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United States v. Roach

July 10, 2002

UNITED STATES OF AMERICA, PLAINTIFF-APPELLANT,
v.
ELIZABETH R. ROACH, DEFENDANT-APPELLEE.



Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 00 CR 411--Matthew F. Kennelly, Judge.

Before Posner, Evans, and Williams, Circuit Judges.

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

ARGUED DECEMBER 3, 2001

Elizabeth Roach embezzled more than $240,000 from her employer over a three-year period. She did this in order to repay significant debt incurred by her excessive purchases of jewelry and clothes, and to conceal that debt from her husband. Roach pleaded guilty to one count of wire fraud in violation of 18 U.S.C. § 1343. At sentencing, the district court granted her motion under U.S.S.G. § 5K2.13 for a downward departure from the applicable sentencing range, finding that she committed the offense while suffering from a significantly reduced mental capacity. We conclude that the district court abused its discretion in granting the departure, and therefore vacate the sentence and remand the case for resentencing.

I. BACKGROUND

Roach suffers from chronic depression and for most of her adult life has turned to unnecessary and excessive shopping to relieve the pain of that depression. For years, she has undergone psychiatric therapy for this behavior--which her doctors describe as compulsive shopping--and for depression. Roach's shopping binges caused a severe strain on her marriage, and she consistently engaged in behavior to hide her binges from her husband, such as having credit card statements sent to friends' homes or manipulating the entries in their checkbook. If her husband tried to prevent her from using their credit cards, she obtained new ones. Although she and her husband had a combined annual income of more than $300,000 (and considerable equity in a condominium in one of Chicago's most fashionable neighborhoods), Roach carried tens of thousands of dollars in credit card debt resulting from purchases of jewelry and clothes at upscale stores like Neiman Marcus and Barneys New York. On one occasion she applied for and obtained a store credit card and charged $10,000 that same day. Roach said that she was terrified that her husband would leave her if he discovered the extent of her shopping and shopping-related debts.

The fraud began soon after Roach was hired by Andersen Consulting as an experienced manager and later as an associate partner earning an annual salary of $150,000. It started innocently enough, when Roach submitted to Andersen an expense report seeking reimbursement for conference registration fees that she had paid using her personal charge card. When she was later unable to attend the conference, the fees were refunded, but by then, Andersen had already processed her expense request and reimbursed her for the fees. Although she knew she should return the money, she realized that keeping the money provided an opportunity to pay some of her debt and hide the debt from her husband. After that incident, and continuing for three years until she was fired, Roach submitted expense reports that contained hundreds of incidents of falsified expenses totaling more than $240,000. The district court summarized these incidents as follows:

The falsifications took several different forms. She padded her expenses in approximately 160 instances, obtaining just over $19,000 to which she was not entitled. On 102 occasions, she submitted expense reports for reimbursement of air fares that had actually been billed directly to Andersen, and in this way she obtained around $89,000. On twenty-five occasions, Ms. Roach requested reimbursement for conferences that she had registered for but had not attended, for a total of over $115,000. On thirteen occasions, she submitted expense reports for expenses that Andersen had already reimbursed, for a total just short of $16,000. And on three occasions, Ms. Roach sought and obtained reimbursement for personal expenses which she falsely labeled as business expenses, totaling just over $1,200. It does not appear to the Court that each of these 323 incidents of false reporting represents a separate expense report; though it is not entirely clear, it appears that they represent false line items on a somewhat smaller number of reports, though the exact amount is not clear to the Court. The total amount that she obtained from Andersen by fraud over the three years from April 1996 through April 1999 is $241,061.

Roach pleaded guilty to knowingly executing a scheme to defraud Andersen by use of a wire transmission in interstate commerce (at least one of the false reports was sent by email from Philadelphia to Chicago) in violation of 18 U.S.C. § 1343. For purposes of sentencing, the United States Sentencing Commission Guidelines assign a base offense level of 6 to that crime. U.S.S.G. § 2F1.1. This base level was increased by 8 because her fraud involved more than $200,000, see U.S.S.G. § 2F1.1(b)(1)(I), and further increased by 2 levels because her offense involved more than minimal planning, see U.S.S.G. § 2F1.1(b)(2), resulting in an adjusted offense level of 16. The government agreed that the offense level should be reduced to 13 based on Roach's acceptance of responsibility. See U.S.S.G. § 3E1.1. With a criminal history category of I, *fn1 the prescribed sentencing range at level 13 is 12-18 months' imprisonment. U.S.S.G. § 5A. At that range, the minimum sentence must be satisfied by imprisonment, without the use of alternatives such as community confinement or home detention. See U.S.S.G. § 5C1.1(f) & cmt. n.8.

Roach moved for a downward departure from the guidelines range based on diminished capacity, pursuant to U.S.S.G. § 5K2.13. The district court granted her motion, finding that her offense was motivated and caused by her compulsive shopping and depression and that she had a significantly impaired ability to control her behavior. The court sentenced Roach to five years' probation, and imposed, as special conditions of probation, six weeks' work release at the Salvation Army Center, six months' home confinement with weekend electronic monitoring, and a prohibition against Roach's obtaining any new credit cards without the court's permission. The court also ordered restitution in the amount of $241,061.08 *fn2 and imposed a $30,000 fine and mandatory special assessment of $100. The government appeals the sentence pursuant to 18 U.S.C. § 3742(b)(3).

II. ANALYSIS

We review the district court's decision to impose a sentence lower than the guideline range for abuse of discretion, which "includes review to determine that the discretion was not guided by erroneous legal conclusions." Koon v. United States, 518 U.S. 81, 100 (1996). We review for clear error a sentencing court's resolution of factual questions related to its decision to depart, United States v. Crucean, 241 F.3d 895, 899 (7th Cir. 2001), and will reverse based on clear error only if "we are left with a 'definite and firm conviction that a mistake has been committed.' " United States v. Huerta, 239 F.3d 865, 875 (7th Cir. 2001) (quoting United States v. United States Gypsum Co., 333 U.S. 364, 395 (1948)).

Emotional and mental disorders are ordinarily not a basis for departing from the prescribed sentence. See U.S.S.G. § 5H1.3 (policy statement); United States v. Pullen, 89 F.3d 368, 370 (7th Cir. 1996). A departure may be warranted, however, if the defendant suffers from a "significantly reduced mental capacity":

A sentence below the applicable guideline range may be warranted if the defendant committed the offense while suffering from a significantly reduced mental capacity. . . . If a departure is warranted, the extent of the departure should reflect the extent to which the reduced mental capacity contributed to ...


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