Sunday, October 20, 2013

Case o' The Week: Don't Do the Crime, Still Do the Time -- Christensen and non-criminal conduct for upward variance

   Have you ever lost money when you decided to “buy, buy, buy” a legitimate investment, only to watch it tank soon after? 
  Take heart -- in the Ninth, your broker can now do time. “In affirming the sentence in the present case, the majority obfuscates the fact that is apparent from any fair reading of the record: the district court based its above-guidelines sentence on investor losses not caused by Christensen’s criminal conduct.United States v. Christensen, 2013 WL 5583827, *10 (9th Cir. Oct. 11, 2013) (Tashima, J., dissenting) (emphasis added), decision available here.

Players: Decision by visiting, Senior, D.J. Safford (N.D. Fla.), joined by Judge Bybee. Vigorous and compelling dissent by Judge Tashima.

Facts: Christensen defrauded folks in real estate investments. Id. at *1. Some investors were older, some were friends of the defendant, several victims had reported negative life events because of the losses – such as divorce. Id. at *2-*3. Christensen used above half of the fraudulent proceeds for personal expenses. Id. at *2. Many of the investors who lost money, however, and much of the money lost, was due to bad investments or bad luck: the funds weren’t fraudulently diverted. Id. at *6. The parties and Probation all agreed on the criminal loss amount. Id. at *1. Christensen pleaded pursuant to an Information, to a deal that jointly recommended a correct guideline sentence of 33 months. Id. at *1. 
  The district court busted the deal, and varied upward nearly double from the joint guideline recommendation to sixty months in custody. Id. at *1. Much of the rationale for that upward variance was victim complaints on the impact on the losses on their lives – although much of those losses were simply investments gone bad, and not criminal diversion of funds. Id. at *3.

Issue(s): Were the “’life-destroying impacts’ [of the victims’ losses] proper for the district court to consider even if not tied to the loss Christensen caused by misappropriating investor funds[?]” Id. at *8 (emphasis added). [Or, as put by dissenting Judge Tashima, can a district court impose “an upward variance based on non-criminal conduct[?]” Id. at *14 (Tashima, J. dissenting).

Held:These ‘life-destroying impacts,’ supported by victim statements, provide greater insight into Christensen’s ‘background, character, and conduct’ that the district court was entitled to rely on in determining that for a specified loss resulting from criminal conduct, the Guidelines did not adequately account for the seriousness of Christensen’s offense, provide adequate deterrence, or sufficiently protect the public and innocent investors from the infliction of further harm at the hands of Christensen.” Id. at *7.

Of Note: This is an enormously troubling decision. Either the sentencing court simply made a mistake in attributing all of the victims’ woes to fraudulent losses, or Christensen is now serving twice as much time in federal prison because his investors lost money in legal, legitimate investments. 
  Judge Tashima calls it like he sees it – he complains “the majority paints a grossly distorted picture of the district court’s decisionmaking process.” Id. at *15 (Tashima, J., dissenting). Judge Tashima sounds the alarm at the new Ninth law – that an upward variance can be imposed for non-criminal conduct! Id. at *14. He rejects as “patently absurd” the argument that the language of Section 3661 permits non-criminal conduct to be used for an upward variance – if that was the case, a defendant could get a higher sentence for his “eating or dressing habits, the tradition or school of yoga he favors, or the regularity with which he recycles.” Id. at *15.  
  It is a pointed, thoughtful, and convincing dissent that should trigger en banc interest.

How to Use: Even the government in Christensen “expressly disclaimed reliance on any notion that the district court could permissibly base its upward variance on non-criminal conduct.” Id. at *13 (Tashima, J., dissenting). Yet the majority digs in, expressly endorsing non-criminal conduct as a fair game for an upward departure. Id. at *7 & n.2. Object and object again if non-criminal conduct appears in the rationale for an upward variance – the last chapter on this peculiar sentencing twist has not yet been written.  
For Further Reading: The Continuing Resolution that passed last week included a $26 million anomaly for Defender Services. That bump helps pay for deferred CJA vouchers, and ensures new vouchers submitted during the CR period can be paid. See Fact Sheet here
   We need an additional anomaly of over $50 million this winter to restore the Defender Services account to some semblance of normalcy.

Image of investment advisor Jim Cramer from
Image of prisoner doing yoga from

Steven Kalar, Federal Public Defender, N.D. Cal. Website at


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