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United States v. Tockes

June 27, 2008

UNITED STATES OF AMERICA, PLAINTIFF-APPELLEE,
v.
BRIAN TOCKES, DEFENDANT-APPELLANT.



Appeal from the United States District Court for the Central District of Illinois. No. 07 CR 10019-Joe Billy McDade, Judge.

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

ARGUED FEBRUARY 21, 2008

Before FLAUM, RIPPLE and ROVNER, Circuit Judges.

Brian Tockes, the owner of a home repair and construction company, pled guilty to two counts of filing a false income tax return, in violation of 26 U.S.C. § 7206(1). The district court determined that the applicable sentencing guideline range was twenty-four to thirty months' imprisonment. The court nonetheless sentenced Tockes to the statutory maximum of thirty-six months' imprisonment on each count, to be served concurrently. Tockes appeals his sentence and we affirm.

I.

The Par-A-Dice Riverboat Casino in Peoria bills itself as "The Friendliest Casino on the Water." See http://www. paradicecasino.com/site/casino (last visited May 9, 2008). The casino is open daily from 9 a.m. to 6 a.m., meaning it is closed for a mere three hours each day. Par-A-Dice claims to offer a "unique entertainment experience" for both the "pleasure seeker" and the "serious gambler." The casino recognizes that, "for a small segment of our population, gambling is not entertainment," but rather a source of problems. On the casino's website, if one clicks the ironically titled "Responsible Gaming" icon, one may learn the warning signs for irresponsible gaming, including losing time from work due to gambling, repeated failed attempts to stop gambling, lying about the amount of money spent on gambling, and gambling to escape from life's problems. Absent from the list of warning signs is fleecing the elderly clients of your home construction business to support your gambling habit. Tockes heard the siren call of the casino, and apparently was unable to resist.

In the early 1990's, Russell and Mara Lee James hired Tockes to repair their Peoria home. The Jameses were in their mid-seventies at the time, and in the ensuing years, they developed a friendship with Tockes. The couple had no family members living nearby and came to regard Tockes as a nephew. They relied on him for, among other things, transportation to doctors' appointments, shopping, bill paying, and collection of rent on properties they owned. For many years, this relationship was uneventful. In late 1999, when the Jameses were in their eighties, Tockes arranged for them to move into a nursing home. Around the same time, he began gambling at the Par-A-Dice Casino. He also began fraudulently to bill the Jameses for home repairs. Over the next few years, Tockes managed to transfer ownership of the Jameses' home to his (Tockes') son and son-in-law for a fraction of its worth, helping himself to some of the proceeds. He also charged the Jameses for work he completed on his own house, billed them for repairs to the house they had sold, used their ATM card at the casino to pay for his gambling, and caused them to cash out certificates of deposit and borrow against their life insurance policies in order to cover his mounting gambling losses. Between 1999 and 2003, Tockes swindled the Jameses to the tune of $470,000. Tockes' gambling losses for the years 2000 through 2006 exceeded $450,000.

For the tax years 2000, 2001 and 2002, Tockes failed to report on his federal income tax return the money he obtained by fraud from the Jameses. For the year 2000, Tockes reported income of $74,483 when, in fact, his income was approximately $220,000. For 2001, Tockes reported a total income of $24,997 when the amount was actually closer to $165,946 due to the fraud. For 2002, Tockes reported $64,106 of income when the true total was approximately $95,625. The tax loss to the United States from these three years of under-reporting amounted to $141,495. The loss to the Jameses was, of course, much worse. Tockes was charged with three counts of filing a false income tax return in 2000, 2001 and 2002. He pled guilty to the first two counts and the government moved to dismiss the third count.

By the time of Tockes' sentencing hearing in 2007, Russell James had died and Mara Lee was suffering from dementia. At the hearing, the government presented evidence that law enforcement officers had discovered a second set of victims, Nancy and Virginia McNear, an eighty-five year old woman and her fifty-six year old daughter. As with the Jameses, the government presented evidence that Tockes overcharged the McNears in connection with work he was supposedly performing on their home. Between May 2004 and mid-2006, Tockes collected $800,000 from the McNears for home improvements. The government alleged that, as part of this scheme, Tockes purchased materials for his work at the McNears' home, substantially inflated the bill, and then returned some of the materials for a refund that he then pocketed. In one instance, he charged the McNears $4000 for $400 worth of materials, and then returned some of the materials for a $200 refund. Tockes thus caused the McNears to pay $4000 for materials worth $200, a twenty-fold mark-up. He also charged them a $5000 fee for an "asbestos removal tax" when there is no such tax in Illinois. Illinois prosecutors charged Tockes with aggravated home repair fraud and theft in connection with his work on the McNears' home.

At the time of his sentencing in the federal income tax offense case, the state charges had not been resolved. In the district court, Tockes objected to the admission of any evidence relating to the state home repair fraud charges for the purposes of sentencing. Specifically, his attorney argued that another lawyer represented Tockes in the state case and he was thus unfamiliar with the charges and unable to adequately respond. He also contended that Tockes would have no way to defend himself against this line of evidence without risking incriminating himself in the state court action, and that evidence of this other, unrelated and unproven offense was not a proper consideration for sentencing. As a result of this objection, the district court limited the evidence of the state charges to "the charge and the basis for the charge." Tr. at 21.

The government sought a two-point enhancement under sentencing guideline 3B1.3, for abuse of trust, contending that Tockes held a position of trust with the Jameses and abused that trust when he defrauded them. Tockes objected to this enhancement, and the district court accepted his argument that he did not hold with the Jameses a position of trust "characterized by professional or managerial discretion," as required by section 3B1.3. See U.S.S.G. §3B1.3, Application Note 1. As a result, the court calculated Tockes' guideline offense level as 17, with a criminal history category of I, resulting in a sentencing range of twenty-four to thirty months. The court then sentenced Tockes to the statutory maximum of thirty-six months' imprisonment on each count, to be served concurrently. After setting the length of the term, the court commented:

And you know, I'm sure that sounds like a lot of time, but, sir, everyday I send young people, 25, 22, 23 years old to 40, 50 years in prison, 20 years in prison for-they sold sometimes very small quantities of drugs to people and that's very bad and they pay a heck of a penalty for it. So I find it very difficult to give those young men, who admittedly have not been good family people, usually aren't working, aren't supporting their children, and they don't have character letters, but they go away, and I think fairness requires that you go away, too.

Tr. at 52. The sentencing judge also remarked:

I thought about making these sentences [run] consecutively because that's a possibility too. I could have said three years on each county [sic] to run ...


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