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United States v. Gary

July 28, 2010


Appeal from the United States District Court for the Southern District of Illinois. No. 3:08-CR-30169-001-MJR-Michael J. Reagan, Judge.

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


Before POSNER, WOOD, and HAMILTON, Circuit Judges.

Keith Gary appeals from his sentence for bankruptcy fraud, arguing that the district court failed to give sufficient consideration to his family circumstances. See United States v. Schroeder, 536 F.3d 746, 755-56 (7th Cir. 2008) (remanding for further consideration of defendant's extraordinary family circumstances). We conclude that the district court gave the family issue sufficient consideration, as shown by its efforts to arrange for Gary and his ex-wife to serve staggered prison sentences for their joint crimes. We affirm Gary's sentence.

I. The Facts

Keith Gary and his ex-wife Stacie Gary divorced in 2002, but both remained in the same house taking care of their two children. The Garys' legal troubles began in March 2007, when they filed a joint Chapter 13 bankruptcy petition. Stacie had received a substantial monetary settlement for a workers' compensation claim just days before filing for bankruptcy. The Garys failed to disclose the award in their bankruptcy petition and lied about it while testifying under oath at a later creditors' meeting. After the fraud came to light, both of the Garys were indicted on multiple counts of bankruptcy fraud. Keith pled guilty to three counts for making false statements and taking a false oath. See18 U.S.C. § 152(2) & (3). Stacie pled guilty to five counts.

In a joint sentencing hearing, the district court sentenced Keith at the bottom of his guideline range to a total of 12 months and 1 day in prison. Stacie had a significant criminal history, and the court sentenced her at the top of her higher guideline range to 21 months in prison. Out of concern for the Garys' two children, who faced separation from both parents, the district court tried to ensure that the two defendants would serve their prison terms in sequence.

In the sentencing hearing, Keith argued for a below-guideline sentence, either limited to probation with a condition of home confinement or a split sentence combining no more than five months in prison followed by five months of home confinement. He argued that he was less culpable than Stacie, who had controlled most of the settlement money and had taken steps to hide it in different bank accounts. His primary argument for a below-guideline sentence in the district court was based on his recent employment history. He argued that he had demonstrated his commitment to addressing the financial problems that motivated the bankruptcy fraud, and that his family responsibilities meant he was less likely to commit new crimes.

As might be expected when both parents of young children are facing prison sentences, the defendants' family circumstances were one focus of the sentencing hearing. Keith claimed that his arrest served as a much needed wake-up call to begin to turn things around for himself and his children. Despite earlier struggles with depression and a recent suicide attempt, he said he had tried to make up for his mistakes while he awaited sentencing. He had taken on two jobs to provide for the children, to pay off family debts, and to establish some financial stability. He hoped the district court would recognize his efforts.

Keith acknowledged that, if both he and Stacie were imprisoned, other family members could care for their children. Nevertheless, his attorney asserted in a sentencing memorandum that his absence would take an "extreme" toll on the family because his children would lose the "financial and emotional support" that he was providing as the "sole breadwinner." Keith also urged that, if he was going to be sent to prison, the court should stay the execution of his sentence until Stacie was released from prison so that their children would have continued parental stability.

Keith Gary's applicable guideline range was 12 to 18 months in prison based on a total offense level of 13 and a criminal history category of I. The court addressed the sentencing factors in 18 U.S.C. § 3553(a). The court explained that bankruptcy fraud occurs often but is rarely discovered or prosecuted, and the court expressed the hope that the prison sentence for a first-time offender would serve to deter other potential offenders. Recognizing that a felony conviction by itself is a significant punishment for a first-time offender like Gary, the court reasoned that a low-end sentence was sufficient "to send a message, to promote respect for the law, and to avoid unwarranted disparity among similarly situated defendants."

In summarizing the aggravating factors influencing Keith's sentence, the court noted that both defendants had refused to turn over the proceeds from Stacie's workers' compensation award even after a motion to compel had been filed in the bankruptcy court, and that Keith had a pending state charge for stealing money from his employer. In mitigation, the court acknowledged his history of depression and "poor coping skills." At that point in the combined hearing, however, the district court made no mention of Keith's family circumstances. The court then imposed a prison term of 12 months and 1 day.*fn1

The district court listened with greater skepticism to Stacie's arguments and allocution because of her long history of fraudulent behavior, which included convictions for mail fraud, credit-card fraud, and deceptive practices. She expressed regret for her actions and the harm that she had caused her children. Unconvinced by her display of remorse, the court responded: "You are a deceptive thief, so crying about your kids isn't going to cut it with me. I am interested in anything you want to say, but that cord doesn't ring." Based on her criminal history, her higher risk of recidivism, and the fact that the court found her more culpable than Keith, the court sentenced Stacie at the top of her applicable guidelines range to 21 months in prison. The court then noted the concern expressed by both defendants for their children and agreed to stagger their prison terms so that their children could maintain parental continuity. The court and the parties then spent considerable time discussing the logistics and procedure to execute these sentences.

After the sentences had been pronounced and explained, as the sentencing hearing was concluding, Keith's lawyer said that the court had addressed the family circumstances when addressing Stacie's sentence but had not done so when addressing Keith's sentence. Keith's lawyer asked the court to address more specifically how it had considered the family circumstances when deciding his sentence. In response the district judge stated: "I take that into consideration as well as everything in the PSR. . . . I consider the fact of the kids in this case. I don't think I am required to assign a value to it as part of ...

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