United States v. Dianne Kennedy ( 2009 )

Opinions of the United
2009 Decisions States Court of Appeals
for the Third Circuit
2-4-2009
USA v. Dianne Kennedy
Precedential or Non-Precedential: Precedential
Docket No. 08-1172
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PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 08-1172
UNITED STATES OF AMERICA,
v.
DIANNE L. KENNEDY,
Appellant.
On Appeal from the United States District Court
for the Western District of Pennsylvania
(D.C. No.: 06-cr-00030)
District Judge: Honorable Terrence F. McVerry
Argued October 1, 2008
Before: FISHER, CHAGARES and HARDIMAN, Circuit
Judges.
(Filed: February 4, 2009 )
Robert L. Eberhardt (Argued)
Office of the United States Attorney
700 Grant Street
Suite 4000
Pittsburgh, PA 15219
Attorney for Appellee
Karen S. Gerlach (Argued)
Office of Federal Public Defender
1001 Liberty Avenue
1450 Liberty Center
Pittsburgh, PA 15222
Attorney for Appellant
OPINION OF THE COURT
HARDIMAN, Circuit Judge.
Dianne Kennedy appeals the District Court’s judgment of
sentence following her pleas of guilty to ten counts of an
indictment. Kennedy challenges three enhancements pursuant
to the United States Sentencing Guidelines (Guidelines or
USSG). The application of one of those enhancements — the
number of victims pursuant to USSG § 2B1.1(b)(2) — has
challenged trial and appellate courts because the language of the
enhancement and its commentary define “victim” more narrowly
than the commonsense understanding of that term. We hold that
we are bound by the clear language of the Guidelines, and find
that only those who are actually harmed by the crime can be
counted as victims for purposes of USSG § 2B1.1(b)(2). Our
2
finding that the § 2B1.1(b)(2) enhancement does not apply does
not mean that Kennedy’s crime is not serious. Under the post-
Booker sentencing framework, the Guidelines are advisory and
district judges must use their discretion to ensure that each
sentence is commensurate with the crime.
I.
From September 1999 to August 2001, Dianne Kennedy
worked as a representative payee liaison for Ursuline Services,
Inc., a non-profit corporation that assists the elderly in
Pittsburgh, Pennsylvania.1 As a representative payee, Ursuline
managed funds payable to beneficiaries of the Social Security
Administration, the Department of Veterans Affairs, and the
Railroad Retirement Board who were unable to manage their
own financial affairs. In this capacity, Ursuline received benefit
payments, held funds in trust, and made disbursements to cover
beneficiaries’ expenses, such as rent, utilities, and food. For
example, if PNC Bank notified Ursuline of a deposit by a
government program in the name of a specific beneficiary, that
amount would be added to the internal Ursuline account for that
individual. The representative payee liaison would then write
checks from the internal account to cover the beneficiary’s
living expenses. Thus, in fulfilling her duties, Kennedy was
aware of the beneficiary’s account balances and oversaw their
1
From August 2001 until December 2001, Kennedy was
reassigned to the guardian section where she performed
“guardian of the prison” duties rather than fiduciary duties. She
was terminated in December 2001.
3
financial transactions. From February 2, 2001 to April 9, 2001,
Kennedy wrote checks, mostly payable to cash, from the
accounts of 34 beneficiaries. Ursuline and its insurer, Zurich
American Insurance Company, fully replenished the accounts
that Kennedy looted.
Kennedy was indicted on four counts of mail fraud in
violation of 18 U.S.C. § 1341, and six counts of making and
using false writings or documents in violation of 18 U.S.C.
§ 1001(a)(3). Kennedy promptly pleaded guilty and the
Probation Office issued a Presentence Investigation Report
(PSR), which calculated an advisory Guidelines imprisonment
range of 21 to 27 months based on an adjusted total offense
level of 15 and a criminal history category of II. Although
Kennedy’s base offense level was only six, the Probation Office
found her subject to four enhancements: (1) six points for the
amount of loss ($54,321.12), USSG § 2B1.1(b)(1)(D); (2) two
points for ten or more victims, USSG § 2B1.1(b)(2)(A); (3) two
points for vulnerable victims, USSG § 3A1.1(b)(1); and (4) two
points for abusing a position of trust, USSG § 3B1.3.
At sentencing, Kennedy did not challenge the amount of
loss, but she objected to the other three sentencing
enhancements. First, she claimed that her only victims were
Ursuline and Zurich, which rendered the enhancement for ten or
more victims inappropriate. Second, Kennedy argued that
because Ursuline and Zurich were the only victims, they did not
qualify as “vulnerable victims” under the Guidelines. Finally,
Kennedy disputed the application of the abuse of a position of
trust enhancement.
4
In addition, Kennedy argued that her criminal history
category of II was inaccurate because it was based on an offense
that occurred after the instant offense. Finally, she requested a
downward variance and a mitigated sentence of twelve months
and one day because she was the sole provider for her mother
and mentally challenged granddaughters.
The District Court rejected Kennedy’s objections to the
sentencing enhancements, as well as her request for a variance
on the basis of her family circumstances. The District Court
held a sentencing hearing and reduced Kennedy’s criminal
history category to I, thereby adjusting her Guidelines
imprisonment range to 18 to 24 months. Kennedy was
sentenced to 18 months imprisonment and three years of
supervised release, and was ordered to pay restitution to
Ursuline ($29,321.12) and Zurich ($25,000).
II.
In this appeal, Kennedy challenges the same three
enhancements to which she objected at sentencing. She also
claims that the District Court applied the wrong legal standard
in denying her request for a variance.
The District Court’s interpretation of the Sentencing
Guidelines is subject to plenary review. United States v.
Moorer, 383 F.3d 164, 167 (3d Cir. 2004). We review findings
of fact that support Guidelines enhancements for clear error.
See United States v. Grier, 475 F.3d 556, 569 (3d Cir. 2007) (en
banc). We review the sentence itself for reasonableness under
an abuse of discretion standard. United States v. Gunter, 527
5
F.3d 282, 284 (3d Cir. 2008) (citing Gall v. United States, 128
S. Ct. 586, 597-98 (2007)).
III.
A.
We begin by considering whether the District Court erred
in finding that each of the 34 individual account holders was a
victim under § 2B1.1(b)(2)(A) of the Guidelines. Although
these 34 elderly and incapacitated clients would satisfy a
commonsense or dictionary2 definition, our task here is to
determine whether they are deemed victims under the
Sentencing Guidelines’ definition. If, as here, “a statute
includes an explicit definition, we must follow that definition,
even if it varies from that term’s ordinary meaning.” See
Biskupski v. Attorney General, 503 F.3d 274, 280 (3d Cir. 2007)
(citing Stenberg v. Carhart, 530 U.S. 914, 942 (2000)); see also
Meese v. Keene, 481 U.S. 465, 484 (1987) (recognizing “the
respect we normally owe to the Legislature’s power to define the
terms that it uses in legislation”); Lawson v. Suwannee Fruit &
S.S. Co., 336 U.S. 198, 201 (1949) (“Statutory definitions
control the meaning of statutory words . . . .”). Additionally,
“where a definition informs what a particular term “means,” that
2
See, e.g., Oxford English Dictionary (2d ed. 1989)
(defining “victim” as “one who suffers some injury, hardship, or
loss, is badly treated or taken advantage of, etc.”); Black’s Law
Dictionary (8th ed. 2004) (defining “victim” as “a person
harmed by a crime, tort, or other wrong”).
6
definition will include whatever express meanings follow.”
Biskupski, 503 F.3d at 280 (citing Colautti v. Franklin, 439 U.S.
379, 392 n.10 (1979) (“As a rule, [a] definition which declares
what a term ‘means’ . . . excludes any meaning that is not
stated.”) (quotation marks and citation omitted), overruled in
part on other grounds by Webster v. Reproductive Health Servs.,
492 U.S. 490 (1989)).
The critical word — “victim” — is defined in the
commentary as “any person who sustained any part of the actual
loss . . . .” See USSG § 2B1.1(b)(2), cmt. n. 1. “Actual loss,”
in turn, is defined as “the reasonably foreseeable pecuniary harm
that resulted from the offense.” See cmt. n. 3(A)(i). Application
Note 3(A)(i) explains that “‘pecuniary harm’ means harm that
is monetary or that otherwise is readily measurable in money,”
and “does not include emotional distress, harm to reputation, or
other non-economic harm.” Id. at cmt. n.3(A)(iii). Additionally,
certain damages are specifically excluded from “loss,” such as
“[i]nterest of any kind, finance charges, late fees, penalties,
amounts based on an agreed-upon return or rate of return, or
other similar costs.” See cmt. n. 3(D)(i).
Kennedy admitted to stealing from 34 individual
accounts. It is undisputed, however, that those account holders
did not “sustain[] any part of the actual loss” because they were
reimbursed by Ursuline and Zurich. Indeed, the Government
failed to meet its burden to prove that the account holders even
knew that their funds had been stolen before they were
completely reimbursed by Ursuline and Zurich. Because
Ursuline and Zurich were the only parties who suffered any
pecuniary harm — which is a prerequisite for being deemed a
7
“victim” under § 2B1.1(b)(2) — they are the only “victims”
under the Guidelines. Accordingly, we hold that the District
Court committed legal error when it held that the 34 account
holders were “victims” under USSG § 2B1.1(b)(2)(A) despite
suffering no pecuniary harm.
B.
Our interpretation of § 2B1.1(b)(2)(A) of the Guidelines
is consistent with United States v. Yagar, 404 F.3d 967 (6th Cir.
2005), United States v. Icaza, 492 F.3d 967 (8th Cir. 2007), and
United States v. Conner, 537 F.3d 480 (5th Cir. 2008).
In Yagar, the defendant used stolen checks to deposit in
excess of $88,000 into more than 50 individual accounts at five
banks. 404 F.3d at 988. Yagar then withdrew portions of the
deposited funds from 47 of those accounts, receiving over
$20,000 in cash. Id. Although the parties agreed that the five
banks were victims, the Government argued that the account
holders were also victims. Id. at 971. Analyzing § 2B1.1(b)(2),
the Sixth Circuit rejected the Government’s argument, finding
that the account holders did not suffer an “actual loss” because
“they were fully reimbursed for their temporary financial
losses.” Id.
In Icaza, the defendants traveled across the country
stealing from Walgreens stores. 492 F.3d at 968-69. The
district court counted each of the approximately 400 stores that
were robbed as a “victim” under § 2B1.1(b)(2). Id. at 969. On
appeal, the defendants argued that only the Walgreens
corporation was a “victim” under USSG § 2B1.1(b)(2). The
8
Court of Appeals for the Eighth Circuit agreed, stating that
“only the Walgreens corporation sustained an actual loss”
because no individual Walgreens store “ultimately bore the
pecuniary harm.” Id. This conclusion was supported by the fact
that the restitution order required payments to be made to the
Walgreens corporation, not to individual stores. Id. at 969.
Thus, under the Eighth Circuit’s analysis, if an individual does
not ultimately sustain any pecuniary harm, he cannot be said to
have suffered an “actual loss.”
The Court of Appeals for the Fifth Circuit followed the
logic of Icaza in United States v. Conner, 537 F.3d 480 (5th Cir.
2008). There, Conner used eBay to resell power tools purchased
with gift cards that he bought with unauthorized credit accounts.
Id. at 483. Because all of the account holders were reimbursed
by their credit card companies, Conner argued that only the five
credit card companies should be counted as victims. The district
court disagreed and imposed a two-point enhancement under §
2B1.1(b)(2) based on the number of individual account holders,
on the assumption that at least some of the defrauded
cardholders had paid their bills before being reimbursed. The
Fifth Circuit reversed, finding that because the individual
accounts were all reimbursed, they had not suffered any
pecuniary harm “that resulted from” the offense. Id. at 489.
Although the courts of appeals in Yagar, Icaza, and
Conner held that each individual was not a “victim,” two of
those courts stated in dicta that an individual who was fully
reimbursed might qualify as a “victim” under certain
circumstances. The Yagar court noted that there “may be
situations in which a person could be considered a ‘victim’
9
under the Guidelines even though he or she is ultimately
reimbursed.” 404 F.3d at 971. The key factor, according to the
Sixth Circuit, is whether a potential victim “suffered [an]
adverse effect as a practical matter from [the defendant’s]
conduct.” Id. On the facts of Yagar, however, “the monetary
loss [was] short-lived and immediately covered by a third-party”
such that the individuals whose identities were stolen did not
suffer any “actual loss” or “pecuniary harm.” Id. Likewise, the
court in Conner left open the possibility “that with a proper
evidentiary foundation these types of unreimbursed business
losses could be considered ‘actual losses’ for the purposes of
counting ‘victims.’” 537 F.3d at 491.
The Second, Ninth and Eleventh Circuits have deemed
individual account holders to be “victims” under USSG §
2B1.1(b)(2). See United States v. Abiodun, 536 F.3d 162 (2d
Cir. 2008); United States v. Pham, 545 F.3d 712 (9th Cir. 2008);
United States v. Armstead, - - F.3d - -, No. 06-30550, 2008 WL
5398999 (9th Cir. Dec. 30, 2008); United States v. Lee, 427 F.3d
881, 894 (11th Cir. 2005). We do not view this as a circuit split,
however, as these opinions agreed with the principles
established in Yagar, but found that the facts of each case fell
within the Yagar carve-out for those who could be considered
victims, despite ultimately being reimbursed, because they
suffered some additional harm.
The Eleventh Circuit held that those who recover
collateral, or who have their money or property returned, suffer
a loss under the Guidelines when they are not fully reimbursed.
United States v. Lee, 427 F.3d 881, 894 (11th Cir. 2005). Lee
distinguished Yagar by observing that the Yagar account holders
10
were able to receive prompt reimbursement from their banks,
whereas the creditors in Lee suffered foreclosures or other
repossession processes to recoup losses, and even then the
creditors were not fully reimbursed. Id. at 895. Lee is also
distinguishable because restitution was made to the victims by
the defendants themselves, not by a third party bank or credit
card company, and then only after time-consuming efforts by the
victims. See id. at 885-86.
Similarly, in United States v. Pham, the victims actively
pursued reimbursement, despite being fully reimbursed. Pham,
545 F.3d at 712. In Pham, the defendant stole confidential
information from fifty or more persons and used it to withdraw
money from their accounts. The Ninth Circuit found that the
theft of this personal information and withdrawal of money
resulted in “reasonably foreseeable pecuniary harm” to those
account holders, thus causing them to suffer “actual loss” within
the meaning of the Guidelines. Id. at 716. In doing so, the
Ninth Circuit relied on victim impact statements, which made
clear that some account holders had to spend several weeks
seeking reimbursement, and it rejected the argument that a
victim must suffer additional pecuniary harm other than the
reimbursed loss. See id. at 718. The Court agreed with the
sentencing judge’s conclusion that because some account
holders spent time, effort, and money before receiving
reimbursement, they were victims under § 2B1.1(b)(2).
The Ninth Circuit recently clarified its interpretation of
§ 2B1.1(b)(2) in United States v. Armstead, - - F.3d - -, 2008
WL 5398999, finding that it had to analyze the loss calculation
to determine whether one was a victim. If a person suffered
11
pecuniary harm beyond the amount by which he was reimbursed
(including harm related to time and effort of seeking
reimbursement), then that amount should be included in the loss
calculation, and that person would properly be considered a
victim. Id. at *12. The court ultimately found that the
enhancement for fifty or more victims could not apply because
only the loss incurred by 16 victims was counted in the loss
calculation. Id.
The Second Circuit has established a more expansive test
than Yagar to determine whether individuals who are ultimately
reimbursed by their banks or credit card companies can be
considered “victims” under § 2B1.1(b)(2). See United States v.
Abiodun, 536 F.3d at 168-69. Under this test, an individual is
considered a victim if she suffered: “(1) an adverse effect (2) as
a result of the defendant’s conduct that (3) can be measured in
monetary terms.” Id.
In Abiodun, the defendant fraudulently obtained credit
reports of more than 250 individuals and opened up new lines of
credit in their names. The Second Circuit found that even
though they were ultimately reimbursed, each individual was a
victim because they “had to spend an appreciable amount of
time securing reimbursement from their banks or credit card
companies . . . and this ‘loss of time’ could be measured in
monetary terms.” Id. at 169. It also required that in order to be
a “victim,” the loss attributed to the person had to be counted in
the loss calculation. It remanded the case for a determination of
whether the loss attributed to the alleged victims could be
counted as loss, or for a recalculation of the actual number of
victims who suffered a loss under the calculation. The Second
12
Circuit also rejected the idea of counting only the creditors who
absorbed the financial charges, because to do so would “less
accurately measure the extent of the fraud than a rule that
calculates the number of individuals adversely affected by the
scheme.” Id. at 169 n.6 (internal quotation marks and citation
omitted).
We agree that had the Government shown that the
account holders that Kennedy defrauded spent time or money
seeking reimbursement, this would be a closer case. Because
the record is devoid of any such evidence, however, we
conclude that Ursuline and Zurich were Kennedy’s only victims
for purposes of § 2B1.1(b)(2).
C.
Because we find the Yagar line of cases faithful to the
text of § 2B1.1 and its Application Notes, we adopt a similar
interpretation of “victim” under the Guidelines. We recognize,
however, that this interpretation is hard to reconcile with
commonsense notions of what it means to be a victim.
Nevertheless, our task is to adhere to the Guidelines and its
Application Notes.
One criticism of our interpretation is that “actual loss”
and “ultimate pecuniary harm” artificially count “victims” after
the entire transaction has taken place. A second criticism, as
explained by Judge Garza in his dissent in Conner, is that
counting only the corporate entities as “victims” will betray the
sentencing goals of the Guidelines by providing more lenient
13
sentences for more serious crimes. We find these objections
illusory in the post-Booker sentencing world.
As for the first criticism, we agree that, as a matter of
legislative policy, the determination of “actual loss” by
reference to the end of the transaction ignores the fact that a
party might suffer harm in the interim between the theft and
restitution. Determining when to “stop the clock,” however,
was the Sentencing Commission’s policy decision. The
Sentencing Commission could have decided to stop the clock
immediately after Kennedy wrote the checks, but it did not do
so. Instead, the Commission defined “victim” in such a way that
requires us to look to the net financial result of the crime rather
than to take a financial snapshot at the inception of the crime or
during its commission. Our interpretation is supported by
Application Note 3(A)(i), which refers to “pecuniary harm that
resulted from the offense,” and plainly speaks in the past tense.
Regarding the second objection, we note that the dissent
in Conner persuasively argued that construing “victim” to mean
only the credit card companies but not those whose credit was
stolen, violates the spirit of the Guidelines. 537 F.3d at 494
(Garza, J., dissenting). In Judge Garza’s view, “by waiting until
after reimbursement to measure ‘pecuniary harm’ and ‘actual
loss,’ the majority’s interpretation of the victim enhancement in
§ 2B1.1 runs counter to the fundamental sentencing goal of
tying the severity of a defendant’s sentence to the seriousness of
the defendant’s crime.” Id. Judge Garza noted that courts
should not interpret § 2B1.1 to allow a defendant who defrauds
1,000 individuals who are reimbursed by a single insurer to be
14
treated more leniently than one who defrauds 10 uninsured
persons. Id.
Although Judge Garza’s view would have tremendous
force in a mandatory Guidelines regime, we do not share his
concern in light of the broad sentencing discretion possessed by
district judges since Booker was decided. It is true that the
hypothetical he posed yields a lower Guidelines range for the
criminal who defrauds 1,000 insured individuals than one who
defrauds 10 uninsured persons, but this in no way requires that
the more culpable criminal receive a more lenient sentence than
the less culpable one. Since Booker, district judges have
substantial discretion to impose sentences anywhere within the
statutory range, as long as those sentences are reasonable under
our deferential standard of review for abuse of discretion. We
expect that district judges will examine the particular facts of
each case in fashioning a just sentence without getting bogged
down in formalistic technicalities. Sentencing is not a
mathematical calculation; it is a human enterprise that requires
wisdom, judgment, and old-fashioned common sense. To the
extent the plain language of the Guidelines — including its
Commentary and Application Notes — would lead to unfair
results, we repose our confidence in district judges to apply
fairly and justly the factors set forth in 18 U.S.C. § 3553(a),
which may require variances from the Guidelines range.
Applying these principles to Kennedy’s case, if the
District Court had rejected the Government’s request for a two-
point enhancement under § 2B1.1(b), Kennedy’s imprisonment
range would have been 12 to 18 months. Thus, the actual
sentence imposed by the District Court of 18 months still would
15
have been within the advisory Guidelines range. Moreover, the
District Court was free to sentence Kennedy anywhere below
the statutory maximum of five years for each of the four mail
fraud counts, see 18 U.S.C. § 1341, and five years for each of
the six counts of making a false writing, see 18 U.S.C.
§ 1001(a)(3). To deem essential the two-point enhancement
under § 2B1.1(b)(2) is to elevate form over substance now that
the Guidelines are no longer mandatory.
IV.
Kennedy next argues that the District Court erred when
it imposed a two-point enhancement under USSG § 3A1.1(b)(1)
because Ursuline and Zurich were not “vulnerable victims.”
Although we agree with Kennedy that the 34 elderly account
holders from whom she stole did not satisfy the definition of
“victim” under USSG § 2B1.1(b)(2), this does not mean that
they are not “vulnerable victims” under USSG § 3A1.1(b)(1).
We acknowledge this apparent non sequitur because a
reasonable person would rightly wonder how one can be a
vulnerable victim without being a victim at all. Here again, we
note that we are interpreting the Guidelines rather than applying
logic or common sense. Chapter 2 of the Guidelines is entitled
“Offense Conduct” and controls the base offense level of the
crime, whereas Chapter 3, entitled “Adjustments,” contains a list
of adjustments that increase the number of Guidelines points for
aggravating factors such as the age of the victim or the use of a
minor to commit a crime. Because these two chapters serve
different purposes, the Sentencing Commission was free to
define “victim” differently in each.
16
The vulnerable victim enhancement, which is part of
Chapter 3, provides that “[i]f the defendant knew or should have
known that a victim of the offense was a vulnerable victim,
increase by 2 levels.” USSG § 3A1.1(b)(1). “Vulnerable
victim” is a person “who is unusually vulnerable due to age,
physical or mental condition, or who is otherwise particularly
susceptible to the criminal conduct.” Id. at cmt. n.2. We have
previously held that victims can be particularly vulnerable if
they are financially insecure, sick, in a state of emergency, or
otherwise susceptible to the particular kind of criminal conduct
at issue. United States v. Zats, 298 F.3d 182, 185 (3d Cir.
2002). As we stated in Zats, “victim status is not limited to
those hurt by the offense of conviction, but also includes those
hurt by relevant conduct outside that offense.” Id. at 187. In
addition, the Application Note to USSG § 3A1.1(b) states, in
relevant part: “For purposes of subsection (b), ‘vulnerable
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) . . . .” USSG §
3A1.1, cmt. n.2. Section 1B1.3(a) includes the following as
relevant conduct:
(1)(A) all acts and omissions committed, aided, abetted,
counseled, commanded, induced, procured, or willfully
caused by the defendant; and
....
(3) all harm that resulted from the acts and omissions
specified in subsections (a)(1) and (a)(2) above, and all
17
harm that was the object of such acts and omissions . . .
.
USSG § 1B1.3(a).
In United States v. Cruz, 106 F.3d 1134 (3d Cir. 1997),
we found that “neither § 3A1.1(b) nor the application note
explicitly requires that we read ‘victim’ narrowly and that, under
§ 1B1.3, we may look at all the conduct underlying the offense
of conviction.” Id. at 1137. We then applied the vulnerable
victim enhancement where the defendant sexually assaulted a
twelve-year-old victim while stealing a car, but pleaded guilty
only to a carjacking charge. Id; see also United States v.
Monostra, 125 F.3d 183, 189 (3d Cir. 1997) (“[T]he drafters of
the Sentencing Guidelines did not intend to limit the application
of § 3A1.1(b) to situations in which the vulnerable person was
the victim of the offense of conviction. Rather, trial courts may
look to all the conduct underlying an offense, using § 1B1.3 as
a guide.”) (citation omitted).
In light of the foregoing, the fact that Ursuline and Zurich
are the only “victims” under the number-of-victims
enhancement (USSG § 2B1.1) is immaterial to the question
whether they are vulnerable victims under § 3A1.1(b). The
Guidelines make clear that “victims” under § 2B1.1 and §
3A1.1(b) are separate definitions.
Because we are not bound by the definition of “victim”
in § 2B1.1, to determine the applicability of USSG § 3A1.1(b),
we consider whether:
18
(1) the victim was particularly susceptible or
vulnerable to the criminal conduct; (2) the
defendant knew or should have known of this
susceptibility or vulnerability; and (3) this
vulnerability or susceptibility facilitated the
defendant’s crime in some manner; that is, there
was a “nexus between the victim’s vulnerability
and the crime’s ultimate success.”
United States v. Iannone, 184 F.3d 214, 220 (3d Cir. 1999)
(citation omitted).
Kennedy does not argue that her victims were not
particularly susceptible or vulnerable to her criminal conduct.
Instead, she attempts to distinguish herself from Iannone by
noting that she was not in any personal contact with the account
holders and by describing her crime as “office accounting
manipulations.” In doing so, Kennedy mistakenly equates lack
of personal contact with ignorance of the account holders’
vulnerability. In fact, Kennedy was well aware that the account
holders she defrauded were unable to manage their own finances
since their incapacity was the very reason for her stewardship of
their accounts. Nor are we persuaded by Kennedy’s argument
that the account holders’ inability to handle their own affairs
merely provided her with the opportunity to commit the crime
as opposed to facilitating it, as required by the third prong of
Iannone. Accordingly, the District Court did not err when it
applied the vulnerable victim enhancement to Kennedy’s
sentence.
V.
19
Kennedy next objects to the District Court’s two-point
enhancement under USSG § 3B1.3 for abuse of a position of
trust. In United States v. Pardo, 25 F.3d 1187, 1192 (3d Cir.
1994), we considered three factors in determining whether a
defendant occupies a position 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 the
defendant vis-à-vis the object of the wrongful act;
and (3) whether there has been reliance on the
integrity of the person occupying the position.
Id. These factors should be considered to “punish ‘insiders’
who abuse their positions rather than those who take advantage
of an available opportunity.” Id.
The Probation Office noted in Kennedy’s PSR: “[a]s an
account manager assigned to oversee the finances of a particular
group of clients; [Kennedy] breached her fiduciary
responsibilities and used her position to facilitate the
commission of the offense.” The District Court accepted this
recommendation and found that Kennedy had “unique access”
to the accounts of her clients, who were unable to manage their
own affairs. We have little difficulty concluding that Kennedy
was an “insider” who took advantage of her access to client
accounts. Kennedy’s claim that neither Ursuline nor its clients
placed special reliance upon her is specious because she was
responsible for managing her clients’ finances. The District
Court correctly applied the Pardo factors and did not err when
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it applied the sentencing enhancement for abuse of a position of
trust.
VI.
In addition to challenging the three Guidelines
enhancements, Kennedy claims that the District Court’s 18-
month sentence was unreasonable because she was entitled to a
sentence of 12 months and one day in light of her family
circumstances. In support of this argument, Kennedy claims
that the District Court was unfaithful to Gall, where the
Supreme Court rejected a rule that would have required
“extraordinary circumstances” to justify a sentence outside of
the Guidelines range. Gall, 128 S. Ct. at 595.
Contrary to Kennedy’s argument, the District Court did
not believe that extraordinary circumstances were required to
warrant a variance. In its tentative findings, after noting that
Kennedy’s family circumstances were unfortunate, the District
Court stated: “the hardship claimed by Kennedy is similar to that
experienced by many if not most families of convicted felons,
and . . . the facts of this case are not so exceptional or outside
the ‘heartland’ as to warrant departure or variance from the
guidelines.”
The District Court’s observations that Kennedy’s case
was neither out of the ordinary nor dissimilar to that of other
felons did not violate Gall. The record demonstrates that the
District Court understood its ability to vary downward and chose
not to do so after finding that the sentence proposed by Kennedy
was too lenient. As the Government argues, there is nothing in
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the record to indicate how a sentence of 12 months and one day
would have met the needs of Kennedy’s family in ways that 18
months in prison would not. This is especially true in light of
the 15-month sentence Kennedy served during 2005 and 2006.
Unfortunately for those family members who depend on
Kennedy, they will once again be forced to suffer the
consequences of her criminal conduct.
In sum, we reject Kennedy’s tacit invitation to hold that
a below-Guidelines sentence is required in the ordinary or
typical case. Such a holding would not only be inconsistent with
Gall, but would severely restrict the discretion afforded to
sentencing judges pursuant to 18 U.S.C. § 3553(a) in the wake
of Booker and its progeny.
VII.
The District Court did not abuse its discretion when it
found Kennedy subject to sentencing enhancements for
“vulnerable victim,” USSG § 3A1.1(b)(1), and abuse of a
position of trust, USSG § 3B1.3. Nor did the District Court err
in rejecting Kennedy’s request for a downward variance
pursuant to 18 U.S.C. § 3553(a). However, we find that the
District Court committed procedural error when it increased
Kennedy’s total offense level by two points under USSG
§ 2B1.1(b)(2)(A). Although this procedural error requires that
the case be remanded to the District Court for resentencing, we
reiterate our view that the District Court’s technical
miscalculation does not negate the fact that Kennedy took
advantage of 34 clients who were unable to manage their own
affairs. The District Court may consider this fact in analyzing
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the factors set forth in 18 U.S.C. § 3553(a) and is free to impose
the same sentence, or a different one, as it deems just and
proper.
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