted that STS funded the down payment on Frederick's house using embezzled Union money. Indeed, Kwegan characterized the down payment as a "kickback" to Frederick. Supplemental Appendix (SA) 118. He also noted that Frederick bought the house from Dennis Laskin, an acquaintance of Kwegan. According to Kwegan, Laskin actively helped the defendants hide the fact that they used embezzled Union money to finance Frederick's purchase.

         The jury found Cooper guilty on all five counts. After trial, Cooper did not remind the district court of his pending motion to dismiss the conspiracy counts as multiplicitous nor did the court rule on the motion.

         C. Sentencing

         At sentencing in Frederick's and Kwegan's cases, the district court issued a "Notice" "conclud[ing] that the guideline applicable to Count II-§ 2E5.1-produce[d] the highest offense level" for any count of conviction and thus "govern[ed]" the overall offense level for both Frederick and Kwegan. JA 116-17. Adopting that analysis, the probation office in Cooper's case prepared a presentence report (PSR) that used "the guideline applicable to Count Two, " section 2E5.1, to calculate Cooper's governing offense level. PSR ¶ 46. The PSR calculated a base offense level of 10 and assessed 17 levels of enhancements not here in dispute. The PSR also recommended a two-level enhancement under "USSG §§ 2E5.1(b)(1) and 2X2.1" because Cooper "is considered an aider and abettor to Mr. Frederick, who was a fiduciary of the labor organization." PSR ¶ 50. Based on Cooper's criminal record, the PSR calculated a criminal history category of II. Taking that calculation together with Cooper's offense level of 29, the PSR computed an advisory Guidelines range of 97 to 121 months in prison.

         In his sentencing memorandum and at the sentencing hearing, Cooper did not dispute that Count Two, and therefore section 2E5.1, yielded the highest offense level for any count of conviction and controlled his overall Guidelines range. But he objected to the two-level enhancement under section 2E5.1(b)(1), which applies if "the defendant" was a fiduciary of the victim union. Cooper pointed out that he, the defendant, was not a Union fiduciary. The government responded that Cooper aided and abetted Frederick, "the principal, " who "very clearly [had] a fiduciary duty" to the Union. JA 126. The government argued that the enhancement applied because, under the aiding and abetting statute, Cooper was punishable as a principal. Id. (citing 18 U.S.C. § 2).

         The district court overruled Cooper's objection. Relying on its earlier Notice, the court concluded that section 2E5.1 governed Cooper's overall offense level. JA 120. Agreeing with the PSR, the court ...

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