United States v. Saxton

Opinions of the United
2002 Decisions States Court of Appeals
for the Third Circuit

11-7-2002

USA v. Saxton
Precedential or Non-Precedential: Non-Precedential

Docket No. 02-1326

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 NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_______________

No. 02-1326

_______________

UNITED STATES OF AMERICA

v.

SUE ELLEN SAXTON,

Appellant

_______________

On Appeal from the United States District Court
for the Middle District of Pennsylvania.
(Criminal Action No. 1:01-CR-58-1).
District Judge: Judge William W. Caldwell

_______________

Submitted Under Third Circuit LAR 34.1(a)
October 28, 2002
_______________

Before NYGAARD, GARTH, and MICHEL, 1 Circuit Judges

(Opinion Filed: November 7, 2002)

1
The Honorable Paul Redmond Michel, United States Court of Appeals, Federal
Circuit, sitting by designation.

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 _______________

OPINION

_______________

GARTH, Circuit Judge:

Appellant Sue Ellen Saxton appeals the district court’s judgment of sentence. The

district court had ordered an upward departure from the Sentencing Guidelines and assessed

restitution for losses which Saxton challenged.

We affirm.

I.

Because we write solely for the benefit of the parties, we recount the facts and

procedural history of the case only as they are relevant to the following discussion.

In 1979, Sue Ellen was elected Prothonotary and Clerk of Courts for Mifflin

County, Pennsylvania, an office she held until August 2000. An investigation revealed that

throughout her twenty-year career, she embezzled funds collected in the normal course of

business and converted these funds for the personal use of herself and her husband,

Frederick Saxton. 2 On February 21, 2001, the Government filed an Information charging

Sue Ellen and Frederick with one count for violation of 18 U.S.C. § 371 (conspiracy)

involving: the embezzlement of money from a program receiving federal funds, 18 U.S.C. §

2
United States v. Frederick E. Saxton appeal No. 01-1328 is based on the same
facts related herein. A separate opinion resolving that appeal will be filed.

2
666(a)(1)(A); the transportation of stolen money in interstate commerce, 18 U.S.C. § 2314

and the receipt of stolen money which has crossed a state or United States boundary, 18

U.S.C. § 2315. The Information charged that the conspiracy began in or around January

1993 and continued to at least April 2000.

On January 23, 2001, Sue Ellen pled “guilty” before the district court to the one

count of conspiracy, in violation of 18 U.S.C. § 371. As part of the plea agreement, she

agreed that the amount of the loss to all victims as a result of her conduct was more than

$800,000, but less than $1,500,000 and she agreed to make full restitution as determined

by the district court.

The district court held a sentencing hearing on January 18, 2002. Among other

things, it determined that the Sentencing Guidelines which provided for an offense level of

21 (which under Criminal Category I provides for a range of 37 to 46 months of

incarceration) should be increased three levels to level 24 (which under Criminal Category

I provides for a range of 51 to 63 months of incarceration). The district court found that

this upward departure was warranted under (1) U.S.S.G. § 5K2.0 because the value used to

calculate the sentence under the guidelines did not capture the aggregate harm of Sue

Ellen’s actions and under (2) U.S.S.G. § 5K2.7 because her embezzlement of public funds

over twenty years caused a significant disruption of a governmental function.3 The district

3
Section 5K2.7 provides, in relevant part, “[i]f the defendant's conduct resulted in a
significant disruption of a governmental function, the court may increase the sentence
above the authorized guideline range to reflect the nature and extent of the disruption and
the importance of the governmental function affected.” U.S.S.G. § 5K2.7.

3
court also determined that the amount of restitution was to be calculated based on the

period of time from 1980 to 2000–the period of Sue Ellen’s entire tenure as a

Prothonotary. The amount of restitution ordered by the district court was $995,930.90.

Accordingly, the district court sentenced Sue Ellen to a 60-month term of

incarceration, the statutory maximum under 18 U.S.C. § 371, followed by three years

supervised release, a $100 special assessment and restitution in the amount of

$995,930.90 ($741,444.81 plus $254,486.094) to be paid by Sue Ellen, jointly and

severally with her husband, Frederick. See note 2, supra. In ordering restitution in that

amount the district court added to the $741,444.81 monies taken by Sue Ellen from 1993

to 2000 another $254,486.09 representing additional losses from January 1, 1980 to

December 31, 1992.

Sue Ellen objected to the upward departure and the $995,930.90 restitution. At

sentencing, the district court overruled both objections. In denying Sue Ellen’s objection

to the upward departure, the district court stated that the value used in calculating her

sentence under the guideline failed to capture the extensive harm that she caused because

the embezzlement of public funds over an approximate twenty-year period caused

significant disruption of a governmental function. The district court also stated that the

value used to calculate the guideline failed to capture the additional expenses that have been

incurred, as well as the intangible harm from her conduct–the public’s loss of trust in

4
A second audit for the period of January 1, 1980 through December 31, 1992
revealed additional losses of $254,486.09.

4
public officials. In denying Sue Ellen’s objection to the restitution amount, the district

court ruled that under the plea agreement she had agreed to satisfy in full the restitution

ordered by the court.

This timely appeal followed.

II.

We have jurisdiction to hear Sue Ellen Saxton’s appeal of the application of U.S.S.G.

§ 5K2.0 pursuant to 18 U.S.C. § 3742 and 28 U.S.C. § 1291. We review a district court’s

departure ruling for abuse of discretion. Koon v. United States, 518 U.S. 81, 100, 116 S.

Ct. 2035, 2047 (1996). We review the district court’s determination of the amount of

restitution for clear error. United States v. Akande, 200 F.3d 136 (3d Cir. 1999).

Sue Ellen has two arguments on appeal. First, she claims that the district court erred

in imposing a three level upward departure because the guideline offense level which

provided for a 13 level increase for embezzlement for more than $800,000 but less than

$1,500,000 fully accounted for the additional financial losses that the district court

assessed. Second, she contends that the district court erred in holding her liable for an

additional $254,486.09 of restitution to account for losses from January 1, 1980 through

December 31, 1992 because those monies reflect losses for a period not charged in the

Information and because her plea agreement to make “full restitution” was ambiguous.

A.

The Sentencing Guideline Section 5K2.0 provides, in relevant part, that “the

sentencing court may impose a sentence outside the range established by the applicable

5
guidelines, if the court finds ‘that there exists an aggravating or mitigating circumstance of

a kind, or to a degree, not adequately taken into consideration by the Sentencing

Commission in formulating the guidelines that should result in a sentence different from

that described.’”

Sue Ellen argues that the district court erred in imposing a 3 level upward departure

under U.S.S.G. § 5K2.0 because the guideline offense level applied in her case fully

accounted for the additional financial losses of $254,486.09 during the period from

January 1, 1980 to December 31, 1992. Saxton claims that because she was sentenced

under Sentencing Guideline § 2B1.1(b)(1)(N) (2000)5, which provides an offense level of

13 for losses of more than $800,000 but less than $1,500,000, the district court could not

depart upward another 3 offense levels in as much as the $995,930.90 which the district

court ordered for restitution was well within the thirteen offense level range. Saxton

maintains that the guideline offense level under § 2B1.1 also fully accounts for the

additional losses for auditing, increased insurance premiums and taxes referenced in the

Presentence Report (“PSR”). She does not contest the upward departure pursuant to §

5K2.7 (disruption of a government function). Saxton further claims that the government

cannot meet its burden of showing that the district court’s error was harmless.

Saxton’s argument is without merit. The Supreme Court has stated that the

Sentencing Commission has not fully accounted for situations where the loss determined

5
The 2000 edition of the Guidelines Manual has been used in this case.

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fails to fully capture the harmfulness of the conduct. Koon, 518 U.S. at 94, 116 S. Ct. at

2045 (citing U.S.S.G. § 5K2.0). Indeed, the Commentary to Section 2B1.1, used to

calculate the offense level here, explains that an upward departure may be appropriate “[i]n

cases where the loss determined . . . does not fully capture the harmfulness of the conduct.”

U.S.S.G. § 2B1.1, Commentary, Application Note 14. Accordingly, in applying § 2B1.1,

courts have made upward adjustments based upon intangible losses such as were

experienced in Saxton’s case. See e.g., United States v. Robie, 166 F.3d 444, 455 (2d Cir.

1999) (theft of commemorative stamps caused the “real and intangible loss in the form of

embarrassment and the appearance of incompetence inflicted on the Postal Service . . . .”);

United States v. Nevels, 160 F.3d 226, 230-31 (5th Cir. 1998), cert. denied, 525 U.S.

1185 (1999) (value of funds stolen does not fully capture harmfulness of defendant’s

“egregious” conduct in stealing social security checks and using false identification to

negotiate them).

Similarly, in this case, the district court exercised its discretion and determined that

an upward departure was warranted because the financial loss calculation based on Saxton’s

embezzlement failed to adequately reflect the intangible, non-monetary harm caused by her

theft, namely, the loss of public confidence and trust in elected officials. Accordingly, the

district court did not abuse its discretion in determining Saxton’s sentence based on an

upward departure under U.S.S.G. § 5K2.0.

B.

The Mandatory Victims Restitution Act (“MVRA”) limits recovery to amounts

7
“directly caused by the conduct composing the offense of conviction,” or “those amounts

expressly agree[d] to” pursuant to a plea agreement. United States v. Akande, 200 F.3d at

139 n.3 (3d Cir. 1999) (citing Silkowski, 32 F.3d 682, 689 (2d Cir. 1994)). See 18 U.S.C.

3663A. 6

6
This statute, entitled “Mandatory restitution to victims of certain crimes,” was
enacted as part of the Antiterrorism and Effective Death Penalty Act of 1996. See
Mandatory Victims Restitution Act of 1996, Pub. L. No. 104-132, tit. II, subtit. A, §
204(a), 110 Stat. 1214, 1227-29 (1996). It provides, in pertinent part:
(a)(1) Notwithstanding any other provision of law, when sentencing a
defendant convicted of an offense described in subsection (c), the court shall
order, in addition to, or in the case of a misdemeanor, in addition to or in lieu
of, any other penalty authorized by law, that the defendant make restitution to
the victim of the offense or, if the victim is deceased, to the victim's estate.
(2) For the purposes of this section, the term "victim" means a person
directly and proximately harmed as a result of the commission of an offense
for which restitution may be ordered including, in the case of an offense that
involves as an element a scheme, conspiracy, or pattern of criminal activity,
any person directly harmed by the defendant's criminal conduct in the course
of the scheme, conspiracy, or pattern.

.....

(c)(1) This section shall apply in all sentencing proceedings for convictions
of, or plea agreements relating to charges for, any offense--
(A) that is--
(i) a crime of violence, as defined in section 16;
(ii) an offense against property under this title, or under section 416(a) of the
Controlled Substances Act (21 U.S.C. 856(a)), including any offense
committed by fraud or deceit; or
(iii) an offense described in section 1365 (relating to tampering with
consumer products); and
(B) in which an identifiable victim or victims has suffered a physical injury or
pecuniary loss.

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 Sue Ellen presents two arguments on appeal. First, she argues that the district court

erred in holding that she is liable for an additional $254,486.09, to account for losses from

January 1, 1980 through December 31, 1992, for a total amount of $995,930.90, instead of

for the period covered in the Information, January 1, 1993 through April 30, 2000, totaling

$741,444.81. Saxton relies on our decision in Akande, 200 F.3d 136, in support of her

argument that a restitution order may not include losses caused by conduct that falls

outside the temporal limits of the offense, as established by her guilty plea and the

charging document, in this case, the Information. Moreover, Saxton claims that restitution

for losses occurring during the charged time period constitutes full restitution. In support

of this contention, she relies on Silkowski, 32 F.3d 682, for the proposition that a promise

in a plea agreement to make “full restitution” did not permit restitution for losses outside

the charged time period, where neither the express terms of the plea agreement nor

defendant’s admissions during the guilty plea colloquy obligated defendant to repay losses

outside the temporal limits of the offense of conviction. Silkowski, 32 F.3d at 689.

Saxton’s position is without merit. We have noted that although the offense of

conviction is “temporally defined by the period specified in the indictment or information,”

the parties may agree in the plea agreement to amounts beyond such limitations. Akande,

200 F.3d at 139-40; see also United States v. Mayer, 130 F.3d 338, 340 (8th Cir. 1997)

(noting that the loss stipulated in the plea agreement “delineates the outer limits” of the

defendant’s restitution liability). Saxton’s reliance on Silkowski is misplaced because in

that case, the plea agreement contained no reference to the loss calculated in the PSR and

9
relied upon by the district court in its restitution order. Silkowski, 32 F.3d at 689.

Saxton’s case is different because there was a specific reference to the amount of loss

calculated in the PSR and relied upon by the district court and indeed, she agreed to that

specific amount.

Second, she argues that the plea agreement was ambiguous in that her promise to

make “full restitution” could have meant restitution for only the time period charged in the

Information, or instead it could have meant restitution for the charged period plus her pre-

charge misconduct. She further contends that there was ambiguity in the plea agreement’s

statement that “pursuant to the [MVRA] . . . the Court is required in all instances to order

full restitution to all victims for the losses those victims have suffered as a result of the

defendant’s conduct” because there is nothing in the MVRA requiring restitution for pre-

charge losses and also because it is unclear whether the “conduct” referred to is inclusive

of the pre-charge conduct. We are not persuaded by Saxton’s argument because there was

no ambiguity–she explicitly agreed in her plea agreement to make full restitution in an

amount between $800,000 and $1,500,000. Accordingly, the district court did not err in

determining that Sue Ellen owed $995,930.90 in restitution.

IV.

We will affirm the district court’s judgment of sentence.

TO THE CLERK:

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Please file the foregoing opinion.

/s/ Leonard I. Garth
Circuit Judge

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