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Jo Hovind Sentencing Report!

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  • rlbaty50
    ... and ... Basically, it looks like the Court upped the sentence to a year due to the seriousness of the issue and as allowed by the rules. ... TEXT (Cut and
    Message 1 of 1 , Feb 21, 2013
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      Of particular interest may be the following observation from the report:

      > "(T)he Court has heard some evidence
      > that Jo Hovind attempted to discourage
      > the anti-tax behavior (of Kent Hovind)."

      and

      > "Through testimony of former employee
      > Brian Popp (to whom Kent Hovind stated
      > in 1998 that CTRs were "a bad thing")..."

      Basically, it looks like the Court upped the sentence to a year due to the seriousness of the issue and as allowed by the rules.

      -------------------------------------------------

      TEXT (Cut and Paste by Robert Baty)

      IN THE UNITED STATES DISTRICT COURT FOR THE
      NORTHERN DISTRICT OF FLORIDA
      PENSACOLA DIVISION

      UNITED STATES OF AMERICA

      v. Case No. 3:06cr83/MCR

      JO D. HOVIND

      UNITED STATES' SECOND SENTENCING MEMORANDUM

      The United States of America, by and through the undersigned Assistant United States Attorney, hereby submits this Second Sentencing Memorandum for the Court's consideration in the defendant's sentencing hearing currently scheduled for Friday,
      June 29, 2007.

      Specifically, the United States submits that this Court should consider imposing a sentence above the advisory Guidelines range
      of 0-6 months.

      As seen below, the facts and law pertaining to this case justify either a "variance" pursuant to 18 U.S.C. § 3553(a) factors, or
      an upward departure from the Guidelines.

      A. Procedural Background

      Jo D. Hovind ("the defendant"), along with her husband
      Kent E. Hovind, was indicted in the Northern District of
      Florida on July 11, 2006. (Doc. #2).

      The fifty-eight count Indictment included tax counts,
      with which only Kent Hovind was charged, and
      structuring of monetary transactions counts (Counts
      Thirteen through Fifty-Seven), with which both defendants
      were charged. (Id.).

      On November 2, 2006, both defendants were convicted on
      all counts of the indictment. (Doc. #90).
      The sentencing was originally set for January 19, 2007.
      (Doc. #93).

      A Presentence Report (PSR) was created as to the defendant and disclosed to the parties on December 15, 2006. That report
      utilized the 2006 Edition of the Guidelines Manual (PSR, ¶ 32),
      and calculated an advisory guidelines range of 51-63 months imprisonment, (PSR, ¶ 69), based upon a base offense level of 22.

      In the Addendum dated January 12, 2007, the appropriate Guidelines Manual was changed to the 2001 version. The calculation was reduced in the addendum to 41-51 months, but the base offense level of
      22 remained unchanged. (PSR Addendum, ¶¶ 34, 69).

      At the sentencing hearing, the Court questioned whether, in the
      2001 manual, § 2S1.3(b)(2) should apply.

      The Court requested briefing from the parties and reset the
      sentencing hearing. (Doc. #148).

      Thereafter, the United States withdrew any objection to the application of § 2S1.3(b)(2), and a revised PSR was created.

      This amendment changed the advisory Guidelines range significantly. According to the February 27, 2007, Revised PSR, the guidelines
      range the defendant now faces is 0-6 months, based upon a base offense level of 6, Criminal History Category I. (Revised PSR and
      Addendum, ¶¶ 35, 69).

      B. Relevant Factual Summary

      At trial, the United States proved that, from approximately
      July 1999 through August 2002, the defendant knowingly, and
      for the purpose of evading the reporting requirements of
      Title 31, United States Code, Section 5313(a), structured transactions at AmSouth Bank. ( See PSR, ¶ 19 et seq; Testimony
      of SA Frederick Charles Evans; Testimony of Anne Dyson, Regional Operations Manager of AmSouth Bank; Gov't. Exhs. STR 1-214
      (Checks); 217 (Summary Charts); INC 1-38 (AmSouth Bank
      Statements); STR 152-155 & 215-216 (CTRs).

      Specifically, the United States proved that, in order to meet
      the payroll obligations of CSE, the defendant withdrew slightly
      under $10,000 cash from her account in irregular intervals and several times per month, on occasion several times per week. (Id.).

      At the time of each individual withdrawal, the defendant had financial need greater than the amount withdrawn, and had more
      money available than the amount withdrawn, but chose to withdraw under $10,000 on every occasion. (Bank Records, Id.; INC 193
      (2003 Deposit Summary); INC 248 January 2001-December 2003 Bank Balances; INC 195 (Total Deposits and Telephone for CSE 1996-2001); INC 193 (2003 Worker Expenses); PR 11 (Employee List; PR 58 (Chart
      of Employment Tax Computations' PR 32-36 (various Payroll Charts covering 1999-2003).

      Through testimony of former employee Brian Popp (to whom Kent
      Hovind stated in 1998 that CTRs were "a bad thing"), AmSouth
      Bank operations manager Anne Dyson (who testified about the
      2:00 pm business day cut-off posted at the bank), former
      neighbor Darlene Porter (from whom the Hovinds bought property
      by way of structured cashier's checks), the bank records and
      CSE records, and the sheer volume of the transactions, the
      United States established at trial that the defendants had
      knowledge of the reporting requirements and structured each transaction to evade the filing of a CTR Factors (2) through
      (5) are set forth at § 3553(a)(2), and those factors mirror
      the reasons traditionally recognized for imposing sentence:
      (a) retribution, (b) deterrence, sometimes for over four years.

      C. Post-Booker Sentencing

      After United States v. Booker, 543 U.S. 220, 125 S.Ct. 738 (2005),
      in order to impose a lawful sentence this court must correctly calculate the defendant's appropriate advisory Guidelines range.
      United States v. Williams, 435 F.3d 1350, 1353 (11th Cir. 2006)
      (per curiam); United States v. Talley, 431 F.3d 784, 786 (11th
      Cir. 2005)(per curiam ); United States v. Crawford, 407 F.3d 1174, 1178 (11th Cir. 2005).

      After the court makes this calculation, it "may impose a more
      severe or more lenient sentence as long as the sentence is reasonable." Id.

      That is, the court is to properly calculate the defendant's Guidelines range, but after doing so it must consider the
      factors set forth in 18 U.S.C. § 3553(a) and may tailor the defendant's sentence in light of those factors. Booker, 125
      S.Ct. at 757, 764, 766-67; Williams, 435 F.3d at 1353; Talley,
      431 F.3d at 786.

      The Talley Court summarized the § 3553(a) factors as follows:

      (1) the nature and circumstances of the offense and the
      history and characteristics of the defendant;

      (2) the need to reflect the seriousness of the offense,
      to promote respect for the law, and to provide just
      punishment for the offense;

      (3) the need for deterrence;

      (4) the need to protect the public;

      (5) the need to provide the defendant with needed
      educational or vocational training and medical care;

      (6) the kinds of sentences available;

      (7) the Sentencing Guidelines range;

      (8) pertinent policy statements of the Sentencing
      Commission;

      (9) the need to avoid unwarranted sentencing
      disparities; and

      (10) the need to provide restitution to victims.

      Talley, 431 F.3d at 786. referred to as general deterrence,
      i.e., the need to deter others from committing like crimes,
      (c) incapacitation, sometimes referred to as specific deterrence, i.e., the need to prevent the defendant from committing crime,
      and (d) rehabilitation. Bullington v. Missouri, 451 U.S. 430,
      443 n. 16, 101 S.Ct. 1852, 1860 n. 16 (1981); United States v.
      Godfrey, 22 F.3d 1048, 1058 (11th Cir. 1994).

      The Sentencing Reform Act of 1984 reflects that the least
      important of the four goals is rehabilitation. Mistretta v.
      United States, 488 U.S. 361, 365, 109 S.Ct. 647, 651 (1989);
      United States v. Scroggins, 880 F.3d 1204, 1207 (11th Cir. 1989).

      5 After such consideration, the court may find
      the advisory Guidelines range inadequate because
      it fails to represent the seriousness or full
      breadth and nature of the crime committed, or
      where it under-represents the harm.

      18 U.S.C. § 3553(a)(2)(A); see also United States
      v. Amedeo, 2007 WL 1500184, *7-8 (11th Cir. 2007);
      United States v. Valnor, 451 F.3d 744, 748-49 (11th
      Cir. 2006); United States v. Eldick, 443 F.3d 783,
      789-90 (11th Cir. 2006).

      The court may also deviate upwards from the guidelines calculations pursuant to factors in the Guidelines Manual, pursuant to
      traditional principles enumerated in Chapter 5 of the Guidelines Manual.

      See, e.g., United States v. Wallace, 461 F.3d 15 (1st Cir. 2006);
      United States v. Valle, 929 F.2d 629 (11th Cir.1991).

      1. The Guidelines Recalculation

      The Probation Office, in its original guidelines calculations
      using the 2001 Guidelines Manual (first utilized in the
      Addendum), found the defendant's base offense level to be 22.

      However, after researching the issue further, the Probation
      Office recalculated using Section 2S1.3(b), which states:

      (1) If the defendant knew or believed that the funds were
      proceeds of unlawful activity, or were intended to promote
      unlawful activity, increase by 2 levels.

      One could make the argument that, not only does § 2S1.3(b)(2)
      not apply, § 2S1.3(b)(1) does apply. The defendant "intended
      to promote unlawful activity" in that she withdrew the funds specifically to assist in evading employment taxes.

      But for that motivation, cash would not have been withdrawn.

      6
      (2) If (A) subsection (b)(1) does not apply;
      (B) the defendant did not act with reckless
      disregard of the source of the funds;
      (C) the funds were the proceeds of lawful
      activity; and (D) the funds were to be used
      for a lawful purpose, decrease the offense
      level to level 6.

      The Probation Office applied § 2S1.3(b)(2),
      and decreased the defendant's offense level
      to 6. (February 27, 2007 Revised Presentence
      Report and Addendum, ¶35).

      The United States did not object to this calculation; however, consideration of this provision's application to this case,
      and the concomitant reduction in the guidelines range, should
      not stop there.

      2. The Guidelines Range Underrepresents the Seriousness of the
      Crimes Committed Factually, application of this provision is arguable.

      An issue exists as to whether § 2S1.3(b)(2)(D) constitutes a
      true statement in regard to this case. The defendant withdrew
      cash funds for the specific unlawful purpose of paying CSE
      employees "under the table," outside the reach of the IRS,
      and without withholding taxes from the pay.

      Therefore, though the "lawful" purpose utilized in the application
      of this Guidelines provision was to pay employees, the act of payment was done in violation of law.

      2
      The question of § 2S1.3(b)(2)(D)'s application
      to this case is a close one and without precedent
      under these unusual facts. Therefore, the United
      States, having the burden to justify the
      calculations, did not challenge the application
      of § 2S1.3(b)(2).

      However, the true purpose of the cash transactions conducted
      by the defendant, is a factor for the Court to consider in
      weighing sentencing options, including a variance or an
      upward departure.

      a. Guidelines Departure

      Section 5K2.9 allows for departures from the Guidelines
      range where "the defendant committed the offense in order
      to facilitate or conceal the commission of another offense..."
      U.S.S.G. § 5K2.9.

      Departure from the range mandated by the Sentencing Guidelines
      is warranted based upon a finding by the court "that there
      exists an aggravating ... circumstance of a kind, or to a
      degree, not adequately taken into consideration by the
      Sentencing Commission in formulating the guidelines that
      should result in a sentence different from that described."
      18 U.S.C. § 3553(b); United States v. Valle, 929 F.2d 629
      (11th Cir.1991) (per curiam).

      The three-step analysis set forth in Valle begins with the
      question of whether the Guidelines adequately consider a
      particular factor so as to preclude the court from relying
      on it as a basis for departure.

      Second, the court determines whether there exists sufficient
      factual support for the departure. 18 U.S.C. § 3742(e).

      The final step is to determine whether the extent of the
      departure was reasonable (§ 3742(e)(3)) "giv[ing] due regard
      to the opportunity of the district court to judge the
      credibility of the witnesses ... and giv[ing] due deference
      to the district court's application of the guidelines to the
      facts." 18 U.S.C. § 3742(e); Valle, 929 F.2d 629.

      As shown at trial, the crimes of conviction were carried out
      for the sole purpose of facilitating the tax evasion crimes
      committed by husband and co-defendant Kent Hovind.

      Though the defendant was not charged with either conspiracy
      to commit tax crimes or with aiding and abetting such crimes,
      the evidence at trial would have supported such charges.

      Certainly, through the testimony of witnesses such as Brian
      Popp, Diane Cooksey, Darlene Porter, Thomas Pope, and David
      Gibbs, the documentary evidence showing the defendant's
      involvement in the financial and business aspects of CSE,
      the constant contact with the IRS, the production of
      anti-tax videos on the premises, the defendant's failure
      to file tax returns on her own behalf or on behalf of the
      businesses, and the outspoken beliefs of her husband
      relating to taxes, the Government proved her knowledge
      of the purpose of the cash withdrawals.

      The Guidelines are based solely upon the defendant's structuring acts, and do not take into consideration her participation in
      the tax schemes with which Kent Hovind was charged.

      Tax charges would have resulted in a Guidelines range higher
      than 0-6 months, and no adjustments for these crimes were
      applied to the defendant.

      Therefore, this is a factor not adequately taken into account
      in the 2001 version of the Sentencing Guidelines, and it is a
      valid reason for an upward departure.

      b. Section 3553(a) Variance

      The court may also fashion a sentence above the advisory
      Guidelines range based upon § 3553(a) factors, and in
      particular, subsections (a)(2)(A) and (B): "the need for the
      sentence imposed (A) to reflect the seriousness of the offense,
      to promote respect for the law, and to provide just punishment
      for the offense; [and] (B) to afford adequate deterrence to
      criminal conduct." 18 U.S.C. § 3553(a)(2)(A)&(B).

      Significant in consideration of these provisions is the history
      of the applicable Guidelines section, § 2S1.3. The key
      subsections cited above from the November 2001 Guidelines Manual, used to calculated the defendant's 0-6 month range, was amended
      in 2002. Those amendments remain in place through the most recent 2006 Manual. The Amendment 637, Supplement to Appendix C (Nov. 1, 2002) states the purpose of the enhancement was to give effect to
      the enhanced penalty provisions under 31 U.S.C. § 5322(b).

      9
      new version of Section 2S1.3(b) now reads as follows:
      (b)(2) If the defendant (A) was convicted of an offense
      under subchapter II of chapter 53 of title 31, United
      States Code; and (B) committed the offense as part of
      a pattern of unlawful activity involving more than
      $100,000 in a 12-month period, increase by 2 levels.

      (3) If (A) subsection (a)(2) applies and subsections
      (b)(1) and (b)(2) do not apply; (B) the defendant did
      not act with reckless disregard of the source of the
      funds; (C) the funds were the proceeds of lawful activity;
      and (D) the funds were to be used for a lawful purpose,
      decrease the offense level to level 6. U.S.S.G. § 2S1.3
      (b)(2)-(3).

      As seen in the comparison, the Guidelines were changed
      to reflect an acknowledgment of the increased seriousness
      of structuring crimes in cases in which more than $100,000
      was laundered.

      4
      Here, that amount, around $1.5 million from 1999
      through August 2002, far exceeds the mark set for
      a 2-level enhancement under subsection (b)(2).
      That Guidelines provision took effect in November
      2002, just three months after the defendant's last
      act of structuring in August 2002. That three-month
      period resulted in an 18-level benefit for the
      defendant – from an offense level 24 to an offense
      level 6 – not on the basis of any conduct or
      substantive factor, but solely on the basis of which
      Guidelines manual was used. This type of windfall
      based upon serendipitous offense timing should not
      play so large a role in fashioning a just sentence,
      and justifies a sentence above the Guidelines range.

      In addition, the United States avers that a Guidelines
      sentence would not be sufficient to promote respect for the
      law or afford deterrence from criminal conduct. This
      high-profile tax case featured flagrant and vocal
      violation of tax laws.

      Certainly, the vast majority of such behavior emanated from
      Kent Hovind, and the Court has heard some evidence that Jo
      Hovind attempted to discourage the anti-tax behavior.

      However, the defendant was a willing, active and essential participant in the scheme.

      To sentence her in the Guidelines range would provide little deterrent to anyone considering aiding illegal anti-tax
      activity such as that which was undoubtedly furthered by
      the defendant's conduct.

      In any given case, including the present one, a very wide
      range of reasonable sentences exist from which the district
      court may choose. Amedeo, 2007 WL 1500184 at *7; Talley,
      431 F.3d at 786.

      The Government does not dispute that the court would act
      reasonably and within its broad discretion if it imposed
      a guidelines sentence in this case.

      Similarly, given the facts present here, the Government
      submits it is beyond dispute that the court would act
      reasonably and within its broad discretion if it imposed a significantly above-guidelines sentence in this case.

      For all of the above reasons, the Government's position is
      that an above-guidelines sentence is appropriate, and the
      United States respectfully requests that the Court consider
      all of above in fashioning an appropriate sentence.

      Respectfully submitted this 22nd day of June, 2007.

      GREGORY R. MILLER
      United States Attorney

      /S/ Michelle M. Heldmyer
      MICHELLE M. HELDMYER
      Assistant United States Attorney
      Florida Bar No. 616214
      Northern District of Florida
      21 East Garden Street, Suite 400
      Pensacola, Florida 32502-5675
      (850) 444-4000

      CERTIFICATE OF SERVICE

      I hereby certify that a copy of the fore-going has been
      delivered via the CM-ECF filing and/or by U.S. mail to:
      Jerold W. Barringer, counsel for Jo D. Hovind, and Alan
      Stuart Richey, counsel for Kent E. Hovind, on this 22nd
      day of June, 2007.

      /S/ Michelle M. Heldmyer
      MICHELLE M. HELDMYER
      Assistant U.S. Attorney

      -----------------------------------
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