U.S. v. Tholl, 89-1692

• Decision Date: 21 February 1990
• Docket Number: No. 89-1692,89-1692
• Citation: 895 F.2d 1178
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Edward THOLL, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1178

895 F.2d 1178

UNITED STATES of America, Plaintiff-Appellee, v. Edward THOLL, Defendant-Appellant.

No. 89-1692.

United States Court of Appeals, Seventh Circuit.

Argued Sept. 19, 1989.

Decided Feb. 15, 1990.

As Amended Feb. 21, 1990.

Stephen J. Liccione, Asst. U.S. Atty. (argued), Milwaukee, Wis., for plaintiff-appellee.

Waring R. Fincke (argued), Dvorak & Fincke, Milwaukee, Wis., for defendant-appellant.

Before RIPPLE, MANION and KANNE, Circuit Judges.

RIPPLE, Circuit Judge.

Edward Tholl was convicted under 18 U.S.C. Sec. 912 of obtaining money and property by impersonating a Drug Enforcement Administration (DEA) agent. Pursuant to a plea agreement, Mr. Tholl pleaded guilty and was sentenced to 18 months' imprisonment, ordered to make restitution of the funds taken in the bogus drug raids, and fined $2500. Mr. Tholl also was charged $50 under the special penalty assessment provision of 18 U.S.C. Sec. 3013. On appeal, Mr. Tholl renews several objections to his sentence imposed under the Sentencing Guidelines and challenges the guidelines on constitutional grounds. For the following reasons, we affirm.

I BACKGROUND

The essential facts are undisputed. Edward Tholl and his brother were engaged in an elaborate scheme to defraud drug dealers by posing as DEA agents and conducting bogus "raids," "arrests," and "searches" of dealers in Milwaukee, Wisconsin. To facilitate the scheme, the Tholls obtained false DEA badges, credentials, blank search warrant applications, and blank informant agreements. Thus equipped, the Tholls, posing as DEA agents, would "raid" a drug dealer's residence, "arrest" the dealer, "search" his house, and confiscate any money or drugs in the house. During the course of these searches, the Tholls would threaten to take the unwitting victim "downtown" unless he agreed to cooperate with them. The Tholls then would explain to the victim that he could have this "arrest" expunged from his record by agreeing to assist them in identifying other drug houses where similar raids could be conducted. To memorialize this "agreement," the Tholls would have the victim sign a form obligating him to render such "cooperation" for a one-year period.

The Tholls were arrested on July 27, 1988, after one of their search victims, Dale Prout, became suspicious and called the true DEA. On July 25, 1988, the Tholls had conducted a "raid" on Mr. Prout's residence, "arrested" Mr. Prout, and seized approximately 3 ounces of marijuana and $380 in cash. The Tholls also had induced Mr. Prout to sign an "informant" agreement and, after threatening him with being "taken into custody" or "taken downtown," had driven him around the area to identify other drug houses. Mr. Prout identified two other houses. Mr. Prout's tip to the true DEA led to the discovery that at least three other houses in the area had been raided that week by men matching the Tholls' description. On July 27, 1988, with Mr. Prout's assistance, the DEA staged its own fake drug transaction, and Mr. Prout made sure that the Tholls were advised of the time and location of the transaction. Although the Tholls did not attempt to "bust" the staged DEA transaction in progress, they monitored the transaction from their parked vehicle and were arrested as they started to follow the car that carried the proceeds of the staged transaction. Tr. 21 at 23. ¹ A post-arrest search of the Tholls' vehicle and residence uncovered the false DEA credentials and other paraphernalia connected with the scheme.

Mr. Tholl admitted that he had engaged in four of these raids with his brother, but pursuant to a plea agreement the Tholls were charged with only one count--the July 25, 1988 raid on Mr. Prout's residence.

On January 9, 1989, Mr. Tholl appeared before the district court and entered a guilty plea. The district court ordered a presentence investigation and report. After reviewing the report, Mr. Tholl filed motions requesting that the district court declare the guidelines unconstitutional as a violation of due process and that it strike down the special penalty assessment imposed under 18 U.S.C. Sec. 3013 as a violation of the origination clause of article I, section 7 of the United States Constitution. Mr. Tholl also challenged the district court's application of several specific guidelines provisions. The district court rejected these arguments, sentenced him to 18 months' imprisonment, ordered restitution of the funds taken in the bogus drug raid, and imposed a fine of $2500. Mr. Tholl also was charged $50 under the special penalty assessment. The judgment was entered on March 23, 1989, and on March 30, 1989, Mr. Tholl filed a timely notice of appeal. ²

II ANALYSIS

A. Due Process Challenge to the Guidelines

Mr. Tholl contends that the operation of the Sentencing Guidelines violates due process by depriving him of an individualized sentence. This argument, however, has been foreclosed by our recent decision in United States v. Pinto, 875 F.2d 143 (7th Cir.1989). In Pinto, we joined a growing number of circuits in holding that a sentence imposed pursuant to the guidelines does not deprive a defendant of due process. ³ We noted that, because the guidelines do take into account offender and offense characteristics, they do not deprive a defendant of an individualized sentence. Pinto, 875 F.2d at 144-45. We also explained that even if the guidelines did deprive a defendant of an individualized sentence, such deprivation would not violate due process because a defendant in a noncapital case is not constitutionally entitled to an individualized sentence. Id. at 145. Thus, under Pinto, we must reject Mr. Tholl's due process challenge to the guidelines.

B. Origination Clause Challenge to the Special Penalty Assessment of 18 U.S.C. Sec. 3013 ⁴

Pursuant to the special assessment

                provided for in 18 U.S.C. Sec. 3013(a)(2)(A), 5 Mr. Tholl, like any individual convicted of a federal felony, was fined $50.  Mr. Tholl contends that the special assessment statute is invalid as a violation of the origination clause of the United States Constitution, article I, section 7.  The origination clause states that "[a]ll Bills for raising Revenue shall originate in the House of Representatives;  but the Senate may propose or concur with Amendments as on other Bills."    Mr. Tholl's argument is that the special assessment is a revenue bill that originated in the Senate rather than the House.  To support his claim, Mr. Tholl relies exclusively on the reasoning of United States v. Munoz-Flores, 863 F.2d 654 (9th Cir.1988), cert. granted, --- U.S. ----, 110 S.Ct. 48, 107 L.Ed.2d 17 (1989), in which the Ninth Circuit expressly held that the special assessment violated the origination clause. 6   Id. at 661.    As the Ninth Circuit suggested, the language of the origination clause provides the framework under which we ought to analyze an origination clause question.  First, we must determine if the measure was a "bill for raising revenue" within the meaning of the clause;  second, if the bill was indeed a revenue-raising bill, we must determine whether it originated in the Senate;  and third, even if the bill was a revenue bill that originated in the Senate, we must inquire whether the measure was a permissible germane amendment to a House revenue bill.  See Munoz-Flores, 863 F.2d at 657-61. 7   We need only reach the first  
                prong of the analysis because we conclude that the special assessment provision of 18 U.S.C. Sec. 3013 is not a revenue-raising bill within the meaning of the origination clause
                

1.

As a starting point, we believe that it is important to recall that the Supreme Court consistently has followed Justice Story's narrow definition of "bills to raise revenue." "According to that construction, it 'has been confined to bills to levy taxes in the strict sense of the words, and has not been understood to extend to bills for other purposes which incidentally create revenue.' " United States v. Norton, 91 U.S. (1 Otto) 566, 569, 23 L.Ed. 454 (1875) (quoting 1 Story on the Constitution Sec. 880). Accord, Millard v. Roberts, 202 U.S. 429, 436, 26 S.Ct. 674, 675, 50 L.Ed. 1090 (1906); Twin City Bank v. Nebeker, 167 U.S. 196, 202-03, 17 S.Ct. 766, 768-69, 42 L.Ed. 134 (1897). Consequently, the Supreme Court found no violation of the origination clause when Congress enacted a statute providing that funds received from the sale of money orders were to be deemed money in the Treasury of the United States. Norton, 91 U.S. (1 Otto) at 568. Similarly, a tax on the average notes in circulation of a banking association in order to provide "a national currency secured by a pledge of bonds of the United States ... and ... to meet the expenses attending the execution of the act," Nebeker, 167 U.S. at 202, 17 S.Ct. at 769, is not within the ambit of the constitutional provision. Nor is a law levying a tax on property within the District of Columbia in order to raise money for certain railroad construction activity. Millard, 202 U.S. at 436-37, 26 S.Ct. at 675.

2.

We now examine the statutory language to determine whether, in light of the purpose of the special assessment, the constitutional stricture applies. The special assessment was enacted as part of the Victims of Crime Act of 1984, Pub.L. No. 98-473, 98 Stat. 2170 (the Act). ⁸ Although the Act contains no express statement of purpose, it creates a separate Treasury account called the "Crime Victims Fund" (the Fund) into which various criminal "fines," including the special assessment, are deposited. 42 U.S.C. Sec. 10601(a), (b). The Attorney General is required to make annual grants from the Fund to eligible crime victim compensation and assistance programs. 42 U.S.C. Secs. 10602-03. ⁹ Thus, although neither the Act nor the special assessment contains language denominated "statement of purpose," an examination of the language reveals that the purpose of the special assessment is to endow the Fund, and the purpose of the Fund is...