Unpublished Disposition, 920 F.2d 937 (9th Cir. 1990)

MEMORANDUM^** 

Bruce Fifield Dailey appeals his sentence upon his guilty plea to bank fraud. He makes four assignments of error: (1) he did not engage in "more than minimal planning" in committing the fraud pursuant to United States Sentencing Guidelines (U.S.S.G.) Sec. 2F1.1(b) (2); (2) he did not abuse a position of trust or use a special skill pursuant to U.S.S.G. Sec. 3B1.3; (3) the district court erroneously believed that it lacked discretion to depart downward; and (4) the guidelines as applied to him violate due process because they precluded the district court from departing downward on the basis of his community service. We remand.

Dailey was indicted on one count of bank fraud, in violation of 18 U.S.C. § 1344. The indictment alleged that Dailey, the majority shareholder and a director of First Security Bank, directed loan officers at the Bank to make fraudulent loans on the basis of his fraudulent representations. He pleaded guilty pursuant to a written plea agreement. Both Dailey and the government reserved the right to challenge the amount of the loss stemming from the fraud.

Dailey admitted that he made five fraudulent loans in the total amount of $180,300. The district court accepted Dailey's admission and calculated Dailey's offense level of 14 in the following manner:

Base Offense Level for Fraud: 6 [U.S.S.G. Sec. 2F1.1(a) ] Loss of $180,000: Add 6 [U.S.S.G. Sec. 2F1.1(b) (1) (G) ] More than Minimal Planning: Add 2 [U.S.S.G. Sec. 2F1.1(b) (2) ] Abuse of Position of Trust/Use of Special Skill: Add 2 [U.S.S.G. Sec. 3B1.3] Acceptance of Responsibility: Subtract 2 [U.S.S.G. Sec. 3E1.1(a) ]

The district court sentenced Dailey to fifteen months imprisonment and three years supervised release. The court also imposed a fine of $10,000 and required that Dailey pay the cost of his incarceration and supervision.

Dailey contends that the district court erred in increasing his base offense level for more than minimal planning pursuant to U.S.S.G. Sec. 2F1.1(b) (2) (A). There was no error.

The guidelines authorize a two-point increase in the base offense level if the fraud involved more than minimal planning or a scheme to defraud more than one victim. U.S.S.G. Sec. 2F1.1(b) (2) (A) and (B). "More than minimal planning" is defined as "more planning than is typical for the commission of the [fraud] in a simple form," and "is deemed present in any case involving repeated acts over a period of time, unless it is clear that each instance was purely opportune." U.S.S.G. Sec. 1B1.1, Application Note 1(f) and Sec. 2F1.1, Application Note 2 ("more than minimal planning" is defined in the commentary to section 1B1.1).

Here, Dailey admitted that he made five fraudulent loans over the course of one and one-half years. Because the fraud involved "repeated acts over a period of time," and there is no evidence in the record suggesting that the acts of fraud were "purely opportune," the district court properly increased Dailey's base offense level for more than minimal planning.

Dailey nevertheless urges that the upward departure was erroneous because (1) the Bank was the only victim of his fraud;¹  and (2) he intended to pay back the fraudulent loans.

Whether or not the Bank was the only victim of the fraud, the increase in Dailey's offense level for more than minimal planning was appropriate because the fraud involved, by Dailey's own admission, repeated acts over a period of time.

Furthermore, whether Dailey intended to pay back the fraudulent loans is irrelevant to the question of "more than minimal planning" in making the fraudulent loans.

Dailey next contends that the district court erred in increasing his base offense level for abusing a position of trust or using a special skill pursuant to U.S.S.G. Sec. 3B1.3. This contention is frivolous.

"Section 3B1.3 of the Sentencing Guidelines mandates a two-level upward adjustment of a defendant's base offense level ' [i]f the defendant abused a position of public or private trust ... in a manner that significantly facilitated the commission or concealment of the offense.' " United States v. Hill, No. 89-50045, slip op. 12051, 12054 (9th Cir. September 27, 1990), (quoting U.S.S.G. Sec. 3B1.3). "The position of trust must have contributed in some substantial way to facilitating the crime and not merely have provided an opportunity that could as easily have been afforded to other persons." U.S.S.G. Sec. 3B1.3, Application Note 1.

As the district court properly found, but for Dailey's position of trust as the majority shareholder and a director of the Bank, the Bank loan officers would not have made the fraudulent loans at his direction. Accordingly, the upward adjustment was appropriate.

Although not essential to the resolution of this appeal,²  we note that the district court also properly found that Dailey's special skills in and knowledge of banking significantly facilitated his commission of the fraud.

Dailey argues that the upward departure was nevertheless invalid because (1) abuse of a position of trust and use of a special skill are included in the base offense level for bank fraud; and (2) he did not violate a public or private trust as defined in the Restatement of Trusts.

First, neither abuse of a position of trust nor use of a special skill are included in the base offense level for bank fraud. A defendant is guilty of bank fraud if he or she

... knowingly executes, or attempts to execute, a scheme or artifice--

(1) to defraud a financial institution; or

(2) to obtain any of the moneys, funds, credits, assets, securities or other property owned by ... a financial institution, by means of false or fraudulent pretenses, representations, or promises....

18 U.S.C. § 1344 (West Supp.1988). The statute plainly does not require that a defendant be in a position of trust or possess a special skill that facilitates the commission of the fraud.

Second, the upward adjustment authorized by section 3B1.3 is not limited to situations where the defendant is a trustee of a public or private trust as defined in the Restatement (Second) of Trusts. See generally Hill, slip op. at 12061 (affirming an upward adjustment under section 3B1.3 where the defendant, a driver for an interstate container company, misappropriated goods that he was transporting).

Dailey appeals the district court's refusal to depart downward from the guidelines. He contends that the district court erroneously believed that it lacked discretion to depart downward.

It is unclear from the record whether the district judge recognized that he had the authority under the guidelines to depart downward. The judge's statement that he "can't impose any sentence ... other than under the guidelines" suggests that he may have erroneously believed that he lacked discretion to depart downward.

Accordingly, we remand to the district court for consideration of whether it recognized, in imposing the sentence, that it had discretion to depart downward under the guidelines. United States v. Sharpsteen, 913 F.2d 59, 63-64 (2d Cir. 1990).

Dailey contends that the guidelines as applied to him violate due process because they precluded the district court from departing downward from the guidelines on the basis of his community service in working nearly four years without compensation to save the Bank from financial ruin.

The guidelines did not prohibit the court from considering Dailey's community service on behalf of the Bank. While a defendant's previous employment record and community ties are "not ordinarily relevant in determining whether a sentence should be outside the guidelines," the guidelines do not prohibit the court from considering these factors. U.S.S.G. Secs. 5H1.5 and 1.6. They merely specify the weight to be given to these factors. The right to " [i]ndividualized sentencing has never included the right to challenge the weight given to various sentencing factors." United States v. Brady, 895 F.2d 538, 543 (9th Cir. 1990) (rejecting the argument that the guidelines as applied violate due process because they do not allow the district court to fully consider a defendant's family and community standing or psychological condition). The guidelines as applied therefore do not violate Dailey's due process rights.

The case is remanded to the district court for reconsideration of the sentence in accordance with this disposition. Any further appeal of the sentence should be submitted to this panel.