Case: 1:08-cr-00944 Document #: 60 Filed: 06/02/10 Page 1 of 16 PageID #:161 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION UNITED STATES OF AMERICA vs. HELEN HAWKINS ) ) ) ) ) No. 08 CR 944 Judge Blanche Manning Government's Position Paper as to Sentencing Factors and Response to Defendant's Sentencing Memorandum The UNITED STATES OF AMERICA, by its attorney, PATRICK J. FITZGERALD, United States Attorney for the Northern District of Illinois, respectfully submits this position paper as to sentencing factors, and asks this Court to impose a sentence within the advisory Guidelines range of 15-21 months' imprisonment. I. Background On February 12, 2010, a jury found defendant Helen Hawkins guilty of embezzling, stealing, obtaining by fraud, or converting more than $5,000 from Triumphant Charter School (TCS) in 2004. See 18 U.S.C. ? 666(a)(1)(A). The defendant, who was the school's principal, used the school's American Express card to purchase personal items such as shoes, jewelry, clothing, and diet pills. The government called four witnesses at trial: (1) Jennifer Dai with the Chicago Public School system, who testified regarding the state and federal funding that TCS received; (2) Richard Slingerland, a senior investigator with the Office of the Inspector General for the Chicago Board of Education, who testified regarding his investigation and interviews of the defendant; (3) Sheryl DuPree, a TCS employee who was responsible for collecting cash at TCS, who testified that she never collected any cash from the Case: 1:08-cr-00944 Document #: 60 Filed: 06/02/10 Page 2 of 16 PageID #:162 defendant, and (4) Rick Kozma, a financial investigator, who analyzed the school's and the defendant's financial records.1 As explained in more detail below, the defendant admitted to using the school's American Express card to make personal purchases, but her defense at trial was that she reimbursed the school for those expenses and that she didn't have the necessary criminal intent to embezzle. II. Defendant's Guidelines Range As a matter of process, the district court must properly calculate the Sentencing Guidelines range, treat the Guidelines as advisory, consider the Section 3553(a) factors, and adequately explain the chosen sentence, including an explanation for any variance from the Guidelines range. Gall v. United States, 552 U.S. 38, 48-51 (2007). Under the November 2009 Guidelines Manual, the probation officer's calculation is: Base offense level Loss Amount Abuse of trust TOTAL 6 +6 +2 14 [2B1.1(a)(2)] [2B1.1(b)(1)(D)] [3B1.3] (PSR at 7-10). The government agrees with the probation officer's calculations. With a total offense level of 14 and a criminal history category I, the defendant's Guidelines range for imprisonment is 15-21 months. This range falls within Zone D of the Sentencing Table, for which ? 5C1.1(f) states that the minimum term shall be satisfied by a sentence of imprisonment. See also ? 5B1.1, Application Note 2. Copies of the Government's Trial Exhibits referenced in this memorandum will be made available to the Court upon request and will also be available at the defendant's sentencing hearing. 1 2 Case: 1:08-cr-00944 Document #: 60 Filed: 06/02/10 Page 3 of 16 PageID #:163 The defendant disputes two parts of the probation officer's Guidelines calculation. She first challenges the six-level increase pursuant to ? 2B1.1(b)(1)(D) for a loss amount greater than $30,000, but not more than $70,000. (Def.'s Sent. Memo. 4-5). She then takes issue with the probation officer's conclusion that she is not eligible for a reduction for acceptance of responsibility. (Def.'s Sent. Memo. 5-6). As explained in more detail below, the government agrees with the probation officer's conclusions on both of these issues. A. The Defendant Did Not Reimburse the School and Thus Should Not Receive a Credit Against the Loss Amount. The defendant argues that the loss amount is zero because she reimbursed the school for the personal charges that she made on the school's American Express card. (Def.'s Sent. Memo. 4). In calculating the loss amount, "the court need only make a reasonable estimate." U.S.S.G. ? 2B1.1, Application Note 3(C); see also United States v. Watts, 535 F.3d 650, 658 (7th Cir. 2008). The defendant here does not challenge that $48,370.70 is a reasonable starting point to estimate the loss. Instead, she argues that certain credits should be counted against that reasonable estimate, which would reduce it to zero. Although the defendant does not refer to any authority for such a reduction, it appears that she may be relying on Application Note 3(E)(I) to ? 2B1.1, which states that the loss amount shall be reduced by: the money returned, . . . by the defendant or other persons acting jointly with the defendant, to the victim before the offense was detected. The time of detection of the offense is the earlier of (I) the time the offense was discovered by a victim or government agency; or (II) the time the defendant knew or reasonably should have known that the offense was detected or about to be detected by a victim or government agency. 3 Case: 1:08-cr-00944 Document #: 60 Filed: 06/02/10 Page 4 of 16 PageID #:164 The defendant argues that she repaid the school because in 2003 and 2004, she and her daughter made large cash deposits totaling $151,602 into the school's bank account, as reflected in Defense Group Exhibit 3. (Def.'s Sent. Memo. 4-5). But the evidence proves that those cash deposits were not repayments for the defendant's personal expenses on the school's American Express card. Instead, as the chart below shows, those cash deposits were loans from the defendant's friend, Mozell Barnes, which the school repaid. The six cash deposits in Defense Group Exhibit 3 are included in the chart in bold. Date 3/28/03 4/15/03 4/21/03 6/6/03 6/19/03 7/18/03 9/12/03 9/26/03 10/9/03 10/18/03 12/5/03 12/17/03 12/30/03 1/19/04 Check # or Cash2 Cash Cash 4319 732610024 732610545 4499 708047 Cash 708712 4590 710000 Cash 710487 4698 $30,000 $30,092 $30,000 $90,500 $30,000 $30,000 $30,000 $90,500 $30,000 $30,000 $60,400 Received by TCS $30,000 $22,830 $52,300 Paid by TCS to Barnes All of the checks listed on this chart were included in Gov. Tr. Exs. HCB 2003 and HCB 2004. 2 4 Case: 1:08-cr-00944 Document #: 60 Filed: 06/02/10 Page 5 of 16 PageID #:165 3/5/04 3/16/04 3/23/04 3/26/04 4/6/04 4/23/04 5/21/04 712072 712271 2504 Cash 732615512 Cash 3731 $30,000 $30,000 $9,500 $16,480 $26,000 $22,200 $134,000 Total3 $427,102 $427,700 The timing and amounts of the checks that the school paid to Mr. Barnes prove that the cash deposits in Defense Group Exhibit 3 were loans made by Mr. Barnes to the school.4 Because the school repaid those loans, that money cannot be credited against the defendant's personal expenses on the school's American Express card. Indeed, the school's bank records show that when those cash payments were deposited into the school's account, the money was used to pay school expenses such as payroll, not to pay the American Express bill. (Gov. Tr. Exs. HCB 2003 and HCB 2004).5 3 Mr. Barnes loaned additional money both before and after the time frame in the chart. The government established at trial that the defendant did not have money available in her personal bank accounts to cover these large cash deposits. (See Gov. Tr. Exs. Shore Bank 2003, Shore Bank 2004, Bank One Checking 2003, Bank One Checking 2004, Bank One Savings 2003, Bank One Savings 2004, as well as related summary charts). The defendant's daughter, Gelene Brown, also loaned money to the school, but it doesn't appear that the defendant is relying on those loans to argue that she repaid the school for her personal expenses. In any event, the government established at trial that the school repaid Ms. Brown's loans. (Gov. Tr. Exs. HCB 2003 and HCB 2004). 5 4 5 Case: 1:08-cr-00944 Document #: 60 Filed: 06/02/10 Page 6 of 16 PageID #:166 The defendant mentions a $150,000 debt that she owes to Mr. Barnes, (Def.'s Sent. Memo. 4-5), but the defendant incurred that debt in late December 2004 through April 2005, which was after Investigator Slingerland met with the defendant several times in December 2004 relating to her unauthorized charges on the school's American Express card. Thus, even if the defendant used that additional $150,000 loan to repay the school for her personal charges,6 she could not receive a credit for any such repayment. See ? 2B1.1, Application Note 3(E)(I) (no credits for payments made after the defendant knew or should have known that the offense was detected or about to be detected). B. The Defendant Should Not Receive a Two Level Reduction for Acceptance of Responsibility. The defendant contends that she should receive a reduction in offense level for acceptance of responsibility because she "consistently and truthfully admitted the conduct which is the basis of the conviction" and disputed only whether her conduct was criminal. (Def.'s Sent. Memo. 5). The defendant relies on Application Note 2 to Guideline ? 3E1.1, arguing that she did not challenge her factual guilt and only questioned the applicability of a statute to her conduct. (Def.'s Sent. Memo. 5). The defendant bears the burden of demonstrating that she is entitled to a reduction in her offense level for acceptance of responsibility. United States v. Silvious, The defendant did not use that $150,000 to reimburse the school. Instead, that money was used to keep the school running when the Chicago Board of Education withheld its quarterly payments while it investigated the defendant for embezzlement. But when the investigation determined that the defendant embezzled, the Chicago Board of Education permanently stopped its payments, and the defendant was unable to repay Mr. Barnes. 6 6 Case: 1:08-cr-00944 Document #: 60 Filed: 06/02/10 Page 7 of 16 PageID #:167 512 F.3d 364, 370 (7th Cir. 2008); United States v. Herrera-Ordones, 190 F.3d 504, 512 (7th Cir. 1999). The reduction is not automatic even when a defendant pleads guilty, Silvious, 512 F.3d at 370, and when a defendant puts the government to its burden of proof at trial, the reduction is granted only "in rare situations." U.S.S.G. ? 3E1.1, Application Note 2. The defendant cannot meet her burden of showing that her case is one of the "rare situations" where a defendant should receive a reduction for accepting responsibility despite going to trial. First, the defendant disputed significant factual issues relating to whether she reimbursed the school, and she minimized the extent of her criminal conduct by never fully admitting to all of the personal purchases on the school's American Express card. Second, even after she knew that the Chicago Board of Education was investigating her, she continued to use the card for personal purchases, including to benefit her daughter Gelene Brown and her friend Mozell Barnes. And finally, the defendant has never expressed any contrition, remorse or actual acceptance that what she did was wrong. 1. The Defendant Contested Facts at Trial and Did Not Merely Raise a Legal Defense. The defense at trial was that the defendant did not possess a criminal intent to embezzle because she intended to repay, and actually did repay, the school for her personal purchases on the school's American Express card. But she presented two different stories about how she repaid the school, and the government proved that both stories were lies. 7 Case: 1:08-cr-00944 Document #: 60 Filed: 06/02/10 Page 8 of 16 PageID #:168 The defendant's first story--told to Investigator Slingerland in April 2005--was that she repaid the school by paying cash to Sheryl DuPree, a school employee who worked in the front office. Ms. DuPree testified that the defendant never gave her any cash and that she knew nothing about any reimbursements for personal expenses on the American Express card. The defendant's second story was that she reimbursed the school through various cash deposits and loans from her friend Mozell Barnes and her daughter Gelene Brown. But the government established at trial and in the chart above that the school repaid those loans and that the cash deposits were part of those repaid loans. The defendant's factual challenge on the repayment issue, on which she presented affirmative evidence at trial, shows that she contested her factual guilt and did not merely raise a legal defense. Furthermore, although the defendant never denied purchasing personal items on the school's American Express card, she certainly minimized the extent of her criminal conduct. When Investigator Slingerland interviewed the defendant in April 2005, he gave her the opportunity to identify on his spreadsheets which purchases were personal in nature. Although she identified some of her personal charges, she omitted many charges that were obviously personal, such as purchases for shoes and clothing at stores like Macy's and Nordstrom. (See the charts attached to the Government's Version of the Offense). Even now, the government has conservatively estimated the loss amount because the defendant never fully admitted the extent of her personal charges. (See PSR at 8). Such minimization is inconsistent with truly accepting responsibility for her criminal conduct. 8 Case: 1:08-cr-00944 Document #: 60 Filed: 06/02/10 Page 9 of 16 PageID #:169 Defendant argues that her case is similar to United States v. Fells, 78 F.3d 168 (5th Cir. 1996), where a felon checked a piece of luggage containing a handgun onto a flight from Arkansas to Canada, with a stopover in Texas. The Fifth Circuit held that the district court erred in denying the defendant acceptance points because the defendant "did not deny the underlying facts at trial" and instead argued that "the underlying facts did not legally constitute 'possession' within the Northern District of Texas." Id. at 171. As explained above, however, the defendant here did dispute critical facts at trial relating to whether she reimbursed the school. Had the defendant not challenged that factual issue, the testimony of Sheryl DuPree and a significant portion of the financial evidence would not have been needed. And her changing story about how she reimbursed the school--first by paying cash to Ms. DuPree and then by loans from Mr. Barnes and Ms. Brown--is the opposite of accepting responsibility. This case is nothing like Fells, and the defendant's factual challenges on the significant issue of whether she reimbursed the school should prevent her from receiving a reduction for acceptance of responsibility. 2. Defendant Continued Her Improper Use of the School's American Express Card. When a defendant seeks a reduction for acceptance of responsibility after putting the government to its proof at trial, "a determination that a defendant has accepted responsibility will be based primarily upon pre-trial statements and conduct." U.S.S.G. ? 3E1.1, Application Note 2. Here, the defendant's pre-trial statements and conduct show that she has not accepted responsibility for her actions. When Investigator 9 Case: 1:08-cr-00944 Document #: 60 Filed: 06/02/10 Page 10 of 16 PageID #:170 Slingerland interviewed the defendant on April 12, 2005, the defendant stated that she charged personal expenses on the school's American Express card so that she could accrue American Express "points" in order to do something nice for the school's staff, such as take them on a trip. At trial, the evidence told a different story. According to the American Express statements, on April 27, 2005--just two weeks after the defendant's interview with Investigator Slingerland--the defendant redeemed 322,000 American Express points for Dividend Miles with U.S. Airways. (See Gov. Tr. Ex. AMEX 2005 (June statement)). On cross-examination at trial, the defendant's daughter, Gelene Brown, admitted that she used those Dividend Miles to purchase airline tickets for three personal trips: (1) for herself and her husband to Amsterdam, (2) for herself to London, and (3) for herself and her husband, possibly to Philadelphia. Thus, instead of using the valuable American Express points to benefit the school, the defendant chose to send her daughter on three personal trips. And this occurred after the defendant knew that her improper use of the school's American Express card was under investigation. The defendant also continued to use the American Express card in other ways to benefit herself and her friend Mozell Barnes. For example, on April 15, 2005--just three days after the defendant's interview with Investigator Slingerland--the defendant used the school's American Express card to pay for $466.90 in repairs to her car at River Oaks Honda in Calumet City, Illinois. (See Gov. Tr. Ex. AMEX 2005 (April statement)). And on April 23, 2005, the defendant used the school's American 10 Case: 1:08-cr-00944 Document #: 60 Filed: 06/02/10 Page 11 of 16 PageID #:171 Express card to purchase airline tickets to send Mr. Barnes on a trip to Las Vegas. Id. This pre-trial conduct is inconsistent with acceptance of responsibility. 3. The Defendant Has Not Expressed Any Remorse. The Seventh Circuit has held that, to receive a reduction for acceptance of responsibility after putting the government to its proof at trial, the defendant must show some "expression or conduct exhibiting remorse or [acceptance] of responsibility" in addition to admitting the factual allegations against her. United States v. Rector, 111 F.3d 503, 508 (7th Cir. 1997). Here, the defendant has not expressed any remorse whatsoever and instead has consistently maintained that she did nothing wrong. Instead of showing remorse, the defendant contested her factual guilt by affirmatively putting on a defense case and calling three witnesses. While it is certainly the defendant's right to call witnesses in her defense, that fact is inconsistent with accepting responsibility. The Court should deny the defendant's request to reduce her offense level based on acceptance of responsibility. III. Government's Position on Sentencing Section 3553(a) requires the court to impose a sentence that is "sufficient, but not greater than necessary," to comply with the purposes of sentencing.7 In order to determine the "particular" sentence to impose, the court must consider the familiar Those purposes are the need for the sentence "(A) to reflect the seriousness of the offense, to promote respect for the law, and to provide just punishment for the offense; (B) to afford adequate deterrence to criminal conduct; (C) to protect the public from further crimes of the defendant; and (D) to provide the defendant with needed educational or vocational training, medical care, or other correctional treatment in the most effective manner." 18 U.S.C. ? 3553(a)(2)(A)-(D). 7 11 Case: 1:08-cr-00944 Document #: 60 Filed: 06/02/10 Page 12 of 16 PageID #:172 statutory factors listed in ? 3553(a)(1)-(7). One of those factors is the advisory range set by the Sentencing Guidelines, and another is the Commission's policy statements. ? 3553(a)(4), (a)(5). Although the Sentencing Guidelines are advisory only, "[a]s a matter of administration and to secure nationwide consistency, the Guidelines should be the starting point and the initial benchmark." Gall, 552 U.S. at 49. For two reasons, this court should give serious consideration to the advisory Guidelines range. First, the Sentencing Guidelines are the sole factor in ? 3553(a) that provides any objective sentencing range that can practicably promote the overall goal of minimizing unwarranted sentencing disparities, which is itself a statutorily mandated factor, ? 3553(a)(6). See United States v. Mykytiuk, 415 F.3d 606, 608 (7th Cir. 2005) ("The Guidelines remain an essential tool in creating a fair and uniform sentencing regime across the country."); see also Booker v. United States, 543 U.S. 220, 253 (2005) ("Congress' basic goal in passing the Sentencing Act was to move the sentencing system in the direction of increased uniformity"). The Supreme Court created the advisory system to "continue to move sentencing in Congress' preferred direction, helping to avoid excessive sentencing disparities while maintaining flexibility sufficient to individual sentences where necessary." Booker, 543 U.S. at 264-65. The only way to prevent widespread unwarranted disparities is to give serious consideration to the Guidelines. Second, the Guidelines generally deserve serious consideration because they are "the product of careful study based on extensive empirical evidence derived from the review of thousands of individual sentencing decisions." Gall, 552 U.S. at 46. While 12 Case: 1:08-cr-00944 Document #: 60 Filed: 06/02/10 Page 13 of 16 PageID #:173 there is no "presumption" that a Guidelines sentence is the "correct" sentence, Rita v. United States, 551 U.S. 338, 351 (2007), the Commission is "a respected public body with access to the best knowledge and practices of penology; its judgments should not lightly be disregarded." United States v. Wachowiak, 496 F.3d 744, 753 (7th Cir. 2007) (internal quotation and citation omitted). Furthermore, the Commission is charged by statute to periodically review and revise the Guidelines as the Commission collects comments and data from numerous sources in the criminal justice system, 28 U.S.C. ? 994(o), and these ongoing efforts to refine the Guidelines are another reason to seriously consider the advisory range. As the government explains below, a sentence within the advisory range of 15-21 months' imprisonment is appropriate in this case because the ? 3553(a) factors weigh in favor of such a sentence. A. Nature and Circumstances of the Offense The defendant was the principal of TCS, which was a public school. She held a position of trust and oversaw millions of dollars in federal and state funding that the school received. The defendant abused that position of trust when she chose to use that money for her own personal benefit. Instead of buying books or computers or other school items, the defendant chose to buy Coach handbags, shoes, and jewelry for herself. As shown at trial, the school's finances were in disarray. The school's checking account was often overdrafted. The school missed payments to American Express and as a result was charged significant late fees, given the high balances. The school often 13 Case: 1:08-cr-00944 Document #: 60 Filed: 06/02/10 Page 14 of 16 PageID #:174 couldn't meet its payroll, and the school needed loans from Mr. Barnes just to pay its teachers. It is against this backdrop that the defendant chose to use the school's American Express card to buy luxurious items for herself. These were items that she could not afford to buy on her own. The government presented evidence at trial of the defendant's personal finances. Her personal bank accounts were often overdrafted, she had very little in savings, and she had more than ten active credit cards. She stole from the school because she could not afford to buy these items on her own. B. History and Characteristics of the Defendant The defendant's long history in education makes her crime all the more serious and unfortunate. The defendant is a role model to many of her former students, and her continued failure to accept responsibility for her actions sets a bad example to those who look up to her. Her continued insistence that she did not know that it was improper to use the school's money--funded by the public--to buy Coach handbags, shoes, jewelry, diet pills and other items is incredible. The evidence showed that the defendant did not reimburse the school, but even if she did, a woman of her intelligence and education should know that using the school's money for those purposes, even temporarily, is not only wrong, but criminal. C. Seriousness of the Offense, Respect for the Law, Just Punishment, Adequate Deterrence, and Avoiding Unwarranted Sentence Disparities Embezzling money from a public school is a serious offense. A just punishment is necessary to deter others in positions of trust from committing similar crimes. A sentence within the advisory guideline range of 15-21 months' imprisonment would 14 Case: 1:08-cr-00944 Document #: 60 Filed: 06/02/10 Page 15 of 16 PageID #:175 avoid any unwarranted sentence disparities among defendants convicted of similar crimes. III. Restitution Section 3553(a)(7) requires this Court to consider the need to provide restitution to any victims of the offense. A conservative estimate of the loss amount is $48,370.70, which should be awarded as restitution to the Chicago Board of Education. IV. Conclusion In light of the foregoing, the government respectfully requests that this Court impose a sentence within the advisory Guidelines range of 15-21 months' imprisonment. Respectfully submitted, PATRICK J. FITZGERALD United States Attorney By: /s/ Angel M. Krull ANGEL M. KRULL Assistant United States Attorney 219 S. Dearborn Street, 5th Floor Chicago, Illinois 60604 (312) 886-2954 Dated: June 2, 2010 15 Case: 1:08-cr-00944 Document #: 60 Filed: 06/02/10 Page 16 of 16 PageID #:176 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION UNITED STATES OF AMERICA vs. HELEN HAWKINS ) ) ) ) ) No. 08 CR 944 Judge Blanche Manning Certificate of Service The undersigned Assistant United States Attorney hereby certifies that the Government's Position Paper as to Sentencing Factors and Response to Defendant's Sentencing Memorandum was served on June 2, 2010, in accordance with Fed.R.Crim.P. 49 and the General Order on Electronic Case Filing (ECF) pursuant to the district court's system as to ECF filers. Respectfully submitted, PATRICK J. FITZGERALD United States Attorney By: /s/ Angel M. Krull ANGEL M. KRULL Assistant United States Attorney 219 S. Dearborn Street, 5th Floor Chicago, Illinois 60604 (312) 886-2954