979 F.2d 1289 (8th Cir. 1992), 91-3637, United States v. Prendergast

Docket Nº:91-3637.
Citation:979 F.2d 1289
Party Name:UNITED STATES of America, Appellee, v. Robert J. PRENDERGAST, Jr., Appellant.
Case Date:November 06, 1992
Court:United States Courts of Appeals, Court of Appeals for the Eighth Circuit

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979 F.2d 1289 (8th Cir. 1992)

UNITED STATES of America, Appellee,


Robert J. PRENDERGAST, Jr., Appellant.

No. 91-3637.

United States Court of Appeals, Eighth Circuit

November 6, 1992

Submitted June 12, 1992.

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Michael F. Gutowski, Omaha, Neb., for appellant.

Robert F. Kokrda, Asst. U.S. Atty., Omaha, Neb., for appellee.

Before WOLLMAN and HANSEN, Circuit Judges, and ROY, [*] Senior District Judge.

HANSEN, Circuit Judge.


Robert J. Prendergast, Jr., a stockbroker, was charged with devising a scheme to sell fraudulent promissory notes over interstate phone lines in violation of 18 U.S.C. § 1343. The United States Attorney's Information specifically charged him with selling promissory notes totalling approximately $280,000 to three individuals: William A. North ($80,000); Clarence O. Romans ($50,000); and Charles L. Watson ($150,000). Prendergast fully repaid North, but he still owes Romans $50,000 and Watson $120,000. Although not listed in the charging Information, Prendergast also defrauded two additional investors: Rex McKain ($30,000) and Prochaska and Associates (Prochaska), a company based in Omaha, Nebraska ($674,341). He still owes McKain the entire $30,000. He also owes $213,000 to Prochaska.

The Douglas County Attorney, in Omaha, Nebraska, charged Prendergast with four state counts of theft by deception involving the Prochaska transactions. He pled guilty and was sentenced on May 16, 1991, to an 18 month term of imprisonment for each count to be served concurrently.

Prendergast pled guilty to the federal wire fraud charge on April 22, 1991. On October 21, 1991, after the defendant had been sentenced in state court, the district court sentenced Prendergast to an 18 month term of imprisonment to be served consecutively to the state sentence. Prendergast appeals the specific terms and conditions of his federal sentence.


For the purposes of sentencing, the district court calculated the amount of loss based on the actual harm (net loss) caused to North, Romans and Watson. Because Prendergast had reimbursed in whole or in part these three individuals, the district court found the amount of loss to total $170,000, which is the amount of money that Prendergast still owes the three individuals. This finding translated into a seven-level increase, which when added to a base offense level of six, resulted in an offense level of 13. See U.S.S.G. § 2F1.1(b)(1) (Nov. 1990). The district court then awarded a two-level increase in the offense level after finding that Prendergast's scheme involved more than minimal planning or a scheme to defraud more than one victim. See U.S.S.G. § 2F1.1(b)(2). After finding that Prendergast was entitled to a two-level decrease for acceptance of responsibility, see U.S.S.G. § 3E1.1, the court determined the total offense level was 13. Because of his state court convictions for the Prochaska transactions, Prendergast had a criminal

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history category II. Based on these factual findings, the applicable sentencing range was 15 to 21 months. The district court sentenced Prendergast to an 18 month term of imprisonment to be served consecutively to the state sentence.

Unlike most defendants charged with fraud who take a narrow view of relevant conduct, Prendergast argues that the district court incorrectly applied the sentencing guidelines by refusing to include the uncharged amount of the net loss to McKain ($30,000) and Prochaska ($213,000) in the calculation of the offense level under U.S.S.G. § 2F1.1(b)(1). He contends that these transactions do constitute relevant conduct pursuant to U.S.S.G. § 1B1.3 and therefore should have been included in the loss calculation. As pointed out in his brief, he takes this position to support his argument for concurrent state-federal sentences and for a lower criminal history category. See U.S.S.G. § 4A1.2(a)(1) (prior sentence for criminal history calculation does not include prior convictions for conduct that is part of the instant offense).

In deciding not to include the additional $243,000 in the loss calculation, the district court relied on the panel opinion in United States v. Galloway, 943 F.2d 897 (8th Cir.1991) (Galloway I ), vacated...

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