United States v. Welbig

Decision Date05 May 2015
Docket NumberNo. CR 14-3347 JB,CR 14-3347 JB
PartiesUNITED STATES OF AMERICA, Plaintiff, v. DAVID W. WELBIG, Defendant.
CourtU.S. District Court — District of New Mexico
MEMORANDUM OPINION AND ORDER

THIS MATTER comes before the Court on the Objections to Presentence Report (PSR), filed March 6, 2015 (Doc. 18)("Objections"). The Court held a hearing on April 14, 2015. The primary issues are: (i) whether Plaintiff United States of America has presented sufficient evidence to support a finding by a preponderance of the evidence that Defendant David W. Welbig intended to steal a $50,000.00 check; (ii) whether Welbig used his special accounting skills to carry out his embezzlement scheme; and (iii) whether Welbig obstructed justice by fleeing from law enforcement authorities and assuming an alias for over twenty years. Because the United States has not presented sufficient evidence showing that Welbig intended to steal the $50,000.00 check, the Court will sustain Welbig's objection to the inclusion of that amount in its total loss calculation. Welbig used his accounting skills to enact his scheme, and the Court will, thus, apply the United States Sentencing Guidelines' special-skills enhancement. Finally, fleeing or avoiding arrest does not constitute obstruction of justice. The Court will, accordingly, sustain Welbig's objection to the obstruction-of-justice enhancement. Consequently, the Court will overrule the Objections in part and sustain them in part.

FACTUAL BACKGROUND

The Court takes its facts from the Presentence Investigation Report, disclosed November 25, 2014, revised March 31, 2015 ("PSR"), which the United States Probation Office ("USPO") prepared. Computerized Quality Graphics/Commodity Quote Graphics ("CQG") employed Welbig as a certified public accountant ("CPA") in Glenwood Springs, Colorado. PSR ¶ 6, at 3. In 1989, Welbig attempted to open a personalized account through a brokerage company that CQG used. See PSR ¶ 6, at 3. Welbig provided the brokerage company with a $50,000.00 check from CQG to open the account; however, Welbig was not authorized to open an account using CQG's funds. See PSR ¶ 7, at 3. The brokerage company denied Welbig's request to open an account and contacted CQG's president to inform him of Welbig's actions. See PSR ¶ 7, at 3. CQG voided the check. See PSR ¶ 7, at 3. CQG fired Welbig and hired an outside agency -- Dalby Wendland & Co. -- to conduct an audit. See PSR ¶ 7, at 3.

Dalby Wendland's audit discovered a scheme by Welbig that, from May 12, 1989, to November 20, 1989, resulted in the California, Illinois, and New York taxing authorities issuing seven checks, totaling $35,904.67. See PSR ¶ 7, at 3. Welbig advised the California, Illinois, and New York taxing authorities that he anticipated that CQG would have a tax liability in each state and that CQG would deposit checks in anticipation of the tax liability. See PSR ¶ 8, at 3. It was common practice for CQG to deposit checks with state taxing authorities in anticipation of a tax liability. See PSR ¶ 8, at 3. Welbig issued two checks -- totaling $10,000.00 -- to the California State Franchise Tax Board, two checks -- totaling $5,000.00 -- to the Illinois Department of Revenue ("IDR"), and three checks -- totaling $20,904.67 -- to the New York State Income Tax Board. See PSR ¶¶ 9-11, at 4. Later, Welbig informed each state's taxing authority that CQG did not have the anticipated tax liability and requested a refund. See PSR¶ 12, at 4. While requesting a refund is not uncommon for CQG, Welbig gave the taxing authorities his personal information, rather than CQG's information. See PSR ¶ 12, at 4. Each state sent Welbig checks for the refund, which he deposited into his personal bank account. See PSR ¶¶ 13-15 at 4. The PSR states that, in total, Welbig attempted to fraudulently obtain $85,904.67 -- $50,000.00 from attempting to open a personal trading account and $35,904.67 through his tax-refund scheme. See PSR ¶ 16, at 5.

On April 16, 1990, a Federal Bureau of Investigation ("FBI") agent contacted Welbig and made an appointment to interview him about his involvement in the tax-refund fraud scheme. See PSR ¶ 17, at 5. Welbig told the agent that he was available for an interview on April 18, 1990. See PSR ¶ 17, at 5. Welbig did not show up for the interview, so the agent called Welbig's wife, who denied any knowledge of the interview and told the agent that she thought Welbig was in Aspen, Colorado, to do tax work for a friend. See PSR ¶ 17, at 5. Welbig's wife contacted the FBI later that day, telling them that, when she arrived home, she found a letter from Welbig that stated: "FBI called - CQG going to file charges. I can't handle that. Love Always." PSR ¶ 18, at 5. On April 23, 1991, the United States District Court for the District of Colorado issued a warrant for Welbig's arrest. See PSR ¶ 19, at 5.

Welbig traveled to California, where he obtained the death certificate of John Dolan. See PSR ¶ 19, at 5. Welbig began using the alias "John Dolan," and a different date of birth and Social Security number. PSR ¶ 19, at 5. On August 10, 2010, the National Passport Center ("NPC") received a passport application from Welbig, using the alias John Dolan. PSR ¶ 20, at 5. The NPC conducted an audit and discovered that the real John Dolan died in 1986. See PSR ¶ 20, at 5. The NPC discovered that five passports had been issued to John Dolan, two ofwhich were valid, and three of which were fraudulent and had been issued to Welbig in 1990, 2000, and 2010. See PSR ¶ 20, at 5.

On July 22, 2014, special agents from the Phoenix Resident Office of the Diplomatic Security Service arrived at Welbig's residence in Albuquerque, New Mexico. See PSR ¶ 21, at 5. The agents questioned Welbig about his involvement in passport fraud, and Welbig admitted that he obtained a copy of John Dolan's death certificate, and used the information from the death certificate to secure a birth certificate, Social Security card, and state identification card. See PSR ¶ 21, at 5. Welbig provided the agents with his real name and told them that he had been on the run for over two decades, because he was wanted by the FBI for embezzlement. See PSR ¶ 21, at 5.

PROCEDURAL BACKGROUND

Welbig was indicted in the District of Colorado for fraudulently transferring funds. See Indictment at 1-2, filed in the District of Colorado on April 23, 1991, filed in the District of New Mexico on July 23, 2014 (Doc. 1)("Indictment"). The Indictment alleges that Welbig embezzled $35,904.67 through his tax-refund scheme and does not mention the $50,000.00 check. See Indictment at 1-2. The case was transferred to the District of New Mexico on September 30, 2014. On October 10, 2014, Welbig pled guilty to the Indictment's charges. See Plea Minute Sheet at 1, filed October 10, 2014 (Doc. 13).

1. The PSR, Objections, and Addendum.

The USPO disclosed the PSR on November 25, 2014, and revised it on March 31, 2015. The PSR notes that the base offense level for an 18 U.S.C. § 2314 violation is 4 under U.S.S.G. § 2B1.1. See PSR ¶ 30, at 12. It notes that, because Welbig's intended loss was more than $70,000.00, 8 additional levels are applied under § 2B1.1(1)(G). See PSR ¶ 31, at 12; id. ¶ 16,at 5 (stating that "Welbig attempted to fraudulently obtain $85,904.67"). The PSR applies an additional 2-level enhancement under U.S.S.G. § 3B1.3, because Welbig held and abused a special skill. See PSR ¶ 33, at 12. The PSR also applies a 2-level enhancement under U.S.S.G. § 3C1.1 for obstructing justice, because Welbig assumed a different identity, which caused the FBI to expend resources trying to catch him for over twenty years, including annual contacts with his family members and acquaintances. See PSR ¶ 35, at 13. The PSR applies a 2-level reduction under U.S.S.G. § 3E1.1(a) for clearly demonstrating an acceptance of responsibility and a 1-level reduction under § 3E1.1(b) for timely notifying authorities of an intent to plead guilty. See PSR ¶¶ 38-39, at 13. The PSR calculates Welbig's total offense level as 13. See PSR ¶ 40, at 13. The PSR states that Welbig has a criminal history score of 2 from pleading guilty to aggravated identity theft, which results in a criminal history category of II.1 See PSR ¶¶ 44-46, at 14; United States v. Welbig, No. CR 14-3764 JB. The PSR notes that the Guidelines range for an offense level of 13 and a criminal history category of II is 15- to 21-months imprisonment. See PSR ¶ 83, at 21.

Welbig filed his Objections on March 6, 2015. Many of Welbig's objections concern factual statements or errors within the PSR that do not affect his Guidelines calculation. See Objections ¶¶ 1-7, at 1-2 (objecting to, among other things, the date his warrant was issued, the date of birth he used for his alias, and the name of the company from which he embezzled money). Welbig also objects to the inclusion of the $50,000.00 check in calculating the amount of loss that he intended to cause. See Objections ¶ 8, at 2. He argues that, while he admits to fraudulently obtaining checks totaling $35,904.67, "the $50,000.00 check was of a different classand character." Objections ¶ 8, at 2. Welbig asserts that CQG issued the $50,000.00 check at his behest and that the check was a part of a legitimate business transaction. See Objections ¶ 8, at 2. He contends that, in issuing the check, he merely exceeded his authority under CQG's corporate structure. See Objections ¶ 8, at 2. Welbig maintains that the $50,000.00 check did not involve any fraudulent conduct, and that it was sent to a brokerage firm at which CQG had four or five existing accounts. See Objections ¶ 8, at 2-3. He states that it was to be deposited so that he could buy and sell in commodities, and that he was fired, because he did not seek proper approval from CQG's president/CEO. See Objections ¶ 8, at 3.

Welbig also argues that the special-skill enhancement should not apply, because, although he was a CPA when he worked at CQG, he did not...

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