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U.S. v. MAURER

July 26, 1999

UNITED STATES OF AMERICA,
v.
SCOTT MAURER, DEFENDANT.



The opinion of the court was delivered by: Scheindlin, District Judge.

  OPINION

Background

Defendant Scott Maurer is a 36 year old man who, up to the time of the instant offenses, had no interaction with the criminal justice system. In September 1998, he was found guilty of one count of wire fraud following a jury trial. Thereafter, he pled guilty to two subsequent indictments, one for forged endorsements on Treasury checks and the other for bank fraud. At defendant's request, the Court has agreed to consolidate these cases for sentencing. These cases are summarized as follows:

1: 97 CR 1326-01 is a one-count indictment charging wire fraud. Mr. Maurer was convicted of this charge following a trial in which he was found guilty. The criminal conduct here occurred between December 1995 and December 1996 and involved fictitious invoices from his court reporting business to Interim Services, Inc., an outside payee (the "Interim" case).

2: 98 CR 852-01 is a one-count indictment charging conspiracy to pass Treasury checks bearing falsely made and forged endorsements. Mr. Maurer pled guilty to this charge on December 17, 1998. The criminal conduct here occurred between January 1993 and June 1994 and involved the cashing of Mr. Maurer's deceased grandfather's social security checks (the "Social Security" case).

3: 98 CR 1452-02 is a four-count information charging four counts of bank fraud. Mr. Maurer pled guilty to these charges on January 17, 1999. The criminal conduct here occurred between June 1994 and May 1995 and involved the submission of forged checks to Chase Manhattan Bank and Fleet Bank (the "Forged Check" case).

All counts of conviction are grouped together pursuant to United States Sentencing Guideline ("U.S.S.G." or the "Guidelines") § 3D1.2(d), as the offense level is determined largely on the basis of the total amount of loss. The applicable guideline for these offenses is found at § 2F1.1(a), which requires a base offense level of 6.

There are a number of disputes in this case, both as to (1) offense level: specifically, the intended loss amount, obstruction of justice and acceptance of responsibility; and (2) departures: specifically, the government's motion for an upward departure based on criminal history category, and the defendant's motion for a downward departure based on community involvement and family circumstances. I will address each of these issues seriatim.

Offense Level

A. Intended Loss Amount

The increase in the base offense level is set by determining the amount of the actual loss or the intended loss, whichever is greater. See Application Note 8 to § 2F1.1. See also United States v. Mills, 987 F.2d 1311, 1315-16 (8th Cir. 1993) (use entire $1.5 million fraudulently received from victims as loss amount even though defendant returned approximately half in response to threatened legal action); United States v. Katora, 981 F.2d 1398, 1406 (3d Cir. 1992) (use the greater intended loss even though actual loss is easily calculated).*fn1 The amount of loss in the Social Security case is not in dispute. The Government and the defense agree that the loss in that case amounted to $10,486. Similarly, the amount of loss in the Forged Check case is not in dispute. The Government and the defense agree that the total amount of the intended loss in that case amounted to $31,350.77.

The amount of loss is in dispute with respect to the Interim case. Before computing the amount of loss, it is first necessary to describe the scheme to defraud employed by the defendant in that case. Interim Services, Inc. ("Interim") and Westchester Reporting Service ("Westchester")*fn2 entered into an agreement whereby Interim would advance the payment of Westchester's court reporting invoices for a fee. A simple example will serve to explain how the agreement was supposed to work. Assume that Westchester used an independent court reporter to take a deposition. Assume further that the invoice to the law firm client was $2,000. Interim would pay, for example, $1,000 directly to the court reporter,*fn3 and then forward 84% of the gross profit to Westchester, here $840, known as the net profit. It would retain, as its fee, 16% of the gross profit, here $160. If the client failed to pay the $2,000 after 150 days, Westchester would be required to pay back to Interim the entire invoice amount of $2,000. This is known as a charge-back.

Here, the defendant submitted 332 fictitious invoices to Interim for court reporting services allegedly performed by AACR.*fn4 These invoices were fictitious in that there was no client, nor was there a court reporting job. The total amount that Interim would have paid on these invoices is $593,187, namely the court reporter component of each invoice and the net profit component of each invoice. The total face amount of the invoices was $628,014.80. This number includes the 16% of the gross profit on each invoice that Interim would retain for itself.

It is undisputed that Interim did not "lose" all of the $593,187 because some of that amount was "charged back" by Interim. In addition, the defendant anonymously paid back some of this amount to keep the scheme going. The question, then, is how to calculate the actual loss or the intended loss, whichever is greater, for the purpose of properly calculating the offense level.

The defendant argues that he should only be responsible for that money which found its way into his pocket. Interim would cut two separate checks — one to the fictitious court reporter and one to Westchester for the net profit. The defendant cashed the court reporter component, but the net profit component was put into Westchester's business. He argues that he could not have intended to steal the net profit amount paid to Westchester because he knew that he could not get at that money. Defendant further argues that because of the charge-back system, he could not have intended to steal the full amount of the invoice. He believes that he is entitled to credit for the amount of money charged back by Interim and for any money he paid back to Interim — namely $75,000.

Defendant's argument is flawed because it focuses on the amount gained by the defendant rather than the amount lost by the victim. He argues that because he could not get at the portion paid to Westchester, it should not be included in the loss amount. This is simply wrong. That amount is part of the intended loss, ...


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