Case 1:12-cr JTN Doc #220 Filed 04/04/13 Page 1 of 20 Page ID#1769. Plaintiff,

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1 Case :-cr-000-jtn Doc #0 Filed 0/0/ Page of 0 Page ID# IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION UNITED STATES OF AMERICA, Plaintiff, No: :cr0 0 0 vs. DENNIS MICHAEL COREY, Defendant. / Before APPEARANCES: THE HONORABLE JANET NEFF, U.S. District Judge Grand Rapids, Michigan March, 0 Sentencing Proceedings MR. PATRICK MILES, U.S. ATTORNEY By: MS. B. RENE SHEKMER 0 Ionia NW P. O. Box 0 Grand Rapids, MI On behalf of the Plaintiff; MR. DANIEL W. GROW Targowski & Grow E. Michigan Avenue Suite 0 Kalamazoo, MI On behalf of the Defendant. REPORTED BY: MS. KATHY J. ANDERSON, RPR, FCRR

2 Case :-cr-000-jtn Doc #0 Filed 0/0/ Page of 0 Page ID#0 0 0 March, 0 PROCEEDINGS, : p.m. THE CLERK: All rise, please. This court is now in session. Please be seated. THE COURT: Good afternoon, everybody. This is the date and time set for sentencing in case number :cr0, the United States of America versus Dennis Michael Corey. Counsel, may I have appearances and introductions, please. MS. SHEKMER: Thank you, Your Honor. René Shekmer on behalf of the government. THE COURT: Thank you. MR. GROW: Good afternoon. Daniel Grow on behalf of Mr. Corey who is seated to my left. THE COURT: Thank you, Mr. Grow. On December, 0, Mr. Corey appeared before Magistrate Judge Joseph Scoville and entered a plea of guilty to Count of a -count indictment in which he was named in Counts through. Count charged him with maintaining a drug involved premises within one thousand feet of a school. That offense is contrary is U.S.C. (a)(), and (b), and U.S.C. 0. The maximum potential, the minimum and maximum potential penalties for that offense are: There is a one-year mandatory minimum sentence to a potential maximum of 0 years imprisonment, and a maximum potential fine of a million dollars.

3 Case :-cr-000-jtn Doc #0 Filed 0/0/ Page of 0 Page ID# 0 0 The offense behavior can be fairly summarized as follows: Mr. Corey was an active participant with his co-defendants in a marijuana growing, preparation and distribution operation which was taking place at numerous locations, two of which were located in buildings within a thousand feet of Okemos High School. His son was one of the co-defendants involved in this enterprise. Mr. Corey says he had no expectation of financial gain, but others did benefit and expected to benefit financially from the conspiracy. Some of the participants had medical marijuana cards, including Mr. Corey, and some were Medical Marijuana Act care providers. The real motivation in this case was to take advantage of the Medical Marijuana Act for profit. The defendant says that he believed the enterprise was lawful; and in fact the way this operation was set up and organized to commercially produce marijuana for sale pursuant to the Act, I think that's probably true. The magistrate judge's report and recommendation was adopted on January, 0. There is a written plea agreement in this case which I accept. I specifically find that the charge to which Mr. Corey has entered a guilty plea does adequately reflect the seriousness of his actual offense behavior. There is also a presentence report prepared by

4 Case :-cr-000-jtn Doc #0 Filed 0/0/ Page of 0 Page ID# 0 0 United States Probation Officer Lori Hodel, who is also present in the courtroom this afternoon. Ms. Shekmer, does the government have any concerns about the facts as recited in the report? MS. SHEKMER: No. Thank you, Your Honor. THE COURT: Mr. Grow, on behalf of the defendant, is there any issue with regard to the facts in the report? MR. GROW: No, Your Honor. THE COURT: Thank you. Mr. Corey, I've got a couple of questions for you at this point. First of all, have you read the presentence report? THE DEFENDANT: Yes, I have, Your Honor. THE COURT: Have you discussed it carefully and thoroughly with your lawyer, Mr. Grow? THE DEFENDANT: Yes, I have. THE COURT: Is there anything about the report that at this time you either don't understand or about which you still have question? THE DEFENDANT: No. THE COURT: Now, Mr. Grow is I believe retained to represent you in this case. Have you been satisfied with his representation of you? THE DEFENDANT: Yes, I have. THE COURT: Very well. The presentence report includes a calculation of the guidelines and the advisory

5 Case :-cr-000-jtn Doc #0 Filed 0/0/ Page of 0 Page ID# 0 0 guidelines ranges as follows: The offense level is calculated at, the Criminal History Category is based on zero criminal history points, and those figures place Mr. Corey in Zone C of the grid where the incarceration range is to months, and as noted, there is a mandatory minimum -month custody sentence in this case. The supervised release range as calculated is two to five years, the fine range is,000 to $ million, restitution is not an issue, and there is a special assessment provision of $00. There are some objections to the scoring, and there is a very lengthy sentencing memorandum which has been filed on behalf of Mr. Corey by Mr. Grow, not frankly all of which I entirely follow the reasoning of. But the two scoring objections which I believe are made are, first, based on guideline C.(a), and that relates to the applicability of the safety valve to release the mandatory minimum sentence in this case, and for that the government has responded citing case law. The defendant also raises an issue with regard to guideline B. arguing that he should receive a four-offense level reduction for a mitigating role in the offense, although, the government is correct with regard to the C argument. It really won't make any difference because even if a mitigating role applied to reduce the advisory range below

6 Case :-cr-000-jtn Doc #0 Filed 0/0/ Page of 0 Page ID# 0 0 months, it's irrelevant because of the statutory requirement. So with that context, Mr. Grow, why don't you put your argument on the record. I'll hear from Ms. Shekmer and then I'll make a ruling. MR. GROW: Thank you, Your Honor. I think it would be appropriate for me to focus on the parts of the argument that you've suggested perhaps don't all make total sense to you. Fair enough? THE COURT: That's fine. MR. GROW: Okay. I think the other things are things that you've already disposed of or are familiar with. And the thrust of we'll call it the second half of my argument relates to the constitutional norms of federalism, the nondelegation doctrine, some issues of statutory construction, and deference to state law and traditional areas of police powers. And the important part there is I've basically suggested to the Court that Your Honor could invalidate agency action, and I have cited the statutory provisions where you could do that. And I have also explained that there is a clear and seemingly growing conflict between the state law of Michigan and other states that have adopted Medical Marijuana Act, legalization acts, various things that have increased the

7 Case :-cr-000-jtn Doc #0 Filed 0/0/ Page of 0 Page ID# 0 0 legal status of marijuana in one way or another in the various states, all of which conflict directly with federal law, as is the case here. It's my suggestion, and I'll try to make this very summary, that this Court has the ability -- because this Court has the ability to invalidate agency action, this Court could in a similar manner release Mr. Corey from the mandatory minimum as a lesser -- THE COURT: Except the mandatory minimum is established by Congress. MR. GROW: Yes. And I appreciate that distinction. And I don't have a good answer for that. But I am trying to at least give a framework to this Court where perhaps either through that framework or in the framework of a lateral departure, find a way that can allow this Court to come forward with a sentence that matches what Mr. Corey did and all the other factors that we would normally consider under Section (a). The mandatory minimum would seem to take the Court's ability away to do that. And I sought ways to give that power back to the Court. And that's really the thrust of all those arguments, Your Honor. THE COURT: Okay. Let me just hear from Ms. Shekmer.

8 Case :-cr-000-jtn Doc #0 Filed 0/0/ Page of 0 Page ID# 0 0 MR. GROW: Thank you. MS. SHEKMER: Your Honor, as the Court is aware, the mandatory minimum in this case is in fact a congressional mandate in that it is a statute passed by Congress. The safety valve, also a statute passed by Congress, applies to certain offenses, and it does not apply to the two offenses with which Mr. Corey has been convicted, both the maintaining of a drug house, and within a thousand feet of a school. So it's the government's position that the Court does not have the authority to go below the statutory mandatory minimum in this case. THE COURT: Thank you. Well, I am constrained to agree with the government here. While I might have the authority that Mr. Grow wants me to with regard to agency action, that's not what we're dealing with here. And I'm not sure that this is the right context to even make that argument. In any event, I'm bound by the statute to apply the mandatory minimum. I do not see in any of the arguments raised by the defendant a valid basis to release the mandatory minimum on the facts and circumstances of this case. And so to that extent the C.(a) argument is denied. As to the argument concerning the mitigating role, number one, I think it's moot because even if I were to grant that request, I can't go below months. And number two, I

9 Case :-cr-000-jtn Doc #0 Filed 0/0/ Page of 0 Page ID# 0 0 don't think that it applies here. Based on my understanding of Mr. Corey's role in this offense, I do not believe that he is either a minimal or minor participant in this criminal activity. And I think that's a different question from whether he believed what was being carried out was permitted -- I apologize for my coughing. I've got a terrible cold. I think that's -- I think that's distinguishable from what his actual role was. He was involved in carrying out this offense. He was the lessee of one of the buildings. He carried out certain parts of the enterprise, and I don't think you can say that his role was either minimal or minor. He might have not -- he might not be as culpable as some of the other defendants, like Mr. Basore, for instance, but I do not believe that he would qualify under any circumstances for a reduction under those circumstances. And so under B., the argument is moot in the first instance, and in the second instance it doesn't apply. So my calculations of the guidelines are the same as Ms. Hodel's, and that is: Offense level, Criminal History Category, advisory range of custody to months, of supervised release two to five years, and of fine,,000 to $ million. There is no request for a departure under the guidelines. And, again, I think even if there had been, it

10 Case :-cr-000-jtn Doc #0 Filed 0/0/ Page 0 of 0 Page ID# would be moot. And so I ask counsel if you agree that the calculations of offense level, Criminal History Category, incarceration range of to months, supervised release range two to five years, fine range,000 to $ million, whether those calculations are accurate and proper. Ms. Shekmer. MS. SHEKMER: They are, Your Honor. THE COURT: Mr. Gross. MR. GROW: Grow, Your Honor. In light of the Court's rulings, yes, Your Honor. THE COURT: Mr. Grow, are you ready for your allocution? MR. GROW: I am, Your Honor. Well, I would just like to say, Your Honor, that I have been present for many, many of the sentencings for the cases related to the cases that I have had before the Court relating to medical marijuana in Michigan. And we have heard a lot of different comments about a lot of different aspects of the Act and what position it has placed the citizens of Michigan in that decided to engage in participation in Michigan's Medical Marijuana Act. And standing before you today is, I would like, hope the Court will agree, one of the more difficult cases in terms of the total circumstances and how the factors under might apply.

11 Case :-cr-000-jtn Doc #0 Filed 0/0/ Page of 0 Page ID# 0 0 Given that we're against a statutory minimum, to a certain extent I will make my comments shorter than I might have otherwise made them. But this is a gentleman that has in all respects led an outstanding life. Someone that you would be proud to have as your neighbor, your father, someone that you would meet in church, someone who you might have an insurance policy placed with. And because of this experiment that we call the Michigan Medical Marijuana Act, he's found himself in a terribly compromised position, and it's something that in hindsight, in retrospect that he feels terrible about. And some aspects of it he feels especially terrible about, and that's to the extent that he allowed his son to become involved with this process. Some things we can only deeply regret and they can't be undone; the damage that's been done can't be undone. He's ended his insurance career because of this and it will continue to have long range impact on him and his family, Your Honor. And we would only ask this Court to be as considerate as possible in light of the factors that you're allowed to consider under, and of course we ask the Court to explore some options that might avoid the mandatory minimum, but of course Your Honor has not found merit in those.

12 Case :-cr-000-jtn Doc #0 Filed 0/0/ Page of 0 Page ID#0 0 0 As a result of that, I would rely on the remainder of my arguments set forth about Mr. Corey in my brief. And frankly the sentencing, the PSR is frankly pretty accurate in this case. There is not a whole lot that I can add to it. And I would just ask Your Honor to do the best you can. THE COURT: We are both in a tough spot, Mr. Grow. Congress has spoken and we, there is not a whole lot we can do about it. Mr. Corey, is there anything you would like to add to what Mr. Grow has argued on your behalf, has written on your behalf? I can tell you that I have read an awful lot starting with the indictment and the plea agreement, the transcript, the report, the sentencing memo and the addendums to it. I think I have a pretty good sense of who you are from all of that, but if there is anything you would like to add, this is your chance to do it. THE DEFENDANT: No, ma'am. THE COURT: Thank you very much. You may return to your seat. Ms. Shekmer on behalf of the government. MS. SHEKMER: I have nothing. Thank you, Your Honor. THE COURT: Thank you. The guidelines which are relatively modest in this case are advisory, and of course as we have heard the Court is further constrained by the mandatory minimum. The guidelines are advisory but the

13 Case :-cr-000-jtn Doc #0 Filed 0/0/ Page of 0 Page ID# 0 0 mandatory minimum is not. I do have certainly upward discretion from the guidelines but no downward discretion from the mandatory minimum. The guidelines even though advisory do require me to consider them in reaching a decision which is reflective of my basic duty to impose a sentence which is sufficient but not greater than necessary to comply with the purposes of Section (a). Now, the statute starts with the well-known balancing calculus that all sentencing I think should involve. First of all, look at the offense and how serious it is, and then look at the defendant and who he is. And as I indicated, this was a fairly sophisticated attempt to exploit the Michigan Medical Marijuana Act for profit. Defendant's role was not as extensive as that of some others, but nevertheless, it was active. He had an active role. In terms of seriousness, it really is kind of a mixed bag. There was a misguided belief among some that this undertaking was legal. We have the much quoted Holder letter drafted or at least sent out over the signature of the Attorney General, which if you don't read it carefully, I suppose, might lead you to think you could do this and get, avoid any kind of federal sanction. But the real culprit, as Mr. Grow alludes to, is

14 Case :-cr-000-jtn Doc #0 Filed 0/0/ Page of 0 Page ID# 0 0 the federal -- or is the state statute which was ill conceived right from the very beginning. But I think there should be no mistake made here. The federal government has never, I don't think, suggested that federal law would be held in abeyance or that anybody would consider that the use and possession and sale of marijuana would be considered legal under federal law. I don't think that's ever been the case. There's suggestion obviously in the Holder letter that perhaps the Department of Justice might not vigorously pursue these kinds of prosecutions, but anybody who looks carefully at what has been said and done would reach the conclusion that there is no way to believe that this kind of activity would be considered legal or acceptable under federal law. Now, the history and characteristics of Mr. Corey are pretty much as Mr. Grow has indicated: This is a -year-old married man with five adult children. He's a graduate of Michigan State University with a life-long work history, the last 0 of which have been in the insurance industry. He's honorably discharged from the United States Army. He got involved in this enterprise through his good friend, the co-defendant, Mr. Basore. And all things considered, a person that one would not anticipate or expect to run afoul of the law, and particularly not of the drug law. But the government did pursue prosecution.

15 Case :-cr-000-jtn Doc #0 Filed 0/0/ Page of 0 Page ID# 0 0 Mr. Corey did in fact plead guilty. And the statute says that I have to look at what are the purposes of sentencing and how do they apply here. I don't think we can consider deterrence or protection of the public as any relevant factor here. Punishment probably not much. Promoting respect for the law I think is perhaps the only real statutory purpose to be furthered with this sentence, mostly because somebody as capable and bright as Mr. Corey probably should have investigated more carefully before he launched into the drug business. In terms of whether there are unwarranted disparities in sentencing, I think the important thing to remember here, and Mr. Corey is the fourth out of the defendants to be sentenced, we had different offenses involved and different degrees of culpability. His son, co-defendant Kyle Corey, received a K motion, but he also received months incarceration, and pled to three counts. And was pretty actively involved in the cultivation of the marijuana plants. Mr. Karslake, who also got the safety valve consideration, was also I think significantly more culpable, but he got months and one day because he wasn't faced with a mandatory minimum. Mr. Frakes, as I think we figured out at the time

16 Case :-cr-000-jtn Doc #0 Filed 0/0/ Page of 0 Page ID# 0 0 of the sentencing in his case, was really perhaps least culpable of all, and ended up with one day with credit for time served. So trying to determine whether the disparities among the defendants were warranted or unwarranted, I think you have to look carefully at the scoring of their cases, the degree of culpability and involvement that they had, and again the mandatory minimum raises its ugly head and there is just not a way we can get around that. All of that considered and pursuant to the Sentencing Reform Act of, it's my sentence that the defendant serve one year incarceration to be followed by two years of supervised release subject to the standard conditions of reporting and remaining law abiding. We did provide a copy of the order regarding additional sentencing conditions to counsel and Mr. Corey prior to sentencing for their review. They have indicated that they have reviewed it and understand it, and I'm signing it for entry right now. The fine in this case is $,000. Interest on the fine is waived. There is a mandatory special assessment of $00. In terms of any recommendations, Mr. Grow, for the Bureau of Prisons, can I assume that Mr. Corey would like a recommendation to serve his sentence in Michigan? MR. GROW: Yes, Your Honor.

17 Case :-cr-000-jtn Doc #0 Filed 0/0/ Page of 0 Page ID# 0 0 THE COURT: Thank you. Anything else? MR. GROW: No, Your Honor. THE COURT: Thank you. Ms. Shekmer, does the government move to dismiss Counts through of the indictment as they apply to Mr. Corey? MS. SHEKMER: Your Honor, I do. And also the government has no objection to the sentence as stated by the Court. THE COURT: I did not hear that last part. MS. SHEKMER: The government has no objection to the sentence. I figured you'll get to that next and I was just answering the question ahead of time. THE COURT: Thank you. Mr. Grow, does the defendant have any objection to the sentence? MR. GROW: Nothing that we haven't already discussed, Your Honor. THE COURT: Thank you. Mr. Corey, I need to talk to you a little bit about your appellate rights in this case. And even though you have waived them in your, waived a significant part of them in paragraph 0 of your plea agreement, to the extent that you do retain any appellate rights, there are two things you need to take away from the hearing this afternoon: First of all, there will be a judgment that will enter based on what I just sentenced you to, and that judgment will be entered either today or

18 Case :-cr-000-jtn Doc #0 Filed 0/0/ Page of 0 Page ID# 0 0 tomorrow. You'll have days from then, from the entry of the judgment, to file an appeal if you wish to pursue one. And as I said, you do have some appellate rights remaining to you because you have made, Mr. Grow on your behalf has made some objections to the sentencing parameters. But you need to talk with him before you make that decision. And the second thing is that if you do decide you wish to pursue an appeal, Mr. Grow will have a duty to continue to represent you. But you need to talk with him and make that decision within a -day period. Can I assume, Ms. Shekmer, that the government has no objection to self-surrender? MS. SHEKMER: Yes, Your Honor. THE COURT: Thank you. Mr. Corey, you will be permitted to self-surrender which means that you will not be taken into custody today. You will at some point, and I don't know when that will be, but you will at some point receive notice from the Bureau of Prisons when and where to appear to begin to serve your sentence. I'm sure Mr. Grow will have the opportunity to talk further with you about that. But my counsel to you is that when you do receive that notice, you adhere to the request or the demands of the Bureau of Prisons at that time. Is there anything I have forgotten or left out, Ms. Shekmer?

19 Case :-cr-000-jtn Doc #0 Filed 0/0/ Page of 0 Page ID# MS. SHEKMER: No, Your Honor. THE COURT: Thank you. Mr. Grow. MR. GROW: Not that I'm aware of, Your Honor. THE COURT: Thank you. We are adjourned. Mr. Corey, I do wish you the best. THE DEFENDANT: Thank you. THE CLERK: All rise, please. This court is now adjourned. (Proceedings concluded, :0 p.m.) 0 0

20 Case :-cr-000-jtn Doc #0 Filed 0/0/ Page 0 of 0 Page ID# 0 REPORTER'S CERTIFICATE 0 I, Kathy J. Anderson, CSR-, Official Court Reporter for the United States District Court for the Western District of Michigan, appointed pursuant to the provisions of Title, United States Code, Section, do hereby certify that the foregoing is a full, true and correct transcript of the proceedings had in the within entitled and numbered cause on the date hereinbefore set forth; and I do further certify that the foregoing transcript has been prepared by me or under my direction. /s/ Kathy J. Anderson Kathy J. Anderson, RPR, FCRR U.S. District Court Reporter Federal Building Grand Rapids, Michigan 0 0