In The Courts

In United States v. Wallace, 2004 WL 103315 (7th Cir. Jan. 23, 2004), the Seventh Circuit held that a “Statement of Voluntary Discontinuance,” signed by the defendant to assure the U.S. Postal Inspection Service that he would stop sending bad checks through the U.S. mail, did not constitute a prior administrative order, injunction, or process of the sort that should trigger a two-level sentence enhancement under U.S.S.G. ' 2B1.1(b)(7), after his conviction for subsequent acts of mail fraud. Section 2B1.1(b)(7) provides that, “[i]f the offense involved … a violation of any prior, specific judicial or administrative order, injunction, decree, or process not addressed elsewhere in the guidelines … increase by 2 levels.”

In reversing the district court's application of the enhancement, the court compared the defendant's conduct with fact patterns in some of the few other cases addressing the guideline. The court explained that unlike the fact patterns in a Second Circuit case and earlier Seventh Circuit case, the defendant's signed statement was much more informal than an actual order, injunction, decree, or process, and was more like an informal administrative warning letter. The court further stated that the fact that the Postal Service regulations provided for an informal process of disposing of matters did not automatically render that mechanism “process” under the guidelines. In reaching its decision, the court took into account the fact that there had been no extensive negotiation between the defendant and the Postal Service prior to his signing the letter, and no official action had been taken against the defendant by the Postal Inspection Service for his earlier acts of potential mail fraud. The panel emphasized that whether a warning or agreement reaches the level of “process” under the guideline must be determined on a case-by-case basis.