U.S. v. Forchette, 02-CR-37.

• Decision Date: 05 September 2002
• Docket Number: No. 02-CR-37.,02-CR-37.
• Citation: 220 F.Supp.2d 914
• Parties: UNITED STATES of America, Plaintiff, v. John FORCHETTE, Defendant.
• Court: U.S. District Court — Eastern District of Wisconsin

220 F.Supp.2d 914

UNITED STATES of America, Plaintiff, v. John FORCHETTE, Defendant.

No. 02-CR-37.

United States District Court, E.D. Wisconsin.

September 5, 2002.

COPYRIGHT MATERIAL OMITTED

Matthew L. Jacobs, Milwaukee, WI, for plaintiff.

Thomas E. Brown, for defendant.

MEMORANDUM

ADELMAN, District Judge.

I. FACTS AND BACKGROUND

On February 12, 2002, a federal grand jury indicted Bruce Bennett, the claims manager of ATC Leasing ("ATC"), a Kenosha, Wisconsin trucking company, and defendant John Forchette. The indictment alleged that Bennett defrauded ATC out of about $750,000 by creating phony accident claims and pocketing the proceeds, and that Forchette participated in the scheme by recruiting individuals to cash fraudulent checks generated by Bennett and by forging the signature of payees and negotiating checks himself.

Bennett pled guilty, but Forchette proceeded to trial. At trial, Forchette testified that Bennett, a longtime friend, asked him if he could recruit individuals to cash settlement checks for accident victims who were illegal aliens and had no bank accounts. Bennett indicated that he could settle these claims more quickly if he could provide the proceeds in cash. He stated that he would list the name of the person Forchette recruited on the check as a relative or friend of the accident victim. The recruited individual would then deposit the settlement check into his or her bank account, withdraw the cash and return it to Forchette, less a $500 payment. Forchette would also receive a $500 payment and then turn the balance of the cash over to Bennett, who would give it to the victim.

Forchette, who was the plant manger at a Chicago factory that employed many Hispanics, agreed and proceeded to inquire of employees if they wanted to cash a check in exchange for a fee. If the employee agreed, Forchette would give his or her name to Bennett, who would issue a check in the employee's name and give it to Forchette, who in turn would give it to the employee to cash. Between January and May 2001, Forchette recruited twelve employees to cash checks generated by Bennett in the total amount of $244,000. Forchette testified that he received $500 per check.

In June 2001, Forchette gave Bennett the name of an employee whom he believed had agreed to cash a check. However, when Forchette approached the employee with the check she declined to cash it. Forchette then forged the name of the employee and deposited the check into his own bank account, withdrew the money, paid himself between $500 and $1500, and returned the balance to Bennett. Forchette negotiated twenty-two additional checks in similar fashion.

At trial, Forchette admitted to the above-described conduct. However, he denied knowing that Bennett was pocketing the money that Forchette returned to him. He testified that he believed that the checks constituted the proceeds of real accident claims, and that he was helping illegal alien accident victims while making a little money for himself and the employees he recruited. He stated that he would never have engaged in such conduct had he known that Bennett was simply stealing from his employer.

The jury convicted Forchette of five counts of interstate transportation of securities obtained by fraud based on the checks he took from Wisconsin to Illinois to be cashed by others, and five counts of bank fraud based on the forged checks he negotiated at his bank. I entered judgment on the verdict, and a pre-sentence report (PSR) was prepared. Because the 2000 edition of the United States Sentencing Guidelines Manual was more favorable to Forchette than the 2001 edition, the report was based on the earlier version.

Forchette's base offense level under U.S.S.G. § 2F1.1, the fraud guideline, was six. The "amount of loss" was determined to be $464,300, based on $244,000 in checks cashed by individuals he recruited and $220,300 in checks that he negotiated, resulting in an increase of nine levels under the loss table in § 2F1.1. The PSR added two levels under U.S.S.G. § 2F1.1(b)(2)(A) because the offense involved "more than minimal planning" and four levels under § 3B1.1(b) because defendant was an "organizer or leader" of criminal activity involving five or more participants. Because he went to trial, he was not awarded a reduction for acceptance of responsibility under § 3E1.1. Thus, his offense level was determined to be 21. Because Forchette had no prior record his criminal history category was I, producing an imprisonment range of thirty-seven to forty-six months.

Forchette filed objections to the PSR. He argued that he should not receive enhancements for more than minimal planning or for being a leader or organizer, and that he should receive a two level reduction for acceptance of responsibility. After reviewing the PSR and the objections, I advised the parties that I was considering a downward departure under U.S.S.G. § 2F1.1 cmt. n. 8(b) & 11 based on the amount of loss significantly over-stating the seriousness of defendant's conduct. After hearing argument, I concluded that defendant should not receive the four level enhancement for role in the offense but overruled his other objections. I also concluded that a two level downward departure was warranted. With an adjusted offense level of 15, I sentenced defendant to eighteen months in prison, followed by five years of supervised release, a special assessment of $1000 and restitution in the amount of $464,300, joint and several with Bennett.

In this memorandum I set forth the bases for my decision.

II. DISCUSSION

A. Defendant's Objections to the PSR

1. More Than Minimal Planning

The first issue was whether defendant should receive a two level enhancement under U.S.S.G. § 2F1.1(b)(2)(A) for "more than minimal planning." Defendant noted that this enhancement was abolished in the 2001 guidelines. He then argued that the enhancement was not warranted here because his scheme was not more complex than the typical fraud case.

Section 2F1.1(b)(2) states: "If the offense involved (A) more than minimal planning ... increase by two levels." Defendant is correct that the enhancement does not exist under the 2001 fraud guideline, § 2B1.1. However, as the government correctly noted at sentencing, the enhancement has not really been abolished. Rather, in recognition of the fact that it was applied in more than eighty percent of fraud cases,¹ the Commission simply incorporated it into the § 2B1.1 loss table, obviating the need for judicial fact-finding and avoiding the potential overlap with the "use of sophisticated means" enhancement. United States Sentencing Commission Guidelines Manual Supplement to Appendix C 181 (2001) (amendment 617). But because the 2000 guidelines applied, the enhancement was permitted here.

This enhancement may be applied if the defendant engaged in "`more planning than is typical for commission of the offense in a simple form,'" took "`significant affirmative steps ... to conceal the offense'" or engaged in "`repeated acts over a period of time, unless it is clear that each instance was purely opportune.'" United States v. Archuletta, 231 F.3d 682, 684 (10th Cir.2000) (quoting USSG § 1B1.1 cmt. n. 1(f)). These three definitions operate in the alternative. Thus, even if the defendant's scheme did not involve more planning than is typical, he may receive the enhancement if the crime involved repeated acts over a period of time that were not purely opportune. United States v. Doherty, 969 F.2d 425, 430 (7th Cir.1992); see also United States v. Mau, 45 F.3d 212, 214 (7th Cir.1995).

I concluded that the enhancement applied here because defendant's conduct involved repeated acts over a period of time that were not purely opportune. He received twelve fraudulent checks between January and May of 2001 and fraudulently endorsed twenty-two more checks between June and October of 2001. Cf. United States v. Rust, 976 F.2d 55, 57 (1st Cir. 1992) (holding that defendant's submission of twenty-three forged travel expense vouchers, although simple in execution, involved repeated acts over a several year period and could not be characterized as purely opportune).

2. Role in the Offense

Defendant next objected to being assessed a four level enhancement for role in the offense, arguing that he did not supervise the criminal conduct of others as required by U.S.S.G. § 3B1.1(b). Section 3B1.1(a) permits a four-level adjustment "[i]f the defendant was an organizer or leader of a criminal activity that involved five or more participants or was otherwise extensive." Pursuant to application note 4 of § 3B1.1,

Factors the court should consider include the exercise of decision making authority, the nature of participation in the commission of the offense, the recruitment of accomplices, the claimed right to a larger share of the fruits of the crime, the degree of participation in planning or organizing the offense, the nature and scope of the illegal activity, and the degree of control and authority exercised over others. There can, of course, be more than one person who qualifies as a leader or organizer of a criminal association or conspiracy. This adjustment does not apply to a defendant who merely suggests committing the offense.

The court "weighs these factors `in light of the Guidelines' intent to punish with greater severity leaders and organizers of criminal activity.'" United States v. Mijangos, 240 F.3d 601, 604-05 (7th Cir.2001) (quoting United States v. Sierra, 188 F.3d 798, 804 (7th Cir.1999)). No single factor is essential. See United States v. Fones, 51 F.3d 663, 665 (7th Cir.1995).

Although the criminal activity here involved more than five participants, I concluded that the enhancement should not be imposed. First and most importantly, defendant did not exercise decision-making authority in the manner contemplated by the guidelines. As the ATC claims manager Bennett devised the scheme of generating false claims checks. In...