Court Opinion

ID: 2994885
Source: CourtListenerOpinion
Date Created: 2015-09-24 19:17:10.683469+00
Date Added: 2024-06-11T11:45:22.738049
License: Public Domain

In the
United States Court of Appeals
For the Seventh Circuit

No. 00-3454

United States of America,

Plaintiff-Appellee,

v.

William A. Sonsalla,

Defendant-Appellant.

Appeal from the United States District Court
for the Western District of Wisconsin.
No. 3:00CR00025-001--John C. Shabaz, Chief Judge.

Argued January 30, 2001--Decided March 1, 2001

      Before Flaum, Chief Judge, and Ripple and Rovner,
Circuit Judges.

      Flaum, Chief Judge. William Sonsalla pleaded
guilty pursuant to a written plea agreement to
one count of making false entries in bank records
in violation of 18 U.S.C. sec. 1005. The district
court sentenced him to 18 months in prison
followed by five years of supervised release, and
ordered him to pay $142,083.69 in restitution.
Sonsalla appeals his sentence, arguing that the
record fails to support the district court’s
imposition of upward adjustments to his base
offense level for "more than minimal planning,"
U.S.S.G. sec. 2F1.1(b)(2)(A), and for "abuse of
a position of trust," U.S.S.G. sec. 3B1.3.
Because the record contains more than adequate
factual support for each of the adjustments, we
affirm Sonsalla’s sentence.

I.   BACKGROUND

      The People’s State Bank of Augusta, Wisconsin
hired Sonsalla in July 1981 to oversee commercial
and real estate loans and serve as the bank’s
compliance officer. During his last 12 years of
employment at the bank, Sonsalla was a Vice-
President and was responsible for loans,
delinquent loans, personnel and payroll. As Vice-
President, he also supervised three loan officers
and hired and fired the bank’s tellers.
      In April 1988, Sonsalla began embezzling money
from the bank. Drawing from his understanding of
the banking system and his knowledge that the
bank’s "Achilles’ heel" was its lax oversight of
money orders, Sonsalla concocted a scheme of
issuing money orders from customer accounts
without authorization and misappropriating cash
entrusted to him by customers for deposit in
order to purchase money orders for his own
personal use. By issuing the money orders to his
credit card company, Sonsalla concealed the fact
that he was the actual recipient of customers’
funds. He targeted, in particular, customers who
had demonstrated their elevated trust in him by
personally giving him cash to deposit, as well as
accounts exhibiting greater activity or a more
substantial cash "float."

      The bank’s Board of Directors began to suspect
Sonsalla’s misconduct upon discovering, in
January 1997, that some of his loan file
documentation was missing. In April 1997, the
Board gave Sonsalla 60 days to straighten out his
loan files; he failed to comply and in August,
the Board placed him on administrative leave. In
the meantime, Tom McHugh, one of Sonsalla’s
customers, contacted the bank regarding a large
discrepancy in his outstanding loan balance. In
response, the bank hired an outside auditor to
conduct a complete audit. The auditors uncovered
$70,511 in money orders that Sonsalla had
prepared and charged to various customers’
accounts, $71,589 in cash he received from
customers but had not applied to their loans or
deposit accounts as directed, and an unauthorized
$10,000 transfer between customer accounts.
Except for a $5,000 deductible, the bank’s losses
were covered by its insurer, Kansas Bankers
Surety.

      His scheme revealed, Sonsalla admitted to the
bank’s President in September 1997 that he had
been taking money from Mr. McHugh’s account to
cover up his mistakes and for his own personal
use. Sonsalla maintained, however, that Mr.
McHugh’s was the only account from which he had
taken money. Nevertheless, the bank then
terminated his employment.
      In March 2000, a federal grand jury returned an
indictment charging Sonsalla with one count of
embezzlement under 18 U.S.C. sec. 656 (Count I),
and one count of making false entries in the
records of People’s State Bank with the intent to
deceive under 18 U.S.C. sec. 1005 (Count II).
Count II specifically charged that on October 24,
1995, Sonsalla caused a $25,000 advance to issue
from a customer’s loan account without
authorization, which he used to purchase a
$25,000 money order. Count II further charged
that Sonsalla then deposited the $25,000 into
another customer’s account from which he had
previously made an unauthorized withdrawal.
Pursuant to a written agreement, Sonsalla pleaded
guilty to Count II in exchange for the
government’s dismissal of Count I.

      Adopting the calculations in the Presentence
Investigation Report ("PSR"), the district court
calculated the loss caused by Sonsalla’s crime as
being between $120,000 and $200,000, and
therefore increased Sonsalla’s base offense level
by seven, in accordance with U.S.S.G. sec.
2F1.1(b)(1)(H). Over Sonsalla’s objection, the
court also imposed a two-level upward adjustment
for "more than minimal planning," U.S.S.G. sec.
2F1.1(b)(2)(A). The district court accepted this
recommendation based on its view that Sonsalla’s
"hundreds of transactions" over a period of more
than eight years were not "purely opportune."
Additionally, the district court found that
Sonsalla committed "a very severe abuse of trust"
and "used his sensitive position as a bank
officer" to perpetrate and conceal a fraud, and
thus imposed a two-level upward adjustment for
abuse of trust under U.S.S.G. sec. 3B1.3. After
reducing the offense level by three for
acceptance of responsibility, the district court
imposed a sentence of 18 months in prison--the
middle of the guideline range--and ordered
restitution of $142,083.69.

II. DISCUSSION
A. More Than Minimal Planning

      Section 2F1.1(b)(2)(A) permits a sentencing
court to increase the defendant’s offense level
by two upon a finding that he or she engaged in
"more than minimal planning." Applying the
definition of more than minimal planning in the
commentary to sec. 1B1.1, this court has
explained that this upward adjustment is
appropriate where: (1) there is more planning
than is typical for commission of the offense in
simple form; (2) steps are taken to conceal the
offense; or (3) criminal acts, each of which are
not purely opportune, are repeated over a period
of time. United States v. Brown, 47 F.3d 198, 204
(7th Cir. 1995); see U.S.S.G. sec. 1B1.1
commentary at 1(f). This court reviews for clear
error the district court’s determination that a
defendant engaged in more than minimal planning.
See United States v. Mau, 45 F.3d 212, 214 (7th
Cir. 1995).

      By itself, the district court’s determination
that Sonsalla’s repeated acts over an eight-year
period constituted more than minimal planning is
sufficient to support the upward adjustment under
sec. 2F1.1(b)(2)(A). See United States v.
Boatner, 99 F.3d 831, 838 (7th Cir. 1996). The
district court was permitted to adopt the facts
in the PSR, whose accuracy and reliability
Sonsalla did not contest, as support for its
findings and conclusions. See United States v.
Krankel, 164 F.3d 1046, 1055 (7th Cir. 1998).
Furthermore, the court was within its authority
to rely on the PSR alone in finding that
Sonsalla’s acts were not purely opportune but
rather constituted evidence of more than minimal
planning. See United States v. Mustread, 42 F.3d
1097, 1101-02 (7th Cir. 1994). The PSR describes
in detail Sonsalla’s embezzlement scheme,
involving hundreds of transactions, generally in
$2,000 to $3,000 increments, into and out of ten
bank accounts over more than eight years.
Although Sonsalla initially embezzled money
approximately once every six months, as he
continued his scheme undetected, he increased the
frequency and amount of his takings. In addition,
he preyed on customers whose accounts he knew had
more activity or a greater cash "float." Thus,
because he utilized his knowledge of bank
operations to shape the pattern, frequency and
amounts of his illegal transactions, Sonsalla’s
acts were not "purely opportune," but instead
deliberate and calculated to maximize his
deception. Cf. United States v. Green, 114 F.3d
613, 619 (7th Cir. 1997) (15 visits made to
physicians after staged accidents were calculated
to conceal insurance fraud and were not purely
opportune); Mau, 45 F.3d at 214 (volume and
amount of checks and defendant’s business
expertise demonstrated that check kiting was not
purely opportune); United States v. Ojo, 916 F.2d
388, 391-92 (7th Cir. 1990) (repeatedly obtaining
numerous forms of false identification
demonstrated significant forethought and planning
such that acts were not purely opportune).
Sonsalla’s repeated acts were "one consistent way
of carrying out a fraudulent plan," Green, 114
F.3d at 619, and thus the upward adjustment for
more than minimal planning was appropriate.

      We note additionally that the upward adjustment
would have been proper under the first and second
factors set forth in Brown, 47 F.3d at 204.
Sonsalla took steps to conceal his scheme by
designating his credit card company as payee of
the money orders, transferring funds into and out
of customers’ accounts, and falsifying or
omitting information from the bank’s books and
records. When confronted by the bank’s President
about his conduct, he misrepresented that Mr.
McHugh’s account was the only account from which
he had stolen, when in fact his scheme involved
ten different accounts. In addition, his success
in perpetuating his scheme unabated for over
eight years demonstrates that his offense
involved more planning than is typical for the
simple act of doctoring a bank’s books and
records. See Boatner, 99 F.3d at 838 (elaborate
insurance fraud scheme underlying mail fraud
offense constituted more planning than is typical
for simple mail fraud). Accordingly, the record
contains more than adequate support for the
district court’s conclusion that Sonsalla engaged
in more than minimal planning of his offense.

B.   Abuse of Position of Trust

      Section 3B1.3 of the Sentencing Guidelines
permits a two-level upward adjustment "[i]f the
defendant abused a position of public or private
trust . . . in a manner that significantly
facilitated the commission or concealment of the
offense." The sentencing court may not apply this
adjustment, however, when abuse of trust is a
necessary element of the offense of conviction.
United States v. Sinclair, 74 F.3d 753, 763 (7th
Cir. 1996) (sec. 3B1.3 increase was proper
because base offense level for solicitation or
acceptance of bribes did not take into account
abuse of trust). This court reviews de novo the
sentencing court’s interpretation of the meaning
of "position of trust," see United States v.
Hernandez, 231 F.3d 1087, 1089 (7th Cir. 2000),
but reviews only for clear error the court’s
factual finding that a defendant occupied and
abused a position of trust to facilitate his
offense, see United States v. Bailey, 227 F.3d
792, 801 (7th Cir. 2000).

1.   Double-Counting

      Sonsalla first argues that the offense of
falsifying bank records, 18 U.S.C. sec. 1005,
necessarily involves an abuse of trust in every
case, and therefore it was double-counting to
increase his offense level under sec. 3B1.3.
Although this is a question of first impression
in this circuit, other circuits have upheld the
application of sec. 3B1.3 to defendants convicted
under sec. 1005. See United States v. McCord, 33
F.3d 1434, 1453 (5th Cir. 1994) (application of
sec. 3B1.3 to defendant convicted under sec. 1005
was not clearly erroneous); United States v.
Pooler, 961 F.2d 1354, 1357 (8th Cir. 1992)
(same); cf. United States v. Ragland, 72 F.3d
500, 502-03 (6th Cir. 1996) (sec. 3B1.3
applicable to sec. 1005 offenders, but record
failed to demonstrate that defendant held
position of trust).

      This court has explained that, although breach
of trust is a necessary element of embezzlement
under 18 U.S.C. sec. 656--a statute parallel to
sec. 1005 prohibiting "misappropriation" of bank
funds with the intent to deceive--abuse of trust
is not, and constitutes more egregious conduct
warranting an upward adjustment under sec. 3B1.3.
See United States v. Dion, 32 F.3d 1147, 1149-50
(7th Cir. 1994) (joining Second, Third, Fifth and
Ninth Circuits in holding that abuse of position
of trust is not an element of embezzlement under
sec. 656); United States v. Hathcoat, 30 F.3d
913, 918-19 (7th Cir. 1994); cf. Moore v. United
States, 160 U.S. 268, 269 (1895) (explaining that
embezzlement, by definition, requires finding of
breach of trust). In holding that an embezzler
could qualify, upon a proper factual showing, for
a sec. 3B1.3 adjustment, the Hathcoat court
looked to the commentary to sec. 3B1.3, which
explains that an individual who holds a position
of public or private trust has "professional or
managerial discretion" and is subject to
"significantly less supervision" than employees
with non-discretionary responsibilities. U.S.S.G.
sec. 3B1.3 commentary at 1. Indeed, the
commentary lists a bank executive’s fraudulent
loan scheme as one situation in which the
increase for abuse of trust would be proper. See
id.

       Although conviction under sec. 1005 requires
proof of an element (a false entry in bank
records) not necessary to sec. 656, see United
States v. Marquardt, 786 F.2d 771, 778-79 (7th
Cir. 1986), the two offenses are similar insofar
as a breach of trust owed by the employee or
officer is sufficient to constitute a violation
of either statute; an abuse of trust is not
required. Cf. Ragland, 72 F.3d at 502-03
(defendant convicted of violating sec. 1005 did
not abuse position of trust and therefore did not
qualify for sec. 3B1.3 adjustment). Additionally,
allowing the upward adjustment in sec. 1005 cases
promotes the guideline’s stated purpose of
"punish[ing] more severely those defendants whose
crimes are more difficult to detect by virtue of
the special nature of their positions." Hathcoat,
30 F.3d at 920 (Eschbach, J., dissenting).
Therefore, just as the court "categorically"
rejected the double-counting argument with
respect to sec. 656, Dion, 32 F.3d at 1149, we
now reject Sonsalla’s double-counting argument
with respect to sec. 1005. Thus, we hold that
because abuse of a position of trust is not an
element of falsification of bank records under
sec. 1005, upon an appropriate factual showing a
defendant convicted under sec. 1005 may qualify
for an increase in offense level under sec.
3B1.3.

2.Sonsalla’s Abuse of His Position of Trust
Significantly Facilitated His Offense

      In order for Section 3B1.3 to apply, the
district court must find that: (1) the defendant
occupied a position of trust, and (2) the
defendant’s abuse of that position of trust
significantly facilitated the commission of the
crime. United States v. Stewart, 33 F.3d 764, 768
(7th Cir. 1994); see U.S.S.G. sec. 3B1.3
commentary at 1.

      Contrary to Sonsalla’s argument, the district
court did not rely solely on his title of Vice-
President in determining that he held a position
of trust at the bank. Rather, the
responsibilities and privileges that
characterized his position were the key to his
knowledge of the banking system and the
operations of the bank. In addition, as Vice-
President, he oversaw commercial and real estate
loans and acted as compliance officer. Thus,
regardless of his title, Sonsalla’s actual duties
involved substantial discretion and
responsibility, and the record amply supports the
district court’s finding that Sonsalla occupied
a position of trust. Cf. Hernandez, 231 F.3d at
1091 (staff accountant who had access to
corporate funds, autonomy in preparing check
requests and minimal supervision occupied
position of trust); Dion, 32 F.3d at 1150
(installment loan officer occupied position of
trust).

      The record also supports the district court’s
finding that Sonsalla would not have been able to
execute his fraudulent scheme had he not occupied
such a "sensitive position" with the bank. His
position allowed him access to large amounts of
cash, including funds customers had given him
personally to deposit into their accounts. Cf.
United States v. Christiansen, 958 F.2d 285, 288
(9th Cir. 1992) (defendant’s position as bank
branch representative gave her access to large
amounts of cash). Utilizing the knowledge gained
through his position and lengthy experience at
the bank, Sonsalla was able to exploit the bank’s
weaknesses, including its lax oversight of money
orders. Furthermore, because of his role as the
bank’s compliance officer, no one else was
looking over his shoulder to ensure that his loan
documentation and customer accounts were in
order, thus allowing him to commit and conceal
his crime for many years. Had someone else been
acting as compliance officer, Sonsalla’s files
would have been reviewed and found to be in
disarray years earlier. Instead, it was not until
McHugh’s inquiry about his loan account that the
bank initiated the audit that revealed his
fraudulent scheme. Cf. Dion, 32 F.3d at 1150
(because of position at bank, defendant was able
to misapply funds and conceal their location by
recharacterizing transactions); Stewart, 33 F.3d
at 769 (defendant, a licensed insurance broker,
mailed communications to clients and others
containing false representations that concealed
his conversion of clients’ funds); Christiansen,
958 F.2d at 288 (defendant’s position allowed her
to conceal theft for extended period of time). In
light of all of the above, the district court’s
finding that Mr. Sonsalla’s abuse of his position
of trust significantly facilitated his offense
was not clearly erroneous.

III.   CONCLUSION

      The district court’s findings that Sonsalla
engaged in more than minimal planning, and that
his abuse of his position of trust significantly
facilitated his offense were not clearly
erroneous. Therefore, the two-level upward
adjustments under sec. 2F1.1.(b)(2)(A) and sec.
3B1.3 were proper. For the foregoing reasons, we
Affirm the decision of the district court.