United States v. Cruz, Carmen ( 2003 )

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 02-2728
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
CARMEN CRUZ,
Defendant-Appellant.
____________
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 01 CR 1083—Harry D. Leinenweber, Judge.
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ARGUED DECEMBER 10, 2002—DECIDED JANUARY 30, 2003
____________
Before FLAUM, Chief Judge, and POSNER, and WILLIAMS,
Circuit Judges.
FLAUM, Chief Judge. Defendant Carmen Cruz pleaded
guilty to one count of bank fraud under 18 U.S.C. § 1344for forging and cashing false checks in the name of her
employer’s company. The district court enhanced her sen-
tence by two levels under U.S.S.G. § 3B1.3 because it
found Cruz had abused a position of trust in committing
her crime. Cruz appeals the enhancement and argues she
did not have the requisite discretion and authority in her
office manager position to warrant the abuse of trust
enhancement. For the following reasons we affirm the
district court’s decision to impose the enhancement.
2 No. 02-2728
BACKGROUND
In February 2002 Carmen Cruz pleaded guilty to one
count of bank fraud after her employer discovered she
had forged company checks and used the company’s credit
card for her own financial gain. Cruz worked as the office
manager for Professional Elevator Services, Inc. (“PES”), a
small company owned and operated by Kenneth Mason.
Cruz’s office manager position required her to draft checks
to pay company expenses, purchase office supplies with
the company credit card, supervise two employees, and
perform other common bookkeeping and administra-
tive tasks. Cruz did not have signature authority for PES
accounts (only Mason could authorize payment), and an
outside accountant periodically audited the company’s
finances, including Cruz’s transactions.
Cruz accomplished her fraud by forging Mason’s signa-
ture on checks drawn on PES accounts and made out to
a conspiring co-worker, Kenneth Jackson, who also is
Mason’s son. Jackson cashed the checks at local currency
exchanges and split the proceeds with Cruz. To conceal the
forgery from Mason, Cruz recorded these checks in the
company ledger under the name of a false payee and de-
stroyed the canceled forged checks when the banks re-
turned them to PES. Cruz also used the PES company
credit card to pay her mortgage, make a down payment
on a car, and buy plane tickets, furniture, jewelry, and
other personal items. When the credit card bill arrived
at PES, Cruz drafted a check from the company account
to pay the balance and then threw away the statement
detailing the charges. Over the two years Cruz worked her
fraud, she stole about $121,000 from PES.
After admitting her fraudulent activities to the FBI
during an interview in March 2001, Cruz pleaded guilty
to one count of bank fraud under 18 U.S.C. § 1344. At
sentencing the district court applied a two-level enhance-
No. 02-2728 3
ment pursuant to U.S.S.G. § 3B1.3 because it found she
had abused a position of trust in her commission of the
crime. The court sentenced Cruz to 15 months in prison
with three years supervised release and ordered her to
pay $113,986 restitution and a $100 special assessment.
Cruz argues on appeal that her job as office manager
did not provide her with sufficient discretion and author-
ity to warrant the abuse of trust enhancement.
ANALYSIS
We review the district court’s interpretation and appli-
cation of the Sentencing Guidelines de novo, but we defer
to the court’s finding that Cruz did in fact abuse a posi-
tion of trust unless the finding was clearly erroneous.
United States v. Sonsalla, 241 F.3d 904, 908 (7th Cir.
2001). Sentencing Guideline § 3B1.3 applies a two-level
enhancement to the offense level when a “defendant abused
a position of public or private trust, or used a special skill,
in a manner that significantly facilitated the commis-
sion or concealment of the offense.” United States Sen-
tencing Commission, Guidelines Manual, § 3B1.3 (Nov.
2000). This court employs a two-part test to determine
whether the abuse of trust guideline is appropriate un-
der a particular set of facts: (1) whether the defendant
occupied a position of trust, and (2) whether the defen-
dant’s abuse of that position of trust significantly facili-
tated her commission of the crime. Sonsalla, 241 F.3d
at 909.
Cruz argues she did not deserve the abuse of trust
enhancement for two reasons. First, Cruz claims she did
not occupy a position of trust in relation to the “victim”
of her crime. See United States v. Hathcoat, 30 F.3d 913,
919 (7th Cir. 1994) (analyzing position of trust from vic-
tim’s perspective). Cruz argues the relevant position of
trust for the purpose of applying § 3B1.3 is her relation-
4 No. 02-2728
ship to the drawee banks, which were the direct victims
of her charged bank fraud conduct, and not her employer,
PES. Since she neither actually nor constructively stood
in a position of trust to the defrauded banks, Cruz insists
she is ineligible for the abuse of trust enhancement. We
disagree.
Courts may apply the abuse of trust enhancement even
if the defendant did not occupy a position of trust in
relation to the victim of the offense of conviction; it is
enough if the defendant also harmed the person whose trust
she did abuse. See United States v. Bhagavan, 116 F.3d 189,
193 (1997) (finding that majority shareholder and presi-
dent of corporation charged with federal tax fraud abused
the trust of minority shareholders even though he com-
mitted his crime against federal government). Similarly,
a “vulnerable victim” enhancement may apply where
the vulnerable victim was not the victim of the offense
of conviction, but was harmed by conduct involved in the
commission of that offense. See, e.g., United States v.
Stewart, 33 F.3d 764, 770 (7th Cir. 1994); United States v.
Firment, 296 F.3d 118, 120-21 (2d Cir. 2002). Of course,
courts do not have unfettered discretion in deciding wheth-
er to apply sentencing enhancements. Rather, the guide-
lines make an enhancement available only in those cases
where a defendant’s charged or relevant conduct included
a specific aggravating factor, such as an abuse of trust.
See U.S.S.G. § 3B1.3, comment. (n.2) (confining abuse of
trust enhancement to situations where defendants as-
sume position of trust relative to victim), and Ch. 3, Pt. B,
intro. comment. (instructing court to consider all relevant
conduct in determining whether defendant abused a posi-
tion of trust).
Here, the district court properly applied the abuse of
trust enhancement to Cruz’s sentence because her check
forgery and bookkeeping deception vis-a-vis her employer
constituted relevant conduct to her bank fraud convic-
No. 02-2728 5
tion. The sentencing guidelines define relevant conduct
as criminal activity “that occur[s] during the commission
of the offense of conviction, in preparation for that offense,
or in the course of attempting to avoid detection or re-
sponsibility for that offense.” U.S.S.G. § 1B1.3(a)(1). Cruz’s
fraud against PES not only occurred “during the com-
mission” of her bank fraud, as she caused PES to suffer
a direct financial loss of $121,000 when she kept the
money from the forged checks for her own personal gain,
it also occurred “in the course of attempting to avoid de-
tection or responsibility” for her crime, as she entered
false information into the PES accounting ledgers to
hide her scheme. Furthermore, punishing Cruz for her
fraudulent conduct, which was aggravated by her abuse
of her employer’s trust, serves the purpose of the relevant
conduct guideline, which is “to free the [sentencing] court
from the strict confines of the indictment so that it may
hold the defendant accountable for the full range of harms
that stemmed from [her] offense conduct.” United States
v. Ritsema, 31 F.3d 559, 567 (7th Cir. 1994).
Next, Cruz argues she had insufficient discretionary
authority in her job as office manager to warrant the
abuse of trust enhancement. In particular, she claims
she is more like the ordinary bank teller or hotel clerk
whom the Sentencing Guidelines suggest is not within
reach of the enhancement than the skilled professional
whose position of trust facilitates the commission of the
crime. See U.S.S.G. § 3B1.3, comment. (n.1). Unfortunately
for Cruz, our case law does not support her position. We
have consistently, and very recently, affirmed abuse of
trust enhancements in cases like this one where an em-
ployee takes advantage of her job position to defraud her
employer. See United States v. Tiojanco, 286 F.3d 1019,
1021 (7th Cir. 2002) (collecting cases).
Employees may hold a position of trust even when they
do not occupy upper-level or even supervisory positions.
6 No. 02-2728
See Tiojanco, 286 F.3d at 1022. Job title and credentials
alone cannot fully inform the court whether a person held
a position of trust. United States v. Hernandez, 231 F.3d
1087, 1089 (7th Cir. 2000). Instead, the relevant inquiry
in deciding whether to apply § 3B1.3 is one that “assesses
the actual amount of access an employee has to ‘items
of value.’ ” Id. (quoting United States v. Lamb, 6 F.3d
415, 419 (7th Cir. 1993)); United States v. Deal, 147 F.3d
562 (7th Cir. 1998). In Deal we held that a shopping cen-
ter comptroller who was subject to direct supervision in
submitting checks for payment held sufficient authority
in his position to garner the trust of his supervisors,
which then enabled him to evade detection while he
stole money from the company. Id., 147 F.3d at 563. We
explained that “the fact that [the defendant] was able to
steal so much and escape detection for so long is evi-
dence . . . that he had a position of trust in which he
could get away with more money and for a longer time
than a hotel clerk or a bank teller would be likely to be
able to do.” Id. Similarly, in Hernandez we held that a
staff accountant who had no managerial authority and
who had to submit forms for approval in order to facili-
tate his fraud nevertheless held a position of trust for
purpose of applying § 3B1.3. Id., 231 F.3d at 109.
Here, Cruz held a position of limited authority at PES
very similar to the positions held by the defendants in
Deal and Hernandez. And like those defendants, Cruz
abused the trust to work her fraud. Although Cruz ar-
gues she had no discretion to make payments and no
authority to sign checks, her position in the company
allowed her to steal nearly $121,000 over two years. Cruz
not only earned the trust of her supervisor, Mason, so that
he did not question her ledger entries or the propriety of
the checks submitted to him for approval, she also used
her position to destroy the forged checks when they were
returned to PES from the defrauded banks and to de-
No. 02-2728 7
stroy the itemized credit card statements which would
have revealed her fraud. Had Cruz not been entrusted
with significant authority by virtue of her position in the
company, she could not have defrauded Mason, PES, and
the payee banks to such a degree. There is ample evi-
dence to support the inference that Cruz held substantial
autonomy and used it to commit her crime, and so the
district court’s decision to apply the abuse of trust en-
hancement was not clearly erroneous.
CONCLUSION
We AFFIRM the application of the abuse of trust en-
hancement to Cruz’s sentence.
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—1-30-03