Booker Variances - How Far Can a Sentencing Court Go? (7/18/12)

Since Booker, white collar crime practitioners -- including tax crime practitioners -- have devoted much creative time to Booker variances from the rigidity of the Sentencing Guidelines.  See, for example, my blog on Major 3d Circuit En Banc Decision on Booker Sentencing in Tax Case (4/17/09), here, discussing a major Booker downward variance in a tax case.

Doug Berman, the sentencing guru, has a posting about a significant 1st Circuit decision, United States v. Prosperi, 686 F.3d 32 (1st Cir. 2012), here.  Berman's posting, First Circuit affirms (way-)below-guideline sentence for Big Dig white-collar offenders, is here.

Berman quotes the opening paragraphs of Prosperi and then concludes:  "Prosperi is a must-read not just for white-collar federal sentencing practitioners, but for all those still unsure about the scope of sentencing discretion in the post-Booker world."  So, I offer the opening and the closing paragraphs of the opinion.

The United States challenges the sentences imposed on appellees Robert Prosperi and Gregory Stevenson after their conviction of mail fraud, highway project fraud, and conspiracy to defraud the government. Both appellees were employees of Aggregate Industries NE, Inc. ("Aggregate"), a subcontractor that provided concrete for Boston's Central Artery/Tunnel project, popularly known as the "Big Dig." The government charged that over the course of nine years Aggregate knowingly provided concrete that failed to meet project specifications and concealed that failure by creating false documentation purporting to show that the concrete provided complied with the relevant specifications. Several employees of Aggregate, including Prosperi and Stevenson, were convicted of criminal offenses for their roles in the scheme. 

At sentencing, the district court calculated the guidelines sentencing range ("GSR") for Prosperi and Stevenson as 87- to 108-months incarceration. Then, explaining fully its rationale for a below-guidelines sentence, the court sentenced Prosperi and Stevenson to six months of home monitoring, three years of probation, and 1,000 hours of community service. The government now appeals, arguing that under Gall v. United States, 552 U.S. 38 (2007), the sentences imposed by the district court were substantively unreasonable and that the appellees' crimes warrant incarceration.

We affirm. Although the degree to which the sentences vary from the GSR gives us pause, the district court's explanation ultimately supports the reasonableness of the sentences imposed. The district court emphasized that its finding on the loss amount caused by the crimes, the most significant factor in determining the GSR, was imprecise and did not fairly reflect the defendants' culpability. Hence it would not permit the loss estimate to unduly drive its sentencing decision. Relatedly, it found that there was insufficient evidence to conclude that the defendants' conduct made the Big Dig unsafe in any way or that the defendants profited from the offenses. The court then supplemented these critical findings with consideration of the individual circumstances of the defendants and concluded that probationary sentences were appropriate. We cannot say that it abused its discretion in doing so. 

* * * * 

As we said at the outset of this opinion, the degree to which the sentences challenged in this appeal vary from the GSR has given us pause. We are mindful of how rare it is to encounter a variance of this magnitude. See United States v. Negroni, 638 F.3d 434, 446 (3d Cir. 2011) (noting, in a case involving a 70- to 87-month GSR and a probationary sentence, that "[t]he parties have not identified any case, and we have not found one, in which an appellate court upheld a probationary sentence that so significantly varied from the Guidelines range"). One can easily argue that home confinement remains an unreasonably shallow sentence for a serious and deliberate crime which had the potential to cause large monetary loss and even physical harm to others. Many judges would have imposed prison sentences in this case even though no actual loss or harm was established, save possibly to public confidence. 

That said, "while the extent of the difference between a particular sentence and the recommended Guidelines range is surely relevant, courts of appeals must review all sentences -- whether inside, just outside, or significantly outside the Guidelines range -- under a deferential abuse-of-discretion standard." Gall, 552 U.S. at 41. As we have previously observed, "Gall teaches that it is error to allow the dramatic nature of variance to unduly influence our review for substantive reasonableness." United States v. Thurston, 544 F.3d 22, 25 (1st Cir. 2008). We have acknowledged that even when we believe that a § 3553(a) goal is not met by a sentence, we must consider the totality of the circumstances, and in particular whether the sentence sacrifices that goal to satisfy other legitimate competing interests of the sentencing regime. Id. (finding three-month sentence reasonable despite 63- to 78-month GSR). 

In this case, the district court carefully explained its sentencing decisions. Most significantly, the court explained why the estimated loss amount was an unfair proxy for culpability, and why it should not drive the sentencing process. Importantly, it also found that there was insufficient evidence to conclude that the defendants' conduct compromised the structural integrity of the Big Dig, or that they sought to enrich themselves. Coupled with the individual circumstances of the defendants, these findings provided a "plausible explanation [for the sentences], and the overall result is defensible." Innarelli, 524 F.3d at 292. 

For the foregoing reasons, the judgment of the district court is affirmed.

In the body of the opinion,  the appellate panel spent some time on the deterrence factor. Readers will recall that the Sentencing Guidelines makes a special emphasis on deterrence in sentencing for tax crimes. S.G. Ch. 2, Pt. T: 

The criminal tax laws are designed to protect the public interest in preserving the integrity of the nation's tax system. Criminal tax prosecutions serve to punish the violator and promote respect for the tax laws. Because of the limited number of criminal tax prosecutions relative to the estimated incidence of such violations, deterring others from violating the tax laws is a primary consideration underlying these guidelines. Recognition that the sentence for a criminal tax case will be commensurate with the gravity of the offense should act as a deterrent to would-be violators.

See also my prior blog, Fourth Circuit Cites S.G. Tax Sentencing Policy in Reversing Sentencing Variance (1/16/10), here.

This special deterrence imperative, although not as prominent, for white collar crimes generally, is still present.  Here is the Prosperi panel's discussion of deterrence (pp. 35-37 of the slip opinion):

Additionally, the court understood and credited the argument that incarceration increases the deterrent effect of a sentence on others. It weighed this benefit of incarceration against the costs of incarceration: 

There is one benefit, and only one, that I see in this case to incarceration, and that is the sanction of deterrence that an incarcerated [sic] sentence would pose for others. Beyond that, society's interest in incarceration as opposed to atonement does not weigh heavily. There is no risk of recidivism on the part of either of these defendants. Incarceration will incur a large cost to taxpayers, and an even larger personal cost in Mr. Prosperi's case to his ill wife and, to some degree, to Mr. Stevenson's family, as I recognize that they both play important roles as caregivers and caretakers in their families. 

With this explanation, the district court fulfilled its obligation to consider the importance of general deterrence in fashioning its sentences. It decided for the reasons given that the other interests at stake made a non-incarcerative sentence appropriate in this case. It rejected the view that the interest in general deterrence could only be served by incarceration.