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United States v. McClaflin

United States Court of Appeals, Tenth Circuit

September 20, 2019

UNITED STATES OF AMERICA, Plaintiff-Appellee,
v.
KAREN LYNN MCCLAFLIN, Defendant-Appellant.

          Appeal from the United States District Court for the District of Colorado (D.C. No. 1:17-CR-00168-CMA-1)

          Ann Marie Taliaferro, Brown, Bradshaw & Moffat, L.L.P., Salt Lake City, Utah, for Defendant-Appellant.

          James C. Murphy, Assistant United States Attorney (Jason R. Dunn, United States Attorney, with him on the brief), Denver Colorado, for Plaintiff-Appellee.

          Before MATHESON, SEYMOUR, and BACHARACH, Circuit Judges.

          SEYMOUR, CIRCUIT JUDGE.

         Defendant Karen McClaflin pled guilty to two counts stemming from the operation of a residential Ponzi scheme which defrauded investors of more than $14.5 million dollars. At sentencing, the district court calculated the advisory sentencing guidelines at 135 to 168 months' imprisonment, applied a 6-level enhancement for substantial financial hardship to more than twenty-five victims, and then determined that a downward variant sentence of 96 months was appropriate. On appeal, Ms. McClaflin argues the district court: (1) abused its discretion by denying her motion for an additional continuance of the sentencing hearing, (2) procedurally erred by imposing the 6-level enhancement based upon victim impact statements, and (3) failed to consider all of the requisite 18 U.S.C. § 3553(a) factors. We affirm.

         I.

         Between March 2011 and early 2017, Ms. McClaflin operated a "fix and flip" real estate Ponzi scheme in which she made false promises to investors. On June 21, 2017, Ms. McClaflin entered into a plea agreement with the government for wire fraud and money laundering. The plea deal included a 2-level enhancement for a crime involving more than ten victims. The government indicated that it did not have the evidence at that time to support a 6-level enhancement for substantial financial hardship to more than twenty-five victims.

         The parties jointly filed a motion to continue on September 1, 2017, and the district court moved the sentencing hearing set for January 17, 2018 to March 14 to give the parties more time to analyze documents regarding loss and restitution. On March 5, counsel for Ms. McClaflin requested another continuance due to Ms. McClaflin's poor health and hip problems. The district court moved the sentencing hearing to May 10, nearly an entire year after Ms. McClaflin pled guilty to the charges. The week of the hearing Ms. McClaflin again requested her sentencing be continued on the grounds of her ill health. The district court denied the motion and it repeated this denial when Ms. McClaflin's counsel urged a continuance at the sentencing hearing.

         At sentencing, the court questioned the government's decision not to pursue the 6-level enhancement. Notwithstanding the government's reticence and in order to implement the enhancement, the district court conducted an extensive review of the sworn victim impact statements attached to the presentence Report ("PSR"). The court made independent findings of fact regarding Ms. McClaflin's scheme and specifically found that Ms. McClaflin's offense resulted in substantial financial hardship to twenty-five or more victims. See U.S.S.G. § 2B1.1(b)(2)(C).

         Prior to passing sentence, the district court heard testimony from victims of Ms. McClaflin's scheme from the Receiver who had been appointed by the court to recover assets related to the scheme, and from Ms. McClaflin herself. Finding that Ms. McClaflin committed a level 33 offense with a criminal history category of I, resulting in an advisory imprisonment range between 135 and 168 months, the court determined a downward variant sentence of 96 months was warranted. Ms. McClaflin appeals.

         II.

         We review the denial of a motion for continuance for abuse of discretion and will only find error if the district court's decision was "arbitrary or unreasonable and materially prejudiced" the defendant. Rogers v. Andrus Transp. Services, 502 F.3d 1147, 1151 (10th Cir. 2007). In determining whether the denial of a continuance constitutes an abuse of discretion, we look to the individual circumstances of the case. Id.

         The framework for reviewing the denial of a motion for a continuance "involves an examination of four factors: (1) the diligence of the party seeking the continuance; (2) the likelihood the continuance, if granted, would have accomplished the stated purpose; (3) the inconvenience to the opposing party, witnesses, and the court; and (4) the need for the continuance and any harm resulting from its denial." United States v. Glaub,910 F.3d 1334, 1345 (10th Cir. ...


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