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United States v. Castillo

United States Court of Appeals, Fifth Circuit

February 26, 2015

UNITED STATES OF AMERICA, Plaintiff - Appellee
v.
ARMELINDA CASTILLO, also known as Irma Castillo, Defendant - Appellant

Appeal from the United States District Court for the Northern District of Texas.

For UNITED STATES OF AMERICA, Plaintiff - Appellee: Brian W. McKay, Esq., Assistant U.S. Attorney, James Wesley Hendrix, Assistant U.S. Attorney, U.S. Attorney's Office, Northern District of Texas, Dallas, TX.

For ARMELINDA CASTILLO, also known as Irma Castillo, Defendant - Appellant: Mark Whitney McBrayer, Esq., Crenshaw, Dupree & Milam, L.L.P., Lubbock, TX.

Before BENAVIDES, PRADO, and GRAVES, Circuit Judges. JAMES E. GRAVES, JR., Circuit Judge, concurring in part and dissenting in part.

OPINION

Page 319

FORTUNATO P. BENAVIDES, Circuit Judge

This is a direct criminal appeal in which Appellant Armelinda Castillo (" Castillo" ) challenges only her sentence. Castillo contends that the district court erred in failing to reduce her offense level for acceptance of responsibility pursuant to U.S.S.G. § 3E1.1(b). We vacate her sentence and remand the case to allow the district court to determine in the first instance whether her challenge to the amount of funds stolen was made in good faith.

I. BACKGROUND

Castillo was employed by Westex Federal Credit Union (" WFCU" ) in Lubbock, Texas. Beginning in April of 2009 and continuing until April 2012, she embezzled cash from WFCU's vault. Castillo pleaded guilty to misapplication of bank funds in excess of $1,000 by a bank employee in violation of 18 U.S.C. § 656.

Pursuant to U.S.S.G. § 2B1.1(a)(1)(A) & (B), the base offense level was 7. The Presentence Report (" PSR" ) provided that Castillo had stolen $690,000, and thus added 14 levels because the amount of funds stolen exceeded $400,000, but was less than $1,000,000. U.S.S.G. § 2B1.1(b)(1)(H). Pursuant to U.S.S.G. § 3E1.1(a), the PSR recommended a two-level reduction for acceptance of responsibility based on Castillo's timely guilty plea that permitted the government to avoid preparing for trial. PSR ¶ 28. The PSR further provided that at sentencing, the " government will formally move the Court to grant the additional 1-level reduction" for acceptance of responsibility pursuant to § 3E1.1(b). Id. The government had no objections to the PSR. Castillo, however, filed written objections, denying that she had confessed to taking $690,000. Instead, she claimed that the " evidence only establishes by a preponderance that the amount was greater than $70,000 but less than $120,000." Thus, she argued that the offense level should only be increased by 8 levels pursuant to § 2B1.1(b)(1)(E).

On August 30, 2013, at the sentencing hearing, Castillo disputed the government's allegation that she had stolen $690,000, and called witnesses to support her contention that she had stolen less than $120,000.[1] Castillo testified that although she was not sure exactly how much

Page 320

money she had stolen, it was " nowhere near" $690,000. After the district court found by preponderance of the evidence that the amount of loss was $690,000, the government declined to move for the additional one-level reduction in the offense level under § 3E1.1(b), stating that " it's the United States' opinion that we have, in essence, been taken to the task of trial. We have saved no effort, no judicial resources. We have spent a day in court discussing the loss amount." Castillo objected, stating that she had accepted responsibility by pleading guilty and willingly talking to the bank investigator and the police. Castillo claimed that she took " responsibility for [the amount of money] she believe[d] she actually took." The district court expressly agreed with the government and denied the additional, one-level reduction for acceptance of responsibility under § 3E1.1(b).

At the time of Castillo's sentencing, this Court had held that the government's decision to refuse to move for the additional reduction under § 3E1.1(b) was reviewable on appeal only to determine whether the refusal to so move was based on an unconstitutional motive or was not reasonably related to a legitimate government end. United States v. Newson, 515 F.3d 374, 378 (5th Cir. 2008), abrogated by United States v. Palacios, 756 F.3d 325 (5th Cir. 2014) (per curiam). Additionally, this Court had concluded that the defendant's refusal to waive his appellate rights was a proper basis for the government to refuse to move for an additional reduction in offense level because it was rationally related to the purpose of § 3E1.1 and is not an unconstitutional motive. Id.

After Castillo had filed a notice of appeal, Amendment 775 to the sentencing guidelines became effective on November 1, 2013. U.S. Sentencing Guidelines Manual app. C, Amendment 775 (Nov. 1, 2013). Amendment 775 resolved a circuit split regarding whether a defendant's refusal to waive his right to appeal was an interest identified in § 3E1.1 such that the government could rely on it to decline to move for the offense-level reduction under § 3E1.1(b). Amendment 775 provides that the " government should not withhold [a § 3E1.1(b)] motion based on interests not identified in § 3E1.1, such as whether the defendant agrees to waive his or her right to appeal." In a footnote in its brief, the government recognized the amendment, but asserted that it was inapplicable because it became effective months after Castillo's sentencing. The government further argued that, even if it was a clarifying (as opposed to substantive) amendment, it would not preclude the government's refusal to move for a reduction because the commentary expressly discusses efficient allocation of resources by the government and the court.

Subsequently, however, on February 27, 2014, the government filed a Federal Rule of Appellate Procedure Rule 28(j) letter in this Court noting that the Solicitor General had taken a contrary position before the Supreme Court, conceding that Amendment 775 is a clarifying amendment. Thus, Castillo is entitled to the benefit of the amendment even though it was not in effect at the time of her sentencing. In the Rule 28(j) letter, the government nonetheless stated that Castillo's sentence should be affirmed regardless of whether Amendment 775 is clarifying or substantive. As the government points out, Castillo was not denied the reduction because she refused to waive her appellate rights. Instead, the government refused to move for the one-level reduction because her objection to the amount of loss " required the government to prove the full scope of her offense in a day-long hearing and evidenced a lack of complete acceptance of responsibility for her offense." Thus, the

Page 321

government argues that the reason for the refusal was based on interests identified in § 3E1.1, which is what is required by Amendment 775.

On May 21, 2014, this Court, relying on Amendment 775, issued an opinion holding that the government cannot withhold a sentence reduction for acceptance of responsibility based on the defendant's refusal to waive his right to appeal. Palacios, 756 F.3d at 326. In a footnote, this Court explained that all active judges had assented to the opinion and that the en banc Court therefore concluded that " Newson -- to the extent it may constrain us from applying Amendment 775 to cases pending on direct appeal under our rule of orderliness--is abrogated in light of Amendment 775." Id. at 326 n.1.[2] We now ...


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