[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
JULY 05, 2001
No. 00-11054 THOMAS K. KAHN
CLERK
D. C. Docket No. 99-00252-CR-BU-W
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
ROBERT WILSON HUMBER,
Defendant-Appellant.
Appeal from the United States District Court
for the Northern District of Alabama
(July 5, 2001)
Before EDMONDSON, HILL and GIBSON*, Circuit Judges.
__________________________
*Honorable John R. Gibson, U.S. Circuit Judge for the Eighth Circuit, sitting by designation.
HILL, Circuit Judge:
This appeal presents a simple question of first impression in this circuit and
apparently all others under the sentencing guidelines: can a defendant who pleads
guilty to eighty-three counts of bank fraud, money laundering, forfeiture and tax
evasion, involving more than $18,000,000 in embezzled funds and lost interest,
receive a two-point enhancement to his base offense level under USSG §
2F1.1(b)(2)(A), for the use of more than minimal planning to commit the
fraudulent offense, and an additional two-point enhancement under USSG §
2F1.1(b)(5)(C)1, for the use of sophisticated means to commit the offense? Based
upon the following, we conclude that the two sections are to be applied
cumulatively, not in the alternative. We affirm the decision of the district court.
I.
The pertinent facts are not in dispute. Citizens Bank of Fayette, Alabama
(Bank) is a one-branch bank owned by members of the Robertson family. Hired as
a Bank teller in 1971, appellant Robert Humber, a Robertson family childhood
friend and classmate, was a trusted employee of the Bank.2 By 1992, Humber had
1
We apply the sentencing guidelines manual in effect on the date that the defendant is
sentenced. USSG § 1B.11(a). This defendant was sentenced on February 17, 2000. All
references included herein, therefore, are to the sentencing guidelines manual dated November 1,
1998.
2
Humber’s wife of twenty years, JoAnn Humber, was secretary to the Bank president.
2
worked his way up to Bank vice-president and cashier, responsible for supervising
tellers, maintaining the vault, and keeping the general ledger. As part of his
bookkeeping responsibilities, he provided daily reconciliations of the Bank’s
accounts and monthly accounting statements to the Bank’s directors.
In the mid-1990's, Humber lost $200,000 of his personal retirement benefits
in the stock market. In an attempt to recoup these monies, he developed an
embezzlement scheme that would last more than seven years and take auditors
eight months to unravel. Humber’s criminal conduct involved multiple inner
account transfers on the Bank’s books and fraudulent wire transfers of the Bank’s
Federal Reserve account to his personal account at AmSouth Bank in
Birmingham.3 Bank officials did not suspect any wrongdoing until 1999, when
Humber made several inquiries about the timing of a surprise Bank audit by
external auditors.
Although the full extent of Humber’s fraud may never be known, the
following is a brief overview: Humber made 3,000 to 5,000 fraudulent entries in
more than six accounts within the Bank, not counting personal accounts he
controlled without the Bank; he made 136 wire transfers directly from the Federal
3
In the beginning, these wire transfers were between $20,000 and $30,000. By the end,
the last wire transfer totaled $3,110,000.
3
Reserve to personal accounts he controlled without the Bank; he prepared false
cashier’s checks; he made up false and carefully selected institutional payees that
typically dealt with large dollar amounts on a regular basis; on the last day of every
month since 1994, Humber prepared numerous false “cash letters,” inflating the
Bank’s balance at the Federal Reserve, with offsetting false entries to conceal the
scheme from the Bank; he falsified other Bank reconciliations; he made
approximately $800,000 in false entries in the Bank’s demand deposit accounts and
it general ledger; through 271 false entries, Humber borrowed more than $8.1
million in federal funds from SouthTrust Bank in Birmingham, using a separate
account and separate customer number, with directions that statements be mailed
directly to his attention; he made false entries in the Bank’s customer certificate of
deposit accounts; Humber purchased federal funds at corresponding banks with no
concomitant record in the Bank’s records other than “off balance sheet items;” he
changed the Bank’s computer password with the Federal Reserve, allowing himself
the sole use and access of the Federal Reserve account and its computer line to
generate transactions; he destroyed all Bank records involving wire transfers with
the Federal Reserve; he lied to bank officials about the federal fund transactions;
and, in order to facilitate the longevity of his scheme, Humber personally
coordinated the yearly audits of Bank books with the Bank’s outside auditors.
4
Humber pled guilty to the eighty-three counts of bank fraud [18 U.S.C. §
1344], money laundering [18 U.S.C. § 1957], forfeiture [18 U.S.C. §§ 982(a)(1),
(2)], and tax evasion [26 U.S.C. § 7206(1)] as set forth in the superseding
indictment. The district court sentenced Humber to 108 months’ imprisonment,
four years of supervised release and restitution in the amount of $12,948,697.20.
II.
Humber filed two objections to the Presentence Investigation Report (PSI)
prepared by the probation office. The first objection was sustained.4 The second
objection is the subject of this appeal: whether the two-level enhancement under
USSG § 2F1.1(b)(2)(A), for more than minimal planning, and the two-level
enhancement under USSG §2F1.1(b)(5)(C), for using sophisticated means to
commit the offense, may be imposed cumulatively, or, must they be imposed in the
alternative, as the use of sophisticated means encompasses the same conduct as
more than minimal planning, and their cumulative imposition results in double
counting for the same conduct?
III.
This court reviews the district court’s findings of fact for clear error and its
4
The district court agreed with Humber’s objection to a two-point enhancement for
obstruction of justice under USSG § 3C1.1, that his conduct did not warrant the adjustment as he
had been credited with acceptance of responsibility.
5
application of the sentencing guidelines to those facts de novo. United States v.
Jamieson, 202 F.3d 1293 (11th Cir. 2000) (citations omitted). Whether the
cumulative enhancement of a sentence under two separate guideline provisions
constitutes impermissible double counting presents a question of law reviewed de
novo. See United States v. Stevenson, 68 F.3d 1292, 1294 (11th Cir. 1995).
IV.
Humber does not contest testimony provided by Bank witnesses concerning
the nature, extent, scope or complexity of his embezzlement scheme or fraudulent
transactions. He agrees with the facts as presented by the Bank. Humber admits
that his fraudulent conduct constitutes the use of sophisticated means for purposes
of USSG § 2F1.1(b)(5)(C).5 He claims, however, that the fraudulent conduct
contemplated by the more than minimal planning offense characteristic of USSG §
2F1.1(b)(2)(A) is subsumed within the sophisticated means offense characteristic
of USSG § 2F1.1(b)(5)(C) and that he should not be charged double for the same
conduct.
The government contends that the district court properly applied USSG §§
2F1.1(b)(2)(A) and (b)(5)(C) cumulatively. It claims that Humber’s activities
5
Interestingly, Humber does not contest the government’s contention that had he taken
so much as one day off from the Bank during the time of the fraudulent scheme charged, his
activities would have been discovered.
6
involved more planning than is typical of the offense of bank fraud in its simplest
form, yet that the conduct was implemented by the use of sophisticated means,
separate and distinct from, to be applied in addition to, more than minimal
planning. The government argues that the simultaneous application of USSG §§
2F1.1(b)(2)(A) and (b)(5)(C) is permitted because the guidelines have not
specifically prohibited their cumulative application, nor has the United States
Sentencing Commission (Commission) expressed any intent to the contrary, and
because the two provisions address conceptually different sentencing
considerations. See Stevenson, 68 F.3d at 1294.
V.
Section 2F1.1(b)(2)(A), found in Part F (Offenses Involving Fraud or Deceit)
of the sentencing guidelines, provides for a two-level increase of a defendant’s base
offense level “[i]f the offense involved . . . more than minimal planning.” USSG §
2F1.1(b)(2)(A). The Commentary to subsection (b)(2)(A) provides that “‘[m]ore than
minimal planning’ . . . is defined in the Commentary to § 1B1.1 (Application
Instructions” at note 1(f). See USSG § 2F1.1, comment, (n.2).
The Commentary to § 1B1.1 at note 1(f) reads in pertinent part as follows:
“More than minimal planning” means more planning than is typical for
commission of the offense [of fraud] in a simple form. “More than
minimal planning” also exists if significant affirmative steps were taken
to conceal the offense, other than conduct to which § 3C1.1 (Obstructing
7
or Impeding the Administration of Justice) applies.
“More than minimal planning” is deemed present in any case involving
repeated acts over a period of time, unless it is clear that each instance
was purely opportune. Consequently, this adjustment will apply
especially frequently in property offenses.
***
In an embezzlement, a single taking accomplished by a false book entry
would constitute only minimal planning. On the other hand, creating
purchase4 orders to, and invoices from, a dummy corporation for
merchandise that was never delivered would constitute more than
minimal planning, as would several instances of taking money, each
accomplished by false entries.
USSG § 1B1.1, comment. (n.1(f)).
Reading further in the Commentary to USSG § 1B1.1 at note 4:
The offense level adjustments from more than one specific offense
characteristic within an offense guideline are cumulative (added
together) unless the guideline specifies that only the greater (or greatest)
is to be used.
USSG § 1B1.1, comment. (n.4).
In United States v. Daniels, 148 F.3d 1260 (11th Cir. 1998), the defendant
warranted the more-than-minimal-planning enhancement under USSG §
2F1.1(b)(2)(A) when his embezzlement of funds from a health plan occurred over a
period of nearly five years and constituted “repeated acts over a period of time” that
were not merely opportune. Id. at 1261; see USSG § 1B1.1, comment. (n.1(f)). The
Daniels court found that the defendant’s submission of falsified and forged letters to
the bank were “significant affirmative steps . . . taken to conceal the offense. Id. In
8
addition the court found that when the defendant committed two acts of bank fraud,
it may have justified the enhancement in and of itself. Id.; citing United States v.
Bush, 126 F.3d 1298, 1300 (11th Cir. 1997)(“we are hardpressed to imagine a
scenario in which ‘obtaining even one fraudulent loan would not require more than
minimal planning’”)(citation omitted).
Section 2F1.1(b)(5)(A) was added to Part F of the sentencing guidelines by
Amendment 577, effective November 1, 1998, reflecting an overall intent by the
Sentencing Commission to impose harsher sentences for white-collar criminals,
particularly at higher levels of loss. See Elkan Abramowitz, 4 No. 7 Mealey’s Litig.
Rep.: Ins. Fraud 20 (1997). It provides for a two-level increase of a defendant’s base
offense level “[i]f . . . the offense otherwise involved sophisticated means . . . .”
USSG § 2F1.1(b)(5)(A). It also added a ‘floor’ to a defendant’s base offense level:
“[i]f the resulting offense level is less than 12, increase to level 12.” Id.
The Commentary to § 2F1.1(b)(5)(A) at note 15 reads in pertinent part as
follows:
For purposes of subsection (b)(5)(A), “sophisticated means’ means
especially complex or especially intricate offense conduct pertaining to
the execution or concealment of an offense . . . Conduct such as hiding
assets or transactions, or both, through the use of fictitious entities,
corporate shells, or offshore bank accounts also ordinarily would indicate
sophisticated means.
The enhancement for sophisticated means under subsection (b)(5)(A)
requires conduct that is significantly more complex or intricate than the
9
conduct that may form the basis for an enhancement for more than
minimal planning under subsection (b)(2)(A).
If the conduct that forms the basis for an enhancement under subsection
(b)(5) is the only conduct that forms the basis for an adjustment under §
3C1.1 (Obstruction of Justice), do not apply an adjustment under §
3C1.1.
USSG § 2F1.1(b)(5)(A), comment. (n.15) (emphasis added).
At this writing, the issue of whether USSG §§ 2F1.1(b)(2)(A) and (b)(5)(C) can
be applied cumulatively to enhance a defendant’s sentence has not been considered
by any appellate court.6 The issue was, however, recently addressed by an Ohio
district court in United States v. Wiant, 2001 WL 15633 (S.D.Ohio Jan. 5, 2001), a
case involving extensive fraud committed by upon the American Cancer Society of
Columbus by the defendant as its chief administrative officer. The superceding
indictment charged that Wiant had created three separate schemes, perpetuated
through five fictitious businesses, culminating in the transfer of $6.9 million in charity
funds to an offshore Austrian bank account in Wiant’s name. Wiant pled guilty to
6
By way of dicta, there is some indication in two appellate tax cases, that the cumulative
application of USSG §§ 2F1.1(b)(2)(A) and 2T1.1(b)(2), involving the use of sophisticated
means during the commission of the crime of tax evasion, is permissible. See United States v.
Clements, 73 F.3d 1330, 1340-41 (5th Cir. 1996); United States v. Madoch, 108 F.3d 761, 765-
66 (7th Cir. 1997).
In support that the two sections are to be applied cumulatively, and not in the alternative,
secondary treatise authority states that “Sentencing Commission data suggests that the
sophisticated-means enhancement was not applied as frequently as the more-than-minimal-
planning enhancement of the fraud guideline. The more-than-minimal-planning enhancement is
applied in about 76% of the cases. The sophisticated-means enhancement . . . was applied in
about 18% of the cases.” Thomas W. Hutchinson et al., Fed. Sent. L. & Prac. § 2T1.2 (2000
ed.).
10
four-counts of mail fraud, bank fraud, money laundering and unauthorized use of an
access device.
In his response to the PSI, Wiant objected to the sophisticated means
enhancement under USSG § 2F1.1(b)(5)(C) on the basis that the more than minimal
planning enhancement of USSG § 2F1.1(b)(2)(A) had already accounted for the
complexity of his offense and to apply both would double count for the same offense.
Id. at *4.
The district court, in a well-considered opinion by Judge Kinneary, disagreed,
stating:
In this case, the more than minimal planning enhancement is justified by
the fact that Defendant executed acts of fraud repeatedly during his
three-year tenure with the American Cancer Society. The repetition of
his fraudulent conduct is a separate issue from the complexity of his
schemes. In fact, most property offenses, regardless of their degree of
complexity, involve a more than minimal planning enhancement. See
USSG § 1B1.1, Comment. n.(f) [sic]. This Court is convinced that a
defendant’s conduct which involves repeated acts of fraud, as well as
especially intricate planning, warrants both the more than minimal
planning enhancement and the sophisticated means enhancement. If the
Sentencing Commission had intended otherwise, they would have
provided that those enhancements are mutually exclusive. To the
contrary, the Guidelines list the enhancements individually as specific
characteristics which may apply to an offense involving fraud and deceit.
Id. (emphasis added). With this said, Judge Kinneary applied the two enhancements
cumulatively. Id.
We have a very similar factual setting in the appeal before us. Humber’s crime
11
against the Bank involved continuous acts of fraud over a seven year basis. Humber’s
crime against the Bank was of a particularly complex nature. It took external auditors
eight months to unravel, and, the record reflects that the full extent of the crime may
never be known.7
As stated, Application note 15 implies that enhancements for more than
minimal planning and sophisticated means are intended to be mutually exclusive. See
USSG § 2F1.1, comment. (n.15 at ¶ 3). In other words, we conclude that sophisticated
means involves more than minimal planning. More than minimal planning, however,
does not necessarily involve sophisticated means. A defendant who uses sophisticated
means will always receive, in addition, an enhancement for more than minimal
planning. See Thomas W. Hutchinson, Fed. Sent. L. & Prac. § 2F1.1(2000 ed.).8
VI.
We conclude that USSG § 2F1.1(b)(2)(A) and USSG § 2F1.1(b)(5)(C) are to
7
The PSI reflects that, based upon Humber’s responses, no one may also ever know how
or why this soft-spoken, mild-mannered man with no criminal history committed the offense and
how he thought he would continue to successfully conceal the offense year after year. The
probation officer can only speculate on his simple greed, and that of his spouse, as the
motivating factor.
8
While we are aware of the potential for overlap, caselaw in this circuit is clear that, in
determining the intent of the Commission, we shall presume that the Commission intended to
apply separate guideline sections cumulative unless specifically directed otherwise. See
Stevenson, 68 F.3d at 1294-95. This is especially true when each guideline section in question,
such as present in the case before us, concerns conceptually separate notions relating to
sentencing. Id.
12
be applied cumulatively, and not in the alternative. The decision of the district
court is AFFIRMED.
********
EDMONDSON, Circuit Judge, concurs in the result.
13