U.S.A. v. Young, 00-1098

• Citation: 266 F.3d 468
• Decision Date: 14 March 2001
• Docket Number: No. 00-1098,00-1098
• Parties: (6th Cir. 2001) United States of America, Plaintiff-Appellee, v. Randy Glenn Young, Defendant-Appellant. Argued:
• Court: United States Courts of Appeals. United States Court of Appeals (6th Circuit)

Page 468

266 F.3d 468 (6th Cir. 2001)

United States of America, Plaintiff-Appellee, v. Randy Glenn Young, Defendant-Appellant.

No. 00-1098

UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

Argued: March 14, 2001

Decided and Filed: September 20, 2001

Appeal from the United States District Court for the Western District of Michigan at Grand Rapids. No. 99-00033, Robert Holmes Bell, Chief District Judge. [Copyrighted Material Omitted] Timothy P. VerHey, ASSISTANT UNITED STATES ATTORNEY, Grand Rapids, Michigan, for Appellee.

Charles E. Chamberlain, Jr., Julie F. Thelen, WILLEY & CHAMBERLAIN, Grand Rapids, Michigan, for Appellant.

Before: NORRIS and DAUGHTREY, Circuit Judges; ZATKOFF, Chief District Judge.^*

OPINION

LAWRENCE P. ZATKOFF, Chief District Judge.

Randy Glenn Young (hereinafter "Defendant") appeals his sentence pursuant to 18 U.S.C. § 3742(a) and 28 U.S.C. § 1291. Defendant pleaded guilty to two counts of embezzlement in violation of 18 U.S.C. § 666(a)(1)(A) and one count of engaging in a monetary transaction in property derived from specified unlawful activity in violation of 18 U.S.C. § 1957. The sentencing court affirmed the application of a two level enhancement to the offense levels of both the embezzlement counts and the money laundering count because Defendant abused a position of trust. See U.S. Sentencing Guidelines Manual § 3B1.3. It is Defendant's position on appeal that the district court improperly enhanced the money laundering offense level for abuse of position of trust. Defendant also maintains that enhancing the money laundering offense level by two because he knew the funds at issue were proceeds of a specified unlawful activity, see U.S. Sentencing Guidelines Manual § 2S1.2(b)(1)(B), and applying a two level enhancement for abuse of position of trust, impermissibly employs the same conduct (embezzlement) as the basis for two separate enhancements to Defendant's sentence.

For the reasons set forth below, we AFFIRM the decision of the district court.

I. BACKGROUND

A. Offense Conduct

Defendant was employed by the City of Newaygo, Michigan as the city manager from September 1988 to July 1995. Defendant's duties included managing and coordinating the activities of the city departments, supervising department heads, managing all city-owned or operated facilities, developing long range plans, coordinating all planning and zoning activities, and performing operational evaluations. Defendant also had significant responsibility and control over the development and implementation of the City's budget -- developing and creating a budget document consisting of numerous funds and subsequently reviewing that document with the budget committee and other governing boards. Further, Defendant was responsible for community and economic development for the City of Newaygo, which included management of special projects such as public utility expansion, infrastructure improvements, and building and other construction projects. During Defendant's tenure as city manager, the City of Newaygo received $7,026,524 in federal grants for seven projects in which Defendant was directly involved.

In the fall of 1991, Defendant created a company styled Michigan Engineering Resources (hereinafter "MER"). On November 22, 1994, Defendant applied for a business registration certificate for another business titled Certco Services (hereinafter "Certco"). Defendant opened a bank account for each business and obtained a post office box for each business in Grand Rapids, Michigan. Defendant's creation and ownership of these two companies was not known by any other city official. It was through these two companies that Defendant perpetrated his fraud on the City of Newaygo.

To obtain money from the City of Newaygo, Defendant created and submitted fraudulent business invoices from MER and Certco to the City for services that were never rendered. The invoices noted associations with non-existent engineering firms and described various types of professional services that were either unnecessary and never performed or were performed by legitimate businesses that were also paid by the City. Defendant had a penchant for invoicing larger projects because he realized there would be minimum scrutiny by city council.

All invoices were sent through the United States Mail to the city offices of Newaygo, where the city clerk separated the mail and forwarded the invoices to the city treasurer to begin the accounts payable process. The invoices were then forwarded to Defendant for approval, then to the city council for final approval. During Defendant's tenure as city manager, the city council rarely questioned the legitimacy of the invoices; it never questioned invoices for MER and Certco. The City of Newaygo paid MER a total of $1,242,205 during the period from December 1991 through June 1995 for services that were never performed. During the period from December 1994 through August 1995, Certco submitted invoices to the City of Newaygo for which it was paid a total of $620,155. According to records, from November 20, 1991 through August 1, 1995, thirty-seven checks were prepared by the City of Newaygo which were made payable to either MER or Certco.

After the invoices were approved by Defendant and the city council, checks from the City were sent to the post office box Defendant maintained on behalf of MER and Certco in Grand Rapids. Defendant obtained the city checks and deposited them into MER's and Certco's bank accounts. From 1991 to 1995, the checks from the City of Newaygo deposited into the bank accounts of the fraudulent businesses amounted to a total of $1,862,360. After placing the checks into the business accounts, Defendant would withdraw the money from the accounts and either deposit the embezzled proceeds into his personal bank account or spend the money on personal items such as residences, a carpet cleaning business, vehicles, a country club membership, a boat, furniture, and an audio/video system.

The current city manager for the City of Newaygo states that as a result of Defendant's embezzlement and money laundering activities, the City of Newaygo has $250,000 in accounts payable which it is unable to pay and was forced to cut $150,000 from its budget for this fiscal year. Further, it is alleged that Defendant's fraudulent conduct will continue to impact the City of Newaygo for several more years. B.Procedural History

On August 11, 1999, a federal grand jury for the Western District of Michigan returned a sixteen-count superseding indictment charging Defendant with committing various federal felony offenses.¹ On October 8, 1999, pursuant to a Rule 11 plea agreement, Defendant pleaded guilty to two counts of embezzlement in violation of 18 U.S.C. §666(a)(1)(A) and one count of engaging in a monetary transaction in property derived from specified unlawful activity in violation of 18 U.S.C. § 1957.² Defendant filed objections to the presentence investigation report (hereinafter "PSR") on January 7, 2000 and filed a sentencing memorandum on January 14, 2000. The district court imposed its sentence on January 21, 2000.

C. Sentencing Proceedings

The district court affirmed the PSR,³ which grouped both embezzlement counts pursuant to United States Sentencing Guideline (hereinafter "U.S.S.G.") § 3D1.2(d). The applicable sentencing guideline for the embezzlement offenses is U.S.S.G. § 2B1.1, while the applicable guideline for the money laundering offense is U.S.S.G. § 2S1.2. After grouping the embezzlement offenses, the PSR separately determined the adjusted offense level for each offense by applying the relevant specific offense characteristics and enhancements applicable to each according to the separate offense guidelines pursuant to U.S.S.G. § 1B1.1. The district court affirmed the application of a two level enhancement of the offense levels for both the embezzlement group and the money laundering count for Defendant's abuse of his position of trust as city manager pursuant to U.S.S.G. § 3B1.3.⁴ Defendant's money laundering offense level was further enhanced by two levels pursuant to the specific offense characteristic that Defendant knew the laundered funds were proceeds of the specified unlawful activity of embezzlement. See U.S. Sentencing Guidelines Manual §2S1.2(b)(1)(B).⁵ The embezzlement group and the money laundering count were subsequently grouped pursuant to U.S.S.G. § 3D1.2(b) because both offenses involved the same victim (the City of Newaygo) and several transactions which were connected by a common scheme or plan -- defrauding the City of Newaygo in order to embezzle city funds for personal expenditures. Defendant was sentenced in accordance with the higher money laundering adjusted offense level of twenty-four pursuant to U.S.S.G. § 3D1.3(a).⁶ The money laundering adjusted offense level was then reduced by three levels because Defendant accepted responsibility for his involvement in the offense and timely notified the Unites States Attorney's Office of his intent to plead guilty. See U.S. Sentencing Guidelines §§ 3E1.1(a), (b)(2). Therefore, Defendant's total offense level was calculated at twenty-one. Combined with Defendant's criminal history category of I, the Guideline range for the district court was thirty-seven to forty-six months. Defendant was ultimately sentenced to forty-two months imprisonment.

D. Dispute

It is Defendant's position on appeal that the district court improperly enhanced the money laundering offense level for abuse of position of trust pursuant to U.S.S.G. § 3B1.3. Defendant argues that while he may have abused his position of trust as city manager to embezzle the funds, see, e.g., United States v. Brown, 66 F.3d 124, 129 (6th Cir. 1995) (enhancing a city employee's embezzlement offense level for abuse of a position of trust), he did not utilize that position to facilitate the withdrawal of funds from the MER and Certco accounts which form the basis of the...