United States v. Lewis

• Decision Date: 16 November 2016
• Docket Number: No. 16-1401,16-1401
• Citation: 842 F.3d 467
• Parties: United States of America, Plaintiff–Appellee, v. Lisa A. Lewis, Defendant–Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

842 F.3d 467

United States of America, Plaintiff–Appellee,

v.Lisa A. Lewis, Defendant–Appellant.

No. 16-1401

United States Court of Appeals, Seventh Circuit.

Argued September 8, 2016

Decided November 16, 2016

William J. Roach, Attorney, Office of the United States Attorney, Green Bay, WI, for Plaintiff–Appellee.

William R. Jones, Attorney, Jones Law Firm, Madison, WI, for Defendant–Appellant.

Before Wood, Chief Judge, and Kanne and Hamilton, Circuit Judges.

Kanne, Circuit Judge.

Over a seven-year period, Lisa A. Lewis embezzled more than $2 million from twelve people who were 75 to 92 years old. Pursuant to a plea agreement, she pled guilty to one count of wire fraud in violation of 18 U.S.C. § 1343, and the government agreed to a specific sentencing guidelines calculation. The government also agreed to recommend no more than ten years' imprisonment at her sentencing hearing.

At the first sentencing hearing, the district court sentenced Lewis to fifteen years' imprisonment. Shortly thereafter, we decided United States v. Thompson , 777 F.3d 368 (7th Cir. 2015). Lewis appealed raising only the issue of her supervised-release conditions. In light of Thompson , we remanded for resentencing. Before the resentencing hearing, Lewis filed a motion arguing for the first time that the government had breached the plea agreement. The district court denied the motion and held that Lewis had waived this argument by failing to raise it at the first sentencing or on the first appeal. The district court then sentenced Lewis to the same fifteen-year term.

On appeal, Lewis now argues that she did not waive her argument that the government breached the plea agreement. She reasserts that argument now. Lewis also argues that the district court erred at sentencing by (1) applying a sentencing enhancement based on the vulnerability of her victims and (2) imposing a substantively unreasonable sentence.

We hold that the district court did not err by refusing to hear Lewis's argument, but it did err by not affirmatively acknowledging that it had the authority to do so. But because the district court alternatively rejected that argument, and because we believe that the argument is meritless, we hold that the district court's error is harmless. Finally, we hold that the district court did not err at sentencing because the vulnerable-victim enhancement was properly applied and the district court's sentence was substantively reasonable.

I. BACKGROUND

From 2006 until 2013, Lewis fraudulently held herself out as an account representative with Fidelity Investments to at least a dozen "investors" whose ages ranged from 75 to 92. Although she had been a registered broker with the Financial Industry Regulatory Authority from 1990 until 2006, she was neither a registered broker nor affiliated with Fidelity Investments during this fraudulent scheme. Under the scheme, Lewis convinced her investors to set up investment accounts at Fidelity. Unbeknownst to her investors, however, Lewis opened the accounts as joint accounts, including her name on each account. This allowed Lewis to transfer funds from the accounts to her own personal account without her investors' consent or knowledge. Lewis applied for and received debit cards associated with some of these accounts. She also forged some of her investors' signatures on checks drawn on their accounts. She used the debit cards and fraudulent checks to withdraw additional funds from the accounts. Over the course of this seven-year scheme, Lewis embezzled more than $2 million from her victims.

A grand jury indicted Lewis on five counts of wire fraud in violation of 18 U.S.C. § 1343. On March 14, 2014, she pled guilty to one of those counts pursuant to a plea agreement. In exchange for Lewis's guilty plea, the government made several promises. First, the government promised "to recommend no more than 10 years imprisonment and the maximum period of supervised release." (R. 17 at ¶ 24.) Second, the government agreed to the following sentencing guidelines calculation:

1. A base offense level of 7 under U.S.S.G. § 2B1.1(a)(1) ;

2. Specific offense level increases of 16 levels for the amount of the loss under U.S.S.G. § 2B1.1(b)(1)(I), 2 levels for an offense involving 10 or more victims under U.S.S.G. § 2B1.1(b)(2)(A), and 2 levels for an offense involving sophisticated means under U.S.S.G. § 2B1.1(b)(10) ;

3. A 2–level increase for the abuse of a position of trust under U.S.S.G. § 3B1.3 ;

4. A 4–level increase for an offense involving a large number of vulnerable victims under U.S.S.G. § 3A1.1 ; and

5. A 3–level decrease for acceptance of responsibility under U.S.S.G. §§ 3E1.1(a) and 3E1.1(b).

This agreed-upon calculation resulted in a total offense level of 30. Based on this offense level and Lewis's criminal history category of I, Lewis's guideline range under the plea agreement was 97 to 121 months.

The plea agreement also included several important reservations. First, the agreement provided that "[b]oth parties reserve the right to provide the district court and the probation office with any and all information which might be pertinent to the sentencing process...." (R. 17 at ¶ 22.) Second, the agreement provided that "[b]oth parties reserve the right to make any recommendation regarding any and all factors pertinent to the determination of the sentencing guideline range...." (R. 17 at ¶ 23.) Finally, the agreement acknowledged that the district court was not bound by the agreement or by the sentencing guidelines. (R. 17 at ¶ 25.)

The probation office then completed a Presentence Investigation Report ("PSR"). The probation office's guideline calculation included two additional enhancements: (1) a 2–level increase for the use of a means of identification under U.S.S.G. § 2B1.1(b)(11)(C)(i) and (2) a 2–level increase for obstruction of justice under U.S.S.G. § 3C1.1. The calculation in the PSR also included only a 2–level vulnerable-victim enhancement under U.S.S.G. § 3A1.1(b)(1), rather than the 4–level enhancement contemplated in the plea agreement. The probation office then presented the PSR to Lewis and to the government for comment. Lewis objected to the additional enhancements. The government did not object to any of these recommendations.

The probation office then asked the government to comment on Lewis's objections to the additional enhancements. The government responded in an email to the PSR preparer. Regarding the means-of- identification enhancement, the government stated that the "facts outlined in the PSR are accurately relayed and seem to fit within the parameters of the guideline enhancement." (R. 59–1.) Regarding the obstruction-of-justice enhancement, the government stated that "the PSR accurately relays the facts that arguably fall within the umbrage of the guideline enhancement." (R. 59–1.) The final PSR included the additional enhancements. It also included several victim impact statements. Based on a calculated total offense level of 32, Lewis's guideline range under the PSR was 121 to 151 months.

The government and Lewis both filed sentencing memorandums. Lewis asked for an eight-year prison term, arguing that this sentence would have the same deterrent effect as a ten-year sentence. The government's response did not address the guidelines; instead, it emphasized the seriousness of the offense and recommended a ten-year sentence.

At sentencing, the district court once again asked the government to comment on Lewis's objections to the additional enhancements in the PSR. Mindful of the plea agreement, the government first expressed that it was not advocating for the additional enhancements. It then repeated the recommendations that it had given to the probation office. The district court followed the PSR and concluded that Lewis's total offense level was 32. The government then argued that a 4–level vulnerable-victim enhancement—as contemplated in the plea agreement—rather than the 2–level vulnerable-victim enhancement included in the PSR should apply. The district court rejected that argument. The court then sentenced Lewis to fifteen years' imprisonment, a sentence five years higher than was contemplated in the plea agreement and twenty-nine months higher than the top end of the guideline range for an offense level of 32.

On January 5, 2015, Lewis appealed only her conditions of supervised release. In light of our decision in Thompson , 777 F.3d 368, the government and Lewis submitted a joint motion to vacate the sentence and to remand for resentencing to correct the supervised release conditions contained in the original sentencing order. We granted that motion and remanded for resentencing on March 12, 2015.

On February 1, 2016, Lewis filed a motion with the district court seeking to reassign her case to a new sentencing judge, to strike the PSR's guideline calculation, to strike the government's sentencing memorandum, and to seal the sentencing transcript. In that motion, Lewis claimed for the first time that the government had breached the plea agreement. The district court denied Lewis's motion, holding that she had waived any argument regarding a breach of the plea agreement by not presenting it at the first sentencing hearing or on the first appeal. The district court also concluded that, even absent a waiver, Lewis was "not entitled to relief because the government did not breach the plea agreement." (R. 61 at 5.)

Before the resentencing hearing, Lewis again filed objections to enhancements in the PSR. During resentencing, she specifically objected to the means-of-identification 2–level enhancement and the vulnerable-victim enhancement. The district court rejected Lewis's argument regarding the vulnerable-victim enhancement and applied the 2–level increase contemplated in the PSR. The district court accepted Lewis's argument regarding the means-of-identification enhancement and dropped that 2–level increase. The district court then recalculated Lewis's guideline range and found that her total...