Justia.com Opinion Summary:
Appellant, the finance officer for the Standing Rock Housing Authority of the Standing Rock Sioux Tribe, pleaded guilty to theft concerning programs receiving federal funds and was sentenced to the statutory maximum of 120 months imprisonment. At issue was whether the district court committed procedural error when it departed upwards from the advisory U.S. Sentencing Guidelines range, U.S.S.G. 4A1.3, and when it considered ethnicity and other improper factors during sentencing. Also at issue was whether the sentencing was substantively unreasonable. The court held that the district court did not engage in impermissible double counting by departing upwards to criminal history category IV where the district court discussed the nature and circumstances of the offense and the history and characteristics of appellant, the need to avoid unwarranted sentencing disparities between similar defendants, and the need to provide restitution for the victims. The court also held that the sentence was substantively reasonable where any comments regarding race or national origin were not offered as an explanation for imposing sentence but reflected the district court's disagreement with appellant's counsel that the Guidelines were "fair" and that a Guidelines sentence of 70 to 87 months imprisonment was appropriate as a matter of law; where the district court's statements expressed its frustration about its inability to order restitution for an amount closer to the total loss of money rather than a comment on appellant's socio-economic status; and where the district court did not use appellant's lack of an addiction to justify the sentence, but rather to describe his state of mind as he carried out the embezzlement scheme.Receive FREE Daily Opinion Summaries by Email
Criminal case - Sentencing. District court did not commit plain error in determining that defendant's criminal history score underrepresented his actual criminal history and warranted an upward departure to criminal history category IV; district court adequately explained its 3553(a) analysis; sentence was not substantively unreasonable and did not rely on factors such as race, national origin or economic status.
United States Court of Appeals
FOR THE EIGHTH CIRCUIT
United States of America,
* Appeal from the United States
* District Court for the
* District of South Dakota.
Submitted: March 17, 2011
Filed: May 31, 2011
Before WOLLMAN, MURPHY, and GRUENDER, Circuit Judges.
WOLLMAN, Circuit Judge.
Ladarana Mees pleaded guilty to theft concerning programs receiving federal
funds, in violation of 18 U.S.C. § 666(a)(1)(A), and was sentenced to the statutory
maximum of 120 months’ imprisonment. Mees appeals his sentence, asserting that
the district court1 committed procedural error when it departed upwards from the
advisory U.S. Sentencing Guidelines range and when it considered ethnicity and other
improper factors during sentencing. Mees also argues that the sentence is
substantively unreasonable. We affirm.
The Honorable Charles B. Kornmann, United States District Judge for the
District of South Dakota.
From 1993 until 2009, Mees was the finance officer for the Standing Rock
Housing Authority (Housing Authority) of the Standing Rock Sioux Tribe. The
Housing Authority receives federal funding to help low-income Native American
families obtain housing by building new homes and renovating existing homes. Mees
began embezzling funds in 2003 by writing checks from the Housing Authority to
individuals and businesses under the guise of purchasing air purifiers, heaters, water
purifiers, and filters. Some of these items were purchased at significantly inflated
prices, while others never existed or were never received. The individuals and
businesses would send part or all of the money to Mees’s mother or a business that
he controlled. The Housing Authority suffered a total loss of $1,418,936 because of
Mees’s scheme. In October 2009, Mees was indicted with nine counts of theft
concerning programs receiving federal funds, in violation of § 666(a)(1)(A), and ten
counts of money laundering, in violation of § 1956(a)(1)(B)(i).
Mees pleaded guilty to count one, a theft concerning federal funds in the
amount of $19,650.00, and the remaining counts were dismissed. Prior to sentencing,
a presentence investigation report (PSR) was prepared that set forth Mees’s criminal
history, which included only one speeding ticket that was paid in 1999. The PSR
determined that Mees had no criminal history points, a criminal history category of I,
and an adjusted offense level of 27, resulting in an advisory Guidelines range of 70
to 87 months’ imprisonment.2
The adjusted offense level included: a 16-level increase because the loss
exceeded $1 million, see U.S. Sentencing Guidelines § 2B1.1(b)(1)(I); a 2-level
increase because the offense involved sophisticated means, id. § 2B1.1(b)(9)(C); a
4-level increase for Mees’s role as an organizer or leader, id. § 3B1.1(a); a 2-level
increase because he was in a position of trust, id. § 3B1.3; and a combined 3-level
reduction for his acceptance of responsibility, id. § 3E1.1(a), (b).
Before sentencing, the district court notified the parties that it was considering
“a very substantial upward departure” to a criminal history category of IV or higher
because the criminal history category assigned to Mees “seriously misrepresents his
past criminal activity.” The district judge stated that this was the “most outrageous”
embezzlement case he had seen in his fifteen years as a federal judge.
At sentencing, Wilbur Red Tomahawk—a member of the Standing Rock Sioux
Tribe and the Housing Authority’s newly-hired executive director—testified that the
amount embezzled could have funded the construction of fifteen new homes or the
renovation of thirty to forty existing homes. The funds, he asserted, would have
assisted 490 families who were waiting for housing assistance and who constituted
the “poorest of the poor.” Sentencing Tr. at 8. He requested that the district court
seek full restitution from Mees. The government and Mees both requested a sentence
within the advisory Guidelines range of 70 to 87 months’ imprisonment.
Describing the offense, the district court noted that Mees had developed a
“very clever scheme” involving his own mother and that he had committed “a very
calculated, cold hearted scheme to defraud people who had trust[ed] in [him].” Id.
at 25-26. The district court acknowledged that it was limited to seeking restitution
for the one count that Mees had pleaded guilty to, $19,650. After reciting the
advisory Guidelines range, the district court stated that it found that an upward
departure was appropriate and that Mees’s criminal history category should be IV
instead of I, explaining that “[a] criminal history category of I, II, or III would not
represent the actual criminal history of this defendant. He is a big time crook and has
been such for many years.” Id. at 27. It also found “that a lower criminal history
category would substantially under-represent the actual criminal history of this
defendant. His criminal activities have been widespread and extensive.” Id. at 28.
It determined that Mees’s criminal history also included his failure to pay income tax
on the embezzled funds and reasoned that each time Mees stole money should be
construed as a separate criminal act because it was “as though he walked into the
bank virtually every day and committed a bank robbery.” Id. at 27. Applying a
criminal history category of IV, the district court determined that the new advisory
range was 100 to 125 months’ imprisonment and noted that the statutory maximum
was 120 months. It then sentenced Mees to 120 months’ imprisonment, three years
of supervised release, and ordered him to pay restitution of $19,650 and a $100
A. Significant Procedural Error
We review the imposition of sentences by applying a deferential
abuse-of-discretion standard. United States v. Feemster, 572 F.3d 455, 461 (8th Cir.
2009) (en banc). We first ensure that the district court did not commit a significant
procedural error. Id. Procedural error includes “failing to calculate (or improperly
calculating) the Guidelines range, treating the Guidelines as mandatory, failing to
consider the § 3553(a) factors, selecting a sentence based on clearly erroneous facts,
or failing to adequately explain the chosen sentence—including an explanation for
any deviation from the Guidelines range.” Id.
1. Upward Departure
Mees contends that the district court erred procedurally when it determined that
Mees’s criminal history category underrepresented his actual criminal history.
Though Mees’s counsel asserted that a within-Guidelines sentence was reasonable,
he did not object to the district court’s upward departure. Accordingly, we review
only for plain error. To establish plain error, Mees must show that there was error,
that the error was plain, and that the error affected his substantial rights. See United
States v. Miller, 557 F.3d 910, 916 (8th Cir. 2009).
Section 4A1.3 provides that an upward departure may be warranted if “reliable
information indicates that the defendant’s criminal history category substantially
under-represents the seriousness of the defendant’s criminal history or the likelihood
that the defendant will commit other crimes.” Reliable information may include prior
convictions and “[p]rior similar adult criminal conduct not resulting in a criminal
conviction.” U.S. Sentencing Guidelines § 4A1.3(a)(2)(E) (2009). In determining
the extent of an upward departure, we have described the process that a district court
To impose an upward departure under § 4A1.3, the sentencing court first
must proceed along the criminal history axis of the sentencing matrix,
comparing the defendant’s criminal history with the criminal histories
of other offenders in each higher category . . . .
United States v. Azure, 536 F.3d 922, 931 (8th Cir. 2008) (quoting United States v.
Collins, 103 F.3d 143, 145 (8th Cir. 1997)). We do not require that the process be a
“ritualistic exercise in which the sentencing court mechanically discusses each
criminal history category it rejects en route to the category that it selects.” Id. But
the sentencing court must adequately explain why it determines that the intermediary
categories fail to meet the purposes of § 4A1.3. Id.
Mees asserts that the PSR indicated that his case “was a garden variety fraud
case” and that without any criminal convictions or adult criminal conduct besides the
instant offense, there is no proper rationale to depart upwards. He appears to argue
that the district court erred in relying on § 4A1.3(a)(2)(E) when it determined that
Mees’s criminal history category was underrepresented because the instant offense
included the entire embezzlement scheme.3 We disagree, for two reasons. First, the
In its statement of reasons accompanying the written judgment, the district
court “found [Mees’s] Criminal History Category I substantially under-represents the
seriousness of [his] criminal history and the likelihood that [he] will commit other
instant offense—one charge for theft concerning federal funds in the amount of
$19,650—did not encompass all of Mees’s criminal conduct that occurred during the
five-year embezzlement scheme. Second, § 4A1.3 permits the district court to depart
upwards when reliable information indicates that the defendant’s criminal history
category substantially underrepresents the seriousness of the defendant’s criminal
history. Mees did not object to the PSR’s discussion of his five-year embezzlement
scheme. The district court properly relied on the PSR to upwardly depart because it
constituted reliable information about Mees’s prior similar adult criminal conduct that
had not resulted in a criminal conviction.
Mees contends that the district court erred procedurally when it “arbitrarily
increased the criminal history category without mentioning the criminal histories of
other defendants in any of the higher criminal history categories.” See Azure, 536
F.3d at 931. The district court explained that a lower criminal history category would
be insufficient because Mees had been a “big time crook” for many years and his
criminal activities had been “widespread and extensive.” Sentencing Tr. at 27-28.
Although the district court did not specifically mention that it had considered the
criminal histories of other offenders in each intermediate criminal history category,
its findings were adequate to explain and support the departure in this particular case,
and thus there was no error.
crimes.” This tracks the language of § 4A1.3, which provides that an upward
departure may be warranted if “reliable information indicates that the defendant’s
criminal history category substantially under-represents the seriousness of the
defendant’s criminal history or the likelihood that the defendant will commit other
crimes.” (emphasis added). Mees’s argument that the record fails to support a
finding that he is especially likely to commit other crimes ignores the disjunctive
nature of § 4A1.3, which contemplates a departure for defendants who—like
Mees—have underrepresented criminal history, irrespective of the likelihood that
they will commit future crimes.
Mees also argues that the district court impermissibly double counted when it
used the same relevant criminal conduct both to increase his offense level and to
upwardly depart to a criminal history category of IV. In United States v. Thornberg,
we rejected a similar argument, noting that “[t]he guidelines embody the notion that
the severity of a sentence should be determined both by the seriousness of the
offense” and “by the offender and the need to deter him from further criminal
activity.” 326 F.3d 1023, 1027 (8th Cir. 2003) (internal quotation marks omitted).
“This same reasoning holds true when the conduct that has been used to establish the
offense level is also used to assess the need for an upward departure under § 4A1.3.”
Id. (citing United States v. Thin Elk, 321 F.3d 704, 708 n.3 (8th Cir. 2003)). Mees’s
criminal conduct involved theft concerning federal funds resulting in a total loss of
$1,418,936 over five years. This scheme impacted hundreds of families who needed
housing and constituted the “most outrageous” scheme that the district judge had ever
seen in his court. Sentencing Tr. at 27. The amount of loss, duration, and repetitive
nature of the embezzlement scheme; Mees’s role as a leader; and the fact that he
defrauded people who trusted him were relevant both to establish the seriousness of
the offense through his offense level and the need for an upward departure under
§ 4A1.3. Accordingly, the district court did not engage in impermissible double
counting by departing upwards to criminal history category IV.
2. Section 3553(a) Factors
Mees argues that the district court inadequately explained its decision under
§ 3553(a) and that it did not “undertake an individualized assessment of Mees in
relation to the statutory sentencing factors or sufficiently justify its substantial abovethe-range sentence with reference to any section 3553(a) factor.” Contrary to his
contention, however, the district court did not impose a substantial above-the-range
sentence, because the district court’s upward departure was proper. Furthermore,
there is no requirement that the district court recite every § 3553(a) factor, United
States v. Battiest, 553 F.3d 1132, 1136 (8th Cir. 2009), and a defendant’s PSR,
arguments by the parties, and other evidence at the sentencing hearing all provide the
court with enough information on which to base a sentencing decision. See United
States v. Struzik, 572 F.3d 484, 487 (8th Cir. 2009). After reviewing the record, we
find ample evidence that the court considered the § 3553(a) factors, explicitly
referencing the § 3553(a) factors and stating “And I’ve detailed, I believe, some of
those factors in my discussion here.” Sentencing Tr. at 29. The court discussed the
nature and circumstances of the offense and the history and characteristics of the
defendant, the need to avoid unwarranted sentencing disparities between similar
defendants, and the need to provide restitution for the victims. The district court’s
reasoning was sufficient, and thus we conclude that the district court did not commit
a significant procedural error.
B. Substantive Error
Mees challenges the substantive reasonableness of his sentence. In the absence
of procedural error, we consider the substantive reasonableness of the sentence
imposed under an abuse-of-discretion standard, taking into account the totality of the
circumstances. Feemster, 572 F.3d at 461. “If the defendant’s sentence is within the
Guidelines range, then we may but are not required to, apply a presumption of
reasonableness.” Id. (internal quotation marks omitted). “A district court abuses its
discretion when it (1) fails to consider a relevant factor that should have received
significant weight; (2) gives significant weight to an improper or irrelevant factor; or
(3) considers only the appropriate factors but in weighing those factors commits a
clear error of judgment.” Id. (internal quotations marks omitted).
Mees asserts that the district court committed substantive error when it
considered ethnicity and other improper factors in determining his sentence. U.S.
Sentencing Guidelines § 5H1.10 provides that race, sex, national origin, creed,
religion, and socio-economic status are not relevant in the determination of a
sentence. During sentencing, the district court stated that it had “never been a fan of
the Federal Sentencing Guidelines. . . . And the irony is that the Sentencing
Guidelines were especially harsh toward Indian people, Native American people, who
come into federal court and receive a sentence about three times longer than what any
Norwegian receives in state court.” Sentencing Tr. at 26. Mees asserts that a
“‘reasonable observer’ could conclude, after hearing or reading the district court’s
remarks in this case, that the court sought to balance the unfairness it perceived in the
lengthy sentences received by Native Americans in federal court by giving the longest
possible sentence to a white defendant whose victims were Native American.” He
relies on United States v. Kaba, 480 F.3d 152, 159 (2d Cir. 2007), to assert that the
sentence must be vacated and the case remanded to another district judge. We
disagree, because the remark was made in response to Mees’s counsel’s statement
that the U.S. Sentencing Guidelines “are fair—shouldn’t say that—but they are
appropriate as a matter of law, . . . .” The record demonstrates that any comments
regarding race or national origin were not offered as an explanation for imposing the
sentence. Instead, they reflected the district court’s disagreement with Mees’s
counsel that the Guidelines were “fair” and that a Guidelines sentence of 70 to 87
months’ imprisonment was appropriate as a matter of law.
Mees also argues that the district court improperly considered his socioeconomic status when it stated that it was relying on Mees’s ability to pay restitution
in determining his sentence. The district court compared Mees to another criminal
defendant who had embezzled more than $300,000 from a hospital. It stated that a
defendant’s possibility of paying the restitution was a “big factor” in these types of
cases. Id. at 23. The district court was unable to order Mees to pay full restitution
because it was limited to the theft amount in Mees’s count of conviction, not by his
actual ability to pay or his socio-economic status. 18 U.S.C. § 3663. Thus, the
district court’s statement expressed its frustration about its inability to order
restitution for an amount closer to the total loss of $1,418,936 rather than a comment
on Mees’s socio-economic status.
Mees implausibly contends that the district court indicated that it would have
sentenced him more favorably had he committed the crime as a result of a drug or
alcohol addiction problem. In describing the scheme, the district court stated, “This
isn’t a crime that arose out of drunkenness or being high on drugs or something. This
is a very calculated, cold-hearted scheme to defraud people who had trust in you.”
Sentencing Tr. at 26. As we read the record, the district court did not use Mees’s lack
of an addiction to justify the sentence, but rather was describing Mees’s state of mind
as he carried out the embezzlement scheme.
Having found neither procedural error nor anything to rebut the presumption
of reasonableness that attaches to Mees’s within-Guidelines-range sentence, we
conclude that the district court did not abuse its discretion in imposing the sentence.
The sentence is affirmed.