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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

 UNITED STATES OF AMERICA )

)

Plaintiff, )

) No. 03 CR 956-1

v. )

) HONORABLE DAVID H. COAR

GEORGE E. BAY, JR. )

)

Defendant. )

MEMORANDUM OPINION AND ORDER

Before this Court is a limited remand from the Seventh Circuit Court of Appeals pursuant to

United States v. Paladino, 401 F.3d 471 (7 Cir. 2005). This Court is charged with determining th

whether it would have imposed a different sentence on Defendant George E. Bay, Jr., had the

Federal Sentencing Guidelines (“Guidelines”) been considered advisory rather than mandatory at

the time of sentencing. After reviewing the parties’s submissions and the pre-sentence report,

this Court concludes that it would apply the same sentence.

Background

In October 2003, Defendant was indicted on seven counts of mail fraud related to a

fraudulent billing scheme under which he sent 43 companies in the steel industry invoices for

freight-related services that he never performed. He entered into a written plea agreement with

the Government on March 3, 2004. Under the agreement, he pleaded guilty to one count of

violating the mail fraud statute, 18 U.S.C. §1341, and agreed to a forfeiture judgment of

$428,251.90. He later received a 32-month sentence. In determining that sentence, this Court

found that Defendant did not qualify for a decrease in his sentence on the basis of acceptance of
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responsibility as he attempted to avoid part of his punishment by hiding the extent of his interest

in property subject to forfeiture. In light of Defendant’s omissions and misstatements regarding

that property, this Court found that Defendant qualified for an enhancement based on his

obstruction of justice.

On appeal, Defendant argued that this Court erred in its application of the Guidelines and

that he was entitled to full resentencing, in light of United States v. Booker, 543 U.S. 220 (2005). 

The Seventh Circuit disagreed, and ordered a limited Paladino remand. See Paladino, 401 F.3d

471.

Both sides filed briefs on the Paladino issue. This Court has reviewed the parties’s

submissions and the pre-sentence report.

Analysis

Congress promulgated the Guidelines in 1987. See 18 U.S.C. §3553; see also United

States v. Hanhardt, 424 F.Supp.2d 1065, 1073 (N.D.Ill. Mar. 13, 2006). In Booker, the Supreme

Court concluded that mandatory imposition of the sentences set out in the Guidelines without the

use of a jury as factfinder on certain issues violated the Sixth Amendment. See Booker, 543 U.S.

220. If the Guidelines had not been considered mandatory, the Supreme Court noted, no Sixth

Amendment problem would have been raised. See id. at 233.

In response, under the current Seventh Circuit framework, some defendants sentenced

before the Booker decision “are now given limited remands to re-evaluate their sentences under

the factors contained in 18 U.S.C. §3553.” Hanhardt, 424 F.Supp.2d at 1073 (citing United

States v. Welch, 429 F.3d 702, 705 (7 Cir. 2005); Paladino, 401 F.3d at 484). These limited th

remands–or “Paladino remands”–are meant only to enable the district judge to signal to the
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Court of Appeals “‘whether [the defendant’s] sentence would have been different had the

Guidelines been applied as advisory rather than mandatory.’” Id. (citing United States v.

Santiago, 428 F.3d 699, 705-06 (7 Cir. 2005); Paladino, 401 F.3d at 484). th

When considering the remand, “any sentence that is properly calculated under the

Guidelines is entitled to a rebuttable presumption of reasonableness.” United States v. Mykytiuk,

415 F.3d 606, 608 (7 Cir. 2005). “Therefore, the defendants must rebut the presumption of th

reasonableness attached to the Guidelines sentences ‘by demonstrating that [their]

sentence[s][are] unreasonable when measured against the factors set forth in §3553(a)’.” United

States v. Spano, 447 F.3d 517 (7 Cir. 2006)(citations omitted). These factors include the nature th

and circumstances of the offence and the history and characteristics of the defendant; the kinds of

sentences available, the kinds of sentences and the sentencing range established under the

Sentencing Guidelines (subject to amendment), any pertinent policy statement issued by the U.S.

Sentencing Commission (subject to amendment), the need to avoid unwarranted sentence

disparities among defendants with similar records who have been found guilty of similar conduct

and the need to provide restitution to any victims of the offense. See 18 U.S.C. §3553(a). In

addition, the sentence must reflect the seriousness of the offense, to promote respect for the law,

and to provide just punishment for the offense; afford adequate deterrence to criminal conduct;

protect the public from further crimes of the defendant; and provide the defendant with needed

education or vocational training, medical care, or other correctional treatment in the most

effective manner. See id.

Defendant fails to offer any meritorious argument as to why his sentence is unreasonable

when measured against the §3553(a) factors. Instead, best this Court can tell, he believes his
 The facts supporting a finding that Defendant did obstruct justice and did not accept 1

responsibility have been proven by a preponderance of evidence. In the Seventh Circuit,

Defendant seems to have argued that this Court’s finding that he behaved willfully and gave false

information such that a two level increase for obstruction of justice was improper. See United

States v. Bay, No. 04-3137, slip op.at 1 (7 Cir. September 14, 2005). After determining that th

Bay’s response to a request for disclosure of his financial assets was misleading, the Court of

Appeals concluded that “[i]nsofar as Bay claims that the district court’s finding that he behaved

willfully and gave false information were not supported by a preponderance of the evidence, he is

out of luck.” Id. at 4. The Court of Appeals noted that Bay failed during his sentencing to make

any objection to the proof offered and stipulated to the government’s proffer of evidence. 

Second, he seems to have argued that he was entitled to a three-level downward adjustment for

acceptance of responsibility. See id. The Court of Appeals disagreed, and determined that this

Court’s finding that Bay failed to accept responsibility because he attempted to avoid part of his

punishment by hiding his financial interest in his house was not clearly erroneous. See id. Again

before this Court, Bay’s counsel states that Bay’s “act of pleading guilty alone was worth the 2

level decrease.” As noted, this argument has already been entertained and decided by this Court

and the Court of Appeals. Moreover, this case is before this Court based upon a limited

remand under Paladino.

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enhancement was unconstitutional because a jury did not conclude that it was proven beyond a

reasonable doubt that he obstructed justice. He claims that Booker requires a jury determine that

he did not truthfully answer a question about his assets and therefore obstructed justice. 

Likewise, he argues, the denial of a decrease in his sentence on the basis of acceptance of

responsibility was unconstitutional because no jury was employed to determine beyond a

reasonable doubt that he failed to accept responsibility.1

Defense counsel’s main argument seems to be that Defendant’s sentence is

unconstitutional because a jury did not find beyond a reasonable doubt that Defendant obstructed

justice or that he did not deserve a reduction for acceptance of responsibility. Defense counsel

rightly notes that Booker finds a mandatory imposition of a Guidelines sentence without the use

of a jury as factfinder to be in violation of the Sixth Amendment in cases such as this one. What

she fails to recognize, however, is that it is the function of the Paladino remand to ask if this
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Court would have imposed the same sentence even with an understanding that the Guidelines

were advisory. The Paladino remand–and subsequent decision by the sentencing court that it

would have imposed the same sentence even if assuming that the Guidelines were

advisory–defenestrates any argument that the sentence is unconstitutional.

As noted earlier, if the Guidelines are not mandatory, the Sixth Amendment problem is

resolved. See, e.g., Booker, 543 U.S. at 233 (“If the Guidelines as currently written could be read

as merely advisory provisions that recommended, rather than required, the selection of particular

sentences in response to differing sets of facts, their use would not implicate the Sixth

Amendment. We have never doubted the authority of a judge to exercise broad discretion in

imposing a sentence within a statutory range.” (citations omitted)); see also United States v.

Dean, 414 F.3d 725, 730 (7 Cir. 2005)(“With the guidelines now merely advisory, factfindings th

that determine the guidelines sentence do not determine the actual sentence, because the

sentencing judge is not required to impose the guidelines sentence; and so the Sixth Amendment

is not in play.”).

Defendant was invited to submit briefing on the Paladino issue because his sentence was

determined under the belief that the Guidelines were mandatory. At this stage in the

proceedings, this Court reviews whether it would have imposed the same sentence if operating

under the understanding that the Guidelines are advisory. The presumption is that the original

sentence imposed is reasonable; Defendant is required to rebut that presumption. He fails to do

so. 

If Defendant has separate arguments based upon the factors set forth in 18 U.S.C.

§3553(a), he does not adequately present them at this time. Statements such as “[t]he sentencing
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court will also consider the defendant’s case in relation with other similar cases, i.e. where

persons have demonstrated disregard for the truth, and the backgrounds of the individuals under

18 USC 3553 (a) in which an individuals is considered in the entirety and the sentence guidelines

as advisory, would not push the court into a single box of telling the court what it had to sentence

the person,” do little to clarify how an analysis of the §3553(a) factors would lead to a different

conclusion in this case. 

The Seventh Circuit recently noted that “[o]n a Paladino remand a judge need not employ

a full-fledged methodology for measuring the reasonableness of the Guidelines sentence against

§3553(a).” Spano, 447 F.3d 517 (citing United States v. Dean, 414 F.3d 725, 729 (7 Cir. 2005). th

The Court of Appeals clarified: “[a]nd the need for a judge to explain in detail his consideration

of the §3553(a) factors when choosing to stick with the Guidelines sentence is proportional to the

arguments made by the defendants...When the judge is not presented with much, he need not

explain much.” Id. (citation omitted).

As noted in the Seventh Circuit’s opinion regarding Defendant’s conduct, “[a] halftruth...can be just as misleading as an outright lie.” See United States v. Bay, No. 04-3137, slip

op. at 3 (7 Cir. September 14, 2005). Moreover, his position “is no better than that of many th

other defendants who have tried to obfuscate their interests in various assets.” Id. (citations

omitted.). Not only did he fail to accept responsibility for his actions, he also tried to obstruct

justice. The nature and characteristics of his offense, the need to afford adequate deterrence to

conduct such as engaging in mail fraud and then attempting to mislead the Government with

respect to asset values, the need to protect the public from further crimes such as the scheme to

defraud 43 separate companies, all support a finding that the original sentence should stand. 
 The Government argues that because this Court did not sentence Defendant to the 2

minimum sentence possible under the Guidelines, it would not lower his sentence even if the

Guidelines are considered advisory. This Court notes that it has reservations about this

reasoning, but need not decide the issue at this time in light of Defendant’s failure to rebut the

presumption that the original sentence was unreasonable.

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Defendant’s sentence of 32 months neither represented the lowest possible sentence under the

pre-Booker understanding of the Guidelines, nor did it represent the highest possible sentence.

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Defendant engaged in fraudulent conduct that lasted several years, harmed numerous victims,

and resulted in the loss of hundreds of thousands of dollars. Sentencing Defendant below the

Guideline range would “subvert the goals of the U.S. Sentencing Commission and lead to

unwarranted sentencing disparities which would in turn fail to protect the public.” U.S. v. Spano,

411 F.Supp.2d 923, 941 (N.D.Ill. Jan. 24, 2006). Consequently, this Court would sentence

Defendant to 32 months, the same period of time that was originally imposed.

Conclusion

For the foregoing reasons, this Court concludes that it would have given Defendant the same

sentence even if the Guidelines had been applied as advisory rather than mandatory.

Enter:

/s/ David H. Coar 

David H. Coar

United States District Judge

Dated: June 8, 2006