Petition for Writ of Certiorari — Cruce v. United States
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No. = 1: OCT 19 192
OFFICE OF THE CLERK
bene
In The
Supreme Court of the United States
October Term, 1992
a
IAMES R. CRUCE,
)
FTF TINVW EP
Petitioner,
UNITED STATES OF AMERICA,
Respondent
a —— @-—---- Ee
Petition For A Writ Of Certiorari
To The United States Court Of Appeals
For The Tenth Circuit
+
PETITION FOR A WRIT OF CERTIORARI
- .
Bruce C. Houpexk
James, MILLERT, HOUDEK,
Tyrt & SOMMERS
500 Scarritt Building
818 Grand Avenue
Kansas City, MO 64106
Phone: (816) 842-2575
FAX: (816) 842-1135
Attorneys for Petitioner
James R. Cruce.
COCKLE LAW BRIEF PRINTING (CO., (800) 225 6964
OR CALL COLLECT (402) 342-2831
TA ee ae ee LOR UP aT ae, AE OP ON Ak
- = - —. ~ omen ~ - = e
QUESTIONS PRESENTED
I.
IMPOSITION OF SENTENCE PURSUANT TO MORE
PUNITIVE GUIDELINE AMENDMENTS ADOPTED
AFTER THE DEFENDANT’S OFFENSES HAD BEEN
COMMITTED VIOLATE THE EX POST FACTO CLAUSE.
II.
THE COURT ERRED IN ACCEPTING DEFENDANT
CRUCE’S PLEA TO THE CONSPIRACY COUNT AND
ERRED IN ITS REFUSAL TO PERMIT DEFENDANT
CRUCE TO WITHDRAW HIS PLEA TO THAT COUNT
AS A SUFFICIENT FACTUAL BASIS WAS NOT MADE
TO SUPPORT THE PLEA AS CONSTRUED BY THE
COURT IN VIOLATION OF RULE 11, F.R.Cr.P., AND
THE DUE PROCESS CLAUSE.
ITT.
THE COURT ERRED IN FAILING TO SET ASIDE THE
SENTENCE IMPOSED AND GRANT RECUSAL WHEN
IT WAS DISCLOSED THAT THE SENTENCING COURT
RECEIVED AND CONSIDERED PREJUDICIAL EX
PARTE COMMUNICATIONS FROM THE F.D.I.C. AND
R.T.C. PRIOR TO SENTENCE, AND THE REMAND FOR
RESENTENCING ORDERED BY THE TENTH CIRCUIT
COURT OF APPEALS SHOULD BE HEARD BY A DIF-
FERENT DISTRICT JUDGE.
ii
PARTIES TO THE PROCEEDING
Parties to the proceeding are the United States of
America, petitioner James R. Cruce, and his codefendant,
Thomas A. Burger. It is the understanding of counsel that
Thomas A. Burger, codefendant, will be filing a Petition
for a Writ of Certiorari in the near future.
PU VIP OL Pave uF gh) Ca eB AP GH APG paid os
ili
TABLE OF CONTENTS
Page
0 S|) Eee ee i
Parties to the Proceeding ..............-.+--.++-+>- ii
SECT ECT CUTT CRETE RTE iii
Table of Authorities, Constitutional Provisions, Stat-
REEL TEP EE TURTLE TEE CTE iv
Petition for a Writ of Certiorari.................... 1
Opinions Below ...............--. eee eee eee eee ees 1
OT eee ee eee eee eee ee ee 2
Constitutional and Statutory Provisions Involved... 3
Bimbemient OF Whe Case .... 2... cece cee ewes 4
Argument - Reasons for Granting the Writ ........ 15
ee Cee yes kus o.bas oh AREA ASA aR Cs 24
Index to Appendix .............. cece e eee e eee, App. i
| eee eer App. 1
pnitbibiss da » “his ee SA ee Oe
iV
TABLE OF AUTHORITIES
Page
CASES
Barker v. United States, 579 F.2d 1219 (10th Cir.
oT errr en 20
Cortese v. United States, 782 F.2d 845 (9th Cir. 1986) .... 24
Haller v. Robbins, 409 F.2d 857 (ist Cir. 1969)......-. 24
Miller v. Florida, 482 U.S. 423 (1987)............-. 16, 19
Price Bros. Co. v. Philadelphia Gear Corp., 629 F.2d
444 (6th Cir. 1980). ... 2.2.20 eee ccc ccc creer cence 24
United States v. Bakker, 925 F.2d 728 (4th Cir. 1991) .... 18
United States v. Bloom, 945 F.2d 14 (2nd Cir. 1991) .18, 19
United States v. Furst, 886 F.2d 558 (3rd Cir. 1989),
cert. denied, 110 S.Ct. 878 (1990)............---- 23, 24
United States v. Rhodes, 913 F.2d 839 (10th Cir.
1990), cert. denied, 111 S.Ct. 1079.......-..... 0+ eee 20
United States v. Rosener, 485 F.2d 1213 (2nd Cir.
| ener enrnn errr reerrry 24
United States v. Sciuto, 531 F.2d 842 (7th Cir. 1976) .... 24
United States v. Story, 891 F.2d 988 (2nd Cir. 1989) ....18
United States v. Underwood, 938 F.2d 1086 (10th Cir.
United States v. Wolfson, 634 F.2d 1217 (9th Cir.
UMN cx exis Ae ha cue ee ee 23, 24
Webbe v. McGhie Land Title Co., 549 F.2d 1358 (10th
‘SOR, gp Cp ETC TEP STOTT Pee Oy cr eras ee Tree 23
TABLE OF AUTHORITIES - Continued
Page
CONSTITUTIONAL PROVISIONS
United States Constitution, Article 1, Section 9,
| PO ee Ie ee or tn HIN Meee ones ne 3
United States Constitution, Amendment V............ 3
STATUTES
SG Ee. OR vi saveceene bate vecuaee eens 2, 4
Re Whee Gk WOE os + kn eed Sadabeee ber eee 5
BO Ey ck. TO SOG is ck ae Pelle Gare Pe
SO UA. TOR. A kon ts eucau dee seekers eee 23
20 CLA... BOE. Tee not indcecbecncge eee eee 3
CRIMINAL RULES
Poaige 2%, Fae oso ss cen ae one Ounces awed 19, 20, 21
eee DEG Te oe ea cn een ee ee Oe ee 3
Cae SE, Pe es ook a ede van howe sie eee eee 21
POND: Sates WC 6 ove kak bday eee soe eee 20, 21
SUPREME CourRT RULES
U.S. Supreme Court Rules 13.1, 13.4, 29.2 and 30.1 ...2, 3
TENTH Circuit RULES
Jerth Ciecwi Bude. 363. oi one 5cs eee 2
Ne
oe tp) oil Act Del oi hae hei abies Mie De nd
PETRI VE Ree 5 i Ph VON TP AA GP Vt PE Pe OT YO
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a
In The
Supreme Court of the United States
October Term, 1992
¢
JAMES R. CRUCE,
Petitioner,
UNITED STATES OF AMERICA,
Respondent.
*
Petition For A Writ Of Certiorari
To The United States Court Of Appeals
For The Tenth Circuit
e
PETITION FOR A WRIT OF CERTIORARI
¢
The petitioner, James R. Cruce, respectfully requests
that this Court issue its Writ of Certiorari to review the
Order and Judgment of the United States Court of
Appeals for the Tenth Circuit entered by it in this pro-
ceeding on June 11, 1992.
OPINIONS BELOW
The Order and Judgment of the United States Court
of Appeals for the Tenth Circuit is not reported, pursuant
1
to Tenth Circuit Rule 36.3. A copy of that Order and
Judgment appeers in the Appendix.
By Order dated July 21, 1992, the Tenth Circuit
denied James R. Cruce’s Motion for Rehearing.
+
JURISDICTION
Petitioner Cruce entered a plea of guilty to four
counts of an indictment alleging violations of 18 U.S.C.
Secs. 371 and 1344 before the United States District Court
for the District of Kansas, Senior United States District
Judge Dale E. Saffels. Defendant Cruce was sentenced,
inter alia, to a term of 168 months (14 years) imprison-
ment and ordered to immediately pay eight million dol-
lars restitution. A timely notice of appeal was filed to the
United States Court of Appeals for the Tenth Circuit. By
its Order and Judgment entered June 11, 1992, the Tenth
Circuit affirmed Cruce’s conviction and sentence, with
the exception that the case was remanded to the district
court for resentencing to permit defendant Cruce to com-
ment upon ex parte letters from the Chairman of the FDIC
and counsel for the Resolution Trust Corporation consid-
ered by the Court but not disclosed to defendant Cruce
prior to sentencing. With that exception, the Court of
Appeals affirmed Cruce’s conviction and the calculation
and imposition of his sentence under the Guidelines.
A timely petition for rehearing was denied by the
Tenth Circuit on July 21, 1992. In compliance with Rules
13.1, 13.4, 29.2 and 30.1, U.S. Supreme Court Rules, this
Petition for a Writ of Certiorari was filed in this Court
within ninety days of the date on which the United States
Court of Appeals for the Tenth Circuit denied petitioner
Cruce’s petition for rehearing. The jurisdiction of this
Court is invoked pursuant to 28 U.S.C. Sec. 1254(1) and
Rule 13.1, U.S.Sup.Ct.R.
+
CONSTITUTIONAL AND
STATUTORY PROVISIONS INVOLVED
1. United States Constitution, Article 1, Section 9, Clause
3.
Bills of Attainder and Ex Post Facto Laws.
“No Bill of Attainder or ex post facto Law shall
be passed.”
2. Amendment V to the United States Constitution:
“No person shall be held to answer for a
capital, or otherwise infamous crime, unless on
a presentment or indictment of a Grand Jury,
except in cases arising in the land or naval
forces, or in the Militia, when in actual service
in time of War or public danger; nor shall any
person be subject for the same offence to be
twice put in jeopardy of life or limb, nor shall be
compelled in any criminal case to be a witness
against himself, nor be deprived of life, liberty,
or property, without due process of law; nor
shall private property be taken for public use
without just compensation.”
3. Rule 11(f), F.R.Cr.P.
“(f) Determining Accuracy of Plea.
Notwithstanding the acceptance of a plea of
guilty, the court should not enter a judgment
upon such plea without making such inquiry as
shall satisfy it that there is a factual basis for the
plea.”
STATEMENT OF THE CASE
James R. Cruce pled guilty to one count of conspiracy
and three counts of bank fraud in the United States
District Court for the District of Kansas. The district court
at the time of sentencing refused to advise the defendant
and his counsel of its factual findings on disputed sen-
tencing issues prior to imposition of sentence and
imposed a sentence using Guideline amendments whose
effective date post-dated his offense and which quadru-
pled his sentence.
The district court also received and considered ex
parte communications from the Chairman of the FDIC and
counsel for the Resolution Trust Corporation which were
prejudicial to defendant Cruce. He was sentenced to 168
months’ custody and ordered to immediately pay eight
million dollars’ restitution. Cruce appealed to the Tenth
Circuit which affirmed the conviction and the district
court's method of arriving at the sentence, but remanded
to the district court to permit Cruce to “comment” on the
ex parte communications prior to reimposition of sen-
tence. The Tenth Circuit refused to direct that the sen-
tence be imposed by a different district judge.
On January 10, 1991, defendant/appellant James R
Cruce and six other defendants were indicted by the
United States Grand Jury for the District of Kansas. The
indictment charged in Count 1 conspiracy to violate the
laws of the United States, 18 U.S.C. Section 371, that is, to
JT
commit fraud against a federally-insured institution in
violation of 18 U.S.C. Section 1344 and to make false
statements to an agency of the United States in violation
of 18 U.S.C. Section 1001. Counts 2 through 24 alleged
substantive violations of the Bank Fraud Statute and
Count 25 of the indictment alleged a substantive violation
of the Fraudulent Statement Statute. All defendants were
charged in all counts.
The indictment alleged that defendants Cruce and
'homas D. Dunn, Jr. were the owners, through a holding
company, of Peoples Heritage Federal Savings and Loan
Association of Salina, Kansas (hereinafter “Peoples”).
Cruce was the president of Peoples and Dunn was the
chairman of the board. Also serving on the board was
l'homas A. Burger, who was also the chief lending officer.
The indictment, in paragraph 17, alleged:
‘4-7
17. Commencing at least as early as 1984, the
exact date being unknown to the grand
jury, and continuing until the return of
this indictment .
that the defendants conspired to defraud the United
States by execution of a scheme to defraud Peoples, a
federally-insured financial institution, and to make false
statements to an agency of the United States.
The object of the conspiracy was alleged in para-
graph 18 to be
5
“18. The object of the conspiracy was to ille-
gally obtain money, which had been
entrusted to the custody and control of
Peoples, in the form of savings deposits
and other credits and securities given over
to the safekeeping of defendants JAMES
R. CRUCE, THOMAS D. DUNN, JR., and
THOMAS A. BURGER and the other man-
agement of Peoples, and to use the money
for the personal enrichment of the defen-
dants, who used the money to purchase
real estate in Texas, for speculation, devel-
opment and/or resale, to purchase stock
in AmeriWest Financial Corporation and
to meet obligations of various investment
efforts.”
In paragraph 19 of the indictment, the manner and
means of the conspiracy alleged that defendants Cruce,
Dunn and Burger formed joint ventures with major bor-
rowers of Peoples, exploiting their positions at Peoples by
approving loans to the joint ventures in which they had
an interest.
The indictment alleged that the financial interests of
Burger, Cruce and Dunn were concealed in the joint ven-
tures from the board and management of Peoples and
regulatory personnel.
Finally, the conspiracy count alleged that the defen-
dants committed overt acts which included the substan-
tive offenses alleged in Counts 2 through 25, which were
incorporated by reference. The conspiracy charge did not
allege any overt act other than the substantive offenses
charged in the indictment.
The substantive offenses and thus all overt acts were
alleged to have occurred between April 26, 1985 (para-
graph 48) and November 21, 1988 (paragraph 152). No
date or action is referenced in the indictment subsequent
to November 21, 1988.
On April 17, 1991, defendant Cruce with his then
counsel, Mark Bennett, Jr., appeared before the District
Court and announced that a plea agreernent had been
agreed to with the Government, providing, inter alia, that
defendant Cruce would plead guilty to Counts 1, 18, 19
and 20. In return for those pleas, the Government agreed
to dismiss all remaining counts of the indictment, dismiss
all counts of a companion indictment, bring no additional
charges in the district against Cruce concerning his own-
ership or transactions with Peoples, request that any sen-
tence which might be imposed arising from his activities
at Peoples in any other jurisdiction be run concurrent
with the sentence imposed in this case. The plea agree-
ment also provided that the Government would ” .. . not
advocate a specific sentence, fine or imprisonment.”
As is the practice in the District of Kansas, defendant
Cruce and his counsel executed and filed a Petition to
Enter Plea of Guilty with the District Court. As the
required statement of factual basis, Cruce, in his Petition
to Enter Plea of Guilty, stated in answer to Question 5:
“During the time period from 1984 through
1987, I entered into an agreement with other
individuals, including Christopher Hashioka
and James Bosler, whereby we set up an
arrangement to purchase AmeriWest stock as it
became available in large blocks on the open
market in an attempt to keep the price of that
stock up. At the time we entered into the agree-
ment, | owned many thousands of shares of the
stock and since the stock price was going down
it was to my benefit if | could keep the price
from going down further. The agreement that
we entered into involved the loaning of
$5,000,000 to James L. Bosler by Peoples Heri-
tage Savings and Loan and then Mr. Bosler was
to loan the money to third parties so that they
could acquire the stock on the open market and
keep the price up.”
During the plea proceeding, the District Court read
the above quoted paragraph, paraphrasing it slightly, and
asked Cruce whether he understood it and if he did that.
Cruce, while under oath, answered yes to both questions.
The Court then inquired of Government counsel concern-
ing evidence which he could adduce to prove the defen-
dant guilty. Counsel thereafter made a detailed statement
of the facts of the offenses, referring to activities in
November, 1987, December, 1987, and July, 1988.
Defendant Cruce then acknowledged that he believed
the Government had evidence to prove him guilty of the
four counts to which he had tendered a plea of guilty.
The District Court then advised defendant Cruce that
on November 1, 1987, a new sentencing law went into
effect in the United States.
The District Court explained features of the Sentenc-
ing Guidelines to defendant Cruce in some detail, advis-
ing him that parole was abolished; that all conduct would
be taken into account even though he pled guilty to less
than all counts; that lies to the probation officer, commis-
sion of an offense while on probation, commission of an
offense within two years after release from prison, receipt
of a substantial portion of his income from criminal con-
duct, crimes of violence, and drug trafficking offenses
could all increase his sentence; and that probation was
not available as an option for most offenses. Cruce was
also advised that if he provided substantial assistance,
the Court could impose a sentence below the recom-
mended Guideline range.
Cruce was never advised that the 1989 and 1990
amendments to the Guidelines might apply. He had the
right to withdraw his plea to Count 1 if the maximum
sentence on that count was determined to be more than
five years.
A presentence investigation was ordered, the Court
accepted Cruce’s plea of guilty to Counts 1, 18, 19 and 20,
and he was adjudged guilty of those offenses.
The probation office prepared an initial presentence
report which calculated defendant Cruce’s total offense
level at 34, or a Guideline sentencing range of 151 months
to 188 months. In making that calculation, the probation
office applied amendments to the 1987 Guidelines that
became effective on November 1, 1989 and November 1,
1990.
The presentence report recommended that the
grouped base level of 6 U.S.S.G. Section 2F1.1(a), be
enhanced 18 levels because of losses in excess of eighty
million dollars. The effective date of that amendment was
November 1, 1989. Prior to that date the maximum
amount on the loss table under Section 2F1.1(b)(1)(1) was,
over five million dollars, add 11 levels. Thus, by applica-
tion of the Guideline amendment effective November 1,
1989, 7 Levels were added to defendant Cruce’s base
level.
The presentence report, paragraph 111, also recom-
mended the assessment of a 4-level upward adjustment
10
pursuant to Section 2F1!.1(b)(6) for an offense which sub-
stantially jeopardized the safety and soundness of a
financial institution. That subdivision was added to the
Guidelines by the November 1, 1990 amendments and
added a 4-level increase to defendant’s base offense level.
Prior to November 1, 1990, such an adjustment had not
been in existence.
The presentence report also proposed that an
increase of 2 levels be assessed pursuant to Section 3B1.3
for abuse of a position of trust of special skill. The 1987
Guidelines provided that the 3B1.3 upward adjustment
could not be employed in addition to the upward adjust-
ment provided for in Section 3B1.3 for an organizer or
leader of criminal activity. As the presentence report pro-
posed a 4-level upward adjustment pursuant to Section
3B1.1, under the Guidelines in effect on November 1,
1987, the additional 2-level upward adjustment proposed
in the presentence report could not have been assessed.
The effect therefore of the 1989 and 1990 amendments
caused an increase in the defendant’s offense level from
level 21 (37 to 46 months) to level 34 (151 to 188 months),
or more than four times.
The initial draft of the presentence report was pre-
pared and dated June 19, 1991.
On July 10, 1991, counsel for defendant Cruce deliv-
ered written objections to the initial draft of the presen-
tence report. This letter articulated the defendant's
objections to application of the 1989 and 1990 Guideline
amendments.
1]
Counsel for defendant Cruce, recognizing the devas-
tating effect on the sentence proposed to be imposed,
filed a conditional or alternative motion to withdraw his
plea of guilty to Count 1 (the conspiracy count) or to have
the Court determine that the November 1, 1989 and
November 1, 1990 Guideline amendments did not apply
and that the sentence should be governed by the Guide-
lines in effect on November 1, 1987.
On July 31, 1991, the District Court entered its Mem-
orandum and Order finding that the conspiracy contin-
ued in existence beyond the effective dates of the
amended Guidelines and that defendant Cruce had not
shown that he withdrew from the conspiracy in 1988 and
directed that the Guidelines as amended in November,
1989 and November, 1990 would be applicable to defen-
dant Cruce. The Court also denied defendant Cruce’s
motion to withdraw his plea of guilty as to Count 1 of the
indictment.
The letter of counsel for defendant Cruce to the pro-
bation officer detailed objections and suggested clarifica-
tions to 62 of the 220 numbered paragraphs of the initial
draft of the presentence report. By those objections Cruce
denied many of the factual allegations of the report,
particularly those relating to counts of the indictment to
which he did not plead guilty, the charges contained in
the companion indictment which was to be dismissed,
and the claimed losses for unindicted acts. Cruce speci-
fically objected to the report’s conclusion concerning the
claimed total loss due to Cruce’s involvement and the
losses to taxpayers from Peoples Heritage as a whole.
12
By letter dated July 24, 1991, the Government replied
to defendant Cruce’s objections.
Thereafter, the probation office prepared a revised
presentence report which included some modifications
suggested by defense counsel and the Government and
then summarized each of the defendant’s objections,
summarized the Government’s response to that objection,
stated the probation officer’s response to each objection,
and provided blank space for a written court finding
concerning that objection.
The court’s specific findings concerning the defen-
dant’s objections to the facts stated in the presentence
report were not stated, entered or made known to the
defendant or his counsel at the time of sentencing. The
court refused to make findings on the ” . . . disagreed
facts... . ” The court stated:
“ ... [I]t takes more time than | want to give to
read our findings. I have it prepared and they
will be endorsed on the addendum and you will
be supplied with a copy of our findings but |
didn’t have in mind to read them into the record
at this time.”
The court imposed a sentence including aggregated
confinement of 168 months which included consecutive
sentences on Counts 18 and 19 and restitution in the
amount of eight million dollars through the Clerk of the
Court to the Resolution Trust Corporation. Restitution
was directed to be paid immediately and the court
ordered:
4i
.. . the victim may assume responsibility for
collection of any balance of the restitution not
paid pursuant to 18 U.S.C. Section 3663(h)(2).
13
Nine, no credit for any amount recovered under
the Order may be made toward the restitution
obligation of any other defendant.”
Thereafter, four days later, on August 5, the judgment
was entered.
Thereafter, on August 12, 1991, defendant Cruce filed
his Motion for Reconsideration and to Vacate Sentence
and for Resentencing, together with his Motion to Dis-
qualify and Recuse.
By his Motion to Disqualify and Recuse, defendant
Cruce suggested that the district court had demonstrated
a personal bias or prejudice against him by not making
known to him or his counsel ex parte communications by
representatives of the United States prior to defendant's
sentencing and thereby denying him the right to dispute
or respond to the accusations contained in the ex parte
communication.
Defendant Cruce’s Motion for Reconsideration and
Resentencing requested that the court reconsider its
denial of his previously filed Motion to Withdraw Plea as
to Count I, to reconsider its denial of his Motion for
Imposition of Sentence Pursuant to the 1987 Guidelines,
and to vacate and set aside the August 1, 1991 sentence
and for resentencing. That motion, as well as the motion
to recuse, was based upon the discovery that on July 16,
1991, Jack D. Smith, deputy general counsel for the Fed-
eral Deposit Insurance Corporation in charge of criminal
restitution, had written a 15-page letter to the sentencing
judge, detailing its position with regard to sentencing of
defendant Cruce and his codefendants.
14
It was also discovered that former FDIC Chairman L.
William Seidman had, before his resignation, also written
to Judge Saffels urging a substantial term of imprison-
ment and meaningful restitution. Chairman Seidman’s
letter referred to the Jack Smith letter as “ ... our victim’s
statement. a
The Jack Smith letter contains factual statements,
arguments and conclusions relating to both the offenses
to which Cruce pled guilty, charges which were dis-
missed under the plea agreement and unindicted criminal
acts. The Smith letter contained numerous citations, stat-
utory references, statements of legislative history, foot-
4/
notes and was self-described on p. 5 as a legal
memorandum... .” The memorandum accused Cruce of
assignation with prostitutes provided by a codefendant,
Las Vegas money laundering utilizing paper bags, unac-
counted for millions in profits, lack of cooperation,
refusal to comply with subpoenas and factual attributions
to “sources”.
Neither the Smith legal memorandum nor the Seid-
man letter was disclosed to Cruce’s counsel prior to sen-
tencing.
On August 22, 1991, the district court entered its
Memorandum and Order denying the motions of defen-
dant Cruce and similar motions of his codefendant
Thomas A. Burger.
The court denied an evidentiary hearing concerning
its receipt and consideration of the letters.
15
Cruce appealed to the United States Court of Appeals
for the Tenth Circuit who generally affirmed the proceed-
ings in the district court but remanded the matter for
resentencing to permit Cruce to “comment upon [the
letters in question] and the probation officer’s determina-
tion and other matters relating to the appropriate sen-
tence.” The district court, in denying Cruce’s motion for
reconsideration and resentencing, stated that the letters
were not used in imposing sentence, but the Tenth Circuit
Court of Appeals in its opinion in the appeal of codefen-
dant Burger held concerning the letters:
“We do so mindful that although the Court
stated it did not rely on the letters, its order of
restitution would indicate otherwise.”
The Tenth Circuit refused to direct that the resentencing
be conducted by a different district judge.
4
ARGUMENT
I.
IMPOSITION OF SENTENCE PURSUANT TO MORE
PUNITIVE GUIDELINE AMENDMENTS ADOPTED
AFTER THE DEFENDANT’S OFFENSES HAD BEEN
COMMITTED VIOLATE THE EX POST FACTO
CLAUSE.
The opinion of the Court of Appeals, by approving
the district court’s determination that the 1989 and 1990
amendments to the Sentencing Guidelines applied to the
defendant’s case, effectively quadrupled his sentence.
Application of Guideline amendments which were not in
effect on the date of the offense and which prejudice the
16
defendant violate the ex post facto clause of the United
States Constitution. Miller v. Florida, 482 U.S. 423 (1987);
United States v. Underwood, 938 F. 2d 1086, 1090 (10th Cir.
1991)
The Court of Appeals acknowledged this rule but
found that Count I of the indictment (the conspiracy
charge) occurred or continued beyond the effective dates
of the 1989 and 1990 amendments.
The indictment does, in fact, allege that the conspir-
acy commenced “” . . . at least as early as 1984, the exact
date being unknown to the grand jury, and continuing
until the return of this indictment... .” The indictment
was in fact returned on January 10, 1991.
When defendant entered his plea of guilty he and his
counsel were very specific in stating to the court that his
plea was to conduct from 1984 through 1987. The defen-
dant’s position was made crystal clear by his answer to
paragraph 5 of the district court's petition to enter plea of
guilty wherein in making his factual basis for his plea he
stated in part:
“During the time period from 1984 through 1987
l entered into an agreement with other individ-
or See ae
Counts 18, 19 and 20 of the indictment are alleged to
have occurred on or about December 14, 1987, December
17, 1987 and January through July, 1988 and thus by their
specific allegations were committed prior to the effective
dates of the 1989 and 1990 Guidelines. Therefore, the only
arguable justification for application of the 1989 and 1990
amendments is the boiler plate allegation in Count 1 (the
conspiracy count) which suggests that the conspiracy
17
continued until the date of the return of the indictment
January 10, 1991.
The limited nature of defendant's plea was reiterated
at the change of plea proceeding wherein the district
court read the language quoted from paragraph 5 above
to the defendant, including the years 1984 through 1987,
and asked him, “Did you do that?”
The Government counsel was then asked to detail the
evidence which it could produce to prove the defendant
guilty. Government counsel did so. In its factual recita-
tion the latest date referred to by the Government was
July of 1988. The Government made no suggestion or
statement that it had any evidence of conspiratorial crim
inal activity on the part of the defendant or any conspira
tor after the effective date of the 1989 and 1990
Guidelines.
Neither the district court nor counsel for the Govern-
ment made any objection to or statement concerning the
dates referred to in the factual basis for defendant’s plea.
The district court did not, during the plea proceeding,
make any reference to any other ending date for the
conspiracy other than through 1987.
The district court, in advising the defendant concern-
ing the effect of the Sentencing Guidelines, made refer-
ence to their effective date as November 1, 1987. The
district court did not make any reference to the 1989 and
1990 Guideline amendments which it devastatingly
applied to the defendant.
In the face of the defendant’s date-specific plea, and
the court’s acceptance of that plea, the district court erred
in finding that the defendant was bound by the allega-
tions contained in the indictment and erred in finding
that the conspiracy continued to the date of its return.
The court and the parties are not bound by the bare
allegations of the indictment but must look to the evi-
dence to determine when the offense actually occurred in
order to determine the application of the Guidelines or
amendments.
In determining whether or not the Guidelines or
amendments to them apply to a defendant’s sentence, the
Court must look to the evidence to determine the date of
the offense is not bound by the specific dates alleged in
the indictment, but must make that determination by
considering the facts developed at allocution or trial.
United States v. Story, 891 F.2d 988 (2d Cir. 1989); United
States v. Bakker, 925 F.2d 728 (4th Cir. 1991); and United
States v. Bloom, 945 F.2d 14 (2nd Cir. 1991).
The decision of the Court of Appeals is squarely in
conflict with the cited decisions of the Second and Fourth
Circuits and establishes a violation of the ex post facto
clause. Cruce’s plea, which was accepted by the district
court, was limited to the time period from 1984 through
1987 and the more punitive Guidelines adopted in 1989
and 1990 cannot be constitutionally applied to him.
Cruce entered a very date specific plea to the conspir-
acy alleged. It is axiomatic that to be guilty of a conspir-
acy the defendant need not admit participation in all acts
of the conspiracy nor need he admit participation
throughout the full time alleged in the indictment. The
decision of the Court of Appeals ignores this Court’s
19
holding in Miller v. Florida, 482 U.S. 423 (1987), and vio-
lates the ex post facto clause of the Constitution.
II.
THE COURT ERRED IN ACCEPTING DEFENDANT
CRUCE’S PLEA TO THE CONSPIRACY COUNT AND
ERRED IN ITS REFUSAL TO PERMIT DEFENDANT
CRUCE TO WITHDRAW HIS PLEA TO THAT COUNT
AS A SUFFICIENT FACTUAL BASIS WAS NOT MADE
TO SUPPORT THE PLEA AS CONSTRUED BY THE
COURT IN VIOLATION OF RULE 11, FR.Cr.P., AND
THE DUE PROCESS CLAUSE.
The district court erred in accepting defendant
Cruce’s plea of guilty to Count 1 of the indictment
wherein he specified that his participation in the conspir-
acy continued only “ ... through 1987. ...” The limited
nature of the defendant’s plea was made clear to the
district court in the defendant’s petition to enter a plea of
guilty and then repeated by the district court in its exam-
ination of the defendant under oath during the plea pro-
ceeding.
The district court, at the conclusion of the proceed-
ing, accepted the plea agreement and found the defen-
dant guilty. The district court did not require that the
defendant admit guilt to a conspiracy continuing until the
return of the indictment on January 10, 1991, as alleged in
the indictment. The district court and the parties were
thus either bound by the limited nature of the defen-
dant’s plea to the conspiracy count (United States v. Bloom,
945 F.2d 14 (2nd Cir. 1991)) or the court was required to
permit the defendant to withdraw his plea of guilty to
Count | when it became apparent that the district court
20
intended to sentence the defendant based upon the boiler
plate language in the indictment alleging that the con-
spiracy continued to the date of its return.
The Government and the district court cannot simply
have it both ways, that is, accepting a defendant’s plea
limited to a specified timeframe and then obtaining a
quadruple sentence based on amendments effective out-
side the specified timeframe, thus sandbagging the defen-
dant concerning the extent and consequences of his plea
and the maximum penalties which could be imposed.
When defendant’s counsel was first advised of the
court’s intention to impose sentence on a conspiracy
extending into 1991 to which the defendant had not plead
guilty, counsel prior to imposition of sentence filed a
motion to withdraw the plea.
Withdrawal of a plea prior to sentence should be
liberally allowed and treated with broad standards of
liberality if the defendant presents a fair and just reason.
Barker v. United States, 579 F.2d 1219 (10th Cir. 1978);
United States v. Rhodes, 913 F.2d 839 (10th Cir. 1990), cert.
denied, 111 Sup.Ct. 1079.
A defendant who pled guilty to one version of an
offense but is being sentenced for another version of the
offense certainly presents a fair and just reason for with-
drawal. Either the factual basis for the plea was not
properly made under Rule 11, F.R.Cr.P., or the defendant
should be permitted to withdraw it under Rule 32(d) if
the district court is to be permitted to sentence under the
literal language of the indictment, using the later adopted
amendments.
The district court’s construction of Cruce’s plea to
cover the full time period alleged in the indictment
instead of the limited time period specifically stated in
his petition to plead guilty and in the sworn plea pro-
ceedings resulted in a quadrupling of his sentence. If the
district court intended to hold him to a plea to the full
time period alleged in the indictment it should have
required him to make a factual admission of guilt encom-
passing that time period. The district court, however,
permitted him to plead guilty to conspiratorial activity
for less than the full time period stated in the indictment
Such a limited plea is certainly appropriate in a conspir-
acy case which does not require that a defendant partici-
pate in all conspiratorial acts or participate for the full
time alleged in the indictment to be guilty of conspiracy
If the district court was not willing to be bound by the
limited time period which the defendant stated, it should
not have accepted his plea or should have granted his
motion to withdraw.
Surely the district court’s expansive construction of
the defendant’s plea of guilty to the conspiracy charge
which far exceeded the defendant's stated plea and fac-
tual basis should constitute a fair and just reason for
withdrawal of the plea which was requested prior to
sentence under Criminal Rule 32(d).
The opinion of the Court of Appeals countenances
and approves a clear violation of Rules 11 and 32 and
defendant’s right to due process
22
Ill.
THE COURT ERRED IN FAILING TO SET ASIDE THE
SENTENCE IMPOSED AND GRANT RECUSAL WHEN
IT WAS DISCLOSED THAT THE SENTENCING
COURT RECEIVED AND CONSIDERED PREJUDI-
CIAL EX PARTE COMMUNICATIONS FROM THE
F.D.1.C. AND R.T.C. PRIOR TO SENTENCE, AND THE
REMAND FOR RESENTENCING ORDERED BY THE
TENTH CIRCUIT COURT OF APPEALS SHOULD BE
HEARD BY A DIFFERENT DISTRICT JUDGE.
Subsequent to imposition of the sentence, defendant
Cruce and his codefendant, Thomas A. Burger, learned
through newspaper stories that the Chairman of the FDIC
and the Deputy General Counsel in Charge of Criminal
Restitution for the Resolution Trust Corporation had writ-
ten letters to the sentencing court which were not dis-
closed to defendant’s counsel prior to sentencing.
On that discovery, counsel for both defendants filed
motions to recuse the sentencing court, to vacate the
sentence imposed and for reconsideration. The district
court denied those motions.
The RTC letter was signed by the Deputy General
Counsel of the RTC for criminal restitution. It also listed
the name of the General Counsel for the FDIC, counsel
for the RTC and two Texas lawyers and their firm were
shown as of counsel. The letter itself, on p. 5, describes
the document as a legal memorandum. With numerous
case Citations, statutory quotations, discussion of legisla-
tive history and footnotes, the document is a precisely
constructed factual memorandum and legal brief directed
to convincing the court to accept the Government’s view
23
of the facts, the law and produce the agency’s desired
outcome.
The 1-page letter from L. William Seidman, Chairman
of the FDIC, is an obvious attempt to use the power and
influence of his position to prejudice the court against the
defendant. It is clearly an example of the historically
condemned practice of the King’s knave whispering in
the Chancellor’s ear. The influence of the Smith and
Seidman letters is obvious. The district court imposed
restitution against both defendants Cruce and Burger in
the precise terms and conditions requested by the agency.
Those terms and conditions and the amount of restitution
were not specified or suggested in the section of the
presentence report with regard to restitution. The district
court should thus have recused itself from further pro-
ceedings. United States v. Wolfson, 634 F.2d 1217 (9th Cir.
1980); United States v. Furst, 886 F.2d 558 (3rd Cir. 1989).
The court’s receipt of the letters and their disclosure
in the news media presents a clear case where the court’s
impartiality may be reasonably questioned and transfer
to another judge is required. 28 U.S.C. Section 455; Webbe
v. McGhie Land Title Co., 549 F.2d 1358 (10th Cir. 1977).
The fact that the district court here imposed the
substantial sentences requested and the exact amounts of
restitution demanded are particularly telling. The further
fact that the letters were disclosed to the media by the
agency who sent them to the judge suggests that the
agency desired that the public be aware that it could in
fact influence the district court and have its way in sucha
case. The crowing cries of the agency certainly provides
the element of appearance of lack of impartiality.
24
The substance of the ex parte communications dealt
directly with issues disputed in the sentencing process
and which the court refused to resolve as required by
Rule 32, F.R.Cr.P. Recusal is required. United States v.
Sciuto, 531 F.2d 842 (7th Cir. 1976); Price Bros. Co. v.
Philadelphia Gear Corp., 629 F.2d 444 (6th Cir. 1980).
When the district court received the letters, it had a
duty to disclose them to counsel for the defendants but it
failed to do so. This failure of the district court to take
that corrective action aggravated the situation and fur-
ther justifies recusal. Cortese v. United States, 782 F.2d 845,
852 (9th Cir. 1986).
The decision of the Court of Appeals remands the
case for resentencing after providing the defendant with
an opportunity to “comment” on the ex parte letters. That
decision by the Court of Appeals is in conflict with and
ignores cases holding that recusal is required at resen-
tencing where the judge received and relied upon ex parte
communications addressed to the court. United States v.
Wolfson, 634 F.2d 1217 (9th Cir. 1980); United States v.
Rosener, 485 F.2d 1213, 1229-31 (2d Cir. 1973); Haller v.
Robbins, 409 F.2d 857 (1st Cir. 1969); United States v. Furst,
886 F.2d 558 (3rd Cir. 1989); cert. denied, 110 S.Ct. 878
(1990). Those decisions by the Second Circuit, Third Cir-
cuit and Ninth Circuit clearly require that a different
judge should preside at the resentencing.
¢
CONCLUSION
For the reasons and based upon the authorities set
forth above, petitioner respectfully requests that this
Cc
i
Court issue its Writ of Certiorari to review the judgment
entered by the United States Court of Appeals for the
Tenth Circuit
Respectfully submitted,
Bruce C. Houdek
Bruce C. Houpek #17987
JAMes, MILLert, Houpek & Tyr!
500 Scarritt Building
818 Grand Avenue
Kansas City, Missouri 64106
Phone: (816) 842-2575
FAX: (816) 842-1135
Attorneys for Petitioner
James R. Cruce.
App. i
INDEX TO APPENDIX
Order and Judgment of the Tenth Circuit filed
GN RR SE cs ae eee ee ee ee App.
Judgment in a Criminal Case of the United States
District Court for the District of Kansas entered
Lt ; Pena PeAet Tk Oh F
Memorandum and Order of the United States Dis-
trict Court for the District of Kansas entered
rf he 3: Eee maaan
Memorandum and Order of the United States Dis-
trict Court for the District of Kansas filed
Oe Gas Oe io kok eee Re ee ee App.
Order of the Tenth Circuit denying rehearing,
filed July 21, 1992
l
App. 1
UNITED STATES COURT OF APPEALS
TENTH CIRCUIT
UNITED STATES OF
AMERICA,
No. 91-3274
(Dist. of Kansas)
(D.C. No. 91-40002-03)
Plaintiff-Appellee,
V.
JAMES R. CRUCE,
Defendant-Appellant.
me ee eee ee”
ORDER AND JUDGMENT*
(Filed June 11, 1992)
Before McKAY and BARRETT, Circuit Judges, and
BRIMMER", District Judge.
James R. Cruce appeals following a guilty plea and
sentence to four counts charging conspiracy and bank
fraud in violation of 18 U.S.C. §§ 371, 1344 and 2, and
*This Order and Judgment has no precedential value and shall
not be cited, or used by any court within the Tenth Circuit
except for purposes of establishing the doctrines of the law of
the case, res judicata, or collateral estoppel. 10th Cir. R. 36.3
*The Honorable Clarence A. Brimmer, Chief Judge, United
States District Court for the District of Wyoming, sitting by
designation.
App. 2
false statements to an agency of the United States in
violation of 18 U.S.C. § 1001. This is a companion case to
United States v. Burger, __ F.2d ___, No. 91-3267, (10th Cir.
1992) filed May 21, 1992. The same district court judge
presided in both cases.
Pursuant to Federal Rules of Appellate Procedure,
Rule 28(i), Cruce has adopted by reference the appellate
brief filed by codefendant Thomas A. Burger and the
amicus brief filed by the National Association of Criminal
Defense Lawyers.
On January 10, 1991, Cruce and six others, including
Thomas A. Burger, were charged in a twenty-five count
indictment with conspiracy and various bank fraud
crimes leading to the failure of Peoples Heritage Savings
and Loan of Salina, Kansas (Peoples), a federally char-
tered and insured savings and loan. Cruce, a certified
public accountant, owned 50% of Peoples’ parent, Peoples
Federal Bank Shares, and served on Peoples’ board and
as its president at all times material herein.
Prior to trial, Cruce pled guilty to Count 1, conspir-
acy (“[c]lommencing at least as early as 1984, the exact
date being unknown to the grand jury, and continuing
until the return of this indictment”), and Counts 18, 19,
and 20, substantive counts relating to the misuse of a five
million dollar line of credit granted to one James L.
Bosler. During his plea hearing, Cruce acknowledged
that: he could be sentenced to five years imprisonment
for each count; he could be ordered to pay restitution; the
only reason he was entering a plea of guilty to the four
counts was because he was in fact guilty of the offenses
charged in the four counts; there was no limitation on the
TT
App. 3
information the court could consider at sentencing con-
cerning his background, character, and conduct, provided
that the information was reliable.
Cruce’s presentence report related that: he would be
sentenced in accordance with the Sentencing Reform Act
of 1984 and amendments thereto (Appendix of Appellant,
p. A 257); the “RTC [Resolution Trust Corporation] has
totaled James Cruce with receiving direct benefit of $8
million through the complex schemes designed to
defraud the institution and mislead federal regulators,”
id., p. A 274; Cruce had prepared a financial statement
reflecting a negative net worth of $22,253,777.00, Id., p. A
295. The report set forth a sentencing range of 151 to 188
months.
After receiving the report, Cruce filed a conditional
motion to withdraw his guilty plea and for a determina-
tion that the 1987 guidelines would govern his sentence
rather than the 1989 and 1990 amendments thereto, aiid
that restitution be limited to Counts 18, 19, and 20. In
denying Cruce’s motion, the court found that: Cruce, by
pleading guilty to a conspiracy which commenced “at
least as early as 1984. . . and continu[ed] until the return
of this indictment [January 10, 1991],” (Appendix of
Appellant, p. A 005), had pled guilty to a crime which
occurred subsequent to the effective dates of the Novem-
ber, 1989 and November, 1990 amendments to the guide-
lines; Cruce continued his participation and ownership in
the joint ventures, corporations, partnerships and prop-
erty, which was obtained with money illegally defrauded
from Peoples, unimpeded until the issuance of the indict-
ment; Cruce offered no evidence that he withdrew from
the conspiracy in November, 1988; Cruce has not asserted
App. 4
his innocence but, rather, is upset with the severity of the
sentence which has been recommended in the presen-
tence report; Cruce’s motion to limit any restitution to
Counts 18, 19, and 20 is inappropriate; 18 U.S.C. § 3664(d)
allows the court to base its determination of restitution
“on findings contained in the presentence report or other
testimony or evidence supported by a preponderance of
the evidence.” (Appendix of Appellant, p. A 110).
Cruce was sentenced under the amended sentencing
guidelines to fourteen years imprisonment and ordered
to immediately pay eight million dollars in restitution to
the RTC. Cruce subsequently moved for reconsideration
and to vacate sentence and resentencing. Cruce also
moved the district court to disqualify itself and recuse
from further participation in the case. Cruce’s motion for
recusal was based on his allegation that the court had
“demonstrated a personal bias or prejudice against him
and in favor of the government by not making known to
[him] or his counsel certain ex parte communications by
representatives of the United States to the court prior to
[his] sentencing on August 1, 1991.” (Appendix of Appel-
lant, p. A 211).
The court denied Cruce’s motions. In so doing, the
court found: no ex parte communication occurred between
the court and the prosecution; the letters in question were
from victims and not from the prosecution; the two letters
in dispute were not used in determining Cruce’s sen-
tence; Cruce’s sentence was based upon information in
the presentence report, as amended and adopted by the
court following two separate evidentiary hearings, and
the “personal knowledge [the court] derived from presid-
ing over the lengthy trial of,” (Appendix of Appellant, p.
App. 5
A 245), Cruce’s alleged co-conspirators. The court also
found that inasmuch as its prior denial of Cruce’s motion
to withdraw his guilty plea was proper that his motion
for reconsideration would be denied.
On appeal, Cruce contends that the district court
erred in: (1) applying the 1989 and 1990 guideline amend-
ments; (2) finding there was an alternative justification
for his fourteen year sentence under the 1987 guidelines;
(3) imposing a fourteen year sentence without first
resolving the disputed issues of fact; (4) imposing consec-
utive sentences on Counts 18, 19, and 20; (5) failing to
grant a hearing, recuse, or reconsider his sentence upon
disclosure of the ex parte communications to the court:
and (6) accepting his plea of guilty to Count 1.
A
Cruce contends that the district court erred in deter-
mining, in violation of the ex post facto clause, that the
1989 and 1990 amendments to the guidelines should
apply to him when the offenses to which he pled guilty
occurred prior to the effective date of those amendments.
The government responds that the district court did not
err in applying the 1989 and 1990 guideline amendments
when, as here, Cruce pled guilty to a conspiracy that
continued to January 10, 1991. We agree.
We rejected this same argument in Burger. Burger,
like Cruce, pled guilty to a conspiracy “[c]lommencing at
least as early as 1984, the exact date being unknown to
the grand jury, continuing until the return of this indict-
ment [January 10, 1991].” (Appendix of Appellant, p. A
005). In rejecting Burger’s argument that his sentence
ee
App. 6
under the amended guidelines violated the ex post facto
clause, we held:
Inasmuch as Burger pled guilty to a conspir-
acy which extended over seven years and termi-
nated after the implementation of the 1990
amendments, his sentence under the 1990 guide-
lines was not in violation of the ex post facto
clause. See United States v. Morrison, 938 F.2d
168, 170 (10th Cir. 1991) (“the guidelines apply
to “straddle” crimes: continuing offenses ‘in
which acts comprising the crime occur both
before and after the effective date of the Guide-
lines.” United States v. Bakker, 925 F.2d 728, 739
(4th Cir. 1991)).”
United States v. Burger, Sl. Op. at p. 18.
II.
Cruce argues that the court erred in finding that
there was an alternative justification for the fourteen year
sentence imposed under the 1989 and 1990 amendments
by way of an upward departure from a sentence imposed
under the 1987 guidelines. During Cruce’s sentencing, the
district court found “that should the original guidelines
be applicable in this case, an upward departure for an
aggregated sentence of 168 months is appropriate and
justified.” (Appendix of Appellant, p. A 180).
We rejected this same argument in Burger, holding,
“{iJnasmuch as the district court properly sentenced Bur-
ger under the 1990 guidelines .. . we need not examine
the propriety of the court’s alternative sentence under the
1988 guidelines.” United States v. Burger, Sl. Op. at p. 18.
App. 7
IIT.
Cruce contends that the district court erred “in
imposing the fourteen-year sentence as it failed to make
factual findings resolving the disputed issues of fact prior
to the imposition of sentence.” (Brief of Appellant at p.
32). Cruce acknowledges that he was aliowed to make
extensive objections to the factual findings contained in
the presentence report “after receipt of the initial draft of
the presentence report,” id. at p. 33, and that “[t]hese
objections were again detailed at sentencing.” Id. Nev-
ertheless, Cruce argues that inasmuch as the district court
did not “make factual findings resolving the disputed
issues of fact prior to imposition of sentence,” the district
court violated Fed. R. Crim. P. 32 and his sentence must
be set aside and his case remanded for hearing and
sentencing. In making this argument, Cruce relies on
United States v. Alvarado, 909 F.2d 1443 (10th Cir. 1990) for
the proposition that the court’s noncompliance with Rule
32 requires a remand.
We rejected °%i. same argument in Burger, holding:
We agree with Burger that Rule 32(c)(3)(D)
and United States v. Alvarado . . . require the
district court to reduce its findings regarding
disputed materials to written form and attach
them to the presentence report. The district
court did so herein. We do not agree with Bur-
ger that Rule 32(c)(3)(D) “[a]ccordingly
expressly afforded the opportunity to review
such findings prior to imposition of sentence.”
Neither Rule 32(c)(3)(D) nor United States v.
Alvarado . . . require that a defendant be
afforded the opportunity to review the court's
ee
App. 8
findings prior to the imposition of sentence. The
district court complies with Rule 32(c)(3)(D),
when, “as to each matter controverted [it]
make[s] a finding as to the allegation, or (ii) a
determination that no such finding is necessary
because the matter controverted will not be
taken into account in sentencing” and performs
the “ministerial task of appending its deter-
minations regarding disputed matters in the
presentence report.” United States v. Jackson, 950
F.2d [633] at 638 [10th Cir. 1991].
United States v. Burger, Sl. Op. at p. 16.
IV.
Cruce argues that the district court erred in imposing
consecutive sentences on Counts 18, 19, and 20 as the
offenses alleged in those counts constituted but one viola-
tion of the bank fraud statute. We considered and rejected
this same argument in Burger:
On appeal, Burger argues, as he argued to
the district court, that the sentences on the non-
conspiracy counts must be vacated because they
constituted multiple sentences for the same
crime. We disagree. We adopt the district court’s
findings:
The court further finds that defendants’
arguments that the Indictment violates the
double jeopardy clause, and thus, should be
dismissed is without merit. The crimes
charged in this Indictment involve bank
fraud, [and] under the relevant statute, 18
U.S.C. § 1344, an offense occurs upon each
execution or attempted execution of a
scheme to defraud. United States v. Poliak,
App. 9
823 F.2d 371, 372 (9th Cir. 1987), cert. denied,
485 U.S. 1029 (1988). Thus, each count of the
Indictment involving a draw upon a line of
credit would constitute a separate execution
of the scheme and would be punishable as a
separate crime. The court further notes that
this argument is untimely because it was
first raised in defendants’ motions for
reconsideration. Fed. R. Crim P. 12(f).
United States v. Burger, Sl. Op. at p. 17.
V.
Cruce contends that the district court erred in failing
to grant a hearing, recuse itself, or reconsider the sen-
tence imposed upon disclosure of the prejudicial ex parte
communications to it prior to imposition of his sentence.
Cruce argues that subsequent to the imposition of his
sentence, he learned through newspaper stories that
Chairman Seidman of the Federal Deposit Insurance
Coproration [sic] (FDIC) and the Deputy General Counsel
in charge of criminal restitution for the FDIC and the RTC
had written letters to the sentencing court which were not
disclosed to his counsel prior to sentencing.
Chairman Seidman related in his letter that he was
“concerned that the sentence imposed upon Mr. Cruce
reflect the seriousness of his crime and serve to deter
others from committing similar acts.” (Appendix of
Appellant at p. A 338). Chairman Seidman also stated
that “[a]s a result of his [Cruce’s] activities, Peoples suf-
fered losses exceeding $149 million.” Id.
App. 10
The Deputy General Counsel related in his letter that
the court should impose upon Cruce a substantial prison
sentence and order restitution in an amount of not less
than $8 million. (Appendix of Appellant at p. A 322). The
Deputy General Counsel also related that Cruce received
large cash kickbacks; part of the money paid to Cruce
was laundered through a Las Vegas casino and returned
to Cruce in a brown paper bag; one of Peoples’ lenders
provided Cruce and Burger with the use of an airplane,
cars, and “limo” drivers who provided prostitutes; Cruce
“assisted in the theft of millions of dollars from the
institution [Peoples] the dissipation of hundreds of mil-
lions of dollars on bad loans.” (Appendix of Appellant, p.
A 335).
In denying Cruce’s motions, the district court stated
that the probation office had “promoted” the idea that
Cruce pay eight million dollars in restitution, (Appendix
of Appellant, p. A 241); the two letters in dispute were
not used in determining Cruce’s sentence, id., p. 244; and
Cruce’s sentence was based upon information contained
in the presentence report and the personal knowledge the
court derived from presiding over the lengthy trial of
Cruce’s alleged co-conspirators.
We agree with Cruce that he “at least had a right to
confront the allegations [in the letters] and challenge
their accuracy.” (Brief of Appellant, p. 40). In granting
similar relief in Burger, we held:
Under Rule 32, “it is clear that the defen-
dant and the government enjoy equal pro-
cedural entitlements.” Burns v. United States, __
U.S. __, 111 S. CT. 2182, 2185 n. 4 (1991). In
holding that a defendant was entitled to notice
App. 11
that a district court was contemplating depart-
ing upward from the guideline sentencing range
based on a ground not previously identified for
upward departure, the Court opined:
As amended by the Sentencing Reform
Act, Federal Rule of Criminal Procedure 32
provides for focused, adversarial develop-
ment of the factual and legal issues relevant
to determining the appropriate Guideline
sentence. Rule 32 frames these issues by
directing the probation officer to prepare a
presentence report addressing all the mat-
ters germane to defendant’s senten-
ce... Rule 32(a)(1) provides that ‘[a]t the
sentencing hearing, the court [must] afford
the counsel for the defendant and the attor-
ney for the Government an opportunity to
comment upon the probation officer’s deter-
mination and other matters relating to the
appropriate sentence.’
* * *
Rule 32 contemplates full adversary
testing of the issues relevant to a Guidelines
sentence and mandates that the parties be
given ‘an opportunity to comment upon the
probation officer’s determination. .. . ’
111 S. Ct. at pp. 2185-6.
No less a standard should be applied to the
letters from Chairman Seidman and the FDIC.
We hold that Burger is entitled to a resentencing
during the course of which he shall have the
opportunity to “comment upon [the letters in
question and] the probation officer’s determina-
tion and other matters relating to the appropri-
ate sentence.”
United States v. Burger, Sl. Op. at pp. 14-15.
; ,
App. 12
VI.
Cruce contends that the district court erred in accept-
ing his plea of guilty to Count 1 and in denying his
motion to withdraw his plea of guilty.
Cruce argues that the court erred in accepting his
guilty plea to Count 1 because he specified that his partic-
ipation in the conspiracy continued only through 1987.
Contrary to Cruce’s appellate contentions that his plea
Should be vacated because his participation in the con-
spiracy continued only through 1987, Cruce pled guilty to
a conspiracy which commenced “at least as early as 1984”
and continued “until the return of this indictment (JJanu-
ary 10, 1991]}.” A review of Cruce’s plea hearing (Appen-
dix of Appellant, pp. A 063-A 094) and his sentencing
hearing (Appendix of Appeilant, pp. A 118-A 210) clearly
establishes that Cruce entered a voluntary and knowing
plea.
Moreover, the district court specifically found that
Cruce offered no evidence that he withdrew from the
conspiracy and that he continued his ownership and par-
ticipation in the joint ventures, corporations, partnerships
and property which was obtained with money illegally
defrauded from Peoples unimpeded until the return of
the indictment. Under these circumstances, we hold that
the district court did not err in accepting his guilty plea
to Count 1.
Cruce argues alternatively that the district court and
the parties “were required to permit [him] to withdraw
his plea of guilty” (Brief of appellant, p. 41) when it
became apparent that the district court intended to sen-
tence him based on the “boiler plate language in the
aii cl a ci
App. 13
indictment alleging that the conspiracy continued until
the return of this indictment.” (Brief of Appellant, p. 41).
We hold that the district court was not “required” to
permit Cruce to withdraw his guilty plea:
A district court’s denial of a motion to with-
draw a plea of guilty is reviewed for an abuse of
discretion. United States v. Rhodes, 913 F.2d 839,
845 (10th Cir. 1990), cert. denied, __ US. ae
(1991). Although “[o}ne who enters a guilty plea
has no right to withdraw it,” United States v.
Hickok, 907 F.2d 983, 985 (10th Cir. 1990), quot-
ing, Barker v. United States, 579 F.2d 1219, 1223
(10th Cir. 1978), a district court may permit
withdrawal of a plea prior to sentencing “upon
a showing by the defendant of any fair and just
reason.” Fed. R. Crim. P. 32(d). The defendant
bears the burden of demonstrating a “fair and
just reason.” United States v. Hickok, supra.
United States v. Burger, Sl. Op., p. 9.
We hold that Cruce has failed to show a “fair and just
reason” for withdrawing his plea. Cruce entered a volun-
tary and knowing plea upon the advice of counsel and
after careful and extensive questioning by the district as
to the nature and consequences of his plea. We reject
Cruce’s arguments that he was somehow “sandbagged”
by “boiler plate language” in the indictment setting forth
the time frame of the conspiracy.
App. 14
The judgment of conviction is AFFIRMED. The ca:
is REMANDED, however, for resentencing consister
with this opinion.
Entered for the Court:
James E. Barrett,
Senior United States
Circuit Judge
> Case
istent
App. 15
United States District Court
7 ___District of is Kansas
UNITED STATES JUDGMENT IN A
OF AMERICA CRIMINAL CASE
V (For Offenses Committed
On or After
James R. CRUCE November 1, 1987)
(Name of Defendant) (Filed Sept. 15, 1991)
Case Number:
91-40002-03
Mark L. Bennett, Jr. — Retained
Defendant’s Attorney
THE DEFENDANT:
[XX] pleaded guilty to count(s) 1, 18, 19, and 20 of a
25-count Indictment
was found guilty on count(s) after
HuULt)
plea of not guilty.
Accordingly, the defendant is adjudged guilty of such
count(s), which involve the following offenses:
Title & Nature of Date Offense Count
Section Offense Concluded Number(s)
(Please see next page for offenses.)
The defendant and government are both advised of
their right to appeal this sentence.
The defendant is sentenced as provided in pages 2
through 7 _ of this judgment. The sentence is imposed
pursuant to the Sentencing Reform Act of 1984.
2
ee
App. 16
The defendant has been found not guilty on
count(s) and is discharged as to such
count(s).
Count(s) 2-17 and 21-25 (are) dismissed on
the motion of the United States
It is ordered that the defendant shall pay a special
assessment of $ 200 , for count(s) — 1, 18, 19,
and 20 _, which shall be due [xx] immediately [_ ]
as follows:
IT IS FURTHER ORDERED that the defendant shall
notify the United States attorney for this district within
30 days of any change of name, residence, or mailing
address until all fines, restitution costs, and special
assessments imposed by this judgment are fully paid.
APPROVED: /s/ illegible
Assistant U. S. Attorney
Defendant’s Soc. Sec. No.:
511-48-6881
Defendant’s Date of Birth: August 1, 1991
03/12/47 Date of Imposition of
Defendant's sentence
Mailing Address:
746 Victoria Heights
/3/ DALS &. SAPPSLS
Salina, KS 67401 Dale E. Saffels
Defendant's
Senior U.S. District Judge
Name & Title of
Residence Address:
746 Victoria Heights
Judicial Officer
Salina, KS 67401 8/5/91 8-5-9]
Dated: Date
on
ich
on
Title &
section
18 USC
§ 371
18 USC
§§ 2 and
1344(2)
18 USC
§§ 2 and
1344(2)
App. 17
Nature of
Offense
Conspiracy to
Defraud the United
States and to
Commit Crimes
Against the United
States
Scheme and Artifice
to Obtain Monies,
Funds, Credits,
Assets, Securities, or
Other Property
Owned by or Under
the Control of a
Financial Institution
Scheme and Artifice
to Obtain Monies,
Funds, Credits,
Assets, Securities, or
Other Property
Owned by or Under
the Control of a
Financial Institution
Scheme and Artifice
to Obtain Monies,
Funds, Credits,
Assets, Securities, or
Other Property
Owned by or Under
the Control of a
Financial Institution
Date
Offense
Con- Count
cluded Number(s)
Jan. 10,
199]
Dec. 14, ]
1987
ho
July, 1988
App. 18
IMPRISONMENT
The defendant is hereby committed to the custody
the United States Bureau of Prisons to be imprisoned
the following manner:
Count 1: 5 years.
Count 18: 5 years (to run consecutive to
Count 1).
Count 19: 4 years (to run consecutive to
Counts 1 and 18).
Count 20: 5 years (to run concurrently with
Count 1).
lotal aggregated sentence is 168 months.
Both the government and defendant are advised
that they have the right to appeal this sentence
to the United States Court of Appeals, Tenth
Circuit, Denver, Colorado
[XX] The court makes the following recommendatio:
to the Bureau of Prisons:
The Court recommends that the defendant serve
his sentence of imprisonment at a minimum
security facility.
[ | The defendant is remanded to the custody of tl
United States marshal.
{ | The defendant shall surrender to the United Stat
marshal for this district,
a.m.
[ ] at p.m. on
[ ] as notified by the United States marshal
as senna sical si iia ian
ody of
ned in
ations
e
n
of the
States
rene
App. 19
[XX] The defendant shall surrender for service of sen-
tence at the institution designated by the Bureau of
Prisons.
[XX] before 2 p.m. on August 26, 1991
[ ] as notified by the United States marshal.
[ ] as notified by the probation office.
RETURN
| have executed this judgment as follows:
Defendant delivered on to a
, with a certified copy of this judgment.
United States Marshal
By
illegible
SUPERVISED RELEASE
Upon release from imprisonment, the defendant shall
be on supervised release for a term of 3 years .
While on supervised release, the defendant shall not
commit another federal, state or local crime and shall not
illegally possess a controlled substance. The defendant
shall comply with the standard conditions that have been
adopted by this court (set forth below). If this judgment
imposes a restitution obligation, it shall be a condition of
App. 20
supervised release that the defendant pay any such resti-
tution that remains unpaid at the commencement of the
term of supervised release. The defendant shall comply
with the following additional conditions:
[XX] The defendant shall report in person to the proba-
tion office in the district to which the defendant is
released within 72 hours of release from the cus-
tody of the Bureau of Prisons.
[ ] The defendant shall pay any fines that remain
unpaid at the commencement of the term of super-
vised release.
[XX] The defendant shall not possess a firearm or
destructive device.
[XX] The defendant shall not incur new credit charges
Or open additional lines of credit without the
approval of the U. S. Probation Office.
[XX] The defendant shall provide the U. S. Probation
Office access to any requested financial informa-
tion of a personal nature and of any business in
which he has any percentage of ownership, man-
agement responsibility, or fiduciary consult.
STANDARD CONDITIONS OF SUPERVISION
While the defendant is on supervised release pur-
suant to this judgment, the defendant shall not commit
another federal state or local crime. In addition:
1) the defendant shall not leave the judicial district
without the permission of the court or probation
officer;
ho
the defendant shall report to the probation officer as
directed by the court or probation officer and shall
EE
7)
8)
10)
11)
App. 21
submit a truthful and complete written report within
the first five days of each month:
the defendant shall answer truthfully all inquiries
by the probation officer and follow the instructions
of the probation officer;
the defendant shall Support his or her dependents
and meet other family responsibilities;
the defendant shall work regularly at a lawful occu-
pation unless excused by the probation officer for
schooling, training, or other acceptable reason
the defendant shall notify the probation ofticer
within 72 hours of any change in residence or
employment;
the defendant shall refrain from excessive use of
alcohol and shall not purchase, possess, use, distrib-
ute, or administer any narcotic or other controlled
substance, or any paraphernalia related to such sub-
stances, except as prescribed by a physician;
the defendant shall not frequent places where con-
trolled substances are illegally sold, used, distrib-
uted, or administered;
the defendant shall not associate with any persons
engaged in criminal activity, and shall not associate
with any person convicted of a felony unless
granted permission to do so by the probation officer;
the defendant shall permit a probation officer to
visit him or her at any time at home or elsewhere
and shall permit confiscation of any contraband
observed in plain view by the probation officer;
the defendant shall notify the probation officer
within seventy-two hours of being arrested or ques-
tioned by a law enforcement officer:
13)
[XX]
App. 22
the defendant shall not enter into any agreement to
act as an informer or a special agent of a law
enforcement agency without the permission of the
court.
as directed by the probation officer, the defendant
shall notify third parties of risks that may be occa-
sioned by the defendant’s criminal record or per-
sonal history or characteristics, and shall permit the
probation officer to make such notifications and to
confirm the defendant’s compliance with such noti-
fication requirement.
RESTITUTION AND FORFEITURE
RESTITUTION
The defendant shall make restitution to the follow-
ing persons in the following amounts:
Name of Payee Amount of
Restitution
Resolution Trust Corporation $87000,000
Mid-Central Consolidated Office
Board of Trade Building No. 2
4900 Main Street
Kansas City, MO 64112
Payments of restitution are to be made to:
[ ] the United States Attorney for transfer to
the payee(s).
{[ ] the payee(s).
[XX] Clerk, U.S. District Court, Topeka, Kan-
sas, for disbursement.
Restitution shall be paid:
[XX] in full immediately.
ON ....a
App. 23
) { ] in full not later than
[ ] in equal monthly installments over a
| period of months. The first pay-
ment is due on the date this judgment.
t Subsequent payments are due monthly
. thereafter.
; [ ] in installments according to the following
) schedule of payments:
The victim may assume responsibility for collection of
any balance of restitution not paid pursuant to 18 USC
§ 3663(h)(2).
No credit for any amounts recovered under this Order
may be made toward the restitution obligation of any
other defendant.
Any payment shall be divided proportionately among the
payees named unless otherwise specified here.
FORFEITURE
{ ] The defendant is ordered to forfeit the
following property to the United States:
STATEMENT OF REASONS
[XX] The court adopts the factual findings and guideline
application in the presentence report.
OR
[ ] The court adopts the factual findings and guideline
application in the presentence report except (see
attachment, if necessary):
Se
App. 24
Guideline Range Determined by the Court:
[XX]
Total Offense Level: _ 34
Criminal History Category: |
Imprisonment Range: 151 to 188 months
Supervised Release Range: 2 to _3 years
Fine Range: $ 17,500 to $ 175,000
[XX] Fine is waived or is below the guide-
line range, because of the defendent’s
inability to pay.
Restitution: $ 80,000,000 +
[XX] Full restitution is not ordered for the
following reason(s): Restitution of
$8,000,000 is ordered because the
defendant is not believed to have the
necessary resources to pay the total
$80,000,000+.
The sentence is within the guideline range, that
range does not exceed 24 months, and the court
finds reason to depart from the sentence called for
by application of the guidelines.
OR
The sentence is within the guideline range, that
range exceeds 24 months, and the sentence is
imposed for the following reason(s): The sentence
is near the middle of the guideline range because
no aggravating or mitigating circumstances can be
identified to warrant further adjustment.
na na ci nib
App. 25
OR
The sentence may depart from the guideline range
[ ] upon motion of the government, as a
result of defendant’s substantial assis-
tance.
[XX] for the following reason(s): If appeal
review determines the guidelines prior to
the 1989 amendments are applicable,
there are ample justifications to warrant
an upward departure:
1) 18 U.S.C. § 3553(b), as cited in guideline § 5K2,
indicates sentencing court may impose a sentence outside
the range established by the applicable guideline if the
court 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.
2) The guidelines say circumstances may warrant
departure from the guidelines pursuant to this provision
which, by their very nature, cannot be comprehensively
listed and analyzed in advance.
3) The controlling decision as to whether and to
what extent departure is warranted can only be made by
the Court.
4) Any case may involve factors in addition to those
identified that have not been given adequate consider-
ation by the Commission.
App. 26
5) The Court may depart from the guidelines even
though the reason for departure is taken into consider-
ation in the guidelines as a specific offense characteristic
or other adjustment if the Court determines that, in light
of unusual circumstances, the guideline level attached to
that factor is inadequate.
6) Departure from the applicable guideline range in
this case is warranted because the factors are present to a
degree substantially in excess of that which ordinarily is
involved in the offense or contemplated by the original
guidelines.
7) When the Court accepted the guilty plea, it
expressly retained the power to determine relevant fac-
tors bearing on sentencing.
8) The Sentencing Commission, in formulating the
original guidelines did not formulate a scale that fully
captured the harmfulness and seriousness of the conduct
reflecting the loss in this case.
9) The most conservative figures developed indicate
the cumulative losses produced by the common scheme
or course of conduct are many times the range of the
original scale.
10) Mr. Cruce violated a position of trust as Chief
Executive Office of Peoples Heritage, directly influenced
the granting of preferred loans skillfully manipulated the
benefactor of special loans, personally received inap-
propriate benefit from many loans, and was instrumental
in the personal loss to investors of monies not covered by
insurance when Peoples Heritage failed.
=
=
App. 27
11) Additionally, the Court has heard several weeks
of evidence involving this case and Mr. Cruce’s own
direct testimony detailing his personal involvement.
12) It is therefore the finding of this Court that,
should the original guidelines be applicable to this case,
an upward departure for an aggregate sentence of 168
months is appropriate and justified.
App. 28
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
UNITED STATES OF
AMERICA,
Plaintiff,
)
)
) Case No. 91-40002-01
)
V. )
)
)
)
)
)
Case No. 91-40002-03
THOMAS A. BURGER,
JAMES R. CRUCE,
Defendants.
MEMORANDUM AND ORDER
(Filed July 12, 1991)
This matter is before the court on the motion of
defendant Thomas A. Burger (“defendant Burger”) and
defendant James R. Cruce (“defendant Cruce”). Defen-
dants move the court to apply the United States Sentenc-
ing Guidelines (“USSG”) effective December 1988, when
sentencing defendants in the above-captioned case.
Defendants seek to avoid the application of two amend-
ments which went into effect on November 1989, and
November 1990. These amendments allow the court to
factor in the total amount of loss suffered by a financial
institution as a result of the offense and to also factor in
whether the offense has substantially jeopardized the
safety and soundness of a financial institution. See USSG
§ 2F1.1(b)(1)(S) and (6). In the alternative, Burger and
Cruce move the court to allow them to withdraw their
guilty pleas.
TS
App. 29
In addition, defendant Cruce asserts that restitution
ordered by the court should be limited to those amounts
attributable specifically to the conduct underlying his
conviction.
On April 17, 1991, defendant Cruce entered a guilty
plea to Counts 1, 18, 19, and 20 of the Indictment
returned on January 10, 1991. This Indictment charged
the defendants with conspiring to obtain monies from
Peoples Heritage Federal Savings and Loan (“Peoples
Heritage”) by false or fraudulent pretenses in violation of
18 U.S.C. § 1344; making false, fictitious and fraudulent
statements in violation of 18 U.S.C. § 1001; twenty-three
counts of bank fraud in violation of 18 U.S.C. § 1344; and
one count of making a false statement in violation of 18
U.S.C. § 1001. In his petition to plead guilty, accepted by
the court on April 17, 1991, defendant Cruce stated:
During the time period from 1984 through 1987,
I entered into an agreement with other individ-
uals, including Christopher Hashioka and James
Boseler, whereby we set up an arrangement to
purchase Ameriwest stock as it became available
in large blocks on the open market in an attempt
to keep the price of the stock up. At the time we
entered into the agreement, | owned shares of
the stock and since the stock price was going
down it was to my benefit if | could keep the
price from going down further. The agreement
that we entered into involved a loan of
$5,000,000 to James L. Boseler by Peoples Heri-
tage Savings and Loan. Mr. Boseler was to loan
the money to third parties so that they could
acquire the stock on the open market and keep
the price up.
App. 30
Similarly, defendant Burger entered a plea of guilty to
Counts 1, 16, 18, 19 and 20 of the Indictment on April 23,
1991. In his petition, defendant Burger made an identical
factual statement, except that defendant Burger’s state-
ment also included the following language:
My participation in any conspiracy terminated
at the time I left Peoples Heritage Savings in
December, 1988.
Upon satisfying itself that the requirements of Rule 11 of
the Federal Rules of Criminal Procedure had been met,
and that a factual basis existed to find that the defendants
had committed the offenses to which they had pled
guilty, the court accepted both defendants’ guilty pleas.
I. APPLICATION OF THE AMENDED GUIDELINES
Defendants now contend that the court should sen-
tence them in accordance with the Sentencing Guidelines
in place during November 1988, or in the alternative,
allow them to withdraw their guilty pleas to Count 1 of
the Indictment. Defendants assert numerous reasons why
they should be sentenced in accordance with the Sentenc-
ing Guidelines in effect on November 1, 1988. First,
defendants contend that there exists no factual basis in
the record for the determination that the defendants are
guilty of a conspiracy that continued until the return of —
the Indictment on January 10, 1991. Second, defendants
contend that the conspiracy ended with the last overt act
alleged in the Indictment. Third, defendants contend that
any alleged acts of concealment which occurred after the
central objectives of the conspiracy had been attained,
may not be used to extend the duration of the conspiracy
ee
App. 31
beyond the last overt act committed in furtherance of the
conspiracy. Thus, in view of the foregoing, defendants
contend that application of the Sentencing Guidelines
would violate the ex post facto clause of the Constitution,
as the conspiracy terminated prior to the effective date of
the amendments effective November 1989, and Novem-
ber 1990.
Upon consideration of the parties’ arguments and
applicable law, the court finds that defendants’ motions
should be denied. Generally, when determining what sen-
tence to be imposed, the Sentencing Guidelines provide
that defendants are to be sentenced in accordance with
the Guidelines in effect at the time of the sentencing. See
18 U.S.C. § 3553(a)(4) and (5) (1983). However, this rule is
subject to constraints contained in the ex post facto clause
of the Constitution of the United States of America. U.S.
Const. art I, § 9, cl. 3. Thus, whenever, an amendment to
the Sentencing Guidelines imposes a harsher penalty than
that which would have been imposed at the time the
offense was committed, the court must apply the earlier
version. See Miller v. Florida, 482 U.S. 423, 429-30 (1987);
United States v. Smith, 930 F.2d 1450, 1452 n. 3(10th Cir.),
cert.denied, 110 S.Ct. 1786 (1991); United States v. Swanger,
919 F.2d 94, 95 (8th Cir. 1990); United States v. McAllister,
927 F.2d 136, 138 (3rd Cir. 1991); United States v. Lam
Kwong-Wah, 924 F.2d 298, 304 (D.C. Cir. 1991). In deter-
mining whether the imposition of a criminal law violates
the ex post facto prohibition, two elements must be found.
These elements are: the law must be retrospective, or in
other words, applied to events occurring before its enact-
ment, and the law must disadvantage the offender
affected by it. Miller v. Florida, 482 U.S. at 430.
App. 32
Upon consideration of the present set of facts, the
court finds that the application of the Sentencing Guide-
lines, as amended in November 1989, and November
1990, does not violate the ex post facto clause. First, the
court finds that the offenses to which defendants Cruce
and Burger have pled guilty are offenses which occurred
subsequent to the effective dates of the amended Guide-
lines in question. Specifically, the court finds that both
defendants pled guilty to Count 1 of the Indictment
which alleges:
Commencing at least as early as 1984, the exact
date being unknown to the grand jury, and con-
tinuing until the return of this indictment [Jan-
uary 10, 1991], defendants, THOMAS A.
BURGER, SHERWOOD E. BLOUNT, JR., JAMES
R. CRUCE, CATHY (nee ALLIN) CRUCE,
THOMAS D. DUNN, JR., JOSEPH GROSZ and
KIM A. WISE knowingly and unlawfully com-
bined, conspired, confederated and agreed with
each other. . . . (emphasis added).
Thus defendants pled guilty to a crime which allegedly
occurred subsequent to the effective dates of the Novem-
ber 1989, and November 1990.
Further, the court finds that defendants’ assertion
that there are no facts which support the continued exis-
tence of the conspiracy beyond the termination of their
employment with Peoples Heritage is simply without
merit. While it is true that the defendants were forced to
resign from Peoples Heritage in November 1988, the
court finds that the defendants continued their participa-
tion and ownership in the joint ventures, corporations,
partnerships and property which was obtained with
App. 33
money illegally defrauded from Peoples Heritage. Fur-
ther, their participation in these ventures continued
unimpeded until the issuance of the Indictment. Thus,
while defendants may not have been employed by Peo-
ples Heritage after November 1988, they had not extri-
cated themselves from the joint ventures, partnerships
and other entities which were set up to defraud Peoples
Heritage and which continued into existence beyond the
date of their forced resignations.
Further, the court finds that the forced resignation of
defendants does not amount to an affirmative withdrawal
or disavowal of the conspiracy as contemplated by the
law. As stated by the Tenth Circuit Court of Appeals,
“li]Jn order to withdraw from a conspiracy an individual
must take affirmative action, either making a clean breast
to the authorities or communicating his withdrawal in a
manner reasonably, calculated to reach his co-conspira-
tors.” United States v. Fox, 902 F.2d 1508, 1516 (10th Cir.),
cert. denied, 111 S. Ct. 199 (1990) (quoting United States v.
Parnell, 581 F.2d 1374, 1384 (10th Cir.), cert. denied, 439
U.S. 1076 (1978)). Further, the burden of establishing
withdrawal is on the defendants. Fox, 902 F.2d at 1516.
In this regard, the court finds that defendant Bur-
ger’s consent decree to withdraw from his position with
Peoples Heritage did not amount to an affirmative with-
drawal from the conspiracy. Specifically, the court finds
that defendant Burger was effectively removed from Peo-
ples Heritage by the Resolution Trust Corporation
(“RTC”) following an investigation which revealed
numerous conflicts of interest on the part of defendant
Burger. Such removal is not an affirmative disavowal of
the conspiracy. Further, the court finds that although
a
App. 34
defendant Burger agreed to not continue his involvement
with Peoples Heritage, he did not remove himself from
his ownership and participation in the joint ventures and
partnerships which had been set up to defraud People’s
Heritage and which remained under his control until the
return of the Indictment. Thus, the court finds that defen-
dant Burger has not carried his burden of proving that he
had withdrawn from the conspiracy in November 1988.
The court further finds that defendant Burger’s state-
ment that his role in the conspiracy terminated in
November 1988, made in conjunction with his petition to
enter a plea of guilty, does not limit the court to making
such factual finding for purposes of sentencing defendant
Burger. When determining whether to accept defendant
Burger’s petition, the court had to make a finding that a
factual basis exists to find that the defendant committed
the offense to which he has pled guilty. United States v.
Montova-Camacho, 644 F.2d 480, (5th Cir. 1981). Thus, in
this case the court had to make a finding that a factual
basis exists which would satisfy the four elements of a
conspiracy, as specifically set forth in United States v.
Hines, 696 F.2d 722, 733 (10th Cir. 1982). These elements
do not require the court to make a finding as to the
duration of the conspiracy. Further, to allow a defendant
to avoid the application of the amended guidelines by
fashioning his plea would be to allow the defendant to
amend the Indictment. Amendment of the Indictment
may only be accomplished by resubmission to the grand
jury. United States v. Russell, 369 U.S. 749, 769 (1963).
Further, because the defendant Burger was a partici-
pant in the overall conspiracy, his contention that he did
not commit any overt acts after November 1988 is
App. 35
unavailing. As the Tenth Circuit held in United States v.
Williams, 897 F.2d 1034, 1040 (10th Cir.), cert. dented, 111 S.
Ct. 2064 (1991) absent any affirmative withdrawal, a
defendant remains a part of the ongoing criminal enter-
prise. Thus, because the court has found that the conspir-
acy continued in existence beyond the effective dates of
the amended guidelines and that defendant Burger had
not effectively withdrawn from the conspiracy, the court
finds that application of the amended guidelines does not
violate the ex post facto clause of the Constitution.!
Similarly, with respect to defendant Cruce, the court
finds that Cruce has offered no evidence that he with-
drew from the conspiracy in November 1988. Defendant
Cruce simply rests on his assertion that no overt acts in
furtherance of the conspiracy occurred after November
1988. For the above reasons previously stated in regard to
defendant Burger, the court finds that application of the
amended Guidelines is appropriate when sentencing
defendant Cruce.? Accordingly, the court will deny
1 The court further notes that application of the amended
Guidelines does not violate the ex post facto clause because the
sentence which may be properly imposed under the unamended
Guidelines would be similar in duration. Under the 1987 Guide-
lines, the court can make an upward departure from the Guide-
lines upon finding that factors warranting such departure exist.
United States v. Fortenbury, 917 F.2d 477, 478 (10th Cir. 1990). The
court finds that this case does present such factors. Thus, the
court notes that the second requirement necessary to establish a
violation of the ex post facto clause, i.e., that the more recent law
impose a harsher penalty than was available at the time the
offense was committed, is not satisfied.
2 The court notes that the case on which defendant relies to
establish and limit the duration of the conspiracy are inapplica-
App. 36
defendant Cruce’s motion to apply the 1987 Sentencing
Guidelines.
Il. WITHDRAWAL OF GUILTY PLEAS
In the event that the court determines that the recent
amendments to the Sentencing Guidelines are applicable,
defendants Burger and Cruce have moved the court to
allow the withdrawal of their guilty pleas.
Rule 32(d) of the Federal Rules of Criminal Procedure
provides that prior to sentencing, “the court may permit
withdrawal of a plea upon a showing by the defendant of
any fair and just reason.” Whether to allow a defendant
to withdraw a guilty plea is within this court’s sound
discretion. United States v. Rhodes, 913 F.2d 839, 845 (10th
Cir.), cert. denied, 111 S.Ct. 1079 (1991). Once a defendant
has entered a guilty plea he has no right to withdraw it.
United States v. Hickok, 907 F.2d 983, 985 (10th Cir. 1990)
(quoting Barker v. Llnited States, 579 F.2d 1219, 1223 (10th
Cir. 1978)). Further, “the defendant bears the burden of
demonstrating a ‘fair and just reason’ for withdrawal of
his guilty plea.” Hickok, 907 F.2d at 985. In determining
whether a defendant has established a “fair and just
reason” the court should consider the follcwing factors:
ble. Specifically, the court finds that United States v. Fiswick, 329
U.S. 211, 217 (1946) dealt with the admissibility of statements
made by co-conspirators after their arrest. Further, the court
finds that Grunewald v. United States, 353 U.S. 391 (1957) dealt
with the issue of establishing that the overt acts in furtherance
of the conspiracy occurred within the statute of limitations
period.
App. 37
(1) whether the defendant has asserted his
innocence;
(2) whether withdrawal would prejudice the
government;
(3) whether the defendant delayed in filing his
motion;
(4) whether withdrawal would substantially
inconvenience the court;
(5) whether close assistance of counsel was
available to the defendant;
(6) whether the plea was knowing and volun-
tary; and
(7) whether the withdrawal would waste judi-
cial resources.
Rhodes, 913 F.2d at 845.
Upon consideration of the above factors, the court
finds that defendants’ motions should be denied. First,
the court finds that neither defendant has asserted his
innocence. Rather, each defendant is upset with the sever-
ity of the sentence which has been recommended in the
presentence investigation reports. Such a reason does not
provide a “fair and just reason” for the withdrawal of a
guilty plea. See United States v. Michaelson, 552 F.2d 472,
475 (2nd Cir. 1977) (defendant’s change of mind regard-
ing his plea after his codefendants’ trial and after his
review of the presentence report did not warrant the
granting of a motion to withdraw plea); United States v.
Marshall, 510 F.2d 792, 795 (D.C. Cir. 1975); United States v.
Needles, 472 F.2d 652, 654 (2nd Cir. 1973).
Second, the court finds that both defendants had
close assistance of counsel prior to entering into their
guilty pleas. Thus, this factor does not mitigate in favor
of either defendant’s motion to withdraw his plea.
a
App. 38
Third, the court finds that withdrawal of their guilty
pleas would prejudice the government significantly
because both defendants would have to be tried. The
facts of this case are extremely complicated and the
defendants have delayed in moving to withdraw their
pleas until completion of a five-week trial in which sev-
eral codefendants were acquitted. Had defendants sought
to withdraw their guilty pleas prior to the commence-
ment of the trial of their codefendants, the government
could have tried all of the indicted defendants at one
time. Further, in this regard, the court finds that with-
drawal of defendants’ guilty pleas would be a substantial
waste of judicial resources. Indeed, the court finds that
because the defendants are primarily upset with their
anticipated sentences, defendant may properly challenge
the sentence ultimately imposed by this court through the
appellate process.
Finally, the court further finds that defendants have
offered no evidence to support their contention that their
pleas were not entered into voluntarily in accordance
with Fed. R. Crim. P. 11. Both defendants were apprised
that they could be imposed maximum sentences of five
years per count, and a maximum find of $250,000. Fur-
ther, the court finds that the defendants were informed
that the Guidelines would be applied. Finally, the court
finds that the defendants were informed that they would
not be allowed to withdraw their guilty pleas if they were
dissatisfied with their sentences. Thus, the court finds no
basis exists for the defendants’ assertion that their pleas
were not knowingly and voluntarily entered. Accord-
ingly, having found no “fair and just reason” to allow the
withdrawal of the defendants’ guilty pleas, the court will
App. 39
deny their alternative motion to withdraw their pleas to
Count | of the Indictment.
ITI.
AMOUNT OF RESTITUTION
Defendant Cruce has moved the court to limit any
restitution order to those amounts attributable speci-
fically to the conduct underlying his conviction.
In determining the amount of restitution, the court is
to consider the amount of loss as result of the offense, the
financial resources of the defendant, the defendant’s
earning capabilities, and other factors which the court
finds appropriate. 18 U.S.C. § 3664(a). According to the
United States Supreme Court, an order of restitution can
only be based on the amount of injury suffered by the
victim as a result of the criminal conduct for which the
defendant has been convicted or has pled guilty. Hughey
v. United States, 110 S. Ct. 1979, 1983-84 (1990). It is
generally inappropriate to include in a restitution order
injuries suffered by the defendant’s acts that are separate
from the particular offense for which the defendant was
convicted, notwithstanding that the injury is related or of
a similar scheme. Hughey, 110 S. Ct. at 1984.
In this case, the court finds that restitution may be
properly based upon those losses which have resulted
from defendant Cruce’s conduct in Counts 1, 18, 19 and
20. Defendant Cruce has moved the court to limit its
calculation of the loss to the RTC to those amounts speci-
fically alleged in Counts 18, 19 and 20. The court finds
that this limitation is simply inappropriate. The court
may also consider those losses which are attributable to
defendant Cruce’s conduct on Count 1. Such conduct is
App. 40
not limited to that conduct described in Counts 18, 19 and
20. Accordingly, the court finds that losses which may be
properly considered by the court would entail those suf-
fered by the RTC as a result of the overall conspiracy
alleged in Count 1. Further, in determining this loss, the
court finds that 18 U.S.C. § 3664(d) allows the court to
base this determination on findings contained in the pre-
sentence report or other testimony or evidence supported
by a preponderance of the evidence. Thus, the court finds
that defendant Cruce’s motion to limit restitution to those
specific amounts alleged in Counts 18, 19, and 20 must be
denied.
IT IS BY THE COURT THEREFORE ORDERED that
defendant Burger’s motion to sentence Burger under the
Sentencing Guidelines effective in December 1988 or, in
the alternative, to allow the defendant to withdraw his
plea is denied.
IT IS FURTHER ORDERED that defendant Cruce’s
conditional motion to withdraw plea of guilty and motion
for determination that the 1987 Sentencing Guidelines
govern the sentencing of defendant rather than the 1989
and 1990 amendments to said guidelines and that restitu-
tion is limited to the counts pled to is denied.
° The court further notes that defendant Cruce’s reliance
upon United States v. Sharp, 927 F.2d 1083 (9th Cir. 1991) is
misplaced. This decision has been withdrawn by the Ninth
Circuit Court of Appeals, and thus, it may not be properly relied
upon.
App. 41
Dated this 31 day of July 1991, at Topeka, Kansas.
/s/ DALE E. SAFFELS
DALE E. SAFFELS
United States District Judge
App. 42
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
UNITED STATES OF )
AMERICA, )
PLaintift ) Case No. 91-40002-01
: ) Case No. 91-40002-03
V. - )
THOMAS A. BURGER, ?
JAMES R. CRUCE, |
Defendants. )
)
MEMORANDUM AND ORDER
(Filed Aug. 22, 1991)
This matter is before the Court on the motions of
defendant Thomas A. Burger (“defendant Burger”) and
defendant James R. Cruce (“defendant Cruce”) for
recusal; defendant Burger’s motion for reconsideration of
this court’s order denying his motion to withdraw his
plea or for resentencing and to dismiss the Indictment;
defendant Burger’s motion for a Franks hearing; and
defendant Burger’s motion for bail pending disposition
of the motion for reconsideration, or pending appeal.
Also before the court is defendant Cruce’s motion for
reconsideration, and to vacate the sentence and for resen-
tencing.
Defendants Burger and Cruce pled guilty to certain
counts contained in an indictment returned on January
10, 1991. This Indictment charged defendants with con-
spiring to obtain monies from Peoples Heritage Federal
Savings and Loan (“Peoples Heritage”) by false or fraud-
ulent pretenses in violation of 18 U.S.C. § 1344; making
$e
App. 43
false, fictitious and fraudulent statements in violation of
18 U.S.C. § 1001; and 23 counts of bank fraud in violation
of 18 U.S.C. § 1344.
On April 17 and 23, 1991, the court accepted defen-
danis Cruce and Burger’s guilty pleas. Following the
preparation of the Presentence Investigation Reports by
the United States Probation Office, both defendants con-
tested the recommendation that the United States Sen-
tencing Guidelines (“Sentencing Guidelines”), as
amended in 1988, and 1989, were applicable to the defen-
dants’ sentences. Subsequently, defendants Burger and
Cruce filed motions requesting that they be sentenced
under the Sentencing Guidelines effective during Novem-
ber 1988, or in the alternative, that they be allowed to
withdraw their guilty pleas. On July 31, 1991, this court
issued a Memorandum and Order in which it denied
defendants’ motions. Both defendants were sentenced on
August 1, 1991, under the amended Sentencing Guide-
lines. Defendant Burger was sentenced to 12 years
imprisonment and was ordered to pay $6,000,000 in resti-
tution. Defendant Cruce was sentenced to 14 years
imprisonment and was ordered to pay $8,000,000 in resti-
tution. Defendants now contend that the court’s previous
ruling and sentences imposed were based upon improper
ex parte contact between the prosecution and the court.
Thus, defendants contend this court should recuse itself,
and vacate its sentences as imposed on August 1, 1991.
MOTIONS TO RECUSE OR DISQUALIFY
Defendants move the court to recuse itself pursuant
to 28 U.S.C. §§ 144 and 455. Whether to recuse itself is a
App. 44
matter within this court’s discretion. Weatherhead v. Globe
Int'l, Inc., 832 F.2d 1226, 1227 (10th Cir. 1987); Hinman v.
Rogers, 831 F.2d 937, 938 (10th Cir. 1987). Title 28, United
States Code, Section 144 provides:
Whenever a party to any proceeding in a district
court makes and files a timely and sufficient
affidavit that the judge before whom the matter
is pending has a personal bias or prejudice
either against him or in favor of any adverse
party, such judge shall proceed no further
therein, but another judge shall be assigned to
hear such proceeding. The affidavit shall state
the facts and the reasons for the belief that bias
Or prejudice exists... .
In determining whether the affidavits are sufficient to
establish that a judge has a personal bias or prejudice
against him or in favor of an adverse party, the court
must accept the truth of the facts alleged. Hinman, 831
F.2d at 939 (citing United States v. Gigax, 605 F.2d 507, 511
(10th Cir. 1979)). Nonetheless, “conclusions, rumors,
beliefs, and opinions are not sufficient to form a basis for
disqualification.” Hinman, 831 F.2d at 939. Further, the
atfidavit must state with particularity the “facts of time,
place, persons, occasion, and circumstances.” Id. Finally,
the “affidavit is strictly construed against the affiant, and
there is a substantial burden on the moving party to
demonstrate the judge is not impartial.” Id.
A different standard for recusal applies under 28
U.S.C. § 455. Under this section, the applicable test is
“whether a reasonable person, knowing all the relevant
tacts, would harbor doubts about the judge’s impar-
tiality.” United States v. Hines, 696 F.2d 722, 728 (10th Cir.
App. 45
1982). Under this provision, the factual allegations con-
tained in the affidavit do not have to be taken as true.
Hinman, 831 F.2d at 939 (citing United States v. Greenough,
782 F.2d 1556, 1558 (11th Cir. 1986)). Moreover, a court is
not limited to those facts asserted in the affidavit. Hin-
man, 831 F.2d at 939 (citing Gilbert v. Little Rock, 722 F.2d
1390, 1398 (8th Cir. 1983) (judge may consider all the
circumstances)).
Upon consideration of the defendants’ motions and
applicable law, the court finds that the defendants’
motions for recusal should be denied. First, and perhaps
of foremost importance, the court finds that the basis
upon which defendants’ motions are founded, 1.e., that ex
parte contact occurred between the court and the prosecu-
tion thereby prejudicing the court against the defendants,
is faulty. Quite simply, no ex parte communication
occurred between the prosecution and the court. Black's
Law Dictionary defines ex parte as “on one side only; by or
for one party; done for, in behalf of, or on the application
of, one party only.” The affidavits filed by both defen-
dants allege improper contact between the court and the
FDIC and RTC. However, the court finds that the letters
complained of by the defendants are letters from the
victim of the defendants’ crimes, not from the prosecu-
tion. Thus, even assuming the factual allegations con-
tained in the affidavits are true, the facts simply do not
support that any ex parte contact occurred between the
court and the prosecution. Indeed, the letters are part of
the victim impact aspect of the presentence investigation
which the probation office is statutorily required to
ee
App. 46
investigate and request.! See 18 U.S.C. §§ 3663 and 3664.
Letters such as these are routinely received by the court
and are forwarded to the United States Probation Office
so that a proper investigation may be conducted in accor-
dance with the Congressional mandate that the impact on
the victim be assessed.? Subsequently, allegations con-
tained in such letters are then either excluded or included |
in the Presentence Investigation Report so that the parties
have a chance to dispute and refute any factual allega-
tions. This was the manner in which the letters from the
FDIC and its Chairman, L. William Seidman were han-
dled.
Further, the court finds that defendants’ affidavits
contain no statements made by this court which would
indicate that it is biased toward either side in this case, or
that it was relying upon allegations contained in the
1 The court further notes that in their plea agreements,
defendants consented to the submission of such information by
the federal regulatory bodies involved.
? The court notes that letters from those who wish to speak
on behalf of the defendant for a light sentence are treated in the |
same manner. Under the interpretation asserted by the defen-
dants, such contacts would be impermissible ex parte communi-
cations.
Further, the court finds that the amount of restitution
sought by the victim $6,000,000 and $8,000,000 was the amount
which had been promoted by the probation office. It is not
improper for a court to hold a presentence conference with the
probation staff. See United States v. Story, 716 F.2d 1088, 1090 (6th
Cir. 1988). Further, the court notes that under applicable law, the
court could have imposed an amount in restitution many times
that which was ultimately imposed. The court’s position with
respect to restitution was spelled out in its Memorandum and
Order of July 31, 1991.
4 ARENA
App. 47
letters in dispute. Rather, the defendants’ complaints cen-
ter around the court’s previous rulings. Recusal may not
be based upon judicial bias, i.e., the judge’s view of the
law. Rather, it must be personal. As the Tenth Circuit has
stated, “[a] motion to recuse cannot be based solely on
adverse rulings.” Willner v. Budig, 848 F.2d 1032, 1035
(10th Cir. 1988), cert. denied, 488 U.S. 1031 (1989) (citing
Willner v. University of Kansas, 848 F.2d 1023, 1028 (10th
Cir. 1988) (per curiam), cert. denied, 488 U.S. 1031 (1989));
See also Antonello v. Wunch, 500 F.2d 1260, 1262 (10th Cir.
1974); United States v. Story, 716 F.2d at 1090. Moreover,
rumors, beliefs, conclusions and opinions are not suffi-
cient to form a basis for disqualification. Hinman, 831 F.2d
at 939.
The court finds that defendants’ affidavits contain
speculation and unfounded conclusions. Further, any per-
sonal knowledge of the facts of this case held by the court
was derived solely from presiding over a lengthy trial of
codefendants. Personal knowledge derived from presid-
ing over a trial of codefendants may be considered by a
court when imposing a sentence. See United States v.
| Beaulieu, 893 F.2d 1177, 1179 (10th Cir. 1990), cert. denied,
| 110 S. Ct. 3302 (1990). Thus, defendants’ motions for
recusal due to personal bias resulting from ex parte con-
tact under 28 U.S.C. § 144 must fail.
Moreover, when applying the standard tor recusal
under 28 U.S.C. § 455, the court finds that in this case, a
reasonable person knowing all the relevant facts would
| not harbor doubts about the judge’s impartiality. The
| court finds that its earlier ruling which denied the defen-
dants’ motions for sentencing under the 1988 Sentencing
Guidelines, or in the alternative, to withdraw their guilty
App. 48
pleas, was based upon express findings contained in its
Memorandum and Order filed on July 31, 1991. Clearly,
the finding made by the court that the defendants should
be sentenced according to the Sentencing Guidelines, as
amended, was based upon two factors, namely that the
defendants pled guilty to a conspiracy continuing up
until the issuance of the Indictment on January 10, 1991,
and that the defendants continued their involvement in
the conspiracy beyond the effective dates of the amended
guidelines. See United States v. Morrison, F.2d ___ (10th
Cir. 1991), 1991 WL 115460, (No. 90-1364, filed July 2,
1991) (citing United States v. Broce, 488 U.S. 563, 570
(1989)); see also United States v. Edgecomb, 910 F.2d 1309,
1312 (6th Cir. 1990) (“If [defendant] disagreed with the
dates of the [scheme], he should have attempted to nego-
tiate a change in the plea agreement”). Thus finding was
simply not founded on unsubstantiated allegations of
witness tampering, as defendant Burger asserts.°
Further, the court finds that each sentencing calcula-
tion ultimately made by the court was expressly based
upon factual findings as appended to the Presentence
Report, and oral findings made at the time of sentencing.
Such a method of making findings is satisfactory. See
United States v. Golightly, 811 F.2d 1366, 1367 (10th Cir.
1987). Similarly, the court finds that any departure from
3 Moreover, the court notes that defendant Burger had an
opportunity to refute these allegations, and that they were
stricken from the Presentence Investigation Report. Thus, these
allegations were simply not a factor considered when the court
imposed defendant Burger’s sentence.
——————
App. 49
the Sentencing Guidelines, in the event that the defen-
dants are to be sentenced under the original Sentencing
Guidelines, was expressly supported by factual findings
based upon evidence which the defendants were given an
opportunity to refute prior to sentencing.‘ Thus, the court
finds that in considering all of the relevant facts and
circumstances of this case, a reasonable person would not
find the court to be biased in its previous rulings both in
the denial or defendants’ motions for sentencing under
the 1988 Sentencing Guidelines, or in the sentences ulti-
mately imposed. Quite simply, the defendants have failed
to demonstrate that the court relied upon improper infor-
mation, or for that matter, that the court had received any
improper information. United States v. Kenny, 645 F.2d
1323, 1348 (9th Cir. 1981), cert. denied, 452 U.S. 920 (1981).
The two letters in dispute were not used in determining
the sentences. Rather, the sentences were based upon the
information contained in the Presentence Investigation
Report, as amended and adopted by the court following
two separate evidentiary hearings involving objections of
both defendants. In addition, the court considered its
personal knowledge derived from presiding over the
lengthy trial of defendants’ alleged co-conspirators. Nei-
ther source of information is improper.
4 In this regard, the court notes that both defendants Cruce
and Burger were sent notice on July 25, 1991, that various fac-
tors had been identified by the probation office which would
warrant an upward departure. Response of the Government in
Opposition to Defendant Burger’s Motions, exhibit 1 (Doc. 375).
This notice listed factors and reasons which support an upward
departure. Such notice is sufficient. United States v. Fortenbury,
917 F.2d 477, 480 (10th Cir. 1990).
App. 50
MOTIONS FOR RECONSIDERATION
The court finds that in disposing of defendants’
motions for recusal, it has dealt with defendants’ motions
for- reconsideration which are primarily based upon
defendants’ allegation of ex parte contact with the pros-_
ecution. Nonetheless, the court further finds that it has
previously reviewed and rejected defendants’ contention
that the Rule 11 hearings conducted prior to accepting
defendants’ guilty pleas were infirm. The court finds that
both defendants were informed that they were to be
sentenced under the Sentencing Guidelines, and that they
could be sentenced to the maximum of five years per
count and that punishment for each count could be
ordered to run consecutively. Thus, the court finds that
the requirements of Rule 11, i.e., that the defendant be
informed of the maximum sentence which could be
imposed, were satisfied and that the court’s denial of
defendants’ motions to withdraw their guilty pleas was
proper. See United States v. Williams, 919 F.2d 1451, 1456
(10th Cir. 1990), cert. denied, 111 S. Ct. 1604 (1991).
The court further finds that the fact that an estimate
made by a defendant’s attorney with respect to the maxi-
mum sentence which may be imposed does not coincide
with one the court ultimately imposes, is not a proper
ground for the withdrawal of a plea. See United States v.
Stephens, 906 F.2d 251, 253-54 (6th Cir. 1990); United States
v. Garcia, 909 F.2d 1346, 1348 (9th Cir. 1990).5 Thus, the
5 Further, to the extent that defendant seeks to reassert the
argument that the court failed to make a factual finding that the
conspiracy, as alleged in the Indictment existed, the court finds
that it has previously reviewed and rejected this argument, the
court will not revisit it.
App. 51
court’s denial of defendants’ motions to withdraw their
guilty pleas was proper, and defendants’ motions for
reconsideration will be denied.6
FRANKS HEARING
Defendants move the court for an evidentiary hear-
ing. In support, defendants cite Franks v. Delaware, 438
U.S. 154 (1978). Whether a defendant is entitled to an
evidentiary hearing in regard to sentencing, is a matter
within this court’s discretion. United States v. Rutter, 897
F.2d 1558, 1565 (10th Cir. 1990); United States v. Peterman,
841 F.2d 1474 (10th Cir. 1988). Further, where the dispute
is more legal than factual, a hearing is not required.
Rutter, 894 F.2d at 1565.
_ The court finds that the dispute in this case focuses
primarily upon the court’s decision to apply the amended
Sentencing Guidelines. Because this dispute is primarily
legal, the court finds that no evidentiary hearing will
advance the resolution of this matter. Accordingly, the
© The court further finds that defendants’ arguments that
the Indictment violates the double jeopardy clause, and thus,
should be dismissed are without merit. The crimes charged in
this Indictment involve bank fraud, under the relevant statute,
18 U.S.C. § 1344, an offense occurs upon each execution or
attempted execution of a scheme to defraud. United States v.
Poliak, 823 F.2d 371, 372 (9th Cir. 1987), cert. denied, 485 U.S. 1029
(1988). Thus, each count of the Indictment involving a draw
upon a line of credit would constitute a separate execution of
the scheme and would be punishable as a separate crime. The
court further notes that this argument is untimely because it
was first raised in defendants’ motions for reconsideration. Fed.
R. Crim. P. 12(f).
App. 52
court will deny defendant Burger’s motion for a Franks
hearing.
BAIL PENDING APPEAL
Finally, defendant Burger has filed a motion request-
ing an order granting bail pending appeal pursuant to
Fed. R. Crim. P. 46(c) and 18 U.S.C. § 3143. Defendant
Burger has also moved the court for expedited consider-
ation of his motions. The court will grant defendant Bur-
ger’s motion insofar as he requests expedited
consideration.
Title 18, United States Code, Section 3143(b) pro-
vides:
Release or detention pending appeal by the
defendant. - (1) Except as provided in para-
graph (2), the judicial officer shall order that a
person who has been found guilty of an offense
and sentenced to a term of imprisonment, and
who has filed an appeal or a petition for a writ
of certiorari, be detained, unless the judicial offi-
cer finds —
(A) by clear and convincing evidence
that the person is not likely to flee or pose a
danger to the safety of any other person or
the community if released under section
3142(b) or (c) of this title; and
(B) that the appeal is not for the pur-
pose of delay and raises a substantial ques-
tion of law or fact likely to result in -
(i) reversal,
(ii) an order for a new trial,
App. 53
(iii) a sentence that does not include a
term of imprisonment, or
(iv) a reduced sentence to a term of
imprisonment less than the total of the
time already served plus the expected
duration of the appeal process. . . .
In applying this provision, the defendant must first estab-
lish by clear and convincing evidence that defendant is
not iikely to flee or pose a danger to the safety of any
other person or to the community if released, and that the
defendant has established by a preponderance of the
evidence that the appeal has not been filed for purposes
of delay. Further, the court must find that the appeal
raises a substantial question of law or fact; and that if the
substantial question is determined favorably to the defen-
dant on appeal, that decision is likely to result in reversal
or an order for a new trial of all counts on which
imprisonment has been imposed. United States v. Affleck,
765 F.2d 944, 953 (10th Cir. 1985).
Following the defendant's establishment of the first
two criteria, the court must follow a two-step analysis.
See Affleck, 765 F.2d 944, 952 (10th Cir. 1985) (citing United
States v. Miller, 753 F.2d 19 (3d Cir. 1985)). Accordingly,
the court must first determine whether the appeal raises a
“substantial” question of law or fact. Second, the court
must determine whether a favorable ruling for the defen-
dant on appeal would result in reversal or an order for a
new trial of all counts on which imprisonment has been
imposed. Affleck, 765 F.2d at 952. A “substantial question”
is a “ ‘close question or one that very well could be
decided the other way.’” Id. (internal quotes omitted)
(quoting United States v. Giancola, 754 F.2d 898, 901 (11th
App. 54
Cir. 1985), cert. denied, 479 U.S. 1018 (1986)). Whether a
particular question is “substantial,” is a question which
must be ultimately decided upon a case-by-case basis.
Affleck, 765 F.2d at 952.
Upon consideration of the arguments and authorities
cited by the parties, the court finds that defendant Bur-
ger’s motion for bail pending appeal must be denied.
Initially, the court notes that defendant Burger has not
sought to establish the first two requirements that he is
not likely to flee and that the appeal is not filed for
purposes of delay. Thus, the court finds that defendant
Burger’s motion should be denied on that basis alone.
Further, the court finds that the question on appeal,
namely whether the defendant may be properly sen-
tenced under the amended guidelines because he has
pled guilty to a crime which continued beyond the effec-
tive date of the Indictment, is not a “substantial ques-
tion.” As previously cited by the court, the Tenth Circuit
Court of Appeals has held that a defendant may be
sentenced in accordance with the crime, as charged in the
Indictment, to which he pled guilty to. See Morrison,
F.2d __ (10th Cir. 1991), 1991 WL 115460 (citing United
States v. Broce, 488 U.S. 563 (1989)). Thus, because the
issue raised by the defendant has been decided by con-
trolling precedent, it may not be properly characterized a
“substantial” question. Affleck, 765 F.2d at 952. Further,
the court finds that reversal of this court’s decision will
not lead to a new trial on all counts. Defendant Burger
has never contested his conviction with respect to four of
the five counts to which he pled guilty. Finally, reversal
would simply lead to resentencing, which would not be a
reduced sentence to a term of imprisonment less than the
i i
App. 55
total of the time already served plus the expected dura-
y tion of the appeal process. Accordingly, for the foregoing
reasons, the court finds that defendant Burger’s motion
for bail pending appeal will be denied.
IT IS BY THE COURT THEREFORE ORDERED that
the motion of defendant Burger for reconsideration of the
order denying his motion to withdraw the plea or for
resentencing, to dismiss the Indictment, and for a Franks
hearing (Doc. 368) is denied.
IT IS FURTHER ORDERED that the motion of
defendant Burger for recusal under 28 U.S.C. § 144 and 28
U.S.C. § 455 (Doc. 372) is denied.
IT IS FURTHER ORDERED that the motion of
defendant Burger for an evidentiary hearing and for oral
argument (Doc. 374) is denied.
" IT IS FURTHER ORDERED that the motion of
t defendant Burger for bail pending consideration of the
p motion for reconsideration, and if that is denied, pending
p appeal, and for expedited consideration of the motion
7 (Doc. 380) is denied in part, and granted in part, consis-
rr "3 wer e
d ; tent with the above memorandum and order.
e IT IS FURTHER ORDERED that the motion of
a defendant Cruce to disqualify and recuse (Doc. 365) is
a denied.
r,
T IT IS FURTHER ORDERED that the motion of
‘ defendant Cruce for reconsideration and to vacate sen-
f tence and for resentencing (Doc. 366) is denied.
1 | If IS FURTHER ORDERED that the original sen-
a | tences and reporting dates are affirmed and remain in
e place.
App. 56
Dated this 22 day of August 1991, at Topeka, Kansas.
/s/ DALE E. SAFFELS
DALE E. SAFFELS
United States District Judge
————
iS.
App. 57
UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT
UNITED STATES OF
AMERICA,
Plaintiff-Appellee,
V.
JAMES R. CRUCE,
No. 91-3274
Defendant-Appellant.
Ne ee ee ee ee ee”
ORDER
Filed July 21, 1992
Before McKAY, Chief Judge, BARRETT, LOGAN,
SEYMOUR, MOORE, ANDERSON, TACHA, BALDOCK,
BRORBY, EBEL, KELLY, Circuit Judges, and BRIMMER*,
District Judge.
This matter comes on for consideration of appellant's
petition for rehearing and suggestion for rehearing en
banc in the captioned case.
*The Honorable Clarence A. Brimmer, United States District
Judge for the District of Wyoming, sitting by designation.
ee
i
App. 58
Upon consideration whereof, the petition for rehear-
ing is denied by the panel who rendered the decision
sought to be reheard.
In accordance with Rule 35(b) of the Federal Rules of
Appellate Procedure, the suggestion for rehearing en
banc was transmitted to the members of the panel and to
all the judges of the court in regular active service. No
member of the panel and no judge in regular active
service on the court having requested that the court be
polled on rehearing en banc, Rule 35, Federal Rules of
Appellate Procedure, the suggestion for rehearing en
banc is denied.
. Entered for the Court
ROBERT L. HOECKER, Clerk |
By: /s/ Kelly Clason
Kelly Clason
Deputy Clerk
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