Tuesday, October 15, 2013

[Ed. note -- I include a squib of an Eighth Circuit opinion today because it relies in part on Ninth Circuit law.]

United States v. Christensen, No. 11-10562 (Stafford, DJ (N.D. Fla.), with Bybee, J; dissent by Tashima, J) --- A divided panel of the Ninth Circuit affirmed an above-Guidelines, 60-month sentence imposed on a real-estate developer who pleaded guilty to one count of wire fraud. The main issue that divided the panel is whether the district court articulated a proper reason for imposing a sentence almost twice as long as what the plea agreement called for.

The defendant diverted about a million dollars he had received as investments in his development projects for personal use -- his $13,000 monthly mortgage payment, payments to his wife and ex-wife, his daughter's car and college tuition, and for gambling at a casino in Biloxi, Mississippi. The PSR included a sampling of victim-impact statements, but the sentencing judge wanted more information so that he could impose an above-Guidelines sentence. The government submitted an itemized list of where some of the diverted money had gone, and some of the victims of the fraud spoke at the sentencing hearing. At sentencing, the judge said, "I believe that given the egregiousness of his conduct, including lying, covering up, using funds for personal purposes, destroying the victims' lives, cheating victims out of significant sums of money that they needed, and taking advantage of personal relationships, that the guideline range doesn't adequately account for the harm that his conduct has caused." The judge imposed a five-year sentence.

For the majority, this explanation was adequate, even though there were (sometimes wide) discrepancies between the amounts each victim lost as reflected in the PSR and the amounts certain victims said in open court that they lost as a result of investing in the defendant's developments. The majority also took into account the victims' statements that they lost out on vacations or retirement opportunities, or that the losses destroyed their marriages. "These 'life-destroying impacts,' however, were proper for the district court to consider even if not tied to the loss Christensen caused by misappropriating investor funds," the majority said. It also noted that if good conduct not strictly tied to the criminal conduct may be considered at sentencing, see Pepper v. United States, 131 S. Ct. 1229 (2011), then so may bad outcomes not strictly related to the defendant's criminal conduct. The district court was allowed to consider not only the dollar amount of the losses, but also the "intangible nature" of the defendant's conduct, in deciding to sentence outside the Guidelines range, partly also because the Guidelines range itself had been properly computed.

For Judge Tashima in dissent, however, it was "apparent from any fair reading of the record" that "the district court based its above-guidelines sentence on investor losses not caused by Christensen's criminal conduct." Indeed, Judge Tashima pointed out that the sentence was based on impact that "one investor who was not a victim at all" suffered. For instance, according to the PSR, the investor who lost an opportunity to retire lost only $5500 from the fraud, and the defendant had paid back all but $200 of it by the time the sentencing hearing came around. It was thus doubtful that the defendant's fraud caused him to lose out on an opportunity to retire. And an investor who claimed to have lost her life savings of $300,000 and her marriage to the defendant's fraud was listed in the PSR as having lost only $23,000. "These [intangible or other] losses may have been caused by Christensen's poor, but non-criminal, management, the victims' poor judgment in investing with him, the deterioration of the economy, or some combination thereof. None of these are reasons why Christensen was convicted of a crime." Judge Tashima chastised the majority for ignoring "the reality that the district court's variance was based not on aggregate losses, but on the impact on individual victims." Judge Tashima saw clear error, and would remand for resentencing.

The decision is here:



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