U.S. v. Vaughn, 05-1518.

• Decision Date: 06 January 2006
• Docket Number: No. 05-1518.,05-1518.
• Citation: 433 F.3d 917
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Gene B. VAUGHN, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

433 F.3d 917

UNITED STATES of America, Plaintiff-Appellee, v. Gene B. VAUGHN, Defendant-Appellant.

No. 05-1518.

United States Court of Appeals, Seventh Circuit.

Argued November 10, 2005.

Decided January 6, 2006.

Scott James Campbell (argued), Office of the United States Attorney, Milwaukee, WI, for Plaintiff-Appellee.

Michael J. Schmidt (argued), Brookfield, WI, for Defendant-Appellant.

Before FLAUM, Chief Judge, and RIPPLE and SYKES, Circuit Judges.

RIPPLE, Circuit Judge.

On September 17, 2004, Gene Vaughn pleaded guilty to two counts of conspiracy, stemming from the theft, transportation and fraudulent endorsement of United States Treasury checks. See 18 U.S.C. §§ 371, 1956(h). The District Court for the Northern District of Illinois sentenced Mr. Vaughn to 121 months' imprisonment, as well as imposed a restitution obligation in the amount of $383,919.49. Mr. Vaughn now challenges his sentence; he submits that the district court erred in consulting the 2001 Sentencing Guidelines because a majority of his conspiratorial conduct occurred prior to the enactment of those Guidelines. He also contends that the district court erred in applying the sentencing factors specified in 18 U.S.C. § 3553(a). For the reasons set forth in the following opinion, we affirm the judgment of the district court.

I BACKGROUND

A. Facts

In early 2001, Mr. Vaughn entered into a conspiracy with a number of individuals to steal treasury checks, namely tax refund checks issued by the Internal Revenue Service and monthly checks issued by the Social Security Administration, from a postal distribution center in Los Angeles, California. These checks were stolen by Jonathan Culbert, Jr. and others between March 2001 and July 2002; Jonathan and Sheryl Culbert then mailed the checks to Marlon Holt in Florida, who mailed them to Mr. Vaughn in Wisconsin. R.159 at 3. It was agreed that Mr. Vaughn would open "nominee" accounts in the name of fictitious business entities for the purpose of depositing and transferring the funds to himself and his co-conspirators. Id.

Mr. Vaughn opened three bank accounts for this purpose. On March 23, 2001, he and Demetrious Garner opened a business checking account at Wells Fargo Bank in the name of fictitious entity, "EZ Check Cashing."¹ Id. Mr. Vaughn and Garner then fraudulently endorsed and deposited $388,378.26 in stolen treasury checks into this account. These funds were later withdrawn by Mr. Vaughn and transferred elsewhere. For example, during 2001, Mr. Vaughn wrote a series of checks — totaling $222,311 — from the EZ Check Cashing account to a personal account at Charter One Bank, which had been opened under the alias, "Barry Vaughn." Id. at 5. Mr. Vaughn then used these funds for personal expenditures, including the purchase of a car. He also wrote checks, totaling $119,000, from the EZ Check Cashing account to several of his co-conspirators. The account was later closed by Wells Fargo due to suspicious activity. Id.

In March 2002, Mr. Vaughn, along with his niece, Tominka Vaughn, opened a second account at Wells Fargo, this time under the name of fictitious entity, "Ruekia Redd d/b/a Tax Returns by Redd." Id. They fraudulently endorsed and deposited $16,023.47 in stolen treasury checks into and made numerous cash withdrawals from the account. This account also was closed by the bank because of suspicious activity. Id.

Mr. Vaughn opened a third account in June 2002, this time at Bank One and in the name of fictitious entity, "Troy Phillips d/b/a Phillips Tax Agency." Id. at 4. Mr. Vaughn, along with his co-conspirators, fraudulently endorsed and deposited into this account eleven stolen checks, totaling $24,773.64. Mr. Vaughn also wrote checks from this account to the Barry Vaughn account at Charter One Bank. Id.

The checks fraudulently endorsed and deposited into these three accounts from March 2001 to July 2002 totaled $429,175.37; this sum included approximately $424,632.51 in stolen treasury checks and $4,542.86 in the form of a stolen non-treasury check. Id.

In May 2002, the United States Secret Service ("USSS") and the FBI began investigating the criminal activities of Mr. Vaughn and his co-conspirators. They obtained signature cards, deposit items and endorsed checks from Wells Fargo. On May 15, 2002, they interviewed Garner, who revealed various details of the conspiracy and implicated Mr. Vaughn. Tominka Vaughn was arrested on May 20, 2002, for attempting to pass a stolen check at Wells Fargo Bank; when interviewed, she also implicated Mr. Vaughn in the conspiracy. Four days later, the USSS obtained and executed a seizure warrant for Mr. Vaughn's vehicle, which had been purchased with the stolen funds; in the vehicle, they found a bank card for the Charter One account, and receipts for packages sent by Mr. Vaughn to his co-conspirators in Los Angeles. R.73, Ex.B.

B. District Court Proceedings

On December 9, 2003, a federal grand jury in the Eastern District of Wisconsin returned a thirteen-count indictment, charging Mr. Vaughn and five other defendants² with violations of 18 U.S.C. §§ 371, 510(a)(2), 1344, 1956(a)(1)(A)(I), 1956(a)(1)(B)(I) and 1956(h), and 31 U.S.C. §§ 5324(a)(3) and 5324(d)(2).³ Mr. Vaughn pleaded guilty to two counts: (1) conspiracy to defraud the United States, including conspiracy to steal, transport, receive and forge endorsements on treasury checks, see 18 U.S.C. § 371; and (2) conspiracy to commit money laundering, see 18 U.S.C. § 1956(h).

Prior to the sentencing hearing, Mr. Vaughn filed a motion for a downward departure. Specifically, he contended that because most of the criminal conduct at issue took place before November 1, 2001 — the date that the 2001 amendments to the Sentencing Guidelines became effective — application of the 2001 Guidelines would "retroactively increas[e] [Mr. Vaughn's] punishment." R.176 at 4. Mr. Vaughn contended that, if the court nevertheless chose to apply the 2001 Guidelines, it must "enter a downward departure" to take into account the fact that his criminal conduct "straddle[d] multiple years." Id. at 2-3. Specifically, the defense requested a five to seven point adjustment, resulting in a sentencing range of 57-71 months. See Sent. Tr. Vol.II at 21.

The district court denied this motion. Id. at 24-25. It held that, under United States v. Parolin, 239 F.3d 922 (7th Cir.2001), "trial judges [are] to apply the amended form of the guidelines even though the conduct may overlap two different sets of guidelines." Id. at 21. Although in this case, the court wrote, many of the acts in furtherance of the conspiracy took place before November 2001, including the theft, transportation and fraudulent endorsement of the majority of the treasury checks, "it is equally clear there were still many activities . . . that bring the totality of Mr. Vaughn's conduct within the ambit of the November 1st, 2001 sentencing guidelines." Id. at 24. The district court further noted that

the facts of this case are a little more involved and sophisticated than simply suggesting that . . . these treasury checks were for the most part converted prior to November 1st of 2001[;] there remained an awful lot of activities associated with the disbursement and cleansing of those funds that occurred after November 1st of 2001.

Id. at 25. "And if there be any amelioration or suggestion of providing some consideration for the large amount of money that was converted prior to November 1st," the court concluded, "I believe quite candidly that that matter can be appropriately addressed first within the guideline construct itself, as well as the matter of concurrent versus consecutive sentences."⁴ Id.

Mr. Vaughn also submitted that the district court should consider the benefits of a sentence that would run concurrent with his current state sentence. R.175 at 1; R.176 at 1-2. In part, according to the defense, a concurrent sentence would facilitate the prompt repayment of Mr. Vaughn's restitution obligation. Id. at 2; Sent. Tr. Vol.II at 10 (arguing that, after Mr. Vaughn "serves the state sentence" and then "the federal sentence," "it would be about a dozen years or more before he would have the opportunity to significantly contribute to the restitution").

The district court adopted this recommendation. It began by noting that Mr. Vaughn had a substantial criminal history and that he had "gone undeterred" by his previous sentences, and therefore, a lengthy term of imprisonment was justified. Id. at 42. After giving "due recognition" to the factors listed in 18 U.S.C. § 3553(a), id. at 42, the district court calculated the advisory sentence range as follows: Using the 2001 Guidelines, and taking into account a two-point upward enhancement for sophisticated laundering,⁵ see U.S.S.G. § 2S1.1(b)(3), a four-point upward enhancement for his supervisory role in the offense, see id. § 3B1.1(a), and a two-point downward departure for acceptance of responsibility, see id. § 3E1.1(a), Mr. Vaughn was assigned an adjusted offense level of 29. His previous record placed him in criminal history category II. Therefore, the 2001 Guidelines yield sentences of 60 months' imprisonment for Count I and between 97 and 121 months' imprisonment for Count II. The district court decided to follow the Guidelines on Count I, and sentenced Mr. Vaughn to 112 months' imprisonment on Count II. The district court ordered that these sentences run concurrently. It also directed that 24 months of the 112-month sentence run concurrently with three concurrent seven-year sentences for forgery imposed by the Milwaukee County Circuit Court in Wisconsin, which Mr. Vaughn was currently serving. Although the court did not specifically cite as a benefit of concurrent sentences the prompt payment of restitution, it concluded that "interests of justice" compelled this result. Sent. Tr. Vol.II at 46 (citing its authority under 18 U.S.C. § 3584(a)).

In addition to imprisonment, the district court...