United States v. Valente

17-2311-cr
United States v. Valente
17‐2311‐cr
United States v. Valente
1 In the
2 United States Court of Appeals
3 For the Second Circuit
4
5
6 August Term, 2018
7 No. 17‐2311‐cr
8
9 UNITED STATES OF AMERICA,
10 Appellee,
11
12 v.
13
14 SCOTT VALENTE,
15 Defendant‐Appellant.
16
17
18
19 Appeal from the United States District Court
20 for the Northern District of New York
21 No. 1:15‐cr‐00124‐GLS‐1
22
23
24 ARGUED: NOVEMBER 1, 2018
25 DECIDED: FEBRUARY 15, 2019
26
27
28 Before: RAGGI, LYNCH and DRONEY, Circuit Judges.
29
30
31 Appeal  from  an  amended  judgment  of  conviction  of  the  United  States
1
1 District  Court  for  the  Northern  District  of  New  York  entered  on  July  21,  2017
2 (Sharpe,  J.).  The  defendant  contends  that  his  sentence  was  procedurally  and
3 substantively unreasonable and that the district court lacked authority to impose
4 the amended restitution order that it imposed on resentencing. We VACATE in
5 part  the  district  court’s  sentence  of  incarceration  as  procedurally  unreasonable
6 because of an incorrect criminal history finding and REMAND on that issue, but
7 we AFFIRM the district court’s imposition of the amended restitution order.
8
9 Judge Lynch, Circuit Judge, concurs in a separate opinion.
10
11
12 STEVEN  D.  CLYMER  (Richard  D.  Belliss,  Assistant
13 United States Attorneys, on the brief), for Grant C.
14 Jaquith,  United  States  Attorney  for  the  Northern
15 District of New York, Syracuse, NY, for Appellee.
16
17 MOLLY  CORBETT  (James  P.  Egan,  on  the  brief),  for
18 Lisa  A.  Peebles,  Federal  Public  Defender  for  the
19 Northern  District  of  New  York,  Albany,  NY,  for
20 Appellant.
21
22 DRONEY, Circuit Judge:
23   Scott  Valente  (“Valente”)  appeals  from  the  district  court’s  amended
24 judgment of conviction entered on July 21, 2017. He contends that his sentence was
25 procedurally  and  substantively  unreasonable  and  that  the  district  court  lacked
26 authority to impose the amended restitution order on resentencing. We vacate a
27 portion  of  the  district  court’s  sentence  of  incarceration  as  procedurally
2
1 unreasonable because of an incorrect criminal history finding, but we affirm the
2 amended restitution order.
3 VALENTE’S GUILTY PLEA AND SENTENCE
4   On  May  11,  2015,  Valente  pleaded  guilty  to  a  three‐count  information
5 charging Securities Fraud in violation of 15 U.S.C. § 78j (Count 1), Mail Fraud in
6 violation of 18 U.S.C. § 1341 (Count 2), and Obstructing and Impeding the Internal
7 Revenue Laws in violation of 26 U.S.C. § 7212(a) (Count 3). On November 20, 2015,
8 the United States District Court for the Northern District of New York (Sharpe, J.)
9 sentenced Valente to 240 months on each of the first two counts, and 36 months on
10 Count  3,  all  to  run  concurrently,  and  to  three  years  of  supervised  release.  The
11 district  court  also  ordered  Valente  to  pay  restitution  in  the  amount  of
12 $8,200,579.69.  Judgment  was  entered  the  same  day.  Valente  appealed,  and  this
13 Court  remanded  to  the  district  court  to  reconsider  the  assessment  of  certain
14 criminal history points to Valente’s criminal history score. United States v. Valente,
15 688 F. Appʹx 76, 79–80 (2d Cir. 2017) (summary order). On July 20, 2017, the district
16 court  reconsidered  its  application  of  those  points,  applied  them  again,  and
17 resentenced Valente to the same terms of imprisonment and of supervised release
3
1 as  it  had  previously  imposed.  The  district  court  also,  over  defense  counsel’s
2 objection,  increased  the  prior  restitution  amount  to  $8,616,113.39.  The  amended
3 judgment  was  entered  on  July  21,  2017,  and  a  second  amended  judgment  was
4 entered on August 8, 2017.1
5 THE UNDERLYING FRAUDS
6   This case arises out of frauds that Valente, a former registered investment
7 broker,  perpetrated  on  the  clients  of  The  ELIV  Group,  LLC  (“ELIV”),  an
8 unregistered investment and consulting group that Valente owned and operated
9 in Albany, New York. Valente established ELIV in 2010 after he was barred in 2009
10 from  associating  with  Financial  Industry  Regulatory  Authority  (“FINRA”)
11 members, based on findings that he had made unauthorized trades for customers
12 and provided false written account information to customers. To establish ELIV
13 and open brokerage accounts on its behalf, Valente arranged for his wife to be the
14 nominal owner of ELIV, even though she had never been registered as a broker or
15 held any type of brokerage license. Valente was ELIV’s de facto owner, as well as
1  The second amended judgment was entered because of a clerical error, and it is not challenged
here except for the same reasons as the appeal of the amended judgment.
4
1 its manager and sole employee.
2   Valente recruited investors for ELIV through hotel conferences, seminars,
3 and  references  from  existing  clients,  and  he  used  investors’  funds  to  purchase
4 various  securities.  Valente  represented  that,  in  exchange  for  managing  these
5 investments, he would be charging an annual 1% fee. When soliciting investors,
6 Valente  fraudulently  stated  that  ELIV  was  an  accredited  investment  and
7 consulting  firm.  Valente  also  falsely  stated  on  ELIV’s  website  that  ELIV  had
8 achieved a five year average annual return of 34.5%, even though it had not been
9 in  business  for  five  years  and  consistently  lost  money  through  speculative
10 investments. After Valente obtained investments in ELIV, he continued to deceive
11 investors by, inter alia, creating and mailing monthly performance statements that
12 falsely reported gains in various accounts.
13   Valente  further  deceived  potential  investors  by  falsely  representing  that
14 ELIV was an approved custodian for tax‐deferred individual retirement accounts
15 (“IRAs”) and that ELIV could open new IRAs and create rollover IRA accounts. In
16 reliance on these misrepresentations, approximately forty‐eight of ELIV’s clients
17 rolled  over  IRA  or  other  retirement accounts  to  the  purported  ELIV  IRAs.  As  a
5
1 result, these clients lost their tax‐deferred investments and exposed themselves to
2 early  withdrawal  penalties.  In  addition,  Valente  issued  to  ELIV  investors  false
3 financial  account  statements  to  make  it  appear  as  if  ELIV  was  holding  the
4 investors’ retirement accounts as legitimate IRA accounts. Some of these altered
5 statements  were  then  sent  to  the  Internal  Revenue  Service  by  accountants  who
6 believed  that  they  were  valid,  creating  potentially  adverse  tax  implications  for
7 investors.
8   Valente  also  submitted  fraudulent  information  to  the  Securities  and
9 Exchange Commission (“SEC”) after it commenced an investigation of ELIV.
10   The  SEC  moved  for  a  preliminary  injunction  against  Valente  and  ELIV,
11 which  the  United  States  District  Court  for  the  Southern  District  of  New  York
12 granted in June 2014, ordering Valente and ELIV to cease operations and freezing
13 their assets. The SEC’s analysis of ELIV’s financial records revealed that, between
14 November  2010  and  June  2014,  Valente,  through  ELIV,  had  obtained
15 approximately $10.5 million from more than 100 investors. The SEC investigation
16 revealed that, as of the date of the asset freeze, ELIV had suffered significant losses,
17 as  ELIV’s  investments  were  worth  approximately  $4.7  million  less  than  what
6
1 investors  had  provided  in  principal.  It  also  revealed  that  these  losses  were  not
2 attributable  solely  to  poor  investment  strategy,  as  Valente  had  appropriated
3 approximately $2.2 million of the funds invested for personal expenses, which was
4 well in excess of the 1% management fee that he had promised investors.
5   On  May  11,  2015,  Valente  waived  indictment  and  pleaded  guilty  in  the
6 Northern District of New York.    He was sentenced on November 20, 2015, and
7 resentenced  on  July  20,  2017,  as  mentioned  above.  This  appeal  revisits  certain
8 criminal history issues discussed in the initial appeal and addresses the amended
9 restitution order.
10 APPLICATION OF THE SENTENCING GUIDELINES
11   At resentencing, the district court found that Valente’s adjusted offense level
12 under  the  Sentencing  Guidelines  was  34,  that  he  fell  within  Criminal  History
13 Category  IV,  based  on  eight  criminal  history  points,  and  that  the  Guidelines
14 imprisonment range was 210–262 months.
15   Valente’s  criminal  history  includes  multiple  state  convictions  related  to
16 driving  while  intoxicated,  including  two  Driving  While  Ability  Impaired
17 (“DWAI”)  infractions,  a  recidivist  DWAI  misdemeanor,  a  driving  while
7
1 intoxicated  misdemeanor,  and  a  misdemeanor  for  operating  a  motor  vehicle
2 without an ignition interlock device.2
3   On  appeal,  Valente  first  challenges  the  procedural  reasonableness  of  the
4 district  court’s  assignment  of  two  particular  criminal  history  points:  one  for  his
5 prior  state  misdemeanor  conviction  of  failing  to  use  a  vehicle  with  an  interlock
6 device, and a second for being a recidivist DWAI offender. Valente had been given
7 a sixty‐day sentence of imprisonment in state court for the latter conviction. We
8 consider the district court’s assignment of each point in turn.
9   Section  4A1.2(c)  of  the  Sentencing  Guidelines  provides  guidance  for
10 determining  whether  “prior  sentences”  are  counted  in  an  offender’s  criminal
11 history  score.  All  felonies  are  counted.  U.S.S.G.  §  4A1.2(c).  Certain  prior
12 misdemeanor convictions are not counted if they are listed under § 4A1.2(c)(1) or
13 are similar to the listed offenses. But, an unlisted misdemeanor offense is counted
14 if it is categorically more serious than a listed offense. United States v. Morales, 239
15 F.3d 113, 118 (2d Cir. 2000). In this context, “categorically more serious” does not
Due to his prior DWAI convictions, Valente was required to install an ignition “interlock device”
2
on his motor vehicle to prevent his operation of the vehicle while intoxicated.
8
1 mean that the unlisted offense is “within a category that is more serious than the
2 [l]isted [o]ffenses” based solely on its underlying elements. Id. at 118 n.5. Rather,
3 we  “use[]  the  adverb  [‘categorically’]  in  its  ordinary  sense  to  mean  ‘without
4 qualification  or  reservation.’”  Id.  (quoting  Webster’s  Third  New  International
5 Dictionary  (1993)  (“categorically”)).  In  determining  whether  an  offense  is
6 categorically more serious than a listed offense,
7 the  court  should  use  a  common  sense  approach  that  includes
8 consideration  of  relevant  factors  such  as  (i)  a  comparison  of
9 punishments  imposed  for  the  listed  and  unlisted  offenses,  (ii)  the
10 perceived  seriousness  of  the  offense  as  indicated  by  the  level  of
11 punishment;  (iii)  the  elements  of  the  offense,  (iv)  the  level  of
12 culpability involved; and (v) the degree to which the commission of
13 the offense indicates a likelihood of recurring criminal conduct.
14 U.S.S.G.  §  4A1.2  cmt.  n.12(A).3  The  district  court  may  also  consider  “any  other
15 factor the court reasonably finds relevant in comparing prior offenses and [l]isted
16 [o]ffenses.” United States v. Martinez‐Santos, 184 F.3d 196, 206 (2d Cir. 1999). The
17 misdemeanor interlock device offense is not listed in U.S.S.G. § 4A1.2(c)(1).
The United States Sentencing Commission adopted this multifactor “common sense approach”
3
when it amended Application Note 12 to U.S.S.G. § 4A1.2 in 2007. U.S. Sentencing Guidelines
Manual supp. to app. C at 237 (2007). But our case law required this approach even before that
amendment. See Morales, 239 F.3d at 118; United States v. Martinez‐Santos, 184 F.3d 196, 206 (2d
Cir. 1999).
9
1   We review a district court’s interpretation of the Sentencing Guidelines de
2 novo, but we examine its factual findings only for clear error. United States v. Potes‐
3 Castillo, 638 F.3d 106, 108–09 (2d Cir. 2011). When reviewing challenged U.S.S.G. §
4 4A1.2(c)  rulings,  this  Court  examines  de  novo  the  district  court’s  determinations
5 based  on  an  offender’s  prior  offense  that  “punishes  only  one  basic  form  of
6 conduct,”  Morales,  239  F.3d  at  117–18,  but,  where  “the  inquiry  will  necessarily
7 focus on the particular conduct of the defendant, we give due deference to a court’s
8 application of the Guidelines to the facts.” United States v. DeJesus‐Concepcion, 607
9 F.3d 303, 305 (2d Cir. 2010). By extension, we also give due deference to a court’s
10 application of the Guidelines to the facts where, as here, the court considers the
11 particular  conduct  of  the  defendant  as  to  the  factors  listed  in  Application  Note
12 12(A) to U.S.S.G. § 4A1.2.
13   Regarding  the  prior  interlock  device  conviction,  the  district  court
14 determined that the conviction, coupled with the criminal history that led to that
15 offense,  indicated  a  likelihood  of  recurring  criminal  conduct  and  increased  the
16 culpability of the defendant. Valente argues, however, that the district court erred
17 by not considering the other factors listed in Application Note 12(A) to U.S.S.G. §
10
1 4A1.2, which, he contends, would have led the district court to determine that the
2 offense  was  not  more  serious  than  those  listed.  We  are  not  persuaded.  The
3 Application Note (and the cases applying it) identifies the factors as ones that a
4 district  court  may  consider.  See  U.S.S.G.  §  4A1.2  cmt.  n.12(A);  see  also  DeJesus‐
5 Concepcion,  607  F.3d  at  305.  Accordingly,  the  district  court  is  not  required  to
6 explicitly indicate that it considered the other listed factors or assign any one of
7 them particular weight. In any event, the record indicates that the district court
8 considered other factors, see Joint App’x at 286–87; it simply focused on two factors
9 that, in its view, made the prior conviction more serious than the listed offenses.
10 Nor did the court err in concluding that, based on the factors that it considered,
11 the interlock device conviction merited the assignment of a criminal history point
12 under § 4A1.1(c).
13   We  turn  next  to  Valente’s  argument  regarding  his  prior  conviction  as  a
14 recidivist  DWAI  offender.  U.S.S.G.  §  4A1.1(b)  assigns  two  points  to  prior
15 convictions  which  result  in a “sentence of  imprisonment  of at  least  sixty days.”
16 The Application Notes to U.S.S.G. § 4A1.2 provide that “[t]o qualify as a sentence
17 of  imprisonment,  the  defendant  must  have  actually  served  a  period  of
11
1 imprisonment on such sentence.” Id. at § 4A1.2 cmt. n.2. If the defendant did not
2 do so, the Sentencing Guidelines provide for only a one‐point enhancement under
3 U.S.S.G. § 4A1.1(c). Valente argues that the district court erred in adding a second
4 criminal history point for this offense because, although the state sentence that was
5 imposed  was  for  sixty  days  imprisonment,  he  had  not  yet  served  it  because  of
6 medical issues.
7   Valente  argues  that  the  sentence  was  essentially  suspended.  The  district
8 court determined that the sentence was not suspended or stayed and that Valente
9 had  not  been  relieved  of  his  obligation  to  eventually  serve  the  period  of
10 imprisonment. The district court thus concluded that Valente’s unserved sentence
11 satisfied  §  4A1.1(b).  We  disagree  because  the  unambiguous  language  of  the
12 Application Note precludes the district court’s conclusion. It states: “the defendant
13 must have actually served a period of imprisonment on such sentence.” Id. at § 4A1.2
14 cmt. n.2 (emphasis added). At the time of his resentencing in this case, Valente had
15 not  yet  served  that  sentence.  As  such,  to  assign  two  points  for  that  DWAI
16 conviction was error.
17   We recognize that other Circuits have not required strict adherence to the
12
1 text of the Application Note. See, e.g., United States v. Reid, 827 F.3d 797, 803 (8th
2 Cir. 2016) (concluding that Guidelines context compels the conclusion that, for §
3 4A1.1(b)  not  to  be  implicated,  state  must  take  “affirmative  steps”  to  relieve
4 defendant of obligation to serve prison time); United States v. Rayborn, 957 F.2d 841,
5 844–45 (11th Cir. 1992) (affirming assignment of three additional criminal history
6 points  where  defendant  was  free  on  bond  and  had  not  begun  serving  a  prior
7 sentence at the time he committed the instant offense); United States v. Duffy, 29
8 F.3d  625,  625  (5th  Cir.  1994)  (per  curiam)  (affirming  assignment  of  additional
9 criminal  history  points  where  defendant  had  not  begun  to  serve  his  state
10 sentences).  However,  not  only  is  the  language  of  the  Application  Note
11 unambiguous, but a strict reading of this Note accords with “one of the most basic
12 interpretative canons, that [language] should be construed . . . so that no part will
13 be inoperative or superfluous, void or insignificant.” Corley v. United States, 556
14 U.S.  303,  314  (2009)  (internal  quotation  marks  and  citations  omitted).  Any
15 alternative reading ignores the emphasis communicated by the word “actually.”
16 In  addition,  we  conclude  that  the  Application  Note’s  plain  meaning  provides  a
17 practicable means for gauging the severity of a prior state conviction and sentence
13
1 because the sentencing methods of states vary significantly, and it is thus, at times,
2 difficult for the district court to assess the severity of sentences imposed by those
3 courts.
4   Because  Valente’s  prior  sentence  was  not  actually  served,  it  was  error  to
5 assign an additional criminal history point for that sentence.4
6   In  its  brief,  the  Government  maintained  that  even  if  there  were  error  in
7 assigning the second criminal history point to the recidivist DWAI conviction, it
8 would be harmless because, without that point, Valente would still have had seven
9 criminal  history  points  and  fallen  within  Criminal  History  Category  IV,  which
10 requires 7, 8, or 9 criminal history points. The error was not harmless, however,
11 because  Valente  should  have  been  assigned  only  six  criminal  history  points,
12 placing him in Criminal History Category III.
13   We  have  concluded  that  the  district  court  erred  in  determining  that  the
14 recidivist DWAI conviction merited the assignment of two criminal history points
4  We recognize that there may be cases where the reason that the defendant did not serve his
sentence appears to lie outside the heartland of the Application Note. In such cases, the plain
language of the Application Note controls the district court’s guidelines calculation, but it does
not preclude it from departing or varying from the Guidelines Sentencing Range when the
particular facts justify such a departure or nonguidelines sentence.
14
1 under § 4A1.1(b) based on the plain language of Application Note 12 to U.S.S.G. §
2 4A1.2.  Accordingly,  the  DWAI  conviction  only  merits  the  assignment  of  one
3 criminal  history  point  under  §  4A1.1(c).  As  the  Government  conceded  at  oral
4 argument,  however,  §  4A.1.1(c)  provides  that  only  four  criminal  history  points
5 may  be added  under  that  subsection,  and  the  four  point maximum  has already
6 been  met  in  this  case.  We  held  above  that  Valente’s  prior  interlock  device
7 conviction  merited  the  addition  of  one  point  under  §  4A1.1(c),  and  Valente  has
8 three other prior convictions for which the district court properly assigned three
9 points under § 4A1.1(c).5  As a result, both of the criminal history points that the
10 district  court  assigned  for  Valente’s  recidivist  DWAI  conviction  must  be
11 disallowed, and Valente’s criminal convictions should have resulted in only four
12 criminal  history  points  rather  than  six.  Because  Valente  was  convicted  of  the
13 current  offenses  while  under  criminal  sentences  for  two  other  convictions,  two
14 points  are  added  under  §  4A1.1(d).  His  resulting  criminal  history  score  is  six,
15 rather than the eight that the district court used to sentence Valente.
5  Valente challenged the assessment of these three criminal history points in his prior appeal, and
we held that the district court did not err in assessing these points. See Valente, 688 F. App’x at 78‐
79.
15
1   Valente thus is in Criminal History Category III, rather than Category IV,
2 pursuant  to  U.S.S.G.  Chapter  5,  Part  A.  His  offense  level  is  34,  and  his  correct
3 Guidelines  Range  is  therefore  188–235  months,  rather  than  210–262  months.
4 Because that error resulted in a higher Guidelines Range, it is prejudicial, and we
5 remand  to  the  district  court  for  resentencing,  applying  the  correct  Guidelines
6 Range.6
7 THE RESTITUTION ORDER
8 Finally,  Valente  appeals  the  district  court’s  imposition  of  an  amended
9 restitution  order.  The  government  originally  calculated  the  total  net  loss  for  all
10 investors  to  be  $8,200,579.69,  and  the  district  court  used  this  calculation  when
11 imposing the initial restitution order. After Valente filed his notice of appeal for
12 his  original  sentence,  the  Government  realized  it  had  made  an  error  in  the  loss
13 calculation by reducing the loss amount by the total net gain of some investors,
14 when that gain was not available to repay the losses to other investors. Thus, the
6  Having remanded on the sentencing issue for procedural error, we need not consider Valente’s
other  arguments  as  to  sentencing.  Valente’s  other  arguments  are  that  (1)  the  district  court
committed  procedural  error  by  refusing  to  consider  the  prior  conduct  and  prior  sentences  of
similarly situated defendants; (2) the district court committed procedural error by misstating the
Guidelines calculations in a court exhibit distributed to the parties during resentencing; and (3)
his sentence is substantively unreasonable.
16
1 Government sought to have the restitution order amended to $8,616,113.39. The
2 district  court  imposed  an  amended  restitution  order  for  this  amount  during
3 resentencing.  Valente  argues  that  the  district  court  did  not  have  authority  to
4 amend the restitution order.
5 In general, when we remand to a district court for resentencing, that remand
6 is “for limited, and not de novo sentencing.” United States v. Malki, 718 F.3d 178, 182
7 (2d Cir. 2013). “When our remand is limited, the mandate rule generally forecloses
8 re‐litigation of issues previously waived by the parties or decided by the appellate
9 court.”  Id.  However,  there  is  a  narrow  exception  providing  that  “[a]  court’s
10 reconsideration  of  its  own  earlier  decision  in  a  case  may  .  .  .  be  justified  in
11 compelling circumstances, consisting principally of (1) an intervening change in
12 controlling law, (2) new evidence, or (3) the need to correct a clear error of law or
13 to prevent manifest injustice.” United States v. Carr, 557 F.3d 93, 102 (2d Cir. 2009);
14 see also Malki, 718 F.3d at 182 (“The presumption of limited resentencing may be
15 overcome if issues ‘became relevant only after the initial appellate review’ or if the
16 court is presented with a ‘cogent or compelling reason for resentencing de novo.’”)
17 (quoting United States v. Hernandez, 604 F.3d 48, 54 (2d Cir. 2010)).
17
1 In  United  States  v.  Johnson,  we  permitted  the  district  court  to  impose
2 restitution during resentencing on other grounds where the government had not
3 requested  restitution  in  the  initial  sentencing  and  the  district  court  had  not
4 imposed it. 378 F.3d 230, 244 (2d Cir. 2004). There we found that it was clear legal
5 error  to  have  not  imposed  restitution  pursuant  to  the  Mandatory  Victim
6 Restitution Act (“MVRA”), and that imposing a restitution order on resentencing
7 was therefore appropriate. Id. Valente conceded at oral argument that, if we found
8 clear error in the district court’s original restitution order or found a “cogent or
9 compelling reason for resentencing,” the district court did not err in imposing the
10 greater amount in the amended order.
11 The  MVRA  required  the  district  court  to  impose  a  restitution  order
12 requiring  Valente  to  repay  each  victim  in  the  full  amount  of  his  losses  due  to
13 Valente’s fraudulent scheme. 18 U.S.C. §§ 3663A(a), (b)(1)(B)(i)(II); see also United
14 States v. Dupes, 513 F. 3d 338, 345 (2d Cir. 2008) (“The MVRA makes full restitution
15 mandatory for certain crimes.”). Therefore, it was appropriate for the district court
16 to impose an amended order that required Valente to pay each victim in full, and
18
1 thus, by correcting the restitution amount during resentencing, the district court
2 did not err.
3 CONCLUSION
4   For  the  reasons  stated  above,  we  VACATE  and  REMAND  in  part  and
5 AFFIRM in part the district court’s amended judgment.
6
19
GERARD E. LYNCH, Circuit Judge, concurring:
I fully concur in the opinion of the Court. It is well established that the
recommended guideline sentencing range is the starting point for sentencing, see
Rita v. United States, 551 U.S. 338, 347–48 (2007), and that an error in calculating
the guidelines recommendation ordinarily requires a remand for a resentencing
that takes account of the correct guideline range, see Peugh v. United States, 569
U.S. 530, 537 (2013). Since the guideline range was incorrectly calculated here,1
the vacatur of the sentence and remand for resentencing is required, because the
guideline range is one of the factors that a district court must take into account in
imposing sentence, see 18 U.S.C. § 3553(a)(4)(A), and we must therefore presume
1
Although I agree with my colleagues that the plain language of Application
Note 2 to U.S.S.G. § 4A1.2 is ultimately controlling, I note that the point is not free from
doubt, and that the positions taken by our sister Circuits, discussed at pp. 13-14 of Judge
Droney’s opinion for the Court, are not without force. It is possible that the Sentencing
Commission’s “actually served” language was intended to distinguish sentences,
common in many state sentencing regimes, that nominally impose a sentence of
incarceration, but then suspend that sentence in favor of a term of probation, from
sentences of incarceration that were intended to be actually served. See United States v.
Reid, 827 F.3d 797, 803 (8th Cir. 2016) (citing U.S.S.G. §§ 4A1.2(a)(3) and (b)(2), which are
referenced in Application Note 2). The use of suspended sentences as a vehicle to
impose a sentence of probation is common enough that it must have been present to the
minds of the Sentencing Commissioners, while situations like the one in this case and
those in the other cases discussed in our opinion, in which sentenced prisoners seem to
slip through the cracks in the system, are anomalous, and may not have been fully
considered. In light of the disagreement among the Courts of Appeals about the
application of the “actually served” language, the Commission may wish to clarify its
intended meaning.
that the inaccurately calculated range may have had an effect on the sentence
imposed.
I add a few words only to emphasize that while the guidelines are the
starting point, they are most certainly not an end point to the district court’s role
in determining and imposing a just sentence. The technical nature of the error in
this case is a good example of why that is so.
Congress has commanded that the job of the sentencing judge is to
“impose a sentence sufficient, but not greater than necessary, to comply with the
purposes” of sentencing set forth” in § 3553(a)(2) — roughly paraphrased, the
traditional purposes of providing just punishment (retribution), affording
adequate specific and general deterrence, protecting the public from future
crimes the defendant might commit (incapacitation), and providing the
defendant with necessary correctional treatment (rehabilitation). See 18 U.S.C. §
3553(a)(2)(A)–(D). In making this assessment, the court is instructed to consider,
in addition to the guideline recommendation and the goals of avoiding
unjustified disparity and providing restitution to any victims, “the nature and
circumstances of the offense and the history and characteristics of the
defendant.” Id. § 3553(a)(1).
2
The Sentencing Guidelines themselves are to some degree premised on
those factors. Although many types of crimes can be committed in various ways
that implicate a broad range of aggravating and mitigating circumstances,
making it difficult to reduce the seriousness of a crime to a simple score, the
Sentencing Guidelines take account, for each category of crime, of a large number
of such circumstances, and will often (though not always) provide a reasonable
(if imperfect) approximation of the seriousness of the defendant’s crime as
compared to other violations of the law. With respect to the “history and
characteristics of the defendant,” however — an even more difficult assessment
to reduce to a single number — the Guidelines essentially give up, attempting to
assess only the significance and weight of the offender’s record of criminal
convictions, as a kind of proxy for the much more complex inquiry involved in
judging the defendant’s character.
Moreover, even within the narrow area that the Guidelines attempt to
measure, the “criminal history score” and attendant “criminal history categories”
are at best a crude measure of the seriousness of the offender’s record of prior
convictions. That is not a criticism of the Sentencing Commission, which has
developed a complex and generally reasonable method of scoring prior
3
convictions; it is simply a recognition of the impossibility of the task. The
criminal history score can serve at best a rough guide to the seriousness of the
defendant’s prior adjudicated criminal conduct, and an even rougher way of
assessing the defendant’s overall character.
This case exemplifies the difficulty. Valente has accumulated a striking
number of convictions for drunk or impaired driving. All six of his criminal
history points, which place him at the top of Criminal History Category III,
derive from his problems with drinking and driving. Criminal defendants can
accumulate six criminal history points in a variety of ways. For example, two
convictions for armed robbery, for each of which the offender received a sentence
of more than 13 months in prison, would similarly yield six criminal history
points. So would two non-violent felony fraud convictions with sentences of over
13 months. So would an accumulation of misdemeanor petty larceny convictions
equivalent in number and timing to this defendant’s alcohol and driving
misdemeanors.
Each of these hypothetical offenders would have the same number of
criminal history points as Valente. Reasonable people, however, might well see
these offenders as significantly different, and could differ as to how to rank the
4
seriousness of their records. More importantly, the “character” of each of these
offenders would present (even putting aside every other characteristic that a
human being can have, and focusing, solely and somewhat artificially, only on
what is demonstrated by the criminal offenses for which he was convicted and
punished) a somewhat different profile, in terms of the likelihood of recidivism
relevant to the crime of conviction – in this case, financial fraud — and the
danger presented to the community. The two-time mugger might suggest a
violent street predator, the recidivist fraudster a professional con artist, the
habitual shoplifter perhaps a homeless drug addict. And even those profiles
would be an oversimplified portrait of the “history and characteristics” of a
complicated human being. A district judge looking at Valente’s record in light of
all the other information about his history and character presented in a
Presentence Report (“PSR”) might see a hopeless alcoholic, more ill than evil;
alternatively, a judge might see a man who arrogantly persists in trying to beat
the system and continue to operate a dangerous motor vehicle even when clearly
impaired, and to evade mechanisms to prevent such conduct. In determining
whether either of these caricatures is an accurate depiction of the defendant, the
district court, via the PSR and other sources of information such as input from
5
victims of the crime of conviction and from the defendant’s family members and
friends, would have much more information at its disposal than simply a score.
Some of that information is highly relevant to assessing the risk that a
defendant poses to the community, but is completely excluded from the criminal
history calculation. In this case, for example, a reasonable judge might think that
Valente’s actual record of convictions is of limited relevance in assessing the
danger that he will commit another fraud: if the judge believed that Valente
sincerely wanted to engage in alcohol treatment and get his alcoholism under
control, he or she might significantly discount his history.2 On the other hand,
one factor in the PSR, mentioned only briefly in the Court’s opinion because it is
irrelevant to the issues before this Court, precisely because it plays no role in
calculating the Guidelines recommendation, would seem unquestionably
relevant, not only to judging Valente’s overall character, but specifically to
assessing the risk that he would repeat the criminal conduct for which he faces
sentence.
2
I do not suggest that this is a correct view of Valente’s history; on the cold
appellate record, I would not presume to judge such a question. I suggest only that,
depending on what else the judge knew besides the bare fact of a series of
alcohol/driving related offenses, this might be a possible conclusion. One can easily
imagine facts that would lead a judge to take a very different, and much harsher, view
of these convictions.
6
For some seventeen years before he began the investment advisory
business through which he committed the fraud for which he was convicted,
Valente was a registered investment broker. During that time, he was the subject
of seventeen consumer complaints, and twice filed for bankruptcy. He was
eventually fired by the company for whom he worked as a broker and was
permanently barred from employment by regulated financial industry entities
“based on findings that on multiple occasions [he] had made unauthorized,
excessive, and unsuitable trades for customers and had provided false written
account information to customers.” PSR ¶ 33.
I do not presume to suggest precisely how much weight those facts should
bear in assessing Valente’s “history and characteristics,” or to attempt to translate
this factor into a number of days, weeks, or months of incarceration. That
demanding task is for the district court, which has a fuller picture of the offender
who stands before it. I would venture to predict, however, that most judges
would give such a factor more weight in assessing the danger of recidivism than
they would give to whether his record of impaired driving earned him five or
only four “criminal history points” in a complex and technical scheme for
approximating the seriousness of his prior criminal convictions.
7
The experienced district judge in this case had before him a multiplicity of
facts about the defendant, including letters from people who knew him, the
perspective of victims of his fraud, the criminal record discussed above, and the
fact of his regulatory, non-criminal offenses. The judge surely weighed the
guideline recommendation along with these factors in arriving at an appropriate
sentence. It might be that, having been corrected by this Court with respect to the
technical error made in calculating the criminal history score (an error, I should
note, the precise scope of which escaped the government, which initially
defended the district court’s calculation, and then withdrew its argument by
noting an aspect of the case that the district court, the government, and even
Valente’s own attorney had overlooked), the district court may conclude that a
different sentence is appropriate. Or it might not; the court might conclude that
the guideline calculation played only a minimal role in its original sentence, and
that the factors that primarily influenced the selection of a particular sentence as
the minimum necessary to accomplish the purposes of sentencing outweighed
then, and outweigh now, the recommended guideline range. That is for the
district court to determine. The Court’s opinion specifically notes that while “the
plain meaning of the Application Note controls the district court’s guidelines
8
calculation, . . . it does not preclude [the court] from departing or varying from
the Guidelines Sentencing Range [if] the particular facts justify such a departure
or nonguidelines sentence.” Maj. Op. 14 n.4. This concurrence is essentially a
gloss on, or partial explanation of, that footnote.
Sentencing involves difficult, painful exercises of judgment about the
degree of punishment that is required in particular cases. It requires a judge to
measure and translate into a quantifiable fine or period of incarceration or
supervision a multiplicity of aspects of a particular crime and offender, while
balancing a variety of incommensurate goals of sentencing each of which may
pull the court in different directions. It is not easily reduced to a formula. That is
why the Guidelines are only advisory, and it is why an error in the guideline
calculation may have a greater or lesser impact — or no impact at all — on the
actual sentence eventually imposed.
We, as an appellate tribunal, can say that in this case an error was made in
calculating the range of sentences recommended by the Guidelines. It is for the
district court to rebalance the factors that go into its difficult decision, taking that
correction into account. Perhaps we will yet be called upon to decide whether the
sentence the district court imposes on remand is a reasonable one. We have not
9
yet undertaken that analysis with respect to the sentence previously imposed,
and nothing in our opinion purports to instruct the district court on what
sentence it should impose. On that understanding, I join fully in that opinion.
10