United States v. Repking, Mark L. , 467 F.3d 1091 ( 2006 )

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 06-1410
UNITED STATES OF AMERICA,
Plaintiff-Appellant,
v.
MARK L. REPKING,
Defendant-Appellee.
____________
Appeal from the United States District Court
for the Southern District of Illinois.
No. 3:05-CR-30128-001-MJR—Michael J. Reagan, Judge.
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ARGUED SEPTEMBER 12, 2006—DECIDED NOVEMBER 7, 2006
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Before COFFEY, ROVNER, and EVANS, Circuit Judges.
PER CURIAM. Mark Repking, the president of a federally
insured bank, used his position to misappropriate bank
funds for himself and his friend. He pleaded guilty to
making false entries in the bank’s records, see 18 U.S.C.
§ 1005, and to filing a false tax return, see 26 U.S.C.
§ 7206(1). Despite an advisory guidelines range of 41 to 51
months’ imprisonment, and the government’s recommenda-
tion of 24 months to reflect Repking’s substantial assistance
in the prosecution of his friend, the district court ultimately
sentenced him to just one day of imprisonment, a total of
three years’ supervised release, and a $100,000 fine. As
special conditions of his supervised release, the court
ordered that Repking serve the first six months on home
2 No. 06-1410
confinement and perform 900 hours of community service.
The government now appeals, arguing that the sentence is
unreasonably low. We vacate the sentence and remand for
resentencing.
I.
Repking founded and was president of Liberty Bank in
Alton, Illinois. In September 2002, Repking drew up phony
documents showing that his friend, Hank Hart, had person-
ally borrowed $350,000 from the bank; Hart received no
money at the time, but he used the “loan” documents to
convince the bonding company for his construction business
that he invested the “proceeds” in the business. Then in
February 2003 Hart asked Repking to fabricate an account
statement—backdated to December 2002—showing that
Hart really had $350,000 on deposit with Liberty Bank on
the statement date; Repking did so. After that Hart wanted
the bank to actually fund the $350,000 “loan,” but Repking
said the bank could not do so at the time and encouraged
Hart instead to write checks against the fictitious account
balance. When Hart began overdrawing his account,
Repking manipulated the bank’s records to conceal the
overdrafts. Those overdrafts reached more than $500,000 by
March 2003, and Repking agreed to lend Hart $350,000 of
his own money to help cover them. Repking did give Hart a
$350,000 check drawn on the account of a defunct business
Repking once operated, but it turns out that Repking had
misappropriated the funds in that account from Liberty
Bank. Meanwhile, ever since 1999 Repking had been
skimming bank funds to pay personal expenses like furni-
ture, meals, and improvements to his Florida vacation home
that totaled more than $600,000. His failure to report his
year-end bonuses and the stolen money to the IRS resulted
in unreported income of $240,000 for tax years 2000
No. 06-1410 3
through 2002. In addition, Liberty Bank later discovered
that Repking had been accepting funds from bank customer
Amrutbhai Patel and issuing cashier’s checks in amounts
under $10,000 as directed by Patel. This pattern had
continued from April 2000 through June 2003, and in one
eight-month period Repking had issued 36 checks totaling
$168,366. According to the probation officer, the “timing
and the amounts of the cashier’s checks were indicative
of evading reporting requirements.”
When the bank became aware of the government’s
investigation, Repking resigned. He then entered into a plea
agreement and cooperated with investigators in exchange
for the possibility of a reduced sentence under U.S.S.G.
§ 5K1.1. In their plea agreement, signed after United States
v. Booker, 543 U.S. 220 (2005), the parties began with a
calculation of the guidelines range for Repking’s violation of
18 U.S.C. § 1005, since it was the more serious count. They
determined his initial offense level to be 20, see U.S.S.G.
§ 2B1.1(b)(1)(H), and then added two levels for the employ-
ment of sophisticated means, see id. § 2B1.1(b)(1)(8)(C), and
one level for Repking’s role in the offense, see id. § 3B1.3.
The government anticipated that Repking’s guilty plea
would entitle him to a three-level reduction under U.S.S.G.
§ 3E1.1 for acceptance of responsibility, bringing the total
offense level to 21. With a criminal history of I, the parties
calculated an advisory guidelines range of 37 to 46 months’
imprisonment. The parties also agreed that the fine im-
posed should be $25,000, that no restitution need be
awarded because Repking had settled with the bank, and
that he would forfeit $75,000 in “proceeds.”
The presentence investigation report reflects a multiple-
count adjustment not considered in the plea agreement,
bringing the probation officer’s calculation of Repking’s total
offense level to 22 with a corresponding imprisonment
range of 41 to 51 months. Although the parties stipulated
only to losses of $617,314, the probation officer’s investiga-
4 No. 06-1410
tion turned up a figure of $976,046, not counting the Patel
cashier’s checks. Repking did not object to the presentence
investigation report, but he did file a sentencing memoran-
dum requesting a shorter prison sentence based primarily
on his charitable contributions in the community. He
attached letters from family, friends, and the charitable
organizations he helped. Repking requested a nominal
sentence of imprisonment (such as one day) plus a period of
supervised release beginning with home confinement and
suggested that his sentence include community service.
This was despite his promise in the plea agreement “not to
seek a downward departure from the Guidelines” except for
substantial assistance under § 5K1.1.
Based on what it characterized as Repking’s substan-
tial assistance, the government filed a motion under § 5K1.1
and recommended a below-range sentence of 24 months
along with the $25,000 fine the parties had negotiated in
the plea agreement. According to the government, Repking’s
substantial assistance included his early cooperation with
investigators concerning his own criminal conduct, his
assistance in the prosecution of Hart, the information he
provided in an unrelated tax investigation, his consent to be
barred from FDIC participation (which could have hap-
pened anyway by order of the Board of the Federal Deposit
Insurance Corporation, see 12 U.S.C. § 1818(e)), his agree-
ment to pay a $25,000 fine, his agreement to forfeit $75,000
in “proceeds” from his § 1005 violation, and his entry into a
settlement with Liberty Bank that had “made the bank
whole.” Judge Reagan granted the motion but did not
explain why or whether he agreed that Repking’s assistance
warranted a reduction to 24 months.
Instead, Judge Reagan asked Repking why he com-
mitted these crimes when he apparently had plenty of
money. Repking—who reported total income of $1.7 million
between 2000 and 2004, and a net worth of $2 million at the
No. 06-1410 5
end of 2005—responded that after much reflection he
realized success came to him too early in life and that he
had “a problem pleasing people.” He discussed how he came
from a small farming community where his family knew
little about success. He admitted making mistakes and said
he took full responsibility for his actions.
Judge Reagan prefaced his imposition of the sentence
by remarking that Repking’s case fell within the rare
five percent of cases for which neither common sense nor a
law degree were helpful. Acknowledging his duty to con-
sider the factors under 18 U.S.C. § 3553(a), Judge Reagan
began a statement of his reasons and explained that he did
not believe there was a need to protect the public from
Repking, that Repking had done unspecified “good works”
before the government “circled its wagons,” and that there
was no need to rehabilitate him or deter him from commit-
ting future crimes. The judge recognized that Repking had
made restitution, was going to forfeit $75,000, and had
extraordinary support from the community. Judge Reagan
noted that Repking would not only be barred from certain
jobs after he became a convicted felon, but that he would
also carry the stigma of being a convicted felon heavier than
most. The judge disclosed that, while initially he planned to
impose a harsher sentence, Repking’s allocution had
changed his mind. Judge Reagan recognized that Repking
was statutorily ineligible for probation, see 18 U.S.C.
§§ 1005, 3559(a)(2), 3561(a)(1), (3), but thought that just
punishment for Repking would be to hit him in the pocket-
book because his crime was money-motivated. Despite this
oral list of reasons, Judge Reagan’s written statement
acknowledges only the § 5K1.1 motion as a basis for the
sentence he ultimately imposed. That sentence consists of
time served (the day Repking was arrested and released on
bond), supervised release of three years on the § 1005 count
and one year to run concurrently on the tax count, home
confinement of six months (as part of supervised release),
6 No. 06-1410
900 hours of community service (as part of supervised
release), and a $100,000 fine. The parties agreed to an order
of forfeiture of $75,000, which was entered with the judg-
ment.
II.
On appeal the government argues in its brief that a
sentence including one day of imprisonment is unreasonable
for a defendant whose properly calculated guidelines range
is 41 to 51 months. Repking takes issue with using the
guidelines range for comparison; his position is that the
government is stuck with its recommendation of 24 months.
The government conceded at oral argument that its recom-
mendation of 24 months is the proper point of comparison,
and although we note that in the plea agreement Repking
agreed not to seek a below-range sentence, the government
has never held him to that concession and in fact remained
silent at sentencing when Repking presented his arguments
for mitigation.
In determining whether to affirm a sentence, we ask
whether the sentence is both supported by adequate reasons
and substantively reasonable. See United States v. Wallace,
458 F.3d 606, 609 (7th Cir. 2006); United States v. Castro-
Juarez, 425 F.3d 430, 433 (7th Cir. 2005). Here, the district
court granted the government’s motion for a reduced
sentence under U.S.S.G. § 5K1.1 and also provided reasons
with reference to 18 U.S.C. § 3553(a) for giving Repking a
term of imprisonment below the guidelines range. Part of
our problem in reviewing this sentence is that the court did
not explain why it granted the § 5K1.1 motion or how much
of the reduced sentence is attributable to Repking’s sub-
stantial assistance as opposed to the other reasons the court
provided. Knowing what effect the government’s motion had
on the sentence the judge arrived at would be helpful in
No. 06-1410 7
evaluating the reasonableness of the sentence imposed; if
the court gave greater weight to Repking’s assistance, that
makes its other stated reasons for imposing the sentence
less significant, but if the court gave less weight to the
assistance, its other stated reasons become more significant.
Although we can review the district court’s written state-
ment of reasons in addition to its oral ones, United States v.
Baker, 445 F.3d 987, 991-92 (7th Cir. 2006), to do so is
unhelpful here; Judge Reagan’s sole written reason for
imposing the below-range sentence was the government’s
§ 5K1.1 motion.
Our task, then, is to decide whether the district court’s
oral reasons are enough to justify the sentence imposed.
The government in passing characterizes the term of
imprisonment as an end-run around the prohibition on
probation-only sentences for Repking’s violations. See 18
U.S.C. § 3561(a). And imposing a prison sentence of one day
does come close to “making a mockery out of the statutory”
prohibition against a probation-only sentence. See United
States v. Crisp, 454 F.3d 1285, 1290 (11th Cir. 2006)
(opining that five-hour term of imprisonment might be end-
run around prohibition against probation-only sentences, if
government had made the argument). The government,
though, is more concerned here that the court went below
the guidelines range by 99%. But we recently declined to
assess reasonableness in terms of percentages. See Wallace,
458 F.3d at 613. Instead, the standard is whether the
district court’s explanation is sufficiently proportional to the
extent of the variance from the guidelines range; in other
words, “the greater the deviation, the more compelling the
district court’s explanation must be.” Id.; see also United
States v. Dean, 414 F.3d 725, 729 (7th Cir. 2005); United
States v. Jordan, 435 F.3d 693, 696-97 (7th Cir. 2006).
Here, Judge Reagan noted the absence of any need to
protect the public from Repking, see 18 U.S.C.
§ 3553(a)(2)(C); the need to deter others, but not Repking,
8 No. 06-1410
from similar conduct, id. § 3553(a)(2)(B); the statutory
command to provide just punishment, id. § 3553(a)(2)(A);
the relevance of circumstances particular to Repking, like
his “extraordinary” charitable works, id. § 3553(a)(1); and
the pre-charge payment of restitution, id. § 3553(a)(7).
Although a sentencing court need not comprehensively
analyze all of the § 3553(a) factors, the judge must at
least “articulate the factors that determined the sentence
that he has decided to impose.” Dean, 414 F.3d at 729-30.
And we think Judge Reagan sufficiently considered the
§ 3553(a) factors. We are not convinced, however, that
the court’s consideration of those factors resulted in a
sentence that is reasonable.
Our first concern is the district court’s consideration of
Repking’s charitable works. The government argues that
the court’s focus on charitable works violates the policy
statement provided in the advisory sentencing guidelines.
This is an overstatement. True, the guidelines do provide
that a defendant’s charitable works are “not ordinarily
relevant,” see U.S.S.G. § 5H1.11, but consideration of
those works is not specifically prohibited, especially in a
post-Booker world. See Wallace, 458 F.3d at 608-09, 613;
United States v. Long, 425 F.3d 482, 487-88 (7th Cir. 2005);
United States v. Boscarino, 437 F.3d 634, 638 (7th Cir.
2006) (“Booker turns rules into standards.”). And though
other circuits have required sentencing courts to address
policy statements that prohibit or discourage consideration
of certain factors before deciding that those policy state-
ments do not apply, see United States v. Duhon, 440 F.3d
711, 717 & n.4 (5th Cir. 2006) (collecting cases), we have
gone only so far as to vacate sentences where the district
court disagreed with judgments firmly made by
the Sentencing Commission, see Wallace, 458 F.3d at 612-13(holding that sentencing court’s measurement of culpability
by actual, rather than intended, loss was inappropriate
No. 06-1410 9
since guidelines “already made the judgment that intended
loss is what counts”); United States v. Miller, 450 F.3d 270,
275 (7th Cir. 2006) (holding that sentencing court may not
replace legislative choice of ratio between crack and powder
cocaine with its own). But we have held that charitable
works must be exceptional before they will support a more-
lenient sentence, for, as the Third Circuit has recognized, “it
is usual and ordinary, in the prosecution of similar white-
collar crimes involving high-ranking corporate executives .
. . to find that a defendant was involved as a leader in
community charities, civic organizations, and church
efforts.” See United States v. Cooper, 394 F.3d 172, 176-77
(3d Cir. 2005) (internal quotations omitted). Although
consideration of Repking’s charitable works is reliance on a
factor that is permitted, though discouraged, by the policy
statements, we do not share the district court’s view that
Repking’s charitable works were so extraordinary that they
should be given weight despite the contrary view of the
Sentencing Commission—especially since charitable works
are entirely consistent with a bank’s business development
plan.
We are also concerned by the extent to which Judge
Reagan relied on Repking’s representation that he made
restitution. The parties and the court mentioned that
Repking had paid everything back, but the record is
silent about what that means. The bank originally sub-
mitted a loss amount exceeding $1 million, but all the
record reflects is that Repking sold the bank some of his
stock in the bank and that they came to a “complex and
comprehensive settlement agreement.” Even assuming that
he did pay everything back, he would have been required to
do so anyway, see 18 U.S.C. § 3663A(a)(1), (c)(1)(A)(ii)
(making order of restitution mandatory for offenses against
property committed by fraud or deceit), so we think this
factor does little to support the below-range sentence.
(Neither does Repking’s consent to the forfeiture order
10 No. 06-1410
support a below-range sentence because that also was
statutorily required. See 18 U.S.C. § 982(a)(2)(A).) More-
over, we recognized pre-Booker that the repayment of stolen
funds figures into the downward adjustment for acceptance
of responsibility under U.S.S.G. § 3E1.1. See United States
v. Bean, 18 F.3d 1367, 1369 (7th Cir. 1994). And we have
now held, both before and after Booker, that only extraordi-
nary efforts to make restitution support a reduced sentence.
See United States v. Filipiak, No. 05-4572, 2006 WL
2987098, at *2 (7th Cir. Oct. 20, 2006); Bean, 18 F.3d at
1369.
In the end, although Judge Reagan did recite and apply
the § 3553(a) factors, the sentence imposed cannot stand.
The factors Judge Reagan gave the most attention
to—Repking’s charitable works and restitution—were
overstated, and the other reasons the judge gave—including
the social stigma of being a convicted felon and the bar on
obtaining federal jobs—are normal incidents of committing
bank fraud. The ordinariness of Repking’s case makes it
more like United States v. Wallace, in which we vacated the
probation-only sentence given for a defendant who faced a
guidelines range of 24 to 30 months for a fraud offense that
involved $400,000 of intended loss, 458 F.3d at 607, 614,
and United States v. Crisp, in which the Eleventh Circuit
held that the district court provided insufficient reasons to
justify a five-hour term of imprisonment for a defendant
who defrauded a small bank out of close to $500,000, 454
F.3d at 1290. See also United States v. Godding, 405 F.3d
125, 125, 127 (2d Cir. 2005) (expressing concern that one-
day term of imprisonment did not reflect magnitude of theft
of nearly $366,000). As we said at oral argument, we leave
open the possibility that a one-day sentence of imprison-
ment might be justifiable for a defendant who rivals Robin
Hood; but Repking, a millionaire who stole for himself and
his friends, is not that defendant. We therefore VACATE the
sentences on each count and REMAND for resentencing.
No. 06-1410 11
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—11-7-06