Sentence Reduction and Rule 35(b) Motions and the 3553(a) Factors

USA v. KATSMAN

16-2583-cr

United States Court of Appeals for the Second Circuit

Decided on October 10, 2018

 

ISSUE

ONE Whether the district court is allowed to deny the government’s motion pursuant to Rule 35(b) of the Federal Rules of Criminal Procedure for a reduction of sentence where the courts determined that the defendant provided substantial assistance in an ongoing matter and reaped the benefits of his cooperation in said matter dealing with SDNY. TWO Whether the factors in 18 U.S.C. §3553(a) should be a used in determining the reduction of a sentence pursuant to a motion under Rule 35(b) where the defendant was offered a plea deal in exchange for substantial assistance in an ongoing matter that the defendant had previously participated in.

 

HOLDING

ONE The Court held that the district court is allowed to deny the government’s motion pursuant to Rule 35(b) because such motions are to be decided in two steps: first it determines whether the defendant in fact provided substantial assistance; where the defendant pleaded guilty in SDNY with charges solely based on information voluntarily provided during proffer sessions. Second, if so, it must then determine what, if any, reduction in sentence is warranted; where no reduction in sentencing. TWO The Court held that the factors under 18 U.S.C. §3553(a) may be used in determining the reduction of a sentence because it directly effects step two in deciding whether to reduce the defendant’s sentence in light of his cooperation.

 

FACTS OF THE CASE

On November 17, 2010, Igor Katsman pled guilty in the EDNY to charges relating to a fraudulent check-cashing scheme and was sentenced to 84 months’ imprisonment. He moved to withdraw his guilty plea or for resentencing before a different judge. Consequently, his motion to withdraw was denied and his resentencing resulted in a total of 120 months’ imprisonment.

 

In 2013, the FBI and USAO-SDNY approached Katsman about cooperating in a separate case pending in the SDNY regarding a no-fault insurance fraud scheme and various investment frauds. Subsequently, the government entered into a joint EDNY-SDNY cooperation agreement with Katsman, and the government agreed to make a Rule 35 motion to reduce his sentencing in EDNY because he provided substantial assistance in the ongoing matter. In February 2015, Katsman was required to plead guilty to uncharged criminal conduct in SDNY as part of the plea deal.

 

The following year, the USAO-EDNY filed a motion pursuant to Rule 35(b) in the EDNY for resentencing based on his substantial assistance in the prosecutions in the SDNY. While the 125 years’ imprisonment in the SDNY sentencing was reduced to a sentence of time served, the district court denied the government’s motion to reduce sentencing in the EDNY. Following Katsman’s initial appeal and remand from the federal court, the district court issued its decision and a summary of its reasoning, which is sealed.

 

COURT’S ANALYSIS

In this case, the courts find that in deciding a Rule 35(b) motion, the district court must first determine whether the defendant in fact provided substantial assistance and second, if it does, the court must determine what, if any, reduction in sentence is warranted. The federal court did not accept Katsman’s argument that the district court “conflated these discrete steps into one.” They determined that the district court fulfilled the requirements of the first step by inferring that “Katsman clearly provided substantial assistance” when he pleaded guilty to a “uncharged criminal conduct” in the SDNY. They then determined that the district fulfilled the requirements of the second step by explaining that a “120-month sentencing, the middle of the guidelines range, remains sufficient but not greater than necessary to comply with the purposes of Section 3553(a)” D.Ct. Dkt. No. 103 because, among other things, Katsman had already received the benefit of his cooperation in the SDNY when the 125 years’ imprisonment in the SDNY sentencing was reduced to a sentence of time served.

 

While the federal court has yet to address the role of factors in 18 U.S.C. §3553(a), if any, in sentencing reduction pursuant to a Rule 35(b) motion, the text also does not preclude the district court from considering factors in addition to the defendant’s “substantial assistance” and to what extent. In fact, Rule 35’s use of the word “may” implies discretion and “discretion can best be exercised by considering the various sentencing factors”. The only limitation, however, is found under Rule 35(b) which requires that the defendant provides “substantial assistance if he is to receive any benefit for his cooperation.” Additionally, Section 3553(a) requires that courts “impose a sentence sufficient, but not greater than necessary,” and that they consider the “statutory factors in determining the particular sentence to be imposed.”

 

If the courts were required to resentence a defendant considering only substantial assistance, there would be “too little discretion for the court to exercise” in deciding whether a reduced sentence is “warranted or prudent under the circumstance.” United States v. Manella, 86 F.3d 201, 2014-05 (11th Cir. 1996). A defendant’s circumstances could change after the sentencing in a way that has an effect on the appropriateness of his sentencing. Take, for instance, a defendant with a terminal illness which may result in a greater reduction. As opposed to a defendant like Katsman who continued to engage in criminal behavior and lied to the courts about it which may result in a smaller reduction. Thus, the Circuit Court found that on a Rule 35(b) motion, the trial court may apply the 3553(a) factors at sentencing.