UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT
NO.
BRIEF FOR APPELLANT JEFFREY M. xxxxxxx
UNITED STATES OF AMERICA, Plaintiff-Appellee,
v.
JEFFREY M. xxxxxxx, Defendant-Appellant.
JURISDICTION
The district court had jurisdiction over this case pursuant to 18 U.S.C. 3231. The notice of appeal having been filed within the ten-day period of Fed. R. App. P. 4(b), this Court has jurisdiction pursuant to 28 U.S.C. 1291 and 18 U.S.C. 3742(a).
ISSUES PRESENTED FOR REVIEW
I. Whether the district court improperly determined fraud loss for sentencing purposes when it interpreted loss to mean the total amount of money Mr. xxxxxxx received under his
contract with the District of Columbia Public Schools, without offsetting the value of Mr. xxxxxxx's partial performance of the contract.
II. Whether the district court erroneously ruled that Mr. xxxxxxx occupied a "position of trust" vis-a-vis the Prinvest Corporation under section 3B1.3 of the Sentencing Guidelines where Mr. xxxxxxx was merely a customer of Prinvest and was allowed to pick up and deliver checks for payment on his account, without any managerial discretion.
III. Whether the district court incorrectly calculated restitution where it did not consider the actual loss to one victim and did not have sufficient evidence to support awards to ten others.
STATUTES AND REGULATIONS
Pertinent statutes and regulations are
contained in the addendum to this brief.
STATEMENT OF THE CASE
I. NATURE OF THE CASE, COURSE OF PROCEEDINGS, AND DISPOSITION IN THE COURT BELOW
On May 1, 1997, a grand jury returned an eleven-count indictment against Jeffrey M. xxxxxxx for wire fraud and mail fraud in connection with receiving money under a contract with the District of Columbia Public Schools ("DCPS"). Mr. xxxxxxx had contracted with DCPS to educate emotionally disturbed children at a school he established in the District of Columbia called the Kedar Day School. The indictment charged in Counts 1 through 10 that Mr. xxxxxxx, for the purpose of executing a scheme and artifice to defraud DCPS, caused to be transmitted by wire to his checking account certain sums of money on ten different dates, all in violation of 18 U.S.C. 1343 and 2. The indictment charged in Count 11 that Mr. xxxxxxx executed a scheme to defraud the Industrial Bank of Washington by depositing a $47,000 check payable to Prinvest Corporation into his Kedar School checking account after falsely claiming that Prinvest was one of his companies, in violation of 18 U.S.C. 1344. (App. 15-26). (1)
Trial in this case commenced March 2, 1998. (App. 6). On March 11, after a seven-day trial, the jury returned a partial verdict of guilty on counts 1 through 10. (3/11/98 Tr. II at 4-6). The next day, the jury returned a guilty verdict on Count 11. (3/12/98 Tr. at 6).
On August 13, 1998, the district court sentenced Mr. xxxxxxx to concurrent terms of imprisonment of 37 months on each of Counts 1 through 11. (8/13/98 Tr. 87; App. 87). The sentences were based on a loss amount of $352,691.30, the total amount of money Mr. xxxxxxx received through wire transfers plus the $47,000 Prinvest check deposited. (8/13/98 Tr. at 86; PSR 6-8). The court also imposed concurrent terms of supervised release of five years each. (8/13/98 Tr. at 87; App. 88). In addition, the court ordered restitution in the amount of $301,910.63, payable in part ($261,338.36) to DCPS for the contract money Mr. xxxxxxx used for personal expenses and for back rent owed on the DCPS building he leased for Kedar School, and payable in part to several employees and vendors for services to Kedar School. (2) (App. 90-93; PSR 14).
II. STATEMENT OF FACTS
In early 1995 Jeffrey xxxxxxx began talking to people experienced in special education about his idea of opening a school in the District of Columbia for emotionally disturbed children. (3/10/98 Tr. at 3-7). The school was to serve "Level Four" children, those deemed "seriously emotionally disturbed." (Id. at 4-5; 3/9/98 Tr. at 20). At that time, Mr. xxxxxxx was a successful insurance agent and wanted to give something back to the community. (3/4/98 Tr. at 168; 3/9/98 Tr. at 44-45; 3/10/98 Tr. II at 32-33, 40). Mr. xxxxxxx, himself, had been a special education student in his early years. (3/4/98 Tr. at 22).
In April 1995, Mr. xxxxxxx submitted a
proposal to the District of Columbia Public Schools to operate a school for Level Four
students in the District for $15,000 per year per student. (3/4/98 Tr. at 87, 168). DCPS
finally accepted the proposal and approved a contract with Mr. xxxxxxx on August 3,
1995, one month before the opening of the school year. (3/4/98 Tr. at 162-68, 183-84;
3/5/98 Tr. at 4; 3/10/98 Tr. II at 20). The contract provided that Mr. xxxxxxx would
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