United States v. Ondray Pulley ( 2010 )

In the
United States Court of Appeals
For the Seventh Circuit
No. 08-3363
U NITED S TATES OF A MERICA,
Plaintiff-Appellee,
v.
O NDRAY P ULLEY,
Defendant-Appellant.
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 06-CR-937—Virginia M. Kendall, Judge.
A RGUED N OVEMBER 4, 2009—D ECIDED F EBRUARY 17, 2010
Before C UDAHY, FLAUM, and E VANS, Circuit Judges.
C UDAHY, Circuit Judge. Ondray Pulley pleaded guilty
to one count of wire fraud related to a scheme to
defraud the United Airlines Employees’ Credit Union
(UAECU). He was sentenced to 87 months’ imprisonment
and ordered to pay restitution. Pulley now appeals,
arguing that the government’s lack of candor at his co-
defendant’s sentencing proceedings caused the district
court to make significant procedural errors at Pulley’s
2 No. 08-3363
sentencing. Specifically, he contends that the district
court, having determined at the sentencing of his co-
defendant Anthony Anderson that Anderson was
credible, did not want to reverse this determination. In
Pulley’s opinion, the district court was therefore forced
into making an impossible finding at Pulley’s sentencing
that both Pulley and Anderson were accurately testi-
fying even though their stories conflicted. Pulley also
challenges the district court’s sentence as unreasonable.
We affirm because the district court did not commit
procedural error in the course of Pulley’s sentencing
proceedings, and it appropriately considered the relevant
§ 3553(a) factors. It also did not err in sentencing Pulley
at the high end of the applicable Guidelines range.
I. Background
Pulley defrauded credit unions for many years. The
scheme unfolded as follows. First, Pulley and Anderson
obtained the personal identifying information (social
security number and the like) of a Chicagoland area
United Airlines employee and opened an account at the
credit union UAECU. Next, Pulley used several other
victims’ identifying information to add joint owners to
the account. After securing counterfeit checks, Pulley
and Anderson deposited money into the account,
procured debit cards in the victims’ names, and trans-
ferred money drawn from the victims’ actual bank ac-
counts into the fraudulent UAECU account. Then,
Pulley and Anderson flew to Las Vegas (using pro-
ceeds from the account) to cash in on their scheme. They
No. 08-3363 3
advanced themselves more than $100,000 while visiting
various posh Las Vegas hotels and casinos, ate a few
meals and divided the proceeds—Anderson received well
less than half. The two were indicted in connection
with this scheme on December 13, 2006 on several mail
and wire fraud counts, and Anderson was also indicted
for a fraud on the Members’ Advantage Credit Union
(Members’ Advantage). Whether Pulley was involved
in the Members’ Advantage scheme became a factual
dispute addressed in a long series of evidentiary sen-
tencing hearings.
By April 2007, Anderson had agreed to cooperate
with the government and met with government repre-
sentatives several times throughout the year. Pulley’s
case continued toward trial, and the government
planned to have Anderson testify against him. Anderson
eventually entered his plea in July (after several sched-
uling conflicts).
Anderson was sentenced on November 13, 2007. At
sentencing, the government explained that, despite his
significant criminal history, Anderson’s life appeared to
be on the right track, and the government had not had
any difficulties with him. After noting his extensive
criminal history, the district court granted the govern-
ment’s § 5K1.1 motion based on Anderson’s cooperation,
his successful efforts to reform himself after suffering
from a serious medical condition while serving a
prior prison term, and on his prompt and forthright
cooperation in the government’s investigation. Signifi-
cantly for this appeal, the government did not mention
4 No. 08-3363
to the district court the dispute regarding Pulley’s in-
volvement in the Members’ Advantage scheme, an
issue that called into question Anderson’s credibility, or
inform the court that it knew that Anderson had pur-
portedly attempted to contact a witness. As of the date
of Anderson’s sentencing hearing, the district court had
already received written filings prepared for Pulley’s
sentencing hearing detailing the dispute in question. At
the close of Anderson’s sentencing hearing, the district
court accepted the parties’ agreed-upon sentence of
38 months’ imprisonment as well as restitution, jointly
and severally with Pulley, in the amount of $190,000,
including amounts due to both UAECU and Members’
Advantage. Thirty-eight months was below the ap-
plicable Guidelines range of 57 to 71 months.
Pulley had entered his plea of guilty on July 5, 2007.
His sentencing was originally scheduled for October 3,
2007, before Anderson’s, but was continued on multiple
occasions, initially at Pulley’s request.1 Prior to sen-
tencing, Pulley filed objections to the presentence in-
vestigation report taking responsibility for a fraudulent
scheme at Affinity Credit Union (Affinity) and denying
his involvement in the Members’ Advantage scheme. The
Affinity scheme had not been noted in the presen-
tence report and therefore was not part of the applicable
Guidelines range calculations. Without these amend-
ments, Pulley’s advisory Guidelines range was 57-71
1
Typically, in the Northern District of Illinois, the cooperating
co-defendant is sentenced second.
No. 08-3363 5
months. Including the Affinity loss ($150,000) and ex-
cluding the Members’ Advantage loss ($120,000), the loss
amount from the UAECU scheme and other relevant
conduct totaled slightly over $400,000. Pulley’s amend-
ments raised his offense level two points and his sen-
tencing range to 70-87 months.
At Pulley’s first sentencing hearing (where he was not
present, for unknown reasons), on November 14, the
district court highlighted the factual conflict between
the government and Pulley regarding his participation
in the Members’ Advantage scheme. The district court
reset the sentencing and allowed several more hearings
to permit the parties to present witnesses—including
Pulley and Anderson—regarding this issue. At the close
of the hearings, the district court determined that the
government had not met its burden to prove that Pulley
participated in the Members’ Advantage scheme given
the lack of hard evidence and the difference between
methods employed in that scheme and those used in
Pulley’s earlier schemes. It also found, however, that
Anderson’s testimony, implicating Pulley in the Members’
Advantage scheme, was credible based in large part on
the consequences of any possible perjury—including the
possible revocation of Anderson’s plea deal. The
district court reconciled its decision to find credible two
witnesses’ conflicting stories by explaining that it was
plausible that two con men with a long history together,
like Anderson and Pulley, could have gotten confused
6 No. 08-3363
about events that occurred many years in the past.2 Con-
sistent with these findings, the district court amended
the restitution order entered at Anderson’s sentencing to
rescind Pulley’s joint liability. Further, the court declined
to accept the government’s position that Pulley should
be denied credit for acceptance of responsibility and
instead receive a two-level increase for obstruction of
justice for failure to admit his participation in the Mem-
bers’ Advantage scheme. Pulley was then sentenced to
87 months.
II. Standard of Review
Whether the district court followed proper sentencing
procedure is a legal question reviewed de novo. United
States v. Smith, 562 F.3d 866, 872 (7th Cir. 2009). Factual
findings are reviewed for clear error. United States v.
Heckel, 570 F.3d 791, 793 (7th Cir. 2009). Likewise, we
defer to a district court’s determination of witness credi-
bility, which can virtually never be clear error. United
States v. Acosta, 534 F.3d 574, 584 (7th Cir. 2008). The
substantive reasonableness of a sentence is reviewed for
an abuse of discretion and a correctly calculated, within-
Guidelines sentence is entitled to a presumption of rea-
sonableness. See Rita v. United States, 551 U.S. 338, 347
2
Pulley characterizes the district court’s findings of Pulley’s
and Anderson’s credibility as declaring a “tie.” The district court
does not use this language, and this characterization does not
fully reflect the district court’s reasons for finding both wit-
nesses credible despite their conflicting stories.
No. 08-3363 7
(2007); United States v. Scott, 555 F.3d 605, 608 (7th Cir.
2009).
III. Discussion
1. The district court approached the sentencing hear-
ing with an open mind.
A district court judge must approach a sentencing
hearing with an open mind and rely on meaningful
consideration of the evidence presented at the hearing. See
United States v. Pless, 982 F.2d 1118, 1129-30 (7th Cir. 1992).
Likewise, the defendant has a due process right to be
sentenced on the basis of accurate information. See United
States v. England, 555 F.3d 616, 622 (7th Cir. 2009); United
States v. Jones, 454 F.3d 642, 652 (7th Cir. 2006). Thus, if
the defendant establishes that the sentencing court relied
on critical, inaccurate information when announcing
the sentence, a defendant may be granted the remedy
of resentencing. See Jones, 454 F.3d at 652; Simonson v.
Hepp, 549 F.3d 1101, 1107 (7th Cir. 2008) (discussing
sentencing in the habeas context). Evidentiary standards
are, however, relaxed at sentencing, and a sentencing
court may permissibly rely on information that has
“sufficient indicia of reliability to support its probable
accuracy.” See United States v. Rollins, 544 F.3d 820, 838
(7th Cir. 2008) (internal citations omitted).
Even a district court’s unqualified statements about its
understanding of a defendant’s role in the conduct at
issue do not necessarily create reversible error, unless
the district court indicates that it has made up its mind
8 No. 08-3363
prior to receiving evidence. Compare Pless (holding
that the district court need not bring a tabula rasa to
issues fully aired at trial and relevant to sentencing
and, therefore, its strong statements before sentencing
did not deny the defendant a fair hearing) with
United States v. Schroeder, 536 F.3d 746, 753 (7th Cir.
2008) (holding that the defendant was denied a fair sen-
tencing hearing because the district court announced
its conclusion as to a relevant loss before receiving the
defendant’s evidence and appeared not to consider the
defense’s arguments).
Pulley contends his case is more like Schroeder than
like Pless. We disagree. In the present case the district
court not only identified the factual conflict at the outset
of Pulley’s sentencing, but it held exhaustive hearings
and heard Anderson’s and Pulley’s testimonies to explore
the disputed facts. In the end, the district court found
Anderson credible not because it had already done so at
his sentencing, but because it found that his story was
essentially internally consistent and that he had no
motive to lie. The district court amply demonstrated
that it approached Pulley’s sentencing with an open mind.
Pulley also contends that there was overwhelming
evidence that he did not participate in the Members’
Advantage scheme, implying that the district court was
wrong to find Anderson credible. As we noted above, a
district court’s credibility determinations are rarely
overturned and, in the present case, where the district
court provided sufficient reasons to find Anderson credi-
ble, we cannot agree that the district court erred.
No. 08-3363 9
2. Pulley has not provided sufficient evidence of
the government’s breach of its duty of candor to
require resentencing.
Pulley further argues that the government breached its
duty of candor and therefore the case should be re-
manded. He notes that, at Anderson’s sentencing, the
government did not raise or deny a factual conflict as to
Pulley’s participation in the Members’ Advantage
scheme even though, at Anderson’s sentencing, the
district court found Pulley jointly liable for Anderson’s
fraud in that scheme. Also, the government did not
inform the court that Anderson had purportedly at-
tempted to contact a witness.
It was, however, the government’s consistent position
at both sentencing hearings that Pulley participated in
the Members’ Advantage scheme, based, in part, on
Anderson’s testimony. Again, the district court found
that the government had not met its burden to prove
that Pulley participated in the Members’ Advantage
scheme. While the district court chose not to accept the
government’s version of events, that finding does not
imply that the government’s position was based on
known falsehoods, and Pulley has not provided evidence
sufficient to prove that the court’s findings were clear
error or, more importantly, that it relied on the govern-
ment’s version of events in sentencing him.
In addition, Pulley contends that the government
breached its duty of candor by suggesting that Pulley
10 No. 08-3363
only accepted responsibility for schemes for which the
government had hard evidence. Again, however, whether
Pulley only admitted schemes for which there was hard
evidence is a fact that the district court had adequate
opportunity to explore throughout the hearings and
therefore, whether or not the government breached its
duty of candor, the district court did not blindly rely on
the government’s purported contentions in sentencing
Pulley. In addition, whether Anderson contacted a wit-
ness is relevant to his sentencing, not Pulley’s, and
Pulley has not demonstrated that, even if the govern-
ment should have brought out this fact at Anderson’s
sentencing hearings, this error infected his own sen-
tencing. As discussed below, the district court properly
sentenced Pulley based on an individualized considera-
tion of the relevant statutory factors, not on irrelevant facts.
Likewise, other courts have determined that a breach of
candor at a cooperating defendant’s sentencing is
unlikely to affect the outcome of the other defendant’s trial
when the information comes out at trial and relevant
witnesses are subject to cross-examination. United States
v. Casas, 425 F.3d 23, 40-41 n.21 (1st Cir. 2005) (declining
to apply the exclusionary rule to testimony by the cooper-
ating defendant at the complaining defendant’s trial).
Given the hearings that the district court conducted, and
the factors the district court actually relied upon during
sentencing, Pulley has not met his burden to prove
that, even if the government breached its duty of candor,
the sentencing court relied on impermissible factors
in sentencing him.
No. 08-3363 11
3. The district court’s sentencing procedure is sound
and the sentence is substantively reasonable.
Pulley also argues that the sentencing court erred by
failing to address his arguments related to consideration
of the 18 U.S.C. § 3553(a) factors and by imposing an
unreasonably high sentence.
We note that the district court properly calculated the
applicable Guidelines range. Once the district court
determined that there was insufficient evidence of
Pulley’s participation in the Members’ Advantage scheme,
the court determined the offense level based on a base-
offense level of 7, an enhancement of 14 based on a loss
amount of more than $400,000 but less than $1 million, see
U.S.S.G. § 2B1.1 (2006), and a 2-level enhancement for
unlawful use of another’s identification, see U.S.S.G.
§ 2B1.1(b)(10)(C)(i). The district court subtracted 3 levels
for acceptance of responsibility and a timely plea, see
U.S.S.G. § 3E1.1(a)-(b), for a total offense level of 20. That
level, combined with an undisputed category VI criminal
history, produced a Guidelines imprisonment range of
70 to 87 months, with a statutory maximum of 30 years.
See 18 U.S.C. § 1343. The district court sentenced Pulley
to the high end of the Guidelines range.
Pulley argues that the district court procedurally erred
by failing to consider several of his meritorious argu-
ments. Specifically, Pulley contends that the district court
failed to consider his difficult upbringing, his extraordi-
nary acceptance of responsibility and the unwarranted
disparity between his sentence and Anderson’s. We
12 No. 08-3363
disagree.3 To comport with proper sentencing procedure,
the district court must review the § 3553(a) factors and
provide a record for us to review but it need not explicitly
articulate conclusions with respect to each factor. See
United States v. Panaigua-Verdugo, 537 F.3d 722, 728 (7th
Cir. 2008). The court is not required to consider every
“stock” argument, but it must address the defendant’s
principal arguments. See United States v. Villegas-Miranda,
579 F.3d 798, 801 (7th Cir. 2009); United States v. Young,
590 F.3d 467, 474 (7th Cir. 2009) (explaining that a
district court may pass over, without discussion, argu-
ments that are made as a matter of routine); United States
v. Cunningham, 429 F.3d 673, 679 (7th Cir. 2005). “A
short explanation will suffice where the context and
record make clear the reasoning underlying the district
court’s conclusion.” United States v. Schroeder, 536 F.3d
at 755 (citing Rita, 551 U.S. at 358). We conclude that
the district court adequately considered Pulley’s
principal arguments.
It addressed Pulley’s criminal history and re-
viewed the sentencing report that revealed his difficult
3
Pulley also contends that the district court should have taken
into account the circumstances of his criminal history category
because his criminal history score was barely a category VI. As
the district court is required to consider a defendant’s history
and characteristics, 18 U.S.C. § 3553(a)(1), and the district
court fulfilled this requirement, there is no separate need to
address the defendant’s position within a particular history
category separately from the individualized assessment of the
defendant.
No. 08-3363 13
upbringing. At sentencing, the district court applauded
Pulley for his ability to avoid drug abuse despite having
close relatives with dependency issues. Given that the
district court was aware of Pulley’s difficult history,
heard his arguments that he did not believe his past
caused him to commit his crimes and then proceeded to
address Pulley’s sentence in the context of the § 3553(a)
factors, the district court did not err in failing to provide
a lengthy explanation for its decision that Pulley’s
history and characteristics did not merit him a lower
sentence.
The district court also adequately provided reasons for
rejecting Pulley’s purportedly extraordinary acceptance
of responsibility. Pre-Booker, a district court could depart
from a guideline range for extraordinary acceptance
of responsibility, for example, if the defendant, against
his penal interest, provided significant, useful infor-
mation to the government. See United States v. Nguyen,
212 F. Supp. 2d 1008, 1031 (N.D. Iowa 2002) (defendant
helped exonerate an innocent co-defendant); United
States v. Rothberg, 222 F. Supp. 2d 1009, 1016-19 (N.D. Ill.
2002) (defendant significantly cooperated even though
there was initially no offer of a § 5K1.1). On the other
hand, if the defendant initially denies specific conduct
and the district court determines that it occurred as
testified to, the defendant cannot claim that he took
responsibility for his actions. See United States v.
Mancillas, 183 F.3d 682, 711 (7th Cir. 1999).
By August 2007, Pulley admitted his role in the
Affinity scheme. Although the Affinity scheme was not
included as relevant conduct in the presentence investi-
14 No. 08-3363
gation report, the government was aware of the scheme
(it was listed in the government’s Version of Events, filed
in late July 2007) and aware that the scheme involved
several phony accounts opened under names Pulley
had used in previous schemes. At sentencing, the
district court declined to find that Pulley had extraordi-
narily accepted responsibility and noted that Pulley had
a long criminal history involving fraud and, based on
the evidence it received, concluded that Pulley had not
“learned his lesson. ”The district court provided a suffi-
cient explanation of its decision to reject the defendant’s
arguments regarding his extraordinary acceptance of
responsibility and likewise did not abuse its discretion
in deciding that his conduct did not rise to the level of
extraordinary acceptance.
In addition, Pulley contends that the similarities
between him and Anderson suggest that Pulley’s sen-
tence should have been closer to Anderson’s 38 months.
While Pulley properly contends that § 3553(a)(6) does not
allow unwarranted sentencing disparities between co-
defendants, see, e.g., United States v. Statham, 581 F.3d
548, 556 (7th Cir. 2009); United States v. Bartlett, 567 F.3d
901, 908, 909 (7th Cir. 2009), warranted disparities are
allowed. Moreover, a district court that sentences
within the Guidelines necessarily gives weight and con-
sideration to avoiding unwarranted disparities. See
Bartlett, 567 F.3d at 908 (citing Gall v. United States, 552
U.S. 38, 54 (2007)). The two defendants began cooperating
at different times and, while the court determined
that Anderson had changed his lifestyle after his illness,
it concluded that Pulley had not similarly benefitted
No. 08-3363 15
from his previous incarcerations. The district court ade-
quately considered Pulley’s arguments regarding unwar-
ranted sentencing disparities and did not abuse its dis-
cretion in rejecting them as bases for a lower sentence.
See Statham, 581 F.3d at 556 (holding that a co-defendant
differed from the defendant for sentencing purposes
because the co-defendant cooperated, pleaded and had
a less extensive criminal history).
As noted above, if the district court provides an
adequate statement of reasons, consistent with § 3553(a),
for believing that the sentence is appropriate, and it is
within the Guidelines range, we presume the sentence
is substantively reasonable. See Rita, 551 U.S. at 347;
United States v. Turner, 569 F.3d 637, 640 (7th Cir. 2009).4
4
Although neither party raised this point, we note that the
Statement of Reasons provides an incorrect lower bound to the
sentencing range and should be amended to accurately reflect
the range that was discussed during sentencing once the
district court made its determination as to the disputed facts.
Although we rarely exercise our powers to correct clerical
errors, see United States v. Bonner, 522 F.3d 804, 808-09 (7th Cir.
2008), we have done so in the past, see United States v. Boyd,
208 F.3d 638, 649 (7th Cir. 2000), vacated on other grounds, 531
U.S. 1135 (2001), and we see no need to go through the exercise
of remanding to allow the district court to direct its clerk to
correct the sentencing range. We therefore direct the clerk to
amend the Statement of Reasons to adequately reflect that the
applicable range was 70 to 87 months. See Fed. R. Crim. P.
1(a)(1) (“These rules govern the procedure in all criminal
proceedings in . . . the United States courts of appeals”), 1(b)(2)-
(continued...)
16 No. 08-3363
Given the district court’s careful consideration of
Pulley’s arguments and its articulation of a sentence
based on the § 3553(a) factors, we have no reason to
conclude that it abused its discretion by rejecting several
of Pulley’s arguments and sentencing him to the high
end of the applicable guideline range. The district court
is therefore
A FFIRMED.
4
(...continued)
(3) (“court” is defined to include a federal appeals court
judge), 36 (“After giving notice it considers appropriate, the
court may at any time correct a clerical error in judgment, order,
or other part of the record. . .”).
2-17-10