United States v. Michael Devegter ( 2008 )

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
January 2, 2008
No. 06-15692 THOMAS K. KAHN
________________________ CLERK
D.C. Docket No. 97-00508-CR-WBH-1
UNITED STATES OF AMERICA,
Plaintiff–Appellant,
versus
MICHAEL DEVEGTER,
RICHARD POIRIER, JR.,
Defendants–Appellees.
________________________
Appeal from the United States District Court
for the Northern District of Georgia
_________________________
(January 2, 2008)
Before CARNES, BARKETT, Circuit Judges, and COHN,* District Judge.
*
The Honorable James I. Cohn, United States District Judge for the Southern District of
Florida, sitting by designation.
PER CURIAM:
Michael deVegter and Richard Poirier, Jr. were convicted of wire fraud and
conspiracy to defraud Fulton County, Georgia in violation of 18 U.S.C. §§ 371,
1343, and 1346. The government now appeals for the third time the sentences
imposed on deVegter and Poirier.1 The government argues that the district court
erred in imposing a custodial sentence of thirteen months on deVegter and of seven
months on Poirier given that the Guidelines range for their offenses is forty-one to
fifty-one months. Specifically, the government argues that the reassessment of the
defendants’ Guidelines range, as well as the downward variances, violated the
“law-of-the-case doctrine” and the “mandate rule,” and, furthermore, resulted in
unreasonably low sentences.
With respect to the law-of-the-case doctrine and the mandate rule, the
government contends that the district court ignored our previous holding in this
case when it decided, after an evidentiary hearing, that certain bonus payments of
Lazard Freres & Co. were direct costs to be subtracted from the net improper
benefit used in sentencing the defendants under § 2B4.1 of the Guidelines.
U.S.S.G. § 2B4.1(b)(1) (2000). Previously, we adopted the Fifth Circuit’s
approach to calculating the net improper benefit, “which subtracts direct costs, but
1
We considered the government’s previous two appeals in United States v. Poirier, 321
F.3d 1024 (11th Cir. 2003), and United States v. deVegter, 439 F.3d 1299 (11th Cir. 2006).
2
not indirect costs, from profits to determine the net improper benefit.” United
States v. deVegter, 439 F.3d 1299, 1304 (11th Cir. 2006). We defined “direct
costs” as “all variable costs that can be specifically identified as costs of
performing a contract.” Id. (quoting United States v. Landers, 68 F.3d 882, 884
n.2 (5th Cir. 1995)) (internal quotation marks omitted). As relevant to the
defendants, we distinguished commissions from year-end bonuses, which “usually
depend on employee performance on multiple deals throughout the year and cannot
be readily apportioned to a particular bond deal.” Id. at 1305.
On remand for resentencing, the district court held an evidentiary hearing to
consider the application of the newly adopted definition of “direct costs” in our
opinion. Specifically, the court considered whether the payments at issue were
specifically identifiable costs attributable to a particular transaction or whether they
were year-end bonuses not so easily attributable. It determined, on the basis of
evidence not considered by us in the previous appeal, that the bonuses were
variable costs, specifically identifiable to the relevant transaction. We disagree
with the government’s contention that our previous holding forecloses this result
because such a reading would determine as a matter of law that year-end bonuses
are never direct costs, irrespective of the definition of “direct costs.” This misreads
the opinion, placing formalistic reliance on the payment’s label, and ignores the
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definition of “direct costs” that we adopted. We further find no error in the district
court’s conclusion, on the basis of the evidentiary hearing, that the variable
bonuses paid were direct costs. Furthermore, any error in the Guidelines range
calculation would be harmless because of the district court’s clear statement that it
would sentence the defendants in the same manner even if the government’s
position were correct. See United States v. Keene, 470 F.3d 1347, 1349 (11th Cir.
2006) (Carnes, J.).
Furthermore, that the district court varied downward where we would not
depart downward does not significantly concern us. A downward departure
implicates the appropriate calculation of the Guidelines range, while a downward
variance implicates consideration of the factors set forth in 18 U.S.C. § 3553(a).
See United States v. Amedeo, 487 F.3d 823, 829–30 (11th Cir. 2007) (finding no
violation of the mandate rule where the district court varied upward on the basis of
factors rejected by a prior panel in the same case as a basis for an upward
departure). Our ultimate review of the downward variances is for reasonableness.2
See United States v. Williams, 435 F.3d 1350, 1353–55 (11th Cir. 2006).
In its final challenge to the district court’s sentences, the government urges
that we find the defendants’ sentences unreasonably low given the nature of the
2
We note that the sentence before us on this appeal is the only post-Booker sentence to
be reviewed by this Court.
4
crimes. Whether we agree or not with the district court’s rationale for the
downward variances or its characterization of the crimes, we cannot say that the
sentences ultimately imposed in consideration of the factors delineated in 18
U.S.C. § 3553(a) were unreasonable. Thus, having found no reversible error, the
sentences imposed are
AFFIRMED.
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CARNES, Circuit Judge, dissenting:
The sentences that the district court imposed on these two defendants should
be vacated, because in calculating the guidelines ranges the court violated the law
of the case doctrine. See United States v. Crawford, 407 F.3d 1174, 1178 (11th
Cir. 2005) (“[A]fter Booker, ‘[t]he district courts, while not bound to apply the
Guidelines, must consult those Guidelines and take them into account when
sentencing,’” which, “at a minimum, obliges the district court to calculate correctly
the sentencing range prescribed by the Guidelines.” (citation omitted)). The
district court’s statement that it would have reached the same result after
considering the 18 U.S.C. § 3553(a) factors cannot save these sentences, because
the court’s § 3553(a) consideration was itself marred by different errors. See
United States v. Clay, 483 F.3d 739, 745 (11th Cir. 2007) (“[A] sentence can be
unreasonable, regardless of length, if it was substantially affected by the
consideration of impermissible factors.” (citation omitted)). An erroneous
secondary ruling cannot render error in a primary ruling harmless.
In calculating the defendants’ offense levels under the advisory guidelines,
the district court subtracted the bonus money Poirier’s bond firm paid out to its
partners from the total “improper benefit conferred” on the firm as a result of
deVegter’s help in securing the underwriting contract. Doing that decreased the
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defendants’ offense levels by 2, and lowered their guideline ranges of 41–51
months down to 33–41 months imprisonment. See U.S.S.G. §§ 2B4.1(a) & (b)(1);
2F1.1(b); ch. 5, pt. A.
In lowering the guidelines ranges for that reason the district court violated
the law of the case doctrine and our mandate. We held as part of the last deVegter
appeal that “[t]he inherent difficulty of apportioning a year-end bonus to a specific
transaction takes it outside the realm of direct costs that should be subtracted from
profits in determining the net improper benefit.” United States v. deVegter, 439
F.3d 1299, 1305 (11th Cir. 2006). We instructed the district court on remand to
recalculate the “net improper benefit” used to determine the offense levels without
considering the bonuses, “because bonuses were not direct costs that needed to be
subtracted in estimating this amount.” Id. at 1308. The district court went ahead
and subtracted the bonuses anyway.
The majority contends that the evidentiary hearing on remand established
that the bonus money was directly attributable to the improper benefit conferred on
the bond company and therefore could be subtracted as a direct cost of doing
business. We did not, however, instruct the district court to hold an evidentiary
hearing on whether our decision was correct or not. Our decision did not permit
the district court to take evidence on the issue. We told the district court not to
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consider the bonuses. Period.
The majority also believes that even if the district court erred in subtracting
the bonus money in order to calculate the net improper benefit to determine the
guidelines ranges, the error was harmless because the district court stated that it
would have reached the same sentences based on its consideration of the § 3553(a)
factors. I am all in favor of the harmless error approach permitted in United States
v. Keene, 470 F.3d 1347 (11th Cir. 2006), for the reasons I pointed out in that
decision and in my concurring opinion in United States v. Williams, 431 F.3d 767
(11th Cir. 2005). The Keene rule, however, presupposes that the alternative basis
for the sentence based on the § 3553(a) factors will itself be free from error. Two
layers of error is not equal to none. Here the district court’s consideration of the §
3553(a) factors and conclusion about the sentence it would impose based on them
were themselves marred by error—two of them.
First, the district court based its decision that, even if its guidelines
calculation were wrong, the defendants would be entitled to a downward variance
to the same offense level of 41 to 51 months on a finding that deVegter “promised
nothing in return” to Poirier for the bribe. The defendants made exactly the same
argument in the appeal from their convictions, arguing that the evidence of the
bribe was insufficient to convict them because there was no quid pro quo. United
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States v. Poirier, 321 F.3d 1024, 1032 (11th Cir. 2003). We expressly rejected that
argument, holding that “[t]he evidence . . . demonstrated that Poirier authorized the
illicit payment to deVegter in exchange for deVegter’s assistance.” Id. at 1033.
The assistance deVegter rendered stemmed from the fact that he “had access to
confidential documents, had a duty to protect them, and improperly disclosed them
to Poirier and others.” Id.
The district court’s § 3553(a) finding that deVegter “promised nothing in
return” for the cash is flatly inconsistent with our law of the case finding that
Poirier gave deVegter the cash “in exchange for deVegter’s improper assistance”
in securing the underwriting contract. That violation of the law of the case is one
way the district court’s § 3553(a) reasoning was tainted by error.
The other way involves the district court’s finding that the defendants had
“always conducted [themselves] honorably and worked for the best interests of
[their] clients.” In United States v. Martin, 255 F.3d 1227 (11th Cir. 2006), the
district court made the same point in using its authority under 18 U.S.C. § 3553(a)
to vary the defendant’s sentence downward to seven days imprisonment. Id. at
1239. The district court in that case said that the extraordinary § 3553(a) variance
was warranted in part because the defendant’s “fraudulent conduct [w]as an
‘aberration’ in his otherwise outstanding life.” Id. We reversed, holding that it
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was unreasonable to consider the defendant’s otherwise outstanding life at the §
3553(a) sentencing stage because the defendant’s “criminal history category of I
already takes into account his lack of a criminal record” and good behavior. Id.
Likewise, the fact that deVegter and Poirier’s criminal conduct was an aberration
in otherwise honorable service to their clients was already accounted for when the
district court calculated their advisory guidelines ranges using a criminal history
category of I. As we said in Martin, this otherwise outstanding life should not be
counted again at the § 3553(a) stage. To do so was error.
Because the district court’s fallback reasoning for the sentences it imposed is
as erroneous as its primary reasoning, this case does not qualify for a Keene
harmless error affirmance. I would vacate the sentences and have the district court
recalculate them once again, this time free of any error.
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