U.S. v. Benskin, 90-5707
| Decision Date | 26 February 1991 |
| Docket Number | No. 90-5707,90-5707 |
| Citation | 926 F.2d 562 |
| Parties | UNITED STATES of America, Plaintiff-Appellee, v. Mark Stephen BENSKIN, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Sixth Circuit |
W. Hickman Ewing, Jr., U.S. Atty., Dan Newsom, Asst. U.S. Atty. (argued), Office of U.S. Atty., Memphis, Tenn., for plaintiff-appellee.
Daniel D. Warlick (argued), Warlick, Todd & Huffstutter, Nashville, Tenn., for defendant-appellant.
Before KEITH and MILBURN, Circuit Judges, and CONTIE, Senior Circuit Judge.
Mark Stephen Benskin appeals the length of his sentence following his guilty plea to mail and securities fraud. For the following reasons, we affirm the district court's sentencing determination.
Immediately after Mark Stephen Benskin ("Benskin" or "appellant") established his purported insurance and investment company, Mark Benskin & Company, Inc. ("MBC"), in February, 1983, MBC (through Benskin) began selling insurance to the public. Soon thereafter, as part of a scheme to defraud investors that began in late 1984 and continued until the appellant's arrest on April 6, 1989, Benskin held himself out as a broker-dealer, fully licensed and authorized to purchase, sell and otherwise trade in registered securities and commodities futures when, in fact, neither Benskin nor MBC were licensed by any recognized regulatory body. After luring unsuspecting investors, Benskin deposited the investors' funds (cash, checks and/or stock certificates) into his personal account and would, thereafter, use the deposited funds for his own benefit, often investing money in his own name and in the name of MBC.
Benskin solicited more than 3.8 million dollars from over 600 investors (residing in twenty-two states) through seminars, telephone conversations, and personal meetings. In order to conceal the scheme to defraud, Benskin caused fictitious customer account statements (indicating securities transactions that never took place and securities positions that were partially, or wholly, inaccurate) to be prepared, and mailed, to investors. In a further effort to conceal the fraud, Benskin issued checks (to quell any investor suspicion) to investors that requested a portion of their purported investment profits; Benskin often used money misappropriated from later investors to fund these payments.
Benskin generally preyed on private citizens, not corporate investors. In fact, the total customer loss exceeds three million dollars--savings that investors had set aside for retirement and for their childrens' education.
Benskin was taken into custody on April 6, 1989. On June 13, 1989, a federal grand jury issued a fifty (50) count indictment charging Benskin, and his company (MBC), with mail fraud (Counts 1 through 40) in violation of 18 U.S.C. Secs. 2 and 1341, and securities fraud (Counts 41 through 50) in violation of 15 U.S.C. Secs. 77q(a) and 77x and 18 U.S.C. Sec. 2. After pleading "not guilty" at the June 15, 1989 arraignment, Benskin (on behalf of himself and MBC) pled guilty on September 5, 1989, to all fifty counts charged in the indictment.
Benskin appeared before the district court judge for sentencing on April 27, 1990, following the preparation and filing of the Probation Office's presentence report. Because the offenses charged in Counts 1 through 10 of the indictment occurred prior to November 1, 1987 (the United States Sentencing Guidelines' effective date), the Sentencing Guidelines govern Counts 11 through 50 only. Accordingly: regarding Counts 1 through 10, the district court judge sentenced Benskin to five (5) years imprisonment on each count (to run concurrent with each other but consecutive to the sentence imposed on Counts 11 through 50); regarding Counts 11 through 50, the district court judge departed from the applicable guideline range (pursuant to the government's departure request) of twenty-seven to thirty-three (27-33) months and sentenced Benskin to sixty (60) months imprisonment to be followed by three (3) years supervised release.
Benskin thereafter filed a timely notice of appeal. Benskin's sole assignment of error on appeal pertains to the district court's decision to depart from the applicable guideline range.
Benskin argues that "the aggravating or mitigating circumstances alleged, as set forth by the District Judge during sentencing in this cause, are adequately taken into consideration by the Sentencing Commission in formulation of the Guidelines, and further, respectfully urges this Court that the 'doubling' of the effective Guideline Sentence is an unreasonable upward departure, even if aggravated or mitigating circumstance [sic] not adequately taken into consideration by the Sentencing Commission were found in the case." Appellant's Brief at 4.
The United States Sentencing Guidelines specify when departure from the applicable guideline range is appropriate:
Under 18 U.S.C. Sec. 3553(b) the sentencing court may impose a sentence outside the range established by the applicable guideline, if 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." Circumstances that may warrant departure from the guidelines pursuant to this provision cannot, by their very nature, be comprehensively listed and analyzed in advance. The controlling decision as to whether and to what extent departure is warranted can only be made by the court at the time of sentencing.... Similarly, the court may depart from the guidelines, even though the reason for departure is listed elsewhere in the guidelines (e.g., as an adjustment or specific offense characteristic), if the court determines that, in light of unusual circumstances, the guideline level attached to that factor is inadequate.
Where the applicable guidelines, specific offense characteristics, and adjustments do take into consideration a factor listed in this part, departure from the guideline is warranted only if the factor is present to a degree substantially in excess of that which ordinarily is involved in the offense of conviction.
United States Sentencing Commission, Guidelines Manual, Sec. 5K2.0 (June 1988).
The Sixth Circuit employs a three-step analysis to review district court departures from the Sentencing Guidelines. United States v. Joan, 883 F.2d 491, 494 (6th Cir.1989) (). See also United States v. Nelson, 918 F.2d 1268 (6th Cir.1990) (). The Diaz-Villafane analysis utilizes three varying standards of review:
First, we assay the circumstances relied on by the district court in determining that the case is sufficiently "unusual" to warrant departure. That review is essentially plenary: whether or not circumstances are of a kind or degree that they may appropriately be relied upon to justify departure is, we think, a question of law.
Second, we determine whether the circumstances, if conceptually proper, actually exist in the particular case. That assessment involves factfinding and the trier's determinations may be set aside only for clear error.
Third, once we have assured ourselves that the sentencing court considered circumstances appropriate to the departure equation and that those factors enjoyed adequate record support, the direction and degree of departure must, on appeal, be measured by a standard of reasonableness. In this context, reasonableness is determined with due regard for "the factors to be considered in imposing a sentence," generally, and "the reasons for the imposition of the particular sentence, as stated by the district court...."
This third step involves what is quintessentially a judgment call. District courts are in the front lines, sentencing flesh-and-blood defendants. The dynamics of the situation may be difficult to gauge from the antiseptic nature of a sterile paper record. Therefore, appellate review must occur with full awareness of, and respect for, the trier's superior "feel" for the case. We will not lightly disturb decisions to depart, or not, or related decisions implicating degrees of departure.
United States v. Diaz-Villafane, 874 F.2d at 49-50 (citations omitted) (footnote omitted). See also United States v. Nelson, 918 F.2d at 1270-71 ().
Accordingly, "[o]ur first duty in applying the first prong of Diaz-Villafane is to identify the 'circumstances' relied upon by the trial court in departing from the guidelines and then to decide, de novo, whether those circumstances are sufficiently 'unusual' to justify the departure." United States v. Nelson, 918 F.2d at 1271 (citing United States v. Diaz-Villafane, 874 F.2d at 49; United States v. Rodriguez, 882 F.2d 1059, 1067 (6th Cir.1989), cert. denied, --- U.S. ----, 110 S.Ct. 1144, 107 L.Ed.2d 1048 (1990)).
The district court judge articulated the following reasons justifying her departure from Benskin's applicable sentencing range:
I have had the opportunity to see a number of very complex and extensive fraud cases in this district in the past few years. Comparing Mr. Benskin with those cases, I would say this. I think Mr. Benskin is the most personally culpable individual I have seen. This is a fraud that was extremely large in scope. 600 investors identified by the government in twenty-two states. $3,800,000 invested by individuals....
The fraud occurred over a very prolonged period of time. It was perpetuated on a regular basis through the false statements that were sent to the investors, so I would have to say that in terms of the nature of the fraud, its scope, and, of course, certainly in terms of...
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