Court Opinion

ID: 71400
Source: CourtListenerOpinion
Date Created: 2010-04-26 07:17:41+00
Date Added: 2024-06-11T09:39:48.647830
License: Public Domain

United States Court of Appeals,

                          Eleventh Circuit.

                             No. 95-8120.

           UNITED STATES of America, Plaintiff-Appellee,

                                   v.

            Harry Leon SMITH, III, Defendant-Appellant.

                             Dec. 5, 1996.
                         (As Amended 2/20/97)

Appeal from the United States District Court for the Northern
District of Georgia. (No. 1:94-CR-149), Richard C. Freeman, Judge.

Before BARKETT, Circuit Judge, and DYER and HILL, Senior Circuit
Judges.

     BARKETT, Circuit Judge:

     Harry Leon Smith appeals his sentence for executing a scheme

and artifice to defraud, and obtaining monies and funds by means of

false and fraudulent pretenses, representations, and promises, in

violation of 18 U.S.C. § 1344.      Essentially, Smith was indicted

for, and pled guilty to, running a check kiting scheme, and was

sentenced to 18 months imprisonment and five years supervised

release, and ordered to pay $269,049.40 in restitution.

     In this appeal, Smith raises three issues.             First, Smith

contends   that   for   purposes   of   determining   the    appropriate

sentencing range the amount of loss was $35,500, rather than the

$458,500 recommended in the presentence report. He argues that the

government failed to establish that he had the requisite fraudulent

intent for the charged offense when he deposited nine checks

totaling $458,500 into his account at First Atlanta and drawn on

his Federal Savings Bank ("FSB") account.       Instead he argues that

he is only responsible for $35,500 which he withdrew from First
Atlanta after FSB informed him that checks drawn on that account

would not be honored.1    Second, Smith contends that he should have

received    an   additional   one-level   reduction   for   acceptance    of

responsibility under § 3E1.1(b) because he (1) timely provided

complete factual information to the government, and (2) timely

notified authorities of his intention to plead guilty.          He argues

that the court wrongfully refused to grant the additional one-level

reduction because Smith's counsel objected to the amount of loss

determination contained in the presentence report.           Third, Smith

argues that his offense level should not have been increased by two

points for more than minimal participation because his withdrawal

of $35,500 was a spur-of-the-moment impulse.

         Under the facts of this case, we find no merit to Smith's

arguments except for his claim that his lawyer's legal arguments

should not preclude him from receiving a reduction for acceptance

of responsibility under § 3E1.1(b) if he timely provided complete

factual    information   to   the   government   regarding   his   illegal

actions.

         Section 3E1.1 authorizes a two-point reduction in the base

offense level "[i]f the defendant clearly demonstrates acceptance

of responsibility for his offense," see U.S.S.G. § 3E1.1(a), and an

additional one-point reduction if the defendant timely provides

complete factual information to the government concerning his own

involvement in the offense and/or timely notifies authorities of

his intention to plead guilty, see U.S.S.G. § 3E1.1(b).                  The

     1
      We find no merit to Smith's argument that for sentencing
purposes the amount of loss should have been further reduced by
the amount the bank recovered from collateral and other assets.
purposes of the acceptance of responsibility reductions permitted

under § 3E1.1(a) and (b) are two-fold: first, timely acceptance of

responsibility for one's own actions indicates a willingness and

capacity for rehabilitation, and second, timely acceptance of

responsibility saves the government the time and expense of going

to trial.     See United v. De Leon Ruiz, 47 F.3d 452, 455 (1st

Cir.1995);    United States v. Eyler, 67 F.3d 1386, 1390-91 (9th

Cir.1995);     United States v. Hammick, 36 F.3d 594, 600 (7th

Cir.1994); United States v. Hernandez, 45 F.3d 437 (9th Cir.1994);

United States v. Sklar, 920 F.2d 107, 115-16 (1st Cir.1990).

Therefore, a defendant generally is not entitled to a reduction if

he puts the government to its burden of proof by denying the

essential    factual    elements   of    guilt.    See    U.S.S.G.    §   3E1.1,

comment. (n. 2).        However, a defendant who admits factual guilt

need not silently accept any punishment that the government chooses

to mete out, however incommensurate with the underlying conduct.

See United States v. McConaghy, 23 F.3d 351, 353-54 (11th Cir.1994)

(defense counsel must be given a reasonable opportunity to properly

investigate    the     charges   and    contest   the    legal    basis   for   a

conviction or sentence prior to admitting guilt).                Otherwise, the

constitutional rights to effective assistance of counsel and due

process are illusory.      Thus, although we confer a benefit on those

who timely and completely acknowledge their wrongful acts, a

defendant may not be denied a reduction under § 3E1.1 solely for

exercising the right to challenge the legal propriety of his

punishment under the criminal code and/or sentencing guidelines.

In such a case, i.e., where a defendant admits factual guilt but
challenges a legal conclusion, a court still has discretion to

order or deny a reduction depending on "the offender's recognition

of the wrongdoing of his conduct, his remorse for the harmful

consequences of the conduct, and his willingness to turn away from

that conduct in the future."   See U.S. v. Calhoon, 97 F.3d 518, 531

(11th Cir. 1996).   However, it is impermissible to consider the

challenge to the legal propriety of a sentence.        See U.S.S.G.

§3E1.1 cmt.2 ("[A] defendant may clearly demonstrate an acceptance

of responsibility for his criminal conduct even though he exercises

his constitutional right to a trial.    This may occur, for example,

where a defendant goes to trial.       This may occur, for example,

where a defendant goes to trial to assert and preserve issues that

do not relate to factual guilt (e.g. to make a constitutional

challenge to a statute or a    challenge to the applicability of a

statute to his conduct).") (emphasis added).

     In this case, Smith timely confessed his involvement in the

check kiting scheme.   He admitted that he deposited nine checks

totaling $458,500 into his account at First Atlanta Bank, which

eventually were returned to First Atlanta as uncollected funds. He

also admitted that he withdrew $35,500 from his account at First

Atlanta after having been told that the checks drawn on his FSB

account would not be honored.       In the presentence report the

probation officer recommended a total loss amount of $458,500,

after determining that that figure represented the total amount of

checks written by the defendant in the execution of his scheme to

defraud.   The probation officer also initially recommended a

three-level reduction for acceptance of responsibility pursuant to
U.S.S.G. §§ 3E1.1(a) & (b).       Thereafter, Smith's attorney objected

to the recommended loss amount, arguing that Smith committed fraud,

an essential element of the offense, only with respect to the

$35,500 that he withdrew after having been informed that the checks

he had deposited earlier would not be honored by FSB.          Based upon

counsel's   objection,      the    probation   officer     rescinded   its

recommendation   for   a   three-level   acceptance   of   responsibility

reduction and the sentencing court subsequently granted Smith a

two-level decrease for acceptance of responsibility, rather than a

three-level reduction.

     To the extent that the court denied Smith a reduction for

acceptance of responsibility because Smith's counsel objected to

the presentence report on legal grounds, the court erred. If Smith

admitted all the necessary facts of his scheme to the government,

he should not be precluded from having counsel argue the legal

effect of those facts to the sentencing court by risking the

benefits derived by his candid admissions.       Because we are unsure

whether he admitted all the necessary facts, we remand to the

district court to determine whether Smith was entitled to an

additional one-level reduction in accordance with this opinion.

     REMANDED.