Sunday, April 19, 2009
Only one day after a panel of the Third Circuit reversed a sentence as substantively unreasonable in US v. Olhovsky, No. 07-1642 (3d Cir. April 16, 2009) (a holding in favor of the defendant), the Third Circuit issued today its en banc opinion in US v. Tomko, No. 05-4997 (3d Cir. April 17, 2009), in which it upheld a sentence which the government had described as substantively unreasonable. In Tomko, a divided three-judge panel originally reversed, as substantively unreasonable, a sentence of probation in a tax evasion case. The defendant had pleaded guilty to tax evasion and stipulated to a tax loss of $228,557 resulting from his use of false invoices to disguise work done on his home as being expenses of his company. The Sentencing Guideline range was 12 to 18 months of incarceration, but the district court imposed a sentence of probation, with a special condition of one year of house arrest; however, the court ordered an above-Sentencing Guideline range fine of $250,000. The government appealed, and the divided panel reversed the sentence as unreasonable. One interesting fact about the case was that the defendant's year of house arrest was to be spent in the defendant's luxurious home, built in part through his tax evasion scheme. The defendant obtained his downward variance by arguing that his incarceration could lead his employees to lose their jobs; he had performed exceptional charitable acts and good works; and he had demonstrated an extraordinary degree of acceptance of responsibility.
In a lengthy and detailed opinion, the Tomkoen banc court vacated the panel decision and upheld the sentence on the basis of Gall. The government had argued strongly that the sentencing court had made a procedural and substantive error by failing to properly address or give weight to the sentencing factor of deterrence: a critical consideration for the government in criminal tax cases, because such cases are rare and the national tax gap -- the amount of taxes collected vs. the amount of taxes truly due -- is enormous. The court, after noting that most of the appellate judges personally disagreed with the sentence imposed, rejected that concern by observing in part that the typicality or uniqueness of a case does not alter the deferential standard of review. The court also observed that a concern relating to sentencing disparities "is not new," and that the Supreme Court recognized and accepted that sentencing disparities would increase when it rendered the Sentencing Guidelines advisory in Booker. Ultimately, and in light of Gall, the grounds provided for the downward variance reflected that the district court did not abuse its broad discretion, in part because the difference between the actual sentence and the low end of the Guidelines range was only 12 months.
In contrast, the five-judge dissent found the sentence of probation quantitatively unreasonable, as well as qualitatively unreasonable when compared to the advisory Guideline range. The dissent wrote that Gall still envisioned appellate courts as having a meaningful role in reviewing for substantive unreasonableness, that the Guidelines continue to be a "vital force" in sentencing, and that the Guidelines "serve a particularly important purpose in the area of white-collar crime." According to the dissent, the defendant did not distinguish himself sufficiently from other tax evaders, and the sentence imposed sends the wrong message regarding tax evasion, which generally should receive sentences of imprisonment in order to create sufficient deterrence.
Both the majority and the dissent opinions in Tomko contain additional and very interesting discussions of the sometimes competing values of sentencing court discretion, the current role of the Sentencing Guidelines, and the government's desire for deterrence in tax and other white collar crime cases. The above is just a summary of some of the highlights.
U.S. v. Tomko - Download Tomko