United States v. Scherrer

444 F.3d 91, 2006 U.S. App. LEXIS 8973, 2006 WL 932550
CourtCourt of Appeals for the First Circuit
DecidedApril 12, 2006
Docket05-1705
StatusPublished
Cited by49 cases

This text of 444 F.3d 91 (United States v. Scherrer) is published on Counsel Stack Legal Research, covering Court of Appeals for the First 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. Scherrer, 444 F.3d 91, 2006 U.S. App. LEXIS 8973, 2006 WL 932550 (1st Cir. 2006).

Opinions

[92]*92OPINION EN BANC

BOUDIN, Chief Judge.

After pleading guilty to wire fraud, in violation of 18 U.S.C. § 1341 (2000), Phillip Scott Scherrer was sentenced to 96 months’ imprisonment, 33 months above the top of the guideline sentencing range. He now appeals, arguing primarily that his sentence was unreasonably high. To provide general guidance on this type of recurring issue, we heard this case en banc in the first instance. Scherrer also contests two conditions on his supervised release term, a matter with which we deal at the end of this opinion.

Scherrer was indicted in September 2004 and, on December 2, 2004, pled guilty to a superseding information charging two counts of wire fraud. Count I addressed a fraud that Scherrer worked against two friends, George and Brenda LaPoint. In substance, he induced them to give him $150,000, promising to purchase an annuity that would generate specific income. Instead, Scherrer used the money for his personal benefit and then with further deceptions fended off requests from the La-Points for income.

Count II covered a wider scheme in which Scherrer induced or attempted to induce over 40 individuals or couples— some of them his friends — to “invest” over $3 million, primarily through sales of stock in a software company. The sales and attempted sales were facilitated by false statements concerning the value of the stock and other particulars. Scherrer did not buy the stock but used the money to maintain' a luxurious lifestyle, including membership in a country club, expensive cars, gambling, frequent vacations, and lavish entertaining.

Given a combined loss (achieved and attempted) of just over $3,216,000 and more than 10 victims, in conjunction with a criminal history category I, the guideline range for Scherrer was 51 to 63 months. U.S.S.G. § 2Bl.l(a), (b)(1) & (2); ch. 5, pt. A (Sentencing Table). At the start of the sentencing hearing on April 26, 2005, the district court warned Scherrer that the court was not disposed to stay within the guidelines and the court offered to let Scherrer withdraw his plea. Scherrer declined to do so.

Seherrer’s counsel then sought a sentence at the bottom of the range, pointing to Schemer's full acceptance of responsibility, his cooperation, his history of bipolar disorder, other medical problems and the harshness of his initial confinement. He argued also that Scherrer would not commit future frauds because his divorce deprived him of resources to do so. Scherrer himself promised to write a book about the events and devote the royalties to restitution.

George LaPoint testified, describing the fraud against him and his wife, Schemer’s exploitation of his trust, and the consequences.- Letters from other victims described Schemer’s abuse of their trust. Government counsel, recommending a 63-month sentence at the top of the range, emphasized the number of victims, the age and vulnerability of many of them, the extent of Schemer’s deceit, and the devastating economic harm inflicted on various victims.

The district judge then sentenced Scherrer to 8 years, 33 months more than the top of the 63-month guideline maximum. In brief (we will return to the details), the court stressed Schemer’s exploitation of personal relationships, the harm caused, his misuse of his skills, his extravagant use of the funds stolen, and his history of dishonest conduct. The court said that the sentence was needed to deter such conduct and protect the public, reflected the particular circumstances of [93]*93the crime, and was no greater than necessary to achieve the goals of the statute. 18 U.S.C. § 3553(a).

On this appeal, Scherrer’s main attack is that the sentence was unreasonably high, double counting factors already considered in the guideline calculation. Scherrer also says that the district court failed to give due weight to or adequately discuss mitigating factors such as Scherrer’s bipolar disorder or chronic medical conditions or the low likelihood of recidivism, that it disregarded shorter sentences imposed on other defrauders, and that it ignored the so-called parsimony principle of 18 U.S.C. § 3553(a).

United States v. Booker, 543 U.S. 220, 260, 125 S.Ct. 738, 160 L.Ed.2d 621 (2005), contemplates such appeals from allegedly unreasonable sentences and our recent decision in United States v. Jiménez-Beltre, 440 F.3d 514, 518-519 (1st Cir.2006) (en banc), outlines our approach to such cases. Unless the district court has misconstrued the statute or the guidelines or has misstated the facts, our main concern is whether the court has adequately explained its reasons for varying or declining to vary from the guidelines and whether the result is within reasonable limits. Jiménez-Beltre, 440 F.3d at 518-519.

We start with the reasons given by the district court for sentencing above the guideline range. Scherrer does not directly attack aggravating circumstances relied on by the court, focusing instead on supposed mitigating factors. But the reasonableness of the substantial increase over the guideline maximum can scarcely be judged without a better understanding of what lies behind the judge’s decision. This understanding is also pertinent to the charge of double counting made by Scherrer.

First, the present offenses were not Scherrer’s first involvement in fraudulent activities. In 1980, he was convicted for the fraudulent sale of sham hospital bonds in Michigan and was disbarred as a result. He also settled a civil case against him in North Carolina, which accused him of fraudulently obtaining a construction loan and using the funds for other purposes. In actions brought to enforce the settlement agreement, on which Scherrer had defaulted, he was twice held in contempt and briefly incarcerated for filing false or unsupported financial affidavits.

Nor does the fact that there were only two counts in the present case fully reflect Scherrer’s career of fraud. Although count II focused on the stock of a single company, effectively the count embraced a whole series of frauds against different persons. Although the loss calculation aggregates these frauds, it does not fully reflect the extent to which Scherrer — taking into account his earlier misbehavior — • had become a serial criminal specializing in fraud. It was happenstance that he used the same company stock for successive swindles.

The district court was especially disturbed by Scherrer’s exploitation of trust. Scherrer presented himself as a successful professional and a personally sympathetic figure (for example, he spoke at the memorial service for the LaPoints’ deceased son) and then exploited his personal connections with various of the victims to defraud them. The district court also stressed the age of some of the victims, their personal need, and the economic consequences inflicted by the frauds, contrasted with Scherrer’s purchase of luxuries for himself.

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Bluebook (online)
444 F.3d 91, 2006 U.S. App. LEXIS 8973, 2006 WL 932550, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-scherrer-ca1-2006.