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United States v. Gramer

October 16, 2002

UNITED STATES OF AMERICA, PLAINTIFF-APPELLEE,
v.
SCOTT A. GRAMER, DEFENDANT-APPELLANT.



Appeal from the United States District Court for the Southern District of Indiana, Indianapolis Division. No. IP01-CR-0090-02-B/F--Sarah Evans Barker, Judge.

Before Flaum, Chief Judge, and Bauer and Manion, Circuit Judges.

The opinion of the court was delivered by: Bauer, Circuit Judge.

ARGUED SEPTEMBER 10, 2002

The federal government indicted Scott Gramer on five counts of mail fraud, a violation of 18 U.S.C. § 1341. He pleaded guilty to all five counts pursuant to a plea agreement. The district court sentenced Gramer to 21 months incarceration, followed by two years of supervised release. Gramer contends that the district court's application of § 2F1.1 of the Sentencing Guidelines was in error. Specifically, he argues that the sentence does not reflect his limited participation in the scheme and that the factual findings adopted by the court are irreconcilable. For the reasons that follow, we find the district court's sentencing determination was not in error.

BACKGROUND

Scott Gramer, a manufacturing engineer, began working for Indiana Mills & Manufacturing, Inc. (IMMI) in 1994. IMMI is a manufacturing company in Westfield, Indiana, which develops seat belts, child seats, and off-road machinery. In July 1996, Harvey Adair, Jr., a fellow IMMI employee, devised a scheme to defraud IMMI. According to the plan, Adair would pretend to send broken pieces of IMMI machinery to non-existing companies for repairs. Adair recruited Gramer to sign consents for the phoney purchase orders. An employee's signature was necessary to validate the payment of the false claims.

In addition to Gramer, Adair recruited three additional IMMI employees, Jack A. Reid, David N. Cook, and Neal Richardson, to pose as outside vendors who would purportedly repair the broken machine parts.

Gramer's importance to the success of the overall scheme cannot be understated. Adair recruited Gramer to be, in addition to Adair himself, another employee who could sign off on the purchase orders. It was essential to the success of the plan that no single person's name appear on all of the paperwork as authorizing repairs or approving payments. With Gramer in the scheme, Adair was able to alternate between the two signators so as not to raise suspicion. Gramer approved some of the repair requests and some of the payments for all the vendors involved in the scheme.

The proceeds from the scheme were split among those involved relative to their amount of participation in the fraudulent activities. Each person who participated in obtaining proceeds from a particular purchase order and invoice received a percentage ranging from 25% to 50% of the proceeds. Based on the submission of fraudulent invoices, which continued until the summer of 2000, IMMI paid a total of $430,752 to the individuals or businesses identified in the invoice. Of the $430,752 unlawfully gained, Adair, as the mastermind, received $355,175. Gramer received $51,999 for his work in the fraud, while Reid received $1,378, Richardson, $6,541, and Cook $22,960.

On November 5, 2001, Gramer pleaded guilty to five counts of mail fraud. The district court ordered Gramer to serve 21 months incarceration, followed by two years of supervised release. In addition, the district court ordered him to pay restitution in the amount of $51,999. On appeal, Gramer asserts that the district court incorrectly applied § 2F1.1 of the Sentencing Guidelines in assessing an increase of nine offense levels over the basic offense level of six. More specifically, Gramer argues that the figures used by the district court in determining his sentence cannot be reconciled with its finding that a single scheme existed.

ANALYSIS

We review the district court's calculation of the loss incurred in the defendant's offense under U.S.S.G. § 2F1.1 for clear error. United States v. Dillard, 43 F.3d 299, 309 (7th Cir. 1994). "A factual determination is clearly erroneous only if, after considering all the evidence, the reviewing court is left with the definite and firm conviction that a mistake has been committed." United States v. Irby, 240 F.3d 597, 599 (7th Cir. 2001) (quoting United States v. Messino, 55 F.3d 1241, 1247 (7th Cir. 1995)).

Under U.S.S.G. § 2F1.1, a defendant's sentence is based upon the amount of loss the defendant's scheme caused to his victims. See U.S.S.G. § 2F1.1 Application Note 8. Under the Guidelines, Gramer's base offense level for violating 18 U.S.C. § 1341 is level six. U.S.S.G. § 2F1.1(a). However, § 2F1.1(b)(1)(J) provides for an addition of nine offense levels if the loss in the total scheme in question is greater than $350,000 but less than $500,000. The district court found that Gramer was involved in a single overarching scheme resulting in a total loss to IMMI of $430,752; therefore, in accordance with U.S.S.G. § 2F1.1(b)(1), the district court added an additional nine levels to the base offense level.

Gramer asserts that the district court's increase of nine offense levels was the result of an erroneous interpretation of the figures adopted by the court. He also contends that the numbers which the court used do not support its finding that a single scheme took place. Instead of a single scheme, Gramer contends there were multiple schemes and that he should be sentenced only for the scheme he participated in. He concludes that if a single scheme truly occurred then the amount attributable to him would have been greater. Gramer says that, because he and the other co-workers accumulated a combined total of $82,878 while Adair made off with $355,175, then Adair either committed ...


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