U.S. v. Gilman

• Decision Date: 08 March 2007
• Docket Number: No. 06-1376.,06-1376.
• Citation: 478 F.3d 440
• Parties: UNITED STATES of America, Appellee, v. Thurston Gene GILMAN, Defendant, Appellant.
• Court: U.S. Court of Appeals — First Circuit

478 F.3d 440

UNITED STATES of America, Appellee, v. Thurston Gene GILMAN, Defendant, Appellant.

No. 06-1376.

United States Court of Appeals, First Circuit.

Heard January 9, 2007.

Decided March 8, 2007.

John J. Commisso, with whom Thomas M. Hoopes and Kelly, Libby & Hopes, P.C. were on brief, for appellant.

Victor A. Wild, Assistant United States Attorney, with whom Michael J. Sullivan, United States Attorney, and Cynthia A. Young, Assistant United States Attorney, were on brief, for the United States.

Before HOWARD, Circuit Judge, SELYA, Senior Circuit Judge, and SHADUR,^* Senior District Judge.

SHADUR, Senior District Judge.

Thurston Gene Gilman ("Gilman") challenges his criminal sentence, urging that the district court below committed multiple procedural errors by (1) placing too much weight on the advisory sentencing guidelines, (2) failing to explain adequately the reasons for the sentence imposed and (3) taking into account impermissible considerations as part of his sentencing decision. Gilman also argues that his sentence is unreasonably high in light of various mitigating circumstances.

We find all of Gilman's arguments unpersuasive save one two-part contention: that the district court (1) failed to provide an adequate explanation of its sentencing decision "in open court," as required by 18 U.S.C. § 3553(c), and (2) failed to particularize his reason for the specific sentence imposed, as required by 18 U.S.C. § 3553(c)(1).¹ Nonetheless, because Gilman forfeited those arguments in the court below, we are limited to plain-error review. And because Gilman cannot show that the error affected his substantial rights, we affirm the sentence imposed by the district court.

Background

On July 18, 2005 Gilman pleaded guilty to one count of willful violation of the Investment Advisers Act of 1940 in contravention of 15 U.S.C. §§ 80b-6 and 80b-17 and to 18 counts each of mail fraud and wire fraud in violation of 18 U.S.C. §§ 1341 and 1343 respectively. As recounted in the Presentence Investigation Report ("PSI") prepared by the Probation Office, the tale leading up to that guilty plea is a disheartening story of betrayal of personal relationships and trust that came to an end only after Gilman saw his house of cards collapsing beneath him and came clean via his plea.

Before he embarked on his criminal activities, Gilman had been an independent securities broker and investment advisor for more than 20 years, serving long-term clients with whom he developed close personal as well as professional relationships. Beginning in November 1998 and continuing until November 2003, Gilman abused his position and the trust that his clients placed in him by illegally and fraudulently diverting investors' funds from the domestic securities accounts that they believed they owned into two start-up ventures operated by Gilman. Gilman hid those actions from his clients by periodically issuing false account statements assuring them that their money was invested and appreciating as promised.

While it is unnecessary to detail the ins and outs of Gilman's scheme, it does bear mention that he went so far as to dragoon one of his sons into the plot, apparently contributing to that son's nervous breakdown and hospitalization in the summer of 2003. Gilman's start-ups—a software outfit and an Italian sunglasses distributor— did not work out as he had planned, and his unwitting investors' money was lost. Those losses, totaling more than $11 million, impacted retirement funds, college savings and estate plan assets of some 55 victims.

In November 2003, with the Securities and Exchange Commission ("SEC") investigating an unrelated but too-close-to-home issue with one of his other dealings, Gilman decided that the jig was up. Though it was still possible that the SEC would not discover his fraud, Gilman had his lawyer communicate with the United States Attorney's Office in Boston to self-report the crime and cooperate with the government in uncovering the extent of his misdealing. Hoping that the government would spare any prosecution of his son (which it did), Gilman cooperated with the investigation and provided extensive information that assisted the government in fully exposing his complex scheme and identifying all of the deceived victims. Without the benefit of a plea bargain, Gilman then entered a straight plea of guilty to all of his crimes.

We arrive now at the critical scene for this appeal: Gilman's sentencing hearing in January 2006. Using the 2005 Sentencing Guidelines Manual ("Manual") and information reported in the PSI, the district court calculated Gilman's base offense level as 7 (Guideline § 2B1.1(a)(1)) and added 20 levels for the over $11 million in resulting losses (Guideline § 2B1.1(b)(1)(K)), 4 levels for the 55 victims involved (Guideline § 2B1.1(b)(2)(B)), 2 levels for the sophisticated means used in the offense (Guideline § 2B1.1(b)(9)(C)), 4 levels for the violation of securities law by a registered investment advisor (Guideline § 2B1.1(b)(15)(A)(iii)) and 2 levels for being an organizer, leader, manager or supervisor of criminal activity with fewer than five culpable participants (Guideline § 3B1.1(c)). After a 3-level reduction for Gilman's acceptance of responsibility and his early guilty plea (Guideline § 3E1.1(a)-(b)), the district court reached a net offense level of 36. That, together with Gilman's criminal history category I, produced a guideline range of 188 to 235 months. Gilman did not object to any of those calculations.²

After hearing from several victims of Gilman's scheme and listening to Gilman's arguments for departure and mitigation, the district court pronounced sentence. Addressing Gilman, the court said that after hearing the victims' statements it was moved to think about the harm caused by Gilman's fraud—the loss of planned retirements, college savings and savings for health needs as well as the frustration of inheritance plans—as compared to the harm caused by some of the drug crimes, committed by individuals from difficult backgrounds, for which it regularly handed down long prison sentences. Next the court addressed Congress' growing concern with economic crimes since 2000 and spoke of the abuse of personal and professional trust at the root of Gilman's deceit.

At that point the court likened Gilman's requested sentence to the "worst day" that the court had ever had on the bench, a case in which the court had felt compelled by the then-mandatory sentencing guidelines to hand down a harsh 204 month sentence for a man convicted of burning down his own convenience store to collect the insurance money. In closing, the district court said that it was primarily moved by the stories of lives "shattered" by Gilman's crime, and it imposed the selfsame 204 month sentence—one that was in the middle of the established guideline range.

Challenges to the Sentencing Procedure

Gilman first brings a multifaceted challenge to the sentencing procedure followed by the district court. We review de novo such legal challenges to sentencing procedure (United States v. Rivera, 448 F.3d 82, 84 (1st Cir.2006)). But when a defendant has failed to raise such an objection below, we treat the issue as forfeited and hence as reviewable only for plain error (United States v. Turbides-Leonardo, 468 F.3d 34, 38 (1st Cir.2006)). To establish plain error an appellant bears the burden of showing (United States v. Duarte, 246 F.3d 56, 60 (1st Cir.2001)):

(1) that an error occurred (2) which was clear or obvious and which not only (3) affected the defendant's substantial rights, but also (4) seriously impaired the fairness, integrity, or public reputation of judicial proceedings.

Since the Supreme Court decided United States v. Booker, 543 U.S. 220, 125 S.Ct. 738, 160 L.Ed.2d 621 (2005), we have had several occasions to set forth a proper sentencing procedure to be followed by district courts-most definitively in our en banc decision in United States v. Jiménez-Beltre, 440 F.3d 514, 518-19 (1 st Cir. 2006). Even though Booker decreed the sentencing guidelines to be only advisory, the guidelines still play an important role in the sentencing procedure, so that (as was done here) a court should ordinarily begin by calculating the applicable guideline range (id. at 518). Once that now-advisory range is established, the court must evaluate the factors set out in Section 3553(a) to consider whether to exercise its discretion to impose a non-guideline sentence (United States v. Thurston, 456 F.3d 211, 215 (1st Cir.2006)). Finally, and no less important, the court must provide a detailed, case-specific explanation for imposing the chosen sentence (id.).

Gilman's first challenge to the procedure followed in this case—his argument that the district court placed too much weight on the guidelines, effectively treating them as mandatory—may be set aside quickly. On that score Gilman seeks support in such indicia as (1) the court's use of the word "departure" and not "mitigation," (2) the court's emphasis on the policies it saw behind the stiffer guideline ranges for economic crimes that took effect in November 2003 and (3) the court's failure to state in so many words that it was treating the guidelines as advisory under Booker.

That compound contention does not hold water in any respect. While the district court did not state for the record that it was treating the guidelines as advisory, it is clear from the sentencing transcript that everyone recognized that to be true. Thus Gilman's attorney expressly asked for departure or for Section 3553(a) mitigation, and the court itself just as specifically asked the government to respond to the question whether it should not impose a guideline sentence at all. Moreover, given the continuing importance of the guidelines as a means for bringing the policy decisions of the Sentencing Commission into the sentencing process, the court's measured deference to the policies behind...