U.S. v. Hershberger, 90-3150

• Decision Date: 06 May 1992
• Docket Number: No. 90-3150,90-3150
• Citation: 962 F.2d 1548
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. James W. HERSHBERGER, Defendant-Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1548

962 F.2d 1548

UNITED STATES of America, Plaintiff-Appellee, v. James W. HERSHBERGER, Defendant-Appellant.

No. 90-3150.

United States Court of Appeals Tenth Circuit.

May 6, 1992.

Michael S. Holland, Russell, Kan., for defendant-appellant.

Richard L. Hathaway, Asst. U.S. Atty. (Lee Thompson, U.S. Atty., with him on the brief), Topeka, Kan., for plaintiff-appellee.

Before BALDOCK and BARRETT, Circuit Judges and DAUGHERTY, District Judge ^*.

DAUGHERTY, Senior District Judge. ^*

James W. Hershberger appeals his sentences resulting from his convictions on 25 counts of fraud perpetrated by Hershberger on numerous financial institutions and investors who provided capital to a corporation which he controlled and managed. Twenty of the 25 counts were sentenced under pre-Sentencing Guideline law, while the sentences on the remaining five counts were imposed pursuant to the dictates of the United States Sentencing Guidelines. Appellant Hershberger was given concurrent sentences of five years on each of the pre-Guideline counts and 57-month concurrent sentences on each of the Guideline counts, with the pre-Guideline and post-Guideline sentences to be served consecutively. Hershberger was also sentenced to three years supervised probation upon his release from confinement.

In this Appeal, Appellant Hershberger contends that the district court violated Rule 32(c)(3)(D) of the Federal Rules of Criminal Procedure by failing to conduct an adversary hearing to ascertain with reasonable certainty the monetary losses caused by Hershberger's conduct which related to the five Guideline counts. Appellant Hershberger also contends that the district court erred in imposing consecutive sentences on Hershberger without notice and hearing, contending that such consecutive sentences represent an upward departure from the applicable Sentencing Guidelines.

In reviewing a question of the interpretation and application of the Sentencing Guidelines, a de novo standard of review is applied. United States v. Tisdale, 921 F.2d 1095, 1100 (10th Cir.1990). Factual determinations are reviewed under the clearly erroneous standard. United States v. Banashefski, 928 F.2d 349, 351 (10th Cir.1991); United States v. Rutter, 897 F.2d 1558, 1566 (10th Cir.), cert denied, --- U.S. ----, 111 S.Ct. 88, 112 L.Ed.2d 60 (1990).

Because this appeal concerns sentencing issues only, it is unnecessary to recite the complicated facts of this case in detail. Suffice it to say that Defendant-Appellant Hershberger was charged in the indictment with 37 counts of fraud, among them mail fraud, bank fraud and transportation of stolen goods and securities. Hershberger's trial began on January 9, 1990, and verdicts were reached on February 21, 1990. Hershberger was either acquitted or the jury could not reach agreement on 12 of the counts, and he was convicted on the remaining 25.

A separate presentence investigation report was prepared by the Probation Office for the pre-Guideline convictions and the Guideline convictions. The Government and the Appellant each made certain objections to the presentence reports, and those objections were responded to by the Probation Office. On May 7, 1990, at sentencing, the trial court gave the Defendant and his attorney the opportunity to controvert information contained in the two presentence investigation reports. At that time, the Defendant-Appellant provided no additional evidence beyond the written objections made to the presentence reports. The Defendant was thereupon sentenced on each of the 20 pre-Guideline convictions to five years to be served concurrently with each other. On the Guideline convictions, Hershberger was sentenced to 57 months on each conviction to run concurrently to each other but consecutively to the pre-Guideline sentence.

One of Hershberger's contentions on appeal is that the imposition of the consecutive sentences constituted an upward departure from the Guideline range without notice from the Court that it was invoking the Guideline provisions regarding such departure and that those departure procedures were not complied with. The Appellant does not complain that the sentences, either pre-Guideline or Guideline, imposed by the trial court are illegal or improper taken individually, except as to the monetary loss amounts used to calculate certain of the Guideline sentences. It is undisputed that the 57 months imposed by the Court on each of the Guideline convictions was within the applicable sentencing range based on the factors used by the Court, and the Appellant makes no assertion that the pre-Guideline sentences were outside the applicable range of sentences as fixed by the Congress.

It is the contention of the Appellant that the imposition of consecutive sentences is a de facto upward departure from the Guideline sentencing range, thus requiring that the Court follow the procedures mandated by 18 U.S.C. § 3553(b) for departure from the Guidelines. The Appellant asserts that he should have been given reasonable notice of the Court's intent to impose these consecutive sentences, and an opportunity to have a hearing on the proposed upward departure. The Court could then make an upward departure from the Guidelines only if it finds the existence of aggravating circumstances that were not adequately taken into account in the formulation of the Guidelines themselves. U.S. v. Gardner, 905 F.2d 1432 (10th Cir.1990).

The Appellant cites several cases in support of his position that the imposition of consecutive sentences is an upward departure from the Guideline sentencing range. Unlike the situation in the case at bar, however, all of the cases cited by the Appellant in support of this proposition involve sentences on convictions that are all covered by the Sentencing Guidelines, which became effective on November 1, 1987. As an example, the recent Supreme Court case of Burns v. United States, 501 U.S. ----, 111 S.Ct. 2182, 115 L.Ed.2d 123 (1991), a case involving only Guideline convictions, states that before a district court can disregard the mechanical application of the Guidelines and thus depart upward from the sentence mandated by those Guidelines, it must find "that there exists an aggravating or mitigating circumstance of a kind, or to a degree, not adequately taken into consideration by the Sentencing Commission...." Burns, 111 S.Ct., at 2185, (citing 18 U.S.C. § 3553(b)).

Despite the above holding, nothing in Burns or any of Appellant's other cited authorities suggest that Guideline law must be applied to pre-Guideline cases, thus preventing the district court from using its unfettered discretion to impose consecutive sentences when pre-Guideline convictions are involved with Guideline convictions. This proposition is clearly stated in the case of United States v. Watford, 894 F.2d 665 (4th Cir.1990), in which the Court held unequivocally that a sentence for a Guideline conviction could be imposed consecutively to a sentence imposed for a pre-Guideline conviction, even though a concurrent sentence might be required if both convictions were imposed under the Sentencing Guidelines.

Defendant Watford was convicted of one count of conspiring to commit mail fraud, six counts of mail fraud and two counts of interstate transportation of stolen property. He was sentenced to five years imprisonment on the convictions of pre-Guideline substantive mail fraud and ten-year terms on the pre-Guideline substantive convictions of the interstate transportation of stolen property. Some of these terms were to be served concurrently and some consecutively, resulting in a total sentence of 35 years. Watford was sentenced on the remaining conspiracy conviction under the provisions of the Sentencing Guidelines to a five-year term of imprisonment to be served consecutively with the 35-year term. Two other defendants in the case were sentenced in similar fashion.

All three of the defendants in Watford asserted on appeal, among other contentions, that the district court erred in directing that the Guideline sentence for conspiracy be served consecutively to the sentences for the substantive pre-Guideline convictions. The Fourth Circuit stated, in discussing the pre-Guideline convictions, that "prior to the effective date of the Guidelines, judges, subject to few limitations not applicable here, were given unbridled discretion in fashioning a sentence." Watford, 894 F.2d, at 667, (citing United States v. Tucker, 404 U.S. 443, 446, 92 S.Ct. 589, 591, 30 L.Ed.2d 592 (1972)). The Court acknowledged that had the dates of all of the counts occurred after November 1, 1987, the effective date of the Guidelines they would all have been subject to the strictures of the Sentencing Guidelines and it would have been necessary to sentence Watford and his codefendants according to the policies and rules enunciated in those Guidelines.

The Fourth Circuit in Watford, however, does not extend the provisions of the Sentencing Guidelines, specifically those relating to concurrent/consecutive terms, to the pre-Guideline convictions. The Court states in this regard that:

"Since the conspiracy count was the only count subject to the Sentencing Guidelines and the dictates of the Sentencing Reform Act, that is as far as the Guidelines can reach in their requirements. As we have recognized, the sentencing court has unfettered discretion to impose sentences on pre-Guideline counts consecutively or concurrently. And nothing in the Guidelines or the Sentencing Reform Act precludes the Court from ordering that a sentence imposed on a pre-Guidelines count be served consecutively to a sentence imposed on a Guidelines count."

Watford, 894 F.2d, at 669.

In conclusion, the Fourth Circuit held that the district court could be reversed only if the Guidelines sentence was imposed improperly. Because there was no contention in Watford that the Guidelines sentence was improper, the Fourth Circuit held that the district court's...