U.S. v. MEHTA

307 F.Supp.2d 270 (2004) | Cited 1 time | D. Massachusetts | March 3, 2004

SENTENCING MEMORANDUM

Mukund N. Mehta ("Mehta") pleaded guilty on March 11, 2003, to amultiple count Indictment charging him with tax evasion, in violation of26 U.S.C. § 7201, and mail/wire fraud, in violation of18 U.S.C. § 1341 and 1343. The charges relate to a Needham, Massachusetts,photocopy business that Mehta operated under a franchise agreement withSir Speedy, Inc. ("Sir Speedy"). Since Mehta's criminal history was aslow as it could be, a Category I, the sentencing range under the UnitedStates Sentencing Guidelines was driven almost entirely by the offenselevel. Absent departure, Mehta's putative sentence would have been in therange of 18-24 months. The government appropriately emphasized the natureof the offense and its extent, which, with some important exceptionsnoted below, the defendant did not contest.

What the defendant did emphasize through three days of highly emotionalhearings, voluminous exhibits, and the testimony — indeed, tributes— of numbers of people, was the evidence of Mehta's quiteextraordinary life since he emigrated from India toPage 2the United States as a young man. Based on that showing, defendantmoved for a departure under U.S.S.G. § 5H1.11,1 a departure for"charitable, or public service" and "similar good works," a discourageddeparture from the Sentencing Guidelines.2

I concluded that Mehta's case met every single test for this departure:It was not just the volume of the testimonials, although thevolume was impressive: 118 letters were sent to the Court describingMehta's record of charitable and community works; letters, in the natureof petitions, were signed by 399 people, neighbors, friends, customers,members of the community; one hundred people filled the courtroom tooverflowing at Mehta's sentencing, and returned for each of the threedays (which significantly, were not consecutive) no matter what thedistances they had to travel.3Page 3Rather, it was the nature of Mehta's service: Uniqueservice to Mehta's ancient and extremely strict Indian religion("Jainism"), service that took the form of substantial amounts of timeand personal attention (in bringing Jain scholars to Boston, publishingthe sacred Jain literature, facilitating the holding of religiousservices, personally ministering to needy members of the community,etc.), service on which his religious community greatly relied, serviceto the Indian community in the United States no matter what theirreligious affiliation, to his birth village in his native country, and tovictims of a tragic Indian earthquake, service even to the widercommunity of the poor in Boston at the Pine Street Inn, and finally,extraordinary efforts to reach out to an African American friend ofMehta's daughter whom he effectively adopted. To the extent hiscontributions were financial — and that was a small part of theoverall picture — those contributions were extraordinary given hismodest lifestyle and means.

The government argued that the facts of Mehta's life did not meet therigorous standards of the Guidelines. If the government is correct, whencourts refer to a departure that is "discouraged," what they really meansis "prohibited." I can say without equivocation that if Mehta's situationdid not meet the standard, no one could. Whatever the standard for adeparture under U.S.S.G. § 5H1.11, which I describe below, howevermuch it has been narrowed, it was met in this case.Page 4

As I have always done, I address the legal standard for this departure,and then whether the facts justify its application in the instant case. Iproceed in this fashion so that I can assure my own adherence to thepremises of the Sentencing Reform Act ("SRA") of 1984,18 U.S.C. § 3553, and the Guidelines.

The question of whether a given departure is appropriate —whether the case at bar is truly "atypical" — is not simply anempirical question. My charge here is not solely to review all of mycases, all of my colleagues' cases, perhaps all of the criminal casesnationwide, and decide which defendant has contributed the most to hiscommunity by some abstract, illdefined calculus. While an empiricalanalysis is important, and surely helps courts limit the extent of thedeparture so that the exception (departure from the Guidelines) do notswallow the rule (Guideline adherence), it is not the whole picture.Page 5Rather, departures raise normative questions:4 What has "goodworks" got to do with the purposes of punishment embodied in theSentencing Reform Act? How does it relate to the language and thestructure of the Guidelines and the statutes from which they werederived?5

I turn first to the nature of Mehta's offense, then the departureanalysis, and the sentence computation.

I. THE OFFENSE

The defendant has pled guilty to mail fraud and tax evasion, which areserious offenses. Nevertheless, when looked at as a whole, much of hisconduct, although surely not all of it as hisPage 6guilty plea suggests, bespeaks more chaos and disorganization thana coherent effort to defraud anyone.

In 1984, Mehta opened a copy shop as a Sir Speedy franchise in Needham,Massachusetts, hiring James Pattangall ("Pattangall") to performaccounting services and to prepare his tax returns, for the years 1994,1995, and 1996. The record was disputed as to how Pattangall did his job— whether he looked at actual receipts, as Mehta suggested, andcharacterized them inaccurately, or whether he looked at Mehta's accountsof his income, as the government argued.

Under the terms of the franchise agreement, Mehta was required to paySir Speedy a royalty fee equal to five percent of the printing center's"gross sales" as well as an advertising fee equal to two percent of theprinting center's gross sales. Specifically, the franchise agreementrequired Mehta to report the printing center's gross sales to Sir Speedyon a weekly basis via a transmittal sheet that Mehta was to mail to thecompany's corporate offices in California. Along with the transmittalsheet, Mehta was to send two checks: one representing that week's fivepercent royalty fee and the second representing that week's two percentadvertising fee.

Instead of sending in weekly reports, Mehta mailed the transmittalsheets in batches with one to six months' worth of weekly transmittalsheets. Each batch would also have the royalty and advertising checkscomputed on the basis of the grossPage 7sales reported on the transmittal sheets. Mehta was obviouslyreconstructing the information post hoc, and he obviously did so badly.

Significantly, instead of hiding the money he was getting from SirSpeedy in some offshore account, or complex business transactions, Mehtasimply put them in a bank. Indeed, it was these very bank records thatled the IRS to suspect tax evasion.

To Sir Speedy for the calendar years 1994, 1995, and 1996, Mehtaunder-reported the total gross sales.6 However, the figures thatMehta provided to the government in his tax returns were notonly different from the figures for Sir Speedy — but higher.7

In 1997, Sir Speedy notified Mehta that it would audit his books forthe years 1994-1996. Mehta then informed the company that he wished toterminate the franchise agreement and in the negotiations that followedMehta plainly made serious, indeed, criminal, errors in judgment.Page 8

He hired Emmett Rushin ("Rushin"), a business consultant to negotiatewith Sir Speedy, although Mehta was plainly aware of what was happening.Mehta (and Rushin) provided Sir Speedy with yet a third set offigures for the gross sales of 1994, 1995, 1996 — different fromthe initial set, and different from that provided the IRS. In addition,Mehta submitted false copies of his federal and state income tax returnsto substantiate this set of figures.8

As part of the buyout, in 1997, Mehta paid $185,275 to Sir Speedy. Atthe same time, the IRS audited Mehta. Mehta and his wife hired newcounsel, a new accountant, and filed revised tax returns, providing afourth set of figures for the gross sales of the PrintingCenter, the highest yet.9 In fact, the Mehta's provided amendedreturns reporting higher income than the government's own bank statementsreflected.

In 2000, after having been notified that the government intended toproceed criminally, Mehta paid $686,194.88 inPage 9additional federal and state taxes and interest.10 It cost himthe majority of his savings, and more importantly, it was a concession tothe government that his income had been underreported. To be sure, Mehtadid not go back to Sir Speedy, as he should have, to inform them that thefigures he had given them three years earlier were wrong.11

II. DEPARTURE — ANALYTICAL FRAMEWORK12

A. Departures In General

Although it is popular to emphasize one goal of the Sentencing ReformAct, uniformity, in fact the drafters endorsed other sentencing goals,notably, proportionality.13 ThePage 10Sentencing Guidelines represented a compromise.14 To promoteuniformity, the Guidelines took into account many factors relating to theoffense, the offender's criminal history, and to a lesser degree, otheroffender characteristics. To promote proportionality, the Guidelines gavecourts the discretion to depart from the Guideline sentence whenadditional factors existed that made the case unusual.15 It was, theCommission presciently noted, "difficult to prescribe a single set ofguidelines that encompass the vast range of human conduct potentiallyrelevant to a sentencing decision."16 In the fifteen or so years theGuidelines have been in effect, that task has gotten no easier.Page 11

Departures, then, notwithstanding recent press to thecontrary, were not "violations" of the Guidelines. They were partand parcel of its goals and the engine of Guidelines' evolution. Indeed,recognizing that departures would necessarily lead to differences insentencing between individuals convicted of the same offense, Congressreferred to "unwarranted" disparities and not to disparity perse.17 Departures grounded in the atypical facts of theindividual case — emphatically, like the case before me —were "warranted."

B. "Good Works" Departures

1. Language of the Guidelines

While the statute directed the Commission to "assure that theguidelines . . . reflect the general inappropriateness" of certainoffender characteristics in sentencing, charitable works, were notmentioned. 28 U.S.C. § 994(e). U.S.S.G. § 5H1.11 was added in1991 (perhaps in response to departures on this ground and the felt needof judges around the country). 56 Fed. Reg. 22, 779 (1991). Charitableworks, however, were included in the "not ordinarily relevant" list.Nevertheless, its specificPage 12mention suggests that the Commission wanted courts to considerdeparture on this ground at least in exceptional cases. What kinds ofcases did the drafters mean to include under this provision? TheCommission does not say. It rarely does. The only way to glean what theymust have had in mind is to evaluate the Guidelines, its policystatements, commentary and structure.

The statute directs courts to consider the "nature and circumstances ofthe offense" as well as the "history and characteristics of thedefendant." 18 U.S.C. § 3553(a)(1). Addressing the former, theCommission adopted a modified "real offense" scheme, a system thatconsiders the actual conduct in which the defendant was engagedregardless of the charges for which he was convicted. U.S.S.G. §1A1.1(4)(a). At least one commentator suggested an even broaderinterpretation: At its most expansive, a real offense model might base punishment decisions on the following factors: the current conviction and attendant circumstances; nonconviction offenses committed contemporaneously with the conviction offense; nonconviction offenses committed after the conviction offense; prior conviction and nonconviction offenses; and perhaps a host of biographic components from good works to employment history.Elizabeth T. Lear, Is Conviction Irrelevant ?, 40 UCLA L.REV. 1179, 1193 (1993). (Emphasis supplied.)

While that formulation may be an overstatement, this much is clear: Itis not at all uncommon in sentencing to put the crimePage 13in the context of the defendant's life. For example, courtsenhance a sentence because the defendant's background reflects alife of crime and nothing else. See, e.g., U.S.S.G. § 4B1.3(reliance upon criminal activity for a livelihood), or U.S.S.G. §5H1.9 (same). With respect to extraordinary good works, the lens is theopposite — looking at the offense in the context of a lifetime ofservice.

2. Relationship between Good Works Departures andUnwarranted Disparities

Taking good works into account is entirely consistent with eliminating"unwarranted sentence disparities." 28 U.S.C. § 994(f). As Judge Noonannoted in United States v. Takai, 941 F.2d 738, 744 (9th Cir.1991) affirming a departure on these grounds, "if Mother Teresa wereaccused of illegally attempting to buy a green card for one of hersisters, it would be proper for a court to consider her saintly deeds inmitigation of her sentence." To which Judge Weinstein added that he seesfew defendants in Brooklyn as saintly as Mother Teresa, but "we doSee many human beings whose good deeds and character warrantrecognition in sentencing."18 Happily, the Boston area in this regardis no different from Brooklyn.Page 14

3. Disparity Between White Collar and Blue Collaroffender

In United States v. Thurston, Nos. 02-1966, 02-1967, 2004 WL203162 (1st Cir. Feb. 4, 2004), the Court expressed concern that theimplementation of the good works departure would offend one of the goalsof the "entire guidelines regime," namely, the goal of "minimiz(ing)discrepancies in the treatment of `white collar' and `blue collar'crimes." Id. at *25.19 Indeed, the court noted, theCommission was specifically concerned about the leniency of white collarsentencing. Thurston's position as a "prominent corporate executive,"Vice President of Damon Laboratories, a nationwide clinical laboratorytesting operation, counted against him because he was better situated tomake large financial contributions than "someone for whom the expenses ofday-to-day life are more pressing." Id. at *24.

As the First Circuit typically does, it cited a host of cases in whichthe departure showing was inadequate, and not one in which the case waslegitimately made. It may be enough for appellate courts to say over andover again, "No, this case isPage 15not it, nor that, nor that."20 As a trial judge with a humanbeing before me, I have to do more.

The Court cannot be saying that no white collar offender canever satisfy the strictures of this departure. Nor can it besaying that this departure is prohibited for any offender, no matter whatthe color of his collar. If it were taking eitherPage 16position the Court would be amending the Guidelines. While theCourt's language is broad, it obviously cannot go this far.

Indeed, in raising its concerns about blue collar and white collaroffenders, when it referred to those "for whom expenses of day-to-daylife are more pressing," than charitable contributions,Thurston, 2004 WL 203162 at *24, I can only assume that theCourt had in mind the kinds of activities that a blue collar worker wouldengage in to qualify for this departure. Curiously, however, the Courthas never affirmed a departure on this ground or on any related groundeven for the blue collar worker. For example, when blue collar offenders,lacking both time and resources, devote their time to their families,this Court also shuts the door to consideration of those departures, byapplying a standard characterized by the Court as "something akin toirreplaceability" in Thurston, 2004 WL 203162 at *24 (referringto the First Circuit's holding in United States v. Pereira,272 F.3d 76, 82-83 (1st Cir 2001)).

Lacking affirmative guidance from either the Commission or the Court, Iwill look to the purposes of the Guidelines, other decisional law andrelevant secondary material, and parse the facts in the cases in whichthe departure has been rejected.Page 17

a. More than "Writing Checks"

Significantly, even after the passage of the Sarbanes-Oxley Act of2002,21 which was intended to remedy the supposedly lenientsentencing of white collar offenders, the Department of Justice sought toamend the good works Guideline. See October 1, 2002, JusticeDepartment Letter to Sentencing Commission Concerning the Implementationof Sarbanes-Oxley, 15 Fed.Sent.R. 326, (June, 2003). It proposed: Military, civic, charitable, or public service; employment-related contributions; and similar prior good works are not [eliminate "ordinarily"] relevant in determining whether a sentence should be outside the applicable guideline range, except where the good works clearly demonstrate a lifelong, selfless devotion to the public weal at the expense of personal benefit that outweighs the need for full punishment and deterrence of the defendant's crime. Financial or material donations are not sufficient to make such a demonstration, and a sentence outside the applicable guideline range should never be imposed on the basis of good works that are characteristic of the defendant's socio-economic status (a prohibited ground for departure under § 5H1.10).(Italics supplied.)

To be sure, the government's proposal suggests the same restrictionsthat the First Circuit underscored in Thurston, 2004 WL 203162at *24. This departure should not be a "get out ofPage 18jail" card for the affluent offender. See United States v.McHan, 920 F.2d 244, 248 (4th Cir., 1990). Rather the focus shouldbe on the defendant's activities, understood in the light of his careerand resources, particularly those that go beyond the kind of "impersonalwriting of checks" that characterized many wealthy individuals. SeeUnited States v. Serafini, 233 F.3d 758, 776 (3d Cir. 2000).

Mehta's acts, his "hands-on" relationship to his community, the widerBoston area, family and friends, in the context of this offense, fitswell within these concerns.

b. The Nature of the Offense

The court in Thurston was particularly concerned about thescope of Thurston's offense and his position in his company. He was ahigh official in the company, Vice President and then Senior VicePresident of a company with a nationwide market. The offense involvednearly three million dollars in Medicare fraud, an important program. TheCourt noted that "Thurston's executive position at Damon, which gave himthe resources to undertake many of his charitable works, also enabled himto perform the crime . . ." Thurston, 2004 WL 203162 at*25, facts which undercut his claim for an "exceptional" good worksdeparture.

Mehta was the solo operator of a photocopy business located in Needham,Massachusetts, under franchise with Sir Speedy. The offense did notinvolve amounts even close to those in Thurston. Moreover, asdescribed below, Mehta, notwithstanding the fraud,Page 19had very modest resources. His charitable works were extraordinaryin the light of his means, by any measure.

c. In the Context of His Entire Life

In addition, other courts have considered not only the defendant'scharitable efforts and work history, but have also put the offense in thecontext of the defendant's entire life. In United States v.Somerstein, 20 F. Supp.2d 454, 463 (E.D.N.Y. 1998), for example, theCourt considered the defendant's good works in the context of herexperiences as a child victim of the Holocaust.

Likewise, this Court considered Mehta's background — as apenniless refugee from the Partition of India, whose family and resourceswere decimated.

d. Relationship to the Goals of Sentencing

Putting the defendant's offense in the context of an otherwiseextraordinarily generous life also bears on 18 U.S.C. § 3553(a)(2)'sgoals of "deterrence," protecting the public from future crime, andproviding the defendant with "correctional treatment in the mosteffective manner."

An individual, like Mehta, whose entire life reflects charitablepurposes, shamed and humiliated before his community, forced to paysubstantial restitution and tax penalties, is one who is not likely tore-offend, and put those good works at risk.

C. Application to MehtaPage 20

Mehta left India for the United States and sought to bring with himJainism, the religion of his family. Jainism is an ancient religion withextraordinarily strict rules that made it difficult to survive in theUnited States. Mehta took it upon himself to nurture the religion andreplicate it here, to create the kind of Jain religious community thatexisted in India. His relationship to that community was surely unique— not just as a financial contributor but as a moving force, asdramatized by the numbers of people who wrote, or testified, or simplyattended the sentencing hearing and returned day after day. Manydescribed their loss and the loss to their community should Mehta beimprisoned.

As I noted on the record, in my time on the bench, I have never quiteseen this kind of outpouring. On reflection, I can add, withoutequivocation, that I had never seen such a presentation at a sentencingproceeding.22

1. The Context: The Partition of India

Mehta and his family came to the United States after the bloodyPartition of India. He was born in Karachi, then part of India, prior tothe Partition. His non-Muslim family had aPage 21business, started by his grandfather. In the religious furyunleashed by the Partition, his family lost its business; several ofMehta's uncles and aunts were killed. He and his family were forced toflee to Bombay, India.

At age 25 he emigrated to the United States. After completing hiseducation, he returned to India where his marriage to Dhira (Kothari) wasarranged by their parents. Following their wedding, the Mehta's returnedto the United States, and purchased a modest home in which they havelived ever since.

2. The Jain Religion

Mehta helped found the Jain Center of Greater Boston (JCGB) with 24other families. Jainism is an ancient Indian religion, that stressesnon-violence, a multiplicity of viewpoints, compassion and forgiveness.Since the rules of Jainism are strict, it is a small group — 2.5million in India, less than 90,000 in North America.

Jain parents, uprooted from their communities in India, wanted topractice their religion, and raise their children within it. Mehta'sefforts have been critical to that enterprise. Mehta served as VicePresident of the local Jain center from 1990 to 1992, and then Presidentfrom 1992-94. Under his tutelage, the Jain community grew to 350 to 400families.

Jain sacred figures are prohibited from traveling by modern means, suchas cars or planes. They walk in bare feet, and eat a rare and specializeddiet. Mehta sent and paid for scholars toPage 22study with the sacred figures, and then come to the United Statesand teach in his community. He offered them a room in his home andinvited sometimes as many as 150 community members to meet with them.(Testimony of Sinjah Shah; Defendant's Sentencing Memorandum [document #95], Exhibit A-42, 106). He paid for their airfare, but more importantly,he acted as their host, and their facilitator, in this country. His goal,as one letter described, was to "provide [the] community the privilege ofunderstanding our religion and preserve our culture and heritage." Hevolunteered to translate Jain prayers into Hindi, Gujarati and English.He printed and distributed books to the Jain Centers in Boston andRochester and to Sunday schools without charge. He created a Jaindirectory of all members of the community, paying for a considerableamount of it himself, as well as writing the text.23 He printed thesacred texts for the Jain Center of Greater Detroit, providing theequivalent of the Jain bible to individuals in that community who neverhad it. (See Defendant's Sentencing Memorandum [document # 95],Exhibit A-25; B-1, 2.)Page 23

3. For the Wider Indian Community

He took it upon himself to act as a mentor to a number of firstgeneration Indians in America. He provided personal support to members ofhis community and beyond, when family members were sick or passed away,helped others to start a business, contributed to medications for otherswho could not afford them, even helped with college tuition24 ormortgage payments.

And he contributed to the wider non-Jain Indian community —creating the grandparents club, a support organization for elderlyparents — no matter what their religious identification— who had moved to this country to live the rest of their liveswith their children and their grandchildren, creating tapes of songs forthe elderly, translating books into their native language, and thentraining one of the members of the grandparents club to do the same.(See testimony of Anil Rabarr, Defendant's SentencingMemorandum [document # 95], Exhibit A-10, 11, 77, 108 and 111.)

One witness, clearly overcome with emotion, described Mehta's help whenhis father was dying of cancer. Mehta would drop by the house almostevery evening, even after a long day of work, to spend time with him, torun errands. When his fatherPage 24passed away, Mehta took care of the funeral arrangements and prayerservices. Letter after letter described similar stories. (See,e.g., Defendant's Sentencing Memorandum [document # 95], Exhibit A-38,49, 78, 84, 92; B-3, 4.)

4. The 2001 Earthquake in Bhuj

After the 2001 earthquake in Bhuj on January 26, 2001, some 30,000people died. The next day, Mehta went to work, starting a collection forthe survivors, traveling to the homes of contributors, picking up andsorting the supplies until his garage was overflowing (and he had toremove his car), and then shipping them. (Testimony of Sunjay Shaw;Defendant's Sentencing Memorandum [document # 95], Exhibit C-6.)25

5. Contribution to His Native Country

Mehta regularly traveled to India and volunteered in its hospitals andfor societies that care for children and the elderly. In addition, he hasdonated money to numerous hospitals in India, participated in a clothingdrive, made contributions for an x-ray unit, and contributed to a waterpurification unit. (See Defendant's Sentencing Memorandum[document # 95], Exhibit C-1, 2, 3, 8.)

6. Other Contributions

Mehta's work went even beyond that for his religious community or hisnative country. He organized Jain members toPage 25volunteer at the Pine Street Inn and other organizations to cookmeals and serve them to homeless people. See Defendant'sSentencing Memorandum [document # 95], Exhibit A-89. On other occasionshe helped complete strangers, sending money to a woman in New York whocould not pay for prescription drugs (Defendant's Sentencing Memorandum[document # 95], Exhibit A-22), or helping another get a job (Defendant'sSentencing Memorandum [document # 95], Exhibit A-36).26

7. A Special Case: Tiffany Griffin

I heard particularly moving testimony from a college friend of Mehta'sdaughter. Tiffany Griffin described her difficulty as an African Americanstudent in a predominantly white college, Boston College. Coming fromSpringfield, Massachusetts, she knew little about the school she was toattend. She had an extremely hard time adjusting, and believed she hadnowhere to turn. She was the first person in her family to go to college.Her mother, a single parent, had difficulty understanding what she wasgoing through. Ms. Griffin met Mehta, through his daughter, Jill. TheMehta family, the defendant in particular, essentially adopted her. Hetold her "my family will become your family" and it did. She stayed fordinner, over the weekends, did laundry at their home. They gave her foodto take back to Boston College and let her store her things so she couldavoid paying for storage, etc.Page 26Moved to tears on the stand, Ms. Griffin reported that she andMehta had a special connection, that she "made it through because of Mr.Mehta." She believed that he was able to relate to her because he hadbeen poor too, coming to this country with $16 in his pocket. He acceptedher in a way she could accept, not with "hand outs," but "respect andlove."27

8. Impact

It is worth noting a common theme in the letters and testimony —the impact of Mehta's leaving the community even for a short time. Onecomment was typical: If he was not there, I may be lost. . . . He is the one person that any time you need help, you can count on him. Irrespective of what kind of problems he may have, but for the community he's always up front. D. Government's Position

Citing no cases, the government argued that I was obliged to discountMehta's activities in connection with promoting and supporting thereligious center/temple that he helped to found. "Efforts undertaken topromote a particular religion do not constitute `charity' within thegeneral meaning of the term," it insisted, because they risk runningafoul of the Guideline'sPage 27

prohibition against considering religion under U.S.S.G. §5H1.10.28 But of course, the government adds, charitable activitiesthat are supported or sponsored by a church or temple "count." Theenterprise of the court then is to critically evaluate each activity todetermine its "scope and purpose."

I refused to do anything of the kind. What the government suggests I do— parsing through charitable works to determine what supports areligion and what merely supports a community, its people, its dreams— seems to walk very close to the very line that § 5H1.10prohibits. For most faiths — and for this one in particular —religion-supporting acts and the community supporting acts areindistinguishable. To support this minority religion, to enable it totake root in alien soil, required work on a number of levels, fromtranslating the sacred texts, to teaching children, to building acommunity. I would not discount any of it.29

The government focused also on Mehta's financial contributions, ineffect, reducing his work to mere monetary contributions, and thensuggesting that there was nothing extraordinary about the amounts.Indeed, the government impliedPage 28that all Mehta was doing was stealing from Sir Speedy so that hecould make these contributions. First, as I have noted, most of Mehta'swork was not financial. While the government indicated that the lettersspoke in general terms, the testimony I heard and the letters I read wereextraordinarily concrete — addressing time and work, painting thewalls of the temple, driving from house to house to find clothes for thedisaster victims and sort them, and on and on, far beyond writing checks.

Second, the government takes figures out of context in suggesting thatMehta was a wealthy man, who was milking Sir Speedy so he could makethese contributions. Significantly, Mehta was not only making financialcontributions during the years that he was working with Sir Speedy andhis business was growing. He continued to do so when he payed Sir Speedyto get out of his agreement with them in 1997 and again in 2000 when hepaid $686,194.88 to the IRS. The latter amount is particularlysignificant: His business had declined substantially. These paymentswiped out his savings, yet he continued both the same level of serviceand work, and the same level of contributions.30 In any event, thePresentence report, noting his modest home, cars, and effects, reflectsat most, a moderate net worth.

In short, Mehta does not fit the paradigm that the First Circuitroutinely discounts — the man or woman with the lavishPage 29lifestyle, who can well afford to endow the local museum orphilharmonic hall. Mehta ran a copy business, and shared his modestincome, and a considerable amount of his time, with the community aroundhim.

III. GUIDELINE CALCULATIONS

A. Calculation Without Departure

Tax Evasion

Base Offense Level: (Based on a tax loss of $285,424) 16 (U.S.S.G. § 2T1.1 and 2T4.1.) Mail/Wire Fraud Base Offense Level: 6 (U.S.S.G. § 2 F1.1(a)) Increase for Loss of More than $200,000 and less than $350,001: 8 (U.S.S.G. § 2 F1.1(b)(1)(I)) Increase for More than minimal planning: 2 (U.S.S.G. § 2 F1.1(b)(2)(A)) TOTAL = 16

Grouping rules: The parties have stipulated pursuant toU.S.S.G. § 3D1.2, that the tax and mail fraud counts should not begrouped. Per U.S.S.G. § 3D1.4, the number of units equals 2, andtherefore the total offense level is increased by 2.

18

Acceptance of Responsibility:

Minus 3Page 30

Final Offense level: 15.

Guideline range of 18-24 months, and fine range of $4,000-40,000.

B. Departure and its Extent

Ordinarily, I would have departed to a zone C, a level 12 or ll, andimpose a split sentence, including community confinement. Monahan v.Winn, 276 F. Supp.2d 196 (D. Mass. 2003), Iacoboni v. UnitedStates, 251 F. Supp.2d 1015 (D. Mass. 2003). But such a sentencemakes no sense under the circumstances. Community confinement is helpfulfor those who need structure, who have no jobs or resources. InUnited States v. Rodriguez, 724 F. Supp. 1118 (S.D.N.Y. 1989)for example, the Court said that "the imposition of . . . jail sentencewould serve no end, but ritualistic punishment . . ." I made a similarfinding in the instant case.

Thus, I departed to level 10 and sentenced Mehta to probation, asdescribed below.

C. Restitution

The government sought $320,193 in restitution. The government projectedseven years of increased sales, accepting Sir Speedy's projection thatMehta's income would have increased substantially between 1998 and 2004,as it had between 1994 and 1996, discounted to 1997 dollars.Page 31

There were several problems with the approach. Had Sir Speedy suedMehta civilly, it would have been entitled to the benefit of the bargainbetween the parties. Restitution, however, serves a different function,namely to compensate the victim for actual losses as well as to providepunishment. After 1997, Mehta's business was not as successful as it hadbeen. The economy faltered. While Sir Speedy projected that his incomewould have gone up by 10%, as they tried to argue in the 1997negotiations, in fact Mehta's income declined by half.31 In addition,Mehta argued that several aspects of the government's computations werespeculative — the nature of the discount rate, the continuation ofa rebate program that suggested Mehta's payments would have been less,etc. Moreover, if the company had proposed a figure based on thesecomputations in 1997 (the 10% growth rate and 5.6% discount rate), Mehtacould well have decided not to proceed with the buyout and continue thefranchise agreement. If Sir Speedy wants "benefit of the bargain"compensation, it should sue Mehta civilly, and not use the government asa collection agency.

To take the company's figures would be tantamount to the following:Assuming someone stole a statue that was worth aPage 32million dollars at the time of the theft, but only $1.50 by thetime of sentencing. The million dollar figure would be part of theoffense conduct computation, the intended loss, as it was here. But theowner would only be entitled to the present value of the item.

Sir Speedy is plainly entitled to the back royalties and advertisingfees, using the corrected, pre-1997 sales figures of $214,317, (includingboth royalty and advertising fees). But for future loss, given thevagaries of the market between 1998 and 2004, and given the legalframework, I conclude that the following restitution figure isappropriate: To the $214,317 I will add $240,875 of royalty losses basedon projected future income derived from actual sales (from 1998-2004)without a discount rate adjustment. I will subtract the amount Mehta paidto Sir Speedy ($185,275) which yields restitution of $269,827.45.

This figure seems particularly appropriate for another reason. Inaddition to restitution, it is likely that Mehta will be obliged to payfurther criminal tax penalties, which could be as much as 75% of theunpaid tax for the years in question, as well as interest on the fraudpenalty.

IV. CONCLUSION

Mehta was sentenced to three years' probation, six months of which wasin home detention with electronic monitoring, restitution of Two HundredSixty-Nine Thousand, Eight HundredPage 33Twenty-Seven And 45/100 ($269,827.45) Dollars, and a fine ofTwenty-Nine Thousand And 00/100 ($29,000.00) Dollars.

In order to make sure that the parties' appellate rights are notcompromised, I will not sign the judgment in this matter until five daysafter this decision has been issued. If either party believes that thereference to the Thurston reasoning requires re-argument of anyissue, they may file an appropriate and timely motion under the Rulesbefore this Court.

SO ORDERED.

1. The defendant moved for a departure on a number of other groundswhich I rejected, namely extraordinary acceptance of responsibility,hardship to employees of his company should he be incarcerated and thecombination of all of the factors.

2. U.S.S.G. § 5H1.11 provides: Military, civic, charitable, or public service; employment-related contributions; and similar prior good works are not ordinarily relevant in determining whether a sentence should be outside the applicable guideline range.

3. I describe the courtroom in order to give the reader —including any reviewing court — the kind of data to which the FirstCircuit referred in United States v. Diaz-Villafane,874 F.2d 43, 49-50 (1st Cir. 1989)("District courts are in the front lines,sentencing flesh-and-blood defendants . . . Therefore, appellatereview must occur with full awareness of, and respect for, the trier'ssuperior `feel' for the case.") Unfortunately, I do not believe that mywords can do justice to the courtroom scene or the nature of thetestimony. Henceforth, I will videotape the proceedings. SeeJohn Marzulli, Judge Will Tape All His Sentencings, New YorkDaily News, Jan. 30, 2004, at 4.

4. The First Circuit suggested that whether a departure is"justified" by the facts of the case calls for "an evaluative judgment,not a mechanical exercise." United States v. Thurston, Nos.02-1966, 02-1967, 2004 WL 203162, at *55 (1st Cir. Feb. 4, 2004). As Ihave said previously, in an analogous setting: How does a court go about [the task of determining when `family ties and responsibilities' are so extraordinary as to warrant departure]? The enterprise is in part empirical. How does this human being compare to others the trial court has seen? But it necessarily involves more than simply counting noses. How atypical does he or she have to be — one in a million, five in a million, five percent of all defendants, etc.? This kind of line-drawing involves the exercise of normative judgments: What kind of punishment do human beings facing these situations deserve given the purposes of the SRA? Where ought the line between typical and atypical be? No bright line rule was announced by the Commission; none can be announced by a court. United States v. Lacarubba, 184 F. Supp.2d 89, 93 (D. Mass.2002).

5. I am applying here the approach spelled out by Hofer andAllenbaugh with specific examples, Paul J. Hofer & Mark H.Allenbaugh, The Reason Behind the Rules: Finding and Using thePhilosophy of the Federal Sentencing Guidelines, 40 Am. Crim.L.Rev.19, 74 (2003)(citing approvingly to my use of this approach inUnited States v. Leviner, 31 F. Supp.2d 23 (D. Mass.1998)).

6. To Sir Speedy, he reported: 1994 $242,151 1995 $266,970 1996 $303,395

7. To the IRS, he reported: 1994 $604,690 1995 $625,336 1996 $790,079

8. The third set of figures were: 1994 $350,774 1995 $346,245 1996 $429,895

9. The fourth set of figures were: 1994 $920,531 1995 $897,006 1996 $1,051,404

10. The stipulated tax loss was $285,424. Mehta paid $686,194.88with his amended return because of interest and state taxes.

11. The government also points to the fact that Mehta tried todefend himself in this case as indicating a lack of character. Thesuggestion is preposterous. Mehta had fully cooperated with the IRS inaddressing his delinquent taxes. But with respect to the serious criminalcharges that had been brought against him, he pressed what appeared to bereal defenses, defenses which the Constitution permits him to assert. Wewill have gone a long way to transform our Bill of Rights into somethingentirely unrecognizable if defending a criminal action, when one'sliberty is on the line, affirmatively counts against the defendant atsentencing.

12. Sentencing Guideline Book to be used in evaluating Mehta'ssentence is the 1997 Book that was in effect at the time the offenseswere committed. This case does not involve the changes implicated by theso-called Protect Act (Prosecutorial Remedies and Tools Against theExploitation of Children Today Act of 2003, Pub.L. No. 108-21, 117 Stat.650 (effective April 30, 2003)).

13. The Sentencing Reform Act refers to "certainty and fairness" insentencing. 28 U.S.C. § 991(b)(1). Fair sentencing policies must notonly avoid "unwarranted disparities" among defendants similarly situatedwith respect to the offense, but also "maintain[] sufficient flexibilityto permit individualized sentences when warranted by mitigating oraggravating factors not taken into account in the establishment ofgeneral sentencing practices." 28 U.S.C. § 991(b)(1)(B). In addition,Congress ordered the Commission to establish policies and practices thatmet the traditional purposes of sentencing (retribution, deterrence,incapacitation, and rehabilitation) and to "reflect, to the extentpracticable, advancement in knowledge of human behavior as it relates tothe criminal justice process." 28 U.S.C. § 991(b)(1)(C). Finally, theGuidelines' Introduction notes that there are three objectives, honestyin sentencing, uniformity, and proportionality. See U.S.S.G.§ 1A.3. Significantly, none of these provisions have been altered in recentamendments to the Sentencing Reform Act.

14. The first Commission, for example, explicitly described thedifficulties of meeting both goals: Too much uniformity would create asystem easy to administer but would threaten proportionality inindividual cases, while a system that accounted for every conceivablecharacteristic would destroy uniformity, not to mention being unworkable.U.S.S.G. § 1A.4(b); 1A.3. See also Stephen Breyer, TheFederal Sentencing Guidelines and the Key Compromises Upon Which TeyRest, 17 Hofstra L.Rev. 1, 13 (1988).

15. The legislative history of the Sentencing Reform Act suggeststhat the Congress intended that judges retain discretion to imposeindividualized sentences in special cases. The Senate Judiciary Committeeinstructed judges to examine the characteristics of each specificoffender thoughtfully and comprehensively. S.Rep. No. 98-225, at 52 (Aug.4, 1983), reprinted in 1984 U.S.C.C.A.N. 3182, 3235 (hereinafter "SenateJudiciary Committee Report"). "The purpose of the sentencing guidelinesis to provide a structure for evaluating the fairness and appropriatenessof the sentence for an individual offender, not to eliminate thethoughtful imposition of individualized sentences." Id.

16. U.S.S.G. Ch. 1, Pt. A, 4(b).

17. 18 U.S.C. § 3553(a)(6)(1988), 28 U.S.C. § 991(b)(1)(B).As Professor Freed notes: "Disparity is a surface phenomenon. It raisesthe question: why are two seemingly similar cases sentenced differently?When the answer is persuasive in terms of the nature and circumstances ofthe offense, the history and characteristics of the offender, and thepurposes of sentencing, the apparent disparity is in fact warranted. Whenthe disparity cannot be satisfactorily accounted for, it is unwarranted."Daniel J. Freed, Federal Sentencing in the Wake of the Guidelines:Unacceptable Limits on the Discretion of Sentencers, 101 Yale L.J.1681, 1705 (1992).

18. Jack B. Weinstein, A Trial Judge's Reflections on Departuresfrom the Federal Sentencing Guidelines, 5 Fed.Sent.R. 6, *5(1992).

19. To be sure, the parties did not have the benefit of the revisedThurston decision at the time of sentencing. I typicallyexplain my findings orally at sentencing, but follow them up with a morefull statement of my reasons. In order to make sure that the parties' appellate rights are notcompromised, I will not sign the judgment in this case until five daysafter the decision has been issued. If either party believes that thereference to the Thurston reasoning requires re-argument of anyissue, they may file an appropriate and timely motion under the Rulesbefore this Court.

20. In an analogous area, defining what "extraordinaryrehabilitation" means, I noted: Perhaps because of the difficulty of the task, the [First Circuit] has mainly defined extraordinary rehabilitation by noting what it is not. . . . [C]ase after case announces: No, that's not it, nor that, nor that . . . To be sure, it may be inevitable that appellate courts approach Guideline interpretation this way — defining when the standard is not met. After all, the First Circuit sees only a small percentage of the cases that the district court reviews. The First Circuit reviews only those cases in which a district court has decided to depart, a fraction of the total number of cases, and then only those that the government chooses to appeal, a smaller number still. Moreover, the sampling of cases that the Court of Appeals receives are typically those that district courts have deemed "extraordinary." As a result, the First Circuit is not in a position to see the true "heartland" of cases that come through the courts. An individual case that stands out from the class of cases before a district court might seem humdrum when compared to the more limited and exclusive corpus of "extraordinary" cases that are actually appealed. As I am a district court judge, I have to seek greater precision. If this departure is to have any meaning — and I have to assume it does — I have to identify when extraordinary rehabilitation is present. It is obviously not enough to say that wherever the district court places the line between ordinary and extraordinary rehabilitation efforts, it has to make certain that such departures are, as the First Circuit colorfully notes, "hen's teeth rare. ". . . Nor is it enough to intone these words "extraordinary rehabilitation" over and over again, when what we really mean is: Never.United States v. Perella, 273 F. Supp.2d 162, 165 (D.Mass. 2003) (case citations omitted).

21. Pub.L. No. 107-204, 116 Stat. 745 (2002) (codified in scatteredsections of 11 U.S.C. 15 U.S.C. 18 U.S.C. and 28 U.S.C.) [hereinafterSarbanes-Oxley].

22. In my oral recitation, I wanted to make certain that the recordreflected not simply what I had heard, but also what I had seen. Ireported the Mr. Dinesh Dalal testified with tears in his eyes when hespoke of Mehta's contributions to this community, as did Tiffany Griffin,an African American college student and a friend of Mehta's daughter (asdescribed below). Other witnesses, while not overtly emotional, spokecredibly and passionately. Finally, as Mehta spoke during his allocution,members of the audience likewise reacted emotionally — head inhands, weeping.

23. I heard testimony of the significance of this Directory. Somestatements given were that it nurtured "a sense of belonging," "findcontacts with common values," "it supports each other when we travel","useful information like what are the best universities of the country,"Mehta edited it himself, spending ten hours per week for five months. Hesaw to it that they were delivered all over the country. As one witness noted, "Mukund is a very effective leader" a "tirelessindividual" "what distinguishes Mukund from other people are hiswillingness and dedication to help out non profit organizations, bygiving the most important give we all have, which is time." (Testimony ofNishit Vora; Dinesh Dalal.)

24. Mehta worked with other young people sponsoring one forcitizenship, paying tuition for his nephew and his sister. (SeeDefendant's Sentencing Memorandum [document # 95], Tab C.)

25. Significantly, these contributions were made after Mehta wasobliged to pay substantial amounts to the IRS.

26. Even customers wrote and testified on his behalf. Seetestimony of James Noonan.

27. Ms. Griffin testified that she grew up in a single parenthousehold, without a father, and added, "I didn't have the support offamily and laughing was difficult for me . . . If you don't grow upwith it, and you don't let down and laugh, and you know, say, let's goget ice cream, and all the things I See on t.v. . . ." TheMehta family, and Mr. Mehta in particular, filled that void.

28. § 5H1.10 Race, Sex, National Origin, Creed, Religion, andSocio-Economic Status (Policy Statement) provides "[t]hese factors arenot relevant in the determination of a sentence."

29. In any event, no such line exists in the case law —between religious and other activities — nor should it. SeeUnited States v. Nava-Sotelo, 232 F. Supp.2d 1269, 1286 (D.N.M.2002)(court granted a six level departure based on a number of factors,including religious work).

30. See chart at Defendant's Sentencing Memorandum[document # 95], Exhibit Tab C for a list of contributions anddates.

31. Sir Speedy projected that Mehta's income would have gone up by10% between 1998 and 2004, based on the growth rate between 1994 and1997, when Mehta's business was booming. The government is not pressing a10% growth rate and the 5.6% discount rate. Instead, the government hasagreed to use the 5% growth rate and the 8.5% discount rate that Mehtaurged. I rejected this approach. My restitution figure, as describedbelow, is based on the actual sales figure and no discount rate.

Back to top