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United States v. Pardo

argued: January 19, 1994.

UNITED STATES OF AMERICA
v.
JUAN PARDO, APPELLANT



Appeal from the United States District Court for the District of New Jersey. (D.C. Crim. No. 92-00235-1).

Before: Sloviter, Chief Judge, Scirica and Lewis, Circuit Judges.

Author: Sloviter

Opinion OF THE COURT

SLOVITER, Chief Judge.

Appellant Juan Pardo challenges on four grounds his sentence imposed after a guilty plea to single counts of bank and wire fraud and a count of failure to appear. Two grounds are set forth in his counselled brief, and two others appear in a supplemental pro se filing. Although we reject most of Pardo's arguments, we agree that the district court misapplied United States Sentencing Guideline § 3B1.3 when it determined that Pardo's friendship with a bank manager constituted a position of trust that facilitated his defrauding the bank. See United States Sentencing Commission, Guidelines Manual, § 3B1.3 (1993) [hereinafter USSG]. We will therefore vacate the judgment of sentence and remand for resentencing.

I.

FACTS AND PROCEDURAL HISTORY

There is no dispute about the relevant facts in this case. Juan Pardo engaged in a classic check kiting scheme in which he defrauded First Fidelity Bank out of more than $51,000, in violation of 18 U.S.C. § 1344 (Supp. IV 1992) (bank fraud) and 18 U.S.C. § 2 (1988), and defrauded numerous clients in excess of $204,000 by collecting loan application and processing fees for loans that they never received, in violation of 18 U.S.C. § 1343 (Supp. IV 1992) (wire fraud) and 18 U.S.C. § 2 (1988). Shortly after his initial arraignment, Pardo fled to Canada where he remained for several weeks, and thus failed to appear in violation of 18 U.S.C. §§ 3146(a) and 2 (1988).

A. The Check Kiting Scheme...

Shortly before the incident which was the subject of the bank fraud charge in this indictment, Pardo engaged in another check-kiting scheme at the Guttenberg, New Jersey, branch of First Fidelity Bank which caused First Fidelity a loss of $7,324.39. Although it was never reimbursed for this loss, First Fidelity declined to prosecute Pardo. The bank, however, did report Pardo's illegal conduct to Chex Systems as a security measure.

On October 1, 1991, notwithstanding his earlier fraud on First Fidelity, Pardo opened an account at the Ridgefield Park branch of First Fidelity under the name of SJF Funding Corporation, the same corporation he used in the earlier fraud. The usual bank practice required a background check, which would have revealed Pardo's prior fraud on First Federal itself, but that routine was not followed by Brigit Schumann, the branch manager, who had been a personal friend of Pardo's wife for ten years and was a bridesmaid at the Pardos' wedding. The record is silent as to whether Pardo said anything to induce Schumann's failure to take precautions, or whether she was just negligent.

Between October 4 and October 15, 1991, Pardo deposited five checks into the First Fidelity account totalling $232,000 which had been drawn on accounts Pardo had at other banks, and which were uncollectible. Nonetheless, almost immediately after depositing these checks, Pardo began to write checks against those deposits on his First Fidelity account, and by October 23, 1991, he had withdrawn a total of $76,771.86. When Schumann became aware of Pardo's conduct and confronted his wife, she received assurances that Pardo would reimburse the bank for the fraudulently obtained funds. Later, Frank Amato, an associate of Pardo, wired $25,000 back to the bank. First Fidelity received no additional reimbursement and its total loss due to this second check kiting scheme is $51,771.86.

B. The Loan Fraud Scheme

In the Spring of 1991, Pardo became the North American representative of Siam Commercial Finance S.A., a company based in Bangkok, Thailand. His function was to locate customers seeking loans from several hundred thousand to several million dollars, and he received in excess of $204,000 as loan application fees, servicing fees and pre-commitment fees from at least fourteen individual and corporate clients. Neither he nor SJF Funding successfully placed a single loan with Siam through at least March 1992, the month before he was indicted. Although Pardo later claimed he was unaware of Siam's fraudulent activities, he did not deny that he altered checks that he received in these transactions nor that he deposited them in his personal account.

C. Failure to Appear

Following his arrest, Pardo was released on bail. Thereafter, the government sought his detention because it had learned of other activities by Pardo and was seeking a superseding indictment concerning additional charges of bank and wire fraud. On Friday, May 8, 1992, the district court ordered a second hearing to be held on the following Monday, May 11, 1992. Pardo fled to Canada over that intervening weekend. He was arrested on June 22, 1992, the date that the trial on the original charges was to begin, when he tried to reenter the United States near Richford, Vermont.

On September 30, 1992, Pardo pled guilty to Counts 2 (bank fraud), 16 (wire fraud) and 47 (failure to appear) of the indictment pursuant to a plea agreement reached with the government. On February 8, 1993, the district court sentenced Pardo. The court determined that Pardo's total offense level was 18, based in part on its application of a two-level decrease for acceptance of responsibility (USSG § 3E1.1) and a two-level increase for abuse of a position of trust (USSG § 3B1.3). The court calculated Pardo's criminal history level as II, based in part on his conviction on a disorderly persons charge in state court for which he had not yet been sentenced. The court then sentenced Pardo to 37 months imprisonment (31 months on Counts 2 and 16, followed by a consecutive six-month term on Count 47) and to four years of supervised release, and ordered him to pay $39,135.93 in restitution and $150 in special ...


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