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United States v. Hallahan

United States Court of Appeals, Seventh Circuit

March 7, 2014

United States of America, Plaintiff-Appellee,
v.
Janet Hallahan and Nelson G. Hallahan, Defendants-Appellants.

Argued January 10, 2014

Appeals from the United States District Court for the Central District of Illinois. Nos. 12-cr-10054 and 99-cr-10045 - Joe Billy McDade, Judge.

Before Flaum and Easterbrook, Circuit Judges, and Griesbach, District Judge. [*]

Griesbach, District Judge

Defendants-Appellants Janet and Nelson Hallahan engaged in a prolonged fraud that bilked investors out of more than $1, 000, 000. They pled guilty, as part of plea agreements, to two counts of conspiracy. Rather than face sentencing for their crimes, the defendants chose to flee the district. They remained on the run for twelve years. After they were finally arrested, both pled guilty without a plea agreement to the additional crime of failing to appear for sentencing. At their long-delayed sentencing in 2012, the district court imposed above-guideline sentences of 270 months on Nelson Hallahan and 195 months on Janet Hallahan. They now challenge their sentences on a variety of grounds, despite having waived their rights to appeal in their original plea agreements. We affirm.

I. BACKGROUND

On January 6, 2000, the defendants pled guilty to conspiracy to commit mail and bank fraud, in violation of 18 U.S.C. §§ 371, 1341, and 1344, and conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h), as part of plea agreements. The charges stemmed from their actions beginning in 1993 or earlier until 1999, during which time they convinced individuals to provide loans ostensibly for Janet Hallahan's tanning business. As a result of these acts, they were charged with sixteen counts of mail fraud, nine counts of money laundering, and three counts of bank fraud, in addition to the conspiracy charges. In exchange for their guilty pleas on the conspiracy counts, the government agreed to move to dismiss the other charges, not bring additional charges related to the offenses, recommend a downward adjustment for acceptance of responsibility, and recommend a sentence at the low end of the applicable guideline range. The plea agreements also included appeal waivers:

[T]he defendant knowingly waives the right to appeal any sentence within the maximum provided in the statute of conviction (or the manner in which that sentence was determined) on the grounds set forth in Title 18, United States Code, Section 3742 or on any ground whatever, in exchange for the concessions made by the United States in this plea agreement.

After a full and complete plea colloquy in accordance with Rule 11 of the Federal Rules of Criminal Procedure, the district court accepted both pleas, finding that Janet and Nelson Hallahan were competent to enter their pleas and did so knowingly and voluntarily.

The defendants were scheduled to be sentenced on May 4, 2000, but they did not appear. Instead, the defendants chose to flee. The probation office discovered the defendants had absconded on January 18, 2000-just twelve days after they pled guilty. For the next twelve years, they eluded justice while living in Missouri and Arizona. They were arrested on May 12, 2012, in Arizona, where they were residing under false names. Upon their return, Janet and Nelson Hallahan were charged with, and pled guilty to, willfully failing to appear for sentencing, in violation of 18 U.S.C. § 3146(a)(1).

On November 28, 2012, the district court finally sentenced Janet and Nelson Hallahan on the conspiracy and failure to appear counts. Both Janet and Nelson Hallahan argued that the court should use the version of the United States Sentencing Guidelines Manual (U.S.S.G. or Guidelines) that was in effect at the time of the offenses, rather than the version in effect at the time of the sentencing, to avoid a violation of the Ex Post Facto Clause. The district court disagreed and calculated the advisory sentencing range using the 2012 Guidelines which were in effect at the time of sentencing, consistent with this Court's decision in United States v. Demaree, 459 F.3d 791 (7th Cir. 2006). Based on the 2012 Guidelines, the district court calculated the advisory range to be 210 to 262 months for Nelson Hallahan and 135 to 168 months for Janet Hallahan. Under the 1998 Guidelines, which were in effect at the time of the offenses, the advisory range would have been 121 to 151 months for Nelson Hallahan and 97 to 121 months for Janet Hallahan.

After hearing arguments from all of the parties, including the government's request for the "longest of sentences, " the district court imposed a sentence of 270 months on Nelson Hallahan and 195 months on Janet Hallahan based on its consideration of the sentencing factors under 18 U.S.C. § 3553(a). These sentences represented upward variances from the sentencing range under the 2012 Guidelines. Nelson and Janet Hallahan filed timely appeals. We consolidated the appeals on our own motion for purposes of briefing and disposition.

II. ANALYSIS

On June 10, 2013, while these appeals were pending, the Supreme Court decided Peugh v. United States, __U.S. __, 133 S.Ct. 2072, 2078 (2013), in which it abrogated this Court's decision in Demaree and held that the Ex Post Facto Clause is violated "when a defendant is sentenced under Guidelines promulgated after he committed his criminal acts and the new version provides a higher applicable Guidelines sentencing range than the version in place at the time of the offense." In light of the Supreme Court's decision in Peugh, the defendants contend that the district court violated the Ex Post Facto Clause when it used the 2012 Guidelines in determining their sentences. They also argue that the district court incorrectly calculated the base offense level for the conspiracy to commit money laundering count, regardless of which version of the Guidelines applies, and that the district court failed to follow the procedure prescribed by the Guidelines for determining their sentences for the failure to appear counts. Janet Hallahan separately presents two additional challenges. First, she argues the district court erred when it failed to rule on her motion to withdraw from the appeal waiver provision of the plea agreement. Second, she contends that the district court's 195-month sentence was substantively unreasonable.

In response, the government has forcefully argued that the challenges related to the two conspiracy counts to which Nelson and Janet Hallahan pled guilty in 2000 are barred by the appeal waivers in their plea agreements. According to the government, even if the district court did err in applying the 2012 Guidelines or in calculating the base offense level for the money laundering offense, Nelson and Janet Hallahan bargained away their rights to appeal as part of valid and enforceable plea agreements. On the merits, the government argues that there is no ex post facto violation because, under the one-book rule, the latter version of the Guidelines applies when the earlier offense is grouped with a subsequent crime. The government concedes, however, that the base offense level was miscalculated on the money laundering count, but contends that the district court correctly applied the Guidelines for the failure to appear count. As for Janet Hallahan's separate challenges, the government argues that the district court provided ample reasons to support her sentence and the district court's failure to rule on her motion to withdraw from the plea agreement is not reversible error because it has no chance of success on remand.

A. Appeal Waivers

The parties have focused much of their attention on the enforceability of the appeal waivers contained in the plea agreements the defendants signed in 2000 when they pled guilty to the conspiracy counts. In response to the government's contention that they waived their rights to challenge the guideline calculation for the conspiracy offenses as part of their plea agreements, the defendants have argued that the appeal waivers are not enforceable. Regardless of whether they are enforceable, however, we conclude that the appeal waivers do not bar our review of the district court's guideline calculation on the conspiracy counts. This is because the district court used the same guideline to determine the defendants' sentences for the additional offense of failure to appear. As we explain below, all three offenses were, in Guidelines terminology, grouped, and therefore any error in the guideline calculation for the conspiracy counts necessarily affected the sentence imposed by the district court for the failure to appear count. Since the defendants did not waive their right to appeal when they entered their guilty pleas to that offense, they are entitled to review of the guideline calculations that were used as a starting point in the sentencing determination.

The issue of whether the waivers are enforceable is nevertheless relevant at least as to Janet, however, because she also challenges her sentence for the conspiracy offenses on substantive grounds. If her appeal waiver is enforceable, then her challenge to her sentence on those counts is barred. We therefore must determine whether the government is entitled to enforce Janet's waiver of her right to appeal. Before deciding that issue we turn first to Janet's claim that the district court committed plain error when it failed to rule on her motion to withdraw from the plea agreement. We decide that issue first, for if she should ultimately prevail on her motion, the appeal waiver does not apply to her in any event.

1. Failure to Rule on Motion to Withdraw from the Plea Agreement

After Janet and Nelson were arrested in Arizona, but before they were sentenced, Janet filed a motion to withdraw her guilty plea to the conspiracy counts and, alternatively, to withdraw from her plea agreement. Rule 11 requires "a fair and just reason" for withdrawing a guilty plea before sentencing. Fed. R. Crim. P. 11(d)(2)(B). Janet asserted that there were three fair and just reasons for the district court to permit her to withdraw her plea: (1) she was innocent of the charges; (2) her attorney provided ineffective assistance; and (3) she was coerced and intimidated into accepting the plea agreement by Nelson.

In support of her alternative request that she be allowed to withdraw from her plea agreement, Janet alleged that the reasons were "obvious" in that "[a]ll the benefits Ms. Hallahan sought from a plea agreement are no longer binding on the Government or this court." She noted that the government would no longer be required to make recommendations for a three-level reduction to her offense severity score for acceptance of responsibility or for a sentence at the low end of the applicable guideline range. Janet also argued that the government would no longer be bound to dismiss the remaining counts in the indictment or refrain from filing additional charges based on the same course of conduct. Whereas the benefits she derived from the plea agreement had been lost, Janet noted that her appeal waiver remained. She explained that she wished to preserve her appeal rights to seek review of the district court's order and sentence in the event the court did not allow her to withdraw her plea or sentenced her under the current version of the Guidelines.

Relying on United States v. Darnell, 716 F.2d 479 (7th Cir. 1983), the district court summarily denied Janet's motion to withdraw her plea on the ground of laches. In Darnell, the defendant sought to withdraw his plea some twenty years after his conviction. Though the defendant alleged "a repugnant tale of violations of his constitutional and statutory rights, " this Court found it unnecessary to determine the truth of the allegations and affirmed the district court's denial of the motion on the ground that "Darnell has not exercised reasonable diligence in ascertaining and presenting the asserted grounds for relief." Id. at 479–80. The Court identified two facts that justified the district court's conclusion that the motion was barred: (1) the government's ability to meet successfully the allegations of the motion or to present a case against the defendant if he was granted a new trial would be greatly diminished by the passage of time; and (2) Darnell had not even attempted to demonstrate that the twenty-year delay was excusable. Id. at 480–81.

In denying Janet's motion to withdraw her plea in this case, the district court likewise concluded that the government would suffer significant prejudice as a result of the twelve-year delay in the event Janet's motion was granted. The case was complex, and the events underlying the offenses dated back more than twenty-five years. The law enforcement officers who investigated the case had all retired, and it would be difficult, if not impossible, to present testimony from many of the victims and witnesses, who were already quite elderly at the time the crimes were committed. The district court also found that Janet had failed to provide a legitimate excuse for her delay in bringing her motion. Indeed, the court found that the twelve-year delay resulted solely and directly from her unlawful decision to flee the court's jurisdiction in an effort to avoid being held accountable for her crimes. Based on these facts alone, the district court concluded that Janet's motion to withdraw her plea was barred under the doctrine of laches.

Janet does not challenge the district court's denial of her motion to withdraw her plea to the conspiracy counts. Instead, she contends that the court erred in failing to address her motion to withdraw from the plea agreement. She argues that her motion to withdraw her plea was separate and distinct from her motion to withdraw from the plea agreement and that it was error for the district court not to address it separately. Because of that error, Janet contends that her case should be remanded.

We find no error in the district court's handling of Janet's motion to withdraw from the plea agreement that would warrant a remand. Although a motion to withdraw a plea is distinct from a motion to withdraw from a plea agreement, we have observed that "the plea agreement and the plea are 'bound up together, '" and thus held that the same standard of "a fair and just reason" for withdrawal applies. United States v. Standiford, 148 F.3d 864, 868 (7th Cir. 1998) (quoting United States v. Hyde, 520 U.S. 670, 677 (1997)). The district court properly rejected Janet's proffered ...


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