U.S. v. Redemann

• Citation: 295 F.Supp.2d 887
• Decision Date: 04 December 2003
• Docket Number: No. 03-CR-71.,03-CR-71.
• Parties: UNITED STATES of America, Plaintiff, v. James REDEMANN, Defendant.
• Court: United States District Courts. 7th Circuit. United States District Court of Eastern District of Wisconsin

295 F.Supp.2d 887

UNITED STATES of America, Plaintiff, v. James REDEMANN, Defendant.

No. 03-CR-71.

United States District Court, E.D. Wisconsin.

December 4, 2003.

COPYRIGHT MATERIAL OMITTED

Scott J. Campbell, Milwaukee, WI, for Plaintiff.

Dean A. Strang, Milwaukee, WI, for Defendant.

MEMORANDUM

ADELMAN, District Judge.

I. FACTS AND BACKGROUND

In 1979, Jeffrey Dahlman became a bank examiner for the State of Wisconsin. One of the banks he was assigned to examine was Farmer's State Bank located in Poy Sippi, Wisconsin. After examining the bank in 1983, Dahlman purchased it through a holding company he controlled called Evergreen of Wisconsin. Dahlman then changed the name of the bank to Evergreen Bank and installed himself as its President and CEO.

In 1993, Dahlman and his wife Dawn began stealing money from the bank in order to finance their lavish lifestyle. They used bank funds to pay for country club memberships, automobiles, a boat and boat accessories, jewelry, property taxes on their Florida home, credit card bills, lawn care, a nurse for Dahlman's grandfather, and the salaries of employees at another business they owned. Dahlman ended up taking almost $4,000,000 from the bank.

Dahlman's conduct was brazen, but he did devise a scheme to conceal his looting of the bank. James Redemann, the defendant in this case, was a local contractor. Dahlman hired defendant to perform repairs and renovation work on the bank, and the two men developed a friendship. Dahlman enlisted defendant into his scheme as follows: (1) Dahlman used Evergreen money orders to pay personal expenses as discussed above; (2) after totaling the personal expenses, Dahlman instructed defendant to submit inflated invoices for the construction work he had performed on the bank, which contained both defendant's legitimate expenses and the amount Dahlman had stolen; (3) Dahlman would then pay the invoice with a money order; (4) defendant would endorse the money order back to the bank; and (5) the proceeds would be used to pay defendant both for his work and additional sums to which he was not entitled (through a deposit to his checking account), and to cover the money orders Dahlman had used for personal expenses. The transaction was then "booked" as an addition to the bank's fixed asset (bank premises) account.

Examiners from the Office of the Comptroller of Currency (OCC) caught up with Dahlman in April 1998. Defendant attempted to obstruct the OCC investigation by hiding copies of money orders in the attic of the bank, but the scheme was nevertheless discovered. Dahlman pled guilty to bank fraud and was sentenced to 63 months in prison. His wife Dawn got five months in prison.

In August 1999, the OCC commenced a civil enforcement action against defendant Redemann, extracting a $75,000 penalty and $100,000 restitution obligation. Defendant was also permanently barred from participating in the affairs of a financial institution regulated by the OCC or Federal Reserve. The government then charged defendant with conspiracy to commit bank fraud and to obstruct the examination of a financial institution. Defendant pled guilty to both counts and the case proceeded to sentencing. The parties agreed that defendant's offense level under the sentencing guidelines was 15 and his criminal history category was I, producing an imprisonment range of 18-24 months.¹ However defendant moved for a downward departure on two cumulative bases—(1) extraordinary family circumstances and (2) the previous satisfaction of most of the purposes of sentencing. Upon reviewing the PSR, I also advised the parties that I was considering a departure because the amount of loss attributed to defendant substantially overstated the seriousness of his offense, see U.S.S.G. § 2F1.1 cmt. n. 8(b) & 11 (1998), and provided an opportunity for the parties to brief the issue, which they did.

Upon consideration of the briefs and arguments of counsel, I decided to depart downward by two levels. In this memorandum, I explain the basis for my decision.

II. DISCUSSION

A. Departure Standard

The court may depart from the guidelines if it finds that there exists an aggravating or mitigating circumstance of a kind, or to a degree, not adequately taken into account by the Sentencing Commission in formulating the guidelines that should result in a sentence different from that described. U.S.S.G. § 5K2.0 (citing 18 U.S.C § 3553(b)) (1998). The Sentencing Commission has provided guidance in making departure decisions by listing certain factors that are "forbidden" bases for departure, "discouraged" bases for departure, and "encouraged" bases for departure. Koon v. United States, 518 U.S. 81, 93-95, 116 S.Ct. 2035, 135 L.Ed.2d 392 (1996).

The Supreme Court has adopted the following test for determining whether to depart: (1) What factors of the case make it special or unusual? (2) Has the Commission forbidden departures based on those factors? (3) If not, has the Commission encouraged departures based on those factors? (4) If not, has the Commission discouraged departures based on those factors? Id. at 95, 116 S.Ct. 2035.

If the special factor is a forbidden factor, the sentencing court cannot use it as a basis for departure. If the special factor is an encouraged factor, the court is authorized to depart if the applicable Guideline does not already take it into account. If the special factor is a discouraged factor, or an encouraged factor already taken into account by the applicable Guideline, the court should depart only if the factor is present to an exceptional degree or in some other way makes the case different from the ordinary case where the factor is present. If a factor is unmentioned in the Guidelines, the court must, after considering the structure and theory of both relevant individual guidelines and the Guidelines taken as a whole, decide whether it is sufficient to take the case out of the Guideline's heartland.

Id. at 95-96, 116 S.Ct. 2035, 135 L.Ed.2d 392 (1996) (internal citations and quote marks omitted).

Before addressing defendant's motion, I first considered whether recent amendments to the sentencing statutes and guidelines adopted as part of, or pursuant to, the Prosecutorial Remedies and Tools Against the Exploitation of Children Today ("PROTECT") Act of 2003, Pub.L. 108-21, 117 Stat. 650 (2003), applied in this case. The Seventh Circuit has held that the new appellate standard of review² adopted in § 401(d) of the PROTECT Act applies to appeals considered after the Act's effective date, and that the Ex Post Facto Clause is not offended by its application in cases in which the crime was committed prior to the Act's effective date. United States v. Mallon, 345 F.3d 943, 946-47 (7th Cir.2003).

However, the application of guideline amendments adopted after commission of the offense that forbid or restrict grounds for departure would be a different matter. In United States v. Seacott, 15 F.3d 1380, 1386 (7th Cir.1994), the court held that "a guideline amendment which occurs after the commission of the defendant's crime which works to the defendant's detriment is inapplicable because it is a violation of the ex post facto clause." There is no meaningful distinction between guideline provisions which increase a defendant's imprisonment range and those which block a judge from departing to reduce that range. Thus, I did not consider the recent amendments to the guidelines in deciding whether to depart on the grounds specified. See United States v. Lester, 268 F.Supp.2d 514, 515 n. 2 (E.D.Pa.2003) (concluding, with government's agreement, that PROTECT Act did not apply to downward departure motion before district court). This is consistent with the so-called "one-book rule" contained in U.S.S.G. § 1B1.11(b)(2) (stating that court should use applicable guidelines manual in its entirety). However, as I noted at sentencing, because the specific grounds for departure at issue in the present case were not prohibited by the October 2003 amendments, my decision would have been the same even if those amendments did apply.

B. Defendant's Motion

1. Family Circumstances

Defendant first argued that his family situation warranted a departure. Section 5H1.6 of the guidelines provides that family ties and responsibilities are not ordinarily relevant in determining whether a sentence should be outside the guideline range. Thus, this is a disfavored basis for departure, and the court may rely upon it to depart only if the defendant's situation is unusual or extraordinary. See, e.g., United States v. Canoy, 38 F.3d 893, 907 (7th Cir.1994); United States v. Norton, 218 F.Supp.2d 1014, 1018 (E.D.Wis.2002).

There are three main considerations in departures under § 5H1.6. First, the court must consider the specifics of the defendant's family situation—how many dependants does he have; what is his role in their lives; do they have special needs; are there others available to fill the void should the defendant go to prison. Norton, 218 F.Supp.2d at 1019; see also United States v. Rivera, 994 F.2d 942, 948 (1st Cir.1993) (Breyer, J.).

Second, the court should consider whether the guideline range is such that a reasonable departure would spare the defendant's family from unnecessary hardship. A departure cannot be justified when, even with the reduction, the sentence is so long that the defendant's release will come too late to assist the family. Norton, 218 F.Supp.2d at 1020 (citing United States v. Wright, 218 F.3d 812, 815-16 (7th Cir.2000)).

Third, the court should consider the purposes of sentences—the need for just punishment, protection of the public, general and specific deterrence, and rehabilitation of the defendant. Id. If the nature of the offense and the character of the defendant tend to show that no end other than punishment will be served by the term of imprisonment set by the guidelines, if there is no threat to the community, and if society will ultimately benefit...