ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA. (D.C. Crim. No. 93-00189).
Before: Becker and Alito, Circuit Judges and Brody, District Judge*fn*
H. Jay Mummert, who pled guilty to a fraud offense, took this appeal to challenge the district court's calculation of his sentence under the Sentencing Guidelines and the district court's denial of his request for a downward departure. We hold that the district court did not err in calculating Mummert's sentence under the Guidelines, but we remand for further proceedings concerning Mummert's downward departure request.
Mummert, the former chief executive officer of the People's State Bank of East Berlin, Pennsylvania, became acquainted with a contractor, Richard Myford, and a realtor, Sherry Seidenstricker, who had formed a partnership to build and market residential properties. In the fall of 1992, Mummert caused the bank to make a $95,000 loan to finance construction of a house for the partnership. According to Mummert's presentence investigation report, Mummert "handled [this loan] in an irregular fashion. Indeed, the bank's records had no complete loan application file documenting this . . . loan."
After the loan was made, Mummert states, he learned that independent auditors were conducting an examination of the bank's records, and he advised Myford and Seidenstricker of his concern that the examiners might discover the irregular loan. Myford and Seidenstricker, who were attempting to sell the property, then helped to prepare loan applications on behalf of the buyers, Paul and Melissa Belzner. Myford and Seidenstricker intended for the bank to make a new $95,000 bridge loan to the Belzners and for this money to be used to pay off the original loan.
The new loan application contained false financial information. It also falsely stated that the Belzners had active accounts at the People's State Bank and that they had been approved for a mortgage by another lender. The application was accompanied by a forged mortgage commitment letter, and the Belzners' signatures were forged.
According to his presentence investigation report, Mummert inserted some of the false information on the loan application, and he was present when the Belzners' signatures were forged. Over a period of time, Mummert then issued $95,000 in cashier's checks to Myford, who forged the Belzners' endorsements and used the checks to pay off the initial construction loan. After the Belzners subsequently informed the bank that they had not signed the loan application, the fraud was discovered.
In August 1993, Mummert was charged in a one-count information with causing false statements to be made in the records of a federally insured credit institution, in violation of 18 U.S.C. § 1006. This information alleged that Mummert had submitted the false and forged bank loan applications.
In September 1993, Mummert pled guilty to this offense, and a presentence investigation report was prepared. The report determined that the amount of loss was $95,000 and that Mummert's offense level should therefore be increased by six levels under U.S.S.G. § 2F1.1(b)(1)(G). The report also concluded that a two-level increase for more than minimal planning should be made under U.S.S.G. § 2F1.1(b)(2)(A). In addition, the report concluded that there were no factors that warranted a sentencing departure.
Mummert's attorney disputed all of these determinations. With respect to the amount of loss, he argued:
All proceeds of the $95,000.00 loan which constitutes the basis of this prosecution went to the construction of a home. That home is presently for sale. The owner of that property has advised the bank that they will be repaid completely immediately upon the sale of the property. . . . Furthermore, the bank has long had civil redress available to it to secure the return of its money if they thought that they could do so more promptly that awaiting the sale of the home. The bank did not avail themselves of this relief, however, because there has never been any question regarding the value of the home, the ...