Free Objection to Presentence Investigation Report - District Court of Arizona - Arizona

1 TIMOTHY C. HOLTZEN 2 245 W. Roosevelt St. 3 State Bar No. 004723 4 (602) 368-9140 fax 5 6 7 8 United States of America, 9 10 12 13 14
v. Plaintiff, Attorney for Defendant UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA ) ) ) ) ) ) ) ) ) ) No. CR 03-0974-PHX-DGC OBJECTIONS TO THE PRESENTENCE REPORT WITH REQUEST FOR EVIDENTIARY HEARING (602) 799-6336 Phoenix, Arizona 85003 Attorney at Law

11 Neil Rusty Bond,
Defendant.

The defendant hereby objects to the presentence report calculations and factual

15 recitations as set forth more fully in the attached memorandum. The defendant requests 16 an evidentiary hearing with the opportunity to present evidence related to issues in the 17 presentence report. 18 19 20 21 22 23 24 25 26 27 28
Copy of the foregoing served by ECF filing this 7th day of January 2006 to: Michelle Hamilton-Burns Assistant U.S. Attorney and Faxed/Delivered to: Jon Evanko US Probation Office Neil Rusty Bond Defendant

RESPECTFULLY SUBMITTED this 7 th day of January 2006.

/s Timothy C. Holtzen Timothy C. Holtzen Attorney for Defendant

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MEMORANDUM The defense objects to the presentence report on numerous grounds.

3 Enhancements were inappropriately applied and factual statements were erroneous or 4 inaccurate. The guideline calculation for economic loss and restitution are incorrect 5 and inappropriate, and the guideline for obstruction of justice does not apply. 6 Additionally, there are many paragraphs the defense contends are factually inaccurate 7 or misrepresented. 8 A. LEGAL ARGUMENT- GUIDELINE CALCULATIONS HAVE ERRORS 9 10
1. Enhancement for Economic Loss is Incorrect Paragraph 22 of the presentence report mistakenly relied on an allegation in the

11 superseding indictment of a loss in excess of $100,000, combined with a jury verdict of 12 guilt. PSR ¶16. The proposed increase is eight levels, pursuant to U.S.S.G. § 2B1.1 13 (b)(1)(E); however, such an enhancement based on an alleged loss that has not been 14 proved is incorrect. 15 17 18 19 20
The applicable guideline commentary, U.S.S.G. § 2B1.1, comment. (n.3(F)(ii))

16 provides guidance:
Government Benefits.--In a case involving government benefits (e.g., grants, loans, entitlement program payments), loss shall be considered to be not less than the value of the benefits obtained by unintended recipients or diverted to unintended uses, as the case may be. For example, if the defendant was the intended recipient of food stamps having a value of $100 but fraudulently received food stamps having a value of $150, loss is $50.

21 Hence, loss is measured by benefits paid beyond the value of those to which a person is 22 entitled. 23 25 26 27 28 2
The jury did not make a finding of proof or return a verdict on the alleged loss.

24 The court did not read the indictment to the jury, rather the judge summarized the

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1 charges to the jury without details or reference to the alleged amount. RT 3/1/05 40.1 2 At the end of the trial the court instructed the jury that the crime of Theft of 3 Government Property required proof of stealing only "money or property of value of a 4 [sic] $1000.00 or more[.]" RT 3/11/05 55. For good reasons, an increase in the 5 guidelines sentence based on the alleged loss does not apply. 6
The government "bear[s] the burden of proof for any fact that the sentencing

7 court would find necessary to determine the base offense level." It also bears the 8 burden of proof when it seeks sentence enhancements. When a defendant raises an 9 objection to the PSR, the district court is obligated to resolve the factual dispute. "It 10 may not simply rely on the factual statements in the PSR." United States v. Ameline, 11 409 F.3d 1073, 1085 (9 th Cir. 2005)(citing United States v. Howard, 894 F.2d 1085, 12 1090 (9th Cir.1990)). 13
An eight-level enhancement requires proof by clear and convincing evidence.

14 See, United States v. Meza de Jesus, 217 F.3d 638 (9 th Cir. 2000) (9-levels increased 15 sentence range from 21-27 months to 57-71 months and court imposed 57 months); 16 United States v. Hopper, 177 F.3d 824 (9 th Cir. 1999) (seven-level enhancement 17 requires clear and convincing evidence, but four-level enhancement does not). 18
The government did not request or obtain any special verdict form concerning

19 proof of loss alleged. The jury verdict merely found guilt without reference to an 20 amount of loss. RT 3/11/05 123. The defendant certainly did not testify that he caused 21 any loss to the government. In fact, the defense contends that, if the government would 22 calculate correctly, the government could see that the defendant did not receive any 23 24 25 26 27 28
The abbreviation "RT" will refer to the Reporter's Transcript and will be followed by a date and relevant page number(s). The abbreviation "PSR" will refer to the Presentence Report. The symbol ¶ will be used to signify a numbered paragraph in the presentence report. Attachments will be referred to by the abbreviation "Att." and followed by the relevant page number(s) from the lower right corners.
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1 benefits to which he would not have been entitled. Hence, there was no loss to the 2 government. 3 4
Bond Disputes the Alleged Loss. The Social Security Administration ("SSA") unilaterally, without audit or

5 interview of Bond, decided they had overpaid Bond disability benefits and notified him 6 of his administrative right to appeal their decision. He wrote letters of appeal, but SSA7 OIG investigating Agent Turk halted his appeals in the administrative process to 8 pursue criminal prosecution. RT 3/11/05 23-24. Hence, Bond was given neither an 9 accounting by SSA of exactly what they relied on to arbitrarily declare months 10 ineligible, nor an opportunity to present his explanation or records to show his 11 continued eligibility. Their calculations remain a mystery. The SSA sent him a letter 12 dated January 14, 2002, that they concluded he had been overpaid $4,995.00, but that 13 he would continue to receive payments. (Attachments ["Att.] 2.) The government now 14 seeks $101,222.70. Bond has continued to request his appeal to dispute that he was 15 ever paid benefits to which he was not entitled. 16
Bond was entitled to benefits. Disabled persons can work and still receive

17 benefits. RT 3/1/05 131. Self-employed persons are measured by their "net" income or 18 hours worked. If a self-employed person worked over 40 hours in a month or made 19 $200 or more in net income [with no maximum], for that month he is considered to be 20 in one of nine months of a "trial work period." RT 3/1/05 131-32. After a ninth month, 21 the self-employed individual is eligible for an "extended period of eligibility" to 22 continue to receive his/her benefits so long as the person does not work 40 hours per 23 month or earn over $500 net income in a month. RT 3/1/05 133. Those upper limits 24 had various increases beginning in 1999. Bond was self-employed, but the evidence 25 presented at trial, and focused on by the government, was his gross receipts, not net 26 income. For example, the investigating agent did not even check receipts or records of 27 28 4

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1 business expenses in Bond's 1997 income tax filing copies, reviewed and prepared by 2 a professional tax service, which expenses reduced his gross business receipts to net 3 income, and the agent did not provide the expense records to the SSA for them to 4 determine whether there was overpayment of benefits. RT 3/8/05 99-103. He did not 5 know what hours Bond worked or find any records of hours worked. RT 3/8/05 78. In 6 fact, in trying to attribute income to Bond from a failed sales venture Bond started in 7 1993, Supernatural Products, the government did not even look at the receipts or 8 invoices for the thousands of dollars of costs Bond paid to produce the product sold, 9 which costs exceeded the gross receipts. RT 3/8/05 123-131; 3/9/05 94-98. Nor did 10 they look carefully at the stacks of boxes of unsold Supernatural Products in his back 11 yard storage shed, some of which still bore a 1993 shipping date, nine years later in 12 2002. RT 3/9/05 77-81, 83-90. Hence, Bond never had a net profit or net income from 13 Supernatural Products, but it appears that SSA attributed some amount to try to 14 disqualify benefits paid. 15
Turk did not seek the official tax returns of Bond to determine bonds net

16 income. RT 3/8/05 37. Turk said that in the beginning he wasn't looking for Bond's 17 net income since he was still learning about SSA. RT 3/8/05 40-41. The SSA expert 18 witness, Barbara Jackson, testified that the SSA looks for net income "Just the way the 19 IRS is looking at the net to receive their -- their payment, we're looking at the net." RT 20 3/2/05 135. The government has had opportunities to obtain the official tax returns of 21 Bond for the years 1996 through 2001 from IRS to evaluate his net income, both 22 before and during trial, but has not done so. See, e.g., RT 3/8/05 10-12. They used only 23 unverified copies of 1997-1999 tax year returns found in Bond's home during the 24 search warrant execution, even though they relied in part on a claim that he had 25 excessive income before 1997. 26 27 28 5
The government cannot summarily rely on a broad claim to say they produced

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1 evidence at trial, especially without an individualized showing that there were specific 2 months in which the defendant became ineligible by working excessive hours or 3 exceeding net income limits for a self-employed person, and an audit or accounting for 4 each alleged month beyond a trial work period and extended period of eligibility. The 5 government did not rely on evidence of the defendant's net income, rather it continued 6 to introduce and emphasize gross receipts and averaged those into monthly figures. 7 Even if the burden were now shifted to the defense, the defense can show that the 8 government's claim of loss is wrong. 9
Bond did not apply for benefits for Raquel Fagrelius and should not be held

10 responsible for benefits paid. Neither count charged Bond with fraud or theft by his ex11 wife's or daughter's conduct, over which he had no control. Bond was not responsible 12 for their actions, and her actions should not be asserted against him. Alternatively, 13 Bond would ask this Court to grant a downward departure, pursuant to § 5K2.0, for the 14 independent acts of his ex-wife's application and receipt of SSA benefits. However, 15 such a departure will likely not be necessary if there are no increase in levels for the 16 allegation of loss not proven, as well as an allegation based on incorrect information 17 and calculation. The verdict was based on instruction to the jury that the crime required 18 a loss of $1000 or more. The most that theoretically could be said is that a loss of 19 $1000.01may be inferred, but there is no sentence enhancement for a loss of $5000 or 20 less. U.S.S.G. § 2B1.1(b)(1)(A). Again, the defense contends there was no loss and can 21 show this Court with the assistance of the accountant. 22 23 24
There should be no increase in the offense level for economic loss. 2. The Obstruction of Justice Enhancement Is Inapplicable Paragraph 25 of the presentence report mistakenly applied a two-level

25 enhancement for Obstruction of Justice, pursuant to U.S.S.G. § 3C1.1, based on the 26 urging of the government that trial testimony of Bond impeded or obstructed justice as 27 28 6

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1 described in PSR¶ 18. The claim, without citations to the record, alleges as its basis: 2 "the Court's repetitive admonitions of the defendant to answer questions during his 3 testimony, and to believe the defendant was capable of directly answering questions 4 when the answers would benefit him, but would not directly answer questions when 5 not beneficial." PSR ¶ 18. As noted previously, the government bears the burden of 6 proving beyond a reasonable doubt that an enhancement would apply. The government 7 has not done so, and even if Bond had done as alleged, an enhancement is violative of 8 his constitutional right to testify and to a fair trial. 9 10 11 12 13 14 15 17
The commentary to § 3C1.1 provides: This provision is not intended to punish a defendant for the exercise of a constitutional right. A defendant's denial of guilt (other than a denial of guilt under oath that constitutes perjury), refusal to admit guilt or provide information to a probation officer, or refusal to enter a plea of guilty is not a basis for application of this provision. In applying this provision in respect to alleged false testimony or statements by the defendant, the court should be cognizant that inaccurate testimony or statements sometimes may result from confusion, mistake, or faulty memory and, thus, not all inaccurate testimony or statements necessarily reflect a willful attempt to obstruct justice.

16 U.S.S.G. § 3C1.1 (n.2) (emphasis added).
A defendant has a well-founded right to testify in his own case that can be

18 violated by punishing him for testifying. "The right to testify on one's own behalf in a 19 criminal proceeding is made explicit by federal statute, 18 U.S.C. § 3481, and, we have 20 said, it is also a right implicit in the Constitution." United States v. Dunnigan, 507 U.S. 21 87, 96 (1993) (citing Rock v. Arkansas, 483 U.S. 44, 51-53, (1987); Nix v. Whiteside, 22 475 U.S. 157, 164 (1986)). 23 24 25 26 27 28
Even more fundamental to a personal defense than the right of self-representation, which was found to be "necessarily implied by the structure of the [Sixth] Amendment," is an accused's right to present his own version of events in his own words. A defendant's opportunity to conduct his own defense by calling witnesses is incomplete if he may not present himself as a witness. Rock, 483 U.S. at 52 (empasis added). The suggestion to punish Bond for testifying in

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1 a way suggested to be indirect or unsatisfactory, but not perjury, is without merit. 2
Thus, a district court may enhance a sentence for obstruction of justice if the

3 defendant's testimony was false, material, and willful. Shannon, 137 F.3d 1112, 1119 4 (9th Cir.1998)(citing United States v. Dunnigan, 507 U.S. 87, 94 (1993)). "Obstruction 5 of justice resting on perjury should require a high degree of proof. Mere dispute or 6 disagreement as to a defendant's perception of facts, without more, should not give rise 7 to a charge of perjury in the context of sentencing." Shannon, 137 F.3d at 1119 n. 3; 8 United States v. Cooper, 173 F.3d 1192, 1205 (C.A.9 1999). 9 10 11 12 13
It is not enough that the defendant chose to testify and was convicted. Imposing the enhancement without a judicial finding of perjury might unduly burden the defendant's Constitutional right to testify. The Supreme Court has demanded that "if a defendant objects to a sentence enhancement resulting from her trial testimony, a district court must review the evidence and make independent findings necessary to establish a willful impediment to or obstruction of justice, or an attempt to do the same...."

14 United States v. Monzon-Valenzuela 186 F.3d 1181, 1183 -1184 (9 th Cir. 1999) (citing 15 Dunnigan, 507 U.S. at 95-97). 16
For the enhancement to apply, the government must show that Bond's testimony

17 was false, material, and a willful impediment to or obstruction of justice, or an attempt 18 to do the same. As previously brought to the court's attention in a Motion for New 19 Trial, Bond was wearing a walking cast and taking Ativan and Vicodin because his 20 right ankle, from being recently broken in two places, was still healing and painful 21 during trial. The prosecutor noted on the record that the defendant's manner of 22 responding was slow, and with appearance of not comprehending the questions. RT 23 3/9/05 143. In fact, after the jury had left the courtroom at one recess, Bond turned to 24 get down from the witness stand and fell face down onto the courtroom floor, causing 25 alarm to counsel and court personnel present, but the event and the few words spoken 26 do not appear in the official transcript of proceedings. Bond also is a defendant who 27 28 8

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1 was clearly acknowledged by SSA, after a multitude of examinations, in 1991 and 2 1998, to be disabled from head injury. RT 3/2/05 109-11. Even on his second day on 3 the stand, the record supports explanation that the defendant was confused and having 4 trouble following the proceedings, as when the judge asked defense counsel to come to 5 the witness area to assist Bond in finding exhibits and then putting them in order for 6 him while being cross-examined by the prosecutor. RT 3/10/05 99. 7
Many individuals and defendants have difficulty answering questions from

8 lawyers, which may better be characterized as their willful attempt to seek justice, 9 rather than obstruct it. The court has authority, including contempt power, during trial 10 to control the manner of answering questions by witnesses, but a defendant stands 11 above other witnesses with the constitutional and statutory right to testify. To add 12 punishment on top of conviction for testifying does not serve the needs of the 13 administration of justice, unless Bond had committed perjury. See, e.g., Rock, 483 U.S. 14 at 55-56 ("[R]estrictions of a defendant's right to testify may not be arbitrary or 15 disproportionate to the purposes they are designed to serve."). Bond did not commit 16 perjury and the enhancement does not apply. 17 2. FACTUAL ERRORS OR MISREPRESENTATIONS IN THE REPORT. 18 19
Cover Sheet Under the section of Release Status, "Arrested March 11, 2005; released with

20 pretrial conditions March 15, 2005" omits a substantial factor. The defendant has been 21 under "house-arrest" since March 15, 2005. That reference should be added. 22 23
Charges and Convictions ¶4 Improperly juxtaposed are the statement of the guilty verdict with a recital

24 from superseding indictment. The paragraph is misleading in that there is a virtually 25 complete recitation of the indictment with factual allegations, such as the date and 26 alleged loss amount, which were never read to the jury, as noted above. Consequently, 27 28 9

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1 the jury verdict is not a reflection of all allegations within Counts 1 and 2, and the 2 sentences are misjoined. 3 4
Offense Conduct ¶ 6- The PSR made the same mistake that the agent made, i.e., suggesting that

5 Bond was operating two businesses. There was only one business doing business as 6 Paradise Insurance Alliance and MSA/HSA Experts. (See ¶ 66 of the PSR.) 7
¶ 7 ­ The defendant objects to the fourth sentence beginning with "he agreed to

8 notify the SSA" as a misrepresentation and overstatement. Bond signed the application 9 form, which included in a paragraph an agreement to notify SSA. The trial testimony 10 showed that Bond signed the document after having been recently examined and tested 11 and determined to have an IQ in the low 80s with a decrement of at least 15 points 12 after the motor vehicle accident. (RT 3/2/05 91-92, 107-108.) The "Application for 13 Disability Insurance Benefits" covers many topics and has one reference to agreeing to 14 notify. Att. 6-8. It would be more accurate to delete the sentence or say "Bond signed 15 the application for benefits which included a provision agreeing to notify . . ." 16
Furthermore, the last sentence of paragraph 7 should be deleted. The agent's

17 review of mental health examinations is not part of an offense. The statement 18 summarizing that the reports varied to a report of "malingering" is grossly misleading. 19 There is no dispute that after medical review in both 1991 and 1998, the SSA 20 determined Bond to be severely impaired (disabled) and the disability continued. RT 21 3/2/05 89-90, 109-111. There are examinations by 15 or more doctors cross-referenced 22 in Part C of the PSR. Not all reports are available, and the most objectionable missing 23 report is one double hearsay reference, in the report by Dr. Brian Jordan, to a different 24 neuropsychological exam by a Dr. Chipman Caine, followed by the mere statement, "It 25 was concluded that the patient was malingering." Dr. Caine was hired by an insurance 26 company opposing Bond in a civil lawsuit Bond filed for his head injury [Conroy 27 28 10

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1 Florist truck that hit him.]. (Evidence of a connection between Dr. Caine and insurance 2 lawyers is available on the internet, e.g., "Psychological Conditions Arising in 3 Litigation," co-authors John Chipman Caine, Ph.D. and Charles F. Richards, insurance 4 lawyer of Arizona). With his report and circumstances unavailable, and the lack of 5 being a neutral observer, any such reference as a conclusion is unreliable and 6 misleading. It should be omitted. 7
¶ 8 describes statements in a deposition and statements in a DES questionnaire

8 that are not part of the alleged "offense conduct," is not necessarily "contrasted . . .", 9 and appears to be an inaccurate depiction. The two references are not mutually 10 exclusive experiences. The questionnaire of Bond was approximately three months 11 after the end of the period of sales described in the deposition, and does not mean that 12 the October 28, 1991 questionnaire was inaccurate. The reference to him being self13 employed and representing United Security of America from February to July 1991, 14 and that he sold security systems, omits the significant portion of his testimony that he 15 sold only six security systems during that six months, that he was not feeling well, and 16 that he was not organized in the business. Deposition at 11, 14-16. A further 17 description in paragraph 8 that he "earned approximately $8,000" does not appear to be 18 supported by the deposition testimony-- which states that he made "collectively, $3800 19 and some," and that his cousin and another man did the installation work for him. 20 Deposition at 16-17. 21
¶ 9 incorrectly states "the defendant applied for SSDI on behalf of his minor

22 daughter." The defendant did not make an application. His ex-wife, Dawn Wilson, 23 applied for and received the benefits on behalf of his minor daughter who was in her 24 custody. RT 3/1/05 158-61; Trial Exhibit 5, 6. Paragraph 9 also incorrectly states 25 "Benefits were subsequently granted to his daughter on behalf of the defendant." 26 Benefits were granted "on the account of" the defendant or on the defendant's "record" 27 28 11

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1 or "based on the application and qualification of the defendant for his own disability 2 benefits," but not on his behalf. RT 3/1/05 158-61; trial Exhibit 4. Bond received none 3 of those benefits or payments. His wife and child applied for and received the child's 4 benefits independently from Bond. 5
¶ 10 incorrectly states that Blackstone Agency was a client of the defendant.

6 Blackstone Agency was a temporary employer for two months, Bond was to be 7 compensated for time which included thinking or sleeping, Bond sued for $4250 owed 8 him for those services, but Bond was never able to collect any of the judgment. RT 9 3/10/05 108. 10
¶ 11 incorrectly represents that Bond did not notify the SSA of his 1995 name

11 change until 1999. Bond sent notices to the SSA and all other entities consistent with 12 directions from the court of his name change, but continued to receive materials from 13 various entities in the name of Fagrelius. RT 3/10/05 185-86. On May 1, 1996, Bond 14 sent a letter notifying SSA that he was working as an insurance agent on a part-time 15 basis. Att. 32-33.; Trial Ex. 105 [Bates stamped p. "700" of government disclosure to 16 the defense]. 17
Paragraph 11 also incorrectly states that on May 11, 1996, (10 days after his

18 letter of May 1, 1996) that the SSA contacted Bond to discuss working while 19 collecting disability. It was Bond who called SSA on May 11, 1996, to discuss his 20 work. The SSA employee's report of contact notes that Bond said he started working 21 "in the last month or so" in self-employment, although the defendant recalls telling her 22 that it was "months ago." 2 Att. 28-29. 23 24 25 26 27 28
More specifically, the report of contact says "NH called to discuss the alleged work information. He says in the last month or so he has started his own self-employment, prior to that he was attending school for 1 ½ years to study insurance." Att. 28. (emphasis added). The SSA abbreviation "NH" means Bond in this case, as explained in testimony and is obvious in Trial Exhibit 12, stating "[t]here appears to be a big conflict on only a personal level and an attempt by the Erwin's to get the NH out of their daughter's life."
2

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1

¶ 12- The SSA document referred to in ¶ 12, alleged to be a misrepresentation

2 by Bond, bears a date of 5/28/96 but has a signature of 6/3/96. The "Report of 3 Continuing Disability Interview" is partly filled out by the claimant (Bond) and 4 obviously bears the handwriting of more persons. The defendant disputes that he said 5 that there was "no profit" for 1995-1997. That was written by someone else, 6 presumably the interviewer, who also wrote the name Neil Fagrelius and the social 7 security number. Trial Ex. 16. Bond's dispute is at least partly corroborated by 8 tesimony of the government's SSA expert witness at trial, Barbara Jackson, who 9 testified that she knew the handwriting of a coworker; and it would have been written 10 after the signature of Neil Fagrelius, dated June 3, 1996. RT 3/2/05 30-31. Also dated 11 June 3, 1996, was the SSA's Work Activity Report in the name of Neil Fagrelius, 12 which contains in part 3B the direction to "[g]ive your monthly self-employment 13 income since the above date (average if not sure)," followed by the handwritten words 14 "Based on Net." Each of six months thereafter listed in handwriting "$150" in the 15 respective columns for "Net" income, but there were no amounts written, or required 16 in the columns for "gross" income. Att. 39-42; Trial Exhibit 17. In that same form, 17 Bond again made it clear to the SSA that he had changed his name. In section 10 a 18 handwritten declaration states: "In order to make it easier for potential customers to 19 remember my name I changed my name for business purposes to Neil Bond." Att 41. 20 Bond's reports to the SSA and reports of commissions to the IRS were all made with 21 the same Social Security number, whether in the name of Fagrelius or Bond. 22
¶ 14 mistakenly represents that Bond completed work activity reports that were

23 "in contrast to" figures of commissions and compensation in ¶ 13. Bond's eligibility 24 for disability payments was based on net income as a self-employed person, and Bond 25 provided information to the SSA of his net income. But the government relied in 26 records of gross income only to jump to the conclusion that Bond stole and defrauded, 27 28 13

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1 and the presentence report has made the same mistake in ¶ 14. This is one of the most 2 significant errors in the government's case for many of its conclusions, which include 3 their mistaken representations of loss value and restitution in the PSR. 4 5
Victim Impact ¶ ¶ 16-17 correctly note that Bond was found guilty at trial of counts 1 and 2.

6 However, paragraph 16 mistakenly comes to the conclusion that "[t]he superseding 7 indictment in Count 1 provided the amount of loss as $101,222.70." The syllogism 8 lacks the crucial premise to suggest that the jury made a finding that the loss was a 9 specific amount. Although the superseding indictment alleged that figure, the court 10 never advised the jury of the alleged amount, the jury instructions included no more 11 than a reference that the statute requires a loss of more than $1000, and the jury made 12 no finding regarding the specific allegation of loss in the superseding indictment. In 13 short, the government alleged a specific loss but did not prove the specific loss, and the 14 defense submits that it is error to conclude that there even was a loss. Had there been a 15 complete, correct, and careful analysis by the SSA, they should not have arbitrarily 16 concluded, as they did, that Bond received benefits for which he was not entitled or 17 that Bond was "working and earning in excess of SSDI program requirements." In 18 fact, with the assistance of the accountant now appointed for the defense, the defense 19 can now show that conclusions of loss by SSA were wrong, but asks this Court to 20 maintain that it would be the government's burden to prove a claim of loss and 21 restitution now. The defense disputes the loss and restitution, and an evidentiary 22 hearing would be appropriate. 23
¶¶ 18 and 25seek enhancement on a claim of obstruction of justice. As

24 described and argued above, the claim by the government does not show obstruction of 25 justice by the defendant's testimony. The defendant's answers may not have been in a 26 manner or mode that the judge thought satisfactory or desirable. But the record shows 27 28 14

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1 especially that the defendant is a person qualified by SSA as having a head-injury 2 disability, as well as his consumption of large amounts of Ativan and Vicodin to deal 3 with pain during trial, a difference in his speech and appearance noted by the 4 prosecutor, and evidence in his answers that he was confused during his testimony. 5 6
Acceptance of Responsibility Insistence on trial is not a per se bar to receiving the § 3E1.1 adjustment for

7 Acceptance of Responsibility. Conviction by trial "does not automatically preclude a 8 defendant from consideration for such a reduction." United States v. Cortes, 299 F.3d 9 1030 (9 th Cir. 2002). 10 11
Offense Level Computations ¶ 22- As pointed out above in Section A, the suggested 8 level enhancement for

12 the unproved allegation of loss is incorrect. No increase in the offense level is 13 appropriate under § 2B1.1(b)(1). 14 16 17 18 19 21
¶ 25- Also pointed out above, no enhancement for Obstruction of Justice is

15 appropriate.
¶ 26- Adjusted Offense Level should be no more than 6. ¶ 27- The court can still make a determination for acceptance of responsibility. ¶ 28- The Total Offense Level should be no more than 6. ¶ 31- In the 1974 misdemeanor conviction, the PSR reports a sentence of 100

20 days of jail. Bond contends that there was no jail time imposed.
¶ 35 The PSR declares that a summons was issued but Bond could not be

22 located, so he was arrested. The defense submits that the Flagstaff Police sent him 23 notice in the mail and he was not arrested. 24 25 27 28 15
Other Criminal Conduct ¶ 37 The PSR lists disposition "unknown" for an arrest 3/8/76 for shoplifting a

26 bottle of vodka and possession of a stolen rawhide dog bone. The defense submits that

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1 the disposition was that charges were dismissed. 2
¶ 39- The defense submits that Geri Adelson was first served with an order of

3 protection for harassment of Bond and his daughter. Thereafter, Ms. Adelson caused 4 an order of protection to be served upon Bond. Each of them contacted the other after 5 the Orders were served. Under those circumstances, the County Attorney's Office 6 turned down prosecution for any offenses. 7 9 10 12 14
¶ 41- The defense submits that he first filed for an Order of Protection against

8 Ms. Metzger.
Other Arrests ¶ 43- The PSR refers to the disposition as "unknown" but the defendant submits

11 that the charge was dismissed.
¶ 44- The PSR refers to the disposition as "unknown" but the defense submits

13 that the charge was dismissed.
¶ 45- The defense explains that this charge was lodged against his sister, his

15 brother-in-law and him, based upon a false claim of assault by his daughter's mother, 16 then Dawn Fagrelius, in which she claimed that a home belonged to her, when in fact 17 the home belonged to defendant's sister and brother-in-law. 18 19 21 22 23
Offender Characteristics ¶ 46- This paragraph should reflect that it was upon advice of counsel that Bond

20 declined to be interviewed by the Probation Officer preparing the presentence report.
Personal and Family Data ¶ 48- Bond had contact with his daughter until his arrest in this case. ¶ 49- on December 19, 2000, Bond's wife of six months, Yekaterina Bond (nee

24 Sanaeva), who had come to the United States from Russia to marry Bond, threatened 25 Bond with death after an argument at their home. Using her extensive knowledge about 26 medicines in Russia, she threatened to kill him by means about which Americans are 27 28 16

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1 not knowledgeable. Two days later Bond was still concerned about the threat, so he 2 reported it to the Phoenix Police Department, as reflected in their police report number 3 2000 02247790. Att. 34-35. Between the evening of February 1 and morning of 4 February 2, 2001, Bond's Ruger pistol, tax information papers, and insurance papers 5 were stolen from his home. Since Yekaterina still had keys and the alarm code, even 6 after their separation in December, Bond suspected that Yekaterina stole the items. 7 Bond reported the theft to the Phoenix Police Department as reflected in their report 8 number 2001 10205815. Att. 36-38. Bond sought an order of protection against her. In 9 an unrelated matter, Yekaterina Bond was charged on August 2, 2003, in Peoria 10 Municipal Court Case Number M-0750-CR-2003000876 with the crime of Disorderly 11 Conduct ­ Fighting. Yekaterina's history should be included to fairly balance the other 12 allegations in the PSR referring to her. 13
¶ 50 The defense denies Bond told Ms. Metzger that he was on disability for a

14 back injury. Metzger was a massage therapist who provided him with massage therapy 15 and he told her his disability was from head injury. She may have seen him play in one 16 volleyball game, bu that would not have been inconsistent with his disability for 17 sporadic and unpredictable severe headaches. 18
The PSR recital that the OIG investigator found three orders of protection from

19 Metzger against Bond is not reflected in the agent's report of investigation. His report 20 suggests on its seventh page that an NCIC check disclosed an order of protection from 21 November 2001, but no copy of such an order was included with the report and no 22 such order can be found at the website of the Arizona Supreme Court access to public 23 information. Www.supreme.state.az.us/publicaccess/search.asp. The defense questions 24 whether the agent looked for orders of protection against Ms. Metzger and submits that 25 such a search would have disclosed that Bond sought orders of protection against 26 Metzger, a biased person, before she filed anything against Bond. Likewise, Agent 27 28 17

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1 Turk interviewed Metzger on October 22, 2001, between the time Bond had filed an 2 Adversary Proceeding against her in Bankruptcy Court on October 18, 2000, and 3 before the court approved a compromise on January 30, 2002. (See Objections post for 4 ¶ 69.) The acrimonious bankruptcy litigation should be included in the presentence 5 report to remove the slant against Bond. 6 7
Physical Condition ¶ 51- The PSR suggests that the defendant wrote that he had a brain tumor and a

8 broken leg, neither of which have been confirmed. The brain tumor diagnosis is 9 believed to have been made by Dr. Steve Wolf in Chicago after an MRI. The broken 10 ankle on January 18, 2005, was confirmed by Dr. Steingart and confirming documents 11 were filed with this court. He originally was treated by Dr. Jon T. Vasquez at the 12 Scottsdale Healthcare Osborn Emergency Department on the day of the injury. The 13 conclusion was that his right ankle was broken in two places, an oblique fracture of the 14 distal fibula and a fracture of the posterior malleolus. Proof was attached to the defense 15 motion to continue trial on January 28, 2005 (docket # 65). 16
¶ 52- The report of Dr. Erlbaum regarding Bond was not read by the PSR

17 writer, but the PSR makes a selected reference to him having performed CAT scans 18 and EEGs with normal results, and that he referred Bond to Dr. Barber. The PSR does 19 not reflect, but should, the other more significant statements by Dr. Erlbaum that Bond 20 had been in a motor vehicle accident which "rendered him with symptoms of headache, 21 back pain, dizziness, vertigo, nausea, difficulty thinking and concentration. It was felt 22 he had a postconcussive syndrome.... The patient had significant multiple residuals.... 23 At the last time I had seen Mr. Fagrelius, he was quite impaired from his 24 symptomatology and unable to do his normal work as a sales manager." Att. 9. 25 27 28 18
¶ 52 also refers to Dr. Barber having performed a personality test on Bond. The

26 description of his observations, if it is to be included in the PSR, omitted material

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1 references and misrepresented the overall conclusions concerning Bond. Barber's 2 report did not describe that Bond experienced anxiety and panic episodes. The PSR 3 states: "he observed clinical scales similar to people who report some bizarre bodily or 4 somatic delusions, and Bond was experiencing anxiety and some panic episodes." Dr. 5 Barber's report actually said: "[c]linical scales are similar to people who report some 6 bizarre bodily or somatic delusions along with constrictiveness and possibly 7 immobilization caused by multiple symptoms, who is (sic) experiencing anxiety and 8 some panic episodes." Att. 11. The doctor simply opined that the MMPI- II test of 9 Bond suggested that his clinical scales were similar to other people who reported those 10 symptoms or problems. The PSR also omits additional interpretation of favorable 11 characteristics of Bond by Dr. Barber that "other scores indicate an imaginative and 12 creative personality who tends to be self-confident and assertive and might 13 demonstrate sincerity, persistence, and responsibleness." Att. 11. Furthermore, 14 reference in the PSR to the referral by Dr. Barber to Dr. Barowsky, described as a pain 15 specialist who suggested that Bond tended to over-react, should either be removed or 16 clarified that: (1) Barowsky's statement was that "His response to introduction of #27 17 gauge needles for injection was most extreme and appeared inappropriate for what was 18 done[,]" and (2) Dr. Barowsky is an anaesthesiologist, who actually noted to SSA upon 19 their inquiry that "Being an anaesthesiologist I'm not able to determine disability." Att. 20 13, 20 . 21
¶ 53- The description that "Bond was not heard from again until September 26,

22 1991" misrepresents and materially omits facts. The paragraph describes that Bond was 23 given examinations and tests about January 1991, recommended that he follow up with 24 Dr. Steve Wolf of Chicago, but that Bond was not heard from again until September. 25 The PSR omits that Bond did follow up with Dr. Wolf, a neurologist in Chicago. Wolf 26 first saw Bond on March 22, 1991, and last saw him on June 27, 1991. Att. 15. The 27 28 19

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1 PSR also omitted Dr. Wolf's conclusion that Bond suffered from post concussion 2 syndrome. Att. 15. 3
¶ 55- Dr. Marc S. Walter is not just a Ph.D. but, as noted at the top of his report

4 and omitted from the PSR, he is a Diplomate in Psychology. Att. 21. The PSR omits 5 the very important fact that Dr. Walter also reviewed two MRIs 10 months apart, dated 6 1/19/91 and 11/18/91, showing encephalomalacia [Softening or loss of brain tissue 7 following cerebral infarction; cerebral ischemia, infection, craniocerebral trauma, or 8 other injury], and the battery of tests by Walter that showed "[b]oth visual motor and 9 auditorially based attentional abilities were significantly impaired[,]"as well as results 10 that Bond then had a Performance IQ of 82 and a Verbal IQ of 89. Att. 23-25 11 13
¶ 56 is irrelevant and suggestively prejudicial, particularly where the doctor's

12 action was probably for Bond missing two appointments.
¶ 58- Dr. Jordan's report of evaluation of Bond referred to "records" of five

14 other persons. Any references and/or 1-2 sentence summaries of records by other 15 doctors should be removed from the defendant's presentence report. Such conclusions 16 of others, or unidentified "records," do not have indicia of reliability here. As noted 17 above, the defense is aware that one of those five persons was Dr. Chipman Caine, 18 who was hired by a party opponent in a lawsuit­ Conroy Florists, who owned the truck 19 which rear-ended Bond's vehicle and resulted in Bond's head injury. Without access to 20 the "records" themselves, or even the circumstances surrounding the "records," the 21 accuracy of such significant statements about Bond cannot be fairly tested by Bond at 22 this time. Although there is some latitude in evidence a court may consider from a 23 presentence report, violations of a defendant's due process rights occur when a court 24 relies on materially false or unreliable information in sentencing. United States v. 25 Columbus, 881 F.2d 785, 787 (9th Cir.1989) . Dr. Jordan's results and conclusions 26 from his own testing and observations may have sufficient indicia of reliability for 27 28 20

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1 inclusion in the presentence report, but the additional hearsay from other records, 2 which may themselves be conclusions based on second, third, or more generations of 3 hearsay, does not have sufficient indicia of reliability and should be excluded. 4
¶ 59- The PSR refers to Dr. Nicholls report in 1998. His report did not have a

5 conclusion other than to offer three hypotheses, followed by his significant, but 6 omitted in the PSR, declaration "I do not have sufficient data to confidently 7 differentiate between the above hypotheses." His evaluation should be excluded from 8 the PSR, especially where the PSR has no reference to the doctor's lack of confidence 9 in the three, and they were only hypotheses. 10
¶ 60- Because Dr. Nicholls (¶ 59) was, as described by Dr. Hal J. Breen in his

11 report, "explicitly ambiguous" and felt "the cognitive test scores were not valid and 12 potentially misleading," DES referred Bond to Dr. Breen for evaluation. Att. 39. If a 13 summary of Dr. Nicholls report were to remain in the PSR, over the objection above, 14 these quotes of Dr. Breen must be included, as well as his entire diagnoses. The PSR 15 noted Dr. Breen's finding that cognitive examination found gross deficits which he did 16 not believe to be a consequence of malingering, but the PSR omitted an important 17 belief of Dr. Breen: "The cognitive examination reveals gross deficits which I believe 18 are valid and not a consequence of malingering." Att. 43-44 (Emphasis added.) The 19 PSR recital of the diagnosis concerning Axis I excluded important information: 20 "organic brain syndrome, the sequelae of a motor vehicle accident which the patient 21 had in September 1990. In addition to emotional factors, the patient suffers very 22 substantial cognitive deficits which I believe are authentic." (Emphasis added.) The 23 facts that Dr. Breen believed (1) the organic brain syndrome was the result or 24 consequence from the automobile accident, and (2) Bond's gross deficits in cognition 25 were substantial and authentic, are facts that the presentence report should include to 26 be accurate and fair. 27 28 21

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1 2

Financial Condition: Ability to Pay ¶ 69- The PSR states that Bond filed for bankruptcy but the date is unknown,

3 and that the bankruptcy was dismissed after "Bond failed to submit all required 4 Business Operating Statements." The Bankruptcy Court docket reports show Bond's 5 bankruptcy filed in case # 00-7533-RJH on July 13, 2000, which was dismissed August 6 18, 2000, for "failure to TIMELY file Schedules, SA and Ch. 13 plan." One month 7 later Bond refiled for bankruptcy in case # 00-10217-GBN on September 19, 2000, 8 which was dismissed 1 ½ years after that on January 24, 2002, because of Bond's 9 "failure to make plan p[a]ym[en]ts." One month after filing for the second bankruptcy 10 case, on October 18, 2000, Bond filed an adversary proceeding (ap) against his ex11 fiancé, Leonore Metzger (PSR ¶ 50), in case # 00-ap-00716-GBN, seeking surrender 12 from her of an automobile. Two weeks later on November 2, 2000, Metzger opposed 13 bankruptcy relief for Bond and filed a motion to dismiss Bond's bankruptcy case # 0014 10217, as well as other subsequent filings against Bond in that case, before the court 15 approved a compromise in the administrative proceeding of Bond v. Metzger case on 16 January 30, 2002. Bond's bankruptcy case was dismissed because he did not have the 17 money to make his bankruptcy plan payments. 18
The PSR states that Bond had a bank account at Bank of America "using a

19 Social Security number assigned to another person[,]" and that the account was closed 20 before the agent verified its existence with the bank. This recitation is irrelevant and 21 prejudicially misleading. There is no evidence of impropriety or unlawfulness by Bond. 22 The agent's report provides no evidence of such. His report declares only that there 23 was an account opened with a social security number 1digit higher than that of Bond. 24 The defense submits that if records were available from the bank, a proper 25 investigation would show and would have shown that there was merely a clerical error 26 of the employee in opening the account, there was very little money in the account, and 27 28 22

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1 after Bond discovered the mistake in the social security number, he closed the account 2 and opened another with the correct number. Bond was not "using" someone else's 3 number. The reference should be deleted from the PSR or revised to show only that it 4 was an account with an incorrect number by clerical error. 5 6
Sentencing Options ¶ 71- The Total Offense Level is no more than 6, for reasons set forth in

7 objections to ¶ 22 and ¶ 25. The guideline range for a Level 6 with a Criminal History 8 Category II is 1-7 months. Since that range is Zone B, the court may grant probation 9 under the guidelines with a condition or combination of conditions requiring 10 community confinement, home detention or intermittent confinement sufficient to 11 satisfy the minimum term of imprisonment. The defendant has been in home 12 confinement for almost 10 months since his release from custody March 15, 2005, as 13 well as 7 days of incarceration, which could satisfy the Zone B requirement. Of course, 14 since the guidelines are "advisory" now, the court can impose less. 15 17 18 19
¶ 75- Because the guideline range should be Zone B at most, probation is

16 available. U.S.S.G. § 5C1.1(c).
¶ 77- The correct fine range should be no more than $500 to $5000. ¶ 81- The defense can show that no restitution must be paid. ¶ 84-85 The court should grant a downward departure for Bond's mental

20 disorder(s). Even in cases where a mental disorder does not amount to a defense of 21 diminished capacity, a defendant's significantly reduced mental capacity may justify a 22 downward departure. U.S.S.G. § 5K2.13. Additionally, akin to U.S.S.G. § 5H1.3, 23 where there is a medical or mental disorder which is extraordinary or existed to a 24 degree not adequately considered by the sentencing commission, a departure is 25 available. See, e.g., United States v. Garza-Juarez, 992 F.2d 896, 913 (9 th Cir. 26 1993)(Four level downward departure based upon defendant's mental disorder 27 28 23

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1 consisting of panic disorder with agoraphobia, not unreasonable.), United States v. 2 Cantu, 12 F.3d 1506 (9 th Cir. 1993) (holding that "reduced mental capacity" 3 comprehends both organic dysfunction and behavioral disturbances that impair the 4 formation of reasoned judgments). Here, the government and the SSA did not dispute 5 that Bond was eligible for disability benefits by reason of his medical and/or mental 6 condition. The dispute was that he exceeded income limits. RT 3/2/05 89-90, 108-11. 7 In fact, the SSA agreed with the reports of the highly educated and tested Diplomate in 8 Neuropsychology, Dr. Marc S. Walter from three sessions in December 1991, and the 9 in-depth reevaluation by Dr. Hal Breen in 1998, that he was severely impaired 10 (cognitive deficits authentic) and that Bond continued to be medically or mentally 11 disabled. Id. Downward departure is clearly appropriate. Alternatively the 12 mental/medical circumstances are a strong reason for a probationary sentence based 13 on the sentencing statute rather than the guidelines because probation is "sufficient, but 14 not greater than necessary" to achieve the purposes of sentencing set forth in 18 U.S.C. 15 § 3553(a)(2) [see, e.g., (a)(1)­ courts to consider "the nature and circumstances of the 16 offense and the history and characteristics of the defendant" (emphasis added)]. 17
The court may also consider that Bond's age is consistent with a lower risk of

18 recidivism not considered by the guidelines. United States v. Lucania, 379 F.Supp.2d 19 288, 297 (E.D.N.Y. 2005) ("Post-Booker courts have noted that recidivism is markedly 20 lower for older defendants."). United States v. Carmona-Rodriguez, 2005 WL 840464, 21 4 (S.D.N.Y. April 11, 2005) (where 55 year old woman pled guilty to distribution of 22 drugs sentence of 30 months (below guideline range) proper in part "in view of the low 23 probability that Carmona-Rodriguez will recidivate.") Defendants "over the age of 24 forty... exhibit markedly lower rates of recidivism in comparison to younger 25 defendants. See Measuring Recidivism: The Criminal History Computation Of The 26 Federal Sentencing Guidelines, at 28, www.ussc.gov/publicat/Recidivism_General.pdf. 27 28 24

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1 (2004)(stating that for those defendants in Criminal History Category I, the recidivism 2 rate for defendants who are between the ages of 41 and 50 is 6.9 percent whereas the 3 recidivism rate for such defendants who are between the ages of 31 and 40 is greater 4 than 12 percent, departure granted to 30 months); Simon v. United States, 361 5 F.Supp.2d 35 (E.D.N.Y. 2005) ("Under the Guidelines, age was not normally relevant 6 to sentencing." § 5H1.1. Post- Booker, however, at least one Court has noted that 7 recidivism drops substantially with age. United States v. Nellum, 2005 WL 300073 8 (N.D.Ind., 2005)(granting non-Guideline sentence and noting that recidivism rate for 9 defendants between the age of 41 and 50 with a criminal history category of III is less 10 than half that of defendants under the age of 21). Bond is almost 53 years old. 11
This Court may also downwardly depart based on Bond's loss of Business,

12 Assets, and/or source of income. See, e.g., United States v. Gaind, 829 F. Supp. 669 13 (S.D.N.Y. 1993) (the destruction of a defendant's only business, involving testing 14 material for the EPA, warranted a downward departure in false statement case because 15 elimination of the defendant's ability to engage in similar or related activities and the 16 substantial loss of assets and income were a source of individual and general 17 deterrence). 18 19
CONCLUSION The defendant's overall position is that he only received benefits for which he

20 was eligible or entitled, the SSA mistakenly concluded with insufficient evidence that 21 he was ever ineligible, there was no "loss," and the guideline range is actually "zero." 22 Based on the foregoing, Bond asks this Court to deny the guideline enhancements 23 alleged based on the claim that there was a loss, and find the allegation of restitution 24 owed for $101,222.70 was without support or incorrectly analyzed and incorrectly 25 calculated, and to deny the guideline enhancement alleging obstruction of justice. He 26 further asks that this court to set an evidentiary hearing in which he can present 27 28 25

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1 evidence of errors by the government and the presentence report, and to hold the 2 government to the appropriate burden of proof and standard of proof to conclude in 3 defendant's favor. 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 26
/s Timothy C. Holtzen Timothy C. Holtzen Attorney for Defendant RESPECTFULLY SUBMITTED this 7 th day of January 2006.

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