Second Circuit: Apprendi Precludes Increased Fine Based On Judicial Fact-Finding

United States v. Pfaff, Docket Nos. 09-1702-cr(L), 09-1707-cr(CON), 09-1790-cr (CON) (2d Cir. Aug. 27, 2010) (found here)

The latest from the Second Circuit in the KPMG tax case, described as "the largest criminal tax case in American history."

18 U.S.C. 3571 governs the imposition of criminal fines.  It provides that an individual may be fined a maximum of $250,000 per offense, and allows for an "[a]lternative fine based on gain or loss."  In this case, the jury found defendant Larson guilty of twelve felony offenses, but made no specific findings as to the pecuniary gain or loss caused by his conduct.  Absent such findings, the "statutory maximum" fine Larson could receive was $3 million ($250,000 for each of his twelve felony convictions) -- the maximum fine that could be imposed based on the facts reflected in the jury verdict.  Still, the district court fined Larson $6 million, which figure was supported only by the district court's own judicial fact-finding.   

It as that finding that the Second Circuit found violated the rule of Apprendi -- that is, "[o]ther than the fact of a prior conviction, any fact that increases the penalty for a crime beyong the prescribed statutory maximum must be submitted to a jury, and proved beyond a reasonable doubt" and that "the statutory maximum for Apprendi purposes is the maximum sentence a judge may impose solely on the basis of the facts reflected in the jury verdict or admitted by the defendant."

Fine vacated, and remanded to the district court for further proceedings consistent with the Second Circuit's opinion.

The Same Notice Rules Apply To Non-Guidelines Fines

United States v. Elfgeeh, 515 F.3d 100 (2d Cir. 2008)

In this post, we noted that a district court's failure to advise a defendant that it intended to impose an adverse non-Guidelines sentence constituted reversible error.  Well, the same principles apply to fines. 

Under Sections 5E1.2(c)(3) and (4) of the Guidelines, the defendant faced a possible fine of between $20,000 and $500,000.  Yet the district court imposed a fine of $1,250,000 -- more than twice the maximum proscribed by the advisory Guidelines (even though it was less than the statutory maximum).  Although the defendant did not challenge the fine imposed at sentencing, the Second Circuit concluded that its imposition constituted plain error because the district court did not give the defendant either "notice that a fine of such magnitude was contemplated or an opportunity to be heard on his ability to pay such a fine."

The Second Circuit, however, denied a request for remand to a different judge -- it found that doing so was not warranted.  Instead, it directed that "the district court must give [the defendant] an opportunity to present evidence with respect to his ability to pay a fine and make specific findings as to [his] ability to pay the fine imposed.  If the court decides to impose a fine that is different from the Guidelines-recommended range, it must also provide an explanation as to the specific reasons for its decision."