United States v. 1. Exec. Recycling, Inc.

• Decision Date: 17 June 2013
• Docket Number: Criminal Case No. 11–cr–00376–WJM.
• Citation: 953 F.Supp.2d 1138
• Parties: UNITED STATES of America, Plaintiff, v. 1. EXECUTIVE RECYCLING, INC., 2. Brandon Richter, and 3. Tor Olson, Defendants.
• Court: U.S. District Court — District of Colorado

953 F.Supp.2d 1138

UNITED STATES of America, Plaintiff,

v.1. EXECUTIVE RECYCLING, INC., 2. Brandon Richter, and 3. Tor Olson, Defendants.

Criminal Case No. 11–cr–00376–WJM.

United States District Court,

D. Colorado.

June 17, 2013.

Lillian Louisa Alves, Suneeta Hazra, Tonya Shotwell Andrews, Valeria Neale Spencer, U.S. Attorney's Office, Denver, CO, for Plaintiff.

Cleo J. Rauchway, Pamela Robillard Mackey, Haddon, Morgan & Foreman, P.C., Lucy H. Deakins, William J. Leone, Fulbright & Jaworski, LLP, Denver, CO, for Defendants.

ORDER ON DEFENDANTS' OBJECTIONS TO THEIR RESPECTIVE PRESENTENCE INVESTIGATION REPORTS AND GOVERNMENT'S MOTION FOR PRELIMINARY ORDER OF FORFEITURE

WILLIAM J. MARTÍNEZ, District Judge.

On September 15, 2011, the Government filed a sixteen count Indictment against Defendants Executive Recycling, Inc., Brandon Richter, and Tor Olson. (ECF No. 1.) After a lengthy and hard fought jury trial, on December 21, 2012, Executive Recycling and Brandon Richter were convicted on nine counts, while Tor Olson was convicted on eight counts. (ECF Nos. 271–15, 271–16 & 271–17.) All Defendants were convicted of six counts of wire fraud, one count of mail fraud, and one count of smuggling. ( Id.) Executive Recycling was convicted on one count of unlawful exportation of CRT monitors. (ECF No. 271–15.) Brandon Richter was convicted of one count of obstruction of justice. (ECF No. 271–16.)

The proceedings related to sentencing have been as hotly contested as the trial. After the jury returned its verdict, the parties all filed Sentencing Statements which outlined their preliminary positions on the potential enhancements relevant to the charges of conviction. (ECF Nos. 286, 297 & 298.) After receiving these filings, the Court ordered additional briefing on certain particular issues raised therein, specifically the amount of loss and number of victims of the fraudulent scheme. (ECF No. 301.) The parties filed the requested briefs and Defendants obtained the services of an expert to assist the Court with its loss calculations. (ECF Nos. 304, 310–11, 315, 336 & 337.) After reviewing the briefs, the Court determined that an evidentiary hearing was necessary and such hearing was held on April 3, 2013. (ECF No. 341.)

Additionally, at the Court's direction, the Probation Office prepared Presentence Investigation Reports (“PSIRs”) for each Defendant. (ECF Nos. 307, 308 & 312.) Defendants and the Government filed objections to the PSIRs. (ECF Nos. 317–19 & 345.) The Government filed a Response to the Defendants' Objections. (ECF No. 351.) The Probation Office has prepared an Addendum to each PSIR with the Probation Officers' position on the parties' Objections. (ECF Nos. 360–62.)

Defendants Richter and Olson have also filed Motions for Variant or Non–Guidelines Sentences. (ECF Nos. 321 & 353.) The Government has responded to those Motions. (ECF Nos. 357–58.)

Finally, the Government has filed a Motion for Preliminary Orders of Forfeiture for Personal Money Judgments. (ECF No. 350.) Defendants have opposed this Motion. (ECF Nos. 355–56.)

The purpose of this Order is to resolve most of the legal issues raised in the sentencing-related motions and briefing. As set forth below, due to the lack of development of certain aspects of the record (which is admittedly difficult to believe given the volume of paperwork filed by the parties in this case), the Court is forced to reserve ruling on a limited number of issues. Additionally, this Order does not address Defendants' Motions for Variant or Non–Guidelines Sentences as these motions will be addressed at the Defendants' individualized sentencing hearings, which will be set by subsequent Court order.

I. LEGAL STANDARD

Federal Rule of Criminal Procedure 32(i)(3)(B) provides that a sentencing court “must—for any disputed portion of the presentence report or other controverted matter—rule on the dispute or determine that a ruling is unnecessary either because the matter will not affect sentencing, or because the court will not consider the matter in sentencing.” “The purpose of Rule 32 is ‘to ensure that sentencing is based on reliable facts found by the court itself after deliberation.’ ” United States v. Begay, 117 Fed.Appx. 682, 683 (10th Cir.2004) (quoting United States v. Nelson, 356 F.3d 719, 722 (6th Cir.2004)). Therefore, a sentencing court does not satisfy its Rule 32 obligation by “simply adopting the presentence report as its finding.” United States v. Guzman, 318 F.3d 1191, 1198 n. 9 (10th Cir.2003). Nonetheless, “[a] ruling on a disputed issue need not be exhaustively detailed, but it must be definite and clear.” United States v. Williams, 374 F.3d 941, 947 (10th Cir.2004).

To the extent other legal standards apply to various aspects of this Order, the Court will discuss those standards in the relevant context below.

II. ANALYSIS

The Court will first determine the amount of loss for purposes of § 2B1.1(b)(1), which was the subject of extensive briefing and the majority of the post-trial evidentiary hearing. Following this analysis, the Court will address restitution and forfeiture. Finally, the Court will discuss each of the parties' discrete objections to enhancements applied or rejected in the PSIRs, as well as factual statements made in the PSIRs and relied on by the Probation Officers in making their sentencing recommendation.

A. Amount of Loss Pursuant to U.S.S.G. § 2B1.1 (b)(1)

Section 2B1.1 of the United States Sentencing Guidelines guides a court when sentencing a defendant for “Larceny, Embezzlement, and other Forms of Theft; Offenses Involving Stolen Property; Property Damage or Destruction; Fraud and Deceit; Forgery; Offenses Involving Altered or Counterfeit Instruments Other than Counterfeit Bearer Obligations of the United States.” Part of a court's duty when sentencing under § 2B1.1 is to determine whether a defendant's base offense level should be increased because of the amount of loss the offense caused. See U.S. Sentencing Guidelines Manual (hereafter “U.S.S.G.”) § 2B1.1(b)(1) (“If the loss exceeded $5,000, increase the offense level as follows....”).

The application notes to § 2B1.1 define loss as “the greater of actual or intended loss.” U.S.S.G. § 2B1.1, cmt. n. 3(A). “ ‘Actual loss' means the reasonably foreseeable pecuniary harm that resulted from the offense.” Id. at cmt. n. 3(A)(i). “ ‘Intended loss' ... means the pecuniary harm that was intended to result from the offense.” Id. at cmt. n. 3(A)(ii). “Pecuniary harm” means “harm that is monetary or that otherwise is readily measurable in money.” Id. at cmt. n. 3(A)(iii).

In this case, the parties strenuously dispute the amount of loss for purposes of § 2B1.1(b)(1). The PSIRs have a loss amount of $403,790.22, which results in a fourteen level enhancement. (ECF Nos. 307–08 & 312.) The Government contends that the loss should be valued as all monies paid by the customers named in the Indictment, as well as Summit County, for a total of $475,293.32. (ECF No. 286 at 10.) Defendants provide a variety of ways to value the loss, with the result ranging from no actual loss to a maximum of $195,000, the total amount paid by the customers named in the counts of the Indictment on which they were convicted. (ECF Nos. 297–98; 310–11.)

1. Relevant Conduct

An important aspect of the loss calculation that is disputed by the parties is which customers' payments to Defendants should be included in the loss calculation. The PSIRs include losses incurred by the following customers: City of Broomfield, El Paso County, City of Boulder, Jefferson County, Denver Newspaper Agency, ADT, and Summit County. (ECF Nos. 307–08 & 312.) Defendants object to the inclusion of ADT and Summit County because they were not convicted on any offense specifically involving these customers. (ECF Nos. 318–19.) The Government objects to the PSIRs' failure to include Centura Health, Children's Hospital, and Cherry Creek Schools because, although Defendants were acquitted on the counts of the Indictment naming these entities, the Government believes Defendants' actions as to them still fall within the relevant conduct to be considered. (ECF Nos. 345.)

“In calculating loss under the Guidelines, the district court does not limit itself to conduct underlying the offense of conviction, but rather may consider all of the defendant's relevant conduct.” United States v. Griffith, 584 F.3d 1004, 1011 (10th Cir.2009) (internal quotation marks omitted). Section 1B1.3 sets the standard for “Relevant Conduct” as follows:

(a) Chapters Two (Offense Conduct) and Three (Adjustments). Unless otherwise specified, (i) the base offense level where the guideline specifies more than one base offense level, (ii) specific offense characteristics and (iii) cross references in Chapter Two, and (iv) adjustments in Chapter Three, shall be determined on the basis of the following:

(1)(A) all acts and omissions committed, aided, abetted, counseled, commanded, induced, procured, or willfully caused by the defendant; and

(B) in the case of a jointly undertaken criminal activity (a criminal plan, scheme, endeavor, or enterprise undertaken by the defendant in concert with others, whether or not charged as a conspiracy), all reasonably foreseeable acts and omissions of others in furtherance of the jointly undertaken criminal activity,

that occurred during the commission of the offense of conviction, in preparation for that offense, or in the course of attempting to avoid detection or responsibility for that offense;

(2) solely with respect to offenses of a character for which § 3D1.2(d) would require grouping of multiple counts, all acts and omissions described in subdivisions (1)(A) and (1)(B) above that were part of the same course of conduct or common scheme or plan as the offense of conviction;

(3) all harm that resulted from the acts and omissions specified in subsections (a)(1) and (a)(2) above, and all harm that was the object of such acts and omissions;...