U.S. v. Hearrin, s. 89-1020

• Citation: 892 F.2d 756
• Decision Date: 03 January 1990
• Docket Number: 89-1132,Nos. 89-1020,s. 89-1020
• Parties: UNITED STATES of America, Appellee, v. Peggy J. HEARRIN, Appellant. UNITED STATES of America, Appellee, v. William H. HEARRIN, Jr. a/k/a Bill Hearrin, Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 756

892 F.2d 756

UNITED STATES of America, Appellee, v. Peggy J. HEARRIN, Appellant.

UNITED STATES of America, Appellee, v. William H. HEARRIN, Jr. a/k/a Bill Hearrin, Appellant.

Nos. 89-1020, 89-1132.

United States Court of Appeals Eighth Circuit.

Submitted Nov. 16, 1989.

Decided Jan. 3, 1990.

Michael Dwyer, St. Louis, Mo., for P. Hearrin.

Lynn Travis, Alton, Ill., for W. Hearrin.

Michael Fagan, St. Louis, Mo., for appellee.

Before JOHN R. GIBSON and FAGG, Circuit Judges and FLOYD R. GIBSON, Senior Circuit Judge.

JOHN R. GIBSON, Circuit Judge.

Peggy Hearrin and William H. Hearrin, Jr. pled guilty to conspiring to commit mail fraud in violation of 18 U.S.C. § 371 (1982) and were sentenced pursuant to the United States Sentencing Guidelines. The only issues in this appeal involve the application of the Guidelines. Both argue that the district court ¹ erroneously held, under section 2F1.1 of the Guidelines, that they had engaged in "more than minimal planning." Peggy Hearrin also asserts that the district court erred in concluding that the offense in question was part of a pattern of criminal conduct from which she derived a substantial portion of her income, as defined in section 4B1.3 of the Guidelines. We affirm the sentences imposed by the district court.

The parties entered into a Stipulation of Facts Relevant to Sentencing, which we recite in part. William Hearrin was employed as a Regional Sales Manager for Coca-Cola Foods. He and his wife, Peggy Hearrin, used a fictitious company name, Buy Rite, for the purpose of receiving fraudulent payments from Coca-Cola. They rented a post office box in Chesterfield, Missouri, in the name of Buy Rite. William Hearrin, with the assistance of his wife, then submitted to Coca-Cola fraudulent Promotion Payment Request forms and Unsaleable Product forms falsely indicating that Coca-Cola owed money to Buy Rite. The forms were mailed to Coca-Cola's Houston office, and Coca-Cola then mailed checks payable to Buy Rite to the post office box in Chesterfield. William Hearrin, with his wife's assistance, then either deposited the checks into a bank account which they had opened in Buy Rite's name, or otherwise negotiated the checks for personal expenditures. William Hearrin also fraudulently completed Performance Payment drafts payable to Buy Rite or other businesses and then negotiated these drafts on behalf of himself or his wife.

The Hearrins' fraudulent activity was extensive. Between October 5, 1987 and May 5, 1988, William Hearrin prepared at least fifty-one Performance Payment drafts, each in the amount of $500 or less. The Hearrins completed at least six Unsaleable Product forms between October 27, 1987 and December 4, 1987. They submitted at least eleven Promotion Payment Request forms between October 28, 1987 and February 29, 1988. Finally, they completed at least two Customer Adjustment Request forms between March 18, 1988 and April 15, 1988. All of these forms bore false and fraudulent information. Checks in the approximate amount of $129,404 were issued to Buy Rite during the period in question. It was stipulated that William Hearrin was the organizer or leader of the criminal activity and that Peggy Hearrin was a minor participant.

After the guilty pleas and during the sentencing process, both Hearrins objected to the application of Guideline section 2F1.1(b)(2), which increases the offense level by two levels if the offense involved more than minimal planning. At the sentencing hearing for William Hearrin, the court found that there was more than minimal planning because of the number of transactions involved. (Tr. Sentencing of William Hearrin, E.D.Mo., Dec. 9, 1988, at 20-21). In sentencing Peggy Hearrin, the court noted that the crime had extended over a period of eight months, and involved participation in many transactions and the renting of a post office box. Accordingly, the court concluded that she had engaged in more than minimal planning. (Tr. Sentencing of Peggy Hearrin, E.D.Mo., Dec. 9, 1988, at 7).

Peggy Hearrin also objected to the application of Guideline section 4B1.3, which requires a minimum offense level of thirteen, or eleven if acceptance of responsibility applies, if the offense was committed "as part of a pattern of criminal conduct engaged in as a livelihood." At the sentencing hearing, the court stated that her objection was not directed to the "substantial portion of income" provision of the section, see U.S.S.G. § 4B1.3, comment. (backg'd.), but rather identified her objection as challenging that there was no "pattern of criminal conduct." (Tr. Sentencing of Peggy Hearrin, E.D.Mo., Dec. 9, 1988, at 15, 18). After extensive argument by both counsel, the court concluded that the plain meaning of the words "pattern of criminal conduct" meant planned criminal acts occurring over a substantial period of time. ² The court then found that, although Peggy Hearrin did not have a history of criminal involvement over a long period of time other than this offense, this crime involved both planned criminal acts and a substantial time period of eight months. The court concluded that she had engaged in a pattern of criminal conduct. (Tr. Sentencing of Peggy Hearrin, E.D.Mo., Dec. 9, 1988, at 19-20).

Based upon these findings, the court sentenced William Hearrin to twenty-one months imprisonment and Peggy Hearrin to four months imprisonment.

I.

On appeal, Peggy and William Hearrin argue that they had not engaged in "more than minimal planning" and, therefore, section 2F1.1, dealing with offenses involving fraud or deceit, does not mandate an increase of two levels over the base offense level of six. The Guidelines define "more than minimal planning," in part, as follows:

"More than minimal planning" means more planning than is typical for commission of the offense in a simple form. "More than minimal planning" also exists if significant affirmative steps were taken to conceal the offense.

"More than minimal planning" is deemed present in any case involving repeated acts over a period of time, unless it is clear that each instance was purely opportune. Consequently, this adjustment will apply especially frequently in property offenses.

In an embezzlement, a single taking accomplished by a false book entry would constitute only minimal planning. On the other hand, creating purchase orders to, and invoices from, a dummy corporation for merchandise that was never delivered would constitute more than minimal planning, as would several instances of taking money, each accompanied by false entries.

U.S.S.G. § 1B1.1, comment. (n. 1(f)) (emphasis added).

In light of this definition and the record before the district court, the court did not err in its application of the "more than minimal planning" guideline. The facts in the stipulations fully satisfy the Guidelines' definition set forth above. Over an eight-month period, the Hearrins created a fictitious business name, opened both a post office box and a bank account in that name, and submitted fraudulent payment requests or completed fraudulent drafts resulting in seventy payments totalling approximately $129,404. While the Guidelines' illustration refers to embezzlement and not to mail fraud, the references to establishing a dummy corporation and obtaining money through false bookkeeping entries are certainly instructive in this case.

Despite these stipulations and the Guidelines' definition, the Hearrins argue that the court erred in finding more than minimal planning because the government failed to establish a benchmark against which to measure their conduct. They also argue that because mail fraud necessarily involves several acts and is never impulsive or unplanned, the court's reasoning leads to the inevitable conclusion that all mail fraud crimes will involve "more than minimal planning." Finally, they argue that the phrase "more than minimal planning" is inherently ambiguous and therefore, they are entitled to lenity in the court's interpretation of the Guidelines.

We are satisfied that the Guidelines themselves establish a benchmark for measuring the extent of the Hearrins' planning, as they define "more than minimal planning" as "more planning than is typical for commission of the offense in a simple form." Id. We do not believe that more in the nature of a benchmark or standard is required. The Hearrins' argument that mail...