Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca8-03-01897/USCOURTS-ca8-03-01897-0/pdf.json

Parties Involved:
Phillip O'Malley
Appellee
United States of America
Appellant

Document Text:

United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 03-1897

___________

United States of America, *

*

Appellant, *

* Appeal from the United States

v. * District Court for the

* Western District of Missouri

Phillip O'Malley, *

*

Appellee. *

___________

Submitted: December 18, 2003

Filed: April 22, 2004 

___________

Before MELLOY, McMILLIAN, and BOWMAN, Circuit Judges.

___________

McMILLIAN, Circuit Judge.

The United States of America (hereinafter the government) appeals from a final

judgment entered in the United States District Court for the Western District of

Missouri following its criminal prosecution of Phillip O’Malley, who was found

guilty by a jury of conspiring to commit bank, wire, and mail fraud, in violation of 18

U.S.C. §§ 371, 1341, 1343, and 1344. After determining O’Malley’s applicable range

of imprisonment under the sentencing guidelines to be 24 to 30 months, the district

court sentenced O’Malley to three years of probation with no term of imprisonment

and ordered O’Malley to pay $459,047.02 in restitution, a $10,000.00 fine, and a

$100.00 special assessment. United States v. O’Malley, No. 01-5022-03-CR (W.D.

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Mo. Mar. 4, 2003) (Judgment). For reversal, the government argues that the district

court erred at sentencing in (1) determining the relevant amount of financial loss to

the victim and (2) departing from the sentencing guidelines. For the reasons stated

below, we vacate O’Malley’s sentence and remand the case to the district court for

further proceedings consistent with this opinion.

Jurisdiction

Jurisdiction was proper in the district court based upon 18 U.S.C. § 3231.

Jurisdiction is proper in this court based upon 18 U.S.C. § 3742(b) and 28 U.S.C.

§ 1291. The notice of appeal was timely filed pursuant to Fed. R. App. P. 4(b). 

Background

On July 27, 2001, O’Malley, the owner and operator of several businesses in

Pittsburg, Kansas, along with Paul Doyon and Marc Lininger, business development

managers for Sam’s Club Membership Warehouses (hereinafter Sam’s Club), were

charged in the district court in a three-count indictment. Count I of the indictment

alleged that, in 1996, O’Malley, Doyon, and Lininger jointly participated in a

conspiracy to commit fraud in the sales and distribution of chlorofluorocarbon gases,

commonly known as freon. Counts II and III of the indictment were subsequently

dismissed and are not at issue in the present appeal. 

Doyon pled guilty and was sentenced to two years imprisonment. Lininger also

pled guilty and agreed to testify for the government against O’Malley. Lininger’s

sentencing was postponed until after O’Malley’s trial.

At O’Malley’s trial, the government’s evidence showed the following. During

the relevant time period, Sam’s Club was a large volume purchaser and distributor of

freon. Business development managers for Sam’s Club were responsible for

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1

In preparing O’Malley’s presentence investigation report, the probation officer

used the 1995 version of the sentencing guidelines. The district court and the parties

have similarly assumed that the 1995 version of the guidelines applies in the present

case. Section 1B1.11 of the 2002 version of the sentencing guidelines provides in

pertinent part: “The court shall use the Guidelines Manual in effect on the date that

the defendant is sentenced,” except that, “[i]f the court determines that use of the

Guidelines Manual in effect on the date that the defendant is sentenced would violate

the ex poste facto clause of the United States Constitution, the court shall use the

Guidelines Manual in effect on the date that the offense of conviction was

committed.” In the present case, application of the 2002 Guidelines Manual, which

was in effect at the time of O’Malley’s sentencing hearing, would result in a higher

sentence than application of the 1995 version, which was in effect at the time of the

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marketing Sam’s Club products to large volume purchasers. Ordinarily, large volume

purchases and sales by Sam’s Club were controlled by its purchasing and sales

department. However, because of the volatility of the freon market, Sam’s Club

allowed some large volume purchases and sales of freon to be controlled by its

business development managers at the local level. Lininger and Doyon were among

the business development managers who were permitted to have such control.

Lininger and Doyon arranged with O’Malley for Sam’s Club to purchase freon from

one or more of O’Malley’s companies at inflated prices. Lininger, Doyon, and

O’Malley also arranged transactions in which one of O’Malley’s companies would

purchase freon from Sam’s Club and then sell it to a third party at a higher price.

O’Malley would give Lininger and Doyon each a share of his profits (i.e., kickbacks),

which they referred to as “commissions.” Sam’s Club had no knowledge of this

scheme involving O’Malley, Lininger, and Doyon. 

The jury found O’Malley guilty of conspiracy to commit bank, wire, and mail

fraud, as alleged in Count I of the indictment. 

Pursuant to the district court’s instructions, a probation officer prepared a

presentence investigation report (PSR) for O’Malley.1

 According to the PSR, the

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offense. Under the 2002 Guidelines Manual, USSG § 2B1.1, a crime of fraud with

an amount of loss between $400,000 and $1,000,000 results in an adjusted base

offense level of 20. Without any additional offense level adjustments, O’Malley’s

sentencing range under the 2002 guidelines would be 33 to 41 months.

2

The PSR noted that the district court had already ruled at Doyon’s sentencing

hearing that the amount of the loss to the victim was $459,047.02.

3

O’Malley and Lininger were sentenced at the same hearing on March 4, 2003.

Because Lininger had cooperated with the government and agreed to testify against

O’Malley, he received a sentence of probation under USSG § 5K1.1.

4

In its written objections, the government argued that the amount of loss should

be $736,460.00. However, the government corrected its position at the sentencing

hearing and argued for a $756,460.00 loss figure, which included the $20,000.00 in

kickbacks paid to the three unindicted co-conspirators. See Sentencing Transcript at

3. 

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difference between the amount O’Malley paid for the relevant quantities of freon and

the amount for which he sold the same quantities of freon equaled $756,460.00. Of

that sum, O’Malley retained $277,412.98, Doyon and Lininger each received

$229,523.51, and three unindicted co-conspirators received $20,000 altogether. The

PSR concluded that the amount of the loss to the victim was $459,047.02, which

represented the sum of Doyon’s and Lininger’s gains from the conspiracy.2

 The PSR

further concluded that O’Malley’s total offense level was 17, his criminal history

category was I, and his resulting sentencing range was 24 to 30 months. The PSR

recommended restitution in the amount of $459,047.02. 

The parties filed objections to the PSR, which were addressed at O’Malley’s

sentencing hearing.3

 On the question of the amount of the victim’s loss, the

government argued that the loss to Sam’s Club should include, not just the kickbacks

received by Doyon and Lininger, but all of the co-conspirators’ ill-gotten gains – for

a total loss of $756,460.00.4

 The government maintained, and the district court

acknowledged, that the findings made at Doyon’s sentencing hearing were not

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binding for purposes of sentencing O’Malley. The government also asserted that, if

the loss figure were to be increased, O’Malley’s restitution, offense level, sentencing

range, and fine range should also be increased accordingly. 

In his written objections to the PSR, O’Malley expressly noted that he did not

dispute the PSR’s factual account of the relevant transactions; however, he did

dispute the characterization of any financial gain to him, Doyon, or Lininger as a

“loss” to Sam’s Club. At the sentencing hearing, O’Malley argued that the loss figure

should be no more than $459,047.02, but also again suggested that “even the payment

of $459,047.02 overstates the seriousness of the offense because there is no indication

that that was a loss to Sam’s Club, particularly in a dollar-for-dollar amount.”

Sentencing Transcript at 5. 

Upon consideration, the district court held that, for all relevant sentencing

purposes including restitution, the amount of the loss to Sam’s Club was

$459,047.02. See id. at 6-7. 

After ruling on the issue of the loss to the victim, the district court next

considered whether a downward departure was warranted, as requested by O’Malley.

At that time, O’Malley’s attorney called the district court’s attention to character

letters that the defense had previously submitted to the district court. In addition,

defense counsel presented for the first time a letter dated February 25, 2003, from

T.A. Dunham, the President of Gold Bank, to James R. Hobbs, O’Malley’s attorney

(hereinafter the “Gold Bank letter”), which stated in relevant parts: 

Dear Mr. Hobbs,

This letter is to inquire as to the terms of remitting restitution to the

Clerk of the Court in Springfield, Mo. on behalf of our customer Philip

O’Malley. We recognize that this matter is under the jurisdiction of a

Federal Court and the Presiding Judge will ultimately make the decision

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5

As stated above, the Gold Bank letter had not previously been submitted to the

district court, although the character letters had been. Defense counsel explained:

“And I have with me, Judge, the original of the letter from Gold Bank. At the time

we submitted letters to the Court, we had not yet received that original.” Sentencing

Transcript at 8.

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as to the disposition of Mr. O’Malley’s case. However, as Mr.

O’Malley’s counsel we would like to point out to you certain concerns

the bank feels very strongly about with respect to funding our

customer’s request.

1. It is imperative in our judgment that Mr. O’Malley

receive a probated sentence if he borrows these

funds in order to manage his businesses and

liquidate certain properties necessary to reduce his

outstanding loans from the bank to a manageable

level. . . .

2. As certain real estate properties will need to be

liquidated to repay this additional debt, . . . the bank

is concerned that if Phil is incarcerated, potential

buyers of these properties in our small community

will believe there is a sense of urgency in selling

these properties and tender below market offers.

3. We feel it is necessary to require that Mr. O’Malley

receive a probated sentence to fund this credit

facility under the terms and conditions of our

commitment.

Sincerely,

T.A. Dunham, Community Bank President - Pittsburg

The Gold Bank letter and the character letters were then collectively marked

as Defendant’s Exhibit 1.5

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Thereafter, defense counsel argued that a downward departure was warranted

based upon extraordinary restitution, as well as the adverse economic impact that

O’Malley’s incarceration would have on the community. The government responded

by arguing that neither of these two factors identified by O’Malley, whether

considered alone or in combination, warranted a downward departure. The

government argued that the payment of restitution at that point was not extraordinary

and should, at most, be considered under the sentencing guidelines as a possible

ground for finding acceptance of responsibility. As a policy matter, the government

emphasized, a white collar defendant’s payment of restitution should not influence

the sentencing court to depart downward. 

At the close of both parties’ arguments on the issue of downward departure,

defense counsel stated:

[A]t this time I would like to tender to the Court Exhibit 1 that has

the original letter from Mr. Dunham of Gold Bank along with the other

letters as well as attached to it with a paper clip is a cashier’s check paid

to the Clerk of the Court, remittor Phil O’Malley, on Gold Bank in the

amount of $459,047.02.

Sentencing Transcript at 21.

As indicated above, the district court determined that O’Malley’s applicable

sentencing range under the guidelines was 24 to 30 months, but departed from the

guidelines and sentenced O’Malley to three years of probation, with no prison term.

The district court explained: 

[P]ursuant to USSG 5K2.0 [this case is] outside the heartland based

upon[:] 1) the extraordinary restitution effort of the defendant to take out

a loan to pay restitution immediately; 2) the seriousness of defendant’s

role is overstated; 3) Pittsburg, Kansas, being a small farming

community, the Court recognizes the economic impact and importance

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of keeping defendant’s business operating and the provision of

employment for over 60 people in the community.

United States v. O’Malley, No. 01-5022-03-CR (W.D. Mo. Mar. 4, 2003) (Statement

of Reasons). This appeal followed.

Discussion

Amount of loss

The government argues that the district court clearly erred in determining that

the amount of financial loss to Sam’s Club resulting from O’Malley’s offense was the

total amount of Doyon’s and Lininger’s kickbacks, $459,047.02, instead of the full

amount of money retained by all of the co-conspirators, $756,460.00. The

government acknowledges that it bore the burden of proof on this issue. However,

the government contends that it met its burden by introducing evidence, based upon

records kept by O’Malley himself, showing the amount of money received by each

of the co-conspirators in each of their unlawful transactions. As a consequence of the

district court’s improper valuation of the loss, the government argues, O’Malley was

permitted to retain the $277,412.98 he obtained through his criminal conduct. That

result, the government argues, is contrary to the well-established principle that a

criminal offender should not be permitted to profit from his or her crime. See, e.g.,

United States v. Whatley, 133 F.3d 601, 606 (8th Cir.) (“We are not inclined to allow

the defendants a profit for defrauding people or a credit for money spent perpetrating

a fraud.”), cert. denied, 524 U.S. 940 (1998). Addressing the district court’s apparent

effort to be consistent with its prior sentencing of co-defendant Doyon, the

government contends that Doyon’s restitution order was erroneous, and now the

district court has simply repeated the error. The government also argues that it is not

a defense to say that the victim nevertheless retained an objectively fair profit. The

government explains that, under such circumstances, the victim is harmed by the

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denial of full and honest disclosure, which would have permitted it to benefit even

more. Thus, the government concludes, the measure of harm must be the benefit that

all of the co-conspirators reaped as a result of their unlawful scheme.

In support of the district court’s finding regarding the amount of the loss,

O’Malley notes that, under the guidelines (currently USSG § 2B1.1 and formerly

USSG § 2F1.1), the loss determination need not be exact, but may be a reasonable

estimate of the victim’s loss based upon the available evidence. O’Malley argues

that, because the prosecution’s theory was an “intangible rights theory of mail and

wire fraud,” the payments made to Doyon and Lininger accurately reflected the value

of Sam’s Club’s loss of honest services from its employees. O’Malley further argues

that, because it was not unlawful for him simply to make a business profit, the profit

he made was not part of the relevant loss. He also argues that, under the guidelines

and interpretive case law, the actual gain incurred by a defendant ordinarily is not the

proper measure of the loss to the victim and should only be used as an alternative

estimate of the loss where it cannot otherwise be calculated. Turning to the cases

cited by the government, O’Malley distinguishes them on grounds that they involved

more egregious wrongdoing and did not involve an “intangible rights theory,” as in

the present case. For example, he argues, in United States v. Whatley, 133 F.3d at

606, this court rejected the defendant’s argument that the amount of loss should

exclude the cost of running the business in question because the entire business was

based upon a fraud. By contrast, he argues, his businesses were themselves not

illegal or fraudulent, only certain transactions were. Therefore, he concludes, the

profits incurred by his businesses were legitimate and should not be treated as part

of Sam’s Club’s loss under the guidelines. 

We review the district court’s determination of the amount of loss to the victim

for clear error. United States v. Oligmueller, 198 F.3d 669, 671 (8th Cir. 1999). We

argree with the government that allowing O’Malley or his companies to retain the

profits incurred from his unlawful conspiracy with Doyon and Lininger would

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improperly permit him to benefit from his illegal conduct. His profits were part of

Sam’s Club’s losses. For example, where Lininger and Doyon arranged for Sam’s

Club to sell freon through one of O’Malley’s companies to a third party and O’Malley

received a middleman’s profit (which he shared with his co-conspirators), the amount

of loss to Sam’s Club was the entire profit retained by all the co-conspirators,

including O’Malley; absent the fraud, Doyon and Lininger arguably could have

arranged a direct sale from Sam’s Club to the third party buyer at the same price, and

Sam’s Club would have retained the entire profit for itself. Similarly, where Doyon

and Lininger conspired with O’Malley for O’Malley to purchase freon from a third

party and then sell the same freon to Sam’s Club at a profit (a profit which the coconspirators secretly kept for themselves), Sam’s Club arguably was denied the

benefit of buying the freon at O’Malley’s purchase price and thus was improperly

deprived of the net profit shared by the co-conspirators, including O’Malley.

Therefore, the amount of loss suffered by Sam’s Club as a result of the conspiracy

should have included all the funds retained by all of the co-conspirators as a result of

their fraudulent scheme, and the district court’s finding to the contrary was clearly

erroneous. The total amount of Sam’s Club’s loss was $756,460.00. 

Downward departure

“Under the PROTECT Act of 2003, Pub. L. No. 108-21 § 401, 117 Stat. 650,

657 (2003), amending 18 U.S.C. § 3742(e) effective April 30, 2003, we review

de novo the issue of whether a departure is justified given the particular facts of a

case.” United States v. Hutman, 339 F.3d 773, 775 (8th Cir.), cert. denied, 124 S. Ct.

842 (2003). The de novo standard of review applies to pending appeals, even where

the defendant was sentenced before the effective date of the PRTOECT Act, because

a change in the review standard is procedural in nature. United States v. GonzalesOrtega, 346 F.3d 800, 802 (8th Cir. 2003) (“Although [the defendant] was sentenced

before the PROTECT Act became law, the Act, because it is procedural in nature,

does apply to his pending appeal.”); United States v. Hutman, 339 F.3d at 775

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O’Malley maintains: “The Gold Bank letter simply asks the district court to

consider probation. This letter indicates in part that ‘[w]e recognize that this matter

is under the jurisdiction of the Federal Court and the Presiding Judge will ultimately

make the decision as to the disposition of Mr. O’Malley’s case.’ The Bank is simply

asking the Court to impose probation.” Brief for Appellee at 26-27.

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(quoting United States v. Mejia, 844 F.2d 209, 211 (5th Cir. 1988)) (“A change in the

standard of review is properly characterized as procedural rather than substantive

[and therefore can be applied to a pending appeal without violating the Ex Post Facto

clause] because it neither increases the punishment nor changes the elements of the

offense or the facts that the government must prove at trial.”).

 

As stated above, the district court set forth three reasons for its decision to

depart from the guidelines: (1) O’Malley’s extraordinary restitution effort in taking

out a bank loan to pay full restitution immediately; (2) the view that the seriousness

of O’Malley’s role in the offense had been overstated under the guidelines; and (3)

the economic impact on the community if O’Malley were to be absent from his

businesses, which employed over 60 residents of Pittsburg, Kansas, a small farming

community. 

In support of the determination that his restitution effort was extraordinary,

O’Malley maintains that the cashier’s check, which was tendered to the district court

before its decision to depart, was fully and immediately negotiable regardless of what

the district court’s sentencing decision would be.6

 O’Malley also emphasizes that his

payment of restitution relieved Doyon and Lininger of their joint and several liability.

O’Malley cites United States v. Oligmueller, 198 F.3d at 672, for the proposition that

his restitution effort justified the downward departure in the present case. O’Malley

further argues that departure for extraordinary restitution is appropriate in the present

case because “[o]therwise, there is no incentive for a defendant to make such

substantial and extraordinary effort.” He concludes that even a sentence at the low

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end of his guideline sentencing range would not “adequately distinguish or award

[sic] such extraordinary efforts.” Brief for Appellee at 29. 

The district court, in its statement of reasons, suggested that O’Malley’s actions

were extraordinary because of the extensive borrowing efforts and financial

commitment he was required to make in order to obtain such a sizable bank loan prior

to the sentencing hearing. The district court expressly noted “the extraordinary

restitution effort of the defendant to take out a loan to pay restitution immediately.”

We, too, recognize that O’Malley must have gone to great lengths to have a cashier’s

check for $459,047.02 readily available for tender at the sentencing hearing.

However, to treat such efforts as warranting a downward departure from the

guidelines would differentiate criminal defendants on the basis of their economic

resources, which is clearly contrary to the intent of the sentencing guidelines. 

Moreover, voluntary payment of restitution is a mitigating circumstance that

has been taken into consideration by the Sentencing Commission in formulating the

guidelines. Application note 1(c) to USSG § 3E1.1 expressly recognizes that a

downward adjustment for acceptance of responsibility may be applicable if the

defendant voluntarily paid restitution prior to the adjudication of his or her guilt.

Therefore, the district court was authorized to depart from the guidelines based upon

O’Malley’s restitution efforts only if, “in light of unusual circumstances, the guideline

level attached to that factor is inadequate.” USSG § 5K2.0; see also United States v.

Garlich, 951 F.2d 161, 163 (8th Cir. 1991) (district court erroneously concluded that

it lacked authority to consider the defendant’s voluntary payment of restitution before

his adjudication of guilt; “[i]f the district court determines the two-level reduction for

acceptance of responsibility inadequately addresses [the defendant’s] restitution, the

district court may impose a reasonable sentence outside the guideline range”). 

While litigating in the district court, O’Malley argued that any restitution

amount was inappropriate because Sam’s Club suffered no real financial loss, a

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position he maintained right up to the point of the district court’s ruling on the

amount of the loss. See Sentencing Transcript at 5. Only after that decision was

made did O’Malley tender the cashier’s check to pay restitution. Under these

circumstances, while O’Malley certainly had a right to dispute the amount of the loss

to Sam’s Club, his payment of restitution after his guilt was adjudicated and after the

amount of the loss was determined did not qualify as acceptance of responsibility

under the guidelines, much less a basis for downward departure. 

Furthermore, contrary to O’Malley’s argument, the downward departure in the

present case is not justified under United States v. Oligmueller. In that case, we held

that the amount of the loss resulting from the defendant’s fraudulent attainment of a

bank loan should reflect the full amount fraudulently borrowed, without consideration

of the defendant’s efforts to repay the bank after the fraud was discovered (except for

payments from the sale of pledged assets); however, we further held that the district

court did not abuse its discretion in departing downward because the amount of the

loss significantly overstated the risk to the bank and because the defendant – having

voluntarily begun making restitution almost a year before he was indicted – had

engaged in extraordinary restitution efforts. See 198 F.3d at 671-72. 

Thus, the only remaining question with respect to “extraordinary restitution”

is whether the downward departure is justified on that basis because O’Malley’s full

payment of restitution relieved his co-defendants of their joint and several liability

for the same loss. We hold that it is not. Joint and several liability is no less

liability. The downward departure cannot be justified by the fact that O’Malley’s

immediate fulfillment of his own legal obligation bestowed a benefit upon his coconspirators. 

We next turn to the district court’s second reason for departing downward –

that “the seriousness of defendant’s role is overstated.” As a procedural matter, we

note that O’Malley did not identify this factor as a ground for departure nor did the

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district court notify the parties that it was contemplating departure on this basis, as

required under Fed. R. Crim. P. 32(h) (“Before the court may depart from the

applicable sentencing range on a ground not identified for departure either in the

presentence report or in a party’s rehearing submission, the court must give the

parties reasonable notice that it is contemplating such a departure.”); see also Burns

v. United States, 501 U.S. 129, 138-39 (1991) (“[B]efore a district court can depart

upward on a ground not identified as a ground for upward departure either in the

presentence report or in a prehearing submission by the Government, Rule 32 requires

that the district court give the parties reasonable notice that it is contemplating such

a ruling. This notice must specifically identify the ground on which the district court

is contemplating an upward departure.”); id. at 135 n.4 (“It is equally appropriate to

frame the issue as whether the parties are entitled to notice before the district court

departs upward or downward from the Guidelines range. Under Rule 32, it is clear

that the defendant and the Government enjoy equal procedural entitlements.”).

Therefore, under the procedural circumstances of the present case, the district court

lacked authority to depart from the guidelines on the ground that the seriousness of

O’Malley’s role in the offense had been overstated. 

Because of the possibility that the procedural defect discussed above could be

corrected on remand, we will now address this second factor on its merits. A

defendant’s minimal or minor role in the offense is a factor considered in the

guidelines. See USSG § 3B1.2 (downward adjustments of 2 to 4 levels for minor to

minimal participation in the criminal activity). Thus, the question once again is

whether, “in light of unusual circumstances, the guideline level attached to that factor

is inadequate.” USSG § 5K2.0. In the present case, the probation officer did not

recommend a downward adjustment based upon O’Malley’s mitigating role in the

offense, nor did O’Malley object to the PSR for its lack of such a recommendation.

Nevertheless, because O’Malley was “not the one that hatched the idea,” the district

court concluded that O’Malley was a relatively less culpable participant in the

conspiracy and credited that finding by using it as a ground for departing downward.

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Sentencing Transcript at 23. Upon review, we cannot say that O’Malley may not

receive a downward adjustment under USSG § 3B1.2 for his mitigating role;

however, there is nothing so unusual in the circumstances of the present case to

warrant a downward departure on that basis. 

Finally, as to the district court’s third reason for the downward departure – the

adverse economic impact O’Malley’s incarceration would have on the community –

we note that this factor is expressly discouraged as a ground for departure under the

guidelines. See USSG 5H1.6 (“Family ties and responsibilities and community ties

are not ordinarily relevant in determining whether a sentence should be outside the

applicable guideline range.”). Consequently, a downward departure on this basis is

permitted only if O’Malley’s community ties are truly exceptional. We have carefully

reviewed the character letters submitted by O’Malley, as well as the district court’s

explanation for its decision, and we conclude that the circumstances in the present

case are not so exceptional. As we have previously explained, “[a]lthough downward

departure on this ground is not ruled out as a matter of law, the mere fact a business

faces likely failure and innocent others will be disadvantaged when its key person

goes to jail is not by itself unusual enough to warrant a departure.” United States v.

Morken, 133 F.3d 628, 630 (8th Cir. 1998) (internal citations, quotation marks, and

ellipsis omitted). In sum, the downward departure was not justified by O’Malley’s

community ties, and the district court erred in sentencing O’Malley outside the

applicable guideline range.

 

Conclusion

O’Malley’s sentence is vacated. The case is remanded to the district court for

further sentencing proceedings consistent with this opinion. 

______________________________

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