United States v. Hammond

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
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m 01-20043
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UNITED STATES OF AMERICA,
Plaintiff-Appellee,
VERSUS
RICHARD ALLISON HAMMOND,
Defendant-Appellant.
_________________________
Appeal from the United States District Court
for the Southern District of Texas
(H-96-CR-172-1)
_________________________
October 1, 2001
Before JOLLY, SMITH, and WIENER,
Circuit Judges.
JERRY E. SMITH, Circuit Judge:*
Richard Hammond appeals the sentence he
received for embezzlement, contending that
the district court erred in enhancing his
sentence for actions committed by others.
Finding no reversible error, we affirm.
I.
From 1971 to 1995, Hammond was
president and business manager of the
International Brotherhood of Teamsters Local
Union 988. Between 1990 and 1995, he
* Pursuant to 5TH CIR. R. 47.5, the court has
determined that this opinion should not be
published and is not precedent except under the
limited circumstances set forth in 5TH CIR. R.
47.5.4.

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repeatedly embezzled union funds by using his
union-issued American Express credit card for
personal expenses unrelated to legitimate
Local 988 business. In 1998, he was
convicted on multiple counts of embezzling
union funds totaling $231,502.49 and also on
several other charges not relevant to the
present appeal. Of the amount in question,
$41,712.49 was spent not by Hammond but by
his associates, Louis Stewart and Gerald
Doerr.
Stewart was secretary-treasurer of Local
988, and Doerr was its business agent, during
the period when Hammond embezzled the
funds. Stewart had used his own union-issued
American Express card to charge $31,484.01
in personal expenses, while Doerr had
embezzled $10,228.48 in the same way. The
district court sentenced Hammond to fifty-one
months’ imprisonment, a five-year term of
supervised release, and $369,000 in restitution.
We affirmed Hammond’s conviction but
vacated the sentence and remanded for resen-
tencing. United States v. Hammond, 201 F.3d
346 (5th Cir. 1999) (“Hammond I”). The sen-
tence was vacated because it had been
augmented as a result of the attribution of
Stewart and Doerr’s actions to Hammond.
The panel required “a specific finding of jointly
undertaken activity” if the sentence was to be
upheld. Id at 352.
On remand, the district court reinstated the
fifty-one-month sentence, convinced that the
reversal of its earlier ruling had been a result of
“deficient articulation” and that this court had
been “looking for certain key words.” The
district court found “beyond a reasonable
doubt” that the funds embezzled by Doerr and
Stewart could be attributed to Hammond as
reasonably foreseeable acts and omissions of
third parties involved in jointly undertaken
criminal activity.1 Hammond again appeals his
sentence.
II.
The sentence must be affirmed if “the dis-
trict court . . . ha[s] made findings establishing
that (1) Hammond agreed to undertake
criminal activities jointly with third parties, (2)
the losses caused by the third parties were
within the scope of the agreement, and (3) the
third parties’ misconduct was reasonably
foreseeable to Hammond.” Hammond I, 201
F.3d at 351. “A finding by a district court that
conduct is part of a common scheme is a
factual determination subject to review under
the clearly erroneous standard.” United States
v. Vital, 68 F.3d 114, 118 (5th Cir. 1995).
The district court must find that a
preponderance of evidence indicates that the
defendant committed the relevant conduct.
United States v. Bryant, 991 F.2d 171, 177
(5th Cir. 1993). Thus, we reverse only if the
finding that a preponderance of evidence
connected Hammond to the conduct of
Stewart and Doerr is clearly erroneous.
Because the record indicates a substantial
likelihood that Hammond, Doerr, and Stewart
had coordinated their criminal activities, the
findings are not clearly erroneous. It is
difficult to dispute the conclusion that
Hammond was likely to have been aware of
Doerr’s and Stewart’s illegal activities but
1 As noted below, the appropriate level of proof
for this case was not in fact “reasonable doubt” but
preponderance of the evidence. Therefore, the
finding that, beyond a reasonable doubt, Hammond
had participated in a common scheme with Stewart
and Doerr was unnecessary; it would have been
sufficient to show that such an inference was
supported by a preponderance of the evidence.

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failed to report them, despite having a
fiduciary duty to do so. For several years in
the early 1990’s, Hammond was president of
Local 988 at a time when he, Doerr, and
Stewart were simultaneously embezzling union
funds. Hammond had ultimate responsibility
for all Local 988 spending and so had a
fiduciary duty to report and prevent any
embezzlement by his subordinates. Similarly,
Stewart and Doerr had a fiduciary duty to
scrutinize Hammond’s expenditures and report
any potential embezzlement. As secretary-
treasurer of the Local and a member of its
executive board, Stewart had a especially
strong responsibility in this regard.
Under the sentencing guidelines, “the court
may consider any explicit or implicit
agreement fairly inferred from the conduct of
the defendant and others.” U.S.S.G. § 1B1.3
(comment n.2). District courts are also
allowed to take into account “all acts and
omissions committed, aided, abetted,
counseled, commanded, induced, procured, or
willfully caused by the defendant.” U.S.S.G.
§ 1B1.3(a)(1)(A).
It is certainly possible to “infer” that an “ex-
plicit or implicit agreement” existed between
Hammond, Stewart, and Doerr to cover up
and perhaps even facilitate each other’s em-
bezzlement. Among the items they illegally
purchased with their union-issued credit cards
were hunting rifles, expensive brand-name
clothing, monogrammed luggage, sporting
goods, and home electronics equipment. As
they reviewed the records of each other’s
expenditures, the three could hardly have been
in any doubt that their associates were
engaged in embezzlement and that these
expenditures were not for legitimate union
business.
From these facts, an “explicit or implicit
agreement” can certainly be “fairly inferred
from the conduct of the defendant and others.”
U.S.S.G. § 1B1.3 (comment n.2). It is unlike-
ly that the three embezzlers would have violat-
ed their fiduciary duty to report each other’s
activities or felt confident that their own
criminal acts would go undetected in the
absence of what the district court called a “re-
ciprocal relationship” between them.
Thus, the judgment on remand satisfies the
three criteria laid out in Hammond I, 201 F.3d
at 351. From the evidence, it can be fairly in-
ferred that Hammond “agreed to undertake
criminal activities jointly with third parties.”
Id. And a fair inference of an “explicit or im-
plicit agreement” is all that the sentencing
guidelines require. U.S.S.G. § 1B1.3
(comment n.2). The finding that a reciprocal
arrangement existed between Hammond,
Stewart, and Doerr satisfies Hammond I’s
requirement of a “specific finding of jointly
undertaken activity.” Hammond I, 201 F.3d at
352.
We do not opine that Hammond’s mere
knowledge of Stewart’ s and Doerr’s activities
was sufficient proof of an agreement.2 Rather,
it is the combination of his knowledge with the
fact that he violated his fiduciary duty to
report their misconduct, and that they in turn
violated their duty to report Hammond’s own
embezzlement, that creates a legitimate
inference of “explicit or implicit agreement”
sufficient to satisfy the requirements of the
guidelines. Id.
2 Cf. United States v. Evbuomwan, 992 F.2d
70, 74 (5th Cir. 1992) (holding that “the mere
knowledge that criminal activity is taking place is
not enough for sentence enhancement under
§ 1B1.3").

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There is no doubt that the district court’s
findings on remand satisfy the second
requirement of Hammond I, that “the losses
caused by the third parties were within the
scope of the agreement.” Hammond I, 201
F.3d at 351. By definition, an agreement
reciprocally to facilitate one another’s
embezzlement contemplated the facilitation of
precisely the sort of “losses” that Doerr and
Stewart inflicted on the union. Id.
Finally, it is also highly likely that “the third
parties’ misconduct was reasonably fore-
seeable to Hammond.” Id. Given that Ham-
mond was responsible for supervising Doerr
and Stewart and was embezzling union funds
himself, he reasonably could foresee that his
apparent reciprocal arrangement with them
would facilitate the very sort of “misconduct”
in which they actually engaged. Id.
AFFIRMED.

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