Opinion
S2 03 Cr. 1115 (RWS).
June 13, 2006
SENTENCING OPINION
Defendant William Martin ("Martin") has pled guilty to conspiracy to commit mail fraud in violation of 18 U.S.C. § 1349, a Class C felony, to mail fraud in violation of 18 U.S.C. §§ 1341, 1342, a Class C felony, and to fraudulent use of a social security number in violation of 42 U.S.C. § 408 (a) (7) (B), a Class D felony. Under the United States Sentencing Guidelines, Martin is hereby sentenced to a term of imprisonment of 37 months.
Prior Proceedings
On August 27, 2003, Martin was arrested and released on bail with a $100,000 personal recognizance bond. On September 16, 2003, an indictment was filed in the Southern District of New York charging that: from July 2002 through August 2003, Martin and others engaged in conspiracy to commit mail fraud in violation of 18 U.S.C. § 1349 (Count One); that from July 2002 through August 2003, Martin and others solicited individuals across the United States to purchase vending machines but failed to supply the vending machines, in violation of 18 U.S.C. §§ 1341, 1342 (Count Two); and that on July 15, 2002, Martin used a Social Security number that was not his own to open a bank account into which the proceeds of a fraud were deposited, in violation of 42 U.S.C. § 408 (a) (7) (B) (Count Three).
On May 19, 2005, Martin appeared before the Honorable Gabriel W. Gorenstein in the Southern District of New York and allocuted to Counts One, Two, and Three without the benefit of a plea agreement. Martin is scheduled to be sentenced before this Court on June 13, 2006.
The Sentencing Framework
In accordance with the Supreme Court's decision in United States v. Booker, 125 S. Ct. 738 (2005) and the Second Circuit's decision in United States v. Crosby, 397 F.3d 103 (2d Cir. 2005), the sentence to be imposed was reached through consideration of all of the factors identified in 18 U.S.C. § 3553 (a), including the advisory Sentencing Guidelines (the "Guidelines") establishing by the United States Sentencing Commission. Thus, the sentence to be imposed here is the result of a consideration of:
(1) the nature and circumstances of the offense and the history and characteristics of the defendant;
(2) the need for the sentence imposed —
(A) to reflect the seriousness of the offense, to promote respect for the law, and to provide just punishment for the offense;
(B) to afford adequate deterrence to criminal conduct;
(C) to protect the public from further crimes of the defendant; and
(D) to provide the defendant with needed educational or vocational training, medical care, or other correctional treatment in the most effective manner;
(3) the kinds of sentences available;
(4) the kinds of sentence and the sentencing range established for —
(A) the applicable category of offense committed by the applicable category of defendant as set forth in the guidelines . . .;
(5) any pertinent policy statement . . . [issued by the Sentencing Commission];
(6) the need to avoid unwarranted sentence disparities among defendants with similar records who have been found guilty of similar conduct; and
(7) the need to provide restitution to any victims of the offense. 18 U.S.C. § 3553 (a). A sentencing judge is permitted to find all the facts appropriate for determining a sentence, whether that sentence is a so-called Guidelines sentence or not. See Crosby, 397 F.3d at 111.The Defendant
Martin is a 63 year-old man who graduated from high school. Martin endured a long struggle with a cocaine addiction (powder and crack), which he overcame a few years ago. The specific facts relating to Martin's characteristics and history are adopted as set forth in the Pre-Sentence Investigation Report of May 30, 2006.
The Offense Conduct
An investigation of the underlying offenses was conducted by the United States Postal Inspection Service ("USPIS"). The investigation revealed that Martin and others placed advertisements in local newspapers for companies ("Traditional Steel," "Quarters Only," and "PowerVend") that purported to sell coin-operated vending machines. A number of victims contacted these companies in order to purchase vending machines and were directed to send payments to Traditional Steel in the form of cashier's checks, personal checks, and/or wire transfers. In turn, approximately one-half to one-third of the victims never received the vending machines they were promised or received machines of lesser quality than what were promised. The specific facts of the underlying offenses are adopted as set forth in the Pre-Sentence Investigation Report dated May 30, 2006.
Martin was not involved in the scheme that was conducted under the name "PowerVend."
Relevant Statutory Provisions
The maximum term of imprisonment that may be imposed for Counts One and Two is twenty years per count. See 18 U.S.C. § 1341. The maximum term of imprisonment that may be imposed for Count Three is five years. See 42 U.S.C. § 408 (a) (7) (B).
If a term of imprisonment is imposed, the Court may impose a term of supervised release of not more than three years on each Count, pursuant to 18 U.S.C. § 3583 (b) (2). Such terms of supervised release shall run concurrently, pursuant to 18 U.S.C. § 3624(e).
The defendant is eligible for not less than one nor more than five years' probation by statute. See 18 U.S.C. § 3561(c) (1). Because the offenses are felonies, one of the following must be imposed as a condition of probation unless extraordinary circumstances exist: a fine, restitution, or community service. 18 U.S.C. § 3563(a) (2).
The maximum fine that may be imposed for Counts One, Two, and Three is $250,000 per count, pursuant to 18 U.S.C. § 3571(b) (3). A special assessment of $100 per count is mandatory. See 18 U.S.C. § 3013.
Full restitution to the victims of the underlying offenses is required under 18 U.S.C. §§ 3663A and 3664. Restitution in the amount of $542,985 is owed to the victims in this case.
The Guidelines
The November 1, 2004 edition of the United States Sentencing Commission Guidelines Manual ("the Guidelines") has been used in this case for calculation purposes, in accordance with Guidelines § 1B1.11 (b) (1).
The guideline for a violation of 18 U.S.C. §§ 1341 and 1349 is found in U.S.S.G. § 2B1.1, which provides for a base offense level of 6. See U.S.S.G. § 2B1.1 (a).
The Government's Pimentel letter sets forth a base offense level of 6. Under Section 2B1.1 (a) (1), the base offense level technically should be 7, as the maximum sentence that may be imposed by statute is twenty years or more. However, because of the Government's Pimentel letter and because the base offense level used for co-defendant Darrin Mosca was 6, it is concluded that a base offense level of 6 shall be used for Martin.
The victims of the underlying offenses suffered a loss of approximately $542,985. Because the amount of loss was greater than $400,000, but less than $1,000,000, the offense level is increased by 14 levels, pursuant to § 2B1.1 (b) (1) (H).
Martin has contested the loss amount determination arguing that: (1) he did not participate in Power Vend; (2) he is responsible for only those customers to whom he spoke; and (3) he is only responsible for those losses incurred after he realized the customers were being defrauded. However, as the Government points out, in the case of jointly undertaken criminal activity, specific offense characteristics shall be determined on the basis of "all reasonably foreseeable acts and omissions of others in furtherance of the jointly undertaken criminal activity." § 1B1.3 (a) (1). While the scope of criminal activity a defendant decided to undertake may not necessarily be the scope of the entire conspiracy, where, as here, a defendant embraces the conspiracy as a whole and does not merely act as an independent sales person, see United States v. Studley, 47 F.3d 569 (2d Cir. 1995), he is responsible for the losses of the entire conspiracy.
Because the offense involved fifty or more victims, the offense level is increased by four additional levels. See U.S.S.G. § 2B1.1 (b) (2) (B).
Martin has shown recognition of responsibility for his offense. Therefore, because his base offense level is 16 or greater, his offense level is reduced by three levels. See U.S.S.G. § 3E1.1 (a) and (b). The resulting adjusted offense level is 21.
Minor Role Adjustment
Martin contends that he is entitled to a minor role adjustment, pursuant to § 3B1.2 (b).
A defendant has the burden of proving by a preponderance of the evidence that he is entitled to a minor-role adjustment under U.S. Sentencing Guidelines Manual § 3B1 (2004). The United States Court of Appeals for the Second Circuit holds that a minor-role reduction will not be available simply because the defendant played a lesser role than his co-conspirators; to be eligible for a reduction, the defendant's conduct must be "minor" as compared to the average participant in such a crime. A district court's analysis of a defendant's role in criminal activity is, accordingly, highly fact-specific and depends on the nature of the defendant's relationship to the other participants, the importance of the defendant's actions to the success of the venture, and the defendant's awareness of the nature and scope of the criminal enterprise.
It is concluded that there is no basis for a finding that Martin is substantially less culpable than the average participant in this scheme. There were only four members charged in this conspiracy, one of whom (Eric Behr) had a significantly smaller role in the conspiracy than Martin did. While Martin did not play the same role in organizing the scheme as Darrin Mosca, Martin is as culpable as the other salesmen.
Criminal History
Martin was arrested on April 30, 1993 for forgery in the second degree, an offense for which he served five years' probation. This offense results in one criminal history point.
The total number of criminal history points ascribed Martin is one. According to the sentencing table at Chapter 5, Part A, one criminal history point establishes a Criminal History Category of I.
Sentencing Options
Based on a total offense level of 21 and a Criminal History Category of I, the guideline range for imprisonment is 37 to 46 months. See Ch. 5 Pt. A (Sentencing Table).
The guideline range for a term of supervised release for the instant offenses is at least two years, but not more than three years, to run concurrently. See U.S.S.G. § 5D1.2(a) (2). If a sentence of one year or less is imposed a term of supervised release is not required but is optional, pursuant to U.S.S.G. § 5D1.1(b). Supervised release is required if the Court imposes a term of imprisonment of more than one year or when required by statute, pursuant to U.S.S.G. § 5D1.1(a).
Because the applicable guideline range is in Zone D of the Sentencing Table, the defendant is not eligible for probation, pursuant to U.S.S.G. § 5B1.1, application note 2.
The fine range for the instant offense is from $7,500 to $75,000. See U.S.S.G. § 5E1.2 (c) (3) (A).
Pursuant to U.S.S.G. § 5E1.1 (a) (1), in the case of identifiable victims, the Court shall enter a restitution order for the full amount of the victims' loss. The Remaining Factors of Section 3553(a)
Having engaged in the Guideline analysis, this Court also gives due consideration to the remaining factors identified in 18 U.S.C. § 3553(a) in order to impose a sentence "sufficient, but not greater than necessary" as is required in accordance with the Supreme Court's decision in United States v. Booker, 125 S. Ct. 738 (2005) and the Second Circuit's decision in United States v. Crosby, 397 F. 3d 103 (2nd Cir. 2005). In particular, section 3553(a) (1) asks that the sentence imposed consider both "the nature and circumstances of the offense and the history and characteristics of the defendant," while section 3553(a) (2) (A) demands that the penalty "provide just punishment for the offense" that simultaneously "afford[s] adequate deterrence to criminal conduct" as required by § 3553(a) (2) (B). Furthermore, pursuant to § 3553(a) (6), the Court is also mindful of "the need to avoid unwarranted sentence disparities among defendants with similar records who have been found guilty of similar conduct."
Taking the aforementioned factors into account, it is concluded that a guideline sentence is warranted in the instant case. The Sentence
Martin is hereby sentenced to a term of imprisonment of 37 months.
A sentence of two years' supervised release is also imposed. Martin shall report to the nearest Probation Office within 72 hours of release from custody, and supervision will be in the district of his residence.
As mandatory conditions of supervised release, Martin shall: (1) not commit another federal, state, or local crime; (2) not illegally possess a controlled substance; (3) not possess a firearm or destructive device; (4) refrain from any unlawful use of a controlled substance; and (5) cooperate in the collection of DNA as directed by the probation officer.
The following special conditions of supervised release are also imposed: (1) the defendant shall provide the probation officer with access to any requested financial information; (2) the defendant shall not incur new credit charges or open additional lines of credit without the approval of the probation officer, unless the defendant is in compliance with the compliance payment schedule; and (3) the defendant will participate in a program approved by the United States Probation Office to include testing to determine whether the defendant reverts to using drugs or alcohol.
It is further ordered that the defendant shall make restitution payable to the Clerk, U.S. District Court, in the amount of $542,985, for disbursement to the individual victims. The restitution shall be paid in monthly installments of ten percent of gross monthly income over a period of supervision to commence thirty days after the release from custody.
Martin shall also pay to the United States a special assessment of $300, which shall be due immediately. Due to the imposition of restitution, the fine in this case is waived.
It is so ordered.