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Prewitt v. United States

May 3, 1996




Appeal from the United States District Court for the Southern District of Indiana, Indianapolis Division. No. 95 C 246--Sarah Evans Barker, Chief Judge.

Before CUMMINGS, CUDAHY, and MANION, Circuit Judges.

MANION, Circuit Judge.



Jack Prewitt, a convicted insurance-scam artist, appeals from the denial of his habeas corpus challenge to his federal sentence for mail fraud. He asserts among other things that he received ineffective assistance of counsel because his attorney failed to argue for the application of a sentencing guideline provision. Because the provision under which Prewitt seeks a reduction in his sentence does not apply to him, and his other arguments are not well-founded, we affirm his sentence.


In the early 1980's Jack Prewitt and two other men concocted a scheme to sell stock in a corporation whose only assets were the investors' own funds. Approximately 140 victims invested over $2 million in the bogus company. While Prewitt realized $400,000 in gains, the victims lost all the money they invested. In a second scheme Prewitt convinced investors to cash in their existing life insurance policies and provide the cash to him on his promises that he would obtain better life insurance policies for them. Prewitt pocketed the money instead of paying the premiums and the new policies lapsed for non-payment, leaving the victims with no insurance and no cash value in their policies. This plot defrauded investors of $61,000.

In 1988 authorities in the Northern District of Indiana caught up to Prewitt, arrested him, and charged him with mail fraud and filing a false tax return in separate indictments for the separate schemes. He pleaded guilty to the charges pursuant to a plea agreement. The Northern District court sentenced Prewitt under pre-Guidelines law to concurrent prison terms of three years on the mail fraud counts and three years probation for filing a false tax return. He was also ordered to make restitution of $526,500. He spent just over two years in prison for these crimes.

From late 1989 through mid-1990, while released on bond pending the resolution of the Northern District charges, Prewitt and two different men perpetrated one more scheme to defraud thirteen victims of over $300,000 by falsely representing the investment potential of Sterling American Financial Group, Inc., another sham company. In October 1992--one week before his release from prison on the Northern District convictions--a grand jury sitting in the Southern District of Indiana indicted Prewitt (along with his codefendants) on five counts of mail fraud for the Sterling scheme. *fn1 A jury convicted him of these charges. The Southern District court sentenced Prewitt under the 1992 Sentencing Guidelines to 27 months imprisonment and three years supervised release.

Prewitt appealed this conviction arguing that he was charged with the same conduct in the Northern and Southern Districts of Indiana. This court affirmed Prewitt's Southern District conviction. United States v. Prewitt, 34 F.3d 436 (7th Cir. 1994). We concluded that the plea agreement which resolved the two indictments in the Northern District did not preclude the U.S. Attorney for the Southern District from charging Prewitt with fraud for his 1989-90 scheme while out on bond because the indictment involved crimes separate and distinct from those in the Northern District prosecution. Id. at 440-41.

Prewitt later moved the Southern District court to declare his sentence concurrent with the Northern District sentence. He alleged the government delayed prosecuting him in the Southern District to deny him the benefit of United States Sentencing Guideline sec. 5G1.3, which governs the sentencing of a defendant who is convicted of a crime while subject to an undischarged term of imprisonment for a previous conviction. Prewitt sought application of sec. 5G1.3(c) which provides in part:

[T]he sentence for the instant offense shall be imposed to run consecutively to the prior undischarged term of imprisonment to the extent necessary to achieve a reasonable incremental punishment for the instant offense. (Emphasis supplied.)

The Southern District denied the motion stating that it lacked authority to modify Prewitt's sentence.

After he received new counsel Prewitt moved to vacate the Southern District sentence pursuant to 28 U.S.C. sec. 2255. He argued that but for the government's delay in indicting him in the Southern District, he still would have been in prison under his Northern District sentence when he was sentenced in the Southern District, entitling him to the benefits of sec. 5G1.3(c) and (he asserts) a shorter sentence. The Southern District court denied Prewitt's petition reasoning that sec. 5G1.3(c) did not apply and that misapplication of a Sentencing Guideline was not an appropriate basis for relief under sec. 2255.

The district court had jurisdiction over this case pursuant to 28 U.S.C. sec. 2255 and we entertain this appeal pursuant to 28 U.S.C. sec. 2253. We review de novo the district court's denial of a sec. 2255 motion. ...

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