                              UNPUBLISHED

                    UNITED STATES COURT OF APPEALS
                        FOR THE FOURTH CIRCUIT


                              No. 06-4738



UNITED STATES OF AMERICA,

                  Plaintiff - Appellant,

           v.


MICHAEL IBANGA,

                  Defendant - Appellee.



Appeal from the United States District Court for the Eastern
District of Virginia, at Norfolk. Walter D. Kelley, Jr., District
Judge. (2:04-cr-00227-WDK)


Argued:   March 21, 2008                    Decided:   April 1, 2008


Before NIEMEYER and MICHAEL, Circuit Judges, and C. Arlen BEAM,
Senior Circuit Judge of the United States Court of Appeals for the
Eighth Circuit, sitting by designation.


Vacated and remanded by unpublished per curiam opinion.


ARGUED: Richard Daniel Cooke, OFFICE OF THE UNITED STATES ATTORNEY,
Richmond, Virginia, for Appellant.         Trey Robert Kelleter,
VANDEVENTER & BLACK, L.L.P., Norfolk, Virginia, for Appellee. ON
BRIEF: Chuck Rosenberg, United States Attorney, Alexandria,
Virginia, Laura M. Everhart, Assistant United States Attorney,
OFFICE OF THE UNITED STATES ATTORNEY, Norfolk, Virginia, for
Appellant.


Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:

           This appeal by the government arises out of a drug

trafficking   and       money    laundering          prosecution     of    a   group     of

individuals that included Michael Ibanga.                        The jury convicted

Ibanga of conspiracy to launder money and acquitted him of the drug

trafficking charges.            Nonetheless, the district court found at

sentencing that the government had proven by a preponderance of the

evidence   that        Ibanga    had    trafficked          in     124.03      grams     of

methamphetamine (meth).           Although acquitted conduct proven by a

preponderance     of    the     evidence       may    be   taken    into    account     in

sentencing, the district court sentenced Ibanga to a prison term

that did not reflect any drug trafficking.                  The government appeals

Ibanga’s sentence, arguing that the district court contravened 18

U.S.C. § 3661 by categorically refusing to consider acquitted

conduct -- Ibanga’s drug trafficking found by the court -- in

determining his sentence.           Because it appears that the district

court   applied     a    standard      that      would      categorically           exclude

consideration     of    acquitted      conduct        in   every    case,      we    vacate

Ibanga’s sentence and remand for resentencing.



                                           I.

           On January 27, 2005, a grand jury sitting in Norfolk,

Virginia, returned a superseding indictment charging Ibanga, among

others, with conspiring to distribute and possess with intent to


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distribute 50 grams or more of meth and 500 grams or more of a

substance       containing      meth     (count      1);       conspiring      to     conduct

financial transactions involving the proceeds of meth distribution

(count    2);     conducting      a     financial        transaction       involving       the

proceeds of an unlawful activity (count 19); distribution of

approximately 20.1 grams of meth (count 28); aiding and abetting

the    possession    of    approximately           one    kilogram       of   a     substance

containing meth with intent to distribute (count 36); and aiding

and    abetting    the    possession         of   approximately         500    grams      of   a

substance containing meth with intent to distribute (count 48).

After a jury trial Ibanga was convicted of conspiracy to launder

money (count 2) and acquitted on all other counts.

            Under U.S.S.G. § 2S1.1 the base offense level for a money

laundering      conviction      is      established       by    using    the       underlying

offense    that     produced      the     laundered        funds    if     the      defendant

committed the underlying offense. Here, the underlying offense was

drug    trafficking,      but     the    jury     acquitted       Ibanga      on    the   drug

trafficking counts. Nevertheless, acquitted conduct may be used at

sentencing if the sentencing court finds the conduct has been

established by a preponderance of the evidence.                         United States v.

Watts, 519 U.S. 148, 157 (1997).                  Based upon the trial testimony,

the    presentence       report      (PSR)    recommended         attributing         7.67613

kilograms of trafficked meth to Ibanga and therefore assigned a

base offense level of 38 according to U.S.S.G. § 2D1.1(c), the drug


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trafficking quantity table.          The PSR also recommended a two-step

increase in offense level for possession of a dangerous weapon, a

two-step increase for the money laundering conviction, and a three-

step increase for Ibanga’s supervisory role in the offense.                  The

PSR assigned Ibanga a criminal history category of II based upon

several recent driving offenses.

           The district court engaged in an exhaustive sentencing

effort, conducting three sentencing hearings and holding several

off-the-record status conferences.            Of the co-conspirators who

testified at trial, the district court found only John Gelardi to

be   credible;   and,   based   on    Gelardi’s    testimony,   found,      by   a

preponderance of the evidence, that 124.03 grams of meth were

attributed to Ibanga.     The court also found that Ibanga was a minor

player in the conspiracy and sustained Ibanga’s objection to the

sentencing    enhancement   for      having   a   supervisory   role   in    the

offense.     Finally, the court sustained Ibanga’s objection to the

firearm possession enhancement and reduced his criminal history

category to I.

           After these findings and adjustments made by the district

court were taken into account, the resulting Guidelines range was

a sentence of 151 to 188 months in prison.              The district court

asked the probation officer to calculate the Guidelines range

without considering the acquitted conduct (the 124.03 grams of

trafficked meth), and this calculation produced a range of 51 to 63


                                       4
months.     The court then confined itself to the 51 to 63 months

range, noting that sentencing based upon acquitted conduct “makes

the constitutional guarantee of a right to a jury trial quite

hollow.”     J.A. 1515.       In considering the 18 U.S.C. § 3553(a)

factors, the court found that Ibanga’s religious conversion and

“model”    behavior   since   being    released    on    bond   seemed   “quite

genuine.”     J.A. 1516-17.      This conduct, the court determined,

alleviated any concern about the need to protect the public with a

longer sentence.      However, the court also described Ibanga’s money

laundering activities as “very serious” and found no reason to

depart from the Guidelines range (51 to 63 months) that did not

include acquitted conduct.            J.A. 1517.        The court imposed a

sentence of 55 months.         In a written opinion issued after the

notice of appeal was filed, the district court further explained

its reasoning, stating that sentencing based upon acquitted conduct

would not promote respect for the law as it would thwart the

historic roles of the jury as finder of fact, protector against

government overreaching, and arbiter of guilt or innocence.                The

government appeals Ibanga’s sentence, contending that the district

court violated 18 U.S.C. § 3661 by applying a standard that would

categorically exclude the consideration of acquitted conduct at

sentencing.




                                       5
                                 II.

            Since Ibanga was sentenced, the Supreme Court has issued

opinions clarifying the appropriate procedures and standards for

federal sentencing and the appellate review of sentences.            In Gall

v. United States, 128 S. Ct. 586 (2007), the Court explained that:

       a district court should begin all sentencing proceedings
       by correctly calculating the applicable Guidelines range.
       As a matter of administration and to secure nationwide
       consistency, the Guidelines should be the starting point
       and the initial benchmark. The Guidelines are not the
       only consideration, however. Accordingly, after giving
       both parties an opportunity to argue for whatever
       sentence they deem appropriate, the district judge should
       then consider all of the § 3553(a) factors to determine
       whether they support the sentence requested by a party.
       In so doing, he may not presume that the Guidelines range
       is reasonable. He must make an individualized assessment
       based on the facts presented.     If he decides that an
       outside-Guidelines sentence is warranted, he must
       consider the extent of the deviation and ensure that the
       justification is sufficiently compelling to support the
       degree of the variance. . . .      After settling on the
       appropriate sentence, he must adequately explain the
       chosen sentence to allow for meaningful appellate review
       and to promote the perception of fair sentencing.

Id. at 596-97 (citations omitted); see also Kimbrough v. United

States, 128 S. Ct. 558, 564, 570 (2007) (While a district court

must   “include   the   Guidelines   range   in   the   array   of   factors

warranting consideration” and “give respectful consideration to the

Guidelines,” it “may vary [from Guidelines ranges] based solely on

policy     considerations,    including      disagreements      with     the

Guidelines.”    (alteration in original) (quotation marks omitted)).

            An appellate court reviews any sentence, whether inside

or outside the Guidelines range, “under a deferential abuse-of-

                                     6
discretion standard.”            Gall, 128 S. Ct. at 591.              The reviewing

court must first ensure that the sentencing court did not commit a

significant procedural error, such as failing to calculate (or

improperly     calculating)        the    Guidelines         range,    treating     the

Guidelines     as   mandatory,      failing      to    consider       the    §   3553(a)

sentencing     factors,     or    neglecting      to    explain       adequately    the

sentence imposed.         Id. at 597.         If the sentence is procedurally

sound,   the    appellate        court    then    considers        the      substantive

reasonableness      of    the    sentence     under    an    abuse     of    discretion

standard, “giv[ing] due deference to [a] District Court’s reasoned

and reasonable decision that the § 3553(a) factors, on the whole,

justified the sentence.”           Id. at 597, 602.

          Section 3661 of Title 18 provides that “[n]o limitation

shall be placed on the information concerning the background,

character, and conduct of a person convicted of an offense which a

court of the United States may receive and consider for the purpose

of imposing an appropriate sentence.”                  This information includes

acquitted conduct proven by a preponderance of the evidence.                        See

Watts, 519 U.S. at 151-57.

          The       district      court       conducted      Ibanga’s        sentencing

proceedings    with      great    deliberation,        but   the   court      committed

significant procedural error, see Gall, 128 S. Ct. at 597, by

categorically excluding acquitted conduct from the information that

it could consider in the sentencing process.                  Therefore, we vacate


                                          7
Ibanga’s sentence and remand for resentencing in accordance with

the guidance provided by Gall and Kimbrough.



                                               VACATED AND REMANDED




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