Source: http://openjurist.org/252/f3d/559/united-states-of-america-v-patrick-bennett
Timestamp: 2013-05-25 18:13:47
Document Index: 96619880

Matched Legal Cases: ['§ 982', '§ 982', '§ 853', '§ 853', '§ 2', '§ 2', '§ 2', '§ 2', '§ 3', '§ 2', '§ 2', '§ 2', '§ 2', '§ 3', '§ 3']

252 F3d 559 United States of America v. Patrick Bennett | OpenJurist
252 F. 3d 559 - United States of America v. Patrick Bennett	Home252 f3d 559 united states of america v. patrick bennett
252 F3d 559 United States of America v. Patrick Bennett 252 F.3d 559 (2nd Cir. 2001)
UNITED STATES OF AMERICA, APPELLEE,v.PATRICK BENNETT, DEFENDANT-APPELLANT.
Docket No. 00-1330August Term 2000
Bennett challenges his sentence primarily on the ground that the District Court erred in enhancing the sentence by ten years because of the refusal of Bennett's wife to surrender her interest in the family home and other assets. We find very little precedent bearing on this issue. It is unusual for a sentencing judge to select a presumptive sentence and then state that the sentence will be increased if some action the judge deems appropriate is not taken.5 It is even more unusual to use the threat of an increased sentence to compel action by someone other than the defendant.6 We need not explore generally the extent of a sentencing judge's authority to use the threat of increased punishment to compel action by a defendant or another person because in this case the use of such power conflicts with the statutory remedy that Congress has established to recapture the proceeds of various unlawful activities, including money laundering. See 18 U.S.C. § 982. That remedy is available to recapture proceeds in the hands of a third party, id. § 982(b)(1) (incorporating provisions of 21 U.S.C. § 853(c)), subject to the third party's opportunity to establish a right of ownership superior to the Government's or a status as a bona fide purchaser reasonably without cause to believe that the property was subject to forfeiture, see 21 U.S.C. § § 853(n)(6).
We fully understand Judge Martin's concern to aid the victims of Bennett's crimes. He was anxious not only to restore to them at least a portion of their losses but also to avoid the distress of their "see[ing] his wife living in luxury on... assets purchased with their money." Despite the legitimacy of these objectives, they may not be achieved by the threat of added punishment for Bennett unless his wife surrenders her statutory right to contest the forfeiture of properties that are at least nominally hers.
II. Other Sentencing Challenges
Fraud loss. Bennett challenges the District Court's finding of a fraud loss of more than $80 million. Judge Martin indicated that he had "reviewed the presentence report, reviewed the voluminous submissions with respect to the sentencing and accept[ed] the determination of the Probation Department with respect to the calculation of the guideline range with respect to the fraud guideline." The Probation Department estimated loss for the pyramid scheme only. With respect to this scheme, the Probation Department found that the annual income from the sale of lease products to investors exceeded the value of the leases originated by more than $200 million in 1994 and again in 1995. By the time BFG filed for bankruptcy, the aggregate shortfall between the amount owed lease investors and the value of the collateral was approximately $600 million. A court, relying on findings of the Probation Department, "need only make a reasonable estimate of the loss, given the available information," U.S.S.G. § 2F1.1, cmt. n.9, and we are satisfied that Judge Martin properly estimated a loss substantially in excess of $80 million.
Affecting a financial institution. Bennett challenges the four-level enhancement that is authorized "[i]f the offense... affected a financial institution and the defendant derived more than $1,000,000 in gross receipts from the offense." U.S.S.G. § 2F1.1(b)(7)(b). A defendant must "individually" derive $1 million from the offense, and gross receipts include all amounts "obtained directly or indirectly as a result of the offense." Id. § 2F1.1 cmt. n.18. The presentence report documented fraudulent bank borrowings of $407 million by BFG; transfers of $1 billion from BFG to Bennett Management and Development Corporation ("BMDC"), a shell company owned by Bennett and his brother; and distributions of $13 million from BMDC to Bennett's personal bank and brokerage accounts.
Bennett contends that he "received no direct personal benefit" from the bank loans, Brief for Appellant at 78, claiming that the loan proceeds were "used to purchase the leases sold to the banks." Reply Brief for Appellant at 55. Whether or not all the loan proceeds were used to purchase leases, the enhancement is available for a defendant who derives at least $1 million "indirectly as a result of the offense." U.S.S.G. § 2F1.1 cmt. n.18 (emphasis added). There is no serious dispute that the fraudulent bank loans facilitated the fraudulent schemes that enabled Bennett to shift millions of dollars from BFG to BMDC and then into his personal accounts. See United States v. Monus, 128 F.3d 376, 397 (6th Cir. 1997) ("[T]he defendant must derive a million dollars from the offense, not from the financial institutions.").
Organizer. Bennett challenges the enhancement for being an organizer or leader of a criminal activity with five or more participants. See U.S.S.G. § 3B1.1(a). Whether or not his activity involved five participants, the enhancement applies so long as the criminal activity was "otherwise extensive," for example, a fraud involving the "unknowing services of many outsiders." Id. cmt. n.3. This circumstance is applicable to Bennett's conduct because his frauds involved a wide array of witting or unwitting brokers, accountants, and bankers. Bennett also argues that his planning was double-counted to support both the organizer enhancement under section 3B1.1(a) and the enhancement for "more than minimal planning, or... a scheme to defraud more than one victim" under section 2F1.1(b)(2). However, both enhancements were properly applied. Section 2F1.1(b)(2) provides that the two-level enhancement may be premised on more than minimal planning or the fact that "more than one victim" was defrauded, and both grounds applied to Bennett. Where, as here, there are multiple fraud victims, Bennett's role as planner could be used to support the four-level increase under section 3B1.1(a) without precluding application of section 2F1.1(b)(2). Compare United States v. Greenfield, 44 F.3d 1141, 1146 n.3 (2d Cir. 1995) (same planning conduct cannot be used to justify both enhancements).
36 was the adjusted offense level for the "group" of fraud offenses. See U.S.S.G. Part D (1988) (grouping rules). This level was derived from a base offense level of 6, id. § 2F1.1(a), and enhancements of 18 for losses of more than $80 million, id. § 2F1.1(b)(1)(S), 2 for more than minimal planning, id. § 2F1.1(b)(2), 4 for affecting a financial institution and receipts exceeding $1 million, id. § 2F1.1(b)(7)(B), 4 for being a leader of a criminal activity with more than five participants or that was otherwise extensive, id. § 3B1.1, and 2 for obstruction of justice, § 3C1.1. Judge Martin elected to use the adjusted offense level for the fraud group after concluding that the higher adjusted offense level for the money-laundering group of offenses was inapplicable because he considered Bennett's offenses not to be a "heartland" money-laundering offense.
This situation is superficially similar to that of a defendant who receives a higher sentence upon conviction after trial than he would have received if he had pled guilty. However, as we have previously explained, the lower sentence after a guilty plea reflects a "reduction from a sentencing norm ascertained independent of the procedure by which guilt is ascertained. A sentence imposed upon a defendant who stands trial is that norm; it is not an enhancement above the norm as a cost of standing trial." United States v. Cruz, 977 F.2d 732, 734 (2d Cir. 1992). The lawfulness of a discount for pleading guilty is well settled. See Corbitt v. New Jersey, 439 U.S. 212, 219 (1978); Brady v. United States, 397 U.S. 742, 750-51 (1970); Cruz, 977 F.2d at 733-34; United States v. Parker, 903 F.2d 91, 105 (2d Cir. 1990). We have prohibited an increased sentence "above an otherwise appropriate sentencing norm" where the trial judge's pretrial statements to the defendant "created an unacceptable risk... [of] penaliz[ing] the defendant for exercising his constitutional right to stand trial." Cruz, 977 F.2d at 734.
We have located two reported cases in which a prosecutor afforded a defendant the benefit of a favorable plea bargain only on condition of action by others. In United States v. Clements, 992 F.2d 417 (2d Cir. 1993), the Government offered a group of co-defendants a plea bargain conditioned on its acceptance by all of them. Id. at 418. The appellant, who had accepted the plea bargain, later tried to withdraw his plea, contending that the joint plea arrangement was "inherently coercive," id. at 419. We rejected that claim on the ground that a prosecutor "may impose conditions [in a plea agreement] which relate to the conduct or treatment of others." Id. (citing United States v. Marquez, 909 F.2d 738 (2d Cir. 1990)). By citing Marquez, we evidently understood Clements to be contending that there was undue pressure on him to plead, arising from the fact that his co-defendants would not benefit from the plea bargain unless he pled. We ruled, following Marquez, that the voluntariness of a guilty plea is not undermined just because the plea is induced by a defendant's desire to benefit others. Clements's case would be more analogous to Bennett's if Clements had gone to trial after his co-defendants turned down the plea, and he had then complained that he had been denied favorable treatment because they had refused to plead. In United States v. McHan, 966 F.2d 134 (4th Cir. 1992), a defendant was offered a favorable plea bargain conditioned on his wife's forfeiture of property. See id. at 137. When she refused, his trial was scheduled. His (interlocutory) appeal raised only a double jeopardy claim, based on a prior conviction and did not challenge the conditioning of a favorable plea agreement on her conduct. The double jeopardy claim was rejected, but the condition of the refused plea bargain evoked strong criticism from one judge of the panel: "[W]hen the value of a prisoner is measured by the sum others might pay for the state's leniency, I am forced to ponder whether the morality of government has improved in the past six hundred years." Id. at 142 (Hall, J., concurring). Neither Clements nor McHan involves a threat by a prosecutor or a judge to accord a defendant adverse treatment in the event that a third party fails to act.
"[T]he Shonubi statements are better understood as an expression of concern that, in certain cases, the enhancement of a sentence based upon a defendant's 'relevant conduct,' if done without regard to the weight of the evidence proving the relevant conduct, may result in a total term of incarceration which is excessive, inappropriate, and unintended under Sentencing Guidelines." Cordoba-Murgas, 233 F.3d at 708 (citation omitted).
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