United States v. Davenport

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT

__________________________

No. 00-10572
__________________________

UNITED STATES OF AMERICA,
Plaintiff-Appellee,

versus

GARY LANDON DAVENPORT,
Defendant-Appellant.

___________________________________________________

Appeal from the United States District Court
for the Northern District of Texas
___________________________________________________

March 14, 2002

Before POLITZ, STEWART, and CLEMENT, Circuit Judges.

CLEMENT, Circuit Judge:

Gary Landon Davenport appeals his sentence for securities

fraud and using a post office box in furtherance of a scheme to

defraud. He argues that the district court made an improper upward

departure in sentencing him to twenty years imprisonment and that

the government breached his plea agreement. Finding no error, we

affirm.

On January 21, 2000, Gary Davenport pled guilty to devising a

fraudulent estate planning service targeted at elderly victims.

The scheme, which began in October 1992, involved inducing senior

citizens to liquidate legitimate investments and put their life
savings in Davenport’s sham company, Southwest Family Trust Service

(“Southwest”). In June 1996, the Texas State Bar obtained an

injunction shutting down Southwest for engaging in the unauthorized

practice of law; but rather than cease his activities, Davenport

changed the name of his business to Liberty Marketing Service and

continued swindling investors for more than two years. Davenport

admitted that he cheated at least 65 elderly individuals out of

more than $2 million.

In connection with Davenport’s plea agreement, the government

stipulated that a guideline range of 87 to 108 months imprisonment

would sufficiently penalize Davenport’s conduct. After reviewing

the pre-sentence investigation report (“PSR”) prepared by the

probation office, the district court concluded that the appropriate

guideline range was 70 to 87 months. However, finding that the

guidelines did not fully recognize the gravity of Davenport’s

offense, the court determined that an upward departure was

appropriate and imposed consecutive sentences of 60 months on Count

1 and 180 months on Count 2, for a total of 240 months

imprisonment. The court also imposed a three year term of

supervised release and ordered restitution in the amount of

$2,605,936.00.

II.

Davenport appeals his sentence, urging that the district court

failed to notify him of its intent to depart upward, that the court

lacked proper grounds for departure, that the departure was

2
excessive, and that the government breached his plea agreement by

failing to recommend a shorter sentence. We find these objections

without merit and affirm.

Federal Rule of Criminal Procedure 32 gives the defendant and

the government an opportunity to comment on the probation officer’s

determinations and other matters at sentencing. See FED. R. CRIM.

P. 32(C)(West 2002). In Burns v. United States, 501 U.S. 129, 138

(1991), the Supreme Court construed Rule 32 to require a district

court, before sentencing, to notify the defendant of its intent to

depart upward and to identify the grounds for the possible

departure. Davenport argues that the district court failed to

comply with either of these requirements. Because he neither

objected to the lack of notice at sentencing nor moved for a

continuance, we review for plain error. See United States v.

Milton, 147 F.3d 414, 420 (5th Cir. 1998).

The notice requirement of Rule 32 may be met by information

contained in the PSR. See United States v. Doucette, 979 F.2d

1042, 1047 n.4 (5th Cir. 1992). Davenport’s PSR clearly stated

that the court “may want to consider an upward departure,” and we

find that each of the district court’s grounds for departure is

reflected in the report. First, the court stated that an upward

departure is “more than appropriate” because Davenport deliberately

targeted numerous elderly and vulnerable victims. These reasons

were expressly set forth in the PSR, which recommended an upward

3
departure because Davenport’s offense “involved the targeting of a

large number of vulnerable victims.” Next, the court found that

“the amount of dollar loss does not even begin to address the

losses and the suffering of the victims in the case and their

mental and their emotional strain.” This factor was also noted in

the PSR, which stated that an upward departure may be warranted

when the financial loss “underestimates the harm” due to “severe

emotional trauma.”

Finally, Davenport argues that he was “blindsided” by the use

of the injunction against his company as a ground for departure.

Specifically, the district court found that Davenport deserved an

increased sentence for “continuing to prey on numerous elderly

victims who lost their life savings by trusting [him] with their

assets” despite the injunction. Although the PSR does not

explicitly mention the injunction, the court’s reasoning parallels

the probation officer’s detailed discussion of United States v.

Smith, 133 F.3d 777 (10th Cir. 1997), which affirmed an upward

departure for a defendant who exhibited “an extra measure of

criminal depravity” and “particularly predatory” criminal conduct.

Similarly, the instant departure is partially based on Davenport’s

unrelenting predatory criminal activity in spite of the Texas Bar’s

efforts to stop him. Since the PSR’s commentary on Smith adverted

to comparable behavior, the district court sufficiently informed

Davenport that it was contemplating an upward departure due to his

continued predatory conduct. Moreover, even if Davenport were not

4
properly notified of the court’s final basis for departure, lack of

notice on that single factor does not constitute plain error

sufficient to affect the fairness, integrity or public reputation

of the proceedings. See Johnson v. United States, 520 U.S. 461,

466-67 (1997).

In addition to challenging notice, Davenport disputes the

propriety of the district court’s grounds for departing upward. A

district court may depart from a guideline sentencing range when it

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.” 18

U.S.C. § 3553(b). This court reviews a district court’s upward

departure for abuse of discretion. See United States v. Arce, 118

F.3d 335, 339 (5th Cir. 1997). There is no abuse of discretion if

the district court provides acceptable justification for the

departure and the degree of departure is reasonable. See United

States v. Nevels, 160 F.3d 226, 229-30 (5th Cir. 1998).

In the case at bar, Davenport claims that each of the district

court’s grounds for departure was already covered by the

guidelines. We disagree. The district court’s first two bases for

departure are Davenport’s targeting elderly victims and the large

number of victims. The PSR correctly noted that those factors were

not considered in the 1997 guidelines, which were used in

5
calculating Davenport’s sentence. Accordingly, we find Davenport’s

objection to these factors is without merit

The court also based its departure on the victims’ emotional

strain caused by their monetary losses. Although dollar loss is

specifically accounted for in § 2F1.1 of the Sentencing Guidelines,

the commentary to that section provides that where “the loss

determined under subsection (b)(1) does not fully capture the

harmfulness and seriousness of the conduct, an upward departure may

be warranted.” § 2F1.1, comment. (n.10). At Davenport’s

sentencing, the district court heard testimony from several victims

and found that “the amount of dollar loss does not even begin to

address the losses and the suffering of the victims in the case and

their mental and their emotional strain.” Since the guidelines

provide for an upward departure in precisely such a situation, we

do not find that the district court abused its discretion by basing

its departure on the victims’ financial devastation.

Finally, the district court departed due to Davenport’s

continued criminal activity in defiance of the injunction obtained

by the Texas State Bar. Although the guidelines provide a two-

level increase for disregarding an injunction, Davenport did more

than simply ignore a court order. He intentionally frustrated the

injunction’s purpose by changing the name of his business, and

through this contrivance was able to continue his scheme for more

than two years. We agree with the district court that the

6
guidelines did not adequately penalize Davenport’s calculated

criminal conduct.

Davenport next argues that the extent of the departure was

unreasonable. The district court added approximately 13 years to

Davenport’s seven-year guideline sentence. Although this is a

large increase, it is less than other departures that have been

affirmed by this court. See, e.g., United States v. Geiger, 891

F.2d 512 (5th Cir. 1989)(affirming sentence more than four times

greater than guideline maximum); United States v. Roberson, 872

F.2d 597, 606 (5th Cir. 1989)(three times); United States v.

Juarez-Ortega, 866 F.2d 747 (5th Cir. 1989)(more than four times).

Moreover, Davenport’s twenty-year sentence does not exceed the

statutory maximum. See United States v. Rogers, 917 F.2d 165, 169

(5th Cir. 1990)(“Because Rogers’ sentence does not exceed the

maximum sentence provided by statute, he may not challenge the

additional term the district court applied after its point of

departure.”). These considerations lead us to conclude that the

district court’s upward departure in sentencing Davenport was not

unreasonable.

Finally, Davenport argues that the government breached his

plea agreement by failing to recommend that he be sentenced within

the guideline range of 70 to 87 months. This argument is

foreclosed by United States v. Reeves, 255 F.3d 208, 210 (5th Cir.

2001), in which we held that the government did not breach a plea

7
agreement by remaining silent at the sentencing hearing when its

recommendation had been incorporated into the PSR. As in Reeves,

Davenport’s PSR includes the government’s stipulated range.

Furthermore, the plea agreement clearly stated that “[t]he sentence

in this case will be imposed by the Court,” not the government.

Accordingly, we do not find that the government breached the

agreement.

III.

For the foregoing reasons, Davenport’s sentence is AFFIRMED.