Three co-defendants, Joshua, Luella, and Saori Jao, conspired to steal money from their employer by using fraudulent documents to collect unearned commissions. All three pleaded guilty, acknowledging that their Sentencing Guidelines ranges would depend on the calculated loss amount. Although the government had stipulated to a loss amount under $40,000 in the plea agreements, the district court in Guam determined the actual loss was nearly $240,000. The judge reached this figure by reviewing presentence investigation reports, discovery materials, and witness testimony. The district court sentenced the defendants based on this higher loss calculation and ordered restitution accordingly. The defendants appealed, arguing the court erred in its loss calculation, failed to provide adequate notice before questioning witnesses, and that the judge should have been disqualified for bias.
The Ninth Circuit applied clear error review to the district court's factual findings regarding monetary loss and abuse of discretion review for the application of the Sentencing Guidelines. The court first addressed whether the district court erred by calling and questioning witnesses. Citing 18 U.S.C. § 3661, the court noted that no limitation exists on the information a court may consider for sentencing. The opinion emphasized that the preferable procedure in this Circuit is for district courts to conduct their own questioning when they feel it necessary to receive testimony supporting a sentence different from the prosecutor's recommendation. The court found no evidence that the judge abandoned neutrality or took on the prosecution's role. Regarding due process, the court held that the plea agreements themselves provided sufficient notice that the court was under no obligation to accept the government's recommendations and could impose any sentence up to the statutory maximum. The court also found that the defendants received a continuance and additional time to object to the amended presentence reports. On the substantive issue of loss calculation, the court reiterated that the Guidelines require only a reasonable estimate of loss based on available information. The record contained a chart listing over $225,000 in fraudulent commissions, supported by probation officer and victim testimony. The defendants failed to identify any specific transaction in the chart as factually incorrect. Finally, the court rejected the motion to disqualify the judge. Under the extrajudicial-source doctrine, recusal generally requires conduct outside the proceedings. The court found that Judge Manglona's thorough and impartial questioning of witnesses did not create an appearance of impropriety.
The defendants' sentences and restitution orders remain in effect. The decision reinforces the authority of district courts to independently determine loss amounts using evidence beyond plea agreement stipulations when supported by the record. It clarifies that judges may actively question witnesses at sentencing to resolve factual disputes without risking disqualification, provided they remain impartial. The case is unpublished and serves as precedent only as provided by Ninth Circuit Rule 36-3.