U.S. v. Ture, 05-3142.

• Decision Date: 13 June 2006
• Docket Number: No. 05-3142.,05-3142.
• Citation: 450 F.3d 352
• Parties: UNITED STATES of America, Appellant, v. Gerald TURE, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

450 F.3d 352

UNITED STATES of America, Appellant, v. Gerald TURE, Appellee.

No. 05-3142.

United States Court of Appeals, Eighth Circuit.

Submitted: March 14, 2006.

Filed: June 13, 2006.

COPYRIGHT MATERIAL OMITTED

John R. Marti, argued, Asst. U.S. Attorney, Minneapolis, MN (John F. Docherty, Asst. U.S. Attorney, Minneapolis, on the brief), for appellant.

Daniel M. Scott, argued, Minneapolis, MN, for appellee.

Before MURPHY, BOWMAN, and BENTON, Circuit Judges.

BOWMAN, Circuit Judge.

The government appeals the sentence the District Court imposed on Gerald Ture for willfully attempting to evade federal income tax, arguing that the sentence is unreasonable because Ture's sentence did not include a term of imprisonment. We agree, vacate the sentence, and remand the case for resentencing.

I.

The government filed a six-count indictment against Ture. Counts one through three alleged that Ture willfully attempted to evade federal income tax for the tax years 1997, 1998, and 1999, respectively, in violation of 26 U.S.C. § 7201 (2000). Counts four through six alleged that Ture willfully failed to file federal income tax returns for the tax years 1997, 1998, and 1999, respectively, in violation of 26 U.S.C. § 7203. Acting under a plea agreement, Ture entered a guilty plea to count three. The government and Ture agreed that the remaining counts would be dismissed.¹

The District Court later held a sentencing hearing, at which time it adopted the factual statements contained in the Presentence Investigation Report ("PSR"). According to the PSR, Ture once owned Drill-A-Matic, Inc., but subsequently transferred his ownership interest in the company. Even after the transfer of ownership, Ture actively operated Drill-A-Matic as its president. In 1996, Ture set up a corporate savings account. By 2000, Ture had withdrawn $647,430.95 from that account and deposited the funds into his personal checking account. The PSR described how Ture concealed the transfer of those corporate funds: "In an effort to conceal this income and evade paying personal income tax on these monies, [Ture] instructed the bookkeeper at Drill-A-Matic to post the withdrawals from the corporate savings account as either materials expense or subcontractor expense." PSR at 2, ¶ 6. Under the plea agreement, Ture "acknowledge[d] and admit[ted] that the instructions he gave to the bookkeeper were meant to disguise the true nature of the withdrawals from the corporate savings account, in order to evade the payment of income tax to the United States." Plea Agreement at 2, ¶ 1. Ture founded R & D Technical Services, Inc., in 1997 and owned a majority interest in it. From 1997 to 2000, Ture received $249,351.52 in consulting fees from R & D Technical Services, but he never received a Form 1099, nor did he file an income tax return. Thus, Ture's total earned income during this time period approached $900,000. According to the PSR, the amount of tax owed on the earned income totaled $240,252.

When referencing Ture's physical condition, the PSR stated that the sixty-eight-year-old Ture suffers from high blood pressure and has a history of coronary heart disease, both of which require medication. In 1998, Ture underwent heart bypass surgery. In 2004, Ture had surgery for carpal tunnel syndrome.

Because the PSR's tax-loss calculation of $240,252 reflected a tax loss greater than $200,000 but less than $325,000, the District Court calculated Ture's base offense level to be 16. U.S. Sentencing Guidelines Manual § 2T4.1(K), (L) (1998). The Court then granted the government's motion for a three-level reduction for acceptance of responsibility, resulting in a total offense level of 13. Id. § 3E1.1. As this was Ture's first offense, his criminal history category was I. Given Ture's offense level and criminal history category, the District Court determined that the sentencing range under the United States Sentencing Guidelines ("Guidelines") was twelve to eighteen months of imprisonment, two to three years of supervised release, and a fine of $3,000 to $30,000.² Based on the advisory Guidelines range and the 18 U.S.C. § 3553(a) factors, the District Court sentenced Ture to two years of probation and 300 hours of community service. The Court did not impose a fine because it decided that Ture's "resources will be stretched as they are to pay whatever penalties and back taxes are owed to the Internal Revenue Service." Sent. Tr. at 17:7-9. The Court did not order restitution because the Internal Revenue Service would pursue collection of outstanding taxes, interest, and penalties.

The District Court provided its rationale for the sentence at Ture's sentencing hearing and in a separate sentencing memorandum. The District Court stated that its review of the Guidelines and the § 3553(a) factors convinced it that a "probation sentence together with a significant community service requirement and the anticipated cost to defendant of paying back taxes, interest and penalties, constitutes a sentence that is sufficient and not greater than necessary." Sent. Mem. at 2 (July 1, 2005). The Court found "no reason to sentence [Ture] to prison." Id. at 3. In reaching its sentencing decision, the Court also mentioned the following factors: this was Ture's "first criminal offense after a long life"; Ture used "relatively unsophisticated" means to commit the crime; Ture "has cooperated fully with the investigation and his prosecution"; Ture has expressed remorse and has remained law abiding; Ture has a serious heart condition requiring ongoing treatment; there is "no need to protect the public from further crimes" by Ture; Ture's sentence is unlikely to "affect whether other business people commit crimes"; Ture's "federal felony conviction will affect him in significant ways"; and the bottom of the sentencing range, twelve months, is "just above the range where probation is an authorized sentence under the Guidelines." Id. at 3. The Court also mentioned Ture's age as a factor in not sentencing Ture to imprisonment, but later found that Ture still has the ability to work, something the Court deemed "important" so that Ture could "make a significant effort to repay as much as possible" of his "large [tax] bill." Sent. Tr. at 18:9-11. The Court further stated, "There is adequate deterrence with the enormous bill that will be required, the back taxes and penalties, the fact of a federal felony conviction I think all affords adequate deterrence in light of your age and your health condition." Id. at 18:25-19:4. Finally, the District Court referred to Ture's crime as "a terrible mistake and one that is truly unfortunate." Id. at 18:20-21.

On appeal, the government contends, "The non-custodial sentence in this case was unreasonable, and the factors used by the district court cannot support such a sentence." Appellant's Brief at 3. The government asks us "to remand the case to the district court with instructions to impose a reasonable sentence, one that includes at least some period of incarceration." Id. at 19.

II.

As the District Court correctly noted, the Guidelines are no longer mandatory. Though not bound by the Guidelines, district courts "must consult those Guidelines and take them into account when sentencing." United States v. Booker, 543 U.S. 220, 264, 125 S.Ct. 738, 160 L.Ed.2d 621 (2005). Post-Booker, district courts must first determine the appropriate sentencing range under the Guidelines because that range is still an important sentencing factor. United States v. Haack, 403 F.3d 997, 1002-03 (8th Cir.), cert. denied, ___ U.S. ___, 126 S.Ct. 276, 163 L.Ed.2d 246 (2005). District courts must then decide if a traditional departure under the Guidelines is appropriate. Id. at 1003. Finally, once district courts determine the Guidelines sentencing range, courts must consider the § 3553(a) factors to determine a sentence, i.e., courts must decide whether to impose a Guidelines sentence or to vary from the Guidelines range to impose a non-Guidelines sentence. Id.

The District Court decided that the Guidelines range was twelve to eighteen months of imprisonment, two to three years of supervised release, and a fine of $3,000 to $30,000. The District Court also concluded that no downward departures were warranted under the Guidelines. Neither Ture nor the government challenges the District Court's Guidelines calculations. Instead, the government only challenges the reasonableness of the District Court's variance from the Guidelines range such that no term of imprisonment was imposed. Thus, we review "the resulting sentence[ ] for reasonableness, a standard akin to our traditional review for abuse of discretion." United States v. Lazenby, 439 F.3d 928, 931-32 (8th Cir. 2006). In performing this review, we ask "whether the district court's decision to grant a § 3553(a) variance from the appropriate guidelines range is reasonable, and whether the extent of any § 3553(a) variance. . . is reasonable." United States v. Mashek, 406 F.3d 1012, 1017 (8th Cir. 2005).

In performing our reasonableness review, we understand that "[t]he Guidelines were fashioned taking the other § 3553(a) factors into account and are the product of years of careful study." Lazenby, 439 F.3d at 932. Thus, although the Guidelines range is advisory, a sentence within that range is presumed to be a reasonable sentence even post-Booker. Id. A non-Guidelines sentence, on the other hand, "may be unreasonable if a sentencing court fails to consider a relevant factor that should have received significant weight, gives significant weight to an improper or irrelevant factor, or considers only appropriate factors but nevertheless commits a clear error of judgment by arriving at a sentence that lies outside the limited range of choice dictated by the facts of the case." Haack, 403 F.3d at 1004. An extraordinary variance from the Guidelines range must be "supported by comparably extraordinary circumstances." United States v....