Sentencing Guidelines – When a defendant is convicted of money laundering, the +2 enhancement for abusing a position of public or private trust is applied based solely on the money laundering behavior and not on the underlying offense by which the funds are obtained.
Scott Capps was convicted and sentenced to 48 months imprisonment with 3 years of supervised release for conspiracy to commit mail fraud, money laundering, and filing a false tax return. Through his employment with Vanguard, Capps identified accounts due for escheatment or abandonment in order to draw funds and send to his friends for deposit into their personal accounts. They wrote checks back to Capps who deposited portions of the criminal proceeds into his bank account. During sentencing, the 2-level abuse of trust adjustment for money laundering was applied based on Capps’ abuse of trust due to his position at Vanguard and access to the accounts.
The Court reviewed Capps’ sentence for plain error in applying the abuse of trust adjustment under U.S.S.G § 3B1.3. The Court held that the district court erred in applying the 2-level abuse of trust adjustment to the money laundering conviction. The Court found Capps’ abuse of trust occurred when he stole passwords and money from Vanguard customer accounts that were abandoned or due for escheatment. Under Note 2(c) of § 2S1.1 specific to money laundering convictions, the Chapter 3 adjustments apply only to the money laundering behavior. Here the abuse did not occur in mailing the checks to Capps’ friends for deposit and return of checks, rather the abuse occurred in acquiring the funds in the first place. The Court vacated the sentence and remanded for resentencing.
The Court also considered sentencing questions about the gross receipts adjustment. See full opinion for more details.
Appeal from the Eastern District of Pennsylvania
Opinion by Jordan, joined by Matey and Roth.
Click here to read the opinion.