Court Opinion

ID: 3152974
Source: CourtListenerOpinion
Date Created: 2015-11-06 23:00:46.619748+00
Date Added: 2024-06-11T07:38:36.102760
License: Public Domain

In the

    United States Court of Appeals
                For the Seventh Circuit
                    ____________________
No. 14-2701
UNITED STATES OF AMERICA,
                                                  Plaintiff-Appellee,

                                v.

GLORIA HARPER,
                                              Defendant-Appellant.
                    ____________________

        Appeal from the United States District Court for the
          Northern District of Illinois, Eastern Division.
        No. 11 CR 479-1 —Sharon Johnson Coleman, Judge.
                    ____________________

   ARGUED OCTOBER 6, 2015— DECIDED NOVEMBER 6, 2015
                    ____________________

   Before WOOD, Chief Judge, and POSNER and WILLIAMS,
Circuit Judges.
   POSNER, Circuit Judge. The defendant pleaded guilty to
fraud consisting of her having abused her position as a
member of a Chicago public-school board by accepting kick-
backs of more than $500,000 from bus companies to which
she steered transportation contracts worth $21 million. The
parties stipulated that the value of the benefit received from
the fraud was between $7 and $20 million, and so the guide-
2                                                  No. 14-2701

lines range would have been 360 months to life. The guide-
lines in effect at the time required a 20-level enhancement for
honest services fraud when “the value of the payment, the
benefit received or to be received in return for the payment,
the value of anything obtained or to be obtained by a public
official or others acting with a public official, or the loss to
the government from the offense, whichever is greatest,”
was between $7 and $20 million. U.S.S.G. §§ 2C1.1(b)(2),
2B1.1(b) (2012). “The value of ‘the benefit received or to be
received’ means the net value of such benefit.” U.S.S.G.
§ 2C1.1, comment 3. But the statutory maximums for the two
counts were 20 years and 3 years respectively, and that
changed the range to 276 months (23 x 12) pursuant to
U.S.S.G. § 5G1.1(a). The judge imposed a below-guidelines
sentence of 120 months, ordered the defendant to pay resti-
tution to the school district in the amount of $7.2 million,
and imposed a year of supervised release, which the judge
may have thought mandatory.
    The appeal challenges the length of the sentence and the
conditions of supervised release. At sentencing the govern-
ment argued that the value of the benefit received by the
fraudsters in exchange for the kickbacks was nearly $9.7 mil-
lion. An accountant testifying as an expert witness for the
defendant estimated the value of the benefit as only $7.6 mil-
lion, and therefore near the lower end of the benefit estimate.
But the judge rejected his testimony because it lacked “spe-
cifics”: “the government has laid out its case for how it
comes to the figure. The defense just says, well, we don’t
think that’s the figure. We think that estimate is too broad,
but there’s no specifics that the defendant is really able to
give the Court. And the Court’s going to rely on the gov-
ernment’s figures on the loss amount here and the govern-
No. 14-2701                                                 3

ment’s figures about what was involved here based on the
presentations that were made. Who knows. It may be low. It
may be low. We don’t know what was going on here.”
   The defendant’s expert witness had deducted, from the
value of the benefit estimated by the government, salaries
received by managers of the bus companies; he assumed that
those salaries, though derived from payments to the compa-
nies by the school board, were not benefits received in ex-
change for a kickback but instead compensation for legiti-
mate managerial services. But no evidence was presented
that these executives rendered legitimate managerial ser-
vices commensurate with the fees they received from the
school board. The accountant also deducted from the benefit
amount consulting fees paid to persons complicit in the
fraud. That was an improper deduction.
    So probably the judge’s conclusion that the defendant’s
estimate of the benefit should be rejected was correct. But it
was not true that the defense had failed to present “specif-
ics” concerning the amount—the expert witness for the de-
fense had been specific—and the judge’s closing statement—
“Who knows. It may be low. It may be low. We don’t know
what was going on here”—indicates indecision about the
value of the benefit.
    The defense argued that the guidelines sentence, which
had provided the starting point for the judge’s determina-
tion of the sentence to impose, overstated the seriousness of
the defendant’s offense because the value of the benefit of
her crime had been near the low end of the $7-to-$20 million
range. See U.S.S.G. § 2B1.1, comment 20(C); United States v.
Kappes, 782 F.3d 828, 864 (7th Cir. 2015) (sentencing judge
must address the defendant’s principal arguments in mitiga-
4                                                  No. 14-2701

tion). But the argument was premised on the defense expert
witness’s estimate that the value of the benefit had been only
$7.6 million, and the judge didn’t accept that, and her rejec-
tion of the figure suggested that she was accepting the gov-
ernment’s much higher figure—$9.7 million—instead. But
this is not certain, for the judge did concede that the value of
the benefit might have been “low” and said “we don’t know
what was going on here.” Yet she pointed to factors that
made the offense “serious” regardless of the exact amount of
the value of the benefit caused by the defendant: there had
been vulnerable victims of the fraud (the impoverished
school district and children of North Chicago), there was the
defendant’s history of fraud, there was the social problem of
public corruption, and there were the defendant’s attempts
to make excuses for her criminal conduct. But even so, re-
member that the judge sentenced the defendant far below
the guideline range.
    Since the parties had stipulated that the value of the ben-
efit from the fraud was between $7 and $20 million, it may
seem odd that the parties spent so much time at the sentenc-
ing hearing arguing over what the actual amount was. But as
the defendant’s brief explains, “While Ms. Harper did not
persist in her argument that the guideline enhancement for
the value of the benefit received was wrong, she made her
arguments regarding the value of the benefit received as a
mitigating factor for the district court to consider when im-
posing a sentence using the § 3553(a) factors. Ms. Harper’s
argument was that the 20-level enhancement significantly
overstated the seriousness of the offense and the district
court should consider that overstatement when imposing
sentence.” The judge did consider as we noted the possibility
that the value of the benefit received may have been lower
No. 14-2701                                                 5

than the $9.7 million proposed by the government, but as we
also explained she enumerated proper reasons for conclud-
ing that the defendant’s fraud was nevertheless a serious
crime.
    Her sentencing statement does, however, contain an in-
complete discussion of a separate issue concerning the pris-
on sentence that she imposed on the defendant. She said that
“this Court [meaning the judge] is going to find that the sen-
tence that the Court exerts [she meant ‘imposes’] today is
consecutive to the sentence from the Louisiana Court, not
concurrent.” The defendant had been sentenced by a court in
Louisiana for a crime unrelated to the crime in the present
case though apparently of a similar character. The judge in
this case did not explain why she thought the sentence she
was imposing should run consecutively to rather than con-
currently with the Louisiana sentence. Some reason needed
to be given. The transcript of the sentencing hearing contains
discussion of the issue by the lawyers, but the discussion is
inconclusive.
    We don’t mean to prejudge the issue. In giving the de-
fendant a sentence far below the guideline range the judge
may for all we know have been motivated by the Louisiana
sentence and thus have intended that the defendant serve
the remainder of that sentence with no offset to her federal
sentence as an alternative to a longer federal sentence. But a
judge who must choose between imposing a sentence con-
secutively to or concurrently with another sentence should
state the reason for her choice, as for the other choices made
in sentencing.
   The other grounds for ordering resentencing relate to the
conditions of supervised release. The sentence was imposed
6                                                    No. 14-2701

in July of last year, and since then several decisions of this
court have clarified the analysis required to decide what
conditions to impose in what circumstances. See, e.g., United
States v. Thompson, 777 F.3d 368, 373 (2015). Supervised re-
lease was discussed in the following section of the judge’s
sentencing statement:
    Upon release from the Bureau of Prisons, you will have the
    one year of mandatory supervised release. And you will be
    expected, Mrs. Harper, to comply with all the conditions of
    the Court upon that release, which will include no unlaw-
    ful use of illegal substances and the cooperation with Pro-
    bation of any random drug testing. No firearm, destructive
    device possession. Cooperating with DNA samples. Com-
    plying with all of the rules and regulations of the law un-
    der the state and federal law. You will also not incur any
    new credit charges or open lines of credit without the ap-
    proval of Probation. And you will provide the Probation
    Office with any—access to any requested financial infor-
    mation.
    You will also do in addition 40 hours of community ser-
    vice in North Chicago community to be arranged by Pro-
    bation during that year. And the Court is also going to ask
    both within and if it’s still needed outside, you get some
    type of mental health counseling or at least have an as-
    sessment as to whether that counseling is needed.
    This—the judge’s entire discussion at the sentencing
hearing of the conditions of supervised release that she was
imposing—contains a number of problematic statements:
that the imposition of supervised release was mandatory (it
was not, although perhaps she simply meant that some of
the conditions were required by statute); that the conditions
of supervised release would “include” the listed conditions,
No. 14-2701                                                    7

suggesting that other conditions would be imposed as well
(as they were—but improperly as we’ll see); the ambiguity
of the phrase “all of the rules and regulations of the law un-
der the state and federal law” (no one knows all the rules
and regulations promulgated by the states and the federal
government); the ambiguity of “both within and … outside”;
and the failure to identify each condition by number in order
to help the defendant locate its full text.
    Supervised release is mandatory for certain crimes, see,
e.g., 18 U.S.C. § 3583(k); 21 U.S.C. § 841(b), but not for the
ones the defendant in this case was convicted of. And when
as in this case some of the conditions are discretionary the
sentencing judge must give a reason for the imposition of
each such condition that he or she imposes. See 18 U.S.C.
§§ 3583(c), (d)(1)–(3); United States v. Thompson, supra, 777
F.3d at 373. The judge didn’t do that. Moreover, the written
judgment imposes 13 conditions of supervised release that
she didn’t mention at the sentencing hearing. That was a
mistake; the entire sentence is the sentence stated orally by
the judge at the sentencing hearing. Fed. R. Crim. P. 35(c);
United States v. Kappes, supra, 782 F.3d at 862; United States v.
Alburay, 415 F.3d 782, 788 (7th Cir. 2005). Several of the writ-
ten conditions in the judgment, moreover, have been criti-
cized in recent decisions of ours. United States v. Sandidge,
784 F.3d 1055, 1068–69 (7th Cir. 2015); United States v. Thomp-
son, supra, 777 F.3d at 376–80.
    Finally, prison and supervised release can “be substitutes
as well as complements,” United States v. Downs, 784 F.3d
1180, 1182 (7th Cir. 2015), since, realistically, supervised re-
lease is a form of custody (like parole, which it largely re-
placed in the federal system of criminal justice) because it
8                                                 No. 14-2701

can and often does impose severe limitations on a defend-
ant’s post-release liberty. We are therefore ordering a full
resentencing of the defendant. After correcting the condi-
tions of supervised release to conform to the analysis in this
opinion, the judge may decide that the prison sentence she
imposed was too long or too short and if so she will have to
revise it. We also remind the judge that the entire sentence
must be delivered orally.
                                   REVERSED AND REMANDED