Opinion
No. 11-CR-2928 MCA
04-12-2013
UNITED STATES OF AMERICA, Plaintiff, v. DEBORAH GAYLE WOOD, Defendant.
MEMORANDUM OPINION AND ORDER
Defendant is before the Court for sentencing. The Court has previously accepted Defendant's plea of guilty to an information charging a violation of 18 U.S.C. § 1344(2).The Court has considered the Presentence Investigation Report, the five addenda to the presentence report (collectively the "PSR"), the parties' written submissions, the evidence admitted at the evidentiary hearing, the arguments of counsel, Defendant's response to allocution, and the applicable law, and is otherwise fully advised in the premises. The Court held a sentencing hearing in Albuquerque, New Mexico, over the span of several days at which Defendant and counsel were present. The sentencing phase of this proceeding included evidentiary hearings, as more fully described herein below. Being fully advised in the premises, the Court imposes a term of imprisonment of eight (8) months, a fine of $10,000.00 and a five year term of supervised release.
Section 1344(2) provides as follows: "Whoever knowing executes, or attempts to execute a scheme or artifice . . . to obtain any of the moneys, funds credits, assets, securities, or other property owned by, or under the custody or control of, a financial institution, by means of false or fraudulent pretenses, representations, or promises . . .shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both."
Federal Criminal Procedure Rule 32(i)(3)(A)
Federal Criminal Procedure Rule 32(i)(3)(A) provides that at sentencing the Court "must-for any disputed portion of the presentence report or other controverted matter-rule on the dispute or determine that a ruling is unnecessary either because the matter will not affect sentencing, or the court will not consider the matter in sentencing." Except as resolved by express findings as stated by the Court at sentencing and as documented in this Memorandum Opinion and Order, the Court has not considered the disputed portions of the PRS in sentencing Defendant.
Background
The Court finds as follows:
During the period September 2002 through September 2006, Defendant was employed by Los Alamos National Bank, a federally insured financial institution, first as a trust assistant, and then as a trust officer. Among the matters assigned to Defendant was the administration of a trust of which Betty Rynd, an elderly widow residing in Albuquerque, was the beneficiary. Defendant was assigned to administer the Rynd Trust in July 2003. Subsequently, in October 2003, a state court declared Mrs. Rynd incapacitated. Robert Bustos, a professional guardian, was appointed as Mrs. Rynd's guardian; Gary Benn, an accountant, was appointed as Mrs. Rynd's conservator. Due to dementia, Mrs. Rynd required around-the-clock care and could not be left alone. The Rynd Trust held substantial funds, enabling Mrs. Rynd's conservator and guardian to hire full-time caretakers and allowing Mrs. Rynd to remain in her home, where she enjoyed a comfortable lifestyle. Mrs. Rynd had no children or close relatives, and due to her advanced age and dementia was entirely dependant on others, including Defendant, Bustos, Benn, and hired caretakers.
In 2004, Defendant reported that a credit card sent to Mrs. Rynd had not been received. ["Credit Card Account Change Form" dated March 9, 2004 (attached as exhibit to Addendum to Presentence Report)] The out-of-state credit card company issued two replacement cards, each bearing an account number with the last four digits 5916. Defendant kept one card, which she thereafter used to make numerous purchases, some of which undoubtedly were for Mrs. Rynd's benefit. A second card was made available to Mrs. Rynd's caretakers, who routinely used the card to pay for meals, groceries, and other items for Mrs. Rynd's benefit. Apart from purchases that benefitted Mrs. Rynd, Defendant on many occasions improperly and unlawfully used the credit card to purchase meals, goods, and services for her own personal use, knowing that these meals, goods, and services would not benefit Mrs. Rynd. Defendant's use of the credit card to purchase meals, goods, and services for her personal use was not the result of inadvertence or mistake. Defendant submitted credit card statements on the 5916 account for payment knowing that these statements included charges for meals, goods, or services purchased for Defendant's personal use and that these purchases ultimately would be paid for with funds from Mrs. Rynd's checking account.
Prior to assigning Defendant to the Rynd Trust, LANB had established a petty cash fund maintained at Mrs. Rynd's residence to be used by Mrs. Rynd's caretakers for miscellaneous purchases of items such as groceries and meals. During Defendant's administration of the Rynd Trust, Defendant initiated withdrawals of thousands of dollars of funds belonging to the Rynd Trust. [Ex. 13] Unquestionably, some of the funds withdrawn by Defendant were used to replenish the petty cash fund or for other proper purposes that benefitted Mrs. Rynd.
During Defendant's administration of the Rynd Trust, Defendant on many occasions improperly and unlawfully obtained reimbursement from LANB for purchases of meals, goods, or services made by Defendant for her own personal use. Examples of this improper and unlawful practice include reimbursement obtained by Defendant for purchases of wine or other alcoholic beverages at Sam's Club, and purchases of groceries at the Valley Market in Angel Fire. Defendant's criminal scheme was uncovered in the later part of 2006 when other LANB personnel assumed responsibility for administering the Rynd Trust while Defendant was on administrative leave pending investigation of an unrelated matter. LANB conducted a painstaking two-week audit of the Rynd Trust account. Based upon the results of its investigation, LANB approached conservator Benn with a settlement proposal, which Benn accepted. Pursuant to the settlement, LANB repaid $101,391.10 to the Rynd Trust.
Loss Calculation
Defendant's principal objection to the PSR concerns the loss amount. The PSR adopted a loss amount of $101,391.10, which if accepted by the Court would result in an eight-level upward adjustment of Defendant's offense level.
For purposes of § 2B1.1., "loss" means "the greater of actual loss or intended loss." "Actual loss" means "the reasonably foreseeable pecuniary harm that resulted from the offense." "Reasonably foreseeable pecuniary harm" means "pecuniary harm that the defendant knew or, under the circumstances, reasonably should have known, was a potential result of the offense." A sentencing court's estimate of the loss must be reasonable. United States v. Hahn, 551 F.3d 977, 979-80 (10th Cir. 2008) (quoting USSG § 2B1.1, cmt. 3(C)). The United States, relying on LANB's calculations, estimates LANB's loss at $101,391.10, the exact amount that LANB repaid to settle any claims that Mrs. Rynd may have had against LANB arising out of Defendant's misappropriation of funds. This figure includes $27,915.34 in credit card charges; $32,246.09 in cash withdrawals; $40,421.95, representing 50% of the trust management fees for the Rynd Trust account written off by LANB; and $3,664.74 in interest. [Ex. HH]
The references to foreseeability in the definitions of actual loss and pecuniary harm reflect concern that something more than mere "but for" causation is required to link the defendant's conduct to a given economic harm. "The loss definition in § 2B1.1 lies between the purely objective standard of 'but for' causation and a purely subjective inquiry into the defendant's intentions." Haines, et al., Federal Sentencing Guidelines Handbook 333 (2012-2013 ed.) (hereafter "Handbook"). "The new reasonable foreseeability standard obliges the sentencing court to consider the facts of the case from the perspective of a reasonable person in defendant's situation when it separates harms for which a defendant ought justly to be punished from those for which [s]he should not." Frank O. Bowman, III, The 2001 Federal Economic Crime Sentencing Reforms: An Analysis and Legislative History, 35 Ind. L. Rev. 5, 47 (2001) (emphasis added). The Court has little difficulty in finding that Defendant's conduct was a "but for" cause of LANB's decision to repay $101,391.10 to the Rynd Trust. But as noted above, for sentencing purposes Defendant's conduct must also have been a proximate cause of LANB's decision to repay $101,391.10 to the Rynd Trust. The Court likewise has little difficulty in finding that Defendant's conduct was the proximate cause of LANB's decision to make the Rynd Trust whole. "A corporate trustee is liable to the beneficiary for the neglect or default of its officers or its own employees within the course of the employment." Restatement (Second) Trusts § 205; § 225, cmt. b (1959). This principle of trust law is relatively obvious, and the Court finds that even an unsophisticated bank employee would have foreseen that LANB would be legally obligated to repay the amount of funds stolen from a customer by the employee. The more difficult question, however, is whether the particular amount repaid by LANB was reasonably foreseeable from the standpoint of Defendant.
LANB's calculation of the amount of loss accomplished through the use of the credit card proved to be a very tedious business, requiring an examination of numerous credit card receipts in an attempt to determine (1) whether Defendant charged the items in question, and if so, (2) whether the items were purchased for Mrs. Rynd's or for Defendant's benefit. By way of example, there were several thousand dollars of charges at various grocery stores. Many of the items charged are items that could have been used by either Mrs. Rynd or Defendant. In many cases, receipts are not signed. In other cases, receipts are signed, but a careful investigation would have revealed that the signature is not Defendant's. LANB nevertheless chose to allocate 100% of the grocery charges to Defendant. Many of the receipts reflect purchases at Albuquerque stores or restaurants, which is consistent with Defendant's position that the charges could have been made by caretakers using a duplicate credit card. The Court, based on its independent examination of the record and evidence, finds that there were two credit cards issued to the account of Betty Rynd, with one card retained by Defendant and the remaining card available to caretakers, who used the card to make miscellaneous purchases on Mrs. Rynd's behalf. The Court further finds that given the information available to LANB, it was unreasonable for LANB to allocate credit card charges on the assumption that all the credit card charges had been made using a single credit card. The Court finds that it was not reasonably foreseeable from Defendant's standpoint that LANB would use this flawed methodology to allocate to Defendant $27,915.17 as improper credit card charges. Furthermore, apart from being unforeseeable from Defendant's standpoint, the methodology used by LANB in allocating the credit card charges, and adopted by the United States in estimating LANB's loss, is significantly over-inclusive and therefore is not sufficiently reliable to establish by a preponderance of the evidence that Defendant is responsible for $27,915.34 in fraudulent charges. See USSG § 6(A)1.3 (requiring that evidence relied upon by the sentencing court have "sufficient indicia of reliability to support its probable accuracy").
Many receipts were signed by someone with a distinctive way of crossing the two t's in "Betty." See, e.g., Ex. A at GW-13. This distinctive way of writing "Betty" also appears on a note initialed by "GDC." Id. at GW 62. The Court finds that the distinctive signature in question is that of a caretaker, Gabriela De La Fuente Culp.
During the evidentiary hearing, Daniel Monte, senior vice-president of LANB and manager of LANB's trust department, testified that the methodology employed by LANB in deciding which amounts would be reimbursed was not designed with the object of pursuing restitution from Defendant. [Tr. at 140]
Turning to the cash withdrawals, the record establishes that LANB repaid 100% of the withdrawals initiated by Defendant, plus $1,200 in withdrawals that appear to have been initiated in May and June 2003 by Asenath Kepler, the then-head of LANB's trust department. [Ex. 13] As trustee, LANB would have born the burden of proving that each charge against the trust was legitimate. 90A CJS Trusts § 689; Restatement § 172, cmt. b ("The burden of proof is upon the trustee to show that he is entitled to the credits he claims, and his failure to keep proper accounts and vouchers may result in his failure to establish the credits he claims."). This allocation of the burden of proof may explain why LANB elected to reimburse the Rynd Trust for 100% of the cash withdrawals. Once it had identified some transactions as undoubtedly fraudulent-e.g., the reimbursements based on Valley Market receipts, LANB could not be confident in the accuracy of any records maintained by Defendant documenting the disposition of trust funds. Given the allocation of the burden of proof to LANB by trust law and the anticipated expense and practical problems in accounting for trust funds that came under Defendant's control, LANB's decision to repay $32,946.09 may have been an exercise of reasonable business judgment. Nevertheless, "[t]he fact that the bank acted reasonably. . . does not suffice to establish that the expenses it incurred were reasonably foreseeable." United States v. Siddiqi, 373 Fed. Appx, 691, 692 (9th Cir. 2010) (distinguishing question of whether victim-bank acted reasonably vis-a-vis its customers in responding to theft of customers' personal information from question of whether expenses incurred by bank in responding to theft of customer information were reasonably foreseeable from defendant's standpoint). As previously noted, foreseeability for sentencing purposes is determined from a defendant's standpoint. The key factor bearing on the foreseeability of LANB's settlement with the Rynd Trust is the allocation by trust law of the burden of proof in an accounting. Since a portion of the withdrawn funds clearly was used for Mrs. Rynd's benefit, to an employee without knowledge of trust law's allocation of the burden of proof, LANB's decision to repay 100% of the withdrawn funds would not have been reasonably foreseeable. Because the United States focused on the reasonableness of the settlement viewed from LANB's perspective, the United States did not present evidence of what a person in Defendant's position knew or should have known about trust law. While it is certainly conceivable that Defendant might have known, or should have known, enough about trust law to render amount of LANB's settlement foreseeable from her standpoint, the record is silent as to Defendant's knowledge of trust law.
Evidence adduced at the evidentiary hearing established that a significant portion of the $32,246.09 unquestionably was used for Mrs. Rynd's benefit. [ Ex. G at 631 et seq. (petty cash logs) ; Ex. O (Federal Express receipt); Tr. 191-92 (testimony of D. Monte acknowledging pattern of withdrawals from Rynd's LANB trust account followed by deposits to petty cash fund maintained Mrs. Rynd's home)].
Because the United States relied on LANB's loss estimate, it did not provide the Court with an independent calculation of the loss to LANB resulting from Defendant's misconduct. In the absence of an alternative loss calculation, the Court accepts the amount admitted by Defendant, $2,294.93, as the loss to LANB resulting from Defendant's misuse of the credit card and improper cash withdrawals. The Court emphasizes that although this amount may coincidentally correspond to Defendant's gain, the Court is not using the gain to Defendant, USSG § 2B1.1, app. note (3)(B), in calculating the amount of LANB's loss. Rather, the Court is using this amount because in the absence of adequate proof by the United States of a larger loss amount, the amount admitted by Defendant is the only loss amount that has been established to the Court's satisfaction, given the allocation of the burden of proof to the United States.
With respect to the management fees forfeited by LANB, the Court finds that even an unsophisticated employee should have foreseen that if and when her misconduct was discovered, some portion of the fees billed to the customer for her services would be attributed to time spent in carrying out and covering up her crime, and that LANB would be required to refund these fees to the customer. However, given that Defendant actually provided the services set out in her time and billing records, the Court finds 50%, the amount chosen by LANB and adopted by the United States, to be arbitrary, excessive, and not reasonably foreseeable from Defendant's standpoint. The Court finds that three per cent of the total time billed to the Rynd account by Defendant is a conservative and reasonable estimate of the amount of fees attributable to Defendant's actions in carrying out and covering up her crime. Therefore the Court will add the sum of $2,425 to the $2,294.93 admitted by Defendant.
The United States has conceded that the services documented in Defendant's time and billing records were actually provided to Mrs. Rynd.[Tr. 849, 850-51]
Vulnerable Victim Adjustment
USSG § 3A1.1(b) provides for a two level increase to the offense level "[i]f the defendant knew or should have known that a victim of the offense was a vulnerable victim." "[V]ulnerable victim means a person (A) who is a victim of the offense of conviction and any conduct for which the defendant is accountable under §1B1.3 (Relevant Conduct); and (B) who is unusually vulnerable due to age, physical or mental condition, or who is otherwise particularly susceptible to the criminal conduct." USSG § 3A1.1 cmt. n.2. Mrs. Rynd meets the first prong even though LANB was the primary victim of the offense of conviction: "The vulnerable victim need not be the primary victim of the offense of conviction. Elderly account holders can be vulnerable victims, even though they are not defined as victims under the fraud guideline, 2B1.1(b)(2)." Handbook at 1041-42. Mrs. Rynd satisfies the second prong of the definition of vulnerable victim because she was elderly, had been declared incapacitated due to dementia, had no close relatives, was entirely dependant on others to manage her financial affairs, and had a conservator who had assumed a passive role, deferring to LANB and Defendant in the management of Mrs. Rynd's financial affairs. [Tr. 623, 627] These facts were known by Defendant. The Court finds that a vulnerable victim adjustment is appropriate.
Defendant's argument that for the vulnerable victim adjustment to apply, Defendant must have targeted Mrs. Rynd because of her vulnerability [Doc. 14 at 41] ignores a 1995 amendment deleting language suggesting that the defendant must have targeted the victim because of her vulnerability." Handbook at 1042.
Under United States v. Orr, 567 F.3d 610 (10th Cir. 2009), the primary victim is LANB.
§ 2B1.1(b)(11)(C)(i) Adjustment
USSG 2B1.1(b)(11)(C)(i) (2011) [formerly 2B1.1(b)(10)(C)(i)] authorizes a two step increase "[if] the offense involved . . . the unauthorized . . use of any means of identification unlawfully to . . . obtain any other means of identification." Both Defendant and the United States have objected to this adjustment. The evidence adduced at the evidentiary hearing was at best equivocal as to whether Defendant obtained a credit card issued to Betty Rynd without authorization. The Court will sustain the objection to this upward adjustment on the ground that the United States did not establish by a preponderance of the evidence that Defendant obtained the credit card in question without authorization.
§ 3B1.3 Adjustment
USSG § 3B1.3 authorizes a two step increase "[i]f the defendant abused a position of public or private trust . . . ." The Court finds that Defendant would not have been in a position to misappropriate funds from the Rynd Trust but for her position as a trust officer and her knowing misuse of the substantial discretion and responsibility conferred on her as a trust officer. The Court finds that a two level upward adjustment for abuse of a position of private trust is appropriate under the circumstances of this case.
§ 3E1.1 Adjustment
USSG § 3E1.1(a) provides for a two level downward adjustment "[i]f the defendant clearly demonstrates acceptance of responsibility for [her] offense." The Court is aware that in the plea agreement, the United States stipulated to the applicability of this adjustment. [Doc. 5, ¶ 10(a)] However, in the plea agreement Defendant expressly recognized that this stipulation is not binding upon the Court. [Id., ¶ 11] The Court finds that Defendant has not clearly demonstrated her acceptance of responsibility. "Defendant's guilty plea may provide some evidence of acceptance of responsibility, but does not automatically entitle the defendant to a sentencing adjustment." Handbook at 1208. Nothing in the statement given by Defendant and included in the Presentence Report at ¶ 49 clearly demonstrates an awareness by Defendant that she committed a reprehensible crime by betraying her position of trust in the course of repeatedly exploiting a helpless victim. Statements such as "receipts were improperly submitted" or "I did use [Mrs. Rynd's] trust account to my benefit" are too tepid and evasive to convince the Court that Defendant has internalized the fact that over a period of many months she repeatedly victimized Mrs. Rynd and her employer. Defendant has not convinced the Court that she fully recognizes that she plead guilty to a crime, not negligent mismanagement. "The burden of proving acceptance of responsibility is on the defendant, who must establish by a preponderance of the evidence a 'recognition and affirmative acceptance of personal responsibility for his criminal conduct.'" United States v. Quarrell, 310 F.3d 664, 682 (2002). Defendant has not met this burden by her post-plea actions or statements. Accordingly, the adjustment for acceptance of responsibility is denied.
At the sentencing hearing the Court pointed to examples of conduct that it found suggestive of a lack of acceptance of responsibility: (1) Defendant's statement that she submitted receipts for her own purchases to help out caretakers who had lost receipts for legitimate purchases they had made for Mrs. Rynd, and (2) statements in papers filed by Defendant's attorney that minimized the culpable nature of Defendant's acts. Defendant's counsel pointed out the statement about submitting false documentation to help out caretakers was made prior to Plaintiff's guilty plea. Defendant's counsel pointed out that the statements in papers minimizing Defendant's culpability were drafted by counsel, not Defendant. The Court agrees with Defendant that these grounds for denying an adjustment for acceptance of responsibility are improper. Accordingly, the Court expressly disclaims reliance on these statements.
USSG § 3E1.1(b) provides for a one level downward adjustment "[i]f the defendant qualifies for a decrease under subsection (a). . . ." The Court's determination that Defendant does not qualify for a decrease under subsection (a) precludes a subsection (b) adjustment. Additionally, a subsection (b) adjustment is not appropriate because Defendant's offense level determined prior to the application of subsection (a) is eleven.
Applicable Guideline Range
Based on the preceding reasoning, the Court determines that Defendant's base offense level of seven should be adjusted upwards by two levels pursuant to USSG § 3A1.1(b) and by two levels pursuant to USSG § 3B1.3. Defendant's offense level should not be adjusted upward pursuant to USSG § 2B1.1(b)(11)(C)(i) and Defendant's offense level should not be adjusted downward pursuant to USSG § 3E1.1. Defendant's offense level is 11, and falls within Zone B. Defendant's criminal history score is 0, resulting in criminal history category of 1. Her applicable guideline range is 8-14 months imprisonment, which may be satisfied by the sentencing options specified in USSG § 5C1.1(c). The Court recognizes that in the post-Booker federal sentencing regime, this guideline sentencing range is merely advisory. Handbook at 25, 60-61 (discussing United States v. Booker, 543 U.S. 220 (2005)).
Within-Guidelines Departure
USSG § 1B1.1(b) directs a sentencing court, having first determined the defendant's guideline range, to "consider Parts H and K of Chapter Five, Specific Offender Characteristics and Departures, and any other policy statements or commentary in the guidelines that might warrant consideration in imposing sentence." The Court finds that Defendant's individual characteristics, viewed separately and collectively, leave Defendant solidly in the applicable Guidelines heartland and therefore do not support a departure based upon the departure provisions of the Guidelines. Booker Variance
USSG § 1B1.1(c) directs a sentencing court, as the third and final step in determining a defendant's sentence, to "consider the applicable factors in 18 U.S.C. § 3553(a) taken as a whole. The Court's goal is "to fashion an individualized sentence that accounts for the unique facts of [Defendant's] case." United States v. Robertson, 568 F.3d 1203, 1209 (10th Cir. 2009). The Court must consider all the circumstances of the case before it in the light of the factors set out in 18 U.S.C. § 3553(a). United States v. Elders, 467 Fed. Appx. 793 (10th Cir. 2012). Once again, the Court acknowledges the "effectively advisory" role of the Guidelines. Booker, 543 U.S. at 245. "[P]ost-Booker opinions make clear that, although a sentencing court must give respectful consideration to the Guidelines, Booker permits the court to tailor the sentence in light of other statutory concerns as well.'" Pepper v. United States, _U.S. _, _, 131 S. Ct. 1229, 1241 (2011) (quoting Kimbrough v. United States, 552 U.S. 85, 101 (2007)). The Court has carefully considered the arguments advanced by Defendant for a downward variance and has considered the sentencing factors. Ultimately, the Court finds these arguments unpersuasive, and concludes that a sentence of eight months imprisonment is sufficient, but not greater than necessary, to comply with the purposes of § 3553(a)(2), given the facts and circumstances of this case.
Among the circumstances considered by the Court in arriving at this sentence is the fact that apart from a minor infraction many years ago and the instant offense, Defendant appears to have led a law-abiding and productive life. The Court has taken this fact into account and concludes that a sentence at the low end of the guideline range is appropriate. However, there are two inter-related circumstances that stand out and support a sentence to a significant term of imprisonment. The first, and most weighty, is the reprehensible nature of her offense: betraying the position of trust she occupied by repeatedly preying upon an incapacitated customer. Defendant's offense occurred over a substantial period of time and involved many distinct instances of unlawful misappropriation of funds belonging to the Rynd Trust or Mrs. Rynd. The second is the absence of a clear acknowledgment by Defendant of responsibility. The Court is persuaded that a sentence of imprisonment is essential to impress upon Defendant that she knowingly executed a scheme to fraudulently obtain money held by her employer for the benefit of Mrs. Rynd. Defendant's argument that her fraud should be excused or minimized because she and others otherwise took good care of Mrs. Rynd is not merely unpersuasive, it is offensive: the Rynd Trust was paying LANB $125 per hour for Defendant's services, and LANB, in turn, was paying Defendant a salary for performing these services for Mrs. Rynd. Mrs. Rynd and LANB had a right to expect that Defendant would do her job, and the fact that Defendant otherwise did her job does not in any way excuse her use of her position of trust to commit fraud. A significant term of imprisonment is necessary to disabuse Defendant of any notion that she was merely guilty of bad judgment or a lack of care, rather than knowingly perpetrating a scheme to defraud, or that leading a generally worthwhile life excuses her conduct in repeatedly preying upon an elderly incapacitated victim. The Court finds that given the nature and circumstances of Defendant's case, a sentence of imprisonment is necessary to reflect the seriousness of her offense, to promote respect for the law, to provide just punishment for her offense, and to deter Defendant and others from similar crimes. The Court finds, however, that given Defendant's age and attendant reduction in the risk of recidivism, a lengthy sentence for the purpose of incapacitating Defendant is unnecessary to further the interest of preventing further crimes by Defendant. The Court expressly rejects the option of a split sentence of imprisonment incorporating a brief period of imprisonment followed by a period home detention, USSG § 5C1.1(c)(2), as not appropriate given the nature of Defendant's offense.
The Court has considered the advisory sentencing alternatives set out USSG in § 5C1.1(c). The Court notes that by operation of 18 U.S.C. § 3561(a)(1), Defendant is not eligible for a sentence of probation. United States v. Zirger, 257 Fed. Appx. 59, 61 (10th Cir. 2007).
Defendant's argument based on sentence disparity is unpersuasive. 18 U.S.C. § 3553(a)(6) requires the Court to consider "the need to avoid unwarranted sentence disparities among defendants with similar records who have been found guilty of similar conduct." Defendant relies on a simplistic comparison of the length of a sentence to the loss amount in high loss cases to suggest that imposition of any term of imprisonment in her case would result in a sentencing disparity. Obviously, to maintain a strict linear relationship between sentences in a low-loss case such as Defendant's and enormously high-loss cases such as Madoff, courts would have to either impose ridiculously brief sentences at the low end or impose astronomically long sentences amounting to multiples of the defendant's life span at the high end. In determining Defendant's sentence, the Court has carefully considered the advisory guideline range. In doing so, the Court necessarily has given appropriate consideration to avoiding unwarranted sentence disparities. United States v. Gantt, 679 F.3d 1240, 1248-49 (10th Cir. 2012).
In United States v. Madoff, No. 09-cr-213 (S.D.N.Y), the defendant was sentenced to 1800 months (150 years). Judgment [Doc. 100]. The actual loss amount in Madoff appears to have been $13 billion, not $65 billion as is sometimes reported. Madoff, Government's Sentencing Memorandum [Doc. 92] at 18-19. Using the ratio taken from Madoff (1800 months/$13,000,000,000), a proportional sentence in Defendant's case (using a rounded-off loss amount of $5,000) would be 30 minutes.
Criticism of the fraud Guideline for creating sentencing disparity tends to focus on sentences at the high end of the Guidelines. See, e.g., Ellis, et al., At a "Loss" for Justice, 25 Crim. Just. 34 (Winter 2011); Bowman, Sentencing High-Loss Corporate Insider Frauds after Booker, 20 Fed. Sent. R. 167 (2008). Defendant turns this criticism on its head.
As the Ninth Circuit Court of Appeals has observed:
The mere fact that [Defendant] can point to a defendant convicted at a different time of a different fraud and sentenced to a term of imprisonment shorter than [Defendant's] does not create an "unwarranted" sentencing disparity. . . . A district court need not, and, as a practical matter cannot compare a proposed sentence to the sentence of every criminal defendant who has been sentenced before. Too many factors dictate the exercise of sound sentencing discretion in a particular case to the make the inquiry [Defendant] urges helpful or even feasible.United States v. Treadwell, 593 F.3d 990, 1013 (9th Cir. 2010). Here, Defendant has made no serious effort to show that she is similarly situated to the defendants in other cases cited by Defendant. A district court is not required to respond to sentencing disparity arguments that lack factual development. United States v. Moskop, No. 11-3869, 2013 WL 74600 * 3 (7th Cir. Jan. 8, 2013) (unpublished order).
The sentence imposed by the Court is based on the unique facts of Defendant's case and Defendant's individual characteristics. Defendant is in her mid-fifties and in apparent good health. The eight month term of imprisonment imposed by the Court amounts to a small fraction of Defendant's anticipated remaining life expectancy. The Court is not persuaded that a sentence of eight months imprisonment will result in an unwarranted disparity between that of Defendant and other similarly-situated white collar defendants.
According to the U.S. Census Bureau, in 2008 a 55 year-old white female had a life expectancy of 28.3 years. See Table 105. Life Expectancy by Sex, Age, and Race: 2008. http://www.census.gov/compendia/statab/cats/births_deaths_marriages_divorces/life_expectancy .html
Restitution
The Court of Appeals has summarized the applicable law regarding restitution:
In cases of fraud or deceit, the Mandatory Victims Restitution Act (MVRA) requires a sentencing court to order "that the defendant make restitution to the victim of the offense." The MVRA defines a victim as "any person directly harmed by the defendant's criminal conduct in the course of [a] scheme, conspiracy, or pattern [of criminal activity]." The Court must "order restitution to each victim in the full amount of each victim's losses as determined by the court." While "a restitution order must be specific in a dollar amount that is supported by the evidence in the record[,] . . . the determination of an appropriate restitution is by nature an inexact science, so the absolute precision is not required." "Any dispute as to the proper amount . . . of restitution shall be resolved by the court by a preponderance of the evidence. The burden of demonstrating the amount of the loss sustained by a victim as a result of the offense shall be on the attorney for the Government."United States v. Kieffer, 681 F.3d 1143, 1171 (2012) (citations omitted). The Court finds that LANB was directly harmed by Defendant's conduct. Due to Defendant's misconduct, LANB incurred a legal obligation to restore to the Rynd Trust the amount taken by Defendant and to repay the Rynd Trust those management fees attributable to time spent by Defendant in carrying out and covering up her fraud. The Court finds that LANB's actual loss is $4,719.93, comprised of the $2,294.93 admitted by Defendant and $2,425 in refunded management fees attributable to Defendant's time spent in committing and covering up her fraud. The parties agreed at the sentencing hearing that for purposes of restitution, the loss amount of $4,719.93 should be reduced by $329, reflecting Defendant's repayment of La Posada's booking fee. With this deduction, restitution is set at $4,390.93.
Fine
After consideration of the factors set out in USSG § 5E1.2, and 18 U.S.C. § 3572 (a)(1) through (6), as well as the factors set out in 18 U.S.C. § 3553(a), the Court imposes a fine of $10,000. This sum will be paid immediately or in monthly installments equal to at least 10% of Defendant's monthly income, but not less than $50 per month. The United States has waived the 18 U.S.C. § 3013(a)(2)(A) special assessment.
Booker has rendered the Guidelines advisory as to fines. United States v. Perez-Jimenez, 654 F.3d 1136, 1144 (10th Cir. 2011).
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Supervised Release
18 U.S.C. § 3583(a) provides that "[t]he court, in imposing a sentence to a term of imprisonment . . . may include as a part of the sentence a requirement that the defendant be placed on a term of supervised release after imprisonment. . . ." The Court having considered the factors set out in § 3583(c) and the advisory Guidelines, USSG §§ 5D1.1 cmt. n.3; 5D1.2(a), will impose a period of five years supervised release.
WHEREFORE,
IT IS THEREFORE HEREBY ORDERED that Defendant Deborah Gayle Wood is sentenced to a term of eight (8) months imprisonment along with the additional conditions stated at hearing; that a term of supervised release of five (5) years be imposed; and that a fine in the amount of $10,000.00 be imposed.
IT IS FURTHER ORDERED that Defendant's objections and motions for departure or variance, not otherwise expressly granted at sentencing, are deemed denied.
IT IS FURTHER ORDERED that Judgment be entered accordingly.
_____________________
M. CHRISTINA ARMIJO
CHIEF UNITED STATES DISTRICT JUDGE