United States v. Benzing, Walter

NONPRECEDENTIAL DISPOSITION
To be cited only in accordance with
Fed. R. App. P. 32.1
United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
Argued July 11, 2007
Decided July 26, 2007
Before
Hon. RICHARD A. POSNER, Circuit Judge
Hon. JOHN L. COFFEY, Circuit Judge
Hon. DIANE S. SYKES, Circuit Judge
No. 06-4186
Appeal from the United States
UNITED STATES OF AMERICA, District Court for the Western
Plaintiff-Appellee, District of Wisconsin
v. No. 06 CR 111
WALTER BENZING, Barbara B. Crabb,
Defendant-Appellant. Chief Judge.
ORDER
Walter Benzing pleaded guilty to one count of mail fraud, perpetrated as part
of a two-episode scheme to defraud timber companies and landowners, in violation
of 18 U.S.C. § 1341. Benzing appeals his sentence of 55 months for the second
episode, arguing that the district court either should have credited him for the
19 months of prison time he served after his conviction for the first, or at least
should have explained fully why it did not do so. He also argues that this court’s
presumption that a sentence within the guidelines range is reasonable violates the
Sixth Amendment right to a jury trial, a matter the Supreme Court recently
rejected in United States v. Rita, 127 S. Ct. 2456 (2007). We affirm.
No. 06-4186 Page 2
Benzing has been convicted twice for fraud in connection with forged timber
contracts. From January to April 2000, Benzing forged six contracts purporting to
give him permission to harvest timber on various tracts of land for a fee. He then
sold these contracts to Sitco Lumber Company for over $93,000. After Sitco made
nearly $75,000 in down payments, it discovered that the contracts were fraudulent.
In December 2001 Benzing was convicted of interstate transportation of these
fraudulently obtained funds and was sentenced to 21 months’ imprisonment, of
which he served 19 months.
While his criminal case was pending, and apparently unbeknownst to the
government, Benzing pursued a second fraudulent lumber contracts scheme, which
took place from September 2000 through December 2001. This time he forged
31 timber harvesting contracts and sold them to two other lumber operators for
nearly $2 million, of which he was paid $935,000. As part of the scheme, Benzing
also entered into three legitimate timber purchase contracts, which he in turn sold,
but Benzing failed to pay the landowners the required fee, even after the lumber
was harvested. On December 24, 2001, just three days after Benzing was sentenced
for his first conviction, he mailed an $18,500 personal check to one of the
landowners. The check was returned for insufficient funds and formed the basis of
Benzing’s indictment for mail fraud.
In August 2006 Benzing pleaded guilty to mail fraud. Both the government
and Benzing argued in their objections to the Presentence Investigation Report that
Benzing’s first fraud conviction was “relevant conduct” for sentencing purposes.
Relevant conduct encompasses all actions taken by a defendant as part of a common
scheme or plan, see U.S.S.G. § 1B1.3(a)(2), and both the government and Benzing
agreed that Benzing’s frauds were two parts to a single scheme. Benzing further
argued that his sentence should be reduced by the 19 months that he served for the
previous offense to avoid punishing him twice for the same course of conduct. The
government disagreed.
At sentencing the district court determined that Benzing’s prior fraud offense
was relevant conduct. The court calculated an offence level of 22 and applied a
criminal history category of III—the designation of Benzing’s prior conviction as
relevant conduct reduced his criminal history category from IV to III—resulting in a
guidelines range of 51 to 63 months’ imprisonment. Since the statutory maximum
penalty was five years, the court noted that the top end of his range was restricted
to 60 months. Benzing did not disagree with the guidelines range but continued to
argue that his sentence should be reduced by 19 months to credit him for time
served on the related fraud charge. Put another way, Benzing argued that he was
entitled to a sentence functionally concurrent with his earlier sentence. The
government strenuously objected that doing so would reward repeated bad conduct.
After hearing these arguments, the court observed that Benzing’s “repetitive frauds
No. 06-4186 Page 3
suggest a likelihood that you will commit future crimes but your law-abiding
conduct in the years since you were released from prison indicate that you’ve
changed your life and behavior significantly.” It then sentenced Benzing to
55 months’ imprisonment, a term in the middle of the guidelines range.
On appeal Benzing first argues that the district court abused its discretion by
neglecting to consider his argument that his sentence should be reduced by the
amount of time he already served for relevant conduct. Second, he contends that to
the extent that the court considered and rejected his argument, it improperly failed
to articulate its rationale. In particular, Benzing appears to claim that the district
court ignored 18 U.S.C. § 3553(a)(5) because it failed to consider policy statements
in sentencing guidelines, such as section 5K2.23. That section authorizes a
sentencing court to reduce a sentence in certain circumstances if the defendant has
already completed a prison term for relevant conduct. Benzing claims that those
circumstances apply here.
Benzing’s first claim is that the sentencing court did not consider his request
that he be credited for the time served for the earlier, admittedly “relevant” fraud.
But the record indicates otherwise. From the transcript of the sentencing hearing,
it is evident that the district court heard both Benzing’s argument that because his
earlier sentence was based on a conviction for relevant conduct, he should receive a
credit, and the government’s argument that a reduction in Benzing’s sentence
would reward him for repeated criminal conduct. The court agreed that Benzing’s
first fraud scheme was indeed conduct relevant to the current mail fraud charge
and reduced Benzing’s criminal history category accordingly. But the court did not
grant the sentencing credit. This exchange suggests that the court entertained and
simply rejected Benzing’s request for a sentencing credit.
This brings us to Benzing’s second argument: that the district court
improperly neglected to explain why it refused to credit his earlier sentence. A
sentencing court is required to consider the 3553(a) factors and articulate its
reasons for the sentence, see United States v. Rodriguez-Alvarez, 425 F.3d 1041,
1046 (7th Cir. 2005). If it is clear from the record that the district court gave
meaningful consideration to the 3553(a) factors, then the court need not expressly
discuss each of them, see United States v. Williams, 425 F.3d 478, 480 (7th Cir.
2005), but a district court abuses its discretion if it fails to discuss a “potentially
meritorious argument” concerning the applicability of the sentencing factors raised
by the defendant, see United States v. Cunningham, 429 F.3d 673, 679 (7th Cir.
2005).
Recently, the Supreme Court has commented on just how explicitly a
sentencing court must explain its rationale for rejecting a defendant’s argument for
a reduced sentence. In United States v. Rita, 127 S. Ct. 2456 (2007), the Court
No. 06-4186 Page 4
noted that it is important for the sentencing judge to set forth his reasons for
imposing a particular sentence “to satisfy the appellate court that he has considered
the parties' arguments and has a reasoned basis for exercising his own legal
decisionmaking authority.” Id. at 2468. The amount a judge must say is based on
the particular circumstances of the case. Id. Because the record in Rita reflected
that the judge considered the defendant’s arguments, the Court held that given the
simplicity of the issues involved, a more thorough explanation of the reasons for
rejecting the arguments was not warranted. Id. at 2469.
Here, the district court provided an adequate explanation for rejecting
Benzing’s argument. Specifically, after Benzing urged the court to credit him for
the earlier sentence, the court observed that Benzing’s multiple fraud schemes
indicated a propensity for future criminal misconduct. This observation indicates
the court’s assessment that Benzing’s repetitive offenses warranted an increased,
not decreased, sentence.
Furthermore, Benzing’s argument is not “potentially meritorious,” and thus,
it was not necessary for the district court to reject it explicitly. See Cunningham,
429 F.3d at 678 (sentencing court need not discuss nonmeritorious arguments); cf.
Rita, at 2468 (when nonfrivolous arguments for an outside-guidelines sentence are
presented, a district court generally will explain why it has rejected them).
Benzing’s argument for a functionally concurrent sentence easily fails under the
policy statements of the guidelines. A defendant is entitled to a concurrent
sentence if (1) he is serving an undischarged prison term for an earlier, relevant
offense and (2) consideration of the earlier, relevant conduct increased the sentence
of his current conviction. U.S.S.G. § 5G1.3(b). Sentencing Commission policy also
gives the sentencing court discretion to reduce the sentence of a defendant who has
already been discharged from prison if section 5G1.3(b) would apply were the
defendant serving a prison term at the time of sentencing. See U.S.S.G. § 5K2.23.
But by the express terms of section 5G1.3(b), a defendant is not entitled to a
concurrent sentence for relevant conduct if section 5G1.3(a) applies; that is, “[i]f the
instant offense was committed . . . after sentencing for, but before commencing
service of” another term of imprisonment. U.S.S.G. § 5G1.3(a). In that case, the
sentences are to run consecutively. Id. Here, Benzing committed his mail fraud
offense on December 24, 2001—just three days after he was sentenced for his first
fraud scheme—taking his second offense squarely outside of the scope of section
5G1.3(b) and thus outside of the section 5K2.23 policy statement. In other words,
had Benzing’s first sentence not been fully discharged when he was sentenced for
his second offense, sentencing policy would have urged a consecutive, not a
concurrent, sentence. See United States v. Dote, 328 F.3d 919, 925 n.3 (7th Cir.
2003) (noting that Sentencing Commission policy calls for consecutive sentences
(i.e., no credit) when the defendant commits another crime after being sentenced on
No. 06-4186 Page 5
relevant conduct). Thus, under the terms of the Sentencing Commission policy,
Benzing does not deserve a credit that would amount to a functionally concurrent
sentence.
Benzing also argues that presuming a sentence within the guidelines range
to be reasonable is inconsistent with United States v. Booker, 543 U.S. 220 (2005).
But the Supreme Court has recently decided that Courts of Appeals may apply a
rebuttable presumption that a within-guidelines sentence is reasonable and that
doing so does not violate the Sixth Amendment. See Rita, at 2462-65. Besides his
argument for a sentencing credit, Benzing presented no other argument that his
sentence was unreasonable. In any event, the record reflects that the sentence is
reasonable because the district court appropriately considered and applied the
18 U.S.C. § 3553(a) factors. See United States v. Vaughn, 433 F.3d 917, 925 (7th
Cir. 2006); United States v. Dean, 414 F.3d 725, 729 (7th Cir. 2005). The district
court expressed “concern[ ] about the repetitive crimes that [Benzing] engaged in.”
But it also found significant that he had behaved well after his discharge from
prison. It concluded that a 55-month sentence was “necessary to protect the
community from criminal acts on [Benzing’s] part while [he is] incarcerated, reflect
the seriousness of [his] crimes, and hold [him] accountable for those crimes.”
The district court considered Benzing’s argument for a reduced sentence, and
especially given the argument’s lack of merit, adequately discussed its reasons for
imposing a 55-month sentence. And, this sentence was reasonable.
AFFIRMED.