United States v. Marcel Walton

• Court: Court of Appeals for the Seventh Circuit
• Decided: October 25, 2018
• Docket: 17-2984
• Status: Published

Opinion

In the

United States Court of Appeals For the Seventh Circuit ____________________ No. 17‐2984 UNITED STATES OF AMERICA, Plaintiff‐Appellee,

v.

MARCEL A. WALTON, Defendant‐Appellant. ____________________

Appeal from the United States District Court for the Northern District of Illinois, Eastern Division No. 15‐cr‐723 — Thomas M. Durkin, Judge. ____________________

ARGUED OCTOBER 2, 2018 — DECIDED OCTOBER 25, 2018 ____________________

Before BAUER, KANNE, and SCUDDER, Circuit Judges. PER CURIAM. Marcel Walton, a “Grand Sheik” of the Moor‐ ish Science Temple of America in Chicago, stole more than $3 million from the Internal Revenue Service (“IRS”) by filing and assisting others in filing fraudulent tax returns. He pled guilty to mail fraud, see 18 U.S.C. § 1341, and was sentenced to 68 months’ imprisonment—below the advisory guidelines 2 No. 17‐2984

range. On appeal, Walton asserts that the district court vio‐ lated his due‐process rights by relying on inaccurate infor‐ mation in determining the appropriate sentence. Because Walton does not show that any information was false, nor that the district court relied on any inaccuracies, we affirm. I. BACKGROUND The Moorish Temple is a religious organization that be‐ lieves Moors are the rightful owners of North America. As a “Grand Sheik,” Walton preached that the United States gov‐ ernment occupies Moorish land and now owes its members payment, which they could acquire by filing specialized tax returns. Many people filed fraudulent tax returns at Walton’s urging. He took a percentage of the refunds some of his fol‐ lowers received. Walton pled guilty to mail fraud. At the close of the change‐of‐plea hearing, the judge asked the government to provide information about defendants who had been prose‐ cuted for similar schemes—specifically, the actual and in‐ tended‐loss amounts and the ultimate sentences. The govern‐ ment’s submission (included as an attachment to the Presen‐ tence Investigation Report (“PSR”) and updated via email be‐ fore sentencing) shows that the other defendants received sentences ranging from probation to 28 months’ imprison‐ ment. Meanwhile, the probation officer calculated a guide‐ lines imprisonment range of 70 to 87 months for Walton. Wal‐ ton had a criminal history category of I and the offense level was set at 27, based on an agreed‐upon intended‐loss amount of $16,391,161. At the sentencing hearing, neither party contested the guidelines calculation, including the use of $16 million as the No. 17‐2984 3

intended‐loss amount,1 but they disputed the appropriate sentence. The government argued that Walton’s leadership role—specifically, instructing at least nine people to prepare, or preparing for them, phony tax returns—distinguished him from the defendants listed in the chart and warranted a higher sentence within the guidelines range. The government also emphasized that in some cases the victims were “vulnerable” because there were elderly, homeless, destitute, or caring for sick relatives. Walton asked for a 12‐month sentence, based in part on his personal circumstances, including his age, his history of employment, his lack of criminal history, and his ready guilty plea. And although he admitted that “he helped others do it,” he emphasized that he did not invent the scheme. He further argued that of all the defendants on the government’s chart— which his counsel deemed “helpful”—“very, very, very few people have ever been sentenced within the guidelines.” Moreover, Walton said, a higher sentence would result in un‐ warranted sentencing disparities because he learned about the scheme from a defendant in another case, who had re‐ ceived a 24‐month sentence. The district court imposed a 68‐month sentence. The judge emphasized Walton’s exploitation of vulnerable followers,

1 This includes the losses directly attributable to Walton and to nine

named followers interviewed by federal agents who reported acting on his instructions. At least five of them—those who successfully obtained tax refunds—were also prosecuted. The government maintained at sen‐ tencing that the scheme involved an intended loss that was much greater than $16 million and involved more than nine people, but elected to rely upon the intended losses attributable to the people who reported that Wal‐ ton had recruited them. 4 No. 17‐2984

some of whom were elderly or homeless, and many of whom believed his religious rhetoric and had not committed crimes before meeting him. The judge also confirmed that no one on the government’s chart received a leader‐organizer enhance‐ ment, as Walton had. The “most aggravating fact” was that Walton was responsible for “law‐abiding people who got into this and ended up … going to jail” just so he could get a “piece of the action.” Regarding the need to avoid unwarranted sen‐ tencing disparities, the district court explained that the “key distinguishing feature” was that the others, with two possible exceptions, “weren’t leaders,” whereas many people, some of whom were prosecuted, filed phony returns “because of Mr. Walton.” To the defendant’s vague protest that he “didn’t neces‐ sarily have access to the factual backgrounds concerning all similar cases … including the ones on [the government’s] chart,” the judge responded that there was no dispute that this defendant, Walton, lured at least nine people into crimi‐ nal activity. Further, considering potential sentencing dispar‐ ities, the district judge disregarded the chart as useless, be‐ cause the intended losses for all the listed defendants were not comparable. Finally, after announcing the sentence, the judge asked Walton if he wished to address “anything else,” and Walton said he did not. II. ANALYSIS On appeal, Walton argues that the district court erred at sentencing by relying on untested representations about Wal‐ ton’s leadership role and uncorroborated sentencing data about other tax‐fraud prosecutions. If a defendant has pre‐ served his or her objection, we review procedural sentencing errors de novo. United States v. Young, 863 F.3d 685, 688 (7th No. 17‐2984 5

Cir. 2017). But Walton’s conduct at sentencing shows a forfei‐ ture: he relied on some of the information he now challenges and only vaguely protested that he “didn’t necessarily have access to the factual backgrounds concerning all similar cases,” after the judge stated that Walton’s leader‐status dis‐ tinguished him from those prosecuted in similar schemes. And Walton failed to challenge at all the government’s state‐ ments regarding the vulnerability of his co‐schemers. There‐ fore, we review for plain error. See United States v. Butler, 777 F.3d 382, 386–87 (7th Cir. 2015). The Fifth Amendment guarantees the right to be sen‐ tenced based on accurate information. See United States v. Tucker, 404 U.S. 443, 448–49 (1972); United States v. Adams, 879 F.3d 826, 829 (7th Cir. 2018). To establish a violation, a de‐ fendant must show both that the information is false and that the court relied on it. United States v. Musgraves, 831 F.3d 454, 469 (7th Cir. 2016). Walton can show neither, and so there is no error, let alone one that is “plain.” Walton begins by listing four “unproven, disputed, and unsupported facts”: (1) he preyed on vulnerable followers; (2) he was a “leader” in contrast to “all others” who have been prosecuted for similar crimes and that he led other people into his scheme; (3) he profited from a 10% “tithe” from followers who got unwarranted tax refunds; and (4) the $16 million in‐ tended loss far exceeded the stakes in other, similar cases. Walton says that he has “since verified” that many of the facts the government stated were “false and unreliable,” by exam‐ ining public records in other prosecutions. The remainder of these facts he dismisses as “unsupported.” 6 No. 17‐2984

It appears that, in part, Walton argues that these state‐ ments are “unsupported” because the “record on appeal” ex‐ cludes the documents before the district court that could have supported them, such as the parties’ sentencing memoranda, the probation officer’s sentencing recommendation, and the government’s version. But there are no documents in the ap‐ pellate record that should not be there. And even if the record on appeal did exclude the documents that Walton disputes, the uncontested record provided a sufficient basis for the dis‐ trict court to make the findings Walton challenges, so this ar‐ gument lacks merit. Walton contends first that the government mischaracter‐ ized information related to his leadership role in persuading others to join the scheme. He asserts that the district court could not rely upon the existence of the purported followers who received, or tried to obtain, fraudulent refunds at his urg‐ ing, because none of them testified, and the record did not contain their written statements or other evidence. But, as Walton admits, the Rules of Evidence do not apply at sentenc‐ ing hearings. As long as information “has sufficient indicia of reliability to support its probable accuracy,” United States v. Sunmola, 887 F.3d 830, 839 (7th Cir. 2018) (quoting United States v. Vivit, 214 F.3d 908, 916 (7th Cir. 2000)), it does not require full corroboration, United States v. Sandidge, 784 F.3d 1055, 1062 (7th Cir. 2015). Here, uncontested documents like the plea agreement and the PSR, which the district court adopted after allowing Wal‐ ton the opportunity to object, support the district judge’s find‐ ing that Walton led others into the scheme. To support its ar‐ gument that Walton was a leader, based upon his enlistment No. 17‐2984 7

of followers, the government said: “those were the individu‐ als where we’d had law enforcement agents go out, get those statements, and/or put these individuals in grand jury.” Also, the PSR proffered that “the IRS interviewed … individuals and those individuals identified the defendant as the one who prepared, or caused the preparation of their false 1041 forms.” Similarly, to support the existence of a 10% kickback to Walton, which the government called a “tithe,” the govern‐ ment pointed to the plea agreement, in which Walton agreed that “various individuals such as temple member Christopher Mietus, who filed three tax returns by Mr. Walton, received $900,000, and then gave Mr. Walton $90,000.” The PSR also states that Dawn Shannon “received a $300,000 refund check, of which she gave $35,000 … to the defendant,” and that Ronald Taylor “received a $300,000 refund check” and “gave $35,000 to the defendant and another $4,400 to the … Temple, which were both deposited by the defendant.” Walton does nothing to challenge the accuracy of this in‐ formation. In rebuttal, he offers only his own vague specula‐ tion that other leaders must have been prosecuted: he reasons that other ring leaders must be listed on the sentencing chart that the government provided simply by virtue of the sheer number of false tax returns submitted as part of similar schemes. Such naked assertions do not meet Walton’s burden to show that the district court relied on inaccurate facts. See United States v. Musa, 946 F.2d 1297, 1307 (7th Cir. 1991). Furthermore, Walton did not contest the leader/organizer enhancement, and the judge focused specifically on the fol‐ lowers whom Walton himself led into the scheme. When the judge relies on the PSR, “[t]he defendant must do more than merely deny the facts in the report; instead, he must provide 8 No. 17‐2984

some evidence calling into question the accuracy or reliability of the information in the PSR.” United States v. Harmon, 721 F.3d 877, 889 (7th Cir. 2013). Here, Walton does not show any inaccuracy, and he has not demonstrated that the PSR and the factual basis in the plea agreement are unreliable; he simply asks for more proof than the government is required to give. The district court properly considered the documents under‐ lying the government’s assertions, see Adams, 879 F.3d at 829, and they support the truth of the information provided at sen‐ tencing. Walton next takes issue with what he deems the unsup‐ ported proposition that the $16 million intended loss at‐ tributed to him (without dispute) far exceeds what the de‐ fendants in other cases were held responsible for. Again, he did not complain about the comparison chart before or at the sentencing hearing, at which he deemed it “helpful” in light of the government’s superior ability to round up the infor‐ mation. Moreover, Walton’s post‐sentencing research does nothing to support his point that the district court used inac‐ curate information: he lists certain defendants as to whom he thinks the intended loss amounts were understated, but even the non‐inflated numbers he posits do not approach the $16 million figure to which he admitted. In any event, when it came to the intended‐loss figures, the district court ultimately rejected the chart’s relevance to Walton’s sentencing, because the government had not identified a defendant similarly situ‐ ated to Walton in that regard. The court looked at Walton in‐ dividually. Next, whether the district court relied on statements about Walton’s co‐schemers’ vulnerability is a closer call, but even if it did, the court would not have violated Walton’s due‐ No. 17‐2984 9

process rights by doing so. First, the record shows that Walton used his religious clout to persuade his followers to commit crimes: he recruited through the Temple and justified the fraud with reference to the federal government’s debt to the Moors. The district court, therefore, reasonably inferred that Walton leveraged his authority and followers’ beliefs. See United States v. Anaya, 32 F.3d 308, 313 (7th Cir. 1994). And though the government said for the first time at sen‐ tencing that some of Walton’s co‐schemers were elderly or homeless, it had argued before the hearing, in its Sentencing Memorandum, that he preyed on his followers’ vulnerabili‐ ties. Furthermore, the PSR named several of Walton’s follow‐ ers, so he could have anticipated the government’s argu‐ ments. And yet again, Walton does not show that some of the followers he recruited were not vulnerable, so he cannot demonstrate that this information is untrue. He cannot baldly state the information is unreliable without providing a reason to call it into question. III. CONCLUSION Because Walton’s due‐process claim is meritless, the dis‐ trict court’s judgment is AFFIRMED.