Free Memorandum - District Court of Arizona - Arizona

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PAUL K. CHARLTON United States Attorney District of Arizona Richard I. Mesh Assistant U.S. Attorney Two Renaissance Square 40 N. Central Avenue, Suite 1200 Phoenix, Arizona 85004-4408 Arizona State Bar No. 02716 Telephone (602) 514-7500 [email protected]

UNITED STATES DISTRICT COURT 7 DISTRICT OF ARIZONA 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 The United States of America, through its undersigned attorneys, hereby submits this first supplemental sentencing memorandum in response to issues raised at the sentencing hearing on January 6, 2006 in this matter. The three separate issues are discussed in the attached United States of America, Plaintiff, v. 1. Gene Lee Miller and 2. Grace Marie Miller, Defendants. GOVERNMENT'S FIRST SUPPLEMENTAL SENTENCING MEMORANDUM CR-04-0811-PHX-EHC

memorandum of points and authorities. Respectfully submitted this 27 th day of January, 2006. PAUL K. CHARLTON United States Attorney District of Arizona S/Richard I. Mesh Richard I. Mesh Assistant U.S. Attorney

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MEMORANDUM OF POINTS AND AUTHORITIES

The Determination of "Victims" for Inclusion in the Indictment The United States Postal Inspection Service report prepared by Postal Inspector Ray Kolisar,

concerning the Millers' mail fraud, provided information concerning 13 "potential victims" (a husband and wife being treated as a single "victim" entity). All of these potential victims had lost substantial sums of money incident to their commercial transactions involving gold coins which had been delivered to the defendants. An examination of the transcripts of tape-recorded interviews conducted with each "complainant" revealed that there were three distinct scenarios which led to the sending of their coins to the Millers. All of these people had previously purchased coins from the Millers with a buy back guarantee. One group of people returned their coins for a resale in reliance upon the Millers' buy back guarantee that the coins would be repurchased within one year from the date of sale for the original purchase price. A second group consisted of people who could not recall with certainty what representations, other than interest payments, the Millers made as to their intended use of the coins that induced the owners to part with their coins. The third group recalled with specificity the nature of the misrepresentations made by the Millers' as to their intended use of the coins. These complainants became listed as "victims" in the indictment. A. The Gregory and Grace Houle Matter Gregory Houle of Lake Canada, Minnesota, was one of those individuals in the first group. Mr. Houle died in February 2002 before the government was able to obtain an interview with him. Nevertheless, in his letter of complaint to the Arizona Attorney General, Mr. Houle wrote as to the loss of his and his mother's 240 gold coins (excerpted for exposition): "In January 2000, I contacted Southwest International Trading and spoke with Grace Miller about selling our coins. Ms. Miller told me she had a buyer for our coins at $500, my mother and I agreed to sell the coins at that price.[sic] I telephoned Southwest International Trading at the end of January 2000, 2

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inquiring about our money owed. Ms. Miller told me that she did not have a buyer and that she (Ms. Miller) was having a difficult time selling our coins. I continued to contact Southwest International over the next eight months requesting the money owed, or the return of our coins. Ms. Grace Miller of Southwest International contacted us by phone and offered to purchase our coins herself, and send my mother (Grace Houle) and myself (Greg Houle) purchase agreements signed by Ms. Miller's husband, Gene." (Attachment 1) This transaction appeared to be a breach of contract for failure to pay money owed to the Houles. (See, Attachment 2, Purchase Agreements.) Since the Houles sent their coins to the Millers for sale subject to a future payment, an allegation of mail fraud on their behalf was not included in the indictment because of insufficient evidence of a misrepresentation upon which to include the Houles as part of the scheme. B. The Donald Paulsen Matter Donald Paulsen of Omaha, Nebraska was interviewed on June 12, 2002, as a result of filing a mail fraud report with the U.S. Postal Inspection Service. That report indicated that Don Paulsen had sent Gene and Grace Miller 141 gold coins on January 24, 2000 in return for a promissory note calling for the payment of six months of interest in the total amount $14,382 along with a monthly return of 24 coins per month. Mr. Paulsen said that he had spoken with Grace Miller, who told him to send the coins back to her, and he took he took her word, that she would pay the interest and sent the coins back per the agreement. He also said it did not take any convincing on her part for him to accept the offer. In his interview, Mr. Paulsen, who was then 71 years of age, was asked how many of the $2,397 monthly payments he received, to which he replied, "I'm not sure how many, wasn't all of them though. I got some but don't know if its, I got'em marked down here somewhere." (Transcript Pgs. 12 &13)(Attachment 3.) The following further exchange took place between Mr. Paulsen (DP) and Inspector Kolisar (RK): (excepted for clarity) 3

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RK: Did he (Gene Miller) ever tell you what he did with you coins? DP: Never did. RK: Did you ask him? DP: No I didn't, I guess I should have. RK: Did you ever give them (the Millers) permission to sell your coins? DP: No. (Transcript page 14)(Attachment 4) RK: You never gave anybody at Southwest to sell your coins, right? DP: Nope. RK: Did they ever tell you they were using your coins as collateral? DP: I don't really recall, not that I recall. (Transcript page 17)(Attachment 4) A further discussion was had between Inspector Kolisar and Mr. Paulsen concerning other investment opportunities and his attempts to collect the debt, at which time he responded, "Like I say, you know, a lot of this is hard to remember, it's not written down exactly, uh, I thought they were decent people." (Transcript page 22)(Attachment 4) Unfortunately, the interview did not develop, or Mr. Paulsen was unable to provide, the specifics of any representations that led to his having sent his coins to the Millers. Mr. Paulsen died subsequent to his interview according to his widow. (Victim Impact Statement, Rosemaria Paulsen, July 2, 2005.) The death of Mr. Paulsen precluded further exploration of the nature of any misrepresentations that might have been made to him that would have supported the filing of a mail fraud allegation on his behalf in the indictment. C. The Carolynne Hairston Matter Carolynne Hairston of San Antonio, Texas, was interviewed on July 2, 2002, by Inspector Kolisar. The following exchange took place between Inspector Kolisar (RK) and Ms. Hairston (CH) as to her 89 gold coins and 624 silver coins. (excerpted for clarity) RK: You ended up sending your coins back to them (the Millers) correct? CH: I did...it was after the first of the year that it didn't happen (the Y2K scenario) and 4

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so she (Grace Miller) called personally and she told me to send them back. RK: What did she tell you, if you can be more specific? CH: Well she just told me it didn't happen the way she thought it would and she said that if I would send my coins back to her that she would make sure that I got full value back for them, but it would take her several months to do that. RK: So she was gonna try and sell them for you? CH: That's what she said. RK: Was there any kind of written contract or agreement that you had with her? CH: No, I didn't. RK: So you just sent the coins back on February 14, 2000 by registered mail? CH: Right. RK: I guess you trusted her basically, because there was no written contract or agreement? CH: Right. (Transcript page 7)(Attachment 5) This exchange with Ms. Hairston describes a commercial credit transaction which was an insufficient basis upon which to file a mail fraud allegation on behalf of Ms. Hairston. D. The Brian Mooney Matter Brian Mooney (BM) of Grand Ledge, Michigan was interviewed on February 13, 2003, by Inspector Kolisar which led to the following exchange concerning his 113 gold coins, (edited for clarity of exposition): RK: Tell me, what were they going to do with your coins if you sent them back to them and you entered into the promissory note. You mentioned selling, is that what they told you or were they going to do something else with your coins. BM: They were actually going to sell the coins. RK: Because that's not what the promissory note says. BM: No, it doesn't say anything like that, but that's the only way they could do that is to 5

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pay me interest on it. RK: Well you're assuming then. BM: That's assuming that's what they were going to do. So, I don't know what they did. Maybe they still had them. I don't know. RK: Yeah. Let's not assume. Try to remember what they actually told you. BM: They didn't tell me anything. RK: So, what they were actually going to do with the coins they didn't tell you what, how they were going to raise this money to pay interest. BM: No, they really didn't. I asked them that question quite a few times and they really (were) never specific, how they were going to pay me the interest. (Transcript page 7)(Attachment 6) A decision to allege a mail fraud allegation is based on a prosecution conclusion that the evidence is sufficient to survive a motion for a judgment of acquittal at the conclusion of the government's case. (See, Fed. R. Crim. P. 29.) Additionally, the decision is also based upon a reasonable expectation of a verdict of guilt beyond a reasonable doubt, which is the filing standard for the initiation of any prosecution. Therefore, the government elected on both evidentiary as well as ethical grounds, not to proceed with a mail fraud case based on the information in the postal service report and prosecution interviews with Mr. Mooney. E. The Rudy Mendez Matter Rudy Mendez of San Antonio, Texas was interviewed by Inspector Kolisar on July 23, 2002, in regard to his loss arising from 55 gold coins he sent to the Millers. The following dialog took place between Inspector Kolisar and Mr. Mendez (RM) as to the issue of representations upon which he sent his coins to the Millers: RK: Who called you? RM: Ms. Grace (Miller). RK: Do you have a date when she called you? RM: I don't have the exact date but, the promissory note was signed on 3/9/00. 6

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RK: So she would have called you sometime, maybe the week before March 9 th ? RM: Yes, about a week or two before. RK: Okay, and what did she tell you? RM: She told me that they were only doing this to certain favorite customers and that you know, if I would send the gold coins back that they would send me, they would send me $787.38 for a period of six months and you know, paid to the order of Rudy Mendez, lender, the sum of $4,724 interest payment shall be in the amount of $787.38 for a period of six months, plus nine coins per month for five months and ten coins on the sixth month. RK: Which would total your 55 MS64 St. Gauden's coins, gold coins. RM: Right. But I only got five payments and never received my coins. RK: Did anybody tell you what they were going to be doing with the coins? RM: No they didn't. (Transcript 6 page 7)(Attachment 7) Later in the interview, this further exchange took place. RK: Did you ever ask them directly what they did with your coins? RM: No, I didn't, but I could remember something, hearing, they were just like trading `em, you know. I say like flipping `em, like flipping like trying to make money off of them. RK: Are you just guessing what they said, do you think they might have done or, RM: I don't know. RK: Did they actually tell you that? RM: Not too sure if I'm guessing or if I was, or if I heard it. RK: Did you know prior to you entering into this promissory note, what they were going to do with your coins? RM: No. RK: No discussion of going into another business themselves like the mortgage servicing business or they needed the coins for collateral for a loan or anything like that? RM: No, she just told me if I wanted to make interest off my coins, which would be 7

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$787.38 a month, you know, I mean I went for it, and you know, it was gonna be for six months. I was supposed to get' em back and I never did. (Transcript page 9)(Attachment 7) Further prosecution interviews with Mr. Mendez failed to establish any recollections as to any misrepresentations that induced him to send the coins to the Millers other than the expectation of the coins being returned and the payment of interest. In a similar fashion to the other, above referenced transactions, the available evidence to support an allegation of mail fraud on behalf of Mr. Mendez was deemed to be insufficient to lead to a reasonable expectation that the evidence was sufficient beyond a reasonable doubt for a conviction. Further, it was the prosecution's view that the evidence was not sufficiently strong to have passed the test to survive a Rule 29 motion for a judgment of acquittal as to this potential count. II. Legal Argument A. Ethical Considerations Pursuant to Arizona Supreme Court Rule 42, Rules of Professional Conduct Ethical Rule 3.8 - Special Responsibilities of a Prosecutor, The prosecutor in a criminal case shall: (a) refrain from prosecuting a charge that the prosecutor knows is not supported by probable cause; The comments to that section provides the following guidance; A prosecutor has the responsibility of a minister of justice and not simply that of an advocate. This responsibility carries with it specific obligations to see that the defendant is accorded procedural justice and that guilt is decided upon the basis of sufficient evidence. Precisely how far the prosecutor is required to go in this direction is a matter of debate and varies in different jurisdictions. The Arizona Supreme Court which administers the disciplinary rules concerning attorneys licensed to practice in the State of Arizona provided the following ethical guidelines in State of 8

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Arizona v. Noriega, 142 Ariz. 474, 486, 690 P. 2d 775, 787 (1984): We also emphasize that a prosecutor is held to a higher standard of conduct than an ordinary attorney. As this court stated in Pool v. Superior Court, 139 Ariz. 98, 677 P. 2d 261 (1984) "The prosecutor's not the representative of an ordinary litigant; he is the representative of a government whose obligation to govern fairly is as important as its obligation to govern at all. The prosecutor's interest in a criminal prosecution "is not that it shall win a case but that justice shall be done." Thus "while he may strike hard blows, he is not at liberty to strike foul ones." It is the prosecutor's duty to refrain from improper methods calculated to produce a wrongful conviction just as it is his duty to use all proper methods calculated to bring about a just conviction. A prosecutor is not expected to obtain an indictment until he or she believes that the accused's guilt can be proven beyond a reasonable doubt, and should not seek an indictment without probable cause. Shepherd v. Farhringer, 158 Ariz. 266, 762 P. 2d 553 (1988). B. 9 th Circuit Requirement That Victim Be Deceived In United States v. Lew, 875 F. 2d 219 (9 th Cir. 1989), the court reversed the conviction in that matter relying on McNally v. United States, 483 U.S. 350, 107 S.Ct. 2875 (1987) noting: (T)he court made it clear that the intent (in a mail fraud case) must be to obtain money or property from the one who is deceived: "the words `to defraud' commonly refer `to wronging one in his property rights by dishonest methods or schemes,' and `usually signify the deprivation of something of value, by trick, deceit, chicane or overreaching.'" 483 U.S. at 358, 107 S.Ct. at 2880. The 9 th Circuit has not published any opinion retreating from this position, although it has cited to the Lew decision in other unpublished opinions. Other Circuit Courts of Appeal have reached a contrary decision concerning whether a defendant should be convicted of mail fraud for deceiving only persons other than the intended victims of the scheme. See, United States v. Frost, 125 Fed.3d 346, 360 (6 th Cir. 1997) (Collecting cases from the 8 th , 7 th , 1 st and 9 th Circuits). C. Exclusion of Non-Filed Matters From Relevant Conduct 9

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United States Sentencing Guideline §2F1.1, Fraud Offenses, and §1B1.3, Relevant Conduct, provide for the inclusion of losses in the specific offense characteristics as a part of the offense level calculation. The commentary states: 2) In the case of a jointly undertaken criminal activity (criminal plans, scheme, endeavor or enterprise undertaken by the defendant in concert with others, whether or not charged as a conspiracy), a defendant is accountable for (acts and omissions) of others that was both: i) in furtherance of the jointly undertaken criminal activity; and ii) reasonably foreseeable in connection with that criminal activity. The defendant's sentence cannot be based on the defendant's non-criminal activities, U.S. v. Dove, 247 Fed. 3d 152 (4 th Circuit 2001), U.S. v. Schafer, 291 Fed. 3d 932 (7 th Circuit 2002). In U.S. v. Watts, 519 U.S. 1144, 117 S.Ct. 1024 (1997) the Supreme Court held that a sentencing court may consider conduct of which the defendant has been acquitted, so long as that conduct has been proved by a preponderance of the evidence. D. Factual Argument The Houle and Hairston matters failed to establish a sufficient basis upon which to predicate a criminal prosecution. Clearly, these complainants had the right to initiate civil actions for their losses, although the potential for recovery was slight. The Donald Paulsen matter, given his demise and the inability to further develop a misrepresentation upon which to allege a criminal act, precluded the necessary finding that the evidence met the preponderance standard for the inclusion of his losses as relevant conduct. The Mooney and Mendez matters failed the evidence test for inclusion as an indictment count. The same reasoning also applies in the analysis as to the absence of the preponderance standard as to the commission of a crime. In the absence of a preponderance of the evidence of a crime having been committed against Mooney and Mendez, unfortunately their losses cannot be included as relevant conduct. E. The Time Line Analysis An analysis of the dates that the coins were mailed to the Millers, revealed that the Houle 10

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coins were received by the Millers' on January 19, 2000. Don Paulsen's coins were received on January 26, 2000. Carolynne Hairston's were received on February 14, 2000. The Houle and Hairston matters did not involve promissory notes and appeared to be part of the buyback program. The Don Paulsen matter did have a promissory note, but failed to provide evidence of the misrepresentation sufficient upon which to make a criminal charge. The Mooney coins were received by the Millers on February 15, 2000, and the Mendez coins were received on March 13, 2000. Both Mooney and Mendez received promissory notes, but their recorded statements failed to reveal a misrepresentation to support the filing of a criminal charge. A chart has been prepared listing as to each of the complainants, the dates of receipt of their coins by the Millers, (Attachment 8) and the subsequent sale of the coins as substantiated by the sales invoices.(Attachment 9) The chart shows the actual sales prices received by the Millers and an alternative computation based upon the estimated value of the coins at the time of their receipt by the Millers. All of the above individuals who sent their coins to the Millers are contrasted with the indictment victims, each of whom relied on a provable misrepresentation that brought about the sending of their coins to the Millers. The first of those victims was Karl Kramer who had his coins picked up in person by Gene Miller on March 22, 2000. All of the remaining victims, similar to Kramer, also relied on a combination of a promissory note and a misrepresentation as to the intended use of the coins by the Millers. They can be shown to have mailed their coins to the Millers between April and August of 2000.(Attachment 10) The above analysis as to a point in time reflects that the Millers, who were in financial distress, initially engaged in a straightforward acknowledgment of the receipt of the coins for sale from Houle and Hairston. Thus, there was no crime in these transactions. The Millers seem to have then began to avoid statements as to their intended use of the solicited coins as to Paulsen, Mooney and Mendez. However, the proof of misrepresentation is missing as to these three complainants. Conjecture may lead to a belief that they too were victims, but the government's burden of proof requires it to establish a crime. The available evidence as to these 11

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three complainants failed to satisfy that burden. The situation is different as to the recorded evidence for the victims listed in the indictment. In those cases, the evidence of criminal conduct more than met the preponderance standard, in fact, it provided sufficient proof beyond a reasonable doubt of misrepresentations to support a mail fraud count for each of these victims. F. The Restitution Issue Title 18 U.S.C., Section 3663(a)(2), Mandatory Restitution to Victims of Certain Crimes provides that, "For the purpose of (restitution), the term victim means a person directly and proximately harmed as a result of the commission of an offense...that involves as an element a scheme, conspiracy or a pattern of criminal activity...." The above-quoted language requires the court to make a factual finding to insure "meaningful appellate review" of restitution orders, United States v. Cannizziaro, 871 Fed.2d 809 (9 th Cir. 1989). See United States v. Mills, 991 Fed.2d 609 (9 th Cir. 1993) ( upholding a restitution order without specific factual findings where the court commented on defendant's arguments prior to sentencing). A fair reading of the above statute requires that for a person to obtain restitution, it must be shown that he was a victim of scheme or pattern of criminal activity. The previous analysis showed that there must be a preponderance of evidence to support the finding that a person is a victim of the scheme in order for that person's losses to be included in relevant conduct. In the course of plea negotiations, the defense raised the argument that at the conclusion of a trial, even if the defendants were to be found guilty, the government would not be able to obtain restitution for the other persons who had sent their coins to the Millers, unless there was a preponderance of the evidence to support that they had been victims of a misrepresentation to obtain their coins. In the absence of law to the contrary, the government stipulated, to facilitate a guilty plea, that the persons named in the indictment would be the recipients of court ordered restitution. A second reason for the stipulation as to restitution for the named victims, was a defense claim that it was an improper use of the criminal justice system to extract restitution from the 12

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Millers on behalf of claimants with only civil claims. The objection was based upon the Millers being subject to a criminal penalty in the event of a finding that they had violated the court's restitution order, when the underlying obligation was only recognizable via a civil judgment. The government agreed with this analysis and therefore, it too became a second reason for the restitution stipulation in order to facilitate a guilty plea.

III. The Computation of Loss The investigation conducted by the United States Postal Inspection Service was able to establish, primarily through returned receipts, the dates the Millers received the coins from each of the victims listed in the indictment. The investigation also was able to determine the dates that the Millers sold coins, corresponding by grading, to two other coin dealers. No evidence was developed to establish that the Millers' sales were anything other than arm's length transactions at the then prevailing commodity price for each of the various coins. In most cases, the sales of the coins occurred within a day or two of the receipt of the coins by the Millers. However, some of the sales occurred up to six weeks after the receipt of the coins. In one instance, the evidence suggests that two of the Maletek coins were sold eleven weeks after they were received by the Millers. A number of coins received by the Millers from the victims could not be accounted for from the records of the sales to either Heritage Rare Coins Gallery, Dallas, Texas (Attachment 11) or The Coin Gallery, Phoenix, Arizona(Attachment12). The value of the missing coins was set at the per coin price of similar coins sold by the Millers. The value of the missing coins was determined to be $60,175, based upon values arising from actual sales near in time. The Millers received $435,967 as a result of the sales of the coins of similar grading sent to them by the victims listed in the indictment. A chart has been developed representing the analysis of coins received by the Millers and the dates of sale at the various prices.(Attachment 10) The total value of the missing coins and money received from the fraudulently obtained coins was a total of $496,142. This amount was adopted by the prosecution as the fair market value of the coins 13

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converted by the Millers as of the dates of their sales. As a result of discussions with the court at the first sentencing hearing, a recalculation was done of the amount of loss based upon the value of the coins as of the date of their receipt by the Millers, rather than their sale prices. The loss to the victims occurred when the Millers received the coins via misrepresentation pursuant to a scheme to sell them for their own purposes. Since the gold market was in a state of decline and some of the sales occurred either days or weeks later, the fair market value of the converted coins was greater under this calculation. That

calculation revealed an additional $15,223 of coin value that had not previously been taken into account by the probation department or the prosecution. The additional money, when added to the previous known loss amount, presents a new total loss of $511,365. As a result of this recalculation, the specific offense characteristic for loss pursuant to U.S.S.G. 2F1.1(b)(1)(K) is more than $500,000 or an additional 10 levels rather than the previous calculated nine levels. Thus, under this calculation, the government's new total offense level is 15 for sentencing purposes, rather than the previously stipulated 14 levels.

IV. The Plea Agreement Stipulation of a Level 14 for Sentencing As part of the plea negotiations with the defendant, the government, based on the foregoing analysis and its previously filed objections to the presentence report, specifically as to the inclusion of an enhancement for abuse of a position of trust, concluded that a level 14 was the fair and proper calculation for this offense and these defendants. The government stands by that original assessment, with the exception that obviously there has been a miscalculation of the extent of the loss which should have been calculated based upon the value of the coins at the time of their receipt as opposed to the value of the coins at the time of their sale. This would bring about a level 15 for sentencing under the government's calculation. In Santobello v. New York, 440 U.S. 257, 92 S.Ct. 495 (1971), the Supreme Court held when a guilty plea rests on any significant promise or agreement of the prosecutor, so it can be said to be part of the inducement or consideration to plead guilty, such a promise must be 14

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fulfilled by the prosecution. In Santobello, the government inadvertently breeched its agreement to recommend a specific sentence and therefore, the sentence was set aside. However, in the same case, the Supreme Court noted that there is no absolute right to have a guilty plea accepted and a court may reject a plea in exercise of its sound judicial discretion. Id. at 262. In accord is Fed. R. Crim. P.11(c)(5), which codifies the principle that the court is not bound by a stipulation between the parties as to sentence and may reject such a plea agreement containing such a stipulation. The stipulation to a level 14 for sentencing was based upon a good faith assessment as to the likely sentencing range that could be supported under the law. The stipulation was for the purpose of inducing a plea so as to avoid a trial with the attendant inconvenience to the 25 government witnesses, most of whom would have found the need to travel a burden. Additionally, the plea agreement required a waiver of the defendants' right to appeal, which was considered a substantial economic savings to the government, besides the saving of trial costs for travel, lodgings and per diems, estimated at in excess of $10,000. The stipulation was arrived at in the belief that it provided the court with adequate flexibility as to the sentencing range. At a level 14 offense, these defendants face 15 to 21 months of imprisonment. A level 15 under the sentencing guidelines allows for a range of 18 to 24 months. A level 16 offense, as recommended by the presentence report, calls for a sentencing range of 21 to 27 months. Coincidently, the upper range of a level14 of 21 months, is the same for the lower range of a level 16 for sentencing. Thus, it can be seen that a sentence of a certain number of months may fall within the range of several different sentencing levels.

Given the facts of this case, the government has recommended that the defendants be sentenced to 18 months in prison. The stipulation within the plea agreement to a level 14, allows the court to sentence the defendants to as much as 21 months in prison. The government fully recognizes that it is the court's duty to follow the law and exercise its discretion in regard to matters of sentence. The stipulation between the parties does not bind the court. The stipulation 15

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between the parties merely reflects that each side is willing to be bound by this agreement as to sentence. The court is always free to disagree with the parties' assessment of the matter and reject the plea agreement.

V. Conclusions The foregoing memorandum reflects that the government properly selected those victims where there was a reasonable likelihood of a conviction beyond a reasonable doubt. Legal grounds and ethical considerations precluded the inclusion of the other five complainants who suffered financial losses as a result of their dealings with the Millers. Nevertheless, in the absence of sufficient evidence to support the filing of criminal charges on their behalf, the government is without recourse to assist them in recovering their losses. Further analysis of the loss figures as directed by the court, reveals that the value of the victims' coins at the time of their loss exceeded $500,000. or a total offense level of 15 for sentencing purposes. That error was unknown until the development of this memorandum. However, even allowing for the error, the court is still provided with the flexibility to sentence the defendants up to 21 months, which is within the range provided by a level 15 offense. The stipulation to a 14 level, as agreed to by the parties, does not bind the court. The stipulation was arrived at in a good faith attempt to obtain a resolution of this matter without a trial and without the burdens the trial would inflict on several of the victims and witnesses. Based on all the foregoing, the government respectfully requests the court to sentence the defendant within the sentencing range provided by a level 14 under the plea agreement, as it provides substantial justice to the victims, as well as the defendants.

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Respectfully submitted this 27 th day of January, 2006. PAUL K. CHARLTON United States Attorney District of Arizona S/Richard I. Mesh Richard I. Mesh Assistant U.S. Attorney

CERTIFICATE OF SERVICE I hereby certify that on the 27 th of January, 2006, I electronically transmitted the attached document to the Clerk's Office using the CM/ECF system for filing and transmittal of a Notice of Electronic Filing to the following CM/ECF registrants: Joe Keilp 1440 E. W ashington Suite 100 Phoenix, AZ 85034 Attorney for Grace Miller S/Richard I. Mesh I hereby certify that on the 27 th of January, 2006, I served the attached document by fax on the following, who are not registered participants of the CM/ECF system: Darrin Harris U.S. Probation Officer 401 W . W ashington St., Ste. 160 Phoenix, AZ 85003 S/Richard I. Mesh Greg Clark 45 W . Jefferson St., 12 th Floor Phoenix, AZ 85003-2330 Attorney for Gene Miller

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Case 2:04-cr-00811-EHC

Document 64

Filed 01/27/2006

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