United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 10-2097
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United States of America, *
*
Plaintiff - Appellee, *
* Appeal from the United States
v. * District Court for the
* Southern District of Iowa.
Kris Erhardt Koestner, *
* [PUBLISHED]
Defendant - Appellant. *
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Submitted: December 17, 2010
Filed: December 23, 2010
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Before LOKEN and BYE, Circuit Judges, and MARSHALL,* District Judge.
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PER CURIAM.
Kris Koestner pleaded guilty to one count of tampering with a witness, 18
U.S.C. § 1512(b)(3), to cover up the fraudulent use of food stamp benefits at his
grocery store in Centerville, Iowa. Consistent with the written plea agreement, the
district court1 sentenced Koestner to one year of probation. However, noting that
*
The Honorable D.P. Marshall Jr., United States District Judge for the Eastern
District of Arkansas, sitting by designation.
1
The Honorable Robert W. Pratt, Chief Judge of the United States District Court
for the Southern District of Iowa.
Koestner was a “millionaire,” the court also imposed a $100,000 fine, an amount that
was $70,000 above the advisory guidelines range, see U.S.S.G. § 5E1.2(c)(3), but
well-within the statutory maximum for the offense, $250,000, see 18 U.S.C.
§ 3571(b)(3). Koestner appeals, arguing the fine is substantively unreasonable. We
deferentially review the reasonableness of a sentence for abuse of discretion. “[I]t will
be the unusual case when we reverse a district court sentence -- whether within, above,
or below the applicable Guidelines range -- as substantively unreasonable.” United
States v. Feemster, 572 F.3d 455, 464 (8th Cir. 2009) (en banc) (quotation omitted).
We affirm.
Koestner argues that the district court abused its discretion because it based the
amount of the fine on his financial means, not on the nature of his offense. This is
contrary to U.S.S.G. § 5H1.10, Koestner argues, which instructs that “Socio-
Economic Status [is] not relevant in the determination of a sentence.” But this
advisory Policy Statement does not trump the governing statute, which provides that
the district court, in determining the amount of a fine, must consider Koestner’s
“income, earning capacity, and financial resources,” in addition to other factors such
as “the need to deprive the defendant of illegally obtained gains from the offense.”
18 U.S.C. § 3572(a)(1), (5); see U.S.S.G. § 5E1.2(d)(2), which further provides, “The
amount of the fine should always be sufficient to ensure that the fine, taken together
with other sanctions imposed, is punitive.”
Here, Koestner was a relatively wealthy retailer who acquired at least a portion
of his wealth by fraudulent abuse of the food stamp program. The district court
described Koestner’s relevant conduct as “extremely egregious . . . . Defendant
systematically exploited the poor, defrauded the State of Iowa out of significant sums
of money, and attempted to interfere with the administration of justice.” In these
circumstances, in lieu of a prison sentence, a substantial fine was appropriate not only
to ensure that the sentence was punitive as to Koestner personally, but also to deter
other retailers from similar conduct. Thus, the amount of the fine was reasonably
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related not only to Koestner’s ability to pay a fine, but also to the relevant conduct
associated with his offense. There was no abuse of discretion. We reject Koestner’s
argument that we may not consider the district court’s additional explanation of its
reasons for imposing an upward variance set forth in its Order denying Koestner’s
motion to stay the fine pending appeal. Compare Feemster, 572 F.3d at 459
(considering statements made at a post-sentencing hearing).
The judgment of the district court is affirmed.
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