U.S. v. DeMonte, 92-3964

• Citation: 25 F.3d 343
• Decision Date: 25 August 1994
• Docket Number: No. 92-3964,92-3964
• Parties: UNITED STATES of America, Plaintiff-Appellant, v. Thomas A. DeMONTE, Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (6th Circuit)

Page 343

25 F.3d 343

UNITED STATES of America, Plaintiff-Appellant, v. Thomas A. DeMONTE, Defendant-Appellee.

No. 92-3964.

United States Court of Appeals Sixth Circuit.

Argued April 30, 1993.

Decided June 2, 1994.

Rehearing and Suggestion for Rehearing En Banc Denied Aug. 25, 1994.

James E. Rattan, Asst. U.S. Atty. (argued), Dale E. Williams, Jr., Asst. U.S. Atty. (briefed), Office of the U.S. Atty., Columbus, OH, for plaintiff-appellant.

Michael J. Valentine (argued and briefed), Merullo, Reister & Swinford, Columbus, OH, for defendant-appellee.

Before: JONES and BATCHELDER, Circuit Judges; and CELEBREZZE, Senior Circuit Judge.

NATHANIEL R. JONES, Circuit Judge, delivered the opinion of the court. BATCHELDER, Circuit Judge (pp. 351-353), and CELEBREZZE, Senior Circuit Judge (pp. 353-356), delivered separate opinions concurring in part and dissenting in part.

NATHANIEL R. JONES, Circuit Judge.

Defendant-Appellee Thomas A. DeMonte pled guilty to computer fraud in violation of 18 U.S.C. Sec. 1030(a)(4). This is the government's second appeal of DeMonte's sentence. Under the federal sentencing guidelines, the district court calculated DeMonte's total offense level at 13, meaning he was subject to 12-18 months of imprisonment. The district court, however, departed downward, lowering DeMonte's base offense level seven levels (to six) and sentencing DeMonte, inter alia, to three years of probation and no term of imprisonment. As a basis for this departure, the district court cited the fact that DeMonte liquidated his assets to make restitution and the fact that he provided the government with information about previously undiscovered crimes he had committed. On appeal, the government portrays this sentence as an example of unwarranted judicial favoritism toward white-collar criminals. We affirm in part and reverse in part.

I. Facts

On March 7, 1991, a one-count Information was filed in the United States District Court for the Southern District of Ohio, charging DeMonte with a form of computer fraud, in violation of 18 U.S.C. Sec. 1030. ¹ At his arraignment on March 28, 1991, the district court accepted a Plea Agreement entered into by the government and DeMonte. ²

DeMonte appeared for sentencing on May 24, 1991. The district court did not sentence DeMonte at that time, but entered the following order:

[T]he court notes that from the presentence report that this defendant has unencumbered total assets of approximately $31,769. Before imposing sentence on this defendant the court directs this defendant to liquidate these assets and pay them over totally to the United States government before the court, and the court will give you two weeks to do that.

J.A. at 36. The district court continued the sentencing proceedings.

When DeMonte appeared for sentencing again on June 21, 1991, counsel for DeMonte informed the court that DeMonte had liquidated virtually all of his assets except the clothes he was wearing and $20 in his pocket. The government advised the court of DeMonte's willing and voluntary cooperation with the government, particularly that he had informed the government of about $30,000 that he had embezzled about which the government had not known. The government also told the court that, despite DeMonte's cooperation, it would not move for a downward departure. The district court continued the proceedings in order to consider the matter further.

On July 17, 1991, DeMonte again appeared for sentencing. The district court lowered DeMonte's total offense level from thirteen to six based on DeMonte's "extraordinary and unusual level of cooperation," and his making full restitution to the government to the extent possible. Id. at 42-43. Because of this departure, the guideline imprisonment range dropped from 12-18 months to 0-6 months. The district court imposed a sentence which did not include incarceration but which did include three years of probation.

The government appealed this sentence, and in United States v. DeMonte, No. 91-3775, 1992 WL 99454, 1992 U.S. App. LEXIS 11392 (6th Cir. May 12, 1992), we reversed the sentence on the ground that the district court did not clearly indicate whether or to what extent it believed DeMonte's conduct went beyond that contemplated in the plea agreement and that contemplated in Section 3E1.1 of the United States Sentencing Commission's Sentencing Guidelines [hereinafter U.S.S.G.], which provides a sentencing reduction for defendants who have accepted responsibility for their actions. Thus, on remand, we asked the district court to "clearly articulate the basis for any departure and for the reasonableness of the degree of departure." DeMonte, No. 91-3775, Slip Op. at 7.

On remand, the district court remained firm in its imposition of three years of probation and no term of imprisonment. In an Opinion and Order dated August 18, 1992, the district court explained that by liquidating virtually all of his assets in order to make restitution, Defendant's degree of restitution in the instant case, and the manner in which it was made, were so unusual that a downward departure was appropriate. J.A. at 19-20 (citing 18 U.S.C. Sec. 3553(b); U.S.S.G. Sec. 5K2.0). The court also pointed to Defendant's "extraordinary level of cooperation" as demonstrated by

providing the government with extensive information regarding crimes with which he was not even charged. Such crimes were unknown to both investigators and the United States Attorney's Office until disclosed by the Defendant. Further, by voluntarily disclosing this information, the Defendant willingly subjected himself to the possibility of more serious punishment. Thus, the Defendant's level of cooperation is also sufficiently unusual to warrant a downward departure.

Id. at 20.

The government again appeals DeMonte's sentence.

II. Discussion

Under 18 U.S.C. Sec. 3553(b),

The court shall impose a sentence ... within the range, referred to in subsection (a)(4) unless the court finds that there exists an aggravating or mitigating circumstance of a kind, or to a degree, not adequately taken into consideration by the Sentencing Commission in formulating the guidelines that should result in a sentence different from that described. In determining whether a circumstance was adequately taken into consideration, the court shall consider only the sentencing guidelines, policy statements, and official commentary of the Sentencing Commission.

This statement is echoed and augmented somewhat in U.S.S.G. Sec. 5K2.0:

Where ... the applicable offense guideline and adjustments do take into consideration a factor listed in this subpart, departure from the applicable guideline range is warranted only if the factor is present to a degree substantially in excess of that which ordinarily is involved in the offense.

In United States v. Brewer, 899 F.2d 503 (6th Cir.), cert. denied, 498 U.S. 844, 111 S.Ct. 127, 112 L.Ed.2d 95 (1990), we explained our standard for reviewing departures from the sentencing guidelines:

First, the reviewing court determines whether "the case is sufficiently 'unusual' to warrant departure." This is purely a question of law.

Second, we determine whether the circumstances, if conceptually proper, actually exist in the particular case. That assessment involves factfinding and the trier's determinations may be set aside only for clear error. See 18 U.S.C. Sec. 3742(d).

Third, once we have assured ourselves that the sentencing court considered circumstances appropriate to the departure equation and that those factors enjoyed adequate record support, the direction and degree of departure must, on appeal, be measured by a standard of reasonableness. 18 U.S.C. Sec. 3742(e)(2); et al.

Id. at 506 (quoting United States v. Diaz-Villafane, 874 F.2d 43, 49 (1st Cir.), cert. denied, 493 U.S. 862, 110 S.Ct. 177, 107 L.Ed.2d 133 (1989)); see also United States v. Joan, 883 F.2d 491, 494 (6th Cir.1989) (adopting three-part test enunciated in Diaz-Villafane ).

A. Restitution

DeMonte argues that his liquidating virtually all of his assets constitutes "conduct significantly differ[ent] from the norm." U.S.S.G. Ch.1, Pt.A(4)(b). Thus, in his view, the district court's departure passes muster under part one of the Brewer test. We disagree, and so we do not need to consider the second and third parts of the test.

We have acknowledged that voluntary restitutionary payments may constitute "exceptional circumstances" that justify a downward departure greater than that contemplated in Section 3E1.1. ³ See Brewer, 899 F.2d at 509 ("[T]he factor of restitution and remorse was considered under the guidelines, and the defendants' offense level was appropriately reduced by two levels. Unless the defendants have proved that their voluntary repayment of the embezzled funds constitutes an 'exceptional circumstance,' a downward departure based on this factor was not warranted."); see also United States v. Garlich, 951 F.2d 161, 163 (8th Cir.1991) ("A defendant's voluntary payment of restitution before adjudication of guilt is a factor to be considered in determining whether the defendant qualifies for a two-level reduction for acceptance of responsibility.... Although the district court gave [the defendant] this reduction, we conclude the district court should consider whether the extent and timing of [the defendant's] restitution are sufficiently unusual to warrant a downward departure."); United States v. Carey, 895 F.2d 318, 323 (7th Cir.1990). However, DeMonte's restitutionary payments upon liquidation of his assets were not made voluntarily before adjudication of guilt, but pursuant to a court order ⁴ and after adjudication of guilt. Further, what most impressed the court below was that DeMonte completely liquidated his assets for the purpose of making restitution within a few weeks, yet the court expressly demanded that DeMonte do so. Thus, any "special circumstances" in this case essentially derive from the district court's...