United States v. Schweitzer ( 2006 )

Opinions of the United
2006 Decisions States Court of Appeals
for the Third Circuit
7-11-2006
USA v. Schweitzer
Precedential or Non-Precedential: Precedential
Docket No. 05-1301
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PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 05-1301
UNITED STATES OF AMERICA
v.
LEO F. SCHWEITZER, III,
Appellant
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. No. 03-cr-00451)
District Judge: Honorable James K. Gardner
Submitted Under Third Circuit LAR 34.1(a)
June 12, 2006
Before: FISHER, GREENBERG and LOURIE,* Circuit
Judges.
*
The Honorable Alan D. Lourie, United States Circuit
Judge for the Federal Circuit, sitting by designation.
(Filed: July 11, 2006)
Amara S. Chaudhry
527 Swede Street
Norristown, PA 19401
Attorney for Appellant
Christopher R. Hall
Office of United States Attorney
615 Chestnut Street, Suite 1250
Philadelphia, PA 19106
Attorney for Appellee
OPINION OF THE COURT
FISHER, Circuit Judge.
The record of a case provides the only window by which
an appellate court can survey the underlying proceedings, to
assess claims of error and the legality of judgment.
Development of that record is thus of critical importance, a
principle illustrated by this case. Through an extensive plea
colloquy and detailed statement of reasons, the District Court
created a record that demonstrates both the validity of the guilty
plea and the reasonableness of the final, above-guidelines
sentence. We will affirm.
2
I.
A.
Leo F. Schweitzer, III, has a two-decade history of
defrauding the Department of Defense. The ill-fated
relationship began in the early 1980s, when Schweitzer agreed
to supply military contractors with manufactured components
for construction and production. The materials that he provided
were, however, defective and of little value. Schweitzer pled
guilty in 1985 to mail fraud and making false statements, and he
was sentenced to fifteen years’ imprisonment, to be followed by
a term of supervised release. The District Court also enjoined
Schweitzer, as a special condition of release, from engaging in
contractual arrangements with the United States, either directly
or indirectly.
The admonition had little effect. Soon after Schweitzer
was paroled in 1990, he and a cohort secured new government
supply contracts worth nearly $800,000. They filled these
orders through a series of front businesses, which were used to
procure the necessary goods on credit from third parties and
were then closed when payment was demanded. The scheme
was eventually uncovered, and Schweitzer pled guilty in 1995
to conspiracy, making false statements, and money laundering.
His parole was revoked, and he was sentenced to forty-one
months’ imprisonment. Once again, the District Court barred
Schweitzer from contracting with the United States, either
directly or indirectly.
3
Once again, the order was ignored. Schweitzer was
released from custody in 1999 and quickly launched another plot
involving contracts with the Department of Defense. As in the
prior scheme, he and a coconspirator used a series of front
businesses, nominally controlled by friends and family
members, to obtain goods on credit for resale to the government.
The conspirators profited from the venture, but the third-party
suppliers were never paid. Schweitzer was arrested in 2003 and
charged by indictment with multiple counts of wire fraud, mail
fraud, and making false statements.
B.
Schweitzer initially entered a plea of not guilty, and a
jury trial commenced in August 2004. However, on the tenth
day of trial, Schweitzer indicated that he had reached an
agreement with the prosecution and wished to plead guilty to
thirty-three counts of mail fraud, wire fraud, and making false
statements.
1.
A change of plea hearing was held on September 13,
2004. The District Court asked Schweitzer whether he was
satisfied with his representation and had been given adequate
time to discuss the case with his attorney. Schweitzer responded
in the affirmative. The District Court then asked Schweitzer
whether he had read the plea agreement “entirely,” had
understood “everything in there,” and had “fully gone over” the
document with his attorney. Schweitzer again responded in the
affirmative.
4
The District Court addressed in detail the provisions of
the plea agreement. The agreement states that the “total
statutory maximum sentence” to which Schweitzer will be
exposed by his plea is 165 years’ imprisonment. It also recites
a number of stipulations to which the parties had agreed for
purposes of sentencing, including that “the defendant has [nine]
criminal history points, resulting in a Criminal History Category
IV.” However, it acknowledges that “these stipulations are not
binding upon either the Probation Department or the Court” and
that “[t]he defendant may not withdraw his plea because the
Court declines to follow any . . . stipulation by the parties to this
agreement.”
The agreement also includes a broad waiver of appellate
rights. It provides that “the defendant voluntarily and expressly
waives all rights to appeal or collaterally attack the defendant’s
conviction, sentence, or any other matter relating to this
prosecution, whether such a right to appeal or collateral attack
arises under 18 U.S.C. § 3742, 28 U.S.C. § 1291, 28 U.S.C.
§ 2255, or any other provision of law.” The only exceptions are
for claims that “the defendant’s sentence exceeds the statutory
maximum” or that “the sentencing judge erroneously departed
upward from the otherwise applicable sentencing guidelines
range.” The agreement specifically states that, “[i]f the
defendant does appeal pursuant to [one of these exceptions], no
issue may be presented by the defendant on appeal other than
those described in [these exceptions].”
The District Court recited these provisions on the record
and confirmed that Schweitzer understood each of them. It
advised Schweitzer that, although the defense and the
5
prosecution “can agree on facts . . . [and] make
recommendations . . . at sentencing,” the Court is not bound by
those stipulations and that, regardless of the Court’s findings,
the plea “is still binding on you.” It admonished: “[N]o one can
guarantee you what sentence you will get from me.” It
recounted the charges to which Schweitzer was pleading guilty
and stated that, because each of the thirty-three offenses carried
a potential term of five years’ imprisonment, the “total statutory
maximum sentence would be 165 years in prison.”
Schweitzer responded that he understood the agreement
and the effects of his plea and still wished to plead guilty. The
District Court found on the record that “the defendant is fully
aware, competent and capable of entering an informed plea” and
that “his plea is a knowing and voluntary plea.” It accepted the
plea, directed preparation of a presentence report, and scheduled
sentencing proceedings.
2.
A sentencing hearing was held on January 27, 2005, two
weeks after the Supreme Court issued its decision in United
States v. Booker, 543 U.S. 220 (2005). Argument centered on
whether Schweitzer should receive credit for acceptance of
responsibility, see U.S. Sentencing Guidelines Manual § 3E1.1,
and whether he should be granted a downward departure based
on criminal history, see id. § 4A1.3. Defense counsel asserted
that Schweitzer had, by pleading guilty and offering to make full
restitution, recognized his own complicity in the crimes and
accepted responsibility. As to the request for a departure,
counsel conceded that Schweitzer was properly assigned to
6
criminal history category V based on his five prior convictions,1
but argued that this category over-represented the seriousness of
his past offenses and the likelihood of recidivism, warranting a
downward departure.2
Schweitzer testified in his own behalf. He acknowledged
guilt of the crimes with which he was charged and indicated that
he planned to make full restitution to the victims. On cross-
examination, however, he admitted that he had not yet offered
any restitution in this case and had not yet satisfied restitution
obligations arising from his prior convictions, totaling nearly
1
Counsel for the parties had premised their earlier
stipulation, that Schweitzer should be assigned to criminal
history category IV, on the assumption that Schweitzer’s
criminal history included only his two prior federal convictions.
However, in preparing the presentence report, the probation
officer uncovered two additional state convictions: one in 1995
for deceptive business practices and one in 2003 for passing bad
checks. Counsel indicated during the sentencing hearing that
they had been unaware of these offenses when the plea
agreement was signed, and concurred that Schweitzer should be
assigned to criminal history category V.
2
The District Court agreed with defense counsel that the
United States Sentencing Guidelines allow for a downward
departure when the category over-represents the defendant’s
criminal history, see U.S. Sentencing Guidelines Manual
§ 4A1.3(b), but, notably, it pointed out that the Guidelines also
allow for an upward departure when the category under-
represents criminal history, see id. § 4A1.3(a).
7
$1 million. He also insisted that he had, at the time of his
offenses, intended to satisfy the debts owed to the third-party
suppliers.
The District Court denied credit for acceptance of
responsibility. It noted that Schweitzer had not withdrawn
voluntarily from his criminal activities and had not assisted law
enforcement. It also concluded that Schweitzer had, by
asserting that he had always intended to repay the defrauded
third parties, refused to accept fully his own culpability in the
offenses.
The District Court also denied the request for a
downward departure. It found that, in light of the numerous
victims of Schweitzer’s crimes and his persistent failure to
rehabilitate, his assignment to criminal history category V did
not over-represent the “seriousness of his criminal history” or
the “likelihood that he will commit other crimes.”
The District Court determined, based on the presentence
report, that Schweitzer should be assigned to an offense level of
seventeen and a criminal history category of V. The
recommended range of imprisonment under the United States
Sentencing Guidelines was forty-six to fifty-seven months.
Nevertheless, the final term of imprisonment imposed by
the District Court was eighty-four months, nearly fifty percent
above the recommend range. It offered a lengthy justification
for the sentence:
8
This case represents this defendant’s third
federal conviction and fourth overall for similar
criminal behavior. Moreover, the offense was
committed while the defendant was under
supervision.
For more than the past twenty years, this
defendant has involved himself in the acquisition
of defense contracts . . . . [I]t is believed that the
defendant may have been quite successful in
operating such a business legitimately.
However, [he] decided that [one hundred]
percent profit is better than any lesser amount of
profit, and[,] as a result, at least [twenty-nine]
companies have been victimized this time around,
but over a hundred victims over the period of his
prior convictions.
The defendant was barred from selling
goods to the government directly or indirectly as
a condition of his parole . . . and under the terms
of his supervised released . . . . Despite this
prohibition by court orders, the defendant was not
deterred. He elicited the assistance of . . . [his
codefendant] to lie to the probation officer . . . as
a means of concealing his otherwise barred
conduct.
....
9
It appears that the defendant can
successfully secure employment, despite his past
criminal convictions. He has no history of
substance abuse or mental or emotional problems.
Despite having a little more than a high school
education, the defendant is an intelligent and
crafty individual.
Unfortunately, the defendant has
repeatedly chosen to use his natural abilities to
defraud businesses. Over the past [twenty] years
it is estimated that he has committed at least
$1 million in fraud . . . .
The District Court recounted the circumstances of the offenses
and determined that, in light of Schweitzer’s criminal history, a
sentence above the range prescribed by the Guidelines was
warranted:
In this case the sentence guidelines do not
fully take into account the likelihood of
recidivism of this defendant to repeat similar
fraud upon his release. . . .
The defendant has already spent
approximately eight to nine years in prison on the
two previous convictions and nearly two
additional years for parole violations. Over ten
years of incarceration did not deter this defendant
from committing these additional [thirty-three]
offenses.
10
Moreover, the defendant has not shown
any desire to pay any more than the bare
minimum in restitution in the time that he has
been out of prison. Rather he has shown a desire
to live at a standard of living beyond his means,
including driving expensive cars and spending
hundreds of thousands of dollars on unknown
items, yet paying only the minimum amounts
directed by the Court on his large restitution
amount . . . . The total of the fraud committed by
the defendant then in the past [twenty] years is . . .
nearly $1 million, and the defendant has shown
that he will attempt to include anyone in his
fraudulent schemes, including his own father, and
his friends, and his girlfriend.
There is no indication that defendant will
adhere to the [mores] of society if given a lesser
sentence or a sentence within the guideline range.
The District Court concluded that a term of imprisonment of
eighty-four months “reflects thorough consideration of all of the
factors set forth in [18 U.S.C. § 3553] and represents the
minimum sentence necessary to comply with the purposes of the
sentence as set forth by Congress.”
Following the imposition of sentence, the prosecution
suggested that the District Court adopt “an alternative ground[]”
for the judgment. Specifically, counsel argued that the District
Court could find that the criminal history category to which
Schweitzer was assigned under-represents the seriousness of his
11
criminal history and the likelihood of recidivism, warranting an
upward departure of three offense levels and one criminal
history category. See U.S. Sentencing Guidelines Manual
§ 4A1.3. This would result in an offense level of twenty and a
criminal history category of VI, raising the recommended range
of imprisonment to seventy to eighty-seven months. The
District Court agreed, and amended its prior statement of
reasons to “include th[is] articulation” as a basis for the final
sentence.
C.
This timely appeal followed. Schweitzer raises three
issues: (1) that his plea was entered unknowingly and is thus
invalid, (2) that the final sentence imposed by the District Court
was “unreasonable,” and (3) that the superseding indictment
included “superfluous, irrelevant, and prejudicial language.”
We have jurisdiction under 18 U.S.C. § 3742(a) and 28 U.S.C.
§ 1291. See United States v. Cooper, 437 F.3d 324, 327-28 &
n.4 (3d Cir. 2006).
II.
The issues raised in this appeal implicate different
substantive standards, but they hinge on a common theme: the
sufficiency of the record developed by the District Court. The
validity of the plea depends on whether the defendant was fully
apprised of the ramifications of his plea; the reasonableness of
the sentence turns on whether the District Court gave
meaningful consideration to the factors of 18 U.S.C. § 3553(a);
and the challenge to the superseding indictment may be reached
12
only if the defendant was not adequately informed of the
appellate-rights waiver of his plea agreement.
A.
The constitutional requirement that a guilty plea be
“knowing” and “voluntary” is embodied in Federal Rule of
Criminal Procedure 11. See, e.g., Boykin v. Alabama, 395 U.S.
238, 242-44 (1969). The Rule outlines a series of admonitions
and warnings to be provided to the defendant. Fed. R. Crim. P.
11(b)(1). The court must advise the defendant, inter alia, of the
waiver of certain constitutional rights by virtue of a guilty plea,
the nature of the charges to which he or she is pleading guilty,
the “maximum possible penalty” to which he or she is exposed,
the court’s “obligation to apply the Sentencing Guidelines
[and] . . . discretion to depart from those guidelines under some
circumstances,” and “the terms of any plea-agreement provision
waiving the right to appeal or to collaterally attack the
sentence.” Id. The district court must ensure that the defendant
receives these caveats, understands them, and still wishes of his
or her own volition to plead guilty. Id. 11(b); see also, e.g.,
Boykin, 395 U.S. at 242-44.
The record in this case demonstrates full compliance with
these requirements. During the colloquy with Schweitzer, the
District Court described the nature and basis of the charges to
which he was pleading guilty and the concomitant waiver of
constitutional rights. It identified the statutory maximum
penalty associated with each offense – five years’ imprisonment
– and the total maximum penalty to which he was exposed – 165
years’ imprisonment. It stated repeatedly and clearly that the
13
stipulations of the parties – including those regarding criminal
history – were not binding on it and would not control its
findings of fact. Finally, it discussed the appellate-rights waiver
of the plea agreement and detailed the limited circumstances in
which those rights would be preserved.
After each matter was addressed, Schweitzer was asked
whether he understood the principles at issue. He sometimes
responded with specific inquiries and was provided with
additional explanations. Never during the hearing did he
indicate that he failed to grasp the ramifications of his plea, nor
do his responses indicate any lack of awareness. The colloquy
conducted by the District Court complied in every respect with
Rule 11.
Defense counsel’s arguments to the contrary are wholly
baseless. Counsel asserts that the District Court failed to inform
Schweitzer of the maximum possible penalty to which he was
exposed. This is contradicted by the record of the plea hearing,
which shows that the District Court advised Schweitzer that the
“total statutory maximum sentence would be 165 years in
prison.” (A. 262-63.) Counsel also claims that Schweitzer was
not told of the appellate-rights waiver of the plea agreement.
Again, this is contravened by the record, which includes a
lengthy recitation of the waiver and its effects on Schweitzer’s
right to appeal. (A. 267-69.)
Defense counsel’s final contention, that Schweitzer was
not adequately advised that the parties’ stipulations would not
bind the District Court, is similarly unsupported by the record.
The plea agreement itself states that the stipulations of the
14
parties are not binding on the District Court, and the District
Court reiterated this point several times during the hearing.3
Schweitzer was informed repeatedly that the District Court
could render factual findings differing from the parties’
stipulations and that these contrary findings would provide no
basis for him to withdraw the plea. Schweitzer indicated
without qualification that he understood these explanations and
still wished to plead guilty. (A. 255-57.)
The colloquy in this case conformed to Rule 11 and
constitutional mandates. See Boykin, 395 U.S. at 242-44; Fed.
R. Crim. P. 11(b). It reflects a voluntary, knowing, and
intelligent waiver of rights and decision to enter a guilty plea.
We will affirm the judgment of conviction.4
3
See also United States v. Vonn, 535 U.S. 55, 62-74
(2002) (holding that courts may consider evidence outside of the
plea colloquy in determining whether plea was knowing and
voluntary).
4
We also note that Schweitzer neither moved to withdraw
his plea nor objected to the adequacy of the colloquy before the
District Court. This not only calls his current challenge into
doubt but would normally result in plain-error review. See
Vonn, 535 U.S. at 62-74. However, even assuming that his
objection had been properly preserved, we find no grounds to
conclude that the plea was anything less than knowing and
voluntary.
15
B.
We have held that, following the Supreme Court’s
decision in Booker, a sentence will be upheld as reasonable if
“the record as a whole reflects rational and meaningful
consideration of the factors enumerated in 18 U.S.C. § 3553(a).”
United States v. Grier, 449 F.3d 558, 574 (3d Cir. 2006). This
standard requires a deferential review of the record developed
by the district court to determine whether the final sentence,
wherever it may lie within the permissible statutory range, was
premised upon appropriate and judicious consideration of the
relevant factors. Id.; see also Cooper, 437 F.3d at 330-32. That
we may ourselves have imposed a sentence different from that
of the district court, based on our own de novo assessment of the
evidence, is no basis to overturn the judgment. Cooper, 437
F.3d at 330 (citing United States v. Williams, 425 F.3d 478, 481
(7th Cir. 2005)).
The record in this case convinces us of the
reasonableness of the sentence. The District Court discussed in
great detail the circumstances underlying the offenses of
conviction and Schweitzer’s personal and criminal history. It
conducted a proper Guidelines analysis and reached the
appropriate recommended range based on a thorough evaluation
of Schweitzer’s claim for credit for acceptance of responsibility
and request for a downward departure. It assessed the effect of
Schweitzer’s offenses on his family and the victims, his blatant
disregard of prior orders of court, his failure to be deterred or
rehabilitated despite prior terms of imprisonment and supervised
release, and his dismissive attitude toward restitution
obligations. The District Court weighed these considerations
16
and concluded that, to foster the purposes of the Sentencing
Reform Act, including the promotion of respect for the law and
deterrence of future offenses, see 18 U.S.C. § 3553(a), a term of
imprisonment of eighty-four months was necessary. There can
be no doubt that the record reflects “rational and meaningful
consideration” of the relevant statutory factors. See Grier, 449
F.3d at 574.
Defense counsel complains that the sentence was above
the range recommended by the Guidelines and by the parties.
This does not call into question the District Court’s judgment.
The range recommended by the Guidelines is one of the factors
to be assessed in the sentencing calculus, but, just as a sentence
within that range is not presumptively reasonable, a sentence
outside of it is not presumptively unreasonable. Cooper, 437
F.3d at 331-32. And, of course, a district court is in no way
bound by the parties’ sentencing recommendations.5 Indeed,
perfunctory adoption of one party’s position – or both, if the
parties agree – would arguably violate the court’s statutory duty
to exercise “independent judgment” in its weighing of the
relevant factors and crafting of the final judgment. See Grier,
449 F.3d at 574. The reasonableness of a sentence depends not
on the district court’s adherence to the range recommended by
the Guidelines or the parties but on its adherence to the mandate
of the Sentencing Reform Act to give meaningful consideration
to the factors of 18 U.S.C. § 3553(a). See id.; Cooper, 437 F.3d
at 331-32. The record in this case confirms that the District
Court understood and discharged its statutory obligations.
5
But cf. Fed. R. Crim. R. 11(c)(1)(C) (providing for plea
agreements that bind district court).
17
We need not pass upon the District Court’s alternative
justification for the sentence: its holding that an upward
departure based on criminal history was warranted. The District
Court offered this explanation only after it had already weighed
the relevant statutory factors – including the correct
recommended range under the Guidelines – and had announced
its sentence. The departure was plainly not an integral basis for
the sentence but was merely a post hoc rationale for it; in other
words, the same sentence would have been imposed whether or
not the departure had been granted. Any error in this holding
thus had no effect on the sentence and is properly deemed
harmless.6 See, e.g., United States v. Himler, 355 F.3d 735, 743-
44 (3d Cir. 2004); cf. United States v. Hill, 411 F.3d 425, 426
(3d Cir. 2005) (“[W]here . . . a District Court clearly indicates
that an alternative sentence would be identical to the sentence
imposed . . . any error that may attach to [the] sentence . . . is
harmless.”). Notwithstanding the alleged impropriety of the
departure, we will affirm the sentence as reasonable.
6
Schweitzer does not argue that he was not given
adequate notice of the possibility of an upward departure, see
United States v. Himler, 355 F.3d 735, 743-44 (3d Cir. 2004)
(stating that notice of an upward departure is required under
Federal Rule of Criminal Procedure 32(h)); cf. United States v.
Vampire Nation, No. 05-1715, 2006 WL 1679385, at *4-5 (3d
Cir. June 20, 2006) (differentiating between traditional
departures under the Guidelines and variances from the
Guidelines based on Booker and holding that notice of a
variance is not required under Rule 32(h)), and we accordingly
do not address the issue. See also supra note 2 (noting that
District Court raised possibility of an upward departure).
18
C.
The final issue raised by defense counsel, challenging the
inclusion of sentencing allegations in the superseding
indictment, is easily dismissed. The plea agreement signed by
Schweitzer contains an express and unambiguous waiver of his
right to appeal the judgment on any grounds other than claims
of an illegal sentence or erroneous upward departure.
Schweitzer acknowledged this provision during the plea
colloquy and was fully apprised of its effects. We find no basis
to refuse to enforce the waiver, which facially precludes his
challenge to the indictment. See United States v. Lockett, 406
F.3d 207, 213 (3d Cir. 2005) (“Waivers of appeal, if entered
knowingly and voluntarily, are valid, unless they work a
miscarriage of justice.”).
Moreover, notwithstanding this express waiver,
Schweitzer’s guilty plea effected an implicit waiver of the issue.
We have previously recognized that a guilty plea results in
forfeiture of “those defenses not explicitly preserved by entering
a conditional guilty plea.” United States v. Panarella, 277 F.3d
678, 689 (3d Cir. 2002). While an exception exists for claims
that the indictment fails to state an offense, see id. (citing Fed.
R. Crim. P. 12(b)), the claim raised by Schweitzer in this appeal
is not that the allegations of the indictment are insufficient but
that they are excessive, presenting factual assertions irrelevant
to the charged offenses. This challenge was forfeited by
Schweitzer’s unconditional guilty plea. See id. We will not
reach the issue.
III.
19
There is simply no substitute for on-the-record discussion
and deliberation. It ensures that the parties are fully informed of
their rights and obligations and that the appellate court will be
able to assess the merits of the final judgment. The record in
this case exemplifies this principle. Through its extensive
colloquy with the defendant and thoughtful weighing of the
relevant sentencing considerations, the District Court provided
a firm basis on which we can uphold the plea as knowing and
voluntary and the sentence as reasonable.
For these reasons, the judgment of the District Court will
be affirmed.
20