U.S. v. Crowell, 94-10052
| Decision Date | 25 July 1995 |
| Docket Number | No. 94-10052,94-10052 |
| Citation | 60 F.3d 199 |
| Parties | UNITED STATES of America, Plaintiff-Appellee, v. Charles R. CROWELL, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Fifth Circuit |
John W. Sweeney, Jr., Douglas, Kressler & Wuester, P.C., Fort Worth, TX, for appellant.
Richard B. Roper, Joe C. Lockhart, Asst. U.S. Attys., and Paul E. Coggins, U.S. Atty., Fort Worth, TX, for appellee.
Appeal from the United States District Court for the Northern District of Texas.
Before REYNALDO G. GARZA, HIGGINBOTHAM and PARKER, Circuit Judges.
The defendant, Charles R. Crowell, was tried before a jury and convicted on all 23 counts of a superseding indictment related to a fraudulent investment scheme that spanned more than 5 years and affected more than 160 victims. Crowell appeals the district court's rejection of two negotiated plea agreements and the sentence the district court imposed. Since we find that the district court participated in plea discussions in violation of Federal Rule of Criminal Procedure 11(e)(1), but find that the defendant received a fair trial, we affirm Crowell's conviction, vacate his sentence, and remand for resentencing.
Crowell was the president and chief operating officer of Abacus and Associates, Inc. Abacus was in the business of preparing income tax returns and providing related bookkeeping services. In addition, Abacus held itself out as a manager of investments. Beginning sometime in 1979, Crowell, through Abacus, established the Abacus Retirement Management Trust, with Crowell as Trustee. Crowell directed Abacus employees to identify potential investment clients through their income tax returns. When potential investors were identified, Crowell would convince them to put their money into IRA accounts, pension plans, and other investments that he purported to manage through Abacus Retirement Management Trust.
Crowell represented to potential investors and clients that their money would be invested in first lien mortgage notes, municipal leases, church bonds, municipal bonds, and "safe" stocks. What Crowell failed to tell investors and clients is that instead of investing their money as he represented, he diverted, through various bank accounts, much of the money for his own business and personal use, including payroll, the purchase of personal property, concrete for a swimming pool, utilities, cattle, credit card charges, and legal fees not related to trust business. Crowell periodically mailed fraudulent Statements of Account to his investors, which indicated that their investments were doing well and that the funds were readily available. In addition, at times Crowell used new investor deposits to cover other investor's withdrawals, preventing exposure of his fraudulent practices. As a result of his fraudulent investment scheme, Crowell deprived more than 160 victims of savings and retirement funds in the amount of $1,818,668.77.
On August 11, 1992, Crowell was charged in a three-count indictment with interstate transportation of money obtained by fraud in violation of 18 U.S.C. Sec. 2314, fraudulent sale of a security as part of a pension plan in violation of 15 U.S.C. Sec. 77q, and conducting a financial transaction in proceeds of the interstate transportation of money obtained by fraud in violation of 18 U.S.C. Sec. 1956(a)(1). All three charges related to transactions that took place in August of 1987.
On November 6, 1992, pursuant to a plea agreement with the government, Crowell pled guilty to Count 2 of the indictment. The agreement provided that the other charges would be dropped and that Crowell would make restitution to the victims through the sale of property he owned, including land in Keller, Texas. The district court accepted Crowell's guilty plea subject to a later determination on whether to accept the plea agreement.
After reviewing the plea agreement and presentence investigation report, the district court expressed concern regarding the sentence allowable under the agreement. The charge to which Crowell pled guilty would allow a maximum term of imprisonment of five years, which was too light a sentence, in the district court's opinion, considering the defendant's conduct. The district court indicated however, that if significant restitution could be made under the agreement through the sale of the defendant's property, then the overall effect of the agreement would be acceptable. Defense counsel agreed that the plea agreement contemplated significant restitution to the victims, not just a "pie in the sky" promise.
Further investigation revealed that Crowell's property was encumbered by multiple liens, including private security interests and tax liens, and that it was the subject of adversary proceedings in bankruptcy. The district court held multiple conferences with counsel in an effort to determine the value of defendant's property that would be available for restitution. In addition, the district court monitored proceedings in the bankruptcy court for any sign that the property would be available. Finally, in May of 1993, the court determined that significant restitution would not be available despite the efforts of the court and counsel. The district court also decided that absent the actual ability to provide the restitution contemplated by the agreement, the sentence allowable under the plea agreement would not adequately reflect the aggravated nature of Crowell's conduct or the harm to Crowell's victims. Thus, the district court rejected the plea agreement, and Crowell withdrew his guilty plea. The court entered a Memorandum Opinion and Order reflecting this decision on May 25, 1993. Trial was scheduled for June 1, 1993.
Following the rejection of this plea agreement, the government moved for a continuance to allow additional charges to be presented to the grand jury. This motion was granted, and on June 17, 1993, Crowell was charged in a superseding indictment with interstate transportation of money obtained by fraud in violation of 18 U.S.C. Sec. 2314, 20 counts of mail fraud in violation of 18 U.S.C. Sec. 1341, and two counts of engaging in monetary transactions in property derived from mail fraud in violation of 18 U.S.C. Sec. 1957.
On July 19, 1993, the parties reached a tentative agreement for defendant's plea of guilty to two counts of mail fraud under the superseding indictment. Before the agreement was in final form, and before the factual resume had been prepared, the parties decided to contact the district court to inquire in advance whether the court anticipated any problems with the plea agreement. 1 The court first, correctly, stated that it would have to see the plea agreement and factual resume prior to making that determination. The court continued, however, saying
My concern before, as I indicated, was I didn't think that the sentence that could be imposed under the prior plea agreement adequately addressed the defendant's criminal conduct as contemplated--and that I didn't have any choice but to reject it under the policy statement of the guidelines that governs what we'll do when we are presented with a plea agreement.
I felt that a sentence significantly in excess of what he likely would serve under the prior plea of guilty and plea agreement would be required for the sentence to adequately address his criminal conduct. 2
Later that day, the parties submitted the completed plea agreement and factual resume for the district court's review.
On July 20, 1993, pursuant to the second plea agreement, Crowell pled guilty to two counts of mail fraud. The district court again accepted the defendant's guilty plea and deferred its decision on whether to accept the plea agreement. Because the mail fraud counts to which Crowell pled guilty were based on conduct after November 1, 1987, the court reviewed the plea agreement under Section 6B1.2 of the Federal Sentencing Guidelines. The district court determined that the likely guideline sentencing range, 37-46 months, would not adequately reflect the seriousness of Crowell's actual offense behavior and that the agreement would undermine the statutory purposes of sentencing. Thus, the district court rejected the second plea agreement as well. Crowell again withdrew his guilty pleas.
On July 26 and 27, 1993, Crowell was tried before a jury and found guilty on all 23 counts of the superseding indictment. On January 5, 1994, the district court held a sentencing hearing and Sentenced Crowell to imprisonment for 60 months on each count 2 through 10, concurrently; 60 months on each count 11 through 21, concurrently, but consecutive to the sentences imposed on counts 2 through 10; 120 months on counts 22 and 23, concurrently, and concurrent to the sentences imposed on counts 2 through 21; and 10 years on count 1 (a pre-guidelines offense) to run consecutive to the sentences imposed on counts 2 through 23. In addition, the district court ordered $1,818,668.77 in restitution, as well as a special assessment and a three-year term of supervised release following imprisonment. This appeal followed.
On appeal, Crowell argues (1) that the district court improperly participated in plea negotiations in violation of Federal Rule of Criminal Procedure 11(e)(1), (2) that the district court abused its discretion in rejecting the proposed plea agreements, (3) that Crowell was denied a fair trial by being required to make certain admissions at a plea hearing before the district court decided to reject the negotiated plea agreement, (4) that the district court erroneously calculated Crowell's total offense level under the sentencing guidelines, and (5) that the district court's upward departure from the guidelines was unwarranted and unreasonable when imposed in addition to a consecutive sentence on the pre-guidelines offense.
Crowell's first contention is that the district court participated in the plea...
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