Court Opinion

ID: 817103
Source: CourtListenerOpinion
Date Created: 2013-02-01 01:48:02.557667+00
Date Added: 2024-06-11T15:33:19.780373
License: Public Domain

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
                           File Name: 13a0114n.06

                                            No. 11-3822

                           UNITED STATES COURT OF APPEALS
                                                                                         FILED
                                                                                      Jan 31, 2013
                                FOR THE SIXTH CIRCUIT
                                                                               DEBORAH S. HUNT, Clerk

UNITED STATES OF AMERICA,                         )
                                                  )
       Plaintiff-Appellee,                        )
                                                  )    ON APPEAL FROM THE UNITED
v.                                                )    STATES DISTRICT COURT FOR THE
                                                  )    NORTHERN DISTRICT OF OHIO
CHRISTOPHER D. KRAUSE,                            )
                                                  )
       Defendant-Appellant.                       )

       Before: MOORE and COOK, Circuit Judges; BERTELSMAN, District Judge.*

       COOK, Circuit Judge. Defendant-Appellant Christopher Krause, who pled guilty to

conspiracy to commit bribery, mail fraud, theft, and to the destruction of records, appeals the

substantive reasonableness of his 87-month sentence. He argues that in varying upward from a

Guidelines range of 51 to 63 months, the district court relied upon unproven facts, failed to consider

certain 18 U.S.C. § 3553(a) factors, and gave unreasonable weight to other factors. We AFFIRM.

                                                  I.

       Krause served as the treasurer of the Maple Heights City Schools (“MHCS”) from 1997 to

September 2009. From 2001 to 2008, Krause accepted numerous bribes in exchange for influencing

       *
        The Honorable William O. Bertelsman, United States District Judge for the Eastern District
of Kentucky, sitting by designation.
No. 11-3822
United States v. Krause

MHCS’s business contract decisions. He also used MHCS funds for personal use. In July 2008,

Krause and other participants in the bribes learned of a federal investigation into public corruption

in Cuyahoga County. After news of the investigation became public in August 2008, Krause hid a

$1,450-value television he previously received as a bribe. One year later, federal investigators

approached Krause, who then admitted to his involvement in various bribery and embezzlement

schemes at MHCS. Krause’s first interview with investigators was not proffer-protected because

he declined to seek defense counsel. Thereafter, Krause (with counsel) submitted to nine proffers.

       Krause pled guilty to (1) one count of conspiracy to commit theft concerning programs

receiving federal funds; (2) one count of conspiracy to commit mail fraud; (3) fifteen counts of

conspiracy to commit bribery concerning programs receiving federal funds; and (4) one count of

destruction of records in a federal investigation. His plea agreement identifies the relevant time

period as “in or about 2001 through on or about July 28, 2008.” The agreement also contemplates

a maximum 4-level downward departure for substantial assistance under U.S.S.G. § 5K1.1, permits

Krause to request a 4-level variance for non-proffer-protected cooperation with the government, and

reserves the government’s right to challenge such a variance. The Probation Office prepared a

Presentence Report (“PSR”) noting these agreements.

       At sentencing, the district court determined a total offense level of 24 after applying (1) a 2-

level enhancement for multiple bribes; (2) a 10-level enhancement for bribes totaling more than

$120,000 and less than $200,000; (3) a 4-level enhancement for a public official in a high-level

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No. 11-3822
United States v. Krause

decision-making position; (4) a 1-level adjustment for multiple counts; (5) a 3-level reduction for

acceptance of responsibility; and (6) a 4-level reduction for substantial assistance. Krause’s criminal

category I yielded a Guidelines range of 51 to 63 months. The government requested a within-

Guidelines sentence, and Krause sought a 4-level downward cooperation variance because he gave

“full[]” and “immediate[]” assistance—i.e., submitting to a first interview without counsel. An

attorney and representative for MHCS, Julie Gran, also gave a victim impact statement contending

that Krause “breached the trust that existed between community members and the district[,]” as

evidenced when the community voted down an MHCS tax levy for the first time in eight years. The

district court then sentenced Krause to incarceration for an aggregate term of 87 months, followed

by three years of supervised release. It also ordered a special assessment of $1,800, as well as

restitution totaling $209,952.50, of which Krause’s pro rata share is $73,691. A month after the

hearing, the court supplemented its sentencing rationale with a memorandum opinion. Krause timely

appealed the 24-month upward variance.

                                                  II.

       This court applies a deferential abuse-of-discretion standard when reviewing the substantive

reasonableness of a criminal sentence, “tak[ing] into account the totality of the circumstances,

including the extent of any variance from the Guidelines range.” Gall v. United States, 552 U.S. 38,

51 (2007); see also United States v. Polihonki, 543 F.3d 318, 322 (6th Cir. 2008). A sentence may

be substantively unreasonable when, for example, the court “selects a sentence arbitrarily, bases the

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No. 11-3822
United States v. Krause

sentence on impermissible factors, fails to consider relevant sentencing factors, or gives an

unreasonable amount of weight to any pertinent factor.” United States v. Conatser, 514 F.3d 508,

520 (6th Cir. 2008) (citing United States v. Webb, 403 F.3d 373, 385 (6th Cir. 2005)). “The essence

of a substantive-reasonableness claim is whether the length of the sentence is ‘greater than necessary’

to achieve the sentencing goals set forth in 18 U.S.C. § 3553(a).” United States v. Tristan-Madrigal,

601 F.3d 629, 632–33 (6th Cir. 2010).

A. Pre-2001 Conduct and Failed School Levy

       Krause argues that the district court abused its discretion in considering, without finding by

a preponderance of the evidence, that Krause engaged in pre-2001 criminal conduct and caused an

MHCS levy to fail. We disagree.

       After United States v. Booker, 543 U.S. 220 (2005), this court “reaffirmed the doctrine that

district judges in determining defendants’ sentences may consider facts that they find under a

preponderance-of-the-evidence standard.” United States v. Klups, 514 F.3d 532, 537–38 (6th Cir.

2008) (quoting United States v. Mendez, 498 F.3d 423, 426–27 (6th Cir. 2007) (per curiam)). “Any

information may be considered, so long as it has sufficient indicia of reliability to support its

probable accuracy.” U.S.S.G. § 6A1.3 cmt. (2010) (citations omitted). Even uncharged conduct may

be considered if the district court makes findings based upon a preponderance of the evidence, does

not rely upon judge-found facts to impose a sentence above the statutory maximum, and understands

that the Guidelines are advisory. See United States v. Sexton, 512 F.3d 326, 330 (6th Cir. 2008).

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No. 11-3822
United States v. Krause

A district court’s factual finding in sentencing will not be set aside unless the finding is clearly

erroneous, which requires that a reviewing court be “left with the definite and firm conviction that

a mistake has been made.” United States v. Jeross, 521 F.3d 562, 569 (6th Cir. 2008) (citing United

States v. Worley, 193 F.3d 380, 384 (6th Cir. 1999)).

        At the sentencing hearing, the district court asked defense counsel how Krause, with a

bachelor’s degree in political science, obtained high-level financial positions with the Ohio

Department of Agriculture, Ohio Supreme Court, and Cuyahoga County Treasurer’s Office at

various times from 1983 to 1996. Counsel explained that Krause did “a good job” in his positions

and had a mentor who told Krause about opportunities such as the MHCS treasurer position. The

district court also read aloud Krause’s statement in the PSR that “[s]oon after” starting as the MHCS

treasurer, “it became apparent to me that if I wanted to retain my position, I would have to participate

in the illegal activities for which I pled guilty.” R. 170, Tr. at 35, ID 916.

        A fair review of the sentencing transcript suggests that the district court suspected Krause

of engaging in criminal conduct before 2001. See R. 170, Tr. at 35–36, ID 916–17 (“[T]he

defendant’s own admission would indicate that perhaps this activity began even earlier than that

referenced in the indictment.”); id. at 37, ID 918 (“I have a suspicion it may have started far sooner

than you’re acknowledging or anyone is willing to acknowledge here.”). Despite voicing this

suspicion, however, the district court expressly refrained from relying on it. See id. at 35, ID 916

(“Now, obviously, the court can’t consider or speculate whether the defendant’s criminal activity

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No. 11-3822
United States v. Krause

began earlier than 2001.”); id. at 36, ID 917 (“And I asked specific questions about the defendant’s

mentor and how it is that he came to these various positions . . . . And, again, I want to be a bit

cautious and I don’t want to speculate.”) As support, Krause relies on United States v. Worex, where

this court found abuse of discretion in a district court’s determination that potential involvement in

uncharged shootings rendered a defendant’s weapons-possession crime more dangerous. 420 F.

App’x 546, 551 (6th Cir. 2011). The district court here, in contrast, disavowed using speculation

in arriving at its sentencing decision. Cf. United States v. Watkins, 691 F.3d 841, 853 (6th Cir. 2012)

(“[T]he sentencing memorandum opinion expressly refrains from finding that [defendant] engaged

in similar bribery in 2003. Instead, it infers [defendant’s] willingness to continue breaking the law

from the behavior underlying the conviction itself . . . .”). The instant record leaves us unconvinced

that the district court abused its discretion.

        So too with the court’s consideration of the failed levy. When delivering MHCS’s victim

impact statement, Julie Gran explained how Krause’s crimes breached community trust in the school

district:

        [W]hen the treasurer of a school district, a person who has ultimate control over
        public funds and the flow of money and the financial information . . . ask[s]
        contractors for bribes or [takes] money for himself, . . . it absolutely violates the trust
        that each member of the community has put in the people who serve their children.

R. 170, Tr. at 27, ID 908. She also explained how Krause’s conduct hurt MHCS’s public reputation,

citing as evidence the failed levy:

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No. 11-3822
United States v. Krause

        Krause’s actions don’t reflect the dedication and the quality of employees who work
        in the district, but it will continue to affect them in the future . . . .
                What he did causes taxpayers to question whether the district is spending their
        money fairly and wisely when a tax levy is put on the ballot. And this was
        unfortunately demonstrated most recently on May 3 when, for the first time in eight
        years, the taxpayers of the district voted down a levy issue and did not support the
        levy issue or a bond issue that was on the ballot.

Id. The PSR similarly noted reputational damage to MHCS as a result of Krause’s conduct,

identifying $300,000 as the “[p]rospective cost of public relations services to repair damage from

criminal acts of defendants.”1 PSR ¶¶ 55, 56. Krause too recognized that his crimes generated

negative publicity. See Appellant Br. at 29 (“It is true that Mr. Krause violated the public trust . . . .

[T]he members of the Maple Heights community have every right to be upset for his behaviors.”);

R. 157, Def. Sentencing Br. at 6, ID 844 (“[Krause] . . . has suffered public disgrace in both the

media and in his community”). Moreover, this district court knew about abundant publicity

surrounding the Cuyahoga County corruption scandals. Relying on this record, the district court

inferred that Krause’s crimes hurt MHCS’s public image. See R. 161, Sent’g Mem. at 6, ID 865

(“[T]he school’s public reputation is vital to gaining public support for any operating levy.

Following the scandal involving Krause and his co-defendants, the citizens of Maple Heights were

unwilling to pass a levy, demonstrating the public’s lost trust in the district.”). On review, we cannot

say that this record leaves a “definite and firm conviction that a mistake has been made.” See Jeross,

521 F.3d at 569 (citation omitted); cf. United States v. Korson, 243 F. App’x 141, 148 (6th Cir.

        1
            This cost was ultimately withdrawn from the claimed restitution.

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No. 11-3822
United States v. Krause

2007) (per curiam) (affirming upward departure under U.S.S.G. § 2B1.1 in part because victim

impact letters supported finding that schools suffered negative community relations as a result of

defendant’s embezzlement). Accordingly, the district court’s inference cannot be assessed as clearly

erroneous.

B. Section 3553(a) Factors

        Krause next argues that the district court imposed a greater-than-necessary sentence because

it failed to consider certain 18 U.S.C. § 3553(a) factors (the need for rehabilitation, lack of criminal

history, and cooperation with the government) and accorded too much weight to other factors (the

severity of offense, need for punishment, and need for deterrence). We reject these arguments.

        Section 3553(a) directs district courts to impose “a sentence sufficient, but not greater than

necessary” (1) “to reflect the seriousness of the offense, to promote respect for the law, and to

provide just punishment for the offense”; (2) “to afford adequate deterrence to criminal conduct”;

(3) “to protect the public from further crimes of the defendant”; and (4) “to provide the defendant

with needed educational or vocational training, medical care, or other correctional treatment in the

most effective manner.” 18 U.S.C. § 3553(a). “Not all are important in every sentencing; often one

or two prevail, while others pale.” United States v. Bridgewater, 479 F.3d 439, 442 (6th Cir. 2007).

        First, Krause waived any rehabilitation-based argument in his sentencing brief to the district

court. See R. 157, Def. Sentencing Br. at 7, ID 845 (“Concerning § 3553(a)(2)(D)[,] . . . Defendant

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No. 11-3822
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submits that, given his age and circumstances, other than medical care for his minor conditions for

which he is currently taking medication, none of these factors are materially present.”).

       The record further shows that the district court reasonably weighed the other 3553(a) factors.

It justifiably rejected Krause’s request for a 4-level downward cooperation variance, citing Krause’s

obstructive conduct in hiding a television upon learning of a federal investigation in August 2008

and his year-long delay in coming forward until the FBI approached him in August 2009. It likewise

considered Krause’s lack of criminal convictions, but decided that his lack of genuine remorse and

“upper echelon” participation in “wide ranging” public corruption weighed in favor of an above-

Guidelines sentence. The court also found the statutory maximum sentences instructive, given that

Krause was not a “victim of circumstance,” but “an individual motivated by greed” who “formulated

bribery scheme after bribery scheme . . . to increase his own personal wealth.” As the court

observed, its 87-month sentence was “below half the halfway point” of the 20-year statutory

maximum on two counts. It thus reasonably concluded that an upward variance was necessary to

protect the public, deter Krause, and deter others from committing similar crimes.

       Finally, Krause argues that his sixteen-level Guidelines enhancement sufficiently captures

the severity of his crime. This court, however, “ha[s] rejected the argument that a sentence is

substantively unreasonable because the § 3553(a) factors on which the district court relied to

sentence the defendant outside the advisory Guidelines range were already reflected in the Guidelines

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No. 11-3822
United States v. Krause

calculation.”   See United States v. Rossi, 422 F. App’x 425, 436 (6th Cir. 2011) (citing

Tristan-Madrigal, 601 F.3d at 636 n.1 (6th Cir. 2010)).

                                               III.

       We AFFIRM.

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