United States 7th Circuit Court of Appeals Reports
U.S.A. v. PETERSON-KNOX, 05-3554 (7th Cir. 12-20-2006)
UNITED STATES OF AMERICA, Plaintiff-Appellee, v. KELLY
PETERSON-KNOX, Defendant-Appellant. No. 05-3554. United
States Court of Appeals, Seventh Circuit. Argued April 13,
2006. Decided December 20, 2006.
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division. No. 01 CR
1093 — Harry D. Leinenweber, Judge.
Before COFFEY, KANNE and WILLIAMS, Circuit Judges.
COFFEY, Circuit Judge.
On October 3, 2002, a federal grand jury indicted Kelly
Peterson-Knox (“Peterson”), and her fellow conspirators,
Michael Knox, Joe Fasanella, Charlie Rogers, and James
Babiarz for mail fraud, 18 U.S.C. §§ 1341,
1346, and 2. The sixteen-count indictment alleged that
Peterson and the above-named conspirators engaged in a
scheme to defraud Ameritech by arranging for
Ameritech-owned computers to be shipped and sold for profit
to non-Ameritech personnel without authorization. Peterson
initially pleaded not guilty to each of the sixteen counts
charged, but subsequently withdrew her plea and entered a
plea of guilty to one count of mail fraud, without the
benefit of a formal written plea agreement. After accepting
Peterson’s plea and entering a judgment of conviction, the
district court judge sentenced her to a term of 30 months’
imprisonment and three years’ supervised release,
restitution (to Ameritech) in the amount of $507,600, $100
special assessment, and dismissed the remaining fifteen
counts. Peterson appeals her sentence, contending that the
district court improperly applied the advisory Sentencing
Guidelines. She argues that the evidence presented at
sentencing failed to support the findings underlying the
three enhancements in her offense level. She requests that
her sentence be vacated and remanded for resentencing.
Affirm.
I. Factual Background
According to the indictment, Peterson and Knox (her
husband) were the organizers and lead conspirators in a
plan to defraud the Ameritech company between September of
1999 to early May of 2000. During this time frame the two
became romantically involved and also began to share a
residence. During the course of the fraud, Peterson served
as manager of Ameritech’s Business Communication Services
— Desktop Support Division and was responsible for
supplying laptop computers exclusively to Ameritech
personnel at various locations within the United States for
use in conducting Ameritech business. Her position
authorized her to order computers and arrange for the
shipment thereof based on orders received from various
department heads within the corporation. It is interesting
to note that Michael Knox, in his capacity as a manager of
the Information Technology Department, also had the
authority to order and ship computers to Ameritech
employees. In connection with their employment, both
Peterson and Knox had agreed and were obligated to follow
Ameritech’s Code of Business Conduct, which required that
employees are not allowed to use corporate property for
personal use nor engage in any form of fraud. Despite that
agreement, the two organized and operated a scheme to sell
and ship Ameritech-owned computers to themselves and their
co-conspirators. The conspirators, on occasion, also on
their own arranged for the sale of the computers to third
parties as part of this venture. Peterson let her
co-conspirators know that she expected to receive $800 from
each sale, while allowing Fasanella and others in the
conspiracy ring to retain any additional funds received
from the transaction. Peterson and Knox would submit an
inflated number of orders, calling for the shipment of a
greater number of new Dell laptops to be purchased than
requested by the department heads. Due to Peterson’s and
Knox’s managerial positions in the organization, the orders
were approved without hesitation. Peterson’s department was
solely responsible for the delivery of the computers to
authorized Ameritech employees, thus leaving Peterson in
control of the excess laptops generated with falsified
purchase orders. Peterson or Knox would take possession of
the surplus laptops, and would usually package them into
different boxes. Once received in Peterson’s department
they would arrange to address the packages to their fellow
conspirators, fraudulently indicating on shipping labels
that the packages were destined for Ameritech employees,
and arrange for the transfer thereof to the shipping dock
to be delivered via United Parcel Service (“UPS”).
During the first four months of the operation, Knox and
Peterson addressed the computer shipments to their shared
residence or to Joe Fasanella’s (Peterson’s brother), his
home or work address. Initially, Fasanella would hold the
packages until Peterson was able to pick them up. In the
fall of 1999, Fasanella began selling the new Dell laptop
computers at his home via classified newspaper
advertisements.
Shortly after Fasanella became a retailer for the stolen
laptops, Peterson inquired of him whether he knew of anyone
else that might be interested in buying or selling the
ill-gotten computers. Fasanella in turn contacted one
Charlie Rogers, who had earlier purchased one of the
computers from him in the fall of 1999, and at the time
expressed an interest in receiving additional laptops.
During an earlier conversation with Fasanella, Rogers
agreed to take part in the retailing of the hot computers
and then began to receive shipments in January of 2000 at
his place of employment, a car dealership. Rogers proceeded
to sell a number of the computers, and returned the unsold
laptops to Fasanella. Rogers, like Fasanella, was allowed
to keep any proceeds in excess of the $800 per computer he
was obligated to give to Peterson pursuant to their
agreement. In January of 2000 alone, Rogers received ten
shipments, each consisting of four new laptops. After
several weeks Rogers’s immediate superior at the car
dealership ordered him to cease receiving any more
shipments at work.
In light of the inability of Rogers to continue to receive
computers at work, Fasanella attempted to convince Rogers
to accept the shipments at his residence. In fact,
Fasanella went so far as to detail to Rogers the inner
workings of the conspiracy and assured him that no one at
Ameritech had or would detect the missing laptops because of
the supervisory and upper managerial positions Peterson and
Knox held in the company. Fasanella also explained that
because of Ameritech’s lack of sufficient internal controls
and inadequate security, the laptops were sitting out in
the open in the hallways, leaving them open to the
opportunity for almost any passerby to walk off with a
computer. Based on this information, Rogers agreed to
receive the computer shipments at his home and, in order to
ensure his anonymity, he asked that the laptops be
addressed to his father-in-law, “Joe Koszela.” Fasanella
agreed and arranged for the necessary arrangements, and the
shipments resumed.
From January 26, 2000, to February 10, 2000, Rogers
received approximately sixty of Ameritech’s new Dell
laptops at his home via UPS. Despite the enterprise’s
ongoing success and Fasanella’s assurances that Ameritech
would not be tracking the packages, Rogers became
increasingly wary of his participation in the illegal sales
plot. Thus, after serving as the sole sales person for 100
hot computers for nearly two months, in early February of
2000, Rogers told Fasanella he was no longer interested in
continuing to participate in the computer sale out of his
home. Rather than end his involvement in the theft and sale
program and forfeit the further profit, Rogers suggested
that the deliveries be made to a James Babiarz, who Rogers
had learned, after speaking with a third-party (identified
only as “Individual A”), was willing to also take part in
the fraudulent strategy.
Fasanella agreed, and on February 15, 2000, Babiarz
received his first shipment at his home (consisting of
seven new Ameritech laptops) under the alias “John Kelly.”
Initially, Babiarz served solely as a middleman, and agreed
to deliver the computers to Rogers immediately upon receipt
of the same. But, in late February, after participating as
a “go-between” in a number of shipments, Babiarz’s status
changed at his request and he began to take an active part
in the fraudulent sale scheme, retailing a number of the
laptop computers from his home.
After shipping some 200 computers over the course of eight
months (Sept. 1999-May 2000), the plot began to unravel. In
early May of 2000, an Ameritech employee discovered that
several UPS shipments were addressed and being forwarded to
non-Ameritech locations. Concerned, the employee contacted
Susan Meyer, an investigator in Ameritech’s Corporate
Security Department. Shortly after Meyer became aware of the
in-house problem she commenced her investigation and began
with a review and a comparison of the shipping records of
UPS and Ameritech and discovered shortly thereafter that
during the preceding sixteen months a number of deliveries
had been made to non-Ameritech locations to persons whom
she believed were not affiliated with the company.
Specifically, Meyer identified each of the addresses
participating in Peterson and Knox’s fraudulent
artifice,[fn1] including Babiarz. On May 10, 2000, Meyer
intercepted and took custody of a package in Ameritech’s
shipping department addressed to Babiarz’s residence. Meyer
summoned law enforcement officers to Ameritech’s offices,
opened and inspected the suspect package and discovered
several new Dell laptop computers therein. At this time the
officers arranged for a controlled delivery to his address,
and during a search of Babiarz’s residence subsequent to
the delivery and his arrest, officers uncovered several
empty Dell laptop computer boxes. And upon comparing the
serial numbers of the computers with Ameritech’s purchase
and delivery records, Meyer determined that each of the
boxes contained one new Dell laptop.
After receiving this information from Meyer, Ameritech
senior officers directed her and other corporate personnel
to continue with an in-depth investigation in hopes of
ascertaining the magnitude of the fraud. Based on their
investigation, Meyer and her team discovered that during
the years 1999 and 2000 Ameritech purchased 1,945 new Dell
laptop computers, all of which had been routed and shipped
to and through Peterson’s department. Next they compared
UPS shipping records with Ameritech records and work orders
in hopes that it might assist in determining whether or not
that any of the computers had previously been used. They
also contacted a number of former and current Ameritech
employees and searched stockrooms and other company
facilities where computers might have been stored.
Ultimately, Meyer was unable to account for 646 of the
1,945 laptop computers purchased by Ameritech and recorded
as having been received in Peterson’s department. Upon
further investigation and review of UPS and Ameritech
records, Meyer determined that at least 216 of the 646
missing laptops were delivered to the addresses of the
individuals referred to by Peterson and Knox in carrying out
their fraudulent scheme.[fn2]
After completion of the joint investigation, the evidence
of fraud was presented to a grand jury convened for that
purpose. The grand jury subsequently returned a
sixteen-count indictment, charging Peterson, Knox, and
their fellow conspirators (Fasanella, Rogers, and Babiarz)
with mail fraud, contrary to 18 U.S.C. §§ 1341
and 1346. Fasanella went to trial and was found guilty
while Rogers, Babiarz and Knox entered guilty pleas. As
Peterson’s trial date became imminent, and when faced with
a mountain of evidence, she withdrew her plea of not guilty
and entered a plea of guilty to one count of mail fraud
without the benefit of a formal written plea agreement on
March 18, 2003, approximately two weeks before the matter
was set to proceed to trial.
After the close of evidence at Peterson’s plea hearings,
the government argued that her base offense level of six
should be increased ten points based on the amount of loss
(value of the misappropriated computers), U.S.S.G. §
2F1.1(b)(1) (1998);[fn3] two points for more than minimal
planning, § 2F1.1(b)(2); four points based on her
role as an organizer or leader in the conspiracy, §
3B1.1(a); and two points given for abusing a position of
trust, § 3B1.3. Ultimately, after awarding a
two-level decrease due to her acceptance of responsibility,
§ 3E1.1(a),[fn4] the government calculated
Peterson’s total offense level at 22 and recommended a
sentence of 46 months’ imprisonment. Peterson did not
contest the applicability of § 2F1.1(b)(2), conceding
that the offense involved more than minimal planning, but
she did object to each of the government’s remaining
recommended offense level enhancements referred to above as
well as the sentence recommended.
At the close of Peterson’s three sentencing hearings, the
trial judge determined the amount of loss Ameritech
incurred to be somewhere between $500,000 and $800,000, and
thus increased Peterson’s offense level accordingly by ten
points. The court calculated the loss amount multiplying
216, the number of new computers determined to have been
stolen during this phase of the fraud, by $2,350 (a
conservative estimate of each computer’s value)[fn5]
]resulting in a loss of $507,600. This amount of loss
incurred increased Peterson’s offense level from six to
sixteen. After finding that the offense involved established
more than minimal planning, § 2F1.1(b)(2)(a); that
Peterson was an “organizer, leader, manager, or supervisor
in any criminal plan,” § 3B1.1(c); abused a position
of trust in committing the offense, § 3B1.3; and had
accepted responsibility, § 3E1.1(a); the judge
calculated Peterson’s adjusted total offense level at 19,
yielding a guideline sentencing range of 30 to 37 months.
Noting that he saw no reason to exceed the minimum under
the Guidelines, the trial judge sentenced Peterson to a
term of 30 months’ confinement followed by three years of
supervised release, a $100 special assessment and ordered
that she jointly and severally make restitution payments,
with each of her co-defendants, to Ameritech in the total
amount of $507,600.[fn6] The following day, the remaining
fifteen counts of mail fraud filed against Peterson were
dismissed pursuant to the agreement with the prosecutor’s
office on motion of the government.
II. Issues
On appeal Peterson raises three challenges to the
sentencing court’s application of the Guidelines. She
contends that the imposition of a ten-point increase in her
offense level pursuant to § 2F1.1 was improper
because the sentencing judge’s calculation of the loss was
not supported in the evidence. She also argues that the
district court’s determination that she was an organizer,
leader, manager, or supervisor of the fraud for purposes of
§ 3B1.1(c) was erroneous. And further, she disputes
the imposition of a two-level increase based on her abuse
of a position of trust, § 3B1.3.
III. Discussion
A. Calculation of Loss
Section 2F1.1(b) of the Sentencing Guidelines applies to
crimes of fraud and deceit and permits a sentencing judge
to increase a defendant’s guideline offense level pursuant
to the amount of monetary loss resulting from the
defendant’s criminal activity. The district court’s finding
that Ameritech suffered a loss of $507,600 due to the
criminal actions of Peterson and her co-conspirators
resulted in the ten-point increase in her offense level.
A trial court’s calculation of the loss caused by a
defendant’s fraudulent conduct is a finding of fact,
reviewed on appeal for clear error only. United States v.
Dillard, 43 F.3d 299, 309 (7th Cir. 1994) (citing United
States v. Strozier, 981 F.2d 281, 283 (7th Cir. 1992)).
“For purposes of [ § 2F1.1(b)(1)], the loss need not
be determined with precision.” U.S.S.G. § 2F1.1,
Application Note 9. Rather, “[t]he [sentencing] court need
only make a reasonable estimate of the loss, given the
available information.” Id. When appealing a district
judge’s calculation of loss, the defendant bears a heavy
burden in his attempt to prove that the determination “was
not only inaccurate but outside the realm of permissible
computations.” United States v. Lopez, 222 F.3d 428, 437
(7th Cir. 2000) (citing United States v. Hassan, 211 F.3d
380, 383 (7th Cir. 2000)). “Reversal is warranted only if
the district court’s loss calculation evokes a `definite
and firm conviction that a mistake has been made.'” United
States v. Schaefer, 291 F.3d 932, 937 (7th Cir. 2002)
(quoting United States v. Strache, 202 F.3d 980, 984-85
(7th Cir. 2000)).
In the present case, we are convinced that the government
offered more than sufficient evidence to establish the
total number of computers shipped to the various addresses
associated with the fraud (216) as well as evidence
pertaining to the value of each of the new Dell laptop
computers purchased by Ameritech ($2,350). Next the
government established a calculation of the loss based on
the aggregate value of the number of laptop computers
shipped to those addresses ($507,600). Peterson did not
dispute that 216 computers were taken from Ameritech
offices without consent as part of the scheme much less the
estimated value of each new Dell laptop. Instead, her sole
contention was that the first twenty-four illegally
misappropriated computers were used rather than new
laptops, and, thus, the government’s loss calculation was
inaccurate (inflated). In support of her position, Peterson
presented documentary evidence of an interview between one
of her co-defendants, Joe Fasanella, and the government.
During the interview, Fasanella (Peterson’s brother) stated
that the computers he initially received “appeared to be
used.” Peterson goes on to argue that Fasanella’s
statements, combined with her contention that the first
twenty-four computers were in fact used, establishes clear
error was committed on the part of the district judge when
he calculated the amount of loss. We disagree.
In response to Peterson’s contention at sentencing that
some (24) of the computers were in fact used, the
government presented evidence to the contrary, including
the testimony of Ameritech Investigator Susan Meyer, who
was responsible for conducting the in-depth investigation
of the fraud. When directly questioned if, during the
course of her investigation, she discovered any evidence
supporting Peterson’s claim that some of the 216 computers
at issue were used, Meyer was emphatic and clear that
“[she] found no evidence to that [effect].” Meyer also
testified that in September of 1999, Ameritech instituted
new tracking procedures for its used laptops, ensuring an
accurate record of their whereabouts once they had been
shipped or returned to the company. In corroboration of
Investigator Meyer’s testimony that each of the computers
was in fact new rather than used, the government introduced
the prior sworn testimony of Charlie Rogers (from
Fasanella’s trial), another of Peterson’s co-defendants. At
the trial of Peterson’s brother, Joe Fasanella, Rogers
testified that he purchased a new laptop computer from
Fasanella in the fall of 1999, during the time period when
Peterson contends that only used computers were
shipped.[fn7] This evidence is obviously in direct
contradiction to that of Peterson who stated that the first
twenty-four computers were, in fact, used laptops.
And while Peterson contends that Fasanella’s statements
should be afforded significant weight when calculating the
amount of loss, considerable evidence to the contrary was
presented to the trial judge. As an example, in his written
statement Fasanella admitted that he had never opened any
of the packages of the purportedly used computers, and
simply relied on Peterson’s representations to him when
arriving at his conclusion that they were used.
Furthermore, several other statements Fasanella made during
the course of the interview were in direct conflict with
the documentary evidence presented to the court. Because
the sentencing judge’s calculation of loss was formulated
only after resolving the factual dispute over the question
of whether the laptops were new or used — which was
inherently dependent on his assessment of the credibility
of Meyer and Rogers — we give special deference to
his finding, as he had the best opportunity to observe the
witnesses while testifying in the courtroom. Mlsna v.
Unitel Communications, Inc., 91 F.3d 876, 880 (7th Cir.
1996) (“district court determinations of credibility are
entitled to special deference, since they often depend on a
witness’s demeanor and appearance on the stand, from which
appellate courts are totally removed”) (citations omitted).
See also United States v. Mancillas, 183 F.3d 682, 701 n.
22 (7th Cir. 1999) (“[w]e do not second-guess the [trial]
judge’s credibility determinations because he or she has
had the best opportunity to observe the verbal and
non-verbal behavior of the witnesses focusing on the
subject’s reactions and responses to the interrogatories,
their facial expressions, attitudes, tone of voice, eye
contact, posture and body movements, as well as confused or
nervous speech patterns in contrast with merely looking at
the cold pages of an appellate record”) (alterations in
original) (United States v. Garcia, 66 F.3d 851, 856 (7th
Cir. 1995)). After review, we hold that Peterson has failed
to establish that the district court erred in calculating
the amount of loss and imposing a ten-point increase in her
offense level pursuant to § 2F1.1(b).
B. Role in the Offense
Peterson next claims that it was clear error for the
district court to find that she was an organizer, leader,
manager, or supervisor under the Guidelines. Again she
argues that the judge’s determination was not supported
with sufficient evidence. Specifically, she avers that the
record was barren of any evidence establishing that she had
recruited anyone to participate in the plot or that she
exercised control over any of the other participants. We
disagree.
Under U.S.S.G. § 3B1.1(c), a defendant’s offense
level is increased by two points “if the defendant was an
organizer, leader, manager, or supervisor” of the criminal
activity for which he or she was convicted. In determining
the provision’s applicability, a sentencing court should
consider the following factors:
the exercise of decision making authority, the nature of
participation in the commission of the offense, the
recruitment of accomplices, the claimed right to a larger
share of the fruits of the crime, the degree of
participation in planning or organizing the offense, the
nature and scope of the illegal activity, and the degree
of control and authority exercised over others.
U.S.S.G. § 3B1.1, cmt. (n. 4). No single, particular
factor need be present to justify an offense level
increase, United States v. Fones, 51 F.3d 663, 665 (7th
Cir. 1995) (citations omitted), nor must each be afforded
equal weight, United States v. Matthews, 222 F.3d 305, 307
(7th Cir. 2000). Rather, each factor should be weighed in
light of the Guideline’s specific intent: “to punish with
greater severity the leaders and organizers of criminal
activity.” United States v. Sierra, 188 F.3d 798, 804 (7th
Cir. 1999). See also Fones, 51 F.3d at 665 (“[t]he central
purpose of § 3B1.1 is to punish a defendant for his
relative responsibility within a criminal organization. . .
. [h]ence, no single factor is essential to determining
whether a sentence should be adjusted under [the
guideline]”) (internal citations omitted). “The district
court’s determination concerning the defendant’s role in
the offense is a finding of fact, subject to a clearly
erroneous standard of review on appeal.” United States v.
Hankton, 432 F.3d 779, 793 (7th Cir. 2005) (internal
quotation marks and citation omitted).
At sentencing, the government presented a wealth of
information (factors) in support of its position that
Peterson was an organizer or leader within the meaning of
§ 3B1.1(a). Ameritech Investigator Susan Meyer
testified that Peterson received almost every new Dell
laptop computer ordered by Ameritech and shipped out to
designated recipients. Because of this, Peterson obviously
had significant control over the number of computers
ordered and shipped out. There is no doubt that Peterson
alone was responsible for the receipt and shipment of
approximately forty-five laptop computers to her
co-conspirators between March and May of 2000. Thus, the
totality of information in the record certainly weighs
heavily in favor of finding that Peterson was an organizer,
leader or manager under the Guidelines. See Fones, 51 F.3d
at 666 (discussing the defendant’s control over the amount
of contraband transacted in the context of evaluating the
applicability § 3B1.1).
In further support of a role adjustment, the government
presented more than sufficient evidence demonstrating the
considerable degree of control Peterson exercised over many
of the co-defendants and the entire fraudulent scheme. It
offered statements from Peterson’s brother, Joe Fasanella,
wherein he detailed how Peterson had approached him and
asked if he knew anyone interested in buying or selling the
computers. Based on that conversation, Fasanella enlisted
the services of Charlie Rogers, who, at a later date,
recruited James Babiarz. Fasanella’s enlistment of Rogers,
at Peterson’s insistence, like her ability to dictate the
size and frequency of the shipments, is indicative of
Peterson’s leadership role and control within the criminal
enterprise and satisfies application of § 3B1.1(c).
Fasanella’s statements also demonstrated that Peterson and
Knox received the bulk of the ill-gotten proceeds from the
criminal activity. During a meeting with law enforcement
officers, Fasanella stated that Peterson insisted that she
receive $800 for each of the computers sold under the
table. He estimated that he turned over to Peterson and
Knox between $70,000 and $80,000 cash in total to the
fraudulent scheme. Bank account records confirmed
Fasanella’s statement, revealing that during the course of
the fraud Peterson and Knox deposited approximately $60,000
in cash into their accounts plus an additional $6,000 in
cash that was used to pay various expenses associated with
Peterson and Knox’s wedding in August of 2000.
In spite of the evidence presented to the trial court,
Peterson somehow justified characterizing her role as only
that of a “middleman,” fronting contraband (computers) to
the enterprise’s fellow participants in a manner similar to
that commonly found in drug cases, undeserving of an
increase under § 3B1.1. See United States v. Vargas,
16 F.3d 155, 160 (7th Cir. 1994); United States v. Brown,
944 F.2d 1377, 1381-82 (7th Cir. 1991); United States v.
Guyton, 36 F.3d 655 (7th Cir. 1994). We agree with the
sentencing court that the facts in this case clearly
establish that Peterson’s role in this criminal offense was
far more important than that of a “middleman.” She
determined the number and frequency of the fraudulent
shipments, participated in the recruitment of additional
members to carry out the fraudulent plot, and set the price
she would be paid for each computer sold. Peterson was the
heart, soul and main artery of the fraud. This being the
case, we refuse to hold that the district court clearly
erred in applying § 3B1.1(c).
C. Abuse of Trust
Section 3B1.3 of the Sentencing Guidelines provides for a
two-point increase in a defendant’s offense level if “the
defendant abused a position of public or private trust . .
. in a manner that significantly facilitated the commission
or concealment of the offense.” In determining whether the
provision applies, this court employs a two-part test that
tracks the Guidelines. United States v. Sierra, 188 F.3d
798, 802 (7th Cir. 1999). Initially, we review “whether the
defendant occupied a position of trust; and [second, we
examine] whether [the] abuse of [that] position of trust
significantly facilitated the crime.” United States v.
Stewart, 33 F.3d 764, 768 (7th Cir. 1994). The district
court’s determination in each respect is a factual one,
which we review for clear error. Id.
Because Peterson does not argue that her management
position was not a position of trust, we need only
determine whether her abuse of that position facilitated
the offense. See, e.g., Palmquist v. Selvik, 111 F.3d 1332,
1342 (7th Cir. 1997) (“Even an issue expressly presented
for resolution is waived if not developed.”). A defendant’s
position of trust significantly facilitates a crime for
purposes of § 3B1.3, “if the defendant’s position
made it substantially easier to commit or conceal the
crime, significant facilitation occurred.” Sierra, 188 F.3d
at 802 (citing Stewart, 33 F.3d at 768). In an effort to
prove the district court committed clear error, Peterson
goes out on a limb contending that Ameritech’s lack of
proper safeguards and controls against computer theft
facilitated her commission of the fraud. Her theory falls
far short of achieving its desired result. It was
Peterson’s position of trust that enabled the fraud to
commence and continue until Meyer took over.
Peterson violated her position of trust by taking advantage
of the company’s lack of safeguards, checks and controls in
the purchasing and shipping departments. Peterson was able
to create a surplus computer inventory because Ameritech
had entrusted her with the authority to order, receive and
distribute laptops to its employees without installing a
foolproof auditing and control system. The orders she
submitted to Ameritech’s purchasing department were almost
automatically “approved without hesitation,” ensuring that
her criminal activity (false orders) would go undetected.
Obviously she violated her managerial position and
Ameritech’s Code of Business Conduct. Also, Peterson’s
position enabled her to create and destroy shipping labels
used in furtherance of the scheme and to direct unwitting
subordinates to ship computers to non-employees, which
concealed her personal involvement, without arousing
suspicion. From the wealth of evidence presented to the
district judge, it is apparent that Peterson’s position and
authority significantly facilitated the commission of the
offense and the concealment of her involvement, thereby
justifying the increase in the period of confinement under
§ 3B1.3.
IV. Conclusion
We hold that the district court did not err in imposing a
ten-point increase in Peterson’s offense level based on its
calculation of loss, pursuant to § 2F1.1(b); a
two-point increase based on its determination that she was
an organizer or leader of the criminal activity, under
§ 3B1.1(c); and a two-point increase based on its
finding that she abused a position of trust, as
contemplated by § 3B1.3. Peterson’s sentence is
AFFIRMED.
[fn1] In all, Peterson and Knox shipped computers to seven
non-Ameritech locations between September 1999 and May
2000: their joint residence, Joe Fasanella’s residence and
place of employment, Charlie Rogers’s residence and place
of employment, James Babiarz’s residence, and the workplace
of Peterson’s mother, who unwittingly received the
computers and turned them over to Peterson and was not
involved in this prosecution.
[fn2] The investigators took the controlled package and
weighed it knowing the number of laptops in the controlled
package. Meyer calculated that each of the laptops weighed
approximately twenty pounds. Meyer then used that
conservative weight estimate along with UPS records which
charge packages per pound, to determine the number of
laptops contained in each of the packages delivered to the
suspect addresses — ultimately determining that at
least 216 laptops had been shipped between September 1999
and May 2000.
[fn3] The parties stipulated that the 1998 Sentencing
Guidelines would apply as they were in effect and
applicable at the time of the commission of the offense.
Accordingly, all citations to the Sentencing Guidelines in
this opinion are to the 1998 version.
[fn4] The Presentence Investigation Report (“PSR”) stated
that Peterson’s guilty plea was untimely (namely, that it
occurred after the government had prepared for trial) and
did not allow for the application of the additional
one-point reduction permitted under § 3E1.1(b)(2).
Moreover, the report noted that Peterson had failed to
provide a statement detailing her involvement in the fraud
to the government during the course of the pretrial
investigation.
[fn5] Ameritech had purchased each of the new Dell laptop
computers for between $2,350 and $2,650.
[fn6] Knox was sentenced to 51 months’ confinement followed
by three years of supervised release and ordered that he
jointly and severally make restitution payments, with each
of his codefendants, to Ameritech in the amount of
$507,600.
[fn7] According to documentary evidence, which Peterson
agrees is accurate, the first twenty-four computers were
shipped from her department between the fourth of
September, 1999, and December 14, 1999.