United States v. Senninger , 429 F. App'x 762 ( 2011 )

FILED
United States Court of Appeals
Tenth Circuit
July 12, 2011
UNITED STATES COURT OF APPEALS
Elisabeth A. Shumaker
Clerk of Court
TENTH CIRCUIT
UNITED STATES OF AMERICA,
Plaintiff - Appellee, No. 10-1450
v.
CATHERINE SENNINGER,
Defendant - Appellant.
ORDER
Before BRISCOE, Chief Judge, ANDERSON, and MURPHY, Circuit Judges.
This matter is before the court on Appellant’s Petition for Panel Rehearing.
Also before the court is a request by Appellant’s counsel to withdraw and have
new counsel appointed to represent Appellant. Panel rehearing is granted solely
to amend footnote 1. Accordingly, the panel’s opinion, United States v.
Senninger, No. 10-1450, 2011 WL 2455662 (10th Cir. June 21, 2011), is vacated
and replaced with the opinion issued herewith. Counsel’s motion to withdraw is
granted. The request for appointment of substitute counsel is denied.
Entered for the Court,
ELISABETH A. SHUMAKER, Clerk
FILED
United States Court of Appeals
Tenth Circuit
July 12, 2011
UNITED STATES COURT OF APPEALS
Elisabeth A. Shumaker
Clerk of Court
TENTH CIRCUIT
UNITED STATES OF AMERICA,
Plaintiff - Appellee, No. 10-1450
v. (D. Colorado)
CATHERINE SENNINGER, (D.C. No. 1:08-CR-00456-MSK-2)
Defendant - Appellant.
ORDER AND JUDGMENT *
Before BRISCOE, Chief Judge, ANDERSON, and MURPHY, Circuit Judges.
I. Introduction
Defendant Catherine Senninger was convicted of six counts of mail fraud
and one count of making a false claim against the Government. She was
acquitted of several other counts, including conspiracy and additional mail fraud
counts. At trial, the Government presented evidence that Senninger, through her
involvement with a company known as Olympia Financial and Tax Services, Inc.
(“Olympia”), participated in a scheme to defraud the Internal Revenue Service
*
This order and judgment is not binding precedent except under the
doctrines of law of the case, res judicata, and collateral estoppel. It may be cited,
however, for its persuasive value consistent with Fed. R. App. P. 32.1 and 10th
Cir. R. 32.1.
(“IRS”) and the State of Colorado Department of Revenue (“CDR”) by preparing
amended tax returns containing false or fraudulent information. Based, in part, on
its finding that the loss to the IRS and the CDR was $149,682.84, the district
court sentenced Senninger to thirty-six months’ imprisonment. The sentence
represented an upward departure from the advisory guidelines range. Senninger
was also ordered to pay $128,664.27 in restitution. In this appeal, Senninger
challenges her sentence, including the restitution order. Exercising jurisdiction
pursuant to 28 U.S.C. § 1291 and 18 U.S.C. § 3742, this court affirms.
II. Background
Senninger and her codefendant, Jeffrey Harris, were charged in a multi-
count indictment with seventeen counts of mail fraud, one count of conspiracy to
defraud the government, and five counts of presenting false claims to the
government. The details of the scheme which gave rise to the charges are set out
in this court’s opinion disposing of Harris’s appeal.
From 2001 through 2006, [Harris] ran a scheme to defraud the
Internal Revenue Service (IRS) and the Colorado Department of
Revenue (CDR), whereby he sought tax refunds for customers of
Olympia Financial and Tax Services (Olympia), a corporation he
owned and controlled. Harris had no specialized tax-preparation
experience, nor was he a certified public accountant or a former IRS
agent. Olympia’s employees and Harris directly solicited customers.
They represented that: (1) Olympia could amend the customers’ tax
returns to claim legitimate tax refunds, (2) the tax professionals who
worked at Olympia were former IRS employees or were otherwise
qualified to amend tax returns, and (3) Olympia would use legal
methods and truthful information to amend customers’ returns.
Harris also developed and used promotional written and internet
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materials falsely representing that Olympia employed experienced
tax and legal professionals to review the amended returns to ensure
compliance with the law. He also represented that all amendments to
tax returns would be discussed with the customer and supported with
documentation.
To implement the scheme to defraud, Harris and others
prepared amended federal and state tax returns containing false
information so as to entitle the customer to a refund. Typical of the
false claims were itemized deductions, business profits or losses,
educational expenses, amount of taxable income, and the amount of
refund owed to the taxpayer. Olympia charged its customers 40 to 50
percent of any refund they received. As a result of this scheme,
Harris and others caused over 800 fraudulent amended returns to be
filed with the IRS claiming $2,667,788 in refunds . . . . In addition,
over 500 fraudulent amended returns were filed with the CDR
claiming $511,101 in refunds.
United States v. Harris, No. 10-1328, 2011 WL 1289156, at *1-*2 (10th Cir.
April 6, 2011) (footnote omitted). Senninger concedes trial testimony and
stipulated evidence shows she prepared more than 100 amended federal and state
returns for Olympia. 1
According to Senninger, she worked for the IRS from the 1960s to 1985
and, at one point in her employment, held the position of tax auditor. At trial,
Harris testified Senninger’s past employment with the IRS was one of the reasons
he hired her. Senninger provided Harris with a photocopy of her old IRS badge,
1
Our review of Senninger’s appeal has been significantly impeded by her
nearly complete failure to provide citations to the relevant sections of the record,
as required by Fed. R. App. P. 28(e). Notwithstanding that failure, this court has
thoroughly reviewed the entire appellate record and, based on that independent
review, fully considered all appellate arguments raised by Senninger.
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which he framed and placed on the wall in Olympia’s offices. Harris distributed
additional photocopies to Olympia’s commissioned salespeople who used
Senninger’s credentials when marketing Olympia’s tax preparation services to
potential customers. Several taxpayers testified they were influenced in their
decision to use Olympia because of Senninger’s past employment with the IRS.
Harris testified Senninger was aware her credentials were being used in this way.
Senninger concedes the Government presented sufficient evidence at trial to
demonstrate she placed false and fraudulent information on amended tax returns,
including falsified itemized deductions and falsified profits or losses from
taxpayer businesses. The information was gleaned from a client questionnaire
created by Harris with input from Senninger. Harris testified the questionnaires
were completed either by Olympia’s client or by a salesperson based on
information provided by the client. Harris also testified he frequently added false
information to the questionnaires or changed the information provided by the
client. In some circumstances, he completed an entirely new questionnaire for the
client. Harris based the false information he added to the questionnaires,
including false deductions, on training he received from Senninger. The
questionnaires were then forwarded to Senninger who used the information
recorded on them to prepare amended state and federal tax returns for the client.
Harris testified that when Senninger completed an amended return for an Olympia
client, she would prepare fraudulent schedules to support the false deductions he
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included on the questionnaires. Additionally, Senninger did not necessarily use
the answers on the questionnaires to prepare the returns. For example, Senninger
concedes that if the questionnaire contained round numbers, she “changed the
numbers on the filed returns so that the returns no longer had whole, round
numbers on some of the deduction figures.”
The jury found Senninger guilty of six counts of mail fraud and aiding (and
abetting) and one count of making a false claim against the government (and
aiding and abetting). She was acquitted on the remaining counts, including the
conspiracy count. A Presentence Investigation Report (“PSR”) was prepared
prior to sentencing. The PSR estimated the total loss from the scheme in which
Senninger participated to be $263,417 which increased her base offense level by
twelve levels. See USSG §§ 2B1.1(a)(1), (b)(1)(G). Senninger’s total offense
level for guidelines sentencing purposes was calculated at twenty-one. Senninger
received one criminal history point for a 2009 Arizona assault conviction,
resulting in her being assigned a Category I criminal history category. Although
Senninger also had 1992 federal convictions for falsification of documents and
obtaining funds by fraud and false statements, those convictions were not
assigned any criminal history points because they were stale. See USSG
§ 4A1.2(e)(1), (3) (excluding from a defendant’s criminal history calculation any
sentence not exceeding one year and one month that was imposed more than ten
years before the commencement of the instant offense).
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Prior to sentencing, the Government filed a sentencing statement requesting
the district court to depart upward from the advisory guidelines range by
sentencing Senninger as if the stale convictions were included in her criminal
history calculation. See USSG § 4A1.3(a) (permitting a district court to depart
upward when a defendant’s criminal history category does not adequately
represent the seriousness of her criminal history). In response, Senninger filed a
motion opposing any upward departure. She also challenged, inter alia, the
calculation of her advisory guidelines range. Specifically, she argued the PSR
incorrectly calculated the loss amount for purposes of determining her guidelines
offense level. Relying on Government Exhibit 154 and a report prepared by her
expert, David Romero, Senninger took the position that she was responsible for a
total loss of only $6409.73. This amount represented the sum of the increases
Senninger made to the figures on the questionnaires she used to prepare the
amended returns listed in Exhibit 154, less any decreases she made to those
figures. Senninger argued any other refunds claimed on the amended returns were
amounts the taxpayers were “necessarily entitled” to receive and, thus, could not
be used to calculate either actual or intended loss.
The parties stipulated that only the amended tax returns listed in Exhibit
154 should be used to calculate the loss amount. They disagreed, however, over
the proper method of calculating the loss amount for both offense level and
restitution purposes. Senninger again argued the loss amount was limited to the
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net of the alternations she made to the information from the questionnaires when
she prepared the amended returns. The Government argued Senninger
participated in a scheme that resulted in a loss of $149,682.84, the total amount of
all federal and state refunds claimed on the returns listed in Exhibit 154. The
district court agreed with the Government, finding a loss amount of $149,682.84
and, accordingly, increasing Senninger’s offense level by ten levels. See USSG
§ 2B1.1(b)(1)(F).
The district court also granted the Government’s request for an upward
departure pursuant to USSG § 4A1.3(a)(1) and added two points to Senninger’s
criminal history calculation. Consequently, the court calculated Senninger’s
advisory guidelines range at thirty-three to forty-one months’ imprisonment based
on a total offense level of nineteen and a Category II criminal history. The court
rejected Senninger’s request for a downward variance and sentenced her to thirty-
six months’ imprisonment. The district court also ordered Senninger to pay
$120,558.27 in restitution to the IRS and $8106.00 to the CDR. The restitution to
the CDR was less than the loss amount attributable to the fraudulent state returns
because the CDR successfully collected a portion of the improperly paid refunds.
III. Discussion
In this appeal, Senninger first argues the district court erred in calculating
amount of loss. Because the amount of loss was used to determine Senninger’s
advisory guidelines range, this challenge is to the procedural reasonableness of
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her sentence. See United States v. Huckins, 529 F.3d 1312, 1317 (10th Cir.
2008). When determining whether the district court properly calculated a
defendant’s advisory guidelines range, this court reviews factual findings for
clear error and legal determinations de novo. United States v. Kristl, 437 F.3d
1050, 1054 (10th Cir. 2006). Senninger’s challenge to the district court’s
calculation of loss amount for purposes of USSG § 2B1.1 involves factual
findings that we review for clear error. See United States v. Sutton, 520 F.3d
1259, 1262 (10th Cir. 2008).
When sentencing a defendant convicted of an offense involving fraud, the
district court may use “either the actual or the intended loss to establish the
defendant’s offense level.” United States v. Masek, 588 F.3d 1283, 1287 (10th
Cir. 2009). Accordingly, the court need only make a reasonable estimate of either
“the reasonably foreseeable pecuniary harm that resulted from the offense,” or
“the pecuniary harm that was intended to result from the offense.” USSG § 2B1.1
cmt. n.3(a)(i), (ii)(I). Having reviewed the entire record, including Romero’s
report and the district court’s comprehensive explanation of why it rejected the
methodology advocated by Senninger, we discern no error in the district court’s
calculation of loss. As the court stated, Senninger was convicted of participating
in a scheme to defraud both the IRS and the CDR. To find Senninger guilty of
mail fraud, the jury was required to find she “knowingly devised or participated
in a scheme to obtain money by means of false representation.” Thus, the court
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looked at the totality of Senninger’s involvement in that scheme, concluding her
actions did not involve “simply filling in blanks on amended returns.” The
district court found Senninger “len[t] credibility to the entire operation. She lent
her credibility as having been an IRS auditor to this operation, and she knew she
was doing that when she gave the credentials to Mr. Harris.” The district court’s
finding is amply supported by the trial testimony of several witnesses who stated
they submitted amended returns through Olympia because Senninger’s credentials
conferred an air of legitimacy on the business. It is further supported by Harris’s
testimony that Senninger knew Olympia was using her credentials to market
services to taxpayers, and his testimony that Senninger trained him in how to
create fraudulent deductions and created false schedules to support those
deductions. Accordingly, the district court did not err in finding the loss
attributable to Senninger was the total amount claimed on the fraudulent amended
returns filed with IRS and the CDR. We conclude the district court fulfilled its
obligation to arrive at a reasonable estimate of the loss attributable to Senninger
and there was no clear error in its calculation.
Senninger next challenges the district court’s imposition of an upward
departure pursuant to USSG § 4A1.3. An upward departure may be warranted
“[i]f reliable information indicates that the defendant’s criminal history category
substantially under-represents the seriousness of the defendant’s criminal
history.” USSG § 4A1.3(a)(1). When considering a challenge to an upward
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departure, this court applies a four-factor analysis: “(1) whether the district court
relied on permissible departure factors, (2) whether those factors removed a
defendant from the applicable Guidelines heartland, (3) whether the record
supports the district court’s factual bases for a departure, and (4) whether the
degree of departure is reasonable.” United States v. Robertson, 568 F.3d 1203,
1211 (10th Cir. 2009). Senninger’s challenge is confined to the first factor.
Specifically, she asserts the district court was precluded from using her stale
convictions to increase her criminal history category because the Guidelines
specifically prohibit the sentence from being counted. Far from being supported
by the Guidelines, however, Senninger’s argument is directly foreclosed by them.
Section 4A1.2(e)(3) of the Guidelines excludes from a defendant’s criminal
history calculation any sentence not exceeding one year and one month if the
sentence was imposed more than ten years before the commencement of the
offense of conviction. The Application Notes to § 4A1.2, however, specifically
permit stale sentences to be considered by a court “in determining whether an
upward departure is warranted under § 4A1.3” if the court first finds that the stale
sentence “is evidence of similar, or serious dissimilar, criminal conduct.” USSG
§ 4A1.2 cmt. n.8. Here, the district court faithfully followed this approach by
finding that Senninger’s 1992 sentence was imposed for criminal conduct similar
to the conduct involved in the instant offense.
The conviction in 1992 in the Federal District Court in the
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District of Utah occurred when Ms. Senninger was 46 years old. She
was not a young woman. She was employed in a capacity with an
educational institution, where she was entrusted with information as
to the procedure used by students to obtain financial aid from the
Federal Government. She had a special skill. Using that skill, she
embezzled, misapplied, or obtained by fraud and false statement
federal loan money.
This offense occurred during Ms. Senninger’s sixth decade, her
60’s. Again she is a mature woman. It involved a special skill. It
involved the use of a special skill to defraud the Federal Government
by getting money ostensibly for a third party but ultimately resulting
in her benefit, too. It’s very similar. It’s hard to imagine a more
similar offense that’s not identical.
Senninger does not challenge the district court’s finding that the convictions are
similar. Because the Guidelines themselves specifically permit the exact
approach taken by the district court, we must reject Senninger’s argument that the
court erred by using her stale sentence as a basis for a § 4A1.3 upward departure.
Senninger’s final challenge is to the amount of restitution ordered by the
district court pursuant to the Mandatory Victims Restitution Act (“MVRA”). See
18 U.S.C. § 3663. “We review the district court’s application of the MVRA de
novo, review its factual findings for clear error, and review the amount of
restitution awarded for abuse of discretion.” United States v. Gallant, 537 F.3d
1202, 1247 (10th Cir. 2008). Senninger’s argument is two-pronged. She first
asserts the amount of restitution is limited to the losses stemming solely from the
counts of which she was convicted and not any counts of which she was
acquitted. Cf. Hughey v. United States, 495 U.S. 411, 418 (1990) (interpreting
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the restitution provision of the Victim and Witness Protection Act of 1982). She
then repeats the argument that the loss attributable to her actions is limited to the
net of the changes she personally made to the questionnaires.
The district court properly rejected both of Senninger’s arguments. As the
court recognized, by convicting Senninger of six counts of mail fraud and one
count of making a false claim against the Government, the jury necessarily found
she participated in the overall scheme to defraud the IRS and the CDR. Thus, the
district court was not limited to considering only the refunds paid by the IRS and
the CDR as a result of the conduct specifically enumerated in Counts 3-7, 10, and
19. 18 U.S.C. § 3663A(a)(2) (defining victim as “a person directly and
proximately harmed as a result of the commission of an offense for which
restitution may be ordered including, in the case of an offense that involves as an
element a scheme, conspiracy, or pattern of criminal activity, any person directly
harmed by the defendant’s criminal conduct in the course of the scheme,
conspiracy, or pattern); United States v. Gregoire, 638 F.3d 962, 972-73 (8th Cir.
2011) (“Restitution may be ordered for criminal conduct that is part of a broad
scheme to defraud, without regard to whether the defendant is convicted for each
fraudulent act in the scheme.” (quotation and alteration omitted)). Accordingly,
the district court did not err by ordering restitution for all actual losses suffered
by the IRS and the CDR arising from the entire scheme. For the same reasons we
rejected Senninger’s loss-calculation challenge to her advisory guidelines range,
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we also reject her second argument that she was only responsible for a fraction of
the losses suffered by the IRS and the CDR because her criminal conduct was
limited to making minor alterations to the refunds claimed on the amended
returns.
IV. Conclusion
Senninger’s sentence is affirmed.
ENTERED FOR THE COURT
Michael R. Murphy
Circuit Judge
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