It is important to understand that failing to produce documents, producing false documents, or misleading investigators, even though the investigators are not state or federal officials, can have serious ramifications down the road. As such, it is essential that, when facing an audit or investigation of any kind, one exercises the highest degree of care to ensure the accuracy of the documents produced and statements/testimony given.
In U.S.A. v. Stubblefield, 942 F. 3d 666 (5th Cir. 2019), the Court held that Stubblefield’s failure to produce files that were requested by auditors and her production of false documents, supported an enhancement under U.S.S.G. §3C1.1. On appeal, the defendant claimed that because the entity performing the audit was not a governmental entity and the audit was not connected to any governmental investigation, then no “official investigation” had begun, and therefore, the obstruction enhancement did not apply. The Fifth Circuit held that whether or not the investigating entity was a governmental entity or whether a state of federal investigation had begun was not material. The Court found the “relevant question” to be “whether the defendant willfully ‘attempted to obstruct justice with respect to the investigation, prosecution, or sentencing of the instant offense of conviction.’” Id.,at 669 (citations omitted). "A district court may apply Section 3C1.1 to a defendant who (I) believed that there was or would be a governmental investigation and (2) acted to obstruct or impede that investigation." Thus, pre-investigation conduct is allowed to be considered in applying an enhancement for obstruction of justice under §3C1.1.
Here the evidence showed that the defendant could plausibly believe that a governmental investigation was probably occurring or would probably occur. Agreements signed by the defendant stated that she would act " in accordance with state and federal laws and regulations," and would accept the "oversight of the State of Texas." This suggests that when the defendant obstructed the H-GAC audit, she believed that she was obstructing a current or future state investigation. "The requisite factual finding in this case is that [the defendant] believed that she was obstructing a governmental investigation that was in progress or would be coming about.”
This decision by the Fifth Circuit is consistent with Third Circuit law. The Third Circuit Court of Appeals has interpreted § 3C1.1 to reach conduct that obstructs any investigation, federal or state, so long as the “conduct being investigated gave rise to the [federal] criminal charge ultimately decided upon.” United States v. Imenec, 193 F.3d 206, 208 (3d Cir. 1999). “A § 3C1.1 enhancement is appropriate where the defendant has obstructed an investigation of the criminal conduct underlying the offense of conviction, even where the investigation was being conducted by state authorities at the time.” Id. at 209. The court has further clarified that “where the obstructive conduct relates only to an ongoing state prosecution, with no discernable effect on the federal proceedings, enhancement under U.S.S.G. § 3C1.1 is improper.” United States v. Jenkins, 275 F.3d 283, 290 (3d Cir. 2001). The crucial determination, therefore, is whether there is a “nexus between the defendant’s obstructing ongoing state proceedings,” on the one hand, and the “investigation, prosecution, or sentencing of the federal offense,” on the other. Id. at 291. And since Jenkins, an Application Note to § 3C1.1 interprets the provision more broadly, providing that “[o]bstructive conduct that occurred prior to the start of the investigation of the instant offense of conviction may be covered by this guideline if the conduct was purposefully calculated, and likely, to thwart the investigation or prosecution of the offense of conviction.” Sentencing Guidelines for United States Courts, 71 Fed.Reg. 28,063, 28,072 (May 15, 2006); see also United States v. Weikal-Beauchat, 640 F. App'x 219, 222 (3d Cir. 2016), cert. denied, 136 S. Ct. 2457 (2016) (affirming district court sentence relying on application note and describing lower court as “[b]ound by this application note”).
United States v. McFadden, No. CR 15-376-1, 2018 WL 8950924, at *8 (E.D. Pa. Oct. 26, 2018)