Opinion ID: 612373
Heading Depth: 3
Heading Rank: 1

Heading: The Pennsylvania State Senate

Text: Fumo arranged to have a number of Senate employees under his control classified at higher salary grades than they were entitled to be based on their duties and qualifications. In order to calculate the losses attributable to this fraud, the Government reviewed the human resources manual to determine the proper classification for each employee based on testimony about the work they actually performed and then calculated the loss to the Senate as the difference between the highest salary each could possibly have been entitled to and the salary each actually received, for a total of approximately $1 million. At the sentencing hearing, Fumo did not dispute the type of work the employees actually performed or the 36 salaries that they actually received. Instead, he argued that the calculations were too speculative because the Chief Clerk of the Senate could not confirm them and because the Senate had failed to fire or reclassify these employees after the fact, implying that the original classifications were somehow justified. Agreeing with Fumo, the District Court excluded the Government‟s proposed loss altogether. Of course, the Government bears the burden of establishing, by a preponderance of the evidence, the amount of loss. United States v. Jimenez, 513 F.3d 62, 86 (3d Cir. 2008). However, although “the burden of persuasion remains with the Government, once the Government makes out a prima facie case of the loss amount, the burden of production shifts to the defendant to provide evidence that the Government‟s evidence is incomplete or inaccurate.” Id. In making a loss calculation, “[t]he court need only make a reasonable estimate of the loss.” United States v. Ali, 508 F.3d 136, 145 (3d Cir. 2007) (quoting U.S.S.G. § 2B1.1, Application Note 3(C)). Here, the Government made out a prima facie case of the loss amount, and in response Fumo made only the most minimal showing of “inaccuracy” in the Government‟s calculations. In fact, Fumo never really challenges the substance of the Government‟s calculations, instead relying on surrounding circumstances to cast speculative doubt on them. Yet it is not surprising that the Chief Clerk of the Senate, who had not reviewed in detail the evidence concerning each employee‟s duties, declined to take a position on the stand as to the accuracy of the Government‟s calculations. And the Senate‟s decision not to reclassify certain of the employees involved could have been prompted by any manner of reasoning or purposes. Although it is possible that the Government made errors in the course of its calculations, there is no reason to think that its figure was not a “reasonable estimate” of the loss, established by a preponderance of the evidence. Accordingly, after reviewing the District Court‟s grounds for rejecting the Government‟s prima facie showing of the loss amount, we are left with “the 37 definite and firm conviction that a mistake has been committed.” United States v. Grier, 475 F.3d 556, 570 (3d Cir. 2007) (en banc) (internal quotation omitted). Further, because the difference in the loss would place Fumo into a higher offense level, the error was not harmless.
The Government next objects to the District Court‟s decision to exclude from the loss calculation a $150,000, fiveyear contract awarded to Arnao‟s husband Rubin, for which he purportedly performed no services. At the July 8 sentencing hearing, Fumo informed the court that he had gathered additional evidence demonstrating that Rubin had, in fact, completed work under the contract. He submitted the evidence on July 13. The additional material consisted largely of credit card bills and calendar entries, documenting that Rubin had met with people, but not what those meetings had been about. The Government argued that the evidence submitted by Fumo was weak or irrelevant, and noted that Fumo‟s current theory that Rubin had worked directly with Fumo and met with people on his behalf contradicted Rubin‟s testimony at trial, that the contract was with Rubin‟s company, B & R Services, for court services. The District Court declined to rule on the issue of loss from Rubin‟s contract, stating that “because of the complexity of the Rubin loss argument in light of the defense submissions, I felt I could not properly resolve it before sentencing. Rather than postpone the sentencing, I declined to rule on it.” (Sealed App. 184-85). This was an abuse of discretion. The Federal Rules require a Court to rule on any disputed matters at sentencing unless “a ruling is unnecessary . . . because the court will not consider the matter in sentencing.” Fed. R. Crim. P. 32(i)(3)(B). Fumo argues that, because the court excluded the $150,000 from its loss calculation, it did not “consider the matter in sentencing,” and thus its procedure was acceptable. Yet, if “not considering [a] matter” under Rule 32(i)(3)(B) can mean refusing to resolve a matter that is part of the non-discretionary 38 calculation of the Guideline base offense level, then a district court could, for instance, exclude any and all losses, simply because they are disputed, and, consistent with 32(i)(3)(B), calculate a loss amount of $0. In fact, the District Court here effectively did resolve the dispute over the loss from Rubin‟s contract in favor of Fumo when it treated the loss as $0. It simply characterized its decision as “declin[ing] to rule on” the issue and thus requiring no reasoning on its part. A district court should not refuse to find or calculate a loss because of the complexity of the dispute or because spending the time to resolve the dispute might delay sentencing. Fumo cites to United States v. Cannistraro, 871 F.2d 1210, 1215 (3d Cir. 1989), for the proposition that the court may simply refuse to determine whether a loss occurred and therefore exclude a proposed loss from the calculation. However, in Cannistraro, although there was a dispute over the amount of the loss ($400,000 or $3.5 million), the district court was not engaged in the non-discretionary process of calculating a Guidelines offense level based on the loss. Rather, because it was a pre-Guidelines case, id. at 1215 n.4, the court was exercising its broad discretion in considering the gravity of the offense as a whole and then arriving at an overall sentence, Cunningham v. California, 549 U.S. 270, 300 (2007) (noting the “pre-Guidelines federal sentencing system, under which well-established doctrine barred review of the exercise of sentencing discretion . . . .”) (internal quotation omitted). The District Court therefore stated that “[i]t‟s not necessary for me to make a decision this morning as to whether it was three and a half million or whether it was 400,000.” Cannistraro, 871 F.2d at 1215. In this case, by contrast, in order to determine the appropriate offense level under the Guidelines, and to comply with the three-step sentencing process under United States v. Booker, 543 U.S. 220 (2005), and its progeny, it was necessary to definitively resolve the issue of the loss amount from Rubin‟s contract. Because the Government concedes that this issue must be reviewed under the plain error standard, it must show that the error was plain, that it affected substantial rights, and, if 39 not rectified, that it would “seriously affect the fairness, integrity or public reputation of judicial proceedings.” United States v. Ward, 626 F.3d 179, 183 (3d Cir. 2010) (internal citation omitted). The failure to resolve the disputed loss here meets all three criteria. Under Booker and our three-step jurisprudence, the error is clear. Further, if the District Court had found that Rubin‟s contract was a loss of $150,000, it would have raised the offense level of the defendant, affecting the public‟s substantial rights. See United States v. Dickerson, 381 F.3d 251, 260 (3d Cir. 2004) (district court‟s impermissibly lenient sentence could constitute “plain error” because “Congress‟s interest in imprisoning certain . . . offenders is a „right‟ to which the citizenry is entitled”). Finally, if courts may simply disregard disputed losses on the grounds that they are “not considering” them, the fairness of the proceedings may be called seriously into question. Accordingly, on remand the District Court should carefully consider the evidence and make a determination as to whether, and to what extent, Rubin‟s contract resulted in a loss to the Senate.