Court Opinion

ID: 171712
Source: CourtListenerOpinion
Date Created: 2010-08-14 18:38:42+00
Date Added: 2024-06-11T17:25:15.258556
License: Public Domain

FILED
                                                              United States Court of Appeals
                                                                      Tenth Circuit

                                                                    February 4, 2009
                   UNITED STATES COURT OF APPEALS Elisabeth A. Shumaker
                                                                       Clerk of Court
                                TENTH CIRCUIT

 UNITED STATES OF AMERICA,

              Plaintiff - Appellee,                      No. 07-4256
 v.                                                        (D. Utah)
 ANGELO M. DEGENHARDT,                        (D.C. No. 2:03-CR-00297-PGC-1)

              Defendant - Appellant.

                           ORDER AND JUDGMENT *

Before MURPHY, McKAY, and GORSUCH, Circuit Judges.

                               I. INTRODUCTION

      In 2005, Angelo Degenhardt pleaded guilty to one count of securities fraud.

The district court sentenced him to sixty months’ probation. In 2007, the district

court issued a summons based on a petition by the United States Probation Office

(“USPO”) alleging Degenhardt violated the terms of his probation by traveling

without permission and failing to notify the USPO he was employed. After

Degenhardt admitted both violations, the district court revoked his probation and

      *
        This order and judgment is not binding precedent except under the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.
sentenced him to forty-one months’ imprisonment. Degenhardt appeals, asserting

the district court erred when it (1) refused to continue the hearing on the

revocation of probation; and (2) imposed sentence in reliance on evidence not

available to the defense. Exercising jurisdiction pursuant to 28 U.S.C. § 1291,

this court affirms.

                                II. BACKGROUND

      In 2003, Degenhardt was indicted on multiple counts of, inter alia, mail

and securities fraud. He pleaded guilty to a single count of securities fraud, in

violation of 15 U.S.C. §§ 77q(a), 77x. Degenhardt’s advisory sentencing range,

as set out in the United States Sentencing Guidelines, was forty-one to fifty-one

months’ imprisonment. Nevertheless, the parties entered into plea negotiations

and agreed, pursuant to Fed. R. Crim. P. 11(c)(1)(C), that Degenhardt would serve

a sentence of sixty months’ probation and pay full restitution.

      At the change of plea hearing, the district court began by noting the lenient

nature of the sentence set out in the plea agreement. In response, the government

identified three justifications for the lenient sentence: (1) delays in bringing the

case, along with evidentiary problems, made obtaining convictions less than

certain; (2) Degenhardt’s health issues could impose serious medical costs on the

government should he be imprisoned; and, most importantly, (3) the plea

agreement called for full restitution for all victims, something that could best be

                                          -2-
achieved if Degenhardt was not imprisoned. Based upon these considerations, the

district court accepted the plea, and was thus bound to impose a sentence

consistent with the plea agreement. Fed. R. Crim. P. 11(c)(1)(C), (c)(4).

      At the sentencing hearing, the district court began by stating the plea

agreement “does seem like it’s a deal for [Degenhardt]. If I were sentencing in

this matter, the sentence I would impose would be around [forty-six] months in

prison . . . .” It nevertheless accepted “the proposed arrangement for one reason,

which is a full restitution order will be in place.” The district court closed by

advising Degenhardt as follows: “I should advise Mr. Degenhardt that if I find

that he’s hiding so much as a dollar from any of the victims in this case that I

would have the opportunity and would be inclined to revoke the probation [and]

impose a prison sentence . . . .” The district court then imposed a sentence of

sixty months’ probation, consistent with the parties’ plea agreement.

      On October 1, 2007, the district court ordered the issuance of a summons

based on a petition alleging Degenhardt had violated the terms of his probation by

traveling out of state without permission and by being employed at Your Travel

Biz Travel Network (“YTB”) without informing his probation officer. On

October 18 and 19, 2007, the government provided a total of 292 pages of

discovery to Degenhardt. On October 23, 2007, Degenhardt moved to continue

the October 31, 2007, revocation hearing. He asserted generally that he did not

have possession of critical discovery materials and that the government would not

                                          -3-
be able to provide the necessary materials until October 24, 2007. Accordingly,

he requested a one-month continuance to allow “time to adequately review the

evidence presented by the government, to seek and issue subpoenas, and interview

numerous witnesses.” Although the government did not oppose the request, it

noted the grant of a continuance would necessitate the expenditure of additional

judicial resources as the judge assigned to the case, the Honorable Paul Cassell,

was stepping down from the bench effective November 1, 2007, and a new judge

would have to be assigned.

      The district court denied the motion to continue, indicating it did not

believe there was outstanding discovery critical to the question of whether

Degenhardt violated the conditions of his probation. 1 The district court noted

“significant discovery has already been provided to the defense regarding these

allegations,” including Degenhardt’s bank account information, the Judgment and

Commitment Order signed by Degenhardt, employment documents, and restitution

account information. With respect to Degenhardt’s assertion about the need for

      1
          In this regard, the district court noted as follows:

      Degenhardt contends, somewhat vaguely, that “critical discovery” is
      not yet available and therefore this matter must be continued. Yet
      his motion fails to explain with any precision what that discovery
      is. . . . The court is unconvinced [] a continuance is necessary . . . .
      The facts surrounding these allegations [of probation violations] can
      be quickly established—to wit, either the defendant left the Northern
      District of California or he did not, and either the defendant worked
      for [YTB] or he did not.

                                            -4-
interviews and additional records, the district court indicated the allegations in

the petition were not remotely complex and related to information uniquely within

Degenhardt’s control. 2 Accordingly, the district court denied Degenhardt’s

motion to continue and advised the parties to be prepared to fully present their

cases, including the question of what should happen should the court find a

violation of supervised release at the October 31 hearing.

      Although it denied Degenhardt’s motion to continue, the district court took

an important step to ameliorate any potential prejudice to Degenhardt. First, the

district court established a deadline for materials it would consider at the

revocation hearing:

      [O]ut of an abundance of caution and to be completely fair to the
      defendant, the court will direct that the evidence that the government

      2
          According to the district court:

      [T]he defendant alleges that “numerous individuals will have to be
      interviewed, either telephonically or in person and various records
      will either have to be retrieved or subpoenaed.” The court has just
      one question about this assertion: Why? Did the defendant travel
      outside of California without permission and admit that fact? If so,
      that allegation can be quickly resolved next week. Similarly, did the
      defendant work for YTB and admit that fact? Again, this is a narrow
      issue that can be quickly determined. Moreover, nothing in the
      defense motion for a continuance even asserts that the defendant will
      deny either of these two allegations. Of course, if the defendant is
      going to admit these allegations, then there is absolutely no need for
      a continuance. Moreover, the information seems to be uniquely
      within [] Degenhardt’s control. He would know, for example,
      whether he went to St. Louis or not and whether he was paid to do
      that or not. This is not a situation where the government has unique
      control over information that must be disclosed to the defense.

                                             -5-
      will present at next week’s hearing will be limited to that which is
      provided to the defense by close of business on October 25, 2007. [3]
      That will give the defendant nearly a week to prepare for the hearing.
      The court also directs the [USPO] to promptly provide to defense
      counsel a violation report containing any information that the court
      will consider in the event that the defendant is determined to have
      violated his conditions of supervision.

The district court further indicated that if it should become apparent at the

hearing that additional evidence was necessary, it would revisit the question of a

continuance. 4

      The revocation hearing was held, as scheduled, on October 31, 2007. The

district court began by announcing it was delaying the hearing to let defense

counsel meet with a representative of YTB. When the hearing resumed, the

district court asked if defense counsel had a “plan of attack.” In response,

defense counsel stated “Yes, Your Honor. The defendant, at this time, will admit

to the two allegations. . . . And then certainly we would like to address

sentencing.” As to the question of the appropriate sentence, the parties’

arguments focused almost exclusively on the allegation that Degenhardt had

failed to report his employment at YTB to the USPO. In particular, the parties

      3
       Consistent with the district court’s order, the government provided a final
packet of discovery materials, consisting of 124 pages of written materials, on
October 25th.
      4
        The district court stated as follows: “At the conclusion of [the revocation
hearing], should the defense continue to believe that important information has
not been located despite due diligence on the part of the defense that would be
material to the defendant’s defense, the court will certainly be willing to review
that issue at that time.”

                                         -6-
focused on the question whether Degenhardt’s failure to report his activities at

YTB was an honest mistake (as Degenhardt contended) or an effort to avoid

paying restitution to the victims of his financial crimes (as the government

contended). At the conclusion of the parties’ arguments, the district court

imposed a sentence of forty-one months’ imprisonment. In so doing, the district

court noted the following: (1) it considered the § 3553(a) factors as well as

Chapter 7 of the United States Sentencing Guidelines relating to revocation of

probation; (2) an upward variance from the Chapter 7 guidelines was appropriate

because Degenhardt attempted to hide his income in an effort to avoid paying

restitution; (3) the intent to hide money, not the money amount, was the critical

matter; and (4) Degenhardt had previously been given a lenient sentence and told

that he would face serious consequences if he violated the terms of his probation.

      Following the imposition of sentence, the court asked Degenhardt’s counsel

if it should “be making any recommendations to the Bureau of Prisons.” Defense

counsel asked that Degenhardt be permitted to self-report to a facility in

California. The district court denied that request and ordered that Degenhardt be

taken into custody immediately. In so ordering, the district court stated as

follows:

             All right. I am going to direct that the defendant be taken into
      custody forthwith. I think I may be doing him a favor. I know that
      from some of the submissions that have been coming back and forth
      there are health problems and so forth that made it difficult for him
      to travel back and forth and I think as soon as we can get him into

                                         -7-
      custody then at that point the Bureau of Prisons and the U.S.
      Marshals can attend to his health issues and make sure that those are
      . . . properly addressed.

             The defendant also works for a travel agency and he has family
      in Germany. But the main thing here is just to make sure that he gets
      into custody quickly so the health issues can be attended to. There is
      also going to be an additional basis for my ruling which I’m going to
      put into the record in chambers with my court reporter after the
      hearing. So for all those reasons, the defendant is to [be] taken into
      custody.

Defense counsel asked to be present when the court put on the record the

“additional basis” for its ruling. Defense counsel noted, “I don’t know what

you’re talking about.” The district court denied that request, stating “I want to do

that ex parte en camera.”

                                III. DISCUSSION

A. Continuance

      The denial of a motion to continue is reviewed for abuse of discretion.

Phillips v. Ferguson, 182 F.3d 769, 775 (10th Cir. 1999). “A trial judge’s

decision to deny a motion for a continuance constitutes an abuse of discretion

only if the denial was arbitrary or unreasonable and materially prejudiced the

[defendant].” United States v. Rivera, 900 F.2d 1462, 1475 (10th Cir. 1990)

(quotation omitted). A review of the record in this case reveals the district

court’s decision was not unreasonable and, furthermore, did not materially

prejudice Degenhardt.

                                         -8-
      As noted by the district court, the primary question to be addressed at the

revocation hearing—whether Degenhardt violated his terms of supervised

release—was not complicated. Furthermore, the facts relevant to the questions of

whether he traveled without permission and worked without reporting his

employment were uniquely within his control. Finally, Degenhardt admitted at

the hearing that he had violated the terms of his probation and does not argue on

appeal that he would have done otherwise if a continuance had been granted.

Thus, it is difficult to see how he was prejudiced in any way by the district

court’s denial of his request for a continuance.

      To the extent Degenhardt argues on appeal that the denial of a continuance

deprived him of the opportunity to develop evidence in mitigation relating solely

to the question of what sentence he should receive should his probation be

revoked, it is far from clear he raised such a claim before the district court. Cf.

United States v. Mora, 293 F.3d 1213, 1216 (10th Cir. 2002) (noting this court

does not consider arguments raised for the first time on appeal). Even if he did

raise such a claim, however, the district court still acted reasonably in denying the

continuance. First, granting Degenhardt’s request would have caused the

expenditure of additional judicial resources. Judge Cassell was well versed in the

nuances of this complex financial fraud case as he was the original sentencing

judge. Because Judge Cassell was preparing to leave the bench, the granting of

the requested continuance would have necessitated a new judge completely

                                          -9-
familiarizing herself with the case. This is a countervailing consideration the

district court was entitled to consider in deciding whether to grant a continuance.

Furthermore, when it did deny the continuance, the district court specifically

ordered that the government could not rely on any evidence at the revocation

hearing not provided to defense counsel by October 25th, six days before the

revocation hearing. Thus, the universe of available information was known

before the hearing, seriously limiting the necessity for defense counsel to conduct

extensive interviews on any matter in advance of the revocation hearing. These

prophylactic steps served to greatly diminish any potential prejudice to

Degenhardt from proceeding with the revocation hearing on its previously

scheduled date. Thus, the district court’s decision that a continuance was not

necessary to protect Degenhardt’s right to a fair hearing was neither arbitrary nor

unreasonable.

      Likewise, the record reveals Degenhardt was not materially prejudiced by

the district court’s denial of the requested continuance. In his brief on appeal,

Degenhardt focuses on perceived questions about the amount of money he earned

on his wife’s behalf while working at YTB. There is, however, nothing in the

record to indicate that the amount of money he earned at YTB played any part in

the decision of the district court to arrive at an appropriate term of imprisonment

upon revocation of probation. Instead, the district court focused solely on the fact

that Degenhardt worked in such a way as to cover up the income earned and,

                                         -10-
thereby, avoided paying further restitution to the victims of his fraud. In

addition, Degenhardt has failed to identify on appeal any evidence he would have

presented at the sentencing hearing if the continuance would have been granted.

Thus, Degenhardt has failed to identify any prejudice to him flowing from the

district court’s denial of the requested continuance, let alone material prejudice.

      Because the denial of the continuance is supported by reasonable

considerations and because Degenhardt has shown nothing more than purely

hypothetical and abstract harm flowing from the denial of the motion, the district

court did not abuse its discretion in denying Degenhardt’s request for a

continuance.

B. Sentencing Based on Undisclosed Evidence

      Degenhardt asserts the district court relied on evidence not available to the

defense in arriving at a sentence upon revocation of probation, thereby violating

Fed. R. Crim. P. 32.1(b). In so arguing, Degenhardt relies on the statement of the

district court at the conclusion of the sentencing hearing that it had an additional

basis for his ruling that he would place on the record “ex parte en camera.” In

response, the government argues the district court relied on undisclosed

information solely in the context of determining whether Degenhardt would be

allowed to self-surrender to begin serving his sentence. Accordingly, the

government argues, there is no factual basis for Degenhardt’s assertion he was

sentenced on the basis of undisclosed information.

                                         -11-
      On November 12, 2008, this court, on its own motion and after examination

of the entire record, ordered the sealed portion of the sentencing transcript

unsealed. 5 The transcript reveals that the additional consideration set out by the

district court en camera relates solely to the decision to deny Degenhardt’s

request to self-surrender to prison. The transcript further reveals the district court

had a good reason for taking the very unusual step of going off the record at the

conclusion of the hearing: during the sentencing hearing bomb threats were

phoned into the district court from area codes close to where Degenhardt resided

and, as part of an ongoing investigation, law enforcement thought it imperative to

question Degenhardt without tipping off individuals who might be acting in

concert with him to disrupt the hearing.

      The now-unsealed sentencing transcript definitively reveals the district

court did not rely on undisclosed evidence in arriving at Degenhardt’s sentence

upon revocation of probation. Because it is without a factual basis, Degenhardt’s

argument based upon Fed. R. Crim. P. 32.1(b) necessarily fails.

      5
        On the same day this court unsealed the en camera portion of the
sentencing transcript, Degenhardt filed an unopposed motion to vacate oral
argument and submit this case on the briefs. On November 13, 2008, we granted
Degenhardt’s motion, vacated oral argument, and ordered the case submitted on
the briefs.

                                         -12-
                             IV. CONCLUSION

     For those reasons set out above, the United States District Court for the

District of Utah is hereby AFFIRMED.

                                             ENTERED FOR THE COURT

                                             Michael R. Murphy
                                             Circuit Judge

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