not set for oral argument brief for appellant united …€¦ · · 2015-03-12not set for oral...
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NOT SET FOR ORAL ARGUMENT
BRIEF FOR APPELLANT
UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT
No. 14-3041
UNITED STATES OF AMERICA,
Appellee
v.
PAUL F. KAUFMAN,
Appellant
Michael Alan Olshonsky
1757 U. Street, NW
Washington, DC 20009-1703
(202) 276-0046
Bar No. 168070
Counsel for Appellant
Appointed by the Court
Criminal No. 1:14-cr-00010-KBJ-1
CERTIFICATE OF PARTIES,
RULINGS, AND RELATED CASES
A. Parties and amici: The parties to this appeal are appellant,
Paul F. Kaufman, and appellee, the United States of America. There are no amici.
B. Rulings under review: Appellant Paul F. Kaufman appeals his
plea and sentencing on one count of Theft Concerning Program Receiving Federal Funds in violation of Title 18, U. S. C. §666(a)(1)A.
C. Related cases: There are no related cases. .
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TABLE OF CONTENTS
Page
Certificate as to Parties, Rulings and related cases……………….. i Table of Contents ……………………………………………….... ii Statement of Jurisdiction………………………………………….. iii Glossary…………………………………………………………… iv Table of Authorities……………………………………………….. v Issue Presented…………………………………………………….. vii Preliminary Statement of the Case………………………………… 1 Statement of Facts…………………………………………………. 2 Summary of Argument…………………………………………….. 6 Argument…………………………………………………………... 7 Conclusion…………………………………………………………. 11 Certificate of Service………………………………………………. 12
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STATEMENT OF JURISDICTION
This Court has jurisdiction to hear this appeal from the judgment and sentence of the United States District Court for the District of Columbia rendered on June 19, 2014 under the provisions of Title 28 U.S.C. §1291 after the appellant filed his Notice of Appeal on July 2, 2014 pursuant to the provisions of Rule 3 of the Federal Rules of Appellate Procedure.
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GLOSSARY
Transcript of Sentencing Hearing on June 19, 2014 before the Honorable Ketanji Brown Jackson, United States District Judge referred herein as “(Sentencing p. _____.]”
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TABLE OF AUTHORITIES
Cases: Page
Gall v. United States, 552 U.S. 38, 128 S.Ct. 586, 596, 169 L.Ed.2d 445 (2007)…….. 8 * Kimbrough v. United States, 552 U.S. 85, 128 S.Ct. 558, 169 L.Ed.2d 481 (2007)…………. 7, 8 * Rita v. United States,
551 U.S. 338, 127 S.Ct. 2456, 168 L.Ed.2d 203 (2007)……….. 3 United States v. Bane,
720 F.3d 818 (11th Cir. 2013)………………………………….. 10 United States v. Blalock, 571 F.3d 1282, 1285 (D.C.Cir.2009)…………………………… 8, 9 United States v. Corsey,
723 F.3d 366 (2d. Cir 2013)……………………………………. 11 United States v. Dawkins,
202 F.3d 711 (4th Cir. 2000)……………………………………. 9, 10 United States v. Parsons, 109 F.3d 1002 (4th Cir. 1997)………………………………….. 9 United States v. Salahmand,
651 F.3d 21 (D.C. Cir. 2011)…………………………………… 9 United States v. Whatley,
133 F.3d 601 (8th Cir. 1998)…………………………………….. 10 *Cases chiefly relied upon.
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TABLE OF AUTHORITIES Statutes: Page
18 U.S.C. §666(a)(1)(A)………………………………………… i, I 18 U.S.C. §3552(a)……………….……………………………... 9 18 U.S. C. §3553(a)……………………………………………. 5, 8 28 U.S.C. §1291…………………………..…………………..…. I, ii U.S.S.G. §2B1.1, cmt. (n. 3(F)(v)(III)………..………………… 10 U.S.S.G. § 2B1.1 Application Note 19(C)……………………… 11 U.S.S.G. §3D1.2(d)……………………………………….……. 11 U.S.S.G. §3E(i)…………………………………………………. 3 U.S.S.G. §3F(v)…………………………………………………. 10 Rules: Rule 3, Federal Rules of Appellate Procedure………………….. iii Rule 32, Federal Rules of Criminal Procedure…………………. 9 References: United States Sentencing Commissions Interactive Source Book 6
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ISSUES PRESENTED
Whether the Court erred in refusing to allow credit for work which benefitted
the victim against the loss it claimed in its calculation of the proper sentencing
guideline range and properly considered the factors set forth in Title 18 §3553(a) in
reaching its sentencing decision?
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UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT
UNITED STATES OF AMERICA * * Appellant * * v. * Appeal No. 14-3041 * from 1:14-cr-00010-KBJ-1 * * PAUL F. KAUFMAN * * Appellee. *
PRELIMINARY STATEMENT OF THE CASE
The appellant was sentenced by Judge Ketanji Brown Jackson, in the United States District Court for the District of Columbia on June 25, 2014 to Twenty-Four (24) months of Incarceration to be followed by Thirty-Six months of Supervised release; a $100 Special Assessment and Restitution in the amount of $157,516.21 (Docket Entry No. 24) after his entry of a guilty plea to one count of Theft Concerning Program Receiving Federal Funds (Docket Entry Nos. 2-5) a violation of 18 U.S.C. §666(a)(1)(A). Kaufman filed a Notice of Appeal in the United States District Court for the District of Columbia Circuit on July 2, 2014 (Docket Entry No. 27).
STATEMENT OF FACTS
On February 5, 2014, the appellant entered a plea of guilty to one count of Theft Concerning Program Receiving Federal Funds 18 U.S.C. §666(a)(1)(A)
pursuant to a signed plea agreement (Addendix, p. 123-135) in which he admitted to
using two companies he owned, Point Networking Systems (“PNS”) and Capital-
Tec, to bill the Center for Strategic and International Studies (“CSIS”) and receive
a total of $110.925.36 for computer services and obtained at least $46,950.85 from
CSIS by using its corporate credit cards for his personal expenses.
On June 19, 2014, appellant appeared before the Honorable Ketanji Brown
Jackson for purpose of a Sentencing Hearing at which the appellant, through his
counsel, Kira Ann West and the United States, through its representative, Assistant
United States Attorney Ephraim (Fry) Wernick argued their respective positions to
what would be an appropriate sentence in the instant case.
Ms. West opening argument was, that although she agreed with the Court that
“it appears that the presentence report does not contain any information that the
parties dispute and that any objections have been resolved,” “[t]he only issue really
is how loss is determined and whether the losses equal the fraud.” (Sentencing, p. 2,
lns. 24-25 and p. 3 lns. 1-4.).
After satisfying itself, that Kaufman had reviewed his presentence report with his lawyer and was satisfied with Ms. West’ representation, the Sentencing Court adopted the factual statement contained in the report “with the exception of
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the loss calculation,” as its findings (Sentencing, pps. 5-6,) and turned to the first of
appellant’s argued framed by the prosecuting attorney – the issue of loss to be
attributed to him in the calculation.
Appellant’s position was that “we believe that because the outside work he
did was needed, that it was good outside work and because the guidelines in 3E1 in
the application note states that the loss should be – his work should be credited
against that loss.” (Sentencing, p. 10, lns. 9-13).
As the Court understood appellant’s argument on the Guideline calculation
“is that rather than a ten-level increase in loss, it should be an eight-level increase
because the amount attributed to certain services that Mr. Kaufman performed
should be credited because these services were actually performed.” (Sentencing,
p.11, lns. 4-9).
The government’s argued that since “there’s no disagreement about how the
loss was calculated here . . . what we’re talking about is simply limited to any credits
that can be applied” [under Comment 3E(i) of the Sentencing Guidelines] and “[o]ur
position is very simple. He’s already been paid for services rendered.” (Sentencing,
p. 20, lns. 14-20).
The Sentencing Court distinguished the authorities provided by appellant by finding that they “say things about the loss amount is the amount fraudulently
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obtained in excess of the amount to which the defendant was lawfully entitled.
That’s exactly the situation here. “[T]he defendant . . . was getting a salary for the
services that were provided . . . and to the extent that he then created a sham
corporation to bill the organization for those same services, the amount of that billing
is in excess of the amount to which he was entitled. That is, we have a loss here. I
mean, credits against loss is a situation in which there really isn’t a loss to the victim
because there was some benefit that was conferred and the victim would have paid
extra for it anyway.” (Sentencing, p. 22, lns. 8-22).
“Credits against loss is not an applicable concept, and so, the entire amount
of the loss as set forth in the PSR and in the government sentencing memorandum is
accepted and will be counted for the purpose of the guideline calculation. So that
means that there’s a ten-level increase in the base offense level under 2.2B1.1.”
(Sentencing, p. 23, lns. 18-21).
The government argued against any variance by the Sentencing Court by
distinguishing the instant case from those where variances were granted where the
loss was much greater than what was intended as opposed to where the amounts
received and the loss were exactly what appellant intended. (Sentencing, p. 32, lns.
4-12).
Appellant’s counsel asked for a variance for family circumstances because
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of the problems and medical needs of his son, a veteran of the Iraq conflict and
because of the need of his wife to have hip replacement surgery. She also argued
that the loss was relatively slight compared to the financial condition of the victim
and characterized that crime as more of a breach of trust that one of greed which
was deserving of incarceration. (Sentencing, p. 46).
In considering the factors to be weighed under the provisions of Title 18,
§3553(a), the Sentencing Court concluded that because of the continuing nature of
the offense involving “hundreds of discrete acts . . . over a period of years”
(Sentencing, p. 43, lns. 7-10) that the offense was “rather than a conflict of interest
fraud, the conduct here is more like an embezzlement, and that’s a very serious
crime.” (Sentencing, p. 44, lns. 10-13). “[T]his is more like theft and a case in which
Mr. Kaufman used his authority and the trust that the employer placed in him to steal
this money.” (Sentencing, p. 45, lns. 20-21).
The Sentencing Court decided that the nature of the appellant had been
adequately compensated for his lack of any criminal history on its effect on the
Sentencing Guideline range “because the guidelines already account for your lack
of criminal history. (Sentencing, p. 46, lns. 21-22) It also determined that his early
cooperation had been adequately been taken into account by the 2-level reduction in
Guideline level for Acceptance of Responsibility. (Sentencing, p. 47, lns. 13-17).
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Addressing the avoidance of unwarranted sentencing disparities, the Court
cited the United States Sentencing Commissions Interactive Source Book to state
that the average prison term imposed “in this district in 2012 . . . for a fraud of [sic]
theft offense . . . in criminal history category I . . . was 24 months.” (Sentencing, p.
48, lns. 7-10) and concluded that “a guideline sentence within the guideline range is
appropriate and that a penalty of 24 months of imprisonment is sufficient but not
greater that necessary to promote the purpose of sentencing. (Sentencing, p. 49, lns.
3-7).
SUMMARY OF ARGUMENT
Appellant should have been allowed to establish and receive credit for work
performed for CSIS, but billed by his independent companies, PNS and Capital-Tec,
against the loss determined by the Sentencing Court in its calculation of the
Sentencing Guideline range resulting in a 2-level reduction in the applicable
Sentencing Guideline range to establish a 18 to 24 month guideline rather than the
24 to 30 month range the Court used in reaching its sentencing decision.
The Sentencing Court failed to adequately take into account the Appellant’s personal circumstances in light of his family difficulties involving the care of a child who was disabled by service to his country and the immediate medical attention needed by his spouse in connection with hip replacement surgery and his
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early disposition of the matter due to his immediate admissions to law enforcement authorities and continued cooperation with the Office of the United States Attorney
for the District of Columbia.
Basing its decision on statistical data which the Sentencing Court clearly
indicated may not have been an accurate guide in light of its lack of knowledge of
the circumstances of the large number of case similar to the Appellant’s which
resulted in probation was a sufficient basis upon which to avoid unwarranted
sentencing disparities.
ARGUMENT
THE COURT ERRED IN REFUSING TO ALLOW
CREDIT FOR WORK WHICH BENEFITTED THE
VICTIM AGAINST THE LOSS IT CLAIMED IN ITS
CALCULATION OF THE PROPER SENTENCING
GUIDELINE RANGE AND DID NOT PROPERLY
CONSIDER THE FACTORS SET FORTH IN TITLE
18, U.S.C. §3553(a) IN REACHING ITS SENTENCING
DECISION.
The general scheme to be followed by sentencing courts in the United States
District Courts was set by the United States Supreme Court its decision in
Kimbrough v. United States, 552 U.S. 85, 128 S.Ct. 558, 169 L.Ed.2d 481
(2007): “instructing district courts to “impose a sentence sufficient, but not greater
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than necessary” to accomplish the goals of sentencing, including “to reflect the
seriousness of the offense,” “to promote respect for the law,” “to provide just
punishment for the offense,” “to afford adequate deterrence to criminal conduct,”
and “to protect the public from further crimes of the defendant.” 18 U.S.C. §3553(a)
(2000 ed. and Supp. V).”
“[T]he court should consider a number of factors, including “the nature and
circumstances of the offense,” “the history and characteristics of the defendant,” “the
sentencing range established” by the Guidelines, “any pertinent policy statement”
issued by the Sentencing Commission pursuant to its statutory authority, and “the
need to avoid unwarranted sentence disparities among defendants with similar
records who have been found guilty of similar conduct.” Kimbrough, at 101.
In Gall v. United States, 552 U.S. 38, 128 S.Ct. 586, 596, 169 L.Ed.2d 445
(2007), the Court held that appellate review of sentencing decisions is limited to
determining whether they are “reasonable.” Our explanation of “reasonableness”
review in the Booker opinion made it pellucidly clear that the familiar abuse-of-
discretion standard of review now applies to appellate review of sentencing
decisions.
In reviewing a sentencing challenge, this court must first determine whether
the district court calculated the correct Guidelines sentencing range. See United
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States v. Blalock, 571 F.3d 1282, 1285 (D.C. Cir. 2009) (citing Gall, supra. In
making that determination, “[p]urely legal questions are reviewed de novo; factual
findings are to be affirmed unless clearly erroneous; and we are to give due deference
to the district court's application of the guidelines to facts.” United States v.
Salahmand, 651 F.3d 21 (D.C. Cir. 2011).
“The sentencing judge, as a matter of process, will normally begin by
considering the presentence report and its interpretation of the Guidelines. 18
U.S.C. §3552(a); Fed. Rule Crim. Proc. 32. He may hear arguments by prosecution
or defense that the Guidelines sentence should not apply, perhaps because (as the
Guidelines themselves foresee) the case at hand falls outside the “heartland” to
which the Commission intends individual Guidelines to apply, USSG §5K2.0,
perhaps because the Guidelines sentence itself fails properly to reflect §3553(a)
considerations, or perhaps because the case warrants a different sentence
regardless, see Rule 32(f).” Rita v. United States, 551 U.S. 338, 127 S.Ct. 2456,
168 L.Ed.2d 203 (2007).
Calculations involving credits for funds which were found to be due to
defendants involved in fraudulent claims cases were upheld in United States v.
Dawkins, 202 F.3d 711 (4th Cir. 2000) and in United States v. Parsons, 109 F.3d
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1002 (4th Cir. 1997). Citing Parsons, the 4th Circuit Court of Appeals held that the
loss was only the amount fraudulently claimed. See id. at 1006. “As is relevant
here . . . even if automatic forfeiture of the entire voucher amount were required as
a result of the false statement, this does not mean that the amount forfeited by a
defendant constitutes a loss.” at 714.
Other Courts have rejected the credit against loss calculation, entirely. In
United States v. Bane, 720 F.3d 818 (11th Cir. 2013), the 11th Circuit rejected a
defendant’s argument that the value of oxygen supplies he provided in connection
with his defrauding of a government agency be credited against the victim’s loss in
determining the Federal Sentencing Guideline figure.
“Application Note 3(F)(v) provides: ‘[i]n a case involving a scheme in which
goods for which regulatory approval by a government agency was required but not
obtained, or was obtained by fraud, loss shall include the amount paid for the
property, services or goods transferred, rendered, or misrepresented, with no credit
provided for the value of those items or services. U.S.S.G. §2B1.1, cmt. (n.
3(F)(v)(III)) (emphasis added).”
The question of a calculation of loss versus benefit in determining a
Sentencing Guideline range was considered, but not reached in the 8th Circuit case
of United States v. Whatley, 133 F.3d 601 (8th Cir. 1998). “Under the sentencing
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guidelines provision for grouping related counts, the higher offense level applies to
calculate the sentence for both convictions. See U.S.S.G. §3D1.2(d). Thus, even if
we were to find that Mrs. Whatley laundered less money than the district court
concluded, Mrs. Whatley's sentencing range would not be affected, and since her
sentence was at the very bottom of that range, we conclude that the amount of
money that Mrs. Whatley laundered did not affect her sentence in any way.”
Whatley, at 608.
In the 2d Circuit, in United States v. Corsey, 723 F.3d 366 (2d. Cir 2013) the
Court supported examination of the subject of loss calculation without reaching the
issue of credit in citing “Application note 19(C) to U.S.S.G. §2B1.1 indicates that a
downward departure may be warranted where the offense level resulting from a loss
calculation overstates the seriousness of an offense.”
Appellant provided documentation in support of his argument that work he
provided through his two companies, PNS and Capital-Tec which was rejected by
the Sentencing Court as was his argument.
CONCLUSION
Based upon the foregoing authorities and for such reasons as may be proposed
at oral argument on the issues presented herein, your movant prays that the Court
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grant his request to remand his case to the United States District Court for further
proceedings consistent with its ruling and for such other and further relief as the
interest of justice may require.
Respectfully submitted,
_____________________________ MICHAEL ALAN OLSHONSKY 1757 U. Street, NW Washington, DC 20009-1703 (202) 276-0046, Bar No. 168070 Counsel for Appellant Appointed by the Court
CERTIFICATE OF SERVICE
I, hereby CERTIFY that a copy of the foregoing Brief for Appellant
was served on the Office of the United States Attorney for the District of
Columbia and the Office of the Clerk of the United States Court of Appeals
for the District of Columbia Circuit by electronically filing a copy through the
appellate CM/ECF system on this 30th day of September, 2014.
_____________________________ MICHAEL ALAN OLSHONSKY
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