United States v. Patton

FILED
United States Court of Appeals
UNITED STATES COURT OF APPEALS Tenth Circuit
FOR THE TENTH CIRCUIT September 6, 2017
_________________________________
Elisabeth A. Shumaker
Clerk of Court
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
No. 16-6359
v. (D.C. No. 5:16-CR-00115-C-1)
(W.D. Okla.)
SUSIE JANE PATTON,
Defendant - Appellant.
_________________________________
ORDER AND JUDGMENT*
_________________________________
Before TYMKOVICH, Chief Judge, BALDOCK, and BRISCOE, Circuit Judges.**
_________________________________
The sole issue in this appeal is whether Defendant Susie Jane Patton’s above-
Guidelines sentence is substantively reasonable.
Our story starts in July 2015 when Defendant, in a different criminal case,
pleaded guilty to wire fraud in violation of 18 U.S.C. § 1343 after she embezzled tens
of thousands of dollars from her previous employer, Silverado Reconditioning
Services, Inc. (“Silverado Reconditioning”). And at her sentencing six months later
*
This order and judgment is not binding precedent, except under the doctrines
of law of the case, res judicata, and collateral estoppel. It may be cited, however, for
its persuasive value consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
**
After examining the briefs and appellate record, this panel has determined
unanimously to honor the parties’ request for a decision on the briefs without oral
argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
submitted without oral argument.
in January 2016, Defendant begged the district court for leniency. She explained that
she had embezzled the funds to fuel her gambling addiction and was now regularly
participating in Gamblers Anonymous. She further described how she had divulged
her crime to her new employer, a family-owned company named D&D Design and
Manufacturing, Inc. (“D&D Design”), and how the owners of D&D Design had still
embraced her with open arms and allowed her to continue working for them. In fact,
those same owners—at least one of whom came to support Defendant during her
sentencing—had asked her to become an authorized signer on D&D Design’s
business bank account, but Defendant told the district court she had refused because
I knew if I ever went back to my old ways, that the accessibility was too
much, and I knew that. And I wasn’t going to allow there to be any
improprieties shown while I worked for these good people that worked so
hard . . . to build a business.
She concluded by avowing that if the district court gave her “an opportunity to show
the Court and everyone around [her] how much [she had] changed,” there would
“never be a question” that she had “learned” from the error of her ways.
After hearing a response from the government, which cautioned the district
court that Defendant was a “very accomplished con artist” who had been “engaged in
ongoing criminal conduct” since 1999, the district court informed Defendant that it
was “not going to assume” that “everything” Defendant had declared was a total
fabrication. For that reason, the district court mercifully sentenced Defendant to
21 months’ imprisonment, which was a sentence at the bottom of the applicable
Guidelines range, and ordered her to make the necessary restitution payment to
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Silverado Reconditioning. Further, the district court generously gave Defendant
thirty days “to take care of whatever needs to be taken care of” before she was
required to voluntarily report to prison in late February. Until that time, however, the
district court stressed that “all conditions of [Defendant’s] pretrial release [would]
continue to apply.”
Sadly, everyone involved soon came to see that the government was correct:
Defendant was merely a wolf in sheep’s clothing. In June 2016, several months after
her sentencing for wire fraud in connection with her employment at Silverado
Reconditioning and while Defendant was serving her term of imprisonment in
connection with that crime, a grand jury charged Defendant with fifteen counts of
wire fraud after it came to light that she had embezzled over a hundred thousand
dollars from D&D Design.
Defendant’s methods were intricate. She would first create false invoices
using the names of actual vendors of D&D Design and then input these invoices into
the company’s accounting system. The accounting system would accordingly print a
check for the payment of the invoices, and Defendant would present these checks to
the owners of D&D Design to sign. Finally, after obtaining a signature, Defendant
would deposit the checks into one of several bank accounts that she controlled.
Defendant engaged in this pattern with forty-nine different checks—yes, forty-nine—
and embezzled a combined total of $107,452.08 from D&D Design.
But even more concerning than how Defendant defrauded D&D Design is
when she defrauded it. She initially obtained twenty-nine of the forty-nine checks
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before pleading guilty to wire fraud in the Silverado Reconditioning case. She then,
however, proceeded to obtain the remaining twenty checks after pleading guilty and
while on conditions of release in that case. And of those twenty she obtained while
on release, all but one were created before her sentencing in January 2016. In fact, a
mere two days before the sentencing, Defendant embezzled another $3,833.02 check
from D&D Design. The obvious conclusion one must necessarily draw, therefore, is
that as Defendant was begging the district court for leniency based on her purported
reformation—and, mind you, as one of the owners of D&D Design sat in the gallery
of the same courtroom as a show of his belief in and support of her—she was all the
while fully aware of nearly fifty instances where she had secretly embezzled loads of
money from D&D Design and, even more, had done so almost twenty times while on
conditions of release. And lest the reader think that the sentencing proceeding itself
was Defendant’s “Aha!” moment wherein she fully realized just how serious the
ramifications of her illegal activities were, it is worth noting that she embezzled
another $2,871.71 check after sentencing—that is, during the thirty days the district
court gave her to tidy matters up before she had to report to prison and while her
conditions of release continued to apply.
Defendant eventually pleaded guilty to two counts of the indictment in
exchange for dismissal of the remaining thirteen counts: (1) Count 7, which regarded
a check she fraudulently obtained before her guilty plea in the Silverado
Reconditioning case, and (2) Count 14, which regarded a check she fraudulently
obtained after her guilty plea and while on conditions of pretrial release in the
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Silverado Reconditioning case. As previously mentioned, both of these counts
constituted wire fraud in violation of 18 U.S.C. § 1343. In addition, Count 14
implicated 18 U.S.C. § 3147, which is “strictly a sentencing enhancement provision”
for offenses committed while under conditions of release. United States v. Mowery,
No. 16-2247, 2017 WL 2297390, at *3 (10th Cir. May 25, 2017) (unpublished)
(quoting United States v. Browning, 61 F.3d 752, 756 (10th Cir. 1995)); see also id.
(“[Section] 3147 doesn’t set forth ‘a separate offense of conviction.’” (quoting
Browning, 61 F.3d at 756)). Section 3147 mandates that “[a] person convicted of an
offense committed while released . . . shall be sentenced, in addition to the sentence
prescribed for the [underlying] offense to . . . a term of imprisonment of not more
than ten years if the offense is a felony.” 18 U.S.C. § 3147 (emphasis added).1
1
The full text of section 3147 reads:
A person convicted of an offense committed while released under
this chapter shall be sentenced, in addition to the sentence prescribed for
the offense to—
(1) a term of imprisonment of not more than ten years if the
offense is a felony; or
(2) a term of imprisonment of not more than one year if the
offense is a misdemeanor.
A term of imprisonment imposed under this section shall be consecutive
to any other sentence of imprisonment.
18 U.S.C. § 3147. Note that this section requires a conviction—not just the
commission—of an offense, alleviating the potential constitutional issues raised in
United States v. Haymond. See United States v. Haymond, __ F.3d __, 2017 WL
3752465 (10th Cir. Aug. 31, 2017) (holding that 18 U.S.C. § 3583(k), which
mandates revocation of supervised release and imprisonment of no less than five
years for the commission—not the conviction—of certain crimes by defendants
required to register under the Sex Offender Registration and Notification Act,
violates the Fifth and Sixth Amendments).
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Further, that additional term of imprisonment “shall be consecutive to any other
sentence of imprisonment.” Id.
Section 2B1.1 of the 2015 edition of the United States Sentencing Guidelines
set the base offense level for Defendant’s sentence at 7. See U.S.S.G. § 2B1.1(a)(1).
Further, several upward adjustments served to increase her total offense level: (1) an
8-level increase because the total amount of loss exceeded $95,000, see U.S.S.G.
§ 2B1.1(b)(1)(E); (2) a 2-level increase because her embezzlement scheme involved
“sophisticated means,” see U.S.S.G. § 2B1.1(b)(10)(C); (3) a 2-level increase
because she abused the position of trust she held at D&D Design, see U.S.S.G.
§ 3B1.3; and finally (4) a 3-level increase because the sentencing enhancement under
§ 3147 for being convicted of an offense committed while under conditions of release
applied, see U.S.S.G. § 3C1.3. Thus, after factoring in a 3-level decrease for
Defendant’s acceptance of responsibility, Defendant’s total offense level was 19.
Coupled with her rather extensive category IV criminal history, a total offense level
of 19 corresponded to a Guidelines range of 46–57 months’ imprisonment.
Further, Application Note 1 to U.S.S.G. § 3C1.3 specified how the district
court should go about applying the mandatory sentencing enhancement under
18 U.S.C. § 3147 that must run consecutive to the underlying sentence of
imprisonment. According to Note 1,
the court, in order to comply with the statute, should divide the sentence
on the judgment form between the sentence attributable to the
underlying offense and the sentence attributable to the enhancement.
The court will have to ensure that the “total punishment” (i.e., the
sentence for the offense committed while on release plus the statutory
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sentencing enhancement under 18 U.S.C. § 3147) is in accord with the
guideline range for the offense committed while on release,
including . . . the [3-level upward] adjustment provided by the
enhancement in this section.
U.S.S.G. § 3C1.3, comment. (n.1). Applying that directive to Defendant’s case,
Note 1 thus instructed the district court to divvy up Defendant’s Guidelines sentence
of 46–57 months’ imprisonment to reflect that that range already accounted for the
enhanced, consecutive sentence under § 3147 via a 3-level upward adjustment. See
id. So, for example, if the district court were to have decided that a “total
punishment” of 57 months’ imprisonment—a sentence at the high end of the
Guidelines range—was appropriate, Note 1 would have required it to attribute, say,
the first 51 months’ imprisonment to the underlying offense and the last 6 months’
imprisonment to the enhanced sentence under § 3147. See id. Such a methodology
“enables the [district] court to determine and implement a combined ‘total
punishment’ consistent with the overall structure of the [G]uidelines, while at the
same time complying with the statutory requirement [under § 3147].” U.S.S.G.
§ 3C1.3, comment. (backg’d).
Needless to say, when the time came for sentencing in the D&D Design case,
the district court was not pleased. Given Defendant’s despicable actions, it indicated
early on that it was considering imposing a sentence higher than the Guidelines range
of 46–57 months’ imprisonment. Initially, it felt it should do so via a departure from
the Guidelines because of its belief that Note 1 of U.S.S.G. § 3C1.3 “completely
gutted” § 3147 of its power—that is, improperly limited the amount of punishment a
7
court could apply under that statute. But after granting a continuance of sentencing to
give the parties a few additional weeks to address this inclination, the district court
distanced itself from its previous, mistaken belief that Note 1 incorrectly applied § 3147
as a general matter, cf., e.g., United States v. McCary, 58 F.3d 521, 523–24 (10th Cir.
1995) (noting that the district court “correctly followed” the identically written
precursor to Note 1 of § 3C1.3); Mowery, 2017 WL 2297390, at *2–3 (noting, albeit
in an unpublished opinion, that Note 1 of § 3C1.3 generally requires the district court
to render a total punishment that falls within the Guidelines range for the offense
committed while on release), and instead indicated that the 3-level enhancement under
U.S.S.G. § 3C1.3 was simply insufficient given Defendant’s conduct in this specific
case. It also changed course and decided to grant an upward variance instead:
I find that there are circumstances present in this case of a kind and
to a degree not taken into account by the Sentencing Commission
warranting a departure. Those circumstances are that this is not a case
where one offense was undertaken while the defendant was on pretrial
release. It was, in fact, 20 different checks, 20 different thefts, one days
before and one days after sentencing. I don’t think this is what the
Sentencing Commission had in mind when it provided basically a zero- to
six-month punishment for committing an offense while on pretrial release.
That is what the guidelines permit, a [3]-level addition [pursuant to
U.S.S.G. § 3C1.3] to be served consecutively.
And I find a departure is warranted in this case. However, I am
going to, instead, vary upward, because I think it’s cleaner, simpler, and I
do so based on the number of times that [Defendant] stole while she was on
supervised release, the number of times she stole all together.
The district court then further discussed why it felt an upward variance was warranted
under 18 U.S.C. § 3553(a):
The nature and circumstances of this offense are far beyond the
normal offense in that the victims treated and responded to [Defendant] as
8
though she were their daughter. She so actively misled, misrepresented her
own self in order to have access to this money, it takes it outside of the
normal range of nature and circumstances of this offense.
Even more so, however, clearly prison has not at this point been a
deterrent for [Defendant]. She has received less than two-year sentences
three different times in federal court, starting with probation and then two
revocations of that probation sentence, and then the sentence that I imposed
last January [in the Silverado Reconditioning case]. None of these terms
have had any effect on her, apparently, as she has continued in the same
course of conduct. So I believe a significantly longer sentence is necessary
to afford a deterrent to her criminal conduct, and certainly to protect the
public.
See 18 U.S.C. § 3553(a)(1), (a)(2)(B), (a)(2)(C). In its Statement of Reasons, the district
court additionally made clear that it varied upward “to reflect the seriousness of the
offense, to promote respect for the law, and to provide just punishment for the
offense.” See 18 U.S.C. § 3553(a)(2)(A).
Ultimately, the district court felt that an above-Guidelines sentence of 82
months’ imprisonment was most appropriate:
I have struggled with . . . how to reasonably explain the variance I’m
going to impose. And this is what I have done: I have removed—and I
want to make it clear, I am not changing any ruling on the guidelines. They
have been correctly calculated in the presentence report. But in trying to
reach a fair upward variance, I removed the three levels given for the
commission of—well, for Count 14, commission of an offense while on
pretrial release, from the guideline calculation, which results in a 33- to 41-
month guideline, and I have decided to impose that twice, once for Count 7
and once for Count 14. And the top of that range is 82 months, and that’s
where I come out is an 82-month sentence, 25 of which is attributed to
Count 14 and 57 of which—that is the original top of the guideline range on
Count 7.
For these reasons, I sentence you to the custody of the Bureau of
Prisons for a term of 82 months, this consists of 57 months on Count 7, 25
months on Count 14, both to be served consecutively to each other . . . .
….
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I want to reiterate for clarity, if clarity can be reached based on this
sentence I have imposed, I am not departing upward; I am varying upward.
I am sentencing within guidelines on Count 7 and varying on Count 14.
The district also mandated, in accordance with U.S.S.G. § 5G1.3(a), that Defendant’s 82-
month sentence run consecutively to her 21-month sentence “currently being served” in
the Silverado Reconditioning case. Finally, the district court ordered Defendant to make
full restitution in the amount of $107,452.08 to the owners of D&D Design and imposed
three years’ supervised release on Defendant after her prison term ended.
Defendant now appeals her sentence. We first note that pursuant to her plea
agreement, she has waived her right to challenge the amount of restitution the district
court required her to pay. She has also waived her right to appeal the manner in which
the district court determined her sentence. Defendant has, however, preserved her right
to appeal her above-Guidelines sentence for its substantive reasonableness—that is,
“whether the length of [her] sentence is reasonable given all the circumstances of the
case in light of the factors set forth in 18 U.S.C. § 3553(a).” United States v. Craig,
808 F.3d 1249, 1261 (10th Cir. 2015) (quoting United States v. Conlan, 500 F.3d
1167, 1169 (10th Cir. 2007)). As a result, we need not concern ourselves with the
district court’s precise methodology in attributing 57 months’ imprisonment to Count
7 and 25 months’ imprisonment to Count 14—i.e., the manner in which the district
court determined her sentence. Instead, we must answer only one simple question: Is
Defendant’s total above-Guidelines sentence of 82-months’ imprisonment too long?
We review a sentence for substantive reasonableness using the familiar abuse-of-
discretion standard. Gall v. United States, 552 U.S. 38, 51 (2007). Under that standard,
10
we will reverse “only if the sentence imposed was ‘arbitrary, capricious, whimsical, or
manifestly unreasonable.’” United States v. DeRusse, 859 F.3d 1232, 1236 (10th Cir.
2017) (quoting United States v. Gantt, 679 F.3d 1240, 1249 (10th Cir. 2012)).
Further, we may not presume that Defendant’s above-Guidelines sentence is
automatically unreasonable. Gall, 552 U.S. at 51. Instead, we “must give due
deference to the district court’s decision that the § 3553(a) factors, on a whole, justify
the extent of the variance,” and “[t]he fact that [we] might reasonably have concluded
that a different sentence was appropriate is insufficient to justify reversal of the
district court.” Id.
We have little trouble concluding that the district court did not abuse its
discretion in imposing a sentence 25 months over the applicable Guidelines range.
For one thing, as the district court made abundantly clear, Defendant didn’t commit
just a single offense while on conditions of release in the Silverado Reconditioning
case. Instead, she embezzled money twenty different times after pleading guilty in
that matter (nineteen times before sentencing and one time after sentencing). The
district court was entirely justified in determining that this recurring illegal conduct
while on release, which most readily implicates the need for the sentence imposed to
reflect the seriousness of the offense, see 18 U.S.C. § 3553(a)(2)(A), was not
adequately accounted for by the 3-level upward adjustment under § 3C1.3 alone and
thus demanded an upward variance.
Further, the district court did not abuse its discretion when it concluded that an
upward variance was needed to deter Defendant from future illegal conduct and to
11
protect the public from her crimes. See 18 U.S.C. § 3553(a)(2)(B), (C). As evidenced
by Defendant’s significant criminal history and her illegal conduct while on release,
Defendant simply cannot stop defrauding others, embezzling from others, and
committing other financial crimes. As the government labeled her in the Silverado
Reconditioning case, she is a “very accomplished con artist,” and Defendant’s past
actions up to and including those in the current D&D Design matter give us no reason
to believe she will (or is even willing to) change her deceptive and harmful ways.
But we believe the nature and circumstances of Defendant’s offense are the
most disgraceful part of this case. See 18 U.S.C. § 3553(a)(1). All the while knowing
that she had utilized complex and sophisticated methods to defraud D&D Design nearly
fifty different times by that point, Defendant stood up in front of the district court and the
owners of D&D Design and asserted that she had changed her ways for the better. These
same owners—people who came to love Defendant “as though she were their
daughter”—truly believed she had changed, and Defendant was perfectly content letting
them maintain that belief. Defendant even actively held herself out as a redeemed sinner
who “wasn’t going to allow there to be any improprieties shown while I worked for these
good people that worked so hard . . . to build a business.” And then, just several days
after that sentencing concluded, she embezzled another couple thousand dollars from the
very people who had so adamantly defended her. Such blatant deception was and still is
suffocating. We therefore believe the district court not only did not abuse its discretion in
varying upward to an 82-month sentence but also came to the correct conclusion in doing
so.
12
Defendant’s best (yet ultimately unpersuasive) counterargument is that the
district court was mistaken in its belief that U.S.S.G. § 3C1.3 did not adequately
account under 18 U.S.C. § 3147 for the number of times she embezzled money from
D&D Design while on conditions of release. To be sure, Defendant notes that her
Guidelines range of 46–57 months’ imprisonment already accounted for her conduct
while on supervised release via the 3-level upward adjustment under § 3C1.3, and
without this 3-level upward adjustment her Guidelines range would have been 33–41
months’ imprisonment. In other words, the 3-level upward adjustment by itself
added thirteen months to the bottom of her Guidelines range and sixteen months to
the top. Contrary to the district court, Defendant claims this did adequately account
for the multiple offenses she committed while on conditions of release.
And if any ambiguity remains, Defendant further argues that the 8-level
increase in her sentence based on the total amount of loss exceeding $95,000 also
accounted for her conduct while on release. Indeed, she notes that she incurred
$44,638.74 of the $107,452.08 she ultimately embezzled while on conditions of
release, which means that she embezzled only $62,813.34 before she was put under
those conditions. A $62,813.31 loss amount, in turn, would have resulted in only a 6-
level increase. See U.S.S.G. § 2B1.1(b)(1)(D) (increasing by 6 levels any loss
amount over $40,000 but under $95,000). Thus, Defendant’s conduct while on
release—embezzling an additional $44,638.74—transformed what would have been a
6-level increase into an 8-level increase. While this 2-level difference may seem
fairly inconsequential to the untrained eye, Defendant notes the rather large effect it
13
had: if the 6-level increase had been used, her Guidelines range would have been 37–
46 months’ imprisonment, which was nine months lower at the bottom and eleven
months lower at the top than her eventual Guidelines range of 46–57 months’
imprisonment. Again, Defendant contends that this increase, especially when viewed
in conjunction with the 3-level increase under § 3C1.3, more-than-adequately
accounted for her conduct while under conditions of release.
While these arguments have a certain amount of superficial appeal, they do not
establish how the district court’s decision to vary upward by 25 months was arbitrary,
capricious, whimsical, or manifestly unreasonable. All they show is that the district
court could have reasonably come to the conclusion that the Guidelines did
adequately account for Defendant’s conduct, which is insufficient to justify a
reversal. Gall, 552 U.S. at 51. After giving “due deference to the district court’s
decision that the § 3553(a) factors, on a whole, justify the extent of the variance,” id.,
we still do not believe the district court—the tribunal with expertise in the case—
abused its discretion in deciding to grant an upward variance. To be sure, we have
affirmed much larger variances from Guidelines sentences in more controversial
matters on the basis that the district court is in a “superior position to find facts and
judge their import under § 3553(a) in the individual case.” DeRusse, 859 F.3d at
1237 (quoting Gall, 552 U.S. at 51); see, e.g., id. at 1233–41 (affirming a time-served
sentence of 70 days’ imprisonment, a massive downward variance from the
Guidelines range of 108–135 months’ imprisonment, in a kidnapping case where the
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perpetrator abducted his ex-girlfriend at gunpoint and attempted to imprison her at a
bed-and-breakfast).
Defendant proffers several other arguments based on a series of statistics and
studies suggesting that (1) her sentence should have taken into more consideration
some form of mental health treatment for her gambling addiction, (2) longer prison
sentences aren’t particularly effective in deterring future criminal conduct, and
(3) her long prison sentence would be needlessly expensive. We can easily dispose
of these arguments for the same reason we noted previously: they do not account for
the district court’s intimate familiarity with the specific details of her case. We still
see no abuse of discretion.
As a final point, we believe it is worth mentioning that while we are
sympathetic to the fact that a severe gambling addiction may have fueled Defendant’s
crimes, any such addiction does not by itself outweigh the other sentencing
considerations that the district court took into account in this case. For her own sake,
we fervently hope that Defendant can find a way to treat any addiction she may have
so as to stem the tide of any future crimes she may be tempted to commit. That said,
her alleged overwhelming urge to gamble does not override the harm she has caused
others—particularly the owners of D&D Design—by her past actions.
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AFFIRMED.
Entered for the Court
Bobby R. Baldock
Circuit Judge
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