United States v. Blairtorbett ( 2007 )

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 07a0251n.06
Filed: April 5, 2007
No. 04-6520
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
UNITED STATES OF AMERICA, )
)
)
Plaintiff-Appellee, )
)
v. )On Appeal from the United States
)District Court for the Eastern District
)of Tennessee at
DIANNA BLAIR-TORBETT, )Chattanooga
)
)
Defendant-Appellant. )
Before: DAUGHTREY, Circuit Judge; COOK, Circuit Judge; and WEBER, District Judge.*
PER CURIAM.
Defendant-Appellant Dianna Blair-Torbett appeals the sentence imposed by the district court
after her guilty plea for violations of Title 18 U.S.C. § 2314. Although the sentencing occurred prior
to the Supreme Court’s opinion in United States v. Booker, 543 U.S. 220 (2005), Blair-Torbett relies
on Booker on appeal, contending that (1) her 72-month sentence was improper because facts not
admitted by her during her plea were used to increase her sentence in violation of the Fifth and Sixth
*
The Honorable Herman J. Weber, Senior United States District Judge for the Southern
District of Ohio, sitting by designation.
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Amendments of the United States Constitution; (2) the Booker error was not harmless pursuant to
United States v. Christopher, 415 F.3d 590, 593-94 (6th Cir. 2005); and (3) the district court erred
by ordering restitution for loss amounts exceeding the loss caused by the specific conduct to which
she pled guilty, in violation of the Victim and Witness Protection Act, 18 U.S.C. § 3663(a)(2).1
For the reasons set forth below, we conclude that error resulted from the district court’s
mandatory application of the sentencing guidelines. See, United States v. Barnett, 398 F.3d 516 (6th
Cir.), cert. dismissed, 545 U.S. 1163 (2005). But, after careful consideration, we further conclude
that the error is harmless and we therefore affirm. United States v. Brown, 444 F.3d 519 (6th Cir.
2006); United States v. Christopher, 415 F.3d 590 (6th Cir. 2005).
Factual & Procedural Background
On April 22, 2003, an indictment was filed charging Blair-Torbett and co-defendant, William
D. Brannon, with twenty-one counts of transporting sums of money across state lines in violation
of 18 U.S.C. § 2314 from April 23, 1998 through September 26, 2000. Blair-Torbett admitted, while
under oath, the truth of the statement of facts presented at the sentencing hearing.
Co-defendant Brannon was tried to a jury and convicted on Counts One through Fourteen,
Sixteen, and Eighteen through Twenty-One. He was sentenced to ninety-seven months.
1
In her pro se brief, Blair-Torbett raises for the first time additional assignments of error:
her plea was involuntary, she suffered double jeopardy, “failure of the indictment,” and attorney
misconduct. Because these issues were not presented to the district court, they cannot be reviewed
on appeal. Brown v. Marshall, 704 F.2d 333, 334 (6th Cir.), cert. denied, 464 U.S. 835 (1983).
Moreover, the claim of ineffective assistance of counsel is more properly raised by motion to vacate
under 28 U.S.C. § 2255.
2
Before her trial, Blair-Torbett filed a notice of intent to plead guilty and entered a plea of
guilty to Counts One and Fourteen of the indictment. There was no written plea agreement, but the
United States indicated that after she was sentenced on Counts One and Fourteen, Counts Two
through Thirteen and Counts Fifteen through Twenty-One would be dismissed.
Prior to the guilty plea hearing, the United States had filed a written document entitled
“Factual Basis for Plea of Dianna Blair-Torbett,” which provides:
If this case were to go to trial, the proof would show that the defendant,
Dianna Blair-Torbett, devised and intended to devise a scheme to defraud investors
from beginning at least as early as June 5, 1997, and continuing until on or about July
26, 2002. The defendant operated through various entities, including McMinn
Consultants, Ltd.; Asset Management Associates; International Ventures, Ltd.;
Capitol Reserve Society; and International Ventures Associates. The defendant
conducted business from her residence in Etowah, Tennessee, which is within the
Eastern District of Tennessee.
The substance of the scheme was that the defendant would falsely represent
to potential investors that, among other things, her entities would double or triple the
investor’s money within a short period of time, typically six months, and that the
investment would receive a 24% annual interest payment. Moreover, the defendant
claimed that the investments would be “secured” and “collateralized” by “gold
concentrate” located in vaults maintained on the premises of West Texas Metals in
El Paso, Texas. The defendant purported to require a minimum investment of
$50,000.
Beginning on or about June 5, 1997, the defendant participated in the scheme
with William Devers Brannon, a sometime resident of Knoxville, Tennessee, and the
owner and operator of West Texas Metals located in El Paso, Texas. Ms. Blair-
Torbett entered into a number of contracts with the defendant, one of which they
executed in June 1997, that required her to pay $1,200,000,000 per year as minimum
payment for a term of five years. Ms. Blair-Torbett agreed to act as the financing arm
of West Texas Metals and Brannon.
Thereafter, during the period August to November 1997, the defendant
Brannon, d.b.a. Golden West Estates, purchased magnetite from Cobra Mining
Company in New Mexico. The magnetite cost $20 a ton. McMinn Consultants,
using investor money, purchased the magnetite and it was shipped to West Texas
Metals in El Paso and placed in vaults also paid for by McMinn Consultants with
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investor funds. This magnetite was described by both the defendants, Brannon and
Blair-Torbett, as being “gold concentrate.” Investors were advised that their
investments were backed by this gold concentrate, which the defendant Brannon
valued in the millions of dollars. Defendant Brannon also claimed that the West
Texas Metals property contained gold with an “estimated in ground value per
appraisal of $45,513,000.”
Numerous investors fell victim to this scheme. In particular, Dr. Jerry Tuggle
invested $50,000 on or about April 23, 1998 by sending check number 0224 from the
State of Alabama to the State of Tennessee. In addition, another investor, the St.
Paul’s Community Baptist Church, located in Brooklyn, New York, invested
hundreds of thousands of dollars with the defendant. On or about January 28, 1999,
the St. Paul’s Community Baptist Church issued check number 111 in the amount of
$301,000 payable to McMinn Consultants, which check was transported across state
lines from the State of New York to McMinn Consultants in the Eastern District of
Tennessee.
At the hearing, the following exchange occurred:
DEFENSE COUNSEL: We would offer a couple of corrections, or
clarifications, if you will. And the first one would be, in the first sentence of the
document, that says – that begins, “If this case were to go to trial,” the dates that are
alleged in this state that the fraudulent behavior began beginning at least as early as
June 5th 1997 and continuing until on or about July 26th, 2002. And we would
suggest that that later date of July 26th 2002, is more possibly until July 26th, 2002
(sic).
The second correction or comment that we would make would be in the first
paragraph on Page 2, and it would be the second sentence of that paragraph, that
begins that “Ms. Blair Torbett entered into a number of contracts with the defendant,”
and that would be the defendant Mr. Brannon, “one of which they executed in June
1997, that required her to pay $1,000,200,000 per year.” We would --
THE COURT: Is that 200,000 or 200 million?
DEFENSE COUNSEL: I’m sorry. Two hundred million. Thank you
for the correction, Your Honor. We see all these zeros, sometimes we get a little
confused. I apologize. We would offer that that was an initial contract, that other
contracts were executed later, but that was the initial contract.
The final sentence of that paragraph begins, “Ms. Blair Torbett agreed to act
as the financing arm of West Texas Metals.” We would suggest that Ms. Blair
Torbett agreed to act as one of the financing arms. In other words, there were other
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financing arms.
And those would be the only comments or corrections we would make to the
factual basis.
The district court then proceeded as follows:
THE COURT: Ms. Blair Torbett, you heard what Ms. LaLumia just
said?
THE DEFENDANT: Yes, Your Honor.
THE COURT: Do you agree with her statements?
THE DEFENDANT: Yes, Your Honor.
THE COURT: Is there anything at all in this “Factual Basis for Plea
of Diana Blair Torbett” that, to your own knowledge, is false?
THE DEFENDANT: No, Your Honor.
THE COURT: Are you offering to plead guilty because you are in fact
guilty?
THE DEFENDANT: Yes, Your Honor.
THE COURT: It is the finding of the Court in the case of the United
States versus Diana Blair Torbett that the defendant is fully competent and capable
of entering an informed plea and that her plea of guilty is a knowing and voluntary
plea supported by an independent basis in fact containing each of the essential
elements of the offense. Her plea is therefore accepted, and she is now adjudged
guilty of these two offenses.
The Court will set sentencing in accordance with the Sentencing Reform Act
of 1984 and the Court’s local rules.
The presentence report recommended a guideline range of 51 to 63 months based on a
Total Offense Level of 24. It was calculated as follows:
+6 U.S.S.G. § 2F1.1
+13 loss>$2,500,000 but >$5,000,000
+2 scheme to defraud more than 2 victims
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+2 use of Postal Service for fraud
+2 sophisticated means by using off-shore accounts
+2 U.S.S.G. § 3B1.3
27 sub total
-3 acceptance of responsibility
24 Total Offense Level
The defendant had a criminal history category of I. The presentence report indicated in the “Victim
Impact” section that, due to the defendant’s fraudulent activity, most of the victims were financially
ruined. The presentence report identified some individuals by the time of sentencing whose losses
totaled $3,432,129.00. An order of restitution as to all victims was recommended in the amount of
$4,845,165.00. An addendum to the presentence report was submitted recommending a credit be
given against these figures for any amounts repaid to victims. No objections were filed to the
presentence report.
The defendant filed a motion for downward departure from the offense level established in
the presentence report based upon her life experiences, a difficult childhood, abuse of alcohol and
drugs, and family circumstances. Specifically, she argued that she was the sole source of care for
her minor daughter, who was partially blind, and her adoptive mother who suffered from
Alzheimer’s Disease. Defendant also filed a pro se motion for downward departure in which she
advanced an argument that the enhancements to her offense level overlapped each other, citing
United States v. Lauerson, 348 F.3d 329, 344 (2d Cir. 2003), and United States v. Jackson, 346 F.3d
22, 26 (2d Cir. 2003).
The government filed a motion for upward departure. It argued that a longer sentence was
warranted than that established by the guideline calculation of 51 to 63 months because of the
hardship suffered by the investors.
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At the sentencing hearing, the district court heard evidence in support of the motions for
departure. The United States produced a number of witnesses who testified that they had suffered
severe psychological and emotional damage, in addition to their economic damages, as a result of
being defrauded of their retirement and life savings. The district court also discussed letters received
from victims and the defendant’s abuse of the trust the victims had placed in her to the extent they
each gave her their life savings. The district judge clearly understood the decision to grant or deny
these motions for departure was committed to his discretion.
The district court denied defendant’s motion and granted the government’s motion, citing
U.S.S.G. § 2F1.1, Application Note 11, which provides:
In cases in which the loss determined under Section (b)(1) does not fully capture the
harmfulness and seriousness of the conduct, an upward departure may be warranted.
Examples may include the following: The offense caused reasonably foreseeable
physical or psychological harm or severe emotional trauma, and the offense involved
the knowing endangerment of the solvency of one or more victims.
The district court emphasized that a message would be sent to other white collar criminals
by the upward departure, sentenced the defendant to 72 months to be followed by three years
supervised release, and recommended that she participate in the 500-hour drug treatment program
while incarcerated.
In denying the request for a downward departure, the district judge noted that the cumulative
effect of the enhancements was something envisioned by the Sentencing Commission, particularly
as evidenced by the fact that at some points in the guidelines there are caps on the amount of
enhancements which can be applied to one defendant. The district judge further found that the
defendant’s personal problems and responsibilities were also not outside the heartland of cases.
At no time either before or during the sentencing hearing did the defendant object to the
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presentence report’s recommendation that the loss in this case was between $2,500,00.00 and
$5,000,000.00 or that restitution should be ordered to all victims of the defendant’s scheme to
defraud. At sentencing, defendant did object to the amount of restitution on the ground that the
restitution order to a victim should be reduced by any amount already repaid to the victim. The
district court agreed and ordered the defendant to pay restitution in the amount of $4,845,165,
specifically ordering that she receive credit for all payments made toward the criminal monetary
penalties imposed.
Blair-Torbett presented no evidence at the sentencing hearing rebutting the amount of
restitution stated in the presentence report.
Analysis
A. Booker Challenge
While this case was pending on appeal before this Court, the United States Supreme Court
issued its decision in United States v. Booker, 543 U.S. 220 (2005). In Booker, the United States
Supreme Court held that the Sixth Amendment requires that facts necessary to support a sentence
exceeding the maximum authorized by the facts established by a plea of guilty or a jury verdict must
be admitted by the defendant or proved to a jury beyond a reasonable doubt. Booker, 543 U.S. at
244. But rather than mandate that all such facts must be found by a jury, the Supreme Court severed
18 U.S.C. § 3553(b), making application of the sentencing guidelines advisory rather than
mandatory. Moreover, the Supreme Court expressly stated that its “remedial interpretation of the
Sentencing Act” must be applied “to all cases on direct review”. Booker, 543 U.S. at 268. As a
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result, we must now determine whether the district court’s error in sentencing under the mandatory
guideline sentencing system was harmless. Christopher, 415 F.3d 590, 593 (6th Cir. 2005);
McDaniel, 398 F.3d 540, 546 (6th Cir. 2005).
In United States v. Hazelwood, 398 F.3d 792 (6th Cir. 2005), this Court held that a remand
for an error in sentencing is not necessary if, after our de novo review, we are certain that any error
was harmless, i.e., that any such error did not affect the district court’s selection of the sentence
imposed. 398 F.3d at 801. As noted by this Court in Christopher, the Supreme Court, “rather than
requiring that all facts supporting enhancements be proved to the jury, instead severed 18 U.S.C. §
3553(b), thereby rendering most guideline enhancements advisory.” 415 F.3d at 593. Under Booker,
there is no Fifth or Sixth Amendment violation when a sentencing judge exercises genuine discretion
within a clearly defined statutory range. United States v. Harris, 397 F.3d 404, 411 (6th Cir. 2005).
In United States v. Brown, 444 F.3d 519 (6th Cir. 2006), this Court acknowledged a Booker
error, but concluded that the district court’s error in following the law applicable on the day of
Brown’s resentencing was harmless because the sentence imposed was based upon a significant
upward departure that resulted in a reasonable sentence. As in this case, the district court in Brown
“correctly observed that it was bound to follow the precedent of this circuit, which at the time was
that the federal sentencing Guidelines were applicable, constitutional and mandatory.” Brown, 444
F.3d at 521(citing United States v. Koch, 383 F.3d 436 (6th Cir. 2004), vacated, 544 U.S. 995
(2005)). Brown then held that the district court’s errors did not affect the selection of the sentence
imposed because the district court exercised its discretion to grant an upward departure that increased
the sentence above the Guideline recommended range. Brown, 444 F.3d at 522.
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We are mindful not to usurp the discretionary power granted to the district courts by Booker
by assuming that the district court would have given the same sentence post-Booker. Barnett, 398
F.3d at 530 (quoting United States v. Oliver, 397 F.3d 369, 381 n.3 (6th Cir. 2005)). In this case,
however, as in Brown, we can be certain that any Booker error was harmless because after
considering both a motion for downward departure and a motion for upward departure, the district
court granted a discretionary upward departure from the guideline range, explained its reasons in the
record, and imposed a reasonable sentence.
As in Brown, the district court departed upward from the recommended guideline range after
a discussion of the 18 U.S.C. § 3553(a) factors as they applied to a white collar criminal that bilks
a substantial number of victims out of their life savings. As in Brown, clearly the sentence
determined by the district court resulted from the district court’s exercise of discretion to depart
upward and its conclusion that the sentence was sufficient, but not greater than necessary to comply
with the purposes of sentencing set forth in 18 U.S.C. § 3553.
The Lauerson and Jackson cases cited by the defendant do not advance Blair-Torbett’s
position. Both cases, although ordering a remand, left to the discretion of the district judge the
decision whether to depart upon resentencing, supporting our conclusion that the requirement of the
Booker holding is satisfied when the district court, in deciding the motions to depart, exercises its
independent discretion in determining the sentence.
Having concluded the Booker error is harmless, we must review defendant’s sentence for
reasonableness under Booker. Christopher, 415 F.3d at 594; United States v. Jackson, 408 F.3d 301,
304 (6th Cir. 2005). A district court need not recite the § 3553(a) factors, but must articulate its
reasoning in deciding to impose a sentence in order to allow for reasonable appellate review. United
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States v. Kirby, 418 F.3d 621, 626 (6th Cir. 2005). The district court started with an analysis of the
applicable guidelines including a discussion of Application Note 11. The district court thoroughly
considered the seriousness of the offense and the effect on the numerous victims. The district court
discussed the need to deter criminal conduct by the defendant and the need for the sentence imposed
to send a message to deter others from criminal conduct. The district court’s final sentence was not
selected at random, but was a reflection of its consideration of the guidelines and the other § 3553(a)
factors. The district court clearly exercised its discretion and imposed a procedurally and
substantively reasonable sentence in this case.
B. Restitution
In this case, Blair-Torbett admitted under oath that she devised and intended to devise a
scheme to defraud and acknowledged that numerous investors fell victim to this scheme. It,
therefore, was the mandatory duty of the district court at sentencing to order that the defendant make
restitution to the victims who directly suffered a pecuniary loss in the course of her scheme, in
accordance with 18 U.S.C. § 3664. 18 U.S.C. § 3663A. Pursuant to 18 U.S.C. § 3664, the probation
officer included in the presentence report information sufficient to allow the district court to exercise
its discretion in fashioning a restitution order, including a complete accounting of the losses to each
identifiable victim.
As a result of the report, the district judge had reliable information, not contested by Blair-
Torbett, that she had utilized off-shore bank accounts in the Bahamas, that she obtained a
$90,000,000.00 insurance policy insuring the “gold concentrate” and later attempted to defraud the
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insurance company claiming the “gold concentrate” was stolen, and that she transferred investors’
funds to accounts in the Bahamas to conceal these funds from investors and investigators. Numerous
investors fell victim to this scheme. The known victim loss amounts not associated with Dominion
Trust totaled $1,518,506.96. The total amount of loss attributable to the defendant was
$4,845,115.00. Thirty-two victims returned declaration of loss forms that total $3,432,129.00. The
affidavit of FBI Special Agent Robert C. Bissell confirmed that the total amount invested with one
of the Blair-Torbett entities, McMinn Consultants, exceeded $8 million dollars.
Blair-Torbett failed to file with the probation officer a requested affidavit describing her
financial resources as required by 18 U.S.C. § 3664(d)(3), failed to present any evidence regarding
any moneys that had been repaid to investors, and failed to object to the presentence report.
Nevertheless, she now challenges the restitution order, contending that she should be required to pay
restitution only to the two victims named in the counts of conviction because she did not admit that
she devised a scheme to defraud, as would be necessary for an order of restitution under 18 U.S.C.
§ 3663A. Clearly, Blair-Torbett admitted under oath the scheme to defraud in open court as set
forth in the “Factual Basis for Plea of Dianna Blair-Torbett.” The information provided in the
presentence report, including the required restitution, was in the record and available to the parties
and the Court.
As previously noted, defendant made no objection to the amount of loss used to calculate her
offense level, although she did question at sentencing the amount of restitution ordered. However,
she did so solely because it was not reduced by the amounts the victims had been previously
reimbursed. Moreover, she did not object to the imposition of the specific amounts of restitution
found to have been suffered by each identified victim. Because her objection to the order of
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restitution made at sentencing was different from that raised on appeal, the issue will be reviewed
for plain error. See United States v. Hall, 71 F.3d 569, 573 (6th Cir. 1995). To establish plain error,
a defendant must show that (1) an error occurred; (2) the error was obvious or clear; (3) the error
affected his substantial rights; and (4) the error seriously affected the fairness, integrity, or public
reputation of the judicial proceedings. United States v. Cline, 362 F.3d 343, 348 (6th Cir. 2004); see
also United States v. Olano, 507 U.S. 725 (1993).
In Hughey v. United States, 495 U.S. 411, 420 (1990), the Supreme Court held that “the loss
caused by the conduct underlying the offense of conviction establishes the outer limits of a restitution
order.” United States v. Sosebee, 419 F.3d 451, 459 (6th Cir. 2005). Under 18 U.S.C. § 3663(a)(2),
a defendant convicted of “an offense that involves as an element a scheme, conspiracy, or pattern
of criminal activity” must make restitution to “any person directly harmed by the defendant’s
criminal conduct in the course of the scheme, conspiracy or pattern.”
Our review of the record supports the conclusion that there was no error committed by the
district court that seriously affected the fairness, integrity or public reputation of this judicial
proceeding and that the district court’s restitution order is supported by a preponderance of the
evidence and information in the record.
Conclusion
For the reasons set out above, we AFFIRM the judgment of the district court.
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