Court
vacates non-guideline sentence
By
David Ziemer
Wisconsin Law Journal
August
23, 2006
| What
the court held Case:
U.S. v. Wallace, No. 05-3675. Issue:
Can a court impose a below-guideline sentence, if the intended loss is substantially
greater than the actual loss? Holding:
No. The guidelines expressly require that the sentence be imposed based on intended
loss. |
A
non-guideline sentence that rests primarily on facts not unique to a particular
defendant, but reflect attributes common to all defendants, is inherently suspect,
the Seventh Circuit held on Aug. 14.
As
a result, the court vacated a sentence of one day, when the guideline range was
24 to 30 months.
Darryl
Wallace pleaded guilty to wire fraud. The calculated amount of intended loss was
$400,000, although Wallace only spent $30,000 of it, and the guideline range was,
as noted, 24 to 30 months.
In
requesting a below-guideline sentence of one year and a day, Wallace asked the
court to consider a number of factors: his parents divorced when he was 8 years
old; he was raised in a tough neighborhood; he endured sexual abuse at school;
he lost his brother and stepfather in a fire; and he witnessed his sister being
struck and killed by a car. He also claimed that, after his arrest, he learned
from a psychologist that he was addicted to gambling and suffered “recurrent,
mild Major Depressive Disorder.”
Wallace
also cited post-arrest rehabilitation and the aberrance of his crime relative
to his entire life.
The
sentencing court imposed a sentence of three years probation plus a $2,000 fine.
The court also ordered that he attend psychological counseling and Gamblers Anonymous.
The
court cited that the intended loss far exceeded the actual loss, Wallace’s
gambling, his “extraordinary remorse,” and that, in spite of a difficult
childhood and psychological problems, he had led an exemplary life “until
he faltered and did this one ridiculous, stupid crime.”
The
government appealed the sentence, and the Seventh Circuit reversed in a decision
by Judge Diane P. Wood.
The
court began by quoting U.S. v. Dean, 414 F.3d 725, 729 (7th Cir. 2006), that the
farther a sentence departs from the guidelines, the more compelling the justification
must be.
The
court stated, “In other words, the new regime imposes a procedural obligation
on the district court judge to explain what it is that persuaded her to choose
the sentence she did.”
After
a discussion of the meaning of the word, “reasonableness,” the court
observed, “an unreasonable application of federal law is different from an
incorrect application of federal law.”
The
court then quoted the following statement of the Second Circuit in U.S. v. Rattoballi,
452 F.3d 127, 133 (2d Cir.2006), with approval: “we will view as inherently
suspect a non-Guidelines sentence that rests primarily on factors that are not
unique or personal to a particular defendant, but instead reflects attributes
common to all defendants.”
In
Rattoballi, the district court gave the following reasons for a below-guideline
sentence: the defendant’s admission of guilt; the hardship of the criminal
process; the severe toll that the case had taken on the defendant’s business;
and the role that another person had played in the scheme.
The
Second Circuit found that all were common attributes, and vacated the below-guideline
sentence.
Commenting
on the Second Circuit’s approach, the Seventh Circuit wrote, “The distinction
between common and individualized factors is one that is compatible with our decisions.”
The
court cited its rejection of a below-guideline sentence to ameliorate the severity
of the 100:1 ratio between powder and crack cocaine. The court explained, “Only
after computing the guidelines range using the correct 100:1 ratio does the district
judge have discretion to impose a sentence that is above or below that range,
as long as she respects statutory maxima and minima, if the factors outlined in
sec. 3553(a) indicate that such a sentence would be reasonable for the particular
defendant.”
The
court concluded, “reasonableness is something that must be assessed at retail;
wholesale conclusions that are nothing but disagreements with the guidelines are
impermissible.”
The
court then cited a very similar and very recent Eleventh Circuit case for support.
U.S. v. Crisp, 2006 WL 1867754 (11th Cir. July 7, 2006).
“Reasonableness
is something that must be assessed at retail; wholesale conclusions that are nothing
but disagreements with the guidelines are impermissible.”
Hon.
Diane P. Wood
Seventh Circuit |
Crisp
also involved a white collar criminal who stole nearly half a million dollars.
The guideline range was 24 to 30 months, but the government filed a substantial
assistance motion, requesting a sentence of 12 months.
The
district court, however, went further, and imposed five hours imprisonment, and
five years supervised release. The Eleventh Circuit held the sentence unreasonable
and reversed.
The
Seventh Circuit, turning back to Wallace’s case, also reversed the sentence.
The
court found that all of the factors given by the district court for a below-guideline
sentence were individual to Wallace, except one — the gravity of his crime
as measured by actual loss rather than intended loss.
This
factor, the court characterized as “something that will be common to a great
number of partially successful financial crimes.”
The
court concluded, “Although the court’s review of Wallace’s individual
traits was helpful, we are troubled by the fact that the judge said that she thought
that culpability should be measured by actual loss rather than intended loss.
This was not an appropriate consideration, as the guidelines have already made
the judgment that intended loss is what counts.”
The
court added, “Every defendant who commits a financial crime and gets away
with only some of the money will make exactly the same argument — as Rattoballi
put it, this is an attribute common to all defendants.”
Calling
the sentence the district court imposed a “one-hundred percent reduction
in sentence,” the government had argued that the permissible considerations
are insufficient to warrant such a drastic departure from the guideline.
However,
the court rejected the government’s reasoning, stating, “We are reluctant
to distill the reasonableness inquiry into a numbers game that relies only on
a numerical or percentage line for reductions.”
The court
noted that the percentage reduction will always seem larger the lower the guideline
sentence.
The
government also argued that Wallace’s lack of prior criminal history is an
impermissible reason for a below-guideline sentence, because Wallace’s Category
I criminal history already reflects that.
However,
the court noted that a defendant can fall into Category I, even if he has one
prior criminal history point, or he has expired convictions; Wallace had neither.
The
court thus concluded that Wallace’s lack of criminal history is grounds for
a below-guideline sentence.
Despite
rejecting a number of the government’s arguments, the court ultimately held
that the sentencing court failed to adequately justify the sentence.
The
court wrote, “In the end, it is the fact that the court chose to eliminate
any meaningful incarceration for a crime that involved $400,000 of intended loss
that makes this such an extraordinary choice. … Even though our standard
of review is deferential, we cannot be left to guess at the district court’s
rationale in a case like this.”
Accordingly,
the court vacated the sentence, and remanded for further proceedings.
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here for Case Analysis.
David
Ziemer can be reached by email.
