2008 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

1-8-2008

USA v. Harley

Precedential or Non-Precedential: Non-Precedential

Docket No. 05-5086

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Recommended Citation

"USA v. Harley" (2008). 2008 Decisions. Paper 1791.

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NOT PRECEDENTIAL

IN THE UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

______________

No: 05-5086

______________

UNITED STATES OF AMERICA

 v.

MICHAEL K. HARLEY,

 Appellant

_______________

On Appeal from the United States District Court

for the Middle District of Pennsylvania

(D.C. No. 05-cr-00192)

District Judge: Honorable Sylvia H. Rambo

_______________

Submitted Under Third Circuit LAR 34.1(a)

January 7, 2008

Before: FUENTES and JORDAN, Circuit Judges

and O’NEILL*, District Judge.

(Filed : January 8, 2008)

_______________

OPINION OF THE COURT

_______________

JORDAN, Circuit Judge.

_______________

 *Honorable Thomas N. O’Neill, Jr., District Court Judge for the Eastern District of

Pennsylvania, sitting by designation.
2

On this appeal from the sentence he received after being convicted of wire fraud,

Michael K. Harley contends that the District Court erred in its application of the United

States Sentencing Guidelines. Finding no error, we will affirm.

Background

Because we write solely for the parties’ benefit, we assume familiarity with the

case and discuss only those facts necessary to our decision. Harley served for several

years in the accounting department of Voith Siemens Hydro Power Generation, Inc.

(“Voith”). In 1998, following a promotion to General Accounting Manager, he was given

authority to initiate and approve wire transfers, to draw funds from Voith’s checking

account, and to reconcile monthly bank statements. Shortly before that promotion, and

with increasing frequency after it, Harley used his position to embezzle. He left his job

with Voith early in 2004. By August, the company had discovered accounting

irregularities and had begun to investigate Harley’s transactions over the years. The

investigation revealed that Harley had stolen more than $5.3 million from the company.

On June 30, 2005, Harley waived indictment and pled guilty to an information

charging him with committing wire fraud in violation of 18 U.S.C. § 1343. He was

sentenced to sixty-three months imprisonment, three years of supervised release, no fine,

and restitution of nearly $3 million.
The District Court had jurisdiction over this case pursuant to 18 U.S.C. § 3231. 

1

We have jurisdiction under both 28 U.S.C. § 1291 and 18 U.S.C. § 3742(a). We look for

clear error when reviewing the District Court’s factual findings related to sentencing. 

United States v. Grier, 475 F.3d 556, 570 (3d Cir. 2007) (en banc). Our review of the

District Court’s interpretation of the Sentencing Guidelines is plenary. Id. “We review

the District Court's application of the Guidelines to facts for abuse of discretion.” United

States v. Tupone, 442 F.3d 145, 149 (3d Cir. 2006). And we also review for abuse of

discretion the determination of the appropriate sentence; we will not disturb a sentence

that can be characterized as “reasonable.” See Gall v. United States, 2007 WL 4292116,

at *6 (U.S., Dec. 10, 2007) (“[A]ppellate review of sentencing decisions is limited to

determining whether they are ‘reasonable.’ Our explanation of ‘reasonableness’ review ...

made it ... clear that the familiar abuse-of-discretion standard of review now applies ... .”).

3

Discussion

Harley makes four arguments on appeal. First, he asserts that the District Court’s 1

decision to apply a two-point increase to his offense level for use of a sophisticated

scheme is error. The only basis Harley provides for that assertion is that he was only

using standard accounting tools and techniques. We think he gives himself and other

accountants too little credit. Accountants have the benefit of specialized knowledge, and

the embezzlement scheme Harley employed required specialized, sophisticated

knowledge to engineer and execute. It involved not only the theft of the money but the

continuing need to conceal the thefts. Cf. U.S.S.G., § 2B1.1, Application Note 8(B)

(“Conduct such as hiding assets or transactions, or both, through the use of fictitious

entities, corporate shells, or offshore financial accounts ... ordinarily indicates

sophisticated means.”). That the scheme was ultimately detected makes it no less

sophisticated and no less worthy of the dubious honor of a two-point increase in the
4

offense level. The District Court’s conclusion to that effect was not an abuse of

discretion.

Second, Harley argues that the District Court erred in applying another two-point

offense level increase based on his having abused a position of trust. In particular, he

contends that the abuse-of-trust aspect of his crime, to the extent there is any such aspect,

is already accounted for in the Guideline setting his base offense level. Given the record,

this argument is particularly strained. The specific Guidelines provision used to calculate

the base offense level was § 2B1.1, which applies to all manner of theft, fraud, and deceit,

including wire fraud, the offense for which Harley was convicted. It is simply not the

case that all fraud involves a breach of trust, though this fraud most certainly did. Harley

gained his employer’s trust and, having attained the power to initiate funds transfers on

his own, he abused that trust to line his pockets. The District Court’s decision to impose

the two-point abuse-of-trust enhancement called for by Guideline § 3B1.3 is fully

justified. Cf. U.S.S.G., § 3B1.3, Application Note 1 (“This adjustment, for example,

applies in the case of ... a bank executive's fraudulent loan scheme ... .”).

Harley’s final two arguments are that the District Court erred in refusing to grant

him a downward departure for exceptional acceptance of responsibility and that his

sentence of sixty-three months incarceration is unreasonable under 18 U.S.C. § 3553(a). 

As to the former argument, the District Court’s discretionary decision is not subject to

review. United States v. Cooper, 437 F.3d 324, 333 (3d Cir. 2006) (declining to review a
5

district court's decision to deny departure). As to the latter argument, we conclude that,

particularly under the broad discretion afforded to district courts in sentencing, the

sentence imposed was reasonable. See Gall, 2007 WL 4292116, at *8 (“The sentencing

judge is in a superior position [to an appellate court] to find facts and judge their import

under § 3553(a) in the individual case.” (internal quotation marks and citation omitted)).

Conclusion

Accordingly, we will affirm the judgment of sentence.