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United States v. Keleta

January 23, 2009

UNITED STATES OF AMERICA, APPELLEE
v.
KESETBRHAN M. KELETA, APPELLANT



Appeal from the United States District Court for the District of Columbia (No. 05cr00371-01).

The opinion of the court was delivered by: Sentelle, Chief Judge

Argued September 4, 2008

Before: SENTELLE, Chief Judge, and HENDERSON, Circuit Judge, and WILLIAMS, Senior Circuit Judge.

Dissenting opinion filed by Senior Judge WILLIAMS.

Kesetbrhan M. Keleta was convicted of operating a money-transmitting business without a license, in violation of 18 U.S.C. § 1960. He was sentenced pursuant to United States Sentencing Guidelines §§ 2S1.3 and 2B1.1. At sentencing, the district court denied reduction of Keleta's sentence in accordance with § 2S1.3(b)(3), a "safe harbor" provision permitting a sentence reduction when specified conditions are met. On appeal he argues that his sentence pursuant to Sentencing Guidelines §§ 2S1.3 and 2B1.1 was unreasonable, that the district court erred in denying him safe harbor, and that his counsel was ineffective for failing to object to alleged shifts in burdens of proof and for failing to present safe harbor evidence.

Because we conclude that Keleta's sentence was reasonable, that there was no error in denying him safe harbor, and that his attorney was not ineffective, we affirm the judgment of the district court.

Background

The Embassy of Eritrea established a money-transmitting business in Washington, D.C., in the mid-1990s to enable Eritrean citizens living in the United States to send money back to Eritrea. In August 2000, the business was taken over by a company called "Himbol Financial Services." Himbol enabled customers to send money not only to Eritrea but also to Eritrean nationals in other parts of the world. In 2001 Himbol hired the appellant, Kesetbrhan M. Keleta, to manage the business. One of his duties was to obtain a license for the money-transfer business. He filed a license application, which was pending between May 2001 and February 2002. Keleta left Himbol's employ at the end of 2002. In October 2005, he was charged with two counts of violating 18 U.S.C. § 1960, which prohibits conducting, controlling, managing, supervising, or directing an unlicensed money-transmitting business. The first count related to conduct occurring between March 2001 and October 25, 2001. Reflecting amendment of the statute on October 26, 2001, the second count related to conduct occurring between October 26, 2001, and September 2002. Following a jury trial, Keleta was convicted on both counts.

The district court sentenced Keleta pursuant to § 2S1.3 (a)(2) of the United States Sentencing Guidelines ("USSG" or "Guidelines"). That section provides for a base offense level of 6 plus additional levels "corresponding to the value of the funds." Those additional levels are to be determined using the table in § 2B1.1 of the Guidelines, with increased levels depending upon the "loss" incurred. The government offered evidence that, during the time of alleged illegal conduct, Keleta had sent or authorized over $10 million in wire transfers. This amount under § 2B1.1 resulted in an enhancement of 20 levels, bringing Keleta's base offense level to 26. Keleta argued to the district court that there was no basis for using the table in § 2B1.1 because there was no "loss" in his case. The district court disagreed, stating that loss to a victim was not an issue in punishing violations of 18 U.S.C. § 1960, which were "more akin to money laundering." The district court noted that the Guidelines range at this point was 63 to 78 months.

The court also considered whether USSG § 2S1.3 (b)(3), the so-called "safe harbor" provision, applied. Under that provision, if the defendant did not act with reckless disregard of the source of the funds, the funds were the proceeds of lawful activity, and the funds were to be used for a lawful purpose, then the base offense level was to be decreased back to 6. The court found, however, that Keleta did not meet any of these criteria and therefore denied him a sentence reduction under the "safe harbor" provision.

The court gave Keleta a 3-level reduction for acceptance of responsibility as well as an additional 2-level reduction for mitigating circumstances, including Keleta's belief that he would receive some protection from the Eritrean Embassy for his involvement with Himbol, as well as Keleta's belief that he thought he was helping his country and those who lived there. His base offense level was therefore 21, with a corresponding sentencing range of 37 to 46 months. The court then subtracted six months, for Keleta's status as a deportable alien, from the bottom of the range. His final sentence was therefore 31 months.

Discussion

Keleta now appeals his sentence, arguing that it was unreasonable, that the district court improperly denied him the benefit of the safe harbor provision, and ...


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