United States Court of Appeals

FOR THE EIGHTH CIRCUIT

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No. 05-3142

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United States of America, *

*

Appellant, *

* Appeal from the United States

v. * District Court for the

* District of Minnesota.

Gerald Ture, *

*

Appellee. *

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Submitted: March 14, 2006

Filed: June 13, 2006

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Before MURPHY, BOWMAN, and BENTON, Circuit Judges.

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BOWMAN, Circuit Judge.

The government appeals the sentence the District Court imposed on Gerald

Ture for willfully attempting to evade federal income tax, arguing that the sentence

is unreasonable because Ture's sentence did not include a term of imprisonment. We

agree, vacate the sentence, and remand the case for resentencing.

I.

The government filed a six-count indictment against Ture. Counts one through

three alleged that Ture willfully attempted to evade federal income tax for the tax

years 1997, 1998, and 1999, respectively, in violation of 26 U.S.C. § 7201 (2000).
1

A conviction on all counts would not have changed the applicable sentencing

range because all counts would have been grouped according to the amount of the tax

loss. See U.S. Sentencing Guidelines Manual § 3D1.2(d) (1998).

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Counts four through six alleged that Ture willfully failed to file federal income tax

returns for the tax years 1997, 1998, and 1999, respectively, in violation of 26 U.S.C.

§ 7203. Acting under a plea agreement, Ture entered a guilty plea to count three. The

government and Ture agreed that the remaining counts would be dismissed.1

The District Court later held a sentencing hearing, at which time it adopted the

factual statements contained in the Presentence Investigation Report ("PSR").

According to the PSR, Ture once owned Drill-A-Matic, Inc., but subsequently

transferred his ownership interest in the company. Even after the transfer of

ownership, Ture actively operated Drill-A-Matic as its president. In 1996, Ture set

up a corporate savings account. By 2000, Ture had withdrawn $647,430.95 from that

account and deposited the funds into his personal checking account. The PSR

described how Ture concealed the transfer of those corporate funds: "In an effort to

conceal this income and evade paying personal income tax on these monies, [Ture]

instructed the bookkeeper at Drill-A-Matic to post the withdrawals from the corporate

savings account as either materials expense or subcontractor expense." PSR at 2, ¶ 6.

Under the plea agreement, Ture "acknowledge[d] and admit[ted] that the instructions

he gave to the bookkeeper were meant to disguise the true nature of the withdrawals

from the corporate savings account, in order to evade the payment of income tax to

the United States." Plea Agreement at 2, ¶ 1. Ture founded R & D Technical

Services, Inc., in 1997 and owned a majority interest in it. From 1997 to 2000, Ture

received $249,351.52 in consulting fees from R & D Technical Services, but he never

received a Form 1099, nor did he file an income tax return. Thus, Ture's total earned

income during this time period approached $900,000. According to the PSR, the

amount of tax owed on the earned income totaled $240,252. 
2

Ture had objected to the PSR's calculation of a $240,252 tax loss, asserting that

the properly calculated tax loss was between $120,000 and $200,000. This tax loss

would have resulted in a base offense level of 15. U.S. Sentencing Guidelines Manual

§ 2T4.1(J), (K). At sentencing, Ture abandoned his objection to the tax loss

calculation because the total offense level would have been 13 regardless of the tax

loss. Specifically, the Guidelines allow for a two-level reduction for acceptance of

responsibility if the offense level is below 16, but allow for a three-level reduction if

the offense level is 16 or greater. Id. § 3E1.1. With the maximum acceptance-ofresponsibility reduction, Ture's total offense level would have been 13 had the base

offense level been either 15 or 16. Ture asserts that the dispute over the tax loss "was

meaningless." Appellee's Brief at 3. As far as the Guidelines range is concerned, we

agree. We note, however, that the record still reflects that the District Court found the

tax loss to be $240,252, which is a meaningful finding when determining an

appropriate sentence.

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When referencing Ture's physical condition, the PSR stated that the sixty-eightyear-old Ture suffers from high blood pressure and has a history of coronary heart

disease, both of which require medication. In 1998, Ture underwent heart bypass

surgery. In 2004, Ture had surgery for carpal tunnel syndrome.

Because the PSR's tax-loss calculation of $240,252 reflected a tax loss greater

than $200,000 but less than $325,000, the District Court calculated Ture's base offense

level to be 16. U.S. Sentencing Guidelines Manual § 2T4.1(K), (L) (1998). The

Court then granted the government's motion for a three-level reduction for acceptance

of responsibility, resulting in a total offense level of 13. Id. § 3E1.1. As this was

Ture's first offense, his criminal history category was I. Given Ture's offense level

and criminal history category, the District Court determined that the sentencing range

under the United States Sentencing Guidelines ("Guidelines") was twelve to eighteen

months of imprisonment, two to three years of supervised release, and a fine of $3,000

to $30,000.2

 Based on the advisory Guidelines range and the 18 U.S.C. § 3553(a)

factors, the District Court sentenced Ture to two years of probation and 300 hours of

community service. The Court did not impose a fine because it decided that Ture's

"resources will be stretched as they are to pay whatever penalties and back taxes are
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owed to the Internal Revenue Service." Sent. Tr. at 17:7–9. The Court did not order

restitution because the Internal Revenue Service would pursue collection of

outstanding taxes, interest, and penalties.

The District Court provided its rationale for the sentence at Ture's sentencing

hearing and in a separate sentencing memorandum. The District Court stated that its

review of the Guidelines and the § 3553(a) factors convinced it that a "probation

sentence together with a significant community service requirement and the

anticipated cost to defendant of paying back taxes, interest and penalties, constitutes

a sentence that is sufficient and not greater than necessary." Sent. Mem. at 2 (July 1,

2005). The Court found "no reason to sentence [Ture] to prison." Id. at 3. In

reaching its sentencing decision, the Court also mentioned the following factors: this

was Ture's "first criminal offense after a long life"; Ture used "relatively

unsophisticated" means to commit the crime; Ture "has cooperated fully with the

investigation and his prosecution"; Ture has expressed remorse and has remained law

abiding; Ture has a serious heart condition requiring ongoing treatment; there is "no

need to protect the public from further crimes" by Ture; Ture's sentence is unlikely to

"affect whether other business people commit crimes"; Ture's "federal felony

conviction will affect him in significant ways"; and the bottom of the sentencing

range, twelve months, is "just above the range where probation is an authorized

sentence under the Guidelines." Id. at 3. The Court also mentioned Ture's age as a

factor in not sentencing Ture to imprisonment, but later found that Ture still has the

ability to work, something the Court deemed "important" so that Ture could "make a

significant effort to repay as much as possible" of his "large [tax] bill." Sent. Tr. at

18:9–11. The Court further stated, "There is adequate deterrence with the enormous

bill that will be required, the back taxes and penalties, the fact of a federal felony

conviction I think all affords adequate deterrence in light of your age and your health

condition." Id. at 18:25–19:4. Finally, the District Court referred to Ture's crime as

"a terrible mistake and one that is truly unfortunate." Id. at 18:20–21.
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On appeal, the government contends, "The non-custodial sentence in this case

was unreasonable, and the factors used by the district court cannot support such a

sentence." Appellant's Brief at 3. The government asks us "to remand the case to the

district court with instructions to impose a reasonable sentence, one that includes at

least some period of incarceration." Id. at 19.

II.

As the District Court correctly noted, the Guidelines are no longer mandatory.

Though not bound by the Guidelines, district courts "must consult those Guidelines

and take them into account when sentencing." United States v. Booker, 543 U.S. 220,

264 (2005). Post-Booker, district courts must first determine the appropriate

sentencing range under the Guidelines because that range is still an important

sentencing factor. United States v. Haack, 403 F.3d 997, 1002–03 (8th Cir.), cert.

denied, 126 S. Ct. 276 (2005). District courts must then decide if a traditional

departure under the Guidelines is appropriate. Id. at 1003. Finally, once district

courts determine the Guidelines sentencing range, courts must consider the § 3553(a)

factors to determine a sentence, i.e., courts must decide whether to impose a

Guidelines sentence or to vary from the Guidelines range to impose a non-Guidelines

sentence. Id.

The District Court decided that the Guidelines range was twelve to eighteen

months of imprisonment, two to three years of supervised release, and a fine of $3,000

to $30,000. The District Court also concluded that no downward departures were

warranted under the Guidelines. Neither Ture nor the government challenges the

District Court's Guidelines calculations. Instead, the government only challenges the

reasonableness of the District Court's variance from the Guidelines range such that no

term of imprisonment was imposed. Thus, we review "the resulting sentence[] for

reasonableness, a standard akin to our traditional review for abuse of discretion."

United States v. Lazenby, 439 F.3d 928, 931–32 (8th Cir. 2006). In performing this
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review, we ask "whether the district court's decision to grant a § 3553(a) variance

from the appropriate guidelines range is reasonable, and whether the extent of any

§ 3553(a) variance . . . is reasonable." United States v. Mashek, 406 F.3d 1012, 1017

(8th Cir. 2005).

In performing our reasonableness review, we understand that "[t]he Guidelines

were fashioned taking the other § 3553(a) factors into account and are the product of

years of careful study." Lazenby, 439 F.3d at 932. Thus, although the Guidelines

range is advisory, a sentence within that range is presumed to be a reasonable sentence

even post-Booker. Id. A non-Guidelines sentence, on the other hand, "may be

unreasonable if a sentencing court fails to consider a relevant factor that should have

received significant weight, gives significant weight to an improper or irrelevant

factor, or considers only appropriate factors but nevertheless commits a clear error of

judgment by arriving at a sentence that lies outside the limited range of choice dictated

by the facts of the case." Haack, 403 F.3d at 1004. An extraordinary variance from

the Guidelines range must be "supported by comparably extraordinary circumstances."

United States v. Claiborne, 439 F.3d 479, 481 (8th Cir. 2006); United States v. Goody,

442 F.3d 1132, 1134 (8th Cir. 2006) (stating "that absent exceptional facts, sentencing

a defendant to a sentence dramatically lower than that recommended by the guidelines

is an abuse of the district court's discretion"). "The further the district court varies

from the presumptively reasonable guideline range, the more compelling the

justification based on the 3553(a) factors must be." United States v. Bryant, No. 05-

2243, 2006 WL 1227748, * at 1 (8th Cir. May 9, 2006).

The District Court sentenced Ture to two years of probation and 300 hours of

community service, but not to imprisonment. This, in effect, amounts to a 100%

downward variance from the Guidelines range. This variance is unreasonable because

such an extraordinary variance is not supported by extraordinary circumstances.

Although the District Court acted well within its discretion to grant a variance, we
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conclude that the extent of the variance was unreasonable such that the District Court

abused its discretion.

Three reasons counsel our conclusion that the District Court abused its

discretion in meting out an unreasonable sentence. First, the District Court failed to

accord significant weight to the Guidelines range, to the seriousness of Ture's offense,

or to the need to avoid unwarranted sentencing disparities. The resultant sentence also

does not promote respect for federal tax laws, provide just punishment, or ensure

adequate deterrence to willful tax cheats. See 18 U.S.C. § 3553(a)(2), (4), (6). Giving

due weight to these factors, we conclude that any sentence without a term of

imprisonment is wholly unreasonable.

Although the Guidelines are advisory, they must still be afforded due weight,

especially when they bear on the other sentencing factors in § 3553(a). For example,

the Guidelines contain vital information about appropriate sentences for offenses

involving taxation: 

The criminal tax laws are designed to protect the public interest in

preserving the integrity of the nation's tax system. Criminal tax

prosecutions serve to punish the violator and promote respect for the tax

laws. Because of the limited number of criminal tax prosecutions

relative to the estimated incidence of such violations, deterring others

from violating the tax laws is a primary consideration underlying these

guidelines. Recognition that the sentence for a criminal tax case will be

commensurate with the gravity of the offense should act as a deterrent

to would-be violators.

U.S. Sentencing Guidelines Manual ch. 2, pt. T, introductory cmt. The Guidelines

recognize that "[t]ax offenses, in and of themselves, are serious offenses" and that the

amount of the tax loss should be the main focus at sentencing. Id. § 2T1.1, cmt.

background. Because "a greater tax loss is obviously more harmful to the treasury

and more serious than a smaller one," the Guidelines recognize that "the sanction
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necessary to deter" future tax crimes increases "as the potential benefit from the

offense increases." Id. Finally, the Guidelines underscore the importance of sentences

including a term of imprisonment:

Under pre-guidelines practice, roughly half of all tax evaders were

sentenced to probation without imprisonment, while the other half

received sentences that required them to serve an average prison term of

twelve months. This guideline is intended to reduce disparity in

sentencing for tax offenses and to somewhat increase average sentence

length. As a result, the number of purely probationary sentences will be

reduced. The Commission believes that any additional costs of

imprisonment that may be incurred as a result of the increase in the

average term of imprisonment for tax offenses are inconsequential in

relation to the potential increase in revenue. According to estimates

current at the time this guideline was originally developed (1987),

income taxes are underpaid by approximately $90 billion annually.

Guideline sentences should result in small increases in the average length

of imprisonment for most tax cases that involve less than $100,000 in tax

loss. The increase is expected to be somewhat larger for cases involving

more taxes.

Id.

The District Court abused its discretion in granting a 100% variance from the

Guidelines range, which amounted to a five-level reduction in Ture's total offense

level. Given the long duration of Ture's criminal conduct, the tremendous amount of

tax evaded, and his enlistment of an employee to assist with the crime, we believe the

District Court failed to adequately consider the seriousness of Ture's offense, the goal

of promoting respect for our federal tax laws, and the need for a just sentence

including imprisonment. The Court also failed to faithfully consider the Guidelines,

which strongly advocate in favor of a term of imprisonment for a willful tax evader

in these circumstances. Id.; see also id. § 5B1.1, n.2 ("Where the applicable guideline

range is in Zone C or D of the Sentencing Table (i.e., the minimum term of
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imprisonment specified in the applicable guideline range is eight months or more), the

guidelines do not authorize a sentence of probation."); § 5C1.1(f) ("If the applicable

guideline range is in Zone D of the Sentencing Table, the minimum term shall be

satisfied by a sentence of imprisonment.").

The District Court also failed to consider the importance of a term of

imprisonment to deter others from stealing from the national purse. As the Guidelines

explain, willful tax evaders often go undetected such that those who are

caught—especially those who are caught evading nearly a quarter-million dollars in

tax—must be given some term of imprisonment. The goal of deterrence rings hollow

if a prison sentence is not imposed in this case. Finally, the District Court failed to

properly consider the need to avoid unwarranted sentencing disparities. Bryant, 2006

WL 1227748, at *2 ("The sentencing guidelines are indeed no longer mandatory, but

they continue to be guideposts that must be respected, lest we see a return to the

unwarranted sentencing disparities that resulted in the adoption of the guidelines

themselves."). A review of Ture's offense and the factors the District Court

considered almost begs the question of who gets prison if Ture does not. As the

Guidelines illustrate, only half of the tax evaders actually convicted historically

received imprisonment as part of their sentences. To reduce sentencing disparities,

the Guidelines sought to ensure more tax evaders were sentenced to prison,

specifically focusing on those who evaded more than $100,000 in federal taxes. Ture

fits that bill.

The second reason the District Court abused its discretion is because it wrongly

accorded significant weight to an improper factor. In deciding against a term of

imprisonment, the District Court placed a great deal of weight on the fact that Ture

owes a substantial amount of back taxes, interest, and penalties. We deem this factor

entirely improper and believe it results in bad public policy. If district courts were

free to reduce prison sentences as the amount of tax loss rises, willful tax evaders
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would benefit as the amount of the government's tax loss rises, i.e., the lesson would

be the more you cheat, the more lenient your sentence. The opposite is true.

Third, the remaining factors—though certainly relevant—did not justify a

sentence without a term of imprisonment. These remaining factors simply are not so

extraordinary as to warrant a no-prison sentence. For example, the District Court

stated that this was Ture's first offense, that he has expressed remorse, and that he has

cooperated with his prosecution. These factors weighed heavily in Ture's Guidelines

range, as Ture's limited criminal history and the three-level reduction for acceptance

of responsibility already reduced the sentencing range. These factors represent

nothing so extraordinary as to support the extraordinary variance needed to eliminate

a term of imprisonment. Besides, Ture's serious criminal offense, though his first,

lasted nearly four years and involved large sums of money. The District Court also

mentioned that Ture employed relatively unsophisticated means to commit his crime.

Although the Guidelines somewhat consider this factor by imposing a two-level

enhancement for sophisticated concealment, U.S. Sentencing Guidelines Manual

§ 2T1.1(b)(2), we see nothing about Ture's crime to make it so extraordinarily

unsophisticated as to separate it from other willful tax evasions. Ture enlisted an

employee to conceal $647,430.95 in income from the federal government by using a

bookkeeping maneuver to treat Ture's personal income as materials or subcontractor

expenses. Finally, the District Court considered Ture's health condition and age in

determining that Ture should not go to prison. Although we note that the Guidelines

allow courts to consider age, id. § 5H1.1, and whether a defendant is "seriously

infirm," id. § 5H1.4, when considering downward departures, the District Court did

not consider these Guidelines provisions. Instead, the Court simply listed age and

health as additional reasons for a no-prison sentence, stating that Ture should work

to pay off his debt to the Internal Revenue Service. The Court's logic does not

convince us that Ture's age and health are so extraordinary that they eliminate the

need for imprisonment. Moreover, the District Court used these factors to essentially

conclude that Ture is too old and sick for prison, but he is young and well enough to
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work to pay off his substantial tax debt. Though the District Court certainly can

consider Ture's age and health in determining an appropriate sentence in light of all

of the sentencing factors, the District Court's rationale to justify a no-prison sentence

is unreasonable.

The bottom line is that a proper evaluation of the relevant sentencing factors

leads inexorably to the conclusion that a reasonable sentence for Ture must include

a term of imprisonment. As we recently stated, "There is nothing so extraordinary

here that supports a substantial deviation from the results contemplated by Congress

and the resulting sentence is unreasonable." United States v. Givens, 443 F.3d 642,

646 (8th Cir. 2006).

III.

For the reasons discussed, we vacate the sentence and remand the case to the

District Court for resentencing.

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