United States v. Howe ( 2008 )

Opinions of the United
2008 Decisions States Court of Appeals
for the Third Circuit
9-18-2008
USA v. Howe
Precedential or Non-Precedential: Precedential
Docket No. 07-1404
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PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 07-1404
UNITED STATES OF AMERICA,
Appellant
v.
MALCOLM G. HOWE
On Appeal from the United States District Court
for the District of Delaware
(D.C. No. 04-cr-00085)
District Judge: Honorable Gregory M. Sleet
Argued June 3, 2008
Before: FISHER and JORDAN, Circuit Judges,
and YOHN,* District Judge.
*
The Honorable William H. Yohn Jr., United States
District Judge for the Eastern District of Pennsylvania, sitting by
designation.
(Filed: September 18, 2008)
Christopher J. Burke (Argued)
David L. Hall
Office of United States Attorney
1007 North Orange Street, Suite 700
P.O. Box 2046
Wilmington, DE 19899
Attorneys for Appellant
Kathleen M. Jennings (Argued)
William J. Rhodunda, Jr.
Karen V. Sullivan
WolfBlock
1100 North Market, Suite 1001
Wilmington, DE 19801
Attorneys for Appellee
OPINION OF THE COURT
FISHER, Circuit Judge.
In this appeal we review the sentence imposed on a
defendant who was convicted of two counts of wire fraud. The
sentence consisted of two years’ probation (including three
months’ home confinement), despite an advisory Sentencing
Guidelines range of 18 to 24 months’ imprisonment. The
District Court imposed no fine and no forfeiture (other than the
2
special assessment of $200). The Government appeals from the
District Court’s judgment of sentence. We will affirm.
I.
A. The Offense
After retiring from the United States Air Force, where he
served as a contracting officer, Malcolm G. Howe founded and
operated Elite International Traders, Inc. (Elite). Elite was in
the business of supplying goods to the United States Armed
Forces under written contract. Typically, Elite acted as a
“middle man,” purchasing the contracted goods from a
manufacturer and delivering them to the military customer.
Elite would then invoice the Defense Finance and Accounting
Service (DFAS) for payment.
On September 27, 2000, Elite contracted with the Air
Force to supply twenty embeddable computer encryption
modules for $152,850. These devices are used to encrypt
national security information transmitted among networked
military computers. The devices in this case were destined for
the United States Air Force Base at Ali Al Salem in Kuwait.
Under the terms of the contract, Howe was to obtain the devices
and deliver them to Dover Air Force Base in Delaware for
military transport to Ali Al Salem Air Force Base.
To obtain payment on the contract, Elite was required to
submit to DFAS proof of delivery to Dover Air Force Base. In
fact, Howe (on behalf of Elite) never purchased or delivered the
devices, but he still submitted or caused to be submitted to
3
DFAS an altered straight bill of lading1 on January 22, 2001,
falsely indicating that the devices had been delivered. Four days
later, in reliance on the altered straight bill of lading, DFAS paid
Elite $152,850.
When Ali Al Salem Air Force Base discovered that the
devices had not arrived, the Air Force initiated an investigation
to locate them. Howe then engaged in a sustained effort to
obstruct the investigation in order to hide his crime. For
example, in July 2002, Howe generated false invoices to create
the impression that Elite had reimbursed a foreign company
named Abdullah Trading for the purchase of the encryption
modules. (Abdullah Trading ultimately paid $152,850 in
restitution to the Department of Defense on Howe’s behalf.)
Howe backdated the invoices to January 10, 2001, conforming
them to the date he falsely claimed to have delivered the
contracted devices. The Air Force never found them and
referred the case for law enforcement investigation. During the
subsequent investigation, Howe continued to make several
untruthful statements regarding the purported transaction.
On January 8, 2003, Howe’s home and business were
searched pursuant to a search warrant, and Howe consented to
an interview with the investigating agents. Howe made further
inconsistent and questionable statements during the interview.
For example, Howe stated, for the first time in the two-year
investigation, that the handwriting on the January 2001 altered
1
A straight bill of lading is a nonnegotiable bill of lading
that specifies a consignee to whom the carrier is contractually
obligated to deliver the goods.
4
bill of lading belonged to the owner of Abdullah Trading rather
than himself.
B. The Trial
On August 24, 2004, the Government filed an indictment
against Howe containing two counts of wire fraud, in violation
of 18 U.S.C. §§ 2 and 1343. Count I targeted the Elite invoice
in the amount of $152,850 and the altered straight bill of lading,
while Count II targeted an electronic funds transfer of $152,850
from a Massachusetts bank to a Delaware bank. Trial
commenced on September 11, 2006. At trial, Howe stated again
that he believed that the contract was being handled by Abdullah
Trading. The jury found Howe guilty on both counts on
September 14, 2006.
C. The Sentence
Counts I and II were grouped together for Guidelines
calculations purposes under Guidelines § 3D1.2(d).2 The base
offense level was 6 under § 2F1.1(a). The amount of loss of
$152,850 resulted in 7 levels added under § 2F1.1(b)(1)(H).
Two more levels were added to reflect more than minimal
planning under § 2F1.1(b)(2)(A), resulting in an adjusted
offense level of 15. There were no Chapter Four enhancements,
nor were there downward adjustments for acceptance of
responsibility under Chapter Three of the Guidelines. At the
December 12, 2006 sentencing hearing, the District Court
2
The District Court used the 2000 edition of the
Guidelines manual, and we will do the same.
5
therefore assigned Howe a Guidelines total offense level of 15
and a Criminal History Category of I. The corresponding
advisory Guidelines range was 18 to 24 months’ incarceration,
along with a $4,000 to $40,000 fine under § 5E1.2(c)(3).
The Government recommended a sentence of 18 months,
arguing that “Mr. Howe utilized his knowledge of the
contracting process, utilized his knowledge of the fast pay
system in particular, in order to take advantage of that system.
He found a weakness and he exploited it. After doing that, he
lied about it for years.” The District Court, however, decided to
vary downward from the bottom of the Guidelines to sentence
Howe to two years’ probation with three months’ home
confinement, to be served concurrently at each count. It also
declined to impose any fine. The District Court provided the
following justification for this sentence:
“Mr. Howe, after having considered the
provisions of the United States Sentencing
Guidelines, the advisory Guideline range, the
Supreme Court’s ruling in United States versus
Booker, the sentencing factors outlined in Title
18, Section 3553(a), and the underlying goals of
sentencing, most of which have been mentioned
by you and your counsel and [the] AUSA . . . ,
including punishment, deterrence, rehabilitation,
respect for the law, I am sentencing you to
probation. This sentence reflects the Court’s view
that, under the totality of the circumstances
involved, a sentence of probation rather than a
period of incarceration better serves the interests
6
of justice, as that term is applied to the societal
interest in sentencing reflected in Section 3553(a)
and various rulings of our Supreme Court and
various courts of appeals.
The Court feels this sentence is appropriate
for several reasons.
First, Mr. Howe, the Court recognizes that
this is an isolated mistake, by all accounts, albeit
an extraordinarily serious one. Mr. [AUSA] has
not overreached at all in his description of the
nature of the offense and the calculated nature of
the offense, and the taking advantage of special
knowledge that you possessed and to which you
came to possess during the course of your service.
But by all accounts, you have led an
honorable and lawful life until this point, as
attested by the many, more than 40 character
letters that I received and read.
You have no prior criminal history, nor
any history of substance abuse of any kind, as
best I can tell. You have served in the U.S.
Military for 20 years and were honorably
discharged with the rank of Master Sergeant.
Further, you are a well-regarded member
of your community. This is further evidenced by
the many letters, many, many letters from
7
non-relatives, people whom you served,
high-ranking officers and others, members of the
clergy, and just regular folks who wrote on your
behalf.
You regularly attend church and participate
in church activities.
The Court also understands that running
your own business is difficult and can produce
financial hardships. But this is in no way an
excuse or to minimize, again, the seriousness of
your acts. However, the Court believes you
recognize the serious[] nature of the offense and
are truly remorseful, as I think was
well-evidenced by your statement, which I felt,
quite frankly, was heartfelt today. This is also
demonstrated by the fact that you immediately
closed your business and seemed to be honestly
committed to exploring new opportunities to
provide for your family in a manner which, quite
frankly, I think over the years has been quite
extraordinary, quite extraordinary, your
immediate family and your extended family, and
those who were not blood relations.
It should be noted that you are a devoted
husband, father, and son.
The Court recognizes that this process has
been difficult for your family, and is encouraged
8
by the support that it saw in the letters and sees
today out in the well of the court by virtue of the
attendance of many individuals whom I think I
assume rightly are connected with you in some
way. The Court hopes you will remember this
experience so if you are again faced with a
decision of this sort, the one that brings you
before me today, that you will in the future
choose more wisely.”
The Government then filed a timely notice of appeal from the
sentence.
II.
We have jurisdiction to review the District Court’s
judgment of sentence under 18 U.S.C. § 3742(b). United States
v. Kononchuk, 485 F.3d 199, 203 & n.2 (3d Cir. 2007). We
review the sentence imposed for reasonableness. The
Government, as the appellant in this case, bears the burden of
establishing that the sentence is unreasonable. United States v.
Cooper, 437 F.3d 324, 332 (3d Cir. 2006). In conducting our
review, we must first ensure that the District Court committed
no significant procedural error in arriving at its decision. United
States v. Wise, 515 F.3d 207, 217 (3d Cir. 2008). “If we
determine that the district court has committed no significant
procedural error, we then review the substantive reasonableness
of the sentence under an abuse-of-discretion standard, regardless
of whether it falls within the Guidelines range.” Id. at 218.
9
A.
We first examine the Government’s argument that the
District Court committed procedural error in sentencing Howe.
We find no merit in this contention. The Supreme Court
instructs us to “ensure that the district court committed no
significant procedural error, such as failing to calculate (or
improperly calculating) the Guidelines range, treating the
Guidelines as mandatory, failing to consider the § 3553(a)
factors, selecting a sentence based on clearly erroneous facts, or
failing to adequately explain the chosen sentence – including an
explanation for any deviation from the Guidelines range.” Gall
v. United States, 128 S. Ct. 586, 597 (2007).
Here, the Government does not argue that the District
Court miscalculated or failed to calculate Howe’s Guidelines
range. Nor does the Government argue that the District Court
treated the Guidelines as mandatory. Instead, the Government
argues that the Court selected a sentence based on two clearly
erroneous factual findings: first, that Howe committed a crime
that was an “isolated mistake”; and second, that Howe was
remorseful. “A finding is clearly erroneous when although there
is evidence to support it, the reviewing body on the entire
evidence is left with the definite and firm conviction that a
mistake has been committed.” Wise, 515 F.3d at 218 (quoting
Concrete Pipe & Prods. of Cal., Inc. v. Constr. Laborers
Pension Trust for S. Cal., 508 U.S. 602, 622 (1993)). We are
not left with such a definite and firm conviction in this case with
respect to either of the two contested factual findings.
10
First, it was not clear error for the District Court to find
that Howe made but an “isolated mistake” in perpetrating his
crime. The Government argues that Howe’s mistake could be
characterized as isolated “only if it is possible for a two-year
campaign to cover up a $152,850 fraud against the Air Force to
be considered ‘isolated.’” Yet, the District Court’s words could
just as easily be taken to mean that Howe’s crime was isolated
in the context of his entire life. Read this way, the District
Court’s finding is amply supported by the record. Indeed,
Howe’s dishonesty and obstruction stemmed entirely from his
initial offense of using a false bill of lading as proof of delivery
to exploit the contract payment process. In the context of
Howe’s entire life, this series of events reasonably could
constitute an isolated mistake. Howe might be less blameworthy
had he withdrawn from the fraud at an earlier point during the
two-year period. But where there is no dispute that Howe “led
an honorable and lawful life until this point,” the District Court
did not commit clear error in characterizing what he did as an
isolated mistake. Any other result here would force district
courts to choose their words so meticulously at sentencing
hearings as to elevate form over substance.
Second, the Government argues that the District Court
clearly erred in finding that Howe was remorseful. The
Government bases this argument primarily on “[t]he fact that
Howe went to trial. . . . At trial, Howe specifically denied the
element of intent to defraud and sought, through counsel, to
blame an uncharged third party . . . .” But this argument about
Howe’s defense at trial has nothing to do with what the District
Court observed at the sentencing hearing.
11
In finding that Howe showed genuine remorse at
sentencing, the District Court did not err at all, let alone clearly
err. Indeed, Howe stated in his allocution:
“It is with deep remorse that I say these words.
I sincerely apologize to the U.S.
Government and the United States Air Force for
the loss they sustained because of my actions
associated with this case.
I would also like to publicly apologize to
my family for the pain and agony they have
endured throughout this ordeal.
I proudly say that I love this country. This
country has given me the opportunity to live a
dream, a dream that allows me to provide quality
of life for my family that I could not have
afforded had I stayed in my home country of
Trinidad.
I look back on the 20 years I spent in the
Air Force as a special privilege, because I was
able to serve this country by benefitting in so
many other ways. It was my intention to continue
to serve this country while providing for my
family, which is why I decided to go into the
business of supplying commodities to all forces in
the Middle East after my retirement from active
duty.
12
I never intended to steal from the
government or cause harm to the U.S. Air Force.
I have strong regrets for allowing myself to be
sucked into this fraudulent scheme for which I am
now convicted.
The Court declared me guilty on the 14th
of December [he meant September 2006]. I have
been carrying the weight of guilt of selfish and
incorrect acts since January of 2001, the
knowledge of my involvement in this senseless
crime or varied reactions from family and friends,
shame, anger, disappointment, disbelief, surprise,
sympathy, tears of pain and forgiveness.
Over the past few years I have done a lot
of soul-searching. I have asked myself why am I
in this predicament, after spending my entire life
helping others and building a character of
trustworthiness, integrity and love for all? The
key reason I can find is that the Lord wanted to
create a better person of me.
This has been a life-changing experience
for me. But not just for me, but for my family and
my friends. As a result of this experience, I have
grown spiritually and developed an even closer
relationship with my family. For this, I am
extremely grateful.
13
I am now faced with making amends for
my poor judgment. And though I am prepared to
accept the Court’s decision, Your Honor, I
humbly ask that you afford me the opportunity to
pay back the losses by assisting my community,
thereby eliminating any further burden on my
family.
Once again, I am deeply sorry for not
doing the right thing when I had the opportunity
to do so.
Thank you.”
These words on the written page may or may not evoke
a belief in their sincerity. The Government parses them in
attempting to construct an image of lack of sincerity. It argues:
“Howe’s statement to the district court, far from being a sincere
statement of contrition, is a classic example of a defendant
dissembling. He did use the word ‘remorse.’ But rather than
expressing remorse for his sustained criminal conduct, he
expressed ‘deep remorse that I say these words.’” Similarly,
according to the Government, Howe expressed “regrets” only
“for allowing myself to be sucked into this fraudulent scheme
for which I am now convicted.” So, under the Government’s
theory, Howe’s “remorse” and “regrets” show just how sneaky
he really is: his only real regret is that he was caught.
The problem with all this parsing is that it would require
us to overrule the District Court’s first-hand observation of
Howe’s allocution based on our own post hoc reading of the
14
record. But the task of discerning sincerity lies squarely with
the district judge, who observes first-hand the words as they are
communicated live. See United States v. McIntosh, 198 F.3d
995, 1001 (7th Cir. 2000) (“[T]he district court has a
responsibility to look at the whole picture when making its
determination of whether a defendant has genuine remorse. In
determining a defendant’s sincerity, the district court has an
opportunity to observe a defendant ‘firsthand’ during the course
of a criminal case.”); see also Gall, 128 S. Ct. at 597-98 (“The
sentencing judge has access to, and greater familiarity with, the
individual case and the individual defendant before him than the
[Sentencing] Commission or the appeals court.” (quoting Rita v.
United States, 127 S. Ct. 2456, 2469 (2007))). The Supreme
Court in Gall also reiterated that “[t]he sentencing judge is in a
superior position to find facts and judge their import under
§ 3553(a) in the individual case. The judge sees and hears the
evidence, makes credibility determinations, has full knowledge
of the facts and gains insights not conveyed by the record.” 128
S. Ct. at 597 (citation omitted). What the district judge observes
at the sentencing hearing may therefore unquestionably be taken
into account as part of his “credibility determinations” and
“insights not conveyed by the record.”
In the case at bar, after hearing Howe’s allocution, the
District Court explained:
“I couldn’t disagree with you more, Mr. [AUSA],
in the statement that he just read to the Court. . . .
I heard that acceptance [of responsibility]
at various times through Mr. Howe’s recitation.
15
Reasonable people might be able to disagree on
this. I don’t really think so. I am not saying you
are being unreasonable, Mr. [AUSA]. But my
recollection is that he has accepted responsibility
in that statement. I agree with you that his lawyer
said that you can attribute to him, but you said
what he said. What I heard him to say today I
would characterize as an acceptance of
responsibility. Simple as that. . . .
I have heard equivocation from that
podium on many occasions throughout the almost
nine years that I have been doing this, in countless
sentencings over which I have presided. That was
not equivocation on the issue of acceptance of
responsibility that I heard from this gentleman.”
While Howe’s statement might plausibly be read as insincere,
we are not left with a firm and definite conviction that it must be
read as such. Obviously, were the District Court’s factual
finding in clear contradiction with what Howe actually said, we
would find clear error. But we do not have that here, where
Howe’s entire statement is laden with his acknowledgment of
“poor judgment” and “weight of guilt of selfish and incorrect
acts,” for which he “publicly apologize[d]” and the
rehabilitation for which he was “extremely grateful.”
As for the Government’s emphasis on Howe’s statement
that he “never intended to steal from the government or cause
harm to the U.S. Air Force,” while there are cases that state that
a district court’s finding of no intent at sentencing is clearly
16
erroneous where intent is an element of the convicted offense,
in this case the District Court made no such finding. Instead, it
was Howe who said as part of his allocution that he did not
intend to defraud – all the District Court found was that Howe
showed remorse. Howe’s statement that he did not intend to
steal from the government is plausibly a piece of that remorse.
Lay people reasonably could use the word “intend” to mean
something other than the element of a crime; in context, then,
the District Court did not commit clear error in interpreting that
Howe, in mentioning his lack of “intent,” was not denying the
guilt of his convicted offense.
The Government also argues that the District Court did
not adequately consider general deterrence, § 3553(a)(2)(B), in
this case. There are indeed situations in which a district court’s
failure to adequately explain its rejection of a legally recognized
sentencing factor would amount to a “significant procedural
error” under Gall. See 128 S. Ct. at 597 (significant procedural
error includes “failing to adequately explain the chosen sentence
– including an explanation for any deviation from the Guidelines
range”); see also United States v. Sevilla, --- F.3d ----,
No. 07-1105, 2008 WL 4069453, at *4 (3d Cir. Sept. 4, 2008)
(failure to respond to defendant’s “colorable arguments relating
to his childhood and the crack/powder disparity other than to say
that it had ‘considered all of the [§] 3553(a) factors’” constituted
procedural error requiring remand); Kononchuk, 485 F.3d at
204-05 (“when the objections have legal merit, the
considerations countervailing the district court’s judgment are
significant and worthy of response”).
17
But Sevilla and Kononchuk are readily distinguishable on
their facts. In Sevilla, the defendant-appellant had raised his
legally recognized grounds for downward variance in a written
sentencing memorandum prior to the sentencing hearing. ---
F.3d at ----, 2008 WL 4069453, at *1. In Kononchuk, the
government-appellant at the sentencing hearing had gone to
great lengths to “emphasize[] the sophistication and
deliberateness of Kononchuk’s scheme, as well as the need for
consistency in punishment between like offenders. . . . The
government objected strenuously to what it saw as the District
Court’s willingness to allow someone to avoid a sentence of
imprisonment simply because he had the financial capability to
pay restitution . . . .” 485 F.3d at 202. Yet, the district court in
that case “did not explain what warranted the disparity in
treatment between” two similarly situated defendants, id. at 205,
nor did it adequately explain why it “favor[ed] the restitution
aspect of punishment over the incarceration aspect.” Id. at 206.
By contrast, the record in this case reveals that the
colloquy between the Government and the District Court
focused mostly on the degree of remorse exhibited by Howe,
rather than the importance of general deterrence. The only time
the Government said anything about general deterrence was its
statement that “the Court is required under [§] 3553(a) to
consider . . . , among other objectives, . . . deterrence in the
community at large.” This hardly qualifies as a “strenuous
objection.” Nor did the Government file a written sentencing
memorandum prior to the sentencing hearing. The District
Court’s response in this case, therefore, need not have gone
beyond its mention of “deterrence” in its statement of reasons.
See United States v. Ausburn, 502 F.3d 313, 328-29 (3d Cir.
18
2007) (“a rote statement of the § 3553(a) factors will not always
be either necessary or sufficient to satisfy the requirements of
reasonableness” (internal quotation marks and comma omitted)).
A contrary result in this case would ignore our equally well-
established precedent that a district court is “not required to
comment explicitly on every § 3553(a) factor because ‘the
record makes clear the court took the factors into account in
sentencing.’” United States v. Parker, 462 F.3d 273, 278 (3d
Cir. 2006) (quoting Cooper, 437 F.3d at 239). We are thus
satisfied in this case that the District Court adequately
considered general deterrence in its statement of reasons.
In this case, then, the Government cannot plausibly argue
that the District Court’s lengthy explanation of Howe’s history
and characteristics, combined with its acknowledgment that
Howe committed an “extraordinarily serious” offense, did not
constitute an adequate explanation of the ultimate sentence.
Further, we save for our substantive review the Government’s
alternative argument that the District Court should have given
more weight to general deterrence, so much so that an adequate
consideration of that one factor should have trumped any
mitigating factors in the final sentence. The line between
procedural and substantive error may sometimes be unclear, but
here, the Government’s argument about which sentencing
factors should trump which other factors belongs in the prism of
substantive review. In sum, none of the Government’s
contentions amount to “significant procedural error” under Gall.
19
B.
Nor is the District Court’s sentence substantively
unreasonable. The Government argues that the factors upon
which the District Court relied – even assuming they are not
clearly erroneous as a factual matter – are not unusual enough
to warrant as significant a downward variance as that granted by
the District Court.3 See Br. at 19-20 (“Defendants, particularly
those with no prior criminal history, routinely allege positive
attributes at sentencing, including past military service, family
devotion, a good reputation in the community, and church
attendance.”).
The Government cites United States v. Tomko, 498 F.3d
157 (3d Cir. 2007), to support its position. But we vacated that
opinion, 513 F.3d 360 (3d Cir. 2008), and the case’s ultimate
disposition remains pending. --- F.3d ----, No. 05-4997, 2008
WL 3850081 (3d Cir. Aug. 19, 2008). Even assuming that
portions of the Tomko panel opinion state good law, the facts in
this case are plainly distinguishable.
Here, the District Court relied on no fewer than seven
reasons to justify its downward variance: (1) Howe “led an
honorable and lawful life until this point” and had no prior
criminal history; (2) Howe “served in the U.S. Military for 20
3
Our Court distinguishes between traditional departures
based on a specific Guidelines provision and sentencing
“variances” from the Guidelines based on the § 3553(a) factors.
United States v. Vampire Nation, 451 F.3d 189, 195 n.2 (3d Cir.
2006).
20
years”; (3) Howe was a “well-regarded member of [his]
community”; (4) Howe “regularly attend[s] church”; (5) Howe
was a “devoted husband, father, and son”; (6) Howe made but
an “isolated mistake” in committing his crime; and (7) Howe
was remorseful at sentencing. The Government attacks a
number of these findings as insufficient to support the variance.
We remind the Government, however, that we must conduct our
substantive review by “tak[ing] into account the totality of the
circumstances.” Gall, 128 S. Ct. at 597.
For example, the Government argues that the District
Court was inconsistent in not granting a downward departure
based on acceptance of responsibility, yet granting a downward
variance in part because of Howe’s remorse. But there is no
inconsistency. With respect to a downward departure under
Guidelines § 3E1.1, Application Note 2 provides:
“This adjustment is not intended to apply to a
defendant who puts the government to its burden
of proof at trial by denying the essential factual
elements of guilt, is convicted, and only then
admits guilt and expresses remorse. Conviction
by trial, however, does not automatically preclude
a defendant from consideration for such a
reduction. . . . In each such instance, however, a
determination that a defendant has accepted
responsibility will be based primarily upon pre-
trial statements and conduct.”
The Government cites Application Note 2 to argue that Howe’s
“sentencing allocution, even if it had been sincere, was not
21
sufficient to overcome the fact that he had denied his guilt and
gone to trial.”
This argument might have merit under the Guidelines,
but it is without merit with respect to a non-Guidelines variance.
See United States v. Smith, 445 F.3d 1, 5 (1st Cir. 2006) (“That
a factor is discouraged or forbidden under the guidelines does
not automatically make it irrelevant when a court is weighing
the statutory factors apart from the guidelines.”). Indeed, a
defendant’s degree of remorse at sentencing may be considered
as a basis for downward variance under § 3553(a) regardless of
whether the defendant previously accepted responsibility. See,
e.g., United States v. Todd, 515 F.3d 1128, 1134 n.3 (10th Cir.
2008).
In fact, if, even after a guilty plea, a defendant’s
demeanor at sentencing is unremorseful, the district court may
properly deny an acceptance of responsibility reduction under
the Guidelines. E.g., United States v. Lim, 235 F.3d 382, 385
(8th Cir. 2000). Surely in a case like Lim, the Government
would not argue that it was inconsistent for the district court to
accept the defendant’s guilty plea on the one hand, yet reject his
motion for a downward departure on the other. Likewise, there
is no inconsistency between the District Court’s denial of an
acceptance of responsibility departure based on Howe’s denial
of guilt at trial and its subsequent downward variance based in
part on Howe’s remorseful demeanor at sentencing.
The Government also avers that remorse should not
support a downward variance under § 3553(a) because it reflects
a characteristic that most defendants, white-collar or otherwise,
22
exhibit at sentencing. This averment is inaccurate. See, e.g.,
Lim, 235 F.3d at 385 (in mail fraud case, defendant at
sentencing “acts as if he ought to be given a medal for what he’s
done here. He has absolutely no remorse for what he’s done,
none.”); United States v. Brown, 147 F.3d 477, 486 (6th Cir.
1998) (in mail and wire fraud case, defendant “showed no
remorse and did not think he did anything wrong”); United
States v. Young, 132 F.3d 44 (10th Cir. 1997) (in mail of threats
case, “although [defendant] admitted committing the crimes and
pled guilty, she showed no remorse”); United States v. Castner,
50 F.3d 1267, 1280 (4th Cir. 1995) (in mail fraud case,
defendants “showed no remorse whatsoever for blatantly
cheating the United States Government out of in excess of
$50,000.” (internal quotation marks and alterations omitted)).
Therefore, Howe’s remorse at sentencing is a factor that may
distinguish him from the universe of white-collar offenders.
Nor did Howe’s remorse have to be extraordinary. See
Gall, 128 S. Ct. at 595 (“We reject . . . an appellate rule that
requires ‘extraordinary’ circumstances to justify a sentence
outside the Guidelines range.”). We acknowledge that
defendants can easily put on an act at sentencing, feigning
remorse, when in fact they are not remorseful at all, especially
when they have shown no remorse until the day of sentencing.
But, for reasons we have already articulated, we will not
categorically prohibit a district court from taking a defendant’s
demeanor at sentencing into account. We therefore continue to
permit the district court to discern, as part of its credibility
determinations, the level of sincerity of a defendant’s remorse.
So long as there is no clear error in these determinations and
hence no significant procedural error, we will not vacate a
23
sentence as substantively unreasonable simply because it is
based on them to some extent.
In any event, remorse is not the only basis for the
variance in this case. Another justification was Howe’s twenty
years of military service followed by honorable discharge. The
Government brushes that justification aside with the conclusory
averment that this factor does “not meaningfully distinguish
Howe from other defendants . . . .” But the Government cites no
evidence that most defendants, white-collar or otherwise, in fact
have lengthy and positive records of past military service,
whereas it is the Government as appellant whose burden it is to
establish that a sentencing factor is unreasonable. Further, the
argument that any military service must be “exceptional” is not
suitable to our review of a district court’s analysis under
§ 3553(a).
Indeed, the Supreme Court included military service as
a reason to affirm the district court’s below-Guidelines sentence
in Kimbrough v. United States, 128 S. Ct. 558, 575 (2007) (“he
had served in combat during Operation Desert Storm and
received an honorable discharge from the Marine Corps, and
that he had a steady history of employment”). While this
consideration alone might not be enough to warrant the
downward variance to probation in this case, Kimbrough makes
clear that it may be considered as one of the factors. The
offender-specific characteristics of remorse and military service,
especially when combined with the five other factual findings
supporting variance listed above, none of which the Government
24
claims may not factor into the District Court’s decisionmaking,4
could therefore support the Court’s decision to vary downward
to probation.
The Government next argues that the District Court “paid
scant attention to the ‘nature and circumstance of the offense,’”
while placing “the entire focus . . . on the ‘history and
characteristics of the defendant’” (quoting § 3553(a)(1)). But
this averment is belied by the Government’s own statement that
the Court characterized Howe’s crime as an “isolated mistake.”
Moreover, the District Court explicitly considered the nature and
circumstances of the offense by stating that the prosecutor “has
not overreached at all in his description of the nature of the
offense and the calculated nature of the offense, and the taking
advantage of special knowledge that you possessed and to which
you came to possess during the course of your service.” This
does not constitute “scant attention” to the nature and
circumstances of Howe’s offense.
Therefore, the § 3553(a) factors in their totality
reasonably support the sentence imposed in this case, and the
District Court did not abuse its discretion in imposing the
sentence. We do not discount the importance of general
deterrence under § 3553(a)(2)(B) or of the avoidance of
unwarranted sentence disparities under § 3553(a)(6). In this
4
Again, the Government argues that Howe did not simply
make an isolated mistake as a matter of fact, but it does not
argue, assuming that factual finding is not clearly erroneous, that
the District Court still may not take it into consideration as a
mitigating factor.
25
case, however, Howe’s distinguishing characteristics render the
ultimate disparity from the Guidelines reasonably warranted. In
turn, we believe that a potential offender observing the
sentencing proceedings would receive the message that prison
time could be imposed absent those meaningful distinctions,
which satisfies the § 3553(a) goal of general deterrence
sufficiently under our one-step-removed abuse-of-discretion
standard.
Finally, the Government cites two post-Gall decisions
from sister courts of appeals that vacated unreasonably lenient
sentences. Insofar as those courts continue to exercise
substantive review of sentences post-Gall, of course we agree
with them. The problem for the Government, however, is that
there are plenty of decisions that go the other way; the question
is on which side of the spectrum Howe’s case falls. The point
is that selectively citing those cases in which an unreasonably
lenient sentence was found will not do.
For example, the Government cites United States v.
Omole, 523 F.3d 691 (7th Cir. 2008). In that case, the Seventh
Circuit found that a defendant’s 12-month sentence for wire
fraud was substantively unreasonable where the Guidelines
range was 63 to 78 months because the court was “wary of
divergent sentences based on characteristics that are common to
similarly situated defendants.” Id. at 698. But as we have
explained, the District Court in this case identified a number of
factors that are not “common to similarly situated defendants.”
In Omole, the district court hung its hat on the defendant’s
youth, limited criminal history, and potential for rehabilitation.
Here, the District Court relied on considerably more, i.e., all
26
seven factors enumerated above, from military service to
genuine remorse.
Indeed, the Seventh Circuit in a pre-Gall case (so perhaps
less deferential to the sentencing court), United States v.
Wachowiak, 496 F.3d 744 (7th Cir. 2007), reached a very
different conclusion from the one in Omale. In Wachowiak, the
court first identified four of its own cases, including two white-
collar cases, in which it had vacated sentences as unreasonably
lenient, id. at 751-52, but proceeded to distinguish those cases
because, “[i]n addition to Wachowiak’s law-abiding past and
sincere remorse, the judge found that he was ‘a kind, caring
individual, who enjoyed the broad support of family, friends,
colleagues, and teachers’ and ‘demonstrated strength of
character in confronting his problems,’ none of which were
reflected in Wachowiak’s Category I criminal history under the
guidelines.” Id. at 754. Anticipating the counterargument that
many first-time offenders share these characteristics, the
Seventh Circuit wrote: “While Wachowiak may be a typical
offender in some respects, [the district judge] sufficiently
explained why in his judgment, Wachowiak’s degree of remorse
and his otherwise good character set him apart from more
run-of-the-mill child pornography offenders.” Id. Likewise, the
District Court did not do anything unreasonable on this record
in concluding that Howe’s criminal profile is deserving of a
downward variance more than the typical white-collar offender.
The other case the Government cites is United States v.
Hunt, 521 F.3d 636 (6th Cir. 2008). There, the Sixth Circuit
held over a dissent that a sentence of probation was
unreasonably lenient in a health care fraud case when the
27
advisory Guidelines range was 27 to 33 months. But that case
is even more different from the one here, because there the
district court “appears to have relied in substantial part on its
doubt that Hunt intended to commit fraud.” Id. at 649.5 The
Sixth Circuit reached a very different conclusion in United
States v. Grossman, 513 F.3d 592 (6th Cir. 2008), in which the
district court sentenced a child-pornography possessor to 66
months instead of the 120 months recommended by the
Guidelines. There, the Sixth Circuit concluded that “[t]he
district court never lost sight of the sentence recommended by
the guidelines and gave ample reasons for reducing the sentence
as far as he did.” Id. at 597. Again, the point is that each case
must be reviewed on its own, and what the District Court did
here is more akin to what district courts have done in cases in
which their sentences have been upheld.
III.
For the foregoing reasons, we will affirm the judgment of
the District Court.
5
Again, in our case it was Howe and only Howe who said
he never intended to steal or cause harm to the government. The
district court in Hunt, by contrast, itself stated: “The jury found
he had fraudulent intent, but the court can certainly consider
those things in sentencing despite the jury’s finding.” Id. at 650.
No such indication of inconsistency on the part of the District
Court occurred here.
28