United States of America v.  Adel Habib Iskander

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
 UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v. No. 04-4188 
ADEL HABIB ISKANDER,
Defendant-Appellant. 
Appeal from the United States District Court
for the District of Maryland, at Baltimore.
Andre M. Davis, District Judge.
(CR-01-268-AMD)
Argued: March 18, 2005
Decided: May 9, 2005
Before WILKINSON and GREGORY, Circuit Judges, and
Frederick P. STAMP, Jr., United States District Judge
for the Northern District of West Virginia, sitting by designation.
Affirmed in part, vacated in part, and remanded by published opinion.
Judge Gregory wrote the opinion, in which Judge Wilkinson and
Judge Stamp joined.
COUNSEL
ARGUED: Rhonda Anne Anderson, Coral Gables, Florida, for
Appellant. Jonathan Mark Mastrangelo, Assistant United States Attor-
ney, OFFICE OF THE UNITED STATES ATTORNEY, Baltimore,
Maryland, for Appellee. ON BRIEF: Jennifer C. Smith, Assistant
United States Attorney, Baltimore, Maryland, for Appellee.

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OPINION
GREGORY, Circuit Judge:
This case arises out of an investigation of Adel Habib Iskander
("defendant" or "Iskander"). The United States ("government")
alleges he systematically skimmed cash receipts and corporate checks
received by two hotels he owned and operated, while simultaneously
paying no federal corporate or individual income tax. Iskander was
indicted, and after a three week trial, a jury found him guilty of three
counts of tax evasion and one count of structuring financial transac-
tions to evade reporting. The district court subsequently sentenced
Iskander to a term of imprisonment of forty-one months and ordered
him to pay a $800,000 fine. On appeal, Iskander challenges the dis-
trict court’s evidentiary rulings, the sufficiency of the evidence, and
his sentence. We find, after careful review, no reversible error in the
district court’s evidentiary rulings, and that the evidence in this case
was sufficient to support the convictions. However, in following
United States v. Hughes, 401 F.3d 540 (4th Cir. 2005), our recently
published opinion giving guidance to the application of United States
v. Booker, 125 S.Ct. 738 (2005), we find plain error in Iskander’s sen-
tencing, exercise our discretion to notice the error, vacate the sen-
tence, and remand to the district court for resentencing. Thus, we
affirm in part, vacate, and remand in part.
I.
Defendant was originally charged in a fifteen-count indictment
with conspiracy, tax evasion, and structuring currency transactions, in
violation of 18 U.S.C. § 371, 26 U.S.C. § 7201, and 31 U.S.C.
§ 5324(a)(3), respectively. A superseding indictment was filed one
month before trial, charging defendant and his wife, Cynthia Lafon
Iskander, with one count of conspiracy to structure transactions so as
to evade reporting requirements in violation of 31 U.S.C.
§ 5324(a)(3), and eleven counts of structuring financial transactions
to evade reporting requirements in violation of 31 U.S.C.
§ 5313(a)(3). The superseding indictment also charged Iskander indi-
vidually with three counts of tax evasion in violation of 26 U.S.C.
§ 7201. All the foregoing conduct allegedly occurred in 1994, 1995,
and 1996.
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During the relevant time period, Iskander controlled two corpora-
tions, Ocean Properties, Inc., and Fenwick Properties, Inc. ("Ocean
Properties" and "Fenwick Properties"), each of which operated a
hotel. For most times relevant to the indictment Iskander was the sole
shareholder of both companies. At trial the government alleged that
between 1993 and 1996 defendant deposited approximately $780,000
in currency into personal accounts under his control for his benefit
and the benefit of his family. The government provided evidence that
defendant and his wife at various times deposited approximately
$935,000 worth of corporate checks into personal investment
accounts they held with Merrill Lynch and T. Rowe Price. In further-
ance of the scheme, the government demonstrated, through bank
records, that Iskander systematically structured cash deposits to banks
to be under $10,000 to avoid the respective financial institutions’ fed-
eral currency transaction reporting requirements. During this time,
defendant reported no taxable income for either of the corporations,
or for himself individually — thus, zero tax was paid to the federal
government.
The government alleged that Iskander’s tax evasion scheme
involved skimming cash and credit card proceeds from both hotel
properties and under-reporting the gross receipts actually earned by
the two hotels — allowing him to conceal the diversion of funds. On
his corporate tax returns, defendant claimed that the two hotels were
losing money. In fact, he personally "wrote off" alleged loans he
made to one of the hotels based on an assertion that the investment
represented a "bad" (i.e., uncollectible) debt. At trial, the government
presented evidence showing that the gross receipts of the hotels
exceeded the amounts stated on defendant’s corporate tax returns by
hundreds of thousands of dollars — thus, showing that the hotels were
likely profitable and capable of repaying the alleged loans.
The government also provided evidence that Iskander attempted to
establish an explanation for the skimming and for hiding his tax eva-
sion scheme, by placing shareholder loan balances on the corporate
tax returns. Doing that allowed him to characterize the skimmed
receipts as non-taxable repayments of loans. According to the govern-
ment, these stated loan balances were patently false and the diverted
funds were taxable income.
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The government contended that Iskander was trained in business
and accounting in his native Egypt and taught business classes in
Egypt before emigrating to the United States. The government called
one of Iskander’s former hotel desk clerks, Sam Soliman ("Soliman"),
who testified that Iskander had told him that he had been trained as
an accountant. Iskander’s accountant, John Vardavas ("Vardavas"),
also testified that defendant rescinded a statement he had previously
made to Vardavas averring that defendant had been a CPA in Egypt.
The government also presented documentary evidence, in the form of
a Dun & Bradstreet report and an affidavit, listing defendant’s
employment history as an accountant and as a controller. The report
was admitted over defendant’s hearsay objections. In rebuttal, defen-
dant put forth testimony from Vardavas, who stated that defendant’s
record keeping skills were poor and that the records seized upon exe-
cution of the search warrant were incomplete and disorganized.
After a three week trial, a jury found Iskander guilty of three
counts of tax evasion and one count of structuring financial transac-
tions to evade reporting. Mrs. Iskander was acquitted.1 Iskander
timely filed this appeal.
II.
We review the district court’s decision as to admissibility of evi-
dence for abuse of discretion, and we will not find an abuse unless
a decision was "arbitrary and irrational." United States v. Weaver, 282
F.3d 302, 313 (4th Cir. 2002) (discussing abuse of discretion standard
in context of "decisions as to admissibility of evidence").
To prevail on a sufficiency of the evidence claim, Iskander must
show that when evidence is viewed in the light most favorable to the
government, see United States v. Stewart, 256 F.2d 231, 251 (4th Cir.
1At the close of the government’s case in chief, the trial court granted
Mrs. Iskander’s Motion for Judgment of Acquittal as to Count One of the
superseding indictment. As there were no unknown coconspirators
alleged, the trial court then granted defendant judgment of acquittal as to
the same conspiracy count. After deliberating, the jury acquitted Mrs.
Iskander on Counts 4, 5, 7, 9, and 10, and was unable to reach a verdict
on Counts 6, 8, 11, 12, and 13.
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2001), no "rational trier of fact could have found" beyond a reason-
able doubt, that he acted willfully, see Jackson v. Virginia, 443 U.S.
307, 319 (1979).
In light of the new sentencing scheme announced in Booker, we
state in Hughes that we will review Sixth Amendment sentencing
challenges, raised for the first time on appeal, under plain error analy-
sis. 401 F.3d at 547.
III.
Iskander challenges two evidentiary rulings made by the district
court and the sufficiency of the evidence. First, he argues that the dis-
trict court erred in excluding defendant’s evidence supporting his
defense,2 specifically by refusing to allow defendant’s expert to testify
about unclaimed depreciation deductions he alleges were available to
his hotels; defendant asserts that such testimony would have rebutted
both the government’s tax witness, who testified that the "bad-debt"
deductions taken on defendant’s personal tax returns were improper
and therefore taxable income, as well as the government’s evidence
that the appellant was a sophisticated accountant, and therefore "will-
fully" violated 26 U.S.C. § 7201 and 31 U.S.C. § 5324(a)(3). Second,
Iskander argues that the district court erred by admitting a Dun &
Bradstreet report that contained information regarding the defendant’s
educational background and employment history.3 Third, defendant
2Iskander argues that:
The trial court’s ruling "gutted" the Appellant’s case, stripping
him of the ability to confront the additional tax returns beyond
those charged in the indictment that the Government entered into
evidence in an effort to show that the Appellant acted "willfully."
As a result the trial court’s ruling was an abuse of discretion
because it failed to liberally interpret relevance, or permit the
Appellant to rebut that his under-reporting and/or improper bad
debt deductions were done willfully, in bad faith or with evil
intent.
Appellant’s Br. at 34.
3Relying on an affidavit provided by a Dun & Bradstreet custodian of
records, the district court allowed the government to introduce the report
as a business record pursuant to Fed. R. Evid. 803(6) and 902(11).
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contends that the government’s evidence was insufficient to support
the three tax evasion convictions.
In addition, Iskander makes two related challenges to his sentence.
First, he alleges that the district court did not make the required fac-
tual findings necessary to support the $800,000 fine imposed at sen-
tencing. Second, defendant asserts that under Blakely v. Washington,
124 S.Ct. 2531 (2004) and Booker, the district court’s sentence vio-
lated his right to a jury trial insofar as it rested on factual findings
made by the judge at the sentencing hearing. We address each of
defendant’s arguments in turn.
A.
Defendant contends that the district court abused its discretion in
excluding evidence that supported his defense. In an effort to rebut
the government’s expert, defendant retained an accounting expert,
Ivan B. Mehler ("Mehler"). The defense proffered, fourteen days into
trial, that Mehler’s testimony would show that Iskander had failed to
use the depreciation schedules to which he was entitled and "as a
result, utilizing any accounting or reconstruction method the govern-
ment preferred, no tax was owed." Appellant’s Br. at 23. According
to defendant, Mehler’s testimony would have shown that contrary to
the government’s assertions, "defendant was not cheating the IRS;
[he] was not a sophisticated accountant, and that any inaccuracies in
his tax returns had worked to his disadvantage more so than to the
IRS[’]." Id. at 24. Additionally, defendant contends that Mehler
would have testified and used summaries of the depreciation sched-
ules to show that the government overstated the income from the cor-
porations and would have demonstrated that "repayments of the
principal on loans or return of capital contributions are not, as the
Government’s theory alleged, taxable income that must be reported
on a tax return." Id.
The government objected to Mehler’s summaries, on grounds of
hearsay, relevance, and timeliness, and moved to exclude five of
them. The summaries were based on specific valuations of furnishings
and other property at the hotel. The district court found that portions
of the defendant’s expert testimony relating to the specific summaries
and details regarding the depreciation schedules were irrelevant and
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that the probative value of the challenged evidence was therefore out-
weighed by its potential to cause jury confusion.4 Specifically, the
court stated:
This whole question of depreciation it seems to me truly is
a red herring in this case.
. . . .
I fail to see the connection between depreciation that was
not taken on the corporate tax returns and the failure of the
defendant, if it was a failure, to declare on the tax returns
that were filed income taken from the corporations.
J.A. 1302, 1304. Thus, the district court excluded the depreciation
schedules, summaries, and Mehler’s testimony regarding them.
Trial courts have considerable discretion to determine whether to
admit expert testimony. See Hamling v. United States, 418 U.S. 87,
108 (1974); see also United States v. Jones, 913 F.2d 174, 177 (4th
Cir. 1990) ("A reviewing court should not disturb a trial court deter-
mination to admit evidence unless the trial court has acted ‘arbitrarily
or irrationally.’") (quotation and citation omitted). Rule 403 states
that:
Although relevant, evidence may be excluded if its proba-
tive value is substantially outweighed by the danger of
unfair prejudice, confusion of the issues, or misleading the
jury, or by considerations of undue delay, waste of time, or
needless presentation of cumulative evidence.
4The court stated that:
the evidence is excluded both because it is irrelevant, and, to the
extent that it is marginally relevant under Rule 403, the waste of
time and judicial resources and the confusion of the issues that
would be attended to try to make sense of all this retrospective
redoing of the corporate tax returns seriously undermines the
Court’s legitimate interest in getting this case concluded in an
orderly fashion.
J.A. 1304.
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Fed. R. Evid. 403.
The excluded portion of Mehler’s testimony relating to the detailed
summaries and depreciation schedules may have shown that
Iskander’s corporations were entitled to take additional corporate
paper deductions. Such a showing might have been relevant if the
defendant was charged with corporate tax evasion. However, the
grand jury charged Iskander with evading personal income tax by
skimming receipts from his businesses and then converting those
receipts to his own use without reporting any income on his personal
tax returns. The government referred to the corporate returns to prove
that Iskander under-reported the gross receipts from his hotels,
because that fact supports their skimming theory and relates to their
argument that the bad-debt deductions, taken on his personal tax
returns, were wilfully false. The availability of the depreciation
deductions does not affect the gross receipts of the corporations. Nei-
ther does the existence of those deductions undermine the govern-
ment’s "bad-debt" theory. Fenwick Properties was profitable based on
the actual gross receipts presented by the government to the jury.
Therefore, the government used the corporate tax returns solely to
show the defendant’s claimed bad-debt deduction on his personal tax
return was wilfully false, because he falsely asserted, as demonstrated
on his corporate tax returns, that Fenwick Properties was losing
money, a necessary predicate to claiming the bad-debt deduction.
Consequently, the presentation of detailed valuation summaries and
depreciation schedules for the corporations was irrelevant and poten-
tially confusing to the jury.
Importantly, the court’s exclusion of parts of Mehler’s testimony
did not impact defendant’s ability to argue that his failure to claim all
depreciation deductions available to the corporations showed his lack
of sophistication in tax and financial matters. During the cross exami-
nation of Vardavas, defense counsel had already elicited testimony
that Vardavas believed that Iskander had understated the corporate
depreciation those businesses were entitled to take. Furthermore,
Mehler was allowed to testify to the general fact that, in his opinion,
Iskander had not taken all the depreciation to which the hotels were
entitled.
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The district court also ruled that Iskander failed to present to the
government, in a timely fashion, the name of the expert and the evi-
dence on which the expert planned to rely. The depreciation deduc-
tion testimony was based in significant part on Mehler’s expert
opinion concerning property valuations and depreciations. The gov-
ernment requested notice of the defendant’s intent to offer expert
opinion evidence at trial and Iskander failed to provide timely notice
of his intent to introduce expert testimony on the matters of property
valuations and depreciations or the basis of his expert’s opinions.5
Rule 16 of the Federal Rules of Criminal Procedure required Iskander
to do both. The rule provides that:
(C) Expert witnesses. The defendant must, at the govern-
ment’s request, give to the government a written summary
of any testimony that the defendant intends to use under
Rules 702, 703, or 705 of the Federal Rules of Evidence as
evidence at trial, if—
(i) the defendant requests disclosure under subdivision
(a)(1)(G) and the government complies; or
(ii) the defendant has given notice under Rule 12.2(b) of
an intent to present expert testimony on the defendant’s
mental condition.
This summary must describe the witness’s opinions, the
bases and reasons for those opinions, and the witness’s qual-
ifications
Fed. R. Crim. P. 16.
Iskander does not deny that he failed to fully comply with the rules
concerning expert discovery. Instead he argues that within the context
of the government’s "late" superseding indictment, timeliness should
not be an issue for the government and that the government did not
need time to prepare for Mehler’s testimony. The district court did not
agree.6 Based on an abuse of discretion standard of review and the
5The government did not offer its federal tax accountant as an expert.
6The court stated: "I credit the government’s assertion that to meet the
schedules depicted in Defense Exhibits 21 and 21A, would indeed,
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facts related above, we cannot find that the court’s decision to exclude
a portion of defendant’s expert witness’ testimony was arbitrary and
irrational. See Fed. R. Crim. P. 16(d)(2)(C). ("Failure to Comply. If
a party fails to comply with this rule, the court may: . . . prohibit that
party from introducing the undisclosed evidence; or enter any other
order that is just under the circumstances.").
B.
Next, Iskander argues that the district court’s ruling, admitting a
Dun & Bradstreet report as a business record, was error. The report
supported the government’s assertion that Iskander’s educational
background in Egypt and work experience involved accounting.
Defendant avers that the "Dunn [sic] & Bradstreet Affidavit contains
uncorroborated, hearsay information from an unknown source."
Appellant’s Br. at 34. Defendant contends that the affidavit was inad-
missable hearsay, which should have been excluded, because it was
used "as a basis to show an essential element of the offenses: an
accused’s willful intent to commit a tax evasion offense or structur-
ing." Id. at 36.
During trial, Iskander made a Confrontation Clause type objection,
asserting that the Dun & Bradstreet report was improperly admitted
because he did not have the opportunity for cross-examination. The
Supreme Court held in Crawford v. Washington, "[w]here testimonial
statements are at issue, the only indicium of reliability sufficient to
satisfy constitutional demands is the one the Constitution actually pre-
scribes: confrontation." 541 U.S. 36, 68-69 (2004). The Court in
Crawford divided out-of-court statements into two categories, those
that are testimonial in nature and those that are not, asserting that tes-
timonial hearsay is the "primary," if not the only, object of the Con-
frontation Clause. See id. at 53. It then held that the testimonial
statement of a person who does not appear as a witness at the trial
may not be admitted against the accused to prove the truth of the
require considerable expertise. We are essentially talking a depreciation
schedule going back to 1985. The government does not have access to
these records." J.A. 1303.
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statement unless the declarant is unavailable to appear as a witness
and the accused had a prior opportunity for cross-examination. Id.
We find that we need not reach the issues of whether the Dun &
Bradstreet report qualifies as a business record or whether the admis-
sion of the report violates the Confrontation Clause, as set out in
Crawford, because the Dun & Bradstreet report was merely cumula-
tive of other testimony establishing that Iskander had accounting and
business experience. We articulated in Cooper v. Taylor, 103 F.3d
366, 370 (4th Cir. 1996), the standard to determine if a trial court
error is harmless. We stated that:
In order for an error to have a substantial and injurious
effect or influence, it must have affected the verdict.
Because juries have a limited number of responses to give
in a criminal trial — guilty, innocent, or cannot decide —
an error is harmless when the error did not substantially
sway or substantially influence the response.
Thus, if the evidence is not merely sufficient, but so power-
ful, overwhelming, or cumulative that the error simply could
not reasonably be said to have substantially swayed the
jury’s judgment, then the error is not harmful. On the other
hand, if the federal court is in grave doubt about whether the
trial error had a substantial and injurious effect or influence
on the verdict and therefore finds itself in virtual equipoise
about the issue, the error is not harmless.
Id. at 370 (citations and internal quotation marks omitted).
The government presented testimony by Soliman and Vardavas
establishing that Iskander had knowledge of accounting practices and
was a sophisticated businessman. Further, the government presented
evidence to show that he acted with the requisite willful intent
through evidence exposing the evasion scheme itself. The government
provided both documentary and testimonial evidence showing that
Iskander deliberately under-reported his corporate receipts and then
took affirmative steps to conceal the diversion of those funds — funds
he used to his own benefit. Thus, we find that any error caused by the
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admission of the Dun & Bradstreet report was cumulative and there-
fore harmless.
C.
Iskander contends, in his third argument, that the evidence pre-
sented at trial was insufficient to prove willful tax evasion. Iskander
focuses on the evidence the government introduced to show that he
was aware of accounting principles to support its assertion that he
acted willfully. Defendant describes that evidence as insubstantial,
hearsay, and conjecture. Thus, in essence, Iskander asserts that the
government failed to carry its burden.
As discussed supra, the government presented testimonial evidence
during the trial to support its assertion that Iskander was familiar with
principles of accounting and business. In addition, the government
introduced evidence regarding Iskander’s knowledge that the monies
he was taking from the hotels did not represent repayments of share-
holder loans and that the then-claimed bad-debt deductions on his per-
sonal tax returns were based on false representations that Fenwick
Properties was unprofitable.7 This evidence is substantial and would
allow a rational trier of fact to find that defendant deliberately evaded
his personal income tax.
In the alternative, Iskander avers that he had a good faith belief,
although it may have been unreasonable, that he was complying with
7The government presented testimony from Vardavas and Soliman to
show that Iskander kept a second set of records reflecting the "actual"
income of his two hotels versus the under-reported gross receipts he gave
to his accountant. There was also evidence regarding a loan application
prepared by defendant in September 1995 — two days before the date
on which he filed the Ocean Properties tax return for 1994 — in which
he made representations concerning the gross receipts for the hotel. In
the loan application he submitted information showing that the hotel
grossed approximately one million dollars, but in his tax return he
alleged the hotel made $700,000. The government also submitted evi-
dence showing that Iskander made almost $800,000 in structured cur-
rency deposits — deposits all under the $10,000 threshold that triggers
notification to the IRS. During this time, Iskander filed tax returns
reporting zero taxable income.
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the tax laws. Defendant cites Cheek v. United States, 498 U.S. 192,
201 (1991), for the proposition that a belief, in good faith, that one
has complied with the tax laws negates willfulness and is therefore a
defense, even if the belief is unreasonable. The Court in Cheek did
find that the courts below were wrong to hold that "a good-faith mis-
understanding of the law or a good-faith belief that one is not violat-
ing the law, if it is to negate willfulness, must be objectively
reasonable." Id. However, the taxpayer’s subjective beliefs regarding
his "ignorance of the law" or his "misunderstanding of the law" is a
question for the jury. Id. at 203.
In the case at bar, Iskander had the opportunity to present evidence
regarding his good faith belief or ignorance of the tax laws. Neverthe-
less, the jury found him guilty on Counts Two, Three, and Ten which
state that the defendant "did willfully attempt to evade and defeat a
large part of the income tax due." J.A. 32, 33, 35. In other words, the
jury found beyond a reasonable doubt that Iskander did not have a
subjective belief, irrational or otherwise, that he was not violating the
law when he took cash from the hotel properties and did not declare
those monies as income and when he subsequently wrote the loans off
as an uncollectible bad-debt on his personal tax returns. Defendant
does not assert that the district court did not properly instruct the jury
on the good faith defense or on the government’s burden of proof.
Therefore, we find that viewed in a light most favorable to the gov-
ernment, there was sufficient evidence to support the jury’s verdict.
D.
Finally, Iskander challenges his sentence. His most persuasive
argument is that because the district court enhanced his sentence
based on its finding that he used sophisticated means to commit tax
evasion, and not the jury’s verdict, his sentence violates the Sixth
Amendment.
The district court, in computing Iskander’s offense level, relied on
the 1995 Sentencing Guidelines,8 which allow for the grouping of the
8Guideline section 1B1.11 instructs the court to use the Sentencing
Guidelines in effect on the date of sentencing unless that manual would
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offenses9 when the offense level is largely determined by the total
amount of harm or loss. See U.S.S.G. § 3D1.2(d). The guideline range
for violation of 26 U.S.C. § 7201 is found in U.S.S.G. § 2T1.1(a)(1),
and calls for a base offense level of 17 based on a tax loss of $363,859.10
Because the court determined that sophisticated means were used to
impede discovery of the existence or extent of the offense, two levels
were added, pursuant to U.S.S.G. § 2T1.1(b)(2), bringing the offense
level to 19. In computing Iskander’s criminal history, the PSR notes
that defendant had a previous conviction of child endangerment and
was on probation at the time the instant offense was committed,
resulting in a total of three criminal history points. According to the
Sentencing Guidelines’ Table, three criminal history points constitute
a criminal history category of II. Consequently, the district court sen-
tenced defendant within the Sentencing Guidelines’ range of 33 to 41
months of imprisonment, when it imposed the sentence of 41 months.
Absent the two point enhancement, Iskander’s guideline range would
have been 27-33 months.
In Booker, the Supreme Court held that the mandatory manner in
which the federal Sentencing Guidelines required courts to impose
sentencing enhancements based on facts found by the court, by a pre-
ponderance of the evidence, violated the Sixth Amendment. See
violate the ex post facto clause of the United States Constitution. The
probation officer found in the Presentence Report ("PSR") that the 2003
manual violated the ex post facto clause, therefore, the officer recom-
mended, and the court appropriately used, the 1995 Sentencing Guide-
lines because they were in effect during the time when the offenses of
conviction were committed and it benefitted defendant.
9When counts are grouped under § 3D1.2(d), the offense level applica-
ble to a Group is the offense level for the most serious of the counts com-
prising the Group, i.e., the highest offense level of the counts in the
group. In this case, that was Counts Two or Three, in violation of 26
U.S.C. § 7201 — tax evasion.
10The district court adopted the PSR which states that the tax loss for
the purpose of computing Iskander’s guideline range was $363,859 based
on what the government established at trial through its tax witness. The
tax loss calculation included only unreported income from the diversion
of corporate checks to personal investment accounts held by the
Iskanders and the tax loss from the fraudulent bad-debt deductions.
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Booker, 125 S. Ct. at 756-57. The Court remedied the constitutional
violation by severing two statutory provisions, thereby making the
Sentencing Guidelines advisory. Id. at 764. Thus, we recognized in
Hughes, that "there are two potential errors in a sentence imposed
pursuant to the pre-Booker mandatory guidelines regime: a Sixth
Amendment error, . . . and an error in failing to treat the guidelines
as advisory." 401 F.3d at 552. Because these issues were not clearly
raised during the sentencing hearing, we review the district court’s
sentence for plain error. Id. at 547 ("Because issue was not advanced
in the district court, we review the district court decision for plain
error.").
The district court clearly made a two point enhancement, when it
found that Iskander had used sophisticated means. This finding was
based on a preponderance of the evidence standard and lay outside of
the jury’s verdict. Therefore, under Booker, the court erred in impos-
ing a sentence on Iskander based on the two point enhancement,11
because his sentence then exceeded the maximum sentence authorized
by the facts found by the jury alone. Id. at 547-48.12 Following this
court’s reasoning in Hughes, we find that the district court’s error was
plain and prejudicial, and we vacate Iskander’s sentence and remand
11We of course offer no criticism of the district judge, who followed
the law and procedure in effect at the time of Iskander’s sentencing.
12This court states in United States v. Gray that —
Although the Sentencing Guidelines are no longer mandatory,
Booker makes clear that a sentencing court must still "consult
[the] Guidelines and take them into account when sentencing."
125 S. Ct. at 767. On remand, the district court should first deter-
mine the appropriate sentencing range under the Guidelines,
Hughes, 2005 WL 628224, at *4. The court should consider this
sentencing range along with the other factors described in 18
U.S.C. § 3553(a), and then impose a sentence. Id. If that sen-
tence falls outside the Guidelines range, the court should explain
its reasons for the departure, as required by 18 U.S.C.
§ 3553(c)(2). Id. The sentence must be "within the statutorily
prescribed range and . . . reasonable." Id.
No. 02-4990, 2005 U.S. App. LEXIS 7439, at *42 (4th Cir. Apr. 29,
2005).
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for resentencing "consistent with the remedial scheme set forth in Jus-
tice Breyer’s opinion for the Court in Booker." Id. at 544.
IV.
Based on the foregoing, we affirm Iskander’s convictions, vacate
his sentence, and remand to the district court for resentencing, in
accordance with this opinion.
AFFIRMED IN PART, VACATED IN PART,
AND REMANDED
16 UNITED STATES v. ISKANDER

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