                                                                                                                           Opinions of the United
2002 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


8-14-2002

USA v. Lessane
Precedential or Non-Precedential: Non-Precedential

Docket No. 01-3100




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Recommended Citation
"USA v. Lessane" (2002). 2002 Decisions. Paper 501.
http://digitalcommons.law.villanova.edu/thirdcircuit_2002/501


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                                                 NOT PRECEDENTIAL

                  UNITED STATES COURT OF APPEALS
                      FOR THE THIRD CIRCUIT
                            __________

                           NO. 01-3100
                            __________

                     UNITED STATES OF AMERICA

                                v.

                     CHARLES MICHAEL LESSANE;
                      a/k/a Michael Lessane

                         Charles Michael Lessane,
                                            Appellant
                            __________

        On Appeal from the United States District Court
            for the Middle District of Pennsylvania
                (D.C. Criminal No. 00-cr-00315)
             District Judge: Honorable Yvette Kane
                           __________

                       Argued June 14, 2002

       Before:   ROTH, RENDELL, and ROSENN, Circuit Judges

                    (Filed : August 14, 2002)


                                     Daniel I. Siegel, Esq.     [ARGUED]
                                     Office of Federal Public Defender
                                     Suite 306
                                     100 Chestnut Street
                                     Harrisburg, PA 17101
                                         Counsel for Appellant



                                    Theodore B. Smith, III, Esq. [ARGUED]
                                    William A. Behe, Esq.
                                    Office of United States Attorney
                                    Federal Building, Suite 220
                                    228 Walnut Street
                                    P. O. Box 11754
                                    Harrisburg, PA    17108
                                        Counsel for Appellee
                            __________

                       OPINION OF THE COURT
                            __________

RENDELL, Circuit Judge.
     Michael Lessane appeals from the District Court’s Judgment and Commitment
Order, challenging two aspects of his sentencing: (1) the loss calculation, and (2) the
District Court’s failure to depart downward in order to credit certain time served in York
County prison. Since we agree with Lessane’s first argument, we will remand for re-
sentencing using the proper loss amount. We will not disturb the District Court’s
conclusion that it did not intend to grant Lessane a downward departure.
     The District Court had jurisdiction pursuant to 18 U.S.C. 3231 and we have
jurisdiction under 18 U.S.C. 1291 and 18 U.S.C. 3742(a). Our review of the District
Court’s interpretation of "loss" is plenary, while we review the Court’s factual
determinations for clear error. See, e.g., United States v. Evans, 155 F.3d 245, 252 (3d
Cir. 1998). Because Lessane "challenge[s] the district court’s interpretation of the ’loss’
concept" here, our review is plenary. United States v. Daddona, 34 F.3d 163, 170
(1994).
     Lessane was charged with the illegal distribution of prescription drugs without a
license during the time period from February 1, 1996, up to and including August 25,
1999. He pled guilty and was released on bond pending sentencing. At the same time,
he was returned to York County Prison, where he was being held on related state charges
for having failed to deliver certain drugs to Apple Hill Surgical Center.
     Lessane indicated that he had received the drugs from "a guy" who worked for
McKinnon Distributors, in Maryland, who was supplying them to Lessane from
"overstock." Lessane indicated he sold about $70,000 worth of drugs and made a profit
of around $35,000. He failed to deliver certain drugs to Apple Hill that were worth
approximately $1,200. Otherwise, it appears that the customers who purchased from him
did receive the drugs that they had requested from him.
     The Presentence Investigation Report ("PSI") recommended a base offense level
of 6, based upon a loss calculation under section 2F1.1 of the guidelines for less than
$2,000 in victim loss, namely, Apple Hill’s loss of $1,200. Every purchaser from
Lessane, other than Apple Hill, received what they had bargained for, so that $1,200 was
the amount of loss for purposes of sentencing. The PSI also recommended a two-level
enhancement because the offense involved more than minimal planning, resulting in a
total offense level of 8.
     At sentencing, the government argued that since Lessane procured the drugs
illicitly, the full value of the drugs was the amount of the loss. Lessane’s counsel argued,
on the other hand, that under the guidelines the loss can be estimated with certainty,
namely, $1,200, and that is the amount of loss provided for, because everyone other than
Apple Hill received what they had paid for.
     The District Court heard argument from the government with respect to the
circumstances of the pilfering of drugs from McKinnon Distributors, and because
McKinnon’s loss could not be determined, the District Court reasoned:
                    So I think . . . if we can’t ascertain with any degree of
          confidence the measure of the loss, then we go and say, "Well
          then, what did the defendant gain?" And this defendant says
          he gained $35,000. So at a minimum, we’re looking at a
          $35,000 assessment.

     On appeal, Lessane asserts that the loss was $1,200, and also that even if the loss
to McKinnon should be considered, the issue here is not whether that amount can be
estimated, but, rather, that the government failed to prove a loss in an amount any greater
than $1,200.
     Notwithstanding the apparent confusion at the sentencing hearing with respect to
the amount of the loss, we view the situation as rather straightforward. The offense of
conviction was the illegal distribution of prescription drugs without a license. There was
no charge or allegation of conspiracy with "the guy" from McKinnon who took the
drugs, so it is Lessane’s offense, and his conduct of illegally selling the drugs, that are
the basis for the loss calculation under section 2F1.1. See United States v. Dickler, 64
F.3d 818 (3d Cir. 1995). We will concern ourselves, accordingly, with the amount of
loss experienced by Lessane’s victims, who were the victims of his illegal sale offense.
While it is tempting to look at the loss to one or more drug distributors, that loss was not
occasioned by anything that Lessane did, but, rather, by the theft committed by "the guy"
from whom Lessane purchased them. Again, Lessane’s conduct and offense were his
own distribution, not the apparent theft of the drugs from the manufacturer.
     We have said that the calculation of loss depends upon an assessment of whether
value has passed:
                    In applying this flexible, fact-driven concept of loss, we have
          thus held that in situations where value passes in only one
          direction   from the victim to the perpetrator   the
          perpetrator’s gain will normally reflect the victim’s loss. On
          the other hand, where value passes in both directions, we
          have held that the victim’s loss will normally be the
          difference between the value he or she gave up and the value
          he or she received (or, if greater, the difference between what
          the perpetrator intended the victim to give up and to receive).

Dickler, 64 F.3d at 825.
     Had the government argued or shown that the drugs received by the various
purchasers from Lessane were somehow adulterated or not worth the money paid for
them, the loss calculation might produce a different result (if, for instance, it was not
feasible to estimate the difference in value, and, therefore, the victim’s loss). In that
instance, where the loss cannot be estimated, gain can be used where it "reasonably
serve[s] as a surrogate" for the loss. Id. at 826. However, here, there was no allegation
that the drugs sold were worth less than was paid for them. Accordingly, the loss was, as
the Presentence Report indicated, $1,200, and the offense level should have been 8,
rather than 12.
     Lessane also challenges the District Court’s determination that it would not depart
downward to give credit for time served in the York County Prison. At the end of the
sentencing hearing, Lessane’s counsel indicated that there was another issue just brought
to his attention, namely, "the credit for the four months he served at York County
Prison." The District Court Judge replied, "He will receive credit for that," leading both
counsel to believe that the sentence imposed would be reduced by that amount.
However, when that reduction was not reflected in the Judgment and Commitment
Order, Lessane’s counsel requested clarification; the Judge replied in a letter that it was
her intention to make that recommendation to the Bureau of Prisons, but it was not her
intention to depart downward by four months. Since the Bureau of Prisons had, under its
regulations, denied the credit, the District Court refused to adjust the sentence further.
     The District Court Judge did clarify her meaning, and in so doing, explained what
she had meant by her indication at sentencing that she would give credit for time served.
While both parties thought that the sentence would be reduced, we do note that the
concept of "credit" is not the same as "departure," so there was no actual indication from
the Judge that she would grant a departure. Further, "credit for time served" is typically
awarded by the Bureau of Prisons, not by a judicial officer. At no time did counsel
request a departure, nor did the District Court ever indicate that it would depart if the
"credit" was not, for some reason, given. We will not disturb the District Court’s ruling,
based on the Judge’s explanation that she intended to recommend a credit to be given to
the extent allowed by the Bureau of Prisons. We accept the sentencing court’s view of
what was intended and, on remand, no departure is warranted.
     The existing record should be the basis for re-sentencing on remand. "[W]here
the government has the burden of production and persuasion as it does on issues like
enhancement of the offense level under 2F1.1 based on the victim’s loss, its case
should ordinarily have to stand or fall on the record it makes the first time around."
Dickler, 64 F.3d at 832. Although we might allow the government the opportunity to
present additional evidence if fairness so required, see id., that is not the case here.
     Accordingly, we will VACATE the Judgment and Commitment Order and
REMAND to the District Court with instructions that Lessane be re-sentenced on the
existing record using an offense level of 8, rather than the offense level of 12 that was
the basis for the sentence under the Judgment and Commitment Order.


___________________________
TO THE CLERK OF COURT:
     Please file the foregoing Not Precedential Opinion.
        /s/ Marjorie O.
Circuit Judge
