Court Opinion

ID: 2994388
Source: CourtListenerOpinion
Date Created: 2015-09-24 19:14:24.651835+00
Date Added: 2024-06-11T09:24:34.290103
License: Public Domain

In the
United States Court of Appeals
For the Seventh Circuit

Nos. 99-3627, 99-3674 & 99-3699

United States of America,

Plaintiff-Appellee,

v.

George A. Coe, Jr., Jeffrey "J.J." Thomas,
and David T. Beasley,

Defendants-Appellants.

Appeals from the United States District Court
for the Central District of Illinois, Urbana Division.
No. 98-20031--Michael P. McCuskey, Judge.

Argued March 29, 2000--Decided July 18, 2000

       Before Flaum, Ripple and Kanne, Circuit Judges.

      Flaum, Circuit Judge. David Beasley, George Coe,
and Jeffrey Thomas pled guilty to wire fraud and
impersonating an Internal Revenue Service agent
in violation of 18 U.S.C. sec.sec. 1343 and 912.
Beasley and Coe also pled guilty to mail fraud in
violation of 18 U.S.C. sec. 1341. All three
defendants contest their sentences. For the
reasons stated herein, we affirm the sentences
imposed by the district court.

I.   BACKGROUND

      On December 21, 1994, defendants Beasley and
Coe began running a mail and wire fraud scheme.
Beginning in May 1995, they were joined by
defendant Thomas, and the three continued the
scheme until June 6, 1996. During these three
years, the defendants contacted over 65 people,
informing them that they had won various prizes
which they could only claim by sending the
defendants money for "taxes" and "fees" that had
to be paid before the prizes could be awarded. As
part of this scheme, Coe and Beasley occasionally
represented themselves as IRS agents to their
intended victims. All of the victims of the
scheme were over the age of 55, and several
victims who sent money were contacted more than
once or by more than one defendant. For example,
one elderly woman sent the defendants $34,480 in
fourteen separate wire transfers. In all, the
defendants obtained a total of $171,139.22 from
this scheme.

      On May 7, 1998, the defendants were indicted
and charged with multiple counts of violating the
mail and wire fraud statutes, 18 U.S.C. sec.sec.
1341, 1343, as well as impersonating an IRS agent
in violation of 18 U.S.C. sec. 912. All of the
defendants pled guilty to one count each of wire
fraud and impersonating an IRS agent. Defendants
Coe and Beasley also pled guilty to one count of
mail fraud. The district court sentenced the
defendants according to the federal Sentencing
Guidelines ("Guidelines") and enhanced Coe’s and
Beasley’s sentences by four levels and Thomas’
sentence by three levels. Thomas received a lower
enhancement because the district court found that
his role in the offense was minor relative to
that of his co-defendants.

      The district court based the upward departures
for all three defendants on its findings that the
defendants used mass marketing to commit their
fraudulent scheme and that the defendants’ fraud
violated the Senior Citizens Against Marketing
Scams ("SCAMS") Act, 18 U.S.C. sec. 2325 et seq.
For each defendant, the district court also
provided an alternate reason for the enhancement.
The district court found that Coe’s sentence
merited an enhancement because, after being put
on notice by federal agents that he was being
investigated for fraud, he continued to
perpetrate that fraud. The district court found
that Beasley’s sentence warranted an enhancement
because he had recently been convicted of state
crimes based on virtually identical fraudulent
conduct. And, the district court found that
Thomas’ sentence merited an upward departure
because his criminal history category did not
adequately reflect the seriousness of his prior
criminal conduct.

      Each defendant received a 36 month sentence for
IRS impersonation. On the other counts, Coe was
sentenced to 78 months and Beasley and Thomas
were sentenced to 87 months. All sentences except
that imposed on Thomas were at the uppermost end
of the Guidelines’ sentencing range. Thomas
received a more lenient sentence because of his
lesser role in the fraud. The defendants now
appeal the district court’s calculation of their
sentences.

II. DISCUSSION
A. Upward Departures

      The defendants argue that the district court
erred in applying upward departures to each of
their sentences. When reviewing a district
court’s decision to depart from the sentence
indicated by a strict application of the
Guidelines, we follow a three step approach.
First, we review de novo whether the district
court’s stated grounds for departure may be
relied on to justify the departure. Second, we
review for clear error whether the facts that
support the grounds for departure actually exist
in the case, and third, we review for abuse of
discretion whether the district court departed by
a reasonable degree. United States v. Willey, 985
F.2d 1342, 1349 (7th Cir. 1993); see also United
States v. Akindele, 84 F.3d 948, 953 (7th Cir.
1996); United States v. Boula, 997 F.2d 263, 266
(7th Cir. 1993). Using this framework, we now
examine each of the grounds relied on by the
district court for the upward departures.

1.   Mass-Marketing

      The district court’s first stated reason for
applying an upward departure to the defendants’
sentences is that the defendants used mass
marketing to perpetrate a fraud. The district
court found that the defendants used the
telephones and mails to induce a large number of
persons to participate in their fraudulent scheme
and that this conduct was particularly harmful in
a manner that was not adequately considered by
the Commission when it promulgated the 1996
Guidelines which were in effect when the
defendants committed these crimes. In concluding
that the 1996 Guidelines did not adequately
account for this factor, the district court
considered a later amendment to U.S.S.G. sec.
2F1.1, which took effect on November 1, 1998,
that called for a two-level increase where mass
marketing was used to effectuate a fraud. See
U.S.S.G. sec. 2F1.1(3). The defendants argue that
the district court’s imposition of an upward
departure on this basis effectively sentenced
them under a later version of the Guidelines than
the one in effect at the time they committed the
crimes at issue here in violation of the Ex Post
Facto Clause.

      It is a violation of the Ex Post Facto Clause
for a court to sentence a defendant under an
amendment to the Guidelines that makes the
punishment for crimes committed before the
effective date of the amendment more severe than
it had been at the time the criminal activity
took place. See United States v. Kopshever, 6
F.3d 1218, 1222-23 (7th Cir. 1993); Willey, 985
F.2d at 1350. Cf. Miller v. Florida, 482 U.S.
423, 435-36 (1987) (holding that the retroactive
application of amendments to Florida’s sentencing
guidelines imposing harsher penalties for certain
crimes than existed at the time the crimes were
committed violated the Ex Post Facto Clause).
However, a sentencing court may consider
subsequent Guideline amendments for two purposes.
A court may interpret the Commission’s later
addition of an aggravating element as a
sentencing factor as evidence that a previous
version of the Guidelines did not adequately
consider that factor in the sentencing scheme.
See United States v. Porter, 145 F.3d 897, 906
(7th Cir. 1998); United States v. Rainone, 32
F.3d 1203, 1208 (7th Cir. 1994). A court may also
consider later amendments as guides for
determining how much of a departure is warranted
for the aggravating conduct in question. See
Akindele, 84 F.3d at 955; Boula, 997 F.2d at 267;
Willey, 985 F.2d at 1348. In fact, since "a
decision to depart must be linked to the
rationale and methodology of the Guidelines,"
reference to subsequent amendments may be one of
the best ways a sentencing court can be assured
that the magnitude of a departure is consistent
with the sentencing scheme envisioned by
Congress. Akindele, 84 F.3d at 954-55.

      We have in the past expressed our concern that
these permissible uses of subsequent amendments
to the Guidelines may "gut" the prohibitions
imposed by the Ex Post Facto Clause in this area
of the law. See Kopshever, 6 F.3d at 1223. For
this reason, we have cautioned sentencing courts
that subsequent amendments are only to be used as
tools in making a well-reasoned, individualized
determination of whether to impose an upward
departure in a particular case or to determine
the degree of departure that is warranted. See
id. In addition, if the Commission considered
aggravating circumstances in an earlier version
of the Guidelines but elected not to include
those circumstances as sentencing factors,
departure on that basis is not warranted, even if
the Commission later changes its mind and amends
the Guidelines to account for the conduct in
question. See Porter, 145 F.3d at 906; Akindele,
84 F.3d at 953; Kopshever, 6 F.3d at 1223. It is
only where a circumstance is "not adequately
taken into consideration by the Sentencing
Commission in formulating the guidelines" that a
departure is warranted. U.S.S.G. sec. 5K2.0.

      In this case, the district court found that the
defendants’ use of mass marketing to conduct
their fraudulent scheme was an aggravating
circumstance that was not adequately taken into
consideration by the Commission in the 1996
Guidelines. The district court explicitly stated
that it considered the Commission’s later
amendment of the Guidelines to include a two-
level enhancement for this conduct solely as
evidence that the Commission had not adequately
considered this factor in earlier versions of the
Guidelines and as a framework for determining the
degree to which a departure based on this conduct
should enhance the defendants’ sentences. As
noted above, the district court was permitted to
use the subsequent guideline amendment in this
fashion, and we conclude that it did not err
imposing an upward departure on this basis. We
further conclude that the district court did not
abuse its discretion in the degree to which it
departed because the departure imposed tracks the
subsequent amendment to the Guidelines and is,
therefore, consistent with the Guidelines’
rationale and methodology./1

      The defendants also argue that there was an
insufficient factual basis to support an upward
departure under the mass marketing rationale. The
district court found that the defendants used the
telephones and mails to contact at least the 65
victims of their fraudulent scheme and that this
number was sufficiently large to constitute a
mass marketing scheme that took this case out of
the heartland of fraud cases contemplated by the
Guidelines. This conclusion is not clearly
erroneous because there is ample evidence in the
record to support it, and, therefore, we conclude
that the district court did not err in finding
that there is a sufficient factual basis to
support an upward departure on this ground.

2.  SCAMS Act
      The district court also departed upward in
sentencing the defendants based on its finding
that their fraudulent conduct fell within the
provisions of the SCAMS Act./2 Relying on the
reasoning of the three circuit courts that have
considered this issue,/3 the district court
found that the Guidelines do not adequately take
into account the unique harm to the elderly
resulting from conduct that violates the SCAMS
Act and that an upward departure on that basis
was warranted in this case.

     The defendants argue that an upward departure
based on the SCAMS Act is impermissible because
the harm targeted by that Act was considered by
the Commission and is already adequately
accounted for in the Guidelines. The defendants
note that when the SCAMS Act was passed in 1994,
Congress instructed the Commission to develop
sentencing guidelines to implement the provisions
of that Act. See Pub. L. 103-322 sec. 250003. The
Commission responded with a report in 1995
stating that it would review the SCAMS Act, make
any changes to the Guidelines that it considered
necessary, and submit those changes to Congress
by May 1, 1995. See Report to the Congress:
Adequacy of Penalties for Fraud Offenses
Involving Elderly Victims (March 1995). Since
that time, although the Guidelines have been
amended several times, the Commission has not
made any amendments that reference the SCAMS Act.
While the Commission has recently increased
penalties for the use of mass marketing in the
perpetration of a fraud, the Commission did not
alter the penalties for targeting vulnerable
victims such as the elderly. See U.S.S.G. sec.
2F1.1(3), as amended effective November 1, 1998;
U.S.S.G. sec. 3A1.1(b) and cmt. n. 2. The
defendants argue that this lack of action by the
Commission, after specifically informing Congress
that it would review the SCAMS Act and amend the
Guidelines as necessary, indicates that the
Commission considered the circumstances outlined
in the SCAMS Act and determined that the
penalties provided in the Guidelines were
sufficient to implement that Act. The defendants
contend that because the circumstances that would
constitute a violation of the SCAMS Act were
considered by the Commission and determined to be
adequately provided for in the existing
Guidelines, an upward departure on this basis is
not permitted under U.S.S.G. sec. 5K2.0, which
allows for departures only where factors were
"not adequately taken into consideration by the
Sentencing Commission in formulating the
guidelines." See also 18 U.S.C. sec. 3553(b);
Akindele, 84 F.3d at 953 ("If the Commission has
considered a factor, a departure is not
justified.").

      In Smith, the Tenth Circuit considered this
argument and rejected it, finding that the
Commission’s mere lack of action was
"insufficient evidence to conclude the Commission
fully considered the existing guidelines and
affirmatively determined their adequacy." 133
F.3d at 748. Likewise, we are unconvinced that
the Commission’s mere lack of action is adequate
proof that the circumstances outlined in the
SCAMS Act were considered by the Commission and
that it determined that the existing Guidelines
adequately implemented that Act. We are
disinclined to draw the inference suggested by
the defendants because the existing Guidelines,
even including the 1998 amendment adding a two-
level increase for use of mass marketing, do not
provide for the sharply increased penalties
called for by Congress in the SCAMS Act./4 We
agree with our sister circuits that Congress
determined that the conduct prohibited by the
SCAMS Act merited more severe punishment than the
Guidelines provide and that the Commission has
yet to adequately consider the increased
punishments recommended by Congress in that Act
and incorporate them into the Guidelines. See
Scrivener, 189 F.3d at 952-53; Brown, 147 F.3d at
487; Smith, 133 F.3d at 748-49. Therefore, under
U.S.S.G. sec. 5K2.0 and 19 U.S.C. sec. 3553(b),
the district court did not err when it used the
defendants’ violation of the provisions of the
SCAMS Act as a basis for adding an upward
departure to their sentences.

      The defendants also argue that the district
court engaged in impermissible double counting
when it imposed both an upward departure based on
the SCAMS Act and enhanced their sentences under
sec. 3A1.1(b)(1) by two-levels for targeting
vulnerable victims. The district court imposed
the departure under the SCAMS Act because it
found that the defendants 1) targeted the
elderly, 2) used telemarketing to perpetrate
their scam, and 3) victimized ten or more persons
over the age of 55. The district court imposed
the sec. 3A1.1 enhancement because it found that
the defendants used "lead lists" to target
persons they believed were especially vulnerable
because they had given money in response to
solicitation efforts in the past and because the
defendants themselves re-contacted several of the
elderly persons who responded favorably to their
fraudulent solicitations. See United States v.
Jackson, 95 F.3d 500, 508 (7th Cir. 1996)
(holding that the use of this "reloading"
technique is sufficient to sustain an enhancement
under sec. 3A1.1(b)). It is clear from the
district court’s thorough and well-reasoned
discussion that it imposed the upward departure
and the sec. 3A1.1 enhancement based on two
different features of the defendants’ conduct. We
conclude that the district court did not punish
the defendants twice for the same conduct but
rather imposed an enhancement and a departure
based on distinct circumstances that
independently supported separate increases in the
defendants’ sentences.

3.   Individual Defendants

      In addition to providing the two grounds for
departure discussed above, the district court
also concluded that there were alternate grounds
unique to each defendant for imposing upward
departures to their individual sentences. The
court determined that defendant Coe merited a
departure based on his continuing criminal
conduct after he had been contacted by law
enforcement officials regarding a criminal
investigation of that conduct, defendant Beasley
merited a departure based on his previous state
conviction for virtually identical criminal
conduct, and defendant Thomas merited a departure
due to his extensive criminal history that was
not adequately captured by the criminal history
category he was assigned. Because we have
concluded that the upward departures were
justified by the district court’s primary reasons
for imposing them, we need not address the
validity of its alternate reasoning. However, we
appreciate the extensive amount of consideration
that the district court devoted to its
determination of the appropriate sentences
warranted by the defendants’ conduct and commend
the court for its clear explanation of the
reasoning behind its decisions. We note that the
alternate reasons provided by the district court
for imposing upward departures in this case are
sound and that the district court would not have
erred had it imposed the departures solely on
those bases. See, e.g., United States v. Ewing,
129 F.3d 430, 437 (7th Cir. 1997) (finding that
previous convictions for similar conduct justify
an upward departure); United States v. Anderson,
72 F.3d 563, 566 (7th Cir. 1995) (same); U.S.S.G.
sec. 4A1.3 (authorizing an upward departure "[i]f
reliable information indicates that the criminal
history category does not adequately reflect the
seriousness of the defendant’s past criminal
conduct.").

B.   Impersonation of an IRS Agent

      The district court sentenced each defendant to
36 months in prison for impersonation of an IRS
agent in violation of 18 U.S.C. sec. 912 to be
served concurrently with the longer sentences
imposed for mail and wire fraud. Defendant Thomas
contests his receiving a sentence for this
offense that is equal in length to that imposed
on his co-defendants. Thomas argues that he did
not personally impersonate an IRS agent but pled
guilty to this charge solely on the basis of his
accountability for the actions of his co-
defendants. Thomas contends that because he is
guilty only by association he should receive a
lesser sentence than his co-defendants who
actually engaged in the criminal activity.

     Our jurisdiction to review a district court’s
imposition of a sentence under the Guidelines is
strictly limited by 18 U.S.C. sec. 3742(a). Under
that section, we may review a guidelines sentence
only to determine if it 1) was imposed in
violation of law; 2) was imposed as a result of
an incorrect application of the sentencing
guidelines; 3) is greater than the maximum
sentence specified in the applicable guidelines
range; or 4) was imposed for an offense for which
there is no applicable guideline and is plainly
unreasonable. See United States v. Nelson, 143
F.3d 373, 374 (7th Cir. 1998). Here, defendant
Thomas makes no argument that the district
court’s imposition of a sentence within the
applicable guidelines range for the offense to
which he pled guilty was either in violation of
law or was an incorrect application of the
Guidelines. He merely argues that the district
court should have been more lenient. We have
repeatedly held that sec. 3742 does not confer
appellate jurisdiction to review a defendant’s
claim that he was sentenced differently from his
co-defendants for the same criminal conduct. See
United States v. Hall, Nos. 98-2649, 99-1933,
2000 WL 626721, at *2 (7th Cir. May 16, 2000);
United States v. Edwards, 945 F.2d 1387, 1397-98
(7th Cir.1991); United States v. Smith, 897 F.2d
909, 911 (7th Cir.1990). Similarly, we do not
have jurisdiction to review a claim that the
defendant was not treated differently than his
co-defendants when he argues that he should have
been. See United States v. Guerrero, 894 F.2d
261, 267-68 (7th Cir. 1990) (holding that we lack
jurisdiction to review reasonable sentences
imposed lawfully within the applicable
guidelines’ range based solely on the argument
that the sentence was too lenient or too
draconian); see also United States v. Cea, 914
F.2d 881, 889 (7th Cir. 1990). We, therefore,
lack jurisdiction to consider defendant Thomas’
claim.

C.   U.S.S.G. sec. 3A1.1(b)

      Defendants Beasley and Thomas challenge the
district court’s enhancement of their sentences
pursuant to U.S.S.G. sec. 3A1.1(b). As noted
above, the district court imposed this
enhancement based upon its finding that the
defendants "reloaded" their victims by targeting
individuals whom they knew had responded to
solicitations in the past and even re-contacting
several individuals who had previously sent money
in response to the defendants’ scam. The
defendants argue that the district court erred in
concluding that the facts in the record support
an enhancement of their sentences under sec.
3A1.1(b). We review the district court’s factual
findings in support of sentencing determinations
for clear error and that court’s application of
the Guidelines to those facts for abuse of
discretion. 18 U.S.C. sec.3742(e); see Guerrero,
894 F.2d at 267-68.

      There is ample support in the record that all
three of the defendants targeted victims they
knew were particularly susceptible to their fraud
because they had given money in response to this
particular solicitation or similar solicitations
in the past. The defendants have presented no
evidence that these factual findings were clearly
erroneous. In addition, we have previously held
that "reloading" victims in a telemarketing fraud
scheme is conduct that merits an enhancement
under sec. 3A1.1. See Jackson, 95 F.3d at 508.
The defendants have pointed to nothing that
distinguishes their conduct from that of the
defendants in Jackson, and we conclude that the
district court did not abuse its discretion by
enhancing their sentences under sec. 3A1.1 of the
Guidelines.
D.   Discovery Violation

      Prior to sentencing, defendant Coe made a
discovery request pursuant to Federal Rule of
Criminal Procedure 16 in response to which the
Government provided typewritten reports
summarizing conversations between defendant Coe
and the federal agents who were investigating his
fraudulent activities. At the sentencing hearing
the government moved to admit into evidence the
agents’ handwritten notes of those same
conversations. Coe argues that the district court
erred in admitting these notes into evidence
because they were not turned over in response to
Coe’s discovery request.

      In United States v. Muhammed, 120 F.3d 688, 699
(7th Cir. 1997), we held that the government
satisfies the requirements of Rule 16 if it turns
over a written report that contains all of the
information found in an agent’s original notes
but does not deliver the notes themselves to the
defendant. In this case, the district court found
that the reports given to the defendants in
response to their Rule 16 request accurately
reflect all of the information provided in the
handwritten notes that were later entered into
evidence by the district court. While the
defendant points to certain minor discrepancies
between the notes and the report, we cannot
conclude that the district court abused its
discretion in determining that the report was an
adequate summation of the notes for Rule 16
purposes. Therefore, we conclude that the
district court did not err in admitting the
agents’ notes.

III.   CONCLUSION

      For the foregoing reasons, the sentences imposed
by the district court are Affirmed.

/1 The district court stated that it based its
imposition of sentencing departures on both the
use of mass marketing and the SCAMS Act. Although
the district court did not explicitly state the
number of levels it was departing for each
separate rationale, we presume from the court’s
discussion that it enhanced the defendants’
sentences by two levels for each rationale as
requested by the government, resulting in a total
upward departure of four levels for defendants
Coe and Beasley. As defendant Thomas received
only a three-level departure, we presume that the
district court opted to depart upward by only one
level for either the use mass marketing or the
violation of the SCAMS Act. Either a one- or two-
level departure is appropriate for each rationale
employed by the district court.
/2 The SCAMS Act, 18 U.S.C. sec. 2326, provides in
relevant part:

A person who is convicted of an offense under
section . . . 1341, . . . 1343. . . in connection
with the conduct of telemarketing--

(1) shall be imprisoned for a term of up to 5
years in addition to any term of imprisonment
imposed under any of those sections,
respectively; and

(2) in the case of an offense under any of those
sections that--

(A)   victimized ten or more persons over the age
of 55; or

(B)   targeted persons over the age of 55,

shall be imprisoned for a term of up to 10 years
in addition to any term of imprisonment imposed
under any of those sections, respectively.

/3 See United States v. Scrivener, 189 F.3d 944 (9th
Cir. 1999); United States v. Brown, 147 F.3d 477
(6th Cir. 1998); United States v. Smith, 133 F.3d
737 (10th Cir. 1997).

/4 For example, H.R. Rep. 105-158 sec. 3 recommended
a four-level increase for violations of sec.
2326(1) and an eight-level increase for
violations of sec. 2326(2). The current
Guidelines provide only a two-level increase for
conduct that violates sec. 1341 using a mass
marketing scheme. See U.S.S.G. sec. 2F1.1(3).
Conduct that violates sec. 1341 by using mass
marketing in addition to either specifically
targeting elderly victims or defrauding multiple
elderly victims receives only a four-level
enhancement. See U.S.S.G. sec.sec. 2F1.1(3),
3A1.1(b).