United States v. Ratliff

FILED
United States Court of Appeals
Tenth Circuit
April 26, 2010
UNITED STATES COURT OF APPEALS
Elisabeth A. Shumaker
Clerk of Court
FOR THE TENTH CIRCUIT
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
No. 09-7037
v. (D.C. No. 6:08-CR-00035-JHP-1)
(E.D. Okla.)
JANICE LYNN RATLIFF,
Defendant-Appellant.
ORDER AND JUDGMENT *
Before KELLY, PORFILIO, and O’BRIEN, Circuit Judges.
Defendant Janice Lynn Ratliff appeals from the sentence imposed after she
pled guilty to a criminal information charging her with one count of bank fraud,
in violation of 18 U.S.C. § 1344. We affirm.
*
After examining the briefs and appellate record, this panel has determined
unanimously to grant the parties’ request for a decision on the briefs without oral
argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument. This order and judgment is not binding
precedent, except under the doctrines of law of the case, res judicata, and
collateral estoppel. It may be cited, however, for its persuasive value consistent
with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
I. Factual Background and Procedural History
a. The Charge against Ms. Ratliff
On May 27, 2008, a criminal complaint was filed against Ms. Ratliff,
alleging that from September 2004 through April 2005, she “devised a scheme
and artifice to defraud The Bank N.A., McAlester, Oklahoma, . . ., in order to
obtain funds under the custody or control of said financial institution by means of
false or fraudulent representations.” R., Vol. 1, at 8. The complaint further
alleged that she “obtained approximately 10 checks totaling approximately
$116,430.84, made payable to Wynn’s Electronics, a business owned by the
defendant[’]s employer, Jim Wynn, Inc., and deposited them in the fraudulently
established bank account at The Bank N.A., in violation of” 18 U.S.C. § 1344.
R., Vol. 1, at 8. The FBI agent making the complaint, Special Agent James A.
Dawson, attached an affidavit stating that Ms. Ratliff “exercised complete control
over the disbursement of the funds deposited in the aforementioned account at
The Bank N.A.” Id. at 10. He further averred that “an additional approximately
$378,642.80 in checks . . . were determined to have been cashed by Janice Ratliff
at Latimer State Bank and Wilburton State Bank, both of Wilburton, Oklahoma[,
and t]he proceeds of these checks remained in the custody and control of Janice
Ratliff.” Id. He asserted that a total of “approximately $495,073.64 in checks
made payable to Jim Wynn, Inc., was embezzled by Janice Ratliff” between
January 2003 and April 2005. Id.
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On June 11, 2008, the U.S. Attorney filed an information charging
Ms. Ratliff only with one count of bank fraud involving $116,430.84 at The Bank,
N.A. in McAlester. Id. at 11-12. On June 13, 2008, Ms. Ratliff pled guilty to this
charge. R., Vol. 2, at 8, 19. After two hearings, the district court sentenced her
to sixty months’ imprisonment, thirty-six months of supervised release, a special
assessment of $100.00, and restitution of $484,023.62. Id., Vol. 1, at 88-91,
Vol. 2, at 188-90.
b. The Sentencing Hearings
James P. Wynn, Ms. Ratliff’s former employer, testified at the first
sentencing hearing. Id., Vol. 2, at 37. Mr. Wynn stated that he is an entrepreneur
who for many years had owned a business in Wilburton, Oklahoma, that sold
electronics to consumers and leased specialized communications and other
equipment to the oil and gas industry. Id. at 37-38. His business was called
“Jim Wynn, Inc.[,]” id. at 59, and he had “a Radio Shack dealership as well as a
U.S. Cellular agency.” Id. at 38. He said that his wife had worked with
Ms. Ratliff at a manufacturing plant in Wilburton and thought she was “a good
gal[,]” so she was hired to work for him. See id. He said that Ms. Ratliff was one
of the “early” employees hired as his business grew, and she worked for him for
about eighteen years. Id. at 39-40.
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On direct examination, Mr. Wynn testified that Ms. Ratliff initially did
sales in the retail store, but she later became the “office manager[,]” id. at 39, and
was a “salaried employee[,]” earning “roughly 700 to 800 dollars a week, paid
weekly[,]” id. at 56-57. On cross-examination, he agreed that Ms. Ratliff worked
for him as a “clerk in [his] Radio Shack business and [his] oil field business and
other related businesses[.]” Id. at 76. He later repeated that “she was the office
manager.” Id. at 81. He described her duties:
She . . . was responsible for receiving stock, checking that into
the computer, she did the payroll, kept track of the payroll records,
kept track of the incoming stock invoices, put those in the
receivables – I mean, payables file for my wife. She would do the
daily reconciliation of the books, she dictated the – when I – in the
absence of my wife and I, she was the one to take care of business,
tell other employees what to do.
Id. at 39-40. Mr. Wynn further testified that
[a]s we earned her trust and as our business grew, we gave her
additional duties to fulfill. Naturally, as a business grows and
expands, there’s more to do, more to keep up with, and we gave her
limited things to do. She never did – my wife was still the
bookkeeper as far as keeping the general ledger, paying the bills.
Ms. Ratliff was never on the signature card at any bank, never
authorized to write any checks.
In our absence, her duties were to receive payments, whether it
be daily receipts from the retail operation or payments from the oil
companies for the lease of equipment, and then in our absence, she
would take those – receive those payments, show them received in
the receivables file for my wife to then input into the billing
computer, and then make deposits.
Id. at 40-41.
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Mr. Wynn stated that beginning in approximately August 2003, his wife,
Dinah Wynn, was “totally out of the business for several months” due to medical
problems. Id. at 41. During the period of time that Mrs. Wynn was undergoing
treatment, Mr. Wynn said that he was “out taking care of her as well and was out
the majority of the time, then there fell more responsibilities to [Ms. Ratliff], but
it was – she still never had anything to do with the payment of bills – . . . or
anything to do with the checkbook.” Id. at 42. Mr. Wynn said that he “trusted
her like a sister. . . . trusted her through and through to the extent that [he and his
wife] didn’t give her full control.” Id. at 43. When asked if, due to his absence
from work, he was not able to supervise the business as well as he wanted to, he
answered: “Correct.” Id. at 81. And when asked if he “left it with [his]
employees to do the right thing[,]” he answered: “I left it with Ms. Ratliff, yes.”
Id. He further stated that “[i]t was Mrs. Ratliff’s duty to deposit the checks
correctly and by law when [my wife and I] had – when [my wife and I] were
unable to. If Ms. Ratliff delegated this duty, which was not correct, to [another
employee], that was beyond me.” Id. at 78. He said that “[t]here was a stamp,
‘Jim Wynn, Incorporated.’ The policy was for her to stamp the checks and then
make a deposit.” Id. at 89-90. Mr. Wynn had directed his employees to use the
stamp. Id. at 90.
On April 5, 2005, Mr. Wynn got a call from a vice president at Latimer
State Bank, who said: “‘Janice is down here wanting to cash a $3,777 check.
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What should I do?’” Id. at 43; see also id. at 75-76. Although Mr. Wynn said he
did not know why Ms. Ratliff was “wanting to do that[,]” id. at 43, he agreed to
let her cash that check and “follow up on it” later because he “trusted her[,]” id.
at 44. He said he sometimes had employees cash checks for him and bring him
the cash, but he “assume[d] that the bank and that employee were going to do it
correctly and bring [him] the cash from a deposit.” Id. at 77. He did not confront
Ms. Ratliff at that time because he did not want to do so unjustly. Id. at 44. But
he later determined that Ms. Ratliff’s “scheme was . . . to stamp X number of
checks – she may take eleven checks, stamp them with the stamp, take the twelfth
check and take it and present it with a handwritten endorsement and say, I want to
deposit these eleven, Ms. Cashier or Ms. Teller, but here, give me cash for this
one.” Id. at 90.
Mr. Wynn then “research[ed] back to January 1 of ’03[,]” id. at 67, and
determined that “approximately [$]484,000 or [$]495,000 . . . was the loss
experienced by the Wilburton bank, the Bank N.A., and Latimer State Bank”
based on “actual physical evidence that [he and his wife] could produce.” Id.
at 50-51. He broke down the amounts allegedly converted by Ms. Ratliff through
improperly handled checks as follows: “$252,620.55 through the Wilburton State
Bank[,]” id. at 66, “$115,327.56, through Latimer State Bank,” id. at 66-67, and
“$116,075.51 to the Bank, N.A.,” id. at 67. The total of those three losses was
$484,023.62. Id.
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Mr. Wynn testified that Ms. Ratliff had set up a bank account “in the name
of ‘Janice Ratliff, doing business as Wynns Electronics[,]’” but she actually had
no rights or permission from him to do business under that name. Id. at 98, 101.
He stated that she falsified a bill of sale, forging Mrs. Wynn’s signature to it, and
falsified other documents to present to The Bank, N.A., in order to “open[] a bank
account in that name to further her scheme.” Id. at 98-99. She then deposited
checks for his company into her new account. Id. at 99.
Mr. Wynn testified that it had been very time-consuming to determine the
loss, id. at 50, 65-66, 71, 88-90, and that three experts had told him that the fraud
“was difficult to catch because of the way it was done[,]” id. at 102; see also id.
at 71, 88-89. When asked if over $400,000 had been stolen from him and he did
not catch it for over a year, he answered: “True, true.” Id. at 88. He explained
that even if he “had had an accountant or a bookkeeper, three of them have stated
that they probably would not have caught this embezzlement.” Id. at 89. When
asked why he had had difficulty determining that there was money missing from
his business, Mr. Wynn also testified that he and his wife “were not in [their]
normal means of business because of [his] wife’s illness and [his] time out of the
business.” Id. at 103.
The government called no witnesses other than Mr. Wynn at the first
hearing. See id. at 103. Both sides offered certain documents into evidence
during the initial sentencing hearing, and the district court continued the hearing.
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At the second sentencing hearing, the government offered the testimony of
Special Agent Dawson, who had investigated the fraud case against Ms. Ratliff.
Id. at 128. His investigation involved reviewing the records, checks, and
documents, and interviewing witnesses associated with this case at The Bank,
N.A., in McAlester, and Wilburton State Bank and Latimer State Bank in
Wilburton. Id. at 128-29.
Agent Dawson explained that Ms. Ratliff had used fraudulent documents to
establish an account at The Bank, N.A., had deposited checks made payable to
Jim Wynn, Inc. or an entity owned by Jim Wynn into that account, and then had
used the money for her own purposes. See id. at 129-30. He said she used
approximately ten checks to procure approximately $116,000 at The Bank, N.A.
Id. at 147. He said that at Wilburton State Bank, Ms. Ratliff had received cash or
cashier’s checks after presenting checks, made payable to Jim Wynn, Inc. or an
entity owned by Jim Wynn, which were endorsed on the back with her signature
and/or the forged signature of Jim Wynn. Id. at 130-32. Agent Dawson
determined from talking to Mr. Wynn that she did not have permission to use his
name to cash checks, id. at 149, and testified that “there is no reason . . . any
reasonable person would ever suspect or believe that that cash was ever in the
hands of Mr. Wynn[,]” id. at 150. The government presented several exhibits of
cashier’s checks made payable to accounts belonging to Ms. Ratliff, see id.
at 135-44, 158, and Agent Dawson testified that “the funds ultimately came from
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Jim Wynn, Incorporated[,]” id. at 143. He said that at Latimer State Bank,
Ms. Ratliff had cashed checks made payable to Jim Wynn, Inc. or another entity
owned by Jim Wynn, using endorsements of her signature and/or the forged
signature of Jim Wynn, and had used the money for her own purposes. Id.
at 144-145. Agent Dawson determined from talking to Jim Wynn that Mr. Wynn
did not receive these funds, either. Id. at 152. Agent Dawson testified that all of
the checks mishandled at all three banks were cashed in a common scheme or plan
over a common period of time, from 2003 into 2005. Id. at 145. He said that the
loss to Wilburton State Bank was $252,620.55, the loss to Latimer State Bank was
$115,327.56, and the loss to The Bank, N.A., was $116,075.51, making a total
loss of “approximately $484,000.00[,]” id. at 159-60—and specifically
$484,023.62.
c. The Sentencing Factors
As noted above, ultimately, Ms. Ratliff was not charged with embezzlement
from Jim Wynn, Inc., but was charged only with one count of bank fraud based on
the phony account she opened at The Bank, N.A. See id. at 17, 25. She stated at
her change-of-plea hearing that, in August 2004, she “opened a bank account
under Wynn’s Electronics that had [her] name and [her] social security number at
McAlester, Oklahoma, The Bank N.A.” Id. at 25. She admitted that her purpose
in opening the bank account was to defraud her employer of money by depositing
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his checks in that checking account. See id. She also admitted that she intended
to execute a scheme that defrauded the bank, and intended to obtain money by
false or fraudulent pretenses. See id. at 26. She also agreed that the
government’s evidence would show that she
represented to the bank that the interest in a particular business that
the Wynns[] owned was being sold to [her], at which point in time
there was a document prepared at which she forged the signature of
Mrs. Wynn in order to establish that relationship, which in turn not
only defrauds the Wynns, but it defrauds the bank because it’s a . . .
misrepresentation to the bank.
Id. at 26-27. She admitted that she executed that document with the intent to
defraud. See id. at 27.
At the end of the second sentencing hearing, the district court pronounced
Ms. Ratliff’s sentence. Overruling Ms. Ratliff’s objection, the court found by a
preponderance of the evidence “that there was a common scheme or plan
regarding the funds obtained from the checks fraudulently presented and/or
converted at Wilburton State Bank and Latimer State Bank and . . . the funds
associated with those checks [were] appropriately considered as relevant
conduct.” Id. at 180. Counsel for Ms. Ratliff argued that when she cashed checks
at Wilburton State Bank and Latimer State Bank—which amounted to nearly
$300,000—she gave the cash to Mr. Wynn. See id. at 173-74. The court rejected
her argument, and added fourteen points to the base offense level for the amount
of loss. Id. at 180.
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Further, overruling Ms. Ratliff’s objection, the court also added two points
for abuse of a position of trust under U.S.S.G. § 3B1.3, finding that Ms. Ratliff
“was a trusted employee, given very little oversight.” Id. at 181. The court noted
that Mr. Wynn “described her position as office manager and added that while he
and his wife were not present at the business, Ms. Ratliff had control of the
same.” Id. at 181-82. The court also noted that another employee, Rachel
Sennet, stated at a deposition prepared for another case that Ms. Ratliff acted as
supervisor for her and other employees when the Wynns were not present. Id.
at 182. The court found by a preponderance of the evidence that Ms. Ratliff’s
“position facilitated her ability to carry out and conceal this scheme.” Id.
Again, overruling Ms. Ratliff’s objection, the court also added two points
for the use of sophisticated means under U.S.S.G. § 2b1.1(b)(9). Id. at 182-83.
The court found that she “went to extraordinary lengths to carry out this
offense[,] . . . creating a false bill of sale and establishing – and establishment of
a bank account and under false pretenses.” Id. at 183. The court also mentioned
the government’s “documentation of various exhibits[,]” although the court did
not describe them. See id.
The court found that the total offense level was 25 and the criminal
category was I, resulting in an advisory sentencing range of 57 to 71 months. Id.
at 188. The court adopted the presentence report as the factual basis for the
sentence, except where corrected by the court’s findings. Id. As noted above, the
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court sentenced Ms. Ratliff to sixty months’ imprisonment, thirty-six months of
supervised release, a special assessment of $100.00, and restitution of
$484,023.62. Id. at 188-90. Ms. Ratliff appeals.
II. Issues on Appeal
Ms. Ratliff argues that the district court: (1) employed an incorrect
definition of a “position of trust” and lacked a sufficient factual basis to support
the application of the enhancement for abuse of a position of trust under
U.S.S.G. § 3B1.3, because she was not an agent or employee of the victim of the
bank fraud, The Bank, N.A., and lacked the requisite managerial discretion in her
position with Jim Wynn, Inc.; (2) lacked a sufficient factual basis to support a
two-point enhancement for use of sophisticated means under
U.S.S.G. § 2B1.1(b)(9)(C) because her bank fraud scheme was not especially
complex or intricate, as required by the commentary accompanying the Guideline;
(3) improperly failed to find relevant conduct of embezzlement beyond a
reasonable doubt instead of under the usual preponderance of the evidence
standard when the court determined that the amount of loss and restitution was
higher than the amount she had admitted, $116,430.84; (4) improperly determined
the amount of loss and restitution because, under any evidentiary standard, it was
error to include alleged criminal acts of embezzlement as relevant conduct to the
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offense of bank fraud; and (5) improperly failed to subtract three points for
acceptance of responsibility.
III. Discussion
a. Position of Trust Enhancement under U.S.S.G. § 3B1.3
The district court imposed a two-point enhancement pursuant to
U.S.S.G. § 3B1.3 for abuse of a position of trust. 1 “Whether a defendant
occupied a position of trust under USSG § 3B1.3 is generally a factual matter that
we review for clear error.” United States v. Spear, 491 F.3d 1150, 1153
(10th Cir. 2007) (quotation omitted). Ms. Ratliff argues that the district court
used the wrong definition for a position of trust, however, which is a legal
question that we review de novo. Id. She also argues that the position of trust
enhancement does not apply because the position of trust must be in relation to
the victim of the charged offense, which was The Bank, N.A., not Jim Wynn, Inc.
We review this legal question de novo. See id. She further asserts that the
district court lacked a sufficient factual basis as a matter of law to support the
application of the enhancement for abuse of a position of trust, which we also
review de novo. United States v. Hamilton, 587 F.3d 1199, 1222 (10th Cir.
2009). We reject Ms. Ratliff’s arguments.
1
U.S.S.G. § 3B1.3 provides, in pertinent part: “If 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, increase
[the offense level] by 2 levels.”
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“To invoke § 3B1.3, the defendant must either occupy a formal position of
trust or must create sufficient indicia that [s]he occupies such a position of trust
that [s]he should be held accountable as if [s]he did occupy such a position.”
United States v. Haber, 251 F.3d 881, 891 (10th Cir. 2001) (quotation omitted).
In the fraud context, we have applied § 3B1.3 in two types of
cases. The first is where the defendant steals from his employer,
using his position in the company to facilitate the offense. See, e.g.,
United States v. Levy, 992 F.2d 1081 (10th Cir. 1993) (official of
bankrupt company embezzled from company, defrauding trustee and
company’s creditors); United States v. Chimal, 976 F.2d 608
(10th Cir. 1992) (embezzlement by company comptroller). The
second is where a “fiduciary or personal trust relationship exists”
with other entities, and the defendant takes advantage of the
relationship to perpetrate or conceal the offense. United States v.
Brunson, 54 F.3d 673, 677 (10th Cir.), cert. denied, 516 U.S. 951
(1995).
United States v. Koehn, 74 F.3d 199, 201 (10th Cir. 1996).
“Before imposing this enhancement, a district court must find two things:
(1) the defendant possessed a position of trust; and (2) the defendant abused the
position to significantly facilitate the commission or concealment of the offense.”
United States v. Guidry, 199 F.3d 1150, 1159 (10th Cir. 1999) (citing United
States v. Burt, 134 F.3d 997, 998-99 (10th Cir. 1998)). “However, to reach the
second prong of Burt a district court must first find the defendant occupied a
position of trust, and our case law clearly states the position of trust must be
found in relation to the victim of the offense: The question of whether an
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individual occupied a position of trust is evaluated from the victim’s perspective.”
Id. at 1160 (quotation omitted).
The question of how narrowly or broadly the term “victim” should be
defined is in dispute among the circuits. United States v. Edwards, 325 F.3d
1184, 1188 n.1 (10th Cir. 2003) (noting circuit split is discussed in Guidry,
199 F.3d at 1160 n.6). We affirm the district court’s conclusion that Mr. Wynn
was a victim of Ms. Ratliff’s bank fraud, see R., Vol. 2, at 181, because his
company, Jim Wynn, Inc., was the true owner of the checks she converted to her
own use through that fraud. She relies upon Guidry, but that case is clearly
distinguishable because the crime in that case was filing false income tax returns,
and the government was necessarily the only victim of that crime. See 199 F.3d
at 1160. We move on to Ms. Ratliff’s other arguments.
Ms. Ratliff asserts error on the first step of Burt, arguing that the
imposition of the position of trust enhancement was legal error because she did
not occupy a position of trust vis-a-vis either The Bank, N.A. or Jim Wynn, Inc.,
under the correct definition of the term as applied to the facts elicited at
sentencing. The district court made no explicit finding that Ms. Ratliff occupied
a position of trust with regard to either The Bank, N.A. or Jim Wynn, Inc., but the
court’s decision may be read to imply that the court viewed Ms. Ratliff to occupy
a formal position of trust with respect to Jim Wynn, Inc. See R., Vol. 2,
at 181-82.
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In defining a position of public or private trust, the Guidelines’ Application
Note 1 to § 3B1.3 provides that:
“Public or private trust” refers to a position of public or private trust
characterized by professional or managerial discretion (i.e.,
substantial discretionary judgment that is ordinarily given
considerable deference). Persons holding such positions ordinarily
are subject to significantly less supervision than employees whose
responsibilities are primarily non-discretionary in nature.
Spear, 491 F.3d at 1153-54 (quoting U.S.S.G. § 3B1.3, cmt. n.1) (emphasis in
original). “The commentary goes on to illustrate the scope of the
enhancement—it applies, for example, to professionals like lawyers or doctors,
but not to bank tellers or hotel clerks.” Spear, 491 F.3d at 1154.
We have previously explained that “the term ‘position of trust’ is a bit of a
misnomer” because this enhancement “has little to do with trustworthiness and
everything to do with authority and discretion.” Spear, 491 F.3d at 1154
(discussing Edwards, 325 F.3d at 1188) (emphasis in original). A position of
trust is “a position of authority characterized by the exercise of professional or
managerial discretion[.]” Id. We have held that “discretion” means, in general,
that an employee was charged “with deciding, on a case-by-case basis, whether a
particular expenditure or transfer of company funds or other valuables is
necessary or beneficial to the organization.” Edwards, 325 F.3d at 1188. Where
a defendant, in her position as a buyer, was “authorized to purchase goods and
services for [her employer] costing up to $100,000 without supervisory
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approval[,]” we concluded that the district court correctly found that she was in a
position of trust. See United States v. Arreola, 548 F.3d 1340, 1346-47 (10th Cir.
2008). More generally, managerial discretion is shown by “authority to engage in
case-by-case decision-making, to set policies, and to grant exceptions to
governing policies or protocols.” Spear, 491 F.3d at 1155. However, “[t]hese
factors are non-exhaustive, and no one factor is dispositive of the analysis.” Id.
“‘The fact that [the defendant] was trusted by her employer with significant
responsibility . . . is not determinative.’” Id. at 1154 (quoting Edwards, 325 F.3d
at 1187 (alteration in original; emphasis added)). And “‘job titles themselves do
not control; actual duties and authorized activities do.’” Id. at 1157 (quoting
Edwards, 325 F.3d at 1187). The fact that a defendant was given little
supervision does not necessarily mean that her duties were not ultimately
ministerial. See id. at 1155. “The commentary for § 3B1.3 contemplates a
continuum of discretion from bank teller to professional[, and s]omewhere along
the continuum an employee moves from ministerial to discretionary in the
performance of job duties.” Spear, 491 F.3d at 1157. To reach a conclusion, the
court “must undertake a functional analysis of job responsibilities” to determine
whether those duties were actually managerial rather than merely ministerial. Id.
at 1155.
We have emphasized “that the lack of ‘any [ ] authority to make substantial
discretionary judgments’ is key in determining whether the enhancement applies.”
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Id. at 1154 (quoting Edwards, 325 F.3d at 1187 (holding that employee in
accounting department was not in position of trust)). And the fact that “company
officials trusted [her], and that her position gave her access to customers’ checks
and important company records” is not enough if the evidence does not support
the conclusion that she had authority to make substantial discretionary judgments.
See Edwards, 325 F.3d at 1187. This is so because “[o]pportunity and access do
not equate to authority, or to the kind of ‘substantial discretionary judgment that
is ordinarily given considerable deference.’” Id. (quoting U.S.S.G. § 3B1.3, cmt.
n.1). If “the facts show no more than that [defendant’s] job was responsible but
ministerial[,]” they will not meet the “higher level” bar set by Application Note 1.
See id. at 1188. The district court relied on the fact that Mr. Wynn said her title
was “office manager[,]” id. at 181, and a former coworker said she was a
“supervisor[,]” id. at 182. The court also relied on the fact that Ms. Ratliff was “a
trusted employee, given very little oversight[,]” id. at 181, and said that when the
Wynns were not present, she had “control” of the business, id. at 181-82.
Additionally, Mr. Wynn’s testimony indicated he believed Ms. Ratliff’s
duties entailed a managerial level of discretion. This belief is manifest in the fact
he left her in charge of the operation of the business during his long absences.
Also, when Mr. Wynn was notified by a vice president of the Latimer State Bank
that Ms. Ratliff wanted cash for a check payable to Jim Wynn Incorporated, he
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authorized the transaction. He did so and did not challenge her even though he
could not understand why Ms. Ratliff wanted to make the transaction.
A more precise questioning of Mr. Wynn could have produced more
specific answers from Mr. Wynn about the full nature of Ms. Ratliff’s
employment, but we do not believe that to be consequential. When all the
evidence on point is taken together, as it must be, we believe it is sufficient to
establish Ms. Ratliff held a position of trust as governed by U.S.S.G. § 3B1.3.
b. Sophisticated Means Enhancement under U.S.S.G. § 2B1.1(b)(9)(C)
The district court added two points for the use of sophisticated means under
U.S.S.G. § 2B1.1(b)(9)(C). “When reviewing a district court’s application of the
Sentencing Guidelines, we review legal questions de novo and we review any
factual findings for clear error, giving due deference to the district court’s
application of the guidelines to the facts.” United States v. Jones, 530 F.3d 1292,
1305 (10th Cir.) (quotation omitted), cert. denied, 129 S. Ct. 583 (2008). As in
Jones, “[h]ere, Ms. [Ratliff has] not contested findings of fact or the district
court’s interpretation of the Guidelines; [she] contest[s] only the district court’s
application of the Guidelines to the facts.” Id. Accordingly, “we will review the
district court’s decision deferentially rather than de novo.” Id. We reject
Ms. Ratliff’s argument that her challenge to the court’s application of the
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sophisticated means enhancement on the facts of this case presents a question of
law that we should review de novo.
Section 2B1.1(b)(9) provides that a sentencing court must assess a
two-level increase in the offense level of a defendant
[i]f (A) the defendant relocated, or participated in relocating, a
fraudulent scheme to another jurisdiction to evade law enforcement
or regulatory officials; (B) a substantial part of the fraudulent scheme
was committed from outside the United States; or (C) the offense
otherwise involved sophisticated means . . . .
Jones, 530 F.3d at 1305 (quoting U.S.S.G. § 2B1.1(b)(9)) (alteration in original).
We have noted that “[t]he accompanying commentary explains that ‘sophisticated
means’ refers to an ‘especially complex or especially intricate offense conduct
pertaining to the execution or concealment of an offense.’” Id. (citing
U.S.S.G. § 2B1.1(b)(9) cmt. n.8(B)) (emphasis added). And we have also noted
that the commentary “that interprets or explains a guideline is authoritative unless
it violates the Constitution or a federal statute, or is inconsistent with, or a plainly
erroneous reading, of that guideline.” Id. (quotation omitted).
The district court based the sophisticated means enhancement under
§ 2B1.1(b)(9)(C) on the admitted facts that Ms. Ratliff forged a bill of sale
showing that she owned Wynn’s Electronics and then established an account in
her name at The Bank, N.A. under those false pretenses. See R., Vol. 2, at 183.
Ms. Ratliff argues that opening a phony bank account is not especially complex or
intricate and does not satisfy the meaning of the Guideline applied in this case.
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We acknowledged in Jones that the commentary to the Guideline requires
that a “sophisticated” scheme be “especially” complex or “especially” intricate.
530 F.3d at 1305-06. Nevertheless, we upheld the application of the sophisticated
means enhancement under the facts of that case. See id. Ms. Ratliff argues that
this case falls instead within the facts of United States v. Rice, 52 F.3d 843,
849-50 (10th Cir. 1995), which involved a different sophisticated means
Guideline, and where we did not uphold the application of that enhancement.
We believe that the facts of this case fall between those in Rice and Jones.
Rice was a tax case where the defendant “merely claimed to have paid
withholding taxes he did not pay.” 52 F.3d at 849. In this case, by way of
contrast, Ms. Ratliff told lies to The Bank, N.A. and, to sell her lies, forged both a
bill of sale and also a second document purporting to show Mrs. Wynn conveying
a particular company check to Ms. Ratliff.
Jones is also distinguishable on the facts—in addition to creating fraudulent
checks on their home computers, those defendants also recruited a “sizeable
group” of accomplices to provide them with confidential, non-public bank
account information. 530 F.3d at 1305-06. In this case, however, although there
was evidence that other employees also mishandled a few checks, there was no
evidence that Ms. Ratliff enlisted any accomplices in her scheme.
The government asserts that Ms. Ratliff manipulated the company’s
financial records to conceal her fraud. Aplee. Br. at 38. The evidence cited,
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however, indicates only that Ms. Ratliff exploited a vulnerability in the audit
process—Mr. Wynn testified that a normal audit does not correlate deposits to
income and that experts told him that a normal audit would not have caught
Ms. Ratliff’s fraud. R., Vol. 2, at 88-89. Nevertheless, Mr. Wynn testified that
Ms. Ratliff recorded the mishandled checks “paid written in hand, . . . but it was
never, quote, rung up or run through the point-of-sale computer that would have
showed [sic] it for the sales that day.” Id. at 50. This evidence shows that failing
to enter some checks into the computer was part of Ms. Ratliff’s overall scheme
to deposit most checks correctly by stamping them for deposit with the company’s
stamp, but to then misdirect/mishandle one check out of a stack by handwriting an
endorsement and presenting it for cash at one of the company’s banks in
Wilburton or depositing it into her phony company account at The Bank, N.A. in
McAlester, making the fraud difficult to detect. See id. at 89-90.
The sophisticated means enhancement applies if the overall scheme was
sophisticated, even if the individual acts were not. Jones, 530 F.3d at 1306. In
Jones, we noted in particular the Fifth Circuit’s decision in United States v.
Wright, 496 F.3d 371, 377-79 (5th Cir. 2007). We called the scheme in Wright
“less complex than the one at issue.” Jones, 530 F.3d at 1306. We pointed out
that in Wright, “the defendant, a mortgage broker, misrepresented the net worth of
some of his clients to potential lenders. He did so by purchasing cashier’s checks
in the names of his clients and forwarding copies of the checks to the lenders,
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thereby giving the impression that the checks were the borrowers’ assets.” Jones,
530 F.3d at 1306. Those facts strike us as very similar to Ms. Ratliff’s scheme.
Giving due deference to the district court’s decision, we conclude that the court
did not err in applying the sophisticated means enhancement to Ms. Ratliff.
c. Relevant Conduct—Legal Standard
The district court determined that the government proved by a
preponderance of the evidence that Ms. Ratliff was accountable for losses at all
three banks where Wynn Electronics’ checks were mishandled and ordered her to
make restitution in the amount of $484,023.62. R., Vol. 2, at 184, 189. However,
the amount she admitted she fraudulently converted to her own use through her
phony account at The Bank, N.A. in McAlester was only $116,430.84. See R.,
Vol. 1, at 11-12; id., Vol. 2, at 19.
Ms. Ratliff argues that the district court should not have included losses
due to embezzlement separate from the bank fraud as relevant conduct unless
those losses were proved beyond a reasonable doubt. She maintains that because
she was unwilling to plead guilty to embezzlement, and the government did not
include the count charging embezzlement in the information, the court unfairly
increased her sentence by including losses due to embezzlement based on proof
by a preponderance of the evidence.
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“We review de novo any legal questions underlying the district court's
application of the Guidelines.” United States v. Griffith, 584 F.3d 1004, 1011
(10th Cir. 2009). Ms. Ratliff acknowledges that we have held that “[b]oth before
and under the Guidelines, facts relevant to sentencing have generally been found
by a preponderance of the evidence.” United States v. Magallanez, 408 F.3d 672,
684 (2005) (citing United States v. Watts, 519 U.S. 148, 156 (1997)). Indeed, the
Supreme Court has held that “[a] jury verdict of acquittal on related conduct . . .
‘does not prevent the sentencing court from considering conduct underlying the
acquitted charge, so long as that conduct has been proved by a preponderance of
the evidence.’” Id. (quoting Watts, 519 U.S. at 157) (emphasis added).
Nevertheless, Ms. Ratliff asks us to reconsider our holding in Magallanez based
on the reasoning of some of the other circuits that a higher standard of proof may
be necessary to satisfy due process where “a sentence enhancement factor
becomes the ‘tail which wags the dog of the substantive offense.’” Aplt. Opening
Br. at 53 (quoting United States v. Townley, 929 F.2d 365, 369 (8th Cir. 1991)
(quoting McMillan v. Pennsylvania, 477 U.S. 79, 88 (1986))).
There are two problems with Ms. Ratliff’s argument. First, in McMillan,
the Supreme Court rejected the argument that “if a State wants to punish visible
possession of a firearm [in a defendant’s sentence] it must undertake the burden
of proving that fact beyond a reasonable doubt.” See 477 U.S. at 84 (emphasis
added). The Court also rejected an argument that due process requires that a fact
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treated “as a sentencing consideration rather than an element of a particular
offense” must “be proved by at least clear and convincing evidence” rather than
by a preponderance of the evidence. Id. at 91. The Court pointed out that
“[s]entencing courts have traditionally heard evidence and found facts without
any prescribed burden of proof at all.” Id. Second, we are foreclosed by our own
prior holding in Magallanez that sentencing factors are generally proved by a
preponderance of the evidence. 408 F.3d at 684. “[W]e are bound by the
precedent of prior panels absent en banc reconsideration or a superseding contrary
decision by the Supreme Court.” United States v. Albert, 579 F.3d 1188, 1197
n.11 (10th Cir. 2009) (quotation omitted). The district court correctly found
relevant conduct by a preponderance of the evidence.
d. Relevant Conduct—Determination of Losses to Include in Restitution
Ms. Ratliff argues in the alternative that the district court erred in setting
the amount of restitution at $484,023.62 because, under any evidentiary standard,
it was error to include alleged criminal acts of embezzlement as relevant conduct
to the admitted offense of bank fraud. We disagree.
“While we review for clear error the district court’s factual findings in
support of a determination of relevant conduct, we review the ultimate
determination of relevant conduct de novo.” Griffith, 584 F.3d at 1012-13
(quotation omitted). “Relevant conduct under the Guidelines . . . comprises more,
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often much more, than the offense of conviction itself, and may include
uncharged and even acquitted conduct.” Id. at 1012 (quotations omitted). We
have held “that for a district court to consider a defendant’s conduct as ‘relevant’
under the Sentencing Guidelines, the Government must prove by a preponderance
of the evidence that the defendant (1) engaged in conduct (2) related to the
offense of conviction pursuant to U.S.S.G. § 1B1.3 and (3) constituting a criminal
offense under either a federal or a state statute.” Griffith, 584 F.3d at 1013.
“The Sentencing Guidelines provide that the court should take into account
all activities that form part of the ‘same course of conduct or common scheme or
plan as the offense of conviction,’ U.S.S.G. § 1B1.3(a)(2), even if the defendant
was never charged with that additional conduct and the jury never found h[er]
guilty of it.” United States v. Caldwell, 585 F.3d 1347, 1350 (10th Cir. 2009).
“The Guidelines commentary . . . explains that
For two or more offenses to constitute part of a common scheme or
plan, they must be substantially connected to each other by at least
one common factor, such as common victims, common accomplices,
common purpose, or similar modus operandi. . . .
. . . . Offenses that do not qualify as part of a common scheme or
plan may nonetheless qualify as part of the same course of conduct if
they are sufficiently connected or related to each other as to warrant
the conclusion that they are part of a single episode, spree, or
ongoing series of offenses.
Griffith, 584 F.3d at 1012 (quoting U.S.S.G. § 1B1.3 cmt. n.9(B)). “We have
interpreted this language to mean that if the conduct is sufficiently similar and
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within the same temporal proximity, it may be considered relevant for purposes of
determining the guideline range.” Id. (quotations omitted).
We have thoroughly reviewed the evidence. Special Agent Dawson
testified that all of the checks Ms. Ratliff mishandled at all three banks were
cashed in a common scheme or plan over a common period of time, from 2003
into 2005. R., Vol. 2, at 145. We conclude that the district court properly
rejected Ms. Ratliff’s argument that she cashed nearly $300,000 in checks and
took the money back to Mr. Wynn (despite his testimony that she did not), and
affirm the court’s inclusion of all of the mishandled checks attributable to
Ms. Ratliff as relevant conduct.
e. Acceptance of Responsibility
Ms. Ratliff argues that the district court erred by failing to subtract three
points for acceptance of responsibility because she accepted responsibility for the
bank fraud that was the sole charge of the information. We reject this argument.
“The district court’s acceptance of responsibility determination is subject to
the clearly erroneous standard of review.” United States v. Quarrell, 310 F.3d
664, 682 (10th Cir. 2002). “Because the ‘sentencing judge is in a unique position
to evaluate a defendant’s acceptance of responsibility,’ his or her decision is
‘entitled to great deference on review.’” Id. (quoting U.S.S.G. § 3E1.1, cmt. n.5
(2001)). “The burden of proving acceptance of responsibility is on the defendant,
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who must establish by a preponderance of the evidence a recognition and
affirmative acceptance of personal responsibility for h[er] criminal conduct.” Id.
(quotation omitted). “Among the considerations used in determining whether a
defendant should receive the acceptance of responsibility adjustment are whether
the defendant admitted to the elements of the crimes and whether the defendant
admitted to, or at least did not falsely deny, any other relevant conduct.” Id.
(citing § 3E1.1, cmt. n.1(a)) (emphasis added). “If a defendant denies relevant
conduct and the court determines such conduct occurred, the defendant cannot
claim to have accepted responsibility for h[er] actions.” United States v. Brown,
47 F.3d 198, 204 (10th Cir. 1995).
The district court found “by a preponderance of the evidence that the
Defendant’s actions are inconsistent with an affirmative acceptance of
responsibility. Not only does the Defendant maintain that she only committed
fraud based on ten checks [taken to The Bank, N.A. in McAlester], she now
implies that her employer was somehow involved in her fraudulent activities.
Since the Defendant has falsely denied or frivolously contested relevant conduct
found by this court, she should not receive points for acceptance of
responsibility.” R., Vol. 2, at 186. We have concluded that the court did not err
in determining the extent of relevant conduct, and we also agree with the court’s
finding that Ms. Ratliff refused to accept the responsibility for the full extent of
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her criminal conduct. We conclude that the court properly determined that
Ms. Ratliff was not entitled to a reduction for acceptance of responsibility.
IV. Conclusion
The judgment of the district court is AFFIRMED.
ENTERED FOR THE COURT
PER CURIAM
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United States v. Ratliff
PORFILIO, J., dissenting.
I respectfully dissent.
Although I agree with most of the court’s analysis of the issues of this case,
I have reservations about the sufficiency of the evidence to support the district
court’s conclusion Ms. Ratliff held a “position of trust.” I believe, as the
majority notes, our caselaw requires that a person in a position of trust within a
commercial setting be more than trustworthy. Here, to have a position of trust,
Ms. Ratliff had to have been in a managerial rather than a ministerial position.
Although Mr. Wynn testified Ms. Ratliff was “trusted” and needed “very little
oversight,” the actual substance of her duties is unclear. Indeed, I believe
Mr. Wynn’s testimony on that subject was internally conflicting.
The prosecutor framed his questions to Mr. Wynn in terms of the trust and
responsibility he gave Ms. Ratliff, and Mr. Wynn answered in kind. As a result,
the evidence elicited during the sentencing hearings failed to show the details of
the discretion and authority Ms. Ratliff had in her position with Jim Wynn, Inc.
What did she do on a regular basis to distinguish her as the leader of other
employees, either when the Wynns were present to supervise her, or when they
were not? Consequently, as distasteful as it may seem, I believe this case should
be remanded for a fuller exploration of what Ms. Ratliff actually did that would
show she had managerial authority.