Ex post facto clause takes center stage in sentencing case

The U.S. Supreme Court has agreed to hear the case of an Illinois businessman convicted of bank fraud in a loan and bad-check scheme, who says his 70-month prison sentence violates the U.S. Constitution’s ex post facto clause.

Marvin Peugh argues in his certiorari petition that the high court should settle conflicting appellate court rulings on which of two U.S. sentencing guidelines a judge should apply: those in force when the crime occurred or an upgraded version in force at the time of a defendant’s sentencing.

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The ex post facto clause, shown here, is found under the Constitution’s Article I at Section 9.

Peugh says the 2009 enhanced guidelines in place at the time of t sentencing added 46 months to the sentence he would have received under the 1998 guidelines in force at the time of the alleged criminal acts in 2000.

The petition notes that the guidelines manual allows a judge to use the guidelines version that is in place at the time of sentencing, unless the sentence violates the ex post facto clause.

(Click here to read the petition on Westlaw.)

The clause is found under Article I, Section 9 of the Constitution and states in pertinent part, “No … ex post facto law shall be passed.”  The ex post facto clause effectively bars the application of any law that retroactively increases the legal consequences for a crime committed before the law changed.

Peugh says eight federal appellate courts have found retroactive use of sentencing guidelines violates the ex post facto clause.  Only the 7th U.S. Circuit Court of Appeals has found no such violation.  According to Peugh, the 7th Circuit determined ex post facto protections were not raised because the guidelines are only “advisory” in nature.

The 7th Circuit happens to be the same appellate court that affirmed Peugh’s 70-month sentence under the 2009 guidelines, which upgraded the penalties for bank fraud.

Fraud case

In 2010 Peugh was convicted by a jury in the U.S. District Court for the Northern District of Illinois on five bank fraud counts for allegedly operating a loan fraud and bad-check scheme at his two farming-related businesses, according to Supreme Court filings.

Briefing filed with the high court say Peugh and business partner Steven Hollewell used fake financial records from 1999 to 2000 to secure $2.5 million in loans from State Bank of Davis.  They also wrote bad checks between their personal and business accounts as part of a scheme to overdraw one of their accounts at Savannah Bank by nearly $500,000.

One of the businesses had cash-flow problems, and the loan fraud and check-writing scheme was aimed at shoring up that company.  Hollewell reached a plea agreement with the government in which he testified against Peugh and received a 12-month prison term for cooperating, according to the petition.

Peugh challenged his 70-month sentence before the trial court and later the 7th Circuit on the ground it violated the ex post facto clause.  He lost in both courts and took his case to the Supreme Court last summer.

Ex post facto arguments

Peugh argues in his certiorari petition that the D.C., 2nd, 4th, 6th and 11th circuits agree that retroactive application of the sentencing guidelines violates the ex post facto clause.

In its opposition brief, the government, like the 7th Circuit, maintains there is no ex post facto concern in the sentencing guidelines because they are “advisory only.”

The government says the guidelines’ “advisory” status was established with the high court’s ruling in United States v. Booker, 543 U.S. 220 (2005).  Before that ruling, the guidelines were mandatory, leaving judges with little discretion in the sentencing process.

The 2009 sentencing guidelines, however, which contain enhanced penalties for bank fraud, give judges the ability to impose sentences higher than the 1998 guidelines.  This discretionary power takes any ex post facto argument out of the sentencing equation, the government asserts.

Peugh v. United States, No. 12-62, cert. granted (U.S. Nov. 9, 2012).