U.S.A. v. Reed, 00-1681

• Citation: 264 F.3d 640
• Decision Date: 09 August 2001
• Docket Number: No. 00-1681,00-1681
• Parties: (6th Cir. 2001) United States of America, Plaintiff-Appellant, v. Rosalind K. Reed, Defendant-Appellee. Argued:
• Court: United States Courts of Appeals. United States Court of Appeals (6th Circuit)

Page 640

264 F.3d 640 (6th Cir. 2001)

United States of America, Plaintiff-Appellant, v. Rosalind K. Reed, Defendant-Appellee.

No. 00-1681

UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

Argued: August 9, 2001

Decided and Filed: August 31, 2001

Appeal from the United States District Court for the Eastern District of Michigan at Detroit. No. 94-80095, Avern Cohn, District Judge. [Copyrighted Material Omitted]

[Copyrighted Material Omitted] David J. Debold, ASSISTANT UNITED STATES ATTORNEY, Detroit, Michigan, for Appellant.

N.C. Deday LaRene, LaRENE & KRIGER, Detroit, Michigan, Neil H. Fink, Birmingham, Michigan, for Appellee.

Before: BOGGS, MOORE, and COLE, Circuit Judges.

OPINION

KAREN NELSON MOORE, Circuit Judge.

The government appeals the district court's twenty-two level downward departure in sentencing defendant-appellee Rosalind K. Reed, on remand from this court. See United States v. Reed, 167 F.3d 984, 994 (6th Cir.) (Reed II), cert. denied, 528 U.S. 897 (1999), (affirming Reed's conviction for money laundering but remanding for resentencing). Because we believe the district court abused its discretion by departing downward twenty-two levels, we VACATE the sentence imposed and REMAND for resentencing.

I. JURISDICTION

We have jurisdiction to hear the government's appeal pursuant to 18 U.S.C. §3742(b).

II. BACKGROUND

The facts of Reed's offense and prosecution are set forth in our prior opinion, see Reed II, 167 F.3d at 986-87, and are supplemented here with facts from the record. In January 1994, Reed, who was a criminal defense lawyer, was asked by her friend and neighbor Jerome Maddox to represent Richard Sumpter, who had just been arrested. Sumpter was the supplier of a large marijuana distribution network from California to Michigan, and Maddox was one of Sumpter's drug distributors in Detroit. Sumpter told Reed that he could not pay Reed her legal fees until Maddox paid off his drug debt to him, an amount which the two men estimated to be in excess of $400,000. Reed then brokered Maddox's repayment by passing information between Maddox and Sumpter, who was incarcerated, and using her law offices as a drop-off and pick-up point for the money. On two separate occasions, on February 11, 1994 and March 10, 1994, Maddox delivered payments in excess of $100,000 to Reed's office, where he was met by Diana Fitch, Sumpter's wife. On each date, Maddox and Fitch counted the money in Reed's office and paid Reed her legal fees in cash, $15,000 on the first visit, and $20,000 on the second. Joint Appendix ("J.A.") at 557-58. After Reed was paid, the remainder of the money was stored in a bag in Reed's office for Sumpter's drug courier to retrieve and transport to California, which he did on two subsequent dates¹.

Sumpter and Maddox ultimately agreed to cooperate with government investigators. Their cooperation led to Reed's indictment on one count of conspiracy to distribute marijuana, along with thirty-one other co-defendants who were members of Sumpter's network, as well as two counts of money laundering and one count of conspiracy to commit money laundering. See Reed II, 167 F.3d at 987. After the district court refused to grant a proposed jury instruction stating that the act of delivering cash to a drug courier constituted a "financial transaction" for purposes of the money laundering statute, 18 U.S.C. §1956, ² the three money laundering counts in the indictment against Reed were dismissed. The government then filed an interlocutory appeal and the case was heard by this court en banc. In United States v. Reed, 77 F.3d 139, 142 (6th Cir.) (en banc) (Reed I), cert. denied, 517 U.S. 1246 (1996), we overruled two prior circuit cases and held that the delivery or transfer of cash to a drug courier, as alleged in the indictment, constituted a "financial transaction" under 18 U.S.C. §1956(c)(4)(A)(i).

Thereafter, Reed was re-indicted on four counts and tried in a two-month trial from September to November 1996. In December 1996, the jury found Reed guilty of conspiracy to launder money; the jury acquitted her of the drug conspiracy and one of the money laundering counts, and was unable to reach a verdict on the other money laundering count. J.A. at 62.

At sentencing, Judge Horace W. Gilmore relied upon the Presentence Report prepared by the probation office and calculated Reed's total offense level to be 32. The district court arrived at this number by starting with a base offense level of 23 pursuant to U.S. Sentencing Guidelines Manual ("U.S.S.G.") §2S1.1 (1995), the guideline applicable to convictions under 18 U.S.C. §1956. The district court then added three levels, pursuant to §2S1.1(b)(1), applicable when the defendant knows the funds are the proceeds of unlawful drug trafficking activity, two levels under §2S1.1(b)(2) because the laundered funds exceeded $200,000, two levels under §3B1.3 for abuse of a position of trust, and two levels for obstruction of justice, under §3C1.1. Reed's criminal history category was determined to be level I. The district court then decided to depart downward from level 32 to level 23, thereby reducing Reed's sentence from a minimum of 121 months' imprisonment to 46 months. The district court gave two reasons for this departure: he stated that Reed's "conduct was on the outer edges" of conduct envisioned by 18 U.S.C. §1956, and that she experienced a long delay and excessive costs in going to trial. J.A. at 421-22.

Reed appealed her conviction and the government cross-appealed her sentence. In Reed II, we affirmed Reed's conviction but vacated her sentence and remanded for resentencing. See Reed II, 167 F.3d at 994. We held that "[t]he district court's assertion that Reed's conduct was outside of the heartland of the offense specified in §1956 is unsupported."Id. We reasoned that "[a]lthough holding Reed less culpable than the typical money launderer, the district court provided no specifics and offered no factors not contemplated by the Guidelines." Id. As for the delay and excess costs, we noted that these were possible bases for departure but that "[n]either the district judge nor Reed ... has provided this court with any evidence that the length of the delay or the costs involved were unusual." Id. Concluding that the district court abused its discretion by departing downward at sentencing, we remanded to the district court with a narrow mandate: we stated that "the district court should consider only whether a departure from its previously calculated total offense level of thirty-two is warranted, and, if so, to what extent departure is warranted." Id. at 995 (emphasis added).

On remand, the case was reassigned to Judge Avern Cohn due to Judge Gilmore's retirement. In July 1999, an updated Presentence Report was prepared to reflect our disposition of the case, as well as to account for the defendant's submissions relating to her family situation, her mental health, and her community service. J.A. at 546-47. Of note, Reed submitted a "family assessment" performed by a psychiatrist, which chronicled her role in caring for her sister's five children. Reed then moved again for a downward departure, arguing that her offense conduct was outside the heartland of conduct circumscribed by §1956 and that the Guidelines overstated the seriousness of her conduct. She also argued for a downward departure based on extraordinary family circumstances³. J.A. at 92-98. The government disputed these bases for departure.

The district judge decided to bifurcate the sentencing process, and on November 30, 1999 and December 2, 1999 held hearings on whether he should depart downward based on Reed's offense characteristics. Subsequently, in a written memorandum supplementing the hearings, the district judge determined that he would depart downward nine levels from a total offense level of 32 to level 23. J.A. at 283. He then referred the case to the probation office for a supplemental report on Reed's offender characteristics. Reed also submitted an updated family assessment to the probation department. On May 5, 2000, the district judge held a hearing on defendant's offender characteristics. At that hearing, the district judge announced his decision to depart downward 13 levels to level 10 based on Reed's extraordinary family circumstances. J.A. at 505-06, 508-09. This conclusion was memorialized in a memorandum dated May 16, 2000. J.A. at 285.

With a total offense level of ten and a criminal history category of I, Reed was sentenced to four years' probation, on condition that she spend 15 months in a halfway house and then perform 300 hours of community service. J.A. at 285. No fine was imposed. The government appeals from this sentence.

III. ANALYSIS

A. Standard of Review

We review a district court's downward departure at sentencing for an abuse of discretion. Koon v. United States, 518 U.S. 81, 100 (1996). Under the abuse-of-discretion standard, the district court's determination that a particular factor is a permissible basis for departure is a question of law to which we need not defer. Id.; United States v. Weaver, 126 F.3d 789, 792 (6th Cir. 1997).

The relevant sentencing statute, 18 U.S.C. §3553(b), states that a sentencing court shall impose a sentence within the applicable Guidelines range "unless the court finds that there exists an aggravating or mitigating circumstance of a kind, or to a degree, not adequately taken into consideration by the Sentencing Commission in formulating the guidelines that should result in a sentence different from that described." In determining whether the Commission has adequately considered a particular circumstance, a sentencing court should consider "only the sentencing guidelines, policy statements, and official commentary of the Sentencing Commission." Id.

The Guidelines Manual provides that a sentencing court should "treat each guideline as carving out a 'heartland,' a set of typical cases embodying the conduct that...