Failure To Make Adequate Findings Concerning Role Adjustment Results In Reversal

United States v. Gomez, No. 09-4412-cr (2d Cir. Nov. 23, 2010) (found here)

Gomez appealed his 150 months sentence that followed his plea of guilty to an eight-count indictment charging a conspiracy to import and distribute heroin.  Among other things, Gomez argued that the district court erred in applying a role enhancement because it failed to make any particularized finding in open court regarding the enhancement.

The Second Circuit agreed -- Even finding that the district court had committed plain error (that is, procedural error).  In particular, the district court neither adopted the factual findings in the PSR nor made any specific factual findings to support the sentence enhancement -- two well-established ways that the district court could have supported its finding of a role enhancement.  The Second Circuit therefore remanded to the district court for it to either make specific factual findings supporting the role enhancement, or sentence Gomez without the role enhancement.

Note: Gomez must have entered an "open plea" -- that is, he likely had no plea agreement.  Otherwise, the government likely would have relied on the appellate waiver in the standard plea agreement to move to dismiss his appeal.  Or, perhaps, his appeal was viable because his sentence was outside of the range provided for in the appeal waiver clause of his plea agreement. 

Second Circuit: Guidelines Sentence CAN Create Unwarranted Sentencing Disparity

United States v. De La Cruz, No. 09-4641-cr, 2010 WL 4136669 (2d Cir. Oct. 21, 2010)

De La Cruz's argued that his sentence was procedurally and substantively unreasonable.  In particular, he argued (among other things) that the district court committed procedural error in making the following statement: "The next factor is the Court has to avoid unwarranted sentencing disparity.  I would have to say a Guidelines sentence by definition really can't create unwarranted sentencing disparity."

The Second Circuit found that any error on the district court's part in making that statement was harmless, particularly in light of other statements made that indicated the district court understood its sentencing responsibilities and obligations.  Still, the Second Circuit made one observation worth noting -- that is, that "Appellant is correct insofar as he asserts that a Guidelines sentence can create an unwarranted disparity, a proposition supported by the Supreme Court's decision in Kimbrough v. United States."

"Must Read" Opinion From Judge Gleeson (Having To Do With The Fraud Guidelines)

United States v. Ovid, No. 09-CR-216 (JG), 2010 WL 3940724 (E.D.N.Y. Oct. 1, 2010)

Judge Gleeson takes pen to paper again, but selects the fraud guidelines and the DOJ's June 28, 2010 letter to the Sentencing Commission as the target.  In sum, Judge Gleeson sentenced a white-collar offender to 60 months imprisonment, notwithstanding an advisory Guidelines range of 210 to 262 months (there was, of course, a 60 month statutory cap).  The whole decision is a "must read" for any defense lawyer.  Indeed, Judge Gleeson has important things to say about sentencing disparity as well as the role that appellate courts should play in cabining same.  But what's perhaps most interesting for defense lawyers is his "Preliminary Statement," which is quoted in full below:

In a letter dated June 28, 2010 to the Chair of the United States Sentencing Commission, the Director of the Office of Policy and Legislation of the United States Department of Justice (“DOJ” or the “Department”) decries the “evolution” of “two distinct and very different sentencing regimes.” Letter from Jonathan J. Wroblewski to the Hon. William K. Sessions III, at 2, 1 (June 28, 2010) (“DOJ Letter”). One “regime,” the letter contends, “includes the cases sentenced by federal judges who continue to impose sentences within the applicable guideline range for most offenders and most offenses.” Id. at 1. This is apparently the good regime. The “second regime,” by contrast, “has largely lost its moorings to the sentencing guidelines.” Id. at 2. This regime is a cause of concern for the Department. It consists of judges who sentence fraud offenders, especially in high-loss cases, “inconsistently and without regard to the federal sentencing guidelines.” Id. at 4. The Department concludes on this issue (the letter addresses various others as well) that “[t]he current sentencing outcomes in [fraud] cases are unacceptable, and the Commission should determine whether some reforms are needed.” Id . at 5. In short, the premise of the letter is that unless the sentences in fraud cases are “moored” to the advisory ranges provided by the United States Sentencing Guidelines, they produce “unwarranted sentencing disparities” that are “extremely problematic.” Id. at 2.

The DOJ Letter recommends, inter alia, a systemic analysis and synthesis by the Commission of the federal sentencing data it has collected, followed by a report that “explore[s] how to create a single sentencing regime that will earn the respect of the vast majority of judges, prosecutors, defense attorneys, Members of Congress, probation officers, and the public.” Id. at 3. It also suggests that “reforms might include amendments to the sentencing guideline for fraud offenses.” Id. at 5.

The Department is an important influence in the formulation of sentencing policy. Jonathan Wroblewski, the author of the letter, is a thoughtful and well-respected expert in the area. Finally, the Attorney General enjoys ex officio membership on the Sentencing Commission, and Mr. Wroblewski is the Attorney General's designee to that post. For all these reasons, the DOJ Letter to the Commission will carry great weight.

The sentencing of Isaac Ovid on July 30, 2010 illustrates well the fact that, here in the trenches where fraud sentences are actually imposed, there is a more nuanced reality than the DOJ Letter suggests. The letter describes two “dichotomous regimes” in fraud cases-one moored to the Guidelines, the other adrift in the vast regions beneath the low end of the advisory Guidelines ranges. Id. at 2. But Ovid's sentencing shows otherwise. Specifically, it shows how the fraud guideline, despite its excessive complexity, still does not account for many of the myriad factors that are properly considered in fashioning just sentences, and indeed no workable guideline could ever do so. This reality does not render the Guidelines irrelevant in fraud cases; they are in fact quite useful in all sentencings. But sentencing judges know that a full consideration of “the nature and circumstances of the offense and the history and characteristics of the defendant,” 18 U.S.C. § 3553(a)(1), implicates offense and offender characteristics that are too numerous and varied, and occur in too many different combinations, to be captured, much less quantified, in the Commission's Guidelines Manual. A consideration of those and the other factors set forth in § 3553(a) produces sentences that are moored to fairness, and to the goals of sentencing set forth in § 3553(a)(2) but sometimes not so much to the advisory Guidelines range. Indeed, in some cases the fair sentence can drift quite far away from the advisory range, which is, after all, but one of eight factors the sentencing judge must consider.

Ovid's sentencing reveals that the Department knows this as well. Aggressive, experienced, successful white collar prosecutors understand that it does not undermine the Sentencing Guidelines at all, much less create some kind of rogue sentencing regime, when the consideration of factors set forth in 18 U.S.C. § 3663(a) produces a sentence that happens to be substantially below the advisory range.

I support the Department's call for Sentencing Commission review of fraud sentences. But in determining whether reforms are needed, and especially in determining whether the existing guideline should be burdened with even more adjustments, the Commission should examine whether our system already provides an adequate solution for the claimed “unacceptable” outcomes the Department complains about. I suggest that it does, in the form of appellate review, and for all of the handwringing in the DOJ Letter about unacceptable sentences, the Department for the most part has not even tried to avail itself of that solution.

 

Justice Truly Is Blind

United States v. Thomas, No. 09-2970-CR (2d Cir. Sept. 22, 2010) (found here)

Thomas contended on appeal that his "sightless condition" rendered his 140 month sentence (down from 180 months after a remand for resentencing following Booker) substantively unreasonable.  The Second Circuit disagreed, finding that the district court had "explicitly and specifically considered Appellant's blindness, weighing it against, inter alia, Appellant's prominent role in the underlying criminal conspiracy."

Good Summary Of Law Concerning Appellate Sentencing Review In The Second Circuit

United States v. Bonilla, Docket No. 09-1799-cr (2d Cir. Aug. 13, 2010) (found here) -- If you're looking for a good summary of the law and rules governing appellate sentencing review in the Second Circuit, look no further than Bonilla:

We review sentences for abuse of discretion, a standard that "incorporates de novo review of questions of law (including interpretation of the [Sentencing] Guidelines) and clear-error review of questions of fact."  United States v. Legros, 529 F.3d 470, 474 (2d Cir. 2008).  In applying the abuse of discretion standard in sentencing appeals, we are constrained to review for reasonableness.  See Gall v. United States, 552 U.S. 38, 46 (2007).  It is by now familiar doctrine that "[t]his form of appellate scrutiny encompasses two components: procedural review and substative review.  United States v. Cavera, 550 F.3d 180, 189 (2d Cir. 2008) (en banc).  Upon substantive review, a trial court's sentencing decision will be classified as error only if it "cannot be located within the range of permissible decisions."  Id. (internal quotation marks omitted).  The length of the sentence imposed is what is examined on substative review.  United States v. Villafuerte, 502 F.3d 204, 206 (2d Cir. 2007).  Substantive reasonableness review can take place any time following procedural reasonableness review, including during the same appeal.  See Gall v. United States, 552 U.S. 38, 51 (2007) ("[An appellate court] must first ensure that the district court committed no significant procedural error . . . [and,] [a]ssuming that the district court's sentencing decision is procedurally sound, the appellate court should then consider the substantive reasonableness of the sentence implosed . . . ."); see also United States v. Dorvee, __ F.3d __, 2010 WL 3023799, at *7 (2d Cir. Aug. 4, 2010) (noting that we are empowered to address "both the procedural and substantive reasonableness of [a] sentence in the course of an appeal where we find both types of error").  In engaging in substantive reasonableness review we recall that

[t]he manifest-injustice, shocks-the-conscience, and substantive unreasonableness standards in appellate review share several common factors.  First, they are deferential to district courts and provide relief only in the proverbial "rare case."  Second, they are highly contextual and do not permit easy repetition in successive cases.  Third, they are dependent on the informed intuition of the appellate panel that applies these standards.  In sum, these standards provide a backstop for those few cases that, although procedurally correct, would nonetheless damage the administration of justice because the sentence imposed was shockingly high, shockingly low, or otherwise unsupportable as a matter of law.

United States v. Rigas, 583 F.3d 108, 123 (2d Cir. 2009) (footnote omitted).

With respet to procedural review,

a district court commits procedural error where it fails to calculate the Guidelines range (unless omission of the calculation is justified), makes a mistake in its Guidelines calculation, or treats the Guidelines as mandatory.  It also errs procedurally if it does not consider the 3553(a) factors, or rests its sentence on a clearly erroneous finding of fact.  Moreover, a district court errs if it fails adequately to explain its chosen sentence, and must include an explanation for any deviation from the Guidelines range.

Cavera, 550 F.3d at 190 (internal citations and quotations omitted).

In arriving at a sentencing decision, the District Court must consider the now-advisory Guidelines, for they are the "starting point and the initial benchmark," Gall, 552 U.S. at 49, and are not to be treated as only a "body of casual advise," United States v. Crosby, 397 F.3d 103, 113 (2d Cir. 2005).  The process of sentence selection and the place of the Sentencing Guidelines in that process has been established as follows:

First, the Guidelines are no longer mandatory.  Second, the sentencing judge must consider the Guidelines and all of the other factors listed in Section 3553(a).  Third, consideration of the Guidelines will normally require determination of the applicable Guidelines range, or at least identification of the arguably applicable ranges, and consideration of applicable policy statements.  Fourth, the sentencing judge should decide, after considering the Guidelines and all the other factors set forth in section 3553(a), whether (i) to impose the sentence that would have been imposed under the Guidelines, i.e., a sentence within the applicable Guidelines range or within permissible departure authority, or (ii) to impose a non-Guidelines sentence.  Fifth, the sentencing judge is entitled to find all the facts appropriate for determining either a Guidelines sentence or a non-Guidelines sentence.

Crosby, 397 F.3d at 113.

A sentencing court is free to vary from the Guidelines on the basis of a policy disagreement with the Guidelines.  Indeed, we have held that "a district court may vary from the Guidelines range based solely on a policy disagreement with the Guidelines, even where that [policy] disagreement applies to a wide class of offenders or offenses."  Cavera, 550 F.3d at 191.  In Kimbrough v. United States, 552 U.S. 85 (2007), the Supreme Court found that a district court was entitled to conclude that the existing Guidelines provision for crack cocaine was greater than necessary to meet the standards of 3553(a) because the provision "d[id] not exemplify the Commission exercise of its characteristic institutional role."  Id. at 109.

We recently determined that "[t]he district court committed procedural error when it concluded that it could not consider a broad, policy-based challenge to the child pornography Guidelines."  United States v. Tutty, __ F.3d __, 2010 WL 2794601, at *3 (2d Cir. July 16, 2010).  In United States v. Dorvee, __ F.3d __, 2010 WL 3023799, at *9 (2d Cir. Aug. 4, 2010), we noted that "Sentencing Guideines are typically . . . based on data about past sentencing practices but that "the Commission did not use this empiracal approach in formulating the Guidelines for child pornography," acting instead at the direction of Congress.  We suggested in Dorvee that a sentencing court could, in the exercise of its broad discretion, take into account the "unusual provenance" of the Guidelines in cases of that nature.  Id. at *12. 

Second Circuit Rules In High-Profile Financial Fraud Case On Issues Relating To Ex Post Facto Clause, Loss Calculations, And Acceptance Of Responsibility Points

United States v. Kumar, Docket Nos. 06-5482-cr(L), 06-5654-cr (CON) (2d Cir. Aug. 12, 2010) (found here)

This decision is the appeal of the convictions sustained by Sanjay Kumar and Stephen Richards in the Computer Associates.  Here's the Second Circuit's opening paragraph:

Appeal by Defendants from separate judgments entered in the United States District Court for the Eastern District of New York (I. Leo Glasser, Judge), following guilty pleas by Defendants to several counts of conspiracy, securities and wire fraud, obstruction of justice, and perjury. We hold that Richards’s guilty plea was not constitutionally infirm and that he was properly charged with, and convicted on his guilty plea to, obstruction of justice. We therefore AFFIRM Richards’s judgment of conviction in all respects. We further conclude that the use of the Sentencing Guidelines in effect at the time of sentencing to calculate Defendants’ Guidelines ranges for their fraud offenses, rather than the Guidelines in effect at the time of the commission of those offenses, did not violate the Ex Post Facto clause. We further conclude that the district court properly calculated the loss amount underlying Defendants’ monetary fines and that the district court did not abuse its discretion by denying Kumar an acceptance of responsibility credit in determining his Guidelines range. We further conclude that the district court erroneously failed to award Richards a two-point reduction for acceptance of responsibility. Thus, we AFFIRM Kumar’s sentence in all respects and VACATE Richards’s sentence and REMAND for resentencing.

Now that the end of the story is known, let's dig a little deeper into the details.

Did the Sentence Violate the Ex Post Facto Clause?

Kumar and Richards contended that application of the 2005 Guidelines book to their fraud offenses -- which were completed in 2000 -- violated the ex post facto clause.  The Second Circuit found the claim to be without merit.

More specifically, the Second Circuit found that "there is no question that application of the 2005 Guidelines disadvantaged the defendants by subjecting them to the higher ranges of the 2005 Guidelines compared to the 1998 version of the Guidelines."  The only question with which the Second Circuit had to deal was "whether application of the 2005 Guidelines" -- using the one book rule because certain of the  offenses were grouped together but took place at different times -- "to the defendants's sentences was 'retrospective'" -- a question on which the court had "previously reserved ruling."  In a nutshell, the Second Circuit concluded that the "one-book" rule does not violate the ex post facto clause, at least as applied to a series of similar offenses (like those in this matter).

Was the Loss Calculation Clearly Erroneous?

Loss was sharply disputed between the defense and the government.  The most significant area of disagreement centered on how to properly frame the economic impact of certain conduct for which they pled guilty.  The district court held a Fatico hearing, and questioned the experts for both the defense and the government.  Ultimately, the district court accepted the government's calculation (as expressed through its expert).  The Second Circuit was not persuaded that the district court's reliance on this loss analysis was "clearly erroneous."

Because district court's have such leeway in determining loss, it's often difficult to challenge a loss calculation on appeal.  After all, a sentencing court is not required to calculate loss with precision.  Instead, it need only make a reasonable estimate of loss.  And since district courts have the evidence in front of them, appellate courts find that their loss determinations are entitled to a high level of deference. 

Since losses in financial fraud cases so often are the driving force behind any Guidelines calculation, though, perhaps district court loss calculations should be held to a higher standard and subjected to a more rigorous appellate review.

Were the Defendants Properly Denied Acceptance of Responsibility Credit?

The defendants pled guilty.  But they got no credit whatsoever for acceptance of responsibility (neither a 2 nor 3 level reduction in offense level). 

For Kumar, the district court found that he obstructed justice and waited until the eve of trial before pleading guilty, and therefore was not entitled to any acceptance of responsibility credit.  The Second Circuit rejected Kumar's argument that he was entitled to that credit, finding that it needn't resolve any of the flaws identified by Kumar on appeal "because an examination of the record shows that he engaged in sufficient objectionable post-indictment conduct to justify a rejection of his request for acceptance of responsibility credit.  Specifically, Kumar . . . acted in ways that the district court reasonably found to be inconsistent with a full acceptance of responsibility."  Read the decision for the details, but suffice it to say that deference to the district court played a large role in this appellate loss.

Richards is another story.  The district court relied on a single factor in denying acceptance of responsibility points -- the lateness of his plea.  Timeliness is an appropriate consideration for acceptance of responsibility.  The two-level reduction provided for in U.S.S.G. § 3E1.1(a) is for demonstration of acceptance of responsibility.  By contrast, the Guidelines specifically provide that timeliness of a plea is primarily relevant to the reduction of an additional point under U.S.S.G. § 3E1.1(b).  Here, the lateness of Richards' plea was not a sufficient reason to totally reject acceptance of responsibility points.  Thus, the Second Circuit remanded for resentencing.  Richards will get his two points.  But it likely won't take much (if anything) off of his seven year sentence which itself was a non-Guidelines sentence (a variance from the life sentence recommended by the Guidelines).

Sympathy From The Second Circuit

United States v. Ballard, No. 09-0978-cr (2d Cir. Aug. 4, 2010) (found here)

Remember Zachary Ballard?  Judge Rakoff imposed a 601 month sentence.  But he had some sharp words for the mandatory minimum sentencing schemes that caused him to be required to impose that sentence.

Well, Ballard appealed.  And the Second Circuit affirmed.  In doing so, though, it expressed some sympathy for Ballard's plight:

The district court was clearly conflicted by the sentence it gave to Ballard.  The court opened its opinion and order denying Ballard's motion for resentencing by stating, "The distorting effects of mandatory minimum sentences are never more evident than in the case of defendant Zachary Ballard," United States v. Ballard, 599 F. Supp. 2d 539, 539 (S.D.N.Y. 2009), and closed by stating, "When the letter of the law so far departs from justice as to become the instrument of brutality, common sense should call a halt," id. at 543.  We are not unsympathetic to the concerns raised below.  That said, we see no error in the sentence as it complied precisely with Title 18 and the law of this circuit.

Second Circuit Reverses Child Pornography Sentence As Procedurally Unreasonable

United States v. DeSilva, Docket No. 09-2988-cr (2d Cir. July 28, 2010) (found here)

Different that the reversals in the context of child exploitation crimes like that in Dorvee, the Second Circuit reversed DeSilva's sentence as procedurally unreasonable.  In particular, it held that "the District Court committed procedural error by engaging in clearly erroneous fact-finding at defendant's sentencing when it relied upon a psychologist's report -- which was prepared for use at a pretrial bail hearing -- to find that defendant, an admitted child molester, posed no danger to the community."  It further found that "[a]lthough a psychologist's report may provide mitigating evidence for the court's consideration during sentencing, the court must still conduct an independent evaluation of the defendant in light of the factors set forth in 18 U.S.C. § 3553(a)."

To Dorvee Or Not To Dorvee

United States v. Tutty, Docket No. 09-2705-cr., 2010 WL 2794601 (2d Cir. July 16, 2010)

Following in the footsteps of Dorvee, the Second Circuit reversed another child pornography sentence in Tutty.  It remanded for reconsideration of the policy concerns raised in Dorvee.  Will this be a trend?  More likely it will be a very fact specific analysis, as demonstrated by the Second Circuit's rejection of a similar (yet different) circumstance in Levy.

When Dorvee Does NOT Apply

United States v. Levy, No. 09-2965-cr (2d Cir. July 14, 2010) (found here)

Levy challenged (among other things) the substantive reasonableness of his 360 month sentence for producing and distributing child pornography.  On appeal, the Second Circuit found that his case did "not present the same issues" as in Dorvee, "specifically whether the defendant was likely sexually to assault a child."  Rather, "Levy actually molested a five-year-old girl, bragged about his conduct online, and thereafter not only failed to accept responsibility, but lied under oath about his culpability."  Thus, Levy could not benefit from Dorvee, in which the Second Circuit expressed concern about the reasonableness of child pornography sentences.