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United States v. Conley.

No. 22-5112. 12/22/2023. N.D.Okla. Judge Matheson. Bank Fraud—Aggravated Identity Theft—US Sentencing Guidelines—Loss Calculation—Factual Basis for Plea.

December 22, 2023

Over the span of five years, Conley applied for loans at seven financial institutions using false employment and salary information. She sought $1,028,643.20 in loans and received $998,643.20, using cars, boats, and trailers as collateral. In four instances, Conley used the names and forged signatures of financial institution employees to create false lien releases for already encumbered vehicles and then used the lien releases to repledge the same vehicles as collateral for new loans. Conley pleaded guilty, without a plea agreement, to 24 counts of bank fraud under 18 USC § 1344 and four counts of aggravated identity theft under 18 USC § 1028A(a)(1). The Presentence Report (PSR) found the loss caused by Conley’s offense was $1,020,591.62, which triggered a 14-level increase in her US Sentencing Guidelines (USSG) offense level. Conley filed a letter with the Probation Office objecting to the PSR, maintaining that the loss amount should have been below $550,000 because it should have been reduced by the amounts paid on the loans or the value of recovered collateral. At sentencing, over Conley’s objection, the district court relied on the PSR’s loss amount to calculate her USSG range for bank fraud as 30 to 37 months. The court sentenced her to 30 months in prison for bank fraud, to a mandatory consecutive 24 months for aggravated identity theft, and three years of supervised release. The court also ordered her to pay $451,064.64 in restitution.

On appeal, Conley argued that the district court improperly calculated her USSG range for bank fraud. USSG § 2B1.1 provides a formula to calculate the base offense level for § 1344 bank fraud convictions. First, § 2B1.1(a) sets the base offense level, then § 2B1.1(b) increases it based on specific offense characteristics according to the loss caused by the offense. To calculate loss, the sentencing court must take the greater of the actual or intended loss and then subtract certain credits or deductions. The sentencing court then deducts the amount of money the defendant returned to the victim before the offense was detected and the value of any collateral that the victim recovered before sentencing. The resulting amount determines the increase to the defendant’s base offense level. As relevant here, the sentencing court increases the base offense level by 12 if the loss is more than $250,000 and less than $550,000, and by 14 if the loss is more than $550,000 and less than $1,500,000. Conley sufficiently alerted the district court that she disputed the PSR’s loss calculation, so the government was required to prove the loss amount at the sentencing hearing by a preponderance of the evidence. Accordingly, the district court clearly erred by adopting the PSR’s loss calculation over Conley’s objection without requiring the government to prove it by a preponderance of the evidence. Further, the error was not harmless because it affected the USSG range.

Conley also argued that the district court plainly erred in finding a factual basis for her plea under Dubin v. United States, 599 U.S. 110 (2023), which was decided between Conley’s sentencing and this appeal. She maintained that because her use of the employees’ signatures to create fake lien releases was not at the “crux” of her fraud, it was not factually sufficient to constitute aggravated identity theft under Dubin. However, the facts in Dubin are inapposite, and neither the US Supreme Court, the Tenth Circuit, nor any other circuit has addressed the issue presented in Conley’s case. Accordingly, accepting Conley’s plea was not contrary to well-settled law and without more definitive legal authority, any error in accepting Conley’s guilty plea cannot be plain.

The sentence for bank fraud was vacated and the case was remanded for resentencing on Conley’s bank fraud convictions. The convictions for aggravated identity theft were affirmed.

Official US Court of Appeals for the Tenth Circuit proceedings can be found at the US Court of Appeals for the Tenth Circuit website.

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