United States v. Dullum ( 2009 )

Opinions of the United
2009 Decisions States Court of Appeals
for the Third Circuit
3-13-2009
USA v. Dullum
Precedential or Non-Precedential: Precedential
Docket No. 07-4502
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PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 07-4502
UNITED STATES OF AMERICA
v.
JARED DULLUM,
Appellant
Appeal from the United States District Court
for the District of New Jersey
(D.C. Criminal Action No. 06-cr-00676)
District Judge: Honorable Susan D. Wigenton
Submitted Under Third Circuit LAR 34.1(a)
January 30, 2009
Before: SCIRICA, Chief Judge, AMBRO,
and SMITH, Circuit Judges
(Filed: March 13, 2009)
Michael Chazen, Esquire
4400 Route 9 South, Suite 1000
Freehold, NJ 07728-0000
Counsel for Appellant
Christopher J. Christie
United States Attorney
George S. Leone
Chief, Appeals Division
Steven G. Sanders
Assistant U.S. Attorney
Office of the United States Attorney
970 Broad Street, Room 700
Newark, NJ 07102-0000
Counsel for Appellee
OPINION OF THE COURT
AMBRO, Circuit Judge
Jared Dullum appeals his sentence of 28 months’
imprisonment.1 He pled guilty to mail fraud, in violation of
1
The District Court had jurisdiction under 18 U.S.C. § 3231.
We have appellate jurisdiction under 28 U.S.C. § 1291 and
2
18 U.S.C. § 1341, and bank fraud, in violation of 18 U.S.C.
§ 1344. Dullum argues that his sentence was procedurally
unreasonable, asserting that the District Court erred in
m i s a p p l yi n g f i v e s e n t e n c i n g a d j u s t m e n t s : f o u r
enhancements—for a loss amount greater than $30,000,
vulnerable victim, abuse of trust, and obstruction of justice; and
one deduction for acceptance of responsibility. For the
following reasons, we affirm the sentence of the District Court.
I. Background
Dullum was a Special Agent with the U.S. Secret Service
and an active member of his New Jersey church. Within his
church, he served in a senior leadership position, teaching
classes and counseling fellow members who were struggling
with alcohol and substance abuse.
Two members Dullum worked with in this capacity were
Julie DeSacia and Nick Cetrulo, both recovering alcoholics and
drug addicts whom Dullum characterized as “a little slow.”
DeSacia and Cetrulo also struggled financially. DeSacia
received a monthly payment from the Plumber’s Union Pension
Fund and Cetrulo received disability benefits. Dullum also
offered to serve as the financial advisor to both persons. In June
2004, DeSacia became very ill, suffering from physical and
mental effects of cirrhosis of the liver. According to Dullum,
18 U.S.C. § 3742(a).
3
DeSacia told him that she wanted Cetrulo to be provided for
upon her death. Dullum prepared a will and associated trust, but
DeSacia never signed the documents before she died.
A. The Forged Will
After DeSacia died intestate in January 2005, Dullum
forged DeSacia’s signature on the will and trust, backdating
both documents to 2004. The will purported to name Dullum
the executor of the estate and Cetrulo the primary beneficiary.
Representing himself as executor, Dullum got the Pension Fund
to send him a check for $29,352.76, which was DeSacia’s lump-
sum payout. He deposited the check into an estate bank account
he had opened, and then transferred the proceeds to his personal
account.
Dullum did not inform DeSacia’s family that he was
acting as executor. He told Cetrulo that the will named Cetrulo
as the estate’s primary beneficiary. Yet Dullum only gave
Cetrulo an amount less than $8,000, which he represented as the
full proceeds of the estate.2 Dullum later admitted that he paid
2
At the sentencing hearing, a Secret Service agent involved
in the investigation who had interviewed Cetrulo explained that,
although Dullum paid Cetrulo approximately $8,000, the latter
“gave [Dullum] back [$]8,500” based on a list Dullum created
purportedly to repay him for “toys” and other things. Thus, the
overall loss to Cetrulo was approximately $500. According to
4
Cetrulo to stop him from “pressuring me for my help” and
asking questions about the will. He also told the estate’s
creditors that the estate had little or no money, so it could not
pay most of its outstanding debts.
The Secret Service began an internal investigation
concerning these issues in July 2005, after Dullum’s bank
communicated with the agency to report suspicious activity
involving his accounts. When agents questioned Dullum about
the bank transfer from the estate’s account to his personal
account, he claimed that DeSacia had rented his beach house.
In support of this contention, he produced a fabricated $20,000
promissory note made out to him and purportedly executed by
DeSacia.
B. The Bank Fraud Scheme
Dullum owned rental property at the New Jersey shore.
In May 2005, Tony Woods emailed Dullum and expressed
interest in renting the property. Woods sent Dullum a rent check
for $10,500.87 in the name of Reverend Frank Mirocco from the
National Bank of Coxsackie. Dullum suspected that this check
was fraudulent because he had personal and professional
experience with this type of fraud. Yet he still deposited the
check into the estate bank account.
the agent, Dullum could not produce or replicate the list and it
“did not seem like it was going to add up to [$]8,500.”
5
After depositing the check, Dullum emailed Woods and
falsely claimed that he had not received the rent check. He
asked Woods to send a new check made out to DeSacia, whom
he claimed was his wife. Woods sent him another check for
$10,000.35 in the name of Reverend Mirocco, which Dullum
also deposited in the estate account. After both checks cleared,
he immediately transferred the proceeds to his personal bank
account.
The drawee bank returned both checks to Dullum’s bank
as fraudulent. His bank froze his accounts and filed a
Suspicious Activity Report with the Secret Service. Dullum
repaid the bank the amounts for the two checks, though only
after the bank had frozen his accounts and the Secret Service
had interviewed him on three occasions as part of its
investigation. The third interview occurred just two days before
he wrote a check to the bank replacing the funds.
C. Indictment and Sentencing
In August 2006, a federal grand jury indicted Dullum on
one count of mail fraud and one count of bank fraud. He pled
guilty to both counts. The Presentence Report prepared by the
Probation Office (the “PSR”) calculated Dullum’s total federal
Sentencing Guidelines offense level under the U.S. Sentencing
Commission Guidelines Manual (hereinafter “Guidelines” or
“U.S.S.G.”) as follows:
6
Base offense level 7
Loss of $39,254.11 +6
Vulnerable Victim +2
Abuse of Trust +2
Obstruction of Justice +2
Acceptance of Responsibility -3
—
Total Offense Level 16
The PSR set Dullum’s advisory Guidelines range at 21 to
27 months’ imprisonment.
At the sentencing hearing, Dullum objected to all four
Guidelines enhancements, arguing that this total offense level
should be 8 (7 plus, as noted below, 4 for the loss less 3 for
acceptance of responsibility). The District Court overruled his
objections. The Court adopted the PSR except for the
recommended three-level acceptance-of-responsibility
deduction. In accord with the Government’s position, it found
that Dullum’s post-plea statements failed to show that he truly
accepted responsibility. It awarded him only a one-level
reduction for avoiding a trial and pleading guilty. Thus, his total
offense level was 18, with an advisory Guidelines range of 27 to
33 months’ imprisonment. The Court discussed the 18 U.S.C.
§ 3553(a) factors and then sentenced Dullum to 28 months’
imprisonment and 3 years’ supervised release, along with
$29,253.76 in restitution and a $40,000 fine.
7
II. Analysis
A. Loss Amount Enhancement
We review the District Court’s factual findings for clear
error. United States v. Grier, 475 F.3d 556, 561 (3d Cir. 2007)
(en banc). This applies to the loss calculations Dullum
complains of under Guidelines § 2B1.1. See United States v.
Ali, 508 F.3d 136, 143 (3d Cir. 2007) (citing Grier, 475 F.3d at
570). Section 2B1.1 is the Guidelines section applicable to
Dullum’s fraud offenses. U.S.S.G. § 2B1.1 (“Larceny,
Embezzlement, and Other Forms of Theft . . . .”). This section
sets his base offense level at 7, which he does not dispute.
Subsection 2B1.1(b)(1) lists enhancements to the base offense
level that depend on the amount of loss.
Dullum argues that the District Court erred in applying a
six-level enhancement under Guidelines § 2B1.1(b)(1)(D) for a
loss amount greater than $30,000 because his bank fraud scheme
caused no loss. If the loss amounts associated with the
counterfeit check were deducted from the District Court’s total
loss finding of approximately $39,000, then the remaining loss
for purposes of applying the enhancement would have included
only the proceeds of the Pension Fund, or approximately
$29,000.3 Thus, he contends that he should have been subject
3
As we noted in the background section, Dullum cashed two
counterfeit checks from Woods for approximately $10,000 each.
8
to a four-level enhancement under Guidelines § 2B1.1(b)(1)(C),
which represents a loss amount of more than $10,000 but less
than $30,000.
The commentary to the enhancement portion of this
Guidelines section requires district courts to use “the greater of
actual loss or intended loss” for fraud offenses. U.S.S.G.
§ 2B1.1 App. N. 3(A). The “government’s burden is to prove
intended, not possible, loss if it seeks to increase the guideline
levels faced by the defendant under § 2F1.1.” United States v.
Geevers, 226 F.3d 186, 192 (3d Cir. 2000) (citing United States
v. Yeaman, 194 F.3d 442, 460 (3d Cir. 1999)) (discussing a
Guidelines section that was deleted and consolidated with
§ 2B1.1 in 2001). We have held that, in counterfeit check cases,
a “district court does not . . . commit error when, in the absence
of sufficient evidence to the contrary, it fixes the [G]uidelines
range based upon a presumption that the defendant intended to
defraud the banks of the full face amount of the worthless
checks.” Id. at 188.
The fraudulent check amount that Dullum argues should
not be included in the total loss for purposes of determining his
At the sentencing hearing, the District Court referred only to one
check for purposes of determining the loss enhancement. It
stated: “[T]here were two checks for $10,000. And based on the
plea agreement, and based on the plea, it’s conceded we’re
talking about one check for $10,000.”
9
enhancement was the $10,000 rental check he cashed, which
served as the basis for the bank fraud count. He admitted,
however, that he intended the money to “help out some of [his]
financial burdens,” including a withdrawal of $7,000 to pay
back his home equity line and his intention to use the money to
cover any outstanding payments on the rental property if
necessary. He only repaid to the bank the fraudulent check
amount after a Secret Service investigation had begun and his
accounts were frozen. Dullum did not provide any evidence to
the contrary at sentencing. See id. at 194 (holding that a
sentencing judge may consider the face value of deposited
checks as “sufficient evidence that it was the intended loss,”
although it cannot “mechanically” be assumed, and the
defendant can then “produce evidence of his or her own in an
attempt to convince the court that another figure was intended”);
United States v. Strozier, 981 F.2d 281, 285 (7th Cir. 1992)
(“No evidence presented at the sentencing hearing supported
counsel’s appraisal of his client’s motivations, and we refuse to
overturn the district court’s sentence on the basis of speculation
in the valley of dreams.”). This chain of events shows that the
District Court did not err in finding that Dullum intended to
cause a loss for the full amount of the check.
Dullum also argues that he is entitled to credit for
repayment of the loss amount based on Application Note 3(E)
to Guidelines § 2B1.1. This Application Note states, however,
that a defendant must make his repayment before the crime is
uncovered. U.S.S.G. § 2B1.1 App. N. 3(E)(i). “The time of
10
detection of the offense is the earlier of (I) the time the offense
was discovered by a victim or government agency; or (II) the
time the defendant knew or reasonably should have known that
the offense was detected or about to be detected by a victim or
government agency.” Id. Based on Dullum’s own admissions,
he repaid the money only after the bank detected the fraud,
notified him regarding the fraudulent checks, froze his accounts,
and the Secret Service began its investigation. Thus, the District
Court did not err in finding that this Application Note does not
apply to Dullum’s situation.
Dullum makes a related argument under subpart (ii) of
the same Application Note. Id. § 2B1.1 App. N. 3(E)(ii) (prior
to the 2006 Guidelines, listed as App. N. 2(E)(ii)). It concerns
“the determination of loss under subsection (b)(1)” and applies
subpart (E)(ii) to “case[s] involving collateral pledged or
otherwise provided by the defendant.” Id. Dullum contends that
the loss associated with the fraudulent check should be reduced
to zero because he had other funds in his bank accounts to offset
the bad check. There is no case law on this issue in our Circuit.
Based on a common sense reading of the Application Note’s
straightforward language, however, we believe the correct
interpretation limits its application to situations involving a
traditional notion of collateral, such as fraudulently inducing a
bank to issue a secured loan. Dullum’s fraud is more akin to
theft than the additional risk of loss that he would have incurred
if he had pledged his own collateral to secure a loan. We know
of no court applying the Note to a circumstance similar to
11
Dullum’s. Indeed, the opposite is true. See United States v.
Swanson, 360 F.3d 1155, 1169 (10th Cir. 2004) (rejecting
defendant’s claim that “any overdrafts on his accounts were
secured by collateral he had previously pledged to the bank on
various loans”); see also United States v. Goss, 549 F.3d 1013,
1017–18 (5th Cir. 2008) (discussing a credit for loan collateral
when calculating loss).
Dullum’s bank accounts were not formally pledged as
collateral. Further, he did not provide the Court with any
evidence beyond his in-court statements that, based on his
account agreement, the bank could have taken funds from his
other bank accounts to recover the amount lost on the fraudulent
check. Nor did he provide any evidence that the other funds
unrelated to his mail fraud offense were sufficient to cover any
portion of the check amount. In this context, we conclude that
the District Court’s application of § 2B1.1(b)(1)(D) for a loss
amount greater than $30,000, instructing a six-level
enhancement, was appropriate.
B. Vulnerable Victim Enhancement
Dullum next argues that DeSacia and Cetrulo were not
vulnerable and were not direct victims, such that the District
Court erred in applying a two-level enhancement under
Guidelines § 3A1.1(b)(1). The District Court did not err in
considering Dullum’s actions towards DeSacia and Cetrulo prior
to DeSacia’s death relevant conduct under Guidelines § 1B1.3
12
calling for the enhancement. See United States v. Monostra, 125
F.3d 183, 189 (3d Cir. 1997) (indicating that this enhancement
is not limited “to situations in which the vulnerable person was
the [direct] victim of the offense of conviction[, but that] courts
may look to all the conduct underlying an offense, using § 1B1.3
[relevant conduct] as a guide”); see also United States v. Zats,
298 F.3d 182, 184–85 (3d Cir. 2002). Based on the evidence
presented to the Court, it found that DeSacia and Cetrulo were
vulnerable and that Dullum used their vulnerabilities (including
their history of substance abuse, that they were “a little slow,”
and DeSacia’s suffering from physical and mental effects of
cirrhosis before her death) to act as their financial advisor and
gain access to the financial information needed to follow
through on the fraud. See id. at 190 (stating that for the
enhancement to apply, there must be a showing that the victim’s
“vulnerability or susceptibility facilitated the defendant’s crime
in some manner”). There is no question that these
circumstances qualify DeSacia as “vulnerable” (even if the
direct victim was her estate), and there need only be one
vulnerable victim for the two-level enhancement to apply.4 See
U.S.S.G. § 3A1.1(b)(1).
4
Cetrulo may have been a vulnerable victim as well, but we
need not reach that question because we have determined that
the District Court did not err in finding that DeSacia was a
vulnerable victim.
13
C. Abuse of Trust Enhancement
The District Court found Dullum “abused a position of
public and private trust” toward DeSacia and Cetrulo because he
was a Secret Service agent and a trusted advisor at church. See
U.S.S.G. § 3B1.3. The two-level enhancement under the abuse
of trust Guidelines section is only applicable to defendants who
use their “position of public or private trust . . . in a manner that
significantly facilitate[s] the commission or concealment of the
offense.” Id. Dullum argues the Court’s findings were not
sufficient for this enhancement. He contends that “[w]hatever
relationship [he] had with DeSacia or Cetrulo, it was not the
type of case contemplated by this particular adjustment.”
Appellant’s Br. 13. In support, he cites to United States v.
Pardo, 25 F.3d 1187 (3d Cir. 1994), where we discerned no
position of trust when the defendant’s position as a long-time
friend of the bank manager facilitated his defrauding the bank.
As whether “defendant occupied a position of trust is a legal
question, we review this de novo. But we review the District
Court’s finding that the defendant abused a position of trust for
clear error, as this is a factual question.” United States v. Hart,
273 F.3d 363, 376 (3d Cir. 2001) (internal citations omitted)
(emphasis added) (determining that certain stockbrokers were in
positions of trust).
“Neither § 3B1.3 nor its applicable Commentary clearly
defines what is meant by a position of trust.” Id. at 375 (internal
quotations omitted) (quoting United States v. Iannone, 184 F.3d
14
214, 222 (3d Cir. 1999)). Pardo set out a three-part test for
determining whether a position is one of trust: “(1) whether the
position allows the defendant to commit a difficult-to-detect
wrong; (2) the degree of authority which the position vests in
defendant vis-a-vis the object of the wrongful act; and (3)
whether there has been reliance on the integrity of the person
occupying the position.” 25 F.3d at 1192. We noted that these
factors should be considered in light of the guiding rationale of
the section: “to punish ‘insiders’ who abuse their positions
rather than those who take advantage of an available
opportunity.” Id. We recognized that the Application Note to
this section refers to these positions in a professional capacity,
but stated that “we are unwilling to draw a bright line limiting
the abuse of trust increase to the employment relationship.” Id.
at 1190–91 (citing cases from other courts where a mother,
babysitter, and stepfather, respectively, were found to be in
positions of trust).
Through Dullum’s involvement with his church, he
formally acted as a teacher, advisor, and counselor to DeSacia
and Cetrulo. 5 He spent substantial time with DeSacia and
Cetrulo over approximately three years as a trusted church figure
of authority, counseling them with respect to their substance and
alcohol abuse, and as their financial advisor. In this capacity,
5
During an interview with Secret Service agents, Cetrulo
indicated that, in addition to Dullum’s position in the church, he
further trusted Dullum because he was a Secret Service agent.
15
Dullum had the ability and “‘freedom to commit a difficult-to-
detect wrong’” in forging DeSacia’s will and acting as her
executor. Id. at 1191–92 (quoting United States v. Lieberman,
971 F.2d 989, 993 (3d Cir. 1992)). He was not simply “tak[ing]
advantage of an available opportunity.” Id. at 1192. Regional
branches of Dullum’s church are led by select congregants.
Undoubtedly, in Dullum’s senior position, DeSacia and Cetrulo
relied on his integrity. He was certainly more than the “friend”
in Pardo. See id. Thus, we hold that Dullum’s position was a
private position of trust. Further, the Court did not err in finding
that Dullum abused that position to apply the two-level
enhancement under § 3B1.3.6 See U.S.S.G. § 3B1.3 (requiring
that a defendant’s abuse of the position of trust “significantly
facilitated the commission or concealment of the offense”).
D. Obstruction-of-Justice Enhancement
Dullum objects to the two-level enhancement for
obstruction of justice under Guidelines § 3C1.1. This argument
has no traction.7 During the Secret Service’s investigation,
6
Because we have determined that Dullum abused his
position of trust in a private capacity, we need not reach whether
he also abused that position in a public capacity.
7
Dullum’s subsidiary arguments—that his statements were
not under oath and that he was not charged with violating 18
U.S.C. § 1001—are clearly wrong.
16
agents interviewed Dullum three times and he provided five
sworn statements under oath attesting to the accuracy of the
information he provided. Four of those statements contained
lies about the counterfeit checks and how he came to serve as
executor of DeSacia’s estate. He also provided a forged
promissory note to agents during his third interview and failed
a polygraph examination. The District Court relied on this
information in applying the enhancement.
Dullum thus falls squarely within § 3C1.1, which states
in pertinent part:
If (A) the defendant willfully obstructed or
impeded, or attempted to obstruct or impede, the
administration of justice with respect to
the . . . prosecution . . . of the instant offense of
conviction, and (B) the obstructive conduct
related to (i) the defendant’s offense of conviction
and any relevant conduct; . . . increase the offense
level by 2 levels.
Application Note 4, titled “Examples of Covered Conduct,” sets
out “a non-exhaustive list of examples of the types of conduct
to which this enhancement applies.” The examples specifically
attributable to Dullum’s actions include “producing or
attempting to produce a false, altered, or counterfeit document
or record during an official investigation,” and “providing a
materially false statement to a law enforcement officer that
17
significantly obstructed or impeded the official investigation.”
U.S.S.G. § 3C1.1 App. N. 4(c), (g).
In an attempt to cover up his wrongdoing, Dullum
manipulated the truth throughout the investigation by providing
several false statements and documents to Secret Service agents.
Only after repeated interviews did he more truthfully discuss his
actions in his fifth and final sworn statement. Thus, we
conclude that this enhancement was hardly an error.
E. Acceptance-of-Responsibility Deduction
Dullum’s final argument is that he should have received
the three-level deduction for acceptance of responsibility
recommended in the PSR. See U.S.S.G. § 3E1.1. The District
Court only reduced his offense level by one because he pled
guilty and avoided going to trial. It refused to grant the
additional two levels because it found that Dullum did not
“clearly demonstrate[] acceptance of responsibility for his
offense.” 8 Id.
8
Section 3E1.1 is set up such that a one-level deduction for
avoiding trial under subsection (b) can only be applied if the
defendant qualifies for a two-level deduction for “clearly
demonstrat[ing] acceptance of responsibility” under subsection
(a). Dullum argues that the Court “necessarily had to find him
eligible for the reduction” under subsection (a). We doubt this
given its strong statements against Dullum’s full acceptance of
18
At sentencing, the Court extensively discussed its disdain
for Dullum’s conduct. It found that he refused to take full
responsibility for his behavior based on his pre-sentencing letter
to the Probation Office and his statements before the Court. He
reiterated that he was just trying to help people and that he
“believed he was acting in the best interest of Cetrulo and
carrying out DeSacia’s wishes.” In support of its ruling, the
Court stated that the acceptance of responsibility deduction was
not a matter of “right.” See id. App. N. 3 (“[E]vidence of
acceptance of responsibility . . . . may be outweighed by conduct
of the defendant that is inconsistent with such acceptance of
responsibility. A defendant who enters a guilty plea is not
entitled to an adjustment under this section as a matter of
right.”); see also United States v. O’Neal, 969 F.2d 512, 515
(7th Cir. 1992) (affirming denial of acceptance-of-responsibility
deduction because “neither the defendant’s letter to the
probation officer purporting to accept responsibility, nor his
written statement purporting to show acceptance of
responsibility, recognized that he was at fault and responsible
for the kidnapping and resultant batteries. If anything, his
statement sought to blame the victim for the crime.”).
responsibility at the sentencing hearing. Thus, Dullum may not
have been eligible for the one-level deduction the Court granted.
While the Government points this out, Gov’t Resp. Br. at 41, it
simply argues that “Dullum, therefore, cannot claim to have
been aggrieved by the District Court’s error.” Id. at 42. We too
go no further.
19
Application Notes 4 and 5 apply to Dullum as well. Note
4 states that “[c]onduct resulting in an enhancement under
§ 3C1.1 (Obstructing or Impeding the Administration of Justice)
ordinarily indicates that the defendant has not accepted
responsibility for his criminal conduct.” 9 U.S.S.G. § 3E1.1 App.
N. 4. (As noted, Dullum received a two-level enhancement at
sentencing under § 3C1.1.) Note 5 states that “[t]he sentencing
judge is in a unique position to evaluate a defendant’s
acceptance of responsibility. For this reason, the determination
of the sentencing judge is entitled to great deference on review.”
Id. App. N. 5; see also United States v. Stewart, 452 F.3d 266,
273 (3d Cir. 2006). In this context, the Court was well within its
discretion to vary from the PSR recommendation in granting a
one-level deduction.
* * * * *
We thus affirm the sentence imposed by the District
Court.
9
Dullum alternatively claims that the District Court
mechanically denied his acceptance-of-responsibility deduction
because of the obstruction-of-justice enhancement. To the
contrary, the Court did not even mention this Application Note
as the basis for its ruling at sentencing.
20