Free Objection to Presentence Investigation Report - District Court of Arizona - Arizona

Martin Lieberman, #007442 MARTIN LIEBERMAN, P.C. 2 3839 North Third Street, Ste. 400 Phoenix, Arizona 85012 3 [email protected] Telephone: (602) 254-5544 4 Fax: (602) 254-9263
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IN THE UNITED STATES DISTRICT COURT IN AND FOR THE DISTRICT OF ARIZONA ) ) United States of America, ) ) Plaintiff, ) ) vs. ) ) ) ) Allan Guttentag (04) ) ) Defendant. _____________________________ ) presentence report: ¶¶ 9 - 27 Description of Offense Conduct Mr. Guttentag does not object to this portion of the report but believes it important to point out the following with respect to his involvement and that these facts be made part of the presentence report. The fact that this information came from the defendant and not the government does not lessen its factual accuracy. The government, as noted in the addendum to the pre-sentence report, does not oppose the defendant's position: A. Mr. Guttentag was hired by Mr. Tullo In September, 1996 - almost two years after Tullo and others started to engage in the conspiracy. B. Mr. Guttentag was hired to provide services to MB Holdings and did not do substantial work for HVAC. After Tullo and others created ABF, Guttentag also provided services for ABF. CR04-0539 PHX-MHM OBJECTIONS TO PRESENTENCE REPORT (Hon. Mary Murgia)

Counsel for Defendant, Allan Guttentag, hereby files objections to the

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C. Other than salary, Mr. Guttantag did not receive any gain nor have expectations of gain from the fraudulent scheme. The companies benefitting from the scheme were owned by others. ¶ 31 Culpability Assessment A. Although Mr. Guttentag was a CPA at the time of the offense, he did not act as a CPA or use his license to commit the crime for which he was convicted nor for the crimes for which he was charged. The government agrees. Accordingly, it is respectfully requested that the reference to Mr. Guttentag being a CPA be omitted. ¶ 36 Financial Gain Although Mr. Guttentag does not dispute the figure, it should be noted that the figure does not reflect "gain" in the traditional sense, i.e., funds directly received as a result of defrauding others. Rather, as reported by I.R.S. Agent Angela Wong, that figure represents Mr. Guttentag's salary and reimbursed expenses for his work for Mr. Tullo during a two year period, approximately $52,000 per year.1 Mr. Guttentag did not otherwise benefit from the fraud. In that sense, his financial gain is nothing. The government agrees with this position. ¶¶ 39, 40 Acceptance of Responsibility In addition to the matters presented in the pre-sentence report, the Court should be aware that Mr. Guttentag accepted responsibility long before the indictment in this matter. Mr. Guttentag cooperated with the plaintiffs (the reorganized ABF) who sued Tullo, et al, for the losses incurred by the fraud and agreed to a civil judgment to help recompense the victims. These activities are outlined in the settlement agreement (attached as Exhibit A to the plea agreement), § 2.2, pp. 3 - 5. ¶ 44 More than Minimal Planning

Mr. Guttentag also maintained an independent accounting firm during this 27 period of time and he paid rent to ABF for his office.
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The presentence report should reflect that, under the circumstances of this case, Mr. Guttentag did what he was told by Mr. Tullo. The planning for this scheme came from Tullo and others; Mr. Guttentag, while aware of the scheme after a time, was used as a functionary by them. Although there was certainly more than minimal planning by the scheme leaders, Mr Guttentag was not responsible for it. The government agrees with Mr. Guttentag's position. If the Court upholds this objection, Mr. Guttentag's Total Offense Level (¶ 51) would be reduced to 10, which places him in Zone B, and would affect ¶¶ 77 through 84 as well. ¶¶ 90-91 Departures A. The plea agreement requires cooperation. The government has moved for a departure pursuant to U.S.S.G. § 5K1.1, and, accordingly, the Court should depart downward. B. Aberrant Behavior: Given the nature of this case and Mr. Guttentag's involvement in it, this departure is probably best considered pursuant to 18 U.S.C. § 3553(a). ¶ 93 Factors pursuant to 18 U.S.C. § 3553(a) Additional factors should be included in the pre-sentence report: 1. Cooperation with representatives of the victims, well prior to indictment, helping to resolve the case against the managers of the fraud. Because of the offense level in this case, Mr. Guttentag is not entitled to the three point deduction for "super" acceptance. Nevertheless, it should be considered in connection with sentencing. 2. Mr. Guttentag only did what he was directed to do. Messrs. Tullo and Monteleone were the owners of ABF; Mr. Tullo was, effectively, HVAC. Any profits made from the fraudulent activity were their gains, not Mr. Guttentag's. Mr. Guttentag did not have a pecuniary interest in the enterprises which committed the
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fraud. 3. The fraud committed in connection with HVAC (the creation of non-existent customers) was committed by persons other than Guttentag (see ¶ 12 of presentence report). 4. ABF was created by Tullo, Monteleone and Nova (¶ 14, presentence report). 5. Guttentag was not responsible for solicitation of funds from investors as described in ¶¶ 16 - 19 of the presentence report. 6. Guttentag was not responsible for the placement, deposit, diversion, transfer, or any other aspect of the investor funds. 7. While, under the sentencing guidelines, Mr. Guttentag would probably not be considered a minimal participant, his role was extremely minimal; he took explicit direction from Mr. Tullo and was used by Mr. Tullo for the purpose of making money for Mr. Tullo and his associates - not for the purpose of making money (other than salary) for himself. 8. Mr. Guttentag went to work for Mr. Tullo in September, 1997. He was divorced from his wife in 1998, and was under financial pressure as he was, alone, supporting three children. As a result of the pressures, Mr. Guttentag was later diagnosed with depression. The depression along with financial pressures no doubt broke down Mr. Guttentag's ability to resist Mr. Tullo, even after learning what Mr. Tullo was up to. 9. Mr. Guttentag may suffer the loss of his accountancy license as a result of this conviction; a hearing is currently scheduled before the California Board of Accountancy in July, 2007. 10. At 56 years old, this is Mr. Guttentag's only criminal offense. As noted by the pre-sentence report, this case is governed by the guideline manual effective November 1, 1998. At that time, the sentencing guideline manual did not address
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aberrant behavior as a departure, but case law did.2 Prior to the enactment of U.S.S.G. 5K2.20, a defendant was eligible for a downward departure under the concept of "aberrant behavior," if, under the totality of the circumstances, the Court concluded that the conduct was aberrant. The following factors reveal that this conduct was, indeed, aberrant, for Mr. Guttentag: 1. Mr. Guttentag was 47 years old at the time he was hired by Mr. Tullo and drawn into the conspiracy; he had no criminal conduct prior to that and none subsequent to this conduct. 2. Mr. Guttentag did not gain from the conspiracy other than his own salary. 3. Mr. Guttentag suffered from severe depressive disorder. 4. Mr. Guttentag had been recently divorced and was a single father supporting three children and suffering from severe financial pressures at the time of the offense. 5. Mr. Guttentag acted at the direction of Tullo. These `convergence of factors' establish that Mr. Guttentag's conduct was aberrant and justify a downward departure. E.g. United States v. Fairless, 975 F.2d 664 (9th Cir. 1992). Of course, Mr. Guttentag's conduct was not a "single" act. However, it was a single course of conduct affected by the factors listed above and, as such, could be considered `aberrant conduct.' In United States v. Takai, 941 F.2d 738 (9th Cir. 1991), a series of acts leading to a conviction for conspiracy and bribery were held to be `aberrant' where, among other things, there was a lack of pecuniary gain. As noted elsewhere in these objections, Mr. Guttentag did not gain from the The guidelines were amended to add aberrant behavior as a specifically listed reason for departure in 2000. U.S.S.G § 5K2.20. Under that definition of "aberrant behavior," Mr. Guttentag would not qualify for a downward departure (although the factors justifying what would have been "aberrant behavior" prior to 2000 would still justify consideration under 18 U.S.C. § 3553(a)). The 2000 amendment was substantive, however, and, therefore, is not applied retroactively. United States v. Spinello, 265 F.3d 150 (3rd Cir. 2001).
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fraud scheme per se; he was just earning a salary.3 In United States v. Colace, 126 F.3d 1229 (9th Cir. 1997), however, the Court rejected an `aberrant behavior' departure due to repeated acts of bank robbery over an extended period of time. Because Mr. Guttentag's acts occurred over a lengthy period of time, the Court might reject this basis for departure. However, the same factors should be considered under 3553(a). Based upon the individualized sentencing factors required to be considered under 18 U.S.C. § 3553(a), Mr. Guttentag should be sentenced to probation. RESPECTFULLY SUBMITTED this 16th day of April , 2007. MARTIN LIEBERMAN, P.C. /s/ Martin Lieberman By: Martin Lieberman, #007442

I hereby certify that on April 16, 2007, I electronically transmitted the attached document to the Clerk's 15 Office using the ECF system for filing and transmittal of Notice of 16 Electronic Filing to all ECF registrants associated with this 17 case.
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/s/ C. Woodruff

Given what Mr. Tullo was paying an experienced accountant at the time, it is clear that Mr. Guttentag's psychological infirmities were exploited by Mr. Tullo for 27 Tullo's pecuniary gain.
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