Court Opinion

ID: 2790614
Source: CourtListenerOpinion
Date Created: 2015-04-01 17:01:05.597139+00
Date Added: 2024-06-11T12:12:18.505838
License: Public Domain

FILED
                                                              United States Court of Appeals
                                                                      Tenth Circuit

                       UNITED STATES COURT OF APPEALS April 1, 2015

                             FOR THE TENTH CIRCUIT       Elisabeth A. Shumaker
                         _________________________________   Clerk of Court

UNITED STATES OF AMERICA,

       Plaintiff - Appellee,

v.                                                       No. 14-1211
                                               (D.C. No. 1:12-CR-00450-JLK-1)
JAMES P. BURG,                                            (D. Colo.)

       Defendant - Appellant.

                      ________________________________

                          ORDER AND JUDGMENT *
                      _________________________________

Before BRISCOE, Chief Judge, SEYMOUR and KELLY, Circuit Judges.
                 _________________________________

       Defendant James Burg pleaded guilty and was convicted of one count of

mail fraud, in violation of 18 U.S.C. § 1341, and one count of willful failure to

file a tax return, in violation of 26 U.S.C. § 7203. The district court sentenced

Burg to 90 months’ imprisonment and ordered Burg to pay $2,464,099 in

restitution.

       Burg appeals his sentence, arguing that it is substantively unreasonable.

Exercising jurisdiction pursuant to 28 U.S.C. § 1291, we affirm.

       *
        This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. It may be cited,
however, for its persuasive value consistent with Fed. R. App. P. 32.1 and 10th
Cir. R. 32.1.
                                          I

1. Crimes

      Between 2007 and 2012, Burg carried out a fraud scheme. He claimed that

he was in the business of selling gold coins and held himself out as a “Christian

coin dealer.” ROA Vol. II, at 7. He advertised his services on the radio and

internet, using several websites that he controlled. He also communicated

directly with some customers face-to-face, by phone, or by email. On one of his

websites, he stated, “My motto is ‘honesty and fairness’ and you can’t ask for

more.” Id. Burg successfully convinced 41 victims to send him money for the

purchase of coins.

      Burg took money from his victims, but in most cases failed to deliver the

coins as promised. Instead, he offered a litany of excuses to customers when they

asked why their coins had not been delivered. Only a few customers who

threatened to sue or to go to the police ever received the coins they ordered. A

few also received refunds that Burg paid by using other customers’ payments for

coins. For the most part, however, customers who sent Burg money for the

purchase of coins received nothing in return. In total, Burg defrauded customers

of nearly $2.5 million.

      Burg also failed to file required federal tax returns for the years 2003

through 2009. For the years 2006 and 2007, Burg filed returns but entered zeroes

on all of the lines where dollar figures are usually entered, causing the IRS to

                                         2
treat his returns as though they had not been filed. For the remaining tax years,

Burg filed no returns at all.

      Burg was charged with six counts of wire fraud, in violation of

18 U.S.C. § 1343; nine counts of mail fraud, in violation of 18 U.S.C. § 1341;

four counts of engaging in a monetary transaction in property derived from stolen

activity, in violation of 18 U.S.C. § 1957; and four counts of willful failure to file

a tax return, in violation of 26 U.S.C. § 7203. He pleaded guilty to one count of

mail fraud and one count of willful failure to file a tax return. The remaining

twenty-one counts were dismissed pursuant to his plea agreement.

2. Sentence

      In accordance with the plea agreement and Presentence Investigation

Report, the parties agree that the resulting sentencing range as calculated under

the United States Sentencing Guidelines was 63 to 78 months’ imprisonment. 1

      1
        The base offense level for the fraud count was 7. U.S.S.G. § 2B1.1. A
sixteen-level increase applied because the loss was between $1 million and $2.5
million. U.S.S.G. § 2B1.1(b)(1)(I). A two-level increase applied because the
offense involved ten or more victims. U.S.S.G. § 2B1.1(b)(2)(A). A two-level
increase applied because the offense involved relocation to another jurisdiction to
evade law enforcement. U.S.S.G. § 2B1.1(b)(10). Thus, the adjusted offense
level for the fraud count was 27.
       The base offense level for the tax count was 22. U.S.S.G. §§ 2T1.1, 2T4.1
(tax table). A two-level increase applied because Burg had failed to report
income exceeding $10,000. U.S.S.G. § 2T1.1(b)(1). Thus, the adjusted offense
level for the tax count was 24.
       The fraud and tax counts did not group because they did not entail closely
related conduct. U.S.S.G. § 3D1.2. The combined offense level was therefore
calculated under U.S.S.G. § 3D1.4. Pursuant to that rule, the combined offense
level was 29. Burg merited a three-level reduction for acceptance of
responsibility, resulting in a final offense level of 26.
                                                                     (continued...)

                                           3
The district court, however, made it very clear that it would not rely on the

Guidelines in determining the appropriate sentence, but would instead impose a

sentence in accordance with 18 U.S.C. § 3553(a). The court sentenced Burg to 78

months’ imprisonment on the fraud count and 12 months’ imprisonment on the tax

count, to run consecutively, for a total of 90 months’ imprisonment. The court

also ordered Burg to pay $2,464,099 in restitution.

                                          II

      Burg argues that his 90-month sentence is substantively unreasonable.

“Review for substantive reasonableness focuses on whether the length of the

sentence is reasonable given all the circumstances of the case in light of the

factors set forth in 18 U.S.C. § 3553(a).” United States v. Friedman,

554 F.3d 1301, 1307 (10th Cir. 2009) (internal quotation marks omitted). These

factors include “the nature of the offense and the characteristics of the defendant,

as well as the need for the sentence to reflect the seriousness of the crime, to

provide adequate deterrence, to protect the public, and to provide the defendant

with needed training or treatment.” United States v. Kristl, 437 F.3d 1050, 1053

(10th Cir. 2006); see also United States v. Gall, 552 U.S. 38, 50 n.6 (2007).

      The district court’s sentencing decision is reviewable only for abuse of

discretion. Kristl, 437 F.3d at 1053. “A district court abuses its discretion when

it renders a judgment that is arbitrary, capricious, whimsical, or manifestly

      1
      (...continued)
      Burg’s criminal history category was I, so his resulting sentencing range
was 63 to 78 months. U.S.S.G. Sentencing Table.

                                          4
unreasonable.” United States v. Muñoz-Nava, 524 F.3d 1137, 1146 (10th Cir.

2008) (internal quotation marks omitted).

      When a sentence falls within the properly calculated Guidelines range, we

“apply a presumption of reasonableness to the sentence.” United States v. Regan,

627 F.3d 1348, 1352 (10th Cir. 2010). A defendant can rebut that presumption by

showing that the sentence was unreasonable “in light of the § 3553(a) factors.”

United States v. Martinez-Barragain, 545 F.3d 894, 905 (10th Cir. 2008). In the

present case, however, the parties agree that Burg’s 90-month sentence is outside

the Guidelines range of 63 to 78 months and is not presumptively reasonable. 2

Even without this presumption, however, we conclude that Burg’s sentence is

substantively reasonable.

      Burg’s primary argument is that “the fraud guideline on its own terms

uniformly yields ranges that are too high,” see Aplt. Br. at 23, and that the district

court “determined the fraud guideline to be unsound in ways that marked that

guideline as being, at all points, too high on its own stated terms.” Aplt. Reply

Br. at 8. Burg argues that the district court abused its discretion because it

imposed an above-guidelines sentence even though the court found that the fraud

guidelines recommend sentences that are uniformly too long. But we reject the

premise of this argument. The district court appears to have rejected the

      2
        In its appellate briefing, the government originally argued that Burg’s
sentence was within the Guidelines range and therefore presumptively reasonable.
Recognizing that this argument relied on an incorrect application of the grouping
rules, however, the government abandoned it at oral argument. See U.S.S.G.
§ 5G1.2.

                                          5
guidelines in this case not because they recommend sentences that are uniformly

too long, but rather because they “lack any . . . empirical basis” and make no

attempt to “look at the . . . individual circumstances of the defendant or of the

victims.” ROA Vol. IV, at 73-74. The district court explained that the fraud

guidelines’ emphasis on total financial loss “ignores the devastating affects [sic]

[a fraud] can have on victims, irrespective of the particular amounts involved.”

Id. at 74. Thus, the district court’s policy disagreement with the fraud guidelines

seems to envision not only circumstances where the recommended sentence will

be too long, but also circumstances where the sentence will be too short. And the

court was within its discretion to deviate from the guidelines based on policy

disagreement. 3 See Spears v. United States, 555 U.S. 261, 265-66 (2009) (per

curiam).

      Burg also argues that his lack of criminal history, his age (63) and poor

health, and the fact that he is sorry for his crimes all suggest that the district court

abused its discretion by imposing an above-guidelines sentence. Burg argues that

all of these considerations make him less likely to recidivate following his release

from prison, reducing the deterrent value of his sentence. He also argues that his

age and health will make any length of imprisonment harsher for him than it

would be for a younger, healthier offender.

      3
         We take no position on the merits of the district court’s policy assessment
of the fraud guideline.

                                           6
      The district court considered these arguments and concluded that they did

not support a more lenient sentence. For example, the district court

acknowledged that Burg is in poor health and that prison would likely be hard on

him, but the court concluded that Burg would be able to receive any necessary

medical care while incarcerated. Burg’s own attorney even admitted that this was

true, stating that “to be brutally candid, I cannot say that there is anything [Burg]

suffers [from] that cannot be dealt with one way or another [in prison].” ROA

Vol. IV, at 80.

      Moreover, in applying the § 3553(a) factors, the district court was within

its discretion to accord age, health, and remorse less weight than other factors that

it found more salient. “The district court need not afford equal weight to each of

the factors.” United States v. Sanchez-Leon, 764 F.3d 1248, 1267 (10th Cir.

2014). “In many cases there will be a range of possible outcomes [that] the facts

and law at issue can fairly support; rather than pick and choose among them

ourselves, we will defer to the district court’s judgment so long as it falls within

the realm of these rationally available choices.” United States v. Reyes-Alfonso,

653 F.3d 1137, 1145 (10th Cir. 2011) (quotations and alterations omitted).

      The district court focused on the need for the sentence “to reflect the

seriousness of the offense . . . and to provide just punishment . . . .”

18 U.S.C. § 3553(a)(2)(A). In particular, the court cited Burg’s “repetitive

conduct, time and time again, even after being interrogated at a police

department, and the very next day doing the same sort of thing.”

                                            7
ROA Vol. IV, at 86. The court also emphasized the extreme detrimental impact

Burg’s fraud had upon his elderly victims, noting concern for “the victims in this

case . . . especially for those needing [the lost funds] for their retirement . . . .”

Id. At the sentencing hearing, the court heard testimony from the husband of a

woman who invested her entire 401(k), totaling $325,000, and lost it all. It was

especially appropriate for the district court to consider these facts given that Burg

will never be able to make full restitution to the victims. As his counsel

acknowledged at the sentencing hearing, “the odds of his ever being able to pay

back anywhere near close to [$2.5 million] of restitution at his age or even at a

somewhat younger age, are extraordinarily unlikely and will not, regardless, make

the victims whole.” Id. at 80.

       Finally, the strength of the justification a district court must provide for

deviating from the guideline range depends on the degree to which the imposed

sentence deviates from the one recommended by the guidelines. See United

States v. Lente, 759 F.3d 1149, 1158 (10th Cir. 2014). A “major” deviation

should have “a more significant justification than a minor one.” Gall, 552 U.S. at

50. Nevertheless, the Supreme Court has rejected “an appellate rule that requires

‘extraordinary’ circumstances to justify a sentence outside the Guidelines range”

and “the use of a rigid mathematical formula that uses the percentage of a

departure as the standard for determining the strength of the justification required

for a specific sentence.” Id. at 47. Here, the district court imposed a sentence of

90 months’ imprisonment instead of 78, an increase of only 12 months, or fifteen

                                             8
percentage points above the high end of the advisory guidelines range. Moreover,

we note that the statutory maximum sentence for the crimes of conviction was 252

months, 4 almost three times as long as the sentence the district court actually

imposed. The sentence was not a major deviation.

      We therefore conclude that Burg’s sentence was reasonable in light of the

sentencing factors set out in 18 U.S.C. § 3553(a). The district court did not abuse

its discretion in sentencing Burg to 90 months’ imprisonment.

                                         III

      Because we conclude that Burg’s sentence was substantively reasonable,

we AFFIRM. We GRANT Burg’s unopposed motion to supplement the record.

                                               Entered for the Court

                                               Mary Beck Briscoe
                                               Chief Judge

      4
       The statutory maximum sentence for the fraud count was 240 months.
18 U.S.C. § 1341. The maximum for the tax count was 12 months. 26 U.S.C.
§ 7203. If the sentences were ordered to be served consecutively, the resulting
sentence would be 252 months.

                                          9