The Seventh Circuit on July 29 held a sentence reasonable, upon return after a limited remand pursuant to U.S. v. Paladino, 401 F.3d 471 (7th Cir. 2005).
Fayez Alburay owned and operated a neighborhood grocery in Chicago, and was authorized by the USDA to accept food stamps.
Under the program, consumers pay for qualified food items with food stamps, which Alburay could then redeem at a bank and be credited with a cash deposit. The USDA would then reimburse the bank for the cash deposit.
Alburay, however, accepted food stamps in exchange for cash instead of qualified food items (Alburay paid $70 cash for $100 worth of stamps).
Upon being charged with nine criminal counts for his conduct, Alburay pleaded guilty to one count of wire fraud, in violation of 18 U.S.C. 1343, and the other counts were dismissed. Alburay reserved the right to contest the amount of loss, and was on track to receive a three-level reduction for acceptance of responsibility, under the sentencing guidelines.
However, Alburay did not appear for sentencing, and was subsequently arrested with a fake passport, preparing to flee the United States. At sentencing, he received no reduction for acceptance of responsibility, but instead received an enhancement for obstruction of justice. The court adopted the probation office’s amount of loss as $1.75 million.
Alburay requested a downward departure based on hardship resulting from his status as a deportable alien, but the district court denied the departure. Instead, the court sua sponte considered an upward departure on the basis that Alburay’s category I criminal history understated his likelihood to reoffend. Ultimately however, the court decided against an upward departure.
The resulting range was 41 to 51 months, and the court imposed 51. The court also ordered $1.75 million in restitution.
What the court held
Case: U.S. v. Fayez Alburay, No. 03-3848.
Issue: Is a sentence that falls within a properly calculated guideline range reasonable?
Holding: Yes. Where the sentencing court, on limited remand, articulated the factors warranting the sentence, it is reasonable, and will be affirmed.
Alburay appealed, and the court ordered a limited remand pursuant to Paladino. On remand, the district court stated it would impose the same sentence even under advisory guidelines. Upon return to the Seventh Circuit, the court reviewed the sentence for reasonableness, and affirmed, in a decision by Judge Daniel A. Manion.
The court concluded that the district court on remand provided a reasonable explanation for its sentence.
The district court justified the sentence as follows:
"Defendant Alburay (1) committed numerous criminal acts and engaged in more than minimal planning in committing the offense, (2) possessed three social security numbers, two driver’s licenses, and five aliases, (3) failed to appear for his sentencing hearing, and (4) was found with an alias when arrested after the issuance of a fugitive warrant. When coupled with his convictions and arrests not resolved by conviction or acquittal, these facts establish Defendant Alburay’s gross disregard for the law and a pattern of recidivism. They also establish that Defendant Alburay went to great lengths to avoid detection of his criminal behavior. Based on the record at the time of sentencing and the Government’s and Probation Office’s recommendations, it was determined that Defendant Alburay’s offense resulted in a loss amount of $1,750,000. This loss amount is significant and indicative of the serious nature of Defendant Alburay’s offense. Finally, Defendant Alburay’s criminal history grossly understates the likelihood that he will continue to commit financial crimes and otherwise disregard the law. In fact, the Court initially considered departing upward from the sentencing range proscribed by the guidelines before settling, instead, on its [original] sentence at the high end of the range. For all of these reasons, the Court declares that it would reimpose its [original] sentence if required to resentence Defendant Alburay. The fact that the sentencing guidelines are advisory does nothing to change this result."
The Seventh Circuit concluded, "The district court’s limited remand decision presents a more than adequate justification of the sentence under the sec. 3553(a) factors. Here, moreover, we have a sentence within the guideline range, which was accurately calculated (cites omitted)." Accordingly, the court held the 51 month sentence was reasonable.
Nevertheless, the court again remanded the case to the district court to correct a mathematical error in calculating restitution.
To calculate loss, the government estimated legitimate sales by using the estimate Alburay had included on his 1996 application $180,000 per year, or $15,000 per month. The government then divided the
$2.1 million worth of food stamps that Alburay redeemed, by the 25 months the fraud had endured, equaling $84,000 per month.
$84,000 in total redemptions, less $15,000 in legitimate redemptions, left $69,000 per month in fraudulent redemptions. However, in calculating loss, the district court had multiplied the 25 months the scheme lasted by $70,000 per month, instead of $69,000, to reach $1.75 million.
The court acknowledged that, as a fraction of the loss, the error was negligible, but found that a $25,000 error in restitution cannot be ignored. Accordingly, the court directed the district court on remand to recalculate the loss using $69,000 per month, for a total restitution amount of $1,725,000.
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David Ziemer can be reached by email.