7th Circuit: 'Be careful what you ask for…'

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The Seventh Circuit held on May 5 that a defendant who had face-to-face contact with his victims can be given a "vulnerable victim" enhancement, pursuant to U.S.S.G. 3A1.1(b), even if he didn’t specifically target victims for their vulnerability.

The court also wrote in dicta that, if a defendant receives a resentencing pursuant to U.S. v. Booker, he can receive a higher sentence, without any presumption of vindictiveness attaching to the higher sentence.

Jeffrey L. Goldberg is a certified financial planner, accountant, and lawyer in Illinois, who defrauded 130 people of a total of $8 million. After his conviction in federal court, the judge received more than 20 letters from victims of Goldberg’s scheme, and at the sentencing hearing, read into the record four of them, including one from Goldberg’s own aunt, a woman in her 80s.

Goldberg had stolen more than $100,000 from her and her husband — a majority of their life savings. The judge thought the four letters showed that some of Goldberg’s victims had been vulnerable victims, and imposed a two-level enhancement.

Goldberg appealed, arguing that, absent evidence that he targeted vulnerable persons, the enhancement is impermissible. In the alternative, Goldberg sought a limited remand pursuant to U.S. v. Paladino, 401 F.3d 471 (7th Cir. 2005). In a decision by Judge Richard A. Posner, the Seventh Circuit held that the evidence supported the enhancement, but granted the limited remand.

The court acknowledged that there is tension in its cases about whether a defendant must target victims for their vulnerability to receive a sec. 3A1.1(b) enhancement.

In U.S. v. Parolin, 239 F.3d 922, 927 n.2 (7th Cir. 2001), U.S. v. Paneras, 222 F.3d 406, 413 (7th Cir. 2000), and U.S. v. Snyder, 189 F.3d 640, 649 (7th Cir. 1999), the court held that an enhancement could be given, even if the defendant did not target victims for their vulnerability.

But in U.S. v. Sims, 329 F.3d 937, 944 (7th Cir. 2003), U.S. v. Rumsavich, 313 F.3d 407, 411 (7th Cir. 2002), U.S. v. Grimes, 173 F.3d 634, 637-38 (7th Cir. 1999), and U.S. v. Almaguer, 146 F.3d 474, 478 (7th Cir. 1998), the court held or suggested that the defendant must target the victim’s vulnerability.

Resolving the conflict, the court concluded, "The tension can be dissolved by noting the difference between a nonindividualized fraudulent solicitation communicated indiscriminately by mail or television or other media to a large audience of potential victims, and a personalized solicitation in which the defendant deals face to face with his victims. In the first type of case, the presence of vulnerable victims is accidental and unavoidable and the defendant makes no effort to exploit anyone’s vulnerability.

‘[The current] application note says that the enhancement "would not apply in a case in which the defendant sold fraudulent securities by mail to the general public and one of the victims happened to be senile." U.S.S.G. § 3A1.1, cmt. n. 2. The missing element in that case is that the defendant had no reason to know such a victim existed.’ United States v. Zats, 298 F.3d 182, 189 (3d Cir. 2002). In the second type of case the defendant could easily avoid dealing with vulnerable victims and, having decided not to forbear, should not be allowed to escape responsibility for having taken advantage of people unable to protect themselves."

The court found Goldberg fell into the latter category, noting, "Knowledge that some of the people he was dealing with were especially vulnerable to financial fraud did not cause Goldberg to lay off them. He knew he was exploiting the vulnerable, along with others who were not vulnerable. He intended the inevitable consequences of his acts (cite omitted)."

Although the court found the evidence supported the enhancement, the court nevertheless issued a limited Paladino remand, because the judge based the enhancement on his own findings, rather than the defendant’s admissions or a jury finding.

Before doing so, the court issued attorneys and defendants a warning to be careful what you ask for, for they just might get it.

The court observed, "Goldberg may be better off with that relief than with his preferred relief, which is an order resentencing him. Any resentencing would be conducted under the new, post-Booker regime, in which the guidelines are merely advisory, and so he’d be exposed to the risk of a higher sentence."

The court added, "We were surprised to learn that Goldberg’s lawyer and … other members of the defense bar as well believe that a sentence meted out in the pre-Booker era of mandatory guidelines is the ceiling in the event of a resentencing unless there are changed factual circumstances, such as additional criminal conduct by the defendant," calling the belief, "a misunderstanding dangerous to criminal defendants."

The court acknowledged that, when there is no relevant legal or factual change between sentence and resentence, the motive for an increase in punishment is suspect and gives rise to an inference of vindictiveness on the part of the sentencing judge.

But the court stated that no such inference would arise in Booker cases, reasoning, "Booker brought about a fundamental change in the sentencing regime. The guidelines, mandatory when Goldberg was sentenced, are now advisory.”

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The court observed that, if a defendant seeks and receives only a limited Paladino remand, there is no significant worry about an increase, noting, "Such a remand asks the judge whether he would have given the defendant a shorter sentence had he realized the guidelines are merely advisory. If so, this would show that his treating the guidelines as mandatory had been a plain error, and so we would vacate for resentencing. Since our basis for doing this would be the judge’s having told us that he wanted to shorten the defendant’s sentence, it would be an unusual case, to say the least, in which the judge would impose a heavier rather than a lighter sentence; presumably it would be a case in which damaging new information had come to light since the Paladino remand."

In contrast, a defendant such as Goldberg who appeals a pre-Booker sentence on the basis that the guidelines were misapplied, "is playing with fire, because if he wins and is resentenced the judge will have more sentencing latitude, up as well as down, than he did when the guidelines were deemed mandatory."

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David Ziemer can be reached by email.