United States v. Hallman ( 1994 )

Opinions of the United
1994 Decisions States Court of Appeals
for the Third Circuit
5-12-1994
United States of America v. Hallman
Precedential or Non-Precedential:
Docket 93-1414
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1
UNITED STATES COURT
OF APPEALS
FOR THE THIRD CIRCUIT
No. 93-1801
UNITED STATES OF AMERICA,
Appellee,
v.
REGINALD HALLMAN,
Appellant.
Appeal from the
United States District Court
for the Eastern District of Pennsylvania
(D.C. Crim. No. 93-00104-01)
Submitted Under Third Circuit LAR 34.1(a)
May 3, 1994
(Filed: May 13, l994 )
Before: SLOVITER, Chief Judge, HUTCHINSON AND SEITZ, Circuit
Judges.
Jerry S. Goldman, Esquire
Jerry S. Goldman & Associates, P.C.
1520 Locust Street, 10th Floor
Philadelphia, Pennsylvania 19102
Attorney for Appellant
Michael R. Stiles, United States Attorney
Walter S. Batty, Jr., Assistant
United States Attorney, Chief of Appeals
Virgil B. Walker, Assistant
United States Attorney
2
Office of the United States Attorney
615 Chestnut Street
Philadelphia, Pennsylvania 19106
Attorneys for Appellee
__________
OPINION OF THE COURT
SEITZ, Circuit Judge.
I.
Reginald Hallman ("Appellant") appeals a sentence imposed
on him by the district court. The district court had subject
matter jurisdiction pursuant to 18 U.S.C. § 3231. This court has
jurisdiction under 18 U.S.C. § 3742(a).
II.
On September 9, 1992, appellant used a stolen check to pay
for a room at the Korman Suites in Philadelphia, Pennsylvania.
At the request of federal investigators, local authorities
arrested the appellant and located stolen mail after he consented
to a search of his vehicle.
Appellant pled guilty to a state forgery charge and was
sentenced to three years probation and restitution of $6,400.
Appellant remained incarcerated, however, because he was
identified as a fugitive from justice in Atlanta, Georgia and
having charges pending against him in Delaware County (PA) Court.
On February 11, 1993, appellant was taken into federal
custody pursuant to a four-count federal indictment. It appeared
that, using various aliases, appellant deposited stolen and
forged checks into an account and then withdrew the funds
therefrom (Count 1). One of the checks deposited in this account
was a check made out to the Internal Revenue Service (Count 2).
3
Appellant forged one of the stolen checks he possessed to
purchase an automobile in the State of Alabama for approximately
$14,000 (Count 3). Lastly, the appellant was found to have been
in possession of approximately sixty-one stolen pieces of mail
(Count 4).
Appellant entered a plea of guilty on all four counts.
After receipt of the Pre-Sentence Report and a hearing thereon,
the defendant was duly sentenced. He now appeals.
III.
The standard and scope of review of the district court's
interpretation and application of the Sentencing Guidelines is
plenary. United States v. Murillo, 933 F.2d 195, 196 (3d Cir.
1991). However, where the district court's application is based
on factual analysis, we will reverse the district court only if
its conclusion is clearly erroneous. United States v. Ortiz, 878
F.2d 125, 127 (3d Cir. 1989).
IV.
A. Calculation of Loss
A search of the appellant's car after his arrest on the
Korman Suites' forgery charge resulted in the recovery of sixty-
one pieces of stolen mail, mostly checks, that underlie Count 4.1
Appellant objects to the calculation of "loss" in this count,
which added $25,152.36 to the loss amount and one (1) point to
his offense level. Under USSG § 2F1.1, adjustments are made to
the base offense level if the monetary loss exceeds certain
1
The sixty-one pieces of mail included: fifty checks, six
bundles of blank checks, and five credit cards.
4
levels. Under § 2F1.1(a), the base offense level is six. The
Probation Officer calculated the losses to be $73,419.36. This
was arrived at by adding the losses suffered by the bank in Count
1 ($34,282), the amount of the check in Count 3 ($13,985), plus
the face value of the stolen mail in Count 4 ($25,152.36). Under
USSG § 2F1.1(b)(1)(G) six points were added to the base level
because the "loss" exceeded $70,000.
The district court determined that the "loss" in regard to
these stolen checks should be determined under USSG § 2B1.1.2
The district court referred to Application Note 2 to USSG § 2B1.1
as applicable. The note defines "loss" as
the value of the property taken, damaged, or destroyed.
Ordinarily, when property is taken or destroyed the
loss is the fair market value of the particular
property at issue. . . . Examples: (1) In the case of
a theft of a check or money order, the loss is the loss
2
To avoid confusion in considering the arguments advanced by
appellant concerning the calculation of the offense score, some
clarification as to which Guidelines sections are being utilized
is necessary. In our four-count indictment, there are both fraud
and theft-oriented charges. Under USSG § 3D1.2(d), conduct that
results in offense levels being determined under Chapter 2 (e.g.,
theft and fraud) are to be "grouped" together. Once grouped
together, USSG § 3D1.3(a) requires that the highest offense level
of the group is to be used. Application Note 3 to § 3D1.3 states
that "[i]f the counts in the Group are covered by different
guidelines (e.g., theft and fraud), use the guideline that
produces the highest offense level." In this case, both
guidelines, §§ 2B1.1 and 2F1.1, result in the same score--12
points--and either could have been used to calculate the score.
The use of these guidelines to determine the score, however, does
not dispose of the need to refer to the appropriate guideline for
the calculation of loss. For example, although Hallman's
indictment groups fraud and theft charges, we must refer to
§2B1.1 to calculate the loss in regard to the theft charges
(e.g., Count 4). See 18 U.S.C. § 1708 (referring to § 2B1.1 of
Guidelines). This amount is then applied to the guideline used
to calculate the offense level.
5
that would have occurred if the check or money order
had been cashed.
The face value of the stolen checks was $25,152.36.
A recent opinion of this court supports the calculation of
loss based on the face value of the checks. In United States v.
Cianscewski, 894 F.2d 74 (3d Cir. 1990), a couple was convicted
of possessing stolen mails and selling stolen treasury checks.
The amount of loss in regard to the checks was challenged on
appeal. The defendants argued that the amount of loss should have
been the sum of the amounts that were received for the checks
upon resale. The court disagreed and held that "[w]hen a check is
stolen, the cost to the party who ultimately bears the loss is
obviously the face value of the check. . . . Under such
circumstances . . . a court does not err by valuing losses at
replacement cost to the victim--in this case the face value of
the stolen checks." Id. at 80.
Appellant argues that some of the checks had no economic
value because they were not valid either as a result of the
passage of time or because payment on the checks logically would
have been stopped. This argument erroneously applies USSG
§ 2B1.1. Application Note 2 specifically states that "loss" is
"the loss that would have occurred if the check or money order
had been cashed." (Emphasis added). Appellant's crime of theft
of the checks was completed, although his criminal conduct was
only partially completed.
Appellant argues that the Government failed to show an
intent by him to use the checks and thus, the amount should be
6
lowered by applying USSG § 2X1.1 relating to "attempts." In an
effort to require the government to show intent, the appellant
cites United States v. Kopp, 951 F.2d 521 (3d Cir. 1992). The
appellant's reading of this case is in error. The court in Kopp
was distinguishing theft and fraud. The court determined that
when calculating loss in a fraud context, the calculation of loss
should be based on "actual or intended harm." Id. at 529. The
court, however, said that when calculating the loss in the theft
context, applying USSG § 2B1.1, one need only apply the "simple
``amount taken' rule" because "all thefts involve an intent to
deprive the victim of the value of the property taken." Id..
The charge in Count 4 warrants application of § 2B1.1, and we
must therefore examine "loss" in the theft context. The district
court's calculation of the amount of loss involved in Counts 1, 3
and 4 is not clearly erroneous.
B. Related Offenses
Appellant next challenges the calculation of his criminal
history score. The district court adopted the Probation
Officer's career history calculation of thirteen points that
placed the appellant in a category VI classification. Appellant
appeals the calculation on the ground that the Pre-Sentence
Report contained two calculation errors when it counted related
offenses separately.
1. Consolidation for Sentencing
First, appellant argues that two prior sentences, listed
at paragraphs 51 and 52 of the Pre-Sentence Report, were
"related" within the meaning of USSG § 4A1.2(a)(2) because they
7
were consolidated for sentencing. Under Application Note 3 to §
4A1.2,
[p]rior sentences are not considered related if they
were for offenses that were separated by an intervening
arrest. . . . Otherwise, prior sentences are
considered related if they resulted from offenses that
(1) occurred on the same occasion, (2) were part of a
single common scheme or plan, or (3) were consolidated
for trial or sentencing. . . .
The district court determined that there was not a consolidation
for sentencing purposes and adopted the Pre-Sentence Report's
calculation.
After examining two case action summaries from the State
of Alabama, we conclude that there may have been consolidation
for sentencing, but that this conclusion does not affect our
result as we find other grounds to sustain the separate
calculation of the offenses based on our interpretation of
Application Note 3. The first sentence of that Application Note
states that "[p]rior sentences are not considered related if they
were for offenses that were separated by an intervening arrest
(i.e., the defendant is arrested for the first offense prior to
committing the second offense)." The appellant was arrested for
the offenses listed at paragraphs 51 and 52 of the Pre-Sentence
Report on different dates. We read the "otherwise" in the Note to
mean that if there is not an intervening arrest, then there may
be other ways in which to find consolidation. We need not
consider those alternatives, however, as the district court's
8
counting of each separate offense was proper under our reading of
Application Note 3.3
2. Common Scheme or Plan
Appellant's second "relatedness" contention is that his
conviction for the forgery of the check to the Korman Suites was
improperly counted because it was "related" to the conduct in
Count 4. The forgery conduct consisted of the appellant's
forging of a check, numbered 295 with the name "James La Roux"
emblazoned on the face. The check was one of a sequential series
of checks with Mr. La Roux's name on them. The appellant
contends that the prior sentence he received for the forgery is
related to the present offense of possession of stolen mail
because it is part of a common scheme or plan. Under USSG
§ 4A1.2(a)(2), "[p]rior sentences imposed in unrelated cases are
to be counted separately." According to Application Note 3 to
§ 4A1.2, prior sentences are related if they "(2) were part of a
single common scheme or plan . . . ."
3
Our reading of Application Note 3 finds support in a recent
decision in United States v. Gallegos-Gonzalez, 3 F.3d 325 (9th
Cir. 1993):
[T]he first question is always whether the underlying
offenses were punctuated by an intervening arrest; by
the logic and ordering of Note 3, that inquiry is
preliminary to any consideration of consolidated
sentencing. The use of the word "otherwise" indicates
that sentence consolidation is relevant only in the
absence of intervening arrests. Properly read, Note 3
instructs that whenever offenses are separated by
intervening arrests, the sentences for those offenses
are unrelated regardless of whether sentencing was
consolidated.
Id. at 327
 9
On its face, the argument made by appellant is an
erroneous application of the Guidelines because as a general
rule, USSG § 4A1.2(a)(2) applies to the relatedness between prior
sentences, not prior sentences to the present offense. E.g.,
United States v. Beddow, 957 F.2d 1330, 1337 (6th Cir. 1992);
United States v. Walling, 936 F.2d 469, 471 (10th Cir. 1991).
Therefore, because we have only one prior sentence here, there
can be no relatedness analysis under § 4A1.2(a)(2).
The appellant, however, suggests that under USSG
§ 4A1.2(a)(1), the prior sentence and present offense are related
because of the requirement that the prior sentence be imposed
"for conduct not part of the instant offense." Appellant's
argument is that the conduct that led to his state sentence for
forgery is part of the same scheme and conduct that led to his
federal indictment on the count of possession of stolen mail.
Although neither party has cited a case that would be of
assistance, there are several decisions from other circuits that
throw some light on the issue. The Sixth Circuit stated that
"the appropriate inquiry is whether the ``prior sentence' and the
present offense involve conduct that is severable into two
distinct offenses." Beddow, 957 F.2d at 1338. The Sixth
Circuit's test was developed in response to the Tenth Circuit's
decision in United States v. Banashefski, 928 F.2d 349 (10th Cir.
1991). In Banashefski, the defendant, a felon, placed a shotgun
in the trunk of a stolen car and then drove the car away. He was
charged by the state with possession of a stolen car, and was
charged by the federal government for possession of a firearm by
10
a felon. The district court determined that there were two
distinct possessory acts that were severable. The facts in our
case constitute a closer call. Recognizing that possession of
stolen mail is a distinct offense, we also note that possession
of stolen mail in the form of blank checks suggests that
additional conduct may be required for the actor to obtain ill-
gotten gains. We do not adopt the Sixth Circuit's "severability
test" based on our facts. Although Banashefski could have
possessed the firearm or the car without the other and been
charged with an offense for each, appellant here could not have
forged a check until he had stolen the checks.
Although most conduct may be separable into distinct
offenses, we believe the focus of the inquiry is on the conduct
and whether that conduct is related--is it part of a common
scheme or plan? We agree with the Seventh Circuit's view that
"[t]he Sentencing Commission . . . intended a broad reading of
``related cases.'" United States v. Connor, 950 F.2d 1267, 1271
(7th Cir. 1991) (finding that sentences given for federal
conviction and state conviction were related when they were
brought pursuant to one arrest, despite separate trials).
In determining whether there was a common scheme or plan,
intent of the defendant is a crucial part of the analysis. In
the Tenth Circuit's decision in United States v. Coleman, 947
F.2d 1424 (10th Cir. 1991), cert. denied, 112 S. Ct. 1590 (1992),
a defendant was being prosecuted on drug charges. The court held
that a sentence for retaliation by the defendant against a
witness during a prior trial was not part of the scheme or plan
11
for which the defendant was presently being prosecuted because
the retaliation took place after the completion of the drug
offenses and therefore, could not be considered "``intimately
related'" to the drug charges as the defendant had suggested.
Id. at 1429-30.
The Seventh Circuit's decision in United States v. Ali,
951 F.2d 827 (7th Cir. 1992), decided a case factually similar to
the present one in which intent played a key role. In Ali, a
burglar argued that two prior convictions were related because
they were part of a common scheme. The two convictions were for
the robbery of a supermarket and the forgery of a money order
that was stolen during that robbery. To quote at length, for it
is quite relevant to our particular facts, the court in refusing
to find a common scheme or plan and relatedness, stated that:
No one robs without intending to obtain value from what
is taken, and if that is a financial instrument on
which a signature must be forged if it is to be cashed
or otherwise used to the robber's profit the forgery
could easily be thought a part of a single scheme or
plan. But "scheme" and "plan" are words of intention,
implying that the forgery and the robbery have been
jointly planned, or at least that it have been evident
that the commission of one would entail the commission
of the other as well. If the decision to commit
forgery arose only after the robber discovered what he
had taken, the forgery would be no more a part of the
scheme or plan to rob than would be retaliation against
a witness of whose existence the retaliator was unaware
when he planned the crime to which the witness has
testified; and Coleman even narrowly read would
therefore govern. A crime merely suggested by or
arising out of the commission of a previous crime is
not . . . related to the earlier crime in the special
sense of being part of a common scheme or plan.
Id. at 828 (emphasis added).
12
We hold that the appellant's possession of this stolen
mail was part of a common scheme and plan and that the prior
sentence for the forgery was for conduct that is related to the
offense in Count 4. Our conclusion rests on the fact that all of
the stolen mail recovered in the search of the appellant's
vehicle was in the form of checks or credit cards and that the
check forged to Korman Suites was from a sequence of blank checks
found within the stolen mail. Therefore, it is reasonable to
infer that the mail was stolen to find checks or other
instruments that could be converted to use through forgery.
Because we hold that the forgery conviction and Count 4
are parts of a common scheme or plan, the appellant's criminal
history score warrants a reduction by one point. This will
result in a criminal history score of twelve and a Category V
criminal history classification.4
C. Restitution
The appellant's final contention is that the district
court abused its discretion in requiring that restitution be made
in the amount of $34,282 to the bank involved in Count 1 because
it failed to make specific factual findings as to his ability to
pay.
Restitution is authorized by the Victim and Witness
Protection Act (VWPA), 18 U.S.C. § 3663(a), and is incorporated
into the Sentencing Guidelines at § 5E1.1. Our review is plenary
over whether an award is permitted, but we review the specific
4
Thus, a sentencing range of 27-33 months will result as opposed
to 30-37 months.
13
award for abuse of discretion. United States v. Seligsohn, 981
F.2d 1418, 1421 (3d Cir. 1992).
In exercising its supervisory powers, this court has
required the district courts to make "findings as to the factual
issues that are relevant to the application of the restitution
provisions of the VWPA." United States v. Palma, 760 F.2d 475,
480 (3d Cir. 1985). The district court is required to
consider the amount of the loss sustained by any victim
as a result of the offense, the financial resources of
the defendant, the financial needs and earning ability
of the defendant and the defendant's dependents, and
such other factors as the court deems appropriate.
Id. (quoting 18 U.S.C. § 3580(a)) (emphasis added). The district
court determined that the appellant could pay the amount
proscribed within the period of his supervised release. Our
review is limited to "whether the record supports the finding."
United States v. Sleight, 808 F.2d 1012, 1021 (3d Cir. 1987).
The district court did not impose a fine on appellant
citing his "inability to pay." Indigency at the time of
sentencing is, however, not a bar to ordering the appellant to
pay restitution. United States v. Logar, 975 F.2d 958, 962 (3d
Cir. 1992) (citing ten other circuits in accord with this rule).
The order of restitution, on the other hand, may not be based on
some future fortuitous event that may befall the appellant, but
must be based on realistic expectations. Id. at 962-64; cf.
United States v. Mitchell, 893 F.2d 935, 936 n.1 (8th Cir. 1990)
(rejecting government's argument that a "high amount of
14
restitution is proper on the chance that the defendant may win
the lottery").
The district court based its order of restitution on the
Pre-Sentence Report. The Report includes an analysis of the
financial impact on the victim, the bank, and details the
appellant's physical and mental health, education, vocational
skills, and financial ability to pay. Specific findings by the
district court determined that the appellant obtained a high
school diploma; claimed to have obtained thirty-six college
credits at the University of Alabama; was given an honorable
discharge from the military for medical reasons; was once a part-
owner of a hair salon in Philadelphia that generated a monthly
gross income of $1,500; earned $300 a night from 1990 until 1992
as a private disc jockey; and had worked for his stepfather's
business assisting in the design and installation of security
systems. The district court also adopted the findings of the
report that found the appellant had purchased a 1991 Ford Mustang
for $20,750 cash in 1991 and sold the same car in 1992 for
$13,000. Finally, the report noted that he could make $.15-.25
per hour and possibly up to $1.25 per hour while incarcerated
that could be applied to the amount of restitution ordered. The
district court stated at sentencing that "the defendant by
education and natural ability that God and his parents gave him
has the capacity to earn lawful income."
To sustain the district court's order of restitution, the
appellant must "realistically [be able to] pay [the amount]
within the five year period." Sleight, 808 F.2d at 1021. The
15
record supports a reasonable expectation that the appellant will
be able to make restitution. Putting aside the large amount of
money that he received for the sale of his car (or the amount he
paid for it in cash), the appellant's educational level and past
work experience indicate an ability to obtain gainful
employment.5
In light of the specific findings made by the Probation
Officer that were adopted by the district court, and the time
afforded the appellant in which to pay the amount, we cannot say
that the district court's restitution order constituted an abuse
of its discretion.
V.
We approve the district court's calculation of the amount
of loss involved, the separate calculation of the offenses listed
in paragraphs 51 and 52 of the Pre-Sentence Report, and the order
of restitution. We will vacate the district court's calculation
of the appellant's criminal history score as a result of our
holding that the forgery charge and Count 4 were part of a common
scheme or plan and should not have been counted separately. The
5
We note that 18 U.S.C. § 3663(g) authorizes the court to "revoke
probation or a term of supervised release . . . or hold a
defendant in contempt pursuant to section 3583(e) if the
defendant fails to comply with such order." Although the
ordering of restitution may not be an exact science, we also note
that § 3663(g) also permits the court, in determining whether to
revoke probation or supervised or to hold in contempt, may
"consider the defendant's employment status, earning ability,
financial resources, the willfulness of the defendant's failure
to pay, and any other special circumstances that may have a
bearing on the defendant's ability to pay." We read this section
as granting the court discretion to modify the restitution order
in the future depending on the defendant's circumstances.
16
sentence of the district court will be vacated and the matter
will be remanded to the district court for sentencing consistent
with this opinion.