1994 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

5-12-1994

United States of America v. Hallman

Precedential or Non-Precedential:

Docket 93-1414

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1 

 

 

 UNITED STATES COURT 

OF APPEALS 

FOR THE THIRD CIRCUIT 

 

No. 93-1801 

 

UNITED STATES OF AMERICA, 

 Appellee, 

v. 

REGINALD HALLMAN, 

 Appellant. 

 

Appeal from the 

United States District Court 

for the Eastern District of Pennsylvania 

(D.C. Crim. No. 93-00104-01) 

 

Submitted Under Third Circuit LAR 34.1(a) 

May 3, 1994 

(Filed: May 13, l994 ) 

Before: SLOVITER, Chief Judge, HUTCHINSON AND SEITZ, Circuit 

Judges. 

 

Jerry S. Goldman, Esquire 

Jerry S. Goldman & Associates, P.C. 

1520 Locust Street, 10th Floor 

Philadelphia, Pennsylvania 19102 

 Attorney for Appellant 

Michael R. Stiles, United States Attorney 

Walter S. Batty, Jr., Assistant 

 United States Attorney, Chief of Appeals 

Virgil B. Walker, Assistant 

 United States Attorney 
2 

Office of the United States Attorney 

615 Chestnut Street 

Philadelphia, Pennsylvania 19106 

 Attorneys for Appellee

__________ 

OPINION OF THE COURT 

 

SEITZ, Circuit Judge. 

I.

 Reginald Hallman ("Appellant") appeals a sentence imposed 

on him by the district court. The district court had subject 

matter jurisdiction pursuant to 18 U.S.C. § 3231. This court has 

jurisdiction under 18 U.S.C. § 3742(a). 

II. 

 On September 9, 1992, appellant used a stolen check to pay 

for a room at the Korman Suites in Philadelphia, Pennsylvania. 

At the request of federal investigators, local authorities 

arrested the appellant and located stolen mail after he consented 

to a search of his vehicle. 

 Appellant pled guilty to a state forgery charge and was 

sentenced to three years probation and restitution of $6,400. 

Appellant remained incarcerated, however, because he was 

identified as a fugitive from justice in Atlanta, Georgia and 

having charges pending against him in Delaware County (PA) Court. 

 On February 11, 1993, appellant was taken into federal 

custody pursuant to a four-count federal indictment. It appeared 

that, using various aliases, appellant deposited stolen and 

forged checks into an account and then withdrew the funds 

therefrom (Count 1). One of the checks deposited in this account 

was a check made out to the Internal Revenue Service (Count 2). 
3 

Appellant forged one of the stolen checks he possessed to 

purchase an automobile in the State of Alabama for approximately 

$14,000 (Count 3). Lastly, the appellant was found to have been 

in possession of approximately sixty-one stolen pieces of mail 

(Count 4). 

 Appellant entered a plea of guilty on all four counts. 

After receipt of the Pre-Sentence Report and a hearing thereon, 

the defendant was duly sentenced. He now appeals. 

III.

 The standard and scope of review of the district court's 

interpretation and application of the Sentencing Guidelines is 

plenary. United States v. Murillo, 933 F.2d 195, 196 (3d Cir. 

1991). However, where the district court's application is based 

on factual analysis, we will reverse the district court only if 

its conclusion is clearly erroneous. United States v. Ortiz, 878 

F.2d 125, 127 (3d Cir. 1989). 

IV. 

A. Calculation of Loss 

 A search of the appellant's car after his arrest on the 

Korman Suites' forgery charge resulted in the recovery of sixtyone pieces of stolen mail, mostly checks, that underlie Count 4.1

Appellant objects to the calculation of "loss" in this count, 

which added $25,152.36 to the loss amount and one (1) point to 

his offense level. Under USSG § 2F1.1, adjustments are made to 

the base offense level if the monetary loss exceeds certain 

 

1The sixty-one pieces of mail included: fifty checks, six 

bundles of blank checks, and five credit cards. 
4 

levels. Under § 2F1.1(a), the base offense level is six. The 

Probation Officer calculated the losses to be $73,419.36. This 

was arrived at by adding the losses suffered by the bank in Count 

1 ($34,282), the amount of the check in Count 3 ($13,985), plus 

the face value of the stolen mail in Count 4 ($25,152.36). Under 

USSG § 2F1.1(b)(1)(G) six points were added to the base level 

because the "loss" exceeded $70,000. 

 The district court determined that the "loss" in regard to 

these stolen checks should be determined under USSG § 2B1.1.2 

The district court referred to Application Note 2 to USSG § 2B1.1 

as applicable. The note defines "loss" as 

the value of the property taken, damaged, or destroyed. 

Ordinarily, when property is taken or destroyed the 

loss is the fair market value of the particular 

property at issue. . . . Examples: (1) In the case of 

a theft of a check or money order, the loss is the loss 

 

2To avoid confusion in considering the arguments advanced by 

appellant concerning the calculation of the offense score, some 

clarification as to which Guidelines sections are being utilized 

is necessary. In our four-count indictment, there are both fraud 

and theft-oriented charges. Under USSG § 3D1.2(d), conduct that 

results in offense levels being determined under Chapter 2 (e.g., 

theft and fraud) are to be "grouped" together. Once grouped 

together, USSG § 3D1.3(a) requires that the highest offense level 

of the group is to be used. Application Note 3 to § 3D1.3 states 

that "[i]f the counts in the Group are covered by different 

guidelines (e.g., theft and fraud), use the guideline that 

produces the highest offense level." In this case, both 

guidelines, §§ 2B1.1 and 2F1.1, result in the same score--12 

points--and either could have been used to calculate the score. 

The use of these guidelines to determine the score, however, does 

not dispose of the need to refer to the appropriate guideline for 

the calculation of loss. For example, although Hallman's 

indictment groups fraud and theft charges, we must refer to 

§2B1.1 to calculate the loss in regard to the theft charges 

(e.g., Count 4). See 18 U.S.C. § 1708 (referring to § 2B1.1 of 

Guidelines). This amount is then applied to the guideline used 

to calculate the offense level. 
5 

that would have occurred if the check or money order 

had been cashed. 

The face value of the stolen checks was $25,152.36. 

 A recent opinion of this court supports the calculation of 

loss based on the face value of the checks. In United States v. 

Cianscewski, 894 F.2d 74 (3d Cir. 1990), a couple was convicted 

of possessing stolen mails and selling stolen treasury checks. 

The amount of loss in regard to the checks was challenged on 

appeal. The defendants argued that the amount of loss should have 

been the sum of the amounts that were received for the checks 

upon resale. The court disagreed and held that "[w]hen a check is 

stolen, the cost to the party who ultimately bears the loss is 

obviously the face value of the check. . . . Under such 

circumstances . . . a court does not err by valuing losses at 

replacement cost to the victim--in this case the face value of 

the stolen checks." Id. at 80. 

 Appellant argues that some of the checks had no economic 

value because they were not valid either as a result of the 

passage of time or because payment on the checks logically would 

have been stopped. This argument erroneously applies USSG 

§ 2B1.1. Application Note 2 specifically states that "loss" is 

"the loss that would have occurred if the check or money order 

had been cashed." (Emphasis added). Appellant's crime of theft 

of the checks was completed, although his criminal conduct was 

only partially completed. 

 Appellant argues that the Government failed to show an 

intent by him to use the checks and thus, the amount should be 
6 

lowered by applying USSG § 2X1.1 relating to "attempts." In an 

effort to require the government to show intent, the appellant 

cites United States v. Kopp, 951 F.2d 521 (3d Cir. 1992). The 

appellant's reading of this case is in error. The court in Kopp

was distinguishing theft and fraud. The court determined that 

when calculating loss in a fraud context, the calculation of loss 

should be based on "actual or intended harm." Id. at 529. The 

court, however, said that when calculating the loss in the theft

context, applying USSG § 2B1.1, one need only apply the "simple 

`amount taken' rule" because "all thefts involve an intent to 

deprive the victim of the value of the property taken." Id.. 

The charge in Count 4 warrants application of § 2B1.1, and we 

must therefore examine "loss" in the theft context. The district 

court's calculation of the amount of loss involved in Counts 1, 3 

and 4 is not clearly erroneous. 

B. Related Offenses

 Appellant next challenges the calculation of his criminal 

history score. The district court adopted the Probation 

Officer's career history calculation of thirteen points that 

placed the appellant in a category VI classification. Appellant 

appeals the calculation on the ground that the Pre-Sentence 

Report contained two calculation errors when it counted related 

offenses separately. 

1. Consolidation for Sentencing

 First, appellant argues that two prior sentences, listed 

at paragraphs 51 and 52 of the Pre-Sentence Report, were 

"related" within the meaning of USSG § 4A1.2(a)(2) because they 
7 

were consolidated for sentencing. Under Application Note 3 to § 

4A1.2, 

[p]rior sentences are not considered related if they 

were for offenses that were separated by an intervening 

arrest. . . . Otherwise, prior sentences are 

considered related if they resulted from offenses that 

(1) occurred on the same occasion, (2) were part of a 

single common scheme or plan, or (3) were consolidated 

for trial or sentencing. . . . 

The district court determined that there was not a consolidation 

for sentencing purposes and adopted the Pre-Sentence Report's 

calculation. 

 After examining two case action summaries from the State 

of Alabama, we conclude that there may have been consolidation 

for sentencing, but that this conclusion does not affect our 

result as we find other grounds to sustain the separate 

calculation of the offenses based on our interpretation of 

Application Note 3. The first sentence of that Application Note 

states that "[p]rior sentences are not considered related if they 

were for offenses that were separated by an intervening arrest 

(i.e., the defendant is arrested for the first offense prior to 

committing the second offense)." The appellant was arrested for 

the offenses listed at paragraphs 51 and 52 of the Pre-Sentence 

Report on different dates. We read the "otherwise" in the Note to 

mean that if there is not an intervening arrest, then there may 

be other ways in which to find consolidation. We need not 

consider those alternatives, however, as the district court's 
8 

counting of each separate offense was proper under our reading of 

Application Note 3.3

2. Common Scheme or Plan

 Appellant's second "relatedness" contention is that his 

conviction for the forgery of the check to the Korman Suites was 

improperly counted because it was "related" to the conduct in 

Count 4. The forgery conduct consisted of the appellant's 

forging of a check, numbered 295 with the name "James La Roux" 

emblazoned on the face. The check was one of a sequential series 

of checks with Mr. La Roux's name on them. The appellant 

contends that the prior sentence he received for the forgery is 

related to the present offense of possession of stolen mail 

because it is part of a common scheme or plan. Under USSG 

§ 4A1.2(a)(2), "[p]rior sentences imposed in unrelated cases are 

to be counted separately." According to Application Note 3 to 

§ 4A1.2, prior sentences are related if they "(2) were part of a 

single common scheme or plan . . . ." 

 

3Our reading of Application Note 3 finds support in a recent 

decision in United States v. Gallegos-Gonzalez, 3 F.3d 325 (9th 

Cir. 1993): 

[T]he first question is always whether the underlying 

offenses were punctuated by an intervening arrest; by 

the logic and ordering of Note 3, that inquiry is 

preliminary to any consideration of consolidated 

sentencing. The use of the word "otherwise" indicates 

that sentence consolidation is relevant only in the 

absence of intervening arrests. Properly read, Note 3 

instructs that whenever offenses are separated by 

intervening arrests, the sentences for those offenses 

are unrelated regardless of whether sentencing was 

consolidated. 

Id. at 327 
9 

 On its face, the argument made by appellant is an 

erroneous application of the Guidelines because as a general 

rule, USSG § 4A1.2(a)(2) applies to the relatedness between prior 

sentences, not prior sentences to the present offense. E.g., 

United States v. Beddow, 957 F.2d 1330, 1337 (6th Cir. 1992); 

United States v. Walling, 936 F.2d 469, 471 (10th Cir. 1991). 

Therefore, because we have only one prior sentence here, there 

can be no relatedness analysis under § 4A1.2(a)(2). 

 The appellant, however, suggests that under USSG 

§ 4A1.2(a)(1), the prior sentence and present offense are related 

because of the requirement that the prior sentence be imposed 

"for conduct not part of the instant offense." Appellant's 

argument is that the conduct that led to his state sentence for 

forgery is part of the same scheme and conduct that led to his 

federal indictment on the count of possession of stolen mail. 

 Although neither party has cited a case that would be of 

assistance, there are several decisions from other circuits that 

throw some light on the issue. The Sixth Circuit stated that 

"the appropriate inquiry is whether the `prior sentence' and the 

present offense involve conduct that is severable into two 

distinct offenses." Beddow, 957 F.2d at 1338. The Sixth 

Circuit's test was developed in response to the Tenth Circuit's 

decision in United States v. Banashefski, 928 F.2d 349 (10th Cir. 

1991). In Banashefski, the defendant, a felon, placed a shotgun 

in the trunk of a stolen car and then drove the car away. He was 

charged by the state with possession of a stolen car, and was 

charged by the federal government for possession of a firearm by 
10 

a felon. The district court determined that there were two 

distinct possessory acts that were severable. The facts in our 

case constitute a closer call. Recognizing that possession of 

stolen mail is a distinct offense, we also note that possession 

of stolen mail in the form of blank checks suggests that 

additional conduct may be required for the actor to obtain illgotten gains. We do not adopt the Sixth Circuit's "severability 

test" based on our facts. Although Banashefski could have 

possessed the firearm or the car without the other and been 

charged with an offense for each, appellant here could not have 

forged a check until he had stolen the checks. 

 Although most conduct may be separable into distinct 

offenses, we believe the focus of the inquiry is on the conduct 

and whether that conduct is related--is it part of a common 

scheme or plan? We agree with the Seventh Circuit's view that 

"[t]he Sentencing Commission . . . intended a broad reading of 

`related cases.'" United States v. Connor, 950 F.2d 1267, 1271 

(7th Cir. 1991) (finding that sentences given for federal 

conviction and state conviction were related when they were 

brought pursuant to one arrest, despite separate trials). 

 In determining whether there was a common scheme or plan, 

intent of the defendant is a crucial part of the analysis. In 

the Tenth Circuit's decision in United States v. Coleman, 947 

F.2d 1424 (10th Cir. 1991), cert. denied, 112 S. Ct. 1590 (1992), 

a defendant was being prosecuted on drug charges. The court held 

that a sentence for retaliation by the defendant against a 

witness during a prior trial was not part of the scheme or plan 
11 

for which the defendant was presently being prosecuted because 

the retaliation took place after the completion of the drug 

offenses and therefore, could not be considered "`intimately 

related'" to the drug charges as the defendant had suggested. 

Id. at 1429-30. 

 The Seventh Circuit's decision in United States v. Ali, 

951 F.2d 827 (7th Cir. 1992), decided a case factually similar to 

the present one in which intent played a key role. In Ali, a 

burglar argued that two prior convictions were related because 

they were part of a common scheme. The two convictions were for 

the robbery of a supermarket and the forgery of a money order 

that was stolen during that robbery. To quote at length, for it 

is quite relevant to our particular facts, the court in refusing 

to find a common scheme or plan and relatedness, stated that: 

No one robs without intending to obtain value from what 

is taken, and if that is a financial instrument on 

which a signature must be forged if it is to be cashed 

or otherwise used to the robber's profit the forgery 

could easily be thought a part of a single scheme or 

plan. But "scheme" and "plan" are words of intention, 

implying that the forgery and the robbery have been 

jointly planned, or at least that it have been evident 

that the commission of one would entail the commission 

of the other as well. If the decision to commit 

forgery arose only after the robber discovered what he 

had taken, the forgery would be no more a part of the 

scheme or plan to rob than would be retaliation against 

a witness of whose existence the retaliator was unaware 

when he planned the crime to which the witness has 

testified; and Coleman even narrowly read would 

therefore govern. A crime merely suggested by or 

arising out of the commission of a previous crime is 

not . . . related to the earlier crime in the special 

sense of being part of a common scheme or plan. 

Id. at 828 (emphasis added). 
12 

 We hold that the appellant's possession of this stolen 

mail was part of a common scheme and plan and that the prior 

sentence for the forgery was for conduct that is related to the 

offense in Count 4. Our conclusion rests on the fact that all of 

the stolen mail recovered in the search of the appellant's 

vehicle was in the form of checks or credit cards and that the 

check forged to Korman Suites was from a sequence of blank checks 

found within the stolen mail. Therefore, it is reasonable to 

infer that the mail was stolen to find checks or other 

instruments that could be converted to use through forgery. 

 Because we hold that the forgery conviction and Count 4 

are parts of a common scheme or plan, the appellant's criminal 

history score warrants a reduction by one point. This will 

result in a criminal history score of twelve and a Category V 

criminal history classification.4

C. Restitution

 The appellant's final contention is that the district 

court abused its discretion in requiring that restitution be made 

in the amount of $34,282 to the bank involved in Count 1 because 

it failed to make specific factual findings as to his ability to 

pay. 

 Restitution is authorized by the Victim and Witness 

Protection Act (VWPA), 18 U.S.C. § 3663(a), and is incorporated 

into the Sentencing Guidelines at § 5E1.1. Our review is plenary 

over whether an award is permitted, but we review the specific 

 

4Thus, a sentencing range of 27-33 months will result as opposed 

to 30-37 months. 
13 

award for abuse of discretion. United States v. Seligsohn, 981 

F.2d 1418, 1421 (3d Cir. 1992). 

 In exercising its supervisory powers, this court has 

required the district courts to make "findings as to the factual 

issues that are relevant to the application of the restitution 

provisions of the VWPA." United States v. Palma, 760 F.2d 475, 

480 (3d Cir. 1985). The district court is required to 

consider the amount of the loss sustained by any victim 

as a result of the offense, the financial resources of 

the defendant, the financial needs and earning ability 

of the defendant and the defendant's dependents, and 

such other factors as the court deems appropriate. 

Id. (quoting 18 U.S.C. § 3580(a)) (emphasis added). The district 

court determined that the appellant could pay the amount 

proscribed within the period of his supervised release. Our 

review is limited to "whether the record supports the finding." 

United States v. Sleight, 808 F.2d 1012, 1021 (3d Cir. 1987). 

 The district court did not impose a fine on appellant 

citing his "inability to pay." Indigency at the time of 

sentencing is, however, not a bar to ordering the appellant to 

pay restitution. United States v. Logar, 975 F.2d 958, 962 (3d 

Cir. 1992) (citing ten other circuits in accord with this rule). 

The order of restitution, on the other hand, may not be based on 

some future fortuitous event that may befall the appellant, but 

must be based on realistic expectations. Id. at 962-64; cf. 

United States v. Mitchell, 893 F.2d 935, 936 n.1 (8th Cir. 1990) 

(rejecting government's argument that a "high amount of 
14 

restitution is proper on the chance that the defendant may win 

the lottery"). 

 The district court based its order of restitution on the 

Pre-Sentence Report. The Report includes an analysis of the 

financial impact on the victim, the bank, and details the 

appellant's physical and mental health, education, vocational 

skills, and financial ability to pay. Specific findings by the 

district court determined that the appellant obtained a high 

school diploma; claimed to have obtained thirty-six college 

credits at the University of Alabama; was given an honorable 

discharge from the military for medical reasons; was once a partowner of a hair salon in Philadelphia that generated a monthly 

gross income of $1,500; earned $300 a night from 1990 until 1992 

as a private disc jockey; and had worked for his stepfather's 

business assisting in the design and installation of security 

systems. The district court also adopted the findings of the 

report that found the appellant had purchased a 1991 Ford Mustang 

for $20,750 cash in 1991 and sold the same car in 1992 for 

$13,000. Finally, the report noted that he could make $.15-.25 

per hour and possibly up to $1.25 per hour while incarcerated 

that could be applied to the amount of restitution ordered. The 

district court stated at sentencing that "the defendant by 

education and natural ability that God and his parents gave him 

has the capacity to earn lawful income." 

 To sustain the district court's order of restitution, the 

appellant must "realistically [be able to] pay [the amount] 

within the five year period." Sleight, 808 F.2d at 1021. The 
15 

record supports a reasonable expectation that the appellant will 

be able to make restitution. Putting aside the large amount of 

money that he received for the sale of his car (or the amount he 

paid for it in cash), the appellant's educational level and past 

work experience indicate an ability to obtain gainful 

employment.5 

 In light of the specific findings made by the Probation 

Officer that were adopted by the district court, and the time 

afforded the appellant in which to pay the amount, we cannot say 

that the district court's restitution order constituted an abuse 

of its discretion. 

V.

 We approve the district court's calculation of the amount 

of loss involved, the separate calculation of the offenses listed 

in paragraphs 51 and 52 of the Pre-Sentence Report, and the order 

of restitution. We will vacate the district court's calculation 

of the appellant's criminal history score as a result of our 

holding that the forgery charge and Count 4 were part of a common 

scheme or plan and should not have been counted separately. The 

 

5We note that 18 U.S.C. § 3663(g) authorizes the court to "revoke 

probation or a term of supervised release . . . or hold a 

defendant in contempt pursuant to section 3583(e) if the 

defendant fails to comply with such order." Although the 

ordering of restitution may not be an exact science, we also note 

that § 3663(g) also permits the court, in determining whether to 

revoke probation or supervised or to hold in contempt, may 

"consider the defendant's employment status, earning ability, 

financial resources, the willfulness of the defendant's failure 

to pay, and any other special circumstances that may have a 

bearing on the defendant's ability to pay." We read this section 

as granting the court discretion to modify the restitution order 

in the future depending on the defendant's circumstances. 
16 

sentence of the district court will be vacated and the matter 

will be remanded to the district court for sentencing consistent 

with this opinion.