In the
United States Court of Appeals
For the Seventh Circuit

No. 99-4302

United States of America,

Plaintiff-Appellee,

v.

Jose J. Arambula,

Defendant-Appellant.



Appeal from the United States District Court
for the Southern District of Indiana, Indianapolis Division.
No. 99 CR 57--David F. Hamilton, Judge.


Argued November 27, 2000--Decided January 26, 2001



  Before Bauer, Posner, and Easterbrook, Circuit Judges.

  Bauer, Circuit Judge. Jose J. Arambula
challenges the district court’s enhancement of
his sentence for obstruction of justice and
denial to reduce for acceptance of
responsibility. We vacate the obstruction
enhancement, but affirm the denial of an
acceptance of responsibility reduction.

BACKGROUND

  A.   Facts

  A postal inspector suspected that a parcel
addressed from Greg Brown, 1302 Lowry Road,
Laredo, Texas to Joe Arambula at Courtyard by
Marriott Hotel in Indianapolis, Indiana contained
narcotics based on its size, weight, shape, and
mailing origin. Investigation revealed the Laredo
address was fictitious. The parcel underwent a
canine examination, which indicated that it
contained a controlled substance. Based on this
information, a federal search warrant was issued
for the parcel. Tests revealed that it harbored
two pounds, nine ounces of cocaine. Under court
authorization, an electronic transmitter was
placed inside the parcel with a counterfeit
substance mixed with a small amount of the
original cocaine.

  Law enforcement officers then delivered the
parcel to the hotel desk and Arambula took it to
his room. Arambula returned to the lobby to meet
a man identified as Frederick L. Hand and
escorted him to the room. Minutes later the
electronic transmitter signaled that the parcel
had been opened. The officers knocked and
announced, asking that the door be opened.
Receiving no response, but hearing movement
inside, the officers forced entry and found
Arambula near an open window and Hand sprawled on
a roof about two floors below.

  Arambula and Hand were arrested and properly
warned. Arambula consented to a room search and
agreed to speak with law enforcement agents. He
confessed that he was in Indianapolis to sell the
cocaine to Hand and that the sale had been
arranged a month prior in Cincinnati. Arambula
revealed that the source of the cocaine was Juan
Medina Gonzales. He also admitted that a few
months before this incident he had received
additional parcels from Gonzales containing
cocaine and marijuana.

  A grand jury indicted Arambula, Hand, and other
persons unknown with conspiracy to distribute
cocaine and possession with intent to distribute
cocaine under 21 U.S.C. sec. 841(a)(1) and sec.
846. Arambula pled guilty and agreed to provide
complete and truthful information regarding his
involvement and the involvement of others in
distributing controlled substances. To fulfill
his end of the plea agreement, he testified for
the government in Hand’s trial. The jury
convicted Hand.


  B.   Arambula’s Sentencing Hearing

  Arambula was subsequently sentenced by the same
judge that presided over Hand’s trial. The judge
expressed his belief that Arambula’s testimony at
Hand’s trial was not complete and truthful. The
government conveyed its satisfaction with
Arambula’s testimony and considered it credible
and complete. The government stood by the PSR,
which recommended no obstruction of justice
enhancement and recommended reductions under sec.
5C1.2, sec. 5K1.1 (substantial assistance), and
sec. 3E1.1 (acceptance of responsibility).
Arambula concurred with the government. The judge
held to his finding that Arambula’s testimony was
false and raised his offense level for
obstruction of justice and denied the reductions.

  The judge began his ruling regarding the
obstruction of justice enhancement by reciting
the elements of perjury: "I believe he has
provided false testimony; I believe he has done
so willfully; and it goes to matters that are
material." Tr. at 33. The judge proceeded to
discuss the first element--false testimony. The
judge enunciated: "What I need to do is make a
determination, as I said, based on the
preponderance of the evidence, as to whether Mr.
Arambula is providing truthful, complete
information about his involvement and the
involvement of others in this cocaine
distribution conspiracy." Tr. at 35. The judge
then outlined aspects of Arambula’s testimony and
concluded that it was not complete and truthful.

  In determining that Arambula’s testimony was
false, the judge parsed telephone records
unexplained at Hand’s trial. Despite the gap in
evidence at Hand’s trial as to who made the
telephone calls, and what was said during them,
the judge believed that the extensive records
were circumstantial evidence of a drug conspiracy
larger than Arambula had revealed. He found the
records in conflict with Arambula’s claim that
during his escapades in drug trafficking he had
only dealt directly with Mauricio Inecencio and
Hand, and indirectly with Gonzales. The judge
believed that Arambula had been involved in other
drug deals in Pittsburgh, Pennsylvania and
Columbus, Ohio. The judge felt that Arambula "was
holding back and protecting" other drug
traffickers. Tr. at 11. The judge stated: "If he
had been [more complete in his testimony],
perhaps it would have been possible to make cases
against" other players. Tr. at 42. Thus,
Arambula’s lack of forthrightness about others
amounted to false testimony.

  Further, the judge found that Arambula’s false
testimony was willfully given, because he
believed that Arambula had concocted an "exit
story" to blame Hand in order to protect others.
The court credited Hand’s defense, believing that
the conspiracy was grander than Arambula
revealed. At trial Hand’s defense was that he was
a small fish in a big pond. Arambula, however,
testified that the pond was actually rather small
(comprised of himself, Hand, Inecencio, and
Gonzales), but that Hand was definitely a fish.
As to the materiality element of perjury, the
judge did not articulate specific findings.
Indeed, the judge acknowledged that his concerns
"[did] not go directly to Mr. Hand’s guilt or
innocence on the conspiracy charge against him."
Tr. at 26. The judge noted that Arambula’s
testimony did not obstruct justice in the sense
that he was trying to protect his co-defendant.
Further, the judge recognized that Arambula’s
false testimony actually hurt Hand’s defense,
thus bolstering the government’s case. The
sentencing transcript is barren as to precisely
why the sentencing judge found that Arambula’s
false testimony was material for the purposes of
the obstruction of justice enhancement.

DISCUSSION

  A defendant who attempts to or does obstruct or
impede the administration of justice faces a two-
point base offense level sentence increase for
obstruction of justice. Obstruction of justice
includes committing perjury. See U.S.S.G. sec.
3C1.1, cmt. n.4 (b) (2000). A sentence may be
adjusted if the defendant provides perjurious
testimony in either the defendant’s own case or
a co-defendant’s case. Perjury for sentencing
purposes has been defined as perjury under 18
U.S.C. sec. 1621. Thus, perjury is providing
false testimony under oath or affirmation
concerning a material matter with the willful
intent to provide such false testimony, rather
than as a result of confusion, mistake, or faulty
memory. See United States v. Stokes, 211 F.3d
1039, 1045 (7th Cir. 2000) (citing United States
v. Dunnigan, 507 U.S. 87, 94 (1993)).

  In enhancing a defendant’s sentence for perjury,
a district court ought to render specific and
clear findings as to each element of perjury
(false, willful, and material). Nonetheless, we
have upheld adjustments when a court’s findings
have at least encompassed the factual predicates
of perjury. See United States v. Freitag, 230
F.3d 1019, 1026 (7th Cir. 2000).

  The sum of Arambula’s argument on appeal is as
follows. While the sentencing judge specified the
testimony it found false, the obstruction
enhancement was erroneous because Arambula’s
false testimony at Hand’s trial did not
constitute perjury, as perjury is false testimony
of a material matter. Citing United States v.
Senn, 129 F.3d 886, 898 (7th Cir. 1997) (quoting
United States v. Mustread, 42 F.3d 1097, 1106
(7th Cir. 1994)), Arambula protests that a matter
is material only if it is crucial to the question
of guilt or innocence. Since Arambula falsely
testified to facts inconsequential to the
question of Hand’s guilt, these facts were not
material, and thus not perjury. Arambula does not
dispute that he provided false statements;
rather, he rests his appeal on their materiality.


  Evidence is material when "if believed, would
tend to influence or affect the issue under
determination." U.S.S.G. sec. 3C1.1, cmt. 6
(2000). We have translated this to mean that
false testimony is material if it is "’designed
to substantially affect the outcome of the case.’"
United States v. Galbraith, 200 F.3d 1006, 1014
(7th Cir. 2000) (citations omitted). To put a
finer point on it, we have found false testimony
material when it was crucial to the question of
guilt or innocence. See id.; Senn, 129 F.3d at
898 (quoting Mustread, 42 F.3d at 1106); see also
United States v. Craig, 178 F.3d 891, 901-02 (7th
Cir. 1999) (affirming obstruction enhancement
where defendant falsely denied recruiting
fictitious students in large scam because denial
was material "to the question of her guilt"). An
assessment of the materiality of false testimony
to the issue under determination is crucial
because "’obstruction of justice’ refers to
efforts to impede the process of legal justice .
. . ." United States v. Buckley, 192 F.3d 708,
710 (7th Cir. 1999) (citations omitted). Thus,
"not every instance of false testimony under oath
warrants the enhancement," United States v. Gage,
183 F.3d 711, 715 (7th Cir. 1999), and "the
materiality of the lie becomes a focus of inquiry
because a lie that is immaterial to the justice
process is not a potential interference with it."
Buckley, 192 F.3d at 710. Therefore, the inquiry
is whether Arambula’s false testimony could tend
to influence the issue under determination--
namely, did Hand conspire to possess cocaine with
the intent to distribute it?

  We view Arambula’s false statements as
immaterial to this issue and not affecting the
outcome of the case. We liken Arambula’s
situation to those in United States v. Parker, 25
F.3d 442 (7th Cir. 1994) and United States v.
Senn, 129 F.3d 886 (7th Cir. 1997). In Parker, we
vacated an obstruction enhancement for a
defendant who admitted his guilt, but falsely
stated that he stole $200 rather than $1252 from
a bank. See id. at 449. The obstruction
enhancement was unwarranted because the false
statement was not material to his guilt or
innocence; he had admitted his guilt and the
amount taken was not an element of the offense.
Likewise, in Senn, the defendant admitted his
guilt in a conspiracy to distribute drugs. The
sentencing judge applied the obstruction
enhancement because the defendant had lied about
some of the details of his involvement;
specifically, about what had happened to the
marijuana after he agreed to accept it. Relying
on Parker, we vacated the enhancement because his
false testimony about these details was not
material. We reasoned:

It does not matter whether Weaver drove off with
the marijuana and sold it, whether he drove off
with it and gave it away, or whether he drove off
without it. By agreeing to accept the marijuana
in lieu of cash, he admitted his involvement in
the conspiracy to distribute marijuana.

Id. at 899. We found that the "prevarications on
the details cannot be considered crucial to the
question of guilt." Id.

  In this case, the district court had a beef
with the fact that Arambula minimized the scope
of the conspiracy as to other drug traffickers
not on trial with Hand. Here, the defendant
(Arambula) testified that the co-defendant (Hand)
was guilty. Arambula fingered Hand and Hand was
convicted. The district court, however, believed
Arambula’s finger ought to have pointed to others
as well. But is this extra pointing material?

  Certainly in a conspiracy case it is essential
to define the conspiracy’s scope. The Indictment
defined the scope by charging Arambula, Hand, and
others unknown with conspiring to distribute
cocaine on or about April 12-14, 1999. While
evidence about the entire conspiracy would have
assisted the government in charging other
players, the government was satisfied with
Arambula’s story and only put Hand on trial. ’Tis
true, Arambula’s minimization of the conspiracy
probably hurt Hand’s defense by undermining his
claim that he was a small fry in a bigger scheme.
This, however, does not detract from the fact
there is not the slightest hint that Arambula’s
testimony that Hand was indeed a compatriot--the
issue under determination--was false. We do not
see how it would have been germane for the
government to elicit testimony from Arambula that
would not have aided the case at hand. Whether
others were involved was not material to the
question of Hand’s guilt or innocence. It seems
a needless complication to lead Arambula on a
wild goose chase about individuals not seated at
the defense table.

  The government was satisfied with the scope of
Arambula’s testimony, and has not indicated that
its investigation was impeded because Arambula
limited his testimony to only Hand, Inecencio,
and Gonzales. Quite to the contrary, it credits
Arambula’s testimony with helping to seal Hand’s
fate. Indeed, the government even reveals that it
would not prosecute Arambula for perjury, and
concedes that if it did, it would likely fail.
So, any falsehood Arambula uttered did not seem
to obstruct or impede the government’s case. This
is important because we must also look to whether
the falsity impeded or obstructed the
investigation, sentencing, or prosecution of the
offense. See U.S.S.G. sec. 3C1.1(A). For example,
in United States v. Francis, the obstruction
enhancement was applicable because a defendant
retracted statements he made about co-
conspirator’s involvement in a drug distribution
scheme. See 39 F.3d 803, 811 (7th Cir. 1994). In
affirming the obstruction enhancement, we
believed that the retracted statements were
material because the "criminal investigation of
the conspiracy was still underway and obviously
any information concerning his co-conspirators
was material evidence." Id. The retraction
impeded the investigation and prosecution because
the government had to file a new indictment
dismissing the charges against a co-conspirator
implicated by the retracted statement. See id.
The retraction was material because it went to
the heart of whether the individual was involved
in the conspiracy; in other words, whether he was
guilty or innocent. As mentioned, there is no
notion here that Arambula’s lies impeded or
obstructed the investigation, sentencing, or
prosecution of Hand.

  Furthermore, the nature of the false testimony
provided by Arambula is unlike that which we have
previously found to merit an obstruction
enhancement when one co-defendant testifies
against another. The obstruction enhancement has
been appropriate where a defendant testifies
falsely that a co-defendant was innocent. See
United States v. Kroledge, 201 F.3d 900, 905 (7th
Cir. 2000). Testifying falsely to exculpate a co-
defendant is material because it speaks to their
guilt or innocence. See id. Certainly testimony
as to whether someone is guilty or innocent is
material to whether they are guilty or innocent.
This situation is inapposite since Arambula did
not testify that Hand was innocent. Quite to the
contrary. Thus, since we find that Arambula’s
false testimony was not material to the issue
under determination, we vacate the obstruction of
justice enhancement.

  The government briefly argues, citing United
States v. Letchos, 316 F.2d 481, 484 (7th Cir.
1963), that even if Arambula’s false testimony
was not material to any elements of the offense,
it was material to Arambula’s credibility.
Letchos involved a perjury prosecution under 18
U.S.C. sec. 1621 against a witness who falsely
testified during cross-examination in the trial
of a defendant charged with making false
statements on his income tax returns. See 316
F.2d at 482. Prior to the trial, IRS agents
interviewed the witness to gather evidence about
whether the defendant had been a beer salesman
during the years in which he claimed tax
deductions for such activity. The witness told
the IRS that he did not know the defendant. At
trial, however, the witness testified for the
defendant, asserting that he knew the defendant
and that he had indeed been a beer salesman. On
cross-examination, the government asked the
witness whether he had previously told the IRS
the opposite, and the witness denied having told
the IRS such. The government impeached him with
his prior inconsistent statement. The witness was
subsequently tried for perjury for the false
testimony. The witness argued that his false
testimony was not material. We disagreed, finding
the testimony material to the question of the
defendant’s guilt for tax fraud. In so finding,
we stated: "Impeachment of a witness goes to his
credibility and questions on cross-examination
for this purpose may be material in the sense
required for a perjury conviction." See id. at
484. We later addressed this passage in Letchos
in United States v. Akram, 152 F.3d 698 (7th Cir.
1998).

  Akram involved a perjury conviction against the
defendant under 18 U.S.C. sec. 1623(a), based on
lies made during cross-examination during the
defendant’s own trial. See id. at 699. The
defendant argued that his false testimony was not
material. Relying on Letchos, the government
argued that the statements were material because
they went to the defendant’s credibility. We
reasoned that Letchos did "not say that questions
on cross-examination are always material . . . ."
Id. at 702. We went on to state that in
determining whether false testimony is material,
we are required "to evaluate whether the
credibility of the defendant is an issue capable
of influencing the jury." Id. We recognized that:

[C]ertain lies on cross-examination might be too
trivial to count as being relevant to the
question of credibility. Similarly, some cases
might involve such irrefutable and objective
proof that the issue of the defendant’s
credibility is itself a minor consideration and
not one capable of influencing the jury’s
decision.

Id. We believe Arambula’s case is one in which
his false statements were not pertinent to the
case at hand. Indeed, he testified truthfully to
the material issue of whether Hand was a co-
conspirator. Any irregularities as to the details
of the involvement of others was of no matter for
the purposes of resolving Hand’s culpability.
There was certainly objective proof of Hand’s
guilt (for example, the cocaine or the telephone
records) upon which the jury’s consideration
could have safely rested. We sympathize with the
district court’s hunch that the drug distribution
ring was larger than revealed. Nevertheless, the
application of the obstruction enhancement was
improper because the record has not born out that
Arambula’s testimony obstructed justice in the
case against Hand.

  Finally, we decline Arambula’s request to have
the district court reconsider its denial of a
reduction for acceptance of responsibility. It
was proper that the district court found that
although Arambula implicated himself and Hand, he
diminished his role in and the true scope of the
conspiracy, and thus did not accept
responsibility. See Gage, 183 F.3d at 717
(affirming denial of reduction for acceptance of
responsibility based on false representations by
defendant because the "district court was
entitled to conclude that [the defendant’s]
failure to come clean about the limits of his
memory was inconsistent with a full acceptance of
responsibility").
CONCLUSION

  We find error with the enhancement for
obstruction of justice, but not with the denial
for an acceptance of responsibility reduction.
Therefore, Arambula’s sentence is Vacated and
Remanded to the district court for resentencing
consistent with this opinion.
