United States v. Milstein

Opinions of the United
2006 Decisions States Court of Appeals
for the Third Circuit
12-5-2006
USA v. Milstein
Precedential or Non-Precedential: Non-Precedential
Docket No. 05-3848
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
__________
No. 05-3848
__________
UNITED STATES OF AMERICA,
Appellee,
v.
JEFFREY MILSTEIN,
Appellant.
__________
On Appeal from the United States District Court
for the District of New Jersey
(D.N.J. Crim. No. 00-301)
District Judge: Honorable William G. Bassler
__________
Submitted Under Third Circuit L.A.R. 34.1(a)
November 28, 2006
___________
Before: FUENTES and GARTH, Circuit Judges, and POLLAK, District Judge1
(Filed: December 5, 2006)
__________
OPINION
1
The Honorable Louis H. Pollak, Senior District Judge for the Eastern District of
Pennsylvania, sitting by designation.
Garth, Circuit Judge:
Jeffrey Milstein appeals his sentence as unreasonable and in violation of the Double
Jeopardy Clause of the Fifth Amendment to the United States Constitution. We have
jurisdiction pursuant to 18 U.S.C. § 3742(a). We will affirm.
I
Because the parties are familiar with the facts of this case, we will not recite them here
except as necessary to the instant discussion. Milstein was a public accountant who
repeatedly used his accounting expertise to assist his clients in illegal, fraudulent schemes.
In the spring and summer of 1998, Milstein aided Marc Rousso, a fugitive fleeing securities
fraud charges in France, in concealing from the Internal Revenue Service $400,000 in
proceeds from Rousso’s sale of real property. PSR ¶ 9. When agents of the Federal Bureau
of Investigation (“FBI”) interviewed Milstein about his activities with Rousso, Milstein lied
to them. PSR ¶ 10. On May 15, 2000, pursuant to a cooperating plea agreement Milstein
pleaded guilty in the United States District Court for the District of New Jersey to a one-
count information charging conspiracy to commit tax fraud in violation of 18 U.S.C. § 371.
Even after this guilty plea, however, Milstein continued to exploit his skills as an
accountant to engage in fraudulent investment schemes. In June 2003, an undercover FBI
agent posing as a wealthy investor met with one of Milstein’s co-conspirators and expressed
interest in investing several million dollars in LJD Resources (“LJD”), a supposed business
for which Milstein served as the accountant. PSR ¶ 34. The co-conspirator provided the agent
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with materially false financial statements for LJD, which had been prepared by Milstein.
App. 130. The agent later telephoned Milstein with questions about the financial statements,
and Milstein confirmed that the information was correct even though he knew it was not.
App. 130. As a result of his involvement in the LJD investment scheme, Milstein pleaded
guilty on November 19, 2003 in the United States District Court for the Southern District of
New York to a one-count indictment charging conspiracy to commit wire fraud. During the
guilty plea hearing, Judge Kram informed Milstein that he was subject to an enhanced
sentence pursuant to 18 U.S.C. § 31472 because he had committed the wire fraud offense
while on pre-sentence release for the earlier tax fraud offense. App. 127.
On March 31, 2004, Judge Kram, noting Milstein’s guilty plea in this case as well as
a prior conviction in New York state court for falsifying business records, imposed a
sentence of 46 months’ imprisonment for the wire fraud conspiracy offense and a consecutive
sentence of 17 months’ imprisonment pursuant to 18 U.S.C. § 3147. App. 143, 154.
For the tax fraud conspiracy offense, the Probation Office, using the 1998 Edition of
2
The statute provides:
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.
3
the Guidelines Manual, determined that Milstein’s Base Offense Level pursuant to U.S.S.G.
§ 2T1.4(a)(1) was 13, based on a tax loss of $55,000. PSR ¶ 18, U.S.S.G. § 2T4.1(H). His
Total Offense Level was 15, because Milstein, as a certified public accountant, warranted the
two-level enhancement in U.S.S.G. § 2T1.4(b)(1). PSR ¶ 19, 23. Probation recommended
against a downward adjustment for acceptance of responsibility because, inter alia, Milstein
lied during his Probation Office interview about his conduct in this offense. See PSR ¶¶ 15-
16. Probation also determined that Milstein’s state court conviction and sentence for
falsifying business records and his conviction and sentence in the Southern District of New
York for conspiracy to commit wire fraud resulted in a total of four Criminal History Points,
and thus a Criminal History Category of III and an advisory guidelines range of 24-30
months’ imprisonment. PSR ¶¶ 29-34, 36, 66.
Before sentencing, Milstein wrote to object to this advisory sentence on a number of
grounds. He challenged the withholding of a downward adjustment for acceptance of
responsibility, Probation’s calculation of the tax loss and the resulting base offense level, and
the two-level enhancement under U.S.S.G. § 2T1.4(b)(1). App. 85-86. Milstein also sought
a downward adjustment on four additional grounds: (i) the loss amount overstated the
seriousness of the offense, U.S.S.G. § 2F1.1 cmt. n.11; (ii) Milstein had no intent to violate
the criminal law, U.S.S.G. § 5K2.11; (iii) he suffered “collateral consequences” of his
conviction, including the “loss of employment opportunities,” U.S.S.G. § 5K2.0; and (iv)
since the offense, he has been rehabilitated. App. 87-93. Finally, Milstein argued that the 18
U.S.C. § 3553(a) factors merited a sentence of “time served,” or in the alternative, that any
4
sentence imposed in this case be ordered to run fully concurrently with the sentence imposed
by the Southern District of New York. App. 94-96.
The government filed a written response, disputing Milstein’s challenges to the
calculation of the guidelines range and opposing his motion for downward departures. The
government did agree, though, that a partially concurrent sentence would be appropriate,
given that the sentence on the wire fraud conspiracy conviction had been increased by 17
months under 18 U.S.C. § 3147. App. 112-18.
At sentencing on August 3, 2005, Milstein raised additional claims. Pursuant to
U.S.S.G. § 4A1.1(c), no Criminal History Point should be assigned for his state court
conviction for falsifying business records. According to Milstein, because the crime was a
misdemeanor rather than a felony, the addition of a Criminal History Point was in error and
without that fourth point, Milstein’s Criminal History Category would be II rather than III.
App. 23. Milstein also argued for a reduced sentence based on his remorse. App. 22.
Judge Bassler first identified all the issues raised by Milstein’s written submission,
which the Judge had read “several times.” App. 17. After argument by Milstein’s counsel and
the government’s response, the District Court expressly rejected as meritless both Milstein’s
objection to the two-level increase under U.S.S.G. § 2T1.4(b)(1) and his objection to the
withholding of a reduction for acceptance of responsibility. App. 27-28. Judge Bassler even
re-read the plea allocution to satisfy himself that Milstein had provided inconsistent–and
thus, false–information to the FBI regarding his conduct in this offense. App. 28. Next,
turning to Milstein’s motion for a downward departure, Judge Bassler “decline[d] to
5
downward depart . . . because in evaluating every reason I have looked at in the briefs, I just
simply don’t think they justify a downward departure.” App. 29. Then, evaluating Milstein’s
case using the sentencing factors listed in 18 U.S.C. § 3553(a), the District Court concluded
that none justified a reduction in the advisory sentence. App. 29-30. The District Court also
rejected Milstein’s challenge to the Criminal History Category, finding that U.S.S.G. §
4A1.2(c) expressly counted sentences for certain prior misdemeanor convictions. App. 31.
After allowing defense counsel an opportunity to argue the extent to which this
sentence should run concurrently with the sentence in the wire fraud conspiracy case, and
after giving Milstein an opportunity to address the Court, Judge Bassler imposed a sentence
of 24 months’ imprisonment, 17 months of which would be served concurrently to the wire
fraud conspiracy sentence. Supplemental App. 1-2. The Court also imposed a three-year term
of supervised release, a $100 special assessment, and a $10,000 fine. The Court explained
that these two crimes could have justified fully consecutive sentences, but that he granted a
substantial period of concurrency because of the 17-month portion of the sentence Judge
Kram imposed under 18 U.S.C. § 3147. App. 38.
II
Milstein first contends that the imposition of a partially concurrent–rather than an
entirely concurrent–sentence violated the Double Jeopardy Clause by doubly punishing him
for the tax fraud offense. This argument is wholly without merit. The extra 17 months’
6
imprisonment Milstein received for wire fraud conspiracy was not “punishment” for the tax
fraud offense for Double Jeopardy purposes. See Witte v. U.S., 515 U.S. 389 (1995) (“In
repeatedly upholding such recidivism statutes, we have rejected double jeopardy challenges
because the enhanced punishment imposed for the later offense ‘is not to be viewed as either
a new jeopardy or additional penalty for the earlier crimes,’ but instead as ‘a stiffened penalty
for the latest crime, which is considered to be an aggravated offense because a repetitive
one.’”) (quoting Gryger v. Burke, 334 U.S. 728, 732 (1948)). Indeed, even fully consecutive
sentences for these two entirely separate crimes would not have violated the Double Jeopardy
Clause.
Next, Milstein argues that the District Court erred in attributing a Criminal History
Point to his prior New York state court conviction and sentence for falsifying business
records in violation of McKinney’s Penal Law § 175.05. This argument, as well, is without
merit. Under U.S.S.G. § 4A1.1(c), one Criminal History Point is added for each prior
criminal sentence which did not result in at least sixty days’ imprisonment. Because Milstein
paid a $500 fine but was not imprisoned for the New York state conviction, the District Court
accorded one Criminal History Point under that section. PSR ¶ 30. However, Milstein claims
that his prior sentence falls within the category of certain excluded misdemeanor and petty
offenses for which, circumstances depending, a criminal history point is not assigned. See
U.S.S.G. § 4A1.2(c).3 The misdemeanor and petty offenses which can qualify for the
3
Section 4A1.2(c) states:
7
exclusion are listed in U.S.S.G. § 4A1.2(c), and the offense of falsifying business records is
not among them. Furthermore, Milstein does not identify–and this Court does not find–any
of the offenses listed in § 4A1.2(c)(1) or (2) to be sufficiently analogous to the offense of
falsifying business records as would justify including his prior offense among those which
Sentences for all felony offenses are counted. Sentences for misdemeanor and
petty offenses are counted, except as follows:
(1) Sentences for the following prior offenses and offenses similar to them, by
whatever name they are known, are counted only if (A) the sentence was a term
of probation of at least one year or a term of imprisonment of at least thirty days,
or (B) the prior offense was similar to an instant offense:
Careless or reckless driving
Contempt of court
Disorderly conduct or disturbing the peace
Driving without a license or with a revoked or suspended license
False information to a police officer
Fish and game violations
Gambling
Hindering or failure to obey a police officer
Insufficient funds check
Leaving the scene of an accident
Local ordinance violations (excluding local ordinance violations that are
also criminal offenses under state law)
Non-support
Prostitution
Resisting arrest
Trespassing
(2) Sentences for the following prior offenses and offenses similar to them, by
whatever name they are known, are never counted:
Hitchhiking
Juvenile status offenses and truancy
Loitering
Minor traffic infractions (e.g., speeding)
Public intoxication
Vagrancy.
U.S.S.G. § 4A1.2(c).
8
can qualify for the exclusion. See United States v. Elmore, 108 F.3d 23, 27 (3d Cir. 1997)
(holding that, in the Third Circuit, the determination of whether a prior conviction is for an
offense sufficiently similar to one of the identified offenses in U.S.S.G. § 4A1.2(c) turns on
a comparison of the elements of the offense of the prior conviction and the proposed
analogous offense under § 4A1.2(c)). Thus, because Milstein’s prior sentence does not
qualify for the exclusion provided by § 4A1.2(c), the District Court did not err by finding that
Milstein’s prior sentence warranted the addition of a Criminal History Point.
Third, Milstein maintains that his sentence was unreasonable. In reviewing a sentence
for unreasonableness, our inquiry proceeds in two steps. First, this Court must be satisfied
that the District Court gave “meaningful consideration” to the sentencing factors listed in 18
U.S.C. § 3553(a). United States v. Cooper, 437 F.3d 324, 329 (3d Cir. 2006). It is not
necessary for the sentencing court to “discuss every argument made by a litigant if an
argument is clearly without merit.” Id. (citation omitted). Neither is it necessary for the
sentencing court to “discuss and make findings as to each of the § 3553(a) factors if the
record makes clear the court took the factors into account in sentencing.” Id. (citations
omitted). However, “a rote statement of the § 3553(a) factors should not suffice if at
sentencing either the defendant or the prosecution raises ‘a ground of recognized legal merit
(provided it has a factual basis)’ and the court fails to address it.” Id. (citation omitted).
Indispensable to the District Court’s task of giving “meaningful consideration” to the
sentencing factors is that court’s calculation of the correct guidelines range applicable to the
particular case. Id. at 330. Second, after finding that the sentencing court did meaningfully
9
consider the factors listed in 18 U.S.C. § 3553(a), we must also make sure the sentencing
court reasonably applied those factors to the circumstances of the case. Id. In this second
step, a Court of Appeals must “apply a deferential standard, the trial court being in the best
position to determine the appropriate sentence.” Id. Finally, the party challenging the
sentence bears the burden of proving its unreasonableness. Id. at 332.
Milstein asserts that the District Court did not reasonably apply the sentencing factors
to the circumstances of the case, and more specifically, that the Court gave inadequate
consideration to Milstein’s asserted remorse and lack of recidivism. We find, however, that
Milstein has failed to show that the sentence he received was unreasonable. As demonstrated
in the above discussion of the appropriate number of Criminal History Points Milstein
merited, Milstein’s only challenge to the District Court’s calculation of the guidelines range
is rejected. In addition, as the above recitation of the facts chronicles, the District Court
meaningfully addressed and resolved each of the claims presented by Milstein in his written
sentencing submission and those he raised at his sentencing hearing. Furthermore, the record
reflects the District Court’s explicit consideration of the statutory sentencing factors. App.
29. As for Milstein’s contention that the District Court, in applying these factors to his
circumstances, did not recognize his “remorse and lack of recidivism,” it is rejected. First of
all, the District Court, noting Milstein’s prior convictions for falsifying business records and
for conspiracy to commit wire fraud, properly found that Milstein was, in fact, a recidivist.
App. 30. Regarding Milstein’s asserted remorse, given our deferential standard of review and
the fact that Milstein’s letter to the judge presented no exceptional circumstances, we cannot
10
say that the District Court, in imposing a sentence of imprisonment largely concurrent with
the sentence Milstein was currently serving for wire fraud conspiracy, unreasonably applied
the sentencing factors to Milstein’s case.
For these reasons, we will affirm.
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