*1 individuаlly, respect with Udren practices Court she had learned of based on what the ef- imposi- considered court reversing bankruptcy’s there. Insofar she the future conduct of on fect the sanctions of sanctions. tion her, attorneys appearing before of other Af- permissible. were
such considerations 11 sanc- all, Rule prime goal [of
ter “the of repetition of be deterrence
tions] should County v. conduct.” Waltz improper (3d Cir.1992). 387, 390
Lycoming, 974 F.2d
G. Conclusion use America, that the of technolo- appreciate We UNITED STATES attorneys gy litigants can save both Appellant/Cross-Appellee course, not, money, do time and and we v. that the use of databases suggest mean to FUMO, Appellee/Cross- communications Vincent J. or even certain automated presump- Appellant. counsel and client are between However, re- tively Rule 11 unreasonable. America, Appellant United States rubber-stamping than quires more process by per- of an automated results lawyer. happens son who to be Where Ruth Arnao. lawyer any re- systematically fails take seeking adequate informa- sponsibility 09-3389, 09-3388, Nos. 09-3390. client, representations tion her makes Appeals, Court of United States they are any without factual because basis Third Circuit. pleading” in a “form she has been included out, ignores fill trained to obvious May 25, Argued 2011. may be indications her information incorrect, Opinion Aug. Filed: 2011. said to made she cannot be have Therefore, inquiry. find reasonable we As Amended Sept. court did abuse its bankruptcy Doyle imposing discretion sanctions However, it
or the Firm itself. did Udren in imposing
abuse its discretion sanctions individually.
on Udren
III. reasons, foregoing
For the we will re-
verse District with respect Firm,
Doyle affirming and the Udren
bankruptcy imposition court’s of sanctions. HSBC, respect previ-
With as discussed
ously, jurisdic- the District Court lacked sanctions, we;
tion reverse the as do
therefore, we vacate the District Court’s party, leaving
order respect imposed by bankruptcy
the sanctions
court in affirm District place. We will *6 Memeger, Esq.,
Zane David Robert A. Zauzmer, Esq. [Argued], Pease, John J. Esq., Office of United Attorney, States Philadelphia, PA, Appellant/Cross-Ap- for pellee. Buffone, J. Esq. [Argued],
Samuel Buek- LLP, D.C., leySandler Washington, Peter Ardmore, PA, Goldberger, Esq., for Appel- lee/Cross-Appellant Fumo. Egan, [Argued],
Patrick J. Esq. Eric E. Reed, LLP, Esq., Fox Rothschild Philadel- PA, phia, Appellee for Arnao. FUENTES, GARTH, Before: NYGAARD, Circuit Judges. Democratic came Chairman of Senate THE COURT OPINION OF Committee, put him Appropriations FUENTES, Judge: Circuit of that could of millions dollars control 14, 2010, Dis- July the United States On legisla- his discretion for dispensed be of for the Eastern District trict Court Fumo in the Penn- purposes. tive served Pennsylva- former Pennsylvania sentenced thirty years, for sylvania Senate State to 55 J. Fumo Senator Vincent nia State became widely agreed that he where $411,000fine, and imprisonment, months’ powerful figures of political one the most restitution, arising his $2,340,839 in from in the state. fraud, of tax on 137 counts jury conviction sen- three decades as a state During his justice. A evasion, and obstruction ator, publicly frequently Fumo directed his later, the District Court sentenced week his to attend to paid employees Senate impris- Arnao to Fumo aide Ruth former dur- political and interests personal neеds $45,000 year day, one of one and onment hours, night as at ing working their well fine, joint restitution with and and several Philadelphia weekends. Fumo’s $792,802, arising her upof em- fraud, was staffed ten such tax district office jury conviction on 45 counts evasion, justice. ployees, providing duties included On whose obstruction argues residents of appeal, Government constituent services procedural However, Court made numerous of- District Fumo’s the staffers district. sentences. arriving errors at both campaign also Fumo with provided ten particular, Government asserts personal organizing political assistance: the District Court failed announce mailings, processing bills fundraisers and guidelines sentencing range for final accounts, handling vari- business contending cross-appeals, Fumo. Fumo finances. aspects personal ous Fumo’s the District erred when it de- housekeep- also acted as his Various aides motion a new trial based on nied his er, man- place place, him from drove jury partiality and the District alleged his 33-room aged the refurbishment of admission of evidence related Court’s *7 house, errands, and even personal ran Pennsylvania’s employee ethics law. public During daughter drove to school. his reasons, we will affirm following For Vineyard, trip Fumo’s annual to Martha’s conviction, Fumo’s vacate sentences Massachusetts, would his Senate aides Arnao, Fumo and and remand both for Philadelphia drive from and two vehicles resentencing District Court. before the back, Fumo and luggage filled with guests. also their time his Staffers used I. Philadelphia City to assist a Councilman Background A. and, months, ally who for two was Fumo’s ultimately campaign to advance the of an high-profile Fumo was a Penn- Vincent Pennsylvania gu- unsuccessful Democratic sylvania state at the center of one senator Moreover, Fumo bernatorial candidate. largest in recent political scandals Harrisburg— misused staff in his Senate history. first state Fumo was elected to developed a several renovated and a in of them Senate in 1978 from district State a resi- purchased farm he had 2003 as eventually He be- Philadelphia.1 South at taking part proof tween and the offered In was convicted of the indictment Fumo party place appeal. a local Democratic scheme that we on trial —a decision affirmed Camiel, legislative payroll as workers on the state F.2d 31 See United States “ghost employees.” was Fumo’s conviction Cir.1982). overturned because of variance be- later trash, streets, removing In ex- enterprise. sweeping dential and business trim- trees, snow, for change, arranged Fumo salaries his ming clearing and cleaning greater employees substantially that were alleys and abandoned lots. Citizens Alli- than Senate designated those State funding аnce received much of its comparable employees. for Senate grants obtained from the Fumo state and other entities. In after Fumo non-staffers, such provided Fumo also litigation brought challenging utility contractors, members, family girl- and rates, Philadelphia Electric Company resources, friends with access to Senate (“PECO”) privately agreed donate $17 and including laptops computer assistance. part million Citizens Alliance as of a Further, he used Senate funds hire agreement. settlement The existence of non-legislative contractors for tasks. For million only contribution became $17 instance, $40,000 obtained a Fumo state public knowledge in November when who, in investigator contract for a private reported by it was Philadelphia In- activities, legitimate addition to his con- quirer. million, After the influx wife, $17 ducted surveillance Fumo’s former expanded Citizens Alliance the scope of its girlfriends, ex-girlfriends’ boyfriends, and work, acquiring times, properties renovation, for political rivals. He obtained an $80,000 opening school, charter and attempting for a state contract consultant who develop spent building high-tech much his time office for assisting Fumo $45,000salary companies. with and a political races spent an individual his who most of time However, expanded concurrent with its assisting with Fumo’s farm. Mitchell efforts, began Fumo and Arnao to use Rubin, the and boyfriend later husband of Citizens Alliance their personal funds for Arnao, paid $30,000 Ruth per year for benefit, $90,000 including for tools and much, if years, doing any, five without $6,528 vacuum and cleaners floor ma- work at all. chines used Fumo’s homes. Citizens In order to facilitate his use of provided Alliance also Fumo and his staff purposes, falsely vehicles, funds for his own $38,000 minivan, including a represented employees contrac- and $52,000 luxury SUV, $25,000 jeep. and receiving payment by tors were Senate total, $387,325 more than went towards performing legitimate legisla- proper acquiring vehicles for maintaining they tive only partially functions that Fumo, Arnao, aides, legislative use of completed, never fact failed dis- Further, family members. Citizens Alli- *8 private political close the and services ance the of became landlord Fumo’s office they actually performing. were Fumo also on Street in Philadelphia. Tasker While provided job descriptions false elevat- and $90,000 spent the Senate in rent during a ed position classifications that conflicted period, five-year spent Citizens Alliance with that employees actually the duties $600,000 maintain, furnish, over to and carried out. rent Fumo’s office at a to him discount. The office also campaign served as his
In and Fumo his staff founded a Further, headquarters. office and ward non-profit organization became known paid phones Citizens Alliance for cell for as the Neigh- Citizens Alliance for Better many staffers, (“Citizens Alliance”). of Fumo’s as well as his Arnao, a borhoods $39,000 paid It also for daughter. Fumo’s staff, Senate on became employee Fumo’s $50,000 trip to with five and its director. stated Cuba friends Citizens Alliance’s dog” purpose improve Philadelphia was to for a “war memorial Bucks Coun- neighborhoods through projects ty- such as um, help to the museum expected but were Alliance violation
Fumo used Citizens 501(c)(3)rules charitable or- Fumo develop federal for and solicit donors. While $250,000 for having pay ganizations by way much in the did not donate solicit $20,000 a polling, for lawsuit political ISM, he his of donations for the did use rival, $68,000 sup- to a and against Senate grants to obtain for the museum influence to Government’s con- opposition port Howev- from the state and other entities. shore, along Jersey dunes struction er, ISM, he also expense at the his have blocked seaside which would repeatedly yachts pleasure used its for the ocean and its view of reduced house’s for ship and its models decorations cruises oppose the value. In order to property and personal his home office. These dunes, had his Senate counsel create Fumo resources, were uses of the ISM’s nonprofit entity “Riparian called Defense Carter, approved by president John ISM’s Fund, from Inc.” to funnel funds Citizens policies were in violation the museum’s Alliance, then the IRS and and misled and later claimed that he bylaws. Fumo Secretary as Pennsylvania of State to the yachts help money used raise for organization. and purpose nature paid and that he museum sometimes Further, political misrepresented Fumo for use. their expenses “community de- campaign and as In investi- began Government velopment consulting” expenses on Citi- December, Fumo. the Philadel- gating filings, deceiving zens Alliance’s tax phia published a of articles Inquirer series yet again. IRS and about Alliance’s use of funds Citizens had his Just he done with relationship Shortly Fumo. there- Alli- employees, Fumo directed Citizens after, computer Fumo directed a techni- mat- personal ance staff to assist with his cian on his staff ensure all emails ters, Jersey his traveling to house on and Fumo others were deleted. and paint and dock and repair shore his Inquirer ran an entitled When article trash, deck, undertaking picking up and January “FBI Probes Fumo Deal” They other errands and tasks. also fre- 2004, Fumo involved additional Senate and his quently cleaned served Philadel- at- expanded scope aides and of his home, and phia equipment and delivered tempts Throughout to delete emails. Additionally, his personal items to farm. Arnao, aides, his email including deleted $27,000 paid Alliance Citizens bull- from numerous computers communica- traсtor, truck, dozer, dump an all- lawn devices, comput- tion “wiped” then vehicle, pickup and a F-150 terrain Ford using sophisticated programs ers in order Harrisburg-area truck for farm. Fumo his prevent analysis. forensic These efforts Arnao funds never disclosed the used wiping computers at Arnao’s included Fumo’s personal benefit Citizens Despite home and Citizens Alliance. accountants, Alliance’s and when asked efforts, Fumo’s two of aides involved accountant, those Arnao about funds kept oth- deletion emails between each purpose. misstated their Arnao *9 er, in- including regarding emails Fumo’s repeated misrepresentations also made computer structions to eliminate evidence journalists about Alliance how .Citizens and of the fraud. spent it its funds. the Fumo served on of directors board B. Trial The Independence Seaport Museum
(“ISM”). Ar- charged Fumo and Board The Government members did receive the nao what to later become a compensation or benefits from muse- under was 1 Executive Director of the superseding indictment. Counts State Ethics count (the “Commission”), on Penn- through 64 related fraud the Commission the body Senate, through sylvania charged State Counts enforcing the Ethics Act. Alliance, 1103(a) on Counts 99 98 to fraud Citizens of prohibits Section The Ethics Act tax 103 to evasion Citizens through or public employee official from engaging Alliance, fraud through 108 to Counts in conduct that constitutes a “conflict of ISM, through 141 to on and Counts 109 interest,” § defined 1102 as the justice conspiracy to obstruction of and by public official or employ- “[u]se justice. of was commit obstruction Fumo authority of ee of his office employ- counts, including all but charged ... the private pecuniary ment benefit trial, 100 and 102. At Counts Govern- himself, of of a member his immediate voluntarily ment moved to dismiss Counts family or a business with which he or a Fumo. Arnao was against 36 and 38 of his family member immediate is associ- counts, charged including Counts 65 ated.” 98, related to the fraud on Citi- through trial, Prior Judge to the Yohn had found 100, 102, Alliance, 99, zens Counts and “well qualified” expert Contino be as an evasion, 109, related to tax and Counts ruled it “appropriate and that was for him 121, 124, 126, 127, 129, 132, 134, and relat- (J.A. 431). talk about the Ethics Act.” justice. of ed to obstruction trial, During Contino testified toas how originally assigned The case was and to whom the applied, Ethics Act Yohn, Jr., H. Honorable William and after nature, mandatory whether was and delay satisfactory some while Fumo found legislature to how apprised was counsel, jury began defense selection on Ethics Act inter- Commission’s 8, September 2008. After case was it. pretation of Contino also referenced reassigned to the Honorable Ronald L. abridged versions of the Commission’s Buckwalter, jury selection resumed on Oc- opinions, summarizing violations that were tober 2008. The trial lasted an addi- сonsidered and ruled upon the Commis- months, five proceedings tional with the not, however, sion. He did express an By on Fridays. halted the time it rested opinion as to whether Fumo’s own actions January 26, on its case the Govern- violated the Ethics orAct whether Fumo ment had called 80 witnesses its case-in- guilty of the charges against federal chief. The then called an defendants addi- him. witnesses, including tional 25 Fumo him- extensively Government also cross- self, February and rested their case on subject examined Fumo on the of the Eth- 16, 2009, days 2009. On March after four knowledge Act his specifically ics deliberation, jury convicted Fumo of of it. At the understanding time him, all presented 137 counts against cross-examination, pro- the District Court presented Arnao of all 45 counts against limiting jury, vided instruction to the her. reminding required them that no law A during number of events occurred to study reports the decisions or trial that Fumo now asserts as the bases the Commission. First, tri- cross-appeal. during his trial, At the conclusion of the al, the Dis- the Government called J. John Contino jury trict Court further instructed the expert testify as an witness to about Act, them telling they the Ethics Pennsylvania Employee Public Official and Act, could ... [such] Ethics 65 Pa. Con. Stat. Ann. “consider evidence *10 (the Act”). et seq. [they] light “Ethics the it Contino is extent that find sheds on — defraud, (Sunday evening before Mar. 8: willfulness, intent to of questions deliberations): day “[Juror 1] of the second of that faith” but “violation good ...”3 tomorrow by is not sure about not be considered ethics laws should of federal a violation implying [them] — (end day 9: of second of delib- Mar. they “may not con- law” and that criminal erations): says today was 1] “[Juror alleging any of of the counts vict tomor- expected than much better attempted to execute conspired or that he promising too!” row looks money the Senate of defraud a scheme — (Friday completion after Mar. 13: the on property simply basis or deliberations): “Stay first week of of may violated conclusion that he have Mon- big for the announcement on tuned 4363). (J.A. ethics law.” state everyone!” day jury delibera- March while On 587-88). (J.A. a local television sta- ongoing, tions were jurors, one of the here- reported tion that appeared comments l’s Facebook Juror 1,” had made to as “Juror inafter referred trial, many the months of the over Twitter on Facebook and postings both his he midst of dozens of other comments night, the trial. That related to pages trial. It to the was made unrelated jury re- night was the before the subject final, that post March 13 was verdict, watching turned its Juror was to Twit- regard of media attention. With the media when he learned that television ter, single or made a comment Juror made following comments he had it stating on March “This is “tweet” pan- He subsequently on the internet. 587). (J.A. now!” looking ... no back his icked and deleted comments of l’s Face- Fumo learned Juror When page. Facebook comments, he moved book Twitter them, deleting Prior to Juror 1 made disqualify jury. Juror 1 from the Facebook following comments on his Court held an in camera review District during the trial: jury “wall” selection and issue, and his questioned Juror about — contin- Sept. (apparently upon a 18: two and his activities these websites illness): to judge’s uance of the trial due 1 told consumption. media Juror general re- got he a week glad 1] is “[Juror report judge he saw the news money but could use the prieve, still watching anoth- night because he had been began. local He er show when the news — referring to (apparently Jan. 11: avoided explained nevertheless he had case): government’s “[Ju- the end of the trial. He during news the entire television if wondering this could be 1] ror affirmed he had not discussed also week to end Part 1?” anyone. case with Juror substance — today 21: wonders if “[Juror 1] Jan. 1 further stated that he had made really will be the end of Part 1???” my just get “for benefit to out comments — head, (conclusion argu- my blog posting similar to closing Mar. 4: (J.A. ments): somebody something.” journaling can’t tomor- believe “[Juror 1] 589). may actually row be end!!!”2 responded to the 8 Face- 4 Face- 3. A friend March responded
2. A to the March friend "Why?” respond- post asking Juror 1 post asking Juror 1 book “of what?” book (J.A. 5 months dear.” say LOL.” ed: "think of the last responded: “Can’t till tomorrow! 592). (J.A. 30). n.
299 opinion, In a written the District Court Fumo permission to take free yacht no determined there was evidence trips, doing time for fraud. The that Juror received outside influence due judge want didn’t jury know or postings to his Facebook Twitter Carter, about either. that, although concluded in violation of his (J.A. 703-04) (emphasis original). instruction to discuss the case outside There any was no evidence that ju- other room, jury they “nothing of the were more ror had of prior learned Fumo’s conviction having than harmless no ramblings preju- Carter, of conviction and the other They vague dicial effect. were so as to be jurors five by interviewed Cipriano did not 592). (J.A.
virtually meaningless.” mention either fact. three after More than months the ver- The motion, District Court denied the dict, sentencing, but before Fumo filed a concluding that the information was an trial, for a attaching second motion new insufficient basis hold a hearing and Cogan. affidavit counsel Dennis that, everything by even if asserted Juror journalist affidavit asserted true, 2 were it would not constitute the Ralph writing Cipriano, Philadelphia showing of prejudice substantial required Magazine, Cogan had contacted regarding grant trial. new during post-ver- information he obtained jurors. dict interviews several Ac- Sentencing C. by an article cording Cipriano, written July On the District Court held a morning day on of March of the sentencing hearing at parties which the verdict, jurors all of the had heard media arguments made reports Juror directed at the about l’s use Facebook sentenc- Further, juror ing guidelines and Twitter. another here- calculations for both Fumo 2,” inafter referred to as “Juror indicated and Arnao. The adopted Government at her workplace Friday, that while position of Report Pre-sentence several her of co-workers informed Fumo’s (“PSR”), which divided Fumo’s crimes into prior conviction, overturned as well as the two groups pursuant §to 3D1.2 of the imprisonment of conviction and John Car- Sentencing Guidelines—the made up first ter, president former of the ISM. Both of of the 134 fraud and justice obstruction of these had previously facts been excluded counts, consisting second by trial Spe- the District Court. (Counts 99, three tax evasion counts cifically, the article that Juror stated had 103). Cipriano told that: As to first group, began the PSR stopped Co-workers and talked with a base offense level of under media, things about in the such as 2Bl.l(a)(l). § U.S.S.G. It added then conviction, prior Fumo’s subse- 2Bl.l(b)(l)(J) § levels under because it quently judge, overturned for hir- calculated the loss from the fraud to be employees. ing ghost Judgé Buckwalter greater $2,500,000, specifically than repeatedly prosecution turned down re- $4,339,041. The PSR then added levels quests tell the jury prior about that 2Bl.l(b)(8)(A) § under because conclud- conviction. But any- [Juror found out 2] misrepresented ed Fumo he was act- way, though up even she her held hands ing organization, on behalf aof charitable
and told co-workers: don’t Please talk to Citizens Alliance. Similarly, it added 2 me, I can’t discuss the case. Co-work- 2Bl.l(b)(9)(C) levels under Carter, because the ers also told her that John for- mer fraud the use president Independence sophisticated involved Sea- Museum, port guy means, gave and the who corpora- used a shell *12 300 2- apply also to the
tion, purchase to District Court declined Leasing Corp., Eastern and conduct sophisticated use enhancement for means personal vehicles for his level firm consulting used a polling, Additionally, and political group. the evasion tax role a lawsuit a to conceal his conduit departures requested downward two The political his rivals. against one of physical on his health under based under an 4 levels PSR added additional extraordinary public § 5H1.4 and for ser- 3Bl.l(a) organiz- as the § for Fumo’s role § The vice under 5H1.11. District Court fraud, and 2 levels the er or leader of judgment reserved the former and denied in a position § 3B1.3 he was under because until the final the latter on 3C1.1, § it Finally, under public of trust. adjusted hearing. reduced offense With of 2 levels obstruction added for Fumo’s the and tax of and 24 for fraud levels 31 during of the of- justice investigation combined groups, respectively, evasion fense, 2 of and for his obstruction levels 3D1.4(b), § 32 offense level became under at trial. justice perjuring himself guideline range into a of 121 to translating total, adjusted the PSR calculated Fumo’s imprisonment. 151 months’ group as 39. level for the fraud offense July the District held an- On group, As the tax evasion the PSR hearing. the Govern- lengthy other When of 24 under began with a base offense level ment learned that the Court had calculated 2Tl.l(a)(l) 2T4.1(J) §§ because months, range 121 to it guideline a of 151 $2,500,000, and tax was more than loss variance, sought upward arguing an $4,624,300. It then added specifically adjusted range adequately rep- did 2Tl.l(b)(2) § the of- under because levels the full resent or take into account loss means, a sophisticated for fense involved fraud, damage from the insti- adjusted total level of 26. offense tutions, trial, at alleged perjury Fumo’s group’s the tax evasion offense Because conduct, al- other obstructive and Fumo’s level of 26 more than 8 levels below The leged lack of remorse. District Court 39, pur- group’s the fraud offense level vary upwards. It also denied declined 3D1.4(c), no levels suant additional departure on request Fumo’s for a Ac- larger were added to the of the two. Then, of medical condition. after basis his calculated, and the cordingly, PSR hearing spoke six on witnesses who argued, Government District behalf, reviewing Fumo’s hundreds of adjusted find total Court should Fumo’s public, that Fumo letters from found level 39 and his criminal offense to be public and ... had “worked hard for the I, category to be history would extraordinarily hard” that it worked such guideline range mean a of 262 to 327 guide- “grant a from the departure would imprisonment. months’ (J.A. 1622-23). lines.” Without enunciat- day July hearing, The after the guideline ing any range modification to the ruling District Court issued order months, the District Court apply it would not the 2-level enhancement impris- then sentenced Fumo to term of 2- misrepresentation, for charitable months, years super- three onment of 55 sophisticated level enhancement for release, $411,000 fine, $13,700 vised means, or the obstruction of second 2-level assessment, $2,084,979 in restitu- special justice trial. perjury enhancement tion, $255,860 prejudgment interest It loss from the also calculated total restitution. $2,000,000 $2,379,914 fraud to be —about Fumo filed Motion Correction less than the Government’s calculation under Federal Rule of Criminal a reduction of additional levels. Sentence 35(a), asking Procedure the Court to re- the defendant. I did not announce what solve various issues related to the sen- *13 specific guideline level the offense fell Among tence. raised issues was the into; say, that is to precise number had, fact that the District Court during the by of levels I which intended to depart July sentencing hearing, three times because until I considered all other sen- referred to the sentence a “departure” as factors, tencing I could not determine in guidelines range. from the The motion precise months the extent that I would papers noted that a sentencing “[w]hen vary guidelines. from the court grants ‘departure,’ a true op- [as Having advised counsel of the offense variance,] posed to a it must ‘state how the level I that found my intent to de- departure affects the Guidelines calcula- part downward, I proceeded then tion.’ This Court[ ] fail[ed] make such a hear from counsel respective their anal- (J.A. 1629) statement....” (quoting Unit- yses of what an appropriate sentence Tomko, ed States should be. Cir.2009) (en banc)). They suggested also procedure The I followed was perhaps context, appears “[i]n it more akin to that associated with a vari- Court intended the sentence as a statute- ance than a downward ‘variance,’ departure based be- designed to achieve a cause I punishment never greater sufficient but not announced nor I than have ever necessary objectives to fulfill the set forth determined to what guideline level I had 3553(a)(2), § at 18 U.S.C. rather than as a departed. Ultimately, the argument ” ‘departure.’ Guidelines Manual-based over which it was elevates form over (J.A. 1629). Fumo asked that the Court substance. (J.A. 1629). “correct this technical error.” (Sealed 185-86). App. The Statement of response, Government filed a contest- Reasons further indicated that the Court ing Fumo’s characterization of the Court’s granted had departure Fumo a under below-guideline sentence as a variance and § 5H1.11 of Sentencing Guidelines for noting repeatedly that “the Court stated Record, “Military Service, Charitable Good that it grant departure decided to mo- Works.” (J.A. 1635). tion based on service.” sentencing Fumo, After the District The following day, the District Court a sentencing held hearing for Arnao. issued a Order, Memorandum and originally recommended, The PSR and the among things, explained other that “[t]he Government argued, the loss from government correctly states that the court Arnao’s fraud was between $1 $2.5 it granting announced a departure. million, leading to an offense level of 23 Thereafter, the court never enunciated the 2Bl.l(b)(l)(I) § under of the Sentencing guideline and, level to which it departed, Guidelines. The PSR also recommended fact, never reached the it by sentence did 2-level enhancements for the use of so- consulting any specific level on guide- means, phisticated misrepresentation on (J.A. 1653). line chart.” The District behalf of a organization, charitable Court also filed a Judgment and a formal justice, obstructions of generating a total Statement of Reasons. The Statement read, adjusted offense pertinent level of 29. part: Just as for Fumo, the PSR’s offense level calculation
I next determined whether there for the tax evasion group began with a should be a departure from the guide- base offense lines and level of and then announced аdded hearing that there levels should be because the sophis- based offense involved my finding extraordinary good means, works adjusted ticated for a total offense responds that evidence The Government grouping rules level of 26. Under Act was of substan- regarding Ethics 3D1.4, levels added two additional were necessary to tial relevance because it was making higher level of to the offense approve did not show that Senate offense level 31. combined With using expenditures the kind of Fumo made I, category history criminal entailed well that Fumo money, state as show 135 months. sentencing range of 108 to intended to deceive the Senate mislead- re- hearing, the District Court At the how ing spending about he was *14 jected the means enhance- sophisticated money. The Government notes that this the ment and determined that loss particularly given true Fumo’s initial was than the Alliance fraud was less Citizens theory of case at trial —that no rules or the $958,080, $1,000,000, specifically thus and employing Senate laws barred resources group the and tax evasion reducing fraud use, personal his or that if there were 24, respectively. levels to 25 and offense rules, entirely vague, they such that were level created a combined total offense This unclear, Fumo also ini- and unenforced. §of 3D1.4 grouping of 27 under the rules regard- tially planned experts to call three sentencing range 70 to guidelines and a of ing their with the “customs experiences im- 87 The District Court then months. Senate,” practices focusing spe- and of the posed year a of one and one sentence “accepted cific attention on uses of staff day substantial downward variance —to —a they comport other and resources counts, concurrently years’ run on all three Act.” (Gov.Supp.App.64). the Ethics release, fine, $4,500 $45,000 supervised assessment, theory of special light and of Fumo’s restitution to Citi- case, $792,802, of the content and enforcement Alliance in the amount of zens clearly Ethics Act was relevant to the Gov jointly severally and with Fumo. ernment’s claim that there were rules that II.4 repeatedly, Fumo broke those rules understand, enough him were clear to Appeal of Fumo’s conviction deceiving and to show that he was relating Pennsylva- A. Evidence to the misrepresented he or omitted Senate when nia Ethics Act aspects expenditures of his actions and to conviction, In his appeal of he perception avoid had violated argues presented that the Fumo evidence evidence, it those rules. Without regard Government with to the very would have been difficult for the Gov state Ethics Act to the fed was irrelevant prove intent. ernment fraudulent See him, charges against eral criminal and was 24 Copple, States v. F.3d 545 United highly prejudicial likely it was (3d Cir.1994) because intent (“Proving specific jury suggest and, confuse difficult, mail cases as a fraud was in violation of state law. The District result, policy developed has liberal rulings admissibility regarding Court’s government allow the introduce evi testimony expert of evidence are re even bears on the peripherally dence that intent.”). Further, viewed for abuse of United the District question discretion. Mathis, jointly drafted in jury States F.3d Court read Cir.2001); struction, Serafini, and after during States v. both the trial United (3d Cir.2000). emphasized that Fumo closings, F.3d 768 n. 14 3742(b) § jurisdiction jurisdiction pursuant 4. The District Court had over this U.S.C. § matter under 18 U.S.C. and we have U.S.C. violating mandatory was not on trial for the Ethics nature of the rules was a de- Act, violation of scription and that even a the Ethics some of Commission’s dis- imply Act that he defraud- itself did not ciplinary opinions, penalties and the ed or defraud the conspired to Senate. imposed were for violations of the rules. finding The District Court’s that evidence properly The Government posed ques- also Act was relevant related to the Ethics tions to Contino about whether certain unfairly prejudicial not abuse hypothetical facts would constitute viola- discretion. tions of the question- Ethics Act—a line of it ing suggested pretrial had disclo- Similarly, was not an abuse pursued light sures and later of Fumo’s permit discretion for the District Court to theory of the case. Contino, John Director of the State Commission, testify Ethics about the Finally, the Government’s cross-ex previously explained Ethics Act. We have subject amination of Fumo on *15 “[wjhile permissible it not for a is Ethics Act appropriate. was also During to testify governing witness to as the law examination, direct Fumo testified that it duty since is the district court’s to ex rules[,]” “there are no as to his exercise of plain jury, the law to the our Court has discretion regarding spending and that expert testimony concerning allowed busi “there are no guidelines” as to whether practices.” ness customs and United personal staffers can do errands for law (3d Leo, 181, States v. 941 F.2d 196 Cir. (J.A. 3967). makers. He then claimed 1991). practices These customs and will that “none of is written any down applicable legal regula sometimes include where, up and I think left it’s to the discre tions, requirements such registration as tion of you the senator do that to as see fit for registration securities under the Secu (J.A. and appropriate you as need and it.” Acts, Berckeley Grp., rities Inv. Ltd. v. 3967). Accordingly, order to impeach Colkitt, (3d Cir.2006), 218-19 F.3d this testimony, the Government under Davis, rules, or Medicaid States v. United standably questioned Fumo about his fa (7th Cir.2006). 471 F.3d Similar miliarity reports with the annual ly, expert may also testimony concern eth Commission that were sent to him person public ics rules and laws to related officials ally. having Fumo denied ever read the government and contractors. reports Commission, annual the of al Appropriately, never Contino testified as though being he admitted aware them. himself to whether had Fumo violated the merely Yet because this line of questioning Act, Ethics guilty or whether he was did not turn directly out to fruitful be any of the with crimes which he was although very it well Government— charged. properly explained Contino also may credibility- have undermined Fumo’s disciplinary proceedings, Commission’s it does not mean that was irrelevant or advisory opinions, its and the annual re- unfairly prejudicial. precaution, As a how port publishes, is distributed to ever, the District instructed jury Court every legislator. state This was evidence was, among things, Fumo other question relevant to the of whether Fumo required reports. to have read the annual rules, was aware of the Senate ethics and sum, the District was well thus had an intent defraud when he within the bounds of discretion in ad- represented in way and omitted facts a testimony mitting expert of Confino falsely appear that made him be cross-examination compliance permitting rules. Part of those Con- explanation tino’s Fumo on the Act. seriousness and issue of Ethics jury’s party seeking assume that Challenges fairness it must B. jury impartiality hearing prove is able id., information, with extraneous presented rulings of challenges two Fumo “the defendant determine whether denying his motions the District Court likely prejudice’ suffered ‘substantial jurors’ exposure account of a new trial on Lloyd, jury’s exposure.” result of the information, pur and the extraneous omitted). (internal at 238 citation F.3d may partiality ported prejudice order have We review court’s resulted. on Facebook 1. Juror l’s comments alleged trial based on “which denies new and Twitter discre information for abuse of prejudicial Urban, 404 F.3d tion.” States v. United that Juror l’s comments argues Cir.2005) (internal quotation brought wide- on Facebook and Twitter omitted). “A new trial war and citation jury’s public attention to the delib- spread likely if suffered ranted the defendant erations, creating “cloud of intense and prejudice’ as a result of ‘substantial ... and widespread coverage [the] media informa jury’s exposure the extraneous im- expectation that a verdict [wa]s Lloyd, (quoting tion.” Id. United States minent[,]” his thereby violating Sixth (3d Cir.2001)). “In ex to a right impartial Amendment fair and prejudice, we must conduct amining for 131). Br. (Cross-App’t trial. Fumo also objective analysis by considering prob *16 1 that the fact that Juror watched argues in allegedly prejudicial effect of the able news, evening in which his own inter- ju a hypothetical average on formation discussed, implies or net comments were at 238 (quoting Lloyd, ror.” Id. F.3d may suggests compro- that he have been (internal omitted)). Yet, quotation partiality. mised bias or into may inquire only “court the existence Com- the Judicial Conference of information” and not “into extraneous and mitteе on Administration Case subjective effect of such information Management published proposed model jurors.” particular Wilson v. Vermont jury regarding instructions “The Use of (3d Inc., Cir. Castings F.3d Technology Electronic to Conduct Re- 1999). a on or about search Communicate Case.” “If there is reason to believe the impor- the instructions focus on While jurors exposed prejudi that have been jurors consulting of websites or tance information, judge obliged cial trial is or information blogs research obtain exposure of investigate effect case, they caution in- about also the trial.” on the outcome of United jurors on the use of social media: struct Console, States v. 13 F.3d Before Trial: omitted). Cir.1993) (internal quotation However, required con the court is not deliberate, you you retire to Until investigation duct an where insufficient anyone, may not case with discuss Further, factual basis it exists. Id. you your jurors. After re- even fellow even if foundation a has been established deliberate, you begin may tire to dis- claim, court need not hold jurors, fellow cussing your the case with party “at the of a whose hearing behest you the case with cannot discuss but allegations if established would not entitle you Gilsenan, until have returned anyone else it to relief.” United States I (3d Cir.1991). an end. the case is at According verdict and is hearing, you if for all of this case ly, hope to hold a Court declines noteworthy. enthusiastically I know We endorse in- interesting and these many you phones, cell Black- of use strongly structions encourage district berries, and other the internet tools routinely incorporate courts to or them must not talk to technology. You also language similar into their own instruc- or use anyone about this case these tools juror tions. Not who with speaks unlike electronically any- communicate friends or family members about a trial your about the case. This includes one returned, juror before the verdict is who family may You not com- friends. comments a case on about the internet or anyone about the municate with case on engender social may responses media e-mail, phone, through cell your Black- include extraneous information about iPhone, berry, messaging, or text on case, attempts or exercise persuasion Twitter, website, blog or through any anything, and influence. If the risk room, through any chat or by internet prejudicial such may communication be way any networking other social web- greater juror when a blog comments on a sites, Facebook, including My Space, or social media than website when she has Linkedln, and YouTube. a discussion about the case in person, giv- At the Close of the Case: en that the universe individuals who are deliberations, During your you must respond able to see and to a comment on provide or аny not communicate with blog Facebook or a significantly larger. anyone by any information to means may about this case. You not use any Yet prohibiting while and admon media, electronic device or such as a ishing jurors from commenting—even telephone, cell smart phone, phone, obliquely a trial on social network —about iPhone, Blackberry computer; or the in- ing websites and other internet mediums is ternet, service, any or any internet text preferred highly recommended service; messaging any instant or practice, it every does not follow that fail room, blog, *17 chat or internet website such juror ure of a prohibition to abide that Facebook, Linkedln, My Space, as You- Rather, will result in a trial. with new as Twitter, any- Tube or to communicate partiality expo other claims of juror any one information about ease or to information, sure to extraneous courts any about conduct research this case must if look to determine the defendant I accept your until verdict. substantially was prejudiced. Model Proposed Jury Instructions: The Here, regard with to Juror l’s Technology Electronic Use Conduct posts, none of Fumo’s or theories of bias Research on or Communicate about a partiality plausible, is let alone sufficient Case, Judicial Conference Committee on for us to find that the District Court Manage- Court Administration and Case in denying abused its discretion his motion ment, December available http:// for a The ques new trial.5 District Court www.uscourts.gov/uscourts/News/2010/ (last tioned Juror 1 camera at docs/DIR10-018-Attachment.pdf length in about vis- 2011). August both ited his comments online and his efforts highlights gave 5. Fumo also the extensive concedes District Court such media that the coverage that on six was focused Fumo's trial in instructions on different occasions tried, Philadelphia suggests throughout including begin- market. He at the media ning September adequately did not The that District Court voir dire on 2008. attention, recognize or address this media District Court was well within its discretion infrequently jury jury too instructed the how it chose to about media instruct exposure. coverage avoid media the case. Yet evi- exposure to excluded 2’s of the case. Juror coverage avoid media dence 1 had no evidence Juror found or that posts, regarding been contacted conviction, after his months Three accessing media sources 1 had been Juror 2 had alleged that Juror Fumo’s counsel he acci- single incident when beyond the trial, co-workers, during the learned attention that dently learned of the con- prior Fumo’s overturned about both com- paying to his were employees, media as well hiring ghost for viction that the presi- also concluded ments. The Court of the former ISM as the conviction dent, Carter, of fraud. opaque charges were “so on Facebook John posts had been pieces of evidence way that members Both of these possible was no there trial the District from the could excluded Philadelphia network [Facebook’s] allegations of bias In contrast to Court. under- any obvious them and have read trial, always reluc- we “are during made (J.A. 591). It standing of his discussion.” they in after have jurors haul tant “nothing more posts as then described probe for a verdict order reached preju- no ramblings having than harmless bias, instances of misconduct potential to be vague so They effect. were dicial As we have said extraneous influences. raised no virtually meaningless. [Juror 1] before, may lead to post-verdict inquiries trial, dealing facts with specific juries to consequences: subjecting evil any comments indicated nothing these harassment, juryroom delibera- inhibiting in the anyone toward involved disposition tion, appli- burdening courts meritless with (J.A. 592). largely agree suit.” We cations, temptation jury increasing of the comments. these characterizations uncertainty jury creating tampering and that de- Finally, the District Court found Gilsenan, (quot- at 97 949 F.2d verdicts.” against dis- violating prohibition spite Ianniello, ing United States trial, cussing “[Juror 1] the details of (2d Cir.1989)). qualitatively “It juror very was trustworthy who dire thing a different to conduct voir no his duties. There was conscientious of at which the during ongoing proceeding presented by party either show- evidence adjudicative part process jury is had a extra-jury misconduct ing his years jury to recall a months or later than the Defendants.” prejudicial impact on Id. at 98. purpose.” 597-98). (J.A. Here, rejected the District Court *18 were light findings, of these which allegations of the the foundational basis large part in-person l’s based Juror of evi that Juror had learned excluded demeanor, testimony simply there is It characterized dence from co-workers. plausible theory no for how Fumo suffered affidavit, double-hearsay counsel’s defense any prejudice, preju- let alone substantial reporter’s the interviews which recounted dice, from Juror l’s Facebook and Twitter “clear, lacking the jurors, with the provide comments. Nor does Fumo substantial, and incontrovertible strong, that other plausible theory for how the fact im specific, nonspeculative that a evidence jurors of l’s may have learned Juror (J.A. 692). We need propriety occurred.” “virtually meaningless” com- “vague” and there question of whether not address led to sub- ments on Facebook could have for a foundational basis was sufficient According- however, him. prejudice against agree stantial we hearing, because everything did not if ly, the District Court abuse the District Court even what Juror reported by Cipriano it denied Fumo’s motion about discretion when true, it from her co-workers were learned a new trial on this basis. would not be sufficient for a showing against of eration finding prejudice. of See Urban, prejudice.” “substantial We also need not (finding F.3d at 778 that the party determine which has the burden of extent of the jury’s exposure to a news issue, persuasion deciding non-existent, article “was as even if limited to thus supporting the burden were on the Government to the absence of prejudice” only juror where prejudice, show the lack of substantial one had read prejudi- we article, cial pointed find that it and four others sufficient evidence in had “looked at picture on the first ... page record for the District Court to con- or contents”). glanced Moreover, at showing. [its] clude that it made such a District gave careful repeated The factors we have looked to in deter- jurors, instructions to the including imme- mining whether there prej- was substantial diately deliberation, before they (1) udice include whether “the extraneous rumors, should “not let suspicions, any- information ... to one of the relatefs] thing [they] may else that have seen or elements of the case that was decided heard outside of the court influence [their] against party trial,” for a moving new (J.A. 4631). in any way.” decision Cura- (2) 239; Lloyd, 269 F.3d at “the extent of tive every mistake, instructions cannot fix jury’s exposure to the extraneous in- but we do generally presume juries [(3)] formation; the time at which the follow their instructions. United States v. jury information; receives the extraneous Liburd, Cir.2010). 607 F.3d (4) length jury’s of the [ ] deliberations Finally, the sixth heavy factor—the volume (5) verdict; and the structure of the [ the] incriminating weighs evidence—also existence of instructions from the court heavily against finding prejudice. jury only that the should consider evidence presented Government’s case was over the case[,]” Urban, developed in the course of three months and included an (quoting Lloyd, 240-41); at 778 F.3d astonishing Further, 80 witnesses. as the (6) heavy whether there is “a volume Government accurately explains in foot- of incriminating Lloyd, 269 evidenee[.]” brief, note 16 of its opening “Fumo testi- (internal omitted). F.3d at 241 quotation fied at trial many admitted [and] Here, alleged indictment, while the fourth acts and to but asserted they some extent were not weigh (Appellant the first factor criminal----” Br. 16). favor, 44 n. many While they easily physical Fumo’s are overwhelmed facts second, fifth, related to the fraud factors, were therefore and sixth largely undisputed, the active destruction weigh heavily against finding of computer records related to the First, fraud prejudice. substantial while knowl provided particularly potent evidence of edge of Fumo’s earlier conviction had motive, Fumo’s knowledge and intent. potential prejudice, some fact nearly thirty years conviction occurred factors, In light of these and even as- prior, in as well as the fact that it suming that the Government had the bur- *19 overturned, was mitigating are factors. den persuasion, the District Court did Perhaps importantly, most the fact that not abuse its discretion when it found that juror only one exposed to brief Juror exposure 2’s to extraneous informa- summary verbal of the excluded evidence unlikely tion was to have led to substantial from her a compelling prejudice.6 coworkers is consid- argument any expo- entirely unsupported Fumo’s alternative unpersuasive. potentially prejudicial sure to extraneous in- proposition cases Fumo cites for this concern formation constitutes a "structural error” in presented a court that an erroneous definition requires the trial automatic reversal is imposed sentencing would have court
III.
particular
defen-
sentence on
same
Appeal
sentence
of Fumo’s
pro-
the district court
dant for the reasons
defendant, dis
sentencing a
“In
Tomko, 562 F.3d at
(quoting
Id.
vided.”
At
process:
three-step
follow a
trict courts
omitted).
(internal
Here,
568)
quotation
applica
one,
calculates the
the court
step
challenge
not
the Government does
range,
includes
which
ble Guidelines
either
reasonableness
substantive
any sentencing enhance
application
only alleg-
Fumo’s or Arnao’s sentence —it
Wright, 642 F.3d
States v.
ments.” United
procedural
es
error.
Cir.2011)
Tomko,
(3d
(citing
148, 152
standard
“The abuse-of-discretion
Shedrick,
v.
567;
States
F.3d at
United
and sub
procedural
to both our
applies
Cir.2007)).
(3d
“At
292,
n. 5
493 F.3d
inquiries.” Tom
stantive reasonableness
two,
any motions
the court considers
step
ko,
(citing
at 567
Gall v. United
562 F.3d
and,
how
granted,
if
states
departure
for
586,
States,
128 S.Ct.
552 U.S.
calcu
affects the Guidelines
departure
Wise,
(2007);
L.Ed.2d 445
United States
Tomko,
at
(citing
562 F.3d
lation.” Id.
Cir.2008)).
“For
515 F.3d
217-18
567).
three,
considers
the court
step
“At
an
of discretion has oc
example,
abuse
togeth
range
the recommended Guidelines
curred if a district court based its decision
in 18
statutory factors listed
er with the
conclusion
clearly
on a
erroneous factual
3553(a)
ap
§
determines the
U.S.C.
legal
conclusion.” Id. at
or
erroneous
sentence,
vary up
may
propriate
217).
Wise,
at
(citing
567-68
range sug
or downward from
ward
(citing
by the Guidelines.” Id.
gested
dissenting colleague argues
Our
567).
Tomko, 562 F.3d at
of review for the
proper
that the
standard
arrive at a final
District Court’s failure to
review of a criminal sentence
“Our
First,
error because the
guideline range
plain
we
stages.
...
in two
proceeds
object
to this failure
any
error at
sen Government did
procedural
review for
or at the
failing
in its
memoranda
tencing step, including,
example,
(Dissenting
at
sentencing hearing.
Op.
computation
to make
correct
324-26). However,
one,
July
8 sentenc
rely
at
range
step
failing
at
Guidelines
argued the
step ing hearing
at
the Government
appropriаte
departure
bases for
objected
proposed
Fumo’s
two,
merits of and
failing
give meaningful
or
consider
3553(a)
position clear
step
departures.
It also made its
ation to the
factors
(internal
must first “deter
quota
that the District Court
three.” Id.
citations and
omitted).
grounds
depar
there are
procedural
“If there is no
mine whether
tions
and,
so,
many
up
ture
if
how
levels
error,
of our review is for
stage
the second
unreasonableness,
reaching
guideline
...
will down
thus
substantive
and we
final
”
applying]
...
all of
range
before “then
affirm the
no reasonable
sentence unless
preju-
aspects
right,
jury,
different
of that
where
"beyond a reasonable doubt” to the
Louisiana,
275, 113 S.Ct.
presumed
Sullivan v.
508 U.S.
and cannot be rebutted.
dice is
(1993),
judge
and a
would to determine the extent of the A. Loss calculation departure it pronounced when its sentence. notes, colleague parties dispute As our “the Government number of objected could not calculations that went have because the deci- into the District Court’s determination of appeal sion claims on to be error had not the loss attribut 326). able to Fumo’s fraud. (Dissenting Op. Ultimately, even been made.” the Dis trict Court’s decisions resulted in a loss circumstances, Under these including calculation for Fumo which just fell short opportunity object the lack of an to the million, of the threshold increasing $2.5 procedures prior District Court’s to its the offense level. “The appropriate stan sentence, pronouncement of we conclude dard of review of a district court’s decision objec- the Government’s substantive regarding interpretation of the Sen departure requests tions to Fumo’s as well Guidelines, tencing including what consti recitation, Court, as its to the of the three- ‘loss,’ tutes plenary. is Factual findings, step sentencing process preserve its claim however, simply are reviewed for clear appellate review. See United States v. Napier, error.” United States v. 273 F.3d Sevilla, (3d Cir.2008) 541 F.3d 230-31 Cir.2001) (internal citation (defendant’s object failure to “at close of omitted). sentencing” neglect to the district court’s sentencing procedures related to the Pennsylvania 1. The State Senate 3553(a) require plain factors did not er- Overpayment a. employees ror review because defendant raised the Senate sentencing relevance those factors arranged Fumo to have a number of memorandum and at the hear- Senate employees under his control classi- ing, so that require[d] he was “not ... to fied at higher salary grades than they them”). re-raise were entitled to be based on their duties Further, even if agreed we with our qualifications. order to calculate colleague that plain error fraud, standard of the losses attributable to this applied, review we would nevertheless find Government reviewed the human re- that the District Court’s failure to calcu- sources manual to determine the proper guidelines late a final range leaving us employee classification for each based on — unable to procedural review the testimony and sub- about the work they actually stantive bases of the performed sentence —is an error and then calculated the loss to plain, that affects the substantial the Senate as the difference between the rights parties, and that could highest salary “seri- each possibly could have fairness, ously integrity affect the been salary entitled to and the each actual- judicial reputation received, proceedings.” ly United for a approximately total of $1 Vazquez-Lebron, States v. million. At sentencing hearing, *21 310 Although possible that the Govern- of work the em- is dispute type not
did
actually performed or the salaries ment
errors
course of its
ployees
made
Instead,
actually
calculations,
he
they
received.
to think
there
no reason
were
spec-
that the calculations
too
argued
that its
was not a “reasonable esti-
figure
Clerk
loss,
ulative
the Chief
of
because
aby prepon-
mate” of the
established
not
them
Senate could
confirm
and be-
Accordingly, af-
derance of the evidence.
failed to fire or
the Senate had
cause
grounds
reviewing the District Court’s
ter
fact,
after the
reclassify
employees
these
prima
rejecting
the Government’s
facie
original
classifications
implying
amount,
showing
are
of the loss
we
left
justified. Agreeing with
were somehow
with “the definite and firm conviction that
Fumo,
excluded the
the District Court
a mistake has been committed.” United
altogether.
proposed loss
Government’s
(3d
Grier,
States v.
F.3d
(internal
(en banc)
Cir.2007)
quotation
course,
Of
the Government bears
omitted). Further, because the difference
establishing, by
of
a prepon
the burden
place
higher
in the
loss would
Fumo into
evidence,
of the
the amount of
derance
level,
offense
error
was not harmless.
Jimenez,
F.3d
loss. United States v.
Cir.2008).
(3d
However,
although
b. Rubin’s “no-work” contract
persuasion
of
“the burden
remains with
objects
The Government next
Government,
Government
once
Court’s
District
decision
exclude
prima
out a
facie case of the loss
makes
$150,000,
amount,
the loss calculation a
five-
production
the burden of
shifts
provide
year contract awarded
the defendant to
evidence that the
to Arnao’s husband
Rubin,
incomplete
in
per
Government’s evidence is
or
for which he purportedly
In making
accurate.” Id.
a loss calcula
July
formed
sen
no services. At the
tion,
only
court
make
reason
“[t]he
need
tencing
Fumo
hearing,
informed the court
estimate of
able
the loss.” United States
that he
gathered
had
additional evidence
Ali,
Cir.2007)
had,
fact,
demonstrating
Rubin
2B1.1,
(quoting
Application
U.S.S.G.
completed work under
contract.
He
3(C)).
Note
July
submitted the evidence on
13. The
largely
additional material consisted
of
Here,
made
the Government
entries,
credit card bills and calendar
doc
amount,
facie
prima
out a
case of the loss
umenting
people,
that Rubin
met with
had
response
only
and in
Fumo made
the most
but not
those
had
meetings
what
been
showing
“inaccuracy”
minimal
of
in the
about.
argued
The Government
fact,
Government’s calculations.
evidence submitted
Fumo was weak or
really challenges
never
the substance of
irrelevant,
noted
that Fumo’s current
calculations,
the Government’s
instead re
theory
directly
that Rubin had worked
lying
surrounding
on
circumstances to cast
with Fumo and met with
people
his
speculative doubt
Yet it
on them.
is not
testimony
behalf contradicted Rubin’s
that the
surprising
Chief Clerk
the Sen
trial, that the contract
Rubin’s
ate, who had not
reviewed
detail the
Services,
B
R
court ser
company, &
concerning
employee’s
evidence
each
vices. The District Court declined to rule
duties,
position
declined
take a
on the
contract,
on the
loss from
issue of
Rubin’s
accuracy
as to the
stand
Govern
stating
complexity
that “because of the
ment’s calculations. And
Senate’s de
argument
light
loss
de
reclassify
not to
Rubin
cision
certain
the em
submissions,
prop
I
I
ployees involved
fense
felt
could
prompted
could have been
by any
reasoning
erly
sentencing.
manner of
it before
Rather
purposes.
resolve
*22
sentencing,
arriving
I declined to whole and then
at an overall
postpone
than
sen-
(Sealed
184-85).
tence,
App.
Cunningham California,
This
rule on it.”
549 U.S.
270, 300,
856,
was an abuse of discretion.
127 S.Ct.
might delay sentencing. disputed The failure to resolve the loss here meets all three criteria. Under
Fumo cites to United States v. Cannis- (3d three-step jurisprudence, Booker and our traro, Cir.1989), F.2d Further, the error is clear. if the District may proposition for the the court had found that Rubin’s contract was simply to determine a loss refuse whether $150,000,it a loss of would have raised the proposed occurred and therefore exclude a defendant, affecting level of the offense However, calculation. loss from the public’s rights. substantial Cannistraro, See United although dispute there was a Dickerson, States v. ($400,000 over the amount of the loss Cir.2004) (district le- impermissibly court’s million), the district court was not $3.5 “plain nient sentence could constitute er- engaged non-discretionary process “Congress’s impri- ror” because interest offense level calculating Guidelines Rather, soning ‘right’ certain ... offenders is a on the loss. because was based entitled”). Finally, if case, citizenry which the n. pre-Guidelines id. at 1215 may simply disregard disputed loss- exercising court was its broad discretion in courts grounds they are “not con- considering gravity of the offense as a es on the say record that the District Court’s them, pro- on this sidering” the fairness of *23 seriously finding clearly called into was erroneous. We ceedings may be factual on remand the question. Accordingly, affirm the District Court’s re- therefore carefully consider Court should District to duction the loss amount attributable make a determination the evidence and equipment.8 the tools and extent, whether, Rubin’s to and to what property b. The Tasker Street in a loss to the Senate.
contract resulted
sought
to assess
Government
2.
Alliance
Citizens
$574,000 worth of losses for rental income
unnecessary
to the
equipment
improvements
and
a.
and
Tools
Street,
property on Tasker
which Fumo
objects to the
The Government
purchase
induced
Alliance to
and
Citizens
calculation of the losses
District Court’s
furnish,
lavishly
and then used as his Sen-
equipment pur
resulting from tools and
from the
payment
ate office with little
actually
but
by
chased
Citizens Alliance
Senate for rent or maintenance. The Dis-
others,
by
including Fumo.7 The Gov
used
Court, however,
against that
trict
credited
-hundreds, perhaps thou
ernment reviewed
sands,
figure
proper-
state
the fair market value of the
receipts
and credit card
a list of tools
ty,
ultimately
signifi-
ments
order
assemble
in a
resulted
aegis
the
equipment bought
and
under
cant
to Fumo. The
ap-
credit
Government
compared
Citizens Alliance.
It then
this
that
peals
reasoning,
decision and its
Alli
against
inventory
list
the
of Citizens
argues in the
that if Fumo is
alternative
employees
ance and discussed with its
given credit for the fair market value of
any
whether it would ever have made
use
building, the District
should
set
particular
Finally,
items.
it assembled
maintain-
against
acquiring,
the costs of
identifying
equipment
two charts
tools and
ing,
improving
building.
purchased by
Alliance that it be
Citizens
3(E)(i) to
Application Note
Section
lieved were used for the benefit of Fumo
provides
2B1.1 of the Guidelines
that
aides, though it conceded that the
and his
...
by
money
shall be reduced
“[l]oss
[t]he
Fumo,
approximate.
charts were
in testi
returned, and the fair market value of the
fying, reviewed the charts and denied hav
property returned and the services ren
$50,000
ing
roughly
of the
received
worth
dered, by
persons
the defendant or other
$130,000
approximately
equipment
defendant,
acting jointly with the
to the
appears
the charts. The District Court
victim before the offense was detected.”
have
and reduced
credited
assertion
added).
(emphasis
In
The use of the word
by roughly
light
the loss
that amount.
determination,
credibility
signifies
of this
we cannot
“returned”
that for a credit
put
by
7. Fumo concedes that there were
"mi-
that were
in evidence
some
exhibits
Government,
calculating
detailing
nor” arithmetical
errors
the cost of tools that
Alliance,
pin
purchased
by
loss to Citizens
which would
were
and were used
Fumo for
$1,077,943,
$958,080
($93,409.52)
purposes
personal
loss at
rather than
should have
by
calculated
the District
He con-
been added to the loss calculation in full.
Court.
tends, however,
ruling
regard
that these errors were insuffi-
The District Court’s
in this
elim-
are,
They
to affect his offense
findings
jury beyond
cient
level.
inated the
made
however,
significantly
sufficient
affect Arnao's offense
the court
reasonable doubt
IV.A.,
See Section
findings
level.
did not
issue its own factual
until
infra.
sentencing hearings
after the
were over.
doing,
able
Judge
disagrees
so
the Government was not
Garth
the District
clearly
argue
findings were
Court did not err. He
the Court’s
would hold
Government,
evidence introduced
erroneous.
any
must have either re-
eral to
value received
the defendant
because of the
apply,
money
very
property,
purchase
building. They
same
or
turned
would
ap-
that were
provided
have
services
have been
if
or
costs even Citizens Alliance
value,
money,
very
to the
same
or
plied
building beforehand,
had owned the
during
lost or taken
property
even if
it had been
lessee rather than
Radtke,
States v.
fraud. See also United
owner,
space
who
subleased
to Fumo.
(8th Cir.2005)
(noting
essentially
seeks
set the
value
*24
fringe
paid
benefits
to defrauded em-
that
an independent “good” he purportedly se-
by the defendant were “not ...
ployees
cured for
Alliance against
Citizens
the
against
contemplated
sort of credit
loss
the
costs his frauds inflicted on it.9 He offers
guidelines”
they
the
because
were “oth-
by
support
no cases in
of this theory of loss
provided
employee-victims
benefits
to
er
calculation,
which
it
unsurprising, as
directly
do not correlate
with the
allow,
instance,
would
for
an officer of a
third-party
amounts withheld from the
ad-
corporation who embezzled from his em-
the fraud.”
part
(empha-
ministrator as
ployer to
against
claim credits
the loss
original)).
insis
caused
the embezzlement for overall
company’s
increases in the
assets
Here,
under
argues
the Government
that the
Accordingly,
his watch.
we conclude that
money or
the
value taken was
maintenance
the District Court’s decision to credit the
improvement
as well as
costs
the rent
value of the
property
Tasker Street
charged by
Fumo
was not
Citizens
against the
resulting
losses
from
property.
Alliance as owner
Citizen
rent,
any
improvements,
Alliance’s lost
pay
not
of the
did
refund
mainte-
nance,
himself,
improvements, or lost
maintenance costs was
abuse of
rent
discre-
tion.
“money
would have
been
returned”
3(E).
Application
under
Note
Nor did he
painting
c. The Gazela
loses,
to
render services related
these
such
assisting with
maintenance or im-
Fumo induced Citizens Alliance to com-
The
provements himself.
Government did
Gazela,
mission a
painting of
a historic
argue
not
that the loss
the fraud
$150,000.
ship, from a local
for
painter
As
spent
included
funds
Citizens Alli-
investigation
the Government’s
and media
Thus,
property.
on purchasing
ance
reports surfaced, Fumo directed Citizens
neither that
itself
property
because
nor its
ISM,
painting
Alliance to donate the
to the
monetary
alleged
value were ever
to have
rather
it in
than retain
his office. The
part
been taken as
of the fraud
the first Government
argues
entire
they
place,
could not be “returned” to Citi-
loss,
amount should count as
because the
3(E)
Application
Alliance under
Note
zens
painting was otherwise unwanted
against
and credited
the losses.
prints
and its
in storage.
are now
District
testimony
Court credited the
of an
explain
To
in the
the error
District
appraiser as to the value of the painting
technical
ruling
way,
Court’s
a less
maintenance,
prints
and the
Government
improvements, and rental in-
does
appear
to
offered a competing
come
Government identified as losses
have
independent
conceptually
appraisal.
were
and collat-
formal
Accordingly, the Dis-
Further,
appropriate
grant
experienced by
even if it were
Alliance
Citizens
due to the
credit
value
building
for the fair market
of the build-
only
value of the
can
be calculated
ing,
necessary
it would
to set off the
be
costs
subtracting
paid
acquire
after
what it
purchase
associated with the
and mainte-
building
place.
in the first
building. Obviously, any gain
nance
(e.g., for the defendant’s
of that benefit
is entitled to
finding
factual
trict Court’s
(b)(8)(A) ap-
deference,
personal gain).
and we will not dis-
Subsection
significant
following:
example,
it.10
plies,
turb
Sentencing enhancements
B.
(iii)
defendant, chief of a local fire
A
objects
The Government
department, who conducted
impose a
2-level
District Court’s refusal
representing
pur-
fundraiser
acting on
on Fumo for
behalf
enhancement
procure
pose of the fundraiser was
organization and
2-level
charitable
engine
for a
fire
funds
new
sufficient
sophisticated
use
enhancement
fact,
when,
intended to
defendant
ap
review a district court’s
means. “We
of the funds for the defen-
divert some
sentencing enhancements for
plication of
benefit.
personal
dant’s
States v.
of discretion.” United
abuse
7(B).
2B1.1, Application
Note
U.S.S.G.
*25
(3d Cir.2010).
Robinson,
that Fumo’s be-
The Government contends
into
be-
squarely
guideline
havior
this
fits
Acting
1.
on behalf of a charitable or-
from
acquired
cause Fumo
funds
PECO
ganization
while intending
Alliance
for Citizens
that the
argues
The Government
use.
divert
funds
his own
Fumo
those
a 2-
failing
apply
erred in
District Court
argued
agreed
the District
and
Court
misrepre
for Fumo’s
level enhancement
had not shown Fumo’s
Government
acting
that he
on behalf of
sentation
was
time
intent to divert the funds
he
Alliance,
organization.
Citizens
charitable
However,
obtained them
PECO.
Sentencing
state: “If the
The
Guidelines
out
that Fumo ac-
points
Government
(A) misrepresentation
involved
offense
portion
million—
quired a substantial
$10
acting on behalf of
that the defendant was
—
in
of the
funds
well after
PECO
he
charitable, educational, religious,
polit
or
began using Citizens Alliance’s funds for
government agency
or a
organization,
ical
political
his own
benefits.
In-
personal
by 2 levels.”
...
increase
U.S.S.G.
deed,
2B1.1(b)(8)(A).
credulity
strains all
to believe that
§
application
*26
create these sham corporations, with
wer,
(7th Cir.2011) (in-
640 F.3d
false corporate addresses and purely tit-
omitted);
quotation
ternal
see also United
ular officers.
Frank,
(8th
v.
States
354 F.3d
Cir.2004) (enhancement
(J.A. 507).
appropriate
entities,
where
The use of these sham
defendants
other
“use[d]
individuals and which were created to conceal the flow of
businesses to conduct business on
defen-
[a
associates,
funds to Fumo and his
strongly
behalf,” as well as a
entity”);
dant’s]
“shell
resembles the conduct
in Appli-
described
Cianci,
United States v.
8(B)
cation Note
as well as conduct that
(3d Cir.1998)
(finding
“sophisticated
this Court and others have found to fall
means”
appropriate
enhancement
where within
sophisticated
the
guideline.
means
defendant’s crime “involved the use of a
too,
Here
we conclude that
the District
corporation
shell
falsified docu-
[and]
Court abused its discretion in refusing to
ments”).
apply the enhancement.
Here,
rejected
the District Court
the
guidelines
C. Calculation of the final
request
Government’s
a sophisticated
range
means enhancement for the “reasons sub-
argues
Government next
stantially
upon
based
arguments.”
defense
that the District Court made a fundamen
(Sealed
184).
App.
argued
Fumo had
that
procedural
tal
error in the second step of
the conduct here was not “especially com-
sentencing process when,
the
after grant
intricate,
plex or
relative to other federal
ing
departure
Fumo a
upon
based
his ex
criminal
fraud cases” under U.S.S.G.
traordinary
works,
public
it did not calcu
2Bl.l(b)(9)(C).
(J.A. 715)
§
(emphasis in
new,
late a
guidelines
final
range. As we
original). Yet Fumo
Alli-
induced Citizens
repeatedly
have
made clear “[c]ourts must
ance to form for-profit
in
subsidiaries
or-
continue to calculate a defendant’s
permit
der to
Guide
purchases on his behalf
lines sentence precisely
they
without the
required
disclosures
for such
would have
[;]
evidence,
so,
entities. According to the
before Booker
doing
they
[i]n
these
must
own,
subsidiaries did no business of their
formally rule on the motions of both par-
an-
ever
they
tion on whether
court had
on the
whether
and state
record
ties
guideline
how that
a final
offense level.
departure
a
nounced
granting
are
calcula-
affects
Guidelines
departure
35(a) motion,
on the
ruling
Rule
Gunter,
(emphasis
462 F.3d at
tion.”
correctly
government
“The
held:
added) (internal quotations and citations
it was
the court announced
states
Lofink,
omitted);
see also United States
Thereafter,
departure.
a
granting
(3d Cir.2009).
232, 238
F.3d
level
never announced
guideline
court
initially sought
departure
based
Fumo
fact,
and,
departed,
it
never
to which
(i.e., his
“good
and his
works”
his health
on
consulting
the sentence it did
reached
service).
ulti-
The District Court
chart.”
any specific
guideline
level
him a
reduction
mately
significant
awarded
1653).
(J.A.
Then, an amendment to
range of
guidelines sentencing
ruling,
judgment accompanying
months that it had calculated
121 to 151
stated, “I never
nor have
court
announced
ulti-
step one. Whether this reduction
level I
guideline
I
determined what
ever
the Guidelines
mately
departure
under
(Sealed
185-86).
departed.”
App.
had
3553(a)
is itself a
a variance under
in more detail
contested issue discussed
attempts
argue
that the Court
Fumo
However, at
the time
sentence
below.
adequately completed step
simply
two
courtroom,
ap-
was announced
it did—
sentencing Fumo
the sentence
At the
it was a
peared
departure.
i.e.,
by a
reducing
Fumo’s sentence
hearing, the Court
July
14 final
what the
implies
certain number months
guide-
stated: “I have considered what
However,
departure
was.
degree
make a
here and I did
lines have said
only case that
cites to for the
are, but
finding
guidelines
as to what the
departure
proposition
announcing
going
that I’m
finding
I’ve also added
months
than in terms of
terms of
rather
*27
(J.A. 1623). Never-
depart from them.”
ranges
and
guidelines
offense levels
theless,
actually
the District
never
Torres,
States v.
In his Rule history of the de- enced with criminal tion, to have deem its seeking the Court fendant, result now in a recommended departure, a a variance instead of sentence incarceration, range of months and the sentencing Fumo noted that a “[w]hen un- court must then exercise its discretion opposed a true grants ‘departure’ [as court 3553(a) § der determine where —wheth- variance,] depar- it must to a state how range or outside that er inside calculation. ture affects Guidelines —the fall. one the step sentence should If after such a state- Court[] This to make fail[ed] added) simply decides a final sentence (J.A. 1629) court on (emphasis ment....” the second (internal omitted). separately completing without oppos- quotation While (i.e., departures change the Guidelines motion, the noted ing that Government (i.e., range) steps and third variances initially had established that the court sentence), final (i.e., it becomes determine “baseline” before the resolution appellate for an court to recon- departure good impossible motion for based works) there- logic reasoning, and although offense level later struct of 33— note no review the As we changed carefully posi- to 32—but took fore to sentence. (internal below, omitted). worry precisely quotation this is no idle Under such what occurred here. circumstances, “we will remand for resen- tencing unless we conclude on the record result,
As a to the extent the District as a whole ... that the error did not affect sentencing reduction a depar- Court’s the district court’s selection of the sen- ture rather than a variance under (internal imposed.” tence quotation Id. 3553(a), § it by failing erred to calculate a omitted). Therefore, the Government guideline final guidelines offense level and first, must establish impossible that it is sentencing range. determine with confidence from the record D. Articulation of the basis for the be- granted whether the District Court a de- low-guidelines sentence related to parture or a variance based on Fumo’s public service works; second, good the error argues
The Government affected the District Court’s selection of its District Court further erred failing to sentence. clearly articulate granting whether was July hearing, Before the Fumo moved variance, departure Fumo a or a and that a departure based good on both works requires this error remand. There are ill July health. In its ruling, types diverge “two of sentence that from request District Court denied the for a original range.... Guidelines A tradi departure health, based on ill but stated sentencing ‘departure’ diverges tional ... that “a decision on a departure based upon originally range from the calculated ‘for good works will July be reserved until ... contemplated by reasons the Guidelines (J.A. 1566). 2009.” At the July 14 contrast, themselves.’ a ‘variance’ di hearing, initially the Court noted that “I Guidelines,
verges ... including from the deny regards did not good to the any departures, based on an exercise of (J.A. 1568). works.” Later on 3553(a).” the court’s discretion under announced, hearing, court “You Floyd, United States v. worked hard for the ... and I’m (3d Cir.2007) (internal omitted). citations going therefore grant departure This distinction is more than mere formali (J.A. 1622). guidelines.” Finally, the ty. “Although departure aor variance stated, court “I finding did make a as to could, end, in the lead to the same outcome guidelines are, what the but I’ve also add- ... important it is courts to *28 finding ed a that I’m going depart to from distinguish two, departures between the as (J.A. 1623). them.” subject are to requirements different than variances.” Id. “[District courts should Shortly after the hearing, response in to be careful to articulate whether a sentence 35(a) Fumo’s Rule motion to “correct” the departure is a or a variance from an advi sentence to sentencing establish that the sory Guidelines range.” United States v. reduction was a variance rather than a Nation, (3d Vampire 451 F.3d departure, the District Court an issued Cir.2006). order stating government that “[t]he cor- rectly states that the court announced it a district sentencing
When court’s deci- Thereafter, granting departure. was sion “leaves us unable to determine wheth- court never guideline enunciated the level er the court grant intended to ... [a] and, variance,” departed, fact, to which it departure or a never the court has not, must, as it reached the sentence it “adequately explained] by consulting did any specific chosen sentence.” level on guideline United States v. chart.” Brown, (3d Cir.2009) (J.A. 1653). 578 F.3d The District at- Court then months the precise could not judgment, to the determine amendment tached an guide- from the vary extent that I would following passage: which included the (Sealed 186). language This App. lines.” I whether there next determined “vary” interchangeably “depart” uses departure guide- from the should be a conflated and admits that the Court sentencing announced at lines steps and third combined the second that there should be based hearing The District sentencing process. Court extraordinary good my works finding ... all other did not need to “consider I not what did announce defendant. 3553(a) sentencing under before factors” level the fell specific guideline offense level, guideline nor departing a different into; say, precise number that is to to do so. appropriate I was depart which intended to levels until I considered all other sen- because responded have previously We factors, I could determine tencing that the District Court’s criticism distinc- precise the extent that I would months departures and variances tion between vary guidelines. from the by noting “elevates form over substance” counsel of Having advised the offense context, it is sentencing firmly that “in the my I found and intent to de- level that procedure established that form —i.e. —and downward, part proceeded I then high importance.” substance are both of respective hear from counsel their anal- Wright, 642 at 154. have a F.3d “We yses appropriate sentence of what responsibility that a substantive- ‘to ensure should be. imposed ly has been reasоnable sentence ” perhaps I procedure was Id. procedurally way.’ (empha- followed in a fair more akin to that associated with added) v. (quoting sis United States Levin- departure a downward variance than (3d Cir.2008)). son, F.3d I announced nor have I because never Moreover, may difference here be guideline ever to what level determined formality, given than more a mere Ultimately, I departed. argu- had scrutiny different and standards review it was ment over which elevates form apply departures opposed we vari- over substance. places particular, precedent our ances. (Sealed 185-86) added). (emphasis App. courts’ certain limitations on abilities judgment, the amendment to the Without in the depart good based on works case of we might have been satisfied that Serafini, public officials. United States departing varying. rather Cir.2000) than (holding However, the statement that document public performs “if a servant civic and procedure per- I followed was “[t]he daily of his part charitable work as func- haps more akin to associated with tions, these not be considered in his should departure” indi- variance than a downward expect such we work because cates that the District Court was not itself our but that “assis- servants” *29 departing vary- certain it or whether was tance, money, time and individuals ing. organizations” and local would not ordinarily a defendant’s work as part be of by is reinforced the Dis-
This conclusion
public
may properly
be consid-
servant
trict
earlier statement in the same
Court’s
ered). While we need not decide whether
filing
specif-
“I
not announce
did
what
good works could be
into;
departure
based on
guideline
ic
level the offense fell
here,
that a
undeniable
district
by
applied
precise
is ...
number of levels
imposing
court has more discretion
depart
which I
until I
intended
because
factors,
variance,
the substance
sen-
I
where
sentencing
considered all other
subject
In
only
setting
tence is
to substantive reason-
forth how a court
respond
party’s
review.
should
to a
request
ableness
for a
variance,
Supreme
Court has held that
uncertainty
of the substantial
Because
sentencing judge should set
“[t]he
forth
the District
re-
regarding whether
Court’s
enough
satisfy
appellate
court that
variance,
departure
duction was a
he has
parties’ arguments
considered the
very
because that distinction could
well
exercising
and has
reasoned basis for
his
practical
have
effects on Fumo’s ultimate
legal decisionmaking authority.”
own
Rita
sentence,
conclusively say
we
based
cannot
United, States,
338, 356,
v.
U.S.
on the
as a whole that “the error
record
(2007).
S.Ct.
321 a punitive component VWPA has that prejudgment interest that makes raising” penalty eyes it a criminal in the penalties. criminal makes inapplicable to Amendment, that does not modi- Sixth in context of restitution Yet in fy ruling our Davis that such restitution VWPA, money there áre dam under important compensatory serves an also Fur compensated. to be ages and losses VWPA, purpose permits under the ther, widely agreed, there is have as courts in prejudgment courts to award interest “carefully estimated to seek authority of the vic- recoup order to the time-value id., for victims under money”, sum[s] we reaffirm our Accordingly, tim’s loss. VWPA, ... is to en “purpose as its prejudgment in Davis that interest holding degree possi wrongdoers, sure of restitution is available orders under ble, make their victims whole.” United (5th the VWPA and MVRA. Rochester, 971, 898 F.2d 983 States v. Cir.1990) States v. Hu (quoting United argues Fumo also the Gov (5th Cir.1989) 1256, 1261 877 F.2d
ghey,
ernment,
prejudgment
when
obtained
cases),
grounds,
rev’d on other
(collecting
on the
after the date of
interest
restitution
1979,
411,
109 L.Ed.2d
495
110 S.Ct.
U.S.
sentencing,
give
proper
did not
10
(1990)).
And in order to make victim
408
days’ notice
it would need more time
whole,
may
interest
be neces
prejudgment
the amount of loss
to ascertain
under 18
recoup
injured party
sary to “allow
3664(d)(5).
3664(d)(5)
Section
U.S.C.
A.
of his loss.” William
the time-value
reads:
138, 145
646 F.3d
Haughey,
v.
Graham Co.
If the victim’s losses are not ascertain-
(3d Cir.2011).
circuits have reached
Other
days prior
the date that is 10
able
reached in
conclusion that we
the same
sentencing,
attorney
for the Govern-
Davis,
interest is
finding
prejudgment
probation
ment or the
officer shall so
under the
orders of restitution
available on
court,
and the court shall set
inform
States v.
and MVRA. See United
VWPA
a date for the final determination of the
699,
Cir.2011);
Qurashi,
F.3d
704
634
losses,
days
not to exceed 90
victim’s
1240,
Huff,
v.
609 F.3d
United States
sentencing.
after
(11th Cir.2010); United States v.
n. 4
(4th
language
face this
does seem to
Cir.1994);
On its
415, 420
Hoyle, 33 F.3d
pro-
that the Government should
suggest
Patty, 992 F.2d
States v.
United
(10th Cir.1993);
interest calculations be-
prejudgment
v. vide
United States
1049-50
(7th Cir.1993);
give
days’
notice that
fore
Simpson, 8 F.3d
Smith,
present
make and
v.
it will need more time to
United States
Rochester,
(9th Cir.1991);
However,
non-enforceable deadline for district downward variance courts. We will therefore affirm the order restitution, including prejudgment inter- Although we vacate and remand est. Arnao’s sentence for consideration of the fraud, proper loss amount from the we also
IV.
argument
address
Government’s
we should vacate Arnao’s sentence because
Appeal of Arnao’s sentence
the District Court failed
adequately
ex
A. Loss calculation
plain its
granting
reasons for
Arnao a sub
that,
argues
The Government
did stantial downward variance from the advi
Fumo,
the District Court erred in cal-
sory guideline range.
regard
With
culating the loss that Arnao’s fraud caused
explanation
whether a court’s
aof
sentence
to Citizens Alliance.
demonstrates that it’ meaningfully consid
3553(a) factors,
ered the
joins
we have
Arnao
in Fumo’s
stated
arguments with
respect
fraud,
“[b]ecause
the fact-bound nature of
the Citizens Alliance
decision,
which is
each
only portion
there is no uni
Fumo’s fraud-
ulent
form
determining
conduct which she is
threshold for
whether
implicated.
The District
court
supplied
explanation
Court’s calculations of those
has
sufficient
losses and our review of them affect her
sentence.” United States v.
Mercеd,
Cir.2010)
sentence as
agrees
well. Arnao
(internal
analysis
omitted).
Fumo’s
of the Citizens Alliance
quotation
For some
loss,
cases,
sufficient,
calculated the
loss
a brief statement
bewill
$1,077,943,
$958,080
rather than the
calcu- while for others a
explana
more extensive
addition,
lated
the District Court.
reasoning may
tion of the court’s
be need
above,
as explained
However,
the District Court
ed.
greater
magni-
Id.
joins
arguments
Arnao
op-
also
Fumo's
sophisti-
ance fraud did not involve the use of
posing
means,
the Government’s
contention
finding
cated
the same
of abuse of
failing
apply
District Court erred in
a 2-
applies
discretion
in Arnao’s sentence. Ac-
sophisticated
level
means enhancement with
(b)(9)(C)
cordingly, the 2B 1.1
en-
additional
regard to the Citizens Alliance fraud. Be-
applies
of 2
hancement
levels
in the Guideline
cause we find that the District Court abused
calculation for Arnao as well as Fumo.
ruling
its discretion in
that the Citizens Alli-
*33
variance,
dressing statutory sentencing arguments,
greater
a court's
tude of
that
“is
emphasized
to describe its
and have
review
nec
the district court
burden
essarily
at 215 (quoting
flexible.” Id.
Aus
reasoning.
Id. at 216.
328).
bum, 502 F.3d at
The Government
Here,
the Government’s claims
despite
examples
cites three
of sentences that we
the District Court did
contrary,
to the
grounds
procedural
have overturned on
statutory factors and
the relevant
consider
217-20,
unreasonableness:
Id. at
United
to it at sentenc-
presented
arguments
(3d
Lychock,
578 F.3d
States
part,
the most
the Government’s
ing. For
Levinson,
Cir.2009), and
Y. reveals the District did indeed advisory recalculate the range Guidelines reasons, affirm foregoing For we granting after the downward departure.1 conviction, Fumo’s vacate the sentences of Second, majority employs I believe the Arnao, Fumo and and remand for both incorrect standard review this issue. proceedings further not inconsistent with opinion.
I. *34 NYGAARD, Judge, concurring Circuit A. part dissenting part. in in and United States v. Quoting opinion our in
I
agree
majority
join
with the
and
them
Tomko,
majority
in
states
affirming
“[t]he
Fumo and Arnao’s convictions.
do, however,
I
abuse-of-discretion
specific points
applies
have two
standard
disagreement
procedural
both our
cause me to dissent.
and substantive rea-
First,
majority today
558,
inquiries.”
vacates the sen-
sonableness
562 F.3d
567
(3d Cir.2009)
banc)
(en
tencing
experienced
decision of an
District
(citing Gall v. Unit-
alia,
States,
inter
claim,
ed
judge
they
38, 51,
586,
Court
because
552 U.S.
128 S.Ct.
(2007)).
advisory
he failed to recalculate the
Guide-
325
(3d
error,
plain
appealing party
lish
must
582 F.3d
Vazquez-Lebron,
(1)
(2)
made,
Cir.2009)
pro-
show that an error
(holding that failure to raise
(3)
(i.e.,
obvious),
plain
re-
clear or
affects
the district court
before
cedural error
review);
rights. United States v. Less-
United
substantial
plain
error
sulted
(3d Cir.2007).
ner,
Watson,
F.3d
Even
States
Cir.2007) (“[b]еeause
three-part
if
show-
appellant
did
an
makes
defendant]
[the
may
court
ing,
appellate
exercise its
ground
on this
object
to this sentence
only
to correct the error
if it
hearing, we review discretion
during
fairness,
“seriously
integrity
affects the
plain
judgment
the District Court’s
error.”).
judicial proceedings.”
Indeed,
question
public reputation
there was no
Olano,
(quoting
Id.
United States v.
preserved its
appellant
Tomko that
725, 732, 113 S.Ct.
123 L.Ed.2d
review:
U.S.
challenge
“[a]t
to the issue under
(1993)).
sentencing proceeding,
the Govern-
*35
asserted, directly in
exhaustively
ment
Supreme
specifically
The
Court has
held
Court,
proba-
that a
front of the District
unpre
courts can review
appellate
that
adversely affect
tionary
would
sentence
only.
plain
served claims for
error
United
The Government that it chal- contends ways, arguing have it both for plain error lenged the District to un- Court’s failure object review when defendant fails to a post-departure dertake recalculation in slips up. and abuse of discretion when it sentencing its at the memoranda and sen- Although employ I would tencing plain error re- hearing. Opening Government’s view, my majority at 4. I will meet challenge colleagues Brief There is no such they the record. Neither in where for sentencing its own stand review this issue response memoranda nor its to Fumo’s an abuse of discretion. (3d (en banc)). majority's Cir.2007)
3. The
reliance on our decision in
F.3d
n. 11
Sevilla,
readily distinguishable
United States
329
Second,
advisory
to recalculate
process.
failure
Fumo’s
ily hyper-technical
range
announcing
the sen-
it would
Buckwalter did recalculate
Guidelines
after
Judge
tencing range post-departure.
senator
grant
depar-
the former state
a
no
Buck-
Judge
ture.
I find
such error.
Gunter,
v.
462 F.3d
States
United
advisory range,
waiter did recalculate the
(3d Cir.2006),
established a
247
we
albeit in terms of months
than lev-
rather
procedure for
relatively straightforward
advisory
range
els.
The
Guidelines
sentencing
to follow in
a
Courts
District
to be 121 to 151
He
recalculated
months.
First,
post -Booker.
criminal defendant
range, thereby
step
adopted
satisfying
a
are to calculate
defen-
courts
district
two,
range
analysis.
step
one of the
At
pre-
Guidelines
Gunter
dant’s
motions, announcing
cisely
they
pr
departure
as
would have
e-Booker. Id.
he
ruled
Second,
courts
instructed to
departure
district
were
a
to Fumo for his
downward
any
on the rec-
rule on
motions
state
good
denying
§
under
5H1.11 and
works
a
they
depar-
were granting
ord whether
de-
requested upward
Government’s
and,
so,
departure
if
how such a
af-
ture
Judge
parture.
Buckwalter then reviewed
A
Guidelines calculation.
fects
initial
3553(a)
§
against
factors and decided
also
into
court should
take
account
district
variances,
any
step
satisfying
three. He
law,
case
continues
pr
our
e-Booker
fifty-five
then announced a sentence of
Third
advisory force.
Id.
to have
months, revealing sixty-six
depar-
month
finally,
required
courts are
exer-
district
ture.
considering
cise their discretion
majority
recalculation the
misses is
3553(a)
factors in set-
relevant U.S.C.
easily
sixty-six
departure
found—a
sentences, regardless of
ting their
whether
months from
121 month bottom of
original
calculation. Id.
it varies from
left
advisory
range
Guidelines
Although
requires
district
Gunter
fifty-five
month sentence. It was
range,
court
to calculate
Guidelines
procedurally unreasonable for the District
range
only
starting point
“a
is
depar
Court to determine the extent of its
sentencing analy-
initial benchmark”
ture in
of months
of levels.
terms
instead
Grober,
v.
624 F.3d
sis. United States
Torres,
F.3d 138
See
States v.
United
Cir.2010)
(citing
United
Gall
(3d Cir.2001). My colleagues try to brush
(“As
States,
at
U.S.
128 S.Ct.
Maj.
as a
case.”
“pre-Booker
Torres aside
and to secure na-
matter of administration
Op.
they
This
cannot do. Torres
at 316.
consistency,
Guidelines should
tionwide
-Booker,
vitality, post
an adviso
retains
initial
starting point
and the
bench-
be
require district
ry decision which we
mark.”)).
I
no
that a
requirement
see
Gunter,
at
to consult.
courts
See
court,
concluding
after
a de-
district
that,
(noting
first and sec
Gunter's
warranted,
and spec-
recalculate
parture
step,
pr
ond
our
e-Booker case law is still
adjusted sentencing range.
a new
ify
*39
considered,
force.);
given
advisory
its
be
only
judge
a district
requires that
Gunter
308, 312,
v. Floyd, 499 F.3d
United States
departure
how the
“affects the
indicate
(3d Cir.2007) (citing
n. 6
Torres for the
Gunter, 462 F.3d
calculation.”
Guidelines
§a
5K1.1 de
factors to be considered
indicating
247. A
whether the
at
statement
parture post-Booker);
Vazquez-
see also
go
or below the
departure would
above
Lebron,
million juror verdict because a used Rebooting Way Courts Deal with Ju- Twitter to updates send during the Legal Misconduct, ror 24 Geo. J. Ethics “Oh, trial. post One stated and no- (2011). body buy mojo Stoam. It’s bad course, jurors Of doing independent re- they’ll probably cease to exist now search improperly commenting on a and/or that their wallet is 12m lighter.”6 phenomena. case are not new The Inter- * In Maryland, Mayor Baltimore Sheila sites, net and social networking however, sought Dixon a mistrial in her embez- simply have quicker made it and easier to because, zlement trial while the trial engage privately juror misconduct, more on, going jurors five of the be- compromise the secrecy of their delibera- came “Facebook friends” and chatted tions, and abase sanctity of the deci- site, on the social networking despite sion-making process. As we have seen in Judge’s instructions not to com- case, jurors can use services like Face- municate with each other outside of book and Twitter to broadcast a virtual jury room. attorneys Dixon’s ar- play-by-play jury’s of a deliberations. gued that these “Facebook friends” course, Technology, of will continue to clique became a jury altered the evolve and courts creatively develop must dynamic.7 * ways to deal with these issues. In addi- In the United Kingdom, a case was tion to the endorsement majority opin- juror
thrown out because a sitting on gives ion recently proposed jury model a criminal matter wrote on her Face- instructions, I encourage would district page book that she was uncertain of go courts to further. We must first edu- guilt defendant’s or innocence and jurors cate that their extra-curial use of poll created a for her friends to vote.8 and, social media generally, more In- examples type of this of behavior are ternet, damages trial process and that legion. only jurors Not are tweeting, but their postings on social media sites could they have been conducting factual research mistrial, result in a inflicting additional online, looking up legal definitions, investi- costs and parties burdens on the specifical- gating likely prison sentences for a crimi- ly, judicial and the system generally. defendant, nal I visiting scenes of crimes via suggest images, satellite district courts blogging specifically about their own experiences jurors caution against accessing sometimes even reaching the Inter- parties out to and witnesses net to through issues, “Fa- do research any concepts cebook friend” requests. See David P. presented trial, evidence in the or to Loth, 6. See Renee by Google, Mistrial Boston http://mddailyrecord.com/2009/12/02/ able at Globe, 6, 2009, A15, Nov. available at despite-judgeS%ors-warning-dixon-jurors- http://www.boston.com/bostonglobe/editoriaL (last August visited went-on-facebook/ opinion/oped/articles/2009/ll/06/mistrial_by_ 2011). google/ (moving for a mistrial and reversal of judgment $12 million juror's based aon Khan, 8.Urmee Juror Dismissed From Trial "oh, posting stating: Twitter nobody buy Using Help After Facebook to a Make Deci- mojo Stoam. Its they'll proba- [sic] bad sion, 24, 2008, Telegraph.co.uk, http:// Nov. [sic], bly cease to Exist now that their wallet www.telegraph.co.ulc/news/newstopics/ (last lighter.”) 2011). is 12m August visited lawreporls/3510926/Juror-dismissed-from-a- trial-after-using-Facebook-to-help-make-a- Kearny, Despite Brendan Warning, Jurors (last 1, 2011). August decision.html visited (2009), Dixon Jurors Went on Facebook avail- *42 imposed by firm or on the case under the sentences District post seek comments Court. review.
Indeed, a I can envision situation where upon be judge might district called
a inappropriate Internet jurors
sanction networking postings or on social
research integrity
sites that threaten trial. sanctions are not unheard of: Such HIGGS, Carien Uriel AKA Cardel recently juror a fined $250.00 Higgs, Dayes, AKA Cordell five-page essay write a on the ordered to Petitioner judge by Michigan Amendment Sixth on posting biased comments about case Cook, Dis- Facebook. Jameson VIDEO: ATTORNEY GENERAL OF THE Essay missed Ordered Write Juror STATES, UNITED Amendment, Daily Tribune About Sixth Respondent. 2, 2010, Review, available at September No. 09-3128. http://www.dailytribune.com/articles/2010/ 09/02/news/doc4e806a7b7e451383425678.txt Appeals, United States Court of 2011). (last July The threat of visited Third Circuit. jurors fining holding them either Pursuant to Third to Internet miscon- Submitted Circuit contempt of court due 34.1(a) May 24, LAR necessary 2011. may become to deter duct judicial convey message that Aug. Filed 2011. system such Fi- cannot tolerate behavior. Sept. As Amended nally, responsibili- Bar some also bears dire, ty. During attorneys voir should
routinely question jurors their Internet
usage ju-A networking and social habits. potential
ror’s Internet activities have the defendant, prejudice against result expаnd must the voir dire counsel inquiries into
questioning include online
activity.
Facebook, Twitter, and other Internet
communication sites are boon to law used, Improperly
and the courts. howev-
er, they could do real harm. Problems jurors’ use continued of these sites during
and others their service must be
anticipated and deterred.
III. conclusion, I would affirm Fumo’s I
and Arnao’s convictions. would also af- The notes used guideline applies repeatedly clear that Citizens Alliance make it raising purposes, individual to be purports personal political where an funds for charity intending for a while to di funds his intent do so at then withdrew all or the funds for another vert some time million from he obtained $10 purpose. PECO, regained shortly intent then (b)(8)(A) applies any Subsection thereafter as he continued to use Citizens represented in which case the defendant his Alliance funds for own benefit. This acting to that the defendant was obtain Fumo’s to divert evidence of intent of a edu- a benefit behalf charitable overwhelming, the District funds was cational, religious, political organiza- or apply enhance- Court’s refusal a 2-level tion, government agency (regard- or ment was an abuse discretion. actually whether less of the defendant sophisticated 2. means Use of organization associated with the or argues The next when, fact, Government government agency) apply- Court erred in not part divert all or the District defendant intended to prints be included in the loss cal- Judge disagrees Garth the District should did not err. He would hold that culation. ($150,000), painting cost of the Gazela ing a 2-level enhancement for the use of and at least some of their directors were sophisticated Sentencing means. “recruited” being asked sign docu- (C) “If ... Guidelines state: the offense significance ments the of which they did means, sophisticated otherwise involved in- not understand. These subsidiaries leased crease levels.” U.S.S.G. cars for Fumo paid at least politi- one 2Bl.l(b)(9)(C). § the explanatory As note cal consultant for work on a campaign “ 8(B) amplifies, ‘[sophisticated means’ Fumo political had a interest in. In its especially complex especially means or in- memorandum and order denying Fumo’s tricate pertaining offense conduct to the post-trial motion acquittal, the District execution or concealment of an offense.... Court itself characterized the entities as: hiding Conduct such as assets or transac- nothing more than sham corporations tions, both, through the use offictitious designed to hide the activities of Citi- entities, shells, corporate or offshore finan- zens Alliance that were not conformi- ordinarily cial accounts also indicates so- ty 501(c)(3) with its status as a corpora- 2B1.1, phisticated Ap- means.” U.S.S.G. tion, such purchase as the of the cars for 8(B) added). plication (emphasis Note personal use of Fumo and his staff “Application adjustment is proper In a March 2000 memorandum from when the conduct shows a greater level of Fumo, Arnao to Arnao revealed that the planning typical or concealment than a two working were conjunction close fraud of its kind.” United States Land-