United States v. Wittig
| Decision Date | 17 June 2008 |
| Docket Number | No. 07-3051.,07-3051. |
| Citation | 528 F.3d 1280 |
| Parties | UNITED STATES of America, Plaintiff-Appellee, v. David C. WITTIG, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Tenth Circuit |
Richard L. Hathaway, Assistant United States Attorney (Eric F. Melgren, United States Attorney, and Christine E. Kenney, Assistant United States Attorney, with him on the brief), Kansas City, KS, for Plaintiff-Appellee.
Lisa R. Eskow of Weil, Gotshal & Manges (Steven Alan Reiss, J. Nicholas Bunch, and Carol A. Funk, with her on the briefs), Austin, TX, for Defendant-Appellant.
Before HARTZ, O'BRIEN and HOLMES, Circuit Judges.
David C. Wittig appeals—for the third time—from his sentence for conspiracy, bank fraud and money laundering. We vacated his first two sentences (51 months imprisonment and 60 months imprisonment). United States v. Weidner, 437 F.3d 1023 (10th Cir.2006) (Wittig I); United States v. Wittig, 206 Fed.Appx. 763 (10th Cir.2006) (unpublished) (Wittig II). The district court has now sentenced Wittig to 24 months imprisonment, followed by a three-year term of supervised release with special conditions, including an occupational restriction. United States v. Wittig, 474 F.Supp.2d 1215 (D.Kan.2007) (Wittig III). Wittig appeals from the prison sentence and the occupational restriction. Exercising jurisdiction pursuant to 18 U.S.C. § 3742(a), we affirm the sentence but reverse the occupational restriction.
We will not repeat all of the facts underlying Wittig's appeal, as they are set forth in detail in our two previous decisions. See Wittig I, 437 F.3d at 1027-32; Wittig II, 206 Fed.Appx. at 764-68. For present purposes, it is sufficient to state Wittig loaned $1.5 million to Clinton Odell Weidner II, the former president, chief executive officer, and general counsel of Capital City Bank in Topeka, Kansas. At the time he made the loan, Wittig was a customer of the bank and was chairman of the board, president and chief executive officer of Western Resources, Inc. (now Westar Energy, Inc.), the largest electric utility in Kansas. Both Wittig and Weidner intended to profit from the loan (in different ways) and both concealed the loan from the bank through false documentation.1
Wittig and Weidner were convicted of one count of conspiracy to submit false entries to a federally insured bank and to launder money in violation of 18 U.S.C. § 371; four counts of making a false bank entry in violation of 18 U.S.C. § 1005; and one count of money laundering in violation of 18 U.S.C. § 1957. Wittig was sentenced to 51 months imprisonment.2 In arriving at this sentence, the court looked to the 2002 version of the United States Sentencing Guidelines, which were mandatory at the time. It determined Wittig's base offense level was 6. See USSG § 2B1.1(a). It then applied two enhancements—the intended loss enhancement, USSG § 2B1.1(b)(1), and the gross receipts enhancement, USSG § 2B1.1(b)(12)(A)3— bringing Wittig's total offense level to 24. With a Criminal History Category of I, Wittig's guideline range was 51 to 63 months imprisonment.
In Wittig I, we affirmed Wittig's conviction but vacated his sentence and remanded for resentencing. 437 F.3d at 1027. We concluded the court erred in applying the gross receipts enhancement because the gross receipts from the offense had been properly attributed to Weidner and could not also be attributed to Wittig. Id. at 1046-47. We also determined the court erred in applying the intended loss enhancement because it did not adequately consider the collateral pledged by Wittig and did not find Wittig intended to deprive the bank of this collateral. Id. at 1048. On the basis of these errors, we remanded for resentencing. We noted the guidelines were no longer mandatory and instructed resentencing be conducted consistent with United States v. Booker, 543 U.S. 220, 125 S.Ct. 738, 160 L.Ed.2d 621 (2005). Id.
On remand, the court again used the intended loss and gross receipts enhancements to calculate Wittig's offense level. In justifying its use of the intended loss enhancement, the court acknowledged some credit should be given to the collateral pledged by Wittig, but discounted the value of the collateral, finding it was not "secured in a very secure fashion." Wittig II, 206 Fed.Appx. at 767 (quotations omitted). The court considered evidence from a related case involving Wittig and determined the bank fraud at issue here "was part of a larger scheme in which [Wittig] intended to cause loss to Westar Energy of more than $1 billion." Id. at 767-68 (quotations omitted).4 The court determined Wittig's total offense level was 24, resulting in a guideline range of 51 to 63 months imprisonment. The court imposed a sentence of 60 months. The court determined the sentence was reasonable under the 18 U.S.C. § 3553(a) factors5 and would be appropriate even if the intended loss and gross receipts enhancements did not apply.
In Wittig II, we held: 206 Fed.Appx. at 769 (citations omitted). We determined the court had disregarded Wittig I and impermissibly reapplied the gross receipts enhancement. Id. We also held the court erred in applying the intended loss enhancement because "we have been pointed to no evidence that Mr. Wittig intended the Bank to lose any money on its loan to him." Id. at 769-70. We rejected the government's argument that the sentence should be affirmed notwithstanding the district court's miscalculation of the offense level. Id. at 770. We stated: "[A]lthough the court gave reasons why it believed the imposed sentence was reasonable, it failed to explain what dramatic facts justified such an extreme divergence from the best estimate of Congress's conception of reasonableness expressed in the Guidelines." Id. (quotations omitted). We stated that to justify a non-guidelines sentence, "[t]he court would need to explain what the Guidelines failed to take into account and why that omitted factor is of such enormous consequence." Id.
The court has now sentenced Wittig to 24 months imprisonment. In arriving at this sentence, the court recognized "Wittig II clearly ruled that the applicable Guidelines range in this case is 0-6 months. . . ." 474 F.Supp.2d at 1226. However, the court determined the guidelines failed to take into account the "dramatic facts" of the case and thus imposed a sentence 18 months greater than the upper end of the guidelines range, a 300% variance.6 Id. at 1233. The court explained "a term of imprisonment of 24 months is sufficient, but not greater than necessary to comply with the purposes set forth in [§ 3553(a)]." Id. at 1234. The court also imposed a three-year term of supervised release with four special conditions, including an occupational restriction: "The defendant shall not be employed in any capacity in which he will have executive authority over any business, company or agency, and shall not engage in any financial agreements or negotiations involving any business, company or agency without the prior approval of the Court." (R. Vol. II at 270.) On appeal, Wittig challenges the reasonableness of the sentence and the imposition of the occupational restriction as a special condition of supervised release.7
Since Booker, this Court has reviewed sentences for reasonableness, guided by the factors set forth in 18 U.S.C. § 3553(a). United States v. Kristl, 437 F.3d 1050, 1053 (10th Cir.2006). Reasonableness has both a procedural component, encompassing the method by which the sentence is calculated, and a substantive component, which relates to the length of the sentence. Id. at 1055. In United States v. Smart, we noted it would be procedural error if a court failed to consider the § 3553(a) factors or considered factors outside the scope of § 3553(a). 518 F.3d 800, 803-04 (10th Cir.2008). A challenge to the sufficiency of the § 3553(a) justifications, on the other hand, raises a substantive challenge. Id. at 804. Wittig appears to be raising both a procedural and substantive challenge to his sentence. He contends the district court considered factors that were improper under § 3553(a)(1), (a)(2)(A) and (a)(6) (procedural error) and arrived at an unreasonable sentence in weighing the § 3553(a) factors (substantive error). Our review is for an abuse of discretion. See Gall v. United States, ___ U.S. ___, 128 S.Ct. 586, 591, 169 L.Ed.2d 445 (2007); Rita v. United States, ___ U.S. ___, 127 S.Ct. 2456, 2465, 168 L.Ed.2d 203 (2007) ().
In arriving at a sentence, a district court must consider "the nature and circumstances of the offense and the history and characteristics of the defendant" and "the need for the sentence imposed—[ ] to reflect the seriousness of the offense, to promote respect for the law, and to provide just punishment for the offense." 18 U.S.C. § 3553(a)(1), (a)(2)(A). The district court determined the advisory guideline range (0 to 6 months) did not adequately account for these factors because Wittig was involved in a fraudulent scheme involving a financial institution; he intended to profit (and did profit) from the fraud; and the fraud involved $1.5 million in gross receipts. See Wittig III, 474 F.Supp.2d at 1234-35. Having concluded the guidelines did not adequately account for the specific circumstances of the case, the court looked to the intended loss and gross receipts enhancements as guideposts for determining a proper sentence. See id. at 1234, 1238. As acknowledged by the court, Wittig I and II specifically foreclosed application of these enhancements. They did not,...
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