United States v. Heath J. Kellogg

593 F. App'x 971
CourtCourt of Appeals for the Eleventh Circuit
DecidedDecember 15, 2014
Docket14-11522
StatusUnpublished

This text of 593 F. App'x 971 (United States v. Heath J. Kellogg) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eleventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Heath J. Kellogg, 593 F. App'x 971 (11th Cir. 2014).

Opinion

PER CURIAM:

Heath Kellogg appeals his total sentence of 144 months of imprisonment after pleading guilty to several counterfeiting offenses. Kellogg challenges his sentence on three grounds, arguing that (1) the district court erred in applying certain enhancements when calculating his guideline range; (2) his sentence was substantively unreasonable; and (3) the court erred by imposing a $40,000 fine, despite the fact that the presentence investigation report (“PSR”) concluded that Kellogg had no ability to pay a fine. After careful consideration, we affirm Kellogg’s sentence of imprisonment but vacate the $40,000 fine and remand for further proceedings consistent with this opinion.

I.

Kellogg and Stacy Smith, a codefendant, ran a counterfeiting operation based in Atlanta, Georgia. Kellogg was a self-taught graphic designer who created the template for the counterfeit currency based on images that he downloaded from the Internet. Using the template, Kellogg and Smith printed and sold counterfeit notes to several “middlemen,” who, in turn, re-sold the bogus notes to others to use for purchasing goods and services. According to the PSR, a total of around $1.25 million in counterfeit notes were manufactured and passed into distribution in the national economy. After being tipped off by a woman who had been dating Smith, law enforcement conducted several controlled purchases of the counterfeit currency, ultimately leading to Kellogg’s arrest.

A federal grand jury indicted Kellogg on one count of conspiracy to produce and deal in counterfeit United States currency, in violation of 18 U.S.C. §§ 371, 471, and 473; two counts of counterfeiting United States currency, in violation of 18 U.S.C. § 471; and one count of dealing in counterfeit currency, in violation of 18 U.S.C. § 473. Kellogg pled guilty to all counts without a written agreement.

*973 In the PSR, the probation officer calculated a base offense level of 9, pursuant to United States Sentencing Guidelines Manual (“U.S.S.G.”) § 2B5.1(a). The probation officer then applied the following guidelines adjustments: (1) a sixteen-level increase under §§ 2B5.1(b)(l)(B) and 2Bl.l(b)(l)(I) 1 because the offenses involved a total loss of $1.25 million; (2) a two-level increase under § 2B5.1(b)(2) for possessing counterfeiting equipment; (3) a four-level increase under § 3Bl.l(a) on the ground that Kellogg was an organizer or leader of a criminal operation that involved five or more participants; and (4) a three-level reduction for acceptance of responsibility under § 3E1.1. With a resulting total offense level of 28 and a criminal history category of V, Kellogg’s advisory guideline range was' 130-162 months of imprisonment. The guideline range for a fine was $12,500-$125,000.

Notably, Kellogg’s financial condition was reviewed in the PSR. The PSR reflects that Kellogg had a negative net worth (-$6,000) and that his family’s monthly cash flow, including $568 in food stamps out of a total income of $1,368, was also negative (-$100). According to the PSR, “The defendant’s financial condition reflects that he does not have the ability to pay a fine. He would be a good candidate for community service work in lieu of a fine.”

Kellogg initially objected to the sixteen-level loss-amount increase under § 2Bl.l(b)(l)(I) and the four-level organizer-role enhancement under § 3Bl.l(a). At sentencing, however, Kellogg specifically withdrew these objections. Instead of pursuing the objections, Kellogg requested a sentence of 84 months’ imprisonment, below the guideline range, arguing that the 2001 amendments to the Sentencing Guidelines had unreasonably increased the penalty levels for counterfeiting offenses without empirical support, so the pre-amendment offense levels should apply. Kellogg further contended that his guideline range overstated his criminal history because the majority of his criminal-history points came from forgery convictions rather than “violent crimes or crimes against persons,” and he requested that the court downwardly depart to a criminal history category of III or IV.

The government requested a within-guidelines sentence of 144 months’ imprisonment and a fine of $125,000, or one-tenth of the total loss amount. Based on Kellogg’s withdrawal of his objections, the government indicated that it would not be presenting the evidence that it had originally planned to present. In objecting to the imposition of a fine, Kellogg highlighted that he had several children to care for and that the court had appointed counsel.

The district court sentenced Kellogg to a total term of 144 months’ imprisonment (60 months on Count One and 144 months each on Counts Two through Five, all concurrent). After imposing sentence, the court explained the reasons for the sentence as follows:

[T]he defendant is 37 years old, this is a sentence for his first federal, but his eighth criminal conviction. Almost all of the offenses prior are fraud related, span over twenty years. He’s been sentenced to prison before. He’s served approximately eight years total in custody for all his various criminal convictions, but he continues to engage in that kind of activity.
The Court realizes the troubled family background that he’s from, but the Court imposes the sentence having in *974 mind the various factors of 18 U.S.C. [§ 3553(a) ], particularly the need for rehabilitation of this defendant, the need for deterrence as to particularly this defendant. The Court is unsure that a sentence like this is a deterrence to others that would be inclined to get involved in this kind of activity.

Over Kellogg’s objection, the court also imposed a $40,000 fine, stating,

The fine[ ] imposed, while it might be a significant amount to the defendant, the Court feels like it’s more of a token amount that’s in lieu of restitution and only a fraction of the total cost of incarceration that the taxpayers are about to obligate themselves to — or the Court is about to obligate [them] to.

Kellogg now appeals.

II.

A.

Kellogg challenges the calculation of his guideline range. He first contends that the district court erred in applying the sixteen-level increase under U.S.S.G. § 2Bl.l(b)(l)(I). See U.S.S.G. § 2B5.1(b)(l)(B). The facts in the PSR did not support the asserted loss amount of § 1.25 million, he asserts, and the court failed to require the government to prove the amount at sentencing. The court also erred by applying a four-point increase for his role as a leader of a conspiracy involving five or more participants under § 3Bl.l(a), he argues, because the PSR did not contain facts that sufficiently supported the increase. Kellogg acknowledges that he withdrew his objections at sentencing but maintains that plain-error review applies.

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Bluebook (online)
593 F. App'x 971, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-heath-j-kellogg-ca11-2014.