Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca4-08-04497/USCOURTS-ca4-08-04497-0/pdf.json

Parties Involved:
Frederick L. Engle
Appellee
United States of America
Appellant

Document Text:

PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

UNITED STATES OF AMERICA, 

Plaintiff-Appellant,

v.  No. 08-4497

FREDERICK L. ENGLE,

Defendant-Appellee. 

Appeal from the United States District Court

for the Western District of North Carolina, at Charlotte.

Graham C. Mullen, Senior District Judge.

(3:04-cr-00055-GCM-DCK-1)

Argued: September 23, 2009

Decided: January 13, 2010

Before TRAXLER, Chief Judge, WILKINSON, Circuit

Judge, and Margaret B. SEYMOUR, United States District

Judge for the District of South Carolina,

sitting by designation.

Vacated and remanded by published opinion. Chief Judge

Traxler wrote the opinion, in which Judge Wilkinson and

Judge Seymour joined.

COUNSEL

ARGUED: Matthew Theodore Martens, OFFICE OF THE

UNITED STATES ATTORNEY, Charlotte, North Carolina,

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for Appellant. James Frank Wyatt, III, WYATT & BLAKE,

LLP, Charlotte, North Carolina, for Appellee. ON BRIEF:

Gretchen C. F. Shappert, United States Attorney, Charlotte,

North Carolina, for Appellant. Robert A. Blake, Jr., WYATT

& BLAKE, LLP, Charlotte, North Carolina, for Appellee.

OPINION

TRAXLER, Chief Judge:

Frederick Engle pleaded guilty to tax evasion, see 26

U.S.C.A. § 7201 (West 2002), and the district court sentenced

him to four years’ probation, conditioned on the service of

eighteen months’ home detention with work release and international travel privileges. The government appeals, challenging the reasonableness of the sentence. For the reasons set

forth below, we vacate the sentence and remand for resentencing.

I.

The information presented during the proceedings below

and set out in the presentence report establish that Engle, who

was 64 years old when he pleaded guilty, had worked as a

manufacturing representative in the shoe industry for more

than 30 years. His business required frequent and extensive

overseas travel every year.

The criminal information charged Engle with tax evasion

for the 1998 tax year only, although the information alleged

that Engle had evaded taxes for sixteen years between 1984

and 2002 and owed taxes of more than $600,000. With interest and penalties included, Engle’s total tax liability exceeded

$2 million. Engle’s actions to avoid taxes included providing

false information to the Internal Revenue Service, placing

assets in others’ names, and funneling income through shell

corporations that he controlled.

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Engle pleaded guilty to the information in 2004 and proceeded to sentencing almost two years later, in February

2006. Based on a total offense level of 17 and a category II

criminal history, the presentence report calculated Engle’s

advisory sentencing range as 27-33 months. The district court

concluded that Engle’s criminal history was overstated and

therefore reduced Engle’s criminal history to category I,

yielding an advisory sentencing range of 24-30 months.

The government sought a term of imprisonment within the

advisory range. The government noted that it prosecutes relatively few tax evasion cases and generally does so only

"under the most egregious circumstances." J.A. 31. The government argued that Engle had avoided his tax obligations for

sixteen years and that a period of incarceration was necessary

to provide adequate deterrence to others. The district court,

however, was primarily concerned with making Engle pay his

tax debt. See J.A. 31c ("Right now I’ve got this guy and I can

try to figure out a way to get the money out of him."). The

court concluded that Engle’s ability to earn significant

amounts of money warranted a variance sentence:

I’m satisfied that a variance is appropriate under the

circumstances for the reason that I believe that I can

craft a sentence that addresses both the need to

deprive this defendant of his physical liberty for a

significant period of time . . . and leave him free to

attempt to generate the income that would permit

him to settle up with the Internal Revenue Service.

I’m sympathetic to the government’s position.

Absent . . . the apparent ability to generate the

income, I would simply impose a Guideline sentence

and be done with it. 

J.A. 31e. The court sentenced Engle to four years’ probation,

conditioned on confinement for eighteen months in a community corrections center. The court directed that Engle, while in

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the community corrections center, would be permitted to

travel to China as required by his job.

Shortly after the district court announced the sentence, the

court learned that the Bureau of Prisons would not permit

international travel while Engle was housed in a community

corrections center. The district court therefore vacated the

sentence and indicated that Engle would be resentenced at a

later date. 

The district court finally reconvened the sentencing proceeding in March 2008, more than two years after the original

sentencing proceeding. At the hearing, the district court asked

whether Engle had yet paid any of the taxes owed. Counsel

for Engle stated that he had $25,000 in his trust account available for immediate payment and that Engle would be receiving $100,000 in commissions in the next month or two that

could be applied to the taxes owed. The government, however, pointed out that in the four years since pleading guilty

and the two years since the first sentencing proceeding, Engle

had paid only $480 on the taxes owed, and that payment was

made only two weeks earlier, after Engle was contacted by

the IRS. The government again argued that a sentence of

imprisonment within the range suggested by the Guidelines

was appropriate, given Engle’s conduct. Defense counsel

argued that Engle’s tax problems were not the result of an

extravagant lifestyle, but instead were simply "money management" problems, J.A. 61, spurred on by the costs of three

divorces and the need to put his children through college and

support his current wife and her children. Counsel for Engle

noted that since the first sentencing proceeding Engle had

repaid a $500,000 advance owed to his employer and now had

$125,000 available to repay the government. Counsel argued

that Engle had "done the best he can under the circumstances"

and that he now had the ability "to repay every cent the government is owed in terms of this criminal case, as well as any

civil proceedings that may ensue." J.A. 60.

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The district court asked the government whether it wanted

"blood or money," J.A. 60, and the government again stated

that it wanted a sentence within the range set by the Guidelines. The court believed the government was thus asking for

"[b]lood[,] [b]ecause if I take away his income, you’re not

going to get" the money. J.A. 60. The court ultimately

decided that a sentence similar to the one previously imposed

would be appropriate. The court explained its reasoning:

In considering the nature and circumstances of the

offense and the history and characteristics of the

defendant, I [agree that this is] more of a money

management issue than anything else, [and] the issue

that I face as judge in trying to deal with this is to

try to apply these factors in a way that appropriately

punishes Mr. Engle but does not destroy his ability

to pay that money.

I find that a very difficult proposition because I

think that there is a need to reflect the seriousness of

the offense. I’m concerned that I’m not hearing any

effort to try to balance this out other than let’s put

him in jail and take away his livelihood, which will

destroy the ability of the government to collect the

money. I don’t see how that necessarily promotes

respect for the law. 

Anything at all that happens to make him pay

money affords some deterrence to criminal conduct.

I don’t see any need to protect the public from further crimes of the defendant. He has no need for

vocational training or other correctional treatment

unless, of course, I were to order him incarcerated,

in which case he would need the vocational training.

* * *

It . . . seems to me to be appropriate to come up

with a variance that would reflect this man’s ability

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to pay this money. And I think that considering all

of that — I don’t see any unwarranted sentencing

disparities. Look at the Gall case. This isn’t a particularly terrible . . . variance. It seems to be, then, that

the sentence I originally thought about[, w]hich was

fours years probation, 18 months house arrest on

electronic monitoring with work release, and he will

be permitted to make trips to China as demanded by

his employer.

J.A. 63-64. The district court directed that the $25,000 held by

Engle’s attorney be paid to the IRS immediately and that

Engle pay the $100,000 in expected commissions within 90

days. The district court, however, declined to order full restitution, believing that the IRS "has adequate means to do that."

J.A. 65.

The government appeals the sentence imposed by the district court. According to the government, the district court’s

probationary sentence is inconsistent with the policy considerations underlying prosecutions for income tax evasion, and

Engle’s substantial earning potential was not a sufficient reason to decline to impose a sentence of imprisonment as recommended by the Guidelines.

II.

Since the Supreme Court’s decision in Booker, the Sentencing Guidelines are no longer mandatory but are instead "effectively advisory." United States v. Booker, 543 U.S. 220, 245

(2005). When sentencing criminal defendants in the postBooker world, district courts must first correctly calculate the

defendant’s sentence under the Sentencing Guidelines. The

court must then allow the parties to argue for what they

believe to be an appropriate sentence and consider those arguments in light of the factors set forth in 18 U.S.C.A. § 3553(a)

(West 2000 & Supp. 2009). See Gall v. United States, 552

U.S. 38, 49-50 (2007); United States v. Abu Ali, 528 F.3d 210,

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260 (4th Cir. 2008). Sentencing courts are statutorily required

to state their reasons for imposing sentence. See 18 U.S.C.A.

§ 3553(c) (West Supp. 2009). Although a comprehensive,

detailed opinion is not necessarily required, the court’s explanation must nonetheless be sufficient "to satisfy the appellate

court that [the district court] has considered the parties’ arguments and has a reasoned basis for exercising [its] own legal

decisionmaking authority." Rita v. United States, 551 U.S.

338, 356 (2007); see also Gall, 552 U.S. at 50 ("After settling

on the appropriate sentence, [the district court] must adequately explain the chosen sentence to allow for meaningful

appellate review and to promote the perception of fair sentencing."). District courts have "sizeable discretion" when

sentencing, Abu Ali, 528 F.3d at 266, and appellate review is

limited to determining whether the sentence imposed is reasonable, see Gall, 552 U.S. at 40-41.

An appellate court’s reasonableness review has procedural

and substantive components. The procedural component

requires us to ensure that the district court 

committed no significant procedural error, such as

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 sentenceincluding an explanation for any deviation from the

Guidelines range.

Id. at 51. The substantive component of reasonableness

review requires us to "take into account the totality of the circumstances." Id. While we may consider the extent of any

variance from the advisory Guidelines range, we "must give

due deference to the district court’s decision that the

§ 3553(a) factors, on a whole, justify the extent of the variance." Id. Given the institutional advantages of district courts

with regard to sentencing matters, see United States v. Evans,

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526 F.3d 155, 166 (4th Cir.), cert. denied, 129 S. Ct. 476

(2008), all sentences, including sentences "significantly outside the Guidelines range," must be reviewed "under a deferential abuse-of-discretion standard." Gall, 552 U.S. at 41.

In challenging the sentence imposed by the district court,

the government advances several interrelated arguments. The

government contends that the district court failed to properly

consider all of the factors set forth in 18 U.S.C.A. § 3553(a).

According to the government, the district court failed to properly consider the seriousness of Engle’s conduct and the need

for deterrence, but at the same time placed too much emphasis

on restitution and Engle’s financial ability to pay restitution.

The government argues that the court’s emphasis on restitution is inconsistent with the policy considerations underlying

the Guidelines’ sentencing recommendations for tax crimes

and that granting lenience to defendants with the financial

ability to satisfy large restitution awards amounts to bad public policy. The government also argues that, given the dispositive weight that the district court assigned to the need for

restitution, the court’s refusal to order restitution renders the

sentence unreasonable.

A.

We begin with the government’s claim that the court failed

to properly consider all of the § 3553(a) factors. Specifically,

the government argues that the district court failed to consider

or failed to properly consider the seriousness of the offense,

see 18 U.S.C.A. § 3553(a)(2)(A); the need for the sentence to

provide sufficient deterrence, see id. § 3553(a)(2)(B); the policy statements issued by the Sentencing Commission, see id.

§ 3553(a)(5); and the need to avoid unwarranted sentence disparities, see id. § 3553(a)(6).1

1The government describes its arguments as going to the substantive

reasonableness of Engle’s sentence. In our view, many of the government’s arguments — such as its claim that the district court failed to con8 UNITED STATES v. ENGLE

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Although the district court mentioned the seriousness of the

offense, the court did so only in passing, without any real

explanation of how the court believed that factor affected its

sentencing decision. See J.A. 63 ("I think that there is a need

to reflect the seriousness of the offense."). And while the

court mentioned disparities, it was only to say that there were

no unwarranted disparities. See J.A. 64. Since the district

court made it clear that defendants without Engle’s earning

capacity would have been sentenced to prison, something

more than a denial of even the existence of disparities would

seem to be required. See United States v. Carter, 564 F.3d

325, 329 (4th Cir. 2009) ("[T]he district court need not robotically tick through § 3553(a)’s every subsection. But at the

same time, a talismanic recitation of the § 3553(a) factors

without application to the defendant being sentenced does not

demonstrate reasoned decisionmaking or provide an adequate

basis for appellate review." (citation and internal quotation

marks omitted)).

We need not decide, however, whether the district court’s

cursory treatment of these factors would in and of itself be

enough to require resentencing. Questions about the seriousness of the offense and the possibility of unwarranted sentencing disparities are interrelated with what we believe to be the

more important issue in this case—the district court’s failure

to consider the relevant policy statements issued by the Sentencing Commission.

As the government notes, the policy statements issued by

the Sentencing Commission make it clear that the Commission views tax evasion as a serious crime and believes that,

sider all of the § 3553(a) factors — are more properly viewed as

challenging the procedural reasonableness of the sentence. See Gall, 552

U.S. at 51. We will, of course, consider the government’s arguments on

their merits, without regard to whether the government attached the correct descriptive label to those arguments. 

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under the pre-Guidelines practice, too many probationary sentences were imposed for tax crimes. See U.S.S.G. Ch. 1, Pt.

A, introductory cmt. 4(d) (1998) ("Under pre-guidelines sentencing practice, courts sentenced to probation an inappropriately high percentage of offenders guilty of certain economic

crimes, such as theft, tax evasion, antitrust offenses, insider

trading, fraud, and embezzlement, that in the Commission’s

view are ‘serious.’"). The policy statements also reflect the

Commission’s view that general deterrence — that is, deterring those other than the defendant from committing the crime

— should be a primary consideration when sentencing in tax

cases. As the Commission has explained,

The criminal tax laws are designed to protect the

public interest in preserving the integrity of the

nation’s tax system. Criminal tax prosecutions serve

to punish the violator and promote respect for the tax

laws. Because of the limited number of criminal tax

prosecutions relative to the estimated incidence of

such violations, deterring others from violating the

tax laws is a primary consideration underlying these

guidelines. Recognition that the sentence for a criminal tax case will be commensurate with the gravity

of the offense should act as a deterrent to would-be

violators.

U.S.S.G. Ch. 2, Pt. T, introductory cmt. (1998). The policy

statements likewise make it clear that the Commission

believes that there must be a real risk of actual incarceration

for the Guidelines to have a significant deterrent effect in tax

evasion cases. The Guidelines therefore 

classify as serious many offenses for which probation was frequently given and provide for at least a

short period of imprisonment in such cases. The

Commission concluded that the definite prospect of

prison, even though the term may be short, will serve

as a significant deterrent, particularly when com10 UNITED STATES v. ENGLE

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pared with pre-guidelines practice where probation,

not prison, was the norm.

Id. at Ch. 1, Pt. A, introductory cmt. 4(d) (1998) (emphasis

added). Given the nature and number of tax evasion offenses

as compared to the relatively infrequent prosecution of those

offenses, we believe that the Commission’s focus on incarceration as a means of third-party deterrence is wise. The vast

majority of such crimes go unpunished, if not undetected.

Without a real possibility of imprisonment, there would be little incentive for a wavering would-be evader to choose the

straight-and-narrow over the wayward path.

The district court, however, made no mention of these specific policy statements, nor did the court more broadly

acknowledge the general principles underlying the Guidelines’ approach to sentencing for serious economic crimes like

tax evasion. The only statements made by the district court

touching on these areas seem to suggest that the district court

fundamentally disagreed with the Guidelines’ approach in

these cases. The court mentioned the seriousness of the

offense only to chastise the government for remaining firm in

its view that a term of imprisonment was warranted, see J.A.

63, and the court seemed to effectively reject any need for

third-party deterrence with its statement that "[a]nything at all

that happens to make him pay money affords some deterrence

to criminal conduct," J.A. 63 (emphasis added). 

We recognize that in the post-Booker sentencing world,

district courts must give due consideration to relevant policy

statements, but those policy statements are no more binding

than any other part of the Guidelines. Accordingly, district

courts may "vary from Guidelines ranges based solely on policy considerations, including disagreements with the Guidelines." United States v. Kimbrough, 552 U.S. 85, 101 (2007)

(internal quotation marks and alteration omitted). Nonetheless, "when a non-Guidelines sentence runs directly counter to

the Commission’s position, either because the district court

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has erroneously applied the departure provisions or because it

has determined in a ‘mine-run case’ that the Guidelines range

fails to reflect the § 3553(a) factors, "‘closer review may be

in order.’" Evans, 526 F.3d at 165 n.4 (quoting Kimbrough,

552 U.S. at 109). If "closer review" of a district court’s policy

disagreement is ever warranted, we believe it would be appropriate in this case. Nonetheless, given the facts of the case and

the degree of the variance, we find the record insufficient to

permit even the routine review for procedural reasonableness

required in cases involving an outside-the-Guidelines sentence. See Gall, 552 U.S. at 50 (explaining that if the sentencing judge "decides that an outside-Guidelines sentence is

warranted, he must consider the extent of the deviation and

ensure that the justification is sufficiently compelling to support the degree of the variance. We find it uncontroversial that

a major departure should be supported by a more significant

justification than a minor one."); cf. Rita, 551 U.S. at 356-57

("[W]hen a judge decides simply to apply the Guidelines to

a particular case, doing so will not necessarily require lengthy

explanation.").

This case is a "mine-run" tax-evasion case only in the most

generous (to Engle) understanding of that phrase. Engle

evaded his tax responsibilities for sixteen years, altered tax

returns prepared by his accountants, directed that income to

him be paid to shell corporations in an effort to avoid withholding and reporting requirements, and lied to the IRS about

the existence of these corporate accounts.2 Yet, with facts that

could perhaps be viewed as warranting an above-Guidelines

2These facts make it difficult to accept the district court’s characterization of the offense and Engle’s conduct as merely reflecting "money management" problems. The post-Booker level of deference that must be

accorded to a district court’s sentencing decisions, of course, does not

insulate the court’s factual findings from appellate review. See Gall, 552

U.S. at 51 (explaining that a district court makes a procedural error if it

"select[s] a sentence based on clearly erroneous facts"); see also United

States v. Harvey, 532 F.3d 326, 336-37 (4th Cir. 2008) ("In assessing

whether a sentencing court properly applied the Guidelines, we review the

court’s factual findings for clear error and its legal conclusions de novo.

Clear error occurs when, although there is evidence to support it, the

reviewing court on the entire evidence is left with the definite and firm

conviction that a mistake has been committed." (citations and internal quotation marks omitted)). 

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sentence, the district court imposed a significantly belowGuidelines sentence, based on views that are at odds with the

clearly expressed policy views of the Sentencing Commission. The district court did not acknowledge the policy statements, and there is nothing in the statements made by the

court during sentencing that offer any insight into why the

court believed that a prison term was not required. There is no

explanation of why the court believed that allowing Engle to

continue to work and travel was consistent with the seriousness of his offense or that it would provide adequate deterrence for other would-be tax evaders. Moreover, as noted

above, for more than four years after pleading guilty to tax

evasion, Engle continued to work and travel, yet he paid

nothing towards his tax debt. It was not until two weeks

before the second sentencing hearing that Engle made the first

payment (of less than $500), and even that nominal payment

was spurred on by an inquiry from the IRS. The absence of

any payments during a time when there is the greatest incentive for a defendant to be on his best behavior raises questions

about the district court’s belief that restitution would provide

sufficient deterrence to Engle himself.

Under these circumstances, we cannot determine whether

the sentence is reasonable without a fuller explanation of the

reasoning behind the district court’s view that a term of

imprisonment as recommended by the Guidelines was not

warranted and why restitution alone would provide adequate

deterrence in this case.3See Gall, 552 U.S. at 50 (noting that

district court "must make an individualized assessment based

on the facts presented"). Because the district court’s explanation of its decision to vary significantly from the Guidelines’

3Engle’s failure to make any significant payment on his tax debt during

the four-year period before sentencing likewise raises questions about the

district court’s refusal to order full restitution, an order that would carry

with it significant benefits from the government’s perspective with regard

to collection and enforcement. On remand, the district court should reconsider this issue and provide a more detailed explanation should it again

conclude that a restitution order is not required. 

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sentencing recommendation is insufficient to permit meaningful appellate review, we must vacate the sentence and remand

for new sentencing further proceedings.

B.

Although the procedural deficiencies addressed above

require us to vacate the sentence, we believe it proper to

address a substantive aspect of the district court’s sentence

that may arise on remand — the court’s near-exclusive focus

on Engle’s financial ability to pay restitution. See United

States v. Cavera, 550 F.3d 180, 191 (2d Cir. 2008) (en banc)

("At the substantive stage of reasonableness review, an appellate court may consider whether a factor relied on by a sentencing court can bear the weight assigned to it.").

It may well be that, in many cases, the sentencing decision

will ultimately turn on a single § 3553(a) factor — for example, when most of the factors point only lightly in favor of a

Guidelines or variance sentence, but one factor points very

strongly towards one sentence or the other. And we can envision cases where the ability to pay restitution might properly

be the deciding factor leading to a probationary sentence. For

example, if the Guidelines calculation yields a short sentencing range, a district court might well elect a probationary sentence in order to permit the defendant to continue working so

as to satisfy a restitution award, particularly if the restitution

is owed to a private party. In such cases, the deference owed

to district courts’ sentencing decisions might require appellate

courts to affirm the sentence, even if the appellate court

would have weighed the factors differently. See Gall, 552

U.S. at 51 (requiring appellate courts to "give due deference

to the district court’s decision that the § 3553(a) factors, on a

whole, justify the extent of the variance"); Cavera, 550 F.3d

at 189, 191 ("[W]e will not substitute our own judgment for

the district court’s on the question of what is sufficient to

meet the § 3553(a) considerations in any particular case," and

"we do not consider what weight we would ourselves have

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given a particular factor."). Nonetheless, "inherent in the concept of reasonableness is the notion that the rare sentence may

be unreasonable, and inherent in the idea of discretion is the

notion that it may, on infrequent occasion, be abused." Abu

Ali, 528 F.3d at 266 (citation and internal quotation marks

omitted). And in this case, we believe the district court abused

its discretion by focusing so heavily on Engle’s ability to pay

restitution.

The district court made it clear that, but for Engle’s earning

capacity, it would have imposed a within-Guidelines sentence

of imprisonment: "[A]bsent the apparent ability to generate

the income, I would simply impose a Guideline sentence and

be done with it." J.A. 31e. In fact, other statements suggested

that the district court believed not simply that Engle’s payment of his tax debt was desirable, but that it was improper

for the government to seek anything other than restitution. See

J.A. 60 (asking the government whether the government

wanted "blood or money"); J.A. 63 ("I’m concerned that I’m

not hearing any effort to try to balance this out other than let’s

put him in jail and take away his livelihood, which will

destroy the ability of the government to collect the money. I

don’t see how that necessarily promotes respect for the law.").

Reduced to its essence, the district court’s approach means

that rich tax-evaders will avoid prison, but poor tax-evaders

will almost certainly go to jail. Such an approach, where

prison or probation depends on the defendant’s economic status, is impermissible. That was the consistent view of courts

before Booker and its progeny. See, e.g., United States v.

DeMonte, 25 F.3d 343, 347 (6th Cir. 1994) ("[W]e may not

sentence a poor convict more harshly than a rich convict simply because the rich convict is better able to make restitution."); United States v. Bolden, 889 F.2d 1336, 1340 (4th Cir.

1989) ("[W]e do not think that the economic desirability of

attempting to preserve [the defendant’s] job so as to enable

him to make restitution warrants a downward adjustment from

the guidelines."); cf. U.S.S.G. § 5H1.10, p.s. (forbidding conUNITED STATES v. ENGLE 15

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sideration of defendant’s socio-economic status as a basis for

departure).

While Booker and Gall have worked a substantial change

in the manner in which sentencings are conducted and have

vested district courts with substantially broader discretion

than they possessed under the former sentencing regime, we

do not believe the change wrought by Booker was so great

that it permits district courts to rest a sentencing decision

exclusively on such constitutionally suspect grounds. See

Bearden v. Georgia, 461 U.S. 660, 661 (1983) (noting the

"impermissibility of imprisoning a defendant solely because

of his lack of financial resources"); United States v. Seacott,

15 F.3d 1380, 1389 (7th Cir. 1994) ("Allowing sentencing

courts to depart downward based on a defendant’s ability to

make restitution would thwart the intent of the guidelines to

punish financial crimes through terms of imprisonment by

allowing those who could pay to escape prison. It would also

create an unconstitutional system where the rich could in

effect buy their way out of prison sentences."); cf. United

States v. Tomko, 562 F.3d 558, 570 (3d Cir. 2009) (en banc)

(post-Gall case affirming probationary sentence in tax evasion

case; rejecting the government’s claim that the district court

permitted the defendant "to buy his way out of prison"

because "the record exhibits no connection between the fine

imposed and the failure to incarcerate"). 

We do not mean to suggest that the economic status of a

defendant is never relevant in sentencing. It is certainly relevant when setting the amount of a fine or establishing a payment schedule, and it may well have relevance in other ways

in other cases. And while we recognize the broad discretion

possessed by district courts with regard to sentencing matters,

we have no difficulty concluding that in this case, the district

court abused that discretion. Accordingly, we conclude that

the sentence imposed by the district court was substantively

unreasonable because the sentencing decision was driven

solely by Engle’s ability to pay restitution.

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III.

To summarize, we conclude that the district court committed significant procedural error by minimizing of the seriousness of Engle’s conduct, failing to consider the relevant policy

statements and the need for general deterrence, and insufficiently explaining the reasons for its view that a term of

imprisonment was not required. We also conclude that the

sentence imposed was substantively unreasonable because of

the district court’s improper focus on Engle’s financial ability

to pay restitution. Accordingly, we hereby vacate Engle’s sentence and remand for further proceedings before a different

district court judge.4

VACATED AND REMANDED

4The district judge in this case also presided over the tax-evasion trials

and sentencings in United States v. Baucom, No. 08-4493, and United

States v. Davis, No. 08-4512, cases that, though not formally consolidated

with this case, were argued before this court seriatim with this appeal. In

the sentencing hearing for Davis, the district judge, who has taken senior

status, stated that he no longer intended to handle criminal matters. 

UNITED STATES v. ENGLE 17

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