Friday, June 03, 2005

Associated Press Story, June 3, 2005

DALLAS (AP) - A federal grand jury in Dallas issued an indictment Thursday against a Tulsa man, accusing him of assaulting and intimidating a Southwest Airlines flight attendant last summer.

Steven Kyle Maxwell, who was flying from Houston to Tulsa, also bit another passenger on the hand and struck him on the lip in the July 2004 incident, U.S. Attorney Richard B. Roper said in a news release.

Maxwell, who caused the flight to be detoured to Dallas Love Field, was charged with one count of interference with flight crew members and attendants and one count of assault in the special aircraft jurisdiction in the United States, according to the release.

Maxwell was honorably discharged from the Army with a medical disability after an automobile accident, has a pin in his hip and needs surgery, his Dallas attorney David Finn said.

Finn said he believes the combination of prescribed pain medication Maxwell was taking and something that happened on the plane might have contributed to the incident.

"It's a serious charge, he and family understand that, and we'll continue to work with prosecutors toward a resolution," Finn said. "He's got really bad hips, and some sort of tray or seat came down on his hip prior to this, and that was the trigger, if you will."

If convicted, Maxwell faces a maximum sentence of 20 years in prison and a $500,000 fine.

Read more!

Thursday, June 02, 2005

Dallas County Jail-Pathetic

Exclusive: Glitches at county jail swallowed up inmates
Officials say they did their best to release them on time

10:04 PM CDT on Saturday, May 28, 2005

By JAMES M. O'NEILL / The Dallas Morning News

It was as if Scott Williams had vanished into a black hole.

Scott Williams was arrested on a DWI charge during the jail's most chaotic week. He hoped to be out the next day, but, denied his medications, he says he endured "a week of hell." Shortly after his rush-hour fender-bender on Central Expressway, he made a cellphone call from the back of a police car. In a voice laced with agitation, he told his partner, Rodney Russell, that he had been drinking, that he had rear-ended a Jeep, and that he was headed to the Dallas County Jail on a DWI charge.

Mr. Williams thought he would quickly be released – as soon as Mr. Russell could learn from the jail how much bail to post.

But Mr. Williams' arrest occurred on Friday, Feb. 4, during the most chaotic week the Dallas jail has likely ever seen.

"I expected to be out the next day, for sure," Mr. Williams said. "But it turned into a week of hell."

Just days before his arrest, on Jan. 31, the county had launched a new computer system for the jail. The Adult Information System, or AIS, which has cost $3 million in federal grant money, was designed to make book-in and law enforcement work more efficient. Someday it might do that.

Instead, the system's launch caused a staggering backlog of defendants waiting for book-in the week of Mr. Williams' arrest. In addition, lists of new inmates produced by the county's old mainframe could no longer be produced, wreaking havoc with court officials' ability to know who was in jail and to set inmates' court dates.

Jail clerks – some poorly trained – also had trouble with the new system.

The passel of problems caused scores of people, including Mr. Williams, to languish in the jail for weeks and months too long.

Through interviews with court officials, defendants and others, and after reviewing data in the new system and in court documents, The Dallas Morning News has identified at least 40 cases in which defendants were imprisoned too long after the launch of AIS. Some officials say the total number is far higher.

"These cases are just a small representation of the chaos we experienced," District Court Judge Vic Cunningham said.

In the four months since the crisis began, the county has never tried to determine how many people were affected. As a result, some who might have been located and released remained imprisoned far too long.

For instance, one inmate was booked in Feb. 8, but the courts learned of him only when he managed to get a message to a judge 56 days later. In many cases, court officials discovered someone's imprisonment only because family members alerted them.

"It comes down to a tremendous failure by the county. It's outrageous," said Michael Linz of the American Civil Liberties Union of Texas. "But it's not unusual for the county to think of these folks as just people in jail – the weak and powerless – and to ignore them."

Mr. Linz said those held too long could have the basis for a civil rights lawsuit against the county.

"Ordinarily, the government's not permitted to hold you without cause," he said. "Dallas has been notoriously deficient in taking care of basic human liberties."

To date, Dallas County has no idea whether people who should have been released are still in the jail. One court accidentally discovered a defendant still imprisoned as recently as May 12 even though it had told the jail to release him 34 days earlier. The court learned he was still imprisoned only when he failed to show up for a court appointment, and his attorney called his family to ask why. They said he was still in jail.

News analysis
To gauge the extent of the problem, The News looked at the cases of 50 defendants booked in at the jail over about four hours on the evening of Feb. 1. At least one in seven appears to have been imprisoned too long.

Also Online

Exclusive: Glitches at county jail swallowed up inmates

Bail fails to spring prisoner

Judge takes note

Case was dismissed, but she wasn't
"It is unimaginable that people could languish for days and weeks beyond their release date. It's outrageous," former county criminal court judge David Finn said.

The sweeping problems affected all kinds of people. Some had long criminal records, others had no prior offenses. Some are homeless, and some hold prestigious white-collar jobs.

Many were locked away for minor infractions, and for some, charges were dropped. One woman had her charges dismissed by a grand jury on Feb. 22, but wasn't released until 36 days later – only after she got word to her lawyer.

Defense lawyers were taken by surprise by the computer problems, saying they had come to trust the old system and never felt a need to check if their clients were actually released on time.

"Things came to a standstill. We couldn't get our clients brought down to court because the jail couldn't find them," said Kenda Culpepper, who sits on the board of the Dallas Criminal Defense Lawyers Association.

When Ms. Culpepper heard one of her clients was held a month too long, she called the court and got him released.

"What about the people stuck in there who didn't have a lawyer to advocate for them?" she said. "People without access to family or a lawyer were just stuck. Their rights were violated. It's unforgivable.

"There was a problem with the whole thing that the county has to acknowledge. For them not to – that's pure arrogance."

County Commissioner Mike Cantrell, who spearheaded the project, said AIS is solid and functions as intended. The big problem occurred when mainframe reports for the courts were cut off.

"There were issues with the old mainframe when it started, there are issues with this new system, and there will be issues with whatever replaces AIS in the future," he said. "There are always going to be instances that pop up out of the norm."

He said his responsibility is to Dallas County taxpayers and indicated he isn't inclined to issue an apology to those held too long.

"I don't want to be callous," he said. "But something like that has to go through the district attorney's office."

Instead of conducting an audit to discover how many people were held too long, Mr. Cantrell and others said they have focused on fixing the immediate problems.

'A perfect storm'
The same week the computer problems started, commissioners received a scathing report on health care in the jail. It noted that many inmates with physical and mental illnesses were not receiving their prescribed medication.

Mr. Finn said the jail's poor health care, compounded by the computer problems, created "a perfect storm."

"It puts the mentally ill in a bad position," he said. "They feel absolutely lost in the jail, and that's scary." He said drugs for mental illness can cause serious side effects when suddenly withdrawn.

The confluence of computer problems and health care woes proved toxic for Scott Williams.

Mr. Williams has fought depression and anxiety for years. His prescription medications have not always worked, and doctors have had to tinker with the mix. In August, he spiraled downward, so Mr. Russell got him into a treatment program. Doctors finally hit on a combination of four drugs that seemed to stabilize him.

But early this year, a close friend died. And on the night of Feb. 4, Mr. Williams, who has had a drinking problem since experiencing childhood sexual abuse, bought some alcohol. He took it to his apartment on Turtle Creek Boulevard and had a few drinks. When Mr. Russell came home and took a nap, Mr. Williams decided to go get new water for his tropical fish tank. He took Mr. Russell's car, and rammed the Jeep.

Mr. Williams, 36, said that when he arrived at the jail, he told the staff and the nurse on duty about his medications.

He was placed in a holding cell designed for 63 people but which at that point was crammed with several hundred. "People were literally laying on top of each other," he wrote after being released.

He remained there Friday night, Saturday and into Sunday, expecting to be bailed out. He refused to eat the moldy baloney sandwiches the jail gave out, and a guard put him on suicide watch.

Early on Monday, Feb. 7, he was taken to a suicide cell, stripped naked and left on the floor, freezing and shaking. He said he could already feel withdrawal symptoms from the lack of medication.

Later that morning, after a doctor lifted the suicide watch, Mr. Williams was transferred to a cell he said was strewn with glass, while the floor, sink and toilet were smeared with feces. He started to yell at the guards to move him. "I needed my medication and was going hysterical in a world of hell," he wrote later.

Monday night, he said, he started to shake uncontrollably.

By Wednesday, he was wondering if he had been abandoned.

Defending AIS
Mr. Cantrell defends the work of InfoIntegration, the fledgling company that created AIS. Asked if anything should have been handled differently, he said, "Nothing on the development side."

Mr. Cantrell blames the bulk of problems on two things. There were clerical errors among jail staff. And Atos Origin, the company that has a five-year, $53 million contract to handle the county's old mainframe, failed to ready the old system to collect data from AIS so it could still produce key reports for the courts.

When that occurred, officials decided it would be faster to rebuild the reports using AIS rather than adjusting the mainframe. Mr. Cantrell said InfoIntegration had to shift key resources away from fine-tuning AIS to develop the court reports through the new system.

Yet court officials say the reports produced by AIS are inaccurate. Numerous defendants were left off the lists – forcing them to remain imprisoned until they were discovered days or weeks later, often by chance.

On March 1, Tonya Brenneman, president of InfoIntegration, told commissioners it would take two more weeks to clear up major issues afflicting the system. That day, Mr. Cantrell rejected suggestions to hire a larger computer firm to help.

He says the county did not have money to hire another company because the project was funded strictly with federal grant dollars, and they were allocated for development of the system. "Another company couldn't do anything more than InfoIntegration because of the limited amount of money available," he said.

But 12 weeks after Ms. Brenneman's assurances, serious problems persist. As recently as May 17, Robert Clines, the county's new technology director, said dozens of problems with the court reports are still "significantly impacting those courts."

Judge Cunningham said the daily reports listing new defendants used to be seven pages long when produced by the old system. Reports now are only four pages – a signal that people are missing from the lists.

"It's getting better," he said, "but there's still a long way to go."

A recent report by Mr. Clines indicates that blame should be spread among Atos for cutting off the court reports, the county for providing scant oversight, and InfoIntegration for failing to properly test the system.

Stacks of case folders continue to pile up on court clerks' desks because the information they need to assign court dates or issue warrants is missing from AIS.

Court staffers have turned to satire to express their frustration, circulating a "Top 10" list of what the initials "AIS" really stand for. One example: "Anyone Incarcerated Stays."

Jail staffers complained that AIS would assign the same book-in number to multiple defendants, and list inmates in one cell when they were in another.

And the system's sluggish performance early on frustrated clerks during book-in. In some cases, the same charge is listed for a defendant five or six times, a sign of an impatient clerk repeatedly hitting the "enter" button.

As a result, the AIS system indicates there are 3,000 more inmates in the jail than there really are, said Sgt. Don Peritz, the Sheriff's Department spokesman.

"Our people are understaffed and overworked to the point of burnout," Sgt. Peritz said. He said Sheriff Lupe Valdez has assigned a full-time deputy to manually check the status of inmates to reduce the chance that people are imprisoned for too long.

Forgotten in system
While Scott Williams was deteriorating in jail, Rodney Russell, his partner, grew anxious on the outside.

On Saturday, the day after Mr. Williams' arrest, Mr. Russell approached the jail's information desk to ask about Mr. Williams' status. A jail employee couldn't find him in the system. "They had no clue whether he was even booked in," Mr. Russell said.

Mr. Russell returned on Sunday and Monday, with the same results. On Tuesday and Wednesday, officials were able to locate Mr. Williams in the system, but Mr. Russell said they gave conflicting information about what the bond would cost.

On Wednesday, Mr. Russell was able to see Mr. Williams in the jail. The visit only confirmed his worst fears – Mr. Williams clearly was not taking any medication.

"He was dazed and confused. He told me he hadn't slept since Friday," Mr. Russell said.

On Thursday morning, because of medical staff intervention, guards brought Mr. Williams to court. Given his condition, County Criminal Court Judge Lisa Fox issued a personal recognizance bond so he could be released immediately. Even so, he remained in jail.

On Friday morning, Dr. Gary Neller, a jail psychiatrist, saw Mr. Williams for a second time. "Off all four medications since being locked up," he wrote in Mr. Williams' medical file. "[Patient] doesn't recognize me as his doctor and refuses all jail medication."

Mr. Williams was finally released that Friday.

He said he still has nightmares about the experience. "I felt like a sick animal that had been kicked to the side of the road," he said.

For Mr. Russell, his partner's release provided only fleeting relief. "This experience has set us back with his meds – everything we had just accomplished," Mr. Russell said.

He is still amazed his partner was unnecessarily imprisoned for a week. "We couldn't believe this was happening in a big city like Dallas," Mr. Russell said.

"Maybe a one-horse town. But Dallas?"



Here are case studies of some of the people imprisoned in the Dallas County Jail too long:

A 23-year-old man was arrested Feb. 6 on charges of possession of a prohibited weapon and using a false identity. He pleaded guilty and received probation Feb. 11 to both charges. But he was not released. When he missed a probation meeting, a warrant was issued for his arrest. That's how the court discovered he was still imprisoned on April 15, more than two months later. Days stuck: 64

A 25-year-old man was arrested March 11 and charged with unlawful use of a vehicle, his sister's. The case was never set for a grand jury. On April 13, a court official told the defendant's attorney that the case had been withdrawn March 16 but that he was still in jail on a separate theft charge. Further research revealed the charge was actually for another defendant, a woman. The two had been given the same book-in number. The defendant was released April 13. Days stuck: 28.

A 53-year-old man was arrested Dec. 10 on a theft charge. He pleaded guilty and was to serve a term ending April 10. But he wasn't released. Finally, after his daughter called the court, he was freed – 16 days late. But his daughter's efforts could not get him out in time to keep him from catching a painful staph infection. "I got these boils on my skin," he said. "And it hurts. It's excruciating." Days stuck: 16.

A 42-year-old man was arrested March 15 by the Union Pacific Railroad and charged with interference with railroad property. But the case was never filed. He should have been released by March 21, but he never appeared on court lists. From jail, he sent a message to a judge April 10. The court ordered him released. He was freed April 15. Days stuck: 26.

A 24-year-old man was arrested Feb. 18 on a marijuana possession charge. He pleaded guilty, and his sentence should have ended March 4. The court first sent the jail a notice about his release date on Feb. 22. He was freed April 27. Days stuck: 54.

A 32-year-old man was arrested Feb. 8 on charges of credit card abuse and theft. Courts did not know he was in jail until April 5, when he got a note to a judge. He was released the next day. In an e-mail obtained by The News. Criminal District Court Judge John Creuzot wrote to county officials, "We did not know of his existence until he wrote me." On April 13, cases were disposed of, and hecontinued on probation. Days stuck: about two months.

A 22-year-old man was arrested Feb. 14 on a criminal mischief charge. He pleaded guilty, and his sentence was to end March 17. He was freed April 7. Days stuck: 21.

A 28-year-old man was arrested Feb. 26 on charges of theft and failure to identify himself. He did not appear on the court's daily jail chain list until April 1 on one charge and April 14 in a second court on the other. He pleaded guilty to both charges, and his sentence, running concurrently, should have ended March 12. He was released April 14, the date of his first court appearance on the second charge. Days stuck: 33.

A 30-year-old man was arrested Feb. 11 on a marijuana possession charge. He was not called to court until April 14. His sentence, running from his book-in date, should have ended March 2. He was released April 18. Days stuck: 43.

A 17-year-old woman was arrested March 31 on a theft charge. Charges were not filed within three days, so she should have been released by April 5. She was released April 23. Days stuck: 18.

Read more!

Post-Booker Sentencing Information-No Plea Agreement

Calif. State Bar. #55062
1901 Avenue of the Stars, Suite 390
Los Angeles, CA 90067

Tel.: (310) 201-0666
FAX: (310) 282-7111

Attorney for Defendant


Defendant Case No.: CR

DEFENDANT, by and through his attorney of record, BEN W. PESTA, hereby responds to the U.S. Probation Office’s Guideline Presentence Report and Recommendation. His response is keyed to the numbered paragraphs of the Report.

USPO’s Recommendation, p. 2, 6: Defendant’s counsel believes that the USPO intended to write: “each of Counts 1 through 4, all to be served concurrently,” instead of “consecutively.”

2-3, 4: The Report correctly describes the provisions of the plea agreement. Both sides are aware of the potential ex post facto issue, and both agree that the stipulated agreement is more equitable than the usual one-Guidelines-edition-for-all-offenses practice. In light of the weird result in United States v. Booker and United States v. Fanfan, 543 U.S. ___, ___ L. Ed. 2d ___, 125 S. Ct. 738 (2005)(hereinafter, “Booker”), the Sentencing Guidelines are now advisory: “So modified, the … Sentencing Reform Act of 1984 … makes the Guidelines effectively advisory. It requires a sentencing court to consider Guidelines ranges, see 18 U.S.C.A. §3553(a)(4)(Supp. 2004), but it permits the court to tailor the sentence in light of other statutory concerns as well, see §3553(a)(Supp. 2004).” Booker, 125 S. Ct. at 757.

3, 6: Both parties did in fact so stipulate. See Plea Agreement, 9, 20. The Court will, however, note that, post- Booker, that there is considerable support that the “other standard of proof determined by the Court to be appropriate” should be the reasonable doubt standard.

1. The Booker opinion (the first, or merits, opinion, hereinafter: “Booker, Stevens, J.”) relied heavily on the reasonable doubt standard in the quotations it used in its citation of precedent:
a. Apprendi v. New Jersey, 530 U.S. 466, 490 (2000): “Other than the fact of a prior conviction, any fact that increases the penalty for a crime beyond the prescribed statutory maximum must be submitted to a jury, and proved beyond a reasonable doubt.” Booker, Stevens, J., slip op., 6.
b. Ring v. Arizona, 536 U.S. 584, 602 (2002): “If a State makes an increase in a defendant’s authorized punishment contingent on the finding of a fact, that fact – no matter how the State labels it – must be found by a jury beyond a reasonable doubt.” And: “[T]he characterization of a fact of circumstance as an ‘element’ or a ‘sentencing factor’ is not determinative of the question ‘who decides, judge or jury.’” 536 U.S. at 609, n. 7. Booker, Stevens, J., slip op., 6-7.
c. Blakely v. Washington, 542 U.S. ___, 124 S.Ct. 2531; 159 L.Ed.2d 403 (2004): Washington sentencing law mandated a “standard” sentence of 49-53 months, unless the judge found aggravating facts justifying an exceptional sentence. The application of the Washington sentencing scheme violated defendant’s Sixth Amendment right to have the jury find the existence of “any particular fact” that the law makes essential to his punishment. 542 U.S., at ___, slip op., at 5, cited in Booker, Stevens, J., slip op., 7.
The Court observed of Booker and Fanfan that: “As far as the defendants are concerned, they face significantly higher sentences – in Booker’s case almost 10 years higher – because a judge found true by a preponderance of the evidence a fact that was never submitted to the jury.” Booker, Stevens, J., slip op., 13, emphasis added.
The Court specifically distinguished United States v. Watts, 519 U.S. 148 (1997), which appears to countenance the preponderance standard at sentencing: “Watts, in particular, presented a very narrow question regarding the interaction of the Guidelines with the Double Jeopardy Clause, and did not even have the benefit of full briefing or oral argument. It is unsurprising that we failed to consider fully the issues presented to us in these cases.” [Citation omitted.] Booker, Stevens, J., slip op., 16, fn. 4.
Finally, the Court specifically held in Booker: “Accordingly, we reaffirm our holding in Apprendi: Any fact (other than a prior conviction) which is necessary to support a sentence exceeding the maximum authorized by the facts established by a plea of guilty or a jury verdict must be admitted by the defendant or proved to a jury beyond a reasonable doubt.” Booker, Stevens, J., slip op., 20.

2. In re Winship, 397 U.S. 358 (1970) established the reasonable doubt standard as a Fifth Amendment derivative, and it addressed proof standards in a juvenile proceeding in which (as in sentencing post-Booker) the Sixth Amendment jury trial right doesn’t apply. Winship required the reasonable doubt standard because it provides “concrete substance for the presumption of innocence – that bedrock axiomatic and elementary principle whose enforcement lies at the foundation of the administration of our criminal law.” 397 U.S. at 363.

3. Neither Congress nor the U.S. Sentencing Commission has expressly provided that preponderance (or any other standard) serve as the proof standard during federal sentencing. In the Commentary to §6A1.3, the Guidelines state that: “The Commission believes that use of a preponderance of the evidence standard is appropriate to meet due process requirements and policy concerns in resolving disputes regarding application of the guidelines to the facts of a case.” This belief is not a mandate, and has received no examination since the Apprendi line of cases began. The same commentary also says that in each case, the “sentencing court must determine the appropriate procedure in light of the nature of the dispute, its relevance to the sentencing determination, and applicable case law.”
The last advantage for the reasonable doubt standard in sentencing is that from the appellate standpoint, it’s bulletproof.
Parenthetically, the Court will note that 6’s (that is, 21 of the plea agreement’s) Blakely language is contingent on a specific event, i.e., “Blakely renders application of the Guidelines unconstitutional, either in whole or in part.” This is not what happened in Booker. The “remedies” opinion (hereinafter: “Booker, Breyer, J.”) invalidated not the Guidelines, but their mandatory application via 18 U.S.C. §§3553(b)(1) and 3742(e). The Guidelines themselves, in whole and in part, are still constitutional. Two parts of the Sentencing Reform Act are not.

10, 69-70: The ________ children, 14 year-old Brother and eight year-old Sister, suffer from marked learning disabilities of unknown etiology. They are enrolled in the Special Education program at Redondo Union School District, and have been so enrolled for nearly all their school careers. Curiously, the District seems never to have administered psychometrics to identify the specific nature of the children’s disabilities.
Consultation reports on Brother and Sister, written by pediatric neurologist Ronald S. Gabriel, M.D., are appended as Exhibits, 0070-0076. Dr. Gabriel found that Brother has “an intact neurological system at this time, although he clearly demonstrates evidence for a learning disability that requires further clarification as to whether it is specific or generalized [i.e., “retardation”] and what interventions are required from a cognitive perspective.” Exhibits, 0071. He noted a perinatal incident, but was unable to diagnose what (if any) effect it may have had. Exhibits, 0070.
Sister, unlike her brother, exhibited a degree of motor system dysfunction. Perhaps because of her low motor skills, Dr. Gabriel wrote: “This youngster displays findings compatible with an organic process for reasons that are unclear.” Exhibits, 0075.
Eeg readings for both children were normal. Exhibits, 0073, 0076.
The salient point of interest about both children is, of course, that both have learning disabilities. This would seem to indicate either an hereditary basis for the disabilities, or some other common origin (e.g., both could have been exposed to the same harmful environmental influence in utero, as were many of the children born in the area immediately around New York’s infamous Love Canal).
Whatever the cause, Brother, a ninth-grader, was doing arithmetic at the third-grade level two years ago, and his reading “clearly is below grade level.” Exhibits, 0070. His school district’s 2003 Individualized Education Plan (appended, the most recent available) described him as “a student with a severe language delay as well as a specific learning disability. Both receptive and expressive language skills are delayed (syntax/semantics).” Exhibits, 0001. He received speech therapy for a number of years, but does not do so now.
Sister, Brother’s younger sister, is not so many years behind in school; she is in third grade, so this would be impossible. Her consultation also reports her “reading and doing math below grade level.” Exhibits, 0074. Additionally, it describes her difficulties with motor functions and language skills and handling tension. Sister’s November, 2004 Individualized Education Plan describes her as exhibiting “significant speech and language weaknesses. Delays are evident in articulation, especially in connected speech, as well as receptive and expressive language skills.” Exhibits, 0016. It notes that the third-grader is “able to open and close containers such as ziplock bags and playdough lids.” Exhibits, 0025.
In her letter of December 2, 2004 (appended to the Guideline Presentence Report), Mrs. Clarke describes the children as requiring substantially more help and supervision than ordinary children their ages. “They have to have their parents around to act as interpreters or translators between themselves and the world,” she writes. “I can’t always do this, and Kevin does a lot of it, more than would be the case (I think) with most working fathers …. Most children are close to their fathers, but these two children are closer than most. The difference is most apparent between Brother and other boys his age, who are beginning to put some distance between themselves and their fathers. Not Brother.”
The USPO’s recommendations are found on page 3 of her sentencing recommendation. Clearly, the Clarke children would be devastated to see their father incarcerated, and clearly, the negative effect on them would be greater than those on most children of the same ages.
The Court will note that, in keeping with 18 of the Plea Agreement, defendant does not suggest a departure from either the Offense Level or Criminal History Category. Rather, he raises the issue of the disproportionate effect on the children pursuant to 18 U.S.C. §3553(a)(1), directing sentencing courts to consider the nature and circumstances of the offense and the history and characteristics of the defendant; and pursuant to Booker, Breyer, J., slip op., 16-17, directing sentencing courts to consider the Guidelines and §3553(a). The Plea Agreement, at 20, also provides: “Both defendant and the USAO are free to: (a) supplement the facts by supplying relevant information to the United States Probation Office and the Court ….”

13, Part D. Sentencing Options
When the USPO wrote the Guidelines Presentence Report and Recommendation, she recommended an 18-month sentence. Recommendation, 3. She did so when the USSC Sentencing Guidelines were the only sentencing option. Today, post-Booker, the Court is directed to consider the Guidelines as one of a number of sentencing factors. Specifically, Booker, Breyer, J. directed sentencing courts also to consider the other directives set forth in 18 U.S.C. §3553(a).
Defendant anticipates that the government will argue that the Guidelines already encompass those directives adequately. The Court will be unsurprised to read that defendant argues that they do not.
Defendant has appended two cases from other districts that illustrate thoughtful approaches to post-Booker sentencing: United States v. Ranum, No. 04-CR-31 (E.D. Wisc., January 17, 2005)(hereinafter, “Ranum”) , a case featuring some striking similarities to this one; and United States v. Nellum, No. 2:04-CR-30 PS (N.D. Ind., February 3, 2005)(hereinafter, “Nellum.”)
Judge Lynn Adelman, the author of the Ranum opinion, saw conflict areas between the Guidelines and:
“§3553(a) factors, many of which the guidelines either reject or ignore. For example, under §3553(a)(1) a sentencing court must consider the ‘history and characteristics of the defendant.’ But under the Guidelines, courts are generally forbidden to consider the defendant’s age, U.S.S.G. §5H1.1, his education and vocational skills, §5H1.2, his mental and emotional condition, §5H1.3, his physical condition including drug or alcohol dependence, §5H1.4, his employment record, 5H1.5, his family ties and responsibilities, §5H1.6, his socio-economic status, §5H1.10, his civic and military contributions,§5H1.11, and his lack of guidance as a youth, §5H1.12. The guidelines’ prohibition of considering these factors cannot be squared with The 3553(a)(1) requirement that the court evaluate the ‘history and characteristics’ of the defendant. The only aspect of a defendant’s history that the guidelines permit courts to consider is criminal history. Thus, in cases in which a defendant’s history and character are positive, consideration of all of the §3553(a) factors might call for a sentence outside the guideline range.” Ranum, slip op., 2-3.

Judge Adelman went on to cite §3552(a)(2)(D), requiring a sentencing court to evaluate the need to provide defendants with education, training, treatment or medical care in the most effective manner, and its possible conflict with U.S.S.G. §5C1.1; §3553(a)(7), directing courts to consider the need to provide restitution, and its conflict with the Guidelines prohibition on departures to facilitate restitution; and the Guidelines’ potential conflict with the primary directive of §3553(a), to “’impose a sentence sufficient, but not greater than necessary to comply with the purposes’ of sentencing.” Ranum, slip op., 3-4.
The Nellum court wrote: “What complicates this task [of sentencing after Booker] is that many of the §3553(a) factors – such as the history and characteristics of the defendant, see §3553(a)(1) – are factors that the guidelines ‘either reject or ignore.’” [Citation omitted.] Nellum, slip op., 2.
The Guidelines sentencing scheme violated not just the Sixth Amendment, but 18 U.S.C. §3661: “No limitation shall be placed on the information concerning the background, character, and conduct of a person convicted of an offense which a court of the United States may receive and consider for the purpose of imposing an appropriate sentence,” cited in Breyer, J., slip op., 8. The Guidelines placed every limitation on the courts’ consideration of such matters – except for prior bad and uncharged acts, criminal history (including arrests not resulting in conviction, a common element of PSRs), the all-inclusive “relevant conduct” and other negative information. The tacit purpose of the Sentencing Guidelines wasn’t just to ensure consistent sentences, but to ensure longer sentences. The Guidelines were effectively a prosecution brief – and not a “virtual” prosecution brief, either.
Other district courts (and not just defendant’s counsel) agree that Guidelines sentencing hardly encompasses the directives of Booker and §3553 adequately. Ranum and Nellum offer similar, informal rubrics for post-Booker sentence determination. In each case, the court calculated the old Guidelines range, then applied §3553 factors. The Ranum court determined that those factors “fell into three general categories: the nature of the offense, the history and character of the defendant, and the needs of the public and the victims of the offense.” Ranum, slip op., 10. The court weighed the non-Guidelines factors and “concluded that the sentence called for by the guidelines, 37-46 months, was much greater than necessary to satisfy the purposes of sentencing set forth in §3553(a).” Ranum, slip op., 13.
The Nellum court considered §3552(a)(2) factors, noting: “according to a United States Sentencing Commission Report released in May, 2004, ’Recidivism rates decline consistently as age increases….’” Nellum, slip op., 5. The court also noted that the defendant was a good father and generally law-abiding, when he wasn’t using crack, and had some serious medical problems. Ultimately, the court considered the government’s recommendation and the defendant’s request, and (Solomon-wise) split the difference.
Although the day of the Guidelines Presentence Report is over, defendant’s counsel believes that the role of the U.S. Probation Office in the sentencing process has just become more significant. There are sentencing factors after Booker that were not factors before. These factors may have been given comparatively short shrift in the old Guidelines-oriented reports, or may have been ignore completely. For the reasons cited above, defendant requests the Court to refer his case immediately back to the United States Probation Office for a revised presentence report consistent with the holding in Booker, and oriented not strictly toward the Guidelines, but toward the other now-relevant sentencing factors, including but not limited to those enumerated in §3553(a).

Defendant’s counsel requests that the Court sentence him to a probationary sentence, with a condition of home detention or community confinement or some combination thereof, as such terms and conditions as the Court may see fit. Because §5C1.1 is no longer mandatory, the Court has the authority to impose such a sentence.
The Guidelines level, as set by the Plea Agreement and calculated by the USPO, is 21 for the concealment/laundering counts, 16 for the tax count and 1 for a §3D1.4 enhancement, for a total of 22. The Guidelines levels are a function of the loss amount. The USAO has agreed to a reduction of two points and an extra one, per §3E1.1(b), subject to the satisfaction of the Plea Agreement. This calculation yields a total of 19, for a sentence of 30-37 months. The USAO has agreed, subject to satisfaction of the Plea Agreement, to recommend a low-end sentence.
The USPO has recommended a Level 15 sentence, 18-24 months, and that the Court sentence at the low end of the range.
Adopting Judge Adelman’s Ranum organization, defendant raises the following relevant factors, pursuant to §3553(a), and to the Booker line of cases:
Facts about the offense:
The offense was admittedly serious because of the amount involved: $196,000 in loss to the victims, plus a tax loss of $69,422 to the government. Further, some of the money went to defendant personally. Most of it, however, did not go to him at all, and much of it went to his principal’s investors or backers. Defendant did as he was directed by Aaron Tonken, an event promoter whose lawyer he was. It is not too gross an oversimplification to describe Mr. Tonken’s business practices as “robbing Peter to pay Paul.” Mr. Tonken directed defendant that checks written on Peter’s deposits and issued to Paul, and Defendant complied. The defendant kept hoping, increasingly anxiously as time wore on, that Tonken would make enough money to square things before the whole house of cards came tumbling down. Tonken kept assuring him that he would do so, that love was just around the corner and that happy days were almost here again.
Nevertheless, defendant knows that what he did was wrong, and he knew it then, and he acknowledges it, and he has already done so before the Court in writing. He was not, however, the initiator of the operation, nor was he its director. His motivation was pecuniary, in that he wanted to keep his job with Tonken, even as he saw that the slope was becoming slippery. Still, the situation was not that of the traditional thief or embezzler, who sees money lying unattended and says, “Aha!” He followed his client’s directions, which he admits knew to be wrong directions. The Court should regard these circumstances as mitigating, if imperfectly so. Motivation was not a factor under the Guidelines, which calculated only amount of loss; it is now. The Court should regard defendant less culpable than someone who took all the money and kept it. 18 U.S.C. §3553(a); and see, e.g., United States v. Ranum.
The Court will note that the defendant came forward when initially contact by federal law enforcement officials and the U.S. Attorney’s Office, and discussed his involvement at length with them without seeking counsel. Defendant’s counsel is frankly unsure whether this aspect of defendant’s conduct bears on culpability or on something else, but he believes it relevant, and the Court should be aware of it, per §3553(a).
Facts about the defendant:
Defendant is married, and has two children. The two children are learning-disabled. They have been described previously, and their condition is documented extensively in the Exhibits (0001-0025, 0070-0076). Defendant is, by his wife’s account, a dutiful and loving father to his children, who require more love and duty than most. The children are attached to and dependent on their father financially and emotionally to an extent far greater than ordinary children of their ages, and their suffering will be greater commensurate with their degree of attachment and dependence. Most children would be enormously upset at the prospect of their father’s incarceration; these children will be truly wretched.
Counsel realizes that the Court’s reaction may be, “Well, he should have thought of that, shouldn’t he?” It must be a rare individual indeed who comes before the Court for sentencing having previously “thought of that.”
Mrs. Defendant works in real estate sales, but not full-time. For all practical purposes, defendant is the sole support of his family.
Defendant is 46 years old. His age, his socioeconomic status and his training and background make him unlikely to recidivate. Nellum, slip op., 5-6. These are now relevant sentencing factors. Ranum, slip op., 11-13; 18 U.S. Code §3553(a)(1).
Defendant suffers from diabetes, hypertension and high cholesterol. Report, 10, §72. His doctor seems to be treating him with the usual regimen, but has expressed concern about the family history, based on defendant’s father’s death from a heart attack at 47.
The father was a successful lawyer in Los Angeles. He died when defendant was seven years old. His mother was something of a stereotypical “Ward-I’m-worried-about-the-Beaver” Fifties mom, who did not expect to have to fend for herself after the early death of her husband (what wife does?). She was consequently unprepared to do so. Unlike the elder Mrs. Dickens, she could not take other people’s wash. As a result, the family’s circumstances rapidly were reduced. The mother lost the family home. When Defendant reached the age of 16, he began working to support himself and his mother. (He has an older brother, who was away in graduate school at this time.) He worked as a liquor store stocking clerk through high school. In college, he was a file clerk for a company that sold sundry items to convenience stores. From 1980 through his first or second year of law school, he worked at Superior Stamp and Coin Company, beginning as a librarian and eventually heading departments there.
Defendant moved back home to help his mother in his third year of college. She lived with him and, when the Defendants married in 1989, with the couple, until her death in 1990. These facts are not all in the Presentence Report, but counsel offers them here by way of a proffer. If called upon to testify to them under oath, Defendant could truthfully do so.
To describe Defendant as an example of filial duty would be an understatement. The USAO will no doubt argue that he isn’t being sentenced for his performance as a son. Nevertheless, the §3553 directs the Court to consider his background. What kind of son he was is (like what kind of father he is) part of his background, and additionally bears on the Court’s consideration of other factors, e.g., his likelihood of recidivism.
Notwithstanding the necessity of supporting both himself and his mother, Defendant finished Loyola High School, UCLA and University of Southern California School of Law. He is a lawyer, although, pursuant to the Plea Agreement, he submitted his resignation to the State Bar of California on February 11, 2005. The Court is required by §3553(a)(2)(D) to provide him with education, training, treatment or medical care in the most effective manner. The Guidelines’ interpretation (§5C1.1) of this law has been, invariably, “Let the Bureau of Prisons do it.” Counsel frankly hasn’t a clue about how the BoP proposes to educate or train him for life after the practice of law. That he has resigned from the Bar also, of course, decreases his likelihood of recidivism, insofar as the charged offenses were committed in his capacity as Tonken’s lawyer.
The defendant presents, under separate caption, a number of letters of reference from friends and associates attesting to his good character.
Needs of the public and the victims of the offense:
One may suppose that, absent any other consideration, the public purpose of deterrence would be best served by a good, stiff prison sentence, perhaps with an upward departure. Perhaps even the tumbrel to Tyburn. Fortunately, §3553(a)(2)(B) is not the only subsection the Court must consider. Section 3553(a) directs sentencing courts “to impose a sentence sufficient, but not greater than necessary to” comply with the purposes of sentencing.
Mark Ranum was a bank loan officer who made $1,134,000 in improper loans. He basically continued to make bad loans to cover his first batch of loans, eventually making a false statement in order to do so. He found himself sliding down a slippery slope not unlike the defendant’s. In his opinion, Judge Adelman wrote:
“Because the case was so unusual, I doubted whether a prison sentence would have much value as a deterrent. Loan officers generally follow bank rules because their jobs depend on it. As previously stated, I concluded that the public did not need to be protected from defendant. As for the victim, the bank, defendant’s ability to make restitution would be enhanced if he was not incarcerated for an overly long time.”
United States v. Ranum, slip op., 13.
Judge Adelman’s argument is essentially defendant’s. The case is, the Court will acknowledge, an unusual one. The public need not be protected from Defendant, who is frightened and remorseful and won’t be practicing law again anytime soon. Most attorneys generally follow the rules regarding trust accounts. Counsel himself has never heard of a case in which a client dictated the disbursement of funds from an attorney’s trust account, and counsel believes the Court won’t have done, either.
Defendant faces restitution and tax payments totaling over a quarter-million dollars. The U.S. Probation Officer assesses – accurately – that he can’t make them now. Report, 12, 90. He will absolutely not be able to make restitution payments while he is in prison. The USPO assesses (Report, 12, 89 and 13, 91) that he should be able to make “nominal monthly payments of at least $2,000” during his supervised release. Unfortunately, he will lose his job on incarceration. After he is released, getting a new job that pays a wage in the vicinity of his present job may prove an insurmountable problem, what with a federal prison term on his résumé. If he is given a sentence of probation, he will be able to retain his job, and he will be able to pay taxes and restitution.
It seems evident, then, that the interests of the victims of the offense, including the United States, are much better served by the Court’s not incarcerating Defendant.
Counsel asks that the Court, having taken notice of the sentencing factors and options now before it, temper justice with mercy and sentence defendant to a term of probation, subject to such terms and conditions (including, if necessary, electronic monitoring or community confinement) as it deems appropriate and necessary.
Should the Court not decide to sentence Defendant to probation, Defendant requests that the Court allow him to self-report. The USPO recommends (Recommendation, 2) that he be so allowed. Defendant’s counsel has discussed this issue with the government, and AUSA Feeney has confirmed (telephone conversation, February 9, 2005) that the government has no opposition to him doing so.
The USPO recommends (id.) that Defendant be given thirty days to surrender himself. In counsel’s experience, the Western Region just about never gets anyone designated within thirty days, and we wind up with a flurry of ‘phone calls, and a last-minute request to a district judge for more time. Defendant requests sixty days, which should provide adequate time for the Bureau to designate an institution, with perhaps a little breathing space. Defendant’s counsel has discussed this request with AUSA Jill T. Feeney.
Defendant requests that the Court recommend that he be designated to an institution within the Central District of California, or as nearby as is practical.

DATED February 11, 2005 Respectfully submitted,

Attorney for Defendant

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Wednesday, June 01, 2005

Another Good Federal Sentencing Memorandum



Plaintiff, :

: Case No. CR2-02-130


Defendant. :


I. Introduction.

Defendant Coleman objects to the Government’s attempt to relitigate the fraud case that the jury rejected. The Presentence Investigation Report (“PIR”) and the Government suggest that this court sentence the Defendants as if they had plead guilty or been found guilty of all the charges in the indictment rather than being found innocent of 63 out of 63 felonies. To accept the Government’s arguments would make a farce and mockery out of the right to a jury trial and the right to proof beyond a reasonable doubt. See Blakely v. Washington, 124 S. Ct. 2531 (2004).
The application of the United States Sentencing Guidelines (“USSG”) results in a Zone A range.
Defendant Coleman recognizes that this memorandum is being filed later than initially represented to the Court. This memorandum is intended to be a comprehensive supplement to the objections and initial Sentencing Memorandum previously filed. Defendant Coleman suggests that the Government be given an additional week, if necessary, to file any reply to this Sentencing Memorandum, Part II.
II. Standard of Review.
On April 6, 2005, the Sixth Circuit decided the case of United States v. Webb, ___F.3d___, No. 03-6110 (2005). Although the Sixth Circuit declined to specify precisely what weight the district courts must give to the appropriate Guidelines range, or any other 18 U.S.C. 3553(a) factor, the panel decision held that whether a sentence is “reasonable” is not dependent on whether it comports with the Guidelines, but is a “concept of flexible meaning, generally lacking precise boundaries.” Webb, at *9 n.9. The Sixth Circuit noted that if “reasonableness” were equated with a Guideline sentence, such a standard “would effectively re-institute mandatory adherence to the Guidelines” that was condemned in Blakely. Webb, supra, citing United States v. Crosby, 397 F.3d 103, 115 (2d Cir. 2005).
The Webb court held:
[W]e read Booker as instructing appellate courts in determining reasonableness to consider not only the length of the sentence but also the factors evaluated and the procedures employed by the district court in reaching its sentencing determination. Thus, we may conclude that a sentence is unreasonable when the district judge fails to “consider” the other factors listed in 18 U.S.C. 3553(a), and instead simply selects what the judge deems an appropriate sentence without such required consideration.” Booker, 125 S. Ct. at 757 . . .

Webb, supra, at *7. See also, Defendant Coleman’s Sentencing Memorandum, filed April 5, 2005.
This Honorable Court need not hold an evidentiary hearing to resolve each of the factual disputes raised in Coleman’s and the Government’s correspondence to the probation department and this Court. Coleman objects to the re-litigation of the case at sentencing. See, Webb, at *8 n.6 (“we decline to address whether a district judge must always calculate the precise appropriate Guidelines range in order to comply with Booker. . . [The] ‘precise calculation of the applicable Guidelines range may not be necessary’ in certain situations where the district judge imposes a non-Guidelines sentence.”). See also, Coleman’s Sentencing Memorandum, Part I, April 5, 2005.
The jury unanimously and conclusively rejected any notion that any of the defendants acted fraudulently concerning any private individual, entity or in their transactions with the government. The rejection of fraud in 63 out of 63 counts speaks volumes for the total lack of any evidentiary support for a finding of fraudulent intent. Moreover, Blakely and Booker prohibit all of the enhancements contained in the PSI or urged by the Government in its submission to this Court.
III. General Objections.
Defendant Coleman objects to numerous factual determinations in her Presentence Investigation Report (“PIR”). These objections as well as supporting exhibits are fully set forth in a letter to David Walden on behalf of Coleman and Defendant OvImmune and appear as an Addendum to the Sentencing Memorandum, Part I, filed April 5, 2005. Defendants Coleman and OvImmune reassert each and every objection in the Walden correspondence as if specifically set forth anew in this memorandum.
IV. The appropriate guideline computation pursuant to 18 U.S.C. 3553(a)(4).
In addition to the objections based on Blakely-Booker, Defendant Coleman specifically objects to any sentence, Guideline or otherwise, based on fraud. As a threshold matter, the mail fraud and conspiracy acquittals were totally unrelated to the charges contained in Counts 9 through 23 and therefore cannot be considered “relevant conduct” pursuant to USSG 1B1.3. The issues in Counts 9 through 23 concerned whether the egg powder was a food or a drug. Counts 1 through 8 do not constitute “jointly undertaken activity,” see USSG 1B1.3, related to the strict liability misdemeanor convictions in Counts 9 through 23.
The issues in Counts 1 through 8 concerned alleged misrepresentations to Ray Suen about the efficacy of the hyperimmune egg powder and whether Ray Suen relied on the purported misrepresentations of the Defendants when insisting that the egg powder be produced. The evidence at trial showed that Suen didn’t care about efficacy claims, that he knew his venture was a “crapshoot,” that he had a large law firm protect his interests and that he was determined to produce and sell the egg product regardless of whether studies showed the egg powder was effective. Suen pled guilty to a misdemeanor FDCA count. If he was a victim, presumably the Government would not have pursued him as a defendant. To reiterate counsel’s closing argument at trial, the charges concerning Suen were a complete sham.
Defendants do not shed their constitutional rights to a jury trial and proof beyond a reasonable doubt at the start of sentencing proceedings. A determination of the “statutory maximum” must precede and cabin a determination of the USSG for purposes of 3553(a)(4). When a fact is not proven at trial utilizing proof beyond a reasonable doubt, unless the Defendant stipulates the facts supporting an enhancement (which Coleman does not) or consents to judicial fact-finding (which Coleman does not), those facts cannot be used to enhance a guideline level. In this case, application of 18 U.S.C 3553(a), as well as an application of the USSG, demands that a non-incarcerative sentence within Zone A is required.
Counts 9-23 do not specify any monetary loss, presumably because the purported (and jury-rejected) fraud was on the government rather than on any individual. Nor was the jury asked to make any findings that would implicate the fraud table in USSG 2F1.1. The only findings that the jury made rejected fraud – 63 times! Therefore, the base offense level as established in USSG 2N2.1 is 6 for each offense. It is now settled law that the Sixth Amendment forbids a judge from increasing a defendant’s sentence based on facts not admitted by the defendant or proven to a jury beyond a reasonable doubt. Booker, 125 S.Ct. at 744-45 (Stevens, J).
In this case, the guideline range is 6. The Defendant’s Criminal History is Category I. A Zone A non-incarcerative sentence is mandated. Any enhancements taking Coleman out of the 0-6 range would constitute “a tail which wags the dog of the substantive offense(s)”McMillan v. Pennsylvania, 477 U.S. 79, 88 (1986).
The jury determined that the hyperimmune egg powder was a drug rather than a food or food supplement, presumably because of some language used to market the product. That determination does not implicate fraud. Coleman obtained inactivated candida vaccine and inoculated 10,000 chickens. If there was fraud, why go to the trouble of inoculating the chickens? Or spend money on vaccines? The evidence was equivocal on efficacy, the Government contending that the product didn’t work and the many defense experts and lay witnesses contending that it would and did. Evidence at trial showed that the Government (both the USDA and, at times, the FDA) confirmed that hyperimmune eggs were a food and that Addison Labs checked with various agencies of the Government before shipping deactivated vaccines to Coleman. Unless the rights to a jury trial and proof beyond a reasonable doubt are merely talismanic incantations devoid of any true meaning, the base offense level for the strict liability misdemeanors is 6.
V. Factors in 18 U.S.C. 3553(a).
18 U.S.C. 3553(a) provides that a court shall impose a sentence sufficient but not greater than necessary to comply with the purposes of sentencing. The court in determining the particular sentence to be imposed, shall consider:
A. The nature and circumstances of the offense and the history and characteristics of the defendant:

The indictment alleged that Coleman “knew” that her product didn’t work. This was the gravamen of the government’s case. The jury concluded that Coleman’s hyperimmune eggs were a “drug” rather than a food or food supplement. In all other respects, the Government’s theories were rejected. The reasonable conclusion from the evidence at trial is that the jury believed that hyperimmune eggs had value in treating a wide variety of ailments. Certainly, the evidence presented by expert and lay witnesses for the defense supported efficacy. Coleman’s hyperimmune egg product was not the only product on the market extolling the virtues of hyperimmune eggs. At the time, the former general counsel for the FDA was providing testimonials for a competitor’s hyperimmune egg product, noting how hyperimmune eggs made him feel like a 20 year old man (he was around 65 at the time). See, Exhibit A. Although Coleman’s advertising did not fit within the strictures of FDA-acceptable litany, her product was based on the same science as many other products on market. Since the evidence at trial clearly showed that the FDA was unsure at various times whether the hyperimmune egg product should be treated as a food or a drug, how can the government claim that Coleman should have known that her product would be considered a drug?
On March 25, 1998, Marilyn Coleman was notified by the USDA that her products, made from hyperimmune eggs, were given GRAS (Generally Recognized as Safe) status under the Food, Drug and Cosmetic Act. The government argues that one agency does not “speak” for another, and that one agency will not interfere with the ruling of another agency. See, Government’s Letter to Mr. Walden, March 16, 2004, pg. 4. Dr. Coleman tried to do what she thought was right – she tried to get answers from the government. Even the government’s own witnesses testified how confusing the process is. Dr. Coleman called, she wrote, and she visited the FDA with little to no response. Dr. Coleman never had the intent to commit any of the offenses in Counts 1-21.
Marilyn Coleman is 59 years old. She has no prior criminal history. She is a respected scientist, researcher and innovator. She has been described by one of her colleagues as an “intellectually stimulating” person who has contributed much to society, and has much more to contribute. For the past thirty years she has dedicated her life to the poultry industry. She was an Assistant Professor of Poultry Science at The Ohio State University, and has a PhD in Physiology. She has worked throughout the world with poultry growers and manufactures.
Dr. Coleman is also the president of MAC Associates, an international poultry consulting business. MAC Associates works with all areas of the poultry industry, from feed mill to further processing. Dr. Coleman’s specialty is live production and incubation.
Dr. Coleman is known throughout her community for her humanitarian and missionary works. She has volunteered and consulted throughout the world helping third world countries with their food production. She opened her home to many wayward teenagers; there were over 50 teenagers who stayed at the Coleman residence from anywhere from one night to three years. She is active in the Kiwanis and provides a yearly fundraiser for the group. She is active in her church and throughout the years has volunteered to teach Bible studies and has been involved in other church related activities. When Dr. Coleman had difficulty processing hyperimmune egg powder, she gave approximately 10,000 eggs to her community for free rather than having them go to waste.
Exhibit B represents letters from her friends and family that describe her as a caring individual that is always there for her friends and family. She is described as the kind of person who goes out of her way to help others. She has been married to her husband George for thirty-seven years. They have two children whom, like their mother, have chosen careers in areas of science. She has four grandchildren whom she cares for as often as possible.
She has exhausted all of her funds developing her hyperimmune egg product or defending it and herself in civil and criminal court proceedings. She is nearly bankrupt after 40 years of productivity. This is not an offense or offender that calls for jail time.
B. The need for the sentence imposed:
The court in determining what sentence to impose must look at the seriousness of the offense, and impose a sentence that will provide adequate deterrence to criminal conduct, protect the public from future crimes of the defendant, and provide the defendant with needed educational or vocational training, medical care or other corrective treatment.
Marilyn Coleman believed in her work, and believed her products made people feel better because people told her they felt better, that the product had a positive effect on their lives, and that it enhanced their well-being. Marilyn Coleman cared about the people who bought the product from her, and she cared about their problems. Marilyn Coleman never intended to mislead or defraud anyone and, as the jury’s verdict forms reflect, the jury found that Marilyn Coleman was not fraudulent in her venture.
Dr. Coleman has much to offer the community. Throughout her life she has been involved in humanitarian efforts to help improve the lives of others. She not only has expertise in the area of scientific research and the poultry industry, but she is also an avid, experienced and well respected gardener. Given the opportunity, she has many talents she could share with others.
Dr. Coleman lives a simple life in Richwood, Ohio. She is still devastated by these proceedings. She has spent all of her money in development of this product, and then defending the product against her competitors and now the government. She is nearly bankrupt and can barely afford to keep her 49,000 pounds of hymperimmune egg powder refrigerated as she explores how to sell it, perhaps as animal feed in a foreign country. Any incarcerative sentence would just be some form of totally unnecessary “piling on.” There is absolutely no need to protect the public from further crimes and it needs to be stressed as often as possible that the offenses before the court are strict liability. Furthermore, with her many talents, Marilyn Coleman could serve the community through her vast knowledge of scientific matters, and her humanitarian and religious beliefs.
Since Blakely and Booker, forbidden or discouraged sentencing factors are now appropriate to be considered when relevant to factors enumerated in 3553(a). Considering defendant’s age, her education and vocational skills, employment record, family ties and responsibilities and her lack of a criminal record for her entire life, and the strict liability nature of the misdemeanors, there is no need for punishment in this case.
Counsel will address the need to avoid unwarranted sentence disparities at the hearing.
C. The need to provide restitution to any victims of the offense.
The relevant conduct rules of USSG 1B1.3(a) do not apply to restitution under the chapter five guidelines. The threshold issue is whether the sentencing provisions of 18 U.S.C. 3561 and 3583 apply concerning restitution, or are the provisions of 18 U.S.C. 3663(a) applicable?
Since each of the counts of conviction specify 18 U.S.C. 2, it is arguable that 18 U.S.C. 3663(a) applies to these offense. This provision provides that if restitution is ordered, it must be in lieu of any other penalty authorized by law. Therefore, no incarceration can be ordered if restitution is ordered. See Black’s Law Dictionary, citing Glassman Construction Co. v. Baltimore Brick Co., 246 Md. 478, 228 A.2d 472, 474: “in lieu of. Instead of: in place : in substitution of. It does not mean “in addition to.” Contra United States v. Lanzano, 1998 WL 812046 (S.D.N.Y. Nov. 18, 1998); United States v. Miguel, 49 F.3d 505 (9th Cir. 1995).
There is at least one recent Ninth Circuit decision which indicates that 18 U.S.C. 3663(a)(1)(A) would not be applicable to the facts of Defendant Coleman’s case. In United States v. Elias, 269 F.3d 1003 (9th Cir. 2001), the Court held that a conviction under 18 U.S.C. 2 will not trigger 3663(a)(1)(A) unless the underlying offense would otherwise fall within the scope of the restitutional statute. Id. at 1021-22. The Sixth Ciruict does not appear to have decided the issue. However one unreported decision appears to have left the question open. See United States v. Daniel, 14 Fed. Appx. 355 (6th Cir. 2001), 2001 WL 856985 at *7.
The offenses that Defendant Coleman were convicted of do not require mandatory restitution as they are outside the mandatory restitution provisions of 18 U.S.C. 3663 and 18 U.S.C. 3663A.
The PIR suggests that this Court order restitution in the amount of $88,907.63. However, included in this amount is $55,303.51 that the PIR suggests should be paid to Mr. Suen. There is no offense of conviction that would justify an order of restitution to Mr. Suen. Further, Mr. Suen was not defrauded and there has been no showing that Mr. Suen incurred a loss. On cross examination, Mr. Tyack asked Mr. Suen if he knew the results from Dr. Rex’s study, which Mr. Suen responded “Right.” Transcript, pg. 52-53.
The government argues that Ray Suen was a “trusting, admittedly naïve, individual who spent a lot of money on the egg powder based on no scientific evidence of its effectiveness.” See, Government’s letter to Mr. Walden, March 16, 2004, pg. 10. Nothing can be further from the truth. Mr. Suen was a savvy businessman with a prior FDCA conviction on his record who negotiated with a team of lawyers to represent his interests. Although the government argues that Mr. Suen had no way of contacting Dr. Rex, Mr. Suen testified otherwise. On cross examination he testified that he could have written to Dr. Rex. Transcript, pg. 36.
Mr. Suen marketed and sold the product he received from the defendants. It is uncontested that Mr. Suen incurred expenses in producing and marketing the hyperimmune egg product. However, Mr. Suen was able to sell at least $79,432.28 of the hyperimmune egg powder. PIR, paragraph 34. In other words, based on restitution of $55,303.51, he didn’t lose anything.
It would be incongruous, indeed, if Mr. Suen is permitted to manufacture and sell a prohibited product, at a profit, and then plead guilty to a FDCA offense (not his first) and then have the Government order that his costs in his illegal venture be reimbursed. What the government really wants is for this Court to grant Mr. Suen a reward, a gratuitous windfall, for his cooperation. That is not a proper reason for a restitution order. After substracting $55,303.51, the purported balance of restitution is $33,604.12.
Included in the $33,604.12 is $13,466.12 that was sold to either chiropractors or other commercial ventures and re-sold to the public, presumably at a profit. There is no basis to characterize these entities and individuals as victims nor has there been any showing of a loss. There may have been expenditures but instead of a loss, there was more likely than not a substantial profit. The list of “alleged” victims included in the PIR include many names of individuals who testified on behalf of the defense or who provided testimonials and who adamantly stated that they would buy this product again if made available.
In addition, the jury was never asked to find any monetary damage, or to determine that anyone had been victimized by Marilyn Coleman. In fact, the jury’s decision that no fraud was committed on behalf of the Defendant infers that the jury believed the individuals who testified that they felt better after taking the product and that they believed the product improved their quality of life. What seems to be lost on the government is not only did laypeople, experts and a lawyer, Sandy Mueller, testify as to efficacy, but also doctors and chiropractors. There was no fraud.
Finally, in addition to the fact that Coleman cannot make any restitution based on her financial status, the only restitution that can be ordered must be based on the substantive misdemeanors of conviction. In other words, Count 20, alleged a sale of hyperimmune egg powder to Patricia Lynch. After deducting the amount that was returned to Lynch by Coleman, the balance would constitute restitution (assuming previous objections were overruled). Counts 21, 22 and 23 concern sales to undercover agent Robert Cole. Whatever these sales total could be ordered as restitution. In no event can restitution be ordered for Suen or beyond the aggregate sales representing the specific transactions in Counts 9-23. For example, Count 18 concerns failing to register a manufacturing facility. There would be no restitution from this count. Restitution, for all practical purposes, is de minimis.
VI. Defendant Coleman’s Objection No. 1:
The PIR recommended utilization of § 2F1.1 in the calculation of the offense level alleging that the offenses involved fraud. It is our understanding that the probation officer made this determination without the benefit of the transcript. Most importantly, however, is that the jury found there was no intent to defraud or mislead anyone.
Paragraph 50 of the PIR mistakenly places the burden of proof on Defendants to prove the efficacy of the product. Defendants are under no obligation to prove anything in this case.
All that is reflected in the jury findings was that the egg product was a drug rather than a food or food supplement. The jury never made a finding of efficacy. The jury’s finding implies that the egg powder was effective in curing and treating a number of ailments. In other words, although Defendants did prove efficacy, they are under no duty to do so. The government must prove lack of efficacy and must then, by inference, further argue that Defendants knew of the lack of efficacy and then further argue that Defendants misrepresented the product to consumers. The jury rejected these theories. Under the record of this case and the testimony of the lay and expert witnesses for the defense, the government has not proved fraud or lack of efficacy by any standard, including proof beyond a reasonable doubt or the preponderance of the evidence.
The offense level for all the charges is 6.
VII. Defendant Coleman’s Objection No. 2:
Simply stated, there was no fraud and the Fifth and Sixth Amendments guarantee that no individual will be subjected to a sentence greater than that permitted under the USSG based on the verdict of a jury and proved beyond a reasonable doubt.
VIII. Defendant Coleman’s Objection No. 3:
USSG 3B1.3 only applies if the defendant abused a position of trust, or used a special skill “in a manner that significantly facilitated the commission or concealment of the offense.” Application Note 1 expands on this point, stating that the position of trust “must have contributed in some significant way to facilitating the commission or concealment of the offense (e.g., by making the detection of the offense or the defendant’s responsibility for the offense more difficult). According to the PIR, this enhancement applies because Defendant Coleman portrayed herself as a medical doctor, offered egg powder while purporting to be a medical doctor, published articles about the positive effects of the egg powder which were unproven, and spoke on television about the positive effects of the egg powder. On the facts of this case, this enhancement does not apply. “[T]he fact that [the defendant] posed as a physician does not by itself mean that [s]he occupied a position of trust . . . with the victims as that term is used in section 3B1.3 of the Guidelines.” United States v . Caplinger, 339 F.3d 226, 237-38 (4th Cir. 2003).
The only person who testified that Dr. Coleman represented that she was a medical doctor was an agent for the government. There was also at least one newspaper article that characterized Defendant as a medical doctor. Other individuals who testified for the defense all stated that they were aware of Coleman’s qualifications and knew she was not a physician. See Exhibit B, Letters from Coleman colleagues, chiropractors, friends and consumers. Moreover, Dr. Coleman’s credentials were not the issue in this case. Whether the OvImmune product was or was not a drug was not dependent on Dr. Coleman’s qualifications and Dr. Coleman was found not guilty of fraud.
From the jury verdict, there was a determination that the egg powder was a drug. The effect of the egg powder on the consumer was the same, regardless of whether the egg powder was technically a drug or a food. Even in cases involving fraud, “fraud alone does not justify the enhancement.” United States v. Caplinger, 339 F.3d 226, 237 (4th Cir. 2003), citing United States v. Bollin, 264 F.3d 391, 415 (4th Cir. 2001). The enhancement applies to fraud offenses where a person of trust uses the position to commit a difficult-to-detect wrong. As summarized earlier, there was no fraud, no concealment and the relevant conduct provisions of USSG 1B1.3 do not apply. The Government did not prove lack of efficacy. Whether Coleman was a medical doctor or Ph.D. is not tethered to whether the hyperimmune egg powder is a food or a drug and therefore the allegations in the PIR did not significantly facilitate the strict liability misdemeanors. United States v. Brunson, 54 F.3d 673, 678 (10th Cir. 1995)(enhancement “requires more than a mere showing that the victim had confidence in the defendant. Something more akin to a fiduciary function is required.”).
The Sixth Circuit has found “position of public or private trust” is a term of art, appropriating some of the aspects of the legal concept of a trustee or fiduciary.” United States v. Ragland, 72 F.3d 500, 502-03 (6th Cir. 1996)(bank employee who defrauded customers did not abuse trust); United States v. Humphrey, 279 F.3d 372, 380 (6th Cir. 2002)(vault teller who defrauded bank did not abuse trust). The concept of a trustee or fiduciary does not apply to the offenses of conviction in the Coleman case. The offenses of conviction are strict liability regulatory mala prohibitum offenses where the “penalties commonly are relatively small, and conviction does not do grave damage to an offender’s reputation.” United States v. Morisette, 342 U.S. 246 (1952).
Counsel for Coleman cannot find any cases that have applied an abuse of trust enhancement to a strict liability misdemeanor offense under the FDCA. Almost all cases involving doctors and others concern offenses for fraud or some other type of fraudulent activity such as false statements. Research will continue until April 29, 2005 but at this time, there does not appear to be any cases that apply 3B1.3 to the offenses of conviction in this case.
IX. Defendant Coleman’s Objection No. 4:
On January 6, 2002, the defense filed a Motion to Strike Overt Act #42 and/or any reference to a defamation action filed by the defendant in Union County entitled Coleman v. Wiley, et al., on February 21, 2002. All of the proceedings in the civil matter were placed on inactive status for a period of eighteen months, or until the conclusion of any federal criminal case in the United States District Court of Ohio, Eastern Division, whichever was later. In other words, there was no judicial determination of an obstruction.
On April 18, 2002, the government and Marilyn Coleman entered into an agreement prior to the date of the Protective Order Hearing. The parties agreed that the Entry would not be construed in any way as an admission that Dr. Coleman and OvImmune engaged in the conduct alleged in the government’s complaint. The parties also agreed that the Entry would not be construed in any way as an admission that Dr. Coleman and OvImmune engaged in the conduct alleged in the government’s complaint. The parties also agreed that the Entry would not be admissible, and would not be used as an admission, in any civil, administrative or criminal case that is pending, or may be filed, concerning Dr. Coleman and OvImmune. See Exhibit C. The Government is now barred from asserting that the agreed Entry is evidence of obstructing or impeding the administration of justice pursuant to USSG 3C1.1.
On February 18, 2003, this Court granted Defendant’s motion holding that reference to the defamation action violates the Agreed Entry, and was not an act in furtherance of the conspiracy charge.
Defendant Coleman consulted with an attorney before filing the case and was understandably upset with someone who was falsely impugning her character and her egg product. Filing a lawsuit is how disputes are settled in this country. An attorney is bound by the Ohio Code of Professional Responsibility and Civil Rule 11. The decision to seek counsel to determine a lawsuit is justified, and acquiescing in the attorney’s decision that the case is meritorious cannot be considered an obstruction of justice. Counsel for Coleman has been unable to find any case where an obstruction of justice enhancement has been applied to a defendant, represented by counsel, who files a defamation action against a potential witness for the Government. For example, the provision is not intended to punish a defendant for the exercise of a constitutional right. USSG 3C1.1, comment. (n.2).
As to the allegation that Dr. Coleman obstructed justice by filing police reports when strange and unusual things happened at her house, she did what anyone in her situation would do. Even if Dr. Coleman did file a complaint against the agent in charge of the investigation (which she did not), she did so through appropriate channels. Evidence presented at the sentencing hearing will further support that this enhancement is not justified.
As stated earlier, there is no relevant conduct concerning the offenses of conviction. Nor can there be an obstruction of the instant offenses of conviction. USSG 3C1.1. The issue of whether a substance is a food or a drug cannot be impeded by any of the conduct alleged in the PIR. Counsel has been unable to find any cases where the filing of a civil lawsuit has been considered an obstruction of justice.
The conduct alleged in paragraphs 39 and 40 is not “material.” Application note 6 defines “material” to mean “evidence, fact, statement or information that, if believed, would tend to influence or affect the issue under determination.” Nothing alleged in paragraph 39 or 40 meets this definition. In addition, the requirement of “willfully” has not been met. “Willfully” has been defined as the “specific intent to obstruct justice.” United States v. Reed, 49 F.3d 895 (2d Cir. 1995).
X. Defendant Coleman’s Objection No. 5:
There is no restitution because there is no victim. No one was defrauded. See above. The court has the financial data in the PIR. There is no ability to pay a fine unless it is de minimis.
XI. Defendant Coleman’s Objection No. 6:
Defendant does not object to the PIR determination that the offenses of conviction should be grouped together. Defendant does object to the use of the fraud table to determine the applicable guideline range. See infra (Government’s objections). It would be a violation of Blakely and Booker and an erroneous application of the factors in 18 U.S.C. 3553(a) to render consecutive sentences.
The basic rule of guideline § 3D1.2 is that “counts involving substantially the same harm” must be grouped together. Subsection (d) provides for grouping of counts when:
The offense level is determined largely on the basis of the total amount of harm or loss, the quantity of a substance involved, or some other measure of aggregate harm, or if the offense behavior is ongoing or continuous in nature and the offense guideline is written to cover such behavior.

The charged offenses in the Indictment all related to whether the hyperimmune egg powder was a food or drug. In addition, the majority of the product was seized pursuant to a search warrant at the Defendant’s office. The remaining egg powder was seized from The Ohio State University. See, United States Memorandum Contra Defendant’s Motion in Limine to Exclude Samples of the OvImmune Product.
Under Blakely, consecutive sentences would violate Coleman’s Sixth Amendment right to a jury trial and the right to be proven guilty beyond a reasonable doubt because the facts supporting the consecutive sentences were neither admitted by the defendant nor found by the jury.
XII. Downward “departures”.
In light of Booker/Fanfan, “departures” may not be the right nomenclature. A departure implies a standard to depart from. The USSG constitute merely one factor out of seven that must be considered in determining an appropriate sentence. Even a sentence within the guideline range may be unreasonable depending on the facts of the case. Moreover, after Booker, previous forbidden and discouraged factors must be considered when relevant to a particular sentencing decision.
For the reasons set forth below, this case warrants a substantial downward departure from the otherwise applicable guidelines. The Defendant should receive a downward departure based on the factors outlined below:
1. As set forth in the guideline, § 2N2.1 suggests that a downward departure may be justified; “Where only negligence was involved, a downward departure may be warranted.” Marilyn Coleman was found not guilty of fraud, and not guilty of knowing, reckless, or even negligent conduct. Marilyn Coleman never intended to do anything wrong.
2. Entrapment by estoppel: Marilyn Coleman was told by the USDA that in corroboration with the FDA that the products had been given GRAS status in 1998. The Defendant called, wrote and visited the FDA on numerous occasions. She did everything possible to keep open communication with the FDA and USDA regarding the OvImmune products. She cooperated fully with Agent McClure before, during, and after his March 2001 visit. The FDA took no steps to revoke, modify or rescind the GRAS status. The FDA did not prohibit the Defendant from distributing the OvImmune products after the March 30, 2001 teleconference. The FDA never sent the Defendant a copy of the memorandum from the teleconference. The only Warning Letter that was sent to the Defendant was addressed to a wrong address and did not arrive until after the search in August 2001. The doctrine of entrapment by estoppel is based on the fundamental notions of fairness embodied in the Due Process Clause of the Constitution. United States v. Smith, 940 F.2d 710 (1st Cir. 1991). Individuals should not be punished for actions undertaken in good faith reliance upon authoritative assurance that punishment will not attach. United States v. Laub, 385 U.S. 475 (1967). See also, U.S. v. McClelland, 72 F.3d 717 (9th Cir. 1995).
3. First-offender status: Courts are not precluded from considering first-offender status as a factor in downward departure calculations. The Guidelines explain that ‘the court may depart . . . even though the reason for departure is taken into consideration . . . if the court determines that, in light of unusual circumstances, the guideline level attached to that factor is inadequate.” U.S.S.G. § 5k2.0. This departure is in addition to considering the defendant’s criminal record at the criminal history stage. United States v. Grandmaison, 77 F.3d 555, 563 (1st Circuit 1996).
4. Family and Community Ties: Marilyn Coleman is described by her family and friends as a warm and caring person. She has done significant charitable work, and her door has always been open for those who are in need.
5. Defendant’s educational record and community leadership/role model: Marilyn Coleman has dedicated her life to poultry research. She has traveled to over eighty different countries to provide her expertise, often at her own expense. She has consulted with the largest egg producers and broiler producers in the world. She is well respected among poultry researchers. When her children were teenagers, Marilyn Coleman was known in her community for taking in wayward children. She remains active in her community and in her church.
6. An aggregation of factors may warrant a downward departure from sentencing by taking a case out of the “heartland” of typical cases. United States v. Coleman, 188 F.3d 354 (6th Cir. 1999). The Commentary to § 5K2.0 provides that “the Constitution does not foreclose the possibility of an extraordinary case that, because of a combination of such characteristics or circumstances, differs significantly from the “heartland” case covered by the guidelines in a way that is important to then statutory purpose of sentencing, even though none of the characteristics or circumstances individually distinguish the case.” The FDA rules and regulations are complex and the Defendant did her best to try and decipher these rules and to obtain information from officials of the FDA.
XIII. Government Objection No. 1: The United States objects to the PSIRs’ failure to discuss the applicability of grouping.
The PIR correctly groups the fourteen strict liability misdemeanors as a single group. The offense level is largely based on the aggregate harm of introducing one product into the marketplace in violation of the FDCA, the offense behavior was ongoing or continuous in nature, and the offense guideline is written to cover such behavior. Assuming the fraud guidelines do not apply, then there are no victims. At best, the only “victim” would be the government by reason of having its laws broken. Therefore, in addition to the application of USSG 3D1.2(d), USSG 3D1.2(b) would demand that all counts be grouped together because the acts or transactions were connected together by a common criminal objective or constituting part of a common scheme or plan.
USSG 3D1.2, Groups of Closely Related Counts, provides that all counts involving substantially the same harm shall be grouped together into a single group. Subsection (d) of USSG 3D1.2 will be used with the greatest frequency when the offenses “are based primarily on quantity or contemplate continuing behavior and are to be grouped together. The list of instances in which this subsection should be applied is not exhaustive” USSG 3D1.2, comment (n.6).
The harm, as expressed in the indictment, was the introduction into the marketplace of a “drug,” i.e. hyperimmunized eggs, that Coleman “knew” were ineffective for the purposes for which they were marketed. Coleman disputed these allegations at trial and the jury agreed with her on all material points. One “drug” was introduced into the marketplace. Counts 9-23 reflect one aggregate “harm.” The PIR correctly grouped Counts 9-23. Whether hyperimmune eggs are technically classified as a “drug” rather than a “food” has absolutely no bearing on efficacy or on the ultimate consumer.
XIV. Government Objection No. 2:
The government argues that the probation officer should have included in the PIR an enhancement for vulnerable victim pursuant to USSG 3A1.1(b)(1). The PIR takes no position on this issue. The government never made this argument to the jury and it was not part of the Indictment. The government’s case was that the product was a drug because the Defendant allegedly used terminology associated with what the government considers “treat” and “cure” language. The jury was never asked to come to a decision as to whether the product was effective.
The Defendant presented numerous witnesses that testified how the product had enhanced their well-being and that they were upset that the product was no longer available. No one testified that they were denied medical care by taking the product or that their underlying condition worsened by taking the product. In fact, many who testified stated that they took the egg product with the full knowledge of their treating physician. In addition, the jury found that the Defendants never had the intent to defraud or mislead anyone. The PIR correctly determined that there should be no “vulnerable victim” enhancement under the Guidelines.
This enhancement does not even apply in all fraud cases involving multiple parties. USSG 3A1.l, comment. (n.2). It would be anomalous to apply the enhancement to a strict liability misdemeanor. The point of the guideline is to provide an enhancement when a defendant specifically targets an unusually vulnerable victim. The offenses of conviction are not crimes of intent; they are strict liability. Moreover, much of the hyperimmune egg powder that was sold was distributed by chiropractors who exercised their best medical judgment when counseling their patients. The result of applying this guideline to individuals who never considered themselves victimized and whose only complaint is that the hyperimmune egg powder is no longer marketed can only be described as bizarre. Why would Coleman “know or should have known” that a “victim” was “unusually vulnerable” when the “victims” were informing her of the remarkable health benefits of her product? See United States v. Smith, 39 F.3d 119, 122-25 (6th Cir. 1994)(“the evidence must show that the defendant knew his victim was unusually vulnerable and that he perpetrated a crime on him because he was vulnerable. It is not enough to show that the victim happened to be vulnerable at the time the crime occurred.”).
Once again, USSG 3A1.1 appears to apply primarily to fraud cases. Businesses and the government do not fall under this provision. United States v. Gieger, 190 F.3d 661, 665 (5th Cir. 1999); United States v. Brunson, 54 F.3d 673, 676-77 (10th Cir. 1995). In addition, USSG 3A1.1 is “applicable only where the alleged victim of a defendant’s offense of conviction.” United States v. Wright, 12 F.3d 70, 73 (6th Cir. 1993) (emphasis added), appeal after remand, 56 F.3d 66 (Table), cert. denied Wright v. United States, 516 U.S. 923. Nor are the “relevant conduct” provisions of USSG 1B1.3 applicable to a suggested “vulnerable victim” enhancement. Id at 74-75..
XV. Conclusion.
The Government argues that Coleman should be sentenced as if she had pled guilty to the indictment and a trial had never occurred. The Government advocates unprecedented as well as heavy-handed application of Guideline enhancements and consecutive sentencing provisions to strict liability, regulatory misdemeanors. To accept the Government’s arguments would create a situation where “the lagniappe might begin to overwhelm the main course” United States v. Lombard, 72 F.3d 170, 183 (1st Cir. 1995) citing United States v. Rivera-Gomez, 67 F.3d 993 (1st Cir. 1995)(correctly predicting the Blakely and Booker holdings and noting that “there are constitutional limits on the way sentencing factors can be deployed in the punishment of a substantive offense).
For the reasons set forth in this Sentencing Memorandum, Part II, Defendant Coleman requests that this Honorable Court render a Zone A sentence that does not involve incarceration, restitution or more than a small fine.

Respectfully submitted,
Max Kravitz (0023765)
Paula Brown
145 E. Rich St.
Columbus, Ohio 43215
Tel: 614-464-2000
Fax: 614-464-2002



I hereby certify that an exact copy of the foregoing Sentencing Memorandum, Part II, was sent to Ms. Deborah Solove, Assistant United States Attorney, 303 Marconi Blvd., Suite 200, Columbus, Ohio 43215, on this the __13th__ day of April, 2005 via Clerk’s email and U.S. mail.

Max Kravitz

Read more!

Solid Sentencing Memorandum, Post-Booker


Plaintiff, :
v. : Case No. CR-2-01-48
Defendant. :

Now comes Algis J. Gale, through counsel, and hereby submits the following sentencing memorandum for this Court’s review and consideration.

Respectfully submitted,

/s/ Kort Gatterdam
Max Kravitz (0023765)
Kort Gatterdam (0040434)
145 E. Rich St.
Columbus, Ohio 43215
Tel: (614) 464-2000
Fax: (614) 464-2002


A. Statement of the Case and Facts
Algis J. Gale (Gale) was indicted on March 13, 2001, and charged with one count of mail fraud and two counts of wire fraud. The indictment alleged that Gale attempted to defraud Midbanc, Inc. concerning a $50,000 loan to purchase two classic Cadillac cars.
The actions which formed the basis for the indictment occurred in 1996. The loan documents were signed in April, 1996 and the transaction would have been completed had Midbanc, Inc. delivered the cars, as promised, to Gale. However, after Airinhos Serradas called Midbanc, the cars were stopped in transit and never delivered.
The evidence from the hearings held and documents that have been filed in this matter reveal that Algis Gale is a classic car collector. Gale collects the classic vehicles, restores them, enters them into shows, movies, etc. He also sells the vehicles, once restored, for a profit. Unlike the typical mail or wire fraud case, the evidence reveals that had Gale received the vehicles, he had every intention of paying Midbanc back. The Government has admitted such is the case. (See Dan Brown 1/16/04 letter to Phelps Jones at p.3)
The allegations against Gale were the subject of civil litigation in New York which began in 1997. The interview summary shows the government had all the pertinent documents and confronted Gale with those documents during the December, 1998 interview. The indictment itself states that Gale’s “scheme” continued “up to on or about December 9, 1998”, (the date F.B.I. interviewed Gale). Gale made certain admissions during the F.B.I interview. Still, the government filed no charges against him until approximately two and one half years after Gale’s interrogation.
Gale was indicted in March, 2001, shortly before the statute of limitations was set to expire. This Court held motions hearings on Gale’s motion to suppress, his motion to dismiss for pre-indictment delay and motion to dismiss for failure to comply with the statute of limitations. On January 28, 2003, Gale pled guilty to Count 1 of the indictment while the remaining two counts were dismissed.
Since the plea, there have been a number of issues the parties and United States Probation Office have discussed concerning the Presentence Investigation Report (“PIR”). Regardless of how this Court interprets the guidelines, for or against Gale, 18 U.S.C. 3553(a) and the substantial and unique downward departure issues under the guidelines make a sentence of imprisonment unwarranted.
B. Standard of Review.

(1) Blakely-Booker. This Court has permitted Defendant to address the impact of Blakely v. Washington (2004), 124 S.Ct. 2531; United States v. Booker and United States v. Fanfan. United States v. Booker (Jan. 12, 2005), U.S. Nos. 04-104, 04-105, 2005 WL 50108 at *15 (Stevens, J., writing for the majority) upon the instant case. Sentencing is set for June 7, 2005.
In Blakely v. Washington (2004), 124 S.Ct. 2531, the United States Supreme Court held that all facts relevant to the "statutory maximum" sentence must be submitted to a jury and proved beyond a reasonable doubt. The "statutory maximum" was defined as the maximum penalty permitted under applicable sentencing provisions, based solely on the facts reflected in the jury verdict, rather than the sentence that might be imposed based upon additional facts found by the sentencing court. Blakely, 124 S.Ct. at 2536-37, 2539 (emphasis in original). It is of little import "[w]hether the judicially determined facts require a sentence enhancement or merely allow it" where "the verdict [or facts admitted by the defendant] alone does not authorize the sentence." Blakely, 124 S.Ct. at 2538 n.8 (emphasis in original). The Court condemned enhancements of guideline sentences not "based on facts proved to his peers beyond a reasonable doubt, but on facts extracted after trial from a report compiled by a probation officer who the judge thinks more likely got it right than got it wrong..." Blakely, at 2542.
In Blakely, the issue of whether the defendant had acted with "deliberate cruelty," the fact upon which the trial judge had relied to increase the defendant's sentence, had not been submitted to the jury or proved beyond a reasonable doubt. By imposing a term of imprisonment based on this finding beyond the base range prescribed by Washington's sentencing provisions, the trial judge had violated the defendant's rights to a jury trial and proof beyond a reasonable doubt.
In United States v. Booker (2005), 125 S.Ct. 738, the Court held that the United States Sentencing Guidelines ("USSG") violate a defendant's constitutional rights in two ways. First, the Act violates Sixth Amendment rights, because it requires judges, not juries, to decide facts which affect the maximum sentences to which defendants are exposed. Second, it violates Fifth Amendment rights, because it requires judges to find those facts by a preponderance of the evidence, rather than "beyond a reasonable doubt," and does not limit the sentence calculation to facts alleged in the indictment. In other words, the constitutional rights recognized in Blakely are both applicable and consistent with a constitutional federal sentencing scheme.
Prior to Booker, 18 U.S.C. 3553(b)(1) required a judge to impose a sentence within the guidelines unless additional facts were found by the court, and required the applicable guideline range to be determined and thus increased, enhancement by enhancement, on the basis of non-jury factfinding. In United States v. Fanfan, No, 04104 (January 12, 2005), the majority applied a severance analysis to determine that the proper judicial remedy for this unconstitutionality is not to strike down the entire statutory scheme (including the guidelines), and not to engraft additional protective procedures onto the present scheme (e.g., jury trial of guideline enhancements), but rather to "excise" the particular provisions of the statute which it found to create the unconstitutionality- 3553(b)(1)(which makes a guideline sentence mandatory unless a departure can be justified on the basis of judicial factfinding) and 3742(e)(which sets forth the strict standards of appellate review). Without those sections in place, the Court reasoned, the Guidelines no longer establish different statutory “maximums" for each level of offense. Thus the Blakely principle is not violated.
Therefore, Fanfan leaves in place, as the binding law of federal sentencing, principally section 3553(a) of title 18 (as well as section 3553(c) and section 3742(f), most importantly). That means that the judge, at sentencing, is obligated to impose the sentence which is "sufficient but not greater than necessary" to achieve the broad social purposes of sentencing described in section 3553(a)(2). The sentence which is minimally sufficient to serve its public purposes is what the law demands now, and the statute makes quite clear that this sentence is not necessarily or even presumptively a guideline sentence. The guidelines have not been made "advisory" in the sense of being the sole reference point or even the beginning point for the judge's exercise of discretion.
In Booker, the Court concluded that the Sixth Amendment as construed in Blakely does apply to USSG sentencing. Therefore, any fact necessary to support a sentence exceeding the maximum authorized by the facts established by a plea of guilty or a jury verdict must be admitted by the defendant or proved to a jury beyond a reasonable doubt, or else the Sixth Amendment is violated. United States v. Oliver, 397 F.3d 369, 378 (6th Cir. Feb. 2, 2005).
In Blakely, the United States Supreme Court defined the “statutory maximum” sentence that a court may impose as follows:
Our precedents make clear, however, 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. * * * In other words, the relevant ‘statutory maximum’ is not the maximum sentence a judge may impose after finding additional facts, but the maximum he may impose without any additional findings. When a judge inflicts punishment that the jury’s verdict alone does not allow, the jury has not found all the facts ‘which the law makes essential to the punishment,” * * * and the judge exceeds his proper authority.
Id. at 2537 (emphasis in original)(citations omitted). The United States Supreme Court held that the facts admitted in Blakely’s guilty plea were insufficient to support the exceptional 90-month sentence imposed after the sentencing judge made additional factual findings, and Blakely’s sentence was therefore invalid under the Sixth Amendment. Id. at 2538.
(2) United States v. Webb. On April 6, 2005, the Sixth Circuit decided the case of United States v. Webb, 403 F.3d 373, (6th Cir. 2005). Although the Sixth Circuit declined to specify precisely what weight the district courts must give to the appropriate Guidelines range, or any other 18 U.S.C. 3553(a) factor, the panel decision held that whether a sentence is “reasonable” is not dependent on whether it comports with the Guidelines, but is a “concept of flexible meaning, generally lacking precise boundaries.” Webb, 403 F.3d at n.9. The Sixth Circuit noted that if “reasonableness” were equated with a Guideline sentence, such a standard “would effectively re-institute mandatory adherence to the Guidelines” that was condemned in Blakely. Webb, supra, citing United States v. Crosby, 397 F.3d 103, 115 (2d Cir. 2005).
The Webb court held:
[W]e read Booker as instructing appellate courts in determining reasonableness to consider not only the length of the sentence but also the factors evaluated and the procedures employed by the district court in reaching its sentencing determination. Thus, we may conclude that a sentence is unreasonable when the district judge fails to “consider” the other factors listed in 18 U.S.C. 3553(a), and instead simply selects what the judge deems an appropriate sentence without such required consideration.” Booker, 125 S. Ct. at 757 . . .

Webb, supra.
Therefore, this Honorable Court need not hold an evidentiary hearing to resolve any factual disputes raised in Gale’s and the Government’s correspondence to the probation department and this Court. See, Webb, 403 F.3d at 384 n.6 (“we decline to address whether a district judge must always calculate the precise appropriate Guidelines range in order to comply with Booker. . . [The] ‘precise calculation of the applicable Guidelines range may not be necessary’ in certain situations where the district judge imposes a non-Guidelines sentence.”).
(3) Additional Authority. In addition to the aforementioned cases, Gale submits additional cases which were not available at the time he submitted his initial sentencing memorandum. To prepare for a federal sentencing in the post-Booker world, counsel must attempt to canvass new cases from the circuits on almost a daily basis. This, of course, is an impossible task. Nevertheless, the law firm of Kravitz, Gatterdam & Brown, LLC do the best they can.
United States v. Kosinski, Sixth Circuit No. 03-2414, 2005 WL 64777 (March 22, 2005)(district court could not base tax loss on facts not submitted to the jury; 30 month sentence reduced to the loss reflected in the jury’s verdict, i.e., the minimum under the guidelines).

United States v. Williams, 355 F. Supp.2d 903 (N.D.Ohio E.D. Feb. 4, 2005)(amount of financial loss caused by defendant’s alleged fraud was a fact that could not be used to help convict him or to increase his sentence unless it was admitted by defendant or expressly found by the jury beyond a reasonable doubt).

United States v. Davis, 397 F.3d 340, 350 (6th Circuit Jan. 21, 2005)(amount of loss not an element of the offense or argued to jury; independent fact-finding by sentencing judge in making an amount of loss calculation violated the Sixth Amendment).

United States v. Yagar, ____F.3d ____, 2005 WL 873322 (6th Cir. April 18, 2005)(trial court improperly enhanced offense based on the number of victims).

United States v. Jones, ____F.3d ____, 2005 WL 857027*7 (6th Cir. April 15, 2005)(remand when sentence for amount of ephedrine was based on a finding of fact not made by the jury).

United States v. Jaber, ____F.Supp. 2d ____, 2005 WL 605787 (D.Mass. March 16, 2005)(generally and footnote 24).

C. Sentencing Guideline Issues
(1) Base Offense Level and Loss Incurred
Using the 1995 Sentencing Guidelines (see Gale’s 4/1/04 memorandum on minimal planning), the base level for the offense which Gale pled guilty to is 6 pursuant to 2B1.1(a). The question is how many points the offense should be elevated based on the loss incurred by Midbanc. As a threshold matter, Gale asserts that the Court is limited under Blakely-Booker to a base offense level of 6 unless Gale admits or the jury determines that the amount of the loss exceeds $5,000. A determination of the “statutory maximum” must precede and cabin a determination of the USSG for purposes of 18 U.S.C. 3553(a)(4). When a fact is not proven at trial utilizing proof beyond a reasonable doubt, unless the Defendant stipulates the facts supporting an enhancement (which Gale does not) or consents to judicial fact-finding (which Gale does not), those facts cannot be used to enhance a guideline level. In this case, application of 18 U.S.C 3553(a), as well as an application of the USSG, demands that a non-incarcerative sentence within Zone A is required.
If the Court believes it can compute an “advisory” guideline sentence above the minimum, the loan amount for the two vehicles was $60,000. Thus, the loss cannot exceed that number (so the maximum increase in point level is 5 points). In calculating the loss to Midbanc, the appropriate amount is less than $30,000. One vehicle was sold to Gale by Tom Rydalch for $17,000 plus sales tax. The other vehicle was sold to Mr. Gale by Ed Cholokian for $15,000 plus sales tax.
Gale paid a number of other expenses in preparation for the shipment of the vehicles from the West coast. He paid $2500 to Ed Rini to secure space for the cars and to have Rini order rare parts to begin the restoration process. (see Exhibit 1, affidavit of Ed Rini) The Ed Rini affidavit adds support to the argument that Gale did not seek to simply take the money from Midbanc and run. To the contrary, he sought to borrow the money to purchase and restore the cars.
Gale also purchased a commercial garage where he would store the cars. He had made a $5000 downpayment for the garage when the cars were stopped in transit. In addition, Gale made downpayments of $1000 to seller Rydalch (attached at Exhibit 2) and $2000 to seller Cholokian. Gale also had to obtain insurance (attached at Exhibit 3) and various other more minimal costs in preparation for the arrival of the vehicles. Gale spent over $10,500 in various up front fees and expenses and $32,000 to purchase the vehicles, for a total of $42,500, when the vehicles were stopped in transit. All of these actions taken by Gale show his intent to repay the loans.
Gale also paid a deposit to Desert Auto Transport in Arizona. Gale had to pay Desert Transport a deposit to have them transport the vehicles from California to New York. Due to the passage of time, the defense was unable to track down the man named Denny from Desert Transport who had started the process of transporting the vehicles when Pat McClintick of Midbanc ordered that the transport be stopped. Again, this show’s Gale’s intent to buy and restore the vehicles as opposed to a scheme to simply take the proceeds of the loans and not repay Midbanc.
When concerns were raised by the co-applicant on the loans, Key Bank (the bank that actually provided the funds for the loan) demanded that Pat McClintick of Midbanc pay the entire loan amount ($60,000) back to them. Pat McClintick, who supposedly understood the value of classic cars, did not act appropriately to minimize Midbanc’s potential loss. She hurriedly resold the cars back to Ed Cholokian for approximately $18,000-$20,000 for both cars. These are the same cars Gale had just purchased from Cholokian and Rydalch for approximately $12,000-$14,000 more just several weeks or months before Midbanc sold them back to Cholokian.
In addition, Cholokian then put the same cars on the market in May, 1997 and asked for a total of $16,500 for the 1946 Cadillac and $22,500 for the 1947 Cadillac. (attached at Exhibit 4). If sold for this price, Cholokian would have made a profit of approximately $19,000 in less than a year without having to do a thing for the cars. Counsel discussed this matter with a former owner of the 1947 Cadillac, Michael Canyon. Canyon made inquiries of Gale to determine whether Cholokian had title to the car that Canyon used to own. (see Exhibit 4A, letter from Michael Canyon).
It is questionable why Midbanc would agree to take this loss when the cars were in exactly the same condition as when Gale had negotiated the sale of the vehicles. Moreover, Jeff Weinstein, a land developer from New York who knows Gale, called Pat McClintick from Midbanc and offered $40,000 for the two vehicles. (see Exhibit __, affidavit of Jeff Weinstein) McClintick was not interested in Weinstein’s offer. He called her back 1-2 weeks later and offered $50,000. McClintick never bothered to return Weinstein’s call. Gale’s Counsel, Kort Gatterdam, spoke to Michael Canyon who owned the 1947 Cadillac before Tom Rydalch. He said the car was easily worth anywhere from $15,000-$20,000 before restoration. Midbanc clearly has failed to mitigate its damages which would have been less than $20,000 had it negotiated with Weinstein.
In addition, the literature and affidavits attached to this memorandum support the argument that the vehicles were each worth over $60,000 when restored. (see Exhibits 5, 2 and 6-8, affidavits of Jeff Weinstein, Ed Rini, Hemmings used car value guide) There was no reason to unload the cars, with a buyer willing to pay substantially more, for such a low price if McClintick had knowledge, as she testified to, of classic cars.
When reviewing all of the aforementioned, the increase as suggested by the presentence investigation is unwarranted. Since Gale actually purchased the vehicles for $32,500 and obtained loans totaling $60,000, the intended loss in this case can not be any more than $27,500 (the amount above the purchase price for the vehicles) which is less than $40,000. Thus, the offense level can only be increased four points. United States v. Watkins, 994 F.2d 1192 (6th Cir.1993).
If actual loss is used, Midbanc’s failure to act in a commercially reasonable manner in disposing of the cars contributed substantially to its loss. See 5K2.10. Midbanc’s actions are not commercially reasonable. Horizon Savings v. Wooten, 73 Ohio App.3d 501 (9th Dist. 1991). “Good faith…requires the secured party to use its best efforts to maximize the price for the collateral and to have reasonable regard for the debtor’s interests.” Huntington National Bank v. Elkins, 53 Ohio St.3d 79, 81 (1990). Not only did Midbanc have knowledge of a buyer willing to pay twice what Midbanc sold the cars back to Cholokian for but Midbanc, being in the business of providing loans to classic car buyers (see testimony of Pat McClintick), should have known that the cars were worth substantially more than the price it hurriedly sold them back to Ed Cholokian. (See also exhibits attached to April 30, 2003 letter which show the value of the cars)
Pat McClintick did not act appropriately to minimize Midbanc’s loss. Gale took steps, through Jeff Weinstein, to insure that Midbanc had no loss but Midbanc refused. Gale is not responsible for Midbanc’s inaction and ineptness in disposing of the vehicles. Midbanc’s loss would have been $10,000 or less if it had attempted to mitigate its damages. Consequently, Gale’s base offense level should not be increased at all, or only be increased by two or three points, for a total of eight or nine points.
(2) Attempt
U.S.S.G. 2X1.1 describes the attempt section of the Sentencing Guidelines Manual. Gale’s conduct is more appropriately characterized as an attempt rather than a completed act. The offense is an attempt because Serradas called Midbanc and advised that he was not a party to the transactions. Although the loan money was sent out, the cars were never delivered to Gale, therefore, any scheme or plan to obtain the cars was unsuccessful. The guidelines and the caselaw interpreting this section of the guidelines look to the subjective intent of the defendant. United States v. Aideyan, 11 F.3d 74 (6th Circ. 1993); United States v. Watkins, 994 F.2d 1192 (6th Cir. 1993).
In this case, Gale did not believe the transaction was complete until he received the cars. After all, the entire purpose of the loan was to receive the cars, restore them and sell them for a profit. Since the cars never reached New York and Gale’s possession, the offense is an attempt and pursuant to the guidelines, a three point decrease is warranted.
(3) Sophisticated Means
The parties are in agreement that the offense does not involve sophisticated means.
(4) Acceptance of Responsibility
The parties have agreed that pursuant to U.S.S.G. Section 3E1.1(a), Gale deserves a downward adjustment of two points for his acceptance of responsibility.
(5) Criminal History
Gale’s criminal history was categorized as a Category VI with 20 points according to the PIR. (See para. 53) A close review of Gale’s criminal history shows that the sentences in paragraphs 43-47 of the PIR are all related cases pursuant to 4A1.2(a)(2). The offenses were part of a continuous course of conduct. Review of the indictments, arrest dates, plea dates, and sentencing dates and statement of Gale’s trial attorney prove that these acts were joined together for sentencing purposes on May 6, 1982 as one scheme plan or system.
The Probation Officer counted 12 points for these offenses. Gale argues only 3 points should be counted towards criminal history. Thus, Gale’s criminal history point total should be reduced from 20 to 11 (20-9) which would move Gale from criminal history VI to criminal history V. See also, United States v. Lindholm, 24 F.3d 1078 (9th Cir. 1994) (consolidated priors committed to November 1, 1991 Amendment concerning intervening arrests should be treated as related even if separated by arrest).
(6) Gale’s Total Score
Using the 1995 Guidelines, Gale’s total score is:
Base Offense Level: 6
Loss between $20,000-$39,999: +4 (add +3 if loss between $10,000 - $19,999)
Attempt: -3
Acceptance of Responsibility: -2
Total: 1 - 6 (depending on the Court’s calculations) with a Criminal History of V.
D. Downward Departure Issues
Gale has significant downward departure issues. These issues overlap the factors set forth in 18 U.S.C. 3553(a)(1-7) and will be discussed in tandem.
In October, 2004, Gale’s wife of forty one years, Danute Tautvilas lost her long battle with cancer. His son continues to go through a bitter divorce and the house the Gale’s lived in is being sold this month. Gale’s health, including high blood pressure and prostate problems have gotten worse. Obviously this has been a difficult time in Gale’s life. 18 U.S.C. 3553(a)(1). To impose a sentence of incarceration at this time would be devastating to Gale.
Gale relies upon the arguments made previously and exhibits submitted by separate cover on this date. The factors under 18 U.S.C. 3553 do not warrant a sentence of incarceration nor do the guidelines. Gale has proven throughout this litigation which began over four years ago, that he can and will comply with probation sanctions. He has also proven by his lack of criminal conduct since this incident almost 10 years ago, that recidivism is now unlikely. 18 U.S.C. 3553(a)(1). See also, United States v. Gaskill, 991 F.2d 82 (3d Cir. 1993); United States v. Haversat, 22 F.3d 790 (8th Cir. 1994); United States v. Dusenberry, 9 F.3d 110 (6th Cir. 1993); United States v. Hildebrand, 152 F.3d 756 (8th Cir. 1998).
While Gale does live with his son, his son is going through an ugly divorce and has a number of issues of his own. Gale’s son is also going through a bankruptcy as a result of his divorce. Mr. Gale will turn 71 on May 29. Gale has had recent eye problems and prostate problems. He began treatments for his prostate in March and the once a week treatments last until June 8, 2004.
(2) Conduct Less Serious than the Typical Heartland Conduct for the Offense
Another factor warranting departure is that the conduct which occurred in this case, while contrary to the United States Code, is less serious than the typical heartland conduct covered by the guideline for this offense and the loss table overstates the seriousness of the offense. Koon v. United States, 518 U.S. 81 (1996); United States v. Gale, 188 F.3d 354 (6th Cir. 1999); United States v. Sicken, 223 F.3d 1169 (10th Cir. 2000); United States v. Oligmueller, 198 F.3d 669 (8th Cir. 1999); United States v. Stockheimer, 157 F.3d 1082, 1091 (7th Cir. 1998); United States v. Walters, 87 F.3d 663 (5th Cir. 1996); United States v. Monaco, 23 F.3d 793 (3d Cir. 1994). See also, 18 U.S.C. 3553(a)(1).
The act of buying the classic cars was done to make a profit; not to defraud Midbanc out of $60,000. If Gale had intended to defraud Midbanc, he would not have provided truthful information about his home address, phone number, or any other information that would trace him to the New York area. He would not have picked a bank he had done business with in the past. He would not have continued to maintain contact with Midbanc after the cars were stopped in transit or sought, through counsel, other ways to obtain the cars. He would not have put downpayments on the cars, parts, a garage, insurance, etc. All of these acts show Mr. Gale was serious about purchasing the cars and restoring them. As the Government stated in its January 16, 2004 letter to U.S. Probation, were it not for the actions of Serradas contacting Midbanc, the transactions “may well have resulted in the complete repayment of the $60,00 in loans, with no one being the wiser.” (1/16/04 ltr. at 3)
Gale has been a classic car collector and enthusiast for years. He has bought, restored, and admired classic cars as a hobby. He did not enter into these loans with the intent on ruining his reputation and good will among the classic car fraternity of which he has been a member for some time. Counsel attaches some of the paraphernalia and documentation of Gale’s longstanding involvement with classic cars as evidence of his involvement in this area. (Attached at Exhibits 17 – 21).
While the means chosen to obtain his goal were improper, the evidence clearly shows he intended to pay Midbanc back and his conduct in this regard is different from the typical mail or wire fraud case. In addition, given the money Gale has already paid prior to and after the conduct was discovered, the loss to Midbanc is overstated by the U.S.S.G. manual. Therefore, there is no need to afford adequate deterrence or to protect the public from further crimes of the defendant. 18 U.S.C. 3553(a)(2).
(3) Post-Offense Restitution.

In 1995, post-offense restitution could be a factor that can be considered for downward departure. United States v. Garlich, 951 F.2d 161, 163 (8th Cir. 1991). Shortly after the loan fell through, litigation ensued in New York against Gale and his business partner Gary DeTrano. There was litigation by Airinhos Serradas, the unknowing coapplicant and separate litigation by Midbanc.
The documents Gale has been able to obtain show that Gale paid a total of $100,185.00 to Serradas. The judgment was satisfied on August 12, 1997. (see certificate of disposition of judgment) The same attorney who represented Serradas, Mitchell Troyetsky, also represented Midbanc in its civil suit against Gale and DeTrano. According to one of the attorneys who represented Gale, George Gavalas, Gale was down from $65,000 to $20,000 owed a number of years ago when Gavalas represented Gale. (see Exhibit 9, letter from Martin Dorfman, Esq.) In addition, Gale made over $10,000 in downpayments for the vehicles back in 1996. Thus, Gale has paid back well over the amount of the loans to both Midbanc and Serradas.
There is no evidence that DeTrano paid any of the judgment despite his involvement in the wrongdoing. In fact, when DeTrano recently filed for bankruptcy, he listed Gale, Midbanc and Serradas as creditors to whom he owed unspecified amounts of money. (see Exhibit 10, bankruptcy petition of Gary DeTrano)
Gale disputes Midbanc’s statement that it believes it is still owed $43,000. It is unclear how Midbanc arrived at that number since the loan was for $60,000 and they sold the cars for $20,000, leaving a balance of $40,000 back in 1996. The presentence investigation notes a payment of $5000 and states the amount owed is $38,982.06 (paragraph 89) although in the initial presentence investigation report, the amount owed was $35,000 (paragraph 89, initial psi).
It is also our contention that Gale is only responsible for part of the loss to Midbanc. United States v. Arutunoff, 1 F.3d 1112 (10th Cir. 1993). Gale has always maintained that Gary DeTrano had a large role in what happened with the loan process. Unfortunately, due to the passage of time, proof on this matter has been difficult to obtain. Evidence of DeTrano’s involvement can be found in the civil suits filed by Serradas and Midbanc against both Gale and DeTrano; the fact that DeTrano lists Midbanc and Serradas as a creditor in his bankruptcy petition; and several affidavits that shed light on Gary DeTrano’s business practices and reputation. (see Exhibits 22 – 25, affidavits of Frank and Rita Stewart, Glen Rowan, and Richard Sberlati) Included with this evidence is the affidavit of Glen Rowan who indicated Midbanc attorney Mitchell Troyetsky called him in 1996-1997 in an attempt to have him place blame on Gale . These are not just the thoughts or ideas of Gale but documentary evidence in the form of lawsuits and others who know the reputation and character of DeTrano.
Counsel represents to the Court that he has spoken to one of Gale’s previous attorneys, Jules Levy from New York. Levy does recall entering an appearance on behalf of both Gale and DeTrano involving the Midbanc and Serradas litigation. He also was aware of Gale’s wife and DeTrano doing real estate transactions and that DeTrano owed Gale’s wife money. This would account for why one of the Midbanc checks went to Gale’s wife. See 18 U.S.C. 3553(a)(7).
(4) Pre-Indictment Delay
Another matter Gale believes warrants a downward departure is preindictment delay. United States v. Saldana, 109 F.3d 100 (1st Cir. 1997); United States v. Cornielle, 171 F.3d 748 (2d Cir. 1999); United States v. Sanchez-Rodriguez, 161 F.3d 556 (9th Cir. 1998); United States v. Brown, 959 F.2d 63, 66 (6th Cir. 1992); United States v. Rogers, 118 F.3d 466, 475-476 (6th Cir. 1997).
The conduct became known to Midbanc in April, 1996. Midbanc went to authorities in Ohio and New York in 1996. Early in 1997, the FBI became involved. Midbanc gave the FBI all the documents it needed as soon as they met. Gale gave statements to the FBI in 1998. No indictment was issued until less than 1 month before the statute of limitations expired in March, 2001. As a result of the 3-4 year delay, Gale was unable to produce evidence that would have assisted in his defense. Rather than restate the arguments previously made, Gale direct’s the Court’s attention to the post-evidentiary hearing brief filed in June, 2002 which fully sets out the facts testified to at the evidentiary hearing.
(5) Loss of Business Assets and Source of Income
Another downward departure consideration is the loss of business, assets, and source of income. United States v. Gaind, 829 F.Supp. 669 (S.D.N.Y. 1993). The money Gale has had to spend over the years paying Serradas, Midbanc, and attorneys to defend him in regard to this incident combined with the medical expenses for the care of his wife have financially crippled him. Moreover, his son’s recent divorce and bankruptcy have added to Gale’s financial responsibilities. Gale must continue to work to support his wife and himself and to pay off his debts rather than enjoy retirement. See 18 U.S.C. 3553(a)(7).
(6) Post Offense Rehabilitation
The offense in question occurred in April, 1996. There is no evidence that Gale has engaged in any further conduct outside the law since this offense. Gale did not flee his home in New York after the offense. Moreover, since his indictment in March, 2001, Gale has been supervised by pretrial services in New York. Gale has been a model supervisee. He has reported when required and complied with all terms and conditions of his release for the last three years.
The evidence suggests that Gale is an appropriate candidate for probation. By not engaging in criminal conduct for the last eight years, his age and health factors, and his ability to comply with pretrial release all show Gale has rehabilitated himself since this offense. This too should be considered as a factor weighing in favor of downward departure.
(7) Conclusion

The Sixth Circuit has permitted sentencing courts to aggregate factors to allow for a downward departure even if a single factor may not warrant a downward departure. United States v. Gale, 188 F.3d 354 (6th Cir. 1999) citing U.S. v. Koon, 518 U.S. 81 (1996). The factors in this case take it out of the typical heartland offense and warrant a significant departure. Koon v. United States, 518 U.S. 81 (1996); United States v. Gale, 188 F.3d 354 (6th Cir. 1999); United States v. Sicken, 223 F.3d 1169 (10th Cir. 2000); United States v. Oligmueller, 198 F.3d 669 (8th Cir. 1999); United States v. Stockheimer, 157 F.3d 1082, 1091 (7th Cir. 1998); United States v. Walters, 87 F.3d 663 (5th Cir. 1996); United States v. Monaco, 23 F.3d 793 (3d Cir. 1994).
When reviewing the facts of the case and the surrounding circumstances, the totality of the circumstances warrant a sentence of some form of probation or house arrest. United States v. Sabino, 274 F.3d 1053 (6th Cir. 2001); United States v. Gale, 188 F.3d 354 (6th Cir. 1999); United States v. Rivera, 994 F.2d 942 (1st Cir. 1993).

Respectfully submitted,

/s/ Kort Gatterdam
Max Kravitz (0023765)
Kort Gatterdam (0040434)
145 E. Rich St.
Columbus, Ohio 43215
Tel: (614) 464-2000
Fax: (614) 464-2002



The undersigned hereby certifies that on May 2, 2005, he electronically filed the foregoing Sentencing Memorandum with the Clerk of Court using the CM/ECF system which will send notification of such filing to Dan Brown, Assistant United States Attorney, 303 Marconi Blvd. Suite 200, Columbus, Ohio 43215.

/s/ Kort Gatterdam
Kort Gatterdam

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