U.S. v. Seacott

• Citation: 15 F.3d 1380
• Decision Date: 07 February 1994
• Docket Number: No. 91-3724,91-3724
• Parties: UNITED STATES of America, Plaintiff-Appellant, v. Everett D. SEACOTT, Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (7th Circuit)

Page 1380

15 F.3d 1380

UNITED STATES of America, Plaintiff-Appellant, v. Everett D. SEACOTT, Defendant-Appellee.

No. 91-3724.

United States Court of Appeals Seventh Circuit.

Argued Nov. 4, 1992.

Decided Feb. 7, 1994.

Andrew B. Baker, Jr., Asst. U.S. Atty., Dyer, IN, Robert N. Trgovich (argued), Fort Wayne, IN, for plaintiff-appellant.

Stanley L. Campbell (argued), Swanson & Campbell, Fort Wayne, IN, for defendant-appellee.

Before ENGEL, ^* COFFEY and EASTERBROOK, Circuit Judges.

COFFEY, Circuit Judge.

Everett D. Seacott pled guilty to one count of willfully misapplying bank funds in violation of 18 U.S.C. Sec. 657. Pursuant to the United States Sentencing Guidelines ("U.S.S.G." or "Guidelines"), the district court ruled that the sentencing range applicable to Seacott was 15-21 months of imprisonment. The district court then departed downward from the Guidelines range and sentenced the defendant to four months in a work release center and four months of home detention. The Government appeals the sentence, arguing that the district court erred in departing from the Guidelines range. 18 U.S.C. Sec. 3742(b). We vacate Seacott's sentence and remand for resentencing.

I.

A. Criminal Conduct

Seacott was the Lampco branch manager/loan officer in Gas City, Indiana, from January 6, 1988 to February 1, 1989. One of the Lampco loans under Seacott's supervision was made to Newton Nichols, the owner of the Glass Bar tavern in Gas City, Indiana. The loan was for roughly $170,000. Since 1986, the Glass Bar had been battered by an economic decline in the Gas City area. Seacott advised Nichols to sell the tavern. Nichols listed the Glass Bar for sale, but needed operating capital while he searched for a buyer. Seacott could not authorize loans directly to Nichols sufficient to keep the Glass Bar operating. The defendant got around this problem by (1) loaning Nichols between $4,000-$5,000 of his own money and (2) by approving Lampco loans to persons he knew would funnel the money to Nichols and the Glass Bar. The first method was charity; the second was a violation of federal law. Seacott approved nine illegal loans totalling $78,572.62 to five individuals connected to Nichols and the Glass Bar. The documentation for those transactions falsely stated that the loan amount was to be used to purchase real estate, pay for home improvements, and purchase automobiles. The loan documents also claimed that the loans were secured by the assets they were being used to purchase. The loaned money was not used for the purposes stated in the loan documentation. Instead, the money was used as operating capital for the Glass Bar, to pay off loans the named borrowers had initially obtained to provide funds for the Glass Bar, and to reimburse to Seacott roughly $1,400 of the amount he had personally lent to Nichols and the Glass Bar.

B. District Court Proceedings

Seacott pled guilty to one count of violating 18 U.S.C. Sec. 657 in connection with the misapplication of the Lampco funds. The Probation Department, using the 1990 version of the Guidelines, arrived at Seacott's adjusted offense level by starting with a base offense level of four, U.S.S.G. Sec. 2B1.1(a); adding eight levels because the loss to the victim (Lampco) was between $70,000 and $120,000, U.S.S.G. Sec. 2B1.1(b)(1)(I); adding two levels because the offense involved more than minimal planning, U.S.S.G. Sec. 2B1.1(b)(5); adding two levels because the defendant abused a position of public trust, U.S.S.G. Sec. 3B1.3; and subtracting two levels because the defendant accepted responsibility for his crime, U.S.S.G. Sec. 3E1.1. The defendant's adjusted offense level was thus 14, and with a criminal history category of I, the Guidelines dictated imprisonment for 15-21 months. The Probation Department advised the district court that a departure from the Guidelines range was not warranted.

At the sentencing hearing, the district court accepted the Probation Department's calculation of the defendant's adjusted base offense level and agreed that the applicable Guidelines range was 15-21 months imprisonment. The district court, however, ruled that a downward departure from the Guidelines range was appropriate in Seacott's case for two reasons. First, Seacott was not motivated by "self gain" in misapplying Lampco's money, but rather by a desire that one of Lampco's business debtors, the Glass Bar, not default on its loan. In support of this ruling, the court found that Seacott "did not benefit personally by any of these transactions ... and that everything he did with respect to these loans were done to preserve his customer/employer status and to keep the loan afloat so that if economic conditions recovered ... that his employer, in fact, would make good on these loans." The court's second reason for departing downward was its view that "the primary objective in the sentencing in this case ... is to try to provide for the restitution to the victim ..." so that the sentence will be the "most beneficial to the victim, the defendant and the taxpayers." The court then announced that Seacott would serve four months in the custody of the Bureaus of Prisons in a work release center and "be allowed to leave the facility for work purposes only. Four months shall be spent under home detention as a condition of supervised release." The court also ordered the defendant to pay restitution for the net loss suffered by Lampco. After the court sentenced Seacott, the Government prosecutor asked the court whether it had "announce[d] what the [Guidelines] offense level was subsequent to your downward departure." The court responded, "if the Probation Department can tell me what quantum of departure I need to show to reflect this sentence, I'll do it. The sentence is the sentence." After a colloquy among the prosecutor, defense attorney, and probation officer, the court determined that it would depart downward four levels to level 10 in order to reach the sentence it had previously imposed.

II. Analysis

A. The Applicable Guidelines

The first question we address is which version of the Guidelines is applicable to the defendant. This issue was not raised by either party, but given its potential importance to the defendant we requested supplemental briefing from both parties. ¹ When an issue is not raised by a party, our review is limited to plain error. "Plain errors or defects affecting substantial rights may be noticed although they were not brought to the attention of the court." Fed.R.Crim.P. 52(b); United States v. Kopshever, 6 F.3d 1218, 1222 (7th Cir.1993) (although ex post facto problem not raised at sentencing, "the gravity of the constitutional concerns" warranted addressing the issue for the first time on appeal); United States v. Belanger, 936 F.2d 916, 920 (7th Cir.1991) (remand compelled after court discovered sua sponte a sentencing error); cf. United States v. Wilson, 962 F.2d 621, 627-28 (7th Cir.1992) (vacating defendant's sentence on the basis of ex post facto violation raised for the first time in a reply brief).

Contrary to the contention of the concurrence that we have taken a "detour" by "roving" through the record in search of error, we are merely exercising judicial discretion to rectify a constitutional harm that all other circuits have previously recognized and acted upon to correct. In the instant case the harm is not only to the defendant, Seacott, but to the criminal justice system as a whole, i.e., by preventing the prospect of future defendants serving extra prison time (reducing overcrowding in our prison system) as well as by curbing needless future litigation on this issue. The concurrence further maintains that because the statute (18 U.S.C. Sec. 3553(a)(4)) "is not screechingly unconstitutional" we should refrain from passing judgment on it. While we have been unable to discover any legal precedent for the newly created "screechingly unconstitutional" doctrine, we do know that after receiving supplemental briefing on the subject from both parties (in response to the concurring judge's request that we not address the ex post facto problem without further briefing from the parties), we can confidently say that retroactive application of a harsher sentencing guideline contravenes the very purpose of the Ex Post Facto Clause. Finally, the concurrence expresses concern that the ex post facto issue does not "matter[ ] to the judgment." We fail to understand this argument for we are unaware of anyone who would maintain that even one additional hour of confinement, much less a day or week of confinement, "does not matter."

As a general rule, a district court must sentence a defendant based on the Guidelines in effect on the date of sentencing. 18 U.S.C. Sec. 3553(a)(4). However, as we recently noted, "every circuit except our own has held that the Ex Post Facto Clause of the Constitution prohibits application of a guidelines provision not in effect on the date of the offense if the new provision operates to the detriment of the defendant." United States v. Harris, 994 F.2d 412, 416 n. 9 (7th Cir.1993). United States v. Schnell, 982 F.2d 216, 218 (7th Cir.1992), lists representative cases so holding from each of the other eleven circuits. Many of our cases have stated this proposition in dicta. See, e.g., United States v. Willey, 985 F.2d 1342, 1350 (7th Cir.1993); United States v. Foutris, 966 F.2d 1158, 1160 (7th Cir.1992); United States v. Golden, 954 F.2d 1413, 1417 (7th Cir.1992). Compare United States v. Wilson, 962 F.2d 621, 627-28 (7th Cir.1992) (invalidating on ex post facto grounds the retroactive application of a criminal statute amended to the detriment of the defendant after the commission of the offense).

This court addressed the ex post facto question most recently in United States v. Kopshever, in which we stated "[e]xcept for a suggestion by way of dictum in one of our opinions [United States v. Bader, 956 F.2d 708, 709 (7th Cir.1992) ], it has been...