Opinions of the United
2006 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


12-5-2006

USA v. Milstein
Precedential or Non-Precedential: Non-Precedential

Docket No. 05-3848




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                                                              NOT PRECEDENTIAL

                       UNITED STATES COURT OF APPEALS
                            FOR THE THIRD CIRCUIT
                                  __________

                                      No. 05-3848
                                      __________

                           UNITED STATES OF AMERICA,
                                              Appellee,

                                           v.

                                 JEFFREY MILSTEIN,
                                                 Appellant.
                                     __________

                    On Appeal from the United States District Court
                              for the District of New Jersey
                                (D.N.J. Crim. No. 00-301)
                     District Judge: Honorable William G. Bassler

                                      __________

                     Submitted Under Third Circuit L.A.R. 34.1(a)
                                November 28, 2006
                                   ___________

     Before: FUENTES and GARTH, Circuit Judges, and POLLAK, District Judge1
                          (Filed: December 5, 2006)
                                 __________

                                       OPINION




      1
       The Honorable Louis H. Pollak, Senior District Judge for the Eastern District of
Pennsylvania, sitting by designation.
Garth, Circuit Judge:

       Jeffrey Milstein appeals his sentence as unreasonable and in violation of the Double

Jeopardy Clause of the Fifth Amendment to the United States Constitution. We have

jurisdiction pursuant to 18 U.S.C. § 3742(a). We will affirm.


                                               I

       Because the parties are familiar with the facts of this case, we will not recite them here

except as necessary to the instant discussion. Milstein was a public accountant who

repeatedly used his accounting expertise to assist his clients in illegal, fraudulent schemes.

In the spring and summer of 1998, Milstein aided Marc Rousso, a fugitive fleeing securities

fraud charges in France, in concealing from the Internal Revenue Service $400,000 in

proceeds from Rousso’s sale of real property. PSR ¶ 9. When agents of the Federal Bureau

of Investigation (“FBI”) interviewed Milstein about his activities with Rousso, Milstein lied

to them. PSR ¶ 10. On May 15, 2000, pursuant to a cooperating plea agreement Milstein

pleaded guilty in the United States District Court for the District of New Jersey to a one-

count information charging conspiracy to commit tax fraud in violation of 18 U.S.C. § 371.

       Even after this guilty plea, however, Milstein continued to exploit his skills as an

accountant to engage in fraudulent investment schemes. In June 2003, an undercover FBI

agent posing as a wealthy investor met with one of Milstein’s co-conspirators and expressed

interest in investing several million dollars in LJD Resources (“LJD”), a supposed business

for which Milstein served as the accountant. PSR ¶ 34. The co-conspirator provided the agent


                                               2
with materially false financial statements for LJD, which had been prepared by Milstein.

App. 130. The agent later telephoned Milstein with questions about the financial statements,

and Milstein confirmed that the information was correct even though he knew it was not.

App. 130. As a result of his involvement in the LJD investment scheme, Milstein pleaded

guilty on November 19, 2003 in the United States District Court for the Southern District of

New York to a one-count indictment charging conspiracy to commit wire fraud. During the

guilty plea hearing, Judge Kram informed Milstein that he was subject to an enhanced

sentence pursuant to 18 U.S.C. § 31472 because he had committed the wire fraud offense

while on pre-sentence release for the earlier tax fraud offense. App. 127.

       On March 31, 2004, Judge Kram, noting Milstein’s guilty plea in this case as well as

a prior conviction in New York state court for falsifying business records, imposed a

sentence of 46 months’ imprisonment for the wire fraud conspiracy offense and a consecutive

sentence of 17 months’ imprisonment pursuant to 18 U.S.C. § 3147. App. 143, 154.

       For the tax fraud conspiracy offense, the Probation Office, using the 1998 Edition of


       2
        The statute provides:

       A person convicted of an offense committed while released under this chapter
       shall be sentenced, in addition to the sentence prescribed for the offense to–

       (1) a term of imprisonment of not more than ten years if the offense is a felony; or
       (2) a term of imprisonment of not more than one year if the offense is a
       misdemeanor.

       A term of imprisonment imposed under this section shall be consecutive to any
       other sentence of imprisonment.

18 U.S.C. § 3147.

                                                3
the Guidelines Manual, determined that Milstein’s Base Offense Level pursuant to U.S.S.G.

§ 2T1.4(a)(1) was 13, based on a tax loss of $55,000. PSR ¶ 18, U.S.S.G. § 2T4.1(H). His

Total Offense Level was 15, because Milstein, as a certified public accountant, warranted the

two-level enhancement in U.S.S.G. § 2T1.4(b)(1). PSR ¶ 19, 23. Probation recommended

against a downward adjustment for acceptance of responsibility because, inter alia, Milstein

lied during his Probation Office interview about his conduct in this offense. See PSR ¶¶ 15-

16. Probation also determined that Milstein’s state court conviction and sentence for

falsifying business records and his conviction and sentence in the Southern District of New

York for conspiracy to commit wire fraud resulted in a total of four Criminal History Points,

and thus a Criminal History Category of III and an advisory guidelines range of 24-30

months’ imprisonment. PSR ¶¶ 29-34, 36, 66.

       Before sentencing, Milstein wrote to object to this advisory sentence on a number of

grounds. He challenged the withholding of a downward adjustment for acceptance of

responsibility, Probation’s calculation of the tax loss and the resulting base offense level, and

the two-level enhancement under U.S.S.G. § 2T1.4(b)(1). App. 85-86. Milstein also sought

a downward adjustment on four additional grounds: (i) the loss amount overstated the

seriousness of the offense, U.S.S.G. § 2F1.1 cmt. n.11; (ii) Milstein had no intent to violate

the criminal law, U.S.S.G. § 5K2.11; (iii) he suffered “collateral consequences” of his

conviction, including the “loss of employment opportunities,” U.S.S.G. § 5K2.0; and (iv)

since the offense, he has been rehabilitated. App. 87-93. Finally, Milstein argued that the 18

U.S.C. § 3553(a) factors merited a sentence of “time served,” or in the alternative, that any

                                               4
sentence imposed in this case be ordered to run fully concurrently with the sentence imposed

by the Southern District of New York. App. 94-96.

       The government filed a written response, disputing Milstein’s challenges to the

calculation of the guidelines range and opposing his motion for downward departures. The

government did agree, though, that a partially concurrent sentence would be appropriate,

given that the sentence on the wire fraud conspiracy conviction had been increased by 17

months under 18 U.S.C. § 3147. App. 112-18.

       At sentencing on August 3, 2005, Milstein raised additional claims. Pursuant to

U.S.S.G. § 4A1.1(c), no Criminal History Point should be assigned for his state court

conviction for falsifying business records. According to Milstein, because the crime was a

misdemeanor rather than a felony, the addition of a Criminal History Point was in error and

without that fourth point, Milstein’s Criminal History Category would be II rather than III.

App. 23. Milstein also argued for a reduced sentence based on his remorse. App. 22.

       Judge Bassler first identified all the issues raised by Milstein’s written submission,

which the Judge had read “several times.” App. 17. After argument by Milstein’s counsel and

the government’s response, the District Court expressly rejected as meritless both Milstein’s

objection to the two-level increase under U.S.S.G. § 2T1.4(b)(1) and his objection to the

withholding of a reduction for acceptance of responsibility. App. 27-28. Judge Bassler even

re-read the plea allocution to satisfy himself that Milstein had provided inconsistent–and

thus, false–information to the FBI regarding his conduct in this offense. App. 28. Next,

turning to Milstein’s motion for a downward departure, Judge Bassler “decline[d] to

                                             5
downward depart . . . because in evaluating every reason I have looked at in the briefs, I just

simply don’t think they justify a downward departure.” App. 29. Then, evaluating Milstein’s

case using the sentencing factors listed in 18 U.S.C. § 3553(a), the District Court concluded

that none justified a reduction in the advisory sentence. App. 29-30. The District Court also

rejected Milstein’s challenge to the Criminal History Category, finding that U.S.S.G. §

4A1.2(c) expressly counted sentences for certain prior misdemeanor convictions. App. 31.

       After allowing defense counsel an opportunity to argue the extent to which this

sentence should run concurrently with the sentence in the wire fraud conspiracy case, and

after giving Milstein an opportunity to address the Court, Judge Bassler imposed a sentence

of 24 months’ imprisonment, 17 months of which would be served concurrently to the wire

fraud conspiracy sentence. Supplemental App. 1-2. The Court also imposed a three-year term

of supervised release, a $100 special assessment, and a $10,000 fine. The Court explained

that these two crimes could have justified fully consecutive sentences, but that he granted a

substantial period of concurrency because of the 17-month portion of the sentence Judge

Kram imposed under 18 U.S.C. § 3147. App. 38.




                                              II

       Milstein first contends that the imposition of a partially concurrent–rather than an

entirely concurrent–sentence violated the Double Jeopardy Clause by doubly punishing him

for the tax fraud offense. This argument is wholly without merit. The extra 17 months’

                                              6
imprisonment Milstein received for wire fraud conspiracy was not “punishment” for the tax

fraud offense for Double Jeopardy purposes. See Witte v. U.S., 

(1995) (“In

repeatedly upholding such recidivism statutes, we have rejected double jeopardy challenges

because the enhanced punishment imposed for the later offense ‘is not to be viewed as either

a new jeopardy or additional penalty for the earlier crimes,’ but instead as ‘a stiffened penalty

for the latest crime, which is considered to be an aggravated offense because a repetitive

one.’”) (quoting Gryger v. Burke, 

, 732 (1948)). Indeed, even fully consecutive

sentences for these two entirely separate crimes would not have violated the Double Jeopardy

Clause.

       Next, Milstein argues that the District Court erred in attributing a Criminal History

Point to his prior New York state court conviction and sentence for falsifying business

records in violation of McKinney’s Penal Law § 175.05. This argument, as well, is without

merit. Under U.S.S.G. § 4A1.1(c), one Criminal History Point is added for each prior

criminal sentence which did not result in at least sixty days’ imprisonment. Because Milstein

paid a $500 fine but was not imprisoned for the New York state conviction, the District Court

accorded one Criminal History Point under that section. PSR ¶ 30. However, Milstein claims

that his prior sentence falls within the category of certain excluded misdemeanor and petty

offenses for which, circumstances depending, a criminal history point is not assigned. See

U.S.S.G. § 4A1.2(c).3 The misdemeanor and petty offenses which can qualify for the


       3
          Section 4A1.2(c) states:


                                               7
exclusion are listed in U.S.S.G. § 4A1.2(c), and the offense of falsifying business records is

not among them. Furthermore, Milstein does not identify–and this Court does not find–any

of the offenses listed in § 4A1.2(c)(1) or (2) to be sufficiently analogous to the offense of

falsifying business records as would justify including his prior offense among those which



       Sentences for all felony offenses are counted. Sentences for misdemeanor and
       petty offenses are counted, except as follows:

       (1) Sentences for the following prior offenses and offenses similar to them, by
       whatever name they are known, are counted only if (A) the sentence was a term
       of probation of at least one year or a term of imprisonment of at least thirty days,
       or (B) the prior offense was similar to an instant offense:
               Careless or reckless driving
               Contempt of court
               Disorderly conduct or disturbing the peace
               Driving without a license or with a revoked or suspended license
               False information to a police officer
               Fish and game violations
               Gambling
               Hindering or failure to obey a police officer
               Insufficient funds check
               Leaving the scene of an accident
               Local ordinance violations (excluding local ordinance violations that are
               also criminal offenses under state law)
               Non-support
               Prostitution
               Resisting arrest
               Trespassing
       (2) Sentences for the following prior offenses and offenses similar to them, by
       whatever name they are known, are never counted:
               Hitchhiking
               Juvenile status offenses and truancy
               Loitering
               Minor traffic infractions (e.g., speeding)
               Public intoxication
               Vagrancy.

U.S.S.G. § 4A1.2(c).


                                                 8
can qualify for the exclusion. See United States v. Elmore, 

, 27 (3d Cir. 1997)

(holding that, in the Third Circuit, the determination of whether a prior conviction is for an

offense sufficiently similar to one of the identified offenses in U.S.S.G. § 4A1.2(c) turns on

a comparison of the elements of the offense of the prior conviction and the proposed

analogous offense under § 4A1.2(c)). Thus, because Milstein’s prior sentence does not

qualify for the exclusion provided by § 4A1.2(c), the District Court did not err by finding that

Milstein’s prior sentence warranted the addition of a Criminal History Point.

       Third, Milstein maintains that his sentence was unreasonable. In reviewing a sentence

for unreasonableness, our inquiry proceeds in two steps. First, this Court must be satisfied

that the District Court gave “meaningful consideration” to the sentencing factors listed in 18

U.S.C. § 3553(a). United States v. Cooper, 

, 329 (3d Cir. 2006). It is not

necessary for the sentencing court to “discuss every argument made by a litigant if an

argument is clearly without merit.” 

Neither is it necessary for the

sentencing court to “discuss and make findings as to each of the § 3553(a) factors if the

record makes clear the court took the factors into account in sentencing.” 

However, “a rote statement of the § 3553(a) factors should not suffice if at

sentencing either the defendant or the prosecution raises ‘a ground of recognized legal merit

(provided it has a factual basis)’ and the court fails to address it.” 

Indispensable to the District Court’s task of giving “meaningful consideration” to the

sentencing factors is that court’s calculation of the correct guidelines range applicable to the

particular case. 

Second, after finding that the sentencing court did meaningfully

                                               9
consider the factors listed in 18 U.S.C. § 3553(a), we must also make sure the sentencing

court reasonably applied those factors to the circumstances of the case. 

second

step, a Court of Appeals must “apply a deferential standard, the trial court being in the best

position to determine the appropriate sentence.” 

party challenging the

sentence bears the burden of proving its unreasonableness. 

       Milstein asserts that the District Court did not reasonably apply the sentencing factors

to the circumstances of the case, and more specifically, that the Court gave inadequate

consideration to Milstein’s asserted remorse and lack of recidivism. We find, however, that

Milstein has failed to show that the sentence he received was unreasonable. As demonstrated

in the above discussion of the appropriate number of Criminal History Points Milstein

merited, Milstein’s only challenge to the District Court’s calculation of the guidelines range

is rejected. In addition, as the above recitation of the facts chronicles, the District Court

meaningfully addressed and resolved each of the claims presented by Milstein in his written

sentencing submission and those he raised at his sentencing hearing. Furthermore, the record

reflects the District Court’s explicit consideration of the statutory sentencing factors. App.

29. As for Milstein’s contention that the District Court, in applying these factors to his

circumstances, did not recognize his “remorse and lack of recidivism,” it is rejected. First of

all, the District Court, noting Milstein’s prior convictions for falsifying business records and

for conspiracy to commit wire fraud, properly found that Milstein was, in fact, a recidivist.

App. 30. Regarding Milstein’s asserted remorse, given our deferential standard of review and

the fact that Milstein’s letter to the judge presented no exceptional circumstances, we cannot

                                              10
say that the District Court, in imposing a sentence of imprisonment largely concurrent with

the sentence Milstein was currently serving for wire fraud conspiracy, unreasonably applied

the sentencing factors to Milstein’s case.

       For these reasons, we will affirm.




                                             11