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United States v. Sullivan

United States Court of Appeals, Eighth Circuit

April 5, 2017

United States of America Plaintiff- Appellee
Mark Allen Sullivan Defendant-Appellant

          Submitted: December 16, 2016

         Appeal from United States District Court for the District of South Dakota - Aberdeen

          Before KELLY and MURPHY, Circuit Judges, and MAGNUSON, [1] District Judge.

          PER CURIAM.

         Mark Sullivan pleaded guilty to one count of wire fraud, in violation of 18 U.S.C. § 1343, and was sentenced to a term of imprisonment of 41 months. Sullivan was ordered to pay restitution in the amount of $56, 464 to Lowell Lundstrom, Jr., of South Dakota, and in the amount of $48, 000 to Paul Rohde, of Kansas. Sullivan appeals his sentence and the Lundstrom restitution order. Because we conclude the district court committed procedural error when it departed upward from the advisory sentencing guidelines, we remand for resentencing. Because we conclude Sullivan's appeal waiver is enforceable as to the restitution order, we dismiss the appeal of the restitution order.

         I. Background

         Sullivan sold farm equipment on the internet, buying used tractors and other farm equipment and reselling them. In 2010, Lundstrom sent Sullivan two wire transfers totaling $51, 600 for the purchase of a tractor and loader. Lundstrom received the loader but Sullivan provided a different tractor from the one he promised, which broke down and had to be repaired. Lundstrom obtained a default judgment against Sullivan in South Dakota state court in the amount of $56, 464.44, reflecting the payments he sent Sullivan and reimbursement for other costs associated with repairing the tractor received.

         In September 2015, Sullivan was charged by superseding indictment with two counts of wire fraud based on the two wire transfers Lundstrom had sent Sullivan. He pleaded guilty pursuant to a written plea agreement to one of the counts, and the parties agreed to recommend a sentence of time served. Sullivan also agreed to pay restitution to Lundstrom in an amount to be determined by the court and restitution to Rohde in the amount of $48, 000 for a separate transaction. Sullivan further agreed to waive his right to appeal any non-jurisdictional issues except for "any decision by the Court to depart upward pursuant to the sentencing guidelines as well as the length of his sentence for a determination of its substantive reasonableness should the Court impose an upward departure or an upward variance pursuant to 18 U.S.C. § 3553(a)."

         A presentence investigation report (PSR) was prepared. The PSR calculated Sullivan's total offense level as 13[2] and his criminal history category as II, yielding an advisory sentencing guideline range of 15 to 21 months.[3] The court notified the parties prior to sentencing that it was considering a substantial upward departure from the recommended sentencing Guidelines range based on underrepresentation of criminal history. At the sentencing hearing, the court heard testimony from the government's case agent, FBI Special Agent (SA) Matt Miller, and Sullivan's cousin, Roger Sullivan, who delivered farm equipment for Sullivan. Lundstrom also made a statement to the court. As anticipated in the plea agreement, the government and Sullivan both recommended a sentence of time served-about 17 months.[4]

         Describing the offense as a "Ponzi scheme, " the district court found that Sullivan had "escaped any punishment to amount to anything in . . . various state courts." After noting the advisory Guidelines range, the district court found "that a criminal history category of II substantially underrepresents the actual criminal history of the defendant, as well as a likelihood that he will commit further acts of fraud. He has committed the same fraud several times." The court determined that Sullivan's criminal history category should be VI instead of II, stating that "the proper criminal history category for the defendant is a VI. Not a II, not a III, and not a IV, and not a V. A VI." Applying criminal history category VI, the court determined Sullivan's new advisory range was 33 to 41 months and sentenced Sullivan to 41 months' imprisonment, and three years of supervised release, and ordered him to pay restitution of $56, 464.44 to Lundstrom and $48, 000 to Rohde, and a $100 special assessment.

         II. Discussion

         Sullivan challenges his sentence as both procedurally and substantively unreasonable. He also argues the district court's restitution award to Lundstrom was not supported by the evidence.

         A. Sentence

         We review the reasonableness of sentences in two parts: first, for significant procedural error, and second, if there is no significant procedural error, for substantive reasonableness. United States v. Barker, 556 F.3d 682, 689 (8th Cir. 2009). "Procedural error includes . . . failing to adequately explain the chosen sentence-including an explanation for any deviation from the Guidelines range." United States v. Scales, 735 F.3d 1048, 1051-52 (8th Cir. 2013) (quoting United States v. Feemster, 572 F.3d 455, 461 (8th Cir. 2009) (en banc)). "In reviewing a sentence for procedural error, we ...

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