U.S. v. Hall

• Decision Date: 12 December 1995
• Docket Number: No. 95-5314,95-5314
• Citation: 71 F.3d 569
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Susan S. HALL, Defendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 569

71 F.3d 569

UNITED STATES of America, Plaintiff-Appellee, v. Susan S. HALL, Defendant-Appellant.

No. 95-5314.

United States Court of Appeals, Sixth Circuit.

Argued Oct. 12, 1995.

Decided Dec. 12, 1995.

Hugh B. Ward, Jr. (argued and briefed), Office of U.S. Atty., Knoxville, TN, for plaintiff-appellee.

Leah J. Prewitt (argued and briefed), Federal Defender Services, Knoxville, TN, for defendant-appellant.

Before: MERRITT, Chief Judge; DAUGHTREY and OAKES, ^* Circuit Judges.

MERRITT, Chief Judge.

Defendant, Susan Hall, appeals from the sentence imposed by the District Court after her plea of guilty to conspiracy to commit bank fraud, bank fraud in several jurisdictions, and related firearm violations. She challenges the District Court's application of two provisions of the Sentencing Guidelines, its failure to depart downward from the Guidelines, and the amount of restitution ordered.

Defendant claims that (1) the District Court improperly assessed a two-point increase in the offense level under United States Sentencing Commission, Guidelines Manual, Sec. 2F1.1(b)(4) (Nov.1994) for "conscious or reckless risk of serious bodily injury"; (2) that the court incorrectly assessed additional criminal history points for previous "worthless check" convictions even though they are not "similar" to bank fraud for the purposes of U.S.S.G. Sec. 4A1.2(c)(1)(B); and (3) that the court failed to recognize Defendant's overwhelming evidence of coercion as a permissible basis for downward departure. We agree with Defendant on these claims and therefore REVERSE and REMAND to the District Court for resentencing in accordance with this opinion.

Defendant also contends that the court should not have ordered restitution under 18 U.S.C. Sec. 3664 (1988) given Defendant's financial position and earning potential. For the reasons set forth below, we AFFIRM the District Court's order of restitution.

I. FACTS

From January through June of 1994, Defendant Susan Hall and her husband, Kenneth Hall, committed bank fraud in several southern states, using false names and identification to open bank accounts and depositing worthless checks from other accounts while withdrawing cash for their personal use. The amount of the fraud totalled over $122,000.

In June, 1994, while attempting to open an account in Greeneville, Tennessee under the name "Jeanette Ellis," Defendant was discovered by a bank employee who notified the police. Defendant returned to her hotel, collected her belongings, and left in a van driven by Mr. Hall. They lead the police on a lengthy high-speed chase, which ended in a crash injuring the Defendant. She pled guilty to bank fraud, conspiracy to commit bank fraud, and a number of firearm violations and was sentenced to forty-six months of imprisonment to run concurrently with forty-six months for other counts and five years of supervised release; she was ordered to pay a $500.00 fine and $27,500 in restitution.

The record indicates that the Defendant has significant emotional problems and a history of drug and alcohol abuse associated with her experience of sexual and emotional abuse as a child. J.A. at 87. She also appears to have suffered serious physical and emotional abuse at the hands of Mr. Hall. Her reports of violence and gun-threats by Mr. Hall were corroborated by him in letters he wrote to her from prison. J.A. at 89.

The Bureau of Prisons, summarizing Ms. Hall's background in its forensic evaluation, described Mr. Hall's treatment of the Defendant as follows This progression of charm, beatings, gun threats, and threats of abandonment appears to have been a calculated method of controlling Ms. Hall. For her part, Ms. Hall seems to have believed compliance with her husband's demands was her only reliable means of exercising control and gaining predictability in her life.

J.A. at 99. It would not be unreasonable to conclude that her husband beat and cajoled her into submission to his will. A separate psychological evaluation of the Defendant describes her as suffering from "post traumatic stress disorder" and, in particular, "Battered Person Syndrome." J.A. at 87.

II. ANALYSIS

A. Two-level increase under U.S.S.G. Sec. 2F1.1(b)(4)

Defendant claims that the District Court erred in assessing a two-point increase in offense level under U.S.S.G. Sec. 2F1.1(b)(4). That section of the Guidelines, which covers "Offenses Involving Fraud or Deceit," provides a two-level increase "[i]f the offense involved the conscious or reckless risk of serious bodily injury." The provision falls in the section for "offense conduct" under the heading "specific offense characteristics." Defendant contends that this provision was meant to apply only where the risk of bodily injury results from the fraud itself and not from events that happen while fleeing from the crime. For three reasons, we agree.

First, in all of the cases interpreting this guideline provision, the fraudulent conduct itself created the risk of serious bodily injury. For example in United States v. Mizrachi, 48 F.3d 651 (2nd Cir.1995), the defendant's fraud consisted of buying and insuring a building and then committing arson to collect the proceeds. The risk of injury from the arson was considered part and parcel of the scheme to defraud. In United States v. Echevarria, 33 F.3d 175 (2d Cir.1994), the defendant's fraud consisted of passing himself off as a licensed physician and practicing medicine; the risk of bodily harm proceeded directly from the fraudulent practice of medicine. Similarly, in United States v. Laughlin, 26 F.3d 1523 (10th Cir.), cert. denied, --- U.S. ----, 115 S.Ct. 428, 130 L.Ed.2d 342 (1994), the defendant physician performed unnecessary surgery to collect Medicaid payments, again the risk of bodily injury proceeding from the fraudulent scheme itself. See also United States v. Hoffman, 9 F.3d 49 (8th Cir.), cert. denied, --- U.S. ----, 114 S.Ct. 1320, 127 L.Ed.2d 669 (1994) (defendant arranged slow-speed accidents, feigned injury, and submitted fraudulent insurance claims for medical bills and lost wages). The Government could cite no cases, and indeed we have found none, where the provision was applied to the risk of injury created in fleeing from the crime.

Second, the relevant legislative history suggests that Defendant's reading of the provision is correct. Section 2F1.1(b)(4) was added to the Guidelines after Congress directed the following:

[T]he United States Sentencing Commission shall promulgate guidelines, to provide for appropriate penalty enhancements, where conscious or reckless risk of serious personal injury resulting from the fraud has occurred. The Commission shall consider the appropriateness of assigning to such a defendant an offense level under Chapter Two of the sentencing guidelines that is at least two levels greater than the level that would have been assigned had conscious or reckless risk of serious personal injury not resulted from the fraud.

18 U.S.C.A. Sec. 1031 (Supp.1995), historical and statutory notes (emphasis added).

Finally, a different provision, U.S.S.G. Sec. 3C1.2, penalizes "Reckless Endangerment During Flight" and appears to be more suited to the present circumstances. Section 3C1.2, which falls under the heading of Adjustments for Obstruction of Justice, provides this two-level increase: "If the defendant recklessly created a substantial risk of death or bodily injury to another person in the course of fleeing from a law enforcement officer ..." Thus, Sec. 3C1.2 is the provision which contemplates the type of facts at issue here.

Even more problematic than the District Court's interpretation of Sec. 2F1.1(b)(4) is the manner in which it applied that provision to this defendant. As ordinarily happens in a sentencing case, the probation officer outlined its factual findings and suggested guidelines application in its presentence report. The District Court then adopted the recommendations of the presentence report in its judgment. In this case, however, the guideline application and supporting reasoning found in the presentence report were wrong. Unable to apply Sec. 2F1.1(b)(4) directly to the Defendant, the presentence report applied the two-level increase using Sec. 1B1.3, a "relevant conduct" provision which provides for offense level increases based on a co-conspirator's foreseeable behavior. The report noted that the "defendant was not the driver of the motor vehicle," but that she was a "willing participant in the attempt to evade arrest." J.A. at 123. It is improper, however, to attempt to expand Sec. 2F1.1 through Sec. 1B1.3 in this manner. The upward adjustment permitted by Sec. 2F1.1(b)(4) serves a specific and limited purpose, to punish those whose fraudulent behavior directly causes the risk of serious bodily injury. That purpose is not served here. "Relevant conduct" under Sec. 1B1.3 is a distinct concept and should not be used to broaden enhancements such as this one designed for a specific limited purpose. The presentence report improperly attempted to bootstrap an adjustment under Sec. 2F1.1 using Sec. 1B1.3, and the District Court erred by adopting this mistake in its judgment.

On remand, the District Court may consider whether Sec. 3C1.2 should have been applied instead of Sec. 2F1.1(b)(4). It should be noted, however, that the presentence report in this case seems to have rejected the applicability of Sec. 3C1.2, saying that there was "no information that the defendant impeded or obstructed justice" and that "the defendant was not driving the vehicle." J.A. at 122. It also appears that the Defendant herself was the only person actually injured in the chase. Furthermore, at least one court has held that to apply Sec. 3C1.2 to a co-defendant, she must aid or abet, counsel, command, induce, procure or willfully cause the risk of injury; the "reasonable foreseeability" of a reckless getaway is not enough. See United States v. Lipsey, 62 F.3d 1134, 1136 (9th Cir.19...