U.S. v. Coe

• Decision Date: 18 July 2000
• Docket Number: Nos. 99-3627,PLAINTIFF-APPELLEE,99-3674,DEFENDANTS-APPELLANTS,s. 99-3627
• Citation: 220 F.3d 573
• Parties: (7th Cir. 2000) UNITED STATES OF AMERICA,, v. GEORGE A. COE, JR., JEFFREY "J.J." THOMAS, AND DAVID T. BEASLEY,& 99-3699
• Court: U.S. Court of Appeals — Seventh Circuit

Page 573

220 F.3d 573 (7th Cir. 2000)

UNITED STATES OF AMERICA, PLAINTIFF-APPELLEE, v. GEORGE A. COE, JR., JEFFREY "J.J." THOMAS, AND DAVID T. BEASLEY, DEFENDANTS-APPELLANTS.

Nos. 99-3627, 99-3674 & 99-3699

U.S. Court of Appeals, Seventh Circuit

Argued March 29, 2000

Decided July 18, 2000

Appeals from the United States District Court for the Central District of Illinois, Urbana Division. No. 98-20031--Michael P. McCuskey, Judge. [Copyrighted Material Omitted]

[Copyrighted Material Omitted] Hilary W. Frooman (argued), Office of U.S. Atty., Urbana, IL, for United States.

Douglas James Quivey (argued), Weber & Thies, Urbana, IL, for George A. Coe.

Michael B. McClellan (argued), Dodd & McClellan, Champaign, IL, for Jeffrey Thomas.

Diana S. Lenik (argued), Urbana, IL, for David T. Beasley.

Before Flaum, Ripple and Kanne, Circuit Judges.

Flaum, Circuit Judge.

David Beasley, George Coe, and Jeffrey Thomas pled guilty to wire fraud and impersonating an Internal Revenue Service agent in violation of 18 U.S.C. sec.sec. 1343 and 912. Beasley and Coe also pled guilty to mail fraud in violation of 18 U.S.C. sec. 1341. All three defendants contest their sentences. For the reasons stated herein, we affirm the sentences imposed by the district court.

I. BACKGROUND

On December 21, 1994, defendants Beasley and Coe began running a mail and wire fraud scheme. Beginning in May 1995, they were joined by defendant Thomas, and the three continued the scheme until June 6, 1996. During these three years, the defendants contacted over 65 people, informing them that they had won various prizes which they could only claim by sending the defendants money for "taxes" and "fees" that had to be paid before the prizes could be awarded. As part of this scheme, Coe and Beasley occasionally represented themselves as IRS agents to their intended victims. All of the victims of the scheme were over the age of 55, and several victims who sent money were contacted more than once or by more than one defendant. For example, one elderly woman sent the defendants $34,480 in fourteen separate wire transfers. In all, the defendants obtained a total of $171,139.22 from this scheme.

On May 7, 1998, the defendants were indicted and charged with multiple counts of violating the mail and wire fraud statutes, 18 U.S.C. sec.sec. 1341, 1343, as well as impersonating an IRS agent in violation of 18 U.S.C. sec. 912. All of the defendants pled guilty to one count each of wire fraud and impersonating an IRS agent. Defendants Coe and Beasley also pled guilty to one count of mail fraud. The district court sentenced the defendants according to the federal Sentencing Guidelines ("Guidelines") and enhanced Coe's and Beasley's sentences by four levels and Thomas' sentence by three levels. Thomas received a lower enhancement because the district court found that his role in the offense was minor relative to that of his co-defendants.

The district court based the upward departures for all three defendants on its findings that the defendants used mass marketing to commit their fraudulent scheme and that the defendants' fraud violated the Senior Citizens Against Marketing Scams ("SCAMS") Act, 18 U.S.C. sec. 2325 et seq. For each defendant, the district court also provided an alternate reason for the enhancement. The district court found that Coe's sentence merited an enhancement because, after being put on notice by federal agents that he was being investigated for fraud, he continued to perpetrate that fraud. The district court found that Beasley's sentence warranted an enhancement because he had recently been convicted of state crimes based on virtually identical fraudulent conduct. And, the district court found that Thomas' sentence merited an upward departure because his criminal history category did not adequately reflect the seriousness of his prior criminal conduct.

Each defendant received a 36 month sentence for IRS impersonation. On the other counts, Coe was sentenced to 78 months and Beasley and Thomas were sentenced to 87 months. All sentences except that imposed on Thomas were at the uppermost end of the Guidelines' sentencing range. Thomas received a more lenient sentence because of his lesser role in the fraud. The defendants now appeal the district court's calculation of their sentences.

II. DISCUSSION

A. Upward Departures

The defendants argue that the district court erred in applying upward departures to each of their sentences. When reviewing a district court's decision to depart from the sentence indicated by a strict application of the Guidelines, we follow a three step approach. First, we review de novo whether the district court's stated grounds for departure may be relied on to justify the departure. Second, we review for clear error whether the facts that support the grounds for departure actually exist in the case, and third, we review for abuse of discretion whether the district court departed by a reasonable degree. United States v. Willey, 985 F.2d 1342, 1349 (7th Cir. 1993); see also United States v. Akindele, 84 F.3d 948, 953 (7th Cir. 1996); United States v. Boula, 997 F.2d 263, 266 (7th Cir. 1993). Using this framework, we now examine each of the grounds relied on by the district court for the upward departures.

1. Mass-Marketing

The district court's first stated reason for applying an upward departure to the defendants' sentences is that the defendants used mass marketing to perpetrate a fraud. The district court found that the defendants used the telephones and mails to induce a large number of persons to participate in their fraudulent scheme and that this conduct was particularly harmful in a manner that was not adequately considered by the Commission when it promulgated the 1996 Guidelines which were in effect when the defendants committed these crimes. In concluding that the 1996 Guidelines did not adequately account for this factor, the district court considered a later amendment to U.S.S.G. sec. 2F1.1, which took effect on November 1, 1998, that called for a two-level increase where mass marketing was used to effectuate a fraud. See U.S.S.G. sec. 2F1.1(3). The defendants argue that the district court's imposition of an upward departure on this basis effectively sentenced them under a later version of the Guidelines than the one in effect at the time they committed the crimes at issue here in violation of the Ex Post Facto Clause.

It is a violation of the Ex Post Facto Clause for a court to sentence a defendant under an amendment to the Guidelines that makes the punishment for crimes committed before the effective date of the amendment more severe than it had been at the time the criminal activity took place. See United States v. Kopshever, 6 F.3d 1218, 1222-23 (7th Cir. 1993); Willey, 985 F.2d at 1350. Cf. Miller v. Florida, 482 U.S. 423, 435-36 (1987) (holding that the retroactive application of amendments to Florida's sentencing guidelines imposing harsher penalties for certain crimes than existed at the time the crimes were committed violated the Ex Post Facto Clause). However, a sentencing court may consider subsequent Guideline amendments for two purposes. A court may interpret the Commission's later addition of an aggravating element as a sentencing factor as evidence that a previous version of the Guidelines did not adequately consider that factor in the sentencing scheme. See United States v. Porter, 145 F.3d 897, 906 (7th Cir. 1998); United States v. Rainone, 32 F.3d 1203, 1208 (7th Cir. 1994). A court may also consider later amendments as guides for determining how much of a departure is warranted for the aggravating conduct in question. See Akindele, 84 F.3d at 955; Boula, 997 F.2d at 267; Willey, 985 F.2d at 1348. In fact, since "a decision to depart must be linked to the rationale and methodology of the Guidelines," reference to subsequent amendments may be one of the best ways a sentencing court can be assured that the magnitude of a departure is consistent with the sentencing scheme envisioned by Congress. Akindele, 84 F.3d at 954-55.

We have in the past expressed our concern that these permissible uses of subsequent amendments to the Guidelines may "gut" the prohibitions imposed by the Ex Post Facto Clause in this area of the law. See Kopshever, 6 F.3d at 1223. For this reason, we have cautioned sentencing courts that subsequent amendments are only to be used as tools in making a well-reasoned, individualized determination of whether to impose an upward departure in a particular case or to determine the degree of departure that is warranted. See id. In addition, if the Commission considered aggravating circumstances in an earlier version of the Guidelines but elected not to include those circumstances as sentencing factors, departure on that basis is not warranted, even if the Commission later changes its mind and amends the Guidelines to account for the conduct in question. See Porter, 145 F.3d at 906; Akindele, 84 F.3d at 953; Kopshever, 6 F.3d at 1223. It is only where a circumstance is "not adequately taken into consideration by the Sentencing Commission in formulating the guidelines" that a departure is warranted. U.S.S.G. sec. 5K2.0.

In this case, the district court found that the defendants' use of mass marketing to conduct their fraudulent scheme was an aggravating circumstance that was not adequately taken into consideration by the Commission in the 1996 Guidelines. The district court explicitly stated that it considered the Commission's later amendment of the Guidelines to include a two-level enhancement for this conduct solely as evidence that the Commission had not adequately considered this factor in earlier versions of the Guidelines and as a framework for determining the degree to which a departure based on this conduct should enhance the defendants' sentences. As noted above, the district court was permitted to use the subsequent guideline amendment in this fashion, and we...