United States District Court, Southern District of New York
April 30, 2003
UNITED STATES OF AMERICA, AGAINST VICTOR PALAEZ, DEFENDANT
The opinion of the court was delivered by: Robert W. Sweet, United States District Judge
On February 5, 2003, Victor Palaez ("Palaez") pled guilty to one count of conspiracy to commit bank fraud in violation of 18 U.S.C. § 371 and one count of bank fraud in violation of 18 U.S.C. § 1344.
The Offense Conduct
The following information was derived from the information within the charging instrument as well as that contained in an investigative report of the Federal Bureau of Investigation.
In Bronx County, New York in October 1999, Palaez received a stolen check from a co-conspirator in the sum of $125,226. He transferred the stolen check to another co-conspirator who negotiated the check without the authorization of the payee. Subsequently that person provided Palaez with a portion of the proceeds from that check.
In conjunction with this transaction, Palaez was interviewed by law enforcement officials on August 23, 2002, at which time he noted that John Serendensky ("Serendensky") had given him four checks, which totalled $107,800, to negotiate through his account at the Bank of New York, as well as that of his girlfriend, Natahlia Burgos ("Burgos"). Palaez received a fifth check in the sum of $12,500 from Serendensky. That in fact represented his share from the stolen $125,226.50 check that he had provided to Serendensky, which was dated October 4, 1999, and made payable to THEA COM.
According to Palaez, Serendensky, at such time that he initially approached him with regard to the negotiation of the official bank checks, assured Palaez that they were neither stolen nor fraudulent. Though Serendensky never advised him of the origin of the checks, he did say that he was willing to pay Palaez $1,000 for each one that he successfully negotiated. At Serendensky's directive, the checks were deposited into Palaez's account. Once the checks cleared, Palaez was to withdraw the cash proceeds in amounts of less than $10,000 as Serendensky wanted Palaez to avoid having to file a currency transaction report. After Palaez agreed to assist Serendensky in this endeavor, he was then asked if Palaez had access to any other accounts. Palaez offered the use of the account of Burgos.
Palaez was then shown photocopies of five official Bank of New York checks which referenced the following:
Check No. Date Payee Amount
143233727 09/27/99 Victor Palaez $36,300
143233728 09/27/99 Natallia Burgos $36,300
331145163 09/29/99 Victor Palaez $17,600
331145164 09/29/99 Natallia Burgos $17,600
331150122 10/21/99 Victor Perez $12,500
Palaez noted that he had received each of the aforementioned checks from Serendensky, the first two of which were received at the same time. The $36,300 check that was payable to himself was deposited into his account, while the second was deposited into Burgos's account. The proceeds were drawn from both accounts in sums less than $10,000. Palaez gave the money to Serendensky who in turn advised the defendant that he would pay him 10% of the face value for any checks that he could negotiate.
Serendensky gave Palaez the two checks for $17,600 at the same time, and the defendant followed the identical procedure as he did with the others. Palaez kept $4,000 from the first four checks, and turned the balance over to Serendensky.
Palaez was also aware of the fact that his uncle, Luis Jose Nin ("Nin"), had previously been fired from his job over a charge of theft from his employer. When Palaez approached Nin about obtaining stolen checks, Nin furnished him with one that was dated October 4, 1999, in the sum of $125,226.50 and made payable to THEA COM. Palaez gave the check to Serendensky and was subsequently provided with the last check, that was made payable to Victor Perez in the amount of $12,500. Though this represented his share of the stolen check, Palaez presumed that the misspelling of his name would render him unable to deposit same. Nevertheless, Palaez was able to negotiate the check through the business account of his father's employer, Raymond Orozco, of Raymond's Transmissions, at 4689 Third Avenue, Bronx, New York. He then turned over $10,000 to Nin in cash, for having furnished him with the check.
Following further investigation, Palaez surrendered to the Southern District of New York on February 5, 2003.
The total loss is $245,526.
The 1998 edition of the Guidelines Manual has been used in this case in accordance with § 1B1.11(b)(1). Counts I and II are grouped together pursuant to § 3D1.2 (b) because they involve substantially the same harm.
The Guideline for Count I, which involves the conspiracy to commit bank fraud in violation of 18 U.S.C. § 371 is found in § 2X1.1, which provides that the base offense level is that from the guideline for the substantive offense, plus any adjustments from such guideline for any intended offense conduct that can be established with reasonable certainty.
The underlying conduct, as referenced in Count II, involves bank fraud in violation of 18 U.S.C. § 1344. Under the applicable guideline, § 2F1.1, the base offense level is 6.
As the loss was more than $200,000 but less than $350,000, the level is enhanced by 8 to 14, pursuant to $2F1.1(b)-(1)(I)
As the offense involves more than minimal planning, a two-level enhancement to 16 is warranted pursuant to § 2F1.1(b)-(2)(A) or (B)
The adjusted offense level is 16.
Due to Palaez's timely notification of his intention to plead guilty and his acceptance of responsibility, and since the offense level is 16 or greater, he qualifies for a 3-level reduction pursuant to § 3E1.1(a) and (b). The offense is reduced three levels to 13.
Total Offense Level
Palaez's total offense level is 13 under the Guidelines.
Criminal History Category
The defendant has no known criminal convictions. Therefore, he has zero criminal history points and a Criminal History Category of I.
Palaez was born in the Dominican Republic on August 23, 1972. He is the older of two children of the lawful union of Graciela and Victor Manuel Palaez.
Palaez was brought to the United States by his parents when he was three years old. The family settled in the Bronx, New York. As a result of incompatibility and Palaez's father's extramarital affairs, Graciela Palaez filed for divorce in 1987. The mother, now 47, is currently sustained through disability allotments and resides in the Bronx. Victor Manuel Palaez, also 47, works as a mechanic and resides with his second wife at a separate residence in the Bronx. According to Palaez, both parents are aware of his legal status and have rendered complete emotional support.
Palaez's sister, Elica, age 25, works in a furniture store and resides with the mother.
Palaez has four half-brothers, all of whom are his father's sons.
In a civil ceremony conducted in Bronx County on December 17, 1997, Palaez married Jocelyn Alvarez. There were no children born to this union which, within months, ended in a separation. Palaez stated that although he had known Alvarez since 1990, they were not compatible for marriage. Presently, Alvarez lives with her partner in the Bronx.
Shortly after his separation from Alvarez, Palaez commenced a relationship with Nathalia Burgos. Twin girls were born to the couple on September 21, 2002, named Isabela and Anabela. Burgos, a 30-year-old clothing company employee, is also the mother of an eleven-year-old daughter. Though Palaez has maintained his mother's residence as his legal address, Palaez has cohabited with Burgos for the last three years in New York, New York.
Burgos has depicted Palaez in a highly auspicious manner and, despite the instant offense, remains completely supportive.
Palaez attained naturalized United States citizenship status in the Eastern District of New York on February 18, 2000.
Since April 2002, Palaez has been employed in the Network Operations Department for the New York City Administration for Children's Services at 150 William Street, New York, New York, at an income of $51,00 per annum. His immediate supervisor is aware of his legal status.
From July 1990 until August 24, 2002, Palaez was employed for the New York City Housing Authority ("NYCHA"). The Operations Manager of the NYCHA, Delores Harris, noted in part that Palaez "is a personable young man. He maintained a responsible position here in our Technology Center. Victor established performance standards, and more effective problem solving techniques. He supervised staff who operated computer consoles on our large mainframe system, and PC's on our Microsoft Intranet. Victor assigned, planned and reviewed senior computer operations staff and assumed the responsibility for their satisfactory work performances. Victor was a valued member of our staff. He was honest, dependable, prompt, and a definite self-starter."
Applicable Guidelines Range
The statutes under which Palaez plead guilty provide for a maximum sentence of five years' imprisonment on Count I, pursuant to 18 U.s.c. §§ 371 and a maximum sentence of thirty years' imprisonment on Count II, pursuant to 18 U.s.c. § 1344. The Guidelines range for an offender with a base offense level of 13 and a Criminal History Category of I is 12 to 18 months' imprisonment.
In light of the foregoing, Palaez shall be sentenced to 12 months' imprisonment, to be followed by two years' supervised release, and a mandatory special assessment of $200.
Palaez will also be required to make restitution to the victims identified by the Government, in an amount to be provided by the Government. The Order shall be delayed, pursuant to 18 U.S.C. § 3554 (d)(5), for 90 days after sentence in anticipation of receiving the necessary identifying information from the Government.
The restitution shall be joint and several with any restitution eventually ordered for Serendensky, 00 Crim. 320. Palaez will make restitution to such persons in sum ordered by the Court, except that no further payment shall be required after the sum of the amounts actually paid by all the defendants has fully covered all of the compensable injuries. Any payment made by Palaez shall be divided among the persons named in proportion to their compensable injuries.
Palaez shall pay the restitution in monthly installments of 10% of gross monthly income over a period of supervision to commence 30 days after the date of judgment or the release from custody if imprisonment is ordered.
The defendant shall notify the United States Attorney for this district within 30 days of any change of mailing or residence address that occurs while any portion of the restitution remains unpaid.
The following conditions of supervised release are mandatory: Palaez shall not (1) commit another federal, state or local crime; (2) illegally possess a controlled substance; or (3) possess a firearm or destructive device. The mandatory drug condition is suspended based on the Court's determination that Palaez poses a low risk of future substance abuse.
Palaez will be subjected to the standard conditions of supervision (1-13). In addition, he is to provide the probation officer with access to any requested financial information. He shall not incur any new credit charges or open additional lines of credit without the approval of the probation officer unless the defendant is in compliance with the installment payment schedule. He is to report to the nearest probation office within 72 hours of release from custody and is to be supervised by the district of residence.
This sentence is subject to further hearing on May 5, 2003.
It is so ordered.
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