United States v. Geevers ( 2000 )

Opinions of the United
2000 Decisions States Court of Appeals
for the Third Circuit
8-18-2000
United States v. Geevers
Precedential or Non-Precedential:
Docket 99-5155
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Filed August 18, 2000
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
NO. 99-5155
UNITED STATES OF AMERICA
v.
MARTIN GEEVERS, Appellant
On Appeal From the United States District Court
For the District of New Jersey
(D.C. Crim. No. 98-cr-00213)
District Judge: Honorable Mary Little Cooper
Argued: March 10, 2000
Before: BECKER, Chief Judge, NYGAARD and
GARWOOD,* Circuit Judges.
(Filed: August 18, 2000)
MARK A. BERMAN, ESQUIRE
(ARGUED)
Gibbons, Del Deo, Dolan, Griffinger
& Vecchione
One Riverfront Plaza
Newark, NJ 07102
Counsel for Appellant
_________________________________________________________________
* Honorable Will L. Garwood, United States Circuit Judge for the Fifth
Circuit, sitting by designation.
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
Counsel for Appellee
OPINION OF 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
2
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
3
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
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1. The Guideline, in relevant part, provides:
Fraud and Deceit; Forgery; Offenses Involving Altered or
Counterfeit
Instruments Other than Counterfeit Bearer Obligations of the United
States
(a) Base Offense Level: 6
(b) Specific Offense Characteristics
(1) If the loss exceeded $2,000, increase the offense level as
follows:
Loss (Apply the Greatest) Increase in Level
. . . .
(L) More than $800,000 add 11
(M) More than $1,500,000 add 12
(N) More than $2,500,000 add 13
U.S.S.G. S 2F1.1.
4
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 lossfigure 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
_________________________________________________________________
2. Both parties refer to Geevers as having engaged in the crime of check
kiting, which could, under certain circumstances not present here, affect
our analysis of the amount of Geevers's intended loss. Check kiting is
traditionally defined as the
[p]ractice of writing a check against a bank account where funds
are
insufficient to cover it and hoping that before it is deposited the
necessary funds will have been deposited. Transfer of funds between
two or more banks to obtain unauthorized credit from a bank
5
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 lossfigure.
"Consistent with the provisions of S 2X1.1 (Attempt,
Solicitation, or Conspiracy), if an intended loss that the
_________________________________________________________________
during the time it takes the checks to clear. In effect, a kite is
a bad
check used temporarily to obtain credit.
Black's Law Dictionary 238 (6th ed. 1990) (citations omitted). Check
kiting has also been defined as "a scheme `designed to separate the bank
from its money by tricking it into inflating bank balances and honoring
checks drawn against accounts with insufficient funds,' " United States
v. Frydenlund, 990 F.2d 822, 824 (5th Cir. 1993) (quoting United States
v. Doherty, 969 F.2d 425, 428 (7th Cir. 1992)), which more accurately
reflects what Geevers has done in the present case.
Geevers does not raise, and we therefore do not address, the issue
whether the cumulative intended loss of the checks with insufficient
funds should be reduced because parts of the fraudulent transactions
were "closed" in nature. A closed loop is the sort that is normally found
in a check kiting case. There, a worthless check of, say, $1,000 is
deposited in Bank A, and then a check drawn from Bank A is used to
open a $1,000 account in Bank B, and a check from that bank is then
presented for cash to Bank A. This process may be repeated several
times in order to sustain the kite. In such a circumstance, however, the
intended loss could still be said to be only $1,000. See United States v.
Watkins, 994 F.2d 1192, 1196 n.5 (6th Cir. 1993). Most of Geevers's
transactions do not fall within the traditional check kite format, as his
deposits and withdrawals were not part of a closed loop, in which the
same amount of money is sent to each bank in the chain and the chain
ultimately closes on itself. Though some of Geevers's false checks were
used to cover accounts from which he attempted fraudulent withdrawals,
his transactions involved varying amounts of money at numerous
different banks. The parties do not dispute the manner in which the
District Court aggregated these transactions, as they suffice, in
combination with the other relevant conduct, to reach the guideline
figure arrived at by the District Court regardless of whether Geevers's
efforts are taken at face value or as failed attempts to create closed
loops
as occurs in a typical check kite. The only issue with which we must
contend, therefore, is whether the amounts charged against Geevers may
be considered as part of his intended loss.
6
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 thefigure
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
7
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
of bank fraud in violation of 18 U.S.C. S 1344. See id. at
310. The district court calculated his attempted loss as
being $66,262.59, that is, the combination of the two
deposits, despite the defendant's contention that the proper
amount was the $24,900 he actually attempted to
withdraw. We affirmed, ruling that "[i]t was eminently
reasonable for the District Court to infer that Torres
intended to withdraw the balance of the deposits before the
stolen check surfaced as stolen and would have done so
had he not been arrested." Id. at 312.
Though it affirmed the entire calculation of the loss
amount, the Torres panel did not address whether there
was any difference between the intent behind depositing a
worthless check, the issue before us, and depositing a
stolen one. For purposes of that appeal, any distinction
would have been irrelevant to the holding, as it was the
value of the stolen check (in excess of $66,000) that placed
the defendant into the challenged sentence range, while the
worthless check (worth only $240.65) was not of sufficient
value to affect the guidelines. Indeed, the latter issue was
not briefed in the case.3 Moreover, though the text of the
opinion refers to the deposited check as "rubber," the facts
as recited in the opinion do not clarify whether the check
deposited was a pure fabrication or an attempt to draw
down the account of a third party. Additionally, the Torres
panel was not presented with the issue of how to address
an elaborate false check scheme with the complexity of
Geevers's.
Torres would thus not appear to be dispositive. At all
events, the extent of the precedential impact of Torres is
ultimately unimportant as we reach the same conclusion as
did that panel. Because there are differences between a
stolen and a kited check, we find it helpful to analyze and
_________________________________________________________________
3. The present opinion writer was a member of the Torres panel.
8
explain why the District Court's conclusions were
appropriate under this Court's precedent.
B.
1.
Aside from implications from Torres, our precedent offers
no clear direction on how to address a defendant in
Geevers's position.4 Nor do the guidelines or the
accompanying commentary specifically address this
situation.5 Our sister circuits are also divided on the
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4. The government contends that we have already endorsed its position
in United States v. Shaffer, 35 F.3d 110 (3d Cir. 1994), but this is an
overstatement of that case. In Shaffer we held that in calculating the
actual loss from a check kite, the sentencing court must consider the
loss as it existed at the time of discovery, notwithstanding any future
restitution attempts. See id. at 114-15. In this regard, we distinguished
United States v. Kopp, 951 F.2d 521 (3d Cir. 1991), which, as we discuss
below, allowed such consideration for purposes of a fraudulently
obtained secured loan. See Shaffer, 35 F.3d at 114. Shaffer does not,
however, offer any guidance for the calculation of intended loss. Indeed,
though there were actual losses to the banks in Shaffer, the sentencing
court ruled that the intended loss to the banks was actually zero
because the defendant eventually planned to cover all of the checks,
which were employed in an effort to save an imperiled business. See id.
at 113. This conclusion would favor Geevers. Because we resolved
Shaffer on other grounds, we did not reach the question whether the
court's finding was clearly erroneous as alleged by the government in
that case. See id. at 113 n.4. At all events, Shaffer does not compel the
government's favored conclusion that intended loss should be equated
with the face value of Geevers's fraudulent checks.
5. The government also attempts to rely on commentary to the guidelines
to uphold the District Court, but we conclude that the proffered
examples are little help. The government claims that Application Note 8
of S 2F1.1 expressly provides that the face amount of fraudulent checks
is a proper measure of intended loss. That note gives the example of
treatment for a forged, not a kited or worthless, check. "[I]f the fraud
consisted of . . . representing that a forged check for $40,000 was
genuine, the loss would be $40,000." Though the District Court viewed
the example as analogous, it appears inapposite to Geevers's fraud.
Depositing a forged check and depositing a worthless check are different
9
matter. Compare, e.g., United States v. Watkins, 994 F.2d
1192 (6th Cir. 1993) (remanding for findings whether
defendant intended to withdraw or could have withdrawn
face value of deposited checks), with United States v.
Strozier, 981 F.2d 281 (7th Cir. 1992) (upholding equation
of face value of checks with intended loss).
Though our pre-Torres precedent is unclear, it does offer
some helpful guideposts. It is clear that a district court errs
when it simply equates potential loss with intended loss
without deeper analysis. In United States v. Kopp, 951 F.2d
521 (3d Cir. 1991), we considered the applicability of
S 2F1.1 to fraudulent misrepresentations to obtain a bank
loan, holding that loss should not be equated with potential
loss at the time of the crime. See id. at 536. In reaching
this conclusion, we stated that "[t]he fraud guideline thus
has never endorsed sentencing based on the worst-case
scenario potential loss . . ." Id. at 529 (emphasis in the
original). Moreover, we declared that equating "possible
loss" with "probable or intended loss" was a "linguistic
stretch," which we rejected. Id. at 533. Because Kopp dealt
with an equation of the amount obtained with actual or
_________________________________________________________________
crimes. Depositing a worthless check is a prelude to an attempt to draw
upon it during the interim period before the bank discovers that the
check is not backed by sufficient funds. In contrast, when one deposits
a forged check, the hope is that the bank will honor the check for the
full value and actually transfer funds from an existing account. Once
stolen in this manner, the money could be expected to remain in the
defendant's account; there is no similar interim period during which the
bank could be expected to stop payment or close the account.
The government and District Court also referred to the example under
the theft guideline S 2B1.1 n.2 of theft of a check or money order that
treat the intended loss amount as equivalent to the face value of the
check. This example and the cases, see, e.g., United States v.
Cianscewski, 894 F.2d 74 (3d Cir. 1990), that equate intended loss with
the face value of stolen checks do not resolve the issue in the
government's favor for the same reasons that the forgery example fails.
Though it is true that this Court has declared that a check kite is more
akin to theft than to a fraudulent attempt to obtain a secured loan, see
United States v. Shaffer, 35 F.3d 110, 114-15 (3d Cir. 1994), that is not
equivalent to announcing a rule for the calculation of intended loss, as
our refusal in Shaffer to reach the issue of intended loss indicates.
10
intended loss, we made no explicit holding on the meaning
of intended loss, but the quoted passages suggest that
potential loss should not be equated with the intended loss.
In United States v. Yeaman, 194 F.3d 442, 460 (3d Cir.
1999), we applied Kopp to explain that "[i]ntended loss
refers to the defendant's subjective expectation, not to the
risk of loss to which he may have exposed his victims."
Yeaman makes clear, therefore, that the government's
burden is to prove intended, not possible, loss if it seeks to
increase the guideline levels faced by the defendant under
S 2F1.1.
Though Kopp and Yeaman appear to aid Geevers's cause,
the argument that intended loss is not per se equivalent to
potential loss only takes him so far. While intended loss
may not be automatically determinable based on what the
potential loss is, intended loss may still equal potential
loss. The District Court must determine Geevers's
subjective intention, and it can draw inferences from the
nature of the crime that he sought to perpetrate.
2.
We therefore must resolve the question whether a
reasonable inference may be drawn that a defendant in
Geevers's position intends to cause the full loss of the face
value of his false checks. We hold that such an inference
may be made. Concomitantly, we conclude that the matter
is not to be determined as a question of law, but as one of
fact.
It seems likely that a defendant in Geevers's position
does not expect to obtain the full amount of his fraudulent
checks. Common sense suggests that a check kite will
always be incomplete, and that a kiter will either abscond
or be discovered before exhausting the kite. But expectation
is not synonymous with intent when a criminal does not
know what he may expect to obtain, but intends to take
what he can. We believe that a sentencing court may
plausibly conclude that a defendant like Geevers would
likely have taken the full amount of the deposited checks if
that were possible. Indeed, in one of Geevers's transactions,
11
as the government points out, Geevers was actually able to
cause a loss worth 85 percent of the amount he deposited.
To assume that Geevers did not want it all is to assume
that had one of the banks somehow failed to detect his
fraud and started sending Geevers monthly balance
reports, Geevers would have refrained from taking any more
of the money. Given Geevers's conduct, the District Court
could reject this proposition as unlikely. Though he may
not have expected to get it all, he could be presumed to
have wanted to.6 As the District Court explained, "the
actual loss sustained by the victim becomes a matter only
of how quickly and how effectively the victim shuts the
barn door before the rest of the horses have gotten out."
App. 88. We conclude that it is not an error of law for a
court to draw inferences from the face value of the checks
in arriving at the factual conclusion that the defendant
intended to let all the horses out if possible. If the
preceding is correct, then Geevers is free to come forward
with evidence to demonstrate that he actually intended
something less, but the government has made its prima
facie case.
Our ruling is consistent with our prior precedent that has
addressed the government's burden of proof when proving
subjective intent. In United States v. Evans, 155 F.3d 245,
253 (3d Cir. 1998), we stated that though the defendant
does not have to "prove the negative" vis-a-vis his absence
of intent, "the burden of production shifts to the defendant
_________________________________________________________________
6. The government made a version of this argument before the District
Court. "[T]he continuing pattern of Mr. Geevers' conduct indicates . . .
that had . . . any one of these institutions been asleep at the switch,
Mr.
Geevers would have happily continued right along in that particular
institution defrauding them of dollar after dollar for as long as the
money
continued to flow." App. 68. The facts in the PSR support this argument.
In one of Geevers's transactions recounted by the PSR, but not utilized
by the District Court as relevant conduct, the involved bank froze
Geevers's account after learning that his deposits were no good. At this
point, Geevers had already been given $40,000 worth of checks. Due to
an error, the bank then released the account and sent Geevers a
statement stating that he had a $4,000 balance remaining. According
the PSR, Geevers then wrote two checks for most of the remaining
balance.
12
once the government has made out a prima facie case." See
also United States v. Raven, 39 F.3d 428, 434-35 (3d Cir.
1994) (once the government makes a prima facie case in
sentencing, the party challenging the government's case
has the burden of coming forward with evidence at a
sentencing hearing that shows the government's evidence is
incomplete or incorrect). Of course, the burden of
persuasion always remains with the government. See
Evans, 155 F.3d at 253; Raven, 39 F.3d at 435. As
discussed above, intent need not jibe perfectly with
expectation when a defendant may not know precisely how
much he or she will get away with before discovery, so the
amount on the fraudulently deposited checks may be used
by a district court in determining whether the government's
burden has been met in establishing a given intended loss
figure.
There remains the issue of why the face value of the
deposited checks may be used to make the prima facie case
that Geevers intended the full loss when even Geevers's
most harmful transaction considered for sentencing
purposes only caused eighty-five percent of the potential
loss. The answer to this question begins with the
admonition of Application Note 9 of S 2F1.1, which tells us
that loss need not be proven precisely. "The court need only
make a reasonable estimate of the loss, given the available
information." Therefore, because the face value of the
deposited checks is germane to analysis of intent, the
government's presentation of the face value as evidence
may make a prima facie case that the defendant intended
to cause the full loss of those amounts. Applying this figure
is not unfair to the defendant insofar as it represents a sum
that was entirely under his control when he elected to act
in contravention of the law. Once the government presented
this information to the District Court, therefore, we
conclude that the Court was free to accept the lossfigure
in the absence of persuasive evidence from Geevers that his
intent was to steal a lesser amount.
To be clear, the face value of the deposited checks is not
to be mechanically assumed to be the intended loss. We
merely hold that a sentencing court may consider that as
sufficient evidence that it was the intended loss. A
13
defendant may, of course, produce evidence of his or her
own in an attempt to convince the court that anotherfigure
was intended. It is easy to imagine circumstances where
this may be so. For example, if a man needed $10,000 for
surgery for his wife and sought to acquire the sum by
engaging in a check kite, he might make a worthless
deposit of $50,000 in order to inflate his "balance" to a high
enough level that the bank would honor a $10,000 check.
Such a defendant would likely be able to demonstrate that
his subjective intent was only to take $10,000.
It is certainly possible, therefore, for a defendant to
convince a sentencing court that he or she did not in fact
intend any actual loss. Geevers failed to make such
arguments here, beyond his claim that he could not have
expected to get it all and a statement by his attorney at
sentencing that "somewhere in his mind [Geevers] believed
he was going to catch up." App. 104. He also did not
present any evidence of what his actual intent was, which
he could have requested to do under Fed. R. Crim. P. 32(c).
As a result, the District Court was left with only Geevers's
assertions of what a "sensible check kiter could . . . have
reasonably expected." App. 88. Without having been
provided by the defendant with an alternative reasonable
basis on which to arrive at a more precise intended loss
figure, the District Court did not commit clear error in
making the guidelines calculation that it did.7
_________________________________________________________________
7. In his reply brief, Geevers argues that the District Court made a per
se rule that intended loss is the equivalent of potential loss. We do not
agree. We think it clear from the transcript of the hearing that the
District Court did not exclude the possibility that Geevers could have
intended a lesser loss; rather the Court concluded that Geevers had
failed to come forward with persuasive arguments that another figure
should be used. It stated that Geevers simply urged that only the actual
loss figure should have been used, but as the Court noted, actual loss
in the factual circumstances at hand is a function of how quickly the
victim of the fraud acts to stop the perpetrator. We do not view these
statements as announcing a per se rule. To be sure, the Court could also
have decided to charge Geevers simply with the withdrawals that he
attempted to make. However, in light of the likely prospect that Geevers
would have continued to return to withdraw additional sums at any
bank that failed to discover his fraud, see supra note 6, we conclude
that the District Court was not obligated to favor this figure.
14
3.
Allowing district courts to consider the face value of
checks as probative of intended loss avoids one negative
consequence of the reading urged by Geevers: the potential
equation, for culpability purposes, of disparate forms of
conduct. We think that a defendant who falsifies checks for
large sums of money is more culpable than one who does
so for lesser sums. Were we to adopt Geevers's position,
however, this distinction would be eroded. Adopting his
argument would equate the culpability of someone who
falsifies checks for large sums of money with that of one
who writes false checks for small amounts in situations
where there is no differential in the amount successfully
stolen. Given the creation of a risk to financial institutions
that attends the presentment of such checks, we view such
a result as a troubling one that should be avoided to the
extent possible and consistent with the legal framework
surrounding the guidelines.8
Our approach enjoys the added advantage of consistency
with the duty of sentencing courts to consider the goals of
affording adequate deterrence to criminal conduct, see 18
U.S.C. S 3553, because it provides incremental levels of
deterrence against criminals who may be considering
inflating the face values of the worthless checks that they
plan to deposit. If sentencing courts are allowed to sentence
based on the value of the falsely deposited check, check
kiters will learn that the more they write, the more they
risk, potentially reducing the face value of false deposits. As
it is generally true that the amount that a kiter is able to
steal will be a fraction of the amount deposited, deterring
large fraudulent deposits will serve to reduce the amount of
money ultimately lost to such frauds. As for the reverse
danger, overdeterrence, we do not think the potential of
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8. As for the reverse argument, that our approach draws no distinction
between the defendant who makes a false deposit and attempts to
withdraw the full amount with one who makes the same deposit, but
only attempts to take a fraction, a defendant in the latter situation who
can demonstrate to the sentencing court that his or her intended theft
was less than the full amount will indeed receive a lighter sentence. If
he
or she cannot make such a showing, then there is no difference in
culpability.
15
over-deterring the deposit of false checks is of particular
concern.
C. Impossibility
Geevers also argues that he cannot be ascribed with
intending to take money that would have been impossible
to take. The question whether it was truly impossible for
Geevers to abscond with the full face value of his
fraudulent deposits does not appear to have been litigated
at any length in the District Court. Assuming arguendo,
however, that these assertions are correct, we do not view
them as necessitating a different outcome. Rather, we join
the majority of courts of appeals in holding that
impossibility is not in and of itself a limit on the amount of
intended loss for purposes of calculating sentences under
the guidelines. The majority rule is that impossibility does
not require a sentencing court to lower its calculation of
intended loss. Compare, e.g., United States v. Klisser, 190
F.3d 34, 36 (2d Cir. 1999) (per curiam); United States v.
Blitz, 151 F.3d 1002, 1010 (9th Cir. 1998); United States v.
Studevent, 116 F.3d 1559, 1563 (D.C. Cir. 1997); United
States v. Wai-Keung, 115 F.3d 874, 877 (11th Cir. 1997),
with United States v. Galbraith, 20 F.3d 1054, 1059 (10th
Cir. 1994); United States v. Watkins, 994 F.2d 1192, 1196
(6th Cir. 1993).
As a matter of guidelines interpretation, we conclude that
the majority position is correct. Intent is intent.
Impossibility bears on what is reasonable for the person to
have intended to do, but the language in Application Note
8 of S 2F1.1 does not give any indication that
adventuresome or deluded criminals are to have their
actions interpreted differently than those of their more
sober counterparts. Nor does the attempt guideline,
S 2X1.1, make any provision for consideration of
impossibility.
Moreover, Application Note 11 of S 2F1.1 specifically
provides an escape valve for situations in which the
intended loss may "overstate the seriousness of the
offense." The note provides an example that specifically
contemplates a situation of impossibility. "[Overstatement]
16
may occur, for example, where a defendant attempted to
negotiate an instrument that was so obviously fraudulent
that no one would seriously consider honoring it." In light
of the specific contemplation of impossibility in the context
of departures, grafting an impossibility exception on to the
setting of the offense level is inconsistent with the language
and structure of the guidelines. Cf. United Steelworkers of
Am. v. North Star Steel Co., Inc., 5 F.3d 39, 43 (3d Cir.
1993) ("[A] statute's provisions should be read to be
consistent with one another, rather than the contrary.").9
We therefore conclude that the purported impossibility of
Geevers's absconding with the full amount of his worthless
deposits did not render erroneous the District Court's
factual conclusions about Geevers's intended loss.
III.
Finally, Geevers argues that if the District Court was
correct to consider the face value of his deposited checks in
calculating his intended loss, he should at least receive the
benefit of U.S.S.G. S 2X1.1(b)(1), which provides for a three-
level guideline reduction for attempts. Geevers maintains
that he qualifies for this reduction because he had not
drawn the full amount of money that he falsely deposited at
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9. We also note that our interpretation of the guideline's text is
supported by the need to deal with culpability in a proportional manner.
"Limiting intended loss to that which was likely or possible . . . would
eliminate the distinction between a defendant whose only ambition was
to make some pocket change and one who plotted a million-dollar fraud."
United States v. Studevent, 116 F.3d 1559, 1563 (D.C. Cir. 1997).
In discussing Application Note 11 in a footnote in his reply brief,
Geevers argues that his trial counsel should have moved for a departure
on the grounds that the sentencing court's lossfigure overstated the
seriousness of the offense. He claims that this was ineffective assistance
of counsel that is established by a sufficient record on appeal so that it
may be considered on direct appeal rather than on collateral review. See
United States v. Cocivera, 104 F.3d 566, 570-71 (3d Cir. 1996). A reply
brief is generally too late to raise an issue under our jurisprudence. See
Hoxworth v. Blinder, Robinson & Co., Inc., 903 F.2d 186, 204-05 n. 29
(3d Cir. 1990). Therefore any such claim will have to be raised under 28
U.S.C. S 2255.
17
the time of his arrest. The District Court based its denial of
this argument on both the guideline's applicability and its
terms:
For the record, I do not believe that it applies, but
assuming for the sake of argument that 2X1.1 applies
to any degree, given the factual circumstances here,
then I do find as a matter of fact, that the 3-point
downward adjustment is not available because it was
the intervention of a third party, either apprehension
by the bank or law enforcement, that prevented . . . the
full flowering of the acts of the offense from occurring.
App. 64.
A.
It is not clear from the record whether Geevers should be
viewed as having pleaded guilty solely to a completed crime
or an attempt. Section 2X1.1(b)(1) provides for the
reduction for an attempt "unless the defendant completed
all the acts the defendant believed necessary for successful
completion of the substantive offense or the circumstances
demonstrate that the defendant was about to complete all
such acts but for apprehension or interruption by some
similar event beyond defendant's control." Application Note
2 explains that " `[s]ubstantive offense,' as used in this
guideline, means the offense that the defendant was
convicted of soliciting, attempting, or conspiring to
commit." The government contends that Geevers was not
convicted of an attempt, but rather the substantive crime of
bank fraud set forth in 18 U.S.C. S 1344, but this does not
dispose of the issue. The statute incorporates both the
completed act and the attempt. See 18 U.S.C.S 1344
("Whoever knowingly executes, or attempts to execute, a
scheme or artifice . . . .") (emphasis added). Indeed, the
District Court did not clearly state whether it thought that
the offense pleaded to resolved the issue. See App. 57 ("18
U.S.C. Section 1344 contains both the completed
substantive offense and the attempt. So the offense statute
does not really tell us one way or the other whether we go
to 2X."). The Court further acknowledged that Geevers's
crime "theoretically, [ ] could be viewed as a series of
attempts to some degree." App. 63.
18
Moreover, Application Note 10 of S 2F1.1 directs the
sentencing court to S 2X1.1.
In the case of a partially completed offense (e.g., an
offense involving a completed fraud that is part of a
larger, attempted fraud), the offense level is to be
determined in accordance with the provisions of
S 2X1.1 . . . whether the conviction level is for the
substantive offense, the inchoate offense . . . or both;
see Application Note 4 in the Commentary toS 2X.1.
We therefore conclude that S 2X1.1 may apply to Geevers.
We turn then to consideration of whether a defendant in
Geevers's shoes fits under the language of the guideline.
B.
Section 2X1.1(b)(1) states that there is no reduction if
"the circumstances demonstrate that the defendant was
about to complete all such acts but for apprehension or
interruption by some similar event beyond defendant's
control." Geevers argues that with respect to the offense to
which he pleaded guilty, the depositing of the worthless
$75,000 check at Bankers Savings, he had never attempted
to draw funds and had even returned the checks that had
been issued him. This argument for applying S 2X1.1(b)(1)
fails based on the facts as represented by Geevers. By
Geevers's own admission, Bankers Savings closed his
account after Merrill Lynch, which had hosted the closed
account on which Geevers attempted to draw, notified
Bankers Savings that the check was not backed by
sufficient funds. This intervention by a third party
prevented Geevers from even attempting to draw on his
worthless check.
There was no legal error in the District Court's
consideration of this fact, nor clear error in the factual
finding that followed: that Geevers would have completed
his intended fraud but for the intervention of a third party.
See United States v. Strozier, 981 F.2d 281, 286 (7th Cir.
1992) (applying similar analysis). Even more damaging to
Geevers's argument is the District Court's explicitfinding
during the colloquy that Banker's Savings closed Geevers's
account upon the warning of Merrill Lynch that Geevers's
19
deposit was not backed by adequate funds, thereby placing
Geevers's conduct squarely within the limiting language of
S 2X1.1(b) for attempts interrupted by events beyond the
defendant's control.
Nor does the language of Application Note 4 aid Geevers.
It provides:
In certain cases, the participants may have completed
(or have been about to complete but for apprehension
or interruption) all of the acts necessary for the
successful completion of part, but not all, of the
intended offense. In such cases, the offense level for
the count . . . [is the greater of the offense level for the
completed offense minus three or the offense level for
the completed part of the offense]. For example, where
the intended offense was the theft of $800,000 but the
participants completed (or were about to complete) only
the acts necessary to steal $30,000, the offense level is
the offense level for the theft of $800,000 minus 3
levels, or the offense level for the theft of $30,000,
whichever is greater.
Because the District Court concluded that Geevers would
have taken the rest of the money but for the interruption by
law enforcement and the intervention of the victim banks,
this commentary is inapplicable.
We acknowledge that an extreme reading of this
application note could be taken to mean that failure to
complete the full range of acts necessary to complete the
fraud automatically demands the reduction,
notwithstanding the interference of third parties. Such a
reading would, however, clash directly with both the text of
the guideline, see S 2X1.1(b)(1), and another part of the
official commentary. The "background" note to S 2X1.1
further explains (with emphasis added):
In most prosecutions for conspiracies or attempts, the
substantive offense was substantially completed or was
interrupted or prevented on the verge of completion by
the intercession of law enforcement authorities or the
victim. In such cases, no reduction of the offense level
is warranted. Sometimes, however, the arrest occurs
well before the defendant or any co-conspirator has
20
completed the acts necessary for the substantive
offense. Under such circumstances, a reduction of 3
levels is provided . . . .
This note, in conjunction with the guideline's text, makes
clear that interruption, except in the early planning stages,
precludes the three-level reduction. On the facts before us,
it was not clear error for the District Court to have
concluded that the intervention by the banks was not"well
before" the completion of the necessary acts for the
substantive offense.10 See United States v. Torres, 209 F.3d
308, 312 (3d Cir. 2000).
For the foregoing reasons, the judgment of the District
Court will be affirmed.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit
_________________________________________________________________
10. Because the intercession of other parties makes clear that Geevers is
ineligible for a reduction under S 2X1.1, we need not explore the
alternative grounds of denial that Geevers had completed all of the acts
necessary for the completion of the offense.
21