After pleading guilty, Stephen Bracciale appeals his 15-month prison sentence for wire fraud, in violation of 18 U.S.C. §§ 1343, 1346, and 2. Bracciale argues that the district court erred: (1) in its loss calculations under sentencing guideline § 2F1.1; and (2) in imposing the abuse-of-trust enhancement pursuant to guideline § 3B1.3. U.S.S.G. §§ 2F1.1 & 3B1.3 (1995). 1 After review and oral argument, we reverse the loss calculation and affirm the abuse-of-trust enhancement.
I. BACKGROUND
A. Facts
From 1974 to 1997, Defendant Bracciale was employed by Kraft Foods (“Kraft”). Bracciale held sales positions, ultimately advancing to the position of Regional Sales Manager at Kraft.
In the course of its normal business, Kraft offers discounted prices to certain customers in exchange for various promotional and advertising activities (“promotional activities”). From 1994 to 1997, Kraft offered three kinds of deals to customers: (1) “Merchandise” discounts, whereby the customer received a discounted price in exchange for negotiated promotional activity; (2) “Purchase Only” discounts, whereby the customer received a discounted price in exchange for merely purchasing the food product; and (3) “Pur
Under these discount programs, authorized customers would purchase Kraft food products at full price. The customer, however, would receive money back from Kraft by submitting Deal Payment Authorization (“DPA”) forms to Kraft. The DPA forms required Kraft to reimburse the customer for the difference between the full purchase price and the previously negotiated discount price. This process was known as “bill-backs.”
A Kraft senior executive, such as Bracc-iale, would then approve the bill-back and pay the customer the required amount. Where the sale included a “Merchandise” or “Purchase and Merchandise” discount, the customer was obligated to use some of the bill-back money to market Kraft’s products. For example, bill-back money could be used to erect Kraft displays or to provide new product sampling in grocery stores.
During his employment with Kraft, Defendant Bracciale met David Weinbaum, who operated D&K, a company which supplied food products to smaller food stores and other retail establishments. D&K was not authorized to receive discounted food prices under any of Kraft’s three discount programs. However, due to his acquaintance with Weinbaum, Bracciale arranged for D&K to obtain Kraft goods at the discounted prices offered to an authorized customer, McLane Company, Inc. (“McLane”). Bracciale encouraged McLane to divert to D&K some of the food products that it had bought from Kraft at a discounted price. This allowed D&K to purchase those products at McLane’s discounted price, a price much lower than that which D&K would have paid for the products on the open market.
Bracciale and Weinbaum shared the profits that D&K enjoyed as a result of this diversion scheme. Kraft’s internal policy, however, barred Bracciale from (1) self-dealing or making arrangements with its customers to profit personally from Kraft sales, and (2) participating in the diversion of Kraft products.
B. Information and Plea Agreement
On September 10, 2001, Defendant Bracciale was charged by information with one count of wire fraud, in violation of 18 U.S.C. §§ 1343, 1346, and 2. 2 Section 1343 makes it a federal crime to devise
any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice.
18 U.S.C. § 1343. Further, § 1346 states that “the term ‘scheme or artifice to defraud’ includes a scheme or artifice to deprive another of the intangible right of honest services.” 18 U.S.C. § 1346. In its information, the government alleged that
On September 18, 2002, pursuant to a written plea agreement, Bracciale pled guilty to wire fraud, in violation of 18 U.S.C. §§ 1343, 1346, and 2. 3 The plea agreement specifically listed the elements of Bracciale’s fraud offense as follows:
First: That the Defendant knowingly devised or participated in a scheme to defraud, or for obtaining money or property by means of false pretenses, representations or promises;
Second: That the defendant did so willfully with an intent to defraud;
Third: That the Defendant transmitted or caused to be transmitted by means of wire communication in interstate commerce a writing and signal, for the purpose of executing the scheme to defraud; and
Fourth: That the Defendant reasonably foresaw or should have foreseen that his breach of a fiduciary duty to his employer which [sic] might cause an economic harm to that employer.
C. Loss Calculations Under § 2F1.1
After accepting Braceiale’s plea, it was necessary for the district court to determine Kraft’s monetary loss in order to sentence Bracciale. Under the 1995 Sentencing Guidelines, the base offense level for offenses involving fraud is six and is increased up to eighteen levels based on the fraud victim’s loss. U.S.S.G. §§ 2F1.1(a), (b)(1). The Presentence Investigation Report (“PSI”) concluded that Kraft’s loss was $1,031,123.35 based on a memorandum by Kraft’s Rick Gylling (“Gylling Memo”). The Gylling Memo’s calculations were based on McLane’s improper bill-backs to Kraft for products diverted to D&K. The Gylling Memo separates the improper bill-backs into the three discount programs, and lists them as follows: (1) for Kraft’s “Purchase and Merchandise” program, $723,006.61; (2) for Kraft’s “Merchandise” program, $308,116.74; and (3) for Kraft’s “Purchase Only” program, $494,207.05. According to the Gylling Memo, the documentary evidence “shows that $723,006.61 (Purchase and Merchandise) plus $308,116.74 (Merchandise) were unearned by Bracciale since the funding was used to finance the diverting of the product.” Thus, according to the Gylling Memo, the “total amount of $1,031,123.35 represents the injury to Kraft since the funds were provided to secure specific merchandising from McLane[-]supplied retailers that was never received.”
The district court rejected the PSPs loss calculations of $1,031,123.35. Instead, the district court used the $733,211.86 monetary gain realized by Bracciale and Wein-baum as a substitute for Kraft’s monetary loss. In opting for the gain amount, the district court determined that Kraft’s actual monetary loss was too difficult to define and that the profit to Bracciale and Wein-baum was a more specific and reliable figure.
D. Abuse-of-Trust Enhancement Under § 3B1.3
Over Bracciale’s objection, the district court also applied a two-level abuse-of-trust enhancement. Defendant Bracciale
Rejecting Bracciale’s contentions, the district court determined that an abuse-of-trust enhancement was warranted “because Mr. Bracciale’s position aided him in committing this offense and in setting up this scheme. He wasn’t supervised closely, and it was all because of the trust afforded him in his position that allowed this scheme to flourish.” 4 Bracciale appeals his 15-month prison sentence.
II. LOSS CALCULATIONS
The first issue on appeal is whether the district court erred in using Bracciale and Weinbaum’s gain as a substitute for Kraft’s loss for the purpose of sentencing Bracciale under § 2F1.1. 5
A. U.S.S.G. § 2F1.1
Section 2F1.1 assigns a base offense level of six to a wide variety of fraud crimes.
See
U.S.S.G. § 2F1.1(a) & cmt. background. Under the 1995 Sentencing Guidelines, the base offense level of six is increased based on the amount of the loss occasioned by the fraud. U.S.S.G. §§ 2F1.1(a), (b)(1). Thus, “ ‘loss’ under § 2F1.1(b) is a specific offense characteristic intended to measure the actual, attempted, or intended harm of the offense.”
United States v. Orton,
“For purposes of subsection (b)(1), the loss need not be determined with precision. The court need only make a reasonable estimate of the loss, given the available information.” U.S.S.G. § 2F1.1, cmt. n. 8;
see United States v. Renick,
While “the ‘loss to losing victim’ approach is not required in every case,”
B. Kraft’s Loss
Stating that the exact amount of Kraft’s loss was “difficult to define,” the district court used Bracciale and Weinbaum’s monetary gain as a substitute for Kraft’s loss under § 2F1.1(b)(1). However, we conclude that the district court erred because a reasonable estimate of Kraft’s loss based on existing information was feasible in this case.
In
Snyder,
this Court reversed a district court’s loss calculation based on the defendants’ gain.
Although the figures in the Gylling memo may not provide the “precise” loss suffered by Kraft, such precision is unnecessary under § 2F1.1. See id. at 1295-96. The loss amount in the Gylling Memo was based on the bill-backs received and paid by Kraft regarding food product that was improperly diverted from McLane to D&K. The Gylling Memo contained supporting documentation and was by no means “speculative.” Rather, the Gylling Memo represented “a reasonable estimate of the victims’ loss based on existing information,” id., and the district court should have used the Gylling Memo as the basis for determining Kraft’s monetary loss.
Therefore, we reverse and remand this case so that the district court may consider anew its loss calculations. Upon remand, we instruct that the district court use the Gylling Memo’s “projected” loss figure of $1,031,123.35 as its starting point, but note that Bracciale remains entitled to challenge the individual bill-back numbers used in the Gylling Memo. The government is entitled to respond, and the district court shall then make fact findings as to the loss amount.
Defendant Bracciale also appeals the district court’s two-level enhancement for abuse of a position of private trust under U.S.S.G. § 3B1.3. Section 3B1.3 provides for a two-level enhancement where “a defendant abused a position of public or private trust ... in a manner that significantly facilitated the commission or concealment of the offense.” U.S.S.G. § 3B1.3. There is no dispute that Bracciale occupied a position of private trust at Kraft and that his position of private trust significantly facilitated the commission of the offense. Therefore, Bracciale’s conduct is covered by § 3B1.1.
This does not end the inquiry because § 3B1.3 also states that “[t]his adjustment may not be employed if an abuse of trust ... is included in the base offense level or specific offense characteristic.” U.S.S.G. § 3B1.3 (emphasis added). Therefore, if either Bracciale’s base offense level or specific offense characteristics already took into account Braceiale’s abuse of trust, then the district court improperly applied § 3B1.3. If, however, Bracciale’s base offense level or specific characteristics did not take into account Bracciale’s abuse of trust, then the district court correctly applied § 3B1.3. We thus address Bracc-iale’s specific offense characteristics and then his base offense level. 7
A. Specific Offense Characteristics
As for Bracciale’s specific offense characteristics, ten levels were added because Kraft’s “loss” was over $500,000, and two levels were added because Bracciale’s offense involved more than minimal planning. The fact that Kraft’s loss was more than $500,000 in no way accounts for Bracciale’s abuse of trust. Rather, the ten-level enhancement is determined solely by the amount of loss and would apply equally to a senior executive or temporary mail room employee whose fraud resulted in a loss of more than $500,000.
Likewise, Bracciale’s two-level enhancement for more than minimal planning does not take into account his abuse of trust. The fact that his scheme was complex and warranted a two-level enhancement is irrelevant to the analysis under § 3B1.3 because the minimal-planning enhancement would be applied regardless of Bracciale’s position at Kraft. Thus, Bracciale’s abuse of trust was not included in his specific offense characteristics.
B. Base Offense Level
We turn to whether Bracciale’s abuse of trust is included in his base offense level of six under § 2F1.1(a). As noted earlier, § 2F1.1(a) assigns a base offense level of six to a wide variety of crimes, including fraud, deceit, forgery, and some counterfeiting offenses. U.S.S.G. § 2F1.1(a). Bracciale’s base offense level of six is not dependent on any abuse of trust or breach of fiduciary duty; rather, he was sentenced under § 2F1.1(a) because his underlying offense is a form of fraud. In fact, any defendant committing one of the numerous types of fraud listed under § 2F1.1(a) receives a base offense level of six irrespective of whether any abuse of trust or breach of fiduciary duty was involved in the commission of his fraud offense.
8
Therefore, we conclude that
We recognize that Bracciale’s plea agreement listed breach of fiduciary duty as an element of his underlying fraud offense. 9 As observed above, however, the base offense level of six in § 2F1.1 is for various forms of fraud and is not dependent on how the defendant committed the fraud or the elements of the particular fraud crime involved. For sentencing guideline purposes, Bracciale’s abuse of his position of trust or breach of his fiduciary duty is captured only by the abuse-of-trust enhancement. 10 Thus, the district court did not err in applying the abuse-of-trust enhancement.
C. Commentary to § SB1.S
Our conclusion is consistent with the commentary to § 3B1.3. The commentary to § 3B1.3 states that the “adjustment, for example, would apply in the case of ... a bank executive’s fraudulent loan scheme.” U.S.S.G. § 3B1.3, cmt. n. 1 (emphasis added). The commentary also states that the adjustment should “not apply in the case of an embezzlement or theft by an ordinary bank teller.” Id.
For example, a bank executive and bank teller engage in two separate, but identical fraudulent wire transfers. Although the government must prove the same underlying elements of the offense for both, the commentary to § 3B1.3 mandates that only the bank executive is eligible for the enhancement. This has nothing to do with the elements of their respective offenses, but rather it is based on the roles each individual has in the bank — one a position of trust and one not. Therefore, the commentary to § 3B1.3 already draws a distinction between those who should receive the enhancement and those who should not without regard to the elements of the underlying fraud offense.
See United States v. Milligan,
D. United States v. Garrison
We recognize that dicta in the Medicare fraud case of
United States v. Garrison,
The
Garrison
Court addressed the question of “whether the owner and chief executive officer of a home healthcare provider properly was accorded a two-level enhancement under U.S.S.G. § 3B1.3 for abusing a position of public trust by submitting falsified Medicare claims to a fiscal intermediary.”
After making that holding, the
Garrison
Court indicated that a § 3B1.3 enhancement was inapplicable for another reason. The Court agreed with Garrison’s argument that her offense conduct of perpetrating a fraud against Medicare via false cost reports was the same conduct being used as the basis for the abuse-of-trust enhancement.
Id.
Specifically, the
Garrison
Court stated that “[s]ince Garrison’s base fraud crime was the submission of false statements on cost reports submitted to Aetna for Medicare reimbursement, she cannot receive an enhancement for abuse of a position of public trust based on the same conduct under the specific terms of section 3B1.3.”
Id.
at 843. Because the Court first held that Garrison was not in a position of trust and ineligible for the enhancement, this “same-conduct” analysis is dicta and, therefore, is not binding on this Court.
11
We also note that this Court,
Further,
Garrison
relied on a Second Circuit decision in
Broderson,
for the proposition that “ ‘[t]he conduct that is the basis of the conviction must be independently criminal ... and not itself the abuse of trust.’ ”
Garrison,
Likewise, the Fifth Circuit, in
United States v. Buck,
In
Liss,
a jury found two doctors guilty of conspiracy to defraud the United States
For the foregoing reasons, we determine that Gamson’s conduct-based approach is dicta, was not mentioned (and thus not followed) in Liss, and is not binding in this case.
E. Double Counting
Our conclusion that the elements of Bracciale’s underlying offense do not control whether he is eligible to receive an abuse-of-trust enhancement is further supported by this Circuit’s case law concerning impermissible double counting.
“Impermissible double counting occurs only when one part of the Guidelines is applied to increase a defendant’s punishment on account of a kind of harm that has already been fully accounted for by application of another part of the Guidelines.”
United States v. Matos-Rodriguez,
In
United States v. Naves,
In
Naves,
this Court concluded that the two-level enhancement for carjacking did not constitute impermissible double counting.
Id.
at 1169. In so doing, the
Naves
Court stated that “[w]e must assume that the Sentencing Commission knew that the two point enhancement at issue herein would be imposed in every case involving a conviction under § 2119
Similarly, in
United States v. Phillips,
[T]he Sentencing Commission could have created a separate guideline for willful failure to pay child support with a base offense of eight. The fact that the Sentencing Commission elected not to draft a separate guideline does not render the application of the two-level enhancement under § 2B1.1(b)(7)(C) irrational. Rather, it is rational for the Sentencing Commission to use § 2B1.1 to establish a base offense level of six for the culpability incident to offenses involving larceny, embezzlement, and other forms of theft.
Id. at 1169. As noted in Naves and Phillips, the Sentencing Commission could have created a different guideline taking into account Bracciale’s abuse of trust and could have assigned that guideline a base offense level of eight. Rather, it is rational for the Sentencing Commission to use § 2F1.1 to establish a base offense level of six for a variety of fraud crimes, and to allow the abuse-of-trust enhancement to apply in cases like Bracciale’s. The fact that the Sentencing Commission elected not to establish a separate guideline for Bracciale’s specific crime does not render the application of § 3B1.3 to Bracciale irrational or result in impermissible double counting.
IV. CONCLUSION
For all the above reasons, we affirm the district court’s application of the abuse-of-trust enhancement in § 3B1.3. However, we vacate Bracciale’s sentence and remand this case for re-sentencing so that the district court may consider anew the loss amount under § 2F1.1. 15
Notes
. All citations to the sentencing guidelines herein are to the 1995 version, unless otherwise noted.
. 18 U.S.C. § 2 states:
Section 2. Principals
(a) Whoever commits an offense against the United States or aids, abets, counsels, commands, induces or procures its commission, is punishable as a principal.
(b) Whoever willfully causes an act to be done which if directly performed by him or another would be an offense against the United States, is punishable as a principal.
18 U.S.C. § 2.
. This plea agreement followed an earlier plea agreement which was subsequently withdrawn.
. The district court also ordered that Bracc-iale pay a $5,000 fine and pay Kraft restitution of $420,137.90.- In addition to the abuse-of-trust enhancement, the district court added two levels for more than minimal planning under § 2F1.1(b)(2)(A), but then decreased three levels for acceptance of responsibility under § 3E1.1. The district court also departed two levels downward for diminished capacity due to Bracciale's bipolar disorder under § 5K2.13, and two levels for overstatement of the seriousness of the offense, pursuant to application note ten under § 2F1.1. The parties did not appeal these determinations.
. "We review the application and interpretation of the Sentencing Guidelines de novo, and we review findings of fact for clear error.”
United States v. Snyder,
.
See United States v. Yeager,
. "While the district court’s factual determination that a defendant abused a position of [private] trust is reviewed for clear error, its conclusion that the defendant's conduct justifies the abuse-of-trust enhancement is a question of law that we review
de novo." United States
v.
Garrison,
. Section 2Fl.l(a) is entitled "Fraud and Deceit; Forgery; Offenses Involving Altered or
. On appeal, the government asserts that Bracciale's breach of honest services under § 1346 does not necessarily involve a breach of fiduciary duty in private sector § 1346 cases.
See United States v. deVegter,
. We note that there is a separate guideline for § 1343-46 fraud that is committed by public officials, as opposed to private parties such as Bracciale. See § 2C1.7. Section 201.7(a) assigns a base offense level of ten and its commentary specifically states that the abuse-of-trust enhancement should not be applied. U.S.S.G. § 2C1.7(a) & cmt. n. 4. This is further indication that the base offense level of six for fraud under § 2F1.1 does not capture the abuse of trust or otherwise § 2F1.1 likewise would state specifically that tire abuse-of-trust enhancement should not be applied.
.
See Kokkonen v. Guardian Life Ins. Co. of America,
. We note that the Second Circuit, in
United States v. Jolly,
. Specifically, the Fifth Circuit in Buck stated:
The other case relied on by [defendant] Buck, United States v. Garrison,133 F.3d 831 , 843 (11th Cir.1998), also fails to support her argument that the abuse of trust enhancement is unavailable for fraud convictions. In fact, the Eleventh Circuit has cited Ganison in affirming an abuse of trust enhancement to a fraud sentence. See United States v. Liss,265 F.3d 1220 , 1229-30 (11th Cir.2001).
. We note that the defendant in Naves was sentenced under the 1998 guidelines, as opposed to the 1995 version applicable here.
. Because we vacate Bracciale’s sentence, the district court on remand also may reconsider its various other sentencing decisions.
See, e.g., United States v. Le,