U.S. v. Thornberg, 02-2258.

• Decision Date: 29 April 2003
• Docket Number: No. 02-2258.,02-2258.
• Citation: 326 F.3d 1023
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. James Edward THORNBERG, also known as Samuel James Thornberg, also known as Samuel James Colby, also known as James Edward Thornbag, also known as Robert Johnson, also known as George Swenson, Defendant-Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

326 F.3d 1023

UNITED STATES of America, Plaintiff-Appellee, v. James Edward THORNBERG, also known as Samuel James Thornberg, also known as Samuel James Colby, also known as James Edward Thornbag, also known as Robert Johnson, also known as George Swenson, Defendant-Appellant.

No. 02-2258.

United States Court of Appeals, Eighth Circuit.

Submitted: March 12, 2003.

Filed: April 29, 2003.

James R. Murphy, argued, Rapid City, SD, for appellant.

Mikal Hansen, argued, Asst. U.S. Atty., Pierre SD, for appellee.

Before HANSEN, Chief Judge,¹ LOKEN and MURPHY, Circuit Judges.

MURPHY, Circuit Judge.

James Edward Thornberg pled guilty to wire fraud, in violation of 18 U.S.C. § 1343, and money laundering, in violation of 18 U.S.C. § 1956(a)(1)(A)(i). The district court² sentenced him to 96 months after departing upward from the sentencing guidelines. Thornberg appeals, and we affirm.

Throughout 1998 James Thornberg engaged in an elaborate scheme to sell ethanol powered vehicles. The vehicles did not actually exist, but Thornberg and his accomplice created false press releases, color brochures, specification sheets, and invoices about them. They offered vehicles powered completely by ethanol and capable of traveling over 1000 miles on one tank of fuel. Victims of the fraud were induced to furnish down payments on the vehicles, and more than $65,000 had been mailed or wired to Thornberg before the scheme was uncovered. The vehicles were never produced, and the down payments were never returned.

At the time Thornberg was arrested in November 2001, he was also operating a business called Bell Corporation. This entity purported to distribute storage structures throughout the Western Hemisphere and to do more than $40,000,000 in business annually. Thornberg later admitted that his only financial asset was a used car worth $5000. The voice mail service for Bell Corporation continued to be operational into at least the first half of 2002.

In January 2002, Thornberg was indicted on twenty two felony charges: one count of conspiracy, in violation of 18 U.S.C. § 371, seven counts of mail fraud, in violation of 18 U.S.C. § 1341, five counts of wire fraud, in violation of 18 U.S.C. § 1343, and nine counts of money laundering, in violation of 18 U.S.C. § 1956(a)(1)(A)(i). Thornberg entered into a plea agreement, which was not binding on the court, under which he would plead guilty to one count of wire fraud and one count of money laundering. The United States agreed in return to dismiss the twenty other counts of the indictment and to recommend that Thornberg receive a reduction in his offense level for acceptance of responsibility and that he be sentenced within the guideline range determined by the district court.

In researching Thornberg's criminal history for the presentence investigation report (PSR), the United States Probation Office learned that among his convictions was one for a California battery. Thornberg urged the Probation Office not to count the battery conviction when calculating his criminal history, reporting that it had been dismissed upon his completion of an anger management course. The investigation by the Probation Office revealed that the battery charge had indeed been dismissed, but only after Thornberg had submitted to the court a letter and certificate of course completion signed by John W. Venutti, identified as a psychologist. Further investigation revealed that Venutti was an alias used by Thornberg and that the documents submitted to the court in California were false. The battery was then counted in calculating Thornberg's criminal history.

Thornberg came before the district court for sentencing on April 29, 2002. The court increased his offense level by four levels under § 2B1.1 of the sentencing guidelines because the wire fraud had involved sophisticated means and false pieces of identification. See United States Sentencing Commission, Guidelines Manual, § 2B1.1(b)(8)(C), (b)(9)(C)(i) (Nov. 2001) [USSG]. Because of his misrepresentations about his battery conviction and supposed completion of an anger management course, the court imposed a two level enhancement for obstruction of justice under § 3C1.1 and declined to award a reduction for acceptance of responsibility under § 3E1.1. See USSG §§ 3C1.1, 3E1.1. His adjusted offense level was calculated to be 22.

The court found that criminal history category III did not adequately reflect the seriousness of Thornberg's past criminal conduct or the likelihood that he would commit future crimes. Describing Thornberg as "a classic con man, and a crook of long standing throughout his lifetime," the court departed upward under USSG § 4A1.3 to criminal history category V, which provides a sentencing range of 77 to 96 months for an offense level of 22, id. Ch.5, Pt.A. Thornberg was sentenced at the high end of the range, to 60 months on the wire fraud count and 36 months for money laundering, to be served consecutively. Pursuant to 18 U.S.C. § 3553(c), the district court provided a written statement of its reasons for departing from the guidelines.

On appeal, Thornberg argues that the district court erred in departing upward. First, he contends that the upward departure resulted in an unreasonable sentence and was unwarranted because the facts did not differentiate him from the typical offender falling within criminal history category III. Second, he contends that the district court improperly engaged in double counting by using the same conduct to increase his offense level and to depart upward from the guidelines. Finally, Thornberg argues that in increasing his criminal history by two categories, the district court failed to compare his criminal history with the criminal histories of other offenders at each step.³ In reviewing a departure from the guidelines, we "ask whether the sentencing court abused its discretion." Koon v. United States, 518 U.S. 81, 91, 116 S.Ct. 2035, 135 L.Ed.2d 392 (1996); see also United States v. Herr, 202 F.3d 1014, 1015 (8th Cir.2000) ("We review the district court's upward departure under a unitary abuse-of-discretion standard.").⁴

Section 4A1.3 permits a court to depart upward if "reliable information indicates that the criminal history category does not adequately reflect the seriousness of the defendant's past criminal conduct or the likelihood that the defendant will commit other crimes." USSG § 4A1.3, p.s. In this case, the record supports both the district court's conclusion that category III was insufficient and the reasonableness of the sentence imposed.

The PSR, to which Thornberg did not object, revealed that Thornberg had previously been convicted of 17 counts of mail fraud for which he was sentenced to 96 months in federal prison; had failed to appear in the courts of at least two different states after being charged with grand theft and embezzlement in South Dakota and gross misdemeanor theft in Minnesota; had been associated with a multitude of business, some owing millions of dollars to unsecured creditors; had operated a foundation that was shut down by Minnesota authorities for using fraud, misrepresentation, and deceptive practices; had claimed to have posttraumatic stress disorder from service in Vietnam even though he had never served in any branch of the military; and had used at least six false social security numbers and numerous aliases in the course of his operations. The PSR also showed that, at the time of his arrest, Thornberg was operating Bell Corporation, which falsely claimed to transact over $40,000,000 in annual business, and that he subsequently tried to deceive the court about the disposition of a prior conviction.

Thornberg argues that much of his history does not differentiate him from a typical category III offender. He contends that fraud has not been proven against Bell Corporation or the 50 other businesses associated with him, that the existence of an active voice mail account did not prove that he was continuing to operate Bell Corporation while incarcerated, and that several of the alleged aliases were actually just the names of prior users of his mailbox. Thornberg's argument fails to take into account that § 4A1.3 only requires that a sentencing court base a departure on reliable information. The facts described in the PSR were not...