Court Opinion

ID: 2976293
Source: CourtListenerOpinion
Date Created: 2015-09-22 17:49:34.103252+00
Date Added: 2024-06-11T11:44:00.919269
License: Public Domain

RECOMMENDED FOR FULL-TEXT PUBLICATION
                                Pursuant to Sixth Circuit Rule 206
                                      File Name: 08a0102p.06

                    UNITED STATES COURT OF APPEALS
                                  FOR THE SIXTH CIRCUIT
                                    _________________

                                                   X
                               Plaintiff-Appellee, -
 UNITED STATES OF AMERICA,
                                                    -
                                                    -
                                                    -
                                                        No. 07-5733
         v.
                                                    ,
                                                     >
 TERRY ANN TATUM,                                   -
                            Defendant-Appellant. -
                                                   N
                      Appeal from the United States District Court
                   for the Western District of Tennessee at Jackson.
                  No. 05-10066—James D. Todd, Chief District Judge.
                                   Argued: February 8, 2008
                              Decided and Filed: March 5, 2008
                  Before: KENNEDY, MARTIN, and COLE, Circuit Judges.
                                     _________________
                                          COUNSEL
ARGUED: M. Dianne Smothers, OFFICE OF THE FEDERAL PUBLIC DEFENDER, Memphis,
Tennessee, for Appellant. Victor L. Ivy, ASSISTANT UNITED STATES ATTORNEY, Jackson,
Tennessee, for Appellee. ON BRIEF: M. Dianne Smothers, OFFICE OF THE FEDERAL
PUBLIC DEFENDER, Memphis, Tennessee, for Appellant. Victor L. Ivy, ASSISTANT UNITED
STATES ATTORNEY, Jackson, Tennessee, for Appellee.
                                     _________________
                                         OPINION
                                     _________________
        R. GUY COLE, JR., Circuit Judge. Defendant-Appellant Terry Ann Tatum pleaded guilty
to ten counts of bank fraud in violation of 18 U.S.C. § 1344. She appeals the district court’s
application of the United States Sentencing Guideline § 3B1.3 sentencing enhancement. Because
this Court finds that § 3B1.3 was erroneously applied, we VACATE the sentence and REMAND
for resentencing.
                                      I. BACKGROUND
        On August 15, 2005, Tatum was indicted on ten counts of bank fraud in violation of
18 U.S.C. § 1344. Tatum accomplished the bank fraud by abusing her position as office manager
at MaxxGuard, a family-run business that supplied security guards to businesses. When Tatum
started her employment at MaxxGuard in 1993, she was hired as the office secretary. Over time,
she worked closely with the head of the company, Frank Lax, Sr., and eventually her duties became

                                                1
No. 07-5733           United States v. Tatum                                                  Page 2

more similar to those of an office manager than of a secretary. These duties included standard
clerical work, as well as whatever else she was asked by Lax, Sr. to do, such as dispatching
scheduled guards to specific locations. Following Frank Lax, Sr.’s death, Frank Lax, Jr. became
Tatum’s supervisor, and he terminated her employment in January, 2005 for insubordination.
       While office manager, Tatum had no authority to sign company checks. However, her job
responsibilities did include preparing checks to cover outstanding obligations of the company that
would be presented for signing to Frank Lax, Sr. and later Frank Lax, Jr. When printing the checks,
she had been instructed by MaxxGuard’s accountant to record the details of the check in one file,
to maintain copies of the bank statements as they arrived, and to forward copies of the bank
statements but not the cancelled checks to the accountant.
         To accomplish her fraud, Tatum simply printed MaxxGuard checks payable in her name,
often forging the name of Lax, Sr., and deposited the checks into her personal bank accounts. She
maintained copies of the checks, but created fictitious payees on the printed copies that she had been
instructed to make. Also, as instructed by the accountant, Tatum maintained the bank statements
in a file, at first destroying copies of the returned checks that would have shown her own name as
payee upon close inspection, but later filing them as well. These copies of returned checks were not
inspected by the accountant because the type was too small for him to read, and thus he did not
discover that MaxxGuard was making a large number of payments to Tatum. In this way, Tatum
was able to defraud her employer by creating no fewer than 543 fraudulent checks. When
confronted with the scheme, Tatum admitted her involvement and maintained that she had since
spent all of the embezzled funds.
         Tatum entered into a plea agreement with the Government, in which she agreed to plead
guilty to ten counts of bank fraud in violation of 18 U.S.C. § 1344 and the Government agreed to
dismiss the other counts; she entered her guilty plea on January 11, 2006. At the plea hearing, the
district court stated the dollar amount of the fraud, $190,747.13, and informed Tatum that the crime
carried “with it a maximum penalty of 30 years, a fine of not more than a million dollars, or both,
not more than five years of supervised release, and a mandatory special assessment of $100.” The
district court accepted Tatum’s guilty plea and informed Tatum that the sentence would be
determined at a later date and would depend on the probation officer’s report, which would include
a range of sentences that the court would use as a factor in deciding Tatum’s sentence.
        The Probation Officer submitted his Presentence Investigation Report (“PSR”) on
February 27, 2006. The PSR detailed the fraud and addressed Tatum’s education and skill level.
The PSR included a finding that Tatum received formal education through the tenth grade and had
learned various clerical and computer skills through on-the-job training. The PSR also stated that
Tatum had worked for numerous employers, including several convenience stores, but that most of
these jobs lasted only a few months. The PSR recommended a three-level reduction for acceptance
of responsibility, but also a two-level enhancement under § 3B1.3 for abusing a position of private
trust. These adjustments resulted in a Guidelines range of 21 to 27 months. The PSR also
recommended an order of restitution pursuant to 18 U.S.C. § 3663A in the agreed upon amount of
$190,747.13.
        Tatum timely filed her objection to the PSR’s recommended application of the § 3B1.3
enhancement, arguing that she had not abused a position of trust and that she had no special skills,
as she had only finished the tenth grade. Tatum argued that if the enhancement did not apply, the
resulting Gudelines range would be 15 to 21 months. Tatum additionally argued that given the
several months she had already served, a sentence of probation would be appropriate for the
remainder of her sentence.
No. 07-5733           United States v. Tatum                                                      Page 3

         The district court considered the PSR and Tatum’s objections at the sentencing hearing held
on June 5, 2007. The court ultimately found that the enhancement was proper and sentenced Tatum
at the bottom of the recommended Guidelines range: 21 months with credit for 7 months served, for
a total of 14 months. The court explained its decision to apply the enhancement:
              It’s my judgment that even though Ms. Tatum didn’t have any special
       education, she did, in fact, have special skills. From her years of work as a
       bookkeeper or an office manager, she developed special skills related to the check
       procedure.
       ....
               Based upon the way this office ran, as I understand it, Ms. Tatum was the
       only person who could have accomplished such a scheme. And it appears to the
       court to be, clearly, an abuse of a position of private trust. She was given the trust
       of Mr. Lax, Sr., and ultimately Mr. Lax, Jr., to run the office, to write the checks - -
       to generate the checks, and to keep up with the accounting end of the checks; and she
       abused that position of trust.
              In addition, she admitted to forging some of these checks, then destroying the
       checks when they were returned by the bank.
              This clearly was an abuse of a position of trust, so the probation officer has
       appropriately enhanced the base offense level by two levels.
       The defendant appeals her sentence, contesting the application of the § 3B1.3 enhancement.
                                          II. ANALYSIS
A. Standard of Review
         When determining whether the § 3B1.3 enhancement has been properly applied, this Court
“review[s] a district court’s legal conclusions regarding the Sentencing Guidelines de novo and a
district court’s factual findings in applying the Sentencing Guidelines for clear error. We apply de
novo review to the district court’s interpretation of the Guidelines.” United States v. Kaminski, 501
F.3d 655, 665 (6th Cir. 2007) (internal quotations omitted) (citing United States v. Galvan, 453 F.3d
738, 739 (6th Cir. 2006)). Thus, de novo review applies to the district court’s intepretation of the
Guidelines’ definition of “position of trust” and “special skills.” See id. at 665; see also United
States v. Godman, 223 F.3d 320, 322 (6th Cir. 2000).
B. Definition of the Enhancement
       Section 3B1.3 of the United States Sentencing Guidelines, titled “Abuse of Position of Trust
or Use of Special Skill,” states in full:
       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 by 2 levels. This adjustment may not be employed if an abuse of
       trust or skill is included in the base offense level or specific offense characteristic.
       If this adjustment is based upon an abuse of a position of trust, it may be employed
       in addition to an adjustment under § 3B1.1 (Aggravating Role); if this adjustment is
       based solely on the use of a special skill, it may not be employed in addition to an
       adjustment under § 3B1.1 (Aggravating Role).
No. 07-5733           United States v. Tatum                                                    Page 4

U.S.S.G. § 3B1.3 (2005) (emphasis in original).
       The relevant explanation for the definition of “public or private trust” is found in the
Guidelines Manual at Note 1:
       Definition of “Public or Private Trust”. — “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. For this adjustment to apply, the position of public or
       private trust must have contributed in some significant way to facilitating the
       commission or concealment of the offense (e.g., by making the detection of the
       offense or the defendant’s responsibility for the offense more difficult). This
       adjustment, for example, applies in the case of an embezzlement of a client’s funds
       by an attorney serving as a guardian, a bank executive’s fraudulent loan scheme, or
       the criminal sexual abuse of a patient by a physician under the guise of an
       examination. This adjustment does not apply in the case of an embezzlement or theft
       by an ordinary bank teller or hotel clerk because such positions are not characterized
       by the above-described factors.
Id. § 3B1.3 n.1.
       The relevant explanation of “special skill” is found in the Guidelines Manual at Note 3:
       “Special skill” refers to a skill not possessed by members of the general public and
       usually requiring substantial education, training or licensing. Examples would
       include pilots, lawyers, doctors, accountants, chemists, and demolition experts.
Id. § 3B1.3 n.3.
C. Tatum Did Not Occupy a Position of Trust
        When this Court determines whether an individual occupies a position of trust, we focus on
the relationship between the defendant and the victim of the crime. That is, we have “previously
indicated that the rationale for the sentencing enhancement at issue here is virtually analogous to the
type of punishment routinely administered for violating a fiduciary duty, which involves a higher
duty than is placed upon persons that do not occupy positions of trust.” United States v. Gilliam,
315 F.3d 614, 618 (6th Cir.), cert. denied, 540 U.S. 1155 (2004) (citing United States v. Ragland,
72 F.3d 500, 503 (6th Cir. 1996)). A “position of trust arises almost as if by implication when a
person or organization intentionally makes himself or itself vulnerable to someone in a particular
position, ceding to the other’s presumed better judgment some control over their affairs.” Id.
(internal quotations and citations omitted). The Gilliam Court further states that the examples in the
Guidelines of trust relationships “translate directly to the types of relationships where a ‘fiduciary
duty’ exists by implication (e.g., physician-patient, lawyer-client, officer-organization, etc.).” Id.
Because Tatum’s position was clerical in nature and lacked the type of discretion and authority that
characterize the fiduciary-like positions that are appropriate for the § 3B1.3 enhancement, we
conclude that she did not hold a position of trust.
        Our precedent has made clear that application of the enhancement is appropriate where the
position occupied by the defendant involved considerable discretion and authority. See, e.g., United
States v. Smith, No. 06-1218, ___ F.3d. ___, ___ (6th Cir. 2008) (approving of enhancement where
the executive director of a chapter of the American Red Cross embezzled funds from the nonprofit);
United States v. Hudson, 491 F.3d 590, 596 (6th Cir. 2007) (approving of enhancement for
No. 07-5733           United States v. Tatum                                                  Page 5

contractor who had authority to develop a television station without supervision); Kaminski, 501
F.3d at 667 (approving of application of enhancement to a defendant holding herself out as a doctor
in the community); Gilliam, 315 F.3d at 616-17 (approving of enhancement for drug- and alcohol-
counselor who acted as a contractor for the probation department). While Tatum was given the
authority to prepare checks to present to the owner of the company for his signature, she was not
given authority to decide whether or not the checks should be written or signed. As noted by this
Court in United States v. Tribble, 206 F.3d 634, 637 (6th Cir. 2000), “just because we trust a person
to handle another person’s property in the course of their job does not mean they occupy a ‘position
of trust’ for the purposes of § 3B1.3.” Id. The Tribble Court then held that a postal-office window-
clerk did not hold a position of trust, despite having access to the computer system and money
orders, and despite being infrequently audited. Id. Tatum’s position of office manager is thus
similar to that of the employee in Tribble: “[E]ven though [the Defendant’s] position significantly
aided [her] in the commission and concealment of [her] offense, we do not believe that fact overrides
the inherently clerical nature of [her] position.” Id.
         That Tatum’s position was not a position of trust becomes even more clear upon a review
of those cases in which this Court has approved of the application of an enhancement to employees
diverting funds through the use of checking accounts. This Court has only applied the enhancement
to situations in which the defendant had actual check-writing authority, and it has only done so in
cases where the defendant’s overall position involved substantially more discretion and authority
than that of an office manager. See e.g., United States v. Madison, 226 F. App’x 535, 550 (6th Cir.
2007) (holding that the executive director of a non-profit, “[g]iven her use of authority to direct
payments and write checks, clearly held a position of trust and relied on that position to convert []
funds”); United States v. Pavcovich, 92 F. App’x 259, 261 (6th Cir. 2004) (order) (finding that a
bank vice-president who embezzled funds through a check-writing scheme “held a fiduciary or trust-
like relationship to the bank”); United States v. Freeman, 86 F. App’x 35, 37-38, 43 (6th Cir. 2003)
(holding that chief executive officer of non-profit organization used discretion “to cause the
organization to pay her mortgages without knowledge of the directors”).
        Tatum functioned as a regular employee of the company, not as a fiduciary-like employee.
“The rationale for the sentencing enhancement is akin to punishment for violating a fiduciary duty,
a higher duty than the ordinary one placed on all employees and breached by conversion. The trust
relationship arises when a person or organization intentionally makes himself or itself vulnerable
to someone in a particular position, ceding to the other’s presumed better judgment some control
over their affairs.” United States v. Brogan, 238 F.3d 780, 783 (6th Cir. 2001) (citing Ragland, 72
F.3d at 503). While MaxxGuard was injured because Tatum abused her position, the company at
no time gave Tatum discretion to exercise her judgment or assert control over the finances of the
company. While its true that Tatum’s fraud went undetected for so long because her actions were
largely unsupervised, “the touchstone for a finding that the defendant occupies a position of trust
is not necessarily the amount of supervision the person receives, although that is an important factor
to consider, but rather the amount of discretion the person has in his or her employment.” United
States v. McCollister, 96 F. App’x 974, 976 (6th Cir. 2004) (citing Brogan, 238 F.3d at 783; Tribble,
206 F.3d at 637; Ragland, 72 F.3d at 502). Here, Tatum’s position did not include the type of
discretion and authority that this Court has continuously required before a defendant’s sentence can
be enhanced under §3B1.3.
        The Government and the district court rely upon United States v. Allison, 59 F.3d 43 (6th Cir.
1995), in support of application of the enhancement. The defendant in Allison pleaded guilty to a
scheme very similar to the one that Tatum developed, but the plea agreement in that case included
the § 3B1.3 enhancement as part of the agreement. Id. at 44. The Allison Court concluded that
Allison had waived her right to appeal, but also noted that if the Court were to address the merits,
it would determine that the enhancement was appropriately applied. Id. at 46. The Court
specifically stated as follows:
No. 07-5733           United States v. Tatum                                                     Page 6

       Moreover, were we to address the issue, we would reject Allison’s claim because she
       occupied a position of trust that allowed her to alter checks and conceal her actions.
       Allison was the last [] employee to handle the checks after they were signed, the first
       [] employee to examine the cancelled checks after the bank returned them to the
       company, and the person responsible for reconciling [the] checking account. Indeed,
       it is highly unlikely that anybody else at Provident could have committed, and
       concealed, this crime. Accordingly, the district court properly determined that
       Allison abused a position of trust.
Id. at 46. Thus, the Allison Court disposed of the case based on its finding that Allison had waived
her right to appeal and had knowingly and voluntarily accepted the enhancement in her plea bargain.
However, this statement is dictum and is in conflict with this Court’s approach to the § 3B1.3
enhancement. Accordingly, Allison is inapposite.
D. Tatum Did Not Possess Special Skills
         There is no evidence that Tatum possessed “special skills” as the term is defined for purposes
of § 3B1.3, and the Government does not argue for an enhancement on this basis. Nonetheless, the
district court stated that Tatum utilized special skills because:
       [E]ven though Ms. Tatum didn’t have any special education, she did, in fact, have
       special skills. From her years of work as a bookkeeper or an office manager, she
       developed special skills related to the check procedure.
However, special skills are those that are not possessed by the general public, and the application
notes to the Guidelines limit the skill set to those “usually requiring substantial education, training
or licensing.” U.S.S.G. § 3B1.3 n.4. See also United States v. Wilson, 345 F.3d 447, 449 (6th Cir.
2003) (using the Sentencing Guideline’s definition of special skill); United States v. Sawaf, 129 F.
App’x 136, 145 (6th Cir. 2005) (same). The skills possessed by Tatum as an office manager – even
as a skilled and experienced office manager – do not qualify as special skills for the purpose of the
enhancement. See United States v. Humphrey, 279 F.3d 372, 382 (6th Cir. 2002) (concluding that
a bank employee with no formal education or training beyond high school did not have special skills
despite having worked at the bank for over twenty years and having “expertise in accounting
procedures”).
                                        III. CONCLUSION
       For the preceding reasons, we find that the § 3B1.3 enhancement was erroneously applied
and therefore VACATE Tatum’s sentence and REMAND for resentencing.