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United States of America v. Sara Marie Smith

April 19, 2012

UNITED STATES OF AMERICA
v.
SARA MARIE SMITH,



The opinion of the court was delivered by: Hon. John E. Jones III

MEMORANDUM

THE BACKGROUND OF THIS MEMORANDUM IS AS FOLLOWS:

Pending before the Court is the Motion to Vacate, Set Aside, or Correct Sentence by a Person in Federal Custody pursuant to 28 U.S.C. § 2255 (the "Motion") filed by Defendant Sara Marie Smith ("Defendant" or "Smith") on July 7, 2011. (Doc. 86). On July 21, 2011, Smith filed a Notice of Election (Doc. 90) indicating that she desired the Court to rule on the Motion as filed. Thereafter, we issued a briefing schedule, with which the parties have complied. Accordingly, the Motion is fully briefed and is therefore ripe for our review. For the reasons that follow, the Motion shall be denied.

I. BACKGROUND

On February 28, 2008, a grand jury sitting in the Middle District of Pennsylvania returned an indictment against Smith, charging the Defendant with Bank Fraud in violation of 18 U.S.C. § 1344 and False Statements in relation to a Loan Account in violation of 18 U.S.C. § 1014. The indictment alleged that in her position as bookkeeper and office manager for Clark Motor Company ("Clark Motor"), Smith defrauded M&T Bank, the financial institution which funded Clark Motor's floor plan line of credit. The indictment charged that Smith used her access to an on-line computer banking network operated by M&T Bank to fraudulently inflate the value of the vehicle inventory securing the credit line and thereby caused the bank to advance over $9 million on vehicles which never existed in the Clark Motor inventory.

On April 22, 2009, Smith pled guilty, pursuant to a plea agreement, to Count One of the indictment. The non-binding plea agreement contained stipulations concerning the loss amount and the Sentencing Guidelines calculation. Specifically, Smith and the Government agreed that the loss caused by her conduct was $1,639,625.80. The agreement also provided that Smith's base offense level was 23, based upon a loss caused by her conduct of $1,000,000 to $2,500,000. The parties also agreed that if Smith's criminal history category was calculated to be level III, the applicable imprisonment range was 41 to 51 months. However, if the criminal history level was higher than III, the agreement required the Government to recommend the bottom of the applicable guideline range.

The United States Probation Office prepared a Presentence Investigation Report ("PSR"), which calculated Smith's criminal history category at IV. With a total offense level of 22, Smith's advisory guideline range was 63 to 78 months of imprisonment. On August 26, 2009 a presentence conference was held with the participation of counsel for the parties to discuss the Defendants objections to the PSR. Smith objected to, inter alia, the two-level enhancement for abuse of position of trust pursuant to U.S.S.G. § 3B1.3. After receiving full briefing on the objections, on November 12, 2009, we issued a Memorandum and Order overruling all of Smith's objections and denying her motion for downward departure based on an overstatement of her criminal history. (Doc. 62).

Thereafter, on November 24, 2009, we sentenced Smith to 63 months imprisonment, restitution in the amount of $1,639,625.80 (which was the stipulated amount in the plea agreement), a special assessment of $100 and a five year term of supervised release. Smith took a direct appeal to the Third Circuit on November 25, 2009, arguing that we erred in applying the abuse of trust enhancement. In an unpublished opinion, the Third Circuit affirmed the judgment of conviction and sentence and concluded that Smith did, indeed, occupy a position of trust under U.S.S.G. § 3B1.3. See United States v. Smith, 416 Fed. Appx. 170 (3d Cir. 2010). The Third Circuit rejected Smith's argument that her fraud was "not difficult detect" because she was not closely supervised; the Court of Appeals determined that it was clear her employer delegated to her the authority to obtain loans for vehicle purchases and issue checks without any external controls on that authority. Id. at 172.

This timely 28 U.S.C. § 2255 Motion followed, raising four possible grounds for relief. First, Smith claims that counsel was ineffective for failure to argue that Clark Motor was not a victim. Second, she claims that counsel ineffectively challenged the abuse of trust enhancement. Third, Smith claims that counsel improperly agreed to the loss calculation in the plea agreement. Finally, she claims that counsel was ineffective because he allowed her to enter into a "misleading" plea agreement and then failed to object to the Government's alleged breach thereof. We shall discuss each claim in seriatim.

II. STANDARD OF REVIEW

In order to successfully demonstrate ineffective assistance of counsel, Smith must establish that (1) the performance of counsel fell below an objective standard of reasonableness; and (2) the errors of counsel prejudiced the defense. Strickland v. Washington, 466 U.S. 668, 687-92, 104 S. Ct. 2052, 80 L. Ed. 2d 674 (1984). The first prong of the Strickland test requires the defendant show that counsel's performance was actually deficient. Jermyn v. Horn, 266 F.3d 257, 282 (3d Cir. 2001). A court "deciding an actual ineffectiveness claim must judge the reasonableness of the counsel's challenged conduct on the facts of the particular case, viewed as of the time of counsel's conduct." Strickland, 466 U.S. at 690. Counsel's conduct presumptively "falls within the wide range of reasonable professional assistance," and the defendant "must overcome the presumption that, under the circumstances, the challenged action 'might be considered sound trial strategy.'" Id. at 689-90 (quoting Michel v. Louisiana, 350 U.S. 91, 93, 76 S. Ct. 158, 100 L. Ed. 83 (1955)).

The second prong of the Strickland test requires the defendant show that the deficient performance so prejudiced the defense as to raise doubt as to the accuracy of the outcome of the trial or sentence. Strickland, 466 U.S. at 693-94. The defendant must demonstrate that "there is a reasonable probability that, but for counsel's unprofessional errors, the result of the proceeding would have been different." Jermyn, 266 F.3d at 282 (quoting Strickland, 466 U.S. at 693). A "reasonable probability," for the purposes of establishing prejudice, is "a probability sufficient to undermine confidence in the outcome." Id.

III. DISCUSSION

A. Clark Motor as a ...


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