On Appeal from the United States District Court for the Western District of Pennsylvania
(D.C. Nos. 94-cr-00027-3 and 94-cr-00027-4)
BEFORE: SLOVITER, Chief Judge, COWEN and ROTH, Circuit Judges
(Filed February 26, 1997)
This is an appeal by the government from two judgments of sentence imposed by the United States District Court for the Western District of Pennsylvania. Defendant-appellees are Paul Haut (P. Haut) and Stephen Haut (S. Haut). Both were convicted of conspiracy to commit malicious destruction of property by means of fire (18 U.S.C. Section(s) 371). S. Haut was also convicted of mail fraud (18 U.S.C. Section(s) 1341). The district court decreased the offense levels of both defendants by 4 points, based on a finding of minimal participation. U.S.S.G., Guidelines Manual, Section(s) 3B1.2 (1995). The district court further reduced their offense levels an additional 6 points by way of a downward departure, based on a finding that the government's witnesses were not credible. U.S.S.G. Section(s) 5K2.0. *fn2
We will affirm the district court insofar as it decreased the offense levels of both P. Haut and S. Haut pursuant to section 3B1.2 (minimal participation). However, finding no legal justification in the Sentencing Guidelines for the downward departure given to P. Haut and S. Haut pursuant to section 5K2.0 et seq. (other grounds for departure), we will reverse.
This appeal challenges the sentences received by P. Haut and S. Haut for crimes arising out of the illegal burning of a bar, the Inner Harbor Lounge. The arson was accompanied by mail fraud (the U.S. Mail was used to process fraudulent fire insurance claims related to the arson) and culminated in the conviction of four defendants, Henry Henson (Henson), Agatha R. Haut (A. Haut), P. Haut, and S. Haut. The activities of Henson and A. Haut, whose sentences were not appealed by the Government, are described below to provide background and to place the actions of P. Haut and S. Haut in proper perspective.
Henson, the Vice President of the Inner Harbor, Inc. (owner and operator of the bar), was convicted of malicious destruction of property by fire (18 U.S.C. Section(s) 844(i)), conspiracy to commit malicious destruction of property by means of fire (18 U.S.C. Section(s) 371), and mail fraud (18 U.S.C. Section(s) 1341). Henson was the foremost offender in the group and his activities in the illegal enterprise were extensive. He personally set the fire and solicited a bar patron to assist him in doing so. He pondered aloud whether to "mak[e] it look like wiring." Gov't. App. at 16. He offered to burn a friend's financially troubled bookstore if the friend would help him burn the Lounge. Henson took "sick leave" from work on the three days surrounding the evening of the fire. He attempted to explain at trial that the reason for his absence from work was not his health, but unelaborated "business to take care of." III App. at 944. Several witnesses testified that of the four defendants, Henson most often brought up the subject of destroying the Inner Harbor Lounge. Finally, Henson confided to a friend that he had burned the bar and used an accelerant in the process.
A. Haut, the President of the Inner Harbor, Inc., was convicted of conspiracy to commit malicious destruction of property by means of fire (18 U.S.C. Section(s) 371) and mail fraud (18 U.S.C. Section(s) 1341). She is the mother of the three other defendants, and fully participated in discussions at the Inner Harbor Lounge in which she voiced her desire to burn down the bar. She specifically asked that various items stored in the attic of the Lounge be removed before the planned fire, and later placed those items in storage at her home.
After entering into a one-year agreement listing the Lounge for sale with a real estate agent, A. Haut abruptly contacted the real estate agent approximately six weeks before the fire. For no apparent reason, she directed the agent to cancel the contract and discontinue attempting to sell the Lounge. A. Haut purchased the fire insurance policy covering the Inner Harbor less than a month before the fire. This policy was obtained after a period of more than four years in which there was no coverage. She declined the offer of the insurance company to mail her the insurance policy covering the bar, preferring instead that it be obtained in person on the very day of the fire. On the basis of the fraudulent scheme of A. Haut, the insurance company issued a check in the amount of $100,000.
P. Haut and S. Haut are the only defendants with whom we are directly concerned in this appeal. P. Haut was convicted of conspiracy to commit malicious destruction of property by means of fire (18 U.S.C. Section(s) 371) and mail fraud (18 U.S.C. Section(s) 1341). At the direction of A. Haut, he removed some items from the Lounge prior to the fire and participated in family gatherings at which the arson was discussed. S. Haut was convicted of conspiracy to commit malicious destruction of property by means of fire (18 U.S.C. Section(s) 371). He also was present at the Lounge when the arson was discussed. The jury found that neither brother took an active role in the actual burning or benefited financially from its occurrence.
B. Proceedings in the District Court
The district court determined that the appropriate base offense level pursuant to the Sentencing Guidelines for both P. Haut and S. Haut was 20. U.S.S.G. Section(s) 2K1.4(a)(2)(B). *fn3 Both fell under Criminal History Category I, yielding a sentencing range of 33 to 41 months for each. The district court, however, granted both P. Haut and S. Haut a reduction of 4 points for minimal participation, pursuant to Guidelines section 3B1.2. In addition, the district court granted each a further 6-point downward departure by reason of the poor credibility of the government's witnesses, citing as authority Guidelines section 5K2.0. The court stated that in granting the latter reduction, it acted on its prerogative to adjudge the credibility of witnesses "for sentencing purposes." P. Haut's App. at 69.
The district court found that four of the witnesses for the prosecution were "poor . . . in terms of appearance, demeanor, recollection, candor, and lucidity," and described them as reminiscent of "the cast from the movie, Deliverance" [Deliverance depicts a coarse, brutal, and degraded group of people]. P. Haut's App. at 68. The court justified its 6-point departures based on its findings that "the clear weight of the credible evidence supports the findings and conclusions of the Court in this rather unique and bizarre prosecution." Id. at 69. In fact, the district judge related that had this matter been a bench trial, he would have found the government's witnesses to have been so lacking in credibility that he would have acquitted the defendants. The 4-point reductions for minimal participation were based on the court's determination that the involvement of both S. Haut and P. Haut was quite limited relative to Henson's and A. Haut's substantial and pervasive role in the crimes.
After the court reduced the base offense level of both S. Haut and P. Haut by 10 points, their final offense level was 10. This resulted in an applicable guideline range of 6 to 12 months. The district court imposed a sentence of 6 ...