United States v. Dachman
2014 U.S. App. LEXIS 2946
| 7th Cir. | 2014Background
- Kenneth Dachman ran three sleep-treatment companies and raised over $4 million from 51 investors between 2008–2010 while diverting substantial funds for personal use.
- He made false representations to investors (guaranteed repayment, business success, Ph.D. credentials) and spent investor funds on personal expenses; victims later obtained a $2.5M civil judgment.
- A federal grand jury indicted Dachman on eleven counts of wire fraud; he pleaded guilty to all counts.
- At sentencing the district court found the proper loss amount was the approximately $4 million investors lost and applied an 18-level Guidelines enhancement.
- The court denied a 2-level reduction for acceptance of responsibility, finding Dachman minimized and shifted blame at sentencing.
- The court imposed a within-Guidelines 120-month sentence; Dachman’s claim that his severe medical conditions made incarceration unreasonable was rejected after the court determined BOP facilities could provide necessary care.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proper loss amount under U.S.S.G. §2B1.1 | Dachman (appellant) argued loss should reflect business operational expenditures netted from the $4M pool (or his personal gain), yielding a lower enhancement | Government: loss = the $4M pool investors lost; that entire amount was put at risk by the fraud | Court: affirmed $4M loss; defendant forfeited new operational-expenditure theory and no plain error in treating $4M as amount put at risk |
| Entitlement to §3E1.1 acceptance-of-responsibility reduction | Dachman argued he pleaded guilty and showed remorse, meriting a 2-level reduction | Government: Dachman minimized responsibility, blamed others, and earlier attempted nolo contendere; court should deny reduction | Court: denied reduction; sentencing judge’s credibility finding was not clearly erroneous because Dachman’s statements minimized culpability and shifted blame |
| Procedural sufficiency of sentencing under 18 U.S.C. §3553(a) | Dachman argued the court failed to adequately weigh his severe medical conditions and need for specialized care | Government: BOP can provide appropriate care; district court considered medical evidence and delayed surrender to arrange placement | Court: sentence procedurally sound — district court considered §3553(a) factors, acknowledged medical issues, and provided opportunity to recommend BOP placement |
| Substantive reasonableness of 120-month within-Guidelines sentence | Dachman argued incarceration was objectively unreasonable given his infirmities | Government: within-Guidelines presumptively reasonable; BOP can care for him; illness does not excuse crime | Court: substantive reasonableness upheld; within-Guidelines sentence not an abuse of discretion |
Key Cases Cited
- United States v. Middlebrook, 553 F.3d 572 (7th Cir. 2009) (argument not raised below is forfeited on appeal)
- United States v. Swanson, 483 F.3d 509 (7th Cir. 2007) (loss for fraud is the amount put at risk by the defendant)
- United States v. Frykholm, 267 F.3d 604 (7th Cir. 2001) (acceptance-of-responsibility findings are factual and reviewed for clear error)
- United States v. Ali, 619 F.3d 713 (7th Cir. 2010) (blaming others or minimizing involvement undermines acceptance-of-responsibility reduction)
- United States v. Brown, 732 F.3d 781 (7th Cir. 2013) (standards for procedural and substantive review of sentencing)
- United States v. Pilón, 734 F.3d 649 (7th Cir. 2013) (within-Guidelines sentence entitled to presumption of reasonableness)