United States v. Shotsberger

Opinions of the United
2003 Decisions States Court of Appeals
for the Third Circuit
12-23-2003
USA v. Shotsberger
Precedential or Non-Precedential: Non-Precedential
Docket No. 03-1923
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 03-1923
UNITED STATES OF AMERICA
v.
KERRY DEAN SHOTSBERGER
Appellant
Appeal from the United States District Court
for the Middle District of Pennsylvania
(D.C. Criminal Action No. 02-cr-00138)
District Judge: Honorable Sylvia H. Rambo
Submitted Under Third Circuit LAR 34.1(a)
October 31, 2003
Before: SCIRICA, Chief Judge, NYGAARD and AMBRO, Circuit Judges
(Opinion filed December 23, 2003)
OPINION
AM BRO, Circuit Judge
Kerry Dean Shotsberger appeals a sentence enhancement based on the District
Court’s allegedly unsubstantiated inference that he moved among states for the purpose of
evading law enforcement. Shotsberger argues that a court may not infer evasion and
apply the enhancement based merely on the commission of fraud offenses in multiple
jurisdictions. The Government, conversely, contends that the District Court’s decision
was based on a factual finding supported by the record. Because we find that the District
Court’s characterization of its reasoning was at worst harmless error, we affirm.
I. Factual and Procedural History
From November 7, 2001 to March 9, 2002, Shotsberger, his co-defendant Dennis
Stokes, and an unindicted co-conspirator orchestrated a bank fraud scheme in Florida,
Virginia, New Jersey and Pennsylvania. The conspirators produced counterfeit payroll
checks and deposited them in savings and checking accounts at various banks in these
states. They then wrote checks to fictitious individuals, for whom they had false
identification cards, and cashed the checks at branch offices of the banks on which they
were drawn. Over the course of the scheme, the conspirators cashed or attempted to cash
107 checks at nine victim banks, amounting to a total loss of approximately $95,000.
In March 2002, Shotsberger, Stokes, and Shotsberger’s son, Nathaniel, were
arrested in Camden, New Jersey. Federal Bureau of Investigation (FBI) agents
interviewed all three on March 11, 2002. Nathaniel informed the agents that his father
and Stokes had been involved in counterfeit check schemes since 1993. He also stated
that Shotsberger and Stokes would conduct the bank fraud in a particular area until
“problems” developed, and then would move on to another area.
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Shotsberger pleaded guilty to one count of bank fraud, in violation of 18 U.S.C.
§ 1334. Prior to sentencing, Shotsberger’s probation officer recommended a two-level
enhancement under U.S.S.G. § 2B1.1(b)(8)(A), which applies to defendants who
“relocated, or participated in relocating, a fraudulent scheme to another jurisdiction to
evade law enforcement or regulatory officials.” The recommendation was based on
“defendant’s apparent relocation of a fraudulent scheme to various jurisdictions to evade
law enforcement” (emphasis added). Shotsberger objected to the enhancement, citing the
lack of evidence indicating that the defendants moved between states for the purpose of
evading law enforcement. 1
At the sentencing hearing, the prosecutor responded to Shotsberger’s objection by
arguing that one could make a “reasonable inference” that the defendants had moved
among states in order “to commit crimes and to avoid law enforcement.” The District
Court (per Judge Rambo) granted the enhancement. In so doing, it both purported to
make a factual finding and attributed significance to the Second Circuit’s unpublished
opinion in Warner v. United States, 21 Fed. Appx. 43, 2001 WL 1203066 (2nd Cir.
1
In an addendum to the presentence report, the probation officer noted Stokes’s and
Shotsberger’s “extensive criminal histories in Florida for similar misconduct, and a
history of supporting themselves with bad or counterfeit checks,” and reasoned that the
defendants “appear to have left Florida for places where they were unknown” (emphasis
added). The report also relied on Nathaniel Shotsberger’s indication, referred to above in
part, that “his father and Dennis Stokes had participated in counterfeit check schemes for
years, and would commit frauds in a particular area until ‘problems’ developed before
moving on.”
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2001). Judge Rambo explained:
I am going to follow the Warner case, plus the facts of this case clearly
show there is an intent to avoid law enforcement. Officials—I don’t
know what—I guess it was Mr. Shotsberger who said that problems
developed before moving on. Whether these problems were that the
banks caught on to them and closed the accounts, or by inference that
they were there long enough that they had to move to avoid
apprehension, I am going to affirm the presentence report in that
enhancement.
Shotsberger’s counsel noted that Nathaniel Shotsberger was not before the Court and was
thus unable “to testify as to what he meant by problems.” She continued, “It is our
position that the reason [the defendants] moved on is because the banks would close their
accounts and not because there was any evidence that they were running from the Police
or thought the Police were on to them.” Additionally, Shotsberger’s counsel clarified that
it was Nathaniel Shotsberger, rather than defendant Kerry Shotsberger, who had made the
statement regarding “problems.” The District Court acknowledged its error but did not
reconsider its decision. Shotsberger was sentenced to 41 months imprisonment, 3 years
supervised release, $45,046.71 in restitution, and a $100 special assessment. He appeals.
The United States District Court for the Middle District of Pennsylvania had
jurisdiction over the federal criminal prosecution under 18 U.S.C. § 3231. We have
appellate jurisdiction pursuant to 28 U.S.C. § 1291 and 18 U.S.C. § 3742.22
The appropriate standard of review is subject to dispute in this case. As noted below,
Shotsberger argues that the District Court applied the sentence enhancement based on an
inference. He suggests that we should therefore review the District Court’s ruling de
novo, citing Herskowitz v. Nutri/System, Inc., 857 F.2d 179, 183-84 (3rd Cir. 1988).
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II. Discussion
We recently decided the issue raised in this appeal in our not-precedential opinion
in United States v. Stokes, 75 Fed. Appx. 888, 2003 WL 22214164 (3d Cir. 2003). In
Stokes, the panel affirmed the sentence imposed by the District Court on Dennis Stokes,
Shotsberger’s co-defendant. The central issue on appeal in that case was whether the
defendants’ travel among states (in other words, the fact that they “bounced back and
forth”) foreclosed a finding that they had left each state to avoid law enforcement. We
held that a finding of evasion was permissible despite the defendants’ unconventional
travel patterns. In addition, we concluded that “the District Court’s finding that the co-
conspirators moved to evade law enforcement was supported by Nathaniel Shotsberger’s
statement as reported in the Pre-Sentence Report and was not clearly erroneous.” Id. at
892. This latter question—whether the District Court’s application of the sentence
enhancement was supported by the record—is the principal issue raised by Shotsberger on
this appeal.
He asserts that the District Court’s application of the enhancement was based on
an impermissible inference, citing the Court’s intention to rely on Warner. According to
Shotsberger, we should uphold the District Court’s decision only if it meets the standard
Because we conclude that the District Court applied the enhancement based at least in
part on its factual findings, the relevant standard of review is clear error. See United
States v. Cianscewski, 894 F.2d 74, 82 (3d Cir. 1990) (“[D]etermin[ing] whether the
commission of some particular offense involved more than minimal planning is
essentially factual, and therefore subject only to clearly erroneous review.”).
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set out in Edward J. Sweeney & Sons, Inc. v. Texaco, 637 F.3d 105, 116 (3d Cir. 1980).
Sweeney provides, “Inferred factual conclusions based on circumstantial evidence are
permitted only when, and to the extent that, human experience indicates a probability that
certain consequences can and do follow from the basic circumstantial facts.” Id.Because we find that Nathaniel Shotsberger’s statement was an alternative,
reasonable basis for the District Court’s decision, we need not decide here whether
Sweeney would otherwise operate to prohibit an inference on these facts.3 The most
appellant-friendly reading of the District Court’s statement is that it identified two bases
for applying the sentence enhancement: first, Nathaniel Shotsberger’s statement, and
secondly, an inference based on the interstate nature of the defendants’ crimes.4 Insofar
as the former, factual finding was a sufficient independent ground of decision, we need
not engage in discussion of the Sweeney standard.
Shotsberger’s counsel argued at the sentencing proceeding that the word
“problems” in Nathaniel Shotsberger’s statement was insufficiently defined to permit a
factual finding of evasion. She suggested, as already noted, that the defendants had
3
Similarly, we need not decide the appropriate standard of review for evaluating
allegedly inappropriate inferences.
4
The Government suggests that the District Court may not have intended to rely on
Warner at all with respect to its inference holding. Instead, it might have cited Warner, a
case which is remarkably on point, for its holdings that the enhancement applies to
relocation across state borders and in bank fraud cases—issues that Shotsberger raised in
the District Court.
6
instead “moved on . . . because the banks would close their accounts.” The District Court
did not clearly err in rejecting this position. As the Government noted in its Brief,
“[S]omeone with defendant’s extensive experience in the fraudulent uttering of checks
well knows . . . a bank’s closing of an account involved in fraudulent activity ordinarily
leads immediately to referral of the matter to law enforcement authorities for
investigation.” 5
The fact that the Court may have been mistaken as to the issuer of Nathaniel
Shotsberger’s statement at the time of ruling on the objection does not alter our
conclusion. The Court abided by its ruling despite being made aware of its factual error
immediately thereafter. Given that the Court reached an identical decision with respect to
defendant Stokes in the same proceeding—despite unequivocal knowledge that Stokes
did not make the statement—it seems clear that the identity, or lack thereof, of the
speaker and defendant was immaterial to the Court’s factual finding.
III. Conclusion
To the extent that the District Court erred in its identification of the speaker as
Nathaniel rather than Kerry Dean Shotsberger, that error was harmless. Because the
Court did not clearly err in finding that Nathaniel Shotsberger’s statement furnished
5
Additional evidence supported the District Court’s finding of intent to evade. For
example, the defendants staging area was located at a Sheraton Hotel in Wilmington,
Delaware—a state in which none of their crimes was committed—though a hotel in
Cherry Hill or Philadelphia would have been more convenient.
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evidence of the defendant’s intent to evade law enforcement, we affirm Kerry Dean
Shotsberger’s sentence.
TO THE CLERK:
Please file the foregoing Opinion.
By the Court,
/s/ Thomas L. Ambro, Circuit Judge
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