United States v. Daniel Sexton
894 F.3d 787
| 6th Cir. | 2018Background
- Defendant Daniel Sexton owned and operated multiple Kentucky businesses; from 2006–2010 he, a CPA (Williams), an office manager (Flynn), and a bank officer conspired to obtain bank loans by submitting inflated/false financials and using straw borrowers; banks disbursed $8,160,400.
- Sexton pleaded guilty to conspiracy to commit bank fraud (18 U.S.C. §§ 1349, 1344) and the government dismissed other counts; PSR sought leadership enhancement (+4) and assessed criminal-history points from a 2005 California nolo contendere plea that resulted in probation.
- At sentencing the district court applied the leader/organizer enhancement, assessed three criminal-history points (including two for committing the instant offense while on probation), and imposed 109 months’ imprisonment.
- The court entered forfeiture (money judgment $2,534,912) under 18 U.S.C. § 981(a)(1)(C) and restitution of $2,637,058.32 (joint and several). Sexton appealed on multiple grounds.
- The Sixth Circuit affirmed: (1) criminal-history points for the California probationary disposition and the two points for committing the offense while under sentence; (2) §3B1.1 leadership enhancement; (3) substantive reasonableness of the within-Guidelines term; (4) forfeiture under §981(a)(1)(C) (declining to apply Honeycutt’s restrictive holding to §981); and (5) restitution amount (reviewed for plain error).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Criminal-history scoring for 2005 California disposition and §4A1.1(d) two-point addition | Govt: PSR correctly treated the 2005 nolo contendere with probation as a prior sentence and the instant offense occurred while under that sentence | Sexton: California disposition and later withdrawal/dismissal should not count or trigger additional points | Affirmed: diversionary/probation disposition counts under §4A1.1(c)/§4A1.2(f); offense occurred while under sentence, so +2 applies |
| §3B1.1 leadership/organizer enhancement (+4) | Govt: Sexton exerted control over at least one participant, used businesses/employees, and personally benefited — qualifying as leader/organizer | Sexton: disputed that he organized/led or supervised others | Affirmed: district court’s factual findings not clearly erroneous; multiple guideline factors support leadership role |
| Substantive reasonableness of 109-month within-Guidelines sentence | Govt: district court considered §3553(a) factors and justified mid-range sentence | Sexton: court gave insufficient weight to his remorse, family, and allegedly minor history | Affirmed: within-Guidelines sentence presumed reasonable; court weighed factors adequately |
| Forfeiture under 18 U.S.C. §981(a)(1)(C) after Honeycutt | Sexton: Honeycutt limits forfeiture to property the defendant personally acquired; money judgment is thus invalid | Govt: Honeycutt relied on different statute (§853) and its reasoning does not apply to §981’s broader traceability language | Affirmed: Honeycutt’s “person obtained” limitation not applicable to §981(a)(1)(C); joint liability for proceeds traceable to the offense is permitted |
| Restitution amount and inclusion of bank fees/legal costs | Sexton: PSR methodology and inclusion of items (e.g., Forcht Bank’s accrued fees and legal fees) improper; some items not recoverable under MVRA/Lagos | Govt: PSR charge-off methodology documented; amounts traceable to victim losses; parties did not contest figures below | Affirmed (plain-error review): district court did not plainly err in accepting PSR methodology or restitution total; concurrence would remand limited legal-fee item for further proof under Lagos |
Key Cases Cited
- Honeycutt v. United States, 137 S. Ct. 1626 (2017) (Supreme Court limited forfeiture under §853 to property the defendant personally obtained)
- Lagos v. United States, 138 S. Ct. 1684 (2018) (reinterprets §3663A(b)(4) to limit recoverable restitution expenses to those tied to government investigations or criminal proceedings)
- Gall v. United States, 552 U.S. 38 (2007) (standard for procedural and substantive reasonableness of sentences)
- United States v. Hampton, 732 F.3d 687 (6th Cir. 2013) (standards for appellate review of forfeiture and plain-error review)
- United States v. Bogart, 576 F.3d 565 (6th Cir. 2009) (permitting joint-and-several restitution liability among co-defendants)
- United States v. Vandeberg, 201 F.3d 805 (6th Cir. 2000) (government bears burden to prove applicability of §3B1.1 enhancement)