Case 4:15-cr-00300-BRW Document 140 Filed 10/25/16 Page 1 of 22 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF ARKANSAS ) UNITED STATES ) ) v. ) CRIMINAL NO. 4:15-cr-00300-BRW ) THEODORE E. SUHL ) ) DEFENDANT S SENTENCING MEMORANDUM Having successfully advocated before this Court that Ted Suhl s alleged co-conspirators receive Guidelines Range sentences of 24 and 30 months for their participation in the same scheme for which Mr. Suhl has been convicted, the government now contends that the Court should put those sentences out of mind and sentence Mr. Suhl to a term of imprisonment of 188-235 months that is, a sentence six to ten times longer than either co-conspirator (and three to four times longer than their combined sentences). The government s proposal is contrary to sentencing law and policy, fairness, and common sense, which is why the government has not provided the Court with a plausible basis to reconcile its position with a fundamental principle of sentencing expressed by 18 U.S.C. 3553(a)(6): to avoid unwarranted sentence disparities among defendants with similar records who have been found guilty of similar conduct. Mr. Suhl recognizes that his convictions are serious. That is why they correspond to a substantial term of imprisonment under the Sentencing Guidelines notwithstanding that he has never before been found guilty of any crime. He does not shy away from the fact that, having put the government to its proof at trial, basic fairness dictates that his sentence should be greater within reasonable limits than those of Mr. Carter and Mr. Jones, both of whom received sentencing reductions for acceptance of responsibility. Mr. Suhl respectfully submits that a term of imprisonment of 33 months is sufficient, but not greater than necessary, to comply with the
Case 4:15-cr-00300-BRW Document 140 Filed 10/25/16 Page 2 of 22 purposes of sentencing. 1 A term of 33 months corresponds to the low-end of the Guidelines Range, 2 which is consistent with the Court s sentencing of Mr. Carter and Mr. Jones, at a higher offense level for Mr. Suhl, reflecting that Mr. Suhl will not receive credit for acceptance of responsibility and will receive an enhancement for obstruction of justice on the basis of his trial testimony. This sentence provides sufficient general and specific deterrence (as did Carter s sentence of 24 months and Jones s sentence of 30 months), and properly weighs the history and characteristics of Mr. Suhl, including his significant contributions to his community. Most importantly, a sentence of 33 months avoids unnecessary and undue disparity in the sentencing of three individuals that carried out the same scheme. Sentencing Mr. Suhl to a term of imprisonment six to ten times more than Mr. Carter would not be proportionate. This Court and this Court alone has the awesome authority and wisdom to impose a reasonable and proportionate sentence, and Mr. Suhl respectfully urges it to do so by imposing a sentence of 33 months of imprisonment. RELEVANT BACKGROUND I. THE DEFENDANT S BACKGROUND Mr. Suhl moved with his parents, Bud and Shirley Suhl, to Northeast Arkansas when he was 10 years old, and he has resided there nearly his entire life. Mr. Suhl learned at an early age how fortunate he was not only to have a close-knit and loving family, but to have the financial means to do well by his family and others in need. He learned that many people are not so fortunate. His own father, Bud, never knew his father and was raised in poverty. 1 See 18 U.S.C. 3553(a). 2 As properly calculated and applied to Mr. Suhl, as explained herein. 2
Case 4:15-cr-00300-BRW Document 140 Filed 10/25/16 Page 3 of 22 Mr. Suhl witnessed and participated in his parents extensive work to promote Christian ministries, especially in prisons and countries around the globe. He learned enduring lessons during his family s trips to an orphanage in Mexico to provide support and basic necessities to children that were much less fortunate than him. The Suhl family s commitment to helping less fortunate children led to Bud and Shirley beginning to take a small number of troubled children into their own home, to live with Ted and his siblings as members of the Suhl family. Because the Suhl family made such a positive impact on the lives of the children they took into their home, it was not long before more families heard of the Suhls and started calling to ask for help for their children. Although Bud and Shirley had never envisioned transforming their efforts into a business, they came to realize that applying for licenses and organizing companies would enable them to help many more children with behavioral and mental challenges who had treatment needs that were going unmet. Over the years, the Suhls built a successful inpatient treatment company called The Lord s Ranch (now called Trinity Behavioral Health) and an outpatient treatment company called Arkansas Counseling Associates. Mr. Suhl attended Wheaton College near Chicago, Illinois. He followed in his parents footsteps as a young adult, ministering to inmates in the Cook County jail every Sunday. After college, Mr. Suhl did not immediately join the family business, and instead pursued a career in financial services. After a few years working as a banker, however, Mr. Suhl returned to Arkansas and to the family business. His mission became to operate Trinity and ACA to provide the highest quality care possible to thousands of Arkansas children and to support the hundreds of talented and dedicated staff the companies were fortunate enough to attract and employ. Prior to losing Medicaid funding in November 2014, Trinity and Arkansas Counseling Associates employed more than 560 staff and provided care to more than 3,000 children throughout Arkansas. 3
Case 4:15-cr-00300-BRW Document 140 Filed 10/25/16 Page 4 of 22 Mr. Suhl has continued to follow his parents tradition of generosity and promotion of Christian charity. Mr. Suhl has individually and jointly given almost always anonymously more than $1.5 million dollars to non-profits and Christian organizations since 2002. 3 In addition, and as attested to by the numerous letters submitted to the Court in support of Mr. Suhl attached as Appendix A to this memorandum, Mr. Suhl has quietly and consistently provided generous support to employees and members of the community in their times of greatest need without desire for recognition. II. THE OFFENSES The government indicted Mr. Suhl in December 2015 on six felony counts including honest services wire fraud, federal funds bribery, conspiracy, and violation of the Travel Act. The government s first act after filing the indictment was to move to consolidate Mr. Suhl s case (at that time, assigned to Judge Holmes) with the cases of Mr. Jones (already before this Court) and Mr. Carter (assigned to Judge Marshall). The government sought consolidation because all three cases involved the same alleged course of conduct and criminal conspiracy. 4 By that time, Mr. Jones had pled guilty to one count of conspiracy to commit federal funds bribery and honest services wire fraud and one count of federal funds bribery, and Mr. Carter had pled guilty to one conspiracy count. Consolidation would therefore also permit the same judge to sentence Carter, Jones, and Suhl (if convicted). Consolidation was granted. This Court set the sentencings of Carter and Jones for February. The government requested a within Guidelines Range sentence of 24-30 months for Carter corresponding to an offense level of 17, noting that Carter had been undoubtedly corrupt for a lengthy period of 3 See Ex. 1. 4 ECF No. 2, at 1 (emphasis added). 4
Case 4:15-cr-00300-BRW Document 140 Filed 10/25/16 Page 5 of 22 time while serv[ing] in public positions for most of his professional career. 5 The government requested a low-end of the Guidelines Range sentence of 30 months for Jones corresponding to an offense level of 19, noting that a key objective of sentencing corrupt public officials in particular should be deterring other public officials from engaging in similar misconduct. 6 In both cases the government asserted that the requested sentences were sufficient but not greater than necessary to comply with the purposes of sentencing set forth in 3553(a), including reflecting the seriousness of the offenses, promoting respect for the law, and deterring similar misconduct (especially by other public officials). The Court sentenced Carter to 24 months and Jones to 30 months. At trial in July, the jury convicted Mr. Suhl on two counts of honest services wire fraud, one count of federal funds bribery, and one count of violation of the Travel Act. The jury acquitted Mr. Suhl on one count of conspiracy to commit federal funds bribery and honest services wire fraud and one count of honest services wire fraud. LEGAL STANDARD While the first step in sentencing is a correct calculation of the advisory Sentencing Guidelines Range, district courts may not presume that the Guidelines Range is reasonable. 7 A district court must also consider each of the 18 U.S.C. 3553(a) factors to tailor the sentence to fit the individual circumstances of each case. 8 5 United States v. Carter, No. 4:15-CR-00234-BRW, ECF No. 20, at 3, 6. 6 United States v. Jones, No. 4:14-CR-00197-BRW, ECF No. 30, at 2, 12. 7 See, e.g., Nelson v. United States, 129 S. Ct. 890, 891-92 (2009) (per curiam). 8 United States v. Booker, 543 U.S. 220, 245 (2005). 5
Case 4:15-cr-00300-BRW Document 140 Filed 10/25/16 Page 6 of 22 ARGUMENT Of the four enhancements to Mr. Suhl s offense level recommended by the Presentence Investigation Report (PSR) filed in this case, Mr. Suhl challenges only one: the proper calculation of the loss amount. 9 For the reasons explained below, a correct calculation of the loss amount results in a final offense level for Mr. Suhl of 20, which is higher than the offense levels for Carter (17) and Jones (19). Because Mr. Suhl has no criminal history, an offense level of 20 corresponds to a term of imprisonment of 33-41 months. Mr. Suhl respectfully submits that a low-end of the Guidelines Range sentence of 33 months is appropriate based on the 3553(a) factors and his history of generosity and support of the community. This sentence will, within reasonable limits, punish Mr. Suhl more harshly than his alleged co-conspirators Jones and Carter, and it will fulfill the purposes of sentencing. I. APPLICATION OF THE UNITED STATES SENTENCING GUIDELINES A. There Is Agreement on All Enhancements Other Than the Loss Amount. Mr. Suhl agrees with the probation office and the government that, prior to consideration of the loss amount, his adjusted offense level is 20, consisting of (a) a base offense level for the offenses of conviction of 12, (b) a two-level increase because the offense involved more than one bribe, (c) a four-level increase because the offense involved an elected public official or a public official in a high-level decision making position, and (d) a two-level increase for obstruction of justice. B. Proper Calculation of the Loss Amount. USSG 2C1.1(b)(2) specifies four methods for calculating the loss amount for the purposes of sentencing: (1) the value of the payment, that is, the bribe amount or aggregate bribe amounts; (2) the benefit received or to be received in return for the payment; (3) the 9 See USSG 2C1.1(b)(2), 2B1.1(b)(1). 6
Case 4:15-cr-00300-BRW Document 140 Filed 10/25/16 Page 7 of 22 value of anything obtained or to be obtained by a public official or others acting with a public official; or (4) the loss to the government from the offense. The district court applies whichever value is greatest. 10 The government bears the burden of supporting its loss calculation with reliable and specific evidence. 11 The only measures that could theoretically apply in this case are the value of (1) the payments, or (2) the benefits or things of value to be received or obtained, i.e., intended benefits. The other possible measures do not apply because it is undisputed that the offenses caused no loss to the government and did not cause Mr. Suhl to receive a single cent of wrongful additional business or improper Medicaid payments. 12 The calculation of any expected benefit cannot be purely speculative. 13 There must be a reasonable estimate of the intended loss that the defendant was attempting to inflict. 14 1. The Court has previously recognized that the correct measure of the loss amount is the value of the alleged bribes. The Court has already sentenced Mr. Carter and Mr. Jones for the same scheme for which Mr. Suhl has been convicted. In each case, the Court correctly found that the greatest value of the loss amount pursuant to USSG 2C1.1(b)(2) was the aggregate value of the payments rather than a benefit intended (but unrealized) by Suhl, Carter, or Jones. When the Court applied that method to calculate the loss, it valued the payments at between $6,500 and $15,000 and 10 USSG 2C1.1(b)(2). 11 United States v. Ring, 811 F. Supp. 2d 359, 375 (D.D.C. 2011) (emphasis added) (quoting United States v. Gupta, 463 F.3d 1182, 1200 (11th Cir. 2006)); see also, e.g., United States v. Richey, 758 F.3d 999, 1002 03 (8th Cir. 2014). 12 See Trial Tr. 441:5 6 ( MR. KELLER: Your Honor, we re not saying that any of that Medicaid money is illegitimate. ). 13 United States v. Roussel, 705 F.3d 184, 201 (5th Cir. 2013). 14 Id. (citation omitted). 7
Case 4:15-cr-00300-BRW Document 140 Filed 10/25/16 Page 8 of 22 enhanced the offense levels of Carter and Jones by two levels. 15 To Suhl s knowledge, it was never suggested by the government, counsel for Carter or Jones, the probation office, the Court, or anyone else in the time between Mr. Jones pleading guilty in October 2014 and the February 2016 sentencings of Carter and Jones that any other method for calculating loss, including the value of intended benefits, would yield a greater loss amount than the alleged $6,500 to $15,000 in payments. Nor was any such suggestion made in the two months following the filing of the December 2015 Indictment of Mr. Suhl, notwithstanding that it contained allegations more detailed than those found in the criminal Informations for Carter and Jones. The same value of payments method of calculation should apply to Mr. Suhl. The measure of the value should be slightly less, however, because of Mr. Jones s testimony at trial that the aggregate value of the bribes was actually between $4,000 and $6,000, 16 and the jury s verdict finding Mr. Suhl guilty of two counts of honest services wire fraud predicated on two checks of $2,000 to the Fifteenth Street Church of God in Christ (for a total of $4,000). Under the fraud loss table, bribes totaling $6,500 or less do not increase a defendant s overall offense level. 17 Accordingly, Mr. Suhl s offense level should remain 20. 18 The government s claim that the Court should apply an entirely different intended benefit methodology to Mr. Suhl instead of the value of payments methodology applied to his alleged 15 No. 4:15-CR-00234-BRW, ECF No. 26, at 6 (Transcript of Carter Sentencing Hearing); No. 4:14-CR-00197-BRW, ECF No. 36, at 3, 4-5 (Transcript of Jones Sentencing Hearing). 16 See Trial Tr. 503:15-16, 528:19-20. 17 USSG 2B1.1(b)(1). 18 If, notwithstanding Jones s trial testimony, the Court values the bribes at more than $6,500 but less than $15,000 as it did in Carter and Jones s cases, Mr. Suhl should receive a two level enhancement to an offense level of 22, which would correspond to a Guidelines Range of 41-51 months. Even in that case, however, Mr. Suhl respectfully submits that 33 months remains the appropriate sentence considering the 3553(a) factors. 8
Case 4:15-cr-00300-BRW Document 140 Filed 10/25/16 Page 9 of 22 co-conspirators Carter and Jones is contrary to the directives of the Sentencing Guidelines. In a footnote, the government asserts that the Court should apply a different methodology to Suhl than it applied to Carter because Carter was a middleman who passed money but could not have benefited from Suhl s profits. 19 The government also contends that Suhl can be treated differently from Jones because Jones did not stand to benefit from [Suhl] s future profits and never intended to actually take any of the actions that [Suhl] sought and paid for. 20 The government s claims are foreclosed by the Sentencing Guidelines because USSG 2C1.1(b)(2) requires using the greater of the value of the payments or the value of anything obtained or to be obtained by a public official or others acting with a public official. For sentencing purposes, the measure of any intended benefits must be the same for Suhl, Carter, and Jones even if their roles differed, and the Court has previously determined that the value of the payments is greater than the value of the intended benefits. The government also contends that for Suhl s sentencing the Court should calculate the value of the payments to be $29,500 (several times the total payments amounts the Court calculated for Carter and Jones). That is the total amount of all of the checks to the Fifteenth Street Church cited in the December 2015 Indictment of Suhl. However, applying that amount would be contrary to the jury s verdict acquitting Mr. Suhl of the conspiracy count (which charged Mr. Suhl in relation to $23,500 in checks to the church during a pre-statute of limitations time period) and one count of honest services wire fraud (predicated on a September 2010 check to the church for $2,000). It would be contrary to Jones s trial testimony that the bribes totaled 19 ECF No. 135, at 2-3 n.2 (emphasis added). The government makes this proposal even while alleging that Carter shared Suhl s corrupt intent as a co-conspirator and eagerly relayed (rather than was ignorant of) Suhl s requests of Jones. 20 ECF No. 135, at 3 n.2. 9
Case 4:15-cr-00300-BRW Document 140 Filed 10/25/16 Page 10 of 22 less than $6,000. And it would be contrary to the government s submissions in February 2016 for the sentencings of Jones and Carter, keeping in mind that (1) Jones and Carter pled guilty to conspiring with one another and Suhl, and (2) the government had alleged and cited the $29,500 in checks in the December 2015 Indictment of Suhl two months prior to the sentencings. For those reasons, and for the reasons stated in Mr. Suhl s Rule 29 motion at the close of evidence and his counsel s closing arguments at trial that are incorporated by reference but not repeated herein, this Court should not find by a preponderance of evidence that the value of the intended bribes was $29,500. The government s final purported justification for applying a disparate loss calculation methodology to Suhl also rings hollow. The government claims that the evidence demonstrating the profits received by [Suhl] s companies during the bribery scheme was not fully developed until the government s preparation for [Suhl] s trial; thus, the figures had not yet been analyzed and calculated at the time of the cooperators pleas and sentencings. 21 However, two months prior to the sentencings of Carter and Jones, the government alleged in the Indictment of Suhl that, during the years of the alleged conspiracy, Suhl s companies received more than $90 million in Medicaid reimbursements through the Arkansas Department of Human Services. 22 It is not credible for the government to claim that it could not have proven in February 2016 that the profits of Suhl s companies on $90 million in revenue exceeded the, at most, $15,000 in alleged payments (or 0.0167% of $90 million) calculated for Carter and Jones if that was the loss theory the government believed should apply. After years of investigation, the government had at its fingertips all of the information necessary to calculate such profits. Yet, 21 ECF No. 135, at 3 n.2 (emphasis added). 22 ECF No. 1, 1 (emphasis added). 10
Case 4:15-cr-00300-BRW Document 140 Filed 10/25/16 Page 11 of 22 the government never advised the Court that another loss methodology should apply, and it did not seek a continuance of the sentencings of Carter and Jones on the basis that additional time was required to calculate the profits to avoid legal error in sentencing. The government s brief quotes a passage from United States v. Edwards stating that it would be an illogical consequence if a court s measure of loss led to identical Guidelines offense levels for... schemes of vastly different proportions because the loss amount enhancement is intended to assign harsher sentences to defendants who participate in more harmful crimes. 23 But the government gets the wisdom of that reasoning exactly backwards in proposing strained interpretations of the loss provisions in an effort to prevent Mr. Suhl from receiving identical treatment to Carter and Jones under the Sentencing Guidelines for participation in the same scheme (not a different or more harmful one). For these reasons, the Court should sentence Mr. Suhl in a manner consistent with how it sentenced Mr. Carter and Mr. Jones and calculate the loss amount based on $4,000 to $6,000 in alleged bribe payments. 2. The entire amount of profits earned by Mr. Suhl s companies from 2008 to 2011 is an incorrect measure of the applicable loss. The PSR errs in proposing that the Court enhance Mr. Suhl s offense level by sixteen levels on the basis that every dollar of profit of Suhl s companies from 2008-2011 ($1.84 million) should be considered loss amounts. For the sake of comparison, that loss amount is higher than the loss amount that would have resulted if Mr. Suhl had hypothetically paid bribes in exchange for all but one of the Arkansas Department of Human Services Medicaid reimbursements paid to his company (totaling tens of millions of dollars in revenue) for 23 496 F.3d 677, 682 (D.C. Cir. 2007). 11
Case 4:15-cr-00300-BRW Document 140 Filed 10/25/16 Page 12 of 22 treatment of thousands of patients over a four year period (in which case the profits from the untainted reimbursement could not properly be included in the loss amount). The PSR claims that the benefit to be received in return for the defendant s bribe payments was Mr. Jones s protection and facilitation of revenue from the Arkansas Department of Human Services. As an initial matter, that conclusion is legally flawed because the intended benefit for Suhl can only be the result of the official acts he allegedly requested, and mere protection is not an official act as clarified by the Supreme Court in McDonnell v. United States. 24 From a factual standpoint, Suhl never sought Jones s general protection and facilitation, and even if he had, it simply does not follow that Suhl would have had a subjective belief that every single dollar of his company s profits was in danger without it. Mr. Suhl s companies were very profitable long before Jones was ever appointed to the Department of Human Services. 25 The PSR seems to rely on statements from the government s closing arguments, but those arguments are not evidence. They are also contrary to the charging theory of the Indictment, which is that Suhl made payments in exchange for Jones agreeing to look into discrete items (not for unbounded protection) without alleging any tangible or quantifiable benefit attributable to those items. If the Indictment had quantified any intended benefit, this Court would have considered it when sentencing Carter and Jones. As the government stated in 24 The Supreme Court clarified in McDonnell that an official act has two requirements: (1) the government must identify a question, matter, cause, suit, proceeding or controversy that may at any time be pending or may by law be brought before a public official, and (2) the Government must prove that the public official made a decision or took an action on that question, matter, cause, suit, proceeding, or controversy, or agreed to do so. McDonnell v. United States, 136 S. Ct. 2355, 2368 (2016) (quoting 18 U.S.C. 201(a)(3)). A public official s agreement to provide general protection is not a decision or action on a pending question, matter, cause, suit, proceeding or controversy. 25 Moreover, not all of the payments to Suhl s companies came from Arkansas Medicaid. Suhl s companies also received payments from private individuals and Alaska Medicaid. 12
Case 4:15-cr-00300-BRW Document 140 Filed 10/25/16 Page 13 of 22 closing argument, its theory was that Suhl ask[ed] Steve Jones to fix [Suhl s] problems and he was paying him to try to get him to do it, 26 not that Suhl ever thought that those discrete problems threatened all of the business already being done by his companies. The Indictment further quoted contemporaneous wiretap audio that Mr. Suhl knew how Jones [was], meaning that Suhl knew Jones would not actually follow through even if Jones said that he would help. 27 The evidence presented at trial also refutes calculation of the loss amount on this basis. Jones disagreed with the government s suggestion that he was on Suhl s payroll, and he testified that he never did anything for Suhl and that he wasn t working for Suhl. 28 Jones even testified that he could have steered some business to Suhl s companies, but he never did so, and Suhl never requested that he do so. 29 The undisputed evidence that Jones never did anything for Suhl proves that Suhl did not need any of his alleged problems solved in order to earn the $1.8 million in profits at issue. To the contrary, he earned those profits in spite of those alleged problems. 30 3. The government s alternative proposal to measure loss based on Mid- South s revenues in 2011 and 2012 is seriously flawed. The government s alternative proposal not adopted by the PSR that the loss amount can be the measure of hypothetical profits that Arkansas Counseling Associates might have earned 26 Trial Tr. 915:19-21. 27 ECF No. 1, at 157. 28 Trial Tr. 593:24 594:2. 29 Trial Tr. 586:4-15. 30 There is also nothing in the jury s findings to support the $1.8 million figure. At most, the jury found that Suhl made payments in connection with business of $5,000 or more, as required to convict on the 666 charge. 13
Case 4:15-cr-00300-BRW Document 140 Filed 10/25/16 Page 14 of 22 had it treated every single one of the children treated by Mid-South Health Systems in 2011 and 2012 fares no better. Most importantly, the hypothetical profits on Mid-South s revenues could only be considered as loss if they constituted an intended benefit of the scheme, and there is absolutely no evidence that any participant to the scheme intended for Mr. Suhl s companies to obtain all of Mid-South s patients and profits. To the contrary, the government insisted at trial that the focus of the scheme was one specific ADHS policy purportedly offering exclusive referrals to Mid- South. 31 There is no evidence Mid-South received all of its Medicaid reimbursements in Northeast Arkansas from exclusive referrals under this specific policy. In fact, newly discovered evidence from Anita Castleberry indicates none of Mid-South s business came from exclusive ADHS referrals because there are no ADHS referrals, only ADHS approvals. 32 And even if there were ADHS referrals, the government has offered no evidence as to how many of them were exclusive referrals made pursuant to the specific ADHS policy at issue. There is a distinct lack of evidence from the government regarding the full scope of Mid-South s patient population and all of the sources of its Medicaid revenue. Without such evidence, the government s hypothetical profits calculation is pure speculation and the government cannot meet its burden to prove it is a proper measure of the intended loss amount. In addition to this fundamental flaw, the government s hypothetical profits calculation also fails to account for the common-sense reality that changing the specific policy at issue from exclusive referrals to competitive referrals could not possibly transfer all of Mid-South s business to Mr. Suhl s companies. While an unknown number of Mid-South s patients might 31 See, e.g., Trial Tr. 238:10 16; 638:2 24; 902:16 18; 907:3 908:3. 32 ECF No. 138-3, at 1; see ECF No. 138-1. 14
Case 4:15-cr-00300-BRW Document 140 Filed 10/25/16 Page 15 of 22 have gone to one of Suhl s companies, many would stay with Mid-South or go to other competitors. Thus, the numbers (and associated revenues and associated profits) are speculative and cannot reasonably be quantified for sentencing purposes. The government conceded this point in its objections to the PSR, stating that there is no evidence showing exactly how much of Mid-South s business the defendant would have expropriated had his bribery scheme been successful. 33 Presumably, that is why the government did not propose this as a possible measure of the loss at the sentencings of Carter and Jones after the Indictment of Suhl. No evidence presented at trial changes these facts. At most, and as alleged in the Indictment, Suhl made one payment in September 2011 while intending that Jones would look into what he perceived as favoritism toward Mid-South. Suhl did not intend for Jones to steer even a single additional referral to Suhl s businesses. This was the last alleged payment in the allegedly years-long scheme during which Jones had never taken a single action to benefit Suhl. It is not credible that Suhl would have subjectively believed at this point in time that Jones would both (1) bring about an end to all business done by an organization that Suhl believed was favored by the other Deputy Director at the Department of Human Services (who, unlike Jones, 33 The government s reliance on the Seventh Circuit case United States v. Sapoznik, 161 F.3d 1117 (7th Cir. 1998), in support of its theory is misplaced. Although the court agreed that the criminal scheme resulted in some illegal gambling profits, the court rejected the government s position and vacated the sentence imposed by the district court because causation is different, in criminal as in civil law, from the question of quantification. Id. at 1119. The court held that the government failed to show by how much [the bribes] contributed to the profits of the illegal gambling. Id. at 1119-20. Quantifying total illegal gambling revenues was insufficient because it was a ceiling (or an at most) measure that failed to isolate the net profits attributable to the bribes. The government s hypothetical calculation that arrives at the maximum possible benefit to Suhl s companies of $177,000 (by multiplying the profit margin of Suhl s company by all of Mid-South s revenues) shares the same flaw even if it is a less egregious ceiling measurement than the one in Sapoznik. As the government has conceded, it is an unreliable measurement of the additional net profits that Suhl could have reasonably expected to receive, and it therefore cannot fairly be used to determine the loss amount for sentencing. 15
Case 4:15-cr-00300-BRW Document 140 Filed 10/25/16 Page 16 of 22 had oversight authority), and (2) steer all of Mid-South s business to Suhl s companies, especially given the presence of multiple competitors in the marketplace. 34 It is equally nonsensical for the government to claim that Suhl intended a September 2011 payment to cause all of the revenues already earned by Mid-South for treatment provided during the entire year of 2011 to somehow be retroactively transferred to Suhl s companies. II. APPLICATION OF THE 3553(A) FACTORS The 3553(a) factors also weigh in favor of a low-end of the Guidelines Range sentence of 33 months for Suhl, which is sufficient, but not greater than necessary, to comply with the purposes of sentencing. The Court already determined in sentencing Carter and Jones that low-end of the Guidelines Range sentences of 24 months and 31 months, respectively, were appropriate after consideration of the 3553(a) factors, including: (1) the nature and circumstances of the offenses; (2) the need for the sentence imposed to (a) reflect the seriousness of the offenses, (b) promote respect for the law, (c) provide just punishment for the offenses, and (d) afford adequate deterrence (especially general deterrence); and (3) the need to protect the public from further crimes. The same holds true for a low-end of the Guidelines Range sentence of 33 months for Suhl, which is higher than either Carter or Jones received for their participation in the same criminal scheme. Suhl s greater sentence will provide greater general deterrence than the sentences of Carter and Jones, especially in terms of deterring private citizens that might have 34 That notion is also contrary to the trial testimony of Suhl and his clinical director that their business plan was to obtain referrals from schools, not to compete for patients treated by Mid- South. Mr. Suhl further testified that what subjectively motivated him was the principle that patient choice was being unduly restricted, not a profit motive related to such patients. Trial Tr. 738:9 739:4; id. 738:12-13 (patients like those treated by Mid-South were only a few among thousands of patients treated by Suhl s companies). 16
Case 4:15-cr-00300-BRW Document 140 Filed 10/25/16 Page 17 of 22 considered bribing government officials. The Court also noted that a key objective of the sentences of Carter and Jones was to sufficiently deter fellow government officials from engaging in similar misconduct, 35 which is a rationale that does not require an elevated sentence for Suhl, who is not a government official. A sentence of more than 33 months is also not required to accomplish the goal of specific deterrence. Mr. Suhl has never been found guilty of any other crime and does not pose a risk of recidivism following his incarceration. Most importantly, 3553(a)(6) requires consideration of the need to avoid unwarranted sentence disparities among defendants with similar records who have been found guilty of similar conduct. As stated, Suhl, Carter, and Jones have been found guilty of participation in the same criminal scheme, and sentencing Suhl to a term of imprisonment many times greater than the terms received by Carter and Jones would create rather than avoid unwarranted sentence disparities. That is also true because Suhl compares favorably to Carter in terms of his record given that Carter had a prior felony conviction for voter fraud at the time he pled guilty in this matter, and even that history understated his true criminal history given the favorable treatment he received in exchange for his cooperation. As the Court stated when sentencing Carter, he had been undoubtedly corrupt for a lengthy period of time while serv[ing] in public positions for most of his professional career. 36 The consideration of USSG 5H1.11 (civic, charitable, or public service; record of prior good works) also weighs in favor of a low-end of the Guidelines Range sentence of 33 months. In addition to the more than $1.5 million dollars Suhl has individually and jointly donated to non-profits and Christian organizations since 2002 itemized in Exhibit 1, attached as Appendix A 35 No. 4:14-CR-00197-BRW, ECF No. 30, at 2, 12. 36 No. 4:15-CR-00234-BRW, ECF No. 20, at 3, 6. 17
Case 4:15-cr-00300-BRW Document 140 Filed 10/25/16 Page 18 of 22 to this memorandum are 30 (of many more) letters from family, friends, co-workers, professionals, religious organizations, and members of the community that attest to Suhl s devotion to the children cared for by his organizations, his employees, his family, and his community more generally. A few examples of Suhl s history of good works cited in the letters include: Mr. Suhl, and others in his amazing company, was the primary reason that Marilynn Mathews left her 35-year career as accountant and pursue[d] [her] masters in counseling at the age of 54. Her goal was to work[] for Mr. Suhl, having seen firsthand how many lives he was changing through the hundreds of caring and dedicated people that worked for him. She has observed the ongoing pro bono services Suhl has provided to children and families after losing Medicaid funding in 2014. And in performing accounting work for Suhl, Ms. Mathews witnessed Suhl s generosity toward an employee that lost everything in a tornado and another employee that wanted to move to Hawaii to be with family. Employee Dr. Rhonda Pearson has witnessed Mr. Suhl s good deeds in the community, including paying funeral costs for people that he really did not know simply to help alleviate their burden and providing housing to families affected by fires and floods free of charge until these people in [their] community could recover from their losses. Although long-time employee Sara Creecy never saw [herself] in any type of management role, Mr. Suhl saw something in [her] and he and his staff guided [her] into a position that [she] never saw possible. Ted had an ability to see the best in everyone. She also observed his support of the community, including paying funeral expenses and sponsoring little league teams. Pastor Thomas Hatley of the Immanuel Baptist Church in Rogers, Arkansas recalls that Mr. Suhl requested a meeting after he heard of Hatley s work to help[] distressed people in other parts of the world. Without any prompting from [Hatley], [Suhl] made a donation of $50,000 to assist [his] work. Rob Smith of the American Bible Society cited Ted [giving] $105,000 of his own personal funds to [the American Bible Society] to provide free Bibles to poor people, mostly in China, and the Suhl family has given more than $425,000 in all. The Suhls involvement in prison ministry inspired Mr. Smith to take up prison ministry and serve on a board for a prison ministry organization. Another employee, Tamala Looney, has observed numerous examples of Mr. Suhl providing extraordinary support to employees in need. When she experienced a stroke in 2007 and a heart attack in 2014, Mr. Suhl held her 18
Case 4:15-cr-00300-BRW Document 140 Filed 10/25/16 Page 19 of 22 position during long periods of absence and even provided her a special setup for [her] classroom (oxygen). A former patient and now successful lawyer, TK Smith, recalls that [w]hen society gave up on [him], Ted and his family did not. It was through their love, compassion, and pursuit of God s will that many youth such as [him] have become productive members of society. A teacher for Trinity, Marti Little, has observed former patients who had no future, graduate from high school and then college and pursue careers in social work or ministry. They are now making a difference because Mr. Suhl made a difference in their lives. She also recalls the Suhls buying brand new furniture and supplies for a family after the family s home was destroyed in a tornado. On numerous occasions, Mr. Suhl s accountant, Greg Young, ha[s] seen Mr. Suhl put the interests of his employees and the needs of his clients above his personal interests, even when it negatively impacted his profits from the entities he owned. He has always been willing to help his employees and those around him in any way that he could. Donald Benson Jr., a manager at Trinity, has observed that [t]he Suhls have given their lives to helping children and healing families. The Eighth Circuit has recognized that exceptional community support, generosity, and good works of this nature may support a downward departure and a below-guidelines Range sentence. 37 Mr. Suhl does not seek a downward departure on this basis if his Guidelines Range is properly calculated at 33-41 months, but he submits that it weighs in favor of a low-end of the Guidelines Range sentence of 33 months. 38 37 See United States v. Huber, 462 F.3d 945, 952 (8th Cir. 2006) (affirming downward departure based in part on extraordinary community contributions where defendant had loaned money to neighbors and fellow farmers in need, saving farms from foreclosure, and had helped finance the start-up and continuation of businesses in the local community ); United States v. Woods, 159 F.3d 1132, 1136-37 (8th Cir. 1998) (affirming one-level downward departure for defendant who had brought into her own home two troubled young women, paid for them to attend a private high school, and helped them to become productive members of society, and had also cared for an elderly friend and helped him move residences). 38 If the Court applies one of the significantly greater loss calculations, Mr. Suhl would request a downward departure on this basis, and on the ground that the loss amount would cause the Guidelines Range to substantially overstate the seriousness of the offense. See USSG 19
Case 4:15-cr-00300-BRW Document 140 Filed 10/25/16 Page 20 of 22 Mr. Suhl also does not seek a downward departure pursuant to USSG 5H1.6 (family ties and responsibilities) because he is blessed with a wonderful and supportive family and has done well financially, but he asks the Court to weigh the harm that an unnecessarily lengthy term of incarceration would have on his wife, young son and daughter, and elderly mother (who recently suffered a minor stroke). III. CONSTITUTIONAL LIMITS Given the disproportionate severity of the government s sentencing proposals, Mr. Suhl must respectfully preserve the argument that any sentence remotely approaching what the government proposes would be unconstitutional. 39 Furthermore, to the extent the Court wishes to impose a sentence greater than 33 months based on the government s speculative loss calculations, Mr. Suhl respectfully submits that the Fifth Amendment s Due Process Clause requires the government to meet a heightened standard of proof, which it cannot possibly meet. 40 5K2.0(a)(1)(A); Huber, 462 F.3d at 952; United States v. Jewell, No. 4:07-cr-00103-JLH, 2009 WL 1010877 (E.D. Ark. Apr. 15, 2009). 39 Specifically, such a sentence would violate the Eighth Amendment under Solem v. Helm, 463 U.S. 277, 290 (1983), and its progeny including Miller v. Alabama, 132 S. Ct. 2455, 2463 (2012), and the Fifth Amendment under McMillan v. Pennsylvania, 477 U.S. 79, 86-87 (1986), Townsend v. Burke, 334 U.S. 736, 741 (1948), and their progeny, see, e.g., Richey, 758 F.3d at 1003. 40 See United States v. Anderson, 243 F.3d 478, 485 86 (8th Cir. 2001) ( We have previously held that the preponderance standard may fail to comport with due process where... a sentence enhancement factor becomes a tail which wags the dog of the substantive offense. (quoting United States v. Townley, 929 F.2d 365, 369 (8th Cir.1991))); see also, e.g., United States v. Gambaryan, No. 15-50258, 2016 WL 3619984, at *1 (9th Cir. July 5, 2016) (Mem.) (vacating a sentence because the loss enhancement drastically increased the sentence and was not proved by clear and convincing evidence ). Although the panel opinion in United States v. Villareal- Amarillas, 562 F.3d 892, 898 (8th Cir. 2009), purported to overrule Anderson and a long line of prior cases (including the Eighth Circuit s en banc decision in United States v. Galloway, 976 F.2d 414, 425-26 (8th Cir. 1992)), Anderson s statement of law remains correct in light of Mader v. United States, 654 F.3d 794, 800 (8th Cir. 2011) (en banc). 20
Case 4:15-cr-00300-BRW Document 140 Filed 10/25/16 Page 21 of 22 of 33 months. CONCLUSION For the foregoing reasons, the Court should sentence Mr. Suhl to a term of imprisonment Dated: October 25, 2016 Respectfully submitted, By: /s/ Robert M. Cary Robert M. Cary Alex G. Romain Simon A. Latcovich Thomas L. Harris WILLIAMS & CONNOLLY LLP 725 Twelfth Street, N.W. Washington, DC 20005 Telephone: (202) 434-5000 Facsimile: (202) 434-5029 rcary@wc.com aromain@wc.com slatcovich@wc.com tharris@wc.com Charles A. Banks (Bar No. 73004) BANKS LAW FIRM PLLC 100 Morgan Keegan Dr., #100 Little Rock, AR 72202 Telephone: (501) 280-0100 Facsimile: (501) 280-0166 cbanks@bankslawfirm.us Attorneys for Defendant Theodore E. Suhl 21
Case 4:15-cr-00300-BRW Document 140 Filed 10/25/16 Page 22 of 22 CERTIFICATE OF SERVICE I hereby certify that on October 25, 2016, I electronically filed the foregoing with the Clerk of the Court using the CM/ECF system, which sent notifications of such filing to the following: John D. Keller Lauren Bell Amanda R. Vaughn john.keller2@usdoj.gov lauren.bell2@usdoj.gov amanda.vaughn@usdoj.gov Date: October 25, 2016 Respectfully submitted, By: /s/ Robert M. Cary Robert M. Cary WILLIAMS & CONNOLLY LLP