Court Opinion

ID: 3046294
Source: CourtListenerOpinion
Date Created: 2015-10-13 23:18:38.230834+00
Date Added: 2024-06-11T11:41:09.845115
License: Public Domain

United States Court of Appeals
                            FOR THE EIGHTH CIRCUIT
                                     ___________

                                     No. 08-1092
                                     ___________

United States of America,                 *
                                          *
             Appellee,                    *
                                          *    Appeal from the United States
      v.                                  *    District Court for the Eastern
                                          *    District of Missouri.
Karen Hartstein,                           *
                                          *
             Appellant.                   *
                                     ___________

                              Submitted: September 24, 2008
                                 Filed: March 9, 2009
                                  ___________

Before RILEY, HANSEN, and MELLOY, Circuit Judges.
                            ___________

MELLOY, Circuit Judge.

      Defendant Karen Hartstein admitted to conducting a scheme to defraud
numerous victims. She pleaded guilty to Mail Fraud in violation of 18 U.S.C. § 1341
and Unauthorized Use of a Credit Card in violation of 18 U.S.C. § 1029(a)(2). We
discussed the details of her offense, initial sentencing hearing, and initial sentence in
United States v. Hartstein, 500 F.3d 790 (8th Cir. 2007).

      In that prior appeal, we remanded for resentencing after finding that the burden
of proof had improperly shifted to Hartstein to disprove loss amounts during the first
sentencing hearing. Id. at 796. We noted specifically that, at resentencing, Hartstein
would be bound by concessions she had already made regarding amounts received
from her victims. Id. We also noted that Hartstein’s intent and the circumstances
surrounding her receipt of funds were relevant to the questions of loss amounts and
intended loss amounts in accordance with U.S. Sentencing Guidelines Manual, §
2B1.1 (2004). Hartstein, 500 F.3d at 797–98.

      At resentencing, the district court1 addressed two main issues. First, the court
addressed the circumstances and intent surrounding Hartstein’s receipt of funds to
resolve the question of whether all funds Hartstein admitted to receiving were to be
included in the loss amount or whether she should receive credits for certain
repayments. Second, the court addressed the question of loss amounts above those
included in the concessions Hartstein previously had made.

       The court found Hartstein had conceded the receipt of over $2.2 million from
fraud victims during a period of time when there was no possibility of repayment
other than through the use of additional, ill-gotten funds. As a result, the district court
held all repayments were merely tools to perpetuate Hartstein’s scheme, and she was
entitled to no credits for repayments of any of this amount. The court further found
that the government adequately proved over $300,000 in additional losses related to
certain victims or related to Hartstein’s separate concessions as to her unauthorized
credit card use.

       Given these findings, the total loss amount exceeded $2.5 million. Applying
U.S.S.G. § 2B1.1(b)(1)(J), and applying several adjustments as approved in our prior
opinion, the resultant advisory Guidelines range was 108 to 135 months. The district
court imposed a sentence of 135 months to be followed by three years of supervised

      1
       The Honorable Carol E. Jackson, Chief Judge, United States District Court for
the Eastern District of Missouri.

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release. In addition, the district court ordered Hartstein to pay restitution in the
amount of $2,088,433.68.

      Hartstein appeals arguing that she should receive credits for certain repayments
and that she should not be bound by prior concessions. In addition, she challenges the
amount of her restitution, arguing the restitution order violates United States v.
Booker, 543 U.S. 220 (2005). She also argues that the notice requirements of Federal
Rule of Criminal Procedure 11(b)(1)(K) necessarily limit any restitution solely to
funds owed to the two victims of the criminal conduct to which she pleaded guilty.

      Regarding credit for repayments, we addressed the relevant legal issues in depth
in our prior opinion. Hartstein, 500 F.3d at 797–99. The record following
resentencing adequately supports the district court’s findings. See United States v.
Boesen, 541 F.3d 838, 850 (8th Cir. 2008) (“A sentencing court calculates a
reasonable estimate of the loss based upon a preponderance of the evidence.”).

       Regarding concessions, Hartstein alleges her attorney made representations to
the court during the initial sentencing hearing without obtaining her authorization to
make such representations or concessions. Because her present challenge as to
concessions is, in essence, an allegation of attorney error or ineffective assistance of
counsel, we may not address her arguments on direct review absent exceptional
circumstances. See United States v. Davis, 452 F.3d 991, 994 (8th Cir. 2006) (stating
that review of ineffective assistance claims may be proper on direct review “only
where the record has been fully developed, where counsel’s ineffectiveness is readily
apparent, or where to delay consideration of the claim would lead to a plain
miscarriage of justice”). Because such exceptional circumstances are not present in
this case, any challenge to counsel’s actions would be more properly raised in the
context of a collateral proceeding using 28 U.S.C. § 2255.

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       Finally, regarding restitution, Hartstein did not raise her Rule 11 challenge at
the first sentencing hearing or during the first appeal. As such, she has waived this
argument. United States v. Kress, 58 F.3d 370, 373–74 (8th Cir. 1995). Further, we
have repeatedly held “that the evidentiary standard in restitution cases is unchanged
by United States v. Booker,” United States v. DeRosier, 501 F.3d 888, 896 n.12 (8th
Cir. 2007), and we note that Hartstein renews her Booker challenge primarily as a
means of issue preservation.

      We affirm the judgment of the district court.
                      ______________________________

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