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U.S. v. Marcello

filed: January 11, 1994.

UNITED STATES OF AMERICA, APPELLEE
v.
W. DAVID MARCELLO, APPELLANT



Appeal from the United States District Court for the Middle District of Pennsylvania. D.C. Criminal Action No. 92-00264.

Present: Hutchinson, Cowen and Nygaard, Circuit Judges.

Author: Hutchinson

Opinion OF THE COURT

HUTCHINSON, Circuit Judge.

Appellant, W. David Marcello ("Marcello"), appeals a judgment and commitment order of the United States District Court for the Middle District of Pennsylvania. Marcello was convicted of structuring bank deposits in order to evade reporting requirements in violation of 31 U.S.C.A. §§ 5322(a), 5324(a)(3) (West Supp. 1993). At sentencing, he argued that a downward departure in his sentence was appropriate either because his conduct did not cause the harm or evil which the statute sought to prevent, see United States Sentencing Commission, Guidelines Manual, § 5K2.11 (Nov. 1992), or because his conduct constituted "aberrant behavior," see id. Ch. 1, Pt. A, intro. comment. P 4(d). The district court refused to depart on either ground. It held that it lacked authority to depart downward under section 5K2.11 based upon United States v. Shirk, 981 F.2d 1382 (3d Cir. 1992), petition for cert. filed, 61 U.S.L.W. 3805 (U.S. May 17, 1993) (No. 92-1841), and that Marcello's conduct did not constitute aberrant behavior under the standard adopted by a majority of the courts of appeals.

While this case was pending on appeal, the applicable guideline on structuring, section 2S1.3, was amended. The amendment, if in place at the time of Marcello's sentencing, would have provided him a chance for more lenient treatment by reducing his offense level from eleven to nine. In such instances, it appears that § 3582(c) of the Sentencing Reform Act, at the very least, gives a district court discretion to resentence a defendant under the later, more lenient version of this Guideline. See Sentencing Reform Act of 1984, 18 U.S.C.A. § 3582 (West 1985 & Supp. 1993). We will therefore remand the case to the district court for it to consider whether, under the November 1993 amended version of Guideline section 2S1.3, which became effective while Marcello's appeal was pending, a reduction in Marcello's sentence pursuant to § 3582(c)(2) and Guideline section 1B1.10(d) is warranted.*fn1

Because the downward departure issue may still come up on remand, and especially because this Court has not yet defined what constitutes "aberrant behavior," we will consider the issues already before us for the guidance of the district court on remand. On those issues, we hold that the district did not err in its interpretation of Shirk and that its refusal to depart under section 5K2.11 was therefore not error. On aberrant behavior, the district court adopted the standard set forth by the United States Courts of Appeals for the Fourth, Fifth and Seventh Circuits. According to the district court, Marcello's conduct did not constitute aberrant behavior under this standard because it involved some degree of planning and thought. We believe the correct standard for determining what constitutes aberrant behavior is substantially the same as the one the district court applied.

I.

Since 1978, Marcello has been an attorney engaged in the practice of law. In 1983, he began representing Elmer Drum ("Drum"), a local businessman, in connection with establishing trusts for his children. In 1986, Marcello also represented Drum in a criminal tax case and continued to represent him through 1992 in an ongoing dispute with the Internal Revenue Service ("IRS") regarding the payment of back taxes and civil penalties.

In November 1990, Marcello began negotiating with Drum for a loan that Marcello's law firm wanted to use as a down payment for the purchase of an office building. Drum agreed to loan the firm $75,000.00 at 8% interest over fifteen years. During December 1990, Marcello received from Drum $75,000.00 in $50 and $100 bills. This money came from a trust fund Drum had established for his son.

Marcello took the loan money and opened a new checking account with a $9,000.00 cash deposit. On the same date, he applied for a safe deposit box. Because the vault which contained the safe deposit boxes was locked for the day, the bank informed Marcello that the vault would not be accessible until the following day. Marcello then asked bank officials to store his attache case containing the currency in the main vault overnight. Bank officials agreed but informed him that they were required to count the currency and issue Marcello a receipt. The bank counted the currency which totalled in excess of $60,000.00. The next day, December 20, 1990, Marcello returned to the bank, retrieved his attache case, deposited another $9,000.00 into the checking account, and placed the remaining currency in a safe deposit box. On each of five more successive working days, Marcello returned to the bank and deposited $9,000.00 from the safe deposit box into the account. Marcello's cash deposits to the account totalled $63,000.00.

On October 19, 1992, a one-count criminal information filed in the United States District Court for the Middle District of Pennsylvania charged Marcello with structuring bank deposits, totalling $63,000.00, in order to evade reporting requirements in violation of 31 U.S.C.A. §§ 5322(a), 5324(3). Federal law requires that financial institutions file a Form 4789, Currency Transaction Report ("CTR"), for each deposit involving cash in excess of $10,000.00. Marcello admits that he was aware of these reporting requirements at the time he structured the funds and that by structuring the deposits in this manner, he was attempting to prevent the bank from filing the CTRs. No criminal tax evasion charges were brought.

Marcello agreed to plead guilty. At his arraignment on November 3, 1992, he attempted to enter a guilty plea but the district court refused to accept it. The court believed Marcello was not being forthright in explaining his conduct. On November 16, 1992, Marcello again appeared and entered a plea of guilty in accordance with a plea agreement. The district court accepted the plea and ordered a presentence report. Marcello filed objections to eight paragraphs of the report. The district court scheduled a presentence hearing for February 12, 1993, to consider Marcello's objections.

At the pre-sentence hearing, Marcello asserted two bases for a downward departure. First, he argued that under section 5K2.11 of the Sentencing Guidelines his conduct did not cause the harm or evil which 31 U.S.C.A. §§ 5322(a), 5324(3) sought to prevent. Second, he argued that his conduct constituted aberrant behavior.

By opinion and order dated March 2, 1993, the district court overruled Marcello's objections to the presentence report and denied his motion for a downward departure from the Guidelines. It believed it lacked the authority to depart downward under section 5K2.11 based upon our decision in Shirk. With respect to Marcello's aberrant behavior argument, the district court rejected the Ninth Circuit's standard for aberrant behavior and instead adopted that used by the Fourth, Fifth and Seventh Circuits. Under this standard, it held that Marcello's conduct did not rise to the level of aberrant behavior.

Thus, Marcello's base offense level was thirteen based on the 1992 version of section 2S1.3 of the Guidelines which was in effect at the time of sentencing. See U.S.S.G. § 2S1.3 (Nov. 1992) (providing for base offense level of thirteen "if the defendant: (A) structured transactions to evade reporting requirements"). The district court allowed a two-point reduction for acceptance of responsibility so that Marcello's total offense level was eleven. This resulted in a guideline imprisonment range of eight to fourteen months.

On March 12, 1993, Marcello was sentenced to a term of incarceration of four months and a two year supervised release with the first four months of the supervised release to be served in in-house detention. The court also fined Marcello $2,000.00. He was released on his own recognizance pending appeal.

Marcello filed a timely notice of appeal.

II.

The district court had subject matter jurisdiction under 18 U.S.C.A. § 3231 (West 1993). We have jurisdiction over the appeal from the district court's judgment and commitment order under 18 U.S.C.A. § 3742 (West 1993) and 28 U.S.C.A. § 1291 (West 1993). We have jurisdiction to review de novo the district court's decision not to depart under section 5K2.11 because it believed it did not have the authority to depart. See United States v. Denardi, 892 F.2d 269, 271-72 (3d Cir. 1989).

We also have jurisdiction to review the district court's adoption of the legal standard from which to Judge what constitutes aberrant behavior. The district court stated:

We are of the view that the rationale set forth in the cases from the Seventh, Fifth and Fourth Circuits is the appropriate analysis for determining whether to depart on the basis of aberrant behavior. Using the Ninth Circuit's reasoning, any first time offender may well be entitled to a downward departure based on aberrant behavior. However, this Conclusion by the Ninth Circuit ignores other provisions of the Guidelines which take into account a person's prior criminal history. (See U.S.S.G. ยง 5H1.8). To accept the Ninth Circuit's analysis would result in a double counting of no prior criminal record for a first time offender. As a consequence, the Court would be free to ignore ...


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