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United States v. Nygren

United States Court of Appeals, First Circuit

August 6, 2019

STEVEN NYGREN, Defendant, Appellant.


          Heather Clark, with whom Clark Law Office was on brief, for appellant.

          Benjamin M. Block, Assistant United States Attorney, with whom Halsey B. Frank, United States Attorney, was on brief, for appellee.

          Before Torruella, Selya, and Kayatta, Circuit Judges.


         This sentencing appeal poses a question of first impression in this circuit: may feigned incompetency comprise the basis for an obstruction-of-justice enhancement and, thus, support an upward offense-level adjustment under USSG §3C1.1? We answer this question in the affirmative, reject the defendant's other assignments of error, and affirm his sentence.

         I. BACKGROUND

         We start by rehearsing the relevant facts and travel of the case. During the summer of 2014, defendant-appellant Steven Nygren was hired as the chief financial officer of Brooklin Boat Yard (the Boatyard), a closely held corporation located in Brooklin, Maine. Almost immediately, he began fleecing his new employer: in little more than a year, he forged at least 63 checks, totaling over $732, 000, and deposited the proceeds into an account that he controlled. During the same time span, he also racked up more than $83, 000 in unauthorized purchases on the Boatyard's credit cards. Some of the money was spent on personal expenses and the rest was invested in a store owned by the defendant.

         Discovering that the Boatyard's coffers had been depleted, the Boatyard's owner notified authorities of his suspicion that the defendant had been forging checks. In a surreptitiously recorded conversation with the owner on September 13, 2015, the defendant admitted to stealing money. The defendant then went on the offensive, circulating a letter at his store, which stated that "there are at least 2 sides to every story" and that "nothing is ever as it seems." The letter also accused the Boatyard's management of misspending and of paying "hush up money" to women.

         Three days after the surreptitiously recorded conversation, law enforcement officers executed both arrest and search warrants at the defendant's home. In due course, a federal grand jury sitting in the District of Maine charged the defendant with 63 counts of bank fraud, see 18 U.S.C. § 1344(2), one count of use of an unauthorized device, see id. § 1029(a)(2), and one count of tax evasion, see 26 U.S.C. § 7201. The tax evasion count was based upon the defendant's history of filing false or incomplete tax returns (or sometimes, no tax return at all).

         On August 25, 2016, the defendant - who had suffered a stroke four months earlier - appeared before a magistrate judge for initial presentment. Noting that the defendant's medical condition and motion to obtain a competency evaluation combined to raise a question of competency, the magistrate judge deferred the matter for 60 days. At his postponed arraignment on October 24, 2016, the defendant pleaded not guilty to all counts and indicated that he planned to file a motion for a competency hearing. See 18 U.S.C. § 4241(a)-(c). That motion was filed two weeks later, accompanied by a letter from the defendant's treating neurologist and a forensic competency report prepared by a retained expert. The neurologist's letter noted that the defendant's stroke had caused "profound deficits" affecting his cognition and memory that could last "several months, but will slowly improve over time." The retained expert who prepared the competency report had reviewed the defendant's medical records, examined the defendant, and interviewed the defendant and his wife. He concluded that - at the time - the defendant was not legally competent to stand trial.

         The government objected to the motion for a competency hearing. It pointed out, among other things, that the defendant had performed poorly on two tests administered by the defendant's expert to detect malingering: the test of memory malingering (TOMM) and the validity indicator profile (VIP), the latter being "designed to identify valid and invalid responding." Based on his extremely low scores on these tests, the expert's report warned that the defendant might have been exaggerating his memory difficulties. The district court nonetheless overruled the government's objection and granted the defendant's motion for a competency hearing. The court ordered, though, that the defendant continue his rehabilitation and undergo a second competency evaluation at a government facility.

         The second competency evaluation was conducted at a federal Bureau of Prisons (BOP) facility in February and March of 2017. The BOP evaluator concluded that the defendant was legally competent to stand trial - a conclusion based in part on her assessment that the defendant had applied insufficient effort during the examination process, resulting in feigned or exaggerated cognitive limitations consistent with malingering. The evaluator began by administering the Minnesota Multiphasic Personality Inventory - Second Edition, a test which includes "validity scales designed to detect random responding as well as attempts by an examinee to distort results in a positive or negative direction." The defendant's results on these validity scales, she concluded, were consistent with the exaggeration of brain injury, cognitive dysfunction, and disability. Then - after the defendant had once again failed the same two malingering tests earlier administered by his own retained expert - the BOP evaluator terminated her examination, stating that the defendant's results on those three tests "would serve to invalidate any measures of cognitive functioning." With respect to the TOMM, the evaluator specifically found that the defendant's "scores were significantly below those that would be expected even of individuals presenting with the most severe effects of traumatic brain injury." She also specifically found that the defendant's self-described memory deficits surrounding the circumstances of his alleged crimes were "inconsistent with any known memory functions." The defendant was then re-examined by his own expert, who concurred with the conclusion that the defendant was legally competent.

         In the wake of these reports, the defendant sought to withdraw his request for a competency hearing and to change his plea. The district court, unwilling to accept the defendant's stipulation to his competency, said that it would conduct a colloquy and make findings on the defendant's competency before considering the defendant's proposed change of plea. At a combined competency and change-of-plea hearing, see Fed. R. Crim. P. 11, the court found the defendant legally competent and accepted his guilty plea to all counts.

         But that was not the end of the brouhaha over competency. In the initial presentence investigation report (PSI Report), the probation officer recommended a two-level enhancement for obstruction of justice, see USSG §3C1.1, premised on the defendant's "systematic, sustained, and intentional under performance on objective testing as part of his evaluations in an effort to present as incompetent to avoid legal culpability." Employing similar reasoning, the probation officer recommended against an offense-level reduction for acceptance of responsibility. See USSG §3E1.1. Even though the defendant objected to these recommendations, both were maintained in the final version of the PSI Report.

         At a presentence conference, the defendant reiterated his objections to the PSI Report and apprised the district court of his desire to offer expert testimony at the disposition hearing. The government responded that it would present its own expert testimony and chronicled additional conduct of the defendant that it viewed as relevant to the disputed recommendations (including circulating the letter at the store). Following the conference, the government filed a sentencing memorandum and the defendant filed a rejoinder.

         The district court convened the disposition hearing on May 25, 2018.[1] After hearing the proffered expert testimony and reviewing the relevant materials, the court found that the government had shown by preponderant evidence that the defendant had attempted to obstruct justice through his efforts "to manipulate consciously and deliberately the psychological evaluations in order to skew the justice system in his favor." Accordingly, the court concluded that an obstruction-of-justice enhancement was appropriate. Then, citing the strong inverse relationship between obstruction of justice and acceptance of responsibility, the court found that the defendant had not carried his burden of showing that he qualified for an acceptance-of-responsibility credit. It added that, in any event, the defendant's distribution of the letter (which denied responsibility for the charged crimes and tried to shift the blame to the Boatyard's owner) was inconsistent with acceptance of responsibility.

         The applicable guideline sentencing range (GSR), calculated with an enhancement for obstruction of justice and without a credit for acceptance of responsibility, was 87-108 months. The district court proceeded to sentence the defendant to 95-month incarcerative terms on each of the 63 bank-fraud counts and 60-month incarcerative terms on the two remaining counts, with all sentences to run concurrently. The ...

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