U.S. v. Carey

• Decision Date: 12 January 1990
• Docket Number: No. 89-1826,89-1826
• Citation: 895 F.2d 318
• Parties: UNITED STATES of America, Plaintiff-Appellant, v. James E. CAREY, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 318

895 F.2d 318

2 Fed.Sent.R. 176

UNITED STATES of America, Plaintiff-Appellant, v. James E. CAREY, Defendant-Appellee.

No. 89-1826.

United States Court of Appeals, Seventh Circuit.

Argued Dec. 1, 1989.

Decided Jan. 12, 1990.

James M. Warden, Asst. U.S. Atty., Roger Heaton, Asst. Atty. Gen., Indianapolis, Ind., for plaintiff-appellant.

Duge Butler, Jr., Butler, Brown & Blythe, Indianapolis, Ind., J.J. Paul, III, Ober, Symmes, Cardwell, Voyles & Zahn, Indianapolis, Ind., for defendant-appellee.

Before CUMMINGS, FLAUM and KANNE, Circuit Judges.

FLAUM, Circuit Judge.

This case involves an appeal by the government of the district court's downward departure from the Federal Sentencing Guideline's applicable sentencing range. The defendant, James E. Carey, pled guilty to the execution of a scheme and artifice to defraud a bank in violation of 18 U.S.C. Sec. 1344. The presentencing report calculated the defendant's sentencing range for custody as 12 to 18 months imprisonment under the Sentencing Reform Act. While accepting this calculation of the applicable sentencing range as accurate, the district court departed downward from the applicable range. The court did not give reasons at the sentencing hearing for its departure but following the filing of this appeal, entered a memorandum nunc pro tunc stating that the downward departure was based on the cumulative effect of the following factors: (1) the age of the defendant, (2) the physical condition of the defendant, (3) the total dollar loss from the offense overstated its seriousness because a plan of restitution had been undertaken prior to indictment, and (4) the offense was a single act of aberrant behavior. The government appeals claiming that the district court impermissibly relied on these four factors in departing downward. Because we find that the district court's stated reasons for departing were, in part, improper and otherwise not sufficiently articulated, we vacate the sentence and remand for resentencing in conformity with this opinion and the Guidelines.

I. BACKGROUND

The defendant, James E. Carey, was president of North Side Trucking Company. The company maintained checking accounts at the Indiana National Bank and at Bank One. Both banks were located in Indianapolis. For at least fifteen months, beginning in 1987 and continuing into early 1988, the defendant engaged in a check-kiting scheme in which the two checking accounts were constantly overdrawn in ever-increasing amounts. Each workday throughout the fifteen-month period the defendant concealed the overdrafts from the banks by having the company's bookkeeper prepare checks drawn on each of the two accounts in amounts sufficient to cover the shortage in the other account. The defendant signed each check and, on most occasions, personally deposited the checks at the respective banks. The scheme came to an end when the Indiana National Bank discovered the insufficiency of funds to cover three checks written on the company's account. At that time, the insufficiency totaled $219,000.

On October 27, 1988, Carey was indicted for defrauding a bank in violation of 18 U.S.C. Sec. 1344. ¹ The indictment alleged that the defendant executed a scheme and artifice to defraud Indiana National Bank by causing to be prepared and causing to be presented for deposit into an account at Bank One checks drawn on an account at Indiana National Bank in the aggregate amount of $219,000, knowing that there were insufficient funds in the Indiana National Bank account for the checks to be honored. On January 12, 1989, the defendant entered into a plea agreement in which he agreed to plead guilty as charged in the indictment. The agreement stated that the government would make the nature and extent of the defendant's cooperation known to the court at sentencing and would recommend an executed sentence within the range provided by the Sentencing Reform Act (the "Act"). The agreement further stated that the defendant could request and argue for any sentence he deemed appropriate. The district court accepted the defendant's guilty plea. ²

The pre-trial services agency prepared a presentence report which calculated that under the Act the applicable sentencing range for custody was 12 to 18 months of imprisonment. ³ The report did not recommend a departure from the Guidelines. The report also stated the following relevant facts regarding the defendant's age, physical condition and employment: The defendant was born on February 4, 1926. He underwent surgery once in September 1979 and twice in February 1980 to reduce a brain tumor on a pituitary nerve. The defendant takes medication daily as treatment for pituitary problems. He was also operated on in January of 1988, having been diagnosed as possibly having chest cancer. No cancer was discovered during that operation. He does not smoke and has never used illegal drugs. He has served as the pastor of a church since 1982.

At sentencing, the district court acknowledged that the pretrial service agency's calculation of the appropriate sentencing range at 12 to 18 months was accurate. The court, however, departed downward from the applicable range and imposed a sentence of one month imprisonment, two years supervised release (including the first thirty days in a community treatment center), full restitution, 200 hours of community service, reimbursement of the costs of confinement, and a $50 special assessment. The court gave no reasons for departing from the range at sentencing.

On April 17, 1989, the government filed a notice of appeal pursuant to 18 U.S.C. Sec. 3742(b). On April 18, 1989, the district court filed a memorandum nunc pro tunc as to the sentencing hearing explaining that the cumulative effect of four factors led it to depart downward from the applicable guideline range. As stated above, these four factors were: (1) the age of the defendant, (2) the physical condition of the defendant, (3) the total dollar loss resulting from the offense overstated its seriousness because a plan of restitution had been undertaken prior to indictment, and (4) the offense was a single act of aberrant behavior. The court expressly stated that none of these factors taken alone persuaded it to depart downward but that the aggregate effect of the four factors warranted the departure.

II. ANALYSIS

The United States Sentencing Commission Guidelines, enacted pursuant to the Sentencing Reform Act of 1984, as amended, 18 U.S.C. Sec. 3551 et seq., (Supp. IV 1986), and 28 U.S.C. Secs. 991-98 (Supp. IV 1988), require a district court to impose a sentence of the kind and within the range established by the Sentencing Commission for the applicable category of offense and defendant unless the court finds an aggravating or mitigating circumstance of a kind or to a degree not adequately considered by the Commission in formulating the Guidelines. 18 U.S.C. Sec. 3553(b) (Supp.1989). See also United States v. Jordan, 890 F.2d 968, 970 (7th Cir.1989); United States v. Perez, 871 F.2d 45, 47-48 (6th Cir.1989). In determining whether a circumstance was adequately considered by the Commission, a court can consider only the Guidelines themselves, along with its policy statements and the official commentary of the Commission. Id. The Guidelines list a number of factors that may never be considered as either aggravating or mitigating circumstances--race, sex, national origin, creed, religion, and socioeconomic status. Other factors, such as age, physical condition, education, and family and community ties are generally irrelevant except in an extraordinary case. Secs. 5H1.1-10. The sentencing court must state the reasons for a departure from the applicable sentencing range, and the sentence imposed must be reasonable in light of the articulated reasons. 18 U.S.C. Sec. 3742(e)(2).

In this appeal, the government contends that the district court's reasons for departing are either not relevant to a decision to depart or are not supported by the record. The scope of our review is set forth in 18 U.S.C. Sec. 3742(e). We review a district court's departure from the Guideline's sentencing range to determine whether it was reasonable in light of the factors dictated by the Guidelines and the district court's explanations for its departure. 18 U.S.C. Sec. 3742(e); United States v. Miller, 874 F.2d 466, 471 (7th Cir.1989); United States v. Jordan, 890 F.2d 968, 970-71 (7th Cir.1989). " 'Reasonableness' implies that a sentencing judge must provide articulable reasons, of a type contemplated by the Act and the Guidelines, and based on a sufficiently sound factual foundation to justify a departure from the guidelines." Miller, 874 F.2d at 471. Where we find that a departure is unreasonable, we must vacate a sentence and remand the case for further proceedings. 18 U.S.C. Sec. 3742(f)(2).

In Carey's case, a review of each of the four factors that the district court relied on for its departure leads us to the inevitable conclusion that the departure was unreasonable because the court's application of the Guidelines to the facts as presented was clearly erroneous. Accordingly, we must vacate Carey's sentence and remand for resentencing. We turn to an analysis of each of the four factors, with an eye both toward providing guidance to the district court to enable it to properly resentence this defendant, and to future sentencing courts seeking to depart from the Guidelines.

a. Restitution

We begin by addressing the district court's reliance on the defendant's voluntary payment of restitution prior to indictment. As of the time of sentencing, Carey had paid all but $20,000 of the $220,000 owed to the bank as a result of the check-kiting scheme. The district court believed that this payment of restitution was relevant to its decision to depart based on a statement in the Guidelines that a departure may be warranted where "[i]n a few instances, the total dollar loss that results from the offense may overstate...