U.S. v. Pardo

• Decision Date: 25 May 1994
• Docket Number: No. 93-5104,93-5104
• Citation: 25 F.3d 1187
• Parties: UNITED STATES of America v. Juan PARDO, Appellant.
• Court: U.S. Court of Appeals — Third Circuit

Page 1187

25 F.3d 1187

UNITED STATES of America v. Juan PARDO, Appellant.

No. 93-5104.

United States Court of Appeals, Third Circuit.

Argued Jan. 19, 1994.

Decided May 25, 1994.

Barbara M. Donovan (argued) Asst. Federal Public Defender, Office of Federal Public Defender, Newark, NJ, for appellant.

Michael Chertoff, U.S. Atty. and Edna B. Axelrod, and Eric L. Muller (argued), Asst. U.S. Attys., Office of U.S. Atty., Newark, NJ, for appellee.

Before: SLOVITER, Chief Judge, SCIRICA and LEWIS, Circuit Judges.

OPINION OF THE COURT

SLOVITER, Chief Judge.

Appellant Juan Pardo challenges on four grounds his sentence imposed after a guilty plea to single counts of bank and wire fraud and a count of failure to appear. Two grounds are set forth in his counselled brief,

and two others appear in a supplemental pro se filing. Although we reject most of Pardo's arguments, we agree that the district court misapplied United States Sentencing Guideline Sec. 3B1.3 when it determined that Pardo's friendship with a bank manager constituted a position of trust that facilitated his defrauding the bank. See United States Sentencing Commission, Guidelines Manual, Sec. 3B1.3 (1993) [hereinafter USSG]. We will therefore vacate the judgment of sentence and remand for resentencing.

I. FACTS AND PROCEDURAL HISTORY

There is no dispute about the relevant facts in this case. Juan Pardo engaged in a classic check kiting scheme in which he defrauded First Fidelity Bank out of more than $51,000, in violation of 18 U.S.C. Sec. 1344 (Supp. IV 1992) (bank fraud) and 18 U.S.C. Sec. 2 (1988), and defrauded numerous clients in excess of $204,000 by collecting loan application and processing fees for loans that they never received, in violation of 18 U.S.C. Sec. 1343 (Supp. IV 1992) (wire fraud) and 18 U.S.C. Sec. 2 (1988). Shortly after his initial arraignment, Pardo fled to Canada where he remained for several weeks, and thus failed to appear in violation of 18 U.S.C. Secs. 3146(a) and 2 (1988).

A. The Check Kiting Scheme

Shortly before the incident which was the subject of the bank fraud charge in this indictment, Pardo engaged in another check kiting scheme at the Guttenberg, New Jersey branch of First Fidelity Bank which caused First Fidelity a loss of $7,324.39. Although it was never reimbursed for this loss, First Fidelity declined to prosecute Pardo. The bank, however, did report Pardo's illegal conduct to Chex Systems as a security measure.

On October 1, 1991, notwithstanding his earlier fraud on First Fidelity, Pardo opened an account at the Ridgefield Park branch of First Fidelity under the name of SJF Funding Corporation, the same corporation he used in the earlier fraud. The usual bank practice required a background check, which would have revealed Pardo's prior fraud on First Federal itself, but that routine was not followed by Brigit Schumann, the branch manager, who had been a personal friend of Pardo's wife for ten years and was a bridesmaid at the Pardos' wedding. The record is silent as to whether Pardo said anything to induce Schumann's failure to take precautions, or whether she was just negligent.

Between October 4 and October 15, 1991, Pardo deposited five checks into the First Fidelity account totalling $232,000 which had been drawn on accounts Pardo had at other banks, and which were uncollectible. Nonetheless, almost immediately after depositing these checks, Pardo began to write checks against those deposits on his First Fidelity account, and by October 23, 1991, he had withdrawn a total of $76,771.86. When Schumann became aware of Pardo's conduct and confronted his wife, she received assurances that Pardo would reimburse the bank for the fraudulently obtained funds. Later, Frank Amato, an associate of Pardo, wired $25,000 back to the bank. First Fidelity received no additional reimbursement and its total loss due to this second check kiting scheme is $51,771.86.

B. The Loan Fraud Scheme

In the Spring of 1991, Pardo became the North American representative of Siam Commercial Finance S.A., a company based in Bangkok, Thailand. His function was to locate customers seeking loans from several hundred thousand to several million dollars, and he received in excess of $204,000 as loan application fees, servicing fees and pre-commitment fees from at least fourteen individual and corporate clients. Neither he nor SJF Funding successfully placed a single loan with Siam through at least March 1992, the month before he was indicted. Although Pardo later claimed he was unaware of Siam's fraudulent activities, he did not deny that he altered checks that he received in these transactions nor that he deposited them in his personal account.

C. Failure to Appear

Following his arrest, Pardo was released on bail. Thereafter, the government sought On September 30, 1992, Pardo pled guilty to Counts 2 (bank fraud), 16 (wire fraud) and 47 (failure to appear) of the indictment pursuant to a plea agreement reached with the government. On February 8, 1993, the district court sentenced Pardo. The court determined that Pardo's total offense level was 18, based in part on its application of a two-level decrease for acceptance of responsibility (USSG Sec. 3E1.1) and a two-level increase for abuse of a position of trust (USSG Sec. 3B1.3). The court calculated Pardo's criminal history level as II, based in part on his conviction on a disorderly persons charge in state court for which he had not yet been sentenced. The court then sentenced Pardo to 37 months imprisonment (31 months on Counts 2 and 16, followed by a consecutive six-month term on Count 47) and to four years of supervised release, and ordered him to pay $39,135.93 in restitution and $150 in special assessments. Pardo filed a timely appeal on February 16, 1993. Pardo moved and was given permission to file a pro se supplemental brief. We have jurisdiction pursuant to 18 U.S.C. Sec. 3742(a) (1988) and 28 U.S.C. Sec. 1291 (1988).

his detention because it had learned of other activities by Pardo and was seeking a superseding indictment concerning additional charges of bank and wire fraud. On Friday, May 8, 1992, the district court ordered a second hearing to be held on the following Monday, May 11, 1992. Pardo fled to Canada over that intervening weekend. He was arrested on June 22, 1992, the date that the trial on the original charges was to begin, when he tried to reenter the United States near Richford, Vermont.

II. DISCUSSION

We first consider Pardo's claim that the district court misapplied Sentencing Guideline Sec. 3B1.3. That section, which authorizes a two-level enhancement for abuse of a position of trust, provides:

If 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.

USSG Sec. 3B1.3. The only commentary relating to the abuse of a position of trust enhancement appears in Application Note 1. For the period relevant here, the Application Note was quite terse. It provided merely that:

The position of trust must have contributed in some substantial way to facilitating the crime and not merely have provided an opportunity that could as easily have been afforded to other persons. This adjustment, for example, would not apply to an embezzlement by an ordinary bank teller.

USSG Sec. 3B1.3, comment. (n. 1) (1992).

On November 1, 1993, an amendment to the Application Note became effective. To the extent that the new Commentary sheds any light on the nature of the relationships to which Sec. 3B1.3 applies, we note that it refers exclusively to employment or professional relationships, such as embezzlement by guardians, bank executives, bank tellers, and attorneys, and sexual abuse of patients by physicians.

The classic cases in this circuit in which we found abuse of a position of trust fall within these categories. See United States v. Craddock, 993 F.2d 338 (3d Cir.1993) (enhancement for abuse of position of trust applicable to teller of financial institution who processed Western Union money orders knowing they were based on fraudulent credit card transactions); United States v. Brann, 990 F.2d 98 (3d Cir.1993) (enhancement applied to narcotics agent who embezzled government-provided funds by engaging in phony drug transactions and pocketing the money); United States v. Lieberman, 971 F.2d 989, 992-94 (3d Cir.1992) (reversing failure to enhance for bank vice president); United States v. Georgiadis, 933 F.2d 1219, 1225 (3d Cir.1991), (affirming district court's application of enhancement to assistant bank president who diverted funds to own account); United States v. McMillen, 917 F.2d 773, 775-76 (3d Cir.1990) (branch manager operating a position of trust).

Nonetheless, we are unwilling to draw a bright line limiting the abuse of trust In United States v. Zamarripa, 905 F.2d 337 (10th Cir.1990), defendant, a friend of the family of an eight-year-old girl whom he sexually abused while serving as her babysitter, was given a two-level enhancement. The Court of Appeals concluded that Zamarripa's position as babysitter was one of trust, which he had abused to facilitate his crime, and that therefore enhancement of his sentence in accordance with Sec. 3B1.3 was appropriate. See also United States v. Ellis, 935 F.2d 385, 395 n. 9 (1st Cir.) (district court found abuse of a position of trust by defendant's sexual abuse of young daughter of his common law wife), cert. denied, --- U.S. ----, 112 S.Ct. 201, 116 L.Ed.2d 160 (1991). We approvingly cited Zamarripa in Craddock, 993 F.2d at 343 n. 7.

                increase to the employment relationship.  Neither the Guideline itself nor the Application Note that follows expressly limits its application to employment positions.  In fact, other courts of appeals have found positions of trust outside the traditional employment context. 1  In United States v. Ledesma, 979 F.2d 816, 822 (11th Cir.1992), the Court of Appeals

...