Unpublished Disposition, 898 F.2d 157 (9th Cir. 1987)

No. 87-5066.

United States Court of Appeals, Ninth Circuit.

Before WALLACE and FLETCHER, Circuit Judges, and C.A. MUECKE,^***  District Judge.

MEMORANDUM^***

Defendant Phipps appeals the denial of his Fed.R.Crim P. 35(b) motion to reduce the twelve-year sentence imposed upon him by the district court following defendant's conviction on multiple counts of mail fraud (18 U.S.C. § 1341), interstate transportation of fraudulently-obtained property (18 U.S.C. § 2314), securities fraud (15 U.S.C. § 77(g) (a), 77x), and aiding and abetting (18 U.S.C. § 2(b)).

FACTS AND PROCEDURAL BACKGROUND

At trial, appellant was convicted of fraudulent activities as a stockbroker and investment analyst. The testimony indicated that over a three-year period, appellant induced clients to give him approximately $591,000 for investments. Rather than invest the money, appellant used it for his own purposes. For example, the evidence showed that part of the money from Ms. Lynn Palmer, one of defendant's victims, was used by appellant to purchase a home in Paradise Valley, Arizona.

During direct examination, appellant contended that the $591,000 could be repaid because appellant had recently received approximately $500,000 from a "Mr. Richmond" as repayment on an earlier "loan" that appellant allegedly made to Mr. Richmond. On cross-examination, however, appellant's story did not remain intact. Appellant admitted that no loan to Mr. Richmond had been made and that he lied about this fact.

The day after it was established that appellant lied about the loan, he pleaded guilty to fifteen counts involving mail and securities fraud, interstate transportation of fraudulently obtained property, and aiding and abetting, in return for the government's promise not to prosecute appellant for perjury.

On October 17, 1986, the district court sentenced appellant to twelve years in prison, the term recommended by the presentence report. There was some confusion in the presentence report as to the figures associated with defendant's frauds. The report contained three figures: the total amount invested, $800,000; the total amount diverted by appellant, $591,000; and the amount lost by the victims, $432,000. During the sentencing hearing, defense counsel did not dispute the accuracy of the figures, but merely raised a concern that the Parole Commission might misinterpret them. The trial court judge stated that the differences in the figures did not make any difference to him in terms of his sentencing decision.

At the hearing, the court had before it the government's request that appellant be sentenced to over twelve years in prison. Because of the large number of counts, appellant could have been sentenced to a total of ninety years in prison and fined up to $78,000.00. The court reviewed appellant's criminal conduct, his perjury on the stand, and expressed outrage that appellant used money entrusted to him to make a payment on a luxury home in Paradise Valley. Despite the Court's outrage, the Court followed the presentence report and sentenced appellant to twelve years.⁴  The district court also ordered restitution in the amount of $432,000.

On February 17, 1987, appellant filed a Rule 35 motion to reduce sentence. The district court denied the motion on February 25, 1987. The district court received and filed the notice of appeal on March 10, 1987. Appellant did not date the notice of appeal. There was no indication in the record when appellant gave the notice of appeal to prison officials. This Court remanded to the district court for a determination as to when the notice of appeal was delivered to prison officials for forwarding. See Logan v. Central Freight Lines, 858 F.2d 993, 994 (5th Cir. 1988) (per curiam) (case remanded to district court to allow pro se prisoner to show that notice of appeal timely filed); Thompson v. Montgomery, 853 F.2d 287, 288 (5th Cir. 1988) (per curiam) (same). The district court made a finding that the notice of appeal was timely filed. Thus, this Court is presently poised to consider the merits of defendant's appeal.

ANALYSIS

The purpose of Rule 35 is to allow the district court to determine whether the original sentence was unduly harsh. United States v. Rapp, 814 F.2d 1398, 1399 (9th Cir. 1987). In addition, a Rule 35 motion allows a court to consider new information that was discovered after the original sentencing. This court reviews the district court's denial of a Rule 35 motion for abuse of discretion. United States v. Ruffen, 780 F.2d 1493, 1495 (9th Cir.), cert. denied, 479 U.S. 963 (1986). Under the old sentencing procedures,⁵  if a sentence was within the statutory limits, it is reviewed only for an abuse of discretion. See United States v. Monaco, 852 F.2d 1143, 1151 (9th Cir. 1988), cert. denied, 109 S. Ct. 864 (1989). If the district court fails to individualize the sentence, however, the sentence must be reversed and the defendant must be resentenced. Id.

Appellant has not provided any new facts or considerations that support a change in the original sentence. Appellant merely claimed a "new-found" remorse for his criminal acts and a plan for financial restitution to the victims involved. The trial court, which observed the defendant, heard all the evidence and witnessed appellant's perjury and subsequent confession, had the discretion to disregard appellant's claims of remorse. This Court cannot substitute its judgment for the discretion of the trial court. In short, appellant has not provided any argument that suggests the trial court abused its discretion in denying the Rule 35 motion. Accordingly, the trial court's denial is affirmed.

Appellant argues that the district court violated his due process rights when it sentenced him on the basis of "misinformation of constitutional magnitude." See United States v. Tucker, 404 U.S. 443, 447, 92 S. Ct. 589, 592 (1972). The substance of appellant's allegation is that the trial court failed to comply with Rule 32⁶  because it did not make a specific factual finding as to the amount of money at issue. Appellant has waived any arguments as to the validity of the figures in the presentence report because he failed to raise this issue in his motion before the district court. See United States v. Grewal, 825 F.2d 220, 223 (9th Cir. 1987). However, even assuming the validity of the figures was properly raised in the trial court, this Court would still affirm the trial court's decision. During the sentencing hearing, appellant's attorney did not question the accuracy of the figures. Rather, he argued that inclusion of the figures in the presentence report would prejudice appellant. In any event, the court stated that the differences in the numbers would not be taken into account when sentencing appellant. Further, appellant has not shown that the figures in any way confused the Parole Commission.

Appellant also claims that the trial court's statement that appellant used money from a Ms. Palmer to buy a house in Paradise Valley is materially false. Appellant has failed to show that the challenged information is materially false and that the district court relied on the information in sentencing him. Farrow v. United States, 580 F.2d 1339, 1359 (9th Cir. 1978) (sentence vacated if challenged information is (1) false or unreliable and (2) court based its sentence on improper information). The documents defendant submitted do not prove that Ms. Palmer money was not used to help pay for the house. Further, during the trial, appellant admitted that he used Mrs. Phillips' money to buy the house in Paradise Valley.

Appellant asserts that the district court and the prosecution were unfairly biased. With respect to the trial judge, appellant argues that the judge's strong language at sentencing constituted an unfair bias. Evidence of judicial bias must come from an extrajudicial source. United States v. Studley, 783 F.2d 934, 939 (9th Cir. 1986). It is insufficient if a party attacks the judge's impartiality because of information or beliefs formed while the judge was acting in a judicial capacity. Monaco, 852 F.2d at 1147. The exception to that rule is if the judge's remarks in a judicial context show "such pervasive bias and prejudice that it constitutes bias against a party." Id.

This Court does not believe the judge was biased. The trial judge's statements were not extrajudicial because they involved the judge's performance while acting in his judicial capacity, i.e., the judge's comments were supported by the evidence. Further, the judge's expression of outrage does not demonstrate pervasive bias or prejudice. As in Monaco, the judge's statements in this case "simply reflect that the judge was appropriately outraged at the enormity of the crime that had taken place...." Id. Finally, appellant has not made any showing of an extrajudicial source of the alleged bias.

Appellant also argues that the prosecution was biased when it referred to him as a habitual criminal, a liar, and one who had a history of anti-social behavior. The government argues that these statements were not meant to imply that appellant had a prior criminal record. Rather, the statements were simply a summation of the evidence from the trial, and a reminder of the fact that appellant engaged in a long-term fraud and committed perjury. "Courts must allow the prosecution the freedom to strike 'hard blows' on the evidence and all fair inferences therefrom, but courts may not permit 'foul' blows." United States v. Prantil, 764 F.2d 548, 555 (9th Cir. 1985). We find that the prosecution's statements were "hard blows" supported by the evidence. The statements did not constitute "foul" blows and therefore they cannot serve as the basis for reversal of the trial court's sentence.

Appellant cites statistics that arguably show that his sentence of twelve years is above the mean. He argues that since his sentence is more severe than that given to others in a similar situation, it amounts to "cruel and unusual punishment" in violation of the Eighth Amendment.

A sentence within the limits set by a valid statute may not be overturned as a violation of the eighth amendment. United States v. Washington, 578 F.2d 256, 258 (9th Cir. 1978) (affirming five-year sentence for failing to appear for sentencing on misdemeanor conviction). Unless the twelve year sentence is found to be "grossly out of proportion to the severity of the crime," there can be no violation of the Eighth Amendment. Coker v. Georgia, 433 U.S. 584, 592, 97 S. Ct. 2861, 2866 (1977). Given the large number of counts that appellant pled guilty to, he was eligible for approximately ninety years in jail. Merely because the trial judge sentenced him to some term over the mean or median does not prove that the twelve year sentence is cruel and unusual punishment. Moreover, the judge simply followed the probation report's sentencing recommendation despite a recommendation from the government that appellant be sentenced in excess of twelve years. In short, we conclude that appellant's twelve year sentence does not violate the Eighth Amendment.

Appellant makes two arguments concerning his parole eligibility. First, he challenges the Parole Commission's decision to set his eligibility for parole at sixty months. Appellant has waived this argument because he did not raise it in the district court. An issue not raised at the district court level will not be considered on appeal. See Grewal, 825 F.2d at 223.

Second, appellant challenges the district court's decision to impose sentence under the parole eligibility provisions of 18 U.S.C. § 4205(a) rather than 18 U.S.C. § 4205(b) (2). Under Sec. 4205(a) appellant is required to serve one-third of his sentence before he is eligible for parole whereas under Sec. 4205(b) (2) the Parole Commission is given discretion to set parole eligibility. The substance of appellant's argument is that the district court imposed too harsh a punishment by sentencing him under Sec. 4205(a). We find appellant's argument to be of little merit. He has provided no basis that would entitle him to be sentenced under Sec. 4205(b) (2). Further, appellant has failed to show how the district court abused its discretion. See United States v. Gwaltney, 790 F.2d 1378, 1387-89 (9th Cir. 1986), cert. denied 479 U.S. 1104 (1987).

CONCLUSION

We find that the twelve year sentence imposed upon appellant is AFFIRMED.