U.S. v. Grimes

• Court: U.S. Court of Appeals — Seventh Circuit
• Writing for the Court: Before POSNER, Chief Judge, and FLAUM and RIPPLE; POSNER
• Citation: U.S. v. Grimes, 173 F.3d 634 (7th Cir. 1999)
• Decision Date: 19 April 1999
• Docket Number: No. 98-1828,98-1828
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Paul J. GRIMES, Defendant-Appellant.

Page 634

173 F.3d 634

UNITED STATES of America, Plaintiff-Appellee, v. Paul J. GRIMES, Defendant-Appellant.

No. 98-1828.

United States Court of Appeals Seventh Circuit.

Argued Jan. 22, 1999.

Decided April 19, 1999.

Valerie Turner (argued), Office of the United States Attorney, Criminal Division, Chicago, IL, for Plaintiff-Appellee.

Joshua Sachs (argued), Sachs & Drake, Morton Grove, IL, for Defendant-Appellant.

Before POSNER, Chief Judge, and FLAUM and RIPPLE, Circuit Judges.

POSNER, Chief Judge.

The defendant, Paul Grimes, was convicted of violating 18 U.S.C. §§ 1341 (mail fraud) and 1342 (use of false name or address in connection with mail fraud), and was sentenced to 63 months in prison, fined $125,000, and ordered to pay restitution to his victims of $500,000. His appeal presents three issues. The first is whether the district judge erred in refusing to order a psychiatric evaluation. Grimes had pleaded guilty, and was awaiting sentencing, when he jettisoned the lawyer who had negotiated the plea agreement and moved to set aside his guilty plea. The district judge appointed a new lawyer for him, who asked the judge to order a psychiatric evaluation on the grounds that Grimes was seeing a psychiatrist and taking an antidepressant drug for depression and that he appeared to be "somewhat paranoid" about his lawyers and to have an "attention deficit disorder." The judge turned down the motion, remarking that "whatever psychological problems [Grimes] has are indeed [as the government had argued in opposing the motion] shared by a significant percentage of the population, and the manifestation[s] of those problems in his case do not appear to be particularly severe." The judge concluded that having had a chance to observe Grimes in action (notably when the judge accepted the guilty plea), he was satisfied that Grimes "understands the proceedings."

An evidentiary hearing on a defendant's competence to participate in the proceedings against him is required if there is "reasonable cause to believe that the defendant may presently be suffering from a mental disease or defect rendering him mentally incompetent to the extent that he is unable to understand the nature and consequences of the proceedings against him or to assist properly in his defense." 18 U.S.C. § 4241(a); United States v. Graves, 98 F.3d 258, 261-62 (7th Cir.1996); United States v. Collins, 949 F.2d 921, 924 (7th Cir.1991); United States v. Leggett, 162 F.3d 237, 241-45 (3d Cir.1998); United States v. Sovie, 122 F.3d 122, 128 (2d Cir.1997). If this standard is satisfied, the district judge may order a psychiatric evaluation of the defendant. 18 U.S.C. § 4241(b); United States v. O'Neal, 969 F.2d 512, 514 (7th Cir.1992). In requesting such an evaluation, Grimes's lawyer was in effect requesting an evidentiary hearing.

The only proceedings that remained to be conducted in the district court, and so the only proceedings to which such a hearing would be relevant, involved the motion to withdraw the plea of guilty, and, if that was denied, the sentencing hearing. Having engaged in the usual colloquy with Grimes before accepting the plea of guilty, the judge had had an opportunity to make at least a rough assessment of Grimes's capacity to participate in the remaining proceedings. That kind of informal, on the spot assessment is recognized to be an appropriate step toward determining whether there is reasonable cause to conduct an evidentiary hearing--and often it is the only step necessary. United States v. Graves, supra, 98 F.3d at 261. But if, as in Graves, the defendant's deportment before the judge, or other evidence, indicates that the defendant may be incompetent, a hearing is necessary.

We are using "evidence" loosely; the issue is whether evidence must be taken; anything that points to the need for evidence is admissible to help the judge decide whether reasonable cause for an evidentiary hearing exists. Drope v. Missouri, 420 U.S. 162, 180, 95 S.Ct. 896, 43 L.Ed.2d 103 (1975); United States v. Collins, supra, 949 F.2d at 924, 927; United States v. Sovie, supra, 122 F.3d at 128; United States v. George, 85 F.3d 1433, 1438 (9th Cir.1996). Representations by the defendant's lawyer that he has observed crazy or bizarre behavior by his client, or records showing that the defendant has been diagnosed with a severe psychiatric illness, can suffice. United States v. Renfroe, 825 F.2d 763, 767 (3d Cir.1987); United States v. Pellerito, 878 F.2d 1535, 1545 (1st Cir.1989); United States v. Auen, 846 F.2d 872, 878 (2d Cir.1988). But we do not have anything like that here. As the district judge said, the representations by Grimes's new lawyer showed only that Grimes has the kind of mild psychiatric disturbance that afflicts a substantial fraction of the population. He sees a psychiatrist; he is depressed but taking Prozac, the antidepressant medicine, and so far as appears his depression is under control; he is suspicious of his lawyers (nothing unusual about that!); and he has trouble concentrating. These symptoms fall short of creating reasonable cause for thinking that Grimes was incompetent to follow the proceedings in his case. Eddmonds v. Peters, 93 F.3d 1307, 1314 (7th Cir.1996); United States v. Davis, 61 F.3d 291, 304 (5th Cir.1995). About 18 million Americans suffer from depression and almost 7 million of them are on Prozac. Joannie M. Schrof & Stacey Schultz, "Melancholy Nation: Depression Is on the Rise Despite Prozac. But New Drugs Could Offer Help," U.S. News & World Report, March 8, 1999, p. 56; 1999 World Almanac & Book of Facts 885 (1999).

Particularly telling is the defendant's failure to substantiate the allegations made in the motion, when this could so easily have been done were there any substance to them. Grimes is seeing a psychiatrist. He is taking antidepressant drugs, which are prescription medicines that must have been prescribed by the psychiatrist or some other physician. Grimes's lawyer could have asked the psychiatrist for a letter or affidavit indicating the nature and severity of Grimes's psychiatric condition. The absence of such a document supports the inference reasonably drawn by the judge from his own observations and from the motion itself that the defendant's condition is not severe.

The appeal also challenges the sentence. The judge decided to enhance Grimes's sentence because his victims were particularly vulnerable to the scheme to defraud. U.S.S.G. § 3A1.1(b). (U.S.S.G. § 3A1.1(b)(2), which prescribes an additional enhancement when there were many vulnerable victims of the defendant's crime, was not yet in effect when Grimes was sentenced.) To evaluate the judge's action we must describe the scheme (actually schemes, if the relevant conduct that was taken into account in sentencing is included, but we can ignore that detail). It belongs to the common fraud genre known as the "advance fee loan" fraud. United States v. Stafford, 136 F.3d 1109, 1111 (7th Cir.1998); United States v. Page, 69 F.3d 482 (11th Cir.1995); cf. United States v. Patasnik, 89 F.3d 63, 66-67 (2d Cir.1996). Grimes placed advertisements in newspapers of general circulation offering unsecured loans of up to $50,000. The advertisement said "Bad credit and bankruptcy okay" and "No collateral, no cosigners." A toll-free number was listed and when a potential applicant called, Grimes or an employee would inform the applicant that he had been pre-approved for a loan and would then send him an application form which repeated that the loan had been approved and directed him to fill in and return the form together with an application fee, usually of $198. Grimes did not make, or arrange for, any loans; he merely pocketed the fees.

The "vulnerable victim" sentencing enhancement is intended to reflect the fact that some potential crime victims have a lower than average ability to protect themselves from the criminal. Because criminals incur reduced risks and costs in victimizing such people, a higher than average punishment is necessary to deter the crimes against them. United States v. Lallemand, 989 F.2d 936, 940 (7th Cir.1993); United States v. White, 903 F.2d 457, 463 (7th Cir.1990); United States v. O'Neil, 118 F.3d 65, 75 (2d Cir.1997); United States v. Gill, 99 F.3d 484, 486 (1st Cir.1996); United States v. Blake, 81 F.3d 498, 504 (4th Cir.1996). Fraud illustrates the need for the enhancement, as recognized in United States v. Page, supra, 69 F.3d at 489, a case quite like this one; see also United States v. Holmes, 60 F.3d 1134, 1137 (4th Cir.1995); United States v. Peters, 962 F.2d 1410, 1415-18 (9th Cir.1992). Defrauders who direct their activities not against banks, insurance companies, or large investors, but instead against people who because of mental or educational deficiencies or financial desperation are suckers for offers of easy money, do not need to take as many precautions against the discovery of their scheme by the intended victims and in any event are less likely to be prosecuted, because the victims are less likely to know that they have been defrauded or if they know to have the know-how and initiative required to press a criminal complaint or bring a civil suit. This describes the intended victims of Grimes's scheme. Only a very unsophisticated person would think that although he had bad credit he could borrow a substantial sum of money without having to put up security or any other guaranty of repayment (such as an accommodation note). Or that the loan would be approved before he furnished any evidence of his likely ability to repay it. Only a desperate person, unable to obtain credit by a normal route, would plunk down a nonrefundable $198 for the right just to apply for a loan. Such people are rightly regarded as unusually vulnerable.

Grimes advertised in newspapers of general circulation and therefore had no control over the vulnerability of the persons who responded. But the method by which a fraud is...