Court Opinion

ID: 58958
Source: CourtListenerOpinion
Date Created: 2010-04-26 03:08:17+00
Date Added: 2024-06-11T09:39:00.918271
License: Public Domain

[DO NOT PUBLISH]

              IN THE UNITED STATES COURT OF APPEALS
                                                                   FILED
                       FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
                         ________________________ ELEVENTH CIRCUIT
                                                              February 28, 2008
                               No. 07-11848                  THOMAS K. KAHN
                           Non-Argument Calendar                  CLERK
                         ________________________

                  D. C. Docket No. 06-00091-CR-01-ODE-1

UNITED STATES OF AMERICA,

                                                             Plaintiff-Appellant,

                                    versus

PATRICK ANDERSON,

                                                            Defendant-Appellee.

                         ________________________

                  Appeal from the United States District Court
                     for the Northern District of Georgia
                       _________________________

                             (February 28, 2008)

                      ON PETITION FOR REHEARING

Before TJOFLAT, HULL and PRYOR, Circuit Judges.

PER CURIAM:

     Patrick Anderson requests reconsideration of our earlier opinion in which we
vacated his sentence of three years of probation, including home confinement for

six months, based on his plea of guilty to one count of insider trading. See 15

U.S.C. §§ 78j(b), 78ff(a); 17 C.F.R. § 240.10b-5. We concluded that Anderson’s

sentence, which was below the guideline range of 18 to 24 months of

imprisonment, was unsupported by extraordinary circumstances. The Supreme

Court recently abrogated that test and ruled that although appellate courts may still

“consider the extent of the deviation,” they “must give due deference to the district

court’s decision that the § 3553(a) factors, on a whole, justify the extent of the

variance” from the Guidelines. Gall v. U.S., 128 S. Ct. 586, 595, 597 (2007). We

grant Anderson’s petition for rehearing, vacate our original opinion, and substitute

this opinion, which affirms Anderson’s sentence.

                                 I. BACKGROUND

      Anderson acquired information through his position as a vice-president of

the Tucker Federal Bank, that the parent company of the bank, Eagle Bank,

planned to merge with R.B.C. Centura Bank. In a series of 18 stock transactions

made about one month before the merger was publicly announced, Anderson

purchased 15,000 shares of Eagle Bank. Once the merger was publicly announced,

Anderson profited between $9 to $17 a share, for a total profit of approximately

$135,000. Five to six months later, the Securities and Exchange Commission

                                           2
deposed Anderson about his stock purchases. Anderson admitted that he used

inside information to acquire Eagle Bank stock. Anderson produced documents

and reached a complete and early financial settlement with the SEC before it filed

civil charges against him. Anderson paid back the $134,999.40 in profits he had

earned, $16,844.75 in interest, a civil penalty of $134,999.40, and additional

interest of $2,874.99. He agreed not to offset on his taxes for the amount paid to

the SEC. He paid all these funds to the SEC before he learned of a criminal case.

At sentencing, the government acknowledged that the criminal investigation was

not started until after the civil suit had been resolved.

      The government indicted Anderson for 34 counts of securities fraud, in

violation of section 10(b) of the Securities Exchange Act of 1934. 15 U.S.C. §§

78j(b), 78ff(a); 17 C.F.R. § 240.10b-5. A superseding indictment included an

additional theory of liability, but otherwise charged the same counts and violations.

Anderson entered a plea agreement with the government on the morning of trial

and pleaded guilty to count one of the indictment that charged him with a single

transaction that involved the purchase of 1,000 shares of Eagle Bank stock. The

plea agreement provided that the parties stipulated to an offense level of 15 under

the Sentencing Guidelines and permitted Anderson to “litigate at sentencing . . .

whether he ‘had no knowledge of’ . . . Rule 10b-5 for the purposes of 15 U.S.C. §

                                            3
78ff.” The district court accepted Anderson’s guilty plea and asked the parties to

submit briefs to address whether knowledge about Rule 10b-5 affected Anderson’s

sentence.

      Anderson’s advisory guidelines range was 18 to 24 months. After the

government recommended that Anderson receive a sentence of 18 months of

imprisonment, Anderson argued for a probationary sentence based on his lack of

knowledge about Rule 10b-5. The district court disagreed with Anderson’s lack of

knowledge argument, but sentenced Anderson to serve three years of probation and

six months home detention. The district court based its decision on “the restitution

that [Anderson] promptly made in connection with the civil claim” that the court

found was a “significant penalty,” and the “other very negative consequences from

the fact of the civil judgment and perhaps from the specter of the criminal

sentence,” which included Anderson’s job loss. The district court also based its

decision on its being convinced that “this is something [Anderson] would never

dream of doing again,” that Anderson was not “one of your wheeler-dealer types,”

and that he “has already suffered a great deal through making amends for what he

did.” The government immediately “object[ed] to the sentence below the

guidelines range.”

                          II. STANDARD OF REVIEW

                                          4
      We review the procedural and substantive reasonableness of a criminal

sentence for an abuse of discretion. Gall, 128 S. Ct. at 594, 596–97. “[T]he party

who challenges the sentence bears the burden of establishing that the sentence is

unreasonable in the light of both [the] record and the factors in section 3553(a).”

United States v. Talley, 431 F.3d 784, 788 (11th Cir. 2005).

                                  III. DISCUSSION

      The government challenges the substantive reasonableness of Anderson’s

sentence. The government makes three arguments on appeal: (1) the district court

improperly weighted Anderson’s settlement with the SEC for sentencing purposes;

(2) the probationary sentence failed to promote respect for the law or provide

deterrence; and (3) the facts in Anderson’s case are “entirely different” from those

in Gall and should not be governed by Gall. We affirm Anderson’s sentence.

      In Gall, the Court explained that a sentence free of “significant procedural

error” is subject to deferential review for an abuse of discretion. 128 S. Ct. at 597.

Although the Sentencing Guidelines serve as a “starting point and the initial

benchmark,” the district court has the authority, based on its “individualized

assessment” of the facts, to weigh the factors listed in section 3553(a) and fashion

a sentence outside the guidelines. Id. at 596–97. As long as the district court

provides “justification . . . sufficiently compelling to support the degree of the

                                           5
variance” from the guidelines range, id. at 597, and the term imposed adequately

achieves “the purposes of sentencing stated in § 3553(a),” see United States v.

Pugh, No. 07-10183, 2008 WL 253040 (11th Cir. Jan. 31, 2008), Gall requires that

we affirm. The Supreme Court made clear that “a major departure [from the

Guidelines range] should be supported by a more significant justification than a

minor one.” Gall, 128 S. Ct. at 597; Pugh, 2008 WL 253040, at *8 (quoting Gall).

Further, the appellate courts should “take into account the totality of the

circumstances including the extent of any variance from the Guideline range.”

Gall, 128 S. Ct. at 597; Pugh, 2008 WL 253040, at *9 (quoting Gall).

      The district court assessed the relevant factors under section 3553(a). The

district court considered Anderson’s “prompt” payment of full restitution and a

substantial civil penalty to the SEC and the economic hardship that the settlement

necessarily imposed on him and concluded that Anderson’s conduct indicated his

genuine intent to make amends for his wrongdoing. See U.S.S.G. § 3E1.1 cmt.

n.1(c) (“voluntary payment of restitution prior to adjudication of guilt” is an

“appropriate consideration” at sentencing). The district court found relevant that

the government did not begin its criminal investigation until some time after the

SEC resolved the civil case against Anderson, which indicated that Anderson did

not enter into an agreement with the SEC to minimize his criminal liability. The

                                           6
district court also took into account the “other negative consequences from the fact

of the civil judgment and perhaps also from the specter of the criminal sentence”

which included Anderson’s job loss and diminished income, as well as the

deterrent effect caused by the proceedings. See 18 U.S.C. § 3553(a)(1).

      Unlike in Gall, where the young drug offender was able to pursue freely a

career after his collegiate involvement in an ecstacy conspiracy, Anderson, who is

over 50 years old and supports college-aged children, lost his high-paying job and

has been forced to relocate to obtain any employment in his field and only then at a

significantly reduced salary; he still faces an uphill battle to regain his professional

credibility. See U.S.S.G. § 1B1.4 (court may consider without limitation any

information about defendant’s background, character, and conduct). Anderson’s

commitments and the damage to his reputation “also lend[] strong support to the

conclusion that imprisonment was not necessary to deter [him] from engaging in

future criminal conduct or to protect the public from his future criminal acts.”

Gall, 128 S. Ct. at 602; see 18 U.S.C. § 3553(a)(2)(B). In recognition of the

limitations on Anderson’s marketability and employment, the district court

reasonably imposed a probationary sentence and home confinement to “allow

[him] to continue working.” The extent of the variance from the low end of the

guidelines range here was much less than in Gall and was supported by significant

                                            7
justification. Based on Gall, the district court did not abuse its discretion by

imposing a probationary sentence with home confinement on Anderson. Gall, 128

S. Ct. at 597.

                                 IV. CONCLUSION

      Anderson’s sentence is AFFIRMED.

                                           8