2010 D e c i sion s O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit 9-17-2010 

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o P r e c e de nt i al or N on-P r e c e de nt i al : N on-P r e c e de nt i al D ocke t N o . 09-3433

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Thi s de c i sion i s br ou ght t o you for f r e e and ope n a c c e s s b y the O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit at V i ll anova U nive r sity S choo l of L a

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w . vi ll anova . e du . Re c omme nde d C it at ion " U SA v . Mich a e l S inko " (2010). 2010 D e cisio n s . P ape r 591. http://d i git alc ommon s .l a

w . vi ll anova . e du/thir dc ir c uit_2010/591NOT P RE CE DE NT I AL UN I TED STATES CO UR T OF A PP EALS F O R T H E T H IR D C IR C U IT

____________ N o. 09- 3433

____________ UNI TE D ST ATE S OF AM ERI CA

v. M I CH AE L S I NKO, A ppel l ant

____________ O n A p p ea l from the U n it ed S tat es D istri ct C o u rt f o r th e E a ste rn D istric t o f P e n n sy lv a n ia ( D . C . N o. 2- 07- cr - 00703- 003) D istric t Ju d g e : H o n o ra b le L e g ro m e D . D a v is

____________ Subm i tt ed Pur s uantt o T hi r d C i r cui tL A R 34. 1( a)

Sept ember17, 2010 B e f o re : S C IR IC A , R E N D E L L a n d F IS H E R , C i r cui tJudges .

( Fi l ed: Sept ember17, 2010)

____________ OPI NI ON O F THE COURT F IS H E R , C i r cui tJudge . O n A pr i l 23, 2009, M i chae l Si nko w as convi ct ed bya j uryof one c ountcons pi r acy t o comm i tm oneyl aunder i ng, i n vi ol at i on of 18 U . S. C . § 1956( h) , and one c ountof ai di ngJohn P al m er w as actuall yun dercov er FB I agentJohn R ob ert s. 1 2 and abe t t i ng m oneyl aunder i ng, i n vi ol at i on of 18 U . S. C . § 1956( a) ( 3) ( B ) . T he D i s t r i ct Co u r ts e n t e n c e d S i n k o t o 3 0 mo n t h s i n p r i s o n a n d th r e e y e a r s o f s u p e r v i s e d r e l e a s e . On a p p e a l, S in k o c h a llen g e s th e re a so n a b len e ss o f h is s e n ten c e . F o r th e re a so n s s e t f o rth b e l o w, we wi l l a f

f i r m. I. W e w r i t e exc l us i vel yfort he part i es , w ho ar e fa m i l i arw i t h t he fa ctual cont extand l egal hi s t or yof thi s cas e. T her efor e, w e w i l l s etfor t h onl ythos e fa ct s nece s s aryt o our analy si s. D ur i ng t he s um m erof 2005, Si nko, C r ai g Scher , J ames Bel l , and J ohn Pal m er d isc u ss e d th e p o ss ib ili tyo f P a lm e r p u rc h a sin g a c o n d o m in iu m f ro m S in k o a s a m e th o d to l aunderfunds t hatPal m erhad fr audul ent l yobt ai ned fr om hi s empl oy er . T he 1 condomi ni um pr oj ectw as ow ned bySi nko and fi nance d byN O V A B ank, of w hi ch Scher w a s th e R e g io n a l P re sid e n t an d S in k o w a s o u tsid e c o u n se l. P a lm e r in f o rm e d S in k o th a t a por t i on of the paym ent s m ade f ort he condo w oul d be i n s t ol en moneyand thathe di d not w antt hes e paym ent s r epor t ed on the s al es agr eement . Pal m erand Si nko di s cus s ed the pos s i bl e w ay s i n w hi ch the paym ent s coul d be keptoff the r ecor d i ncl udi ng addi ng addenda t o t he s al es agr eementt o r efl ectthe ca s h paym ent s m ade t o Si nko, as s el l erof t he co nd o. O n S eptem ber 29, 2005 , S i nk o acce pted $15 , 00 0 cash f rom P al m er as the fir st3

paym entof the $100, 000 t o be l aunder ed and Si nko pr oduced a n addendum t o t he s al es a g re e m e n t to re f

lec t th is f

irst in sta llm e n t p a ym e n t. O n O ct ober3, 2005, Pal m ert el ephoned Si nko and r ei t er at ed the nee d for d i s c r e t i o n i n h a n d l i n g t h e c a s h p a yme n t s f o rth e c o n d o . P a l me re x p l a i n e d th a th i s s c h e me w as t o s ubm i tfal s e i nvoi ces t o hi s empl oy erand the r es ul t i ng chec ks w er e mai l ed fr om hi s empl oy ert o a pos toffi ce box i n N ew J er s ey . Pal m eri nform ed Si nko t hathe nee ded t o l aundert he r es ul t i ng funds i nt o a more us abl e form . Si nko m ade no obj ect i on t o t he s our ce of t he funds and, on N ovember8, 2005, Si nko acc ept ed a s econd pa ym entof $15, 000 cas h. F o llo w in g a ju rytrial, S in k o w a s c o n v icte d o f o n e c o u n t o f

c o n sp ira c yto c o m m it m oneyl aunder i ng, i n vi ol at i on of 18 U . S. C . § 1956( h) , and one c ountof ai di ng and ab ett ing m o n eylaun d ering , in v iolati o n o f 1 8 U . S . C . § 1 9 5 6 (a)(3)(B ). T h e D istri ct C o u rt r eques t ed thata Pr es ent ence I nves t i gat i on R epor t( PSR ) be pr epar ed forthe s ent enci ng hear i ng. T he PSR det erm i ned thatU . S. S. G . Sect i on 2S1. 1( a) ( 1) w as appl i cabl e t o t he m oneyl aunder i ng offe ns es . U nder§ 2S1. 1( a) ( 1) , the bas e off ens e l evel form oney l aunder i ng i s bas ed on the off ens e l evel of the under l y i ng offe ns e fr om w hi ch the l aun dered fu nd s w ere deri ved . T he P S R fou nd that the ap propri at e un derl y i ng off ense w as m ail fra u d , w h ich c arries a b ase o ff en se lev el of

sev en . P u rsua n t t o § 2 B 1 . 1 (b)(1 )(E ), ei ghtl evel s w er e adde d t o t he bas e off ens e l evel t o r efl ectSi nko’ s i nt entt o l aunder $100, 000 fr om a mai l fr aud s cheme. T w o l evel s w er e al s o added be caus e he w asT he D i s t r i ctC our thad j ur i s di ct i on under18 U . S. C . § 3231. W e have j ur i s di ct i on 2 under28 U . S. C . § 1291 and 18 U . S. C . § 3742. 4 convi ct ed undert he moneyl aunder i ng s t atut e, pur s uantt o § 2S1. 1( b) ( 2) ( B ) . Fi nal l y , t he PSR added a n addi t i onal t w o l evel s t o r efl ectan abus e of trus tpur s uantt o § 3B 1. 3, beca us e the moneyl aunder i ng s cheme t hatSi nko comm i t t ed i nvol ved a ba nk w i t h w hi ch Si nko had a f

i duci aryr el at i ons hi p. Si nko’ s r es ul t i ng t ot al offe ns e l evel w as 19, w i t h a c rim in a l h isto ryc a teg o ryo f I, re su lti n g in a n a d v iso ryg u id e lin e ra n g e se n ten c e o f 3 0 to 3 7 m o n th s o f

im p riso n m e n t. A tSi nko’ s A ugus t6, 2009 s ent enci ng hear i ng, the D i s t r i ctC our tacc ept ed the f in d in g s o f

th e P S R a n d d e n ied S in k o ’s v a rio u s o b jec tio n s. T h e D istric t C o u rt u lti m a tely s ent ence d Si nko t o 30 m ont hs of i m pr i s onm entand a t erm of thr ee y ear s ’ s upervi s ed r el eas e. T he C our tal s o or der ed Si nko t o paya $50, 000 fi ne and a $200 s peci al a ss e ss m e n t. S in k o f iled a tim e lyn o tice o f

a p p e a l. 2 II. W e r evi ew a di s t r i ctcour t ’ s l egal concl us i ons r egar di ng the advi s orys ent enci ng g u id e lin e s d e n o v o , s ee U ni t ed Stat es v. H

aw es , 5 2 3 F .3 d 2 4 5 , 2 4 9 (3 d C ir. 2 0 0 8 ), it s a p p lic a tio n o f

th e g u id e lin e s to th e f

a c ts f o r a b u s e o f

d is c re tio n , i d. a t 2 4 8 -4 9 , an d its f a c tu a l f in d in g s f o r c le a r e rr o r, U

ni t ed Stat es v. G r i er , 475 F. 3d 556, 570 ( 3d C i r . 2007) (en b an c).5 III . Si nko appea l s t he D i s t r i ctC our t ’ s s ent ence on s ever al gr ounds . H e as s ert s thatt he D istric t C o u rt: (1 ) in c o rre c tlyc a lcu late d h is b a se o f f e n se lev e l; (2 ) f

a iled to a d e q u a tely cons i dert he fa ct or s s etfor t h i n 18 U . S. C . § 3553( a) ; ( 3) err ed i n det erm i ni ng s ent enci ng enhanc ement s and r educt i ons r egar di ng hi s r ol e i n t he moneyl aunder i ng cons pi r acy ; and ( 4) fai l ed t o cons i derdi s cr epanc i es betw een hi s s ent ence and others i m i l ar l ys i tuat ed defe ndant s under§ 3553( a) ( 6) . B eca us e thes e ar gum ent s ar e pl ai nl ycontr aryt o t he r e c o r d , we r e

j e c tt h e m. D istric t co u rts m u st e n g a g e in a th re e -ste p se n ten c in g p ro c e ss w h ich n e c e ss itate s: (1) c alcu lat ing a d ef

en d an t’ s g u idelines sen tenc e p rec isel yas th e c o u rtw o u ld h av e b ef o re B ooker ; ( 2) form al l yrul i ng on anydepartur e mot i ons ; and ( 3) exer ci s i ng thei rdi s cr et i on b yc o n s id e ri n g th e re le v a n t 1 8 U .S .C . § 3 5 5 3 (a ) f a c to rs . U

ni t ed Stat es v. Tom ko , 562 F . 3 d 5 5 8 , 5 6 7 (3d C ir . 2 0 0 9 ) (en b an c). O urappel l at e r evi ew pr ocee ds i n t w o s t ages . “W e mustfi r s tens ur e thatthe di s t r i ctcour tcomm i t t ed no s i gni fi cantpr ocedur al err ori n arr i vi ng ati t s [s ent enci ng] deci s i on” and, i f i thas not , “w e then r evi ew the s ubs t ant i ve r eas onabl enes s of the s ent ence . ” U

nited S tates v. W

ise , 515 F. 3d 207, 217- 18 ( 3d C i r . 2008) . “A tboth s t ages of ourr evi ew , t he part ychal l engi ng the s ent ence has the bur den of de m ons t r at i ng unr eas onabl enes s . ” Tom ko , 562 F. 3d at567.6 A. Si nko ar gues t hathi s bas e off ens e l evel of s even w as i ncorr ect l ycal cul at ed beca us e the D i s t r i ctC our terr ed i n concl udi ng thatthe under l y i ng offe ns e of hi s m oney l aunder i ng offe ns e w as m ai l fr aud. W e r ej ectthi s cont ent i on. U . S. S. G § 2S1. 1( a) ( 1) cal l s foran appl i cat i on of the bas e off ens e l evel of the offe ns e fr om w hi ch the l aunder ed funds w er e der i ved. T he D i s t r i ctC our tagr eed w i th t he det erm i nat i on of the PSR t hatt he l aunder ed funds w er e der i ved fr om m ai l fr aud, pur s uant t o 18 U . S. C . § 1341, and appl i ed the mai l fr aud bas e off ens e l evel of s even. ( A pp. at A A 3 3 .) T he el ement s nece s s aryt o es t abl i s h t he off ens e of mai l fr aud ar e ( 1) a s cheme or a rtific e to d e f

ra u d f o r th e p u rp o se o f

o b tain in g m o n e yo r p ro p e rtya n d (2 ) u se o f th e m a ils in f u rt h e ra n c e o f

th e s c h e m e . U

ni t ed Stat es v. Y

us uf , 536 F. 3d 178, 187 ( 3d C i r . 2008) ( s um m ar i zi ng t he el ement s of 18 U . S. C . § 1341) . A s cheme t o defr aud nee d not cont empl at e the us e of the mai l s as an es s ent i al partof the s cheme s o l ong as the mai l i ng i s “i nci dentt o an es s ent i al par tof the s cheme. ” Schm uck v . U ni t ed Stat es , 489 U . S. 705, 7 1 0 -11 (19 8 9 ). T h e D istri ct C o u rtp o ints ou t, an d the re co rd m ak es c lear, that S ink o w as a w are t hatt he funds t o be l aunder ed w er e der i ved fr om a fr aud perpetuat ed thr ough t he us e of a pos toffi ce box. ( A pp. atA A 33. ) Si nko’ s ar gum entthatembezzl ementw as the pr oper u n d e rl y in g o f

f e n s e is m e ri tle s s a s th e s to le n f u n d s w e re n o t G o v e rn m e n t p ro p e rt y , a7

r equi r ed el ementof 18 U . S. C . § 641. N othi ng i n t he r ecor d i ndi cat es thatthe D i s t r i ct C o u rtab u sed it s d iscreti o n in f ind ing that the f

ac ts of this case sati sfied the n ec essa ry el ement s of m ai l fr aud forpurpos es of det erm i ni ng Si nko’ s bas e off ens e under § 2 S 1 . 1 (a)(1). B. S ink o co n tend s tha t atn o ti m e d u ri n g the s en tenc ing h ea ri n g d id the D istri ct C o u rt t ouch upon the § 3553( a) fac t or s . ( Si nko B r . at20. ) B as ed on the r ecor d, thi s ar gum ent plai nlyfai l s.

“ [ T ]h e to u c h sto n e o f

‘re a so n a b len e ss ’ is w h e th e r th e re c o rd a s a w h o le r e f lec ts r at i onal and meani ngful cons i der at i on of the fa ct or s enumer at ed i n 18 U . S. C . § 3553( a) . ” Tom ko , 562 F. 3d at568 ( i nt ernal quot at i ons and ci t at i ons om i t t ed) . A cour tneed not “di s cus s and make fi ndi ngs as t o eac h of the § 3553( a) fac t or s i f the r ecor d m akes cl ear t hatt he courtt ook t he fa ct or s i nt o acc ounti n s ent enci ng. ” U ni t ed Stat es v. C ooper , 437 F . 3 d 3 2 4 , 3 2 9 (3d C ir . 2 0 0 6 ). T he r ecor d i ndi cat es t hatt he D i s t r i ctC our tdi s cus s ed and ga ve meani ngful c o n s id e ra tio n to th e n u m e ro u s § 3 5 5 3 (a ) f a c to rs in s e n te n c in g S in k o . ( See A pp. atA A 98 (re f e re n c in g th e “ se n ten c in g stru c tu re a s re f lec ted in [ § ] 3 5 5 3 [ a ]” ).) T h e D istric t C o u rt in fac ts t at ed, “I t hi nk y ou goi ng t o j ai l actual l yw oul d s at i s fya numberof veryi m por t ant s ent enci ng pr i nci pl es ” and then pr ocee ded t o di s cus s the § 3553( a) fac t or s . ( A pp. at A A 97- 99) . T aken a s a w hol e, t he r ecor d s how s the courtadequa t el ycons i der ed the8

§ 3 5 5 3 (a) fa ctors a n d rea so n ab lyap p li ed them to the circu m stan ce s p rese n ted in S ink o ’s par t i cul arcas e. C. S in k o a rg u e s th a t h is s e n ten c in g o f f e n se lev e l sh o u ld h a v e b e e n lo w e re d tw o lev e ls du e t o h i s m i no r r ole i n the offen se, pu rs uan tt o U . S . S . G . § 3 B 1. 2, and that hi s offen se l e v e l s h o u l d n o th a v e b e e n i n c r e a s e d two l e v e l s f o ra n a b u s e o f

tru s t , p u r s u a n tt o U. S . S . G. § 3 B 1 .3 . T h e se a rg u m e n ts b o th f a il. Fi r s t , § 3B 1. 2 cal l s fora dec r eas e i n t he off ens e l evel bytw o “[i ] f the def endant w as a mi norpar t i ci panti n anycr i m i nal act i vi t y [. ] ” H avi ng pr es i ded overthe j urytr i al and hea r d al l of the fa ct s pr es ent ed, the D i s t r i ctC our ts t at ed atthe s ent enci ng hear i ng t hat “[ S ink o ’s] i n v o lvem en t far ex ce ed s, as a fa ctua l m att er, a m ino r role.” (A p p . at A A 3 7 . ) T h e re c o rd su p p o rts th e D istric t C o u rt’s c o n c lu sio n th a t S in k o d id n o t h a v e a m in o r ro le under§ 3B 1. 2. Si nko di s cus s ed w i t h Pal m erpos s i bl e met hods t o l aunderthe s t ol en fu n d s, ac ce p ted tw o p ay m en ts from P alm er to b e lau n d ere d , an d p rep are d the n ec essa ry p a p e r w o rk to h id e th e p a ym e n ts. W e c a n n o t co n c lu d e th a t th e D istric t C o u rt a b u se d its di s cr et i on i n decl i ni ng t o r educe Si nko’ s offe ns e l evel forhavi ng a mi norr ol e i n t he m oneyl aunder i ng s cheme. Second, Si nko does notdi s put e thati n r epr es ent i ng N O V A B ank as a banki ng law y e r h e w a s in a p o sitio n o f tru st w ith N O V A ; ra th e r, h e a rg u e s th a t h e d id n o t u se th is pos i t i on of trus tt o fac i l i t at e the comm i s s i on of hi s offe ns e. Sect i on 3B 1. 3 pr ovi des for9

a n in c re a se o f

tw o lev e ls if

“ [ 1 ] th e d e f

e n d a n t ab u se d a p o sitio n o f p u b lic o r p riv a te tru st, or[2] us ed a s peci al s ki l l , i n a mannerthats i gni fi cant l yfac i l i t at ed the comm i s s i on or conce al m entof the off

ens e. ” I n t hi s cas e, N O V A w as connec t ed t o t he tr ans act i on at i s s ue i n t w o w ay s : ( 1) N O V A fi nance d Si nko’ s condomi ni um devel opm entpr oj ect ; and ( 2) Pal m erw as t o r ece i ve a l oan fr om N O V A i n excha nge forbr i bes t o Si nko’ s codefe ndant s . Si nko’ s conce al m entfr om N O V A of hi s i nvol vementi n t he condomi ni um c o m p lex a n d h is p re p a ra tio n o f th e d o c u m e n ts n e e d e d to c o n c e a l P a lm e r’s c a sh p a ym e n ts su p p o rt th e D istric t C o u rt’s f in d in g th a t S in k o ’s p o sitio n o f tru st w ith N O V A a ss iste d in fac i l i t at i ng t he moneyl aunder i ng s cheme and w arr ant ed a tw o l evel i ncr eas e under § 3B 1. 2. T he D i s t r i ctC our tdi d notabus e i t s di s cr et i on i n concl udi ng that§ 3B 1. 2 w as appl i cabl e t o Si nko. D. F in a lly , S in k o a rg u e s th a t th e D istric t C o u rt a b u se d its d isc re tio n b yf a ili n g to cons i derdi s cr epanc i es betw een hi s s ent ence and others i m i l ar l ys i tuat ed def endant s under § 3 5 5 3 (a )( 6 ). See 18 U . S. C . § 3553( a) ( 6) ( r equi r i ng a s ent enci ng courtt o cons i der“the need t o avoi d unw arr ant ed s ent ence di s par i t i es among defendant s w i t h s i m i l arr ecor ds w h o h a d b e e n f

o u n d g u iltyo f

sim ilar c o n d u c t”) . T h is c o n ten tio n , too , lac k s m e rit. In su p p o rto f th is argu m en t, S ink o reli es o n tw o ca ses h e c it ed to the D istri ct C o u rt i n w hi ch def

endant s w er e convi ct ed of w hathe cl ai m s ar e more s er i ous offe ns es and10

r ece i ved l es s ers ent ence s . A ccor di ng t o Si nko, the D i s t r i ctC our tfai l ed t o expl ai n w hy hi s cas e w arr ant ed a l ongers ent ence than the ca s es he ci t ed. C ont r aryt o Si nko’ s as s er t i on, the D i s t r i ctC our texpl ai ned thatan i ndi vi dual i zed appl i cat i on of the § 3553( a) fac t or s t o Si nko’ s cas e r equi r ed a di ffe r entr es ul tthan the cas es he ci t ed. ( A pp. atA A 87- 88. ) I n addr es s i ng Si nko’ s ar gum entatthe s ent enci ng hear i ng, t he D i s t r i ctC our ts t at ed thats ent enci ng can va r yfr om cas e t o cas e “ba s ed upon t he s ent enci ng cons i der at i ons t hatw er e r epr es ent ed t o t he j udge atthatpart i cul art i m e. ” (I d. ) Fur t her , Si nko has fai l ed t o offe ranyevi dence thatthe def endant s i n t he ca s es he c ite s w e re s im ila rl ys itu a te d to h im . See U ni t ed Stat es v. R obi ns on , 603 F. 3d 230, 234- 35 ( 3d C i r . 2010) . T he s ent ence i m pos ed w as m or e than j us t i fi ed bythe r eas ons gi ven byt he D i s t r i ctC our t , and the C our tadequa t el ycons i der ed the nee d t o avoi d unw arr ant ed sent encing d i spari t i es. I V. F o r th e f o re g o in g re a so n s, w e w ill a f f irm th e se n ten c e o f

th e D istric t C o u rt.