United States v. Paul Petersen ( 2022 )

United States Court of Appeals
For the Eighth Circuit
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No. 20-3569
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United States of America
Plaintiff - Appellee
v.
Paul Petersen
Defendant - Appellant
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Appeal from United States District Court
for the Western District of Arkansas - Fayetteville
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Submitted: September 24, 2021
Filed: January 10, 2022
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Before KELLY, ERICKSON, and GRASZ, Circuit Judges.
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GRASZ, Circuit Judge.
Paul Petersen pled guilty to running a criminal enterprise that smuggled
pregnant Marshallese women into the United States and profited by putting their
infants up for adoption, in violation of 8 U.S.C. § 1324(a)(1)(A)(ii) and (v)(I). The
district court1 sentenced him to 74 months of imprisonment and fined him $100,000.
He appeals both the sentence and the fine. We affirm.
I. Background
Paul Petersen, a licensed attorney, devised and ran a criminal adoption scheme
where he and others working for him profited by paying to induce pregnant women
from the Marshall Islands to give up their infants for adoption. He arranged for the
women to travel to and within the United States to give birth and then adopt out their
infants. He instructed the women to lie about the nature of their travel, causing false
statements to be filed in state courts. His scheme involved economic coercion and
imposed harsh living conditions on some of the women.
Petersen’s scheme violated federal law. Under the Amended Compact of Free
Association between the United States and Marshall Islands, Marshallese citizens
can generally enter the United States as nonimmigrants without a visa but cannot
freely enter the United States for the purpose of placing a child up for adoption. Pub.
L. No. 108-188, 117 Stat. 2720, § 141(a), (b) (2003). Petersen thus directed the
pregnant Marshallese women to circumvent and violate federal immigration laws by
making, or being prepared to make, false statements to immigration authorities
regarding the purpose of their travel. The federal government charged Petersen with
nineteen counts in a superseding indictment.
Petersen pled guilty to the first count of the superseding indictment, charging
him with conspiracy to knowingly smuggle aliens into and throughout the United
States in violation of law for commercial advantage and private financial gain. See
8 U.S.C. § 1324(a)(1)(A)(ii), (v)(I). At sentencing, the district court calculated
Petersen’s recommended sentencing range under the United States Sentencing
Guidelines Manual (“Guidelines”) as 37 to 46 months of imprisonment and a fine
1
The Honorable Timothy L. Brooks, United States District Judge for the
Western District of Arkansas.
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range of $15,000 to $150,000. The district court then varied upward and sentenced
Petersen to 74 months of imprisonment. The district court also fined Petersen
$100,000.
II. Analysis
Petersen appeals the substantive reasonableness of his sentence and both the
imposition and amount of the fine. We address each in turn.
A. Substantive Reasonableness
We review the substantive reasonableness of a sentence for abuse of
discretion. United States v. Gifford, 991 F.3d 944, 946 (8th Cir. 2021). It is an
“unusual case when we reverse a district court[] sentence—whether within, above,
or below the applicable Guidelines range—as substantively unreasonable.” United
States v. Hewitt, 999 F.3d 1141, 1149 (8th Cir. 2021) (quoting United States v.
Feemster, 572 F.3d 455, 464 (8th Cir. 2009) (en banc)). A district court abuses its
sentencing “discretion when it (1) fails to consider a relevant factor that should have
received significant weight; (2) gives significant weight to an improper or irrelevant
factor; or (3) considers only the appropriate factors but in weighing those factors
commits a clear error of judgment.” Id. (cleaned up) (quoting Feemster, 572 F.3d at
461). None of these circumstances apply here.
Petersen confines his argument to the third circumstance, arguing the district
court committed two clear errors of judgment. He first faults the district court for
“double counting” factors under 18 U.S.C. § 3553(a) that were already accounted
for under the Guidelines. He also contends the district court erred in applying the
unwarranted sentencing disparity factor. Both contentions lack merit.
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First, courts may vary upward based on factors already considered under the
Guidelines if they determine “the weight the Guidelines assigned to a particular
factor was insufficient[.]” United States v. Thorne, 896 F.3d 861, 865 (8th Cir.
2018). The district court made that determination here. Specifically, it found that
the Guidelines failed to adequately account for Petersen’s role as an attorney and
public official, his role as a leader and organizer of the offense, and the duration of
his crime. The district court did not commit a clear error of judgment.
Second, the district court appropriately applied the unwarranted sentencing
disparity factor. See 18 U.S.C. § 3553(a)(6). The district court compared and
contrasted Petersen from other allegedly similar offenders, though it was not
required to do so. See United States v. Keys, 918 F.3d 982, 989 (8th Cir. 2019) (“We
have repeatedly declined to require district judges to compare and contrast the
defendant being sentenced with allegedly similar prior offenders.”). The district
court explained why it considered Petersen “unique” from others who received
shorter sentences: Petersen arranged the sale of infants for personal profit; he did so
for many years and in three states; he did so while serving as a public official; his
crime involved a significant fraudulent scheme against the State of Arizona; he
repeatedly lied and instructed others to do so; and he fully knew the illegality of his
conduct. Petersen does not show the district court committed a clear error of
judgment here. We thus affirm the substantive reasonableness of Petersen’s
sentence.
B. Fine
In this circuit, our precedent indicates that we review both the decision to
impose a fine and the fine’s amount for clear error. United States v. Morais, 670
F.3d 889, 893 (8th Cir. 2012).2 The district court did not clearly err here.
2
Because the imposition of a fine under U.S.S.G. § 5E1.2(a) is dependent upon
factual determinations, clear error review is appropriate as to the decision to impose
a fine. Other circuits review the reasonableness of the fine itself for abuse of
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First, the district court did not clearly err in deciding to impose a fine. The
Guidelines advise imposing a fine “in all cases” unless a defendant shows “he is
unable to pay and is not likely to become able to pay any fine.” U.S.S.G. § 5E1.2(a);
see also United States v. Kelley, 861 F.3d 790, 801 (8th Cir. 2017). The district court
found two alternative reasons for imposing a fine. It initially imposed a fine because
it determined Petersen likely had access to liquid assets owned by his ex-wife, with
whom he had reunified and was living. Even if this finding was erroneous, the
district court did not clearly err in alternatively imposing a fine based on Petersen’s
future ability to pay because of his prior legal education and employment.
Second, the district court did not err in imposing a fine within the Guidelines
range. See U.S.S.G. § 5E1.2(c)(3). Petersen argues both that the district court did
not consider the burden the fine would have on his four minor children and that it
improperly punished him for inappropriate reasons. Though the district court did
not explicitly reference Petersen’s children while imposing a fine, it was not required
to “provide detailed findings on each of the factors” for imposing fines, see Morais,
670 F.3d at 894, and it strains credulity to conclude the district court did not consider
Petersen’s children. Petersen’s children and their future welfare were discussed
throughout the sentencing hearing. This is sufficient consideration. See 18 U.S.C.
§ 3572(a)(2) (sentencing court must consider a fine’s burden on “any person who is
financially dependent on the defendant”). The district court must also consider the
need for just punishment in imposing a fine, so a heightened fine to punish Petersen
was not error. See 18 U.S.C. § 3553(a)(2)(A); U.S.S.G. § 5E1.2(d)(1). We thus
affirm the district court’s $100,000 fine.
discretion. See, e.g., United States v. Zukerman, 897 F.3d 423, 428 (2d Cir. 2018).
Whether this distinction can be made under our precedent is unclear and need not be
decided in this case as Petersen does not prevail under either standard.
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III. Conclusion
The district court did not abuse its discretion in sentencing Petersen to 74
months of imprisonment, nor did it clearly err in fining him $100,000. We affirm
the district court’s judgment.
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