United States v. Coppenger
| Decision Date | 07 January 2015 |
| Docket Number | No. 13–3863.,13–3863. |
| Citation | 775 F.3d 799 |
| Parties | UNITED STATES of America, Plaintiff–Appellee, v. Jack COPPENGER, Jr., Defendant–Appellant. |
| Court | U.S. Court of Appeals — Sixth Circuit |
ARGUED:Evan B. Smith, Appalachian Citizens' Law Center, Whitesburg, Kentucky, for Appellant. Daniel R. Ranke, United States Attorney's Office, Cleveland, Ohio, for Appellee. ON BRIEF:Evan B. Smith, Appalachian Citizens' Law Center, Whitesburg, Kentucky, for Appellant. Daniel R. Ranke, United States Attorney's Office, Cleveland, Ohio, for Appellee. Jack Coppenger, Lisbon, Ohio, pro se.
Before: SILER, SUTTON, and McKEAGUE, Circuit Judges.
Defendant Jack Coppenger, Jr., pled guilty to conspiracy to commit mortgage fraud. Pursuant to the parties' plea agreement, the government agreed not to recommend a sentence in excess of the applicable advisory Guidelines range, which was 78 to 97 months' imprisonment. Nonetheless, the district court used information in presentence reports prepared for Coppenger's co-conspirators to vary upward and sentenced Coppenger to 120 months in prison. Coppenger contends the sentence is substantively and procedurally unreasonable. He asserts two claims of error: the district court impermissibly treated co-conspirators as victims; and the district court failed to provide him with notice and opportunity to respond to its intent to vary upward based on information contained in co-conspirators' presentence reports. Because the district court abused its discretion when it failed to provide Coppenger meaningful opportunity to respond to information used to vary upward, we vacate and remand for resentencing.
In 2005, Coppenger initiated a mortgage fraud scheme to profit from buying and selling millions of dollars' worth of real estate by submitting false information to federally insured lenders. The “manner and means” of the scheme are detailed in Coppenger's plea agreement. To begin, Coppenger entered into a $13,200,000 contract to purchase two parcels of property in Panama City, Florida. To finance the purchase, Coppenger conspired with three mortgage officers and thirty-three “straw buyers.” The straw buyers applied for mortgages on lots within one of Coppenger's Panama City parcels; falsely claimed they intended to use the lots as their secondary residences; falsely claimed that down payments were made; falsely claimed that they would be personally responsible for making monthly mortgage payments; received approval for the mortgages; and delivered mortgage proceeds to Coppenger. The mortgage officers worked with Coppenger to make monthly mortgage payments on behalf of the straw buyers, and to provide the straw buyers with either upfront cash payments or the promise of a future benefit, such as sharing in the profits from the ultimate sales of the properties.
By May 2006, Coppenger stopped making mortgage payments for the straw buyers and the mortgage loans went into default, resulting in a loss of more than $32 million. Soon thereafter, Coppenger approached the authorities to confess and provide information describing the scheme. Subsequently, the government charged thirty-five co-conspirators with felony conspiracy. All pled guilty. The district court spared most of the co-conspirators prison time, but required all to pay fines. In 2012, the government charged Coppenger with two counts of conspiracy: conspiracy to commit bank fraud, in violation of 18 U.S.C. § 1349 ; and conspiracy to defraud the United States of income taxes, in violation of 18 U.S.C. § 371. Coppenger pled guilty to both counts.
Before sentencing, a presentence report was prepared in compliance with Federal Rule of Criminal Procedure 32(d). The government requested a downward departure based on Coppenger's substantial assistance and the parties agreed that Coppenger should be sentenced at offense level 28, and criminal history category I. This yielded a Guidelines range of 78 to 97 months' imprisonment. Both parties sought a sentence within this range. However, the district court relied on confidential, undisclosed information from co-conspirators' presentence reports to vary upward from this range. R. 31, Sent. Tr. at 15–16, 21–25, Page ID 193–94, 199–203.
The district court stated that it had already sentenced most of the co-conspirators who were led into the conspiracy by Coppenger. “[F]or the record and any reviewing court,” the court explained that it had reviewed thirty-three presentence reports, twenty-eight to thirty of which were prepared for the straw buyers, “to go back and refresh my recollection about their history, their background, and how it was that they came to be involved in all this.” Id. at 15, Page ID 193. Referring to information contained in the presentence reports, the court characterized the straw buyers as “unsophisticated,” “law-abiding,” “decent hardworking people” who had “give[n] back to their community through their churches, through their schools, through their just daily lives.” Id. at 21–22, Page ID 199–200. The court emphasized that “[m]any of them were not looking to get rich,” but “were looking for some way to make monies for their retirement, for college tuition, some of them to donate to worthy causes.” Id. at 22, Page ID 200. The court characterized the straw buyers as having been “caught up” in Coppenger's scheme, a scheme motivated by his “pure greed,” and “desire to live a high life.” Id. The court determined that the lives of not only the straw buyers, but also their families, their spouses, and their children had been “devastated” and “forever altered.” Id. at 21–22. The court referred in particular to a long-term teacher who can no longer teach and a school administrator whose career is over. Among the harms visited on the straw buyers generally, the court identified economic harm, loss of reputation, lost jobs, lost careers, enormous restitution obligations, and obligations to pay attorney fees and costs.
Based on this information, and considering the sentencing factors set forth at 18 U.S.C. § 3553(a), the court, in the interest of just punishment, varied upward from the high end of the advisory Guidelines range by 23 months, sentencing Coppenger to 120 months on count 1, and 60 months on count 2, to be served concurrently. When the court asked at the end of the sentencing hearing, per United States v. Bostic, 371 F.3d 865 (6th Cir.2004), whether there was any additional objection, Coppenger's counsel responded, “No, Your Honor.”
Coppenger challenges his sentence as substantively and procedurally unreasonable. Sentencing challenges are reviewed for abuse of discretion. Gall v. United States, 552 U.S. 38, 51, 128 S.Ct. 586, 169 L.Ed.2d 445 (2007) ; see also United States v. Carter, 510 F.3d 593, 600 (6th Cir.2007). An abuse of discretion occurs when the reviewing court is left with the definite and firm conviction that the sentencing court committed a clear error of judgment. United States v. Batti, 631 F.3d 371, 379 (6th Cir.2011). An abuse of discretion occurs when a sentencing court relies on clearly erroneous findings of fact, improperly applies the law, or uses an erroneous legal standard. United States v. Munoz, 605 F.3d 359, 366 (6th Cir.2010).
A court will be deemed to have abused its discretion and imposed a substantively unreasonable sentence if it imposed a sentence arbitrarily, based on impermissible factors, or unreasonably weighed a pertinent factor. United States v. Adkins, 729 F.3d 559, 563 (6th Cir.2013). Coppenger argues that the district court committed substantive legal error by imposing a sentence based on an impermissible factor: treating Coppenger's co-conspirators as victims to justify the upward variance.
A court will be deemed to have abused its discretion and imposed a procedurally unreasonable sentence if it failed to calculate the Guidelines range properly; treated the Guidelines as mandatory; failed to consider the factors prescribed at 18 U.S.C. § 3553(a) ; based the sentence on clearly erroneous facts; or failed to adequately explain the sentence. Adkins, 729 F.3d at 563. Coppenger contends the district court committed procedural error by varying from the advisory Guidelines based on information contained in undisclosed, inaccessible presentence reports without giving him notice and fair opportunity to respond.
Because Coppenger failed to preserve this procedural objection by first giving the district court the opportunity to address and remedy it, we review only for plain error. United States v. Vonner, 516 F.3d 382, 385–86 (6th Cir.2008). To demonstrate plain error, an appellant must prove: (1) that an error occurred in the district court; (2) that the error was plain, i.e., obvious or clear; (3) that the error affected defendant's substantial rights; and (4) that this adverse impact seriously affected the fairness, integrity, or public reputation of the judicial proceedings. Id. at 386.
We first address Coppenger's procedural-unreasonableness claim that he was improperly denied notice and opportunity to respond to information relied on to impose the upward variance. The parties' arguments revolve initially around the import of the Supreme Court's ruling in Irizarry v. United States, 553 U.S. 708, 128 S.Ct. 2198, 171 L.Ed.2d 28 (2008). In Irizarry, the Court construed the requirement in Federal Rule of Criminal Procedure 32(h) that the sentencing court give the parties reasonable notice “[b]efore the court may depart from the applicable sentencing range on a ground not identified for departure either in the presentence report or in a party's prehearing submission.” Fed.R.Crim.P. 32(h). The Court held that this notice requirement applies only to “departures” and does not apply in connection with a “variance” from the sentencing range, such as we have here. Id. at 714–15, 128 S.Ct. 2198. Hence, per Irizarry, advance notice is not required under Rule 32(h) before a sentencing court elects, on...
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...when court relied on facts from probation officer’s confidential recommendation but excluded such facts from PSR); U.S. v. Coppenger, 775 F.3d 799, 805-06 (6th Cir. 2015) (Rule 32 violation when court based upward departure on confidential information included in PSR); U.S. v. Gray, 905 ......