In United States v. DiMassa, the Second Circuit (Lohier and Nathan, and Parker, dissenting in part) affirmed the conviction and sentence of John Trasacco after a jury found him guilty of fraud in connection with the receipt of fraudulent COVID-19 relief funds from the City of West Haven, Connecticut.  The Court held that Trasacco’s above-Guidelines sentence of 96 months was substantively reasonable even though it represented a significant variance from the Guidelines range (which was 33 to 41 months) and was also much longer than Trasacco’s co-defendants’ sentences.  The Court rejected the argument that Trasacco was “punished” with a longer sentence for choosing to proceed to trial, even while it recognized that he would have received a shorter sentence if he had pled guilty.  Judge Parker disagreed with the panel on the sentencing issue, concluding that the majority discounted “clear signs that the district court punished Trasacco for not accepting responsibility and for exercising his right to proceed to trial.”  The decision raises some important issues about the trial “penalty” that many defense lawyers have identified as an unfair aspect of our criminal justice system.

Background

Between January and November 2021, John Trasacco, Michael DiMassa, Lauren DiMassa, and John Bernardo conspired to defraud the City of West Haven of COVID-19 relief funds.  As part of this scheme, Michael DiMassa, a city official who was in charge of distribution of these funds for the City of West Haven, fraudulently approved a total of $431,982 in relief funds to entities controlled by Trasacco. 

In February 2022, a grand jury indicted all four individuals with fraud crimes.  In particular, Trasacco was charged with two counts of fraud, each of which also named Michael DiMassa.  Each of Trasacco’s co-defendants pleaded guilty, and Trasacco alone proceeded to a jury trial where Michael DiMassa testified against him as a co-conspirator.  The jury convicted Trasacco on both counts. 

Trasacco subsequently moved for judgment of acquittal and a new trial, raising various evidentiary challenges, including sufficiency of the evidence.  The court denied Trasacco’s motions and sentenced Trasacco to 96 months in prison, to be followed by 60 months of supervised release—a sentence well-above the Guidelines range of 33 to 41 months’ imprisonment.  The court also ordered Trasacco to pay $143,994 in restitution to the City of West Haven, explaining that it did not impose joint and several liability on Trasacco and Michael DiMassa because it did not believe that Trasacco would pay any restitution. 

Trasacco’s co-defendants received much lighter sentences, with Michael DiMassa receiving a 27 month-sentence, Bernardo a 13-month sentence, and Lauren DiMassa a 6-month sentence.

The Opinion

On appeal, Trasacco argued that his 96-month sentence was substantively unreasonable because: (1) it was well-above the Guidelines range; (2) his co-defendants had received far lesser sentences; (3) he was remanded into custody directly after sentencing; and (4) it was punishment for his inability to pay restitution.  In addition, Trasacco argued that the district court erred by admitting evidence suggesting that he had ties to organized crime and that he had been to prison in the past.  In addition to the sentencing argument, Trasacco presented two evidentiary challenges and also argued that the evidence presented at trial was insufficient to support his conviction.  The court rejected each of Trasacco’s arguments.

First, the Court held that Trasacco’s sentence was substantively reasonable even though it fell “well above Trasacco’s 33-41 month Guidelines range,” because the district court gave a reasoned explanation for the sentence.  United States v. DiMassa, 117 F.4th 477, 482 (2d Cir. 2024).  “A sentence is substantively unreasonable when it cannot be located within the range of permissible decisions, because it is shockingly high, shockingly low, or otherwise unsupportable as a matter of law.” United States v. Osuba, 67 F.4th 56, 68 (2d Cir. 2023).  The Court explained that “[a]t sentencing, the district court [] underscored the impact of COVID-19 on the country, and the severity of stealing relief funds ‘by fraudulently claiming to be providing the goods and services that people in the midst of a pandemic desperately needed.’”  DiMassa, 117 F.4th at 482-83.  The Court also highlighted that the district court had observed that Trasacco had profited significantly from his crimes, but did not pay taxes on any of this income.  Id. at 483.

Second, the Court held that Trasacco’s sentence was substantively reasonable even though his co-defendants had received lesser sentences.  The Court explained that it was persuaded by the district court’s “unequivocal statement at sentencing” that Trasacco “in no way will be punished for exercising his constitutional right to a trial and to forcing the government to prove its case beyond a reasonable doubt.”  Id.  Indeed, the Court noted, the district court “confirmed that Trasacco's decision to proceed to trial would neither increase nor decrease his sentence.”  Id.   The Court rejected Trasacco’s argument that “plea discounts and trial penalties are simply two sides of the same coin,” explaining “[w]e have long held that a district court may properly treat a guilty plea as a ‘recognition of fault’ and that ‘[a] show of lenience to those who exhibit contrition by admitting guilt does not carry a corollary that the Judge indulges a policy of penalizing those who elect to stand trial.’”  Id. at 484 (quoting United States v. Araujo, 539 F.2d 287, 292 (2d Cir. 1976)).  The Court also noted that Michael DiMassa’s 27-month sentence was further distinguishable from Trasacco’s, because DiMassa had “actively cooperated against Trasacco,” explaining that the Second Circuit has “recognized that [cooperation is] a reasonable explanation for a sentencing disparity.”  Id. at 484-85.

Third, the Court rejected Trasacco’s argument that the court’s decision to remand him into custody immediately after sentencing was further evidence that his sentence was substantively unreasonable.  The Court concluded that there was significant record evidence showing that the district court made a reasoned judgment in doing so, including that: (1) Trasacco’s co-defendants were each about to begin serving time; (2) Trasacco had not adequately rebutted the presumption that he posed a danger to the community or risk of flight; and (3) Trasacco had had four months since the date of conviction to get his affairs in order.  Id. at 485.

Finally, the Court declined to credit Trasacco’s argument that the district court imposed the above-Guidelines sentence as a means to punish Trasacco for his inability to pay restitution.  The Court pointed to the district court’s explicit statement during sentencing that “Trasacco ‘will not receive a greater sentence . . .  for any inability to pay restitution,’” id., and noted that in any event, “[a] show of lenience to those who exhibit contrition—e.g., by pleading guilty or paying upfront restitution—does not carry a corollary that the Judge indulges a policy of penalizing those’ who elect not to accept responsibility.”  Id. (quoting Araujo, 539 F.2d at 292 (internal quotation marks omitted)).

The Court also rejected Trasacco’s evidentiary challenges, explaining that it “will disturb an evidentiary ruling only where the decision to admit or exclude evidence was manifestly erroneous,” id. at 486 (quoting United States v. Litvak, 889 F.3d 56, 67 (2d Cir. 2018)), and the district court had not abused its discretion by admitting testimony related to Trasacco’s past convictions and alleged ties to organized crime.  Id. at 486-87.  The Court explained that the probative value of this evidence was not outweighed by its prejudicial effect.  Id.  Finally, the Court rejected Trasacco’s argument that there was insufficient evidence to support his conviction, instead crediting the district court’s conclusion that “the jury was presented with ‘more than enough’ evidence to support the verdict as to both counts.”  Id. at 488.

Judge Parker dissented on the sentencing issue, explaining that “the district court expressed its unmistakable displeasure that Trasacco, unlike his codefendants, had not pleaded guilty and had instead gone to trial.”  Id. at 489-90.  In addition, the decision not to set a surrender date at sentencing—customary for a defendant who has complied with his conditions of release—was “atypically punitive.”  Id. at 490.  He criticized the panel majority for not being “more exacting” when scrutinizing the sentence and the record below, despite the “disclaimer” from the district court that it was not punishing Trasacco for insisting on a trial.  Id.  It was important to “look[] not simply at what the court said, but at what it actually did[.]”  Id.  Because the sentence was “manifestly unjust,” based on a record with “bright red flags,” the sentence should have been vacated and the case remanded.  Id. at 493.

Discussion

The decision to affirm was based primarily on the district court’s disclaimer of any improper reason for its sentence.  This is not unusual for the Court to do.  District courts are and should be taken at their word in most cases.  Here, the Court relied heavily on the sentencing court’s caveats that it was not “punishing” Trasacco despite the district court’s comments at sentencing about the defendant’s failure to plead guilty or pay restitution prior to sentencing.  The understandable impulse to trust the district court’s explanation of its own motives is no doubt what drove the panel’s decision, and not a desire to see a trial penalty exacted from defendants in this or future cases.

In his dissent, Judge Parker took a different view on the record.  He discounted the district court’s disclaimers based on the “clear signs that the district court punished Trasacco for not accepting responsibility and for exercising his right to proceed to trial.”  Id. at 489.  Judge Parker noted that “where a district court's comments and conduct at sentencing ‘create[ ] an unacceptable risk that the sentence was impermissibly enhanced above an otherwise appropriate sentencing norm to penalize the defendant for exercising his constitutional right to stand trial,’ vacatur is appropriate.”  Id. (citing United States v. Cruz, 977 F.2d 732, 734 (2d Cir. 1992)). 

The record below did show that the sentencing court “emphasized that Trasacco would not get the benefit of accepting responsibility” because Trasacco had “continue[d] to profess his innocence.”  Id.  It explicitly noted that it gave Trasacco’s co-defendants lesser sentences because they had taken plea deals and Trasacco had not—both signs that it indeed intended to penalize Trasacco for his decision to proceed to trial by giving him a much longer sentence than recommended by the Guidelines.  This resulted in a sentence that was 135% longer than the highest-recommended Guidelines sentence.  As Judge Parker explained, what the district court did was not the same as what it said it was doing.

It is difficult to distinguish between plea discounts and trial penalties in the face of Trasacco’s 96-month sentence.  To be sure, an in-the-range sentence for a defendant who goes to trial will be higher based on the defendant’s failure to accept responsibility—a modest plea discount for the defendant who pleads guilty, as it were.  However, even if Trasacco was wrong to argue that “plea discounts and trial penalties” are simply “two sides of the same coin,” the sentence here was so much longer relative to the Guidelines range and relative to the sentences imposed on his pleading co-defendants, who received below-Guidelines sentences. 

The outcome in this case may have an impact on defendants in other cases.  It serves as another reminder to defense counsel to advise their clients that it is not only possible to have a longer sentence if they proceed to trial, but that the sentence could be dramatically longer, a multiple of three or four times as long as if they pleaded guilty.  This reality hinders an individual’s right to proceed to trial and increases the likelihood of defendants pleading guilty who may have legal or factual defenses that deserve to be decided on the merits and not waived by a guilty plea. 

Although the facts of DiMassa are stark, the idea of a “trial penalty” is not a new one to the defense bar.  In 2018, the National Association of Criminal Defense Lawyers (“NACDL”) issued a report based on data analysis, concluding that “there is ample evidence that federal criminal defendants are being coerced to plead guilty because the penalty for exercising their constitutional rights is simply too high to risk.”  NACDL explained that the “‘trial penalty’ results from the discrepancy between the sentence the prosecutor is willing to offer in exchange for a guilty plea and the sentence that would be imposed after a trial.”[1] 

Judge Parker’s dissent echoed the facts and arguments in the NACDL report.  He noted that “it follows from the Sixth Amendment's guarantee of a right to trial that ‘the augmentation of a sentence based on a defendant's decision to stand on his right to put the Government to its proof rather than plead guilty is clearly improper.’”  The DiMassa decision further incentivizes defendants to take more plea deals going forward lest they receive a trial penalty (and not merely a failure to receive a plea discount).