Court Opinion

ID: 218790
Source: CourtListenerOpinion
Date Created: 2011-06-15 00:01:07+00
Date Added: 2024-06-11T12:07:03.425427
License: Public Domain

UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                            No. 10-4546

UNITED STATES OF AMERICA,

                Plaintiff - Appellee,

          v.

KATHLEEN CULBRETH,

                Defendant – Appellant.

Appeal from the United States District Court for the District of
Maryland, at Greenbelt.     Peter J. Messitte, Senior District
Judge. (8:09-cr-00645-PJM-1)

Submitted:   May 31, 2011                 Decided:   June 14, 2011

Before NIEMEYER, KEENAN, and WYNN, Circuit Judges.

Affirmed by unpublished per curiam opinion.

James Wyda, Federal Public Defender, Ebise Bayisa, Staff
Attorney,   Greenbelt,  Maryland,   for   Appellant.  Rod  J.
Rosenstein, United States Attorney, Jonathan Biran, Assistant
United States Attorney, Kiran Patel, Special Assistant United
States Attorney, Baltimore, Maryland, for Appellee.

Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:

             Kathleen Culbreth pled guilty to bank fraud, 18 U.S.C.

§ 1344    (2006)    (Count        One),   and     credit    card   fraud,        18   U.S.C.

§ 1029(a)(2)       (2006)    (Count       Two),    and     received    a    sentence     of

forty-one months’ imprisonment.                   Culbreth appeals her sentence,

arguing that the district court erred in finding that she abused

a position of trust, U.S. Sentencing Guidelines Manual § 3B1.3

(2009).     We affirm.

             Culbreth       was    hired     as    office    manager       for    Cardinal

Scientific, Incorporated, by Andrew Brosky, who had started the

company.     She worked there for three years.                  Her duties included

bookkeeping,       preparing         bills       and   invoices,       answering        the

telephone, and getting the mail.                   Only Brosky had the authority

to sign checks; however, Culbreth opened invoices from suppliers

as   they    arrived,        logged        them    into     Cardinal’s       electronic

accounting system, and printed checks.                     The checks were kept in

a file cabinet in Brosky’s office, but Culbreth had authority to

go into his office and take checks from the file cabinet as

needed.      She was the only employee so authorized, apart from

Brosky.     Culbreth was also the only employee besides Brosky who

could access the company’s bank accounts and lines of credit

electronically with its user name and password.

             Once or twice a month, Culbreth gave Brosky a folder

of invoices and checks; he reviewed them and signed the checks

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if they appeared to be in order.               Culbreth was also responsible

for following up with customers who had not paid Cardinal on

time, and making arrangements for them to pay in installments,

if necessary.

            Within a month of being hired, Culbreth began printing

checks made payable to herself and forging Brosky’s signature.

Thereafter, until her fraud was discovered, Culbreth created at

least one check made payable to herself every month but one.

Culbreth     covered    up    her     activity    by   using        her   access     to

Cardinal’s     electronic       banking       system   to     move    money     among

Cardinal’s    three     lines    of    credit    and   its    business      checking

account.     She changed the entries in Cardinal’s general ledger

so that, for amounts actually paid to her, the payee listed in

the general ledger was one of Cardinal’s creditors.                         Culbreth

also committed credit card fraud against Cardinal by contacting

the issuers of Cardinal’s Bank of America and BJ’s credit cards,

without authorization, and requesting that she be added as an

authorized user on each card.

            Culbreth’s       criminal     activity     went    undiscovered         for

three     years.       Brosky   eventually       suspected      a     problem      with

Culbreth’s bookkeeping.          However, he did not suspect that she

was stealing, and when he asked his accountants to investigate

in August 2006, they did not discover the fraud for several

months.     Only when Brosky noticed a July payment to a vendor who

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he remembered had been paid in full in March did Culbreth admit

that she had done more than make mistakes.                 Thereafter, Brosky

learned that Cardinal’s two $100,000 lines of credit, one of

which had been opened in anticipation of the company’s move to a

new building, were both exhausted.             The money had been moved

into Cardinal’s checking account, and Culbreth had used it to

gamble.

           At sentencing, the district court observed that the

adjustment applied if Culbreth occupied a position of private

trust,    i.e.,   “one    characterized      by   managerial      discretion,

substantial   discretionary    judgment,      which   is    ordinarily   given

deference because persons holding those positions ordinarily are

subject to significantly less supervision than employees whose

responsibilities    are   primarily       non-discretionary      in   nature.”

See USSG § 3B1.3 & cmt. n.1.       The court found that Culbreth had

the responsibility for receiving bills and preparing checks for

her boss’s signature and that her duties enabled her to make

payments to herself.       The court found that Culbreth had access

to the lines of credit, which allowed her to make it appear that

revenues were “flowing in the ordinary course[,]” and that she

was the only employee besides Brosky who had the user name and

password and could make transfers, which allowed her to “make

the operating account look bulkier than in fact it was.”                   The

court found that Culbreth was able to transfer funds to the

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operating       account     and    siphon          money   out    for     her   own     use,

undetected, for three-and-a-half years.                        The court found that

the abuse of a position of trust adjustment was appropriate.

            The district court’s decision that a defendant had a

position of trust is a factual determination reviewed for clear

error.     United States v. Bollin, 264 F.3d 391, 415 (4th Cir.

2001).     The question must be examined from the perspective of

the victim.       United States v. Abdelshafi, 592 F.3d 602, 611 (4th

Cir.), cert. denied, 131 S. Ct. 182 (2010).                         The three factors

this court weighs to determine whether the adjustment applies

are:     “(1) whether the defendant had special duties or special

access to information not available to other employees,                            (2) the

extent    of     the     discretion      the       defendant     possessed,       and    (3)

whether     the    defendant’s        actions         indicate     that    he     is    more

culpable than others in similar positions who engage in criminal

acts.”    Id. at 611 (citing United States v. Akinkoye, 185 F.3d

192, 203 (4th Cir. 1999)).

            Culbreth asserts that she had a low-level, clerical

position,       lacked     check-writing           authority,     did     not   supervise

other employees, and had little discretion in her duties.                                She

notes    that     the     mere    fact    that       Brosky      trusted    her    is    not

sufficient because trust on the part of the victim is always

present in a fraud case, United States v. Ebersole, 411 F.3d

517, 536 (4th Cir. 2005), whereas the term “position of public

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or private trust” in § 3B1.3 “is a term of art, appropriating

some   of   the        aspects     of    the   legal       concept    of    a    trustee      or

fiduciary.”            Id.         (internal        quotation       marks   and        citation

omitted).     Culbreth asserts that her job involved no more than

paying the bills as they arrived and that her fraudulent conduct

could have been discovered easily by Brosky through a review of

the company’s bank statements.

             We note first that Culbreth had access to information

that no other regular employee had, i.e., the user name and

password     which       allowed        her    to    access     Cardinal’s        electronic

banking     and    to     make     transfers        among     the    company’s         checking

account     and    lines      of    credit     without      supervision,         as    well    as

unquestioned access to the company’s checkbook which Brosky kept

in his office.           Culbreth correctly argues that “lax supervision

alone does not convert one’s job into a ‘position of trust’

under § 3B1.3.”          United States v. Helton, 953 F.3d 867, 870 (4th

Cir. 1992).            However, Culbreth’s claim that Brosky could have

easily discovered her thefts through a quick review of the bank

statements        is    not   supported        by    the    record.         In    fact,       his

accountants could not discover the fraud for months.                                  Thus, the

first factor weighs in favor of Culbreth having occupied and

abused a position of trust.

             It is true that Culbreth did not have much discretion

in her normal duties, and the discretion she did have — to

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negotiate a structured payment for a customer who could not pay

his bill in full — does not seem to have helped her commit or

conceal her theft.

              The   last    factor,       Culbreth’s      culpability      relative    to

others in a similar position who commit crimes, focuses on the

nature and extent of her crime.                        Akinkoye, 185 F.3d at 204.

Culbreth stole from Cardinal on a regular basis over a period of

three years and the loss to the company totaled over $200,000.

This factor weighs in favor of the district court’s finding that

Culbreth abused a position of trust.                      On balance, we conclude

that the district court did not clearly err in so finding and in

making the adjustment under § 3B1.3.

              We    therefore      affirm        the    sentence    imposed     by    the

district    court.         We    dispense    with       oral   argument    because    the

facts   and    legal    contentions         are    adequately      presented     in   the

materials     before       the    court    and     argument     would     not   aid   the

decisional process.

                                                                                AFFIRMED

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