The opinion of the court was delivered by: MUIR
On April 15, 1994, a 10-count information was filed charging William M. Strouse, III, with one count of wire fraud and nine counts of interstate transportation of stolen monies. On May 10, 1994, Strouse entered a plea of guilty to the information.
In the presentence report the Probation Officer calculated a total offense level of 18 and a criminal history category of III resulting in a guideline imprisonment range of 33 to 41 months.
At the presentence conference on July 27, 1994, we determined that it was necessary to hold a presentence hearing. The presentence hearing was originally scheduled for September 26, 1994. After Strouse withdrew his objections to the presentence report, we canceled the presentence hearing and scheduled Strouse's sentencing for October 4, 1994.
On October 4, 1994, we notified Strouse in open court and issued an order stating that we were considering an upward departure pursuant to U.S.S.G. § 5K2.0 because of possible aggravating circumstances not taken into consideration by the Sentencing Commission. Those circumstances involved the number of victims and the psychological impact of Strouse's fraud on them. Strouse defrauded 15 victims, some of whom may have been particularly vulnerable, of $ 369,842.49 in toto.
On March 24, 1995, we held a presentence hearing on whether of the number of victims and the extreme psychological impact of Strouse's fraud upon some of those victims justified an upward departure from the guideline range. The following are the Court's findings of fact, discussion, and conclusions of law with regard to the issues raised.
1. While a Prudential agent, Strouse misrepresented to the fifteen (15) victim investors that he would invest their money in annuities and stock funds, and thereby fraudulently obtained a total of approximately $ 369,842.49 from them. (Undisputed, hereafter "U")
2. Purporting to invest the funds on their behalf, Strouse obtained checks from the victims payable to Prudential. (U)
3. Strouse then went to Commonwealth Bank in Lock Haven, and used the victims' checks to purchase numerous cashier's checks in amounts ranging from a few thousand dollars up to $ 12,000.00. (U)
4. Strouse mailed the cashier's checks to Prudential Bank and Trust in Georgia as payments on the credit card account that he maintained there. (U)
5. A small portion of the monies were legitimately invested in Prudential products, but most of the money was used to open multiple insurance accounts and make premium payments for other Prudential customers (other than the victims), which had the effect of inflating Strouse's sales statistics and making him one of the national sales leaders for Prudential out of an unlikely Clinton County venue. (U)
6. Other monies were used to make premium payments on insurance policies in danger of lapsing, in order to avoid commission losses. (U)
7. Strouse received commissions based on new business generated and on a percentage of premiums paid on accounts. (U)
8. Unbeknownst to the victims and without their permission, Strouse fraudulently converted $ 189,516.36 of the monies given to him for investments by running them through his credit card account at Prudential Bank and Trust and by depositing some of the monies into his Prudential money market account.
10. Strouse used $ 20,111.41 to open a money market account and spent the money on various personal expenses. (U)
11. At one point, he was running an approximately $ 15,000.00 credit on his charge account. (U)
12. Strouse also mailed a cashier's check in the amount of $ 20,111.41 to Prudential Bank and Trust in Georgia for deposit into the money market account that he opened there. (U)
13. Then, without the victims' knowledge or consent, wrote checks on the money market account to pay his 1, mortgage and to purchase an audio appliance business in Lock Haven and its inventory. (U)
14. Strouse then gained use of the converted monies moved through the credit card account by drawing numerous cash advances against it at Commonwealth Bank in Lock Haven. (U)
15. Strouse used the cash advances for his own benefit, and opened and paid premiums on other customer's investment accounts.
16. Strouse also used some victims' money to pay a return to other victims. (U)
17. The cash advances obtained by Strouse in Lock Haven resulted in several types of wire transmissions nationwide: the wire transfer of monies from Prudential Bank and Trust in Georgia to Commonwealth Bank in Williamsport; telephone calls for account authorization by Commonwealth Bank employees in Lock Haven to credit card processors in New York and Nebraska; and telephonically transmitted electronic account verification from New York and Nebraska to the credit card company in Virginia and Georgia. (U)
18. Strouse admitted during an FBI interview that he made false representations and promises to the victims about how he was going to invest their money. (U)
19. Strouse admitted that he never told the victims that he planned to convert a sizable portion of their investment into cashier's checks and use them for his own benefit by increasing his credit line on his credit card account so that he could utilize the funds in the form of very large cash advances. (U)
20. Strouse acknowledged obtaining the cashier's checks, and mailing them out of state to the bank administering ...