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U.S. v. SAVIN

May 21, 2004.

UNITED STATES OF AMERICA, -against- PATRICK SAVIN, Defendant


The opinion of the court was delivered by: ROBERT SWEET, Senior District Judge

SENTENCING OPINION

Defendant Patrick Savin ("Savin") moves for a "cumulative effects" downward departure under United States Sentencing Guidelines ("U.S.S.G." or the "Guidelines") § 5K2.0 and 18 U.S.C. § 3553 (b)(1), and pursuant to recent Second Circuit opinions. For the reasons set forth below, the motion is granted, and the Court will downwardly depart four levels.

Prior Proceedings

  On March 13, 2002, Savin pleaded guilty to one count of wire fraud in violation of 18 U.S.C. § 1343 and one count of perjury in violation of 18 U.S.C. § 1623. The details of the offense are laid out in United States v. Savin, 00 Cr. 45, 2002 WL 31520472 (S.D.N.Y. Oct. 22, 2002), familiarity with which is presumed.

  On October 21, 2002, Savin was sentenced to thirty-three months' imprisonment followed by three years supervised release. The sentence was based on the finding by this Court that the four-level Sentencing Guidelines enhancement under U.S.S.G. § 2 F1. 1(b)(6)(b) for an offense that "affected a financial institution" and from which "the defendant derived more than $1,000,000 in gross receipts" was not applicable to Savin's sentence. See id. at *4. It was held that § 2 Fl.1(b)(6)(b) did not apply because Mezzonen, S.A. ("Mezzonen"), the institution which Savin defrauded, was not a "financial institution" under the law of Luxembourg, where Mezzonen is organized and has its principal place of business. See id. The government appealed the decision, and the Second Circuit reversed, holding that a "foreign investment company," as that term is defined in Application Note 14 to U.S.S.G. § 2 F1.1,
includes a company located outside the United States substantially engaged in the business of investing in securities of other companies, whether or not it is an entity that is an "investment company" under the law of the jurisdiction where it is registered and where it has its principal place of business.
United States v. Savin, 349 F.3d 27, 39 (2d Cir. 2003). The case was remanded to this Court "for resentencing in the course of which it will be required to determine whether Mezzonen was a foreign investment company' or `similar entity.'" Id.

 Discussion

  Following the Second Circuit's decision, counsel for Savin "reluctantly concluded that the breadth of that decision prevents us from arguing that the four-level Sentencing Guidelines `financial institution' enhancement does not apply at resentencing." Letter to Court from Edward J.M. Little, dated April 22, 2004 ("4/22/04 Letter"), at 1. However, Savin argues that he qualifies for the "cumulative effects" downward departure announced by the Second Circuit in a series of three decisions: United States v. Lauersen, 348 F.3d 329 (2d Cir. 2003), United States v. Jackson, 346 F.3d 22 (2d Cir. 2003), and on rehearing of both cases, United States v. Lauersen and Jackson, 362 F.3d 160 (2d Cir. 2004), cert. denied, 2004 WL 817165 (U.S. May 17, 2004) (hereinafter "Lauersen/Jackson"). In these decisions, the Second Circuit explained that a sentencing court in its discretion may downwardly depart, pursuant to 18 U.S.C. § 3553(b)(1) and U.S.S.G. § 5K2.0, "when the addition of substantially overlapping enhancements results in a significant increase in the sentencing range minimum (as it does at the higher end of the sentencing table)." Lauersen/Jackson, 362 F.3d at 164.

 The Plea Agreement Does Not Preclude Savin from Making A Downward Departure Motion

  The government argues that Savin is precluded from making a motion for downward departure based on the plain terms of the plea agreement entered into by Savin and the government on March 12, 2002 (the "Plea Agreement"). The Plea Agreement states, in relevant part:
The Government contends that, pursuant to U.S.S.G. § 2 F1.1(b)(6)(b), the base offense is increased by 4 levels . . . because the offense affected a financial institution and the defendant derived more than $1,000,000 in gross receipts from the offense. The defendant contends that U.S.S.G. § 2 F1.1(b)(6)(b) is inapplicable. The parties agree that the parties may litigate this issue at sentencing. Based upon the calculations set forth above, the defendant's stipulated sentencing Guidelines ranges are 33 to 41 months (level 20) if the Court determines that U.S.S.G. § 2 F1.1(b)(6)(b) is inapplicable and 51 to 63 months (level 24) if the Court determines that U.S.S.G. § 2 F1.1(b)(6) (b) is applicable . . .
The parties agree that neither a downward nor an upward departure from the Stipulated Guidelines Ranges set forth above is warranted. Accordingly, neither party will seek such a departure or adjustment, or suggest that the Court sua sponte consider such a departure or adjustment.
. . . nothing in this agreement limits the right of the parties . . . (ii) to make any arguments regarding where within the Stipulated Guidelines Ranges set forth above (or any other range as the Court may determine) the defendant should be sentenced.
. . . In the event that the Probation Department or the Court contemplates any Guidelines adjustments, departures, or calculations different from those stipulated to above, the parties reserve the right to answer any inquiries and to make all appropriate arguments concerning the same.
Plea Agreement at 3-5.

  "Principles of contract law and special due process concerns for fairness govern [the] interpretation of plea agreements." Spence v. Superintendent, Great Meadow Correctional Facility. 219 F.3d 162, 167-68 (2dCir. 2000) (citing United States v. Rodgers, 101 F.3d 247, 253 (2d Cir. 1996)). Further, the rules of contract law have to be applied to plea agreements with two things in mind which may require their tempering in particular cases. First, the defendant's underlying "contract" right is constitutionally based and therefore reflects concerns that differ fundamentally from and run wider than those of commercial contract law. Second, with respect to federal prosecutions, the courts' concerns run even wider than protection of the defendant's individual constitutional rights — to concerns for the honor of the government, public confidence in the fair administration of justice, and the effective administration of justice in a federal scheme of government.

 United States v. Ready, 82 F.3d 551, 558 (2d Cir. 1996) (quoting United States v. Harvey, 791 F.2d 294, 300 (4th Cir. 1986)).

  An agreement not to make a downward departure is enforceable if the defendant knowingly and voluntarily entered into the plea agreement. See United States v. Beimah, 3 F.3d 609, 611 (2d Cir. 1993) ("Given that defendants can waive elemental constitutional and statutory rights, there is no reason why defendants should not be able to waive their less fundamental prerogative to request a downward departure.").

 
To determine whether a plea agreement has been breached, we "look[] to the reasonable understanding of the parties as to the terms of the agreement." United States v. Colon, 220 F.3d 48, 51 (2d Cir. 2000). Because the government "`ordinarily has certain awesome advantages in bargaining power,'" any ambiguities in the agreement must be resolved in favor of the defendant. United States v. Padilla, 186 F.3d 136, 140 (2d Cir. 1999) (quoting United States v. Ready, 82 F.3d 551, 558-59 (2d Cir. 1996)).
United States v. Riera, 298 F.3d 128, 133 (2d Cir. 2002). ".Contract language is unambiguous when it has a definite and precise meaning, unattended by danger of misconception in the purport of the [contract] itself, and concerning which there is no reasonable basis for a difference of opinion." Photopaint Technologies. LLC v. Smartlens Corp., 335 F.3d 152, 160 (2d Cir. 2003) (quoting Met. Life Ins. Co. v. RJR Nabisco, Inc., 906 F.2d 884, 889 (2d Cir. 1990)). Further, because of "the Government's advantage in bargaining power and recognizing that the Government usually drafts plea agreements," the Second Circuit "construe[s] such agreements `strictly against the Government.'" United States v. Cunningham, 292 F.3d 115, 117 (2d Cir. 2002) (quoting Ready. 82 F.3d at 559).

  The government argues that because Savin has acknowledged that U.S.S.G. § 2 F1.1(b)(6)(b) is applicable, there is only one Stipulated Guideline Range, namely 51 to 63 months, corresponding to adjusted offense level 24. Even if there were two possible ranges before the applicability of U.S.S.G. § 2 F1.1(b)(6)(b) had ...


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