United States v. Peppel - 707 F.3d 627 (6th Cir. 2013)

Rule:

A sentence may be considered substantively unreasonable when the district court selects a sentence arbitrarily, bases the sentence on impermissible factors, fails to consider relevant sentencing factors, or gives an unreasonable amount of weight to any pertinent factor. The applicable U.S. Sentencing Guidelines range represents the starting point for substantive-reasonableness review because it is one of the 18 U.S.C.S. § 3553(a) factors and because the Guidelines purport to take into consideration most, if not all, of the other § 3553(a) factors. While the standard of review does not change based on whether a sentence is inside, just outside, or significantly outside the Guidelines range, the greater the district court's variance, the more compelling the evidence must be.

Facts:

Defendant-Appellee Michael Peppel, former President, CEO, and Chairman of the Board of Directors of MCSi, Inc. ("MCSi"), conspired with CFO Ira Stanley to falsify MCSi accounting records and financial statements in order to conceal the actual earnings from shareholders, while at the same time laundering proceeds from the sale of his own shares in a public stock offering. For this conduct, the sentencing guidelines provided a sentencing range of 97-121 months' imprisonment. The district court, based almost solely on its estimation of defendant as "a remarkably good man," varied downward drastically from this advisory range, imposing a custodial sentence of only seven days-a 99.9975% reduction. Plaintiff government appealed the substantive reasonableness of the seven-day sentence, arguing that a seven-day sentence did not adequately reflect the seriousness of the offense, serve the goal of general deterrence, or avoid national sentencing disparities, and that the district court placed disproportionate weight on disfavored factors.

Issue:

Did the district court correctly impose the sentence on the defendant? 

Answer:

No.

Conclusion:

The court held that the district court erred by considering impermissible factors such as defendant's public humiliation. Moreover, the court noted that the seven-day custodial sentence did not adequately serve the goal of general deterrence, particularly in light of binding precedent. The district court's imposition of a seven-day sentence and its assertion that such a sentence would effectuate general deterrence was thus an abuse of discretion. The district court abused its discretion in imposing a sentence that did not avoid national sentencing disparities.