good morning may it please the court my name is daniel pearl as a member of the court's criminal justice act panel and i represent mr pena soft i want to confine my argument this morning to the procedural unreasonableness of the sentence specifically in that the district court imposed a sentence that was a variance of the guidelines one above the guidelines and i want to begin by making a characterization of this of this case this was an unremarkable garden variety fraud in almost every meaningful way the amount of the loss if you go by the restitution amount was two point three million dollars and by the standards of the southern district of new york there is nothing remarkable about that the number of victims was eight this was a single defendant case with a single count indictment that was three pages long the docket sheet is four pages long the description of offense conduct in the p s r took all of two thirds of the page the guidelines calculations took half a page nothing was terribly remarkable about this fraud and yet the district court citing a buff a of reasons at the sentencing imposed a sentence above the guidelines which was on reasonable if the court will look at page eighty one of the truth of the appendix of the append of the appe district court said stated that there were two factors that the guidelines did not take into account one was the number of diamonds that mr penn has sauf to fraud at the sellers of well of course the number of diamonds absolutely is taken into account by the guidelines because you reach the loss amount by multiplying the number of diamonds by the value of the diamonds that's how you get to two point three million dollars so the guidelines we take that into account the other factor that the district court pointed to in saying the guidelines don't take this into account was the duration of the fraud while the duration of this fraud was all of two years that's hardly  unremarkable most frauds take at least a couple of years from the time they begin to the time that the defendant is apprehended so there was nothing in particular that wasn't taken into account by the guidelines which specifically say in the commentary to section to be one point one fraud in compas is a wide variety of conduct and the specific offense characteristics are designed to take into account different circumstances in different kinds fair observation by the district court and it was one of the characteristics of this fraud but every not in the guidelines but every fraud has some level of trust that is violated if you look at the three cases that are cited by the government in its brief ok the willows case for example the last case makes reference to particularly vulnerable immigrants the kilkenny case i believe makes reference to elderly victims those are truly vulnerable victims and again there are ways of taking these things into account and one of the other unruh mark excuse me remarkable things about this fraud case was that there were no to the guidelines it is frankly unusual for me to open a p s r and see a base level of seven a level sixteen for the for the loss amount and then not a single enhancement for sophisticated means or for  aggravated circumstances such as as a particular level of economic harm on a victim and the fact that there were no enhancements again should say suggest to this court and it should have told district court that this was at the end of the day and i don't mean any disrespect to the victims but this was a minor run fraud no different than really most other frauds that are prosecuted in this in this circuit what was also remarkable about this sentencing was after the district court finally did come down on that forty eight month sentence and there were pages and pages of transcripts that preceded it and the government pointed it out rightly so i would have done the same there was certainly a lot of discussion before the sentence was imposed but there was never a moment that the district court said here's why forty eight is sufficient but not greater than necessary but forty one would not be sufficient because after all there is a range that the guidelines gives in these cases and the range here was thirty three to forty one months so if you want to take judge jacobs the fact that this industry relied on trust or if you want to take the minor bail violations of missing his curfew by an hour or two or testing positive of the fact which i believe is found that some number of the victims were ruined their their businesses collapse well again the result of this i mean you know there are many businesses that can withstand a million dollar hit but here there were people who were rude well your honor there was as i stated before that was not listed as a two level enhancement and so the guidelines do have the ability to take substantial economic harm into account if it's one victim it's a two level enhanced but i think it's five or more victims it's a four level and has been so whatever it was we presume this court must presume talking about an accounting well this court has to presume that the guidelines were properly calculated in the gun and neither probation nor the government nor the district court said there should be an enhancement here because of the economic harm to these victims and before i before i finish up i would point the court to right after that forty eight months sentence was imposed the court actually said i considered a sentence of seven and a half years for a first time offender for someone who stole some diamonds and again i'm not minimizing it but seven and a half years which translates to ninety months puts us at about a twenty seven or a twenty eight in the guidelines and that he'd be chilling but it didn't happen well i understand but it provide and said on the record and then wrote into the judgment and commitment order he with respect to the conditions of confinement i find that a traditional prison setting is appropriate for this defendant again there has to be something special there has to be something extra there has to be something unique or different to take it out of the guidelines that's what the commentary says and that's what the law requires is a carcinogen yes he has is interested in traditional be sure as he's at the f c i fort dix in a regular medium security prison you reserved for bottle i have thank you the court my name is russell capone i represent the government on appeal and i represented the government in the proceedings below the defendant defrauded roughly eight victims of more than two million dollars friends they were people whose businesses he devastated in some cases the businesses were forced to shut down and as as your honor as indicated he operated in a business where trust was  critical and he violated that trust repeatedly when he was arrested and released on bail he violated his bail four times displaying as the district court found a brazenness which was consistent with the brazenness of the crime  e sentence was pending yes your honor for this conduct he was sentenced to four years that sentence which is seven months above the guidelines was not unreasonable it was not shockingly high as the substantive and reasonable in this case law requires and it was the result of a pretty detailed and thorough analysis and balancing of the thirty five fifty three a factors by the district court and it did not result from procedural error there's no i didn't seem to be any allegation here of a traditional procedural error such as the incorrect guidelines cack calculation or a failure to consider the thirty five fifty three a factors judge for us clearly did all of that instead the argument seems to be that it's procedural error in a case that is a typical fraud case to go above the guidelines and that is not found in the case law with respect to the argument that judge farse shouldn't have considered  the value or the number of the diamonds as a basis for varying because those are already factored into and the guidelines are sort of garden variety factors she specifically found as as  has indicated that it wasn't just the number of value of the diamonds that was driving her reasoning here it was also factors such as the number of victims the and the real devastating impact on the victims in this case the that the defendant was operating in an industry where trust was critical and abused it and that he did so for a period of two years which is which is not a short period of time in which to perpetrate a fraud those were  those were the factors that she relied on in addition to his repeated bail violations and and it's well within her discretion to weigh the sentencing factors to consider mitigating circumstances as she  did clued the defendant's lack of criminal history in and and the impact that this would have on his family but to decide that those factors were outweighed by the aggravating factors in this case as the court is aware she has  the guideline again in light of the particularly deferential review want to p o was not unreasonable either procedurally as you point out the violations they all conditions while he was awaiting sentencing  but they do seem trivial i mean what is being forty minutes later something another one is you know you now want a third one seems to be that he went to the diamond district without any finding that he conducted business i'm not even sure who would talk to him but that's another you know it's not only that the type of violations that the fact that there were four of them in my experience up for bail violation one is awaiting sentencing is excessive it's significant in the last one in fact it was after judge forest had had issued an order putting the defendant on notice that she was considering immediate reason and even after receiving that order he violated again and i think her concern was the term that he violated by going to the diamond that was a condition of his bail and should not go there yes not just for business obviously would be no worse if he's there for business not getting the message and the message needed to be sent from a deterrent perspective and that was that was among her bases and i don't think it was procedurally or substantively unreasonable unless the court has any further district court did specifically get that right at that during during the sentencing hearing there was a think the court was under the impression originally that he couldn't be there but then it was clarified he could be there he just couldn't do business and that was part of the reason  gremlins it couldn't possibly be i mean it's the reason again the reason that he got over the guidelines appears to be because the district court was under this impression that the guidelines don't take into account the number of diamonds and the guidelines don't take into account the fraud with respect to the bail violations look if the bail violations are that severe really they're not i mean we've all been we've all been doing this for a long time we all know real the bail violations versus routine frankly expected bail violations and i'm not i'm not suggesting that he gets an award but if he really is violating bail the consequence is you revoke his bail you don't add seven months to a sentence with respect to the substantial financial hardship that the government is relying on and that the district court relied on again the government didn't ask for probation didn't recommend that the district court didn't find it it's a two level or a four level and hansen in the guidelines that nobody saw and what you're not supposed to do is to say well there's not enough here to add a chill level and handsome and but we're going to rely on the economic on the financial damage to go to to impose a variance of the guidelines and finally with respect to the minor deviation again we're back to the issue of the difficulty of these minor variations above the guidelines on the one hand they're minor so they seem somewhat in consequential but the flipside to that is if forty why is forty one  enough but forty eight is enough and there was never a point that the district court explained that and that was the court's requirement that with the courts and the fact that it didn't do so renders the sentence procedurally unreasonable thank you thank you will reserve decision