Wednesday, May 30, 2007

Third Circuit Unpersuaded That a Need to Pay Restitution to Microsoft Justifies a Variance From the Sentencing Guidelines

In United States v. Kononchuk, No. 06-2484, (3d Cir. May 8, 2007), the Third Circuit vacated the defendant’s sentence and remanded for resentencing, finding that the district court’s sentencing variance below the Guidelines was unsupported by a “meaningful consideration” of the §3553(a) factors and failed to address the government’s specific, meritorious concerns and objections raised during sentencing.

For three years Dmitri Kononchuk, a permanent resident alien living in the U.S., sold counterfeit versions of software for which Microsoft held the copyright. Kononchuk retained the services of Maxim Dolgosheev, a minor at the outset, to help him sell the software over the internet.

Dolgosheev pled guilty to four counts of conspiracy, trademark counterfeiting and copyright infringement. Because of Dolgosheev’s cooperation with the government, his agreement to testify against Kononchuk, his minority status when the criminal activity began, and his academic success, the government advocated for a sentence of probation and restitution.

Kononchuk was later indicted under the same four counts and eventually entered a plea to the conspiracy, and acknowledged responsibility for the remaining three counts. The government advocated for incarceration during sentencing, emphasizing the sophistication and deliberateness of Kononchuk’s scheme, the dissimilarity between he and Dolgosheev, and the risk that he would be deported before paying complete restitution. However, the district court imposed the same probation sentence as it had upon Dologsheev, with the additional penalty of twelve months home detention. The government appealed Kononchuk’s sentence as unreasonably low.

The Third Circuit stated that “when the district court imposes a sentence that varies significantly from the advisory Guidelines range and a party has made objections with legal merit that the variance is unjustified by the record, the district court has an obligation to explain why the variance is justified.” The Third Circuit found that “[b]eyond its entirely rote recitation of the §3553(a) factors,” the district court’s justification of the sentencing variance by the need for Kononchuk to maintain the financial capacity to pay restitution to Microsoft was “insufficiently responsive to the government’s objections.” The Third Circuit further stated in regards to the district court’s error that “the court essentially conceded that it was subordinating the goal of just punishment (§3553(a)(2)(A)) to the goal of keeping Kononchuk employable, but it did not explain how such a subordination was justified in light of Kononchuk’s obvious deliberateness as an offender and his decision to ensnare a minor in the offense.”

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The District Court's indication of the sentence it would impose before the defendant allocuted was not reversible plain error.

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