On April 17, 2009, almost three and a half years after a district court declined to impose the prison term recommended under the Sentencing Guidelines and imposed a probationary sentence on William Tomko for tax evasion resulting in a quarter-million dollar tax deficiency, a divided Third Circuit Court of Appeals sitting en banc affirmed the sentence by a vote of 8 to 5. While both the majority and the dissenters agreed that most of them would have sentenced the defendant differently, the majority ruled that the Third Circuit will affirm a procedurally sound sentence “unless no reasonable sentencing court would have imposed the same sentence on that particular defendant for the reasons the district court provided.” The majority also acknowledged that “[i]t will be a rare case when it is clear that no acceptable reasoning can justify a given sentence” (internal quotation marks omitted).

Tomko was the sole proprietor of a plumbing company in Pennsylvania. From 1995 to 1998, while building his own multi-million dollar home, Tomko directed a dozen subcontractors to falsify billing invoices to show that work they had performed on his house had been performed instead at one of Tomko’s local school job sites. Tomko then had his company pay the falsified invoices and illegally deduct those payments as business expenses, while Tomko never reported those payments as personal income. Tomko’s tax evasion scheme resulted in a tax deficiency of $228,557. He pleaded guilty to a one-count information charging him with tax evasion. The Sentencing Guidelines recommended a range of imprisonment between twelve and eighteen months and a fine between $3,000 and $30,000.

The district court deviated from the Guidelines by sentencing Tomko to: three years’ probation – the first year of which was to be served in home detention, participation in a four-week residential alcohol treatment program, 250 hours of community service, full restitution and the statutory maximum fine of $250,000. In support of its non-prison sentence, the district court observed that Tomko’s offense was not violent in nature, was not ongoing (even though it had spanned several years) or part of a larger pattern of criminal activity, and that there were no “identifiable victims.” The district court was impressed with Tomko’s “exceptional” charitable work and community activity, even though some post-dated the filing of the charges against him, and considered his risk of recidivism to be very low. Yet, the district court found that a fine well above the Guidelines range was necessary to provide sufficient (individual) deterrence in light of Tomko’s wealth.

On appeal, both the majority and the dissenters rejected the government’s contention that the Tomko sentence was procedurally flawed on the grounds that the district court had failed to give meaningful consideration to the goal of general deterrence, noting that the district court had heard but rejected the government’s argument on this score at the sentencing hearing. In considering the substantive reasonableness of Tomko’s sentence, the majority repeatedly stressed the deferential abuse of discretion standard of review articulated by the Supreme Court in Gall v. United States, 128 S. Ct. 586 (2007) (see the Winter 2008 issue of Day Pitney’s White Collar Quarterly) and the superior vantage point enjoyed by sentencing judges over appellate judges. For instance, the dissenters stressed “[t]he perverse irony of [Tomko’s] gilded cage confinement” in the very opulent mansion built with the fruits of Tomko’s tax evasion scheme. The majority agreed that this arrangement had “a certain unseemliness,” but noted that whether detention in a particular home is appropriate punishment is the kind of fact-bound inquiry that a sentencing court is best suited to make and that even the Sentencing Guidelines accorded such discretion to the sentencing court. The majority also viewed the risk of affirming an unwarranted sentencing disparity in Tomko’s case as “a risk we must accept” in light of the Gall decision.

The dissenters argued forcefully for a more robust review of the substantive reasonableness of sentences. For instance, they believed that Tomko’s sentence was a product of the district court’s unreasonable over-reliance on a single statutory sentencing factor – the history and characteristics of the offender – at the expense of all others. They also argued that the weight accorded by the district court to certain facts could amount to an abuse of discretion where those facts – although established in the record – were used to justify a non-Guidelines sentence even though they did not distinguish a defendant from many similarly situated defendants. In the end, however, the majority view prevailed that, in reviewing sentencing decisions, appellate courts have “a limited role.”

The full text of the Third Circuit’s 79-page decision can be found at United States v. Tomko, 556 F.3d 558 (3rd Cir. 2009).