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United States v. Pennavaria

April 24, 2006


On Appeal from the United States District Court for the Eastern District of Pennsylvania, (D.C. No. 02-cr-00172-28), District Judge: Honorable Stewart Dalzell.

The opinion of the court was delivered by: Fuentes, Circuit Judge.


Submitted Under Third Circuit LAR 34.1(a) March 2, 2006

Before: SLOVITER and FUENTES, Circuit Judges, and RESTANI,*fn1 Judge.


The Government appeals Thomas Pennavaria's 46-month prison sentence for money laundering conspiracy and substantive money laundering. The Government seeks a remand for resentencing pursuant to United States v. Booker, 543 U.S. 220 (2005), arguing that the District Court erred when it refused to increase Pennavaria's sentence on the basis of judge-found facts. In response, Pennavaria contends that his sentence was lawfully imposed and that a remand for resentencing would violate the ex post facto principles of the Due Process Clause. For the reasons stated below, we will vacate Pennavaria's sentence and remand the case for resentencing under Booker.

I. Background

Thomas Pennavaria operated a car lot, J&B Motorcars ("J&B"), in Murraysville, Pennsylvania, near Pittsburgh. Between January 30, 1998, and July 24, 2001, Pennavaria used J&B to conduct money laundering transactions with various co-conspirators. Specifically, Pennavaria obtained already-leased luxury vehicles in exchange for his assurance that he would make the required payments on the leases. Pennavaria then "sub-leased" these luxury vehicles for a premium-including a substantial cash down payment in addition to monthly payments-to members of a massive cocaine and crack cocaine conspiracy based in Philadelphia. The vehicles remained titled and registered in the name of the original lessor, the original lessee, or one of Pennavaria's business names, such as J&B or Leasing Unlimited. The "sub-lease" arrangements were hidden from both the original lessor and the Commonwealth of Pennsylvania. Pennavaria's co-conspirators used these vehicles in Philadelphia for a variety of drug transactions and related affairs, including drug-related shootings.

Pennavaria was indicted on October 24, 2002, along with 36 co-defendants. The 135-count indictment included charges for cocaine and crack cocaine distribution conspiracy, in violation of 21 U.S.C. § 846; various drug offenses, in violation of 21 U.S.C. §§ 841(a)(1), 841(b)(1)(B), and 860; use of telephones in furtherance of drug crimes, in violation of 21 U.S.C. § 843; money laundering conspiracy, in violation of 18 U.S.C. § 1956(h); substantive money laundering, in violation of 18 U.S.C. § 1956(a)(1)(B); and firearms offenses, in violation of 18 U.S.C. §§ 924(c), 922(g), and 922(j). Pennavaria was charged only with money laundering conspiracy and substantive money laundering.

On April 14, 2004, Pennavaria entered a plea of guilty to all counts, pursuant to a written plea agreement. At sentencing, the District Court stated its view that the Supreme Court's holding in Blakely v. Washington, 542 U.S. 296 (2004), limited the facts district courts could consider at sentencing to those found by a jury beyond a reasonable doubt or admitted by the defendant. As a result, the District Court refrained from making the factual findings at Pennavaria's sentencing that would have been necessary to support the following recommendations included in Pennavaria's Presentence Investigation Report ("PSR"): a six-level increase in the offense level for knowing that the laundered funds were the proceeds of, or were intended to promote, an offense involving the manufacture, importation, or distribution of a controlled substance; two additional criminal history points for committing the offense while on supervised release; and one additional criminal history point for committing the offense less than two years after being released from custody. The Government objected to the District Court's approach in a sentencing memorandum and at Pennavaria's sentencing hearing.

Based on its interpretation of Blakely, the District Court calculated a sentencing range of 37-46 months' imprisonment, far below the range of 84-105 months recommended by the PSR. The Government objected to the District Court's sentencing range calculation and requested alternative sentencing findings in light of the uncertainty created by Blakely. In response, the District Court observed, "I will say that if the guidelines were not applicable at all, that I would sentence here to at least double what I have imposed because of the incorrigibility of the defendant." (App. 226.) Later in the proceedings, the District Court made the following comments to Pennavaria:

Well, you got a major league break on June 24th, 2004, when the Supreme Court decided the Blakely case. And I'm obliged to follow the law. As it seems to me it requires me to do certain things, and I have done them here, which have benefitted you immensely.

And I must tell you, Mr. Pennavaria, I'm troubled by it, because I do agree with what Ms. Winters has said. You are an intelligent man and you have three prior federal convictions. . . . And that troubles me very much. And you should know better. And while I'm not making any findings on this, I certainly heard the testimony of Mr. Isaacs, I think at least twice if memory serves me correctly in the various trials we have had heard here, and it was rather sorted [sic] it seems to me. So it's not antiseptic, as counsel is doing his job, depicts it. It was not antiseptic at all.

(App. 225.) The District Court imposed a sentence of 46 months, the top of the guidelines range. The Government ...

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