159 F.3d 810 (3rd Cir. 1998), 98-5072, United States v. Vitale

Docket Nº:98-5072.
Citation:159 F.3d 810
Party Name:UNITED STATES of America v. Francis X. VITALE, Appellant.
Case Date:November 06, 1998
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit
 
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159 F.3d 810 (3rd Cir. 1998)

UNITED STATES of America

v.

Francis X. VITALE, Appellant.

No. 98-5072.

United States Court of Appeals, Third Circuit

November 6, 1998

Argued July 9, 1998.

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Justin P. Walder (Argued), Walder, Sondak & Brogan, Roseland, NJ, for Appellant.

George S. Leone, Amanda Haines (Argued), Office of United States Attorney, Newark, NJ, for Appellee.

Before: SLOVITER, ROTH, Circuit Judges, and FULLAM, [*] District Judge.

OPINION OF THE COURT

SLOVITER, Circuit Judge.

In this case the principal issue we must decide is whether the offenses of wire fraud and tax evasion should be grouped together for sentencing purposes when the government stipulated that the conduct underlying the wire fraud charge was embezzlement. Appellant also raises an issue of his alleged entitlement to a downward departure for diminished mental capacity.

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I.

On September 30, 1997, Francis X. Vitale entered a guilty plea to one count of wire fraud and one count of tax evasion pursuant to a plea agreement. He was charged in the wire fraud charge with causing $407,223.80 to be illegally wire transferred from Engelhard's account to an antique clock dealer in Switzerland. He was charged in the second count with failing to pay over $1,200,000 in income tax on taxable income of more than $3,700,000.

The charges against Vitale stemmed from his embezzlement of approximately $12 million from his employer, Engelhard Corporation, between 1987 and 1996. Vitale used this money to acquire and restore antique clocks, which he displayed in what has been described as a museum type gallery in Spring Lake, New Jersey. Vitale himself states that his collection was one of the finest of 18th and 19th century European clocks.

Vitale had been employed for more than thirteen years by Engelhard, a specialty chemical and metal products manufacturer, most notably as the vice president of strategic development and corporate affairs. He controlled a multi-million dollar budget for domestic and international marketing and communications and had sole and unlimited authority to approve at least a million dollars in international marketing expenditures. Vitale forwarded fabricated invoices to Engelhard's cash management office, which received authorization to wire funds on the bogus invoices to named vendors who were, in fact, European clock dealers who sold antique clocks to Vitale's shop. In addition, Vitale solicited the owner of Dimensional Marketing, Inc. to wire transfer funds and send checks to various vendors under the guise of helping Engelhard with a purported budgeting problem. These payments, however, went to vendors of Vitale's clock company, with Vitale approving payment of the invoices. Vitale failed to report any of the embezzled funds on his income tax returns.

When Vitale was confronted with these crimes by Engelhard's senior executives, he admitted his guilt and cooperated with Engelhard by providing complete restitution by selling his entire clock collection. Vitale's extraordinary cooperation in organizing the sale of his clocks was noted in several letters written by Engelhard employees. Vitale also volunteered full-time with the Boys & Girls Club of Trenton/Mercer Counties in 1997.

Vitale also underwent psychiatric counseling. Dr. Ventano, Vitale's treating psychiatrist, opined that Vitale was not motivated by greed or accumulation of wealth; instead, he had an obsession with antique clocks which overpowered his sense of right and wrong. Ventano observed that Vitale knew what he was doing was wrong, but could not stop himself.

This appeal concerns Vitale's sentence, which the district court calculated as follows:

Count one: Wire Fraud

Base Level (Tax loss of $2,500,000 to $5,000,000) [§ 2T1.1(a)(1) and § 2T4.1(P)] 21 Specific Offense Characteristic (Failed to report source of income exceeding $10,000 from criminal activity) [§ 2T1.1(b)(1)] 2 Adjusted Offense Level 23 The district court rejected Vitale's argument that the wire fraud and tax evasion counts should be grouped. Therefore, under the multiple-count rules of Chapter 3 of the Sentencing Guidelines, Vitale's greater adjusted offense level of 25 was increased by two levels, based on the number of units, for a combined adjusted offense level of 27. Three levels were deducted for acceptance of responsibility, for a total offense level of 24, which corresponds (with a Criminal History Category of I) to a range of 51 to 63 months incarceration.

The court denied Vitale's request for a downward departure based on the government's alleged manipulation of the charging documents, app. at 94, and declined to further depart downward from the guideline

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range based upon Vitale's alleged reduced mental capacity, app. at 94. However, the court granted Vitale's motion for downward departure pursuant to U.S.S.G. § 5K2.0 due to Vitale's extraordinary acceptance of responsibility, restitution efforts, community service and post-offense rehabilitation. Thus, after all the calculations and the downward departure, Vitale was sentenced to thirty months imprisonment (concurrent on counts one and two), two years of supervised release (also concurrent on counts one and two), and 500 hours of community service. App. at 95-96. Vitale appeals.

II.

A.

GROUPING

Vitale argues that the district court erred in denying his request to group the two charges. We give...

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