United States v. Dana Miller , 906 F.3d 373 ( 2018 )

Case: 17-10594 Document: 00514687426 Page: 1 Date Filed: 10/18/2018
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
FILED
No. 17-10594 October 18, 2018
Lyle W. Cayce
UNITED STATES OF AMERICA, Clerk
Plaintiff - Appellee
v.
DANA KAY MILLER,
Defendant - Appellant
Appeal from the United States District Court
for the Northern District of Texas
Before STEWART, Chief Judge, and JONES and ENGELHARDT, Circuit
Judges.
KURT D. ENGELHARDT, Circuit Judge:
Dana Kay Miller pled guilty without a plea agreement to bank fraud, in
violation of 18 U.S.C. § 1344(2), and was sentenced above the advisory
guidelines range to 96 months of imprisonment and five years of supervised
release. On appeal, Miller argues that the district court clearly erred by
applying a two-level enhancement under U.S.S.G. § 3B1.3 for abusing a
position of trust and by applying a two-level enhancement under U.S.S.G. §
2B1.1(b)(10)(C) for using sophisticated means. We AFFIRM Miller’s sentence.
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FACTS AND PROCEEDINGS
In August 2014, Miller began working as the accounts payable clerk for
Hawk Steel Industries, Inc. (HSI), a scrap metal processing and recycling
company owned and operated by Peter and Susan Bausone. Miller was
primarily responsible for preparing the payroll for the approximately 80 HSI
employees and preparing the weekly vendor payment checks. Each week, HSI
disbursed 80–100 checks to pay metal suppliers and other vendors. Miller used
the company’s accounting software to make bookkeeping entries and to prepare
and print weekly checks that were to be submitted to HSI’s office manager for
signature. After the checks were signed, Miller transmitted an electronic copy
of the authorized checks directly to HSI’s bank, Regions Bank, so that the
checks would be paid when presented and to ensure that only the checks
written by HSI were paid.
Miller began writing fraudulent HSI checks to her boyfriend, Russell
Sandifer, in October 2014, and continued to write two to three fraudulent
checks to Sandifer per week, forging the office manager’s signature. 1 Miller
included the fraudulent checks with legitimate checks she recorded in HSI’s
accounting system, falsely representing in the company’s accounting records
that Sandifer sold metal to HSI. She also included the fraudulent checks in the
list of authorized checks that she transmitted to Regions Bank.
As part of Miller’s fraudulent scheme, Miller and Sandifer opened a joint
checking account at Woodforest National Bank (WNB) in October 2014.
Between October 2014 until February 2016, Miller deposited 228 fraudulent
HSI checks payable to Sandifer, totaling about $1,536,000, into Miller and
Sandifer’s WNB account. In February 2016, WNB became suspicious of the
1 The office manager, Jim Milligan, and co-owner, Susan Bausone, were the only
authorized signors on the HSI checking account at Regions Bank.
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frequent deposits made to the WNB after-hours drop box; thus, the bank
required HSI’s verification of the deposits. Miller composed a letter attempting
to provide the requested verification, but it was refused by WNB because it
was not notarized. Consequently, Miller had Sandifer close the WNB account.
That same month, Miller and Sandifer opened another joint checking and
savings account at Texas Trust Credit Union (TTCU) and began depositing
fraudulent HSI checks into that account. Between February and July 2016,
Miller deposited 72 fraudulent HSI checks into the TTCU account, totaling
approximately $729,000.
Concerned that something was amiss with the company’s finances,
Susan Bausone conducted an audit of HSI’s checks in July 2016. 2 The audit
revealed checks written to Sandifer between October 2014 and July 2016 that
appeared to be forged. Because of Miller’s inability to explain the payments to
Sandifer—identified for the first time as her boyfriend—and due to the lack of
documentation to support any sales transaction between Sandifer and HSI,
Miller was terminated from HSI. In total, Miller wrote 300 fraudulent checks,
stealing $2,239,407.68 from HSI. 3 Miller spent the stolen money on a plethora
of personal expenditures, including a down payment on a home, a swimming
pool, numerous cars and motorcycles, an engagement ring, and various
cosmetic surgeries and procedures.
Miller pled guilty without a plea agreement to a one-count information,
charging her with bank fraud, in violation of 18 U.S.C. § 1344(2). Based on the
2 Peter Bausone, co-owner of HSI, testified at Miller’s sentencing hearing that the
company began experiencing noticeable, incomprehensible financial trouble in December
2015, resulting in the cessation of annual employee bonuses for the first time in 37 years;
denial of overtime; and loss of key employees. Despite its inexplicable financial concerns, HSI
did not grow suspicious of Miller until July 2016 when one of the owners began noticing
Miller’s extravagant spending.
3 Regions Bank paid all but two of the fraudulent checks when presented and drew
funds from HSI’s account. The two checks not paid by Regions Bank totaled $26,665.01.
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United States Sentencing Guidelines, as calculated in the presentence report
(PSR), Miller’s base offense level was seven, subject to a 16-level increase based
on the amount of loss; a two-level increase under the sophisticated means
enhancement; and another two-point increase for Miller’s abuse of a position
of trust. Applying these enhancements, Miller’s adjusted offense level was 27,
which was reduced by three points for her acceptance of responsibility,
resulting in a total offense level of 24. Miller’s total offense level of 24 and
criminal history category of I yielded a guidelines imprisonment range of 51 to
63 months.
Relevant to this appeal, Miller filed written objections to the abuse of
trust and sophisticated means enhancements. At sentencing, after considering
further argument by Miller’s counsel, the district court overruled Miller’s
objections and adopted the PSR and addenda as its findings of fact. Miller
received an above-guidelines sentence of 96 months imprisonment. Miller
timely appealed her sentence. On appeal, Miller argues that the district court
clearly erred by applying a two-level enhancement under U.S.S.G. § 3B1.3 for
abusing a position of trust and by applying a two-level enhancement under
U.S.S.G. § 2B1.1(b)(10)(C) for using sophisticated means. 4
STANDARD OF REVIEW
“We review the district court’s interpretation and application of the
Guidelines de novo and its factual findings for clear error.” United States v.
Hernandez, 876 F.3d 161, 164 (5th Cir. 2017) (citing United States v. Trujillo,
502 F.3d 353, 356 (5th Cir. 2007)). Accordingly, we review for clear error the
district court’s factual determinations that Miller abused a position of trust
and used sophisticated means. See United States v. Ollison, 555 F.3d 152, 164
4As conceded at oral argument, Miller does not appeal the 33-month upward variance.
Thus, this argument is waived. See Cinel v. Connick, 15 F.3d 1338, 1345 (5th Cir. 1994) (“An
appellant abandons all issues not raised and argued in its initial brief on appeal.”).
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(5th Cir. 2009); United States v. Conner, 537 F.3d 480, 492 (5th Cir. 2008).
“Under the clearly erroneous standard, we will uphold a finding so long as it is
plausible in light of the record as a whole.” United States v. Miller, 607 F.3d
144, 148 (5th Cir. 2010) (quoting United States v. Ekanem, 555 F.3d 172, 175
(5th Cir. 2009)).
DISCUSSION
Miller appeals the district court's application of the abuse of a position
of trust sentencing enhancement and the sophisticated means sentencing
enhancement. We address her arguments in turn.
I. Abuse of a Position of Trust
Miller first challenges the district court’s imposition of the enhancement
for abuse of a position of trust, pursuant to U.S.S.G. § 3B1.3. Miller’s argument
largely rests on her contention that she did not occupy a position of trust,
attempting to analogize Ollison; United States v. Vinalay, 694 F. App’x 278
(5th Cir. 2017); and a case from a different circuit, United States v. Tann, 532
F.3d 868 (D.C. Cir. 2008). Miller argues that, as an accounts payable clerk, she
held a clerical position with little-to-no discretion, had limited duties, and did
not have any managerial or professional discretion. Miller further argues that
stealing from a trusting employer while under minimal supervision does not
warrant a position of trust enhancement. Miller asserts that any accounts
payable clerk could have committed the theft and that her position did not help
her commit or conceal the theft.
Section 3B1.3 of the Sentencing Guidelines provides for a two-level
increase to the defendant’s offense level “[i]f the defendant abused a position
of public or private trust, or used a special skill, in a manner that significantly
facilitated the commission or concealment of the offense . . . .” U.S.S.G. § 3B1.3.
Applying a two-step inquiry, the sentencing court must first “determine
whether the defendant occupied a position of trust at all.” Ollison, 555 F.3d at
5
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165. “A position of trust is characterized by (1) professional or managerial
discretion (i.e., substantial discretionary judgment that is ordinarily given
considerable deference), and (2) minimal supervision.” Id. at 166 (citing
U.S.S.G. 3B1.3 cmt. n.1). Persons holding a position of trust “ordinarily are
subject to significantly less supervision than employees whose responsibilities
are primarily non-discretionary in nature.” U.S.S.G. § 3B1.3 cmt. n.1. This
enhancement “does not apply in the case of an embezzlement or theft by an
ordinary teller or hotel clerk because such positions are not characterized by
[these] factors.” Id. We consider “the extent to which the position provides the
freedom to commit a difficult-to-detect wrong” to be a “primary trait” in
determining whether a person is in a position of trust. United States v. Brown,
7 F.3d 1155, 1161 (5th Cir. 1993). 5 If the court finds that the defendant did not
occupy a position of trust, “the inquiry ends and no enhancement accrues.”
Ollison, 555 F.3d at 165.
If the defendant occupied a position of trust, then the court must
“ascertain the extent to which the defendant used that position to facilitate or
conceal the offense.” Id. (quoting United States v. Reccko, 151 F.3d 29, 31 (1st
Cir. 1998)). “In order for the enhancement to apply, the [defendant’s] superior
position must not only provide the opportunity to defraud, but also
significantly facilitate its commission or concealment.” Id. at 169 n.14. To
determine whether a position of trust “significantly facilitated” the commission
or concealment of the offense, the court must decide “whether the defendant
5 In her Rule 28(j) letter, Miller cites the Third Circuit’s decision in United States v.
Douglas, 885 F.3d 124 (3d Cir. 2018), arguing that our decision in United States v. Brown
was abrogated by the 1993 amendment (Amendment 492) to Section 3B1.3, which added
language referring to professional or managerial discretion. We disagree. Whether a position
provides the freedom to commit a difficult-to-detect wrong remains a primary trait—although
not dispositive—in distinguishing a person in a position of trust from one who is not. See,
e.g., Ollison, 555 F.3d at 166 (citing Brown post-Amendment 492 when characterizing a
position of trust as including professional or managerial discretion and minimal supervision).
6
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occupied a superior position, relative to all people in a position to commit the
offense, as a result of her job.” United States v. Kay, 513 F.3d 432, 459 (5th Cir.
2007) (citation omitted).
Given our deferential review, Miller has not demonstrated clear error.
The district court’s findings that Miller occupied a position of trust and that
she used that position to significantly facilitate the commission and the
concealment of her fraudulent scheme are plausible in light of the record as a
whole. Each week, Miller used the company’s accounting software to prepare
and print approximately 80–100 checks to pay HSI’s vendors. As HSI’s
accounts payable clerk, Miller had the discretion to create new vendor entries
in her employer’s bookkeeping system, which she utilized to add her boyfriend
as a payee, and to issue checks to pay those vendors. 6 Further, Miller exercised
professional discretion when she presented a list of HSI checks directly to
Regions Bank for electronic verification and authorization of payment. Miller
included the fraudulent checks with the legitimate checks, deceiving Regions
Bank into believing the fraudulent checks were legitimate so that it would
make payment on the fraudulent checks when presented.
Moreover, as conceded by Miller’s counsel at oral argument, Miller was
not a closely supervised employee. Miller’s disbursement of funds and
maintenance of accounting logs was essentially unsupervised, as demonstrated
by the number of times Miller forged checks for payment (300 checks), the
amount she stole from HSI ($2,239,407.68), as well as the length of time she
maintained the fraudulent scheme undetected (21 months).
6 There is no mention in the record that any of the other approximately 80 employees
enjoyed similar access or authority. Cf. Ollison, 555 F.3d at 166 (“Absent proof of other
aggravating circumstances, we do not think that the § 3B1.3 enhancement should apply to a
secretary who made unauthorized charges on a corporate credit card that was issued to 1,200
other employees.”).
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Miller’s deferential position afforded her the autonomy to add and pay
vendors, and her fraudulent conduct proved difficult to detect because of this
freedom and limited supervision. See Brown, 7 F.3d at 1161; see also Ollison,
555 F.3d at 170 (Garza, J., dissenting). Miller’s discretionary judgment, her
largely unsupervised access to the company’s accounting records, and her
exploitation of her knowledge of HSI’s internal accounting procedures, renders
her case distinguishable from the cases she attempts to analogize, and more
comparable to cases where we have upheld the abuse of trust enhancement.
See, e.g., United States v. Smith, 203 F.3d 884, 893–94 (5th Cir. 2000) (holding
that a part-time teller occupied a position of trust because of special knowledge
of operating and security procedures, which the teller used to facilitate a
robbery); United States v. Roberts, 75 F. App’x 266, 267–68 (5th Cir. 2003)
(unpublished) 7 (holding that an accounts receivable data entry clerk occupied
a position of trust because her position provided her with “special access to the
company’s data base, with the power to receive, deposit and record substantial
sums of money, and with the authority to relay the updated account
information to the company’s headquarters”).
As to the second prong of the inquiry, Miller exploited the knowledge of
HSI’s internal accounting procedures and access to its accounting records—
necessary for her position as the accounts payable clerk—to facilitate and
conceal her bank fraud. See United States v. Powers, 168 F.3d 741, 752 (5th
Cir. 1999); see also United States v. Pruett, 681 F.3d 232, 248 (5th Cir. 2012)
(“We have found the second element of § 3B1.3 to be satisfied where the
defendant’s position made the criminal conduct easier to perform or where it
facilitated his crime.”). This access and knowledge provided Miller with the
7Although an unpublished opinion issued after January 1, 1996, is not controlling
precedent, it may be considered as persuasive authority. See Ballard v. Burton 444 F.3d 391,
401 & n.7 (5th Cir. 2006) (citing 5TH CIR. R. 47.5.4).
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means to issue fraudulent checks made payable to her boyfriend, Sandifer.
Miller’s position of trust similarly assisted in her concealment of the fraud:
Miller abused her ability to add Sandifer as a vendor-payee, delayed detection
by falsely representing in the company’s accounting records that Sandifer 8 sold
metal to HSI, and disguised the fraudulent checks as legitimate in the list she
provided to HSI’s bank. The exploitation of this type of unsupervised,
specialized knowledge in the commission of the offense supports the abuse of
position of trust enhancement. See Smith, 203 F.3d at 893 (holding that a part-
time bank teller occupied a position of trust because of special knowledge of
operating and security procedures, which the teller used to facilitate a
robbery); United States v. Ehrlich, 902 F.2d 327, 330–31 (5th Cir. 1990)
(holding that a loan clerk occupied a position of trust because of specialized
knowledge and access of the computer system, as well as the authority to
balance large, important accounts, which facilitated her embezzlements,
warranting an abuse of position of trust enhancement); United States v.
Nelson, 487 F. App’x 152, 154 (5th Cir. 2012) (unpublished) (affirming the
enhancement where the defendant’s position as a liaison between her employer
and marketing vendors, “combined with her specialized knowledge of [her
employer’s] invoice-process for marketing services, [ ] provided her with the
means and discretion to submit and receive payment for fraudulent invoices”).
Additionally, the extent of the fraudulent scheme—in the amount of loss
and the length of time—evinces that Miller’s position as HSI’s accounts
payable clerk facilitated Miller’s commission and concealment of bank fraud.
Because of Miller’s concealment efforts, the owners of HSI struggled with the
company’s inexplicable financial troubles for several months, which resulted
8HSI did not learn the identity of Sandifer until July 18, 2016: Miller first revealed
that Sandifer was her boyfriend when HSI questioned her about the unauthorized checks.
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in employees being laid off, withholding of annual bonuses, and the
termination of overtime.
For these reasons, the district court’s sophisticated factual
determination that Miller abused a position of trust is plausible in light of the
record, and thus is not clearly erroneous. Accordingly, the district court did not
err in applying the § 3B1.3 abuse of trust sentencing enhancement.
II. Use of Sophisticated Means
As to Miller’s second argument challenging the sophisticated means
enhancement, the Guidelines provide for a two-level increase if “the offense
otherwise involved sophisticated means and the defendant intentionally
engaged in or caused the conduct constituting sophisticated means.” U.S.S.G.
§ 2B1.1(b)(10)(C). The term “sophisticated means” is defined as “especially
complex or especially intricate offense conduct pertaining to the execution or
concealment of an offense.” Id. at cmt. n. 9(B). “Conduct such as hiding assets
or transactions, or both, through the use of fictitious entities, corporate shells,
or offshore financial accounts [ ] ordinarily indicates sophisticated means.” Id.
We have “affirmed the application of the sophisticated means enhancement in
cases involving some method that made it more difficult for the offense to be
detected, even if that method was not by itself particularly sophisticated.”
United States v. Valdez, 726 F.3d 684, 695 (5th Cir. 2013) (collecting cases).
“We will not find a district court’s ruling [that a defendant used sophisticated
means to impede discovery of the offense] to be clearly erroneous unless we are
left with the definite and firm conviction that a mistake has been committed.”
United States v. Clements, 73 F.3d 1330, 1340 (5th Cir. 1996).
While some aspects of Miller’s scheme were not sophisticated, viewing
the scheme in its entirety, it was not clearly erroneous for the district court to
conclude that Miller’s overall conduct warranted the sophisticated means
enhancement. Miller employed multiple methods that made it more difficult to
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detect her bank fraud. See Valdez, 726 F.3d at 695. Specifically, Miller
misrepresented her boyfriend as HSI’s vendor and created false bookkeeping
entries to pay her boyfriend for fictitious metal sales, forging the office
manager’s signature on the checks she issued. Miller further attempted to
disguise her scheme by including the fraudulent checks in the list of authorized
checks she submitted to Regions Bank, making them appear legitimate and
delaying detection.
Moreover, by issuing the fraudulent checks to Sandifer—a name
unknown to HSI—Miller obscured the link between herself and the fraudulent
payments. See Clements, 73 F.3d at 1340. Miller further attempted to avoid
linking herself to the fraudulent checks by continuously depositing the checks
into WNB’s after-hour drop box. Once WNB became suspicious, Miller
composed a letter attempting to provide the bank with the requested
verification. When WNB refused the letter because it was not notarized, Miller
closed the account and opened a new account at another bank.
Miller’s conduct is something more than an “open and transparent direct
deposit and movement of funds,” Valdez, 726 F.3d at 695, and closer to the
conduct of defendants in cases where similar enhancements were upheld. See,
e.g., Clements, 73 F.3d at 1340 (upholding the enhancement where the
defendant repeatedly converted payments he received into multiple cashier's
checks, which were either cashed or deposited into his wife's separate bank
account, because his actions “obscure[d] the link between the money and . . .
himself,” and “undeniably made it more difficult for the IRS to detect his [tax]
evasion”); United States v. Malfitano, 690 F. App’x 218, 219 (5th Cir. 2017)
(affirming enhancement where, although the defendant provided his true
identity, “he attempted to avoid detection and to conceal the fraudulent nature
of the transactions at issue, and he attempted to legitimize the proceeds
distributed to him through his company”); United States v. Faulkner, 598 F.
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App’x 301 (5th Cir. 2015) (affirming § 2B1.1(b)(10)(C) enhancement where the
defendant “created fictitious room revenue credits using the [hotel’s] house
account and issued these refunds to her personal accounts”).
Based on the foregoing reasons, the district court’s application of the
sophisticated means enhancement was not clearly erroneous.
CONCLUSION
AFFIRMED.
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