### 1999 D e c i sion s O p inion s of the U nit e d

S t a t e s C our t of Appe al s for the Thir d C ir c uit

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D ock e t 98-1647,98-1648

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. e du/thir dc ir c uit_1999/190Filed July 2, 1999

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

Nos. 98-1647 & 98-1648

UNITED STATES OF AMERICA

v.

ERNEST MEDFORD,

Appellant in 98-1647

UNITED STATES OF AMERICA

v.

GEORGE CSIZMAZIA,

Appellant in 98-1648

ON APPEAL FROM THE

UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

(Nos. 98-cr-00045-01 & 98-cr-00045-02) (District Judge: Honorable Clarence C. Newcomer)

Submitted Under Third Circuit LAR 34.1(a) May 25, 1999

Before: GREENBERG and ALITO, Circuit Judges, ACKERMAN, District Judge,1

(Opinion Filed: July 2, 1999)

___________________________________________________ ______________

1. The Honorable Harold A. Ackerman, Senior Judge o f the United States District Court for the District of New Jersey, sitt ing by designation.Michael R. Stiles

United States Attorney Walter S. Batty, Jr. Chief of Appeals

Robert E. Goldman Assistant U.S. Attorney U.S. Attorney's Office

615 Chestnut Street Philadelphia, PA 19106

Counsel for Appellee

George Henry Newman, Esq. Newman & McGlaughlin

834 Chestnut Street
Suite 206 Philadelphia, PA 19107

Counsel for Appellant

Ernest Medford

Donald M. Moser, Esq. Washington West Building

235 South 8th Street Philadelphia, PA 19106

Counsel for Appellant George Csizmazia

OPINION OF THE COURT

ALITO, Circuit Judge:

Ernest Medford and George Csizmazia ("defendants") appeal their sentences after pleading guilty to con spiracy, theft, and receipt of cultural objects from a museu m in Philadelphia. On appeal, defendants contend that th e government violated the plea agreement and that the District Court misapplied the United States Sentenc ing Guidelines. For the reasons explained below, we con clude that the government satisfied its obligations under the plea agreement but that the District Court erred in appl ying the

2sentencing guidelines. We therefore vacate defendan ts'

sentences and remand for further proceedings.

I.

The Historical Society of Pennsylvania ("HSP"), fou nded in 1824 and located in Philadelphia, exhibits antiques and other historical items to the public. Defendant Med ford worked as a custodian at the HSP for approximately 18 years. During that time, he met defendant Csizmazia , a collector of antiques, who was working as a contrac tor at the HSP. The defendants agreed that Medford would s teal
items from the museum and sell them to Csizmazia.

Over a ten-year period, Medford pilfered approximat ely 200 valuable items from the museum, including a swo rd presented to George G. Meade for his military accomplishments during the Civil War, a 1735 gold s nuff box presented to Andrew Hamilton for successfully defending J. Peter Zenger in his libel trial, a rin g containing a lock of George Washington's hair, an ivory tea ca ddy that belonged to George Washington, a telescope used by Elisha Kent Kane during his 1853 exploration of the arctic region, lockets containing the hair of John Brown and Andre w Jackson, the wedding band of Patrick Henry's wife, a silver pitcher presented to a physician for his efforts du ring the 1848 smallpox epidemic in Philadelphia, and a Lanca ster County long rifle crafted in 1785 by Isaac Haines, one of Philadelphia's finest gunsmiths. For a paltry sum, Medford sold these items to Csizmazia, who concealed them a t his
residence. All of the items have been recovered.

Defendants entered into a plea agreement under whic h the government promised to "[m]ake a motion to allo w the District Court to depart from the Sentencing Guidel ines pursuant to Sentencing Guidelines S 5K1.1, if the government in its sole discretion, determines that the defendant has provided substantial assistance in th e investigation or prosecution of another person who has committed an offense . . . ." Csizmazia App. at 24- 25; Medford App. at 9-10. Defendants pleaded guilty to conspiracy, in violation of 18 U.S.C. S 371; theft of objects of cultural heritage, in violation of 18 U.S.C.S 66 8(b)(1);

3and receipt and concealment of stolen objects of cu ltural

heritage, in violation of 18 U.S.C. S 668(b)(2).2

At sentencing, the District Court applied U.S.S.G. S 2B1.1, which provides a base offense level of fou r for a variety of larceny offenses, including offenses com mitted

under 18 U.S.C. S 668. The Court then enhanced defendants' base offense levels 15 points because t he amount of loss sustained by the HSP exceeded $2.5 m illion. See U.S.S.G. S 2B1.1(b)(1)(P). In arriving at that figure, the District Court considered the appraisals proffered by the government. The experts who made the appraisals had determined that the total monetary value of the sto len items ranged between $2,452,471 and $2,579,500. Ove r the defendants' objection, the District Court selec ted the midpoint of the two estimates for a total loss of $2,515,985.50. The Court reasoned: "[I]t is entirel y appropriate for the Court to accept a valuation . . . which is based upon two expert appraisals . . . and to ut iliz[e] the midpoint range." Csizmazia App. at 72a; Medford App . at
24.

The Court next considered the government's section 5K1.1 motion for a downward departure. The governme nt declared that its section 5K1.1 motion merely grant ed the District Court "permission" to depart downward, but that the government "certainly [did not] recommend a dow nward departure." See Csizmazia App. at 81a; Medford App. at 33. Specifically, the government stated:

___________________________________________________ ______________

2. 18 U.S.C. S 668(b) provides, in pertinent part:

Any person who-

(1) steals or obtains by fraud from the care , custody, or control

of a museum any object of cultural heritage; or

(2) knowing that an object of cultural herit age has been stolen or obtained by fraud, if in fact the object was stolen or obtained

from the care, custody, or control of a museum (w hether or not that fact is known to the person), receives, conc eals, exhibits, or disposes of the object,

shall be fined under this title, imprisoned not more than 10 years,

or both.

18 U.S.C. S 668(b)(1), (2).

4[T]he motion for downward departure . . . pe rmits the

Court to depart downward. . . . [T]hat's wha t the Government is saying, you're permitted, I'm not granting you permission, but under the rules it provides that I'm giving you discretion [to depart
downward based on defendants' substantial as sistance]
. . . . [W]e told both counsel that we would file a weak 5K. And a weak 5K in our opinion is [one tha t] grants discretion to depart downwards, but we certa inly don't recommend a downward departure.

Csizmazia App. at 83a; Medford App. at 35. The Dist rict
Court denied the motion.

The District Court heard victim impact testimony fr om the President of the HSP, Susan Stiff ("Stiff "). S ee Csizmazia App. at 106a-108a; Medford App. at 58-60. Stiff explained that defendants' actions had damaged one of the museum's most important assets -- its reputation as a responsible steward of important national treasures -- "in ways that cannot be quantified." Csizmazia App. at 107a; Medford App. at 59. Stiff noted that the damage cau sed by defendants could decrease financial contributions, reduce donations of valuable historical objects, and dimin ish the HSP's ability to attract qualified individuals to s erve as trustees and staff members. See Csizmazia App. at 1 06a107a; Medford App. at 58-59. Because of the harm ca used to the HSP and the public, Stiff implored the Distr ict Court to "to impose the heaviest possible sentence on bot h defendants." Csizmazia App. at 107a-108a; Medford A pp. at 59-60. The government concurred. Csizmazia App. at 108a; Medford App. at 60.

Finding that the defendants' sentencing range of 27 to 33 months did not "sufficiently encompass[ ] the egreg iousness of the offenses that were involved," the District C ourt departed upward four levels from the guidelines. Cs izmazia App. at 109a; Medford App. at 61. However, the Cour t did not advise the defendants prior to the sentencing h earing that it intended to depart upward.

The District Court sentenced the defendants to 48 months of imprisonment, and the defendants took thi s appeal. Defendants claim that the government (1) vi olated

5the plea agreement by filing a motion for downward

departure and then stating at the sentencing hearin g that it did not recommend departure and (2) acted in bad faith by failing to make "a more concerted 5K1.1 downward departure motion at the time of sentencing." Csizma zia Br.
at 15. Defendants also contend that the District Co urt misapplied the Sentencing Guidelines by (1) arbitra rily selecting the middle value of the high and low esti mates of
the fair market value of the stolen items as the am ount of loss sustained by the HSP; (2) departing upward wit hout providing sufficient advance notice of its intentio ns; (3) departing upward on a ground that had already been taken into consideration by the Guidelines; and (4) depar ting upward four levels without articulating its reason for the extent of the departure. We address each argument i n turn.

II.

Defendants contend that the government violated the plea agreement by filing a downward departure motio n and then stating at the sentencing hearing that it did not recommend a downward departure. Defendants also cla im that the government acted in bad faith by failing t o make "a more concerted 5K1.1 downward departure motion at t he time of sentencing." Csizmazia Br. at 15.3 As a rem edy, defendants seek a remand for resentencing before a different judge. "Whether the Government violated a plea agreement is a question of law subject to de novo r eview." See United States v. Huang, 178 F.3d 184, 187 (3d C ir. 1999) (citing United States v. Roman, 121 F.3d 136, 142 (3d Cir. 1997), cert. denied, 118 S. Ct. 722 (1998)). W e reject
defendants' claims.

Section 5K1.1 of the Guidelines provides:

Upon motion of the government stating that t he

___________________________________________________ ______________

3. Defendants' contention that the government viola ted the plea agreement by requesting the court to impose the hea viest sentence possible on the defendants is frivolous. In the ple a agreement, the government reserved the right to "[m]ake whatever s entencing recommendation the government deems appropriate. . .." Csizmazia App. at 25; Medford App. at 10.

6defendant has provided substantial assistanc e in the

investigation or prosecution of another pers on who has committed an offense, the court may depart f rom the guidelines.

U.S.S.G. S 5K1.1. We have held that, in the absence of two circumstances not present here, a District Court ma y not depart below the guideline range based on a defenda nt's substantial assistance unless the government makes a motion to permit such a departure. See United State s v. Abuhouran, 161 F.3d 206, 211-212 (3d Cir. 1998), ce rt. denied, 119 S. Ct. 1479 (1999).

In this case, the plea agreement required the gover nment "to mak[e] a motion to allow the Court to depart fr om the Sentencing Guidelines pursuant to Sentencing Guidel ines S 5K1.1, if the government, in its sole discretion, determines that the defendant has provided substantial assista nce in the investigation or prosecution of another person who has committed an offense. . . ." Csizmazia App. at 24-2 5 (emphasis added); Medford App. at 9-10. We interpre t the plain terms of the plea agreement to require only t hat the government file a S 5K1.1 motion in order to give t he District Court the power ("to allow the Court") to depart downward under that provision. Contrary to defendan ts' suggestions, the plea agreement did not require the government to recommend a downward departure at the sentencing hearing; nor did it prohibit the governm ent from stating at the sentencing hearing that it did not r ecommend departure. Therefore, when the government filed the 5K1.1 motion, it complied with the terms of the plea agre ement.4

In addition, we find no basis for the defendants' contention that the government acted in bad faith b y failing to make "a more concerted 5K1.1 downward departure motion at the time of sentencing." Csizmazia Br. at 15. In making this contention, defendants cite United Stat es v.

___________________________________________________ ______________

4. It is true that the plea agreement could have be en more explicit in stating that, while the government was obligated to make a S 5K1.1 motion, the government was reserving the right to t ake whatever
recommendation it chose as to whether a downward de parture should be granted. In future cases, it would be advisable for the government to make this point explicit.

7Isaac, 141 F.3d 477 (3d Cir. 1998), in which we hel d that

the government's failure to file a 5K1.1 motion as required under the plea agreement must not result from bad f aith. Defendants' reliance on Isaac, however, is misplace d. Here, the government filed a S 5K1.1 motion and in so doi ng complied with its obligation under the plea agreeme nt. Accordingly, we fail to perceive any bad faith on t he government's part.

For these reasons, we conclude that the government satisfied its obligation under the plea agreement a nd that the government's actions were not in bad faith. We therefore deny defendants' request for resentencing before a different judge.

III.

Defendants also contend that the District Court err ed in enhancing their base offense levels because it arbi trarily selected the midpoint between the high and low esti mates
of the stolen items' fair market value as the amoun t of loss sustained by the HSP and stated, without further explanation, that doing so is "entirely appropriate ."5 We review the District Court's findings for clear erro r. See United States v. Miele, 989 F.2d 659, 663 (3d Cir. 1993). We agree with defendants.

U.S.S.G. S 2B1.1 establishes a defendant's base off ense level for offenses involving theft of property. See U.S.S.G. S 2B1.1 (1997). For offenses under 18 U.S.C.S 668, the defendant's base offense level begins at four and i s increased depending on the amount of the loss susta ined as a result of the illegal conduct. See U.S.S.G. S 2B1.1(a), (b)(1). In determining the amount of loss sustained , courts
are instructed to ascertain the fair market value o f the stolen items. See U.S.S.G. S 2B1.1, commentary n.2. We
have held that in cases in which the fair market va lue ranges between two estimates and either end of the range is equally plausible, courts generally should adopt the lower

___________________________________________________ ______________

5. Had the District Court selected the lower estima te, the defendants
would have received a 14-level increase in their ba se offense levels, rather than the 15-level increase that they receive d.

8end of the estimated range. See Miele, 989 F.2d at 665-66

(citing United States v. Walton, 908 F.2d 1289, 130 2 (6th Cir. 1990). However, "where there is other evidence to support the higher end of an estimated range, the c ourt may certainly rely on the higher estimate." Miele, 989 F.2d at 665-66. Such other evidence must be supported by "sufficient indicia of reliability," and the court must explain on the record why it relied on the estimate at the higher end. Id. at 668 ("We require that the district cour t articulate more than a conclusory finding . . . . The district court may not rest its decision upon facts until it determine s that the
fact or facts have sufficient indicia of reliabilit y to support a conclusion that they are probably accurate.").

The decision of the District Court violates Miele. In determining that the fair market value of the stole n items exceeded $2.5 million, the District Court selected the middle value of the high and low estimates without assessing the reliability of the higher estimate. I n addition, the District Court did not articulate an adequate evidentiary basis for selecting the middle value of the two estimates, as opposed to selecting the low end of t he range. Accordingly, as the government requests, we vacate the defendants' sentences and remand for resentencing i n accordance with Miele.

IV.

Defendants further maintain that remand is required under Burns v. United States, 501 U.S. 129, 138 (19 91), because the District Court departed upward without providing advance notice to the defendants of its i ntention to upwardly depart. We agree. In Burns, the Supreme Court

held:

Before a district court can depart upward on a ground not identified as a ground for upward depart ure either in the presentence report or in a prehearing submission by the Government, Rule 32 [of th e Federal Rules of Criminal Procedure] requires that t he district court give the parties reasonable notice tha t it is contemplating such a ruling.

9Id.; see also United States v. Barr, 963 F.2d 641, 655 (3d

Cir. 1992). The government recognizes that the Dist rict Court "did not provide the defense with sufficient advance notice of [its] intention to upwardly depart from t he guidelines," and therefore it concedes that the Dis trict Court committed plain error. Appellee's Br. at 9. I n light of Burns and the position taken by the government, we vacate the sentences imposed by the District Court and rem and for resentencing.

Although we are remanding to the District Court, we will address one further issue relating to the upward de parture
that was briefed to us here and that no doubt will be raised
on remand. Defendants contend that the District Cou rt's upward departure was improper because the cultural value of the stolen objects is an element of 18 U.S.C.S 6 68 already taken into consideration by the Sentencing Guidelines. We review the District Court's findings of fact for clear error and its legal conclusions de novo. See United States v. Hillstrom, 988 F.2d 448, 450 (3d Cir. 199 3). We reject defendants' argument.

As noted above, S 2B1.1 provides for increases in t he defendants' sentence depending upon the amount of l oss sustained by the victim of the offense. See U.S.S.G

. S 2B1.1, background commentary ("The value of prope rty stolen plays an important role in determining sente nces for theft and other offenses involving stolen property because it
is an indicator of both the harm to the victim and the gain to the defendant."). In making this determinat ion,
the Guidelines instruct the courts to ascertain the fair
market value of the stolen items. See U.S.S.G. S 2B 1.1, commentary n.2. The application notes recognize, ho wever, that in some cases, the monetary loss will not "ful ly capture
the harmfulness of the conduct." See U.S.S.G. S 2B1 .1, commentary n.15. In those cases, the application no tes provide that "an upward departure may be warranted. " Id.

In this case, after enhancing the defendants' offen se level by 15 based on the fair market value of the stolen items, the District Court departed upward four levels beca use the applicable sentencing range did not "sufficiently e ncompass the egregiousness of the offenses that were involve d here."

10Csizmazia App. at 109a; Medford App. at 61. The Cou rt

explained:

[T]he conduct that [the defendants] engaged in is an assault and affront to our culture, to our s ociety, and . . . must be dealt with accordingly. [T]he intangibles
. . . involved . . . and the effects that th ey have . . . had upon the institution itself -- both here in Philadelphia and . . . throughout the country -- mandate that the court . . . issue an upward departure in thi s case.

Csizmazia App. at 109a-110a; Medford App. at 61-62.

We agree with the District Court. The price set by the commercial market is insufficient to "fully capture the harmfulness of the [defendants'] conduct." The anti ques stolen in this case unquestionably have historical and cultural importance. Moreover, the thefts affected the HSP in ways different in kind from a loss of money or o ther easily replaceable property, for these thefts damag ed the HSP's reputation. In addition, the monetary value o f these objects does not adequately take into consideration the real but intangible harm inflicted upon all of the other victims of the offense, including the City of Philadelphia and the general public. Because section 2B1.1 applies to th efts that
cause financial harm to the immediate victim of the offense, the non-monetary damage caused here and the harm inflicted upon the public at large justify the Dist rict Court's upward departure.

The defendants contend that the upward departure wa s impermissible because "the Sentencing Commission, i n setting the offense level . . . for theft of object s of cultural heritage, took into account the very fact that the items stolen were items of cultural heritage." Medford Br . at 13. This argument, however, fails to take Application N ote 15
into account and overlooks the fact that U.S.S.G.S 2B1.1 applies to a variety of theft offenses that do not involve objects of cultural heritage. To take just one exam ple, U.S.S.G. S 2B1.1 applies to the offense of transpor ting stolen motor vehicles in interstate or foreign comm erce, in violation of 18 U.S.C. S 2312. Thus, under U.S.S.G. S 2B1.1, a defendant who transports stolen motor ve hicles valued at $x across state lines is treated the same as a

11defendant who steals objects of cultural heritage h aving the

same fair market value. Because U.S.S.G. S 2B1.1 do es not take into account the non-monetary significance of objects of cultural heritage, a departure may be warranted, as Application Note 15 suggests.

Finally, defendants contend that the District Court erred in failing to explain its reason for a four-level u pward departure. Because we are remanding to the District Court, we note only that the District Court should state o n the record its reason for the extent of the departure. See United States v. Kikumura, 918 F.2d 1084 (3d Cir. 1990).

V.

Accordingly, we vacate the defendants' sentences an d remand for resentencing in accordance with this opi nion.

A True Copy:

Teste:

Clerk of the United States Court of Appeals
for the Third Circuit

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