2009 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

3-13-2009

USA v. Dullum

Precedential or Non-Precedential: Precedential

Docket No. 07-4502

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PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

 

No. 07-4502

 

UNITED STATES OF AMERICA

v.

JARED DULLUM,

Appellant

 

Appeal from the United States District Court

for the District of New Jersey

(D.C. Criminal Action No. 06-cr-00676)

District Judge: Honorable Susan D. Wigenton

 

Submitted Under Third Circuit LAR 34.1(a)

January 30, 2009

Before: SCIRICA, Chief Judge, AMBRO, 

and SMITH, Circuit Judges

(Filed: March 13, 2009)
 The District Court had jurisdiction under 18 U.S.C. § 3231. 1

We have appellate jurisdiction under 28 U.S.C. § 1291 and

2

Michael Chazen, Esquire

4400 Route 9 South, Suite 1000

Freehold, NJ 07728-0000

Counsel for Appellant

Christopher J. Christie

 United States Attorney

George S. Leone

 Chief, Appeals Division

Steven G. Sanders

 Assistant U.S. Attorney

Office of the United States Attorney

970 Broad Street, Room 700

Newark, NJ 07102-0000

Counsel for Appellee

 

OPINION OF THE COURT

 

AMBRO, Circuit Judge

Jared Dullum appeals his sentence of 28 months’

imprisonment. He pled guilty to mail fraud, in violation of 1
18 U.S.C. § 3742(a).

3

18 U.S.C. § 1341, and bank fraud, in violation of 18 U.S.C.

§ 1344. Dullum argues that his sentence was procedurally

unreasonable, asserting that the District Court erred in

mis applying f ive sentencing adjustm ents: fou r

enhancements—for a loss amount greater than $30,000,

vulnerable victim, abuse of trust, and obstruction of justice; and

one deduction for acceptance of responsibility. For the

following reasons, we affirm the sentence of the District Court.

I. Background

Dullum was a Special Agent with the U.S. Secret Service

and an active member of his New Jersey church. Within his

church, he served in a senior leadership position, teaching

classes and counseling fellow members who were struggling

with alcohol and substance abuse. 

Two members Dullum worked with in this capacity were

Julie DeSacia and Nick Cetrulo, both recovering alcoholics and

drug addicts whom Dullum characterized as “a little slow.”

DeSacia and Cetrulo also struggled financially. DeSacia

received a monthly payment from the Plumber’s Union Pension

Fund and Cetrulo received disability benefits. Dullum also

offered to serve as the financial advisor to both persons. In June

2004, DeSacia became very ill, suffering from physical and

mental effects of cirrhosis of the liver. According to Dullum,
 At the sentencing hearing, a Secret Service agent involved 2

in the investigation who had interviewed Cetrulo explained that,

although Dullum paid Cetrulo approximately $8,000, the latter

“gave [Dullum] back [$]8,500” based on a list Dullum created

purportedly to repay him for “toys” and other things. Thus, the

overall loss to Cetrulo was approximately $500. According to

4

DeSacia told him that she wanted Cetrulo to be provided for

upon her death. Dullum prepared a will and associated trust, but

DeSacia never signed the documents before she died. 

A. The Forged Will

After DeSacia died intestate in January 2005, Dullum

forged DeSacia’s signature on the will and trust, backdating

both documents to 2004. The will purported to name Dullum

the executor of the estate and Cetrulo the primary beneficiary.

Representing himself as executor, Dullum got the Pension Fund

to send him a check for $29,352.76, which was DeSacia’s lumpsum payout. He deposited the check into an estate bank account

he had opened, and then transferred the proceeds to his personal

account.

Dullum did not inform DeSacia’s family that he was

acting as executor. He told Cetrulo that the will named Cetrulo

as the estate’s primary beneficiary. Yet Dullum only gave

Cetrulo an amount less than $8,000, which he represented as the

full proceeds of the estate. Dullum later admitted that he paid 2
the agent, Dullum could not produce or replicate the list and it

“did not seem like it was going to add up to [$]8,500.”

5

Cetrulo to stop him from “pressuring me for my help” and

asking questions about the will. He also told the estate’s

creditors that the estate had little or no money, so it could not

pay most of its outstanding debts.

The Secret Service began an internal investigation

concerning these issues in July 2005, after Dullum’s bank

communicated with the agency to report suspicious activity

involving his accounts. When agents questioned Dullum about

the bank transfer from the estate’s account to his personal

account, he claimed that DeSacia had rented his beach house.

In support of this contention, he produced a fabricated $20,000

promissory note made out to him and purportedly executed by

DeSacia.

B. The Bank Fraud Scheme

Dullum owned rental property at the New Jersey shore.

In May 2005, Tony Woods emailed Dullum and expressed

interest in renting the property. Woods sent Dullum a rent check

for $10,500.87 in the name of Reverend Frank Mirocco from the

National Bank of Coxsackie. Dullum suspected that this check

was fraudulent because he had personal and professional

experience with this type of fraud. Yet he still deposited the

check into the estate bank account.
6

After depositing the check, Dullum emailed Woods and

falsely claimed that he had not received the rent check. He

asked Woods to send a new check made out to DeSacia, whom

he claimed was his wife. Woods sent him another check for

$10,000.35 in the name of Reverend Mirocco, which Dullum

also deposited in the estate account. After both checks cleared,

he immediately transferred the proceeds to his personal bank

account.

The drawee bank returned both checks to Dullum’s bank

as fraudulent. His bank froze his accounts and filed a

Suspicious Activity Report with the Secret Service. Dullum

repaid the bank the amounts for the two checks, though only

after the bank had frozen his accounts and the Secret Service

had interviewed him on three occasions as part of its

investigation. The third interview occurred just two days before

he wrote a check to the bank replacing the funds.

C. Indictment and Sentencing

In August 2006, a federal grand jury indicted Dullum on

one count of mail fraud and one count of bank fraud. He pled

guilty to both counts. The Presentence Report prepared by the

Probation Office (the “PSR”) calculated Dullum’s total federal

Sentencing Guidelines offense level under the U.S. Sentencing

Commission Guidelines Manual (hereinafter “Guidelines” or

“U.S.S.G.”) as follows:
7

Base offense level 7

Loss of $39,254.11 +6

Vulnerable Victim +2

Abuse of Trust +2

Obstruction of Justice +2

Acceptance of Responsibility -3

—

Total Offense Level 16

The PSR set Dullum’s advisory Guidelines range at 21 to

27 months’ imprisonment.

At the sentencing hearing, Dullum objected to all four

Guidelines enhancements, arguing that this total offense level

should be 8 (7 plus, as noted below, 4 for the loss less 3 for

acceptance of responsibility). The District Court overruled his

objections. The Court adopted the PSR except for the

recommended three-level acceptance-of-responsibility

deduction. In accord with the Government’s position, it found

that Dullum’s post-plea statements failed to show that he truly

accepted responsibility. It awarded him only a one-level

reduction for avoiding a trial and pleading guilty. Thus, his total

offense level was 18, with an advisory Guidelines range of 27 to

33 months’ imprisonment. The Court discussed the 18 U.S.C.

§ 3553(a) factors and then sentenced Dullum to 28 months’

imprisonment and 3 years’ supervised release, along with

$29,253.76 in restitution and a $40,000 fine.
 As we noted in the background section, Dullum cashed two 3

counterfeit checks from Woods for approximately $10,000 each.

8

II. Analysis 

A. Loss Amount Enhancement

We review the District Court’s factual findings for clear

error. United States v. Grier, 475 F.3d 556, 561 (3d Cir. 2007)

(en banc). This applies to the loss calculations Dullum

complains of under Guidelines § 2B1.1. See United States v.

Ali, 508 F.3d 136, 143 (3d Cir. 2007) (citing Grier, 475 F.3d at

570). Section 2B1.1 is the Guidelines section applicable to

Dullum’s fraud offenses. U.S.S.G. § 2B1.1 (“Larceny,

Embezzlement, and Other Forms of Theft . . . .”). This section

sets his base offense level at 7, which he does not dispute.

Subsection 2B1.1(b)(1) lists enhancements to the base offense

level that depend on the amount of loss. 

Dullum argues that the District Court erred in applying a

six-level enhancement under Guidelines § 2B1.1(b)(1)(D) for a

loss amount greater than $30,000 because his bank fraud scheme

caused no loss. If the loss amounts associated with the

counterfeit check were deducted from the District Court’s total

loss finding of approximately $39,000, then the remaining loss

for purposes of applying the enhancement would have included

only the proceeds of the Pension Fund, or approximately

$29,000. Thus, he contends that he should have been subject 3
At the sentencing hearing, the District Court referred only to one

check for purposes of determining the loss enhancement. It

stated: “[T]here were two checks for $10,000. And based on the

plea agreement, and based on the plea, it’s conceded we’re

talking about one check for $10,000.”

9

to a four-level enhancement under Guidelines § 2B1.1(b)(1)(C),

which represents a loss amount of more than $10,000 but less

than $30,000. 

The commentary to the enhancement portion of this

Guidelines section requires district courts to use “the greater of

actual loss or intended loss” for fraud offenses. U.S.S.G.

§ 2B1.1 App. N. 3(A). The “government’s burden is to prove

intended, not possible, loss if it seeks to increase the guideline

levels faced by the defendant under § 2F1.1.” United States v.

Geevers, 226 F.3d 186, 192 (3d Cir. 2000) (citing United States

v. Yeaman, 194 F.3d 442, 460 (3d Cir. 1999)) (discussing a

Guidelines section that was deleted and consolidated with

§ 2B1.1 in 2001). We have held that, in counterfeit check cases,

a “district court does not . . . commit error when, in the absence

of sufficient evidence to the contrary, it fixes the [G]uidelines

range based upon a presumption that the defendant intended to

defraud the banks of the full face amount of the worthless

checks.” Id. at 188. 

The fraudulent check amount that Dullum argues should

not be included in the total loss for purposes of determining his
10

enhancement was the $10,000 rental check he cashed, which

served as the basis for the bank fraud count. He admitted,

however, that he intended the money to “help out some of [his]

financial burdens,” including a withdrawal of $7,000 to pay

back his home equity line and his intention to use the money to

cover any outstanding payments on the rental property if

necessary. He only repaid to the bank the fraudulent check

amount after a Secret Service investigation had begun and his

accounts were frozen. Dullum did not provide any evidence to

the contrary at sentencing. See id. at 194 (holding that a

sentencing judge may consider the face value of deposited

checks as “sufficient evidence that it was the intended loss,”

although it cannot “mechanically” be assumed, and the

defendant can then “produce evidence of his or her own in an

attempt to convince the court that another figure was intended”);

United States v. Strozier, 981 F.2d 281, 285 (7th Cir. 1992)

(“No evidence presented at the sentencing hearing supported

counsel’s appraisal of his client’s motivations, and we refuse to

overturn the district court’s sentence on the basis of speculation

in the valley of dreams.”). This chain of events shows that the

District Court did not err in finding that Dullum intended to

cause a loss for the full amount of the check. 

Dullum also argues that he is entitled to credit for

repayment of the loss amount based on Application Note 3(E)

to Guidelines § 2B1.1. This Application Note states, however,

that a defendant must make his repayment before the crime is

uncovered. U.S.S.G. § 2B1.1 App. N. 3(E)(i). “The time of
11

detection of the offense is the earlier of (I) the time the offense

was discovered by a victim or government agency; or (II) the

time the defendant knew or reasonably should have known that

the offense was detected or about to be detected by a victim or

government agency.” Id. Based on Dullum’s own admissions,

he repaid the money only after the bank detected the fraud,

notified him regarding the fraudulent checks, froze his accounts,

and the Secret Service began its investigation. Thus, the District

Court did not err in finding that this Application Note does not

apply to Dullum’s situation. 

Dullum makes a related argument under subpart (ii) of

the same Application Note. Id. § 2B1.1 App. N. 3(E)(ii) (prior

to the 2006 Guidelines, listed as App. N. 2(E)(ii)). It concerns

“the determination of loss under subsection (b)(1)” and applies

subpart (E)(ii) to “case[s] involving collateral pledged or

otherwise provided by the defendant.” Id. Dullum contends that

the loss associated with the fraudulent check should be reduced

to zero because he had other funds in his bank accounts to offset

the bad check. There is no case law on this issue in our Circuit.

Based on a common sense reading of the Application Note’s

straightforward language, however, we believe the correct

interpretation limits its application to situations involving a

traditional notion of collateral, such as fraudulently inducing a

bank to issue a secured loan. Dullum’s fraud is more akin to

theft than the additional risk of loss that he would have incurred

if he had pledged his own collateral to secure a loan. We know

of no court applying the Note to a circumstance similar to
12

Dullum’s. Indeed, the opposite is true. See United States v.

Swanson, 360 F.3d 1155, 1169 (10th Cir. 2004) (rejecting

defendant’s claim that “any overdrafts on his accounts were

secured by collateral he had previously pledged to the bank on

various loans”); see also United States v. Goss, 549 F.3d 1013,

1017–18 (5th Cir. 2008) (discussing a credit for loan collateral

when calculating loss). 

Dullum’s bank accounts were not formally pledged as

collateral. Further, he did not provide the Court with any

evidence beyond his in-court statements that, based on his

account agreement, the bank could have taken funds from his

other bank accounts to recover the amount lost on the fraudulent

check. Nor did he provide any evidence that the other funds

unrelated to his mail fraud offense were sufficient to cover any

portion of the check amount. In this context, we conclude that

the District Court’s application of § 2B1.1(b)(1)(D) for a loss

amount greater than $30,000, instructing a six-level

enhancement, was appropriate.

B. Vulnerable Victim Enhancement

Dullum next argues that DeSacia and Cetrulo were not

vulnerable and were not direct victims, such that the District

Court erred in applying a two-level enhancement under

Guidelines § 3A1.1(b)(1). The District Court did not err in

considering Dullum’s actions towards DeSacia and Cetrulo prior

to DeSacia’s death relevant conduct under Guidelines § 1B1.3
 Cetrulo may have been a vulnerable victim as well, but we 4

need not reach that question because we have determined that

the District Court did not err in finding that DeSacia was a

vulnerable victim.

13

calling for the enhancement. See United States v. Monostra, 125

F.3d 183, 189 (3d Cir. 1997) (indicating that this enhancement

is not limited “to situations in which the vulnerable person was

the [direct] victim of the offense of conviction[, but that] courts

may look to all the conduct underlying an offense, using § 1B1.3

[relevant conduct] as a guide”); see also United States v. Zats,

298 F.3d 182, 184–85 (3d Cir. 2002). Based on the evidence

presented to the Court, it found that DeSacia and Cetrulo were

vulnerable and that Dullum used their vulnerabilities (including

their history of substance abuse, that they were “a little slow,”

and DeSacia’s suffering from physical and mental effects of

cirrhosis before her death) to act as their financial advisor and

gain access to the financial information needed to follow

through on the fraud. See id. at 190 (stating that for the

enhancement to apply, there must be a showing that the victim’s

“vulnerability or susceptibility facilitated the defendant’s crime

in some manner”). There is no question that these

circumstances qualify DeSacia as “vulnerable” (even if the

direct victim was her estate), and there need only be one

vulnerable victim for the two-level enhancement to apply. See 4

U.S.S.G. § 3A1.1(b)(1).
14

C. Abuse of Trust Enhancement

The District Court found Dullum “abused a position of

public and private trust” toward DeSacia and Cetrulo because he

was a Secret Service agent and a trusted advisor at church. See

U.S.S.G. § 3B1.3. The two-level enhancement under the abuse

of trust Guidelines section is only applicable to defendants who

use their “position of public or private trust . . . in a manner that

significantly facilitate[s] the commission or concealment of the

offense.” Id. Dullum argues the Court’s findings were not

sufficient for this enhancement. He contends that “[w]hatever

relationship [he] had with DeSacia or Cetrulo, it was not the

type of case contemplated by this particular adjustment.”

Appellant’s Br. 13. In support, he cites to United States v.

Pardo, 25 F.3d 1187 (3d Cir. 1994), where we discerned no

position of trust when the defendant’s position as a long-time

friend of the bank manager facilitated his defrauding the bank.

As whether “defendant occupied a position of trust is a legal

question, we review this de novo. But we review the District

Court’s finding that the defendant abused a position of trust for

clear error, as this is a factual question.” United States v. Hart,

273 F.3d 363, 376 (3d Cir. 2001) (internal citations omitted)

(emphasis added) (determining that certain stockbrokers were in

positions of trust). 

“Neither § 3B1.3 nor its applicable Commentary clearly

defines what is meant by a position of trust.” Id. at 375 (internal

quotations omitted) (quoting United States v. Iannone, 184 F.3d
During an interview with Secret Service agents, Cetrulo 5

indicated that, in addition to Dullum’s position in the church, he

further trusted Dullum because he was a Secret Service agent.

15

214, 222 (3d Cir. 1999)). Pardo set out a three-part test for

determining whether a position is one of trust: “(1) whether the

position allows the defendant to commit a difficult-to-detect

wrong; (2) the degree of authority which the position vests in

defendant vis-a-vis the object of the wrongful act; and (3)

whether there has been reliance on the integrity of the person

occupying the position.” 25 F.3d at 1192. We noted that these

factors should be considered in light of the guiding rationale of

the section: “to punish ‘insiders’ who abuse their positions

rather than those who take advantage of an available

opportunity.” Id. We recognized that the Application Note to

this section refers to these positions in a professional capacity,

but stated that “we are unwilling to draw a bright line limiting

the abuse of trust increase to the employment relationship.” Id.

at 1190–91 (citing cases from other courts where a mother,

babysitter, and stepfather, respectively, were found to be in

positions of trust).

Through Dullum’s involvement with his church, he

formally acted as a teacher, advisor, and counselor to DeSacia

and Cetrulo. He spent substantial time with DeSacia and 5

Cetrulo over approximately three years as a trusted church figure

of authority, counseling them with respect to their substance and

alcohol abuse, and as their financial advisor. In this capacity,
 Because we have determined that Dullum abused his 6

position of trust in a private capacity, we need not reach whether

he also abused that position in a public capacity. 

 Dullum’s subsidiary arguments—that his statements were 7

not under oath and that he was not charged with violating 18

U.S.C. § 1001—are clearly wrong.

16

Dullum had the ability and “‘freedom to commit a difficult-todetect wrong’” in forging DeSacia’s will and acting as her

executor. Id. at 1191–92 (quoting United States v. Lieberman,

971 F.2d 989, 993 (3d Cir. 1992)). He was not simply “tak[ing]

advantage of an available opportunity.” Id. at 1192. Regional

branches of Dullum’s church are led by select congregants.

Undoubtedly, in Dullum’s senior position, DeSacia and Cetrulo

relied on his integrity. He was certainly more than the “friend”

in Pardo. See id. Thus, we hold that Dullum’s position was a

private position of trust. Further, the Court did not err in finding

that Dullum abused that position to apply the two-level

enhancement under § 3B1.3. See U.S.S.G. § 3B1.3 (requiring 6

that a defendant’s abuse of the position of trust “significantly

facilitated the commission or concealment of the offense”).

D. Obstruction-of-Justice Enhancement

Dullum objects to the two-level enhancement for

obstruction of justice under Guidelines § 3C1.1. This argument

has no traction. During the Secret Service’s investigation, 7
17

agents interviewed Dullum three times and he provided five

sworn statements under oath attesting to the accuracy of the

information he provided. Four of those statements contained

lies about the counterfeit checks and how he came to serve as

executor of DeSacia’s estate. He also provided a forged

promissory note to agents during his third interview and failed

a polygraph examination. The District Court relied on this

information in applying the enhancement. 

Dullum thus falls squarely within § 3C1.1, which states

in pertinent part:

If (A) the defendant willfully obstructed or

impeded, or attempted to obstruct or impede, the

administration of justice with respect to

the . . . prosecution . . . of the instant offense of

conviction, and (B) the obstructive conduct

related to (i) the defendant’s offense of conviction

and any relevant conduct; . . . increase the offense

level by 2 levels.

Application Note 4, titled “Examples of Covered Conduct,” sets

out “a non-exhaustive list of examples of the types of conduct

to which this enhancement applies.” The examples specifically

attributable to Dullum’s actions include “producing or

attempting to produce a false, altered, or counterfeit document

or record during an official investigation,” and “providing a

materially false statement to a law enforcement officer that
Section 3E1.1 is set up such that a one-level deduction for 8

avoiding trial under subsection (b) can only be applied if the

defendant qualifies for a two-level deduction for “clearly

demonstrat[ing] acceptance of responsibility” under subsection

(a). Dullum argues that the Court “necessarily had to find him

eligible for the reduction” under subsection (a). We doubt this

given its strong statements against Dullum’s full acceptance of

18

significantly obstructed or impeded the official investigation.”

U.S.S.G. § 3C1.1 App. N. 4(c), (g). 

In an attempt to cover up his wrongdoing, Dullum

manipulated the truth throughout the investigation by providing

several false statements and documents to Secret Service agents.

Only after repeated interviews did he more truthfully discuss his

actions in his fifth and final sworn statement. Thus, we

conclude that this enhancement was hardly an error.

E. Acceptance-of-Responsibility Deduction

Dullum’s final argument is that he should have received

the three-level deduction for acceptance of responsibility

recommended in the PSR. See U.S.S.G. § 3E1.1. The District

Court only reduced his offense level by one because he pled

guilty and avoided going to trial. It refused to grant the

additional two levels because it found that Dullum did not

“clearly demonstrate[] acceptance of responsibility for his

offense.” Id.

8
responsibility at the sentencing hearing. Thus, Dullum may not

have been eligible for the one-level deduction the Court granted.

While the Government points this out, Gov’t Resp. Br. at 41, it

simply argues that “Dullum, therefore, cannot claim to have

been aggrieved by the District Court’s error.” Id. at 42. We too

go no further.

19

At sentencing, the Court extensively discussed its disdain

for Dullum’s conduct. It found that he refused to take full

responsibility for his behavior based on his pre-sentencing letter

to the Probation Office and his statements before the Court. He

reiterated that he was just trying to help people and that he

“believed he was acting in the best interest of Cetrulo and

carrying out DeSacia’s wishes.” In support of its ruling, the

Court stated that the acceptance of responsibility deduction was

not a matter of “right.” See id. App. N. 3 (“[E]vidence of

acceptance of responsibility . . . . may be outweighed by conduct

of the defendant that is inconsistent with such acceptance of

responsibility. A defendant who enters a guilty plea is not

entitled to an adjustment under this section as a matter of

right.”); see also United States v. O’Neal, 969 F.2d 512, 515

(7th Cir. 1992) (affirming denial of acceptance-of-responsibility

deduction because “neither the defendant’s letter to the

probation officer purporting to accept responsibility, nor his

written statement purporting to show acceptance of

responsibility, recognized that he was at fault and responsible

for the kidnapping and resultant batteries. If anything, his

statement sought to blame the victim for the crime.”). 
 Dullum alternatively claims that the District Court 9

mechanically denied his acceptance-of-responsibility deduction

because of the obstruction-of-justice enhancement. To the

contrary, the Court did not even mention this Application Note

as the basis for its ruling at sentencing. 

20

Application Notes 4 and 5 apply to Dullum as well. Note

4 states that “[c]onduct resulting in an enhancement under

§ 3C1.1 (Obstructing or Impeding the Administration of Justice)

ordinarily indicates that the defendant has not accepted

responsibility for his criminal conduct.” U.S.S.G. § 3E1.1 App. 9

N. 4. (As noted, Dullum received a two-level enhancement at

sentencing under § 3C1.1.) Note 5 states that “[t]he sentencing

judge is in a unique position to evaluate a defendant’s

acceptance of responsibility. For this reason, the determination

of the sentencing judge is entitled to great deference on review.”

Id. App. N. 5; see also United States v. Stewart, 452 F.3d 266,

273 (3d Cir. 2006). In this context, the Court was well within its

discretion to vary from the PSR recommendation in granting a

one-level deduction. 

* * * * *

We thus affirm the sentence imposed by the District

Court.