United States v. Harness

Citation: Not availableDocket: 98-6157

Court: Court of Appeals for the Eleventh Circuit; July 12, 1999; Federal Appellate Court

Original Court Document: View Document

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Kelly D. Harness was sentenced to twenty-seven months in prison for his involvement in diverting federal funds intended for individuals at risk of eviction, specifically through the Emergency Shelter Grant Program administered by the City of Huntsville, Alabama, in partnership with the American Red Cross. Harness, an accountant and Director of Project Happen, misappropriated over 150 checks, using funds for personal debts, including a significant $24,000 payment diverted for a van. Along with co-defendants James and Jill Holland, he falsified records and payments to mask their fraudulent activities, which collectively exceeded $100,000. Although Harness pleaded guilty to five charges and cooperated with the prosecution against the Hollands, the district court enhanced his sentence for his aggravating role in the crime and for abusing a position of trust. The court rejected a government request for a reduced sentence based on his cooperation. The appellate court found the enhancement for his aggravating role inappropriate and vacated the sentence, remanding for resentencing.

Harness did not contest the findings or sentencing recommendations in his presentence investigation report (PSR) and failed to object post-sentencing, leading to his appeal being constrained to a plain error standard of review. Under this standard, an error must be evident, affect substantial rights, and be correctable. Harness argues that the district court improperly increased his offense level by two levels under U.S.S.G. 3B1.1(c) for his alleged aggravating role. The court's enhancement was found to be erroneous as the enhancement requires the defendant to have organized, led, managed, or supervised another participant in the criminal activity, which Harness did not. The probation officer's recommendation incorrectly applied section 3B1.1(c) by focusing on Harness's management of the victim organization's assets rather than on his control over another participant, which is necessary for such an adjustment. The district court attempted to justify the enhancement by stating Harness was a leader in a criminal activity involving multiple participants, but this assertion lacked the required evidence of control over another participant, further supporting the conclusion that the enhancement was incorrectly applied.

Findings in the Presentence Report (PSR) indicate no evidence that Harness controlled other participants in the criminal activities, leading to the conclusion that he was not an organizer, leader, manager, or supervisor. Consequently, the district court's enhancement of Harness's sentence under section 3B1.1(c) is deemed erroneous and plain, affecting his substantial rights as he was sentenced at the maximum range. The sentence is vacated, and the case is remanded for resentencing.

Regarding the enhancement for abusing a position of trust under U.S.S.G. 3B1.3, the court found that Harness misused his role as the Director of Project Happen at the Red Cross, responsible for handling HUD funds. Although Harness argued he did not abuse a position of trust regarding the government, the PSR identified the Red Cross as the victim, noting Harness diverted approximately $20,000 from them. He did not object to this identification, allowing the court to apply the enhancement. The conclusion that Harness abused a position of trust in relation to the Red Cross was upheld, affirming the two-level enhancement.

Finally, Harness's claim regarding the denial of a downward departure under U.S.S.G. 5K1.1 is dismissed for lack of jurisdiction.

A sentencing court may grant a downward departure if a defendant has provided substantial assistance in investigations or prosecutions, as outlined in U.S.S.G. 5K1.1. In this case, the government moved for such a departure, but the district court, while acknowledging its discretion, decided against it. According to established case law, a district court's denial of a downward departure is not subject to appeal unless it stems from a misunderstanding of its statutory authority to do so. The district court confirmed its understanding of its discretion but opted not to exercise it. Consequently, the appellate court lacks jurisdiction to review this decision. Regarding the adjustment for an aggravating role under U.S.S.G. 3B1.1(c), the appellate court found no evidence supporting such an adjustment. As a result, Harness's sentence is vacated, and the case is remanded for resentencing.