[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
SEPT 2, 2008
No. 06-15365
THOMAS K. KAHN
________________________
CLERK
D. C. Docket No. 05-20381-CR-FAM
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
PEDRO B. GONZALEZ,
Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Southern District of Florida
_________________________
(September 2, 2008)
Before BIRCH, PRYOR and KRAVITCH, Circuit Judges.
PER CURIAM:
Pedro Gonzalez (“Gonzalez”) was convicted of several counts of mail and
wire fraud. On appeal, he challenges both his convictions and his sentence. We
conclude that Gonzalez’s conviction is supported by the evidence and that the
district court did not commit any reversible error at trial. Accordingly, we
AFFIRM Gonzalez’s conviction. However, because the fine imposed by the
district court is not supported by the evidence in the record, we must VACATE the
sentence in its entirety and remand this case to the district court for resentencing.
I. BACKGROUND
Gonzalez, the owner of Nations Capital Credit Corporation (“Nations”) and
Excel Investment Group, Corporation (“Excel”), was indicted on five counts of
mail fraud, in violation of 18 U.S.C. § 1341, and six counts of wire fraud, in
violation of 18 U.S.C. § 1343. The indictment described the alleged scheme as
follows. Gonzalez advertised his companies as specializing in obtaining
equipment financing, and he solicited at least 50 small businesses and individuals
throughout the United States to submit credit applications, financial information,
and up-front deposits with the hope of obtaining financing. Gonzalez did not
provide the customers with financing and did not return their deposits as he had
promised.
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At trial, Keith Bauer (“Bauer”) testified that he worked for Gonzalez as an
account executive at Nations. Nations distributed promotional material, and
customers would contact the company with the understanding that Nations could
finance “hard deals.” R4 at 195. Bauer would contact or “cold call” companies
and individuals who would then refer other individuals to Nations for financing.
R5 at 13. When Bauer began working at Nations, Gonzalez instructed him how to
make calls to potential customers. R4 at 189. A typical call would consist of the
following: “I am Keith Bauer from NCC. We can fund you guys. If you have bad
or low credit sources, with a good interest rate . . . .” Id. at 189-90. If the
customer was interested, Nations would start the process, including “pulling the
credit and things like that.” Id. at 190. Gonzalez often told Bauer to request
financial information from potential customers. Before receiving a commitment
letter from Nations, the customers sent a credit application to Nations, and based
on the results of a credit report, Gonzalez would determine whether to attempt to
obtain financing for the customer. Very few applications were denied. If
customers had bad credit, Bauer would tell them that they could probably get
funding with a high interest rate. If a client was interested in obtaining funding
from Nations, he would be required to send in a commitment letter with a deposit
for the first and last month’s payments. The customer was told that the deposits
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would be refunded if financing could not be obtained. Jose Espino (“Espino”) had
bad credit and contacted Nations seeking financing, and Bauer informed him that
they could probably obtain financing. Id. at 207-08. At trial, Espino testified that
he needed financing to purchase a trailer for his truck delivery business, but was
unable to obtain financing. Gonzalez claimed to have a funding source that could
get financing for “tough deals” like Espino’s. Id. at 208. After filling out an
application and sending in a requested credit report, Bauer called and told Espino
he was approved. Espino sent Bauer a check for over $1,400, which he was told
would be refunded if financing was not obtained. Nations never financed Espino’s
trailer and never refunded his money.
Several other victims testified to similar dealings with Gonzalez and
Nations. Martin Cherenacov (“Cherenacov”) testified that he contacted Gonzalez
at Nations after he had failed to obtain financing from a “million places” to build a
movie theater. R5 at 100. Cherenacov never obtained the promised financing
from Gonzalez and he was unsuccessful in obtaining the promised refund. Gina
Woodring (“Woodring”) testified that, after being referred to Nations in order to
finance an expensive piece of equipment for her and her husband’s logging
company and placing a $7,500 deposit, her company began to have financial
difficulties. Woodring never received financing or a refund of her deposit, and she
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was forced to close down her company. Mitchell Gerstenblith (“Gerstenblith”)
testified that his start-up printing company, which was in debt, was referred to
Excel after failing to obtain financing from traditional leasing companies and
banks. He was forced to cancel on a major equipment lease after he failed to
receive the promised financing, and he never received a refund. Gordon Peterson
(“Peterson”) testified that he sent Gonzalez over $3,000 as deposit to obtain
financing, and he never received a refund after financing was denied. Nesthalis
Perez (“Perez”) testified that, after working in a factory, he attempted to obtain
financing from Gonzalez in order to buy a truck and start his own business
because his “life was very hard.” R8 at 42. He sent Gonzalez over $4,600 and
received a refund of only $1,000. Woodring, Gerstenblith, and Peterson all
testified that they provided Gonzalez with their financial information. Gonzalez
did not testify at trial. The court dismissed Count Eight of the indictment, and the
jury found Gonzalez guilty on the remaining ten counts.
The pre-sentence investigation report (“PSI”) calculated Gonzalez’s
guideline range as follows. The base offense level for all ten counts grouped
together was six pursuant to U.S.S.G. § 2B1.1(a). The probation officer applied a
14-level enhancement pursuant to § 2B1.1(b)(1)(h) because the amount of loss
was more than $400,000 but less than $1,000,000. The probation officer applied a
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four-level enhancement pursuant to § 2B1.1(b)(2)(B) because the offense involved
more than 50 victims. The probation officer then applied a two-level enhancement
pursuant to § 3A1.1(b)(1) because Gonzalez knew or should have known that a
victim of the offense was vulnerable based on poor credit history and an inability
to obtain conventional financing. The probation officer also applied a four-level
enhancement pursuant to § 3B1.1(a) for Gonzalez being an organizer or leader of a
criminal activity involving five or more persons. This resulted in an offense level
of 30. Gonzalez earned zero criminal history points, for a criminal history
category of I. An offense level of 30 and a criminal history category of I gave
Gonzalez a guideline range of 97 to 121 months of imprisonment.
After interviewing Gonzalez, examining his financial records, and
investigating other sources, the probation officer analyzed Gonzalez’s financial
condition and his ability to pay a fine. The probation officer determined that
Gonzalez had a net monthly cash deficit and concluded that he did not have the
ability to pay a fine in addition to mandatory restitution. The probation officer
determined that, pursuant to § 5E1.2(c)(3), Gonzalez’s fine range under the
Guidelines was $15,000 to $150,000 and determined that he owed restitution in
the total amount of $993,277.12 to 207 victims. Gonzalez objected to the PSI’s
factual account of his offense conduct, the amount of monetary loss attributed to
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him, the role enhancement, the enhancement for the number of victims, and the
vulnerable-victim enhancement.
At sentencing, the court sustained in part Gonzalez’s objection to the
amount of monetary loss attributed to him, finding that an 8-level enhancement, as
opposed to a 14-level enhancement, was appropriate, sustained Gonzalez’s
objection to the role enhancement, and sustained in part Gonzalez’s objection to
the number of victims, finding that a two-level enhancement, as opposed to a
four-level enhancement, was appropriate. The court then discussed the
vulnerable-victim enhancement and analyzed the financial circumstances of the 14
victims who testified at trial. The court found the following six victims to be
vulnerable within the meaning of § 3A1.1(b)(1): Espino, Cherenacov, Woodring,
Gerstenblith, Peterson, and Perez. After resolving these objections, the court
found Gonzalez’s base offense level to be 18, resulting in a revised guideline
range of 27 to 33 months of imprisonment.
Defense counsel requested that Gonzalez’s family members be permitted to
testify before the court imposed its sentence. The court declined the request,
stating:
I know their support is very important. . . . I infer that they want me
to give the lowest sentence possible. He’s a good man, a good father,
a good husband, a good citizen. But I do not [want to] have a parade
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of family members saying the obvious and putting them through that
trauma.
R10 at 35. The court requested defense counsel to proffer the substance of the
proposed testimony of each family member – Gonzalez’s wife, father, and sisters –
which generally consisted of the fact that Gonzalez had strong family support and
was likely to reintegrate himself into society. The court accepted that the
proposed testimony was in fact what the family members believed. After
Gonzalez requested, without success, that the court impose a sentence below the
applicable guideline range, the court assured defense counsel that it would
consider Gonzalez’s strong family background and his ability to reintegrate back
into society. Gonzalez then personally apologized to the court, asking the court to
consider his family background and lack of criminal history. After summarizing
the resolution of the objections, the court stated:
I will note that, of course, he apologizes, as he mentioned today. I
will not inquire of him as to exactly what he means by that, because
he did not take the stand during the trial, and I suspect that there may
be an appeal, as he has every right to do.
Id. at 41.
The court then discussed each of the 18 U.S.C. § 3553(a) sentencing factors.
The court first considered sentencing for white-collar crime and found that, as is
typically the case, the history and characteristics of Gonzalez “kind of even out,”
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because he came from a good home, but that fact should have allowed him to
avoid his criminal conduct. Id. at 42-43. Considering the nature and
circumstances of the offense, the court found that this inured to the detriment of
Gonzalez because of the desperation of the victims and the persistence of the
fraud. Considering the need to reflect the seriousness of the offense, to promote
respect for the law, and to provide just punishment, the court found that people
who commit fraud should be punished severely because of the harm to the victims.
With regard to deterrence, the court found that the only way to prevent future
white collar crime was to issue severe punishments, as opposed to a house arrest
or a fine, which could be considered the cost of doing business. The court found
that providing Gonzalez with training or education was not a factor in this case.
With respect to the kinds of sentences available, the court found that it had “all
kinds of sentences available” after United States v. Booker, 543 U.S. 220, 125 S.
Ct. 738 (2005). R10 at 44. The court then acknowledged that the applicable
guideline range was “very important,” and noted that the court’s calculation of the
guideline range, after resolving objections, was ten years less than the original
guideline range presented in the PSI. Id. The court found that the need to avoid
unwarranted sentencing disparities was not a factor because Gonzalez was the
only defendant and “the guidelines kind of take care of that.” Id. at 45. With
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respect to restitution, the court found that Gonzalez owed approximately $116,000
but had only paid back $7,000, which was “nothing to brag about.” Id. at 46. The
court then stated:
I think in this particular case, here is what I perceive to be, and I
didn’t hear the defendant testify, of course, though he has not
accepted responsibility and what he said, I apologize. I don’t know.
Does he apologize without accepting responsibility?
But his demeanor during the trial, as I sat here as a Judge, showed in
my mind, while the witnesses that were testifying, particularly the
ones I have found vulnerable because I took into consideration that,
he had what I perceive to be a very callus attitude. It seemed to me
that this was just a business dealing. It was just mugging, I didn’t
want to hit anybody. . . .
There really was absolutely no showing of remorse. Because of that,
I think a reasonable sentence would include a sentence above the
guidelines, and it is my intention to go above the guidelines . . . .
But in this particular case, because [of] what I perceive to be the
callus attitude of the defendant, his lack of remorse, the suffering of
the victims, I disagree with defense counsel saying, well, he’s going
to reintegrate into society. I think he would if he were sufficiently
punished.
Id. at 46-48. Finding a 33-month sentence to be insufficient punishment, the court
imposed a sentence of 66 months of imprisonment and restitution in the amount of
$116,300. The court also stated, “[b]ecause you are able to pay a fine, a fine will
be imposed in the amount of $250,000.” Id. at 48. Defense counsel renewed the
previous objection to the vulnerable victim enhancement, and objected to the
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above-guideline sentence and the fine imposed by the district court. This appeal
followed.
II. DISCUSSION1
Gonzalez argues that the court erred in imposing a $250,000 fine because he
lacks the ability to pay a fine. Gonzalez maintains that he met his burden
regarding his inability to pay, and that the court did not consider his inability to
pay the fine in light of his mandatory restitution, as it was required to do. The
government responds that, during trial, the district court learned of Gonzalez’s
bank records and his lavish lifestyle, and therefore, the fine was supported by that
information, but the government conceded that the fine was otherwise unsupported
by the record.
“We review the district court’s decision that [the] [d]efendant is able to pay
the fine for clear error.” United States v. McGuinness, 451 F.3d 1302, 1307 (11th
1
Gonzalez raised several arguments regarding the district court’s decisions to exclude
demonstrative exhibits prepared by the defense for use at trial, to admit the testimony of Barry
Longwater, and to allow the government to introduce evidence under Federal Rule of Evidence
404(b). Gonzalez also contends that the evidence adduced at trial was insufficient to support his
conviction and the government’s closing argument contained prejudicial remarks. Upon our
review of the record, we discern no reversible error relating to the district court’s rulings on the
admissibility of evidence, and we conclude that sufficient evidence supports Gonzalez’s
conviction. In addition, Gonzalez challenged the district court’s imposition of a “vulnerable
victim” enhancement to his sentence, and the constitutionality and reasonableness of Gonzalez’s
prison sentence. Because we vacate Gonzalez’s sentence in its entirety based upon the fine
imposed by the district court, we do not discuss or resolve Gonzalez’s other objections to his
sentence.
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Cir. 2006) (per curiam). The “[d]efendant has the burden of proving inability to
pay.” Id. The Guidelines require the court to “impose a fine in all cases, except
where the defendant establishes that he is unable to pay and is not likely to
become able to pay any fine.” U.S.S.G. § 5E1.2(a). “If the sentencing court
concludes that a fine is appropriate, the Guidelines Manual lists several factors it
should consider in determining the amount of the fine.” United States v.
Hernandez, 160 F.3d 661, 665 (11th Cir. 1998). These factors are:
(1) the need for the combined sentence to reflect the seriousness of
the offense (including the harm or loss to the victim and the gain to
the defendant), to promote respect for the law, to provide just
punishment and to afford adequate deterrence;
(2) any evidence presented as to the defendant’s ability to pay the fine
(including the ability to pay over a period of time) in light of his
earning capacity and financial resources;
(3) the burden that the fine places on the defendant and his
dependents relative to alternative punishments;
(4) any restitution or reparation that the defendant has made or is
obligated to make;
(5) any collateral consequences of conviction, including civil
obligations arising from the defendant’s conduct;
(6) whether the defendant previously has been fined for a similar
offense;
(7) the expected costs to the government of any term of probation, or
term of imprisonment and term of supervised release imposed; and
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(8) any other pertinent equitable considerations.
The amount of the fine should always be sufficient to ensure that the
fine, taken together with other sanctions imposed, is punitive.
U.S.S.G. § 5E1.2(d). “[W]e do not require the sentencing court to make specific
findings of fact with respect to the Sentencing Guideline factors as long as the
record reflects the district court’s consideration of the pertinent factors prior to
imposing the fine.” Hernandez, 160 F.3d at 665-66 (quotations and alteration
omitted). If the record does not reflect the district court’s reasoned basis “for
imposing a fine, we must remand the case so that the necessary factual findings
can be made.” Id. at 666.
In Hernandez, the defendant argued that the sentencing court erred by
imposing a fine upon him after the PSI concluded that he did not have the ability
to pay. Id. at 665. However, because the defendant did not object to the fine at
sentencing, we reviewed his claim for plain error and stated that “the district court
had no notice of the need to make further findings with respect to the fine.” Id. at
666. Nonetheless, we concluded that the record supported the fine because he
owned a home and a yacht before seeking bankruptcy relief, and he failed to
answer the probation office’s financial questions, thus implying that he was
concealing assets. Id.
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By contrast, in this case, the PSI provided a detailed financial analysis of
Gonzalez’s assets and concluded that he lacks the ability to pay a fine in addition
to mandatory restitution. At sentencing, however, the court stated, without
explanation, that Gonzalez was able to pay a fine and imposed a $250,000 fine.
R10 at 48. At the time that the court imposed the fine, it had reduced Gonzalez’s
base offense level to 18 after sustaining Gonzalez’s objections to some of the
enhancements in the PSI. Under the Guidelines, a base offense level of 18 would
give Gonzalez a new Guidelines fine range of $6,000 to $60,000. U.S.S.G. §
5E1.2(c)(3). Thus, the court imposed a fine of more than three times the
maximum fine provided for in the Guidelines without providing any reasoned
basis and without explaining why the PSI’s conclusion with respect to Gonzalez’s
inability to pay was incorrect. Unlike Hernandez where the defendant failed to
object to the fine, Gonzalez objected at sentencing and the court therefore had
notice of the need to provide some reasoned basis for imposing the fine. See 160
F.3d at 665-666. Because the record provides no explanation regarding the basis
upon which the court imposed the fine, we vacate the sentence imposed by the
district court and remand this case for resentencing. United States v. Yost, 185
F.3d 1178, 1181 (11th Cir.1999) (“. . . we have held that when we vacate a
sentence and remand for resentencing, the sentence becomes void in its entirety
14
and the district court is free to revisit any rulings it made at the initial
sentencing.”); United States v. Stinson, 97 F.3d 466, 469 (11th Cir.1996) (per
curiam) (“A criminal sentence is a package of sanctions that the district court
utilizes to effectuate its sentencing intent consistent with the Sentencing
Guidelines.”).
III. CONCLUSION
On appeal, Gonzalez challenges both his conviction and his sentence. We
conclude that Gonzalez’s conviction is supported by the evidence and that the
district court did not commit any reversible error at trial. Accordingly, WE
AFFIRM GONZALEZ’S CONVICTION. However, because the fine imposed
by the district court is not supported by the record, we must vacate the sentence in
its entirety and remand this case to the district court for resentencing.
VACATED IN PART AND REMANDED
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