U.S. v. Harmon

• Decision Date: 12 May 2005
• Docket Number: No. 03-1925.,03-1925.
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Robert Lee HARMON, also known as Rashad Harmon, also known as Bobby Harmon, Defendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

409 F.3d 701

UNITED STATES of America, Plaintiff-Appellee, v. Robert Lee HARMON, also known as Rashad Harmon, also known as Bobby Harmon, Defendant-Appellant.

No. 03-1925.

United States Court of Appeals, Sixth Circuit.

Argued: December 7, 2004.

Decided and Filed: May 12, 2005.

ARGUED: Jonathan Epstein, Federal Public Defenders Office, Detroit, Michigan for Appellant. Kathleen Moro Nesi, Assistant United States Attorney, Detroit, Michigan, for Appellee. ON BRIEF: Jonathan Epstein, Federal Public Defenders Office, Detroit, Michigan, for Appellant. Kathleen Moro Nesi, Assistant United States Attorney, Detroit, Michigan, for Appellee.

Before: NELSON and BATCHELDER, Circuit Judges; COLLIER, District Judge.^*

OPINION

DAVID A. NELSON, Circuit Judge.

The defendant in this sentencing guidelines case admitted to having defrauded investors of more than $640,000. Indicted for wire fraud (18 U.S.C. § 1343), engaging in monetary transactions in criminally derived property (18 U.S.C. § 1957), and transporting stolen monies (18 U.S.C. § 2314), he pleaded guilty to one of the indictment's two § 1957 "monetary transaction" counts. The remaining counts were dismissed.

The count to which the defendant pleaded guilty charged him with having violated § 1957 by engaging in a $39,000 transaction in criminally derived property. The other § 1957 count charged him with engaging in a $50,000 transaction, for a total of $89,000 in monetary transactions involving criminally derived property.

Under the version of U.S.S.G. § 2S1.2 (the § 1957 "monetary transaction" guideline) that was in effect at the time of the crime, the defendant's guideline offense level depended on "the value of the funds" involved. The prosecutor urged the district court to use that version of § 2S1.2 rather than the version in effect at the time of sentencing. The prosecutor further took the position that the value of the funds relevant in determining the sentence for the § 1957 violation should be measured by the portion of criminally derived property that the defendant was charged with having transferred in violation of § 1957. Under the prosecutor's approach, the defendant's guideline sentence range was imprisonment for 24-30 months. If "the value of the funds" was the full amount of which the investors had been defrauded, on the other hand, the range was higher. The defendant, not surprisingly, agreed with the prosecutor that the correct range was 24-30 months.

The district court concluded that the prosecutor and the defendant had it wrong. Under both editions of the Guidelines Manual, the "Relevant Conduct" guideline (U.S.S.G. § 1B1.3) said that under certain conditions a defendant's "specific offense characteristics" should be determined on the basis of all of the defendant's acts "that were part of the same course of conduct or common scheme or plan as the offense of conviction." U.S.S.G. § 1B1.3(a)(2). Applying that section, the district court held that the guideline range was 37-46 months. The defendant was sentenced to a term of 37 months, and he has appealed his sentence.

We conclude that the approach followed by the district court, using the edition of the manual in effect at the time of sentencing, should have yielded a sentence range of either 24-30 months or 30-37 months. If the latter, we agree with the prosecutor and the defendant that the court was required to use the earlier edition of the manual. Under the earlier edition, as we read it, the guideline for § 1957 violations required that the defendant's offense level be determined by reference to the $89,000 which the defendant was accused of having transferred in violation of § 1957. The correct guideline range, in our view, was thus 24-30 months. For that reason, and because we now know that the sentence was tainted by plain error under United States v. Booker, ___ U.S. ___, 125 S.Ct. 738, 160 L.Ed.2d 621 (2005), the case will be remanded for resentencing.

Although the guidelines are no longer to be treated as mandatory, see Booker, 125 S.Ct. at 764-65, they must still be given consideration by the sentencing court. This means that when the defendant is resentenced, the district court should take into consideration the fact that the guidelines would suggest a sentence of not less than 24 months and not more than 30 months. The court should also give appropriate consideration to the statutory factors that have always been relevant under the Sentencing Reform Act of 1984, see 18 U.S.C. § 3553(a), and the court should impose a sentence that is reasonable under the circumstances. We intimate no opinion as to whether a sentence equal to that imposed originally would be reasonable.

I

The defendant, Robert Lee Harmon, ran a company called Harmony Entertainment. Harmony's ostensible business consisted of promoting concerts and tours by popular musicians.

Although Harmony staged a few small (and apparently unprofitable) concerts, it took in substantial sums of money from investors who were promised large returns from performances by well known artists whom Harmony did not, in fact, represent. In July of 2000, for example, an investor was persuaded to wire $300,000 from Australia to Harmony's Merrill Lynch account in Michigan on the strength of representations that the funds would be used to promote a concert tour by Britney Spears, a prominent singer. The funds were not in fact used for that purpose, Harmony evidently having had no connection whatever with Britney Spears.

An indictment handed up by a federal grand jury in May of 2002 charged Mr. Harmon and two associates with 29 counts of wire fraud and aiding and abetting wire fraud; two counts of engaging in, and aiding and abetting one another in, monetary transactions in criminally derived property; and one count (limited to Mr. Harmon and one of the other defendants) of transporting in interstate commerce money known to have been obtained by fraud.

As to the "monetary transaction" offenses, Count 30 of the indictment, after realleging and incorporating by reference the indictment's "General Allegations" regarding the scheme to defraud, alleged that on or about July 12, 2000, the defendants

"caused funds in the amount of $39,000 to be transferred from the account of Harmony Entertainment with Merrill Lynch and deposited into the Sun Trust Bank in Alexandria Virginia, a financial institution which was engaged in, and the activities of which[ ] affected interstate commerce, which money the defendants knew to be criminally derived property and which constituted and was derived from the proceeds obtained from the commission of wire fraud in violation of 18 U.S.C. § 1343; all in violation of 18 U.S.C. §§ 2, 1343 and 1957."

Count 31 contained similar allegations with respect to a $50,000 transfer from Harmony's Merrill Lynch account to the account of Judy White Evans (the wife of one of Mr. Harmon's co-defendants) at Comerica Bank in Detroit.

The case was scheduled to go to trial on Monday, January 27, 2003. On the morning of the appointed day the district court was advised that Mr. Harmon wished to plead guilty to Count 30 of the indictment. The Assistant United States Attorney in charge of the prosecution explained that he had been approached the preceding Friday afternoon about a potential plea; that although there was no Rule 11 plea agreement, the parties had "formalized" an unwritten agreement with respect to Count 30 earlier that morning; and that if Mr. Harmon, on pleading guilty to Count 30, were to receive a two-level reduction in his offense level for acceptance of responsibility, the guideline sentence range, as the prosecutor calculated it, would be imprisonment for a term of 24 to 30 months.

Before the court accepted the plea, Mr. Harmon was advised of the rights he would be giving up if he pleaded guilty. The court told him that if he received the two-level reduction for acceptance of responsibility, "[i]t appears that you're going to get somewhere around ... 24 to 30 months." The court indicated, however, that it would follow the guidelines wherever they led and added that "[t]here's no promise to you that 24 months or 30 months is going to be your maximum." The court went on to make it "absolutely clear ... [that] there is no agreement here. We're not talking about any kind of agreements except for the Court to follow the guidelines, however that comes out." Mr. Harmony acknowledged that he understood this.

Called upon to outline "what we are talking about" with respect to Count 30, the prosecutor explained that Mr. Harmon's company, Harmony Entertainment, had represented to an investor named Dr. Sam Chachoua that the company was in a position to promote a series of Britney Spears concerts; that acting on the representations made to him, Dr. Chachoua had wired $300,000 from out of the country to Harmony's account at the Merrill Lynch office in Bloomfield Hills, Michigan; that from the $300,000, Mr. Harmon had caused the transfer of $39,000 to his wife's account at a bank in Richmond, Virginia; and that Harmon had then applied the $39,000 to the purchase of a Range Rover vehicle.

Mr. Harmon acknowledged in open court that he wished to plead guilty to this charge. Testifying under oath, he further stated that he had knowingly wired to his wife's account $39,000 in funds he had fraudulently obtained from Dr. Chachoua; that although he knew Dr. Chachoua had wired $300,000 to the Harmony account in reliance on representations that Harmony had contracts to promote a series of Britney Spears concerts, Harmony had no contract for a Britney Spears appearance; and that with the $39,000 he took from Dr. Chachoua's $300,000, he purchased a used 1997 Range Rover. The court accepted the plea and entered a judgment of guilty. Sentencing was set for a later date.

The trial of Mr. Harmon's co-defendants apparently went forward as scheduled. Mr. Harmon was not called as a witness, and the co-defendants were acquitted.

Before Mr....