Court Opinion

ID: 220772
Source: CourtListenerOpinion
Date Created: 2011-07-12 16:04:11+00
Date Added: 2024-06-11T17:28:46.999375
License: Public Domain

FILED
                                                         United States Court of Appeals
                                                                 Tenth Circuit

                                                                 July 12, 2011
                  UNITED STATES COURT OF APPEALS
                                               Elisabeth A. Shumaker
                                                                 Clerk of Court
                               TENTH CIRCUIT

 UNITED STATES OF AMERICA,

             Plaintiff - Appellee,                     No. 10-1450
       v.
 CATHERINE SENNINGER,

             Defendant - Appellant.

                                      ORDER

Before BRISCOE, Chief Judge, ANDERSON, and MURPHY, Circuit Judges.

      This matter is before the court on Appellant’s Petition for Panel Rehearing.

Also before the court is a request by Appellant’s counsel to withdraw and have

new counsel appointed to represent Appellant. Panel rehearing is granted solely

to amend footnote 1. Accordingly, the panel’s opinion, United States v.

Senninger, No. 10-1450, 2011 WL 2455662 (10th Cir. June 21, 2011), is vacated

and replaced with the opinion issued herewith. Counsel’s motion to withdraw is

granted. The request for appointment of substitute counsel is denied.

                                      Entered for the Court,

                                      ELISABETH A. SHUMAKER, Clerk
                                                                         FILED
                                                            United States Court of Appeals
                                                                    Tenth Circuit

                                                                    July 12, 2011
                    UNITED STATES COURT OF APPEALS
                                                 Elisabeth A. Shumaker
                                                                    Clerk of Court
                                 TENTH CIRCUIT

 UNITED STATES OF AMERICA,

               Plaintiff - Appellee,                     No. 10-1450
          v.                                             (D. Colorado)
 CATHERINE SENNINGER,                         (D.C. No. 1:08-CR-00456-MSK-2)

               Defendant - Appellant.

                            ORDER AND JUDGMENT *

Before BRISCOE, Chief Judge, ANDERSON, and MURPHY, Circuit Judges.

I.    Introduction

      Defendant Catherine Senninger was convicted of six counts of mail fraud

and one count of making a false claim against the Government. She was

acquitted of several other counts, including conspiracy and additional mail fraud

counts. At trial, the Government presented evidence that Senninger, through her

involvement with a company known as Olympia Financial and Tax Services, Inc.

(“Olympia”), participated in a scheme to defraud the Internal Revenue Service

      *
        This order and judgment is not binding precedent except under the
doctrines of law of the case, res judicata, and collateral estoppel. It may be cited,
however, for its persuasive value consistent with Fed. R. App. P. 32.1 and 10th
Cir. R. 32.1.
(“IRS”) and the State of Colorado Department of Revenue (“CDR”) by preparing

amended tax returns containing false or fraudulent information. Based, in part, on

its finding that the loss to the IRS and the CDR was $149,682.84, the district

court sentenced Senninger to thirty-six months’ imprisonment. The sentence

represented an upward departure from the advisory guidelines range. Senninger

was also ordered to pay $128,664.27 in restitution. In this appeal, Senninger

challenges her sentence, including the restitution order. Exercising jurisdiction

pursuant to 28 U.S.C. § 1291 and 18 U.S.C. § 3742, this court affirms.

II.   Background

      Senninger and her codefendant, Jeffrey Harris, were charged in a multi-

count indictment with seventeen counts of mail fraud, one count of conspiracy to

defraud the government, and five counts of presenting false claims to the

government. The details of the scheme which gave rise to the charges are set out

in this court’s opinion disposing of Harris’s appeal.

      From 2001 through 2006, [Harris] ran a scheme to defraud the
      Internal Revenue Service (IRS) and the Colorado Department of
      Revenue (CDR), whereby he sought tax refunds for customers of
      Olympia Financial and Tax Services (Olympia), a corporation he
      owned and controlled. Harris had no specialized tax-preparation
      experience, nor was he a certified public accountant or a former IRS
      agent. Olympia’s employees and Harris directly solicited customers.
      They represented that: (1) Olympia could amend the customers’ tax
      returns to claim legitimate tax refunds, (2) the tax professionals who
      worked at Olympia were former IRS employees or were otherwise
      qualified to amend tax returns, and (3) Olympia would use legal
      methods and truthful information to amend customers’ returns.
      Harris also developed and used promotional written and internet

                                         -2-
      materials falsely representing that Olympia employed experienced
      tax and legal professionals to review the amended returns to ensure
      compliance with the law. He also represented that all amendments to
      tax returns would be discussed with the customer and supported with
      documentation.

             To implement the scheme to defraud, Harris and others
      prepared amended federal and state tax returns containing false
      information so as to entitle the customer to a refund. Typical of the
      false claims were itemized deductions, business profits or losses,
      educational expenses, amount of taxable income, and the amount of
      refund owed to the taxpayer. Olympia charged its customers 40 to 50
      percent of any refund they received. As a result of this scheme,
      Harris and others caused over 800 fraudulent amended returns to be
      filed with the IRS claiming $2,667,788 in refunds . . . . In addition,
      over 500 fraudulent amended returns were filed with the CDR
      claiming $511,101 in refunds.

United States v. Harris, No. 10-1328, 2011 WL 1289156, at *1-*2 (10th Cir.

April 6, 2011) (footnote omitted). Senninger concedes trial testimony and

stipulated evidence shows she prepared more than 100 amended federal and state

returns for Olympia. 1

      According to Senninger, she worked for the IRS from the 1960s to 1985

and, at one point in her employment, held the position of tax auditor. At trial,

Harris testified Senninger’s past employment with the IRS was one of the reasons

he hired her. Senninger provided Harris with a photocopy of her old IRS badge,

      1
       Our review of Senninger’s appeal has been significantly impeded by her
nearly complete failure to provide citations to the relevant sections of the record,
as required by Fed. R. App. P. 28(e). Notwithstanding that failure, this court has
thoroughly reviewed the entire appellate record and, based on that independent
review, fully considered all appellate arguments raised by Senninger.

                                         -3-
which he framed and placed on the wall in Olympia’s offices. Harris distributed

additional photocopies to Olympia’s commissioned salespeople who used

Senninger’s credentials when marketing Olympia’s tax preparation services to

potential customers. Several taxpayers testified they were influenced in their

decision to use Olympia because of Senninger’s past employment with the IRS.

Harris testified Senninger was aware her credentials were being used in this way.

      Senninger concedes the Government presented sufficient evidence at trial to

demonstrate she placed false and fraudulent information on amended tax returns,

including falsified itemized deductions and falsified profits or losses from

taxpayer businesses. The information was gleaned from a client questionnaire

created by Harris with input from Senninger. Harris testified the questionnaires

were completed either by Olympia’s client or by a salesperson based on

information provided by the client. Harris also testified he frequently added false

information to the questionnaires or changed the information provided by the

client. In some circumstances, he completed an entirely new questionnaire for the

client. Harris based the false information he added to the questionnaires,

including false deductions, on training he received from Senninger. The

questionnaires were then forwarded to Senninger who used the information

recorded on them to prepare amended state and federal tax returns for the client.

Harris testified that when Senninger completed an amended return for an Olympia

client, she would prepare fraudulent schedules to support the false deductions he

                                         -4-
included on the questionnaires. Additionally, Senninger did not necessarily use

the answers on the questionnaires to prepare the returns. For example, Senninger

concedes that if the questionnaire contained round numbers, she “changed the

numbers on the filed returns so that the returns no longer had whole, round

numbers on some of the deduction figures.”

      The jury found Senninger guilty of six counts of mail fraud and aiding (and

abetting) and one count of making a false claim against the government (and

aiding and abetting). She was acquitted on the remaining counts, including the

conspiracy count. A Presentence Investigation Report (“PSR”) was prepared

prior to sentencing. The PSR estimated the total loss from the scheme in which

Senninger participated to be $263,417 which increased her base offense level by

twelve levels. See USSG §§ 2B1.1(a)(1), (b)(1)(G). Senninger’s total offense

level for guidelines sentencing purposes was calculated at twenty-one. Senninger

received one criminal history point for a 2009 Arizona assault conviction,

resulting in her being assigned a Category I criminal history category. Although

Senninger also had 1992 federal convictions for falsification of documents and

obtaining funds by fraud and false statements, those convictions were not

assigned any criminal history points because they were stale. See USSG

§ 4A1.2(e)(1), (3) (excluding from a defendant’s criminal history calculation any

sentence not exceeding one year and one month that was imposed more than ten

years before the commencement of the instant offense).

                                        -5-
      Prior to sentencing, the Government filed a sentencing statement requesting

the district court to depart upward from the advisory guidelines range by

sentencing Senninger as if the stale convictions were included in her criminal

history calculation. See USSG § 4A1.3(a) (permitting a district court to depart

upward when a defendant’s criminal history category does not adequately

represent the seriousness of her criminal history). In response, Senninger filed a

motion opposing any upward departure. She also challenged, inter alia, the

calculation of her advisory guidelines range. Specifically, she argued the PSR

incorrectly calculated the loss amount for purposes of determining her guidelines

offense level. Relying on Government Exhibit 154 and a report prepared by her

expert, David Romero, Senninger took the position that she was responsible for a

total loss of only $6409.73. This amount represented the sum of the increases

Senninger made to the figures on the questionnaires she used to prepare the

amended returns listed in Exhibit 154, less any decreases she made to those

figures. Senninger argued any other refunds claimed on the amended returns were

amounts the taxpayers were “necessarily entitled” to receive and, thus, could not

be used to calculate either actual or intended loss.

      The parties stipulated that only the amended tax returns listed in Exhibit

154 should be used to calculate the loss amount. They disagreed, however, over

the proper method of calculating the loss amount for both offense level and

restitution purposes. Senninger again argued the loss amount was limited to the

                                          -6-
net of the alternations she made to the information from the questionnaires when

she prepared the amended returns. The Government argued Senninger

participated in a scheme that resulted in a loss of $149,682.84, the total amount of

all federal and state refunds claimed on the returns listed in Exhibit 154. The

district court agreed with the Government, finding a loss amount of $149,682.84

and, accordingly, increasing Senninger’s offense level by ten levels. See USSG

§ 2B1.1(b)(1)(F).

       The district court also granted the Government’s request for an upward

departure pursuant to USSG § 4A1.3(a)(1) and added two points to Senninger’s

criminal history calculation. Consequently, the court calculated Senninger’s

advisory guidelines range at thirty-three to forty-one months’ imprisonment based

on a total offense level of nineteen and a Category II criminal history. The court

rejected Senninger’s request for a downward variance and sentenced her to thirty-

six months’ imprisonment. The district court also ordered Senninger to pay

$120,558.27 in restitution to the IRS and $8106.00 to the CDR. The restitution to

the CDR was less than the loss amount attributable to the fraudulent state returns

because the CDR successfully collected a portion of the improperly paid refunds.

III.   Discussion

       In this appeal, Senninger first argues the district court erred in calculating

amount of loss. Because the amount of loss was used to determine Senninger’s

advisory guidelines range, this challenge is to the procedural reasonableness of

                                          -7-
her sentence. See United States v. Huckins, 529 F.3d 1312, 1317 (10th Cir.

2008). When determining whether the district court properly calculated a

defendant’s advisory guidelines range, this court reviews factual findings for

clear error and legal determinations de novo. United States v. Kristl, 437 F.3d
1050, 1054 (10th Cir. 2006). Senninger’s challenge to the district court’s

calculation of loss amount for purposes of USSG § 2B1.1 involves factual

findings that we review for clear error. See United States v. Sutton, 520 F.3d
1259, 1262 (10th Cir. 2008).

      When sentencing a defendant convicted of an offense involving fraud, the

district court may use “either the actual or the intended loss to establish the

defendant’s offense level.” United States v. Masek, 588 F.3d 1283, 1287 (10th

Cir. 2009). Accordingly, the court need only make a reasonable estimate of either

“the reasonably foreseeable pecuniary harm that resulted from the offense,” or

“the pecuniary harm that was intended to result from the offense.” USSG § 2B1.1

cmt. n.3(a)(i), (ii)(I). Having reviewed the entire record, including Romero’s

report and the district court’s comprehensive explanation of why it rejected the

methodology advocated by Senninger, we discern no error in the district court’s

calculation of loss. As the court stated, Senninger was convicted of participating

in a scheme to defraud both the IRS and the CDR. To find Senninger guilty of

mail fraud, the jury was required to find she “knowingly devised or participated

in a scheme to obtain money by means of false representation.” Thus, the court

                                          -8-
looked at the totality of Senninger’s involvement in that scheme, concluding her

actions did not involve “simply filling in blanks on amended returns.” The

district court found Senninger “len[t] credibility to the entire operation. She lent

her credibility as having been an IRS auditor to this operation, and she knew she

was doing that when she gave the credentials to Mr. Harris.” The district court’s

finding is amply supported by the trial testimony of several witnesses who stated

they submitted amended returns through Olympia because Senninger’s credentials

conferred an air of legitimacy on the business. It is further supported by Harris’s

testimony that Senninger knew Olympia was using her credentials to market

services to taxpayers, and his testimony that Senninger trained him in how to

create fraudulent deductions and created false schedules to support those

deductions. Accordingly, the district court did not err in finding the loss

attributable to Senninger was the total amount claimed on the fraudulent amended

returns filed with IRS and the CDR. We conclude the district court fulfilled its

obligation to arrive at a reasonable estimate of the loss attributable to Senninger

and there was no clear error in its calculation.

      Senninger next challenges the district court’s imposition of an upward

departure pursuant to USSG § 4A1.3. An upward departure may be warranted

“[i]f reliable information indicates that the defendant’s criminal history category

substantially under-represents the seriousness of the defendant’s criminal

history.” USSG § 4A1.3(a)(1). When considering a challenge to an upward

                                          -9-
departure, this court applies a four-factor analysis: “(1) whether the district court

relied on permissible departure factors, (2) whether those factors removed a

defendant from the applicable Guidelines heartland, (3) whether the record

supports the district court’s factual bases for a departure, and (4) whether the

degree of departure is reasonable.” United States v. Robertson, 568 F.3d 1203,

1211 (10th Cir. 2009). Senninger’s challenge is confined to the first factor.

Specifically, she asserts the district court was precluded from using her stale

convictions to increase her criminal history category because the Guidelines

specifically prohibit the sentence from being counted. Far from being supported

by the Guidelines, however, Senninger’s argument is directly foreclosed by them.

      Section 4A1.2(e)(3) of the Guidelines excludes from a defendant’s criminal

history calculation any sentence not exceeding one year and one month if the

sentence was imposed more than ten years before the commencement of the

offense of conviction. The Application Notes to § 4A1.2, however, specifically

permit stale sentences to be considered by a court “in determining whether an

upward departure is warranted under § 4A1.3” if the court first finds that the stale

sentence “is evidence of similar, or serious dissimilar, criminal conduct.” USSG

§ 4A1.2 cmt. n.8. Here, the district court faithfully followed this approach by

finding that Senninger’s 1992 sentence was imposed for criminal conduct similar

to the conduct involved in the instant offense.

             The conviction in 1992 in the Federal District Court in the

                                         -10-
      District of Utah occurred when Ms. Senninger was 46 years old. She
      was not a young woman. She was employed in a capacity with an
      educational institution, where she was entrusted with information as
      to the procedure used by students to obtain financial aid from the
      Federal Government. She had a special skill. Using that skill, she
      embezzled, misapplied, or obtained by fraud and false statement
      federal loan money.

             This offense occurred during Ms. Senninger’s sixth decade, her
      60’s. Again she is a mature woman. It involved a special skill. It
      involved the use of a special skill to defraud the Federal Government
      by getting money ostensibly for a third party but ultimately resulting
      in her benefit, too. It’s very similar. It’s hard to imagine a more
      similar offense that’s not identical.

Senninger does not challenge the district court’s finding that the convictions are

similar. Because the Guidelines themselves specifically permit the exact

approach taken by the district court, we must reject Senninger’s argument that the

court erred by using her stale sentence as a basis for a § 4A1.3 upward departure.

      Senninger’s final challenge is to the amount of restitution ordered by the

district court pursuant to the Mandatory Victims Restitution Act (“MVRA”). See

18 U.S.C. § 3663. “We review the district court’s application of the MVRA de

novo, review its factual findings for clear error, and review the amount of

restitution awarded for abuse of discretion.” United States v. Gallant, 537 F.3d
1202, 1247 (10th Cir. 2008). Senninger’s argument is two-pronged. She first

asserts the amount of restitution is limited to the losses stemming solely from the

counts of which she was convicted and not any counts of which she was

acquitted. Cf. Hughey v. United States, 495 U.S. 411, 418 (1990) (interpreting

                                        -11-
the restitution provision of the Victim and Witness Protection Act of 1982). She

then repeats the argument that the loss attributable to her actions is limited to the

net of the changes she personally made to the questionnaires.

      The district court properly rejected both of Senninger’s arguments. As the

court recognized, by convicting Senninger of six counts of mail fraud and one

count of making a false claim against the Government, the jury necessarily found

she participated in the overall scheme to defraud the IRS and the CDR. Thus, the

district court was not limited to considering only the refunds paid by the IRS and

the CDR as a result of the conduct specifically enumerated in Counts 3-7, 10, and

19. 18 U.S.C. § 3663A(a)(2) (defining victim as “a person directly and

proximately harmed as a result of the commission of an offense for which

restitution may be ordered including, in the case of an offense that involves as an

element a scheme, conspiracy, or pattern of criminal activity, any person directly

harmed by the defendant’s criminal conduct in the course of the scheme,

conspiracy, or pattern); United States v. Gregoire, 638 F.3d 962, 972-73 (8th Cir.

2011) (“Restitution may be ordered for criminal conduct that is part of a broad

scheme to defraud, without regard to whether the defendant is convicted for each

fraudulent act in the scheme.” (quotation and alteration omitted)). Accordingly,

the district court did not err by ordering restitution for all actual losses suffered

by the IRS and the CDR arising from the entire scheme. For the same reasons we

rejected Senninger’s loss-calculation challenge to her advisory guidelines range,

                                          -12-
we also reject her second argument that she was only responsible for a fraction of

the losses suffered by the IRS and the CDR because her criminal conduct was

limited to making minor alterations to the refunds claimed on the amended

returns.

IV.   Conclusion

      Senninger’s sentence is affirmed.

                                               ENTERED FOR THE COURT

                                               Michael R. Murphy
                                               Circuit Judge

                                        -13-