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United States v. Austin - 54 F.3d 394 (7th Cir. 1995)


The Application Notes to U.S. Sentencing Guidelines Manual § 3C1.1 specifically forbid an increase for obstruction of justice where the defendant is convicted for a number of related offenses, including perjury, contempt, failure to appear, and misprision of felony.


Defendant Donald Austin owned and operated Austin Galleries, a chain of art galleries in Chicago, Detroit, and San Francisco. He sold mostly lithographic and serigraphic prints; he sold most of his art as signed original limited edition prints. His customers thought they were buying originals. The customers were wrong; most of what Austin sold were forgeries. His employees advised him of the forgeries, which he ignored. The Government, by the United State Federal Trade Commission ("FTC") charged Austin filed an action against Austin. Following the investigation, Austin entered into a settlement agreement with the FTC. The agreement, as approved by the court, prohibited Austin from making misrepresentations in the sale of artwork. Austen nevertheless attempted to sell forgeries. The Government  thereafter initiated criminal proceedings against Austin on various fraud-related charges, and a grand jury indicted him. At trial in federal district court, the Government, which relied heavily on the information produced by the FTC investigation, introduced extensive evidence of fraud against Austin. A jury returned guilty verdicts against Austin on all counts, and the trial judge sentenced him to 102 months imprisonment to be followed by two years supervised release. The court also ordered Austin to pay into the FTC's compensation fund $ 505,000, which was the difference between the restitution he had already made, about $ 120,000, and the original sum stipulated in the FTC settlement, $ 625,000. Austin appealed his convictions and sentence.


  1. Did Double Jeopardy bar Austin’s conviction in light of the earlier FTC suit and settlement?
  2. Did the first two factors justify the obstruction of justice sentence enhancement?
  3. Was the four-level enhancement for being an organizer or leader proper?


(1) No; (2) Yes; (3) No.


The appellate court affirmed Austin's convictions, vacated that part of Austin's sentence that provided for an enhancement based on his alleged role as an organizer or leader and remanded the matter for resentencing. The court ruled, inter alia, that:(1) While "punitive" civil sanctions could constitute punishment for the purposes of the Double Jeopardy Clause and where a civil punishment precedes a criminal trial jeopardy might attach, when Austin violated the terms of the settlement and the amount he owed increased, the FTC was still only holding Austin liable for an amount less than that it thought his fraud had caused. Thus, the net consequence of the FTC's actions was still remedial. Such circumstances did not implicate the Double Jeopardy Clause. (2) While Austin was correct that double counting was not permitted under the federal sentencing guidelines, the Application Notes to U.S.S.G. § 3C1.1 specifically prohibited an increase for obstruction of justice where the defendant was convicted for a number of related offenses, including perjury, contempt, failure to appear, and misprision of felony. However, one sale by Austin, for which he received the obstruction of justice enhancement, was factually distinct from his concealing certain forgeries from the FTC. The sales and concealment were distinct acts. (3) The Government offered no proof that the five people alleged to be under Austin's control knowingly participated in the fraud scheme. While Austin admitted that some of those individuals testified to having had "suspicions" about the prints sold at Austin Galleries, the Government did not prove by a preponderance of the evidence that any of them were criminally responsible. Thus, the court ruled, the four-level sentence enhancement for being an organizer or leader was improper.

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