United States v. Kathryn Simmerman
850 F.3d 829
6th Cir.2017Background
- Kathryn Simmerman, longtime manager of Shoreline Federal Credit Union, pleaded guilty to embezzling $1,528,000 (18 U.S.C. § 657) and structuring deposits to evade reporting (31 U.S.C. §§ 5313, 5324).
- She concealed cash removals by manipulating Shoreline’s teller-module and general ledger: creating fictitious teller codes, using a dormant/suspense account, and reversing entries around audits.
- She funneled stolen cash through family members’ accounts and structured deposits under $10,000; at discovery, the ledger was overstated by $1.945 million.
- District court applied Guidelines enhancements: +2 for sophisticated means (U.S.S.G. § 2B1.1(b)(10)(C)), +4 for jeopardizing a financial institution’s safety and soundness (U.S.S.G. § 2B1.1(b)(16)(B)(i)), and +2 for abuse of a position of trust (U.S.S.G. § 3B1.3), yielding an offense level of 28 and a 78-month sentence (concurrent counts).
- Simmerman appealed, arguing each of those three enhancements was improperly applied; the Sixth Circuit reviewed for clear error and affirmed.
Issues
| Issue | Plaintiff's Argument (Simmerman) | Defendant's Argument (Government / District Court) | Held |
|---|---|---|---|
| Whether conduct warranted "sophisticated means" enhancement under U.S.S.G. § 2B1.1(b)(10)(C) | Her offense was simple: taking cash and sometimes putting it in her purse, not an especially complex scheme | She used complex concealment: fictitious IDs, dormant ledger account, daily computer manipulations, and funneling through relatives | Court affirmed: enhancement not clearly erroneous |
| Whether embezzlement "substantially jeopardized" the safety and soundness of Shoreline under U.S.S.G. § 2B1.1(b)(16)(B)(i) | Shoreline did not become insolvent; no sufficient jeopardy to trigger the 4‑level increase | Loss caused Shoreline to be critically undercapitalized (net worth ratio <2%), represented a large share of assets/earnings, and NCUA intervention averted worse harm | Court affirmed: enhancement not clearly erroneous |
| Whether she "abused a position of trust" under U.S.S.G. § 3B1.3 | Her duties were comparable to an ordinary teller’s theft, not a managerial fraud warranting enhancement | As manager she had managerial discretion, little day‑to‑day supervision, exclusive vault access, and she used that trust to facilitate and conceal the offense | Court affirmed: enhancement not clearly erroneous |
Key Cases Cited
- Buford v. United States, 532 U.S. 59 (Sup. Ct. 2001) (supports deferential, fact‑bound review of Guidelines application)
- Jackson‑Randolph v. United States, 282 F.3d 369 (6th Cir. 2002) (applying deferential review under Buford)
- May v. United States, 568 F.3d 597 (6th Cir. 2009) (funneling transactions through relatives can support sophisticated‑means enhancement)
- Erwin v. United States, [citation="426 F. App'x 425"] (6th Cir. 2011) (same principle regarding relatives and concealment)
- Young v. United States, 413 F.3d 727 (8th Cir. 2005) (substantial‑jeopardy enhancement appropriate where bank became critically undercapitalized)
- Zech v. United States, 553 F.3d 663 (8th Cir. 2009) (substantial‑jeopardy enhancement can apply even absent actual insolvency)