United States v. Gramer, Scott A. ( 2002 )

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 02-1551
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
SCOTT A. GRAMER,
Defendant-Appellant.
____________
Appeal from the United States District Court
for the Southern District of Indiana, Indianapolis Division.
No. IP01-CR-0090-02-B/F—Sarah Evans Barker, Judge.
____________
ARGUED SEPTEMBER 10, 2002—DECIDED OCTOBER 16, 2002
____________
Before FLAUM, Chief Judge, and BAUER and MANION,
Circuit Judges.
BAUER, Circuit Judge. The federal government indicted
Scott Gramer on five counts of mail fraud, a violation of 18
U.S.C. § 1341. He pleaded guilty to all five counts pursuant
to a plea agreement. The district court sentenced Gramer
to 21 months incarceration, followed by two years of super-
vised release. Gramer contends that the district court’s
application of § 2F1.1 of the Sentencing Guidelines was in
error. Specifically, he argues that the sentence does not
reflect his limited participation in the scheme and that the
factual findings adopted by the court are irreconcilable. For
2 No. 02-1551
the reasons that follow, we find the district court’s sentenc-
ing determination was not in error.
BACKGROUND
Scott Gramer, a manufacturing engineer, began working
for Indiana Mills & Manufacturing, Inc. (IMMI) in 1994.
IMMI is a manufacturing company in Westfield, Indiana,
which develops seat belts, child seats, and off-road machin-
ery. In July 1996, Harvey Adair, Jr., a fellow IMMI em-
ployee, devised a scheme to defraud IMMI. According to
the plan, Adair would pretend to send broken pieces of
IMMI machinery to non-existing companies for repairs.
Adair recruited Gramer to sign consents for the phoney
purchase orders. An employee’s signature was necessary to
validate the payment of the false claims.
In addition to Gramer, Adair recruited three additional
IMMI employees, Jack A. Reid, David N. Cook, and Neal
Richardson, to pose as outside vendors who would purport-
edly repair the broken machine parts.
Gramer’s importance to the success of the overall scheme
cannot be understated. Adair recruited Gramer to be, in
addition to Adair himself, another employee who could
sign off on the purchase orders. It was essential to the
success of the plan that no single person’s name appear on
all of the paperwork as authorizing repairs or approving
payments. With Gramer in the scheme, Adair was able to
alternate between the two signators so as not to raise
suspicion. Gramer approved some of the repair requests and
some of the payments for all the vendors involved in the
scheme.
The proceeds from the scheme were split among those
involved relative to their amount of participation in the
fraudulent activities. Each person who participated in ob-
taining proceeds from a particular purchase order and
No. 02-1551 3
invoice received a percentage ranging from 25% to 50% of
the proceeds. Based on the submission of fraudulent
invoices, which continued until the summer of 2000, IMMI
paid a total of $430,752 to the individuals or businesses
identified in the invoice. Of the $430,752 unlawfully gained,
Adair, as the mastermind, received $355,175. Gramer
received $51,999 for his work in the fraud, while Reid re-
ceived $1,378, Richardson, $6,541, and Cook $22,960.
On November 5, 2001, Gramer pleaded guilty to five
counts of mail fraud. The district court ordered Gramer to
serve 21 months incarceration, followed by two years of
supervised release. In addition, the district court ordered
him to pay restitution in the amount of $51,999. On appeal,
Gramer asserts that the district court incorrectly applied
§ 2F1.1 of the Sentencing Guidelines in assessing an in-
crease of nine offense levels over the basic offense level of
six. More specifically, Gramer argues that the figures used
by the district court in determining his sentence cannot be
reconciled with its finding that a single scheme existed.
ANALYSIS
We review the district court’s calculation of the loss in-
curred in the defendant’s offense under U.S.S.G. § 2F1.1 for
clear error. United States v. Dillard, 43 F.3d 299, 309 (7th
Cir. 1994). “A factual determination is clearly erroneous
only if, after considering all the evidence, the reviewing
court is left with the definite and firm conviction that a
mistake has been committed.” United States v. Irby, 240
F.3d 597, 599 (7th Cir. 2001) (quoting United States v.
Messino, 55 F.3d 1241, 1247 (7th Cir. 1995)).
Under U.S.S.G. § 2F1.1, a defendant’s sentence is based
upon the amount of loss the defendant’s scheme caused to
his victims. See U.S.S.G. § 2F1.1 Application Note 8. Under
the Guidelines, Gramer’s base offense level for violating
4 No. 02-1551
18 U.S.C. § 1341 is level six. U.S.S.G. § 2F1.1(a). However,
§ 2F1.1(b)(1)(J) provides for an addition of nine offense
levels if the loss in the total scheme in question is greater
than $350,000 but less than $500,000. The district court
found that Gramer was involved in a single overarching
scheme resulting in a total loss to IMMI of $430,752; there-
fore, in accordance with U.S.S.G. § 2F1.1(b)(1), the district
court added an additional nine levels to the base offense
level.
Gramer asserts that the district court’s increase of nine
offense levels was the result of an erroneous interpretation
of the figures adopted by the court. He also contends that
the numbers which the court used do not support its finding
that a single scheme took place. Instead of a single scheme,
Gramer contends there were multiple schemes and that he
should be sentenced only for the scheme he participated in.
He concludes that if a single scheme truly occurred then the
amount attributable to him would have been greater.
Gramer says that, because he and the other co-workers ac-
cumulated a combined total of $82,878 while Adair made off
with $355,175, then Adair either committed some of the
fraudulent activity on his own or there were additional con-
spirators whom the authorities never discovered, resulting
in a disproportionate sentence for Gramer.
A. Applying U.S.S.G. § 2F1.1
Gramer supports his argument that the district court
erred by highlighting inconsistencies between the numbers
the district court relied upon in reaching his sentence. The
district court adopted the figures set forth by the probation
department in its report. The district court found that
Gramer accumulated $51,999 while Adair accumulated
No. 02-1551 5
$355,175.1 The court also determined that each of the par-
ticipants in Adair’s scheme earned between 25% and 50%
of the value of any transaction in which they took part.
Finally, the court found that the amount of loss to IMMI
was $430,752, an amount to which Gramer stipulated.
As a cursory glance at these numbers reveals, the per-
centages of 25% to 50% of compensation for each transac-
tion participated in are not accurate in light of the large
returns taken by Adair and the lesser amounts taken by his
recruits. While Gramer is correct that some of the fraudu-
lent transactions netted the recruits less than 25% of the
proceeds, this miscalculation is not merely harmless, but
meaningless. It is unavailing precisely because Gramer
himself stipulated that the fraud netted a total amount of
$430,752. This amount, $430,752, was the sole basis for the
addition of nine offense levels under U.S.S.G. § 2F1.1(b)(1).
And the district court found that there was a single, over-
reaching scheme. So the percentage of compensation for
Gramer is irrelevant; once the court found that Gramer was
thoroughly involved in the scheme, he became liable for all
of the losses that the group’s fraudulent activity entailed.
United States v. Dillard, 43 F.3d 299, 310 (7th Cir. 1994);
United States v. Navarez, 995 F.2d 759, 763 (7th Cir. 1993).
The district court tacked on the additional offense levels
based on the amount the scheme netted as a whole,
$430,752, not because Gramer received a certain amount.
The basic premise of U.S.S.G. § 2F1.1(b)(1) is the determi-
nation of the value of the money or property unlawfully
taken from the victim. See U.S.S.G. § 2F1.1 Application
Note 8.
1
The court also noted that the three other individuals involved
in the scheme netted a combined total of $30,879.
6 No. 02-1551
B. Finding a Single Scheme
In presenting his argument that the court erred in its
interpretation of the figures it used, Gramer also contends
that the court should have found multiple schemes. In
considering this argument, we review the district court’s
factual findings in applying the Sentencing Guidelines for
clear error. United States v. Martin, 287 F.3d 609, 616 (7th
Cir. 2002). In finding that a single scheme existed, the
court held Gramer liable for all the reasonably foreseeable
actions and consequences of those participating in the
fraud. United States v. Blackwell, 49 F.3d 1232, 1235 (7th
Cir. 1995). Gramer claims that he was involved in a sep-
arate, single scheme which resulted in a net loss to IMMI
of $104,000, and his sentence should be determined using
this figure, not $430,752. Essentially, he contends that his
loss should be based solely on the transactions in which he
participated. He is wrong.
Gramer’s participation was essential to the success of the
scheme because with multiple signators no single person’s
name appeared on all of the paperwork as authorizing
repairs or approving payments. Gramer’s interaction with,
and dependence on, the other co-defendants demonstrates
there was a single overarching scheme to defraud IMMI. As
in United States v. Narvaez, 995 F.2d 759 (7th Cir. 1993),
there is evidence which shows Gramer was in contact with
each participant in the scheme; he approved purchase and
repair orders from Reid, Richardson, and Cook, and worked
in agreement with Adair and under his supervision.
Gramer’s role as an additional signator played a key role in
the long (four years) success of the scheme. Gramer’s in-
volvement with all the participants and his important
position solidifies that Gramer was involved in a single
scheme for which he shares full responsibility.
Even assuming that Gramer is correct in his assertion
that other unnamed participants were involved in the
No. 02-1551 7
scheme, Gramer did not have to be aware of other people’s
identities or their acts, so long as the evidence showed that
Gramer participated in the scheme. United States v.
Adeniji, 221 F.3d 1020, 1026 (7th Cir. 1999); United States
v. Silva, 781 F.2d 106, 108-09 (7th Cir. 1986). In situations
involving multiple criminal participants, the Sentencing
Guidelines instruct the courts to consider “all reasonably
foreseeable acts and omissions of others in furtherance of
the jointly undertaken criminal activity.” United States v.
Blackwell, 49 F.3d 1232, 1235 (7th Cir. 1995); United States
v. Smith, 897 F.2d 909, 910-11 (7th Cir. 1990).
Gramer’s authorization of approving the requisite paper-
work was part of the overall scheme devised and imple-
mented by Adair. While Gramer may not have been the
mastermind of the plan or the largest benefactor of the
fraud, his fraudulent actions furthered the goal of siphon-
ing funds from IMMI. The district court’s sentencing of
Gramer “properly reflected the amount stolen in further-
ance of the [scheme].” United States v. Narvaez, 995 F.2d
759, 763 (7th Cir. 1993). While Adair personally received a
much greater portion of the final $430,752 than his co-
workers, his longer sentence reflected that fact. Whether
Gramer took away 10% from each transaction or 50% is
immaterial; Gramer was guilty of participating and profit-
ing in a single scheme to defraud IMMI.
CONCLUSION
While the district court may have erred in the percent-
ages of each transaction obtained by the participants, there
is no claim that the district court erred in the total amount
the scheme collected. In the presentence investigation re-
port, the government explained in great detail how it cal-
culated the loss suffered by IMMI through the fraud.
Gramer never disputed the amount, stipulating to this fig-
ure during the sentencing hearing. The district court acted
8 No. 02-1551
reasonably and correctly when it calculated the losses at-
tributable to Gramer’s participation. In addition, Gramer’s
argument that multiple schemes existed is supported
neither by the facts nor the figures.
Because the district court properly sentenced the defen-
dant, we AFFIRM the defendant’s sentence.
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—10-16-02