There are two disputed issues that the Court must resolve inorder to determine the Guideline range for this Defendant underthe United States Sentencing Guidelines ("U.S.S.G." or the"Guidelines"). This memorandum provides the Court's writtenexplanation for its rulings on both of these disputed issues.
I. SPECIFIC OFFENSE CHARACTERISTICS
On October 18, 2004, Defendant Charles Stergios appeared beforethe Court and pled guilty to a three count information charginghim with wire fraud (18 U.S.C. § 1343), mail fraud(18 U.S.C. § 1341) and bank fraud (18 U.S.C. § 1344). Defendant's guilty pleawas made pursuant to a plea agreement (Docket # 3). Under theterms of that plea agreement, the Government and the Defendantagreed to take certain positions with respect to the Guidelinecalculations for his offense. In relevant part, both sidesstipulated that "pursuant to U.S.S.G. § 2B1.1(b)(1)(G),defendant's base offense level is increased by 12 levels becausethe loss he intended to inflict on his victims was more than$200,000" and "pursuant to U.S.S.G. § 2B1.1(b)(2)(B), defendant'sbase offense level is increased by 4 levels because his offenseinvolved more than 50 victims." (Plea Agreement (Docket # 3) at3.) In the course of his plea colloquy, the Defendant admitted the facts necessary to allow this Court to make the findingsnecessary to support these enhancements.
Notably, the plea agreement also explicitly states, "Theparties expressly agree and understand that the Court is notbound by the [Guideline calculation] stipulations, and should theCourt reject any of the recommendations of the parties, thedefendant will not thereby be permitted to withdraw his plea ofguilty." (Plea Agreement (Docket # 3) at 4.)
In fact, the presentence report ("PSR") found Stergios waseligible for a 14 level enhancement pursuant to U.S.S.G. §2B1.1(b)(1)(H) because the losses resulting from his fraudtotaled over $421,000.00. In addition, the PSR identified 321victims of the fraud allowing for a six level enhancementpursuant to U.S.S.G. § 2B1.1(b)(2)(C). Defendant now argues thatthat it would be unfair for the Court to adopt these largerenhancements recommended in the PSR since they exceed theenhancements that are listed in the plea agreement.Alternatively, Defendant argues that application of theenhancements listed in the PSR would be a violation of the ExPost Facto Clause.
In support of this latter argument, Defendant essentiallyasserts that at the time of his guilty plea he was relying onthis Court's interpretation of Blakely v. Washington,124 S. Ct. 2531 (2004). Under this interpretation, Defendant believedhis Guideline range would be determined by only those facts towhich he admitted during his plea colloquy. Thus, he mistakenlybelieved that this Court would not be able to increase hisGuideline range by engaging in judicial fact-finding. However,since that time, the Supreme Court has issued its decision inUnited States v. Booker, 125 S. Ct.738 (2005), and therebyclarified how the principles it announced in Blakely apply tothe Guidelines. Under Booker, it is clear that this Court canand should engage in judicial fact finding in order to determine each defendant's Guideline range. However, followingBooker, this sentencing range is not binding on the Court.
This Court is clearly bound to follow the Supreme Court'sdecision in Booker. In contrast, the terms of the Defendant'splea agreement clearly and explicitly do not bind the Court. Inan abundance of caution, the Court has allowed the Defendant anopportunity to move to withdraw his plea in light of theintervening Booker decision. However, Defendant did not file amotion to withdraw. Under these circumstances, the Court does notbelieve that fairness or any other legal principle dictate thatit must accept the sentencing recommendations laid out in theplea agreement and thereby disregard the Booker decision. Thus,finding by a preponderance of the evidence that Defendant's fraudinvolved a total of 321 victims and over $421,000.00 in losses,the Court will apply the 6 level enhancement required underU.S.S.G. § 2B1.1(b)(2)(C) and the 14 level enhancement requiredin U.S.S.G. § 2B1.1(b)(1)(H).
II. OBSTRUCTION OF JUSTICE & ACCEPTANCE OF RESPONSIBILITY
At the presentence conference, the Court notified both sidesthat it was contemplating the application of an obstruction ofjustice enhancement pursuant to U.S.S.G. § 3C1.1. In addition,the Court informed the parties that it was concerned thatDefendant did not qualify for an acceptance of responsibilityadjustment pursuant to U.S.S.G. § 3E1.1. Both the Government andthe Defendant filed sentencing memoranda that addressed theseissues.
Having reviewed these memoranda as well as the PSR, the Courtbelieves the applicability of the obstruction of justiceenhancement is a very close call. Nonetheless, the Courtultimately finds that Defendant's failure to disclose assets doesnot fall squarely within the category of "providing materially false information toa probation officer with respect to a presentence or otherinvestigation for the court." U.S.S.G. § 3C1.1 cmt. 4(h) & 6.Rather, Defendant's conduct can be more readily described as"providing incomplete or misleading information, not amounting toa material falsehood, in respect to a presentence investigation."U.S.S.G. § 3C1.1 cmt. 5(c). For this reason, the Court will notapply the obstruction of justice enhancement.
The only remaining question is whether the Defendant isentitled to a proposed three point reduction for acceptance ofresponsibility. The Defendant opened the door to this reductionby pleading guilty to an information on October 18, 2004. As theFirst Circuit has recently explained, "Although the entry of aguilty plea prior to trial is impressive evidence of acceptanceof responsibility, it does not automatically entitle a defendantto the credit." United States v. McLaughlin, 378 F.3d 35, 39(1st Cir. 2004) (citations omitted). Rather, it is Defendant'sburden to demonstrate he is entitled to the reduction because ofhis "candor and authentic remorse." Id. (quoting United Statesv. Royer, 895 F.2d 28, 30 (1st Cir. 1990). In this case,Defendant cannot meet this burden in light of his conduct duringthe presentence investigation.
The Court's primary basis for reaching this conclusion relatesto Defendant's failure to appreciate his restitution obligationand preserve available assets in order to make restitution aswell as Defendant's lack of candor with respect to his assetsduring the presentence investigation. The commentary to U.S.S.G.§ 3E1.1 specifically instructs the Court to consider "voluntarypayment of restitution prior to adjudication of guilt" indetermining whether a defendant qualifies for a reduction foracceptance of responsibility. U.S.S.G. § 3E1.1 cmt. 1(c). Todate, Defendant has not made voluntary payments of restitution to any of his 321 victims. In fact, hehas attempted to conceal assets from the Court during thepresentence investigation and has overseen the dissipation ofassets that could have been used for restitution. (See PSR ¶¶8, 46 & 47.) In light of these actions, the Court cannot findthat the Defendant has exhibited authentic remorse for hisactions.1
In addition, rather than expressing remorse and takingresponsibility for his conduct during the presentenceinvestigation, Defendant attempted to blame others for hisconduct. (See PSR ¶ 9.) When combined with Defendant's attemptsto conceal and dissipate his assets in order to avoid hisrestitution obligation, these actions provide ample evidence thatthe Defendant has not genuinely accepted responsibility for hisconduct that resulted in the charges in this case. Therefore, theCourt finds that Defendant has not met his burden of proving thathe is entitled to a three point reduction for acceptance ofresponsibility pursuant to U.S.S.G. § 3E1.1.
1. Other courts have indicated that failure to make voluntaryrestitution or otherwise preserve available assets in order tomake restitution can serve as a basis for denying a defendant anacceptance of responsibility adjustment. See, e.g., UnitedStates v. Whitman, 209 F.3d 619, 622 (6th Cir. 2000) (notingthat the district court was justified in considering defendant'sfailure to make any voluntary restitution prior to the sentencinghearing in deciding to deny an adjustment for acceptance ofresponsibility); United States v. Anderson, 68 F.3d 1050,1055-56 (8th Cir. 1995) (upholding the district court's decisionto apply obstruction of justice enhancement and deny defendant anacceptance of responsibility adjustment based on defendant'sfailure to provide complete financial in formation during thepresentence investigation); United States v. Merritt,988 F.2d 1298, 1302-05 (2d Cir. 1993) (discussing the district court'sdecision to deny defendant an acceptance of responsibilityadjustment despite his guilty plea because of evidence thatdefendant secreted assets that could have been used to makerestitution).