U.S. v. Tomko

• Decision Date: 17 April 2009
• Docket Number: No. 05-4997.,05-4997.
• Citation: 562 F.3d 558
• Parties: UNITED STATES of America, Appellant v. William TOMKO.
• Court: U.S. Court of Appeals — Third Circuit

562 F.3d 558

UNITED STATES of America, Appellant v. William TOMKO.

No. 05-4997.

United States Court of Appeals, Third Circuit.

Argued on October 24, 2006.

Filed: April 17, 2009.

Opinion Issued on August 20, 2007.

Opinion Amended on August 21, 2007.

Opinion Vacated and Petition for Panel Rehearing Granted on January 17, 2008.

Rehearing En Banc Ordered on August 19, 2008.

Argued En Banc on November 19, 2008.

Nathan J. Hochman (Argued), Alan Hechtkopf, S. Robert Lyons, United States Department of Justice, Tax Division, Washington, DC, Attorneys for Appellant.

J. Alan Johnson, (Argued), Cynthia R. Eddy, Johnson & Eddy, Pittsburgh, PA, Attorneys for Appellee.

Ellen C. Brotman, Philadelphia, PA, Peter Goldberger, Ardmore, PA, Attorneys for Amicus, National Association of Criminal Defense Lawyers.

Lisa B. Freeland, Pittsburgh, PA, Attorney for Amicus, Federal Public and Community Defenders of the Third Circuit.

Before: SCIRICA, Chief Judge, SLOVITER, McKEE, RENDELL, BARRY, AMBRO, FUENTES, SMITH, FISHER, CHAGARES, JORDAN, HARDIMAN and COWEN, Circuit Judges.

OPINION

SMITH, Circuit Judge, with whom McKEE, BARRY, AMBRO, FUENTES, CHAGARES, JORDAN, and HARDIMAN, Circuit Judges, join.

The Government appeals the reasonableness of William Tomko's below-Guidelines sentence of probation, community service, restitution, and fine for his tax evasion conviction. If any one of a significant number of the members of this Court—including some in today's majority—had been sitting as the District Judge, Tomko would have been sentenced to some time in prison. But "[t]he fact that the appellate court might reasonably have concluded that a different sentence was appropriate is insufficient to justify reversal of the district court." Gall v. United States, ___ U.S. ___, 128 S.Ct. 586, 597 169 L.Ed.2d 445 (2007). Gall reminds us that "[t]he sentencing judge is in a superior position to find facts and judge their import under § 3553(a) in the individual case. The judge sees and hears the evidence, makes credibility determinations, has full knowledge of the facts and gains insights not conveyed by the record." Id. (internal quotations and citations omitted); see also United States v. Dragon, 471 F.3d 501, 506 (3d Cir.2006) (we afford "deference to the District Court because it is in the best position to determine the appropriate sentence in light of the particular circumstances of the case." (internal quotations and citation omitted)). This reality is why, post-Booker, "the familiar abuse-of-discretion standard of review now applies to appellate review of sentencing decisions." Gall, 128 S.Ct. at 594. Where, as here, a district court decides to vary from the Guidelines' recommendations, we "must give due deference to the district court's decision that the § 3553(a) factors, on a whole, justify the extent of the variance." Id. at 597. These principles require us to affirm Tomko's sentence.

I.

On May 11, 2004, Tomko pleaded guilty to a one-count information charging him with tax evasion in violation of 26 U.S.C. § 7201. Tomko was the owner and Chief Executive Officer of W.G. Tomko & Son, Inc. ("Tomko, Inc."), a plumbing contractor. From 1995 to 1998, Tomko directed numerous subcontractors, who were building his multimillion dollar home in Washington County, Pennsylvania, to falsify information on billing invoices so that the invoices would show work being done at one of Tomko, Inc.'s many job sites instead of at Tomko's home. As a result, Tomko, Inc. paid for the construction of Tomko's home and illegally deducted those payments as business expenses. Tomko also did not properly report those payments as income on his personal tax return.¹ All told, Tomko's tax evasion scheme involved twelve different subcontractors and his general contractor, and resulted in a tax deficiency of $228,557.

The United States District Court for the Western District of Pennsylvania conducted Tomko's sentencing hearing on September 30, 2005. Using the 1997 edition of the United States Sentencing Guidelines Manual, the District Court calculated Tomko's total offense level to be thirteen and his criminal history category to be I.² Based on these calculations, the Guidelines recommended a range of imprisonment between twelve and eighteen months and a fine between $3,000 and $30,000.

Tomko, however, proposed that in light of the then-recent Hurricane Katrina catastrophe and his construction expertise, the Court should sentence him to probation and home detention, and require him to work for Habitat for Humanity. The Executive Director for Habitat for Humanity's Pittsburgh affiliate testified that the organization would appreciate Tomko's help in its efforts to rebuild the Gulf Coast and that Tomko had performed well in past projects, including providing onsite assistance and advice.

Tomko also proffered testimony from Tomko, Inc.'s Chief Financial Officer that the company was in danger of losing its line of credit if he were imprisoned. If this happened, Tomko, Inc. would be in dire straits financially and the jobs of its 300-plus employees would be threatened.

Finally, Tomko submitted a Motion for Downward Departure.³ The motion argued that Tomko should be sentenced below his Guidelines range because 1) his incarceration could cause Tomko, Inc.'s innocent employees to lose their jobs; 2) he has performed exceptional charitable acts and good works; 3) he has demonstrated an extraordinary degree of acceptance of responsibility; and 4) a combination of these three factors. As exhibits, Tomko attached over fifty letters from family, friends, community leaders, and others attesting to his pre-indictment charitable activities and other good works.

After hearing these arguments and stating that it had reviewed all the motions and briefs that the parties submitted, the District Court stated its Guidelines calculations for the record and considered the sentencing factors listed in 18 U.S.C. § 3553(a):⁴

I am to consider first the nature and circumstances of the offense, which are as follows.

The offense was not violent in nature.

The offense was not ongoing in nature.

The offense was not part of a larger pattern of criminal activity.

There are also no identifiable victims of the offense.

I am also to consider the history and characteristics of the Defendant. [The District Court here discussed Tomko's childhood, family, education, drinking problem, and prior criminal conviction for operating a boat while intoxicated.]

I am also going to consider the need for the sentence imposed to reflect the seriousness of the offense, promote respect for the rule of law, and provide just punishment for the offense. Here, the Defendant has pled guilty to tax evasion, which is a serious offense.

I am to afford adequate deterrence to the Defendant's criminal conduct. Here, the Defendant has one prior criminal incident which is alcohol-related, but has otherwise led a crime-free life.

I am to protect the public from further crimes of this Defendant. Here, the Defendant has not been involved in other crimes even though this is a serious offense here. The likelihood of recidivism in this case I find is very little.

And to provide Defendant with needed educational/vocational training, medical care, or other correctional treatment in the most effective manner possible.

I am also to consider the kind of sentences available, including federal prison, house arrest, probation, and fines, which I am going to do.

I am to consider the need [to avoid] unwarranted sentence disparities among Defendants with similar records who have been found guilty of similar conduct. These considerations generally weigh in favor of sentencing a Defendant within the guideline range. However, this need to avoid unwarranted sentence disparities among Defendants with similar records also gives me enough leniency, though, to understand that there are differences and those differences have to be taken into account. I recognize the need for consistent sentencing; however, in this case, given the Defendant's lack of any significant criminal history, his involvement in exceptional charitable work and community activity, and his acceptance of responsibility, we find that a sentence that is mitigated by the factors of 3553[is] warranted.

In response, the Government insisted that the Court impose a sentence that included a term of imprisonment. The Government did not challenge Tomko's factual assertions or submissions. Instead, it juxtaposed his criminal conduct with the patriotism of American soldiers fighting wars abroad and argued that greed, not community service and philanthropy, defined Tomko's character. It focused on the fact that Tomko coerced his subcontractors to file false documentation, and highlighted the "gilded cage" nature of a sentence of home detention. The Government claimed that it would be "absurd" to sentence Tomko to live in the same multimillion dollar mansion that the illegally obtained tax monies helped fund. According to the Government, the Court's failure to incarcerate Tomko would send a message that a rich defendant can buy his way out of prison, and would compromise the general deterrent effect that tax laws have on potential tax cheats.

Despite the Government's arguments, the District Court did not sentence Tomko to a term of imprisonment. Instead, the Court sentenced Tomko to three years of probation (the first of which would be served as home detention), participation in an alcohol treatment program, 250 hours of community service, full restitution, and the statutory maximum fine of $250,000. The Court explained its sentence with the following colloquy:

The reason for the sentence is as follows: Defendant stands before us for sentencing after pleading guilty to tax evasion. A review of Defendant's financial condition paints a picture of a very wealthy man who had the means and wherewithal to easily pay whatever tax obligation is owing. He was a successful businessman...