U.S. v. Campbell

• Decision Date: 07 February 1997
• Docket Number: No. 96-40115,96-40115
• Citation: 106 F.3d 64
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Ben D. CAMPBELL, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 64

106 F.3d 64

UNITED STATES of America, Plaintiff-Appellee, v. Ben D. CAMPBELL, Defendant-Appellant.

No. 96-40115.

United States Court of Appeals Fifth Circuit.

Feb. 7, 1997.

Michael E. Savage, Assistant U.S. Attorney, United States Attorney's Office, Plano, TX, for plaintiff-appellee.

Herbert V. Larson, Jr., New Orleans, LA, for defendant-appellant.

Appeal from the United States District Court for the Eastern District of Texas.

Before GARWOOD, DAVIS and STEWART, Circuit Judges.

STEWART, Circuit Judge:

Ben D. Campbell ("Campbell") appeals what he calls a "vindictive" sentence imposed by the district court. He was convicted of making a false entry in bank records, conspiracy to commit bank fraud, and bank fraud. The district court sentenced Campbell to five years' probation on the false entry count and fifty-one months' imprisonment on the conspiracy and bank fraud counts, the sentences to run concurrently. The court also ordered restitution in the amount of $540,229.56.

In United States v. Campbell, 64 F.3d 967, 978 (5th Cir.1995), we reversed Campbell's convictions on the conspiracy and bank fraud counts because of insufficient evidence and remanded the case for resentencing without further instructions. On remand, the district court overruled all of Campbell's objections to the imposition of a greater sentence than probation, and sentenced Campbell to forty months' imprisonment on the false entry count and ordered him to pay restitution in the amount of $211,082.18. Campbell timely filed his notice of appeal. For the following reasons, we AFFIRM Campbell's sentence and REVERSE and VACATE the restitution order.

BACKGROUND ¹

In 1978, John Campbell ("John") purchased 6.2 acres of land near Crested Butte, Colorado ("Crested Butte") for development as a resort. In 1984, Campbell, his father John, and Daniel Thurman formed West-Butte Corporation ("West-Butte") to continue with development of the Crested Butte property. West-Butte's Articles of Incorporation listed Thurman as president, Campbell as vice-president, and Shirley Thurman as secretary/treasurer. The corporation's sole asset was the Crested Butte property, which John had conveyed to West-Butte by warranty deed.

In 1986, Campbell began experiencing financial difficulties with other companies he owned. In an effort to solve his debt problems, Campbell approached Mbank Fort Worth for a loan, and offered to pledge the Crested-Butte property as collateral. Mbank refused to approve the loan when it discovered that West-Butte, not Campbell, owned Crested Butte and that there was a defect in the warranty deed that conveyed it from John to West-Butte. Undeterred, Campbell then turned to Flower Mound In 1987, Campbell filed for bankruptcy. Security Bank of Flower Mound ("Security Bank"), which had acquired all of FMB's assets when it became insolvent, made a demand on Campbell for the amount of the defaulted promissory notes secured by the mortgage on Crested Butte. Eventually, Security Bank filed suit in Colorado state court. West-Butte initially fought to keep the property, but after negotiations with Security Bank, the parties agreed upon and signed a settlement. The Crested Butte property was then sold for $320,000, with Security bank receiving $123,917.82. Based on the actions taken by Campbell, he was indicted on the charges of conspiracy to commit bank fraud, on the substantive offense of bank fraud, and on the charge of making a false entry in bank records with intent to deceive because of his false signature as president of West-Butte on the mortgage to FMB.

Bank ("FMB") for the loan, a bank which already had eleven other unsecured notes executed by Campbell on prior occasions. Viewing his prior unsecured notes as a potential pitfall, Campbell offered to pledge the property as collateral both for his new loan and as security on his existing loans. FMB, as did Mbank, noticed the defect in the deed and that Campbell did not own Crested Butte, but nevertheless agreed to lend Campbell $90,000 if he could cure the defect and obtain a corporate resolution from West-Butte, granting Campbell the authority to encumber it. Although no corporate resolution was obtained, Campbell managed to remedy the defect in the deed, which apparently was enough for FMB, as it eventually approved the loan. Campbell executed the mortgage in favor of FMB, signing the mortgage on behalf of West-Butte as its president. Crested Butte was collateral for all twelve of Campbell's loans, including the most recent $90,000 loan.

PROCEDURAL HISTORY

Campbell was convicted of making a false entry in bank records, 18 U.S.C. § 1005 ("Count I"), conspiracy to commit bank fraud, 18 U.S.C. § 371 ("Count II"), and bank fraud, 18 U.S.C. § 1344 ("Count III"). The district court sentenced Campbell to five years' probation on Count I and 51 months' imprisonment on Counts II and III, the sentences to run concurrently. The court ordered restitution in the amount of $540,229.56. On appeal, we reversed Campbell's convictions on Counts II and III because of insufficient evidence and remanded the case for resentencing without further instructions. There was no challenge to the sentence in the first appeal.

On remand, Campbell objected to the imposition of any sentence greater than the five years' probation that he had originally received on Count I on the grounds that a longer sentence would violate the rule against vindictive resentencing established in North Carolina v. Pearce, 395 U.S. 711, 89 S.Ct. 2072, 23 L.Ed.2d 656 (1969). Campbell also objected to any sentence requiring restitution because he alleged there were no losses resulting from the offense of conviction. The district court overruled all of Campbell's objections and sentenced him to forty months' imprisonment on Count I and ordered him to pay restitution in the amount of $211,082.18. This appeal followed.

STANDARDS OF REVIEW

We review the question of whether a sentence is vindictive, and thus unconstitutional, de novo. However, a district court retains wide discretion in sentencing, and the sentencing decision is entitled to considerable deference. Wasman v. United States, 468 U.S. 559, 563, 104 S.Ct. 3217, 3220, 82 L.Ed.2d 424 (1984). We review the legality of a court's order of restitution de novo, and if the sentence is legal, the award is reviewed for abuse of discretion. United States v. Jimenez, 77 F.3d 95, 99 (5th Cir.1996); United States v. Reese, 998 F.2d 1275, 1280 (5th Cir.1993).

DISCUSSION

In this appeal, we are faced with two questions: (1) whether the sentence imposed by the district court on remand was violative of Pearce, as a vindictive sentence, and (2) whether the district court erred by ordering Campbell to pay restitution. We affirm the district court's sentencing decision and hold

that Campbell's sentence on remand was not vindictive in violation of North Carolina v. Pearce, 395 U.S. 711, 89 S.Ct. 2072, 23 L.Ed.2d 656 (1969), overruled on other grounds, Alabama v. Smith, 490 U.S. 794, 109 S.Ct. 2201, 104 L.Ed.2d 865 (1989). However, we reverse and vacate the district court's restitution order.

I. VINDICTIVE RESENTENCING

A. The Supreme Court's Decision in Pearce

In the seminal Pearce decision, the Supreme Court set out guidelines regarding vindictive sentencing occurring after a defendant successfully appeals a conviction (or convictions). The Court held that

due process of law, then, requires that vindictiveness against a defendant for having successfully attacked his first conviction must play no part in the sentence he receives after a new trial. And since the fear of such vindictiveness may unconstitutionally deter a defendant's exercise of the right to appeal or collaterally attack his first conviction, due process also requires that a defendant be freed of apprehension of such a retaliatory motivation on the part of the sentencing judge.

Pearce, 395 U.S. at 725, 89 S.Ct. at 2080. Further, "whenever a judge imposes a more severe sentence upon a defendant after a new trial, the reasons for doing so must affirmatively appear." Id. at 726, 89 S.Ct. at 2081. This rule has since been read to "[apply] a presumption of vindictiveness, which may be overcome only by objective information in the record justifying the increased sentence." Wasman, 468 U.S. at 565, 104 S.Ct. at 3221. Although Pearce was addressing the situation where a harsher sentence was imposed on retrial, we have said that Pearce should not be so narrowly read to preclude its application to a resentence on remand. United States v. Vontsteen, 950 F.2d 1086, 1089 (5th Cir.1992).

It is clear to us that the presumption of vindictiveness in Pearce is designed to prevent miscarriages of justice by a sentencing judge who exacts revenge on a defendant who succeeds on appeal. The rule is a prophylactic one, addressed more to protect future litigants who appeal than to the injustice done in the actual case. Tolerance of a court's vindictiveness might "chill" a defendant's right to seek an appeal of her sentence. Wasman, 468 U.S. at 564, 104 S.Ct. at 3220-21. Such a situation contravenes basic constitutional principles founded in the Due Process Clause of the Fifth and Fourteenth Amendments. Id. A sentencing court, however, must have the discretion to fashion a sentence commensurate with the crime(s) for which the defendant is convicted. Id. at 563, 104 S.Ct. at 3220. Hence, Pearce is not implicated in every case in which a sentence imposed after a successful appeal is harsher than the original sentence. Texas v. McCullough, 475 U.S. 134, 138, 106 S.Ct. 976, 978-79, 89 L.Ed.2d 104 (1986). Moreover, "when, as in the instant case, the effect of an appellant's challenge implicates the sentencing scheme with respect to interrelated or intertwining counts, the presumption of vindictiveness does not arise if the overall sentence is not increased." United States v. Schoenhoff, 919 F.2d 936, 939 (5th Cir.1990) (citing United States v. Forester,...