SIXTH CIRCUIT REVERSES SENTENCE DUE TO VIOLATION OF EX POST FACTO CLAUSE

A recent U.S. Sixth Circuit Court of Appeals decision offers two important lessons: (1) A defendant cannot be sentenced in federal court under Sentencing Guidelines that became effective between the time of his illegal conduct and his sentencing date; and (2) Bleaching $5 bills and using a copier to turn them into $100 bills is not a viable route to financial independence.

Robert Welch was indicted on four counts of counterfeiting in early 2009 and pleaded guilty to the indictment in March 2010. In August 2010, the U.S. District Court for the Northern District of Ohio sentenced Welch to concurrent 42-month sentences on each of the four counts. Welch’s defense attorney argued at the sentencing hearing that the Guideline enhancement violated the Ex Post Facto clause because the guideline that he was sentenced under was amended after the date of his offense. In other words, you can’t violate a law that wasn’t in effect at the time of the alleged violation. The district court disagreed and Welch appealed the sentence to the Sixth Circuit.

The Guideline enhancement used by the district court (U.S.S.G. § 2B5.1) resulted in a guideline calculation range of 37-46 months in prison. But the Guideline that was in effect when Welch actually began scrubbing $5 bills (U.S.S.G. § 2B1.1) resulted in a guideline calculation range of only 21-27 months in prison. Problem was, the Guideline used by the district court – while applying generally to counterfeiting offenses – explicitly excluded Welch’s actions:

“Counterfeit,” as used in this section, means an instrument that purports to be genuine but is not, because it has been falsely made or manufactured in its entirety. Offenses involving genuine instruments that have been altered are covered under § 2B1.1

The November 2009 amendment to 2B5.1 broadened the scope of the Guideline to include the mere alteration of currency, meaning that folks who bleached and reprinted bills (like Welch did) could be sentenced under this Guideline enhancement, not just those who created their own bills from scratch.

Welch argued that he should have been sentenced under 2B1.1, which would have shaved 16-19 months off of his sentence. However, the court found that 2B1.1 didn’t quite apply in Welch’s case either. While it mentions “offenses involving altered or counterfeit instruments,” 2B1.1 excludes offenses involving “counterfeit bearer obligations of the United States,” or cash.

To recap: The version of 2B5.1 that was in effect at the time of Welch’s offense excluded his conduct, as did 2B1.1, the Guideline under which he asked to be sentenced. In other words, Welch’s offense did not fit within any Sentencing Guideline. Unfortunately for Mr. Welch, this did not mean that he could simply go home. The Sixth Circuit noted that despite the confusion, “most courts sentencing defendants who bleached genuine currency in the same manner as Welch before November 1, 2009, used 2B1.1 to sentence defendants.”

The government argued that the amendment of the Sentencing Guideline 2B5.1 simply “clarified” what the Guideline had “always intended.” The court was not persuaded by this line of argument, writing:

While Amendment 731 undoubtedly “clarified” the application of [the Guideline] for future application to defendants who bleach genuine currency, it is acknowledged by the government that prior to its passage it was unclear if offenses involving bleached notes that occurred before the effective date of the “clarification” should be sentenced under [one Guideline or the other].

The court compared the application of the Guidelines as they were on the day the offense was committed with the application of the Guidelines in place on the day of sentencing. “If a revision of the Guidelines ‘changes the legal consequences of acts completed before its effective date’ to the detriment of the [defendant], the Guidelines in effect at the time of the criminal act must be applied.’”[1]

In the end, the court applied one of a criminal defendant’s best friends, the Rule of Lenity. The Rule of Lenity “requires ambiguous criminal laws to be interpreted in favor of the defendants subjected to them.” So although neither Guideline actually applied to the specific facts of Welch’s offense at the time of commission, the court sided with Welch and remanded, ordering the lower-tiered Guideline to apply.