U.S. v. Lieberman, 91-5687

• Decision Date: 24 July 1992
• Docket Number: No. 91-5687,91-5687
• Parties: UNITED STATES of America, Appellant, v. Arthur LIEBERMAN.
• Court: U.S. Court of Appeals — Third Circuit

Page 989

971 F.2d 989

UNITED STATES of America, Appellant, v. Arthur LIEBERMAN.

No. 91-5687.

United States Court of Appeals, Third Circuit.

Argued Jan. 30, 1992.

Decided July 24, 1992.

Michael Chertoff, U.S. Atty., Alain Leibman, Asst. U.S. Atty., Edna B. Axelrod (argued), Newark, N.J., for appellant.

Kim D. Ringler (argued), Hackensack, N.J., for appellee.

Before: SLOVITER, Chief Judge, MANSMANN, and HUTCHINSON, Circuit Judges.

OPINION OF THE COURT

SLOVITER, Chief Judge.

Appellee Arthur Lieberman pled guilty to one count of bank embezzlement and one count of attempted income tax evasion. The judgment of sentence imposed five years of probation on each count to be served concurrently, eight months of home detention, restitution of $128,442.37 plus interest, and a special assessment of $100. The court also ordered Lieberman to pay 10% of his gross weekly salary towards restitution to the bank and to file an amended tax return for the years affected by his embezzlement.

The government appeals, arguing that the district court erred in its application of the United States Sentencing Guidelines (U.S.S.G. or Guidelines) (1) in concluding that the two-level increase for "abuse of position of trust" under U.S.S.G. § 3B1.3 was inapplicable; (2) in providing an additional level of downward adjustment for what the court termed Lieberman's extraordinary degree of acceptance of responsibility; and (3) by departing downward for an "inappropriate manipulation of the indictment."

I. Facts and Procedural History

The facts are largely uncontested. ¹ Lieberman began working at the National Community Bank in Maywood, New Jersey in 1980 as a management trainee. He was promoted several times and became a vice president of the bank. One of Lieberman's duties was to balance the bank's suspense account, the account in which loan and fee payments received by the bank were placed pending transfer to other accounts. Lieberman admitted that he "proved the ending balance [of the suspense account] at the end of the month" and that no one else was watching the account.

Between late 1985 and January 1990, Lieberman engaged in approximately 36 separate transactions in which he transferred money from the bank's suspense account into his own checking account in amounts ranging from $1,000 to $7,500. During this period, Lieberman did not report the embezzled money on his tax returns.

In early 1990, Lieberman was confronted by bank officials concerning the improper transactions and immediately admitted his wrongdoing. He explained to managers of the bank how he was able to avoid detection of the transfers and resigned from his position as vice president on January 30, 1990. He went to the FBI to admit his embezzlement from the bank.

On January 17, 1991, Lieberman signed a plea agreement. Pursuant to this agreement, on May 2, 1991, Lieberman entered a plea of guilty to a two-count information charging him with bank embezzlement, in violation of 18 U.S.C. § 656 and 18 U.S.C. § 2, and attempted income tax evasion, in violation of 26 U.S.C. § 7201.

Although Lieberman pled guilty to a charge that he embezzled approximately $94,000, and the plea agreement stipulated that the loss to the bank was between $50,001 and $100,000, Lieberman entered into a consent judgment with the bank (which was duly executed by the Superior Court for Bergen County, New Jersey on May 24, 1991) whereby he agreed to pay the bank $128,442.37 along with pre-judgment interest in the amount of $11,967.04.

The presentence report prepared by the United States Probation Office under the Sentencing Guidelines determined that Lieberman's total offense level was thirteen. The Probation Office arrived at this figure by grouping the tax evasion and embezzlement counts under U.S.S.G. § 3D1.2; ² calculating the base offense level for bank embezzlement at four, U.S.S.G. § 2B1.1; increasing by seven levels because the amount of loss was approximately $94,000, U.S.S.G. § 2B1.1(b)(1); ³ increasing by two levels for more than minimal planning, U.S.S.G. § 2B1.1(b)(5); increasing by two levels for abuse of a position of trust, U.S.S.G. § 3B1.3; and decreasing by two levels for acceptance of responsibility, U.S.S.G. § 3E1.1(a).

Both the government and Lieberman objected to some elements of this calculation. The government objected to the grouping of the embezzlement and tax evasion counts. Lieberman objected to the two-level increase based on abuse of trust, and also contended that there were unusual circumstances regarding his acceptance of responsibility warranting a downward departure.

At the sentencing hearing on July 15, 1991, the district court sentenced Lieberman based on a total offense level of ten. The court deviated from the presentence report in three respects: (1) it ruled that the two-level increase for abuse of a position of trust provided in section 3B1.3 of the Guidelines was inapplicable; (2) it departed downward one level based on Lieberman's unusual degree of acceptance of responsibility; and (3) it ruled that the embezzlement charge and the tax evasion charge should not be grouped under U.S.S.G. § 3D1.2, which had the effect of increasing Lieberman's total offense level by two levels, but then it departed downward by two levels because of what it termed an "inappropriate manipulation of the indictment." The court accepted the other aspects of the Guidelines calculation contained in the presentence report.

We have jurisdiction over the government's appeal of Lieberman's sentence under 18 U.S.C. § 3742(b) (1988) and 28 U.S.C. § 1291 (1988).

II. Discussion

A. Abuse of Position of Trust

The government's contention that the district court erred in not increasing Lieberman's sentence by two levels for abuse of a position of trust implicates section 3B1.3 of the Sentencing Guidelines. This section provides, in relevant part:

If the defendant abused a position of public or private trust, or used a special skill, in a manner that significantly facilitated the commission or concealment of the offense, increase by 2 levels. This adjustment may not be employed if an abuse of trust or skill is included in the base offense level or specific offense characteristic.

U.S.S.G. § 3B1.3.

The district court concluded that section 3B1.3 was inapplicable because the "basic offense here is bank embezzlement, which by definition implies that one must be a bank employee or otherwise rightfully come into possession of the money which one takes wrongfully." App. at 41. The district court added that "[u]nder the facts of this case I cannot say that a special skill or abuse of position of trust was involved here, but rather by analogy, even though Mr. Lieberman was one of forty vice presidents in the bank, his actions in dealing with this particular account can best be analogized to that of an ordinary bank teller." Id.

We have previously held that the two-level increase for abuse of position of trust may be applied to the crime of bank embezzlement because abuse of position of trust is not "included in the base offense level or specific offense characteristic" applicable to bank embezzlement. See United States v. Georgiadis, 933 F.2d 1219, 1225 (3d Cir.1991) (reasoning that while embezzlement always involves breach of duty of trust, it does not always involve abuse of position of trust); accord United States v. McElroy, 910 F.2d 1016, 1027-28 (2d Cir.1990). Thus, section 3B1.3 should have been applied if Lieberman occupied a position of trust and if he "abused his position in a way that substantially facilitated the commission or concealment of the crime." United States v. McMillen, 917 F.2d 773, 775 (3d Cir.1990).

Although the district court did not expressly address whether Lieberman was in a position of trust when the embezzlement occurred, we have previously stated that this inquiry "approaches a purely legal determination," so "a standard approaching de novo review is appropriate." Id.

As the Ninth Circuit has observed, "the primary trait that distinguishes a person in a position of trust from one who is not is the extent to which the position provides the freedom to commit a difficult-to-detect wrong." United States v. Hill, 915 F.2d 502, 506 (9th Cir.1990). The Hill court stated that a defendant does not ordinarily occupy a position of trust if any attempt by the defendant to abuse his position would be readily detected by the other party, but "if one party is able to take criminal advantage of the relationship without fear of ready or quick notice by the second party, the second party has clearly placed a level of trust in the first." Id.

We have recently had occasion to consider the abuse of position of trust Guideline in a related context. In McMillen, 917 F.2d 773, the district court analogized a savings and loan branch manager who misapplied funds to a bank teller and held that the two-level increase for abuse of position of trust was inapplicable. We reversed, explaining that the defendant's authority to approve loan applications, issue savings certificates, and sign bank documents without supervisory approval required the conclusion that the defendant served in a position of trust. Id. at 775.

In this case, Lieberman has not disputed the statement in the presentence report that he alone was responsible for balancing the suspense account and that nobody else was watching the account. Unlike the bank teller whose accounts must be balanced at the conclusion of each day and who is under frequent surveillance, Lieberman was able to conduct approximately 36 transactions over more than four years before being caught. This fact alone belies any suggestion that the bank was regularly watching over Lieberman's handling of the suspense account.

It follows that Lieberman was placed in a position to commit a "difficult-to-detect wrong." See Hill, 915 F.2d at 506. Thus, he occupied a position of trust at the bank within the meaning of U.S.S.G. § 3B1.3.

Lieberman's...