Court Opinion

ID: 179758
Source: CourtListenerOpinion
Date Created: 2010-11-23 17:46:49+00
Date Added: 2024-06-11T17:25:49.561496
License: Public Domain

NOT PRECEDENTIAL

                   UNITED STATES COURT OF APPEALS
                        FOR THE THIRD CIRCUIT
                            _______________

                                 No. 09-4507
                               _______________

                        UNITED STATES OF AMERICA

                                       v.

                             SARA MARIE SMITH
                                also known as
                                 Sally Smith

                                         Sara Marie Smith,
                                               Appellant
                               _______________

                 On Appeal from the United States District Court
                    For the Middle District of Pennsylvania
                 (D.C. Criminal Action No. 4-08-cr-00092-001)
                  District Judge: Honorable John E. Jones, III
                               _______________

                   Submitted Under Third Circuit LAR 34.1(a)
                              November 17, 2010
                              _______________

          Before: AMBRO, FISHER, and GREENBERG, Circuit Judges

                       (Opinion filed November 23, 2010 )
                                 _______________

                                  OPINION
                               _______________

AMBRO, Circuit Judge
       Sara Marie Smith pled guilty to one count of bank fraud, 18 U.S.C. § 1344, and

the District Court sentenced her to 63 months‟ imprisonment. Smith appeals that

sentence, arguing that the District Court erred when it enhanced her base offense level

under § 3B1.3 of the United States Sentencing Guidelines by two levels based on its

conclusion that she abused a position of trust in the course of committing the offense.1

We affirm.

                                   I.     Background

       Smith was employed as a bookkeeper and office manager for a car dealership,

Clark Motor Company (“CMC”), where she was responsible for the daily administration

of CMC‟s finances, including its “floor plan line of credit loan” and business checking

account. Smith used the former to finance the purchase of vehicles for re-sale; thus, to

purchase new inventory, she would first obtain funds from the floor plan line of credit,

and then transfer these funds to CMC‟s business checking account.

       Between November 2005 and January 2007, Smith fraudulently drew from the

floor plan line of credit about $9 million in advances for vehicles that CMC never

purchased. She then re-submitted some of this money back to M&T Bank, which

administered the line of credit, in order to prevent detection of the scheme. However,

Smith did not resubmit all of the money, and M&T Bank ultimately incurred a loss of

$1,580,173.50. Additionally, Smith wrote $59,452.37 in fraudulent checks to herself and

1
  The District Court had subject matter jurisdiction under 18 U.S.C. § 3231. We have
jurisdiction under 18 U.S.C. § 3742 and 28 U.S.C. § 1291.
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to the consumer loan companies from which she and her husband had obtained personal

auto loans. These funds were drawn on CMC‟s accounts.

       After Smith pled guilty, the probation office completed a presentence report

(“PSR”) that recommended, in relevant part, that Smith‟s sentence be enhanced by two

levels because she had abused a position of trust in a manner that significantly facilitated

the commission or concealment of the offense. Smith objected to this portion of the PSR,

and argued that it was not her bookkeeper position that enabled her to commit the fraud,

but rather that her supervisors at CMC had failed to exercise appropriate oversight over

her activities. The District Court rejected this argument, reasoning that, even if CMC

“placed misguided trust in Smith,” the position-of-trust enhancement was still appropriate

because she accomplished the fraud in her role as bookkeeper.

                                     II.    Discussion

       Smith contends that, as a bookkeeper, she did not occupy a position of trust as

contemplated by U.S.S.G. § 3B1.3.2 We review the District Court‟s conclusion to the

contrary de novo. United States v. Dullum, 560 F.3d 133, 140 (3d Cir. 2009).

       To determine whether a defendant is in a position of trust for sentence

enhancement purposes, we consider “(1) whether the position allows the defendant to

commit a difficult-to-detect wrong; (2) the degree of authority which the position vests in

the defendant vis-à-vis the object of the wrongful act; and (3) whether there has been

reliance on the integrity of the person occupying the position.” United States v. Pardo,

2
 In relevant part, U.S.S.G. § 3B1.3 states that “[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, increase by 2 levels.”
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25 F.3d 1187, 1192 (3d Cir. 1994). Further, “[t]hese factors should be considered in light

of the guiding rationale of the section—to punish „insiders‟ who abuse their positions

rather than those who take advantage of an available opportunity.” Id.

       On appeal, Smith makes two closely related arguments: first, that her fraud was

not “difficult to detect,” and thus the only reason it was not detected was her manger‟s

inattention; and second, that she did not possess substantial discretion as to the

administration of CMC‟s various accounts, nor did she owe CMC a fiduciary duty.

They fail.

       First, it does not help Smith that her fraud was rendered “difficult to detect”

because she was not closely supervised. To the contrary, the relevant inquiry is neither

whether the wrong was difficult to detect in any objective sense, nor whether a different

employer would have found it easy to detect. Instead, it is whether the “real scope” of

Smith‟s job—including the de facto level of supervision that she received—made it easy

for her to conceal her fraudulent conduct. United States v. Thomas, 315 F.3d 190, 204

(3d Cir. 2002) (health aide occupied position of trust vis-à-vis client because client “did

not monitor Thomas closely and appeared to rely on her judgment and integrity”); see

also United States v. Lofink, 564 F.3d 232, 242 n.20 (3d Cir. 2009) (defendant was in a

“de facto position of trust” because his employer delegated responsibility to him and did

not scrutinize his decisions). Applying that standard, it is apparent that if Smith‟s

supervisors largely left her to her own devices, that works against Smith‟s position, not in

favor of it.

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       Second, Smith argues that the position-of-trust enhancement does not apply to her

because she “occupied a purely ministerial position with [CMC] as opposed to a fiduciary

position.” However, our cases have never indicated that the position-of-trust

enhancement applies only to fiduciaries. To the contrary, our cases state only that “one

has been placed in a position of trust when, by virtue of the authority conferred by the

employer and the lack of controls imposed on that authority, he is able to commit an

offense that is not readily discoverable.” United States v. Craddock, 993 F.2d 338, 342

(3d Cir. 1993) (teller responsible for paying out Western Union orders was in position of

trust because crime exploited the fact that employer had delegated to tellers authority to

verify identity of those requesting payouts). And, for the reasons outlined above, it is

readily apparent here that CMC delegated to Smith the authority to obtain loans for

vehicle purchases and to issue checks, and placed no external controls on that authority.

       Accordingly, the District Court did not err in concluding that the abuse-of-

position-of-trust enhancement applied to Smith.

                                     *   *   *    *   *

       For these reasons, we affirm the sentence imposed by the District Court.

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