Articles Posted in Federal Sentencing

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In white-collar cases, loss drives the sentencing guidelines. If a person is convicted of a federal fraud charge, probably the single biggest legal issue that will matter to that person’s sentence is what the loss amount is.

By contrast, the biggest thing about the case that will matter is what judge the person draws. It’s better to have a great sentencing judge and a high loss amount than a low loss amount with a judge who sentences more aggressively.

But I digress.

money-choise-concept-1439274-m.jpgThe government’s view of most fraud cases, in my experience, benefits from the clarity of hindsight. After everything has fallen apart, it’s easy to see that, say, a person selling an investment vehicle was using a new investor’s funds to pay someone who is clamoring for his or her money back.

In hindsight, it’s easier to see a Ponzi scheme than it may be in the crush of the moment. Some people plan to run Ponzi schemes, others fall into them through circumstance. Such is the way of the world.

In any event, loss for a Ponzi scheme can be tricky. Generally, the loss amount under the sentencing guidelines is the amount of money that was reasonably foreseeable to be lost by the victims. And it’s what’s reasonably foreseeable for the person committing the crime.

Ok, fair enough. The trouble is with the “credit against loss” rule. The sentencing guidelines explain that when the person being sentenced has paid some money back before the authorities or the victims cottoned onto the scheme, that money should be deducted from the loss amount.

This makes sense. If my son steals $20 from my wallet, but feels bad and puts it back before I notice, he should get some credit for that.

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Hiring is always hard, especially in a small office.

You have work that needs to be done. You can’t do it all. Maybe you’re a professional, like a doctor, and some of the work isn’t the best use of your time.

So you hire someone to help. Really, how much do you know about a person as the result of a hiring process? Yet, despite that, you give them responsibility over a portion of your business.

And you trust them.

As the First Circuit’s case in United States v. Zehrung shows, sometimes that trust is not repaid in the way you expect.

69133_medical_exam_equipment.jpgDawn Zehrung worked in a doctor’s office. While the doctor was seeing patients – he had 14,000 patients – she was responsible for sending the office’s bills to Medicare, the state of Maine’s Medicaid program, and other insurance companies.

She also had unsupervised control of the firm’s checkbook, accounts payable, and copays from patients.

In what I suspect the doctor now sees as folly, Ms. Zehrung was paid a bonus if the firm did well.

Shortly after she took over the billing, the firm’s monthly revenues went up 33%. The good doctor asked her why they were making so much more money all of a sudden. Ms. Zehrung said she was simply working back accounts receivable.

The doctor accepted this explanation. I’d like to think he drove off in a new sports car after hearing it.

Later, the doctor thought the continued increase was as a result of laser hair removal procedures that they had started doing.

As it happens, Ms. Zehrung was not just working the receivables. And, doubtless there’s money to be made in laser hair removal, but that’s not how the money in this office was being made.

It was, instead, being made through simple upcoding.

Ms. Zehrung would take the doctor’s notes about what had been done, then she would submit bills for procedures that paid more.

Also, she would destroy some of the records that showed what was actually done.

Finally, the doctor was alerted by a nurse who spotted the problem. I’d like to think he was reached by the nurse on his cell phone, while he was sitting beachside drinking something with an umbrella in it.

He asked Ms. Zehrung to explain herself. Eventually, he made a serious of calls that wound up with Ms. Zehrung being arrested, charged, and pleading guilty to healthcare fraud.

At sentencing, there was, apparently, only one disputed issue – whether Ms. Zehrung should be subject to an abuse of position of trust enhancement.

The government said she should – she abused the good doctor’s trust. He trusted her and she betrayed that trust.

She said she shouldn’t – the enhancement is normally appropriate for folks who have some special skill with discretion, like a lawyer, who abuses the trust that comes with that skill.

It’s clear that, say, a bank teller who embezzles is not eligible for an abuse of position of trust enhancement.

So, was Ms. Zehrung’s trust anything more than one finds in a run of the mill employee – someone who is trusted to do an important job in a small business?

The district court applied the enhancement. As the court of appeals explained, the court reasoned:

She did the billing with “no supervision,” the judge added – “[t]here was no direct oversight, no review,” he repeated again – and “she assumed complete financial control within the office.” And, the judge suggested, her position made it significantly easier for her to commit the crime charged.

The First Circuit reversed and remanded for more factfinding. These remarks, it concluded, were not enough to explain whether the enhancement was justified.

This case is a nice slalom through the different ways the abuse of position of trust enhancement can apply. And it’s a lovely read.

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Erica Hall was an office assistant at an OB/GYN office in Coral Springs, Florida. The job may not have paid well, because Ms. Hall was trying to make some extra cash on the side by selling patient information to some folks who would use it to get fake credit cards.

1385735_sterilisation.jpgMs. Hall was told by the folks the government described as her coconspirators that for every patient’s personal information she handed over, she’d be paid $200. If the information was able to be used to create a credit card that could be used, she’d be paid $1000 for that patient information.

Even though Ms. Hall handed over information for between 65 to 141 folks, and that 16 of those people had information that could be used to make fake credit cards, she was only paid $200.

If you can’t trust a co-conspirator, who can you trust.

Ms. Hall pled guilty to conspiracy to commit bank fraud, conspiracy to identity theft, and wrongfully obtaining and transferring someone’s health information.

When the probation officer wrote her presentence report, she was given a four-level enhancement for the offense involving more than 50 victims.

Ms. Hall objected to the “more than 50 victim” enhancement – she argued that a “victim” for the purposes of the fraud guidelines, is only someone who suffers and actual loss.

The district court didn’t agree though. The district court “concluded that the intentional transfer of information in exchange for consideration constituted actual use for the purposes of § 2B1.1(b)(2)(B).”

The Eleventh Circuit, in United States v. Hall, reversed the district court and vacated the sentence based on this application of the number of victims enhancement.

First, as the court of appeals pointed out,

Application Note 4(E) provides that a “‘victim’ means (i) any victim as defined in Application Note 1; or (ii) any individual whose means of identification was used unlawfully or without authority.”

So, when the identity information was transferred, was that a use of the information?

The Eleventh Circuit said no:

When we apply the rules of statutory construction to the enhancement, we disagree with the district court’s interpretation. We first consider the plain meaning of the word “used” as elaborated upon in Application Note 4E. As the Supreme Court noted in Bailey, the word “use” means “to convert to one’s service,” “[t]o employ,” “to avail oneself of,” and “to carry out a purpose or action by means of.” 516 U.S. at 145, 116 S. Ct. at 506. In other words, “use” is the “application or employment of something . . . for the purpose for which it is adapted.” Black’s Law Dictionary 1681 (9th ed. 2009). “These various definitions of ‘use’ imply action and implementation.” Bailey, 516 U.S. at 145, 116 S. Ct. at 506. On the contrary, the definition of “transfer” is “[t]o convey or remove from one place or one person to another; to pass or hand over from one to another, esp. to change over the possession or control of” and “[t]o sell or give.” Black’s Law Dictionary 1636. Transfer means something distinctly different than use.

If I transfer my car to you, that doesn’t necessarily mean that I use it – I could just sign over the title. So, as the court of appeals found, transferring identity information – as Ms. Hall did – is a separate thing than using identity information – the thing that gets you the enhancement for the number of victims.

And Ms. Hall will go back for resentencing.

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The federal sentencing guidelines are probably the most problematic in three areas – fraud, child pornography, and drugs.

Today’s case, United States v. Diallo, illustrates two of the big problems with the fraud guidelines. First, they’re really complicated – so complicated that federal prosecutors sometimes don’t really understand how they work. In this case, the prosecutor at sentencing took a position so clearly inconsistent with the guidelines that the government abandoned it for the appeal.

(An astute reader will notice that this means the district court went along with the federal prosecutor’s flawed guidelines understanding. It’s a shame, but c’est la guerre.).

Second, the fraud guidelines are driven by what the “intended loss” is. And “loss” for sentencing guidelines purposes is a squishy notion. And squishy notions are bad when you’re trying to figure out how much prison time to give someone.

785364_creditcard.jpgCredit Card Problems

Issa Diallo had a problem with credit cards. Sure, like many Americans, he charged more than he should of. Unlike many Americans, he put these charges on cards that weren’t issued to him.

He went into a Wegman’s (it’s a grocery store, for our geographically diverse readers) and bought 26 gift cards with a counterfeit credit card. The next day he came back to do it again and was arrested.

Law enforcement went into his car with a warrant. They found a treasure trove of stolen identity documents:

53 counterfeit credit cards, a counterfeit Louisiana driver’s license, 24 gift cards, a Global Positioning System (GPS), a laptop computer, a thumb drive, and a skimming device, which is a hand-held device that copies, stores, and encodes credit card information from a credit card’s magnetic strip. A subsequent search by Secret Service agents resulted in the discovery of a second thumb drive and another gift card. Searches of the laptop and thumb drives revealed over 200 compromised Discover, Visa, and MasterCard credit card accounts.

He pled guilty to having counterfeit credit cards under 18 U.S.C. § 1029(a)(3). In the plea, there was no agreement about the number of victims or the amount of the loss. These are, of course, massively important to figuring out the guidelines range under U.S.S.C. § 2B1.1.

What’s It Take To Be A Victim?

At sentencing, a Secret Service agent testified that there were credit cards for 51 financial institutions in Mr. Diallo’s possession.

There’s a four-level guidelines enhancement if there are more than 50 victims.

The government said that meant there were more than 50 victims, so the enhancement for more than 50 victims should apply.

The defense lawyer argued that “victim” for purposes of the number of victims enhancement, means people who actually lost money as a result of Mr. Diallo’s criminal conduct.

What’s the loss amount?

The Secret Service Agent testified that only $160,000 was actually charged on the cards that Mr. Diallo had. Though when you add up the credit limits for each of the cards, the total amount that could have been charged was $1.6 million.

So, since “loss” for the guidelines purposes means the higher of actual loss or “intended loss” – the amount that a person could reasonably think could have been lost as a result of the office – the government said that Mr. Diallo should have known that the loss could have been $1.6 million.

Mr. Diallo’s attorney was able to get the agent to acknowledge that there was no way Mr. Diallo could have known what the credit limit on the cards was absent a subpoena.

The District Court Speaks

These were hotly contested questions. There was testimony and argument. The Third Circuit reports that:

The Court’s analysis on these two issues consisted of the following: “The intended loss for credit cards he personally used and the cards he manufactured and provided to others totaled $1.6 million. Over 50 financial institutions were affected by his actions. So obviously it is a very serious offense.”

It’s not the most satisfying way to grapple with a hotly litigated legal issue.

The Appeal

On appeal, the government – perhaps reading the commentary for the sentencing guidelines that applied to this case relating to the number of victims enhancement for the first time – acknowledged that “victim” means “someone who suffered a loss.”

Since not all of the financial institutions had cards that were actually used by Mr. Diallo, there weren’t 50 or more companies that were actually harmed. So the government abandoned the “number of victims” argument.

Good on them for admitting their error. Perhaps it would have been better to do that before the sentencing hearing, but better late than never.

Turning to the loss amount issue, the Third Circuit started by setting the stage

This appeal requires us to determine how sentencing courts should calculate what “pecuniary harm was intended to result” from credit card fraud when the fraud’s perpetrator did not know the credit limit, which is the potential loss amount from the stolen credit card.

The appellate court reasoned that if the district court had really done a searching analysis and decided that there was a reasoned basis for thinking that Mr. Diallo meant to take the full limit of each card, that could be supported, perhaps, depending on how good the reasoning was.

But that’s not what happened here. And the Third Circuit was really not impressed with what the district court did.

from the District Court’s statement at sentencing–“The intended loss for credit cards he personally used and the cards he manufactured and provided to others totaled $1.6 million” App. 30-31–we would be speculating as to what evidence or argument was the basis for the District Court’s finding that $1.6 million was Diallo’s intended loss amount. This type of “speculation ‘is inappropriate’ in light of the inherently discretionary nature of the sentencing court’s decision.”

The case was sent back for resentencing.

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Michael Roussel used to be a Captain in the New Orleans Police Department. As you might expect, he was convicted of bribery.

After his conviction at trial, he went to sentencing. The judge determined that an enhancement for receiving more than one bribe was warranted. The Fifth Circuit, in United States v. Rousel, disagreed.


Mr. Roussel was friends with Joey Branch. As a result of Mr. Branch’s plea and cooperation agreement with the federal government, one suspects that they are no longer friends.

But back in 2008, Mr. Branch was an entrepreneur trying to place private security guards and Mr. Roussel was a police official with deep connections in a police force that has a tradition of officer’s moonlighting as private security guards.

There was synergy in their relationship.

Of course, the thing about success is that one naturally wants it to continue and build. What was once an exciting threshold quickly starts to look like a stale plateau. And so it was with Mr. Branch and Mr. Roussel. Soon, they were working together to try to get more business for Mr. Branch’s company. And that involved recorded calls to a confidential informant.

The informant worked for an energy company, and part of his job was to hire security guards during natural disasters. Roussel, Branch, and the informant agreed that uncertified, but falsely represented as certified, guards would be hired by the informant’s company in exchange for the three splitting the profits and a fake job for the informant’s wife.

Mr. Roussel ultimately gave $1,000 to the informant as earnest money of a sort. He and Mr. Branch were arrested soon after that – no other money was made.

Is Each Payment A Separate Bribe?

At sentencing, the district court determined that Mr. Roussel should receive a guidelines enhancement for being involved in multiple bribes.

Here’s what the district court said:

[w]hat was intended was a series of actions over a period of time. This contract was to continue for some period of time in the future . . . . It could not be anticipated exactly when they would occur, but whenever there would be a presidentially declared natural catastrophe or emergency and Entergy would be required to immediately beef up its security force, then . . . Gladius, would be called upon to supply security officers, . . . but in any event, it seems to me that that is very different from a one-time agreement to pay a bribe that is then just paid over in installments. This was going to be a series of actions. Effectively another bribe to be paid every time there was another event that occurred.

If you’re bribing a public official and tell him that you’re going to give him, say $10,000 for selecting your bid for a federal contract, and you pay him in two installments of $5,000, is that one bribe or two? One can see how this could be a hard question.

Here, though, the Fifth Circuit thought it wasn’t that tricky – in counting the number of bribes, you don’t look at all the stuff that could have happened if the full deal went through. Instead, you look at what actually happened.

Or, as the court of appeals said

Simply put, the government proved the payment of only one bribe–the $1,000 “good faith” money to Dabdoub. The rest was all speculative.

Mr. Roussel is going back for resentencing.

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If Mitt Romney is right that 47% of Americans think of themselves as victims, then the Second Circuit’s opinion in United States v. Lacy may be deeply unpopular.

Like Mitt Romney, Kirk Lacey and Omar Henry had a vision for the future.

Unlike Mitt Romney, their vision involved short sales, straw buyers, and a little light mortgage fraud.

Like Mitt Romney, Mr. Lacey and Mr. Henry were not able to see their vision realized.

MTC Real Estate, Inc.

Mr. Lacey and Mr. Henry worked at MTC Real Estate.

MTC would buy houses in a short sale, then find a straw buyer who had no intention of making mortgage payments. That person would buy the house at a price higher than the one MTC bought it for. MTC would make the difference, the straw buyer would default, and the bank that loaned the money was left holding the bag.

1400144_vintage_radio_2.jpgTo find enough straw buyers, MTC advertised on the radio. Straw buyers were promised $50,000 for buying a house. Some of the straw buyers were even paid what they were promised.

It was a simple and deeply illegal business.


Mr. Lacey and Mr. Henry – along with eight others – were charged with conspiracy to commit bank and wire fraud for this real estate plan.

Mr. Lacey and Mr. Henry – unlike the eight others – went to trial. They lost.

The government, at sentencing, asked for a two-level upward enhancement of their guidelines under U.S.S.G. § 2B1.1(b)(2)(A)(ii), which says:

If the offense. . . (ii) was committed through mass-marketing, increase by 2 levels;

Mr. Lacey and Mr. Henry argued that this enhancement shouldn’t apply – the radio ads were directed at straw buyers who were not victims. The banks were the victims here, not the straw buyers. In fact, the straw buyers even made $50,000 each. Much of the time.

As the Second Circuit put it,

The district court agreed with the government, noting that “the MTC marketing campaign was critical to the success of the fraud” because the marketing was “how MTC found people with distressed properties that could be exploited.” The district court therefore held that although the mass-marketing was not directed at the victims of the fraud (that is, the banks that made the mortgage loans), the mass-marketing was still “relevant conduct” to the offense and so the enhancement should apply.

Mr. Henry was sentenced to a year and a day – allowing him to receive good time credit from the Bureau of Prisons. Mr. Lacey was sentenced to 46 months.

The Second Circuit and Fraud Victims

The Second Circuit reversed finding, basically, that

After a careful reading of the Guidelines and other relevant authority, we hold that the mass-marketing enhancement is properly applied only when the targets of the mass-marketing are also in some way victims of the scheme. Because it is not clear on the current record whether the straw buyers who were the targets of the mass-marketing in this case were in some sense victims, we will remand to the district court for further factfinding.

The court of appeals looked at the language of the mass-marketing enhancement and noted that the offense has to be “committed through mass-marketing.”

As at least one other Circuit has recognized, an offense is “committed through mass-marketing” when mass-marketing is used to recruit or deceive victims of the offense, not when mass- marketing targeted at audiences other than victims is used in connection with the fraud in some other, more tangential manner. See United States v. Miller, 588 F3d. 560, 568 (8th Cir. 2009).

So, to the Second Circuit’s way of looking at this,

It is not enough that a scheme may be advanced by the use of mass marketing techniques; a scheme is committed through mass-marketing only when the mass marketing is directed toward individuals who will be harmed by the scheme.

Indeed, the language surrounding the enhancement for mass-marketing helped the Second Circuit reach this reading:

All the other subsections of § 2B1.1(b)(2) base enhancements on the number of victims. Indeed, the mass-marketing enhancement is posed as an alternative to the smallest number of victims in an escalating series of adjustments based on rising numbers of victims. The pattern thus strongly suggests that the enhancement
scheme is designed to measure the scope of the wrong by the number of victims, and that the use of mass-marketing is relevant even when the number of actual victims is small, because fraudulent mass-marketing creates a large number of potential victims.

So the district court’s reasoning was off, and the case has to be remanded.

Possible Defeat from the Jaws of Victory

But, of course, nothing is as simple in the land of federal criminal appeals.

The court went on to say that

If a mortgage fraud scheme predictably results in pecuniary harm to unwitting, deceived straw buyers, the straw buyers have sustained “actual loss” and are therefore “victims” within the meaning of the Guidelines. They are therefore properly considered under the mass-marketing enhancement.

Not content to let a district court judge figure out how to find that the enhancement applies, the Second Circuit went on to explain exactly what the district court would have to look for on remand:

Returning to the facts of the instant case, it is not clear on the present record whether at least some of the consumers who were the targets of mass marketing were in some sense victimized, notwithstanding that the main thrust of the fraud was directed at banks. To the extent that any straw buyer was in on the scheme or received the promised $50,000 payment, such a buyer could not be seen as a victim. But some straw buyers testified that their credit scores were ruined. Others testified that they intended in good faith to purchase the property and pay the mortgage

More happily, the court of appeals described at some length why radio ads may not be mass-marketing under the guidelines definition at all.

A fun time will doubtless be had in the district court on remand as it follows the Second Circuit’s instructions to

consider two questions: first, whether the defendants engaged in “mass-marketing” within the meaning of the relevant Guideline, as interpreted by the commentary; and second, if the defendants did engage in “mass-marketing,” whether the consumers who were the target of that mass-marketing were also in some sense victims of the overall criminal scheme, i.e., whether they were injured by the scheme.

Also, the court asked the Sentencing Commission to make this stuff clearer.

Also, why does the Second Circuit hyphenate “mass-marketing” but not “factfinding”?

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Pretty much every federal district judge in the country knows by now that the sentencing guidelines are not mandatory, the guidelines can’t be presumed to be accurate, and that federal district court judges have authority to impose a sentence above, below, or within the sentencing guidelines, applying the factors set out in 18 U.S.C. § 3553(a).

1268685_washington_monument.jpgAnd so just about every federal district judge knows that if he or she says she’s going to give a guidelines sentence, he or she has to also say it’s the sentence that they’d give under § 3553(a).

It’s odd, but in federal court it’s very important that a judge knows what power he has, which is exemplified in the D.C. Circuit’s opinion in United States v. Terrell. If a district judge is going to give a guidelines sentence, he or she has to be clear about whether a lower sentence is even possible.

Mr. Terrell had a crack (conviction) problem. He pled guilty to dealing a bit of crack and went to sentencing.

At sentencing, he asked the judge to give him less time than the sentencing guidelines called for. The guidelines in his case called for a sentence of 210 months on the low side (ok, perhaps it was more than “a bit” of crack).

The judge, though, told Mr. Terrell that he didn’t think he could help him out. As the D.C. Circuit summarized it,

the court stated that it would sentence Terrell below the applicable Guidelines range only if it found “compelling reasons” to do so. See, e.g., Tr. 6/27/06, at 4:6-14 (“There would have to be compelling reasons for the Court not [to] impose an advisory guideline sentence.”); id. at 7:8, 7:18-20 (“Now, I’m not so sure compelling reasons exist here. . . . [I]f you think there’s a basis for the Court to impose something other than an advisory guideline sentence it’s going to have to be for compelling reasons.”); see also Tr. 8/4/05, at 4:16-18 (“In all likelihood, I’m going to follow the guidelines even though they’re advisory. In all likelihood I’m going to do that.”). The court explained that it had found “compelling reasons” to deviate from the Guidelines in only two prior sentencings. Tr. 6/27/06, at 4:6-14.

If there’s one thing a federal appellate court doesn’t like, it’s being ignored. Just three months before Mr. Terrell’s hearing, the D.C. Circuit had decided, in United States v. Pickett, 475 F.3d 1347, 1353 (D.C. Cir. 2007), that a district court can’t decide that the sentencing guidelines are presumptively reasonable – put another way, it can’t say that it’ll only go below the sentencing guidelines if it has compelling reasons.

For the district court to keep on applying a “compelling reasons” standard was, perhaps, a bit of a snub to the august appellate court.

As the court of appeals put it,

Even after we issued our decision in Pickett, the court indicated that it was continuing to apply its “compelling reasons” approach. See Tr. 3/27/07, at 10:2-3 (“The question becomes why shouldn’t the Court impose a [within-Guidelines] sentence of 210 months? . . . I just can’t think of any compelling reasons why I should not impose a sentence of 210 months.”).

Because the district court was wrong about when it could go below the sentencing guidelines – employing a “compelling reasons” approach after the D.C. Circuit had already said that wasn’t the law – the D.C. Circuit remanded because, “the [district] court took too narrow a view of its authority to deviate from the Guidelines”

Mr. Terrell will be resentenced.

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Michael Begin was a MySpace user. He used MySpace not so much to keep up with fan information about Twilight, but to make the acquaintance of a fourteen-year-old girl.

Though described as a twenty-year old Marine sniper on his MySpace profile, Mr. Begin was actually a 33 year old man with a history of convictions involving underage girls.

1382778_old_brick_cell_phone.jpgMr. Begin and the fourteen year old talked on MySpace often. Their conversations were sexual in nature. He also used his cell phone to send her two pictures which were perhaps inspired by Congressman Weiner. The girls’ mother became concerned. Her daughter told Mr. Begin that she was underage. Mr. Begin was undeterred.

The mother contacted the FBI. An FBI agent took over the girls’ MySpace page. In addition to posting praise of Robert Mueller, the FBI Agent, posing as the 14-year-old girl, told Mr. Begin that she is underage.

Mr. Begin was undaunted.

The agent, as the girl, made plans to meet Mr. Begin at a restaurant in Bradford, Pennsylvania.

Mr. Begin showed up carrying a knife, a pair of handcuffs, and a condom. After being Mirandized, he admitted he was meeting the girl to have sex with her.

He pled guilty to a two-count indictment:

Count One charged that Begin violated 18 U.S.C. § 2422(b) by using the internet and a cellular phone to attempt to persuade a minor “to engage in any sexual activity for which any person can be charged with a criminal offense, to wit, statutory sexual assault, in violation of [18 Pa. Cons. Stat. § 3122.1], aggravated indecent assault, in violation of [18 Pa. Cons. Stat. § 3125(a)(8)], and indecent assault[,] in violation of [18 Pa. Cons. Stat. § 3126(a)(8)].” App. 17. Count Two charged that Begin violated 18 U.S.C. § 1470 by using a cellular phone to transfer an obscene image to a minor.

At sentencing, Mr. Begin argued for a variance. As the Third Circuit in United States v. Begin summarized it,

Begin argued that the sentence for his attempt to induce statutory rape under 18 U.S.C. § 2422(b) should not exceed the fifteen-year statutory maximum penalty for actually committing statutory rape within the special maritime and territorial jurisdiction of the United States under 18 U.S.C. § 2243.

The Third Circuit thought this argument was colorable – it was a plausible argument and the district court was, therefore, obligated to talk about it when imposing sentence.

The district court disagreed, and completely ignored the argument when sentencing Mr. Begin to twenty years, double the sentence that he was asking for.

The Third Circuit found that this was not a procedurally kosher way to sentence someone.

Having concluded that Begin’s . . . disparity argument has colorable legal merit under § 3553(a)(6), we agree with him that the District Court failed to make a sufficient record to demonstrate its consideration of that argument. Though the Court summarized Begin‟s state-federal disparity argument at the beginning of the sentencing hearing, it did not acknowledge that he had also made a federal-federal disparity argument. The Court asked no questions during defense counsel‟s oral argument in favor of downward variance on this ground and made no comments about the issue following that presentation. Strikingly, the Court did not even specifically rule on Begin‟s request for a variance.

Though, what the Third Circuit gives, it also takes away:

We emphasize that colorable legal merit is distinct from actual merit. There is reason to believe that the predatory nature of Begin‟s conduct and the knife and handcuffs found in his possession distinguish his offense from a run-of-the-mill statutory rape. Indeed, the stiff penalties under § 2422(b) are intended to punish and deter predators who use the reach and anonymity of the internet to perpetrate sex crimes against children. . . . Thus, when we say that Begin‟s claim has colorable legal merit, we mean only that, upon appropriate findings of fact, the District Court would be within its discretion to accept the argument and to factor it into the ultimate sentence.

But Mr. Begin will be going back to the district court for it to make a proper record when imposing sentence. We’ll see whether it accepts the Third Circuit’s suggestions for how to do that.

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Giraldo Trujillo-Castillon came to this country from Cuba when he was seventeen.

Like they say, you can take the man out of Cuba, but you can’t take the Cuba out of the man. Or so seemed to believe a federal prosecutor and district court judge.

Mr. Trujillo-Castillon was accused of fraud in federal court.

He pled guilty. He went to sentencing.

1212572_cuban_convertible_pesos.jpgAn Anti-Cuba Sentencing Hearing

The government asked for the high-end of the sentencing guidelines range. The request was not made because of Mr. Trujillo-Castillon’s conduct, but, rather, because this Assistant United States Attorney doesn’t appear to think well of Cubans. As the Seventh Circuit explained,

Pointing to the defendant’s admission that he viewed fraud differently than violent crimes, the government argued that “it may be possible to explain his stated attitude because of his Cuban heritage. . . . Maybe there is a different attitude toward private property in Cuba.” The government noted Trujillo-Castillon’s statement that his only friend in the United States was his wife, and said that “if you play by the rules, if you join us, if you become American, [you] will have many [] friends in the United States.” The government then turned to “why people should come to the United States,” professing that “if he came here because he thought it would be easy, then I would simply suggest that he and others like him either wise up, or don’t come.”

Not to be outdone, Mr. Trujillo-Castillon’s own lawyer explained that perhaps being Cuban has some downsides – in the sense that you’re more likely to commit property crimes. Again, here’s how the Seventh Circuit explained what happened:

Defense counsel did not object to this line of argument; instead, he responded in kind. He explained that there is an “attitude” in Cuba that when you steal “you’re pulling a Robin Hood type of act.” He suggested that many Cuban immigrants have a hard time adjusting to “the American way of life.”

It must have been very lonely to be Mr. Trujillo-Castillon.

I feel for the district judge at this point in the hearing.

On one hand, the parties seem to be arguing about whether it’s so bad to be Cuban that Mr. Trujillo-Castillon should get a lighter sentence, or whether it’s so bad to be Cuban that Mr. Trujillo-Castillon should get a higher sentence.

The judge would naturally feel that it’s ok to stay on the “Cubans are bad” train. Except for the fact that it’s really creepy to sentence someone based on their nationality. Also it violates their Due Process rights.

Here’s how the district court walked the tightrope of animosity toward Cubans:

The court first explained that Trujillo-Castillon’s “lifestyle” cannot “be blamed on Cuba.” It said that his record was reminiscent of “when the Mariel people came over here and created crime waves all over the place”; “When [Fidel] Castro emptied his prisons, and his psychiatric wards, and Jimmy Carter took them all in.” The court continued that, unlike in Cuba, “in America, private property is sacrosanct. It’s not the Government’s property. . . . And that’s the way we live in America. And that’s why it’s a serious offense when you do this.”

The district court then sentenced Mr. Trujillo-Castillo to a sentence seven months above the top of the sentencing guidelines.

The Appeal

Mr. Trujillo-Castillo appealed and the Seventh Circuit remanded the case in United States v. Trujillo-Castillo. The court of appeals started the discussion of the Cuba issue by noting that,

The guidelines make clear that race, sex, national origin, creed, religion, and socio-economic status “are not relevant in the determination of a sentence.” U.S.S.G. § 5H1.10; see also 28 U.S.C. § 994(d) (“The Commission shall assure that the guidelines and policy statements are entirely neutral as to the race, sex, national origin, creed, and socioeconomic status of offenders.”). A sentencing court’s discretion to consider such factors is also constrained by the Constitution. See, e.g., Pepper v. United States, ___ U.S. ___, 131 S. Ct. 1229, 1240 n.8 (2011) (“Of course, sentencing courts’ discretion under § 3661 is subject to constitutional constraints”).

The standard that the court of appeals articulated is that remand is required when a reasonable observer might think that reliance on a prohibited factor influenced the sentence.

In this case, the Seventh Circuit held,

we think that both the government and the sentencing court crossed the very fine line of demarcation separating presentencing statements regarding a defendant’s relationship with a country or its residents who have engaged in similar criminal activity there and statements concerning the race or national origin of the defendant which would violate his due process guarantees.

The court of appeals criticized both the prosecutor and the district court.

The government should have forgone discussing Trujillo-Castillon’s national origin in the first place. And although the court did not expressly adopt the government’s position, it did nothing to reasonably assure the defendant that his Cuban heritage would not factor into its calculus. See id. Instead, the court exacerbated the problem by comparing the defendant’s conduct to the Mariel people who emigrated from Cuba more than thirty years ago. By lumping the defendant in with the Mariel people and expressly contrasting the values held by Americans with people, like the defendant, “who come[] from Cuba,” the court arguably made Trujillo-Castillon’s national origin a factor at sentencing. A reasonable observer hearing or reading the remarks might certainly think so.

The court of appeals explained that it wasn’t sure if the above-the-guidelines sentence was based on Mr. Trujillo-Castillon’s Cuban nationality or some other characteristic. The appellate court directed the district court to either resentence him based on some other factor or explain that the court wasn’t motivated by an improper dislike for the Cuban people.

Is there any chance the district court is going to say, in effect, “yes, I was impermissibly biased against Cubans, you should get a new lower sentence” on remand?

I’m betting no.

Published on:

James Wooten was on hard times.

As he later told the police, he was just sick of living in his car and running out of money.

He went into a bank. As the Sixth Circuit in United States v. Wooten, tells it:

[B]ank teller Buddy Mason recalled the circumstances of the September 23 robbery. According to Mason, the robbery began after Wooten walked “casually” into the bank and approached the teller row. Wooten, who was fifty-six years old at the time, wore ordinary clothing and appeared to Mason to be a routine customer. After entering, Wooten strolled over and placed one hand on the counter. According to Mason, Wooten was “not looking around or fidgeting or looking at anything” and his demeanor was “nonchalant.” After motioning for Mason to lean in closer, Wooten “kind of whispered and said, I am going to rob you.” Mason at first thought Wooten was “joking around.” Indeed, Mason recalled that he was “not taking [the robbery] very seriously because [Wooten] was just so nonthreatening.” With prompting from Mason, Wooten repeated the statement “I am going to rob you,” and Mason again questioned the sincerity of Wooten’s request. At that point, Wooten “kind of got a serious look in his face” and said, “I have a gun, I want your money.”

1342748_bank.jpgBank Robberies are common enough that banks give their tellers training on how to respond if they get robbed. After Mr. Mason heard from Mr. Wooten that he had a gun, Mr. Mason turned and picked up a stack of bills.

Mr. Wooten took the money and walked out of the bank.

He was caught by the police a few blocks later – that’s when he said he robbed a bank because he didn’t want to live in his car. He didn’t have a gun with him.

At Mr. Wooten’s sentencing hearing, the teller – Mr. Mason – said that:

Wooten “was not acting like he was going to hurt me or anybody in the bank.” In fact, even though Wooten had told Mason that he had a gun, Mason said he “never felt threatened at all.”

Mr. Wooten pled guilty. At sentencing, the fight was whether Mr. Wooten should be subject to a “threat of death” enhancement.

If a person commits a robbery and threatens to kill someone, that’s seen as worse under the sentencing guidelines and the person gets an increase under section 2B3.1(b)(2)(F).

The district court applied the enhancement, finding that a reasonable person meeting the meek 50 year old Mr. Wooten, who was reluctantly robbing a bank to escape living in his car, would have to fear for his life.

The Sixth Circuit disagreed.

while the statement “I have a gun” certainly can be enough to support the threat-of-death enhancement–and in the majority of cases it is–the statement is not necessarily enough, especially when contextual circumstances undermine the otherwise threatening nature of the declaration.

This is hopeful for Mr. Wooten – saying that you have a gun does not always mean that you are saying you’re going to use it. Sometimes you have to say you have a gun just to get someone to treat your situation like a robbery and give you the money that they’re trained to hand over.

Although unusual, one can envision circumstances in which the nature of a robbery makes it objectively unreasonable for a victim of ordinary intelligence to believe that the robber, even if claiming to have a gun, has any intent or ability to carry out a violent act. An offender who walks into a bank waving a banana or what is plainly a toy gun, for instance, would not instill a fear of death in a reasonable person, even if the offender emphatically announced his possession of a gun. Cf. Jennings, 439 F.3d at 611 (surmising “that there could be circumstances that would sufficiently dilute the phrase ‘I have a gun’ so that it would not qualify as a death threat,” such as where “a bank robber claimed to have a gun but brandished what was quite obviously a toy”); Gibson, 155 F.3d at 847 (stating that “I have a gun,” constitutes a threat of death unless “unusual mitigating circumstances accompanying this statement could deprive the words of their ordinary and expected meaning” (internal quotation marks omitted)). Because such circumstances would fall short of instilling a fear of death in a reasonable victim of the offense, the threat-of-death enhancement would not be warranted.

The Sixth Circuit reversed and remanded – Mr. Wooten didn’t threaten to kill anyone.