U.S. v. Hall
| Decision Date | 08 February 2008 |
| Docket Number | No. 07-2373.,07-2373. |
| Citation | 515 F.3d 186 |
| Parties | UNITED STATES of America v. Neal HALL, Appellant. |
| Court | U.S. Court of Appeals — Third Circuit |
Peter Goldberger, Pamela A. Wilk, Ardmore, PA, for appellant.
Patrick L. Meehan, United States Attorney, Robert A. Zauzmer, Assistant United States Attorney, Chief of Appeals, Karen L. Grigsby, Assistant United States Attorney, Philadelphia, PA, for appellee.
Before: RENDELL, GREENBERG, and VAN ANTWERPEN, Circuit Judges.
This matter comes on before this court on an appeal from a judgment of conviction and sentence entered on March 21, 2007, on a plea of guilty in the District Court. The Government initiated the case on April 5, 2006, when it filed an information against appellant Neal Hall ("Hall") and his wife, Blonde Grayson-Hall ("Grayson-Hall"), charging them each with three counts of willful failure to file income tax returns in violation of 26 U.S.C. § 7203. On May 16, 2006, Hall and his wife, pursuant to plea agreements, entered pleas of guilty to each of the three counts of the information. On March 21, 2007, the District Court sentenced each defendant to a 12-month custodial term to be followed by 12-month terms of supervised release. Moreover, the court imposed a $20,000 fine on each defendant. Hall now challenges the procedure the District Court followed when he entered his plea and also challenges the sentence the court imposed. In particular, Hall contends that when he entered his plea of guilty the court failed to exercise the "special care" required during colloquies in cases involving tied plea agreements (usually called "package deal agreements"), the Government breached its promise in the plea agreement to "[m]ake no recommendation as to the sentence," and the court imposed an unreasonably long custodial sentence on him. Grayson-Hall has not appealed.
Hall, an ophthalmologist, and Grayson-Hall, an attorney, are residents of Philadelphia, Pennsylvania. During the times germane to these proceedings Hall operated Ophthalmic Associates, Inc. d/b/a Flourtown Eye Associates and Milan Designer Eyewear in Flourtown, Pennsylvania, and Wilmington Eye Associates in Delaware, and Grayson-Hall practiced law through Hall & Associates, LLC, a law firm in Philadelphia. In 1986, Hall incorporated Ophthalmic Research Associates ("ORA"), a non-profit organization in West Chester, Pennsylvania, with Hall as its chairperson and Grayson-Hall as its secretary and treasurer.
The Government's information charged that defendants willfully failed to file income tax returns for 1999, 2000, and 2001. After negotiations through separate attorneys, defendants entered into tied plea agreements with the Government, each agreement being conditioned on the entry of a guilty plea by the other defendant. Among other terms the Government's plea agreement with Hall included the following provision:
7. At the time of sentencing, the government will:
a. Make no recommendation as to the sentence.
b. Comment on the evidence and circumstances of the case; bring to the Court's attention all facts relevant to sentencing including evidence relating to dismissed counts, if any, and to the character and any criminal conduct of the defendant; address the Court regarding the nature and seriousness of the offense; respond factually to questions raised by the Court; correct factual inaccuracies in the presentence report or sentencing record; and rebut any statement of facts made by or on behalf of the defendant at Sentencing.
c. Nothing in this agreement shall limit the government in its comments in, and responses to, any post-sentencing matters.
App. at 5-6. Grayson-Hall's plea agreement, however, did not prohibit the Government from making a recommendation as to her sentence. As will be seen this distinction is at the core of one, of the issues Hall raises on this appeal.
On May 16, 2006, the District Court conducted a joint plea hearing for defendants, who were present and represented by separate attorneys throughout the hearing, pursuant to Federal Rule of Criminal Procedure 11. That rule requires that before accepting a plea of guilty the court must "determine that the plea is voluntary and did not result from force, threats or promises (other than promises in a plea agreement)." Fed. R.Crim.P. 11(b)(2). During the hearing, the court engaged in a colloquy with Hall to determine whether his plea was voluntary that included the following exchanges:
App. at 70, 72, 80-81. Following the District Court's colloquies with defendants it accepted their pleas of guilty to the three counts of willful failure to file income tax returns.
On March 21, 2007, the District Court conducted a sentencing hearing for both Hall and his wife. After the court denied each defendant's motion for a downward departure from the applicable base offense level, it concluded that both had base offense levels of 12 which, when combined with their criminal history categories of I, yielded a sentencing range of 10 to 16 months.
The District Court then considered defendants' motions for variances pursuant to 18 U.S.C. § 3553.1 Grayson-Hall's attorney began the arguments on the motions by contending that a variance would be appropriate because defendants had paid, or were expected to pay, the amounts that they owed in taxes, and they would not in the future fail to file tax returns because they had implemented a payroll service in their respective businesses that would withhold taxes. Grayson-Hall's attorney also referred to defendants' life styles, stating that "the Halls do not live a lavish life style," and that "[t]hey are by no measure wealthy." Stipp. app. at 75. After Grayson-Hall's attorney finished his remarks, Grayson-Hall made a personal allocution.
Following Grayson-Hall's allocution, Hall's attorney made his arguments in support of Hall's motion for a variance. He began by referring to his earlier arguments referencing Hall's charitable work and Grayson-Hall's poor health. Hall's attorney then argued that a variance would be appropriate because "the nature and circumstances of the offense" warranted one. Supp. app. at 77. According to Hall's attorney:
This is not a case and I think this is important, because what I'm about to say really takes Dr. Hall and for the [sic] matter, takes Mrs. Hall outside the heartland of offenders who really seek to cheat the Government out of taxes. This is not a case about greed. This is not a case about willful evasion. There is no evidence in the record that any of the money that should have gone to pay taxes was spent on luxury items. Was spent on vacations or clothing or cars or anything like that. That's simply not the case with both defendants.
Quite to the contrary, they live a very modest life style. They have old cars, old clothes, a home in need of repair. They've taken one vacation in the last ten years. This is simply not a case about greed. And for that matter, I believe they fall outside, certainly Dr. Hall and Mrs. Hall, for that matter, fall outside the heartland of offenders who are seeking to cheat the Government out of taxes, your Honor.
Id. Hall's attorney also argued that a variance was appropriate based on Hall's payments of the taxes that he owed and his acceptance of responsibility for his crimes.
After Hall's attorney completed his argument, Hall gave his allocution following which the Government responded to both defendants' arguments. Without specifying, at the outset the defendant to whom it was referring, the Government made the following statement:
[Section] 3553(a) compels that we first look at the nature and circumstances of the offense. And make no mistake here, the offense is failure to file returns. This is not a case before your Honor of people who are being charged with failure to pay all they owed, having filed a return. People who couldn't because of juggling financial responsibilities, come good on April 15th. This is a case where for ten years, no tax returns were filed. This isn't a case of miscalculation. We filed a return. We innocently thought...
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