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U.S. v. SCARBROUGH

October 10, 2004.

UNITED STATES OF AMERICA,
v.
RICK SCARBROUGH, Defendant.



The opinion of the court was delivered by: ROBERT SWEET, Senior District Judge

SENTENCING OPINION

On April 15, 2004, defendant Rick Scarbrough ("Scarbrough") appeared before the Honorable Douglas F. Eaton of this district and allocuted to the conduct charged in both counts of the information filed that same date, including one count of wire fraud in violation of 18 U.S.C. § 1343 and one count of bank fraud in violation of 18 U.S.C. § 1344. Scarbrough will be sentenced to time served and three years' supervised release. A special assessment fee of $200 is mandatory and is due immediately. There will be no ruling as to restitution at this time.

Background

  The undersigned, having reviewed the Presentence Investigation Report prepared by the United States Probation Office, relies on the facts as set forth therein. The Offense Conduct

  From May 20, 2002 through July 4, 2003, Scarbrough fraudulently obtained funds from his employers through various schemes. From May 2002 through August 2002, Scarbrough worked for MSB Strategies, Inc. ("MSB"). Without approval and without authority, Scarbrough opened on-line computer banking facilities on behalf of MSB with Chase Bank in New York. From June 2002 through July 2002, these on-line banking facilities were used to transfer funds from MSB's account in Manhattan to Paypal accounts controlled by Scarbrough kept in California. These unauthorized transfers totaled at least $8,000.

  Scarbrough remained an employee when the owner of MSB formed a new company called Reiter/Begun Associates, LLC ("Reiter/Begun") in August 2002. In August 2002, Scarbrough began forging signatures on Reiter/Begun checks and deposited those checks to MSB's account, which remained open at Chase Bank in Manhattan. Without approval or authority, Scarbrough transferred the funds from MSB's account over the internet to Paypal accounts he controlled in California. These unauthorized checks and transfers totaled at least $56,000.

  Between June 2003 and July 2003, Scarbrough, acting without approval or authority, utilized electronic funds transfers to withdraw monies from Reiter/Begun's account with Chase Bank in Manhattan and deposited them into accounts he controlled with Paypal in California. These unauthorized transfers totaled at least $8,000.

  From March 13, 2003 through July 2003, Scarbrough forged authorization signatures on Reiter/Begun checks made payable to "Richard Scarbrough." The checks were drawn on an account with Chase Bank in Manhattan and they totaled at least $23,000.

  Scarbrough was arrested on November 7, 2003, in connection with the offenses charged and thereafter released.

  The Defendant

  Scarbrough was born in 1957 in Hiawatha, Kansas, and moved to New York in 1984. Scarbrough became involved in a romantic relationship in 1985 and the relationship lasted until Scarbrough's partner died of AIDS in 1998.

  Scarbrough reportedly commenced smoking marijuana on a daily basis in 1976 and continued until 1996, when his physician referred Scarbrough to a psychiatrist who diagnosed him with major depression and generalized anxiety disorder. Scarbrough then reportedly abused anti-anxiety medicine as well as Ketamine and Ecstasy. In 1998, after his partner died, Scarbrough added alcohol to the mix. In 1999, Scarbrough commenced a series of detoxification and drug treatment programs and he has reportedly not used any illicit substances since that time. In December 2000 he was reportedly employed by MSB as an office manager.

  In July 2003, after Scarbrough was fired by Reiter/Begun as a result of the underlying offense conduct, he became suicidal and was reportedly admitted to the St. Vincent's Hospital Psychiatric Unit in Manhattan for a period of approximately two weeks. While he was at St. Vincent's Hospital, Scarbrough reported a history of panic attacks and suicide attempts. Scarbrough was discharged against medical advice on August 5, 2003 and was admitted to Woodhull Health and Mental Health Center in Brooklyn after overdosing on over-the-counter and psychotropic medications shortly thereafter. He was discharged on August 26, 2003. In October 2003, Scarbrough was diagnosed with bipolar disorder by a psychiatrist at the Valeo Psychiatric Services Clinic in Topeka, Kansas.

  Scarbrough is currently unemployed and his credit report reflects two federal tax liens as well as several ...


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