FILED
United States Court of Appeals
Tenth Circuit
February 4, 2009
UNITED STATES COURT OF APPEALS Elisabeth A. Shumaker
Clerk of Court
TENTH CIRCUIT
UNITED STATES OF AMERICA,
Plaintiff - Appellee, No. 07-4256
v. (D. Utah)
ANGELO M. DEGENHARDT, (D.C. No. 2:03-CR-00297-PGC-1)
Defendant - Appellant.
ORDER AND JUDGMENT *
Before MURPHY, McKAY, and GORSUCH, Circuit Judges.
I. INTRODUCTION
In 2005, Angelo Degenhardt pleaded guilty to one count of securities fraud.
The district court sentenced him to sixty months’ probation. In 2007, the district
court issued a summons based on a petition by the United States Probation Office
(“USPO”) alleging Degenhardt violated the terms of his probation by traveling
without permission and failing to notify the USPO he was employed. After
Degenhardt admitted both violations, the district court revoked his probation and
*
This order and judgment is not binding precedent except under the
doctrines of law of the case, res judicata, and collateral estoppel. It may be cited,
however, for its persuasive value consistent with Fed. R. App. P. 32.1 and 10th
Cir. R. 32.1.
sentenced him to forty-one months’ imprisonment. Degenhardt appeals, asserting
the district court erred when it (1) refused to continue the hearing on the
revocation of probation; and (2) imposed sentence in reliance on evidence not
available to the defense. Exercising jurisdiction pursuant to 28 U.S.C. § 1291,
this court affirms.
II. BACKGROUND
In 2003, Degenhardt was indicted on multiple counts of, inter alia, mail
and securities fraud. He pleaded guilty to a single count of securities fraud, in
violation of 15 U.S.C. §§ 77q(a), 77x. Degenhardt’s advisory sentencing range,
as set out in the United States Sentencing Guidelines, was forty-one to fifty-one
months’ imprisonment. Nevertheless, the parties entered into plea negotiations
and agreed, pursuant to Fed. R. Crim. P. 11(c)(1)(C), that Degenhardt would serve
a sentence of sixty months’ probation and pay full restitution.
At the change of plea hearing, the district court began by noting the lenient
nature of the sentence set out in the plea agreement. In response, the government
identified three justifications for the lenient sentence: (1) delays in bringing the
case, along with evidentiary problems, made obtaining convictions less than
certain; (2) Degenhardt’s health issues could impose serious medical costs on the
government should he be imprisoned; and, most importantly, (3) the plea
agreement called for full restitution for all victims, something that could best be
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achieved if Degenhardt was not imprisoned. Based upon these considerations, the
district court accepted the plea, and was thus bound to impose a sentence
consistent with the plea agreement. Fed. R. Crim. P. 11(c)(1)(C), (c)(4).
At the sentencing hearing, the district court began by stating the plea
agreement “does seem like it’s a deal for [Degenhardt]. If I were sentencing in
this matter, the sentence I would impose would be around [forty-six] months in
prison . . . .” It nevertheless accepted “the proposed arrangement for one reason,
which is a full restitution order will be in place.” The district court closed by
advising Degenhardt as follows: “I should advise Mr. Degenhardt that if I find
that he’s hiding so much as a dollar from any of the victims in this case that I
would have the opportunity and would be inclined to revoke the probation [and]
impose a prison sentence . . . .” The district court then imposed a sentence of
sixty months’ probation, consistent with the parties’ plea agreement.
On October 1, 2007, the district court ordered the issuance of a summons
based on a petition alleging Degenhardt had violated the terms of his probation by
traveling out of state without permission and by being employed at Your Travel
Biz Travel Network (“YTB”) without informing his probation officer. On
October 18 and 19, 2007, the government provided a total of 292 pages of
discovery to Degenhardt. On October 23, 2007, Degenhardt moved to continue
the October 31, 2007, revocation hearing. He asserted generally that he did not
have possession of critical discovery materials and that the government would not
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be able to provide the necessary materials until October 24, 2007. Accordingly,
he requested a one-month continuance to allow “time to adequately review the
evidence presented by the government, to seek and issue subpoenas, and interview
numerous witnesses.” Although the government did not oppose the request, it
noted the grant of a continuance would necessitate the expenditure of additional
judicial resources as the judge assigned to the case, the Honorable Paul Cassell,
was stepping down from the bench effective November 1, 2007, and a new judge
would have to be assigned.
The district court denied the motion to continue, indicating it did not
believe there was outstanding discovery critical to the question of whether
Degenhardt violated the conditions of his probation. 1 The district court noted
“significant discovery has already been provided to the defense regarding these
allegations,” including Degenhardt’s bank account information, the Judgment and
Commitment Order signed by Degenhardt, employment documents, and restitution
account information. With respect to Degenhardt’s assertion about the need for
1
In this regard, the district court noted as follows:
Degenhardt contends, somewhat vaguely, that “critical discovery” is
not yet available and therefore this matter must be continued. Yet
his motion fails to explain with any precision what that discovery
is. . . . The court is unconvinced [] a continuance is necessary . . . .
The facts surrounding these allegations [of probation violations] can
be quickly established—to wit, either the defendant left the Northern
District of California or he did not, and either the defendant worked
for [YTB] or he did not.
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interviews and additional records, the district court indicated the allegations in
the petition were not remotely complex and related to information uniquely within
Degenhardt’s control. 2 Accordingly, the district court denied Degenhardt’s
motion to continue and advised the parties to be prepared to fully present their
cases, including the question of what should happen should the court find a
violation of supervised release at the October 31 hearing.
Although it denied Degenhardt’s motion to continue, the district court took
an important step to ameliorate any potential prejudice to Degenhardt. First, the
district court established a deadline for materials it would consider at the
revocation hearing:
[O]ut of an abundance of caution and to be completely fair to the
defendant, the court will direct that the evidence that the government
2
According to the district court:
[T]he defendant alleges that “numerous individuals will have to be
interviewed, either telephonically or in person and various records
will either have to be retrieved or subpoenaed.” The court has just
one question about this assertion: Why? Did the defendant travel
outside of California without permission and admit that fact? If so,
that allegation can be quickly resolved next week. Similarly, did the
defendant work for YTB and admit that fact? Again, this is a narrow
issue that can be quickly determined. Moreover, nothing in the
defense motion for a continuance even asserts that the defendant will
deny either of these two allegations. Of course, if the defendant is
going to admit these allegations, then there is absolutely no need for
a continuance. Moreover, the information seems to be uniquely
within [] Degenhardt’s control. He would know, for example,
whether he went to St. Louis or not and whether he was paid to do
that or not. This is not a situation where the government has unique
control over information that must be disclosed to the defense.
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will present at next week’s hearing will be limited to that which is
provided to the defense by close of business on October 25, 2007. [3]
That will give the defendant nearly a week to prepare for the hearing.
The court also directs the [USPO] to promptly provide to defense
counsel a violation report containing any information that the court
will consider in the event that the defendant is determined to have
violated his conditions of supervision.
The district court further indicated that if it should become apparent at the
hearing that additional evidence was necessary, it would revisit the question of a
continuance. 4
The revocation hearing was held, as scheduled, on October 31, 2007. The
district court began by announcing it was delaying the hearing to let defense
counsel meet with a representative of YTB. When the hearing resumed, the
district court asked if defense counsel had a “plan of attack.” In response,
defense counsel stated “Yes, Your Honor. The defendant, at this time, will admit
to the two allegations. . . . And then certainly we would like to address
sentencing.” As to the question of the appropriate sentence, the parties’
arguments focused almost exclusively on the allegation that Degenhardt had
failed to report his employment at YTB to the USPO. In particular, the parties
3
Consistent with the district court’s order, the government provided a final
packet of discovery materials, consisting of 124 pages of written materials, on
October 25th.
4
The district court stated as follows: “At the conclusion of [the revocation
hearing], should the defense continue to believe that important information has
not been located despite due diligence on the part of the defense that would be
material to the defendant’s defense, the court will certainly be willing to review
that issue at that time.”
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focused on the question whether Degenhardt’s failure to report his activities at
YTB was an honest mistake (as Degenhardt contended) or an effort to avoid
paying restitution to the victims of his financial crimes (as the government
contended). At the conclusion of the parties’ arguments, the district court
imposed a sentence of forty-one months’ imprisonment. In so doing, the district
court noted the following: (1) it considered the § 3553(a) factors as well as
Chapter 7 of the United States Sentencing Guidelines relating to revocation of
probation; (2) an upward variance from the Chapter 7 guidelines was appropriate
because Degenhardt attempted to hide his income in an effort to avoid paying
restitution; (3) the intent to hide money, not the money amount, was the critical
matter; and (4) Degenhardt had previously been given a lenient sentence and told
that he would face serious consequences if he violated the terms of his probation.
Following the imposition of sentence, the court asked Degenhardt’s counsel
if it should “be making any recommendations to the Bureau of Prisons.” Defense
counsel asked that Degenhardt be permitted to self-report to a facility in
California. The district court denied that request and ordered that Degenhardt be
taken into custody immediately. In so ordering, the district court stated as
follows:
All right. I am going to direct that the defendant be taken into
custody forthwith. I think I may be doing him a favor. I know that
from some of the submissions that have been coming back and forth
there are health problems and so forth that made it difficult for him
to travel back and forth and I think as soon as we can get him into
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custody then at that point the Bureau of Prisons and the U.S.
Marshals can attend to his health issues and make sure that those are
. . . properly addressed.
The defendant also works for a travel agency and he has family
in Germany. But the main thing here is just to make sure that he gets
into custody quickly so the health issues can be attended to. There is
also going to be an additional basis for my ruling which I’m going to
put into the record in chambers with my court reporter after the
hearing. So for all those reasons, the defendant is to [be] taken into
custody.
Defense counsel asked to be present when the court put on the record the
“additional basis” for its ruling. Defense counsel noted, “I don’t know what
you’re talking about.” The district court denied that request, stating “I want to do
that ex parte en camera.”
III. DISCUSSION
A. Continuance
The denial of a motion to continue is reviewed for abuse of discretion.
Phillips v. Ferguson, 182 F.3d 769, 775 (10th Cir. 1999). “A trial judge’s
decision to deny a motion for a continuance constitutes an abuse of discretion
only if the denial was arbitrary or unreasonable and materially prejudiced the
[defendant].” United States v. Rivera, 900 F.2d 1462, 1475 (10th Cir. 1990)
(quotation omitted). A review of the record in this case reveals the district
court’s decision was not unreasonable and, furthermore, did not materially
prejudice Degenhardt.
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As noted by the district court, the primary question to be addressed at the
revocation hearing—whether Degenhardt violated his terms of supervised
release—was not complicated. Furthermore, the facts relevant to the questions of
whether he traveled without permission and worked without reporting his
employment were uniquely within his control. Finally, Degenhardt admitted at
the hearing that he had violated the terms of his probation and does not argue on
appeal that he would have done otherwise if a continuance had been granted.
Thus, it is difficult to see how he was prejudiced in any way by the district
court’s denial of his request for a continuance.
To the extent Degenhardt argues on appeal that the denial of a continuance
deprived him of the opportunity to develop evidence in mitigation relating solely
to the question of what sentence he should receive should his probation be
revoked, it is far from clear he raised such a claim before the district court. Cf.
United States v. Mora, 293 F.3d 1213, 1216 (10th Cir. 2002) (noting this court
does not consider arguments raised for the first time on appeal). Even if he did
raise such a claim, however, the district court still acted reasonably in denying the
continuance. First, granting Degenhardt’s request would have caused the
expenditure of additional judicial resources. Judge Cassell was well versed in the
nuances of this complex financial fraud case as he was the original sentencing
judge. Because Judge Cassell was preparing to leave the bench, the granting of
the requested continuance would have necessitated a new judge completely
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familiarizing herself with the case. This is a countervailing consideration the
district court was entitled to consider in deciding whether to grant a continuance.
Furthermore, when it did deny the continuance, the district court specifically
ordered that the government could not rely on any evidence at the revocation
hearing not provided to defense counsel by October 25th, six days before the
revocation hearing. Thus, the universe of available information was known
before the hearing, seriously limiting the necessity for defense counsel to conduct
extensive interviews on any matter in advance of the revocation hearing. These
prophylactic steps served to greatly diminish any potential prejudice to
Degenhardt from proceeding with the revocation hearing on its previously
scheduled date. Thus, the district court’s decision that a continuance was not
necessary to protect Degenhardt’s right to a fair hearing was neither arbitrary nor
unreasonable.
Likewise, the record reveals Degenhardt was not materially prejudiced by
the district court’s denial of the requested continuance. In his brief on appeal,
Degenhardt focuses on perceived questions about the amount of money he earned
on his wife’s behalf while working at YTB. There is, however, nothing in the
record to indicate that the amount of money he earned at YTB played any part in
the decision of the district court to arrive at an appropriate term of imprisonment
upon revocation of probation. Instead, the district court focused solely on the fact
that Degenhardt worked in such a way as to cover up the income earned and,
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thereby, avoided paying further restitution to the victims of his fraud. In
addition, Degenhardt has failed to identify on appeal any evidence he would have
presented at the sentencing hearing if the continuance would have been granted.
Thus, Degenhardt has failed to identify any prejudice to him flowing from the
district court’s denial of the requested continuance, let alone material prejudice.
Because the denial of the continuance is supported by reasonable
considerations and because Degenhardt has shown nothing more than purely
hypothetical and abstract harm flowing from the denial of the motion, the district
court did not abuse its discretion in denying Degenhardt’s request for a
continuance.
B. Sentencing Based on Undisclosed Evidence
Degenhardt asserts the district court relied on evidence not available to the
defense in arriving at a sentence upon revocation of probation, thereby violating
Fed. R. Crim. P. 32.1(b). In so arguing, Degenhardt relies on the statement of the
district court at the conclusion of the sentencing hearing that it had an additional
basis for his ruling that he would place on the record “ex parte en camera.” In
response, the government argues the district court relied on undisclosed
information solely in the context of determining whether Degenhardt would be
allowed to self-surrender to begin serving his sentence. Accordingly, the
government argues, there is no factual basis for Degenhardt’s assertion he was
sentenced on the basis of undisclosed information.
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On November 12, 2008, this court, on its own motion and after examination
of the entire record, ordered the sealed portion of the sentencing transcript
unsealed. 5 The transcript reveals that the additional consideration set out by the
district court en camera relates solely to the decision to deny Degenhardt’s
request to self-surrender to prison. The transcript further reveals the district court
had a good reason for taking the very unusual step of going off the record at the
conclusion of the hearing: during the sentencing hearing bomb threats were
phoned into the district court from area codes close to where Degenhardt resided
and, as part of an ongoing investigation, law enforcement thought it imperative to
question Degenhardt without tipping off individuals who might be acting in
concert with him to disrupt the hearing.
The now-unsealed sentencing transcript definitively reveals the district
court did not rely on undisclosed evidence in arriving at Degenhardt’s sentence
upon revocation of probation. Because it is without a factual basis, Degenhardt’s
argument based upon Fed. R. Crim. P. 32.1(b) necessarily fails.
5
On the same day this court unsealed the en camera portion of the
sentencing transcript, Degenhardt filed an unopposed motion to vacate oral
argument and submit this case on the briefs. On November 13, 2008, we granted
Degenhardt’s motion, vacated oral argument, and ordered the case submitted on
the briefs.
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IV. CONCLUSION
For those reasons set out above, the United States District Court for the
District of Utah is hereby AFFIRMED.
ENTERED FOR THE COURT
Michael R. Murphy
Circuit Judge
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