U.S. v. Geevers

• Decision Date: 10 March 2000
• Citation: 226 F.3d 186
• Parties: (3rd Cir. 2000) UNITED STATES OF AMERICA, v. MARTIN GEEVERS, Appellant NO. 99-5155 Argued:
• Court: U.S. Court of Appeals — Third Circuit

Page 186

226 F.3d 186 (3rd Cir. 2000)

UNITED STATES OF AMERICA, v. MARTIN GEEVERS, Appellant

NO. 99-5155

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

Argued: March 10, 2000

Filed August 18, 2000

On Appeal From the United States District Court For the District of New Jersey District Judge: Honorable Mary Little Cooper

Counsel for Appellant: MARK A. BERMAN, ESQUIRE (ARGUED) Gibbons, Del Deo, Dolan, Griffinger & Vecchione One Riverfront Plaza Newark, NJ 07102

Counsel for Appellee: ROBERT J. CLEARY, ESQUIRE United States Attorney GEORGE S. LEONE, ESQUIRE (ARGUED) Assistant United States Attorney LEWIS S. BORINSKY, ESQUIRE Assistant United States Attorney 970 Broad Street Newark, NJ 07102-2535

Before: BECKER, Chief Judge, NYGAARD and GARWOOD,^* Circuit Judges.

OPINION FOR THE COURT

BECKER, Chief Judge.

The appeal of Martin Geevers, who pleaded guilty to one count of bank fraud arising out of a check kiting scheme, requires us to determine once again when application of the Sentencing Guidelines may result in the imposition of a sentence on the basis of intended loss when the actual loss was significantly less. Geevers argues that because a passer of worthless checks could not possibly abscond with the full face amount of his worthless deposits, the District Court erred in calculating his intended loss under a "worst case" scenario. Though Geevers's argument possesses strong intuitive appeal, we will uphold the District Court's full face amount finding.

We base our conclusion on three separate considerations. First, we note that there is a distinction between intending a loss and expecting a loss. While we agree that Geevers may not have reasonably expected to extract the full face value of his fraudulent checks from the banks, it does not necessarily follow that he did not intend to extract every cent possible. Second, the commentary to S 2F1.1 makes clear that losses "need not be determined with precision." U.S.S.G. S 2F1.1 Application Note 9. A district court is therefore not barred from considering the full amount of the fraudulent checks to be the intended loss although that figure may overstate the actual intended figure. Finally, our precedent allows some limited burden shifting in the proving of intended loss under the guidelines. We have previously recognized that though the government bears the burden of proof in guidelines cases, the burden of production may shift to the defendant once the government presents prima facie evidence of a given loss figure. See United States v. Evans, 155 F.3d 245, 253 (3d Cir. 1998). Under this regime, intended loss does not equal the face value of the deposited checks as a matter of law. Rather, a defendant is free to proffer evidence about his or her true intentions in order to rebut the presumption that his or her fraudulent deposits may create. A district court does not, however, commit error when, in the absence of sufficient evidence to the contrary, it fixes the guidelines range based upon a presumption that the defendant intended to defraud the banks of the full face amount of the worthless checks.

Geevers also contends that if the District Court correctly calculated the intended loss figure from his check passing activities, he still should have received a three-level reduction in his guidelines calculation because he had not completed his attempt. This argument raises questions about the interpretation of U.S.S.G. S 2X1.1 and its relation to the guideline on intended loss, but we reject Geevers's contention. The guideline clearly precludes granting a downward departure in situations in which the attempted conduct was prevented solely through the intervention of the victim or law enforcement. Because such is the case here, we conclude that Geevers is ineligible for the downward departure.

I.

Pursuant to a plea agreement, Geevers pleaded guilty to a violation of 18 U.S.C. S 1344 (bank fraud) for opening a bank account at Bankers Savings bank in Woodbridge, New Jersey, with a $75,000 check drawn on a closed account at Merrill Lynch. Merrill Lynch advised Bankers Savings that the check was not covered by sufficient funds, and Bankers Savings closed Geevers's account before he attempted to draw any funds on the account. Though this transaction produced no loss to the involved banks, it was just one of many attempts by Geevers to profit by fraudulently inflating bank balances. Between 1996 and 1997, according to the Presentence Investigation Report ("PSI"), Geevers repeatedly opened accounts in various banks by depositing checks from closed accounts or accounts with insufficient funds and then attempted to withdraw or transfer a portion of the deposited funds before the victim banks realized that the funds were not backed.

All told, including both offense conduct and relevant conduct recounted in the PSI, Geevers deposited or sought to cash checks with face values approximating $2,000,000 in total. Prior to his apprehension, he attempted to withdraw or transfer about $400,000. He actually managed to withdraw or transfer over $160,000. The PSI also included as relevant conduct the losses arising from a fraudulent real estate scheme he perpetrated several years earlier.

The parties agreed that the sentence would be calculated under U.S.S.G. S 2F1.1, which is the guideline covering offenses of fraud or deceit.¹ For purposes of calculating the sentence, the government argued that the loss amount relevant for sentencing should be the total face value of Geevers's deposited checks, which is the potential loss. Geevers maintained that he did not intend to cause the full amount of the potential loss because he could not have successfully withdrawn those funds even if he had wanted to. In the alternative, he maintained that because he did not complete the acts necessary to effect that loss, he was at least entitled to a three-level reduction of his offense score under S 2X1.1, the guideline pertaining to attempts.

The District Court disagreed and adopted a loss figure of $2,188,575 and rejected the downward adjustment under S 2X1.1. Geevers's base offense level under U.S.S.G. S 2F1.1 of 6 was therefore increased by 12 levels for a loss in excess of $1.5 million and also by 2 levels for more than minimum planning. It was then reduced 3 levels for acceptance of responsibility under S 3E1.1. The resulting offense level of 17 carried an imprisonment range between 30 and 37 months, and the District Court imposed a sentence in the middle of the range--33 months.

We have jurisdiction to review Geevers's claim that the District Court incorrectly applied the sentencing guidelines under 18 U.S.C. S 3742(a)(2). See United States v. Shoupe, 988 F.2d 440, 444 (3d Cir. 1993). Our review of the District Court's interpretation and application of the guidelines is plenary, but where the District Court's application is based on factual conclusions, we will reverse only if its conclusion is clearly erroneous. See United States v. Hallman, 23 F.3d 821, 823 (3d Cir. 1994).

II.

We first consider the question whether the District Court erred in considering the face amount of Geevers's fraudulent checks in determining the intended loss of his scheme under S 2F1.1.² The section establishes a base offense level of 6 for crimes involving fraud or deceit, and sets forth a range of possible increases tied to the amount of loss that the crime involved. The commentary to the guidelines, which is binding, see Stinson v. United States, 508 U.S. 36, 38 (1993), explains that a sentencing court is to consider intended loss in determining the loss figure. "Consistent with the provisions of S 2X1.1 (Attempt, Solicitation, or Conspiracy), if an intended loss that the defendant was attempting to inflict can be determined, this figure will be used if it is greater than the actual loss." U.S.S.G. S 2F1.1 Application Note 8. Note 9 explains that "the loss need not be determined with precision. The court need only make a reasonable estimate of the loss, given the available information."

At his sentencing hearing, Geevers contended that the face amount of the deposited checks cannot be the figure employed in sentencing because no reasonable check kiter would think that he or she could get away with withdrawing the full face amount of the checks. Pointing to the difficulty of calculating a more precise figure of intended loss, the District Court rejected Geevers's argument.

I think I grasp your argument, but I find it difficult to ascertain how a Court would be able to determine what the intended loss was in a check kiting scheme, except to take the defendant at his actions, which is to count the full amount of any fraudulent checks from the time that the fraudulent check is deposited. I mean, there's no rule of thumb that the Court can come up with and say well, your typical check kiter is only going to net 5 percent or 15 percent of what he's deposited by way of phoney checks. And really that's what you're asking the Court to try to figure out.

App. 58.

Geevers renews this argument on appeal. His argument can be broken into two related contentions: 1. The government has not proved that he intended to take the face value of the false checks; and 2. He could not have possibly taken that much, and the intended amount should therefore not reflect an impossible amount. We will consider these contentions in turn, but first we pause to address the import of United States v. Torres, 209 F.3d 308 (3d Cir. 2000), filed after oral argument in this case.

A.

In Torres, the defendant, posing as another individual, opened a money market account at a bank with the deposit of a worthless third-party check in the value of $240.65. On the same day, another party to the conspiracy, using the same false name, deposited a stolen U.S. Treasury check in the amount of $66,021.94 in the same account. The defendant was arrested after attempting to withdraw $24,900 from the account and was convicted of one count...